FDIC Quarterly Banking Profile on Vacation Until Next Week
The Federal Deposit Insurance Corporation delayed releasing its quarterly banking profile until next week to await the return of all those currently away from their office. The FDIC normally publishes its comprehensive summary of the financial results for all the institutions it insures about 50 to 55 days after the end of each quarter. But a spokesman said the second-quarter report will be out next week rather than today because a lot of people are out of the office. "A lot of these people haven’t had any time off the past two years, so maybe it’s a good sign that they’re able to get a vacation," Christopher Whalen of the Institutional Risk Analytics said. "And a year ago, a lot of people were anxiously awaiting this data but that’s just not the case now." Whalen doesn’t expect the second-quarter figures to be worse than the first quarter or particularly bad, but he does think the financial sector could take a downturn in the second half of the year. He said expenses related to loan repurchases will approximate as charge offs that could weigh down bank earnings through the end of 2010. "My worry is that it may get worse later in the year, in Q3 and Q4," he said. "There are still a lot of bad banks out there and the big guys are still a mess." In May, the FDIC said the banks and thrifts it insures reported first-quarter earnings of $18 billion, which was up more than threefold from $5.6 billion a year earlier. The figure also represents the highest quarterly total since the first quarter of 2008. The agency said new accounting rules "had a major effect on several components of the industry’s balance sheets and income statement." The largest banks, which account for about half of the total figures, saw the biggest earnings gains during the first quarter of this year. On Friday, the FDIC reported the failure of eight banks last week pushing the yearly total to 118 failed banks through July. Meanwhile, The Seattle Times reported Friday that Sterling Financial raised $730 million from private equity and institutional investors to help its Sterling Savings Bank avoid being seized by the FDIC and sold. Washington’s second-largest bank said in a filing with the Securities and Exchange Commission that it raised $388 million through a private placement of stock with about 30 investors and both Thomas H. Lee Partners and Warburg Pincus increased their investments in the company to $170 million. Each of those firms now own 22.6% of the company’s common stock and have a seat on its board. Write to Jason Philyaw.