- Buffett's Berkshire Hathaway Boosts Wal-Mart Stake
- What's Kept Stock Rally Going? Fear, Not Confidence
- Fed to Keep Rates Low Despite Dollar's Fall: Bernanke
- Millions Could Have to Repay Part of Obama's Tax Credit
- Hollywood Turns to Porn as Unemployment Rises
- Slideshow: US Cities With Most Underwater Mortgages
- Solar Energy Emerges From a Dark Period
- Gold Is in a 'Bubble' And Will Keep Going Higher: Gartman
- Stanford Receiver to Release Funds Of Frozen Acounts
- Meredith Whitney: Turns Bearish
- 3 Stock Plays on Rising College Costs
- Warren Buffett's Berkshire Hathaway Almost Doubles Wal-Mart Holdings During Summer
- Nov. 16: Unusual Volume Leaders
- Getting To The Heart Of The Merck-Abbott Embargo Break
- What MGM's Sale Could Say About Value of Content
- My Ratings on Lowe's & Home Depot: Analyst
- S&P Stocks Trading at New 52-Week Highs
- Snoop Dogg Talks Biz
MOST SHARED
- Stocks Overvalued, Recession Will Return: Meredith Whitney
- Has Twitter's Finest Hours (Seconds) Come and Gone?
- Fed Likely to Keep Rates Low Despite Dollar's Fall: Bernanke
- U.S. May Wind Up Green With Envy
- Bernanke Offers Something For Everyone
- Millions May Have to Repay Part of Obama Tax Credit
- Underwater Mortgages Could Sink Even Deeper
- U.S. Cities With The Most Underwater Mortgages
- What's Kept the Rally Going? Investor Fear, Not Confidence
- Hollywood Turns to Porn as Unemployment Rises
Text Size 
U.S. banks set aside a record $31.3 billion for loan losses in the 2007 fourth quarter to offset weakening conditions in the housing and credit markets, the Federal Deposit Insurance Corp said on Tuesday.
For all of 2007, the U.S. bank industry set aside $68.2 billion for potential loan losses, the agency said in its quarterly report.
The industry's delinquent loans jumped 32.5 percent to $26.9 billion in the fourth quarter, the biggest quarterly percentage rise in 24 years, the agency said.
Meanwhile, earnings at U.S. banks and thrifts plunged 83.5 percent to a 16-year low of $5.8 billion in the fourth quarter, down from $35.2 billion a year earlier, the FDIC said.
"It's no surprise to anyone that the second half of 2007 was a very tough period for the banking industry," said FDIC Chairman Sheila Bair. "Fourth quarter results were heavily influenced by a number of well-publicized write-downs by large banks."
U.S. lending standards are tightening and loan demand is slowing, FDIC officials said.
"This is an inherently healthy process and it won't last forever," Richard Brown, the FDIC's chief economist, told reporters. The weakness in the credit markets "probably has several more quarters to run," he added.
Other FDIC officials said the agency expects the number of problem institutions to rise. There were 76 institutions on the FDIC's list of problem banks at the end of 2007, up from 50 at the end of 2006, the agency said. The list is based on capital adequacy, earnings, liquidity and management.
"We'll also need to keep a close eye -- as we've been doing for a number of months -- on loan portfolios other than housing, including commercial real estate, credit cards and small business," Bair said. "All of these are showing signs of stress as housing market weakness continues."
The FDIC insures deposits at more than 8,500 U.S. banks.
Print
Email
- Where, what, how.
- CNBC's Jim Goldman asks: Has the sun begun to set on Twitter? Data suggests its best days are over.
- Everyone wanted a piece of Madoff's "Bullship"--the famous buoy sold for $7,500 at auction. You won't believe these prices.
- De Loach Vineyards is selling its pinot noir the old fashioned way, helping to cut energy and transportation costs.
- Why are the Chinese concerned about the progress of U.S. health care legislation?
- CNBC's Maria Bartiromo talks to rapper Snoop Dogg about brand identity in both business and music.
Data is a real-time snapshot *Data is delayed at least 15 minutes