US banks earn a record $42.2 billion in second quarter

Danil Melekhin | E+ | Getty Images

U.S. banks earned more from April through June than during any quarter on record, aided by a steep drop in losses from bad loans.

The Federal Deposit Insurance Corp. says the banking industry earned $42.2 billion in the second quarter, up 23 percent from the second quarter of 2012.

Banks' losses on loans tumbled 30.7 percent from a year earlier to $14.2 billion, the lowest in six years. And bank lending increased 1 percent from the first quarter. Greater lending helps boost consumer and business spending, leading to more jobs and faster economic growth.

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Still, the report shows that the largest banks continue to drive the industry's profits while smaller institutions have struggled.