Earnings Improvement Trend Reaches Three-Year Mark
The benefits of reduced expenses for loan losses outweighed the drag from declining net interest margins, as insured institutions posted a 12th consecutive year-over-year increase in quarterly net income. Banks earned $34.5 billion in the quarter, a $5.9 billion (20.7 percent) increase compared with second quarter 2011. Almost two out of every three banks (62.7 percent) reported higher earnings than a year ago. Only 10.9 percent were unprofitable, down from 15.7 percent in second quarter 2011.
The average return on assets (ROA) rose to 0.99 percent from 0.85 percent a year earlier. This is the third-highest quarterly ROA for the industry since second quarter 2007.
USA Banks Return on Assets by Year
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