The latest quarterly report from the Federal Insurance Deposit Commission (FDIC) shows third-quarter 2013 income at South Carolina-based banks is up 34.7 percent from the same quarter last year. The banks reported aggregate net income of $167 million for the quarter, up from $124 billion the previous year.
They outpaced national commercial banks and savings institutions, which reported a 3.9 percent dip in aggregate net income from $37.5 billion to $36.0 billion in the third quarter of 2013.
“This is the first year-over-year decline in over four years, and it is mainly attributable to a $4 billion increase in litigation expenses at one institution,” said Martin Gruenberg, FDIC chairman, in a release. “Had it not been for that, the upward trend in earnings would have continued.”
Reduced mortgage activity also contributed to the drop in net operating revenue as higher interest rates affected mortgage refinance and other activity.
“This decline was largely driven by the increase in medium- and long-term interest rates that occurred in the second quarter,” Gruenberg said.
The report showed improving health in the banking industry, with fewer institutions reporting quarterly losses, fewer failed banks, and moderate growth in lending. Also, the number of banks on the FDIC’s “Problem List” dropped from from 553 to 515 during the quarter.
Because credit unions are insured by the National Credit Union Share Insurance Fund, they are not included in the report.