FDIC Reports Good News: Fewer U.S. Banks Troubled

As Bank of America's stock dropped to a 52-week low in trading Tuesday and UBS became the latest bank to announce jobs cuts there was good news from the financial services industry -- a quarterly report from the FDIC showing that banks' finances are improving.

The Federal Deposit Insurance Corp. released its quarterly report Tuesday, revealing that the number of troubled banks in the U.S. has declined. The report contained other good news as well, including numbers that show bank lending is on the rise, and that the deposit-insurance fund is positive for the first time in two years.

The FDIC maintains a list of troubled banks, essentially a tally of U.S. financial institutions considered by varying factors at risk. The latest total of the FDIC's troubled banks list contained 865 institutions from among America's 7,513 banks. That's a drop of 23 institutions from the first quarter of 2011 and the first decline in the number since 2006.

Other positive numbers from the FDIC's quarterly report included information that banks posted an eighth consecutive profitable quarter, while the number of bank failures in the second-quarter declined from the first quarter from 26 to 22. That number is the smallest number of failures since the first quarter of 2009.

The FDIC noted, however, that banks still face challenges into the future.

The report gave a lift to Bank of America's stock Tuesday, which traded down as much as five percent early in the trading day. Henry Blodget stated the bank could need as much as $100 to $200 million in capital, while some analysts agreed that Bank of America will need capital, although perhaps not that much.

But after the FDIC report, Bank of America's stock rose a bit, and was trading down 1.64 percent to $6.31 at 1 p.m. ET.