Fewer Bank Failures: Federal Deposit Insurance Corp....

Fewer Bank Failures: Federal Deposit Insurance Corp. Chairman L. William Seidman said he expects the number of bank failures, which reached a record 221 in 1988, to decline by about 20% this year. At the same time, while the outlook for banks’ profits is good, their earnings are not likely to be as high as the record $25.2 billion earned in 1988, Seidman told a news conference. The nation’s 14,000 banks earned a record $6.5 billion in the fourth quarter. A decline in loan-loss expenses helped boost earnings. Seidman said strength in the economy was an important factor contributing to the record year for banks. The record number of failures was largely because of the depressed economy in the Southwest, where lower oil prices and a recession in the real estate industry resulted in increased bank failures.