Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $2.8 billion in the third quarter of 2009. Earnings were more than three times what was reported a year earlier and an improvement over the industry's $4.3 billion net loss in the second quarter 2009.

In contrast, outstanding loan balances declined by the largest percentage since quarterly reporting began in 1984.

"There is no question that credit availability is an important issue for the economic recovery. We need to see banks making more loans to their business customers," said agency Chairman Sheila Bair. "This is especially true for small businesses that rely on FDIC-insured institutions to provide over 60 percent of the credit they use."

Total loans and leases declined by $210.4 billion (2.8 percent) during the quarter. Loans to commercial and industrial borrowers declined 6.5 percent, and real estate construction and development loans declined by $43.6 billion (8.1 percent).

The number of institutions on the FDIC's "Problem List" rose to its highest level in 16 years. At the end of September, there were 552 insured institutions listed, up from 416 on June 30th.

The complete Quarterly Banking Profile is available on the FDIC Web site.