“Earnings benefited from lower expenses for loan-loss provisions, goodwill impairment, and payrolls,” the FDIC said. “A majority of banks – 57.5 percent – reported year-over-year increases in quarterly earnings, and only 6.8 percent of banks were unprofitable, down from 8.4 percent a year ago. This is the lowest proportion of unprofitable institutions since first quarter 2006.”

Lastly, the number of so-called problem banks, or institutions at risk of failure, has declined to 354 from 411 – the smallest number of problem institutions since the end of the first quarter of 2009 and 60% below the most recent peak of 888 problem institutions at the end of the first quarter for 2011.

Financial Select Sector SPDR

For more information on the financial sector, visit our financial category.

Max Chen contributed to this article.