While the big banks plead hardship and whine about having their profits eroded by regulatory reform, they fail to mention that the American banking industry appears to be doing okay, with 12 straight quarters of year-over-year growth and $34.5 billion in profit in the second quarter of 2012 alone.

According to the Federal Deposit Insurance Corp., that profit is an increase of almost 21% from the second quarter of 2011. It’s also right in line with the $35.3 billion profit earned in the first quarter.

“The banking industry continued to make gradual but steady progress toward recovery in the second quarter,” said FDIC Acting Chairman Martin J. Gruenberg.

Other positive trends:

* Only 15 FDIC-insured banks failed in the latest quarter. This is the fewest failures since the fourth quarter of 2008.

* Fewer banks are in danger of failing, as the number of “problem institutions” dropped from 772 to 732 in the first quarter, marking the fifth-straight quarterly decline.

Part of the reason for the brighter outlook is that banks are putting aside less cash to cover loan losses, as regulators put pressures on banks to adjust underwater loans. These adjustments often result in smaller losses than foreclosures.

Banks are also lending slightly more, with a 1.4% year-over-year increase in loan balances. The first quarter of 2012 was the only one in the last five quarters where loan balances decreased.

“This quarter’s return to loan growth is an encouraging development, but we will have to wait and see if the trend toward increased lending can be sustained,” Gruenberg said.

U.S. banks made $34.5-billion profit in second quarter [L.A. Times]

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