US Bank Earnings up 7.3 Percent in 3Q U.S. bank earnings rose 7.3 percent in the July-September quarter from a year earlier, as banks reduced their expenses and continued to lend out more money, which help drive up revenue. The data issued Tuesday by the Federal Deposit Insurance Corp. showed that the banking industry continues to recover from the financial crisis that struck six years ago. Banks and other financial institutions insured by the FDIC earned $38.7 billion in the third quarter, up from $36.1 billion a year ago. The percentage of unprofitable banks fell to 6.4 percent of institutions, versus 8.7 percent a year ago. "The banking industry had another positive quarter," FDIC Chairman Martin J. Gruenberg said in a statement. Community banks, in particular, performed better than a year ago. Most importantly, third quarter income growth was based on revenue growth instead of lower loan-loss provisions. This can be a more sustainable foundation for continued earnings growth going forward. Banks loan balances rose by $50.2 billion to $8.2 trillion in the quarter, helped by an increase in commercial and industrial loans as well as auto loans. Mortgage lending activity fell slightly. However, overall lending is up 4.6 percent in the last year, a sign that banks are steadily loosening lending standards after the financial crisis. With the improving picture, the FDIC still acknowledged some concerns about the banking industry. Banks have been increasingly lending money to higher risk businesses and have been extending loans for longer periods of time. Also the ongoing low interest rate environment has made it difficult for banks to earn money on interest. "Nevertheless, third quarter results were largely good news for community banks and for the entire banking industry," Gruenberg said. The agency said the number of "problem banks" fell to 329 during the quarter, the lowest since the first quarter of 2009. Only two insured banks failed in the latest quarter versus six failed banks in the third quarter of 2013. The FDIC, created during the Great Depression to insure consumer's bank deposits, also monitors and examines the financial condition of U.S. banks. The agency is best known for its insurance policy of up to $250,000 per account.