A commercial or depository bank is typically a corporation that obtains either a federal or state charter to accept federally insured deposits and pay interest to depositors; make residential and commercial mortgage loans; provide check cashing and clearing services; and may underwrite securities that include U.S. Treasuries, municipal bonds, Fannie Mae and Freddie Mac issuances, and commercial paper (unsecured short-term loans to cover short-term liquidity needs). The permissible activities of depository banks are defined by statute. Congressional interest in the financial conditions of depository banks, also referred to as the commercial banking system, has increased following a challenging economic and regulatory environment. The conditions of the banking industry can be examined in terms of profitability, lending activity, and capitalization levels (to buffer against the financial risks); but this report focuses primarily on profitability and lending activity levels. These measures show that profitability for the banking industry has improved, but the rate of lending activity has not returned to pre-crisis levels. At the other extreme are the large financial institutions that have $10 billion or more in assets. The bank failure rate has since diminished with 92 bank failures in 2011, 51 bank failures in 2012, and 24 bank failures in 2013. As previously stated, declines in RoA and RoE may be attributed to loan repayment problems that led to an increase in the numbers of distressed institutions. The more rapid pace of non-current loans led to a substantial decline in the industry coverage ratio, shown in Figure 5 . Consequently, regulators are requiring banks to increase loan loss provisioning (as well as other components of regulatory capital) to levels that better match the levels of problem loans. Conclusion

The banking industry has exhibited profitability since the 2007-2009 financial crisis.
A bank is an institution that obtains either a federal or state charter that allows it to accept federally insured deposits and pay interest to depositors. In addition, the charter allows banks to make residential and commercial mortgage loans; provide check cashing and clearing services; underwrite securities that include U.S. Treasuries, municipal bonds, commercial paper, and Fannie Mae and Freddie Mac issuances; and other activities as defined by statute.
Congressional interest in the financial conditions of depository banks or the commercial banking industry has increased in the wake of the financial crisis that unfolded in 2007-2009, which resulted in a large increase in the number of distressed institutions. A financially strained banking system would have difficulty making credit available to facilitate macroeconomic recovery.
The financial condition of the banking industry can be examined in terms of profitability, lending activity, and capitalization levels (to buffer against the financial risks). This report focuses primarily on profitability and lending activity levels. Issues related to higher bank capitalization requirements are discussed in CRS Report R42744, U.S. Implementation of the Basel Capital Regulatory Framework, by [author name scrubbed].
The banking industry continues consolidating, with more total assets held by a smaller total number of institutions. There are fewer problem banks since the peak in 2011, as well as fewer bank failures in 2013 in comparison to the peak amount of failures in 2010. Non-current loans still exceed the capacity of the banking industry to absorb potential losses (should they become uncollectible), meaning that news of industry profitability should be tempered by the news that aggregate loan loss provisions are currently insufficient. Consequently, the rate of bank lending growth may not return to pre-crisis levels until loan-loss capacity exhibits even more improvement.