On November 28, the Federal Deposit Insurance Corporation (FDIC) announced in it’s Quarterly Banking Profile that insured commercial banks and savings institutions reported net income of $28.7 billion for the third quarter of 2007, a decline of $9.4 billion (which equates to 24.7%) from the third quarter of 2006. Reasons for the fall cited by the FDIC were the “steep increase in provisions for loan losses, as well as a decline in noninterest income.”

The Quarterly Banking Profile also presented findings with respect to the following topics: (i) provisions for loan losses rose sharply; (ii) asset-quality indicators continued to deteriorate; (iii) commercial and industrial loan growth remained very strong; (iv) noninterest income declined year-over-year; and (v) retail deposit growth lagged behind growth in assets.

The press released notes that the last time banks earned less than $30 billion in a quarter was the first quarter of 2003.  http://www.fdic.gov/news/news/press/2007/pr07097.html