U.S. banks see higher net income, expand lending in second quarter - FDIC

WASHINGTON (Reuters) - U.S. banks saw their net income increase $584 million, or 1.4 percent, compared to the second quarter of last year in a sign of strength for the sector, according to the Federal Deposit Insurance Corporation.

Total credits increased 1.5 percent, $241 billion, in the second quarter driven largely by new home loans and real estate credits, the regulator said on Tuesday. Credit card balances and loans to non-banks also increased.

"Income and revenue both increased from a year ago," FDIC Chairman Martin Gruenberg said in a statement. "Loan growth remained strong, the number of unprofitable banks was at an 18-year low."

Low prices for fossil fuels continue to put pressure on the energy sector and banks that offered credit to that industry may face further stress, Gruenberg said.

"We likely have not yet seen the full impact of low energy prices on the banking industry," he said in a statement.

In a separate announcement, the FDIC said the largest U.S. banks would begin contributing more to the insurance fund to comply with the Dodd Frank Wall Street reform legislation.

(Reporting by Patrick Rucker; Editing by Chizu Nomiyama)

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