U.S. banks had $40.2 billion in net income in the second quarter as lenders cut costs to offset a decline in trading income, the Federal Deposit Insurance Corp. said in its quarterly snapshot of the industry’s performance.

After a record-setting 2013 averaged $38.6 billion in industrywide profit per quarter, banks have had mixed results this year, the FDIC said in the Quarterly Banking Profile released in Washington today.

“Net income was up, asset quality improved, loan balances grew at their fastest pace since 2007, and loan growth was broad-based,” FDIC Chairman Martin Gruenberg said in a statement. The agency is still focusing on challenges including pressure from narrow net interest margins and “increasing higher-risk loans to leveraged commercial borrowers,” he said.

Wells Fargo & Co. reported a 3.8 percent increase on lower credit costs even as some of the other large banks were a drag on industry revenue, with Bank of America Corp., the second- biggest U.S. bank, showing a 43 percent decline in quarterly profits after spending $4 billion on litigation costs and JPMorgan Chase & Co.’s net income falling 7.9 percent from the year before.

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