Despite another encouraging quarter for banks, highlighted by relatively high profits and lower loan-loss reserves, Federal Deposit Insurance Corp. (FDIC) officials said uncertainty about the broader economy is keeping lending depressed.

The FDIC's second-quarter earnings report showed that the industry's cautious approach is leading to profits, if not necessarily loan growth. Institutions steadily reduced delinquencies and loss provisions as they worked through problem loans, and margins benefited from lower funding costs.

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