The Federal Deposit Insurance Corp. has reported that the banking industry earned a $7.6 billion profit in the period from January to March--an ostensibly big rebound from the record loss of $36.9 billion in the fourth quarter. It would be easy to conclude that improved trading results and lower borrowing costs are really lifting the industry. But I think most people are wary. Big banks were the main show in the first quarter, and their showy results, as we've noted, may not be replicated in the second quarter.

There are lots of accounting headwinds that will make an analysts job that much tougher. The FDIC reports also noted that the number of troubled banks leaped to 305 in the first quarter. That's the highest since 1994, during the savings and loan crisis and up from 252 in the fourth quarter, notes the AP. In my mind, the key wild cards are potential credit card losses and commercial real estate related losses.

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