WASHINGTON U.S. bank earnings rose 21 percent in the April-June quarter and lending to consumers increased, adding to evidence that the industry is strengthening four years after the financial crisis.

The Federal Deposit Insurance Corp. said Tuesday that the banking industry earned $34.5 billion in the second quarter, up from $28.5 billion in the second quarter of 2011.

About 63 percent of U.S. banks reported improved earnings as they were able to set aside less for losses on loans. And the number of troubled banks fell for the fifth straight quarter.

Banks became less cautious about lending. Bank loans to consumers increased in most categories, including credit card loans and home mortgages, reversing a first-quarter decline.

“The industry continues to recover at a gradual but steady pace,” FDIC Chairman Martin Gruenberg said at a news conference.

Still, the gains in revenue remain “sluggish,” Gruenberg said. Total revenue increased only $1.3 billion – a slim 0.8 percent – in the second quarter from a year earlier.

Gruenberg said that the industry’s bottom line was affected by JPMorgan Chase & Co.’s nearly $6 billion in trading losses revealed recently from a soured bet in its London operation. “It certainly impacted the results, and without that I think it would have been a stronger picture,” he said.

JPMorgan reported second-quarter net income of $5 billion, or $1.21 per share, down from $5.4 billion, or $1.27 per share, a year earlier.

Banks with assets exceeding $10 billion drove the bulk of the earnings growth in the April-June period. While they make up just 1.5 percent of U.S. banks, they accounted for about 77 percent of the earnings.

Those banks include Bank of America Corp., Citigroup Inc., JPMorgan and Wells Fargo & Co. Most of them have recovered with help from federal bailout money and record-low borrowing rates.

Bank of America alone accounts for an $11 billion increase over the second quarter last year. This year, the Charlotte bank posted a $2.1 billion profit after a giant $9.1 billion loss the year before while it dealt with bad loans from Countrywide Financial Corp.

Wells Fargo earned a record $4.4 billion on continuing mortgage origination strength, its 10th straight quarter of record earnings.

The number of banks on the FDIC’s confidential “problem” list fell in the second quarter to 732, or around 10 percent of all federally insured banks. That compares with 772 troubled banks in the first quarter.

So far this year, 40 banks have failed. That’s far below the 92 banks that shuttered last year and the 157 that closed in 2010 – the most for one year since the height of the savings and loan crisis in 1992.

In the second quarter, fewer bank failures allowed the insurance fund to strengthen. The fund, which turned from deficit to positive in the second quarter of 2011, had a $22.7 billion balance as of June 30, according to the FDIC. That compares with $15.3 billion at the end of March.

The FDIC is backed by the government, and its deposits are guaranteed up to $250,000 per account. Apart from its deposit insurance fund, the agency also has tens of billions in loss reserves.

Staff writer Andrew Dunn contributed.