The Federal Deposit Insurance Corp. said today that overall bank earnings declined in the third quarter, dropping nearly 4 percent from year-ago figures. The 6,891 institutions covered by the banking regulator reported net income of $36 billion in the third quarter, down from $37.5 billion a year ago. The FDIC said this is the first time since the second quarter of 2009 that profits have registered a year-over-year decline. The earnings decline was mainly attributable to a $4 billion increase in litigation expenses at one institution, the FDIC said. However, lower revenue from reduced mortgage activity and lower gains on asset sales also contributed to the reduction in earnings. Half of the nation's banks reported year-over-year growth in earnings, while half reported declines. The number of banks that were unprofitable fell to 8.6 percent, from 10.7 percent a year earlier. The FDIC said that industry earnings for the second quarter of 2013 had been revised downward, from $42.2 billion to $38.1 billion.