After discouraging first-quarter earnings, investors are once again griping about the state of the country's largest banks. Tepid loan demand and low interest rate spreads have caused bank revenues to crawl at an unusually sluggish pace.

However, despite not raking in record revenues, banks have taken advantage of the low interest rates to shore up balance sheets and reduce long-term funding costs.

In this video, Motley Fool banking analysts David Hanson and Matt Koppenheffer grade the current state of the banking sector and tell investors why it isn't all bad news.