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FDIC: Bank Net Income Down but Sector Shows Signs of Strength

FDIC: Bank Net Income Down but Sector Shows Signs of Strength

Posted: Sep 14 2022
FDIC-insured banks and savings associations earned $64.4 billion in the second quarter of 2022, an 8.5% decrease from the year prior, the FDIC reported in its Quarterly Banking Profile. The decrease was driven by an increase in provision expense. Still, FDIC Acting Chairman Martin Gruenberg said the banking industry reported generally positive results for the quarter, but added that looking forward, “downside risks from inflation, rising interest rates, slowing economic growth and continuing pandemic and geopolitical uncertainties will continue to challenge bank profitability, credit quality and loan growth.”
 
The average net interest margin increased 26 basis points from the prior quarter to 2.8%, the highest quarterly growth since first quarter 2010, according to the report. Total loan and lease balances increased 3.7% from the previous quarter, with growth in several loan portfolios, including family residential loans, commercial and industrial loans, and consumer loans. Community banks reported a decline in net income of $523 million from a year ago.
 
Meanwhile, the average net charge-off rate fell four basis points year-on-year to 0.23. During the second quarter, six banks opened and no banks failed. The number of banks on the FDIC’s problem bank list held steady at a record low of 40.
 
To view the Quarterly Banking Profile, visit: https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2022jun/
 
 

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