FDIC-insured banks and savings institutions brought in $44 billion in income during the first quarter of 2017, according to the Quarterly Banking Profile released by the FDIC on Wednesday. This marks a 12.7 percent jump ($5 billion) over one year earlier.
According to the FDIC, the increase in earnings was largely due to a 7.8 percent jump in net interest income and a 3.4 percent rise in noninterest income.
More than half of FDIC-insured institutions saw year-over-year growth for Q1. Just 4.1 percent of institutions were unprofitable, down from 5.1 percent a year ago.
“Revenue and net income growth were strong, asset quality improved, and the number of unprofitable banks and ‘problem banks’ continued to fall,” FDIC Chairman Martin J. Gruenberg said.
According to Gruenberg, community banks also had a quarter of “solid revenue and net income growth.” FDIC-insured community banks reported income of $5.6 billion for the quarter—a 10.4 percent increase over Q1 2016. Community banks also saw net operating revenues rise (7 percent), as well as net interest income (7.1 percent) and noninterest income (6.8 percent).
Total loan and lease balances at FDIC-insured institutions were up 4 percent, though that growth rate is down compared to last month’s 5.3 percent. Total loan balances dropped by $8.1 billion over the fourth quarter of 2016, due in part to declining credit card balances—which dropped 5.5 percent.
“In the past two quarters, the industry has seen a slowdown in loan growth that is broad-based across major lending categories,” Greunberg said. “This slowdown has occurred as the economy approaches the end of the eighth year of a relatively modest expansion. Still, loan growth has remained at or above nominal GDP growth.”
On a positive note, the number of banks on the FDIC’s “Problem Bank List” declined during the first quarter of 2017, dropping from 123 to 112. This dip marks the smaller number of “problem” banks since March of 2008. Problem banks peaked at 888 during Q1 2011.
To view the full Quarterly Banking Profile, visit FDIC.gov.