Monday, September 26, 2022

Bank performance remained strong throughout 2016

FDIC-insured banks and savings institutions across the country earned $43.7 billion in the fourth quarter, up 7.7 percent from the industry’s earnings a year before, according to the most recent FDIC statistics.

Oklahoma banks also performed well.

“Banks continued to be a positive economic force in 2016 with robust year-over-year growth in business loans, as well as commercial real estate and construction lending,” said American Bankers Association Chief Economist Jim Chessen. “A strong revival in business confidence — buoyed by expectations of tax relief and less red tape — is likely to accelerate loan demand in 2017, creating even more opprtunities for banks to provide the credit necessary for companies to grow and expand their workforce.”

Community bank revenue growth outpaced the rest of the industry at 10.5 percent and profits totaled $5.3 billion. The proportion of banks that were unprofitable fell to 8.1 percent from 9.6 percent in 2015, and the number of institutions on the problem bank list dropped from 132 to 123. The Deposit Insurance Fund rose to $83.2 billion during the quarter.

As noted earlier, Oklahoma banks continued to perform well, with net income of $1.272 billion, just shy of another record earnings year recorded at the end of 2015. The industry set an earnings record at the end of 2014 but that was short-lived and was surpassed by the industry’s earnings in 2015.  Other key highlights in 2016 include:

Assets — $108.9 billion, up $7.2 billion from 2015 (7.1 percent);
Loans/leases — $71.2 billion, up $6.3 billion from 2015 (9.7 percent);
Equity capital — $11.1 billion, up $922 million from 2015 (9 percent);
ROA    —1.21 percent, down from 2015 (1.34);
ROE    — 11.95 percent, down from 2015 (13.29);
Charge-offs/loans — 0.16 percent, up 0.7 percent from 2015;
Non-interest income — 1.46 percent, down .11 percent from 2015 (1.57);
Non-current loans — 2.90 percent, down 0.12 percent from 2015 (3.03);
NIM    — 3.59 percent, up 0.08 percent from 2015 (3.51).