Recently, the FDIC released its fourth quarter report showing FDIC-insured institutions reported aggregate net income in the amount of $59.1 billion, up $33.8 billion, or 133.4 percent, over last year at this point in the year. According to the agency, this increase in earnings came as a result of higher net operating revenue and lower income tax expenses.
According to the FDIC press release, 5,406 institutions insured by the agency – more than 70 percent – reported year-over-year growth in quarterly earnings.
At right is the chart from the FDIC showing the graph of quarterly net income.
The FDIC also reported that the nation’s 4,979 insured community banks reported net income of $6.8 billion, which is up 65.1 percent over last year at this same time.
“The banking industry continued to report strong results,” FDIC Chairman Jelena McWilliams said. “Growth in net income was attributable to higher net operating revenue and a lower effective tax rate. Loan balances expanded, net interest margins improved, and the number of ‘problem banks’ continued to decline. Community banks also had a strong quarter, with annual loan growth and a net interest margin that exceeded the overall industry.”
“Low interest rates and an increasingly competitive lending environment have led some institutions to reach for yield, and the recent flattening of the yield curve may present new challenges in lending and funding. Therefore, banks must maintain prudent management of these risks in order to support lending through this economic cycle.”