Wednesday, August 10, 2022

Banking profits increase in 2021’s second quarter

Despite the drop in net interest revenue, 64.1% of Oklahoma banks reported more net interest income than the previous year, according to the recently released Quarterly Banking Profile by the FDIC for the second quarter.

For Oklahoma banks, the average return on assets was 1.24% in the second quarter of 2020, up from 0.36% the previous quarter. The FDIC reported that community banks earned $8.3 billion in net income in the second quarter, up 29% year-on-year.

Total loan and lease balances grew 0.3% last year, the first quarterly gain in loan volume since the second quarter of 2020.

The net income of commercial banks has increased by $489 million, as well as total assets coming ahead of last quarter by $1.1 billion. Total deposits also increased by $1.3 billion. The percent of unprofitable institutions increased by 0.04% and the percent of institutions with earning gains jumped 1.85%.

Nationally, FDIC-insured banks and savings institutions earned $70.4 billion in the second quarter of 2021, a 281% increase from a year before at the height of the COVID-19 pandemic. Continued economic growth, improved credit conditions and banks adjusting expectations for potential credit losses drove the increase, the FDIC said. The average net interest margin fell by 31 basis points year-on-year in the first quarter to 2.5 %, the lowest level on record. As a result, net interest income fell 1.7% or $2.2 billion year-on-year.

Despite the decline in net interest income, 64.1% of banks reported higher net interest income compared with a year ago. Average return on assets was 1.24%, up from 0.36% in the second quarter of 2020. Community banks reported net income of $8.3 billion, a 29% increase in the second quarter year-on-year, the FDIC said.

To read more about Oklahoma’s, and the nation’s, numbers in the State Banking Performance Summary from the Quarterly Banking Profile, visit FDIC.gov.