FDIC Quarterly Banking Profile
The latest "FDIC Quarterly Banking Profile" says, "Higher net interest income and restrained growth in operating expenses helped lift banking industry profits in second quarter 2017. The 5,787 commercial banks and savings institutions insured by the FDIC reported net income of $48.3 billion for the quarter, an increase of $4.7 billion (10.7 percent) compared with the second quarter of 2016. Almost two out of every three banks -- 63.4 percent -- reported year-over-year earnings improvement, while only 4.1 percent were unprofitable, down from 4.6 percent a year earlier. The average return on assets (ROA) rose to 1.14 percent from 1.06 percent the year before. This is the highest quarterly ROA for the industry since second quarter 2007.... Net operating revenue -- the sum of net interest income and total noninterest income -- rose to $190.5 billion in the second quarter, an $11 billion (6.1 percent) increase from second quarter 2016. Most of the improvement consisted of higher net interest income, which was $10.3 billion (9.1 percent) higher than a year earlier. The increase in net interest income helped lift the industry's net interest margin (NIM) to 3.22 percent, from 3.08 percent in second quarter 2016. This is the highest quarterly NIM since fourth quarter 2013. While 57.7 percent of all banks reported higher NIMs, the improvement was greatest at larger institutions. More of their assets reprice or mature in the short term, and they are better-positioned to benefit from rising short-term interest rates. Noninterest income totaled $66.8 billion, up $654 million (1 percent) from a year earlier. Income from asset servicing was $1 billion (93.9 percent) higher, while gains on asset sales were $1.6 billion (31.7 percent) lower. Trading income fell $313 million (4.5 percent)." It adds, "The Deposit Insurance Fund (DIF) balance increased by $2.7 billion, to $87.6 billion, during the second quarter. Assessment income of $2.6 billion, which includes temporary assessment surcharges on large banks, drove the fund balance increase.... The deposit insurance assessment base -- average consolidated total assets minus average tangible equity -- increased by 0.5 percent in the second quarter and by 3.5 percent over 12 months. Total estimated insured deposits decreased by 0.4 percent in the second quarter of 2017 but rose by 5.5 percent year-over-year."
