FDIC: Deposits Up $1 Trillion in Q1
The Federal Deposit Insurance Corporation published its latest "Quarterly Banking Profile," which reviews the first quarter of 2020 in the banking industry in the U.S. It states, "On an annual basis, net interest income declined for the second consecutive quarter, falling by $2 billion (1.4 percent) from a year ago. Less than half (44.6 percent) of all banks reported annual declines in net interest income. The average net interest margin (NIM) for the banking industry was down 29 basis points from a year ago to 3.13 percent, as the decline in average earning asset yields outpaced the decline in average funding costs. The year-over-year compression of the NIM was broad-based, as it declined for all five asset size groups featured in the Quarterly Banking Profile." The FDIC continues, "Total deposit balances grew by $1.2 trillion (8.5 percent) from fourth quarter 2019. Interest-bearing accounts increased by $639.6 billion (6.4 percent) and noninterest-bearing accounts expanded by $446.3 billion (14.1 percent). Domestic deposits in accounts larger than $250,000 increased by $761.4 billion (10.8 percent) from fourth quarter 2019. Deposits held in foreign offices rose by $155.9 billion (11.8 percent). Nondeposit liabilities, which includes fed funds purchased, repurchase agreements, Federal Home Loan Bank (FHLB) advances, and secured and unsecured borrowings, increased by $147.1 billion (11.3 percent) from the previous quarter. The rise in nondeposit liabilities was primarily attributable to FHLB advances, which increased by $130.2 billion (27 percent). On an annual basis, total deposits increased by $1.9 trillion (13.3 percent), the largest year-over-year growth rate ever reported by the Quarterly Banking Profile." Finally, the profile says, "The number of FDIC-insured commercial banks and savings institutions declined from 5,177 to 5,116 during first quarter 2020. Two new banks were added, 57 institutions were absorbed by mergers, and one bank failed. The number of institutions on the FDIC's 'Problem Bank List' increased from 51 in fourth quarter 2019 to 54. Total assets of problem banks declined from $46.2 billion to $44.5 billion."
