FDIC Quarterly Banking Profile - Opening Statement
Third Quarter 2018
Good afternoon, and welcome to our release of third quarter 2018 results
for FDIC-insured institutions.
The banking industry reported another strong quarter and record profits.
Net income improved on higher net operating revenue and a lower effective
tax rate. Loan balances continued to increase, net interest margins
improved, and the number of “problem banks” continued to decline.
Community banks also reported another positive quarter. Net income at
community banks also benefitted from higher revenue and a lower effective
tax rate, and loan growth that was stronger than the overall industry.
It is worth noting that the current economic expansion is the second-longest
on record, and the nation’s banks are stronger as a result.
While results this quarter were positive, the extended period of low interest
rates and an increasingly competitive lending environment have led some
institutions to “reach for yield.” Additionally, the competition to attract loan
customers has been strong, and it will remain important for banks to
maintain their underwriting discipline and credit standards. These factors
have led to heightened exposure to interest-rate risk and credit risk.
Third Quarter 2018
Good afternoon, and welcome to our release of third quarter 2018 results
for FDIC-insured institutions.
The banking industry reported another strong quarter and record profits.
Net income improved on higher net operating revenue and a lower effective
tax rate. Loan balances continued to increase, net interest margins
improved, and the number of “problem banks” continued to decline.
Community banks also reported another positive quarter. Net income at
community banks also benefitted from higher revenue and a lower effective
tax rate, and loan growth that was stronger than the overall industry.
It is worth noting that the current economic expansion is the second-longest
on record, and the nation’s banks are stronger as a result.
While results this quarter were positive, the extended period of low interest
rates and an increasingly competitive lending environment have led some
institutions to “reach for yield.” Additionally, the competition to attract loan
customers has been strong, and it will remain important for banks to
maintain their underwriting discipline and credit standards. These factors
have led to heightened exposure to interest-rate risk and credit risk.
Opening Statement Third Quarter 2018 Quarterly Banking Profile
2
Attention to the prudent management of these risks will position banks to
be resilient so that they can sustain lending through the economic cycle.
I am joined here today by Diane Ellis, Director of the Division of Insurance
and Research; Pat Mitchell, Deputy Director of the Division of Insurance
and Research; and Doreen Eberley, Director of the Division of Risk
Management Supervision, to help provide details about bank performance
during the third quarter.
Diane, I will turn this over to you. Thank you.
2
Attention to the prudent management of these risks will position banks to
be resilient so that they can sustain lending through the economic cycle.
I am joined here today by Diane Ellis, Director of the Division of Insurance
and Research; Pat Mitchell, Deputy Director of the Division of Insurance
and Research; and Doreen Eberley, Director of the Division of Risk
Management Supervision, to help provide details about bank performance
during the third quarter.
Diane, I will turn this over to you. Thank you.