FDIC Quarterly Banking Profile
Fourth Quarter 2018
Remarks of FDIC Chairman Jelena McWilliams:
Good afternoon, and welcome to our release of fourth-quarter and full-year
2018 performance results for FDIC-insured institutions.
Once again, the banking industry reported a strong quarter. 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” remains low.
Community banks also reported another positive quarter. Net income at
community banks also benefitted from higher revenue and a lower effective
tax rate, as well as loan growth that was stronger than the overall industry
during the year.
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 continue to lead
some institutions to “reach for yield.” With the recent flattening of the yield
curve, new challenges for institutions in lending and funding may emerge.
Fourth Quarter 2018
Remarks of FDIC Chairman Jelena McWilliams:
Good afternoon, and welcome to our release of fourth-quarter and full-year
2018 performance results for FDIC-insured institutions.
Once again, the banking industry reported a strong quarter. 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” remains low.
Community banks also reported another positive quarter. Net income at
community banks also benefitted from higher revenue and a lower effective
tax rate, as well as loan growth that was stronger than the overall industry
during the year.
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 continue to lead
some institutions to “reach for yield.” With the recent flattening of the yield
curve, new challenges for institutions in lending and funding may emerge.
Chairman’s Opening Statement Fourth Quarter 2018 Quarterly Banking Profile
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Furthermore, the competition to attract loan customers remains strong, and
therefore, banks need to maintain their underwriting discipline and credit
standards.
These factors have led to heightened exposure to interest-rate, liquidity,
and credit risk. Banks must prudently manage these risks in order to
sustain lending through the downside of this economic cycle when it
occurs.
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. They will provide details about bank
performance during the fourth quarter.
Diane, I will turn this over to you. Thank you.
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Furthermore, the competition to attract loan customers remains strong, and
therefore, banks need to maintain their underwriting discipline and credit
standards.
These factors have led to heightened exposure to interest-rate, liquidity,
and credit risk. Banks must prudently manage these risks in order to
sustain lending through the downside of this economic cycle when it
occurs.
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. They will provide details about bank
performance during the fourth quarter.
Diane, I will turn this over to you. Thank you.