May 29, 2019 Media contact:
Julianne Fisher Breitbeil
(202) 898-6895
jbreitbeil@fdic.gov
FDIC-Insured Institutions Report Net Income of $60.7 Billion
in First Quarter 2019
Net Income Rises 8.7 Percent from a Year Earlier
Net Interest Margin Rises to 3.42 Percent
Community Banks’ Net Income Increases 10.1 Percent from a Year Earlier
Total Loan and Lease Balances Increase 4.1 Percent from First Quarter 2018
Number of “Problem Banks” Drops to 59
_______________________________
“The banking industry reported another positive quarter. The FDIC continues to encourage banks
to maintain prudent risk management in order to support lending through this economic cycle.”—
FDIC Chairman Jelena McWilliams
_______________________________
Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC)
reported aggregate net income of $60.7 billion in first quarter of 2019, up $4.9 billion (8.7 percent) from a year
earlier. The increase in net income was mainly attributable to a $7.9 billion (6 percent) increase in net interest
income. Financial results for first quarter of 2019 are included in the FDIC’s latest Quarterly Banking Profile
released today.
Julianne Fisher Breitbeil
(202) 898-6895
jbreitbeil@fdic.gov
FDIC-Insured Institutions Report Net Income of $60.7 Billion
in First Quarter 2019
Net Income Rises 8.7 Percent from a Year Earlier
Net Interest Margin Rises to 3.42 Percent
Community Banks’ Net Income Increases 10.1 Percent from a Year Earlier
Total Loan and Lease Balances Increase 4.1 Percent from First Quarter 2018
Number of “Problem Banks” Drops to 59
_______________________________
“The banking industry reported another positive quarter. The FDIC continues to encourage banks
to maintain prudent risk management in order to support lending through this economic cycle.”—
FDIC Chairman Jelena McWilliams
_______________________________
Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC)
reported aggregate net income of $60.7 billion in first quarter of 2019, up $4.9 billion (8.7 percent) from a year
earlier. The increase in net income was mainly attributable to a $7.9 billion (6 percent) increase in net interest
income. Financial results for first quarter of 2019 are included in the FDIC’s latest Quarterly Banking Profile
released today.
-2-
“The banking industry reported another positive quarter,” McWilliams said. “Growth in net income was mainly
attributable to higher net interest income. Net interest margins improved, asset quality indicators remained
stable, and the number of ‘problem banks’ continued to decline. Community banks also reported a strong
quarter, with annual loan growth and a net interest margin surpassing the overall industry.”
“With a historically low interest-rate environment and strong competition to attract lending, some institutions
have ‘reached for yield,’ which limited net interest margin expansion. With the recent stabilization of interest rate
hikes, some institutions may face new challenges in lending and funding. Therefore, banks must maintain
prudent risk management in order to support lending through this economic cycle.”
Highlights from the First Quarter 2019 Quarterly Banking Profile
Net Income Rises 8.7 Percent from a Year Earlier: The aggregate net income for the 5,362 FDIC-insured
institutions increased by $4.9 billion (8.7 percent) from a year ago to $60.7 billion, led by higher net interest
income. Almost two-thirds of all institutions reported annual increases in net income and less than 4 percent of
institutions were unprofitable. The average return on assets increased to 1.35 percent, up from 1.28 percent a
year earlier.
Community Banks Quarterly Net Income Increased 10.1 Percent from a Year Earlier: The 4,930 insured
institutions identified as community banks reported net income of $6.5 billion in the first quarter, up $596 million (10.1
percent) from a year earlier. The increase was driven by higher net interest income (up $1.1 billion, or 6.4 percent),
higher securities gains (up $110 million, or 206.7 percent), and lower provision expense (down $137 million, or 17.3
percent). Lower noninterest income (down $84 million, or 1.9 percent) and higher noninterest expense (up $585
million, or 4 percent) partially offset improvements to net income.
Net Interest Income Rises 6 Percent Over 12 Months: Net interest income totaled $139.3 billion in the first
quarter, up $7.9 billion (6 percent) from first quarter 2018. Nearly four out of five banks (79.3 percent) reported
an improvement in net interest income from a year earlier. The average net interest margin rose to 3.42
percent, up from 3.32 percent a year ago.
Total Loan and Lease Balances Increase 4.1 Percent from First Quarter 2018: Over the past 12 months,
total loan and lease balances increased by 4.1 percent, a slight decline from the 4.4 percent annual growth rate
reported last quarter. Growth among major loan categories was led by commercial and industrial loans, which
increased by $37.7 billion (1.7 percent), but was offset by credit card balances, which fell by $43.5 billion (4.8
percent). Total loan and lease balances fell by $4.8 billion from fourth quarter 2018, with commercial and
industrial loans registering the largest dollar increase from a year ago (up $155.6 billion, or 7.6 percent).
Asset Quality Indicators Remain Stable: The amount of loans that were noncurrent – 90 days or more past
due or in nonaccrual status – increased by $461.6 million (0.5 percent) during the first quarter. Noncurrent
balances declined for residential mortgages (down $2.2 billion, or 5 percent), but increased for commercial and
industrial loans (up $3.3 billion, or 22.8 percent). The average noncurrent loan rate remained unchanged from
the previous quarter (0.99 percent). Net charge-offs increased by $667.8 million (5.5 percent) from a year ago,
but the average net charge-off rate remained unchanged (0.50 percent).
The Number of Banks on the “Problem Bank List” Declines to 59: The FDIC’s Problem Bank List declined
from 60 to 59 during the first quarter, the lowest number of problem banks since first quarter 2007. Total assets
of problem banks declined from $48.5 billion in the fourth quarter to $46.7 billion. During the first quarter,
merger transactions absorbed 43 institutions, one new charter was added, and no failures occurred.
The Deposit Insurance Fund’s Reserve Ratio Remained Unchanged at 1.36 Percent: The Deposit Insurance
Fund (DIF) balance increased by $2.3 billion from the previous quarter to $104.9 billion. The increase was mainly
driven by assessment income, interest income, and unrealized gains on securities held by the DIF. The reserve ratio
remained unchanged (1.36 percent) from the previous quarter, as strong seasonal growth in insured deposits offset
the growth in DIF.
“The banking industry reported another positive quarter,” McWilliams said. “Growth in net income was mainly
attributable to higher net interest income. Net interest margins improved, asset quality indicators remained
stable, and the number of ‘problem banks’ continued to decline. Community banks also reported a strong
quarter, with annual loan growth and a net interest margin surpassing the overall industry.”
“With a historically low interest-rate environment and strong competition to attract lending, some institutions
have ‘reached for yield,’ which limited net interest margin expansion. With the recent stabilization of interest rate
hikes, some institutions may face new challenges in lending and funding. Therefore, banks must maintain
prudent risk management in order to support lending through this economic cycle.”
Highlights from the First Quarter 2019 Quarterly Banking Profile
Net Income Rises 8.7 Percent from a Year Earlier: The aggregate net income for the 5,362 FDIC-insured
institutions increased by $4.9 billion (8.7 percent) from a year ago to $60.7 billion, led by higher net interest
income. Almost two-thirds of all institutions reported annual increases in net income and less than 4 percent of
institutions were unprofitable. The average return on assets increased to 1.35 percent, up from 1.28 percent a
year earlier.
Community Banks Quarterly Net Income Increased 10.1 Percent from a Year Earlier: The 4,930 insured
institutions identified as community banks reported net income of $6.5 billion in the first quarter, up $596 million (10.1
percent) from a year earlier. The increase was driven by higher net interest income (up $1.1 billion, or 6.4 percent),
higher securities gains (up $110 million, or 206.7 percent), and lower provision expense (down $137 million, or 17.3
percent). Lower noninterest income (down $84 million, or 1.9 percent) and higher noninterest expense (up $585
million, or 4 percent) partially offset improvements to net income.
Net Interest Income Rises 6 Percent Over 12 Months: Net interest income totaled $139.3 billion in the first
quarter, up $7.9 billion (6 percent) from first quarter 2018. Nearly four out of five banks (79.3 percent) reported
an improvement in net interest income from a year earlier. The average net interest margin rose to 3.42
percent, up from 3.32 percent a year ago.
Total Loan and Lease Balances Increase 4.1 Percent from First Quarter 2018: Over the past 12 months,
total loan and lease balances increased by 4.1 percent, a slight decline from the 4.4 percent annual growth rate
reported last quarter. Growth among major loan categories was led by commercial and industrial loans, which
increased by $37.7 billion (1.7 percent), but was offset by credit card balances, which fell by $43.5 billion (4.8
percent). Total loan and lease balances fell by $4.8 billion from fourth quarter 2018, with commercial and
industrial loans registering the largest dollar increase from a year ago (up $155.6 billion, or 7.6 percent).
Asset Quality Indicators Remain Stable: The amount of loans that were noncurrent – 90 days or more past
due or in nonaccrual status – increased by $461.6 million (0.5 percent) during the first quarter. Noncurrent
balances declined for residential mortgages (down $2.2 billion, or 5 percent), but increased for commercial and
industrial loans (up $3.3 billion, or 22.8 percent). The average noncurrent loan rate remained unchanged from
the previous quarter (0.99 percent). Net charge-offs increased by $667.8 million (5.5 percent) from a year ago,
but the average net charge-off rate remained unchanged (0.50 percent).
The Number of Banks on the “Problem Bank List” Declines to 59: The FDIC’s Problem Bank List declined
from 60 to 59 during the first quarter, the lowest number of problem banks since first quarter 2007. Total assets
of problem banks declined from $48.5 billion in the fourth quarter to $46.7 billion. During the first quarter,
merger transactions absorbed 43 institutions, one new charter was added, and no failures occurred.
The Deposit Insurance Fund’s Reserve Ratio Remained Unchanged at 1.36 Percent: The Deposit Insurance
Fund (DIF) balance increased by $2.3 billion from the previous quarter to $104.9 billion. The increase was mainly
driven by assessment income, interest income, and unrealized gains on securities held by the DIF. The reserve ratio
remained unchanged (1.36 percent) from the previous quarter, as strong seasonal growth in insured deposits offset
the growth in DIF.