Chairman’s Opening Statement
Third Quarter 2016 Quarterly Banking Profile
November 29, 2016
Good morning, and welcome to our release of third quarter 2016 results for
FDIC-insured institutions.
The banking industry reported another positive quarter. Revenue and net
income were up from a year ago, loan balances increased, asset quality
improved, and the number of unprofitable banks and “problem banks”
continued to fall.
Community banks also reported another solid quarter. Their revenue and
loan growth outpaced that of the overall industry.
Despite a relatively strong quarter, the industry faces continued challenges.
The persistent, low-rate environment remains an issue. And banks must
position themselves for rising interest rates going forward.
Current oil and gas prices continue to put pressure on borrowers that
depend on the energy sector. This stress has contributed to modest
increases in noncurrent loans and loan charge-offs in energy-dependent
regions.
Third Quarter 2016 Quarterly Banking Profile
November 29, 2016
Good morning, and welcome to our release of third quarter 2016 results for
FDIC-insured institutions.
The banking industry reported another positive quarter. Revenue and net
income were up from a year ago, loan balances increased, asset quality
improved, and the number of unprofitable banks and “problem banks”
continued to fall.
Community banks also reported another solid quarter. Their revenue and
loan growth outpaced that of the overall industry.
Despite a relatively strong quarter, the industry faces continued challenges.
The persistent, low-rate environment remains an issue. And banks must
position themselves for rising interest rates going forward.
Current oil and gas prices continue to put pressure on borrowers that
depend on the energy sector. This stress has contributed to modest
increases in noncurrent loans and loan charge-offs in energy-dependent
regions.
Chairman’s Opening Statement Third Quarter 2016 Quarterly Banking Profile
2
The challenging environment has led some institutions to reach for yield
through higher-risk assets and extended asset maturities. Banks must
manage their interest-rate risk, liquidity risk, and credit risk prudently to
ensure that growth is on a long-run, sustainable path. These challenges
continue to be a focus of our supervisory attention.
2
The challenging environment has led some institutions to reach for yield
through higher-risk assets and extended asset maturities. Banks must
manage their interest-rate risk, liquidity risk, and credit risk prudently to
ensure that growth is on a long-run, sustainable path. These challenges
continue to be a focus of our supervisory attention.