PRESS RELEASE
Federal Deposit Insurance Corporation
September 12, 1995
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's
banking system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing
risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its
operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-55-95
COMMERCIAL BANKS EARNED RECORD $12 BILLION IN
THE SECOND QUARTER
FOR IMMEDIATE RELEASE
Commercial banks posted record earnings of $12 billion in the second quarter of 1995,
according to preliminary data released today by the FDIC. This tops the $11.1 billion
earned in the first quarter of the year and the previous all-time high of $11.8 billion in the
third quarter of 1994. Profits for the first six months of 1995 totaled $23.2 billion, also a
record.
FDIC Chairman Ricki Helfer said "the banking industry's recent performance has been
extraordinary" and that "the industry has recapitalized the Bank Insurance Fund far
faster than anyone could have anticipated just a few years ago." Given that the industry
"has never been stronger financially," she said, the opportunity exists to protect the
deposit insurance funds by addressing the problem of the seriously undercapitalized
Savings Association Insurance Fund and to eliminate unnecessary restrictions on
banks.
The FDIC cited near-record loan growth and higher noninterest income as key factors in
commercial banks' strong earnings performance during the second quarter. Banks
continued to shift investments to loans from securities, resulting in higher yields. Loan
growth was broad-based and at the same rapid pace set in the first quarter.
Chairman Helfer noted: "The lending mix has continued to shift toward loans that
traditionally reflect relatively more diversified credit risk, primarily mortgage loans, credit
cards and other loans to individuals, and away from types of loans that reflect more
concentrated credit risk, such as commercial real estate loans."
Total loans increased 12.5 percent ($75 billion) during the second quarter, led by gains
in residential real estate loans (up $24 billion), commercial and industrial loans (up $18
billion) and consumer loans (up $13 billion). The growth in commercial loans slowed
Federal Deposit Insurance Corporation
September 12, 1995
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's
banking system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing
risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its
operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-55-95
COMMERCIAL BANKS EARNED RECORD $12 BILLION IN
THE SECOND QUARTER
FOR IMMEDIATE RELEASE
Commercial banks posted record earnings of $12 billion in the second quarter of 1995,
according to preliminary data released today by the FDIC. This tops the $11.1 billion
earned in the first quarter of the year and the previous all-time high of $11.8 billion in the
third quarter of 1994. Profits for the first six months of 1995 totaled $23.2 billion, also a
record.
FDIC Chairman Ricki Helfer said "the banking industry's recent performance has been
extraordinary" and that "the industry has recapitalized the Bank Insurance Fund far
faster than anyone could have anticipated just a few years ago." Given that the industry
"has never been stronger financially," she said, the opportunity exists to protect the
deposit insurance funds by addressing the problem of the seriously undercapitalized
Savings Association Insurance Fund and to eliminate unnecessary restrictions on
banks.
The FDIC cited near-record loan growth and higher noninterest income as key factors in
commercial banks' strong earnings performance during the second quarter. Banks
continued to shift investments to loans from securities, resulting in higher yields. Loan
growth was broad-based and at the same rapid pace set in the first quarter.
Chairman Helfer noted: "The lending mix has continued to shift toward loans that
traditionally reflect relatively more diversified credit risk, primarily mortgage loans, credit
cards and other loans to individuals, and away from types of loans that reflect more
concentrated credit risk, such as commercial real estate loans."
Total loans increased 12.5 percent ($75 billion) during the second quarter, led by gains
in residential real estate loans (up $24 billion), commercial and industrial loans (up $18
billion) and consumer loans (up $13 billion). The growth in commercial loans slowed
from the $33 billion increase recorded in the first quarter of the year. Loans to small
businesses and small farms, which are reported annually each June, showed a gain of
seven percent during the year.
Other factors contributing to second-quarter profits included higher noninterest income
(up nearly $1 billion over the first quarter) and gains of $350 million on sales of
securities.
As for improved asset quality, noncurrent loans and leases declined after a brief uptick
in the first quarter, and foreclosed assets declined for the 11th consecutive quarter. In
the aggregate, troubled assets were 0.94 percent of total assets, compared to 1.27
percent a year ago and 3.24 percent four years ago.
Second-quarter results for the nation's 10,168 insured commercial banks and 2,081
insured savings institutions are presented in the latest Quarterly Banking Profile (QBP).
The latest QBP analyzes bank and thrift results for the second quarter and first half of
1995.
FDIC-insured savings institutions earned $1.9 billion in the second quarter, which trails
only the $2.4 billion the industry earned in the first quarter of 1993 when one-time
accounting gains boosted profits. Thrifts' aggregate return on assets (ROA) was 0.76
percent for the second quarter, compared to 0.69 percent in the first quarter and 0.72
percent in the second quarter of 1994.
# # #
The Quarterly Banking Profile is available as follows:
On the Internet: Via the World Wide Web at www.fdic.gov. Or, it can be accessed
through Gopher at gopher.fdic.gov.
By Fax: Use the phone attached to your fax machine, dial 1-804- 862-0003 and follow
the voice prompts to request Document No. 216.
Mail or Messenger: Contact the FDIC's Office of Corporate Communications at 202-
898-6996.
Last Updated 07/14/1999 communications@fdic.gov
businesses and small farms, which are reported annually each June, showed a gain of
seven percent during the year.
Other factors contributing to second-quarter profits included higher noninterest income
(up nearly $1 billion over the first quarter) and gains of $350 million on sales of
securities.
As for improved asset quality, noncurrent loans and leases declined after a brief uptick
in the first quarter, and foreclosed assets declined for the 11th consecutive quarter. In
the aggregate, troubled assets were 0.94 percent of total assets, compared to 1.27
percent a year ago and 3.24 percent four years ago.
Second-quarter results for the nation's 10,168 insured commercial banks and 2,081
insured savings institutions are presented in the latest Quarterly Banking Profile (QBP).
The latest QBP analyzes bank and thrift results for the second quarter and first half of
1995.
FDIC-insured savings institutions earned $1.9 billion in the second quarter, which trails
only the $2.4 billion the industry earned in the first quarter of 1993 when one-time
accounting gains boosted profits. Thrifts' aggregate return on assets (ROA) was 0.76
percent for the second quarter, compared to 0.69 percent in the first quarter and 0.72
percent in the second quarter of 1994.
# # #
The Quarterly Banking Profile is available as follows:
On the Internet: Via the World Wide Web at www.fdic.gov. Or, it can be accessed
through Gopher at gopher.fdic.gov.
By Fax: Use the phone attached to your fax machine, dial 1-804- 862-0003 and follow
the voice prompts to request Document No. 216.
Mail or Messenger: Contact the FDIC's Office of Corporate Communications at 202-
898-6996.
Last Updated 07/14/1999 communications@fdic.gov