Chairman’s Opening Statement
First Quarter 2017 Quarterly Banking Profile
May 24, 2017
Good morning, and welcome to our release of first quarter 2017 results for
FDIC-insured institutions.
This was another largely positive quarter for the banking industry. Quarterly
revenue and net income growth from a year ago were both strong, asset
quality improved, and the number of unprofitable banks and “problem
banks” continued to fall.
Community banks also reported another solid quarter of revenue and net
income growth.
However, loan growth has slowed for the industry in the past two quarters
as the economy approaches the end of the eighth year of an expansion
marked by modest growth. Still, while loan growth has slowed, it has
remained at or above nominal economic growth.
The industry continues to face a challenging interest-rate environment and
competitive lending environment. This has led some institutions to “reach
for yield” through higher-risk assets and extended asset maturities. The
industry must manage interest-rate risk, liquidity risk, and credit risk
First Quarter 2017 Quarterly Banking Profile
May 24, 2017
Good morning, and welcome to our release of first quarter 2017 results for
FDIC-insured institutions.
This was another largely positive quarter for the banking industry. Quarterly
revenue and net income growth from a year ago were both strong, asset
quality improved, and the number of unprofitable banks and “problem
banks” continued to fall.
Community banks also reported another solid quarter of revenue and net
income growth.
However, loan growth has slowed for the industry in the past two quarters
as the economy approaches the end of the eighth year of an expansion
marked by modest growth. Still, while loan growth has slowed, it has
remained at or above nominal economic growth.
The industry continues to face a challenging interest-rate environment and
competitive lending environment. This has led some institutions to “reach
for yield” through higher-risk assets and extended asset maturities. The
industry must manage interest-rate risk, liquidity risk, and credit risk
Chairman’s Opening Statement First Quarter 2017 Quarterly Banking Profile
2
carefully to continue growing on a long-run, sustainable path. These
challenges will continue to be a focus of supervisory attention.
Chart 1:
Our first chart shows that net income for the industry was 44 billion dollars
during the first quarter of 2017, a 12.7 percent increase from the first
quarter of 2016. The improvement in net income was driven by strong
revenue growth.
Community banks reported net income of 5.6 billion dollars in the first
quarter, an increase of 10.4 percent from a year earlier.
2
carefully to continue growing on a long-run, sustainable path. These
challenges will continue to be a focus of supervisory attention.
Chart 1:
Our first chart shows that net income for the industry was 44 billion dollars
during the first quarter of 2017, a 12.7 percent increase from the first
quarter of 2016. The improvement in net income was driven by strong
revenue growth.
Community banks reported net income of 5.6 billion dollars in the first
quarter, an increase of 10.4 percent from a year earlier.