Chairman’s Opening Statement
Fourth Quarter 2016 Quarterly Banking Profile
February 28, 2017
Good morning, and welcome to our release of fourth quarter 2016 results
for FDIC-insured institutions.
The banking industry had another largely positive quarter. Both quarterly
and full-year earnings were up from the prior year, loan balances
increased, overall asset quality improved, and the number of unprofitable
banks and “problem banks” continued to fall.
Community banks also reported another solid quarter. Their revenue, net
income, and loan growth outpaced that of the overall industry.
Nevertheless, the industry continues to face challenges. Margin pressures
have 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 carefully for industry growth to remain on a
long-run, sustainable path. These challenges will continue to be a focus of
supervisory attention.
Fourth Quarter 2016 Quarterly Banking Profile
February 28, 2017
Good morning, and welcome to our release of fourth quarter 2016 results
for FDIC-insured institutions.
The banking industry had another largely positive quarter. Both quarterly
and full-year earnings were up from the prior year, loan balances
increased, overall asset quality improved, and the number of unprofitable
banks and “problem banks” continued to fall.
Community banks also reported another solid quarter. Their revenue, net
income, and loan growth outpaced that of the overall industry.
Nevertheless, the industry continues to face challenges. Margin pressures
have 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 carefully for industry growth to remain on a
long-run, sustainable path. These challenges will continue to be a focus of
supervisory attention.
Chairman’s Opening Statement Fourth Quarter 2016 Quarterly Banking Profile
2
Chart 1:
Our first chart shows that net income for the industry was 43.7 billion
dollars in the fourth quarter of 2016, up 3.1 billion dollars or 7.7 percent
from the fourth quarter of 2015. Net income benefited from higher revenues
and moderate expense growth.
Community banks reported net income of 5.3 billion dollars in the fourth
quarter, up 508 million dollars or 10.5 percent from a year earlier.
2
Chart 1:
Our first chart shows that net income for the industry was 43.7 billion
dollars in the fourth quarter of 2016, up 3.1 billion dollars or 7.7 percent
from the fourth quarter of 2015. Net income benefited from higher revenues
and moderate expense growth.
Community banks reported net income of 5.3 billion dollars in the fourth
quarter, up 508 million dollars or 10.5 percent from a year earlier.