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FDIC-Insured Institutions Reported $62 Billion in Net Income in Third Quarter 2018

November 20, 2018 / Source: FDIC

Press Releases

FOR IMMEDIATE RELEASE
November 20, 2018

Media contact:
Julianne Fisher Breitbeil 
(202) 898-6895
jbreitbeil@fdic.gov

FDIC-Insured Institutions Reported $62 Billion in Net Income in Third Quarter 2018

Community Bank Net Income Increases to $6.8 Billion

  • Industry Net Income Registers a Strong Increase of 29.3 Percent from a Year Ago
  • Higher Net Operating Revenue and a Lower Effective Tax Rate Boost Net Income
  • Community Bank Net Income Rises 21.6 Percent from Third Quarter 2017
  • Net Interest Margin Widens to 3.45 Percent as Asset Yield Increases Outpace Funding Cost Growth
  • Annual Growth Rate for Loan and Lease Balances Is 4 Percent
  • Noncurrent Rate Continues to Decline and Net Charge-Off Rate Remains Stable

“While the banking industry reported another positive quarter, we continue to monitor its overall performance in a rising interest-rate environment with competitive lending conditions.” 
— FDIC Chairman Jelena McWilliams 

Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $62 billion in the third quarter of 2018, up $14 billion (29.3 percent) from a year ago. The improvement in earnings was attributable to higher net operating revenue and a lower effective tax rate. Financial results for the third quarter of 2018 are included in the FDIC's latest Quarterly Banking Profile released today.

Of the 5,477 insured institutions reporting third quarter financial results, more than 70 percent reported year-over-year growth in quarterly earnings. The percent of unprofitable banks in the third quarter declined to 3.5 percent from 4 percent a year ago.

“The banking industry reported another strong quarter,” FDIC Chairman Jelena McWilliams said. “Improvement in net income was led by higher net operating revenue and a lower effective tax rate. Loan balances grew, net interest margins improved, and the number of ‘problem banks’ continued to decline. Community banks also reported another positive quarter, with loan growth and a net interest margin surpassing the overall industry.”

“While the performance results were strong, the extended period of low interest rates and the competition to attract loan customers have led to heightened exposure to interest-rate risk, and credit risk. Banks must maintain prudent management of these risks in order to sustain lending through the economic cycle.”

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