US Banking Industry

FDIC Quarterly Banking Profile

The vast majority of US banks belong or are insured by FDIC.

Statistic	As of 10/6/2023
Total Insured Institutions	4,634
Total Insured Branch Offices	79,974
Total Assets	$23,559,904
Total Deposits	$18,698,469

Historical Data

Quarterly Net Income

https://www.yardeni.com/pub/fdicqbnkprofile.pdf

https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/

Quarterly Net Interest Margin

https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/

Unrealized Gains (Losses) on Investment Securities

https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/

Reserve Coverage Ratio

https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/

Noncurrent Loan Rate and Quarterly Net Charge-Off Rate

https://www.yardeni.com/pub/fdicqbnkprofile.pdf

https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/

Number and Assets of Banks on the "Problem Bank List"

https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/

Quaterly Updates

Q3 2023

• As shown in this chart, the banking industry reported net income of $68.4 billion in the third quarter, down $2.4 billion (or 3.4 percent) from the prior quarter. Community banks reported a decline of 4.8 percent in net income from last quarter as higher losses on the sale of securities and higher noninterest expenses more than offset higher noninterest income.
• After declining in the prior two quarters, the industry’s net interest margin increased modestly in the third quarter. Although this is an improvement, it largely reflects stabilization in the cost of non–deposit liabilities this quarter as the cost of deposits increased more than the yield on loans. The industry’s net interest margin increased three basis points from last quarter to 3.30 percent, and is five basis points above the pre–pandemic average. The net interest margin for community banks declined for the third consecutive quarter, driven by lagging earning asset yields.
• In the third quarter, domestic deposits declined for the sixth consecutive quarter, though the outflow of deposits continued to moderate from the large outflows experienced in the first quarter. The level of liquid assets fell in the third quarter due to a reduction in securities portfolios. Total deposits were $18.6 trillion, down 0.5 percent quarter over quarter, similar to the 0.5 percent decline reported in the second quarter. Domestic deposits declined $39.6 billion, or 0.2 percent quarter over quarter.
• The banking industry’s holdings of longer–term loans and securities declined for a third consecutive quarter. The ratio of longer–term assets to total assets is 37.5 percent, still above the pre–pandemic average of 35.0 percent. The quarterly decline was led by a reduction in securities portfolios. Loans and securities with fixed, lower yields may pressure earnings in coming quarters.
• Unrealized losses on available–for–sale and held–to–maturity securities increased to $683.9 billion in the third quarter. Higher market interest rates and mortgage rates caused market values for debt to decline during the quarter.
• The third quarter liquid–assets–to–uninsured–deposits ratio declined to 82.8 percent because of a reduction in securities.
• Total loans increased by $45.9 billion, or 0.4 percent, during the quarter. An increase in credit card balances and one–to–four family residential mortgages more than offset declines in commercial and industrial loans. The annual loan growth rate declined to 2.9 percent in the third quarter, reflecting surveys that indicate lower loan demand and tighter underwriting standards compared to last year.
• The noncurrent rate increased seven basis points from the second quarter to 0.82 percent, driven by increases in nonfarm, nonresidential commercial real estate noncurrent balances. This ratio is well below the industry’s 1.28 percent pre–pandemic average noncurrent rate.
• The industry’s net charge–off rate increased two basis points during the quarter to 0.51 percent; this ratio is above its pre–pandemic average of 0.48 percent. Higher credit card charge–off balances drove the annual increase.
• Our next chart shows that the noncurrent loan balances grew at a faster pace than the allowance for credit losses, resulting in a decline in the reserve coverage ratio. The ratio of the allowance for credit losses to noncurrent loans fell from a peak of 224.8 percent last quarter to 209.9 percent this quarter.

Q2 2023

• Net income declined $9.0 billion (11.3 percent) from one quarter ago to $70.8 billion in second quarter 2023. Declines in noninterest income, reflecting the accounting treatment of the acquisition of three failed institutions, lower net interest income, and higher provision expense drove the decrease. Year-over-year net income increased $6.4 billion (9.9 percent), as growth in net interest income exceeded growth in provision expense and noninterest expense.
• Following a decline of 7 basis points in first quarter, the net interest margin (NIM) declined 3 basis points to 3.28 percent in the second quarter. The NIM remains 48 basis points higher than the yearago quarter and above the pre-pandemic average of 3.25 percent. The decline in the NIM reflects the cost of funds (i.e., the interest banks pay on deposits and other borrowings) rising at a faster rate than yields on earning assets (i.e., the interest banks earn on loans and securities). The yield on earnings assets increased 40 basis points from first quarter 2023 to 5.32 percent, while the cost of funds increased 43 basis points to 2.05 percent.
• Net operating revenue (net interest income plus noninterest income) declined $9.2 billion (3.5 percent) from the prior quarter to $252.5 billion. Noninterest income declined $7.8 billion (9.1 percent) and net interest income declined $1.4 billion (0.8 percent). From the year-ago quarter, net operating revenue rose $24.5 billion (10.7 percent), as net interest income grew $23.2 billion (15.4 percent) and noninterest income increased $1.3 billion (1.7 percent).
• Despite the aggregate growth in noninterest expense for the banking industry, the efficiency ratio (noninterest expense to net operating revenue) declined 3 percentage points from the year-ago quarter to 55.7 percent, led by strong growth in net interest income.
• Provisions for credit losses were $21.5 billion in second quarter 2023, up $726.9 million from the previous quarter and $10.4 billion from the year-ago quarter.
• Total assets of $23.5 trillion declined $254.4 billion (1.1 percent) from first quarter 2023. Securities led the decline (down $175.1 billion, or 3.1 percent), followed by cash and balances due from depository institutions (down $138.1 billion, or 4.9 percent). Year over year, total assets decreased $252.8 billion (1.1 percent). The growth in total loan and lease balances (up $526.8 billion, or 4.5 percent) was offset by declines in total securities (down $712.2 billion, or 11.6 percent) and cash and balances due from depository institutions (down $118.0 billion, or 4.2 percent)
• Unrealized losses on securities totaled $558.4 billion in the second quarter, up $42.9 billion (8.3 percent) from the prior quarter. Unrealized losses on held-to-maturity securities totaled $309.6 billion in the second quarter, while unrealized losses on available-for-sale securities totaled $248.9 billion
• Total loan and lease balances increased $86.5 billion (0.7 percent) from the previous quarter. An increase in credit card loans (up $45.0 billion, or 4.6 percent) and loans to nondepository financial institutions (up $24.3 billion, 3.2 percent) drove loan growth. Year over year, total loan and lease balances increased $526.8 billion (4.5 percent)
• Total deposits declined $98.6 billion (0.5 percent) between first and second quarter 2023. This was the fifth consecutive quarter that the industry reported lower levels of total deposits. A reduction in estimated uninsured deposits (down $180.6 billion, or 2.5 percent) drove the quarterly decline. Estimated insured deposits continued to increase (up $84.9 billion, or 0.8 percent) during the quarter.
• The decline in total deposits in second quarter 2023 was nearly offset by increased wholesale funding (up $79.9 billion, or 1.5 percent) from the previous quarter. Wholesale funding as a percentage of total assets rose from 17.1 percent in the year ago quarter to 22.8 percent in second quarter 2023.
• The share of loans and leases 90 days or more past due or in nonaccrual status increased 1 basis point from the prior quarter and the year-ago quarter to 0.76 percent. This ratio remains well below the pre-pandemic average noncurrent loan ratio of 1.28 percent
• The net charge-off rate of 0.48 percent increased 7 basis points from the prior quarter and 25 basis points from the year-ago quarter. Higher credit card net charge-off balances led the quarterly and annual increase. The industry’s net charge-off rate is now equal to its pre-pandemic average.

Selected Indicators, All FDIC-Insured Institutions*
	2023**		2022**			2022		2021	2020	2019	2018
Return on assets (%)	1.29		1.05			1.11		1.23	0.72	1.29	1.35
Return on equity (%)	13.57		10.97			11.82		12.21	6.85	11.38	11.98
Core capital (leverage) ratio (%)	9.10		8.74			8.98		8.73	8.82	9.66	9.70
Noncurrent assets plus other real estate owned to assets (%)	0.41		0.39			0.39		0.44	0.61	0.55	0.60
Net charge-offs to loans (%)	0.45		0.23			0.27		0.25	0.50	0.52	0.48
Asset growth rate (%)	-1.07		4.14			-0.51		8.46	17.29	3.92	3.03
Net interest margin (%)	3.31		2.67			2.95		2.54	2.82	3.36	3.40
Net operating income growth (%)	22.44		-13.63			-3.65		96.90	-38.77	-3.14	45.45
Number of institutions reporting	4,645		4,771			4,706		4,839	5,002	5,177	5,406
Commercial banks	4,071		4,179			4,127		4,232	4,375	4,518	4,715
Savings institutions	574		592			579		607	627	659	691
Percentage of unprofitable institutions (%)	4.13		4.76			3.51		3.10	4.68	3.73	3.46
Number of problem institutions	43		40			39		44	56	51	60
Assets of problem institutions (in billions)***	$46		$170			$47		$170	$56	$46	$48
Number of failed institutions	3		0			0		0	4	4	0

INCOME DATA (millions)		First Half 2023			First Half 2022		%Change	Q2 2023	Q2 2022	%Change 22Q2-23Q2
Total interest income		542,542			310,628		74.7	283,192	164,977	71.7
Total interest expense		193,441			22,259		769.1	108,861	13,851	685.9
Net interest income		349,102			288,369		21.1	174,331	151,126	15.4
Provision for credit losses***		42,184			16,288		159	21,464	11,078	93.8
Total noninterest income		163,853			153,400		6.8	78,185	76,887	1.7
Total noninterest expense		282,326			267,852		5.4	141,894	134,833	5.2
Securities gains (losses)		-3,410			-896		N/M	-1,236	-307	N/M
Applicable income taxes		34,521			32,213		7.2	17,017	17,074	-0.3
Extraordinary gains, net****		4			-249		N/M	-1	-249	N/M
Total net income (includes minority interests)		150,517			124,271		21.1	70,903	64,473	10.0
Bank net income		150,288			124,153		21.1	70,772	64,411	9.9
Net charge-offs		27,166			12,963		109.6	14,741	6,688	120.4
Cash dividends		95,127			57,708		64.8	50,994	29,081	75.4
Retained earnings		55,161			66,444		-17	19,777	35,330	-44.0
Net operating income		153,365			125,253		22.4	71,937	64,975	10.7