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US Banking Industry: Difference between revisions
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==== Quarterly Net Income ==== | ==== Quarterly Net Income ==== | ||
[[File: | [[File:Screenshot 2023-12-06 100556.png|alt=|center|thumb|763x763px|https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/]] | ||
==== Quarterly Net Interest Margin ==== | ==== Quarterly Net Interest Margin ==== | ||
[[File: | [[File:Screenshot 2023-12-06 100737.png|alt=|center|thumb|764x764px|https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/]] | ||
==== Unrealized Gains (Losses) on Investment Securities ==== | ==== Unrealized Gains (Losses) on Investment Securities ==== | ||
[[File: | [[File:Screenshot 2023-12-06 101040.png|alt=|center|thumb|764x764px|https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/]] | ||
==== Reserve Coverage Ratio ==== | ==== Reserve Coverage Ratio ==== | ||
[[File: | [[File:Screenshot 2023-12-06 101608.png|alt=|center|thumb|780x780px|https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/]] | ||
==== Noncurrent Loan Rate and Quarterly Net Charge-Off Rate ==== | ==== Noncurrent Loan Rate and Quarterly Net Charge-Off Rate ==== | ||
[[File: | [[File:Screenshot 2023-12-06 101253.png|alt=|center|thumb|752x752px|https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/]] | ||
==== Number and Assets of Banks on the "Problem Bank List" ==== | ==== Number and Assets of Banks on the "Problem Bank List" ==== | ||
[[File: | [[File:Screenshot 2023-12-06 101847.png|alt=|center|thumb|730x730px|https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/]] | ||
===<big>Quaterly Updates</big>=== | ===<big>Quaterly Updates</big>=== | ||
==== Q3 2023 ==== | |||
<ref>https://www.fdic.gov/news/speeches/2023/spnov2923.html</ref> | |||
* 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==== | ====Q2 2023==== | ||