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US Banking Industry: Difference between revisions

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US Banking Industry (view source)

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(Created page with "<ref>https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/</ref> ==FDIC Quarterly Banking Profile== ===Q2 2023=== <ref>https://www.fdic.gov/analysis/quarterly-...")
 
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<ref>https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/qbp.pdf#page=1</ref>
<ref>https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/qbp.pdf#page=1</ref>


== References ==
* 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.
 
{| class="wikitable"
! colspan="12" |Selected Indicators, All FDIC-Insured Institutions*
|-
!
! colspan="2" |2023**
! colspan="3" |2022**
! colspan="2" |2022
!2021
!2020
!2019
!2018
|-
|Return on assets (%)
| colspan="2" |1.29
| colspan="3" |1.05
| colspan="2" |1.11
|1.23
|0.72
|1.29
|1.35
|-
|Return on equity (%) 
| colspan="2" |13.57
| colspan="3" |10.97
| colspan="2" |11.82
|12.21
|6.85
|11.38
|11.98
|-
|Core capital (leverage) ratio (%)
| colspan="2" |9.10
| colspan="3" |8.74
| colspan="2" |8.98
|8.73
|8.82
|9.66
|9.70
|-
|Noncurrent assets plus other real estate owned to assets (%)
| colspan="2" |0.41
| colspan="3" |0.39
| colspan="2" |0.39
|0.44
|0.61
|0.55
|0.60
|-
|Net charge-offs to loans (%)
| colspan="2" |0.45
| colspan="3" |0.23
| colspan="2" |0.27
|0.25
|0.50
|0.52
|0.48
|-
|Asset growth rate (%)
| colspan="2" | -1.07
| colspan="3" |4.14
| colspan="2" | -0.51
|8.46
|17.29
|3.92
|3.03
|-
|Net interest margin (%) 
| colspan="2" |3.31
| colspan="3" |2.67
| colspan="2" |2.95
|2.54
|2.82
|3.36
|3.40
|-
|Net operating income growth (%)
| colspan="2" |22.44
| colspan="3" | -13.63
| colspan="2" | -3.65
|96.90
| -38.77
| -3.14
|45.45
|-
|Number of institutions reporting
| colspan="2" |4,645
| colspan="3" |4,771
| colspan="2" |4,706
|4,839
|5,002
|5,177
|5,406
|-
|Commercial banks
| colspan="2" |4,071
| colspan="3" |4,179
| colspan="2" |4,127
|4,232
|4,375
|4,518
|4,715
|-
|Savings institutions
| colspan="2" |574
| colspan="3" |592
| colspan="2" |579
|607
|627
|659
|691
|-
|Percentage of unprofitable institutions (%)
| colspan="2" |4.13
| colspan="3" |4.76
| colspan="2" |3.51
|3.10
|4.68
|3.73
|3.46
|-
|Number of problem institutions
| colspan="2" |43
| colspan="3" |40
| colspan="2" |39
|44
|56
|51
|60
|-
|Assets of problem institutions (in billions)***
| colspan="2" |$46
| colspan="3" |$170
| colspan="2" |$47
|$170
|$56
|$46
|$48
|-
|Number of failed institutions 
| colspan="2" |3
| colspan="3" |0
| colspan="2" |0
|0
|4
|4
|0
|}
 
== Reference ==
Retrieved from "https://investmentwiki.mywikis.eu/wiki/Special:MobileDiff/8976"