FDIC-Backed Institutions Rake In $40.8B In Q4

The Federal Deposit Insurance Corp. said on Tuesday (Feb. 23) that commercial banks and savings enterprises that it insures reported net income in the aggregate of $40.8 billion in the last quarter, which was up 11.9 percent from the previous year.

That growth, the FDIC said, came mainly from a $6.8 billion boost in net operating revenue, accompanied by a $2.7 billion decline in non-interest expenses, which were off due to a decline in litigation expenses.

More than half of the 6,182 institutions that reported to the FDIC showed growth year over year in earnings in the latest quarter. The total ratio of banks that were unprofitable dropped 80 basis points year over year to the most recent 9.1 percent. That is the lowest tally for a fourth quarter report in the past 20 years.

In reference to community banks, the 5,735 that reported said they had $5.1 billion in net income for the fourth quarter, up 4 percent year over year. Revenues were up more than 7 percent year over year.

Loan losses showed their first year-over-year increase since the second quarter of 2010, and charge-offs were up 7 percent for the most recent period. Net charge-offs of loans to commercial and industrial buyers were up 43 percent year over year to $512 million, and net charge-offs of credit cards were 5,6 percent higher.

In a statement accompanying the results, FDIC Chairman Martin Gruenberg said: “Revenue and income were up from the previous year, overall asset quality continued to improve, loan balances increased and there were fewer banks on the problem list. However, banks are operating in a challenging environment. Revenue growth continues to be held back by narrow interest margins. Many institutions are reaching for yield, given the competition for borrowers and low interest rates. And there are signs of growing credit risk, particularly among loans related to energy and agriculture.”