• FDIC's Quarterly Banking Profile Includes New Section on Community Banks
  • June 10, 2014 | Author: Robert L. Carothers
  • Law Firm: Jones Walker LLP - Mobile Office
  • The FDIC recently issued its 1st Quarter 2014 Quarterly Banking Profile and introduced a new section devoted to the performance of the community banking sector. The FDIC recognized that the business models of the largest banks skewed the overall industry numbers and made it difficult to understand overall trends at smaller institutions. The new section will allow community banks to better gauge their performance as compared to their peers.

    The report included the following performance data for the community banking sector:

    • Net income decreased $67 million (1.5%) from a year earlier, which was far less than the industry as a whole, which was down 7.6%. The return on assets for the first quarter was .87%.

    • Net interest income (which accounts for approximately 80% of net operating revenue at community banks) was up $790 million (5%) from a year earlier.
    • Total assets increased by $28 billion (1.4%) from the previous quarter and loan balances grew by $12.3 billion (0.9%). Over 75% of the increase was due to commercial real estate loans and commercial and industrial loans. Community banks reported higher loan growth than the industry as a whole, which experienced 0.5% growth. Year-over-year loan growth at community banks of 6.6% also exceeded the industry as a whole (3.6%).
    • Noncurrent loans were down $6.2 billion (22%) from a year earlier. The noncurrent loan ratio was 1.68% in the first quarter, the lowest rate since the first quarter of 2008.
    • The number of problem banks declined from 467 to 411 during the quarter, which is less than one-half of the post-crisis high of 888 at the end of the first quarter of 2011.