The FDIC Quarterly provides a comprehensive summary of the most current financial results for the banking industry, along with feature articles. These articles range from timely analysis of economic and banking trends at the national and regional level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and the development of regulatory policy. The FDIC Quarterly brings together data and analysis that were previously available through three retired publications -- the FDIC Outlook, the FDIC Banking Review, and the FYI: An Update on Emerging Issues in Banking. Past issues of these publications are archived under their original publication names.
FDIC-insured institutions reported aggregate net income of $39.1 billion in the first quarter of 2016, down $765 million (1.9 percent) from a year earlier. The decline in earnings was mainly attributable to a $4.2 billion increase in provisions for loan losses and a $2.2 billion decline in noninterest income. The increase in loan-loss provisions is primarily attributable to rising levels of troubled loans to commercial and industrial borrowers, particularly in the energy sector. The decline in noninterest income reflects weakness in trading income at a few large banks, as well as lower income from asset servicing. Of the 6,122 insured institutions reporting first quarter financial results, more than half (61.4 percent) reported year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable in the first quarter fell from 5.7 percent a year earlier to 5 percent, the lowest level since the first quarter of 1998.
Community Bank Performance
Community banks—which represent 93 percent of insured institutions—reported net income of $5.2 billion in the first quarter, up $353.6 million (7.4 percent) from the year-earlier quarter. Improved revenue from net interest income and noninterest income was offset in part by higher loan-loss provisions and noninterest expense. Asset quality indicators continued to improve, and community banks accounted for 44 percent of small loans to businesses
Insurance Fund Indicators
Insured deposits increased by 2 percent in the first quarter of 2016. The DIF reserve ratio rose to 1.13 percent on March 31, 2016, up from 1.11 percent at December 31, 2015, and 1.03 percent at March 31, 2015. Final rules were approved to raise the DIF to 1.35 percent of insured deposits and revise the calculation of insurance assessments for small banks.