Once more, with feeling: FDIC announces 8.7% annual growth in banks’ net income for first quarter

Reiterating numbers released four weeks ago, the Federal Deposit Insurance Corp. (FDIC) on Wednesday said in a release that federally insured commercial banks and thrifts closed the first quarter of 2019 with aggregate net income of $60.7 billion, up $4.9 billion – that’s 8.7% – from a year earlier.

A look at the source of this information – the agency’s Quarterly Banking Profile – shows that total assets in insured banks and thrifts rose by $147 billion, or 0.8%, during the first quarter. Assets in trading accounts increased by $94.2 billion (16.5%), the largest quarterly dollar increase since first quarter 2008.

These and other results were announced by FDIC Chairman Jelena McWilliams during a press conference May 29. All indicators included in the release issued Wednesday are unchanged from the original report. Among them:

  • Average return on assets increased to 1.35%, up from 1.28% a year earlier.
  • Community banks’ quarterly net income rose 10.1% from a year earlier, totaling $6.5 billion.
  • Total loan and lease balances rose 4.1% over the past 12 months, down slightly from the 4.4% annual growth rate reported in the previous quarter.
  • The amount of loans that were noncurrent, that is, 90 days or more past due or in nonaccrual status, increased by $461.6 million (0.5%) during the first quarter.
  • Net charge-offs increased by $667.8 million (5.5 %) from a year ago, but the average net charge-off rate remained unchanged (0.50%).

The number of “problem banks” reported in the first quarter totaled 59 (down from 60) and the fewest since the first quarter of 2007, the agency said. Total assets of problem banks declined from $48.5 billion in the fourth quarter to $46.7 billion. During the first quarter, merger transactions absorbed 43 institutions, one new charter was added, and no failures occurred.

Two days after that May 29 press conference, the agency announced the first bank to have failed in 2019: The Enloe State Bank (Cooper, Texas). All insured deposits were transferred to Legend Bank, N.A. (Bowie, Texas). The agency said that as of March 31, The Enloe State Bank had total assets of $36.7 million and total deposits of $31.3 million, with an estimated $500,000 in excess of FDIC insurance limits (final figure to be determined).

Quarterly Banking Profile

RR: Tiny bank’s failure is first since 2017, ending nearly 18-month streak for deposit insurer (June 3, 2019)

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