Loan and deposit balances for banks were down in the first quarter, but net income – led by higher noninterest income – was up from the previous quarter, according to numbers released Wednesday by the federal bank deposit insurance agency.
According to the Federal Deposit Insurance Corp. (FDIC) loan balances were down “modestly” from the previous quarter at the nation’s 4,672 federally insured banks and savings institutions and total deposits were down for a fourth consecutive quarter.
Agency Board Chairman Martin Gruenberg, in a statement, acknowledged the rise in net income of $11.5 billion (16.9%), saying it “still remains high in relation to historical measures,” and noted that banks remain, overall, well capitalized. “However, the industry continues to face significant downside risks from the effects of inflation, rising market interest rates, slowing economic growth, and geopolitical uncertainty,” Gruenberg said.
On loans, the agency said total balances declined $14.6 billion (0.1%) from the previous quarter. “Loans transferred to the FDIC as receiver, combined with a seasonal decline in credit card loan balances (down $26.6 billion, or 2.6%) were the major contributors to the quarterly decline in total loan balances for the banking industry,” the agency reported. “Without the loans transferred out of the banking system to the FDIC, loan growth would have been 0.4% quarter over quarter.”
Compared to a year ago, the agency said, total loan and lease balances increased $855.2 billion (7.5%), driven by growth in one-to-four family residential mortgages (up $232.1 billion, or 10.2%), consumer loans (up $156.4 billion, or 8.3 percent), and commercial and industrial loans (up $138.7 billion, or 5.8%).
FDIC-Insured Institutions Reported Net Income of $79.8 Billion in First Quarter 2023