FDIC Releases Quarterly Report Summarizing Financial Results of Covered Institutions
While the quarterly results were largely positive, the operating environment continues to pose challenges for banks. Low interest rates for an extended period and a competitive lending environment have led some institutions to reach for yield. This has led to heightened exposure to interest-rate risk, liquidity risk, and credit risk.
FDIC Chair Martin J. Gruenberg
While the quarterly results were largely positive, the operating environment continues to pose challenges for banks. Low interest rates for an extended period and a competitive lending environment have led some institutions to reach for yield. This has led to heightened exposure to interest-rate risk, liquidity risk, and credit risk.
FDIC Chair Martin J. Gruenberg
The FDIC released a Quarterly Banking Profile, which summarizes first quarter 2017 financial results for covered institutions. The FDIC highlighted the following:
- the aggregate net income of FDIC-insured institutions rose 12.7% over the last year, with community bank net income rising 10.4%;
- the pace of loan growth is at 4% for the 12 months ending March 31, 2017;
- the "Problem Bank List" contains fewer institutions than at any point in the last nine years; and
- the Deposit Insurance Fraud reserve ratio remains at 1.2%.
FDIC Chair Martin J. Gruenberg noted that, while results were predominantly favorable, there is cause to remain alert for additional risk:
"While the quarterly results were largely positive, the operating environment continues to pose challenges for banks. Low interest rates for an extended period and a competitive lending environment have led some institutions to reach for yield. This has led to heightened exposure to interest-rate risk, liquidity risk, and credit risk. These risks must be managed prudently for the industry to continue to grow on a long-run, sustainable path."