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FDIC Quarterly

Last Updated: January 4, 2024

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 Quarterly, 2023, Volume 17, Number 4 - PDF (PDF Help)

Quarterly Banking Profile: Third Quarter 2023
Net income for the 4,614 FDIC-insured commercial banks and savings institutions declined $2.4 billion (3.4 percent) from one quarter ago to $68.4 billion in third quarter 2023. Lower noninterest income and higher realized losses on securities drove the decline in net income from the previous quarter. First and second quarter income benefitted from non-recurring accounting gains resulting from the acquisition of the three large bank failures this spring. Excluding these one-time gains, net income would have been roughly flat for the past four quarters at approximately $68 billion. The banking industry reported an average return on assets (ROA) of 1.17 percent in the third quarter, down from 1.21 percent in the previous quarter and 1.21 percent in the year-ago quarter.

Community Bank Performance
Community banks—which represent 90 percent of insured institutions—reported quarterly net income of $6.7 billion in third quarter 2023, a decline of $335.5 million (4.8 percent) from one quarter ago. Higher noninterest expense, lower net interest income, increased provisions, and greater losses on the sale of securities more than offset higher noninterest income. More than half (55.0 percent) of all community banks reported a decline in net income compared with second quarter 2023. The share of unprofitable community banks rose slightly to 6.6 percent. The community bank pretax ROA declined 6 basis points from one quarter ago to 1.21 percent.

Insurance Fund Indicators
The Deposit Insurance Fund (DIF) balance increased by $2.4 billion to $119.3 billion. The rise in the DIF was primarily driven by assessment income of $3.2 billion. Net investment income, which includes interest income and the effect of unrealized and realized gains and losses, added $0.9 billion. These gains were partially offset by provisions for insurance losses of $1.2 billion and operating expenses of $0.5 billion. One insured institution failed during the third quarter at an estimated cost to the Fund of $54.2 million. The DIF reserve ratio was 1.13 percent on September 30, 2023, up 2 basis points from the previous quarter and 10 basis points lower than one year ago.

Featured Article:

Implications of High Inflation for Banking Outcomes and Deposit Flows: Observations From 2021 to 2022 and the 1970s - PDF
Persistently high inflation can affect banks in various ways as monetary policy tightening and macroeconomic changes occur. This article compares lending and bank performance during the stagflation periods of the 1970s and recent high inflation with a focus on the effects on deposits. Robust deposit growth in the 1970s suggests that banks were actively seeking deposits, while in 2021 to 2022, banks generally were flush with deposits as a result of varying pandemic support programs. The differences between the two periods illustrate the importance of considering broader macroeconomic conditions when analyzing the effects of inflation on banks.

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