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Analysis

FDIC Quarterly

Last Updated: May 10, 2021

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, 2021, Volume 15, Number 1 - PDF (PDF Help)

FDIC-insured institutions reported aggregate net income of $59.9 billion in fourth quarter 2020, an increase of $5 billion (9.1 percent) from a year earlier. The primary driver of higher net income was the reduction in provision expenses. More than half of all institutions (57.4 percent) reported year-over-year increases in quarterly net income. The share of unprofitable institutions remained relatively stable from a year ago at 7.3 percent. The average return on assets ratio was 1.11 percent for the quarter, down 8 basis points from a year earlier.

Community Bank Performance
Community banks—which represent 91 percent of insured institutions—reported year-over-year net income growth of $1.3 billion (21.2 percent) in fourth quarter 2020, despite an increase in provisions for loan and lease losses and a narrower net interest margin. More than half of all community banks (57 percent) reported higher net income from the year-ago quarter. Increased income from loan sales drove the improvement in quarterly net income and offset the increase in provisions year over year.

Insurance Fund Indicators
The Deposit Insurance Fund (DIF) balance totaled $117.9 billion at the end of fourth quarter, an increase of $1.5 billion from the previous quarter. Assessment income, interest earned on investments, and negative provisions for insurance losses were the largest sources of the increase, offset partially by operating expenses, unrealized losses on available-for-sale securities, and other unrealized losses. The DIF reserve ratio was 1.29 percent on December 31, 2020, down 1 basis point from September 30, 2020, and down 12 basis points from December 31, 2019.

Featured Articles:

Farm Banks: Resilience Through Changing Conditions - PDF
The U.S. agricultural sector has experienced large swings over the past decade and a half, from a lengthy period of prosperity in agriculture that ended in 2013 to subsequent years that presented a slow, weak recovery. Most farmers and farm banks were cautious with farm real estate lending during the strong years. As a result, farm banks have held up well despite the agricultural industry’s challenges since 2014. The COVID-19 pandemic initially looked to be harmful for U.S. agriculture, but record government payments helped forecasted 2020 farm income reach the highest level since 2013.

2020 Summary of Deposits Highlights - PDF
The 2020 Summary of Deposits Survey showed deposit growth of 21.7 percent between June 2019 and June 2020, the largest one-year increase in nearly 80 years. The large year-over-year increase in deposits occurred primarily in the first two quarters of 2020, and was likely driven by reactions of individuals, businesses, and U.S. fiscal and monetary authorities to the COVID-19 pandemic. Deposits increased the most for noncommunity banks, midsize banks, banks with a mortgage lending specialization, and offices in metropolitan counties. The number of bank offices declined for the 11th consecutive year but at a lower rate than in the previous three years. The relatively low rate of decline in the number of offices was influenced by a low rate of closures among offices acquired through mergers. Further, the number of noncommunity bank offices and offices in metropolitan counties declined at low rates from June 2019 to June 2020 compared to previous years.

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