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Analysis

FDIC Quarterly

Last Updated: September 24, 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 3 - PDF (PDF Help)

Quarterly Banking Profile: Second Quarter 2021
FDIC-insured institutions reported aggregate net income of $70.4 billion in second quarter 2021, an increase of $51.9 billion (281 percent) from the same quarter a year ago, driven by a $73 billion (117.3 percent) decline in provision expense. Two-thirds of all banks (66.4 percent) reported year-over-year improvement in quarterly net income. The share of profitable institutions increased slightly, up 1.4 percent year over year to 95.8 percent. However, net income declined $6.4 billion (8.3 percent) from first quarter 2021, driven by an increase in provision expense from first quarter 2021 (up $3.7 billion to negative $10.8 billion). The aggregate return on average assets ratio of 1.24 percent rose 89 basis points from a year ago but fell 14 basis points from first quarter 2021.

Community Bank Performance
Community banks—which represent 91 percent of insured institutions—reported year-over-year quarterly net income growth of $1.9 billion (28.7 percent) in second quarter 2021, despite a narrower net interest margin. Nearly two-thirds of all community banks (65 percent) reported higher net income from the year-ago quarter. The pretax return on assets ratio of 1.54 percent rose 20 basis points from a year ago but fell 4 basis points from first quarter 2021.

Insurance Fund Indicators
The Deposit Insurance Fund (DIF) balance totaled $120.5 billion at the end of second quarter 2021, an increase of $1.2 billion from the previous quarter. Assessment income, interest earned on invest-ments, and negative provisions for insurance losses were the largest sources of the increase, offset partially by operating expenses and unrealized losses on available-for-sale securities. The DIF reserve ratio was 1.27 percent at June 30, 2021, up 2 basis points from March 31, 2021, and down 3 basis points from June 30, 2020.

Featured Articles:

The Importance of Technology Investments for Community Bank Lending and Deposit Taking During the Pandemic - PDF
Community banks that invested more in technology generally reported faster loan and deposit growth in 2020 than did banks with less technology investment. Moreover, the differences in loan and deposit growth associated with technology investment were greater in 2020 than the differences reported prior to the pandemic. Faster loan growth for community banks with greater technology investment largely stemmed from participation in the Paycheck Protection Program (PPP). These community banks, on average, originated a greater share of PPP loans regardless of the loan size, origination date, or borrower distance from the nearest bank branch. Meanwhile, the larger increases in deposit growth of community banks that invested more in technology were due to increases in deposit balances of existing customers rather than from new depositors.

Past Issues