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Analysis

FDIC Quarterly

Last Updated: November 1, 2022

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, 2022, Volume 16, Number 3 - PDF (PDF Help)

Quarterly Banking Profile: Second Quarter 2022
FDIC-insured institutions reported aggregate net income of $64.4 billion in second quarter 2022, a decline of $6.0 billion (8.5 percent) from the year-ago quarter. An increase in provision expense drove the annual reduction in net income. More than half of all banks (51.5 percent) reported an annual decline in quarterly net income. However, net income rose $4.6 billion (7.8 percent) from first quarter 2022 as growth in net interest income exceeded growth in provision expense. The banking industry reported an aggregate return on average assets ratio of 1.08 percent, down 16 basis points from second quarter 2021 but up 7 basis points from first quarter 2022.

Community Bank Performance
Community banks—which represent 91 percent of insured institutions—reported net income of $7.6 billion in second quarter 2022, down $523.0 million (6.5 percent) from a year ago. Higher noninterest expense, lower noninterest income, losses on the sale of securities, and higher provision expense offset growth in net interest income. The community bank pretax return on average assets ratio decreased 20 basis points from one year ago but rose 9 basis points from one quarter ago to 1.34 percent.

Insurance Fund Indicators
The Deposit Insurance Fund (DIF) balance increased by $1.4 billion to $124.5 billion after declining in the first quarter. Assessment revenue of $2.1 billion was the largest source of income. Interest earned on investments, negative provisions for insurance losses, and other miscellaneous income also added to the fund balance. Operating expenses and unrealized losses on available-for-sale securities partially offset the increase in fund balance. The DIF reserve ratio was 1.26 percent on June 30, 2022, 3 basis points higher than the previous quarter and 1 basis point lower than the previous year.

Featured Article:

Community Bank Performance in Manufacturing-Concentrated States - PDF
The manufacturing industry in the United States has undergone fundamental changes in recent decades. The changes are important for the communities that rely on manufacturing firms for employment and local economic growth and for the banks that offer financial services in communities where manufacturing firms have an important presence. This article highlights areas in the United States where manufacturing is most concentrated, discusses some of the long-term trends in manufacturing, and analyzes the performance of community banks in manufacturing-concentrated areas relative to community banks more broadly. The transition to advanced manufacturing has contributed to output growth even as manufacturing employment has fallen in recent decades. Community banks in manufacturing-concentrated states have provided more commercial loans than other community banks, reported higher net interest margins, and exhibited more cyclical sensitivity to economic downturns. While the manufacturing industry was negatively affected by the COVID-19 pandemic, the industry recovered much more quickly than in previous recessions, potentially brightening the outlook for community banks that support those businesses.

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