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-insured institutions reported aggregate net income of $38.7 billion in the third quarter of 2014, up $2.6 billion (7.3 percent) from earnings of $36.1 billion the industry reported a year earlier. The increase in earn¬ings was mainly attributable to a $7.8 billion (4.8 percent) increase in net operating revenue, the biggest since the fourth quarter of 2009. Almost two-thirds of the 6,589 insured institutions reporting (62.9 percent) had year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable during the third quarter fell to 6.4 percent from 8.7 percent a year earlier.
Community Bank Performance
Community banks—which represent 93 percent of insured institutions—reported net income of $4.9 billion in the third quarter, up $470.7 million (10.7 percent) from third quarter 2013. The increase was driven by improved net operating revenue and lower provision expenses. In the third quarter of 2014, loan balances at community banks grew at a faster pace than in the industry, asset quality indicators continued to show improvement, and community banks accounted for 45 percent of small loans to businesses.
Insurance Fund Indicators
Estimated insured deposits increased 0.4 percent from the prior quarter and increased 2.8 percent over the 12 months ending September 30, 2014. The DIF reserve ratio was 0.89 percent at September 30, 2014, up from 0.84 percent at June 30, 2014, and 0.68 percent at September 30, 2013. Two FDIC-insured institutions failed during the quarter.