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 $40.8 billion in the fourth quarter of 2015, up $4.4 billion (11.9 percent) from earnings of $36.5 billion a year earlier. The increase in earnings was mainly attributable to a $6.8 billion increase in net operating revenue and a $2.7 billion decline in noninterest expenses. The reduction in noninterest expenses is attributed to a drop in litigation expenses at a few large banks. Of the 6,182 insured institutions reporting fourth quarter financial results, more than half (56.6 percent) reported year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable in the fourth quarter fell from 9.9 percent a year earlier to 9.1 percent, the lowest level for a fourth quarter since 1996.
Community Bank Performance
Community banks—which represent 93 percent of insured institutions—reported net income of $5.1 billion in the fourth quarter, up $198.7 million (4 percent) from the year-earlier quarter. Earnings improved on higher net interest income and noninterest income, but were offset in part by higher loan-loss provisions and noninterest expense. Asset quality indicators continued to improve, and community banks accounted for 44 percent of small loans to businesses.
Insurance Fund Indicators
Insured deposits increased by 1.8 percent in the fourth quarter of 2015. The DIF reserve ratio rose to 1.11 percent on December 31, 2015, up from 1.09 percent at September 30, 2015, and 1.01 percent at December 31, 2014. Two FDIC-insured institutions failed during the quarter.