The banking industry reported net income of $64.2 billion in the first quarter of 2024, an increase of $28.4 billion or 79.5% from the previous quarter, according to the FDIC’s most recent Quarterly Banking Profile released today.
A 13.3% decline in noninterest expense was the primary cause for the rise in net income, the FDIC said. That drop was driven by a decline in the expense related to the special assessment to recover the loss to the Deposit Insurance Fund resulting from the agency’s decision to protect uninsured depositors following the Silicon Valley Bank and Signature Bank failures. Higher noninterest income and lower provision expenses also contributed to the increase in net income.
Quarterly net income for the 4,128 community banks insured by the FDIC was $6.3 billion in Q1, an increase of $363.2 million or 6.1% from the previous quarter, the agency said. Lower realized losses on the sale of securities, and lower noninterest and provision expenses, offset lower noninterest and net interest income, it added.
Domestic deposits increased $190.7 billion or 1.1% in Q1, marking a second consecutive quarterly increase. Estimated insured deposits increased $114.9 billion or 1.1% while estimated uninsured domestic deposits increased $63.3 billion or 0.9%. The DIF balance increased $3.5 billion to $125.3 billion, primarily driven by assessment revenue. The reserve ratio increased two basis points to 1.17%.
The total number of FDIC-insured institutions declined by 19 during the quarter to 4,568, the FDIC said. One bank opened, four banks did not file a call report and 16 institutions merged with other banks.
ABA: Report shows banking industry remains on ‘firm footing’
The latest Quarterly Banking Profile indicates that the banking industry remains on firm footing as it helps power the economy through some persisting headwinds, ABA Chief Economist Sayee Srinivasan said.
“The industry saw broad growth in net income in the first quarter after accounting for the FDIC’s special assessment at the end of last year,” Srinivasan said. “Asset quality remained sound as banks continued to prudently bolster reserves. Office commercial real estate weakened in some metro areas in line with expectations. Banks continued to take proactive steps to manage this risk, including increasing the reserve ratio of their commercial real estate portfolios.
“America’s banks remain well-capitalized and well-positioned to continue serving as a pillar of strength for their communities,” he added.
