The banking industry reported net income of $65.4 billion in the third quarter of 2024, a decrease of $6.2 billion, or 8.6%, from the prior quarter, according to the FDIC’s most recent Quarterly Banking Profile released today.
The quarterly decrease in net income was largely driven by the absence of about $10 billion in one-time gains on equity security transactions reported in the previous quarter, the FDIC said. The absence of last quarter’s nonrecurring gains was partially offset by strong net interest income in Q3.
Quarterly net income for the 4,082 community banks insured by the FDIC was $6.9 billion in the third quarter, an increase of $436 million, 6.7%, from Q2. Higher net interest income and higher noninterest income offset higher noninterest expense and higher provision expense, according to the agency.
Domestic deposits increased $194.6 billion, or 1.1%, from the previous quarter. Both savings and transaction deposits increased from the prior quarter, with declines in small-time deposits partially offsetting the increases. Brokered deposits decreased for the third straight quarter, down $47.2 billion, or 3.6%, from the prior quarter.
The Deposit Insurance Fund balance increased $3.9 billion to $133.1 billion. The reserve ratio increased four basis points to 1.25%.
The total number of FDIC-insured institutions declined by 21 during the quarter to 4,517. Three banks were sold to credit unions, one bank closed and 18 institutions merged with other banks. One bank opened and no banks failed in Q3.
ABA: Profile shows a healthy banking industry
The latest Quarterly Banking Profile shows the banking industry remains healthy and resilient while continuing to serve as a source of strength for our nation’s economy, American Bankers Association Chief Economist Sayee Srinivasan said. He noted that lending grew for the second consecutive quarter at banks of all sizes to $12.6 billion, and the aggregate Tier 1 capital ratio reached a record high as banks prudently provisioned to manage risks, maintaining a substantial capital buffer to absorb any potential losses.
“The industry’s net interest income and net interest margin increased in the third quarter, while asset quality remained healthy,” Srinivasan said. “The 1.1% increase in deposits was driven by growth in transaction accounts and basic savings accounts at banks across the country.
“Heading into the new year, America’s banks are well capitalized, highly liquid and are well-positioned to support their customers and bolster the economy,” he added.
