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FDIC releases 2014's first quarter numbers

The Federal Deposit Insurance Corporation released its Quarterly Banking Profile report in May for the first quarter of 2014 with some numbers moving downward but many others improving.

Commercial banks and savings institutions insured by the FDIC reported aggregate net income of $37.2 billion in the first quarter of 2014, down $3.1 billion (7.6 percent) from earnings of $40.3 billion the industry reported a year earlier. A $7.1 billion (10.7 percent) decline in noninterest income is contributed to the decline in earnings.
Despite the decline in earnings, more than half of the 6,730 insured institutions reporting (54 percent) had year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable during the first quarter fell to 7.3 percent from 8.5 percent a year earlier.

Additionally, the number of “problem banks” fell for the 12th consecutive quarter. The number of banks on the FDIC's “Problem List” declined from 467 to 411 during the quarter. The number of “problem” banks now is less than half the post-crisis high of 888 at the end of the first quarter of 2011. Five FDIC-insured institutions failed in the first quarter.

“We saw further improvement in the condition of the banking industry in the first quarter,” said FDIC Chairman Martin J. Gruenberg. “Asset quality continues to improve, loan balances are trending up, fewer institutions are unprofitable, and the number of problem banks continues to decline. However, industry revenue has been affected by narrow margins, modest loan growth, and a decline in noninterest income as higher interest rates have reduced mortgage-related activity and trading income fell.”

New to the FDIC's Quarterly Banking Profile is a report on the performance of community banks – those institutions that provide traditional, relationship-based banking services in their local communities. Based on criteria developed for the FDIC Community Banking Study published in December 2012, there were 6,234 community banks (93 percent of all FDIC-insured institutions) in the first quarter of 2014 with assets of $2 trillion (14 percent of industry assets). Although net income at community banks of $4.4 billion was down $67 million (1.5 percent) from a year earlier, the percentage decline was far less than the 7.6 percent decline in earnings reported by the industry.

The report also finds that loan balances at community banks grew at a faster pace than the industry, asset quality indicators continued to show improvement, and community banks accounted for 45 percent of small loans to businesses.

For the first quarter report regarding Oklahoma institutions, there were 225 institutions reporting with a net income of $278 million, down from $325 million a year ago. Oklahoma institutions reported total assets of $94.188 million for the first quarter, barely down a year ago from $94,411 million.

The percentage of institutions with earning gains in Oklahoma were 50.67. Only 2.22 percent of Oklahoma institutions were unprofitable compared to 7.28 percent nationally in the first quarter.
To view the complete Quarterly Banking Profile, visit http://ww2.fdic.gov/qbp.

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