The Federal Deposit Insurance Corporation (FDIC) indicated reports from 4,672 commercial banks and savings institutions it insures showed aggregate net income of $79.8 billion in first quarter 2023.
“The banking industry has proven to be quite resilient during this period of stress,” FDIC Chairman Martin J. Gruenberg said. “Net income still remains high in relation to historical measures, asset quality metrics remain favorable and the industry remains well capitalized.”
Gruenberg said the industry continues to face significant downside risks from the effects of inflation, rising market interest rates, slowing economic growth and geopolitical uncertainty.
According to the FDIC, its Quarterly Banking Profile determined although first quarter net income increased by $11.5 billion, or 16.9 percent, from fourth quarter 2022, after excluding the effects on acquirers’ incomes of their acquisition of two failed banks, quarter-over-quarter net income would have been roughly flat.
The analysis also showed strong growth in noninterest income, reflecting the accounting treatment of the acquisition of two failed institutions and record-high trading revenue at large banks, outpaced lower net interest income and higher noninterest expense – per the FDIC.
Other analysis highlights, according to the FDIC, include the net interest margin declined quarter over quarter to 3.31 percent; unrealized losses on securities declined for a second consecutive quarter; and
community bank net income declined from the prior quarter, but improved from a year ago.