FDIC: Banks grow Q3 earnings 13%

The national banking industry’s net income grew nearly 13 percent to an aggregate $45.6 billion reported in third-quarter 2016, according to the Federal Deposit Insurance Corp.

Banks reported to the FDIC a $10 billion increase in net interest income and a $1.2 billion rise in noninterest income during the quarter. Additionally, banks increased their quarterly loan-loss provisions by $2.9 billion, or 34 percent, from the previous year, the release said.

Nationally, of the 5,980 insured financial institutions reporting third-quarter results, 61 percent posted year-over-year growth in quarterly earnings. According to the FDIC, the portion of unprofitable banks improved to 4.6 percent in the quarter – the lowest percentage since the third quarter of 1997.

“Revenue and net income rose from a year ago, loan balances increased, asset quality improved, and the number of unprofitable banks and ‘problem banks’ continued to fall,” FDIC Chairman Martin Gruenberg said in the release. “Community banks also reported solid results for the quarter with strong income, revenue and loan growth.”

In Missouri, third-quarter total assets in insured banking institutions grew 6.7 percent to $170.8 million, compared with 2015 third-quarter reporting, according to a separate FDIC release.

But Gruenberg encouraged caution due to a challenging environment.

“Low interest rates for an extended period have led some institutions to reach for yield, which has increased their exposure to interest-rate risk, liquidity risk and credit risk,” he said in the release. “Current oil and gas prices continue to affect borrowers that depend on the energy sector and have had an adverse effect on asset quality.”

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