FDIC-insured banks report aggregate 70% Q2 earnings drop

Commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. posted an aggregate 70% drop in second quarter profits amid the coronavirus pandemic and resulting impacts to the nation's economy.

The 5,066 institutions together reported $18.8 billion in net income, a drop of $43.7 billion compared with second quarter 2019, according to a news release.

“Lower levels of business activity and consumer spending – combined with uncertainty about the path of the economy and the low interest-rate environment – contributed to higher provisions for loan and lease losses, as well as a decrease in net interest margins," FDIC Chairman Jelena McWilliams said in the release.

Springfield's two publicly traded banks, Great Southern Bancorp Inc. (Nasdaq: GSBC) and Guaranty Federal Bancshares Inc. (Nasdaq: GFED), each reported decreases in second quarter profits. Great Southern's net income was down 28% to $13.2 million, and Guaranty's earnings fell by more than 22% to $1.9 million.

During the second quarter, FDIC-insured institutions facilitated more than $480 billion in Paycheck Protection Program loans, according to the release.

"Although economic stress related to the COVID-19 pandemic continued to affect bank earnings, the industry has remained a source of strength for the economy," McWilliams said in the release.