Commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. recorded aggregate earnings of $40.2 billion in the second quarter, representing a 5.3 percent increase compared to profits of $38.2 billion reported by the industry a year earlier.
The FDIC attributed the positive movement of the reporting 6,656 insured institutions largely to a 2.3 percent, or $178.5 billion, increase in loan and leases balances to $8.1 trillion by the end of the quarter; a 22.4 percent, or $1.9 billion, decline in loan-loss provisions; and a 1.4 percent, or $1.5 billion, decrease in noninterest expenses.
Still, FDIC Chairman Martin Gruenberg said challenges remain in the industry.
"Industry revenue has been under pressure from narrow net interest margins and lower mortgage-related income. Institutions have been extending asset maturities, which is raising concerns about interest-rate risk. And banks have been increasing higher-risk loans to leveraged commercial borrowers. These issues are matters of ongoing supervisory attention," Gruenberg said in the release. "Nonetheless, on balance, results from the second quarter reflect a stronger banking industry and stronger community banks."
Second-quarter financial notes for FDIC-insured financial institutions:
- The proportion of unprofitable banks dropped to 6.8 percent from 8.4 percent a year earlier.
- Seven FDIC-insured institutions failed during the second quarter, down from 12 in the same quarter of 2013.
- The number of "problem" banks - described as those suffering from issues with capital, assets, management, earnings, liquidity or sensitivity to market conditions - dropped by 411 to 354 during the quarter.
Publicly traded, FDIC-insured banks based in Springfield, Guaranty Federal Bancshares Inc. (Nasdaq: GFED) and Great Southern Bancorp Inc. (Nasdaq: GSBC), reported differing results in the second quarter. Guaranty Bank posted net income of $1.2 million, a 10.3 percent decrease from second-quarter 2013, while Great Southern Bank boosted profits 34.4 percent to $11.1 million, according to
Springfield Business Journal archives.
Tomorrow at 11:30 a.m., U.S. Rep. Billy Long, R-Mo., is holding a banking roundtable discussion on the impact of regulations at BancorpSouth, 4039 S. Kansas Expressway, according to a release.[[In-content Ad]]
