FDIC's Quarterly Banking Profile
The Federal Deposit Insurance Corporation released its latest "FDIC Quarterly Banking Profile," which says, "Net interest income totaled $134.1 billion, an increase of $10.7 billion (8.7 percent) from 12 months earlier and the largest annual dollar increase ever reported by the industry. More than four out of five banks (85.1 percent) reported year-over-year increases. Net interest margin (NIM) rose to 3.38 percent, up 16 basis points from a year earlier, as average asset yields grew more rapidly than average funding costs. Institutions with assets of $10 billion to $250 billion reported the largest annual increase in average funding costs (up 30 basis points). The improvement in NIM was widespread, as more than two out of three banks (70.2 percent) reported increases from a year earlier." The update continues, "Total deposits fell by $60.2 billion (0.4 percent) from the previous quarter, as deposits in both foreign offices (down $38.8 billion, or 3 percent) and domestic offices (down $21.5 billion, or 0.2 percent) declined. Domestic interest-bearing deposits rose by $13.5 billion (0.1 percent), while noninterest-bearing deposits declined by $34.9 billion (1.1 percent). Banks increased their nondeposit liabilities by $46.3 billion (2.3 percent) from the first quarter, led by Federal Home Loan Banks advances (up $30 billion, or 5.4 percent) and other liabilities (up $11.7 billion, or 3.1 percent)." A press release entitled, "FDIC-Insured Institutions Reported $60.2 Billion in Second Quarter 2018" quotes FDIC Chairman, Jelena McWilliams, "The banking industry experienced continued improvement in net interest income, noninterest income and loan performance this quarter. However, the interest-rate environment coupled with competitive lending conditions have led to heightened exposure to interest-rate, liquidity, and credit risks. The industry must continue to position itself to be resilient through economic cycles."
