FDIC Quarterly

The FDIC Quarterly provides a comprehensive summary of the most current financial results for the banking industry, along with feature articles. These articles range from timely analysis of economic and banking trends at the national and regional level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and the development of regulatory policy. The FDIC Quarterly brings together data and analysis that were previously available through three retired publications -- the FDIC Outlook, the FDIC Banking Review, and the FYI: An Update on Emerging Issues in Banking. Past issues of these publications are archived under their original publication names.

FDIC Quarterly, 2024, Volume 18, Number 1 - PDF (PDF Help)

Quarterly Banking Profile: Fourth Quarter 2023
Net income for the 4,587 FDIC-insured commercial banks and savings institutions declined $30 billion (43.9 percent) from one quarter ago to $38.4 billion in fourth quarter 2023. Higher noninterest expense (up $26.6 billion, or 18.9 percent), lower noninterest income (down $6.5 billion, or 8.8 percent), and higher provision expense (up $5.2 billion, or 26.5 percent) drove the decline in net income in the fourth quarter. However, it is estimated that 70 percent of the decrease in net income was caused by specific, non-recurring, noninterest expenses at large banks. These expenses include the special assessment, goodwill impairment, and legal, reorganization, and other one-time costs at large banks. Higher provision expense occurred as the industry built reserves, primarily for credit card and commercial real estate loans. The banking industry reported a quarterly ROA of 0.65 percent in the fourth quarter, down from 1.17 percent in the previous quarter and 1.16 percent in the year-ago quarter.

Community Bank Performance
Community banks—which represent 90 percent of insured institutions—reported quarterly net income of $5.9 billion in fourth quarter 2023, a decline of $650.2 million (9.9 percent) from the prior quarter. Higher noninterest expense, increased provisions, and lower noninterest income more than exceeded higher net interest income and lower losses on the sale of securities. More than half (59.7 percent) of all community banks reported a decline in net income from third quarter 2023. The community bank pretax ROA declined 14 basis points from one quarter ago to 1.07 percent.

Insurance Fund Indicators
The Deposit Insurance Fund (DIF) balance increased by $2.4 billion to $121.8 billion. The rise in the DIF was primarily driven by assessment income of $3.1 billion. Net investment income (including the effect of unrealized and realized gains and losses) added $0.8 billion. These gains were partially offset by provisions for insurance losses of $0.9 billion and operating expenses of $0.6 billion. One insured institution failed during the fourth quarter at an estimated cost to the Fund of $14.8 million. The DIF reserve ratio was 1.15 percent on December 31, 2023, up 2 basis points from the previous quarter and 10 basis points lower than the previous year.

Featured Articles:

The Effects of Population Change on Community Bank Deposits and Loans - PDF
For decades, U.S. rural county population generally declined while metropolitan county population grew robustly. The 2020 pandemic disrupted these trends, with potentially significant implications for community banks. Based on pre-pandemic data, community bank deposit growth correlated strongly with population growth. However, deposit growth kept pace with population in micropolitan counties but lagged in micropolitan and rural counties. The response of community bank loan portfolios to population growth also displayed different patterns among county types. Commercial real estate loan shares rose and residential loan shares fell, but at different rates. Commercial and industrial loan shares rose only in micropolitan counties. Agricultural loan shares rose only in metropolitan counties. If new population patterns persist, these relationships may materially affect the business models of community banks.

2023 Summary of Deposits Highlights - PDF
The 2023 Summary of Deposits article evaluates deposit and office trends by bank asset size group, community and noncommunity bank designation, and county type. Responses from the 2023 Summary of Deposits survey showed deposit declines of 4.8 percent between June 2022 and June 2023, the first annual decline in nearly 30 years. Deposit declines were greatest at large banks, while community banks reported deposit growth. The survey also showed the office closure rate improved from a year earlier, and community banks opened offices in metropolitan, micropolitan, and rural counties.

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