FDIC-insured banks had a good first quarter and community banks led the way, according to new data from the regulator.
Two-thirds of the nation's 6,419 FDIC-insured financial institutions reported year-over-year earnings growth in the first quarter of 2015, and the percentage of unprofitable banks fell to 5.6% for the quarter, the FDIC reported.
Aggregate net income for commercial banks and savings institutions with FDIC insurance rose 6.9% to $39.8 billion in the first quarter of 2015, according to the report. The increase was largely due to a $4.3 billion rise in net operating revenue for the quarter. The number of problem banks has fallen 72% from the 888-bank peak in the first quarter of 2011, the FDIC noted.
But it was community banks that led the pack. Their net operating revenue rose 8.7% to $21.5 billion at for the quarter compared to the first quarter of 2014. Additionally, net incomes at community banks rose 16% to $4.9 billion in the first quarter of 2015 versus the same quarter last year.
“Community banks reported improved performance during the quarter that outpaced the overall industry,” FDIC chairman Martin Gruenberg said. “Their earnings were up significantly from a year ago, and their loan growth was appreciably higher than the rest of the industry.”
“In the banker's parallel universe, this news won't cause a ripple; no matter their performance, the sky is always falling, and it's always the fault of credit unions. It would be nice to see them acknowledge just once that credit unions aren't the competitive threat the banks try to portray,” said John McKechnie, a partner at Washington, D.C.-based advocacy firm Total Spectrum.
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