For Immediate Release
August 22, 2017
ABA Media Contact: Mike Townsend
(202) 663-5471
Email: mtownsend@aba.com
Follow us on Twitter: @ABABankers

ABA Statement on FDIC’s Second Quarter Bank Earnings Report

By James Chessen, ABA’s chief economist

​     “Quarter after quarter, America’s banks continue to finance the businesses that drive growth and create jobs.  Small business lending was particularly strong in the second quarter, showing confidence by entrepreneurs that our eight-year expansion will continue well into 2018. Banks did temper their enthusiasm for auto lending, reflecting caution after several years of strong auto sales. Banks remain wary of emerging risks, particularly as the Fed continues its slow progress toward normalizing interest rates.
    
“While today’s report points to an industry that is healthy and robust as a whole, it also reveals the significant regulatory challenges facing the nation's banks. Compliance costs helped push 62 smaller banks to merge or sell in just a three-month period. Not a single new bank started this past quarter, which is shocking in a growing economy and drives home the need for Congress to enact common-sense reforms to ease the burden on banks.
 
     “Banks’ capital remains strong and is just short of $2 trillion dollars. Asset quality continues to improve with problem loans declining across the board.  While credit card charge-offs inched up, delinquencies in this area have remained near historical lows as consumers have succeeded at keeping debt at manageable levels. Banks excel at managing risk, particularly during times of uncertainty, and are well prepared for further increases in interest rates by the Fed that are expected to progress at a slow pace over the next year.
 
     “Banks are a reflection of the economy. Strong capital, earnings and asset quality put America’s banks in an excellent position to support the ongoing expansion of our economy, which we expect to continue into 2018.”
 
The American Bankers Association is the voice of the nation’s $17 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $13 trillion in deposits and extend more than $9 trillion in loans.
 
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