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ABA: The American Bankers Association
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ABA Statement on FDIC's Third Quarter Bank Earnings Report 2020

“Today’s FDIC report shows that banks remain resilient and continue to provide strong support for their customers and communities in the face of ongoing challenges from the COVID-19 pandemic. Despite significant headwinds, net income increased in the quarter. With solid capital levels and strong risk management measures in place, America’s banks remain a source of strength for the economy.

“Overall, net income grew by $32.4 billion over the prior quarter due in large part to a moderation of loan loss provisions to more normal levels. Banks have now added to their loan loss reserves in each of the first three quarters of 2020 in anticipation of the pandemic’s financial toll, with the industry total now up 95% year-over-year. Compared to a year earlier, net income was lower due to a drop in net interest income, with the average net interest margin falling to 2.68%. Total bank employment in the third quarter was up over a year earlier to 2.07 million.

“Lending fell in the quarter as banks saw softer loan demand, particularly among businesses most affected by the steep recession. The decline was not across the board, however, with mortgage and consumer auto loans rising. Total bank lending for the quarter remained nearly 5% above year-ago levels. Bank deposits stayed at record levels as consumers and businesses continued to seek the safety of federally insured financial institutions, but the pace of growth moderated. As expected, asset quality declined for many banks as delinquencies continued to rise.

“While the economic outlook remains uncertain, the prospect of effective COVID-19 vaccines could bolster the recovery moving forward. Banks stand ready to do their part while continuing to work with customers financially strained by the pandemic.”

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About the American Bankers Association

The American Bankers Association is the voice of the nation’s $22.5 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $18 trillion in deposits and extend nearly $11 trillion in loans.

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