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ABA: The American Bankers Association

ABA Statement on FDIC's Quarterly Banking Profile

“The FDIC's latest quarterly report shows that banks remain fundamentally sound as they continue to support economic recovery. The industry’s asset quality and deposits remain strong, allowing banks to continue funding loans that are making a difference in their communities and the broader economy.

“Total bank lending rose slightly, growing to the highest level since mid-2020. This increase was primarily driven by growth in one-to-four family mortgage loans as well as automobile, credit card and commercial real estate lending. Small business lending remained above pre-COVID levels but slowed due to Paycheck Protection Program loan forgiveness and repayment.

“Credit quality remained a bright spot. The net charge-off rate fell to its lowest level on record, and the share of industry loans 90 or more days late declined for a third consecutive quarter ‒ to a level not seen since 2007. Loans 30 to 89 days delinquent remained close to the lowest ratio to total loans ever reported by the FDIC. 

“Backed by strong portfolios, banks recovered reserves for the third straight quarter while maintaining total reserves well above the pre-recession levels from 2019. With interest rates near historical lows, recovering reserves has helped bolster many banks' bottom line. With the industry’s overall net interest margin still near a historic low, future Fed decisions on interest rates will play an important role going forward.

“After climbing to the highest level ever reported by the FDIC in the previous quarter, the industry’s tier 1 risk-based capital ratio held strong at 14.27%. Consumers and businesses continued to seek the safety of FDIC-insured bank accounts, with deposits into banks of all sizes growing another 2.3%. Banks now safeguard 31.9% more deposits than in 2019. It was encouraging to see three new banks open during the quarter, bringing the total number over the year to 12, and the FDIC’s Problem Bank List at its lowest level ever.

“Banks remain on solid footing as the holiday season kicks into full gear, and chief economists across some of North America’s largest banks expect credit quality to remain strong in the next six months.”


About the American Bankers Association

The American Bankers Association is the voice of the nation’s $23.6 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $19.4 trillion in deposits and extend $12 trillion in loans.

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