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ABA: The American Bankers Association
Statement

ABA Statement on FDIC’s First Quarter Bank Earnings Report

“The FDIC’s first quarter report shows the banking industry is healthy and poised to continue driving a robust U.S. economy. America’s banks continued to maintain record high capital levels, abundant reserves and sustained deposit growth to support increased loan demand. Bank capital is approaching $2.1 trillion as capital-to-asset ratios have strengthened across the board, and asset quality continues to improve with declines in past-due accounts.

“Business and real estate lending continued to expand and are high-performing areas in a dynamic economy. Business lending in particular has seen strong growth compared to a year ago as companies have sought to expand their operations. Consumer lending slowed a bit following steady growth in previous quarters as banks adopted a more cautious approach to underwriting these loans at this stage in the economic cycle. While bank regulators continue to monitor growth in leveraged lending, they have noted that most of that growth is taking place among non-banks and the risk to banks is limited.

“The Fed's interest rate increases last year continued to play a role in banks’ performance in the first quarter. Total interest income increased, but so did total interest expense as bank deposits rose to more than $13.9 trillion. The deposit market remains extremely competitive, and banks are raising deposit rates to attract and retain more customers.

“A strong banking system is critical to supporting economic growth regardless of where we are in the business cycle. The solid base of bank earnings, capital, liquidity and quality assets provides a strong foundation that will serve the economy well moving forward.”

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About the American Bankers Association

The American Bankers Association is the voice of the nation’s $21.1 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $17 trillion in deposits and extend nearly $11 trillion in loans.

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Mike Townsend

(202) 663-5471

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