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ABA: The American Bankers Association

ABA Statement on FDIC’s Quarterly Banking Profile

“The FDIC's latest quarterly report on the health of America’s banks shows that the industry ended the year on firm footing as the economy continued its return to normalcy. Deposit growth remained strong while credit availability and demand continued on their promising upward trajectory.

“Total lending saw healthy growth and momentum over the quarter. Consumer lending was particularly strong and small business lending showed encouraging growth. This is consistent with the findings of ABA’s Economic Advisory Committee, made up of chief economists from major banking institutions across North America, who expect both credit availability and quality for business and consumer loans will improve over the next six months. While supply chain issues have caused backlogs within the housing and auto industries, we expect lending in these sectors to pick up steam as those issues resolve.

“With continued strong deposit growth over the past several quarters, loan demand rose in the last three months of the year and banks were increasingly able to deploy this capital into their communities. While deposits continued to increase, we are beginning to see consumer spending and business investment return to more typical patterns. The fourth quarter was the first since the second quarter of 2019 where loan growth exceeded deposit growth.

“Bank profits rose in 2021 due primarily to the recapture of reserves that banks had set aside for loan losses. As the economy continued to rebound from the initial shocks of the pandemic and credit quality improved, industry earnings recovered and rose from $147 billion in 2020 to $279 billion to 2021. The improvement included a $163 billion recapture of reserves, while net interest income remained relatively unchanged for the year. For the quarter, though, net interest income rose more than 2% to its highest level since the first quarter of 2020.

“The Tier-1 risk based capital ratio remained close to all-time highs, and the non-performing loan rate held at a level well below the average rate during the five years prior to the pandemic-driven recession. In an additional sign of resilience, the industry saw zero bank failures in 2021 for the first time since 2018. Bank employment remained stable, inching up to 2.07 million in the fourth quarter.

“Banks are poised to continue supporting economic growth and are in a strong position to weather headwinds as the economy continues to rebuild.”


About the American Bankers Association

The American Bankers Association is the voice of the nation’s $23.4 trillion banking industry, which is composed of small, regional and large banks that together employ approximately 2.1 million people, safeguard $18.6 trillion in deposits and extend $12.3 trillion in loans.

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