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ABA: The American Bankers Association

Statement on FDIC Second Quarter Bank Earnings Report

“The FDIC’s second quarter report shows that the banking industry remains healthy and continues to support ongoing economic growth. Banks saw the strongest year-over-year loan growth since the first quarter of 2018, led by the commercial and industrial sector. Lending by community banks was particularly strong, which demonstrates the breadth of bank engagement in every community. In addition, small business loans under $1 million increased by $13 billion compared to a year ago, which represents tens of millions of new loans to Main Street businesses that help to create jobs and stimulate local economic activity. Consumer lending was also strong, reflecting the cumulative effect of the solid growth in jobs and consumer confidence remaining high. Continued consumer spending, aided by the prudent provision of credit by banks, will help sustain economic growth.

“Asset quality has remained healthy with fewer problem loans. Banks continued to build on their strong capital position, adding over $38 billion in the quarter for a total of $2.1 trillion. In addition, capital ratios also increased. Nearly all banks— 99.7 percent—are well capitalized, which is the highest regulatory capital measure.

“Strong loan growth has intensified the competition for deposits to fund new loans. Moreover, with the Federal Reserve moderating its monetary policy, interest rate risk remains a top priority. Banks are well prepared to continue lending regardless of the economic cycle.

“We’re also very encouraged by the rate of new bank openings, and we hope the FDIC will continue its support for de novo institutions. A strong banking system is vital to the growth of the economy, and the industry remains poised to support a sustained period of American prosperity.”


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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