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ABA Statement on FDIC's First Quarter Bank Earnings Report

“Today’s report, even taking into account one-time tax reform changes, shows the banking industry is exceptionally healthy and poised to continue driving a strong U.S. economy in the months ahead.  We’ve seen solid year-over-year loan growth, high asset quality and record levels of capital that banks are deploying to meet the needs of their customers and communities. The industry’s asset quality improved over the quarter due to a healthy economy that fueled more jobs and rising wages for consumers and more after-tax revenue that helped businesses pay down debt.
 
“A broad-based uptick in lending, increased non-interest income such as trading revenue and a lower effective tax rate all contributed to a notable increase in net income.  The industry’s improvement from last year’s fourth quarter was highly inflated due to a one-time write down of deferred tax assets triggered by the new tax law.  
 
“Tax reform has allowed an already strong banking industry to grow even stronger, and to increase safety and soundness. It has added to bank capital levels, which now stand at nearly $2 trillion, and will allow institutions to increase lending to meet future demand. Banks stand ready to provide more financing as their business customers begin to fully realize the positive incentives to expand facilitated by the tax law.
 
“With recent actions by the Fed, rising interest rates were also a factor in the first quarter.  Total interest income increased, but total interest expense did as well, as total bank deposits rose to more than $13.5 trillion.  Banks are well prepared to manage additional rate increases expected by the Fed this year.”

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About the American Bankers Association

The American Bankers Association is the voice of the nation’s $18 trillion banking industry, which is composed of small, regional and large banks. Together, America’s banks employ more than 2 million men and women, safeguard nearly $14 trillion in deposits and extend more than $10 trillion in loans.

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