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For Immediate Release
​February 28, 2017
ABA Media Contact: Jeff Sigmund
(202) 663-5439
Email: jsigmund@aba.com
Follow us on Twitter: @ABABankers

ABA Statement on FDIC’s Fourth Quarter Bank Earnings Report

By James Chessen, ABA’s chief economist

​“Banks continued to be a positive economic force in 2016 with robust year-over-year growth in business loans, as well as commercial real estate and construction lending. A strong revival in business confidence—buoyed by expectations of tax relief and less red tape—is likely to accelerate loan demand in 2017, creating even more opportunities for banks to provide the credit necessary for companies to grow and expand their workforce.

“Asset quality remained healthy even though net charge-offs rose as banks closed the books for 2016.  Charge-off rates were near historic lows at 0.47 percent -- well below rates observed during the recession.  Banks are ready for additional interest rate increases by the Fed this year, and have factored in any potential risk from these into their asset and liability management plans.  Deposit flows remain steady and banks are highly capitalized at levels well above even the most stringent regulatory standards. Banks remain laser-focused on deploying capital through loans that help grow businesses and create jobs.

“At the same time, regulatory pressures and greater capital requirements were challenges that helped drive 251 banks to merge in 2016. While the industry’s solid performance as a whole demonstrates a very resilient banking system, the underlying regulatory pressures driving community banks to sell or merge can’t be ignored.  A tailored system of regulation would go a long way toward allowing banks of every size to be successful in their communities.”

The American Bankers Association is the voice of the nation’s $16 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $12 trillion in deposits and extend more than $9 trillion in loans.
 
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