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For Immediate Release
May 24, 2017
ABA Media Contact: Mike Townsend
(202) 663-5471
Follow us on Twitter: @ABABankers

ABA Statement on FDIC’s First Quarter Bank Earnings Report

By James Chessen, ABA’s chief economist

     “Today’s report clearly shows the banking industry is healthy with strong capital and high asset quality. Nonetheless, regulatory burden continues to drive consolidation, with 54 community banks being pressured to merge or sell in the first quarter.
     “Banks took a more cautious approach to lending, reflecting lingering uncertainty about the direction of the economy.  While lending moderated a bit from its rapid pace last year, it remains on target to grow about 5 percent in 2017. The pace of borrowing for the rest of the year will largely depend upon whether the cloud of uncertainty lifts.
     “Managing risk in a changing environment is what banks do best, including preparing for several more Federal Reserve rate hikes this year.  Any rate hike will only come if the Fed is confident that the economy is moving forward and inflationary pressures are rising.  Lingering uncertainty will surely play a role, and suggests we’re likely to see a slow and careful pace of rate increases. 
     “The industry’s asset quality continues to strengthen despite a modest increase in consumer loan losses. Problem loans remained near record lows and equity capital, which is the foundation supporting all lending, continued to grow.
     “Banks saw robust deposit growth as consumers continue to value the protection and security of a bank account. Total bank deposits now stand at more than $13 trillion.  With strong capital levels, continued deposit growth and higher asset quality, the industry is well prepared for any ups and downs in the road ahead.”
The American Bankers Association is the voice of the nation’s $17 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $13 trillion in deposits and extend more than $9 trillion in loans.
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