FDIC Quarterly

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The FDIC Quarterly provides a comprehensive summary of the most current financial results for the banking industry, along with feature articles. These articles range from timely analysis of economic and banking trends at the national and regional level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and the development of regulatory policy. The FDIC Quarterly brings together data and analysis that were previously available through three retired publications -- the FDIC Outlook, the FDIC Banking Review, and the FYI: An Update on Emerging Issues in Banking. Past issues of these publications are archived under their original publication names.

FDIC Quarterly 2020 Volume 14, Number 4

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Quarterly Banking Profile: Third Quarter 2020

FDIC-insured institutions reported aggregate net income of $51.2 billion in third quarter 2020, up $32.4 billion from second quarter 2020 but down $6.2 billion from the year-ago quarter. The quarterly increase in net income was attributable to a $47.5 billion decline in provision expenses between second and third quarter 2020. Lower net interest income drove the annual decline in net income. Slightly more than half (51.3 percent) of all institutions reported lower net income compared to a year ago. The return on assets ratio was 0.97 percent for the quarter, down from 1.25 percent in third quarter 2019 but up from 0.36 percent in second quarter 2020.

Community Bank Performance
Community banks—which represent 91 percent of insured institutions—reported annual growth in quarterly net income of $659.7 million despite a 116.6 percent increase in provision expense and continued net interest margin (NIM) compression. Nearly half of all community banks (48 percent) reported higher quarterly net income in third quarter 2020 compared with third quarter 2019. Higher revenue from loan sales drove the improvement in quarterly net income.

Insurance Fund Indicators
The Deposit Insurance Fund (DIF) balance totaled $116.4 billion at the end of third quarter, an increase of $1.8 billion from the previous quarter. Assessment income, interest earned on investments, and negative provisions for insurance losses were the largest sources of the increase, offset partially by operating expenses and losses on available-for-sale securities. The DIF reserve ratio was 1.30 percent on September 30, 2020, unchanged from June 30, 2020, and 11 basis points lower than September 30, 2019.

Featured Article:

The Importance of Community Banks in Paycheck Protection Program Lending - PDF
During the current public health emergency, community banks are playing a vital role in supporting small businesses through the Small Business Administration’s Paycheck Protection Program (PPP). Community banks throughout the country participated in the program, with community bank PPP loan portfolios representing over 30 percent of total bank PPP loans.

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