ABA Statement on FDIC’s Quarterly Banking Profile

“Despite a period of stress in the banking system, the FDIC's latest Quarterly Banking Profile demonstrates the continued resiliency of the overall sector. In the first three months of the year, the data show that the broader industry weathered the challenges of rising interest rates and the uncertain economy while increasing net income.

“Banks of all sizes have proactively bolstered their capital levels amid extraordinary headwinds, while increasing the reserve coverage ratio to a record level. Credit quality remains on firm footing as banks tighten their underwriting standards. Even with recent challenges, lending increased 0.4% during the quarter when excluding the transfer of loans to the FDIC. On an annual basis lending increased 7.5%.

“As anticipated, banks saw deposit outflows during the period, yet insured deposits increased and total deposits remained well above pre-pandemic levels. Continued deposit outflow is to be expected as part of the normal monetary tightening cycle and the record rise in deposits during the pandemic, though as Chairman Gruenberg noted this outflow has already begun to moderate.

“Overall, the industry remains well-capitalized and highly liquid, allowing banks to continue serving as critical economic drivers. In addition to being the primary source of credit for consumers and businesses, banks are significant national employers. Banks added just over 4,000 positions in the first quarter, with industry employment rising by more than 40,000 year-over-year to more than 2.1 million people.”