ABA Statement on FDICs Quarterly Banking Profile

“The FDIC's latest Quarterly Banking Profile for the third quarter shows that the banking sector remains strong even as banks of all sizes exercise appropriate caution during a period of economic uncertainty. Broad-based loan growth and higher net interest income spurred by the Federal Reserve’s rate increases combined to boost bank revenue over the quarter. At the same time, banks remain well capitalized with strong liquidity while continuing to shore up loan-loss provisions. In the third quarter alone, banks increased provisioning by more than 30% to $14.6 billion to ensure they are ready for any economic circumstance that could arise.

“Despite high inflation and wavering economic growth, credit quality held firm with little to no deterioration. Total deposits were down and insured deposits were essentially flat, reflecting the gradual normalization of deposit levels following an unprecedented surge during the pandemic. We continue to urge the FDIC to reexamine its recent decision to increase bank assessments based on an assumption that elevated deposit levels would continue.

“The industry’s consumer and business loan portfolios saw strong growth as banks of all sizes continued to support Main Street. This was the fourth consecutive quarter where total loan growth exceeded the 10-year, pre-pandemic average. The FDIC report highlights that the banking industry remains well equipped to weather potential economic headwinds amid elevated inflation, continuing Fed rate hikes, and geopolitical uncertainty.”