Banks Busted: FDIC-Insured Institutions Take $6.2 Billion Hit

WASHINGTON— Reports from 4,517 commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $65.4 billion in third quarter 2024, a decrease of $6.2 billion (8.6 percent) from the prior quarter. The absence of one-time gains on equity security transactions that occurred last quarter drove the quarterly decrease.

The banking industry reported an aggregate return-on-assets ratio (ROA) of 1.09 percent in third quarter 2024, down 11 basis points from one quarter earlier and down 8 basis points from one year earlier.

Community banks, however, showed resilience in the third quarter. Quarterly net income for the 4,082 community banks insured by the FDIC was $6.9 billion in the third quarter, an increase of $436 million (6.7 percent) from second quarter 2024.

The industry reported a quarter-over-quarter increase in net interest income of $4.5 billion as the net interest margin (NIM) increased seven basis points to 3.23 percent. All bank size cohorts in the Quarterly Banking Profile reported a higher NIM in the third quarter.

“The banking industry continued to show resilience in the third quarter,” said FDIC Chairman Martin J. Gruenberg. “Net interest income and the net interest margin increased substantially this quarter. Asset quality metrics remained generally favorable despite continued weakness in several loan portfolios, which we are monitoring closely.”

The banking industry still faces significant downside risks from the continued effects of inflation, volatility in market interest rates, and geopolitical uncertainty. The Deposit Insurance Fund Reserve Ratio increased four basis points to 1.25 percent in the third quarter.

The FDIC’s Quarterly Banking Profile, released today, includes the latest financial results for third quarter 2024. The report highlights the industry’s performance and provides context for the current state of the banking industry.