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2000 FDIC Q. Banking Profile 1 (2000)

handle is hein.journals/fdicqubkp2000 and id is 1 raw text is: First Quarter 2000 .. n e. FDIC Donna Tanoue, Chairman anking Profile COMMERCIAL BANKING PERFORMANCE - FIRST QUARTER 2000 * Industry Earnings Surpass $19.5 Billion Commercial Loan Charge-Offs And Delinquencies Rise * Commercial Real Estate Lending Accelerates a Problem Banks Rise To Highest Level In 11 Quarters A strong economy and significant market-related gains helped propel commercial bank earnings to a new record in the first quarter of 2000. However, changes in the composition of banks' assets, liabilities and revenues may leave them more vulnerable to changes in the economy. Insured commercial banks reported $19.5 billion in net income for the quarter, an increase of $1.6 billion (8.8 percent) over the first quarter of 1999. Industry earnings were $125 million above the previous quarterly record, set in the third quarter of 1999. The average return on assets (ROA) rose to 1.35 percent from 1.32 percent a year ago. Almost two-thirds (61.8 percent) of all com- mercial banks recorded an ROA of 1 percent or more in the first quarter, while 59.0 percent had a higher ROA than in the first quarter of 1999. While average profitability increased for the entire industry, the frequency of improvement was greatest among smaller banks. Almost 60 per- cent - 59.5 percent - of all commercial banks $ Billion QUARTERLY NET INCOME, 1996-2000 with less than $1 billion in assets had higher ROAs than a year ago, while only 49.6 percent of banks with assets of $1 billion or more showed an increase. The average ROA at banks with less than $1 billion in assets rose to 1.29 percent from 1.25 percent a year ago. The improvement in average profitability reflected a higher proportion of banks operating as Subchapter S corporations (see Notes to Users, p. 21). Strong growth in noninterest income, especially at large banks, continues to make the greatest contribution to the improvement in industry earnings. First-quarter earnings also benefited from relatively slow growth in noninterest expenses, due in part to the absence of the large charges related to mergers and restructurings that have characterized many past quarters. Growth in loan-loss provisions was moderate. Noninterest income of $38.4 billion was $3.7 bil- lion (10.6 percent) higher than a year ago. All cat- NONINTEREST INCOME AS A PERCENTAGE OF NET OPERATING REVENUE,* 1985-2000 Quarterly Noninterest Income, % of Net Operating Revenue* FDIC Division of Research & Statistics Don Inscoe Associate Director Statistics Branch (202) 898-3940 Tim critchfield (202) 898-8557 Jim McFadyen (202) 898-7027 Ross Waldrop (202) 898-3951 * Securities and Other Gains/Losses, Net Net Operating Income 19.4 19.5 13.813.2 13714.5 14.6 14.7 13159 161 15-014.8 12.0 40 30 20 (1 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 1996 1997 1998 1999 2000 10 1234 1234123412341234123 4123 4123 41234123 4123 41234123 4123412341 1986 1988 1990 1992 1994 1996 1998 2000 *Net operating revenue equals net interest income plus noninterest income. Requests for copies of and subscriptions to the FDIC Quarterly Banking Profile should be made through the FDIC's Public Information Center, 801 17th Street, NW, Washington, DC 20434; telephone (202) 416-6940 or (800) 276-6003; or Email: publicinfo@fdic.gov. Also available on the Internet at www.fdic.gov Comparable financial data for individual institutions can now be obtained from the FDIC's Institution Directory (L.D.) System on this Web site. Assets > $1 Billion 46.6 Assets < $1 Billion 28.0 26.5 - e 4* 4 - - - - -S 17.9 0 1

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