WASHINGTON — Reports from the 4,914 commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. (FDIC) – including 187 in Oklahoma – reflect aggregate net income of $69.5 billion in the third quarter of 2021.
That constituted a 35.9% increase ($18.4 billion) from a year ago, FDIC reported. “This increase was driven by further economic growth and improved credit conditions,” agency officials said.
The 187 Oklahoma institutions that contributed to the FDIC report included 143 state charter commercial banks, 42 national charter commercial banks, and two savings institutions.
Those with assets greater than $100 million numbered 130 and 57 had assets less than $100 million; 12 had assets of $1 billion to $10 billion, and four had more than $10 billion in assets each. The 13 banks in the Lawton market held $2.163 billion in deposits on June 30, the FDIC reported.
Collectively those 187 financial institutions employed 25,476 full-time-equivalent employees as of Sept. 30.
The Sept. 30 FDIC state profile of Oklahoma financial institutions, released Tuesday, showed that the median ratio of the sum of loans and leases that were 90 or more days past due or in non-accrual status constituted 0.55% of total loans – the lowest level in 11 quarters. The number of unprofitable institutions was pegged at 1.6%, while 75.4% reported earning gains, according to the FDIC.
Nationally, the net interest margin of FDIC-insured institutions improved to 2.56% in Q3, up 6 basis points from the recent record low in the previous quarter but down 12 basis points from the previous year, the agency said. Quarterly net interest margin expansion was accompanied by an increase in net interest income of $5.2 billion (4%) from the prior quarter.
Improvements in net interest income were widespread: nearly three-quarters of banks (72.1%) reported higher net interest income compared to a year ago.
Community banks reported an increase in quarterly net income year-over-year. Higher commercial and industrial loan income, reflecting in part increased fee income from the payoff and forgiveness of Paycheck Protection Program (PPP) loans, helped lift net interest income $2.2 billion (11.7%) from the same quarter a year ago, the FDIC reported.
Nearly two-thirds (65.8%) of the 4,450 FDIC-insured community banks reported higher quarterly net income.
Total loan and lease balances increased $62.7 billion (0.6%) from the previous quarter. Several portfolios contributed meaningfully to the industry’s growth, the FDIC said, including 1-4 family residential mortgages (up $41.3 billion, or 1.9%), consumer loans (up $39.6 billion, or 2.3%), non-farm non-residential commercial real estate loans (up $24.5 billion, or 1.5%), and loans to non-depository institutions (up $24.2 billion, or 3.9%).
Community banks reported a 0.2% decline in loan balances from the previous quarter, and a 1.1% decline from the prior year. Declines in commercial and industrial loan balances resulting from payoffs and forgiveness of PPP loans drove the change, the FDIC explained.
Credit quality continued to improve. Loans 90 days or more past due or in non-accrual status continued to decline (down 6.3%) from Q2. The non-current rate for total loans declined from the previous quarter, to 0.94%.
Net charge-offs also continued to decline (down $7.4 billion, or 58.4%) from a year ago. The total net charge-off rate nationally dropped to 0.19% – the lowest level on record. Among Oklahoma’s FDIC-insured financial institutions, net charge-offs to loans and leases amounted to 0.09%.
The balance in the Deposit Insurance Fund as of Sept. 30 was $121.9 billion, up $1.4 billion from the end of Q2.
Finally, three new banks opened during the quarter; 39 institutions merged with other FDIC-insured institutions – Stroud National Bank merged with Duncan’s First Bank and Trust Co. in June, and a Watonga bank merged with an Oklahoma City bank in November – and one U.S. bank shut down. No banks failed in the third quarter of this year, the FDIC reported.