FDIC Q1 2024 Quarterly Data Shows a Healthy U.S. Banking Sector Despite Some Deterioration in Asset Quality

The Q1 2024 U.S. Federal Deposit Insurance Corporation (FDIC) Quarterly Banking Profile highlighted quarterly developments for the 4,568 reporting FDIC-insured institutions including an improvement in net income versus Q4 2023, largely because of the absence of the special charge the FDIC levied on banks last year to bolster its reserves after the bank failures in 2023. Highlights include

-- Net income improved on the absence of special FDIC assessment charges seen in Q4 2023.

-- Weakness in commercial real estate (CRE) and credit card loans drove the decline in asset quality metrics. However, asset quality metrics are still better than pre-pandemic levels.

-- Net interest margins decreased, on higher funding costs and slightly lower earning asset yields.

“The report painted a stable picture of the U.S. banking system, supported by a still strong economy and job market; although, pressured by deterioration in CRE portfolios, above target inflation and stratification in consumer financial health that contributed to higher delinquencies in consumer loans, says John Mackerey, Senior Vice President.