The Federal Deposit Insurance Corporation (FDIC) released its banking profile for the fourth quarter of 2021. Besides analyzing the fourth quarter of 2021, the profile also made note of full-year net income increase in 2021. For full-year 2021, the banking industry reported a net income of $279.1 billion, up $132 billion from 2020. The FDIC primarily attributed this increase to negative provision expense, supported by continued economic growth and further improvement in credit quality.
For fourth quarter 2021, FDIC noted a quarterly net income increase year-over-year of $4.4 billion, with quarterly net income totaling $63.9 billion. This increase was attributed to a net interest income of $5.8 billion. This was, however, a decline from the $5.6 billion net income from third quarter 2021.
The net interest income of $5.8 billion for fourth quarter 2021 helped lift net operating revenues by 4 percent to $201.7 billion from fourth quarter 2020. This net interest income improvement was widespread, with nearly two-thirds of banks having reported higher net interest income compared to one year ago.
Banks also saw total asset increases, loan growth, deposit growth through fourth quarter 2021. More notably though, is that no banks failed in fourth quarter 2021. The number of FDIC-insured institutions declined to 4,839 from 4,914 in third quarter 2021 due to 74 mergers and one bank ceasing operations. The number of banks on the FDIC’s “problem bank list” declined by two from third quarter to 44, the lowest level since the quarterly bank profile data collection began in 1984.
The American Bankers Association in a public statement, expressed optimism the growth highlighted in the profile would allow “banks… to continue supporting economic growth and [banks] are in a strong position to weather headwinds as the economy continues to rebuild.”