Earlier this week, the FDIC released the latest issue of both its Quarterly Banking Profile and the FDIC Quarterly Report–a “comprehensive summary of the most current financial results for the banking industry” that is published quarterly by the FDIC’s Division of Insurance and Research. According to its latest Report, community banks—which represent 92 percent of insured institutions—reported net income of $5.6 billion in the fourth quarter of 2016, a 10.5% increase over 2015. According to the Report, “the increase was driven by higher net interest income and noninterest income, which was partly offset by higher loan-loss provisions and noninterest expense.” The Report also reveals an 8.3 percent 12-month growth rate in loan balances at community banks. The Report notes further that “community banks accounted for 43 percent of small loans to businesses.” Notably, the FDIC observed that, although deposits across the banking industry grew, the number of non-community bank offices actually shrank. By contrast, however, the number of community banks increased during 2016.
Also this week, the OCC announced the release of its “OCC Mortgage Metrics Report, Fourth Quarter 2016,” its quarterly report based on performance data from seven national bank servicers, including over a third of all outstanding U.S. residential mortgages. As explained in the OCC’s Q4 2016 Report, foreclosure activity declined and mortgage performance continued to improve through the fourth quarter of 2016, with 94.7 percent of mortgages current and performing at the end of 2016, compared with 94.1 percent a year earlier. Servicers initiated 45,495 new foreclosures in the fourth quarter, a decrease of 5.1 percent from previous quarter and a decrease of 28.2 percent year-over-year. Notably, the number of mortgage modifications—most involving a reduction in borrower monthly payments—similarly reflected a substantial 9.3 percent decrease from the previous quarter. The OCC also notes, among other things, that the percentage of seriously delinquent mortgages dropped to 2.3 percent of the portfolio, down from 2.7 percent reported in the fourth quarter a year earlier.