Community banks reported a 3.4% second-quarter increase in net income from the previous quarter and a 0.7% increase from the same period a year ago, according to the FDIC’s latest Quarterly Banking Profile.

Community Bank Numbers: For the second quarter, community banks also reported:

  • Total assets increased 0.9% from the first quarter and 4.8% from the previous year.

  • Total loans and leases rose 2.6% from the previous quarter and 12.5% from a year ago.

  • Balances in all major loan portfolios rose from the previous quarter, with residential and commercial real estate driving the quarterly increase.

  • Net interest margins declined 10 basis points from the prior quarter but increased 5 basis points from a year ago to 3.39%.

  • The yield on earning assets rose 27 basis points quarter-over-quarter and 136 basis points year-over-year, while the cost of funds increased 37 basis points on a quarterly basis and 131 basis points from a year ago.

  • Net operating revenue increased 0.4% quarter-over-quarter on higher noninterest income, while higher interest expense—mainly on domestic deposits—drove a quarterly decline in net interest income.

  • Noninterest expense rose 1.5% from the previous quarter and 7.8% from a year ago.

  • Deposits declined 0.1% from the previous quarter but remained up 1.0% from a year ago.

  • The share of noncurrent loans and leases increased 2 basis points from the previous quarter, while the net charge-off rate was unchanged.

Overall Industry: The overall banking industry reported an 11.3% decrease in net income from the first quarter. Declines in noninterest income—reflecting the accounting treatment of the acquisition of three failed institutions—along with lower net interest income and higher provision expenses drove the decline.

Deposit Insurance Fund: The DIF balance increased $897 million from the end of the first quarter, largely reflecting increased assessment income. Combined with insured deposit growth of 0.8% over the quarter, the reserve ratio decreased 1 basis point to 1.10 percent.

Mergers and Closings: During the quarter, two banks opened, one bank failed, and 27 institutions merged.