For the 5,303 commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC), aggregate net income totaled $62.6 billion in second quarter 2019, an increase of $2.5 billion (4.1 percent) from a year earlier. The improvement in net income is attributable to a $4.9 billion (3.7 percent) increase in net interest income. Financial results for second quarter 2019 are included in the FDIC's latest Quarterly Banking Profile released today.

"The banking industry reported another positive quarter," McWilliams said. "Quarterly net income expanded due to higher net interest income, loan growth increased, asset quality indicators showed modest improvement, and the number of ‘problem banks' continued to decline. Community banks also reported another positive quarter. Net income at community banks benefited from higher net operating revenue, and the annual rate of loan growth at community banks was stronger than the overall industry."

"With the recent lowering of short-term interest rates and inversion of the yield curve in the second quarter, new challenges for banks in lending and funding may emerge. Therefore, banks need to maintain rigorous underwriting standards and prudent risk management in order to support lending through the economic cycle."

Total loan and lease balances rose by $152.2 billion (1.5 percent) from first quarter 2019. Growth among major loan categories was led by consumer loans, which includes credit cards, (up $42.2 billion, or 2.5 percent) and residential mortgage loans (up $38.3 billion, or 1.8 percent). Over the past 12 months, total loan and lease balances rose by 4.5 percent, a slight increase from the 4.1 percent annual growth rate reported last quarter. Commercial and industrial loans registered the largest dollar increase from a year earlier (up $142.7 billion, or 6.9 percent).

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