WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) added two banks to its “problem bank” list in the third quarter, while overall industry profits dipped 8.6%. The list includes banks that have received particularly low confidential scores from bank supervisors.
The total assets for banks on the problem list climbed to $87.3 billion, while the overall level of problem banks, now totaling 68 firms or 1.5% of all banks, is considered “not atypical” by FDIC Chairman Martin Gruenberg.
Despite the slight decline in profits, the banking industry showed resilience in the third quarter, with net interest income and the net interest margin increasing substantially. Net interest income rose by $4.5 billion in the quarter, and deposits rose 1.1% to $194.6 billion.
However, there were some signs of caution in the latest figures, including an increase in the ratio of past-due or non-accrual loans in the commercial real estate sector to 2.07%, the highest level recorded since 2013. This is due to borrowers continuing to grapple with high levels of office vacancies following the COVID-19 pandemic.
Overall, the latest FDIC report suggests stability in the banking sector, with unrealized losses on securities falling 29% as overall interest rates fell.
