Community banks reported $6.9 billion in net income during the second quarter, an 8.1 percent increase from the same time last year, the FDIC reported in its Quarterly Banking Profile
. The increase was fueled by gains of 5.1 percent in net interest income, 4.8 percent in noninterest income, and 654.8 percent on securities sales.
Overall, FDIC-insured institutions reported a 4.1 percent annual gain in net income on a 3.7 percent improvement in net interest income. The FDIC’s Problem Bank List declined from 59 to 56 banks, the lowest number since the first quarter of 2007. Merger transactions absorbed 60 institutions, five new banks opened, and one institution failed.
The Deposit Insurance Fund balance rose by $2.6 billion to $107.4 billion, and its reserve ratio increased four basis points to 1.40 percent, triggering assessment credits for community banks under $10 billion.