![]() Community banks saw loan growth in all major portfolios. ![]() Loan and lease balances continued to see widespread growth in third quarter 2023. Loan and lease balances continued to grow in third quarter 2023, with 77.1% of community banks reporting quarterly loan growth. ![]() Yet, the cost of funds increased by 25 basis points from second quarter 2023, a 138-basis point increase from the year-ago quarter. The yield on earning assets increased 21 basis points from second quarter 2023, a 110-basis point increase from the year-ago quarter. The increase in cost of deposits outpaced the increase in yield on loans, resulting in lower NIM. The NIM was down 28 basis points from the year-ago quarter. Higher deposit costs continued to impact NIM, with 2023 seeing quarterly declines of 22 basis points and 10 basis points in first and second quarter 2023. Community banks’ net interest margins (NIM) dropped four basis points in the third quarter. Net income for community banks was impacted by higher noninterest expense, lower net interest income, increased provisions, and greater losses on the sale of securities. More than half (55.0%) of all community banks reported a decline in net income compared to second quarter 2023. Net income declined 4.8% in third quarter 2023 from a quarter ago to $6.7 billion. BerryDunn’s key takeaways from the report are as follows: Community banks’ quarterly net income decreased 15% from third quarter 2022. In third quarter 2023, this section included the financial information of 4,166 FDIC-insured community banks. The report also contains a section specific to community bank performance. The report provides financial information based on Call Reports filed by 4,614 FDIC-insured commercial banks and savings institutions. The Federal Deposit Insurance Corporation (FDIC) recently issued its third quarter 2023 Quarterly Banking Profile.
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