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Banks pull in $60B in Q4

FDIC banks reeled in nearly $60 billion in net income in the last quarter of 2020, despite a one-third decline in yearly income from 2019. The net income gain in Q4 was up 9.1 percent, largely on reduced loan loss provisions.

Yearly income was down by more than a third compared to 2019 numbers, according to the latest FDIC numbers, although banks pulled in almost $60 billion in net income last quarter, up 9.1 percent, largely on reduced loan loss provisions.

That contrast is pretty indicative of the rollercoaster that 2020 presented overall. Looking at ROA paints a rosier picture, but NIM has lingered near 3Q record lows. Net interest income posted its fifth straight quarter of decline.

Loan demand, outside of some mortgage activity in a surprisingly robust housing market, remains dishearteningly sluggish. CRE in particular looks to be on a rocky path, with the delinquency rate increasing steadily over the course of 2020, ending at 1.16 percent compared to 0.68 percent at the end of 2019.

The third round of the Paycheck Protection Program continues to provide a non-interest cushion, but those aren’t the kind of loans a banker wants to be making. PPP loans have helped shore up a crippled economy, but they’re a short-term patch for the community and the bank.