March 2025 Financial Reporting, Governance, and Risk Management 

FDIC releases quarterly banking profile

On Feb. 25, 2025, the Federal Deposit Insurance Corp. (FDIC) issued its quarterly banking profile, covering the quarter and the year ended Dec. 31, 2024.

FDIC-insured banks and savings institutions reported $268.2 billion full-year net income, an increase of $14.1 billion, or 5.6%, from 2023. The overall increase was driven largely by one-time events in 2023 and 2024 that drove noninterest expense in prior periods, as well as lower realized securities losses in 2024.

The report provides these additional full-year statistics:

• Net interest income totaled $698.7 billion for full-year 2024, an increase of $3.8 billion (2.1%) compared to 2023. Full-year net interest margin was 3.22%, a decrease of 8 basis points compared to 2023.
• Aggregate return-on-assets ratio was 1.12%, an increase of 3 basis points from prior year.
• Total loans and leases increased $273.1 billion (2.2%) from the prior year.
• Domestic deposits increased $214.4 billion (1.2%) from the previous quarter and increased $401.5 billion (2.3%) from the previous year.
• Noncurrent loans and leases increased to $125.3 billion compared to $120.5 billion in the prior quarter, and $107.1 billion in the same quarter of the prior year.
• Quarterly provision expense totaled $22.3 billion, a decrease of $1.3 billion compared to the prior quarter and $2.7 billion in the same quarter of the prior year. The allowance remains at $22.8 billion (same as last quarter).
• Unrealized losses on securities totaled $482.4 billion for the quarter, an increase of $118.4 billion (32.5%) from the prior quarter, and an increase of $4.8 billion (1.0%) for the same period in the prior year. The quarterly increase was driven by a quarter-over-quarter increase in longer-term interest rates, decreasing the value of securities reported by banks thus increasing unrealized losses.
• Community banks’ annual net income totaled $25.9 billion, a decrease of $624.4 million (2.4%) from 2023. Community bank net interest margin increased to 3.44%, an increase of 9 basis points compared to the prior quarter.

The total number of FDIC-insured commercial banks and savings institutions that filed call reports declined to 4,487, compared to 4,517 in the prior quarter. During the fourth quarter, four banks opened, one bank failed, 28 institutions merged with other banks, and one bank otherwise closed. Three banks did not file a call report after selling a majority of assets to credit unions. One failed after quarter-end and did not subsequently file a call report.

The number of banks on the FDIC’s problem banks list decreased from 68 to 66 in the quarter, remaining within the normal range of 1% to 2% of all banks during non-crisis periods. In an accompanying statement, acting Chair Travis Hill announced that the FDIC will no longer disclose the total assets of banks on the problem bank list, citing potential consequences that could arise from the public identification (or misidentification) of problem banks based on the disclosure.

NCUA issues fourth quarter performance data

On March 11, 2025, the National Credit Union Administration (NCUA) released its quarterly performance data summary for federally insured credit unions based on call reports submitted for the fourth quarter of 2024. Highlights include the following statistics:

• The number of federally insured credit unions declined to 4,455, compared to 4,499 in the prior quarter and 4,604 in the fourth quarter of 2023. Also in the fourth quarter, 2,794 federal credit unions and 1,661 federally insured, state-chartered credit unions existed.
• Total assets reported for federally insured credit unions totaled $2.31 trillion, an increase of $52 billion (2.3%) from the beginning of 2024.
• Net income totaled $14.4 billion for 2024, a decrease of $0.5 billion (3.6%) compared to 2023.
• Return on average assets for federally insured credit unions was 63 basis points for 2024, compared to 68 in 2023.

The credit union system’s net worth totaled $255.3 billion, an increase of $14.2 billion (5.9%) over the year. Aggregate net worth ratio increased to 11.07% as of year-end, compared to 10.69% at the prior year-end. The NCUA noted that these metrics exclude the current expected credit loss transition provision beginning in the first quarter of 2023.

FDIC board approves rule-related actions

On March 3, 2025, the FDIC board approved several rule-related actions, including the withdrawal of four proposals previously set forth under the Joe Biden administration:

• The brokered deposits proposal, which would have broadened the scope of existing regulations on brokered deposits by narrowing the primary purpose exception.
• The corporate governance proposal, which proposed to establish new safety and soundness standards related to corporate governance and risk management for FDIC-supervised institutions with total consolidated assets of $10 billion or more.
• The Change in Bank Control Act (CBCA) proposal, which would have removed the exemption that allowed certain entities to forgo submitting a notice to the FDIC (acquisitions of voting securities of a depository institution that already submits a notice to the Federal Reserve under the CBCA).
• The interagency incentive-based compensation proposal to place new restrictions on incentive-based compensation for executives at covered institutions in accordance with Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The board voted to issue a new proposal to rescind the FDIC’s 2024 Statement of Policy on Bank Merger Transactions. If adopted, the proposal would reinstate on an interim basis the previous merger policy statement, which was superseded by the 2024 document. In its press release, the FDIC noted that it will continue to reevaluate its bank merger review process. Comments are due April 20, 2025.

The board also voted to delay the compliance date of certain provisions of the agency’s sign and advertising rule. Covered entities will now have until March 1, 2026, to comply with sections 328.5 and 328.4 – that is, the requirements to display the FDIC official digital sign on the institution’s digital channel pages, and similar requirements related to its ATMs and similar devices. The rule’s other provisions retain a compliance date of May 1, 2025.

OCC issues interpretive letter addressing crypto asset activities

On March 7, 2025, the Office of the Comptroller of the Currency (OCC) published Interpretive Letter 1183, reaffirming the permissibility of bank participation in activities such as crypto asset custody, distributed ledger, and stablecoin activities. The issuance rescinds Interpretive Letter 1179, removing the requirements for banks to obtain written notification of supervisory nonobjection and to demonstrate that they have adequate controls in place to the satisfaction of their supervisory office prior to engaging in these activities.

The agency also withdrew from two 2023 joint statements on crypto-asset-related risks to banks, and liquidity risks to banking organization arising from crypto-asset market vulnerabilities.

FinCEN, Treasury suspend beneficial ownership enforcement and penalties

On Feb. 27, 2025, the Financial Crimes Enforcement Network (FinCEN) announced that it will not take action “against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act (CTA) by the current deadlines,” including fines, penalties, or other enforcement actions. The agency announced that it will issue an interim final rule to extend BOI reporting deadlines by March 21, 2025, and will solicit public input as it develops proposed amendments to the existing BOI reporting requirements to be issued in 2025.

Shortly thereafter, the U.S. Department of the Treasury announced that it will cease to enforce any penalties or fines related to the CTA BOI reporting requirements against U.S. citizens or domestic reporting companies. The department intends to issue a proposal to narrow the scope of the BOI reporting rule, making it applicable only to foreign reporting companies.