A huge chunk of the profit increase in the second quarter was due to a lower tax rate, but rising net interest margins and loan growth signal that institutions continue to derive revenue from their loan book.
The insurance giant said it would need to make a “significant additional investment” to gain scale and be competitive. It has hired an investment banker to help it unload deposits and loans.
In an update on the Deposit Insurance Fund, FDIC staff said the fund's ratio of reserves to estimated deposits will likely reach the required 1.35% level by the second half of 2018.
The tax reform law passed late last year, which significantly cut the corporate tax rate, has been widely popular among banks, but a one-time hit to the value of their deferred tax assets was felt far and wide.
The company, which recently shareda three-year plan to bring in more lower-cost deposits and commercial loans, seems ready to play offense a year after the abrupt ouster of its CEO.
The full Senate will now consider the nomination of Jelena McWilliams to lead the FDIC, as well as nominees to sit on the Federal Reserve Board and the Financial Stability Oversight Council.
With tax reform close to the finish line, bankers are still clear winners from the compromise worked out between House and Senate negotiators. But the bill includes some caveats that might give institutions pause.
