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Quarterly Banking Profile

FDIC Banking Issues in Focus

The Banking Issues in Focus provides an in-depth analysis of topical banking issues. These articles range from timely analysis of economic and banking trends at the national and regional level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and the development of regulatory policy. These articles are featured in the FDIC Quarterly.

Recent Articles:

U.S. Industrial Transition and Its Effect on Metro Areas and Community Banks
John M. Anderlik, J. Will Greene, Kathy Kalser, Eric Robbins, Scott Schweser and Brian L. Webb

As alternative forms of energy and lower carbon technologies emerge, the economies of areas with concentrations in industries exposed to these changes may undergo transition. The FDIC study “U.S. Industrial Transition and Its Effect on Metro Areas and Community Banks” explores industrial transitions in the United States between 1970 and 2019. The economies and demographics of many Metropolitan Statistical Areas (metros) changed significantly during the five-decade span. The national economy shifted away from the manufacturing sector, and industries such as steel and textiles were hollowed out by the forces of automation and globalization. In the study, the authors create a novel metric called a Transition Score to measure industrial transition across metros, use this metric to determine which metro areas were most affected by industrial transition, and compare the economic and banking performance of affected areas to areas with lower levels of transition.

The Effects of Population Change on Community Bank Deposits and Loans
Jared Rothman 

For decades, U.S. rural county population generally declined while metropolitan county population grew robustly. The 2020 pandemic disrupted these trends, with potentially significant implications for community banks. Based on pre-pandemic data, community bank deposit growth correlated strongly with population growth. However, deposit growth kept pace with population in micropolitan counties but lagged in micropolitan and rural counties. The response of community bank loan portfolios to population growth also displayed different patterns among county types. Commercial real estate loan shares rose and residential loan shares fell, but at different rates. Commercial and industrial loan shares rose only in micropolitan counties. Agricultural loan shares rose only in metropolitan counties. If new population patterns persist, these relationships may materially affect the business models of community banks.

Banking Issues in Focus by Topic:

Last Updated: May 15, 2024