As various challenges remain, community banks will need to lean on their deep local knowledge and customer-centric focus to navigate economic uncertainties that persist. FDIC 2025 Risk Review Community Banking Summary By JOSH SHARP, CPA, Audit and Consulting Manager, Suttle & Stalnaker PLLC The Federal Deposit Insurance Corporation (FDIC) recently released their 2025 Risk Review, offering an overview of economic conditions and banking performance, market risks, and credit risks impacting banks in 2024. Reading the FDIC’s 2025 Risk Review can offer value and practical insights to help community banks assess their risks, adjust strategies and stay ahead of regulatory expectations. This article will summarize key information as it relates to community banks. OVERALL ECONOMIC CONDITIONS AND BANKING PERFORMANCE Community banks held their ground despite various economic concerns over the last several years and have continued to adapt. The following are highlights of the 2024 economic conditions: • Economic growth was solid and exceeded expectations for much of the year. Real GDP growth was generally solid and was reported at 2.8% for 2024. • Inflation continued to decline, but at a slower pace and remained above the Federal Reserve’s 2% target. • Interest rates were elevated throughout 2024; however, the Federal Open Market Committee began lowering the target federal funds 50 basis points in September 2024, 24 WEST VIRGINIA BANKER
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