About one-third of Connecticut-based banks reported earnings gains in the first quarter after last year saw bank earnings reach record levels, according to FDIC data.

The FDIC’s latest state banking performance summary showed that Connecticut’s 32 FDIC-insured institutions together had $86 million in net income in the first quarter, a 76 percent decline compared to the first quarter of 2021, when banks had $357 million in net income. The state’s banks ended 2021 with a record $1.42 billion in net income.

Fewer Connecticut banks reported earnings gains in the first quarter compared to the same quarter last year. About 31 percent of banks reported first-quarter net income compared to 90.6 percent in the first quarter of 2021. The full year of 2021 saw 94 percent of banks with positive earnings.

Most Connecticut banks are still considered profitable, with only 6.3 percent classified as unprofitable in the first quarter compared to 3.1 percent in the first quarter of 2021.

FDIC Acting Chairman Martin Gruenberg said in a statement announcing the latest FDIC Quarterly Banking Profile that the decline in income for the nation’s largest banks was tied to increases in loan provisions, while community banks saw reduced revenue from loan sales and higher business expenses.

“Overall, the banking industry reported broad-based increases in total loan balances, generally favorable credit quality metrics, and strong capital levels,” Gruenberg said. “These factors support the banking industry’s ability to meet the country’s banking needs while navigating the challenges presented by inflationary pressures, rising interest rates, and the end of pandemic support programs for borrowers.”

Gruenberg added that most banks nationwide reported increases in net interest income as a result of loan growth, with more than half reporting higher net interest income compared to the first quarter of 2021.

The net interest margin at Connecticut institutions was 2.92 at the end of the first quarter, compared to the first quarter 2021 net interest margin of 2.87 percent and the full-year 2021 ratio of 2.80 percent.

Connecticut institutions saw a collective 3.03 percent yield on all earning assets in the first quarter, down slightly from 3.08 percent in the first quarter of 2021 and up from the full-year 2021 yield of 2.97 percent.

Gruenberg in his statement did say that the banking industry continued to face lingering uncertainties from the pandemic and its effects on the health of the economy. He added that banks could see other challenges this year.

“In addition, inflationary pressures, rising interest rates, and geopolitical uncertainty could hamper bank profitability, weaken credit quality, and reduce loan growth,” Gruenberg said. “Specifically, rising interest rates, which have already contributed to high levels of unrealized losses in the banking industry’s securities portfolios, could also lower real estate and other asset values and limit loan repayment ability.”

Gruenberg added that these matters would receive FDIC supervisory attention over the next year.

Some year-over-year changes to loans, deposits and assets reflected Webster Bank’s merger with New York-based Sterling National Bank, which closed during the quarter. Buffalo-based M&T Bank’s acquisition of People’s United Bank did not take place until after the quarter ended.

Connecticut had total loans and leases of $103.76 billion in the first quarter compared to $88.38 billion in the first quarter of 2021 and $83.83 billion at the end of 2021. Webster Bank’s first-quarter net loans and leases were $42.98 billion, up from $20.99 billion in the first quarter of 2021, according to FDIC data.

Connecticut banks had $140.5 billion in deposits at the end of the first quarter compared to $116.3 billion at the end of 2021. Nationwide deposits increased 2.5 percent from the fourth quarter. A year ago, Connecticut-based banks had $112.2 billion in deposits.

Webster Bank had total deposits of $54.6 billion in the first quarter, up from $28.8 billion in the same quarter last year.

Total assets at the state’s institutions were $166.22 billion in the first quarter compared to $133.17 billion in the first quarter of 2021. Webster Bank’s assets increased year-over-year by more than $31 billion.

The number of full-time-equivalent employees also increased, with 13,928 full-time equivalent employees in the first quarter compared to 12,677 at the end of December and 13,364 a year ago. Webster Bank’s full-time equivalent employees increased year-over-year by about 1,050 to 4,126 at the end of the first quarter.