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While the economic effects of the Delta variant remain to be seen, improving economic conditions during the first half of 2021 helped drive Massachusetts bank earnings above pre-pandemic levels.

According to the FDIC’s latest state banking performance summary, Massachusetts’ 108 FDIC-insured institutions together had $2.34 billion in net income during the first six months of 2021, a 79 percent increase over the first six months of 2020, when the early months of the pandemic saw banks with $1.31 billion in net income. Net income was also higher compared to the first six months of 2019, when Massachusetts banks had $1.9 billion in earnings.

More Massachusetts banks reported earnings gains year-to-date through June 30 compared to both 2020 and 2019. About 87 percent of banks reported income gains in the first six months of 2021 compared to 34.5 percent in the first six months of 2020 and 56.9 percent on June 30, 2019.

Almost all institutions are now considered profitable, with just 1.85 percent classified as unprofitable. In the first six months of 2020, 10.9 percent of institutions were unprofitable.

FDIC Chair Jelena McWilliams said in a statement announcing the latest FDIC Quarterly Banking Profile that economic growth and improving credit quality had supported strong earnings nationwide.

“A second consecutive quarter of negative provision expense drove an increase in earnings year over year, as banks continued to adjust expectations for potential credit losses,” McWilliams said. “Notably, the banking industry reported a modest quarterly increase in total loan balances for the first time since second quarter 2020, reflecting an uptick in loan demand, while the net charge-off rate reached a record low.”

While noting that community banks also reported strong revenue growth and improved asset quality in the second quarter, McWilliams added that net interest margin compression had continued.

“[P]ersistent low interest rates contributed to further contraction in the average net interest margin, which reached a new record low this quarter,” she said.

The net interest margin at Massachusetts institutions was down to 1.66 percent at the end of the second quarter compared to 1.90 percent at the same time last year. On June 30, 2019, the net interest margin was 2.41 percent.

Massachusetts institutions saw a collective 1.77 percent yield on all earning assets in the first six months of 2021, down year-over-year from 2.31 percent.

Total loans and leases were $167.87 billion compared to $169.25 billion in the second quarter of 2020 but ahead of the same period in 2019, when loans totaled $156.6 billion.

“Like the broader industry, community banks reported increased balances in several loan categories relative to first quarter, despite a decline in aggregate loan balances because of repayment and forgiveness of Paycheck Protection Program (PPP) loans,” McWilliams said.

Massachusetts’ banks together had $438.2 billion in deposits on June 30, up 21 percent from the same date last year, when deposits totaled $361.2 billion.

Total assets at the state’s institutions were about $523.9 billion at the end of the second quarter compared to $465.1 billion at the end of the second quarter 2020.

The number of full-time-equivalent employees in these institutions declined slightly from the first quarter and year-over year. Massachusetts institutions had 51,171 full-time equivalent employees at the end of June compared to 51,272 at the end of March and 51,624 a year ago.