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Shared National Credits Program 2014 Review Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation Office of the Comptroller of the Currency Washington, D.C. November 2014 Contents Executive Summary .................................................................................................................... 4 About the SNC Review ............................................................................................................... 5 PART I: SNC Credit Quality ...................................................................................................... 7 Overall SNC Portfolio................................................................................................................. 7 Overall SNC Credit Quality and Trends ..................................................................................... 7 PART 2: SNC Loan Distribution................................................................................................ 8 Loan Distribution by Volume ..................................................................................................... 8 Loan Distribution by Credit Quality ........................................................................................... 8 PART 3: Syndicated Loan Underwriting Trends ..................................................................... 9 PART 4: SNC Portfolio – Maturity Profile ............................................................................... 9 Appendix A: Committed and Outstanding Balances ............................................................... 10 Appendix B: SNC Industry Trends by Sector.......................................................................... 11 Appendix C: Exposure by Entity Type .................................................................................... 12 Index of Figures and Tables Figure 1: Overall Credit Facilities and Commitment Trends ........................................................ 7 Figure 2: Overall Criticized Volume and Percentage Trends ........................................................ 8 Table 1: Distribution of SNC Commitments by Lender Type ....................................................... 8 Figure 3: SNC Portfolio—Maturity Schedule ............................................................................... 9 -2- Errata The Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency revised this report on November 10, 2014 to correct certain 2014 year figures in Appendix B for the commodities, real estate, distribution, and government industries. -3- Executive Summary The interagency Shared National Credits (SNC) Review for 2014 indicates that credit quality of syndicated loans remained broadly unchanged from last year’s review of large syndicated corporate loans and loan commitments held by U.S. bank organizations, foreign bank organizations (FBO), and nonbanks, such as securitization pools, hedge funds, insurance companies, and pension funds. Criticized and classified assets remained elevated at 10.1 percent and 5.6 percent, respectively. The volume of criticized assets increased 12.8 percent to $340.8 billion. As a percentage of total commitments, the criticized asset rate remained relatively unchanged from the prior year, as the overall SNC portfolio grew as rapidly as weak assets. A criticized asset is an asset that is rated special mention, substandard, doubtful, or loss. Finally, special mention dollar volume increased 29.6 percent from the 2013 level. The review also found serious deficiencies in underwriting standards and risk management of leveraged loans. Overall, the SNC review showed gaps between industry practices and the expectations for safe- andsound banking articulated in the 2013 guidance1. Thirty-one percent of leveraged transactions originated within the past year exhibited structures that were cited as weak. In addition, transactions that increased leverage without a subsequent increase in cash flow should be viewed with greater caution. In many cases, examiners questioned the borrower capacity to repay newly underwritten loans if economic conditions deteriorated or if interest rates rose to historical norms. As noted in the 2013 guidance, financial institutions should ensure borrowers can repay credits when due, and that borrowers have sustainable capital structures, including bank borrowings and other debt, to support their continued operations through economic cycles. Please see the 2014 Leveraged Loan Supplement for additional discussion around leveraged lending. The 2014 review included an evaluation of underwriting standards on SNCs that were originated in 2013. Examiners noted an increased frequency of weak underwriting during the past year, and this trend heightens the agencies’ concern. Agents issued a high volume of syndicated leveraged loans to borrowers that may not have capacity to repay and de-lever to a sustainable level over a reasonable period. Borrowers also found it easier to increase leverage through dividend recapitalization transactions. Nonbank entities continued to be the primary buyers of riskier, leveraged loans. Nonbank entities held a disproportionate share of classified assets compared with their overall ownership of the SNC portfolio. Nonbank entities owned2 $140.8 billion, or 74.3 percent of all SNC classified credits. A classified asset is an asset that is rated substandard, doubtful or loss. Near-term refinancing risk remained low in the SNC portfolio with only 15.0 percent of SNC commitments scheduled to mature in 2014 and 2015 compared with 39 percent that mature in 2016 and 2017. During 2013 and into 2014, borrowers continued to refinance and modify loan agreements to extend maturities. These transactions had the effect of relieving near-term refinancing risk, but may not improve borrowers’ ability to repay their debts in the longer term. Other findings from the 2014 SNC Review include: Total SNC commitments increased by $379 billion to $3.39 trillion, or 12.6 percent from the 2013 review. Total SNC outstandings increased $206 billion to $1.57 trillion, an increase of 15.2 percent. Criticized assets increased from $302 billion to $341 billion, representing 10.1 percent of the SNC portfolio, compared with 10.0 percent in 2013. Criticized dollar volume increased 12.8 percent from the 2013 level. 1 78 Fed. Reg. 17766 (March 22, 2013) 2 Ownership of SNCs results from retention of a portion of SNCs originated for distribution and/or purchase of SNC loan participations. -4- Classified assets increased from $187 billion to $191 billion, representing 5.6 percent of the portfolio, compared with 6.2 percent in 2013. Classified dollar volume increased 2.1 percent from 2013. Credits rated special mention, which exhibit potential weakness and could result in further deterioration if uncorrected, increased from $115 billion to $149 billion, representing 4.4 percent of the portfolio, compared with 3.8 percent in 2013. Special mention dollar volume increased 29.6 percent from the 2013 level. The overall severity of classifications declined, with credits rated as doubtful decreasing from $14.5 billion to $11.8 billion and assets rated as loss decreasing slightly from $8 billion to $7.8 billion. Loans that were rated either doubtful or loss account for 0.6 percent of the portfolio, compared with 0.7 percent in the prior review. Adjusted for losses, nonaccrual loans declined from $61 billion to $43 billion, a 27.8 percent reduction. Appendix C reflects nonaccrual loans inclusive of loss dispositions. The distribution of credits across entity types—U.S. bank organizations, FBOs, and nonbanks— remained relatively unchanged. U.S. bank organizations owned 44.1 percent of total SNC loan commitments, FBOs owned 33.5 percent, and nonbanks owned 22 percent. Nonbanks continued to own a larger share of classified (73.6 percent) and nonaccrual (76.7 percent) assets than their total share of the SNC portfolio (22 percent). Institutions insured by the Federal Deposit Insurance Corporation (FDIC) owned 10.1 percent of classified assets and 6.7 percent of nonaccrual loans. About the SNC Review The SNC program, governed by an interagency agreement among the Board of Governors of the Federal Reserve System, the FDIC, and the Office of the Comptroller of the Currency (the agencies), is designed to review and assess risk in the largest and most complex credits shared by multiple financial institutions. The program provides uniform treatment of, and increased efficiency in, the risk analysis and classification of shared credits. The annual SNC Review results are prepared and released jointly by the agencies. The 2014 SNC Review included examination of $975 billion in credit commitments covering 29 percent of the $3.39 trillion SNC portfolio. The sample was weighted toward noninvestment grade and criticized credits with 89.3 percent of all special mention and classified credits reviewed. Results of the review are based on analyses prepared in the second quarter of 2014, using credit-related data provided by federally supervised institutions as of December 31, 2013, and March 31, 2014. -5- Definitions Credit Facilities—Credit facilities include syndicated loans and loan commitments, letters of credit, and commercial leases, and other forms of credit. Commitment amounts include both drawn and undrawn portions of the loans, or facilities. The SNC review reports only the par amounts of commitments, which may differ from the amounts at which loans are carried by investors. Criticized and Classified Assets—Criticized assets include all assets rated special mention, substandard, doubtful, and loss. Classified assets include assets rated substandard, doubtful, and loss. The agencies’ uniform loan classification standards and examination manuals define these risk rating classifications. Doubtful—Doubtful assets have all the weaknesses of assets classified as substandard and when the weaknesses make collection or liquidation in full, on the basis of available current information, highly questionable or improbable. Loss—Assets classified as loss are uncollectible and of so little value that their continuance as bankable assets is not warranted. Amounts classified as loss should be promptly charged off. This classification does not mean that there is no recovery or salvage value, but rather that it is not practical or desirable to defer writing off these assets, even though some value may be recovered in the future. Nonaccrual—Nonaccrual loans are defined for regulatory reporting purposes as loans and lease financing receivables that are required to be reported on a nonaccrual basis because (a) they are maintained on a cash basis owing to a deterioration in the financial position of the borrower, (b) payment in full of interest or principal is not expected, or (c) principal or interest has been in default for 90 days or longer, unless the obligation is both well secured and in the process of collection. Pass—A credit that is in good standing and is not criticized in any way. Shared National Credit (SNC)—A shared national credit is any loan or formal loan commitment, and any asset such as real estate, stocks, notes, bonds, and debentures taken as debts previously contracted, extended to borrowers by a federally supervised institution, its subsidiaries, and affiliates, that aggregates to $20 million or more and is shared by three or more unaffiliated federally supervised institutions, or a portion of which is sold to two or more unaffiliated federally supervised institutions. The threshold of $20 million has remained unchanged since the first report in 1977. Special Mention—Special mention assets have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses could result in further deterioration of the repayment prospects, or in the institutions’ credit position in the future. Special mention assets are not adversely rated and do not expose institutions to sufficient risk to warrant adverse rating. Substandard—Substandard assets are inadequately protected by the current sound worth and paying capacity of the obligor, or of the collateral pledged, if any. Substandard assets have well-defined weaknesses that jeopardize the liquidation of the debt and present the distinct possibility that the institution will sustain some loss if deficiencies are not corrected. -6- PART I: SNC Credit Quality Overall SNC Portfolio The 2014 SNC portfolio totaled $3.39 trillion, with 9,778 credit facilities to 6,166 borrowers (see Figure 1). The commitment amount rose by $378 billion, or 12.6 percent, from 2013, while the outstanding dollar volume of the portfolio increased by $206 billion, or 15.2 percent (see appendix A), and the number of credits increased by 502, or 5.4 percent. Appendix B contains a breakout of SNC results by major industry group.3 Figure 1: Overall Credit Facilities and Commitment Trends $4,000 12,000 $3,500 10,000 8,000 $2,500 Facilities Billions $3,000 $2,000 6,000 $1,500 4,000 $1,000 2,000 $500 $0 Utilized Exposure Unfunded Exposure 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 0 Number of Credits Overall SNC Credit Quality and Trends The percentages of criticized and classified assets remained elevated at 10.1 percent and 5.6 percent compared with 10.0 percent and 6.2 percent in 2013, respectively.4 Asset quality improvement observed during the past three SNC cycles stalled in 2014. This is particularly troubling given the current economic environment and low interest rates. The criticized asset ratio remained double that of the pre-crisis period. Criticized assets increased by $38 billion to $341 billion (see Figure 2), a 12.8 percent increase from last year. Credits rated special mention increased by $34 billion to $149 billion, a 29.7 percent increase. Special mention credits represented 4.4 percent of the portfolio, compared with 3.8 percent in 2013. Credit quality in several industry groups improved over the past year, particularly in the commercial real estate segment. Classified credits increased by $4 billion to $191 billion, a 2.1 percent increase. The volume of nonaccrual loans net of loss dispositions declined from $61 billion to $43 billion, a 27.8 percent decrease, and represented 1.3 percent of the portfolio, down from 2.0 percent in 2013. 3 The agencies introduced industry data in 2008 that presented industries vertically along product origination and distribution lines. The review places credits in seven primary sectors, largely following the outline of the 2007 U.S. Census Bureau North American Industry Classification System codes (see appendix B). The seven primary sectors are further dissected into 24 industry groups constructed from 93 subgroups. The analysis in this report uses the 24 industry groups. 4 The criticized credits and related ratios do not include the effects of hedging or other techniques that organizations may use to mitigate risk. -7- Figure 2: Overall Criticized Volume and Percentage Trends $700 25% $600 20% Billions $500 $400 15% $300 10% $200 5% $100 Special Mention $ Classified $ 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 0% 1993 $0 Criticized % PART 2: SNC Loan Distribution Loan Distribution by Volume Table 1 lists the dollar volume and percentage of the SNC portfolio by lender type. The percentage of SNC commitments owned by U.S. banking organizations decreased slightly from 44.4 percent to 43.4 percent. The percentage of SNC commitments owned by FBOs declined slightly from 35.8 percent to 34.5 percent and commitments for nonbanks remained increased from 19.7 percent to 22.1 percent of the portfolio. Nonbanks included securitization pools, hedge funds, insurance companies, and pension funds. FDICinsured institutions’ share of the SNC portfolio decreased slightly from 47.1 percent to 46.7 percent (see appendix C). Table 1: Distribution of SNC Commitments by Lender Type 2013 Total 2014 Total Lender 2013% Total Commitments Commitments Type Commitments ($ Trillion) ($ Trillion) U.S. Banks FBOs Nonbanks Total $1.34 $1.08 $0.59 $3.01 $1.49 $1.14 $0.76 $3.39 44.4% 35.8% 19.7% 100.0% 2014% Total Commitments 43.4% 34.5% 22.1% 100.0% Loan Distribution by Credit Quality While nonbank entities owned the smallest share of SNC commitments (22.1 percent), they owned 73.5 percent of classified assets (see appendix C). U.S. banks owned 13.4 percent of classified assets, and FBOs owned 13.2 percent. In addition, 18.5 percent of nonbank assets were classified, compared with 1.7 percent of the U.S. bank portfolio and 2.2 percent of the FBO portfolio. FDIC-insured institutions owned $19.2 billion of classified assets, or 10.0 percent down from 12.2 percent in 2013. Of nonaccrual loans, nonbank institutions owned 76.3 percent, or $39.2 billion; FDIC-insured institutions owned only $3.4 billion, or 6.7 percent. Classified credits declined for U.S. banks and FBOs, but increased for nonbanks over the past year. Classified credits held by nonbanks increased by $15 billion, or 12.1 percent, to $140.6 billion; U.S. -8- bank classified credits decreased by $3.6 billion, or 12.3 percent, to $25.6 billion; and FBO classified credits decreased by $7 billion, or 22.5 percent, to $25.1 billion (see appendix C). PART 3: Syndicated Loan Underwriting Trends This is the eighth consecutive SNC Review in which examiners conducted an analysis of syndicated loan underwriting standards. The 2014 review included an evaluation of underwriting standards on 918 SNCs originated in 2013 compared with 691 in 2012 and 714 in 2013. Underwriting assessments covered 26.5 percent of the number of loans underwritten in 2013 and 28.8 percent of the dollar volume. The review evaluated structure, repayment terms, pricing, collateral, and loan agreements. Of the 9,778 SNC reported facilities, 33 percent were originated in 2013. The SNC examination noted weak underwriting standards in 31 percent of the loan transactions sampled. This percentage compared unfavorably to 2012, 2011, 2010 and 2009 percentages of 24 percent, 19 percent, 16 percent and 13 percent, respectively. Leveraged lending transactions were the primary driver of this deterioration. The most frequently cited underwriting deficiencies identified during the 2014 SNC Review were minimal or no loan covenants, liberal repayment terms, repayment dependent on refinancing, and inadequate collateral valuations. The weak underwriting structures were in part attributable to aggressive competition and market liquidity. PART 4: SNC Portfolio – Maturity Profile Refinancing risk increased moderately in the SNC portfolio as 25.0 percent of SNC commitments will mature in 2015 and 2016, compared with 15 percent for the same period in the 2013 SNC Review. During 2013 and into 2014, syndicators continued to refinance and modify loan agreements to extend maturities. These transactions had the effect of relieving near-term refinancing risk, but may not improve borrowers’ ability to repay their debts in the longer term. Bank management should ensure such loan modification strategies are not substituted for realistic debt repayment, or to avoid recognizing problem loans. Figure 3: SNC Portfolio—Maturity Schedule $1,200 $800 $600 $400 $200 Pass $ Special Mention $ -9- Classified $ 2020 2019 2018 2017 2016 2015 2014 $0 2013 Billions $1,000 Appendix A: Committed and Outstanding Balances (In Billions of Dollars) Committed and Outstanding Balances (Dollars in Billions) Year Special Mention SubStandard Doubtful Loss Total Classified Total Criticized Total Committed Total Outstanding 1989 24.0 18.5 3.5 0.9 22.9 46.9 692 245 1990 43.1 50.8 5.8 1.8 58.4 101.5 769 321 1991 49.2 65.5 10.8 3.5 79.8 129.0 806 361 1992 50.4 56.4 12.8 3.3 72.5 122.9 798 357 1993 31.7 50.4 6.7 3.5 60.6 92.3 806 332 1994 31.4 31.1 2.7 2.3 36.1 67.5 893 298 1995 18.8 25.0 1.7 1.5 28.2 47.0 1,063 343 1996 16.8 23.1 2.6 1.4 27.1 43.9 1,200 372 1997 19.6 19.4 1.9 0.9 22.2 41.8 1,435 423 1998 22.7 17.6 3.5 0.9 22.0 44.7 1,759 562 1999 30.8 31.0 4.9 1.5 37.4 68.2 1,829 628 2000 36.0 47.9 10.7 4.7 63.3 99.3 1,951 705 2001 75.4 87.0 22.5 8.0 117.5 192.8 2,049 769 2002 79.0 112.0 26.1 19.1 157.1 236.1 1,871 692 2003 55.2 112.1 29.3 10.7 152.2 207.4 1,644 600 2004 32.8 55.1 12.5 6.4 74.0 106.8 1,545 500 2005 25.9 44.2 5.6 2.7 52.5 78.3 1,627 522 2006 33.4 58.1 2.5 1.2 61.8 95.2 1,874 626 2007 42.5 69.6 1.2 0.8 71.6 114.1 2,275 835 2008 210.4 154.9 5.5 2.6 163.1 373.4 2,789 1,208 2009 195.3 337.1 56.4 53.3 446.8 642.1 2,881 1,563 2010 142.7 256.4 32.6 15.4 304.5 447.2 2,519 1,210 2011 106.4 190.7 14.0 9.9 214.6 321.0 2,524 1,118 2012 99.3 161.7 29.5 4.6 195.8 295.1 2,792 1,243 2013 115.0 164.5 14.5 8.0 187.0 302.0 3,011 1,362 2014 149.2 171.0 11.8 7.8 191.3 340.6 3,389 1,568 Note: Figures may not add to totals due to rounding -10- Appendix B: SNC Industry Trends by Sector (In Billions of Dollars) Indus tiy 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Services Commitment 377.1 401.6 464.0 589.3 779.0 820.1 735.4 701.3 784.9 821.2 927.3 Classified 21.6 24.0 20.1 18.1 45.0 156.5 120.1 92.3 92.8 86.2 85.5 Special Mention 12.7 5.7 13.3 14.3 106.6 81.5 73.1 57.3 43.2 47.3 65.2 % Classified 5.7% 6.0% 4.3% 3.1% 5.8% 19.1% 16.3% 13.2% 11.8% 10.5% 9.2% % Special Mention 3.4% 1.4% 2.9% 2.4% 13.7% 9.9% 9.9% 8.2% 5.5% 5.8% 7.0% 788.6 Commodities Commitment 312.0 325.6 364.1 439.6 578.1 658.8 592.3 593.0 665.0 709.5 Classified 32.7 18.0 18.3 10.7 12.7 77.8 57.7 42.5 34.8 39.4 43.5 Special Mention 15.2 8.9 7.6 7.0 53.6 34.9 20.4 14.0 22.4 27.7 30.0 10.5% 5.5% 5.0% 2.4% 2.2% 11.8% 9.7% 7.2% 5.2% 5.6% 5.6% 4.9% 2.7% 2.1% 1.6% 9.3% 5.3% 3.4% 2.4% 3.4% 3.9% 3.9% % Classified % Special Mention Financial Commitment 372.7 363.2 431.1 506.3 541.0 470.9 391.3 435.4 462.6 521.9 598.3 Classified 4.2 0.9 2.1 19.2 32.5 60.4 32.6 27.6 24.7 25.3 26.7 Special Mention 0.6 0.5 2.9 3.3 13.7 28.0 17.7 9.6 9.6 12.1 19.6 % Classified 1.1% 0.3% 0.5% 3.8% 6.0% 12.8% 8.3% 6.3% 5.3% 4.8% 4.5% % Special Mention 0.2% 0.1% 0.7% 0.7% 2.5% 5.9% 4.5% 2.2% 2.1% 2.3% 3.3% 261.7 271.9 289.4 339.4 405.0 436.6 368.4 385.2 431.4 480.1 531.8 11.6 7.3 18.8 18.8 39.8 78.4 27.2 17.0 16.6 15.7 16.5 2.6 9.6 8.1 10.8 13.2 16.3 7.6 4.3 7.7 13.0 16.4 % Classified 4.4% 2.7% 6.5% 5.5% 9.8% 18.0% 7.4% 4.4% 3.9% 3.3% 3.1% % Special Mention 1.0% 3.5% 2.8% 3.2% 3.3% 3.7% 2.1% 1.1% 1.8% 2.7% 3.1% Manufacturers Commitment Classified Special Mention Real Estate 99.5 122.9 159.2 203.6 241.6 244.4 198.2 164.8 164.8 171.9 222.1 Classified Commitment 1.6 0.6 0.6 2.9 25.3 49.2 45.9 23.7 14.4 5.1 3.9 Special Mention 0.9 0.2 0.5 2.2 9.2 22.3 15.3 11.4 6.9 2.1 2.0 % Classified 1.6% 0.5% 0.4% 1.4% 10.5% 20.1% 23.1% 14.4% 8.8% 3.0% 3.0% % Special Mention 0.9% 0.1% 0.3% 1.1% 3.8% 9.1% 7.7% 6.9% 4.2% 1.2% 1.2% 306.5 Distribution 108.7 122.3 146.1 175.7 216.0 220.5 199.0 225.9 268.7 291.3 Classified Commitment 2.2 1.7 1.5 1.9 7.7 23.2 19.6 10.0 10.7 11.8 11.0 Special Mention 0.9 1.0 0.9 4.7 13.9 12.1 8.4 9.8 8.9 12.4 15.9 % Classified 2.0% 1.4% 1.0% 1.1% 3.6% 10.5% 9.9% 4.4% 4.0% 4.1% 4.1% % Special Mention 0.8% 0.8% 0.6% 2.7% 6.4% 5.5% 4.2% 4.4% 3.3% 4.3% 4.3% Government Commitment 14.3 19.1 20.1 21.6 28.6 29.9 34.0 18.5 14.6 15.3 15.8 Classified 0.0 0.0 0.4 0.1 0.0 1.2 1.5 1.5 1.6 3.4 4.2 Special Mention 0.1 0.0 0.1 0.1 0.1 0.2 0.1 0.0 0.5 0.3 0.2 % Classified 0.3% 0.1% 1.8% 0.5% 0.0% 4.0% 4.3% 8.4% 11.0% 22.4% 22.4% % Special Mention 0.6% 0.0% 0.4% 0.2% 0.4% 0.7% 0.4% 0.0% 3.4% 2.1% 2.1% All Industries (Total) Commitment 1,546.1 1,626.6 1,873.9 2,275.4 2,789.2 2,881.2 2,518.5 2,524.2 2,792.0 3,011.1 3,390.5 Classified 74.0 52.5 61.8 71.7 163.1 446.8 304.5 214.6 195.8 187.0 191.3 Special Mention 32.8 25.9 33.4 42.4 210.4 195.3 142.7 106.4 99.3 115.0 149.4 % Classified 4.8% 3.2% 3.3% 3.2% 5.8% 15.5% 12.1% 8.5% 7.0% 6.2% 5.6% % Special Mention 2.1% 1.6% 1.8% 1.9% 7.5% 6.8% 5.7% 4.2% 3.6% 3.8% 4.4% Note: Figures may not add to totals due to rounding Appendix C: Exposure by Entity Type Share of Total Commitments (%) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 US Banking Institutions 46.5 46.5 44.3 42.7 41.1 40.8 40.8 41.5 43.2 44.4 43.4 Insured 43.4 43.4 40.8 38.9 37.4 35.0 36.4 36.3 38.6 40.3 39.6 Uninsured(*) 3.1 3.1 3.5 3.8 3.7 5.8 4.4 5.3 4.7 4.1 3.8 41.6 41.6 41.5 41.4 39.0 38.0 37.9 38.3 36.9 35.8 34.5 FBOs Insured 5.5 5.5 6.2 6.4 5.1 5.8 5.8 5.7 6.3 6.8 7.1 Uninsured 36.1 36.1 35.3 35.0 33.9 32.2 32.1 32.6 30.6 29.0 27.4 12.0 12.0 14.3 15.9 19.9 21.2 21.3 20.2 19.8 19.7 22.1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 US Banking Institutions 18.8 11.9 13.1 19.2 47.2 134.8 81.6 49.4 35.8 29.2 25.6 Insured 16.0 8.6 9.0 13.2 38.3 96.3 57.9 31.2 22.3 19.1 16.3 Uninsured(*) 2.8 3.2 4.1 6.0 9.0 38.6 23.8 18.2 13.5 10.1 9.3 31.3 15.5 17.3 17.6 45.9 101.8 62.0 41.7 37.8 32.4 25.1 Nonbanks Total Classifications ($ billion) FBOs Insured 2.8 1.5 1.6 2.3 5.1 11.7 11.2 5.2 4.0 3.4 2.9 Uninsured 28.5 14.0 15.7 15.4 40.8 90.1 50.8 36.5 33.8 29.0 22.1 Nonbanks 24.0 25.0 31.5 34.8 70.0 210.2 160.9 123.5 122.2 125.4 140.6 Totals 74.2 52.5 61.8 71.6 163.1 446.8 304.5 214.6 195.8 187.0 191.3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 US Banking Institutions 2.6 1.6 1.6 2.0 4.1 11.5 7.9 4.7 3.0 2.2 1.7 Insured 2.2 1.2 1.1 1.4 3.3 8.2 5.6 3.0 1.8 1.4 1.1 Uninsured(*) 0.4 0.4 0.5 0.6 0.8 3.3 2.3 1.7 1.1 0.8 0.6 Classifieds as % of Commitments FBOs 4.9 2.3 2.2 1.9 4.2 9.3 6.0 4.3 3.7 3.0 2.1 Insured 0.4 0.2 0.2 0.2 0.5 1.1 1.1 0.5 0.4 0.3 0.3 Uninsured 4.4 2.0 2.0 1.6 3.7 8.2 4.9 3.8 3.3 2.7 1.9 13.0 11.7 11.8 9.6 12.6 34.4 30.0 24.3 22.1 21.1 18.8 4.8 3.2 3.3 3.1 5.8 15.5 12.1 8.5 7.0 6.2 5.6 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 US Banking Institutions 7.7 3.9 2.8 0.8 7.4 46.8 35.6 22.0 12.9 7.9 5.4 Insured 0.1 3.1 1.8 0.5 6.3 35.5 24.2 12.8 7.1 4.2 3.0 Uninsured(*) 7.6 0.8 1.0 0.3 1.1 11.3 11.4 9.2 5.8 3.7 2.4 17.6 9.0 4.7 0.9 5.6 35.5 28.6 18.1 15.9 11.2 6.5 - 0.4 Nonbanks Totals Total Nonaccrual Commitments ($ billion) FBOs Insured 0.4 0.4 0.2 1.0 3.6 3.1 2.0 1.1 0.7 17.6 8.6 4.3 0.7 4.6 31.9 25.5 16.1 14.8 10.5 6.1 Nonbanks 12.3 11.9 10.2 2.2 9.3 89.8 87.0 61.0 56.9 49.7 39.2 Totals 37.6 24.8 17.7 3.9 22.3 172.1 151.2 101.1 85.6 68.8 51.1 Uninsured (*)Uninsured refers to organizations that do not take consumer deposits such as holding companies, brokerage firms, finance companies, etc. Note: Figures may not add to totals due to rounding