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Quarterly Banking Profile First Quarter 2010 INSURED INSTITUTION PERFORMANCE ■ ■ ■ ■ ■ Industry Net Income Improves to a Two-Year High of $18 Billion Loss Provisions Decline but Remain above $50 Billion Asset Quality Deterioration Continues to Moderate New Accounting Rules Cause Sharp Increase in Reported Loan Balances Number of Insured Institutions Falls below 8,000 Earnings Post Significant Increase New Accounting Rules Affect Reported Cash Flows First quarter results for insured commercial banks and savings institutions contained positive signs of recovery for the industry. While new accounting rules had a major effect on several components of the industry’s balance sheet and income statement, there was clear improvement in certain performance indicators.1 Lower provisions for loan losses and reduced expenses for goodwill impairment lifted the earnings of FDIC-insured commercial banks and savings institutions to $18.0 billion. While still low by historical standards, first quarter earnings represented a significant improvement from the $5.6 billion the industry earned in first quarter 2009 and are the highest quarterly total since first quarter 2008. The largest year-over-year increases occurred at the biggest banks, but a majority of institutions (52.2 percent) reported net income growth. This is the highest percentage of institutions reporting increased quarterly earnings in more than three years (since third quarter 2006). Implementation of FAS 166 and 167 caused a large amount of loans in securitized loan pools to be consolidated into the reported loan balances of a relatively small number of large insured institutions in the first quarter. As a result, the interest income, interest expense, and charge-offs associated with these balances also were included in first quarter financial reports, and the inclusion of the loan balances triggered changes to capital and reserves, as well. Net interest income totaled $109.1 billion in the first quarter, a $9.7 billion (9.7 percent) increase from first quarter 2009. Most of this increase reflected the application of the new accounting rules. It was somewhat offset by a $2.1 billion (99.4 percent) year-over-year decline in income from securitization activities and a $1.1 billion (18.5 percent) drop in servicing income that were also largely a result of the new rules. Application of the accounting changes had no significant effect on the year-over-year increase in the industry’s reported net income; lower provisions for loan losses and reduced expenses for 1 FASB Statements 166 and 167. See Notes to Users. Chart 1 Chart 2 Quarterly Net Income Billions of Dollars 60 Percentage of Insured Institutions with Earnings Gains Percent of Institutions with Year-over-Year Increases in Quarterly Net Income 70 50 40 36.9 38.0 38.0 35.3 35.6 36.8 30 60 28.7 50 19.3 20 10 4.7 0.9 0.5 0 18.0 5.6 -4.4 -10 -20 40 2.0 30 -1.3 20 Securities and Other Gains/Losses, Net Net Operating Income -30 -40 10 0 -37.8 1 2 3 2006 FDIC Quarterly 4 1 2 3 2007 4 1 2 3 2008 4 1 2 3 2009 4 1 2010 1 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2009 2010 2008 2005 2006 2007 2010, Volume 4, No. 2 average margin increased to a seven-year high of 3.83 percent, from 3.53 percent in fourth quarter 2009 and 3.41 percent in first quarter 2009. Most of the improvement occurred at a few large credit card lenders; only 40.7 percent of institutions reported higher NIMs compared to the fourth quarter, although 57.8 percent reported year-over-year improvement. goodwill impairment were the main sources of the improvement in industry earnings. Reduced Loan-Loss Provisions Help Drive Earnings Improvement Insured institutions set aside $51.3 billion in provisions for loan and lease losses in the first quarter, a $10.2 billion (16.6 percent) decline from a year earlier. However, only about one-third of insured institutions reported year-over-year declines in loss provisions, with much of the overall reduction concentrated among a few of the largest banks. Another positive factor in the earnings improvement at larger institutions was a $2.2 billion (2.3 percent) decline in noninterest expenses that was caused by lower goodwill impairment losses. Total noninterest income was $6.6 billion (9.7 percent) lower than a year earlier because of the declines in securitization and servicing income and a $1.5 billion (15.1 percent) reduction in trading revenue. The average return on assets (ROA) rose to 0.54 percent, compared to 0.16 percent in first quarter 2009. This is the highest quarterly ROA for the industry since first quarter 2008. Almost half of all institutions—48.1 percent—reported improved ROAs. C&I Charge-Offs Decline for First Time in Four Years Loan losses posted a year-over-year increase for a 13th consecutive quarter. Net charge-offs totaled $52.4 billion, an increase of $14.5 billion (38.4 percent) from a year earlier. Credit cards accounted for almost threequarters ($10.4 billion) of the growth in charge-offs, reflecting the securitized receivables brought back onto balance sheets by the new accounting rules. Charge-offs were up from a year ago in most major loan categories, although the increases were smaller than in recent quarters. Most non-consumer loan categories were not affected by the new accounting rules. A notable exception to the rising trend was loans to commercial and industrial (C&I) borrowers, where charge-offs fell for the first time since first quarter 2006, declining by $675 million (10.2 percent). Net charge-offs of real estate loans secured by nonfarm nonresidential real estate properties increased by $1.6 billion (155.5 percent). Chargeoffs of residential mortgage loans were $1.6 billion (22.9 percent) higher than a year earlier, while charged-off home equity loans rose by $1.2 billion (29.9 percent). Rise in Average Margin Reflects Impact of New Rules The sharp increase in net interest income caused by adoption of the new accounting rules significantly boosted the industry’s net interest margin (NIM). The Chart 4 Chart 3 Major Factors Contributing to the Year-over-Year Change in Quarterly Earnings Percent 4.5 Billions of Dollars 25 Quarterly Net Interest Margins Assets < $1 Billion Positive Factors 20 15 $2.2 Decrease in Noninterest Expense 4.0 $9.7 Increase in Net Interest Income 3.5 3.84 3.73 Negative Factors 10 5 0 FDIC Quarterly $10.2 Decrease in Loan Loss Provisions $3.1 Increase in Income Taxes $6.6 Decrease in Noninterest Income 3.0 2.5 2 Assets > $1 Billion 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2005 2007 2008 2009 2010 2006 2010, Volume 4, No. 2 Quarterly Banking Profile caused the industry’s “coverage ratio” of reserves to noncurrent loans and leases to increase for the first time in 16 quarters, from 58.3 percent to 64.2 percent, even though slightly fewer than half of all insured institutions (49.2 percent) improved their coverage ratios during the quarter. Increase in Noncurrent Loans Is Smallest in Three Years The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) increased for a 16th consecutive quarter, rising by $17.4 billion (4.4 percent) from the level at the end of 2009. This is the smallest quarterly increase in noncurrent loans since third quarter 2007, and all of the increase consisted of loans and leases 90 days or more past due. Loans and leases in nonaccrual status fell for the first time in four years, declining by $65 million. Noncurrent credit card loans increased during the quarter by $7.6 billion (51.9 percent), reflecting the inclusion of securitized credit card receivables. Noncurrent residential mortgage loans rose by $12.9 billion (7.2 percent), and noncurrent nonfarm nonresidential real estate loans increased by $3.7 billion (8.8 percent). In contrast, noncurrent C&I loans declined by $5.1 billion (12.2 percent), and noncurrent real estate construction and development loans fell by $1.8 billion (2.5 percent). It was the second consecutive quarterly decline in noncurrent levels for both loan categories. Internal Capital Generation Turns Positive for First Time in Two Years Total equity capital increased by $15.1 billion (1.0 percent) in the first quarter. The increase would have been larger, but institutions reported almost $22 billion in reductions in equity capital stemming from the application of FAS 167. More than three-quarters of all institutions (76.6 percent) increased their equity capital by a combined total of $30 billion during the quarter, but these increases were partially offset by the accounting-related equity declines noted above. Retained earnings were positive for the first time since first quarter 2008, as net income exceeded dividends by $13.6 billion. Insured institutions paid $4.4 billion in dividends in the first quarter, down $2.9 billion (39.4 percent) from a year earlier. New Accounting Rules Require Higher Reserves at Some Institutions Accounting Change Lifts Reported Total Assets Total reserves for loan losses of insured institutions increased by $34.5 billion (15.1 percent) during the first quarter, even though net charge-offs exceeded loss provisions by $1.2 billion. The large jump in reported reserves was associated with the requirements of FASB 166 and 167, as affected institutions converted equity capital directly into reserves. The increased reserves Industry assets increased for the first time since fourth quarter 2008, and total loan and lease balances rose for the first time since second quarter 2008, but only because of the new accounting rules. Total assets reported by insured institutions were $248.6 billion (1.9 percent) higher than at the end of 2009, but this was entirely due to a $294.9 billion (69.9 percent) increase Chart 6 Chart 5 Quarterly Net Charge-offs and Change in Noncurrent Loans, 2007–2010 Quarterly Change in Loan Balances, First Quarter 2010 Billions of Dollars 110 Billions of Dollars 350 $295 300 Quarterly Change in Noncurrent Loans Quarterly Net Charge-offs 90 250 200 70 150 100 50 50 30 -$29 -50 10 -10 $28 0 -100 1 FDIC Quarterly 2 3 2007 4 1 2 3 2008 4 1 2 3 2009 4 1 2010 3 Credit Cards Other Consumer Loans Residential Mortgage Loans -$2 Home Equity Lines of Credit -$33 -$40 C&I Loans Other Loans & Leases 2010, Volume 4, No. 2 in credit card loans caused by the consolidation of more than $300 billion in securitized credit card receivables into reported loan balances at the end of the first quarter. Other consumer loan balances increased by $28.0 billion, also reflecting similar consolidations of securitized loan pools into reported loan balances, but all other major loan categories registered net declines during the quarter. C&I loan balances fell by $33.1 billion (2.7 percent), real estate construction and development loans declined by $33.1 billion (7.3 percent), and residential mortgage loans declined by $28.9 billion (1.5 percent). Real estate loans secured by nonfarm nonresidential real estate properties declined for the first time since third quarter 1992, falling by $891 million (0.1 percent). In addition to the declines in most major loan categories, banks reduced their holdings of mortgage-backed securities by $8.9 billion (0.6 percent). Institutions increased their portfolios of U.S. Treasury securities by $54.4 billion (53.0 percent) and their balances with Federal Reserve banks by $23.6 billion (4.1 percent). Secured Borrowings Register Sharp Increase A substantial amount of short-term secured borrowings accompanied securitized loans onto bank balance sheets in the first quarter. Total deposits fell for the first time in a year, declining by $28.6 billion (0.3 percent). Nondeposit liabilities increased by $262.9 billion (10.9 percent). Federal Home Loan Bank advances fell for a sixth consecutive quarter, declining by $52.9 billion (9.9 percent), while other nondeposit borrowings increased by $294.3 billion (52.8 percent). “Problem List” Continues to Grow The number of institutions reporting quarterly financial results declined by 80 in the first quarter, from 8,012 to 7,932. Forty-one FDIC-insured institutions failed during the quarter, while 37 institutions were merged into other charters. Only three new charters were added during the quarter, and all three were charters formed to acquire failed banks. The number of insured commercial banks and savings institutions on the FDIC’s “Problem List” increased from 702 to 775 during the quarter, and total assets of “problem” institutions increased from $403 billion to $431 billion. Securitized Consumer Loans Return to Balance Sheets The increase in loan balances was mirrored by declines in loans securitized and sold. Securitized credit card receivables declined by $347.4 billion (95.6 percent) during the quarter, while securitized other consumer loans fell by $25.7 billion (80.5 percent), and securitized home equity lines of credit dropped by $5.8 billion (97.2 percent). In all, securitized assets posted a $403.1 billion (22.2 percent) decline in the first quarter. Author: Chart 8 Chart 7 Number of FDIC-Insured “Problem” Institutions, 2006–2010 Quarterly Change in Loan Balances Securitized and Sold, First Quarter 2010 Billions of Dollars 0 -$19 -50 -$15 -$6 -$4 Number of Institutions 900 -$6 775 800 -100 700 -150 600 -200 500 702 552 416 400 -250 300 -300 -350 Ross Waldrop, Sr. Banking Analyst Division of Insurance and Research (202) 898-3951 252 200 -$347 -400 FDIC Quarterly Credit Cards Other Consumer Loans Residential Mortgage Loans Home Equity Lines of Credit C&I Loans 100 Other Loans & Leases 0 4 76 90 48 50 47 50 53 61 65 1 2 3 2006 4 1 2 3 2007 4 1 117 305 171 2 3 2008 4 1 2 3 2009 4 1 2010 2010, Volume 4, No. 2 Quarterly Banking Profile TABLE I-A. Selected Indicators, All FDIC-Insured Institutions* Return on assets (%)������������������������������������������������������������������������������������������������������ Return on equity (%)������������������������������������������������������������������������������������������������������� Core capital (leverage) ratio (%)������������������������������������������������������������������������������������ Noncurrent assets plus other real estate owned to assets (%)������������������������������������ Net charge-offs to loans (%)������������������������������������������������������������������������������������������ Asset growth rate (%)����������������������������������������������������������������������������������������������������� Net interest margin (%)��������������������������������������������������������������������������������������������������� Net operating income growth (%)���������������������������������������������������������������������������������� Number of institutions reporting������������������������������������������������������������������������������������� Commercial banks��������������������������������������������������������������������������������������������������� Savings institutions������������������������������������������������������������������������������������������������� Percentage of unprofitable institutions (%)�������������������������������������������������������������������� Number of problem institutions�������������������������������������������������������������������������������������� Assets of problem institutions (in billions)��������������������������������������������������������������������� Number of failed institutions������������������������������������������������������������������������������������������ Number of assisted institutions�������������������������������������������������������������������������������������� 2010** 0.54 4.96 8.57 3.43 2.84 -1.34 3.83 230.35 7,932 6,772 1,160 18.67 775 $431 41 0 2009** 0.16 1.66 8.02 2.40 1.94 1.26 3.41 -72.79 8,247 7,038 1,209 22.31 305 $220 21 8 2009 0.08 0.74 8.63 3.33 2.50 -5.30 3.47 54.79 8,012 6,839 1,173 30.45 702 $403 140 8 2008 0.03 0.35 7.47 1.91 1.29 6.19 3.16 -90.68 8,305 7,086 1,219 24.86 252 $159 25 5 2007 0.81 7.75 7.97 0.95 0.59 9.88 3.29 -27.59 8,534 7,283 1,251 12.09 76 $22 3 0 2006 1.28 12.30 8.22 0.54 0.39 9.03 3.31 8.52 8,680 7,401 1,279 7.94 50 $8 0 0 2005 1.28 12.43 8.24 0.50 0.49 7.64 3.47 11.40 8,833 7,526 1,307 6.22 52 $7 0 0 * Excludes insured branches of foreign banks (IBAs) ** Through March 31, ratios annualized where appropriate. Asset growth rates are for 12 months ending March 31. TABLE II-A. Aggregate Condition and Income Data, All FDIC-Insured Institutions Number of institutions reporting������������������������������������������������������������������������������������� Total employees (full-time equivalent)��������������������������������������������������������������������������� CONDITION DATA Total assets��������������������������������������������������������������������������������������������������������������������� Loans secured by real estate���������������������������������������������������������������������������������� 1-4 family residential mortgages��������������������������������������������������������������������� Nonfarm nonresidential����������������������������������������������������������������������������������� Construction and development Home equity lines��������������������������������������������������������������������������������������������� Commercial & industrial loans�������������������������������������������������������������������������������� Loans to individuals������������������������������������������������������������������������������������������������� Credit cards������������������������������������������������������������������������������������������������������ Farm loans��������������������������������������������������������������������������������������������������������������� Other loans & leases����������������������������������������������������������������������������������������������� Less: Unearned income������������������������������������������������������������������������������������������ Total loans & leases������������������������������������������������������������������������������������������������ Less: Reserve for losses����������������������������������������������������������������������������������������� Net loans and leases����������������������������������������������������������������������������������������������� Securities����������������������������������������������������������������������������������������������������������������� Other real estate owned������������������������������������������������������������������������������������������ Goodwill and other intangibles������������������������������������������������������������������������������� All other assets�������������������������������������������������������������������������������������������������������� 1st Quarter 2010 7,932 2,027,141 4th Quarter 2009 8,012 2,063,107 1st Quarter 2009 8,247 2,114,901 %Change 09Q1-10Q1 -3.8 -4.1 $13,356,625 4,400,501 1,887,370 1,090,417 417,972 659,603 1,187,609 1,380,686 716,995 55,598 480,932 2,710 7,502,616 262,875 7,239,742 2,531,562 46,263 424,849 3,114,209 $13,107,980 4,462,931 1,916,253 1,091,308 451,080 661,429 1,220,672 1,060,226 422,092 59,581 482,524 3,765 7,282,168 228,348 7,053,820 2,500,459 41,226 428,338 3,084,137 $13,538,166 4,701,123 2,045,744 1,077,150 566,680 674,238 1,432,211 1,046,281 403,071 56,137 500,602 2,481 7,733,872 194,321 7,539,551 2,206,200 29,689 415,133 3,347,594 -1.3 -6.4 -7.7 1.2 -26.2 -2.2 -17.1 32.0 77.9 -1.0 -3.9 9.2 -3.0 35.3 -4.0 14.7 55.8 2.3 -7.0 Total liabilities and capital���������������������������������������������������������������������������������������������� Deposits������������������������������������������������������������������������������������������������������������������� Domestic office deposits��������������������������������������������������������������������������������� Foreign office deposits������������������������������������������������������������������������������������ Other borrowed funds��������������������������������������������������������������������������������������������� Subordinated debt��������������������������������������������������������������������������������������������������� All other liabilities���������������������������������������������������������������������������������������������������� Total equity capital (includes minority interests)���������������������������������������������������� Bank equity capital������������������������������������������������������������������������������������������� 13,356,625 9,198,191 7,691,747 1,506,444 2,051,797 150,540 476,073 1,480,025 1,460,356 13,107,980 9,226,795 7,696,820 1,529,974 1,782,222 156,989 476,254 1,465,719 1,445,210 13,538,166 8,953,914 7,538,993 1,414,921 2,417,120 170,929 606,739 1,389,463 1,371,742 -1.3 2.7 2.0 6.5 -15.1 -11.9 -21.5 6.5 6.5 Loans and leases 30-89 days past due������������������������������������������������������������������������� Noncurrent loans and leases����������������������������������������������������������������������������������������� Restructured loans and leases�������������������������������������������������������������������������������������� Mortgage-backed securities������������������������������������������������������������������������������������������ Earning assets���������������������������������������������������������������������������������������������������������������� FHLB Advances�������������������������������������������������������������������������������������������������������������� Unused loan commitments��������������������������������������������������������������������������������������������� Trust assets�������������������������������������������������������������������������������������������������������������������� Assets securitized and sold***��������������������������������������������������������������������������������������� Notional amount of derivatives***���������������������������������������������������������������������������������� 144,109 409,279 63,995 1,386,426 11,552,854 480,333 6,105,396 18,096,616 1,414,197 218,074,225 140,249 391,898 58,114 1,395,280 11,267,422 533,211 5,963,073 18,622,040 1,817,280 213,563,342 158,741 291,904 32,906 1,313,451 11,587,244 703,715 6,617,851 15,786,613 1,881,015 206,742,719 -9.2 40.2 94.5 5.6 -0.3 -31.7 -7.7 14.6 -24.8 5.5 (dollar figures in millions) INCOME DATA Total interest income������������������������������������������������������������������� Total interest expense����������������������������������������������������������������� Net interest income�������������������������������������������������������������� Provision for loan and lease losses�������������������������������������������� Total noninterest income������������������������������������������������������������� Total noninterest expense����������������������������������������������������������� Securities gains (losses)������������������������������������������������������������� Applicable income taxes������������������������������������������������������������� Extraordinary gains, net�������������������������������������������������������������� Total net income (includes minority interests)��������������������� Bank net income������������������������������������������������������������ Net charge-offs���������������������������������������������������������������������������� Cash dividends���������������������������������������������������������������������������� Retained earnings����������������������������������������������������������������������� Net operating income����������������������������������������������������������� Full Year 2009 $541,155 145,487 395,668 249,151 260,403 384,868 -1,607 5,619 -3,787 11,040 10,239 187,424 47,183 -36,944 14,760 Full Year 2008 $603,300 245,576 357,724 176,217 207,711 368,313 -15,440 6,294 5,360 N/A 4,532 100,365 51,089 -46,557 9,536 *** Call Report filers only. FDIC Quarterly %Change -10.3 -40.8 10.6 41.4 25.4 4.5 N/M -10.7 N/M N/A 125.9 86.7 -7.7 N/M 54.8 1st Quarter 2010 $138,407 29,280 109,128 51,264 61,591 95,288 1,603 7,624 58 18,203 18,010 52,434 4,386 13,624 16,927 1st Quarter 2009 $142,437 42,975 99,461 61,444 68,229 97,514 1,644 4,531 -31 5,813 5,550 37,896 7,242 -1,692 5,124 %Change 09Q1-10Q1 -2.8 -31.9 9.7 -16.6 -9.7 -2.3 -2.5 68.3 N/M 213.1 224.5 38.4 -39.4 N/M 230.4 N/A - Data Not Available; N/M - Not Meaningful. 5 2010, Volume 4, No. 2 TABLE III-A. First Quarter 2010, All FDIC-Insured Institutions Asset Concentration Groups* First Quarter All Insured (The way it is...) Institutions Number of institutions reporting����������������������� 7,932 Commercial banks������������������������������������� 6,772 Savings institutions����������������������������������� 1,160 Total assets (in billions)������������������������������������ $13,356.6 Commercial banks������������������������������������� 12,086.5 Savings institutions����������������������������������� 1,270.1 Total deposits (in billions)��������������������������������� 9,198.2 Commercial banks������������������������������������� 8,294.0 Savings institutions����������������������������������� 904.2 Bank net income (in millions)��������������������������� 18,010 Commercial banks������������������������������������� 15,841 Savings institutions����������������������������������� 2,169 Performance Ratios (%) Yield on earning assets������������������������������������ Cost of funding earning assets������������������������ Net interest margin������������������������������������ Noninterest income to assets��������������������������� Noninterest expense to assets������������������������� Loan and lease loss provision to assets���������� Net operating income to assets����������������������� Pretax return on assets������������������������������������ Return on assets����������������������������������������������� Return on equity����������������������������������������������� Net charge-offs to loans and leases���������������� Loan and lease loss provision to net charge-offs������������������������������������������ Efficiency ratio�������������������������������������������������� % of unprofitable institutions���������������������������� % of institutions with earnings gains���������������� Credit Card International Agricultural Commercial Banks Banks Banks Lenders 21 4 1,553 4,355 17 4 1,548 3,890 4 0 5 465 $745.3 $3,157.3 $181.1 $4,498.0 722.4 3,157.3 180.4 4,016.4 22.9 0.0 0.7 481.6 269.2 2,010.3 148.8 3,430.6 255.8 2,010.3 148.2 3,101.0 13.4 0.0 0.6 329.6 1,071 5,842 438 2,084 857 5,842 436 1,644 214 0 2 440 Mortgage Consumer Lenders Lenders 745 75 189 59 556 16 $777.2 $94.7 191.2 49.1 586.1 45.6 512.3 78.6 89.9 38.3 422.4 40.3 1,525 331 811 245 714 86 Other Specialized All Other <$1 Billion <$1 Billion 304 813 276 742 28 71 $40.6 $126.5 35.7 106.9 4.9 19.6 30.9 105.0 27.6 89.3 3.3 15.7 121 276 72 251 49 25 All Other >$1 Billion 62 47 15 $3,735.8 3,627.1 108.7 2,612.4 2,533.6 78.8 6,321 5,683 638 4.86 1.03 3.83 1.86 2.88 1.55 0.51 0.78 0.54 4.96 2.84 15.94 1.82 14.12 3.06 4.59 9.31 0.65 1.03 0.68 3.48 14.26 3.54 0.72 2.82 2.19 2.84 0.86 0.67 0.98 0.75 8.52 2.50 5.26 1.40 3.87 0.59 2.63 0.41 0.94 1.12 0.97 8.71 0.44 4.91 1.22 3.68 1.31 2.93 1.39 0.15 0.28 0.19 1.74 1.88 4.58 1.50 3.08 0.78 1.75 0.74 0.75 1.20 0.79 8.21 1.15 5.99 1.41 4.58 1.96 2.66 1.43 1.43 2.22 1.43 13.49 2.69 3.76 1.04 2.72 7.15 7.74 0.18 1.20 1.67 1.20 7.05 0.54 5.04 1.33 3.71 0.94 3.03 0.29 0.84 1.07 0.88 7.88 0.42 4.03 0.75 3.29 2.32 2.77 1.29 0.68 0.99 0.68 5.61 2.29 97.77 54.39 18.67 52.23 82.78 28.70 19.05 85.71 98.22 61.29 0.00 75.00 145.20 63.12 7.28 49.45 108.27 62.84 25.81 53.32 107.13 47.53 13.56 56.11 68.40 41.62 13.33 72.00 132.13 80.21 16.45 42.11 122.54 69.60 9.10 48.09 107.13 52.91 8.06 66.13 86.50 86.33 84.88 91.60 88.45 93.16 94.38 89.43 91.58 83.50 3.50 64.23 10.29 330.14 4.18 59.55 1.55 78.41 2.61 53.83 1.49 32.46 2.98 194.25 1.77 86.89 1.40 68.70 2.99 42.89 3.43 10.93 8.57 12.09 14.74 78.71 54.20 57.59 2.67 15.83 10.35 12.45 15.30 213.46 77.10 32.87 2.64 8.77 7.09 11.81 14.95 53.01 33.75 30.52 1.66 11.24 10.12 14.11 15.24 76.69 63.00 82.16 4.00 10.77 8.91 11.43 13.66 86.97 66.33 74.52 3.14 9.76 9.14 19.12 20.14 89.24 58.83 65.83 1.27 10.54 10.22 13.70 15.46 89.28 74.03 81.85 0.69 16.96 15.18 34.20 35.09 31.80 24.17 73.89 1.54 11.21 10.57 17.48 18.63 66.28 55.03 83.01 3.87 12.15 8.66 11.64 14.81 72.54 50.72 60.44 Structural Changes New charters��������������������������������������������� Institutions absorbed by mergers������������� Failed institutions�������������������������������������� 3 37 41 0 0 0 0 0 0 0 4 1 2 28 37 0 0 2 0 0 0 0 0 1 0 1 0 1 4 0 PRIOR FIRST QUARTERS (The way it was...) Number of institutions����������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 8,247 8,649 8,931 25 26 28 5 4 5 1,524 1,617 1,698 4,680 4,719 4,489 838 798 971 80 115 134 305 403 459 745 906 1,079 45 61 68 Total assets (in billions)��������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 $13,538.2 11,982.3 10,286.4 $476.0 407.2 363.7 $3,203.0 2,435.7 1,875.5 $165.4 149.0 135.1 $6,002.1 4,757.4 3,466.7 $1,100.9 1,507.4 1,582.0 $73.2 99.4 110.9 $36.2 45.7 54.5 $103.5 119.5 137.0 $2,377.9 2,461.0 2,561.0 Return on assets (%)������������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 0.16 1.20 1.34 -1.36 3.84 3.22 0.61 0.93 0.92 0.73 1.19 1.28 -0.18 1.14 1.32 0.54 0.91 1.20 0.08 1.77 1.52 0.30 2.03 1.52 0.92 0.99 1.17 0.48 1.25 1.48 Net charge-offs to loans & leases (%)���� 2009 ������������������������������������� 2007 ������������������������������������� 2005 1.94 0.45 0.47 8.57 3.86 4.39 2.42 0.57 0.76 0.52 0.14 0.13 1.45 0.23 0.22 1.05 0.21 0.10 2.56 1.43 1.49 0.43 0.18 0.22 0.30 0.17 0.21 1.87 0.31 0.18 Noncurrent assets plus OREO to assets (%)������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 2.40 0.57 0.50 2.56 1.32 1.26 2.00 0.41 0.54 1.48 0.78 0.71 2.82 0.62 0.49 3.04 0.67 0.41 0.99 0.55 0.52 0.62 0.18 0.30 1.11 0.59 0.56 1.71 0.45 0.42 Equity capital ratio (%)���������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 10.13 10.58 10.26 23.55 24.50 21.96 8.44 7.67 8.17 11.05 10.87 10.78 10.26 11.32 9.95 8.92 10.15 10.83 9.25 10.25 11.10 16.24 20.27 17.09 11.34 11.26 10.79 9.77 9.75 9.97 Condition Ratios (%) Earning assets to total assets�������������������������� Loss allowance to:�������������������������������������������� Loans and leases�������������������������������������� Noncurrent loans and leases�������������������� Noncurrent assets plus other real estate owned to assets������������� Equity capital ratio�������������������������������������������� Core capital (leverage) ratio����������������������������� Tier 1 risk-based capital ratio��������������������������� Total risk-based capital ratio���������������������������� Net loans and leases to deposits��������������������� Net loans to total assets����������������������������������� Domestic deposits to total assets�������������������� * See Table IV-A (page 8) for explanations. FDIC Quarterly 6 2010, Volume 4, No. 2 Quarterly Banking Profile TABLE III-A. First Quarter 2010, All FDIC-Insured Institutions Asset Size Distribution FIRST QUARTER All Insured (The way it is...) Institutions Number of institutions reporting����������������������������� 7,932 Commercial banks������������������������������������������� 6,772 Savings institutions����������������������������������������� 1,160 Total assets (in billions)������������������������������������������ $13,356.6 Commercial banks������������������������������������������� 12,086.5 Savings institutions����������������������������������������� 1,270.1 Total deposits (in billions)��������������������������������������� 9,198.2 Commercial banks������������������������������������������� 8,294.0 Savings institutions����������������������������������������� 904.2 Net income (in millions)������������������������������������������ 18,010 Commercial banks������������������������������������������� 15,841 Savings institutions����������������������������������������� 2,169 Performance Ratios (%) Yield on earning assets������������������������������������������ Cost of funding earning assets������������������������������ Net interest margin������������������������������������������ Noninterest income to assets��������������������������������� Noninterest expense to assets������������������������������� Loan and lease loss provision to assets���������������� Net operating income to assets����������������������������� Pretax return on assets������������������������������������������ Return on assets����������������������������������������������������� Return on equity����������������������������������������������������� Net charge-offs to loans and leases���������������������� Loan and lease loss provision to net charge-offs� Efficiency ratio�������������������������������������������������������� % of unprofitable institutions���������������������������������� % of institutions with earnings gains���������������������� Geographic Regions* Less than $100 $1 Billion Greater $100 Million to to than Million $1 Billion $10 Billion $10 Billion New York 2,778 4,474 575 105 976 2,469 3,780 440 83 512 309 694 135 22 464 $155.4 $1,339.6 $1,478.2 $10,383.4 $2,692.2 138.7 1,098.1 1,136.3 9,713.4 1,998.6 16.7 241.5 342.0 669.9 693.6 130.3 1,099.7 1,118.2 6,850.0 1,743.7 117.2 911.3 859.1 6,406.5 1,262.8 13.1 188.3 259.1 443.6 480.9 198 1,427 758 15,626 3,663 155 1,185 310 14,192 2,721 44 242 448 1,435 942 Atlanta 1,103 977 126 $2,989.1 2,864.8 124.4 2,112.3 2,020.5 91.8 2,373 2,278 94 Chicago 1,636 1,346 290 $2,977.9 2,848.1 129.7 2,016.0 1,919.7 96.2 3,605 3,722 -116 Kansas City 1,868 1,769 99 $1,664.4 1,612.9 51.6 1,196.7 1,157.6 39.2 2,723 2,627 96 San Dallas Francisco 1,654 695 1,535 633 119 62 $786.5 $2,246.4 695.7 2,066.4 90.8 180.0 614.3 1,515.2 540.7 1,392.7 73.6 122.5 1,498 4,149 1,287 3,206 211 942 4.86 1.03 3.83 1.86 2.88 1.55 0.51 0.78 0.54 4.96 2.84 97.77 54.39 18.67 52.23 5.28 1.41 3.87 1.27 3.72 0.46 0.47 0.66 0.51 4.28 0.61 123.16 77.43 19.76 49.32 5.22 1.50 3.72 0.89 3.10 0.69 0.38 0.56 0.43 4.27 0.86 118.78 71.94 17.30 53.20 5.02 1.38 3.63 1.23 2.82 1.33 0.15 0.44 0.21 1.90 1.75 116.18 60.54 22.96 56.87 4.77 0.90 3.87 2.09 2.85 1.71 0.58 0.85 0.61 5.48 3.40 95.12 51.52 24.76 62.86 5.66 1.25 4.41 1.72 2.80 1.90 0.54 0.85 0.56 4.31 4.09 83.83 48.82 15.37 64.86 4.55 0.98 3.57 1.81 2.73 1.64 0.31 0.46 0.32 2.83 2.73 105.03 55.79 34.90 49.14 3.93 0.86 3.07 2.02 3.03 1.13 0.41 0.63 0.49 5.69 2.35 99.29 63.69 16.26 47.25 5.97 0.93 5.04 2.34 3.41 2.29 0.66 0.97 0.66 5.70 3.27 103.30 48.61 12.85 51.71 4.95 1.08 3.87 1.40 3.18 0.82 0.70 0.96 0.76 7.35 1.21 102.55 64.52 11.91 51.27 4.68 1.10 3.58 1.71 2.49 1.29 0.72 1.09 0.74 6.60 2.34 105.69 50.50 34.96 54.82 86.50 91.10 91.47 90.49 85.22 86.76 83.89 86.71 87.23 90.07 87.57 3.50 64.23 1.64 62.01 1.81 49.56 2.33 50.77 4.01 67.50 4.09 101.26 3.33 50.96 3.38 56.40 3.75 60.66 2.11 54.18 3.52 69.45 3.43 10.93 8.57 12.09 14.74 78.71 54.20 57.59 2.31 11.99 11.54 17.57 18.67 71.87 60.24 83.81 3.37 10.07 9.53 13.52 14.74 80.09 65.74 81.98 3.69 10.87 9.47 13.52 14.92 84.00 63.54 75.17 3.42 11.04 8.26 11.62 14.66 77.75 51.29 51.55 2.44 12.59 9.39 13.36 15.72 84.15 54.50 57.60 4.16 11.29 7.93 11.03 14.21 77.48 54.76 62.71 3.22 8.56 7.09 10.50 13.82 68.50 46.37 52.46 4.79 11.52 8.96 11.03 13.60 93.88 67.50 66.78 3.19 10.42 9.36 12.98 14.71 82.19 64.19 77.60 3.02 11.37 9.80 14.77 16.52 74.34 50.14 43.74 Structural Changes New charters��������������������������������������������������� Institutions absorbed by mergers������������������� Failed institutions�������������������������������������������� 3 37 41 0 17 11 1 17 22 2 2 8 0 1 0 0 4 3 2 4 14 0 4 4 0 9 5 1 6 3 0 10 12 PRIOR FIRST QUARTERs (The way it was…) Number of institutions����������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 8,247 8,649 8,931 3,052 3,597 4,053 4,504 4,397 4,285 576 536 480 115 119 113 1,005 1,087 1,118 1,172 1,222 1,220 1,692 1,818 1,932 1,924 2,007 2,089 1,690 1,742 1,824 764 773 748 Total assets (in billions)��������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 $13,538.2 11,982.3 10,286.4 $167.2 189.6 210.1 $1,359.5 1,298.2 1,207.8 $1,512.5 1,420.9 1,324.5 $10,498.9 9,073.6 7,544.1 $2,517.7 2,204.0 2,843.6 $3,520.2 2,948.8 2,274.0 $3,176.6 2,778.8 2,423.0 $1,064.7 863.4 762.9 $909.0 662.8 618.5 $2,350.2 2,524.5 1,364.4 Return on assets (%)������������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 0.16 1.20 1.34 0.25 0.85 1.04 0.27 1.08 1.21 -0.24 1.14 1.34 0.20 1.23 1.36 0.06 1.12 1.31 0.16 1.22 1.44 0.12 1.07 1.01 0.56 1.75 1.67 -0.37 1.11 1.28 0.37 1.20 1.64 Net charge-offs to loans & leases (%)���������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 1.94 0.45 0.47 0.57 0.15 0.12 0.76 0.13 0.15 1.43 0.25 0.27 2.26 0.55 0.57 2.23 0.81 0.71 1.76 0.22 0.22 1.63 0.31 0.32 2.15 0.63 0.58 0.91 0.19 0.20 2.67 0.57 0.63 Noncurrent assets plus OREO to assets (%)������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 2.40 0.57 0.50 1.87 0.77 0.74 2.53 0.67 0.54 2.98 0.58 0.48 2.31 0.55 0.49 1.53 0.56 0.52 2.56 0.36 0.32 2.43 0.60 0.51 2.72 1.08 0.78 2.60 0.63 0.59 2.81 0.61 0.52 Equity capital ratio (%)���������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 10.13 10.58 10.26 12.66 13.24 11.85 9.96 10.50 10.08 10.56 11.24 10.74 10.05 10.43 10.16 12.13 12.72 11.29 10.19 10.04 8.49 8.37 9.13 9.24 9.90 10.57 10.55 9.87 10.60 10.80 10.49 10.92 12.48 Condition Ratios (%) Earning assets to total assets��������������������������������� Loss allowance to: Loans and leases��������������������������������������������� Noncurrent loans and leases��������������������������� Noncurrent assets plus other real estate owned to assets�������������������� Equity capital ratio��������������������������������������������������� Core capital (leverage) ratio ����������������������������������� Tier 1 risk-based capital ratio���������������������������������� Total risk-based capital ratio����������������������������������� Net loans and leases to deposits���������������������������� Net loans to total assets ����������������������������������������� Domestic deposits to total assets��������������������������� * See Table IV-A (page 9) for explanations. FDIC Quarterly 7 2010, Volume 4, No. 2 TABLE IV-A. Full Year 2009, All FDIC-Insured Institutions Asset Concentration Groups* Full Year All Insured (The way it is...) Institutions 8,012 Number of institutions reporting����������������������������������������� Commercial banks������������������������������������������������������� 6,839 Savings institutions����������������������������������������������������� 1,173 $13,108.0 Total assets (in billions)������������������������������������������������������ Commercial banks������������������������������������������������������� 11,843.8 Savings institutions����������������������������������������������������� 1,264.2 Total deposits (in billions)��������������������������������������������������� 9,226.8 Commercial banks������������������������������������������������������� 8,333.2 Savings institutions����������������������������������������������������� 893.6 Net income (in millions)������������������������������������������������������ 10,239 Commercial banks������������������������������������������������������� 8,559 Savings institutions����������������������������������������������������� 1,680 Performance Ratios (annualized, %) Yield on earning assets������������������������������������������������������ Cost of funding earning assets������������������������������������������ Net interest margin������������������������������������������������������ Noninterest income to assets��������������������������������������������� Noninterest expense to assets������������������������������������������� Loan and lease loss provision to assets���������������������������� Net operating income to assets����������������������������������������� Pretax return on assets������������������������������������������������������ Return on assets����������������������������������������������������������������� Return on equity����������������������������������������������������������������� Net charge-offs to loans and leases���������������������������������� Loan and lease loss provision to net charge-offs������������� Efficiency ratio�������������������������������������������������������������������� % of unprofitable institutions���������������������������������������������� % of institutions with earnings gains���������������������������������� Credit Other Card International Agricultural Commercial Mortgage Consumer Specialized All Other All Other Banks Banks Banks Lenders Lenders Lenders <$1 Billion <$1 Billion >$1 Billion 22 4 1,568 4,452 767 82 289 772 56 18 4 1,563 3,974 203 66 258 708 45 4 0 5 478 564 16 31 64 11 $521.9 $3,107.1 $182.0 $4,547.3 $810.5 $96.2 $38.0 $116.2 $3,688.8 498.3 3,107.1 181.3 4,059.4 203.5 50.8 32.8 99.4 3,611.2 23.6 0.0 0.7 487.9 606.9 45.4 5.2 16.8 77.6 270.0 2,024.5 148.9 3,463.4 528.3 78.4 28.4 96.5 2,588.4 256.2 2,024.5 148.3 3,129.4 99.8 38.9 25.0 83.1 2,528.0 13.8 0.0 0.6 334.1 428.5 39.5 3.4 13.4 60.4 -1,409 2,407 1,446 -18,692 5,206 304 274 906 19,797 -2,204 2,407 1,442 -17,674 3,067 186 156 862 20,317 795 0 4 -1,018 2,139 118 118 44 -520 4.75 1.28 3.47 1.96 2.89 1.87 0.11 0.12 0.08 0.74 2.50 132.93 55.57 30.45 40.44 11.42 1.36 10.06 5.41 5.75 8.38 -0.36 -0.51 -0.28 -1.20 9.77 120.45 39.41 31.82 31.82 3.86 0.94 2.92 1.91 2.59 1.48 0.27 0.02 0.08 0.92 2.97 134.78 58.88 75.00 25.00 5.65 1.72 3.92 0.64 2.75 0.58 0.79 0.94 0.82 7.39 0.65 136.01 64.04 11.54 40.18 5.07 1.57 3.50 1.48 3.15 1.92 -0.42 -0.49 -0.41 -3.99 2.01 135.64 62.71 42.72 37.38 4.89 1.84 3.05 1.14 1.85 0.98 0.69 1.06 0.65 7.38 1.21 132.68 46.16 22.56 56.98 5.82 1.70 4.12 2.31 2.93 2.67 0.34 0.59 0.34 3.23 2.74 123.95 46.79 17.07 45.12 4.03 1.20 2.83 7.49 8.65 0.22 0.70 1.13 0.72 4.10 0.78 105.35 82.92 19.03 36.68 5.41 1.64 3.78 0.89 3.01 0.40 0.79 0.96 0.80 7.14 0.54 129.28 68.73 11.92 42.36 4.12 1.00 3.12 2.31 2.63 1.60 0.47 0.71 0.51 4.70 2.19 137.71 51.68 23.21 55.36 85.96 80.29 84.68 91.04 88.43 92.38 94.74 89.16 91.43 82.69 3.14 58.27 9.33 277.71 4.34 58.58 1.50 81.70 2.53 53.87 1.43 30.96 3.01 172.33 1.59 82.91 1.33 74.94 2.89 45.21 3.33 11.03 8.63 11.66 14.31 76.45 53.81 58.72 2.31 24.56 19.60 14.24 16.50 120.53 62.36 46.24 2.75 8.75 6.98 11.28 14.35 51.23 33.38 30.96 1.56 10.96 9.95 13.54 14.66 78.08 63.86 81.80 3.87 10.49 8.70 11.00 13.22 87.91 66.95 74.26 3.17 9.48 8.92 18.57 19.55 90.65 59.09 65.11 1.44 11.16 10.46 14.13 15.91 93.32 76.04 80.38 0.69 17.72 15.62 35.79 36.63 33.33 24.90 74.24 1.34 11.27 10.65 17.44 18.58 66.95 55.57 83.00 3.55 11.95 8.22 10.77 14.13 73.57 51.62 60.68 Structural Changes New charters��������������������������������������������������������������� Institutions absorbed by mergers������������������������������� Failed institutions�������������������������������������������������������� 31 179 140 0 1 0 0 0 0 1 24 4 7 137 123 1 4 8 0 0 0 19 1 0 1 7 5 2 5 0 PRIOR Full Years (The way it was…) Number of Institutions������������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 8,305 8,680 8,976 26 26 34 5 4 5 1,559 1,634 1,731 4,753 4,713 4,423 839 817 990 91 123 132 279 411 466 709 895 1,120 44 57 75 Total assets (in billions)����������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 $13,841.2 11,861.9 10,107.4 $513.0 408.4 383.0 $3,410.1 2,337.2 1,881.3 $168.8 149.2 138.7 $5,461.2 4,905.0 3,301.4 $997.1 1,445.0 1,505.0 $122.2 109.9 104.1 $34.4 42.2 52.0 $94.8 119.6 143.3 $3,039.6 2,345.4 2,598.4 Return on assets (%)��������������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 0.03 1.28 1.28 1.70 4.19 4.03 0.25 1.01 0.76 1.00 1.23 1.22 -0.13 1.28 1.29 -0.48 0.94 1.17 -0.01 1.75 1.66 1.43 1.54 1.68 0.82 1.04 1.10 -0.09 1.26 1.32 Net charge-offs to loans & leases (%)�����������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 1.29 0.39 0.56 5.94 3.48 4.66 1.43 0.48 0.91 0.41 0.17 0.22 1.14 0.22 0.30 0.86 0.15 0.12 1.74 1.40 1.57 0.35 0.42 0.59 0.35 0.20 0.29 0.74 0.22 0.25 Noncurrent assets plus OREO to assets (%)��������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 1.91 0.54 0.53 2.08 1.37 1.50 1.59 0.40 0.57 1.17 0.67 0.68 2.34 0.56 0.51 2.55 0.56 0.43 1.31 0.85 0.53 0.35 0.20 0.31 1.05 0.56 0.59 1.35 0.46 0.45 Equity capital ratio (%)�����������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 9.33 10.52 10.28 20.47 22.88 20.54 7.01 7.75 8.05 10.99 10.73 10.78 10.04 11.16 10.10 7.45 9.91 10.53 9.85 14.16 11.36 18.63 21.12 17.47 11.28 10.97 10.79 9.11 9.78 10.23 Condition Ratios (%) Earning assets to total assets�������������������������������������������� Loss Allowance to: Loans and leases�������������������������������������������������������� Noncurrent loans and leases�������������������������������������� Noncurrent assets plus other real estate owned to assets������������������������������� Equity capital ratio�������������������������������������������������������������� Core capital (leverage) ratio����������������������������������������������� Tier 1 risk-based capital ratio��������������������������������������������� Total risk-based capital ratio���������������������������������������������� Net loans and leases to deposits��������������������������������������� Net loans to total assets����������������������������������������������������� Domestic deposits to total assets�������������������������������������� *Asset Concentration Group Definitions (Groups are hierarchical and mutually exclusive): Credit-card Lenders - Institutions whose credit-card loans plus securitized receivables exceed 50 percent of total assets plus securitized receivables. International Banks - Banks with assets greater than $10 billion and more than 25 percent of total assets in foreign offices. Agricultural Banks - Banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of the total loans and leases. Commercial Lenders - Institutions whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties exceed 25 percent of total assets. Mortgage Lenders - Institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets. Consumer Lenders - Institutions whose residential mortgage loans, plus credit-card loans, plus other loans to individuals, exceed 50 percent of total assets. Other Specialized < $1 Billion - Institutions with assets less than $1 billion, whose loans and leases are less than 40 percent of total assets. All Other < $1 billion - Institutions with assets less than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. All Other > $1 billion - Institutions with assets greater than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. FDIC Quarterly 8 2010, Volume 4, No. 2 Quarterly Banking Profile TABLE IV-A. Full Year 2009, All FDIC-Insured Institutions Asset Size Distribution Full Year All Insured Less than (The way it is...) Institutions $100 Million 8,012 2,847 Number of institutions reporting��������������������� Commercial banks����������������������������������� 6,839 2,526 Savings institutions��������������������������������� 1,173 321 $13,108.0 $158.9 Total assets (in billions)���������������������������������� Commercial banks����������������������������������� 11,843.8 141.4 Savings institutions��������������������������������� 1,264.2 17.5 Total deposits (in billions)������������������������������� 9,226.8 132.5 Commercial banks����������������������������������� 8,333.2 119.0 Savings institutions��������������������������������� 893.6 13.6 Net income (in millions)���������������������������������� 10,239 -48 Commercial banks����������������������������������� 8,559 17 Savings institutions��������������������������������� 1,680 -65 Performance Ratios (annualized, %) Yield on earning assets���������������������������������� Cost of funding earning assets���������������������� Net interest margin���������������������������������� Noninterest income to assets������������������������� Noninterest expense to assets����������������������� Loan and lease loss provision to assets�������� Net operating income to assets��������������������� Pretax return on assets���������������������������������� Return on assets��������������������������������������������� Return on equity��������������������������������������������� Net charge-offs to loans and leases�������������� Loan and lease loss provision to net charge-offs���������������������������������������������� Efficiency ratio������������������������������������������������ % of unprofitable institutions�������������������������� % of institutions with earnings gains�������������� Geographic Regions* $100 Million $1 Billion Greater to to than $1 Billion $10 Billion $10 Billion New York 4,493 565 107 986 3,799 429 85 518 694 136 22 468 $1,354.7 $1,461.8 $10,132.7 $2,587.8 1,111.7 1,119.6 9,471.1 1,894.9 243.0 342.2 661.5 692.9 1,106.4 1,107.9 6,880.0 1,749.4 918.2 850.6 6,445.4 1,272.5 188.2 257.3 434.5 476.9 -1,110 -4,989 16,386 -1,269 -1,019 -4,570 14,131 -1,915 -92 -419 2,255 646 Atlanta Chicago 1,121 1,647 992 1,355 129 292 $3,427.5 $2,934.5 3,303.2 2,803.4 124.3 131.0 2,464.5 2,020.1 2,373.1 1,922.7 91.4 97.5 -333 5,616 53 6,419 -386 -803 Kansas City 1,879 1,780 99 $1,145.7 1,094.8 50.9 867.7 829.2 38.5 8,716 8,718 -2 San Francisco Dallas 1,660 719 1,540 654 120 65 $784.9 $2,227.6 695.6 2,051.8 89.3 175.8 606.3 1,518.8 535.0 1,400.6 71.3 118.1 2,819 -5,310 2,472 -7,189 346 1,878 4.75 1.28 3.47 1.96 2.89 1.87 0.11 0.12 0.08 0.74 2.50 5.59 1.75 3.84 0.99 3.76 0.72 -0.05 0.03 -0.03 -0.25 0.88 5.54 1.90 3.64 1.02 3.29 1.14 -0.10 -0.05 -0.08 -0.83 1.23 5.18 1.75 3.43 1.39 3.09 1.69 -0.32 -0.33 -0.35 -3.23 1.90 4.56 1.11 3.45 2.17 2.80 2.01 0.20 0.20 0.16 1.52 2.84 5.17 1.46 3.71 1.93 2.84 1.92 0.24 -0.05 -0.05 -0.39 2.75 4.42 1.22 3.19 1.87 2.73 1.90 -0.08 0.00 -0.01 -0.09 2.28 4.13 1.12 3.01 2.11 2.87 1.63 0.14 0.28 0.19 2.23 2.35 5.55 1.08 4.46 3.10 3.88 1.90 0.79 1.18 0.77 7.43 2.40 5.11 1.36 3.75 1.60 3.32 1.24 0.32 0.48 0.36 3.59 1.34 5.05 1.43 3.62 1.48 2.61 2.32 -0.19 -0.38 -0.24 -2.32 3.33 132.93 55.57 30.45 40.44 130.74 82.22 28.42 39.37 133.50 73.46 30.49 41.00 132.05 63.23 38.05 42.12 133.01 52.31 42.99 36.45 129.33 52.92 27.89 55.98 141.21 55.43 55.93 29.17 137.91 57.49 26.41 39.89 117.96 54.03 20.17 40.18 139.38 63.23 19.16 43.25 127.71 54.85 56.47 32.13 85.96 90.76 91.32 90.23 84.55 85.95 83.26 86.66 86.80 90.18 87.27 3.14 58.27 1.62 63.91 1.78 50.11 2.20 49.29 3.57 60.31 3.40 84.30 2.99 48.26 3.32 56.45 2.70 46.46 2.06 55.53 3.60 66.37 3.33 11.03 8.63 11.66 14.31 76.45 53.81 58.72 2.24 11.98 11.55 17.34 18.43 73.47 61.29 83.43 3.28 9.88 9.35 13.05 14.26 81.86 66.85 81.61 3.57 10.74 9.27 12.82 14.18 84.84 64.30 75.15 3.31 11.20 8.39 11.23 14.28 74.29 50.44 52.90 2.31 13.22 10.15 13.47 15.81 77.11 52.13 59.55 4.04 11.67 7.93 10.42 13.73 79.67 57.29 64.28 3.20 8.60 7.05 10.06 13.33 68.61 47.23 53.04 4.28 10.71 9.22 10.64 12.81 84.17 63.75 70.70 3.03 10.30 9.28 12.65 14.39 84.05 64.93 76.52 3.19 11.11 9.53 13.95 15.69 73.45 50.07 44.24 Structural Changes New charters������������������������������������������ Institutions absorbed by mergers���������� Failed institutions����������������������������������� 31 179 140 25 78 25 3 81 88 1 11 22 2 9 5 3 27 6 11 25 45 7 36 30 0 48 15 6 29 9 4 14 35 PRIOR Full Years (The way it was…) Number of Institutions��������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 8,305 8,680 8,976 3,132 3,632 4,093 4,498 4,399 4,286 561 530 480 114 119 117 1,015 1,092 1,129 1,180 1,218 1,219 1,705 1,826 1,951 1,935 2,018 2,094 1,700 1,753 1,834 770 773 749 Total assets (in billions)������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 $13,841.2 11,861.9 10,107.4 $170.9 189.9 211.7 $1,354.7 1,290.0 1,199.6 $1,489.8 1,397.9 1,318.5 $10,825.8 8,984.0 7,377.6 $2,594.2 2,216.1 2,856.4 $3,745.9 2,911.4 2,177.1 $3,264.3 2,746.2 2,387.6 $1,057.2 859.8 768.2 $780.9 652.3 603.1 $2,398.7 2,476.1 1,315.1 Return on assets (%)����������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 0.03 1.28 1.28 0.25 0.92 1.00 0.24 1.16 1.19 -0.30 1.22 1.45 0.05 1.31 1.27 0.25 1.27 1.37 -0.14 1.31 1.34 0.29 1.10 0.88 0.57 1.76 1.55 0.51 1.23 1.26 -0.63 1.29 1.60 Net charge-offs to loans & leases (%)�� 2008 ����������������������������������� 2006 ����������������������������������� 2004 1.29 0.39 0.56 0.46 0.18 0.28 0.67 0.16 0.27 1.10 0.20 0.39 1.44 0.47 0.65 1.44 0.72 0.87 1.01 0.19 0.31 1.24 0.28 0.41 1.60 0.55 0.74 0.68 0.21 0.27 1.74 0.43 0.60 Noncurrent assets plus OREO to assets (%)����������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 1.91 0.54 0.53 1.66 0.73 0.74 2.16 0.59 0.56 2.46 0.52 0.51 1.80 0.53 0.53 1.20 0.52 0.58 2.02 0.33 0.35 1.93 0.57 0.55 2.28 1.05 0.81 1.80 0.62 0.61 2.33 0.56 0.51 Equity capital ratio (%)�������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 9.33 10.52 10.28 12.87 13.01 11.82 10.00 10.39 10.19 10.65 10.97 10.87 9.01 10.42 10.15 11.14 12.47 11.20 9.56 10.05 8.74 8.07 9.07 9.36 9.49 10.64 10.62 9.95 10.42 10.78 8.45 10.92 12.10 Condition Ratios (%) Earning assets to total assets����������������������� Loss Allowance to: Loans and leases����������������������������������� Noncurrent loans and leases����������������� Noncurrent assets plus other real estate owned to assets���������� Equity capital ratio����������������������������������������� Core capital (leverage) ratio�������������������������� Tier 1 risk-based capital ratio������������������������ Total risk-based capital ratio������������������������� Net loans and leases to deposits������������������ Net loans to total assets�������������������������������� Domestic deposits to total assets����������������� * Regions: New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, U.S. Virgin Islands Atlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia Chicago - Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin Kansas City - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota Dallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, Texas San Francisco - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming FDIC Quarterly 9 2010, Volume 4, No. 2 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* March 31, 2010 All Insured Institutions Credit Card Banks International Agricultural Commercial Mortgage Banks Banks Lenders Lenders Consumer Lenders All Other All Other Other <$1 >$1 Specialized <$1 Billion Billion Billion Percent of Loans 30-89 Days Past Due All loans secured by real estate��������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 2.23 2.81 1.44 1.28 1.24 3.07 0.94 2.29 2.61 1.95 0.64 1.92 3.66 0.00 0.00 0.00 1.43 4.47 4.08 2.69 2.66 3.33 0.01 2.68 2.93 3.82 0.81 0.62 1.63 4.41 0.36 2.06 2.72 1.83 0.25 1.91 1.48 1.67 1.31 0.84 0.59 2.01 1.77 1.89 1.62 1.90 1.19 1.48 1.83 2.76 1.42 1.46 0.85 2.37 1.05 1.79 2.08 1.73 0.78 1.63 1.94 4.21 1.78 1.36 1.16 1.97 1.23 1.52 2.93 1.11 0.19 1.89 1.13 1.81 2.33 5.09 0.89 1.25 1.45 1.91 1.16 2.27 0.48 1.67 1.44 1.49 0.95 1.86 0.58 1.82 1.37 1.90 2.43 1.84 1.23 1.48 1.92 2.27 1.58 1.28 0.92 2.18 1.72 1.87 1.27 1.88 0.64 1.80 2.79 2.84 1.55 1.38 1.39 3.96 0.71 2.18 2.77 2.06 0.91 2.18 Percent of Loans Noncurrent** All real estate loans���������������������������������������������������������� Construction and development.................................. Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 7.55 16.82 4.17 4.62 1.72 10.17 3.11 2.27 3.09 1.37 1.65 5.45 5.67 0.00 0.00 0.00 6.07 5.94 3.99 3.18 3.14 3.94 0.02 3.12 10.69 17.91 4.81 4.18 1.86 17.91 5.72 2.37 3.10 2.11 2.35 7.02 2.39 10.82 2.61 3.27 0.68 1.60 2.44 0.76 0.63 0.76 0.93 1.98 6.08 17.16 3.87 4.41 1.15 5.70 2.54 1.37 2.98 1.04 1.66 4.85 4.86 16.02 3.18 3.93 1.99 4.96 1.71 1.20 3.37 0.59 0.25 4.60 1.38 10.47 2.91 0.19 0.83 1.39 0.93 1.63 1.43 1.72 1.11 1.52 2.45 5.43 2.31 2.75 1.23 2.23 1.33 0.91 1.92 0.80 1.38 2.04 2.35 6.90 2.52 3.95 0.88 1.88 2.10 0.70 0.90 0.70 0.80 2.04 10.39 16.37 5.70 6.28 2.16 15.17 2.60 1.26 3.19 0.86 1.32 6.98 Percent of Loans Charged-off (net, YTD) All real estate loans���������������������������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 2.04 5.32 0.97 1.10 3.12 1.76 1.98 7.41 13.13 2.41 0.92 2.84 3.54 0.00 0.00 0.00 3.34 3.83 16.75 14.96 15.01 14.26 0.01 14.26 2.73 4.98 0.90 0.94 2.98 3.44 2.03 3.45 6.69 2.27 1.11 2.50 0.35 2.14 0.30 0.59 0.55 0.24 1.00 0.53 3.03 0.44 0.00 0.44 1.87 5.63 1.01 1.26 1.47 1.37 1.72 2.73 8.42 1.61 1.35 1.88 1.04 5.99 0.59 1.01 3.46 0.78 0.93 3.63 11.36 1.33 0.40 1.15 1.98 7.58 0.11 0.00 2.40 1.31 6.40 2.62 5.45 1.42 2.20 2.67 0.33 0.19 0.17 1.47 0.08 0.42 0.94 1.11 5.66 0.54 0.82 0.54 0.33 1.75 0.23 0.34 0.20 0.24 0.97 0.62 2.34 0.59 0.28 0.42 2.60 4.47 0.97 0.79 4.65 2.11 1.15 3.45 10.31 1.94 0.58 2.29 Loans Outstanding (in billions) All real estate loans���������������������������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases (plus unearned income)�������������� $4,400.5 418.0 1,090.4 214.9 659.6 1,887.4 1,187.6 1,380.7 717.0 663.7 536.5 7,505.3 $0.1 0.0 0.0 0.0 0.0 0.1 33.4 585.6 556.6 29.0 21.3 640.5 $543.0 9.0 31.5 41.3 134.2 277.6 196.0 208.5 53.6 154.9 165.7 1,113.2 $68.6 4.4 19.7 1.5 1.5 18.1 15.2 6.0 0.1 5.9 26.1 115.9 $2,110.6 308.9 799.9 128.7 223.4 607.1 568.3 231.3 39.3 192.0 154.2 3,064.4 $431.2 8.4 25.7 8.8 26.4 361.1 9.2 20.8 4.6 16.2 3.1 464.2 $18.4 0.5 0.7 0.1 9.6 7.4 4.0 49.8 16.2 33.5 0.7 72.9 $6.8 0.6 2.3 0.2 0.2 3.2 1.3 1.3 0.1 1.2 0.6 10.0 $51.1 3.4 12.5 1.1 2.2 28.3 7.0 7.4 0.1 7.3 5.1 70.6 $1,170.6 82.8 198.1 33.3 262.0 584.4 353.2 269.9 46.3 223.6 159.7 1,953.5 Memo: Other Real Estate Owned (in millions) All other real estate owned����������������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� 1-4 family residential������������������������������������������������� Farmland�������������������������������������������������������������������� GNMA properties������������������������������������������������������ 46,263.3 17,621.6 8,044.8 2,655.8 14,552.7 245.7 2,996.4 -28.2 0.0 0.0 0.0 0.1 0.0 0.0 3,127.0 29.0 160.0 784.0 1,219.0 0.0 750.0 699.7 242.0 206.6 33.9 163.7 52.1 1.6 30,928.4 15,492.6 6,571.7 1,204.1 6,697.4 169.4 782.8 3,005.4 410.6 168.6 29.9 2,070.8 1.6 344.6 40.0 17.5 5.4 0.3 16.7 0.1 0.0 65.0 23.1 16.5 3.3 20.1 1.9 0.0 489.1 120.8 134.4 24.0 195.9 13.6 0.4 7,937.0 1,286.0 781.5 576.4 4,169.0 7.0 1,117.0 * See Table IV-A (page 8) for explanations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 10 2010, Volume 4, No. 2 Quarterly Banking Profile TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution March 31, 2010 Geographic Regions* Less than $100 $1 Billion Greater All Insured $100 Million to to than Institutions Million $1 Billion $10 Billion $10 Billion New York Atlanta Chicago Kansas City Dallas San Francisco Percent of Loans 30-89 Days Past Due All loans secured by real estate������������������������������ Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 2.23 2.81 1.44 1.28 1.24 3.07 0.94 2.29 2.61 1.95 0.64 1.92 1.96 2.65 1.73 1.90 1.20 2.27 1.89 2.29 2.42 2.29 1.19 1.89 1.77 2.64 1.57 1.36 0.85 1.94 1.49 1.77 2.31 1.73 0.92 1.70 1.63 2.72 1.29 1.45 0.80 1.81 1.12 2.04 2.29 1.94 0.75 1.56 2.49 2.92 1.43 1.20 1.30 3.49 0.83 2.32 2.62 1.96 0.59 2.02 1.82 3.52 1.58 1.29 0.71 2.00 1.56 2.58 2.65 2.33 0.55 1.94 2.52 2.18 1.52 1.33 1.51 3.73 0.84 2.21 2.50 2.05 0.43 2.08 2.12 2.70 1.43 1.22 1.24 3.06 0.76 1.68 2.32 1.50 0.71 1.70 2.54 3.66 1.58 1.80 1.21 3.59 1.07 2.70 3.02 2.21 1.17 2.22 1.92 2.67 1.26 1.17 0.92 2.53 1.01 1.43 0.99 1.65 0.77 1.67 2.25 3.07 1.08 1.08 1.27 3.31 0.59 2.10 2.30 1.97 0.23 1.74 Percent of Loans Noncurrent** All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 7.55 16.82 4.17 4.62 1.72 10.17 3.11 2.27 3.09 1.37 1.65 5.45 3.07 10.21 3.15 2.91 1.38 2.23 2.62 1.10 1.91 1.09 0.98 2.65 4.15 13.05 3.17 3.37 1.18 2.75 2.39 0.81 1.50 0.76 1.12 3.64 5.51 16.72 3.57 4.16 1.38 4.21 2.44 1.39 2.13 1.10 1.31 4.59 8.97 18.59 5.04 5.08 1.79 12.58 3.30 2.37 3.13 1.45 1.74 5.94 5.00 18.80 3.87 3.32 0.88 4.75 3.21 3.04 3.37 1.80 1.28 4.03 9.17 16.33 4.57 7.14 2.10 12.92 2.36 1.62 2.93 0.87 0.99 6.52 8.42 17.11 4.39 4.48 1.75 13.40 2.90 1.45 3.00 1.01 2.00 5.99 9.30 16.87 4.84 5.03 2.27 14.14 2.92 2.39 3.04 1.39 1.20 6.18 4.98 10.81 2.69 3.98 1.02 5.58 1.70 0.83 1.22 0.63 1.42 3.90 6.59 23.68 4.21 4.49 0.88 7.66 5.00 2.30 2.62 2.11 2.74 5.07 Percent of Loans Charged-off (net, YTD) All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 2.04 5.32 0.97 1.10 3.12 1.76 1.98 7.41 13.13 2.41 0.92 2.84 0.51 2.29 0.44 0.59 0.48 0.32 1.09 0.70 4.88 0.64 0.00 0.61 0.79 2.61 0.47 0.58 0.66 0.56 1.17 1.48 7.80 1.04 0.46 0.86 1.72 6.08 1.01 1.25 1.07 0.88 1.49 3.10 8.94 1.14 0.53 1.75 2.46 6.16 1.22 1.19 3.48 2.14 2.17 7.98 13.30 2.66 1.00 3.40 1.10 5.41 0.90 0.81 0.83 0.69 3.14 12.28 14.71 5.31 0.60 4.09 2.75 5.24 1.07 1.05 4.73 2.27 1.53 5.28 12.65 1.90 0.37 2.73 2.25 6.42 1.12 1.20 2.22 2.30 2.26 3.00 8.53 1.45 2.28 2.35 2.14 4.23 0.67 0.88 4.06 1.98 1.78 10.28 18.39 2.16 0.71 3.27 1.21 3.23 0.56 0.81 1.64 0.87 0.99 2.03 4.58 0.93 0.64 1.21 2.17 8.00 1.34 1.69 2.69 2.02 1.83 4.03 6.58 2.47 0.47 2.34 Loans Outstanding (in billions) All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases (plus unearned income)����� $4,400.5 418.0 1,090.4 214.9 659.6 1,887.4 1,187.6 1,380.7 717.0 663.7 536.5 7,505.3 $65.9 5.6 19.8 1.9 2.2 27.8 12.5 6.7 0.1 6.6 10.1 95.2 $704.1 90.9 269.5 32.2 38.7 239.7 112.8 42.1 2.5 39.6 38.4 897.3 $711.6 100.7 278.0 41.8 50.0 228.4 141.2 76.1 21.5 54.5 33.8 962.7 $2,918.9 220.8 523.0 139.1 568.7 1,391.5 921.1 1,255.8 692.9 563.0 454.3 5,550.1 $833.7 57.7 221.9 57.4 86.0 405.2 182.1 433.2 340.9 92.4 81.2 1,530.3 $1,081.6 133.0 247.7 34.7 193.6 456.4 275.7 232.8 84.6 148.2 103.1 1,693.2 $868.4 70.3 196.0 62.3 178.1 345.3 253.4 192.9 43.0 149.8 114.6 1,429.3 $645.9 55.9 153.7 18.1 117.3 277.0 175.7 235.9 143.6 92.3 109.8 1,167.3 $359.3 59.4 125.0 9.3 24.5 129.3 90.4 44.1 14.6 29.4 22.2 516.0 $611.6 41.8 146.2 33.1 60.1 274.2 210.3 241.8 90.3 151.5 105.6 1,169.3 Memo: Other Real Estate Owned (in millions) All other real estate owned�������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� 1-4 family residential���������������������������������������� Farmland����������������������������������������������������������� GNMA properties��������������������������������������������� 46,263.3 17,621.6 8,044.8 2,655.8 14,552.7 245.7 2,996.4 1,061.4 367.6 294.4 35.3 341.5 21.1 1.7 12,295.9 6,113.7 2,823.0 429.4 2,778.3 150.2 7.8 10,232.8 5,568.0 2,065.5 402.1 1,972.9 52.9 175.3 22,673.2 5,572.3 2,862.0 1,789.1 9,460.0 21.4 2,811.5 3,693.0 1,064.1 828.5 250.5 1,357.6 15.9 167.4 13,639.5 5,840.7 1,899.7 471.7 5,186.8 35.3 220.5 9,797.5 2,684.4 1,828.0 368.7 3,454.2 31.7 1,426.6 7,560.0 2,625.3 1,302.3 494.0 1,977.6 45.8 1,117.9 4,862.8 2,418.3 1,055.7 143.4 1,137.5 90.1 17.9 6,710.5 2,988.8 1,130.5 927.6 1,439.0 26.8 46.1 * See Table IV-A (page 9) for explanations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 11 2010, Volume 4, No. 2 TABLE VI-A. Derivatives, All FDIC-Insured Commercial Banks and State-Chartered Savings Banks Asset Size Distribution % Change Less $100 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 09Q1than $100 Million to 2009 2009 2009 2009 10Q1 Million $1 Billion $1 Billion to $10 Greater than Billion $10 Billion (dollar figures in millions; 1st Quarter notional amounts unless otherwise indicated) 2010 ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives����������������� 1,146 1,130 1,175 1,214 1,170 Total assets of institutions reporting derivatives���������� $10,766,357 $10,568,276 $10,546,529 $10,593,193 $10,671,375 Total deposits of institutions reporting derivatives������� 7,281,570 7,341,195 7,183,905 7,097,228 6,983,343 Total derivatives������������������������������������������������������������� 218,074,225 213,563,342 210,008,291 208,656,901 206,742,719 -2.1 0.9 4.3 5.5 86 $6,228 5,180 223 677 $291,379 235,964 18,120 306 $897,508 682,198 98,455 77 $9,571,242 6,358,227 217,957,427 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 181,997,144 179,565,445 176,204,154 175,648,997 172,763,155 Foreign exchange*�������������������������������������������������������� 19,201,849 17,297,929 17,709,286 16,640,233 16,266,432 Equity����������������������������������������������������������������������������� 1,570,950 1,685,227 2,182,431 2,041,638 2,174,365 Commodity & other (excluding credit derivatives)�������� 939,818 978,922 926,295 909,250 938,063 Credit������������������������������������������������������������������������������ 14,364,464 14,035,819 12,986,125 13,416,784 14,600,703 Total�������������������������������������������������������������������������������� 218,074,225 213,563,342 210,008,291 208,656,901 206,742,719 5.3 18.0 -27.8 0.2 -1.6 5.5 212 1 11 0 0 223 17,697 84 161 116 62 18,120 94,572 2,678 878 134 193 98,455 181,884,663 19,199,087 1,569,900 939,568 14,364,209 217,957,427 Derivative Contracts by Transaction Type Swaps���������������������������������������������������������������������������� 136,341,268 142,022,036 139,477,065 137,993,983 135,835,552 Futures & forwards�������������������������������������������������������� 34,096,746 26,495,662 24,944,757 25,885,385 24,744,597 Purchased options��������������������������������������������������������� 15,757,712 15,151,690 15,424,802 15,020,266 15,053,701 Written options��������������������������������������������������������������� 15,908,657 15,113,322 15,063,184 14,859,851 15,106,838 Total�������������������������������������������������������������������������������� 202,104,384 198,782,710 194,909,809 193,759,485 190,740,687 0.4 37.8 4.7 5.3 6.0 30 81 10 102 223 9,792 3,552 760 3,900 18,004 79,969 7,800 3,202 7,053 98,024 136,251,478 34,085,313 15,753,740 15,897,602 201,988,133 Fair Value of Derivative Contracts Interest rate contracts��������������������������������������������������� Foreign exchange contracts������������������������������������������ Equity contracts������������������������������������������������������������� Commodity & other (excluding credit derivatives)�������� Credit derivatives as guarantor������������������������������������� Credit derivatives as beneficiary����������������������������������� 94,822 1,431 -856 976 -121,491 141,273 96,997 9,671 1,236 1,623 -160,980 188,641 122,592 -5,037 -253 3,615 -234,357 266,208 123,696 -10,568 670 1,156 -474,635 523,242 134,105 -10,459 3,103 4,158 -959,080 1,031,185 -29.3 N/M N/M -76.5 N/M -86.3 1 0 0 0 0 0 -8 0 3 8 0 0 89 -2 6 2 2 -1 94,740 1,433 -865 966 -121,493 141,275 Derivative Contracts by Maturity** Interest rate contracts����������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Foreign exchange contracts������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Equity contracts��������������������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Commodity & other contracts����������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years 84,018,163 33,334,943 24,119,801 11,091,990 2,440,019 1,328,830 320,739 220,441 83,990 287,748 177,250 31,220 80,979,650 33,638,337 26,141,316 10,416,223 2,448,723 1,343,778 312,066 227,854 81,647 261,429 223,654 34,250 78,128,617 33,977,577 26,620,986 9,674,124 2,405,751 1,325,262 358,462 301,995 82,835 237,860 233,829 43,612 74,833,456 35,928,119 28,371,872 9,490,043 2,293,453 1,193,852 343,416 291,182 75,716 252,705 211,329 45,443 70,402,282 37,299,179 30,000,656 9,234,171 2,162,670 1,056,327 348,774 286,171 82,844 279,748 206,173 41,546 19.3 -10.6 -19.6 20.1 12.8 25.8 -8.0 -23.0 1.4 2.9 -14.0 -24.9 53 13 19 0 0 0 3 1 0 0 0 0 3,410 7,280 2,444 27 2 0 29 67 0 85 17 0 18,939 27,991 38,161 1,527 61 0 130 364 1 53 41 0 83,995,761 33,299,659 24,079,177 11,090,436 2,439,956 1,328,830 320,577 220,010 83,989 287,610 177,193 31,220 57.3 83.6 66.8 80.6 86.2 89.2 0.1 0.1 0.4 0.3 1.3 0.9 46.8 101.2 Risk-Based Capital: Credit Equivalent Amount Total current exposure to tier 1 capital (%)������������������� Total potential future exposure to tier 1 capital (%)������ Total exposure (credit equivalent amount) to tier 1 capital (%)�������������������������������������������������� 41.2 88.9 45.9 83.3 130.2 129.2 140.9 147.3 175.3 0.2 0.7 2.2 148.0 Credit losses on derivatives***���������������������������������� 103.6 767.1 605.3 384.7 217.1 -52.3 0.0 3.5 0.4 99.7 HELD FOR TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 195 8,950,711 6,096,651 196 8,873,819 6,145,431 207 8,911,543 6,014,547 204 8,911,914 5,990,076 199 9,016,071 5,886,779 -2.0 -0.7 3.6 10 756 614 64 27,257 21,671 67 279,526 211,387 54 8,643,172 5,862,979 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 180,117,242 177,717,171 174,199,745 173,339,084 170,603,660 Foreign exchange���������������������������������������������������������� 17,462,255 16,437,639 15,510,657 15,051,809 14,759,077 Equity����������������������������������������������������������������������������� 1,563,707 1,677,767 2,175,796 2,034,228 2,162,149 Commodity & other�������������������������������������������������������� 932,983 974,849 924,183 906,325 935,634 Total�������������������������������������������������������������������������������� 200,076,187 196,807,425 192,810,380 191,331,447 188,460,521 5.6 18.3 -27.7 -0.3 6.2 25 0 0 0 25 884 0 1 0 885 Trading Revenues: Cash & Derivative Instruments Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other (including credit derivatives)�������� Total trading revenues��������������������������������������������������� 304 3,906 965 3,004 8,178 -1,208 2,560 144 417 1,914 5,436 -1,535 153 1,648 5,702 900 2,132 -92 2,320 5,260 9,265 2,436 854 -2,358 10,197 -96.7 60.3 13.0 N/M -19.8 0 0 0 0 0 0 0 0 0 0 17 6 1 0 24 287 3,900 964 3,004 8,154 Share of Revenue Trading revenues to gross revenues (%)���������������������� Trading revenues to net operating revenues (%)���������� 6.6 74.0 1.6 100.2 4.7 88.1 4.0 96.9 7.6 138.0 0.0 0.0 0.0 0.0 0.7 -14.2 6.7 72.9 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 1,028 10,340,778 7,031,798 1,010 10,212,224 7,098,524 1,048 10,199,835 6,955,097 1,086 10,216,757 6,847,472 1,048 10,304,121 6,730,432 -1.9 0.4 4.5 76 5,472 4,566 615 266,237 215,652 265 752,613 570,211 72 9,316,455 6,241,369 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other�������������������������������������������������������� Total notional amount���������������������������������������������������� 1,879,902 134,216 7,243 6,835 2,028,197 1,848,275 115,478 7,459 4,073 1,975,285 2,004,409 86,272 6,635 2,112 2,099,429 2,309,913 107,791 7,410 2,924 2,428,038 2,159,495 106,027 12,216 2,429 2,280,166 -12.9 26.6 -40.7 181.4 -11.1 187 1 11 0 198 16,813 29 161 116 17,120 43,886 451 644 90 45,071 1,819,016 133,735 6,428 6,629 1,965,808 50,687 180,065,647 1,989 17,460,266 234 1,563,472 44 932,940 52,953 200,022,325 All line items are reported on a quarterly basis. N/M - Not Meaningful. * Include spot foreign exchange contracts. All other references to foreign exchange contracts in which notional values or fair values are reported exclude spot foreign exchange contracts. ** Derivative contracts subject to the risk-based capital requirements for derivatives. *** The reporting of credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and to those banks filing the FFIEC 041 report form that have $300 million or more in total assets. FDIC Quarterly 12 2010, Volume 4, No. 2 Quarterly Banking Profile TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Commercial Banks and State-Chartered Savings Banks) Asset Size Distribution (dollar figures in millions) Assets Securitized and Sold with Servicing Retained or with Recourse or Other Seller-Provided Credit Enhancements 1st Quarter 2010 4th Quarter 2009 3rd Quarter 2009 2nd Quarter 2009 1st Quarter 2009 % Change Less than $100 $1 Billion Greater 09Q1$100 Million to to $10 than $10 10Q1 Million $1 Billion Billion Billion Number of institutions reporting securitization activities����������������������������������������� 132 143 143 140 132 Outstanding Principal Balance by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� $1,194,691 $1,209,474 $1,225,694 $1,222,193 $1,230,735 Home equity loans��������������������������������������������������������������������������������������������� 167 5,947 6,205 6,594 6,595 Credit card receivables������������������������������������������������������������������������������������� 16,133 363,486 391,417 397,918 399,113 Auto loans���������������������������������������������������������������������������������������������������������� 600 7,182 8,277 10,266 11,862 Other consumer loans��������������������������������������������������������������������������������������� 5,610 24,692 25,335 26,006 26,692 Commercial and industrial loans����������������������������������������������������������������������� 4,127 7,649 8,436 9,019 8,317 All other loans, leases, and other assets���������������������������������������������������������� 192,868 198,849 192,086 193,377 197,699 Total securitized and sold������������������������������������������������������������������������������������������ 1,414,197 1,817,280 1,857,449 1,865,374 1,881,015 0.0 19 61 -2.9 -97.5 -96.0 -94.9 -79.0 -50.4 -2.4 -24.8 $232 14 0 0 0 1 4 252 $931 0 861 0 0 10 41 1,843 Maximum Credit Exposure by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total credit exposure������������������������������������������������������������������������������������������������� Total unused liquidity commitments provided to institution's own securitizations��� -17.7 -98.8 -98.1 -99.3 -83.4 -74.1 -14.6 -86.9 -59.2 2 14 0 0 0 0 0 17 1 11 0 267 0 0 0 5 282 0 55 0 0 6 0 86 0 147 2 5,098 0 463 0 237 9 253 6,060 159 Securitized Loans, Leases, and Other Assets 30-89 Days Past Due (%) 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Securitized Loans, Leases, and Other Assets 90 Days or More Past Due (%) 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Securitized Loans, Leases, and Other Assets Charged-off (net, YTD, annualized, %) 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Seller's Interests in Institution's Own Securitizations - Carried as Loans Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� Seller's Interests in Institution's Own Securitizations - Carried as Securities Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� Assets Sold with Recourse and Not Securitized 23 29 $2,045 $1,191,483 0 153 0 15,272 79 521 0 5,610 594 3,522 143 192,681 2,861 1,409,242 5,166 14 730 6 237 95 257 6,506 162 5,780 1,023 134,193 637 1,410 225 287 143,555 387 6,115 1,006 136,043 745 1,434 274 333 145,950 358 6,058 1,063 129,373 722 1,399 184 299 139,100 378 6,279 1,120 39,100 912 1,429 367 301 49,509 397 3.9 0.5 1.5 1.2 3.3 0.3 2.2 3.6 4.4 1.3 2.7 2.3 4.0 2.3 3.5 4.0 4.6 1.3 2.9 2.4 3.6 2.9 1.2 3.9 4.3 0.8 2.6 2.2 2.9 2.6 1.9 3.7 4.1 1.1 3.0 1.9 3.1 3.1 0.6 3.5 4.0 0.0 0.0 0.0 0.0 0.0 0.0 3.7 1.1 0.0 2.4 0.0 0.0 16.8 0.0 1.8 2.5 0.0 0.0 0.6 0.0 1.5 0.4 2.1 3.9 0.5 1.4 1.3 3.3 0.0 2.2 3.6 8.5 0.5 0.8 0.3 2.7 0.1 7.5 8.3 7.9 2.0 3.0 0.2 3.6 1.0 4.3 6.4 7.5 1.8 2.6 0.3 3.6 1.2 3.8 5.9 6.6 0.9 2.9 0.2 3.3 1.3 1.6 5.2 5.7 1.4 3.0 0.2 3.5 3.1 1.1 4.6 1.6 0.0 0.0 0.0 0.0 0.0 9.5 1.7 0.4 0.0 3.7 0.0 0.0 0.0 0.0 1.9 3.2 0.0 0.0 0.1 0.0 0.7 0.6 2.5 8.6 0.5 0.7 0.4 2.7 0.0 7.5 8.3 0.2 0.2 2.2 0.3 0.4 0.0 0.1 0.2 1.0 1.8 10.2 2.5 1.0 13.9 0.1 2.8 0.7 1.4 7.6 1.9 0.7 10.0 0.0 2.1 0.5 0.9 4.8 1.1 0.5 6.9 0.0 1.4 0.2 0.6 2.1 0.7 0.2 2.6 0.0 0.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.0 0.0 0.0 0.0 0.0 1.4 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.2 0.2 2.1 0.4 0.4 0.0 0.1 0.2 0 4,831 4 316 62,235 894 396 73,401 930 134 68,128 451 165 77,212 450 -100.0 -93.7 -99.1 0 0 0 0 53 2 0 0 1 0 4,778 0 0 0 0 1 789 0 2 788 0 4 594 0 5 556 0 -100.0 -100.0 0.0 0 0 0 0 0 0 0 0 0 0 0 0 Number of institutions reporting asset sales������������������������������������������������������������ Outstanding Principal Balance by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� Home equity, credit card receivables, auto, and other consumer loans��������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total sold and not securitized����������������������������������������������������������������������������������� 818 826 820 826 819 -0.1 158 501 115 44 62,493 40 669 48,372 111,574 66,985 908 2,654 48,757 119,304 67,999 1,024 2,844 47,971 119,839 70,504 1,159 3,195 47,560 122,418 70,061 1,348 6,028 46,438 123,875 -10.8 -97.0 -88.9 4.2 -9.9 1,066 0 1 0 1,067 9,401 20 43 95 9,559 4,212 3 15 44 4,273 47,813 17 610 48,233 96,674 Maximum Credit Exposure by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� Home equity, credit card receivables, auto, and other consumer loans��������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total credit exposure������������������������������������������������������������������������������������������������� 13,701 21 62 10,450 24,233 16,541 100 1,934 10,412 28,986 15,418 104 2,003 10,136 27,661 15,836 112 2,224 10,011 28,183 15,421 183 4,995 9,790 30,389 -11.2 -88.5 -98.8 6.7 -20.3 110 0 1 0 111 1,237 7 32 66 1,342 2,433 1 15 5 2,455 9,920 12 14 10,379 20,325 Number of institutions reporting securitization facilities sponsored by others������� Total credit exposure������������������������������������������������������������������������������������������������� 74 6,410 57 4,296 60 4,872 60 3,812 56 2,134 32.1 200.4 26 10 33 97 7 37 8 6,266 Total unused liquidity commitments������������������������������������������������������������������������� 846 545 327 475 936 -9.6 0 0 0 846 6,034,911 6,010,532 5,977,515 5,878,337 5,681,694 6.2 3,968 119,605 7,268 15,967 17,658 20,210 22,981 -68.4 5 0 68 7,195 80,156 170,373 182,740 210,026 273,542 -70.7 0 0 1,272 78,884 4,844 13 3.3 8,019 1,615 15.9 5,995 1,163 16.2 10,845 -142 15.8 5,946 2,124 7.7 -18.5 -99.4 7 1 0.8 180 2 1.4 177 2 1.9 4,480 8 3.9 Support for Securitization Facilities Sponsored by Other Institutions Other Assets serviced for others*��������������������������������������������������������������������������������������� Asset-backed commercial paper conduits Credit exposure to conduits sponsored by institutions and others������������������ Unused liquidity commitments to conduits sponsored by institutions and others�������������������������������������������������������������������������������������������������� Net servicing income (for the quarter)���������������������������������������������������������������������� Net securitization income (for the quarter)��������������������������������������������������������������� Total credit exposure to Tier 1 capital (%)**������������������������������������������������������������� 94,369 5,816,968 * The amount of financial assets serviced for others, other than closed-end 1-4 family residential mortgages, is reported when these assets are greater than $10 million. ** Total credit exposure includes the sum of the three line items titled “Total credit exposure” reported above. FDIC Quarterly 13 2010, Volume 4, No. 2 Insurance Fund Indicators Insured Deposits Grow by 1.3 Percent ■ DIF Reserve Ratio Rises 1 Basis Point to −0.38 Percent ■ Forty-one Institutions Fail during First Quarter ■ Total assets of the nation’s 7,932 FDIC-insured commercial banks and savings institutions increased by $248.6 billion (1.9 percent) during first quarter 2010, funded primarily by an increase in nondeposit liabilities. Total deposits decreased by $28.6 billion, with domestic deposits almost flat, decreasing by $5.1 billion (0.1 percent), and foreign office deposits declining by $23.5 billion (1.5 percent). Domestic noninterest-bearing deposits decreased by $26.4 billion (1.7 percent), and domestic time deposits decreased by $116.1 billion (4.9 percent). Savings deposits and interest-bearing checking accounts increased by $137.4 billion (3.6 percent) during the quarter. The share of assets funded by domestic deposits declined from 58.7 percent to 57.6 percent, and the share funded by foreign office deposits decreased from 11.7 percent to 11.3 percent. Federal Home Loan Bank (FHLB) advances as a percentage of total assets continued to decline, from 4.1 percent to 3.6 percent on March 31, 2010, the smallest percentage on record (2001 to present). Since September 30, 2009, insured deposit estimates have been based on the temporary $250,000 deposit insurance coverage limit.2 Estimated insured deposits (including U.S. branches of foreign banks) rose by $70.0 billion (1.3 percent) during first quarter 2010, down slightly from the previous quarter’s 1.7 percent growth. For the most recent 12-month period, insured deposits increased by 13.1 percent ($631.5 billion), which includes the effect of the temporary increase in FDIC deposit insurance coverage. For institutions reporting at December 31, 2009 and March 31, 2010, insured deposits increased at 5,027 institutions (63 percent), decreased at 2,876 institutions (36 percent), and remained unchanged at 26 institutions. The Deposit Insurance Fund (DIF) increased by $145 million during the first quarter to a negative $20.7 billion (unaudited). This was the first increase in the fund’s balance since first quarter 2008. Accrued assessment income added $3.3 billion to the DIF during the first quarter. The fund received $62 million from interest on securities and $149 million from net unrealized gains and losses on available-for-sale securities. The biggest reduction in the DIF came from a $3.0 billion increase in additional provisions for bank failures. Operating and other expenses, net of other revenue, reduced the fund by $323 million. Brokered deposits decreased by $10.0 billion (1.6 percent) during the first quarter and decreased by $164.4 billion (21.2 percent) during the previous 12 months. Reciprocal brokered deposits decreased by $639.7 million (1.9 percent) to $33.3 billion during the three months ending March 31, 2010. Since the second quarter of 2009, the portion of brokered deposits exceeding 10 percent of an institution’s domestic deposits has been included in the formula used to price deposit insurance.1 The small increase in the DIF combined with average insured deposit growth raised the first quarter reserve ratio to −0.38 percent, 1 basis point higher than the previous quarter, but the reserve ratio is 65 basis points For an institution in Risk Category I, the initial base assessment rate is adjusted using the adjusted brokered deposit ratio. This ratio will exceed zero if an institution’s brokered deposits are greater than 10 percent of its domestic deposits and its total assets are more than 40 percent greater than they were four years previously. Certain reciprocal brokered deposits are excluded from the calculation of the adjusted brokered deposit ratio. For an institution in any other risk category, the initial base assessment rate is increased if the institution’s ratio of brokered deposits to domestic deposits is greater than 10 percent. Reciprocal brokered deposits are included in the amount of brokered deposits for purposes of computing this ratio. 1 FDIC Quarterly On May 20, 2009, the President signed the Helping Families Save Their Homes Act of 2009, which extended the temporary deposit insurance coverage limit increase to $250,000 for deposits other than retirement accounts (from the permanent limit of $100,000) through the end of 2013. The legislation also eliminated the provision in the Emergency Economic Stabilization Act of 2009 that prevented the FDIC from considering this temporary increase in deposit insurance coverage for purposes of setting deposit insurance assessments. Beginning September 30, 2009, insured deposit estimates are based on the $250,000 coverage limit. 2 14 2010, Volume 4, No. 2 Quarterly Banking Profile lower than a year earlier. The fund’s reserve ratio for March 31, 2010 (−0.38 percent) is the second lowest on record. Forty-one FDIC-insured institutions with combined assets of $22.1 billion failed during first quarter 2010, at an estimated cost of $6.3 billion. One hundred and sixty FDIC-insured institutions with combined assets of $182.4 billion failed during the latest 12 months, at an estimated cost of $39.6 billion. Author: FDIC Quarterly Kevin Brown, Sr. Financial Analyst Division of Insurance and Research (202) 898-6817 15 2010, Volume 4, No. 2 Table I-B. Insurance Fund Balances and Selected Indicators (dollar figures in millions) Beginning Fund Balance����� 1st Quarter 2010* 4th Quarter 2009* 3rd Quarter 2009 2nd Quarter 2009 1st Quarter 2009 Deposit Insurance Fund 4th 3rd 2nd Quarter Quarter Quarter 2008 2008 2008 1st Quarter 2008 4th Quarter 2007 3rd Quarter 2007 2nd Quarter 2007 1st Quarter 2007 -$20,862 -$8,243 $10,368 $13,007 $17,276 $34,588 $45,217 $52,843 $52,413 $51,754 $51,227 $50,745 $50,165 3,278 3,042 2,965 9,095 2,615 996 881 640 448 239 170 140 94 62 76 176 240 212 277 526 651 618 585 640 748 567 0 345 0 379 732 328 521 298 136 266 302 290 473 249 0 256 0 238 0 262 0 243 0 248 0 239 3,021 17,766 21,694 11,615 6,637 19,163 11,930 10,221 525 39 132 -3 -73 22 2,721 308 375 2 15 16 1 0 -2 24 1 4 149 145 -313 -12,619 -770 -18,611 -957 -2,639 -331 -4,269 551 -17,312 -346 -10,629 1,559 -7,626 127 430 138 659 68 527 -162 482 81 580 Ending Fund Balance����������� Percent change from four quarters earlier��������� -20,717 -20,862 -8,243 10,368 13,007 17,276 34,588 45,217 52,843 52,413 51,754 51,227 50,745 NM NM NM -77.07 -75.39 -67.04 -33.17 -11.73 4.13 4.48 3.52 3.36 3.15 Reserve Ratio (%)����������������� -0.38 -0.39 -0.16 0.22 0.27 0.36 0.76 1.01 1.19 1.22 1.22 1.21 1.20 5,462,644 5,392,677 5,304,695 4,817,614 4,831,129 4,775,133 4,558,937 4,468,240 4,439,491 4,292,940 4,243,129 4,235,314 4,245,447 13.07 12.93 16.36 7.82 8.82 11.23 7.44 5.50 4.57 3.34 3.49 4.82 6.08 7,709,420 7,714,167 7,564,731 7,571,019 7,567,128 7,529,934 7,244,167 7,036,919 7,078,340 6,922,406 6,748,520 6,699,156 6,702,779 1.88 2.45 4.43 7.59 6.91 8.78 7.34 5.04 5.60 4.25 4.07 3.91 5.71 7,942 8,022 8,109 8,205 8,257 8,315 8,394 8,462 8,505 8,545 8,570 8,625 8,661 Changes in Fund Balance: Assessments earned�������������� Interest earned on investment securities������ Realized Gain on Sale of Investments���������������������� Operating expenses��������������� Provision for insurance losses������������������������������� All other income, net of expenses��������������� Unrealized gain/(loss) on available-for-sale securities������������������������� Total fund balance change����� Estimated Insured Deposits**������������������������������ Percent change from four quarters earlier��������� Domestic Deposits��������������� Percent change from four quarters earlier��������� Number of institutions reporting������������������������� DIF Reserve Ratios Deposit Insurance Fund Balance and Insured Deposits ($ Millions) Percent of Insured Deposits 1.20 1.21 1.22 1.22 1.19 1.01 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 9/09 12/09 3/10 0.76 0.36 0.27 0.22 -0.16 -0.39 -0.38 3/07 9/07 3/08 9/08 3/09 9/09 3/10 DIF Balance DIF-Insured Deposits 50,745 51,227 51,754 52,413 52,843 45,217 34,588 17,276 13,007 10,368 -8,243 -20,862 -20,717 4,245,447 4,235,314 4,243,129 4,292,940 4,439,491 4,468,240 4,558,937 4,775,133 4,831,129 4,817,614 5,304,695 5,392,677 5,462,644 Table II-B. Problem Institutions and Failed/Assisted Institutions (dollar figures in millions) Problem Institutions Number of institutions��������������������������������������������������������������� Total assets�������������������������������������������������������������������������������� Failed Institutions Number of institutions��������������������������������������������������������������� Total assets�������������������������������������������������������������������������������� Assisted Institutions*** Number of institutions��������������������������������������������������������������� Total assets�������������������������������������������������������������������������������� 2010**** 2009**** 2009 2008 2007 2006 2005 775 $431,189 305 $220,047 702 $402,782 252 $159,405 76 $22,189 50 $8,265 52 $6,607 41 $22,140 21 $9,498 140 $169,709 25 $371,945 3 $2,615 0 $0 0 $0 0 $0 8 $1,917,482 8 $1,917,482 5 $1,306,042 0 0 0 0 0 0 * Preliminary unaudited fund data, which are subject to change. NM - Not meaningful ** The Emergency Economic Stabilization Act of 2008 directs the FDIC not to consider the temporary coverage increase to $250,000 in setting assessments. Therefore, we do not include the additional insured deposits in calculating the fund reserve ratio, which guides our assessment planning, from fourth quarter 2008 through second quarter 2009. The Helping Families Save Their Homes Act of 2009 eliminated the prohibition against the FDIC’s taking the temporary increase into account when setting assessments. Beginning in the third quarter of 2009, estimates of insured deposits include the temporary coverage increase to $250,000. ***Assisted institutions represent five institutions under a single holding company that received assistance in 2008, and eight institutions under a different single holding company that received assistance in 2009. ****Through March 31. FDIC Quarterly 16 2010, Volume 4, No. 2 Quarterly Banking Profile Table III-B. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) Number of Institutions March 31, 2010 Commercial Banks and Savings Institutions Total Assets Domestic Deposits* Est. Insured Deposits FDIC-Insured Commercial Banks����������������������������������������������� FDIC-Supervised������������������������������������������������������������������� OCC-Supervised�������������������������������������������������������������������� Federal Reserve-Supervised������������������������������������������������� 6,772 4,485 1,446 841 $12,086,503 1,952,489 8,471,255 1,662,760 $6,787,692 1,482,631 4,305,510 999,551 $4,649,672 1,185,569 2,826,502 637,601 FDIC-Insured Savings Institutions���������������������������������������������� OTS-Supervised Savings Institutions������������������������������������ FDIC-Supervised State Savings Banks��������������������������������� 1,160 755 405 1,270,122 950,168 319,954 904,055 667,393 236,662 803,066 596,399 206,667 Total Commercial Banks and Savings Institutions���������������������� 7,932 13,356,625 7,691,747 5,452,738 Other FDIC-Insured Institutions U.S. Branches of Foreign Banks������������������������������������������������� 10 28,018 17,673 9,906 Total FDIC-Insured Institutions���������������������������������������������������� .. 7,942 13,384,643 7,709,420 5,462,644 * Excludes $1.51 trillion in foreign office deposits, which are uninsured. Table IV-B. Distribution of Institutions and Domestic Deposits Among Risk Categories Quarter Ending December 31, 2009 (dollar figures in billions) Risk Category I Risk Category II Risk Category III Risk Category IV Annual Rate in Basis Points* 7.00–12.00 12.01–14.00 14.01–15.99 16.00–24.00 17.00–22.00 22.01–43.00 27.00–32.00 32.01–58.00 40.00–45.00 45.01–77.50 Number of Institutions 1,812 1,629 2,381 259 906 307 358 187 107 76 Percent of Total Institutions 22.59 20.31 29.68 3.23 11.29 3.83 4.46 2.33 1.33 0.95 Domestic Deposits 619 2,129 1,909 349 1,948 447 101 125 36 52 Percent of Total Domestic Deposits 8.02 27.60 24.75 4.53 25.25 5.79 1.31 1.61 0.46 0.68 Note: Institutions are categorized based on supervisory ratings, debt ratings and financial data as of December 31, 2009. Rates do not reflect the application of assessment credits. See Notes to Users for further information on risk categories and rates. * Assessment rates with a given risk category vary for several reasons, see 12 CFR Part 327 http://www.fdic.gov/deposit/insurance/initiative/09FinalAD35.pdf FDIC Quarterly 17 2010, Volume 4, No. 2 TEMPORARY LIQUIDITY GUARANTEE PROGRAM Debt Guarantee Program Ended October 31, 2009 ■ Transaction Account Guarantee Program Extended to December 31, 2010 ■ $279 Billion Guaranteed in Transaction Accounts over $250,000 ■ $305 Billion Outstanding in Debt Guarantee Program ■ ning in second quarter 2009.2 The Board adopted a final rule on October 20, 2009, that allowed the DGP to expire on October 31, 2009.3 FDIC Responds to Market Disruptions with TLGP The FDIC Board approved the Temporary Liquidity Guarantee Program (TLGP) on October 13, 2008, as major disruptions in credit markets blocked access to liquidity for financial institutions.1 The TLGP improved access to liquidity through two programs: the Transaction Account Guarantee Program (TAGP), which fully guarantees noninterest-bearing transaction deposit accounts above $250,000, regardless of dollar amount; and the Debt Guarantee Program (DGP), which guarantees eligible senior unsecured debt issued by eligible institutions. A final rule extending the TAGP six months, to June 30, 2010, was adopted on August 26, 2009. Entities participating in the TAGP had the opportunity to opt out of the extended program. Depository institutions that remain in the extended program are subject to increased fees that are adjusted to reflect the institution’s risk.4 On April 13, 2010, the FDIC adopted an interim final rule extending the TAGP for another six months, through December 31, 2010. Under the rule, the FDIC may extend the program for an additional 12 months without further rulemaking.5 All insured depository institutions were eligible to participate in the TAGP. Institutions eligible for participation in the DGP were insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of insured depository institutions that the FDIC designated as eligible entities. Program Funded by Industry Fees and Assessments The TLGP does not rely on taxpayer funding or the Deposit Insurance Fund. Both the TAGP and the DGP are paid for by direct user fees. Institutions participating in the TAGP through year-end 2009 were assessed an annual fee of 10 basis points. Fees for qualifying noninterest-bearing transaction accounts guaranteed between January 1, 2010, and June 30, 2010, are based on the participating entity’s risk category assignment under the FDIC’s risk-based premium system. Annualized fees are 15, 20, or 25 basis points, depending on an institution’s risk category. FDIC Extends Guarantee Programs Although financial markets improved significantly in the first half of 2009, portions of the industry were still affected by the recent economic turmoil. To facilitate the orderly phase-out of the TLGP, and to continue access to FDIC guarantees where they were needed, the FDIC Board extended both the DGP and TAGP. On March 17, 2009, the Board of Directors of the FDIC voted to extend the deadline for issuance of guaranteed debt from June 30, 2009, to October 31, 2009, and extended the expiration date of the guarantee to the earlier of maturity of the debt or December 31, 2012, from June 30, 2012. The FDIC imposed a surcharge on debt issued with a maturity of one year or more begin- Fees for participation in the DGP were based on the maturity of debt issued and ranged from 50 to 100 basis points (annualized). A surcharge was imposed on debt issued with a maturity of one year or greater after April 1, 2009. For debt that was not issued under the extenSee http://www.fdic.gov/news/board/Mar1709rule.pdf See http://www.fdic.gov/regulations/laws/federal/2009/09finalAD37 Oct23.pdf. 4 See http://www.fdic.gov/news/board/aug26no3.pdf. 5 See http://www.fdic.gov/news/news/press/2010/pr10075.html. 2 The FDIC invoked the systemic risk exception pursuant to section 141 of the Federal Deposit Improvement Act of 1991, 12 U.S.C 1823(c)(4) on October 13, 2008. For further information on the TLGP, see http://www.fdic.gov/regulations/resources/TLGP/index.html. 1 FDIC Quarterly 3 18 2010, Volume 4, No. 2 Quarterly Banking Profile sion, that is, debt issued on or before June 30, 2009, and maturing on or before June 30, 2012, surcharges were 10 basis points (annualized) on debt issued by insured depository institutions and 20 basis points (annualized) on debt issued by other participating entities. For debt issued under the extension, that is, debt issued after June 30, 2009, or debt that matures after June 30, 2012, surcharges were 25 basis points (annualized) on debt issued by insured depository institutions and 50 basis points (annualized) on debt issued by other participating entities. As of March 31, 2010, fees totaling $10.4 billion had been assessed under the DGP. $305 Billion in FDIC-Guaranteed Debt Was Outstanding at March 31, 2010 Seventy-nine financial entities—49 insured depository institutions and 30 bank and thrift holding companies and nonbank affiliates—had $305 billion in guaranteed debt outstanding at the end of first quarter 2010. Some banking groups issued FDIC-guaranteed debt at both the subsidiary and holding company level, but most guaranteed debt was issued by holding companies or nonbank affiliates of depository institutions. Bank and thrift holding companies and nonbank affiliates issued 81 percent of FDIC-guaranteed debt outstanding at March 31, 2010. A Majority of Eligible Entities Have Chosen to Participate in the TLGP Debt outstanding at March 31, 2010, had longer term at issuance, compared to debt outstanding at year-end 2008. Less than 1 percent of debt outstanding matures in 180 days or less, compared to 49 percent at year-end 2008; and 79 percent matures more than two years after issuance, compared to 39 percent at December 31, 2008. Among types of debt instruments, 91 percent was in medium-term notes, compared to 44 percent at year-end. The share of outstanding debt in commercial paper fell to less than 0.1 percent from 43 percent at year-end 2008. Almost 80 percent of FDIC-insured institutions opted in to the TAGP extension through June 30, 2010. More than half of all eligible entities elected to opt in to the DGP. Lists of institutions that opted out of the guarantee programs are posted at http://www.fdic.gov/ regulations/resources/TLGP/optout.html. $279 Billion in Transaction Accounts over $250,000 Guaranteed According to first quarter 2010 Call and Thrift Financial Reports, insured institutions reported 305,302 noninterest-bearing transaction accounts over $250,000, about half the number of accounts reported at year-end 2009. These deposit accounts totaled $356 billion, of which $279 billion was guaranteed under the TAGP. More than 5,500 FDIC-insured institutions reported noninterest-bearing transaction accounts over $250,000 in value. Author: Katherine Wyatt Chief, Financial Analysis Section Division of Insurance and Research (202) 898-6755 Table I-C. Participation in Temporary Liquidity Guarantee Program Total Eligible Entities March 31, 2010 Transaction Account Guarantee Program Extension to June 30, 2010 Depository Institutions with Assets <= $10 Billion�������������������������������������������������� Depository Institutions with Assets > $10 Billion���������������������������������������������������� Total Depository Institutions*���������������������������������������������������������������������������� Debt Guarantee Program Depository Institutions with Assets <= $10 Billion�������������������������������������������������� Depository Institutions with Assets > $10 Billion���������������������������������������������������� Total Depository Institutions*���������������������������������������������������������������������������� Bank and Thrift Holding Companies and Non-Insured Affiliates��������������������������� All Entities���������������������������������������������������������������������������������������������������������� * Depository institutions include insured branches of foreign banks (IBAs). FDIC Quarterly 19 Number Opting In Percent Opting In 7,835 107 7,942 6,258 67 6,325 79.9% 62.6% 79.6% 7,835 107 7,942 6,071 14,013 4,161 96 4,257 3,421 7,678 53.1% 89.7% 53.6% 56.3% 54.8% 2010, Volume 4, No. 2 Table II-C. Cap on FDIC-Guaranteed Debt for Opt-In Entities Opt-In Depository Institutions with no Senior Unsecured Debt at 9/30/2008 2% Liabilities as of Number 9/30/2008 Opt-In Entities with Senior Unsecured Debt Outstanding at 9/30/2008 Debt Amount as of Number 9/30/2008 Initial Cap March 31, 2010 (dollar figures in millions) Depository Institutions with Assets <= $10 Billion*������������������������������������ Depository Institutions with Assets > $10 Billion*�������������������������������������� Bank and Thrift Holding Companies, Noninsured Affiliates������������������������������� Total��������������������������������������������������������� Total Entities Total Initial Cap 114 $3,507 $4,384 4,047 $31,211 4,161 $35,595 39 269,228 336,535 57 24,392 96 360,927 83 236 397,727 670,462 497,158 838,078 3,338 7,442 N/A 55,603 3,421 7,678 497,158 893,681 * Depository institutions include insured branches of foreign banks (IBAs). N/A - Not applicable Table III-C. Transaction Account Guarantee Program Mar. 31, 2009 (dollar figures in millions) Number of Noninterest-Bearing Transaction Accounts over $250,000�������������������������������������������������������������� Amount in Noninterest-Bearing Transaction .Accounts over $250,000�������������������������������������������������������������� Amount Guaranteed���������������������������������������������������������� June 30, 2009 Sep. 30, 2009 Dec. 31, 2009 Mar. 31, 2010 % Change 09Q4-10Q1 586,910 681,429 646,997 687,741 305,302 -55.6% $854,934 $708,207 $903,762 $733,405 $926,401 $764,652 $1,007,010 $835,074 $355,800 $279,475 -64.7% -66.5% Table IV-C. Debt Outstanding in Guarantee Program March 31, 2010 (dollar figures in millions) Insured Depository Institutions Assets <= $10 Billion������������������������������������������������������� Assets > $10 Billion��������������������������������������������������������� Bank and Thrift Holding Companies, Noninsured Affiliates������������������������������������������������������������� All Issuers����������������������������������������������������������������������� Number Debt Outstanding Debt Outstanding Share of Cap Cap1 for Group 32 17 $1,593 55,881 $2,852 210,244 55.8% 26.6% 30 79 247,903 305,376 387,487 600,582 64.0% 50.8% The amount of FDIC-guaranteed debt that can be issued by each eligible entity, or its “cap,” is based on the amount of senior unsecured debt outstanding as of eptember 30, 2008. The cap for a depository institution with no senior unsecured debt outstanding at September 30, 2008, is set at 2 percent of total liabilities. S See http://www2.fdic.gov/qbp/2008dec/tlgp2c.html for more information. 1 Table V-C. Fees Assessed Under TLGP (dollar figures in millions) Fourth Quarter 2008�������������������������������������������������������������� First Quarter 2009����������������������������������������������������������������� Second Quarter 2009������������������������������������������������������������ Third Quarter 2009���������������������������������������������������������������� Fourth Quarter 2009�������������������������������������������������������������� First Quarter 2010** Debt Guarantee Program Fees Assessed Surcharges Total Fee Amount $3,437 $3,437 3,433 3,433 1,413 385 1,797 691 280 971 503 207 709 14 14 Total��������������������������������������������������������������������������������� $9,491 $872 Transaction Account Guarantee Program* Fees Collected 90 179 182 188 207 $10,363 $846 * Pro-rated payment in arrears. ** A review of data systems led us to recognize a nominal fee amount that had been dropped in error from previously reported amounts. Table VI-C. Term at Issuance of Debt Instruments Outstanding March 31, 2010 (dollar figures in millions) Term at Issuance 90 days or less�������������������������������������� 91-180 days������������������������������������������� 181-364 days����������������������������������������� 1-2 years����������������������������������������������� Over 2-3 years�������������������������������������� Over 3 years������������������������������������������ Total������������������������������������������������ Share of Total���������������������������������������� FDIC Quarterly Interbank Other Commercial Eurodollar Medium Interbank Paper Deposits Term Notes Deposits $0 0 0 0 0 1 1 0.0% $0 0 0 0 0 0 0 0.0% $0 0 0 57,876 80,447 139,985 278,307 91.1% 20 $0 2 65 3 0 4 74 0.0% Other Senior Unsecured Other Debt Term Note $0 0 1 0 3,352 3,713 7,065 2.3% $0 0 1 4,773 6,005 9,151 19,929 6.5% All Debt $0 2 67 62,651 89,803 152,853 305,376 Share by Term 0.0% 0.0% 0.0% 20.5% 29.4% 50.1% 2010, Volume 4, No. 2 Quarterly Banking Profile Notes to Users period amount plus end-of-period amount plus any interim periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s) are included in average assets since the year-to-date income includes the results of all merged institutions. No adjustments are made for “purchase accounting” mergers. Growth rates represent the percentage change over a 12-month period in totals for institutions in the base period to totals for institutions in the current period. All data are collected and presented based on the location of each reporting institution’s main office. Reported data may include assets and liabilities located outside of the reporting institution’s home state. In addition, institutions may relocate across state lines or change their charters, resulting in an inter-regional or inter-industry migration, e.g., institutions can move their home offices between regions, and savings institutions can convert to commercial banks or commercial banks may convert to savings institutions. This publication contains financial data and other information for depository institutions insured by the Federal Deposit Insurance Corporation (FDIC). These notes are an integral part of this publication and provide information regarding the comparability of source data and reporting differences over time. Tables I-A through VIII-A. The information presented in Tables I-A through V-A of the FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and savings institutions. Tables VI-A (Derivatives) and VII-A (Servicing, Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered savings banks that file quarterly Call Reports. Table VIII-A (Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured institutions. Some tables are arrayed by groups of FDIC-insured institutions based on predominant types of asset concentration, while other tables aggregate institutions by asset size and geographic region. Quarterly and full-year data are provided for selected indicators, including aggregate condition and income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off information for loans outstanding and other assets. ACCOUNTING CHANGES Extended Net Operating Loss Carryback Period – The Worker, Homeownership, and Business Assistance Act of 2009, which was enacted on November 6, 2009, permits banks and other businesses, excluding those banking organizations that received capital from the U.S. Treasury under the Troubled Asset Relief Program, to elect a net operating loss carryback period of three, four, or five years instead of the usual carryback period of two years for any one tax year ending after December 31, 2007, and beginning before January 1, 2010. For calendar year banks, this extended carryback period applies to either the 2008 or 2009 tax year. The amount of the net operating loss that can be carried back to the fifth carryback year is limited to 50 percent of the available taxable income for that fifth year, but this limit does not apply to other carryback years. Under generally accepted accounting principles, banks may not record the effects of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the fourth quarter of 2009. Therefore, banks should recognize the effects of this fourth quarter 2009 tax law change on their current and deferred tax assets and liabilities, including valuation allowances for deferred tax assets, in their Call Reports for December 31, 2009. Banks should not amend their Call Reports for prior quarters for the effects of the extended net operating loss carryback period. The American Recovery and Reinvestment Act of 2009, which was enacted on February 17, 2009, permits qualifying small businesses, including FDIC-insured institutions, to elect a net operating loss carryback period of three, four, or five years instead of the usual carryback period of two years for any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally accepted accounting principles, institutions may not record the effect of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the first quarter of 2009. Other-Than-Temporary Impairment – When the fair value of an investment in a debt or equity security is less than its cost basis, the impairment is either temporary or other-than- Tables I-B through IV-B. A separate set of tables (Tables I-B through IV-B) provides comparative quarterly data related to the Deposit Insurance Fund (DIF), problem institutions, failed/assisted institutions, estimated FDIC-insured deposits, as well as assessment rate information. Depository institutions that are not insured by the FDIC through the DIF are not included in the FDIC Quarterly Banking Profile. U.S. branches of institutions headquartered in foreign countries and non-deposit trust companies are not included unless otherwise indicated. Efforts are made to obtain financial reports for all active institutions. However, in some cases, final financial reports are not available for institutions that have closed or converted their charters. DATA SOURCES The financial information appearing in this publication is obtained primarily from the Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income (Call Reports) and the OTS Thrift Financial Reports submitted by all FDIC-insured depository institutions. This information is stored on and retrieved from the FDIC’s Research Information System (RIS) data base. COMPUTATION METHODOLOGY Parent institutions are required to file consolidated reports, while their subsidiary financial institutions are still required to file separate reports. Data from subsidiary institution reports are included in the Quarterly Banking Profile tables, which can lead to double-counting. No adjustments are made for any double-counting of subsidiary data. Additionally, certain adjustments are made to the OTS Thrift Financial Reports to provide closer conformance with the reporting and accounting requirements of the FFIEC Call Reports. All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-ofFDIC Quarterly 21 2010, Volume 4, No. 2 temporary. To determine whether the impairment is otherthan-temporary, an institution must apply other pertinent guidance such as paragraph 16 of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities; FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments; FSP FAS 115‑2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments; paragraph 6 of Accounting Principles Board Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock; Emerging Issues Task Force (EITF) Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets; and FSP EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20. Under FSP FAS 115-2 and FAS 124-2 issued on April 9, 2009, if the present value of cash flows expected to be collected on a debt security is less than its amortized cost basis, a credit loss exists. In this situation, if an institution does not intend to sell the security and it is not more likely than not that the institution will be required to sell the debt security before recovery of its amortized cost basis less any current- period credit loss, an other-than-temporary impairment has occurred. The amount of the total other-than-temporary impairment related to the credit loss must be recognized in earnings, but the amount of the total impairment related to other factors must be recognized in other comprehensive income, net of applicable taxes. Although the debt security would be written down to its fair value, its new amortized cost basis is the previous amortized cost basis less the other-thantemporary impairment recognized in earnings. In addition, if an institution intends to sell a debt security whose fair value is less than its amortized costs basis or it is more likely than not that the institution will be required to sell the debt security before recovery of its amortized cost basis, an other-thantemporary impairment has occurred and the entire difference between the security’s amortized cost basis and its fair value must be recognized in earnings. For any debt security held at the beginning of the interim period in which FSP FAS 115-2 and FAS 124-2 is adopted for which an other-than-temporary impairment loss has been previously recognized, if an institution does not intend to sell such a debt security and it is not more likely than not that the institution will be required to sell the debt security before recovery of its amortized cost basis, the institution should recognize the cumulative effect of initially applying the FSP as an adjustment to the interim period’s opening balance of retained earnings, net of applicable taxes, with a corresponding adjustment to accumulated other comprehensive income. The cumulative effect on retained earnings must be calculated by comparing the present value of the cash flows expected to be collected on the debt security with the security’s amortized cost basis as of the beginning of the interim period of adoption. FSP FAS 115-2 and FAS 124-2 are effective for interim and annual reporting periods ending after June 15, 2009. Early adoption of this FSP is permitted for periods ending after March 15, 2009, if certain conditions are met. Institutions are expected to adopt FSP FAS 115-2 and 124-2 for regulatory reporting purposes in accordance with the FSP’s effective date. FDIC Quarterly Business Combinations and Noncontrolling (Minority) Interests – In December 2007, the FASB issued Statement No. 141 (Revised), Business Combinations (FAS 141(R)), and State ment No. 160, Noncontrolling Interests in Consolidated Financial Statements (FAS 160). Under FAS 141(R), all business combinations, including combinations of mutual entities, are to be accounted for by applying the acquisition method. FAS 160 defines a noncontrolling interest, also called a minority interest, as the portion of equity in an institution’s subsidiary not attributable, directly or indirectly, to the parent institution. FAS 160 requires an institution to clearly present in its consolidated financial statements the equity ownership in and results of its subsidiaries that are attributable to the noncontrolling ownership interests in these subsidiaries. FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Similarly, FAS 160 is effective for fiscal years beginning on or after December 15, 2008. Thus, for institutions with calendar year fiscal years, these two accounting standards take effect in 2009. Beginning in March 2009, Institution equity capital and Noncontrolling interests are separately reported in arriving at Total equity capital and Net income. FASB Statement No. 157 Fair Value Measurements issued in September 2006 and FASB Statement No. 159 The Fair Value Option for Financial Assets and Financial Liabilities issued in February 2007 – both are effective in 2008 with early adoption permitted in 2007. FAS 157 defines fair value and establishes a framework for developing fair value estimates for the fair value measurements that are already required or permitted under other standards. FASB FSP 157-4, issued in April 2009, provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity for the asset or liability have significantly decreased. The FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. The FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Fair value continues to be used for derivatives, trading securities, and available-for-sale securities. Changes in fair value go through earnings for trading securities and most derivatives. Changes in the fair value of available-for-sale securities are reported in other comprehensive income. Available-forsale securities and held-to-maturity debt securities are written down to fair value if impairment is other than temporary and loans held for sale are reported at the lower of cost or fair value. FAS 159 allows institutions to report certain financial assets and liabilities at fair value with subsequent changes in fair value included in earnings. In general, an institution may elect the fair value option for an eligible financial asset or liability when it first recognizes the instrument on its balance sheet or enters into an eligible firm commitment. FASB Statement No. 158 Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – issued in September 2006 requires a bank to recognize in 2007, and subsequently, the funded status of its postretirement plans on its balance sheet. An overfunded plan is recognized as an asset and an underfunded plan is recognized as a liability. An adjustment is made to equity as accumulated other comprehensive income (AOCI) upon application of FAS 158, and AOCI is adjusted 22 2010, Volume 4, No. 2 Quarterly Banking Profile in subsequent periods as net periodic benefit costs are recognized in earnings. FASB Statement No. 156 Accounting for Servicing of Financial Assets – issued in March 2006 and effective in 2007, requires all separately recognized servicing assets and liabilities to be initially measured at fair value and allows a bank the option to subsequently adjust that value by periodic revaluation and recognition of earnings or by periodic amortization to earnings. FASB Statement No. 155 Accounting for Certain Hybrid Financial Instruments – issued in February 2006, requires bifurcation of certain derivatives embedded in interests in securitized financial assets and permits fair value measurement (i.e., a fair value option) for any hybrid financial instrument that contains an embedded derivative that would otherwise require bifurcation under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (FAS 133). In addition, FAS 155 clarifies which interest-only and principalonly strips are not subject to FAS 133. Purchased Impaired Loans and Debt Securities – Statement of Position 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer. The SOP applies to loans and debt securities acquired in fiscal years beginning after December 15, 2004. In general, this Statement of Position applies to “purchased impaired loans and debt securities” (i.e., loans and debt securities that a bank has purchased, including those acquired in a purchase business combination, when it is probable, at the purchase date, that the bank will be unable to collect all contractually required payments receivable). Banks must follow Statement of Position 03-3 for Call Report purposes. The SOP does not apply to the loans that a bank has originated, prohibits “carrying over” or creation of valuation allowances in the initial accounting, and any subsequent valuation allowances reflect only those losses incurred by the investor after acquisition. GNMA Buy-back Option – If an issuer of GNMA securities has the option to buy back the loans that collateralize the GNMA securities, when certain delinquency criteria are met, FASB Statement No. 140 requires that loans with this buyback option must be brought back on the issuer’s books as assets. The rebooking of GNMA loans is required regardless of whether the issuer intends to exercise the buy-back option. The banking agencies clarified in May 2005 that all GNMA loans that are rebooked because of delinquency should be reported as past due according to their contractual terms. FASB Statements 166 & 167 – In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets (FAS 166), and Statement No. 167, Amendments to FASB Interpretation No. 46(R) (FAS 167), which change the way entities account for securitizations and special purpose entities. FAS 166 revises FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, by eliminating the concept of a “qualifying special-purpose entity,” creating the concept of a “participating interest,” changing the requirements for derecognizing financial assets, and requiring additional disclosures. FAS 167 revises FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, by changing how a bank or other company determines when an entity that is insufficiently capitalized or is not controlled through voting or similar rights, i.e., a “variable interest entity” (VIE), should be consolidated. Under FAS 167, a bank must perform a FDIC Quarterly qualitative assessment to determine whether its variable interest or interests give it a controlling financial interest in a VIE. If a bank’s variable interest or interests provide it with the power to direct the most significant activities of the VIE, and the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the bank is the primary beneficiary of, and therefore must consolidate, the VIE. Both FAS 166 and FAS 167 take effect as of the beginning of each bank’s first annual reporting period that begins after November 15, 2009, for interim periods therein, and for interim and annual reporting periods thereafter (i.e., as of January 1, 2010, for banks with a calendar year fiscal year). Earlier application is prohibited. Banks are expected to adopt FAS 166 and FAS 167 for Call Report purposes in accordance with the effective date of these two standards. Also, FAS 166 has modified the criteria that must be met in order for a transfer of a portion of a financial asset, such as a loan participation, to qualify for sale accounting. These changes apply to transfers of loan participations on or after the effective date of FAS 166. Therefore, banks with a calendar year fiscal year must account for transfers of loan participations on or after January 1, 2010, in accordance with FAS 166. In general, loan participations transferred before the effective date of FAS 166 (January 1, 2010, for calendar year banks) are not affected by this new accounting standard and pre-FAS 166 participations that were properly accounted for as sales under FASB Statement No. 140 will continue to be reported as having been sold. FASB Interpretation No. 48 on Uncertain Tax Positions – FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), was issued in June 2006 as an interpretation of FASB Statement No. 109, Accounting for Income Taxes. Under FIN 48, the term “tax position” refers to “a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities.” FIN 48 further states that a “tax position can result in a permanent reduction of income taxes payable, a deferral of income taxes otherwise currently payable to future years, or a change in the expected realizability of deferred tax assets.” FIN 48 was originally issued effective for fiscal years beginning after December 15, 2006. Banks must adopt FIN 48 for Call Report purposes in accordance with the interpretation’s effective date except as follows. On December 31, 2008, the FASB decided to defer the effective date of FIN 48 for eligible nonpublic enterprises and to require those enterprises to adopt FIN 48 for annual periods beginning after December 15, 2008. A nonpublic enterprise under certain conditions is eligible for deferral, even if it opted to issue interim or quarterly financial information in 2007 under earlier guidance that reflected the adoption of FIN 48. FASB Statement No. 123 (Revised 2004) and Share-Based Payments – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2008dec/qbpnot.html FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2008dec/ qbpnot.html 23 2010, Volume 4, No. 2 DEFINITIONS (in alphabetical order) Derivatives transaction types: Futures and forward contracts – contracts in which the buyer agrees to purchase and the seller agrees to sell, at a specified future date, a specific quantity of an underlying variable or index at a specified price or yield. These contracts exist for a variety of variables or indices, (traditional agricultural or physical commodities, as well as currencies and interest rates). Futures contracts are standardized and are traded on organized exchanges which set limits on counterparty credit exposure. Forward contracts do not have standardized terms and are traded over the counter. Option contracts – contracts in which the buyer acquires the right to buy from or sell to another party some specified amount of an underlying variable or index at a stated price (strike price) during a period or on a specified future date, in return for compensation (such as a fee or premium). The seller is obligated to purchase or sell the variable or index at the discretion of the buyer of the contract. Swaps – obligations between two parties to exchange a series of cash flows at periodic intervals (settlement dates), for a specified period. The cash flows of a swap are either fixed, or determined for each settlement date by multiplying the quantity (notional principal) of the underlying variable or index by specified reference rates or prices. Except for currency swaps, the notional principal is used to calculate each payment but is not exchanged. Derivatives underlying risk exposure – the potential exposure characterized by the level of banks’ concentration in particular underlying instruments, in general. Exposure can result from market risk, credit risk, and operational risk, as well as, interest rate risk. Domestic deposits to total assets – total domestic office deposits as a percent of total assets on a consolidated basis. Earning assets – all loans and other investments that earn interest or dividend income. Efficiency ratio – Noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net operating revenues that are absorbed by overhead expenses, so that a lower value indicates greater efficiency. Estimated insured deposits – in general, insured deposits are total domestic deposits minus estimated uninsured deposits. Beginning March 31, 2008, for institutions that file Call reports, insured deposits are total assessable deposits minus estimated uninsured deposits. Beginning September 30, 2009, insured deposits include deposits in accounts of $100,000 to $250,000 that are covered by a temporary increase in the FDIC’s standard maximum deposit insurance amount (SMDIA). Failed/assisted institutions – an institution fails when regulators take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or another healthy institution. This action may require the FDIC to provide funds to cover losses. An institution is defined as “assisted” when the institution remains open and receives assistance in order to continue operating. Fair Value – the valuation of various assets and liabilities on the balance sheet—including trading assets and liabilities, available-for-sale securities, loans held for sale, assets and liabilities accounted for under the fair value option, and fore- All other assets – total cash, balances due from depository institutions, premises, fixed assets, direct investments in real estate, investment in unconsolidated subsidiaries, customers’ liability on acceptances outstanding, assets held in trading accounts, federal funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid deposit insurance assessments, and other assets. All other liabilities – bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities. Assessment base – assessable deposits consist of DIF deposits (deposits insured by the FDIC Deposit Insurance Fund) in banks’ domestic offices with certain adjustments). Assets securitized and sold – total outstanding principal balance of assets securitized and sold with servicing retained or other seller- provided credit enhancements. Capital Purchase Program (CPP) – As announced in October 2008 under the TARP, the Treasury Department purchase of noncumulative perpetual preferred stock and related warrants that is treated as Tier 1 capital for regulatory capital purposes is included in “Total equity capital.” Such warrants to purchase common stock or noncumulative preferred stock issued by publicly-traded banks are reflected as well in “Surplus.” Warrants to purchase common stock or noncumulative preferred stock of not-publicly-traded bank stock classified in a bank’s balance sheet as “Other liabilities.” Construction and development loans – includes loans for all property types under construction, as well as loans for land acquisition and development. Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated subsidiaries, less goodwill and other ineligible intangible assets. The amount of eligible intangibles (including servicing rights) included in core capital is limited in accordance with supervisory capital regulations. Cost of funding earning assets – total interest expense paid on deposits and other borrowed money as a percentage of average earning assets. Credit enhancements – techniques whereby a company attempts to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be associated with a given issuance. Deposit Insurance Fund (DIF) – The Bank (BIF) and Savings Association (SAIF) Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform Act to form the DIF. Derivatives notional amount – The notional, or contractual, amounts of derivatives represent the level of involvement in the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent the amounts used to calculate contractual cash flows to be exchanged. Derivatives credit equivalent amount – the fair value of the derivative plus an additional amount for potential future credit exposure based on the notional amount, the remaining maturity and type of the contract. FDIC Quarterly 24 2010, Volume 4, No. 2 Quarterly Banking Profile closed assets—involves the use of fair values. During periods of market stress, the fair values of some financial instruments and nonfinancial assets may decline. FHLB advances – all borrowings by FDIC insured institutions from the Federal Home Loan Bank System (FHLB), as reported by Call Report filers and by TFR filers. Goodwill and other intangibles – intangible assets include servicing rights, purchased credit card relationships, and other identifiable intangible assets. Goodwill is the excess of the purchase price over the fair market value of the net assets acquired, less subsequent impairment adjustments. Other intangible assets are recorded at fair value, less subsequent quarterly amortization and impairment adjustments. Loans secured by real estate – includes home equity loans, junior liens secured by 1-4 family residential properties, and all other loans secured by real estate. Loans to individuals – includes outstanding credit card balances and other secured and unsecured consumer loans. Long-term assets (5+ years) – loans and debt securities with remaining maturities or repricing intervals of over five years. Maximum credit exposure – the maximum contractual credit exposure remaining under recourse arrangements and other seller-provided credit enhancements provided by the reporting bank to securitizations. Mortgage-backed securities – certificates of participation in pools of residential mortgages and collateralized mortgage obligations issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below. Net charge-offs – total loans and leases charged off (removed from balance sheet because of uncollectibility), less amounts recovered on loans and leases previously charged off. Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to depositors and other creditors, expressed as a percentage of average earning assets. No adjustments are made for interest income that is tax exempt. Net loans to total assets – loans and lease financing receivables, net of unearned income, allowance and reserves, as a percent of total assets on a consolidated basis. Net operating income – income excluding discretionary trans actions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from operating income have been adjusted to exclude the portion applicable to securities gains (or losses). Noncurrent assets – the sum of loans, leases, debt securities, and other assets that are 90 days or more past due, or in nonaccrual status. Noncurrent loans & leases – the sum of loans and leases 90 days or more past due, and loans and leases in nonaccrual status. Number of institutions reporting – the number of institutions that actually filed a financial report. New charters – insured institutions filing quarterly financial reports for the first time. Other borrowed funds – federal funds purchased, securities sold with agreements to repurchase, demand notes issued to the U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and FDIC Quarterly trading liabilities, less revaluation losses on assets held in trading accounts. Other real estate owned – primarily foreclosed property. Direct and indirect investments in real estate ventures are excluded. The amount is reflected net of valuation allowances. For institutions that file a Thrift Financial Report (TFR), the valuation allowance subtracted also includes allowances for other repossessed assets. Also, for TFR filers the components of other real estate owned are reported gross of valuation allowances. Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their losses) compared to the same period a year earlier. “Problem” institutions – federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. “Problem” institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either a “4” or “5.” The number and assets of “problem” institutions are based on FDIC composite ratings. Prior to March 31, 2008, for institutions whose primary federal regulator was the OTS, the OTS composite rating was used. Recourse – an arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank’s claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Reserves for losses – the allowance for loan and lease losses on a consolidated basis. Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. Excludes restructured loans and leases that are not in compliance with the modified terms. Retained earnings – net income less cash dividends on common and preferred stock for the reporting period. Return on assets – bank net income (including gains or losses on securities and extraordinary items) as a percentage of aver age total (consolidated) assets. The basic yardstick of bank profitability. Return on equity – bank net income (including gains or losses on securities and extraordinary items) as a percentage of average total equity capital. Risk-based capital groups – definition: (Percent) Well-capitalized Adequately capitalized Undercapitalized Significantly undercapitalized Critically undercapitalized Tier 1 Risk-Based Capital* Total Risk-Based Capital* Tier 1 Leverage Tangible Equity ≥10 and ≥6 and ≥5 – ≥8 ≥6 and and ≥4 ≥3 and and ≥4 ≥3 – – <6 or <3 or <3 – – – and >2 ≤2 * As a percentage of risk-weighted assets. 25 2010, Volume 4, No. 2 Risk Categories and Assessment Rate Schedule – The current risk categories became effective January 1, 2007. Capital ratios and supervisory ratings distinguish one risk category from another. The following table shows the relationship of risk categories (I, II, III, IV) to capital and supervisory groups as well as the initial base assessment rates (in basis points), effective April 1, 2009 for each risk category. Supervisory Group A generally includes institutions with CAMELS composite ratings of 1 or 2; Supervisory Group B generally includes institutions with a CAMELS composite rating of 3; and Supervisory Group C generally includes institutions with CAMELS composite ratings of 4 or 5. For purposes of riskbased assessment capital groups, undercapitalized includes institutions that are significantly or critically undercapitalized. Total Base Assessment Rates* Supervisory Group Capital Category 1. Well Capitalized 2. Adequately Capitalized 3. Undercapitalized A I 12–16 bps II 22 bps B C II 22 bps III 32 bps III 32 bps Risk Category II Risk Category III Risk Category IV Initial base assessment rate 12–16 22 32 45 Unsecured debt adjustment -5 – 0 -5–0 -5 – 0 -5– 0 Secured liability adjustment 0 – 8 0 –11 0 –16 0 –22.5 Brokered deposit adjustment – 0 –10 0 –10 0 –10 Total base assessment rate 7–24.0 17–43.0 27–58.0 40–77.5 *All amounts for all risk categories are in basis points annually. Total base rates that are not the minimum or maximum rate will vary between these rates. Beginning in 2007, each institution is assigned a risk-based rate for a quarterly assessment period near the end of the quarter following the assessment period. Payment is generally due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are effective for assessment purposes as of the examination transmittal date. For institutions with long-term debt issuer ratings, changes in ratings are effective for assessment purposes as of the date the change was announced. Special Assessment – On May 22, 2009, the FDIC board approved a final rule that imposed a 5 basis point special assessment as of June 30, 2009. The special assessment was levied on each insured depository institution’s assets minus its Tier 1 capital as reported in its report of condition as of June 30, 2009. The special assessment will be collected September 30, 2009, at the same time that the risk-based assessment for the second quarter of 2009 is collected. The special assessment for any institution was capped at 10 basis points of the institution’s assessment base for the second quarter of 2009 risk-based assessment. Prepaid Deposit Insurance Assessments – On November 12, 2009, the FDIC Board of Directors adopted a final rule requiring insured depository institutions (except those that are exempted) to prepay their quarterly risk-based deposit insurance assessments for the fourth quarter of 2009, and for all of 2010, 2011, and 2012, on December 30, 2009. Each institution’s regular risk-based deposit insurance assessment for the third quarter of 2009, which is paid in arrears, also is payable on December 30, 2009. Risk-weighted assets – assets adjusted for risk-based capital definitions which include on-balance-sheet as well as off- balance-sheet items multiplied by risk-weights that range from zero to 200 percent. A conversion factor is used to assign a balance sheet equivalent amount for selected off-balancesheet accounts. Securities – excludes securities held in trading accounts. Banks’ securities portfolios consist of securities designated as “held-to-maturity,” which are reported at amortized cost (book value), and securities designated as “available-for-sale,” reported at fair (market) value. IV 45 bps Effective April 1, 2009, the initial base assessment rates are 12 to 45 basis points. An institution’s total assessment rate may be less than or greater than its initial base assessment rate as a result of additional risk adjustments. The base assessment rates for most institutions in Risk Category I are based on a combination of financial ratios and CAMELS component ratings (the financial ratios method). For large institutions in Risk Category I (generally those with at least $10 billion in assets) that have long-term debt issuer ratings, assessment rates are determined by equally weighting the institution’s CAMELS component ratings, long-term debt issuer ratings, and the financial ratios method assessment rate. For all large Risk Category I institutions, additional risk factors are considered to determine whether assessment rates should be adjusted. This additional information includes market data, financial performance measures, considerations of the ability of an institution to withstand financial stress, and loss severity indicators. Any adjustment is limited to no more than one basis point. Effective April 1, 2009, the FDIC introduced three possible adjustments to an institution’s initial base assessment rate: (1) a decrease of up to 5 basis points for long-term unsecured debt and, for small institutions, a portion of Tier 1 capital; (2) an increase not to exceed 50 percent of an institution’s assessment rate before the increase for secured liabilities in excess of 25 percent of domestic deposits; and (3) for nonRisk Category I institutions, an increase not to exceed 10 basis points for brokered deposits in excess of 10 percent of domestic deposits. After applying all possible adjustments, minimum and maximum total base assessment rates for each risk category are as follows: FDIC Quarterly Risk Category I 26 2010, Volume 4, No. 2 Quarterly Banking Profile Securities gains (losses) – realized gains (losses) on held-to- maturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers also include gains (losses) on the sales of assets held for sale. Seller’s interest in institution’s own securitizations – the reporting bank’s ownership interest in loans and other assets that have been securitized, except an interest that is a form of recourse or other seller-provided credit enhancement. Seller’s interests differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is generally equal to the total principal amount of the pool of assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the form of securities issued to investors. Subchapter S Corporation – a Subchapter S corporation is treated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any federal income taxes at the corporate level. This can have the effect of reducing institutions’ reported taxes and increasing their after-tax earnings. Temporary Liquidity Guarantee Program (TLGP) – was approved by the FDIC Board on October 13, 2008. The TLGP was designed to help relieve the crisis in the credit markets by giving banks access to liquidity during a time of global financial distress. Participation in the TLGP is voluntary. The TLGP has two components: Transaction Account Guarantee Program (TAGP) provides a full guarantee of non-interest-bearing deposit transaction accounts above $250,000, at depository institutions that elected to participate in the program. On August 26, 2009, the FDIC Board voted to extend the TAGP six months beyond its original expiration date to June 30, 2010. (On April 13, 2010, the FDIC Board adopted an interim rule extending the TAG program for six months through December 31, 2010, with a possibility of an additional 12-month extension, through December 31, 2011.) Debt Guarantee Program (DGP) provides a full guarantee of senior unsecured debt1 issued by eligible institutions after October 14, 2008. Initially, debt issued before June 30, 2009, and maturing on or before June 30, 2012, could be guaranteed. On March 17, 2009, the deadline for issuance under the program was extended to October 31, 2009, and the expiration of the guarantee was set at the earlier of maturity of the debt or December 31, 2012. Institutions eligible for participation in the debt guarantee program include insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of an insured depository institution that the FDIC designates as eligible entities. The FDIC Board adopted a final rule on October 20, 2009, that established a limited six-month emergency guarantee facility upon expiration of the DGP. Trust assets – market value, or other reasonably available value of fiduciary and related assets, to include marketable securities, and other financial and physical assets. Common physical assets held in fiduciary accounts include real estate, equipment, collectibles, and household goods. Such fiduciary assets are not included in the assets of the financial institution. Unearned income & contra accounts – unearned income for Call Report filers only. Unused loan commitments – includes credit card lines, home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused commitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for sale, which are accounted for as derivatives on the balance sheet.) Volatile liabilities – the sum of large-denomination time deposits, foreign-office deposits, federal funds purchased, securities sold under agreements to repurchase, and other borrowings. Yield on earning assets – total interest, dividend, and fee income earned on loans and investments as a percentage of average earning assets. Senior unsecured debt generally includes term Federal funds purchased, promissory notes, commercial paper, unsubordinated unsecured notes, certificates of deposit (CDs) standing to the credit of a bank, and U.S. dollar denominated bank deposits owed to an insured depository institution. 1 FDIC Quarterly 27 2010, Volume 4, No. 2