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FDIC Quarterly Quarterly Banking Profile: First Quarter 2015 Highlights: ■ Industry Net Income Rises 6.9 Percent to $39.8 Billion ■ Net Operating Revenue Is Up 2.6 Percent Year Over Year ■ Earnings for Community Banks Grew 16 Percent From First Quarter 2014 ■ Net Interest Income and Noninterest Income for Community Banks Increased From the Year-Ago Period ■ DIF Reserve Ratio Rises 2 Basis Points to 1.03 Percent ■ Changes to Risk-Based Assessments Go Into Effect 2015, Volume 9, Number 2 The FDIC Quarterly is published by the Division of Insurance and Research of the Federal Deposit Insurance Corporation and contains a comprehensive summary of the most current financial results for the banking industry. Feature articles appearing in the FDIC Quarterly range from timely analysis of economic and banking trends at the national and regional level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and the development of regulatory policy. Single copy subscriptions of the FDIC Quarterly can be obtained through the FDIC Public Information Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. E-mail requests should be sent to publicinfo@fdic.gov. Change of address information also should be submitted to the Public Information Center. The FDIC Quarterly is available online by visiting the FDIC website at www.fdic.gov. To receive e-mail notification of the electronic release of the FDIC Quarterly and the individual feature articles, subscribe at www.fdic.gov/about/subscriptions/index.html. Chairman Martin J. Gruenberg Director, Division of Insurance and Research Diane Ellis Executive Editor Richard A. Brown Managing Editors Matthew Green Jack Reidhill Philip A. Shively Editors Clayton Boyce Peggi Gill Frank Solomon Publication Manager Lynne Montgomery Media Inquiries (202) 898-6993 FDIC Quarterly 2015, Volume 9, Number 2 Quarterly Banking Profile: First Quarter 2015 FDIC-insured institutions reported aggregate net income of $39.8 billion in the first quarter of 2015, up $2.6 billion (6.9 percent) from a year earlier. The increase in earnings was mainly attributable to a $4.3 billion rise in net operating revenue (net interest income plus total noninterest income). Of the 6,419 insured institutions in the first quarter of 2015, nearly two-thirds (62.7 percent) reported year-overyear growth in quarterly earnings. The proportion of banks that were unprofitable during the first quarter fell to 5.6 percent from 7.4 percent a year earlier. See page 1. Community Bank Performance Community banks—which represent 93 percent of insured institutions—reported net income of $4.9 billion in the first quarter, up $690.9 million (16.4 percent) from one year earlier. The increase was driven by higher net interest income and noninterest income, coupled with lower loan-loss provisions. In the first quarter of 2015, loan balances at community banks grew at a faster pace than in the industry, asset quality indicators continued to show improvement, and community banks accounted for 44 percent of small loans to businesses. See page 15. Insurance Fund Indicators Estimated insured deposits increased by 2.3 percent in the first quarter of 2015 and increased by 3.6 percent over the past four quarters. The DIF reserve ratio rose to 1.03 percent on March 31, 2015, up from 1.01 percent at December 31, 2014, and 0.80 percent at March 31, 2014. Four FDIC-insured institutions failed during the quarter. See page 23. The views expressed are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited. Please provide the FDIC’s Division of Insurance and Research with a copy of any publications containing reprinted material. Quarterly Banking Profile First Quarter 2015 INSURED INSTITUTION PERFORMANCE Industry Net Income Rises 6.9 Percent to $39.8 Billion Net Operating Revenue Is Up 2.6 Percent Year Over Year Average Net Interest Margin Falls to 3.02 Percent Community Bank Earnings Growth Outpaces Industry (see page 15) “Problem List” Shrinks From 291 Banks to 253 ■ ■ ■ ■ ■ higher, while noninterest income from the sale, securitization, and servicing of 1-to-4 family residential real estate loans was up $545 million (15.6 percent) from the year-earlier quarter. A majority of banks— 57.3 percent—reported year-over-year growth in noninterest income. Earnings Growth Is Broad-Based Rising revenues helped lift the quarterly net income of FDIC-insured institutions to $39.8 billion in first quarter 2015. This is $2.6 billion (6.9 percent) more than the industry earned in first quarter 2014. The improvement in net income was attributable to a $4.3 billion (2.6 percent) increase in net operating revenue (the sum of net interest income and total noninterest income). Almost two out of every three banks (62.7 percent) reported higher profits than the year before, while only 5.6 percent were unprofitable. This is the lowest percentage of unprofitable institutions since second quarter 2005. The average return on assets (ROA) rose slightly to 1.02 percent from 1.01 percent in first quarter 2014. Margins Remain Under Pressure Net interest income rose to $105.7 billion in the first quarter, up $1.5 billion (1.5 percent) from the year before. Total interest income was $1.2 billion (1 percent) higher, while total interest expense was $343 million (2.9 percent) lower. The average net interest margin (NIM) fell to 3.02 percent, from 3.16 percent a year earlier, as higher-yielding assets matured and were replaced by lower-yielding investments in a low-interest-rate environment. Fewer than half of all banks—43.2 percent—reported year-overyear improvement in their quarterly NIMs. Trading Income Registers Strong Growth Noninterest income totaled $62.7 billion, an increase of $2.8 billion (4.6 percent) compared with first quarter 2014. Trading revenue was $1.5 billion (23.9 percent) Chart 1 Chart 2 Unprofitable Institutions and Institutions With Increased Earnings Quarterly Net Income Billions of Dollars $50 All FDIC-Insured Institutions $40 35.2 28.7 28.5 $30 $20 17.4 $10 70 Percentage of Institutions With Year-Over-Year Quarterly Income Growth 60 25.3 50 40 30 -1.7 -6.1 -12.6 -$20 40.4 39.8 39.8 40.1 38.2 38.4 37.5 37.3 36.5 36.1 34.8 34.4 34.5 2.1 $0 -$10 23.8 21.4 20.9 Percentage of All FDIC-Insured Institutions 80 20 Securities and Other Gains/Losses, Net Net Operating Income 10 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2009 2010 2011 2012 2013 2014 2015 0 2006 2007 Source: FDIC. Source: FDIC. FDIC Quarterly Percentage of Institutions With Quarterly Losses 1 2008 2009 2010 2011 2012 2013 2014 2015 2015, Volume 9, No. 2 from 1.96 percent to 1.83 percent, a seven-year low. Noncurrent balances fell in all major loan categories except loans to commercial and industrial (C&I) borrowers. Noncurrent C&I loans rose by $998 million (11.7 percent), and the noncurrent rate on C&I loans rose from 0.50 percent to 0.54 percent. These are the two lowest noncurrent rates for C&I loans in the 31 years for which data are available. At the end of the quarter, $54.5 billion (36.6 percent) of total noncurrent loan balances carried U.S. government guarantees or were covered by loss-sharing agreements with the FDIC. Loan Losses Improve Across All Major Loan Categories For a third consecutive quarter, loan-loss provisions posted a year-over-year increase. Banks set aside $8.4 billion in loss provisions, an increase of $756 million (9.9 percent) from first quarter 2014. This is the largest quarterly total for loss provisions since second quarter 2013. Net charge-offs fell, year over year, for the 19th quarter in a row. Banks charged off $9 billion in uncollectible loans, a decline of $1.4 billion (13.2 percent) compared with first quarter 2014. The annualized net charge-off rate fell to 0.43 percent from 0.52 percent the year before. This is the lowest quarterly charge-off rate since third quarter 2006. Charge-offs were lower across all major loan categories. The largest year-over-year declines occurred in home equity lines of credit (down $352 million, 38.8 percent) and credit cards (down $293 million, 5.3 percent). Reserve Reductions Diminish Banks reduced their reserves for loan losses by $1.6 billion (1.3 percent) during the quarter. This is the 20th consecutive quarter that the industry’s loss reserves have declined, but it is the smallest quarterly decline during this period. Reserves totaled $121 billion at the end of the quarter, down $142.1 billion (54 percent) from the peak level of five years ago. The average ratio of reserves-to-total loans and leases fell from 1.48 percent to 1.45 percent, the lowest level since fourth quarter 2007. The “coverage ratio” of reserves-tononcurrent loans improved for a 10th consecutive quarter, rising from 75.4 percent to 79.1 percent as a result of the decline in noncurrent loan balances. Noncurrent Loan Rate Continues to Fall Noncurrent loan balances declined for a 20th consecutive quarter. The amount of loans that were noncurrent (90 days or more past due, or in nonaccrual status) fell by $9.7 billion (6 percent) in the first three months of 2015. The average noncurrent loan rate declined Chart 3 Chart 4 Quarterly Noninterest Income From Sale, Securitization, and Servicing of 1-to-4 Family Residential Mortgage Loans* Quarterly Net Operating Revenue Billions of Dollars $200 All FDIC-Insured Institutions Billions of Dollars $10 8.8 $9 8.0 $8 7.3 $7 $6 $5 $4 $3 $2 $1 $0 1 2 3 2012 $180 $160 $140 Quarterly Noninterest Income $120 $100 $80 $60 Quarterly Net Interest Income $40 $20 $0 123412341234123412341234123412341 2007 2008 2009 2010 2011 2012 2013 2014 2015 7.5 4.7 5.3 5.0 4.8 3.7 3.5 4 1 2 3 2013 4 1 2 3 2014 4 4.0 1 2015 Source: FDIC. *Insured institutions with assets greater than $1 billion, and institutions with more than $10 million in originations, purchases, or mortgages held for sale. Source: FDIC. FDIC Quarterly 8.6 7.4 2 2015, Volume 9, No. 2 Quarterly Banking Profile New Capital Rules Take Effect Loans Post a $52.5 Billion Increase Equity capital increased by $30.7 billion (1.8 percent) during the quarter, and the average equity-to-assets ratio rose from 11.15 percent to 11.18 percent. Retained earnings added $17.5 billion to equity, $266 million (1.5 percent) more than the year before. New regulatory capital rules that took effect in the first quarter added a new regulatory capital element, the Common Equity Tier 1 (CET1) capital ratio, to the Prompt Corrective Action (PCA) capital requirements. For 96.8 percent of all institutions, the CET1 capital ratio was identical to their Tier 1 risk-based capital ratio. The average CET1 ratio for the industry at the end of the quarter was 12.65 percent, compared with an average of 12.75 percent for the Tier 1 riskbased capital ratio. The new rules also added elements of accumulated other comprehensive income (AOCI) to the calculation of Tier 1 capital, unless institutions elected to opt out of the inclusion. More than 99 percent of banks eligible for the election chose to opt out. Total assets of insured institutions increased by $224.3 billion (1.4 percent) to $15.8 trillion during the first three months of 2015. Total loan and lease balances rose by $52.5 billion (0.6 percent), as C&I loans increased by $32.4 billion (1.9 percent), real estate loans secured by nonfarm nonresidential real estate properties increased by $13.4 billion (1.2 percent), and residential mortgage loans rose by $13.2 billion (0.7 percent). Credit card balances and agricultural production loans posted seasonal declines of $38.5 billion (5.4 percent) and $6.5 billion (8.3 percent), respectively, and home equity lines of credit (HELOCs) fell by $8.4 billion (1.7 percent). This is the 24th consecutive quarterly decline for HELOC balances. Banks’ securities holdings increased by $48.4 billion (1.5 percent), as mortgage-backed securities rose by $45.2 billion (2.6 percent). Securities designated as held to maturity increased by $42.4 billion (6.6 percent), and the amount of securities maturing or repricing in 15 years or more rose by $46.8 billion (6.5 percent). Banks increased their balances at Federal Reserve institutions by $65.1 billion (4.7 percent) during the quarter, to $1.4 trillion, or 9.2 percent of total industry assets. Chart 5 Chart 6 Year-Over-Year Change in Quarterly Loan-Loss Provisions Noncurrent Loan Rate and Quarterly Net Charge-Off Rate Billions of Dollars $5 Percent 6 All FDIC-Insured Institutions 0.8 $0 5 All FDIC-Insured Institutions Noncurrent Loan Rate -$5 -$10 4 -$15 3 -$20 2 -$25 -$30 -$35 1 -30.7 1 2 3 2011 Source: FDIC. FDIC Quarterly Quarterly Net Charge-Off Rate 4 1 2 3 2012 4 1 2 3 2013 4 1 2 3 2014 4 1 2015 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: FDIC. 3 2015, Volume 9, No. 2 Large Denomination Deposits Post Strong Growth Problem List Is at a Six-Year Low Total deposits increased by $194.4 billion (1.7 percent), as deposits in foreign offices declined by $15.8 billion (1.1 percent), and domestic office deposits rose by $210.2 billion (2 percent). Deposits in accounts of less than $250,000, which typically experience strong growth in first quarters, increased by $110.4 billion (2.1 percent). Balances in larger-denomination accounts, which usually have little or no growth in first quarters, rose by $104.1 billion (2 percent). Nondeposit liabilities declined by $688 million (0.03 percent), as banks reduced their Federal Home Loan Bank advances by $31.2 billion (6.7 percent). The number of insured commercial banks and savings institutions filing quarterly financial reports declined from 6,509 to 6,419 in the first quarter. Mergers absorbed 86 institutions, while four insured institutions failed. For a fifth consecutive quarter, no new charters were added. The number of full-time equivalent employees declined by 5,349 to 2,042,596. The number of institutions on the FDIC’s “Problem List” declined for the 16th consecutive quarter, falling from 291 to 253. Total assets of problem institutions fell from $86.7 billion to $60.3 billion. Author: Chart 7 Chart 8 Quarterly Change in Loan Balances Number and Assets of Banks on the “Problem List” All FDIC-Insured Institutions Assets (Billions of Dollars) $500 Billions of Dollars $300 237 $250 221* 203 178 $200 189 149 134 $150 118 102 91 $100 74 70 65 67 61 53 43 38 51 28 $50 24 $0 -6 -7 -14 -$50 -37 -63 -$100 -107 -116 -109 -126 -$150 -133 -140 -$200 -210 -$250 $450 Number of Problem Banks Number 1,000 900 $400 800 $350 700 $300 600 $250 500 $200 400 300 $150 $100 1 2 3 41 2 3 4 1 2 3 41 2 3 4 1 2 3 4 12 3 4 1 2 3 4 12 3 4 1 2014 2015 2007 2008 2009 2010 2011 2012 2013 $50 Source: FDIC. *FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitized loan balances back onto banks’ balance sheets in the first quarter of 2010. Although the total amount consolidated cannot be precisely quantified, the industry would have reported a decline in loan balances for the quarter absent this change in accounting standards. FDIC Quarterly Ross Waldrop, Senior Banking Analyst Division of Insurance and Research (202) 898-3951 253 Problem Bank Assets 60 200 100 0 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: FDIC. 4 2015, Volume 9, 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�������������������������������������������������������������������������������������� 2015** 1.02 9.12 9.48 1.10 0.43 5.82 3.02 6.12 6,419 5,570 849 5.59 253 $60 4 0 2014** 1.01 8.99 9.53 1.51 0.52 3.37 3.16 -5.92 6,730 5,810 920 7.40 411 $126 5 0 2014 1.01 9.01 9.45 1.20 0.49 5.59 3.14 -0.70 6,509 5,643 866 6.16 291 $87 18 0 2013 1.07 9.54 9.40 1.63 0.69 1.94 3.26 12.83 6,812 5,877 935 8.15 467 $153 24 0 2012 1.00 8.91 9.15 2.20 1.10 4.03 3.42 17.78 7,083 6,097 986 11.00 651 $233 51 0 2011 0.88 7.79 9.07 2.61 1.55 4.30 3.60 43.58 7,357 6,292 1,065 16.23 813 $319 92 0 2010 0.65 5.85 8.89 3.11 2.55 1.77 3.76 1,594.54 7,658 6,531 1,127 22.15 884 $390 157 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 2015 6,419 2,042,596 4th Quarter 2014 6,509 2,047,945 1st Quarter 2014 6,730 2,058,878 %Change 14Q1-15Q1 -4.6 -0.8 $15,778,062 4,204,281 1,855,339 1,163,396 246,121 483,902 1,749,144 1,383,938 679,967 71,545 955,106 1,940 8,362,075 121,049 8,241,025 3,267,460 19,339 355,868 3,894,371 $15,553,765 4,170,826 1,842,134 1,150,046 238,583 492,326 1,716,785 1,418,253 718,469 78,029 927,666 1,993 8,309,566 122,616 8,186,950 3,219,064 21,987 360,190 3,765,574 $14,910,049 4,075,728 1,823,672 1,117,178 214,832 502,163 1,611,828 1,326,450 658,359 64,911 853,805 1,902 7,930,843 132,324 7,798,519 3,054,515 27,872 365,489 3,663,653 5.8 3.2 1.7 4.1 14.6 -3.6 8.5 4.3 3.3 10.2 11.9 2.0 5.4 -8.5 5.7 7.0 -30.6 -2.6 6.3 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������������������������������������������������������������������������������������������� 15,778,062 11,958,325 10,578,146 1,380,179 1,362,926 94,842 590,329 1,771,632 1,764,384 15,553,765 11,763,878 10,367,932 1,395,946 1,387,914 98,083 562,793 1,741,094 1,733,718 14,910,049 11,317,824 9,922,075 1,395,749 1,346,659 95,451 468,793 1,681,321 1,672,584 5.8 5.7 6.6 -1.1 1.2 -0.6 25.9 5.4 5.5 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��������������������������������������������������������������������������������������� Full Year INCOME DATA 2014 Total interest income������������������������������������������������������������������� $469,780 Total interest expense����������������������������������������������������������������� 47,128 Net interest income�������������������������������������������������������������� 422,653 Provision for loan and lease losses�������������������������������������������� 29,767 Total noninterest income������������������������������������������������������������� 247,899 Total noninterest expense����������������������������������������������������������� 422,770 Securities gains (losses)������������������������������������������������������������� 3,202 Applicable income taxes������������������������������������������������������������� 68,197 Extraordinary gains, net�������������������������������������������������������������� -117 Total net income (includes minority interests)��������������������� 152,903 Bank net income������������������������������������������������������������ 152,273 Net charge-offs���������������������������������������������������������������������������� 39,530 Cash dividends���������������������������������������������������������������������������� 90,227 Retained earnings����������������������������������������������������������������������� 62,045 Net operating income����������������������������������������������������������� 150,739 61,386 152,981 79,503 1,773,834 14,102,858 433,044 6,575,698 18,087,298 943,850 205,900,437 Full Year 2013 $470,432 53,286 417,146 32,442 252,518 416,748 4,473 70,018 240 155,170 154,385 53,561 93,162 61,223 151,804 (dollar figures in millions) FDIC Quarterly 69,984 162,664 84,055 1,728,586 13,882,597 464,279 6,478,520 18,355,578 972,452 221,924,279 1st Quarter %Change 2015 -0.1 $117,303 -11.6 11,595 1.3 105,708 -8.3 8,368 -1.8 62,656 1.4 103,499 -28.4 1,311 -2.6 17,837 N/M 22 -1.5 39,994 -1.4 39,841 -26.2 9,010 -3.2 22,307 1.3 17,534 -0.7 39,044 69,536 195,242 96,898 1,690,541 13,276,200 392,000 6,218,980 20,181,237 720,668 231,756,607 1st Quarter 2014 $116,129 11,938 104,191 7,612 59,893 102,288 827 17,629 75 37,457 37,264 10,377 19,996 17,268 36,792 -11.7 -21.6 -18.0 4.9 6.2 10.5 5.7 -10.4 31.0 -11.2 %Change 14Q1-15Q1 1.0 -2.9 1.5 9.9 4.6 1.2 58.7 1.2 -70.9 6.8 6.9 -13.2 11.6 1.5 6.1 N/M - Not Meaningful 5 2015, Volume 9, No. 2 TABLE III-A. First Quarter 2015, All FDIC-Insured Institutions Asset Concentration Groups* FIRST QUARTER All Insured (The way it is...) Institutions Number of institutions reporting����������������������� 6,419 Commercial banks������������������������������������� 5,570 Savings institutions����������������������������������� 849 Total assets (in billions)������������������������������������ $15,778.1 Commercial banks������������������������������������� 14,736.6 Savings institutions����������������������������������� 1,041.4 Total deposits (in billions)��������������������������������� 11,958.3 Commercial banks������������������������������������� 11,155.5 Savings institutions����������������������������������� 802.8 Bank net income (in millions)��������������������������� 39,841 Commercial banks������������������������������������� 36,961 Savings institutions����������������������������������� 2,880 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 Card International Agricultural Commercial Banks Banks Banks Lenders 15 4 1,464 3,151 12 4 1,447 2,854 3 0 17 297 $489.9 $3,855.3 $254.9 $4,927.0 391.8 3,855.3 249.9 4,574.9 98.1 0.0 5.0 352.0 272.4 2,724.2 212.9 3,855.4 200.7 2,724.2 209.9 3,597.0 71.7 0.0 3.0 258.5 3,703 8,637 746 11,115 2,791 8,637 721 10,350 912 0 24 764 Mortgage Consumer Lenders Lenders 556 58 169 42 387 16 $461.7 $181.7 170.6 89.1 291.0 92.6 341.9 154.1 129.6 75.6 212.4 78.6 858 459 444 257 414 202 Other Specialized All Other <$1 Billion <$1 Billion 387 713 351 628 36 85 $63.6 $132.3 58.9 113.0 4.7 19.3 51.8 111.6 48.5 95.9 3.3 15.7 342 295 190 271 152 25 All Other >$1 Billion 71 63 8 $5,411.8 5,233.2 178.6 4,233.9 4,074.2 159.7 13,687 13,301 386 3.36 0.33 3.02 1.60 2.65 0.21 1.00 1.47 1.02 9.12 0.43 10.47 0.88 9.59 4.49 6.29 2.34 3.04 4.71 3.04 19.98 2.80 2.58 0.32 2.26 1.83 2.39 0.16 0.88 1.28 0.90 9.50 0.63 3.99 0.46 3.53 0.63 2.49 0.08 1.14 1.37 1.17 10.34 0.02 3.66 0.39 3.27 1.18 2.74 0.11 0.90 1.30 0.91 7.60 0.15 3.26 0.66 2.60 0.83 2.12 0.05 0.72 1.16 0.76 6.49 0.15 3.98 0.45 3.53 1.27 2.59 0.45 1.01 1.64 1.02 10.31 0.60 2.97 0.33 2.64 5.63 5.11 0.04 2.12 2.96 2.18 14.84 0.13 3.88 0.42 3.46 0.83 2.89 0.07 0.86 1.11 0.90 7.71 0.14 2.89 0.19 2.70 1.66 2.43 0.17 1.00 1.49 1.02 9.11 0.41 92.88 60.62 5.59 62.70 107.07 46.43 0.00 66.67 73.40 62.23 0.00 100.00 516.88 63.43 2.46 61.07 108.52 65.69 5.97 68.04 53.40 64.24 8.27 51.26 105.14 54.34 8.62 68.97 123.36 63.33 9.56 50.65 94.57 71.78 6.31 58.20 85.46 58.59 2.82 52.11 89.38 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 ���������������������������� Common equity tier 1 capital 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�������������������� 92.57 87.27 93.02 90.35 94.48 95.53 91.49 92.54 88.81 1.45 79.13 3.28 301.94 1.77 82.83 1.47 153.51 1.24 103.79 1.10 39.47 1.15 78.66 1.80 109.74 1.42 86.65 1.34 52.20 1.10 11.18 9.48 12.65 12.75 14.26 68.91 52.23 67.04 0.83 15.30 12.59 12.86 12.98 15.51 133.00 73.97 54.49 0.78 9.52 8.32 12.40 12.42 13.75 47.51 33.57 45.51 0.80 11.45 10.60 14.82 14.83 15.93 74.24 62.02 83.54 1.06 11.98 10.22 12.41 12.56 13.99 86.31 67.53 77.77 1.95 11.34 11.22 21.44 21.47 22.47 81.08 60.05 74.05 1.11 9.93 9.96 13.19 13.84 14.65 82.80 70.25 84.82 0.70 14.68 13.79 31.02 31.06 32.19 33.12 27.00 80.58 1.31 11.71 11.34 19.57 19.60 20.73 63.78 53.76 84.29 1.33 11.23 9.04 12.11 12.19 13.86 61.54 48.15 71.19 Structural Changes New reporters�������������������������������������������� Institutions absorbed by mergers������������� Failed institutions�������������������������������������� 0 86 4 0 0 0 0 0 0 0 9 0 0 64 3 0 1 0 0 0 0 0 1 0 0 9 1 0 2 0 PRIOR FIRST QUARTERS (The way it was...) Number of institutions������������������������������2014 ��������������������������������������2012 ��������������������������������������2010 6,730 7,308 7,934 16 18 21 4 5 4 1,480 1,492 1,553 3,324 3,679 4,358 563 717 745 54 52 75 444 427 303 783 851 813 62 67 62 Total assets (in billions)����������������������������2014 ��������������������������������������2012 ��������������������������������������2010 $14,910.1 13,925.4 13,336.0 $592.3 559.2 725.0 $3,723.9 3,660.4 3,157.3 $244.9 212.6 181.1 $4,977.4 4,068.3 4,497.8 $575.5 825.1 776.9 $164.1 98.5 95.0 $70.2 67.6 40.7 $141.2 152.6 126.6 $4,420.5 4,281.2 3,735.7 Return on assets (%)��������������������������������2014 ��������������������������������������2012 ��������������������������������������2010 1.01 1.00 0.53 3.48 3.33 0.70 0.77 0.80 0.75 1.11 1.27 0.95 0.95 0.84 0.16 0.84 0.82 0.78 1.02 1.78 1.41 1.85 1.71 1.20 0.82 0.99 0.86 0.94 1.01 0.64 Net charge-offs to loans & leases (%)�����2014 ��������������������������������������2012 ��������������������������������������2010 0.52 1.16 2.88 3.03 4.04 14.26 0.72 1.48 2.75 0.07 0.17 0.45 0.27 0.77 1.89 0.24 0.96 1.20 0.72 1.55 2.69 0.11 0.26 0.54 0.17 0.33 0.44 0.34 0.99 2.29 Noncurrent assets plus OREO to assets (%)������������������������������2014 ��������������������������������������2012 ��������������������������������������2010 1.51 2.53 3.45 0.87 1.29 2.77 0.98 1.55 2.64 0.96 1.40 1.66 1.57 2.89 4.02 1.78 2.38 3.14 1.15 1.17 1.29 0.87 1.16 0.70 1.57 1.72 1.54 1.99 3.36 3.87 Equity capital ratio (%)�����������������������������2014 ��������������������������������������2012 ��������������������������������������2010 11.22 11.26 10.79 14.75 15.16 13.47 9.34 9.13 8.77 11.06 11.28 11.23 11.92 11.66 10.76 11.69 10.65 9.76 9.64 9.56 10.52 13.54 13.79 16.99 11.56 11.23 11.20 11.49 12.32 12.15 * See Table V-A (page 10) for explanations. Note: Blue font identifies data that are also presented in the prior quarters’ data at the bottom of the table. FDIC Quarterly 6 2015, Volume 9, No. 2 Quarterly Banking Profile TABLE III-A. First Quarter 2015, All FDIC-Insured Institutions Asset Size Distribution FIRST QUARTER All Insured (The way it is...) Institutions Number of institutions reporting����������������������������� 6,419 Commercial banks������������������������������������������� 5,570 Savings institutions����������������������������������������� 849 Total assets (in billions)������������������������������������������ $15,778.1 Commercial banks������������������������������������������� 14,736.6 Savings institutions����������������������������������������� 1,041.4 Total deposits (in billions)��������������������������������������� 11,958.3 Commercial banks������������������������������������������� 11,155.5 Savings institutions����������������������������������������� 802.8 Bank net income (in millions)��������������������������������� 39,841 Commercial banks������������������������������������������� 36,961 Savings institutions����������������������������������������� 2,880 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* Less Than $100 $1 Billion Greater $100 Million to to Than Million $1 Billion $10 Billion $10 Billion New York 1,830 3,895 582 112 796 1,607 3,389 480 94 445 223 506 102 18 351 $107.6 $1,219.7 $1,573.0 $12,877.8 $3,020.2 94.7 1,038.2 1,319.4 12,284.3 2,597.4 12.9 181.4 253.6 593.5 422.8 90.9 1,017.7 1,244.7 9,605.0 2,242.3 80.8 873.9 1,052.2 9,148.6 1,934.4 10.0 143.9 192.5 456.4 308.0 231 3,045 4,115 32,450 6,186 202 2,643 3,523 30,593 5,472 29 402 591 1,858 714 Atlanta 797 722 75 $3,273.1 3,185.5 87.5 2,532.5 2,466.1 66.3 7,916 7,777 139 Chicago 1,386 1,156 230 $3,633.2 3,524.4 108.8 2,632.4 2,551.3 81.1 8,449 8,142 306 Kansas City 1,585 1,518 67 $3,424.8 3,366.2 58.7 2,604.7 2,559.7 45.0 9,877 9,742 135 San Dallas Francisco 1,351 504 1,267 462 84 42 $923.7 $1,503.1 815.5 1,247.6 108.1 255.4 769.8 1,176.6 679.9 964.1 89.9 212.5 2,404 5,010 2,064 3,765 340 1,245 3.36 0.33 3.02 1.60 2.65 0.21 1.00 1.47 1.02 9.12 0.43 4.02 0.44 3.58 1.16 3.38 0.08 0.84 1.01 0.86 6.96 0.14 4.08 0.46 3.62 1.12 3.13 0.10 0.97 1.29 1.01 8.96 0.11 4.12 0.39 3.72 1.20 2.97 0.18 1.04 1.51 1.06 8.95 0.20 3.18 0.31 2.87 1.70 2.55 0.23 1.00 1.49 1.02 9.18 0.51 3.39 0.41 2.98 1.38 2.59 0.27 0.81 1.21 0.83 7.04 0.46 3.52 0.28 3.24 1.53 2.75 0.25 0.95 1.44 0.98 7.83 0.52 2.59 0.26 2.33 1.88 2.56 0.10 0.93 1.30 0.94 9.50 0.27 3.58 0.35 3.22 1.46 2.48 0.22 1.12 1.67 1.16 11.32 0.54 3.89 0.31 3.58 1.35 3.10 0.16 1.04 1.38 1.06 9.53 0.16 3.93 0.43 3.50 1.99 2.83 0.31 1.34 2.11 1.35 10.78 0.46 92.88 60.62 5.59 62.70 100.69 75.92 11.09 54.70 135.26 69.70 3.70 65.16 131.22 63.56 1.89 71.99 89.33 59.19 0.89 59.82 108.71 63.18 6.16 60.43 83.32 61.67 9.41 61.86 82.18 64.33 6.13 63.56 80.96 55.96 3.60 64.98 157.43 66.60 3.70 60.55 111.47 53.52 8.53 63.89 89.38 91.96 92.69 91.90 88.74 89.08 88.51 88.68 89.10 91.58 92.87 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 ����������������������������������� Common equity tier 1 capital 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��������������������������� 1.45 79.13 1.54 102.98 1.43 109.24 1.33 103.33 1.47 73.94 1.35 96.67 1.47 70.63 1.53 73.68 1.55 64.86 1.33 99.03 1.31 151.94 1.10 11.18 9.48 12.65 12.75 14.26 68.91 52.23 67.04 1.39 12.45 12.07 19.87 19.94 21.08 66.26 55.95 84.44 1.33 11.28 10.88 15.56 15.64 16.76 76.37 63.73 83.39 1.15 11.87 10.62 13.96 14.02 15.09 84.14 66.58 78.75 1.07 11.08 9.18 12.18 12.28 13.88 66.18 49.36 63.92 0.82 11.76 9.62 12.71 12.89 14.52 69.93 51.92 65.78 1.37 12.47 9.78 12.71 12.82 14.40 73.89 57.17 74.76 1.04 9.89 8.70 12.28 12.34 13.47 60.84 44.08 61.71 1.36 10.25 8.93 11.75 11.76 13.73 66.29 50.41 57.56 1.12 11.08 9.97 13.33 13.49 14.65 73.88 61.57 83.03 0.61 12.53 11.43 14.93 15.08 16.21 76.88 60.18 77.43 Structural Changes New reporters�������������������������������������������������� Institutions absorbed by mergers������������������� Failed institutions�������������������������������������������� 0 86 4 0 24 2 0 56 1 0 6 1 0 0 0 0 8 1 0 12 2 0 20 1 0 13 0 0 24 0 0 9 0 PRIOR FIRST QUARTERS (The way it was…) Number of institutions������������������������������������ 2014 ��������������������������������������������2012 ��������������������������������������������2010 6,730 7,308 7,934 2,005 2,368 2,779 4,054 4,276 4,475 564 557 575 107 107 105 831 906 977 852 945 1,103 1,457 1,544 1,637 1,641 1,767 1,868 1,414 1,533 1,654 535 613 695 Total assets (in billions)����������������������������������2014 ��������������������������������������������2012 ��������������������������������������������2010 $14,910.1 13,925.4 13,336.0 $118.1 137.4 155.4 $1,246.8 1,283.6 1,339.9 $1,493.8 1,419.8 1,477.9 $12,051.3 11,084.7 10,362.8 $2,963.4 2,823.3 2,671.7 $3,032.9 2,918.0 2,989.0 $3,416.9 3,207.9 2,978.4 $3,247.0 2,967.7 1,664.4 $883.0 831.1 786.3 $1,366.9 1,177.5 2,246.3 Return on assets (%)��������������������������������������2014 ��������������������������������������������2012 ��������������������������������������������2010 1.01 1.00 0.53 0.80 0.74 0.46 0.90 0.83 0.38 1.02 1.06 0.19 1.02 1.02 0.60 1.02 0.97 0.56 0.88 0.83 0.27 0.80 0.87 0.48 1.14 1.08 0.65 1.08 1.13 0.72 1.42 1.60 0.73 Net charge-offs to loans & leases (%)����������� 2014 ��������������������������������������������2012 ��������������������������������������������2010 0.52 1.16 2.88 0.19 0.38 0.65 0.18 0.58 0.88 0.25 0.78 1.77 0.62 1.32 3.46 0.75 1.32 4.10 0.47 1.28 2.73 0.38 0.90 2.35 0.61 1.44 3.27 0.21 0.57 1.23 0.50 0.89 2.59 Noncurrent assets plus OREO to assets (%)������������������������������������ 2014 ��������������������������������������������2012 ��������������������������������������������2010 1.51 2.53 3.45 1.71 2.26 2.32 1.74 2.88 3.39 1.75 3.06 3.70 1.45 2.43 3.43 1.08 1.70 2.46 2.05 3.74 4.18 1.35 2.28 3.23 1.86 2.70 4.79 1.46 2.44 3.19 0.85 1.85 3.02 Equity capital ratio (%)�����������������������������������2014 ��������������������������������������������2012 ��������������������������������������������2010 11.22 11.26 10.79 11.85 11.74 11.96 10.90 10.67 10.04 11.90 11.74 10.86 11.16 11.27 10.86 12.04 12.57 11.92 12.32 12.01 11.29 9.78 8.80 8.55 10.43 11.14 11.51 10.95 10.90 10.39 12.61 13.60 11.37 * See Table V-A (page 11) for explanations. Note: Blue font identifies data that are also presented in the prior quarters’ data at the bottom of the table. FDIC Quarterly 7 2015, Volume 9, No. 2 TABLE IV-A. Full Year 2014, All FDIC-Insured Institutions Asset Concentration Groups* FULL YEAR All Insured (The way it is...) Institutions Number of institutions reporting����������������������� 6,509 Commercial banks������������������������������������� 5,643 Savings institutions����������������������������������� 866 Total assets (in billions)������������������������������������ $15,553.8 Commercial banks������������������������������������� 14,493.8 Savings institutions����������������������������������� 1,059.9 Total deposits (in billions)��������������������������������� 11,763.9 Commercial banks������������������������������������� 10,953.3 Savings institutions����������������������������������� 810.5 Bank net income (in millions)��������������������������� 152,273 Commercial banks������������������������������������� 140,318 Savings institutions����������������������������������� 11,955 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 15 3 1,515 3,222 12 3 1,496 2,913 3 0 19 309 $484.2 $3,735.6 $273.5 $4,878.5 389.4 3,735.6 268.6 4,487.0 94.7 0.0 4.8 391.5 259.7 2,633.3 226.8 3,795.3 192.4 2,633.3 223.6 3,508.9 67.3 0.0 3.2 286.4 14,694 26,520 3,098 44,181 10,627 26,520 2,997 41,076 4,067 0 101 3,105 Mortgage Consumer Lenders Lenders 553 52 166 41 387 11 $439.6 $175.9 156.6 89.9 282.9 86.0 328.0 148.1 122.4 76.0 205.5 72.1 4,309 1,787 2,518 968 1,791 818 Other Specialized All Other <$1 Billion <$1 Billion 374 708 335 618 39 90 $61.9 $129.1 56.9 107.8 5.0 21.2 49.9 108.2 46.4 91.1 3.5 17.1 1,334 1,103 718 1,003 615 100 All Other >$1 Billion 67 59 8 $5,375.5 5,201.9 173.6 4,214.6 4,059.2 155.4 55,248 53,891 1,356 3.49 0.35 3.14 1.64 2.80 0.20 1.00 1.46 1.01 9.01 0.49 10.68 0.83 9.85 5.01 6.63 2.39 3.22 5.02 3.22 20.88 2.81 2.77 0.37 2.41 1.71 2.60 0.13 0.72 1.07 0.72 7.66 0.73 4.14 0.48 3.65 0.62 2.52 0.11 1.15 1.38 1.17 10.29 0.13 3.84 0.41 3.43 1.18 2.85 0.12 0.94 1.31 0.94 7.84 0.24 3.45 0.67 2.78 1.00 2.17 0.05 0.95 1.43 0.96 8.09 0.21 3.96 0.47 3.49 1.37 2.61 0.47 1.05 1.65 1.05 10.78 0.62 3.13 0.38 2.74 5.67 5.12 0.07 2.16 3.03 2.20 15.30 0.34 3.95 0.47 3.48 0.93 3.01 0.11 0.84 1.06 0.87 7.46 0.24 2.97 0.20 2.77 1.80 2.61 0.13 1.04 1.55 1.06 9.42 0.41 75.30 61.90 6.16 63.48 107.55 46.31 0.00 66.67 52.28 67.62 0.00 33.33 134.98 62.67 2.64 63.83 71.36 65.43 6.73 67.82 35.52 59.52 9.95 51.18 107.82 54.47 3.85 57.69 69.44 62.41 9.09 54.28 82.37 72.52 7.20 58.76 66.17 59.79 2.99 55.22 89.26 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�������������������� 92.17 86.96 92.40 90.19 94.12 96.70 91.04 92.40 88.84 1.48 75.38 3.13 284.22 1.85 80.12 1.39 146.31 1.28 96.90 1.14 38.24 1.15 73.83 1.85 112.67 1.43 81.60 1.36 50.04 1.20 11.15 9.45 12.95 14.41 69.59 52.64 66.66 0.88 15.14 12.34 12.33 14.71 144.30 77.41 51.66 0.85 9.45 8.28 12.56 13.42 47.81 33.70 45.71 0.83 11.42 10.49 14.52 15.62 76.51 63.46 82.94 1.17 11.97 10.20 12.83 14.29 86.99 67.68 77.27 2.19 12.07 11.53 21.43 22.46 82.50 61.56 74.59 1.19 9.88 9.82 13.83 14.65 83.73 70.49 84.18 0.73 14.77 13.97 31.52 32.55 33.76 27.22 79.78 1.38 11.82 11.48 20.01 21.19 63.98 53.62 83.80 1.43 11.12 8.97 12.48 14.28 61.63 48.32 70.33 Structural Changes New reporters�������������������������������������������� Institutions absorbed by mergers������������� Failed institutions�������������������������������������� 0 273 18 0 0 0 0 0 0 0 45 1 0 192 13 0 9 2 0 0 0 0 3 0 0 12 2 0 12 0 PRIOR FULL YEARS (The way it was...) Number of institutions������������������������������2013 ��������������������������������������2011 ������������������������������������� 2009 6,812 7,357 8,012 16 18 23 4 4 4 1,532 1,545 1,568 3,378 3,769 4,453 588 732 766 55 59 83 405 377 289 772 790 770 62 63 56 Total assets (in billions)����������������������������2013 ��������������������������������������2011 ������������������������������������� 2009 $14,730.9 13,891.3 13,086.8 $590.9 538.7 501.6 $3,700.2 3,456.4 3,107.1 $261.6 215.7 182.0 $4,921.3 4,086.1 4,546.7 $486.9 825.4 810.1 $162.5 97.2 96.5 $62.8 56.1 38.1 $137.6 138.6 116.1 $4,407.1 4,477.2 3,688.7 Return on assets (%)��������������������������������2013 ��������������������������������������2011 ������������������������������������� 2009 1.07 0.88 -0.08 3.35 3.49 -4.51 0.86 0.74 0.08 1.15 1.11 0.81 0.91 0.63 -0.43 0.98 0.56 0.65 1.15 1.68 0.33 1.93 1.92 0.74 0.85 0.92 0.80 1.11 0.89 0.53 Net charge-offs to loans & leases (%)�����2013 ��������������������������������������2011 ������������������������������������� 2009 0.69 1.55 2.52 3.20 5.26 9.77 0.97 1.97 3.07 0.14 0.40 0.65 0.43 1.18 2.02 0.37 0.90 1.24 0.80 1.87 2.74 0.48 0.56 0.78 0.33 0.54 0.54 0.49 1.25 2.19 Noncurrent assets plus OREO to assets (%)������������������������������2013 ��������������������������������������2011 ������������������������������������� 2009 1.63 2.61 3.37 0.93 1.41 2.40 1.07 1.61 2.75 0.95 1.46 1.55 1.65 3.05 3.87 2.14 2.61 3.17 1.23 1.28 1.45 0.84 1.11 0.69 1.44 1.69 1.34 2.18 3.25 3.66 Equity capital ratio (%)�����������������������������2013 ��������������������������������������2011 ������������������������������������� 2009 11.15 11.16 10.88 14.73 15.11 21.49 9.27 8.89 8.75 10.97 11.22 10.95 11.79 11.69 10.48 11.62 10.39 9.48 9.51 9.82 11.15 13.50 14.51 17.74 11.34 11.45 11.27 11.52 12.08 11.95 * See Table V-A (page 10) for explanations. Note: Blue font identifies data that are also presented in the prior years’ data at the bottom of the table. FDIC Quarterly 8 2015, Volume 9, No. 2 Quarterly Banking Profile TABLE IV-A. Full Year 2014, All FDIC-Insured Institutions Asset Size Distribution FULL YEAR All Insured (The way it is...) Institutions Number of institutions reporting����������������������������� 6,509 Commercial banks������������������������������������������� 5,643 Savings institutions����������������������������������������� 866 Total assets (in billions)������������������������������������������ $15,553.8 Commercial banks������������������������������������������� 14,493.8 Savings institutions����������������������������������������� 1,059.9 Total deposits (in billions)��������������������������������������� 11,763.9 Commercial banks������������������������������������������� 10,953.3 Savings institutions����������������������������������������� 810.5 Bank net income (in millions)��������������������������������� 152,273 Commercial banks������������������������������������������� 140,318 Savings institutions����������������������������������������� 11,955 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 1,872 3,956 574 107 807 1,645 3,439 468 91 450 227 517 106 16 357 $109.8 $1,232.0 $1,576.5 $12,635.4 $2,956.5 96.8 1,045.3 1,297.7 12,054.1 2,498.9 13.1 186.7 278.8 581.4 457.6 92.5 1,024.3 1,227.9 9,419.3 2,180.6 82.3 876.7 1,020.8 8,973.5 1,849.3 10.2 147.5 207.1 445.8 331.2 858 12,007 16,522 122,886 23,702 751 10,345 14,239 114,983 20,725 106 1,662 2,284 7,903 2,977 Atlanta 812 735 77 $3,217.9 3,131.1 86.8 2,477.2 2,412.5 64.6 32,080 31,368 712 Chicago 1,406 1,176 230 $3,595.8 3,489.8 106.1 2,634.6 2,555.0 79.5 30,430 29,347 1,083 Kansas City 1,599 1,530 69 $3,404.0 3,344.4 59.6 2,567.0 2,520.3 46.8 35,358 34,869 489 San Dallas Francisco 1,372 513 1,282 470 90 43 $904.4 $1,475.1 797.9 1,231.7 106.4 243.4 751.7 1,152.8 663.6 952.6 88.1 200.3 10,039 20,662 8,720 15,289 1,319 5,374 3.49 0.35 3.14 1.64 2.80 0.20 1.00 1.46 1.01 9.01 0.49 4.13 0.47 3.66 1.13 3.45 0.11 0.78 0.93 0.79 6.49 0.23 4.19 0.50 3.69 1.10 3.16 0.12 0.98 1.25 1.00 9.06 0.23 4.19 0.43 3.76 1.21 3.00 0.17 1.08 1.49 1.08 9.11 0.27 3.33 0.32 3.00 1.75 2.73 0.21 0.99 1.48 1.00 9.02 0.56 3.51 0.42 3.09 1.49 2.77 0.27 0.82 1.20 0.83 6.93 0.55 3.65 0.28 3.37 1.62 2.97 0.23 0.97 1.44 1.00 8.15 0.53 2.76 0.28 2.47 1.84 2.68 0.10 0.88 1.25 0.88 8.96 0.36 3.72 0.39 3.32 1.47 2.68 0.17 1.06 1.58 1.07 10.32 0.60 3.96 0.33 3.63 1.37 3.07 0.13 1.13 1.50 1.14 10.32 0.23 4.07 0.44 3.63 2.10 2.88 0.32 1.49 2.27 1.49 11.80 0.47 75.30 61.90 6.16 63.48 86.52 76.93 11.38 57.48 85.75 69.74 4.40 65.82 92.23 63.55 2.26 66.90 73.40 60.77 0.93 63.55 94.24 63.23 7.93 58.98 72.62 63.75 9.73 64.90 64.57 65.96 7.61 59.74 52.68 59.24 3.75 65.23 92.96 64.97 3.72 66.69 111.65 52.20 7.80 64.52 89.26 91.66 92.49 91.71 88.61 89.26 88.27 88.67 88.63 91.61 92.82 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��������������������������� 1.48 75.38 1.54 101.97 1.44 106.55 1.37 84.82 1.50 71.46 1.36 92.40 1.52 65.90 1.57 71.64 1.58 62.16 1.34 96.92 1.31 144.69 1.20 11.15 9.45 12.95 14.41 69.59 52.64 66.66 1.45 12.29 11.99 19.56 20.65 67.40 56.74 84.17 1.38 11.20 10.79 15.75 16.89 77.13 64.12 83.08 1.41 11.90 10.63 14.35 15.45 85.74 66.78 77.52 1.15 11.04 9.14 12.46 13.99 66.69 49.72 63.55 0.89 11.82 9.52 13.36 15.06 71.33 52.61 65.39 1.55 12.45 9.70 12.94 14.60 75.24 57.92 74.28 1.11 9.80 8.72 12.20 13.33 60.01 43.97 61.90 1.46 10.20 8.91 12.22 13.82 67.37 50.81 56.85 1.18 11.06 10.02 13.84 15.00 74.32 61.78 82.78 0.65 12.47 11.39 15.02 16.17 77.96 60.92 76.93 Structural Changes New reporters�������������������������������������������������� Institutions absorbed by mergers������������������� Failed institutions�������������������������������������������� 0 273 18 0 86 10 0 162 8 0 22 0 0 3 0 0 26 3 0 46 4 0 60 6 0 58 1 0 57 2 0 26 2 PRIOR FULL YEARS (The way it was…) Number of institutions������������������������������������2013 �������������������������������������������� 2011 ������������������������������������������� 2009 6,812 7,357 8,012 2,056 2,415 2,848 4,090 4,284 4,492 559 551 565 107 107 107 840 915 986 869 957 1,121 1,470 1,552 1,647 1,659 1,773 1,879 1,431 1,542 1,660 543 618 719 Total assets (in billions)����������������������������������2013 �������������������������������������������� 2011 ������������������������������������������� 2009 $14,730.9 13,891.3 13,086.8 $119.7 138.7 158.9 $1,246.1 1,279.9 1,354.4 $1,468.6 1,410.9 1,461.4 $11,896.5 11,061.8 10,112.1 $2,927.3 2,864.6 2,567.2 $2,998.8 2,942.8 3,427.3 $3,376.9 3,184.5 2,934.4 $3,222.9 2,918.2 1,145.6 $870.0 812.9 784.8 $1,335.1 1,168.4 2,227.5 Return on assets (%)��������������������������������������2013 �������������������������������������������� 2011 ������������������������������������������� 2009 1.07 0.88 -0.08 0.70 0.52 -0.05 0.91 0.56 -0.10 1.16 0.79 -0.37 1.07 0.93 -0.03 0.88 1.01 -0.83 0.98 0.52 0.01 0.95 0.78 0.18 1.24 0.95 0.76 1.09 0.94 0.34 1.55 1.47 -0.25 Net charge-offs to loans & leases (%)�����������2013 �������������������������������������������� 2011 ������������������������������������������� 2009 0.69 1.55 2.52 0.35 0.62 0.88 0.36 0.90 1.25 0.41 1.18 1.91 0.78 1.72 2.87 0.93 1.86 2.76 0.66 1.66 2.29 0.49 1.19 2.36 0.87 1.85 2.40 0.32 0.89 1.35 0.57 1.15 3.44 Noncurrent assets plus OREO to assets (%)������������������������������������2013 �������������������������������������������� 2011 ������������������������������������������� 2009 1.63 2.61 3.37 1.75 2.34 2.24 1.81 3.01 3.29 1.89 3.13 3.58 1.57 2.50 3.36 1.12 1.78 2.33 2.23 3.84 4.16 1.47 2.31 3.20 1.99 2.76 4.28 1.58 2.60 3.04 0.91 1.97 3.19 Equity capital ratio (%)�����������������������������������2013 �������������������������������������������� 2011 ������������������������������������������� 2009 11.15 11.16 10.88 11.68 11.83 11.96 10.78 10.65 9.86 11.80 11.73 10.72 11.11 11.14 11.02 12.02 12.26 12.53 12.19 11.98 11.66 9.66 8.68 8.59 10.42 11.12 10.70 10.87 10.92 10.28 12.65 13.48 11.11 * See Table V-A (page 11) for explanations. Note: Blue font identifies data that are also presented in the prior years’ data at the bottom of the table. FDIC Quarterly 9 2015, Volume 9, No. 2 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* March 31, 2015 All Insured Institutions Credit Card Banks International Agricultural Commercial Mortgage Banks Banks Lenders Lenders Consumer Lenders Other All Other All Other Specialized <$1 >$1 <$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������������������������������������������������������ 0.92 0.49 0.36 0.18 0.65 1.56 0.24 1.15 1.06 1.24 0.26 0.73 0.11 0.00 0.00 0.00 0.00 0.12 0.87 1.08 1.08 1.02 0.00 1.06 1.25 0.91 0.28 0.09 0.91 1.98 0.24 1.23 1.10 1.44 0.32 0.81 0.83 0.75 0.59 0.23 0.43 1.26 1.03 1.37 0.95 1.40 0.98 0.91 0.58 0.46 0.35 0.18 0.52 1.02 0.24 1.00 1.00 1.00 0.18 0.50 0.94 0.66 0.52 0.18 0.74 1.03 0.48 0.95 1.24 0.91 0.11 0.88 0.63 0.28 1.72 0.11 0.40 0.58 0.17 0.66 0.58 0.68 0.22 0.61 1.67 2.39 1.23 0.84 0.63 2.08 1.09 1.67 1.29 1.70 0.87 1.55 1.37 1.45 0.97 1.40 0.68 1.66 1.11 1.81 1.04 1.83 0.46 1.32 1.36 0.36 0.31 0.24 0.69 2.13 0.15 1.32 1.05 1.48 0.20 0.91 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������������������������������������������������������ 3.09 1.81 1.20 0.41 2.72 5.15 0.54 0.83 1.12 0.55 0.22 1.83 0.49 0.00 0.00 0.00 0.00 0.50 0.71 1.13 1.16 0.55 0.00 1.09 4.89 0.99 0.81 0.27 4.40 7.77 0.48 1.07 1.10 1.02 0.15 2.14 1.13 1.54 1.53 0.90 0.89 1.12 1.24 0.55 0.27 0.57 0.44 0.96 1.57 1.81 1.12 0.44 1.44 2.45 0.65 0.68 1.07 0.65 0.27 1.20 3.10 2.03 1.53 0.65 2.05 3.44 1.05 0.56 1.02 0.51 0.11 2.80 3.77 18.85 8.05 3.38 2.90 3.17 0.51 0.58 1.20 0.42 5.11 1.46 1.97 3.11 2.21 1.01 0.64 1.78 1.43 0.54 0.67 0.53 0.35 1.64 1.82 2.88 2.05 1.21 0.63 1.77 1.60 1.06 0.64 1.07 0.39 1.64 5.19 1.69 1.31 0.32 3.45 7.82 0.37 0.62 1.07 0.35 0.18 2.56 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������������������������������������������������������ 0.16 -0.13 0.06 0.00 0.46 0.21 0.18 1.83 2.98 0.68 0.07 0.43 0.25 0.00 0.00 0.00 0.00 0.26 2.19 2.87 2.94 1.38 0.00 2.80 0.39 0.00 0.00 0.00 0.50 0.50 0.16 2.34 3.14 0.98 0.04 0.63 -0.02 -0.62 -0.05 0.10 0.03 0.07 0.13 0.33 1.27 0.26 0.00 0.02 0.09 -0.09 0.07 0.00 0.31 0.12 0.15 0.70 3.35 0.48 0.14 0.15 0.14 0.00 0.03 0.01 0.32 0.15 0.00 0.93 4.39 0.52 0.08 0.15 0.23 -0.13 0.06 -0.06 0.55 0.16 0.07 0.79 2.21 0.39 0.02 0.60 0.02 -0.27 0.02 -0.02 0.04 0.07 0.13 0.49 1.36 0.41 0.60 0.13 0.08 -0.14 0.10 0.27 0.06 0.11 0.21 0.42 0.90 0.42 0.00 0.14 0.21 -0.24 0.03 -0.03 0.60 0.22 0.12 1.62 2.96 0.80 0.04 0.41 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)�������������� $4,204.3 246.1 1,163.4 305.3 483.9 1,855.3 1,749.1 1,383.9 680.0 704.0 1,026.7 8,364.0 $0.3 0.0 0.0 0.0 0.0 0.3 32.4 339.8 323.8 16.0 2.2 374.6 $486.8 7.6 37.2 55.8 77.3 252.4 279.3 241.7 149.6 92.1 310.3 1,318.1 $97.2 5.2 25.6 2.9 1.8 25.3 19.4 6.0 0.4 5.6 37.9 160.5 $2,078.2 171.9 811.8 198.7 194.6 666.3 806.1 240.1 17.8 222.3 245.9 3,370.3 $249.0 5.0 20.7 6.1 14.0 202.2 7.8 5.8 0.6 5.2 17.9 280.4 $30.1 0.5 2.4 0.2 6.5 20.4 7.1 88.1 19.0 69.1 3.8 129.2 $12.2 0.9 4.2 0.3 0.4 5.7 2.3 2.0 0.1 1.8 1.0 17.5 $55.0 3.3 13.5 1.5 2.2 30.2 6.4 5.9 0.1 5.8 5.0 72.2 $1,195.5 51.8 248.0 39.7 187.1 652.5 588.4 454.6 168.4 286.2 402.6 2,641.2 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������������������������������������������������������ 19,338.7 6,045.2 4,981.0 427.0 5,718.0 252.6 1,884.6 0.1 0.0 0.0 0.0 0.1 0.0 0.0 1,093.7 16.6 62.4 2.0 515.7 0.0 469.0 488.3 176.9 170.3 17.4 85.5 38.1 0.1 11,512.6 4,588.2 3,551.1 336.5 2,688.4 181.3 166.8 1,085.5 157.4 86.4 8.5 391.9 1.6 439.6 129.5 24.4 36.5 1.1 59.5 0.0 8.0 155.2 59.5 49.3 6.1 38.7 1.6 0.0 537.9 169.9 175.1 11.2 168.9 12.7 0.1 4,335.9 852.4 849.9 44.0 1,769.2 17.3 801.1 * 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. ** 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 2015, Volume 9, No. 2 Quarterly Banking Profile TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution March 31, 2015 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��������������������������������������������� 0.92 0.49 0.36 0.18 0.65 1.56 0.24 1.15 1.06 1.24 0.26 0.73 1.38 1.25 1.19 0.53 0.83 1.75 1.18 1.76 3.16 1.74 0.85 1.31 0.79 0.65 0.57 0.45 0.53 1.16 0.74 1.42 1.35 1.42 0.71 0.81 0.53 0.51 0.33 0.15 0.46 0.88 0.41 1.27 1.64 1.09 0.35 0.55 1.05 0.39 0.27 0.15 0.68 1.74 0.18 1.13 1.04 1.24 0.22 0.75 0.63 0.72 0.42 0.16 0.49 0.97 0.25 1.00 0.85 1.26 0.14 0.58 1.10 0.49 0.31 0.25 0.80 1.78 0.18 1.49 1.18 1.81 0.18 0.86 0.96 0.43 0.42 0.17 0.73 1.56 0.29 1.05 0.88 1.10 0.42 0.75 1.28 0.25 0.34 0.20 0.64 2.16 0.18 1.17 1.15 1.19 0.25 0.87 0.86 0.58 0.39 0.26 0.46 1.68 0.39 0.82 0.56 0.94 0.31 0.72 0.41 0.30 0.24 0.16 0.36 0.65 0.25 0.94 1.30 0.64 0.24 0.47 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��������������������������������������������� 3.09 1.81 1.20 0.41 2.72 5.15 0.54 0.83 1.12 0.55 0.22 1.83 1.65 2.32 2.10 1.23 0.85 1.68 1.86 0.80 1.17 0.80 0.65 1.50 1.41 2.50 1.39 0.88 0.76 1.42 1.27 0.85 1.39 0.81 0.42 1.31 1.45 1.94 1.20 0.46 0.87 2.06 0.88 0.77 1.59 0.39 1.04 1.29 3.91 1.46 1.11 0.31 3.07 6.35 0.45 0.84 1.10 0.55 0.15 1.99 2.01 2.15 1.42 0.31 2.07 2.95 0.62 0.90 0.97 0.76 0.37 1.39 3.83 2.54 1.13 0.37 3.32 5.94 0.48 0.85 1.16 0.53 0.12 2.09 3.62 1.75 1.32 0.52 2.83 6.01 0.53 0.81 1.03 0.74 0.15 2.08 4.47 1.39 1.22 0.44 3.14 7.54 0.50 0.85 1.16 0.47 0.23 2.38 1.76 1.19 0.95 0.92 1.66 3.12 0.78 0.71 1.19 0.48 0.31 1.34 1.17 1.59 1.00 0.27 0.95 1.47 0.53 0.73 1.31 0.24 0.26 0.86 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��������������������������������������������� 0.16 -0.13 0.06 0.00 0.46 0.21 0.18 1.83 2.98 0.68 0.07 0.43 0.08 -0.20 0.15 0.15 0.06 0.10 0.40 0.56 6.91 0.48 0.00 0.14 0.06 -0.01 0.05 0.05 0.11 0.10 0.19 0.66 4.08 0.40 0.14 0.11 0.07 -0.11 0.10 0.02 0.17 0.08 0.15 1.61 3.68 0.62 0.08 0.20 0.21 -0.19 0.04 -0.02 0.51 0.25 0.18 1.88 2.95 0.70 0.06 0.51 0.09 -0.13 0.07 0.00 0.31 0.10 0.14 2.02 2.73 0.76 0.08 0.46 0.25 0.13 0.08 0.04 0.60 0.27 0.15 1.92 3.03 0.73 0.07 0.52 0.15 -0.23 0.04 0.02 0.41 0.19 0.20 1.09 2.86 0.51 0.07 0.27 0.25 -0.34 0.00 -0.08 0.58 0.35 0.14 2.33 3.28 1.09 0.02 0.54 0.03 -0.11 0.02 -0.11 0.29 0.07 0.10 1.15 2.10 0.68 0.13 0.16 0.06 -0.24 0.12 -0.01 0.13 0.06 0.32 1.60 3.11 0.30 0.17 0.46 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)����� $4,204.3 246.1 1,163.4 305.3 483.9 1,855.3 1,749.1 1,383.9 680.0 704.0 1,026.7 8,364.0 $42.5 2.5 11.1 1.3 1.1 19.5 7.3 3.8 0.0 3.7 7.6 61.2 $606.0 52.3 234.9 31.6 26.7 217.3 103.1 33.0 2.3 30.7 46.8 788.9 $757.3 63.2 308.6 71.2 46.8 248.8 172.3 77.7 24.6 53.1 54.7 1,062.0 $2,798.5 128.2 608.8 201.2 409.3 1,369.8 1,466.5 1,269.4 653.1 616.4 917.5 6,452.0 $858.7 45.5 269.3 108.4 90.3 340.9 268.0 292.9 185.6 107.4 170.5 1,590.1 $895.3 52.4 235.0 38.1 126.1 433.2 430.0 351.4 179.3 172.2 222.8 1,899.5 $824.6 39.2 186.3 81.1 120.7 376.6 359.3 202.3 48.3 154.1 240.6 1,626.7 $826.2 37.1 167.1 25.8 98.3 407.7 358.8 286.8 160.1 126.7 282.4 1,754.2 $354.8 48.6 139.4 13.0 19.5 120.1 123.1 56.2 18.2 38.0 42.5 576.6 $444.7 23.2 166.2 39.0 28.9 176.9 210.1 194.2 88.5 105.7 68.0 917.0 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��������������������������������������������� 19,338.7 6,045.2 4,981.0 427.0 5,718.0 252.6 1,884.6 573.0 194.6 178.1 21.8 166.6 11.7 0.3 5,790.2 2,631.2 1,867.2 150.7 1,014.7 124.4 2.0 4,198.6 1,692.6 1,345.6 99.9 951.3 88.3 21.0 8,776.9 1,526.9 1,590.1 154.6 3,585.4 28.2 1,861.4 2,625.3 636.2 670.4 164.1 1,100.5 21.5 32.6 5,007.8 1,722.9 1,202.1 40.0 1,488.4 58.6 495.9 3,815.4 839.0 1,019.5 71.3 1,290.6 49.9 545.1 4,046.4 1,287.5 881.5 72.2 962.0 36.2 777.1 2,535.7 1,100.1 818.3 49.4 487.9 66.2 13.9 1,308.1 459.6 389.2 29.9 388.6 20.3 20.2 * 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 ** 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 2015, Volume 9, No. 2 Table VI-A. Derivatives, All FDIC-Insured Call Report Filers Asset Size Distribution 1st Quarter 2015 4th Quarter 2014 3rd Quarter 2014 2nd Quarter 2014 1st Quarter 2014 (dollar figures in millions; notional amounts unless otherwise indicated) ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives����������������� 1,430 1,400 1,392 1,405 1,399 Total assets of institutions reporting derivatives���������� $14,160,514 $13,921,852 $13,713,850 $13,522,371 $13,250,315 Total deposits of institutions reporting derivatives������� 10,664,252 10,461,458 10,291,809 10,169,199 9,980,762 Total derivatives������������������������������������������������������������� 205,900,437 221,924,279 242,942,949 239,127,057 231,756,607 % Change Less $100 $1 Billion 14Q1Than $100 Million to to $10 15Q1 Million $1 Billion Billion Greater Than $10 Billion 2.2 6.9 6.8 -11.2 69 $5,004 4,190 291 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 157,727,650 173,941,388 190,897,013 191,555,638 184,420,491 Foreign exchange*�������������������������������������������������������� 35,563,105 34,745,833 37,993,284 33,394,779 32,803,408 Equity����������������������������������������������������������������������������� 2,359,532 2,577,118 2,317,271 2,135,462 2,105,011 Commodity & other (excluding credit derivatives)�������� 1,233,520 1,210,879 1,327,011 1,214,397 1,263,060 Credit������������������������������������������������������������������������������ 9,016,631 9,449,062 10,408,370 10,826,781 11,164,636 Total�������������������������������������������������������������������������������� 205,900,437 221,924,279 242,942,949 239,127,057 231,756,607 -14.5 8.4 12.1 -2.3 -19.2 -11.2 291 0 0 0 0 291 23,356 2,875 57 9 127 26,423 90,548 5,139 309 96 482 96,573 Derivative Contracts by Transaction Type Swaps���������������������������������������������������������������������������� 117,710,832 135,169,546 148,331,152 146,514,058 141,284,830 Futures & forwards�������������������������������������������������������� 44,537,354 43,368,429 45,058,920 45,263,688 42,478,734 Purchased options��������������������������������������������������������� 16,070,746 16,370,106 17,990,979 17,268,335 17,177,576 Written options��������������������������������������������������������������� 15,784,509 16,004,454 17,560,552 16,842,990 16,905,444 Total�������������������������������������������������������������������������������� 194,103,441 210,912,535 228,941,604 225,889,071 217,846,584 -16.7 4.8 -6.4 -6.6 -10.9 44 127 18 102 291 7,223 10,731 807 7,525 26,287 53,061 117,650,503 21,596 44,504,901 4,871 16,065,050 16,430 15,760,452 95,957 193,980,906 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����������������������������������� Derivative Contracts by Maturity** Interest rate contracts����������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Foreign exchange and gold contracts���� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Equity contracts��������������������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Commodity & other contracts (including credit derivatives, excluding gold contracts)���� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years 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 (%)����������������������������������������������������� 856 402 103 $357,197 $1,190,250 $12,608,062 295,028 953,698 9,411,336 26,423 96,573 205,777,150 157,613,456 35,555,091 2,359,165 1,233,415 9,016,023 205,777,150 68,527 -10,042 335 -5,755 54,676 -53,208 60,023 -4,845 3,769 -3,376 47,533 -36,633 65,131 13,334 -657 219 67,082 -62,731 72,248 4,729 412 965 95,094 -90,465 72,732 5,563 1,548 -893 80,869 -77,438 -5.8 N/M -78.4 N/M -32.4 N/M 1 0 0 0 0 0 61 0 1 0 -1 0 -201 -3 0 2 0 -24 68,666 -10,039 334 -5,758 54,677 -53,183 74,822,165 50,596,553 32,885,173 25,506,809 3,917,108 1,612,457 1,471,235 518,475 167,735 71,808,688 33,727,025 22,213,586 22,145,398 2,586,643 969,047 996,137 351,854 100,903 79,984,774 40,334,338 22,393,371 22,877,893 2,459,545 1,021,332 763,470 323,010 77,484 81,212,211 38,531,826 24,203,418 20,823,569 2,435,601 1,016,489 698,674 292,130 81,116 77,787,406 37,365,369 24,025,868 20,107,028 2,312,567 974,355 673,720 305,141 89,804 -3.8 35.4 36.9 26.9 69.4 65.5 118.4 69.9 86.8 87 28 35 0 0 0 0 0 0 9,764 3,260 4,257 1,996 0 0 9 10 1 21,113 24,846 26,113 3,644 194 0 46 91 25 74,791,201 50,568,419 32,854,768 25,501,169 3,916,915 1,612,457 1,471,180 518,374 167,709 5,553,836 5,891,761 600,199 1,298,825 3,623,142 289,055 1,407,104 4,045,843 321,390 1,454,791 4,091,545 332,178 1,303,887 4,310,725 422,604 325.9 36.7 42.0 0 0 0 7 5 0 50 6 15 5,553,779 5,891,750 600,184 39.8 49.8 28.8 48.6 26.0 53.2 23.5 55.1 23.5 56.2 0.2 1.7 0.4 1.2 0.8 1.4 45.2 56.6 89.6 77.4 79.2 78.7 79.7 1.8 1.6 2.2 101.8 Credit losses on derivatives***���������������������������������� 69.8 91.1 83.2 68.7 12.8 445.3 0.0 0.3 0.0 69.5 HELD FOR TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 249 11,441,159 8,585,063 248 11,274,526 8,457,138 244 11,015,085 8,262,859 247 10,889,256 8,185,855 243 10,638,252 7,997,380 2.5 7.5 7.3 8 575 464 86 40,444 33,768 91 320,862 254,422 64 11,079,279 8,296,409 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 154,706,789 170,693,032 187,912,026 188,495,603 181,284,535 Foreign exchange���������������������������������������������������������� 32,197,482 32,536,107 33,675,874 30,164,255 29,208,486 Equity����������������������������������������������������������������������������� 2,340,858 2,559,758 2,300,741 2,119,239 2,089,047 Commodity & other�������������������������������������������������������� 1,227,079 1,205,276 1,320,794 1,206,811 1,256,235 Total�������������������������������������������������������������������������������� 190,472,207 206,994,173 225,209,435 221,985,908 213,838,301 -14.7 10.2 12.1 -2.3 -10.9 135 0 0 0 135 2,100 0 0 1 2,101 20,355 3,835 0 14 24,204 154,684,199 32,193,647 2,340,858 1,227,064 190,445,767 Trading Revenues: Cash & Derivative Instruments Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other (including credit derivatives)�������� Total trading revenues��������������������������������������������������� 959 4,702 791 1,211 7,663 658 2,902 643 255 4,458 -826 4,830 652 946 5,602 2,878 2,026 722 795 6,421 2,010 2,137 608 1,427 6,183 -52.3 120.0 30.1 -15.1 23.9 0 0 0 0 0 0 0 0 0 0 18 3 0 0 21 941 4,700 791 1,210 7,642 Share of Revenue Trading revenues to gross revenues (%)���������������������� Trading revenues to net operating revenues (%)���������� 6.4 29.4 3.8 19.6 4.7 23.6 5.4 24.6 5.4 26.9 0.0 0.0 0.0 0.2 0.6 3.4 6.6 30.1 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 1,305 13,844,132 10,410,936 1,276 13,613,609 10,218,446 1,272 13,421,606 10,062,067 1,287 13,229,480 9,938,934 1,282 12,944,593 9,738,920 1.8 6.9 6.9 62 4,511 3,797 783 326,299 269,165 363 1,072,212 860,209 97 12,441,111 9,277,764 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other�������������������������������������������������������� Total notional amount���������������������������������������������������� 3,020,861 585,258 18,674 6,441 3,631,233 3,248,355 647,043 17,361 5,602 3,918,361 2,984,988 724,435 16,530 6,216 3,732,169 3,060,035 819,319 16,223 7,586 3,903,163 3,135,956 849,536 15,965 6,825 4,008,282 -3.7 -31.1 17.0 -5.6 -9.4 156 0 0 0 156 21,256 2,865 57 8 24,186 70,192 1,170 309 81 71,753 2,929,257 581,223 18,308 6,351 3,535,139 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 2015, Volume 9, No. 2 Quarterly Banking Profile TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Call Report Filers) 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 2015 4th Quarter 2014 3rd Quarter 2014 2nd Quarter 2014 1st % Change Less Than $100 $1 Billion Greater Quarter 14Q1$100 Million to to $10 Than $10 2014 15Q1 Million $1 Billion Billion Billion Number of institutions reporting securitization activities����������������������������������������� Outstanding Principal Balance 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 securitized and sold������������������������������������������������������������������������������������������ 75 78 74 73 76 -1.3 0 23 17 35 $821,872 35 17,817 3,740 5,966 19 94,401 943,850 $847,508 36 18,499 3,951 6,191 11 96,257 972,452 $845,279 38 16,782 4,198 6,425 10 95,099 967,831 $844,190 39 16,692 4,312 4,945 17 94,757 964,951 $598,465 41 16,349 4,735 4,462 545 96,071 720,668 37.3 -14.6 9.0 -21.0 33.7 -96.5 -1.7 31.0 $0 0 0 0 0 0 0 0 $2,489 0 0 0 2 14 118 2,622 $12,477 0 1 1,496 0 3 8,309 22,286 $806,907 35 17,816 2,243 5,964 2 85,974 918,942 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��� 3,120 0 1,531 0 211 0 1,405 6,267 0 2,918 0 1,529 0 194 0 1,369 6,011 17 2,806 0 1,418 0 188 0 1,129 5,541 17 2,908 0 1,450 0 192 0 1,416 5,966 17 2,912 0 1,455 5 174 15 1,308 5,869 120 7.1 0.0 5.2 -100.0 21.3 -100.0 7.4 6.8 -100.0 0 0 0 0 0 0 0 0 0 11 0 0 0 0 0 0 11 0 3 0 0 0 0 0 0 3 0 3,106 0 1,531 0 211 0 1,405 6,253 0 3.1 5.2 0.4 1.0 4.6 0.0 0.4 2.8 3.9 7.5 0.7 0.9 4.9 0.0 0.3 3.5 3.9 8.0 0.8 0.7 4.8 0.0 0.4 3.5 3.5 9.1 0.8 0.7 5.5 0.0 0.4 3.2 3.3 8.8 0.9 0.6 5.2 0.0 0.3 2.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 0.0 0.0 0.0 0.0 0.0 3.1 0.8 1.6 0.0 0.0 0.8 0.0 0.0 0.1 1.0 3.1 5.2 0.4 1.0 4.6 0.0 0.4 2.8 2.0 44.7 0.3 0.1 5.1 1.3 1.4 2.0 2.2 43.3 0.5 0.1 5.3 2.4 3.3 2.3 2.2 42.0 0.5 0.1 5.2 3.0 6.5 2.6 2.3 40.3 0.6 0.1 6.3 2.9 9.2 2.9 3.3 37.8 0.7 0.1 6.7 0.1 8.7 3.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.3 0.0 0.0 0.0 0.0 1.8 9.8 1.7 1.0 0.0 0.0 0.2 0.0 0.0 0.8 0.9 2.1 44.7 0.3 0.1 5.1 0.0 1.4 2.0 0.1 0.7 0.4 0.1 0.2 0.0 0.1 0.1 0.4 1.0 1.7 0.2 0.8 0.0 0.9 0.4 0.3 0.2 1.5 0.1 0.6 0.0 0.6 0.3 0.2 0.1 1.2 0.1 0.3 0.0 0.9 0.3 0.2 -0.1 0.6 0.0 0.2 0.0 0.7 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.1 0.7 0.4 0.1 0.2 0.0 0.1 0.1 0 9,983 0 0 12,247 0 0 12,198 0 0 12,905 2 0 13,116 2 0.0 -23.9 -100.0 0 0 0 0 0 0 0 0 0 0 9,983 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 48 0.0 0.0 -100.0 0 0 0 0 0 0 0 0 0 0 0 0 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 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����������������������������������������������������������������������������������� 1,097 1,103 1,105 1,101 1,088 0.8 129 740 177 51 38,900 694 83 71,382 111,059 40,547 712 91 69,560 110,909 40,838 709 52 66,271 107,869 41,944 727 53 65,112 107,835 43,405 755 69 65,974 110,203 -10.4 -8.1 20.3 8.2 0.8 1,109 0 1 0 1,110 15,376 3 11 94 15,483 8,987 28 71 1,193 10,278 13,428 664 0 70,095 84,187 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������������������������������������������������������������������������������������������������� 10,073 137 19 18,624 28,853 9,737 137 27 17,954 27,855 9,850 140 23 17,233 27,246 9,646 141 24 16,849 26,660 9,573 155 33 16,970 26,732 5.2 -11.6 -42.4 9.7 7.9 80 0 1 0 81 2,444 3 11 11 2,468 3,390 4 8 71 3,473 4,159 130 0 18,542 22,831 Support for Securitization Facilities Sponsored by Other Institutions Number of institutions reporting securitization facilities sponsored by others������� Total credit exposure������������������������������������������������������������������������������������������������� 116 44,982 125 44,248 132 41,590 134 42,400 138 42,081 -15.9 6.9 9 10 64 155 24 334 19 44,483 Total unused liquidity commitments������������������������������������������������������������������������� 887 1,150 918 1,122 1,017 -12.8 0 0 0 887 4,412,785 4,461,369 4,556,212 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 (%)**������������������������������������������������������������� -100.0 0 0 0 0 11,736 0 4,361,980 11,981 10,189 12,129 12,110 -3.1 5 1 5 11,726 28,878 1,599 298 5.5 28,924 1,197 340 5.5 27,948 2,886 385 5.3 28,274 2,773 318 5.4 30,515 2,142 285 5.5 -5.4 -25.4 4.6 0 7 0 0.7 0 180 6 2.0 579 91 16 2.4 28,300 1,321 276 6.4 * 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 2015, Volume 9, No. 2 Quarterly Banking Profile COMMUNITY BANK PERFORMANCE Community banks are identified based on criteria defined in the FDIC’s Community Banking Study. When comparing community bank performance across quarters, prior-quarter dollar amounts are based on community banks designated in the current quarter, adjusted for mergers. In contrast, prior-quarter performance ratios are based on community banks designated during the prior quarter. Earnings of $4.9 Billion Grew 16 Percent From First Quarter 2014 Net Interest Income and Noninterest Income Increased From the Year-Ago Period Loan Balances Increased From the Previous Quarter and the Year Before Net Charge-Off Rate Declined to a Nine-Year Low Community Banks Continued to Hold 44 Percent of Small Loans to Businesses ■ ■ ■ ■ ■ up 13 basis points from the year-ago quarter, but 26 basis points below noncommunity banks’ rate (1.51 percent). Close to 63 Percent of Community Banks Increased Earnings From First Quarter 2014 Improved revenue from net interest income and noninterest income, coupled with lower loan-loss provisions, increased aggregate first quarter 2015 earnings at the 5,946 community banks to $4.9 billion, up $690.9 million (16.4 percent) from the year before. Earnings for community banks grew at almost three times the rate of noncommunity banks (6.1 percent).1 Almost two out of every three community banks (63 percent) reported higher year-over-year earnings, while 5.8 percent were unprofitable during the quarter, the lowest level since second quarter 2005. The pretax return on assets (ROA) was 1.25 percent, Net Interest Margin Continued to Fall Despite Net Interest Income Rising 6.5 Percent In first quarter 2015, there were 472 noncommunity banks with a total of $13.7 trillion in assets, $10.2 trillion in deposits, and $1.5 trillion in equity capital. The average net interest margin (NIM) of 3.55 percent for the quarter was down 2 basis points from the year before, as average asset yields fell more rapidly than average funding costs. Community banks posted NIM 61 basis points above the average of noncommunity banks (2.94 percent) and 53 basis points above the industry average (3.02 percent). Net interest income, which accounted for 78 percent of net operating revenue at community banks, totaled $16.8 billion in first quarter 2015, up $1 billion (6.5 percent) from first quarter 2014. With nearly 70 percent of community Chart 1 Chart 2 1 Net Interest Margin Contributors to the Year-Over-Year Change in Income FDIC-Insured Community Banks Positive Factor Negative Factor Billions of Dollars $1.5 $0.69 Percent 4.0 $1.02 -$0.02 $0.70 $0.82 $0.10 $0.33 $1.0 3.5 3.57 3.55 $0.5 $0.0 -$0.5 Community Banks All Insured Institutions 3.0 +16% +6% Net Income Net Interest Income -3% +18% +6% Loan Loss Noninterest Noninterest Provisions Income Expense +75% +28% Realized Gains on Securities Income Taxes 3.02 2.5 2007 Source: FDIC. FDIC Quarterly 3.16 2008 2009 2010 2011 2012 2013 2014 2015 Source: FDIC. 15 2015, Volume 9, No. 2 banks increasing net interest income from the yearago quarter, the annual increase at community banks outperformed noncommunity banks (1.6 percent). Yearly increase in net interest income for community banks was led by higher interest income from non 1-to-4 family residential mortgage real estate loans (up $509.1 million, or 7.3 percent) and 1-to-4 family residential mortgages (up $238.5 million, or 5.3 percent). securitization, and servicing of residential mortgage loans totaled $743.6 million for the current quarter, up $313.1 million (72.7 percent) from first quarter 2014. Noninterest Expense Grew 5.9 Percent From First Quarter 2014 Noninterest expense totaled $14.8 billion in first quarter 2015, an increase of $821.1 million (5.9 percent) from the year before. Close to 77 percent of the increase in noninterest expense was led by higher salary employee benefits (up $627.4 million, or 8.2 percent). Almost two out of every three community banks (65 percent) reported higher noninterest expense from first quarter 2014. Full-time employees at community banks totaled 439,114 in first quarter 2015, up 8,789 (2 percent) from a year earlier, while noncommunity banks reduced full-time employees by 3,794 (0.2 percent). The average asset per employee was $4.7 million for the first quarter of 2015, up from $4.5 million in the same 2014 quarter. Higher Loan Sale Revenue Increased Noninterest Income Noninterest income of $4.7 billion, which accounted for 22 percent of net operating revenue at community banks in first quarter 2015, increased $704 million (17.7 percent) from the same 2014 quarter. More than half (57 percent) of community banks reported higher noninterest income than a year earlier. Close to 90 percent of the annual increase in noninterest income was the result of rising loan sales revenue (up $404 million, or 68.4 percent) and all other noninterest income (up $224.2 million, or 14.2 percent).2 Noninterest income from the sale, All other noninterest income includes items that are greater than $25,000 and exceed 3 percent of all other noninterest income reported. They include income and fees from the printing and sale of checks, earnings on the increase in value of cash surrender value of life insurance, income and fees from automated teller machines, rent and other income from other real estate owned, safe deposit box rent, net change in the fair values of financial instruments accounted for under a fair value option, bank card and credit card interchange fees, and gains on bargain purchases. 2 Chart 3 Chart 4 Noncurrent Loan Rates for FDIC-Insured Community Banks Change in Loan Balances and Unused Commitments Billions of Dollars 25.8 FDIC-Insured Community Banks Percent of Loan Portfolio Noncurrent 16 C&D Loans 25.1 14 Change 1Q 2015 vs. 1Q 2014 Change 1Q 2015 vs. 4Q 2014 17.3 12 6.5 8 7.6 5.7 5.7 2.1 10 11.7 11.0 3.8 3.1 1.8 0.1 1.3 6 2.6 4 -1.1 Nonfarm Nonresidential RE C&I Loans Source: FDIC. FDIC Quarterly 1-to-4 Family Residential RE C&D Loans -3.5 Agricultural Loans to Production Individuals Loans Loan Balances Nonfarm Nonresidential RE 1-to-4 Family RE C&I Loans Home Equity Credit Cards 2 Home Equity CRE & C&D C&I Loans 0 2007 Unused Commitments 2008 2009 2010 2011 2012 2013 2014 2015 Source: FDIC. 16 2015, Volume 9, No. 2 Quarterly Banking Profile All Major Loan Balances Increased From the Year Before Asset Quality Indicators Showed Continuing Improvement Total assets at community banks grew by $33 billion (1.6 percent) from the previous quarter, as loan balances increased by $17.4 billion (1.3 percent). With more than half of community banks (53 percent) increasing loan balances from the previous quarter, the quarterly growth rate for community banks outpaced noncommunity banks (0.5 percent). Almost 83 percent of the increase was led by nonfarm nonresidential real estate loans (up $6.5 billion, or 1.6 percent), 1-to-4 family residential mortgages (up $5.7 billion, or 1.6 percent), and commercial and industrial loans (up $2.1 billion, or 1.1 percent). Agricultural production loans posted a seasonal decline of $3.5 billion (7.2 percent), and loans to individuals fell $1.1 billion (1.8 percent). All major loan categories increased from first quarter 2014, led by nonfarm nonresidential real estate loans (up $25.8 billion, or 6.9 percent), 1-to-4 family residential mortgages (up $25.1 billion, or 7.4 percent), commercial and industrial loans (up $17.3 billion, or 10 percent), and construction and development loans (up $11 billion, or 14.8 percent). Small loans to businesses of $295.3 billion increased $9.8 billion (3.4 percent) from first quarter 2014, with 42 percent of the growth being driven by commercial and industrial loans (up $4.1 billion, or 4.7 percent).3 Total unused loan commitments increased $26.2 billion (11.2 percent) from the year before, with total unused commercial real estate (CRE) loan commitments— including construction and development—growing $11.7 billion (21.1 percent). Noncurrent loan balances totaled $18.1 billion in first quarter 2015, down $3.7 billion (16.9 percent) from first quarter 2014. Close to 60 percent of community banks lowered their noncurrent loan balances from the year before. The noncurrent rate for community banks was 1.32 percent, down from 1.36 percent in the previous quarter, and 1.68 percent in first quarter 2014. The noncurrent rate was 61 basis points below noncommunity banks’ rate (1.93 percent), and 51 basis points below industry’s rate (1.83 percent). All major loan categories had lower noncurrent rates from the 2014 quarter. Construction and development’s noncurrent rate declined 155 basis points from first quarter 2014; however, it continued to have the highest noncurrent rate (2.39 percent). The quarterly net charge-off rate for community banks declined 7 basis points to 0.1 percent, and it remained below noncommunity banks’ rate of 0.5 percent. All major loan categories had a decline in net charge-off rate from the year before. Common Equity Tier 1 Capital Ratio Stood at 14.89 Percent Equity capital totaled $230.9 billion in first quarter 2015, an increase of $18.5 billion (8.7 percent) from first quarter 2014. Retained earnings of $2.8 billion increased $456.6 million (19.8) percent from first quarter 2014, while declining $233.2 million (1.6 percent) for noncommunity banks. The common equity Tier 1 capital ratio was 14.89 percent for community banks and 12.33 percent for noncommunity banks. Four Community Banks Failed in the First Quarter The number of FDIC-insured community banks totaled 5,946 at the end of first quarter 2015, down 91 banks from the previous quarter. Four community banks failed during the quarter. Author: Benjamin Tikvina, Financial Analyst Division of Insurance and Research (202) 898-6578 Small loans to businesses include loans to commercial borrowers up to $1 million, and farm loans up to $500,000. 3 FDIC Quarterly 17 2015, Volume 9, No. 2 TABLE I-B. Selected Indicators, FDIC-Insured Community Banks 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������������������������������������������������������������������������������������� Percentage of unprofitable institutions (%)�������������������������������������������������������������������� 2015* 0.96 8.61 10.66 1.29 0.10 1.83 3.55 10.61 5,946 5.82 2014* 0.87 8.04 10.49 1.62 0.17 1.28 3.57 0.76 6,233 7.64 2014 0.93 8.47 10.58 1.34 0.21 2.31 3.61 5.13 6,037 6.31 2013 0.90 8.28 10.44 1.73 0.32 0.33 3.59 14.63 6,306 8.40 2012 0.83 7.68 10.18 2.26 0.58 2.25 3.67 56.26 6,541 11.16 2011 0.55 5.19 9.98 2.84 0.87 1.60 3.74 206.68 6,798 16.34 2010 0.21 2.07 9.57 3.25 1.11 -2.26 3.71 211.83 7,014 22.16 * Through March 31, ratios annualized where appropriate. Asset growth rates are for 12 months ending March 31. TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks 1st Quarter 2015 5,946 439,114 4th Quarter 2014 6,037 442,277 1st Quarter 2014 6,233 449,424 %Change 1Q14-1Q15 -4.6 -2.3 $2,070,611 1,040,157 361,804 402,158 85,303 49,365 190,419 58,876 1,982 45,274 33,205 554 1,367,378 18,923 1,348,455 445,535 8,383 12,805 255,434 $2,064,097 1,039,743 364,964 400,389 85,100 50,059 190,491 59,003 1,828 48,598 31,147 590 1,368,392 18,989 1,349,403 448,768 8,750 12,589 244,586 $2,033,321 998,000 349,563 394,021 77,720 47,267 181,973 55,411 1,766 39,666 27,937 553 1,302,456 19,993 1,282,463 463,601 10,813 12,674 263,770 1.8 4.2 3.5 2.1 9.8 4.4 4.6 6.3 12.2 14.1 18.9 0.0 5.0 -5.3 5.1 -3.9 -22.5 1.0 -3.2 Total liabilities and capital���������������������������������������������������������������������������������������������� Deposits������������������������������������������������������������������������������������������������������������������� Domestic office deposits��������������������������������������������������������������������������������� Foreign office deposits������������������������������������������������������������������������������������ Brokered deposits�������������������������������������������������������������������������������������������� Estimated insured deposits������������������������������������������������������������������������������������� Other borrowed funds��������������������������������������������������������������������������������������������� Subordinated debt��������������������������������������������������������������������������������������������������� All other liabilities���������������������������������������������������������������������������������������������������� Total equity capital (includes minority interests)���������������������������������������������������� Bank equity capital������������������������������������������������������������������������������������������� 2,070,611 1,708,695 1,708,215 480 65,739 1,313,668 114,749 458 15,643 231,066 230,948 2,064,097 1,693,604 1,693,374 230 60,814 1,305,407 125,415 497 15,696 228,886 228,755 2,033,321 1,686,535 1,686,304 231 56,255 1,325,674 111,521 432 14,199 220,634 220,489 1.8 1.3 1.3 108.0 16.9 -0.9 2.9 6.2 10.2 4.7 4.7 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��������������������������������������������������������������������������������������� Full Year INCOME DATA 2014 Total interest income������������������������������������������������������������������� $75,693 Total interest expense����������������������������������������������������������������� 9,101 Net interest income�������������������������������������������������������������� 66,592 Provision for loan and lease losses�������������������������������������������� 2,536 Total noninterest income������������������������������������������������������������� 17,693 Total noninterest expense����������������������������������������������������������� 58,524 Securities gains (losses)������������������������������������������������������������� 561 Applicable income taxes������������������������������������������������������������� 5,191 Extraordinary gains, net�������������������������������������������������������������� 2 Total net income (includes minority interests)��������������������� 18,598 Bank net income������������������������������������������������������������ 18,574 Net charge-offs���������������������������������������������������������������������������� 2,730 Cash dividends���������������������������������������������������������������������������� 9,181 Retained earnings����������������������������������������������������������������������� 9,393 Net operating income����������������������������������������������������������� 18,150 9,853 18,096 10,064 190,941 1,920,671 85,200 259,622 247,346 14,139 57,557 Full Year 2013 $75,694 10,338 65,356 3,182 18,550 59,081 564 4,504 40 17,743 17,720 3,972 8,711 9,009 17,265 9,506 18,638 10,812 195,080 1,911,267 92,924 250,174 286,129 15,959 43,736 1st Quarter 2015 $19,002 2,167 16,835 541 4,683 14,799 245 1,513 0 4,910 4,900 354 2,139 2,762 4,720 10,803 21,954 11,458 204,549 1,875,129 80,207 244,532 237,593 15,082 44,395 1st Quarter 2014 $18,911 2,328 16,582 549 4,165 14,700 144 1,265 4 4,381 4,377 545 2,120 2,258 4,268 (dollar figures in millions) 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�������������������������������������������������������������������������������������������������������� FDIC Quarterly %Change 0.0 -12.0 1.9 -20.3 -4.6 -0.9 -0.6 15.2 -94.3 4.8 4.8 -31.3 5.4 4.3 5.1 -8.8 -17.6 -12.2 -6.7 2.4 6.2 6.2 4.1 -6.3 29.6 %Change 1Q14-1Q15 0.5 -6.9 1.5 -1.3 12.4 0.7 70.4 19.6 -88.1 12.1 11.9 -34.9 0.9 22.3 10.6 N/M - Not Meaningful 18 2015, Volume 9, No. 2 Quarterly Banking Profile TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks Prior Periods Adjusted for Mergers 1st Quarter 2015 5,946 439,114 4th Quarter 2014 5,946 438,536 1st Quarter 2014 5,946 436,570 %Change 1Q14-1Q15 0.0 0.6 $2,070,611 1,040,157 361,804 402,158 85,303 49,365 190,419 58,876 1,982 45,274 33,205 554 1,367,378 18,923 1,348,455 445,535 8,383 12,805 255,434 $2,037,595 1,022,049 356,077 395,697 83,500 49,269 188,285 59,939 2,090 48,783 31,523 580 1,349,999 18,839 1,331,160 443,328 8,732 12,302 242,072 $1,961,140 957,891 336,749 376,309 74,291 45,557 173,130 55,727 1,985 39,542 28,032 534 1,253,810 19,414 1,234,397 449,258 10,674 11,400 255,412 5.6 8.6 7.4 6.9 14.8 8.4 10.0 5.7 -0.1 14.5 18.5 3.7 9.1 -2.5 9.2 -0.8 -21.5 12.3 0.0 Total liabilities and capital���������������������������������������������������������������������������������������������� Deposits������������������������������������������������������������������������������������������������������������������� Domestic office deposits��������������������������������������������������������������������������������� Foreign office deposits������������������������������������������������������������������������������������ Brokered deposits�������������������������������������������������������������������������������������������� Estimated insured deposits������������������������������������������������������������������������������������� Other borrowed funds��������������������������������������������������������������������������������������������� Subordinated debt��������������������������������������������������������������������������������������������������� All other liabilities���������������������������������������������������������������������������������������������������� Total equity capital (includes minority interests)���������������������������������������������������� Bank equity capital������������������������������������������������������������������������������������������� 2,070,611 1,708,695 1,708,215 480 65,739 1,313,668 114,749 458 15,643 231,066 230,948 2,037,595 1,674,879 1,674,437 442 62,521 1,289,512 121,275 457 15,219 225,765 225,645 1,961,140 1,629,624 1,629,186 439 56,238 1,281,981 104,908 371 13,711 212,526 212,409 5.6 4.9 4.9 9.5 16.9 2.5 9.4 23.6 14.1 8.7 8.7 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��������������������������������������������������������������������������������������� Full Year INCOME DATA 2014 Total interest income������������������������������������������������������������������� $74,480 Total interest expense����������������������������������������������������������������� 8,863 Net interest income�������������������������������������������������������������� 65,617 Provision for loan and lease losses�������������������������������������������� 2,406 Total noninterest income������������������������������������������������������������� 17,350 Total noninterest expense����������������������������������������������������������� 57,507 Securities gains (losses)������������������������������������������������������������� 558 Applicable income taxes������������������������������������������������������������� 4,735 Extraordinary gains, net�������������������������������������������������������������� 2 Total net income (includes minority interests)��������������������� 18,879 Bank net income������������������������������������������������������������ 18,855 Net charge-offs���������������������������������������������������������������������������� 2,648 Cash dividends���������������������������������������������������������������������������� 8,892 Retained earnings����������������������������������������������������������������������� 9,963 Net operating income����������������������������������������������������������� 18,437 9,853 18,096 10,064 190,941 1,920,671 85,200 259,622 247,346 14,139 57,557 Full Year 2013 $71,486 9,752 61,733 3,220 17,500 55,856 551 4,066 40 16,683 16,661 4,071 8,074 8,587 16,206 9,494 18,397 10,949 192,176 1,886,695 88,982 247,776 283,093 13,950 42,845 1st Quarter 2015 $19,002 2,167 16,835 541 4,683 14,799 245 1,513 0 4,910 4,900 354 2,139 2,762 4,720 10,836 21,769 11,477 196,865 1,809,325 74,838 233,384 227,952 12,668 40,439 1st Quarter 2014 $18,034 2,222 15,812 559 3,979 13,978 140 1,185 4 4,213 4,210 569 1,904 2,305 4,102 (dollar figures in millions) 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�������������������������������������������������������������������������������������������������������� FDIC Quarterly %Change 4.2 -9.1 6.3 -25.3 -0.9 3.0 1.2 16.5 -94.3 13.2 13.2 -35.0 10.1 16.0 13.8 -9.1 -16.9 -12.3 -3.0 6.2 13.8 11.2 8.5 11.6 42.3 %Change 1Q14-1Q15 5.4 -2.5 6.5 -3.1 17.7 5.9 75.1 27.6 -88.1 16.5 16.4 -37.7 12.3 19.8 15.1 N/M - Not Meaningful 19 2015, Volume 9, No. 2 TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks Geographic Regions* First Quarter 2015 (dollar figures in millions) All Community Banks Number of institutions reporting����������������������������������� 5,946 Total employees (full-time equivalent)������������������������� 439,114 New York 698 87,039 Atlanta 734 58,469 Chicago 1,317 92,733 Kansas City 1,528 70,890 Dallas San Francisco 1,275 394 96,031 33,952 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������������������������������������������������������ $2,070,611 1,040,157 361,804 402,158 85,303 49,365 190,419 58,876 1,982 45,274 33,205 554 1,367,378 18,923 1,348,455 445,535 8,383 12,805 255,434 $528,904 305,536 123,670 107,005 15,734 16,270 44,483 12,822 464 493 10,024 151 373,207 4,443 368,764 102,149 1,157 4,019 52,814 $256,125 136,878 44,443 59,226 15,122 7,890 20,740 7,568 138 1,048 2,207 92 168,349 2,444 165,905 50,704 2,164 1,358 35,993 $388,074 193,421 71,410 70,562 11,578 11,738 35,151 11,714 437 7,039 5,786 63 253,049 3,746 249,303 87,462 1,722 2,156 47,431 $317,286 137,100 41,223 47,949 10,880 4,295 31,127 9,534 431 25,998 5,327 27 209,059 3,072 205,987 70,863 1,296 1,660 37,480 $409,540 181,004 60,235 74,107 24,931 4,527 41,705 13,555 314 8,491 7,018 116 251,656 3,464 248,192 100,398 1,549 2,632 56,769 $170,683 86,218 20,823 43,309 7,058 4,644 17,213 3,683 198 2,206 2,842 104 112,058 1,755 110,303 33,959 494 980 24,947 Total liabilities and capital�������������������������������������������� Deposits����������������������������������������������������������������� Domestic office deposits������������������������������� Foreign office deposits���������������������������������� Brokered deposits������������������������������������������ Estimated insured deposits��������������������������� Other borrowed funds������������������������������������������� Subordinated debt������������������������������������������������� All other liabilities�������������������������������������������������� Total equity capital (includes minority interests)�� Bank equity capital����������������������������������������� 2,070,611 1,708,695 1,708,215 480 65,739 1,313,668 114,749 458 15,643 231,066 230,948 528,904 419,190 418,827 362 22,599 314,786 44,687 283 5,264 59,480 59,430 256,125 213,542 213,501 41 7,184 164,569 12,209 34 1,734 28,606 28,589 388,074 322,548 322,522 26 11,580 263,174 19,003 67 2,911 43,544 43,523 317,286 265,013 265,013 0 9,495 212,059 15,854 4 1,816 34,600 34,598 409,540 346,217 346,217 0 9,405 255,799 16,252 7 2,450 44,613 44,588 170,683 142,186 142,135 51 5,477 103,282 6,744 63 1,468 20,222 20,221 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������������������������������������� 9,853 18,096 10,064 190,941 1,920,671 85,200 259,622 247,346 14,139 57,557 2,729 6,254 2,543 57,170 493,383 35,726 63,456 54,534 3,650 16,986 1,378 2,764 1,678 21,756 234,999 9,327 31,234 9,688 531 8,693 1,817 3,623 2,710 34,598 359,563 13,222 48,107 67,196 6,031 9,617 1,444 1,762 1,148 22,657 295,385 10,737 44,308 68,616 803 7,943 2,032 2,654 1,133 38,476 378,373 12,021 47,937 39,890 583 9,079 452 1,039 851 16,285 158,969 4,168 24,581 7,421 2,541 5,239 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�������������������������������������������� $19,002 2,167 16,835 541 4,683 14,799 245 1,513 0 4,910 4,900 354 2,139 2,762 4,720 $4,715 688 4,026 201 901 3,407 111 455 1 976 970 118 274 696 896 $2,418 277 2,141 68 590 2,014 33 183 -1 499 498 66 158 340 475 $3,493 393 3,100 74 1,224 2,931 29 331 1 1,017 1,016 83 582 434 992 $2,937 325 2,612 68 697 2,217 36 169 1 892 892 19 507 385 861 $3,861 361 3,500 127 889 2,969 27 202 0 1,117 1,116 70 492 624 1,095 $1,578 123 1,455 5 381 1,260 8 172 0 408 408 -2 124 284 402 * See Table V-A (page 11) for explanations. FDIC Quarterly 20 2015, Volume 9, No. 2 Quarterly Banking Profile Table IV-B. First Quarter 2015, FDIC-Insured Community Banks All Community Banks 1st Quarter 2015 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���������������������������������������������������������������� Net interest income to operating revenue���������������������� % of unprofitable institutions������������������������������������������ % of institutions with earnings gains������������������������������ 4.00 0.46 3.55 0.91 2.89 0.11 0.92 1.25 0.96 8.61 0.10 152.80 68.39 78.24 5.82 62.76 4th Quarter 2014 First Quarter 2015, Geographic Regions* New York 4.11 0.48 3.63 0.91 3.00 0.13 0.91 1.17 0.93 8.42 0.25 78.73 69.84 78.77 10.12 61.01 3.86 0.56 3.30 0.69 2.60 0.15 0.68 1.09 0.74 6.62 0.13 169.70 68.81 81.71 6.59 61.32 Atlanta Chicago 4.17 0.48 3.70 0.93 3.19 0.11 0.75 1.08 0.79 7.08 0.16 102.69 73.32 78.39 9.81 61.99 3.92 0.44 3.48 1.27 3.04 0.08 1.03 1.40 1.05 9.44 0.13 88.53 67.49 71.70 6.30 63.48 Kansas City Dallas 4.00 0.44 3.56 0.88 2.81 0.09 1.09 1.34 1.13 10.43 0.04 350.16 66.30 78.94 3.66 64.73 4.15 0.39 3.76 0.88 2.95 0.13 1.09 1.31 1.11 10.19 0.11 182.13 67.35 79.74 3.84 60.47 San Francisco 4.02 0.31 3.71 0.90 2.99 0.01 0.95 1.38 0.97 8.18 -0.01 -204.32 68.35 79.24 10.15 64.21 Table V-B. Full Year 2014, FDIC-Insured Community Banks All Community Banks Full Year 2014 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���������������������������������������������������������������� Net interest income to operating revenue���������������������� % of unprofitable institutions������������������������������������������ % of institutions with earnings gains������������������������������ 4.10 0.49 3.61 0.89 2.93 0.13 0.91 1.19 0.93 8.47 0.21 92.89 69.10 79.01 6.31 63.72 Full Year 2013 Full Year 2014, Geographic Regions* New York 4.16 0.57 3.59 0.94 2.99 0.16 0.87 1.12 0.90 8.28 0.32 80.10 69.87 77.89 8.40 53.50 3.93 0.60 3.34 0.64 2.66 0.17 0.61 0.96 0.64 5.88 0.21 117.72 70.61 82.84 8.16 59.07 Atlanta 4.32 0.53 3.79 0.86 3.21 0.12 0.77 1.01 0.79 7.21 0.28 65.70 73.94 80.15 10.15 65.15 Chicago 4.02 0.47 3.55 1.20 3.08 0.12 0.99 1.29 1.00 9.13 0.29 66.82 68.46 73.17 7.85 59.49 Kansas City Dallas 4.09 0.50 3.59 0.89 2.79 0.10 1.13 1.36 1.15 10.53 0.16 98.17 65.69 78.87 3.76 65.87 4.25 0.42 3.84 0.91 3.02 0.13 1.11 1.32 1.13 10.45 0.18 116.72 67.55 79.49 3.70 66.82 San Francisco 4.15 0.34 3.81 0.88 3.08 0.04 0.97 1.31 0.98 8.28 0.07 90.18 69.59 80.11 8.96 65.17 * See Table V-A (page 11) for explanations. FDIC Quarterly 21 2015, Volume 9, No. 2 Table VI-B. Loan Performance, FDIC-Insured Community Banks Geographic Regions* March 31, 2015 All Community Banks 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���������������������������������������������������������� 0.70 0.63 0.49 0.24 0.50 1.08 0.59 1.61 1.56 1.62 0.61 0.72 0.68 0.77 0.54 0.19 0.60 0.96 0.52 2.99 2.11 3.02 0.35 0.73 0.82 0.79 0.54 0.24 0.47 1.34 0.66 1.32 1.15 1.32 0.49 0.82 0.75 0.57 0.54 0.41 0.48 1.15 0.60 0.97 1.09 0.97 0.30 0.72 0.65 0.48 0.47 0.28 0.32 0.92 0.66 0.96 2.34 0.90 0.83 0.69 0.80 0.61 0.47 0.31 0.52 1.34 0.60 1.77 0.96 1.79 0.63 0.81 0.37 0.39 0.25 0.15 0.40 0.63 0.49 0.60 0.83 0.59 0.59 0.40 Percent of Loans Noncurrent** 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���������������������������������������������������������� 1.43 2.39 1.33 0.54 0.80 1.67 1.11 0.71 0.95 0.70 0.91 1.32 1.68 2.82 1.55 0.27 0.92 2.17 1.27 0.97 1.34 0.95 4.00 1.68 1.78 3.90 1.58 1.03 0.77 1.57 1.15 0.82 0.55 0.83 0.75 1.64 1.61 2.81 1.51 1.11 0.96 1.83 1.17 0.45 0.86 0.44 0.40 1.43 0.93 1.94 1.10 0.40 0.44 0.93 1.04 0.48 1.11 0.45 0.36 0.84 1.14 1.35 1.04 1.06 0.59 1.25 0.94 0.88 0.61 0.89 0.51 1.05 0.95 1.88 0.89 0.27 0.59 0.99 1.06 0.34 0.65 0.33 0.53 0.93 Percent of Loans Charged-Off (net, YTD) 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���������������������������������������������������������� 0.06 -0.02 0.05 0.04 0.11 0.09 0.16 0.72 4.85 0.57 0.12 0.10 0.08 0.11 0.08 0.03 0.17 0.09 0.16 0.98 4.60 0.84 0.21 0.13 0.11 0.16 0.12 0.18 0.10 0.09 0.25 0.64 1.19 0.63 0.27 0.16 0.10 0.09 0.06 0.07 0.18 0.14 0.20 0.53 4.27 0.39 0.09 0.13 -0.02 -0.53 0.03 -0.02 0.03 0.06 0.06 0.70 10.61 0.22 0.04 0.04 0.05 0.01 0.03 0.02 0.04 0.09 0.20 0.73 1.30 0.72 0.10 0.11 -0.08 -0.17 -0.08 0.00 -0.10 -0.03 0.05 0.56 2.39 0.45 0.55 -0.01 Loans Outstanding (in billions) 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���������������������������������������������������������� $1,040.2 85.3 402.2 82.0 49.4 361.8 190.4 58.9 2.0 56.9 78.5 1,367.9 $305.5 15.7 107.0 41.1 16.3 123.7 44.5 12.8 0.5 12.4 10.5 373.4 $136.9 15.1 59.2 6.0 7.9 44.4 20.7 7.6 0.1 7.4 3.3 168.4 $193.4 11.6 70.6 14.0 11.7 71.4 35.2 11.7 0.4 11.3 12.8 253.1 $137.1 10.9 47.9 7.2 4.3 41.2 31.1 9.5 0.4 9.1 31.3 209.1 $181.0 24.9 74.1 6.1 4.5 60.2 41.7 13.6 0.3 13.2 15.5 251.8 $86.2 7.1 43.3 7.7 4.6 20.8 17.2 3.7 0.2 3.5 5.0 112.2 Memo: Unfunded Commitments (in millions) Total Unfunded Commitments��������������������������������������������� Construction and development: 1-4 family residential�� Construction and development: CRE and other����������� Commercial and industrial�������������������������������������������� 259,622 19,504 46,100 87,943 63,456 4,099 13,704 20,067 31,234 3,747 6,646 9,275 48,107 2,018 6,458 18,068 44,308 2,146 5,305 14,586 47,937 5,714 10,576 16,807 24,581 1,779 3,411 9,140 * See Table V-A (page 11) 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 22 2015, Volume 9, No. 2 Quarterly Banking Profile INSURANCE FUND INDICATORS ■ ■ ■ ■ Insured Deposits Grow by 2.3 Percent DIF Reserve Ratio Rises 2 Basis Points to 1.03 Percent Four Institutions Fail During First Quarter Changes to Risk-Based Assessments Go Into Effect During the first quarter of 2015, total assets of the nation’s 6,419 FDIC-insured commercial banks and savings institutions increased by $224.3 billion (1.4 percent). Domestic office deposits increased by $210.2 billion (2.0 percent). Domestic savings and interest-bearing checking accounts increased by $146.5 billion (2.5 percent), noninterest-bearing deposits increased by $84.2 billion (3.0 percent), and time deposits decreased by $20.5 billion (1.2 percent). Deposits held in foreign offices decreased by $15.8 billion (1.1 percent). Asset growth was also supported by a $30.7 billion increase in equity capital and a $10.7 billion increase in securities sold under agreements to repurchase. Federal Home Loan Bank advances decreased by $31.2 billion during the quarter. $65,296 million (unaudited). Assessment income of $2.2 billion and a negative provision for insurance losses of $426 million were the largest sources of the increase to the DIF during the quarter. Interest earned and unrealized gains on securities added $291 million to the DIF, while operating expenses net of other revenue reduced the fund by $390 million. The DIF’s reserve ratio rose to 1.03 percent on March 31, 2015, from 1.01 percent at December 31, 2014, and 0.80 percent four quarters ago. The March 31, 2015, reserve ratio is the highest for the DIF since March 31, 2008, when the reserve ratio was 1.19 percent. Four FDIC-insured institutions, with combined assets of $6.3 billion, failed during the first quarter of 2015, at an estimated cost to the DIF of $848 million. Estimated insured deposits (including U.S. branches of foreign banks) increased by 2.3 percent ($139.7 billion) during the first quarter of 2015 to $6.3 trillion. Over the past four quarters, estimated insured deposits increased by 3.6 percent ($222.5 billion). For institutions existing as of December 31, 2014, and March 31, 2015, insured deposits increased during the first quarter at 4,679 institutions (73 percent), decreased at 1,716 institutions (27 percent), and remained unchanged at 33 institutions. Effective April 1, 2011, the deposit insurance assessment base changed to average consolidated total assets minus average tangible equity.1 Revisions to insurance assessment rates and risk-based pricing rules for large banks (banks with assets greater than $10 billion) also became effective on that date.2 Table 1 shows the distribution of the assessment base by institution asset size category as of the first quarter. There is an additional adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank. 2 The Fourth Quarter 2010 Quarterly Banking Profile includes a more detailed explanation of these changes. 1 The Deposit Insurance Fund (DIF) increased by 4.0 percent ($2.5 billion) during the first quarter to Table 1 Distribution of the Assessment Base for FDIC-Insured Institutions* by Asset Size Data as of March 31, 2015 Asset Size Less Than $1 Billion $1 - $10 Billion $10 - $50 Billion $50 - $100 Billion Over $100 Billion Total Number of Institutions 5,725 582 75 14 23 6,419 Percent of Assessment Base** Total Institutions ($ Bil.) 89.2 $1,166.7 9.1 1,386.8 1.2 1,449.4 0.2 917.2 0.4 8,567.1 100.0 13,487.3 Percent of Base 8.7 10.3 10.7 6.8 63.5 100.0 * Excludes insured U.S. branches of foreign banks. ** Average consolidated total assets minus average tangible equity, with adjustments for banker’s banks and custodial banks. FDIC Quarterly 23 2015, Volume 9, No. 2 Custodial Banks Effective January 1, 2015, the Final Rule conforms the calculation of the deduction to the assessment base for custodial banks to the new asset risk weights under the standardized approach in the new regulatory capital rules. The revision applies to all custodial banks. The assessment base deduction for custodial banks will continue to be defined as the daily or weekly average of a certain amount of specified low-risk, liquid assets, subject to the limitation that the daily or weekly average value of these assets cannot exceed the daily or weekly average value of deposits that are classified as transaction accounts and are identified by the bank as being directly linked to a fiduciary or custodial and safekeeping account asset. (See the Final Rule for a detailed explanation of the changes to the deduction for custodial banks.3) Dodd-Frank requires that, for at least five years, the FDIC must make available to the public the reserve ratio and the Designated Reserve Ratio (DRR) using both estimated insured deposits and the new assessment base. As of March 31, 2015, the FDIC reserve ratio would have been 0.48 percent using the new assessment base (compared to 1.03 percent using estimated insured deposits), and the 2 percent DRR using estimated insured deposits would have been 0.94 percent using the new assessment base. Changes to Risk-Based Assessments On November 18, 2014, the FDIC Board of Directors adopted a Final Rule on assessments that revises the FDIC’s risk-based deposit insurance assessment system to reflect recent changes in regulatory capital rules. Specifically, the Final Rule (1) revises the ratios and thresholds for capital evaluations used to determine assessments, (2) revises the calculation of the deduction to the assessment base for custodial banks, and (3) requires that highly complex institutions measure counterparty exposure for assessment purposes using the Basel III standardized approach. Highly Complex Institutions The Final Rule requires that all highly complex institutions measure counterparty exposure for assessment purposes using the Basel III standardized approach credit equivalent amount for derivatives and the Basel III standardized approach exposure amount for securities financing transactions in the regulatory capital rules. The amount of derivatives exposures will be reduced by qualifying cash collateral.4 (See the Final Rule for a detailed explanation of the changes to the measurement of counterparty exposure for assessment purposes.5) Capital Evaluations for Assessments Changes to regulatory capital rules that became effective at the start of this year include a new common equity Tier 1 capital ratio and new prompt corrective action thresholds for the existing Tier 1 risk-based capital ratio. Therefore, effective January 1, 2015, to conform capital evaluations for assessment purposes to the new capital rules, the ratios and ratio thresholds for determining capital evaluations for deposit insurance assessment purposes will be as shown in Table 2. Author: Kevin Brown, Senior Financial Analyst Division of Insurance and Research (202) 898-6817 The recent changes to regulatory capital rules also introduced a supplementary leverage ratio that applies to some institutions and prompt corrective action thresholds for that ratio, to take effect at the start of 2018. Therefore, effective January 1, 2018, to conform capital evaluations for assessment purposes to regulatory capital rules, the ratios and ratio thresholds for determining capital evaluations for deposit insurance assessment purposes will be as shown in Table 3. https://www.fdic.gov/news/news/financial/2014/fil14057a.pdf. In general, a highly complex bank is a bank with at least $50 billion in total assets, controlled by a U.S. parent with at least $500 billion in assets; or a bank that is a processing bank or trust company with fiduciary assets of at least $500 billion. 5 https://www.fdic.gov/news/news/financial/2014/fil14057a.pdf. 3 4 FDIC Quarterly 24 2015, Volume 9, No. 2 Quarterly Banking Profile Table 2 Capital Ratios Used to Determine Capital Evaluations for Assessment Purposes Effective January 1, 2015 Capital Evaluations Well Capitalized Adequately Capitalized* Undercapitalized Total Risk-Based Capital Ratio Tier 1 Risk-Based Capital Ratio Common Equity Tier 1 Capital Ratio Leverage Ratio ≥10% ≥8% ≥6.5% ≥8% ≥6% ≥4.5% Does not qualify as either Well Capitalized or Adequately Capitalized ≥5% ≥4% * An institution is Adequately Capitalized if it is not Well Capitalized, but it satisfies each of the listed capital ratio standards for Adequately Capitalized. Table 3 Capital Ratios Used to Determine Capital Evaluations for Assessment Purposes Effective January 1, 2018* Capital Evaluations Well Capitalized Adequately Capitalized** Undercapitalized Total RiskBased Capital Ratio ≥10% ≥8% Tier 1 Risk-Based Capital Ratio Common Equity Tier 1 Capital Ratio Leverage Ratio Supplementary Leverage Ratio (Advanced Approaches Banking Organizations) Supplementary Leverage Ratio (Subsidiary IDIs of Covered BHCs) ≥8% ≥6.5% ≥5% Not applicable ≥6% ≥4.5% ≥4% ≥3% Does not qualify as either Well Capitalized or Adequately Capitalized ≥6% ≥3% * In general, an insured depository institution (IDI) is an advanced approaches bank if it has total consolidated assets of $250 billion or more, has total consolidated on-balance sheet foreign exposures of $10 billion or more, or is a subsidiary of an IDI, bank holding company (BHC), or savings and loan holding company that uses the advanced approaches to calculate risk-weighted assets. A covered BHC is any top-tier U.S. BHC with more than $700 billion in total consolidated assets or more than $10 trillion in assets under custody. ** An institution is Adequately Capitalized if it is not Well Capitalized, but it satisfies each of the listed capital ratio standards for Adequately Capitalized. FDIC Quarterly 25 2015, Volume 9, No. 2 Table I-C. Insurance Fund Balances and Selected Indicators Deposit Insurance Fund* 1st 4th 3rd 2nd Quarter Quarter Quarter Quarter 2014 2013 2013 2013 $47,191 $40,758 $37,871 $35,742 1st Quarter 2015 $62,780 4th Quarter 2014 $54,320 3rd Quarter 2014 $51,059 2nd Quarter 2014 $48,893 2,189 2,030 2,009 2,224 2,393 60 70 80 87 45 0 396 0 408 0 406 0 428 0 422 -426 -6,787 -1,663 -204 348 6 -43 6 6 9 231 2,516 24 8,460 -91 3,261 73 2,166 Ending Fund Balance������� Percent change from four quarters earlier������� 65,296 62,780 54,320 33.55 33.03 33.27 Reserve Ratio (%)������������� 1.03 1.01 6,343,288 3.64 (dollar figures in millions) Beginning Fund Balance��� 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��� 4th Quarter 2012 $25,224 3rd Quarter 2012 $22,693 2nd Quarter 2012 $15,292 1st Quarter 2012 $11,827 2,339 2,526 2,645 2,937 2,833 2,933 3,694 23 34 54 -9 66 -8 81 20 302 436 156 298 0 439 0 436 0 469 0 442 0 407 0 460 -4,588 -539 -33 -499 -3,344 -84 -807 12 9 46 51 55 1,878 57 4,095 63 25 1,702 -277 6,433 71 2,887 -96 2,129 30 2,784 -22 7,734 7 2,531 -108 7,401 160 3,465 51,059 48,893 47,191 40,758 37,871 35,742 32,958 25,224 22,693 15,292 34.82 36.79 43.19 61.58 66.88 133.73 178.67 222.85 479.49 NM 0.89 0.84 0.80 0.79 0.68 0.64 0.60 0.45 0.35 0.32 0.22 6,203,596 6,134,428 6,102,158 6,120,778 6,010,853 5,967,558 5,951,124 5,999,614 7,405,043 7,248,466 7,081,206 7,031,331 3.21 2.80 2.54 2.02 -18.83 -17.67 -15.96 -14.67 6.19 7.32 8.55 10.22 Domestic Deposits����������� 10,616,373 10,408,062 10,213,072 10,099,337 Percent change from four quarters earlier������� 6.56 5.93 6.04 7.16 9,962,453 9,825,398 9,631,580 9,424,503 9,454,658 9,474,585 9,084,803 8,937,725 8,848,706 5.37 3.70 6.02 5.45 6.85 7.88 6.55 8.40 10.51 6,739 6,821 6,900 6,949 7,028 7,092 7,190 7,254 7,317 Estimated Insured Deposits**�������������������������� Percent change from four quarters earlier������� Number of Institutions Reporting����������������������� 6,428 6,518 6,598 6,665 2,224 1st Quarter 2013 $32,958 DIF Reserve Ratios Deposit Insurance Fund Balance and Insured Deposits ($ Millions) Percent of Insured Deposits 1.01 0.79 0.60 0.64 0.80 0.84 1.03 0.89 3/12 6/12 $15,292 22,693 7,081,206 9/12 25,224 7,248,466 12/12 32,958 7,405,043 3/13 35,742 5,999,614 6/13 37,871 5,951,124 9/13 40,758 5,967,558 12/13 47,191 6,010,853 3/14 48,893 6,120,778 6/14 51,059 6,102,158 9/14 54,320 6,134,428 0.35 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 $7,031,331 3/12 0.68 0.22 DIF-Insured Deposits 6/12 0.45 0.32 DIF Balance 12/14 62,780 6,203,596 3/15 65,296 6,343,288 Table II-C. Problem Institutions and Failed/Assisted Institutions (dollar figures in millions) Problem Institutions Number of institutions���������������������������������������������������������������������� Total assets��������������������������������������������������������������������������������������� 2015*** 253 $60,276 2014*** 411 $126,106 2014 291 $86,712 2013 2012 2011 2010 467 $152,687 651 $232,701 813 $319,432 884 $390,017 Failed Institutions 51 92 Number of institutions���������������������������������������������������������������������� 4 5 18 24 157 $11,617 $34,923 Total assets****��������������������������������������������������������������������������������� $6,299 $718 $2,914 $6,044 $92,085 Assisted Institutions 0 0 Number of institutions���������������������������������������������������������������������� 0 0 0 0 0 $0 $0 $0 $0 $0 $0 Total assets��������������������������������������������������������������������������������������� $0 * Quarterly financial statement results are unaudited. NM - Not meaningful ** Beginning in the third quarter of 2009, estimates of insured deposits are based on a $250,000 general coverage limit. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) temporarily provided unlimited coverage for noninterest-bearing transaction accounts for two years beginning December 31, 2010, and ending December 31, 2012. *** Through March 31. **** Total assets are based on final Call Reports submitted by failed institutions. FDIC Quarterly 26 2015, Volume 9, No. 2 Quarterly Banking Profile Table III-C. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) March 31, 2015 Commercial Banks and Savings Institutions Number of Institutions Total Assets Domestic Deposits* Est. Insured Deposits FDIC-Insured Commercial Banks����������������������������������������������� FDIC-Supervised������������������������������������������������������������������� OCC-Supervised�������������������������������������������������������������������� Federal Reserve-Supervised������������������������������������������������� 5,570 3,671 1,050 849 $14,736,631 2,326,461 10,116,115 2,294,055 $9,775,364 1,821,262 6,409,659 1,544,443 $5,655,476 1,333,868 3,538,023 783,585 FDIC-Insured Savings Institutions���������������������������������������������� OCC-Supervised Savings Institutions����������������������������������� FDIC-Supervised Savings Institutions����������������������������������� 849 436 413 1,041,431 684,087 357,343 802,782 533,765 269,017 659,289 442,319 216,970 Total Commercial Banks and Savings Institutions���������������������� 6,419 15,778,062 10,578,146 6,314,765 Other FDIC-Insured Institutions U.S. Branches of Foreign Banks������������������������������������������������� 9 114,229 38,226 28,524 Total FDIC-Insured Institutions���������������������������������������������������� .. 6,428 15,892,292 10,616,373 6,343,288 * Excludes $1.4 trillion in foreign office deposits, which are not FDIC insured. Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range Quarter Ending December 31, 2014 (dollar figures in billions) Number of Annual Rate in Basis Points Institutions 2.50-5.00 1,517 5.01-7.50 3,088 7.51-10.00 1,091 10.01-15.00 509 15.01-20.00 25 20.01-25.00 242 25.01-30.00 3 30.01-35.00 42 greater than 35.00 1 Percent of Total Institutions 23.27 47.38 16.74 7.81 0.38 3.71 0.05 0.64 0.02 Amount of Assessment Base* $3,350.0 8,048.5 1,311.3 473.4 71.8 68.3 0.4 8.9 6.0 Percent of Total Assessment Base 25.11 60.34 9.83 3.55 0.54 0.51 0.00 0.07 0.05 * Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, as required by the Dodd-Frank Act. FDIC Quarterly 27 2015, Volume 9, No. 2 Quarterly Banking Profile Notes to Users The fourth step includes organizations that operate within a limited geographic scope. This limitation of scope is used as a proxy measure for a bank’s relationship approach to banking. Banks that operate within a limited market area have more ease in managing relationships at a personal level. Under this step, four criteria are applied to each banking organization. They include both a minimum and maximum number of total banking offices, a maximum level of deposits for any one office, and location-based criteria. The limits on the number of and deposits per office are gradually adjusted upward over time. For banking offices, banks must have more than one office, and the maximum number of offices starts at 40 in 1985 and reaches 75 in 2010. The maximum level of deposits for any one office is $1.25 billion in deposits in 1985 and $5 billion in deposits in 2010. The remaining geographic limitations are also based on maximums for the number of states (fixed at 3) and large metropolitan areas (fixed at 2) in which the organization maintains offices. Branch office data are based on the most recent data from the annual June 30 Summary of Deposits Survey that are available at the time of publication. Finally, the definition establishes an asset-size limit, also adjusted upward over time from $250 million in 1985 to $1 billion in 2010, below which the limits on banking activi ties and geographic scope are waived. This final step acknowledges the fact that most of those small banks that are not excluded as specialty banks meet the requirements for banking activities and geographic limits in any event. 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 s avings 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. Tables I-B through VI-B. Summary of FDIC Research Definition of Community Banking Organizations The information presented in Tables I-B through VI-B is aggregated for all FDIC-insured commercial banks and savings institutions meeting the criteria for community banks that were developed for the FDIC’s Community Banking Study, published in December, 2012: http://fdic.gov/regulations/ resources/cbi/report/cbi-full.pdf. The determination of which insured institutions are considered community banks is based on five steps. The first step in defining a community bank is to aggregate all charter-level data reported under each holding company into a single banking organization. This aggregation applies both to balance-sheet measures and the number and location of banking offices. Under the FDIC definition, if the banking organization is designated as a community bank, every charter reporting under that organization is also considered a community bank when working with data at the charter level. The second step is to exclude any banking organization where more than 50 percent of total assets are held in certain specialty banking charters, including: credit card specialists, consumer nonbank banks, industrial loan companies, trust companies, bankers’ banks, and banks holding 10 percent or more of total assets in foreign offices. Once the specialty organizations are removed, the third step involves including organizations that engage in basic banking activities as measured by the total loans-to-assets ratio (greater than 33 percent) and the ratio of core deposits to assets (greater than 50 percent). Core deposits are defined as nonbrokered deposits in domestic offices. Analysis of the underlying data shows that these thresholds establish meaningful levels of basic lending and deposit gathering and still allow for a degree of diversity in how individual banks construct their balance sheets. FDIC Quarterly Community banks are designated at the level of the banking. (All charters under designated holding companies are considered community banking charters.) Exclude: Any organization with: — No loans or no core deposits — Foreign Assets ≥ 10% of total assets — More than 50% of assets in certain specialty banks, including: • credit card specialists • consumer nonbank banks1 • industrial loan companies • trust companies • bankers’ banks Include: All remaining banking organizations with: — Total assets < indexed size threshold 2 — Total assets ≥ indexed size threshold, where: • Loan to assets > 33% • Core deposits to assets > 50% • More than 1 office but no more than the indexed maximum number of offices.3 Consumer nonbank banks are financial institutions with limited charters that can make commercial loans or take deposits, but not both. 2 Asset size threshold indexed to equal $250 million in 1985 and $1 billion in 2010. 3 Maximum number of offices indexed to equal 40 in 1985 and 75 in 2010. 1 29 2015, Volume 9, No. 2 • Number of large MSAs with offices ≤ 2 • Number of states with offices ≤ 3 • No single office with deposits > indexed maximum branch deposit size.4 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. Tables I-C through IV-C. A separate set of tables (Tables I-C through IV-C) 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. ACCOUNTING CHANGES Accounting by Private Companies for Identifiable Intangible Assets in a Business Combination In December 2014, the FASB issued ASU No. 2014-18, “Accounting for Identifiable Intangible Assets in a Business Combination,” which is a consensus of the Private Company Council (PCC). This ASU provides an accounting alternative that permits a private company, as defined in U.S. GAAP (and discussed in a later section of these Supple mental Instructions), to simplify the accounting for certain intangible assets. The accounting alternative applies when a private company is required to recognize or otherwise consider the fair value of intangible assets as a result of certain transactions, including when applying the acquisition method to a business combination under ASC Topic 805, Business Combinations (formerly FASB Statement No. 141 (revised 2007), “Business Combinations”). Under ASU 2014-18, a private company that elects the accounting alternative should no longer recognize separately from goodwill: • Customer-related intangible assets unless they are capable of being sold or licensed independently from the other assets of a business, and • Noncompetition agreements. However, because mortgage servicing rights and core deposit intangibles are regarded as capable of being sold or licensed independently, a private company that elects this accounting alternative must recognize these intangible assets separately from goodwill, initially measure them at fair value, and subsequently measure them in accordance with ASC Topic 350, Intangibles–Goodwill and Other (formerly FASB Statement No. 142, “Goodwill and Other Intangible Assets”). A private company that elects the accounting alternative in ASU 2014-18 also must adopt the private company goodwill accounting alternative described in ASU 2014-02, “Accounting for Goodwill.” However, a private company that elects the goodwill accounting alternative in ASU 2014-02 is not required to adopt the accounting alternative for identifiable intangible assets in ASU 2014-18. A private company’s decision to adopt ASU 2014-18 must be made upon the occurrence of the first business combination (or other transaction within the scope of the ASU) in fiscal years beginning after December 15, 2015. The effective date of the private company’s decision to adopt the accounting alternative for identifiable intangible assets depends on the timing of that first transaction. If the first transaction occurs in the private company’s first fiscal year beginning after December 15, 2015, the adoption will be effective for that fiscal year’s annual financial reporting period and all interim and annual periods thereafter. If 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. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) This information is stored on and retrieved from the FDIC’s Research Information System (RIS) database. 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. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-ofperiod 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. For the community bank subgroup, growth rates will reflect changes over time in the number and identities of institutions designated as community banks, as well as changes in the assets and liabilities, and income and expenses of group members. Unless indicated otherwise, growth rates are not adjusted for mergers or other changes in the composition of the community bank subgroup. Maximum branch deposit size indexed to equal $1.25 billion in 1985 and $5 billion in 2010. 4 FDIC Quarterly 30 2015, Volume 9, No. 2 Quarterly Banking Profile the first transaction occurs in a fiscal year beginning after December 15, 2016, the adoption will be effective in the interim period that includes the date of the transaction and subsequent interim and annual periods thereafter. Early application of the intangibles accounting alternative is permitted for any annual or interim period for which a private company’s financial statements have not yet been made available for issuance. Customer-related intangible assets and noncompetition agreements that exist as of the beginning of the period of adoption should continue to be accounted for separately from goodwill, i.e., such existing intangible assets should not be combined with goodwill. A bank or savings association that meets the private company definition in U.S. GAAP is permitted, but not required, to adopt ASU 2014-18 for Call Report purposes and may choose to early adopt the ASU, provided it also adopts the private company goodwill accounting alternative. If a private institution issues U.S. GAAP financial statements and adopts ASU 2014-18, it should apply the ASU’s intangible asset accounting alternative in its Call Report in a manner consistent with its reporting of intangible assets in its financial statements. For additional information on the private company accounting alternative for identifiable intangible assets, institutions should refer to ASU 2014-18, which is available at http://www.fasb.org/jsp/FASB/Page/SectionPage&cid= 1176156316498. Private Company Accounting Alternatives, Including Accounting for Goodwill In May 2012, the Financial Accounting Foundation, the independent private sector organization responsible for the oversight of the FASB, approved the establishment of the PCC to improve the process of setting accounting standards for private companies. The PCC is charged with working jointly with the FASB to determine whether and in what circumstances to provide alternative recognition, measurement, disclosure, display, effective date, and transition guidance for private companies reporting under U.S. GAAP. Alternative guidance for private companies may include modifications or exceptions to otherwise applicable existing U.S. GAAP standards. The banking agencies have concluded that a bank or savings association that is a private company, as defined in U.S. GAAP (as discussed in the next section of these Supplemental Instructions), is permitted to use private company accounting alternatives issued by the FASB when preparing its Call Reports, except as provided in 12 U.S.C. 1831n(a) as described in the following sentence. If the agencies determine that a particular accounting principle within U.S. GAAP, including a private company accounting alternative, is inconsistent with the statutorily specified supervisory objectives, the agencies may prescribe an accounting principle for regulatory reporting purposes that is no less stringent than U.S. GAAP. In such a situation, an institution would not be permitted to use that particular private company accounting alternative or other accounting principle within U.S. GAAP for Call Report purposes. The agencies would provide appropriate notice if they were to disallow any accounting alternative under the statutory process. On January 16, 2014, the FASB issued ASU No. 2014-02, “Accounting for Goodwill,” which is a consensus of the PCC. This ASU generally permits a private company to elect to amortize goodwill on a straight-line basis over a period of ten FDIC Quarterly years (or less than ten years if more appropriate) and apply a simplified impairment model to goodwill. In addition, if a private company chooses to adopt the ASU’s goodwill accounting alternative, the ASU requires the private company to make an accounting policy election to test goodwill for impairment at either the entity level or the reporting unit level. Goodwill must be tested for impairment when a triggering event occurs that indicates that the fair value of an entity (or a reporting unit) may be below its carrying amount. In contrast, U.S. GAAP does not otherwise permit goodwill to be amortized, instead requiring goodwill to be tested for impairment at the reporting unit level annually and between annual tests in certain circumstances. The ASU’s goodwill accounting alternative, if elected by a private company, is effective prospectively for new goodwill recognized in annual periods beginning after December 15, 2014, and in interim periods within annual periods beginning after December 15, 2015. Goodwill existing as of the beginning of the period of adoption is to be amortized prospectively over ten years (or less than ten years if more appropriate). The ASU states that early application of the goodwill accounting alternative is permitted for any annual or interim period for which a private company’s financial statements have not yet been made available for issuance. A bank or savings association that meets the private company definition in ASU 2014-02, as discussed in the following section of these Supplemental Instructions (i.e., a private institution), is permitted, but not required, to adopt this ASU for Call Report purposes and may choose to early adopt the ASU. If a private institution issues U.S. GAAP financial statements and adopts the ASU, it should apply the ASU’s goodwill accounting alternative in its Call Report in a manner consistent with its reporting of goodwill in its financial statements. Thus, for example, a private institution with a calendar year fiscal year that chooses to adopt ASU 2014-02 must apply the ASU’s provisions in its December 31, 2015, and subsequent quarterly Call Reports unless early application of the ASU is elected. If a private institution with a calendar year fiscal year chooses to early adopt ASU 2014-02 for first quarter 2015 financial reporting purposes, the institution may implement the provisions of the ASU in its Call Report for March 31, 2015. This would require the private institution to report in its first quarter 2015 Call Report three months’ amortization of goodwill existing as of January 1, 2015, and the amortization of any new goodwill recognized in the first three months of 2015. Goodwill amortization expense should be reported unless the amortization is associated with a discontinued operation, in which case the goodwill amortization should be included within the results of discontinued operations and reported as “Extraordinary items and other adjustments, net of income taxes.” For additional information on the private company accounting alternative for goodwill, institutions should refer to ASU 2014-02, which is available at http://www.fasb.org/jsp/FASB/ Page/SectionPage&cid=1176156316498. Definitions of Private Company and Public Business Entity According to ASU No. 2014-02, “Accounting for Goodwill,” a private company is a business entity that is not a public business entity. ASU No. 2013-12, “Definition of a Public Business Entity,” which was issued in December 2013, added this term to the Master Glossary in the Accounting Standards Codification. This ASU states that a business entity, such as 31 2015, Volume 9, No. 2 a bank or savings association, that meets any one of five criteria set forth in the ASU is a public business entity for reporting purposes under U.S. GAAP, including for Call Report purposes. An institution that is a public business entity is not permitted to apply the private company goodwill accounting alternative discussed in the preceding section when preparing its Call Report. For additional information on the definition of a public business entity, institutions should refer to ASU 2013-12, which is available at http://www.fasb.org/jsp/FASB/Page/ SectionPage&cid=1176156316498. Reporting Certain Government-Guaranteed Mortgage Loans Upon Foreclosure In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-14, “Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure,” to address diversity in practice for how government-guaranteed mortgage loans are recorded upon foreclosure. The ASU updates guidance contained in ASC Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors (formerly FASB Statement No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings,” as amended), because U.S. GAAP previously did not provide specific guidance on how to categorize or measure foreclosed mortgage loans that are government guaranteed. This guidance is applicable to fully and partially governmentguaranteed mortgage loans. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. This other receivable should be reported in “All other assets.” Any interest income earned on the other receivable would be reported in “Other interest income.” Other real estate owned would not be recognized by the institution. For institutions that are public business entities, as defined under U.S. GAAP, ASU 2014-14 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. For example, institutions with a calendar year fiscal year that are public business entities must apply the ASU in their Call Reports beginning March 31, 2015. However, institutions that are not public business entities (i.e., that are private companies) are not required to apply the guidance in ASU 2014-14 until annual periods ending after December 15, 2015, and interim periods beginning after December 15, 2015. Thus, institutions with a calendar year fiscal year that are private companies must apply the ASU in their December 31, 2015, and subsequent quarterly Call Reports. Earlier adoption of the guidance in ASU 201414 is permitted if the institution has already adopted the amendments in ASU No. 2014-04, “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure.” Entities can elect to apply ASU 2014-14 on either a modified retrospective transition basis or a prospective transition basis. For additional information, institutions should refer to ASU 2014-14, which is available at http://www.fasb.org/jsp/FASB/Page/SectionPage&cid= 1176156316498. Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure In January 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-04, “Reclassification of Residential FDIC Quarterly Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” to address diversity in practice for when certain loan receivables should be derecognized and the real estate collateral recognized. The ASU updated guidance contained in Accounting Standards Codification Subtopic 310-40, Receivables–Troubled Debt Restructurings by Creditors (formerly FASB Statement No.15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings,” as amended). Under prior accounting guidance, all loan receivables were reclassified to other real estate owned (OREO) when the institution, as creditor, obtained physical possession of the property, regardless of whether formal foreclosure proceedings had taken place. The new ASU clarifies when a creditor is considered to have received physical possession (resulting from an in-substance repossession or foreclosure) of residential real estate collateralizing a consumer mortgage loan. Under the new guidance, physical possession for these residential real estate properties is considered to have occurred and a loan receivable would be reclassified to OREO only upon: • The institution obtaining legal title upon completion of a foreclosure even if the borrower has redemption rights that provide the borrower with a legal right for a period of time after foreclosure to reclaim the property by paying certain amounts specified by law, or • The completion of a deed in lieu of foreclosure or similar legal agreement under which the borrower conveys all interest in the residential real estate property to the institution to satisfy the loan. Loans secured by real estate other than consumer mortgage loans collateralized by residential real estate should continue to be reclassified to OREO when the institution has received physical possession of a borrower’s real estate, regardless of whether formal foreclosure proceedings take place. For institutions that are public business entities, as defined under U.S. generally accepted accounting principles, ASU 2014-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. For example, institutions with a calendar year fiscal year that are public business entities must apply the ASU in their Call Reports beginning March 31, 2015. However, institutions that are not public business entities are not required to apply the guidance in ASU 2014-04 until annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. Thus, institutions with a calendar year fiscal year that are not public business entities must apply the ASU in their December 31, 2015, and subsequent quarterly Call Reports. Earlier adoption of the guidance in ASU 2014-04 is permitted. Entities can elect to apply the ASU on either a modified retrospective transition basis or a prospective transition basis. Applying the ASU on a prospective transition basis should be less complex for institutions than applying the ASU on a modified retrospective transition basis. Under the prospective transition method, an institution should apply the new guidance to all instances where it receives physical possession of residential real estate property collateralizing consumer mortgage loans that occur after the date of adoption of the ASU. Under the modified retrospective transition method, an institution should apply a cumulative-effect adjustment to residential consumer mortgage loans and OREO existing as of the beginning of the annual period for which the ASU is effective. As a result of adopting 32 2015, Volume 9, No. 2 Quarterly Banking Profile the ASU on a modified retrospective basis, assets reclassified from OREO to loans should be measured at the carrying value of the real estate at the date of adoption while assets reclassified from loans to OREO should be measured at the lower of the net amount of the loan receivable or the OREO property’s fair value less costs to sell at the time of adoption. For additional information, institutions should refer to ASU 2014-04, which is available at http://www.fasb.org/jsp/FASB/ Page/SectionPage&cid=1176156316498. True-Up Liability Under an FDIC Loss-Sharing Agreement An insured depository institution that acquires a failed insured institution may enter into a loss-sharing agreement with the FDIC under which the FDIC agrees to absorb a portion of the losses on a specified pool of the failed institution’s assets during a specified time period. The acquiring institution typically records an indemnification asset representing its right to receive payments from the FDIC for losses during the specified time period on assets covered under the loss-sharing agreement. Since 2009, most loss-sharing agreements have included a true-up provision that may require the acquiring institution to reimburse the FDIC if cumulative losses in the acquired loss-share portfolio are less than the amount of losses claimed by the institution throughout the loss-sharing period. Typically, a true-up liability may result because the recovery period on the loss-share assets (e.g., eight years) is longer than the period during which the FDIC agrees to reimburse the acquiring institution for losses on the loss-share portfolio (e.g., five years). Consistent with U.S. GAAP and bank guidance for “Offsetting,” institutions are permitted to offset assets and liabilities recognized in the Report of Condition when a “right of setoff” exists. Under ASC Subtopic 210-20, Balance Sheet—Offsetting (formerly FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts”), in general, a right of setoff exists when a reporting institution and another party each owes the other determinable amounts, the reporting institution has the right to set off the amounts each party owes and also intends to set off, and the right of setoff is enforceable at law. Because the conditions for the existence of a right of offset in ASC Subtopic 210-20 normally would not be met with respect to an indemnification asset and a true-up liability under a loss-sharing agreement with the FDIC, this asset and liability should not be netted for Call Report purposes. Therefore, institutions should report the indemnification asset gross (i.e., without regard to any true-up liability) in Other Assets, and any true-up liability in Other Liabilities. In addition, an institution should not continue to report assets covered by loss-sharing agreements after the expiration of the loss-sharing period even if the terms of the loss-sharing agreement require reimbursements from the institution to the FDIC for certain amounts during the recovery period. Indemnification Assets and Accounting Standards Update No. 201206 – In October 2012, the FASB issued Accounting Standards Update (ASU) No. 2012-06, “Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution,” to address the subsequent measurement of an indemnification asset recognized in an acquisition of a financial institution that includes an FDIC loss-sharing agreement. FDIC Quarterly This ASU amends ASC Topic 805, Business Combinations (formerly FASB Statement No. 141 (revised 2007), “Business Combinations”), which includes guidance applicable to FDICassisted acquisitions of failed institutions. Under the ASU, when an institution experiences a change in the cash flows expected to be collected on an FDIC loss- sharing indemnification asset because of a change in the cash flows expected to be collected on the assets covered by the loss-sharing agreement, the institution should account for the change in the measurement of the indemnification asset on the same basis as the change in the assets subject to indemnification. Any amortization of changes in the value of the indemnification asset should be limited to the lesser of the term of the indemnification agreement and the remaining life of the indemnified assets. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2012. For institutions with a calendar year fiscal year, the ASU takes effect January 1, 2013. Early adoption of the ASU is permitted. The ASU’s provisions should be applied prospectively to any new indemnification assets acquired after the date of adoption and to indemnification assets existing as of the date of adoption arising from an FDIC-assisted acquisition of a financial institution. Institutions with indemnification assets arising from FDIC loss-sharing agreements are expected to adopt ASU 2012-06 for Call Report purposes in accordance with the effective date of this standard. For additional information, refer to ASU 2012-06, available at http://www.fasb.org/jsp/FASB/ Page/SectionPage&cid=1176156316498. Goodwill Impairment Testing – In September 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-08, “Testing Goodwill for Impairment,” to address concerns about the cost and complexity of the existing goodwill impairment test in ASC Topic 350, Intangibles-Goodwill and Other (formerly FASB Statement No. 142, “Goodwill and Other Intangible Assets”). The ASU’s amendments to ASC Topic 350 are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 (i.e., for annual or interim tests performed on or after January 1, 2012, for institutions with a calendar year fiscal year). Early adoption of the ASU was permitted. Under ASU 2011-08, an institution has the option of first assessing qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test described in ASC Topic 350. If, after considering all relevant events and circumstances, an institution determines it is unlikely (that is, a likelihood of 50 percent or less) that the fair value of a reporting unit is less than its carrying amount (including goodwill), then the institution does not need to perform the two-step goodwill impairment test. If the institution instead concludes that the opposite is true (that is, it is likely that the fair value of a reporting unit is less than its carrying amount), then it is required to perform the first step and, if necessary, the second step of the two-step goodwill impairment test. Under ASU 2011-08, an institution may choose to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. Troubled Debt Restructurings and Current Market Interest Rates – Many institutions are restructuring or modifying the terms of loans to provide payment relief for those borrowers who have suffered deterioration in their financial condition. Such loan 33 2015, Volume 9, No. 2 restructurings may include, but are not limited to, reductions in principal or accrued interest, reductions in interest rates, and extensions of the maturity date. Modifications may be executed at the original contractual interest rate on the loan, a current market interest rate, or a below-market interest rate. Many of these loan modifications meet the definition of a troubled debt restructuring (TDR). The TDR accounting and reporting standards are set forth in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors (formerly FASB Statement No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings,” as amended). This guidance specifies that a restructuring of a debt constitutes a TDR if, at the date of restructuring, the creditor for economic or legal reasons related to a debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider. In the Call Report, until a loan that is a TDR is paid in full or otherwise settled, sold, or charged off, it must be reported in the appropriate loan category, as well as identified as a performing TDR loan, if it is in compliance with its modified terms. If a TDR is not in compliance with its modified terms, it is reported as a past-due and nonaccrual loan in the appropriate loan category, as well as distinguished from other past due and nonaccrual loans. To be considered in compliance with its modified terms, a loan that is a TDR must not be in nonaccrual status and must be current or less than 30 days past due on its contractual principal and interest payments under the modified repayment terms. A loan restructured in a TDR is an impaired loan. Thus, all TDRs must be measured for impairment in accordance with ASC Subtopic 310-10, Receivables – Overall (formerly FASB Statement No. 114, “Accounting by Creditors for Impairment of a Loan,” as amended), and the Call Report Glossary entry for “Loan Impairment.” Consistent with ASC Subtopic 310-10, TDRs may be aggregated and measured for impairment with other impaired loans that share common risk characteristics by using historical statistics, such as average recovery period and average amount recovered, along with a composite effective interest rate. The outcome of such an aggregation approach must be consistent with the impairment measurement methods prescribed in ASC Subtopic 310-10 and Call Report instructions for loans that are “individually” considered impaired instead of the measurement method prescribed in ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly FASB Statement No. 5, “Accounting for Contin gencies”) for loans not individually considered impaired that are collectively evaluated for impairment. When a loan not previously considered individually impaired is restructured and determined to be a TDR, absent a partial charge-off, it generally is not appropriate for the impairment estimate on the loan to decline as a result of the change from the impairment measurement method prescribed in ASC Subtopic 450-20 to the methods prescribed in ASC Subtopic 310-10. Troubled Debt Restructurings and Accounting Standards Update No. 2011-02 – In April 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-02, “A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring,” to provide additional guidance to help creditors determine whether a concession has been granted to a borrower and whether a borrower is experiencing financial difficulties. The guidance is also intended to reduce diversity FDIC Quarterly in practice in identifying and reporting TDRs. This ASU was effective for public companies for interim and annual periods beginning on or after June 15, 2011, and should have been applied retrospectively to the beginning of the annual period of adoption for purposes of identifying TDRs. The measurement of impairment for any newly identified TDRs resulting from retrospective application should have been applied prospectively in the first interim or annual period beginning on or after June 15, 2011. (For most public institutions, the ASU takes effect July 1, 2011, but retrospective application begins as of January 1, 2011.) Nonpublic companies should apply the new guidance for annual periods ending after December 15, 2012, including interim periods within those annual periods. (For most nonpublic institutions, the ASU took effect January 1, 2012.) Early adoption of the ASU was permitted for both public and nonpublic entities. Nonpublic entities that adopt early are subject to a retrospective identi fication requirement. For additional information, refer to ASU 2011-02, available at http://www.fasb.org/jsp/FASB/ Page/SectionPage&cid=1176156316498. Accounting for Loan Participations – Amended ASC Topic 860 (formerly FAS 166) 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 – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html. Other-Than-Temporary Impairment – When the fair value of an investment in an individual available-for-sale or held-tomaturity security is less than its cost basis, the impairment is either temporary or other-than-temporary. The amount of the total other-than-temporary impairment related to credit loss must be recognized in earnings, but the amount of total impairment related to other factors must be recognized in other comprehensive income, net of applicable taxes. To determine whether the impairment is other-than-temporary, an institution must apply the applicable accounting guidance – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html. ASC Topics 860 & 810 (formerly 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 Interpre tation No. 46(R) (FAS 167), which change the way entities account for securitizations and special purpose entities—refer to previously published Quarterly Banking Profile notes: https://www2.fdic.gov/qbp/2014dec/qbpnot.html. Accounting Standards Codification – refer to previously published Quarterly Banking Profile notes: http://www2.fdic. gov/qbp/2011sep/qbpnot.html. DEFINITIONS (in alphabetical order) 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. 34 2015, Volume 9, No. 2 Quarterly Banking Profile Assessment base – effective April 1, 2011, the deposit insurance assessment base has changed to “average consolidated total assets minus average tangible equity” with an additional adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank. Previously the assessment base was “assessable deposits” and consisted 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 are classified in a bank’s balance sheet as “Other liabilities.” Common equity tier 1 capital ratio – ratio of common equity tier 1 capital to risk-weighted assets. Common equity tier 1 capital includes common stock instruments and related surplus, retained earnings, accumulated other comprehensive income (AOCI), and limited amounts of common equity tier 1 minority interest, minus applicable regulatory adjustments and deductions. Items that are fully deducted from common equity tier 1 capital include goodwill, other intangible assets (excluding mortgage servicing assets) and certain deferred tax assets; items that are subject to limits in common equity tier 1 capital include mortgage servicing assets, eligible deferred tax assets, and certain significant investments. 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. FDIC Quarterly 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. 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). The Dodd-Frank Wall Street Reform and Consumer Protection Act enacted on July 21, 2010, made permanent the standard maximum deposit insurance amount (SMDIA) of $250,000. Also, the Dodd-Frank Act amended the Federal Deposit Insurance Act to include noninterestbearing transaction accounts as a new temporary deposit insurance account category. All funds held in noninterestbearing transaction accounts were fully insured, without limit, from December 31, 2010, through December 31, 2012. 35 2015, Volume 9, No. 2 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 foreclosed 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 prior to March 31, 2012. 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 transactions 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. FDIC Quarterly 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 reporters – 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 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. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) 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. 36 2015, Volume 9, No. 2 Quarterly Banking Profile adjustment of 2.5 basis points and could not have a total base assessment rate lower than 2.5 basis points. (2) Depository Institution Debt Adjustment: For institutions that hold longterm unsecured debt issued by another insured depository institution, a 50 basis point charge is applied to the amount of such debt held in excess of 3 percent of an institution’s Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for small institutions that are not in Risk Category I and for large institutions that are not well capitalized or do not have a composite CAMELS rating of 1 or 2 may increase (not to exceed 10 basis points) if their brokered deposits exceed 10 percent of domestic deposits. After applying all possible adjustments (excluding the Depository Institution Debt Adjustment), minimum and maximum total base assessment rates for each risk category are as follows: 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. Effective April 1, 2011, risk categories for large institutions (generally those with at least $10 billion in assets) were eliminated. The following table shows the relationship of risk categories (I, II, III, IV) for small institutions to capital and supervisory groups as well as the initial base assessment rates (in basis points) 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 risk-based assessment capital groups, undercapitalized includes institutions that are significantly or critically undercapitalized. Total Base Assessment Rates* Large and Risk Risk Risk Risk Highly Category Category Category Category Complex I II III IV Institutions Supervisory Group Capital Category A 1. Well Capitalized I 5–9 bps 2. Adequately Capitalized 3. Undercapitalized B II 14 bps II 14 bps III 23 bps C III 23 bps IV 35 bps Effective April 1, 2011, the initial base assessment rates are 5 to 35 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 small institutions in Risk Category I are based on a combination of financial ratios and CAMELS component ratings (the financial ratios method). As required by Dodd-Frank, the calculation of risk-based assessment rates for large institutions no longer relies on longterm debt issuer ratings. Rates for large institutions are based on CAMELS ratings and certain forward-looking financial measures combined into two scorecards—one for most large institutions and another for the remaining very large institutions that are structurally and operationally complex or that pose unique challenges and risks in case of failure (highly complex institutions). In general, a highly complex institution is an institution (other than a credit card bank) with more than $500 billion in total assets that is controlled by a parent or intermediate parent company with more than $500 billion in total assets or a processing bank or trust company with total fiduciary assets of $500 billion or more. The FDIC retains its ability to take additional information into account to make a limited adjustment to an institution’s total score (the large bank adjustment), which will be used to determine an institution’s initial base assessment rate. Effective April 1, 2011, the three possible adjustments to an institution’s initial base assessment rate are as follows: (1) Unsecured Debt Adjustment: An institution’s rate may decrease by up to 5 basis points for unsecured debt. The unsecured debt adjustment cannot exceed the lesser of 5 basis points or 50 percent of an institution’s initial base assessment rate (IBAR). Thus, for example, an institution with an IBAR of 5 basis points would have a maximum unsecured debt FDIC Quarterly Initial base assessment rate 5–9 14 23 35 5–35 Unsecured debt adjustment -4.5–0 -5–0 -5–0 -5–0 -5–0 Brokered deposit adjustment — 0–10 0–10 0–10 0–10 Total Base Assessment rate 2.5–9 9–24 18–33 30–45 2.5–45 * All amounts for all categories are in basis points annually. Total base rates that are not the minimum or maximum rate will vary between these rates. Total base assessment rates do not include the depository institution debt adjustment. 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. 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 was collected September 30, 2009, at the same time that the risk-based assessment for the second quarter of 2009 was 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 – In November 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. For regulatory capital purposes, an institution may assign a zero-percent risk weight to the amount of its prepaid deposit assessment asset. As required by the FDIC’s regulation establishing the prepaid deposit insurance assessment program, this program ended with the final application of 37 2015, Volume 9, No. 2 prepaid assessments to the quarterly deposit insurance assessments payable March 29, 2013. The FDIC issued refunds of any unused prepaid deposit insurance assessments on June 28, 2013. 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. Securities gains (losses) – realized gains (losses) on held-tomaturity 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. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) 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. Small Business Lending Fund – The Small Business Lending Fund (SBLF) was enacted into law in September 2010 as part of the Small Business Jobs Act of 2010 to encourage lending to small businesses by providing capital to qualified community institutions with assets of less than $10 billion. The SBLF Program is administered by the U.S. Treasury Department (http://www.treasury.gov/resource-center/ sb-programs/Pages/Small-Business-Lending-Fund.aspx). Under the SBLF Program, the Treasury Department purchased noncumulative perpetual preferred stock from qualifying depository institutions and holding companies (other than Subchapter S and mutual institutions). When this stock has been issued by a depository institution, it is FDIC Quarterly reported as “Perpetual preferred stock and related surplus.” For regulatory capital purposes, this noncumulative perpetual preferred stock qualifies as a component of Tier 1 capital. Qualifying Subchapter S corporations and mutual institutions issue unsecured subordinated debentures to the Treasury Department through the SBLF. Depository institutions that issued these debentures report them as “Subordinated notes and debentures.” For regulatory capital purposes, the debentures are eligible for inclusion in an institution’s Tier 2 capital in accordance with their primary federal regulator’s capital standards. To participate in the SBLF Program, an institution with outstanding securities issued to the Treasury Department under the Capital Purchase Program (CPP) was required to refinance or repay in full the CPP securities at the time of the SBLF funding. Any outstanding warrants that an institution issued to the Treasury Department under the CPP remain outstanding after the refinancing of the CPP stock through the SBLF Program unless the institution chooses to repurchase them. 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. 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.) Yield on earning assets – total interest, dividend, and fee income earned on loans and investments as a percentage of average earning assets. 38 2015, Volume 9, No. 2