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Quarterly Quarterly Banking Profile: First Quarter 2017 Highlights: ■ Quarterly Net Income Is 12.7 Percent Higher Than a Year Earlier ■ Annual Loan Growth Rate Slows to 4 Percent, on Par With Nominal GDP Growth ■ Community Bank Net Income Rises 10.4 Percent From a Year Ago ■ Community Bank Loan Balances Increase 7.7 Percent Over the Past 12 Months ■ Estimated Insured Deposits Grow by 2.3 Percent ■ DIF Reserve Ratio Is Unchanged at 1.20 Percent 2017 Volume 11, Number 2 Federal Deposit Insurance Corporation FDIC QUARTERLY A 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 Philip A. Shively Editors Clayton Boyce Peggi Gill Frank Solomon Kathy Zeidler Publication Manager Lynne Montgomery Media Inquiries (202) 898-6993 FDIC QUARTERLY 2017 FDIC QUARTERLY Vo l u m e 1 1 • N u m b e r 2 Quarterly Banking Profile: First Quarter 2017 FDIC-insured institutions reported aggregate net income of $44 billion in the first quarter of 2017, up $5 billion (12.7 percent) from a year earlier. The increase in earnings was mainly attributable to an $8.8 billion (7.8 percent) increase in net interest income and a $2.1 billion (3.4 percent) increase in noninterest income. Of the 5,856 insured institutions reporting first quarter financial results, 57 percent reported year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable in the first quarter fell to 4.1 percent from 5.1 percent a year earlier. See page 1. Community Bank Performance Community banks—which represent 92 percent of insured institutions—reported net income of $5.6 billion in the first quarter, up $522.9 million (10.4 percent) from one year earlier. The increase was driven by higher net interest income and noninterest income, which was partly offset by higher loan-loss provisions and noninterest expense. The 12-month growth rate in loan balances at community banks was 7.7 percent, while loan growth at noncommunity banks was 3.3 percent. The noncurrent rate continued to improve, and aggregate noncurrent loan balances declined by $37.5 million during the quarter. See page 15. Insurance Fund Indicators Insured deposits increased by 2.3 percent in the first quarter of 2017. The DIF reserve ratio was 1.20 percent on March 31, 2017, unchanged from year-end 2016, but up 7 basis points from one year earlier. There were three failures of FDIC-insured institutions 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. FDIC QUARTERLY i QUARTERLY BANKING PROFILE First Quarter 2017 INSURED INSTITUTION PERFORMANCE Quarterly Net Income Is 12.7 Percent Higher Than a Year Earlier Community Bank Net Income Rises 10.4 Percent From a Year Ago Annual Loan Growth Rate Slows to 4 Percent, on Par With Nominal GDP Growth “Problem Bank List” Falls to Nine-Year Low First Quarter Net Income of $44 Billion Is 12.7 Percent Higher Than a Year Ago Higher net operating revenue helped lift quarterly earnings of FDIC-insured institutions to $44 billion in the first quarter of 2017. First quarter net income was $5 billion (12.7 percent) higher than the year-earlier total. More than 57 percent of all banks reported year-over-year increases in quarterly earnings, while only 4.1 percent reported negative net income for the quarter. In the first quarter of 2016, 5.1 percent of banks were unprofitable. The average return on assets (ROA) rose to 1.04 percent, from 0.97 percent a year ago. Banks Post 6.3 Percent Year-Over-Year Growth in Net Operating Revenue Net operating revenue—the sum of net interest income and total noninterest income—totaled $183.6 billion, an increase of $10.9 billion (6.3 percent) from a year ago. More than two out of three banks—69.7 percent—reported year-over-year growth in net operating revenue. Noninterest income increased $2.1 billion (3.4 percent) over first quarter 2016, as trading income rose by $1.5 billion (26 percent), and servicing income increased by $1.9 billion (220.6 percent). Net interest income was $8.8 billion (7.8 percent) higher, as average interest-bearing assets rose 4.9 percent, and the average net interest margin (NIM) improved to 3.19 percent from 3.10 percent a year ago. Much of the NIM improvement occurred at large banks, as higher short-term interest rates lifted average asset yields. Smaller banks, which have a larger share of their assets in longer-term investments, did not see their NIMs benefit from the rise in shortterm rates. More than half of all banks—53.7 percent—reported lower NIMs than a year ago. Noninterest expenses were $4.5 billion (4.3 percent) higher than a year ago. Salary and employee benefits costs rose $3.3 billion (6.6 percent), as FDIC-insured institutions reported 41,469 more employees than a year ago, a 2 percent increase. Expenses for premises and fixed assets increased by $435 million (3.9 percent) compared to first quarter 2016. Provisions Register First Decline in Almost Three Years Banks set aside $12 billion in provisions for loan losses in the first quarter, a decline of $541 million (4.3 percent) from a year earlier. This is the first time in the past 11 quarters that loss provisions have fallen. A slightly larger proportion of banks reported higher provision expenses—34.8 percent—compared to the 31.5 percent who had lower quarterly provisions. Chart 1 Chart 2 Quarterly Net Income Unprofitable Institutions and Institutions With Increased Earnings All FDIC-Insured Institutions Securities and Other Gains/Losses, Net Net Operating Income $ Billions 50 40 35.2 30 20 28.7 28.5 17.4 20.9 23.8 34.8 34.5 37.5 40.3 34.4 38.2 39.8 36.1 37.3 40.1 38.5 36.5 39.8 43.0 43.6 45.6 40.4 40.6 39.0 43.2 All FDIC-Insured Institutions Percentage of All FDIC-Insured Institutions 44.0 80 70 60 25.3 50 21.4 40 10 30 0 20 -10 Percentage of Institutions With Year-Over-Year Quarterly Income Growth 10 1 2 3 2010 Source: FDIC. 4 1 2 3 2011 4 1 2 3 2012 4 1 2 3 2013 4 1 2 3 2014 4 1 2 3 2015 4 1 2 3 4 1 2016 2017 Percentage of Institutions With Quarterly Losses 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: FDIC. FDIC QUARTERLY 1 2017 • Volume 11 • Numb er 2 Banks Report Higher Charge-Offs on Loans to Individuals During the first quarter, banks charged-off $11.5 billion in loans, an increase of $1.4 billion (13.4 percent) over the total for first quarter 2016. This is the sixth consecutive quarter that charge-offs have posted a year-over-year increase. Most of the increase consisted of higher losses on loans to individuals. Net charge-offs of credit card balances were up $1.3 billion (22.1 percent), while auto loan charge-offs increased $199 million (27.7 percent), and charge-offs of other loans to individuals rose by $474 million (66.4 percent). In contrast, charge-offs on loans to commercial and industrial (C&I) borrowers were $291 million (15.7 percent) lower than a year ago, while residential mortgage charge-offs were $221 million (52.5 percent) lower. The average net charge-off rate in the first quarter was 0.49 percent, compared to 0.46 percent a year earlier. Noncurrent Loan Balances Continue to Decline The amount of loans and leases that were noncurrent—90 days or more past due or in nonaccrual status—fell for the 27th time in the last 28 quarters. In the first three months of 2017, noncurrent loan balances declined by $7 billion (5.3 percent). All major loan categories saw noncurrent balances fall during the quarter. Noncurrent residential mortgage loans declined by $5.3 billion (8.2 percent), while noncurrent C&I loans fell by $1.2 billion (4.6 percent). The average noncurrent loan rate improved from 1.42 percent at year-end 2016 to 1.34 percent at the end of March. This is the lowest average noncurrent rate for the industry since third quarter 2007. Coverage Ratio Nears 100 Percent The industry’s reserves for loan losses were essentially unchanged in the first quarter. Industry reserves stood at $121.8 billion at the end of the quarter, only $99 million (0.1 percent) higher than the total at year-end 2016. Banks with assets greater than $1 billion, which together account for more than 96 percent of total industry reserves, increased their reserves for credit card losses by $1.1 billion (3.7 percent) during the quarter, while reducing their reserves for residential real estate losses by $646 million (3.7 percent), and lowering their reserves for commercial loan losses by $559 million (1.6 percent). As a result of the decline in noncurrent loan balances during the quarter, the industry’s coverage ratio of reserves to noncurrent loans improved from 92.2 percent to 97.5 percent. This is the highest level for the coverage ratio since the end of third quarter 2007. Chart 3 Chart 4 Quarterly Net Operating Revenue Quarterly Net Interest Margin All FDIC-Insured Institutions All FDIC-Insured Institutions Quarterly Noninterest Income Quarterly Net Interest Income $ Billions Percent 5.0 200 180 Assets $100 Million - $1 Billion Assets < $100 Million 2012 2015 4.5 160 140 4.0 120 3.5 100 80 3.0 60 40 2.5 20 0 2007 Assets > $250 Billion Assets $10 Billion - $250 Billion Assets $1 Billion - $10 Billion 2008 Source: FDIC. 2009 2010 2011 2 FDIC QUARTERLY 2012 2013 2014 2015 2016 2017 2.0 2010 Source: FDIC. 2011 2013 2014 2016 2017 QUARTERLY BANKING PROFILE Equity Capital Posts Relatively Strong Increase Equity capital increased by $28.6 billion (1.5 percent) during the quarter. Retained earnings contributed $16.7 billion to equity growth in the quarter. This is $1.6 billion (8.9 percent) less than a year ago, as first quarter dividends were $6.6 billion (31.7 percent) higher. Accumulated other comprehensive income posted a $3.3 billion improvement, as a slight decline in long-term interest rates caused a reduction in unrealized losses in securities portfolios. Banks Increase Balances at Federal Reserve Banks Total assets increased by $186.1 billion (1.1 percent) during the quarter. Banks increased their balances at Federal Reserve banks by $187.4 billion (17 percent), while assets in trading accounts rose by $27 billion (4.9 percent). Securities portfolios increased by $24.5 billion (0.7 percent), as securities in held-to-maturity accounts rose by $52.6 billion (5.9 percent), and securities in available-for-sale accounts declined by 28.1 billion (1.1 percent). Balances due from banks in foreign countries declined by $30.3 billion (8 percent). Pace of Loan Growth Slows Total loans and leases declined by $8.1 billion (0.1 percent) during the three months ended March 31. This is the first quarterly decline in loan balances since first quarter 2013. Credit card loans posted a seasonal decline of $43.7 billion (5.5 percent), as cardholders paid down outstanding balances. Residential mortgage loans fell by $10.2 billion (0.5 percent), reflecting increased loan sales activity. C&I loans increased by $25.6 billion (1.3 percent), while real estate loans secured by nonfarm nonresidential properties rose by $22.5 billion (1.7 percent). Unused loan commitments increased by $119.3 billion (1.7 percent) during the quarter. The slowing in loan growth that began in the second half of last year continued through the first quarter. The 12-month loan growth rate slowed to 4 percent, down from 5.3 percent in calendar year 2016. While all major loan categories saw balances rise over the past 12 months, annual growth rates are now lower than they were in the previous quarter and a year ago. The rate of loan growth remains above the nominal GDP growth rate. Retail Deposits Provide Most of the Growth in Funding Buoyed by growth in consumer accounts, total deposits increased by $189.1 billion (1.5 percent) during the quarter. Deposits in domestic offices of FDIC-insured institutions rose by $165.5 billion (1.4 percent), while deposits in foreign offices were up $23.6 billion (1.9 percent). Domestic deposit balances in consumer accounts increased by $181 billion (4.3 percent). During the quarter, banks reduced their nondeposit liabilities by $30.7 billion (1.5 percent), as Federal Home Loan Bank advances declined by $40.8 billion (7.2 percent), and trading liabilities fell by $8.4 billion (3.4 percent). Chart 5 Chart 6 Noncurrent Loan Rate and Quarterly Net Charge-Off Rate All FDIC-Insured Institutions $ Billions Coverage Ratio (Percent) 450 Percent 6 400 Noncurrent Loan Rate 180 4 3 2 Quarterly Net Charge-Off Rate 2007 Source: FDIC. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Noncurrent Loans & Leases ($ Billions) 140 300 120 250 100 200 80 150 60 100 40 50 1 160 Coverage Ratio (Percent) 350 5 0 2006 Reserve Coverage Ratio* Loan-Loss Reserves ($ Billions) 20 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: FDIC. *Loan-loss reserves to noncurrent loans & leases. FDIC QUARTERLY 3 2017 • Volume 11 • Numb er 2 Two New Charters Added in the First Quarter The number of FDIC-insured commercial banks and savings institutions declined from 5,913 to 5,856 during the first quarter. In the first three months of 2017, mergers absorbed 54 insured institutions, while 3 banks failed. Two new charters were added during the quarter, the first new charters since third quarter 2015. Banks reported 2,081,422 full-time equivalent employees in the first quarter, an increase of 28,444 from fourth quarter 2016, and 41,469 (2 percent) more than a year ago. The number of insured institutions on the FDIC’s Problem Bank List fell from 123 to 112 during the first quarter. This is the smallest number since first quarter 2008. Total assets of “Problem” banks declined from $27.6 billion to $23.4 billion. Author: Ross Waldrop Senior Banking Analyst Division of Insurance and Research (202) 898-3951 Chart 7 Chart 8 Twelve-Month Growth Rates for Major Loan Categories Quarterly Change in Loan Balances All FDIC-Insured Institutions All FDIC-Insured Institutions Quarterly Change in Loans ($ Billions) 12-Month Growth Rate (Percent) 15 300 250 237 221* 10 200 196 189 203 185 197 182 178 149 150 146 134 117 5 108 102 100 95 100 112 91 74 70 72 67 66 61 65 53 51 50 43 38 28 0 24 0 -6 -7 -8 -14 -50 -5 -37 -63 -100 -107 -109 -150 -116 -10 -126 -140 -133 -200 -210 -15 -250 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 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. Chart 9 Secured by 1-to-4 Family Residential Properties Construction & Development Nonfarm Nonresidential Real Estate Percent 40 Impact of FASB 166/167 30 20 10 0 -10 -20 -30 -40 2000 2002 Source: FDIC. 2004 2006 2008 2010 2012 2014 2016 2017 Chart 10 Loans and Securities > 3 Years as a Percent of Total Assets Number and Assets of Banks on the “Problem Bank List” All Insured Call Report Filers Assets ($ Billions) 50 450 40 35.4% 33.3% Number 1,000 500 > 15 Years 5-15 Years 3-5 Years Percentage 30 20 Number of Problem Banks 900 400 800 350 700 300 600 250 500 200 400 300 150 100 10 50 0 1998 C&I Loans Loans to Individuals 2000 Source: FDIC. 2002 2004 2006 4 FDIC QUARTERLY 2008 2010 2012 2014 2016 2017 Problem Bank Assets 200 112 100 $24 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: FDIC. 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 2017** 2016** 2016 2015 2014 2013 2012 1.04 9.37 9.57 0.81 0.49 4.13 3.19 13.69 5,856 5,060 796 4.15 112 $24 3 0 0.97 8.61 9.61 0.96 0.46 3.27 3.10 -1.46 6,122 5,289 833 5.11 165 $31 1 0 1.04 9.29 9.48 0.86 0.47 5.09 3.13 4.66 5,913 5,112 801 4.36 123 $28 5 0 1.04 9.29 9.59 0.97 0.44 2.66 3.07 7.07 6,182 5,338 844 4.79 183 $47 8 0 1.01 9.01 9.44 1.20 0.49 5.59 3.14 -0.73 6,509 5,607 902 6.27 291 $87 18 0 1.07 9.54 9.40 1.63 0.69 1.94 3.26 12.82 6,812 5,847 965 8.16 467 $153 24 0 1.00 8.90 9.15 2.20 1.10 4.02 3.42 17.76 7,083 6,072 1,011 11.00 651 $233 51 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 (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 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 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 1st Quarter 2017 4th Quarter 2016 1st Quarter 2016 %Change 16Q1-17Q1 5,856 2,081,422 5,913 2,052,978 6,122 2,039,953 -4.3 2.0 $16,965,782 4,626,225 1,984,788 1,346,589 319,160 429,993 1,960,683 1,545,184 756,135 75,182 1,091,936 2,032 9,297,177 121,776 9,175,401 3,583,986 10,365 370,337 3,825,694 $16,779,669 4,603,235 1,995,023 1,324,054 312,998 434,130 1,935,062 1,589,465 799,842 79,904 1,099,795 2,173 9,305,287 121,677 9,183,610 3,559,474 10,934 369,230 3,656,420 $16,293,213 4,419,553 1,918,198 1,251,625 284,876 457,506 1,910,171 1,474,247 723,659 77,187 1,060,008 2,109 8,939,057 120,690 8,818,366 3,384,636 14,049 359,027 3,717,134 4.1 4.7 3.5 7.6 12.0 -6.0 2.6 4.8 4.5 -2.6 3.0 -3.6 4.0 0.9 4.0 5.9 -26.2 3.2 2.9 16,965,782 13,083,796 11,812,750 1,271,046 1,416,072 79,764 489,237 1,896,913 1,891,686 16,779,669 12,894,716 11,647,272 1,247,444 1,413,305 83,904 518,523 1,869,221 1,863,056 16,293,213 12,429,480 11,106,435 1,323,045 1,379,951 91,743 552,006 1,840,032 1,833,632 4.1 5.3 6.4 -3.9 2.6 -13.1 -11.4 3.1 3.2 INCOME DATA Full Year 2016 60,469 124,956 64,064 2,034,470 15,325,907 522,490 7,321,205 18,210,179 731,213 180,509,183 Full Year 2015 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 $515,794 54,389 461,405 48,078 252,612 422,189 3,790 76,047 -323 171,171 170,831 42,410 102,759 68,071 168,832 $478,506 46,875 431,631 37,139 253,311 417,025 3,635 70,534 -11 163,868 163,382 37,283 104,529 58,853 161,311 * See Notes to Users for explanation. 65,678 131,995 65,503 2,004,983 15,103,324 563,263 7,201,894 17,663,905 737,169 166,795,905 1st Quarter %Change 2017 7.8 16.0 6.9 29.5 -0.3 1.2 4.2 7.8 N/M 4.5 4.6 13.8 -1.7 15.7 4.7 $136,611 15,528 121,083 12,013 62,502 109,223 550 18,834 -3 44,062 43,971 11,491 27,311 16,660 43,691 58,702 141,227 71,083 1,895,559 14,641,461 481,204 7,035,911 16,672,022 803,118 195,508,112 1st Quarter 2016 3.0 -11.5 -9.9 7.3 4.7 8.6 4.1 9.2 -9.0 -7.7 %Change 16Q1-17Q1 $125,246 12,945 112,301 12,553 60,429 104,690 940 17,330 -9 39,087 39,010 10,135 20,730 18,281 38,430 9.1 20.0 7.8 -4.3 3.4 4.3 -41.5 8.7 N/M 12.7 12.7 13.4 31.8 -8.9 13.7 N/M - Not Meaningful FDIC QUARTERLY 5 2017 • Volume 11 • Numb er 2 TABLE III-A. First Quarter 2017, All FDIC-Insured Institutions Asset Concentration Groups* FIRST QUARTER (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions 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 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 Structural Changes New reporters Institutions absorbed by mergers Failed institutions All Insured Institutions 5,856 5,060 796 $16,965.8 15,789.5 1,176.3 13,083.8 12,151.1 932.7 43,971 40,771 3,200 Credit Card Banks 13 12 1 $506.1 434.2 71.9 272.2 217.4 54.8 2,655 2,324 331 International Banks 4 4 0 $4,001.2 4,001.2 0.0 2,885.7 2,885.7 0.0 9,356 9,356 0 Agricultural Banks 1,397 1,380 17 $269.8 264.3 5.5 224.7 221.6 3.1 798 767 31 Commercial Lenders 2,988 2,681 307 $5,731.6 5,257.6 474.0 4,541.0 4,189.5 351.6 14,046 12,740 1,305 Mortgage Lenders 454 111 343 $339.4 86.0 253.3 268.8 73.7 195.1 758 286 472 Consumer Lenders 61 44 17 $258.2 156.0 102.2 217.2 129.9 87.2 692 499 193 Other Specialized <$1 Billion 310 279 31 $52.2 47.6 4.6 42.9 39.7 3.2 327 154 173 All Other <$1 Billion 563 492 71 $102.7 88.2 14.5 87.1 75.2 11.9 232 210 22 All Other >$1 Billion 66 57 9 $5,704.5 5,454.3 250.1 4,544.1 4,318.4 225.7 15,108 14,436 672 3.59 0.41 3.19 1.48 2.59 0.28 1.04 1.49 1.04 9.37 0.49 12.19 1.34 10.85 2.33 5.18 3.85 2.07 3.24 2.07 13.64 3.93 2.84 0.41 2.42 1.84 2.45 0.20 0.94 1.32 0.94 9.39 0.66 4.09 0.48 3.61 0.63 2.51 0.11 1.18 1.39 1.19 10.56 0.09 3.77 0.42 3.35 1.24 2.75 0.16 0.98 1.38 0.99 8.32 0.20 3.38 0.50 2.88 1.11 2.53 0.02 0.86 1.37 0.91 8.28 0.09 3.86 0.37 3.50 1.01 2.24 0.47 1.08 1.71 1.08 10.67 0.65 2.99 0.31 2.68 6.68 5.75 0.05 2.50 3.37 2.52 17.02 0.12 3.83 0.40 3.44 0.90 2.91 0.07 0.90 1.11 0.91 7.92 0.13 3.12 0.31 2.81 1.45 2.28 0.17 1.05 1.55 1.06 9.87 0.38 104.54 58.77 4.15 57.34 123.61 41.51 0.00 38.46 81.75 61.32 0.00 100.00 183.46 62.44 2.65 46.89 114.35 63.51 3.65 63.76 26.79 65.40 8.37 54.41 102.57 49.96 11.48 50.82 132.82 62.83 7.74 45.81 103.47 71.08 4.97 56.66 89.61 56.25 0.00 75.76 90.33 91.83 87.55 93.43 91.05 94.89 97.62 91.82 92.83 90.63 1.31 97.46 4.25 292.73 1.45 98.81 1.45 134.17 1.11 109.60 0.83 27.81 0.99 108.17 1.57 114.74 1.29 112.39 1.16 69.72 0.81 11.15 9.57 13.05 13.14 14.54 70.13 54.08 69.63 1.14 15.53 12.74 12.42 12.54 14.75 139.25 74.91 53.57 0.56 10.03 8.83 13.50 13.56 14.73 49.52 35.71 48.50 0.83 11.31 11.01 14.74 14.76 15.89 78.61 65.48 83.29 0.82 11.91 10.18 12.44 12.54 13.90 86.70 68.69 78.95 1.92 10.88 10.88 21.21 21.26 22.17 76.90 60.90 79.18 0.68 10.14 10.26 18.34 18.56 19.43 82.44 69.33 84.09 0.56 14.78 14.36 31.36 31.37 32.26 33.51 27.49 82.05 0.90 11.53 11.56 19.81 19.83 20.96 65.22 55.31 84.80 0.86 10.80 8.93 12.69 12.79 14.34 61.54 49.03 74.25 2 54 3 0 0 0 0 0 0 0 9 0 1 39 3 0 3 0 0 0 0 1 1 0 0 2 0 0 0 0 PRIOR FIRST QUARTERS (The way it was...) Number of institutions 2016 2014 2012 6,122 6,730 7,308 14 16 18 5 4 5 1,459 1,480 1,492 3,045 3,324 3,679 502 563 717 60 54 52 336 444 427 635 783 851 66 62 67 Total assets (in billions) 2016 2014 2012 $16,293.2 14,909.9 13,925.4 $540.1 592.3 559.2 $4,014.9 3,723.9 3,660.4 $275.5 244.9 212.6 $5,741.8 4,977.3 4,068.3 $404.6 575.5 825.1 $193.1 164.1 98.5 $60.1 70.2 67.6 $112.5 141.2 152.6 $4,950.7 4,420.5 4,281.2 Return on assets (%) 2016 2014 2012 0.97 1.01 1.00 2.75 3.48 3.33 0.83 0.77 0.80 1.21 1.11 1.27 0.90 0.95 0.84 0.97 0.84 0.82 1.08 1.02 1.78 2.35 1.85 1.71 0.89 0.82 0.99 0.92 0.94 1.01 Net charge-offs to loans & leases (%) 2016 2014 2012 0.46 0.52 1.16 3.07 3.03 4.04 0.57 0.72 1.48 0.10 0.07 0.17 0.20 0.27 0.77 0.06 0.24 0.96 0.68 0.72 1.55 0.07 0.11 0.26 0.16 0.17 0.33 0.42 0.34 0.99 Noncurrent assets plus OREO to assets (%) 2016 2014 2012 0.96 1.51 2.53 0.88 0.87 1.29 0.69 0.98 1.55 0.75 0.96 1.40 0.99 1.57 2.89 1.84 1.78 2.38 0.90 1.15 1.17 0.62 0.87 1.16 1.10 1.57 1.72 1.10 1.99 3.36 Equity capital ratio (%) 2016 2014 2012 11.25 11.22 11.26 14.83 14.75 15.16 9.89 9.34 9.13 11.57 11.06 11.28 11.82 11.92 11.66 11.37 11.69 10.65 10.02 9.64 9.56 14.65 13.54 13.79 11.90 11.56 11.23 11.28 11.49 12.32 * See Table V-A (page 10) for explanations. 6 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE III-A. First Quarter 2017, All FDIC-Insured Institutions Asset Size Distribution FIRST QUARTER (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions 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 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 Structural Changes New reporters Institutions absorbed by mergers Failed institutions Geographic Regions* All Insured Institutions 5,856 5,060 796 $16,965.8 15,789.5 1,176.3 13,083.8 12,151.1 932.7 43,971 40,771 3,200 Less Than $100 Million 1,501 1,318 183 $88.9 78.6 10.3 74.8 66.8 8.0 202 173 28 $100 Million to $1 Billion 3,605 3,123 482 $1,166.3 988.5 177.7 977.0 835.6 141.4 3,041 2,618 423 $1 Billion to $10 Billion 632 517 115 $1,763.6 1,441.1 322.4 1,412.1 1,164.4 247.6 4,833 4,060 773 $10 Billion Greater to $250 Than $250 Billion Billion 109 9 93 9 16 0 $5,363.5 $8,583.5 4,697.7 8,583.5 665.8 0.0 4,137.3 6,482.7 3,601.6 6,482.7 535.7 0.0 14,129 21,767 12,153 21,767 1,976 0 3.59 0.41 3.19 1.48 2.59 0.28 1.04 1.49 1.04 9.37 0.49 4.08 0.44 3.64 1.20 3.40 0.11 0.91 1.06 0.91 7.11 0.13 4.13 0.46 3.66 1.12 3.10 0.11 1.04 1.33 1.05 9.41 0.10 4.04 0.45 3.59 1.19 2.76 0.20 1.10 1.56 1.11 9.58 0.20 4.02 0.47 3.55 1.47 2.66 0.49 1.06 1.55 1.06 8.81 0.71 104.54 58.77 4.15 57.34 145.60 74.42 9.39 47.63 161.55 68.29 2.69 58.03 143.87 60.66 0.79 72.94 90.33 92.38 93.06 1.31 97.46 1.45 112.75 0.81 11.15 9.57 13.05 13.14 14.54 70.13 54.08 69.63 New York 719 372 347 $3,114.5 2,672.9 441.7 2,346.4 2,014.3 332.2 7,119 6,286 832 Atlanta 708 640 68 $3,539.0 3,449.1 89.8 2,795.9 2,722.8 73.1 8,716 8,544 172 Chicago 1,253 1,047 206 $3,839.3 3,728.4 110.9 2,867.4 2,789.2 78.2 9,354 9,053 302 Kansas City 1,471 1,416 55 $3,679.2 3,618.0 61.2 2,793.1 2,744.1 49.0 9,827 9,644 182 San Dallas Francisco 1,264 441 1,182 403 82 38 $1,032.2 $1,761.6 900.6 1,420.5 131.6 341.2 853.7 1,427.2 745.2 1,135.5 108.5 291.7 2,960 5,996 2,596 4,648 364 1,348 3.14 0.35 2.79 1.60 2.43 0.20 1.01 1.46 1.02 9.76 0.49 3.68 0.52 3.16 1.32 2.54 0.32 0.91 1.30 0.92 7.52 0.52 3.75 0.34 3.41 1.39 2.65 0.36 0.98 1.43 0.99 8.23 0.58 2.87 0.33 2.55 1.82 2.60 0.15 0.98 1.36 0.98 9.53 0.34 3.70 0.48 3.22 1.32 2.45 0.25 1.06 1.54 1.08 10.88 0.51 3.96 0.34 3.61 1.32 2.95 0.19 1.15 1.52 1.16 10.59 0.26 4.22 0.41 3.81 1.66 2.65 0.50 1.37 2.09 1.37 11.52 0.67 115.10 55.88 0.00 74.31 85.30 58.81 0.00 100.00 111.75 60.26 5.56 64.12 107.02 59.18 5.08 65.11 85.38 62.89 4.87 56.66 92.87 56.92 3.26 49.56 110.37 62.73 3.09 55.14 123.10 50.00 4.31 68.03 92.36 91.25 88.95 89.80 89.50 89.96 89.71 92.22 93.97 1.29 132.39 1.18 121.71 1.38 117.14 1.29 77.91 1.26 112.85 1.36 88.44 1.22 89.25 1.35 82.06 1.27 97.72 1.39 179.26 1.09 12.86 12.76 20.51 20.56 21.64 68.62 57.71 84.11 0.93 11.20 11.05 15.39 15.43 16.53 79.27 66.41 83.76 0.81 11.59 10.48 13.64 13.66 14.68 85.68 68.60 79.79 0.75 12.08 10.32 13.22 13.39 14.93 76.25 58.82 73.56 0.82 10.45 8.68 12.40 12.45 13.87 61.47 46.43 63.01 0.69 12.29 10.12 13.14 13.25 14.68 73.37 55.27 68.42 0.97 12.04 9.53 12.76 12.86 14.31 72.08 56.94 76.39 0.73 10.30 9.16 13.16 13.21 14.43 64.93 48.49 65.75 0.92 9.90 8.79 12.05 12.10 13.80 67.18 51.00 59.31 0.99 10.94 10.00 13.25 13.35 14.46 75.93 62.80 82.64 0.51 11.94 10.96 15.29 15.44 16.54 73.72 59.73 80.55 2 54 3 1 13 1 0 36 2 1 5 0 0 0 0 0 0 0 0 5 1 0 7 0 0 17 1 0 14 0 1 8 0 1 3 1 PRIOR FIRST QUARTERS (The way it was…) Number of institutions 2016 2014 2012 6,122 6,730 7,308 1,663 2,005 2,368 3,734 4,054 4,276 616 564 557 100 99 101 9 8 6 752 831 906 753 852 945 1,325 1,457 1,544 1,528 1,641 1,767 1,299 1,414 1,533 465 535 613 Total assets (in billions) 2016 2014 2012 $16,293.2 14,909.9 13,925.4 $97.8 118.1 137.4 $1,179.8 1,246.8 1,283.6 $1,723.1 1,493.7 1,419.8 $5,013.9 4,651.8 4,681.3 $8,278.6 7,399.5 6,403.4 $3,084.7 2,963.3 2,823.3 $3,417.7 3,032.9 2,918.0 $3,624.0 3,416.9 3,207.9 $3,543.5 3,247.0 2,967.7 $962.2 883.0 831.1 $1,661.2 1,366.9 1,177.5 Return on assets (%) 2016 2014 2012 0.97 1.01 1.00 0.92 0.80 0.74 1.03 0.90 0.83 1.05 1.01 1.06 1.01 1.17 1.09 0.92 0.92 0.97 0.80 1.02 0.97 0.88 0.88 0.83 0.93 0.80 0.87 1.04 1.14 1.08 1.05 1.08 1.13 1.33 1.42 1.60 Net charge-offs to loans & leases (%) 2016 2014 2012 0.46 0.52 1.16 0.12 0.19 0.38 0.10 0.18 0.58 0.19 0.25 0.78 0.62 0.77 1.39 0.49 0.49 1.25 0.49 0.75 1.32 0.54 0.47 1.28 0.26 0.38 0.90 0.55 0.61 1.44 0.30 0.21 0.57 0.52 0.50 0.89 Noncurrent assets plus OREO to assets (%) 2016 2014 2012 0.96 1.51 2.53 1.22 1.71 2.26 1.10 1.74 2.88 0.93 1.75 3.06 0.81 0.98 1.67 1.04 1.75 2.98 0.77 1.08 1.70 1.13 2.05 3.74 0.93 1.35 2.28 1.15 1.86 2.70 1.10 1.46 2.44 0.56 0.85 1.85 Equity capital ratio (%) 2016 2014 2012 11.25 11.22 11.26 12.86 11.85 11.74 11.34 10.90 10.67 11.72 11.89 11.74 12.04 12.64 12.58 10.65 10.23 10.30 12.00 12.04 12.57 12.35 12.32 12.01 10.32 9.78 8.80 10.14 10.43 11.14 11.10 10.95 10.90 12.12 12.61 13.60 * See Table V-A (page 11) for explanations. FDIC QUARTERLY 7 2017 • Volume 11 • Numb er 2 TABLE IV-A. Full Year 2016, All FDIC-Insured Institutions Asset Concentration Groups* FULL YEAR (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions 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 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 Structural Changes New reporters Institutions absorbed by mergers Failed institutions All Insured Institutions 5,913 5,112 801 $16,779.7 15,627.8 1,151.9 12,894.7 11,982.5 912.2 170,831 157,004 13,827 Credit Card Banks 13 12 1 $519.0 447.2 71.8 277.9 223.2 54.7 11,419 9,655 1,764 International Banks 5 5 0 $4,052.7 4,052.7 0.0 2,932.9 2,932.9 0.0 37,737 37,737 0 Agricultural Banks 1,429 1,411 18 $284.9 279.3 5.6 235.8 232.5 3.3 3,361 3,249 111 Commercial Lenders 3,026 2,717 309 $5,628.9 5,157.7 471.2 4,434.6 4,084.5 350.1 52,788 46,329 6,459 Mortgage Lenders 461 110 351 $330.8 89.4 241.4 262.8 76.7 186.1 3,185 1,308 1,877 Consumer Lenders 65 50 15 $256.0 156.5 99.5 215.3 132.2 83.1 2,329 1,564 765 Other Specialized <$1 Billion 300 272 28 $51.0 46.5 4.6 41.1 38.0 3.1 1,441 657 785 All Other <$1 Billion 549 478 71 $97.5 83.4 14.2 82.6 71.0 11.6 891 804 87 All Other >$1 Billion 65 57 8 $5,558.8 5,315.1 243.7 4,411.6 4,191.3 220.3 57,680 55,701 1,978 3.50 0.37 3.13 1.54 2.57 0.29 1.03 1.51 1.04 9.29 0.47 11.54 1.17 10.36 2.63 5.46 3.17 2.28 3.52 2.28 15.35 3.34 2.72 0.36 2.36 1.79 2.36 0.19 0.93 1.31 0.93 9.43 0.55 4.16 0.47 3.68 0.68 2.54 0.16 1.18 1.43 1.21 10.45 0.15 3.71 0.40 3.31 1.33 2.77 0.19 0.96 1.39 0.97 8.12 0.22 3.33 0.49 2.84 1.21 2.51 -0.04 0.96 1.47 0.99 8.63 0.07 3.76 0.36 3.40 1.11 2.43 0.47 0.96 1.52 0.96 9.46 0.56 3.07 0.32 2.75 7.13 5.82 0.05 2.79 3.85 2.85 18.35 0.22 3.83 0.41 3.42 1.03 3.03 0.09 0.89 1.12 0.93 7.91 0.17 3.05 0.26 2.80 1.51 2.25 0.23 1.05 1.57 1.06 9.60 0.41 113.36 58.27 4.36 64.96 122.14 44.24 0.00 46.15 96.14 60.75 0.00 80.00 159.62 61.40 1.96 58.99 123.25 62.96 4.40 70.39 -95.55 63.99 7.81 60.95 118.40 53.04 10.77 64.62 80.73 60.18 7.00 56.00 95.09 71.92 5.83 57.92 109.47 54.82 1.54 75.38 90.01 91.48 87.42 92.85 90.83 94.66 97.34 91.93 92.52 90.11 1.31 92.18 3.84 270.75 1.46 92.71 1.39 143.56 1.11 105.09 0.86 29.02 0.97 103.30 1.53 104.97 1.30 108.73 1.18 65.88 0.86 11.10 9.48 12.87 12.96 14.34 71.22 54.73 69.41 1.14 14.85 12.63 11.85 11.97 14.14 144.60 77.44 52.83 0.61 9.97 8.67 13.40 13.43 14.54 49.59 35.89 48.14 0.77 11.30 10.85 14.43 14.45 15.55 80.07 66.26 82.76 0.87 11.81 10.11 12.32 12.43 13.79 87.61 69.02 78.48 1.97 11.29 11.15 21.83 21.88 22.80 78.78 62.59 79.43 0.70 10.04 10.24 18.14 18.33 19.22 82.81 69.65 84.11 0.63 15.23 14.85 32.64 32.65 33.52 34.34 27.66 80.53 0.94 11.42 11.39 19.46 19.49 20.61 65.22 55.25 84.71 0.96 10.85 8.88 12.40 12.50 14.06 63.47 50.37 74.96 0 251 5 0 0 0 0 0 0 0 39 0 0 185 4 0 8 0 0 1 0 0 4 0 0 13 1 0 1 0 PRIOR FULL YEARS (The way it was...) Number of institutions 2015 2013 2011 6,182 6,812 7,357 14 16 18 4 4 4 1,479 1,532 1,545 3,089 3,378 3,769 500 588 732 65 55 59 332 405 377 632 772 790 67 62 63 Total assets (in billions) 2015 2013 2011 $15,967.6 14,730.8 13,891.3 $549.1 590.9 538.7 $3,774.6 3,700.2 3,456.4 $277.6 261.6 215.7 $5,892.1 4,921.1 4,086.1 $385.4 486.9 825.4 $187.3 162.5 97.2 $57.5 62.8 56.1 $113.8 137.6 138.6 $4,730.3 4,407.1 4,477.2 Return on assets (%) 2015 2013 2011 1.04 1.07 0.88 2.84 3.35 3.49 0.87 0.86 0.74 0.96 1.15 1.11 0.95 0.91 0.63 0.83 0.98 0.56 1.04 1.15 1.68 2.68 1.93 1.92 0.91 0.85 0.92 1.12 1.11 0.89 Net charge-offs to loans & leases (%) 2015 2013 2011 0.44 0.69 1.55 2.79 3.20 5.26 0.59 0.97 1.97 0.10 0.14 0.40 0.20 0.43 1.18 0.13 0.37 0.90 0.62 0.80 1.87 0.20 0.48 0.56 0.20 0.33 0.54 0.41 0.49 1.25 Noncurrent assets plus OREO to assets (%) 2015 2013 2011 0.97 1.63 2.61 0.90 0.93 1.41 0.71 1.07 1.61 0.68 0.95 1.46 0.93 1.65 3.05 1.92 2.14 2.61 0.97 1.23 1.28 0.61 0.84 1.11 1.19 1.44 1.69 1.16 2.18 3.25 Equity capital ratio (%) 2015 2013 2011 11.24 11.15 11.16 14.29 14.73 15.11 10.13 9.27 8.89 11.32 10.97 11.22 11.76 11.79 11.69 11.37 11.62 10.39 10.12 9.51 9.82 15.02 13.50 14.51 11.80 11.34 11.45 11.08 11.52 12.08 * See Table V-A (page 10) for explanations. 8 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE IV-A. Full Year 2016, All FDIC-Insured Institutions Asset Size Distribution FULL YEAR (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions 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 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 Structural Changes New reporters Institutions absorbed by mergers Failed institutions Geographic Regions* All Insured Institutions 5,913 5,112 801 $16,779.7 15,627.8 1,151.9 12,894.7 11,982.5 912.2 170,831 157,004 13,827 Less Than $100 Million 1,541 1,354 187 $91.5 80.9 10.6 76.8 68.6 8.2 812 699 113 $100 Million to $1 Billion 3,637 3,154 483 $1,173.9 996.9 177.0 979.9 839.4 140.5 12,330 10,487 1,842 $1 Billion to $10 Billion 621 506 115 $1,761.7 1,444.3 317.5 1,401.2 1,159.2 242.0 17,027 14,455 2,572 $10 Billion Greater to $250 Than $250 Billion Billion 105 9 89 9 16 0 $5,305.7 $8,446.8 4,658.9 8,446.8 646.9 0.0 4,072.7 6,364.1 3,551.2 6,364.1 521.5 0.0 54,861 85,801 45,561 85,801 9,300 0 3.50 0.37 3.13 1.54 2.57 0.29 1.03 1.51 1.04 9.29 0.47 4.12 0.44 3.68 1.21 3.47 0.13 0.87 1.04 0.90 6.95 0.20 4.14 0.46 3.68 1.20 3.17 0.13 1.05 1.35 1.08 9.52 0.14 4.04 0.43 3.61 1.22 2.86 0.25 1.00 1.47 1.02 8.68 0.25 3.88 0.43 3.45 1.58 2.68 0.45 1.06 1.59 1.07 8.90 0.64 113.36 58.27 4.36 64.96 106.52 75.30 9.28 55.48 138.47 68.40 2.89 66.24 143.41 61.74 1.45 79.39 90.01 92.09 92.85 1.31 92.18 1.42 112.36 0.86 11.10 9.48 12.87 12.96 14.34 71.22 54.73 69.41 New York 724 374 350 $3,096.5 2,658.1 438.4 2,324.1 1,995.1 329.0 26,566 23,491 3,075 Atlanta 720 651 69 $3,507.3 3,424.1 83.2 2,762.2 2,695.2 67.1 35,152 34,431 721 Chicago 1,271 1,063 208 $3,784.3 3,672.2 112.1 2,820.6 2,741.5 79.1 36,764 35,424 1,340 Kansas City 1,485 1,431 54 $3,633.8 3,574.2 59.6 2,742.2 2,694.0 48.2 38,977 38,497 480 San Dallas Francisco 1,268 445 1,186 407 82 38 $1,010.7 $1,747.0 885.4 1,413.7 125.3 333.2 834.2 1,411.4 731.7 1,125.0 102.5 286.4 9,970 23,402 8,527 16,634 1,443 6,768 3.05 0.30 2.74 1.63 2.36 0.23 1.02 1.49 1.03 9.70 0.47 3.54 0.46 3.07 1.33 2.54 0.32 0.86 1.23 0.87 7.22 0.52 3.63 0.31 3.32 1.45 2.57 0.36 1.01 1.50 1.02 8.33 0.54 2.79 0.30 2.49 1.85 2.54 0.14 0.99 1.40 1.00 9.66 0.27 3.65 0.42 3.24 1.35 2.42 0.29 1.06 1.57 1.09 10.82 0.53 3.97 0.32 3.65 1.41 3.11 0.28 1.01 1.39 1.02 9.22 0.31 4.10 0.40 3.70 1.91 2.75 0.47 1.40 2.18 1.40 11.69 0.58 118.72 56.00 0.95 75.24 101.73 57.33 0.00 55.56 113.28 61.13 5.52 69.06 113.23 57.53 7.08 67.08 101.54 62.00 5.27 64.99 103.00 55.82 2.49 61.35 141.89 64.33 3.55 64.04 131.99 50.28 4.04 69.44 92.19 90.96 88.54 89.57 89.02 89.51 89.55 91.88 93.74 1.30 132.89 1.18 119.52 1.36 110.99 1.31 72.99 1.25 109.16 1.35 83.10 1.25 85.26 1.35 76.28 1.28 93.75 1.36 172.76 1.10 12.71 12.62 20.15 20.19 21.27 69.65 58.48 83.98 0.95 11.15 10.98 15.32 15.36 16.47 79.85 66.66 83.46 0.84 11.55 10.44 13.46 13.48 14.49 87.12 69.29 79.25 0.78 11.87 10.17 12.97 13.15 14.72 77.02 59.12 73.14 0.90 10.50 8.62 12.25 12.29 13.68 62.70 47.24 62.91 0.70 12.11 9.95 12.97 13.12 14.55 73.97 55.52 68.10 1.03 12.05 9.52 12.58 12.68 14.14 73.24 57.68 76.15 0.79 10.32 9.03 12.97 13.03 14.20 65.68 48.95 65.71 1.00 9.87 8.74 11.90 11.91 13.57 68.82 51.93 59.10 1.06 10.92 9.95 13.09 13.19 14.31 77.56 64.01 82.46 0.53 11.79 10.90 15.03 15.20 16.36 74.72 60.37 80.16 0 251 5 0 89 4 0 135 1 0 25 0 0 2 0 0 0 0 0 33 1 0 38 1 0 62 1 0 53 0 0 42 2 0 23 0 PRIOR FULL YEARS (The way it was…) Number of institutions 2015 2013 2011 6,182 6,812 7,357 1,688 2,056 2,415 3,792 4,090 4,284 595 559 551 99 100 100 8 7 7 762 840 915 762 869 957 1,337 1,470 1,552 1,543 1,659 1,773 1,307 1,431 1,542 471 543 618 Total assets (in billions) 2015 2013 2011 $15,967.6 14,730.8 13,891.3 $99.2 119.7 138.7 $1,199.9 1,246.1 1,279.9 $1,682.4 1,468.5 1,410.9 $5,163.6 4,821.1 4,490.8 $7,822.6 7,075.3 6,571.0 $3,074.1 2,927.2 2,864.6 $3,372.6 2,998.8 2,942.8 $3,503.7 3,376.9 3,184.5 $3,444.0 3,222.9 2,918.2 $943.1 869.9 812.9 $1,630.3 1,335.1 1,168.4 Return on assets (%) 2015 2013 2011 1.04 1.07 0.88 0.84 0.70 0.52 1.06 0.91 0.56 1.10 1.16 0.79 1.02 1.06 1.04 1.05 1.08 0.85 0.87 0.87 1.01 1.03 0.98 0.52 0.96 0.95 0.78 1.16 1.24 0.95 1.09 1.09 0.94 1.31 1.55 1.47 Net charge-offs to loans & leases (%) 2015 2013 2011 0.44 0.69 1.55 0.19 0.35 0.62 0.16 0.36 0.90 0.21 0.41 1.18 0.56 0.90 1.91 0.48 0.68 1.56 0.48 0.92 1.86 0.50 0.66 1.66 0.27 0.49 1.19 0.52 0.87 1.85 0.24 0.32 0.89 0.52 0.57 1.15 Noncurrent assets plus OREO to assets (%) 2015 2013 2011 0.97 1.63 2.61 1.25 1.75 2.34 1.12 1.81 3.01 0.93 1.89 3.13 0.75 0.99 1.88 1.09 1.97 2.92 0.75 1.12 1.78 1.15 2.23 3.84 0.94 1.47 2.31 1.19 1.99 2.76 1.04 1.58 2.60 0.53 0.91 1.97 Equity capital ratio (%) 2015 2013 2011 11.24 11.15 11.16 12.55 11.68 11.83 11.25 10.78 10.65 11.69 11.79 11.73 12.02 12.32 12.62 10.60 10.28 10.13 11.78 12.02 12.26 12.22 12.19 11.98 10.50 9.66 8.68 10.22 10.42 11.12 11.04 10.87 10.92 12.03 12.65 13.48 * See Table V-A (page 11) for explanations. FDIC QUARTERLY 9 2017 • Volume 11 • Numb er 2 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* March 31, 2017 All Insured Institutions Credit Card International Banks Banks Agricultural Banks Commercial Lenders Mortgage Lenders Consumer Lenders Other Specialized <$1 Billion All Other <$1 Billion All Other >$1 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 0.68 0.35 0.27 0.13 0.63 1.14 0.34 1.25 1.23 1.28 0.32 0.65 0.20 0.00 0.00 0.00 0.79 0.22 0.97 1.41 1.41 1.29 1.14 1.39 0.91 0.80 0.32 0.09 1.04 1.26 0.31 1.09 1.05 1.15 0.42 0.70 0.87 0.88 0.74 0.19 0.40 1.05 0.98 1.27 0.96 1.29 1.32 0.92 0.46 0.33 0.26 0.13 0.45 0.88 0.30 1.10 0.95 1.12 0.19 0.44 0.94 0.47 0.33 0.29 0.60 1.06 0.54 0.95 0.98 0.95 0.17 0.88 0.35 1.61 0.57 0.12 0.33 0.33 0.24 0.68 0.68 0.68 0.04 0.51 1.37 0.74 1.04 2.54 0.44 1.77 1.16 1.43 0.96 1.47 0.48 1.10 1.24 1.22 0.94 1.04 0.60 1.46 1.15 1.56 2.65 1.53 0.56 1.04 0.95 0.18 0.22 0.11 0.72 1.44 0.37 1.45 1.14 1.61 0.26 0.78 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 1.82 0.67 0.67 0.17 2.49 3.03 1.21 0.91 1.32 0.52 0.24 1.34 0.61 0.00 0.00 0.00 0.00 0.69 0.90 1.47 1.52 0.66 0.19 1.45 2.62 0.41 0.64 0.07 4.14 3.63 1.23 0.99 1.14 0.71 0.16 1.46 1.00 0.74 0.94 0.39 0.42 0.89 1.52 0.56 0.35 0.57 1.14 1.08 1.03 0.67 0.67 0.18 1.31 1.77 1.26 0.73 0.98 0.70 0.35 1.01 3.25 0.68 1.21 0.48 1.64 3.76 0.83 0.45 0.85 0.41 0.25 2.98 1.41 5.24 3.68 0.72 1.95 1.13 0.57 0.59 1.34 0.41 1.78 0.91 1.53 2.12 1.37 0.52 0.70 1.69 1.49 0.79 0.63 0.80 0.58 1.37 1.25 0.91 1.42 1.58 0.55 1.27 1.11 0.68 1.07 0.67 0.57 1.15 2.96 0.68 0.54 0.13 3.50 4.28 1.12 0.62 1.15 0.34 0.12 1.67 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 0.04 -0.05 0.02 -0.01 0.21 0.04 0.32 2.34 3.63 1.07 0.10 0.49 0.03 0.00 0.00 0.00 -1.11 0.05 2.82 3.97 4.07 1.97 0.33 3.93 0.07 0.00 -0.01 -0.01 0.38 0.05 0.20 3.19 3.33 2.92 0.02 0.66 0.02 -0.04 0.00 0.03 0.17 0.04 0.26 0.38 2.17 0.23 0.04 0.09 0.03 -0.05 0.03 0.00 0.14 0.05 0.37 1.07 3.15 0.76 0.15 0.20 0.05 0.09 0.54 0.00 -0.08 0.01 0.28 1.12 3.66 0.85 0.18 0.09 0.01 -0.36 -0.02 0.00 0.05 0.02 0.85 1.02 2.79 0.59 0.07 0.65 0.06 0.35 0.08 0.10 0.01 0.01 -0.04 0.41 0.93 0.36 0.50 0.12 0.04 -0.03 0.01 0.01 0.06 0.07 0.37 0.48 1.11 0.47 0.14 0.13 0.04 -0.09 0.00 -0.03 0.25 0.03 0.24 1.70 3.17 0.88 0.12 0.38 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) $4,626.2 319.2 1,346.6 390.4 430.0 1,984.8 1,960.7 1,545.2 756.1 789.0 1,167.1 9,299.2 $0.3 0.0 0.0 0.0 0.0 0.2 15.2 380.2 361.4 18.9 0.2 395.9 $544.4 14.1 44.8 72.1 59.7 307.7 312.9 262.9 170.3 92.6 330.2 1,450.4 $111.6 6.4 29.9 3.6 2.1 27.4 20.7 6.1 0.5 5.7 41.0 179.4 $2,441.6 231.4 964.5 254.5 198.1 750.5 933.0 308.4 38.2 270.2 299.2 3,982.2 $188.4 5.3 16.5 4.5 10.7 150.8 5.5 4.6 0.4 4.2 10.0 208.5 $56.5 0.3 3.8 0.7 4.7 46.8 8.8 105.4 20.2 85.2 10.2 180.9 $10.0 0.8 3.4 0.3 0.3 4.6 1.9 1.8 0.1 1.7 0.9 14.6 $44.8 2.7 10.5 1.3 1.8 24.9 4.6 4.5 0.1 4.4 3.7 57.6 $1,228.5 58.1 273.2 53.3 152.6 672.0 658.2 471.1 164.8 306.4 471.8 2,829.7 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 10,364.9 3,204.9 2,685.7 181.6 3,621.6 148.6 501.3 0.1 0.0 0.0 0.0 0.1 0.0 0.0 601.0 3.0 50.0 10.0 398.0 0.0 121.0 314.9 92.2 101.0 17.0 61.0 43.6 0.2 6,743.2 2,636.1 2,058.7 138.5 1,728.8 85.8 95.3 273.0 62.0 31.2 6.1 146.9 1.6 25.2 99.0 9.5 16.3 0.0 56.7 0.0 16.5 93.3 38.5 27.4 2.9 23.7 0.6 0.2 261.5 86.8 77.9 5.0 83.1 8.6 0.1 1,979.0 276.9 323.3 2.1 1,123.2 8.4 242.9 * 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. 10 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution Geographic Regions* All Insured Institutions Less Than $100 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 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 0.68 0.35 0.27 0.13 0.63 1.14 0.34 1.25 1.23 1.28 0.32 0.65 1.29 0.99 1.01 0.69 0.66 1.58 1.37 1.68 4.51 1.62 1.20 1.17 0.65 0.61 0.43 0.30 0.44 0.94 0.66 1.25 1.87 1.20 0.90 0.59 0.37 0.29 0.24 0.11 0.35 0.62 0.45 1.22 1.67 1.06 0.41 0.44 0.55 0.31 0.27 0.11 0.49 0.93 0.26 1.17 1.33 0.97 0.19 0.59 0.96 0.25 0.17 0.10 0.81 1.48 0.34 1.34 1.08 1.57 0.33 0.77 0.51 0.34 0.39 0.11 0.44 0.83 0.28 1.04 1.04 1.04 0.11 0.53 0.79 0.32 0.22 0.07 0.77 1.34 0.36 1.72 1.40 2.04 0.18 0.78 0.70 0.38 0.30 0.17 0.71 1.02 0.32 0.98 1.03 0.97 0.41 0.59 0.96 0.32 0.21 0.15 0.70 1.58 0.35 1.21 1.11 1.34 0.47 0.78 0.68 0.41 0.31 0.23 0.46 1.42 0.47 0.89 0.68 0.98 0.35 0.60 0.29 0.29 0.18 0.08 0.26 0.45 0.33 1.21 1.73 0.79 0.33 0.50 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 1.82 0.67 0.67 0.17 2.49 3.03 1.21 0.91 1.32 0.52 0.24 1.34 1.32 1.21 1.48 0.56 0.72 1.38 1.72 0.91 2.74 0.87 0.94 1.29 0.95 1.19 0.88 0.52 0.57 1.04 1.25 0.78 1.55 0.73 0.84 0.98 0.85 0.72 0.66 0.20 0.68 1.36 1.65 0.79 1.67 0.49 0.72 0.97 1.40 0.37 0.65 0.09 1.38 2.44 1.26 1.07 1.46 0.57 0.30 1.18 3.05 0.64 0.52 0.12 3.84 4.44 1.07 0.78 1.13 0.47 0.13 1.66 1.36 0.66 0.79 0.14 2.39 2.17 1.02 0.97 1.17 0.66 0.27 1.12 2.37 1.20 0.64 0.21 3.15 3.71 1.12 1.02 1.42 0.64 0.15 1.54 2.06 0.52 0.76 0.15 2.37 3.20 0.95 0.68 1.12 0.52 0.16 1.37 2.55 0.46 0.61 0.23 2.81 4.21 1.42 0.87 1.18 0.43 0.30 1.65 1.21 0.57 0.70 0.43 1.21 2.34 2.10 0.91 1.37 0.71 0.39 1.30 0.57 0.52 0.46 0.09 0.59 0.71 1.23 0.93 1.76 0.27 0.41 0.77 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 0.04 -0.05 0.02 -0.01 0.21 0.04 0.32 2.34 3.63 1.07 0.10 0.49 0.03 0.00 -0.05 -0.03 0.05 0.08 0.24 0.84 18.65 0.51 0.06 0.13 0.02 0.00 0.01 0.02 0.07 0.04 0.28 0.88 6.28 0.50 0.21 0.10 0.02 -0.02 0.02 0.00 0.08 0.03 0.31 1.89 4.75 0.85 0.11 0.20 0.05 -0.07 0.07 -0.01 0.14 0.05 0.44 2.54 3.87 0.75 0.11 0.71 0.05 -0.09 -0.03 -0.02 0.29 0.04 0.24 2.26 3.23 1.40 0.09 0.49 0.06 -0.02 0.05 0.00 0.19 0.07 0.22 2.27 3.11 0.86 0.10 0.52 0.07 -0.03 0.06 0.00 0.26 0.05 0.35 2.38 4.00 0.78 0.14 0.58 0.05 -0.03 0.03 0.00 0.24 0.03 0.20 2.22 3.33 1.81 0.10 0.34 0.02 -0.13 -0.03 -0.05 0.21 0.04 0.31 2.52 3.45 1.23 0.08 0.51 0.01 -0.01 0.01 -0.01 0.04 0.02 0.50 1.56 2.78 1.00 0.14 0.26 -0.01 -0.11 0.01 -0.01 0.00 0.00 0.55 2.43 4.59 0.62 0.05 0.67 $4,626.2 319.2 1,346.6 390.4 430.0 1,984.8 1,960.7 1,545.2 756.1 789.0 1,167.1 $35.7 2.0 9.0 1.0 0.9 16.2 6.1 3.4 0.1 3.3 6.9 $606.8 55.9 231.8 33.3 24.6 212.5 98.7 31.6 2.0 29.6 47.9 $891.9 84.0 364.4 94.6 46.9 280.8 187.9 82.9 21.5 61.4 62.0 $1,440.6 105.9 449.0 143.9 142.7 583.3 717.0 714.8 402.5 312.3 327.1 $1,651.3 71.4 292.4 117.5 214.9 892.0 950.9 712.4 330.1 382.3 723.2 $939.4 57.1 304.0 140.6 82.4 351.2 296.0 330.7 205.6 125.1 177.8 $917.6 60.3 275.6 44.0 110.8 415.0 490.7 382.0 186.9 195.1 252.9 $963.2 54.9 209.6 103.0 107.1 465.9 426.7 219.7 57.8 161.9 275.5 $864.9 50.3 192.3 33.4 81.3 419.4 395.9 311.7 180.4 131.3 330.3 $419.6 63.3 172.4 17.9 19.9 129.3 129.0 62.2 19.3 42.9 46.0 $521.4 33.2 192.6 51.5 28.5 204.0 222.4 238.9 106.1 132.8 84.8 9,299.2 52.1 785.0 1,224.8 3,199.6 4,037.8 1,743.9 2,043.1 1,885.1 1,902.8 656.8 1,067.5 10,364.9 3,204.9 2,685.7 181.6 3,621.6 148.6 501.3 296.9 84.2 96.5 13.8 85.5 16.7 0.2 3,152.1 1,450.6 994.2 65.1 564.7 75.0 2.5 2,338.5 920.2 727.3 55.9 566.2 44.7 24.1 2,273.0 449.0 574.2 20.7 1,068.1 8.1 152.9 2,304.3 300.9 293.5 26.0 1,337.1 4.1 321.7 1,833.3 310.2 480.4 39.9 915.9 8.5 78.4 2,428.8 890.2 535.5 33.7 857.9 36.9 74.6 1,951.6 417.4 520.0 31.8 807.8 24.5 150.0 1,849.5 643.7 378.6 42.7 557.3 27.0 179.2 1,617.1 698.9 553.7 17.6 298.9 40.4 7.6 684.6 244.4 217.6 15.8 183.7 11.4 11.5 March 31, 2017 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) 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 * 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 2017 • Volume 11 • Numb er 2 Table VI-A. Derivatives, All FDIC-Insured Call Report Filers Asset Size Distribution % 1st Change Quarter 16Q12016 17Q1 Less Than $100 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 Billion 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1,418 $15,362,217 11,768,696 180,509,183 1,425 $15,183,863 11,589,570 166,795,905 1,441 $15,189,007 11,513,889 179,902,250 1,446 $15,033,250 11,313,864 192,350,483 1,429 $14,766,710 11,189,572 195,508,112 -0.8 4.0 5.2 -7.7 58 $4,332 3,631 225 Derivative Contracts by Underlying Risk Exposure Interest rate 132,702,864 Foreign exchange* 38,313,517 Equity 2,839,056 Commodity & other (excluding credit derivatives) 1,349,981 Credit 5,303,594 Total 180,495,880 124,479,961 33,277,647 2,487,752 1,257,180 5,293,365 166,795,905 132,992,944 36,299,774 2,734,807 1,312,260 6,562,465 179,902,250 143,794,696 37,701,788 2,672,364 1,328,302 6,853,333 192,350,483 147,217,558 37,129,026 2,533,921 1,209,774 7,417,833 195,508,112 -9.9 3.2 12.0 11.6 -28.5 -7.7 206 0 0 0 0 93 25,786 1 0 1 1 12,824 115,281 38,794,347 93,767,243 3,334 7,081,614 31,228,569 167 165,730 2,673,160 28 85,167 1,264,785 885 318,782 4,983,926 119,642 46,445,639 133,917,682 Derivative Contracts by Transaction Type Swaps Futures & forwards Purchased options Written options Total 99,182,539 39,858,095 16,947,409 17,051,369 173,039,411 96,383,751 34,192,699 14,799,704 14,586,156 159,962,310 103,013,911 36,958,352 15,466,148 15,459,962 170,898,372 111,900,682 38,790,403 16,277,239 16,012,000 182,980,323 114,814,113 37,151,052 16,857,276 16,706,694 185,529,134 -13.6 7.3 0.5 2.1 -6.7 19 17 0 56 93 6,196 3,273 319 3,035 12,823 80,421 25,495,034 73,600,869 19,270 8,615,182 31,220,353 4,190 5,863,363 11,079,536 14,742 5,930,275 11,103,260 118,623 45,903,855 127,004,018 65,735 1,613 -4,921 118 24,958 -24,932 62,630 10,779 -2,181 622 16,617 -15,028 77,292 13,372 1,643 -2,185 17,871 -17,575 75,051 11,369 6,637 -3,151 1,037 -167 75,481 -11,530 5,035 -4,310 2,901 -966 -12.9 N/M N/M N/M 760.3 N/M 0 0 0 0 0 0 81 0 0 0 -1 0 61,926,338 46,450,806 29,972,991 27,320,413 4,772,297 2,429,320 2,202,638 762,751 84,970 55,052,877 43,262,497 29,761,959 23,910,532 4,453,265 2,420,119 1,847,254 680,094 122,956 58,874,863 45,382,723 32,522,164 25,797,765 4,096,173 1,901,381 1,954,392 821,844 129,226 66,424,468 47,001,897 33,930,510 26,622,784 4,112,254 2,150,431 1,907,096 709,947 134,063 65,650,625 50,714,212 34,845,968 26,231,748 4,081,595 1,819,360 1,841,069 674,710 129,076 -5.7 -8.4 -14.0 4.2 16.9 33.5 19.6 13.0 -34.2 34 25 23 0 0 0 0 0 0 5,680 2,023 6,076 0 0 0 0 0 0 2,722,501 3,054,143 487,184 2,681,842 3,198,687 339,228 2,826,215 4,009,130 540,260 3,032,137 4,354,280 368,331 2,813,615 4,800,922 619,196 -3.2 -36.4 -21.3 0 0 0 4 5 16 46 157 237 92,030 161,837 34,922 2,630,421 2,892,144 452,010 25.7 46.6 29.2 44.0 35.2 41.0 37.2 43.5 34.5 47.5 0.0 0.1 0.4 0.3 0.6 0.7 15.7 22.2 38.5 74.5 72.3 73.2 76.2 80.7 82.0 0.1 0.7 1.3 37.9 112.9 1.2 30.3 38.1 31.9 13.3 -91.0 0.0 0.0 0.0 0.3 1.0 201 12,124,340 9,265,768 260 12,093,950 9,222,752 251 12,138,739 9,188,820 257 11,985,163 8,976,508 252 11,719,834 8,831,048 -20.2 3.5 4.9 3 248 213 44 21,235 17,747 91 329,567 261,671 55 3,463,883 2,736,768 8 8,309,408 6,249,369 Derivative Contracts by Underlying Risk Exposure Interest rate 130,188,927 Foreign exchange 35,648,870 Equity 2,823,564 Commodity & other 1,321,931 Total 169,983,292 121,957,335 31,228,297 2,472,540 1,255,198 156,913,371 130,490,614 33,353,870 2,718,187 1,310,469 167,873,141 141,316,485 144,689,181 34,671,042 34,029,316 2,656,373 2,510,439 1,326,621 1,208,052 179,970,521 182,436,988 -10.0 4.8 12.5 9.4 -6.8 5 0 0 0 5 642 0 0 1 643 3,906 1,684 922 546 7,059 -1,376 5,941 574 844 5,984 2,962 2,294 728 437 6,421 1,906 3,736 972 420 7,034 3,072 1,407 670 455 5,604 27.1 19.7 37.6 20.0 26.0 0 0 0 0 0 0 0 0 0 0 24 3 6 1 34 1,123 -137 10 -120 876 2,759 1,818 907 665 6,149 Share of Revenue Trading revenues to gross revenues (%)** Trading revenues to net operating revenues (%)** 5.4 24.0 4.6 19.9 4.9 20.7 5.5 24.7 4.6 22.6 0.0 0.0 0.0 0.0 0.9 4.2 2.5 11.6 6.7 29.2 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives 830 14,907,649 11,394,815 1,295 14,886,289 11,348,196 1,320 14,893,525 11,271,425 1,325 14,754,766 11,087,225 1,302 14,523,713 10,994,562 -36.3 2.6 3.6 15 1,143 947 325 154,668 128,565 385 1,231,829 988,292 96 4,936,495 3,794,298 9 8,583,515 6,482,713 Derivative Contracts by Underlying Risk Exposure Interest rate Foreign exchange Equity Commodity & other Total notional amount 2,500,806 511,772 15,492 28,049 3,056,119 2,522,626 509,119 15,211 1,982 3,048,938 2,502,329 504,491 16,620 1,791 3,025,231 2,478,211 513,919 15,991 1,681 3,009,802 2,528,378 538,565 23,483 1,722 3,092,147 -1.1 -5.0 -34.0 1,528.9 -1.2 88 0 0 0 88 12,179 0 0 0 12,180 80,186 414 167 15 80,781 536,183 35,199 12,228 27,127 610,738 1,872,170 476,159 3,097 908 2,352,333 (dollar figures in millions; notional amounts unless otherwise indicated) ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives Total derivatives 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 (%) Credit losses on derivatives**** HELD FOR TRADING Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives Trading Revenues: Cash & Derivative Instruments Interest rate** Foreign exchange** Equity** Commodity & other (including credit derivatives)** Total trading revenues** 826 424 101 9 $352,576 $1,323,761 $5,098,034 $8,583,515 293,122 1,062,767 3,926,463 6,482,713 25,942 119,695 46,445,639 133,917,682 230 11 0 0 -1 -29 33,118 2,833 -12 -201 436 -130 32,305 -1,231 -4,909 318 24,524 -24,773 19,604 12,197,014 30,579 12,133,656 46,396 8,898,588 1,971 4,864,826 587 900,678 82 664,278 15 49,180 63 43,536 0 15,406 49,704,006 34,284,523 21,021,908 22,453,616 3,871,032 1,764,961 2,153,444 719,152 69,564 35,043 38,258,164 91,895,073 2,786 6,823,412 28,822,671 0 153,501 2,670,063 14 58,040 1,263,877 37,843 45,293,117 124,651,684 All line items are reported on a quarterly basis. N/M - Not Meaningful * Includes 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. ** Does not include banks filing the FFIEC 051 report form, which was introduced in first quarter 2017. *** 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 banks filing the FFIEC 041 report form that have $300 million or more in total assets, but is not applicable to banks filing the FFIEC 051 form. 12 FDIC QUARTERLY 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 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 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 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 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 66 75 74 74 $634,357 $643,700 $668,378 24 25 27 16,406 12,879 13,491 12,158 11,543 11,024 3,955 4,576 4,732 312 276 161 56,771 64,170 64,843 723,984 737,169 762,656 % Less 1st Change Than Quarter 16Q1$100 2016 17Q1 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 Billion 34 7 73 -9.6 0 6 19 $687,192 $704,679 29 29 13,485 13,400 8,935 5,604 4,907 5,092 164 200 70,678 74,114 785,391 803,118 -10.0 -17.2 22.4 117.0 -22.3 56.0 -23.4 -9.9 $0 0 0 0 0 0 0 0 $1,658 0 0 0 0 0 0 1,658 $13,347 0 0 2,200 0 0 8,674 24,220 $86,820 $532,533 24 0 16,357 49 9,959 0 2,261 1,694 0 312 1,462 46,635 116,883 581,222 1,906 0 1,443 125 100 0 875 4,448 2,056 0 1,162 428 97 0 1,142 4,884 2,114 0 1,209 436 96 0 838 4,693 2,080 0 1,207 0 91 0 971 4,349 2,162 0 1,152 0 86 0 898 4,298 -11.8 0.0 25.3 0.0 16.3 0.0 -2.6 3.5 0 0 0 0 0 0 0 0 17 0 0 0 0 0 0 17 0 0 0 0 0 0 51 51 1,281 0 1,443 125 0 0 0 2,849 608 0 0 0 100 0 824 1,532 142 175 140 138 73 94.5 0 0 0 22 120 3.0 5.6 0.4 1.2 4.0 0.0 1.0 2.7 4.1 6.9 0.4 1.7 4.6 0.0 0.7 3.7 3.7 5.5 0.4 1.5 4.5 0.0 0.4 3.3 3.6 8.6 0.4 1.3 3.8 0.0 0.4 3.3 3.1 6.2 0.4 1.2 3.8 0.0 0.5 2.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.1 0.0 0.0 2.6 0.0 0.0 0.0 0.9 2.6 5.6 0.4 0.9 1.9 0.0 0.1 2.1 3.1 0.0 2.0 0.0 6.8 0.0 1.1 2.9 1.4 47.8 0.3 0.3 4.1 0.0 1.6 1.4 1.5 47.1 0.3 0.3 4.2 0.0 1.3 1.4 1.5 47.4 0.3 0.3 3.8 0.0 1.5 1.4 1.6 45.5 0.3 0.2 3.6 0.1 1.3 1.5 1.6 47.3 0.3 0.3 3.9 0.1 1.4 1.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.5 0.0 0.0 0.6 0.0 0.0 0.4 0.5 1.1 47.8 0.3 0.2 0.9 0.0 0.0 0.9 1.4 0.0 2.0 0.0 8.3 0.0 1.9 1.5 0.1 2.6 0.4 0.2 0.4 0.0 0.5 0.1 0.3 6.9 4.2 0.7 1.0 0.0 0.5 0.4 0.2 3.6 3.7 0.5 0.7 0.0 0.3 0.3 0.2 2.2 3.4 0.3 0.5 0.0 0.3 0.3 0.1 1.0 3.0 0.3 0.2 0.0 0.1 0.1 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 0.5 0.0 0.0 0.0 0.0 0.0 2.6 0.4 0.2 0.2 0.0 0.0 0.1 0.1 0.0 2.0 0.0 0.6 0.0 0.6 0.1 0 8,080 365 0 13,335 327 0 11,355 216 0 11,954 219 0 12,811 268 0.0 -36.9 36.2 0 0 0 0 0 0 0 0 0 0 8,080 0 0 0 365 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 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 574 1,066 1,079 1,089 1,092 -47.4 30 299 188 49 8 25,872 564 230 93,140 119,806 38,320 580 364 89,265 128,528 37,792 626 339 84,258 123,015 36,609 634 340 80,687 118,270 36,852 684 271 79,266 117,073 -29.8 -17.5 -15.1 17.5 2.3 250 0 0 0 250 7,285 1 13 17 7,316 8,921 27 40 151 9,139 4,759 23 154 28,749 33,685 4,658 512 23 64,223 69,416 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 7,610 153 175 25,918 33,856 10,883 147 308 25,036 36,374 11,033 148 183 23,286 34,651 10,863 134 186 22,193 33,376 9,529 161 181 21,684 31,555 -20.1 -5.0 -3.3 19.5 7.3 13 0 0 0 13 831 1 13 17 863 3,140 26 8 41 3,216 2,439 2 154 8,391 10,986 1,186 123 0 17,470 18,779 Support for Securitization Facilities Sponsored by Other Institutions Number of institutions reporting securitization facilities sponsored by others Total credit exposure Total unused liquidity commitments 64 35,130 1,118 104 35,264 1,131 104 40,190 1,411 109 42,341 2,853 110 41,082 1,387 -41.8 -14.5 -19.4 1 0 0 23 40 13 21 214 0 13 2,205 491 6 32,671 614 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 (%)*** 5,923,340 5,981,964 5,962,395 5,996,359 6,012,968 -1.5 4,704 212,847 17,521 21,720 23,084 21,665 18,378 -4.7 0 0 309,802 1,279,879 4,116,107 0 0 17,521 25,784 2,827 365 4.7 21,832 5,039 228 4.9 24,417 2,647 287 5.1 24,287 1,174 181 5.2 26,866 882 203 5.1 -4.0 220.5 79.8 0 8 0 0.1 0 268 7 0.7 6 202 9 1.9 1,910 1,090 297 3.0 23,868 1,259 52 7.3 * Does not include banks filing the FFIEC 051 report form, which was introduced in first quarter 2017. ** 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 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 previous quarter. Community Bank Net Income Rises 10.4 Percent From a Year Ago Net Interest Income and Noninterest Income Increase Net Interest Margin of 3.54 Percent Down Slightly From a Year Ago Loan Balances Increase 7.7 Percent Over the Past 12 Months Asset Quality Improves, Except for Commercial and Industrial Loans Net Income Improves at More Than Half of Community Banks From a Year Ago Net income for the 5,401 community banks in first quarter 2017 totaled $5.6 billion, an increase of $522.9 million (10.4 percent) from the first quarter of 2016. Higher net interest income and noninterest income drove the increase in quarterly net income, but were offset in part by higher loan-loss provisions and noninterest expense. More than half of community banks (56 percent) reported higher net income compared to a year ago. The pretax return on assets increased to 1.33 percent, up 14 basis points from the previous quarter and 6 basis points from the year before. Three community banks failed during the quarter, and one de novo community bank was added. Net Interest Income Increases 7.1 Percent From the Previous Year Net interest income of $18.1 billion rose by $1.2 billion (7.1 percent) from a year ago. More than two out of three community banks (69 percent) reported higher net interest income from a year ago. The year-over-year increase can be attributed to non 1-to-4 family real estate loans (up $761.8 million, or 10 percent).1 The average net interest margin (NIM) declined slightly from 3.56 percent in first quarter 2016 to 3.54 percent, as asset yields remained flat and funding costs increased 2 basis points. NIM at community banks was 41 basis points higher than noncommunity banks and 35 basis points above the industry overall. However, the difference is the smallest since the second quarter of 2013. 1 Non loans. 1-to-4 family real estate loans include construction and development, farmland, multifamily, and nonfarm nonresidential Chart 1 Chart 2 Contributors to the Year-Over-Year Change in Income Net Interest Margin FDIC-Insured Community Banks Positive Factor $ Billions Negative Factor 1.5 $0.52 $1.20 $0.03 $0.30 $0.72 -$0.04 Community Banks All Insured Institutions Percent 4.0 $0.19 1.0 3.54 3.5 0.5 -0.5 3.19 3.0 0.0 +10% +7% Net Income Net Interest Income Source: FDIC. +5% +7% +5% Loan Loss Noninterest Noninterest Provisions Income Expense -26% +12% Realized Gains on Securities Income Taxes 2.5 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: FDIC. FDIC QUARTERLY 15 2017 • Volume 11 • Numb er 2 Noninterest Income Grows 6.8 Percent Year Over Year to $4.8 Billion Noninterest income of $4.8 billion was $304.3 million (6.8 percent) higher than a year ago and almost twice the growth rate of noncommunity banks (3.7 percent). A majority of community banks (57 percent) reported higher noninterest income compared to a year earlier. Improvement in noninterest income was led by higher other noninterest income (up $157.5 million, or 9 percent) and servicing fees (up $88.1 million, or 50.6 percent).2 Noninterest Expense Up 5 Percent From a Year Ago Community banks reported noninterest expense of $15.1 billion in the first quarter, a $721.9 million (5 percent) increase from a year earlier. The annual increase in noninterest expense was led by higher salary and employee benefits (up $537.3 million, or 6.6 percent). Full-time equivalent employees totaled 428,632 in the first quarter, up 10,841 (2.6 percent) from the first quarter of 2016. Average assets per employee of $5.2 million in the first quarter were up 5.6 percent from a year ago. Loan Balances Rise at Community Banks in the First Quarter Loan balances totaled $1.5 trillion in the first quarter, up $16.7 billion (1.1 percent) from the fourth quarter of 2016. At March 31, loan balances represented 69.1 percent of total assets, the highest proportion for a first quarter since 2009. In contrast to community banks, loan balances declined for noncommunity banks (down $24.7 billion, or 0.3 percent). More than half (57 percent) of community banks increased their loan balances from the previous quarter. The quarterly increase was led by nonfarm nonresidential loans (up $10.4 billion, or 2.4 percent), multifamily residential loans (up $3.6 billion, or 3.3 percent), commercial and industrial loans (up $2.1 billion, or 1.1 percent), construction and development loans (up $1.7 billion, or 1.7 percent), and 1-to-4 family residential mortgages (up $1.6 billion, or 0.4 percent). 2 Other noninterest income includes items that are greater than $100,000 and exceed 3 percent of all other noninterest income reported. They include income and fees from printing and sale of checks, earnings on 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, gains on bargain purchases, and other miscellaneous items. Chart 3 Chart 4 Change in Loan Balances and Unused Commitments Noncurrent Loan Rates for FDIC-Insured Community Banks FDIC-Insured Community Banks Change 1Q 2017 vs. 1Q 2016 Change 1Q 2017 vs. 4Q 2016 $ Billions 43.9 Percent of Loan Portfolio Noncurrent 14 1-to-4 Family RE C&D Loans C&I Loans Credit Cards Nonfarm Nonresidential RE Home Equity 12 10 10.4 11.3 2.1 Nonfarm Nonresidential RE Source: FDIC. 8 16.5 13.4 C&I Loans 1.6 1-to-4 Family Residential RE Loan Balances 16 FDIC QUARTERLY 6 9.5 1.7 C&D Loans 6.8 1.3 -0.6 -2.2 Agricultural Production Loans 2.4 4 2 CRE & C&D C&I Loans Unused Commitments 0 2009 2010 Source: FDIC. 2011 2012 2013 2014 2015 2016 2017 QUARTERLY BANKING PROFILE Annual Loan Growth Rate at Community Banks Outpaces Noncommunity Banks Loan balances rose by $109.9 billion (7.7 percent) over the past 12 months, more than twice the 3.3 percent growth at noncommunity banks. Just over 75 percent of community banks increased their loan balances from a year ago. The 12-month increase was driven by nonfarm nonresidential loans (up $43.9 billion, or 10.8 percent), 1-to-4 family residential mortgages (up $16.5 billion, or 4.3 percent), multifamily residential loans (up $14.2 billion, or 14.5 percent), commercial and industrial loans (up $13.4 billion, or 7.1 percent), and construction and development loans (up $11.3 billion, or 12.4 percent). Unused loan commitments of $292.7 billion in the first quarter grew by $24.2 billion (9 percent) from the year before. Unused commercial real estate loan commitments—including construction and development—increased by $9.5 billion (12.6 percent) from a year ago. Noncurrent Loan Balances Decline Slightly Just over half of community banks (52 percent) reported a decline in noncurrent loan balances from the previous quarter. In aggregate, noncurrent loan balances fell by $37.5 million (0.2 percent) during the quarter. The noncurrent rate decline by 1 basis point during the quarter to 1 percent, and was 41 basis points below the noncommunity bank noncurrent rate. Among community banks, all major loan categories except for commercial and industrial loans saw an improvement in their noncurrent rate from the previous quarter. The noncurrent rate for commercial and industrial loans increased 4 basis points to 1.46 percent, which marks a seventh consecutive quarterly increase. The largest quarterly improvement in the noncurrent rate was in construction and development loans (down 10 basis points) and 1-to-4 family residential mortgages (down 5 basis points). Net Charge-Off Rate Remains Unchanged Community banks reported a net charge-off rate of 0.10 percent in the first quarter, unchanged from a year ago. The net charge-off rate for noncommunity banks increased to 0.57 percent, up 5 basis points from a year before. For community banks, all major loan categories except commercial and industrial loans (up 3 basis points) had a lower net chargeoff rate compared to first quarter 2016. The net charge-off rate for construction and development loans was negative 0.01 percent, as recoveries surpassed charge-offs. Author: Benjamin Tikvina Senior Financial Analyst Division of Insurance and Research (202) 898-6578 FDIC QUARTERLY 17 2017 • Volume 11 • Numb er 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 (%) 2017* 2016* 2016 2015 2014 2013 2012 1.01 9.17 10.74 0.91 0.10 4.11 3.54 9.26 5,401 4.39 0.98 8.75 10.69 1.06 0.10 2.76 3.56 6.41 5,664 5.24 0.99 8.82 10.69 0.94 0.15 2.97 3.57 2.61 5,461 4.52 0.99 8.85 10.67 1.07 0.15 2.71 3.57 9.53 5,735 5.00 0.93 8.45 10.57 1.34 0.21 2.21 3.61 4.81 6,037 6.44 0.90 8.27 10.43 1.73 0.32 0.39 3.59 14.64 6,307 8.40 0.83 7.68 10.18 2.27 0.58 2.25 3.67 56.17 6,542 11.14 * Through March 31, ratios annualized where appropriate. Asset growth rates for 12 months ending March 31. TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks 1st Quarter 2017 4th Quarter 2016 1st Quarter 2016 %Change 16Q1-17Q1 5,401 428,632 5,461 431,061 5,664 434,792 -4.6 -1.4 $2,215,310 1,179,782 394,869 451,673 102,461 50,029 203,832 60,630 2,110 48,363 38,194 665 1,530,135 18,839 1,511,297 432,396 4,780 14,719 252,119 $2,182,989 1,160,737 389,854 445,398 101,901 50,722 203,301 60,901 2,215 50,719 39,695 659 1,514,694 18,674 1,496,020 422,963 5,054 14,407 244,545 $2,127,790 1,101,921 375,940 421,286 95,194 49,937 196,717 59,511 2,080 49,451 37,216 629 1,444,187 18,577 1,425,610 434,583 6,259 13,949 247,388 4.1 7.1 5.0 7.2 7.6 0.2 3.6 1.9 1.4 -2.2 2.6 5.7 6.0 1.4 6.0 -0.5 -23.6 5.5 1.9 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 2,215,310 1,823,130 1,822,679 451 84,575 1,352,875 129,363 767 16,303 245,746 245,621 2,182,989 1,793,676 1,793,198 478 81,073 1,329,595 131,765 806 16,057 240,686 240,589 2,127,790 1,748,381 1,747,961 420 72,914 1,319,792 123,674 580 16,300 238,854 238,756 4.1 4.3 4.3 7.6 16.0 2.5 4.6 32.1 0.0 2.9 2.9 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 8,071 15,286 7,836 186,599 2,064,416 102,163 292,722 262,935 21,418 69,503 8,663 15,307 8,291 181,024 2,029,755 104,002 284,766 294,134 14,704 59,739 9,045 16,099 8,922 185,183 1,979,488 95,125 277,765 258,348 16,316 61,967 -10.8 -5.0 -12.2 0.8 4.3 7.4 5.4 1.8 31.3 12.2 (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 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 * See Notes to Users for explanation. 18 FDIC QUARTERLY Full Year 2016 Full Year 2015 %Change 1st Quarter 2017 1st Quarter 2016 %Change 16Q1-17Q1 $79,194 9,133 70,061 3,247 19,946 59,985 637 6,570 -9 20,834 20,811 2,234 10,212 10,600 20,338 $76,402 8,652 67,750 2,558 19,528 59,373 520 5,633 6 20,239 20,212 2,055 10,094 10,119 19,822 3.7 5.6 3.4 26.9 2.1 1.0 22.5 16.6 N/M 2.9 3.0 8.7 1.2 4.8 2.6 $20,534 2,433 18,101 657 4,804 15,086 129 1,722 7 5,576 5,572 385 2,586 2,986 5,482 $19,721 2,244 17,477 643 4,696 14,986 180 1,564 2 5,161 5,157 356 2,540 2,617 5,017 4.1 8.4 3.6 2.2 2.3 0.7 -28.3 10.1 251.8 8.0 8.0 8.0 1.8 14.1 9.3 N/M - Not Meaningful QUARTERLY BANKING PROFILE TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks Prior Periods Adjusted for Mergers 1st Quarter 2017 4th Quarter 2016 1st Quarter 2016 %Change 16Q1-17Q1 5,401 428,632 5,400 428,150 5,400 417,791 0.0 2.6 $2,215,310 1,179,782 394,869 451,673 102,461 50,029 203,832 60,630 2,110 48,363 38,194 665 1,530,135 18,839 1,511,297 432,396 4,780 14,719 252,119 $2,182,246 1,161,625 393,237 441,260 100,730 50,248 201,685 60,719 2,211 50,596 39,465 653 1,513,437 18,606 1,494,831 424,224 5,006 14,504 243,680 $2,091,073 1,087,208 378,411 407,816 91,179 48,082 190,398 57,475 2,061 48,997 36,778 640 1,420,217 18,211 1,402,005 427,962 6,057 13,469 241,579 5.9 8.5 4.3 10.8 12.4 4.0 7.1 5.5 2.4 -1.3 3.8 4.0 7.7 3.4 7.8 1.0 -21.1 9.3 4.4 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 2,215,310 1,823,130 1,822,679 451 84,575 1,352,875 129,363 767 16,303 245,746 245,621 2,182,246 1,789,494 1,789,031 463 80,981 1,327,981 135,005 797 16,095 240,855 240,770 2,091,073 1,713,887 1,713,481 407 71,464 1,294,749 125,978 522 15,978 234,708 234,610 5.9 6.4 6.4 10.9 18.3 4.5 2.7 47.1 2.0 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 8,071 15,286 7,836 186,599 2,064,416 102,163 292,722 262,935 21,418 69,503 8,687 15,323 8,297 183,117 2,029,122 106,043 283,022 293,299 14,704 59,228 8,982 15,877 8,746 183,193 1,946,626 96,530 268,511 244,350 13,497 58,203 -10.1 -3.7 -10.4 1.9 6.1 5.8 9.0 7.6 58.7 19.4 (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 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 * See Notes to Users for explanation. Full Year 2016 Full Year 2015 %Change 1st Quarter 2017 1st Quarter 2016 %Change 16Q1-17Q1 $78,895 9,173 69,722 3,212 19,809 59,612 634 6,549 -9 20,783 20,760 2,214 10,159 10,601 20,290 $73,073 8,401 64,672 2,475 18,400 56,182 505 5,523 5 19,403 19,377 1,922 9,729 9,648 18,999 8.0 9.2 7.8 29.8 7.7 6.1 25.6 18.6 N/M 7.1 7.1 15.2 4.4 9.9 6.8 $20,534 2,433 18,101 657 4,804 15,086 129 1,722 7 5,576 5,572 385 2,586 2,986 5,482 $19,105 2,205 16,901 624 4,499 14,364 174 1,534 2 5,053 5,049 337 2,473 2,576 4,913 7.5 10.3 7.1 5.2 6.8 5.0 -25.7 12.2 252.5 10.3 10.4 14.2 4.6 15.9 11.6 N/M - Not Meaningful FDIC QUARTERLY 19 2017 • Volume 11 • Numb er 2 TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks First Quarter 2017 (dollar figures in millions) Geographic Regions* All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco 5,401 428,632 629 87,504 647 51,938 1,183 88,963 1,413 70,677 1,183 93,245 346 36,305 $2,215,310 1,179,782 394,869 451,673 102,461 50,029 203,832 60,630 2,110 48,363 38,194 665 1,530,135 18,839 1,511,297 432,396 4,780 14,719 252,119 $605,657 372,156 138,798 129,889 21,337 16,957 51,287 13,707 435 575 12,191 167 449,749 4,587 445,162 101,298 763 5,078 53,356 $246,212 136,715 43,588 59,587 15,581 7,507 18,831 6,415 125 1,227 3,045 113 166,121 1,993 164,128 46,189 1,158 1,278 33,459 $394,542 202,142 71,388 74,001 13,785 11,137 37,891 12,044 410 7,819 6,619 58 266,457 3,306 263,151 83,066 864 2,545 44,917 $338,874 159,487 49,742 53,064 13,666 4,868 33,571 10,009 540 26,950 5,640 70 235,585 3,213 232,372 66,855 731 1,863 37,053 $425,695 202,379 64,227 83,712 29,201 4,637 42,826 13,372 295 9,093 7,216 128 274,758 3,892 270,866 95,668 992 2,688 55,481 $204,330 106,903 27,127 51,420 8,890 4,922 19,425 5,083 305 2,700 3,483 129 137,465 1,847 135,618 39,321 272 1,267 27,852 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 2,215,310 1,823,130 1,822,679 451 84,575 1,352,875 129,363 767 16,303 245,746 245,621 605,657 479,175 478,769 406 27,461 344,174 51,624 662 5,922 68,275 68,202 246,212 205,653 205,653 0 7,656 153,090 11,781 6 1,664 27,108 27,095 394,542 327,176 327,159 18 14,595 260,497 20,719 46 2,669 43,932 43,914 338,874 281,324 281,324 0 12,891 221,096 18,248 22 1,840 37,440 37,439 425,695 359,539 359,539 0 12,596 257,277 17,472 15 2,628 46,041 46,020 204,330 170,263 170,235 28 9,376 116,741 9,519 15 1,581 22,952 22,951 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 8,071 15,286 7,836 186,599 2,064,416 102,163 292,722 262,935 21,418 69,503 2,122 5,041 2,343 57,320 567,336 43,776 76,390 48,912 6,577 25,505 914 1,603 1,026 20,007 227,480 9,474 30,730 9,887 84 7,355 1,350 2,522 1,858 31,781 366,947 15,518 53,548 69,306 7,939 11,366 1,431 1,915 1,024 21,728 316,501 13,187 48,632 79,841 1,916 12,862 1,818 3,365 1,021 36,219 394,578 13,704 53,391 44,689 713 8,005 435 840 564 19,544 191,573 6,504 30,031 10,300 4,189 4,411 $20,534 2,433 18,101 657 4,804 15,086 129 1,722 7 5,576 5,572 385 2,586 2,986 5,482 $5,385 802 4,583 183 932 3,656 93 531 -1 1,237 1,235 103 232 1,003 1,178 $2,320 258 2,062 59 542 1,814 6 200 0 538 537 40 250 286 533 $3,573 406 3,167 85 1,163 2,904 8 318 0 1,030 1,029 54 629 399 1,024 $3,197 384 2,813 113 705 2,288 8 187 0 939 939 61 688 251 933 $4,105 415 3,690 170 1,001 3,040 9 232 0 1,258 1,258 112 507 751 1,250 $1,954 168 1,786 47 460 1,384 5 253 8 575 575 15 280 295 564 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 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 * See Table V-A for explanations. ** See Notes to Users for explanation. 20 FDIC QUARTERLY QUARTERLY BANKING PROFILE Table IV-B. First Quarter 2017, FDIC-Insured Community Banks All Community Banks 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 1st Quarter 2017 4.02 0.48 3.54 0.87 2.75 0.12 1.00 1.33 1.01 9.17 0.10 170.62 65.55 79.03 4.39 56.21 4th Quarter 2016 4.06 0.47 3.59 0.95 2.89 0.21 0.88 1.19 0.88 7.88 0.22 140.01 66.49 77.82 8.72 57.70 First Quarter 2017, Geographic Regions* New York 3.84 0.57 3.26 0.62 2.44 0.12 0.79 1.18 0.82 7.33 0.09 177.67 65.97 83.10 6.20 63.59 Atlanta 4.13 0.46 3.67 0.89 2.98 0.10 0.88 1.21 0.88 8.00 0.10 147.71 69.28 79.19 5.56 63.68 Chicago 3.92 0.45 3.48 1.19 2.96 0.09 1.04 1.37 1.05 9.47 0.08 156.83 66.75 73.14 5.07 55.62 Kansas City 4.07 0.49 3.58 0.84 2.71 0.13 1.11 1.33 1.11 10.10 0.10 184.64 64.63 79.95 3.33 48.69 Dallas 4.21 0.43 3.79 0.95 2.89 0.16 1.19 1.42 1.20 11.08 0.16 151.36 64.57 78.66 3.21 54.18 San Francisco 4.12 0.35 3.76 0.91 2.73 0.09 1.11 1.63 1.13 10.12 0.04 322.12 61.35 79.51 4.91 68.50 Dallas 4.24 0.40 3.84 0.94 2.99 0.26 0.98 1.26 1.00 9.05 0.20 196.90 66.33 79.14 3.61 63.81 San Francisco 4.13 0.34 3.79 1.11 2.89 0.08 1.19 1.71 1.21 10.62 0.06 204.44 61.79 76.21 3.99 67.81 Table V-B. Full Year 2016, FDIC-Insured Community Banks All Community Banks 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 Full Year 2016 4.04 0.47 3.57 0.95 2.85 0.15 0.96 1.30 0.99 8.82 0.15 145.36 66.12 77.84 4.52 64.46 Full Year 2015 4.03 0.46 3.57 0.95 2.90 0.13 0.97 1.26 0.99 8.85 0.15 124.53 67.64 77.63 5.00 62.98 Full Year 2016, Geographic Regions* New York 3.85 0.57 3.28 0.67 2.51 0.16 0.75 1.11 0.77 6.87 0.17 122.31 66.04 82.02 6.01 69.15 Atlanta 4.16 0.46 3.70 0.92 3.08 0.12 0.85 1.17 0.88 7.83 0.14 120.68 70.71 78.67 7.73 66.67 Chicago 3.92 0.44 3.49 1.30 3.05 0.10 1.08 1.40 1.10 9.78 0.14 105.55 66.94 71.35 5.50 64.17 Kansas City 4.10 0.48 3.62 0.93 2.79 0.15 1.13 1.39 1.16 10.35 0.14 157.47 64.41 78.43 2.45 61.32 * See Table V-A for explanations. FDIC QUARTERLY 21 2017 • Volume 11 • Numb er 2 Table VI-B. Loan Performance, FDIC-Insured Community Banks Geographic Regions* March 31, 2017 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 0.54 0.48 0.36 0.17 0.39 0.85 0.52 1.39 1.88 1.37 0.73 0.53 0.47 0.33 0.33 0.13 0.47 0.75 0.42 1.84 1.97 1.83 0.29 0.47 0.61 0.40 0.36 0.11 0.40 1.09 0.60 1.39 1.13 1.39 0.37 0.55 0.60 0.52 0.43 0.30 0.38 0.89 0.38 0.80 1.08 0.79 0.51 0.51 0.58 0.58 0.36 0.31 0.30 0.66 0.61 0.96 3.43 0.82 1.05 0.61 0.69 0.58 0.43 0.31 0.44 1.13 0.69 1.97 1.10 1.99 0.72 0.66 0.30 0.46 0.19 0.03 0.20 0.49 0.50 0.87 1.15 0.85 0.69 0.32 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 0.94 0.99 0.83 0.24 0.62 1.25 1.46 0.73 1.12 0.72 0.88 1.00 1.06 0.94 0.94 0.13 0.78 1.60 1.55 0.59 1.24 0.57 1.63 1.12 1.01 1.58 0.80 0.58 0.49 1.17 0.84 0.76 0.52 0.76 0.48 0.96 1.01 0.88 0.96 0.47 0.62 1.24 0.93 0.39 0.82 0.37 0.53 0.95 0.78 0.94 0.82 0.28 0.30 0.67 1.02 0.48 1.75 0.41 0.85 0.81 0.93 0.83 0.83 0.50 0.59 1.16 2.68 1.52 0.84 1.54 0.85 1.22 0.57 0.89 0.39 0.11 0.56 0.90 0.89 0.33 0.77 0.30 0.70 0.61 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 0.03 -0.01 0.02 0.00 0.06 0.05 0.25 0.92 6.53 0.71 0.17 0.10 0.04 0.02 0.02 0.00 0.06 0.07 0.26 0.82 3.32 0.74 0.17 0.09 0.02 0.01 -0.01 0.01 0.09 0.03 0.29 0.94 1.32 0.93 0.29 0.10 0.05 -0.01 0.06 0.03 0.09 0.06 0.06 0.62 3.59 0.51 0.14 0.08 0.01 -0.08 0.01 -0.02 0.07 0.03 0.15 1.27 17.52 0.33 0.15 0.10 0.02 0.00 0.02 0.01 0.00 0.04 0.54 1.08 1.62 1.07 0.17 0.16 -0.02 -0.01 -0.03 -0.01 0.00 -0.01 0.15 0.71 2.48 0.59 0.23 0.04 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 $1,179.8 102.5 451.7 112.5 50.0 394.9 203.8 60.6 2.1 58.5 86.6 1,530.8 $372.2 21.3 129.9 63.0 17.0 138.8 51.3 13.7 0.4 13.3 12.8 449.9 $136.7 15.6 59.6 6.2 7.5 43.6 18.8 6.4 0.1 6.3 4.3 166.2 $202.1 13.8 74.0 15.7 11.1 71.4 37.9 12.0 0.4 11.6 14.4 266.5 $159.5 13.7 53.1 8.7 4.9 49.7 33.6 10.0 0.5 9.5 32.6 235.7 $202.4 29.2 83.7 7.8 4.6 64.2 42.8 13.4 0.3 13.1 16.3 274.9 $106.9 8.9 51.4 11.2 4.9 27.1 19.4 5.1 0.3 4.8 6.2 137.6 Memo: Unfunded Commitments (in millions) Total Unfunded Commitments Construction and development: 1-4 family residential Construction and development: CRE and other Commercial and industrial 292,722 23,810 59,316 93,788 76,390 4,804 18,371 24,113 30,730 4,262 7,072 8,628 53,548 2,622 9,108 18,719 48,632 2,839 6,818 15,295 53,391 6,681 13,131 16,933 30,031 2,602 4,815 10,100 * See Table V-A 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. 22 FDIC QUARTERLY QUARTERLY BANKING PROFILE Insurance Fund Indicators Deposit Insurance Fund Increases by $1.8 Billion Estimated Insured Deposits Grow by 2.3 Percent DIF Reserve Ratio Is Unchanged at 1.20 Percent Three Insured Institutions Fail The Deposit Insurance Fund (DIF) balance increased by $1.8 billion, to $84.9 billion, during the first quarter. Assessment income of $2.7 billion, which includes temporary assessment surcharges on large banks, drove the fund balance increase. Interest on investments of $227 million also added to the fund balance. A provision for insurance losses of $765 million and operating expenses of $442 million partially offset the rise in the fund balance. Three insured institutions failed in the first quarter, with combined assets of $554 million. The deposit insurance assessment base—average consolidated total assets minus average tangible equity—increased by 0.4 percent in the first quarter and by 4.2 percent over 12 months.1,2 Total estimated insured deposits increased by 2.3 percent in the first quarter of 2017 and by 6.2 percent year-over-year. The DIF’s reserve ratio (the fund balance as a percent of estimated insured deposits) was 1.20 percent on March 31, 2017, unchanged from year-end 2016 due in part to strong first quarter growth in estimated insured deposits. The reserve ratio increased by seven basis points from one year earlier. By law, the reserve ratio must reach a minimum of 1.35 percent by September 30, 2020. The law also requires that, in setting assessments, the FDIC offset the effect of the increase in the reserve ratio from 1.15 percent to 1.35 percent on banks with less than $10 billion in assets. To satisfy these requirements, large banks are subject to a temporary surcharge of 4.5 basis points of their assessment base, after making certain adjustments.3,4 Surcharges began in the third quarter of 2016 and will continue through the quarter in which the reserve ratio first meets or exceeds 1.35 percent. If, however, the reserve ratio has not reached 1.35 percent by the end of 2018, large banks will pay a shortfall assessment in early 2019 to close the gap. Small banks will receive credits to offset the portion of their assessments that help to raise the reserve ratio from 1.15 percent to 1.35 percent. When the reserve ratio is at or above 1.38 percent, the FDIC will automatically apply a small bank’s credits to reduce its regular assessment up to the entire amount of the assessment. Author: Kevin Brown Senior Financial Analyst Division of Insurance and Research (202) 898-6817 1 There are additional adjustments to the assessment base for banker’s banks and custodial banks. for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition to insured commercial banks and savings institutions. 3 Large banks are generally those with assets of $10 billion or more. 4 The assessment base for the surcharge is a large bank’s regular assessment base reduced by $10 billion (and subject to additional adjustment for affiliated banks). 2 Figures FDIC QUARTERLY 23 2017 • Volume 11 • Numb er 2 Table I-C. Insurance Fund Balances and Selected Indicators Deposit Insurance Fund* (dollar figures in millions) 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016 4th Quarter 2015 3rd Quarter 2015 2nd Quarter 2015 1st Quarter 2015 4th Quarter 2014 3rd Quarter 2014 2nd Quarter 2014 1st Quarter 2014 Beginning Fund Balance $83,162 $80,704 $77,910 $75,120 $72,600 $70,115 $67,589 $65,296 $62,780 $54,320 $51,059 $48,893 $47,191 2,737 2,688 2,643 2,328 2,328 2,160 2,170 2,328 2,189 2,030 2,009 2,224 2,393 227 189 171 164 147 128 122 113 60 70 80 87 45 0 442 0 437 0 422 0 441 0 415 0 447 0 410 0 434 0 396 0 408 0 406 0 428 0 422 765 -332 -566 -627 -43 -930 -578 -317 -426 -6,787 -1,663 -204 348 2 3 3 2 5 12 2 3 6 -43 6 6 9 7 1,766 -317 2,458 -167 2,794 110 2,790 412 2,520 -298 2,485 64 2,526 -34 2,293 231 2,516 24 8,460 -91 3,261 73 2,166 25 1,702 84,928 83,162 80,704 77,910 75,120 72,600 70,115 67,589 65,296 62,780 54,320 51,059 48,893 13.06 14.55 15.10 15.27 15.05 15.64 29.08 32.37 33.55 33.03 33.27 34.82 36.79 1.20 1.20 1.18 1.17 1.13 1.11 1.09 1.07 1.03 1.01 0.89 0.84 0.80 7,078,271 6,915,975 6,819,441 6,677,268 6,665,204 6,523,457 6,409,819 6,336,949 6,336,642 6,197,131 6,127,968 6,098,178 6,109,175 6.20 6.02 6.39 5.37 5.19 5.27 4.60 3.92 3.72 3.32 2.82 Changes in Fund Balance: Assessments earned Interest earned on investment securities Realized gain on sale of investments Operating expenses Provision for insurance losses All other income, net of expenses Unrealized gain/(loss) on available-for-sale securities Total fund balance change Ending Fund Balance Percent change from four quarters earlier Reserve Ratio (%) Estimated Insured Deposits Percent change from four quarters earlier 2.56 1.91 Domestic Deposits Percent change from four quarters earlier 11,856,680 11,691,723 11,505,080 11,240,160 11,154,724 10,950,122 10,695,506 10,629,335 10,616,458 10,408,187 10,213,199 10,099,415 9,962,543 Assessment Base** Percent change from four quarters earlier 14,619,827 14,560,423 14,380,957 14,230,008 14,028,390 13,860,386 13,688,382 13,621,148 13,546,526 13,360,634 13,127,930 12,916,389 12,810,148 6.29 Number of Institutions Reporting 6.77 7.57 5.75 5.07 5.21 4.72 3/14 6/14 5.93 6.04 7.16 5.37 5.05 5.06 4.47 3.56 3.74 4.27 5.46 5.75 4.72 4.73 3.31 2.97 5,865 5,922 5,989 6,067 6,131 6,191 6,279 6,357 6,428 6,518 6,598 6,665 6,739 Deposit Insurance Fund Balance and Insured Deposits ($ Millions) Percent of Insured Deposits 0.84 6.56 4.22 DIF Reserve Ratios 0.80 5.25 1.01 1.03 9/14 12/14 3/15 1.07 1.09 1.11 1.13 1.17 1.18 1.20 1.20 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 0.89 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 DIF Balance DIF-Insured Deposits $48,893 51,059 54,320 62,780 65,296 67,589 70,115 72,600 75,120 77,910 80,704 83,162 84,928 $6,109,175 6,098,178 6,127,968 6,197,131 6,336,642 6,336,949 6,409,819 6,523,457 6,665,204 6,677,268 6,819,441 6,915,975 7,078,271 Table II-C. Problem Institutions and Failed Institutions (dollar figures in millions) 2017*** 2016*** Problem Institutions Number of institutions Total assets 2016 2015 112 $23,675 165 $30,870 123 $27,624 183 $46,780 291 $86,712 467 $152,687 651 $232,701 813 $319,432 Failed Institutions Number of institutions Total assets**** 3 $554 1 $67 5 $277 8 $6,706 18 $2,914 24 $6,044 51 $11,617 92 $34,923 * Quarterly financial statement results are unaudited. ** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks. *** Through March 31. **** Total assets are based on final Call Reports submitted by failed institutions. 24 FDIC QUARTERLY 2014 2013 2012 2011 QUARTERLY BANKING PROFILE Table III-C. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) March 31, 2017 Commercial Banks and Savings Institutions FDIC-Insured Commercial Banks FDIC-Supervised OCC-Supervised Federal Reserve-Supervised FDIC-Insured Savings Institutions OCC-Supervised FDIC-Supervised Federal Reserve-Supervised Total Commercial Banks and Savings Institutions Other FDIC-Insured Institutions U.S. Branches of Foreign Banks Total FDIC-Insured Institutions Number of Institutions Total Assets Domestic Deposits* Est. Insured Deposits 5,060 3,356 914 790 $15,789,511 2,439,641 10,794,285 2,555,585 $10,880,126 1,943,665 7,152,111 1,784,351 $6,292,940 1,352,660 3,963,604 976,676 796 370 388 38 1,176,272 763,645 386,527 26,100 932,624 619,248 292,701 20,675 748,104 501,950 229,752 16,403 5,856 16,965,782 11,812,750 7,041,045 9 93,347 43,930 37,227 5,865 17,059,130 11,856,680 7,078,271 * Excludes $1.3 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, 2016 (dollar figures in billions) Annual Rate in Basis Points* Number of Institutions Percent of Total Institutions Amount of Assessment Base** Percent of Total Assessment Base 1.50 - 3.00 3,411 57.60 $2,426.0 16.66 3.01 - 6.00 1,657 27.98 11,143.3 76.53 6.01 - 10.00 631 10.66 749.6 5.15 10.01 - 15.00 84 1.42 133.6 0.92 15.01 - 20.00 112 1.89 95.3 0.65 20.01 - 25.00 14 0.24 5.5 0.04 >25.00 13 0.22 7.2 0.05 * Assessment rates do not incorporate temporary surcharges on large banks. ** 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 25 2017 • Volume 11 • Numb er 2 Notes to Users 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 VIII-A of the FDIC Quarterly Banking Profile is aggregated for all FDIC-insured Call report filers, both commercial banks and savings 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. 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 non-brokered 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. 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 adjusted upward quarterly. For banking offices, banks must have more than 26 FDIC QUARTERLY one office, and the maximum number of offices is 40 in 1985 and reached 87 in 2016. The maximum level of deposits for any one office is $1.25 billion in deposits in 1985 and reached $6.97 billion in deposits in 2016. 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 quarterly and below which the limits on banking activities and geographic scope are waived. The asset-size limit is $250 million in 1985 and reached $1.39 billion in 2016. 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. Summary of FDIC Research Definition of Community Banking Organizations Community banks are designated at the level of the banking organization. (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 • Number of large MSAs with offices ≤ 2 • Number of states with offices ≤ 3 • No single office with deposits > indexed maximum branch deposit size.4 1 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 $1.39 billion in 2016. 3 Maximum number of offices indexed to equal 40 in 1985 and 87 in 2016. 4 Maximum branch deposit size indexed to equal $1.25 billion in 1985 and $6.97 billion in 2016. QUARTERLY BANKING PROFILE 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. 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 doublecounting. No adjustments are made for any double-counting of subsidiary data. Additionally, c ertain 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 condition and performance ratios represent weighted averages, i.e., the sum of the individual numerator values divided by the sum of individual denominator values. All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-of-period amount plus end-of-period amount plus any interim periods, divided by the total number of periods). For “pooling-of-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. When community bank growth rates are adjusted for mergers, prior period balances used in the calculations represent totals for the current group of community bank reporters, plus prior period amounts for any institutions that were subsequently merged into current community banks. 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, savings institutions can convert to commercial banks, or commercial banks may convert to savings institutions. ACCOUNTING CHANGES Accounting for Measurement-Period Adjustments Related to a Business Combination In September 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments.” Under Accounting Standards Codification Topic 805, Business Combinations (formerly FASB Statement No. 141(R), “Business Combinations”), if the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the acquirer reports provisional amounts in its financial statements for the items for which the accounting is incomplete. During the measurement period, the acquirer is required to adjust the provisional amounts recognized at the acquisition date, with a corresponding adjustment to goodwill, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. At present under Topic 805, an acquirer is required to retrospectively adjust the provisional amounts recognized at the acquisition date to reflect the new information. To simplify the accounting for the adjustments made to provisional amounts, ASU 2015-16 eliminates the requirement to retrospectively account for the adjustments. Accordingly, the ASU amends Topic 805 to require an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which adjustment amounts are determined. Under the ASU, the acquirer also must recognize in the financial statements for the same reporting period the effect on earnings, if any, resulting from the adjustments to the provisional amounts as if the accounting for the business combination had been completed as of the acquisition date. In general, the measurement period in a business combination is the period after the acquisition date during which the acquirer may adjust provisional amounts reported for identifiable assets acquired, liabilities assumed, and consideration transferred for the acquiree for which the initial accounting for the business combination is incomplete at the end of the reporting period in which the combination occurs. Topic 805 provides additional guidance on the measurement period, which shall not exceed one year from the acquisition date, and adjustments to provisional amounts during this period. For institutions that are public business entities, as defined under U.S. GAAP, ASU 2015-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. For institutions that are not public business entities (i.e., that are p rivate companies), the ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The ASU’s amendments to Topic 805 should be applied prospectively to adjustments to provisional amounts that occur after the effective date of the ASU. Thus, institutions with a calendar year fiscal year that are public business entities must apply the ASU to any adjustments to provisional amounts that occur after January 1, 2016, beginning with their Call Reports for March 31, 2016. Institutions with a calendar year fiscal year that are private companies must apply the ASU to any adjustments to provisional amounts that occur after January 1, 2017, beginning with their Call Reports for December 31, 2017. Early application of ASU 201516 is permitted in Call Reports that have not been submitted. FDIC QUARTERLY 27 2017 • Volume 11 • Numb er 2 For additional information, institutions should refer to ASU 2015-16, which is available at http://www.fasb.org/jsp/FASB/Page/ SectionPage&cid=1176156316498. Debt Issuance Costs In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This ASU requires debt issuance costs associated with a recognized debt liability to be presented as a direct deduction from the face amount of the related debt liability, similar to debt discounts. The ASU is limited to the presentation of debt issuance costs; therefore, the recognition and measurement guidance for such costs is unaffected. At present, Accounting Standards Codification (ASC) Subtopic 835-30, Interest—Imputation of Interest, requires debt issuance costs to be reported on the balance sheet as an asset (i.e., a deferred charge). For Call Report purposes, the costs of issuing debt currently are reported, net of accumulated amortization, in “Other assets.” For institutions that are public business entities, as defined under U.S. GAAP, ASU 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. 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, 2016. For institutions that are not public business entities (i.e., that are private companies), the ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Thus, institutions with a calendar year fiscal year that are private companies must apply the ASU in their December 31, 2016, and subsequent quarterly Call Reports. Early adoption of the guidance in ASU 2015-03 is permitted. Extraordinary Items In January 2015, the FASB issued ASU No. 2015-01, “Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” This ASU eliminates from U.S. GAAP the concept of extraordinary items. At present, ASC Subtopic 225-20, Income Statement—Extraordinary and Unusual Items (formerly Accounting Principles Board Opinion No. 30, “Reporting the Results of Operations”), requires an entity to separately classify, present, and disclose extraordinary events and transactions. An event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction currently meets the criteria for extraordinary classification, an institution must segregate the extraordinary item from the results of its ordinary operations and report the extraordinary item in its income statement as “Extraordinary items and other adjustments, net of income taxes.” ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Thus, for example, institutions with a calendar year fiscal year must begin to apply the ASU in their Call Reports for March 31, 2016. Early adoption of ASU 2015-01 is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. For Call Report purposes, an institution with a calendar year fiscal year must apply the ASU prospectively, that is, in general, to events or transactions occurring after the date of adoption. However, an institution with a fiscal year other than a calendar year may elect to apply ASU 2015-01 prospectively or, alternatively, it may elect to apply the ASU retrospectively to all prior calendar quarters included in the institution’s year-to-date Call Report income statement that includes the beginning of the fiscal year of adoption. 28 FDIC QUARTERLY After an institution adopts ASU 2015-01, any event or transaction that would have met the criteria for extraordinary classification before the adoption of the ASU should be reported in “Other noninterest income,” or “Other noninterest expense,” as appropriate, unless the event or transaction would otherwise be reportable in the income statement. [As a result of the recent accounting change, year-to-date Third Quarter 2016 “Extraordinary gains, net” on the QBP includes only Discontinued operations expense. Accordingly, comparisons to periods prior to September 2016 are not meaningful, since prior periods included all Extraordinary gains and Discontinued operations expense.] For additional information, institutions should refer to ASU 2015-01, which is available at http://www.fasb.org/jsp/FASB/ Page/SectionPage&cid=1176156316498. 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 Supplemental 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 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. QUARTERLY BANKING PROFILE 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 a ccounting 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 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 a later 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. Accounting by Private Companies for Goodwill 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 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 was elected. This would require the private institution to report in its December 31, 2015, Call Report one year’s amortization of goodwill existing as of January 1, 2015, and the amortization of any new goodwill recognized in 2015. For additional information on the private company accounting alternative for goodwill, institutions should refer to ASU 201402, 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 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 b usiness 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 GovernmentGuaranteed 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), FDIC QUARTERLY 29 2017 • Volume 11 • Numb er 2 because U.S. GAAP previously did not provide specific guidance on how to categorize or measure foreclosed mortgage loans that are government guaranteed. The ASU clarifies the conditions under which a creditor must derecognize a government-guaranteed mortgage loan and recognize a separate “other receivable” upon foreclosure (that is, when a creditor receives physical possession of real estate property collateralizing a mortgage loan in accordance with the guidance in ASC Subtopic 310-40). Under the ASU, institutions should derecognize a mortgage loan and record a separate other receivable upon foreclosure of the real estate collateral if the following conditions are met: • The loan has a government guarantee that is not separable from the loan before foreclosure. • At the time of foreclosure, the institution has the intent to convey the property to the guarantor and make a claim on the guarantee and it has the ability to recover under that claim. • At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed (that is, the real estate property has been appraised for purposes of the claim and thus the institution is not exposed to changes in the fair value of the property). This guidance is applicable to fully and partially government- guaranteed mortgage loans provided the three conditions identified above have been met. In such situations, 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. For institutions that are public business entities, as defined under U.S. GAAP (as discussed in an earlier section of these Supplemental Instructions), 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 2014-14 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.” 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 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). 30 FDIC QUARTERLY 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 fore closure 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 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. QUARTERLY BANKING PROFILE 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. Assessment base – effective April 1, 2011, the deposit insurance assessment base 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 deposits in banks’ domestic offices with certain adjustments. Assessment rate schedule – Initial base assessment rates for small institutions are based on a combination of financial ratios and CAMELS component ratings. Initial rates for large institutions— generally those with at least $10 billion in assets—are also based on CAMELS component ratings and certain 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). The FDIC may take additional information into account to make a limited adjustment to a large institution’s scorecard results, which are used to determine a large institution’s initial base assessment rate. While risk categories for small institutions (except new institutions) were eliminated effective July 1, 2016, initial rates for small institutions are subject to minimums and maximums based on an institution’s CAMELS composite rating. (Risk categories for large institutions were eliminated in 2011.) The current assessment rate schedule became effective July 1, 2016. Under the current schedule, initial base assessment rates range from 3 to 30 basis points. An institution’s total base assessment rate may differ from its initial rate due to three possible adjustments: (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 3 basis points would have a maximum unsecured debt adjustment of 1.5 basis points and could not have a total base assessment rate lower than 1.5 basis points. (2) Depository Institution Debt Adjustment: For institutions that hold long-term 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 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. The assessment rate schedule effective July 1, 2016, is shown in the following table: Total Base Assessment Rates* Established Small Banks 1 or 2 3 4 or 5 Large and Highly Complex Institutions** Initial Base Assessment Rate 3 to 16 6 to 30 16 to 30 3 to 30 Unsecured Debt Adjustment -5 to 0 -5 to 0 -5 to 0 -5 to 0 Brokered Deposit Adjustment N/A N/A N/A 0 to 10 Total Base Assessment Rate 1.5 to 16 3 to 30 11 to 30 1.5 to 40 CAMELS Composite * 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. ** Effective July 1, 2016, large institutions are also subject to temporary assessment surcharges in order to raise the reserve ratio from 1.15 percent to 1.35 percent. The surcharges amount to 4.5 basis points of a large institution’s assessment base (after making certain adjustments). 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. Assets securitized and sold – total outstanding principal balance of assets securitized and sold with servicing retained or other sellerprovided 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 non cumulative 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. FDIC QUARTERLY 31 2017 • Volume 11 • Numb er 2 Credit enhancements – techniques whereby a company attempts to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be associated with a given issuance. Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings Association (SAIF) Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform Act to form the DIF. Derivatives notional amount – the notional, or contractual, amounts of derivatives represent the level of involvement in the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent the amounts used to calculate contractual cash flows to be exchanged. Derivatives credit equivalent amount – the fair value of the derivative plus an additional amount for potential future c redit 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 32 FDIC QUARTERLY 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 noninterest-bearing transaction accounts as a new temporary deposit insurance account category. All funds held in noninterest-bearing transaction accounts were fully insured, without limit, from December 31, 2010, through December 31, 2012. 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 s ervicing 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 sellerprovided 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 enter prises. Also, see “Securities,” below. Net charge-offs – total loans and leases charged off (removed from balance sheet because of uncollectability), 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. QUARTERLY BANKING PROFILE 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. 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 v aluation 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 average total (consolidated) assets. The basic yardstick of bank profitability. Return on equity – bank net income (including gains or losses on securities and extraordinary items) as a percentage of average total equity capital. Risk-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-balance-sheet 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-to- maturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers also include gains (losses) on the sales of assets held for sale. (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 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. FDIC QUARTERLY 33 2017 • Volume 11 • Numb er 2 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. 34 FDIC QUARTERLY
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