The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Quarterly Quarterly Banking Profile: First Quarter 2018 Highlights: ■ Net Income Increases 27.5 Percent From a Year Earlier Due to Higher Net Operating Revenue and a Lower Effective Tax Rate ■ Loan Balances Rise 4.9 Percent Over 12 Months ■ Community Bank Net Income Rises 17.7 Percent Annually on Higher Net Interest Income and Lower Income Tax Expenses ■ Estimated Insured Deposits Grow by 2.6 Percent ■ DIF Reserve Ratio Is Unchanged at 1.30 Percent 2018 Volume 12, 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 Jelena McWilliams Director, Division of Insurance and Research Diane Ellis Executive Editor Richard A. Brown Managing Editors Alan Deaton Matthew Green Patrick Mitchell Shayna M. Olesiuk Jonathan Pogach Philip A. Shively Kathy Zeidler Editors Clayton Boyce Kathy Zeidler Publication Manager Lynne Montgomery Media Inquiries (202) 898-6993 FDIC QUARTERLY 2018 FDIC QUARTERLY Vo l u m e 1 2 • N u m b e r 2 Quarterly Banking Profile: First Quarter 2018 FDIC-insured institutions reported aggregate net income of $56 billion in first quarter 2018, up $12.1 billion (27.5 percent) from a year earlier. The improvement in earnings was attributable to higher net operating revenue and a lower effective tax rate. Of the 5,606 insured institutions reporting first quarter financial results, more than 70 percent reported year-over-year growth in quarterly earnings. See page 1. Community Bank Performance Community banks—which represent 92 percent of insured institutions—reported net income of $6.1 billion in the first quarter, up $913.1 million (17.7 percent) from a year earlier. Higher net operating revenue and a lower effective tax rate boosted first quarter net income. See page 15. Insurance Fund Indicators The Deposit Insurance Fund (DIF) balance increased by $2.3 billion during the quarter to $95.1 billion on March 31, driven by assessment income. The DIF’s reserve ratio (the fund balance as a percent of estimated insured deposits) was 1.30 percent on March 31, 2018, unchanged from year-end 2017 due primarily to strong first quarter growth in estimated insured deposits. 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 2018 INSURED INSTITUTION PERFORMANCE Net Income Increases 27.5 Percent From a Year Earlier Due to Higher Net Operating Revenue and a Lower Effective Tax Rate Net Interest Income Rises 8.5 Percent From the Year Before Noninterest Income Increases 7.9 Percent From a Year Earlier Loan Balances Rise 4.9 Percent Over 12 Months Net Income Increases 27.5 Percent From a Year Earlier Due to Higher Net Operating Revenue and a Lower Effective Tax Rate Aggregate net income for the 5,606 FDIC-insured commercial banks and savings institutions reporting first quarter performance totaled $56 billion in first quarter 2018, an increase of $12.1 billion (27.5 percent) from a year earlier.1 Improvement in net income was attributable to higher net operating revenue (the sum of net interest income and noninterest income) and a lower effective tax rate, but was offset in part by higher loan-loss provisions and noninterest expense. Using the effective tax rate before the new tax law, estimated net income would have been $49.4 billion, an increase of $5.5 billion (12.6 percent) from first quarter 2017.2 The average return on assets rose by 24 basis points from first quarter 2017 to 1.28 percent. Less than 4 percent of institutions were unprofitable during the quarter, the lowest level since first quarter 1996. Net Interest Income Rises 8.5 Percent From the Year Before Net interest income rose by $10.3 billion (8.5 percent), as more than four out of five banks (85.9 percent) reported an increase from 12 months ago. For the past seven consecutive quarters, the annual growth rate for net interest income has exceeded 7.4 percent. The net interest margin (NIM) increased from 3.19 percent in first quarter 2017 to 3.32 percent, due to growth in interest income as interest-bearing assets rose by 3.6 percent. The improvement in NIM was widespread, as more than two out of three banks (69.4 percent) reported increases from a year earlier. 1 One insured institution had not filed a March 31 Call Report at the time this report was prepared. estimate of net income applies the average effective quarterly tax rate between fourth quarter 2011 and third quarter 2017 to income before taxes and discontinued operations. 2 This Chart 1 Chart 2 Quarterly Net Income Quarterly Net Operating Revenue All FDIC-Insured Institutions All FDIC-Insured Institutions Securities and Other Gains/Losses, Net Net Operating Income $ Billions 60 56.0 50 40 30 35.2 28.7 28.5 34.8 34.5 37.5 40.3 34.4 38.2 36.1 39.8 37.3 40.1 38.5 36.5 39.8 43.0 40.4 40.6 39.0 43.6 45.6 43.2 43.9 48.1 47.9 200 180 160 140 120 100 25.3 25.3 80 20 60 10 0 Quarterly Noninterest Income Quarterly Net Interest Income $ Billions 40 20 1 2 3 2011 Source: FDIC. 4 1 2 3 2012 4 1 2 3 2013 4 1 2 3 2014 4 1 2 3 2015 4 1 2 3 2016 4 1 2 3 4 1 2017 2018 0 2008 2009 Source: FDIC. 2010 2011 2012 2013 2014 2015 2016 2017 2018 FDIC QUARTERLY 1 2018 • Volume 12 • Numb er 2 Noninterest Income Increases 7.9 Percent From a Year Earlier Over the past 12 months, noninterest income grew by $4.9 billion (7.9 percent) to $67.4 billion. This increase is the highest 12-month growth rate since third quarter 2014. The annual increase in noninterest income was led by higher trading revenue (up $1.1 billion, or 14.9 percent) and other noninterest income (up $2.4 billion, or 8.8 percent).3 More than half (55.1 percent) of all banks reported increases in noninterest income compared with first quarter 2017. Noninterest Expense Increases 5.8 Percent From a Year Earlier Noninterest expenses were $6.3 billion (5.8 percent) higher than first quarter 2017, as almost three out of four banks (74 percent) reported increases. Other noninterest expense rose by $3.7 billion (8.6 percent), and salary and employee benefits grew by $2.3 billion (4.3 percent). Average assets per employee increased from $8.2 million in first quarter 2017 to $8.4 million. Provisions Increase Modestly From First Quarter 2017 In the first quarter, banks allocated $12.4 billion in loan-loss provisions, an increase of $356.6 million (3 percent) from a year earlier. Almost 37 percent of institutions reported higher loan-loss provisions than in first quarter 2017. The increase is due to higher net charge-offs, and a growing loan portfolio. Loan-loss provisions as a percent of net operating revenue totaled 6.2 percent for the first quarter, down from 6.6 percent a year ago. Net Charge-Off Rate Remains Stable Banks charged off $12.1 billion in uncollectable loans during the quarter, an increase of $540.6 million (4.7 percent) from a year earlier. The annual increase in net charge-offs was led by credit card balances (up $1.1 billion, or 16.3 percent). However, less than half (42.9 percent) of all banks reported a year-over-year increase, and net charge-offs were lower for most major loan categories. The average net-charge off rate remained stable (0.50 percent) from a year earlier. Noncurrent Loan Rate Declines Modestly Noncurrent loan balances (90 days or more past due or in nonaccrual status) were $3.9 billion (3.4 percent) lower compared with the previous quarter. Slightly more than half (50.8 percent) of all banks reported declines in their noncurrent loan balances during the quarter. The decline in noncurrent loan balances was led by residential mortgages (down $2.8 billion, or 4.9 percent), commercial and industrial loans (down $617.2 million, or 3.4 percent), and credit cards (down $436.4 million, or 3.7 percent). The average noncurrent rate declined by 5 basis points from the previous quarter to 1.15 percent. 3 Other noninterest income includes information technology costs, legal fees, consulting services, and audit fees. Chart 3 Chart 4 Noncurrent Loan Rate and Quarterly Net Charge-Off Rate All FDIC-Insured Institutions Reserve Coverage Ratio All FDIC-Insured Institutions Percent 6 Noncurrent Loan Rate $ Billions Loan-Loss Reserves ($) Coverage Ratio (%) Noncurrent Loans ($) Coverage Adjusted for GNMA Guaranteed Loans (%) Noncurrents Adjusted for GNMA Guaranteed Loans ($) Coverage Ratio (Percent) 180 5 450 400 160 4 350 140 300 120 250 100 200 80 150 60 100 40 50 20 3 2 1 Quarterly Net Charge-Off Rate 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: FDIC. 2 FDIC QUARTERLY 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: FDIC. Note: Loan-loss reserves to noncurrent loans & leases. QUARTERLY BANKING PROFILE Coverage Ratio Rises to 110 Percent Banks reduced their loan-loss reserves by $15 million from the previous quarter, with less than one-third (23.8 percent) of all banks reporting a quarterly decline. Banks with assets greater than $1 billion, which itemize their reserves, reported the largest quarterly increase in reserves for credit card losses (up $850.2 million, or 2.3 percent).4 Reserves declined for residential real estate losses (down $654.3 million, or 4.5 percent) and commercial loan losses (down $368.5 million, or 1.1 percent). With noncurrent loan balances declining at a faster quarterly rate than loan-loss reserves, the coverage ratio (loan-loss reserves to noncurrent loan balances) increased from 106.3 percent in fourth quarter 2017 to 110 percent. This marks the fourth consecutive quarter that the coverage ratio was above 100 percent. Equity Capital Rises Modestly Bank equity capital rose by $11.2 billion (0.6 percent) from the previous quarter. Retained earnings contributed $25.3 billion to equity growth, but were offset in part by the decline in the market value of available-for-sale securities, which reduced accumulated other comprehensive income by $25.8 billion. Declared dividends in the first quarter totaled $30.7 billion, an increase of $3.3 billion (12.2 percent) from the year-earlier quarter. At the end of the quarter, 99.5 percent of all insured institutions, which account for 99.98 percent of total industry assets, met or exceeded the requirements for the highest regulatory capital category as defined for Prompt Corrective Action purposes. Banks Increase Their Federal Reserve Bank Balances Total assets increased by $116.1 billion (0.7 percent) from the previous quarter. Balances at Federal Reserve banks increased by $41.9 billion (3.6 percent). The securities portfolio declined by $32.9 billion (0.9 percent) from the previous quarter, as available-for-sale accounts fell by $11 billion (0.4 percent) and held-to-maturity accounts were reduced by $26.7 billion (2.6 percent). This marks the first time since third quarter 2010 that securities held-to-maturity declined. 4 Banks with assets greater than $1 billion represent almost 91 percent of total industry loan-loss reserves. Chart 5 Chart 6 Unrealized Gains (Losses) on Investment Securities Quarterly Change in Loan Balances All FDIC-Insured Institutions All FDIC-Insured Institutions Held-to-Maturity Securities Available-for-Sale Securities $ Billions 80 Quarterly Change in Loans ($ Billions) 300 12 10 200 185 197 182 8 178 164 161 149 6 134 117 112 102 100 99 95 99 91 4 74 72 67 70 65 61 53 43 38 51 31 2 24 28 0 0 -7 -14 -6 -8 -37 -2 -100 -63 -4 -107 -116 -109 -126 -140 -133 -6 -200 -8 -210 -300 -10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 237 189 203 60 40 20 0 -20 -40 -60 2013 Source: FDIC. 2014 2015 2016 2017 12-Month Growth Rate (Percent) -55.1 2018 221 Source: FDIC. Note: FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitized loan balances back onto banks’ balance sheets in the first quarter of 2010. Although the total amount consolidated cannot be precisely quantified, the industry would have reported a decline in loan balances for the quarter absent this change in accounting standards. FDIC QUARTERLY 3 2018 • Volume 12 • Numb er 2 Loan Balances Rise 4.9 Percent Over 12 Months Total loan and lease balances rose by $31.3 billion (0.3 percent) from fourth quarter 2017. Commercial and industrial loans increased by $38.6 billion (1.9 percent), nonfarm nonresidential loans grew by $11.5 billion (0.8 percent), and residential mortgage loans rose by $8.8 billion (0.4 percent). Credit card balances posted a seasonal decline of $44.6 billion (5.2 percent). Over the past 12 months, total loan and lease balances rose by $455.2 billion (4.9 percent), exceeding last quarter’s annual growth rate of 4.5 percent. Commercial and industrial loans increased by $91.8 billion (4.7 percent), residential mortgage loans grew by $87.8 billion (4.4 percent), credit card balances rose by $64.3 billion (8.5 percent), and nonfarm nonresidential loans increased by $56.1 billion (4.2 percent). Home equity lines of credit declined by $31.6 billion (7.3 percent) over the past 12 months. Unused loan commitments increased by 5.5 percent from a year earlier, the highest annual growth rate since first quarter 2016. Deposits Increase From the Previous Quarter Total deposits grew by $129.7 billion (1 percent) in the first quarter. Domestic interest- bearing deposits increased by $176.1 billion (2 percent), while noninterest-bearing deposits fell by $655.9 million (0.02 percent). Nondeposit liabilities declined by $24.1 billion (1.2 percent), led by other liabilities (down $30.7 billion, or 1.9 percent) and borrowings from Federal Home Loan Banks (down $28.6 billion, or 4.9 percent). Domestic deposits in accounts less than $250,000 rose by $169.7 billion (2.9 percent) from fourth quarter 2017. Three New Charters Added in First Quarter 2018 There were 5,607 FDIC-insured commercial banks and savings institutions at the end of first quarter 2018, a decline from 5,670 the year before. The number of institutions on the FDIC’s “Problem Bank List” fell from 95 to 92. During the quarter, 65 institutions were absorbed by merger transactions, three new charters were added, and there were no failures. Author: Benjamin Tikvina Senior Financial Analyst Division of Insurance and Research (202) 898-6578 Chart 7 Number and Assets of Banks on the ‘Problem Bank List’ Number 1,000 900 Assets ($ Billions) Number of Problem Banks Problem Bank Assets 500 450 800 400 700 350 600 300 500 250 400 200 300 150 200 100 100 50 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: FDIC. 4 FDIC QUARTERLY 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 2018** 2017** 2017 2016 2015 2014 2013 1.28 11.44 9.66 0.69 0.50 3.34 3.32 28.14 5,606 4,880 726 3.89 92 $56 0 1.04 9.36 9.57 0.81 0.50 4.13 3.19 13.52 5,856 5,062 794 4.32 112 $24 3 0.97 8.61 9.63 0.72 0.50 3.79 3.25 -3.24 5,670 4,918 752 5.57 95 $14 8 1.04 9.29 9.48 0.86 0.47 5.09 3.13 4.57 5,913 5,112 801 4.46 123 $28 5 1.04 9.29 9.59 0.97 0.44 2.66 3.07 7.11 6,182 5,338 844 4.80 183 $47 8 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 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 * 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 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. 1st Quarter 2018 4th Quarter 2017 1st Quarter 2017 %Change 17Q1-18Q1 5,606 2,076,862 5,670 2,076,128 5,856 2,081,563 -4.3 -0.2 $17,531,466 4,795,158 2,072,605 1,402,606 344,189 398,436 2,051,912 1,634,565 820,415 75,618 1,197,395 2,283 9,752,364 123,737 9,628,627 3,598,927 8,129 388,719 3,907,063 $17,415,377 4,773,641 2,063,782 1,391,145 338,318 411,152 2,013,292 1,677,991 865,053 80,853 1,177,586 2,290 9,721,072 123,752 9,597,320 3,631,821 8,453 383,383 3,794,399 $16,965,542 4,626,271 1,984,814 1,346,536 319,233 429,988 1,960,091 1,545,190 756,134 75,254 1,092,355 2,034 9,297,126 121,781 9,175,345 3,583,868 10,368 370,338 3,825,622 3.3 3.7 4.4 4.2 7.8 -7.3 4.7 5.8 8.5 0.5 9.6 12.2 4.9 1.6 4.9 0.4 -21.6 5.0 2.1 17,531,466 13,528,840 12,256,800 1,272,040 1,471,149 69,853 493,046 1,968,579 1,964,980 17,415,377 13,399,154 12,081,403 1,317,751 1,496,086 68,929 493,135 1,958,072 1,953,733 16,965,542 13,083,807 11,812,761 1,271,046 1,416,069 79,764 489,298 1,896,602 1,891,375 3.3 3.4 3.8 0.1 3.9 -12.4 0.8 3.8 3.9 63,139 112,489 58,443 2,113,372 15,883,545 553,953 7,721,846 20,360,228 656,289 205,986,323 Full Year 2017 Full Year 2016 $572,280 73,254 499,026 51,125 255,253 442,525 2,129 97,961 -87 164,710 164,374 46,801 121,367 43,007 163,286 $515,793 54,391 461,402 48,108 253,641 423,299 3,786 76,015 -323 171,086 170,745 42,432 102,761 67,984 168,748 67,582 116,425 60,185 2,133,348 15,760,901 582,545 7,516,027 20,333,867 677,871 173,483,932 1st Quarter %Change 2018 11.0 34.7 8.2 6.3 0.6 4.5 -43.8 28.9 N/M -3.7 -3.7 10.3 18.1 -36.7 -3.2 $154,939 23,592 131,347 12,397 67,420 115,593 242 14,940 -8 56,070 55,977 12,060 30,650 25,327 55,882 61,369 124,958 64,022 2,034,512 15,325,848 522,554 7,319,365 18,210,185 731,228 180,496,035 1st Quarter 2017 2.9 -10.0 -8.7 3.9 3.6 6.0 5.5 11.8 -10.2 14.1 %Change 17Q1-18Q1 $136,610 15,529 121,081 12,041 62,500 109,303 549 18,801 -3 43,983 43,892 11,520 27,318 16,574 43,608 13.4 51.9 8.5 3.0 7.9 5.8 -56.0 -20.5 N/M 27.5 27.5 4.7 12.2 52.8 28.1 N/M - Not Meaningful FDIC QUARTERLY 5 2018 • Volume 12 • Numb er 2 TABLE III-A. First Quarter 2018, 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 5,606 4,880 726 $17,531.5 16,327.8 1,203.7 13,528.8 12,570.9 957.9 55,977 51,903 4,074 Credit Card Banks 11 10 1 $542.0 462.4 79.6 297.7 239.7 58.0 3,641 3,149 492 International Banks 5 5 0 $4,278.6 4,278.6 0.0 3,106.5 3,106.5 0.0 12,805 12,805 0 Agricultural Banks 1,355 1,341 14 $270.6 265.4 5.2 225.3 222.4 2.8 885 853 33 Commercial Lenders 2,934 2,633 301 $6,143.4 5,633.4 510.1 4,845.7 4,455.9 389.9 18,816 17,149 1,667 Mortgage Lenders 412 112 300 $353.4 100.9 252.5 275.0 81.9 193.1 947 364 583 Consumer Lenders 61 46 15 $278.1 166.8 111.3 232.8 139.7 93.2 981 689 292 Other Specialized <$1 Billion 273 248 25 $45.2 41.1 4.2 36.7 33.9 2.8 359 177 182 All Other <$1 Billion 497 437 60 $86.2 73.4 12.8 73.3 62.7 10.5 217 196 21 All Other >$1 Billion 58 48 10 $5,533.9 5,305.9 228.0 4,435.8 4,228.2 207.7 17,326 16,521 805 3.92 0.60 3.32 1.54 2.65 0.28 1.28 1.62 1.28 11.44 0.50 12.65 1.76 10.89 2.63 5.60 3.65 2.64 3.43 2.64 16.95 4.26 3.07 0.59 2.48 2.03 2.51 0.18 1.20 1.54 1.21 12.31 0.55 4.32 0.59 3.73 0.61 2.52 0.09 1.31 1.48 1.31 11.67 0.06 4.09 0.58 3.50 1.23 2.71 0.17 1.23 1.54 1.23 10.34 0.19 3.51 0.60 2.91 1.18 2.57 -0.01 1.06 1.39 1.08 9.62 0.04 4.29 0.59 3.70 1.12 2.44 0.42 1.42 1.88 1.42 14.19 0.61 3.21 0.36 2.84 7.32 6.06 0.06 3.22 3.79 3.19 20.09 0.15 3.97 0.46 3.51 0.87 2.87 0.12 1.01 1.15 1.01 8.68 0.15 3.48 0.50 2.98 1.47 2.38 0.18 1.25 1.60 1.25 11.30 0.40 102.79 57.53 3.89 74.19 106.74 43.59 0.00 81.82 87.27 58.96 0.00 100.00 221.77 61.19 2.80 69.67 124.03 60.73 3.14 78.80 -31.00 65.01 7.77 68.69 95.65 50.87 3.28 80.33 142.11 60.92 8.42 67.40 143.91 69.18 5.43 66.00 92.59 56.43 6.90 77.59 90.60 92.37 88.33 93.55 91.12 94.81 97.65 92.14 93.00 90.79 1.27 110.00 4.70 300.42 1.33 113.54 1.42 127.28 1.03 121.59 0.74 25.77 0.82 143.35 1.48 104.23 1.27 118.56 1.13 76.85 0.69 11.21 9.66 13.06 13.14 14.54 71.17 54.92 69.91 1.25 16.03 13.50 13.49 13.61 15.69 138.50 76.07 54.00 0.44 9.81 8.75 13.13 13.22 14.61 49.94 36.26 47.80 0.87 11.20 11.08 14.74 14.76 15.89 79.90 66.51 83.24 0.69 11.90 10.19 12.42 12.51 13.81 88.26 69.61 78.60 1.77 11.27 11.05 22.25 22.27 23.16 75.83 59.00 77.53 0.42 10.05 10.23 18.14 18.34 19.20 84.58 70.82 83.72 0.55 15.71 15.52 33.86 33.86 34.82 33.79 27.43 81.19 0.81 11.57 11.87 20.33 20.35 21.46 64.94 55.20 84.99 0.77 11.06 9.13 12.85 12.92 14.41 61.84 49.57 76.76 3 65 0 0 0 0 0 0 0 0 7 0 0 54 0 0 1 0 0 0 0 3 0 0 0 2 0 0 1 0 PRIOR FRST QUARTERS (The way it was...) Number of institutions 2017 2015 2013 5,856 6,419 7,019 13 15 16 4 4 5 1,399 1,464 1,491 2,987 3,150 3,483 454 557 619 61 58 49 309 387 450 563 713 827 66 71 79 Total assets (in billions) 2017 2015 2013 $16,965.5 15,778.0 14,423.8 $506.1 489.9 594.5 $4,001.0 3,855.3 3,838.6 $271.2 254.9 231.1 $5,730.6 4,926.8 4,223.0 $339.1 461.8 566.2 $258.2 181.7 106.3 $52.2 63.6 69.4 $102.7 132.4 148.9 $5,704.5 5,411.8 4,645.8 Return on assets (%) 2017 2015 2013 1.04 1.02 1.12 2.07 3.04 3.11 0.94 0.90 0.95 1.18 1.17 1.14 0.98 0.91 0.89 0.91 0.76 0.94 1.08 1.02 1.48 2.53 2.19 1.52 0.91 0.90 0.93 1.06 1.02 1.22 Net charge-offs to loans & leases (%) 2017 2015 2013 0.50 0.43 0.83 3.93 2.80 3.41 0.66 0.63 1.17 0.10 0.02 0.10 0.20 0.15 0.51 0.09 0.15 0.42 0.65 0.60 1.18 0.12 0.13 0.34 0.13 0.14 0.29 0.38 0.41 0.63 Noncurrent assets plus OREO to assets (%) 2017 2015 2013 0.81 1.10 2.08 1.14 0.83 1.04 0.56 0.78 1.30 0.84 0.80 1.07 0.82 1.06 2.12 1.92 1.94 2.57 0.68 1.11 0.92 0.56 0.70 1.05 0.90 1.31 1.68 0.86 1.33 2.85 Equity capital ratio (%) 2017 2015 2013 11.15 11.18 11.28 15.52 15.30 14.94 10.03 9.52 8.97 11.30 11.44 11.27 11.91 11.98 11.95 10.89 11.34 11.44 10.14 9.93 9.50 14.81 14.71 14.56 11.52 11.69 11.49 10.80 11.23 12.07 * See Table V-A (page 10) for explanations. 6 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE III-A. First Quarter 2018, 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 5,606 4,880 726 $17,531.5 16,327.8 1,203.7 13,528.8 12,570.9 957.9 55,977 51,903 4,074 Less Than $100 Million 1,392 1,237 155 $83.1 74.3 8.8 69.7 62.9 6.7 201 176 26 $100 Million to $1 Billion 3,453 3,014 439 $1,130.3 964.4 165.8 946.4 815.0 131.3 3,344 2,862 481 $1 Billion to $10 Billion 629 511 118 $1,701.8 1,356.4 345.3 1,361.8 1,095.4 266.4 5,383 4,493 890 $10 Billion Greater to $250 Than $250 Billion Billion 123 9 109 9 14 0 $5,827.3 $8,789.0 5,143.6 8,789.0 683.7 0.0 4,464.9 6,686.2 3,911.4 6,686.2 553.5 0.0 19,848 27,201 17,171 27,201 2,677 0 3.92 0.60 3.32 1.54 2.65 0.28 1.28 1.62 1.28 11.44 0.50 4.24 0.50 3.75 1.33 3.58 0.11 0.98 1.09 0.97 7.37 0.16 4.31 0.56 3.75 1.11 3.11 0.11 1.18 1.39 1.19 10.54 0.08 4.27 0.60 3.67 1.17 2.77 0.19 1.28 1.61 1.28 10.88 0.18 4.49 0.70 3.79 1.53 2.74 0.48 1.37 1.76 1.37 11.24 0.74 102.79 57.53 3.89 74.19 121.59 74.54 9.55 63.22 197.16 67.30 2.20 75.82 151.56 60.10 1.27 86.01 90.60 92.73 93.29 1.27 110.00 1.41 113.17 0.69 11.21 9.66 13.06 13.14 14.54 71.17 54.92 69.91 New York 684 356 328 $3,273.9 2,838.6 435.3 2,480.0 2,148.6 331.4 9,360 8,397 963 Atlanta 656 599 57 $3,604.2 3,502.9 101.2 2,863.9 2,783.4 80.6 11,803 11,560 243 Chicago 1,208 1,030 178 $3,969.6 3,859.6 110.0 2,952.8 2,876.3 76.6 12,531 12,172 359 Kansas City 1,425 1,376 49 $3,674.4 3,633.9 40.4 2,816.3 2,785.1 31.2 10,834 10,715 119 San Dallas Francisco 1,214 419 1,138 381 76 38 $1,102.8 $1,906.6 965.8 1,527.0 137.1 379.6 904.1 1,511.6 793.0 1,184.5 111.1 327.1 3,689 7,761 3,216 5,842 472 1,919 3.41 0.54 2.88 1.69 2.49 0.19 1.24 1.57 1.24 11.89 0.46 4.05 0.73 3.32 1.37 2.54 0.37 1.15 1.45 1.15 9.30 0.62 4.04 0.52 3.51 1.44 2.61 0.30 1.31 1.68 1.31 10.90 0.56 3.20 0.51 2.69 1.94 2.66 0.12 1.26 1.59 1.27 12.23 0.24 3.93 0.65 3.28 1.40 2.60 0.26 1.18 1.51 1.18 11.77 0.53 4.27 0.48 3.79 1.25 2.96 0.15 1.35 1.62 1.35 11.74 0.20 4.70 0.65 4.05 1.68 2.80 0.57 1.64 2.13 1.64 14.23 0.73 106.63 54.38 0.81 91.06 88.90 57.91 0.00 88.89 106.07 57.48 4.82 78.95 94.03 56.39 5.49 76.52 95.75 60.82 4.47 70.86 92.77 58.38 2.81 71.72 112.92 61.83 2.97 74.38 124.47 50.53 4.53 80.19 92.72 91.23 89.40 90.12 89.79 89.52 90.75 91.99 94.12 1.25 139.96 1.12 131.82 1.37 129.67 1.22 89.39 1.29 124.30 1.28 100.55 1.14 97.76 1.31 92.73 1.11 103.93 1.45 202.57 1.02 13.11 13.19 21.14 21.18 22.25 69.68 58.38 83.78 0.83 11.25 11.24 15.50 15.53 16.62 80.92 67.76 83.72 0.70 11.77 10.88 14.16 14.18 15.16 86.75 69.42 79.77 0.68 12.19 10.39 13.20 13.36 14.84 78.83 60.40 73.66 0.67 10.43 8.70 12.33 12.37 13.84 61.52 46.80 63.61 0.63 12.36 10.31 13.36 13.42 14.85 73.50 55.68 69.22 0.79 12.04 9.54 12.76 12.86 14.19 71.68 56.96 76.90 0.62 10.37 9.18 12.84 12.88 14.06 66.22 49.26 64.98 0.79 10.04 9.02 12.24 12.33 14.24 68.36 52.40 60.91 0.82 11.48 10.28 13.35 13.45 14.53 78.47 64.33 81.93 0.47 11.51 10.70 15.06 15.19 16.26 76.93 60.99 78.57 3 65 0 3 17 0 0 38 0 0 10 0 0 0 0 0 0 0 0 11 0 1 8 0 0 7 0 0 11 0 0 23 0 2 5 0 PRIOR FIRST QUARTERS (The way it was…) Number of institutions 2017 2015 2013 5,856 6,419 7,019 1,501 1,830 2,161 3,605 3,895 4,196 632 582 553 109 103 102 9 9 7 719 796 867 708 797 894 1,253 1,386 1,500 1,471 1,585 1,701 1,264 1,351 1,480 441 504 577 Total assets (in billions) 2017 2015 2013 $16,965.5 15,778.0 14,423.8 $88.9 107.6 126.0 $1,166.2 1,219.7 1,270.8 $1,763.5 1,572.9 1,423.8 $5,363.5 4,684.3 4,705.9 $8,583.4 8,193.5 6,897.3 $3,114.5 3,020.2 2,862.3 $3,539.0 3,273.1 3,017.0 $3,839.3 3,633.2 3,345.3 $3,679.1 3,424.9 3,068.2 $1,032.1 923.6 870.9 $1,761.6 1,503.1 1,260.0 Return on assets (%) 2017 2015 2013 1.04 1.02 1.12 0.90 0.86 0.73 1.04 1.01 0.87 1.09 1.05 1.09 1.06 1.03 1.10 1.02 1.01 1.19 0.92 0.83 0.86 0.99 0.98 1.11 0.98 0.94 1.09 1.08 1.16 1.25 1.15 1.03 1.09 1.36 1.35 1.49 Net charge-offs to loans & leases (%) 2017 2015 2013 0.50 0.43 0.83 0.14 0.15 0.27 0.12 0.11 0.33 0.20 0.20 0.43 0.71 0.53 1.06 0.49 0.50 0.88 0.52 0.46 1.10 0.58 0.52 0.83 0.34 0.27 0.55 0.51 0.54 1.05 0.28 0.16 0.37 0.67 0.46 0.65 Noncurrent assets plus OREO to assets (%) 2017 2015 2013 0.81 1.10 2.08 1.09 1.39 2.04 0.93 1.33 2.30 0.81 1.15 2.17 0.75 0.84 1.36 0.82 1.20 2.50 0.69 0.82 1.41 0.97 1.37 3.03 0.73 1.04 1.87 0.92 1.36 2.34 0.99 1.12 2.00 0.51 0.61 1.28 Equity capital ratio (%) 2017 2015 2013 11.15 11.18 11.28 12.86 12.45 11.97 11.19 11.28 11.00 11.59 11.87 11.84 12.08 12.47 12.63 10.45 10.28 10.28 12.29 11.76 12.26 12.04 12.47 12.22 10.30 9.89 9.12 9.89 10.25 11.03 10.94 11.08 10.81 11.94 12.53 13.41 * See Table V-A (page 11) for explanations. FDIC QUARTERLY 7 2018 • Volume 12 • Numb er 2 TABLE IV-A. Full Year 2017, 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 5,670 4,918 752 $17,415.4 16,217.8 1,197.5 13,399.2 12,467.5 931.6 164,374 151,772 12,602 Credit Card Banks 11 10 1 $562.7 483.6 79.2 309.7 251.9 57.8 7,837 6,274 1,563 International Banks 5 5 0 $4,196.0 4,196.0 0.0 3,064.1 3,064.1 0.0 25,587 25,587 0 Agricultural Banks 1,390 1,376 14 $282.6 277.4 5.3 234.1 231.3 2.9 2,898 2,786 112 Commercial Lenders 2,943 2,632 311 $6,025.9 5,545.8 480.1 4,733.5 4,374.3 359.2 59,459 54,236 5,223 Mortgage Lenders 420 105 315 $349.2 95.3 254.0 274.4 81.2 193.3 3,151 1,357 1,793 Consumer Lenders 59 45 14 $270.9 163.1 107.8 227.6 137.7 89.9 2,678 1,907 771 Other Specialized <$1 Billion 272 245 27 $46.9 42.7 4.2 38.0 35.1 2.9 1,205 621 584 All Other <$1 Billion 510 448 62 $88.9 76.8 12.1 74.8 65.0 9.8 799 722 76 All Other >$1 Billion 60 52 8 $5,592.2 5,337.3 254.9 4,442.8 4,227.0 215.8 60,761 58,281 2,479 3.73 0.48 3.25 1.50 2.60 0.30 0.96 1.54 0.97 8.61 0.50 12.45 1.54 10.92 2.44 5.32 3.92 1.52 3.19 1.52 9.84 3.95 2.91 0.49 2.43 1.82 2.42 0.19 0.61 1.34 0.62 6.21 0.56 4.24 0.52 3.72 0.64 2.67 0.15 1.04 1.30 1.05 9.26 0.16 3.89 0.47 3.42 1.27 2.73 0.16 1.02 1.49 1.02 8.56 0.21 3.31 0.48 2.83 1.31 2.51 0.00 0.91 1.51 0.94 8.40 0.04 4.02 0.46 3.56 1.18 2.45 0.46 1.02 1.76 1.02 10.20 0.60 3.08 0.33 2.75 6.36 5.52 0.06 2.58 3.35 2.61 17.37 0.23 3.89 0.41 3.48 0.92 2.91 0.10 0.91 1.15 0.91 7.66 0.15 3.31 0.37 2.93 1.46 2.33 0.21 1.09 1.59 1.10 9.98 0.43 109.24 57.93 5.57 55.84 124.63 42.09 0.00 27.27 95.36 60.65 0.00 40.00 134.52 64.66 3.17 54.53 113.81 61.62 5.50 57.59 5.10 62.64 10.24 50.48 106.58 51.68 8.47 47.46 90.99 62.01 10.29 53.68 111.51 69.94 6.27 55.10 95.52 55.73 3.33 68.33 90.50 92.20 88.39 93.02 90.93 94.74 97.52 92.30 92.73 90.66 1.27 106.29 4.39 284.47 1.36 107.71 1.40 145.07 1.03 119.72 0.75 27.72 0.83 169.94 1.43 105.91 1.26 113.86 1.14 73.16 0.72 11.22 9.63 13.11 13.19 14.58 71.63 55.11 69.37 1.25 15.10 13.12 12.75 12.87 14.97 140.71 77.45 54.42 0.48 9.83 8.66 13.33 13.41 14.76 49.89 36.44 48.25 0.77 11.18 10.89 14.41 14.42 15.54 80.59 66.76 82.84 0.70 11.95 10.16 12.38 12.47 13.78 88.51 69.53 78.27 1.70 11.22 10.90 21.82 21.83 22.75 75.67 59.46 78.29 0.36 10.00 10.12 17.93 18.14 19.00 84.86 71.30 84.00 0.59 15.26 14.73 32.08 32.08 33.06 34.48 27.95 81.07 0.81 11.94 11.84 20.30 20.32 21.45 65.93 55.47 84.13 0.82 11.09 9.19 13.06 13.13 14.60 62.82 49.91 74.85 5 230 8 0 0 0 0 0 0 0 33 1 3 176 4 0 8 2 0 0 0 2 1 0 0 10 1 0 2 0 PRIOR FULL YEARS (The way it was...) Number of institutions 2016 2014 2012 5,913 6,509 7,083 13 15 19 5 3 5 1,429 1,515 1,537 3,025 3,222 3,499 462 553 659 65 52 51 300 374 414 549 708 826 65 67 73 Total assets (in billions) 2016 2014 2012 $16,779.6 15,553.7 14,450.4 $519.0 484.2 600.7 $4,052.7 3,735.6 3,808.4 $284.9 273.5 239.8 $5,628.2 4,878.5 4,338.9 $331.5 439.6 628.3 $256.0 175.9 101.6 $51.1 61.9 64.9 $97.5 129.1 145.8 $5,558.7 5,375.5 4,522.0 Return on assets (%) 2016 2014 2012 1.04 1.01 1.00 2.27 3.22 3.13 0.93 0.72 0.80 1.21 1.17 1.27 0.97 0.94 0.89 0.99 0.96 0.87 0.96 1.05 1.46 2.85 2.20 1.23 0.92 0.86 0.86 1.06 1.06 1.00 Net charge-offs to loans & leases (%) 2016 2014 2012 0.47 0.49 1.10 3.34 2.81 3.69 0.55 0.73 1.41 0.15 0.13 0.24 0.22 0.24 0.74 0.07 0.21 0.82 0.56 0.62 1.31 0.22 0.34 0.45 0.19 0.25 0.45 0.41 0.41 0.94 Noncurrent assets plus OREO to assets (%) 2016 2014 2012 0.86 1.20 2.20 1.14 0.88 1.11 0.61 0.85 1.39 0.77 0.83 1.11 0.87 1.17 2.21 1.97 2.19 2.70 0.70 1.19 0.88 0.63 0.73 1.04 0.94 1.39 1.67 0.96 1.43 3.06 Equity capital ratio (%) 2016 2014 2012 11.10 11.15 11.17 14.84 15.13 14.67 9.97 9.45 8.93 11.30 11.42 11.14 11.81 11.97 11.93 11.28 12.07 11.09 10.04 9.88 9.57 15.24 14.78 14.27 11.41 11.81 11.47 10.85 11.11 11.85 * See Table V-A (page 10) for explanations. 8 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE IV-A. Full Year 2017, 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 5,670 4,918 752 $17,415.4 16,217.8 1,197.5 13,399.2 12,467.5 931.6 164,374 151,772 12,602 Less Than $100 Million 1,407 1,238 169 $83.7 74.2 9.5 70.0 62.6 7.4 685 639 47 $100 Million to $1 Billion 3,513 3,062 451 $1,154.2 984.2 170.0 961.8 827.8 134.0 11,686 10,143 1,544 $1 Billion to $10 Billion 627 509 118 $1,751.7 1,411.7 340.0 1,390.1 1,131.8 258.3 17,691 14,849 2,841 $10 Billion Greater to $250 Than $250 Billion Billion 114 9 100 9 14 0 $5,699.2 $8,726.6 5,021.1 8,726.6 678.1 0.0 4,340.0 6,637.2 3,808.1 6,637.2 531.9 0.0 57,377 76,935 49,207 76,935 8,170 0 3.73 0.48 3.25 1.50 2.60 0.30 0.96 1.54 0.97 8.61 0.50 4.18 0.46 3.72 1.18 3.46 0.14 0.82 1.02 0.83 6.38 0.21 4.24 0.50 3.74 1.15 3.13 0.13 1.03 1.38 1.04 9.21 0.15 4.14 0.50 3.64 1.24 2.79 0.21 1.04 1.63 1.05 8.99 0.22 4.21 0.55 3.66 1.53 2.68 0.50 1.04 1.67 1.04 8.59 0.71 109.24 57.93 5.57 55.84 110.34 74.93 10.73 53.30 128.65 67.39 4.30 55.68 131.35 59.76 1.75 60.93 90.50 92.36 93.04 1.27 106.29 1.39 115.59 0.72 11.22 9.63 13.11 13.19 14.58 71.63 55.11 69.37 New York 693 362 331 $3,248.1 2,811.4 436.7 2,462.4 2,130.3 332.1 26,827 23,700 3,126 Atlanta 668 606 62 $3,601.0 3,498.4 102.6 2,828.3 2,747.0 81.3 35,146 34,552 594 Chicago 1,214 1,019 195 $3,918.1 3,806.6 111.5 2,928.1 2,851.1 77.0 38,508 37,286 1,221 Kansas City 1,438 1,389 49 $3,683.1 3,641.9 41.2 2,819.2 2,788.8 30.4 28,007 27,624 383 San Dallas Francisco 1,235 422 1,158 384 77 38 $1,090.0 $1,875.1 955.9 1,503.7 134.1 371.5 889.0 1,472.2 781.0 1,169.5 108.0 302.7 11,697 24,190 10,311 18,299 1,386 5,892 3.26 0.42 2.83 1.58 2.44 0.21 0.89 1.47 0.89 8.49 0.47 3.85 0.59 3.26 1.33 2.55 0.39 0.85 1.32 0.85 6.93 0.58 3.85 0.40 3.44 1.45 2.58 0.35 1.00 1.61 1.00 8.24 0.61 3.00 0.40 2.60 1.85 2.58 0.13 1.00 1.47 1.00 9.61 0.27 3.82 0.55 3.27 1.25 2.51 0.27 0.75 1.44 0.77 7.67 0.51 4.10 0.39 3.71 1.35 3.00 0.20 1.12 1.57 1.12 9.99 0.28 4.41 0.49 3.92 1.74 2.73 0.53 1.34 2.17 1.36 11.43 0.67 118.11 54.45 2.63 63.16 94.37 58.58 0.00 66.67 121.03 59.08 7.65 51.08 99.55 56.29 9.73 53.59 94.34 61.40 5.93 56.51 102.10 58.67 3.34 55.08 111.10 62.25 4.29 59.19 129.14 49.83 5.92 58.06 92.35 91.16 89.35 90.06 89.74 89.48 90.55 91.73 94.02 1.25 141.50 1.10 141.33 1.38 127.25 1.24 83.87 1.29 120.77 1.29 96.48 1.16 96.65 1.32 86.08 1.11 107.20 1.43 209.24 1.01 13.01 12.91 20.56 20.59 21.66 70.55 58.99 83.61 0.83 11.29 11.10 15.35 15.39 16.48 81.31 67.76 83.33 0.66 11.82 10.72 13.85 13.87 14.87 87.90 69.76 79.12 0.70 12.13 10.38 13.14 13.31 14.77 78.96 60.13 72.91 0.73 10.47 8.69 12.54 12.58 14.04 62.03 47.18 63.12 0.65 12.34 10.31 13.28 13.36 14.72 73.67 55.85 68.90 0.83 12.06 9.55 12.81 12.91 14.27 73.07 57.39 75.98 0.64 10.42 9.14 12.97 13.02 14.22 66.04 49.35 65.31 0.86 9.99 8.92 12.44 12.51 14.38 68.57 52.49 59.72 0.81 11.49 10.21 13.15 13.25 14.32 79.38 64.74 81.51 0.45 11.58 10.71 15.00 15.14 16.22 77.70 61.01 77.89 5 230 8 3 55 3 1 137 3 1 35 2 0 3 0 0 0 0 0 34 1 1 42 0 0 52 4 0 42 1 3 40 1 1 20 1 PRIOR FULL YEARS (The way it was…) Number of institutions 2016 2014 2012 5,913 6,509 7,083 1,541 1,871 2,204 3,637 3,957 4,217 621 574 555 105 98 99 9 9 8 724 807 873 720 812 904 1,271 1,406 1,515 1,485 1,599 1,716 1,268 1,372 1,490 445 513 585 Total assets (in billions) 2016 2014 2012 $16,779.6 15,553.7 14,450.4 $91.5 109.7 128.1 $1,173.9 1,232.1 1,275.0 $1,761.8 1,576.4 1,454.7 $5,305.7 4,534.2 4,468.7 $8,446.8 8,101.3 7,123.9 $3,096.4 2,956.4 2,896.1 $3,507.3 3,217.9 3,056.1 $3,784.3 3,595.8 3,298.1 $3,633.8 3,404.0 3,068.7 $1,010.7 904.4 870.4 $1,747.0 1,475.2 1,261.0 Return on assets (%) 2016 2014 2012 1.04 1.01 1.00 0.89 0.79 0.68 1.08 1.00 0.80 1.01 1.09 1.13 1.07 1.09 1.13 1.03 0.95 0.94 0.87 0.83 0.96 1.02 1.00 0.77 1.00 0.88 0.90 1.09 1.07 1.10 1.02 1.14 1.01 1.40 1.49 1.72 Net charge-offs to loans & leases (%) 2016 2014 2012 0.47 0.49 1.10 0.21 0.23 0.43 0.14 0.23 0.64 0.25 0.27 0.73 0.64 0.60 1.30 0.47 0.54 1.17 0.52 0.55 1.24 0.54 0.54 1.19 0.27 0.36 0.85 0.53 0.60 1.37 0.31 0.23 0.56 0.58 0.47 0.84 Noncurrent assets plus OREO to assets (%) 2016 2014 2012 0.86 1.20 2.20 1.10 1.45 2.10 0.96 1.38 2.37 0.84 1.41 2.46 0.78 0.83 1.40 0.90 1.32 2.61 0.70 0.89 1.46 1.03 1.55 3.23 0.79 1.11 2.00 1.00 1.46 2.45 1.06 1.18 2.05 0.53 0.65 1.38 Equity capital ratio (%) 2016 2014 2012 11.10 11.15 11.17 12.70 12.28 12.00 11.14 11.20 10.90 11.55 11.90 11.77 11.87 12.39 12.37 10.50 10.28 10.32 12.11 11.81 12.18 12.05 12.45 12.03 10.32 9.80 9.10 9.87 10.20 10.86 10.92 11.06 10.70 11.79 12.47 13.24 * See Table V-A (page 11) for explanations. FDIC QUARTERLY 9 2018 • Volume 12 • Numb er 2 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* March 31, 2018 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 0.66 0.38 0.32 0.12 0.66 1.05 0.29 1.32 1.28 1.37 0.31 0.65 0.17 0.00 0.00 0.00 0.00 0.18 0.96 1.45 1.46 1.33 0.62 1.43 0.79 0.09 0.37 0.05 0.99 1.11 0.35 1.09 1.10 1.06 0.29 0.62 0.80 0.60 0.58 0.35 0.35 1.09 0.98 1.21 1.18 1.21 1.52 0.99 0.46 0.35 0.28 0.14 0.50 0.81 0.29 1.17 0.99 1.19 0.24 0.46 0.86 0.56 0.27 0.15 0.55 0.98 0.51 0.98 0.78 1.00 0.19 0.81 0.34 0.51 0.27 0.04 0.31 0.35 0.27 0.71 0.68 0.72 0.04 0.53 1.28 1.03 0.98 0.43 0.49 1.67 0.94 1.47 1.26 1.48 0.75 1.23 1.16 0.72 0.96 0.57 0.71 1.40 1.03 1.66 2.15 1.64 0.56 1.15 1.00 0.55 0.40 0.08 0.80 1.39 0.22 1.59 1.19 1.84 0.29 0.79 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 1.60 0.47 0.61 0.15 2.45 2.61 0.85 0.96 1.40 0.51 0.22 1.15 0.81 0.00 0.00 0.00 73.35 0.68 0.88 1.59 1.64 0.67 0.47 1.56 2.22 0.27 0.48 0.07 4.24 3.03 0.84 0.89 1.17 0.32 0.09 1.17 1.08 0.70 1.02 0.21 0.39 0.85 1.37 0.52 0.40 0.53 1.19 1.12 0.89 0.49 0.58 0.16 1.25 1.49 0.97 0.74 0.98 0.71 0.33 0.85 3.03 0.39 0.68 0.46 1.19 3.64 4.44 0.46 0.76 0.43 0.18 2.86 0.80 0.61 0.60 0.18 1.64 0.76 0.39 0.53 1.28 0.36 0.04 0.57 1.57 2.33 1.21 1.68 0.47 1.67 1.44 0.86 0.47 0.88 0.66 1.42 1.12 0.99 1.25 0.61 0.44 1.14 0.99 1.17 1.03 1.17 0.46 1.07 2.79 0.37 0.67 0.13 3.82 3.86 0.65 0.70 1.22 0.39 0.17 1.47 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 0.02 -0.03 0.01 0.00 0.11 0.02 0.28 2.43 3.89 0.90 0.12 0.50 0.11 0.00 0.00 0.00 8.90 0.10 2.94 4.32 4.41 2.35 1.19 4.26 0.06 0.00 -0.01 0.00 0.23 0.06 0.27 2.63 3.51 0.78 0.05 0.55 0.00 -0.14 -0.01 0.00 -0.08 0.03 0.16 0.51 2.47 0.33 0.13 0.06 0.02 -0.04 0.03 0.00 0.10 0.02 0.32 1.16 3.38 0.84 0.14 0.19 0.01 0.01 -0.03 0.01 -0.10 0.02 -0.04 1.12 2.56 0.98 0.15 0.04 -0.02 0.01 0.04 0.00 -0.05 -0.02 0.37 1.05 2.95 0.60 0.00 0.61 0.06 0.42 0.00 0.00 -0.07 0.07 -0.04 0.61 1.09 0.59 0.69 0.15 0.01 -0.19 -0.01 -0.01 0.02 0.04 0.88 0.60 1.81 0.56 0.19 0.15 0.00 -0.02 -0.03 -0.01 0.10 0.00 0.17 1.92 3.38 1.02 0.15 0.40 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) $4,795.2 344.2 1,402.6 411.0 398.4 2,072.6 2,051.9 1,634.6 820.4 814.1 1,273.0 9,754.6 $0.5 0.0 0.0 0.0 0.0 0.4 16.3 415.0 395.0 20.0 0.8 432.6 $574.2 17.4 50.1 77.1 51.2 328.5 344.9 269.5 181.1 88.4 384.2 1,572.7 $114.8 6.5 30.7 3.7 2.3 27.7 20.9 6.0 0.5 5.5 40.9 182.6 $2,653.0 257.2 1,034.2 278.0 200.4 836.3 992.9 347.3 43.2 304.1 329.4 4,322.6 $187.5 5.8 16.8 4.8 11.0 148.2 6.1 4.0 0.4 3.7 12.5 210.2 $62.5 0.5 4.5 1.2 4.7 51.5 9.8 112.8 20.8 92.0 13.6 198.7 $8.8 0.7 2.9 0.2 0.3 4.1 1.6 1.6 0.1 1.5 0.6 12.6 $36.9 2.3 8.6 1.0 1.5 20.4 4.1 4.1 0.1 4.0 3.0 48.2 $1,156.9 53.7 254.8 45.0 127.1 655.4 655.4 474.2 179.2 295.0 488.0 2,774.5 Memo: Other Real Estate Owned (in millions) All other real estate owned Construction and development Nonfarm nonresidential Multifamily residential real estate 1-4 family residential Farmland GNMA properties 8,129.2 2,314.7 2,290.7 123.8 2,839.5 182.9 344.6 0.2 0.0 0.0 0.0 0.2 0.0 0.0 498.1 5.2 67.0 0.0 300.9 0.0 94.0 314.9 70.4 107.5 13.3 53.1 70.5 0.0 5,243.1 1,934.6 1,691.9 82.1 1,424.7 72.0 37.8 242.3 50.3 20.3 13.3 122.5 2.4 33.4 32.4 4.8 6.1 0.0 20.6 0.9 0.0 69.5 29.4 22.8 1.0 14.9 1.1 0.2 178.0 53.2 56.1 3.8 60.0 4.5 0.4 1,550.7 166.6 319.1 10.2 842.6 31.4 178.9 * 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 0.66 0.38 0.32 0.12 0.66 1.05 0.29 1.32 1.28 1.37 0.31 0.65 1.20 0.74 0.94 0.75 0.78 1.59 1.22 1.66 4.23 1.61 1.09 1.22 0.64 0.51 0.47 0.27 0.49 0.89 0.65 1.20 1.92 1.16 0.98 0.69 0.38 0.43 0.29 0.09 0.38 0.57 0.46 1.29 2.98 0.99 0.51 0.46 0.52 0.31 0.23 0.15 0.50 0.89 0.25 1.23 1.36 1.07 0.28 0.60 0.94 0.34 0.37 0.05 0.85 1.34 0.25 1.42 1.12 1.72 0.27 0.73 0.51 0.49 0.37 0.14 0.53 0.77 0.24 1.14 1.16 1.10 0.09 0.54 0.75 0.41 0.22 0.13 0.79 1.19 0.23 1.76 1.39 2.13 0.23 0.75 0.66 0.20 0.31 0.10 0.72 0.98 0.29 0.97 1.10 0.92 0.38 0.57 0.96 0.40 0.44 0.10 0.71 1.48 0.30 1.31 1.16 1.55 0.31 0.76 0.62 0.39 0.37 0.10 0.48 1.16 0.48 0.83 0.66 0.91 0.31 0.59 0.36 0.37 0.21 0.11 0.31 0.55 0.37 1.32 1.63 1.04 0.81 0.63 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 1.60 0.47 0.61 0.15 2.45 2.61 0.85 0.96 1.40 0.51 0.22 1.15 1.25 0.95 1.47 1.03 0.41 1.26 1.57 0.85 2.68 0.82 1.13 1.24 0.88 0.98 0.78 0.44 0.57 0.97 1.09 0.66 1.69 0.60 0.87 0.89 0.74 0.58 0.61 0.15 0.62 1.11 1.51 0.85 2.99 0.47 0.44 0.85 1.27 0.27 0.53 0.11 1.27 2.32 0.92 1.13 1.53 0.60 0.29 1.06 2.63 0.31 0.59 0.10 3.99 3.63 0.65 0.79 1.17 0.42 0.12 1.37 1.27 0.51 0.72 0.15 2.33 2.07 0.83 1.06 1.33 0.64 0.22 1.04 2.00 0.72 0.59 0.18 3.09 3.03 0.71 1.08 1.45 0.72 0.15 1.28 1.80 0.43 0.66 0.15 2.38 2.69 0.76 0.55 1.18 0.30 0.15 1.17 2.34 0.38 0.64 0.15 2.91 3.81 0.80 0.93 1.23 0.47 0.27 1.41 1.04 0.37 0.60 0.25 1.06 2.10 1.51 0.82 1.26 0.62 0.36 1.07 0.48 0.39 0.39 0.07 0.63 0.57 1.07 1.02 1.80 0.33 0.39 0.71 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 0.02 -0.03 0.01 0.00 0.11 0.02 0.28 2.43 3.89 0.90 0.12 0.50 0.02 0.02 0.01 0.11 0.03 0.04 0.44 0.91 18.97 0.56 0.27 0.16 0.01 -0.02 0.01 -0.01 0.02 0.03 0.22 0.90 6.69 0.52 0.15 0.08 0.01 -0.06 0.01 0.00 0.03 0.02 0.30 1.95 7.78 0.89 0.16 0.18 0.03 -0.04 0.03 0.00 0.10 0.03 0.40 2.76 4.16 0.87 0.10 0.74 0.02 -0.02 -0.02 -0.01 0.14 0.01 0.19 2.17 3.41 0.97 0.12 0.46 0.04 0.01 0.03 0.00 0.14 0.05 0.42 2.66 3.63 1.08 0.11 0.62 0.03 -0.05 0.04 0.00 0.14 0.01 0.21 2.46 4.04 0.84 0.13 0.56 0.02 -0.02 0.01 0.00 0.12 0.01 0.21 1.47 3.68 0.57 0.11 0.24 0.02 -0.06 -0.02 -0.01 0.06 0.04 0.25 2.77 3.63 1.40 0.11 0.53 0.01 -0.01 0.01 0.01 0.02 0.02 0.24 1.56 2.83 0.98 0.13 0.20 -0.01 -0.12 0.00 -0.01 0.02 0.00 0.47 2.66 4.76 0.74 0.11 0.73 $4,795.2 344.2 1,402.6 411.0 398.4 2,072.6 2,051.9 1,634.6 820.4 814.1 1,273.0 $34.1 2.0 8.6 1.0 0.9 15.4 5.8 3.1 0.1 3.1 6.2 $601.3 56.2 228.7 33.2 23.1 209.4 96.9 31.1 1.9 29.3 46.5 $877.0 81.5 358.3 97.4 42.1 275.1 184.1 71.9 10.9 60.9 62.3 $1,615.7 132.7 520.0 159.5 143.1 642.8 769.2 800.9 452.9 348.0 383.6 $1,667.1 71.7 287.1 119.9 189.3 929.9 995.9 727.5 354.6 372.9 774.4 $979.5 64.3 320.7 147.4 79.2 363.5 310.6 353.3 215.7 137.6 203.8 $913.7 59.5 273.0 42.2 100.4 424.1 495.0 402.0 200.2 201.9 268.8 $999.5 58.4 216.4 108.0 98.8 494.4 450.0 224.8 64.3 160.5 303.7 $867.7 52.7 194.3 33.9 71.0 422.1 425.4 309.8 188.6 121.2 348.7 $462.5 71.9 192.9 20.3 20.9 138.6 140.7 63.7 19.7 44.0 50.7 $572.1 37.4 205.4 59.2 28.2 229.9 230.1 280.9 131.9 149.0 97.3 9,754.6 49.2 775.9 1,195.2 3,569.4 4,164.9 1,847.3 2,079.6 1,978.1 1,951.6 717.6 1,180.4 8,129.2 2,314.7 2,290.7 123.8 2,839.5 182.9 344.6 231.1 61.6 66.8 7.8 68.1 26.6 0.2 2,424.5 1,051.7 793.6 51.1 441.8 84.2 2.1 1,806.5 646.7 613.0 35.0 429.3 62.8 19.6 1,924.8 379.4 511.0 18.3 902.7 8.0 105.3 1,742.3 175.2 306.2 11.6 997.6 1.3 217.4 1,506.0 246.9 435.3 22.0 724.7 8.5 68.8 1,870.3 624.7 487.5 36.7 672.3 15.0 34.1 1,516.8 286.6 424.9 17.3 644.2 23.4 118.4 1,412.0 435.2 353.0 29.8 374.3 85.6 103.2 1,350.9 555.4 456.1 9.7 283.8 38.9 7.1 473.2 166.0 133.9 8.3 140.3 11.5 13.0 March 31, 2018 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 2018 • Volume 12 • Numb er 2 Table VI-A. Derivatives, All FDIC-Insured Call Report Filers Asset Size Distribution 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 2018 4th Quarter 2017 3rd Quarter 2017 1,360 $15,927,968 12,246,999 205,986,323 1,367 $15,815,205 12,133,126 173,483,932 1,397 $15,675,909 11,947,177 190,609,917 1,423 1,417 $15,459,961 $15,361,609 11,796,323 11,768,346 187,865,984 180,496,035 -4.0 3.7 4.1 14.1 Derivative Contracts by Underlying Risk Exposure Interest rate 155,478,150 Foreign exchange* 41,064,224 Equity 3,466,899 Commodity & other (excluding credit derivatives) 1,631,020 Credit 4,345,494 Total 205,976,568 130,423,041 34,422,180 3,079,607 1,372,891 4,186,122 173,477,207 141,278,946 39,707,400 3,055,705 1,477,532 5,090,240 190,601,362 139,831,983 38,856,459 2,908,473 1,334,384 4,934,591 187,856,881 132,702,523 38,313,393 2,826,463 1,349,981 5,303,594 180,488,143 17.2 7.2 22.7 20.8 -18.1 14.1 173 0 0 0 0 38 21,341 2 0 0 1 12,328 133,404 54,552,457 100,770,774 3,579 6,606,699 34,453,946 260 184,151 3,282,487 50 103,616 1,527,354 1,245 272,666 4,071,582 138,472 61,719,588 144,106,144 Derivative Contracts by Transaction Type Swaps Futures & forwards Purchased options Written options Total 105,094,180 45,497,476 23,840,759 24,973,407 199,405,823 94,523,862 34,407,165 19,163,376 19,677,290 167,771,692 101,820,942 40,132,650 20,398,592 20,908,669 183,260,854 103,004,241 39,846,961 19,127,368 18,608,635 180,587,205 99,182,539 39,862,946 16,939,463 17,046,726 173,031,675 6.0 14.1 40.7 46.5 15.2 17 12 0 8 38 6,545 2,794 264 2,723 12,326 78,335 33,150 13,051 12,586 137,122 51,499 27,846 6,582 -867 33,701 -34,976 49,031 10,372 -7,514 -829 33,170 -34,547 52,123 13,938 -5,742 -1,390 34,840 -37,666 68,960 -430 -4,898 -1,300 31,164 -31,788 65,746 1,613 -4,921 118 24,958 -24,932 -21.7 1,626.3 N/M N/M 35.0 N/M 0 0 0 0 0 0 105 0 0 0 -1 0 1,155 -26 2 0 -2 -32 95,439,463 40,334,499 23,687,736 29,696,500 5,021,957 2,630,013 2,747,190 843,259 139,432 72,590,569 36,154,531 23,565,841 24,379,652 4,805,216 2,525,329 2,295,686 732,909 113,150 72,171,780 43,431,393 27,041,460 28,385,819 4,987,149 2,574,435 2,159,633 780,834 119,191 65,977,189 48,374,437 29,634,366 27,411,021 4,813,394 2,496,193 2,236,176 730,676 116,759 61,931,290 46,450,818 29,973,243 27,320,407 4,772,294 2,429,269 2,197,689 720,348 124,404 54.1 -13.2 -21.0 8.7 5.2 8.3 25.0 17.1 12.1 22 26 20 0 0 0 0 0 0 4,816 2,280 6,532 90 340 0 0 0 0 2,314,371 2,862,714 527,870 2,172,996 2,814,096 312,753 2,542,161 3,173,395 524,420 2,544,432 3,069,752 311,157 2,722,501 3,054,143 487,184 -15.0 -6.3 8.4 0 0 0 4 1 26 38 295 316 63,023 176,370 37,660 2,251,305 2,686,047 489,868 25.5 41.3 23.3 38.5 24.2 45.1 24.6 46.9 24.2 48.1 0.1 0.1 0.5 0.4 1.2 0.8 14.3 19.4 39.3 66.7 66.7 61.9 69.3 71.4 72.3 0.2 0.9 2.0 33.7 106.1 -1.1 11.4 1.2 9.9 1.2 -191.7 0.0 0.0 0.2 -0.4 -0.9 199 12,561,019 9,624,399 201 12,486,011 9,558,217 200 12,403,492 9,421,994 205 12,228,056 9,306,454 201 12,124,176 9,265,757 -1.0 3.6 3.9 2 169 153 36 18,125 15,048 89 295,591 234,269 64 3,752,979 2,940,377 8 8,494,155 6,434,552 137,316,308 130,188,927 36,002,239 35,648,745 2,893,124 2,810,971 1,306,894 1,321,931 177,518,566 169,970,575 17.7 7.6 22.7 21.2 15.7 3 0 0 0 3 736 1 0 0 737 -31.5 71.9 102.3 20.8 15.0 0 0 0 0 0 0 0 0 0 0 8 5 12 0 25 345 389 21 182 937 2,296 2,501 1,832 607 7,235 0.0 0.0 0.0 0.0 0.7 2.9 2.2 8.6 7.1 27.3 239 388 117,081 1,208,650 97,576 964,106 111 5,359,094 4,131,752 9 8,788,985 6,686,150 545,070 35,354 12,446 27,141 620,011 1,547,521 449,880 4,169 1,213 2,002,784 (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 Derivative Contracts by Underlying Risk Exposure Interest rate 153,264,480 Foreign exchange 38,353,254 Equity 3,450,109 Commodity & other 1,602,648 Total 196,670,491 Trading Revenues: Cash & Derivative Instruments Interest rate** Foreign exchange** Equity** Commodity & other (including credit derivatives)** Total trading revenues** 128,187,734 138,893,663 32,402,444 36,960,571 3,063,576 3,040,023 1,343,837 1,450,053 164,997,591 180,344,309 2nd Quarter 2017 % 1st Change Quarter 17Q1 2017 18Q1 46 766 424 115 9 $3,331 $332,335 $1,293,603 $5,509,712 $8,788,985 2,791 275,640 1,032,280 4,250,137 6,686,150 179 21,875 138,538 61,719,588 144,106,144 2,648 2,894 1,865 789 8,197 2,237 1,795 989 13 5,035 2,917 1,540 1,183 754 6,394 4,521 681 1,122 314 6,637 3,866 1,684 922 653 7,126 Share of Revenue Trading revenues to gross revenues (%)** Trading revenues to net operating revenues (%)** 5.5 21.4 3.6 31.3 4.6 19.9 4.8 20.5 5.4 24.2 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives 757 15,474,554 11,880,222 783 15,370,172 11,775,177 801 15,239,665 11,593,623 821 15,029,964 11,445,122 830 14,906,732 11,394,184 -8.8 3.8 4.3 10 743 638 Derivative Contracts by Underlying Risk Exposure Interest rate Foreign exchange Equity Commodity & other Total notional amount 2,204,451 485,719 16,790 28,371 2,735,331 2,228,673 500,344 16,031 29,054 2,774,101 2,376,823 496,561 15,682 27,479 2,916,545 2,506,666 519,135 15,349 27,490 3,068,640 2,505,787 511,772 15,492 28,049 3,061,100 -12.0 -5.1 8.4 1.1 -10.6 35 0 0 0 35 11,589 0 0 0 11,589 28,749,450 76,259,833 10,917,744 34,543,776 10,565,665 13,261,779 11,056,543 13,901,546 61,289,402 137,966,934 8,818 5,004 -19 130 1,364 -1,475 41,420 22,868 6,599 -997 32,340 -33,469 32,279 28,207,444 34,293 8,409,525 49,455 6,767,744 1,949 4,807,556 940 836,849 119 674,748 100 62,619 64 41,517 0 6,363 67,194,902 31,888,375 16,863,985 24,886,905 4,183,828 1,955,146 2,684,471 801,679 133,069 33,102 54,007,387 99,223,253 2,989 6,413,826 31,936,439 86 171,705 3,278,318 33 76,474 1,526,141 36,209 60,669,391 135,964,150 100,236 486 174 17 100,913 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 2018 4th Quarter 2017 3rd Quarter 2017 2nd Quarter 2017 64 67 66 68 % Less 1st Change Than Quarter 17Q1$100 2017 18Q1 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 Billion 32 7 67 -4.5 0 6 19 $569,744 $590,211 $606,755 $620,524 $634,480 18 20 21 22 24 4,781 4,553 16,114 17,306 16,406 8,221 9,770 10,494 11,566 12,158 2,914 3,052 3,610 3,778 3,955 381 380 316 309 312 62,410 60,869 55,105 54,266 56,669 648,470 668,855 692,414 707,771 724,004 -10.2 -25.0 -70.9 -32.4 -26.3 22.1 10.1 -10.4 $0 0 0 0 0 0 0 0 $1,935 0 0 0 0 0 9 1,945 $13,924 0 0 1,332 0 0 9,162 24,418 $85,436 $468,448 18 0 4,752 29 6,889 0 1,905 1,009 0 381 1,545 51,694 100,546 521,561 1,527 0 392 164 88 0 1,194 3,365 1,716 0 353 147 86 0 1,131 3,431 1,718 0 1,405 161 87 0 908 4,279 1,750 0 1,508 183 96 0 874 4,410 1,906 0 1,443 125 100 0 875 4,448 -19.9 0.0 -72.8 31.2 -12.0 0.0 36.5 -24.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 26 0 0 13 0 0 142 180 1,097 0 392 151 0 0 0 1,640 405 0 0 0 88 0 1,052 1,545 143 215 246 172 142 0.7 0 0 0 21 122 3.2 9.5 0.3 1.6 4.5 0.0 0.3 2.9 4.7 9.7 0.3 2.1 4.7 0.0 0.5 4.2 4.3 6.0 0.4 1.6 4.2 0.0 0.7 3.9 3.4 8.2 0.4 1.4 4.1 0.0 1.3 3.1 3.0 5.6 0.4 1.2 4.0 0.0 1.0 2.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.4 0.0 0.0 0.0 0.0 0.0 0.0 1.4 1.3 0.0 0.0 3.2 0.0 0.0 0.1 0.9 3.0 9.5 0.3 1.3 2.5 0.0 0.0 2.7 3.3 0.0 0.0 0.0 8.2 0.0 0.3 3.0 1.5 44.1 0.2 0.3 4.3 0.0 1.3 1.4 1.6 45.7 0.2 0.4 4.6 0.0 1.2 1.5 1.3 47.1 0.3 0.3 4.3 0.0 1.3 1.3 1.3 47.4 0.3 0.3 4.0 0.0 1.4 1.3 1.4 47.8 0.3 0.3 4.1 0.0 1.6 1.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.9 1.3 0.0 0.0 0.5 0.0 0.0 0.4 0.9 2.4 44.1 0.2 0.3 1.0 0.0 0.0 2.1 1.3 0.0 0.0 0.0 10.7 0.0 1.4 1.3 -0.1 4.9 0.3 0.4 0.3 0.0 0.0 -0.1 0.2 11.7 1.2 1.2 1.5 0.0 1.7 0.4 0.2 8.7 1.3 0.8 1.0 0.0 1.3 0.3 0.1 6.0 0.8 0.5 0.6 0.0 0.7 0.2 0.1 2.6 0.4 0.2 0.4 0.0 0.5 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 0.9 0.0 0.0 0.0 0.1 0.0 4.9 0.3 0.3 0.2 0.0 0.0 0.0 -0.1 0.0 3.5 0.0 0.5 0.0 0.0 -0.1 0 1,730 426 0 2,460 463 0 8,171 401 0 7,260 334 0 8,080 365 0.0 -78.6 16.7 0 0 0 0 0 0 0 0 0 0 1,730 0 0 0 426 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 476 521 524 548 579 -17.8 14 204 197 53 8 24,578 478 143 102,630 127,830 180,742 504 154 101,529 282,929 26,404 523 190 97,455 124,572 26,211 543 188 95,098 122,040 25,919 564 230 93,140 119,853 -5.2 -15.2 -37.8 10.2 6.7 168 0 0 0 168 5,397 0 2 17 5,416 10,999 27 39 126 11,190 5,452 17 72 33,341 38,881 2,562 434 31 69,147 72,174 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 8,033 150 80 28,449 36,712 162,216 152 93 28,110 190,570 7,895 151 116 27,057 35,219 7,932 152 133 26,299 34,516 7,655 153 175 25,918 33,902 4.9 -2.0 -54.3 9.8 8.3 54 0 0 0 54 777 0 2 17 796 3,708 27 6 33 3,774 2,173 3 72 9,682 11,930 1,320 120 0 18,718 20,158 Support for Securitization Facilities Sponsored by Other Institutions Number of institutions reporting securitization facilities sponsored by others Total credit exposure Total unused liquidity commitments 50 29,694 1,149 53 32,255 1,260 54 34,350 1,298 56 35,012 1,150 63 35,130 1,118 -20.6 -15.5 2.8 1 0 0 13 30 11 18 131 0 12 1,612 323 6 27,920 815 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 (%)*** 6,010,536 5,994,390 5,928,869 5,946,667 5,944,659 1.1 4,600 187,542 15,554 16,909 16,618 16,698 17,521 -11.2 0 0 287,062 1,328,023 4,203,310 0 0 15,554 29,497 3,652 151 4.2 26,928 2,352 131 13.9 27,458 2,306 395 4.6 28,342 2,167 472 4.6 25,784 2,829 363 4.7 14.4 29.1 -58.4 0 9 0 0.5 0 251 3 0.7 4 250 15 2.3 2,107 1,351 74 2.6 27,387 1,791 58 6.7 * 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 as such in the current quarter, adjusted for mergers. In contrast, prior-quarter performance ratios are based on community banks designated during the previous quarter. Net Income Rises 17.7 Percent Annually on Higher Net Interest Income and Lower Income Tax Expenses Community Banks Grow Loan and Leases 7.4 Percent Over 12 Months Net Interest Margin Widens to 3.64 Percent From a Year Earlier Noncurrent Loan Rate Declines 15 Basis Points Year-Over-Year More Than 70 Percent of Community Banks Report Higher Quarterly Earnings Net income of $6.1 billion was up $913.1 million (17.7 percent) compared with first quarter 2017, on higher net interest income and lower income tax expenses, offsetting increases in both noninterest expense and loan loss provisions. Excluding the effect of a lower corporate tax rate, estimated quarterly net income would have been $5.6 billion—up 9.2 percent from the $5.1 billion reported in first quarter 2017.1 More than seven out of ten community banks (73 percent) reported higher net income compared with a year earlier. The pretax return on assets held steady at 1.33 percent, up 2 basis points since year-end 2017 and up 1 basis point since first quarter 2017. The number of community banks totaled 5,168, reflecting three new community bank charters and no community bank failures.2 Net Interest Income Rises 9.7 Percent Year-Over-Year Net interest income increased by $1.6 billion (9.7 percent) compared with first quarter 2017. More than four out of five community banks (85.6 percent) reported higher net interest income compared to the year before. Growth in non 1-to-4 family real estate loan income (up $1.1 billion or 14.6 percent) contributed most to this increase.3 The average net interest margin (NIM) at community banks widened 10 basis points to 3.64 percent during the year as the increase in earning asset yields outpaced the increase in funding costs. The average NIM at community banks was 36 basis points higher than that of noncommunity banks, although the two ratios have been converging year-over-year since first quarter 2015. 1 This estimate of net income applies the average quarterly tax rate at community banks between fourth quarter 2011 and third quarter 2017 to income before taxes and discontinued operations. 2 One insured institution had not filed a March 31 Call Report at the time this report was prepared. 3 Non 1-to-4 family real estate loans include construction and development, farmland, multifamily, and nonfarm nonresidential loans. Chart 1 Chart 2 Contributors to the Year-Over-Year Change in Income Quarterly Average Net Interest Margin FDIC-Insured Community Banks Positive Factor $ Billions 2.0 1.5 $0.91 $1.63 $0.15 $0.13 $0.96 Negative Factor -$0.07 -$0.35 Percent 4.5 4.0 3.5 1.0 3.0 0.5 2.5 3.64% 3.32% 2.0 0.0 1.5 -0.5 -1.0 Community Banks Industry 1.0 +18% +10% Net Income Net Interest Income Source: FDIC. +24% +3% +7% Loan Loss Noninterest Noninterest Provisions Income Expense -58% -22% 0.5 Realized Gains on Securities Income Taxes 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: FDIC. FDIC QUARTERLY 15 2018 • Volume 12 • Numb er 2 Noninterest Income Grows 2.9 Percent During the Year Noninterest income rose by $127.6 million (2.9 percent) to $4.5 billion primarily because of growth in other noninterest income, which increased $122.3 million (6.9 percent) during the year.4 Higher noninterest income offset the decline in net gains on loan sales and sales of other assets. More than half of community banks (54.2 percent) reported higher noninterest income during the year. Noninterest Expense Climbs 6.9 Percent From a Year Earlier Noninterest expense increased $963.9 million (6.9 percent) to $15 billion compared with first quarter 2017, driven by an increase in salary and employee benefits of $556.6 million (6.9 percent). The number of full-time equivalent employees increased by 9,003 (2.2 percent) during the year, while average assets per employee rose by 4.4 percent to $5.3 million. Community Bank Loan and Lease Growth Rate Exceeds That of the Industry Loan and lease balances increased by $14.4 billion (0.9 percent) during the quarter to $1.5 trillion. More than half (56.7 percent) of community banks reported higher loan and lease balances compared with the previous quarter. Quarterly loan growth was led by the following categories: nonfarm nonresidential loans, up $8.7 billion or 1.9 percent; multi family residential loans, up $2.9 billion or 2.5 percent; and commercial and industrial (C&I) loans, up $2.3 billion or 1.1 percent. Loan and lease balances rose by $107.3 billion (7.4 percent) during the year, reflecting a growth rate that was 3 percentage points higher than that of noncommunity banks. Nearly 80 percent of community banks reported higher loan balances compared with one year earlier. Annual loan growth was led by the following loan categories: nonfarm nonresidential loans, up $38.9 billion or 9.2 percent; 1-to-4 family residential loans, up $20.5 billion or 4.9 percent; C&I loans, up $14.1 billion or 7.4 percent; multifamily residential loans, up $11.3 billion or 10.7 percent; and construction and development (C&D) loans, up $10.9 billion or 11.4 percent. Unused loan commitments of $297.4 billion were up $24.1 billion (8.8 percent) from the year before. Commitments to lend against commercial real estate properties—including C&D properties—increased by $9.9 billion (12.8 percent) during the year. Loan and lease balances at community banks represented 70.3 percent of total assets, a ratio nearly 15 percentage points higher than that of noncommunity banks. 4 Other noninterest income includes items that are greater than $100,000 and exceed 3 percent of all other noninterest income reported. These items 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 Noncurrent Loan Rates for FDIC-Insured Community Banks Change in Loan Balances and Unused Commitments FDIC-Insured Community Banks Change 1Q 2018 vs. 1Q 2017 Change 1Q 2018 vs. 4Q 2017 $ Billions 38.9 Percent of Loan Portfolio Noncurrent 14 1-to-4 Family RE C&D Loans C&I Loans Credit Cards Nonfarm Nonresidential RE Farm Loans 12 10 19.2 8 14.1 10.8 8.7 2.3 Nonfarm Nonresidential RE Source: FDIC. C&I Loans 2.3 1-to-4 Family Residential RE Loan Balances 16 FDIC QUARTERLY 6 9.9 1.2 C&D Loans 5.9 1.2 0.8 -2.9 Agricultural Production Loans CRE & C&D 2.2 C&I Loans Unused Commitments 4 2 0 2010 2011 Source: FDIC. 2012 2013 2014 2015 2016 2017 2018 QUARTERLY BANKING PROFILE Noncurrent Loan Balances Decline More than three out of five (61 percent) community banks reported lower or unchanged noncurrent loan balances compared with the previous quarter. Total noncurrent loan and lease balances declined by $25.6 million (0.2 percent), leading to a slight decline in the noncurrent rate of 1 basis point to 0.85 percent—36 basis points below that of noncommunity banks. The noncurrent rate for all major loan categories—except nonfarm nonresidential loans—declined compared with the previous quarter. The noncurrent rate for nonfarm nonresidential loans increased 1 basis point to 0.73 percent, while the past-due rate (loans 30 to 89 days past due) for nonfarm nonresidential loans increased 9 basis points to 0.40 percent. Noncurrent rates for C&I and C&D loans improved the most among major loan categories—decreasing by 7 basis points each. The noncurrent rate for farm loans increased 21 basis points during the quarter to 1.09 percent due to increases in the noncurrent rates for farmland loans (up 20 basis points to 1.28 percent) and agricultural production loans (up 18 basis points to 0.79 percent). Net Charge-Off Rate Increases Slightly From a Year Earlier Compared with first quarter 2017, the net charge-off rate for community banks increased 2 basis points to 0.13 percent, but was well below the net charge-off rate of noncommunity banks. The net charge-off rate on all major loan categories—except C&I—declined or remained unchanged from a year earlier. The net-charge off rate on C&I loans increased 21 basis points to 0.48 percent compared with first quarter 2017. Regulatory Capital Ratios Grow During the Quarter Equity capital totaled $243.8 billion, up $1.7 billion (0.7 percent) compared with fourth quarter 2017. However, net unrealized losses on available-for-sale securities increased by $4.5 billion to $5.6 billion and contributed to a decline in the total equity capital ratio of 4 basis points. The following regulatory capital ratios increased in the first quarter: the tier 1 risk-based capital ratio, up 13 basis points to 14.71 percent; the total risk-based capital ratio, up 12 basis points to 15.77 percent; and the leverage capital ratio, up 10 basis points to 10.90 percent. The first quarter 2018 leverage capital ratio represents a 30-year high for community banks. Author: Erica Jill Tholmer Senior Financial Analyst Division of Insurance and Research (202) 898-3935 FDIC QUARTERLY 17 2018 • Volume 12 • 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 (%) 2018* 2017* 2017 2016 2015 2014 2013 1.11 10.00 10.90 0.77 0.13 -0.66 3.64 10.29 5,168 4.06 1.01 9.13 10.73 0.91 0.11 4.11 3.54 8.74 5,401 4.55 0.96 8.66 10.80 0.78 0.16 0.85 3.62 -0.03 5,227 5.70 0.99 8.81 10.69 0.94 0.16 2.97 3.57 2.42 5,461 4.65 0.99 8.85 10.67 1.07 0.15 2.71 3.57 9.54 5,735 5.02 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 * Through March 31, ratios annualized where appropriate. Asset growth rates are for 12 months ending March 31. TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks 1st Quarter 2018 4th Quarter 2017 1st Quarter 2017 %Change 17Q1-18Q1 5,168 411,542 5,227 416,263 5,401 428,773 -4.3 -4.0 $2,200,587 1,196,115 394,000 459,216 105,991 48,308 204,497 61,406 1,923 48,594 38,159 694 1,548,077 18,140 1,529,937 405,387 3,777 14,021 247,465 $2,201,581 1,195,000 395,474 457,040 106,797 49,746 204,836 61,879 2,038 51,658 38,905 698 1,551,581 18,079 1,533,502 408,787 3,915 13,535 241,842 $2,215,225 1,179,830 394,914 451,608 102,530 50,024 203,605 60,636 2,109 48,373 38,308 667 1,530,084 18,843 1,511,241 432,396 4,782 14,719 252,087 -0.7 1.4 -0.2 1.7 3.4 -3.4 0.4 1.3 -8.8 0.5 -0.4 4.1 1.2 -3.7 1.2 -6.2 -21.0 -4.7 -1.8 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 2,200,587 1,812,310 1,811,520 789 92,583 1,335,694 128,275 630 15,462 243,910 243,796 2,201,581 1,804,510 1,804,020 490 90,765 1,328,244 135,383 865 15,856 244,967 244,844 2,215,225 1,823,141 1,822,690 451 84,733 1,354,785 129,364 767 16,276 245,677 245,552 -0.7 -0.6 -0.6 74.9 9.3 -1.4 -0.8 -17.8 -5.0 -0.7 -0.7 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 8,962 13,172 6,607 174,030 2,056,721 106,075 297,365 286,832 19,462 69,529 8,366 13,275 7,005 173,570 2,052,645 111,179 290,991 331,171 24,076 66,616 8,950 15,287 7,796 186,602 2,064,421 102,227 292,422 262,935 21,535 64,134 0.1 -13.8 -15.3 -6.7 -0.4 3.8 1.7 9.1 -9.6 8.4 (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. 18 FDIC QUARTERLY Full Year 2017 Full Year 2016 %Change 1st Quarter 2018 1st Quarter 2017 %Change 17Q1-18Q1 $82,221 10,321 71,900 3,139 18,690 59,094 351 8,146 2 20,563 20,540 2,394 9,950 10,590 20,294 $79,190 9,133 70,057 3,277 19,937 59,983 638 6,566 -9 20,797 20,774 2,256 10,213 10,561 20,301 3.8 13.0 2.6 -4.2 -6.3 -1.5 -45.1 24.1 N/M -1.1 -1.1 6.1 -2.6 0.3 0.0 $21,563 3,036 18,528 804 4,497 14,992 52 1,221 2 6,061 6,058 489 2,439 3,619 6,016 $20,531 2,433 18,098 685 4,802 15,080 128 1,720 7 5,550 5,545 413 2,593 2,952 5,455 5.0 24.8 2.4 17.4 -6.3 -0.6 -59.3 -29.0 N/M 9.2 9.2 18.3 -6.0 22.6 10.3 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 2018 4th Quarter 2017 1st Quarter 2017 %Change 17Q1-18Q1 5,168 411,542 5,165 409,786 5,162 402,539 0.1 2.2 $2,200,587 1,196,115 394,000 459,216 105,991 48,308 204,497 61,406 1,923 48,594 38,159 694 1,548,077 18,140 1,529,937 405,387 3,777 14,021 247,465 $2,176,109 1,180,843 391,706 450,518 104,750 48,813 202,207 61,422 2,022 51,480 38,387 694 1,533,645 17,907 1,515,738 405,284 3,877 13,135 238,075 $2,090,201 1,110,036 374,806 420,364 95,160 46,969 190,430 58,390 2,000 47,797 34,769 646 1,440,777 17,633 1,423,144 411,640 4,598 12,193 238,626 5.3 7.8 5.1 9.2 11.4 2.9 7.4 5.2 -3.8 1.7 9.7 7.5 7.4 2.9 7.5 -1.5 -17.9 15.0 3.7 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 2,200,587 1,812,310 1,811,520 789 92,583 1,335,694 128,275 630 15,462 243,910 243,796 2,176,109 1,784,519 1,784,029 490 88,785 1,315,282 133,096 618 15,645 242,231 242,119 2,090,201 1,725,829 1,725,378 451 79,813 1,289,778 117,465 582 15,268 231,056 230,950 5.3 5.0 5.0 74.9 16.0 3.6 9.2 8.2 1.3 5.6 5.6 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 8,962 13,172 6,607 174,030 2,056,721 106,075 297,365 286,832 19,462 69,529 8,340 13,197 6,942 171,960 2,029,328 109,030 286,028 329,637 24,076 64,570 8,594 14,134 7,479 174,433 1,949,553 93,781 273,316 263,395 21,535 57,844 4.3 -6.8 -11.7 -0.2 5.5 13.1 8.8 8.9 -9.6 20.2 (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. Full Year 2017 Full Year 2016 %Change 1st Quarter 2018 1st Quarter 2017 %Change 17Q1-18Q1 $80,928 10,163 70,765 3,114 18,137 57,890 343 7,992 2 20,251 20,233 2,364 9,663 10,570 19,988 $73,563 8,511 65,052 2,841 18,095 55,608 593 5,818 -9 19,464 19,447 2,150 9,241 10,206 19,001 10.0 19.4 8.8 9.6 0.2 4.1 -42.2 37.4 N/M 4.0 4.0 9.9 4.6 3.6 5.2 $21,563 3,036 18,528 804 4,497 14,992 52 1,221 2 6,061 6,058 489 2,439 3,619 6,016 $19,150 2,255 16,895 650 4,369 14,029 124 1,569 7 5,148 5,144 380 2,348 2,797 5,057 12.6 34.6 9.7 23.7 2.9 6.9 -57.7 -22.2 N/M 17.7 17.7 28.6 3.9 29.4 19.0 N/M - Not Meaningful FDIC QUARTERLY 19 2018 • Volume 12 • Numb er 2 TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks First Quarter 2018 (dollar figures in millions) Geographic Regions* All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco 5,168 411,542 593 84,938 601 46,984 1,139 86,655 1,372 69,803 1,138 90,480 325 32,682 $2,200,587 1,196,115 394,000 459,216 105,991 48,308 204,497 61,406 1,923 48,594 38,159 694 1,548,077 18,140 1,529,937 405,387 3,777 14,021 247,465 $603,592 377,303 138,024 133,966 24,578 16,179 49,920 14,934 423 583 11,614 168 454,185 4,584 449,602 94,419 651 4,647 54,273 $226,658 123,622 39,146 53,428 13,868 6,673 18,567 6,720 153 1,222 3,129 101 153,160 1,797 151,363 42,559 851 1,067 30,818 $398,208 208,190 71,907 76,385 15,041 10,745 40,325 12,110 373 8,029 7,260 54 275,861 3,245 272,616 79,265 651 2,586 43,091 $348,879 168,679 51,421 56,653 14,519 5,081 35,370 10,297 551 27,312 5,843 95 247,406 3,295 244,111 63,945 613 1,986 38,225 $424,022 209,118 66,466 86,336 29,010 4,845 41,563 12,812 225 8,822 7,019 130 279,203 3,449 275,754 89,864 807 2,684 54,913 $199,228 109,203 27,037 52,449 8,975 4,786 18,754 4,531 198 2,626 3,295 147 138,262 1,771 136,492 35,335 204 1,051 26,146 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 2,200,587 1,812,310 1,811,520 789 92,583 1,335,694 128,275 630 15,462 243,910 243,796 603,592 478,264 477,542 722 30,295 339,352 51,578 508 5,519 67,723 67,654 226,658 190,389 190,389 0 7,182 142,322 10,347 10 1,450 24,461 24,457 398,208 329,717 329,677 40 17,141 260,494 21,623 45 2,591 44,231 44,212 348,879 290,147 290,147 0 15,823 226,314 18,417 10 1,836 38,470 38,469 424,022 358,258 358,258 0 12,858 256,672 16,730 42 2,458 46,534 46,512 199,228 165,534 165,507 27 9,284 110,540 9,580 15 1,607 22,491 22,491 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 8,962 13,172 6,607 174,030 2,056,721 106,075 297,365 286,832 19,462 69,529 2,253 4,233 2,050 53,334 567,028 46,161 79,136 63,471 7,259 29,404 997 1,381 761 18,201 209,882 8,566 26,958 9,091 74 6,195 1,531 2,420 1,571 30,498 371,825 17,050 56,105 73,183 7,923 14,894 1,605 1,957 908 20,671 326,435 13,939 51,400 88,677 2,651 9,036 2,052 2,475 903 34,101 394,097 13,110 53,350 44,071 781 7,203 524 706 413 17,225 187,455 7,249 30,415 8,340 774 2,797 $21,563 3,036 18,528 804 4,497 14,992 52 1,221 2 6,061 6,058 489 2,439 3,619 6,016 $5,652 986 4,666 323 928 3,699 39 347 0 1,265 1,263 235 245 1,018 1,232 $2,251 284 1,966 62 451 1,666 6 121 0 576 576 33 220 355 571 $3,829 527 3,303 95 1,148 2,929 3 258 0 1,171 1,169 41 633 537 1,169 $3,467 499 2,968 113 710 2,343 -4 146 0 1,073 1,073 57 595 478 1,076 $4,300 523 3,777 141 931 3,027 2 183 0 1,357 1,357 95 550 808 1,356 $2,065 217 1,848 70 328 1,329 7 166 1 620 620 29 196 424 612 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 explanation. ** See Notes to Users for explanation. 20 FDIC QUARTERLY QUARTERLY BANKING PROFILE Table IV-B. First Quarter 2018, 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 2018 4.23 0.60 3.64 0.82 2.75 0.15 1.10 1.33 1.11 10.00 0.13 164.44 64.81 80.47 4.06 73.34 4th Quarter 2017 4.22 0.56 3.66 0.88 2.83 0.16 0.75 1.31 0.75 6.70 0.22 102.77 65.37 79.58 16.53 46.13 First Quarter 2018, Geographic Regions* New York 4.04 0.70 3.34 0.62 2.48 0.22 0.83 1.08 0.85 7.57 0.21 137.55 65.83 83.40 5.40 77.57 Atlanta 4.32 0.55 3.78 0.80 2.96 0.11 1.01 1.24 1.02 9.42 0.09 188.42 68.59 81.33 5.66 75.21 New York 3.95 0.62 3.33 0.66 2.48 0.20 0.67 1.14 0.70 6.26 0.20 133.24 65.01 82.63 7.99 50.25 Atlanta 4.23 0.49 3.73 0.91 3.01 0.11 0.79 1.24 0.80 7.26 0.13 129.29 68.66 79.16 9.97 52.78 Chicago 4.14 0.57 3.57 1.16 2.95 0.10 1.18 1.44 1.18 10.59 0.06 233.75 65.47 74.20 4.57 69.97 Kansas City 4.27 0.62 3.66 0.82 2.69 0.13 1.24 1.40 1.23 11.16 0.09 198.53 63.30 80.70 2.92 71.57 Dallas 4.40 0.54 3.87 0.88 2.88 0.13 1.29 1.46 1.29 11.72 0.14 149.37 64.05 80.23 3.16 73.73 San Francisco 4.44 0.47 3.97 0.66 2.69 0.14 1.24 1.59 1.25 11.13 0.08 240.32 60.84 84.92 4.92 80.00 Dallas 4.32 0.46 3.87 0.92 2.93 0.17 1.13 1.41 1.14 10.33 0.22 120.67 64.77 79.66 4.33 58.18 San Francisco 4.26 0.40 3.86 0.73 2.72 0.08 1.01 1.57 1.02 9.07 0.05 223.32 62.12 83.16 6.69 59.27 Table V-B. Full Year 2017, 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 2017 4.14 0.52 3.62 0.88 2.77 0.15 0.95 1.35 0.96 8.66 0.16 131.14 64.85 79.37 5.70 55.37 Full Year 2016 4.04 0.47 3.57 0.95 2.85 0.16 0.96 1.30 0.99 8.81 0.16 145.31 66.13 77.85 4.65 64.24 Full Year 2017, Geographic Regions* Chicago 4.05 0.49 3.56 1.23 2.96 0.10 1.09 1.48 1.09 9.76 0.13 114.73 64.87 72.97 6.03 55.81 Kansas City 4.20 0.54 3.67 0.86 2.74 0.15 1.13 1.40 1.13 10.20 0.15 142.38 63.54 79.85 3.47 55.09 * See Table V-A for explanation. FDIC QUARTERLY 21 2018 • Volume 12 • Numb er 2 Table VI-B. Loan Performance, FDIC-Insured Community Banks Geographic Regions* March 31, 2018 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 0.40 0.16 0.43 0.78 0.51 1.29 2.30 1.26 0.81 0.58 0.47 0.56 0.42 0.16 0.50 0.64 0.39 1.55 3.46 1.50 0.35 0.50 0.63 0.53 0.37 0.11 0.49 1.06 0.55 1.43 1.24 1.43 0.34 0.65 0.56 0.27 0.39 0.27 0.39 0.86 0.41 0.82 1.14 0.81 0.70 0.55 0.55 0.42 0.38 0.17 0.29 0.68 0.57 0.89 3.28 0.75 1.17 0.65 0.69 0.52 0.52 0.12 0.52 1.06 0.64 1.87 1.16 1.88 0.66 0.73 0.30 0.49 0.22 0.02 0.31 0.43 0.61 0.81 1.40 0.78 0.83 0.38 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 0.83 0.77 0.73 0.22 0.54 1.09 1.07 0.66 1.10 0.64 0.74 0.85 0.93 0.69 0.84 0.18 0.62 1.37 1.18 0.59 0.70 0.59 0.33 0.93 0.95 1.36 0.78 0.40 0.58 1.15 0.75 0.73 0.72 0.73 0.44 0.90 0.91 0.81 0.85 0.37 0.56 1.08 0.94 0.34 1.15 0.31 0.71 0.88 0.74 0.82 0.72 0.22 0.25 0.60 1.01 0.44 1.69 0.37 0.92 0.79 0.78 0.53 0.66 0.33 0.55 1.02 1.36 1.29 0.60 1.30 0.77 0.89 0.45 0.67 0.32 0.08 0.49 0.66 0.79 0.34 1.05 0.30 0.83 0.51 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 0.02 -0.03 0.02 0.00 0.02 0.02 0.48 1.05 7.06 0.85 0.15 0.13 0.04 0.02 0.04 0.00 0.06 0.04 1.31 0.88 4.51 0.77 0.12 0.21 0.00 -0.08 0.00 -0.01 0.02 0.03 0.36 0.88 1.75 0.86 0.14 0.09 0.01 -0.10 0.02 -0.03 0.01 0.03 0.15 0.56 3.03 0.47 0.14 0.06 0.01 -0.04 0.02 0.04 -0.04 0.03 0.11 1.22 16.98 0.31 0.11 0.09 0.02 0.03 0.02 0.01 0.00 0.02 0.34 1.22 1.81 1.21 0.21 0.14 -0.03 -0.10 0.00 0.00 -0.05 -0.07 0.15 2.23 2.55 2.21 0.29 0.08 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 $1,196.1 106.0 459.2 116.8 48.3 394.0 204.5 61.4 1.9 59.5 86.8 1,548.8 $377.3 24.6 134.0 62.2 16.2 138.0 49.9 14.9 0.4 14.5 12.2 454.4 $123.6 13.9 53.4 6.2 6.7 39.1 18.6 6.7 0.2 6.6 4.4 153.3 $208.2 15.0 76.4 17.3 10.7 71.9 40.3 12.1 0.4 11.7 15.3 275.9 $168.7 14.5 56.7 9.6 5.1 51.4 35.4 10.3 0.6 9.7 33.2 247.5 $209.1 29.0 86.3 8.9 4.8 66.5 41.6 12.8 0.2 12.6 15.8 279.3 $109.2 9.0 52.4 12.5 4.8 27.0 18.8 4.5 0.2 4.3 5.9 138.4 Memo: Unfunded Commitments (in millions) Total Unfunded Commitments Construction and development: 1-4 family residential Construction and development: CRE and other Commercial and industrial 297,365 24,515 61,486 92,545 79,136 5,036 19,338 24,288 26,958 3,344 6,126 7,228 56,105 2,967 10,490 19,357 51,400 3,091 7,594 15,364 53,350 7,164 12,800 16,389 30,415 2,913 5,138 9,919 * See Table V-A for explanation. ** 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 $2.3 Billion Estimated Insured Deposits Grow by 2.6 Percent DIF Reserve Ratio Is Unchanged at 1.30 Percent The Deposit Insurance Fund (DIF) balance increased by $2.3 billion, to $95.1 billion, during the first quarter. Assessment income of $2.9 billion, which includes temporary assessment surcharges on large banks, was the main driver of the fund balance increase. Interest on investments of $338 million and a negative provision for insurance losses of $65 million also added to the fund. Operating expenses of $433 million and unrealized losses on availablefor-sale securities of $496 million partially offset the increase in the fund balance. No banks failed during the quarter. The deposit insurance assessment base—average consolidated total assets minus average tangible equity—increased by 0.4 percent in the first quarter and by 3.1 percent over 12 months.1,2 Total estimated insured deposits increased by 2.6 percent in the first quarter of 2018 and by 3.7 percent year-over-year. The DIF’s reserve ratio (the fund balance as a percent of estimated insured deposits) was 1.30 percent on March 31, 2018, unchanged from year-end 2017 due primarily to strong first quarter growth in estimated insured deposits. The reserve ratio increased by ten 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 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 2018 • Volume 12 • Numb er 2 Table I-C. Insurance Fund Balances and Selected Indicators Deposit Insurance Fund* (dollar figures in millions) 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 2nd Quarter 2017 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 Beginning Fund Balance $92,747 $90,506 $87,588 $84,928 $83,162 $80,704 $77,910 $75,120 $72,600 $70,115 $67,589 $65,296 $62,780 2,850 2,656 2,568 2,634 2,737 2,688 2,643 2,328 2,328 2,160 2,170 2,328 2,189 338 305 274 251 227 189 171 164 147 128 122 113 60 0 433 0 443 0 404 0 450 0 442 0 437 0 422 0 441 0 415 0 447 0 410 0 434 0 396 -65 -203 -512 -233 765 -332 -566 -627 -43 -930 -578 -317 -426 1 3 1 4 2 3 3 2 5 12 2 3 6 -496 2,325 -481 2,242 -33 2,918 -12 2,660 7 1,766 -317 2,457 -167 2,794 110 2,790 412 2,520 -298 2,485 64 2,526 -34 2,293 231 2,516 95,072 92,747 90,506 87,588 84,928 83,162 80,704 77,910 75,120 72,600 70,115 67,589 65,296 11.95 11.53 12.14 12.42 13.06 14.55 15.10 15.27 15.05 15.64 29.08 32.37 33.55 1.30 1.30 1.28 1.24 1.20 1.20 1.18 1.17 1.13 1.11 1.09 1.07 1.03 7,334,558 7,150,843 7,094,228 7,042,277 7,075,295 6,910,931 6,813,252 6,672,294 6,659,996 6,519,715 6,406,678 6,333,620 6,333,948 3.66 3.47 4.12 5.55 6.24 6.00 6.35 5.35 5.15 5.23 4.61 3.91 3.70 Changes in Fund Balance: Assessments earned Interest earned on investment securities Realized gain on sale of investments Operating expenses Provision for insurance losses All other income, net of expenses Unrealized gain/(loss) on available-for-sale securities** Total fund balance change Ending Fund Balance Percent change from four quarters earlier Reserve Ratio (%) Estimated Insured Deposits Percent change from four quarters earlier Domestic Deposits Percent change from four quarters earlier 12,305,735 12,129,449 11,966,432 11,827,933 11,856,691 11,693,371 11,506,877 11,242,960 11,156,523 10,952,922 10,698,306 10,632,635 10,618,958 Assessment Base*** Percent change from four quarters earlier 15,067,900 15,001,354 14,834,412 14,703,143 14,620,990 14,563,517 14,383,150 14,194,051 13,994,519 13,833,119 13,662,701 13,589,504 13,533,515 3.79 Number of Institutions Reporting 3.73 3.99 5.20 6.28 6.76 7.56 5.74 4.75 5.28 6.59 3.01 3.14 3.59 4.48 5.28 5.27 4.45 3.41 3.65 4.19 5.33 5.78 5,615 5,679 5,747 5,796 5,865 5,922 5,989 6,067 6,131 6,191 6,279 6,357 6,428 Deposit Insurance Fund Balance and Insured Deposits ($ Millions) Percent of Insured Deposits 3/15 5.21 3.06 DIF Reserve Ratios 1.03 5.06 1.07 1.09 1.11 1.13 6/15 9/15 12/15 3/16 1.17 6/16 1.18 1.20 9/16 12/16 1.20 3/17 1.24 6/17 1.28 1.30 9/17 12/17 1.30 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 12/17 3/18 3/18 DIF Balance DIF-Insured Deposits $65,296 67,589 70,115 72,600 75,120 77,910 80,704 83,162 84,928 87,588 90,506 92,747 95,072 $6,333,948 6,333,620 6,406,678 6,519,715 6,659,996 6,672,294 6,813,252 6,910,931 7,075,295 7,042,277 7,094,228 7,150,843 7,334,558 Table II-C. Problem Institutions and Failed Institutions (dollar figures in millions) 2018**** 2017**** Problem Institutions Number of institutions Total assets 2017 2016 92 $56,445 112 $23,675 95 $13,939 123 $27,624 183 $46,780 291 $86,712 467 $152,687 651 $232,701 Failed Institutions Number of institutions Total assets***** 0 $0 3 $490 8 $5,082 5 $277 8 $6,706 18 $2,914 24 $6,044 51 $11,617 * Quarterly financial statement results are unaudited. ** Includes unrealized postretirement benefit gain (loss). *** 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 2015 2014 2013 2012 QUARTERLY BANKING PROFILE Table III-C. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) March 31, 2018 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 4,880 3,245 867 768 $16,327,788 2,556,412 11,048,021 2,723,355 $11,298,929 2,015,956 7,381,926 1,901,047 $6,522,266 1,390,461 4,099,093 1,032,712 726 336 352 38 1,203,678 772,797 400,745 30,136 957,871 630,520 303,633 23,718 773,675 517,152 237,484 19,039 5,606 17,531,466 12,256,800 7,295,941 9 89,222 48,935 38,617 5,615 17,620,688 12,305,735 7,334,558 * 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, 2017 (dollar figures in billions) Number of Institutions Percent of Total Institutions Amount of Assessment Base** 1.50 - 3.00 3,334 58.71 $2,684.8 17.90 3.01 - 6.00 1,587 27.95 11,331.2 75.53 6.01 - 10.00 584 10.28 817.8 5.45 10.01 - 15.00 68 1.20 134.3 0.89 15.01 - 20.00 91 1.60 14.3 0.10 20.01 - 25.00 8 0.14 5.7 0.04 > 25.00 7 0.12 13.4 0.09 Annual Rate in Basis Points* Percent of Total Assessment Base * 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. Note: Certain row labels in Table I-C were incorrect in the printed version of the Fourth Quarter 2017 Quarterly Banking Profile (as published within the FDIC Quarterly, Volume 12, Number 1). The labels have been corrected in Table I-C and can be obtained on the FDIC website at https://www.fdic.gov/bank/analytical/qbp/2017dec/qbp.pdf. Alternatively, you may request a copy from the FDIC Public Information Center by calling 877-275-3342. FDIC QUARTERLY 25 2018 • Volume 12 • 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 one office, and the maximum number of offices is 40 in 1985 and 26 FDIC QUARTERLY 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 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 institutions, estimated FDIC-insured deposits, as well as assessment rate information. Depository insti- 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 tutions 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 (TFR) 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, which is 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; 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 Financial accounting pronouncements by the Financial Accounting Standards Board (FASB) can result in changes in an individual bank’s accounting policies and in the Call Reports they submit. Such accounting changes can affect the aggregate amounts presented in the QBP for the current period and the period-to-period comparability of such financial data. The current quarter’s Financial Institution Letter (FIL) and related Call Report supplemental instructions can provide additional explanation to the QBP reader beyond any material accounting changes discussed in the QBP analysis. https://www.fdic.gov/news/news/financial/2018/fil18017.html https://www.fdic.gov/news/news/financial/2018/fil18017.pdf https://www.fdic.gov/regulations/resources/call/call.html Further information on changes in financial statement presentation, income recognition and disclosure is available from the FASB. http:// www.fasb.org/jsp/FASB/Page/LandingPage&cid=1175805317350. 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 FDIC QUARTERLY 27 2018 • Volume 12 • Numb er 2 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 28 FDIC QUARTERLY applicable regulatory adjustments and deductions. Items that are fully deducted from common equity Tier 1 capital include goodwill, other intangible assets (excluding mortgage servicing assets) and certain deferred tax assets; items that are subject to limits in common equity Tier 1 capital include mortgage servicing assets, eligible deferred tax assets, and certain significant investments. Construction and development loans – includes loans for all property types under construction, as well as loans for land acquisition and development. Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated subsidiaries, less goodwill and other ineligible intangible assets. The amount of eligible intangibles (including servicing rights) included in core capital is limited in accordance with supervisory capital regulations. Cost of funding earning assets – total interest expense paid on deposits and other borrowed money as a percentage of average earning assets. Credit enhancements – techniques whereby a company attempts to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be associated with a given issuance. Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings Association (SAIF) Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform Act to form the DIF. Derivatives notional amount – the notional, or contractual, amounts of derivatives represent the level of involvement in the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent the amounts used to calculate contractual cash flows to be exchanged. 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. QUARTERLY BANKING PROFILE Derivatives underlying risk exposure – the potential exposure characterized by the level of banks’ concentration in particular underlying instruments, in general. Exposure can result from market risk, credit risk, and operational risk, as well as, interest rate risk. Domestic deposits to total assets – total domestic office deposits as a percent of total assets on a consolidated basis. Earning assets – all loans and other investments that earn interest or dividend income. Efficiency ratio – Noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net operating revenues that are absorbed by overhead expenses, so that a lower value indicates greater efficiency. Estimated insured deposits – in general, insured deposits are total domestic deposits minus estimated uninsured deposits. Beginning March 31, 2008, for institutions that file Call Reports, insured deposits are total assessable deposits minus estimated uninsured deposits. Beginning September 30, 2009, insured deposits include deposits in accounts of $100,000 to $250,000 that are covered by a temporary increase in the FDIC’s standard maximum deposit insurance amount (SMDIA). The Dodd-Frank Wall Street Reform and Consumer Protection Act enacted on July 21, 2010, made permanent the standard maximum deposit insurance amount (SMDIA) of $250,000. Also, the Dodd-Frank Act amended the Federal Deposit Insurance Act to include 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-forsale 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. 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 filed 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. FDIC QUARTERLY 29 2018 • Volume 12 • Numb er 2 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” (reported at amortized cost (book value)), securities designated as “available-for-sale” (reported at fair (market) value), and equity securities with readily determinable fair values not held for trading. 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 30 FDIC QUARTERLY 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. 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 and 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.
@FedFRASER