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Quarterly Banking Profile Fourth Quarter 2010 INSURED INSTITUTION PERFORMANCE ■ ■ ■ ■ ■ Banks Earned $21.7 Billion in Fourth Quarter as Recovery Continues Full-Year Net Income of $87.5 Billion Is Highest Since 2007 Asset Quality Improves for Third Consecutive Quarter Institutions Set Aside Half as Much for Loan Losses as a Year Earlier 157 Insured Institutions Failed during 2010 Fourth Quarter Earnings Contrast Favorably with Year-Earlier Net Loss Provisions Fall to Lowest Level in More than Three Years Lower expenses for troubled loans continued to boost the earnings of insured commercial banks and savings institutions in fourth quarter 2010. The 7,657 institutions filing year-end reports posted quarterly net income of $21.7 billion, a substantial improvement over the $1.8 billion net loss in fourth quarter 2009 and the second-highest quarterly total reported since second quarter 2007. The greatest year-over-year improvement in earnings occurred at the largest banks, but almost two out of every three institutions (62 percent) reported better net income than a year ago. One in four insti tutions reported a net loss in the fourth quarter, an improvement from a year ago when more than one in three (35 percent) were unprofitable. Insured institutions set aside $31.6 billion in provisions for loan losses in the fourth quarter, almost 50 percent less than the $62.9 billion they set aside a year earlier. This is the smallest quarterly loss provision for the industry since third quarter 2007. Much of the yearover-year reduction in provisions was concentrated among some of the largest banks. Seven large institutions accounted for more than half of the $31.3 billion reduction. However, a majority of insured institutions (54 percent) reduced their provisions in the fourth quarter compared to a year ago. Chart 1 Chart 2 The Industry Posted a Fourth Consecutive Profitable Quarter More Than 60 Percent of Institutions Continue to Report Improvement in Earnings Billions of Dollars 60 Percent of Institutions with Year-over-Year Increases in Quarterly Net Income 70 50 40 36.9 38.0 38.0 35.3 35.6 36.8 30 60 28.7 19.3 20 10 0.5 0 17.7 4.8 0.9 -30 -40 24.7 50 21.7 40 2.0 -10 -20 21.3 30 -1.8 -6.5 20 -12.7 Securities and Other Gains/Losses, Net Net Operating Income 10 0 -37.8 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 2008 2009 2006 2007 2010 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 2006 2009 2010 2007 2005 2008 Note to Readers: Amended financial reports resulted in large changes to industry earnings totals for three different quarters. First quarter 2009 net income declined from a previously reported $7.6 billion profit to a $6.5 billion net loss; second quarter 2009 net income declined from a $3.7 billion net loss to a $12.7 billion net loss; and third quarter 2010 net income increased from a $14.5 billion profit to a $24.7 billion profit. Full year 2009 net income declined from a $12.5 billion profit to a $10.6 billion net loss. Most of the revisions resulted from changes in expenses for goodwill impairment at one large institution. FDIC Quarterly 1 2011, Volume 5, No. 1 Revenue Growth Slows Higher Asset Values Contribute to Income Improvement Revenue growth was sluggish in the fourth quarter. Net operating revenue (net interest income plus total noninterest income) was $163.6 billion, only $2.8 billion (1.7 percent) higher than a year earlier and $2.1 billion (1.3 percent) less than in third quarter 2010. This is the second-smallest year-over-year increase in quarterly net operating revenue in the past two years (after the $911 million year-over-year increase in second quarter 2010). Despite the small size of the aggregate increase, revenues were up at almost twothirds of all institutions (62.4 percent). The industry’s bottom line also benefited from improvement in asset values. Gains on sales of loans and other assets totaled $4 billion in the fourth quarter, more than three times the $1.3 billion in gains that sales produced in fourth quarter 2009. Realized gains on securities totaled $2.3 billion, compared to $5 million in realized losses a year earlier. Full-Year Earnings Represent Sharp Improvement from Revised 2009 Loss Full-year 2010 net income totaled $87.5 billion, compared to a revised net loss of $10.6 billion in 2009. This is the highest full-year earnings total for the industry since 2007. More than two out of every three institutions (67.5 percent) reported higher earnings in 2010 than in 2009. The proportion of unprofitable institutions fell from 30.6 percent in 2009 to 21 percent in 2010. This is the first time in six years that the percentage of institutions reporting full-year net losses has declined. The largest factor in the improvement in the industry’s net income was a $92.6 billion (37.1 percent) reduction in loan-loss provisions. The second-largest source of improvement was a $28.7 billion decline in charges for goodwill impairment.2 An additional contribution came from realized gains on securities and other assets, which were $10.8 billion higher. The improvement in full-year earnings was limited by increased income taxes, which were $32.2 billion higher than in 2009. Overall net operating revenue growth was relatively weak in 2010. The $10.8 billion (1.6 percent) increase was the second- Fee Income Declines Among the notable areas of noninterest revenue weakness, service charge income on deposit accounts at banks filing Call Reports was $2.1 billion (20.7 percent) lower than a year earlier. This is the second consecutive quarter that deposit account fees have declined by 20 percent or more from the prior year. Asset servicing income was $2.2 billion (32.3 percent) lower, and securitization income was down by $1.5 billion (90.7 percent). Both declines were primarily the result of changes in accounting rules that affected financial reporting in 2010.1 The new accounting rules also were responsible for much of the $7.5 billion (7.5 percent) year-over-year increase in quarterly net interest income. A majority of institutions (59.8 percent) reported higher net interest margins than a year ago, but fourth quarter margins were lower than third quarter margins at 55 percent of institutions. Amendments to prior financial reports received from one large institution resulted in a $10.4 billion reduction in expenses for goodwill impairment in third quarter 2010 and $20.3 billion in increased expenses for goodwill impairment in the first two quarters of 2009. 2 1 See FASB Statements 166 and 167 in Notes to Users. Chart 3 Chart 4 Margins Shrank Slightly in the Fourth Quarter Lower Loan-Loss Provisions Were a Key Element in Earnings Gains Billions of Dollars 180 160 Quarterly Net Interest Margin (Percent) 4.5 Quarterly Loan-Loss Provision Assets < $1 Billion 140 4.0 120 3.81 100 3.70 3.5 Quarterly Net Operating Revenue* 80 60 40 3.0 20 0 Assets > $1 Billion 2.5 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 2005 2006 2007 2008 2009 2010 *Net operating revenue = net interest income + noninterest income FDIC Quarterly 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 2008 2005 2007 2009 2010 2006 2011, Volume 5, No. 1 Quarterly Banking Profile worst year-over-year change in the past 16 years, after the $20.4 billion decline registered in 2008. Noninterest income from service charges on deposit accounts was $5.5 billion (13.1 percent) lower than in 2009. This is the first time in the 69 years that these data have been collected that full-year service charge income has declined. Insured institutions paid $53.9 billion in dividends in 2010, an increase of $6.7 billion (14.3 percent) over 2009, but less than half the annual record of $110.3 billion paid in 2007. Retained earnings totaled $33.6 billion, marking the first year since 2006 that the industry as a whole has reported internal capital growth. Nonperforming Asset Balances Fall for Third Consecutive Quarter The amount of loan and lease balances that were noncurrent (90 days or more past due or in nonaccrual status) fell for a third consecutive quarter, declining by $17.9 billion (4.7 percent). Noncurrent balances declined in all major loan categories, led by real estate construction loans (down $7.4 billion), C&I loans (down $3.2 billion), multifamily residential real estate loans (down $2.1 billion), and closed-end one-to-four family residential real estate loans (down $2 billion). The industry’s inventory of other real estate owned (primarily property acquired through foreclosure) declined for the first time since fourth quarter 2005, falling by $374 million. At the end of 2010, noncurrent assets and other real estate owned represented 3.11 percent of total industry assets, the lowest share since the end of third quarter 2009. Loan Losses Continue to Decline Across Most Major Categories Net loan and lease charge-offs (NCOs) totaled $41.9 billion in the fourth quarter, a decline of $13 billion (23.7 percent) compared to fourth quarter 2009. With the exception of credit cards (which reflected the application of new accounting rules in 2010), almost all major loan categories posted year-over-year declines in quarterly charge-offs. Real estate construction and development loan charge-offs were $4.2 billion lower, while charge-offs of commercial and industrial (C&I) loans were down by $4 billion. Closed-end one-to-four family residential real estate NCOs were $3.1 billion lower, and home equity line of credit NCOs fell by $1.5 billion. NCOs of nonfarm nonresidential real estate loans were only $101 million higher than a year earlier. Reported credit card NCOs were $2.9 billion higher due to the inclusion in 2010 of NCOs on securitized credit card balances that were not included in prior years. Even with the reporting change, the year-over-year increase in quarterly credit card NCOs was the smallest in two years. On a consecutive-quarter basis, credit card NCOs have fallen in each of the past three quarters. Reserve Balances Shrink as Loss Provisions Trail Net Charge-Offs Reserves for loan and lease losses declined for a third consecutive quarter, falling by $11.1 billion (4.6 percent), as net charge-offs of $41.9 billion exceeded loss provisions of $31.6 billion. Four large banks accounted for more than half of the decline in industry reserves, as more than a third of all institutions (39.4 percent) reduced their loss reserve balances in the fourth quarter. However, owing to the decline in noncurrent loans, the industry’s “coverage ratio” of reserves to noncurrent loans and leases remained essentially unchanged from the previous quarter, at 64.2 percent. More than half of all institutions (52.3 percent) increased their coverage ratios in the fourth quarter, while 39.3 percent reported coverage ratio declines. Chart 5 Chart 6 Full-Year Profitability Increased for the First Time Since 2003 Asset Quality Indicators Show Further Improvement Billions of Dollars Annual ROE (Percent) Annual ROA (Percent) 1.6 100 Quarterly Change in Noncurrent Loans Quarterly Net Charge-Offs 16 ROE 1.4 1.2 12 1.0 10 0.8 80 14 ROA 40 8 0.6 6 0.4 4 0.2 2 0.0 0 -0.2 60 20 0 -20 -2 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 FDIC Quarterly 3 1 2 3 2007 4 1 2 3 2008 4 1 2 3 2009 4 1 2 3 2010 4 2011, Volume 5, No. 1 second consecutive quarterly increase, rising by $11.8 billion (1 percent). Loan balances fell at almost 60 percent of insured institutions in the fourth quarter. Tier 1 Capital Posts Small Increase Equity capital fell by $8.5 billion (0.6 percent) in the fourth quarter, the first quarterly decline since fourth quarter 2008. The drop was caused by a $16.2 billion (71.9 percent) decline in unrealized gains on securities held for sale. In contrast, insured institution Tier 1 leverage capital, which is not affected by changes in securities values, increased by $3.4 billion (0.3 percent). Total regulatory capital declined by $616 million, reflecting the reduction in loan-loss reserves in the fourth quarter. At the end of 2010, almost 96 percent of all insured institutions, representing more than 99 percent of all insured institution assets, met or exceeded the minimum requirements of the highest regulatory capital category, according to the calculations used for purposes of Prompt Corrective Action. Deposit Growth Remains Strong Deposits grew strongly for a second consecutive quarter, rising by $149.3 billion (1.6 percent), after a $132.7 billion (1.5 percent) increase in the third quarter. Noninterest-bearing deposits in domestic offices increased by $81.6 billion (5.1 percent). Nondeposit liabilities fell by $200.4 billion (7.8 percent), as Federal Home Loan Bank advances declined by $15.9 billion (4 percent), other secured borrowings dropped by $64.9 billion (14.3 percent), and liabilities in trading accounts fell by $30.2 billion (9.5 percent). At year end, deposits funded 70.7 percent of total industry assets, the highest proportion since the end of first quarter 1996. Loan Balances Decline at a Majority of Institutions Failures Reached an 18-Year High in 2010 Total assets of insured institutions declined by $51.8 billion (0.4 percent) in the fourth quarter. Assets in trading accounts fell by $43.1 billion (5.6 percent), while total loan and lease balances dropped by $13.6 billion (0.2 percent). The largest reductions in loan portfolios occurred in real estate construction and development loans, where balances fell by $32.5 billion (9.2 percent); non-credit card consumer loans (down $29 billion, or 4.9 percent); and home equity lines of credit, where drawn balances shrank by $11 billion (1.7 percent). Securities portfolios rose by $26.1 billion (1 percent), as institution holdings of mortgage-backed securities increased by $42.7 billion (3 percent). Among loan categories that posted increases during the quarter, credit cards had a seasonal increase of $18.1 billion (2.6 percent); one-to-four family residential mortgage loans increased for the second quarter in a row, rising by $17 billion (0.9 percent); and C&I loans also posted a The number of insured institutions reporting quarterly financial results fell from 7,761 to 7,657 in the fourth quarter. Thirty insured institutions failed during the quarter and an additional 73 were absorbed in mergers. There were three new charters added in the quarter. For all of 2010, mergers absorbed 197 institutions, while 157 insured commercial banks and savings institutions failed. This is the largest annual number of bank failures since 1992, when 181 institutions failed. Only 11 new reporters were added during 2010, the smallest annual total in the FDIC’s 77-year history. The number of institutions on the FDIC’s “Problem List” increased from 860 to 884 in the fourth quarter. Total assets of “problem” institutions increased from $379 billion to $390 billion. Author: Chart 7 Chart 8 Failures and “Problem” Banks Reached Multiyear Highs in 2010 Contraction in Loan Balances Persists Quarterly Change in Reported Total Loans Outstanding (Billions of Dollars) 300 250 200 237.3 200 188.9 180 220.9* 202.6 150 100 50 61.4 43.4 -6.3 -50 45 50 160 Quarterly Failures 140 Net Quarterly Change in Number of Problem Banks 120 28.1 0 -116.2 -200 -108.6 -139.6 -106.9 -133.2 60 1 2 3 2007 4 1 2 3 2008 4 1 2 3 2009 4 1 2 3 2010 4 20 *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 0 4 21 9 40 -210.3 41 12 80 -150 24 100 -6.6 -13.6 -100 -250 Ross Waldrop, Sr. Banking Analyst Division of Insurance and Research (202) 898-3951 2 1 3 1 0 8 1 4 2 3 2007 2 1 11 14 4 1 136 111 41 81 54 45 150 73 53 30 54 31 24 27 2 3 2008 4 1 2 3 2009 4 1 2 3 2010 4 2011, Volume 5, No. 1 Quarterly Banking Profile TABLE I-A. Selected Indicators, All FDIC-Insured Institutions* Return on assets (%)������������������������������������������������������������������������������������������������������ Return on equity (%)������������������������������������������������������������������������������������������������������� Core capital (leverage) ratio (%)������������������������������������������������������������������������������������ Noncurrent assets plus other real estate owned to assets (%)������������������������������������ Net charge-offs to loans (%)������������������������������������������������������������������������������������������ Asset growth rate (%)����������������������������������������������������������������������������������������������������� Net interest margin (%)��������������������������������������������������������������������������������������������������� Net operating income growth (%)���������������������������������������������������������������������������������� Number of institutions reporting������������������������������������������������������������������������������������� Commercial banks��������������������������������������������������������������������������������������������������� Savings institutions������������������������������������������������������������������������������������������������� Percentage of unprofitable institutions (%)�������������������������������������������������������������������� Number of problem institutions�������������������������������������������������������������������������������������� Assets of problem institutions (in billions)��������������������������������������������������������������������� Number of failed institutions������������������������������������������������������������������������������������������ Number of assisted institutions�������������������������������������������������������������������������������������� 2010 0.66 5.99 8.90 3.11 2.54 1.79 3.76 1,440.82 7,657 6,529 1,128 21.01 884 $390 157 0 2009 -0.08 -0.77 8.62 3.36 2.52 -5.45 3.47 -163.94 8,012 6,839 1,173 30.79 702 $403 140 8 2008 0.03 0.35 7.47 1.91 1.29 6.19 3.16 -90.71 8,305 7,086 1,219 24.89 252 $159 25 5 2007 0.81 7.75 7.97 0.95 0.59 9.88 3.29 -27.59 8,534 7,283 1,251 12.09 76 $22 3 0 2006 1.28 12.30 8.22 0.54 0.39 9.03 3.31 8.52 8,680 7,401 1,279 7.94 50 $8 0 0 2005 1.28 12.43 8.24 0.50 0.49 7.64 3.47 11.40 8,833 7,526 1,307 6.22 52 $7 0 0 2004 1.28 13.20 8.11 0.53 0.56 11.37 3.52 3.99 8,976 7,631 1,345 5.97 80 $28 4 0 * Excludes insured branches of foreign banks (IBAs). TABLE II-A. Aggregate Condition and Income Data, All FDIC-Insured Institutions 4th Quarter 2010 7,657 2,086,357 3rd Quarter 2010 7,761 2,042,030 4th Quarter 2009 8,012 2,062,950 %Change 09Q4-10Q4 -4.4 1.1 $13,321,383 4,266,621 1,897,556 1,070,654 321,556 636,903 1,186,440 1,317,851 702,016 59,336 547,811 2,439 7,375,620 230,762 7,144,858 2,667,707 52,802 393,853 3,062,163 $13,373,219 4,302,278 1,880,546 1,072,714 354,077 647,919 1,174,667 1,328,862 683,911 58,893 526,601 2,127 7,389,175 241,899 7,147,276 2,641,584 53,177 384,171 3,147,011 $13,087,156 4,462,265 1,915,796 1,091,197 450,747 661,564 1,222,394 1,058,115 421,488 59,535 483,258 3,765 7,281,801 228,464 7,053,337 2,500,420 41,202 408,038 3,084,158 1.8 -4.4 -1.0 -1.9 -28.7 -3.7 -2.9 24.5 66.6 -0.3 13.4 -35.2 1.3 1.0 1.3 6.7 28.2 -3.5 -0.7 Total liabilities and capital���������������������������������������������������������������������������������������������� Deposits������������������������������������������������������������������������������������������������������������������� Domestic office deposits��������������������������������������������������������������������������������� Foreign office deposits������������������������������������������������������������������������������������ Other borrowed funds��������������������������������������������������������������������������������������������� Subordinated debt��������������������������������������������������������������������������������������������������� All other liabilities���������������������������������������������������������������������������������������������������� Total equity capital (includes minority interests)���������������������������������������������������� Bank equity capital������������������������������������������������������������������������������������������� 13,321,383 9,422,943 7,873,120 1,549,823 1,717,604 146,833 520,341 1,513,661 1,486,801 13,373,219 9,273,670 7,738,082 1,535,588 1,866,211 150,823 568,154 1,514,363 1,495,318 13,087,156 9,226,774 7,696,799 1,529,974 1,782,253 156,947 476,291 1,444,891 1,424,381 1.8 2.1 2.3 1.3 -3.6 -6.4 9.2 4.8 4.4 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**������������������������������������������������������������������������������������ 118,767 359,558 87,540 1,482,687 11,555,789 386,476 5,658,126 19,327,408 983,028 232,211,601 124,253 377,460 79,947 1,439,947 11,547,679 402,398 6,062,386 18,591,198 1,012,556 236,386,429 140,214 395,957 58,133 1,395,254 11,267,455 533,216 5,965,767 18,115,615 1,392,540 215,449,008 -15.3 -9.2 50.6 6.3 2.6 -27.5 -5.2 6.7 -29.4 7.8 (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����������������������������������������������������������� Full Year 2010 $536,907 106,839 430,068 156,901 236,795 392,664 9,138 37,834 -450 88,152 87,498 187,150 53,926 33,572 81,554 Full Year 2009 $541,132 145,458 395,675 249,501 260,368 405,269 -1,627 5,677 -3,787 -9,818 -10,619 188,825 47,189 -57,808 -6,082 ** Call Report filers only. FDIC Quarterly %Change -0.8 -26.6 8.7 -37.1 -9.1 -3.1 N/M 566.5 88.1 N/M N/M -0.9 14.3 N/M N/M 4th Quarter 2010 $131,884 24,818 107,065 31,621 56,492 103,819 2,273 8,642 59 21,808 21,656 41,923 23,304 -1,649 19,849 4th Quarter 2009 $131,054 31,473 99,581 62,884 61,194 98,728 -5 697 -162 -1,702 -1,836 54,969 13,768 -15,604 -1,710 %Change 09Q4-10Q4 0.6 -21.2 7.5 -49.7 -7.7 5.2 N/M 1,139.5 N/M N/M N/M -23.7 69.3 89.4 N/M N/M - Not Meaningful. 5 2011, Volume 5, No. 1 TABLE III-A. Full Year 2010, All FDIC-Insured Institutions Asset Concentration Groups* Full Year All Insured (The way it is...) Institutions Number of institutions reporting����������������������� 7,657 Commercial banks������������������������������������� 6,529 Savings institutions����������������������������������� 1,128 Total assets (in billions)������������������������������������ $13,321.4 Commercial banks������������������������������������� 12,067.6 Savings institutions����������������������������������� 1,253.8 Total deposits (in billions)��������������������������������� 9,422.9 Commercial banks������������������������������������� 8,514.3 Savings institutions����������������������������������� 908.7 Bank net income (in millions)��������������������������� 87,498 Commercial banks������������������������������������� 79,166 Savings institutions����������������������������������� 8,332 Performance Ratios (%) Yield on earning assets������������������������������������ Cost of funding earning assets������������������������ Net interest margin������������������������������������ Noninterest income to assets��������������������������� Noninterest expense to assets������������������������� Loan and lease loss provision to assets���������� Net operating income to assets����������������������� Pretax return on assets������������������������������������ Return on assets����������������������������������������������� Return on equity����������������������������������������������� Net charge-offs to loans and leases���������������� Loan and lease loss provision to net charge-offs������������������������������������������ Efficiency ratio�������������������������������������������������� % of unprofitable institutions���������������������������� % of institutions with earnings gains���������������� Credit Card International Agricultural Commercial Banks Banks Banks Lenders 22 4 1,559 4,087 18 4 1,555 3,640 4 0 4 447 $705.2 $3,038.1 $199.9 $4,098.8 677.8 3,038.1 199.3 3,632.2 27.4 0.0 0.5 466.6 297.2 2,009.5 165.9 3,147.8 281.4 2,009.5 165.5 2,822.3 15.8 0.0 0.4 325.5 12,041 21,828 1,920 10,077 10,940 21,828 1,917 7,599 1,101 0 3 2,478 Mortgage Consumer Lenders Lenders 716 73 182 59 534 14 $788.9 $114.4 235.3 49.7 553.6 64.7 543.9 91.1 132.2 38.2 411.7 52.9 5,332 1,430 2,702 923 2,629 508 Other Specialized All Other <$1 Billion <$1 Billion 315 813 287 730 28 83 $43.1 $132.3 37.5 109.3 5.6 23.0 33.6 110.3 29.5 91.8 4.1 18.5 623 936 363 989 259 -53 All Other >$1 Billion 68 54 14 $4,200.8 4,088.4 112.5 3,023.7 2,943.9 79.8 33,311 31,905 1,406 4.70 0.93 3.76 1.79 2.97 1.19 0.62 0.95 0.66 5.99 2.54 13.57 1.48 12.09 2.98 4.63 6.32 1.76 2.73 1.81 11.81 10.83 3.42 0.71 2.71 2.00 2.82 0.62 0.64 0.95 0.72 8.08 2.29 5.22 1.30 3.93 0.65 2.69 0.46 0.97 1.13 0.99 8.92 0.58 4.89 1.13 3.76 1.28 3.05 1.23 0.19 0.39 0.25 2.18 1.89 4.36 1.34 3.02 0.76 1.78 0.75 0.67 1.08 0.69 6.97 1.14 5.80 1.37 4.43 1.88 2.78 1.29 1.28 2.01 1.28 11.93 2.31 3.79 0.98 2.81 6.64 7.23 0.22 1.28 1.94 1.48 9.10 0.64 4.98 1.24 3.73 1.03 3.26 0.38 0.69 0.86 0.72 6.41 0.56 3.96 0.67 3.28 2.18 2.92 0.88 0.79 1.14 0.80 6.70 1.87 83.84 57.22 21.01 67.52 69.06 31.89 9.09 100.00 75.96 65.16 0.00 75.00 122.11 62.60 6.67 66.07 95.62 64.40 30.49 68.46 109.93 49.17 15.64 72.49 74.31 44.95 5.48 83.56 124.35 77.77 14.29 50.48 118.94 70.01 11.07 64.82 91.43 57.26 8.82 75.00 86.75 Condition Ratios (%) Earning assets to total assets�������������������������� Loss allowance to: Loans and leases�������������������������������������� Noncurrent loans and leases�������������������� Noncurrent assets plus other real estate owned to assets������������� Equity capital ratio�������������������������������������������� Core capital (leverage) ratio ���������������������������� Tier 1 risk-based capital ratio��������������������������� Total risk-based capital ratio���������������������������� Net loans and leases to deposits��������������������� Net loans to total assets ���������������������������������� Domestic deposits to total assets�������������������� 88.78 84.36 91.61 88.76 93.53 96.17 90.97 91.73 84.21 3.13 64.18 8.19 372.36 3.96 62.79 1.56 85.19 2.46 56.78 1.44 33.65 2.50 173.47 1.84 87.79 1.51 68.61 2.70 43.73 3.11 11.16 8.90 12.71 15.29 75.82 53.63 59.10 1.90 14.96 12.75 14.24 16.91 188.43 79.42 37.92 2.38 8.93 6.96 11.87 15.03 50.17 33.18 33.27 1.61 10.87 9.93 13.99 15.14 74.86 62.15 83.03 3.72 11.44 9.63 12.62 14.62 86.26 66.25 75.38 2.92 10.06 9.38 19.17 20.23 84.64 58.35 68.85 1.22 11.02 10.52 14.15 15.32 92.75 73.86 79.51 0.81 16.32 14.68 34.62 35.66 33.84 26.41 76.71 1.69 11.04 10.58 17.75 18.89 65.80 54.85 83.37 3.48 12.04 8.69 11.81 14.95 69.73 50.19 60.98 Structural Changes New charters��������������������������������������������� Institutions absorbed by mergers������������� Failed institutions�������������������������������������� 11 197 157 0 0 0 0 0 0 0 35 3 6 119 143 1 28 6 0 0 1 2 0 1 0 6 2 2 9 1 PRIOR Full Years (The way it was...) Number of institutions����������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 8,012 8,534 8,833 23 27 33 4 5 4 1,568 1,592 1,685 4,453 4,773 4,617 766 784 886 83 109 125 289 373 425 770 815 995 56 56 63 Total assets (in billions)��������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 $13,087.2 13,033.9 10,879.3 $501.6 479.2 359.1 $3,107.1 2,784.4 1,851.2 $182.0 157.5 142.3 $4,546.9 4,619.0 4,257.3 $810.1 1,328.1 1,647.2 $96.5 94.9 117.3 $38.1 37.8 47.7 $116.1 110.4 128.7 $3,688.8 3,422.7 2,328.5 Return on assets (%)������������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 -0.08 0.81 1.28 -4.50 3.35 2.90 0.08 0.58 0.86 0.81 1.20 1.27 -0.42 0.83 1.36 0.65 0.03 1.07 0.33 1.26 1.55 0.74 2.56 2.18 0.80 1.03 1.09 0.51 0.88 1.34 Net charge-offs to loans & leases (%)���� 2008 ������������������������������������� 2006 ������������������������������������� 2004 2.52 0.59 0.49 9.77 3.95 4.64 3.07 0.77 0.87 0.65 0.22 0.18 2.02 0.35 0.23 1.24 0.40 0.12 2.74 0.87 1.44 0.78 0.29 0.26 0.54 0.22 0.23 2.19 0.39 0.24 Noncurrent assets plus OREO to assets (%)������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 3.36 0.95 0.50 2.40 1.54 1.32 2.75 0.68 0.46 1.55 0.83 0.61 3.87 1.10 0.48 3.17 1.52 0.56 1.45 1.64 0.51 0.69 0.23 0.24 1.34 0.65 0.54 3.66 0.68 0.39 Equity capital ratio (%)���������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 10.88 10.34 10.28 21.50 21.26 21.51 8.75 8.01 8.30 10.95 11.17 10.55 10.48 11.00 10.83 9.48 8.38 9.40 11.15 12.62 10.11 17.74 19.98 19.47 11.27 11.46 10.83 11.95 10.32 9.52 * See Table IV-A (page 8) for explanations. FDIC Quarterly 6 2011, Volume 5, No. 1 Quarterly Banking Profile TABLE III-A. Full Year 2010, All FDIC-Insured Institutions Asset Size Distribution Full Year All Insured (The way it is...) Institutions Number of institutions reporting����������������������������� 7,657 Commercial banks������������������������������������������� 6,529 Savings institutions����������������������������������������� 1,128 Total assets (in billions)������������������������������������������ $13,321.4 Commercial banks������������������������������������������� 12,067.6 Savings institutions����������������������������������������� 1,253.8 Total deposits (in billions)��������������������������������������� 9,422.9 Commercial banks������������������������������������������� 8,514.3 Savings institutions����������������������������������������� 908.7 Bank net income (in millions)��������������������������������� 87,498 Commercial banks������������������������������������������� 79,166 Savings institutions����������������������������������������� 8,332 Performance Ratios (%) Yield on earning assets������������������������������������������ Cost of funding earning assets������������������������������ Net interest margin������������������������������������������ Noninterest income to assets��������������������������������� Noninterest expense to assets������������������������������� Loan and lease loss provision to assets���������������� Net operating income to assets����������������������������� Pretax return on assets������������������������������������������ Return on assets����������������������������������������������������� Return on equity����������������������������������������������������� Net charge-offs to loans and leases���������������������� Loan and lease loss provision to net charge-offs������������������������������������������������ Efficiency ratio�������������������������������������������������������� % of unprofitable institutions���������������������������������� % of institutions with earnings gains���������������������� Geographic Regions* Less than $100 $1 Billion Greater $100 Million to to than Million $1 Billion $10 Billion $10 Billion New York 2,622 4,368 560 107 948 2,325 3,694 424 86 492 297 674 136 21 456 $148.5 $1,291.7 $1,431.7 $10,449.5 $2,695.0 131.9 1,058.6 1,090.4 9,786.6 2,027.0 16.5 233.1 341.3 662.9 667.9 125.2 1,068.7 1,102.4 7,126.6 1,809.1 112.0 884.0 841.9 6,676.3 1,338.0 13.2 184.7 260.5 450.3 471.1 479 4,236 3,423 79,361 20,501 465 3,550 2,015 73,137 16,381 14 686 1,408 6,224 4,120 Atlanta 1,022 905 117 $2,930.6 2,807.3 123.4 2,128.2 2,036.0 92.2 10,987 10,909 78 Chicago 1,602 1,320 282 $2,950.5 2,825.2 125.3 2,033.9 1,939.9 94.0 17,909 18,061 -152 Kansas City 1,825 1,728 97 $1,686.4 1,635.6 50.8 1,245.4 1,206.2 39.2 14,232 14,004 227 San Dallas Francisco 1,601 659 1,484 600 117 59 $789.3 $2,269.5 694.9 2,077.7 94.4 191.8 637.6 1,568.7 561.4 1,432.8 76.2 135.9 5,499 18,370 4,729 15,081 769 3,289 4.70 0.93 3.76 1.79 2.97 1.19 0.62 0.95 0.66 5.99 2.54 5.18 1.30 3.89 1.28 3.90 0.53 0.29 0.42 0.33 2.72 0.77 5.17 1.38 3.79 0.97 3.21 0.82 0.27 0.47 0.33 3.23 1.08 4.90 1.24 3.65 1.27 2.95 1.16 0.21 0.50 0.24 2.17 1.79 4.60 0.82 3.77 1.97 2.93 1.24 0.72 1.08 0.77 6.87 2.93 5.40 1.12 4.28 1.67 2.86 1.42 0.75 1.13 0.77 6.23 3.57 4.39 0.88 3.51 1.65 2.91 1.23 0.30 0.56 0.37 3.26 2.42 3.80 0.79 3.01 2.02 3.03 0.88 0.52 0.83 0.61 6.92 2.02 5.77 0.82 4.95 2.28 3.51 1.77 0.88 1.27 0.86 7.43 2.88 4.90 1.00 3.91 1.39 3.19 0.85 0.66 0.92 0.70 6.65 1.27 4.55 1.03 3.52 1.61 2.62 0.93 0.79 1.16 0.81 7.00 2.29 83.84 57.22 21.01 67.52 113.70 80.51 22.04 62.97 114.07 71.49 20.44 69.55 101.19 62.12 22.32 71.07 80.20 54.82 12.15 77.57 71.54 51.17 15.30 75.63 90.32 61.13 42.95 64.38 90.03 64.64 19.41 68.60 90.00 50.72 14.30 66.58 102.77 64.27 13.62 62.59 79.57 55.07 35.66 72.69 86.75 Condition Ratios (%) Earning assets to total assets��������������������������������� Loss allowance to: Loans and leases��������������������������������������������� Noncurrent loans and leases��������������������������� Noncurrent assets plus other real estate owned to assets�������������������� Equity capital ratio��������������������������������������������������� Core capital (leverage) ratio ����������������������������������� Tier 1 risk-based capital ratio���������������������������������� Total risk-based capital ratio����������������������������������� Net loans and leases to deposits���������������������������� Net loans to total assets ����������������������������������������� Domestic deposits to total assets��������������������������� 91.11 91.59 90.63 85.55 87.33 84.50 86.50 87.48 90.35 87.47 3.13 64.18 1.70 65.13 1.88 52.74 2.26 50.44 3.49 67.33 3.30 93.53 3.07 50.67 3.15 57.57 3.47 64.54 2.18 58.92 3.06 71.87 3.11 11.16 8.90 12.71 15.29 75.82 53.63 59.10 2.37 11.75 11.32 17.77 18.89 70.10 59.11 84.33 3.43 10.21 9.70 14.16 15.38 78.05 64.58 82.66 3.62 11.24 9.85 14.47 15.80 80.62 62.08 76.44 3.02 11.26 8.63 12.24 15.16 74.85 51.05 53.45 2.14 12.59 9.89 14.42 16.70 80.42 53.99 59.39 3.93 11.62 8.29 11.51 14.67 75.41 54.76 63.90 2.98 8.72 7.17 10.71 13.91 66.84 46.08 54.42 4.25 11.34 9.13 11.29 13.77 89.15 65.84 67.97 3.14 10.57 9.51 13.63 15.34 77.67 62.74 80.30 2.54 12.11 10.35 15.89 17.56 71.40 49.35 44.68 Structural Changes New charters��������������������������������������������������� Institutions absorbed by mergers������������������� Failed institutions�������������������������������������������� 11 197 157 2 69 36 2 108 102 6 18 18 1 2 1 2 22 14 3 44 56 1 17 25 2 43 18 2 52 7 1 19 37 PRIOR Full Years (The way it was…) Number of institutions����������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 8,012 8,534 8,833 2,848 3,440 3,864 4,492 4,424 4,339 565 551 512 107 119 118 986 1,043 1,110 1,121 1,221 1,227 1,647 1,763 1,874 1,879 1,986 2,070 1,660 1,742 1,791 719 779 761 Total assets (in billions)��������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 $13,087.2 13,033.9 10,879.3 $158.9 181.9 200.8 $1,354.4 1,308.8 1,247.6 $1,461.6 1,422.0 1,394.3 $10,112.3 10,121.2 8,036.7 $2,567.4 2,441.0 2,769.2 $3,427.4 3,329.6 2,683.9 $2,934.4 2,842.5 2,505.8 $1,145.6 976.3 803.7 $784.9 738.3 607.7 $2,227.5 2,706.3 1,508.9 Return on assets (%)������������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 -0.08 0.81 1.28 -0.05 0.74 0.99 -0.10 0.97 1.24 -0.36 0.96 1.28 -0.04 0.77 1.29 -0.83 0.77 1.21 -0.01 0.81 1.36 0.18 0.86 0.99 0.77 1.46 1.62 0.35 1.00 1.19 -0.25 0.52 1.60 Net charge-offs to loans & leases (%)���������� 2008 ������������������������������������������� 2006 ������������������������������������������� 2004 2.52 0.59 0.49 0.88 0.24 0.20 1.25 0.25 0.19 1.90 0.42 0.24 2.87 0.68 0.60 2.76 0.90 0.80 2.29 0.33 0.23 2.36 0.47 0.33 2.40 0.78 0.56 1.34 0.30 0.24 3.44 0.77 0.70 Noncurrent assets plus OREO to assets (%)������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 3.36 0.95 0.50 2.24 0.96 0.69 3.29 1.07 0.52 3.58 1.09 0.44 3.36 0.92 0.50 2.33 0.81 0.44 4.16 0.81 0.30 3.20 0.94 0.54 4.28 1.37 0.86 3.04 1.00 0.73 3.19 1.12 0.59 Equity capital ratio (%)���������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 10.88 10.34 10.28 11.96 13.73 12.16 9.86 10.49 10.20 10.73 11.34 10.66 11.03 10.12 10.18 12.53 12.06 10.53 11.66 10.30 9.80 8.59 9.23 9.23 10.70 9.74 10.45 10.30 10.22 10.17 11.11 10.24 12.40 * See Table IV-A (page 9) for explanations. FDIC Quarterly 7 2011, Volume 5, No. 1 TABLE IV-A. Fourth Quarter 2010, All FDIC-Insured Institutions Asset Concentration Groups* Fourth Quarter All Insured (The way it is...) Institutions Number of institutions reporting����������������������������������������� 7,657 Commercial banks������������������������������������������������������� 6,529 Savings institutions����������������������������������������������������� 1,128 Total assets (in billions)������������������������������������������������������ $13,321.4 Commercial banks������������������������������������������������������� 12,067.6 Savings institutions����������������������������������������������������� 1,253.8 Total deposits (in billions)��������������������������������������������������� 9,422.9 Commercial banks������������������������������������������������������� 8,514.3 Savings institutions����������������������������������������������������� 908.7 Bank net income (in millions)��������������������������������������������� 21,656 Commercial banks������������������������������������������������������� 19,474 Savings institutions����������������������������������������������������� 2,181 Credit Other Card International Agricultural Commercial Mortgage Consumer Specialized All Other All Other Banks Banks Banks Lenders Lenders Lenders <$1 Billion <$1 Billion >$1 Billion 22 4 1,559 4,087 716 73 315 813 68 18 4 1,555 3,640 182 59 287 730 54 4 0 4 447 534 14 28 83 14 $705.2 $3,038.1 $199.9 $4,098.8 $788.9 $114.4 $43.1 $132.3 $4,200.8 677.8 3,038.1 199.3 3,632.2 235.3 49.7 37.5 109.3 4,088.4 27.4 0.0 0.5 466.6 553.6 64.7 5.6 23.0 112.5 297.2 2,009.5 165.9 3,147.8 543.9 91.1 33.6 110.3 3,023.7 281.4 2,009.5 165.5 2,822.3 132.2 38.2 29.5 91.8 2,943.9 15.8 0.0 0.4 325.5 411.7 52.9 4.1 18.5 79.8 4,847 4,593 435 2,568 1,219 416 131 233 7,213 4,565 4,593 434 1,584 704 284 28 216 7,067 282 0 1 984 516 132 103 17 146 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���������������������������������� 4.57 0.86 3.71 1.69 3.11 0.95 0.60 0.91 0.65 5.81 2.27 75.43 61.36 25.09 61.77 12.05 1.26 10.79 2.83 4.75 3.60 2.72 4.10 2.77 18.72 7.68 54.20 36.02 13.64 95.45 3.32 0.73 2.60 1.86 2.92 0.60 0.46 0.69 0.60 6.68 2.25 76.44 71.56 0.00 75.00 5.13 1.18 3.95 0.68 2.85 0.48 0.87 0.98 0.88 7.92 0.71 105.79 65.52 14.05 58.88 4.85 1.02 3.83 1.33 3.26 1.10 0.19 0.43 0.25 2.18 1.96 82.75 65.79 32.35 64.47 4.24 1.23 3.00 0.34 1.34 0.85 0.60 0.99 0.62 6.19 1.04 138.88 41.88 20.67 61.45 5.64 1.19 4.45 1.90 2.94 0.87 1.45 2.32 1.44 13.28 2.10 55.22 47.03 12.33 69.86 3.50 0.87 2.64 7.03 7.65 0.31 0.90 1.81 1.19 7.29 0.75 156.64 79.23 24.76 48.25 4.84 1.13 3.71 1.10 3.22 0.44 0.69 0.85 0.71 6.29 0.72 108.39 71.13 16.36 57.81 3.88 0.61 3.27 2.00 3.13 0.67 0.69 0.93 0.69 5.71 1.59 82.46 63.81 13.24 58.82 Structural Changes New charters��������������������������������������������������������������� Institutions absorbed by mergers������������������������������� Failed institutions�������������������������������������������������������� 3 73 30 0 0 0 0 0 0 0 17 0 1 28 28 0 27 2 0 0 0 1 0 0 0 1 0 1 0 0 PRIOR Fourth Quarters (The way it was…) Return on assets (%)��������������������������������������������������2009 ��������������������������������������������������������2007 ��������������������������������������������������������2005 -0.06 0.01 1.21 0.58 2.01 2.16 0.29 -0.20 0.79 0.54 1.07 1.12 -0.84 0.23 1.32 0.65 -1.97 1.02 0.32 0.62 1.35 1.25 2.08 3.75 0.73 0.92 0.96 0.29 0.32 1.30 Net charge-offs to loans & leases (%)�����������������������2009 ��������������������������������������������������������2007 ��������������������������������������������������������2005 3.00 0.84 0.60 9.50 4.24 6.16 3.59 1.09 0.86 1.04 0.32 0.26 2.59 0.62 0.29 1.34 0.67 0.19 2.66 1.03 1.67 0.77 0.26 0.36 0.84 0.38 0.32 2.80 0.55 0.30 * Asset Concentration Group Definitions (Groups are hierarchical and mutually exclusive): Credit-card Lenders - Institutions whose credit-card loans plus securitized receivables exceed 50 percent of total assets plus securitized receivables. International Banks - Banks with assets greater than $10 billion and more than 25 percent of total assets in foreign offices. Agricultural Banks - Banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of the total loans and leases. Commercial Lenders - Institutions whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties exceed 25 percent of total assets. Mortgage Lenders - Institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets. Consumer Lenders - Institutions whose residential mortgage loans, plus credit-card loans, plus other loans to individuals, exceed 50 percent of total assets. Other Specialized < $1 Billion - Institutions with assets less than $1 billion, whose loans and leases are less than 40 percent of total assets. All Other < $1 billion - Institutions with assets less than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. All Other > $1 billion - Institutions with assets greater than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. FDIC Quarterly 8 2011, Volume 5, No. 1 Quarterly Banking Profile TABLE IV-A. Fourth Quarter 2010, All FDIC-Insured Institutions Asset Size Distribution Fourth Quarter All Insured Less than (The way it is...) Institutions $100 Million Number of institutions reporting��������������������� 7,657 2,622 Commercial banks����������������������������������� 6,529 2,325 Savings institutions��������������������������������� 1,128 297 Total assets (in billions)���������������������������������� $13,321.4 $148.5 Commercial banks����������������������������������� 12,067.6 131.9 Savings institutions��������������������������������� 1,253.8 16.5 Total deposits (in billions)������������������������������� 9,422.9 125.2 Commercial banks����������������������������������� 8,514.3 112.0 Savings institutions��������������������������������� 908.7 13.2 Bank net income (in millions)������������������������� 21,656 11 Commercial banks����������������������������������� 19,474 13 Savings institutions��������������������������������� 2,181 -2 Geographic Regions* $100 Million $1 Billion Greater to to than $1 Billion $10 Billion $10 Billion New York 4,368 560 107 948 3,694 424 86 492 674 136 21 456 $1,291.7 $1,431.7 $10,449.5 $2,695.0 1,058.6 1,090.4 9,786.6 2,027.0 233.1 341.3 662.9 667.9 1,068.7 1,102.4 7,126.6 1,809.1 884.0 841.9 6,676.3 1,338.0 184.7 260.5 450.3 471.1 502 581 20,561 6,215 297 273 18,891 4,963 204 308 1,671 1,252 Atlanta Chicago 1,022 1,602 905 1,320 117 282 $2,930.6 $2,950.5 2,807.3 2,825.2 123.4 125.3 2,128.2 2,033.9 2,036.0 1,939.9 92.2 94.0 1,132 4,144 1,105 4,287 28 -143 Kansas City 1,825 1,728 97 $1,686.4 1,635.6 50.8 1,245.4 1,206.2 39.2 4,256 4,226 30 San Dallas Francisco 1,601 659 1,484 600 117 59 $789.3 $2,269.5 694.9 2,077.7 94.4 191.8 637.6 1,568.7 561.4 1,432.8 76.2 135.9 1,173 4,735 1,006 3,888 167 847 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�������������� 4.57 0.86 3.71 1.69 3.11 0.95 0.60 0.91 0.65 5.81 2.27 5.06 1.17 3.89 1.29 4.12 0.63 0.01 0.11 0.03 0.26 0.98 5.05 1.25 3.80 1.06 3.38 0.92 0.11 0.29 0.16 1.51 1.30 4.84 1.11 3.73 1.34 3.16 1.13 0.14 0.44 0.16 1.44 1.95 4.46 0.77 3.69 1.83 3.06 0.93 0.72 1.06 0.79 6.98 2.50 5.08 1.05 4.03 1.69 2.97 0.92 0.95 1.27 0.92 7.32 2.96 4.32 0.75 3.57 1.40 3.27 1.04 0.03 0.26 0.15 1.33 2.16 3.72 0.76 2.96 2.05 3.15 0.89 0.42 0.76 0.56 6.32 1.95 5.59 0.75 4.84 2.32 3.62 1.34 1.07 1.51 1.02 8.91 2.51 4.83 0.90 3.93 0.93 2.80 0.85 0.59 0.83 0.59 5.58 1.40 4.52 0.96 3.56 1.43 2.78 0.69 0.79 1.10 0.83 6.94 2.10 75.43 61.36 25.09 61.77 105.85 84.56 29.29 55.87 107.20 73.24 23.17 64.40 91.44 63.72 22.68 66.25 70.62 59.39 13.08 75.70 55.73 55.14 20.25 62.03 85.78 69.88 45.69 59.39 95.04 67.24 22.10 64.61 78.13 52.65 19.84 59.34 94.64 61.74 20.17 59.96 65.29 60.46 33.84 69.35 Structural Changes New charters������������������������������������������� Institutions absorbed by mergers����������� Failed institutions������������������������������������ 3 73 30 1 18 9 0 52 20 2 3 1 0 0 0 1 8 3 0 7 12 0 4 3 2 13 5 0 35 1 0 6 6 PRIOR Fourth Quarters (The way it was…) Return on assets (%)����������������������������� 2009 ����������������������������������� 2007 ����������������������������������� 2005 -0.06 0.01 1.21 -0.50 0.44 0.80 -0.67 0.68 1.25 -0.55 0.60 1.18 0.10 -0.16 1.22 0.17 0.12 1.09 -0.44 0.10 1.30 0.06 0.60 0.96 0.79 0.98 1.49 0.17 0.55 1.11 -0.38 -1.26 1.58 Net charge-offs to loans & leases (%)�� 2009 ����������������������������������� 2007 ����������������������������������� 2005 3.00 0.84 0.60 1.23 0.37 0.31 1.98 0.46 0.26 2.42 0.63 0.28 3.32 0.95 0.73 2.96 1.00 0.89 2.78 0.56 0.26 2.98 0.75 0.44 2.71 1.11 0.61 1.61 0.51 0.33 4.28 1.13 0.95 * Regions: New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, U.S. Virgin Islands Atlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia Chicago - Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin Kansas City - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota Dallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, Texas San Francisco - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming FDIC Quarterly 9 2011, Volume 5, No. 1 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* December 31, 2010 All Insured Institutions Credit Card Banks International Agricultural Commercial Mortgage Banks Banks Lenders Lenders Consumer Lenders Other All Other All Other Specialized <$1 >$1 <$1 Billion Billion Billion Percent of Loans 30-89 Days Past Due All loans secured by real estate��������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 1.94 1.97 1.05 1.10 1.19 2.84 0.68 1.95 1.93 1.98 0.38 1.61 1.73 0.00 0.00 0.00 2.02 1.93 2.90 1.98 1.94 2.85 0.01 1.97 2.88 1.16 0.80 0.61 1.68 4.41 0.49 2.02 2.49 1.78 0.30 1.82 1.04 1.09 1.06 0.58 0.80 1.81 1.12 1.87 1.29 1.88 0.37 0.94 1.48 1.92 1.06 1.11 0.89 2.17 0.74 1.81 1.27 1.89 0.51 1.31 1.69 2.61 1.37 1.11 0.76 1.80 0.83 1.19 2.03 1.08 1.19 1.65 1.27 0.72 0.36 0.04 1.17 1.64 1.08 1.65 1.06 1.92 0.47 1.52 1.67 1.78 1.09 2.12 0.72 2.13 0.99 2.06 1.50 2.12 0.84 1.59 1.82 1.50 1.30 0.62 0.84 2.30 1.34 2.31 1.34 2.33 0.45 1.73 2.42 2.19 1.00 1.62 1.26 3.48 0.48 2.06 1.95 2.08 0.41 1.82 Percent of Loans Noncurrent** All real estate loans���������������������������������������������������������� Construction and development.................................. Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 7.04 16.01 4.28 3.74 1.91 9.44 2.46 1.77 2.21 1.27 1.13 4.87 5.67 0.00 0.00 0.00 3.93 7.61 2.46 2.25 2.22 3.08 0.02 2.20 10.25 14.15 5.92 3.00 2.27 16.87 4.56 1.94 2.23 1.79 1.61 6.30 2.34 9.33 3.00 2.53 1.04 1.62 2.13 0.68 0.60 0.68 0.61 1.83 5.47 16.12 4.05 3.99 1.55 5.09 2.22 1.29 2.05 1.18 1.20 4.33 4.51 12.95 4.02 2.40 1.04 4.77 1.68 0.66 2.03 0.50 0.82 4.29 2.03 2.72 3.14 7.20 1.12 2.50 0.72 1.25 1.15 1.30 0.05 1.43 2.41 5.78 2.56 0.78 0.76 2.05 1.89 0.88 1.06 0.86 1.61 2.10 2.50 7.37 2.71 3.30 0.70 2.00 2.16 0.85 0.71 0.85 0.71 2.19 9.62 17.06 5.14 4.05 2.19 13.69 1.80 1.31 2.57 0.99 0.82 6.17 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������������������������������������������������������ 1.96 5.45 1.22 1.24 2.64 1.62 1.75 6.07 10.08 2.05 0.62 2.54 5.23 0.00 0.00 0.00 6.82 5.28 14.35 11.01 10.95 12.02 0.01 10.83 2.74 2.70 1.46 1.23 2.72 3.47 1.45 3.54 6.47 2.41 0.55 2.28 0.56 3.06 0.72 0.59 0.77 0.36 1.30 0.65 1.98 0.61 0.00 0.58 2.00 6.24 1.31 1.34 1.47 1.39 1.66 1.95 7.26 1.24 1.03 1.89 1.02 4.35 0.67 0.68 2.74 0.84 1.31 4.39 17.43 1.32 0.45 1.14 1.84 1.84 0.74 3.62 2.53 1.29 5.19 2.26 5.10 1.03 2.69 2.29 0.48 1.32 0.40 0.82 0.36 0.40 1.03 0.96 3.92 0.66 0.99 0.64 0.47 1.96 0.42 0.89 0.51 0.34 1.06 0.79 2.40 0.76 0.43 0.56 2.06 3.86 1.06 1.05 3.51 1.60 1.03 3.01 8.44 1.58 0.53 1.87 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)�������������� $4,266.6 321.6 1,070.7 214.8 636.9 1,897.6 1,186.4 1,317.9 702.0 615.8 607.1 7,378.1 $0.1 0.0 0.0 0.0 0.0 0.0 29.4 562.9 537.8 25.1 17.7 610.0 $497.9 7.3 28.8 38.5 116.3 256.4 194.4 161.0 55.4 105.5 197.1 1,050.5 $75.1 4.4 21.9 1.8 1.6 19.7 15.9 6.3 0.1 6.2 28.8 126.2 $1,912.0 217.4 752.6 128.1 203.1 577.5 535.9 201.0 26.1 174.8 135.8 2,784.6 $437.3 8.0 28.3 9.2 35.5 355.1 12.2 15.2 1.6 13.5 2.5 467.1 $23.2 0.5 2.0 0.4 10.2 10.1 4.1 59.7 18.4 41.3 0.3 87.2 $8.0 0.6 2.6 0.2 0.2 3.9 1.5 1.5 0.2 1.3 0.7 11.6 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������������������������������������������������������ 52,802.3 18,182.7 10,232.6 2,606.3 14,049.8 411.3 7,113.1 -18.8 0.0 0.0 0.0 0.2 0.0 0.0 4,513.8 5.0 159.0 799.0 1,311.8 0.0 2,031.0 879.8 327.2 279.3 34.1 165.1 73.8 0.2 31,482.8 15,226.1 7,669.3 1,187.6 6,490.8 296.9 593.8 2,971.8 426.1 209.7 43.1 1,677.6 8.5 607.6 91.5 18.4 28.2 8.1 36.6 0.3 0.0 101.6 35.2 32.6 3.3 28.8 1.7 0.0 $54.9 $1,258.2 3.4 80.0 14.0 220.4 1.3 35.3 2.5 267.4 30.0 644.9 7.0 386.1 7.0 303.4 0.1 62.2 6.9 241.2 4.8 219.5 73.7 2,167.1 607.9 174.9 170.3 26.5 222.1 13.7 0.3 12,171.9 1,969.9 1,684.1 504.6 4,116.7 16.3 3,880.3 * See Table IV-A (page 8) for explanations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 10 2011, Volume 5, No. 1 Quarterly Banking Profile TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution December 31, 2010 Geographic Regions* Less than $100 $1 Billion Greater All Insured $100 Million to to than Institutions Million $1 Billion $10 Billion $10 Billion New York Atlanta Chicago Kansas City Dallas San Francisco Percent of Loans 30-89 Days Past Due All loans secured by real estate������������������������������ Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 1.94 1.97 1.05 1.10 1.19 2.84 0.68 1.95 1.93 1.98 0.38 1.61 1.75 1.69 1.48 1.50 0.87 2.37 1.39 2.37 1.74 2.38 0.49 1.61 1.52 1.91 1.29 1.13 0.87 1.92 1.16 1.89 2.17 1.87 0.41 1.44 1.30 1.84 0.97 1.15 0.84 1.68 0.79 1.99 2.05 1.97 0.50 1.25 2.18 2.06 0.95 1.07 1.24 3.18 0.60 1.95 1.93 1.98 0.37 1.69 1.55 2.47 1.15 1.13 0.70 1.90 1.03 1.93 1.81 2.39 0.38 1.52 2.12 1.71 1.17 1.29 1.44 3.00 0.53 2.12 2.00 2.19 0.30 1.72 1.90 2.10 1.11 0.95 1.32 2.81 0.75 1.65 1.69 1.64 0.51 1.51 2.36 2.24 0.84 1.49 1.11 3.91 0.81 2.46 2.41 2.54 0.53 1.96 1.69 1.68 1.04 1.09 1.02 2.56 0.76 1.42 0.94 1.67 0.41 1.44 1.91 1.89 0.84 0.90 1.02 3.01 0.38 1.67 1.86 1.50 0.13 1.41 Percent of Loans Noncurrent** All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 7.04 16.01 4.28 3.74 1.91 9.44 2.46 1.77 2.21 1.27 1.13 4.87 3.08 10.34 3.34 3.52 1.33 2.32 2.55 1.00 0.99 1.00 0.72 2.60 4.07 13.04 3.42 3.39 1.31 2.86 2.38 0.83 1.58 0.77 0.86 3.56 5.36 16.94 4.14 4.11 1.98 4.08 2.61 1.24 1.94 0.99 1.15 4.47 8.20 16.99 4.82 3.70 1.95 11.46 2.44 1.84 2.22 1.34 1.15 5.18 4.80 17.83 3.85 2.67 1.27 4.89 2.57 2.07 2.19 1.59 0.37 3.52 8.83 17.29 4.81 5.68 1.93 11.97 1.75 1.45 2.23 1.01 0.56 6.05 7.98 14.80 4.42 4.00 1.87 12.81 2.65 1.44 2.48 1.15 1.19 5.47 8.20 15.22 4.44 3.18 2.79 12.07 2.23 2.11 2.44 1.56 0.88 5.37 4.80 11.03 3.10 4.54 1.26 4.98 1.62 0.70 0.93 0.58 1.18 3.69 5.78 20.47 4.75 3.56 1.56 6.75 3.60 1.71 2.02 1.44 2.53 4.25 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��������������������������������������������� 1.96 5.45 1.22 1.24 2.64 1.62 1.75 6.07 10.08 2.05 0.62 2.54 0.71 3.37 0.64 0.94 0.84 0.42 1.47 0.87 3.85 0.83 0.00 0.77 1.00 3.57 0.68 0.92 0.75 0.64 1.59 1.42 7.20 1.04 0.58 1.08 1.81 6.07 1.30 1.39 1.25 1.02 1.57 2.44 7.11 0.98 0.78 1.79 2.25 5.96 1.47 1.27 2.89 1.90 1.80 6.49 10.18 2.24 0.62 2.92 1.16 5.50 0.99 0.81 0.87 0.81 2.75 9.69 11.31 4.26 0.36 3.57 2.56 6.34 1.44 1.71 3.69 1.80 1.32 4.09 9.16 1.54 0.44 2.42 2.15 6.35 1.62 1.40 1.99 2.00 1.74 2.62 7.53 1.33 0.89 2.02 1.86 3.95 0.81 0.80 3.56 1.56 1.83 7.96 12.45 1.82 0.65 2.88 1.28 3.35 0.72 1.26 1.56 0.94 1.09 1.87 3.76 0.97 0.59 1.27 2.24 6.25 1.53 1.45 2.46 2.43 1.70 3.62 5.73 2.24 0.65 2.28 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)����� $4,266.6 321.6 1,070.7 214.8 636.9 1,897.6 1,186.4 1,317.9 702.0 615.8 607.1 7,378.1 $61.8 4.5 18.4 1.9 2.0 26.7 11.5 6.2 0.1 6.1 9.8 89.3 $663.5 71.3 260.6 31.1 36.7 230.0 108.3 39.5 2.5 37.0 39.2 850.5 $668.4 74.5 271.1 43.1 48.6 219.0 135.6 73.2 19.0 54.1 33.0 910.2 $2,873.0 171.2 520.6 138.7 549.6 1,421.9 931.1 1,199.0 680.4 518.6 525.1 5,528.1 $825.0 47.0 224.5 61.4 89.7 396.6 182.2 405.0 317.9 87.2 92.7 1,505.0 $1,034.6 99.2 235.6 29.9 182.8 477.3 281.3 225.4 80.7 144.7 114.6 1,655.8 $824.9 52.0 193.7 63.1 159.4 341.9 243.6 182.9 40.7 142.2 152.4 1,403.8 $635.8 45.8 150.4 19.7 112.6 282.4 171.0 227.9 141.9 86.0 115.5 1,150.2 $346.6 48.7 124.5 9.5 23.4 128.3 91.1 45.4 15.7 29.7 23.3 506.4 $599.8 28.9 142.1 31.2 69.0 271.0 217.3 231.2 105.1 126.1 108.6 1,156.9 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��������������������������������������������� 52,802.3 18,182.7 10,232.6 2,606.3 14,049.8 411.3 7,113.1 1,170.1 395.4 359.4 40.6 342.3 32.2 0.5 13,917.7 6,574.3 3,635.4 487.6 2,951.2 222.5 47.9 10,976.6 5,627.2 2,610.1 393.3 2,150.8 114.8 81.3 26,737.9 5,585.9 3,627.7 1,684.8 8,605.5 41.7 6,983.4 4,577.7 1,244.8 1,112.8 221.0 1,716.9 13.0 249.9 14,737.0 5,838.2 2,265.2 469.0 4,171.0 64.7 1,928.9 10,973.4 2,459.5 2,116.4 471.8 2,865.9 72.0 2,988.2 9,797.7 3,114.8 1,977.8 363.4 2,768.1 78.2 1,495.6 5,982.3 3,024.2 1,344.8 148.0 1,278.0 131.1 56.3 6,734.3 2,501.2 1,415.6 933.0 1,250.0 52.3 394.3 * See Table IV-A (page 9) for explanations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 11 2011, Volume 5, No. 1 TABLE VI-A. Derivatives, All FDIC-Insured Commercial Banks and State-Chartered Savings Banks Asset Size Distribution % Change Less $100 4th Quarter 09Q4than $100 Million to 2009 10Q4 Million $1 Billion $1 Billion to $10 Greater than Billion $10 Billion (dollar figures in millions; 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter notional amounts unless otherwise indicated) 2010 2010 2010 2010 ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives����������������� 1,167 1,207 1,158 1,148 1,129 Total assets of institutions reporting derivatives���������� $10,833,465 $10,888,637 $10,650,415 $10,746,074 $10,547,632 Total deposits of institutions reporting derivatives������� 7,544,151 7,402,157 7,248,575 7,281,782 7,341,133 Total derivatives������������������������������������������������������������� 232,211,601 236,386,429 225,427,590 218,715,022 215,449,008 3.4 2.7 2.8 7.8 95 $6,738 5,684 207 702 $287,915 234,414 19,995 290 $849,907 660,847 72,683 80 $9,688,905 6,643,206 232,118,716 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 193,499,288 196,549,809 188,613,987 182,641,534 181,454,493 Foreign exchange*�������������������������������������������������������� 22,002,926 22,531,799 20,245,402 19,202,392 17,299,787 Equity����������������������������������������������������������������������������� 1,363,760 1,679,128 1,615,062 1,570,974 1,685,227 Commodity & other (excluding credit derivatives)�������� 1,195,150 1,153,316 1,076,212 941,687 978,922 Credit������������������������������������������������������������������������������ 14,150,478 14,472,378 13,876,928 14,358,435 14,030,580 Total�������������������������������������������������������������������������������� 232,211,601 236,386,429 225,427,590 218,715,022 215,449,008 6.6 27.2 -19.1 22.1 0.9 7.8 201 0 5 0 0 207 19,591 49 109 22 225 19,995 68,862 2,998 627 159 38 72,683 193,410,634 21,999,879 1,363,019 1,194,969 14,150,215 232,118,716 Derivative Contracts by Transaction Type Swaps���������������������������������������������������������������������������� 149,258,058 146,953,909 141,420,345 136,333,735 139,137,539 Futures & forwards�������������������������������������������������������� 35,712,257 39,643,697 36,793,865 34,747,283 29,651,792 Purchased options��������������������������������������������������������� 16,174,116 16,911,328 15,399,619 15,759,306 15,986,712 Written options��������������������������������������������������������������� 15,904,185 16,697,372 15,898,210 15,910,886 15,897,582 Total�������������������������������������������������������������������������������� 217,048,615 220,206,306 209,512,039 202,751,210 200,673,626 7.3 20.4 1.2 0.0 8.2 27 78 21 82 207 9,498 4,967 733 4,571 19,770 47,495 13,210 4,517 7,261 72,483 149,201,038 35,694,001 16,168,845 15,892,271 216,956,155 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����������������������������������� 92,053 12,340 -2,126 -1,068 -68,238 82,769 107,170 -7,464 -1,777 -721 -131,313 150,796 98,102 -4,874 311 -503 -222,427 242,490 94,739 1,329 -849 1,064 -121,494 141,389 97,184 9,511 1,236 1,661 -161,114 189,531 -5.3 29.7 N/M N/M -57.6 -56.3 0 0 0 0 0 0 4 0 3 4 0 3 266 -3 7 2 1 -3 91,783 12,344 -2,136 -1,074 -68,239 82,769 Derivative Contracts by Maturity** Interest rate contracts����������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Foreign exchange contracts������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Equity contracts��������������������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Commodity & other contracts����������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years 90,842,744 33,496,837 24,306,848 14,467,374 2,432,756 1,289,279 296,198 190,861 84,629 382,507 239,847 26,176 90,918,718 35,138,751 24,550,151 13,362,678 2,582,310 1,431,627 352,002 217,579 86,713 311,897 241,288 33,836 89,000,799 33,347,773 23,099,484 11,959,585 2,356,096 1,306,940 326,743 205,295 80,595 324,203 207,019 30,459 84,010,725 33,334,968 24,121,171 11,092,119 2,440,019 1,329,332 320,739 220,454 84,000 287,660 177,250 31,220 81,236,262 33,970,247 26,373,563 10,416,223 2,448,723 1,345,678 312,066 227,854 81,647 261,429 223,654 34,250 11.8 -1.4 -7.8 38.9 -0.7 -4.2 -5.1 -16.2 3.7 46.3 7.2 -23.6 46 16 28 0 0 0 1 0 0 0 0 0 6,461 5,584 2,472 46 2 0 12 48 1 7 5 0 13,611 24,838 16,478 2,049 52 170 64 266 13 74 43 0 90,822,626 33,466,398 24,287,870 14,465,278 2,432,702 1,289,109 296,121 190,546 84,615 382,425 239,800 26,176 41.3 84.0 48.4 82.8 44.9 82.9 41.2 88.9 45.9 83.3 0.0 0.1 0.6 0.2 1.3 0.5 46.6 95.0 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 (%)�������������������������������������������������� 125.2 131.1 127.7 130.2 129.2 0.1 0.7 1.8 141.6 Credit losses on derivatives***���������������������������������� 668.0 555.0 259.0 100.0 767.0 -12.9 0.0 0.0 44.0 624.0 HELD FOR TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 196 8,969,145 6,279,418 200 9,001,853 6,139,846 189 8,882,957 6,078,628 195 8,949,291 6,095,318 197 8,873,915 6,145,572 -0.5 1.1 2.2 9 626 518 71 32,072 25,747 58 240,573 187,698 58 8,695,874 6,065,456 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 191,773,882 194,576,807 186,774,376 180,761,592 179,606,768 Foreign exchange���������������������������������������������������������� 20,853,441 20,699,946 18,086,768 17,462,757 16,439,507 Equity����������������������������������������������������������������������������� 1,357,525 1,672,913 1,608,817 1,563,707 1,677,767 Commodity & other�������������������������������������������������������� 1,184,245 1,145,723 1,070,966 934,851 974,849 Total�������������������������������������������������������������������������������� 215,169,093 218,095,389 207,540,928 200,722,908 198,698,891 6.8 26.8 -19.1 21.5 8.3 14 0 0 0 14 1,354 0 0 0 1,354 15,315 2,092 126 71 17,605 191,757,199 20,851,349 1,357,398 1,184,174 215,150,120 104.7 181.8 132.6 N/M 77.3 0 0 0 0 0 0 0 0 0 0 66 2 -2 9 75 1,381 1,888 337 -242 3,365 0.0 0.0 0.0 0.0 2.5 32.2 2.9 28.5 Trading Revenues: Cash & Derivative Instruments Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other (including credit derivatives)�������� Total trading revenues��������������������������������������������������� 1,447 1,891 335 -233 3,440 4,198 -1,066 371 574 4,077 155 4,299 378 1,878 6,710 304 3,906 965 3,004 8,178 707 671 144 417 1,940 Share of Revenue Trading revenues to gross revenues (%)���������������������� Trading revenues to net operating revenues (%)���������� 2.9 28.6 3.4 26.7 5.5 46.3 6.6 74.0 1.6 108.1 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 1,055 10,473,165 7,330,160 1,085 10,535,161 7,198,569 1,045 10,261,893 7,015,215 1,032 10,324,307 7,035,314 1,008 10,191,444 7,098,321 4.7 2.8 3.3 86 6,112 5,166 639 260,500 212,378 254 728,957 563,976 76 9,477,597 6,548,639 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other�������������������������������������������������������� Total notional amount���������������������������������������������������� 1,725,406 136,977 6,235 10,905 1,879,522 1,973,002 124,108 6,214 7,593 2,110,917 1,839,611 120,010 6,244 5,246 1,971,111 1,879,942 134,258 7,268 6,835 2,028,303 1,847,725 115,478 7,459 4,073 1,974,735 -6.6 18.6 -16.4 167.7 -4.8 187 0 5 0 192 18,237 49 108 22 18,416 53,547 743 501 88 54,879 1,653,435 136,185 5,620 10,795 1,806,035 All line items are reported on a quarterly basis. N/M - Not Meaningful * Include spot foreign exchange contracts. All other references to foreign exchange contracts in which notional values or fair values are reported exclude spot foreign exchange contracts. ** Derivative contracts subject to the risk-based capital requirements for derivatives. *** The reporting of credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and to those banks filing the FFIEC 041 report form that have $300 million or more in total assets. FDIC Quarterly 12 2011, Volume 5, No. 1 Quarterly Banking Profile TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Commercial Banks and State-Chartered Savings Banks) Asset Size Distribution (dollar figures in millions) Assets Sold and Securitized with Servicing Retained or with Recourse or Other Seller-Provided Credit Enhancements 4th Quarter 2010 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������������������������������������������������������������������������������������������ $768,341 0 13,748 298 4,234 4,014 192,394 983,028 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��� 4,683 0 609 5 185 9 439 5,930 208 4,834 0 574 6 207 16 1,142 6,779 211 5.8 0.0 1.1 1.6 3.8 0.0 1.1 4.8 Securitized Loans, Leases, and Other Assets 30-89 Days Past Due (%) 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Securitized Loans, Leases, and Other Assets 90 Days or More Past Due (%) 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Securitized Loans, Leases, and Other Assets Charged-off (net, YTD, annualized, %) 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Seller's Interests in Institution's Own Securitizations - Carried as Loans Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� Seller's Interests in Institution's Own Securitizations - Carried as Securities Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� Assets Sold with Recourse and Not Securitized 139 3rd Quarter 2010 136 2nd Quarter 2010 1st Quarter 2010 4th Quarter 2009 % Change Less than $100 $1 Billion Greater 09Q4$100 Million to to $10 than $10 10Q4 Million $1 Billion Billion Billion 126 126 141 -1.4 21 69 21 28 $776,031 $774,791 0 0 14,320 15,452 329 486 4,333 5,021 7,339 3,796 210,204 206,675 1,012,556 1,006,221 $778,241 15 16,133 600 5,610 4,127 192,853 997,578 $784,748 5,947 363,486 7,182 24,692 7,649 198,835 1,392,540 -2.1 -100.0 -96.2 -95.9 -82.9 -47.5 -3.2 -29.4 $375 0 0 0 0 0 1 376 $699 0 781 0 0 10 38 1,528 $2,538 0 0 49 0 30 118 2,735 $764,728 0 12,967 249 4,234 3,973 192,238 978,388 4,953 0 664 6 245 94 248 6,210 166 5,166 14 730 6 237 95 257 6,506 162 5,868 1,023 134,193 637 1,410 225 287 143,643 387 -20.2 -100.0 -99.5 -99.2 -86.9 -96.0 53.0 -95.9 -46.3 2 0 0 0 0 0 0 2 1 46 0 220 0 0 0 4 269 0 55 0 0 5 0 0 0 60 1 4,580 0 389 0 185 9 435 5,599 207 6.0 0.0 1.2 1.4 3.4 0.0 1.5 5.0 5.7 0.0 1.5 1.2 3.7 0.2 2.6 5.0 6.0 0.0 1.5 1.2 3.3 0.3 2.2 5.1 6.8 1.3 2.7 2.3 3.9 2.3 3.5 5.2 3.4 0.0 0.0 0.0 0.0 0.0 0.0 3.4 0.1 0.0 2.4 0.0 0.0 16.4 0.0 1.4 2.2 0.0 0.0 1.3 0.0 0.0 0.1 2.1 5.8 0.0 1.0 1.6 3.8 0.0 1.1 4.8 10.1 0.0 0.5 0.3 2.9 0.0 7.3 9.4 11.5 0.0 0.5 0.3 2.9 0.0 9.8 10.9 11.8 0.0 0.7 0.2 2.7 0.1 8.5 10.9 13.1 0.0 0.8 0.3 2.7 0.1 7.5 11.7 12.2 2.0 3.0 0.2 3.6 1.0 4.3 8.3 2.4 0.0 0.0 0.0 0.0 0.0 55.2 2.5 0.1 0.0 3.2 0.0 0.0 0.0 0.0 1.7 3.9 0.0 0.0 0.1 0.0 0.0 0.8 3.6 10.2 0.0 0.4 0.4 2.9 0.0 7.4 9.4 1.2 0.0 7.9 1.4 1.8 0.0 0.4 1.1 0.9 0.0 6.2 0.9 1.4 0.0 0.2 0.9 0.6 0.0 4.2 0.4 0.9 0.0 0.0 0.6 0.3 0.0 2.2 0.3 0.4 0.0 0.0 0.3 1.5 1.8 10.2 2.5 1.0 13.9 0.1 3.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 11.4 0.0 0.0 0.0 0.0 5.8 0.0 0.0 0.0 0.2 0.0 0.0 0.0 0.0 1.2 0.0 7.6 1.6 1.8 0.0 0.4 1.1 0 7,350 2 0 6,073 2 0 5,088 3 0 4,831 4 316 62,235 894 -100.0 -88.2 -99.8 0 0 0 0 55 2 0 0 0 0 7,295 0 0 0 0 0 0 0 0 0 0 0 0 0 1 789 0 -100.0 -100.0 0.0 0 0 0 0 0 0 0 0 0 0 0 0 Number of institutions reporting asset sales���������������������������������������������������� Outstanding Principal Balance by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� Home equity, credit card receivables, auto, and other consumer loans��������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total sold and not securitized����������������������������������������������������������������������������������� 854 847 835 819 827 3.3 164 530 119 41 64,187 1,455 379 53,860 119,881 60,984 41 445 52,950 114,420 62,747 41 537 52,435 115,760 62,207 40 669 48,635 111,551 66,988 908 2,654 48,736 119,286 -4.2 60.2 -85.7 10.5 0.5 1,260 0 1 9 1,270 13,519 7 57 83 13,666 6,072 18 21 316 6,427 43,335 1,429 300 53,453 98,517 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������������������������������������������������������������������������������������������������� 15,609 132 90 13,115 28,947 14,996 20 77 12,899 27,991 14,196 21 77 12,749 27,043 13,705 21 62 10,429 24,217 16,536 100 1,934 10,391 28,961 -5.6 32.0 -95.3 26.2 0.0 168 0 1 3 173 2,218 4 46 59 2,327 3,537 3 21 10 3,571 9,686 125 22 13,043 22,877 Support for Securitization Facilities Sponsored by Other Institutions Number of institutions reporting securitization facilities sponsored by others������� Total credit exposure������������������������������������������������������������������������������������������������� 163 29,571 154 28,311 128 9,259 79 6,445 58 4,297 181.0 588.2 27 26 84 249 37 146 15 29,150 Total unused liquidity commitments������������������������������������������������������������������������� 514 504 418 846 545 -5.7 0 0 0 514 5,891,882 5,956,566 5,995,635 Other Assets serviced for others**�������������������������������������������������������������������������������������� Asset-backed commercial paper conduits Credit exposure to conduits sponsored by institutions and others������������������ Unused liquidity commitments to conduits sponsored by institutions and others�������������������������������������������������������������������������������������������������� Net servicing income (for the quarter)���������������������������������������������������������������������� Net securitization income (for the quarter)��������������������������������������������������������������� Total credit exposure to Tier 1 capital (%)***������������������������������������������������������������ 5,782,925 6,011,088 -3.8 4,443 86,185 10,009 11,649 10,699 10,653 15,953 -37.3 5 0 100,910 5,591,386 61 9,943 61,339 82,137 83,062 87,156 170,373 -64.0 0 0 1,222 60,117 4,657 150 5.5 3,097 164 5.4 3,576 156 3.7 5,164 13 3.3 6,876 1,615 15.9 -32.3 -90.7 36 1 1.20 155 5 2.30 242 10 2.70 4,225 135 6.50 * Line item titled “All other loans and all leases” for quarters prior to March 31, 2006. ** 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 2011, Volume 5, No. 1 TABLE VIII-A. Trust Services (All FDIC-Insured Institutions) All Insured Institutions (dollar figures in millions) Number of institutions reporting������������������������������������������������ Number of institutions with fiduciary powers���������������������������� Commercial banks�������������������������������������������������������������� Savings institutions������������������������������������������������������������ Number of institutions exercising fiduciary powers������������������ Commercial banks�������������������������������������������������������������� Savings institutions������������������������������������������������������������ Number of institutions reporting fiduciary activity�������������������� Commercial banks�������������������������������������������������������������� Savings institutions������������������������������������������������������������ Fiduciary and related assets - managed assets Personal trust and agency accounts���������������������������������������� Noninterest-bearing deposits*������������������������������������������� Interest-bearing deposits*�������������������������������������������������� U.S. Treasury and U.S. government agency obligations*�� State, county and municipal obligations*�������������������������� Money market mutual funds*��������������������������������������������� Other short-term obligations*��������������������������������������������� Other notes and bonds*����������������������������������������������������� Common and preferred stocks*����������������������������������������� Real estate mortgages*������������������������������������������������������ Real estate*������������������������������������������������������������������������ Miscellaneous assets*������������������������������������������������������� Employee benefit and retirement-related trust and agency accounts: ** Employee benefit - defined contribution**������������������������� Employee benefit - defined benefit**��������������������������������� Other employee benefit and retirement-related accounts**������������������������������������������������������������������� Corporate trust and agency accounts**������������������������������������ Investment management and investment advisory agency accounts**������������������������������������������������������������� Other fiduciary accounts**�������������������������������������������������������� Total managed fiduciary accounts: Assets��������������������������������������������������������������������������������� Number of accounts����������������������������������������������������������� Fiduciary and related assets - nonmanaged assets Personal trust and agency accounts���������������������������������������� Employee benefit and retirement-related trust and agency accounts: Employee benefit - defined contribution���������������������������� Employee benefit - defined benefit������������������������������������ Other employee benefit and retirement-related accounts�� Corporate trust and agency accounts��������������������������������������� Other fiduciary accounts����������������������������������������������������������� Total nonmanaged fiduciary accounts: Assets��������������������������������������������������������������������������������� Number of accounts����������������������������������������������������������� Custody and safekeeping accounts: Assets��������������������������������������������������������������������������������� Number of accounts����������������������������������������������������������� Fiduciary and related services income Personal trust and agency accounts���������������������������������������� Retirement-related trust and agency accounts: Employee benefit - defined contribution���������������������������� Employee benefit - defined benefit������������������������������������ Other employee benefit and retirement-related accounts�� Corporate trust and agency accounts��������������������������������������� Investment management agency accounts������������������������������ Other fiduciary accounts����������������������������������������������������������� Custody and safekeeping accounts������������������������������������������ Other fiduciary and related services income���������������������������� Total gross fiduciary and related services income������������������� Less: Expenses������������������������������������������������������������������ Less: Net losses from fiduciary and related services������� Plus: Intracompany income credits for fiduciary and related services����������������������������������������������������������� Net fiduciary and related services income������������������������������� Asset Size Distribution Dec 31 2010 7,657 2,183 2,012 171 1,632 1,499 133 1,556 1,427 129 Dec 31 2009 8,012 2,243 2,063 180 1,675 1,534 141 1,593 1,456 137 Dec 31 2008 8,305 2,320 2,126 194 1,723 1,571 152 1,634 1,488 146 Dec 31 2007 8,534 2,410 2,216 194 1,785 1,633 152 1,695 1,552 143 % Change 2009-2010 -4.4 -2.7 -2.5 -5.0 -2.6 -2.3 -5.7 -2.3 -2.0 -5.8 Less Than $100 Million 2,622 404 386 18 254 238 16 235 219 16 $100 $1 Billion Greater Million to to Than $1 Billion $10 Billion $10 Billion 4,368 560 107 1,365 338 76 1,273 285 68 92 53 8 1,027 283 68 959 241 61 68 42 7 981 274 66 916 233 59 65 41 7 620,727 7,356 27,460 112,932 191,758 102,875 221,933 382,693 2,051,666 4,477 41,095 90,761 611,854 4,705 27,687 115,292 197,910 156,309 236,104 412,098 2,062,207 2,263 42,314 105,653 616,799 16 11,909 26,760 65,278 56,914 9,722 23,322 348,324 1,565 36,045 37,113 800,662 -53 11,549 31,633 67,110 51,260 21,935 25,486 522,943 1,529 33,942 33,305 1.5 N/M -0.8 -2.0 -3.1 -34.2 -6.0 -7.1 -0.5 97.8 -2.9 -14.1 9,210 22 365 1,621 1,939 1,852 54 1,757 163,445 26 754 19,943 60,597 770 5,509 6,903 11,673 6,610 112 12,384 117,071 298 6,602 7,772 67,793 63 6,017 18,259 24,257 14,018 2,522 14,982 131,960 384 4,598 6,929 483,126 6,500 15,569 86,149 153,888 80,395 219,245 353,570 1,639,191 3,770 29,140 56,117 368,116 612,512 364,923 679,194 283,179 691,568 328,898 1,060,288 0.9 -9.8 73,774 53,943 37,240 10,550 11,574 17,778 245,528 530,241 214,839 187,187 330,034 414,627 14.8 9,516 10,433 14,208 180,682 20,294 17,912 27,834 25,165 13.3 10 645 7,283 12,356 1,174,311 224,490 1,275,688 232,373 1,228,758 164,799 1,544,249 235,080 -7.9 -3.4 53,796 2,356 48,252 8,081 90,508 14,339 981,755 199,714 3,235,289 1,354,280 3,369,131 1,379,517 3,342,971 1,439,103 4,408,969 1,523,997 -4.0 -1.8 202,606 96,334 175,798 188,185 223,483 226,858 2,633,403 842,903 253,258 242,320 307,018 355,356 4.5 3,994 13,475 31,674 204,115 2,089,148 4,450,368 1,527,022 3,805,202 3,967,121 1,911,303 4,052,565 1,287,793 3,919,706 3,332,797 1,606,669 3,990,826 1,544,038 3,887,788 2,595,184 1,822,997 5,333,411 2,098,523 4,428,561 3,360,231 9.3 9.8 18.6 -2.9 19.0 713,411 8,381 698,920 1,726 2,779 25,124 33,341 12,315 13,350 17,872 132,008 68,640 52,328 568,669 24,710 1,218,605 4,340,005 763,459 3,221,457 3,921,760 16,092,119 13,183,957 14,746,484 14,686,535 13,931,523 18,671,945 17,399,080 16,446,703 9.1 -10.2 1,429,212 9,184,609 115,478 336,760 878,029 253,270 13,669,399 3,409,318 67,840,740 10,155,337 56,876,762 9,839,109 50,499,372 10,676,228 58,167,543 11,327,070 19.3 3.2 21,423 52,778 835,708 7,896,347 563,882 293,721 66,419,728 1,912,491 4,306 4,580 4,894 5,766 -6.0 67 285 455 3,498 1,129 1,461 974 1,730 4,748 2,044 8,188 2,071 26,817 20,077 242 1,176 1,450 991 2,080 4,136 1,851 6,920 2,308 25,690 19,243 574 1,095 1,997 1,004 2,529 4,450 2,161 8,337 3,272 30,017 20,564 944 1,183 1,803 1,036 2,439 4,155 2,151 8,165 2,424 29,281 20,587 364 -4.0 0.8 -1.7 -16.8 14.8 10.4 18.3 -10.3 4.4 4.3 -57.8 203 163 35 0 289 3 12 10 787 751 1 59 51 67 19 233 31 273 63 1,201 845 1 215 42 108 344 520 12 496 102 2,313 1,851 6 652 1,205 764 1,366 3,706 1,998 7,408 1,896 22,516 16,630 234 2,983 9,311 2,770 8,446 3,497 11,728 4,549 12,714 7.7 10.2 0 29 33 267 360 798 2,589 8,217 Collective investment funds and common trust funds (market value) Domestic equity funds�������������������������������������������������������� 291,222 260,074 220,444 352,834 12.0 15,823 1,640 10,637 263,122 International/global equity funds��������������������������������������� 128,949 110,116 94,391 182,128 17.1 7,647 3,925 2,992 114,386 Stock/bond blend funds����������������������������������������������������� 95,007 90,245 127,218 215,849 5.3 10,677 278 2,018 82,034 Taxable bond funds������������������������������������������������������������ 199,794 171,755 159,443 160,339 16.3 8,956 45,979 3,832 141,027 Municipal bond funds��������������������������������������������������������� 6,154 7,127 7,029 8,328 -13.7 51 430 674 5,000 Short-term investments/money market funds������������������� 213,954 251,756 249,266 336,721 -15.0 2,029 7,789 589 203,547 Specialty/other funds��������������������������������������������������������� 89,392 95,044 97,791 121,568 -5.9 31,023 2,099 3,445 52,826 Total collective investment funds���������������������������������������������� 1,024,472 986,117 955,583 1,377,767 3.9 76,204 62,139 24,186 861,942 * After 2008, includes personal trust and agency accounts, investment management agency accounts, employee benefit accounts, retirement-related accounts, and all other managed asset accounts. ** After 2008, included in managed assets, above. N/M - Not Meaningful FDIC Quarterly 14 2011, Volume 5, No. 1 Quarterly Banking Profile INSURANCE FUND INDICATORS ■ ■ ■ ■ ■ Insured Deposits Grow by 14.7 Percent Due Primarily to Temporary Change in Coverage for Certain Deposits DIF Reserve Ratio Rises Three Basis Points to -0.12 Percent 30 Institutions Fail during Fourth Quarter Final Rule Adopted in December 2010 Sets the Designated Reserve Ratio at 2 Percent Final Rule Adopted in February 2011 Establishes a New Assessment Base, Changes Assessment Rates and Deposit Insurance Fund Dividend Provisions, and Revises Risk-Based Pricing for All Large Insured Depository Institutions Total assets of the nation’s 7,657 FDIC-insured commercial banks and savings institutions decreased by 0.4 percent ($51.8 billion) during fourth quarter 2010. Total deposits increased by 1.6 percent ($149.3 billion), domestic office deposits increased by 1.7 percent ($135.0 billion), and foreign office deposits increased by 0.9 percent ($14.2 billion). Domestic noninterestbearing deposits increased by 5.1 percent ($81.8 billion) and savings deposits and interest bearing checking accounts increased by 4.1 percent ($167.2 billion), while domestic time deposits decreased by 5.4 percent ($113.9 billion). For all of 2010, total domestic deposits grew by 2.3 percent ($176.3 billion), with domestic noninterest-bearing deposits rising by 8.8 percent ($136.9 billion) and domestic interest-bearing deposits increasing by 0.6 percent ($39.4 billion). increased during the quarter at 5,591 institutions (73 percent), decreased at 2,033 institutions (27 percent), and remained unchanged at 30 institutions. The DIF balance increased by $657 million during the fourth quarter to -$7.4 billion (unaudited), the fourth consecutive quarterly increase following seven quarters of decline. The increased amount included $3.5 billion from accrued assessment income and $87 million from interest on securities and other revenue. Additional loss provisions of $2.4 billion offset much of the boost to the fund from revenue. Unrealized losses on availablefor-sale securities and operating expenses also reduced the fund by $482 million. The DIF’s reserve ratio was -0.12 percent on December 31, 2010, up from -0.15 percent at September 30, 2010, and up from -0.39 percent one year earlier. Thirty FDIC-insured institutions with combined assets of $8.8 billion failed during fourth quarter 2010. For all of 2010, 157 insured institutions with combined assets of $92.1 billion failed. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), enacted July 21, 2010, provides temporary unlimited deposit insurance coverage for noninterest-bearing transaction accounts from December 31, 2010, through December 31, 2012, regardless of the balance in the account and the ownership capacity of the funds. The unlimited coverage is available to all depositors, including consumers, businesses, and government entities. The coverage is separate from, and in addition to, the insurance coverage provided for a depositor’s other accounts held at an FDIC-insured bank. Beginning December 31, 2010, the entire balances of noninterest-bearing transaction accounts will be included in estimated insured deposits used to calculate the Deposit Insurance Fund (DIF) reserve ratio. Changes to Deposit Insurance Fund Management and Risk-Based Assessments On December 14, 2010, the FDIC Board of Directors (Board) adopted a final rule increasing the Designated Reserve Ratio (DRR) of the DIF to 2 percent of estimated insured deposits, using new authority provided by Dodd-Frank. On February 7, 2011, the Board adopted a final rule, effective April 1, 2011, that redefines the deposit insurance assessment base as required by DoddFrank, changes assessment rates adjustments and DIF dividend rules, finalizes new assessment rate schedules, and revises the risk-based assessment system for large insured depository institutions (generally, those institutions with at least $10 billion in total assets). Primarily as a result of the coverage change, estimated insured deposits at all FDIC-insured institutions increased sharply—by $799.4 billion (14.7 percent)— in fourth quarter 2010. For institutions existing at the start and end of the fourth quarter, insured deposits FDIC Quarterly 15 2011, Volume 5, No. 1 Designated Reserve Ratio The FDIC must set a DRR each year. Dodd-Frank raised the minimum DRR to 1.35 percent from 1.15 percent of estimated insured deposits. It also removed the upper limit (formerly 1.5 percent) on the DRR. In December 2010, the Board adopted a final rule setting the DRR at 2 percent. The FDIC views this target as a long-term minimum goal for the fund. An analysis conducted by FDIC staff found that a 2 percent target would significantly improve the chances that the FDIC could maintain stable, moderate insurance assessment rates through economic or banking cycles while also maintaining a positive DIF balance even during a serious economic or banking downturn. Table 1 compares the distribution of the current and estimated new assessment bases by institution asset size, using data as of December 31, 2010. The new assessment base, which will take effect April 1, 2011, will require collection of some data not yet available. The table therefore provides only an estimate of what the assessment base would be if it were in effect as of December 31, 2010. Dodd-Frank requires that, for at least five years, the FDIC must make available to the public the reserve ratio and the DRR using both estimated insured deposits and the new assessment base. As explained in the footnotes to Table 1, the new assessment base will require some changes in reporting, so only an estimate is available at this time. As of December 31, 2010, the FDIC reserve ratio would have been -0.06 percent using the new assessment base (compared to -0.12 percent using estimated insured deposits), and the 2 percent DRR based on estimated insured deposits would have been 1.0 percent using the estimated new assessment base. Change in the Assessment Base Dodd-Frank required the FDIC to amend its regulations to define the assessment base as average consolidated total assets minus average tangible equity, rather than total domestic deposits (the assessment base, with minor adjustments, that has been in place since 1935). The final rule requires that all insured depository institutions report average daily balances of consolidated total assets during the quarter. However, existing institutions with assets of less than $1 billion may report average weekly balances, unless they choose to report daily averages. Once an institution reports using daily averages, however, it would have to continue to do so. Under the final rule, Tier 1 capital is the measure for tangible equity. Institutions will report the average of month-end balances of Tier 1 capital, but existing institutions with less than $1 billion in average consolidated total assets could report the end-of-quarter amount of Tier 1 capital. As allowed by Dodd-Frank, the final rule deducts low-risk, liquid assets from the assessment base for banker’s banks and custodial banks.1 Adjustments to Assessment Rates The current assessment rate schedule incorporates adjustments for types of funding that either pose heightened risk to the DIF or that help offset risk to the DIF. Because the magnitude of these adjustments is calibrated to a domestic deposit assessment base, the final rule recalibrates the unsecured debt and brokered deposit adjustments, and eliminates the secured liability adjustment.2 The final rule also adds a depository institution debt adjustment for institutions that hold the long-term unsecured debt of other insured depository The final rule changes the assessment rate reduction for long-term unsecured liabilities so that the effect of the assessment system on an institution’s cost of borrowing long-term unsecured debt will remain unchanged. The final rule changes the cap on the adjustment from 5 basis points to the lesser of 5 basis points or 50 percent of an institution’s initial base assessment rate to ensure that no institution’s assessment rate is zero or close to zero. In addition, the final rule removes Qualified Tier 1 capital from the definition of long-term unsecured liabilities for small institutions, since it is already deducted from the assessment base. The final rule also eliminates debt that is redeemable within one year of the reporting date from qualifying as long-term, since such a redemption option negates the benefit to the DIF of long-term debt. The final rule retains the brokered deposit adjustment of 25 basis points times the ratio of brokered deposits in excess of 10 percent of domestic deposits to the new assessment base. For small institutions, the adjustment would continue to apply only to institutions in Risk Categories II, III, and IV. For large institutions, the final rule provides an exemption from the adjustment for institutions that are well-capitalized and have a composite CAMELS rating of 1 or 2. The final rule maintains the 10 basis points cap on the brokered deposit adjustment. 2 A banker’s bank could deduct the sum of its average balances due from Federal Reserve Banks (reserve balances) plus its average federal funds sold. The amount of this deduction, however, could not exceed the sum of the bank’s average deposit liabilities from commercial banks and other depository institutions in the United States plus its average federal funds purchased. Funds resulting from government capital infusion programs, FDIC stock ownership, and employee compensation plan stock ownership will not disqualify a bank from being considered a banker’s bank. The final rule defines a custodial bank as an insured depository institution having previous calendar year-end fiduciary account and custody and safekeeping account assets of at least $50 billion or an insured depository institution deriving at least 50 percent of its revenue from fiduciary accounts and custody and safekeeping accounts over the previous calendar year. Low-risk assets would be assets with a Basel risk weighting of 0 percent, regardless of maturity, plus 50 percent of those assets with a Basel risk weighting of 20 percent, again regardless of maturity, subject to the limitation that the value of these assets could not exceed the daily or weekly average value of those deposits classified as transaction accounts and identified by the institution as being directly linked to a fiduciary or custody and safekeeping account. 1 FDIC Quarterly 16 2011, Volume 5, No. 1 Quarterly Banking Profile Table 1: Distribution of the Assessment Base for FDIC-Insured Commercial Banks and Savings Institutions by Asset Size ($ Billions)* Data as of December 31, 2010 Asset Size Less than $1 Billion $1 - $10 Billion Number of Institutions Current Assessment Base** Percent of Total Institutions 6,990 Percent of Current Base Estimated New Assessment Base*** Percent of Estimated New Base 91.3% 1,195 15.2% 1,305 10.7% 10.6% 560 7.3% 1,100 14.0% 1,298 $10 - $50 Billion 70 0.9% 896 11.4% 1,217 9.9% $50 - $100 Billion 18 0.2% 763 9.7% 1,088 8.9% 19 0.2% 3,913 49.7% 7,331 59.9% 7,657 100.0% 7,867 100.0% 12,239 100.0% Over $100 Billion Total * Excludes ten insured U.S. branches of foreign banks. ** The current assessment base is derived from domestic deposits. *** The estimates are derived from average quarterly assets as reported on the Call Report or Thrift Financial Report for December 31, 2010. Institutions currently report their quarterly average assets as an average of either daily or weekly amounts. The estimates also rely on quarter-end Tier 1 capital as reported for December 31. In addition, the estimated amounts do not account for the adjustments permitted for banker’s banks or custodial banks. Table 2: Initial and Total Base Assessment Rates* Risk Category I Initial base assessment rate Risk Category II Risk Category III Risk Category IV Large and Highly Complex Institutions 5–9 14 23 35 Unsecured debt adjustment** -4.5–0 -5–0 -5–0 -5–0 5–35 -5–0 Brokered deposit adjustment — 0–10 0–10 0–10 0–10 Total Base Assessment Rate 2.5–9 9–24 18–33 30–45 2.5–45 * Total base assessment rates do not include the depository institution debt adjustment. ** The unsecured debt adjustment could not exceed the lesser of 5 basis points or 50 percent of an institution’s initial base assessment rate (IBAR). Thus, for example, an institution with an IBAR of 5 basis points would have a maximum unsecured debt adjustment of 2.5 basis points and could not have a total base assessment rate lower than 2.5 basis points. Assessment Rate Schedules The final rule adopts the assessment rate schedules, shown in Table 2 above. Initial and total base assessment rates become effective April 1, 2011.4 institutions above a certain threshold.3 These changes should more accurately reflect the risk that these funding sources pose to the DIF. Dividends To increase the probability that the fund reserve ratio will reach a level sufficient to withstand a future crisis, the final rule suspends dividends indefinitely, consistent with the FDIC’s long-term, comprehensive plan for fund management. In lieu of dividends, the final rule would adopt progressively lower assessment rate schedules when the reserve ratio exceeds 2 percent and 2.5 percent, as discussed below. This rate schedule should result in approximately the same assessment revenue that the FDIC would otherwise have collected using the assessment rate schedule under the Restoration Plan adopted by the Board on October 19, 2010. Effective beginning the quarter after the fund reserve ratio first meets or exceeds 1.15 percent, initial base assessment rates would range from 3 basis points to 30 basis points. Under these rates, the average assessment rate would approximately equal the long-term moderate, steady assessment rate—5.3 basis points—that The final rule creates a new adjustment (the Depository Institution Debt Adjustment) that applies a 50 basis point charge to every dollar of long-term unsecured debt held by an insured depository institution that was issued by another insured depository institution. This adjustment is intended to offset the benefit received by institutions that issue long-term, unsecured liabilities when those liabilities are held by other insured depository institutions, since the risk of this debt remains in the banking system. Under the final rule, however, the FDIC will exclude the first 3 percent of an institution’s Tier 1 capital from the amount of debt reported when calculating the adjustment. 3 FDIC Quarterly The final rule would allow the Board to adopt actual rates that are higher or lower than total base assessment rates without the necessity of further notice-and-comment rulemaking, provided that the Board could not increase or decrease rates from one quarter to the next by more than 2 basis points (down from 3 basis points in the current rule), and cumulative increases and decreases could not be more than 2 basis points (down from 3 basis points in the current rule) higher or lower than the total base assessment rates. 4 17 2011, Volume 5, No. 1 Large Bank Pricing The final rule eliminates risk categories for large institutions.5 In addition, as required by Dodd-Frank, the final rule no longer uses long-term debt issuer ratings to calculate assessment rates for large institutions. The new large bank pricing rule combines CAMELS ratings and certain forward-looking financial measures 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).6 The FDIC retains its ability to take additional information into account to make a limited adjustment to an institution’s total score (the large bank adjustment), which will be used to determine an institution’s initial base assessment rate. would have been needed to maintain a positive fund balance throughout past crises. The final rule also sets out two assessment rate schedules that would take effect without further action by the Board when the fund reserve ratio meets or exceeds 2 percent and 2.5 percent. Historical analysis by FDIC staff revealed that reducing the 5.3 basis point weighted average assessment rate by 25 percent when the reserve ratio reached 2 percent and by 50 percent when the reserve ratio reached 2.5 percent would have allowed the fund to remain positive during prior banking crises and would have successfully limited rate volatility. Author: Kevin Brown, Sr. Financial Analyst Division of Insurance and Research (202) 898-6817 Generally, these are institutions with at least $10 billion in assets. In general, a highly complex institution is an institution (other than a credit card bank) with more than $50 billion in total assets that is controlled by a parent or intermediate parent company with more than $500 billion in total assets or a processing bank or trust company with total fiduciary assets of $500 billion or more. 5 6 FDIC Quarterly 18 2011, Volume 5, No. 1 Quarterly Banking Profile Table I-B. Insurance Fund Balances and Selected Indicators Deposit Insurance Fund* 4th 3rd 2nd 1st Quarter Quarter Quarter Quarter 2009 2009 2009 2009 -$8,243 $10,368 $13,007 $17,276 4th Quarter 2010 -$8,009 3rd Quarter 2010 -$15,247 2nd Quarter 2010 -$20,717 1st Quarter 2010 -$20,862 3,498 3,592 3,242 3,278 3,042 39 40 64 62 0 452 0 414 0 382 0 345 2,446 -3,763 -2,552 48 94 -30 657 Ending Fund Balance����������� Percent change from four quarters earlier��������� Reserve Ratio (%)����������������� (dollar figures in millions) Beginning Fund Balance����� Changes in Fund Balance: Assessments earned�������������� Interest earned on investment securities������ Realized gain on sale of investments���������������������� Operating expenses��������������� Provision for insurance losses������������������������������� All other income, net of expenses��������������� Unrealized gain/(loss) on available-for-sale securities������������������������� Total fund balance change����� Estimated Insured Deposits**������������������������������ Percent change from four quarters earlier��������� Domestic Deposits��������������� Percent change from four quarters earlier��������� 1st Quarter 2008 $52,413 4th Quarter 2007 $51,754 996 881 640 448 239 76 176 240 212 277 526 651 618 585 0 379 732 328 521 298 136 266 302 290 473 249 0 256 0 238 0 262 3,021 17,766 21,694 11,615 6,637 19,163 11,930 10,221 525 39 55 22 2,721 308 375 2 15 16 1 0 -2 163 7,238 -61 5,470 149 145 -313 -12,619 -770 -18,611 -957 -2,639 -331 -4,269 551 -17,312 -346 -10,629 1,559 -7,626 127 430 138 659 -7,352 -8,009 -15,247 -20,717 -20,862 -8,243 10,368 13,007 17,276 34,588 45,217 52,843 52,413 NM NM NM NM NM NM -77.07 -75.39 -67.04 -33.17 -11.73 4.13 4.48 -0.12 -0.15 -0.28 -0.38 -0.39 -0.16 0.22 0.27 0.36 0.76 1.01 1.19 1.22 6,221,127 5,421,701 5,437,753 5,472,251 5,407,733 5,315,912 4,817,784 4,831,749 4,750,783 4,545,198 4,468,087 4,438,256 4,292,211 15.04 1.99 12.87 13.26 13.83 16.96 7.83 8.87 10.68 7.13 5.50 4.55 3.33 7,887,730 7,753,382 7,681,261 7,702,420 7,705,329 7,561,309 7,561,998 7,546,999 7,505,409 7,230,328 7,036,267 7,076,719 6,921,678 2.37 2.54 1.58 2.06 2.66 4.58 7.47 6.65 8.43 7.15 5.04 5.58 4.24 7,667 7,771 7,840 7,944 8,022 8,109 8,205 8,257 8,315 8,394 8,462 8,505 8,545 Deposit Insurance Fund Balance and Insured Deposits ($ Millions) DIF Reserve Ratios 1.19 1.01 0.76 0.36 0.27 0.22 -0.16 -0.39 -0.38 -0.28 -0.15 -0.12 12/07 2nd Quarter 2008 $52,843 9,095 Percent of Insured Deposits 1.22 3rd Quarter 2008 $45,217 2,965 Number of institutions reporting������������������������� 2,615 4th Quarter 2008 $34,588 6/08 12/08 6/09 12/09 6/10 12/10 DIF Balance DIF-Insured Deposits 12/07 $52,413 $4,292,211 3/08 52,843 4,438,256 6/08 45,217 4,468,087 9/08 34,588 4,545,198 12/08 17,276 4,750,783 4,831,749 3/09 13,007 6/09 10,368 4,817,784 9/09 -8,243 5,315,912 12/09 -20,862 5,407,733 3/10 -20,717 5,472,251 6/10 -15,247 5,437,753 9/10 -8,009 5,421,701 12/10 -7,352 6,221,127 Table II-B. Problem Institutions and Failed/Assisted Institutions (dollar figures in millions) Problem Institutions Number of institutions������������������������������������������������ Total assets����������������������������������������������������������������� 2010 884 $390,017 2009 2008 702 $402,782 252 $159,405 2007 76 $22,189 2006 50 $8,265 2005 52 $6,607 2004 80 $28,250 Failed Institutions 0 0 Number of institutions������������������������������������������������ 157 140 25 3 4 $0 $0 Total assets����������������������������������������������������������������� $92,085 $169,709 $371,945 $2,615 $170 Assisted Institutions*** 0 0 Number of institutions������������������������������������������������ 0 8 5 0 0 0 0 $0 $1,917,482 $1,306,042 0 Total assets����������������������������������������������������������������� 0 * Quarterly financial statement results are unaudited. NM - Not meaningful ** Beginning in the third quarter of 2009, estimates of insured deposits are based on a $250,000 general coverage limit. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) temporarily provides unlimited coverage for noninterest bearing transaction accounts for two years beginning December 31, 2010. Beginning in the fourth quarter of 2010, estimates of insured deposits include the entire balance of noninterest bearing transaction accounts. *** Assisted institutions represent five institutions under a single holding company that received assistance in 2008, and eight institutions under a different single holding company that received assistance in 2009. FDIC Quarterly 19 2011, Volume 5, No. 1 Table III-B. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) Number of Institutions December 31, 2010 Commercial Banks and Savings Institutions Total Assets Domestic Deposits* Est. Insured Deposits FDIC-Insured Commercial Banks����������������������������������������������� FDIC-Supervised������������������������������������������������������������������� OCC-Supervised�������������������������������������������������������������������� Federal Reserve-Supervised������������������������������������������������� 6,529 4,317 1,383 829 $12,067,603 1,938,319 8,432,251 1,697,034 $6,964,671 1,471,937 4,463,256 1,029,478 $5,396,467 1,196,616 3,415,813 784,038 FDIC-Insured Savings Institutions���������������������������������������������� OTS-Supervised Savings Institutions������������������������������������ FDIC-Supervised State Savings Banks��������������������������������� 1,128 730 398 1,253,780 933,026 320,754 908,449 671,611 236,838 811,092 600,521 210,571 Total Commercial Banks and Savings Institutions���������������������� 7,657 13,321,383 7,873,120 6,207,559 Other FDIC-Insured Institutions U.S. Branches of Foreign Banks������������������������������������������������� 10 30,475 14,611 13,568 Total FDIC-Insured Institutions���������������������������������������������������� .. 7,667 13,351,857 7,887,730 6,221,127 * Excludes $1.5 trillion in foreign office deposits, which are uninsured. Table IV-B. Distribution of Institutions and Domestic Deposits Among Risk Categories Quarter Ending September 30, 2010 (dollar figures in billions) Risk Category I Risk Category II Risk Category III Risk Category IV Annual Rate in Basis Points* 7.00-12.00 12.01- 14.00 14.01- 15.99 16.00-24.00 17.00-22.00 22.01-43.00 27.00-32.00 32.01-58.00 40.00-45.00 45.01-77.50 Number of Institutions 1,813 1,502 1,784 364 1,196 244 538 149 137 44 Percent of Total Institutions 23.33 19.33 22.96 4.68 15.39 3.14 6.92 1.92 1.76 0.57 Domestic Deposits $715 1,669 1,909 432 2,276 452 172 74 42 13 Percent of Total Domestic Deposits 9.22 21.52 24.62 5.57 29.35 5.83 2.22 0.95 0.54 0.17 Note: Institutions are categorized based on supervisory ratings, debt ratings and financial data as of September 30, 2010. * See 12 CFR Part 327 for factors determining risk categories and risk based assessment rates. FDIC Quarterly 20 2011, Volume 5, No. 1 Quarterly Banking Profile TEMPORARY LIQUIDITY GUARANTEE PROGRAM Debt Guarantee Program Ended October 31, 2009 ■ Transaction Account Guarantee Program Ended December 31, 2010 ■ All Noninterest-Bearing Transaction Deposit Accounts Insured under Dodd-Frank Reform Bill ■ $267 Billion Outstanding in Debt Guarantee Program ■ A final rule extending the TAGP six months, to June 30, 2010, was adopted on August 26, 2009. On June 22, 2010, the Board adopted a final rule extending the TAGP for another six months, through December 31, 2010. FDIC Responds to Market Disruptions with TLGP The FDIC Board of Directors (Board) approved the Temporary Liquidity Guarantee Program (TLGP) on October 13, 2008, as major disruptions in credit markets blocked access to liquidity for financial institutions.1 The TLGP improved access to liquidity through two programs: the Transaction Account Guarantee Program (TAGP), which fully guarantees noninterest-bearing transaction deposit accounts above $250,000, regardless of dollar amount; and the Debt Guarantee Program (DGP), which guarantees eligible senior unsecured debt issued by eligible institutions. Noninterest-Bearing Transaction Accounts Fully Insured under Dodd-Frank Reform Bill According to the Dodd-Frank Wall Street Reform and Consumer Protection Act, noninterest-bearing transaction accounts at all FDIC-insured institutions will be fully insured for two years. This amendment became effective on December 31, 2010. Coverage of noninterest-bearing transaction accounts is separate from the regular insurance limit of $250,000. Assessments for noninterest-bearing transaction accounts will be included in the regular assessments for insured institutions.3 All insured depository institutions were eligible to participate in the TAGP. Institutions eligible to participate in the DGP were insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of insured depository institutions that the FDIC designated as eligible entities. Program Funded by Industry Fees and Assessments The TLGP did not rely on taxpayer funding or the Deposit Insurance Fund. Both the TAGP and the DGP were paid for by direct user fees. As of March 31, 2010, fees totaling $10.4 billion had been assessed under the DGP. A total of $1.1 billion in fees had been collected under the TAGP by December 31, 2010. FDIC Extends Guarantee Programs Although financial markets improved significantly in the first half of 2009, portions of the industry were still affected by the recent economic turmoil. To facilitate the orderly phase-out of the TLGP, and to continue access to FDIC guarantees where they were needed, the Board extended both the DGP and TAGP. A Majority of Eligible Entities Chose to Participate in the TLGP On March 17, 2009, the Board voted to extend the deadline for issuance of guaranteed debt from June 30, 2009, to October 31, 2009, and to extend the expiration date of the guarantee to the earlier of maturity of the debt or December 31, 2012, from June 30, 2012. The Board adopted a final rule on October 20, 2009, that allowed the DGP to expire on October 31, 2009.2 About 74 percent of FDIC-insured institutions opted in to the TAGP extension through December 31, 2010. More than half of all eligible entities opted in to the DGP. Lists of institutions that opted out of the guarantee programs are posted at http://www.fdic.gov/ regulations/resources/TLGP/optout.html. The FDIC invoked the systemic risk exception pursuant to section 141 of the Federal Deposit Improvement Act of 1991, 12 U.S.C 1823(c)(4) on October 13, 2008. For further information on the TLGP, see http://www.fdic.gov/regulations/resources/TLGP/index.html. 2 See http://www.fdic.gov/regulations/laws/federal/2009/09final AD37Oct23.pdf. 1 FDIC Quarterly 3 21 See http://www.fdic.gov/regulations/reform/summary.html. 2011, Volume 5, No. 1 Debt outstanding at December 31, 2010, had longer terms at issuance, compared with debt outstanding at year-end 2008. Over 90 percent matures more than two years after issuance, compared with 39 percent at December 31, 2008. Among types of debt instruments, 92 percent was in medium-term notes, compared with 44 percent at year-end 2008. The share of outstanding debt in commercial paper fell to 0 percent from 43 percent at year-end 2008. $114 Billion in Transaction Accounts over $250,000 Guaranteed According to fourth quarter 2010 Call and Thrift Financial Reports, insured institutions participating in the TAGP reported an average of 198,361 noninterestbearing transaction accounts over $250,000 during the quarter. The average deposit balances in these accounts totaled $164 billion, of which $114 billion was guaranteed under the TAGP. More than 5,100 FDIC-insured institutions reported TAGP accounts.4 Author: $267 Billion in FDIC-Guaranteed Debt Was Outstanding at December 31, 2010 Katherine Wyatt Chief, Financial Analysis Section Division of Insurance and Research (202) 898-6755 Sixty-six financial entities—39 insured depository institutions and 27 bank and thrift holding companies and nonbank affiliates—had $267 billion in guaranteed debt outstanding at the end of fourth quarter 2010. Some banking groups issued FDIC-guaranteed debt at both the subsidiary and holding company level, but most guaranteed debt was issued by holding companies or nonbank affiliates of depository institutions. Bank and thrift holding companies and nonbank affiliates issued 85 percent of FDIC-guaranteed debt outstanding at December 31, 2010. Insured institutions participating in the TAGP reported the average daily amount in TAGP accounts and the average daily number of TAGP accounts in their September 30, 2010, and December 31, 2010, Call and Thrift Financial Reports. 4 FDIC Quarterly 22 2011, Volume 5, No. 1 Quarterly Banking Profile Table I-C. Participation in Temporary Liquidity Guarantee Program December 31, 2010 Total Eligible Entities Transaction Account Guarantee Program Extension to December 31, 2010 Depository Institutions with Assets <= $10 Billion�������������������������������� 7,558 Depository Institutions with Assets > $10 Billion���������������������������������� 108 Total Depository Institutions*���������������������������������������������������������� 7,666 Debt Guarantee Program Depository Institutions with Assets <= $10 Billion�������������������������������� Depository Institutions with Assets > $10 Billion���������������������������������� Total Depository Institutions*���������������������������������������������������������� Bank and Thrift Holding Companies and Non-Insured Affiliates��������� All Entities���������������������������������������������������������������������������������������� * Depository institutions include insured branches of foreign banks (IBAs). Number Opting In 7,558 108 7,666 5,992 13,658 Percent Opting In 5,631 33 5,664 74.5% 30.6% 73.9% 3,954 95 4,049 3,363 7,412 52.3% 88.0% 52.8% 56.1% 54.3% Table II-C. Cap on FDIC-Guaranteed Debt for Opt-In Entities December 31, 2010 (dollar figures in millions) Depository Institutions with Assets <= $10 Billion*������������������������������������ Depository Institutions with Assets > $10 Billion*�������������������������������������� Bank and Thrift Holding Companies, Noninsured Affiliates����������� Total��������������������������������������������������������� Opt-In Depository Institutions with no Senior Unsecured Debt at 9/30/2008 2% Liabilities as of Number 9/30/2008 Opt-In Entities with Senior Unsecured Debt Outstanding at 9/30/2008 Debt Amount as of Number 9/30/2008 Initial Cap Total Entities Total Initial Cap 109 $3,362 $4,203 3,845 $29,372 3,954 $33,574 39 269,228 336,535 56 23,320 95 359,855 81 229 397,714 670,305 497,143 837,881 3,282 7,183 N/A 52,692 3,363 7,412 497,143 890,572 * Depository institutions include insured branches of foreign banks (IBAs). N/A - Not applicable Table III-C. Transaction Account Guarantee Program (dollar figures in millions) Number of Noninterest-Bearing Transaction Accounts over $250,000�������������������������������������������������������������� Amount in Noninterest-Bearing Transaction .Accounts over $250,000�������������������������������������������������������������� Amount Guaranteed���������������������������������������������������������� Dec. 31, 2009 Mar. 31, 2010 June 30, 2010 Sep. 30, 2010* Dec. 31, 2010* % Change 10Q3-10Q4 687,854 308,911 320,164 183,533 198,361 8.1% $1,006,463 $834,499 $355,492 $278,265 $344,473 $264,432 $155,200 $109,317 $163,837 $114,247 5.6% 4.5% *Banks participating in TAGP reported daily averages for the amount in and number of noninterest-transaction accounts over $250,000 in their September 30 and December 31, 2010, Call and Thrift Financial Reports. Table IV-C. Debt Outstanding in Guarantee Program December 31, 2010 (dollar figures in millions) Insured Depository Institutions Assets <= $10 Billion��������������������������������������������������������� Assets > $10 Billion����������������������������������������������������������� Bank and Thrift Holding Companies, Noninsured Affiliates��� All Issuers������������������������������������������������������������������������� Number Debt Outstanding 27 12 27 66 $1,586 37,566 227,915 267,066 Cap* for Group Debt Outstanding Share of Cap $1,665 106,317 386,223 494,205 95.3% 35.3% 59.0% 54.0% * The amount of FDIC-guaranteed debt that can be issued by each eligible entity, or its “cap,” is based on the amount of senior unsecured debt outstanding as of September 30, 2008. The cap for a depository institution with no senior unsecured debt outstanding at September 30, 2008, is set at 2 percent of total liabilities. See http://www2.fdic.gov/qbp/2008dec/tlgp2c.html for more information. FDIC Quarterly 23 2011, Volume 5, No. 1 Table V-C. Fees Assessed Under TLGP (dollar figures in millions) Fourth Quarter 2008��������������������������������������������������� First Quarter 2009������������������������������������������������������ Second Quarter 2009������������������������������������������������� Third Quarter 2009����������������������������������������������������� Fourth Quarter 2009��������������������������������������������������� First Quarter 2010**���������������������������������������������������� Second Quarter 2010������������������������������������������������� Third Quarter 2010������������������������������������������������������ Fourth Quarter 2010��������������������������������������������������� Total���������������������������������������������������������������������� Debt Guarantee Program Total Fees Assessed Surcharges Total Fee Amount $3,437 $3,437 3,433 3,433 1,413 385 1,797 691 280 971 503 207 709 14 14 $9,491 $872 Transaction Account Guarantee Program* Fees Collected 90 179 182 188 207 115 111 48 $1,120 $10,363 * Prorated payment in arrears ** A review of data systems led us to recognize a nominal fee amount that had been dropped in error from previously reported amounts. Table VI-C. Term at Issuance of Debt Instruments Outstanding December 31, 2010 (dollar figures in millions) Term at Issuance 90 days or less�������������������������������������� 91-180 days������������������������������������������� 181-364 days����������������������������������������� 1-2 years����������������������������������������������� Over 2-3 years�������������������������������������� Over 3 years������������������������������������������ Total������������������������������������������������ Share of Total���������������������������������������� FDIC Quarterly Interbank Other Commercial Eurodollar Medium Interbank Paper Deposits Term Notes Deposits $0 0 0 0 0 0 0 0.0% $0 0 0 0 0 0 0 0.0% $0 0 0 24,400 80,447 139,982 244,829 91.7% 24 $0 0 0 0 0 4 4 0.0% Other Senior Unsecured Other Debt Term Note $0 0 0 0 3,352 3,713 7,064 2.6% $0 0 0 16 6,002 9,151 15,170 5.7% All Debt $0 0 0 24,416 89,801 152,849 267,066 Share by Term 0.0% 0.0% 0.0% 9.1% 33.6% 57.2% 2011, Volume 5, No. 1 Quarterly Banking Profile Notes to Users periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s) are included in average assets since the year-to-date income includes the results of all merged institutions. No adjustments are made for “purchase accounting” mergers. Growth rates represent the percentage change over a 12-month period in totals for institutions in the base period to totals for institutions in the current period. All data are collected and presented based on the location of each reporting institution’s main office. Reported data may include assets and liabilities located outside of the reporting institution’s home state. In addition, institutions may relocate across state lines or change their charters, resulting in an inter-regional or inter-industry migration, e.g., institutions can move their home offices between regions, and savings institutions can convert to commercial banks or commercial banks may convert to savings institutions. This publication contains financial data and other information for depository institutions insured by the Federal Deposit Insur ance Corporation (FDIC). These notes are an integral part of this publication and provide information regarding the com parability of source data and reporting differences over time. Tables I-A through VIII-A. The information presented in Tables I-A through V-A of the FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and savings institutions. Tables VI-A (Derivatives) and VII-A (Servicing, Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered savings banks that file quarterly Call Reports. Table VIII-A (Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured institutions. Some tables are arrayed by groups of FDIC-insured institutions based on predominant types of asset concentration, while other tables aggregate institutions by asset size and geographic region. Quarterly and full-year data are provided for selected indicators, including aggregate condition and income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off information for loans outstanding and other assets. ACCOUNTING CHANGES Extended Net Operating Loss Carryback Period – The Worker, Homeownership, and Business Assistance Act of 2009, which was enacted on November 6, 2009, permits banks and other businesses, excluding those banking organizations that received capital from the U.S. Treasury under the Troubled Asset Relief Program, to elect a net operating loss carryback period of three, four, or five years instead of the usual carryback period of two years for any one tax year ending after December 31, 2007, and beginning before January 1, 2010. For calendar year banks, this extended carryback period applies to either the 2008 or 2009 tax year. The amount of the net operating loss that can be carried back to the fifth carryback year is limited to 50 percent of the available taxable income for that fifth year, but this limit does not apply to other carryback years. Under generally accepted accounting principles, banks may not record the effects of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the fourth quarter of 2009. Therefore, banks should recognize the effects of this fourth quarter 2009 tax law change on their current and deferred tax assets and liabilities, including valuation allowances for deferred tax assets, in their Call Reports for December 31, 2009. Banks should not amend their Call Reports for prior quarters for the effects of the extended net operating loss carryback period. The American Recovery and Reinvestment Act of 2009, which was enacted on February 17, 2009, permits qualifying small businesses, including FDIC-insured institutions, to elect a net operating loss carryback period of three, four, or five years instead of the usual carryback period of two years for any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally accepted accounting principles, institutions may not record the effect of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the first quarter of 2009. Troubled Debt Restructurings – Many institutions are restructuring or modifying the terms of loans to provide payment relief for those borrowers who have suffered deterioration in their financial condition. Such loan restructurings may include, but are not limited to, reductions in principal or accrued interest, reductions in interest rates, and extensions of the maturity date. Modifications may be executed at the original contractu- Tables I-B through IV-B. A separate set of tables (Tables I-B through IV-B) provides comparative quarterly data related to the Deposit Insurance Fund (DIF), problem institutions, failed/assisted institutions, estimated FDIC-insured deposits, as well as assessment rate information. Depository institutions that are not insured by the FDIC through the DIF are not included in the FDIC Quarterly Banking Profile. U.S. branches of institutions headquartered in foreign countries and non-deposit trust companies are not included unless otherwise indicated. Efforts are made to obtain financial reports for all active institutions. However, in some cases, final financial reports are not available for institutions that have closed or converted their charters. DATA SOURCES The financial information appearing in this publication is obtained primarily from the Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income (Call Reports) and the OTS Thrift Financial Reports submitted by all FDIC-insured depository institutions. This information is stored on and retrieved from the FDIC’s Research Information System (RIS) data base. COMPUTATION METHODOLOGY Parent institutions are required to file consolidated reports, while their subsidiary financial institutions are still required to file separate reports. Data from subsidiary institution reports are included in the Quarterly Banking Profile tables, which can lead to double-counting. No adjustments are made for any double-counting of subsidiary data. Additionally, certain adjustments are made to the OTS Thrift Financial Reports to provide closer conformance with the reporting and accounting requirements of the FFIEC Call Reports. All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-ofperiod amount plus end-of-period amount plus any interim FDIC Quarterly 25 2011, Volume 5, No. 1 al interest rate on the loan, a current market interest rate, or a below-market interest rate. Many of these loan modifications meet the definition of a troubled debt restructuring (TDR). The TDR accounting and reporting standards are set forth in ASC Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors (formerly FASB Statement No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings,” as amended). This guidance specifies that a restructuring of a debt constitutes a TDR if, at the date of restructuring, the creditor for economic or legal reasons related to a debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider. In the Call Report, until a loan that is a TDR is paid in full or otherwise settled, sold, or charged off, it must be reported in the appropriate loan category, as well as identified as a performing TDR loan, if it is in compliance with its modified terms. If a TDR is not in compliance with its modified terms, it is reported as a past due and nonaccrual loan in the appropriate loan category, as well as distinguished from other past due and nonaccrual loans. To be considered in compliance with its modified terms, a loan that is a TDR must not be in nonaccrual status and must be current or less than 30 days past due on its contractual principal and interest payments under the modified repayment terms. A loan restructured in a TDR is an impaired loan. Thus, all TDRs must be measured for impairment in accordance with ASC Subtopic 310-10, Receivables—Overall (formerly FASB Statement No. 114, “Accounting by Creditors for Impairment of a Loan,” as amended), and the Call report Glossary entry for “Loan Impairment.” Accounting for Loan Participations – Amended ASC Topic 860 (formerly FAS 166) modified the criteria that must be met in order for a transfer of a portion of a financial asset, such as a loan participation, to qualify for sale accounting. These changes apply to transfers of loan participations on or after the effective date of amended ASC Topic 860 (discussed above), including advances under lines of credit that are transferred on or after the effective date of amended ASC Topic 860 even if the line of credit agreements were entered into before this effective date. Therefore, banks with a calendar year fiscal year must account for transfers of loan participations on or after January 1, 2010, in accordance with amended ASC Topic 860. In general, loan participations transferred before the effective date of amended ASC Topic 860 (January 1, 2010, for calendar year banks) are not affected by this new accounting standard. Therefore, loan participations transferred before the effective date of amended ASC Topic 860 that were properly accounted for as sales under former FASB Statement No. 140 will continue to be reported as having been sold. Under amended ASC Topic 860, if a transfer of a portion of an entire financial asset meets the definition of a “participating interest,” then the transferor (normally the lead lender) must evaluate whether the transfer meets all of the conditions in this accounting standard to qualify for sale accounting. Other-Than-Temporary Impairment – When the fair value of an investment in a debt or equity security is less than its cost basis, the impairment is either temporary or other-than- temporary. To determine whether the impairment is otherthan-temporary, an institution must apply other pertinent guidance in ASC Topic 320 , Investments-Debt and Equity Securities—Overall; ASC Subtopic 325-20, InvestmentsOther—Cost Method Investments; and ASC Subtopic 32540, Investments-Other—Beneficial Interests in Securitized FDIC Quarterly Financial Assets (formerly paragraph 16 of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities); FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments; FSP FAS 115‑2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments; paragraph 6 of Accounting Principles Board Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock; Emerging Issues Task Force (EITF) Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets; and FSP EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20. Under ASC Topic 320, if an institution intends to sell a debt security or it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis, an otherthan-temporary impairment has occurred and the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date must be recognized in earnings. In these cases, the fair value of the debt security would become its new amortized cost basis. In addition, under ASC Topic 320, if the present value of cash flows expected to be collected on a debt security is less than its amortized cost basis, a credit loss exists. In this situation, if an institution does not intend to sell the security and it is not more likely than not that the institution will be required to sell the debt security before recovery of its amortized cost basis less any current-period credit loss, an other-than-temporary impairment has occurred. The amount of the total other-than- temporary impairment related to the credit loss must be recognized in earnings, but the amount of the total impairment related to other factors must be recognized in other comprehensive income, net of applicable taxes. ASC Topic 805 (formerly Business Combinations and Noncontrolling (Minority) Interests) – In December 2007, the FASB issued Statement No. 141 (Revised), Business Combinations FAS 141(R)), and Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements (FAS 160). Under FAS 141(R), all business combinations, including combinations of mutual entities, are to be accounted for by applying the acquisition method. FAS 160 defines a noncontrolling interest, also called a minority interest, as the portion of equity in an institution’s subsidiary not attributable, directly or indirectly, to the parent institution. FAS 160 requires an institution to clearly present in its consolidated financial statements the equity ownership in and results of its subsidiaries that are attributable to the noncontrolling ownership interests in these subsidiaries. FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Similarly, FAS 160 is effective for fiscal years beginning on or after December 15, 2008. Thus, for institutions with calendar year fiscal years, these two accounting standards take effect in 2009. Beginning in March 2009, Institution equity capital and Noncontrolling interests are separately reported in arriving at Total equity capital and Net income. ASC Topic 820 (formerly FASB Statement No. 157 Fair Value Measurements issued in September 2006) and ASC Topic 825 (formerly FASB Statement No. 159 The Fair Value Option for Financial Assets and Financial Liabilities) issued in February 2007 – both are effective in 2008 with early adoption permitted in 2007. FAS 157 defines fair value and establishes a framework 26 2011, Volume 5, No. 1 Quarterly Banking Profile for developing fair value estimates for the fair value measurements that are already required or permitted under other standards. FASB FSP 157-4, issued in April 2009, provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity for the asset or liability have significantly decreased. The FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. The FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Fair value continues to be used for derivatives, trading securities, and available-for-sale securities. Changes in fair value go through earnings for trading securities and most derivatives. Changes in the fair value of available-for-sale securities are reported in other comprehensive income. Available-for-sale securities and held-to-maturity debt securities are written down to fair value if impairment is other than temporary and loans held for sale are reported at the lower of cost or fair value. FAS 159 allows institutions to report certain financial assets and liabilities at fair value with subsequent changes in fair value included in earnings. In general, an institution may elect the fair value option for an eligible financial asset or liability when it first recognizes the instrument on its balance sheet or enters into an eligible firm commitment. ASC Topic 715 (formerly FASB Statement No. 158 Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans) – issued in September 2006 requires a bank to recognize in 2007, and subsequently, the funded status of its postretirement plans on its balance sheet. An overfunded plan is recognized as an asset and an underfunded plan is recognized as a liability. An adjustment is made to equity as accumulated other comprehensive income (AOCI) upon application of FAS 158, and AOCI is adjusted in subsequent periods as net periodic benefit costs are recognized in earnings. ASC Topic 860 (formerly FASB Statement No. 156 Accounting for Servicing of Financial Assets) – issued in March 2006 and effective in 2007, requires all separately recognized servicing assets and liabilities to be initially measured at fair value and allows a bank the option to subsequently adjust that value by periodic revaluation and recognition of earnings or by periodic amortization to earnings. ASC Topic 815 (formerly FASB Statement No. 155 Accounting for Certain Hybrid Financial Instruments) – issued in February 2006, requires bifurcation of certain derivatives embedded in interests in securitized financial assets and permits fair value measurement (i.e., a fair value option) for any hybrid financial instrument that contains an embedded derivative that would otherwise require bifurcation under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (FAS 133). In addition, FAS 155 clarifies which interest-only and principal-only strips are not subject to FAS 133. Purchased Impaired Loans and Debt Securities – ASC Topic 310 (formerly Statement of Position 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer) – The SOP applies to loans and debt securities acquired in fiscal years beginning after December 15, 2004. In general, this Statement of Position applies to “purchased impaired loans and debt securities” (i.e., loans and debt securities that a bank has purchased, including those acquired in a purchase business combination, when it is probable, at the purchase date, that the bank will be unable to collect all contractually required payments receivable). Banks must follow Statement of Position 03-3 for FDIC Quarterly Call Report purposes. The SOP does not apply to the loans that a bank has originated, prohibits “carrying over” or creation of valuation allowances in the initial accounting, and any subsequent valuation allowances reflect only those losses incurred by the investor after acquisition. GNMA Buy-back Option – If an issuer of GNMA securities has the option to buy back the loans that collateralize the GNMA securities, when certain delinquency criteria are met, ASC Topic 860 (formerly FASB Statement No. 140) requires that loans with this buy-back option must be brought back on the issuer’s books as assets. The rebooking of GNMA loans is required regardless of whether the issuer intends to exercise the buy-back option. The banking agencies clarified in May 2005 that all GNMA loans that are rebooked because of delinquency should be reported as past due according to their contractual terms. ASC Topics 860 & 810 (formerly FASB Statements 166 & 167) – In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets (FAS 166), and Statement No. 167, Amendments to FASB Interpretation No. 46(R) (FAS 167), which change the way entities account for securitizations and special purpose entities. FAS 166 revised FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, by eliminating the concept of a “qualifying special-purpose entity,” creating the concept of a “participating interest,” changing the requirements for derecognizing financial assets, and requiring additional disclosures. FAS 167 revised FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, by changing how a bank or other company determines when an entity that is insufficiently capitalized or is not controlled through voting or similar rights, i.e., a “variable interest entity” (VIE), should be consolidated. Under FAS 167, a bank must perform a qualitative assessment to determine whether its variable interest or interests give it a controlling financial interest in a VIE. If a bank’s variable interest or interests provide it with the power to direct the most significant activities of the VIE, and the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the bank is the primary beneficiary of, and therefore must consolidate, the VIE. Both FAS 166 and FAS 167 take effect as of the beginning of each bank’s first annual reporting period that begins after November 15, 2009, for interim periods therein, and for interim and annual reporting periods thereafter (i.e., as of January 1, 2010, for banks with a calendar year fiscal year). Earlier application is prohibited. Banks are expected to adopt FAS 166 and FAS 167 for Call Report purposes in accordance with the effective date of these two standards. Also, FAS 166 has modified the criteria that must be met in order for a transfer of a portion of a financial asset, such as a loan participation, to qualify for sale accounting. These changes apply to transfers of loan participations on or after the effective date of FAS 166. Therefore, banks with a calendar year fiscal year must account for transfers of loan participations on or after January 1, 2010, in accordance with FAS 166. In general, loan participations transferred before the effective date of FAS 166 (January 1, 2010, for calendar year banks) are not affected by this new accounting standard and pre-FAS 166 participations that were properly accounted for as sales under FASB Statement No. 140 will continue to be reported as having been sold. ASC Topic 740 (formerly FASB Interpretation No. 48 on Uncertain Tax Positions) – FASB Interpretation No. 48, Accounting for 27 2011, Volume 5, No. 1 Uncertainty in Income Taxes (FIN 48), was issued in June 2006 as an interpretation of FASB Statement No. 109, Accounting for Income Taxes. Under FIN 48, the term “tax position” refers to “a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities.” FIN 48 further states that a “tax position can result in a permanent reduction of income taxes payable, a deferral of income taxes otherwise currently payable to future years, or a change in the expected realizability of deferred tax assets.” FIN 48 was originally issued effective for fiscal years beginning after December 15, 2006. Banks must adopt FIN 48 for Call Report purposes in accordance with the interpretation’s effective date except as follows. On December 31, 2008, the FASB decided to defer the effective date of FIN 48 for eligible nonpublic enterprises and to require those enterprises to adopt FIN 48 for annual periods beginning after December 15, 2008. A nonpublic enterprise under certain conditions is eligible for deferral, even if it opted to issue interim or quarterly financial information in 2007 under earlier guidance that reflected the adoption of FIN 48. ASC Topic 718 (formerly FASB Statement No. 123 (Revised 2004) and Share-Based Payments – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/ 2008dec/qbpnot.html ASC Topic 815 (formerly FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities) – refer to previously published Quarterly Banking Profile notes: http://www2.fdic. gov/qbp/2008dec/qbpnot.html Accounting Standards Codification – In June 2009, the FASB issued Statement No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles (FAS 168), to establish the FASB Codification as the single source of authoritative nongovernmental U.S. generally accepted accounting principles (U.S. GAAP). The FASB Codification reorganizes existing U.S. accounting and reporting standards issued by the FASB and other related private-sector standard setters, and all guidance contained in the FASB Codification carries an equal level of authority. All previously existing accounting standards documents are superseded as described in FAS 168. All other accounting literature not included in the FASB Codification is nonauthoritative. The FASB Codification can be accessed at http://asc.fasb.org/. The FASB Codification is effective for interim and annual periods ending after September 15, 2009. This is an FFIEC reference guide at http://www.ffiec.gov/pdf/ ffiec_forms/CodificationIntroduction_201006.pdf. Assets securitized and sold – total outstanding principal balance of assets securitized and sold with servicing retained or other seller- provided credit enhancements. Capital Purchase Program (CPP) – As announced in October 2008 under the TARP, the Treasury Department purchase of noncumulative perpetual preferred stock and related warrants that is treated as Tier 1 capital for regulatory capital purposes is included in “Total equity capital.” Such warrants to purchase common stock or noncumulative preferred stock issued by publicly-traded banks are reflected as well in “Surplus.” Warrants to purchase common stock or noncumulative preferred stock of not-publicly-traded bank stock classified in a bank’s balance sheet as “Other liabilities.” Construction and development loans – includes loans for all property types under construction, as well as loans for land acquisition and development. Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated subsidiaries, less goodwill and other ineligible intangible assets. The amount of eligible intangibles (including servicing rights) included in core capital is limited in accordance with supervisory capital regulations. Cost of funding earning assets – total interest expense paid on deposits and other borrowed money as a percentage of average earning assets. Credit enhancements – techniques whereby a company attempts to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be associated with a given issuance. Deposit Insurance Fund (DIF) – The Bank (BIF) and Savings Association (SAIF) Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform Act to form the DIF. Derivatives notional amount – The notional, or contractual, amounts of derivatives represent the level of involvement in the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent the amounts used to calculate contractual cash flows to be exchanged. Derivatives credit equivalent amount – the fair value of the derivative plus an additional amount for potential future credit exposure based on the notional amount, the remaining maturity and type of the contract. 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). 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 – assessable deposits consist of DIF deposits (deposits insured by the FDIC Deposit Insurance Fund) in banks’ domestic offices with certain adjustments. FDIC Quarterly 28 2011, Volume 5, No. 1 Quarterly Banking Profile The seller is obligated to purchase or sell the variable or index at the discretion of the buyer of the contract. Swaps – obligations between two parties to exchange a series of cash flows at periodic intervals (settlement dates), for a specified period. The cash flows of a swap are either fixed, or determined for each settlement date by multiplying the quantity (notional principal) of the underlying variable or index by specified reference rates or prices. Except for currency swaps, the notional principal is used to calculate each payment but is not exchanged. Derivatives underlying risk exposure – the potential exposure characterized by the level of banks’ concentration in particular underlying instruments, in general. Exposure can result from market risk, credit risk, and operational risk, as well as, interest rate risk. Domestic deposits to total assets – total domestic office deposits as a percent of total assets on a consolidated basis. Earning assets – all loans and other investments that earn interest or dividend income. Efficiency ratio – noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net operating revenues that are absorbed by overhead expenses, so that a lower value indicates greater efficiency. Estimated insured deposits – in general, insured deposits are total domestic deposits minus estimated uninsured deposits. Begin ning March 31, 2008, for institutions that file Call reports, insured deposits are total assessable deposits minus estimated uninsured deposits. Beginning September 30, 2009, insured deposits include deposits in accounts of $100,000 to $250,000 that are covered by a temporary increase in the FDIC’s standard maximum deposit insurance amount (SMDIA). Failed/assisted institutions – an institution fails when regulators take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or another healthy institution. This action may require the FDIC to provide funds to cover losses. An institution is defined as “assisted” when the institution remains open and receives assistance in order to continue operating. Fair Value – the valuation of various assets and liabilities on the balance sheet—including trading assets and liabilities, available-for-sale securities, loans held for sale, assets and liabilities accounted for under the fair value option, and 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. Goodwill and other intangibles – intangible assets include servicing rights, purchased credit card relationships, and other identifiable intangible assets. Goodwill is the excess of the purchase price over the fair market value of the net assets acquired, less subsequent impairment adjustments. Other intangible assets are recorded at fair value, less subsequent quarterly amortization and impairment adjustments. Loans secured by real estate – includes home equity loans, junior liens secured by 1-4 family residential properties, and all other loans secured by real estate. Loans to individuals – includes outstanding credit card balances and other secured and unsecured consumer loans. FDIC Quarterly Long-term assets (5+ years) – loans and debt securities with remaining maturities or repricing intervals of over five years. Maximum credit exposure – the maximum contractual credit exposure remaining under recourse arrangements and other seller-provided credit enhancements provided by the reporting bank to securitizations. Mortgage-backed securities – certificates of participation in pools of residential mortgages and collateralized mortgage obligations issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below. Net charge-offs – total loans and leases charged off (removed from balance sheet because of uncollectibility), less amounts recovered on loans and leases previously charged off. Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to depositors and other creditors, expressed as a percentage of average earning assets. No adjustments are made for interest income that is tax exempt. Net loans to total assets – loans and lease financing receivables, net of unearned income, allowance and reserves, as a percent of total assets on a consolidated basis. Net operating income – income excluding discretionary transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from operating income have been adjusted to exclude the portion applicable to securities gains (or losses). Noncurrent assets – the sum of loans, leases, debt securities, and other assets that are 90 days or more past due, or in nonaccrual status. Noncurrent loans & leases – the sum of loans and leases 90 days or more past due, and loans and leases in nonaccrual status. Number of institutions reporting – the number of institutions that actually filed a financial report. New charters – insured institutions filing quarterly financial reports for the first time. Other borrowed funds – federal funds purchased, securities sold with agreements to repurchase, demand notes issued to the U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and trading liabilities, less revaluation losses on assets held in trading accounts. Other real estate owned – primarily foreclosed property. Direct and indirect investments in real estate ventures are excluded. The amount is reflected net of valuation allowances. For institutions that file a Thrift Financial Report (TFR), the valuation allowance subtracted also includes allowances for other repossessed assets. Also, for TFR filers the components of other real estate owned are reported gross of valuation allowances. Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their losses) compared to the same period a year earlier. “Problem” institutions – federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. “Problem” institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either a “4” or “5.” The number and assets of “problem” institutions are based on FDIC composite ratings. Prior to March 31, 2008, 29 2011, Volume 5, No. 1 for institutions whose primary federal regulator was the OTS, the OTS composite rating was used. Recourse – an arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank’s claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Reserves for losses – the allowance for loan and lease losses on a consolidated basis. Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. Excludes restructured loans and leases that are not in compliance with the modified terms. Retained earnings – net income less cash dividends on common and preferred stock for the reporting period. Return on assets – bank net income (including gains or losses on securities and extraordinary items) as a percentage of average total (consolidated) assets. The basic yardstick of bank profitability. Return on equity – bank net income (including gains or losses on securities and extraordinary items) as a percentage of average total equity capital. Risk-based capital groups – definition: (Percent) Tier 1 Risk-Based Capital* Total Risk-Based Capital* Well-capitalized Adequately capitalized Undercapitalized Significantly undercapitalized Critically undercapitalized Tier 1 Leverage Tangible Equity ≥10 and ≥6 and ≥5 – ≥8 ≥6 and and ≥4 ≥3 and and ≥4 ≥3 – – <6 or <3 or <3 – – and Effective April 1, 2009, the initial base assessment rates are 12 to 45 basis points. An institution’s total assessment rate may be less than or greater than its initial base assessment rate as a result of additional risk adjustments. The base assessment rates for most institutions in Risk Category I are based on a combination of financial ratios and CAMELS component ratings (the financial ratios method). For large institutions in Risk Category I (generally those with at least $10 billion in assets) that have long-term debt issuer ratings, assessment rates are determined by equally weighting the institution’s CAMELS component ratings, long-term debt issuer ratings, and the financial ratios method assessment rate. For all large Risk Category I institutions, additional risk factors are considered to determine whether assessment rates should be adjusted. This additional information includes market data, financial performance measures, considerations of the ability of an institution to withstand financial stress, and loss severity indicators. Any adjustment is limited to no more than one basis point. Effective April 1, 2009, the FDIC introduced three possible adjustments to an institution’s initial base assessment rate: (1) a decrease of up to 5 basis points for long-term unsecured debt and, for small institutions, a portion of Tier 1 capital; (2) an increase not to exceed 50 percent of an institution’s assessment rate before the increase for secured liabilities in excess of 25 percent of domestic deposits; and (3) for nonRisk Category I institutions, an increase not to exceed 10 basis points for brokered deposits in excess of 10 percent of domestic deposits. After applying all possible adjustments, minimum and maximum total base assessment rates for each risk category are as follows: Total Base Assessment Rates* >2 Risk Category I Risk Category II Risk Category III Risk Category IV Initial base assessment rate 12–16 22 32 45 Unsecured debt adjustment -5 – 0 -5–0 -5 – 0 -5– 0 Secured liability adjustment 0 – 8 0 –11 0 –16 0 –22.5 Brokered deposit adjustment – 0 –10 0 –10 0 –10 Total base assessment rate 7–24.0 17–43.0 27–58.0 40–77.5 ≤2 – * As a percentage of risk-weighted assets. Risk Categories and Assessment Rate Schedule – The current risk categories became effective January 1, 2007. Capital ratios and supervisory ratings distinguish one risk category from another. The following table shows the relationship of risk categories (I, II, III, IV) to capital and supervisory groups as well as the initial base assessment rates (in basis points), effective April 1, 2009, for each risk category. Supervisory Group A generally includes institutions with CAMELS composite ratings of 1 or 2; Supervisory Group B generally includes institutions with a CAMELS composite rating of 3; and Supervisory Group C generally includes institutions with CAMELS composite ratings of 4 or 5. For purposes of riskbased assessment capital groups, undercapitalized includes institutions that are significantly or critically undercapitalized. *All amounts for all risk categories are in basis points annually. Total base rates that are not the minimum or maximum rate will vary between these rates. Beginning in 2007, each institution is assigned a risk-based rate for a quarterly assessment period near the end of the quarter following the assessment period. Payment is generally due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are effective for assessment purposes as of the examination transmittal date. For institutions with long-term debt issuer ratings, changes in ratings are effective for assessment pur poses as of the date the change was announced. Special Assessment – On May 22, 2009, the FDIC board approved a final rule that imposed a 5 basis point special assessment as of June 30, 2009. The special assessment was Supervisory Group Capital Category 1. Well Capitalized 2. Adequately Capitalized 3. Undercapitalized FDIC Quarterly A I 12–16 bps II 22 bps B C II 22 bps III 32 bps III 32 bps IV 45 bps 30 2011, Volume 5, No. 1 Quarterly Banking Profile levied on each insured depository institution’s assets minus its Tier 1 capital as reported in its report of condition as of June 30, 2009. The special assessment was collected September 30, 2009, at the same time that the risk-based assessment for the second quarter of 2009 was collected. The special assessment for any institution was capped at 10 basis points of the institution’s assessment base for the second quarter of 2009 riskbased assessment. Prepaid Deposit Insurance Assessments – In November 2009, the FDIC Board of Directors adopted a final rule requiring insured depository institutions (except those that are exempted) to prepay their quarterly risk-based deposit insurance assessments for the fourth quarter of 2009, and for all of 2010, 2011, and 2012, on December 30, 2009. Each institution’s regular riskbased deposit insurance assessment for the third quarter of 2009, which is paid in arrears, also is payable on December 30, 2009. Risk-weighted assets – assets adjusted for risk-based capital definitions which include on-balance-sheet as well as off- balance-sheet items multiplied by risk-weights that range from zero to 200 percent. A conversion factor is used to assign a balance sheet equivalent amount for selected off-balancesheet accounts. Securities – excludes securities held in trading accounts. Banks’ securities portfolios consist of securities designated as “held-to-maturity,” which are reported at amortized cost (book value), and securities designated as “available-for-sale,” reported at fair (market) value. Securities gains (losses) – realized gains (losses) on held-to- maturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers also include gains (losses) on the sales of assets held for sale. Seller’s interest in institution’s own securitizations – the reporting bank’s ownership interest in loans and other assets that have been securitized, except an interest that is a form of recourse or other seller-provided credit enhancement. Seller’s interests differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is generally equal to the total principal amount of the pool of assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the form of securities issued to investors. Subchapter S Corporation – a Subchapter S corporation is treated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any federal income taxes at the corporate level. This can have the effect of reducing institutions’ reported taxes and increasing their after-tax earnings. Temporary Liquidity Guarantee Program (TLGP) – was approved by the FDIC Board on October 13, 2008. The TLGP was designed to help relieve the crisis in the credit markets by giving banks access to liquidity during a time of global financial distress. Participation in the TLGP is voluntary. The TLGP has two components: Transaction Account Guarantee Program (TAGP) provides a full guarantee of non-interest-bearing deposit transaction accounts above $250,000, at depository institutions that elected to participate in the program. On August 26, 2009, the FDIC Board voted to extend the TAGP six months beyond its original expiration date to June 30, FDIC Quarterly 2010. On April 13, 2010 the FDIC Board adopted an interim rule extending the TAG program for six months through December 31, 2010, with a possibility of an additional 12-month extension, through December 31, 2011. (Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) provides temporary unlimited insurance coverage to noninterestbearing transaction accounts at all FDIC-insured institutions. The separate coverage for these accounts becomes effective on December 31, 2010, and ends on December 31, 2012.) Debt Guarantee Program (DGP) provides a full guarantee of senior unsecured debt1 issued by eligible institutions after October 14, 2008. Initially, debt issued before June 30, 2009, and maturing on or before June 30, 2012, could be guaranteed. On March 17, 2009, the deadline for issuance under the program was extended to October 31, 2009, and the expiration of the guarantee was set at the earlier of maturity of the debt or December 31, 2012. Institutions eligible for participation in the debt guarantee program include insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of an insured depository institution that the FDIC designates as eligible entities. The FDIC Board adopted a final rule on October 20, 2009, that established a limited six-month emergency guarantee facility upon expiration of the DGP. Trust assets – market value, or other reasonably available value of fiduciary and related assets, to include marketable securities, and other financial and physical assets. Common physical assets held in fiduciary accounts include real estate, equipment, collectibles, and household goods. Such fiduciary assets are not included in the assets of the financial institution. Unearned income & contra accounts – unearned income for Call Report filers only. Unused loan commitments – includes credit card lines, home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused com mitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for sale, which are accounted for as derivatives on the balance sheet.) Volatile liabilities – the sum of large-denomination time deposits, foreign-office deposits, federal funds purchased, securities sold under agreements to repurchase, and other borrowings. Yield on earning assets – total interest, dividend, and fee income earned on loans and investments as a percentage of average earning assets. Senior unsecured debt generally includes term Federal funds purchased, promissory notes, commercial paper, unsubordinated unsecured notes, certificates of deposit (CDs) standing to the credit of a bank, and U.S. dollar denominated bank deposits owed to an insured depository institution. 1 31 2011, Volume 5, No. 1