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Quarterly Quarterly Banking Profile: Fourth Quarter 2021 Consumer Lending Through the Pandemic and the Recovery 2021 Summary of Deposits Highlights 2022 Volume 16, Number 1 Federal Deposit Insurance Corporation FDIC QUARTERLY A The FDIC Quarterly is published by the Division of Insurance and Research of the Federal Deposit Insurance Corporation and contains a comprehensive summary of the most current financial results for the banking industry. Feature articles appearing in the FDIC Quarterly range from timely analysis of economic and banking trends at the national and regional level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and the development of regulatory policy. Single copy subscriptions of the FDIC Quarterly can be obtained through the FDIC Public Information Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. E-mail requests should be sent to publicinfo@fdic.gov. Change of address information also should be submitted to the Public Information Center. The FDIC Quarterly is available online by visiting the FDIC website at www.fdic.gov. To receive e-mail notification of the electronic release of the FDIC Quarterly and the individual feature articles, subscribe at www.fdic.gov/about/subscriptions/index.html. Chairman (Acting) Martin J. Gruenberg Director, Division of Insurance and Research Diane Ellis Executive Editors George French Shayna M. Olesiuk Managing Editors Rosalind Bennett Alan Deaton Patrick Mitchell Philip A. Shively Editors Clayton Boyce Kathy Zeidler Publication Manager Lynne Montgomery Media Inquiries (202) 898-6993 FDIC QUARTERLY 2022 Volume 16 • Number 1 FDICQUARTERLY Quarterly Banking Profile: Fourth Quarter 2021 FDIC-insured institutions reported full-year 2021 net income of $279.1 billion, up $132.0 billion (89.7 percent) from 2020. The increase was primarily attributable to negative provision expense, supported by continued economic growth and further improvement in credit quality. Quarterly net income totaled $63.9 billion, an increase of $4.4 billion (7.4ipercent) from fourth quarter 2020, primarily due to a $5.8 billion increase in net interest income and a $4.0 billion decline in provision expense. A majority of banks (52.1 percent) reported annual improvement in quarterly net income. However, net income declined $5.6 billion (8.1 percent) from third quarter 2021, driven by a quarter-to-quarter increase in provision expense (up $4.5 billion to negative $742.4 million). The banking industry reported an aggregate ROA ratio of 1.09 percent, on par with the 1.10 percent ROA ratio reported in fourth quarter 2020 but down from 1.21 percent reported in third quarter 2021. See page 1. Community Bank Performance Community banks—which represent 91 percent of insured institutions—reported full-year 2021 net income of $32.7 billion, up $7.4 billion (29.3 percent) from 2020, driven by higher net interest income and lower provision expense. Community bank quarterly net income increased by $511.6 million (7.1 percent) from a year ago to $7.8 billion in fourth quarter 2021; however, net income declined $719.9 million (8.5 percent) from third quarter 2021 because of higher noninterest expense. The average community bank quarterly pretax ROA ratio decreased 1 basis point from one year ago and 16 basis points from one quarter ago to 1.40 percent, as average asset growth outpaced growth in earnings. See page 15. Insurance Fund Indicators The Deposit Insurance Fund (DIF) balance totaled $123.1 billion at the end of fourth quarter 2021, an increase of $1.2 billion from the previous quarter. Assessment income of $2 billion drove the fund balance increase. Interest earned on investments and other miscellaneous income also added to the fund balance. Operating expenses, provisions for insurance losses, and unrealized losses on available-for-sale securities partially offset the increase in the fund balance. The DIF reserve ratio was 1.27 percent on December 31, 2021, unchanged from the previous quarter and 2 basis points lower than the previous year. See page 23. Featured Articles: Consumer Lending Through the Pandemic and the Recovery The COVID-19 pandemic pushed the economy into what was, by some measures, the worst contraction on record, but consumer lending trends did not deteriorate as they usually do during a recession. Government support for households raised aggregate personal income in 2020 and helped support consumer loan performance. While credit card loan balances contracted in 2020 and remained below the pre-recession level through third quarter 2021, auto loans and other consumer loans expanded throughout 2020 and 2021. Performance of all types of bank consumer loans improved thanks to government support, forbearance programs, and tighter underwriting standards for new loans. While caution is warranted, and changes in the pandemic and responses could weaken the outlook, the future of consumer lending appears strong. See page 31. 2021 Summary of Deposits Highlights The 2021 Summary of Deposits data reflect the effects of the COVID-19 pandemic, changing spending patterns, and government stimulus programs on deposit levels and the number of branch openings and closures. This article evaluates changes in community banks compared with those of noncommunity banks. A special feature discusses branch openings and closings of minority depository institutions. This article also evaluates the likely effect on branch levels of increased availability and use of mobile and electronic banking applications. Responses from the 2021 Summary of Deposits survey show that deposit growth rates for the industry were higher than pre-pandemic growth rates. However, deposit growth rates have moderated compared with the record highs in 2020. Over the past year, deposit growth rates have been higher among community banks compared with those of noncommunity banks. In 2021, the decline in the number of branches accelerated from a year ago, with branches of noncommunity banks closing at a higher rate compared with that of community banks. See page 41. The views expressed are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited. Please provide the FDIC’s Division of Insurance and Research with a copy of any publications containing reprinted material. FDIC QUARTERLY i QUARTERLY BANKING PROFILE Fourth Quarter 2021 INSURED INSTITUTION PERFORMANCE Negative Provision Expense Drove Full-Year 2021 Net Income Higher Quarterly Net Income Continued to Increase Year Over Year Net Interest Margin Remained Stable Quarter Over Quarter Quarterly Loan Growth Occurred Across Most Major Loan Types Asset Quality Continued to Improve Full-Year Net Income Increased in 2021 The banking industry reported full-year 2021 net income of $279.1 billion, up $132.0 billion (89.7 percent) from 2020. The increase was primarily attributable to negative provision expense, supported by continued economic growth and further improvement in credit quality. Relative to 2020, provision expense declined by $163.3 billion (123.4 percent), noninterest income increased by $20.3 billion (7.2 percent), and net interest income remained relatively stable, growing $686.8 million (0.1 percent). The net interest margin (NIM) declined by 28 basis points from 2020 to 2.54 percent as the growth rate in average earning assets outpaced the growth rate in net interest income. The average return-onassets (ROA) ratio increased from 0.72 percent in 2020 to 1.23 percent in 2021. Quarterly Net Income Continued to Increase Year Over Year Quarterly net income totaled $63.9 billion, an increase of $4.4 billion (7.4 percent) from fourth quarter 2020, primarily due to a $5.8 billion increase in net interest income and a $4.0 billion decline in provision expense. A majority of banks (52.1 percent) reported annual improvement in quarterly net income. However, net income declined $5.6 billion (8.1 percent) from third quarter 2021, driven by a quarter-to-quarter increase in provision expense (up $4.5 billion to negative $742.4 million). The banking industry reported an aggregate ROA ratio of 1.09 percent, on par with the 1.10 percent ROA ratio reported in fourth quarter 2020 but down from 1.21 percent reported in third quarter 2021. Growth in Net Interest Income Lifted Net Operating Revenue Growth in net interest income of $5.8 billion (4.4 percent) and in noninterest income of $2.4 billion (3.4 percent) lifted net operating revenue to $201.7 billion (4 percent) from fourth quarter 2020. Lower interest expense (down $3.8 billion, 31.7 percent) generated most of the growth in net interest income, while higher trading revenue (up $1.2 billion, 17.8 percent) and investment banking fees (up $1.2 billion, 40 percent) drove the improvement in noninterest income. Improvements in net interest income were widespread, as nearly two-thirds of banks (65.6 percent) reported higher net interest income from one year ago. NIM was unchanged from the prior quarter at 2.56 percent, 6 basis points higher than the recent record low in the second quarter 2021 but down 12 basis points from the previous year. The growth rate in average earning assets outpaced the growth rate in net interest income. The yield on earning assets declined slightly to 2.71 percent (down 2 basis points quarter over quarter and 21 basis points year over year). Average funding costs declined 2 basis points from the previous quarter to a new record low of 0.15 percent. Chart 1 Chart 2 Quarterly Net Income Annual Net Income All FDIC-Insured Institutions All FDIC-Insured Institutions $ Billions 300 Securities and Other Gains/Losses, Net Net Operating Income $ Billions 100 Securities and Other Gains/Losses, Net Net Operating Income 80 250 60 200 40 150 20 100 0 50 -20 0 -40 -60 -50 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: FDIC. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: FDIC. Note: Date labels are centered under the first quarter of each year. Data starts in fourth quarter 2007. FDIC QUARTERLY 1 2022 • Volume 16 • Number 1 Noninterest Expense Increased From the Year-Ago Quarter Noninterest expense rose $7.8 billion (6.2 percent) year over year, led by an increase in “all other noninterest expense” and salary and benefit expense.1 Higher marketing and data processing expenses drove the increase in the “all other noninterest expense” category. Average assets per employee increased from a year ago to $11.5 million. While 69.5 percent of banks reported higher noninterest expense compared with the year-ago quarter, noninterest expense as a percentage of average assets declined 6 basis points from fourth quarter 2020 to 2.28 percent. Negative Provision Expense Continued to Boost Earnings Provisions have been negative for four consecutive quarters. However, provisions rose from negative $5.2 billion in third quarter 2021 to negative $742.4 million in fourth quarter 2021. Provision expense declined $4 billion (123 percent) from the year-ago quarter.2 Fiftytwo percent of all institutions reported lower provisions compared with the year-ago quarter. The net number of banks that have adopted current expected credit loss (CECL) accounting remained unchanged from third quarter 2021 at 308.3 CECL adopters reported aggregate negative provisions of $1.3 billion in fourth quarter, $4.0 billion more than third quarter 2021 and $2.5 billion less than one year ago. Provision expense for banks that have not adopted CECL accounting totaled $595.5 million (up from $156.5 million a quarter ago and down from $2.0 billion one year ago). Allowance for Loan and Lease Losses to Total Loans Remained Higher Than the Pre-Pandemic Level The allowance for loan and lease losses (ALLL) as a percentage of total loans and leases declined 60 basis points to 1.58 percent from the year-ago quarter due to negative provisions. However, the ratio of ALLL to total loans remains higher than the pre-pandemic level of 1.18 percent reported in fourth quarter 2019. Similarly, the ALLL as a percentage of loans 90 days or more past due or in nonaccrual status (coverage ratio) declined 5 percentage points from the year-ago quarter to 178.8 percent but remained well above the financial crisis average of 79.1 percent.4 All insured institutions except the largest Quarterly Banking Profile (QBP) asset size group (greater than $250 billion) reported higher aggregate coverage ratios compared with third quarter 2021. 1 All other noninterest expenses include, but are not limited to, automated teller machine and interchange expenses, legal fees, advertising and marketing expenses, consulting expenses, data processing expenses, and FDIC deposit insurance assessments. Among banks that filled out schedule RI-E, higher marketing and data processing expenses drove the increase in all other noninterest expense. 2 Provisions for credit losses include both losses for loans and securities for CECL adopters but only loan losses for non-adopters. 3 Changes to the number of CECL accounting adopters may result from closures, mergers and acquisitions, or examination or audit findings. 4 The financial crisis refers to the period between December 2007 and June 2009. Chart 3 Chart 4 Change in Quarterly Loan-Loss Provisions Quarterly Net Interest Margin All FDIC-Insured Institutions All FDIC-Insured Institutions Percent 5.0 Assets > $250 Billion Assets $10 Billion - $250 Billion Assets $1 Billion - $10 Billion Assets $100 Million - $1 Billion Assets < $100 Million 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: FDIC. Note: Date labels are centered under the first quarter of each year. Data starts in fourth quarter 2007. 2 FDIC QUARTERLY Quarter-Over-Quarter Change ($ Billions) 50 40 30 20 10 0 -10 -20 -30 -40 -50 -60 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: FDIC. Note: Date labels are centered under the first quarter of each year. Data starts in fourth quarter 2007. QUARTERLY BANKING PROFILE Total Assets Increased From the Previous Quarter Total assets increased $467.7 billion (2.0 percent) from third quarter 2021 to $23.7 trillion. Total loan and lease balances increased $326.0 billion (3.0 percent), while securities rose $292.7 billion (4.9 percent). Growth in U.S. Treasury securities (up $175.7 billion, or 13.9 percent) continued to drive the quarterly increases in total securities. Loans and securities with maturities greater than three years now make up 39.4 percent of total assets, up from 36 percent in fourth quarter 2019. Loan Growth Occurred Across Most Major Loan Types Total loan and lease balances increased $326.0 billion (3.0 percent) from third quarter 2021. Several portfolios contributed meaningfully to the industry’s loan growth, including consumer loans (up $84.9 billion, or 4.7 percent), commercial and industrial (C&I) loans (up $70.8 billion, or 3.2 percent), and loans to nondepository institutions (up $59.0 billion, or 9.1 percent). Annually, total loan and lease balances increased $383.2 billion (3.5 percent), as growth in consumer loans (up $137.8 billion, or 7.9 percent), loans to nondepository institutions (up $124.5 billion, or 21.5 percent), and nonfarm nonresidential commercial real estate (CRE) loan balances (up $77.0 billion, or 4.9 percent) helped offset declines in C&I loans (down $126.7 billion, or 5.2 percent). Paycheck Protection Program loan forgiveness and repayment drove the annual decline in C&I loan balances. Deposit Growth Accelerated From the Previous Quarter Deposits grew 2.8 percent ($535.0 billion) in fourth quarter, faster than the 2.3 percent growth ($436.0 billion) reported in third quarter 2021 but slower than the first quarter 2021 gain that was boosted by federal support programs. Deposits above $250,000 continued to drive the quarterly increase (up $414.4 billion, or 4.0 percent). Interest-bearing deposit growth (up $446.8 billion, or 3.6 percent) outpaced that of noninterest-bearing deposits (up $108.5 billion, or 2.0 percent). More than three-fourths (76.2 percent) of banks reported higher deposit balances compared with the previous quarter. Noncurrent Loan Balances Continued to Decline Quarter Over Quarter Loans and leases 90 days or more past due or in nonaccrual status (noncurrent loan balances) declined (down $3.1 billion, or 3.0 percent) from third quarter 2021, supporting a 5 basis point reduction in the noncurrent rate to 0.89 percent. Noncurrent nonfarm nonresidential CRE loans declined the most among loan categories from the previous quarter (down $2.3 billion, or 12.6 percent), followed by noncurrent C&I loans (down $1 billion, or 6.0 percent). Fifty-nine percent of all banks reported a reduction in noncurrent loans from third quarter 2021. Chart 5 Chart 6 Quarterly Change in Loan Balances Quarterly Change in Deposits All FDIC-Insured Institutions All FDIC-Insured Institutions $ Billions 500 Quarterly Change (Left Axis) 12-Month Growth Rate (Right Axis) Percent 12 400 $ Billions 1,400 1,200 300 8 200 1,000 100 4 800 0 0 600 -100 -4 -200 -300 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 -8 Source: FDIC. Note: ASC Topics 810 and 860 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. Date labels are centered under the first quarter of each year. Data starts in fourth quarter 2007. 400 200 0 -200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: FDIC. Note: Date labels are centered under the first quarter of each year. Data starts in fourth quarter 2007. FDIC QUARTERLY 3 2022 • Volume 16 • Number 1 The Net Charge-Off Rate Remained Low Net charge-offs continued to decline (down $5.6 billion, or 49.5 percent) from the yearago quarter, reducing the net charge-off rate 21 basis points to 0.21 percent. A decline in net charge-offs of C&I loans (down $2.2 billion, or 75 percent) and credit card loans (down $1.8 billion, or 35.1 percent) drove three-fourths (72.3 percent) of the reduction in net charge-offs from the year-ago quarter. Some Capital Ratios Declined as Growth in Assets Outpaced Capital Formation Equity capital rose $17.9 billion (0.8 percent) from third quarter 2021; however, the leverage capital ratio decreased 10 basis points to 8.74 percent as average asset growth outpaced tier 1 capital formation. Retained earnings supported equity formation with an increase of $7.7 billion (51.6 percent) from third quarter. Banks distributed 64.8 percent of fourth quarter earnings as dividends, which were down $13.3 billion (24.3 percent) from third quarter 2021. Thirty-five percent of banks reported higher dividends compared with the year-ago quarter. The number of institutions with capital ratios that did not meet Prompt Corrective Action requirements for the well-capitalized category decreased by one to seven from third quarter 2021.5 No Banks Failed in Fourth Quarter 2021 The number of FDIC-insured institutions declined from 4,914 in third quarter 2021 to 4,839. During fourth quarter 2021, 72 institutions merged with other FDIC-insured institutions, two banks merged with credit unions, one bank ceased operations, no new banks opened, and no banks failed.6 The number of banks on the FDIC’s “Problem Bank List” declined by two from third quarter to 44, the lowest level since QBP data collection began in 1984. Total assets of problem banks increased to $170.1 billion.7 Author: James K. Presley-Nelson Senior Financial Analyst Division of Insurance and Research 5 Prompt Corrective Action categories are assigned based on reported capital ratios only and do not include the effects of regulatory downgrades. 6 The number of insured financial institutions excludes two banks that did not file Call Reports this quarter and one bank that did not file a Call Report last quarter that has since ceased operations. 7 The asset value of insured financial institutions on the problem bank list is the amount known on the last day of third quarter 2021, the most current information available on December 31, 2021. Chart 7 Chart 8 Noncurrent Loan Rate and Quarterly Net Charge-Off Rate All FDIC-Insured Institutions Percent 6 Number Noncurrent Rate Quarterly Net Charge-Off Rate 5 4 3 2 1 0 Number and Assets of Banks on the “Problem Bank List” 1,000 Assets of Problem Banks Number of Problem Banks Assets ($ Billions) 450 800 400 700 350 600 300 500 250 400 200 300 150 200 100 100 50 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: FDIC. Note: Date labels are centered under the first quarter of each year. Data starts in fourth quarter 2007. 4 FDIC QUARTERLY 500 900 Source: FDIC. Note: The asset values of insured financial institutions on the problem bank list are what were on record as of the last day of the quarter. Date labels are centered under the first quarter of each year. Data starts in fourth quarter 2007. 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 2021 2020 2019 2018 2017 2016 2015 1.23 12.21 8.74 0.44 0.25 8.46 2.54 96.92 4,839 4,231 608 3.02 44 $170 0 0.72 6.85 8.82 0.61 0.50 17.29 2.82 -38.78 5,002 4,375 627 4.68 56 $56 4 1.29 11.38 9.66 0.55 0.52 3.92 3.36 -3.14 5,177 4,518 659 3.73 51 $46 4 1.35 11.98 9.70 0.60 0.48 3.03 3.40 45.45 5,406 4,715 691 3.44 60 $48 0 0.97 8.60 9.63 0.73 0.50 3.79 3.25 -3.27 5,670 4,918 752 5.61 95 $14 8 1.04 9.27 9.48 0.86 0.47 5.09 3.13 4.43 5,913 5,112 801 4.48 123 $28 5 1.04 9.29 9.59 0.97 0.44 2.66 3.08 7.11 6,182 5,338 844 4.82 183 $47 8 * Excludes insured branches of foreign banks (IBAs). ** Assets shown are what were on record as of the last day of the quarter. TABLE II-A. Aggregate Condition and Income Data, All FDIC-Insured Institutions (dollar figures in millions) Number of institutions reporting Total employees (full-time equivalent) CONDITION DATA Total assets Loans secured by real estate 1-4 Family residential mortgages Nonfarm nonresidential Construction and development Home equity lines Commercial & industrial loans Loans to individuals Credit cards Farm loans Other loans & leases Less: Unearned income Total loans & leases Less: Reserve for losses* Net loans and leases Securities** Other real estate owned Goodwill and other intangibles All other assets 4th Quarter 2021 3rd Quarter 2021 4th Quarter 2020 %Change 20Q4-21Q4 4,839 2,069,049 4,914 2,056,568 5,002 2,065,603 -3.3 0.2 $23,719,316 5,258,361 2,259,000 1,645,582 401,094 265,084 2,314,011 1,881,972 871,083 74,103 1,720,559 2,133 11,246,874 178,212 11,068,662 6,245,881 2,961 404,363 5,997,450 $23,251,583 5,182,429 2,221,817 1,619,367 402,055 270,286 2,243,238 1,797,057 805,961 73,096 1,627,468 2,409 10,920,878 185,067 10,735,811 5,953,189 3,817 396,651 6,162,114 $21,868,854 5,117,942 2,210,914 1,568,587 386,080 300,311 2,440,690 1,744,177 822,028 71,781 1,492,232 3,196 10,863,626 236,621 10,627,005 5,112,405 4,626 386,755 5,738,062 8.5 2.7 2.2 4.9 3.9 -11.7 -5.2 7.9 6.0 3.2 15.3 -33.3 3.5 -24.7 4.2 22.2 -36.0 4.6 4.5 23,719,316 19,701,592 18,189,214 1,512,378 955,412 66,395 636,346 2,359,570 2,357,373 23,251,583 19,166,641 17,633,864 1,532,777 989,701 66,246 687,084 2,341,912 2,339,473 21,868,854 17,823,559 16,289,740 1,533,819 1,091,994 68,230 658,109 2,226,963 2,224,357 8.5 10.5 11.7 -1.4 -12.5 -2.7 -3.3 6.0 6.0 56,256 99,660 42,749 3,557,067 21,767,607 188,537 9,042,033 20,314,536 450,501 179,313,801 47,759 102,734 45,355 3,488,704 21,241,497 190,103 9,074,841 19,979,395 464,570 187,643,808 63,213 128,802 49,317 3,043,762 19,920,260 255,985 8,449,642 18,878,927 480,386 165,711,801 -11.0 -22.6 -13.3 16.9 9.3 -26.3 7.0 7.6 -6.2 8.2 Total liabilities and capital Deposits Domestic office deposits Foreign office deposits Other borrowed funds Subordinated debt All other liabilities Total equity capital (includes minority interests) Bank equity capital Loans and leases 30-89 days past due Noncurrent loans and leases Restructured loans and leases Mortgage-backed securities Earning assets FHLB Advances Unused loan commitments Trust assets Assets securitized and sold Notional amount of derivatives INCOME DATA Full Year 2021 Full Year 2020 %Change 4th Quarter 2021 4th Quarter 2020 %Change 20Q4-21Q4 Total interest income Total interest expense Net interest income Provision for credit 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 $563,467 36,116 527,351 -31,007 300,506 510,131 3,009 72,455 47 279,333 279,131 27,354 155,963 123,168 276,854 $603,762 77,098 526,664 132,260 280,225 498,986 8,145 36,335 -101 147,352 147,116 54,113 84,066 63,050 140,589 -6.7 -53.2 0.1 -123.4 7.2 2.2 -63.1 99.4 NM 89.6 89.7 -49.5 85.5 95.4 96.9 $145,337 8,184 137,153 -742 72,652 133,555 573 13,674 15 63,907 63,872 5,716 41,387 22,485 63,426 $143,345 11,979 131,366 3,219 70,289 125,794 1,516 14,643 9 59,524 59,462 11,311 21,825 37,637 58,137 1.4 -31.7 4.4 -123.1 3.4 6.2 -62.2 -6.6 77.2 7.4 7.4 -49.5 89.6 -40.3 9.1 * For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk. ** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses. *** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, this item represents the provision for loan and lease losses. **** See Notes to Users for explanation. N/M - Not Meaningful FDIC QUARTERLY 5 2022 • Volume 16 • Number 1 TABLE III-A. Full Year 2021, All FDIC-Insured Institutions Asset Concentration Groups* FULL YEAR (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions Performance Ratios (%) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Credit loss provision to assets** Net operating income to assets Pretax return on assets Return on assets Return on equity Net charge-offs to loans and leases Loan and lease loss provision to net charge-offs Efficiency ratio % of unprofitable institutions % of institutions with earnings gains Condition Ratios (%) Earning assets to total assets Loss allowance to: Loans and leases Noncurrent loans and leases Noncurrent assets plus other real estate owned to assets Equity capital ratio Core capital (leverage) ratio Common equity tier 1 capital ratio*** Tier 1 risk-based capital ratio*** Total risk-based capital ratio*** Net loans and leases to deposits Net loans to total assets Domestic deposits to total assets Structural Changes New reporters Institutions absorbed by mergers Failed institutions All Insured Institutions 4,839 4,231 608 $23,719.3 22,195.2 1,524.1 19,701.6 18,410.3 1,291.3 279,131 263,122 16,008 Credit Card Banks 12 11 1 $499.8 413.8 86.1 351.3 286.2 65.1 26,040 22,029 4,011 International Banks 5 5 0 $5,827.2 5,827.2 0.0 4,618.9 4,618.9 0.0 62,871 62,871 0 Agricultural Banks 1,121 1,110 11 $302.8 297.2 5.5 260.0 256.5 3.5 3,873 3,686 187 Commercial Lenders 2,417 2,187 230 $7,372.2 6,927.9 444.2 6,226.4 5,877.7 348.7 87,234 82,027 5,207 Mortgage Lenders 293 80 213 $776.3 122.9 653.4 694.5 106.2 588.3 6,203 1,529 4,674 Consumer Lenders 33 21 12 $352.9 345.2 7.7 301.2 294.6 6.7 6,510 6,447 63 Other Specialized <$1 Billion 357 326 31 $83.4 77.7 5.7 70.7 66.4 4.2 1,317 574 743 All Other <$1 Billion 506 412 94 $130.1 104.3 25.8 112.8 91.2 21.5 1,316 1,157 160 All Other >$1 Billion 95 79 16 $8,374.6 8,078.9 295.7 7,065.9 6,812.6 253.3 83,766 82,803 963 2.71 0.17 2.54 1.32 2.24 -0.14 1.22 1.55 1.23 12.21 0.25 10.95 0.97 9.98 5.57 8.17 -0.05 5.31 6.93 5.32 40.72 2.00 1.98 0.11 1.87 1.57 2.06 -0.23 1.09 1.41 1.09 12.15 0.38 3.74 0.38 3.37 0.70 2.31 0.07 1.31 1.52 1.33 12.08 0.05 3.14 0.21 2.93 1.00 2.23 -0.08 1.23 1.57 1.24 11.39 0.11 1.85 0.14 1.71 0.84 1.41 -0.01 0.86 1.13 0.88 10.24 0.01 3.99 0.63 3.35 1.27 1.69 0.14 1.96 2.60 1.98 21.05 0.27 2.66 0.23 2.43 2.99 3.27 0.03 1.60 2.05 1.67 12.32 0.08 3.46 0.32 3.14 1.27 2.99 0.05 1.03 1.22 1.06 9.50 0.04 2.30 0.11 2.19 1.22 2.09 -0.16 1.04 1.29 1.05 10.60 0.20 -106.66 61.15 3.02 75.55 -2.75 53.91 0.00 100.00 -178.28 63.38 0.00 80.00 221.35 59.40 1.96 72.61 -118.70 59.67 2.07 83.04 -479.70 56.21 5.80 63.82 79.03 38.27 9.09 75.76 138.74 61.66 9.24 50.98 248.62 70.68 3.95 67.98 -164.83 64.62 1.05 85.26 91.77 94.71 89.70 93.86 92.29 97.64 93.71 94.19 93.96 91.82 1.58 178.82 6.97 763.75 1.72 209.81 1.46 200.81 1.27 149.62 0.67 102.48 1.98 289.43 1.61 207.31 1.35 211.75 1.32 131.60 0.44 9.94 8.74 14.04 14.14 15.46 56.18 46.67 76.69 0.78 12.56 13.72 15.30 15.44 17.17 113.24 79.59 69.06 0.28 9.20 7.99 15.68 15.75 17.13 39.27 31.13 56.81 0.47 10.78 10.37 14.43 14.43 15.53 66.79 57.34 85.86 0.55 10.71 9.26 12.55 12.63 13.85 71.98 60.79 84.29 0.18 8.17 8.63 24.73 24.73 25.16 29.18 26.11 89.31 0.48 9.00 9.70 15.35 15.38 16.35 80.08 68.34 85.35 0.27 12.97 12.64 27.89 27.89 28.82 33.01 27.96 84.71 0.39 10.79 10.67 17.59 17.60 18.69 59.80 51.83 86.65 0.46 9.75 8.34 13.76 13.90 15.32 51.90 43.79 82.18 9 164 0 0 0 0 0 0 0 0 37 0 2 118 0 0 1 0 0 0 0 7 1 0 0 3 0 0 4 0 PRIOR FULL YEARS (The way it was...) Number of institutions 2020 2018 2016 5,002 5,406 5,913 11 12 13 5 5 5 1,163 1,346 1,429 2,667 2,866 3,025 291 401 462 36 69 65 277 227 300 485 431 549 67 49 65 Total assets (in billions) 2020 2018 2016 $21,868.9 17,943.0 16,779.7 $492.6 651.7 519.0 $5,539.4 4,285.9 4,052.7 $287.7 286.8 284.9 $7,591.1 6,373.8 5,628.2 $684.0 346.0 331.5 $144.8 218.3 256.0 $51.5 36.7 51.1 $105.7 75.9 97.5 $6,972.0 5,667.9 5,558.8 Return on assets (%) 2020 2018 2016 0.72 1.35 1.04 1.92 2.96 2.27 0.70 1.17 0.93 1.29 1.32 1.21 0.74 1.26 0.97 0.92 1.13 0.98 1.59 1.42 0.96 2.59 2.94 2.85 1.10 1.12 0.92 0.53 1.40 1.06 Net charge-offs to loans & leases (%) 2020 2018 2016 0.50 0.48 0.47 3.73 3.87 3.34 0.69 0.50 0.55 0.15 0.15 0.15 0.25 0.18 0.22 0.05 0.02 0.07 0.52 0.76 0.56 0.19 1.41 0.22 0.07 0.17 0.17 0.43 0.37 0.41 Noncurrent assets plus OREO to assets (%) 2020 2018 2016 0.61 0.60 0.86 0.92 1.26 1.14 0.38 0.39 0.61 0.69 0.83 0.77 0.76 0.63 0.87 0.30 1.28 1.97 0.26 0.49 0.70 0.34 0.43 0.63 0.56 0.73 0.94 0.66 0.62 0.96 Equity capital ratio (%) 2020 2018 2016 10.17 11.25 11.10 12.61 15.29 14.84 8.95 9.88 9.97 11.37 11.34 11.30 11.22 11.94 11.81 8.40 11.08 11.26 9.21 10.51 10.04 15.79 16.74 15.23 11.81 12.31 11.41 9.90 11.04 10.85 * See Table V-A (page 10) for explanations. ** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator represents the provision for loan and lease losses. *** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date. 6 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE III-A. Full Year 2021, All FDIC-Insured Institutions Asset Size Distribution FULL YEAR (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions Performance Ratios (%) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Credit loss provision to assets** Net operating income to assets Pretax return on assets Return on assets Return on equity Net charge-offs to loans and leases Loan and lease loss provision to net charge-offs Efficiency ratio % of unprofitable institutions % of institutions with earnings gains Condition Ratios (%) Earning assets to total assets Loss allowance to: Loans and leases Noncurrent loans and leases Noncurrent assets plus other real estate owned to assets Equity capital ratio Core capital (leverage) ratio Common equity tier 1 capital ratio*** Tier 1 risk-based capital ratio*** Total risk-based capital ratio*** Net loans and leases to deposits Net loans to total assets Domestic deposits to total assets Structural Changes New reporters Institutions absorbed by mergers Failed institutions $100 Million to $1 Billion to $1 Billion $10 Billion 3,049 813 2,702 675 347 138 $1,125.0 $2,221.7 988.0 1,866.0 136.9 355.8 966.9 1,878.2 854.1 1,584.8 112.8 293.4 13,899 29,677 11,855 25,845 2,044 3,833 Geographic Regions* All Insured Institutions 4,839 4,231 608 $23,719.3 22,195.2 1,524.1 19,701.6 18,410.3 1,291.3 279,131 263,122 16,008 Less Than $100 Million 817 712 105 $49.9 44.0 5.9 42.0 37.5 4.6 505 426 79 $10 Billion to $250 Billion 147 130 17 $7,076.0 6,471.1 605.0 5,929.0 5,441.1 487.8 97,243 89,728 7,515 Greater Than $250 Billion New York 13 577 12 299 1 278 $13,246.6 $4,454.4 12,826.1 4,017.7 420.5 436.7 10,885.6 3,690.7 10,492.9 3,340.3 392.7 350.4 137,806 45,990 135,268 41,628 2,538 4,362 2.71 0.17 2.54 1.32 2.24 -0.14 1.22 1.55 1.23 12.21 0.25 3.65 0.38 3.27 1.88 3.64 0.06 1.03 1.20 1.04 7.53 0.07 3.70 0.35 3.35 1.36 2.95 0.08 1.27 1.52 1.29 11.76 0.06 3.62 0.28 3.34 1.26 2.61 0.04 1.38 1.77 1.41 12.90 0.12 3.33 0.24 3.08 1.30 2.40 -0.11 1.44 1.88 1.46 13.76 0.30 2.14 0.10 2.04 1.34 2.04 -0.20 1.07 1.34 1.07 11.26 0.27 -106.66 61.15 3.02 75.55 175.43 74.18 9.91 60.22 235.84 65.10 1.97 75.53 45.45 59.13 0.49 88.07 -57.49 57.08 0.68 91.16 91.77 92.49 94.09 93.75 1.58 178.82 1.48 149.30 1.38 227.28 0.44 9.94 8.74 14.04 14.14 15.46 56.18 46.67 76.69 0.59 13.48 13.31 23.56 23.61 24.70 59.84 50.35 84.13 9 164 0 Atlanta 551 502 49 $4,787.8 4,645.8 142.0 4,028.5 3,909.2 119.3 57,315 56,694 621 Chicago 1,040 897 143 $5,666.0 5,574.0 92.1 4,519.7 4,450.8 68.8 68,067 65,912 2,155 Kansas City 1,237 1,198 39 $4,198.7 4,152.1 46.6 3,503.0 3,464.1 38.9 45,657 45,218 439 Dallas 1,075 1,006 69 $2,041.5 1,389.1 652.4 1,776.6 1,188.0 588.6 21,286 17,618 3,668 San Francisco 359 329 30 $2,570.9 2,416.6 154.3 2,183.1 2,057.8 125.3 40,816 36,053 4,763 2.62 0.20 2.42 1.22 2.09 -0.03 1.06 1.38 1.08 10.34 0.26 2.75 0.15 2.60 1.13 2.19 -0.20 1.25 1.51 1.26 11.97 0.26 2.27 0.12 2.16 1.62 2.19 -0.21 1.25 1.59 1.25 13.10 0.19 2.71 0.18 2.53 1.17 2.27 -0.18 1.09 1.40 1.10 11.19 0.31 2.88 0.18 2.70 0.93 2.16 -0.04 1.11 1.36 1.12 11.27 0.10 3.63 0.28 3.35 1.76 2.75 -0.03 1.68 2.23 1.71 16.60 0.33 -178.54 63.82 0.00 84.62 -25.91 60.53 3.99 82.32 -147.30 62.20 5.44 78.04 -249.83 61.13 3.37 69.71 -111.94 64.85 1.54 72.92 -81.18 61.78 2.70 77.67 -15.07 55.60 2.79 80.50 93.07 90.55 91.33 91.18 90.82 91.31 94.37 94.42 1.34 210.81 1.74 182.35 1.55 166.02 1.59 176.48 1.56 191.27 1.44 179.10 1.70 166.57 1.26 85.38 1.88 328.50 0.42 10.83 10.64 15.81 15.83 16.94 67.72 58.21 85.94 0.44 10.86 10.23 14.33 14.36 15.42 73.10 61.79 84.45 0.56 10.31 9.24 13.62 13.85 15.03 67.86 56.86 81.86 0.37 9.50 8.05 14.14 14.18 15.63 45.86 37.69 71.81 0.45 10.32 9.04 14.83 14.44 15.75 57.97 48.03 77.86 0.40 10.21 8.26 13.28 13.37 14.46 54.35 45.73 81.56 0.37 9.52 8.33 14.34 14.40 15.55 52.84 42.15 70.63 0.49 9.81 8.81 13.52 13.60 15.59 55.26 46.10 68.68 0.69 9.64 8.88 15.03 15.16 16.20 50.75 44.17 86.99 0.35 10.14 9.76 14.48 14.74 15.88 69.36 58.90 83.81 9 33 0 0 100 0 0 27 0 0 4 0 0 0 0 0 16 0 3 17 0 3 28 0 0 56 0 1 35 0 2 12 0 PRIOR FULL YEARS (The way it was…) Number of institutions 2020 2018 2016 5,002 5,406 5,913 946 1,278 1,541 3,129 3,353 3,637 776 638 621 138 128 105 13 9 9 593 659 724 570 626 720 1,069 1,163 1,271 1,292 1,379 1,485 1,107 1,182 1,268 371 397 445 Total assets (in billions) 2020 2018 2016 $21,868.9 17,943.0 16,779.7 $57.2 75.9 91.5 $1,101.4 1,108.6 1,173.9 $2,069.8 1,734.8 1,761.8 $6,358.5 6,202.3 5,305.7 $12,282.0 8,821.4 8,446.9 $4,015.1 3,362.0 3,096.4 $4,485.3 3,677.0 3,507.3 $5,205.7 4,042.6 3,784.3 $4,134.1 3,670.8 3,633.9 $1,792.6 1,133.1 1,010.7 $2,236.1 2,057.6 1,747.0 Return on assets (%) 2020 2018 2016 0.72 1.35 1.04 0.84 1.01 0.89 1.21 1.23 1.08 1.11 1.33 1.01 0.71 1.46 1.07 0.61 1.29 1.03 0.62 1.22 0.87 0.59 1.44 1.02 0.87 1.26 1.00 0.49 1.25 1.09 0.98 1.40 1.02 1.03 1.74 1.40 Net charge-offs to loans & leases (%) 2020 2018 2016 0.50 0.48 0.47 0.13 0.18 0.21 0.12 0.16 0.14 0.22 0.20 0.25 0.66 0.70 0.64 0.51 0.43 0.47 0.48 0.59 0.52 0.54 0.55 0.54 0.41 0.23 0.27 0.53 0.50 0.53 0.31 0.24 0.31 0.70 0.73 0.58 Noncurrent assets plus OREO to assets (%) 2020 2018 2016 0.61 0.60 0.86 0.74 0.97 1.10 0.60 0.73 0.96 0.65 0.64 0.84 0.83 0.62 0.78 0.50 0.57 0.90 0.60 0.58 0.70 0.55 0.65 1.03 0.52 0.54 0.79 0.70 0.68 1.00 1.08 0.76 1.06 0.48 0.44 0.53 Equity capital ratio (%) 2020 2018 2016 10.17 11.25 11.10 13.44 13.57 12.70 11.27 11.50 11.14 10.94 11.91 11.55 10.84 12.08 11.87 9.58 10.49 10.50 10.49 12.53 12.11 10.78 12.07 12.05 9.59 10.35 10.32 9.83 10.23 9.87 10.08 11.81 10.92 10.44 11.02 11.79 * See Table V-A (page 11) for explanations. ** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator represents the provision for loan and lease losses. *** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date. FDIC QUARTERLY 7 2022 • Volume 16 • Number 1 TABLE IV-A. Fourth Quarter 2021, All FDIC-Insured Institutions Asset Concentration Groups* FOURTH QUARTER (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions Performance Ratios (annualized, %) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Credit 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 Structural Changes New reporters Institutions absorbed by mergers Failed institutions All Insured Institutions 4,839 4,231 608 $23,719.3 22,195.2 1,524.1 19,701.6 18,410.3 1,291.3 63,872 60,077 3,795 Credit Card Banks 12 11 1 $499.8 413.8 86.1 351.3 286.2 65.1 5,399 4,636 763 International Banks 5 5 0 $5,827.2 5,827.2 0.0 4,618.9 4,618.9 0.0 12,586 12,586 0 Agricultural Banks 1,121 1,110 11 $302.8 297.2 5.5 260.0 256.5 3.5 794 750 43 Commercial Lenders 2,417 2,187 230 $7,372.2 6,927.9 444.2 6,226.4 5,877.7 348.7 20,638 19,264 1,374 Mortgage Lenders 293 80 213 $776.3 122.9 653.4 694.5 106.2 588.3 1,639 378 1,260 Consumer Lenders 33 21 12 $352.9 345.2 7.7 301.2 294.6 6.7 1,626 1,612 14 Other Specialized <$1 Billion 357 326 31 $83.4 77.7 5.7 70.7 66.4 4.2 332 93 239 All Other <$1 Billion 506 412 94 $130.1 104.3 25.8 112.8 91.2 21.5 275 239 36 All Other >$1 Billion 95 79 16 $8,374.6 8,078.9 295.7 7,065.9 6,812.6 253.3 20,583 20,517 66 2.71 0.15 2.56 1.24 2.28 -0.01 1.08 1.32 1.09 10.90 0.21 11.65 0.92 10.74 6.17 9.21 1.46 4.40 5.69 4.42 34.02 1.58 2.01 0.10 1.91 1.41 2.14 -0.13 0.86 1.11 0.86 9.46 0.28 3.53 0.32 3.21 0.55 2.33 0.08 1.00 1.22 1.06 9.70 0.07 3.09 0.18 2.92 0.99 2.28 -0.02 1.13 1.42 1.14 10.52 0.09 1.82 0.12 1.70 0.74 1.35 -0.02 0.85 1.10 0.87 10.30 0.01 4.05 0.54 3.51 1.31 1.79 0.30 1.89 2.53 1.90 20.63 0.34 2.52 0.21 2.31 3.20 3.40 0.04 1.53 2.04 1.61 12.12 0.21 3.30 0.27 3.03 1.19 3.03 0.06 0.82 0.98 0.86 7.81 0.07 2.29 0.10 2.19 1.10 2.05 -0.03 0.99 1.10 1.00 10.15 0.17 -8.48 63.20 7.81 52.06 110.35 55.94 0.00 58.33 -123.23 68.16 0.00 60.00 183.19 64.82 11.60 47.55 -41.70 61.33 4.05 55.65 -593.16 56.18 9.90 56.31 137.42 38.87 9.09 63.64 65.71 62.95 18.77 43.14 147.50 74.99 9.88 47.23 -38.74 65.57 1.05 54.74 0 72 0 0 0 0 0 0 0 0 14 0 0 55 0 0 0 0 0 0 0 0 0 0 0 1 0 0 2 0 PRIOR FOURTH QUARTERS (The way it was...) Return on assets (%) 2020 2018 2016 1.10 1.33 1.03 4.49 3.36 2.20 1.05 1.03 1.03 1.15 1.22 1.08 1.15 1.26 0.91 0.90 1.12 1.00 2.34 1.32 0.80 2.68 3.96 3.22 1.05 1.11 0.83 0.83 1.42 1.03 Net charge-offs to loans & leases (%) 2020 2018 2016 0.42 0.50 0.52 2.78 3.85 3.76 0.54 0.49 0.61 0.18 0.21 0.25 0.24 0.21 0.27 0.06 0.06 0.06 0.45 0.80 0.60 0.17 0.25 0.33 0.09 0.22 0.23 0.37 0.39 0.42 * See Table V-A (page 10) for explanations. ** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator represents the provision for loan and lease losses. 8 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE IV-A. Fourth Quarter 2021, All FDIC-Insured Institutions Asset Size Distribution FOURTH QUARTER (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions Performance Ratios (annualized, %) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Credit 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 Structural Changes New reporters Institutions absorbed by mergers Failed institutions $100 Million to $1 Billion to $1 Billion $10 Billion 3,049 813 2,702 675 347 138 $1,125.0 $2,221.7 988.0 1,866.0 136.9 355.8 966.9 1,878.2 854.1 1,584.8 112.8 293.4 3,133 7,212 2,590 6,137 543 1,074 Geographic Regions* All Insured Institutions 4,839 4,231 608 $23,719.3 22,195.2 1,524.1 19,701.6 18,410.3 1,291.3 63,872 60,077 3,795 Less Than $100 Million 817 712 105 $49.9 44.0 5.9 42.0 37.5 4.6 82 70 12 $10 Billion to $250 Billion 147 130 17 $7,076.0 6,471.1 605.0 5,929.0 5,441.1 487.8 22,220 20,769 1,450 Greater Than $250 Billion New York 13 577 12 299 1 278 $13,246.6 $4,454.4 12,826.1 4,017.7 420.5 436.7 10,885.6 3,690.7 10,492.9 3,340.3 392.7 350.4 31,226 11,170 30,510 9,953 716 1,217 2.71 0.15 2.56 1.24 2.28 -0.01 1.08 1.32 1.09 10.90 0.21 3.45 0.33 3.12 1.79 3.82 0.08 0.66 0.78 0.66 4.81 0.09 3.57 0.30 3.27 1.28 2.99 0.08 1.09 1.32 1.13 10.30 0.08 3.56 0.24 3.33 1.21 2.63 0.08 1.29 1.65 1.32 12.08 0.14 3.29 0.21 3.08 1.30 2.45 0.09 1.27 1.64 1.28 12.26 0.23 2.16 0.09 2.07 1.20 2.06 -0.09 0.95 1.10 0.95 9.97 0.22 -8.48 63.20 7.81 52.06 169.12 81.37 24.48 45.41 183.37 68.45 5.48 51.39 82.41 60.42 1.11 59.90 63.70 58.21 1.36 57.14 0 72 0 0 12 0 0 39 0 0 19 0 Atlanta 551 502 49 $4,787.8 4,645.8 142.0 4,028.5 3,909.2 119.3 13,965 13,837 128 Chicago 1,040 897 143 $5,666.0 5,574.0 92.1 4,519.7 4,450.8 68.8 15,097 14,584 513 Kansas City 1,237 1,198 39 $4,198.7 4,152.1 46.6 3,503.0 3,464.1 38.9 8,974 8,866 108 Dallas 1,075 1,006 69 $2,041.5 1,389.1 652.4 1,776.6 1,188.0 588.6 4,830 3,956 874 San Francisco 359 329 30 $2,570.9 2,416.6 154.3 2,183.1 2,057.8 125.3 9,836 8,881 955 2.62 0.17 2.45 1.22 2.13 0.04 1.00 1.29 1.01 9.75 0.21 2.77 0.14 2.62 0.96 2.20 -0.02 1.19 1.18 1.19 11.51 0.21 2.26 0.11 2.15 1.48 2.16 -0.10 1.07 1.37 1.07 11.25 0.15 2.72 0.15 2.57 1.09 2.41 -0.08 0.85 1.10 0.85 8.72 0.26 2.79 0.15 2.64 0.84 2.14 0.02 0.96 1.17 0.97 9.88 0.10 3.63 0.23 3.39 1.83 2.84 0.19 1.54 2.03 1.56 15.31 0.28 -94.03 66.68 0.00 76.92 38.20 61.37 4.33 58.75 -14.38 64.90 8.71 52.63 -130.02 62.66 7.40 47.31 -64.49 69.96 10.19 44.79 30.14 63.98 7.63 59.26 110.90 55.98 5.57 57.66 0 2 0 0 0 0 0 7 0 0 7 0 0 12 0 0 28 0 0 13 0 0 5 0 PRIOR FOURTH QUARTERS (The way it was…) Return on assets (%) 2020 2018 2016 1.10 1.33 1.03 0.65 0.87 0.69 1.22 1.24 1.04 1.30 1.32 0.86 1.34 1.49 1.05 0.94 1.24 1.05 0.89 1.25 0.87 1.08 1.45 0.99 1.24 1.19 1.07 0.88 1.19 1.08 1.04 1.34 0.79 1.67 1.81 1.33 Net charge-offs to loans & leases (%) 2020 2018 2016 0.42 0.50 0.52 0.15 0.25 0.36 0.15 0.19 0.23 0.24 0.21 0.35 0.52 0.73 0.71 0.42 0.44 0.49 0.42 0.58 0.61 0.41 0.58 0.58 0.37 0.24 0.30 0.43 0.51 0.59 0.25 0.30 0.33 0.58 0.78 0.67 * See Table V-A (page 11) for explanations. ** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator represents the provision for loan and lease losses. FDIC QUARTERLY 9 2022 • Volume 16 • Number 1 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* All Insured Institutions Credit Card Banks International Banks Agricultural Banks Commercial Lenders Mortgage Lenders Consumer Lenders Other Specialized <$1 Billion All Other <$1 Billion All Other >$1 Billion Percent of Loans 30-89 Days Past Due All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.42 0.34 0.19 0.14 0.42 0.68 0.41 1.02 0.88 1.15 0.30 0.50 0.25 0.00 0.11 0.00 0.00 0.28 0.45 1.08 1.09 0.93 0.26 1.01 0.36 0.42 0.35 0.16 0.48 0.44 0.81 0.65 0.62 0.72 0.47 0.54 0.39 0.43 0.26 0.10 0.42 0.70 0.50 0.89 1.51 0.82 0.30 0.40 0.32 0.30 0.17 0.13 0.36 0.62 0.26 0.80 1.38 0.76 0.22 0.33 0.36 1.08 0.21 0.30 0.19 0.35 0.18 0.26 0.77 0.25 0.03 0.33 0.21 0.11 0.02 0.10 0.20 0.24 0.23 1.57 0.91 1.58 0.06 1.04 0.77 0.58 0.53 0.10 0.45 1.12 0.80 1.10 1.92 1.06 0.44 0.78 0.58 0.38 0.36 0.06 0.47 0.77 0.63 1.10 0.95 1.10 0.51 0.62 0.65 0.42 0.22 0.15 0.51 0.90 0.44 1.20 0.81 1.38 0.23 0.61 Percent of Loans Noncurrent** All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 1.29 0.47 0.69 0.25 2.09 2.04 0.68 0.64 0.83 0.47 0.23 0.89 0.81 0.08 1.16 2.60 0.00 0.74 0.29 0.98 1.03 0.34 0.39 0.91 1.46 1.94 0.75 0.16 5.71 1.78 1.02 0.52 0.62 0.25 0.24 0.82 0.72 0.40 0.70 0.33 0.24 0.57 1.00 0.36 0.37 0.36 0.65 0.73 1.03 0.34 0.61 0.24 1.17 2.18 0.68 0.43 1.01 0.39 0.26 0.85 0.72 0.50 0.49 0.51 0.47 0.77 0.64 0.07 0.42 0.06 0.09 0.65 0.32 0.19 0.20 0.16 3.68 0.29 0.96 0.78 0.95 0.78 0.09 0.68 0.83 0.65 0.78 0.26 0.32 0.87 0.65 0.42 0.69 0.40 0.73 0.78 0.66 0.39 0.81 0.20 0.36 0.64 0.64 0.38 0.47 0.38 0.58 0.64 1.90 0.69 1.00 0.37 2.77 2.40 0.53 0.57 0.76 0.48 0.19 1.00 Percent of Loans Charged-Off (net, YTD) All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.01 0.01 0.06 0.02 -0.17 -0.02 0.19 1.19 2.17 0.36 0.09 0.25 0.06 0.18 0.44 0.00 0.00 0.01 0.74 2.15 2.22 1.20 0.29 2.00 -0.06 0.03 0.04 0.00 -0.60 -0.06 0.28 1.60 2.09 0.30 0.06 0.38 0.02 0.06 0.04 0.06 0.04 0.02 0.14 0.25 0.83 0.18 0.03 0.05 0.02 0.01 0.07 0.02 -0.09 -0.02 0.19 0.57 3.05 0.41 0.11 0.11 0.00 0.02 0.07 0.12 -0.05 -0.01 -0.11 0.22 1.78 0.17 0.09 0.01 -0.01 -0.18 0.02 0.01 -0.20 -0.01 0.11 0.42 1.13 0.41 0.11 0.27 -0.03 -0.08 -0.11 0.00 -0.07 0.02 0.01 0.58 0.16 0.60 1.21 0.08 0.01 -0.05 0.04 0.00 0.01 0.00 0.11 0.21 0.83 0.20 0.07 0.04 0.00 0.01 0.03 0.01 -0.17 0.00 0.13 0.89 2.16 0.30 0.10 0.20 $5,258.4 401.1 1,645.6 512.6 265.1 2,259.0 2,314.0 1,882.0 871.1 1,010.9 1,794.7 11,249.0 $2.8 0.1 0.3 0.0 0.0 2.3 42.5 381.6 358.8 22.8 0.7 427.6 $570.7 17.0 62.0 85.8 24.3 326.5 341.6 385.2 282.4 102.9 548.2 1,845.8 $112.5 7.7 30.0 4.0 1.7 25.4 21.6 6.3 0.6 5.7 35.8 176.2 $2,809.4 293.4 1,181.4 331.3 141.5 811.6 1,070.5 283.0 17.2 265.8 378.1 4,541.0 $175.3 5.5 15.7 4.1 7.1 142.1 7.3 14.1 0.4 13.7 7.4 204.1 $51.9 0.4 6.5 0.8 0.7 43.6 35.0 150.2 1.4 148.8 8.9 246.1 $17.8 1.8 6.5 0.6 0.5 7.2 3.0 1.8 0.1 1.7 1.2 23.7 $53.9 4.2 12.4 1.8 1.7 29.9 5.9 5.4 0.1 5.3 3.2 68.4 $1,464.1 71.0 330.9 84.1 87.5 870.2 786.5 654.3 210.2 444.2 811.2 3,716.2 2,960.6 567.6 1,498.1 42.9 779.3 64.0 2.7 0.2 2.4 0.0 0.1 0.0 232.0 1.0 88.0 0.0 135.0 0.0 117.0 12.6 53.0 3.0 17.3 31.2 1,630.4 465.4 844.9 34.7 258.0 26.7 52.4 7.9 22.1 0.2 21.2 1.0 10.4 0.0 0.3 0.1 10.0 0.0 41.4 15.3 18.3 0.0 6.3 1.5 72.7 27.5 23.9 4.7 15.2 1.4 801.6 37.6 445.2 0.1 316.3 2.2 December 31, 2021 Loans Outstanding (in billions) All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases (plus unearned income) Memo: Other Real Estate Owned (in millions) All other real estate owned Construction and development Nonfarm nonresidential Multifamily residential real estate 1-4 family residential Farmland * Asset Concentration Group Definitions (Groups are hierarchical and mutually exclusive): Credit-card Lenders - Institutions whose credit-card loans plus securitized receivables exceed 50 percent of total assets plus securitized receivables. International Banks - Banks with assets greater than $10 billion and more than 25 percent of total assets in foreign offices. Agricultural Banks - Banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of the total loans and leases. Commercial Lenders - Institutions whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties exceed 25 percent of total assets. Mortgage Lenders - Institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets. Consumer Lenders - Institutions whose residential mortgage loans, plus credit-card loans, plus other loans to individuals, exceed 50 percent of total assets. Other Specialized < $1 Billion - Institutions with assets less than $1 billion, whose loans and leases are less than 40 percent of total assets. All Other < $1 billion - Institutions with assets less than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. All Other > $1 billion - Institutions with assets greater than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. 10 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution Geographic Regions* All Insured Institutions Less Than $100 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Percent of Loans 30-89 Days Past Due All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.42 0.34 0.19 0.14 0.42 0.68 0.41 1.02 0.88 1.15 0.30 0.50 0.80 0.54 0.62 0.42 0.30 1.13 0.69 1.19 1.50 1.19 0.38 0.76 0.37 0.28 0.22 0.16 0.30 0.62 0.44 1.14 1.71 1.10 0.30 0.41 0.24 0.31 0.14 0.09 0.25 0.42 0.34 1.38 2.63 1.11 0.24 0.32 0.38 0.28 0.17 0.14 0.40 0.65 0.24 0.94 1.01 0.87 0.20 0.44 0.58 0.55 0.26 0.18 0.50 0.78 0.54 1.06 0.71 1.39 0.35 0.61 Percent of Loans Noncurrent** All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 1.29 0.47 0.69 0.25 2.09 2.04 0.68 0.64 0.83 0.47 0.23 0.89 0.97 0.45 1.06 0.53 0.23 0.98 1.32 0.64 0.87 0.64 0.94 0.99 0.60 0.43 0.58 0.27 0.54 0.64 0.71 0.42 1.36 0.35 0.63 0.61 0.60 0.37 0.54 0.28 0.45 0.87 0.83 0.70 2.22 0.37 0.27 0.63 1.39 0.29 0.70 0.22 1.14 2.57 0.62 0.69 0.97 0.43 0.28 0.95 Percent of Loans Charged-Off (net, YTD) All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.01 0.01 0.06 0.02 -0.17 -0.02 0.19 1.19 2.17 0.36 0.09 0.25 0.02 -0.01 0.03 -0.01 -0.01 0.01 0.15 0.29 3.55 0.26 0.11 0.07 0.01 0.00 0.01 0.01 0.00 0.00 0.14 0.51 3.20 0.31 0.14 0.06 0.03 0.00 0.06 0.01 -0.03 0.00 0.18 1.23 4.82 0.45 0.07 0.12 $5,258.4 401.1 1,645.6 512.6 265.1 2,259.0 2,314.0 1,882.0 871.1 1,010.9 1,794.7 $17.3 1.1 3.6 0.5 0.3 8.2 3.1 1.6 0.0 1.6 3.5 $509.5 50.8 193.8 28.8 14.4 171.2 88.3 26.1 1.9 24.1 40.5 11,249.0 25.5 2,960.6 567.6 1,498.1 42.9 779.3 64.0 39.4 7.5 12.3 6.2 11.7 1.7 December 31, 2021 Loans Outstanding (in billions) All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases (plus unearned income) Memo: Other Real Estate Owned (in millions) All other real estate owned Construction and development Nonfarm nonresidential Multifamily residential real estate 1-4 family residential Farmland Greater Than $250 Billion New York Atlanta Chicago Kansas City Dallas San Francisco 0.41 0.37 0.25 0.18 0.35 0.66 0.30 0.86 1.02 0.75 0.25 0.44 0.48 0.26 0.15 0.16 0.46 0.77 0.37 1.52 1.06 1.89 0.16 0.61 0.46 0.29 0.17 0.14 0.51 0.71 0.44 0.60 0.59 0.61 0.46 0.48 0.50 0.42 0.20 0.16 0.48 0.79 0.61 0.91 0.74 1.22 0.35 0.55 0.45 0.29 0.19 0.10 0.35 0.91 0.32 0.77 0.48 0.87 0.16 0.42 0.20 0.46 0.13 0.04 0.22 0.26 0.34 1.16 1.02 1.27 0.19 0.45 1.77 1.01 0.93 0.26 3.56 2.20 0.69 0.59 0.67 0.52 0.19 0.94 1.23 0.91 1.01 0.34 1.86 1.75 0.73 0.69 1.03 0.46 0.13 0.90 1.29 0.29 0.59 0.62 1.58 1.99 0.52 0.77 0.97 0.62 0.14 0.82 1.28 0.87 0.70 0.18 2.57 1.73 0.65 0.33 0.55 0.16 0.27 0.80 1.61 0.23 0.76 0.11 4.12 2.43 0.80 0.64 0.73 0.47 0.29 1.02 1.97 0.19 0.45 0.16 0.83 5.21 0.71 0.49 0.83 0.39 0.18 1.48 0.47 0.27 0.51 0.09 0.65 0.54 0.78 0.75 0.89 0.63 0.34 0.57 0.03 0.01 0.09 0.03 -0.09 -0.01 0.20 1.22 2.14 0.40 0.09 0.30 -0.03 0.04 0.02 0.01 -0.28 -0.03 0.19 1.19 2.12 0.33 0.09 0.27 0.03 0.10 0.08 0.03 -0.11 -0.01 0.20 1.26 2.46 0.47 0.10 0.26 0.00 -0.05 0.05 0.04 -0.20 -0.01 0.17 1.07 2.07 0.26 0.12 0.26 -0.02 0.02 0.06 0.00 -0.23 -0.04 0.21 0.94 1.93 0.17 0.07 0.19 0.00 0.00 0.04 0.02 -0.17 -0.01 0.21 1.71 2.32 0.65 0.08 0.31 0.01 0.00 0.04 0.01 -0.17 -0.01 0.18 0.65 1.53 0.37 0.08 0.10 0.01 -0.04 0.06 0.00 -0.07 -0.01 0.17 1.21 2.20 0.42 0.12 0.33 $1,002.7 104.1 438.9 107.8 33.5 284.9 241.5 79.6 14.1 65.4 68.4 $1,941.7 165.2 658.3 229.6 99.9 772.7 838.7 816.2 388.8 427.4 499.0 $1,787.2 80.0 350.9 146.0 116.9 1,021.9 1,142.4 958.5 466.2 492.3 1,183.3 $1,122.6 78.2 381.3 176.5 64.6 416.8 420.3 340.3 135.7 204.6 291.9 $891.0 61.4 303.3 41.4 58.5 414.0 536.2 439.2 197.8 241.4 358.2 $1,051.2 64.6 249.2 128.7 64.2 519.7 528.4 375.8 166.1 209.6 467.8 $858.2 56.6 214.1 49.8 35.2 401.5 392.7 295.2 191.2 104.0 423.2 $595.7 91.4 246.2 26.6 17.8 193.0 174.5 69.5 16.3 53.2 73.9 $739.6 48.9 251.5 89.7 24.9 314.0 261.9 362.1 164.0 198.2 179.8 664.3 1,392.2 4,095.6 5,071.3 2,175.1 2,224.5 2,423.2 1,969.2 913.5 1,543.4 617.0 246.7 217.2 24.5 92.3 36.2 782.8 184.2 473.0 5.6 94.7 24.6 679.6 108.4 301.8 6.0 261.9 1.5 841.8 20.7 493.7 0.6 318.7 0.0 443.1 62.8 147.5 6.4 226.1 0.4 763.2 140.5 462.3 9.4 145.4 5.6 613.1 60.5 318.9 1.7 220.5 10.8 444.3 109.1 217.1 5.5 84.9 19.7 557.4 163.5 298.0 13.2 65.0 17.7 139.5 31.2 54.3 6.8 37.4 9.9 * Regions: New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, U.S. Virgin Islands Atlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia Chicago - Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin Kansas City - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota Dallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, Texas San Francisco - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC QUARTERLY 11 2022 • Volume 16 • Number 1 TABLE VI-A. Derivatives, All FDIC-Insured Call Report Filers Asset Size Distribution (dollar figures in millions; notional amounts unless otherwise indicated) ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives Total derivatives 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 % Change 20Q42 1Q4 1,307 $21,889,826 18,158,080 179,313,801 1,358 $21,479,239 17,677,856 187,643,808 1,373 $21,030,025 17,273,942 186,058,289 1,388 $20,815,146 17,013,885 191,684,273 1,388 $20,135,034 16,393,952 165,711,801 -5.8 8.7 10.8 8.2 22 $1,514 1,226 210 617 $302,206 258,288 15,904 521 $1,601,414 1,357,651 188,152 134 $6,738,069 5,655,310 4,260,642 13 $13,246,623 10,885,604 174,848,892 Derivative Contracts by Underlying Risk Exposure Interest rate Foreign exchange* Equity Commodity & other (excluding credit derivatives) Credit Total 126,263,377 43,668,294 4,256,115 1,584,207 3,540,460 179,312,453 131,804,111 45,631,510 4,649,081 1,703,480 3,854,151 187,642,333 133,334,810 43,728,636 4,254,960 1,631,946 3,106,414 186,056,766 137,477,490 45,257,498 4,004,712 1,582,254 3,361,030 191,682,984 116,058,438 41,448,704 3,774,715 1,394,504 3,034,285 165,710,646 8.8 5.4 12.8 13.6 16.7 8.2 210 0 0 0 0 210 15,081 0 23 0 16 15,120 181,230 2,770 48 75 3,466 187,589 2,476,581 1,560,231 76,981 98,041 48,807 4,260,642 123,590,274 42,105,293 4,179,063 1,486,092 3,488,171 174,848,892 Derivative Contracts by Transaction Type Swaps Futures & forwards Purchased options Written options Total 109,290,037 31,179,822 16,490,297 16,963,118 173,923,274 111,081,251 35,311,292 17,182,098 17,050,718 180,625,360 106,971,001 37,583,984 17,945,500 17,894,265 180,394,750 107,719,719 40,934,399 18,603,556 18,371,380 185,629,054 96,423,495 32,350,455 16,098,917 15,891,741 160,764,608 13.3 -3.6 2.4 6.7 8.2 0 0 0 0 0 2,010 3,021 363 2,390 7,784 120,688 16,177 15,105 12,075 164,044 2,318,480 1,573,070 142,133 133,867 4,167,550 106,848,859 29,587,554 16,332,697 16,814,786 169,583,895 55,248 -4,023 -8,794 6,479 24,091 -28,518 63,671 11,247 -10,450 15,125 22,626 -25,233 63,856 10,331 -13,321 6,125 16,825 -21,074 69,365 13,849 -6,866 3,967 16,748 -18,373 70,648 -11,466 -7,165 -452 14,331 -18,166 -21.8 NM NM NM 68.1 NM 0 0 0 0 0 0 24 0 4 0 0 0 592 5 2 1 13 -10 5,797 905 -1,104 230 -71 -313 48,835 -4,932 -7,696 6,249 24,149 -28,195 68,042,217 41,249,959 20,474,533 30,953,966 4,863,871 2,551,933 3,880,771 1,055,173 144,720 73,184,579 41,533,803 22,926,827 31,560,013 4,723,452 2,576,222 4,079,641 1,135,840 159,126 71,258,971 45,947,286 22,279,948 30,839,509 4,557,853 2,502,654 3,806,830 957,152 153,371 76,501,727 44,407,789 22,231,036 32,130,016 4,336,231 2,405,347 3,504,313 870,551 124,452 62,457,197 39,201,919 20,844,428 29,434,113 4,404,492 2,402,103 3,287,136 770,821 138,573 8.9 5.2 -1.8 5.2 10.4 6.2 18.1 36.9 4.4 28 5 0 0 0 0 0 0 0 3,402 1,683 2,998 0 0 0 7 16 0 20,249 46,216 80,392 2,048 262 11 3 21 5 1,103,366 770,730 465,503 1,437,913 92,216 11,860 37,463 35,135 2,065 66,915,172 40,431,324 19,925,640 29,514,005 4,771,393 2,540,062 3,843,298 1,020,001 142,651 2,195,295 2,569,198 236,524 2,417,770 2,478,994 519,222 2,234,059 2,137,329 215,849 2,149,899 2,050,971 435,795 1,820,961 2,023,406 215,486 20.6 27.0 9.8 0 0 0 3 18 75 134 861 1,799 37,339 40,863 7,157 2,157,819 2,527,457 227,493 19.4 34.1 24.9 37.3 24.8 34.9 25.6 34.0 30.2 31.0 0.0 0.0 0.3 0.2 1.6 1.0 3.7 4.9 31.6 56.7 53.4 62.3 59.7 59.6 61.2 0.0 0.5 2.7 8.7 88.2 17.9 21.2 21.5 6.8 137.3 -86.9 0.0 6.4 -0.7 5.6 6.7 185 16,931,219 13,957,568 188 16,663,510 13,628,595 190 16,311,705 13,321,986 188 16,167,781 13,125,102 187 15,870,969 12,847,286 -1.1 6.7 8.6 0 0 0 18 9,166 7,905 89 367,964 310,178 67 4,151,617 3,517,380 11 12,402,472 10,122,105 Derivative Contracts by Underlying Risk Exposure Interest rate Foreign exchange Equity Commodity & other Total 122,237,175 41,349,240 4,231,348 1,543,080 169,360,843 127,448,311 41,961,260 4,620,993 1,664,064 175,694,627 129,126,796 40,661,753 4,225,427 1,592,567 175,606,542 133,860,018 42,039,817 3,976,351 1,544,723 181,420,909 112,807,097 39,084,210 3,746,888 1,358,385 156,996,580 8.4 5.8 12.9 13.6 7.9 0 0 0 0 0 536 0 0 0 536 43,964 2,594 36 9 46,602 Trading Revenues: Cash & Derivative Instruments Interest rate** Foreign exchange** Equity** Commodity & other (including credit derivatives)** Total trading revenues** 278 3,747 3,534 -28 7,531 -323 3,998 1,729 1,415 6,819 3,373 1,546 2,384 754 8,057 -29 6,343 2,388 1,785 10,487 3,625 -92.3 18 20,716.7 2,480 42.5 191 -114.7 6,314 19.3 0 0 0 0 0 0 0 0 0 0 2 6 12 0 19 -59 374 45 32 392 335 3,367 3,478 -60 7,120 5.4 18.3 4.8 15.4 5.8 18.1 7.5 21.0 4.6 16.8 0.0 0.0 0.0 0.0 0.5 1.5 1.1 3.8 7.1 24 577 20,931,820 17,350,292 607 20,529,306 16,878,746 609 19,988,674 16,400,333 615 19,820,456 16,180,006 623 19,249,586 15,655,539 -7.4 8.7 10.8 0 0 0 129 67,606 57,575 310 1,171,023 986,831 125 6,446,568 5,420,281 13 13,246,623 10,885,604 3,998,706 497,831 24,767 41,128 4,562,432 4,320,508 542,719 28,088 39,417 4,930,733 4,170,881 548,414 29,534 39,380 4,788,208 3,573,201 569,053 28,361 37,531 4,208,145 3,192,677 511,407 27,826 36,119 3,768,028 25.2 -2.7 -11.0 13.9 21.1 0 0 0 0 0 7,226 0 23 0 7,248 117,300 64 12 66 117,442 1,299,225 38,610 9,033 4,788 1,351,656 2,574,955 459,157 15,699 36,273 3,086,085 Fair Value of Derivative Contracts Interest rate contracts Foreign exchange contracts Equity contracts Commodity & other (excluding credit derivatives) Credit derivatives as guarantor** Credit derivatives as beneficiary** Derivative Contracts by Maturity*** Interest rate contracts < 1 year 1-5 years > 5 years Foreign exchange and gold contracts < 1 year 1-5 years > 5 years Equity contracts < 1 year 1-5 years > 5 years Commodity & other contracts (including credit derivatives, excluding gold contracts) < 1 year 1-5 years > 5 years Risk-Based Capital: Credit Equivalent Amount Total current exposure to tier 1 capital (%) Total potential future exposure to tier 1 capital (%) Total exposure (credit equivalent amount) to tier 1 capital (%) Credit losses on derivatives**** HELD FOR TRADING Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives Share of Revenue Trading revenues to gross revenues (%)** Trading revenues to net operating revenues (%)** HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives Derivative Contracts by Underlying Risk Exposure Interest rate Foreign exchange Equity Commodity & other Total notional amount Less Than $100 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 Billion 1,177,357 121,015,319 1,477,337 39,869,310 67,948 4,163,364 93,253 1,449,818 2,815,894 166,497,811 All line items are reported on a quarterly basis. N/M - Not Meaningful * Includes spot foreign exchange contracts. All other references to foreign exchange contracts in which notional values or fair values are reported exclude spot foreign exchange contracts. ** Does not include banks filing the FFIEC 051 report form, which was introduced in first quarter 2017. *** Derivative contracts subject to the risk-based capital requirements for derivatives. **** Credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and banks filing the FFIEC 041 report form that have $300 million or more in total assets, but is not applicaable to banks filing the FFIEC 051 form. 12 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Call Report Filers)* Asset Size Distribution (dollar figures in millions) Assets Securitized and Sold with Servicing Retained or with Recourse or Other Seller-Provided Credit Enhancements Number of institutions reporting securitization activities Outstanding Principal Balance by Asset Type 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total securitized and sold Maximum Credit Exposure by Asset Type 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total credit exposure Total unused liquidity commitments provided to institution’s own securitizations Securitized Loans, Leases, and Other Assets 30-89 Days Past Due (%) 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total loans, leases, and other assets Securitized Loans, Leases, and Other Assets 90 Days or More Past Due (%) 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total loans, leases, and other assets Securitized Loans, Leases, and Other Assets Charged-off (net, YTD, annualized, %) 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total loans, leases, and other assets Seller’s Interests in Institution's Own Securitizations – Carried as Loans Home equity loans Credit card receivables Commercial and industrial loans Seller’s Interests in Institution's Own Securitizations – Carried as Securities Home equity loans Credit card receivables Commercial and industrial loans Assets Sold with Recourse and Not Securitized Number of institutions reporting asset sales Outstanding Principal Balance by Asset Type 1-4 family residential loans All other loans, leases, and other assets Total sold and not securitized 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 % Change 20Q421Q4 Less Than $100 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 Billion 35 9 62 63 60 59 57 8.8 1 6 11 $324,821 6 0 169 1,241 6,624 106,355 439,216 $344,767 6 0 209 1,313 6,285 101,198 453,778 $356,054 7 0 316 1,388 0 95,055 452,820 $358,230 7 0 392 1,469 0 91,085 451,183 $382,125 8 0 289 1,569 0 87,334 471,325 -15.0 -25.0 0.0 -41.5 -20.9 0.0 21.8 -6.8 $0 0 0 0 0 0 3 3 $5,423 0 0 0 0 0 0 5,423 $10,938 0 0 0 0 0 7,252 18,190 1,041 0 0 2 0 275 2,500 3,818 241 1,016 0 0 2 0 257 2,414 3,689 255 964 0 0 26 0 0 2,301 3,291 67 1,057 0 0 26 0 0 2,274 3,357 76 1,210 0 0 26 0 0 2,029 3,265 71 -14.0 0.0 0.0 -92.3 0.0 0.0 23.2 16.9 239.4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 51 0 0 0 0 0 63 114 0 476 0 0 2 0 0 118 0 0 514 0 0 0 0 275 2,320 3,109 241 2.1 4.4 0.0 1.6 2.7 0.0 0.5 1.7 1.9 7.5 0.0 1.4 2.5 0.0 0.4 1.6 1.9 1.9 0.0 2.0 2.4 0.0 0.6 1.7 2.0 6.3 0.0 1.9 2.9 0.0 0.5 1.8 2.7 5.3 0.0 4.2 3.1 0.0 0.6 2.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.0 0.0 0.0 0.0 0.0 0.5 0.0 1.7 4.4 0.0 1.6 1.7 0.0 1.7 1.4 2.3 0 0 0 3.8 0 0.4 1.7 1.9 28.1 0.0 0.1 2.5 0.0 1.3 1.5 2.2 26.3 0.0 0.1 2.3 0.0 1.5 1.8 2.4 27.3 0.0 0.2 2.2 0.0 1.9 2.1 2.7 24.5 0.0 0.2 2.4 0.0 1.8 2.3 3.0 28.9 0.0 0.6 2.4 0.0 2.4 2.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 2.0 0.0 2.6 28.1 0.0 0.1 1.0 0.0 0.3 2.0 1.6 0 0 0 3.8 0 1.3 1.5 0.0 2.9 0.0 0.0 0.5 0.0 0.2 0.1 0.0 3.0 0.0 0.0 0.3 0.0 0.2 0.0 0.0 1.7 0.0 0.0 0.2 0.0 0.1 0.0 0.0 1.8 0.0 0.1 0.1 0.0 0.1 0.0 0.1 11.9 0.0 3.6 1.0 0.0 0.2 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.9 0.0 0.0 0.3 0.0 0.6 0.0 0 0 0 0 0.8 0 0.2 0.1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0 0.0 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0 0.0 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $95,010 $213,449 6 0 0 0 169 0 613 628 0 6,624 7,019 92,081 102,817 312,783 329 342 345 340 343 -4.1 4 105 145 66 9 32,269 139,581 171,849 33,775 137,571 171,346 37,950 135,583 173,533 36,084 135,492 171,577 35,364 131,293 166,657 -8.8 6.3 3.1 70 0 70 5,292 13 5,306 12,949 55 13,004 12,811 38,591 51,402 1,146 100,922 102,068 Maximum Credit Exposure by Asset Type 1-4 family residential loans All other loans, leases, and other assets Total credit exposure 11,750 40,581 52,331 12,469 40,025 52,494 14,644 39,279 53,923 13,149 39,242 52,391 13,564 37,880 51,444 -13.4 7.1 1.7 2 0 2 606 13 619 4,100 33 4,133 6,462 12,204 18,665 580 28,331 28,911 Support for Securitization Facilities Sponsored by Other Institutions Number of institutions reporting securitization facilities sponsored by others Total credit exposure Total unused liquidity commitments 36 21,148 425 37 22,380 432 37 22,536 408 38 23,478 415 37 23,986 418 -2.7 -11.8 1.7 0 0 0 10 0 0 12 0 0 8 1,480 295 6 19,668 130 5,880,634 5,809,510 5,704,667 5,624,426 5,782,059 1.7 27,213 167,639 388,919 1,364,281 3,932,581 21,662 20,788 20,683 18,417 19,694 10.0 0 0 0 0 21,662 51,794 1,624 150 3.4 55,177 1,755 110 3.4 54,035 204 142 3.4 56,072 3,434 106 3.5 56,904 1,029 77 3.6 -9.0 57.8 94.8 0 6 0 0.0 0 293 4 0.1 0 295 1 0.3 248 656 55 2.3 51,546 374 90 5.1 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 (%)*** * Does not include banks filing the FFIEC 051 report form, which was introduced in first quarter 2017. ** The amount of financial assets serviced for others, other than closed-end 1-4 family residential mortgages, is reported when these assets are greater than $10 million. *** Total credit exposure includes the sum of the three line items titled “Total credit exposure” reported above. FDIC QUARTERLY 13 2022 • Volume 16 • Number 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 Collective investment funds and common trust funds (market value) Domestic equity funds International/global equity funds Stock/bond blend funds Taxable bond funds Municipal bond funds Short-term investments/money market funds Specialty/other funds Total collective investment funds 14 FDIC QUARTERLY Asset Size Distribution Dec 31 2021 Dec 31 2020 Dec 31 2019 Dec 31 2018 % Change 2020-2021 Less Than $100 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 Billion 4,839 1,528 1,416 112 1,135 1,046 89 1,081 1,001 80 5,002 1,578 1,461 117 1,171 1,079 92 1,118 1,034 84 5,177 1,627 1,500 127 1,207 1,106 101 1,147 1,055 92 5,406 1,686 1,561 125 1,260 1,162 98 1,199 1,106 93 -3.3 -3.2 -3.1 -4.3 -3.1 -3.1 -3.3 -3.3 -3.2 -4.8 817 111 101 10 65 55 10 62 52 10 3,049 884 837 47 637 599 38 594 562 32 813 417 371 46 330 298 32 322 292 30 147 104 95 9 91 82 9 91 83 8 13 12 12 0 12 12 0 12 12 0 829,855 5,824 83,238 128,417 237,992 163,253 183,013 372,612 4,762,236 1,792 55,982 164,833 744,217 4,917 77,995 131,620 252,130 156,493 160,426 341,460 4,009,783 2,048 49,113 143,307 709,267 7,674 69,079 138,753 253,381 146,718 132,383 301,599 3,581,225 2,125 52,582 130,782 630,296 8,900 76,197 124,625 234,846 122,932 135,186 287,252 2,964,907 2,087 49,756 107,310 11.5 18.4 6.7 -2.4 -5.6 4.3 14.1 9.1 18.8 -12.5 14.0 15.0 20,646 11 95 1,575 4,218 2,733 92 8,035 45,085 10 1,135 2,083 60,424 286 2,932 2,199 8,788 11,826 106 4,933 275,541 143 7,996 6,030 109,152 381 8,078 12,658 18,535 15,229 386 16,394 268,449 282 7,564 16,574 321,881 421 15,867 51,767 91,634 61,478 4,865 49,543 884,391 1,059 17,205 44,678 317,750 4,725 56,266 60,218 114,816 71,986 177,563 293,707 3,288,771 298 22,082 95,468 743,167 686,683 594,988 634,612 493,000 602,747 395,229 508,367 24.9 8.2 2,315 4,203 21,913 3,204 15,931 20,975 31,256 25,194 671,752 633,107 510,203 23,813 454,678 27,836 408,075 23,739 339,960 15,607 12.2 -14.5 8,143 5 96,596 306 39,468 2,447 128,722 6,654 237,275 14,401 2,734,651 630,819 2,319,578 553,382 2,110,931 468,541 1,832,929 391,609 17.9 14.0 25,454 4,306 125,233 13,104 154,512 22,046 610,311 98,890 1,819,142 492,473 6,159,191 2,051,292 5,329,291 1,953,763 4,816,302 1,892,284 4,113,997 1,852,807 15.6 5.0 65,072 85,913 320,781 538,637 364,530 327,343 1,222,907 523,121 4,185,901 576,278 452,238 386,951 339,489 300,897 16.9 14,540 27,104 27,106 215,008 168,480 2,250,463 2,978,739 772,607 4,157,859 3,543,431 2,076,354 3,036,632 773,596 3,846,196 3,429,906 2,504,371 4,697,794 1,620,838 3,584,494 3,998,882 2,152,994 4,432,130 1,489,228 3,338,071 3,470,168 8.4 -1.9 -0.1 8.1 3.3 207,257 14,415 46,119 5 13,593 82,139 15,457 3,970 3,457 42,723 54,566 17,759 18,670 305,078 37,828 981,712 1,086,386 165,248 382,459 510,186 924,788 1,844,722 538,600 3,466,860 2,939,101 14,155,345 4,449,885 13,549,635 4,752,447 16,745,867 15,183,488 4,304,374 3,909,570 4.5 -6.4 295,929 2,006,831 174,860 160,949 461,007 118,417 3,341,000 366,195 9,882,550 1,797,493 143,775,262 129,464,890 110,653,618 96,368,744 24,150,693 13,479,805 13,731,356 13,286,592 11.1 79.2 53,421 184,657 1,942,804 10,035,030 1,321,851 9,478,837 12,996,312 127,460,875 2,081,042 2,371,127 5,228 4,700 4,584 4,745 11.2 138 243 626 2,011 2,210 1,127 1,079 2,693 1,736 11,114 509 17,752 1,079 42,623 35,625 270 1,030 1,102 2,243 1,885 9,585 606 16,127 1,032 38,540 34,306 547 1,195 1,361 2,176 1,875 9,110 803 14,535 926 36,841 34,622 502 1,373 1,502 2,114 1,774 9,140 775 14,927 983 37,511 35,122 300 9.4 -2.1 20.1 -7.9 16.0 -16.0 10.1 4.6 10.6 3.8 -50.6 29 11 81 0 166 6 10 10 458 289 1 96 21 810 6 947 1 664 36 2,950 2,112 4 181 26 283 199 1,094 5 284 190 2,974 2,023 5 297 312 828 538 3,513 169 2,179 269 10,201 7,916 41 524 710 690 993 5,395 327 14,614 575 26,040 23,286 218 6,274 12,682 7,335 10,777 10,137 11,550 9,307 11,154 -14.5 17.7 2 162 2 708 186 1,045 899 3,058 5,185 7,708 1,140,121 344,854 225,365 157,802 2,030 165,770 70,819 2,111,006 894,542 312,134 209,306 153,517 2,106 156,498 62,117 1,794,996 789,065 257,360 175,200 133,911 2,287 143,418 61,674 1,570,104 615,673 202,917 148,831 125,119 2,004 143,955 58,833 1,303,752 27.5 10.5 7.7 2.8 -3.6 5.9 14.0 17.6 9,971 1,232 2,350 1,043 0 3,557 0 18,379 9,203 13,814 515 2,699 0 0 9,186 35,685 12,078 129 897 1,588 47 0 32 15,850 61,395 12,813 37,990 18,626 868 1,887 9,168 144,565 1,047,474 316,866 183,613 133,847 1,115 160,326 52,433 1,896,527 QUARTERLY BANKING PROFILE COMMUNITY BANK PERFORMANCE Community banks are identified based on criteria defined in the FDIC’s 2020 Community Banking Study. When comparing community bank performance across quarters, prior-quarter dollar amounts are based on community banks designated as such in the current quarter, adjusted for mergers. In contrast, prior-quarter ratios are based on community banks designated during the previous quarter. Full-Year 2021 Net Income Rose on Higher Net Interest Income Quarterly Net Income Continued to Increase Year Over Year Net Interest Margin Narrowed Loan and Lease Balances Increased From One Quarter and One Year Ago Asset Quality Continued to Improve Full-Year Net Income Increased in 2021 Full-year 2021 net income increased $7.4 billion (29.3 percent) to $32.7 billion from 2020, driven by higher net interest income (up $6.8 billion, 9.3 percent) and lower provision expense (down $6.0 billion, 84.7 percent). A $974.1 million increase in noninterest income also supported earnings growth, which was partially offset by a $3.9 billion increase in noninterest expense and $2.3 billion increase in income taxes. The net interest margin (NIM) fell 12 basis points from 2020 to 3.27 percent, as the 41 basis point decline in the yield on earning assets outpaced the 29 basis point decline in the cost of funds and growth in earning assets outpaced growth in net interest income. The average community bank full-year pretax return on assets (ROA) ratio increased 22 basis points to 1.52 percent in 2021. The percentage of unprofitable community banks declined from 4.5 percent to 3.2 percent, the lowest level on record. Community Bank Quarterly Net Income Continued to Increase Year Over Year Community bank quarterly net income increased by $511.6 million (7.1 percent) from a year ago to $7.8 billion in fourth quarter 2021. Higher net interest income and lower provision expense more than offset a decline in noninterest income and growth in noninterest expense. Just over half of all community banks (51.2 percent) reported annual improvements in quarterly net income. However, net income declined $719.9 million (8.5 percent) from third quarter 2021 because of higher noninterest expense. The average community bank quarterly pretax ROA ratio decreased 1 basis point from one year ago and 16 basis points from one quarter ago to 1.40 percent, as average asset growth outpaced growth in earnings. Growth in Net Interest Income Lifted Net Operating Revenue Growth in net interest income of $1.3 billion (6.7 percent) overcame a decline in noninterest income of $707.0 million (10.4 percent) to lift net operating revenue $588.4 million (2.3 percent) from fourth quarter 2020. Lower interest expense (down $910.9 million, 35.1 percent) generated most of the growth in net interest income, while lower gains on loan sales (down $1.5 billion, 50.6 percent) drove the decline in noninterest income. Quarterly NIM fell 11 basis points from the year-ago quarter to 3.22 percent, as growth in average earning assets outpaced growth in net interest income. The yield on earning assets fell 30 basis points and the cost of funding earning assets fell 19 basis points from the year-ago quarter. The average cost of funds of 0.26 percent reached the lowest level on record since Quarterly Banking Profile data collection began in first quarter 1984. Chart 1 Chart 2 Contributors to the Year-Over-Year Change in Income FDIC-Insured Community Banks $ Billions 1.5 Positive Factor $0.51 $1.30 -$0.91 -$0.71 $0.56 Negative Factor -$0.21 $0.27 Net Interest Margin Percent Community Banks (3.22) Industry (2.56) 4.00 3.75 3.50 0.5 3.25 3.00 -0.5 2.75 -1.5 7% 7% Net Income Net Interest Income Source: FDIC. -74% -10% 3% Loan Loss Noninterest Noninterest Provisions Income Expense -53% 19% Realized Gains on Securities Income Taxes 2.50 2.25 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: FDIC. FDIC QUARTERLY 15 2022 • Volume 16 • Number 1 Noninterest Expense Increased From the Year-Ago Quarter and Prior Quarter Noninterest expense of $17.1 billion was up $555.9 million (3.4 percent) from fourth quarter 2020, driven by an increase in “all other noninterest expense” of $372.0 million (7.5 percent).1 Higher data processing and marketing expenses drove the increase in the “all other noninterest expense” category. An increase in salary and benefits expense of $167.6 million (1.7 percent) also contributed to the annual growth in noninterest expense. Average assets per employee increased 10.0 percent to $7.1 million from the year-ago quarter. While more than two-thirds of community banks (69.4 percent) reported higher noninterest expense compared with fourth quarter 2020, noninterest expense as a percentage of average assets declined 16 basis points from fourth quarter 2020 to 2.51 percent. Quarterly, noninterest expense rose $733.6 million (4.5 percent) because of both an increase in “all other noninterest expense” of $390.0 million (7.9 percent) and an increase in salary and benefits expense of $331.6 million (3.5 percent). Higher data processing expense drove the quarterly increase in the “all other noninterest expense” category. Provision Expense Decreased From One Year Ago but Increased From One Quarter Ago Provision expense declined $914.9 million (74.0 percent) from fourth quarter 2020 but increased $39.2 million (13.9 percent) from third quarter 2021 to $320.8 million. Eighty-two community banks had adopted current expected credit loss (CECL) accounting as of fourth quarter. Community bank CECL adopters reported negative provision expense of $18.4 million in fourth quarter, an increase of $50.0 million from the previous quarter and a reduction of $173.9 million from one year ago. Provision expense for community banks that had not adopted CECL accounting totaled $339.2 million, a decline of $10.7 million from one quarter ago and $740.9 million from one year ago. Allowance for Loan and Lease Losses to Total Loans Remained Higher Than the Pre-Pandemic Level The allowance for loan and lease losses (ALLL) as a percentage of total loans and leases declined 3 basis points from the year-ago quarter to 1.29 percent. The ALLL as a percentage of loans 90 days or more past due or in nonaccrual status (coverage ratio) increased 53.7 percentage points from the year-ago quarter to 223.8 percent, a record high, due to declining noncurrent loan balances. This ratio is well above the 147.9 percent reported before the pandemic in fourth quarter 2019. The coverage ratio for community banks is 49.9 percentage points above the coverage ratio for noncommunity banks. Total Assets Increased From the Previous Quarter Total assets increased $60.3 billion (2.2 percent) from the previous quarter and $262.9 billion (10.5 percent) from one year ago. Securities were the primary driver of both the quarterly and annual asset growth, increasing $44.0 billion (7.9 percent) from one quarter ago and $169.7 billion (39.0 percent) from one year ago. Despite a small decline in the quarter, cash and balances due from depository institutions remain elevated at 11.5 percent of total assets, higher than the pre-pandemic level (7.0 percent) reported in fourth quarter 2019. 1 All other noninterest expense includes, but is not limited to, automated teller machine and interchange expenses, legal fees, advertising and marketing expenses, consulting expense, data processing expense, and FDIC deposit insurance assessments. Chart 3 Chart 4 Noncurrent Loan Rates for FDIC-Insured Community Banks Change in Loan Balances and Unused Commitments FDIC-Insured Community Banks Change 4Q 2021 vs. 4Q 2020 Change 4Q 2021 vs. 3Q 2021 $ Billions 60 50.6 40 20 17.6 16.3 5.2 4.4 -20 5.9 0.3 0.6 7.1 10.6 -12.2 10 8 6 -60 4 -62.3 Nonfarm Commercial Nonresidential & Industrial RE Source: FDIC. C&I Loans Home Equity Farm Loans 12 1.5 -40 -80 16 C&D Loans Nonfarm Nonresidential RE 1–4 Family RE 14 35.3 0 Share of Loan Portfolio Noncurrent Percent 1–4 Family Construction & Agricultural Commercial RE Commercial Residential Development Production & Construction & Industrial RE Loan Balances 16 FDIC QUARTERLY Unused Commitments 2 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: FDIC. QUARTERLY BANKING PROFILE Loan and Lease Balances Increased Modestly From the Previous Quarter and a Year Ago Community bank loan and lease balances increased $24.3 billion (1.4 percent) between third and fourth quarter 2021. Growth in nonfarm nonresidential commercial real estate (CRE) loan balances of $16.3 billion (3.1 percent) and construction and development loan balances of $5.9 billion (4.7 percent) more than offset a $12.2 billion (4.7 percent) decline in commercial and industrial (C&I) loan balances. An increase in unused CRE loan commitments of $7.1 billion (5.8 percent) drove the quarter-over-quarter growth of $11.0 billion (2.8 percent) in unused commitments. All major loan categories except C&I grew in 2021, and 57.8 percent of community banks recorded annual loan growth. Total loans and leases balances increased $34.2 billion (2.0 percent) from one year ago driven by growth in nonfarm nonresidential CRE loan balances of $50.6 billion (10.4 percent). C&I loan balances declined $62.3 billion (20.1 percent) from fourth quarter 2020. The annual decline in C&I loan balances was due to Paycheck Protection Program (PPP) loan repayment and forgiveness. PPP loan balances declined $83.8 billion (75.0 percent) in the year ending fourth quarter 2021. Small Loans to Businesses Declined 12.8 Percent Year Over Year Community bank small loans to businesses fell $43.4 billion (12.8 percent) in 2021 primarily due to a $45.6 billion decline in small C&I loan balances. Small farmland and agricultural production loan balances also fell $778.0 million, while small nonfarm nonresidential CRE loans rose $3.0 billion (2.3 percent) over the year. Community banks hold 40.0 percent of total small loans to businesses, the same share as a year ago. Deposit Growth Accelerated From the Previous Quarter Community banks reported deposit growth of 2.8 percent ($63.4 billion) during the fourth quarter, up from 2.6 percent ($58.9 billion) in third quarter 2021 and 2.1 percent ($46.0 billion) in second quarter 2021. More than 75 percent of community banks (76.6 percent) reported an increase in deposit balances. Growth in deposits of more than $250,000 accounted for most of the deposit growth (up $55.8 billion, or 5.1 percent). Growth in domestic deposit balances was largely in interest-bearing deposits (up 41.1 billion, or 2.5 percent), while noninterest-bearing deposits increased $22.3 billion (3.5 percent). Noncurrent Loan Balances Continued to Decline Quarter Over Quarter Nearly 60 percent of community banks (59.1 percent) reported quarter-over-quarter reductions in the balance of loans and leases 90 days or more past due or in nonaccrual status (noncurrent loan balances). Noncurrent loan balances declined $1.1 billion (10.0 percent) to $11.1 billion from third quarter 2021. The quarterly decline in noncurrent loan balances was mainly attributable to a $489.5 million (14.5 percent) decrease in nonfarm nonresidential CRE noncurrent balances, a $214.9 million (7.4 percent) decrease in 1–4 family residential noncurrent balances, and a $124.2 million (6.6 percent) decrease in C&I noncurrent balances. The noncurrent rate for total loans and leases dropped 7 basis points from third quarter to 0.58 percent, the lowest noncurrent rate on record for community banks. Net Charge-Offs Declined From One Year Ago Net charge-offs declined in all major loan categories from one year ago and in aggregate declined $307.4 million (45.7 percent) to $365.4 million. The largest contributors to the year-over-year decrease in net charge-offs were the C&I portfolio, which declined $167.5 million (57.8 percent), and the nonfarm nonresidential CRE portfolio, which declined $38.6 million (33.2 percent). The net charge-off rate for community banks declined 6 basis points from the year-ago quarter to 0.09 percent. Some Capital Ratios Declined as Growth in Assets Outpaced Capital Formation Equity capital grew $2.5 billion (0.9 percent) to $292.6 billion in fourth quarter. The leverage capital ratio declined 10 basis points to 10.16 percent in fourth quarter 2021, as growth in average assets outpaced tier 1 capital formation. The average tier 1 risk-based capital ratio among community banks that did not file the community bank leverage ratio (CBLR) was 14.36 percent, down 26 basis points from the prior quarter, as growth in risk-weighted assets outpaced tier 1 capital formation. The average CBLR for the 1,699 banks that elected to use the CBLR framework was 11.2 percent, nearly unchanged from third quarter 2021. One New Community Bank Opened and No Community Banks Failed in Fourth Quarter 2021 The number of community banks declined to 4,391, down 59 from the previous quarter. Six banks transitioned from community to noncommunity banks, four banks transitioned from noncommunity to community banks, three community banks ceased operations, and 54 community banks merged during the quarter. Author: Angela Hinton Senior Financial Analyst Division of Insurance and Research FDIC QUARTERLY 17 2022 • Volume 16 • Number 1 TABLE I-B. Selected Indicators, FDIC-Insured Community Banks Return on assets (%) Return on equity (%) Core capital (leverage) ratio (%) Noncurrent assets plus other real estate owned to assets (%) Net charge-offs to loans (%) Asset growth rate (%) Net interest margin (%) Net operating income growth (%) Number of institutions reporting Percentage of unprofitable institutions (%) 2021 2020 2019 2018 2017 2016 2015 1.25 11.61 10.16 0.40 0.06 8.69 3.27 28.51 4,391 3.17 1.09 9.72 10.32 0.60 0.12 14.06 3.39 -0.03 4,557 4.52 1.19 10.24 11.15 0.65 0.13 -1.26 3.66 -4.14 4,748 3.96 1.19 10.57 11.09 0.70 0.13 2.20 3.72 27.90 4,979 3.64 0.96 8.65 10.80 0.78 0.16 1.12 3.62 0.19 5,227 5.72 0.99 8.81 10.69 0.94 0.16 0.00 3.57 0.00 5,461 4.67 0.99 8.85 10.67 1.07 0.15 2.71 3.57 9.56 5,734 5.04 * Excludes insured branches of foreign banks (IBAs). TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks 4th Quarter 2021 3rd Quarter 2021 4th Quarter 2020 %Change 20Q4-21Q4 4,391 386,215 4,450 390,766 4,557 390,966 -3.6 -1.2 CONDITION DATA Total assets Loans secured by real estate 1-4 Family residential mortgages Nonfarm nonresidential Construction and development Home equity lines Commercial & industrial loans Loans to individuals Credit cards Farm loans Other loans & leases Less: Unearned income Total loans & leases Less: Reserve for losses* Net loans and leases Securities** Other real estate owned Goodwill and other intangibles All other assets $2,757,175 1,293,022 385,625 534,746 129,988 40,329 247,948 65,865 2,159 47,200 50,697 832 1,703,900 22,051 1,681,848 604,552 1,164 20,879 448,731 $2,737,509 1,275,740 384,817 526,769 126,064 40,759 263,727 65,285 2,024 46,766 52,532 1,001 1,703,048 22,516 1,680,532 570,038 1,365 20,345 465,228 $2,536,765 1,220,521 386,936 492,427 115,173 42,143 315,032 64,747 2,101 47,488 49,087 1,047 1,695,828 22,451 1,673,377 443,288 1,857 17,854 400,390 8.7 5.9 -0.3 8.6 12.9 -4.3 -21.3 1.7 2.8 -0.6 3.3 -20.5 0.5 -1.8 0.5 36.4 -37.3 16.9 12.1 Total liabilities and capital Deposits Domestic office deposits Foreign office deposits Brokered deposits Estimated insured deposits Other borrowed funds Subordinated debt All other liabilities Total equity capital (includes minority interests) Bank equity capital 2,757,175 2,362,931 2,360,525 2,405 49,899 1,567,652 78,938 272 22,301 292,733 292,604 2,737,509 2,334,106 2,331,687 2,419 51,553 1,571,054 84,259 283 24,636 294,226 294,099 2,536,765 2,117,890 2,115,490 2,401 61,284 1,472,429 117,634 352 24,558 276,332 276,211 8.7 11.6 11.6 0.2 -18.6 6.5 -32.9 -22.6 -9.2 5.9 5.9 Loans and leases 30-89 days past due Noncurrent loans and leases Restructured loans and leases Mortgage-backed securities Earning assets FHLB Advances Unused loan commitments Trust assets Assets securitized and sold Notional amount of derivatives 5,609 9,853 4,693 268,859 2,592,251 53,705 397,960 402,818 24,368 126,487 5,312 11,056 4,987 260,168 2,568,774 55,360 392,532 320,703 24,361 142,538 7,532 13,198 5,521 201,317 2,372,272 72,764 347,378 348,944 23,259 181,390 -25.5 -25.3 -15.0 33.6 9.3 -26.2 14.6 15.4 4.8 -30.3 (dollar figures in millions) Number of institutions reporting Total employees (full-time equivalent) INCOME DATA Total interest income Total interest expense Net interest income Provision for credit 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 2021 Full Year 2020 %Change 4th Quarter 2021 4th Quarter 2020 %Change 20Q4-21 Q4 $88,059 7,635 80,423 1,080 24,641 64,921 854 7,221 30 32,725 32,690 1,081 13,830 18,860 31,982 $88,371 13,389 74,981 7,026 24,181 62,336 1,086 5,068 1 25,820 25,767 2,014 12,021 13,745 24,887 -0.4 -43.0 7.3 -84.6 1.9 4.1 -21.3 42.5 N/M 26.7 26.9 -46.3 15.1 37.2 28.5 $22,225 1,684 20,541 321 6,119 17,056 190 1,737 28 7,765 7,768 365 4,502 3,266 7,580 $22,209 2,665 19,544 1,227 6,962 16,798 408 1,490 0 7,399 7,382 637 3,969 3,412 7,049 0.1 -36.8 5.1 -73.9 -12.1 1.5 -53.4 16.5 N/M 4.9 5.2 -42.7 13.4 -4.3 7.5 * For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk. ** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses. *** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, this item represents the provision for loan and lease losses. **** See Notes to Users for explanation. 18 FDIC QUARTERLY N/M - Not Meaningful QUARTERLY BANKING PROFILE TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks Prior Periods Adjusted for Mergers 4th Quarter 2021 3rd Quarter 2021 4th Quarter 2020 %Change 20Q4-21Q4 4,391 386,215 4,391 386,319 4,383 382,963 0.2 0.8 CONDITION DATA Total assets Loans secured by real estate 1-4 Family residential mortgages Nonfarm nonresidential Construction and development Home equity lines Commercial & industrial loans Loans to individuals Credit cards Farm loans Other loans & leases Less: Unearned income Total loans & leases Less: Reserve for losses* Net loans and leases Securities** Other real estate owned Goodwill and other intangibles All other assets $2,757,175 1,293,022 385,625 534,746 129,988 40,329 247,948 65,865 2,159 47,200 50,697 832 1,703,900 22,051 1,681,848 604,552 1,164 20,879 448,731 $2,696,906 1,259,030 381,239 518,472 124,129 39,933 260,143 64,696 2,016 46,617 50,082 990 1,679,577 22,195 1,657,383 560,529 1,358 20,072 457,564 $2,494,277 1,202,456 380,449 484,167 112,400 40,918 310,265 60,853 1,952 46,855 50,331 1,021 1,669,738 22,222 1,647,516 434,814 1,825 19,426 390,696 10.5 7.5 1.4 10.4 15.6 -1.4 -20.1 8.2 10.6 0.7 0.7 -18.5 2.0 -0.8 2.1 39.0 -36.2 7.5 14.9 Total liabilities and capital Deposits Domestic office deposits Foreign office deposits Brokered deposits Estimated insured deposits Other borrowed funds Subordinated debt All other liabilities Total equity capital (includes minority interests) Bank equity capital 2,757,175 2,362,931 2,360,525 2,405 49,899 1,567,652 78,938 272 22,301 292,733 292,604 2,696,906 2,299,510 2,297,091 2,419 50,343 1,549,449 82,684 277 24,197 290,238 290,111 2,494,277 2,081,428 2,079,027 2,401 59,449 1,449,981 114,466 485 24,023 273,876 273,756 10.5 13.5 13.5 0.2 -16.1 8.1 -31.0 -43.9 -7.2 6.9 6.9 Loans and leases 30-89 days past due Noncurrent loans and leases Restructured loans and leases Mortgage-backed securities Earning assets FHLB Advances Unused loan commitments Trust assets Assets securitized and sold Notional amount of derivatives 5,609 9,853 4,693 268,859 2,592,251 53,705 397,960 402,818 24,368 126,487 5,278 10,952 4,940 254,210 2,530,537 54,256 386,991 320,703 24,361 141,053 7,477 13,240 5,453 195,634 2,330,314 71,476 336,082 344,896 23,130 180,974 -25.0 -25.6 -13.9 37.4 11.2 -24.9 18.4 16.8 5.4 -30.1 (dollar figures in millions) Number of institutions reporting Total employees (full-time equivalent) INCOME DATA Total interest income Total interest expense Net interest income Provision for credit 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 2021 Full Year 2020 %Change 4th Quarter 2021 4th Quarter 2020 %Change 20Q4-21 Q4 $88,059 7,635 80,423 1,080 24,641 64,921 854 7,221 30 32,725 32,690 1,081 13,830 18,860 31,982 $86,603 13,029 73,574 7,049 23,667 60,986 1,079 4,952 1 25,334 25,280 2,090 11,996 13,284 24,407 1.7 -41.4 9.3 -84.7 4.1 6.5 -20.9 45.8 N/M 29.2 29.3 -48.3 15.3 42.0 31.0 $22,225 1,684 20,541 321 6,119 17,056 190 1,737 28 7,765 7,768 365 4,502 3,266 7,580 $21,841 2,595 19,246 1,236 6,826 16,500 402 1,465 0 7,274 7,256 673 3,938 3,318 6,929 1.8 -35.1 6.7 -74.0 -10.4 3.4 -52.7 18.5 N/M 6.8 7.1 -45.7 14.3 -1.6 9.4 * For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk. ** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses. *** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, this item represents the provision for loan and lease losses. **** See Notes to Users for explanation. N/M - Not Meaningful FDIC QUARTERLY 19 2022 • Volume 16 • Number 1 TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks Fourth Quarter 2021 (dollar figures in millions) Geographic Regions* All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco 4,391 386,215 487 79,127 498 41,413 963 79,023 1,190 70,615 986 82,819 267 33,218 CONDITION DATA Total assets Loans secured by real estate 1-4 Family residential mortgages Nonfarm nonresidential Construction and development Home equity lines Commercial & industrial loans Loans to individuals Credit cards Farm loans Other loans & leases Less: Unearned income Total loans & leases Less: Reserve for losses** Net loans and leases Securities*** Other real estate owned Goodwill and other intangibles All other assets $2,757,175 1,293,022 385,625 534,746 129,988 40,329 247,948 65,865 2,159 47,200 50,697 832 1,703,900 22,051 1,681,848 604,552 1,164 20,879 448,731 $696,394 377,341 134,494 145,032 26,722 11,491 61,419 16,183 377 541 15,558 145 470,896 5,350 465,547 131,338 186 7,004 92,319 $291,915 134,466 37,281 64,484 16,196 5,351 24,868 6,559 107 1,229 2,945 150 169,917 2,156 167,761 64,161 181 1,183 58,629 $494,678 221,311 63,839 88,691 19,230 8,980 46,364 11,959 187 8,146 11,679 77 299,381 3,914 295,467 116,540 239 3,883 78,549 $469,347 204,755 56,109 73,028 21,196 4,679 44,029 11,988 849 26,925 6,858 101 294,452 4,193 290,260 106,481 239 2,964 69,403 $528,197 230,350 66,732 100,067 35,439 4,567 47,619 12,859 234 7,844 8,771 200 307,243 4,124 303,120 123,019 266 3,507 98,285 $276,643 124,800 27,171 63,444 11,205 5,261 23,649 6,317 404 2,516 4,886 159 162,009 2,315 159,694 63,015 52 2,337 51,545 Total liabilities and capital Deposits Domestic office deposits Foreign office deposits Brokered deposits Estimated insured deposits Other borrowed funds Subordinated debt All other liabilities Total equity capital (includes minority interests) Bank equity capital 2,757,175 2,362,931 2,360,525 2,405 49,899 1,567,652 78,938 272 22,301 292,733 292,604 696,394 588,281 587,673 608 19,008 391,168 21,724 190 8,234 77,965 77,939 291,915 254,233 254,227 6 3,037 160,475 6,156 6 1,960 29,561 29,559 494,678 420,523 420,523 0 8,750 298,536 18,387 19 3,339 52,410 52,319 469,347 402,667 402,667 0 8,634 288,494 14,838 6 2,927 48,909 48,908 528,197 458,670 458,670 0 7,249 293,859 11,248 40 3,110 55,129 55,121 276,643 238,557 236,766 1,792 3,220 135,120 6,586 10 2,732 28,758 28,756 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 5,609 9,853 4,693 268,859 2,592,251 53,705 397,960 402,818 24,368 126,487 1,336 3,210 1,642 69,740 654,529 15,925 96,498 85,821 10,295 55,312 603 791 371 29,581 274,528 4,574 36,207 16,074 111 10,304 934 1,728 994 44,985 464,457 12,663 72,209 85,447 4,478 18,620 840 1,470 745 38,946 442,102 9,940 77,161 137,029 4,337 22,389 1,511 2,005 583 49,504 495,971 7,374 72,138 53,105 4,712 11,621 384 649 359 36,104 260,664 3,229 43,747 25,343 434 8,242 $22,225 1,684 20,541 321 6,119 17,056 190 1,737 28 7,765 7,768 365 4,502 3,266 7,580 $5,611 451 5,160 0 1,468 4,076 167 637 0 2,082 2,071 104 816 1,255 1,946 $2,283 158 2,125 26 615 1,819 -2 151 0 742 742 20 290 453 743 $3,856 303 3,553 62 1,514 3,189 4 325 3 1,498 1,496 68 1,075 421 1,491 $3,841 342 3,499 84 1,018 2,972 13 216 3 1,262 1,262 55 901 361 1,247 $4,453 320 4,133 108 1,016 3,333 7 206 22 1,531 1,545 85 1,065 480 1,503 $2,181 111 2,070 40 488 1,667 1 202 0 650 650 33 355 296 649 Number of institutions reporting Total employees (full-time equivalent) INCOME DATA Total interest income Total interest expense Net interest income Provision for credit losses**** Total noninterest income Total noninterest expense Securities gains (losses) Applicable income taxes Extraordinary gains, net***** Total net income (includes minority interests) Bank net income Net charge-offs Cash dividends Retained earnings Net operating income * See Table V-A for explanation. ** For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk. *** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses. **** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, this item represents the provision for loan and lease losses. ***** See Notes to Users for explanation. 20 FDIC QUARTERLY QUARTERLY BANKING PROFILE Table IV-B. Fourth Quarter 2021, FDIC-Insured Community Banks All Community Banks Performance ratios (annualized, %) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Loan and lease loss provision to assets Net operating income to assets Pretax return on assets Return on assets Return on equity Net charge-offs to loans and leases Loan and lease loss provision to net charge-offs Efficiency ratio Net interest income to operating revenue % of unprofitable institutions % of institutions with earnings gains 4th Quarter 2021 3.48 0.26 3.22 0.90 2.51 0.05 1.11 1.40 1.14 10.69 0.09 87.79 63.60 77.05 8.36 51.29 3rd Quarter 2021 3.60 0.29 3.31 0.92 2.45 0.04 1.26 1.56 1.27 11.87 0.07 100.16 60.40 77.19 4.36 65.91 Fourth Quarter 2021, Geographic Regions* New York 3.46 0.28 3.18 0.85 2.36 0.00 1.13 1.57 1.20 10.73 0.09 0.42 61.14 77.86 4.93 57.70 Atlanta 3.40 0.23 3.16 0.86 2.54 0.04 1.04 1.25 1.04 10.13 0.05 130.19 65.87 77.54 9.24 52.61 Chicago 3.38 0.27 3.11 1.24 2.62 0.05 1.23 1.50 1.23 11.54 0.09 91.51 62.56 70.13 7.48 46.94 Kansas City 3.52 0.31 3.21 0.88 2.56 0.07 1.08 1.28 1.09 10.33 0.08 152.59 65.32 77.46 10.59 44.71 Dallas 3.66 0.26 3.40 0.78 2.57 0.08 1.16 1.35 1.19 11.25 0.11 127.13 64.41 80.27 8.11 59.03 San Francisco 3.39 0.17 3.21 0.71 2.44 0.06 0.95 1.25 0.95 9.13 0.08 120.97 64.90 80.92 7.12 53.56 Dallas 3.79 0.31 3.48 0.92 2.58 0.08 1.33 1.54 1.35 12.63 0.08 169.69 61.43 77.88 2.84 77.48 San Francisco 3.48 0.20 3.28 0.78 2.40 0.01 1.12 1.46 1.12 10.66 0.04 50.21 61.78 79.72 3.37 77.53 Table V-B. Full Year 2021, FDIC-Insured Community Banks All Community Banks Performance ratios (%) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Loan and lease loss provision to assets Net operating income to assets Pretax return on assets Return on assets Return on equity Net charge-offs to loans and leases Loan and lease loss provision to net charge-offs Efficiency ratio Net interest income to operating revenue % of unprofitable institutions % of institutions with earnings gains Full Year 2021 3.58 0.31 3.27 0.94 2.48 0.04 1.22 1.52 1.25 11.61 0.06 99.94 61.42 76.55 3.17 74.83 Full Year 2020 4.00 0.61 3.39 1.02 2.63 0.30 1.05 1.30 1.09 9.72 0.12 348.90 62.34 75.61 4.52 53.90 Full Year 2021, Geographic Regions* New York 3.49 0.33 3.15 0.77 2.31 0.00 1.08 1.50 1.14 10.25 0.09 0.05 61.49 79.32 4.52 82.14 Atlanta 3.53 0.28 3.25 0.86 2.53 0.04 1.09 1.35 1.11 10.69 0.05 152.96 64.26 78.01 5.82 77.71 Chicago 3.48 0.31 3.17 1.31 2.59 0.05 1.35 1.66 1.36 12.70 0.04 164.75 60.21 69.45 3.32 68.85 Kansas City 3.70 0.36 3.34 0.97 2.51 0.07 1.31 1.54 1.33 12.55 0.06 186.76 60.80 76.45 1.60 72.69 * See Table V-A for explanation. FDIC QUARTERLY 21 2022 • Volume 16 • Number 1 Table VI-B. Loan Performance, FDIC-Insured Community Banks Geographic Regions* December 31, 2021 All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco Percent of Loans 30-89 Days Past Due All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.28 0.22 0.17 0.13 0.26 0.51 0.34 1.31 1.85 1.30 0.23 0.33 0.25 0.09 0.16 0.18 0.29 0.40 0.26 1.43 1.84 1.42 0.08 0.28 0.29 0.24 0.12 0.16 0.27 0.64 0.48 1.26 1.23 1.26 0.16 0.35 0.33 0.30 0.17 0.08 0.24 0.68 0.24 0.60 0.70 0.60 0.14 0.31 0.25 0.23 0.13 0.09 0.25 0.43 0.34 0.88 2.66 0.74 0.24 0.29 0.40 0.27 0.28 0.12 0.37 0.67 0.44 2.44 1.18 2.46 0.44 0.49 0.17 0.14 0.12 0.03 0.16 0.31 0.40 0.97 1.25 0.96 0.27 0.24 Percent of Loans Noncurrent All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.57 0.38 0.54 0.27 0.49 0.70 0.71 0.48 0.77 0.47 0.44 0.58 0.69 0.65 0.68 0.38 0.65 0.82 0.88 0.42 1.03 0.40 0.08 0.68 0.45 0.23 0.37 0.17 0.35 0.68 0.59 0.34 0.31 0.34 0.39 0.46 0.61 0.45 0.65 0.20 0.35 0.72 0.62 0.22 0.19 0.22 0.29 0.58 0.48 0.32 0.50 0.10 0.38 0.41 0.57 0.31 1.05 0.25 0.59 0.50 0.61 0.25 0.57 0.18 0.30 0.80 0.79 1.11 0.38 1.12 0.49 0.65 0.34 0.41 0.26 0.19 0.76 0.38 0.65 0.29 0.55 0.28 0.77 0.40 Percent of Loans Charged-Off (net, YTD) All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.02 0.01 0.04 0.02 -0.01 0.01 0.13 0.51 3.73 0.41 0.10 0.06 0.05 0.06 0.08 0.02 -0.01 0.04 0.13 0.68 3.38 0.61 0.04 0.09 0.00 -0.05 0.02 -0.01 -0.04 -0.01 0.12 0.45 0.80 0.45 0.20 0.05 0.01 0.00 0.04 0.00 -0.01 -0.01 0.12 0.17 1.08 0.16 0.09 0.04 0.02 0.00 0.04 0.06 -0.01 0.00 0.09 0.59 7.04 0.17 0.06 0.06 0.02 0.01 0.03 0.03 0.04 0.01 0.20 0.53 1.26 0.52 0.12 0.08 -0.01 -0.05 0.00 0.00 0.00 -0.01 0.06 0.62 1.35 0.57 0.29 0.04 Loans Outstanding (in billions) All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases $1,293.0 130.0 534.7 123.4 40.3 385.6 247.9 65.9 2.2 63.7 97.9 1,704.7 $377.3 26.7 145.0 57.3 11.5 134.5 61.4 16.2 0.4 15.8 16.1 471.0 $134.5 16.2 64.5 6.7 5.4 37.3 24.9 6.6 0.1 6.5 4.2 170.1 $221.3 19.2 88.7 22.6 9.0 63.8 46.4 12.0 0.2 11.8 19.8 299.5 $204.8 21.2 73.0 14.0 4.7 56.1 44.0 12.0 0.8 11.1 33.8 294.6 $230.4 35.4 100.1 9.2 4.6 66.7 47.6 12.9 0.2 12.6 16.6 307.4 $124.8 11.2 63.4 13.6 5.3 27.2 23.6 6.3 0.4 5.9 7.4 162.2 Memo: Unfunded Commitments (in millions) Total Unfunded Commitments Construction and development: 1-4 family residential Construction and development: CRE and other Commercial and industrial 397,960 39,138 89,307 123,608 96,498 6,925 24,820 30,683 36,207 5,702 8,942 10,015 72,209 4,383 14,569 26,074 77,161 6,129 13,572 22,335 72,138 12,640 19,527 20,592 43,747 3,359 7,876 13,909 * See Table V-A for explanation. Note: Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. 22 FDIC QUARTERLY QUARTERLY BANKING PROFILE INSURANCE FUND INDICATORS Deposit Insurance Fund Increases by $1.2 Billion Insured Deposits Grow by 1.6 Percent DIF Reserve Ratio Is Unchanged at 1.27 Percent During the fourth quarter, the Deposit Insurance Fund (DIF) balance increased by $1.2 billion to $123.1 billion. Assessment income of $2 billion drove the fund balance increase. Interest earned on investments of $197 million and other miscellaneous income of $47 million also added to the fund balance. Operating expenses of $475 million, provisions for insurance losses of $8 million, and unrealized losses on available-for-sale securities of $536 million partially offset the increase in the fund balance. No insured institutions failed in the fourth quarter. The deposit insurance assessment base—average consolidated total assets minus average tangible equity—rose by 2.8 percent in the fourth quarter and 9.5 percent over 12 months.1,2 Total estimated insured deposits increased by 1.6 percent in the fourth quarter of 2021 and by 6.6 percent year over year. The DIF’s reserve ratio (the fund balance as a percent of insured deposits) was 1.27 percent on December 31, 2021, unchanged from the previous quarter and 2 basis points lower than the previous year. The 12-month decline in the reserve ratio was entirely the result of continued elevated insured deposit growth. The Federal Deposit Insurance Act (the FDI Act) requires a minimum reserve ratio for the DIF of 1.35 percent. If the reserve ratio falls below 1.35 percent, the FDIC has eight years to return the reserve ratio to 1.35 percent. During the first half of 2020, due solely to extraordinary insured deposit growth, the reserve ratio dropped to 1.30 percent as of June 30, 2020. Because the reserve ratio fell below its statutory required minimum, the FDIC Board adopted a Fund Restoration Plan in September 2020 and has been providing semiannual updates to its analysis and projections.3 Author: Charles James Economic Analyst Division of Insurance and Research 1 There are additional adjustments to the assessment base for banker’s banks and custodial banks. for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition to insured commercial banks and savings institutions. 3 See https://www.fdic.gov/news/board-matters/2020/2020-09-15-notice-dis-a-fr.pdf. 2 Figures FDIC QUARTERLY 23 2022 • Volume 16 • Number 1 Table I-C. Insurance Fund Balances and Selected Indicators Deposit Insurance Fund* 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 3rd Quarter 2019 2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018 $121,935 $120,547 $119,362 $117,897 $116,434 $114,651 $113,206 $110,347 $108,940 $107,446 $104,870 $102,609 $100,204 1,967 1,662 1,589 1,862 1,884 2,047 1,790 1,372 1,272 1,111 1,187 1,369 1,351 197 221 251 284 330 392 454 507 531 544 535 507 481 0 475 0 448 0 466 0 454 0 470 0 451 0 465 0 460 0 460 0 443 0 459 0 434 0 453 8 -53 -42 -57 -48 -74 -47 12 -88 -192 -610 -396 -236 61 65 2 1 9 5 2 2 21 4 9 2 2 -536 1,206 -165 1,388 -233 1,185 -285 1,465 -338 1,463 -284 1,783 -383 1,445 1,450 2,859 -45 1,407 86 1,494 694 2,576 421 2,261 788 2,405 123,141 121,935 120,547 119,362 117,897 116,434 114,651 113,206 110,347 108,940 107,446 104,870 102,609 4.45 4.72 5.14 5.44 6.84 6.88 6.71 7.95 7.54 8.72 10.10 10.31 10.63 1.27 1.27 1.27 1.25 1.29 1.30 1.30 1.38 1.41 1.41 1.40 1.36 1.36 9,729,408 9,580,694 9,490,290 9,513,987 9,123,046 8,924,313 8,839,109 8,181,190 7,824,835 7,744,445 7,695,179 7,699,035 7,522,972 6.65 7.35 7.37 16.29 16.59 15.24 14.87 6.26 4.01 4.95 4.62 4.95 5.11 Domestic Deposits Percent change from four quarters earlier 18,236,831 17,676,691 Assessment Base*** Percent change from four quarters earlier 20,572,345 (dollar figures in millions) Beginning Fund Balance Changes in Fund Balance: Assessments earned Interest earned on investment securities Realized gain on sale of investments Operating expenses Provision for insurance losses All other income, net of expenses Unrealized gain/(loss) on available-for-sale securities** Total fund balance change Ending Fund Balance Percent change from four quarters earlier Reserve Ratio (%) Estimated Insured Deposits Percent change from four quarters earlier 11.62 Number of Institutions Reporting 17,203,234 16,980,316 16,339,026 12.47 10.53 20,016,875 19,671,622 18.31 ` 15,716,702 15,563,637 14,351,881 13,262,843 13,020,253 23.19 19,197,834 18,792,904 20.71 21.70 12.78 18,453,702 18,153,259 16,484,340 12/18 3/19 1.40 6/19 4.14 3.41 4.37 8.47 8.36 16.46 16.31 16.02 15.74 5.93 4.56 4.44 3.77 3.27 3.01 4,848 4,923 4,960 4,987 5,011 5,042 5,075 5,125 5,186 5,267 5,312 5,371 5,415 Deposit Insurance Fund Balance and Insured Deposits ($ Millions) Percent of Insured Deposits 1.36 5.27 16,157,322 15,905,145 15,684,001 15,561,782 15,452,139 9.47 DIF Reserve Ratios 1.36 4.77 12,788,773 12,725,363 12,659,406 1.41 1.41 9/19 12/19 1.38 3/20 1.30 6/20 1.30 1.29 9/20 12/20 1.25 3/21 1.27 6/21 1.27 DIF Balance 1.27 12/18 3/19 6/19 9/19 12/19 3/20 6/20 9/20 12/20 3/21 6/21 9/21 12/21 9/21 12/21 $102,609 104,870 107,446 108,940 110,347 113,206 114,651 116,434 117,897 119,362 120,547 121,935 123,141 DIF-Insured Deposits $7,522,972 7,699,035 7,695,179 7,744,445 7,824,835 8,181,190 8,839,109 8,924,313 9,123,046 9,513,987 9,490,290 9,580,694 9,729,408 Table II-C. Problem Institutions and Failed Institutions (dollar figures in millions) 2021 2020 2019 2018 2017 2016 2015 Problem Institutions Number of institutions Total assets**** 44 $170,172 56 $55,830 51 $46,190 60 $48,481 95 $13,939 123 $27,624 183 $46,780 Failed Institutions Number of institutions Total assets***** 0 $0 4 $455 4 $209 0 $0 8 $5,082 5 $277 8 $6,706 * Quarterly financial statement results are unaudited. ** Includes unrealized postretirement benefit gain (loss). *** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks. **** Assets shown are what were on record as of the last day of the quarter. ***** Total assets are based on final Call Reports submitted by failed institutions. 24 FDIC QUARTERLY QUARTERLY BANKING PROFILE Table III-C. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) December 31, 2021 Commercial Banks and Savings Institutions FDIC-Insured Commercial Banks FDIC-Supervised OCC-Supervised Federal Reserve-Supervised FDIC-Insured Savings Institutions OCC-Supervised FDIC-Supervised Federal Reserve-Supervised Total Commercial Banks and Savings Institutions Other FDIC-Insured Institutions U.S. Branches of Foreign Banks Total FDIC-Insured Institutions Number of Institutions Total Assets Domestic Deposits* Est. Insured Deposits 4,231 2,816 747 668 $22,195,229 3,932,790 14,740,620 3,521,819 $16,898,323 3,302,489 10,946,478 2,649,357 $8,725,493 1,902,112 5,636,046 1,187,335 608 266 306 36 1,524,087 626,717 403,659 493,711 1,290,891 509,526 322,665 458,700 966,039 409,771 239,574 316,695 4,839 23,719,316 18,189,214 9,691,532 9 119,748 47,617 37,875 4,848 23,839,064 18,236,831 9,729,408 * Excludes $1.5 trillion in foreign office deposits, which are not FDIC insured. Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range Quarter Ending September 30, 2021 (dollar figures in billions) Annual Rate in Basis Points* Number of Institutions Percent of Total Institutions Amount of Assessment Base Percent of Total Assessment Base 1.50 - 3.00 2,934 59.6 $8,370.2 41.82 3.01 - 6.00 1,441 29.3 10,991.0 54.91 6.01 - 10.00 459 9.3 555.4 2.77 10.01 - 15.00 35 0.7 85.4 0.43 15.01 - 20.00 53 1.1 14.7 0.07 20.01 - 25.00 1 0.0 0.2 0.00 >25.00 0 0.0 0.0 0.00 * Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, as required by the Dodd-Frank Act. FDIC QUARTERLY 25 2022 • Volume 16 • Number 1 Notes to Users This publication contains financial data and other information for depository institutions insured by the Federal Deposit Insurance Corporation (FDIC). These notes are an integral part of this publication and provide information regarding the comparability of source data and reporting differences over time. Tables I-A through VIII-A. The information presented in Tables I-A through VIII-A of the FDIC Quarterly Banking Profile is aggregated for all FDIC-insured Call Report filers, both commercial banks and savings institutions. Some tables are arrayed by groups of FDIC-insured institutions based on predominant types of asset concentration, while other tables aggregate institutions by asset size and geographic region. Quarterly and full-year data are provided for selected indicators, including aggregate condition and income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off information for loans outstanding and other assets. Tables I-B through VI-B. The information presented in Tables I-B through VI-B is aggregated for all FDIC-insured commercial banks and savings institutions meeting the criteria for community banks that were developed for the FDIC’s Community Banking Study, published in December, 2012: https://www.fdic.gov/resources/communitybanking/cbi-study.html. The determination of which insured institutions are considered community banks is based on five steps. The first step in defining a community bank is to aggregate all charter-level data reported under each holding company into a single banking organization. This aggregation applies both to balance-sheet measures and the number and location of banking offices. Under the FDIC definition, if the banking organization is designated as a community bank, every charter reporting under that organization is also considered a community bank when working with data at the charter level. The second step is to exclude any banking organization where more than 50 percent of total assets are held in certain specialty banking charters, including: credit card specialists, consumer nonbank banks, industrial loan companies, trust companies, bankers’ banks, and banks holding 10 percent or more of total assets in foreign offices. Once the specialty organizations are removed, the third step involves including organizations that engage in basic banking activities as measured by the total loans-to-assets ratio (greater than 33 percent) and the ratio of core deposits to assets (greater than 50 percent). Core deposits are defined as non-brokered deposits in domestic offices. Analysis of the underlying data shows that these thresholds establish meaningful levels of basic lending and deposit gathering and still allow for a degree of diversity in how individual banks construct their balance sheets. The fourth step includes organizations that operate within a limited geographic scope. This limitation of scope is used as a proxy measure for a bank’s relationship approach to banking. Banks that operate within a limited market area have more ease in managing relationships at a personal level. Under this step, four criteria are applied to each banking organization. They include both a minimum and maximum number of total banking offices, a maximum level of deposits for any one office, and location-based criteria. The limits on the number of and deposits per office are adjusted upward quarterly. For banking offices, banks must have 26 FDIC QUARTERLY more than one office, and the maximum number of offices is 40 in 1985 and reached 87 in 2016. The maximum level of deposits for any one office is $1.25 billion in deposits in 1985 and reached $6.97 billion in deposits in 2016. The remaining geographic limitations are also based on maximums for the number of states (fixed at 3) and large metropolitan areas (fixed at 2) in which the organization maintains offices. Branch office data are based on the most recent data from the annual June 30 Summary of Deposits Survey that are available at the time of publication. Finally, the definition establishes an asset-size limit, also adjusted upward quarterly and below which the limits on banking activities and geographic scope are waived. The asset-size limit is $250 million in 1985 and reached $1.39 billion in 2016. This final step acknowledges the fact that most of those small banks that are not excluded as specialty banks meet the requirements for banking activities and geographic limits in any event. Summary of FDIC Research Definition of Community Banking Organizations Community banks are designated at the level of the banking organization. (All charters under designated holding companies are considered community banking charters.) Exclude: Any organization with: — No loans or no core deposits — Foreign Assets ≥ 10% of total assets — More than 50% of assets in certain specialty banks, including: • credit card specialists • consumer nonbank banks1 • industrial loan companies • trust companies • bankers’ banks Include: All remaining banking organizations with: — Total assets < indexed size threshold 2 — Total assets ≥ indexed size threshold, where: • Loan to assets > 33% • Core deposits to assets > 50% • More than 1 office but no more than the indexed maximum number of offices.3 • Number of large MSAs with offices ≤ 2 • Number of states with offices ≤ 3 • No single office with deposits > indexed maximum branch deposit size.4 Tables I-C through IV-C. A separate set of tables (Tables I-C through IV-C) provides comparative quarterly data related to the Deposit Insurance Fund (DIF), problem institutions, failed institutions, estimated FDIC- 1 Consumer nonbank banks are financial institutions with limited charters that can make commercial loans or take deposits, but not both. 2 Asset size threshold indexed to equal $250 million in 1985 and $1.39 billion in 2016. 3 Maximum 4 Maximum number of offices indexed to equal 40 in 1985 and 87 in 2016. branch deposit size indexed to equal $1.25 billion in 1985 and $6.97 billion in 2016. QUARTERLY BANKING PROFILE 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 (TFR) submitted by all FDIC-insured depository institutions. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) This information is stored on and retrieved from the FDIC’s Research Information System (RIS) database. COMPUTATION METHODOLOGY Parent institutions are required to file consolidated reports, while their subsidiary financial institutions are still required to file separate reports. Data from subsidiary institution reports are included in the Quarterly Banking Profile tables, which can lead to double-counting. No adjustments are made for any doublecounting of subsidiary data. Additionally, c ertain adjustments are made to the OTS Thrift Financial Reports to provide closer conformance with the reporting and accounting requirements of the FFIEC Call Reports. (TFR f ilers began filing Call Reports effective with the quarter e nding March 31, 2012.) All condition and performance ratios represent weighted averages, which is the sum of the individual numerator values divided by the sum of individual denominator values. All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-of-period amount plus endof-period amount plus any interim periods, divided by the total number of periods). For “pooling-of-interest” mergers, the assets of the acquired institution(s) are included in average assets, since the year-to-date income includes the results of all merged institutions. No adjustments are made for “purchase accounting” mergers. Growth rates represent the percentage change over a 12-month period in totals for institutions in the base period to totals for institutions in the current period. For the community bank subgroup, growth rates will reflect changes over time in the number and identities of institutions designated as community banks, as well as changes in the assets and liabilities, and income and expenses of group members. Unless indicated otherwise, growth rates are not adjusted for mergers or other changes in the composition of the community bank subgroup. When community bank growth rates are adjusted for mergers, prior period balances used in the calculations represent totals for the current group of community bank reporters, plus prior period amounts for any institutions that were subsequently merged into current community banks. All data are collected and presented based on the location of each reporting institution’s main office. Reported data may include assets and liabilities located outside of the reporting institution’s home state. In addition, institutions may relocate across state lines or change their charters, resulting in an inter-regional or inter-industry migration; institutions can move their home offices between regions, savings institutions can convert to commercial banks, or commercial banks may convert to savings institutions. ACCOUNTING CHANGES Financial accounting pronouncements by the Financial Accounting Standards Board (FASB) can result in changes in an individual bank’s accounting policies and in the Call Reports they submit. Such accounting changes can affect the aggregate amounts presented in the QBP for the current period and the period-to-period comparability of such financial data. The current quarter’s Financial Institution Letter (FIL) and related Call Report supplemental instructions can provide additional explanation to the QBP reader beyond any material accounting changes discussed in the QBP analysis. https://www.fdic.gov/news/financial-institution-letters/2022/ fil22003.html https://www.fdic.gov/regulations/resources/call/call.html Further information on changes in financial statement presentation, income recognition and disclosure is a vailable from the FASB. http://www.fasb.org/jsp/FASB/Page/ LandingPage&cid=1175805317350. DEFINITIONS (in alphabetical order) All other assets – total cash, balances due from depository institutions, premises, fixed assets, direct investments in real estate, investment in unconsolidated subsidiaries, customers’ liability on acceptances outstanding, assets held in trading accounts, federal funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid deposit insurance assessments, and other assets. All other liabilities – bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities. Assessment base – effective April 1, 2011, the deposit insurance assessment base changed to “average consolidated total assets minus average tangible equity” with an additional adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank. Previously the assessment base was “assessable deposits” and consisted of deposits in banks’ domestic offices with certain adjustments. Assessment rate schedule – Initial base assessment rates for small institutions are based on a combination of financial ratios and CAMELS component ratings. Initial rates for large institutions— generally those with at least $10 billion in assets—are also based on CAMELS component ratings and certain financial measures combined into two scorecards—one for most large institutions and another for the remaining very large institutions that are structurally and operationally complex or that pose unique challenges and risks in case of failure (highly complex institutions). The FDIC may take additional information into account to make a limited adjustment to a large institution’s scorecard results, which are used to determine a large institution’s initial base assessment rate. While risk categories for small institutions (except new institutions) were eliminated effective July 1, 2016, initial rates for small institutions are subject to minimums and maximums based on an institution’s CAMELS composite rating. (Risk categories for large institutions were eliminated in 2011.) The current assessment rate schedule became effective July 1, 2016. Under the current schedule, initial base assessment rates range from 3 to 30 basis points. An institution’s total base assessment rate may differ from its initial rate due to three possible adjustments: (1) Unsecured Debt Adjustment: An institution’s rate may decrease FDIC QUARTERLY 27 2022 • Volume 16 • Number 1 by up to 5 basis points for unsecured debt. The unsecured debt adjustment cannot exceed the lesser of 5 basis points or 50 percent of an institution’s initial base assessment rate (IBAR). Thus, for example, an institution with an IBAR of 3 basis points would have a maximum unsecured debt adjustment of 1.5 basis points and could not have a total base assessment rate lower than 1.5 basis points. (2) Depository Institution Debt Adjustment: For institutions that hold long-term unsecured debt issued by another insured depository institution, a 50 basis point charge is applied to the amount of such debt held in excess of 3 percent of an institution’s Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for large institutions that are not well capitalized or do not have a composite CAMELS rating of 1 or 2 may increase (not to exceed 10 basis points) if their brokered deposits exceed 10 percent of domestic deposits. The assessment rate schedule effective July 1, 2016, is shown in the following table: Total Base Assessment Rates* Established Small Banks 1 or 2 3 4 or 5 Large and Highly Complex Institutions** Initial Base Assessment Rate 3 to 16 6 to 30 16 to 30 3 to 30 Unsecured Debt Adjustment -5 to 0 -5 to 0 -5 to 0 -5 to 0 Brokered Deposit Adjustment N/A N/A N/A 0 to 10 Total Base Assessment Rate 1.5 to 16 3 to 30 11 to 30 1.5 to 40 CAMELS Composite * All amounts for all categories are in basis points annually. Total base rates that are not the minimum or maximum rate will vary between these rates. Total base assessment rates do not include the depository institution debt adjustment. ** Effective July 1, 2016, large institutions are also subject to temporary assessment surcharges in order to raise the reserve ratio from 1.15 percent to 1.35 percent. The surcharges amount to 4.5 basis points of a large institution’s assessment base (after making certain adjustments). Each institution is assigned a risk-based rate for a quarterly assessment period near the end of the quarter following the assessment period. Payment is generally due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are effective for assessment purposes as of the examination transmittal date. Assets securitized and sold – total outstanding principal balance of assets securitized and sold with servicing retained or other 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-publiclytraded bank stock are classified in a bank’s balance sheet as “Other liabilities.” Common equity Tier 1 capital ratio – ratio of common equity Tier 1 capital to risk-weighted assets. Common equity Tier 1 capital includes common stock instruments and related surplus, retained earnings, accumulated other comprehensive income (AOCI), and limited amounts of common equity Tier 1 minority interest, minus applicable regulatory adjustments and deductions. Items that are 28 FDIC QUARTERLY fully deducted from common equity Tier 1 capital include goodwill, other intangible assets (excluding mortgage servicing assets) and certain deferred tax assets; items that are subject to limits in common equity Tier 1 capital include mortgage servicing assets, eligible deferred tax assets, and certain significant investments. Beginning March 2020, this ratio does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date. 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 e ligible intangibles (including servicing rights) included in core capital is limited in accordance with supervisory capital regulations. Cost of funding earning assets – total interest expense paid on deposits and other borrowed money as a percentage of average earning assets. Credit enhancements – techniques whereby a company attempts to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be associated with a given issuance. Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings Association (SAIF) Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform Act to form the DIF. Derivatives notional amount – the notional, or contractual, amounts of derivatives represent the level of involvement in the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent the amounts used to calculate contractual cash flows to be exchanged. Derivatives credit equivalent amount – the fair value of the derivative plus an additional amount for potential future c redit exposure based on the notional amount, the remaining maturity and type of the contract. Derivatives transaction types: Futures and forward contracts – contracts in which the buyer agrees to purchase and the seller agrees to sell, at a specified future date, a specific quantity of an underlying variable or index at a specified price or yield. These contracts exist for a variety of variables or indices, (traditional agricultural or physical commodities, as well as currencies and interest rates). Futures contracts are standardized and are traded on organized exchanges which set limits on counterparty credit exposure. Forward contracts do not have standardized terms and are traded over the counter. Option contracts – contracts in which the buyer acquires the right to buy from or sell to another party some specified amount of an underlying variable or index at a stated price (strike price) during a period or on a specified future date, in return for compensation (such as a fee or premium). The seller is obligated to purchase or sell the variable or index at the discretion of the buyer of the contract. Swaps – obligations between two parties to exchange a series of cash flows at periodic intervals (settlement dates), for a specified period. The cash flows of a swap are either fixed, or determined for each settlement date by multiplying the quantity QUARTERLY BANKING PROFILE (notional principal) of the underlying variable or index by specified reference rates or prices. Except for currency swaps, the notional principal is used to calculate each payment but is not exchanged. Derivatives underlying risk exposure – the potential exposure characterized by the level of banks’ concentration in particular underlying instruments, in general. Exposure can result from market risk, credit risk, and operational risk, as well as, interest rate risk. Domestic deposits to total assets – total domestic office deposits as a percent of total assets on a consolidated basis. Earning assets – all loans and other investments that earn interest or dividend income. Efficiency ratio – Noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net operating revenues that are absorbed by overhead expenses, so that a lower value indicates greater efficiency. Estimated insured deposits – in general, insured deposits are total domestic deposits minus estimated uninsured deposits. Beginning March 31, 2008, for institutions that file Call Reports, insured deposits are total assessable deposits minus estimated uninsured deposits. Beginning September 30, 2009, insured deposits include deposits in accounts of $100,000 to $250,000 that are covered by a temporary increase in the FDIC’s standard maximum deposit insurance amount (SMDIA). The Dodd-Frank Wall Street Reform and Consumer Protection Act enacted on July 21, 2010, made permanent the standard maximum deposit insurance amount (SMDIA) of $250,000. Also, the Dodd-Frank Act amended the Federal Deposit Insurance Act to include noninterest-bearing transaction accounts as a new temporary deposit insurance account category. All funds held in noninterest-bearing transaction accounts were fully insured, without limit, from December 31, 2010, through December 31, 2012. Failed/assisted institutions – an institution fails when regulators take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or another healthy institution. This action may require the FDIC to provide funds to cover losses. An institution is defined as “assisted” when the institution remains open and receives assistance in order to continue operating. Fair Value – the valuation of various assets and liabilities on the alance sheet—including trading assets and liabilities, availableb for-sale securities, loans held for sale, assets and l iabilities accounted for under the fair value option, and foreclosed assets— involves the use of fair values. During periods of market stress, the fair values of some financial instruments and nonfinancial assets may decline. FHLB advances – all borrowings by FDIC-insured institutions from the Federal Home Loan Bank System (FHLB), as reported by Call Report filers, and by TFR filers prior to March 31, 2012. Goodwill and other intangibles – intangible assets include ervicing rights, purchased credit card relationships, and other s identifiable intangible assets. Goodwill is the excess of the purchase price over the fair market value of the net assets acquired, less subsequent impairment adjustments. Other intangible assets are recorded at fair value, less subsequent quarterly amortization and impairment adjustments. Loans secured by real estate – includes home equity loans, junior liens secured by 1-4 family residential properties, and all other loans secured by real estate. Loans to individuals – includes outstanding credit card balances and other secured and unsecured consumer loans. Long-term assets (5+ years) – loans and debt securities with remaining maturities or repricing intervals of over five years. Maximum credit exposure – the maximum contractual credit exposure remaining under recourse arrangements and other sellerprovided credit enhancements provided by the reporting bank to securitizations. Mortgage-backed securities – certificates of participation in pools of residential mortgages and collateralized mortgage obligations issued or guaranteed by government-sponsored or private enter prises. Also, see “Securities,” below. Net charge-offs – total loans and leases charged off (removed from balance sheet because of uncollectability), less amounts recovered on loans and leases previously charged off. Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to depositors and other creditors, expressed as a percentage of average earning assets. No adjustments are made for interest income that is tax exempt. Net loans to total assets – loans and lease financing receivables, net of unearned income, allowance and reserves, as a percent of total assets on a consolidated basis. Net operating income – income excluding discretionary transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from operating income have been adjusted to exclude the portion applicable to securities gains (or losses). Noncurrent assets – the sum of loans, leases, debt securities, and other assets that are 90 days or more past due, or in nonaccrual status. Noncurrent loans & leases – the sum of loans and leases 90 days or more past due, and loans and leases in nonaccrual status. Number of institutions reporting – the number of institutions that actually filed a financial report. New reporters – insured institutions filing quarterly financial reports for the first time. Other borrowed funds – federal funds purchased, securities sold with agreements to repurchase, demand notes issued to the U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and trading liabilities, less revaluation losses on assets held in trading accounts. Other real estate owned – primarily foreclosed property. Direct and indirect investments in real estate ventures are excluded. The amount is reflected net of valuation allowances. For institutions that filed a Thrift Financial Report (TFR), the v aluation allowance subtracted also includes allowances for other repossessed assets. Also, for TFR filers the components of other real estate owned are reported gross of valuation allowances. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their losses) compared to the same period a year earlier. FDIC QUARTERLY 29 2022 • Volume 16 • Number 1 “Problem” institutions – federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. “Problem” institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either a “4” or “5.” The number and assets of “problem” institutions are based on FDIC composite ratings. Prior to March 31, 2008, for institutions whose primary federal regulator was the OTS, the OTS composite rating was used. Recourse – an arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank’s claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Reserves for losses – the allowance for loan and lease losses on a consolidated basis. Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. Excludes restructured loans and leases that are not in compliance with the modified terms. Retained earnings – net income less cash dividends on common and preferred stock for the reporting period. Return on assets – bank net income (including gains or losses on securities and extraordinary items) as a percentage of average total (consolidated) assets. The basic yardstick of bank profitability. Return on equity – bank net income (including gains or losses on securities and extraordinary items) as a percentage of average total equity capital. Risk-weighted assets – assets adjusted for risk-based capital definitions which include on-balance-sheet as well as off-balancesheet items multiplied by risk-weights that range from zero to 200 percent. A conversion factor is used to assign a balance sheet equivalent amount for selected off-balance-sheet accounts. Securities – excludes securities held in trading accounts. Banks’ securities portfolios consist of securities designated as “held-tomaturity” (reported at amortized cost (book value)), securities designated as “available-for-sale” (reported at fair (market) value), and equity s ecurities with readily determinable fair values not held for trading. Securities gains (losses) – realized gains (losses) on held-to- maturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers also include gains (losses) on the sales of assets held for sale. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) Seller’s interest in institution’s own securitizations – the reporting bank’s ownership interest in loans and other assets that have been securitized, except an interest that is a form of recourse or other seller-provided credit enhancement. Seller’s interests differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is generally equal to the total principal amount of the pool of assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the form of securities issued to investors. 30 FDIC QUARTERLY Small Business Lending Fund – The Small Business Lending Fund (SBLF) was enacted into law in September 2010 as part of the Small Business Jobs Act of 2010 to encourage lending to small businesses by providing capital to qualified community institutions with assets of less than $10 billion. The SBLF Program is administered by the U.S. Treasury Department (https:// home.treasury.gov/policy-issues/small-business-programs/ small-business-lending-fund). Under the SBLF Program, the Treasury Department purchased noncumulative perpetual preferred stock from qualifying depository institutions and holding companies (other than Subchapter S and mutual institutions). When this stock has been issued by a depository institution, it is reported as “Perpetual preferred stock and related surplus.” For regulatory capital purposes, this noncumulative perpetual preferred stock qualifies as a component of Tier 1 capital. Qualifying Subchapter S corporations and mutual institutions issue unsecured subordinated debentures to the Treasury Department through the SBLF. Depository institutions that issued these debentures report them as “Subordinated notes and debentures.” For regulatory capital purposes, the debentures are eligible for inclusion in an institution’s Tier 2 capital in accordance with their primary federal regulator’s capital standards. To participate in the SBLF Program, an institution with outstanding securities issued to the Treasury Department under the Capital Purchase Program (CPP) was required to refinance or repay in full the CPP securities at the time of the SBLF funding. Any outstanding warrants that an institution issued to the Treasury Department under the CPP remain outstanding after the refinancing of the CPP stock through the SBLF Program unless the institution chooses to repurchase them. Subchapter S corporation – a Subchapter S corporation is treated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any federal income taxes at the corporate level. This can have the effect of reducing institutions’ reported taxes and increasing their after-tax earnings. Trust assets – market value, or other reasonably available value of fiduciary and related assets, to include marketable securities, and other financial and physical assets. Common physical assets held in fiduciary accounts include real estate, equipment, collectibles, and household goods. Such fiduciary assets are not included in the assets of the financial institution. Unearned income and contra accounts – unearned income for Call Report filers only. Unused loan commitments – includes credit card lines, home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused commitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for sale, which are accounted for as derivatives on the balance sheet.) Yield on earning assets – total interest, dividend, and fee income earned on loans and investments as a percentage of average earning assets. CONSUMER LENDING THROUGH THE PANDEMIC AND THE RECOVERY Introduction The U.S. economy and households entered the recession that started in 2020 in a strong Consumer Sector Overview The pandemic quickly pushed the economy into a recession and more than 20 million people lost their jobs in two months. Many businesses shut down as state and local governments issued stay-at-home orders and directed businesses to close. Many people remained at home to slow the spread of COVID-19, resulting in a sharp slowdown in economic activity. The unemployment rate rose to 14.7 percent in April 2020, well above the previous peak unemployment rate of 10.8 percent in 1982 (Chart 1). In May 2020, an additional 31.5 percent of the labor force could not work because of closures or lost business related to the COVID-19 pandemic.1 Aggregate monthly personal income dipped $33 billion in March 2020 (almost 2 percent from February 2020, about four times the average monthly personal income change). The negative trends were short-lived, however, as businesses reopened quickly and fiscal support boosted income. position. Before the pandemic, the unemployment rate was at the lowest level since the 1970s and household wealth was at its highest level since data were first collected in 1945. Household balance sheets had been improving for years before the pandemic and debt burdens were historically low. This strong starting position helped households weather the income disruptions that occurred due to the pandemic. Government support programs bolstered income in the months following the start of the recession through the largest and fastest economic contraction on record (Chart 2). Direct transfers and enhanced unemployment insurance payments pushed monthly personal income to a record high in April 2020, about $150 billion higher than monthly personal income before the pandemic. In the context of the severe recession and substantial job loss, this record-setting personal income and its full-year increase in 2020 compared with 2019 reflects the magnitude of the federal government’s pandemic-related support to the U.S. economy. Personal income spiked again in January 2021 and March 2021 when additional rounds of direct payments were made. Chart 1 Unemployment Spiked at the Onset of the Pandemic Official Unemployment Rate (U-3) Unemployed + Marginally Attached + Part Time for Economic Reasons (U-6) Unable to Work Due to COVID-19 Business Closure Share of Labor Force (Percent) 35 30 25 Previous U-6 Peak (Dec 2009) 20 15 Previous U-3 Peak (Nov 1982) 10 5 0 Jan 2019 May 2019 Sep 2019 Jan 2020 May 2020 Sep 2020 Jan 2021 May 2021 Sep 2021 Source: Bureau of Labor Statistics (Haver Analytics). Note: Data are monthly through December 2021. The U-3 unemployment measure is available from January 1948 to December 2021. The U-6 unemployment measure is available from January 1994 to December 2021. Shaded area indicates recession. 1 In May 2020, the Bureau of Labor Statistics added questions to the Current Population Survey about how the coronavirus pandemic affected work, including the question “At any time in the LAST 4 WEEKS, were you unable to work because your employer closed or lost business due to the coronavirus pandemic?” The standard measure of unemployment (U-3) was 13.2 percent in May 2020. FDIC QUARTERLY 31 2022 • Volume 16 • Number 1 Chart 2 Personal Income Rose During the Pandemic From Government Support Monthly Dollar Amount ($ Trillions) Income Unemployment Insurance Economic Impact Payments 2.5 2.0 1.5 1.0 0.5 0.0 Jan-2019 Jul-2019 Jan-2020 Jul-2020 Jan-2021 Jul-2021 Source: Bureau of Economic Analysis (Haver Analytics). Note: Data are monthly through December 2021. Extensive government support pushed aggregate personal income to record highs in the months following the onset of the 2020 recession and—coupled with reduced spending from pandemic-related business closures—led to a high household savings rate. Estimates place excess savings—savings on top of what would be predicted by the pre-pandemic trend in household savings—at about $2.5 trillion in early 2021. While household wealth dipped with the stock market in first quarter 2020, it reached new record highs in every quarter between second quarter 2020 and fourth quarter 2021 as the stock market recovered and housing prices rose. Household savings and wealth supported consumer debt payments throughout the recession and often allowed consumers to keep current on debt service payments despite challenging economic conditions. Government Support Programs Expanded During the Pandemic Several federal programs supported households through the pandemic. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed in March 2020, provided direct economic impact payments for the majority of American households.a From the end of March through May 2020, the Internal Revenue Service made 159 million of these payments to qualifying individuals. The federal government also provided two more rounds of economic impact payments in early 2021. Altogether, the Treasury issued almost $800 billion in transfer payments in about 15 months, much higher than the previous peak in transfer payments in the Great Recession. The CARES Act also expanded unemployment insurance, both in terms of who was covered by unemployment insurance and the size of payments. Besides state unemployment insurance payments, the federal government paid $600 per week in federal unemployment insurance benefits.b The CARES Act also created two new unemployment insurance programs. The Pandemic Emergency Unemployment Compensation program extended unemployment insurance benefits to people whose standard state benefits had expired. And the Pandemic Unemployment Assistance program provided unemployment insurance payments to people who typically aren’t eligible for unemployment insurance, like gig workers, independent contractors, and the self-employed. By October 2021, most federal monetary support programs had ended. Most economic impact payments were disbursed by summer 2021, and enhanced unemployment insurance programs ended in September 2021. The last major fiscal cash transfer program related to COVID-19 in effect at the end of 2021 was the expansion of the Child Tax Credit. The American Rescue Plan expanded the Child Tax Credit and changed a tax refund to disbursing half of the money as monthly payments. a CARES Act economic impact payments were up to $1,200 per adult and $500 per child under 17 years old for individuals who made less than $99,000 per year and joint filers who made less than $198,000 per year. b These additional payments were later reduced to $300 per week, but remained in effect through September 2021. 32 FDIC QUARTERLY CONSUMER LENDING THROUGH THE PANDEMIC AND THE RECOVERY The unprecedented government transfers, coupled with changes in consumer spending and saving behaviors, led to a change in consumer lending trends. Consumer loan volumes declined in 2020 and remained below pre-pandemic levels through third quarter 2021. And unlike in previous recessions, loan performance generally improved through the recession. Households used the government support partly to pay down debt and increase savings, both decreasing their reliance on consumer credit for spending and improving repayment rates on existing loans. The Census Bureau’s Household Pulse Survey provides further information about consumers’ use of the increased income from government transfers. The survey asked respondents how they used the economic impact payments they received. While only 11 percent of households used the first economic impact payment to “mostly pay down debt” in summer 2020, that figure increased to about 50 percent for the second and third payments, received in early 2021.2 Many households also saved part of their economic impact payments, which may have made them more able to pay debts in future months. Overview of Consumer Lending at Banks In aggregate, banks held $1.9 trillion in consumer loans in fourth quarter 2021 (Chart 3). Consumer loans are defined as loans to individuals that are not backed by real estate. The category includes credit card loans, auto loans, and other consumer loans. On average, consumer loans are not a large part of bank portfolios, just 7.9 percent of bank assets overall. Consumer loans are also a relatively small share of community bank portfolios, totaling $66 billion in fourth quarter 2021.3 However, for lenders that specialize in consumer lending, trends in the consumer landscape are of great importance. Chart 3 Credit Card Loans Comprise About Half of Consumer Loans; Auto Loans and Other Consumer Loans Comprise the Rest Loans Outstanding ($ Trillions) Credit Card Loans Auto Loans Other Consumer Loans 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Mar-2019 Sep-2019 Mar-2020 Sep-2020 Mar-2021 Sep-2021 Source: FDIC. Note: Data are quarterly through fourth quarter 2021. Noncommunity banks are the main consumer lenders. While noncommunity banks represent 88 percent of total banking industry assets, they hold a disproportionally higher share of consumer loans: 97 percent of the industry total (Chart 4). Credit card loans are particularly concentrated in noncommunity banks. Noncommunity banks also hold a higher proportion of their assets as consumer loans. Consumer loans, on average, are 10.3 percent of assets at noncommunity banks and only 2.8 percent of assets at community banks (Table).4 2 The response options in the survey were “mostly spend it,” “mostly save it,” or “mostly use it to pay off debt.” See Phase 3 COVID-19 Household Pulse Survey for an example of the survey questionnaire. 3 Community banks are defined using the criteria in the FDIC 2012 Community Banking Study and FDIC 2020 Community Banking Study. The definition encompasses small banks and larger banks that focus on traditional lending and deposittaking activities. See https://www.fdic.gov/resources/community-banking/report/2012/2012-cbi-study-full.pdf and https://www.fdic.gov/resources/community-banking/report/2020/2020-cbi-study-full.pdf for more information. Noncommunity banks are all other banks. 4 The larger share of assets of consumer loans at noncommunity banks is partly driven by the credit card specialist banks, where consumer loans are 76.4 percent of assets. Excluding the 11 credit card specialist banks, consumer loans are 8.7 percent of assets at noncommunity banks. FDIC QUARTERLY 33 2022 • Volume 16 • Number 1 Banks implemented or expanded forbearance programs for their customers in spring and summer 2020, which helped to support loan performance. These forbearance programs for consumer loans were not mandated by the CARES Act, but bank supervisors released guidance in March 2020 encouraging banks to work prudently with customers affected by COVID-19 and stating that they view loan modification programs as positive actions that can mitigate adverse effects on borrowers during the pandemic.5 Supervisors clarified that borrowers who received forbearance should generally be considered current on their loans if they met the terms of the forbearance; this may have contributed to lower delinquency rates on consumer loans during 2020 and 2021. Chart 4 Noncommunity Banks Hold a Disproportionately Larger Share of Consumer Loans Than Their Share of Total Banking Industry Assets Share Held by Noncommunity Banks (Percent) 100 90 80 70 60 50 40 30 20 10 0 88% 85% Assets Loans Source: FDIC. Note: Data are as of fourth quarter 2021. 97% 95% Total Consumer Loans Auto Loans 100% Credit Card Loans 93% Other Consumer Loans Table Consumer Loans Are a Larger Share of Assets at Noncommunity Banks Than Community Banks Loan Type Consumer Loans Credit Card Loans Auto Loans Other Consumer Loans Community Banks Noncommunity Banks 2.8% 0.1% 1.3% 1.4% 10.3% 5.4% 2.6% 2.2% Source: FDIC. Note: Data are average share of assets from first quarter 2011 through fourth quarter 2019. The outlook for overall consumer loan performance is strong. In aggregate, household balance sheets have remained relatively healthy through the recession, and labor markets improved even as federal support for households began to wane. Households have generally not taken on more consumer debt through the recession and recovery, and banks have generally tightened underwriting standards. However, if the pandemic worsens and businesses shut down again, households may lose income and have trouble repaying their debt. The next sections discuss the three types of consumer lending in detail. 5 See, for example, https://www.fdic.gov/news/press-releases/2020/pr20030b.pdf and https://www.fdic.gov/news/pressreleases/2020/pr20038a.pdf. 34 FDIC QUARTERLY CONSUMER LENDING THROUGH THE PANDEMIC AND THE RECOVERY Nonbank Lenders in the Consumer Lending Space Nonbank lenders hold most consumer loans, primarily due to large holdings of federal student loans. The Federal Reserve Bank of New York publishes quarterly reports on consumer debt based on their Consumer Credit Panel database, which uses anonymous credit bureau data to study consumer debt. The quarterly report does not distinguish between bank and nonbank debt, but by combining their data with bank Consolidated Reports of Condition and Income (Call Report) data, we can estimate the shares of loans held by nonbanks. Nonbanks include credit unions, auto finance companies, fintech lenders, other private lenders, and the federal government.a Nonbank lenders held 57 percent of consumer loans outstanding as of fourth quarter 2021. However, excluding federally owned student loans, nonbank lenders hold only 31 percent of consumer loans outstanding (Chart 5).b Nonbank lenders hold almost no credit card loans, but they hold the majority of auto loans and other consumer loans.c Chart 5 Banks Hold the Majority of Credit Card Loans but Nonbanks Hold the Majority of Auto and Other Consumer Loans Loans Outstanding ($ Trillions) Bank Share of Loans: 43 percent Bank Share Excluding Federal Student Loans: 69 percent Bank Nonbank 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Total Consumer Loans Credit Card Loans Auto Loans Other Consumer Loans Sources: FDIC, Federal Reserve Bank of New York (Haver Analytics). Note: Data are as of fourth quarter 2021. a Most consumer loans held by the federal government are U.S. Department of Education student loans. Consumer Credit Panel does not separately identify federal student loans and private student loans. Data on outstanding federal student loans come from the National Student Loan Data System. See https://studentaid.gov/data-center/student/portfolio. c Credit unions hold about 20 percent of outstanding auto loans. In this section, credit unions are considered nonbank lenders. b The Credit Cards The credit card market is dominated by a few large noncommunity banks. The ten largest credit card lenders—all noncommunity banks—held 88 percent of outstanding credit card loans in fourth quarter 2021, while community banks held less than 1 percent of outstanding credit card loans. Credit card loan volumes declined during the pandemic (Chart 6). Aggregate credit card loan volume in first quarter 2021 was the lowest since 2017, down 19 percent from the pre-pandemic peak in fourth quarter 2019. In third and fourth quarters 2021, credit card loans grew year over year, but in fourth quarter 2021 loan balances remained down about 7 percent compared with fourth quarter 2019. FDIC QUARTERLY 35 2022 • Volume 16 • Number 1 Chart 6 Credit Card Loan Balances Fell in 2020 and the First Half of 2021 Loans Outstanding ($ Billions) Top Ten Banks Other Noncommunity Banks Community Banks 1,000 900 800 700 600 500 400 300 200 100 0 Mar-2019 Sep-2019 Mar-2020 Sep-2020 Mar-2021 Sep-2021 Source: FDIC. Note: Data are quarterly through fourth quarter 2021. Aggregate credit card balances fell in 2020 because households changed their spending habits, often in ways that are not typical during recessions. Credit card balances rose during the previous two recessions. In the pandemic recession, households cut back on spending as lockdowns and business closures were implemented across the country, which lowered credit card balances. Households cut back more than average on services spending, particularly for those services that involve in-person interaction, such as restaurants, hotels, travel, and medical care. Goods spending recovered quickly after it fell in March and April 2020, but services spending recovered more slowly. These changes meant that overall spending did not surpass pre-pandemic levels until first quarter 2021. And the government transfer payments enabled many households to pay down existing credit card balances, which also reduced aggregate outstanding credit card loans. Banks tightened lending standards in 2020, which also contributed to lower credit card loan balances. In second quarter 2020, on net, more than 70 percent of all banks tightened lending standards for credit card loans, according to the Federal Reserve’s Senior Loan Officer Opinion Survey (SLOOS). The survey covers about 80 of the largest U.S. banks, which is especially useful for credit cards because most credit card loans come from large banks. Banks tightened lending standards again in third quarter 2020, and then began loosening standards as the economy recovered. On net, banks loosened underwriting standards for credit cards in every quarter of 2021, but they remained relatively tight. In the first quarter 2021 SLOOS report, banks were asked to compare their current underwriting standards to pre-pandemic levels. The underwriting standards for credit card loans at a meaningful share majority of banks were still tighter than before the pandemic. Credit card loan performance generally improved as consumers cut back on credit card spending and paid down credit card balances with federal transfers. The share of credit card loans that were noncurrent—90 days or more past due but still accruing interest—and loans in nonaccrual status decreased 22 percent from fourth quarter 2019 to fourth quarter 2020 and decreased another 21 percent by fourth quarter 2021 (Chart 7). And the net chargeoff rate for credit card loans for the banking industry was near its historic low in fourth quarter 2021. In contrast, the share of credit card loans that were noncurrent rose from fourth quarter 2007, at the start of the Great Recession, through first quarter 2010, after the end of the Great Recession. 36 FDIC QUARTERLY CONSUMER LENDING THROUGH THE PANDEMIC AND THE RECOVERY Chart 7 The Noncurrent Rate on Credit Card Loans Was Lower at Community Banks Than at Noncommunity Banks Share of Loans That Are Noncurrent (Percent) Noncommunity Banks Community Banks 8 7 6 5 4 3 2 1 0 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Source: FDIC. Note: Noncurrent loans are loans that are 90 days or more delinquent or in nonaccrual status. Data are quarterly through fourth quarter 2021. Shaded areas indicate recession. Auto Loans The auto lending market is split between banks, credit unions, and other auto finance companies. Banks and captive finance companies each hold about 30 percent of the auto loan market, credit unions hold about 18 percent, and other lenders hold the remaining amount, according to Experian.6 In the banking industry, a few banks hold the majority of outstanding auto loans, but most banks (87.5 percent) have some auto loans on their balance sheets. The ten largest bank auto lenders hold almost 75 percent of outstanding bank auto loans (Chart 8). Auto lending by banks and nonbanks declined during the start of the pandemic but recovered quickly. Auto lending declined for a few months in first and second quarter 2020 as many dealerships closed in-person sales facilities. However, auto loan volumes recovered more quickly than in previous recessions because of higher demand and low interest rates. A factor contributing to increased demand for auto loans may have been people who previously did not own a car but felt uncomfortable using public transportation during a pandemic. Chart 8 The Ten Largest Auto Lending Banks Held Three-Quarters of Auto Loans in the Banking Sector Loans Outstanding ($ Billions) Top Ten Banks Other Noncommunity Banks Community Banks 600 500 400 300 200 100 0 Mar-2019 Sep-2019 Mar-2020 Sep-2020 Mar-2021 Sep-2021 Source: FDIC. Note: Data are quarterly through fourth quarter 2021. 6A captive finance company is a wholly owned subsidiary of an auto manufacturer that provides loans for purchases of their own vehicles. FDIC QUARTERLY 37 2022 • Volume 16 • Number 1 Auto loan balances in the banking industry fell slightly from $487 billion in first quarter 2020 to $486 billion in second quarter 2020, but exceeded pre-pandemic levels by third quarter 2020. In fourth quarter 2021, auto loan balances were about 11 percent above their pre-pandemic level. In past recessions, auto loan volumes recovered much more slowly. While data on auto loans in the banking industry are not available for previous recessions, data on auto sales may serve as a proxy for bank auto-lending patterns. After the Great Recession, the number of cars sold did not surpass pre-recession levels until 2014, almost seven years after the previous peak.7 During the recession, banks tightened lending standards for auto loans, especially for subprime borrowers. In second quarter 2020, about half of all banks tightened lending standards for auto loans, according to the SLOOS. Banks loosened underwriting standards over the subsequent quarters, especially for prime borrowers. In a special question in first quarter 2021, banks were asked to compare their underwriting standards to pre-pandemic underwriting standards. Responses showed that the standards at more than a quarter of banks were tighter than before the pandemic for subprime and near-prime borrowers, and the standards at 11 percent of banks were tighter than before the pandemic for prime borrowers. Tighter standards tend to improve the quality of loan portfolios and decrease delinquencies. Auto loan performance improved in 2020 and 2021. The share of auto loans at banks that were noncurrent increased in the first half of 2020 before improving through 2021 (Chart 9). The share of bank auto loans in early delinquency—loans that were 30 to 89 days past due— fell almost 50 percent from first quarter 2020 to first quarter 2021. Early delinquencies rose in 2021 but remained well below pre-pandemic levels in fourth quarter 2021. Unlike pre-pandemic trends, auto loan performance was somewhat better at community banks than noncommunity banks.8 While auto loan data were not reported separately before 2011, loan performance data for auto and other consumer loans combined are available. Loan performance for these non-credit-card consumer loans began deteriorating in fourth quarter 2007 at the start of the Great Recession and worsened through first quarter 2010, after the end of the recession. Chart 9 Auto Loan Performance Was Better at Community Banks Than at Noncommunity Banks in 2020 and 2021 Share of Loans That Are Noncurrent (Percent) Noncommunity Bank Auto Loans 4.0 Community Bank Auto Loans 3.5 Noncommunity Bank Non-Credit-Card Consumer Loans 3.0 Community Bank Non-Credit-Card Consumer Loans 2.5 2.0 1.5 1.0 0.5 0.0 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Source: FDIC. Note: Noncurrent loans are loans that are 90 days or more delinquent or in nonaccrual status. Before 2011, data for auto loans are not separately available, so the dashed lines show noncurrent rates for auto and other consumer loans combined (non-credit-card loans). Data are quarterly through fourth quarter 2021. Shaded areas indicate recession. 7 Bureau 8 The of Economic Analysis. share of loans that were noncurrent increased at community banks in third and fourth quarter 2021 consistent with the seasonal nature of auto loan noncurrent rates. 38 FDIC QUARTERLY CONSUMER LENDING THROUGH THE PANDEMIC AND THE RECOVERY Other Consumer Loans Most banks hold other consumer loans on their balance sheets. Other consumer loans include revolving, single payment, or installment loans made to an individual that are not credit card or auto loans. This loan category is mostly composed of unsecured personal loans and private student loans. The ten largest bank lenders for other consumer loans hold about half of other consumer loans in the banking system, while community banks hold about 9 percent of the other consumer loans in the banking system. Most banks (96 percent) hold some other consumer loans on their balance sheets. Balances of other consumer loans were flat after the start of the pandemic recession but began growing again in third quarter 2020 (Chart 10). Balances of other consumer loans continued to rise through the end of 2020 and in 2021. In fourth quarter 2021, the balance of other consumer loans was $473 billion, 14.8 percent higher than the pre-pandemic level. Just as for auto and credit card loans, banks tightened lending standards for other consumer loans in second and third quarter 2020. On net, 61 percent of banks tightened lending standards in second quarter 2020, and 16 percent tightened in third quarter 2020, according to the SLOOS. Starting in fourth quarter 2020, banks loosened standards on other consumer loans in every quarter thereafter through fourth quarter 2021. Although banks have loosened underwriting standards on other consumer loans, the standards are still relatively tight. In the July 2021 SLOOS report, banks reported that underwriting standards for other consumer loans were somewhat tighter compared with their historical range from 2005 to the present. Chart 10 Other Consumer Loan Balances Continued to Grow in 2020 and 2021 Loans Outstanding ($ Billions) Top Ten Banks Other Noncommunity Banks Community Banks 500 450 400 350 300 250 200 150 100 50 0 Mar-2019 Sep-2019 Mar-2020 Sep-2020 Mar-2021 Sep-2021 Source: FDIC. Note: Data are quarterly through fourth quarter 2021. Loan performance for other consumer loans improved throughout the pandemic. Forbearance programs and changing consumer spending and savings behavior may have kept delinquencies low. The other consumer loan noncurrent rate fell 20 percent between the first and second quarter of 2020 but followed its typical seasonal pattern of rising through the end of the year (Chart 11).9 The noncurrent rate improved further in 2021, and in fourth quarter 2021 the noncurrent rate was still down 20 percent from the fourth quarter 2019 level. In contrast, other non-credit-card consumer loan performance worsened during the last recession. Before 2011, auto loans were included in this category, so direct comparisons of loan performance during the Great Recession are not possible, but the share of non-credit-card consumer loans that were noncurrent began rising in fourth quarter 2007 at the start of the Great Recession. The noncurrent rate for this loan category continued to rise through fourth quarter 2011, after the end of the Great Recession. 9 The noncurrent rate for combined bank and nonbank other consumer loans spiked down in second quarter 2020 because of federally owned student loans. See the inset box on page 35 for more details on federal student loans. FDIC QUARTERLY 39 2022 • Volume 16 • Number 1 Chart 11 Other Consumer Loan Performance Improved at Community and Noncommunity Banks in 2020 and 2021 Share of Loans That Are Noncurrent (Percent) 3.0 2.5 2.0 Noncommunity Bank Other Consumer Loans Community Bank Other Consumer Loans Noncommunity Bank Non-Credit-Card Consumer Loans Community Bank Non-Credit-Card Consumer Loans 1.5 1.0 0.5 0.0 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Source: FDIC. Note: Noncurrent loans are loans that are 90 days or more delinquent or in nonaccrual status. Before 2011, data for other consumer loans are not separately available, so the dashed lines show noncurrent rates for auto and other consumer loans combined (non-credit-card loans). Data are quarterly through fourth quarter 2021. Shaded areas indicate recession. Conclusion In contrast with trends in previous recessions, consumer lending continued during the pandemic and consumer loan performance remained strong, helped by government programs that supported individual incomes and forbearance programs. The economic recovery helped support consumer financial conditions even as these programs ended. In aggregate, household balance sheets are healthy and labor markets are strong. Despite record job losses, households have generally not taken on more consumer debt through the recession and recovery. Furthermore, banks tightened lending standards in the uncertain economic environment. While the outlook for consumer loan performance is strong, it remains dependent on pandemic conditions. If the pandemic worsens and causes more business shutdowns and reduced economic activity, household income may decline and consumer loan performance may deteriorate. Author: Kathryn Fritzdixon Senior Financial Economist Division of Insurance and Research 40 FDIC QUARTERLY 2021 SUMMARY OF DEPOSITS HIGHLIGHTS Introduction The 2021 Summary of Deposits (SOD) Survey responses reflect the continued effects of the COVID-19 pandemic and funding from government stimulus programs, changing spending patterns, and the availability and use of electronic banking applications on deposit and branch levels.1 Total deposits at FDIC-insured institutions increased 10.7 percent during the most recent SOD reporting period (year ending June 30, 2021), down from the year-earlier rate, which was the highest growth rate on record since the 1940s.2 However, deposit growth was up from the pre-pandemic levels reported in 2019. Deposit growth rates were higher for community banks than for noncommunity banks on a merger-adjusted basis during the year ending June 30, 2021.3 Along with elevated deposit growth, the 2021 SOD survey responses reflect a record rate of decline in the number of branches. The number of branches of FDIC-insured depository institutions continued to decline across all census categories—metropolitan, micropolitan, and rural areas—with closures of noncommunity bank branches occurring at a rate higher than closures of community bank branches. Total Deposits Continued to Grow at More Than Double the Pre-Pandemic Growth Rate Total deposits increased 10.7 percent, from $15.5 trillion to $17.2 trillion, during the 2021 SOD reporting period. While this growth rate is less than half the extraordinarily high growth rate reported in 2020, deposit growth was more than twice as high as it was before the beginning of the pandemic (Chart 1). The growth was widespread: deposits increased at community banks and noncommunity banks, banks in all SOD asset size groups, banks in all but one lending specialization (credit card lending), and banks across all census categories.4 Noncommunity banks, which hold a high share of the banking industry’s total deposits, nearly matched the industry’s total deposit growth rate, while the deposit growth rate for community banks exceeded that of noncommunity banks. The merger-adjusted deposit growth rate of 10.3 percent for noncommunity banks was twice as high as the rate reported in 2019 but less than half the growth rate reported in 2020 (Table 1). Deposit growth at community banks in the year ending June 30, 2021, remained elevated at 13.5 percent but was down slightly from the 16.6 percent growth rate on a merger-adjusted basis reported in the year ending June 30, 2020. 1 “Deposits” refers to deposits in branches of FDIC-insured institutions in the United States, U.S. territories, and U.S. possessions. U.S. branches of foreign institutions and their deposits are not included. 2 The FDIC’s 2020 Annual Report shows growth in domestic deposits of 26.2 percent in 1942, 24.2 percent in 1943, and 46 percent in 1989, all of which are higher than the 21.7 percent deposit growth reported in the 2020 SOD survey. The high growth in 1989 is because 1989 was the first year in which deposits of institutions covered under both the Bank Insurance Fund and the Savings Association Insurance Fund were included in the domestic deposit totals shown in the Annual Report. According to FDIC Call Report data, if institutions covered under both the Bank Insurance Fund and the Savings Association Insurance Fund are included in the sum of total domestic deposits in 1988, deposit growth in 1989 would be much lower at 2.9 percent. Given that growth in domestic deposits in 1989 was driven by this change in how deposit totals were reported, 1943 is the most recent year in which deposit growth was higher than the 2020 SOD growth. Importantly, the Annual Report shows deposit totals as of December 31 of each year while the SOD survey reports deposit totals as of June 30 of each year, so year-over-year growth rates calculated based on these two sources would be close but not identical. See FDIC Annual Report 2020: 140, https://www.fdic.gov/about/financial-reports/ reports/2020annualreport/2020ar-final.pdf. 3 Community banks are defined by criteria in the FDIC 2012 Community Banking Study. The definition encompasses small banks and larger banks that focus on traditional lending and deposit-taking activities. See https://www.fdic. gov/resources/community-banking/report/2012/2012-cbi-study-full.pdf. Merger adjustment is a way of excluding the effects of mergers from a growth calculation in order to measure the “organic growth” of a cohort of institutions. For example, in calculating one-year merger-adjusted deposit growth of community banks, deposits of community banks acquired during the year by noncommunity banks would be excluded from the prior year total for community bank deposits. For more information see Eric C. Breitenstein and Derek K. Thieme, “Merger Adjusting Bank Data: A Primer,” FDIC Quarterly 13, no. 1 (2019): 31–49, https://www.fdic.gov/analysis/quarterly-banking-profile/fdic-quarterly/2019vol13-1/fdic-v13n1-4q2018-article.pdf. 4 SOD bank asset size groups as discussed in this article are banks with assets greater than $250 billion; banks with assets between $10 billion and $250 billion; banks with assets between $1 billion and $10 billion; and banks with assets less than $1 billion. FDIC QUARTERLY 41 2022 • Volume 16 • Number 1 Chart 1 Deposits Continued to Grow in 2021, but the Growth Rate Was Lower Than in 2020 Total Deposits ($ Trillion) Total Deposits (Left Axis) Percent Change in Deposits (Right Axis) Percent 20 20 18 16 14 15 12 10 10 8 6 5 4 2 0 2017 2018 2019 2020 2021 0 Source: FDIC Summary of Deposits, June 30, 2017, to June 30, 2021. Federal pandemic-related economic assistance programs supported deposit growth at FDIC-insured institutions during the year ending June 30, 2021. U.S. fiscal and monetary authorities continued to provide relief to Americans affected by the COVID-19 pandemic through additional economic impact payments, the Pandemic Emergency Unemployment Compensation Program, and the U.S. Small Business Administration Paycheck Protection Program between June 30, 2020, and June 30, 2021. Further, the Federal Reserve maintained low interest rates and continued to purchase financial instruments, including U.S. Treasury securities and mortgage-backed securities, to support the flow of credit to U.S. households and businesses and to promote financial stability throughout 2021.5 This funding, along with elevated savings rates, contributed to higher deposit balances at FDIC-insured institutions.6 Table 1 Deposit Growth Remained Elevated for Community Banks but Moderated for Noncommunity Banks in 2021 2017 All Banks 5.1 Noncommunity Banks Community Banks 5.5 2.9 Noncommunity Banks Community Banks 4.9 6.1 2018 2019 2020 Year-Over-Year Percent Change 3.8 4.2 21.7 Year-Over-Year Percent Change (Not Adjusted for Mergers) 4.3 4.5 23.9 0.9 2.2 8.9 Year-Over-Year Percent Change (Adjusted for Mergers) 3.8 4.0 22.6 4.7 5.4 16.6 2021 10.6 10.4 12.1 10.3 13.5 Source: FDIC Summary of Deposits, June 30, 2017, to June 30, 2021. Note: Merger-adjusted figures for community banks depict the growth through time of the combined deposits of the June 30, 2021, cohort of community banks and the deposits of all the institutions they acquired since June 30, 2016; merger-adjusted figures for noncommunity banks are calculated similarly. 5 See Coronavirus Aid, Relief, and Economic Security Act: H.R. 748 Section 2107; Coronavirus Aid, Relief, and Economic Security Act: H.R. 748 Section 1102; Board of Governors of the Federal Reserve System, “Paycheck Protection Program Liquidity Facility,” https://www.federalreserve.gov/monetarypolicy/ppplf.htm; U.S. Department of the Treasury, “Fact Sheet: The American Rescue Plan Will Deliver Immediate Economic Relief to Families,” https://home.treasury.gov/news/ featured-stories/fact-sheet-the-american-rescue-plan-will-deliver-immediate-economic-relief-to-families; Richard H. Clarida, Burcu Duygan-Bump, and Chiara Scotti, “The COVID-19 Crisis and the Federal Reserve’s Policy Response,” Federal Reserve, June 3, 2021, https://www.federalreserve.gov/econres/feds/the-covid-19-crisis-and-the-federalreserves-policy-response.htm. 6 Total personal income increased in first quarter 2021, reflecting primarily an increase in government social benefits. Savings as a percentage of disposable personal income increased between second quarter 2020 and second quarter 2021. See U.S. Bureau of Economic Analysis, “Personal Income and Outlays, March 2021,” news release no. BEA 21-19, April 30, 2021, https://www.bea.gov/news/2021/personal-income-and-outlays-march-2021. 42 FDIC QUARTERLY 2021 SUMMARY OF DEPOSITS HIGHLIGHTS The Market Share of Deposits Held by the Largest Banks Continued to Grow Banks in the largest asset size group (those with assets greater than $250 billion) continued to hold most of the banking industry’s deposits in the year ending June 30, 2021, despite year-over-year unadjusted growth rates among the asset size groups being volatile. Deposit growth was highest among banks with assets of $10 billion to $250 billion: total deposits for this group of banks increased 13.8 percent during the year ending June 30, 2021. Deposit growth for the smallest banks (those holding less than $1 billion in total assets) reversed a four-year declining trend, with a 3.9 percent year-over-year increase in total deposits. Banks with assets greater than $250 billion saw a mere 9.6 percent increase in deposits in 2021, up from 2020. This stands in stark contrast to the previous year when the largest banks saw a 41.2 percent increase. Total deposits have grown over the past five years for each of the asset size groups in Table 2 except for the smallest banks (assets less than $1 billion). Deposits increased most for banks in the greater than $250 billion asset size group—71.7 percent between 2016 and 2021. Banks with assets of less than $1 billion and banks with assets of $1 billion to $10 billion saw their share of total deposits decrease each year from 2017 through 2021, in sharp contrast with that of the largest banks. The largest banks continued to hold a majority share of total deposits in 2020 and 2021. Table 2 Large Banks Continued to Hold the Highest Share of Total Deposits Percentage Change in Total Deposits Not Adjusted for Mergers 2016–2017 2017–2018 2018–2019 2019–2020 2020–2021 2016–2021 4.7 8.5 2.5 –1.4 5.1 2.0 10.5 –2.2 –4.1 3.8 3.9 7.0 1.4 –2.8 4.2 41.2 3.1 18.9 –0.7 21.7 9.6 13.8 10.1 3.9 10.6 71.7 50.5 32.9 –5.2 53.0 2020 52.4 30.9 10.5 6.2 2021 51.9 31.8 10.5 5.8 Assets Greater Than $250 Billion Assets $10 Billion to $250 Billion Assets $1 Billion to $10 Billion Assets Less Than $1 Billion All Banks Share of Deposits (Percent) 2016 46.2 32.4 12.0 9.4 Assets Greater Than $250 Billion Assets $10 Billion to $250 Billion Assets $1 Billion to $10 Billion Assets Less Than $1 Billion 2017 46.1 33.4 11.7 8.8 2018 45.3 35.5 11.1 8.1 2019 45.2 36.5 10.8 7.6 Source: FDIC Summary of Deposits June 30, 2016, to June 30, 2021. Deposit Growth Was Widespread Across Census Categories Total deposits increased for branches across all census categories—metropolitan, micropolitan, and rural (Table 3) in the SOD reporting period ending June 30, 2021.7 Branches in metropolitan areas continued to hold an overwhelming majority of deposits— nearly 93.4 percent of total deposits. Over the previous five years, the share of total domestic deposits in metropolitan areas ranged from 92.7 percent in 2016 to a high of 93.5 percent in 2021. Not surprisingly, deposits in metropolitan areas accounted for most of the increase in domestic deposits. 7 Counties are labeled metropolitan, micropolitan, or rural depending on whether they are in areas designated by the U.S. Census Bureau as Metropolitan Statistical Areas or as Micropolitan Statistical Areas. Metropolitan Statistical Areas have a core urban area with more than 50,000 inhabitants. Micropolitan Statistical Areas have urban clusters with 10,000 to 50,000 inhabitants. All other areas are referred to as rural areas. FDIC QUARTERLY 43 2022 • Volume 16 • Number 1 Among census categories, total deposit growth was lowest in metropolitan areas (10.8 percent) during the year ending June 30, 2021. But deposit growth in metropolitan areas during the most recent reporting period was close to double the peak year-over-year growth (6.2 percent) reported between 2016 and 2019. Total deposits in micropolitan areas have also grown rapidly since 2020. Increases in total deposits in micropolitan counties ranged from 2.3 percent to 3.4 percent between 2016 and 2019 year over year, while total deposits in micropolitan counties increased 15.3 percent in 2020 and 12.3 percent in 2021. In rural areas, the deposit growth rate of 11.3 percent, during the year ending June 30, 2021, was much higher than growth rates reported in previous years, which ranged from 1.4 percent to 3.1 percent between 2016 and 2019. The deposit growth rate in rural areas was below that of micropolitan areas but higher than that of metropolitan areas during the most recent SOD reporting period. Table 3 The Deposit Growth Rate in Micropolitan Counties Rose Most Among Census Areas in 2021 Metropolitan Micropolitan Rural All Total Domestic Deposits ($ Billions) Year-Over-Year Percent Change Total Domestic Deposits ($ Billions) Year-Over-Year Percent Change Total Domestic Deposits ($ Billions) Year-Over-Year Percent Change Total Domestic Deposits ($ Billions) Year-Over-Year Percent Change 2016 2017 2018 2019 2020 2021 10,421.2 6.2 470.8 2.6 349.6 1.4 11,241.6 5.9 10,965.4 5.2 486.9 3.4 360.3 3.1 11,812.5 5.1 11,395.9 3.9 498.1 2.3 368.3 2.2 12,262.4 3.8 11,881.6 4.3 511.5 2.7 378.8 2.9 12,771.9 4.2 14,532.2 22.3 589.9 15.3 422.6 11.6 15,544.7 21.7 16,102.8 10.8 662.2 12.3 470.5 11.3 17,235.5 10.9 Source: FDIC Summary of Deposits June 30, 2016, to June 30, 2021. Note: Data are not adjusted for mergers. Deposits Increased Across Banks of All Lending Specializations Except Credit Card Banks Banks in all lending specializations except credit card lending reported an increase in deposits during the most recent SOD reporting period.8 Banks with a credit card lending specialization, the pool of which remained unchanged year over year, reported a 4.4 percent decline in total deposits during the year ending June 30, 2021, compared with a 3.7 percent increase in deposits during the previous reporting period (June 30, 2019 to June 30, 2020). Despite a decline in growth from the previous year, deposits increased most—19 percent on a merger-adjusted basis—for banks with a mortgage lending specialization, followed by banks with a consumer lending specialization (16.4 percent) 8 There are nine bank lending specializations (these groups are hierarchical and mutually exclusive): • I nternational—Assets exceed $10 billion and more than 25 percent of assets are in foreign offices. • Agricultural—Agricultural production loans and real estate loans secured by farmland total more than 25 percent of total loans and leases. • Credit card—Credit card loans and securitized receivables total more than 50 percent of total assets plus securitized receivables. • Commercial lending—Commercial and industrial loans, real estate construction and development loans, and loans secured by commercial real estate total more than 25 percent of total assets. • Mortgage lending—Residential mortgage loans and mortgage-backed securities total more than 50 percent of total assets. • Consumer lending—Residential mortgage loans, credit card loans, and other loans to individuals total more than 50 percent of total assets. • O ther specialized less than $1 billion—Assets are less than $1 billion. Loans and leases are less than 40 percent of total assets. • A ll other less than $1 billion—Assets are less than $1 billion, and the institution does not meet any of the definitions above. There is significant lending activity with no identified concentrations. • A ll other greater than $1 billion—Assets are greater than $1 billion, and the institution does not meet any of the definitions above. There is significant lending activity with no identified concentrations. 44 FDIC QUARTERLY 2021 SUMMARY OF DEPOSITS HIGHLIGHTS (Table 4). A merger between two depository institutions may affect loan portfolio composition. As a result, the merged institution may no longer meet the asset concentration thresholds that define a lending specialization, even if no underlying change in loan balances or strategies has occurred. Table 4 Mortgage Lending Specialists Reported the Highest Deposit Growth on a Merger-Adjusted Basis Year-Over-Year Deposit Growth (Percent) Not Adjusted for Mergers Lending Specialty Agricultural Commercial Lending Consumer Lending Credit Card International Mortgage Lending Other < $1 Billion All Other < $1 Billion All Other > $1 Billion 2016 2019 2020 2021 4.5 3.8 1.9 1.6 15.1 0.2 4.3 6.3 15.1 26.1 -18.5 3.1 0.6 -3.1 31.5 -4.3 8.3 7.3 1.9 4.4 -6.6 -9.8 -2.2 -0.5 -6.5 -13.2 -19.6 -5.4 -14.8 -6.6 -16.4 -7.7 -3.1 11.7 4.7 3.1 Year-Over-Year Deposit Growth (Percent) Adjusted for Mergers -3.2 17.5 -40.7 0.0 28.0 92.8 1.0 14.6 25.0 6.1 -0.2 19.9 -4.4 15.1 13.2 79.0 41.9 20.1 2020 6.5 6.9 30.9 3.7 28.0 24.9 79.7 40.8 36.3 2021 12.7 11.1 16.4 -4.4 15.1 19.0 15.4 13.9 8.3 2016 2.8 1.5 33.4 11.5 6.1 -8.1 -12.7 -7.0 12.3 Agricultural Commercial Lending Consumer Lending Credit Card International Mortgage Lending Other < $1 Billion All Other < $1 Billion All Other > $1 Billion 2017 2017 1.8 5.1 -16.0 20.6 5.0 1.9 -21.0 -15.2 6.0 2018 2018 2.2 5.0 -0.5 -4.4 4.0 -0.9 -3.4 -7.9 4.0 2019 -12.0 4.1 -50.4 4.7 2.3 49.7 -10.9 3.7 5.4 Source: FDIC Summary of Deposits, June 30, 2016, to June 30, 2021. Total Number of Branches Declined at a Record Rate Branch closures, net of openings, increased 3.7 percent (a net decline of 3,164 branches) during the year ending June 30, 2021 (Chart 2). This was the highest net percentage reduction in branches since at least 1987. The net branch closure rate was 1.6 percent (1,410 net branch closures) during the previous reporting period.9 The historically high rate of branch closures occurred even though the number of banks reporting branch openings outpaced the number of banks reporting branch closures. Of the 4,940 banks that existed on both June 30, 2020, and June 30, 2021, 485 banks (9.8 percent) opened branches, 401 banks (8.1 percent) closed branches, and the number of branches owned by 4,054 banks (82.1 percent) remained unchanged.10 9 Offices acquired through mergers were closed at a slightly higher rate (6.2 percent) in the year ending June 30, 2021, compared with 4.6 percent as of the year ending June 30, 2020. 10 The total number of banks reporting as of June 30, 2021, was 4,951, including ten de novo banks and one bank that sold most of its assets but retained a deposit insurance certificate. FDIC QUARTERLY 45 2022 • Volume 16 • Number 1 Chart 2 Branch Closures Increased at a Higher Rate in 2021 Branch Closures (Left Axis) Number Percent Change From the Previous Year (Right Axis) Percent 3,500 4.0 3,000 3.5 3.0 2,500 2.5 2,000 2.0 1,500 1.5 1,000 1.0 500 0.5 0 2017 2018 2019 2020 0.0 2021 Source: FDIC Summary of Deposits, June 30, 2016, to June 30, 2021. The Number of Branches per Institution Declined The number of branches per institution declined in the year ending June 30, 2021, as the number of FDIC-insured institutions fell from 5,066 to 4,950 and the number of branches fell from 84,972 to 81,808. An increase in deposits combined with a decrease in the number of institutions and branches drove increases in both average deposits per institution and average deposits per branch during the year ending June 30, 2021. Although the number of branches per institution declined, this measure remains high after several years of growth (Chart 3). The decline in the number of institutions (18.3 percent) outpaced the decline in the number of branches (10.9 percent) between June 30, 2016, and June 30, 2021, resulting in an increase in the average number of branches per institution from 15.2 branches in 2016 to 16.5 branches in 2021 (Table 5). Chart 3 2021 Ended a Decades-Long Trend of Increasing Numbers of Branches per Institution Institutions Number 120,000 Branches Branches per Institution Branches per Institution 18 16 100,000 14 80,000 12 10 60,000 8 40,000 6 4 20,000 0 2 1987 1992 1997 2002 Source: FDIC Summary of Deposits, June 30, 1987, to June 30, 2021. 46 FDIC QUARTERLY 2007 2012 2017 2021 0 2021 SUMMARY OF DEPOSITS HIGHLIGHTS Table 5 Branches per Institution Declined Slightly in 2021 Year Number of Institutions Number of Branches Branches per Institution Total Deposits ($ Billions) Deposits per Institution ($ Millions) Deposits per Branch ($ Thousands) 2017 2018 2019 2020 2021 5,787 5,541 5,303 5,066 4,950 89,839 88,065 86,382 84,972 81,808 15.5 15.9 16.3 16.8 16.5 11,813 12,262 12,772 15,546 17,196 2,041 2,213 2,408 3,069 3,474 131,486 139,242 147,854 182,958 210,202 Source: FDIC Summary of Deposits, June 30, 2017, to June 30, 2021. Note: Data are not adjusted for mergers. Branch Closures Continued to Outpace Branch Openings in Metropolitan Areas Among census categories, the number of branch closures was highest in metropolitan areas on a gross, proportional, and unadjusted basis (Table 6). While both noncommunity and community banks in all census categories reported net reductions in branches between 2016 and 2021, the largest reduction in the number of branches occurred in metropolitan areas (11.6 percent). In metropolitan areas, community bank branches closed at a higher rate (14.2 percent) than noncommunity bank branches (10.6 percent). In micropolitan areas, the five-year branch closure rate (2016 to 2021) was 9.7 percent. Unlike the pattern in metropolitan areas, in micropolitan areas, noncommunity bank branches closed at a rate higher than community bank branches. Branches of noncommunity banks in micropolitan areas closed at a rate of 11.1 percent, compared with an 8.7 percent closure rate for community bank branches. In rural areas, branches closed at a rate of 6.7 percent in the five years ending June 30, 2021. As in metropolitan areas, community banks closed branches at a higher rate (7.2 percent) than noncommunity banks (5.5 percent). Table 6 The Number of Branches in All Census Groups Has Declined Over The Last Five Years Census Group Metropolitan Micropolitan Rural All All Banks Noncommunity Banks Community Banks All Banks Noncommunity Banks Community Banks All Banks Noncommunity Banks Community Banks All Banks Noncommunity Banks Community Banks 2016 2017 2018 2019 2020 2021 % Change 2016–2021 72,889 52,749 20,140 10,129 4,365 5,764 8,806 2,409 6,397 91,824 59,523 32,301 71,213 51,887 19,326 9,931 4,309 5,622 8,695 2,389 6,306 89,839 58,585 31,254 69,731 50,985 18,746 9,755 4,204 5,551 8,579 2,311 6,268 88,065 57,500 30,565 68,301 50,127 18,174 9,592 4,076 5,516 8,489 2,293 6,196 86,382 56,496 29,886 67,200 49,622 17,578 9,452 4,041 5,411 8,388 2,310 6,078 85,040 55,973 29,067 64,451 47,176 17,275 9,145 3,882 5,263 8,212 2,277 5,935 81,808 53,335 28,473 –11.6 –10.6 –14.2 –9.7 –11.1 –8.7 –6.7 –5.5 –7.2 –10.9 –10.4 –11.9 Source: FDIC Summary of Deposits June 30, 2016, to June 30, 2021. Note: Data are not adjusted for mergers. FDIC QUARTERLY 47 2022 • Volume 16 • Number 1 Branch Openings Were Most Prevalent in Texas in the Most Recent Reporting Period Texas was home to the most branch openings (121) among all states; the metropolitan area reporting the most branch openings (Houston-The Woodlands-Sugar Land); and the second-highest number of metropolitan areas reporting branch openings (15) in the year ending June 30, 2021. The Houston-The Woodlands-Sugar Land (Houston) metropolitan area—which has a relatively low number of total branches (1,411) for a large metropolitan area—had the highest number of branch openings among all metropolitan areas (50 branches) during the most recent SOD reporting period (Table 7). Branch opening activity was also prominent in the New York-Newark-Jersey City, NY-NJ-PA (New York City) metropolitan area, which reported the second-highest number of branch openings and the highest number of branch closings among metropolitan areas during the most recent SOD reporting period. The New York City metropolitan area reported 44 branch openings, with an equal number of branch openings (22) in the states of New York and New Jersey, and 257 branch closures for a net decline of 213 branches during the year ending June 30, 2021. The reduction in branches in the New York City metropolitan area was led by closures in New York County, New York (42 branches), Bergen County, New Jersey (27), and Nassau County, New York (23). Despite the net reduction in branches, the New York metropolitan area still had the largest number of branches (4,697) among metropolitan areas as of June 30, 2021 (Table 8). Table 7 The Houston Metropolitan Area Had the Highest Number of Branch Openings Metropolitan Area Name Number of Branches Opened Houston-The Woodlands-Sugar Land, TX (Houston) New York-Newark-Jersey City, NY-NJ-PA (New York) Dallas-Fort Worth-Arlington, TX (Dallas) Boston-Cambridge-Newton, MA-NH (Boston) Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (Philadelphia) 50 44 34 30 30 Source: FDIC Summary of Deposits, June 30, 2020, to June 30, 2021. Note: Table depicts top five metropolitan areas ranked by number of branch openings. Table 8 The New York Metropolitan Area Had the Highest Number of Branch Closures Metropolitan Area Name New York-Newark-Jersey City, NY-NJ-PA (New York) Chicago-Naperville-Elgin, IL-IN-WI (Chicago) Washington-Arlington-Alexandria, DC-VA-MD-WV (Washington) Los Angeles-Long Beach-Anaheim, CA (Los Angeles) Atlanta-Sandy Springs-Alpharetta, GA (Atlanta) Source: FDIC Summary of Deposits, June 30, 2020, to June 30, 2021. Note: Table depicts top five metropolitan areas ranked by number of branch closures. 48 FDIC QUARTERLY Number of Branches Closed 257 131 116 114 82 2021 SUMMARY OF DEPOSITS HIGHLIGHTS Of the metropolitan areas with the highest number of branch closures, only two areas had disproportionately high branch closures (in the sense that the area’s share of U.S. branch closures exceeded its share of U.S. branches). The share of branch closures in the Washington-Arlington-Alexandria, DC-VA-MD-WV (Washington) metropolitan area and the Atlanta-Sandy Springs-Alpharetta, GA (Atlanta) metropolitan area both exceeded the share of total branches in these areas. In each area, however, one or two institutions drove the high number of closures. For example, branch closures in the Washington metropolitan area represented 3 percent of branch closings among all metropolitan areas nationwide while branches in this metropolitan area represented 2 percent of total branches in metropolitan areas nationwide. Of the 25 banks that closed branches in the Washington metropolitan area, two banks accounted for more than half (51 percent) of the 116 branch closures. Similarly, branch closures in the Atlanta metropolitan area represented 2 percent of branch closures in metropolitan areas while branches in this area represented 1.8 percent of branches in metropolitan areas nationwide. While 17 banks closed branches in the Atlanta metropolitan area, two banks were responsible for 62 percent of branch closures in this area. Community Banks Continued to Serve Less-Populated Areas Community banks continued to operate most of the branches in both rural areas and micropolitan areas. The share of community bank branches in micropolitan areas has increased over the past five years, up from 56.6 percent in the year ending June 30, 2017, to 57.6 percent in the year ending June 30, 2021. Similarly, the share of branches operated by community banks in rural areas declined from 72.5 percent in the year ending June 30, 2017, to 72.3 percent in the year ending June 30, 2021. Brick-and-Mortar Branches Led the Overall Reduction in the Number of Branches The closings of brick-and-mortar branches—the most prevalent branch service type— contributed most to the overall decline in the number of branches during the most recent SOD reporting period. As shown in Table 9, full-service brick-and-mortar branches represented more than 92.5 percent of all branches.11 Because of the large number of brickand-mortar branches, this group experienced the lowest percentage decline (3 percent or 2,337 branches) among branch types during the year ending June 30, 2021. The proportion of brick-and-mortar branches increased slightly from 91.8 percent to 92.5 percent year over year despite the decline in the number of branches. The rate of decline in the number of full-service retail branches, the second-largest category among branch service types, was the highest of all branch service types at 16.8 percent. As a result, the proportion of full-service retail branches declined from 4.7 percent of all branch service types to 4.1 percent of all branch service types. Home banking and limited-service branches declined at faster rates in 2021 when compared with closure rates reported in 2020, but the proportion of branches in this category remained relatively stable. 11 The number of brick-and-mortar branches was 75,674 as of the most recent reporting period, which, divided by the total number of branches (81,808), yields 92.5 percent. The SOD survey collects information on the service type of each branch • f ull-service brick-and-mortar—locations owned or leased by a bank at which customers can open and close accounts, apply for loans, deposit and withdraw funds, and receive other banking services • f ull-service retail—full-service branches in a retail facility such as a store or supermarket • home banking—full-service branches that customers can access on a website or by telephone • l imited-service—branches that exist for the sole purpose of cashing payroll checks or conducting administrative services for the bank, or that accept deposits but do not provide any other services. See pages 31-32 of the Summary of Deposits reporting instructions, https://www.fdic.gov/regulations/resources/call/ sod/sod-instructions.pdf. FDIC QUARTERLY 49 2022 • Volume 16 • Number 1 Table 9 Full-Service Brick-and-Mortar Branch Closures Led the Overall Reduction in Branches Full-Service, Brick-and-Mortar Change, number Change, percent Full-Service, Retail Change, number Change, percent Full-Service, Home Banking* Change, number Change, percent Limited-Service Branches Change, number Change, percent All Branches Change, number Change, percent 2016 2017 2018 2019 2020 2021 83,236 –1,059 –1.3 5,014 –247 –4.7 179 0 0.0 3,395 –132 –3.7 91,824 –1,438 –1.5 81,760 –1,476 –1.8 4,706 –308 –6.1 189 10 5.6 3,184 –211 –6.2 89,839 –1,985 –2.2 80,425 –1,335 –1.6 4,441 –265 –5.6 192 3 1.6 3,007 –177 –5.6 88,065 –1,774 –2.0 79,054 –1,371 –1.7 4,250 –191 –4.3 194 2 1.0 2,884 –123 –4.1 86,382 –1,683 –1.9 78,011 –1,043 –1.3 4,002 –248 –5.8 191 –3 –1.5 2,768 –116 –4.0 84,972 –1,410 –1.6 75,674 –2,337 –3.0 3,329 –673 –16.8 203 12 6.3 2,602 –166 –6.0 81,808 –3,164 –3.7 Source: FDIC Summary of Deposits, June 30, 2016, to June 30, 2021. Note: Data are not adjusted for mergers. *Home banking branches are sometimes called “cyber branches” because they are typically accessed online. Average Deposits per FDIC-Insured Institution and Branch Increased Average deposits per institution increased 13.2 percent in the year ending June 30, 2021. This growth rate is slightly above the five-year (2016 to 2020) average growth rate in deposits per institution of 13.1 percent as lower growth rates in 2018 and 2019 offset the unprecedented growth rate in 2020. However, deposit growth per institution remains well above growth rates reported in 2018 and 2019. Growth in average deposits per branch was higher than the five-year average growth rate, but lower than the growth rate reported during the year ending June 30, 2020. Average deposits per branch increased at an average rate of 10.2 percent between 2016 and 2020, and, in 2021, average deposits per branch increased 14.9 percent. Most Counties in the United States Have at Least One Branch of an FDIC-Insured Institution Branch locations are geographically widespread across the United States albeit with varying density, and most counties in the United States (98.6 percent) have a branch presence as of the most recent SOD reporting period. Unsurprisingly, the counties with no branch presence are sparsely populated, with populations ranging from 90 to approximately 8,100 residents.12 Of all U.S. counties, 19.3 percent have only a community bank branch presence. Texas and Kansas have the highest number of counties with only a community bank branch presence. Three out of four states have at least one county with only a community bank branch presence, underscoring the important role that community banks play in serving their communities. 12 References population estimates as of July 2020 from the U.S. Census Bureau. Population data are not available for all counties without a branch presence. 50 FDIC QUARTERLY 2021 SUMMARY OF DEPOSITS HIGHLIGHTS Minority Depository Institutions Continued to Serve an Important Role, Supported by a MergerAdjusted Net Gain in Branches Minority depository institutions (MDIs) play an important role in creating jobs, growing small businesses, and building wealth in low- and moderate-income communities.13 MDI banks and branches tend to support economic growth in low- and moderate-income communities. MDIs are primarily located in areas characterized by dense populations, with 89 percent of MDI branches located in a metropolitan area. Like community banks, MDIs typically have smaller geographic footprints than noncommunity banks and rely on core deposits to fund loan growth. Most MDIs also met the FDIC’s definition of a community bank as of June 30, 2021.14 Of the 144 banking institutions identified as MDIs as of that date, 122 met the FDIC’s definition of a community bank. The number of branches operated by MDIs declined slightly during the most recent SOD reporting period. Collectively, MDIs operated 1,537 branches as of June 30, 2021, compared with 1,540 branches a year ago. This 0.2 percent decline in the number of branches operated by MDIs was far less than the 3.8 percent decline in the number of branches operated by the U.S. banking industry. The net decline in branches resulted from changes in MDI branch networks including 44 branch openings and 47 branch closures during the year ending June 30, 2021 (Table 10). Institutions designated as Hispanic MDIs reported the highest number of net branch closings. Black MDIs also reported a net decline in branches, as closings outpaced openings. Asian MDIs reported a net opening of branches and multiracial MDIs reported no change. Table 10 Hispanic Minority Depository Institutions Opened the Most Offices in the Past Year on a Merger-Adjusted Basis Designation Number of Openings Number of Closings Net Openings/Closings Not Adjusted for Mergers Asian Black Hispanic Native American Multiracial Total 34 1 3 6 0 44 Asian Black Hispanic Native American Multiracial Total 11 2 28 2 0 43 17 2 28 0 0 47 Adjusted for Mergers 17 1 18 0 0 36 17 –1 –25 6 0 –3 –6 1 10 2 0 7 Sources: FDIC Summary of Deposits, June 30, 2020, to June 30, 2021, and FDIC MDI List. Note: MDI is Minority Depository Institution. 13 The FDIC’s Statement of Policy Regarding Minority Depository Institutions defines an MDI as a federally insured depository institution for which (1) 51 percent or more of the voting stock is owned by minority individuals, or (2) a majority of the board of directors is minority and the community that the institution serves is predominantly minority. See https://www.fdic.gov/news/board-matters/2021/2021-06-15-notice-sum-b-fr.pdf, Federal Deposit Insurance Corporation, Policy Statement Regarding Minority Depository Institutions (2002). For more information about MDIs, see FDIC, “2019 Minority Depository Institutions: Structure, Performance, and Social Impact,” https://www.fdic.gov/ regulations/resources/minority/2019-mdi-study/full.pdf. 14 Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 requires the Secretary of the Treasury and the federal financial institution regulatory agencies to consult on the best ways to achieve the goal of preserving minority ownership of MDIs, most of which are also community banks. For more information about section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, see https://uscode.house.gov/view. xhtml?req=granuleid:USC-prelim-title12-section1463&num=0&edition=prelim - Public Law 101–73, title III, § 308, Aug. 9, 1989, 103 Stat. 353, as amended by Public Law 111–203, title III, § 367(4), July 21, 2010, 124 Stat. 1556, codified at 12 U.S.C. 1463 note. FDIC QUARTERLY 51 2022 • Volume 16 • Number 1 Focusing on the MDIs in operation as of June 30, 2021, and adjusting for the effects of mergers provides a different perspective on the branching trends. After adjusting for the effects of mergers, MDIs increased the number of branches they operated, from 1,530 to 1,537. For MDIs designated as community banks, the merger-adjusted increase in the number of branches operated was more pronounced, from 714 branches on a mergeradjusted basis as of the year ending June 30, 2020, to 745 branches as of the most recent SOD reporting period. Branch trends at MDI community banks thus differed from other community banks. On a merger-adjusted basis, community banks in total had a 0.3 percent reduction in branches. Non-MDI community banks had a 1.1 percent reduction in branches, but community bank MDIs had a 4.3 percent increase in branches. Advancements in Technology Supported the Ability to Perform Bank Transactions Remotely Various factors are likely contributing to the ongoing reduction in the number of branches. The growing prevalence of mobile banking, which increased in importance during the pandemic, may have played a role in the accelerated branch reduction rate reported in the year ending June 30, 2021. While not all bank transactions can be performed remotely and access to banking services remains a challenge for underserved communities, many bank customers, businesses, and governmental entities have increasingly used online and mobile banking applications to conduct routine banking transactions. These platforms were particularly helpful during the pandemic to support social distancing. Bank customers are performing more bank transactions remotely, many banks that operate with no physical branch locations have reported elevated deposit growth in recent years, and the dollar amount and number of electronic funds payments continues to grow. Bank customers are increasingly performing routine banking transactions using online or mobile banking applications. Results from the FDIC’s 2019 survey on household use of banking and financial services reflect a decline in the percentage of households that rely on bank tellers (from 28.2 percent to 21 percent) and an increase in the percentage of households that rely on mobile banking applications for bank account access (from 9.5 percent to 34 percent) between 2015 and 2019.15 In addition, a survey of mobile banking application use conducted by S&P Global Market Intelligence in 2021 shows that more than half of mobile banking customers increased their use of mobile banking applications and reduced the number of branch visits during the pandemic.16 Further, according to S&P’s survey, since the beginning of the pandemic, many mobile application users took advantage of features such as peer-to-peer money payments and photo-based remote check deposit for the first time. Although some banks operate home banking branches, also called cyber branches, and branches of other service types, some banks operate no physical branches. These banks, called “online-only banks” for this discussion, have reported strong deposit growth in recent years despite the absence of brick-and-mortar branches.17 As of June 30, 2021, the FDIC insured six online-only banks, and five (81.8 percent) were noncommunity banks. Deposits for these banks totaled $152.3 billion, an increase of 5.4 percent during the year ending June 30, 2021, and an increase of 18.6 percent compared with the pre-pandemic level (the year ending June 30, 2019). 15 FDIC, “How America Banks: Household Use of Banking and Financial Services, 2019 FDIC Survey,” https://www.fdic. gov/analysis/household-survey/index.html. 16 S&P 2021 U.S. Mobile Banking Market Report. 17 Online-only banks are defined as banks that meet each of the following criteria: the bank does not belong to a multibank holding company; the bank operates only a main branch and no additional branches; and the main branch is listed as a cyber branch. 52 FDIC QUARTERLY 2021 SUMMARY OF DEPOSITS HIGHLIGHTS The volume and number of automated clearinghouse (ACH) payments continue to rise as bank customers and governmental entities increasingly use remote banking applications to meet financial needs (Chart 4, Chart 5).18 The ACH network supports electronic funds payments to and from bank accounts, enabling customers to perform many routine banking transactions remotely. The number of ACH payments processed in first quarter 2021 was the highest on record, with 2.7 billion payments processed, including 110 million economic impact payments distributed by the U.S. government. The level of ACH payments, including direct deposits, consumer bill pay, person-to-person, and business-to-business payments, has continued to trend upward over the past ten years. Compared with first quarter 2020, the number of ACH payments increased 9.9 percent (up 655 million) and total dollar volume of ACH payments increased 24.6 percent, including a 28.7 percent increase in business-to-business ACH payments. Chart 4 The Number of Automated Clearinghouse Payments Continues to Rise Payment Volume Number of Payments (Billions) Percentage Change Percent 30 12 25 10 20 8 15 6 10 4 5 2 0 2014 2015 2016 2017 2018 2019 2020 2021 0 Source: Nacha. Note: Data are totals from third quarter of the previous year to second quarter of the year shown. Chart 5 The Volume of Automated Clearinghouse Payments Rose Sharply in 2021 Dollar Volume Payments (Trillions) Percentage Change Percent 80 20 70 18 16 60 14 50 12 40 10 30 8 6 20 4 10 0 2 2014 2015 2016 2017 2018 2019 2020 2021 0 Source: Nacha. Note: Data are totals from third quarter of the previous year to the second quarter of the year shown. 18 All ACH payment data are derived from Nacha, formerly known as the National Automated Clearinghouse Association. FDIC QUARTERLY 53 2022 • Volume 16 • Number 1 The U.S. government delivers most of its payments to the public electronically using ACH or direct deposit payments, eliminating the need to visit a brick-and-mortar branch or automated teller machine to cash or deposit a physical check. These ACH payments include 99.5 percent of federal salaries, 99 percent of Social Security benefits, 90 percent of tax refunds, and 79 percent of economic impact payments.19 The growth of ACH payments that flow directly into the banking system supports deposit growth in the banking industry in a way that does not depend on the number or location of physical branches. Conclusion Total deposits in domestic branches of FDIC-insured institutions continued to grow at a rate that exceeded the pre-pandemic average but was lower than the extraordinarily high growth rate reported as of June 30, 2020. Continued government payments to consumers and businesses, and fiscal and monetary policy responses to the pandemic helped support the elevated deposit growth rate during the year ending June 30, 2021. Growth in total deposits was widespread, reflecting increased deposit holdings for community banks and noncommunity banks; banks of different asset size groups; banks with a wide variety of lending specializations; and banks in metropolitan, micropolitan, and rural areas. The net number of branches nationwide continued to decline. Community banks not only continued to operate more branches than noncommunity banks in rural and micropolitan areas but also closed branches at slower rates in those areas. The relatively large presence of community banks in rural and micropolitan areas reflects the continued importance of community banks in serving local communities. MDIs, primarily a subset of community banks, continued to serve their communities as well. MDIs were among the few subgroups of the banking industry that reported a net merger-adjusted addition of branches during the most recent SOD reporting period. Bank customers have continued to use mobile and internet banking platforms and applications at an increasing rate to perform banking transactions, potentially reducing the need for physical branches. Authors: Caitlyn R. Kasper Financial Analyst Division of Insurance and Research Camille A. Keith Economic Analyst Division of Insurance and Research Erica J. Tholmer Senior Financial Analyst Division of Insurance and Research Anthony M. Waltrich Economic Research Assistant Division of Insurance and Research 19 For more information about direct deposits of government payments, see https://www.nacha.org/content/ government-affairs. 54 FDIC QUARTERLY