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Quarterly Banking Profile Second Quarter 2009 INSURED INSTITUTION PERFORMANCE ■ Higher Loss Provisions Lead to a $3.7 Billion Net Loss ■ More Than One in Four Institutions Are Unprofitable ■ Charge-Offs and Noncurrent Loans Continue to Rise ■ Net Interest Margins Show Modest Improvement ■ Industry Assets Decline by $238 Billion The Industry Posts a Net Loss for the Quarter Noninterest Income Grows 10.6 Percent Year-Over-Year Burdened by costs associated with rising levels of troubled loans and falling asset values, FDIC-insured commercial banks and savings institutions reported an aggregate net loss of $3.7 billion in the second quarter of 2009. Increased expenses for bad loans were chiefly responsible for the industry’s loss. Insured institutions added $66.9 billion in loan-loss provisions to their reserves during the quarter, an increase of $16.5 billion (32.8 percent) compared to the second quarter of 2008. Quarterly earnings were also adversely affected by writedowns of asset-backed commercial paper, and by higher assessments for deposit insurance. Almost two out of every three institutions (64.4 percent) reported lower quarterly earnings than a year ago, and more than one in four (28.3 percent) reported a net loss for the quarter. A year ago, the industry reported a quarterly profit of $4.7 billion, and fewer than one in five insti tutions (18 percent) were unprofitable. The average return on assets (ROA) was -0.11 percent, compared to 0.14 percent in the second quarter of 2008. In addition to the $16.5-billion increase in loss provisions, the industry reported a $3.3 billion increase in extraordinary losses and a $1.7 billion (1.7 percent) year-over-year increase in noninterest expenses. The extraordinary losses stemmed from asset-backed commercial paper writedowns, while the increased noninterest expenses primarily reflected higher deposit insurance assessments. These negative factors were partially offset by higher noninterest income (up $6.5 billion, or 10.6 percent), increased net interest income (up $3.4 billion, or 3.5 percent), and a $1.5-billion reduction in realized losses on securities and other assets. Gains on asset sales (up $4.5 billion), increased trading revenue (up $4.5 billion), and higher servicing fees (up $3.6 billion) were the largest contributors to the year-over-year improvement in noninterest income. Chart 1 Chart 2 The Industry Posted Its Second Quarterly Loss in the Past 18 Years Higher Loss Provisions Still Weigh Heavily on Industry Earnings $ Billions 60 2nd Quarter 2009 vs. 2nd Quarter 2008 ($ Billions) 18 50 40 30 34.0 33.2 34.7 32.6 16 36.9 38.0 38.0 35.3 35.6 36.8 14 28.7 20 12 19.3 10 4.7 0.9 0.5 0 8 -3.7 4 2 -40 0 -37.3 1 FDIC Quarterly 2 3 2005 4 1 2 3 4 2006 1 2 3 2007 4 1 2 3 2008 4 6.5 6 Securities and Other Gains/Losses, Net Net Operating Income -30 1 2 2009 1 Negative Factors Positive Factors 10 5.5 -10 -20 16.5 3.4 3.3 1.5 1.7 Increase in Increase in Decline in Increase in Increase in Increase in Net Interest Noninterest Realized Losses Loan Loss Extraordinary Noninterest Income Income on Securities Provisions Losses Expense 2009, Volume 3, No. 3 loans were $4.6 billion (84.5 percent) higher than a year earlier, and the annualized net charge-off rate on credit card loans reached a record 9.95 percent in the second quarter. Net charge-offs of real estate construction and development loans were up by $4.2 billion (117.0 percent), and charge-offs of loans secured by 1–4 family residential properties were $4.0 billion (41.1 percent) higher than a year ago. Margins Improve at a Majority of Institutions Average net interest margins (NIMs) improved slightly from first quarter levels, as average funding costs fell more rapidly than average asset yields. The average margin increased to 3.48 percent from 3.39 percent in the first quarter and 3.37 percent in the second quarter of 2008. The consecutive-quarter improvement was relatively broad-based: more than half (56.5 percent) of all institutions reported higher NIMs than in the first quarter. However, the year-over-year improvement was concentrated among larger institutions. Only 45.3 percent of insured institutions reported year-over-year NIM improvement. Despite the widening in margins, net interest income growth has been limited by recent shrinkage in earning asset portfolios. Interest-earning assets declined by $149.6 billion during the second quarter, following a $163.7 billion decline in the first quarter. In the 12 months ended June 30, the industry’s earning assets increased by only $18.3 billion (0.2 percent). Noncurrent Loan Rate Rises to Record Level The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) increased for a 13th consecutive quarter, and the percentage of total loans and leases that were noncurrent reached a new record. Noncurrent loans and leases increased by $41.4 billion (14.3 percent) during the second quarter, led by 1–4 family residential mortgages (up $15.4 billion, or 12.7 percent), real estate construction and development loans (up $10.2 billion, or 16.6 percent), and loans secured by nonfarm nonresidential real estate properties (up $7.1 billion, or 29.2 percent). Noncurrent home equity loans and junior lien mortgages fell for the first time in three years, declining by $1.7 billion and $1.5 billion, respectively. Noncurrent levels rose in all other major loan categories. Although the increase in total noncurrent loans was almost onethird smaller than the $59.7 billion increase in the first quarter, the average noncurrent rate on all loans and leases rose from 3.76 percent to 4.35 percent. This is the highest level for the noncurrent rate in the 26 years that insured institutions have reported noncurrent loan data. On a more positive note, loans that were 30–89 days past due declined by $16.7 billion (10.6 percent). Net Charge-Off Rate Sets a Quarterly Record Net charge-offs continued to rise, propelling the quarterly net charge-off rate to a record high. Insured institutions charged-off $48.9 billion in the second quarter, compared to $26.4 billion a year earlier. The annualized net charge-off rate in the second quarter was 2.55 percent, eclipsing the previous quarterly record of 1.95 percent reached in the fourth quarter of 2008. The $22.5 billion (85.3 percent) year-over-year increase in net charge-offs was led by loans to commercial and industrial (C&I) borrowers, which increased by $5.3 billion (165.0 percent). Net charge-offs of credit card Chart 3 Chart 4 Provision Expenses Have Been Growing in Significance for Two Years Margins Improved Slightly in the Second Quarter Quarterly Net Interest Margin (Percent) 4.5 Loan Loss Provisions (Percent of Quarterly Net Operating Revenue*) 60 50 Assets < $1 Billion 4.0 40% 40 3.60% 3.5 30 3.47% 20 3.0 10 0 Assets > $1 Billion 2001 2002 2003 2004 2005 2006 2007 2008 2.5 2009 * Net operating revenue equals net interest income plus total noninterest income FDIC Quarterly 2 1 2 3 2005 4 1 2 3 2006 4 1 2 3 2007 4 1 2 3 2008 4 1 2 2009 2009, Volume 3, No. 3 Quarterly Banking Profile This is the largest quarterly decline in dollar terms in the 26 years that these data have been reported, and the largest percentage decline since the first quarter of 2004, when 30–89 day past due loans were one-third the current level. The decline in past due loans occurred across all major loan categories, but real estate loans accounted for 83.5 percent ($13.9 billion) of the total improvement. Restructured loans and leases that were in compliance with their modified terms increased by $13.7 billion (41.6 percent) at commercial and savings banks that file Call reports, as restructured 1–4 family residential real estate loans rose by $10.2 billion (55.4 percent). from 8.02 percent to 8.25 percent, while the total riskbased capital ratio rose from 13.42 percent to 13.76 percent. However, fewer than half of all institutions reported increases in their regulatory capital ratios. Only 43.2 percent reported increased leverage capital ratios, and 47.0 percent had increased total risk-based capital ratios. Insured institutions paid $6.2 billion in dividends in the quarter, about two-thirds less than the $17.7 billion in dividends paid in the second quarter of 2008. Industry Assets Decline for a Second Consecutive Quarter Total assets declined by $238.1 billion (1.8 percent), following a $303.2-billion decline in the first quarter. Loans and leases accounted for more than half of the decline ($125.5 billion, or 52.7 percent of the total), while the industry’s balances at Federal Reserve banks fell by $99.4 billion (a 20.4 percent decline). As was the case in the first quarter, much of the decline in industry assets was concentrated at a few large institutions. More than 57 percent of institutions increased their assets during the second quarter, and a similar majority increased their loan balances. Among the loan categories registering the largest declines during the quarter were C&I loans (down $67.7 billion, or 4.7 percent), 1–4 family residential mortgage loans (down $33.2 billion, or 1.6 percent), and real estate construction and development loans (down $31.0 billion, or 5.5 percent). Assets in trading accounts declined by $65.5 billion (7.9 percent). The industry’s total securities holdings increased by $130.6 billion (5.9 percent). Institutions Continue to Add to Reserves The industry’s reserves for loan losses increased by $16.8 billion (8.6 percent) during the second quarter, as loss provisions of $66.9 billion exceeded net chargeoffs of $48.9 billion. The ratio of reserves to total loans and leases set another new record, rising from 2.51 percent to 2.77 percent. However, the pace of reserve building fell short of the rise in noncurrent loans, and the industry’s ratio of reserves to noncurrent loans fell from 66.8 percent to 63.5 percent, the lowest level since the third quarter of 1991. Overall Capital Levels Register Improvement Equity capital increased by $32.5 billion (2.4 percent), raising the industry’s equity-to-assets ratio from 10.13 percent to 10.56 percent, the highest level since March 31, 2007. Average regulatory capital ratios increased as well. The leverage capital ratio increased Chart 5 Chart 6 Troubled Loans Increased at a Slower Rate in the Second Quarter $ Billions 350 $ Billions 110 Noncurrent Loan Growth Is Outpacing Growth in Reserves Coverage Ratio (Percent) Percent 180 160 300 90 Quarterly Change in Noncurrent Loans Quarterly Net Charge-Offs 70 140 250 120 200 50 150 30 80 Loan-Loss Reserves ($ Billions) 60 100 10 -10 100 50 1 FDIC Quarterly 2 3 2006 4 1 2 3 2007 4 1 2 3 2008 4 0 1 2 2009 3 40 20 Noncurrent Loans ($ Billions) 1 2 3 2006 4 1 2 3 2007 4 1 2 3 2008 4 1 2 2009 0 2009, Volume 3, No. 3 (4.9 percent), and deposits in interest-bearing accounts fell by $16.9 billion. Nondeposit liabilities declined by $337.3 billion (10.6 percent), as trading liabilities fell by $85.0 billion (23.7 percent), and FHLB advances dropped by $62.2 billion (8.9 percent). At the end of June, deposits funded 67.8 percent of the industry’s assets, the highest proportion since March 1998. Small Business Loan Balances Declined Over the Past 12 Months Annual data on loans to small businesses and farms indicate that the industry’s balances of these loans experienced shrinkage during the 12 months ended June 30 while loans to larger borrowers had a slight increase. Small C&I, agricultural, and nonresidential real estate loans1 declined by $14.8 billion (1.9 percent) between June 30, 2008, and June 30, 2009, compared to an increase of $2.2 billion (0.1 percent) in larger business and farm loans. “Problem List” Expands to 15-Year High The number of insured commercial banks and savings institutions reporting financial results fell to 8,195 in the quarter, down from 8,247 reporters in the first quarter. Thirty-nine institutions were merged into other institutions during the quarter, 24 institutions failed, and there were 12 new charters added. During the quarter, the number of institutions on the FDIC’s “Problem List” increased from 305 to 416, and the combined assets of “problem” institutions rose from $220.0 billion to $299.8 billion. This is the largest number of “problem” institutions since June 30, 1994, and the largest amount of assets on the list since December 31, 1993. Institutions Reduce Their Reliance on Nondeposit Funding Sources In contrast to the decline in industry assets, total deposits of insured institutions increased by $66.7 billion (0.7 percent). Deposits in foreign offices accounted for more than three quarters ($51.0 billion, or 76.5 percent) of the increase in deposits. Domestic office deposits increased by only $15.7 billion (0.2 percent), as deposits in large denomination (> $250,000) non-interestbearing transaction accounts increased by $42.0 billion Author: Ross Waldrop, Sr. Banking Analyst Division of Insurance and Research (202) 898-3951 C&I loans with original amounts of $1 million or less, loans secured by nonfarm nonresidential real estate with original amounts of $1 million or less, real estate loans secured by farmland with original amounts of $500 thousand or less, and agricultural production loans with original amounts of $500 thousand or less. 1 Chart 7 Chart 8 Quarterly Percent Change in Total Loans and Leases The Number of “Problem” Institutions Is at a 15-Year High All FDIC-Insured Institutions (Percent) 5 4 Number of Insured Institutions on the FDIC’s “Problem List” 450 Recessions 350 3 305 300 2 252 250 1 200 0 150 -1 100 50 -2 0 -3 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 FDIC Quarterly 416 400 4 171 48 50 1 2 3 2006 47 65 50 53 61 4 1 2 3 2007 76 4 90 1 117 2 3 2008 4 1 2 2009 2009, Volume 3, No. 3 Quarterly Banking Profile TABLE I-A. Selected Indicators, All FDIC-Insured Institutions* Return on assets (%)������������������������������������������������������������������������������������������������������ Return on equity (%)������������������������������������������������������������������������������������������������������� Core capital (leverage) ratio (%)������������������������������������������������������������������������������������ Noncurrent assets plus other real estate owned to assets (%)������������������������������������ Net charge-offs to loans (%)������������������������������������������������������������������������������������������ Asset growth rate (%)����������������������������������������������������������������������������������������������������� Net interest margin (%)��������������������������������������������������������������������������������������������������� Net operating income growth (%)���������������������������������������������������������������������������������� Number of institutions reporting������������������������������������������������������������������������������������� Commercial banks��������������������������������������������������������������������������������������������������� Savings institutions������������������������������������������������������������������������������������������������� Percentage of unprofitable institutions (%)�������������������������������������������������������������������� Number of problem institutions�������������������������������������������������������������������������������������� Assets of problem institutions (in billions)��������������������������������������������������������������������� Number of failed institutions������������������������������������������������������������������������������������������ Number of assisted institutions�������������������������������������������������������������������������������������� 2009** 0.04 0.38 8.25 2.77 2.24 0.01 3.43 -74.96 8,195 6,995 1,200 26.94 416 $300 24 0 2008** 0.36 3.55 7.89 1.40 1.16 8.47 3.35 -65.31 8,451 7,203 1,248 16.99 117 $78 4 0 2008 0.04 0.37 7.47 1.89 1.29 6.20 3.18 -90.42 8,305 7,086 1,219 24.67 252 $159 25 5 2007 0.81 7.75 7.97 0.95 0.59 9.89 3.29 -27.58 8,534 7,283 1,251 12.08 76 $22 3 0 2006 1.28 12.30 8.22 0.54 0.39 9.04 3.31 8.53 8,680 7,401 1,279 7.94 50 $8 0 0 2005 1.28 12.43 8.25 0.50 0.49 7.63 3.47 11.39 8,833 7,526 1,307 6.22 52 $7 0 0 2004 1.28 13.20 8.11 0.53 0.56 11.37 3.52 3.99 8,976 7,631 1,345 5.97 80 $28 4 0 * Excludes insured branches of foreign banks (IBAs) ** Through June 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending June 30. TABLE II-A. Aggregate Condition and Income Data, All FDIC-Insured Institutions 2nd Quarter 2009 8,195 2,092,896 1st Quarter 2009 8,247 2,114,672 2nd Quarter 2008 8,451 2,203,854 %Change 08Q2-09Q2 -3.0 -5.0 $13,301,455 4,651,381 2,012,095 1,086,525 535,760 672,882 1,364,911 1,037,110 398,233 58,350 516,334 2,903 7,625,183 210,973 7,414,210 2,336,756 33,963 431,459 3,085,068 $13,539,556 4,700,666 2,045,299 1,076,902 566,721 674,196 1,432,578 1,046,382 403,071 56,136 500,616 2,480 7,733,899 194,211 7,539,687 2,206,202 29,707 415,140 3,348,819 $13,300,518 4,794,433 2,154,127 1,019,215 626,520 646,905 1,489,931 1,069,473 396,041 58,426 586,289 2,515 7,996,037 144,412 7,851,624 2,017,365 18,901 481,432 2,931,196 0.0 -3.0 -6.6 6.6 -14.5 4.0 -8.4 -3.0 0.6 -0.1 -11.9 15.4 -4.6 46.1 -5.6 15.8 79.7 -10.4 5.2 Total liabilities and capital���������������������������������������������������������������������������������������������� Deposits������������������������������������������������������������������������������������������������������������������� Domestic office deposits��������������������������������������������������������������������������������� Foreign office deposits������������������������������������������������������������������������������������ Other borrowed funds��������������������������������������������������������������������������������������������� Subordinated debt��������������������������������������������������������������������������������������������������� All other liabilities���������������������������������������������������������������������������������������������������� Equity capital����������������������������������������������������������������������������������������������������������� 13,301,455 9,020,606 7,554,674 1,465,932 2,162,917 168,126 527,613 1,422,192 13,539,556 8,953,913 7,538,992 1,414,921 2,417,352 170,929 607,637 1,389,725 13,300,518 8,572,675 7,029,143 1,543,532 2,597,860 185,078 593,682 1,351,224 0.0 5.2 7.5 -5.0 -16.7 -9.2 -11.1 5.3 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***���������������������������������������������������������������������������������� 141,216 332,040 46,516 1,365,603 11,459,081 634,488 6,307,212 17,502,519 1,865,634 204,956,755 157,920 290,619 32,853 1,313,146 11,608,632 696,696 6,620,592 16,271,324 1,884,227 203,388,080 110,799 166,067 18,865 1,322,214 11,440,781 840,543 8,147,556 21,409,065 1,747,262 183,302,532 27.5 99.9 146.6 3.3 0.2 -24.5 -22.6 -18.2 6.8 11.8 (dollar figures in millions) Number of institutions reporting������������������������������������������������������������������������������������� Total employees (full-time equivalent)��������������������������������������������������������������������������� CONDITION DATA Total assets��������������������������������������������������������������������������������������������������������������������� Loans secured by real estate���������������������������������������������������������������������������������� 1-4 family residential mortgages��������������������������������������������������������������������� Nonfarm nonresidential����������������������������������������������������������������������������������� Construction and development Home equity lines��������������������������������������������������������������������������������������������� Commercial & industrial loans�������������������������������������������������������������������������������� Loans to individuals������������������������������������������������������������������������������������������������� Credit cards������������������������������������������������������������������������������������������������������ Farm loans��������������������������������������������������������������������������������������������������������������� Other loans & leases����������������������������������������������������������������������������������������������� Less: Unearned income������������������������������������������������������������������������������������������ Total loans & leases������������������������������������������������������������������������������������������������ Less: Reserve for losses����������������������������������������������������������������������������������������� Net loans and leases����������������������������������������������������������������������������������������������� Securities����������������������������������������������������������������������������������������������������������������� Other real estate owned������������������������������������������������������������������������������������������ Goodwill and other intangibles������������������������������������������������������������������������������� All other assets�������������������������������������������������������������������������������������������������������� INCOME DATA Total interest income������������������������������������������������������������������� Total interest expense����������������������������������������������������������������� Net interest income�������������������������������������������������������������� Provision for loan and lease losses�������������������������������������������� Total noninterest income������������������������������������������������������������� Total noninterest expense����������������������������������������������������������� Securities gains (losses)������������������������������������������������������������� Applicable income taxes������������������������������������������������������������� Extraordinary gains, net�������������������������������������������������������������� Net income���������������������������������������������������������������������������� Net charge-offs���������������������������������������������������������������������������� Cash dividends���������������������������������������������������������������������������� Retained earnings����������������������������������������������������������������������� Net operating income����������������������������������������������������������� First Half 2009 $280,368 81,460 198,907 127,731 136,118 196,675 884 4,819 -3,654 2,613 86,464 13,483 -10,871 6,244 First Half 2008 $343,169 152,034 191,136 87,580 121,485 188,419 -1,084 11,027 -498 24,012 46,012 31,718 -7,706 24,939 *** Call Report filers only. FDIC Quarterly %Change -18.3 -46.4 4.1 45.8 12.1 4.4 N/M -56.3 N/M -89.1 87.9 -57.5 N/M -75.0 2nd Quarter 2009 $138,698 38,741 99,957 66,876 67,454 99,379 -796 292 -3,625 -3,712 48,897 6,246 -9,958 424 2nd Quarter 2008 $164,881 68,305 96,576 50,371 60,991 97,708 -2,309 2,063 -366 4,750 26,386 17,747 -12,998 6,091 %Change 08Q2-09Q2 -15.9 -43.3 3.5 32.8 10.6 1.7 N/M -85.9 N/M N/M 85.3 -64.8 N/M -93.0 N/M - Not Meaningful. 5 2009, Volume 3, No. 3 TABLE III-A. Second Quarter 2009, All FDIC-Insured Institutions Asset Concentration Groups* Second quarter All Insured (The way it is...) Institutions Number of institutions reporting����������������������� 8,195 Commercial banks������������������������������������� 6,995 Savings institutions����������������������������������� 1,200 Total assets (in billions)������������������������������������ $13,301.5 Commercial banks������������������������������������� 11,895.1 Savings institutions����������������������������������� 1,406.4 Total deposits (in billions)��������������������������������� 9,020.6 Commercial banks������������������������������������� 8,077.2 Savings institutions����������������������������������� 943.4 Net income (in millions)������������������������������������ -3,712 Commercial banks������������������������������������� -3,694 Savings institutions����������������������������������� -18 Performance Ratios (annualized, %) Yield on earning assets������������������������������������ Cost of funding earning assets������������������������ Net interest margin������������������������������������ Noninterest income to assets��������������������������� Noninterest expense to assets������������������������� Loan and lease loss provision to assets���������� Net operating income to assets����������������������� Pretax return on assets������������������������������������ Return on assets����������������������������������������������� Return on equity����������������������������������������������� Net charge-offs to loans and leases���������������� Loan and lease loss provision to net charge-offs������������������������������������������ Efficiency ratio�������������������������������������������������� % of unprofitable institutions���������������������������� % of institutions with earnings gains���������������� Credit Card International Agricultural Commercial Banks Banks Banks Lenders 24 5 1,551 4,637 20 5 1,546 4,150 4 0 5 487 $484.8 $3,204.0 $170.1 $5,947.3 462.5 3,204.0 169.7 5,447.0 22.3 0.0 0.5 500.2 163.7 1,996.8 137.5 4,400.5 151.1 1,996.8 137.1 4,058.4 12.5 0.0 0.4 342.1 -873 -4,296 336 -2,429 -1,087 -4,296 337 -1,786 214 0 -1 -643 Mortgage Consumer Lenders Lenders 809 81 223 64 586 17 $933.2 $86.3 241.0 43.5 692.2 42.7 554.6 71.5 101.0 34.0 453.6 37.5 1,299 119 893 56 406 63 Other Specialized All Other <$1 Billion <$1 Billion 294 742 262 685 32 57 $36.0 $101.7 30.4 88.2 5.6 13.5 27.3 83.7 23.8 73.0 3.5 10.7 110 188 64 186 46 2 All Other >$1 Billion 52 40 12 $2,338.1 2,208.7 129.3 1,585.1 1,501.9 83.2 1,833 1,939 -105 4.83 1.35 3.48 2.01 2.96 1.99 0.01 -0.10 -0.11 -1.07 2.55 11.83 1.39 10.44 4.84 5.86 8.69 -0.92 -1.08 -0.73 -3.03 10.78 3.92 0.99 2.93 1.78 2.73 1.76 -0.10 -0.71 -0.54 -6.36 3.07 5.69 1.79 3.90 0.64 2.84 0.50 0.76 0.93 0.79 7.14 0.60 5.08 1.48 3.60 1.87 3.28 1.86 -0.16 -0.13 -0.16 -1.56 2.04 5.13 1.89 3.24 0.97 1.95 1.12 0.57 0.90 0.56 6.13 1.27 5.84 1.74 4.10 3.14 3.16 2.52 0.56 1.32 0.57 6.07 2.85 3.87 1.18 2.68 8.03 8.49 0.18 1.20 1.82 1.21 7.51 0.71 5.42 1.68 3.74 0.89 3.07 0.33 0.76 0.90 0.75 6.55 0.49 3.78 1.18 2.61 2.52 2.22 1.82 0.43 0.38 0.30 2.91 2.30 136.77 111.26 151.96 127.12 131.55 134.42 111.19 103.31 119.29 172.40 57.07 28.30 34.72 41.06 41.67 29.17 63.68 40.00 40.00 65.68 11.48 38.68 61.91 37.57 31.16 48.56 21.76 45.36 44.73 16.05 40.74 80.75 22.79 34.35 70.72 15.50 36.66 46.81 30.77 34.62 Structural Changes New charters��������������������������������������������� Institutions absorbed by mergers������������� Failed institutions�������������������������������������� 12 39 24 0 0 0 0 0 0 1 2 1 2 33 20 0 1 1 0 0 0 7 0 0 0 2 2 2 1 0 PRIOR Second quarterS (The way it was...) Return on assets (%)������������������������������� 2008 ������������������������������������� 2006 ������������������������������������� 2004 0.14 1.34 1.31 2.39 4.64 4.08 0.26 1.01 0.68 1.17 1.31 1.27 0.24 1.33 1.36 -1.46 1.07 1.21 0.82 1.79 1.54 1.82 2.76 1.28 0.99 1.02 1.10 0.12 1.29 1.33 Net charge-offs to loans & leases (%)���� 2008 ������������������������������������� 2006 ������������������������������������� 2004 1.32 0.35 0.58 5.87 3.43 5.08 1.27 0.59 0.99 0.26 0.17 0.18 1.00 0.17 0.32 1.82 0.13 0.11 1.75 0.92 1.15 0.66 0.56 0.41 0.29 0.18 0.29 0.94 0.19 0.31 * See Table IV-A (page 8) for explanations. FDIC Quarterly 6 2009, Volume 3, No. 3 Quarterly Banking Profile TABLE III-A. Second Quarter 2009, All FDIC-Insured Institutions Asset Size Distribution Second Quarter All Insured (The way it is...) Institutions Number of institutions reporting����������������������������� 8,195 Commercial banks������������������������������������������� 6,995 Savings institutions����������������������������������������� 1,200 Total assets (in billions)������������������������������������������ $13,301.5 Commercial banks������������������������������������������� 11,895.1 Savings institutions����������������������������������������� 1,406.4 Total deposits (in billions)��������������������������������������� 9,020.6 Commercial banks������������������������������������������� 8,077.2 Savings institutions����������������������������������������� 943.4 Net income (in millions)������������������������������������������ -3,712 Commercial banks������������������������������������������� -3,694 Savings institutions����������������������������������������� -18 Geographic Regions* Less than $100 $1 Billion Greater $100 Million to to than Million $1 Billion $10 Billion $10 Billion New York 3,010 4,487 582 116 996 2,682 3,780 445 88 524 328 707 137 28 472 $165.1 $1,348.6 $1,501.3 $10,286.5 $2,458.4 147.8 1,101.1 1,158.0 9,488.3 1,749.0 17.4 247.5 343.3 798.2 709.4 136.3 1,090.2 1,119.4 6,674.7 1,514.1 122.9 900.8 863.7 6,189.9 1,022.0 13.4 189.4 255.7 484.8 492.0 29 -266 -2,800 -675 -3,331 4 -155 -2,741 -801 -3,530 25 -110 -59 126 199 Atlanta 1,164 1,025 139 $3,495.1 3,345.2 149.9 2,505.6 2,395.0 110.5 -413 -200 -212 Chicago 1,685 1,387 298 $3,124.3 2,975.8 148.5 2,059.2 1,951.1 108.1 1,532 1,779 -247 Kansas City 1,914 1,812 102 $1,063.1 1,014.9 48.2 783.3 747.7 35.6 2,019 2,036 -17 San Dallas Francisco 1,680 756 1,558 689 122 67 $777.5 $2,383.0 651.5 2,158.8 126.0 224.3 587.1 1,571.3 503.8 1,457.6 83.3 113.7 494 -4,013 528 -4,305 -34 293 Performance Ratios (annualized, %) Yield on earning assets������������������������������������������ Cost of funding earning assets������������������������������ Net interest margin������������������������������������������ Noninterest income to assets��������������������������������� Noninterest expense to assets������������������������������� Loan and lease loss provision to assets���������������� Net operating income to assets����������������������������� Pretax return on assets������������������������������������������ Return on assets����������������������������������������������������� Return on equity����������������������������������������������������� Net charge-offs to loans and leases���������������������� Loan and lease loss provision to net charge-offs� Efficiency ratio�������������������������������������������������������� % of unprofitable institutions���������������������������������� % of institutions with earnings gains���������������������� 4.83 1.35 3.48 2.01 2.96 1.99 0.01 -0.10 -0.11 -1.07 2.55 136.77 57.07 28.30 34.72 5.64 1.81 3.82 1.28 3.88 0.70 0.06 0.19 0.07 0.55 0.89 125.49 80.91 27.14 39.80 5.54 1.97 3.57 1.00 3.31 1.04 -0.08 -0.07 -0.08 -0.79 1.10 135.64 75.89 27.75 32.34 5.18 1.84 3.34 1.34 3.31 1.87 -0.75 -0.81 -0.75 -7.02 2.17 126.39 68.28 34.88 28.01 4.66 1.18 3.49 2.25 2.86 2.16 0.13 -0.01 -0.03 -0.25 2.89 138.33 53.35 46.55 28.45 5.22 1.50 3.73 1.86 2.93 1.92 0.10 -0.48 -0.54 -4.34 2.90 122.59 55.43 28.41 34.94 4.58 1.33 3.25 2.22 2.77 2.08 0.02 -0.05 -0.05 -0.44 2.25 154.45 53.22 52.92 24.57 4.20 1.19 3.01 2.29 2.98 1.68 0.12 0.33 0.19 2.30 2.38 136.69 59.67 23.03 38.16 5.65 1.14 4.51 3.30 4.11 1.69 0.89 1.24 0.76 7.33 2.54 100.00 55.33 19.28 35.84 5.08 1.49 3.60 1.52 3.31 1.21 0.19 0.30 0.25 2.56 1.32 140.83 67.17 17.14 38.81 5.18 1.48 3.69 1.08 2.63 2.76 -0.69 -1.09 -0.68 -6.42 3.36 144.33 59.43 49.60 30.42 Structural Changes New charters��������������������������������������������������� Institutions absorbed by mergers������������������� Failed institutions�������������������������������������������� 12 39 24 10 12 3 0 22 17 1 4 3 1 1 1 0 9 1 6 7 8 2 6 4 0 9 3 3 7 1 1 1 7 PRIOR Second quarters (The way it was…) Return on assets (%)������������������������������������� 2008 ������������������������������������������� 2006 ������������������������������������������� 2004 0.14 1.34 1.31 0.57 1.02 0.98 0.53 1.26 1.17 0.25 1.34 1.46 0.07 1.36 1.32 0.76 1.28 1.08 0.16 1.32 1.40 0.11 1.09 1.36 0.91 1.63 1.53 0.59 1.29 1.31 -0.79 1.78 1.59 Net charge-offs to loans & leases (%)���������� 2008 ������������������������������������������� 2006 ������������������������������������������� 2004 1.32 0.35 0.58 0.30 0.15 0.23 0.47 0.15 0.23 1.00 0.20 0.45 1.53 0.42 0.68 1.30 0.56 0.85 1.14 0.15 0.32 1.27 0.23 0.41 1.31 0.37 0.76 0.65 0.22 0.39 1.80 0.54 0.61 * See Table IV-A (page 9) for explanations. FDIC Quarterly 7 2009, Volume 3, No. 3 TABLE IV-A. First Half 2009, All FDIC-Insured Institutions Asset Concentration Groups* First half All Insured (The way it is...) Institutions Number of institutions reporting����������������������������������������� 8,195 Commercial banks������������������������������������������������������� 6,995 Savings institutions����������������������������������������������������� 1,200 Total assets (in billions)������������������������������������������������������ $13,301.5 Commercial banks������������������������������������������������������� 11,895.1 Savings institutions����������������������������������������������������� 1,406.4 Total deposits (in billions)��������������������������������������������������� 9,020.6 Commercial banks������������������������������������������������������� 8,077.2 Savings institutions����������������������������������������������������� 943.4 Net income (in millions)������������������������������������������������������ 2,613 Commercial banks������������������������������������������������������� 4,513 Savings institutions����������������������������������������������������� -1,901 Performance Ratios (annualized, %) Yield on earning assets������������������������������������������������������ Cost of funding earning assets������������������������������������������ Net interest margin������������������������������������������������������ Noninterest income to assets��������������������������������������������� Noninterest expense to assets������������������������������������������� Loan and lease loss provision to assets���������������������������� Net operating income to assets����������������������������������������� Pretax return on assets������������������������������������������������������ Return on assets����������������������������������������������������������������� Return on equity����������������������������������������������������������������� Net charge-offs to loans and leases���������������������������������� Loan and lease loss provision to net charge-offs������������� Efficiency ratio�������������������������������������������������������������������� % of unprofitable institutions���������������������������������������������� % of institutions with earnings gains���������������������������������� Credit Other Card International Agricultural Commercial Mortgage Consumer Specialized All Other All Other Banks Banks Banks Lenders Lenders Lenders <$1 Billion <$1 Billion >$1 Billion 24 5 1,551 4,637 809 81 294 742 52 20 5 1,546 4,150 223 64 262 685 40 4 0 5 487 586 17 32 57 12 $484.8 $3,204.0 $170.1 $5,947.3 $933.2 $86.3 $36.0 $101.7 $2,338.1 462.5 3,204.0 169.7 5,447.0 241.0 43.5 30.4 88.2 2,208.7 22.3 0.0 0.5 500.2 692.2 42.7 5.6 13.5 129.3 163.7 1,996.8 137.5 4,400.5 554.6 71.5 27.3 83.7 1,585.1 151.1 1,996.8 137.1 4,058.4 101.0 34.0 23.8 73.0 1,501.9 12.5 0.0 0.4 342.1 453.6 37.5 3.5 10.7 83.2 -2,538 774 750 -4,918 2,599 75 124 409 5,338 -2,973 774 750 -1,549 1,262 -3 45 403 5,804 436 0 0 -3,369 1,338 78 78 5 -467 4.84 1.41 3.43 2.01 2.90 1.89 0.09 0.11 0.04 0.38 2.24 147.73 55.35 26.94 35.06 11.75 1.39 10.35 5.38 5.87 9.68 -1.19 -1.62 -1.04 -4.55 9.57 138.13 39.63 54.17 16.67 3.98 1.03 2.95 2.05 2.60 1.62 0.27 0.05 0.05 0.60 2.73 156.76 57.17 40.00 40.00 5.72 1.85 3.87 0.63 2.73 0.44 0.86 1.04 0.89 8.02 0.47 142.88 64.29 10.19 39.97 5.11 1.54 3.57 1.76 3.26 1.67 -0.11 -0.11 -0.16 -1.60 1.74 138.53 60.90 36.45 29.35 5.19 2.02 3.17 0.99 1.88 1.18 0.52 0.92 0.57 6.41 1.13 158.05 47.60 20.77 54.88 5.84 1.67 4.17 2.48 3.01 2.89 0.18 0.51 0.19 1.99 2.74 132.04 46.47 12.35 46.91 4.02 1.25 2.77 8.01 9.14 0.20 0.67 1.19 0.68 4.18 0.81 98.67 80.51 19.05 36.05 5.49 1.74 3.75 0.87 3.02 0.30 0.80 1.00 0.82 7.16 0.42 129.54 69.75 13.07 37.87 3.67 1.24 2.43 2.30 2.13 1.64 0.35 0.63 0.43 4.34 2.04 176.40 48.39 26.92 32.69 86.15 80.15 83.77 91.89 87.66 92.62 93.66 89.74 91.85 83.23 2.77 63.54 9.01 264.41 3.82 67.63 1.39 79.22 2.24 53.30 1.45 34.89 3.00 203.44 1.42 60.53 1.30 73.77 2.54 56.43 2.77 10.56 8.25 11.05 13.76 82.19 55.74 56.80 2.45 24.51 18.26 12.68 14.73 194.39 65.62 31.68 2.25 8.42 7.03 11.38 14.72 57.57 35.88 30.33 1.45 11.08 10.01 13.59 14.69 80.79 65.28 80.80 3.36 10.55 8.18 9.96 12.56 91.62 67.79 70.64 3.00 9.47 8.93 17.14 18.14 107.61 63.95 59.36 1.23 9.96 9.61 12.39 14.31 93.75 77.68 81.20 0.72 16.58 14.19 33.93 34.69 31.10 23.53 73.49 1.30 11.37 11.00 18.01 19.16 67.13 55.29 82.32 2.23 10.91 7.54 10.73 13.95 67.84 45.99 58.03 Structural Changes New charters��������������������������������������������������������������� Institutions absorbed by mergers������������������������������� Failed institutions�������������������������������������������������������� 25 89 45 0 0 0 0 0 0 1 6 3 5 75 38 1 2 2 0 0 0 15 1 0 1 4 2 2 1 0 PRIOR First halves (The way it was…) Number of institutions������������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 8,451 8,777 9,078 27 29 36 6 5 6 1,585 1,681 1,775 4,788 4,708 4,350 844 861 997 98 123 144 306 404 488 754 910 1,195 43 56 87 Total assets (in billions)����������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 $13,300.5 11,526.1 9,648.5 $450.1 376.8 334.4 $2,980.5 2,097.8 1,554.5 $165.7 146.6 135.7 $5,362.5 4,552.3 3,031.1 $1,376.1 1,765.2 1,402.0 $71.3 97.5 160.7 $32.8 45.3 57.1 $98.8 117.1 155.6 $2,762.6 2,327.6 2,817.4 Return on assets (%)��������������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 0.36 1.34 1.33 3.49 4.58 3.97 0.31 1.08 0.89 1.18 1.29 1.26 0.51 1.33 1.35 -0.84 1.06 1.22 1.04 2.00 1.58 2.28 0.88 1.36 1.01 1.02 1.10 0.12 1.27 1.29 Net charge-offs to loans & leases (%)�����������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 1.16 0.34 0.60 5.38 3.14 5.03 1.20 0.55 1.13 0.21 0.14 0.15 0.86 0.17 0.32 1.48 0.12 0.12 1.72 0.94 1.29 0.46 0.74 0.50 0.22 0.15 0.27 0.78 0.19 0.29 Noncurrent plus OREO to assets (%)������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 1.40 0.47 0.60 1.67 1.28 1.33 0.86 0.40 0.75 1.06 0.68 0.80 1.67 0.47 0.59 2.56 0.54 0.58 0.80 0.60 0.79 0.27 0.21 0.30 0.79 0.53 0.64 0.90 0.36 0.43 Equity capital ratio (%)�����������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 10.16 10.27 9.50 21.98 27.09 18.01 7.86 8.05 7.18 10.94 10.73 10.52 11.31 10.20 9.35 7.90 10.64 8.65 9.39 9.92 7.99 20.93 21.35 16.25 11.16 10.79 10.38 9.42 9.14 10.23 Condition Ratios (%) Earning assets to total assets�������������������������������������������� Loss Allowance to: Loans and leases�������������������������������������������������������� Noncurrent loans and leases�������������������������������������� Noncurrent assets plus other real estate owned to assets������������������������������� Equity capital ratio�������������������������������������������������������������� Core capital (leverage) ratio����������������������������������������������� Tier 1 risk-based capital ratio��������������������������������������������� Total risk-based capital ratio���������������������������������������������� Net loans and leases to deposits��������������������������������������� Net loans to total assets����������������������������������������������������� Domestic deposits to total assets�������������������������������������� * 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 their total loans and leases. Commercial Lenders - Institutions whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties exceed 25 percent of total assets. Mortgage Lenders - Institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets. Consumer Lenders - Institutions whose residential mortgage loans, plus credit-card loans, plus other loans to individuals, exceed 50 percent of total assets. Other Specialized < $1 Billion - Institutions with assets less than $1 billion, whose loans and leases are less than 40 percent of total assets. All Other < $1 billion - Institutions with assets less than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. All Other > $1 billion - Institutions with assets greater than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. FDIC Quarterly 8 2009, Volume 3, No. 3 Quarterly Banking Profile TABLE IV-A. First Half 2009, All FDIC-Insured Institutions Asset Size Distribution First half All Insured Less than (The way it is...) Institutions $100 Million Number of institutions reporting��������������������� 8,195 3,010 Commercial banks����������������������������������� 6,995 2,682 Savings institutions��������������������������������� 1,200 328 Total assets (in billions)���������������������������������� $13,301.5 $165.1 Commercial banks����������������������������������� 11,895.1 147.8 Savings institutions��������������������������������� 1,406.4 17.4 Total deposits (in billions)������������������������������� 9,020.6 136.3 Commercial banks����������������������������������� 8,077.2 122.9 Savings institutions��������������������������������� 943.4 13.4 Net income (in millions)���������������������������������� 2,613 139 Commercial banks����������������������������������� 4,513 96 Savings institutions��������������������������������� -1,901 43 Performance Ratios (annualized, %) Yield on earning assets���������������������������������� Cost of funding earning assets���������������������� Net interest margin���������������������������������� Noninterest income to assets������������������������� Noninterest expense to assets����������������������� Loan and lease loss provision to assets�������� Net operating income to assets��������������������� Pretax return on assets���������������������������������� Return on assets��������������������������������������������� Return on equity��������������������������������������������� Net charge-offs to loans and leases�������������� Loan and lease loss provision to net charge-offs���������������������������������������������� Efficiency ratio������������������������������������������������ % of unprofitable institutions�������������������������� % of institutions with earnings gains�������������� Geographic Regions* $100 Million $1 Billion Greater to to than $1 Billion $10 Billion $10 Billion New York 4,487 582 116 996 3,780 445 88 524 707 137 28 472 $1,348.6 $1,501.3 $10,286.5 $2,458.4 1,101.1 1,158.0 9,488.3 1,749.0 247.5 343.3 798.2 709.4 1,090.2 1,119.4 6,674.7 1,514.1 900.8 863.7 6,189.9 1,022.0 189.4 255.7 484.8 492.0 694 -3,420 5,199 -2,975 721 -3,033 6,729 -2,631 -27 -387 -1,530 -344 Atlanta Chicago 1,164 1,685 1,025 1,387 139 298 $3,495.1 $3,124.3 3,345.2 2,975.8 149.9 148.5 2,505.6 2,059.2 2,395.0 1,951.1 110.5 108.1 2,255 2,484 2,830 2,833 -575 -348 Kansas City 1,914 1,812 102 $1,063.1 1,014.9 48.2 783.3 747.7 35.6 3,524 3,485 39 San Dallas Francisco 1,680 756 1,558 689 122 67 $777.5 $2,383.0 651.5 2,158.8 126.0 224.3 587.1 1,571.3 503.8 1,457.6 83.3 113.7 -886 -1,789 729 -2,731 -1,615 942 4.84 1.41 3.43 2.01 2.90 1.89 0.09 0.11 0.04 0.38 2.24 5.68 1.87 3.80 1.27 3.87 0.60 0.16 0.28 0.17 1.34 0.75 5.61 2.04 3.57 0.98 3.22 0.89 0.09 0.16 0.10 1.04 0.93 5.26 1.91 3.36 1.23 3.11 1.67 -0.49 -0.47 -0.46 -4.31 1.78 4.66 1.23 3.42 2.26 2.82 2.06 0.17 0.18 0.10 0.99 2.56 5.27 1.58 3.69 1.91 2.84 2.03 0.10 -0.19 -0.24 -1.98 2.55 4.46 1.38 3.08 2.04 2.68 1.81 0.05 0.23 0.12 1.21 1.97 4.29 1.25 3.05 2.20 3.02 1.61 0.09 0.28 0.16 1.87 2.00 5.64 1.18 4.46 3.19 3.97 1.94 0.76 1.04 0.66 6.59 2.34 5.14 1.57 3.57 1.47 3.40 1.06 0.14 -0.13 -0.23 -2.30 1.13 5.22 1.52 3.70 1.46 2.52 2.47 -0.16 -0.33 -0.15 -1.51 3.01 147.73 127.22 137.28 136.47 149.87 147.60 155.52 155.00 124.21 143.99 143.97 55.35 26.94 35.06 80.06 25.75 40.53 74.34 26.34 33.12 66.96 34.88 23.54 51.64 41.38 25.86 53.51 26.81 38.86 54.25 49.57 23.63 57.84 22.02 39.17 54.55 17.97 36.00 66.24 15.36 39.40 52.58 51.72 26.46 86.15 91.33 91.65 90.45 84.72 85.08 84.48 86.52 87.60 90.46 87.16 2.77 63.54 1.48 62.78 1.56 48.65 2.00 47.47 3.14 68.00 2.99 94.96 2.52 55.10 2.89 57.89 2.61 64.16 1.80 59.57 3.23 63.45 2.77 10.56 8.25 11.05 13.76 82.19 55.74 56.80 2.03 12.46 12.02 17.81 18.88 75.30 62.13 82.52 2.94 9.95 9.47 12.92 14.10 84.83 68.58 80.76 3.43 10.62 9.14 12.12 13.46 89.82 66.97 74.04 2.67 10.60 7.90 10.55 13.68 80.62 52.31 50.72 1.81 12.53 9.37 12.46 14.57 85.70 52.78 54.43 3.08 10.97 7.44 9.68 12.95 82.37 59.05 64.25 2.87 8.55 7.11 9.70 12.92 75.84 49.99 51.96 3.13 10.80 9.15 10.35 13.04 88.53 65.23 66.40 2.43 9.96 8.82 11.65 13.39 85.29 64.40 74.74 3.14 10.64 9.21 13.94 15.99 82.53 54.42 44.51 Structural Changes New charters������������������������������������������� Institutions absorbed by mergers����������� Failed institutions������������������������������������ 25 89 45 22 34 4 0 46 35 1 7 5 2 2 1 1 18 2 10 12 14 5 19 7 0 20 5 5 17 2 4 3 15 PRIOR First halves (The way it was…) Number of institutions��������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 8,451 8,777 9,078 3,303 3,805 4,277 4,474 4,332 4,217 558 518 468 116 122 116 1,034 1,103 1,148 1,214 1,234 1,228 1,738 1,864 1,990 1,959 2,043 2,120 1,722 1,777 1,846 784 756 746 Total assets (in billions)������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 $13,300.5 11,526.1 9,648.5 $177.0 198.6 221.4 $1,333.3 1,269.5 1,172.2 $1,464.5 1,422.7 1,293.6 $10,325.7 8,635.3 6,961.4 $2,478.5 2,952.0 3,326.1 $3,397.0 2,861.6 2,041.3 $2,937.6 2,679.3 1,701.9 $989.0 825.3 760.3 $763.8 631.4 578.1 $2,734.6 1,576.6 1,240.8 Return on assets (%)����������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 0.36 1.34 1.33 0.67 0.99 0.99 0.66 1.18 1.17 0.50 1.34 1.47 0.30 1.37 1.34 0.90 1.29 1.15 0.24 1.32 1.37 0.43 1.09 1.37 1.15 1.62 1.52 0.76 1.30 1.33 -0.41 1.75 1.58 Net charge-offs to loans & leases (%)�� 2008 ����������������������������������� 2006 ����������������������������������� 2004 1.16 0.34 0.60 0.25 0.13 0.20 0.38 0.13 0.23 0.85 0.19 0.41 1.35 0.40 0.72 1.23 0.51 0.86 0.95 0.15 0.34 1.06 0.23 0.42 1.24 0.36 0.82 0.55 0.19 0.36 1.59 0.53 0.63 Noncurrent plus OREO to assets (%)��� 2008 ����������������������������������� 2006 ����������������������������������� 2004 1.40 0.47 0.60 1.20 0.70 0.83 1.57 0.52 0.62 1.77 0.45 0.55 1.33 0.47 0.60 0.92 0.42 0.61 1.43 0.29 0.42 1.26 0.51 0.73 1.69 0.82 0.63 1.35 0.64 0.67 1.86 0.62 0.65 Equity capital ratio (%)�������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 10.16 10.27 9.50 13.35 12.51 11.49 10.27 10.22 9.90 10.96 10.90 10.49 9.98 10.12 9.19 12.05 11.03 9.65 10.06 9.49 8.32 9.20 8.92 8.56 9.73 10.62 10.28 9.86 10.14 9.49 9.84 12.41 11.91 Condition Ratios (%) Earning assets to total assets������������������������ Loss Allowance to: Loans and leases������������������������������������ Noncurrent loans and leases������������������ Noncurrent assets plus other real estate owned to assets����������� Equity capital ratio������������������������������������������ Core capital (leverage) ratio��������������������������� Tier 1 risk-based capital ratio������������������������� Total risk-based capital ratio�������������������������� Net loans and leases to deposits������������������� Net loans to total assets��������������������������������� Domestic deposits to total assets������������������ * Regions: New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, U.S. Virgin Islands Atlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia Chicago - Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin Kansas City - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota Dallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, Texas San Francisco - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming FDIC Quarterly 9 2009, Volume 3, No. 3 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* June 30, 2009 All Insured Institutions Credit Card Banks International Agricultural Commercial Mortgage Banks Banks Lenders Lenders Consumer Lenders Other All Other All Other Specialized <$1 >$1 <$1 Billion Billion Billion Percent of Loans 30-89 Days Past Due All loans secured by real estate��������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 2.16 2.86 1.17 1.22 1.24 2.98 0.91 2.43 2.84 2.17 0.55 1.85 1.41 0.00 0.00 0.00 1.96 1.73 4.55 3.00 2.88 3.88 0.01 2.82 3.30 2.56 0.72 0.83 1.79 4.90 0.49 2.22 3.29 1.80 0.47 2.15 1.29 3.02 1.23 1.08 0.59 1.82 1.74 2.06 2.46 2.04 0.74 1.27 1.87 2.96 1.21 1.37 0.93 2.50 0.99 2.38 2.46 2.37 0.72 1.68 2.16 3.94 1.29 1.31 1.41 2.25 0.82 1.68 3.09 1.31 0.15 2.09 1.23 2.48 1.99 0.03 1.11 1.21 1.31 2.22 1.42 2.45 0.39 1.82 1.61 2.09 0.95 1.17 0.33 2.07 1.31 1.54 1.86 1.53 0.90 1.52 1.84 1.98 1.41 2.01 1.13 2.15 1.62 2.24 1.98 2.24 0.78 1.78 2.48 1.78 0.84 0.62 1.37 3.59 0.55 1.93 2.82 1.69 0.43 1.82 Percent of Loans Noncurrent** All real estate loans���������������������������������������������������������� Construction and development.................................. Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 5.64 13.45 2.88 3.13 1.73 6.79 2.79 2.20 3.56 1.35 1.52 4.35 2.13 0.00 0.00 0.00 1.84 2.81 5.05 3.67 3.56 4.45 0.02 3.41 7.76 9.01 3.20 2.39 1.82 12.07 4.83 2.81 4.63 2.10 2.52 5.64 2.11 8.76 2.49 1.76 0.76 1.43 2.18 0.95 3.40 0.81 0.78 1.75 5.43 13.76 2.77 3.52 1.31 5.94 2.20 1.33 3.11 1.01 1.12 4.21 4.39 16.30 2.80 2.35 1.94 4.42 1.53 1.24 3.66 0.61 0.30 4.16 1.46 6.16 1.43 1.21 0.72 1.98 0.60 1.61 1.64 1.60 0.13 1.46 2.88 7.50 2.09 3.01 0.47 2.87 2.56 0.68 2.30 0.61 0.83 2.34 1.98 5.74 2.39 1.97 0.88 1.57 1.86 0.79 1.40 0.77 1.04 1.76 6.49 11.98 4.24 2.19 2.64 8.16 2.55 1.03 3.07 0.48 1.70 4.50 Percent of Loans Charged-off (net, YTD) All real estate loans���������������������������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 1.73 4.42 0.50 0.81 2.70 1.50 2.13 5.26 8.77 2.99 1.06 2.24 1.90 0.00 0.00 0.00 0.00 2.78 14.35 9.89 9.26 14.30 0.01 9.57 2.71 1.46 0.35 0.43 3.18 3.42 2.48 4.41 7.22 3.21 1.30 2.73 0.33 2.15 0.33 0.15 0.35 0.22 1.12 0.94 8.20 0.51 0.00 0.47 1.57 4.51 0.53 0.97 1.95 1.05 1.81 3.35 9.37 2.28 1.11 1.74 1.03 5.01 0.65 0.85 3.18 0.76 1.18 3.24 9.58 1.52 0.81 1.13 1.37 2.50 0.13 0.00 1.84 0.85 4.79 3.22 5.31 2.55 1.46 2.72 0.31 1.09 0.12 0.94 0.72 0.21 0.56 2.36 13.57 0.41 1.85 0.81 0.29 0.95 0.22 0.19 0.47 0.25 0.71 0.93 4.05 0.84 0.40 0.42 2.34 4.71 0.31 0.36 3.91 1.94 1.31 2.66 7.33 1.50 1.03 2.04 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������������������������������������������������������ $4,651.4 535.8 1,086.5 213.5 672.9 2,012.1 1,364.9 1,037.1 398.2 638.9 574.7 7,628.1 $0.2 0.0 0.0 0.0 0.0 0.1 30.7 282.3 247.3 35.0 36.5 349.6 $590.7 12.0 33.5 40.7 143.4 312.1 249.7 187.9 53.1 134.8 168.1 1,196.4 $65.4 4.7 18.4 1.3 1.3 17.3 15.3 6.4 0.4 6.1 25.5 112.6 $2,741.4 452.6 910.9 144.5 332.3 850.6 801.5 337.2 51.4 285.8 245.0 4,125.2 $562.4 12.8 29.6 12.2 38.4 468.4 12.7 25.8 5.3 20.4 4.8 605.7 $21.1 0.7 0.9 0.1 10.4 9.0 5.1 42.2 9.4 32.8 1.2 69.6 $5.5 0.5 1.7 0.2 0.2 2.6 1.2 1.5 0.1 1.4 0.5 8.6 $40.5 2.7 9.8 0.7 1.6 22.8 5.7 6.6 0.2 6.4 4.2 57.0 $624.2 49.7 81.6 13.7 145.3 329.2 243.1 147.3 31.0 116.3 88.8 1,103.4 Memo: Other Real Estate Owned (in millions) All other real estate owned����������������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� 1-4 family residential������������������������������������������������� Farmland�������������������������������������������������������������������� GNMA properties������������������������������������������������������ 33,963.3 13,467.7 4,837.1 1,579.6 11,486.8 173.8 2,303.5 -29.7 0.0 0.2 0.0 0.1 0.0 0.0 2,452.0 19.0 128.0 42.4 1,548.6 0.0 580.0 498.7 176.5 140.2 22.4 119.7 39.3 0.6 25,602.3 11,910.8 4,199.5 1,358.9 6,536.5 124.7 1,461.2 2,741.2 903.8 103.9 34.0 1,437.0 1.0 261.4 40.7 17.0 3.5 0.7 18.8 0.7 0.0 46.2 13.8 13.3 0.0 17.9 1.1 0.0 311.5 75.5 87.3 22.0 119.4 7.0 0.2 2,300.5 351.4 161.2 99.2 1,688.7 0.0 0.1 * See Table IV-A (page 8) for explanations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 10 2009, Volume 3, No. 3 Quarterly Banking Profile TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution June 30, 2009 Geographic Regions* Less than $100 $1 Billion Greater All Insured $100 Million to to than Institutions Million $1 Billion $10 Billion $10 Billion New York Atlanta Chicago Kansas City Dallas San Francisco Percent of Loans 30-89 Days Past Due All loans secured by real estate������������������������������ Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 2.16 2.86 1.17 1.22 1.24 2.98 0.91 2.43 2.84 2.17 0.55 1.85 1.75 2.28 1.51 1.10 0.95 2.17 1.91 2.48 3.03 2.47 0.71 1.71 1.67 2.61 1.39 1.53 0.89 1.76 1.44 2.00 2.78 1.94 0.65 1.61 1.50 2.59 1.11 1.47 0.75 1.55 1.01 2.07 1.90 2.14 0.95 1.46 2.44 3.12 1.08 1.06 1.31 3.41 0.83 2.48 2.89 2.19 0.51 1.97 1.43 2.40 1.17 0.95 0.60 1.58 1.29 2.94 3.07 2.72 0.44 1.66 2.45 2.68 1.20 1.32 1.30 3.58 0.78 2.49 2.60 2.46 0.37 2.00 2.41 3.57 1.41 1.21 1.39 3.41 0.97 2.00 2.62 1.83 0.71 1.94 1.43 2.61 1.02 0.82 1.22 1.67 1.26 2.91 2.96 2.87 0.66 1.50 1.73 2.21 0.92 1.41 0.80 2.66 0.82 1.66 1.26 1.76 0.61 1.50 2.68 3.66 1.13 1.58 1.46 3.66 0.64 2.03 2.71 1.63 0.63 2.03 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��������������������������������������������� 5.64 13.45 2.88 3.13 1.73 6.79 2.79 2.20 3.56 1.35 1.52 4.35 2.69 8.00 2.69 2.54 1.11 1.95 2.51 1.11 3.06 1.08 0.87 2.36 3.64 10.79 2.38 2.89 1.08 2.42 2.10 0.89 2.42 0.77 0.88 3.20 5.10 15.24 2.53 4.08 1.03 3.38 2.31 1.17 1.72 0.98 0.72 4.21 6.32 13.84 3.33 2.88 1.84 8.13 2.95 2.36 3.67 1.44 1.65 4.61 3.41 12.15 2.91 1.93 0.74 2.95 2.70 3.23 3.93 1.98 1.09 3.14 6.25 12.99 3.21 4.43 2.27 7.44 2.15 1.38 2.72 0.96 0.91 4.58 6.80 16.61 3.55 4.01 1.62 9.35 2.56 1.44 3.24 0.95 2.12 5.00 5.89 12.55 2.49 1.91 2.01 9.80 2.06 2.13 3.02 1.40 0.62 4.07 3.82 7.40 1.64 3.15 0.59 4.80 1.64 0.71 1.34 0.55 0.96 3.03 6.13 18.88 2.58 2.46 1.32 6.76 4.98 2.67 3.97 1.92 2.90 5.08 Percent of Loans Charged-off (net, YTD) All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 1.73 4.42 0.50 0.81 2.70 1.50 2.13 5.26 8.77 2.99 1.06 2.24 0.59 2.67 0.38 0.43 0.75 0.34 1.46 1.37 12.71 0.89 0.00 0.75 0.82 2.82 0.33 0.51 0.63 0.49 1.38 1.77 9.89 1.14 0.62 0.93 1.62 5.44 0.56 1.09 0.98 0.77 1.96 3.32 6.73 2.07 1.00 1.78 2.00 4.65 0.57 0.79 2.99 1.80 2.24 5.63 8.87 3.26 1.11 2.56 0.69 2.85 0.43 0.62 0.82 0.48 3.12 8.12 9.45 5.73 0.61 2.55 2.03 3.98 0.42 0.94 3.57 1.69 1.33 3.55 8.32 2.12 0.75 1.97 1.98 5.26 0.83 0.99 1.98 1.95 1.79 3.26 7.83 1.89 1.02 2.00 1.61 3.47 0.46 0.39 3.46 1.06 2.41 6.57 10.33 3.43 0.57 2.34 1.06 2.93 0.29 0.92 1.26 0.54 1.09 1.78 4.55 1.09 1.05 1.13 2.35 8.18 0.51 0.76 3.45 2.26 3.34 5.11 7.70 3.49 2.34 3.01 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��������������������������������������������� $4,651.4 535.8 1,086.5 213.5 672.9 2,012.1 1,364.9 1,037.1 398.2 638.9 574.7 7,628.1 $71.7 7.5 21.8 2.0 2.4 29.2 14.0 7.4 0.1 7.3 11.0 104.2 $734.8 117.3 267.1 31.4 39.6 247.7 122.2 44.5 3.2 41.3 38.4 939.9 $755.1 138.4 271.9 45.5 51.1 233.2 151.3 83.0 21.5 61.5 37.4 1,026.8 $3,089.8 272.6 525.7 134.6 579.8 1,502.0 1,077.4 902.2 373.5 528.7 487.8 5,557.2 $812.1 63.8 204.1 54.1 71.8 413.3 177.9 269.2 172.3 96.9 78.8 1,338.0 $1,343.7 186.6 289.3 38.2 231.7 578.3 382.7 232.6 55.9 176.8 158.5 2,117.6 $984.7 97.8 206.8 62.3 200.7 399.9 314.0 177.1 38.0 139.1 132.5 1,608.4 $403.0 46.4 109.1 11.8 80.3 133.9 135.3 92.3 41.4 50.9 81.5 712.1 $347.9 75.5 121.1 9.9 24.9 105.0 101.3 38.8 7.9 30.9 22.2 510.1 $760.1 65.8 156.2 37.2 63.5 381.7 253.7 227.1 82.8 144.3 101.1 1,341.9 Memo: Other Real Estate Owned (in millions) All other real estate owned�������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� 1-4 family residential���������������������������������������� Farmland����������������������������������������������������������� GNMA properties��������������������������������������������� 33,963.3 13,467.7 4,837.1 1,579.6 11,486.8 173.8 2,303.5 874.1 304.9 227.9 20.9 299.3 20.5 0.7 9,466.1 4,846.7 1,827.6 318.0 2,358.8 107.1 8.8 8,094.8 4,211.9 1,378.8 744.1 1,598.5 30.3 132.0 15,528.3 4,104.3 1,402.8 496.6 7,230.3 15.8 2,161.9 2,209.1 660.2 462.7 90.0 947.2 16.5 21.3 10,665.0 4,575.9 1,380.1 414.3 4,081.6 28.3 185.2 8,510.8 2,435.4 1,030.4 711.2 3,232.7 26.2 1,071.1 4,194.4 1,507.9 678.8 91.5 945.8 35.2 935.4 3,438.4 1,680.8 693.0 100.4 887.6 60.9 15.8 4,945.5 2,607.5 592.2 172.1 1,391.9 6.8 74.7 * See Table IV-A (page 9) for explanations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 11 2009, Volume 3, No. 3 TABLE VI-A. Derivatives, All FDIC-Insured Commercial Banks and State-Chartered Savings Banks Asset Size Distribution (dollar figures in millions; 2nd Quarter 1st Quarter notional amounts unless otherwise indicated) 2009 2009 ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives����������������� 1,213 1,169 Total assets of institutions reporting derivatives���������� $10,593,234 $10,671,165 Total deposits of institutions reporting derivatives������� 7,095,896 6,982,180 Total derivatives������������������������������������������������������������� 204,956,755 203,388,080 %Change Less $100 4th Quarter 3rd Quarter 2nd Quarter 08Q2than $100 Million to 2008 2008 2008 09Q2 Million $1 Billion 1,102 1,070 1,068 $10,975,131 $10,723,566 $10,105,030 7,091,683 6,801,835 6,451,181 212,114,644 177,121,812 183,302,532 $1 Billion to $10 Greater than Billion $10 Billion 13.6 4.8 10.0 11.8 106 $7,460 6,106 294 709 $298,237 238,282 20,859 315 83 $893,695 $9,393,843 666,189 6,185,318 66,244 204,869,358 137,207,613 144,933,910 19,729,753 19,419,103 2,786,005 2,343,165 1,250,074 1,137,544 16,148,367 15,468,809 177,121,812 183,302,532 18.6 -14.3 -12.9 -20.1 -13.1 11.8 282 0 12 0 0 294 20,354 72 181 191 61 20,859 62,286 171,836,386 2,360 16,644,270 1,294 2,040,153 221 908,621 84 13,439,928 66,244 204,869,358 Derivative Contracts by Transaction Type Swaps���������������������������������������������������������������������������� 135,613,797 133,873,113 143,110,842 108,289,345 114,178,373 Futures & forwards�������������������������������������������������������� 24,706,040 23,587,666 22,528,731 24,492,578 23,581,083 Purchased options��������������������������������������������������������� 14,928,717 14,936,181 14,824,429 13,491,255 14,501,600 Written options��������������������������������������������������������������� 14,787,496 14,983,349 14,922,615 13,454,312 14,415,336 Total�������������������������������������������������������������������������������� 190,036,050 187,380,309 195,386,617 159,727,490 166,676,391 18.8 4.8 2.9 2.6 14.0 21 134 19 120 294 10,429 4,518 931 4,859 20,737 38,733 135,564,613 14,430 24,686,958 4,003 14,923,764 8,607 14,773,909 65,773 189,949,245 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����������������������������������� 126,040 -10,569 679 1,156 -476,973 525,587 138,559 -10,460 3,114 4,158 -959,080 1,031,185 131,483 -16,942 2,871 3,848 -975,755 1,046,813 27,300 15,054 3,742 3,173 -566,035 603,936 75,945 32,017 -3,742 5,064 -398,893 428,844 66.0 N/M N/M -77.2 N/M 22.6 1 0 0 0 0 0 -83 0 3 1 0 0 104 6 9 2 2 -2 126,019 -10,576 667 1,153 -476,975 525,589 Derivative Contracts by Maturity** Interest rate contracts����������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Foreign exchange contracts������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Equity contracts��������������������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Commodity & other contracts����������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years 72,457,870 35,921,531 28,356,868 9,490,042 2,293,453 1,193,852 343,418 291,182 75,716 252,705 211,329 45,443 68,442,052 37,293,223 29,984,848 9,234,329 2,163,751 1,056,793 348,777 286,171 82,843 279,748 206,173 41,546 58,618,112 47,456,432 36,868,247 10,561,395 2,168,136 1,079,943 409,029 256,252 72,337 264,916 261,768 45,031 40,400,427 37,760,963 28,785,015 12,664,219 1,787,926 676,596 508,748 332,908 81,967 294,036 288,860 88,832 44,995,355 39,521,416 29,704,390 12,345,486 1,929,554 734,445 504,258 207,513 76,283 315,202 267,344 28,377 61.0 -9.1 -4.5 -23.1 18.9 62.6 -31.9 40.3 -0.7 -19.8 -21.0 60.1 101 15 12 0 0 0 0 4 0 0 0 0 3,887 7,579 3,581 7 3 0 36 83 1 12 111 10 17,083 18,358 16,391 1,445 11 0 83 441 5 172 4 0 72,436,800 35,895,580 28,336,884 9,488,589 2,293,439 1,193,852 343,299 290,654 75,710 252,521 211,213 45,433 107.4 103.2 60.3 122.3 57.8 118.5 0.1 0.1 0.5 0.4 1.7 0.5 75.9 91.8 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 171,919,307 169,395,791 175,894,783 Foreign exchange*�������������������������������������������������������� 16,646,702 16,272,941 16,922,815 Equity����������������������������������������������������������������������������� 2,041,640 2,174,368 2,206,793 Commodity & other (excluding credit derivatives)�������� 909,033 938,063 1,061,132 Credit������������������������������������������������������������������������������ 13,440,073 14,606,916 16,029,122 Total�������������������������������������������������������������������������������� 204,956,755 203,388,080 212,114,644 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 (%)�������������������������������������������������� 66.7 80.6 86.1 89.2 147.3 175.3 210.6 182.6 176.3 0.2 0.9 2.1 167.7 Credit losses on derivatives***���������������������������������� 383.4 217.1 1072.4 226.7 134.8 184.4 0.0 0.6 0.8 382.0 HELD FOR TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 204 8,912,447 5,989,045 199 9,016,731 5,886,190 181 9,413,833 6,085,115 187 9,236,235 5,856,346 183 8,598,255 5,502,730 11.5 3.7 8.8 7 512 403 72 31,269 25,096 69 279,235 202,953 56 8,601,431 5,760,593 135,190,125 142,694,501 18,396,233 18,166,939 2,773,712 2,331,974 1,246,952 1,134,781 157,607,022 164,328,194 18.8 -17.1 -12.8 -20.2 14.2 8 0 0 0 8 1,004 0 1 11 1,016 19,496 1,604 258 115 21,472 169,571,397 15,056,684 2,033,970 905,982 187,568,033 -44.0 -10.4 N/M N/M 179.6 0 0 0 0 0 0 0 0 0 0 -11 7 0 1 -5 1,090 2,125 -281 2,212 5,146 0.0 0.0 0.0 -0.8 -0.1 2.1 4.0 90.7 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 169,591,905 167,216,659 173,827,598 Foreign exchange���������������������������������������������������������� 15,058,288 14,766,077 16,147,796 Equity����������������������������������������������������������������������������� 2,034,228 2,162,149 2,195,068 Commodity & other�������������������������������������������������������� 906,108 935,634 1,058,678 Total�������������������������������������������������������������������������������� 187,590,530 185,080,519 193,229,140 Trading Revenues: Cash & Derivative Instruments Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other (including credit derivatives)�������� Total trading revenues��������������������������������������������������� 1,078 2,132 -281 2,212 5,141 9,078 2,436 1,043 -2,378 10,179 -5,282 3,422 -1,061 -6,264 -9,186 -137 3,098 561 2,900 6,422 1,926 2,379 372 -2,837 1,839 Share of Revenue Trading revenues to gross revenues (%)���������������������� Trading revenues to net operating revenues (%)���������� 3.9 94.6 7.6 138.0 -8.0 44.1 4.6 66.9 1.3 24.8 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 1,083 10,215,027 6,845,052 1,046 10,303,184 6,728,712 998 10,464,341 6,820,742 970 10,396,557 6,589,371 975 9,806,940 6,256,369 11.1 4.2 9.4 98 6,894 5,661 638 268,553 214,130 270 751,001 559,832 77 9,188,579 6,065,428 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other�������������������������������������������������������� Total notional amount���������������������������������������������������� 2,327,403 107,782 7,412 2,924 2,445,520 2,179,131 106,011 12,219 2,429 2,299,790 2,067,185 76,113 11,725 2,454 2,157,477 2,017,489 87,565 12,293 3,121 2,120,468 2,239,410 94,832 11,191 2,763 2,348,196 3.9 13.7 -33.8 5.8 4.1 274 0 12 0 286 19,350 11 181 180 19,721 42,790 369 1,036 106 44,301 2,264,989 107,401 6,184 2,638 2,381,212 All line items are reported on a quarterly basis. N/M - Not Meaningful * Include spot foreign exchange contracts. All other references to foreign exchange contracts in which notional values or fair values are reported exclude spot foreign exchange contracts. ** Derivative contracts subject to the risk-based capital requirements for derivatives. *** The reporting of credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and to those banks filing the FFIEC 041 report form that have $300 million or more in total assets. FDIC Quarterly 12 2009, Volume 3, No. 3 Quarterly Banking Profile TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Commercial Banks and State-Chartered Savings Banks) Asset Size Distribution (dollar figures in millions) Assets Securitized and Sold with Servicing Retained or with Recourse or Other Seller-Provided Credit Enhancements 2nd Quarter 2009 1st Quarter 2009 4th Quarter 2008 3rd Quarter 2008 2nd Quarter 2008 Number of institutions reporting securitization activities����������������������������������������� 143 132 132 128 130 Outstanding Principal Balance by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� $1,222,450 $1,234,585 $1,256,021 $1,217,682 $1,087,215 Home equity loans��������������������������������������������������������������������������������������������� 6,594 6,595 6,692 6,880 7,822 Credit card receivables������������������������������������������������������������������������������������� 397,918 399,113 398,261 417,832 409,883 Auto loans���������������������������������������������������������������������������������������������������������� 10,266 11,230 12,040 13,842 6,224 Other consumer loans��������������������������������������������������������������������������������������� 26,006 26,692 27,427 28,090 28,870 Commercial and industrial loans����������������������������������������������������������������������� 9,019 8,317 9,705 11,080 12,491 All other loans, leases, and other assets*�������������������������������������������������������� 193,380 197,693 198,471 197,010 194,756 Total securitized and sold������������������������������������������������������������������������������������������ 1,865,634 1,884,227 1,908,617 1,892,416 1,747,262 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����������������������������������������������������������������������� %Change Less than $100 $1 Billion Greater 08Q2$100 Million to to $10 than $10 09Q2 Million $1 Billion Billion Billion 10.0 16 62 12.4 -15.7 -2.9 64.9 -9.9 -27.8 -0.7 6.8 $154 0 0 0 0 0 53 207 $835 0 3,304 0 0 4 103 4,247 25 40 -15.1 -30.4 459.4 105.1 -1.3 -40.8 -73.5 297.6 -80.1 4 0 0 0 0 0 1 5 0 16 0 482 0 0 0 19 517 0 0 0 1,681 7 0 0 2 1,691 0 6,026 1,063 127,210 715 1,399 184 277 136,873 378 $2,360 $1,219,101 46 6,548 11,863 382,751 100 10,166 0 26,006 3,365 5,650 145 193,079 17,879 1,843,301 6,046 1,063 129,373 722 1,399 184 299 139,087 378 6,279 1,120 39,100 912 1,429 367 301 49,509 397 6,892 1,247 23,228 707 1,532 137 612 34,355 830 7,514 1,347 24,039 447 1,428 170 714 35,660 1,273 7,121 1,527 23,129 352 1,417 311 1,128 34,984 1,902 4.3 0.8 2.6 2.2 2.9 2.6 1.9 3.7 4.1 1.1 3.0 2.0 3.1 3.1 0.6 3.5 4.4 1.4 2.9 2.5 3.9 2.6 0.6 3.7 3.8 1.3 2.5 2.1 3.2 1.6 0.2 3.1 2.8 0.6 2.1 2.2 2.7 1.3 0.3 2.3 1.9 0.0 0.0 0.0 0.0 0.0 0.0 1.4 0.4 0.0 1.6 0.0 0.0 8.3 0.0 1.4 2.1 6.2 1.8 0.7 0.0 5.9 0.0 2.6 4.3 0.8 2.7 2.2 2.9 0.6 1.9 3.7 6.6 0.9 2.9 0.2 3.3 1.3 1.6 5.2 5.8 1.4 3.0 0.2 3.5 3.1 1.1 4.6 4.5 1.2 2.5 0.3 3.7 2.1 0.4 3.6 3.2 0.7 2.1 0.2 2.9 1.5 0.2 2.6 1.9 0.7 2.1 0.3 2.4 1.3 0.2 1.8 1.4 0.0 0.0 0.0 0.0 0.0 0.8 1.2 0.5 0.0 1.3 0.0 0.0 13.2 0.0 1.2 1.2 6.0 1.8 0.1 0.0 2.2 0.0 1.8 6.6 0.8 2.9 0.2 3.3 0.8 1.6 5.2 0.5 0.9 4.8 1.1 0.5 6.9 0.0 1.4 0.2 0.6 2.1 0.8 0.2 2.6 0.0 0.6 0.3 0.1 6.4 0.8 0.8 5.9 0.0 1.6 0.3 0.4 4.4 1.3 0.6 3.6 0.0 1.2 0.1 0.2 2.8 0.9 0.4 1.9 0.0 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.3 0.0 0.0 0.0 0.0 2.5 0.1 3.5 3.0 0.2 0.0 17.3 0.0 5.2 0.5 0.9 4.9 1.1 0.5 0.6 0.0 1.3 134 68,128 451 165 77,212 450 124 113,017 436 166 98,826 636 435 82,604 3,506 -69.2 -17.5 -87.1 0 0 0 0 322 0 0 3,867 295 134 63,938 156 4 594 0 5 556 0 5 584 16 6 623 15 7 403 1 -42.9 47.4 -100.0 0 0 0 0 3 0 0 592 0 4 0 0 Assets Sold with Recourse and Not Securitized Number of institutions reporting asset sales���������������������������������������������������� Outstanding Principal Balance by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� Home equity, credit card receivables, auto, and other consumer loans��������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total sold and not securitized����������������������������������������������������������������������������������� 821 815 795 786 776 5.8 161 499 116 45 69,597 1,160 3,195 47,558 121,511 69,811 1,348 6,028 46,438 123,625 70,660 1,477 6,698 46,254 125,088 73,001 1,611 7,314 45,203 127,129 65,959 1,786 4,794 33,191 105,730 5.5 -35.1 -33.4 43.3 14.9 1,202 0 1 0 1,203 9,929 31 60 98 10,118 4,589 12 8 178 4,786 53,878 1,117 3,126 47,283 105,403 Maximum Credit Exposure by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� Home equity, credit card receivables, auto, and other consumer loans��������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total credit exposure������������������������������������������������������������������������������������������������� 14,917 113 2,224 10,009 27,263 15,198 183 4,995 9,790 30,166 15,290 189 5,617 9,528 30,625 15,586 203 6,180 9,312 31,280 14,543 240 3,614 8,541 26,937 2.6 -52.9 -38.5 17.2 1.2 121 0 1 0 122 2,118 7 50 44 2,219 2,838 3 8 59 2,908 9,841 102 2,166 9,907 22,015 Support for Securitization Facilities Sponsored by Other Institutions Number of institutions reporting securitization facilities sponsored by others������� Total credit exposure������������������������������������������������������������������������������������������������� 59 3,808 55 2,131 51 3,319 49 6,050 47 12,668 25.5 -69.9 21 10 28 57 5 14 5 3,726 Total unused liquidity commitments������������������������������������������������������������������������� 475 936 1,416 3,531 5,492 -91.4 0 0 0 475 5,615,123 5,528,963 5,707,851 Other Assets serviced for others**�������������������������������������������������������������������������������������� 5,880,038 5,683,430 Asset-backed commercial paper conduits Credit exposure to conduits sponsored by institutions and others������������������ 20,210 22,981 Unused liquidity commitments to conduits sponsored by institutions 210,026 273,542 and others�������������������������������������������������������������������������������������������������� Net servicing income (for the quarter)���������������������������������������������������������������������� 10,858 5,947 Net securitization income (for the quarter)��������������������������������������������������������������� -142 2,124 Total credit exposure to Tier 1 capital (%)***������������������������������������������������������������ 15.7 7.7 3,921,914 49.9 4,299 72,657 95,231 23,064 20,830 21,083 -4.1 5 0 455 19,751 297,908 311,683 339,007 -38.0 0 0 0 210,026 -336 2,393 6.8 4,110 3,120 7.4 7,280 4,206 7.3 49.1 -103.4 9 0 0.7 188 48 2.2 307 62 3.4 10,354 -252 20.2 * Line item titled “All other loans and all leases” for quarters prior to March 31, 2006. ** The amount of financial assets serviced for others, other than closed-end 1-4 family residential mortgages, is reported when these assets are greater than $10 million. *** Total credit exposure includes the sum of the three line items titled “Total credit exposure” reported above. FDIC Quarterly 13 2009, Volume 3, No. 3 INSURANCE FUND INDICATORS ■ DIF Reserve Ratio Declines 5 Basis Points to 0.22 Percent ■ Insured Deposit Growth Was Flat in Second Quarter ■ 24 Institutions Failed during Second Quarter ■ 5-Basis-Point Special Assessment Levied on Industry Assets During the second quarter of 2009, total assets of the nation’s 8,195 FDIC-insured commercial banks and savings institutions decreased by 1.8 percent ($238.1 billion). During this period, total deposits increased by 0.7 percent ($66.7 billion), foreign office deposits increased by 3.6 percent ($51.0 billion), and domestic office deposits increased by 0.2 percent ($15.7 billion). Domestic non-interest-bearing deposits increased by 2.3 percent ($32.6 billion) and savings deposits and interest bearing checking accounts increased by 2.8 percent ($92.9 billion), while domestic time deposits decreased by 4.0 percent ($109.8 billion). For the 12 months ending June 30, total domestic deposits grew by 7.5 percent ($525.5 billion), as interest-bearing deposits increased by 4.7 percent ($274.3 billion) and non- interest-bearing deposits rose by 20.5 percent ($251.3 billion). Over the past year, the share of assets funded by domestic deposits increased from 52.8 percent to 56.8 percent. In contrast, over the same 12 months, Federal Home Loan Bank (FHLB) advances as a share of asset funding declined from 6.3 percent to 4.8 percent and foreign deposits’ share of assets declined from 11.6 percent to 11.0 percent. FHLB advances decreased by 24.5 percent ($206.1 billion) and foreign office deposits decreased by 5.0 percent ($77.6 billion) over the 12 months ending June 30. deposits decreased by 5.8 percent ($45.2 billion) during the second quarter, the largest quarterly decline since the first quarter of 2005, when brokered deposits decreased by 9.6 percent. At mid-year 2009, 46 percent (3,758) of FDIC-insured banks and thrifts used brokered deposits to fund a portion of their balance sheet, and roughly 40 percent (1,488) of these institutions had brokered deposits that exceeded 10 percent of their domestic deposits. Insured institutions began itemizing reciprocal brokered deposits2 on their reports of condition beginning June 30, 2009; 1,352 institutions reported $34.2 billion in reciprocal brokered deposits, amounting to 4.7 percent of total outstanding brokered deposits. Estimated insured deposits at all FDIC-insured institutions (based on the $100,000 coverage limit) decreased by 0.3 percent during the second quarter of 2009 but increased 7.8 percent during the past four quarters combined. For institutions existing as of March 31, 2009, and June 30, 2009, insured deposits increased during the second quarter at 4,724 institutions (58 percent), decreased at 3,419 institutions (42 percent), and remained unchanged at 40 institutions. On May 20, 2009, the President signed the Helping Families Save Their Homes Act of 2009, which extended the temporary deposit insurance coverage limit increase to $250,000 (from the permanent limit of $100,000 for deposits other than retirement accounts) through the end of 2013. The legislation also eliminated the provision in the Emergency Economic Stabilization Act of 2008 that prevented the FDIC from considering this temporary increase in deposit insurance Beginning in the second quarter of 2009, brokered deposits that exceed 10 percent of an institution’s domestic deposits are included in the metrics used to price an institution’s deposit insurance.1 Brokered For an institution in Risk Category I, the initial base assessment rate depends, in part, on the institution’s adjusted brokered deposit ratio. This ratio will exceed zero if an institution’s brokered deposits are greater than 10 percent of its domestic deposits and its total assets are more than 40 percent greater than they were four years previously. Certain reciprocal brokered deposits are excluded from the calculation of the adjusted brokered deposit ratio. For an institution in any other risk category, the initial base assessment rate is increased if the institution’s ratio of brokered deposits to domestic deposits is greater than 10 percent, regardless of the rate of growth of assets. Reciprocal brokered deposits are included in the amount of brokered deposits for purposes of computing this ratio. 1 FDIC Quarterly Reciprocal brokered deposits are deposits that an insured depository institution receives through a deposit placement network on a reciprocal basis, such that: (1) For any deposit received, the institution (as agent for depositors) places the same amount with other insured depository institutions through the network; and (2) each member of the network sets the interest rate to be paid on the entire amount of funds it places with other network members. 2 14 2009, Volume 3, No. 3 Quarterly Banking Profile coverage for purposes of setting deposit insurance assessments. Starting on September 30, 2009, insured deposit estimates will be based on the increased insurance coverage limit of $250,000. The reduction in the DIF was primarily due to an $11.6 billion increase in loss provisions for bank failures. Twenty-four insured institutions with combined assets of $26.4 billion failed during the second quarter of 2009, the largest number of quarterly failures since the fourth quarter of 1992, when 42 insured institutions failed. For 2009 through the end of the second quarter, 45 insured institutions with combined assets of $35.9 billion failed at an estimated current cost to the DIF of $10.5 billion. On June 30, 2009, a special assessment was imposed on all insured banks and thrifts. For 8,106 institutions, with assets of $9.3 trillion, the special assessment was 5 basis points of each institution’s assets minus Tier 1 capital; 89 other institutions, with assets of $4.0 trillion, had their special assessment capped at 10 basis points of their second quarter assessment base. The DIF’s reserve ratio was 0.22 percent on June 30, 2009, down from 0.27 percent at March 31, 2009, and 1.01 percent one year ago. The June figure is the lowest reserve ratio for the combined bank and thrift insurance fund since March 31, 1993, when the reserve ratio was 0.06 percent. All else being equal, an increase in insured deposits, will reduce the reserve ratio. The Deposit Insurance Fund (DIF) decreased by $2.6 billion (20.3 percent) during the second quarter to $10.4 billion (unaudited). Accrued assessment income from the regular and the special assessment increased the fund by $9.1 billion. Interest earned, combined with realized gains on securities and debt guarantee surcharges from the Temporary Liquidity Guarantee Program added $1.1 billion to the fund. Unrealized losses on available-for-sale securities combined with operating expenses reduced the fund by $1.3 billion. FDIC Quarterly Author: Kevin Brown, Sr. Financial Analyst Division of Insurance and Research (202) 898-6817 15 2009, Volume 3, No. 3 Table I-B. Insurance Fund Balances and Selected Indicators 2nd Quarter (dollar figures in millions) 2009* Beginning Fund Balance����������������� $13,007 Deposit Insurance Fund 2nd 1st 4th 3rd Quarter Quarter Quarter Quarter 2008 2008 2007 2007 $52,843 $52,413 $51,754 $51,227 1st Quarter 2009* $17,276 4th Quarter 2008 $34,588 3rd Quarter 2008 $45,217 9,095 2,615 996 881 640 448 239 240 521 298 11,615 375 212 136 266 6,637 2 277 302 290 19,163 15 526 473 249 11,930 16 651 0 256 10,221 1 618 0 238 525 0 -957 -2,639 -331 -4,269 551 -17,312 -346 -10,629 1,559 -7,626 Ending Fund Balance����������������������� Percent change from four quarters earlier��������������������� 10,368 13,007 17,276 34,588 -77.07 -75.39 -67.04 -33.17 Reserve Ratio (%)����������������������������� 0.22 0.27 0.36 0.76 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����������������� 2nd Quarter 2007 $50,745 1st Quarter 2007 $50,165 4th Quarter 2006 $49,992 3rd Quarter 2006 $49,564 2nd Quarter 2006 $49,193 170 140 94 10 10 7 585 0 262 39 -2 640 0 243 132 24 748 0 248 -3 1 567 0 239 -73 4 476 0 248 49 5 622 0 237 -50 1 665 0 242 -6 12 127 430 138 659 68 527 -162 482 81 580 -21 173 -18 428 -77 371 45,217 52,843 52,413 51,754 51,227 50,745 50,165 49,992 49,564 -11.73 4.13 4.48 3.52 3.36 3.15 3.23 3.35 3.21 1.01 1.19 1.22 1.22 1.21 1.20 1.21 1.22 1.23 Estimated Insured Deposits**�������� 4,817,712 4,832,842 4,750,724 4,545,316 4,467,808 4,438,141 4,292,221 4,242,607 4,235,044 4,245,266 4,153,786 4,100,013 4,040,353 Percent change from four quarters earlier��������������������� 7.83 8.89 10.68 7.13 5.50 4.54 3.33 3.48 4.82 6.08 6.76 7.02 7.52 Domestic Deposits��������������������������� 7,561,458 7,546,973 7,505,409 7,230,328 7,036,248 7,076,718 6,921,687 6,747,998 6,698,886 6,702,598 6,640,105 6,484,372 6,446,868 Percent change from four quarters earlier��������������������� 7.46 6.65 8.43 7.15 5.04 5.58 4.24 4.07 3.91 5.71 6.59 6.76 8.68 Number of institutions reporting��� 8,205 8,257 8,315 8,394 8,462 8,505 8,545 8,570 8,625 1.25 1.23 1.23 1.22 1.21 1.20 1.21 1.22 1.22 1.19 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 1.01 0.76 0.36 0.27 6/06 12/06 6/07 12/07 8,692 8,755 8,790 Deposit Insurance Fund Balance and Insured Deposits*** ($ Millions) DIF Reserve Ratios*** Percent of Insured Deposits 12/05 8,661 6/08 12/08 0.22 6/09 DIF Balance DIF-Insured Deposits 48,373 48,597 49,193 49,564 49,992 50,165 50,745 51,227 51,754 52,413 52,843 45,217 34,588 17,276 13,007 10,368 3,830,950 3,890,941 4,001,906 4,040,353 4,100,013 4,153,786 4,245,266 4,235,044 4,242,607 4,292,221 4,438,141 4,467,808 4,545,316 4,750,724 4,832,842 4,817,712 Table II-B. Problem Institutions and Failed/Assisted Institutions (dollar figures in millions) Problem Institutions Number of institutions��������������������������������������������������������� Total assets�������������������������������������������������������������������������� Failed Institutions Number of institutions��������������������������������������������������������� Total assets�������������������������������������������������������������������������� Assisted Institutions**** Number of institutions��������������������������������������������������������� Total assets�������������������������������������������������������������������������� 2009***** 2008***** 2008 2007 2006 2005 2004 416 $299,837 117 $78,343 252 $159,405 76 $22,189 50 $8,265 52 $6,607 45 $35,868 4 $2,020 25 $371,945 3 $2,615 0 $0 0 $0 4 $170 0 $0 0 $0 5 $1,306,042 0 0 0 0 0 0 0 0 80 $28,250 * For 2009, preliminary unaudited fund data, which are subject to change. ** The Emergency Economic Stabilization Act of 2008 directs the FDIC not to consider the temporary coverage increase to $250,000 in setting assessments. Therefore, we do not include the additional insured deposits in calculating the fund reserve ratio, which guides our assessment planning, from fourth quarter 2008 through the second quarter of 2009. The Helping Families Save Their Homes Act of 2009 eliminated the prohibition against the FDIC’s taking the temporary increase into account when setting assessments. Beginning in the third quarter of 2009 estimates of insured deposits will included the temporary coverage increase to $250,000. *** Prior to 2006, amounts represent sum of separate BIF and SAIF amounts. **** Five institutions under the same holding company received assistance under a systemic risk determination. ***** Through June 30. FDIC Quarterly 16 2009, Volume 3, No. 3 Quarterly Banking Profile Table III-B. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) Number of Institutions June 30, 2009 Commercial Banks and Savings Institutions Total Assets Domestic Deposits* Est. Insured Deposits FDIC-Insured Commercial Banks����������������������������������������������� FDIC-Supervised������������������������������������������������������������������� OCC-Supervised�������������������������������������������������������������������� Federal Reserve-Supervised������������������������������������������������� 6,995 4,632 1,505 858 $11,895,077 2,009,048 8,177,336 1,708,693 $6,611,400 1,511,377 4,138,412 961,611 $4,054,368 1,079,959 2,399,642 574,767 FDIC-Insured Savings Institutions���������������������������������������������� OTS-Supervised Savings Institutions������������������������������������ FDIC-Supervised State Savings Banks��������������������������������� 1,200 793 407 1,406,377 1,098,694 307,683 943,274 722,687 220,587 758,921 586,779 172,142 Total Commercial Banks and Savings Institutions���������������������� 8,195 13,301,455 7,554,674 4,813,289 Other FDIC-Insured Institutions U.S. Branches of Foreign Banks������������������������������������������������� 10 28,162 6,783 4,423 Total FDIC-Insured Institutions���������������������������������������������������� .. 8,205 13,329,617 7,561,458 4,817,712 * Excludes $1.47 trillion in foreign office deposits, which are uninsured. Table IV-B. Distribution of Institutions and Domestic Deposits Among Risk Categories Quarter Ending March 31, 2009 (dollar figures in billions) Risk Category I - Minimum.............................................................................. I - Middle.................................................................................. I - Middle.................................................................................. I - Maximum............................................................................. II............................................................................................... III.............................................................................................. IV.............................................................................................. Annual Rate in Basis Points 12 12.01-13.00 13.01-13.99 14 17 35 50 Number of Institutions 1,331 1,840 1,489 2,343 905 273 76 Percent of Total Institutions 16.1 22.3 18.0 28.4 11.0 3.3 0.9 Domestic Deposits 1,478 1,641 1,055 909 2,268 160 38 Percent of Total Domestic Deposits 19.6 21.7 14.0 12.0 30.0 2.1 0.5 Note: Institutions are categorized based on supervisory ratings, debt ratings, and financial data as of March 31, 2009. Rates do not reflect the application of assessment credits. See notes to users for further information on risk categories and rates. FDIC Quarterly 17 2009, Volume 3, No. 3 TEMPORARY LIQUIDITY GUARANTEE PROGRAM ■ Transaction Account Guarantee Program Extended to June 30, 2010 ■ Debt Guarantee Program Extended to October 31, 2009 ■ More Than 600,000 Additional Transaction Accounts Receive Full Coverage ■ $339 Billion in Debt Outstanding in Program All insured depository institutions are eligible to participate in the Transaction Account Guarantee Program. Institutions eligible for participation in the Debt Guarantee Program include insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of insured depository institutions that the FDIC designates as eligible entities. FDIC Responds to Market Disruptions with TLGP The FDIC Board approved the Temporary Liquidity Guarantee Program (TLGP)1 on October 13, 2008, as major disruptions in credit markets blocked access to liquidity for financial institutions. The TLGP improved access to liquidity by fully guaranteeing non-interestbearing transaction deposit accounts above $250,000, regardless of dollar amount, in the Transaction Account Guarantee Program, and by guaranteeing eligible senior unsecured debt issued by eligible institutions in the Debt Guarantee Program. Program Funded by Industry Fees and Assessments The TLGP does not rely on taxpayer funding or the Deposit Insurance Fund. Both components of the program are paid for by direct user fees. Institutions participating in the Transaction Account Guarantee Program provide customers full coverage on non- interest-bearing transaction accounts for an annual fee of 10 basis points through year-end 2009. Fees for qualifying non-interest-bearing transaction accounts guaranteed between January 1, 2010, and June 30, 2010, will be based on the participating entity’s risk category assignment under the FDIC’s risk-based premium system. Annualized fees will be either 15, 20, or 25 basis points, depending on an institution’s risk category. Although financial markets have improved significantly since the TLGP was implemented, portions of the industry are still suffering from recent economic turmoil. To facilitate the orderly phase-out of the TLGP, and to continue access to FDIC guarantees where they are needed, the FDIC Board has extended both components of the program. A final rule extending the Transaction Account Guarantee component of the TLGP by six months, to June 30, 2010, was adopted on August 26, 2009. Entities currently participating in the Transaction Account Guarantee Program will have an opportunity to opt out of the extended program. Depository institutions that remain in the extended program will be subject to increased fees that are adjusted to reflect the institution’s risk.2 Fees for participation in the Debt Guarantee Program depend on the maturity of debt issued and range from 50 to 100 basis points (annualized). A surcharge will be imposed on debt issued with a maturity of one year or greater after April 1, 2009. For debt that is not issued under the extension, that is, debt that is issued on or before June 30, 2009, and matures on or before June 30, 2012, surcharges will be 10 basis points (annualized) on debt issued by insured depository institutions and 20 basis points (annualized) on debt issued by other participating entities. For debt issued under the extension, that is, debt issued after June 30, 2009, or debt that matures after June 30, 2012, surcharges will be 25 basis points (annualized) on debt issued by insured depository institutions and 50 basis points (annualized) on debt issued by other participating entities. As of June 30, 2009, a total of $8.7 billion in fees had been assessed under the Debt Guarantee Program. On March 17, 2009, the Board of Directors of the FDIC voted to extend the deadline for issuance of guaranteed debt from June 30, 2009, to October 31, 2009, and extended the expiration date of the guarantee to the earlier of maturity of the debt or December 31, 2012, from June 30, 2012. The FDIC imposed a surcharge on debt issued with a maturity of one year or more beginning in the second quarter of 2009.3 The FDIC invoked the systemic risk exception pursuant to section 141 of the Federal Deposit Improvement Act of 1991, 12 U.S.C. 1823(c)(4) on October 13, 2008. For further information on the TLGP, see http://www.fdic.gov/regulations/resources/TLGP/index.html 2 See http://www.fdic.gov/news/board/Aug26no4.pdf 3 See http://www.fdic.gov/news/board/Mar1709rule.pdf 1 FDIC Quarterly 18 2009, Volume 3, No. 3 Quarterly Banking Profile A Majority of Eligible Entities Have Chosen to Participate in the TLGP $339 Billion in FDIC-Guaranteed Debt Was Outstanding at June 30, 2009 More than 86 percent of FDIC-insured institutions have opted in to the Transaction Account Guarantee Program, and more than half of all eligible entities have opted in to the Debt Guarantee Program. Lists of institutions that opted out of the guarantee programs are posted at http://www.fdic.gov/regulations/resources/ TLGP/optout.html. Ninety-seven financial entities—64 insured depository institutions and 33 bank and thrift holding companies and nonbank affiliates—had $339 billion in guaranteed debt outstanding at the end of the second quarter. Some banking groups issued FDIC-guaranteed debt at both the subsidiary and holding company level, but most guaranteed debt was issued by holding companies or nonbank affiliates of depository institutions. Bank and thrift holding companies and nonbank affiliates issued 82 percent of FDIC-guaranteed debt outstanding at June 30, 2009. $700 Billion in Transaction Accounts Over $250,000 Guaranteed According to second quarter 2009 Call and Thrift Financial Reports, insured institutions reported 655,427 non-interest-bearing transaction accounts over $250,000, an increase of 12 percent compared with first quarter 2009. These deposit accounts totaled $900 billion, of which $736 billion was guaranteed under the Transaction Account Guarantee Program. More than 5,800 FDIC-insured institutions reported non-interestbearing transaction accounts over $250,000 in value. Debt outstanding at June 30 had longer terms at issuance, compared with debt outstanding at year-end. Only 17 percent of debt outstanding matures in 180 days or less, compared with 49 percent at year-end; and 62 percent matures more than two years after issuance, compared with 39 percent at December 31, 2008. Among types of debt instruments, almost three- quarters, 74 percent, was in medium-term notes, compared with 44 percent at year-end. The share of outstanding debt in commercial paper fell to 15 percent from 43 percent at year-end. Debt Outstanding Represents 43 Percent of Total Cap on Issuers’ Guaranteed Debt The amount of FDIC-guaranteed debt that can be issued by each eligible entity, or its “cap,” is based on the amount of its senior unsecured debt outstanding as of September 30, 2008, that matures on or before June 30, 2009. Eligible entities may issue debt up to 125 percent of that outstanding amount. The cap for FDICinsured institutions that had no outstanding short-term senior unsecured debt other than Fed funds is set at 2 percent of liabilities as of September 30, 2008. Total debt outstanding at quarter end represented 43 percent of issuing entities’ total cap. Author: Katherine Wyatt Chief, Financial Analysis Section Division of Insurance and Research (202) 898-6755 Table I-C. Participation in Temporary Liquidity Guarantee Program June 30, 2009 Total Eligible Entities Transaction Account Guarantee Program Depository Institutions with Assets <= $10 Billion�������������������������������� 8,087 Depository Institutions with Assets > $10 Billion���������������������������������� 117 Total Depository Institutions*���������������������������������������������������������� 8,204 Debt Guarantee Program Depository Institutions with Assets <= $10 Billion�������������������������������� Depository Institutions with Assets > $10 Billion���������������������������������� Total Depository Institutions*���������������������������������������������������������� Bank and Thrift Holding Companies and Non-Insured Affiliates���������������������������������������������������������������������������� All Entities���������������������������������������������������������������������������������������� * Depository institutions include insured branches of foreign banks (IBAs) FDIC Quarterly 19 Number Opting In Percent Opting In 6,992 109 7,101 86.5% 93.2% 86.6% 8,087 117 8,204 4,356 108 4,464 53.9% 92.3% 54.4% 6,324 14,528 3,574 8,038 56.5% 55.3% 2009, Volume 3, No. 3 Table II-C. Cap on FDIC-Guaranteed Debt for Opt-In Entities Opt-In Entities with Senior Unsecured Debt Outstanding at 9/30/2008 Debt Amount as of Number 9/30/2008 Initial Cap June 30, 2009 (dollar figures in millions) Depository Institutions with Assets <= $10 Billion*������������������������������������ Depository Institutions with Assets > $10 Billion*�������������������������������������� Bank and Thrift Holding Companies, Non-Insured Affiliates��������� Total��������������������������������������������������������� Opt-In Depository Institutions with no Senior Unsecured Debt at 9/30/2008 2% Liabilities as of Number 9/30/2008 Total Entities Total Initial Cap 116 $3,532 $4,415 4,240 $33,336 4,356 $37,751 44 295,879 369,849 64 28,988 108 398,837 88 248 398,008 697,420 497,511 871,775 3,486 7,790 N/A 62,324 3,574 8,083 497,511 934,099 * Depository institutions include insured branches of foreign banks (IBAs) N/A - Not applicable Table III-C. Transaction Account Guarantee Program (dollar figures in millions) Number of Non-Interest-Bearing Transaction Accounts over $250,000������� Amount in Non-Interest-Bearing Transaction .Accounts over $250,000�������� Amount Guaranteed��������������������������������������������������������������������������������������� December 31, 2008 526,158 $853,671 $722,132 March 31, 2009 584,839 $858,023 $711,813 June 30, 2009 655,427 $899,982 $736,125 % Change 09Q1-09Q2 12.1% 4.9% 3.4% Table IV-C. Debt Outstanding in Guarantee Program June 30, 2009 (dollar figures in millions) Insured Depository Institutions Assets <= $10 Billion������������������������������������������������������� Assets > $10 Billion��������������������������������������������������������� Bank and Thrift Holding Companies, Non-Insured Affiliates������������������������������������������������������������ All Issuers����������������������������������������������������������������������� Number Debt Outstanding Debt Outstanding Share of Cap Cap1 for Group 44 20 1,635 59,691 3,059 314,778 53.5% 19.0% 33 97 277,712 339,038 471,205 789,042 58.9% 43.0% The amount of FDIC-guaranteed debt that can be issued by each eligible entity, or its “cap,” is based on the amount of senior unsecured debt outstanding as of September 30, 2008. The cap for a depository institution with no senior unsecured debt outstanding at September 30, 2008, is set at 2 percent of total liabilities. See http://www2.fdic.gov/qbp/2008dec/tlgp2c.html for more information. 1 Table V-C. Fees Assessed Under TLGP Transaction Account Guarantee Program* Debt Guarantee Program (dollar figures in millions) Fourth Quarter 2008�������������������������������������������������������������� First Quarter 2009����������������������������������������������������������������� Second Quarter 2009 Total Fees Assessed $3,437 3,433 1,413 Total��������������������������������������������������������������������������������� $8,283 385 Total Fee Amount $3,437 3,433 1,797 $385 $8,667 Surcharges Fees Collected 90 179 $269 * Pro-rated payment in arrears Table VI-C. Term at Issuance of Debt Instruments Outstanding June 30, 2009 (dollar figures in millions) Term at Issuance 90 days or less�������������������������������������� 91-180 days������������������������������������������� 181-364 days����������������������������������������� 1-2 years����������������������������������������������� Over 2-3 years�������������������������������������� Over 3 years������������������������������������������ Total������������������������������������������������ Share of Total���������������������������������������� FDIC Quarterly Interbank Other Commercial Eurodollar Medium Interbank Paper Deposits Term Notes Deposits 24,390 24,134 2,608 0 0 1 51,133 15.1% 35 528 22 3 0 0 588 0.2% 0 0 3,400 56,341 70,697 120,235 250,673 73.9% 20 134 1,812 1,587 37 0 4 3,573 1.1% Other Senior Unsecured Other Debt Term Note 0 480 1 0 3,352 3,713 7,545 2.2% 794 5,330 2,371 4,790 5,991 6,251 25,527 7.5% All Debt 25,353 32,283 9,988 61,172 80,039 130,203 339,038 Share by Term 7.5% 9.5% 2.9% 18.0% 23.6% 38.4% 2009, Volume 3, No. 3 Quarterly Banking Profile Notes to Users All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-ofperiod amount plus end-of-period amount plus any interim periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s) are included in average assets since the year-to-date income includes the results of all merged institutions. No adjustments are made for “purchase accounting” mergers. Growth rates represent the percentage change over a 12-month period in totals for institutions in the base period to totals for institutions in the current period. All data are collected and presented based on the location of each reporting institution’s main office. Reported data may include assets and liabilities located outside of the reporting institution’s home state. In addition, institutions may relocate across state lines or change their charters, resulting in an inter-regional or inter-industry migration, e.g., institutions can move their home offices between regions, and savings institutions can convert to commercial banks or commercial banks may convert to savings institutions. This publication contains financial data and other information for depository institutions insured by the Federal Deposit Insurance Corporation (FDIC). These notes are an integral part of this publication and provide information regarding the comparability of source data and reporting differences over time. Tables I-A through VIII-A. The information presented in Tables I-A through V-A of the FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and savings institutions. Tables VI-A (Derivatives) and VII-A (Servicing, Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered savings banks that file quarterly Call Reports. Table VIII-A (Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured institutions. Some tables are arrayed by groups of FDIC-insured institutions based on predominant types of asset concentration, while other tables aggregate institutions by asset size and geographic region. Quarterly and full-year data are provided for selected indicators, including aggregate condition and income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off information for loans outstanding and other assets. ACCOUNTING CHANGES Other-Than-Temporary Impairment When the fair value of an investment in a debt or equity security is less than its cost basis, the impairment is either temporary or other-than-temporary. To determine whether the impairment is other-than-temporary, an institution must apply other pertinent guidance such as paragraph 16 of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities; FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments; FSP FAS 115‑2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments; paragraph 6 of Accounting Principles Board Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock; Emerging Issues Task Force (EITF) Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets; and FSP EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20. Under FSP FAS 115-2 and FAS 124-2 issued on April 9, 2009, if the present value of cash flows expected to be collected on a debt security is less than its amortized cost basis, a credit loss exists. In this situation, if an institution does not intend to sell the security and it is not more likely than not that the institution will be required to sell the debt security before recovery of its amortized cost basis less any current- period credit loss, an other-than-temporary impairment has occurred. The amount of the total other-than-temporary impairment related to the credit loss must be recognized in earnings, but the amount of the total impairment related to other factors must be recognized in other comprehensive income, net of applicable taxes. Although the debt security would be written down to its fair value, its new amortized cost basis is the previous amortized cost basis less the other-thantemporary impairment recognized in earnings. In addition, if an institution intends to sell a debt security whose fair value is less than its amortized costs basis or it is more likely than not that the institution will be required to sell the debt Tables I-B through IV-B. A separate set of tables (Tables I-B through IV-B) provides comparative quarterly data related to the Deposit Insurance Fund (DIF), problem institutions, failed/assisted institutions, estimated FDIC-insured deposits, as well as assessment rate information. Depository institutions that are not insured by the FDIC through the DIF are not included in the FDIC Quarterly Banking Profile. U.S. branches of institutions headquartered in foreign countries and non-deposit trust companies are not included unless otherwise indicated. Efforts are made to obtain financial reports for all active institutions. However, in some cases, final financial reports are not available for institutions that have closed or converted their charters. DATA SOURCES The financial information appearing in this publication is obtained primarily from the Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income (Call Reports) and the OTS Thrift Financial Reports submitted by all FDIC-insured depository institutions. This information is stored on and retrieved from the FDIC’s Research Information System (RIS) data base. COMPUTATION METHODOLOGY Parent institutions are required to file consolidated reports, while their subsidiary financial institutions are still required to file separate reports. Data from subsidiary institution reports are included in the Quarterly Banking Profile tables, which can lead to double-counting. No adjustments are made for any double-counting of subsidiary data. Additionally, certain adjustments are made to the OTS Thrift Financial Reports to provide closer conformance with the reporting and accounting requirements of the FFIEC Call Reports. FDIC Quarterly 21 2009, Volume 3, No. 3 s ecurity before recovery of its amortized cost basis, an otherthan-temporary impairment has occurred and the entire difference between the security’s amortized cost basis and its fair value must be recognized in earnings. For any debt security held at the beginning of the interim period in which FSP FAS 115-2 and FAS 124-2 is adopted for which an other-than-temporary impairment loss has been previously recognized, if an institution does not intend to sell such a debt security and it is not more likely than not that the institution will be required to sell the debt security before recovery of its amortized cost basis, the institution should recognize the cumulative effect of initially applying the FSP as an adjustment to the interim period’s opening balance of retained earnings, net of applicable taxes, with a corresponding adjustment to accumulated other comprehensive income. The cumulative effect on retained earnings must be calculated by comparing the present value of the cash flows expected to be collected on the debt security with the security’s amortized cost basis as of the beginning of the interim period of adoption. FSP FAS 115-2 and FAS 124-2 are effective for interim and annual reporting periods ending after June 15, 2009. Early adoption of this FSP is permitted for periods ending after March 15, 2009, if certain conditions are met. Institutions are expected to adopt FSP FAS 115-2 and 124-2 for regulatory reporting purposes in accordance with the FSP’s effective date. with calendar year fiscal years, these two accounting standards take effect in 2009. Beginning in March 2009, Institution equity capital and Noncontrolling interests are separately reported in arriving at Total equity capital. FASB Statement No. 157 Fair Value Measurements issued in September 2006 and FASB Statement No. 159 The Fair Value Option for Financial Assets and Financial Liabilities issued in February 2007—both are effective in 2008 with early adoption permitted in 2007. FAS 157 defines fair value and establishes a framework for developing fair value estimates for the fair value measurements that are already required or permitted under other standards. FASB FSP 157-4, issued in April 2009, provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity for the asset or liability have significantly decreased. The FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. The FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Fair value continues to be used for derivatives, trading securities, and available-for-sale securities. Changes in fair value go through earnings for trading securities and most derivatives. Changes in the fair value of available-for-sale securities are reported in other comprehensive income. Available-for-sale securities and held-to-maturity debt securities are written down to fair value if impairment is other than temporary and loans held for sale are reported at the lower of cost or fair value. FAS 159 allows institutions to report certain financial assets and liabilities at fair value with subsequent changes in fair value included in earnings. In general, an institution may elect the fair value option for an eligible financial asset or liability when it first recognizes the instrument on its balance sheet or enters into an eligible firm commitment. FASB Statement No. 158 Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—issued in September 2006 requires a bank to recognize in 2007, and subsequently, the funded status of its postretirement plans on its balance sheet. An overfunded plan is recognized as an asset and an underfunded plan is recognized as a liability. An adjustment is made to equity as accumulated other comprehensive income (AOCI) upon application of FAS 158, and AOCI is adjusted in subsequent periods as net periodic benefit costs are recognized in earnings. FASB Statement No. 156 Accounting for Servicing of Financial Assets—issued in March 2006 and effective in 2007, requires all separately recognized servicing assets and liabilities to be initially measured at fair value and allows a bank the option to subsequently adjust that value by periodic revaluation and recognition of earnings or by periodic amortization to earnings. FASB Statement No. 155 Accounting for Certain Hybrid Financial Instruments—issued in February 2006, requires bifurcation of certain derivatives embedded in interests in securitized financial assets and permits fair value measurement (i.e., a fair value option) for any hybrid financial instrument that contains an embedded derivative that would otherwise require bifurcation under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (FAS 133). In addition, FAS 155 clarifies which interest-only and principalonly strips are not subject to FAS 133. Extended Net Operating Loss Carryback Period for Small Businesses The American Recovery and Reinvestment Act of 2009, which was enacted on February 17, 2009, permits qualifying small businesses, including FDIC-insured institutions, to elect a net operating loss carryback period of three, four, or five years instead of the usual carryback period of two years for any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally accepted accounting principles, institutions may not record the effect of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the first quarter of 2009. Business Combinations and Noncontrolling (Minority) Interests In December 2007, the FASB issued Statement No. 141 (Revised), Business Combinations (FAS 141(R)), and Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements (FAS 160). Under FAS 141(R), all business combinations, including combinations of mutual entities, are to be accounted for by applying the acquisition method. FAS 160 defines a noncontrolling interest, also called a minority interest, as the portion of equity in an institution’s subsidiary not attributable, directly or indirectly, to the parent institution. FAS 160 requires an institution to clearly present in its consolidated financial statements the equity ownership in and results of its subsidiaries that are attributable to the noncontrolling ownership interests in these subsidiaries. FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Similarly, FAS 160 is effective for fiscal years beginning on or after December 15, 2008. Thus, for institutions FDIC Quarterly 22 2009, Volume 3, No. 3 Quarterly Banking Profile Purchased Impaired Loans and Debt Securities—Statement of Position 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer. The SOP applies to loans and debt securities acquired in fiscal years beginning after December 15, 2004. In general, this Statement of Position applies to “purchased impaired loans and debt securities” (i.e., loans and debt securities that a bank has purchased, including those acquired in a purchase business combination, when it is probable, at the purchase date, that the bank will be unable to collect all contractually required payments receivable). Banks must follow Statement of Position 03-3 for Call Report purposes. The SOP does not apply to the loans that a bank has originated, prohibits “carrying over” or creation of valuation allowances in the initial accounting, and any subsequent valuation allowances reflect only those losses incurred by the investor after acquisition. GNMA Buy-back Option—If an issuer of GNMA securities has the option to buy back the loans that collateralize the GNMA securities, when certain delinquency criteria are met, FASB Statement No. 140 requires that loans with this buyback option must be brought back on the issuer’s books as assets. The rebooking of GNMA loans is required regardless of whether the issuer intends to exercise the buy-back option. The banking agencies clarified in May 2005 that all GNMA loans that are rebooked because of delinquency should be reported as past due according to their contractual terms. FASB Interpretation No. 46—The FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities, in January 2003 and revised it in December 2003. Generally, banks with variable interests in variable interest entities created after December 31, 2003, must consolidate them. The timing of consolidation varies with certain situations with application as late as 2005. The assets and liabilities of a consolidated variable interest entity are reported on a line-by-line basis according to the asset and liability categories shown on the bank’s balance sheet, as well as related income items. Most small banks are unlikely to have any “variable interests” in variable interest entities. FASB Interpretation No. 48 on Uncertain Tax Positions—FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), was issued in June 2006 as an interpretation of FASB Statement No. 109, Accounting for Income Taxes. Under FIN 48, the term “tax position” refers to “a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities.” FIN 48 further states that a “tax position can result in a permanent reduction of income taxes payable, a deferral of income taxes otherwise currently payable to future years, or a change in the expected realizability of deferred tax assets.” FIN 48 was originally issued effective for fiscal years beginning after December 15, 2006. Banks must adopt FIN 48 for Call Report purposes in accordance with the interpretation’s effective date except as follows. On December 31, 2008, the FASB decided to defer the effective date of FIN 48 for eligible nonpublic enterprises and to require those enterprises to adopt FIN 48 for annual periods beginning after December 15, 2008. A nonpublic enterprise under certain conditions is eligible for deferral, even if it opted to issue interim or quarterly financial information in 2007 under earlier guidance that reflected the adoption of FIN 48. FDIC Quarterly FASB Statement No. 123 (Revised 2004) and Share-Based Payments—refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2008dec/qbpnot.html FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities—refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2008dec/ qbpnot.html 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, and other assets. All other liabilities—bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities. Assessment base—assessable deposits consist of DIF deposits (deposits insured by the FDIC Deposit Insurance Fund) in banks’ domestic offices with certain adjustments). Assets securitized and sold—total outstanding principal balance of assets securitized and sold with servicing retained or other seller- provided credit enhancements. Capital Purchase Program (CPP)—As announced in October 2008 under the TARP, the Treasury Department purchase of noncumulative perpetual preferred stock and related warrants that is treated as Tier 1 capital for regulatory capital purposes is included in “Total equity capital.” Such warrants to purchase common stock or noncumulative preferred stock issued by publicly-traded banks are reflected as well in “Surplus.” Warrants to purchase common stock or noncumulative preferred stock of not-publicly-traded bank stock classified in a bank’s balance sheet as “Other liabilities.” Construction and development loans—includes loans for all property types under construction, as well as loans for land acquisition and development. Core capital—common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated subsidiaries, less goodwill and other ineligible intangible assets. The amount of eligible intangibles (including servicing rights) included in core capital is limited in accordance with supervisory capital regulations. Cost of funding earning assets—total interest expense paid on deposits and other borrowed money as a percentage of average earning assets. Credit enhancements—techniques whereby a company attempts to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be associated with a given issuance. Deposit Insurance Fund (DIF)—The Bank (BIF) and Savings Association (SAIF) Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform Act to form the DIF. Derivatives notional amount—The notional, or contractual, amounts of derivatives represent the level of involvement in 23 2009, Volume 3, No. 3 the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent the amounts used to calculate contractual cash flows to be exchanged. Derivatives credit equivalent amount—the fair value of the derivative plus an additional amount for potential future credit exposure based on the notional amount, the remaining maturity and type of the contract. Derivatives transaction types: Futures and forward contracts—contracts in which the buyer agrees to purchase and the seller agrees to sell, at a specified future date, a specific quantity of an underlying variable or index at a specified price or yield. These contracts exist for a variety of variables or indices, (traditional agricultural or physical commodities, as well as currencies and interest rates). Futures contracts are standardized and are traded on organized exchanges which set limits on counterparty credit exposure. Forward contracts do not have standardized terms and are traded over the counter. Option contracts—contracts in which the buyer acquires the right to buy from or sell to another party some specified amount of an underlying variable or index at a stated price (strike price) during a period or on a specified future date, in return for compensation (such as a fee or premium). The seller is obligated to purchase or sell the variable or index at the discretion of the buyer of the contract. Swaps—obligations between two parties to exchange a series of cash flows at periodic intervals (settlement dates), for a specified period. The cash flows of a swap are either fixed, or determined for each settlement date by multiplying the quantity (notional principal) of the underlying variable or index by specified reference rates or prices. Except for currency swaps, the notional principal is used to calculate each payment but is not exchanged. Derivatives underlying risk exposure—the potential exposure characterized by the level of banks’ concentration in particular underlying instruments, in general. Exposure can result from market risk, credit risk, and operational risk, as well as, interest rate risk. Domestic deposits to total assets—total domestic office deposits as a percent of total assets on a consolidated basis. Earning assets—all loans and other investments that earn interest or dividend income. Efficiency ratio—Noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net operating revenues that are absorbed by overhead expenses, so that a lower value indicates greater efficiency. Estimated insured deposits—in general, insured deposits are total domestic deposits minus estimated uninsured deposits. Beginning March 31, 2008, for institutions that file Call reports, insured deposits are total assessable deposits minus estimated uninsured deposits. 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 some insurance funds in order to continue operating. FDIC Quarterly Fair Value—the valuation of various assets and liabilities on the balance sheet—including trading assets and liabilities, available-for-sale securities, loans held for sale, assets and liabilities accounted for under the fair value option, and foreclosed assets—involves the use of fair values. During periods of market stress, the fair values of some financial instruments and nonfinancial assets may decline. FHLB advances—all borrowings by FDIC insured institutions from the Federal Home Loan Bank System (FHLB), as reported by Call Report filers and by TFR filers. Goodwill and other intangibles—intangible assets include servicing rights, purchased credit card relationships, and other identifiable intangible assets. Goodwill is the excess of the purchase price over the fair market value of the net assets acquired, less subsequent impairment adjustments. Other intangible assets are recorded at fair value, less subsequent quarterly amortization and impairment adjustments. Loans secured by real estate—includes home equity loans, junior liens secured by 1–4 family residential properties, and all other loans secured by real estate. Loans to individuals—includes outstanding credit card balances and other secured and unsecured consumer loans. Long-term assets (5+ years)—loans and debt securities with remaining maturities or repricing intervals of over five years. Maximum credit exposure—the maximum contractual credit exposure remaining under recourse arrangements and other seller-provided credit enhancements provided by the reporting bank to securitizations. Mortgage-backed securities—certificates of participation in pools of residential mortgages and collateralized mortgage obligations issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below. Net charge-offs—total loans and leases charged off (removed from balance sheet because of uncollectibility), less amounts recovered on loans and leases previously charged off. Net interest margin—the difference between interest and dividends earned on interest-bearing assets and interest paid to depositors and other creditors, expressed as a percentage of average earning assets. No adjustments are made for interest income that is tax exempt. Net loans to total assets—loans and lease financing receivables, net of unearned income, allowance and reserves, as a percent of total assets on a consolidated basis. Net operating income—income excluding discretionary transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from operating income have been adjusted to exclude the portion applicable to securities gains (or losses). Noncurrent assets—the sum of loans, leases, debt securities, and other assets that are 90 days or more past due, or in nonaccrual status. Noncurrent loans & leases—the sum of loans and leases 90 days or more past due, and loans and leases in nonaccrual status. Number of institutions reporting—the number of institutions that actually filed a financial report. 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, 24 2009, Volume 3, No. 3 Quarterly Banking Profile mortgage indebtedness, obligations under capitalized leases and trading liabilities, less revaluation losses on assets held in trading accounts. Other real estate owned—primarily foreclosed property. Direct and indirect investments in real estate ventures are excluded. The amount is reflected net of valuation allowances. For institutions that file a Thrift Financial Report (TFR), the valuation allowance subtracted also includes allowances for other repossessed assets. Also, for TFR filers the components of other real estate owned are reported gross of valuation allowances. Percent of institutions with earnings gains—the percent of institutions that increased their net income (or decreased their losses) compared to the same period a year earlier. “Problem” institutions—federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. “Problem” institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either a “4” or “5.” The number and assets of “problem” institutions are based on FDIC composite ratings. Prior to March 31, 2008, 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—net income (including gains or losses on securities and extraordinary items) as a percentage of average total assets. The basic yardstick of bank profitability. Return on equity—net income (including gains or losses on securities and extraordinary items) as a percentage of average total equity capital. Risk-based capital groups—definition: (Percent) Well-Capitalized Adequately capitalized Undercapitalized Significantly undercapitalized Critically undercapitalized Tier 1 Risk-Based Capital* Total Risk-Based Capital* Tier 1 Leverage Tangible Equity ≥10 and ≥6 and ≥5 – ≥8 ≥6 and and ≥4 ≥3 and and ≥4 ≥3 – – <6 or <3 or <3 – – – and Risk Categories and Assessment Rate Schedule—The current risk categories became effective January 1, 2007. Capital ratios and supervisory ratings distinguish one risk category from another. The following table shows the relationship of risk categories (I, II, III, IV) to capital and supervisory groups as well as the initial base assessment rates (in basis points), effective April 1, 2009 for each risk category. Supervisory Group A generally includes institutions with CAMELS composite ratings of 1 or 2; Supervisory Group B generally includes institutions with a CAMELS composite rating of 3; and Supervisory Group C generally includes institutions with CAMELS composite ratings of 4 or 5. For purposes of riskbased assessment capital groups, undercapitalized includes institutions that are significantly or critically undercapitalized. Supervisory Group Capital Category 1. Well Capitalized 2. Adequately Capitalized 3. Undercapitalized A I 12–16 bps II 22 bps B C II 22 bps III 32 bps III 32 bps IV 45 bps Effective April 1, 2009, the initial base assessment rates are 12 to 45 basis points. An institution’s total assessment rate may be less than or greater than its initial base assessment rate as a result of additional risk adjustments. The base assessment rates for most institutions in Risk Category I are based on a combination of financial ratios and CAMELS component ratings (the financial ratios method). For large institutions in Risk Category I (generally those with at least $10 billion in assets) that have long-term debt issuer ratings, assessment rates are determined by equally weighting the institution’s CAMELS component ratings, long-term debt issuer ratings, and the financial ratios method assessment rate. For all large Risk Category I institutions, additional risk factors are considered to determine whether assessment rates should be adjusted. This additional information includes market data, financial performance measures, considerations of the ability of an institution to withstand financial stress, and loss severity indicators. Any adjustment is limited to no more than one basis point. Effective April 1, 2009, the FDIC introduced three possible adjustments to an institution’s initial base assessment rate: (1) a decrease of up to 5 basis points for long-term unsecured debt and, for small institutions, a portion of Tier 1 capital; (2) an increase not to exceed 50 percent of an institution’s assessment rate before the increase for secured liabilities in excess of 25 percent of domestic deposits; and (3) for nonRisk Category I institutions, an increase not to exceed 10 basis points for brokered deposits in excess of 10 percent of domestic deposits. After applying all possible adjustments, >2 ≤2 * As a percentage of risk-weighted assets. FDIC Quarterly 25 2009, Volume 3, No. 3 minimum and maximum total base assessment rates for each risk category are as follows: generally equal to the total principal amount of the pool of assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the form of securities issued to investors. Subchapter S Corporation—a Subchapter S corporation is treated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any federal income taxes at the corporate level. This can have the effect of reducing institutions’ reported taxes and increasing their after-tax earnings. Temporary Liquidity Guarantee Program (TLGP)—was approved by the FDIC Board on October 13, 2008. The TLGP was designed to help relieve the crisis in the credit markets by giving banks access to liquidity during a time of global financial distress. Participation in the TLGP is voluntary. The TLGP has two components: Transaction Account Guarantee Program provides a full guarantee of non-interest-bearing deposit transaction accounts above $250,000, at depository institutions that elected to participate in the program. The guarantee is in effect until December 31, 2009. Debt Guarantee Program provides a full guarantee of senior unsecured debt1 issued by eligible institutions after October 14, 2008. Initially, debt issued before June 30, 2009, and maturing on or before June 30, 2012. could be guaranteed. On March 17, 2009, the deadline for issuance under the program was extended to October 31, 2009, and the expiration of the guarantee was set at the earlier of maturity of the debt or December 31, 2012. Institutions eligible for participation in the debt guarantee program include insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of an insured depository institution that the FDIC designates as eligible entities. Trust assets—market value, or other reasonably available value of fiduciary and related assets, to include marketable securities, and other financial and physical assets. Common physical assets held in fiduciary accounts include real estate, equipment, collectibles, and household goods. Such fiduciary assets are not included in the assets of the financial institution. Unearned income & contra accounts—unearned income for Call Report filers only. Unused loan commitments—includes credit card lines, home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused commitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for sale, which are accounted for as derivatives on the balance sheet.) Volatile liabilities—the sum of large-denomination time deposits, foreign-office deposits, federal funds purchased, securities sold under agreements to repurchase, and other borrowings. Yield on earning assets—total interest, dividend, and fee income earned on loans and investments as a percentage of average earning assets. Total Base Assessment Rates* Risk Category I Risk Category II Risk Category III Risk Category IV Initial base assessment rate 12–16 22 32 45 Unsecured debt adjustment -5 – 0 -5–0 -5 – 0 -5– 0 Secured liability adjustment 0 – 8 0 –11 0 –16 0 –22.5 Brokered deposit adjustment – 0 –10 0 –10 0 –10 Total base assessment rate 7–24.0 17–43.0 27–58.0 40–77.5 *All amounts for all risk categories are in basis points annually. Total base rates that are not the minimum or maximum rate will vary between these rates. Beginning in 2007, each institution is assigned a risk-based rate for a quarterly assessment period near the end of the quarter following the assessment period. Payment is generally due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are effective for assessment purposes as of the examination transmittal date. For institutions with long-term debt issuer ratings, changes in ratings are effective for assessment purposes as of the date the change was announced. Special Assessment—On May 22, 2009, the FDIC board approved a final rule that imposed a 5 basis point special assessment as of June 30, 2009. The special assessment was levied on each insured depository institution’s assets minus its Tier 1 capital as reported in its report of condition as of June 30, 2009. The special assessment will be collected September 30, 2009, at the same time that the risk-based assessment for the second quarter of 2009 is collected. The special assessment for any institution was capped at 10 basis points of the institution’s assessment base for the second quarter of 2009 risk-based assessment. 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 “heldto-maturity,” which are reported at amortized cost (book value), and securities designated as “available-for-sale,” reported at fair (market) value. Securities gains (losses)—realized gains (losses) on held-to- maturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers also include gains (losses) on the sales of assets held for sale. Seller’s interest in institution’s own securitizations—the reporting bank’s ownership interest in loans and other assets that have been securitized, except an interest that is a form of recourse or other seller-provided credit enhancement. Seller’s interests differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is FDIC Quarterly Senior unsecured debt generally includes term Federal funds purchased, promissory notes, commercial paper, unsubordinated unsecured notes, certificates of deposit (CDs) standing to the credit of a bank, and U.S. dollar denominated bank deposits owed to an insured depository institution. 1 26 2009, Volume 3, No. 3