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Quarterly Banking Profile Second Quarter 2010 INSURED INSTITUTION PERFORMANCE Insured Institutions Reported $21.6 Billion in Net Income ■ Provisions for Loan Losses Fell to Lowest Level in Two Years ■ Asset Quality Indicators Improved During the Quarter ■ Balance Sheets Continued to Shrink ■ than $1 billion in assets) reported year-over-year declines. Reductions were more prevalent among larger institutions. More than half (56.2 percent) of institutions with assets greater than $1 billion had lower provisions in the second quarter. Quarterly Earnings Are Highest in Almost Three Years Reductions in loan-loss provisions underscored improvement in asset quality indicators during second quarter 2010. The industry’s quarterly earnings of $21.6 billion are up dramatically from the year-ago loss of $4.4 billion and represent the highest quarterly earnings since third quarter 2007. Almost two out of three institutions (65.5 percent) reported higher year-over-year quarterly net income. The proportion of institutions reporting quarterly net losses remained high at 20 percent but was down from more than 29 percent a year earlier. Margins Improve at a Majority of Banks Net interest income was $8.5 billion (8.6 percent) higher than a year ago, as more than 70 percent of all institutions reported year-over-year increases. Net interest margins at almost 60 percent of institutions (58.6 per ent) c improved from a year earlier, as average funding costs fell more rapidly than average asset yields. The magnitude of the increase in net interest income was largely attributable to the application of Financial Accounting Standards Board (FASB) Statements 166 and 167 in 2010 at a small number of institutions with significant levels of securitized consumer loans; among other things, the new rules require that revenues from securitized loan pools that had previously been included in noninterest income be reflected in net interest income.1 Reduced Loan-Loss Provisions Boost Net Income Insured institutions added $40.3 billion in provisions to their loan-loss allowances in the second quarter. While still high by historic standards, this is the smallest total since the industry set aside $37.2 billion in first quarter 2008 and is $27.1 billion (40.2 percent) less than the industry’s provisions in second quarter 2009. Fewer than half of all institutions (41.3 percent) reported yearover-year reductions in quarterly loss provisions. Only 40 percent of community banks (institutions with less 1 Chart 1 See Notes to Users. Chart 2 Net Income Continued to Recover Two out of Three Institutions Reported Improved Earnings Billions of Dollars 60 Percent of Institutions with Year-over-Year Increases in Quarterly Net Income 70 50 40 36.9 38.0 38.0 35.3 35.6 36.8 60 28.7 30 19.3 20 10 17.8 4.8 0.9 0.5 5.5 -4.4 -20 40 -1.7 30 20 Securities and Other Gains/Losses, Net Net Operating Income -30 -40 50 2.0 0 -10 21.6 10 -37.8 1 2 3 2006 FDIC Quarterly 4 1 2 3 4 2007 1 2 3 2008 4 1 2 3 2009 4 0 1 2 2010 1 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2006 2008 2010 2005 2007 2009 2010, Volume 4, No. 3 one-to-four family residential mortgage loans were down by $1.4 billion (16.0 percent). Credit card charge-offs were $8.6 billion (86 percent) higher than in second quarter 2009. Most, if not all, of this increase was attributable to the inclusion of charge-offs on securitized credit card balances, which were not included in reported charge-offs in previous years. The change in reporting was the result of the application of FASB 166 and 167. In contrast, the $1.8 billion (107.2 percent) year-over-year increase in charge-offs of nonfarm nonresidential real estate loans reflected further deterioration in commercial real estate portfolios. Almost half (49.1 percent) of insured institutions with more than $1 billion in assets reported lower net charge-offs, while only 43.6 percent of community banks reported yearover-year declines. Noninterest Income Is Lower Noninterest expense was $1.5 billion (1.5 percent) less than in second quarter 2009, when insured institutions paid $5.6 billion in a special assessment to bolster the Deposit Insurance Fund. More than half of all institutions (52.1 percent) reported year-over-year reductions in quarterly noninterest expense. Noninterest income was $7.6 billion (11.0 percent) lower than a year earlier, with some of the decline reflecting reporting changes attributable to FASB 166 and 167. The components of noninterest income that registered the largest year-over-year declines were servicing income (down $6.9 billion, or 63.9 percent) and gains on sales of loans and other assets (down $4.4 billion, or 89 percent). Income from service charges on deposit accounts was $752 million (7.1 percent) lower than a year earlier at banks that filed Call Reports. This is the seventh consecutive quarter that service charge income has declined year-over-year. Noncurrent Loans Post First Decline in More than Four Years Net charge-offs totaled $49 billion in the second quarter, a $214-million (0.4 percent) decline from a year earlier and the first year-over-year decline since fourth quarter 2006. Charge-offs were lower than a year ago in most major loan categories except for credit cards and real estate loans secured by nonfarm nonresidential properties. Charge-offs on loans to commercial and industrial (C&I) borrowers were $3.1 billion (37.0 percent) lower than a year ago, while charge-offs on real estate construction and development (C&D) loans were $2.7 billion (34.6 percent) lower. Charge-offs of The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) declined by $19.6 billion (4.8 percent) during the second quarter. This is the first quarterly decline in noncurrent loans since first quarter 2006. Noncurrent levels declined in most major loan categories during the quarter. The sole exception was nonfarm nonresidential real estate loans, where noncurrents increased by $547 million (1.2 percent), the smallest quarterly increase in three years. The largest reduction in noncurrent loans in the quarter occurred in real estate C&D loans, where noncurrents fell by $5.9 billion (8.3 percent). This is the third consecutive quarter that noncurrent C&D loans have declined. Noncurrent C&I loans also Chart 3 Chart 4 Charge-Offs Fall for First Time Since 2006 Margins Improved at Community Banks Lower Loan-Loss Provisions Helped Lift Profits Quarterly Net Interest Margin (Percent) 4.5 Year-over-Year Change in Quarterly Earnings (Billions of Dollars) 50 Positive Factors Assets < $1 Billion 45 $1.5 Decline in Noninterest Expenses 40 $3.1 $3.4 Increase in Realized Gains on Securities Decline in Extraordinary Losses $8.5 Increase in Net Interest Income 35 30 4.0 3.5 25 Negative Factors 20 15 3.80 3.76 $27.1 Decline in Loss 10 5 Provisions $7.6 $10.0 3.0 Decline in Noninterest Income Increase in Income Taxes Assets > $1 Billion 2.5 0 FDIC Quarterly 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2005 2006 2007 2008 2009 2010 2010, Volume 4, No. 3 Quarterly Banking Profile declined for a third straight quarter, falling by $2.7 billion (7.3 percent), while noncurrent residential mortgage loans declined by $4.7 billion (2.5 percent) and noncurrent credit cards fell by $4.2 billion (19 percent). Slightly fewer than half of all institutions (48.9 percent) reported declines in their noncurrent loan balances during the quarter. Noncurrent loan balances fell by 5.3 percent at institutions with more than $1 billion in assets and rose by 0.3 percent at community banks. Rising Securities Values Contribute to Equity Capital Growth Bank equity capital increased by $27.4 billion (1.9 percent), as retained earnings contributed $8.7 billion and appreciation of securities holdings added $13.7 billion. More than half of all institutions (52.7 percent) increased their leverage capital ratios during the quarter, while an even larger percentage (57.6 percent) increased their total risk-based capital ratios. Insured institutions paid $12.9 billion in dividends in the second quarter, more than double the $6.1 billion they paid a year earlier. Reserves Fall as Large Banks Reduce Loan-Loss Provisions Total loan-loss reserves of insured institutions fell for the first time since fourth quarter 2006, declining by $11.8 billion (4.5 percent), as net charge-offs of $49 billion exceeded loss provisions of $40.3 billion. Almost two out of three institutions (61.7 percent) increased their loss reserves in the second quarter, but a number of large banks reduced their loss provisions, producing net declines in their reserve balances. In particular, some institutions that converted equity capital into reserves in the first quarter in accordance with the requirements of FASB 166 and 167 reported lower provisioning in the second quarter. Although the industry’s ratio of reserves to total loans fell from 3.50 percent to 3.40 percent during the quarter, it is still the second-highest level for this ratio in the 63 years for which data are available. The industry’s “coverage ratio” of reserves to noncurrent loans improved for a second consecutive quarter, from 64.9 percent to 65.1 percent, as the reduction in noncurrent loans slightly outpaced the decline in loss reserves. Loan Balances Continue to Decline Chart 5 Chart 6 Industry assets declined for the fifth time in the past six quarters. Total assets fell by $136.2 billion (1 percent), as net loan and lease balances declined by $95.7 billion (1.3 percent). All major loan categories had reduced balances during the quarter. Real estate C&D loans fell by $34.7 billion (8.3 percent), credit card balances dropped by $17.6 billion (2.5 percent), residential mortgage loans declined by $13.2 billion (0.7 percent), and C&I loans were down $12.1 billion (1 percent). Loans to small businesses and farms declined by $13.3 billion (1.8 percent) during the quarter, while loans to larger businesses and farms fell by $5.3 billion (0.4 percent). Balances at Federal Reserve banks declined by $49 billion (8.2 percent) during the quarter at banks that filed Call Reports. Intangible assets fell by $15.1 billion (3.6 percent), led by a $13.9 billion (18.7 percent) decline in mortgage servicing assets. The few areas of asset growth in the second quarter included federal Asset Quality Indicators Are Showing Signs of a Turnaround Institutions Are Reducing the Riskiness of Their Asset Portfolios Risk-Weighted Assets to Total Assets (Percent) 9/30/2000 78 Percent of Total Loans & Leases 6 5 4 Noncurrent Loan Rate 6/30/2007 76 74 72 Quarterly Net Charge-off Rate 70 3 68 2 66 64 1 62 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 FDIC Quarterly 60 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 3 2010, Volume 4, No. 3 funds sold and securities purchased under resale agreements (up $11.3 billion, or 2.7 percent), and U.S. Treas ry securities (up $8.1 billion, or 5.2 percent). The u industry continued to reduce holdings of riskier assets; the ratio of risk-weighted assets (as defined for riskbased capital purposes) to total assets fell from 69.4 percent to 69.1 percent during the quarter. This is the lowest level for this ratio since the second quarter of 1995. No New Charters Were Added During the Quarter The number of FDIC-insured institutions reporting financial results fell by 104 in the second quarter, from 7,934 to 7,830. This is the first time in almost ten years that the number of reporting institutions has fallen by more than 100 in a single quarter (the number declined by 113 in third quarter 2000). During the quarter, 57 institutions were absorbed by mergers into other charters, including 29 charters that were consolidated as part of a single corporate reorganization, and 45 insured institutions failed. For the first time in the 38 years for which data are available, no new insured institutions were added during the quarter. The number of institutions on the FDIC’s “Problem List” increased from 775 to 829 during the quarter. Total assets of “problem” institutions fell, from $431 billion to $403 billion. Banks Reduce Nondeposit Funding Deposits fell for the second quarter in a row, declining by $57.8 billion (0.6 percent). Interest-bearing deposits in domestic offices were down by $45.4 billion (0.7 percent), while noninterest-bearing domestic deposits increased by $20.8 billion (1.4 percent). Deposits in foreign offices declined by $33.2 billion (2.2 percent). Nondeposit liabilities fell by $105.4 billion (3.9 percent), as institutions reduced Federal Home Loan Bank advances by $35 billion (7.3 percent) and short-term unsecured borrowings by $48.2 billion (23 percent). Author: Ross Waldrop, Sr. Banking Analyst Division of Insurance and Research (202) 898-3951 Chart 8 Chart 7 The Number of “Problem” Institutions Is Highest in 17 Years Banks Are Relying Less on Nondeposit Liabilities Twelve-Month Growth Rate (Percent) Number of Institutions 900 30 20 600 0 552 500 -20 416 400 Nondeposit Liabilities Insured Deposits Uninsured Deposits -10 300 252 200 117 100 48 50 47 50 53 61 65 76 90 -30 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2003 2004 2005 2006 2007 2008 2009 2010 FDIC Quarterly 4 829 702 700 10 -40 775 800 1 2 3 2006 4 1 2 3 2007 4 1 305 171 2 3 2008 4 1 2 3 2009 4 1 2 2010 2010, Volume 4, 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 ������������������������������������������������������������������������������������� � 2010** 0.61 5.48 8.77 3.31 2.74 -0.60 3.81 567.08 7,830 6,676 1,154 20.32 829 $403 86 0 2009** 0.03 0.30 8.24 2.77 2.25 0.00 3.43 -77.21 8,195 6,995 1,200 27.70 416 $300 45 0 2009 0.07 0.71 8.63 3.36 2.50 -5.30 3.47 50.78 8,012 6,839 1,173 30.68 702 $403 140 8 2008 0.03 0.35 7.47 1.91 1.29 6.19 3.16 -90.70 8,305 7,086 1,219 24.88 252 $159 25 5 2007 0.81 7.75 7.97 0.95 0.59 9.88 3.29 -27.59 8,534 7,283 1,251 12.09 76 $22 3 0 2006 1.28 12.30 8.22 0.54 0.39 9.03 3.31 8.52 8,680 7,401 1,279 7.94 50 $8 0 0 2005 1.28 12.43 8.24 0.50 0.49 7.64 3.47 11.40 8,833 7,526 1,307 6.22 52 $7 0 0 * 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 2010 7,830 2,033,662 1st Quarter 2010 7,934 2,027,247 2nd Quarter 2009 8,195 2,093,066 %Change 09Q2-10Q2 -4.5 -2.8 $13,220,551 4,336,825 1,874,335 1,081,004 383,313 654,450 1,174,939 1,359,543 699,404 58,270 468,562 2,794 7,395,345 251,290 7,144,055 2,527,735 49,285 409,757 3,089,719 $13,356,798 4,401,538 1,887,551 1,090,644 418,017 659,871 1,187,070 1,380,445 716,998 55,600 480,905 2,711 7,502,849 263,065 7,239,783 2,531,647 46,265 424,879 3,114,224 $13,300,007 4,651,638 2,012,537 1,086,496 535,733 672,906 1,364,713 1,037,135 398,233 58,352 516,323 2,903 7,625,258 211,157 7,414,102 2,336,957 33,928 431,395 3,083,625 -0.6 -6.8 -6.9 -0.5 -28.5 -2.7 -13.9 31.1 75.6 -0.1 -9.3 -3.7 -3.0 19.0 -3.6 8.2 45.3 -5.0 0.2 Total liabilities and capital���������������������������������������������������������������������������������������������� Deposits ������������������������������������������������������������������������������������������������������������������ � Domestic office deposits��������������������������������������������������������������������������������� Foreign office deposits������������������������������������������������������������������������������������ Other borrowed funds��������������������������������������������������������������������������������������������� Subordinated debt��������������������������������������������������������������������������������������������������� All other liabilities���������������������������������������������������������������������������������������������������� Total equity capital (includes minority interests)���������������������������������������������������� Bank equity capital ������������������������������������������������������������������������������������������ � 13,220,551 9,140,980 7,667,695 1,473,285 1,911,837 150,986 510,148 1,506,599 1,487,435 13,356,798 9,198,770 7,692,326 1,506,444 2,051,791 150,540 476,035 1,479,662 1,459,993 13,300,007 9,021,146 7,555,214 1,465,932 2,159,362 168,125 529,986 1,421,388 1,403,711 -0.6 1.3 1.5 0.5 -11.5 -10.2 -3.7 6.0 6.0 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***���������������������������������������������������������������������������������� 125,191 385,805 71,614 1,381,160 11,389,950 445,400 6,007,195 17,606,001 1,411,808 225,433,522 141,492 405,395 64,412 1,386,427 11,554,019 480,364 6,104,579 18,096,538 1,413,926 218,068,203 141,247 331,899 46,577 1,365,416 11,436,792 634,642 6,305,132 16,975,455 1,865,371 208,656,901 -11.4 16.2 53.8 1.2 -0.4 -29.8 -4.7 3.7 -24.3 8.0 (dollar figures in millions) � Number of institutions reporting������������������������������������������������������������������������������������ Total employees (full-time equivalent)��������������������������������������������������������������������������� CONDITION DATA Total assets �������������������������������������������������������������������������������������������������������������������� � Loans secured by real estate���������������������������������������������������������������������������������� 1-4 family residential mortgages��������������������������������������������������������������������� Nonfarm nonresidential����������������������������������������������������������������������������������� Construction and development Home equity lines�������������������������������������������������������������������������������������������� � Commercial & industrial loans�������������������������������������������������������������������������������� Loans to individuals������������������������������������������������������������������������������������������������ � Credit cards������������������������������������������������������������������������������������������������������ Farm loans��������������������������������������������������������������������������������������������������������������� Other loans & leases����������������������������������������������������������������������������������������������� Less: Unearned income������������������������������������������������������������������������������������������ Total loans & leases������������������������������������������������������������������������������������������������ Less: Reserve for losses ���������������������������������������������������������������������������������������� � Net loans and leases ���������������������������������������������������������������������������������������������� � Securities ���������������������������������������������������������������������������������������������������������������� � Other real estate owned ����������������������������������������������������������������������������������������� � Goodwill and other intangibles������������������������������������������������������������������������������� All other assets�������������������������������������������������������������������������������������������������������� INCOME DATA Total interest income������������������������������������������������������������������� Total interest expense����������������������������������������������������������������� Net interest income�������������������������������������������������������������� Provision for loan and lease losses�������������������������������������������� Total noninterest income������������������������������������������������������������� Total noninterest expense����������������������������������������������������������� Securities gains (losses)������������������������������������������������������������� Applicable income taxes������������������������������������������������������������� Extraordinary gains, net�������������������������������������������������������������� Total net income (includes minority interests) �������������������� � Bank net income����������������������������������������������������������� � Net charge-offs���������������������������������������������������������������������������� Cash dividends���������������������������������������������������������������������������� Retained earnings����������������������������������������������������������������������� Net operating income����������������������������������������������������������� First Half 2010 $273,091 56,617 216,474 91,145 122,275 192,790 3,737 17,928 -174 40,449 40,080 100,747 17,317 22,763 37,904 First Half 2009 $279,906 81,498 198,409 128,197 136,630 196,686 839 4,900 -3,655 2,440 2,022 86,723 13,374 -11,352 5,682 *** Call Report filers only. FDIC Quarterly %Change -2.4 -30.5 9.1 -28.9 -10.5 -2.0 345.7 265.9 N/M N/M N/M 16.2 29.5 N/M 567.1 2nd Quarter 2010 $135,182 27,648 107,534 40,303 60,865 97,930 2,148 10,307 -232 21,775 21,597 48,959 12,934 8,662 20,487 2nd Quarter 2009 $137,832 38,786 99,047 67,370 68,419 99,449 -927 315 -3,624 -4,221 -4,376 49,173 6,139 -10,515 -161 %Change 09Q2-10Q2 -1.9 -28.7 8.6 -40.2 -11.0 -1.5 N/M N/M N/M N/M N/M -0.4 110.7 N/M N/M N/M - Not Meaningful. 5 2010, Volume 4, No. 3 TABLE III-A. Second Quarter 2010, All FDIC-Insured Institutions Asset Concentration Groups* Second Quarter All Insured (The way it is...) Institutions Number of institutions reporting���������������������� � 7,830 Commercial banks������������������������������������ � 6,676 Savings institutions����������������������������������� 1,154 Total assets (in billions)������������������������������������ $13,220.6 Commercial banks������������������������������������ � 11,969.0 Savings institutions����������������������������������� 1,251.5 Total deposits (in billions) �������������������������������� � 9,141.0 Commercial banks������������������������������������ � 8,242.6 Savings institutions����������������������������������� 898.3 Bank net income (in millions)��������������������������� 21,597 Commercial banks������������������������������������ � 19,706 Savings institutions����������������������������������� 1,891 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��������������� � Structural Changes New charters��������������������������������������������� Institutions absorbed by mergers������������� Failed institutions�������������������������������������� Credit Card International Agricultural Commercial Banks Banks Banks Lenders 20 4 1,579 4,265 16 4 1,575 3,809 4 0 4 456 $718.5 $3,059.4 $189.0 $4,358.4 694.4 3,059.4 188.5 3,894.1 24.1 0.0 0.5 464.3 272.4 1,980.5 155.0 3,323.2 257.9 1,980.5 154.6 3,002.5 14.4 0.0 0.4 320.6 2,582 7,737 489 2,271 2,277 7,737 488 1,762 305 0 1 508 Mortgage Consumer Lenders Lenders 745 83 195 67 550 16 $794.9 $96.8 203.4 51.1 591.5 45.8 530.1 80.6 99.0 40.1 431.2 40.5 1,287 304 547 171 740 133 Other Specialized All Other <$1 Billion <$1 Billion 293 779 263 698 30 81 $38.1 $124.4 33.2 102.0 4.8 22.4 28.6 102.7 25.2 85.0 3.5 17.7 145 145 91 241 54 -96 All Other >$1 Billion 62 49 13 $3,841.1 3,743.0 98.1 2,668.0 2,597.8 70.1 6,638 6,392 246 4.72 0.97 3.76 1.84 2.95 1.22 0.62 0.96 0.65 5.86 2.64 12.58 1.40 11.19 2.90 4.14 6.37 1.30 2.22 1.41 8.74 11.60 3.45 0.73 2.72 2.23 2.81 0.44 0.92 1.39 1.00 11.05 1.81 5.30 1.35 3.95 0.66 2.65 0.47 1.01 1.20 1.04 9.23 0.65 4.91 1.15 3.76 1.37 3.08 1.32 0.16 0.37 0.21 1.91 1.96 4.53 1.44 3.09 1.04 2.10 0.69 0.71 1.08 0.65 6.56 1.13 5.77 1.27 4.50 1.98 2.68 1.55 1.27 2.00 1.27 11.98 2.20 3.85 1.03 2.82 6.82 7.22 0.17 1.45 2.05 1.53 8.48 0.61 4.99 1.28 3.71 0.94 3.60 0.31 0.41 0.49 0.47 4.12 0.46 3.97 0.70 3.27 2.04 2.84 0.92 0.71 1.00 0.70 5.65 1.90 82.32 56.47 20.22 65.53 64.87 30.83 15.00 85.00 68.46 61.34 0.00 100.00 114.10 61.25 8.36 67.19 99.52 63.59 28.32 64.97 102.77 53.05 14.50 70.34 93.43 42.51 7.23 73.49 107.20 76.70 13.65 53.58 119.58 71.01 10.65 62.90 91.91 57.61 4.84 74.19 0 57 45 0 0 0 0 0 0 0 8 1 0 46 42 0 0 0 0 0 0 0 0 0 0 1 1 0 2 1 PRIOR Second QUARTERS (The way it was...) Return on assets (%)������������������������������� 2009 ������������������������������������� 2007 ������������������������������������� 2005 -0.13 1.22 1.28 -0.73 3.34 3.18 -0.54 0.99 0.71 0.78 1.26 1.35 -0.20 1.18 1.35 0.56 0.91 1.22 0.64 3.04 1.40 1.28 2.31 1.60 0.70 1.10 1.09 0.29 1.26 1.37 Net charge-offs to loans & leases (%)���� 2009 ������������������������������������� 2007 ������������������������������������� 2005 2.56 0.49 0.42 10.78 3.89 4.18 3.07 0.60 0.66 0.61 0.15 0.15 2.07 0.28 0.21 1.27 0.25 0.09 2.80 1.85 1.11 0.71 0.25 0.40 0.51 0.18 0.34 2.31 0.32 0.17 * See Table IV-A (page 8) for explanations. FDIC Quarterly 6 2010, Volume 4, No. 3 Quarterly Banking Profile TABLE III-A. Second Quarter 2010, All FDIC-Insured Institutions Asset Size Distribution Second QUARTER All Insured (The way it is...) Institutions Number of institutions reporting���������������������������� � 7,830 Commercial banks������������������������������������������ � 6,676 Savings institutions����������������������������������������� 1,154 Total assets (in billions)������������������������������������������ $13,220.6 Commercial banks������������������������������������������ � 11,969.0 Savings institutions����������������������������������������� 1,251.5 Total deposits (in billions) �������������������������������������� � 9,141.0 Commercial banks������������������������������������������ � 8,242.6 Savings institutions����������������������������������������� 898.3 Bank net income (in millions)��������������������������������� 21,597 Commercial banks������������������������������������������ � 19,706 Savings institutions����������������������������������������� 1,891 Geographic Regions* Less than $100 $1 Billion Greater $100 Million to to than Million $1 Billion $10 Billion $10 Billion New York 2,745 4,425 555 105 969 2,434 3,737 421 84 506 311 688 134 21 463 $154.6 $1,325.1 $1,428.5 $10,312.3 $2,692.6 137.5 1,083.5 1,086.8 9,661.2 2,017.0 17.1 241.6 341.7 651.1 675.6 129.2 1,089.2 1,083.1 6,839.4 1,743.4 115.8 899.8 823.6 6,403.5 1,271.1 13.5 189.5 259.5 435.9 472.4 217 948 506 19,926 5,000 170 877 234 18,424 4,069 47 70 272 1,502 932 Atlanta 1,064 939 125 $2,987.3 2,864.2 123.2 2,099.3 2,008.4 90.9 1,649 1,683 -34 Chicago 1,619 1,332 287 $2,866.0 2,738.1 127.9 1,951.8 1,856.5 95.3 5,538 5,557 -20 Kansas City 1,852 1,754 98 $1,656.3 1,607.8 48.5 1,207.3 1,170.4 36.9 3,029 3,013 15 San Dallas Francisco 1,643 683 1,524 621 119 62 $787.6 $2,230.7 695.3 2,046.6 92.3 184.1 617.5 1,521.6 543.0 1,393.1 74.5 128.5 1,419 4,962 1,155 4,228 264 734 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��������������������� � 4.72 0.97 3.76 1.84 2.95 1.22 0.62 0.96 0.65 5.86 2.64 82.32 56.47 20.22 65.53 5.26 1.34 3.93 1.38 3.78 0.49 0.52 0.73 0.56 4.64 0.69 115.56 76.04 20.62 62.11 5.21 1.43 3.79 0.94 3.21 0.83 0.24 0.42 0.29 2.82 1.12 110.74 71.46 19.59 67.10 4.95 1.29 3.66 1.19 2.93 1.24 0.14 0.33 0.14 1.29 1.91 100.47 63.10 23.96 67.93 4.61 0.85 3.77 2.05 2.91 1.27 0.73 1.12 0.77 6.85 3.03 78.62 53.81 16.19 76.19 5.38 1.13 4.25 1.71 2.79 1.53 0.73 1.10 0.75 5.83 4.09 66.46 49.75 15.58 75.13 4.38 0.92 3.46 1.58 2.83 1.32 0.19 0.38 0.22 1.95 2.55 92.10 60.91 39.57 61.65 3.86 0.82 3.04 2.08 3.01 0.75 0.66 1.10 0.76 8.57 1.90 80.96 62.84 17.67 63.62 5.81 0.84 4.98 2.19 3.55 1.89 0.74 1.08 0.73 6.31 2.93 92.73 51.79 15.12 66.09 4.95 1.03 3.91 1.66 3.44 0.86 0.69 0.94 0.72 6.87 1.24 105.35 65.80 13.27 63.48 4.62 1.09 3.52 1.80 2.63 0.93 0.88 1.32 0.89 7.71 2.09 86.34 53.06 33.24 65.89 Structural Changes New charters��������������������������������������������������� Institutions absorbed by mergers������������������� Failed institutions�������������������������������������������� 0 57 45 0 16 9 0 31 26 0 10 9 0 0 1 0 3 4 0 30 11 0 5 12 0 13 6 0 5 2 0 1 10 PRIOR Second QUARTERS (The way it was…) Return on assets (%)������������������������������������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 -0.13 1.22 1.28 0.04 0.85 1.09 -0.17 1.14 1.24 -0.83 1.11 1.35 -0.03 1.25 1.28 -0.56 1.05 1.29 -0.05 1.25 1.34 0.18 1.05 0.93 0.74 1.54 1.55 0.21 1.15 1.28 -0.71 1.41 1.63 Net charge-offs to loans & leases (%)���������� 2009 ��������������������������������������������2007 ��������������������������������������������2005 2.56 0.49 0.42 0.91 0.14 0.19 1.14 0.18 0.19 2.23 0.33 0.24 2.89 0.57 0.51 2.91 0.84 0.69 2.26 0.26 0.18 2.40 0.37 0.26 2.56 0.63 0.51 1.32 0.23 0.23 3.39 0.59 0.63 * See Table IV-A (page 9) for explanations. FDIC Quarterly 7 2010, Volume 4, No. 3 TABLE IV-A. First Half 2010, All FDIC-Insured Institutions Asset Concentration Groups* First Half All Insured (The way it is...) Institutions � 7,830 Number of institutions reporting���������������������������������������� Commercial banks������������������������������������������������������ � 6,676 Savings institutions����������������������������������������������������� 1,154 $13,220.6 Total assets (in billions)������������������������������������������������������ Commercial banks������������������������������������������������������ � 11,969.0 Savings institutions����������������������������������������������������� 1,251.5 Total deposits (in billions) �������������������������������������������������� � 9,141.0 Commercial banks������������������������������������������������������ � 8,242.6 Savings institutions����������������������������������������������������� 898.3 Bank net income (in millions)��������������������������������������������� 40,080 Commercial banks������������������������������������������������������ � 36,038 Savings institutions����������������������������������������������������� 4,042 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 20 4 1,579 4,265 745 83 293 779 62 16 4 1,575 3,809 195 67 263 698 49 4 0 4 456 550 16 30 81 13 $718.5 $3,059.4 $189.0 $4,358.4 $794.9 $96.8 $38.1 $124.4 $3,841.1 694.4 3,059.4 188.5 3,894.1 203.4 51.1 33.2 102.0 3,743.0 24.1 0.0 0.5 464.3 591.5 45.8 4.8 22.4 98.1 272.4 1,980.5 155.0 3,323.2 530.1 80.6 28.6 102.7 2,668.0 257.9 1,980.5 154.6 3,002.5 99.0 40.1 25.2 85.0 2,597.8 14.4 0.0 0.4 320.6 431.2 40.5 3.5 17.7 70.1 3,647 13,579 945 4,765 2,851 648 269 397 12,979 3,128 13,579 943 3,816 1,398 418 164 473 12,119 520 0 1 949 1,453 230 105 -76 859 4.81 1.00 3.81 1.85 2.92 1.38 0.57 0.88 0.61 5.48 2.74 90.47 55.37 20.32 61.07 14.65 1.65 12.99 3.07 4.49 7.97 1.03 1.72 1.11 6.02 13.44 73.72 29.79 10.00 90.00 3.52 0.73 2.79 2.22 2.84 0.65 0.80 1.19 0.87 9.79 2.16 85.72 61.31 0.00 100.00 5.28 1.37 3.91 0.63 2.64 0.44 0.98 1.16 1.01 9.03 0.53 128.21 62.17 7.92 61.18 4.91 1.18 3.73 1.35 3.01 1.35 0.18 0.35 0.22 2.03 1.89 104.77 63.06 28.82 61.17 4.55 1.47 3.08 0.97 1.96 0.72 0.74 1.14 0.72 7.41 1.16 104.29 50.79 14.77 66.31 5.89 1.33 4.56 1.97 2.68 1.45 1.38 2.17 1.38 13.00 2.39 78.94 42.14 6.02 75.90 3.87 1.05 2.82 6.94 7.40 0.19 1.39 1.94 1.43 7.91 0.56 127.94 77.52 14.68 49.49 5.02 1.31 3.70 0.92 3.31 0.30 0.60 0.75 0.64 5.70 0.43 125.51 70.61 9.76 55.97 4.02 0.73 3.29 2.15 2.80 1.11 0.69 0.99 0.68 5.57 2.09 100.25 55.20 1.61 75.81 86.15 86.18 83.97 91.76 88.31 93.23 94.43 89.24 91.69 83.29 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�������������������������������������� 3.40 65.13 9.87 377.17 4.04 59.77 1.55 78.84 2.60 55.95 1.51 33.05 2.85 227.76 1.79 82.92 1.42 67.10 2.94 44.45 3.31 11.25 8.77 12.44 15.09 78.15 54.04 58.00 2.18 16.62 11.53 13.36 16.39 198.47 75.24 33.66 2.61 9.27 7.24 12.22 15.34 52.82 34.19 31.95 1.70 11.33 10.13 14.10 15.24 77.61 63.64 82.00 3.90 11.01 9.09 11.78 14.01 86.75 66.14 74.74 3.03 10.02 9.25 19.00 20.05 87.40 58.29 66.61 1.04 10.65 10.37 14.12 15.87 87.49 72.82 82.19 0.79 18.34 16.11 35.95 36.86 34.25 25.77 74.83 1.59 11.37 10.63 17.75 18.90 66.42 54.84 82.56 3.70 12.29 8.79 11.84 14.97 72.81 50.57 59.77 Structural Changes New charters��������������������������������������������������������������� Institutions absorbed by mergers������������������������������� Failed institutions�������������������������������������������������������� 3 94 86 0 0 0 0 0 0 0 12 2 2 74 79 0 0 2 0 0 0 0 0 1 0 2 1 1 6 1 PRIOR first halves (The way it was…) Number of Institutions������������������������������������������������2009 ��������������������������������������������������������2007 ��������������������������������������������������������2005 8,195 8,614 8,868 24 26 29 5 4 6 1,551 1,645 1,731 4,637 4,731 4,545 808 805 953 80 118 118 294 377 422 743 851 1,005 53 57 59 Total assets (in billions)����������������������������������������������2009 ��������������������������������������������������������2007 ��������������������������������������������������������2005 $13,300.0 12,261.4 10,474.4 $484.8 395.0 372.3 $3,204.0 2,544.3 1,927.3 $170.1 155.6 139.0 $5,947.0 4,789.0 3,648.1 $933.4 1,551.0 1,642.0 $84.0 117.7 146.2 $36.0 42.4 49.9 $101.7 113.1 127.5 $2,338.9 2,553.3 2,422.2 Return on assets (%)��������������������������������������������������2009 ��������������������������������������������������������2007 ��������������������������������������������������������2005 0.03 1.21 1.31 -1.04 3.58 3.18 0.05 0.96 0.81 0.88 1.22 1.31 -0.18 1.15 1.34 0.57 0.91 1.21 0.28 2.54 1.35 0.73 2.23 1.58 0.79 1.07 1.14 0.42 1.27 1.44 Net charge-offs to loans & leases (%)�����������������������2009 ��������������������������������������������������������2007 ��������������������������������������������������������2005 2.25 0.47 0.44 9.57 3.84 4.26 2.73 0.58 0.70 0.47 0.15 0.13 1.76 0.25 0.21 1.13 0.24 0.09 2.71 1.86 1.16 0.81 0.23 0.31 0.42 0.16 0.29 2.04 0.31 0.17 Noncurrent assets plus OREO to assets (%)��������������������������������������������2009 ��������������������������������������������������������2007 ��������������������������������������������������������2005 2.77 0.62 0.48 2.45 1.28 1.17 2.25 0.41 0.53 1.45 0.81 0.68 3.36 0.70 0.48 2.96 0.81 0.41 1.14 0.63 0.44 0.72 0.23 0.26 1.30 0.60 0.60 2.23 0.46 0.37 Equity capital ratio (%)�����������������������������������������������2009 ��������������������������������������������������������2007 ��������������������������������������������������������2005 10.55 10.43 10.38 24.51 23.96 21.70 8.42 7.64 8.46 11.08 11.13 10.96 10.54 10.68 10.09 9.47 10.22 10.89 9.95 13.73 12.08 16.59 20.98 18.40 11.36 11.10 11.06 10.91 10.39 9.91 *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 2010, Volume 4, No. 3 Quarterly Banking Profile TABLE IV-A. First Half 2010, All FDIC-Insured Institutions Asset Size Distribution First Half All Insured Less than (The way it is...) Institutions $100 Million � 7,830 2,745 Number of institutions reporting�������������������� Commercial banks���������������������������������� � 6,676 2,434 Savings institutions��������������������������������� 1,154 311 $13,220.6 $154.6 Total assets (in billions)���������������������������������� Commercial banks���������������������������������� � 11,969.0 137.5 Savings institutions��������������������������������� 1,251.5 17.1 Total deposits (in billions) ������������������������������ � 9,141.0 129.2 Commercial banks���������������������������������� � 8,242.6 115.8 Savings institutions��������������������������������� 898.3 13.5 Bank net income (in millions)������������������������� 40,080 429 Commercial banks���������������������������������� � 36,038 342 Savings institutions��������������������������������� 4,042 87 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 4,425 555 105 969 3,737 421 84 506 688 134 21 463 $1,325.1 $1,428.5 $10,312.3 $2,692.6 1,083.5 1,086.8 9,661.2 2,017.0 241.6 341.7 651.1 675.6 1,089.2 1,083.1 6,839.4 1,743.4 899.8 823.6 6,403.5 1,271.1 189.5 259.5 435.9 472.4 2,398 1,657 35,596 8,892 2,108 876 32,711 7,056 290 781 2,884 1,836 Atlanta Chicago 1,064 1,619 939 1,332 125 287 $2,987.3 $2,866.0 2,864.2 2,738.1 123.2 127.9 2,099.3 1,951.8 2,008.4 1,856.5 90.9 95.3 4,063 9,336 4,013 9,402 50 -66 Kansas City 1,852 1,754 98 $1,656.3 1,607.8 48.5 1,207.3 1,170.4 36.9 5,760 5,646 114 San Dallas Francisco 1,643 683 1,524 621 119 62 $787.6 $2,230.7 695.3 2,046.6 92.3 184.1 617.5 1,521.6 543.0 1,393.1 74.5 128.5 2,873 9,155 2,436 7,484 437 1,671 4.81 1.00 3.81 1.85 2.92 1.38 0.57 0.88 0.61 5.48 2.74 5.27 1.37 3.89 1.39 3.79 0.47 0.52 0.72 0.56 4.62 0.65 5.23 1.47 3.76 0.91 3.15 0.76 0.31 0.49 0.36 3.60 0.98 4.98 1.33 3.64 1.22 2.87 1.23 0.21 0.44 0.23 2.14 1.76 4.72 0.88 3.84 2.07 2.89 1.50 0.66 0.99 0.69 6.16 3.23 5.55 1.19 4.37 1.72 2.81 1.71 0.66 1.00 0.67 5.20 4.10 4.47 0.95 3.52 1.70 2.78 1.48 0.25 0.42 0.27 2.42 2.63 3.91 0.84 3.07 2.06 3.03 0.94 0.55 0.88 0.64 7.28 2.11 5.91 0.88 5.03 2.26 3.48 2.10 0.70 1.03 0.69 6.00 3.13 4.94 1.05 3.89 1.53 3.31 0.85 0.68 0.94 0.73 7.01 1.22 4.66 1.10 3.56 1.76 2.57 1.11 0.81 1.22 0.82 7.21 2.22 90.47 55.37 20.32 61.07 118.93 76.51 20.95 58.11 115.31 71.58 19.73 62.01 107.69 61.76 22.52 66.31 87.56 52.63 17.14 71.43 75.20 49.18 15.38 73.27 98.78 58.31 40.60 57.52 90.88 63.21 17.36 57.88 98.31 50.09 13.77 60.53 105.44 65.18 13.15 59.10 96.89 51.69 37.77 63.10 86.15 91.10 91.40 90.36 84.82 86.12 83.92 86.22 87.01 90.17 87.04 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����������������� 3.40 65.13 1.64 61.60 1.82 50.66 2.32 51.75 3.86 68.42 3.77 102.33 3.27 51.82 3.29 57.87 3.78 63.36 2.14 56.93 3.41 68.83 3.31 11.25 8.77 12.44 15.09 78.15 54.04 58.00 2.37 12.20 11.56 17.78 18.89 72.58 60.65 83.56 3.38 10.23 9.60 13.73 14.95 79.87 65.65 82.15 3.62 11.08 9.60 13.91 15.30 82.94 62.89 75.27 3.28 11.39 8.50 12.00 15.02 77.23 51.22 52.12 2.22 12.95 9.73 13.88 16.23 83.01 53.75 57.43 4.04 11.44 8.00 11.21 14.40 77.20 54.25 62.57 3.17 9.15 7.28 10.97 14.30 70.12 47.76 53.85 4.62 11.55 9.12 11.19 13.81 90.62 66.05 66.98 3.16 10.59 9.46 13.23 14.95 81.77 64.10 77.86 2.93 11.65 10.12 15.15 16.89 72.85 49.70 44.20 Structural Changes New charters������������������������������������������ Institutions absorbed by mergers���������� Failed institutions����������������������������������� 3 94 86 0 33 20 1 48 49 2 12 16 0 1 1 0 7 7 2 34 25 0 9 16 0 22 11 1 11 5 0 11 22 PRIOR first halves (The way it was…) Number of Institutions��������������������������� 2009 ����������������������������������� 2007 ����������������������������������� 2005 8,195 8,614 8,868 3,013 3,582 3,996 4,484 4,371 4,266 582 538 492 116 123 114 996 1,070 1,109 1,164 1,216 1,214 1,685 1,806 1,897 1,914 2,000 2,079 1,680 1,750 1,812 756 772 757 Total assets (in billions)������������������������� 2009 ����������������������������������� 2007 ����������������������������������� 2005 $13,300.0 12,261.4 10,474.4 $165.4 189.8 207.5 $1,347.9 1,295.4 1,209.8 $1,500.8 1,410.7 1,351.2 $10,286.0 9,365.4 7,705.9 $2,458.2 2,261.8 2,729.8 $3,493.7 3,004.5 2,579.4 $3,124.6 2,830.9 2,426.9 $1,063.0 910.0 765.4 $777.4 674.4 570.0 $2,383.0 2,579.7 1,402.8 Return on assets (%)����������������������������� 2009 ����������������������������������� 2007 ����������������������������������� 2005 0.03 1.21 1.31 0.15 0.85 1.07 0.06 1.11 1.23 -0.50 1.13 1.34 0.10 1.24 1.32 -0.24 1.09 1.28 0.12 1.23 1.40 0.15 1.06 0.97 0.65 1.64 1.61 -0.25 1.13 1.28 -0.17 1.30 1.63 Net charge-offs to loans & leases (%)�� 2009 ����������������������������������� 2007 ����������������������������������� 2005 2.25 0.47 0.44 0.76 0.14 0.15 0.95 0.16 0.18 1.81 0.29 0.24 2.57 0.56 0.54 2.56 0.82 0.72 1.97 0.24 0.19 2.01 0.34 0.29 2.35 0.63 0.55 1.13 0.21 0.21 3.03 0.58 0.63 Noncurrent assets plus OREO to assets (%)����������������������� 2009 ����������������������������������� 2007 ����������������������������������� 2005 2.77 0.62 0.48 2.04 0.81 0.72 2.94 0.75 0.54 3.44 0.67 0.44 2.67 0.59 0.47 1.81 0.60 0.49 3.08 0.42 0.31 2.87 0.63 0.55 3.12 1.10 0.76 2.44 0.66 0.58 3.13 0.68 0.47 Equity capital ratio (%)�������������������������� 2009 ����������������������������������� 2007 ����������������������������������� 2005 10.55 10.43 10.38 12.44 13.42 12.16 9.92 10.48 10.29 10.60 11.28 10.86 10.60 10.24 10.26 12.52 12.48 10.70 10.97 9.83 10.00 8.55 9.01 9.30 10.79 10.00 10.83 9.96 10.57 9.64 10.63 11.01 12.34 * 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 2010, Volume 4, No. 3 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* June 30, 2010 All Insured Institutions Credit Card Banks International Agricultural Commercial Mortgage Banks Banks Lenders Lenders Consumer Lenders Other All Other All Other Specialized <$1 >$1 <$1 Billion Billion Billion Percent of Loans 30-89 Days Past Due All loans secured by real estate��������������������������������������� Construction and development �������������������������������� � Nonfarm nonresidential �������������������������������������������� � Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential �������������������������������������� � Commercial and industrial loans������������������������������������� Loans to individuals ��������������������������������������������������������� � Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases ����������������������������������������������������� � 1.96 2.36 1.14 1.06 1.16 2.79 0.80 2.06 2.19 1.91 0.51 1.69 1.25 0.00 0.00 0.00 1.95 1.18 2.60 2.22 2.18 3.02 0.08 2.23 2.78 2.48 0.62 0.56 1.53 4.28 0.43 2.07 2.62 1.86 0.35 1.86 1.13 1.88 1.00 1.34 0.62 1.67 1.36 1.82 1.48 1.83 0.78 1.11 1.59 2.31 1.19 1.27 0.85 2.13 0.96 1.74 1.70 1.75 0.54 1.43 1.89 5.90 1.49 1.68 1.18 1.89 1.03 1.51 3.16 1.06 0.76 1.85 1.07 0.46 1.84 3.87 0.94 1.14 1.29 1.70 1.11 1.98 0.32 1.51 1.34 0.77 0.90 1.16 0.49 1.86 1.01 1.93 2.50 1.86 0.76 1.34 1.66 1.97 1.21 1.85 0.82 1.97 1.63 2.02 1.63 2.03 0.68 1.63 2.35 2.24 1.00 0.64 1.25 3.44 0.55 2.07 2.49 1.99 0.59 1.84 Percent of Loans Noncurrent** All real estate loans���������������������������������������������������������� Construction and development.................................. Nonfarm nonresidential �������������������������������������������� � Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential �������������������������������������� � Commercial and industrial loans������������������������������������� Loans to individuals ��������������������������������������������������������� � Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases ����������������������������������������������������� � 7.32 16.87 4.28 4.16 1.71 9.75 2.91 1.95 2.58 1.28 1.49 5.21 4.89 0.00 0.00 0.00 2.28 6.11 2.95 2.61 2.57 3.32 0.17 2.62 10.63 19.04 5.64 4.17 1.93 17.67 5.25 2.06 2.61 1.86 2.03 6.75 2.38 10.12 2.87 2.88 0.80 1.61 2.34 0.75 0.75 0.75 0.96 1.97 5.81 16.53 4.01 4.38 1.18 5.41 2.51 1.43 2.87 1.12 1.33 4.65 4.81 15.06 3.67 3.20 1.79 4.93 3.02 1.07 3.16 0.50 0.42 4.57 1.15 4.51 2.56 1.74 0.82 1.14 0.72 1.32 1.14 1.40 1.15 1.24 2.66 6.98 2.37 3.60 0.90 2.33 1.38 0.95 1.21 0.92 0.85 2.15 2.38 7.09 2.79 3.51 0.82 1.85 2.35 0.71 0.84 0.71 0.98 2.11 9.99 18.78 5.44 3.62 2.09 14.26 2.34 1.18 2.85 0.87 1.24 6.61 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 ����������������������������������������������������� � 1.97 5.14 1.12 1.20 2.89 1.65 1.90 7.01 12.15 2.18 0.74 2.74 4.91 0.00 0.00 0.00 9.02 4.24 17.20 13.72 13.73 13.62 0.01 13.44 2.42 2.78 1.10 0.98 2.80 2.99 1.46 3.32 6.27 2.24 0.68 2.16 0.48 2.96 0.50 0.83 0.68 0.34 1.31 0.55 2.35 0.50 0.00 0.53 1.91 5.54 1.16 1.37 1.42 1.45 1.72 2.56 8.12 1.39 1.20 1.89 1.04 6.21 0.69 0.91 3.72 0.75 1.53 3.42 10.53 1.30 0.55 1.16 1.66 1.68 0.51 1.70 2.25 1.08 5.57 2.36 5.06 1.18 3.05 2.37 0.47 0.80 0.35 1.63 0.22 0.47 0.56 1.09 5.17 0.60 0.35 0.56 0.34 1.76 0.26 0.72 0.31 0.23 0.95 0.65 2.85 0.61 0.27 0.43 2.38 4.18 1.16 0.92 4.13 1.89 1.10 3.04 9.57 1.65 0.58 2.09 Loans Outstanding (in billions) All real estate loans���������������������������������������������������������� Construction and development �������������������������������� � Nonfarm nonresidential �������������������������������������������� � Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential �������������������������������������� � Commercial and industrial loans������������������������������������� Loans to individuals ��������������������������������������������������������� � Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases (plus unearned income) ������������� � $4,336.8 383.3 1,081.0 214.7 654.5 1,874.3 1,174.9 1,359.5 699.4 660.1 526.8 7,398.1 $0.1 0.0 0.0 0.0 0.0 0.1 32.4 564.6 537.4 27.1 2.7 599.8 $526.1 8.5 31.3 40.9 131.4 266.3 191.6 206.1 56.1 150.0 167.4 1,091.3 $72.1 4.5 20.7 1.6 1.5 19.2 15.7 6.3 0.1 6.1 28.1 122.2 $2,041.9 273.9 783.7 128.6 220.7 593.6 553.7 217.5 39.3 178.2 147.4 2,960.5 $434.8 8.4 27.4 9.0 26.6 362.4 11.0 21.5 4.6 16.9 3.2 470.5 $18.0 0.4 0.9 0.1 9.1 7.5 3.9 50.5 16.3 34.2 0.7 73.2 $6.7 0.5 2.2 0.2 0.2 3.2 1.3 1.3 0.1 1.2 0.6 10.0 $50.8 $1,186.2 3.1 83.8 12.6 202.1 1.2 33.1 2.3 262.5 28.3 593.8 6.7 358.7 7.1 284.6 0.1 45.2 6.9 239.4 4.7 172.0 69.2 2,001.5 Memo: Other Real Estate Owned (in millions) All other real estate owned ���������������������������������������������� � Construction and development �������������������������������� � Nonfarm nonresidential �������������������������������������������� � Multifamily residential real estate����������������������������� 1-4 family residential������������������������������������������������� Farmland ������������������������������������������������������������������� � GNMA properties������������������������������������������������������ 49,285.2 18,002.8 8,980.2 2,790.3 13,722.1 317.6 5,280.5 -15.5 0.0 0.0 0.0 0.1 0.0 0.0 3,967.0 28.0 157.0 852.0 1,219.0 0.0 1,514.0 787.5 278.4 236.1 39.7 172.4 60.7 0.3 31,844.5 15,522.4 7,191.2 1,252.3 6,749.3 233.4 882.2 2,459.7 467.7 208.2 46.1 1,540.7 8.8 191.8 41.1 13.4 8.8 0.1 18.5 0.3 0.0 72.7 26.9 24.4 1.2 19.4 0.8 0.0 505.5 142.7 137.8 25.4 189.0 10.6 0.0 9,622.8 1,523.4 1,016.7 573.6 3,813.8 3.0 2,692.3 * See Table IV-A (page 8) for explanations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 10 2010, Volume 4, No. 3 Quarterly Banking Profile TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution June 30, 2010 Geographic Regions* Less than $100 $1 Billion Greater All Insured $100 Million to to than Institutions Million $1 Billion $10 Billion $10 Billion New York Atlanta Chicago Kansas City Dallas San Francisco Percent of Loans 30-89 Days Past Due All loans secured by real estate������������������������������ Construction and development ����������������������� � Nonfarm nonresidential ����������������������������������� � Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential ����������������������������� � Commercial and industrial loans���������������������������� Loans to individuals ������������������������������������������������ � Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases �������������������������������������������� � 1.96 2.36 1.14 1.06 1.16 2.79 0.80 2.06 2.19 1.91 0.51 1.69 1.69 2.15 1.46 1.13 0.88 2.11 1.73 2.22 2.38 2.22 0.78 1.63 1.46 2.13 1.25 1.29 0.84 1.67 1.27 1.81 2.49 1.76 0.66 1.41 1.29 1.98 1.05 1.01 0.83 1.48 0.92 1.91 2.06 1.86 0.65 1.26 2.25 2.62 1.12 1.02 1.22 3.22 0.72 2.07 2.19 1.93 0.48 1.81 1.54 2.89 1.21 0.85 0.68 1.81 1.24 2.09 2.04 2.28 0.34 1.59 2.14 1.92 1.24 1.54 1.38 3.08 0.62 2.15 2.35 2.04 0.24 1.78 1.94 2.39 1.28 1.21 1.23 2.80 0.78 1.65 1.92 1.56 0.72 1.59 2.32 2.91 1.04 0.91 1.13 3.64 1.03 2.53 2.70 2.27 1.01 2.05 1.64 1.87 0.99 1.27 0.97 2.37 0.91 1.38 1.01 1.57 0.43 1.43 2.07 2.97 0.92 0.65 1.12 3.14 0.47 1.92 2.17 1.77 0.23 1.58 Percent of Loans Noncurrent** All real estate loans������������������������������������������������� Construction and development ����������������������� � Nonfarm nonresidential ����������������������������������� � Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential ����������������������������� � Commercial and industrial loans���������������������������� Loans to individuals ������������������������������������������������ � Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases �������������������������������������������� � 7.32 16.87 4.28 4.16 1.71 9.75 2.91 1.95 2.58 1.28 1.49 5.21 3.09 10.28 3.35 2.80 1.39 2.22 2.69 1.02 1.10 1.01 1.03 2.66 4.08 12.85 3.28 3.50 1.22 2.75 2.44 0.80 1.68 0.75 1.02 3.58 5.39 16.42 3.96 4.56 1.35 4.05 2.49 1.07 1.72 0.84 1.14 4.48 8.64 18.82 4.98 4.21 1.78 12.04 3.03 2.04 2.61 1.36 1.57 5.65 4.78 17.93 3.76 3.12 0.94 4.71 2.92 2.38 2.59 1.62 0.95 3.69 8.92 17.60 4.77 4.88 1.93 12.19 2.27 1.48 2.62 0.88 0.74 6.31 8.15 16.27 4.58 4.56 1.61 13.03 2.62 1.27 2.42 0.90 1.72 5.69 8.88 16.92 4.53 3.58 2.39 13.46 2.77 2.25 2.74 1.49 1.35 5.97 4.83 10.78 2.76 3.80 1.05 5.28 1.68 0.70 0.92 0.59 1.41 3.76 6.58 23.18 4.86 4.90 1.39 7.45 4.75 2.14 2.64 1.84 2.55 4.95 Percent of Loans Charged-off (net, YTD) All real estate loans������������������������������������������������� Construction and development ����������������������� � Nonfarm nonresidential ����������������������������������� � Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential ����������������������������� � Commercial and industrial loans���������������������������� Loans to individuals ������������������������������������������������ � Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases �������������������������������������������� � 1.97 5.14 1.12 1.20 2.89 1.65 1.90 7.01 12.15 2.18 0.74 2.74 0.58 2.68 0.50 0.76 0.65 0.36 1.31 0.77 4.41 0.71 0.00 0.64 0.91 3.18 0.57 0.78 0.68 0.60 1.37 1.40 7.45 1.00 0.48 0.98 1.75 5.91 1.19 1.50 1.23 0.91 1.54 2.66 8.16 1.01 0.86 1.76 2.30 5.65 1.38 1.21 3.18 1.97 2.02 7.52 12.28 2.40 0.77 3.22 1.04 4.28 0.90 0.99 0.82 0.72 3.25 11.91 14.17 4.92 0.52 4.10 2.73 5.61 1.35 1.32 4.28 2.16 1.48 4.65 11.09 1.63 0.41 2.63 2.09 6.11 1.31 1.25 2.08 1.98 1.92 2.87 7.95 1.38 1.48 2.11 2.02 4.25 0.79 0.82 3.79 1.75 1.89 9.04 14.98 1.87 0.76 3.13 1.22 3.31 0.59 0.81 1.55 0.90 1.06 1.96 4.23 0.93 0.49 1.22 2.10 7.06 1.59 1.67 2.56 1.98 1.63 3.76 6.23 2.26 0.45 2.21 Loans Outstanding (in billions) All real estate loans������������������������������������������������� Construction and development ����������������������� � Nonfarm nonresidential ����������������������������������� � Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential ����������������������������� � Commercial and industrial loans���������������������������� Loans to individuals ������������������������������������������������ � Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases (plus unearned income) ���� � $4,336.8 383.3 1,081.0 214.7 654.5 1,874.3 1,174.9 1,359.5 699.4 660.1 526.8 7,398.1 $65.6 5.3 19.6 1.9 2.1 28.1 12.4 6.7 0.1 6.7 10.6 95.4 $694.2 83.4 267.4 32.0 38.2 239.6 111.1 41.4 2.4 38.9 39.8 886.5 $680.6 86.0 269.0 41.6 48.2 224.4 136.3 71.4 18.7 52.7 32.2 920.6 $2,896.4 208.7 525.0 139.2 565.9 1,382.3 915.1 1,240.0 678.2 561.8 444.2 5,495.7 $826.5 51.6 219.8 58.0 87.2 404.2 179.7 415.3 324.7 90.6 82.8 1,504.3 $1,068.5 122.5 244.9 34.3 191.2 459.6 274.0 228.9 79.3 149.6 104.1 1,675.6 $852.1 62.9 194.5 62.3 176.0 340.0 251.2 195.9 47.6 148.4 116.1 1,415.4 $637.0 55.1 151.4 18.3 116.1 271.7 172.8 231.6 141.3 90.3 95.8 1,137.1 $357.5 55.3 125.1 9.3 24.3 131.5 89.8 44.8 15.0 29.8 24.1 516.2 $595.4 35.9 145.4 32.5 59.6 267.4 207.4 243.0 91.6 151.4 103.9 1,149.6 Memo: Other Real Estate Owned (in millions) All other real estate owned ������������������������������������� � Construction and development ����������������������� � Nonfarm nonresidential ����������������������������������� � Multifamily residential real estate�������������������� 1-4 family residential���������������������������������������� Farmland ���������������������������������������������������������� � GNMA properties��������������������������������������������� 49,285.2 18,002.8 8,980.2 2,790.3 13,722.1 317.6 5,280.5 1,088.7 353.0 330.4 36.9 342.3 24.6 2.0 12,872.6 6,239.5 3,183.1 444.9 2,832.8 171.4 5.0 10,356.2 5,570.4 2,185.0 413.3 2,028.3 90.4 71.3 24,967.6 5,839.8 3,281.7 1,895.2 8,518.8 31.2 5,202.3 4,052.3 1,119.8 928.2 258.4 1,499.5 15.8 217.6 14,702.4 5,975.9 1,973.8 437.2 4,681.7 46.8 1,586.9 9,965.5 2,621.7 2,039.5 421.3 2,794.0 67.5 2,019.1 8,583.2 2,896.9 1,560.0 530.5 2,189.3 58.1 1,348.7 5,361.5 2,692.6 1,211.6 151.1 1,188.2 99.3 18.6 6,620.4 2,695.8 1,267.0 991.7 1,369.4 30.1 89.6 * 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 2010, Volume 4, No. 3 TABLE VI-A. Derivatives, All FDIC-Insured Commercial Banks and State-Chartered Savings Banks Asset Size Distribution % Change Less $100 4th Quarter 3rd Quarter 2nd Quarter 09Q2than $100 Million to 2009 2009 2009 10Q2 Million $1 Billion $1 Billion to $10 Greater than Billion $10 Billion (dollar figures in millions; 2nd Quarter 1st Quarter notional amounts unless otherwise indicated) 2010 2010 ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives ���������������� � 1,159 1,148 1,131 1,175 1,214 Total assets of institutions reporting derivatives���������� $10,671,060 $10,766,470 $10,568,242 $10,546,527 $10,593,191 Total deposits of institutions reporting derivatives������� 7,248,761 7,281,825 7,341,335 7,183,905 7,097,228 Total derivatives ������������������������������������������������������������ 225,433,522 218,068,203 213,563,296 210,008,291 208,656,901 � -4.5 0.7 2.1 8.0 92 $6,641 5,534 295 697 $294,434 238,833 20,307 293 77 $858,367 $9,511,619 658,084 6,346,309 74,544 225,338,376 Derivative Contracts by Underlying Risk Exposure Interest rate ������������������������������������������������������������������� 188,614,063 181,989,212 179,565,399 176,204,154 175,648,997 � Foreign exchange*�������������������������������������������������������� 20,245,402 19,201,890 17,297,929 17,709,286 16,640,233 Equity����������������������������������������������������������������������������� 1,615,041 1,570,950 1,685,227 2,182,431 2,041,638 Commodity & other (excluding credit derivatives) ������� � 1,082,812 941,687 978,922 926,295 909,250 Credit����������������������������������������������������������������������������� 13,876,204 14,364,464 14,035,819 12,986,125 � 13,416,784 Total������������������������������������������������������������������������������� 225,433,522 218,068,203 213,563,296 210,008,291 208,656,901 � 7.4 21.7 -20.9 19.1 3.4 8.0 284 0 10 0 0 295 19,791 30 147 75 265 20,307 69,985 188,524,003 3,747 20,241,626 631 1,614,253 135 1,082,602 46 13,875,892 74,544 225,338,376 Derivative Contracts by Transaction Type Swaps���������������������������������������������������������������������������� 141,420,332 136,333,354 142,021,986 139,477,035 137,993,983 Futures & forwards�������������������������������������������������������� 36,793,857 34,096,685 26,495,665 24,944,757 25,885,385 Purchased options �������������������������������������������������������� 15,402,898 � 15,757,710 15,151,690 15,424,802 15,020,266 Written options�������������������������������������������������������������� 15,901,608 � 15,910,612 15,113,322 15,063,214 14,859,851 Total������������������������������������������������������������������������������� 209,518,695 202,098,362 198,782,664 194,909,809 193,759,485 � 2.5 42.1 2.5 7.0 8.1 30 105 15 145 295 9,481 4,744 784 5,033 20,041 52,023 141,358,798 10,496 36,778,512 3,283 15,398,816 8,312 15,888,118 74,114 209,424,245 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���������������������������������� � 98,101 -4,874 305 -574 -222,426 242,561 94,818 1,431 -856 994 -121,491 141,273 96,993 9,671 1,236 1,623 -160,980 188,641 122,592 -5,037 -253 3,615 -234,357 266,208 123,696 -10,568 670 1,156 -474,635 523,242 -20.7 N/M -54.5 N/M N/M -53.6 4 0 0 0 0 0 -18 0 2 4 0 -3 199 -16 4 2 2 -3 97,916 -4,858 298 -580 -222,427 242,566 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 89,000,746 33,347,769 23,099,477 11,959,581 2,356,096 1,306,940 326,742 205,283 80,586 324,203 210,319 30,459 84,010,679 33,334,968 24,119,721 11,092,119 2,440,019 1,328,830 320,739 220,441 83,990 287,660 177,250 31,220 80,979,619 33,638,323 26,141,315 10,416,223 2,448,723 1,343,778 312,066 227,854 81,647 261,429 223,654 34,250 78,128,617 33,977,575 26,620,986 9,674,124 2,405,751 1,325,262 358,462 301,995 82,835 237,860 233,829 43,612 74,833,456 35,928,119 28,371,872 9,490,043 2,293,453 1,193,852 343,416 291,182 75,716 252,705 211,329 45,443 18.9 -7.2 -18.6 26.0 2.7 9.5 -4.9 -29.5 6.4 28.3 -0.5 -33.0 71 17 19 0 0 0 3 1 0 0 0 0 4,854 7,095 2,324 18 4 0 25 60 1 39 17 0 14,272 25,460 19,410 2,515 74 86 129 246 0 51 43 0 88,981,549 33,315,196 23,077,724 11,957,048 2,356,017 1,306,854 326,586 204,976 80,585 324,113 210,260 30,459 57.3 83.6 66.8 80.6 0.2 0.1 0.7 0.1 1.5 0.6 50.6 93.9 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 (%) ������������������������������������������������� � 44.8 82.9 41.2 88.9 45.9 83.3 127.7 130.2 129.2 140.9 147.3 0.3 0.8 2.1 144.5 Credit losses on derivatives***��������������������������������� � 222.2 103.6 767.1 605.3 384.7 -42.2 0.0 0.0 0.9 221.2 HELD FOR TRADING Number of institutions reporting derivatives ���������������� � Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 188 8,882,861 6,078,554 194 8,949,197 6,095,242 197 8,873,918 6,145,573 207 8,911,543 6,014,547 204 8,911,914 5,990,076 -7.8 -0.3 1.5 6 464 381 67 28,598 22,820 58 237,207 181,893 57 8,616,592 5,873,460 Derivative Contracts by Underlying Risk Exposure Interest rate ������������������������������������������������������������������� 186,774,353 180,109,272 177,717,314 174,199,745 173,339,084 � Foreign exchange���������������������������������������������������������� 18,072,001 17,462,255 16,437,639 15,510,657 15,051,809 Equity����������������������������������������������������������������������������� 1,608,817 1,563,707 1,677,767 2,175,796 2,034,228 Commodity & other ������������������������������������������������������� � 1,077,566 934,851 974,849 924,183 906,325 Total������������������������������������������������������������������������������� 207,532,737 200,070,085 196,807,569 192,810,380 191,331,447 � 7.8 20.1 -20.9 18.9 8.5 25 0 0 0 25 1,115 1 1 0 1,116 21,022 2,273 234 32 23,561 186,752,191 18,069,727 1,608,583 1,077,535 207,508,035 Trading Revenues: Cash & Derivative Instruments Interest rate ������������������������������������������������������������������� � Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other (including credit derivatives)�������� Total trading revenues��������������������������������������������������� 144 4,299 378 1,815 6,636 304 3,906 965 3,004 8,178 -1,182 2,560 144 417 1,940 5,436 -1,535 153 1,648 5,702 900 2,132 -92 2,320 5,260 -84.0 101.6 N/M -21.8 26.2 0 0 0 0 0 0 0 0 0 0 32 2 1 0 35 112 4,297 377 1,816 6,601 Share of Revenue Trading revenues to gross revenues (%)���������������������� Trading revenues to net operating revenues (%)��������� � 5.4 45.8 6.6 74.0 1.6 107.9 4.7 88.1 4.0 96.9 0.0 0.0 0.0 0.0 1.1 -97.4 5.5 45.5 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives ���������������� � Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 1,047 10,282,637 7,015,474 1,032 10,344,141 7,034,900 1,010 10,212,051 7,098,523 1,048 10,199,833 6,955,097 1,086 10,216,754 6,847,472 -3.6 0.6 2.5 86 6,177 5,153 631 267,465 217,162 259 754,467 576,815 71 9,254,527 6,216,343 Derivative Contracts by Underlying Risk Exposure Interest rate ������������������������������������������������������������������� � Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other ������������������������������������������������������� � Total notional amount���������������������������������������������������� 1,839,711 134,777 6,224 5,246 1,985,957 1,879,940 134,258 7,243 6,835 2,028,276 1,848,085 115,478 7,459 4,073 1,975,095 2,004,409 86,272 6,635 2,112 2,099,429 2,309,913 107,791 7,410 2,924 2,428,038 -20.4 25.0 -16.0 79.4 -18.2 260 0 10 0 270 18,676 28 146 75 18,925 48,963 1,089 397 103 50,553 1,771,812 133,660 5,670 5,067 1,916,209 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 2010, Volume 4, 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 2010 1st Quarter 2010 4th Quarter 2009 3rd Quarter 2009 2nd Quarter 2009 % Change Less than $100 $1 Billion Greater 09Q2$100 Million to to $10 than $10 10Q2 Million $1 Billion Billion Billion Number of institutions reporting securitization activities����������������������������������������� 129 127 142 142 139 Outstanding Principal Balance by Asset Type 1-4 family residential loans������������������������������������������������������������������������������� $1,180,361 $1,194,588 $1,209,474 $1,225,694 $1,222,193 � Home equity loans��������������������������������������������������������������������������������������������� 0 15 5,947 6,205 6,594 Credit card receivables������������������������������������������������������������������������������������� 15,452 16,133 363,486 391,417 397,918 Auto loans���������������������������������������������������������������������������������������������������������� 486 600 7,182 8,277 10,266 Other consumer loans��������������������������������������������������������������������������������������� 5,021 5,610 24,692 25,335 26,006 Commercial and industrial loans���������������������������������������������������������������������� � 3,796 4,127 7,649 8,436 9,019 All other loans, leases, and other assets*�������������������������������������������������������� 206,692 192,853 198,835 192,077 193,374 � Total securitized and sold����������������������������������������������������������������������������������������� 1,411,808 1,413,926 1,817,266 1,857,441 1,865,371 -7.2 18 61 -3.4 -100.0 -96.1 -95.3 -80.7 -57.9 6.9 -24.3 $262 0 0 0 0 1 5 268 $962 0 830 0 0 7 43 1,841 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��� -17.3 -100.0 -99.5 -99.2 -82.5 -48.9 -17.1 -95.5 -56.1 2 0 0 0 0 0 0 2 1 9 0 215 0 0 0 4 229 0 57 0 0 6 0 86 0 148 1 4,942 0 449 0 245 8 244 5,888 164 Securitized Loans, Leases, and Other Assets 30-89 Days Past Due (%) 1-4 family residential loans������������������������������������������������������������������������������� � Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans���������������������������������������������������������������������� � All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Securitized Loans, Leases, and Other Assets 90 Days or More Past Due (%) 1-4 family residential loans������������������������������������������������������������������������������� � Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans���������������������������������������������������������������������� � All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Securitized Loans, Leases, and Other Assets Charged-off (net, YTD, annualized, %) 1-4 family residential loans������������������������������������������������������������������������������� � Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans���������������������������������������������������������������������� � All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Seller’s Interests in Institution’s Own Securitizations - Carried as Loans Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Commercial and industrial loans���������������������������������������������������������������������� � Seller’s Interests in Institution’s Own Securitizations - Carried as Securities Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Commercial and industrial loans���������������������������������������������������������������������� � Assets Sold with Recourse and Not Securitized 22 28 $2,147 $1,176,990 0 0 0 14,623 67 419 0 5,020 628 3,161 158 206,486 3,000 1,406,700 5,009 0 664 6 245 94 248 6,266 166 5,166 14 730 6 237 95 257 6,506 162 5,780 1,023 134,193 637 1,410 225 287 143,555 387 6,115 1,006 136,043 745 1,434 274 333 145,950 358 6,058 1,063 129,373 722 1,399 184 299 139,100 378 3.7 0.0 1.5 1.2 3.7 0.2 2.6 3.5 3.9 0.0 1.5 1.2 3.3 0.3 2.2 3.6 4.4 1.3 2.7 2.3 3.9 2.3 3.5 4.0 4.6 1.3 2.9 2.4 3.6 2.9 1.2 3.9 4.3 0.8 2.6 2.2 2.9 2.6 1.9 3.7 3.9 0.0 0.0 0.0 0.0 0.0 0.0 3.9 0.8 0.0 2.4 0.0 0.0 26.0 0.0 1.6 2.5 0.0 0.0 1.0 0.0 0.9 0.0 2.0 3.7 0.0 1.5 1.2 3.7 0.0 2.6 3.5 7.8 0.0 0.7 0.2 2.7 0.1 8.5 7.8 8.5 0.0 0.8 0.3 2.7 0.1 7.5 8.2 7.9 2.0 3.0 0.2 3.6 1.0 4.3 6.4 7.5 1.8 2.6 0.3 3.6 1.2 3.7 5.9 6.6 0.9 2.9 0.2 3.3 1.3 1.6 5.2 1.9 0.0 0.0 0.0 0.0 0.0 9.1 2.0 0.5 0.0 3.1 0.0 0.0 0.0 0.0 1.7 3.7 0.0 0.0 0.1 0.0 0.7 0.9 2.9 7.8 0.0 0.5 0.2 2.7 0.0 8.6 7.8 0.4 0.0 4.2 0.4 0.9 0.0 0.0 0.4 0.2 0.0 2.2 0.3 0.4 0.0 0.1 0.2 1.0 1.8 10.2 2.5 1.0 13.9 0.1 2.8 0.7 1.4 7.6 1.9 0.7 10.0 0.0 2.1 0.5 0.9 4.8 1.1 0.5 6.9 0.0 1.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.1 0.0 0.0 0.0 0.0 2.7 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.4 0.0 4.1 0.5 0.9 0.0 0.0 0.4 0 5,088 3 0 4,831 4 316 62,235 894 396 73,401 930 134 68,128 451 -100.0 -92.5 -99.3 0 0 0 0 55 2 0 0 0 0 5,033 0 0 0 0 0 0 0 1 789 0 2 788 0 4 594 0 -100.0 -100.0 0.0 0 0 0 0 0 0 0 0 0 0 0 0 Number of institutions reporting asset sales������������������������������������������������������������ Outstanding Principal Balance by Asset Type 1-4 family residential loans������������������������������������������������������������������������������� � Home equity, credit card receivables, auto, and other consumer loans��������� Commercial and industrial loans���������������������������������������������������������������������� � All other loans, leases, and other assets���������������������������������������������������������� Total sold and not securitized����������������������������������������������������������������������������������� 833 820 826 821 827 0.7 169 507 115 42 62,232 41 541 52,400 115,215 62,219 40 669 48,372 111,299 66,978 908 2,654 48,757 119,298 68,000 1,024 2,844 47,971 119,840 70,505 1,159 3,195 47,560 122,419 -11.7 -96.5 -83.1 10.2 -5.9 2,591 0 1 1 2,593 9,099 9 54 79 9,241 4,151 15 25 301 4,493 46,391 17 461 52,019 98,888 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������������������������������������������������������������������������������������������������� 14,192 21 78 12,748 27,039 13,702 21 62 10,450 24,234 16,534 100 1,934 10,412 28,980 15,419 104 2,003 10,136 27,662 15,837 112 2,224 10,011 28,184 -10.4 -81.3 -96.5 27.3 -4.1 102 0 1 1 104 1,214 7 40 51 1,312 2,445 3 25 13 2,486 10,431 11 12 12,683 23,137 Number of institutions reporting securitization facilities sponsored by others������� Total credit exposure������������������������������������������������������������������������������������������������� 125 9,254 78 6,427 58 4,297 60 4,872 60 3,812 108.3 142.8 31 26 59 201 26 131 9 8,896 Total unused liquidity commitments������������������������������������������������������������������������� 418 846 545 327 475 -12.0 0 0 0 418 5,956,144 5,995,522 5,777,228 Support for Securitization Facilities Sponsored by Other Institutions Other � Assets serviced for others** ������������������������������������������������������������������������������������� Asset-backed commercial paper conduits Credit exposure to conduits sponsored by institutions and others ����������������� � Unused liquidity commitments to conduits sponsored by institutions and others�������������������������������������������������������������������������������������������������� Net servicing income (for the quarter)���������������������������������������������������������������������� Net securitization income (for the quarter)��������������������������������������������������������������� Total credit exposure to Tier 1 capital (%)***������������������������������������������������������������ 6,010,523 5,977,515 5,878,337 1.3 4,065 80,879 93,972 7,315 7,253 15,953 17,649 20,208 -63.8 5 0 84 7,226 78,062 80,156 170,373 182,740 210,026 -62.8 0 0 1,145 76,917 3,916 156 3.7 4,835 13 3.3 8,019 1,615 15.9 5,995 1,163 16.2 10,845 -142 15.8 -63.9 -209.9 32 1 0.7 127 6 1.4 103 2 2.1 3,655 147 4.4 * 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 2010, Volume 4, No. 3 Insurance Fund Indicators DIF Reserve Ratio Rises 10 Basis Points to -0.28 Percent ■ $250,000 Standard Insurance Coverage Becomes Permanent ■ New Law Requires FDIC to Amend Regulations to Redefine the Assessment Base ■ 45 Institutions Fail during Second Quarter ■ Total assets of the nation’s 7,830 FDIC-insured commercial banks and savings institutions decreased by 1.0 percent ($136.2 billion) during second quarter 2010. Total deposits decreased by 0.6 percent ($57.8 billion), foreign office deposits decreased by 2.2 percent ($33.2 billion), and domestic office deposits decreased by 0.3 percent ($24.6 billion). Domestic noninterestbearing deposits increased by 1.4 percent ($20.8 billion), savings deposits and interest bearing checking accounts increased by 1.0 percent ($38.0 billion), and domestic time deposits decreased by 3.7 percent ($83.4 billion). For the 12 months ending June 30, total domestic deposits grew by 1.5 percent ($112.5 billion), with interest-bearing deposits increasing by 0.7 percent ($41.3 billion) and noninterest-bearing deposits rising by 4.8 percent ($71.2 billion). assets, representing 5.3 percent of total outstanding brokered deposits.1 Estimated insured deposits at all FDIC-insured institutions declined by 0.6 percent during second quarter 2010 but increased a net 12.9 percent during the past four quarters. For institutions existing as of March 31, 2010, and June 30, 2010, insured deposits increased during the second quarter at 4,280 institutions (55 percent), decreased at 3,515 institutions (45 percent), and remained unchanged at 35 institutions. The Deposit Insurance Fund (DIF) increased by $5.5 billion during the second quarter to -$15.2 billion (unaudited). The increased amount included $3.2 billion from accrued assessment income, $2.6 billion from a decrease in provisions for insurance losses, and $119 million from interest on securities and other revenue. Unrealized losses on available-for-sale securities combined with operating expenses reduced the fund by $443 million. The share of assets funded by domestic deposits increased from 56.8 percent to 58.0 percent during the past year. In contrast, Federal Home Loan Bank (FHLB) advances as a share of asset funding declined from 4.8 percent to 3.4 percent, repurchase agreements’ share declined from 4.2 percent to 3.7 percent, and the share of foreign office deposits was flat at about 11.0 percent. FHLB advances decreased by 29.8 percent ($189.2 billion) during the 12 months ending June 30. Forty-five insured institutions with combined assets of $47.3 billion failed during second quarter 2010. For 2010 through the end of the second quarter, 86 insured institutions with combined assets of $69.4 billion failed, resulting in an estimated current cost to the DIF of $16.8 billion. The DIF’s reserve ratio was -0.28 percent on June 30, 2010, up from -0.38 percent on March 31, 2010, and down from 0.22 percent one year earlier. The June 30, 2010, figure marked a second consecutive increase; however, it is the third lowest reserve ratio on record, following the December 31, 2009, reserve ratio of -0.39 percent and the March 31, 2010, reserve ratio of -0.38 percent. The deposit insurance coverage limit increase to $250,000 has been reflected in the reserve ratio since third quarter 2009. Brokered deposits decreased by 3.4 percent ($20.5 billion) during the second quarter and have declined by a total of 23.9 percent ($185.1 billion) since being added to the equation for pricing deposit insurance in second quarter 2009. At mid-year 2010, 44 percent (3,465) of FDIC-insured banks and thrifts used brokered deposits to fund a portion of their balance sheet. About 30 percent (1,053) had brokered deposits that exceeded 10 percent of their domestic deposits, down from 40 percent a year earlier. Reciprocal brokered deposits were used by 1,597 institutions to fund $31.3 billion worth of 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. 1 14 2010, Volume 4, No. 3 Quarterly Banking Profile The Act eliminates the requirement that the FDIC d ividend from the fund when the reserve ratio exceeds 1.35 percent, but continues to require dividends when the reserve ratio exceeds 1.50 percent. However, the FDIC Board of Directors may, in its sole discretion, suspend or limit the declaration of payment of assessment dividends. The Act eliminates the maximum l imitation of the reserve ratio and raises the minimum reserve ratio that can be designated by the FDIC Board of Directors from 1.15 percent of estimated insured deposits to not less than 1.35 percent of estimated insured deposits or the comparable percentage of the assessment base. The FDIC is also required to take steps necessary to attain a 1.35 percent reserve ratio by September 30, 2020. When setting the assessments necessary to meet the increased minimum target for the reserve ratio, the FDIC is directed to offset the effect on insured depository institutions with assets less than $10 billion. Dodd-Frank Wall Street Reform and Consumer Protection Act On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which permanently increased the standard maximum deposit insurance coverage to $250,000 (the permanent limit of $100,000 for deposits other than retirement accounts had been temporarily increased to $250,000 until December 31, 2013). The new legislation also made the coverage increase retroactive to January 1, 2008, making the $250,000 deposit insurance limit applicable to six banks that failed between January 1, 2008, and October 3, 2008. The history of FDIC insurance coverage increases is as follows: FDIC Insurance Coverage Limits 1934 – 20102 Year 1934 Standard Coverage Limit ($) 2,500 1934 – 1949 5,000 1950 – 1965 10,000 1966 – 1968 15,000 1968 – 1973 20,000 1974 – 1979 The new law will provide unlimited insurance for noninterest-bearing transaction accounts (separate from the standard $250,000 insurance limit) for two years beginning December 31, 2010. Participation will be mandatory for all insured depository institutions (no opt-outs) with no separate assessment fees for coverage. Only noninterest-bearing transaction accounts will be covered (NOW accounts and any other interest-bearing transaction accounts will not be covered). Beginning March 31, 2011, the noninterest-bearing transaction accounts will be included in insured deposit amounts used to calculate the DIF reserve ratio. 40,000 1980 – 2007 100,000 2008 250,000 On October 3, 2008, the Emergency Economic Stabilization Act of 2008 t emporarily increased the standard deposit insurance coverage limit to $250,000 through December 31, 2009. On May 20, 2009, the Helping Families Save Their Homes Act of 2009 extended the temporary coverage increase to $250,000 through the end of 2013. On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 made the standard coverage limit to $250,000 permanent, and made the increased coverage limit retroactive to J anuary 1, 2008. Coverage for certain retirement accounts increased to $250,000 in 2006. Initial coverage was $2,500 from January 1 to June 30, 1934. 2 The Act also directs the FDIC to amend its regulations to define the assessment base as average total consolidated assets minus average tangible equity during the assessment period, new terms which have not yet been defined by regulations. Following is a table that approximates how industry assets less tangible equity are stratified by institution asset size as of June 30, 2010. Author: Kevin Brown, Sr. Financial Analyst Division of Insurance and Research (202) 898-6817 Distribution of FDIC-Insured Commercial Banks and Savings Institutions3 by Asset Size ($ Billions) Asset Size as of June 30, 2010 Greater than $100 Billion Number of Institutions 19 Percent of Total Institutions 0.2% Total Domestic Deposits 3,785 Percent of Total Domestic Deposits 49.4% Total Assets Less Total Tangible Equity4 7,243 Percent of Total Assets Less Tangible Equity 59.7% $50 to $100 Billion 16 0.2% 670 8.7% 1,012 8.3% $10 to $50 Billion 70 0.9% 920 12.0% 1,262 10.4% 10.6% $1 to $10 Billion 555 7.1% 1,075 14.0% 1,293 Less than $1 Billion 7,170 91.6% 1,218 15.9% 1,333 11.0% 7,830 100.0% 7,668 100.0% 12,143 100.0% Total Data was revised on 9/3/10 to remove insured foreign branch data, which was incomplete. The revised data represents FDIC-insured commercial banks and savings institutions and does not include insured U.S. branches of foreign banks. 4 Data is based on quarter-end balance sheet amounts as of June 30, 2010. These calculations are provided as a rough approximation of how industry assets less tangible equity are stratified by institution asset size; however these calculations are not the equivalent of the future deposit insurance assessment base as defined by the DoddFrank Wall Street Reform and Consumer Protection Act of 2010. The assessment base, with possible exceptions, will be based on an institution’s average consolidated total assets during the assessment period; minus an institution’s average tangible equity during the assessment period. These terms have not yet been defined by regulation. 3 FDIC Quarterly 15 2010, Volume 4, No. 3 Table I-B. Insurance Fund Balances and Selected Indicators (dollar figures in millions) Beginning Fund Balance����� 2nd Quarter 2010* 1st Quarter 2010* 4th Quarter 2009 3rd Quarter 2009 2nd Quarter 2009 Deposit Insurance Fund 1st 4th 3rd Quarter Quarter Quarter 2009 2008 2008 2nd Quarter 2008 1st Quarter 2008 4th Quarter 2007 3rd Quarter 2007 2nd Quarter 2007 -$20,717 -$20,862 -$8,243 $10,368 $13,007 $17,276 $34,588 $45,217 $52,843 $52,413 $51,754 $51,227 $50,745 3,242 3,278 3,042 2,965 9,095 2,615 996 881 640 448 239 170 140 64 62 76 176 240 212 277 526 651 618 585 640 748 0 382 0 345 0 379 732 328 521 298 136 266 302 290 473 249 0 256 0 238 0 262 0 243 0 248 -2,552 3,021 17,766 21,694 11,615 6,637 19,163 11,930 10,221 525 39 132 -3 55 22 2,458 308 375 2 15 16 1 0 -2 24 1 -61 5,470 149 145 -50 -12,619 -770 -18,611 -957 -2,639 -331 -4,269 551 -17,312 -346 -10,629 1,559 -7,626 127 430 138 659 68 527 -162 482 Ending Fund Balance����������� Percent change from four quarters earlier��������� -15,247 -20,717 -20,862 -8,243 10,368 13,007 17,276 34,588 45,217 52,843 52,413 51,754 51,227 NM NM NM NM -77.07 -75.39 -67.04 -33.17 -11.73 4.13 4.48 3.52 3.36 Reserve Ratio (%)����������������� -0.28 -0.38 -0.39 -0.16 0.22 0.27 0.36 0.76 1.01 1.19 1.22 1.22 1.21 5,438,866 5,473,345 5,406,174 5,315,551 4,817,617 4,831,366 4,750,638 4,545,116 4,467,587 4,437,887 4,292,211 4,242,607 4,235,044 12.90 13.29 13.80 16.95 7.83 8.87 10.68 7.13 5.49 4.54 3.33 3.47 4.81 7,685,070 7,702,418 7,705,356 7,561,308 7,561,998 7,546,999 7,505,409 7,230,328 7,036,248 7,076,719 6,921,678 6,747,998 6,698,886 1.63 2.06 2.66 4.58 7.47 6.65 8.43 7.15 5.04 5.58 4.24 4.06 3.91 7,840 7,944 8,022 8,109 8,205 8,257 8,315 8,394 8,462 8,505 8,545 8,570 8,625 Changes in Fund Balance: Assessments earned�������������� Interest earned on investment securities������ Realized Gain on Sale of Investments���������������������� Operating expenses��������������� Provision for insurance losses������������������������������� All other income, net of expenses��������������� Unrealized gain/(loss) on available-for-sale securities������������������������� Total fund balance change����� Estimated Insured Deposits**������������������������������ Percent change from four quarters earlier��������� Domestic Deposits��������������� Percent change from four quarters earlier��������� Number of institutions reporting������������������������� DIF Reserve Ratios Deposit Insurance Fund Balance and Insured Deposits ($ Millions) Percent of Insured Deposits 1.21 1.22 1.22 1.19 DIF Balance 1.01 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 9/09 12/09 3/10 6/10 0.76 0.36 0.27 0.22 -0.16 -0.39 -0.38 -0.28 6/07 12/07 6/08 12/08 6/09 12/09 6/10 DIF-Insured Deposits $51,227 51,754 52,413 52,843 45,217 34,588 17,276 13,007 10,368 -8,243 -20,862 -20,717 -15,247 $4,235,044 4,242,607 4,292,211 4,437,887 4,467,587 4,545,116 4,750,638 4,831,366 4,817,617 5,315,551 5,406,174 5,473,345 5,438,866 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������������������������������������������������������������������������������� � 2010**** 2009**** 2009 2008 2007 2006 2005 829 $403,203 416 $299,837 702 $402,782 252 $159,405 76 $22,189 50 $8,265 52 $6,607 86 $69,396 45 $35,868 140 $169,709 25 $371,945 3 $2,615 0 $0 0 $0 0 $0 8 $1,917,482 8 $1,917,482 5 $1,306,042 0 0 0 0 0 0 * For 2010, preliminary unaudited fund data, which are subject to change. NM - Not meaningful ** 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 Home 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 include the temporary coverage increase to $250,000. The coverage increase to $250,000 became permanent on July 21, 2010, when the President signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. *** Assisted institutions represent five institutions under a single holding company that received assistance in 2008, and eight institutions under a different single holding company that received assistance in 2009. **** Through June 30. FDIC Quarterly 16 2010, Volume 4, 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, 2010 Commercial Banks and Savings Institutions Total Assets Domestic Deposits* Est. Insured Deposits FDIC-Insured Commercial Banks����������������������������������������������� FDIC-Supervised������������������������������������������������������������������� OCC-Supervised ������������������������������������������������������������������� � Federal Reserve-Supervised ������������������������������������������������ � 6,676 4,413 1,427 836 $11,969,017 1,931,329 8,348,856 1,688,832 $6,769,422 1,463,157 4,304,392 1,001,873 $4,623,909 1,168,089 2,813,128 642,692 FDIC-Insured Savings Institutions���������������������������������������������� OTS-Supervised Savings Institutions ����������������������������������� � FDIC-Supervised State Savings Banks �������������������������������� � 1,154 753 401 1,251,535 932,199 319,336 898,273 661,760 236,513 801,516 594,265 207,251 Total Commercial Banks and Savings Institutions���������������������� 7,830 13,220,551 7,667,695 5,425,425 Other FDIC-Insured Institutions U.S. Branches of Foreign Banks������������������������������������������������� 10 24,093 17,374 13,441 Total FDIC-Insured Institutions������������������������������������������������������ 7,840 13,244,645 7,685,070 5,438,866 * 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, 2010 (dollar figures in billions) Risk Category I Risk Category II Risk Category III Risk Category IV Annual Rate in Basis Points* 7.00–12.00 12.01–14.00 14.01–15.99 16.00–24.00 17.00–22.00 22.01–43.00 27.00–32.00 32.01–58.00 40.00–45.00 45.01–77.50 Number of Institutions 1,717 1,509 2,130 442 1,043 290 433 180 121 79 Percent of Total Institutions 21.61 19.00 26.81 5.56 13.13 3.65 5.45 2.27 1.52 0.99 Domestic Deposits 619 1,555 2,197 495 2,030 466 128 111 46 56 Percent of Total Domestic Deposits 8.03 20.19 28.52 6.43 26.35 6.05 1.67 1.44 0.59 0.72 Note: Institutions are categorized based on supervisory ratings, debt ratings and financial data as of March 31, 2010. Rates do not reflect the application of assessment credits. See Notes to Users for further information on risk categories and rates. * Assessment rates with a given risk category vary for several reasons, see 12 CFR Part 327 http://www.fdic.gov/deposit/insurance/initiative/09FinalAD35.pdf FDIC Quarterly 17 2010, Volume 4, No. 3 TEMPORARY LIQUIDITY GUARANTEE PROGRAM Debt Guarantee Program Ended October 31, 2009 ■ Transaction Account Guarantee Program Extended to December 31, 2010 ■ $264 Billion Guaranteed in Transaction Accounts over $250,000 ■ $304 Billion Outstanding in Debt Guarantee Program ■ adopted a final rule on October 20, 2009, that allowed the DGP to expire on October 31, 2009.3 FDIC Responds to Market Disruptions with TLGP The FDIC Board approved the Temporary Liquidity Guarantee Program (TLGP) on October 13, 2008, as major disruptions in credit markets blocked access to liquidity for financial institutions.1 The TLGP improved access to liquidity through two programs: the Transaction Account Guarantee Program (TAGP), which fully guarantees noninterest-bearing transaction deposit accounts above $250,000, regardless of dollar amount; and the Debt Guarantee Program (DGP), which guarantees eligible senior unsecured debt issued by eligible institutions. A final rule extending the TAGP six months, to June 30, 2010, was adopted on August 26, 2009. Entities participating in the TAGP had the opportunity to opt out of the extended program. Depository institutions that remained in the extended program were subject to increased fees that were adjusted to reflect the institution’s risk.4 On June 22, 2010, the FDIC adopted a final rule extending the TAGP for another six months, through December 31, 2010. Under the final rule, which is almost identical to an interim rule adopted on April 13, the FDIC could extend the program for an additional 12 months without further rulemaking.5 All insured depository institutions were eligible to participate in the TAGP. Institutions eligible for participation in the DGP were insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of insured depository institutions that the FDIC designated as eligible entities. Noninterest-Bearing Transaction Accounts Fully Insured under Dodd-Frank Reform Bill An amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act requires that noninterestbearing transaction accounts at all FDIC-insured institutions be fully insured for two years. This amendment takes effect on December 31, 2010. Coverage of nonnterest-bearing transaction accounts is separate i from the regular insurance limit of $250,000. Assessments for noninterest-bearing transaction accounts will be included in insured institutions’ regular assessments.6 FDIC Extends Guarantee Programs Although financial markets improved significantly in the first half of 2009, portions of the industry were still affected by the recent economic turmoil. To facilitate the orderly phase-out of the TLGP, and to continue access to FDIC guarantees where they were needed, the FDIC Board extended both the DGP and TAGP. Program Funded by Industry Fees and Assessments 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. The Board also extended the expiration date of the guarantee from June 30, 2012, to the earlier of maturity of the debt or December 31, 2012. The FDIC imposed a surcharge on debt issued with a maturity of one year or more beginning in second quarter 2009.2 The Board The TLGP does not rely on taxpayer funding or the Deposit Insurance Fund. Both the TAGP and the DGP are paid for by direct user fees. Institutions participating in See http://www.fdic.gov/regulations/laws/federal/2009/09finalAD37 Oct23.pdf. 4 See http://www.fdic.gov/news/board/aug26no3.pdf. The final rule requires that interest rates on qualifying NOW accounts offered by banks participating in the program be reduced to 0.25 percent from 0.50 percent. The rule also requires TAGP assessment reporting to be based on average daily balances but makes no changes to the assessment rates for participating institutions. 5 See http://www.fdic.gov/news/news/press/2010/pr10139.html. 6 See http://www.fdic.gov/regulations/reform/summary.html. 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/Mar1709rule.pdf. 1 FDIC Quarterly 18 2010, Volume 4, No. 3 Quarterly Banking Profile the TAGP through year-end 2009 were assessed an annual fee of 10 basis points. Fees for qualifying noninterest- bearing transaction accounts guaranteed between January 1, 2010 and June 30, 2010, were based on the participating entity’s risk category assignment under the FDIC’s riskbased premium system. Annualized fees are 15, 20, or 25 basis points, depending on an institution’s risk category. noninterest-bearing transaction accounts over $250,000, about half the number of accounts reported at year-end 2009. These deposit accounts totaled $344 billion, of which $264 billion was guaranteed under the TAGP. More than 5,500 FDIC-insured institutions reported noninterest-bearing transaction accounts over $250,000 in value. Fees for participation in the DGP were based on the maturity of debt issued and ranged from 50 to 100 basis points (annualized). A surcharge was imposed on debt issued with a maturity of one year or greater after April 1, 2009. For debt that was not issued under the extension, that is, debt issued on or before June 30, 2009, and maturing on or before June 30, 2012, surcharges were 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 were 25 basis points (annualized) on debt issued by insured depository institutions and 50 basis points (annualized) on debt issued by other partici pating entities. As of June 30, 2010, fees totaling $10.4 billion had been assessed under the DGP. $304 Billion in FDIC-Guaranteed Debt Outstanding at June 30, 2010 Guaranteed debt outstanding at the end of second quarter 2010 totaled $304 billion. This debt was issued by 71 financial entities—42 insured depository institutions and 29 bank and thrift holding companies and nonbank affiliates. 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 81 percent of FDIC-guaranteed debt outstanding at June 30, 2010. Debt outstanding at June 30, 2010, had longer terms at issuance, compared to debt outstanding at year-end 2008. Less than 1 percent of debt outstanding matures in one year or less, compared to 49 percent at year-end 2008; and 80 percent matures more than two years after issuance, compared to 39 percent at December 31, 2008. Among types of debt instruments, 91 percent was in medium-term notes, compared to 44 percent at yearend. The share of outstanding debt in commercial paper fell to less than 0.01 percent from 43 percent at yearend 2008. A Majority of Eligible Entities Have Chosen to Participate in the TLGP Almost 80 percent of FDIC-insured institutions opted in to the TAGP extension through June 30, 2010. More than half of all eligible entities elected to opt in to the DGP. A list of institutions that opted out of the guarantee programs is posted at http://www.fdic.gov/ regulations/resources/TLGP/optout.html. Author: $264 Billion Guaranteed in Transaction Accounts over $250,000 According to second quarter 2010 Call and Thrift Financial Reports, insured institutions reported 319,742 Katherine Wyatt Chief, Financial Analysis Section Division of Insurance and Research (202) 898-6755 Table I-C. Participation in Temporary Liquidity Guarantee Program Total Eligible Entities June 30, 2010 Transaction Account Guarantee Program Extension to June 30, 2010 Depository Institutions with Assets <= $10 Billion�������������������������������������������������� Depository Institutions with Assets > $10 Billion���������������������������������������������������� Total Depository Institutions*���������������������������������������������������������������������������� 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 7,734 105 7,839 6,168 66 6,234 79.8% 62.9% 79.5% 7,734 105 7,839 5,992 13,831 4,079 95 4,174 3,363 7,537 52.7% 90.5% 53.2% 56.1% 54.5% 2010, Volume 4, No. 3 Table II-C. Cap on FDIC-Guaranteed Debt for Opt-In Entities Opt-In Depository Institutions with no Senior Unsecured Debt at 9/30/2008 2% Liabilities as of Number 9/30/2008 Opt-In Entities with Senior Unsecured Debt Outstanding at 9/30/2008 Debt Amount as of Number 9/30/2008 Initial Cap June 30, 2010 (dollar figures in millions) Depository Institutions with Assets <= $10 Billion*������������������������������������ Depository Institutions with Assets > $10 Billion*�������������������������������������� Bank and Thrift Holding Companies, Noninsured Affiliates������������������������������� Total��������������������������������������������������������� Total Entities Total Initial Cap 112 $3,442 $4,302 3,967 $30,165 4,079 $34,467 39 269,228 336,535 56 23,767 95 360,303 81 232 397,714 670,384 497,143 837,980 3,282 7,305 N/A 53,932 3,363 7,537 497,143 891,913 * Depository institutions include insured branches of foreign banks (IBAs). N/A - Not applicable Table III-C. Transaction Account Guarantee Program June 30, 2009 (dollar figures in millions) Number of Noninterest-Bearing Transaction Accounts over $250,000�������������������������������������������������������������� Amount in Noninterest-Bearing Transaction .Accounts over $250,000�������������������������������������������������������������� Amount Guaranteed���������������������������������������������������������� Sep. 30, 2009 Dec. 31, 2009 Mar. 31, 2010 June 30, 2010* % Change 10Q1-10Q2* 681,776 647,755 688,835 308,434 319,742 3.7% $905,395 $734,951 $928,093 $766,154 $1,009,429 $837,220 $354,675 $277,567 $343,582 $263,647 -3.1% -5.0% * Data revised on 9/21/10. Table IV-C. Debt Outstanding in Guarantee Program June 30, 2010 (dollar figures in millions) Insured Depository Institutions Assets <= $10 Billion������������������������������������������������������� Assets > $10 Billion��������������������������������������������������������� Bank and Thrift Holding Companies, Noninsured Affiliates������������������������������������������������������������� All Issuers���������������������������������������������������������������������� � Number Debt Outstanding Debt Outstanding Share of Cap Cap1 for Group 28 14 $1,586 55,584 $1,667 125,391 95.2% 44.3% 29 71 246,901 304,071 387,485 514,542 63.7% 59.1% 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 S eptember 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 (dollar figures in millions) Fourth Quarter 2008�������������������������������������������������������������� First Quarter 2009����������������������������������������������������������������� Second Quarter 2009������������������������������������������������������������ Third Quarter 2009���������������������������������������������������������������� Fourth Quarter 2009�������������������������������������������������������������� First Quarter 2010** Second Quarter 2010������������������������������������������������������������ Debt Guarantee Program Fees Assessed Surcharges Total Fee Amount $3,437 $3,437 3,433 3,433 1,413 385 1,797 691 280 971 503 207 709 14 Transaction Account Guarantee Program* Fees Collected 90 179 182 188 14 207 115 Total �������������������������������������������������������������������������������� � $9,491 $872 $10,363 $961 * Pro-rated payment in arrears. ** A review of data systems led us to recognize a nominal fee amount that had been dropped in error from previously reported amounts. Table VI-C. Term at Issuance of Debt Instruments Outstanding June 30, 2010 (dollar figures in millions) Term at Issuance 90 days or less�������������������������������������� 91-180 days������������������������������������������� 181-364 days���������������������������������������� � 1-2 years����������������������������������������������� Over 2-3 years�������������������������������������� Over 3 years ����������������������������������������� � Total ����������������������������������������������� � Share of Total���������������������������������������� FDIC Quarterly Interbank Other Commercial Eurodollar Medium Interbank Paper Deposits Term Notes Deposits $0 0 0 0 0 1 1 0.0% $0 0 0 0 0 0 0 0.0% $0 0 0 56,626 80,447 139,985 277,057 91.1% 20 $0 0 17 2 0 4 23 0.0% Other Senior Unsecured Other Debt Term Note $0 0 0 0 3,352 3,713 7,064 2.3% $0 0 0 4,773 6,003 9,151 19,926 6.6% All Debt $0 0 17 61,400 89,801 152,853 304,071 Share by Term 0.0% 0.0% 0.0% 20.2% 29.5% 50.3% 2010, Volume 4, No. 3 Quarterly Banking Profile Notes to Users period 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 com arability of source data and reporting differences p 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 g eographic region. Quarterly and full-year data are provided for selected indicators, including aggregate condition and income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off information for loans outstanding and other assets. ACCOUNTING CHANGES Extended Net Operating Loss Carryback Period – The Worker, Homeownership, and Business Assistance Act of 2009, which was enacted on November 6, 2009, permits banks and other businesses, excluding those banking organizations that received capital from the U.S. Treasury under the Troubled Asset Relief Program, to elect a net operating loss carryback period of three, four, or five years instead of the usual carryback period of two years for any one tax year ending after December 31, 2007, and beginning before January 1, 2010. For calendar year banks, this extended carryback period applies to either the 2008 or 2009 tax year. The amount of the net operating loss that can be carried back to the fifth carryback year is limited to 50 percent of the available taxable income for that fifth year, but this limit does not apply to other carryback years. Under generally accepted accounting principles, banks may not record the effects of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the fourth quarter of 2009. Therefore, banks should recognize the effects of this fourth quarter 2009 tax law change on their current and deferred tax assets and l iabilities, including valuation allowances for deferred tax assets, in their Call Reports for December 31, 2009. Banks should not amend their Call Reports for prior quarters for the effects of the extended net operating loss carryback period. The American Recovery and Reinvestment Act of 2009, which was enacted on February 17, 2009, permits qualifying small businesses, including FDIC-insured institutions, to elect a net operating loss carryback period of three, four, or five years instead of the usual carryback period of two years for any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally accepted accounting principles, institutions may not record the effect of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the first quarter of 2009. 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- 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 ompanies c 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, c ertain adjustments are made to the OTS Thrift Financial Reports to provide closer conformance with the reporting and accounting requirements of the FFIEC Call Reports. All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-ofFDIC Quarterly 21 2010, Volume 4, No. 3 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 security before recovery of its amortized cost basis, an other-thantemporary 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 r ecognize 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 regula tory reporting purposes in accordance with the FSP’s effective date. FDIC Quarterly Business Combinations and Noncontrolling (Minority) Interests – In December 2007, the FASB issued Statement No. 141 (Revised), Business Combinations (FAS 141(R)), and Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements (FAS 160). Under FAS 141(R), all business combinations, including combinations of mutual entities, are to be accounted for by applying the acquisition method. FAS 160 defines a noncontrolling interest, also called a minority interest, as the portion of equity in an institution’s subsidiary not attributable, directly or indirectly, to the parent institution. FAS 160 requires an institution to clearly present in its consolidated financial statements the equity ownership in and results of its subsidiaries that are attributable to the noncontrolling ownership interests in these subsidiaries. FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Similarly, FAS 160 is effective for fiscal years beginning on or after December 15, 2008. Thus, for institutions with calendar year fiscal years, these two accounting standards take effect in 2009. Beginning in March 2009, Institution equity capital and Noncontrolling interests are separately reported in arriving at Total equity capital and Net income. 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 l iability 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 22 2010, Volume 4, No. 3 Quarterly Banking Profile 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. 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 p robable, 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 Statements 166 & 167 – In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets (FAS 166), and Statement No. 167, Amendments to FASB Interpretation No. 46(R) (FAS 167), which change the way entities account for securitizations and special purpose entities. FAS 166 revises FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, by eliminating the concept of a “qualifying special-purpose entity,” creating the concept of a “participating interest,” changing the requirements for derecognizing financial assets, and requiring additional disclosures. FAS 167 revises FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, by changing how a bank or other company determines when an entity that is insufficiently capitalized or is not controlled through voting or similar rights, i.e., a “variable interest entity” (VIE), should FDIC Quarterly be consolidated. Under FAS 167, a bank must perform a qualitative assessment to determine whether its variable i nterest or interests give it a controlling financial interest in a VIE. If a bank’s variable interest or interests provide it with the power to direct the most significant activities of the VIE, and the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the bank is the primary beneficiary of, and therefore must con solidate, the VIE. Both FAS 166 and FAS 167 take effect as of the beginning of each bank’s first annual reporting period that begins after November 15, 2009, for interim periods therein, and for interim and annual reporting periods thereafter (i.e., as of January 1, 2010, for banks with a calendar year fiscal year). Earlier application is prohibited. Banks are expected to adopt FAS 166 and FAS 167 for Call Report purposes in accordance with the effective date of these two standards. Also, FAS 166 has modified the criteria that must be met in order for a transfer of a portion of a financial asset, such as a loan participation, to qualify for sale accounting. These changes apply to transfers of loan participations on or after the effective date of FAS 166. Therefore, banks with a calendar year fiscal year must account for transfers of loan participations on or after January 1, 2010, in accordance with FAS 166. In general, loan participations transferred before the effective date of FAS 166 (January 1, 2010, for calendar year banks) are not affected by this new accounting standard and pre-FAS 166 participations that were properly accounted for as sales under FASB Statement No. 140 will continue to be reported as having been sold. 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 c urrent 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. 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 23 2010, Volume 4, No. 3 DEFINITIONS (in alphabetical order) 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 un erlying variable or index at a stated price d (strike price) during a period or on a specified future date, in return for compensation (such as a fee or premium). The seller is obligated to purchase or sell the variable or index at the discretion of the buyer of the contract. Swaps – obligations between two parties to exchange a series of cash flows at periodic intervals (settlement dates), for a specified period. The cash flows of a swap are either fixed, or determined for each settlement date by multiplying the quantity (notional principal) of the underlying variable or index by specified reference rates or prices. Except for currency swaps, the notional principal is used to calculate each payment but is not exchanged. Derivatives underlying risk exposure – the potential exposure characterized by the level of banks’ concentration in particular underlying instruments, in general. Exposure can result from market risk, credit risk, and operational risk, as well as, interest rate risk. Domestic deposits to total assets – total domestic office deposits as a percent of total assets on a consolidated basis. Earning assets – all loans and other investments that earn interest or dividend income. Efficiency ratio – Noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net operating revenues that are absorbed by overhead expenses, so that a lower value indicates greater efficiency. Estimated insured deposits – in general, insured deposits are total domestic deposits minus estimated uninsured deposits. Beginning March 31, 2008, for institutions that file Call reports, insured deposits are total assessable deposits minus estimated uninsured deposits. Beginning September 30, 2009, insured deposits include deposits in accounts of $100,000 to $250,000 that are covered by a temporary increase in the FDIC’s standard maximum deposit insurance amount (SMDIA). Failed/assisted institutions – an institution fails when regulators take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or another healthy institution. This action may require the FDIC to provide funds to cover losses. An institution is defined as “assisted” when the institution remains open and receives assistance in order to continue operating. Fair Value – the valuation of various assets and liabilities on the balance sheet—including trading assets and liabilities, available-for-sale securities, loans held for sale, assets and l iabilities accounted for under the fair value option, and All other assets – total cash, balances due from depository institutions, premises, fixed assets, direct investments in real estate, investment in unconsolidated subsidiaries, customers’ liability on acceptances outstanding, assets held in trading accounts, federal funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid deposit insurance assessments, and other assets. All other liabilities – bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities. Assessment base – assessable deposits consist of DIF deposits (deposits insured by the FDIC Deposit Insurance Fund) in banks’ domestic offices with certain adjustments. 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 p roperty types under construction, as well as loans for land acquisition and development. Core capital – common equity capital plus noncumulative p erpetual 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 associ ted with a given issuance. a Deposit Insurance Fund (DIF) – The Bank (BIF) and Savings Association (SAIF) Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform Act to form the DIF. Derivatives notional amount – The notional, or contractual, amounts of derivatives represent the level of involvement in the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent the amounts used to calculate contractual cash flows to be exchanged. Derivatives credit equivalent amount – the fair value of the derivative plus an additional amount for potential future c redit exposure based on the notional amount, the remaining maturity and type of the contract. FDIC Quarterly 24 2010, Volume 4, No. 3 Quarterly Banking Profile f oreclosed assets—involves the use of fair values. During p eriods 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 s ervicing rights, purchased credit card relationships, and other identifiable intangible assets. Goodwill is the excess of the purchase price over the fair market value of the net assets acquired, less subsequent impairment adjustments. Other intangible assets are recorded at fair value, less subsequent quarterly amortization and impairment adjustments. Loans secured by real estate – includes home equity loans, junior liens secured by 1-4 family residential properties, and all other loans secured by real estate. Loans to individuals – includes outstanding credit card balances and other secured and unsecured consumer loans. Long-term assets (5+ years) – loans and debt securities with remaining maturities or repricing intervals of over five years. Maximum credit exposure – the maximum contractual credit exposure remaining under recourse arrangements and other 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 d ividends 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 trans actions 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 d e, or in nonu accrual status. Noncurrent loans & leases – the sum of loans and leases 90 days or more past due, and loans and leases in nonaccrual status. Number of institutions reporting – the number of institutions that actually filed a financial report. New charters – insured institutions filing quarterly financial reports for the first time. Other borrowed funds – federal funds purchased, securities sold with agreements to repurchase, demand notes issued to the U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and FDIC Quarterly trading liabilities, less revaluation losses on assets held in trading accounts. Other real estate owned – primarily foreclosed property. Direct and indirect investments in real estate ventures are excluded. The amount is reflected net of valuation allowances. For institutions that file a Thrift Financial Report (TFR), the v aluation allowance subtracted also includes allowances for other repossessed assets. Also, for TFR filers the components of other real estate owned are reported gross of valuation allowances. 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 r eceivables with terms restructured from the original contract. Excludes restructured loans and leases that are not in compliance with the modified terms. Retained earnings – net income less cash dividends on common and preferred stock for the reporting period. Return on assets – bank net income (including gains or losses on securities and extraordinary items) as a percentage of aver age total (consolidated) assets. The basic yardstick of bank profitability. Return on equity – bank net income (including gains or losses on securities and extraordinary items) as a percentage of a verage 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 >2 ≤2 * As a percentage of risk-weighted assets. 25 2010, Volume 4, No. 3 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 c omposite 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. Total Base Assessment Rates* Risk Category I Capital Category 1. Well Capitalized 2. Adequately Capitalized 3. Undercapitalized A B I 12–16 bps II 22 bps II 22 bps III 32 bps Risk Category IV 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. C 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 t ransmittal date. For institutions with long-term debt issuer ratings, changes in ratings are effective for assessment pur poses as of the date the change was announced. Special Assessment – On May 22, 2009, the FDIC board approved a final rule that imposed a 5 basis point special assessment as of June 30, 2009. The special assessment was 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. Prepaid Deposit Insurance Assessments – On November 12, 2009, the FDIC Board of Directors adopted a final rule r equiring insured depository institutions (except those that are exempted) to prepay their quarterly risk-based deposit insurance assessments for the fourth quarter of 2009, and for all of 2010, 2011, and 2012, on December 30, 2009. Each institution’s regular risk-based deposit insurance assessment for the third quarter of 2009, which is paid in arrears, also is payable on December 30, 2009. Risk-weighted assets – assets adjusted for risk-based capital definitions which include on-balance-sheet as well as off- balance-sheet items multiplied by risk-weights that range from zero to 200 percent. A conversion factor is used to assign a balance sheet equivalent amount for selected off-balancesheet accounts. Securities – excludes securities held in trading accounts. Banks’ securities portfolios consist of securities designated as “held-to-maturity,” which are reported at amortized cost (book value), and securities designated as “available-for-sale,” reported at fair (market) value. 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, minimum and maximum total base assessment rates for each risk category are as follows: FDIC Quarterly Risk Category III Initial base assessment rate Supervisory Group Risk Category II 26 2010, Volume 4, No. 3 Quarterly Banking Profile Securities gains (losses) – realized gains (losses) on held-to- maturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers also include gains (losses) on the sales of assets held for sale. Seller’s interest in institution’s own securitizations – the reporting bank’s ownership interest in loans and other assets that have been securitized, except an interest that is a form of recourse or other seller-provided credit enhancement. Seller’s interests differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is generally equal to the total principal amount of the pool of assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the form of securities issued to investors. Subchapter S Corporation – a Subchapter S corporation is t reated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any federal income taxes at the corporate level. This can have the effect of reducing institutions’ reported taxes and increasing their after-tax earnings. Temporary Liquidity Guarantee Program (TLGP) – was approved by the FDIC Board on October 13, 2008. The TLGP was designed to help relieve the crisis in the credit markets by giving banks access to liquidity during a time of global financial distress. Participation in the TLGP is voluntary. The TLGP has two components: Transaction Account Guarantee Program (TAGP) provides a full guarantee of non-interest-bearing deposit transaction accounts above $250,000, at depository institutions that elected to participate in the program. On August 26, 2009, the FDIC Board voted to extend the TAGP six months beyond its original expiration date to June 30, 2010. On April 13, 2010, the FDIC Board adopted an interim rule extending the TAG program for six months through December 31, 2010, with a possibility of an additional 12-month extension, through December 31, 2011. Debt Guarantee Program (DGP) provides a full guarantee of senior unsecured debt1 issued by eligible institutions after October 14, 2008. Initially, debt issued before June 30, 2009, and maturing on or before June 30, 2012, could be guaranteed. On March 17, 2009, the deadline for issuance under the program was extended to October 31, 2009, and the expiration of the guarantee was set at the earlier of maturity of the debt or December 31, 2012. Institutions e ligible for participation in the debt guarantee program include insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of an insured depository institution that the FDIC designates as eligible entities. The FDIC Board adopted a final rule on October 20, 2009, that established a limited six-month emergency guarantee facility upon expiration of the DGP. Trust assets – market value, or other reasonably available value of fiduciary and related assets, to include marketable securities, and other financial and physical assets. Common physical assets held in fiduciary accounts include real estate, equipment, collectibles, and household goods. Such fiduciary assets are not included in the assets of the financial institution. Unearned income & contra accounts – unearned income for Call Report filers only. Unused loan commitments – includes credit card lines, home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused com mitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for sale, which are accounted for as derivatives on the balance sheet.) Volatile liabilities – the sum of large-denomination time deposits, foreign-office deposits, federal funds purchased, securities sold under agreements to repurchase, and other borrowings. Yield on earning assets – total interest, dividend, and fee income earned on loans and investments as a percentage of average earning assets. Senior unsecured debt generally includes term Federal funds purchased, promissory notes, commercial paper, unsubordinated unsecured notes, certificates of deposit (CDs) standing to the credit of a bank, and U.S. dollar denominated bank deposits owed to an insured depository institution. 1 FDIC Quarterly 27 2010, Volume 4, No. 3