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FDIC Quarterly Quarterly Banking Profile: Second Quarter 2012 Highlights: ■ ■ ■ ■ ■ Second Quarter Net Income Totals $34.5 Billion, as Earnings Continue to Rise Improving Asset Quality Remains Key to Higher Profits Loan Balances Increase by $102 Billion The DIF Reserve Ratio Rises 10 Basis Points to 0.32 Percent 15 Institutions Fail During the Second Quarter 2012, Volume 6, Number 3 The FDIC Quarterly is published by the Division of Insurance and Research of the Federal Deposit Insurance Corporation and contains a comprehensive summary of the most current financial results for the banking industry. Feature articles appearing in the FDIC Quarterly range from timely analysis of economic and banking trends at the national and regional level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and the development of regulatory policy. Single copy subscriptions of the FDIC Quarterly can be obtained through the FDIC Public Information Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. E-mail requests should be sent to publicinfo@fdic.gov. Change of address information also should be submitted to the Public Information Center. The FDIC Quarterly is available online by visiting the FDIC website at www.fdic.gov. To receive e-mail notification of the electronic release of the FDIC Quarterly and the individual feature articles, subscribe at www.fdic.gov/about/subscriptions/index.html. Chairman (Acting) Martin J. Gruenberg Director, Division of Insurance and Research Arthur J. Murton Executive Editors Rae-Ann Miller Maureen E. Sweeney Managing Editors Richard A. Brown Diane L. Ellis Paul H. Kupiec Christopher J. Newbury Editor Frank Solomon Publication Manager Lynne Montgomery Media Inquiries (202) 898-6993 FDIC Quarterly 2012, Volume 6, Number 3 Quarterly Banking Profile: Second Quarter 2012 FDIC-insured institutions reported aggregate net income of $34.5 billion in the second quarter of 2012, a $5.9 billion improvement from the $28.5 billion in profits the industry reported in the second quarter of 2011. This is the 12th consecutive quarter that earnings have registered a year-over-year increase. Lower provisions for loan losses and higher gains on sales of loans and other assets accounted for most of the year-over-year improvement in earnings. See page 1. Insurance Fund Indicators The Deposit Insurance Fund (DIF) increased by $7.4 billion to $22.7 billion during the second quarter. Estimated insured deposits increased by 0.7 percent. The DIF reserve ratio was 0.32 percent at June 30, 2012, up from 0.22 percent at March 31, 2012, and 0.06 percent at June 30, 2011. Fifteen FDIC-insured institutions failed during the quarter. See page 15. The views expressed are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited. Please provide the FDIC’s Division of Insurance and Research with a copy of any publications containing reprinted material. Quarterly Banking Profile Second Quarter 2012 INSURED INSTITUTION PERFORMANCE Second Quarter Net Income Totals $34.5 Billion, as Earnings Continue to Rise ■ Improving Asset Quality Remains Key to Higher Profits ■ Loan Balances Increase by $102 Billion ■ “Problem List” Shrinks for Fifth Consecutive Quarter ■ Banks set aside $14.2 billion in provisions for loan losses in the second quarter. This amount represents a $5 billion (26.2 percent) decline from second quarter 2011, and is the smallest quarterly total in five years. The reduction in provision expenses helped offset a $287 million (0.3 percent) decline in net interest income, as the industry’s average net interest margin fell to a three-year low. The average net interest margin was 3.46 percent, compared with 3.61 percent a year earlier, because average asset yields declined faster than average funding costs. Noninterest income made a positive contribution to the increase in earnings, rising by $1.6 billion (2.8 percent) from second quarter 2011. Gains on loan sales and on fair values of financial instruments contributed to the rise in noninterest income, while a $4.7 billion decline in trading income limited the year-over-year improvement. Net operating revenue (the sum of net interest income and total noninterest income) was only $1.3 billion (0.8 percent) higher than in second quarter 2011. Realized gains on securities and other assets were $1.7 billion (208.2 percent) higher than a year ago. A few large banks accounted for most of the dollar amounts of the decline in trading results, increased gains on loan sales and higher realized gains on securities. Chart 1 Chart 2 Earnings Improvement Trend Reaches Three-Year Mark The benefits of reduced expenses for loan losses outweighed the drag from declining net interest margins, as insured institutions posted a 12th consecutive year-over-year increase in quarterly net income. Banks earned $34.5 billion in the quarter, a $5.9 billion (20.7 percent) increase compared with second quarter 2011. Almost two out of every three banks (62.7 percent) reported higher earnings than a year ago. Only 10.9 percent were unprofitable, down from 15.7 percent in second quarter 2011. The average return on assets (ROA) rose to 0.99 percent from 0.85 percent a year earlier. This is the third-highest quarterly ROA for the industry since second quarter 2007. Banks Reduce Loan-Loss Provisions to Five-Year Low Most Banks Are Improving Their Earnings, While Fewer Are Unprofitable Quarterly Net Income, 2008–2012 Billions of Dollars $60 $50 $40 $30 $20 Percentage of All Insured Institutions 80 Securities and Other Gains/Losses, Net Net Operating Income 19.3 $10 17.4 4.8 0.9 20.9 23.8 35.2 28.7 28.5 21.4 70 34.8 34.5 25.5 60 50 2.1 $0 -$10 40 -1.7 -6.1 30 -12.6 -$20 20 10 -$30 -$40 1 FDIC Quarterly 2 3 2008 -37.8 4 1 2 3 2009 Percentage of Institutions with Year-Over-Year Quarterly Income Growth 4 1 2 3 2010 4 1 2 3 2011 4 0 1 2 2012 1 Percentage of Institutions with Quarterly Losses 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 2006 2007 2008 2009 2010 2011 2012 2012, Volume 6, No. 3 properties, where noncurrents declined by $3.6 billion (9.2 percent). Well over half of all institutions (58 percent) reported reductions in noncurrent balances during the quarter. Net Charge-Offs Decline Across All Loan Categories Net charge-offs totaled $20.5 billion in the second quarter, an $8.4 billion (29.1 percent) reduction from second quarter 2011. This is the eighth consecutive quarter that charge-offs have declined from year-earlier levels and represents the lowest quarterly charge-off total since first quarter 2008. The year-over-year improvement was led by a $2.2 billion (24.6 percent) decline in credit card charge-offs, a $1.5 billion (25.2 percent) decline in charge-offs of residential mortgage loans, and a $1.2 billion (51.5 percent) drop in real estate construction loan charge-offs. All major loan categories posted lower charge-offs compared with a year ago. Half of all insured institutions (50.6 percent) reported year-over-year declines in charge-offs. Reserve Drawdowns at Large Banks Surpass Reserve Buildups at Smaller Institutions Noncurrent loan balances (loans 90 days or more past due or in nonaccrual status) declined for a ninth consecutive quarter, falling by $12.9 billion (4.2 percent). Noncurrent levels fell in all major loan categories. The largest declines occurred in real estate construction and development loans, where noncurrent balances fell by $5.1 billion (17.8 percent), and in real estate loans secured by nonfarm nonresidential Reserves for loan losses fell by $6.7 billion (3.6 percent) during the quarter, as the $14.2 billion in loss provisions that banks added to reserves were less than the $20.5 billion in net charge-offs that were taken out. More banks (54.4 percent) reported reserve increases than reported reductions (38.2 percent), but the reductions were concentrated among larger institutions, and added up to more than the additions. Eight of the 10 largest banks (and 34 of the 50 largest) reduced their reserves in the second quarter. Reserve balances have fallen for nine consecutive quarters, and are $86.7 billion (32.9 percent) below the peak level reached at the end of first quarter 2010. Even with the reduction in reserves, the larger drop in noncurrent loan balances during the quarter meant that the industry’s “coverage ratio” of reserves to noncurrent loans inched up from 60 percent to 60.4 percent between March 31 and June 30. Chart 3 Chart 4 Noncurrent Loan Balances Continue to Fall Quarterly Provisions and Revenues, 2007-2012 Quarterly Net Interest Margins, 2006–2012 Billions of Dollars $180 Quarterly Loan-Loss Provision Percent 4.5 $160 $140 4.0 $120 Quarterly Net Operating Revenue* $100 3.5 $80 $60 Assets < $1 Billion $40 3.0 Assets $10 Billion - $100 Billion $20 $0 Assets $1 Billion - $10 Billion Assets > $100 Billion 2.5 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2012 2007 2008 2010 2011 2009 *Net operating revenue = net interest income + noninterest income FDIC Quarterly 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2006 2007 2008 2009 2010 2011 2012 2012, Volume 6, No. 3 Quarterly Banking Profile percent), while home equity lines of credit declined for the 13th quarter in a row, falling by $10.2 billion (1.7 percent). Loans to small businesses and farms posted a $1.5 billion (0.2 percent) increase, driven primarily by seasonal demand for agricultural credit. More than 60 percent of institutions reported growth in total loan balances during the quarter. Banks reduced their mortgage-backed securities holdings by $33.1 billion (1.9 percent), and increased their h oldings of U.S. Treasury securities by $20.1 billion (12 percent). Retained Earnings Provide a Boost to Capital Insured institutions continued to build their capital in the second quarter. Total equity capital increased by $20.3 billion (1.3 percent), with retained earnings contributing $14.9 billion to capital growth. This is the second-highest quarterly total for retained earnings since third quarter 2006. Dividends were $763 million (3.8 percent) lower than in second quarter 2011. Tier 1 regulatory capital rose by $14 billion (1.1 percent), but total risk-based capital was basically unchanged (up $524 million, or 0.04 percent), due to the decline in reserves, declines in deferred tax assets, and declines in intangible assets. At midyear, almost 97 percent of all insured institutions, representing more than 99 percent of insured institution assets, met or exceeded the requirements for “well-capitalized” institutions as defined for Prompt Corrective Action purposes. Nondeposit Liabilities Increase Deposits increased by $61.6 billion (0.6 percent) during the quarter. Deposits in domestic offices rose by $88.1 billion (1.0 percent), while foreign office deposits fell by $26.5 billion (1.8 percent). Much of the growth in domestic deposits ($71.7 billion) consisted of noninterest-bearing transaction accounts with balances greater than $250,000 that are temporarily fully covered by the FDIC. The portion of these deposits that is above the $250,000 basic coverage limit increased by $65.7 billion (5.0 percent). In addition to the increase in largedenomination domestic deposits, insured institutions increased their nondeposit liabilities for the first time in seven quarters. Securities sold under repurchase agreements increased by $28 billion (6.7 percent), and Federal Home Loan Bank advances rose by $19.8 billion (6.5 percent). Loans Increase for Fourth Time in Last Five Quarters Total assets increased by $105.3 billion (0.8 percent), as loan balances rose for the fourth time in the last five quarters. Total loans and leases grew by $102 billion (1.4 percent), with loans to commercial and industrial (C&I) borrowers increasing by $48.9 billion (3.6 percent), residential mortgage loans rising by $16.6 billion (0.9 percent), and credit card balances growing by $14.7 billion (2.3 percent). Balances of real estate construction and development loans fell for a 17th consecutive quarter, declining by $10.9 billion (4.8 Chart 5 Chart 6 Quarterly Change in Loan Balances, 2007–2012 Noncurrent Loans and Loan Losses Continue to Fall, but Remain Well Above Pre-Crisis Levels Billions of Dollars $300 Percent 6 $200 Noncurrent Loan Rate 5 237.3 202.6 $250 $150 134.1 $100 $50 43.4 4 $0 3 0 -133.3 -106.9 -126.0 -210.1 1 2 3 4 1 2007 2 3 4 1 2 3 4 1 2 3 4 2010 2008 2009 1 2 3 4 1 2 2011 2012 * FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitized loan balances back onto banks' balance sheets in the first quarter of 2010. Although the total amount consolidated cannot be precisely quantified, the industry would have reported a decline in loan balances for the quarter absent this change in accounting standards. 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 2006 2007 2008 2009 2010 2011 2012 FDIC Quarterly -6.7 -13.9 -63.5 -$200 -$250 23.9 -116.2 -108.6 -139.6 -$150 Quarterly Net Charge-Off Rate 28.1 -6.3 -$100 2 102.0 66.9 61.4 -$50 1 221.0* 188.9 3 2012, Volume 6, No. 3 More Than a Year Since Last New Charter During the second quarter, the number of insured institutions reporting financial results declined from 7,308 to 7,246. Forty-five institutions were merged into other institutions, and 15 institutions failed. No new charters were added during the quarter. This is the fourth quarter in a row in which no new charters have been added. It has been more than six quarters since the last time a new charter was created other than to absorb a failing bank. The number of full-time equivalent employees at FDIC-insured institutions increased from 2,102,280 to 2,108,200. The number of institutions on the FDIC’s “Problem List” fell for a fifth consecutive quarter, from 772 to 732. Total assets of “problem” institutions declined from $291 billion to $282 billion. Author: Ross Waldrop, Senior Banking Analyst Division of Insurance and Research (202) 898-3951 Chart 7 Chart 8 Quarterly Changes in the Number of Troubled Institutions, 2007–2012 Deposit Inflows Have Slowed in 2012 Quarterly Change in Domestic Deposits (Billions of Dollars) $300 200 280 $250 234 Quarterly Failures 175 253 Net Quarterly Change in Number of Problem Banks 150 125 $200 135 $100 70 88 68 0 $50 $0 -25 -50 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 FDIC Quarterly 4 21 9 50 25 41 12 75 118 45 24 100 $150 50 2 1 3 0 8 1 2 1 27 11 14 4 81 54 53 111 136 45 150 41 73 54 30 31 24 26 22 26 18 16 15 4 -23 -21 -31 -41 -40 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2010 2011 2009 2007 2008 2012 2012, Volume 6, 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�������������������������������������������������������������������������������������� 2012** 0.99 8.84 9.25 2.40 1.13 3.15 3.49 15.60 7,246 6,222 1,024 10.59 732 $282 31 0 2011** 0.85 7.60 9.20 2.76 1.71 3.05 3.64 56.10 7,513 6,413 1,100 16.08 865 $372 48 0 2011 0.88 7.80 9.07 2.60 1.55 4.30 3.60 43.81 7,357 6,291 1,066 16.11 813 $319 92 0 2010 0.65 5.85 8.89 3.11 2.55 1.77 3.76 1601.58 7,658 6,530 1,128 22.11 884 $390 157 0 2009 -0.07 -0.72 8.60 3.37 2.52 -5.45 3.49 -155.72 8,012 6,840 1,172 30.84 702 $403 140 8 2008 0.03 0.35 7.47 1.91 1.29 6.19 3.16 -90.71 8,305 7,087 1,218 24.89 252 $159 25 5 2007 0.81 7.75 7.97 0.95 0.59 9.88 3.29 -27.59 8,534 7,284 1,250 12.10 76 $22 3 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 2012 7,246 2,108,200 1st Quarter 2012 7,308 2,102,280 2nd Quarter 2011 7,513 2,106,615 %Change 11Q2-12Q2 -3.6 0.1 $14,031,008 4,086,561 1,875,341 1,058,389 217,392 580,219 1,423,101 1,282,013 664,260 64,008 659,185 2,038 7,512,830 176,494 7,336,336 2,937,424 41,788 366,741 3,348,719 $13,925,678 4,086,298 1,858,774 1,057,027 228,319 590,368 1,374,171 1,266,272 649,564 58,270 627,911 2,100 7,410,823 183,159 7,227,664 2,930,574 44,803 371,412 3,351,225 $13,602,560 4,125,336 1,831,108 1,060,233 274,392 615,270 1,236,824 1,288,194 668,340 57,668 610,588 2,311 7,316,299 207,714 7,108,585 2,721,869 51,284 388,396 3,332,427 3.1 -0.9 2.4 -0.2 -20.8 -5.7 15.1 -0.5 -0.6 11.0 8.0 -11.8 2.7 -15.0 3.2 7.9 -18.5 -5.6 0.5 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������������������������������������������������������������������������������������������� 14,031,008 10,322,526 8,913,721 1,408,805 1,389,986 116,634 594,562 1,607,300 1,588,980 13,925,678 10,260,938 8,825,629 1,435,309 1,381,659 129,351 566,745 1,586,985 1,568,659 13,602,560 9,765,598 8,225,633 1,539,965 1,602,751 138,874 540,699 1,554,638 1,535,726 3.1 5.7 8.4 -8.5 -13.3 -16.0 10.0 3.4 3.5 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***���������������������������������������������������������������������������������� 83,762 292,186 106,757 1,713,754 12,271,841 325,638 5,865,751 16,896,009 986,273 224,998,167 89,822 305,044 123,892 1,746,866 12,182,048 305,826 5,845,833 17,080,584 973,032 230,364,892 102,694 321,178 119,711 1,546,189 11,819,115 341,208 5,767,176 16,926,443 970,638 251,133,282 -18.4 -9.0 -10.8 10.8 3.8 -4.6 1.7 -0.2 1.6 -10.4 (dollar figures in millions) Number of institutions reporting������������������������������������������������������������������������������������� Total employees (full-time equivalent)��������������������������������������������������������������������������� CONDITION DATA Total assets��������������������������������������������������������������������������������������������������������������������� Loans secured by real estate���������������������������������������������������������������������������������� 1-4 Family residential mortgages�������������������������������������������������������������������� Nonfarm nonresidential����������������������������������������������������������������������������������� Construction and development Home equity lines��������������������������������������������������������������������������������������������� Commercial & industrial loans�������������������������������������������������������������������������������� Loans to individuals������������������������������������������������������������������������������������������������� Credit cards������������������������������������������������������������������������������������������������������ Farm loans��������������������������������������������������������������������������������������������������������������� Other loans & leases����������������������������������������������������������������������������������������������� Less: Unearned income������������������������������������������������������������������������������������������ Total loans & leases������������������������������������������������������������������������������������������������ Less: Reserve for losses����������������������������������������������������������������������������������������� Net loans and leases����������������������������������������������������������������������������������������������� Securities����������������������������������������������������������������������������������������������������������������� Other real estate owned������������������������������������������������������������������������������������������ Goodwill and other intangibles������������������������������������������������������������������������������� All other assets�������������������������������������������������������������������������������������������������������� INCOME DATA Total interest income������������������������������������������������������������������� Total interest expense����������������������������������������������������������������� Net interest income�������������������������������������������������������������� Provision for loan and lease losses�������������������������������������������� Total noninterest income������������������������������������������������������������� Total noninterest expense����������������������������������������������������������� Securities gains (losses)������������������������������������������������������������� Applicable income taxes������������������������������������������������������������� Extraordinary gains, net�������������������������������������������������������������� Total net income (includes minority interests)��������������������� Bank net income������������������������������������������������������������ Net charge-offs���������������������������������������������������������������������������� Cash dividends���������������������������������������������������������������������������� Retained earnings����������������������������������������������������������������������� Net operating income����������������������������������������������������������� First Half 2012 $247,050 34,853 212,197 28,481 122,123 209,753 4,429 30,818 -12 69,684 69,305 42,203 40,651 28,655 66,417 First Half 2011 $257,495 45,610 211,885 40,031 116,531 205,385 706 26,271 237 57,673 57,331 62,252 35,419 21,912 57,454 %Change -4.1 -23.6 0.2 -28.9 4.8 2.1 527.3 17.3 N/M 20.8 20.9 -32.2 14.8 30.8 15.6 2nd Quarter 2012 $122,682 17,055 105,626 14,169 59,817 103,364 2,555 15,679 -126 34,661 34,452 20,462 19,552 14,901 32,895 2nd Quarter 2011 $128,468 22,554 105,913 19,196 58,208 103,662 829 13,509 132 28,716 28,534 28,851 20,314 8,219 28,423 *** Prior to 2012, does not include data for insured savings institutions that file Thrift Financial Reports. Beginning in 2012, all insured institutions file Call Reports. FDIC Quarterly 5 %Change 11Q2-12Q2 -4.5 -24.4 -0.3 -26.2 2.8 -0.3 208.2 16.1 N/M 20.7 20.7 -29.1 -3.8 81.3 15.7 N/M - Not Meaningful 2012, Volume 6, No. 3 TABLE III-A. Second Quarter 2012, All FDIC-Insured Institutions Asset Concentration Groups* SECOND QUARTER All Insured (The way it is...) Institutions Number of institutions reporting����������������������� 7,246 Commercial banks������������������������������������� 6,222 Savings institutions����������������������������������� 1,024 Total assets (in billions)������������������������������������ $14,031.0 Commercial banks������������������������������������� 12,889.8 Savings institutions����������������������������������� 1,141.2 Total deposits (in billions)��������������������������������� 10,322.5 Commercial banks������������������������������������� 9,446.8 Savings institutions����������������������������������� 875.7 Bank net income (in millions)��������������������������� 34,452 Commercial banks������������������������������������� 31,560 Savings institutions����������������������������������� 2,893 Credit Card International Agricultural Commercial Banks Banks Banks Lenders 18 5 1,542 3,636 14 5 1,521 3,288 4 0 21 348 $567.2 $3,710.9 $220.4 $4,160.2 502.8 3,710.9 215.5 3,827.8 64.4 0.0 4.9 332.5 314.5 2,556.6 182.3 3,232.8 273.8 2,556.6 179.5 2,984.9 40.7 0.0 2.9 247.9 4,183 6,506 704 10,008 3,294 6,506 670 9,327 890 0 33 681 Mortgage Consumer Lenders Lenders 712 51 216 38 496 13 $825.3 $97.1 266.2 38.7 559.0 58.5 636.9 83.4 198.9 31.2 438.0 52.2 1,751 441 817 244 934 197 Other Specialized All Other <$1 Billion <$1 Billion 402 815 370 716 32 99 $64.5 $144.3 58.3 119.4 6.2 24.9 51.7 121.1 47.5 101.0 4.2 20.1 180 327 174 304 6 22 All Other >$1 Billion 65 54 11 $4,241.1 4,150.2 90.8 3,143.2 3,073.5 69.7 10,351 10,223 128 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���������������� 4.01 0.56 3.46 1.71 2.96 0.41 0.94 1.43 0.99 8.73 1.10 10.81 0.90 9.90 4.33 6.21 2.44 3.00 4.68 2.97 19.86 4.05 3.20 0.55 2.65 1.50 2.71 0.21 0.62 0.96 0.71 7.77 1.37 4.50 0.73 3.77 0.64 2.52 0.16 1.22 1.50 1.28 11.23 0.21 4.35 0.61 3.74 1.20 2.98 0.37 0.92 1.24 0.96 8.13 0.76 3.53 0.76 2.77 0.76 1.86 0.31 0.81 1.25 0.85 7.98 0.64 5.11 0.71 4.40 2.64 2.89 1.17 1.81 2.82 1.81 18.90 1.52 3.37 0.63 2.74 3.71 4.41 0.10 1.09 1.69 1.08 7.65 0.54 4.32 0.74 3.58 1.18 3.19 0.25 0.84 1.10 0.91 7.94 0.43 3.45 0.39 3.06 2.26 2.93 0.37 0.96 1.61 0.98 7.97 0.92 69.25 61.29 10.92 62.66 74.45 44.78 5.56 44.44 43.61 70.95 0.00 60.00 121.91 60.83 4.28 62.06 73.97 64.93 14.52 67.77 89.37 54.54 10.96 53.37 108.64 41.47 5.88 56.86 69.70 70.76 9.95 49.00 108.78 71.21 8.34 56.93 75.42 58.58 10.77 58.46 Structural Changes New reporters�������������������������������������������� Institutions absorbed by mergers������������� Failed institutions�������������������������������������� 0 45 15 0 0 0 0 0 0 0 5 0 0 37 12 0 2 1 0 0 0 0 0 0 0 0 2 0 1 0 PRIOR SECOND QUARTERS (The way it was...) Return on assets (%)��������������������������������2011 ������������������������������������� 2009 ������������������������������������� 2007 0.85 -0.38 1.22 3.96 -7.92 3.34 0.46 -0.54 0.99 1.12 0.78 1.26 0.71 -0.20 1.18 0.55 0.56 0.91 1.67 0.64 3.04 1.94 1.28 2.31 0.80 0.70 1.10 0.80 0.30 1.26 Net charge-offs to loans & leases (%)�����2011 ������������������������������������� 2009 ������������������������������������� 2007 1.59 2.56 0.49 5.58 10.78 3.89 1.43 3.07 0.60 0.37 0.61 0.15 1.27 2.07 0.28 1.03 1.27 0.25 1.79 2.80 1.85 0.41 0.71 0.25 0.48 0.51 0.18 1.24 2.31 0.32 * See Table V-A (page 10) for explanations. Note: Blue font identifies data that are also presented in the prior quarters data at bottom of table. FDIC Quarterly 6 2012, Volume 6, No. 3 Quarterly Banking Profile TABLE III-A. Second Quarter 2012, All FDIC-Insured Institutions Asset Size Distribution SECOND QUARTER All Insured (The way it is...) Institutions Number of institutions reporting����������������������������� 7,246 Commercial banks������������������������������������������� 6,222 Savings institutions����������������������������������������� 1,024 Total assets (in billions)������������������������������������������ $14,031.0 Commercial banks������������������������������������������� 12,889.8 Savings institutions����������������������������������������� 1,141.2 Total deposits (in billions)��������������������������������������� 10,322.5 Commercial banks������������������������������������������� 9,446.8 Savings institutions����������������������������������������� 875.7 Bank net income (in millions)��������������������������������� 34,452 Commercial banks������������������������������������������� 31,560 Savings institutions����������������������������������������� 2,893 Geographic Regions* Less than $100 $1 Billion Greater $100 Million to to than Million $1 Billion $10 Billion $10 Billion New York 2,342 4,244 553 107 898 2,085 3,614 435 88 479 257 630 118 19 419 $135.4 $1,274.7 $1,425.9 $11,195.0 $2,877.3 121.0 1,057.1 1,132.0 10,579.8 2,317.0 14.4 217.7 293.9 615.2 560.3 114.9 1,062.1 1,106.2 8,039.4 2,089.6 103.2 888.5 882.0 7,573.1 1,663.1 11.7 173.6 224.2 466.3 426.5 235 2,581 5,141 26,496 6,089 230 2,283 4,514 24,533 5,312 5 299 627 1,963 777 Atlanta 929 831 98 $2,934.8 2,838.8 96.0 2,181.4 2,110.7 70.7 5,278 5,150 128 Chicago 1,540 1,277 263 $3,193.2 3,073.8 119.4 2,239.4 2,149.1 90.3 7,116 6,779 338 Kansas City 1,754 1,668 86 $3,000.2 2,939.5 60.7 2,250.9 2,202.1 48.8 7,614 7,498 117 San Dallas Francisco 1,524 601 1,420 547 104 54 $831.6 $1,194.0 734.7 986.0 96.9 208.0 681.8 879.4 601.7 720.1 80.1 159.3 2,164 6,191 1,825 4,996 339 1,195 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���������������������� 4.01 0.56 3.46 1.71 2.96 0.41 0.94 1.43 0.99 8.73 1.10 4.49 0.73 3.76 0.95 3.40 0.22 0.62 0.83 0.69 5.83 0.43 4.53 0.79 3.75 1.07 3.18 0.37 0.74 1.04 0.81 7.49 0.65 4.52 0.71 3.81 1.78 3.10 0.39 1.41 1.80 1.44 12.24 0.76 3.88 0.51 3.37 1.79 2.91 0.41 0.91 1.44 0.95 8.43 1.22 4.33 0.63 3.69 1.44 2.96 0.47 0.82 1.31 0.85 6.86 1.34 3.72 0.46 3.26 1.90 3.13 0.52 0.68 1.11 0.72 5.96 1.11 3.29 0.50 2.79 1.62 2.82 0.14 0.78 1.21 0.89 9.99 0.84 4.40 0.62 3.79 1.66 2.91 0.53 1.02 1.51 1.02 9.21 1.34 4.28 0.54 3.74 1.29 3.16 0.25 0.99 1.35 1.04 9.50 0.56 4.70 0.62 4.08 2.58 2.88 0.49 2.07 3.01 2.09 15.25 0.93 69.25 61.29 10.92 62.66 92.11 77.58 14.86 57.05 90.60 70.26 9.43 64.84 83.03 58.52 7.05 68.35 66.21 60.52 3.74 69.16 65.57 61.35 11.02 56.01 84.00 65.67 20.67 64.05 36.67 69.15 10.19 62.01 72.74 57.20 7.64 63.97 74.64 66.80 7.48 62.99 86.64 44.89 15.81 67.39 Structural Changes New reporters�������������������������������������������������� Institutions absorbed by mergers������������������� Failed institutions�������������������������������������������� 0 45 15 0 14 5 0 28 10 0 3 0 0 0 0 0 5 3 0 10 7 0 2 1 0 10 1 0 6 2 0 12 1 PRIOR SECOND QUARTERS (The way it was…) Return on assets (%)�������������������������������������� 2011 ������������������������������������������� 2009 ��������������������������������������������2007 0.85 -0.38 1.22 0.53 0.03 0.85 0.53 -0.17 1.14 0.93 -0.83 1.11 0.88 -0.34 1.25 1.20 -1.91 1.05 0.44 -0.04 1.25 0.71 0.18 1.05 1.23 0.74 1.54 0.87 0.21 1.15 0.83 -0.71 1.41 Net charge-offs to loans & leases (%)����������� 2011 ������������������������������������������� 2009 ��������������������������������������������2007 1.59 2.56 0.49 0.63 0.91 0.14 0.91 1.14 0.18 1.22 2.23 0.33 1.76 2.89 0.57 1.81 2.91 0.84 1.69 2.26 0.26 1.30 2.40 0.37 1.84 2.56 0.63 0.96 1.32 0.23 1.53 3.39 0.59 * See Table V-A (page 11) for explanations. Note: Blue font identifies data that are also presented in the prior quarters data at bottom of table. FDIC Quarterly 7 2012, Volume 6, No. 3 TABLE IV-A. First Half 2012, All FDIC-Insured Institutions Asset Concentration Groups* FIRST HALF All Insured (The way it is...) Institutions Number of institutions reporting����������������������� 7,246 Commercial banks������������������������������������� 6,222 Savings institutions����������������������������������� 1,024 Total assets (in billions)������������������������������������ $14,031.0 Commercial banks������������������������������������� 12,889.8 Savings institutions����������������������������������� 1,141.2 Total deposits (in billions)��������������������������������� 10,322.5 Commercial banks������������������������������������� 9,446.8 Savings institutions����������������������������������� 875.7 Bank net income (in millions)��������������������������� 69,305 Commercial banks������������������������������������� 63,604 Savings institutions����������������������������������� 5,702 Performance Ratios (annualized, %) Yield on earning assets������������������������������������ Cost of funding earning assets������������������������ Net interest margin������������������������������������ Noninterest income to assets��������������������������� Noninterest expense to assets������������������������� Loan and lease loss provision to assets���������� Net operating income to assets����������������������� Pretax return on assets������������������������������������ Return on assets����������������������������������������������� Return on equity����������������������������������������������� Net charge-offs to loans and leases���������������� Loan and lease loss provision to net charge-offs������������������������������������������ Efficiency ratio�������������������������������������������������� % of unprofitable institutions���������������������������� % of institutions with earnings gains���������������� Credit Card International Agricultural Commercial Banks Banks Banks Lenders 18 5 1,542 3,636 14 5 1,521 3,288 4 0 21 348 $567.2 $3,710.9 $220.4 $4,160.2 502.8 3,710.9 215.5 3,827.8 64.4 0.0 4.9 332.5 314.5 2,556.6 182.3 3,232.8 273.8 2,556.6 179.5 2,984.9 40.7 0.0 2.9 247.9 8,893 13,861 1,394 18,712 7,123 13,861 1,332 17,419 1,769 0 62 1,294 Mortgage Consumer Lenders Lenders 712 51 216 38 496 13 $825.3 $97.1 266.2 38.7 559.0 58.5 636.9 83.4 198.9 31.2 438.0 52.2 3,426 870 1,636 468 1,790 402 Other Specialized All Other <$1 Billion <$1 Billion 402 815 370 716 32 99 $64.5 $144.3 58.3 119.4 6.2 24.9 51.7 121.1 47.5 101.0 4.2 20.1 395 664 361 604 35 60 All Other >$1 Billion 65 54 11 $4,241.1 4,150.2 90.8 3,143.2 3,073.5 69.7 21,090 20,799 290 4.06 0.57 3.49 1.75 3.01 0.41 0.95 1.44 0.99 8.84 1.13 10.86 0.92 9.93 3.96 5.93 2.12 3.16 4.94 3.14 20.83 4.09 3.26 0.56 2.70 1.77 2.88 0.23 0.70 1.02 0.75 8.34 1.43 4.52 0.76 3.76 0.63 2.51 0.15 1.22 1.50 1.28 11.23 0.19 4.38 0.64 3.75 1.20 3.01 0.37 0.87 1.21 0.91 7.68 0.76 3.53 0.76 2.77 0.79 1.87 0.34 0.80 1.24 0.84 7.90 0.79 5.21 0.74 4.47 2.36 2.84 1.06 1.81 2.78 1.81 18.91 1.54 3.46 0.65 2.80 3.65 4.24 0.11 1.26 1.76 1.18 8.41 0.37 4.37 0.77 3.60 1.19 3.20 0.24 0.86 1.13 0.93 8.12 0.38 3.51 0.40 3.10 2.20 2.96 0.39 0.95 1.57 1.00 8.17 0.96 67.48 61.60 10.59 67.87 63.76 43.96 0.00 66.67 47.69 69.73 0.00 60.00 128.71 60.83 3.70 69.97 74.89 65.46 14.19 71.84 77.19 54.44 11.52 57.02 96.46 41.90 5.88 58.82 108.31 68.26 9.70 56.22 114.50 71.03 7.85 62.09 75.76 59.66 9.23 67.69 87.46 Condition Ratios (%) Earning assets to total assets�������������������������� Loss allowance to: Loans and leases�������������������������������������� Noncurrent loans and leases�������������������� Noncurrent assets plus other real estate owned to assets������������� Equity capital ratio�������������������������������������������� Core capital (leverage) ratio ���������������������������� Tier 1 risk-based capital ratio��������������������������� Total risk-based capital ratio���������������������������� Net loans and leases to deposits��������������������� Net loans to total assets ���������������������������������� Domestic deposits to total assets�������������������� 91.17 84.96 92.18 89.14 94.31 96.49 91.68 91.76 85.51 2.35 60.40 4.33 314.56 3.34 83.93 1.59 103.76 1.92 63.79 1.33 37.24 2.00 108.06 2.16 78.06 1.61 75.32 2.20 38.11 2.40 11.32 9.25 13.21 15.27 71.07 52.29 63.53 1.12 14.76 12.92 13.95 16.33 140.51 77.92 50.74 1.47 9.04 7.37 12.04 14.37 48.40 33.35 38.35 1.32 11.50 10.27 14.89 16.03 72.36 59.85 82.71 2.61 11.91 10.09 13.16 14.91 83.93 65.22 76.94 2.31 10.75 9.99 20.73 21.72 70.35 54.29 77.08 1.34 9.69 9.48 13.38 14.49 80.79 69.39 85.87 1.20 14.67 13.08 30.03 31.15 35.03 28.07 79.24 1.66 11.51 10.76 18.57 19.72 63.67 53.45 83.94 3.31 12.38 9.23 12.59 14.98 70.02 51.90 69.03 Structural Changes New reporters�������������������������������������������� Institutions absorbed by mergers������������� Failed institutions�������������������������������������� 0 72 31 0 0 0 0 1 0 0 9 0 0 55 26 0 5 3 0 0 0 0 0 0 0 1 2 0 1 0 PRIOR FIRST HALVES (The way it was...) Number of institutions������������������������������2011 ������������������������������������� 2009 ������������������������������������� 2007 7,513 8,195 8,614 20 24 26 4 5 4 1,544 1,551 1,645 3,953 4,637 4,731 716 808 805 72 80 118 347 294 377 794 743 851 63 53 57 Total assets (in billions)����������������������������2011 ������������������������������������� 2009 ������������������������������������� 2007 $13,602.6 13,279.7 12,261.4 $656.0 464.5 395.0 $3,328.1 3,204.0 2,544.3 $204.2 170.1 155.6 $4,132.2 5,947.0 4,789.0 $773.8 933.4 1,551.0 $97.7 84.0 117.7 $50.0 36.0 42.4 $129.1 101.7 113.1 $4,231.4 2,338.9 2,553.3 Return on assets (%)��������������������������������2011 ������������������������������������� 2009 ������������������������������������� 2007 0.85 -0.26 1.21 3.81 -9.56 3.58 0.53 0.05 0.96 1.09 0.88 1.22 0.66 -0.18 1.15 0.49 0.57 0.91 1.60 0.28 2.54 1.65 0.73 2.23 0.80 0.79 1.07 0.84 0.46 1.27 Net charge-offs to loans & leases (%)�����2011 ������������������������������������� 2009 ������������������������������������� 2007 1.71 2.25 0.47 6.12 9.57 3.84 1.69 2.73 0.58 0.33 0.47 0.15 1.29 1.76 0.25 1.01 1.13 0.24 1.86 2.71 1.86 0.57 0.81 0.23 0.45 0.42 0.16 1.32 2.04 0.31 Noncurrent assets plus OREO to assets (%)��������������������������2011 ������������������������������������� 2009 ������������������������������������� 2007 2.76 2.78 0.62 1.51 2.56 1.28 1.76 2.25 0.41 1.62 1.45 0.81 3.38 3.36 0.70 2.72 2.96 0.81 1.00 1.14 0.63 1.01 0.72 0.23 1.88 1.30 0.60 3.27 2.23 0.46 Equity capital ratio (%)�����������������������������2011 ������������������������������������� 2009 ������������������������������������� 2007 11.29 10.42 10.43 17.21 21.20 23.96 8.28 8.42 7.64 11.26 11.08 11.13 11.86 10.54 10.68 10.56 9.47 10.22 9.93 9.95 13.73 15.65 16.59 20.98 11.51 11.36 11.10 12.29 10.91 10.39 * See Table V-A (page 10) for explanations. Note: Blue font identifies data that are also presented in the prior quarters data at bottom of table. FDIC Quarterly 8 2012, Volume 6, No. 3 Quarterly Banking Profile TABLE IV-A. First Half 2012, All FDIC-Insured Institutions Asset Size Distribution FIRST HALF All Insured (The way it is...) Institutions Number of institutions reporting����������������������������� 7,246 Commercial banks������������������������������������������� 6,222 Savings institutions����������������������������������������� 1,024 Total assets (in billions)������������������������������������������ $14,031.0 Commercial banks������������������������������������������� 12,889.8 Savings institutions����������������������������������������� 1,141.2 Total deposits (in billions)��������������������������������������� 10,322.5 Commercial banks������������������������������������������� 9,446.8 Savings institutions����������������������������������������� 875.7 Bank net income (in millions)��������������������������������� 69,305 Commercial banks������������������������������������������� 63,604 Savings institutions����������������������������������������� 5,702 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* Less than $100 $1 Billion Greater $100 Million to to than Million $1 Billion $10 Billion $10 Billion New York 2,342 4,244 553 107 898 2,085 3,614 435 88 479 257 630 118 19 419 $135.4 $1,274.7 $1,425.9 $11,195.0 $2,877.3 121.0 1,057.1 1,132.0 10,579.8 2,317.0 14.4 217.7 293.9 615.2 560.3 114.9 1,062.1 1,106.2 8,039.4 2,089.6 103.2 888.5 882.0 7,573.1 1,663.1 11.7 173.6 224.2 466.3 426.5 487 5,205 8,904 54,710 12,939 475 4,605 7,550 50,974 11,434 12 600 1,355 3,736 1,505 Atlanta 929 831 98 $2,934.8 2,838.8 96.0 2,181.4 2,110.7 70.7 11,370 11,106 265 Chicago 1,540 1,277 263 $3,193.2 3,073.8 119.4 2,239.4 2,149.1 90.3 14,038 13,477 561 Kansas City 1,754 1,668 86 $3,000.2 2,939.5 60.7 2,250.9 2,202.1 48.8 15,595 15,318 277 San Dallas Francisco 1,524 601 1,420 547 104 54 $831.6 $1,194.0 734.7 986.0 96.9 208.0 681.8 879.4 601.7 720.1 80.1 159.3 4,475 10,888 3,783 8,486 692 2,402 4.06 0.57 3.49 1.75 3.01 0.41 0.95 1.44 0.99 8.84 1.13 4.52 0.76 3.76 0.94 3.37 0.21 0.65 0.85 0.71 6.08 0.39 4.57 0.82 3.75 1.05 3.16 0.36 0.76 1.05 0.82 7.61 0.61 4.57 0.74 3.83 1.55 3.09 0.40 1.20 1.62 1.25 10.71 0.76 3.92 0.52 3.40 1.87 2.98 0.42 0.95 1.46 0.99 8.76 1.27 4.33 0.65 3.69 1.47 2.93 0.44 0.88 1.38 0.91 7.33 1.35 3.79 0.48 3.32 1.85 3.15 0.49 0.71 1.16 0.78 6.45 1.19 3.35 0.51 2.83 1.86 3.05 0.18 0.79 1.19 0.88 9.95 0.87 4.45 0.63 3.82 1.75 2.96 0.56 1.07 1.53 1.05 9.48 1.39 4.31 0.56 3.75 1.34 3.14 0.26 1.04 1.41 1.09 9.91 0.56 4.73 0.64 4.10 2.19 2.83 0.47 1.81 2.72 1.85 13.55 0.91 67.48 61.60 10.59 67.87 96.08 77.05 14.22 62.04 94.00 69.93 9.26 70.45 82.61 60.71 6.87 72.15 64.17 60.66 2.80 71.03 61.31 60.45 10.13 60.36 73.98 66.20 20.13 67.81 45.32 70.03 10.45 67.34 74.06 56.63 7.24 70.64 76.82 65.46 6.82 68.44 83.72 46.85 16.14 71.05 87.46 91.08 91.82 90.78 86.50 87.90 86.07 86.26 86.80 91.12 92.15 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��������������������������� 2.35 60.40 1.80 77.86 1.84 65.46 1.95 56.47 2.49 60.31 2.12 82.09 2.58 44.12 2.45 60.08 2.69 64.72 1.81 67.17 1.76 81.05 2.40 11.32 9.25 13.21 15.27 71.07 52.29 63.53 2.21 11.98 11.25 18.41 19.54 66.17 56.13 84.83 2.72 10.90 10.24 15.42 16.63 73.82 61.50 83.25 2.86 11.93 10.55 15.63 16.89 79.15 61.40 77.11 2.30 11.29 8.94 12.60 14.87 69.67 50.03 59.30 1.54 12.34 9.87 14.43 16.07 71.36 51.83 64.36 3.62 12.21 9.07 13.03 15.55 72.79 54.11 70.64 2.19 9.02 7.42 10.82 13.49 64.49 45.23 57.48 2.56 11.04 9.26 12.83 14.66 70.51 52.90 53.77 2.32 11.03 9.88 14.53 16.05 73.33 60.13 81.67 1.65 13.78 12.64 16.93 18.29 82.57 60.81 72.12 Structural Changes New reporters�������������������������������������������������� Institutions absorbed by mergers������������������� Failed institutions�������������������������������������������� 0 72 31 0 26 10 0 38 20 0 6 1 0 2 0 0 13 4 0 14 13 0 4 6 0 15 3 0 12 4 0 14 1 PRIOR FIRST HALVES (The way it was...) Number of institutions������������������������������������ 2011 ������������������������������������������� 2009 ��������������������������������������������2007 7,513 8,195 8,614 2,550 3,013 3,582 4,296 4,484 4,371 561 582 538 106 116 123 932 996 1,070 990 1,164 1,216 1,575 1,685 1,806 1,804 1,914 2,000 1,570 1,680 1,750 642 756 772 Total assets (in billions)���������������������������������� 2011 ������������������������������������������� 2009 ��������������������������������������������2007 $13,602.6 13,279.7 12,261.4 $146.0 165.4 189.8 $1,272.9 1,347.9 1,295.4 $1,422.1 1,500.8 1,410.7 $10,761.6 10,265.6 9,365.4 $2,769.3 2,437.9 2,261.8 $2,916.0 3,493.7 3,004.5 $3,119.5 3,124.6 2,830.9 $1,672.3 1,063.0 910.0 $788.5 777.4 674.4 $2,337.0 2,383.0 2,579.7 Return on assets (%)�������������������������������������� 2011 ������������������������������������������� 2009 ��������������������������������������������2007 0.85 -0.26 1.21 0.53 0.15 0.85 0.54 0.06 1.11 0.82 -0.50 1.13 0.90 -0.28 1.24 1.12 -1.86 1.09 0.53 0.15 1.23 0.69 0.15 1.06 1.21 0.65 1.64 0.90 -0.25 1.13 0.90 -0.17 1.30 Net charge-offs to loans & leases (%)����������� 2011 ������������������������������������������� 2009 ��������������������������������������������2007 1.71 2.25 0.47 0.54 0.76 0.14 0.84 0.95 0.16 1.29 1.81 0.29 1.92 2.57 0.56 2.05 2.56 0.82 1.75 1.97 0.24 1.36 2.01 0.34 1.93 2.35 0.63 0.89 1.13 0.21 1.74 3.03 0.58 Noncurrent assets plus OREO to assets (%)�������������������������������� 2011 ������������������������������������������� 2009 ��������������������������������������������2007 2.76 2.78 0.62 2.40 2.04 0.81 3.34 2.94 0.75 3.36 3.44 0.67 2.61 2.67 0.59 1.87 1.83 0.60 3.82 3.08 0.42 2.56 2.87 0.63 3.82 3.12 1.10 2.92 2.44 0.66 1.92 3.13 0.68 Equity capital ratio (%)����������������������������������� 2011 ������������������������������������������� 2009 ��������������������������������������������2007 11.29 10.42 10.43 11.84 12.44 13.42 10.58 9.92 10.48 11.87 10.60 11.28 11.29 10.42 10.24 12.80 11.79 12.48 12.05 10.97 9.83 8.49 8.55 9.01 11.79 10.79 10.00 11.02 9.96 10.57 12.02 10.63 11.01 * See Table V-A (page 11) for explanations. Note: Blue font identifies data that are also presented in the prior quarters data at bottom of table. FDIC Quarterly 9 2012, Volume 6, No. 3 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* June 30, 2012 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������������������������������������������������������ 1.43 1.15 0.67 0.43 0.91 2.21 0.35 1.48 1.36 1.61 0.20 1.11 0.98 0.00 0.00 0.00 2.60 0.71 1.06 1.30 1.29 1.63 0.02 1.28 2.03 1.28 0.33 0.09 1.31 3.15 0.33 1.74 1.59 2.00 0.15 1.22 0.81 1.06 0.73 0.52 0.59 1.51 1.08 1.52 1.17 1.55 0.36 0.77 1.01 1.28 0.68 0.49 0.73 1.57 0.41 1.45 1.40 1.45 0.27 0.87 1.21 1.16 0.66 0.60 0.64 1.34 0.74 1.04 1.08 1.03 0.10 1.16 0.85 0.54 1.21 1.22 0.67 1.02 0.99 1.51 0.71 1.89 1.40 1.35 1.48 1.06 1.18 1.10 0.68 1.99 1.11 1.98 1.51 2.00 0.56 1.44 1.51 1.23 1.27 1.08 0.65 1.79 1.17 1.80 0.59 1.83 0.56 1.44 1.91 0.78 0.66 0.49 0.92 2.92 0.20 1.52 1.38 1.56 0.16 1.31 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������������������������������������������������������ 6.32 10.81 3.34 2.03 2.62 9.40 1.09 1.20 1.39 1.00 0.45 3.89 4.12 0.00 0.00 0.00 3.91 5.60 1.41 1.38 1.37 1.59 0.03 1.38 8.87 5.41 2.06 0.99 4.33 14.44 1.05 1.37 1.51 1.15 0.40 3.97 1.98 6.86 2.82 3.10 1.02 1.52 1.92 0.54 0.27 0.56 0.45 1.53 4.01 10.77 3.26 2.18 1.35 4.54 1.26 1.19 1.44 1.17 0.61 3.00 3.83 10.48 3.87 2.20 1.74 3.95 1.56 0.80 1.10 0.75 0.16 3.57 2.10 5.09 2.91 2.16 2.34 1.60 0.77 1.81 0.80 2.30 0.75 1.84 3.35 11.06 3.64 1.52 0.82 2.07 1.38 1.05 1.14 1.05 2.13 2.76 2.46 8.54 2.60 2.68 0.90 2.01 1.91 0.64 0.35 0.65 0.74 2.13 10.09 12.18 3.79 2.42 3.03 15.34 0.81 0.78 1.39 0.63 0.39 5.78 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������������������������������������������������������ 1.02 2.01 0.56 0.39 1.84 1.02 0.57 2.63 4.17 0.96 0.17 1.13 3.02 0.00 0.00 0.00 2.89 4.18 4.23 4.11 4.14 3.47 0.00 4.09 1.49 1.81 0.26 0.25 2.06 1.88 0.37 3.70 4.94 1.56 0.10 1.43 0.19 0.91 0.24 0.27 0.39 0.21 0.37 0.33 0.55 0.30 0.00 0.19 0.85 2.32 0.59 0.49 1.12 0.80 0.55 0.92 4.42 0.65 0.25 0.76 0.79 1.62 0.97 0.21 2.15 0.64 0.69 1.23 3.80 0.81 0.23 0.79 1.44 0.59 0.18 0.00 1.94 1.04 5.17 1.41 2.70 0.78 2.10 1.53 0.25 0.98 0.25 0.68 0.54 0.11 0.27 0.50 2.48 0.37 1.88 0.37 0.34 1.05 0.35 0.72 0.29 0.28 0.70 0.49 1.08 0.47 0.00 0.38 1.23 1.40 0.49 0.24 2.28 1.14 0.40 1.25 2.89 0.82 0.21 0.96 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)�������������� $4,086.6 217.4 1,058.4 224.5 580.2 1,875.3 1,423.1 1,282.0 664.3 617.8 723.2 7,514.9 $0.1 0.0 0.0 0.0 0.0 0.0 36.7 422.1 402.6 19.5 3.1 462.0 $491.0 6.9 35.4 38.8 102.9 253.4 263.1 254.0 160.6 93.5 272.5 1,280.6 $78.1 3.7 22.1 1.9 1.6 20.5 17.0 6.4 0.5 5.8 32.7 134.1 $1,798.5 144.4 721.1 133.7 186.9 578.2 607.8 198.6 14.4 184.2 162.5 2,767.4 $415.0 7.1 29.9 11.2 32.6 332.8 11.4 14.8 2.3 12.5 13.0 454.2 $14.8 0.3 0.6 0.1 7.3 6.4 2.0 51.9 16.9 35.0 0.3 69.1 $13.0 1.0 4.6 0.3 0.5 5.9 2.3 2.2 0.1 2.0 1.0 18.5 $59.0 3.2 15.4 1.6 2.5 32.2 7.2 6.8 0.2 6.6 5.4 78.4 $1,217.1 50.8 229.2 37.0 245.9 645.9 475.5 325.2 66.6 258.7 232.7 2,250.6 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������������������������������������������������������ 41,788.4 14,273.2 10,093.9 1,241.0 9,530.2 416.8 6,095.4 0.1 0.0 0.0 0.0 0.1 0.0 0.0 2,508.1 79.8 54.6 5.0 859.7 0.0 1,412.0 813.7 295.5 299.6 28.0 143.8 45.8 1.1 24,945.2 11,244.7 7,460.3 848.1 4,472.9 321.6 558.9 2,715.8 512.3 378.2 61.2 1,102.7 3.5 657.7 33.9 6.2 6.6 1.0 19.2 0.8 0.0 247.3 107.0 77.9 5.0 54.0 3.4 0.0 698.1 203.3 219.1 11.3 239.4 23.1 2.0 9,826.3 1,824.5 1,597.7 281.4 2,638.4 18.6 3,463.7 * Asset Concentration Group Definitions (Groups are hierarchical and mutually exclusive): Credit-card Lenders - Institutions whose credit-card loans plus securitized receivables exceed 50 percent of total assets plus securitized receivables. International Banks - Banks with assets greater than $10 billion and more than 25 percent of total assets in foreign offices. Agricultural Banks - Banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of the total loans and leases. Commercial Lenders - Institutions whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties exceed 25 percent of total assets. Mortgage Lenders - Institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets. Consumer Lenders - Institutions whose residential mortgage loans, plus credit-card loans, plus other loans to individuals, exceed 50 percent of total assets. Other Specialized < $1 Billion - Institutions with assets less than $1 billion, whose loans and leases are less than 40 percent of total assets. All Other < $1 billion - Institutions with assets less than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. All Other > $1 billion - Institutions with assets greater than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 10 2012, Volume 6, No. 3 Quarterly Banking Profile TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution June 30, 2012 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��������������������������������������������� 1.43 1.15 0.67 0.43 0.91 2.21 0.35 1.48 1.36 1.61 0.20 1.11 1.49 1.45 1.27 0.82 0.93 1.98 1.31 1.99 1.48 1.99 0.44 1.37 1.06 1.26 0.86 0.76 0.72 1.40 0.88 1.56 1.89 1.53 0.37 1.02 0.94 1.17 0.64 0.43 0.66 1.44 0.55 1.44 1.58 1.38 0.22 0.88 1.62 1.08 0.59 0.35 0.94 2.46 0.28 1.48 1.35 1.63 0.18 1.16 1.07 1.46 0.66 0.41 0.64 1.48 0.46 1.34 1.23 1.67 0.15 0.98 1.61 1.10 0.75 0.62 1.11 2.31 0.23 1.93 1.79 2.01 0.07 1.25 1.29 1.24 0.72 0.37 1.05 1.91 0.42 1.52 1.12 1.65 0.28 1.00 2.07 0.74 0.66 0.47 0.88 3.53 0.28 1.58 1.61 1.53 0.15 1.38 1.19 0.97 0.73 0.64 0.69 1.83 0.55 0.99 0.71 1.14 0.29 1.00 0.90 1.65 0.48 0.32 0.38 1.41 0.37 1.08 1.06 1.10 0.57 0.82 Percent of Loans Noncurrent** All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 6.32 10.81 3.34 2.03 2.62 9.40 1.09 1.20 1.39 1.00 0.45 3.89 2.76 8.27 3.37 2.97 1.16 2.33 2.17 0.82 0.63 0.82 0.59 2.31 3.21 9.77 3.01 2.56 1.36 2.49 1.93 0.91 1.30 0.88 0.69 2.81 4.29 11.11 3.44 2.52 1.41 4.80 1.71 0.74 1.32 0.52 0.67 3.45 7.55 11.23 3.43 1.73 2.82 11.32 0.93 1.24 1.39 1.05 0.41 4.13 3.80 12.09 3.12 1.32 1.25 4.41 1.36 1.28 1.36 1.03 0.22 2.58 9.49 13.46 3.90 3.06 3.07 14.23 0.95 1.24 1.37 1.16 0.32 5.84 6.82 10.54 3.64 2.29 3.06 10.83 1.19 1.07 1.50 0.93 0.24 4.07 7.30 9.92 3.39 1.86 3.23 11.41 0.97 1.27 1.54 0.89 0.76 4.15 3.61 6.45 2.84 3.34 1.60 4.05 1.15 0.56 0.74 0.47 0.79 2.70 3.22 10.63 2.74 1.86 0.92 3.62 1.01 1.19 1.26 1.13 0.75 2.17 Percent of Loans Charged-off (net, YTD) All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 1.02 2.01 0.56 0.39 1.84 1.02 0.57 2.63 4.17 0.96 0.17 1.13 0.38 1.32 0.40 0.43 0.65 0.34 0.59 0.45 1.27 0.44 0.00 0.39 0.57 1.76 0.47 0.56 0.55 0.47 0.86 0.89 4.60 0.61 0.27 0.61 0.72 2.29 0.57 0.46 0.88 0.57 0.69 1.60 3.69 0.78 0.31 0.76 1.20 2.02 0.60 0.33 2.02 1.19 0.53 2.75 4.18 1.00 0.15 1.27 0.58 1.88 0.50 0.39 0.74 0.49 0.88 3.67 4.44 1.42 0.14 1.35 1.46 2.81 0.83 0.57 2.59 1.25 0.50 1.58 2.93 0.81 0.24 1.19 1.03 2.06 0.73 0.41 1.56 1.01 0.49 1.53 3.80 0.77 0.12 0.87 1.30 1.78 0.34 0.40 2.46 1.56 0.48 3.52 4.99 1.45 0.18 1.39 0.55 0.98 0.34 0.52 1.24 0.54 0.43 1.12 2.41 0.46 0.27 0.56 0.62 1.96 0.43 0.14 0.67 0.72 0.73 1.87 3.39 0.52 0.17 0.91 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)����� $4,086.6 217.4 1,058.4 224.5 580.2 1,875.3 1,423.1 1,282.0 664.3 617.8 723.2 7,514.9 $53.7 3.1 15.6 1.6 1.6 23.7 9.7 5.0 0.1 5.0 9.1 77.4 $619.5 52.0 248.2 30.9 31.3 221.2 103.4 35.9 2.5 33.4 40.4 799.1 $642.5 51.9 261.3 48.8 46.6 219.8 144.2 66.4 18.4 48.0 40.5 893.6 $2,770.9 110.3 533.3 143.3 500.7 1,410.6 1,165.9 1,174.8 643.3 531.4 633.2 5,744.7 $828.5 37.6 237.9 71.2 93.8 380.9 213.5 366.2 270.9 95.3 115.8 1,524.0 $935.0 57.7 216.3 28.4 157.1 466.8 322.9 234.1 88.9 145.2 138.0 1,630.0 $794.9 35.9 190.2 63.6 143.6 345.4 298.5 185.0 45.3 139.7 202.2 1,480.6 $813.0 32.7 161.1 22.2 128.8 390.0 330.4 280.2 162.9 117.3 207.7 1,631.3 $334.9 36.5 122.3 9.9 20.7 133.1 100.5 47.2 16.0 31.2 26.9 509.4 $380.4 16.9 130.5 29.2 36.2 159.2 157.3 169.4 80.4 89.0 32.6 739.6 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��������������������������������������������� 41,788.4 14,273.2 10,093.9 1,241.0 9,530.2 416.8 6,095.4 1,181.8 400.1 378.3 61.9 312.4 27.5 1.6 12,012.0 5,442.8 3,761.4 360.1 2,244.6 199.6 3.5 9,826.4 4,676.3 2,844.5 303.9 1,746.2 141.1 114.6 18,768.2 3,754.0 3,109.8 515.2 5,227.1 48.6 5,975.7 4,800.5 1,218.2 1,334.5 185.7 1,599.2 34.7 390.1 10,724.6 4,219.9 2,175.3 281.9 2,554.9 87.9 1,404.7 9,080.0 1,979.4 1,943.6 299.1 2,092.2 87.6 2,678.1 8,188.0 2,706.1 1,916.4 192.4 1,645.2 69.9 1,559.0 5,450.8 2,624.5 1,573.8 162.6 944.0 96.0 49.9 3,544.6 1,525.2 1,150.3 119.3 694.7 40.8 13.6 * Regions: New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, U.S. Virgin Islands Atlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia Chicago - Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin Kansas City - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota Dallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, Texas San Francisco - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 11 2012, Volume 6, No. 3 Table VI-A. Derivatives, All FDIC-Insured Call Report Filers Asset Size Distribution 2nd Quarter 2012 1st Quarter 2012 4th Quarter 2011 3rd Quarter 2011 2nd Quarter 2011 (dollar figures in millions; notional amounts unless otherwise indicated) ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives����������������� 1,323 1,288 1,190 1,188 1,165 Total assets of institutions reporting derivatives���������� $12,210,213 $12,088,779 $11,467,639 $11,351,495 $11,166,018 Total deposits of institutions reporting derivatives������� 8,883,116 8,805,683 8,298,390 8,106,781 7,895,134 Total derivatives������������������������������������������������������������� 224,998,167 230,364,892 231,879,988 250,460,992 251,133,282 Less $100 $1 Billion %Change than $100 Million to to $10 Greater than 11Q2-12Q2 Million $1 Billion Billion $10 Billion 13.6 9.4 12.5 -10.4 91 $6,630 5,600 326 799 $323,067 265,707 27,624 341 $998,807 782,998 93,845 92 $10,881,708 7,828,811 224,876,374 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 178,805,823 183,730,134 187,530,951 202,128,411 204,508,865 Foreign exchange*�������������������������������������������������������� 29,089,927 29,211,390 26,500,008 29,283,191 28,389,032 Equity����������������������������������������������������������������������������� 1,984,983 1,898,562 1,588,737 1,786,008 1,654,652 Commodity & other (excluding credit derivatives)�������� 1,493,094 1,473,732 1,501,077 1,602,067 1,351,825 Credit������������������������������������������������������������������������������ 13,624,340 14,051,075 14,759,214 15,661,315 15,228,907 Total�������������������������������������������������������������������������������� 224,998,167 230,364,892 231,879,988 250,460,992 251,133,282 -12.6 2.5 20.0 10.5 -10.5 -10.4 322 0 3 1 0 326 26,894 432 69 17 212 27,624 86,664 6,065 673 329 114 93,845 178,691,944 29,083,430 1,984,239 1,492,747 13,624,014 224,876,374 Derivative Contracts by Transaction Type Swaps���������������������������������������������������������������������������� 134,469,546 138,658,393 146,265,646 156,143,298 156,064,620 Futures & forwards�������������������������������������������������������� 40,602,824 40,479,930 37,252,578 39,794,853 40,973,198 Purchased options��������������������������������������������������������� 16,897,203 17,548,670 16,524,639 18,511,697 18,861,506 Written options��������������������������������������������������������������� 16,710,512 17,103,027 16,014,682 17,862,163 18,099,390 Total�������������������������������������������������������������������������������� 208,680,085 213,790,021 216,057,545 232,312,010 233,998,715 -13.8 -0.9 -10.4 -7.7 -10.8 29 113 32 151 326 6,505 10,091 643 9,969 27,207 46,159 134,416,853 25,414 40,567,206 4,920 16,891,608 16,680 16,683,712 93,172 208,559,379 Fair Value of Derivative Contracts Interest rate contracts��������������������������������������������������� Foreign exchange contracts������������������������������������������ Equity contracts������������������������������������������������������������� Commodity & other (excluding credit derivatives)�������� Credit derivatives as guarantor������������������������������������� Credit derivatives as beneficiary����������������������������������� 92,781 -3,883 3,406 -1,719 -179,121 185,112 93,550 -3,875 -380 -2,004 -127,599 131,291 89,141 25,705 1,657 -1,559 -289,532 303,241 92,984 33,038 6,441 773 -370,779 387,580 88,672 15,548 299 148 -67,253 75,397 4.6 N/M 1,039.1 N/M N/M 145.5 1 0 0 0 0 0 30 0 1 0 -1 -1 154 8 12 2 2 -3 92,596 -3,892 3,393 -1,722 -179,122 185,116 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 82,505,329 30,337,222 21,795,561 18,604,099 2,926,354 1,422,938 597,782 262,864 81,390 442,492 205,411 24,628 85,881,609 31,691,226 22,691,140 18,849,154 3,017,933 1,349,611 539,407 241,998 88,815 481,515 203,940 20,361 87,811,894 32,750,418 24,167,662 17,593,968 3,060,132 1,475,128 426,621 210,410 93,653 375,875 241,723 46,181 95,374,598 34,134,320 24,968,981 19,276,990 2,961,939 1,446,010 375,359 241,995 97,743 434,161 266,044 29,127 94,640,370 35,300,646 25,211,181 17,878,072 3,151,169 1,501,429 358,257 226,000 93,112 438,496 237,875 30,222 -12.8 -14.1 -13.5 4.1 -7.1 -5.2 66.9 16.3 -12.6 0.9 -13.6 -18.5 92 35 38 0 0 0 0 0 0 0 0 0 10,124 2,967 3,120 228 0 0 7 16 1 0 5 0 23,285 24,379 16,631 4,208 190 376 87 147 15 91 97 0 82,471,828 30,309,842 21,775,772 18,599,664 2,926,164 1,422,562 597,687 262,702 81,374 442,400 205,309 24,628 44.5 79.3 52.5 82.8 38.3 87.3 0.1 0.1 0.7 0.2 1.4 0.4 44.3 75.5 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 (%)�������������������������������������������������� 38.9 66.1 36.3 71.9 105.1 108.2 123.8 135.3 125.7 0.2 0.9 1.7 119.8 Credit losses on derivatives***���������������������������������� 130.8 76.3 1832.5 1763.8 1672.9 -92.2 0.0 0.2 0.7 129.9 HELD FOR TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 233 9,805,274 7,119,133 209 9,691,098 7,068,635 199 9,516,217 6,917,213 193 9,461,453 6,771,052 197 9,307,611 6,604,240 18.3 5.3 7.8 11 752 634 92 40,484 33,172 70 259,045 202,195 60 9,504,993 6,883,132 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 174,788,650 179,735,905 183,607,223 198,005,763 200,467,447 Foreign exchange���������������������������������������������������������� 25,617,541 25,879,318 24,779,179 26,435,948 26,123,843 Equity����������������������������������������������������������������������������� 1,971,135 1,884,958 1,581,757 1,779,267 1,648,685 Commodity & other�������������������������������������������������������� 1,476,700 1,460,464 1,476,234 1,581,316 1,331,805 Total�������������������������������������������������������������������������������� 203,854,025 208,960,646 211,444,393 227,802,295 229,571,781 -12.8 -1.9 19.6 10.9 -11.2 42 0 0 1 43 2,799 0 0 7 2,806 16,179 2,720 41 60 19,000 174,769,630 25,614,821 1,971,093 1,476,631 203,832,176 -24.2 328.8 24.4 N/M -70.0 0 0 0 0 0 -1 0 0 0 -1 18 -3 2 -1 16 2,717 2,134 1,008 -3,884 1,975 0.0 0.0 -0.2 -1.2 0.5 2.9 1.8 10.8 Trading Revenues: Cash & Derivative Instruments Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other (including credit derivatives)�������� Total trading revenues��������������������������������������������������� 2,734 2,131 1,010 -3,885 1,990 5,630 1,504 257 -1,032 6,358 252 2,229 -111 160 2,529 2,083 2,632 1,443 2,323 8,480 3,606 497 812 1,712 6,627 Share of Revenue Trading revenues to gross revenues (%)���������������������� Trading revenues to net operating revenues (%)���������� 1.7 10.5 5.2 30.3 2.2 17.4 7.2 40.6 5.6 41.2 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 1,183 11,788,104 8,545,471 1,169 11,775,167 8,563,169 1,074 11,167,075 8,065,789 1,080 11,130,959 7,938,138 1,056 10,827,824 7,727,004 12.0 8.9 10.6 80 5,878 4,966 718 287,815 236,476 301 885,817 693,327 84 10,608,595 7,610,702 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other�������������������������������������������������������� Total notional amount���������������������������������������������������� 4,017,174 778,644 13,849 16,394 4,826,060 3,994,228 808,276 13,603 13,268 4,829,375 3,923,729 657,600 6,980 24,842 4,613,151 4,122,648 359,576 6,741 20,751 4,509,715 4,041,418 359,529 5,967 20,020 4,426,934 -0.6 116.6 132.1 -18.1 9.0 280 0 3 0 282 24,095 228 69 10 24,402 70,486 2,787 631 268 74,172 3,922,314 775,629 13,146 16,115 4,727,204 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 2012, Volume 6, No. 3 Quarterly Banking Profile TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Call Report Filers) Asset Size Distribution (dollar figures in millions) Assets Securitized and Sold with Servicing Retained or with Recourse or Other Seller-Provided Credit Enhancements 2nd Quarter 2012 1st Quarter 2012 4th Quarter 2011 3rd Quarter 2011 2nd Quarter 2011 % Change Less than $100 $1 Billion Greater 11Q2$100 Million to to $10 than $10 12Q2 Million $1 Billion Billion Billion Number of institutions reporting securitization activities����������������������������������������� Outstanding Principal Balance by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total securitized and sold������������������������������������������������������������������������������������������ 178 177 140 138 135 31.9 23 91 30 34 $750,719 52 16,988 4,520 4,826 66 209,102 986,273 $741,880 54 18,691 2,822 4,748 67 204,771 973,032 $730,853 0 11,818 946 4,862 63 196,124 944,666 $749,803 0 10,561 1,034 4,979 70 198,826 965,273 $758,015 1,028 10,902 228 4,667 72 195,725 970,638 -1.0 -94.9 55.8 1,882.5 3.4 -8.3 6.8 1.6 $188 0 0 0 0 3 2 192 $3,198 1 585 0 0 18 2,886 6,688 $9,449 0 0 13 0 31 5,233 14,726 $737,885 51 16,403 4,507 4,826 15 200,981 964,667 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��� 3,692 0 611 1 209 0 2,302 6,816 127 3,797 0 617 1 205 0 3,015 7,636 121 3,895 0 550 2 208 0 1,309 5,964 121 4,116 0 561 3 216 0 697 5,592 129 4,321 0 531 56 202 0 476 5,584 124 -14.6 0.0 15.1 -98.2 3.5 0.0 383.6 22.1 2.4 1 0 0 0 0 0 0 1 0 83 0 197 0 0 0 4 284 6 50 0 0 1 0 0 0 51 0 3,558 0 414 0 209 0 2,298 6,479 121 3.7 13.3 0.8 0.4 4.6 3.9 1.3 3.2 3.4 11.7 0.9 0.3 5.1 0.5 0.9 2.8 4.0 0.0 1.4 0.4 5.6 0.5 0.6 3.3 4.2 0.0 1.8 0.1 4.4 0.0 1.4 3.6 4.0 1.5 1.6 1.9 4.5 0.0 0.9 3.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 0.0 1.6 0.0 0.0 0.0 0.4 0.6 6.5 0.0 0.0 0.7 0.0 8.6 0.3 4.3 3.7 13.6 0.8 0.4 4.6 0.0 1.4 3.2 5.5 26.1 0.3 0.0 5.0 3.1 6.9 5.6 5.6 25.8 0.4 0.0 5.5 3.6 7.1 5.8 6.4 0.0 0.6 0.0 6.2 0.0 7.5 6.6 6.4 0.0 0.7 0.0 4.6 0.0 6.6 6.4 6.9 3.2 0.7 0.2 4.7 0.0 6.2 6.7 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.6 0.0 1.6 0.0 0.0 0.0 0.0 0.4 2.9 0.0 0.0 0.1 0.0 6.7 1.2 2.3 5.5 26.7 0.2 0.0 5.0 0.0 7.1 5.7 0.7 1.2 1.5 0.0 0.5 0.0 0.2 0.6 0.3 0.6 4.9 0.0 0.3 0.0 0.1 0.4 1.2 0.0 5.3 0.0 1.2 0.0 0.4 1.1 0.9 0.0 4.7 0.0 0.9 0.0 0.2 0.8 0.6 1.6 3.3 1.1 0.6 0.0 0.1 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.1 0.0 0.0 0.0 0.0 0.3 0.0 0.0 0.0 -0.4 0.0 0.0 0.0 0.0 0.7 1.2 1.5 0.0 0.5 0.0 0.2 0.6 0 14,964 12 0 13,100 9 0 9,052 3 0 9,252 2 0 9,115 2 0.0 64.2 500.0 0 0 3 0 72 10 0 0 0 0 14,892 0 0 0 0 0 0 0 0 0 0 0 0 0 447 0 0 -100.0 0.0 0.0 0 0 0 0 0 0 0 0 0 0 0 0 Securitized Loans, Leases, and Other Assets 30-89 Days Past Due (%) 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Securitized Loans, Leases, and Other Assets 90 Days or More Past Due (%) 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Securitized Loans, Leases, and Other Assets Charged-off (net, YTD, annualized, %) 1-4 family residential loans�������������������������������������������������������������������������������� Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Auto loans���������������������������������������������������������������������������������������������������������� Other consumer loans��������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total loans, leases, and other assets����������������������������������������������������������������������� Seller's Interests in Institution's Own Securitizations - Carried as Loans Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� Seller's Interests in Institution's Own Securitizations - Carried as Securities Home equity loans��������������������������������������������������������������������������������������������� Credit card receivables������������������������������������������������������������������������������������� Commercial and industrial loans����������������������������������������������������������������������� Assets Sold with Recourse and Not Securitized Number of institutions reporting asset sales������������������������������������������������������������ Outstanding Principal Balance by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� 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����������������������������������������������������������������������������������� 994 980 878 861 864 15.0 169 631 148 46 57,553 883 56 62,899 121,391 55,131 895 58 63,221 119,305 52,708 913 56 53,528 107,205 52,348 1,296 70 55,111 108,825 55,181 1,360 147 54,922 111,609 4.3 -35.1 -61.9 14.5 8.8 1,279 0 0 1 1,280 13,967 2 41 31 14,040 10,511 22 2 424 10,958 31,797 859 13 62,444 95,114 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������������������������������������������������������������������������������������������������� 16,945 168 38 14,277 31,428 14,469 170 41 14,320 29,000 13,367 176 39 13,962 27,544 12,706 188 53 13,789 26,735 13,295 192 127 13,513 27,127 27.5 -12.5 -70.1 5.7 15.9 139 0 0 0 139 3,039 2 31 28 3,100 6,503 4 2 37 6,545 7,264 162 5 14,212 21,644 Support for Securitization Facilities Sponsored by Other Institutions Number of institutions reporting securitization facilities sponsored by others������� Total credit exposure������������������������������������������������������������������������������������������������� 176 62,952 176 70,542 164 62,015 158 44,284 159 38,052 10.7 65.4 19 13 100 3,119 37 538 20 59,282 Total unused liquidity commitments������������������������������������������������������������������������� 1,275 621 567 593 632 101.7 0 0 0 1,275 5,611,091 5,793,238 5,227,071 Other Assets serviced for others*��������������������������������������������������������������������������������������� Asset-backed commercial paper conduits Credit exposure to conduits sponsored by institutions and others������������������ Unused liquidity commitments to conduits sponsored by institutions and others�������������������������������������������������������������������������������������������������� Net servicing income (for the quarter)���������������������������������������������������������������������� Net securitization income (for the quarter)��������������������������������������������������������������� Total credit exposure to Tier 1 capital (%)**������������������������������������������������������������� 5,471,052 5,637,377 5,755,719 -2.5 4,899 115,566 263,555 12,801 11,429 11,672 11,484 10,109 26.6 5 1 39 12,756 73,694 76,121 81,848 71,757 70,504 4.5 0 0 908 72,786 2,408 243 8.1 4,464 276 8.7 3,313 237 7.8 -1,649 179 6.3 2,446 138 5.9 -1.6 76.1 40 0 1.0 133 17 5.0 121 11 4.8 2,114 215 9.2 * 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 2012, Volume 6, No. 3 Quarterly Banking Profile INSURANCE FUND INDICATORS The DIF Reserve Ratio Rises 10 Basis Points to 0.32 Percent ■ Fees Earned from Debt Guarantees Under the Temporary Liquidity Guarantee Program Add $4 Billion to the DIF ■ $1.4 Trillion Temporarily Insured in Noninterest-Bearing Transaction Accounts ■ 15 Institutions Fail During the Second Quarter ■ Total assets of the nation’s 7,246 FDIC-insured commercial banks and savings institutions increased by 0.8 percent ($105.3 billion) in the second quarter of 2012. Total deposits increased by 0.6 percent ($61.6 billion), domestic office deposits increased by 1.0 percent ($88.1 billion), and foreign office deposits decreased by 1.8 percent ($26.5 billion). Domestic noninterest-bearing deposits increased by 2.9 percent ($65.6 billion), while domestic interest-bearing deposits rose 0.3 percent ($22.5 billion). For the 12 months ending June 30, 2012, total domestic deposits grew by 8.4 percent ($688.1 billion), with domestic noninterestbearing deposits rising by 20.2 percent ($387.2 billion) and domestic interest-bearing deposits increasing by 4.8 percent ($300.9 billion). the past 12 months.2 The large 12-month increase was primarily attributable to the growth in noninterestbearing transaction account balances that are fully insured through December 31, 2012. For institutions in existence at the start and the end of the second quarter, insured deposits increased at 3,137 institutions (43 percent), decreased at 4,076 institutions (56 percent), and remained unchanged at 32 institutions. During the second quarter the Deposit Insurance Fund (DIF) increased by $7.4 billion to $22.7 billion (unaudited). Fees from the debt guarantees under the Temporary Liquidity Guarantee Program added $4.0 billion to the DIF balance during the quarter, and assessment income added $2.9 billion. Interest earnings, combined with a negative provision for insurance losses, and other net revenue increased the fund by another $947 million. Operating expenses combined with unrealized losses on available-for-sale securities reduced the fund by $515 million. At the end of the second quarter, domestic deposits funded 63.5 percent of industry assets. Insured insti tutions held $1.6 trillion in domestic noninterest- bearing transaction accounts larger than $250,000 at June 30. Of this total, $1.4 trillion exceeded the basic coverage limit of $250,000 per account, but is temporarily fully insured through December 31, 2012.1 Balances exceeding the $250,000 limit in noninterestbearing transaction accounts increased by 5.0 percent ($65.7 billion) during the second quarter and by 32.1 percent ($335.8 billion) over the past four quarters. Table 1 on page 16 provides the distribution of large noninterest-bearing transaction accounts by institution asset size. The DIF reserve ratio rose to 0.32 percent at June 30, 2012, from 0.22 percent at March 31, 2012, and 0.06 percent at June 30, 2011. Fifteen FDIC-insured institutions with combined assets of $2.7 billion failed during the second quarter of 2012. For these failures, losses to the DIF are estimated at $520 million. Effective April 1, 2011, the deposit insurance assessment base changed to average consolidated total assets minus average tangible equity.3 Revisions to insurance assessment rates and risk-based pricing rules for large banks (banks with assets greater than $10 billion) also became effective on that date.4 Table 2 on page 16 shows the d istribution of the assessment base as of June 30, 2012, by institution asset size. Total estimated insured deposits increased by 0.7 percent in the second quarter and by 8.4 percent over The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), enacted on July 21, 2010, provides temporary unlimited deposit insurance coverage for noninterest-bearing transaction accounts from December 31, 2010, through December 31, 2012, regardless of the balance in the account and the ownership capacity of the funds. The unlimited coverage is available to all depositors, including consumers, businesses and government entities. The coverage is separate from, and in addition to, the insurance coverage provided for a depositor’s other accounts held at an FDIC-insured bank. 1 FDIC Quarterly Figures for estimated insured deposits in this discussion include insured branches of foreign banks, in addition to insured commercial banks and savings institutions. 3 There is an additional adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank. 4 The Fourth Quarter 2010 Quarterly Banking Profile includes a detailed explanation of these changes. 2 15 2012, Volume 6, No. 3 Table 1 Insured Commercial Banks and Savings Institutions as of June 30, 2012 Distribution of Noninterest-Bearing Domestic Deposits by Asset Size Dodd-Frank Domestic Noninterest-Bearing Transaction Accounts Larger than $250,000 Asset Size Less than $1 Billion $1 - $10 Billion $10 - $50 Billion $50 - $100 Billion Over $100 Billion Total Number of Institutions 6,586 553 71 17 19 7,246 Total Assets ($ Bil.) $1,410.2 1,425.9 1,399.1 1,295.8 8,500.1 14,031.0 Total ($ Bil.) $73.1 105.8 128.6 124.4 1,144.5 1,576.3 Amount Above the $250,000 Coverage Limit ($ Bil.) $47.5 77.8 106.5 108.4 1,041.9 1,382.1 March 31, 2012 December 31, 2011 September 30, 2011 June 30, 2011 March 31, 2011 December 31, 2010 7,308 7,357 7,437 7,513 7,574 7,658 13,925.7 13,892.2 13,811.9 13,602.6 13,414.3 13,318.9 1,504.6 1,585.3 1,392.9 1,213.7 1,052.9 1,015.7 1,316.4 1,402.2 1,216.0 1,046.3 893.4 858.9 Other NoninterestAverage Average Bearing Account Number of Deposits* Size Accounts per ($ Bil.) ($000) Institution $714 16 $122.7 947 202 92.0 1,460 1,240 69.4 1,939 3,775 48.4 2,788 21,602 390.6 2,029 107 723.3 1,999 2,164 1,969 1,812 1,650 1,619 103 100 95 89 84 82 729.3 680.2 700.5 698.7 694.2 673.8 * Includes noninterest-bearing transaction accounts smaller than $250,000 and noninterest-bearing deposits not classified as transaction accounts. Table 2 Distribution of the Assessment Base for FDIC-Insured Institutions* by Asset Size Data as of June 30, 2012 Asset Size Less than $1 Billion $1 - $10 Billion $10 - $50 Billion $50 - $100 Billion Over $100 Billion Total Number of Institutions 6,586 553 71 17 19 7,246 Percent of Assessment Base** Total Institutions ($ Bil.) 90.9% $1,259 7.6% 1,274 1.0% 1,217 0.2% 1,106 0.3% 7,271 100.0% 12,127 Percent of Base 10.4% 10.5% 10.0% 9.1% 60.0% 100.0% * Excludes insured U.S. branches of foreign banks. ** Average consolidated total assets minus average tangible equity, with adjustments for banker’s banks and custodial banks. Dodd-Frank requires that, for at least five years, the FDIC must make available to the public the reserve ratio and the Designated Reserve Ratio (DRR) using both estimated insured deposits and the new assessment base. As of June 30, 2012, the DIF reserve ratio would have been 0.19 percent using the new assessment base (compared to 0.32 percent based on estimated insured deposits). The 2 percent DRR based on estimated insured deposits would have been 1.2 percent using the new assessment base. FDIC Quarterly Author: Kevin Brown, Senior Financial Analyst Division of Insurance and Research (202) 898-6817 16 2012, Volume 6, No. 3 Quarterly Banking Profile Table I-B. Insurance Fund Balances and Selected Indicators Deposit Insurance Fund* 2nd 1st 4th 3rd Quarter Quarter Quarter Quarter 2011 2011 2010 2010 -$1,023 -$7,352 -$8,009 -$15,247 2nd Quarter 2012 $15,292 1st Quarter 2012 $11,827 4th Quarter 2011 $7,813 3rd Quarter 2011 $3,916 2,933 3,694 3,209 3,642 3,163 3,484 3,498 81 20 33 30 37 28 0 407 0 460 0 334 0 433 0 463 0 395 -807 12 1,533 -763 -2,095 4,095 63 2,599 83 -108 7,401 160 3,465 40 4,014 Ending Fund Balance����������� Percent change from four quarters earlier��������� 22,693 15,292 479.49 NM Reserve Ratio (%)����������������� 0.32 0.22 (dollar figures in millions) Beginning Fund Balance����� Changes in Fund Balance: Assessments earned�������������� Interest earned on investment securities������ Realized gain on sale of investments���������������������� Operating expenses��������������� Provision for insurance losses������������������������������� All other income, net of expenses��������������� Unrealized gain/(loss) on available-for-sale securities������������������������� Total fund balance change����� Estimated Insured Deposits**������������������������������ 7,085,977 Percent change from four quarters earlier��������� 8.45 Domestic Deposits��������������� Percent change from four quarters earlier��������� 2nd Quarter 2010 -$20,717 1st Quarter 2010 -$20,862 4th Quarter 2009 -$8,243 3rd Quarter 2009 $10,368 2nd Quarter 2009 $13,007 3,592 3,242 3,278 3,042 2,965 9,095 39 40 64 62 76 176 240 0 452 0 414 0 382 0 345 0 379 732 328 521 298 -3,089 2,446 -3,763 -2,552 3,021 17,766 21,694 11,615 80 66 48 94 55 22 2,721 308 375 -188 3,897 27 4,939 57 6,329 -30 657 163 7,238 -61 5,470 149 145 -313 -12,619 -770 -18,611 -957 -2,639 11,827 7,813 3,916 -1,023 -7,352 -8,009 -15,247 -20,717 -20,862 -8,243 10,368 NM NM NM NM NM NM NM NM NM NM -77.07 0.17 0.12 0.06 -0.02 -0.12 -0.15 -0.28 -0.38 -0.39 -0.16 0.22 7,033,288 6,980,704 6,765,799 6,534,110 6,386,189 6,307,864 5,421,425 5,437,417 5,472,402 5,407,773 5,315,927 4,817,789 24.80 20.17 16.70 16.64 1.98 12.86 13.26 13.83 16.96 7.83 8,782,125 8,526,664 8,244,868 8,006,891 10.13 8,937,716 8,848,655 Number of institutions reporting������������������������� 10.67 7,887,734 7,753,409 7,681,284 7,702,451 7,705,353 7,561,334 7,561,996 11.63 12.18 11.34 9.97 7.34 3.95 2.37 2.54 1.58 2.06 2.66 4.58 7.47 7,255 7,317 7,366 7,446 7,522 7,583 7,667 7,770 7,839 7,943 8,021 8,108 8,204 Deposit Insurance Fund Balance and Insured Deposits ($ Millions) DIF Reserve Ratios Percent of Insured Deposits 0.32 0.22 0.17 0.22 0.12 0.06 -0.16 -0.39 -0.38 -0.28 -0.15 -0.12 -0.02 6/09 12/09 6/10 12/10 6/11 12/11 6/12 DIF Balance DIF-Insured Deposits 6/09 $10,368 $4,817,789 9/09 -8,243 5,315,927 12/09 -20,862 5,407,773 3/10 -20,717 5,472,402 6/10 -15,247 5,437,417 9/10 -8,009 5,421,425 12/10 -7,352 6,307,864 3/11 -1,023 6,386,189 6/11 3,916 6,534,110 9/11 7,813 6,765,799 12/11 11,827 6,980,704 3/12 15,292 7,033,288 6/12 22,693 7,085,977 Table II-B. Problem Institutions and Failed/Assisted Institutions (dollar figures in millions) Problem Institutions Number of institutions�������������������������������������������� Total assets������������������������������������������������������������� 2012*** 732 $282,432 2011*** 865 $372,090 2011 2010 2009 2008 813 $319,432 884 $390,017 702 $402,782 252 $159,405 2007 76 $22,189 Failed Institutions 140 25 Number of institutions�������������������������������������������� 31 48 92 157 3 $169,709 $371,945 Total assets������������������������������������������������������������� $7,482 $19,232 $34,923 $92,085 $2,615 Assisted Institutions**** 8 5 Number of institutions�������������������������������������������� 0 0 0 0 0 $1,917,482 $1,306,042 $0 $0 $0 $0 Total assets������������������������������������������������������������� $0 * Quarterly financial statement results are unaudited. NM - Not meaningful ** Beginning in the third quarter of 2009, estimates of insured deposits are based on a $250,000 general coverage limit. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) temporarily provides unlimited coverage for noninterest bearing transaction accounts for two years beginning December 31, 2010. Beginning in the fourth quarter of 2010, estimates of insured deposits include the entire balance of noninterest bearing transaction accounts. *** Through June 30. **** Assisted institutions represent five institutions under a single holding company that received assistance in 2008, and eight institutions under a different single holding company that received assistance in 2009. FDIC Quarterly 17 2012, Volume 6, No. 3 Table III-B. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) June 30, 2012 Commercial Banks and Savings Institutions Number of Institutions Total Assets Domestic Deposits* Est. Insured Deposits FDIC-Insured Commercial Banks����������������������������������������������� FDIC-Supervised������������������������������������������������������������������� OCC-Supervised�������������������������������������������������������������������� Federal Reserve-Supervised������������������������������������������������� 6,222 4,101 1,285 836 $12,889,818 2,051,237 8,932,795 1,905,785 $8,038,177 1,575,560 5,242,326 1,220,292 $6,281,771 1,273,207 4,071,517 937,048 FDIC-Insured Savings Institutions���������������������������������������������� OCC-Supervised Savings Institutions����������������������������������� FDIC-Supervised Savings Institutions����������������������������������� 1,024 574 450 1,141,190 803,219 337,971 875,544 620,056 255,488 781,974 556,157 225,817 Total Commercial Banks and Savings Institutions���������������������� 7,246 14,031,008 8,913,721 7,063,746 Other FDIC-Insured Institutions U.S. Branches of Foreign Banks������������������������������������������������� 9 86,725 23,995 22,231 Total FDIC-Insured Institutions���������������������������������������������������� .. 7,255 14,117,733 8,937,716 7,085,977 * Excludes $1.4 trillion in foreign office deposits, which are uninsured. Table IV-B. Distribution of Institutions and Assessment Base by Assessment Rate Range Quarter Ending March 31, 2012 (dollar figures in billions) Number of Annual Rate in Basis Points Institutions 2.50-5.00 1,229 5.01-7.50 2,246 7.51-10.00 1,854 10.01-15.00 1,141 15.01-20.00 71 20.01-25.00 596 25.01-30.00 17 30.01-35.00 148 greater than 35.00 15 Percent of Total Institutions 16.80 30.70 25.34 15.59 0.97 8.15 0.23 2.02 0.21 Amount of Assessment Base* $897 1,899 3,677 4,931 255 233 105 64 29 Percent of Total Assessment Base 7.42 15.71 30.41 40.78 2.11 1.93 0.87 0.53 0.24 * Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, as required by the Dodd-Frank Act. FDIC Quarterly 18 2012, Volume 6, No. 3 Quarterly Banking Profile Notes to Users accounting requirements of the FFIEC Call Reports. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-ofperiod amount plus end-of-period amount plus any interim periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s) are included in average assets since the year-to-date income includes the results of all merged institutions. No adjustments are made for “purchase accounting” mergers. Growth rates represent the percentage change over a 12-month period in totals for institutions in the base period to totals for institutions in the current period. All data are collected and presented based on the location of each reporting institution’s main office. Reported data may include assets and liabilities located outside of the reporting institution’s home state. In addition, institutions may relocate across state lines or change their charters, resulting in an inter-regional or inter-industry migration, e.g., institutions can move their home offices between regions, and savings institutions can convert to commercial banks or commercial banks may convert to savings institutions. This publication contains financial data and other information for depository institutions insured by the Federal Deposit Insurance Corporation (FDIC). These notes are an integral part of this publication and provide information regarding the comparability of source data and reporting differences over time. Tables I-A through VIII-A. The information presented in Tables I-A through V-A of the FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and s avings institutions. Tables VI-A (Derivatives) and VII-A (Servicing, Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered savings banks that file quarterly Call Reports. Table VIII-A (Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured institutions. Some tables are arrayed by groups of FDIC-insured institutions based on predominant types of asset concentration, while other tables aggregate institutions by asset size and geographic region. Quarterly and full-year data are provided for selected indicators, including aggregate condition and income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off information for loans outstanding and other assets. ACCOUNTING CHANGES Goodwill Impairment Testing – In September 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-08, “Testing Goodwill for Impairment,” to address concerns about the cost and complexity of the existing goodwill impairment test in ASC Topic 350, Intangibles-Goodwill and Other (formerly FASB Statement No. 142, “Goodwill and Other Intangible Assets”). The ASU’s amendments to ASC Topic 350 are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 (i.e., for annual or interim tests performed on or after January 1, 2012, for institutions with a calendar year fiscal year). Early adoption of the ASU is permitted. Under ASU 2011-08, an institution has the option of first assessing qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test described in ASC Topic 350. If, after considering all relevant events and circumstances, an institution determines it is unlikely (that is, a likelihood of 50 percent or less) that the fair value of a reporting unit is less than its carrying amount (including goodwill), then the institution does not need to perform the two-step goodwill impairment test. If the institution instead concludes that the opposite is true (that is, it is likely that the fair value of a reporting unit is less than its carrying amount), then it is required to perform the first step and, if necessary, the second step of the two-step goodwill impairment test. Under ASU 2011-08, an institution may choose to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. 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 Tables I-B through IV-B. A separate set of tables (Tables I-B through IV-B) provides comparative quarterly data related to the Deposit Insurance Fund (DIF), problem institutions, failed/assisted institutions, estimated FDIC-insured deposits, as well as assessment rate information. Depository institutions that are not insured by the FDIC through the DIF are not included in the FDIC Quarterly Banking Profile. U.S. branches of institutions headquartered in foreign countries and non-deposit trust companies are not included unless otherwise indicated. Efforts are made to obtain financial reports for all active institutions. However, in some cases, final financial reports are not available for institutions that have closed or converted their charters. DATA SOURCES The financial information appearing in this publication is obtained primarily from the Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income (Call Reports) and the OTS Thrift Financial Reports submitted by all FDIC-insured depository institutions. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) This information is stored on and retrieved from the FDIC’s Research Information System (RIS) database. COMPUTATION METHODOLOGY Parent institutions are required to file consolidated reports, while their subsidiary financial institutions are still required to file separate reports. Data from subsidiary institution reports are included in the Quarterly Banking Profile tables, which can lead to double-counting. No adjustments are made for any double-counting of subsidiary data. Additionally, certain adjustments are made to the OTS Thrift Financial Reports to provide closer conformance with the reporting and FDIC Quarterly 19 2012, Volume 6, No. 3 December 31, 2007, and beginning before January 1, 2010. For calendar-year banks, this extended carryback period applies to either the 2008 or 2009 tax year. The amount of the net operating loss that can be carried back to the fifth carryback year is limited to 50 percent of the available taxable income for that fifth year, but this limit does not apply to other carryback years. Under generally accepted accounting principles, banks may not record the effects of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the fourth quarter of 2009. Therefore, banks should recognize the effects of this fourth quarter 2009 tax law change on their current and deferred tax assets and liabilities, including valuation allowances for deferred tax assets, in their Call Reports for December 31, 2009. Banks should not amend their Call Reports for prior quarters for the effects of the extended net operating loss carryback period. The American Recovery and Reinvestment Act of 2009, which was enacted on February 17, 2009, permits qualifying small businesses, including FDIC-insured institutions, to elect a net operating loss carryback period of three, four, or five years instead of the usual carryback period of two years for any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally accepted accounting principles, institutions may not record the effect of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the first quarter of 2009. Troubled Debt Restructurings and Current Market Interest Rates – Many institutions are restructuring or modifying the terms of loans to provide payment relief for those borrowers who have suffered deterioration in their financial condition. Such loan restructurings may include, but are not limited to, reductions in principal or accrued interest, reductions in interest rates, and extensions of the maturity date. Modifications may be executed at the original contractual interest rate on the loan, a current market interest rate, or a below-market interest rate. Many of these loan modifications meet the definition of a troubled debt restructuring (TDR). The TDR accounting and reporting standards are set forth in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors (formerly FASB Statement No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings,” as amended). This guidance specifies that a restructuring of a debt constitutes a TDR if, at the date of restructuring, the creditor for economic or legal reasons related to a debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider. In the Call Report, until a loan that is a TDR is paid in full or otherwise settled, sold, or charged off, it must be reported in the appropriate loan category, as well as identified as a performing TDR loan, if it is in compliance with its modified terms. If a TDR is not in compliance with its modified terms, it is reported as a past-due and nonaccrual loan in the appropriate loan category, as well as distinguished from other past due and nonaccrual loans. To be considered in compliance with its modified terms, a loan that is a TDR must not be in nonaccrual status and must be current or less than 30 days past due on its contractual principal and interest payments under FDIC Quarterly the modified repayment terms. A loan restructured in a TDR is an impaired loan. Thus, all TDRs must be measured for impairment in accordance with ASC Subtopic 310-10, Receivables – Overall (formerly FASB Statement No. 114, “Accounting by Creditors for Impairment of a Loan,” as amended), and the Call Report Glossary entry for “Loan Impairment.” Consistent with ASC Subtopic 310-10, TDRs may be aggregated and measured for impairment with other impaired loans that share common risk characteristics by using historical statistics, such as average recovery period and average amount recovered, along with a composite effective interest rate. However, the outcome of such an aggregation approach must be consistent with the impairment measurement methods prescribed in ASC Subtopic 310-10 and Call Report instructions for loans that are “individually” considered impaired instead of the measurement method prescribed in ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly FASB Statement No. 5, “Accounting for Contin gencies”) for loans not individually considered impaired that are collectively evaluated for impairment. When a loan not previously considered individually impaired is restructured and determined to be a TDR, absent a partial charge-off, it generally is not appropriate for the impairment estimate on the loan to decline as a result of the change from the impairment measurement method prescribed in ASC Subtopic 450-20 to the methods prescribed in ASC Subtopic 310-10. Troubled Debt Restructurings and Accounting Standards Update No. 2011-02 – In April 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-02, “A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring,” to provide additional guidance to help creditors determine whether a concession has been granted to a borrower and whether a borrower is experiencing financial difficulties. The guidance is also intended to reduce diversity in practice in identifying and reporting TDRs. This ASU is effective for public companies for interim and annual periods beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption for purposes of identifying TDRs. The measurement of impairment for any newly identified TDRs resulting from retrospective application will be applied prospectively in the first interim or annual period beginning on or after June 15, 2011. (For most public institutions, the ASU takes effect July 1, 2011, but retrospective application begins as of January 1, 2011.) Nonpublic companies should apply the new guidance for annual periods ending after December 15, 2012, including interim periods within those annual periods. (For most nonpublic institutions, the ASU will take effect January 1, 2012.) Early adoption of the ASU is permitted for both public and nonpublic entities. Nonpublic entities that adopt early are subject to a retrospective identification requirement. For additional information, institutions should refer to ASU 2011-02, which is available at http://www.fasb.org/jsp/FASB/ Page/SectionPage&cid=1176156316498. Accounting for Loan Participations – Amended ASC Topic 860 (formerly FAS 166) modified the criteria that must be met in order for a transfer of a portion of a financial asset, such as a loan participation, to qualify for sale accounting. These changes apply to transfers of loan participations on or after the effective date of amended ASC Topic 860 (January 1, 2010, for banks with calendar year fiscal year), including advances under lines of credit that are transferred on or after 20 2012, Volume 6, No. 3 Quarterly Banking Profile the effective date of amended ASC Topic 860 even if the line of credit agreements were entered into before this effective date. Therefore, banks with a calendar-year fiscal year must account for transfers of loan participations on or after January 1, 2010, in accordance with amended ASC Topic 860. In general, loan participations transferred before the effective date of amended ASC Topic 860 are not affected by this new accounting standard. Under amended ASC Topic 860, if a transfer of a portion of an entire financial asset meets the definition of a “participating interest,” then the transferor (normally the lead lender) must evaluate whether the transfer meets all of the conditions in this accounting standard to qualify for sale accounting. Other-Than-Temporary Impairment – When the fair value of an investment in an individual available-for-sale or held-tomaturity security is less than its cost basis, the impairment is either temporary or other-than-temporary. The amount of the total other-than-temporary impairment related to credit loss must be recognized in earnings, but the amount of total impairment related to other factors must be recognized in other comprehensive income, net of applicable taxes. To determine whether the impairment is other-than-temporary, an institution must apply the applicable accounting guidance – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html. ASC Topic 805 (formerly Business Combinations and Noncontrolling (Minority) Interests) – In December 2007, the FASB issued Statement No. 141 (Revised), Business Combinations FAS 141(R)), and Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements (FAS 160). Under FAS 141(R), all business combinations, including combinations of mutual entities, are to be accounted for by applying the acquisition method. FAS 160 defines a noncontrolling interest, also called a minority interest, as the portion of equity in an institution’s subsidiary not attributable, directly or indirectly, to the parent institution. FAS 160 requires an institution to clearly present in its consolidated financial statements the equity ownership in and results of its subsidiaries that are attributable to the noncontrolling ownership interests in these subsidiaries. FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Similarly, FAS 160 is effective for fiscal years beginning on or after December 15, 2008. Thus, for institutions with calendar-year fiscal years, these two accounting standards take effect in 2009. Beginning in March 2009, Institution equity capital and Noncontrolling interests are separately reported in arriving at Total equity capital and Net income. ASC Topic 820 (formerly FASB Statement No. 157 Fair Value Measurements issued in September 2006) and ASC Topic 825 (formerly FASB Statement No. 159 The Fair Value Option for Financial Assets and Financial Liabilities) issued in February 2007 – both are effective in 2008 with early adoption permitted in 2007. FAS 157 defines fair value and establishes a framework 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 FDIC Quarterly a transaction is not orderly. The FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Fair value continues to be used for derivatives, trading securities, and available-for-sale securities. Changes in fair value go through earnings for trading securities and most derivatives. Changes in the fair value of available-for-sale securities are reported in other comprehensive income. Available-for-sale securities and held-to-maturity debt securities are written down to fair value if impairment is other than temporary and loans held for sale are reported at the lower of cost or fair value. FAS 159 allows institutions to report certain financial assets and liabilities at fair value with subsequent changes in fair value included in earnings. In general, an institution may elect the fair value option for an eligible financial asset or liability when it first recognizes the instrument on its balance sheet or enters into an eligible firm commitment. ASC Topic 715 (formerly FASB Statement No. 158 Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans) – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html. ASC Topic 860 (formerly FASB Statement No. 156 Accounting for Servicing of Financial Assets) – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/ qbp/2011mar/qbpnot.html. ASC Topic 815 (formerly FASB Statement No. 155 Accounting for Certain Hybrid Financial Instruments) – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/ qbp/2011mar/qbpnot.html. GNMA Buy-back Option – If an issuer of GNMA securities has the option to buy back the loans that collateralize the GNMA securities, when certain delinquency criteria are met, ASC Topic 860 (formerly FASB Statement No. 140) requires that loans with this buy-back option must be brought back on the issuer’s books as assets. The rebooking of GNMA loans is required regardless of whether the issuer intends to exercise the buy-back option. The banking agencies clarified in May 2005 that all GNMA loans that are rebooked because of delinquency should be reported as past due according to their contractual terms. ASC Topics 860 & 810 (formerly FASB Statements 166 & 167) – In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets (FAS 166), and Statement No. 167, Amendments to FASB Interpretation No. 46(R) (FAS 167), which change the way entities account for securitizations and special purpose entities. FAS 166 revised FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, by eliminating the concept of a “qualifying specialpurpose entity,” creating the concept of a “participating interest,” changing the requirements for derecognizing financial assets, and requiring additional disclosures. FAS 167 revised FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, by changing how a bank or other company determines when an entity that is insufficiently capitalized or is not controlled through voting or similar rights, i.e., a “variable interest entity” (VIE), should be consolidated. Under FAS 167, a bank must perform a qualitative assessment to determine whether its variable interest or interests give it a 21 2012, Volume 6, No. 3 controlling financial interest in a VIE. If a bank’s variable interest or interests provide it with the power to direct the most significant activities of the VIE, and the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the bank is the primary beneficiary of, and therefore must consolidate, the VIE. Both FAS 166 and FAS 167 take effect as of the beginning of each bank’s first annual reporting period that begins after November 15, 2009, for interim periods therein, and for interim and annual reporting periods thereafter (i.e., as of January 1, 2010, for banks with a calendar year fiscal year). Earlier application is prohibited. Banks are expected to adopt FAS 166 and FAS 167 for Call Report purposes in accordance with the effective date of these two standards. Also, FAS 166 has modified the criteria that must be met in order for a transfer of a portion of a financial asset, such as a loan participation, to qualify for sale accounting. These changes apply to transfers of loan participations on or after the effective date of FAS 166. Therefore, banks with a calendar year fiscal year must account for transfers of loan participations on or after January 1, 2010, in accordance with FAS 166. In general, loan participations transferred before the effective date of FAS 166 (January 1, 2010, for calendar year banks) are not affected by this new accounting standard and pre-FAS 166 participations that were properly accounted for as sales under FASB Statement No. 140 will continue to be reported as having been sold. ASC Topic 740 (formerly FASB Interpretation No. 48 on Uncertain Tax Positions) – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html. ASC Topic 718 (formerly FASB Statement No. 123 (Revised 2004) and Share-Based Payments – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/ qbp/2008dec/qbpnot.html. ASC Topic 815 (formerly FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities) – refer to previously published Quarterly Banking Profile notes: http://www2. fdic.gov/qbp/2008dec/qbpnot.html. Accounting Standards Codification – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/ qbp/2011sep/qbpnot.html. Assets securitized and sold – total outstanding principal balance of assets securitized and sold with servicing retained or other seller- provided credit enhancements. Capital Purchase Program (CPP) – as announced in October 2008 under the TARP, the Treasury Department purchase of noncumulative perpetual preferred stock and related warrants that is treated as Tier 1 capital for regulatory capital purposes is included in “Total equity capital.” Such warrants to purchase common stock or noncumulative preferred stock issued by publicly-traded banks are reflected as well in “Surplus.” Warrants to purchase common stock or noncumulative preferred stock of not-publicly-traded bank stock classified in a bank’s balance sheet as “Other liabilities.” Construction and development loans – includes loans for all property types under construction, as well as loans for land acquisition and development. Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated subsidiaries, less goodwill and other ineligible intangible assets. The amount of eligible intangibles (including servicing rights) included in core capital is limited in accordance with supervisory capital regulations. Cost of funding earning assets – total interest expense paid on deposits and other borrowed money as a percentage of average earning assets. Credit enhancements – techniques whereby a company attempts to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be associated with a given issuance. Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings Association (SAIF) Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform Act to form the DIF. Derivatives notional amount – the notional, or contractual, amounts of derivatives represent the level of involvement in the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent the amounts used to calculate contractual cash flows to be exchanged. Derivatives credit equivalent amount – the fair value of the derivative plus an additional amount for potential future credit exposure based on the notional amount, the remaining maturity and type of the contract. DEFINITIONS (in alphabetical order) All other assets – total cash, balances due from depository institutions, premises, fixed assets, direct investments in real estate, investment in unconsolidated subsidiaries, customers’ liability on acceptances outstanding, assets held in trading accounts, federal funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid deposit insurance assessments, and other assets. All other liabilities – bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities. Assessment base – effective April 1, 2011, the deposit insurance assessment base has changed to “average consolidated total assets minus average tangible equity” with an additional adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank. Previously the assessment base was “assessable deposits” and consisted of DIF deposits (deposits insured by the FDIC Deposit Insurance Fund) in banks’ domestic offices with certain adjustments. FDIC Quarterly Derivatives transaction types: Futures and forward contracts – contracts in which the buyer agrees to purchase and the seller agrees to sell, at a specified future date, a specific quantity of an underlying variable or index at a specified price or yield. These contracts exist for a variety of variables or indices, (traditional agricultural or physical commodities, as well as currencies and interest rates). Futures contracts are standardized and are traded on organized exchanges which set limits on counterparty credit exposure. Forward contracts do not have standardized terms and are traded over the counter. Option contracts – contracts in which the buyer acquires the right to buy from or sell to another party some specified amount of an underlying variable or index at a stated price (strike price) during a period or on a specified future date, 22 2012, Volume 6, No. 3 Quarterly Banking Profile 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). The Dodd-Frank Wall Street Reform and Consumer Protection Act enacted on July 21, 2010, made permanent the standard maximum deposit insurance amount (SMDIA) of $250,000. Also, the Dodd-Frank Act amends the Federal Deposit Insurance Act to include noninterestbearing transaction accounts as a new temporary deposit insurance account category. All funds held in noninterestbearing transaction accounts are fully insured, without limit, from December 31, 2010, through December 31, 2012. Failed/assisted institutions – an institution fails when regulators take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or another healthy institution. This action may require the FDIC to provide funds to cover losses. An institution is defined as “assisted” when the institution remains open and receives assistance in order to continue operating. Fair Value – the valuation of various assets and liabilities on the balance sheet—including trading assets and liabilities, available-for-sale securities, loans held for sale, assets and liabilities accounted for under the fair value option, and foreclosed assets—involves the use of fair values. During periods of market stress, the fair values of some financial instruments and nonfinancial assets may decline. FHLB advances – all borrowings by FDIC insured institutions from the Federal Home Loan Bank System (FHLB), as reported by Call Report filers and by TFR filers. FDIC Quarterly Goodwill and other intangibles – intangible assets include servicing rights, purchased credit card relationships, and other identifiable intangible assets. Goodwill is the excess of the purchase price over the fair market value of the net assets acquired, less subsequent impairment adjustments. Other intangible assets are recorded at fair value, less subsequent quarterly amortization and impairment adjustments. Loans secured by real estate – includes home equity loans, junior liens secured by 1-4 family residential properties, and all other loans secured by real estate. Loans to individuals – includes outstanding credit card balances and other secured and unsecured consumer loans. Long-term assets (5+ years) – loans and debt securities with remaining maturities or repricing intervals of over five years. Maximum credit exposure – the maximum contractual credit exposure remaining under recourse arrangements and other seller-provided credit enhancements provided by the reporting bank to securitizations. Mortgage-backed securities – certificates of participation in pools of residential mortgages and collateralized mortgage obligations issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below. Net charge-offs – total loans and leases charged off (removed from balance sheet because of uncollectibility), less amounts recovered on loans and leases previously charged off. Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to depositors and other creditors, expressed as a percentage of average earning assets. No adjustments are made for interest income that is tax exempt. Net loans to total assets – loans and lease financing receivables, net of unearned income, allowance and reserves, as a percent of total assets on a consolidated basis. Net operating income – income excluding discretionary transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from operating income have been adjusted to exclude the portion applicable to securities gains (or losses). Noncurrent assets – the sum of loans, leases, debt securities, and other assets that are 90 days or more past due, or in nonaccrual status. Noncurrent loans & leases – the sum of loans and leases 90 days or more past due, and loans and leases in nonaccrual status. Number of institutions reporting – the number of institutions that actually filed a financial report. New reporters – insured institutions filing quarterly financial reports for the first time. Other borrowed funds – federal funds purchased, securities sold with agreements to repurchase, demand notes issued to the U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and trading liabilities, less revaluation losses on assets held in trading accounts. Other real estate owned – primarily foreclosed property. Direct and indirect investments in real estate ventures are excluded. The amount is reflected net of valuation allowances. For institutions that file a Thrift Financial Report (TFR), the valuation allowance subtracted also includes allowances for 23 2012, Volume 6, No. 3 other repossessed assets. Also, for TFR filers the components of other real estate owned are reported gross of valuation allowances. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their losses) compared to the same period a year earlier. “Problem” institutions – federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. “Problem” institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either a “4” or “5.” The number and assets of “problem” institutions are based on FDIC composite ratings. Prior to March 31, 2008, for institutions whose primary federal regulator was the OTS, the OTS composite rating was used. Recourse – an arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank’s claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Reserves for losses – the allowance for loan and lease losses on a consolidated basis. Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. Excludes restructured loans and leases that are not in compliance with the modified terms. Retained earnings – net income less cash dividends on common and preferred stock for the reporting period. Return on assets – bank net income (including gains or losses on securities and extraordinary items) as a percentage of 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 average total equity capital. Risk-based capital groups – definition: (Percent) Tier 1 Risk-Based Capital* Total Risk-Based Capital* Tier 1 Leverage Tangible Equity Well-capitalized ≥10 and ≥6 and ≥5 – Adequately capitalized ≥8 and ≥4 and ≥4 – Undercapitalized ≥6 and ≥3 and ≥3 – Significantly undercapitalized <6 or <3 or <3 Critically undercapitalized – – – and supervisory groups as well as the initial base assessment rates (in basis points) for each risk category. Supervisory Group A generally includes institutions with CAMELS composite ratings of 1 or 2; Supervisory Group B generally includes institutions with a CAMELS composite rating of 3; and Supervisory Group C generally includes institutions with CAMELS composite ratings of 4 or 5. For purposes of risk-based assessment capital groups, undercapitalized includes institutions that are significantly or critically undercapitalized. Supervisory Group A 1. Well Capitalized I 5–9 bps 2. Adequately Capitalized 3. Undercapitalized II 14 bps B C II 14 bps III 23 bps III 23 bps IV 35 bps Effective April 1, 2011, the initial base assessment rates are 5 to 35 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 small institutions in Risk Category I are based on a combination of financial ratios and CAMELS component ratings (the financial ratios method). As required by Dodd-Frank, the calculation of risk-based assessment rates for large institutions no longer relies on longterm debt issuer ratings. Rates for large institutions are based on CAMELS ratings and certain forward-looking financial measures combined into two scorecards—one for most large institutions and another for the remaining very large institutions that are structurally and operationally complex or that pose unique challenges and risks in case of failure (highly complex institutions). In general, a highly complex institution is an institution (other than a credit card bank) with more than $500 billion in total assets that is controlled by a parent or intermediate parent company with more than $500 billion in total assets or a processing bank or trust company with total fiduciary assets of $500 billion or more. The FDIC retains its ability to take additional information into account to make a limited adjustment to an institution’s total score (the large bank adjustment), which will be used to determine an institution’s initial base assessment rate. Effective April 1, 2011, the three possible adjustments to an institution’s initial base assessment rate are as follows: (1) Unsecured Debt Adjustment: An institution’s rate may decrease by up to 5 basis points for unsecured debt. The unsecured debt adjustment cannot exceed the lesser of 5 basis points or 50 percent of an institution’s initial base assessment rate (IBAR). Thus, for example, an institution with an IBAR of 5 basis points would have a maximum unsecured debt adjustment of 2.5 basis points and could not have a total base assessment rate lower than 2.5 basis points. (2) Depository Institution Debt Adjustment: For institutions that hold longterm unsecured debt issued by another insured depository institution, a 50 basis point charge is applied to the amount of such debt held in excess of 3 percent of an institution’s Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for small institutions that are not in Risk Category I and for large >2 ≤2 * As a percentage of risk-weighted assets. Risk Categories and Assessment Rate Schedule – The current risk categories became effective January 1, 2007. Capital ratios and supervisory ratings distinguish one risk category from another. Effective April 1, 2011, risk categories for large institutions (generally those with at least $10 billion in assets) are eliminated. The following table shows the relationship of risk categories (I, II, III, IV) for small institutions to capital and FDIC Quarterly Capital Category 24 2012, Volume 6, No. 3 Quarterly Banking Profile institutions that are not well capitalized or do not have a composite CAMELS rating of 1 or 2 may increase (not to exceed 10 basis points) if their brokered deposits exceed 10 percent of domestic deposits. After applying all possible adjustments (excluding the Depository Institution Debt Adjustment), minimum and maximum total base assessment rates for each risk category are as follows: Securities – excludes securities held in trading accounts. Banks’ securities portfolios consist of securities designated as “held-to-maturity,” which are reported at amortized cost (book value), and securities designated as “available-for-sale,” reported at fair (market) value. Securities gains (losses) – realized gains (losses) on held-tomaturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers also include gains (losses) on the sales of assets held for sale. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) Seller’s interest in institution’s own securitizations – the reporting bank’s ownership interest in loans and other assets that have been securitized, except an interest that is a form of recourse or other seller-provided credit enhancement. Seller’s interests differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is generally equal to the total principal amount of the pool of assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the form of securities issued to investors. Small Business Lending Fund – The Small Business Lending Fund (SBLF) was enacted into law in September 2010 as part of the Small Business Jobs Act of 2010 to encourage lending to small businesses by providing capital to qualified com munity institutions with assets of less than $10 billion. The SBLF Program, which is administered by the U.S. Treasury Department, provided funding to 332 institutions for more than $4 billion by September 27, 2011, the statutory end of the program (http://www.treasury.gov/resource-center/ sb-programs/Pages/Small-Business-Lending-Fund.aspx). Under the SBLF Program, the Treasury Department purchased noncumulative perpetual preferred stock from qualifying depository institutions and holding companies (other than Subchapter S and mutual institutions). When this stock has been issued by a depository institution, it is reported as “Perpetual preferred stock and related surplus.” For regulatory capital purposes, this noncumulative perpetual preferred stock qualifies as a component of Tier 1 capital. Qualifying Subchapter S corporations and mutual institutions issue unsecured subordinated debentures to the Treasury Department through the SBLF. Depository institutions that issued these debentures report them as “Subordinated notes and debentures.” For regulatory capital purposes, the debentures are eligible for inclusion in an institution’s Tier 2 capital in accordance with their primary federal regulator’s capital standards. To participate in the SBLF Program, an institution with outstanding securities issued to the Treasury Department under the Capital Purchase Program (CPP) was required to refinance or repay in full the CPP securities at the time of the SBLF funding. Any outstanding warrants that an institution issued to the Treasury Department under the CPP remain outstanding after the refinancing of the CPP stock through the SBLF Program unless the institution chooses to repurchase them. Subchapter S corporation – a Subchapter S corporation is treated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any federal income taxes at the corporate level. This can have the effect of reducing institutions’ reported taxes and increasing their after-tax earnings. Total Base Assessment Rates* Large and Risk Risk Risk Risk Highly Category Category Category Category Complex I II III IV Institutions Initial base assessment rate 5–9 14 23 35 5–35 Unsecured debt adjustment -4.5–0 -5–0 -5–0 -5–0 -5–0 Brokered deposit adjustment — 0–10 0–10 0–10 0–10 Total Base Assessment rate 2.5–9 9–24 18–33 30–45 2.5–45 * All amounts for all categories are in basis points annually. Total base rates that are not the minimum or maximum rate will vary between these rates. Total base assessment rates do not include the depository institution debt adjustment. Beginning in 2007, each institution is assigned a risk-based rate for a quarterly assessment period near the end of the quarter following the assessment period. Payment is generally due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are effective for assessment purposes as of the examination transmittal date. 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 was collected September 30, 2009, at the same time that the risk-based assessment for the second quarter of 2009 was collected. The special assessment for any institution was capped at 10 basis points of the institution’s assessment base for the second quarter of 2009 risk-based assessment. Prepaid Deposit Insurance Assessments – In November 2009, the FDIC Board of Directors adopted a final rule requiring insured depository institutions (except those that are exempted) to prepay their quarterly risk-based deposit insurance assessments for the fourth quarter of 2009, and for all of 2010, 2011, and 2012, on December 30, 2009. Each institution’s regular risk-based deposit insurance assessment for the third quarter of 2009, which is paid in arrears, also was payable on December 30, 2009. For regulatory capital purposes, an institution may assign a zeropercent risk weight to the amount of its prepaid deposit assessment asset. 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. FDIC Quarterly 25 2012, Volume 6, No. 3 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. FDIC Quarterly Unused loan commitments – includes credit card lines, home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused commitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for sale, which are accounted for as derivatives on the balance sheet.) Yield on earning assets – total interest, dividend, and fee income earned on loans and investments as a percentage of average earning assets. 26 2012, Volume 6, No. 3 Federal Deposit Insurance Corporation Washington, DC 20429-9990 OFFICIAL BUSINESS PENALTY FOR PRIVATE USE, $300 PRESORTED STANDARD MAIL Postage & Fees Paid FDIC Permit No. G-36