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Quarterly Quarterly Banking Profile: Second Quarter 2018 Highlights: ■ Quarterly Net Income Rises 25.1 Percent Over Second Quarter 2017 Income, Led by Higher Net Operating Revenue and a Lower Effective Tax Rate ■ Margins Increase as Average Yields Outpace Growth in Funding Costs ■ Community Bank Net Income Growth Reaches 21.1 Percent Annually on Higher Net Operating Revenue and a Lower Effective Tax Rate ■ Community Bank Loan and Lease Growth Remains Strong at 7 Percent Year Over Year ■ DIF Reserve Ratio Rises 3 Basis Points to 1.33 Percent 2018 Volume 12, Number 3 Federal Deposit Insurance Corporation FDIC QUARTERLY A The FDIC Quarterly is published by the Division of Insurance and Research of the Federal Deposit Insurance Corporation and contains a comprehensive summary of the most current financial results for the banking industry. Feature articles appearing in the FDIC Quarterly range from timely analysis of economic and banking trends at the national and regional level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and the development of regulatory policy. Single copy subscriptions of the FDIC Quarterly can be obtained through the FDIC Public Information Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. E-mail requests should be sent to publicinfo@fdic.gov. Change of address information also should be submitted to the Public Information Center. The FDIC Quarterly is available online by visiting the FDIC website at www.fdic.gov. To receive e-mail notification of the electronic release of the FDIC Quarterly and the individual feature articles, subscribe at www.fdic.gov/about/subscriptions/index.html. Chairman Jelena McWilliams Director, Division of Insurance and Research Diane Ellis Executive Editor Richard A. Brown Managing Editors Alan Deaton Matthew Green Patrick Mitchell Shayna M. Olesiuk Jonathan Pogach Philip A. Shively Kathy Zeidler Editors Clayton Boyce Kathy Zeidler Publication Manager Lynne Montgomery Media Inquiries (202) 898-6993 FDIC QUARTERLY 2018 FDIC QUARTERLY Vo l u m e 1 2 • N u m b e r 3 Quarterly Banking Profile: Second Quarter 2018 FDIC-insured institutions reported aggregate net income of $60.2 billion in the second quarter of 2018, up $12.1 billion (25.1 percent) from a year ago. The improvement in earnings was attributable to higher net operating revenue and a lower effective tax rate. Of the 5,542 insured institutions reporting second quarter financial results, more than 70 percent reported year-over-year growth in quarterly earnings. The percent of unprofitable banks in the second quarter declined to 3.8 percent from 4.3 percent a year ago. See page 1. Community Bank Performance Community banks—which represent 92 percent of insured institutions—reported net income of $6.5 billion in the second quarter, up $1.1 billion (21.1 percent) from a year earlier. Higher net operating revenue and lower income tax expenses offset an increase in noninterest expense. See page 15. Insurance Fund Indicators The Deposit Insurance Fund (DIF) balance increased by $2.5 billion during the quarter to $97.6 billion on June 30, driven by assessment income. The DIF’s reserve ratio (the fund balance as a percent of estimated insured deposits) was 1.33 percent on June 30, 2018, up from 1.30 percent on March 31, 2018, and 1.24 percent on June 30, 2017. See page 23. The views expressed are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited. Please provide the FDIC’s Division of Insurance and Research with a copy of any publications containing reprinted material. FDIC QUARTERLY i QUARTERLY BANKING PROFILE Second Quarter 2018 INSURED INSTITUTION PERFORMANCE Quarterly Net Income Rises 25.1 Percent Over Second Quarter 2017 Income, Led by Higher Net Operating Revenue and a Lower Effective Tax Rate Margins Increase as Average Yields Outpace Growth in Funding Costs Loan Balances Expand 4.2 Percent From Second Quarter 2017 Noncurrent Loan Rate Declines, While Net Charge-Off Rate Remains Stable Two New Charters Added in Second Quarter 2018 Net Income Rises 25.1 Percent Over Second Quarter 2017, Led by Higher Net Operating Revenue and a Lower Effective Tax Rate The 5,542 FDIC-insured commercial banks and savings institutions reported net income of $60.2 billion during the three months ended June 30, an increase of $12.1 billion (25.1 percent) from a year earlier. Higher net operating revenue (the sum of net interest income and noninterest income) and a lower effective tax rate contributed to the increase in industry net income. Assuming the effective tax rate before the new tax law, net income would have totaled an estimated $53.8 billion, an increase of $5.6 billion (11.7 percent) from second quarter 2017.1 The average return on assets was 1.37 percent, up from 1.13 percent a year earlier. Only 3.8 percent of institutions were unprofitable during the quarter, down from 4.3 percent in second quarter 2017. Margins Increase as Average Yields Outpace Growth in Funding Costs Net interest income totaled $134.1 billion, an increase of $10.7 billion (8.7 percent) from 12 months earlier and the largest annual dollar increase ever reported by the industry. More than four out of five banks (85.1 percent) reported year-over-year increases. Net interest margin (NIM) rose to 3.38 percent, up 16 basis points from a year earlier, as average asset yields grew more rapidly than average funding costs. Institutions with assets of $10 billion to $250 billion reported the largest annual increase in average funding costs (up 30 basis points). The improvement in NIM was widespread, as more than two out of three banks (70.2 percent) reported increases from a year earlier. 1 This estimate of net income applies the average quarterly tax rate between fourth quarter 2011 and third quarter 2017 to income before taxes and discontinued operations. Chart 1 Chart 2 Quarterly Net Income Quarterly Net Operating Revenue All FDIC-Insured Institutions All FDIC-Insured Institutions Securities and Other Gains/Losses, Net Net Operating Income $ Billions 70 220 60 56.0 50 40 30 35.2 28.5 34.8 34.5 37.5 40.3 34.4 38.2 36.1 39.8 37.3 40.1 38.5 36.5 39.8 43.0 40.4 40.6 39.0 43.6 45.6 43.2 43.9 60.2 200 180 160 48.1 47.9 140 120 100 25.3 25.3 80 20 60 40 10 0 Quarterly Noninterest Income Quarterly Net Interest Income $ Billions 20 2011 Source: FDIC. 2012 2013 2014 2015 2016 2017 2018 0 2008 2009 Source: FDIC. 2010 2011 2012 2013 2014 2015 2016 2017 2018 FDIC QUARTERLY 1 2018 • Volume 12 • Numb er 3 Provisions Decline Modestly From Second Quarter 2017 Banks set aside $11.7 billion in loan-loss provisions during the second quarter, a decline of $293.5 million (2.4 percent) from the previous year. Almost one-third of all banks (31.3 percent) reported lower loan-loss provisions than in second quarter 2017. Loan-loss provisions as a percentage of net operating revenue declined to 5.8 percent for the current quarter, the lowest level since third quarter 2015. Noninterest Income Expands 2 Percent From a Year Earlier Noninterest income totaled $68.1 billion, an increase of $1.3 billion (2 percent) from the previous year. The 12-month increase in noninterest income was attributable to servicing fees (up $638.2 million, or 29.5 percent), fiduciary activity (up $558.4 million, or 6.3 percent), and net gains on sales of other assets (up $388.3 million). Slightly more than half of all institutions (55.6 percent) reported increases in noninterest income from a year earlier. Noninterest Expense Grows 4.6 Percent Year Over Year Noninterest expenses rose by $5 billion (4.6 percent) from a year earlier, as salary and employee benefits grew by $2.7 billion (5.2 percent) and other noninterest expense increased by $1.8 billion (4.2 percent).2 Average assets per employee totaled $8.4 million for the current quarter, up from $8.2 million in second quarter 2017. The efficiency ratio (noninterest expense as a percent of net operating revenue) improved to 55.5 percent in the second quarter, the lowest level since first quarter 2010. Net Charge-Off Rate Remains Stable For the past eleven quarters in a row, net charge-offs increased compared with a year earlier but at a slower rate. During the second quarter, banks charged-off $11.7 billion in uncollectable loans, an increase of $446.4 billion (4 percent) over the past 12 months. The annual increase in net charge-offs was led by credit card balances (up $918.9 million, or 12.8 percent). The average net charge-off rate remained stable from a year earlier at 0.48 percent. 2 Other noninterest expense includes, but is not limited to, information technology costs, legal fees, consulting services, and audit fees. Chart 3 Chart 4 Noncurrent Loan Rate and Quarterly Net Charge-Off Rate All FDIC-Insured Institutions Reserve Coverage Ratio All FDIC-Insured Institutions Percent 6 Noncurrent Loan Rate $ Billions Loan-Loss Reserves ($) Coverage Ratio (%) Noncurrent Loans ($) Coverage Adjusted for GNMA Guaranteed Loans (%) Noncurrents Adjusted for GNMA Guaranteed Loans ($) Coverage Ratio (Percent) 180 5 450 400 160 4 350 140 300 120 250 100 200 80 150 60 100 40 50 20 3 2 1 Quarterly Net Charge-Off Rate 0 2007 2008 2009 2010 Source: FDIC. 2011 2012 2013 2014 2015 2016 2017 2018 2 FDIC QUARTERLY 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: FDIC. Note: Loan-loss reserves to noncurrent loans and leases. QUARTERLY BANKING PROFILE Noncurrent Loan Rate Declines to 1.06 Percent Noncurrent loan balances (90 days or more past due or in nonaccrual status) declined by $7.7 billion (6.8 percent) from the first quarter, as more than half (52 percent) of all institutions reported quarterly declines. The improvement was led by residential mortgages (down $5.2 billion, or 9.7 percent), commercial and industrial loans (down $1.2 billion, or 6.8 percent), and credit cards (down $848.6 million, or 7.4 percent). The average noncurrent rate fell from 1.15 percent in the first quarter to 1.06 percent. Reserve Coverage of Noncurrent Loans Continues to Grow Loan-loss reserves declined by $330 million (0.3 percent) from the first quarter, as less than one-third (25.3 percent) of all institutions reported a quarterly decline. At banks that itemize their loan-loss reserves, which represent almost 91 percent of total industry loan-loss reserves, losses on credit cards increased by $284.2 million (0.7 percent). Itemized reserves for residential real estate losses fell by $522.3 million (3.7 percent). As noncurrent loan balances declined at a faster quarterly rate than loan-loss reserves, the coverage ratio (loanloss reserves to noncurrent loan balances) grew from 110 percent in the first quarter to 117.7 percent. Equity Capital Increases From the First Quarter Equity capital of $2 trillion rose by $15.3 billion (0.8 percent) from the first quarter. Retained earnings contributed $22.4 billion to equity growth but were partly offset by a $7.8 billion reduction in accumulated other comprehensive income. With a decline in market value of available-for-sale securities, unrealized losses totaled $40.2 billion for the current quarter, an increase of $6 billion (17.4 percent) from the previous quarter. Declared dividends totaled $37.8 billion, an increase of $9.5 billion (33.4 percent) from the year before. At the end of the quarter, 99.6 percent of all insured institutions, which account for 99.97 percent of total industry assets, met or exceeded the requirements for the highest regulatory capital category, as defined for Prompt Corrective Action purposes. Balances at Federal Reserve Banks Decline Almost 12 Percent Total assets rose modestly (up $1.3 billion) from the previous quarter, as cash and balances due from depository institutions declined by $126.4 billion (6.5 percent), the largest quarterly dollar decline since second quarter 2015. Balances at Federal Reserve banks declined by $139.7 billion (11.7 percent), and mortgage-backed securities rose by $43.5 billion (2.1 percent). Chart 5 Chart 6 Unrealized Gains (Losses) on Investment Securities Quarterly Change in Loan Balances All FDIC-Insured Institutions All FDIC-Insured Institutions Held-to-Maturity Securities Available-for-Sale Securities $ Billions 80 Quarterly Change in Loans ($ Billions) 300 12 10 200 8 185 197 182 178 161 164 149 134 6 117 104 102 95 99 112 99 100 4 74 70 91 72 65 67 61 51 53 38 31 28 2 24 0 0 -7 -6 -8 -14 -37 -2 -63 -100 -4 -107 -116 -109 -126 -140 -133 -6 -200 -8 -210 -300 -10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 237 189 203 60 40 20 0 -20 -40 -60 -80 -66.4 2013 Source: FDIC. 2014 2015 2016 2017 12-Month Growth Rate (Percent) 2018 221 Source: FDIC. Note: FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitized loan balances back onto banks’ balance sheets in the first quarter of 2010. Although the total amount consolidated cannot be precisely quantified, the industry would have reported a decline in loan balances for the quarter absent this change in accounting standards. FDIC QUARTERLY 3 2018 • Volume 12 • Numb er 3 Loan Balances Expand 4.2 Percent From Second Quarter 2017 Total loan and lease balances increased by $104.3 billion (1.1 percent) from the first quarter, as more than three out of four banks (76.2 percent) reported quarterly increases. All major loan categories registered quarterly increases, led by commercial and industrial loans (up $25.5 billion, or 1.2 percent); consumer loans, which include credit card balances (up $23.7 billion, or 1.4 percent); nonfarm nonresidential loans (up $18.9 billion, or 1.3 percent); and residential mortgage loans (up $17.9 billion, or 0.9 percent).3 Over the past year, total loan and lease balances grew by $398.5 billion (4.2 percent), a slight decline from last quarter’s annual growth rate of 4.9 percent. Commercial and industrial loans rose by $95.2 billion (4.8 percent); consumer loans, which include credit card balances, increased by $84.4 billion (5.4 percent); residential mortgage loans grew by $70.6 billion (3.5 percent); and nonfarm nonresidential loans expanded by $56.4 billion (4.1 percent). Deposits Decline From the Previous Quarter Total deposits fell by $60.2 billion (0.4 percent) from the previous quarter, as deposits in both foreign offices (down $38.8 billion, or 3 percent) and domestic offices (down $21.5 billion, or 0.2 percent) declined. Domestic interest-bearing deposits rose by $13.5 billion (0.1 percent), while noninterest-bearing deposits declined by $34.9 billion (1.1 percent). Banks increased their nondeposit liabilities by $46.3 billion (2.3 percent) from the first quarter, led by Federal Home Loan Bank advances (up $30 billion, or 5.4 percent) and other liabilities (up $11.7 billion, or 3.1 percent). Two New Charters Added in Second Quarter 2018 During the three months ended June 30, the number of FDIC-insured commercial banks and savings institutions declined by 65 to 5,542. Two new charters were added, 64 institutions were absorbed by mergers, and no banks failed. The number of institutions on the FDIC’s “Problem Bank List” fell from 92 to 82, the lowest number since fourth quarter 2007. Assets of problem banks declined from $56.4 billion to $54.4 billion. Author: Benjamin Tikvina Senior Financial Analyst Division of Insurance and Research (202) 898-6578 3 Major loan categories include commercial and industrial loans, residential mortgage loans, consumer loans, and nonfarm nonresidential loans. Consumer loans include credit card loans, automobile loans, and all other consumer loans. Chart 7 Number and Assets of Banks on the “Problem Bank List” Number 1,000 900 Assets ($ Billions) Assets of Problem Banks Number of Problem Banks 500 450 800 400 700 350 600 300 500 250 400 200 300 150 200 100 100 50 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: FDIC. 4 FDIC QUARTERLY 0 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 2018** 2017** 2017 2016 2015 2014 2013 1.33 11.83 9.74 0.64 0.49 2.71 3.36 27.30 5,542 4,833 709 3.70 82 $54 0 1.09 9.72 9.69 0.75 0.49 3.24 3.20 12.17 5,787 5,011 776 4.08 105 $17 6 0.97 8.61 9.63 0.72 0.50 3.79 3.25 -3.25 5,670 4,918 752 5.61 95 $14 8 1.04 9.29 9.48 0.86 0.47 5.09 3.13 4.57 5,913 5,112 801 4.46 123 $28 5 1.04 9.29 9.59 0.97 0.44 2.66 3.07 7.11 6,182 5,338 844 4.80 183 $47 8 1.01 9.01 9.44 1.20 0.49 5.59 3.14 -0.73 6,509 5,607 902 6.27 291 $87 18 1.07 9.54 9.40 1.63 0.69 1.94 3.26 12.82 6,812 5,847 965 8.16 467 $153 24 * 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 (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 Total liabilities and capital Deposits Domestic office deposits Foreign office deposits Other borrowed funds Subordinated debt All other liabilities Total equity capital (includes minority interests) Bank equity capital Loans and leases 30-89 days past due Noncurrent loans and leases Restructured loans and leases Mortgage-backed securities Earning assets FHLB Advances Unused loan commitments Trust assets Assets securitized and sold Notional amount of derivatives INCOME DATA 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 * See Notes to Users for explanation. 2nd Quarter 2018 1st Quarter 2018 2nd Quarter 2017 %Change 17Q2-18Q2 5,542 2,077,035 5,607 2,076,978 5,787 2,093,283 -4.2 -0.8 $17,532,848 4,831,855 2,090,483 1,421,579 346,939 389,047 2,077,261 1,658,216 837,188 79,845 1,211,852 2,347 9,856,682 123,413 9,733,269 3,633,321 7,614 391,735 3,766,910 $17,531,541 4,795,206 2,072,611 1,402,650 344,173 398,436 2,051,797 1,634,554 820,415 75,619 1,197,490 2,283 9,752,384 123,743 9,628,641 3,598,925 8,133 388,766 3,907,076 $17,069,453 4,691,032 2,019,883 1,365,216 324,111 424,044 1,982,090 1,573,842 779,714 79,441 1,133,844 2,040 9,458,208 121,386 9,336,822 3,568,971 9,627 376,684 3,777,350 2.7 3.0 3.5 4.1 7.0 -8.3 4.8 5.4 7.4 0.5 6.9 15.0 4.2 1.7 4.2 1.8 -20.9 4.0 -0.3 17,532,848 13,468,726 12,235,438 1,233,288 1,494,288 67,197 518,827 1,983,810 1,980,329 17,531,541 13,528,940 12,256,900 1,272,040 1,471,092 69,852 493,059 1,968,598 1,965,000 17,069,453 13,105,310 11,780,618 1,324,692 1,447,746 77,428 500,766 1,938,203 1,933,123 2.7 2.8 3.9 -6.9 3.2 -13.2 3.6 2.4 2.4 59,368 104,823 57,618 2,156,874 15,851,976 583,974 7,736,767 20,369,312 589,409 209,828,300 First Half 2018 First Half 2017 $316,505 51,329 265,176 24,108 135,391 228,733 422 31,726 -188 116,234 116,083 23,738 68,331 47,753 116,083 $276,737 32,658 244,079 24,037 129,049 217,259 1,318 41,044 16 92,122 91,943 22,732 55,598 36,345 91,192 63,138 112,481 58,438 2,113,396 15,883,667 553,988 7,721,910 20,360,217 657,750 205,986,536 2nd Quarter %Change 2018 14.4 57.2 8.6 0.3 4.9 5.3 -68.0 -22.7 N/M 26.2 26.3 4.4 22.9 31.4 27.3 $161,891 27,781 134,109 11,712 68,051 113,379 175 16,804 -180 60,259 60,201 11,682 37,788 22,413 60,301 58,410 116,520 62,818 2,072,554 15,406,743 565,704 7,348,535 18,547,441 714,598 187,865,984 2nd Quarter 2017 1.6 -10.0 -8.3 4.1 2.9 3.2 5.3 9.8 -17.5 11.7 %Change 17Q2-18Q2 $140,570 17,191 123,379 12,006 66,722 108,401 772 22,266 19 48,220 48,132 11,235 28,330 19,802 47,662 15.2 61.6 8.7 -2.4 2.0 4.6 -77.3 -24.5 N/M 25.0 25.1 4.0 33.4 13.2 26.5 N/M - Not Meaningful FDIC QUARTERLY 5 2018 • Volume 12 • Numb er 3 TABLE III-A. Second Quarter 2018, All FDIC-Insured Institutions Asset Concentration Groups* SECOND QUARTER (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions Performance Ratios (annualized, %) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Loan and lease loss provision to assets Net operating income to assets Pretax return on assets Return on assets Return on equity Net charge-offs to loans and leases Loan and lease loss provision to net charge-offs Efficiency ratio % of unprofitable institutions % of institutions with earnings gains Structural Changes New reporters Institutions absorbed by mergers Failed institutions All Insured Institutions 5,542 4,833 709 $17,532.8 16,366.7 1,166.1 13,468.7 12,543.9 924.9 60,201 56,667 3,534 Credit Card Banks 12 11 1 $626.4 541.9 84.5 367.5 305.9 61.7 4,249 3,703 545 International Banks 5 5 0 $4,222.2 4,222.2 0.0 3,062.3 3,062.3 0.0 13,021 13,021 0 Agricultural Banks 1,383 1,370 13 $283.8 277.7 6.0 235.6 230.6 5.0 951 922 29 Commercial Lenders 2,894 2,599 295 $6,167.7 5,708.0 459.7 4,832.7 4,485.9 346.8 19,577 18,445 1,132 Mortgage Lenders 405 115 290 $356.3 102.5 253.8 277.1 83.1 194.0 967 383 584 Consumer Lenders 71 51 20 $216.8 106.3 110.5 177.4 85.6 91.8 648 460 188 Other Specialized <$1 Billion 246 222 24 $39.4 35.1 4.3 31.5 28.6 2.9 369 178 190 All Other <$1 Billion 475 418 57 $80.8 69.4 11.3 68.4 59.2 9.2 230 212 18 All Other >$1 Billion 51 42 9 $5,539.5 5,303.5 236.1 4,416.1 4,202.7 213.4 20,190 19,342 848 4.08 0.70 3.38 1.55 2.59 0.27 1.38 1.76 1.37 12.22 0.48 12.15 1.89 10.26 3.48 6.03 3.33 2.73 3.65 2.73 17.77 4.02 3.24 0.71 2.53 2.00 2.48 0.17 1.23 1.57 1.23 12.36 0.50 4.49 0.66 3.83 0.65 2.54 0.18 1.35 1.51 1.35 11.95 0.19 4.23 0.68 3.56 1.13 2.62 0.14 1.28 1.61 1.28 10.75 0.16 3.64 0.68 2.95 1.29 2.60 -0.01 1.06 1.53 1.08 9.55 0.01 4.62 0.62 4.00 1.45 2.90 0.47 1.51 1.66 1.20 11.71 1.14 3.35 0.41 2.94 8.38 6.59 0.07 3.76 4.41 3.75 22.69 0.04 4.16 0.49 3.66 0.87 2.87 0.09 1.15 1.30 1.14 9.64 0.09 3.62 0.60 3.02 1.49 2.21 0.16 1.45 1.87 1.45 13.15 0.36 100.26 55.47 3.79 74.12 105.87 45.85 0.00 100.00 93.49 58.19 0.00 100.00 140.18 59.62 2.89 68.04 118.62 59.37 3.28 78.44 -242.62 63.10 6.67 67.16 58.97 53.36 7.04 66.20 657.79 59.36 6.10 70.33 178.89 66.87 5.89 71.79 87.59 51.46 0.00 92.16 2 64 0 0 1 0 0 0 0 0 5 0 0 54 0 0 1 0 0 1 0 2 0 0 0 1 0 0 1 0 PRIOR SECOND QUARTERS (The way it was...) Return on assets (%) 2017 2015 2013 1.13 1.09 1.06 2.05 2.89 3.27 0.95 0.94 1.03 1.22 1.21 1.21 1.08 0.96 0.79 0.92 0.92 1.07 1.13 1.21 1.68 2.97 0.34 1.79 0.91 1.02 0.95 1.25 1.17 1.05 Net charge-offs to loans & leases (%) 2017 2015 2013 0.48 0.42 0.73 4.07 2.80 3.38 0.51 0.57 1.05 0.21 0.12 0.14 0.22 0.17 0.46 0.00 0.13 0.41 0.59 0.58 1.07 0.19 0.20 0.45 0.16 0.19 0.38 0.39 0.39 0.48 * See Table V-A (page 10) for explanations. 6 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE III-A. Second Quarter 2018, All FDIC-Insured Institutions Asset Size Distribution Geographic Regions* All Insured Institutions 5,542 4,833 709 $17,532.8 16,366.7 1,166.1 13,468.7 12,543.9 924.9 60,201 56,667 3,534 Less Than $100 Million 1,372 1,220 152 $81.8 73.0 8.8 68.1 61.4 6.6 222 195 27 $100 Million to $1 Billion 3,399 2,976 423 $1,112.3 953.4 158.8 927.0 801.7 125.3 3,512 3,034 477 $1 Billion to $10 Billion 637 516 121 $1,706.7 1,352.4 354.3 1,359.4 1,085.4 274.0 5,451 4,686 765 4.08 0.70 3.38 1.55 2.59 0.27 1.38 1.76 1.37 12.22 0.48 4.37 0.54 3.83 1.36 3.55 0.10 1.10 1.24 1.09 8.18 0.12 4.47 0.63 3.85 1.15 3.13 0.13 1.27 1.48 1.27 11.26 0.11 4.39 0.68 3.71 1.20 2.77 0.18 1.32 1.65 1.29 11.03 0.27 4.65 0.81 3.83 1.51 2.67 0.45 1.47 1.90 1.47 12.10 0.69 100.26 55.47 3.79 74.12 140.36 72.27 9.11 65.31 175.71 65.80 2.32 75.14 97.78 59.17 0.94 84.46 2 64 0 2 16 0 0 39 0 2017 2015 2013 1.13 1.09 1.06 0.94 0.95 0.77 Net charge-offs to loans & leases (%) 2017 2015 2013 0.48 0.42 0.73 0.21 0.14 0.35 SECOND QUARTER (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions Performance Ratios (annualized, %) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Loan and lease loss provision to assets Net operating income to assets Pretax return on assets Return on assets Return on equity Net charge-offs to loans and leases Loan and lease loss provision to net charge-offs Efficiency ratio % of unprofitable institutions % of institutions with earnings gains Structural Changes New reporters Institutions absorbed by mergers Failed institutions PRIOR SECOND QUARTERS (The way it was…) Return on assets (%) $10 Billion Greater to $250 Than $250 Billion Billion 125 9 112 9 13 0 $5,951.5 $8,680.6 5,307.3 8,680.6 644.1 0.0 4,532.0 6,582.3 4,013.1 6,582.3 518.9 0.0 21,724 29,293 19,459 29,293 2,265 0 New York 675 351 324 $3,276.4 2,836.8 439.7 2,473.8 2,139.8 334.0 9,805 8,799 1,006 Atlanta 645 588 57 $3,614.2 3,512.2 102.0 2,845.6 2,764.6 81.1 13,505 13,286 219 Chicago 1,195 1,025 170 $3,957.2 3,851.0 106.2 2,923.8 2,849.2 74.6 12,890 12,680 210 Kansas City 1,412 1,364 48 $3,626.6 3,586.2 40.3 2,780.8 2,749.5 31.3 11,621 11,514 108 San Dallas Francisco 1,205 410 1,131 374 74 36 $1,114.0 $1,944.4 977.9 1,602.6 136.1 341.8 903.9 1,540.8 795.1 1,245.6 108.8 295.2 3,932 8,448 3,407 6,982 525 1,466 3.58 0.64 2.94 1.70 2.42 0.18 1.34 1.73 1.34 12.75 0.43 4.24 0.86 3.38 1.37 2.54 0.37 1.19 1.51 1.20 9.64 0.60 4.16 0.62 3.54 1.53 2.52 0.27 1.50 1.92 1.50 12.43 0.54 3.38 0.61 2.77 2.00 2.67 0.11 1.32 1.67 1.30 12.50 0.25 4.11 0.75 3.36 1.29 2.46 0.26 1.26 1.64 1.27 12.55 0.49 4.45 0.56 3.89 1.28 2.97 0.14 1.43 1.74 1.42 12.34 0.21 4.81 0.75 4.06 1.66 2.67 0.51 1.76 2.31 1.76 15.47 0.70 105.46 52.63 0.00 88.80 89.84 55.31 0.00 100.00 108.18 56.95 3.70 79.11 87.11 52.99 4.81 79.07 86.38 59.31 5.02 72.22 98.93 55.60 2.90 70.40 103.99 60.43 2.82 74.02 116.60 48.30 4.63 76.83 0 8 0 0 1 0 0 0 0 0 12 0 1 10 0 0 11 0 0 15 0 1 10 0 0 6 0 1.12 0.97 0.95 1.26 1.31 1.27 1.14 1.04 0.88 1.10 1.10 1.17 0.95 0.96 0.54 1.20 1.10 1.02 1.04 0.96 1.12 1.08 1.23 1.28 1.28 1.15 1.17 1.54 1.29 1.60 0.12 0.14 0.37 0.22 0.21 0.43 0.72 0.55 0.97 0.44 0.45 0.72 0.60 0.49 1.00 0.57 0.47 0.70 0.24 0.25 0.48 0.48 0.50 0.95 0.26 0.21 0.34 0.66 0.49 0.58 * See Table V-A (page 11) for explanations. FDIC QUARTERLY 7 2018 • Volume 12 • Numb er 3 TABLE IV-A. First Half 2018, All FDIC-Insured Institutions Asset Concentration Groups* FIRST HALF (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions Performance Ratios (annualized, %) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets 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 Condition Ratios (%) Earning assets to total assets Loss allowance to: Loans and leases Noncurrent loans and leases Noncurrent assets plus other real estate owned to assets Equity capital ratio Core capital (leverage) ratio Common equity tier 1 capital ratio Tier 1 risk-based capital ratio Total risk-based capital ratio Net loans and leases to deposits Net loans to total assets Domestic deposits to total assets Structural Changes New reporters Institutions absorbed by mergers Failed institutions All Insured Institutions 5,542 4,833 709 $17,532.8 16,366.7 1,166.1 13,468.7 12,543.9 924.9 116,083 109,061 7,022 Credit Card Banks 12 11 1 $626.4 541.9 84.5 367.5 305.9 61.7 8,524 7,487 1,037 International Banks 5 5 0 $4,222.2 4,222.2 0.0 3,062.3 3,062.3 0.0 25,826 25,826 0 Agricultural Banks 1,383 1,370 13 $283.8 277.7 6.0 235.6 230.6 5.0 1,868 1,808 60 Commercial Lenders 2,894 2,599 295 $6,167.7 5,708.0 459.7 4,832.7 4,485.9 346.8 37,788 35,540 2,249 Mortgage Lenders 405 115 290 $356.3 102.5 253.8 277.1 83.1 194.0 1,966 798 1,167 Consumer Lenders 71 51 20 $216.8 106.3 110.5 177.4 85.6 91.8 1,402 921 481 Other Specialized <$1 Billion 246 222 24 $39.4 35.1 4.3 31.5 28.6 2.9 711 338 372 All Other <$1 Billion 475 418 57 $80.8 69.4 11.3 68.4 59.2 9.2 434 398 35 All Other >$1 Billion 51 42 9 $5,539.5 5,303.5 236.1 4,416.1 4,202.7 213.4 37,564 35,944 1,620 4.01 0.65 3.36 1.55 2.62 0.28 1.33 1.69 1.33 11.83 0.49 12.05 1.79 10.26 3.59 6.15 3.38 2.71 3.57 2.71 17.96 4.02 3.16 0.65 2.51 2.02 2.50 0.18 1.22 1.56 1.22 12.34 0.53 4.40 0.62 3.78 0.63 2.52 0.14 1.33 1.49 1.32 11.77 0.13 4.14 0.63 3.51 1.12 2.61 0.14 1.24 1.56 1.24 10.44 0.17 3.58 0.64 2.94 1.24 2.57 -0.01 1.08 1.49 1.10 9.74 0.02 4.67 0.63 4.04 1.44 2.94 0.51 1.46 1.76 1.31 12.79 0.97 3.28 0.39 2.90 8.25 6.55 0.07 3.64 4.29 3.63 21.84 0.10 4.08 0.47 3.61 0.85 2.85 0.11 1.09 1.23 1.08 9.08 0.13 3.54 0.55 2.99 1.47 2.29 0.17 1.35 1.73 1.35 12.23 0.37 101.56 56.49 3.70 76.02 107.09 46.45 0.00 83.33 90.23 58.57 0.00 100.00 160.56 60.39 2.53 71.01 121.60 59.90 3.14 80.72 -94.09 63.47 7.16 69.38 74.17 53.97 7.04 73.24 251.44 59.88 6.91 70.33 154.50 67.69 5.89 69.05 89.08 53.86 0.00 90.20 90.41 92.74 87.86 93.44 90.95 94.43 96.89 92.04 92.95 90.78 1.25 117.73 4.46 334.66 1.31 124.21 1.40 125.29 1.01 126.16 0.71 27.38 1.03 161.90 1.49 120.63 1.29 126.39 1.08 80.75 0.64 11.29 9.74 13.14 13.22 14.59 72.27 55.51 69.79 1.05 15.29 13.47 13.85 13.95 15.91 127.90 75.05 57.36 0.41 10.02 8.86 13.46 13.55 14.95 50.89 36.91 48.08 0.88 11.31 11.19 14.68 14.69 15.81 81.65 67.79 83.02 0.65 11.91 10.24 12.39 12.47 13.74 89.31 69.98 78.08 1.61 11.24 10.89 21.95 21.97 22.84 75.99 59.12 77.49 0.47 10.35 10.57 17.12 17.36 18.36 85.51 69.97 81.81 0.44 16.59 16.32 36.04 36.05 37.06 34.89 27.88 79.91 0.76 11.89 12.22 20.82 20.85 21.93 66.00 55.92 84.73 0.71 11.12 9.18 12.93 13.01 14.47 62.91 50.15 76.56 5 129 0 0 1 0 0 0 0 0 12 0 0 108 0 0 2 0 0 1 0 5 0 0 0 3 0 0 2 0 PRIOR FIRST HALVES (The way it was...) Number of institutions 2017 2015 2013 5,787 6,348 6,940 12 14 16 5 4 4 1,418 1,484 1,521 2,958 3,146 3,455 454 545 603 60 55 47 276 353 416 546 681 810 58 66 68 Total assets (in billions) 2017 2015 2013 $17,069.5 15,753.6 14,409.8 $505.5 510.3 590.5 $4,194.3 3,747.4 3,650.4 $280.9 258.3 236.0 $5,911.7 5,194.6 4,723.8 $359.5 445.4 562.0 $261.7 178.4 103.9 $48.0 60.6 64.1 $97.0 122.6 143.9 $5,410.8 5,236.1 4,335.2 Return on assets (%) 2017 2015 2013 1.09 1.06 1.09 2.05 2.95 3.19 0.95 0.92 1.00 1.20 1.19 1.17 1.03 0.93 0.87 0.90 0.86 1.01 1.10 1.15 1.60 2.83 1.12 1.73 0.92 0.99 0.94 1.16 1.11 1.11 Net charge-offs to loans & leases (%) 2017 2015 2013 0.49 0.43 0.78 3.97 2.78 3.37 0.58 0.59 1.12 0.15 0.07 0.12 0.21 0.16 0.49 0.05 0.14 0.42 0.62 0.59 1.13 0.15 0.17 0.44 0.14 0.17 0.33 0.40 0.40 0.55 Noncurrent assets plus OREO to assets (%) 2017 2015 2013 0.75 1.04 1.90 1.06 0.74 0.92 0.50 0.76 1.28 0.84 0.80 1.03 0.76 0.96 1.94 1.63 1.94 2.30 0.62 1.03 0.89 0.50 0.69 1.00 0.92 1.27 1.60 0.83 1.28 2.56 Equity capital ratio (%) 2017 2015 2013 11.33 11.23 11.16 15.91 14.83 15.10 9.90 9.78 8.86 11.47 11.40 11.01 12.04 11.96 11.85 11.13 11.51 11.23 10.28 10.26 9.84 15.28 15.12 14.42 11.88 11.71 11.32 11.23 11.13 11.79 * See Table V-A (page 10) for explanations. 8 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE IV-A. First Half 2018, All FDIC-Insured Institutions Asset Size Distribution FIRST HALF (The way it is...) Number of institutions reporting Commercial banks Savings institutions Total assets (in billions) Commercial banks Savings institutions Total deposits (in billions) Commercial banks Savings institutions Bank net income (in millions) Commercial banks Savings institutions Performance Ratios (annualized, %) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets 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 Condition Ratios (%) Earning assets to total assets Loss allowance to: Loans and leases Noncurrent loans and leases Noncurrent assets plus other real estate owned to assets Equity capital ratio Core capital (leverage) ratio Common equity tier 1 capital ratio Tier 1 risk-based capital ratio Total risk-based capital ratio Net loans and leases to deposits Net loans to total assets Domestic deposits to total assets Structural Changes New reporters Institutions absorbed by mergers Failed institutions Geographic Regions* All Insured Institutions 5,542 4,833 709 $17,532.8 16,366.7 1,166.1 13,468.7 12,543.9 924.9 116,083 109,061 7,022 Less Than $100 Million 1,372 1,220 152 $81.8 73.0 8.8 68.1 61.4 6.6 428 375 54 $100 Million to $1 Billion 3,399 2,976 423 $1,112.3 953.4 158.8 927.0 801.7 125.3 6,759 5,828 931 $1 Billion to $10 Billion 637 516 121 $1,706.7 1,352.4 354.3 1,359.4 1,085.4 274.0 10,724 9,053 1,671 $10 Billion Greater to $250 Than $250 Billion Billion 125 9 112 9 13 0 $5,951.5 $8,680.6 5,307.3 8,680.6 644.1 0.0 4,532.0 6,582.3 4,013.1 6,582.3 518.9 0.0 41,678 56,494 37,312 56,494 4,366 0 4.01 0.65 3.36 1.55 2.62 0.28 1.33 1.69 1.33 11.83 0.49 4.30 0.52 3.78 1.35 3.55 0.10 1.06 1.18 1.05 7.90 0.14 4.40 0.59 3.80 1.12 3.11 0.12 1.23 1.44 1.23 10.88 0.10 4.33 0.64 3.69 1.19 2.78 0.19 1.30 1.63 1.28 10.98 0.22 4.57 0.75 3.81 1.52 2.70 0.46 1.42 1.83 1.42 11.67 0.71 101.56 56.49 3.70 76.02 128.45 72.97 9.18 65.60 180.33 66.46 2.12 77.52 119.75 59.79 1.10 86.81 90.41 92.64 93.21 1.25 117.73 1.39 113.23 0.64 11.29 9.74 13.14 13.22 14.59 72.27 55.51 69.79 New York 675 351 324 $3,276.4 2,836.8 439.7 2,473.8 2,139.8 334.0 19,155 17,191 1,965 Atlanta 645 588 57 $3,614.2 3,512.2 102.0 2,845.6 2,764.6 81.1 25,283 24,821 462 Chicago 1,195 1,025 170 $3,957.2 3,851.0 106.2 2,923.8 2,849.2 74.6 25,399 24,834 566 Kansas City 1,412 1,364 48 $3,626.6 3,586.2 40.3 2,780.8 2,749.5 31.3 22,452 22,227 226 San Dallas Francisco 1,205 410 1,131 374 74 36 $1,114.0 $1,944.4 977.9 1,602.6 136.1 341.8 903.9 1,540.8 795.1 1,245.6 108.8 295.2 7,596 16,198 6,601 13,388 995 2,809 3.50 0.59 2.91 1.70 2.46 0.19 1.29 1.65 1.29 12.32 0.44 4.15 0.80 3.36 1.37 2.54 0.37 1.17 1.48 1.17 9.47 0.61 4.10 0.57 3.53 1.49 2.56 0.29 1.41 1.80 1.41 11.66 0.55 3.30 0.56 2.73 1.97 2.67 0.11 1.29 1.63 1.29 12.37 0.25 4.03 0.70 3.33 1.34 2.53 0.26 1.22 1.57 1.23 12.16 0.51 4.36 0.52 3.84 1.26 2.96 0.15 1.39 1.68 1.38 12.02 0.21 4.76 0.70 4.06 1.67 2.73 0.54 1.70 2.22 1.70 14.90 0.72 106.09 53.49 0.00 92.80 89.36 56.60 0.00 100.00 107.10 57.21 4.15 81.78 90.63 54.66 5.58 79.07 90.98 60.04 4.94 72.97 95.78 57.00 2.27 72.80 108.27 61.12 2.57 76.60 120.58 49.40 4.63 80.00 92.54 91.06 89.17 89.86 89.63 89.23 90.66 91.68 94.02 1.25 146.73 1.11 133.19 1.35 137.96 1.21 97.13 1.28 129.76 1.26 108.70 1.12 106.23 1.30 99.60 1.07 112.07 1.45 205.19 0.99 13.36 13.44 21.35 21.39 22.45 71.04 59.10 83.19 0.80 11.32 11.34 15.52 15.54 16.63 82.25 68.55 83.34 0.69 11.74 10.86 14.12 14.14 15.12 87.86 69.98 79.41 0.63 12.14 10.47 13.17 13.33 14.76 79.68 60.68 73.19 0.62 10.61 8.79 12.51 12.56 14.02 62.55 47.43 63.70 0.61 12.49 10.49 13.47 13.53 14.90 74.66 56.37 69.27 0.72 12.08 9.59 12.83 12.93 14.24 72.16 56.82 76.33 0.57 10.49 9.20 13.00 13.05 14.22 67.84 50.12 64.91 0.74 10.26 9.21 12.41 12.50 14.40 69.67 53.42 60.97 0.76 11.55 10.36 13.29 13.39 14.45 80.54 65.35 81.09 0.46 11.26 10.55 14.75 14.90 15.96 76.84 60.89 78.36 5 129 0 5 33 0 0 77 0 0 18 0 0 1 0 0 0 0 0 23 0 2 18 0 0 18 0 0 26 0 1 33 0 2 11 0 PRIOR FIRST HALVES (The way it was…) Number of institutions 2017 2015 2013 5,787 6,348 6,940 1,471 1,799 2,141 3,564 3,847 4,146 631 591 546 112 102 100 9 9 7 709 787 858 693 788 884 1,232 1,371 1,483 1,464 1,571 1,686 1,253 1,338 1,468 436 493 561 Total assets (in billions) 2017 2015 2013 $17,069.5 15,753.6 14,409.8 $87.1 105.7 124.8 $1,159.0 1,203.2 1,256.7 $1,752.2 1,616.8 1,413.8 $5,432.6 4,737.8 4,702.8 $8,638.6 8,090.2 6,911.6 $3,137.2 3,063.0 2,855.1 $3,540.4 3,292.1 2,980.2 $3,890.5 3,537.0 3,344.1 $3,692.3 3,405.9 3,087.9 $1,045.1 930.3 867.2 $1,763.9 1,525.4 1,275.3 Return on assets (%) 2017 2015 2013 1.09 1.06 1.09 0.93 0.92 0.76 1.09 1.00 0.92 1.18 1.18 1.19 1.10 1.04 0.99 1.06 1.06 1.18 0.93 0.90 0.70 1.10 1.04 1.07 1.01 0.95 1.11 1.08 1.20 1.26 1.22 1.09 1.14 1.45 1.32 1.55 Net charge-offs to loans & leases (%) 2017 2015 2013 0.49 0.43 0.78 0.17 0.14 0.31 0.12 0.12 0.34 0.21 0.20 0.42 0.71 0.54 1.01 0.46 0.48 0.80 0.56 0.47 1.05 0.58 0.50 0.76 0.29 0.26 0.52 0.49 0.52 1.00 0.27 0.19 0.35 0.66 0.48 0.61 Noncurrent assets plus OREO to assets (%) 2017 2015 2013 0.75 1.04 1.90 1.06 1.35 1.90 0.90 1.27 2.11 0.74 1.04 2.15 0.71 0.80 1.17 0.75 1.15 2.31 0.67 0.76 1.26 0.88 1.28 2.77 0.67 1.00 1.74 0.86 1.30 2.18 0.86 1.09 1.86 0.48 0.57 1.12 Equity capital ratio (%) 2017 2015 2013 11.33 11.23 11.16 13.09 12.53 11.76 11.36 11.28 10.85 11.82 11.84 11.78 12.37 12.40 12.43 10.55 10.39 10.22 12.46 11.74 12.00 12.21 12.36 12.22 10.38 10.13 9.17 10.08 10.32 10.83 11.32 11.14 10.74 12.22 12.37 13.14 * See Table V-A (page 11) for explanations. FDIC QUARTERLY 9 2018 • Volume 12 • Numb er 3 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* June 30, 2018 All Insured Institutions Credit Card International Banks Banks Agricultural Banks Commercial Lenders Mortgage Lenders Consumer Lenders Other Specialized <$1 Billion All Other <$1 Billion All Other >$1 Billion Percent of Loans 30-89 Days Past Due All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.59 0.32 0.24 0.09 0.63 0.98 0.31 1.32 1.23 1.40 0.20 0.60 2.54 0.32 0.00 70.06 0.00 0.15 0.71 1.40 1.41 1.21 0.57 1.34 0.80 0.34 0.30 0.05 0.99 1.12 0.48 1.01 1.02 0.97 0.22 0.63 0.62 0.59 0.47 0.55 0.35 0.95 0.94 1.17 0.99 1.18 0.65 0.68 0.39 0.31 0.22 0.10 0.48 0.70 0.26 1.25 1.21 1.26 0.17 0.41 0.74 0.37 0.23 0.11 0.49 0.84 0.56 1.03 0.80 1.04 0.26 0.71 0.40 0.51 0.42 0.11 0.35 0.41 0.21 0.73 0.69 0.74 0.15 0.62 1.22 1.72 0.90 0.49 0.48 1.51 0.68 1.70 1.75 1.70 0.60 1.18 1.09 0.80 0.71 0.48 0.66 1.37 1.10 1.42 2.28 1.39 0.53 1.08 0.91 0.29 0.23 0.07 0.74 1.32 0.23 1.60 1.09 1.89 0.16 0.73 Percent of Loans Noncurrent** All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 1.47 0.48 0.60 0.14 2.38 2.33 0.79 0.88 1.27 0.49 0.24 1.06 1.88 17.93 0.67 0.00 48.19 0.99 0.67 1.40 1.44 0.60 0.77 1.33 1.98 0.24 0.66 0.07 4.08 2.63 0.74 0.84 1.09 0.31 0.10 1.05 1.10 0.62 0.96 0.30 0.45 0.84 1.31 0.52 0.28 0.54 1.18 1.12 0.82 0.48 0.56 0.15 1.21 1.34 0.92 0.72 1.13 0.68 0.33 0.80 2.72 0.30 0.57 0.44 1.15 3.24 4.58 0.44 0.69 0.42 0.20 2.59 1.26 0.70 1.12 0.49 1.65 1.25 0.44 0.46 1.19 0.28 0.18 0.64 1.34 1.70 1.13 1.80 0.59 1.42 1.17 0.86 0.85 0.86 0.74 1.23 1.12 0.90 1.29 0.53 0.44 1.13 0.95 0.52 0.98 0.50 0.53 1.02 2.55 0.49 0.71 0.12 3.78 3.39 0.56 0.64 1.09 0.38 0.20 1.34 Percent of Loans Charged-Off (net, YTD) All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.01 -0.04 0.02 0.00 0.07 0.01 0.28 2.39 3.88 0.86 0.13 0.49 0.22 0.00 0.00 0.00 83.73 0.04 2.37 4.17 4.27 2.15 4.20 4.02 -0.03 0.00 0.00 0.01 0.11 -0.07 0.21 2.67 3.56 0.79 0.10 0.53 0.01 -0.07 0.02 -0.01 -0.02 0.03 0.32 0.49 2.06 0.35 0.29 0.13 0.02 -0.04 0.03 -0.01 0.08 0.02 0.27 1.07 4.15 0.78 0.13 0.17 -0.01 -0.01 -0.02 -0.02 -0.26 0.01 0.05 1.07 2.58 0.93 0.17 0.02 0.51 -0.06 0.64 0.00 0.21 0.57 0.68 1.17 2.99 0.71 0.03 0.97 0.04 0.19 0.00 -0.01 -0.03 0.06 -0.32 0.63 1.39 0.57 0.74 0.10 0.03 0.05 -0.02 -0.01 0.07 0.05 0.51 0.58 1.73 0.54 0.20 0.13 0.01 -0.05 0.01 0.00 0.06 0.00 0.17 1.80 3.31 0.92 0.13 0.37 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) $4,831.9 346.9 1,421.6 419.0 389.0 2,090.5 2,077.3 1,658.2 837.2 821.0 1,291.7 9,859.0 $0.6 0.0 0.0 0.0 0.0 0.5 43.3 447.3 425.9 21.4 0.9 492.0 $574.4 16.6 51.6 77.8 49.2 331.0 343.1 273.7 186.6 87.2 388.4 1,579.6 $121.2 7.1 33.1 4.0 2.4 28.8 22.7 6.6 0.6 6.0 44.6 195.1 $2,692.9 261.3 1,046.0 285.3 198.5 854.6 988.0 341.3 28.5 312.8 339.1 4,361.2 $191.0 6.0 16.9 4.5 10.9 151.7 5.9 4.2 0.3 3.9 11.0 212.2 $35.3 0.5 2.5 0.6 4.3 27.3 7.3 107.4 21.0 86.5 3.4 153.4 $7.9 0.7 2.6 0.2 0.3 3.7 1.4 1.3 0.1 1.2 0.5 11.2 $34.9 2.2 7.9 1.0 1.3 19.5 4.0 4.0 0.1 3.9 2.9 45.8 $1,173.6 52.5 260.9 45.5 122.3 673.5 661.6 472.4 174.2 298.2 500.9 2,808.5 Memo: Other Real Estate Owned (in millions) All other real estate owned Construction and development Nonfarm nonresidential Multifamily residential real estate 1-4 family residential Farmland 7,613.8 2,146.5 2,239.7 108.7 2,918.4 180.4 0.3 0.0 0.0 0.0 0.3 0.0 457.8 5.2 67.0 0.0 366.6 0.0 309.2 75.7 103.1 9.7 51.5 69.2 4,907.5 1,825.8 1,602.8 84.1 1,292.6 102.1 228.1 51.4 19.4 11.3 142.9 3.1 29.9 4.6 8.1 0.1 17.0 0.1 36.3 11.7 14.6 0.0 9.5 0.5 143.3 28.5 56.6 0.6 53.5 4.1 1,501.5 143.6 368.1 3.0 984.5 1.3 * Asset Concentration Group Definitions (Groups are hierarchical and mutually exclusive): Credit-card Lenders - Institutions whose credit-card loans plus securitized receivables exceed 50 percent of total assets plus securitized receivables. International Banks - Banks with assets greater than $10 billion and more than 25 percent of total assets in foreign offices. Agricultural Banks - Banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of the total loans and leases. Commercial Lenders - Institutions whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties exceed 25 percent of total assets. Mortgage Lenders - Institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets. Consumer Lenders - Institutions whose residential mortgage loans, plus credit-card loans, plus other loans to individuals, exceed 50 percent of total assets. Other Specialized < $1 Billion - Institutions with assets less than $1 billion, whose loans and leases are less than 40 percent of total assets. All Other < $1 billion - Institutions with assets less than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. All Other > $1 billion - Institutions with assets greater than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. 10 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution Geographic Regions* All Insured Institutions Less Than $100 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 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 0.59 0.32 0.24 0.09 0.63 0.98 0.31 1.32 1.23 1.40 0.20 0.60 1.04 0.59 0.84 0.70 0.65 1.43 1.30 1.74 4.69 1.69 0.57 1.05 0.53 0.48 0.37 0.19 0.43 0.78 0.58 1.32 2.00 1.28 0.60 0.58 0.30 0.29 0.21 0.07 0.39 0.45 0.42 1.28 2.93 0.98 0.26 0.37 0.47 0.29 0.22 0.11 0.48 0.79 0.22 1.23 1.33 1.11 0.15 0.55 0.89 0.29 0.17 0.06 0.82 1.32 0.32 1.41 1.05 1.76 0.19 0.71 0.45 0.50 0.28 0.14 0.51 0.70 0.21 1.09 1.11 1.06 0.09 0.49 0.67 0.25 0.19 0.06 0.71 1.12 0.27 1.85 1.38 2.32 0.11 0.73 0.63 0.20 0.30 0.06 0.69 0.94 0.40 0.90 1.03 0.84 0.26 0.55 0.89 0.35 0.22 0.18 0.71 1.46 0.29 1.25 1.09 1.51 0.24 0.70 0.54 0.37 0.27 0.08 0.46 1.06 0.39 0.87 0.67 0.96 0.19 0.51 0.25 0.16 0.14 0.04 0.34 0.39 0.31 1.35 1.60 1.13 0.31 0.53 Percent of Loans Noncurrent** All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 1.47 0.48 0.60 0.14 2.38 2.33 0.79 0.88 1.27 0.49 0.24 1.06 1.21 0.76 1.40 0.80 0.51 1.22 1.68 0.82 2.16 0.80 1.11 1.23 0.83 0.95 0.75 0.35 0.55 0.88 1.01 0.65 1.48 0.60 0.89 0.85 0.73 0.52 0.60 0.15 0.56 1.12 1.45 0.80 2.94 0.41 0.46 0.83 1.17 0.31 0.54 0.12 1.22 2.07 0.85 1.02 1.38 0.56 0.31 0.98 2.39 0.36 0.59 0.09 3.92 3.23 0.58 0.74 1.08 0.41 0.13 1.24 1.21 0.51 0.71 0.15 2.34 1.94 0.74 0.99 1.24 0.60 0.30 0.99 1.82 0.70 0.53 0.18 3.00 2.74 0.64 0.98 1.27 0.69 0.16 1.16 1.63 0.46 0.70 0.14 2.25 2.37 0.67 0.50 1.06 0.27 0.16 1.05 2.13 0.34 0.67 0.13 2.86 3.35 0.75 0.89 1.15 0.47 0.28 1.30 0.97 0.30 0.60 0.22 1.00 1.90 1.28 0.76 1.16 0.58 0.29 0.96 0.48 0.62 0.38 0.05 0.63 0.56 1.15 0.93 1.62 0.33 0.37 0.70 Percent of Loans Charged-Off (net, YTD) All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.01 -0.04 0.02 0.00 0.07 0.01 0.28 2.39 3.88 0.86 0.13 0.49 0.02 -0.06 0.01 -0.10 0.02 0.04 0.39 0.86 17.39 0.54 0.19 0.14 0.02 -0.01 0.02 -0.01 0.04 0.03 0.25 1.05 6.50 0.69 0.20 0.10 0.03 -0.05 0.02 -0.01 0.05 0.08 0.40 2.05 7.88 0.99 0.20 0.22 0.02 -0.05 0.04 0.00 0.07 0.03 0.37 2.69 4.11 0.80 0.11 0.71 -0.01 -0.05 0.00 0.00 0.08 -0.03 0.18 2.16 3.45 0.90 0.13 0.44 0.04 0.00 0.04 0.00 0.12 0.04 0.37 2.64 3.62 1.07 0.11 0.61 0.02 -0.04 0.03 0.00 0.08 0.01 0.24 2.38 3.98 0.77 0.12 0.55 0.00 -0.01 0.03 -0.01 0.09 -0.02 0.23 1.48 3.70 0.58 0.16 0.25 0.00 -0.07 0.00 0.01 0.02 0.01 0.19 2.77 3.67 1.34 0.12 0.51 0.01 -0.02 0.02 0.00 0.00 0.02 0.33 1.44 2.72 0.86 0.09 0.21 -0.01 -0.16 0.00 -0.01 -0.01 0.00 0.45 2.59 4.70 0.69 0.17 0.72 $4,831.9 346.9 1,421.6 419.0 389.0 2,090.5 2,077.3 1,658.2 837.2 821.0 1,291.7 $33.6 2.0 8.2 0.9 0.8 15.3 5.7 3.1 0.1 3.1 6.6 $596.3 55.8 226.5 32.7 22.6 207.3 96.8 31.3 1.9 29.4 48.1 $884.7 82.6 358.9 98.7 41.8 279.6 186.8 73.1 11.2 61.9 63.7 $1,663.3 136.4 540.2 165.4 141.4 661.8 787.3 819.7 460.7 359.0 391.1 $1,654.0 70.1 287.8 121.2 182.4 926.5 1,000.7 731.0 363.3 367.6 782.2 $994.4 65.2 326.8 150.7 78.2 368.9 318.5 359.9 219.4 140.5 198.6 $905.8 59.8 277.8 42.2 96.7 415.6 502.2 406.6 203.9 202.7 265.3 $1,005.6 58.2 217.7 108.5 96.4 500.8 455.9 228.7 67.2 161.6 315.9 $871.9 52.0 194.3 35.7 69.2 428.4 425.6 310.2 192.9 117.3 355.9 $471.3 73.5 196.1 20.5 20.9 142.2 144.3 64.9 19.8 45.1 55.7 $582.8 38.2 208.9 61.3 27.6 234.6 230.8 287.8 134.0 153.9 100.4 9,859.0 49.0 772.4 1,208.3 3,661.4 4,167.9 1,871.4 2,079.9 2,006.1 1,963.6 736.2 1,201.9 7,613.8 2,146.5 2,239.7 108.7 2,918.4 180.4 202.9 50.7 61.1 5.0 64.1 22.0 2,283.7 974.3 778.7 47.3 402.5 81.0 1,710.7 622.7 573.7 33.3 411.6 69.4 1,829.1 352.6 534.7 20.3 914.6 6.8 1,587.5 146.2 291.5 2.9 1,125.6 1.3 1,380.8 238.2 405.2 22.7 701.0 13.7 1,788.9 575.9 493.1 33.1 674.2 12.6 1,408.0 257.1 418.5 18.0 691.4 22.9 1,287.0 378.3 339.5 16.8 450.3 82.2 1,335.0 535.4 478.8 10.0 270.7 40.2 414.2 161.6 104.7 8.0 130.8 8.9 June 30, 2018 Loans Outstanding (in billions) All real estate loans Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases (plus unearned income) Memo: Other Real Estate Owned (in millions) All other real estate owned Construction and development Nonfarm nonresidential Multifamily residential real estate 1-4 family residential Farmland * 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 2018 • Volume 12 • Numb er 3 Table VI-A. Derivatives, All FDIC-Insured Call Report Filers Asset Size Distribution (dollar figures in millions; notional amounts unless otherwise indicated) ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives Total derivatives 2nd Quarter 2018 3rd Quarter 2017 % 2nd Change Quarter 17Q2 2017 18Q2 1st Quarter 2018 4th Quarter 2017 1,359 1,360 $15,926,402 $15,928,570 12,187,330 12,247,546 209,828,300 205,986,536 1,367 $15,815,208 12,133,179 173,483,956 1,397 1,423 $15,675,909 $15,459,961 11,947,224 11,796,323 190,609,917 187,865,984 Less Than $100 Million -4.5 3.0 3.3 11.7 44 $3,236 2,704 178 $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 Billion 759 429 118 9 $325,748 $1,286,437 $5,630,349 $8,680,632 268,929 1,018,035 4,315,385 6,582,278 22,630 142,428 62,339,270 147,323,793 Derivative Contracts by Underlying Risk Exposure Interest rate 157,435,118 Foreign exchange* 43,280,045 Equity 3,420,624 Commodity & other (excluding credit derivatives) 1,510,765 Credit 4,178,619 Total 209,816,738 155,478,363 41,064,224 3,466,899 1,631,020 4,345,494 205,976,797 130,423,065 34,422,180 3,079,607 1,372,891 4,186,122 173,477,230 141,278,946 39,707,400 3,055,705 1,477,532 5,090,240 190,601,362 139,831,983 38,856,459 2,908,473 1,334,384 4,934,591 187,856,881 12.6 11.4 17.6 13.2 -15.3 11.7 173 0 0 0 0 40 19,505 0 0 0 1 11,277 136,600 54,751,870 102,526,970 4,331 7,037,368 36,238,346 190 173,155 3,247,279 18 95,176 1,415,571 1,289 281,702 3,895,627 142,358 62,339,270 147,323,793 Derivative Contracts by Transaction Type Swaps Futures & forwards Purchased options Written options Total 107,957,920 46,024,430 23,883,350 25,142,037 203,007,738 105,094,180 45,497,597 23,840,759 24,973,515 199,406,052 94,523,862 34,407,162 19,163,376 19,677,317 167,771,716 101,820,942 40,132,650 20,398,592 20,908,669 183,260,854 103,004,241 39,846,961 19,127,368 18,608,635 180,587,205 4.8 15.5 24.9 35.1 12.4 17 13 0 10 40 6,724 2,094 275 2,183 11,276 79,913 29,430,295 78,440,970 33,818 11,294,511 34,693,994 13,247 10,076,250 13,793,579 13,934 10,930,742 14,195,168 140,913 61,731,798 141,123,711 49,616 23,843 5,006 1,181 23,965 -24,348 51,494 27,846 6,582 -867 33,701 -34,976 49,032 10,372 -7,514 -829 33,170 -34,547 52,123 13,938 -5,742 -1,390 34,840 -37,666 68,960 -430 -4,898 -1,300 31,164 -31,788 -28.1 N/M N/M N/M -23.1 N/M 0 0 0 0 0 0 111 0 0 0 -1 0 1,195 1 1 0 0 -34 91,960,164 42,279,176 24,373,707 31,341,488 4,906,416 2,472,893 2,679,109 867,817 123,737 95,441,267 40,334,549 23,687,625 29,696,500 5,021,957 2,630,013 2,747,190 843,259 139,432 72,590,567 36,154,531 23,565,841 24,379,652 4,805,216 2,525,329 2,295,686 732,909 113,150 72,171,780 43,431,393 27,041,460 28,385,819 4,987,149 2,574,435 2,159,633 780,834 119,191 65,977,189 48,374,437 29,634,366 27,411,021 4,813,394 2,496,193 2,236,176 730,676 116,759 39.4 -12.6 -17.8 14.3 1.9 -0.9 19.8 18.8 6.0 36 12 19 0 0 0 0 0 0 5,187 4,689 6,578 5 0 0 0 0 0 33,251 36,527 49,473 2,724 891 8 43 65 1 1,994,605 3,019,612 309,072 2,314,371 2,862,714 527,870 2,172,996 2,814,096 312,753 2,542,161 3,173,395 524,420 2,544,432 3,069,752 311,157 -21.6 -1.6 -0.7 0 0 0 2 5 23 24 254 363 59,314 185,512 32,132 1,935,264 2,833,841 276,554 24.5 39.6 24.8 41.9 23.3 38.5 24.2 45.1 24.6 46.9 0.1 0.1 0.8 0.4 1.3 0.8 14.2 19.6 37.6 63.5 64.1 66.7 61.9 69.3 71.4 0.2 1.2 2.1 33.8 101.0 2.8 -1.1 11.4 1.2 9.9 -71.7 0.0 0.0 1.5 -0.6 1.9 196 12,462,036 9,500,260 198 12,556,298 9,620,609 200 12,460,269 9,538,277 200 12,403,492 9,421,994 205 12,228,056 9,306,454 -4.4 1.9 2.1 3 241 216 36 18,817 15,516 86 291,064 229,366 63 3,763,024 2,920,877 8 8,388,890 6,334,285 Derivative Contracts by Underlying Risk Exposure Interest rate 155,241,882 153,262,602 128,177,040 138,893,663 Foreign exchange 40,144,539 38,353,254 32,402,215 36,960,571 Equity 3,402,588 3,450,109 3,063,576 3,040,023 Commodity & other 1,481,752 1,602,648 1,343,837 1,450,053 Total 200,270,761 196,668,613 164,986,668 180,344,309 137,316,308 36,002,239 2,893,124 1,306,894 177,518,566 13.1 11.5 17.6 13.4 12.8 4 0 0 0 4 710 0 0 0 710 -94.4 565.9 32.4 89.2 3.5 0 0 0 0 0 0 0 0 0 0 8 3 7 1 19 -1,879 2,802 -84 -36 804 2,127 1,730 1,563 629 6,048 0.0 0.0 0.0 0.0 0.5 2.0 1.8 6.8 5.8 21.2 229 397 109,500 1,209,545 90,913 957,598 114 5,478,929 4,196,299 9 8,680,632 6,582,278 555,027 29,384 13,318 27,730 625,460 1,514,959 475,362 4,564 1,273 1,996,158 Fair Value of Derivative Contracts Interest rate contracts Foreign exchange contracts Equity contracts Commodity & other (excluding credit derivatives) Credit derivatives as guarantor** Credit derivatives as beneficiary** Derivative Contracts by Maturity*** Interest rate contracts < 1 year 1-5 years > 5 years Foreign exchange and gold contracts < 1 year 1-5 years > 5 years Equity contracts < 1 year 1-5 years > 5 years Commodity & other contracts (including credit derivatives, excluding gold contracts) < 1 year 1-5 years > 5 years Risk-Based Capital: Credit Equivalent Amount Total current exposure to tier 1 capital (%) Total potential future exposure to tier 1 capital (%) Total exposure (credit equivalent amount) to tier 1 capital (%) Credit losses on derivatives**** HELD FOR TRADING Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives Trading Revenues: Cash & Derivative Instruments Interest rate** Foreign exchange** Equity** Commodity & other (including credit derivatives)** Total trading revenues** 255 4,535 1,486 594 6,871 2,648 2,894 1,865 789 8,197 2,229 1,793 989 13 5,024 2,917 1,540 1,183 754 6,394 4,521 681 1,122 314 6,637 Share of Revenue Trading revenues to gross revenues (%)** Trading revenues to net operating revenues (%)** 4.5 16.6 5.6 21.4 3.6 31.3 4.6 19.9 4.8 20.5 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives Total assets of institutions reporting derivatives Total deposits of institutions reporting derivatives 758 15,479,274 11,827,656 758 15,475,559 11,881,099 783 15,370,175 11,775,231 801 15,239,665 11,593,669 821 15,029,964 11,445,122 -7.7 3.0 3.3 9 668 569 Derivative Contracts by Underlying Risk Exposure Interest rate Foreign exchange Equity Commodity & other Total notional amount 2,184,804 505,125 18,036 29,012 2,736,977 2,206,558 485,719 16,790 28,371 2,737,439 2,239,391 500,573 16,031 29,054 2,785,049 2,376,823 496,561 15,682 27,479 2,916,545 2,506,666 519,135 15,349 27,490 3,068,640 -12.8 -2.7 17.5 5.5 -10.8 36 0 0 0 36 10,565 0 0 0 10,566 6,917 5,556 20 128 1,021 -1,134 41,393 18,286 4,985 1,053 22,945 -23,180 27,851,146 64,070,544 9,152,484 33,085,464 6,996,867 17,320,770 5,071,690 26,267,068 813,844 4,091,681 623,741 1,849,144 77,846 2,601,220 51,797 815,954 6,012 117,723 32,313 54,196,843 101,012,011 3,797 6,682,214 33,458,529 37 159,836 3,242,715 9 67,446 1,414,298 36,156 61,106,338 139,127,552 104,217 378 153 9 104,757 All line items are reported on a quarterly basis. N/M - Not Meaningful * Includes spot foreign exchange contracts. All other references to foreign exchange contracts in which notional values or fair values are reported exclude spot foreign exchange contracts. ** Does not include banks filing the FFIEC 051 report form, which was introduced in first quarter 2017. *** Derivative contracts subject to the risk-based capital requirements for derivatives. **** Credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and banks filing the FFIEC 041 report form that have $300 million or more in total assets, but is not applicaable to banks filing the FFIEC 051 form. 12 FDIC QUARTERLY QUARTERLY BANKING PROFILE TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Call Report Filers) Asset Size Distribution (dollar figures in millions) Assets Securitized and Sold with Servicing Retained or with Recourse or Other Seller-Provided Credit Enhancements Number of institutions reporting securitization activities Outstanding Principal Balance by Asset Type 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total securitized and sold Maximum Credit Exposure by Asset Type 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total credit exposure Total unused liquidity commitments provided to institution’s own securitizations Securitized Loans, Leases, and Other Assets 30-89 Days Past Due (%) 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total loans, leases, and other assets Securitized Loans, Leases, and Other Assets 90 Days or More Past Due (%) 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total loans, leases, and other assets Securitized Loans, Leases, and Other Assets Charged-off (net, YTD, annualized, %) 1-4 family residential loans Home equity loans Credit card receivables Auto loans Other consumer loans Commercial and industrial loans All other loans, leases, and other assets Total loans, leases, and other assets Seller’s Interests in Institution's Own Securitizations – Carried as Loans Home equity loans Credit card receivables Commercial and industrial loans Seller’s Interests in Institution's Own Securitizations – Carried as Securities Home equity loans Credit card receivables Commercial and industrial loans Assets Sold with Recourse and Not Securitized Number of institutions reporting asset sales Outstanding Principal Balance by Asset Type 1-4 family residential loans All other loans, leases, and other assets Total sold and not securitized 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 64 65 67 66 % Less 2nd Change Than Quarter 17Q2$100 2017 18Q2 Million $100 Million to $1 Billion $1 Billion to $10 Billion $10 Billion to $250 Billion Greater Than $250 Billion 32 7 68 -5.9 0 5 20 $560,132 $571,205 $590,211 $606,755 $620,524 16 18 20 21 22 26 4,781 4,553 16,114 17,306 4,647 8,221 9,770 10,494 11,566 1,887 2,914 3,052 3,610 3,778 271 381 380 316 309 67,948 62,410 60,869 55,105 54,266 581,566 649,931 668,855 692,414 707,771 -9.7 -27.3 -99.8 -59.8 -50.1 -12.3 25.2 -17.8 $0 0 0 0 0 0 0 0 $805 0 0 0 0 0 9 0 $16,087 0 0 0 0 0 10,650 0 $85,783 $457,457 16 0 0 26 4,647 0 845 1,042 0 271 3,736 53,553 69,217 512,349 1,327 0 0 125 82 0 1,266 2,565 1,527 0 392 164 88 0 1,194 3,365 1,716 0 353 147 86 0 1,131 3,431 1,718 0 1,405 161 87 0 908 4,279 1,750 0 1,508 183 96 0 874 4,410 -24.2 0.0 -100.0 -31.7 -14.6 0.0 44.9 -41.8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 29 0 0 0 0 0 171 0 924 0 0 125 0 0 0 1,015 373 0 0 0 82 0 1,095 1,550 144 143 215 246 172 -16.3 0 0 0 19 125 3.5 8.4 0.0 1.8 4.7 0.0 0.3 3.2 3.2 9.5 0.3 1.6 4.5 0.0 0.3 2.9 4.7 9.7 0.3 2.1 4.7 0.0 0.5 4.2 4.3 5.9 0.4 1.6 4.2 0.0 0.7 3.9 3.4 8.2 0.4 1.4 4.1 0.0 1.3 3.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.6 0.0 0.0 0.0 0.0 0.0 0.5 0.0 3.0 8.4 0.0 1.8 2.2 0.0 0.8 2.7 3.7 0.0 0.0 0.0 6.8 0.0 0.3 3.3 1.2 42.6 0.0 0.4 6.0 0.0 0.7 1.2 1.4 44.1 0.2 0.3 4.3 0.0 1.2 1.4 1.6 45.7 0.2 0.4 4.6 0.0 1.2 1.5 1.3 47.1 0.3 0.3 4.2 0.0 1.2 1.2 1.3 47.4 0.3 0.3 4.0 0.0 1.4 1.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.4 0.0 1.6 42.6 0.0 0.4 1.7 0.0 0.1 1.2 1.2 0.0 0.0 0.0 9.5 0.0 0.8 1.2 -0.1 11.4 3.8 0.6 0.6 0.0 0.3 0.0 -0.1 4.9 0.3 0.4 0.3 0.0 0.0 -0.1 0.2 11.7 1.2 1.2 1.5 0.0 1.7 0.4 0.2 8.7 1.2 0.8 1.0 0.0 1.3 0.3 0.1 5.9 0.8 0.5 0.6 0.0 0.7 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.0 11.4 0.0 0.6 0.4 0.0 0.2 0.1 -0.1 0.0 3.8 0.0 0.7 0.0 0.3 0.0 0 0 306 0 1,730 426 0 2,460 463 0 8,171 401 0 7,260 334 0.0 -100.0 -8.4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 306 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0 0.0 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 475 463 509 511 534 -11.0 14 197 200 56 8 24,763 109,138 133,901 24,532 102,630 127,163 180,648 101,529 282,177 26,404 97,455 123,859 26,211 95,098 121,309 -5.5 14.8 10.4 161 0 161 5,237 20 5,257 11,113 201 11,314 6,219 34,650 40,869 2,033 74,267 76,300 Maximum Credit Exposure by Asset Type 1-4 family residential loans All other loans, leases, and other assets Total credit exposure 7,659 30,545 38,204 7,987 28,449 36,436 162,126 28,110 190,236 7,895 27,057 34,952 7,932 26,299 34,231 -3.4 16.1 11.6 41 0 41 753 20 773 3,452 64 3,517 2,502 10,082 12,584 910 20,379 21,288 Support for Securitization Facilities Sponsored by Other Institutions Number of institutions reporting securitization facilities sponsored by others Total credit exposure Total unused liquidity commitments 45 26,570 1,031 46 29,676 1,148 49 32,237 1,259 50 34,334 1,298 52 34,998 1,150 -13.5 -24.1 -10.3 1 0 0 11 0 0 15 0 0 12 1,244 323 6 25,326 708 5,918,727 6,034,343 5,996,389 5,928,869 5,946,667 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 (%)** -0.5 4,608 183,993 16,069 15,554 16,909 16,618 16,698 -3.8 0 0 307,947 1,353,138 4,069,041 0 0 16,069 30,593 2,805 -49 3.7 29,497 3,655 151 4.2 26,928 2,355 131 13.9 27,458 2,306 395 4.5 28,342 2,167 472 4.6 7.9 29.4 -110.4 0.0 0 7 0 0.0 0 242 1 0.0 0 227 3 0.0 2,811 1,110 -71 2.2 27,782 1,219 18 6.5 * 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 QUARTERLY BANKING PROFILE COMMUNITY BANK PERFORMANCE Community banks are identified based on criteria defined in the FDIC’s Community Banking Study. When comparing community bank performance across quarters, prior-quarter dollar amounts are based on community banks designated as such in the current quarter, adjusted for mergers. In contrast, prior-quarter performance ratios are based on community banks designated during the previous quarter. Net Income Growth Reaches 21.1 Percent Annually on Higher Net Operating Revenue and Lower Effective Tax Rate Loan and Lease Growth Remains Strong at 7 Percent Year Over Year Net Interest Margin Expands 8 Basis Points to 3.69 Percent Noncurrent and Net Charge-Off Rates Remain Low Most Community Banks Report Increased Net Income Year Over Year More than seven out of ten community banks (73 percent) reported higher net income compared with a year earlier. Reports from 5,111 insured community banks reflected net income of $6.5 billion—up $1.1 billion (21.1 percent) from second quarter 2017—as higher net operating revenue and lower income tax expenses offset an increase in noninterest expense.1 Absent the benefits of a lower corporate tax rate, estimated quarterly net income would have been $6.1 billion—up 15.4 percent from the $5.3 billion reported in second quarter 2017.2 The pretax return on assets rose from 1.33 percent to 1.41 percent between first and second quarter 2018 and was up 5 basis points since second quarter 2017. Loan-loss provisions declined by $193.5 million (22.5 percent), while noninterest expenses were $934.2 million (6.6 percent) higher. 1 The number of insured community banks reflects one new community bank charter and no community bank failures during the second quarter. 2 This estimate of net income applies the average quarterly tax rate at community banks between fourth quarter 2011 and third quarter 2017 to income before taxes and discontinued operations. Chart 1 Chart 2 Contributors to the Year-Over-Year Change in Income Quarterly Average Net Interest Margin FDIC-Insured Community Banks Positive Factor $ Billions 2.0 $1.13 $1.56 -$0.19 $0.20 $0.93 Negative Factor -$0.07 Percent 4.5 -$0.33 1.5 4.0 1.0 3.5 3.69% 0.5 3.0 0.0 -0.5 Community Banks Industry 3.38% 2.5 +21% +9% Net Income Net Interest Income Source: FDIC. -23% +4% +7% Loan Loss Noninterest Noninterest Provisions Income Expense -70% -20% Realized Gains on Securities Income Taxes 2.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: FDIC. FDIC QUARTERLY 15 2018 • Volume 12 • Numb er 3 Higher Net Interest Income Lifts Net Operating Revenue Net operating revenue rose by $1.8 billion (8 percent) from second quarter 2017, led by increases in net interest income and noninterest income. More than four out of five community banks (84.9 percent) reported higher net interest income, which totaled $19 billion and increased by $1.6 billion (9 percent) from the year before. Growth in non 1–4 family real estate loan income (up $1.2 billion or 14.7 percent) contributed most to this increase.3 Increases in earning asset yields exceeded increases in funding costs, compared with the same period last year, causing an 8 basis point expansion in the average net interest margin (NIM) at community banks to 3.69 percent. This ratio was 35 basis points higher than that of noncommunity banks, although the distance between the two ratios continued to contract. More Than Half of Community Banks Report Higher Noninterest Income Noninterest income rose $201.9 million (4.5 percent) to $4.7 billion since second quarter 2017, despite a $28 million (5.61 percent) decline in net gains on loan sales and sales of other assets. Community banks continue to report a much lower ratio of noninterest income as a percentage of average assets (0.86 percent) compared with that of noncommunity banks (1.65 percent). More than half of community banks (55.3 percent) reported higher noninterest income compared with second quarter 2017. Noninterest Expense Up on Higher Payroll Expense as Assets Per Employee Rises Higher salary and employee benefits of $589.1 million (up 7.3 percent) pushed noninterest expense up $934.2 million (6.6 percent) since second quarter 2017. Salary and employee benefit growth accompanied an increase in the number of full-time equivalent employees, which increased by 10,923 (2.7 percent) during the year ending second quarter 2018, while average assets per employee rose by 3.9 percent to $5.3 million. 3 Non loans. 1–4 family real estate loans include construction and development, farmland, multifamily, and nonfarm nonresidential Chart 3 Chart 4 Noncurrent Loan Rates for FDIC-Insured Community Banks Change in Loan Balances and Unused Commitments FDIC-Insured Community Banks Change 2Q 2018 vs. 2Q 2017 Change 2Q 2018 vs. 1Q 2018 $ Billions 36.2 Percent of Loan Portfolio Noncurrent 14 C&D Loans Nonfarm Nonresidential RE 1–4 Family RE C&I Loans Home Equity Farm Loans 12 10 18.8 15.4 9.0 6.8 8 7.9 11.3 9.4 2.6 Nonfarm Nonresidential RE Source: FDIC. C&I Loans 1–4 Family Residential RE Loan Balances 16 FDIC QUARTERLY C&D Loans 0.6 3.1 Agricultural Production Loans 4.4 CRE & C&D 6 7.8 1.4 C&I Loans Unused Commitments 4 2 0 2010 2011 Source: FDIC. 2012 2013 2014 2015 2016 2017 2018 QUARTERLY BANKING PROFILE Community Bank Loan and Lease Growth Rate Outpaces That of the Industry Loan and lease balances increased by $35.8 billion (2.3 percent) during the quarter to $1.6 trillion. Among the categories that led quarterly loan growth were nonfarm nonresidential loans, up $8.9 billion or 2 percent; 1-4 family residential real estate loans, up $7.9 billion or 2 percent; commercial and industrial (C&I) loans, up $6.8 billion or 3.4 percent; and construction and development (C&D) loans, up $2.6 billion or 2.4 percent. Loan and lease balances rose by $103.2 billion (7 percent) in the past 12 months, exceeding the growth rate for noncommunity banks by more than 3 percentage points. Nearly eight out of ten community banks (79 percent) reported higher loan balances compared with second quarter 2017, and more than six out of ten community banks (60.5 percent) increased small loans to businesses. Community banks added $9 billion (3.1 percent) in small loans to businesses since second quarter 2017 to a collective total of $297 billion. This figure represents 42 percent of the industry total. More than seven out of ten community banks (78.5 percent) reported annual loan and lease growth. The following categories led annual loan growth: nonfarm nonresidential loans, up $36.2 billion or 8.4 percent; 1–4 family residential loans, up $18.8 billion or 4.9 percent; C&I loans, up $15.4 billion or 7.9 percent; C&D loans, up $11.3 billion or 11.6 percent; and multifamily residential loans, up $10.1 billion or 9.4 percent. Unused loan commitments of $303.3 billion were up $25.2 billion (9.1 percent) during the year ending second quarter 2018. Commitments to lend against commercial real estate properties—including C&D properties—increased by $9.4 billion (11.4 percent) from a year earlier. Noncurrent Loan Balances Shrink Despite Slight Increase in Noncurrent Farm Loans Total noncurrent loan and lease balances declined by $229.7 million (1.7 percent) quarterly, supporting a 3 basis point decline in the noncurrent rate to 0.82 percent—29 basis points below that of noncommunity banks. As a result, six out of ten community banks (63.2 percent) reported a lower or unchanged noncurrent loan rate compared with the previous quarter. The noncurrent rate for all major loan categories declined compared with first quarter 2018; C&I loans showed the most improvement—as the noncurrent rate for this category decreased by 10 basis points during the quarter. The noncurrent rate for farm loans increased 6 basis points during the quarter to 1.15 percent because of increases in the noncurrent rates for farmland loans (up 10 basis points to 1.38 percent) and agricultural production loans (up 3 basis points to 0.82 percent). Net Charge-Off Rates Remain Relatively Low Community banks reported a 3 basis point decline in the net charge-off rate to 0.15 percent during the year ending second quarter 2018—a rate that remained well below that of noncommunity banks (0.54 percent). Despite an overall decline, the net charge-off rates for 1–4 family loans (up 6 basis points) and C&D loans (up 3 basis points) increased year over year. Community Bank Equity Capital Up Since First Quarter Equity capital totaled $248 billion, up $4.1 billion (1.7 percent) during the quarter. An increase in risk-weighted assets slightly outpaced the rate of capital formation during the quarter, causing a small decline in the tier 1 risk-based capital ratio (down 3 basis points to 14.67 percent) and the total risk-based capital ratio (down 4 basis points to 15.72 percent). However, the leverage capital ratio increased 7 basis points to 10.97 percent. Author: Erica Jill Tholmer Senior Financial Analyst Division of Insurance and Research (202) 898-3935 FDIC QUARTERLY 17 2018 • Volume 12 • Numb er 3 TABLE I-B. Selected Indicators, FDIC-Insured Community Banks Return on assets (%) Return on equity (%) Core capital (leverage) ratio (%) Noncurrent assets plus other real estate owned to assets (%) Net charge-offs to loans (%) Asset growth rate (%) Net interest margin (%) Net operating income growth (%) Number of institutions reporting Percentage of unprofitable institutions (%) 2018* 2017* 2017 2016 2015 2014 2013 1.14 10.26 10.97 0.74 0.14 0.70 3.66 14.30 5,111 3.89 1.03 9.23 10.82 0.86 0.15 2.78 3.58 7.37 5,338 4.33 0.96 8.65 10.80 0.78 0.16 1.17 3.62 0.14 5,228 5.74 0.99 8.81 10.69 0.94 0.16 2.97 3.57 2.42 5,461 4.65 0.99 8.85 10.67 1.07 0.15 2.71 3.57 9.54 5,735 5.02 0.93 8.45 10.57 1.34 0.21 2.21 3.61 4.81 6,037 6.44 0.90 8.27 10.43 1.73 0.32 0.39 3.59 14.64 6,307 8.40 * Through June 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending June 30. TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks 2nd Quarter 2018 1st Quarter 2018 2nd Quarter 2017 %Change 17Q2-18Q2 5,111 415,507 5,170 412,810 5,338 425,216 -4.3 -2.3 $2,221,502 1,216,862 400,062 468,396 108,623 48,773 210,271 62,699 1,885 52,103 39,711 701 1,580,945 18,233 1,562,712 402,667 3,573 15,200 237,351 $2,207,543 1,199,955 394,746 461,534 106,251 48,596 205,409 61,526 1,925 48,602 38,169 702 1,552,960 18,187 1,534,773 406,458 3,783 14,185 248,344 $2,206,024 1,185,836 396,680 453,545 102,498 49,596 205,864 60,779 1,988 51,397 40,442 696 1,543,622 18,326 1,525,296 423,934 4,448 14,432 237,913 0.7 2.6 0.9 3.3 6.0 -1.7 2.1 3.2 -5.2 1.4 -1.8 0.7 2.4 -0.5 2.5 -5.0 -19.7 5.3 -0.2 Total liabilities and capital Deposits Domestic office deposits Foreign office deposits Brokered deposits Estimated insured deposits Other borrowed funds Subordinated debt All other liabilities Total equity capital (includes minority interests) Bank equity capital 2,221,502 1,818,268 1,817,682 587 74,850 1,335,036 138,438 629 16,072 248,095 247,978 2,207,543 1,817,595 1,816,806 789 93,002 1,339,087 129,042 629 15,579 244,698 244,583 2,206,024 1,802,189 1,801,423 766 86,752 1,339,266 139,055 759 15,849 248,172 248,045 0.7 0.9 0.9 -23.4 -13.7 -0.3 -0.4 -17.2 1.4 0.0 0.0 Loans and leases 30-89 days past due Noncurrent loans and leases Restructured loans and leases Mortgage-backed securities Earning assets FHLB Advances Unused loan commitments Trust assets Assets securitized and sold Notional amount of derivatives 7,437 12,913 6,558 177,154 2,072,207 115,387 303,314 293,501 9,544 78,099 8,970 13,198 6,622 174,963 2,062,765 106,697 298,830 303,544 19,462 70,273 7,309 14,464 7,443 181,021 2,056,176 112,725 290,478 259,882 21,310 69,794 1.8 -10.7 -11.9 -2.1 0.8 2.4 4.4 12.9 -55.2 11.9 (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 * See Notes to Users for explanation. 18 FDIC QUARTERLY First Half 2018 First Half 2017 %Change 2nd Quarter 2018 2nd Quarter 2017 %Change 17Q2-18Q2 $43,779 6,399 37,380 1,475 9,212 30,017 91 2,540 -162 12,490 12,481 1,077 5,291 7,190 12,577 $41,133 4,951 36,183 1,549 9,508 29,753 228 3,443 -1 11,172 11,161 1,093 5,103 6,058 11,003 6.4 29.3 3.3 -4.8 -3.1 0.9 -59.9 -26.2 N/M 11.8 11.8 -1.4 3.7 18.7 14.3 $22,381 3,401 18,981 666 4,715 15,126 30 1,314 -163 6,457 6,452 587 2,903 3,549 6,597 $20,995 2,575 18,420 876 4,844 15,026 102 1,746 -7 5,711 5,703 695 2,541 3,162 5,634 6.6 32.1 3.0 -23.9 -2.7 0.7 -70.8 -24.8 N/M 13.1 13.1 -15.6 14.3 12.2 17.1 N/M - Not Meaningful QUARTERLY BANKING PROFILE TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks Prior Periods Adjusted for Mergers 2nd Quarter 2018 1st Quarter 2018 2nd Quarter 2017 %Change 17Q2-18Q2 5,111 415,507 5,110 409,455 5,104 404,584 0.1 2.7 $2,221,502 1,216,862 400,062 468,396 108,623 48,773 210,271 62,699 1,885 52,103 39,711 701 1,580,945 18,233 1,562,712 402,667 3,573 15,200 237,351 $2,198,222 1,193,695 392,154 459,413 106,029 48,437 203,451 61,487 1,887 49,035 38,204 704 1,545,167 18,120 1,527,047 405,948 3,785 14,372 247,070 $2,114,530 1,135,133 381,228 432,226 97,291 47,848 194,838 59,850 1,910 51,505 37,058 687 1,477,697 17,702 1,459,995 408,549 4,320 12,888 228,778 5.1 7.2 4.9 8.4 11.6 1.9 7.9 4.8 -1.3 1.2 7.2 2.0 7.0 3.0 7.0 -1.4 -17.3 17.9 3.7 Total liabilities and capital Deposits Domestic office deposits Foreign office deposits Brokered deposits Estimated insured deposits Other borrowed funds Subordinated debt All other liabilities Total equity capital (includes minority interests) Bank equity capital 2,221,502 1,818,268 1,817,682 587 74,850 1,335,036 138,438 629 16,072 248,095 247,978 2,198,222 1,811,164 1,810,375 789 93,063 1,331,919 126,977 629 15,470 243,981 243,867 2,114,530 1,733,087 1,732,640 447 83,305 1,292,104 128,671 575 15,031 237,166 237,059 5.1 4.9 4.9 31.2 -10.1 3.3 7.6 9.4 6.9 4.6 4.6 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 7,437 12,913 6,558 177,154 2,072,207 115,387 303,314 293,501 9,544 78,099 8,940 13,143 6,594 175,419 2,053,971 104,360 298,715 288,874 19,462 71,145 7,081 14,011 7,254 172,770 1,971,330 104,028 278,113 264,808 21,310 67,398 5.0 -7.8 -9.6 2.5 5.1 10.9 9.1 10.8 -55.2 15.9 (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 * See Notes to Users for explanation. First Half 2018 First Half 2017 %Change 2nd Quarter 2018 2nd Quarter 2017 %Change 17Q2-18Q2 $43,779 6,399 37,380 1,475 9,212 30,017 91 2,540 -162 12,490 12,481 1,077 5,291 7,190 12,577 $38,823 4,629 34,194 1,504 8,873 28,095 224 3,208 -1 10,482 10,473 1,052 4,594 5,880 10,315 12.8 38.2 9.3 -1.9 3.8 6.8 -59.3 -20.8 N/M 19.2 19.2 2.4 15.2 22.3 21.9 $22,381 3,401 18,981 666 4,715 15,126 30 1,314 -163 6,457 6,452 587 2,903 3,549 6,597 $19,829 2,409 17,420 860 4,513 14,191 99 1,643 -7 5,332 5,326 675 2,309 3,017 5,257 12.9 41.2 9.0 -22.5 4.5 6.6 -69.9 -20.0 N/M 21.1 21.1 -13.1 25.7 17.6 25.5 N/M - Not Meaningful FDIC QUARTERLY 19 2018 • Volume 12 • Numb er 3 TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks Second Quarter 2018 (dollar figures in millions) Geographic Regions* All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco 5,111 415,507 585 86,763 591 46,283 1,127 86,904 1,359 71,955 1,130 90,794 319 32,808 $2,221,502 1,216,862 400,062 468,396 108,623 48,773 210,271 62,699 1,885 52,103 39,711 701 1,580,945 18,233 1,562,712 402,667 3,573 15,200 237,351 $617,166 386,896 141,360 138,760 25,380 16,395 52,271 15,384 422 609 11,874 180 466,854 4,615 462,239 95,105 623 5,067 54,131 $219,474 121,777 39,712 52,235 13,701 6,354 17,469 6,630 117 1,396 2,808 115 149,966 1,714 148,252 40,094 815 1,277 29,035 $398,591 208,905 71,456 76,947 15,378 10,558 41,429 12,327 364 8,386 7,289 53 278,282 3,209 275,073 77,243 604 2,785 42,885 $362,015 177,098 53,126 59,802 15,603 5,418 37,616 10,834 558 29,068 6,760 98 261,278 3,455 257,822 66,629 575 2,168 34,820 $423,481 210,465 67,108 86,718 29,282 5,007 42,245 12,870 224 9,648 7,507 126 282,609 3,449 279,160 89,193 774 2,686 51,668 $200,775 111,722 27,300 53,934 9,278 5,040 19,241 4,653 200 2,997 3,473 129 141,957 1,791 140,165 34,402 182 1,215 24,811 Total liabilities and capital Deposits Domestic office deposits Foreign office deposits Brokered deposits Estimated insured deposits Other borrowed funds Subordinated debt All other liabilities Total equity capital (includes minority interests) Bank equity capital 2,221,502 1,818,268 1,817,682 587 74,850 1,335,036 138,438 629 16,072 248,095 247,978 617,166 485,539 485,026 513 25,629 343,720 55,796 508 5,741 69,582 69,512 219,474 184,692 184,692 0 4,605 135,852 9,090 15 1,441 24,235 24,231 398,591 328,242 328,195 47 13,752 259,025 23,199 39 2,676 44,435 44,415 362,015 298,578 298,578 0 13,272 231,526 21,368 10 2,072 39,987 39,986 423,481 354,712 354,712 0 9,337 254,383 19,299 42 2,499 46,929 46,907 200,775 166,505 166,478 27 8,255 110,529 9,686 15 1,642 22,927 22,927 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 7,437 12,913 6,558 177,154 2,072,207 115,387 303,314 293,501 9,544 78,099 1,708 4,290 2,046 54,222 578,350 50,156 83,154 70,015 5,357 36,246 856 1,247 730 17,104 202,867 7,350 26,148 8,562 72 5,742 1,377 2,356 1,567 30,702 371,434 18,634 56,290 73,403 1,105 15,410 1,316 1,978 936 22,980 338,289 16,199 53,756 87,874 2,686 10,320 1,772 2,333 877 35,112 392,816 15,782 52,976 44,947 153 7,502 407 710 402 17,034 188,452 7,267 30,990 8,700 170 2,879 $22,381 3,401 18,981 666 4,715 15,126 30 1,314 -163 6,457 6,452 587 2,903 3,549 6,597 $5,980 1,144 4,837 165 986 3,748 33 430 0 1,514 1,512 119 482 1,031 1,486 $2,246 297 1,949 58 447 1,633 -4 116 0 585 585 34 276 310 589 $3,842 541 3,301 89 1,198 2,897 3 251 -164 1,100 1,098 216 670 428 1,262 $3,732 581 3,151 135 778 2,440 4 169 0 1,189 1,189 73 600 589 1,186 $4,448 582 3,866 160 968 3,047 -5 184 0 1,437 1,435 107 607 828 1,441 $2,133 255 1,878 59 338 1,361 -1 163 1 632 632 37 269 363 633 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 * See Table V-A for explanation. ** See Notes to Users for explanation. 20 FDIC QUARTERLY QUARTERLY BANKING PROFILE Table IV-B. Second Quarter 2018, FDIC-Insured Community Banks All Community Banks Performance ratios (annualized, %) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Loan and lease loss provision to assets Net operating income to assets Pretax return on assets Return on assets Return on equity Net charge-offs to loans and leases Loan and lease loss provision to net charge-offs Efficiency ratio Net interest income to operating revenue % of unprofitable institutions % of institutions with earnings gains 2nd Quarter 2018 4.35 0.66 3.69 0.86 2.75 0.12 1.20 1.41 1.17 10.53 0.15 113.55 63.52 80.10 3.99 73.35 1st Quarter 2018 4.23 0.60 3.64 0.83 2.75 0.15 1.10 1.33 1.11 9.98 0.13 164.17 64.82 80.43 4.24 73.21 Second Quarter 2018, Geographic Regions* New York 4.18 0.80 3.38 0.65 2.46 0.11 0.97 1.27 0.99 8.81 0.10 138.08 64.06 83.06 4.10 78.63 Atlanta 4.49 0.59 3.89 0.83 3.02 0.11 1.09 1.30 1.08 9.87 0.09 169.19 67.86 81.34 5.08 78.00 New York 4.12 0.75 3.36 0.64 2.47 0.16 0.90 1.18 0.92 8.22 0.16 137.02 64.85 83.12 4.62 80.85 Atlanta 4.42 0.56 3.86 0.82 3.00 0.11 1.06 1.28 1.06 9.66 0.09 179.18 68.08 81.31 5.92 78.17 Chicago 4.17 0.59 3.58 1.21 2.93 0.09 1.28 1.36 1.11 9.98 0.31 41.32 64.02 73.37 5.32 71.34 Kansas City 4.43 0.69 3.74 0.86 2.71 0.15 1.32 1.51 1.32 11.98 0.11 184.54 61.72 80.20 2.94 70.05 Dallas 4.55 0.60 3.95 0.92 2.89 0.15 1.37 1.54 1.36 12.37 0.15 149.72 62.79 79.98 2.83 73.54 San Francisco 4.55 0.54 4.01 0.68 2.73 0.12 1.27 1.60 1.27 11.16 0.11 159.48 61.15 84.74 5.64 75.55 Dallas 4.47 0.56 3.91 0.90 2.89 0.14 1.33 1.50 1.32 12.02 0.14 150.07 63.48 80.06 2.65 76.02 San Francisco 4.50 0.51 3.99 0.67 2.71 0.13 1.26 1.60 1.26 11.17 0.10 195.83 60.93 84.81 5.33 78.37 Table V-B. First Half 2018, FDIC-Insured Community Banks All Community Banks Performance ratios (%) Yield on earning assets Cost of funding earning assets Net interest margin Noninterest income to assets Noninterest expense to assets Loan and lease loss provision to assets Net operating income to assets Pretax return on assets Return on assets Return on equity Net charge-offs to loans and leases Loan and lease loss provision to net charge-offs Efficiency ratio Net interest income to operating revenue % of unprofitable institutions % of institutions with earnings gains First Half 2018 First Half 2017 4.29 4.07 0.63 0.49 3.66 3.58 0.84 0.88 2.75 2.74 0.13 0.14 1.15 1.01 1.37 1.35 1.14 1.03 10.26 9.23 0.14 0.15 136.97 141.75 64.12 64.81 80.23 79.19 3.89 4.33 75.17 60.72 First Half 2018, Geographic Regions* Chicago 4.14 0.58 3.57 1.19 2.94 0.09 1.22 1.40 1.14 10.23 0.19 71.04 64.80 73.68 5.15 72.05 Kansas City 4.35 0.65 3.70 0.84 2.69 0.14 1.28 1.46 1.28 11.59 0.10 194.89 62.43 80.44 2.35 72.55 * See Table V-A for explanation. FDIC QUARTERLY 21 2018 • Volume 12 • Numb er 3 Table VI-B. Loan Performance, FDIC-Insured Community Banks Geographic Regions* June 30, 2018 All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco Percent of Loans 30-89 Days Past Due All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.43 0.40 0.30 0.11 0.41 0.67 0.45 1.30 2.13 1.27 0.48 0.47 0.34 0.34 0.23 0.06 0.43 0.54 0.28 1.46 2.61 1.43 0.23 0.37 0.53 0.38 0.33 0.26 0.46 0.88 0.56 1.48 1.08 1.49 0.35 0.57 0.50 0.41 0.35 0.19 0.40 0.75 0.35 0.83 1.19 0.82 0.51 0.49 0.46 0.44 0.36 0.29 0.32 0.61 0.53 0.89 3.35 0.75 0.56 0.50 0.57 0.52 0.37 0.09 0.54 0.90 0.57 1.98 1.16 1.99 0.45 0.63 0.20 0.20 0.18 0.02 0.28 0.27 0.55 0.82 1.18 0.81 0.53 0.29 Percent of Loans Noncurrent** All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.80 0.76 0.69 0.20 0.49 1.05 0.96 0.62 1.25 0.60 0.78 0.82 0.93 0.75 0.82 0.18 0.60 1.36 1.10 0.56 2.11 0.52 0.36 0.92 0.87 1.18 0.67 0.27 0.50 1.07 0.66 0.68 0.52 0.68 0.58 0.83 0.87 0.83 0.80 0.31 0.51 1.01 0.87 0.31 0.99 0.29 0.89 0.85 0.72 0.71 0.65 0.20 0.27 0.61 0.92 0.40 1.29 0.35 0.87 0.76 0.76 0.50 0.68 0.31 0.38 0.96 1.09 1.22 0.48 1.23 0.73 0.83 0.42 0.89 0.27 0.03 0.43 0.58 0.84 0.34 1.06 0.31 1.05 0.50 Percent of Loans Charged-Off (net, YTD) All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases 0.03 -0.01 0.03 -0.01 0.05 0.07 0.43 1.19 7.94 0.97 0.16 0.14 0.03 0.03 0.04 0.00 0.05 0.04 0.86 0.92 3.45 0.85 0.13 0.16 0.01 -0.02 0.01 -0.02 0.04 0.03 0.36 0.80 1.00 0.80 0.20 0.09 0.11 -0.06 0.05 -0.04 0.15 0.25 0.17 1.58 10.40 1.29 0.23 0.19 0.02 -0.06 0.03 -0.01 -0.01 0.03 0.19 1.10 15.54 0.29 0.13 0.10 0.02 0.03 0.02 0.02 0.04 0.02 0.49 1.01 1.78 0.99 0.12 0.14 -0.03 -0.12 -0.01 0.00 -0.04 -0.03 0.19 2.27 2.62 2.26 0.31 0.10 Loans Outstanding (in billions) All loans secured by real estate Construction and development Nonfarm nonresidential Multifamily residential real estate Home equity loans Other 1-4 family residential Commercial and industrial loans Loans to individuals Credit card loans Other loans to individuals All other loans and leases (including farm) Total loans and leases $1,216.9 108.6 468.4 117.0 48.8 400.1 210.3 62.7 1.9 60.8 91.8 1,581.6 $386.9 25.4 138.8 62.5 16.4 141.4 52.3 15.4 0.4 15.0 12.5 467.0 $121.8 13.7 52.2 5.4 6.4 39.7 17.5 6.6 0.1 6.5 4.2 150.1 $208.9 15.4 76.9 17.5 10.6 71.5 41.4 12.3 0.4 12.0 15.7 278.3 $177.1 15.6 59.8 10.4 5.4 53.1 37.6 10.8 0.6 10.3 35.8 261.4 $210.5 29.3 86.7 8.6 5.0 67.1 42.2 12.9 0.2 12.6 17.2 282.7 $111.7 9.3 53.9 12.7 5.0 27.3 19.2 4.7 0.2 4.5 6.5 142.1 Memo: Unfunded Commitments (in millions) Total Unfunded Commitments Construction and development: 1-4 family residential Construction and development: CRE and other Commercial and industrial 303,314 25,908 64,432 95,075 83,154 5,457 20,426 25,962 26,148 3,397 6,140 6,966 56,290 3,267 10,695 19,410 53,756 3,462 8,540 16,276 52,976 7,407 12,980 16,468 30,990 2,918 5,652 9,994 * See Table V-A for explanation. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. 22 FDIC QUARTERLY QUARTERLY BANKING PROFILE Insurance Fund Indicators Deposit Insurance Fund Increases by $2.5 Billion DIF Reserve Ratio Rises 3 Basis Points to 1.33 Percent The Deposit Insurance Fund (DIF) balance increased by $2.5 billion, to $97.6 billion, during the second quarter. Assessment income of $2.6 billion, which includes temporary assessment surcharges on large banks, drove the fund balance increase. Interest on investments of $381 million, a negative provision for insurance losses of $141 million, and other miscellaneous income of $3 million also added to the fund balance. Operating expenses of $445 million and unrealized losses on available-for-sale securities of $162 million partly offset the increase in the fund balance. The deposit insurance assessment base—average consolidated total assets minus average tangible equity—increased by 0.3 percent in the second quarter and by 2.8 percent over 12 months.1,2 Total estimated insured deposits increased by 0.3 percent in the second quarter of 2018 and by 4.5 percent year over year. The DIF’s reserve ratio (the fund balance as a percent of estimated insured deposits) was 1.33 percent on June 30, up from 1.30 percent at March 31, 2018, and 1.24 percent on June 30 of last year. The June 30, 2018, reserve ratio of 1.33 percent is the highest since March 31, 2004, when the reserve ratio was also 1.33 percent.3 By law, the reserve ratio must reach a minimum of 1.35 percent by September 30, 2020. The law also requires that, in setting assessments, the FDIC offset the effect of the increase in the reserve ratio from 1.15 percent to 1.35 percent on banks with less than $10 billion in assets. To satisfy these requirements, large banks are subject to a temporary surcharge of 4.5 basis points of their assessment base, after making certain adjustments.45 Surcharges began in the third quarter of 2016 and will continue through the quarter in which the reserve ratio first meets or exceeds 1.35 percent. If, however, the reserve ratio has not reached 1.35 percent by the end of 2018, large banks will pay a shortfall assessment in early 2019 to close the gap. Small banks will receive credits to offset the portion of their assessments that help to raise the reserve ratio from 1.15 percent to 1.35 percent. When the reserve ratio is at or above 1.38 percent, the FDIC will automatically apply a small bank’s credits to reduce its regular assessment up to the entire amount of the assessment. Author: Kevin Brown Senior Financial Analyst Division of Insurance and Research (202) 898-6817 1 There are additional adjustments to the assessment base for banker’s banks and custodial banks. for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition to insured commercial banks and savings institutions. 3 The reserve ratio for March 31, 2004, represents the combined balances of the Bank Insurance Fund and Savings Association Insurance Fund as a percent of estimated insured deposits. 4 Large banks are generally those with assets of $10 billion or more. 5 The assessment base for the surcharge is a large bank’s regular assessment base reduced by $10 billion (and subject to additional adjustment for affiliated banks). 2 Figures FDIC QUARTERLY 23 2018 • Volume 12 • Numb er 3 Table I-C. Insurance Fund Balances and Selected Indicators Deposit Insurance Fund* (dollar figures in millions) 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 2nd Quarter 2017 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016 4th Quarter 2015 3rd Quarter 2015 2nd Quarter 2015 Beginning Fund Balance $95,072 $92,747 $90,506 $87,588 $84,928 $83,162 $80,704 $77,910 $75,120 $72,600 $70,115 $67,589 $65,296 2,598 2,850 2,656 2,568 2,634 2,737 2,688 2,643 2,328 2,328 2,160 2,170 2,328 381 338 305 274 251 227 189 171 164 147 128 122 113 0 445 0 433 0 443 0 404 0 450 0 442 0 437 0 422 0 441 0 415 0 447 0 410 0 434 -141 -65 -203 -512 -233 765 -332 -566 -627 -43 -930 -578 -317 3 1 3 1 4 2 3 3 2 5 12 2 3 -162 2,516 -496 2,325 -481 2,242 -33 2,918 -12 2,660 7 1,766 -317 2,457 -167 2,794 110 2,790 412 2,520 -298 2,485 64 2,526 -34 2,293 97,588 95,072 92,747 90,506 87,588 84,928 83,162 80,704 77,910 75,120 72,600 70,115 67,589 11.42 11.95 11.53 12.14 12.42 13.06 14.55 15.10 15.27 15.05 15.64 29.08 32.37 1.33 1.30 1.30 1.28 1.24 1.20 1.20 1.18 1.17 1.13 1.11 1.09 1.07 7,358,053 7,334,746 7,150,781 7,094,247 7,042,281 7,075,301 6,910,937 6,813,258 6,672,294 6,659,996 6,519,715 6,406,678 6,333,620 4.48 3.67 3.47 4.12 5.55 6.24 6.00 6.35 5.35 5.15 5.23 4.61 3.91 Changes in Fund Balance: Assessments earned Interest earned on investment securities Realized gain on sale of investments Operating expenses Provision for insurance losses All other income, net of expenses Unrealized gain/(loss) on available-for-sale securities** Total fund balance change Ending Fund Balance Percent change from four quarters earlier Reserve Ratio (%) Estimated Insured Deposits Percent change from four quarters earlier Domestic Deposits Percent change from four quarters earlier 12,280,939 12,305,835 12,129,503 11,966,478 11,827,933 11,856,691 11,693,371 11,506,877 11,242,960 11,156,523 10,952,922 10,698,306 10,632,635 Assessment Base*** Percent change from four quarters earlier 15,111,840 15,067,636 15,001,495 14,834,520 14,703,227 14,621,071 14,563,563 14,383,166 14,194,203 13,994,619 13,833,140 13,662,743 13,589,490 3.83 Number of Institutions Reporting 3.79 3.73 3.99 5.20 6.28 6.76 7.56 5.74 5.06 5.21 4.75 5.28 2.78 3.05 3.01 3.14 3.59 4.48 5.28 5.27 4.45 3.41 3.65 4.19 5.33 5,551 5,616 5,679 5,747 5,796 5,865 5,922 5,989 6,067 6,131 6,191 6,279 6,357 DIF Reserve Ratios 1.33 Deposit Insurance Fund Balance and Insured Deposits ($ Millions) 6/18 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 12/17 3/18 6/18 Percent of Insured Deposits 1.07 1.09 1.11 1.13 6/15 9/15 12/15 3/16 1.17 6/16 1.18 1.20 9/16 12/16 1.20 3/17 1.24 1.28 6/17 1.30 9/17 12/17 1.30 3/18 DIF Balance DIF-Insured Deposits $67,589 70,115 72,600 75,120 77,910 80,704 83,162 84,928 87,588 90,506 92,747 95,072 97,588 $6,333,620 6,406,678 6,519,715 6,659,996 6,672,294 6,813,258 6,910,937 7,075,301 7,042,281 7,094,247 7,150,781 7,334,746 7,358,053 Table II-C. Problem Institutions and Failed Institutions (dollar figures in millions) 2018**** 2017**** Problem Institutions Number of institutions Total assets 2017 2016 82 $54,378 105 $17,168 95 $13,939 123 $27,624 183 $46,780 291 $86,712 467 $152,687 651 $232,701 Failed Institutions Number of institutions Total assets***** 0 $0 6 $4,882 8 $5,082 5 $277 8 $6,706 18 $2,914 24 $6,044 51 $11,617 * Quarterly financial statement results are unaudited. ** Includes unrealized postretirement benefit gain (loss). *** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks. **** Through June 30. ***** Total assets are based on final Call Reports submitted by failed institutions. 24 FDIC QUARTERLY 2015 2014 2013 2012 QUARTERLY BANKING PROFILE Table III-C. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) June 30, 2018 Commercial Banks and Savings Institutions FDIC-Insured Commercial Banks FDIC-Supervised OCC-Supervised Federal Reserve-Supervised FDIC-Insured Savings Institutions OCC-Supervised FDIC-Supervised Federal Reserve-Supervised Total Commercial Banks and Savings Institutions Other FDIC-Insured Institutions U.S. Branches of Foreign Banks Total FDIC-Insured Institutions Number of Institutions Total Assets Domestic Deposits* Est. Insured Deposits 4,833 3,219 851 763 $16,366,715 2,526,405 11,100,443 2,739,867 $11,310,604 2,004,793 7,396,603 1,909,208 $6,573,691 1,375,315 4,150,057 1,048,319 709 320 350 39 1,166,133 728,240 407,380 30,513 924,834 593,586 307,133 24,115 747,790 486,964 241,283 19,543 5,542 17,532,848 12,235,438 7,321,481 9 82,785 45,501 36,572 5,551 17,615,634 12,280,939 7,358,053 * Excludes $1.2 trillion in foreign office deposits, which are not FDIC insured. Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range Quarter Ending March 31, 2018 (dollar figures in billions) Annual Rate in Basis Points* Number of Institutions Percent of Total Institutions Amount of Assessment Base** Percent of Total Assessment Base 1.50 - 3.00 3,398 60.51 $3,091.4 20.52 3.01 - 6.00 1,498 26.67 11,055.7 73.37 6.01 - 10.00 558 9.94 770.9 5.12 10.01 - 15.00 62 1.10 114.6 0.76 15.01 - 20.00 85 1.51 15.4 0.10 20.01 - 25.00 8 0.14 1.0 0.01 > 25.00 7 0.12 18.7 0.12 * Assessment rates do not incorporate temporary surcharges on large banks. ** Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, as required by the Dodd-Frank Act. FDIC QUARTERLY 25 2018 • Volume 12 • Numb er 3 Notes to Users This publication contains financial data and other information for depository institutions insured by the Federal Deposit Insurance Corporation (FDIC). These notes are an integral part of this publication and provide information regarding the comparability of source data and reporting differences over time. Tables I-A through VIII-A. The information presented in Tables I-A through VIII-A of the FDIC Quarterly Banking Profile is aggregated for all FDIC-insured Call Report filers, both commercial banks and savings institutions. Some tables are arrayed by groups of FDIC-insured institutions based on predominant types of asset concentration, while other tables aggregate institutions by asset size and geographic region. Quarterly and full-year data are provided for selected indicators, including aggregate condition and income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off information for loans outstanding and other assets. Tables I-B through VI-B. The information presented in Tables I-B through VI-B is aggregated for all FDIC-insured commercial banks and savings institutions meeting the criteria for community banks that were developed for the FDIC’s Community Banking Study, published in December, 2012: http://fdic.gov/regulations/resources/cbi/report/cbi-full.pdf. The determination of which insured institutions are considered community banks is based on five steps. The first step in defining a community bank is to aggregate all charter-level data reported under each holding company into a single banking organization. This aggregation applies both to balance-sheet measures and the number and location of banking offices. Under the FDIC definition, if the banking organization is designated as a community bank, every charter reporting under that organization is also considered a community bank when working with data at the charter level. The second step is to exclude any banking organization where more than 50 percent of total assets are held in certain specialty banking charters, including: credit card specialists, consumer nonbank banks, industrial loan companies, trust companies, bankers’ banks, and banks holding 10 percent or more of total assets in foreign offices. Once the specialty organizations are removed, the third step involves including organizations that engage in basic banking activities as measured by the total loans-to-assets ratio (greater than 33 percent) and the ratio of core deposits to assets (greater than 50 percent). Core deposits are defined as non-brokered deposits in domestic offices. Analysis of the underlying data shows that these thresholds establish meaningful levels of basic lending and deposit gathering and still allow for a degree of diversity in how individual banks construct their balance sheets. The fourth step includes organizations that operate within a limited geographic scope. This limitation of scope is used as a proxy measure for a bank’s relationship approach to banking. Banks that operate within a limited market area have more ease in managing relationships at a personal level. Under this step, four criteria are applied to each banking organization. They include both a minimum and maximum number of total banking offices, a maximum level of deposits for any one office, and location-based criteria. The limits on the number of and deposits per office are adjusted upward quarterly. For banking offices, banks must have more than one office, and the maximum number of offices is 40 in 1985 and 26 FDIC QUARTERLY reached 87 in 2016. The maximum level of deposits for any one office is $1.25 billion in deposits in 1985 and reached $6.97 billion in deposits in 2016. The remaining geographic limitations are also based on maximums for the number of states (fixed at 3) and large metropolitan areas (fixed at 2) in which the organization maintains offices. Branch office data are based on the most recent data from the annual June 30 Summary of Deposits Survey that are available at the time of publication. Finally, the definition establishes an asset-size limit, also adjusted upward quarterly and below which the limits on banking activities and geographic scope are waived. The asset-size limit is $250 million in 1985 and reached $1.39 billion in 2016. This final step acknowledges the fact that most of those small banks that are not excluded as specialty banks meet the requirements for banking activities and geographic limits in any event. Summary of FDIC Research Definition of Community Banking Organizations Community banks are designated at the level of the banking organization. (All charters under designated holding companies are considered community banking charters.) Exclude: Any organization with: — No loans or no core deposits — Foreign Assets ≥ 10% of total assets — More than 50% of assets in certain specialty banks, including: • credit card specialists • consumer nonbank banks1 • industrial loan companies • trust companies • bankers’ banks Include: All remaining banking organizations with: — Total assets < indexed size threshold 2 — Total assets ≥ indexed size threshold, where: • Loan to assets > 33% • Core deposits to assets > 50% • More than 1 office but no more than the indexed maximum number of offices.3 • Number of large MSAs with offices ≤ 2 • Number of states with offices ≤ 3 • No single office with deposits > indexed maximum branch deposit size.4 Tables I-C through IV-C. A separate set of tables (Tables I-C through IV-C) provides comparative quarterly data related to the Deposit Insurance Fund (DIF), problem institutions, failed institutions, estimated FDIC-insured deposits, as well as assessment rate information. Depository insti- 1 Consumer nonbank banks are financial institutions with limited charters that can make commercial loans or take deposits, but not both. 2 Asset size threshold indexed to equal $250 million in 1985 and $1.39 billion in 2016. 3 Maximum number of offices indexed to equal 40 in 1985 and 87 in 2016. 4 Maximum branch deposit size indexed to equal $1.25 billion in 1985 and $6.97 billion in 2016. QUARTERLY BANKING PROFILE tutions that are not insured by the FDIC through the DIF are not included in the FDIC Quarterly Banking Profile. U.S. branches of institutions headquartered in foreign countries and non-deposit trust companies are not included unless otherwise indicated. Efforts are made to obtain financial reports for all active institutions. However, in some cases, final financial reports are not available for institutions that have closed or converted their charters. DATA SOURCES The financial information appearing in this publication is obtained primarily from the Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income (Call Reports) and the OTS Thrift Financial Reports (TFR) submitted by all FDIC-insured depository institutions. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) This information is stored on and retrieved from the FDIC’s Research Information System (RIS) database. COMPUTATION METHODOLOGY Parent institutions are required to file consolidated reports, while their subsidiary financial institutions are still required to file separate reports. Data from subsidiary institution reports are included in the Quarterly Banking Profile tables, which can lead to doublecounting. No adjustments are made for any double-counting of subsidiary data. Additionally, c ertain adjustments are made to the OTS Thrift Financial Reports to provide closer conformance with the reporting and accounting requirements of the FFIEC Call Reports. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) All condition and performance ratios represent weighted averages, which is the sum of the individual numerator values divided by the sum of individual denominator values. All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-of-period amount plus end-of-period amount plus any interim periods, divided by the total number of periods). For “pooling-of-interest” mergers, the assets of the acquired institution(s) are included in average assets, since the year-to-date income includes the results of all merged institutions. No adjustments are made for “purchase accounting” mergers. Growth rates represent the percentage change over a 12-month period in totals for institutions in the base period to totals for institutions in the current period. For the community bank subgroup, growth rates will reflect changes over time in the number and identities of institutions designated as community banks, as well as changes in the assets and liabilities, and income and expenses of group members. Unless indicated otherwise, growth rates are not adjusted for mergers or other changes in the composition of the community bank subgroup. When community bank growth rates are adjusted for mergers, prior period balances used in the calculations represent totals for the current group of community bank reporters, plus prior period amounts for any institutions that were subsequently merged into current community banks. All data are collected and presented based on the location of each reporting institution’s main office. Reported data may include assets and liabilities located outside of the reporting institution’s home state. In addition, institutions may relocate across state lines or change their charters, resulting in an inter-regional or inter-industry migration; institutions can move their home offices between regions, savings institutions can convert to commercial banks, or commercial banks may convert to savings institutions. ACCOUNTING CHANGES Financial accounting pronouncements by the Financial Accounting Standards Board (FASB) can result in changes in an individual bank’s accounting policies and in the Call Reports they submit. Such accounting changes can affect the aggregate amounts presented in the QBP for the current period and the period-to-period comparability of such financial data. The current quarter’s Financial Institution Letter (FIL) and related Call Report supplemental instructions can provide additional explanation to the QBP reader beyond any material accounting changes discussed in the QBP analysis. https://www.fdic.gov/news/news/financial/2018/fil18039.html https://www.fdic.gov/news/news/financial/2018/fil18039.pdf https://www.fdic.gov/regulations/resources/call/call.html Further information on changes in financial statement presentation, income recognition and disclosure is available from the FASB. http:// www.fasb.org/jsp/FASB/Page/LandingPage&cid=1175805317350. DEFINITIONS (in alphabetical order) All other assets – total cash, balances due from depository institutions, premises, fixed assets, direct investments in real estate, investment in unconsolidated subsidiaries, customers’ liability on acceptances outstanding, assets held in trading accounts, federal funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid deposit insurance assessments, and other assets. All other liabilities – bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities. Assessment base – effective April 1, 2011, the deposit insurance assessment base changed to “average consolidated total assets minus average tangible equity” with an additional adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank. Previously the assessment base was “assessable deposits” and consisted of deposits in banks’ domestic offices with certain adjustments. Assessment rate schedule – Initial base assessment rates for small institutions are based on a combination of financial ratios and CAMELS component ratings. Initial rates for large institutions— generally those with at least $10 billion in assets—are also based on CAMELS component ratings and certain financial measures combined into two scorecards—one for most large institutions and another for the remaining very large institutions that are structurally and operationally complex or that pose unique challenges and risks in case of failure (highly complex institutions). The FDIC may take additional information into account to make a limited adjustment to a large institution’s scorecard results, which are used to determine a large institution’s initial base assessment rate. While risk categories for small institutions (except new institutions) were eliminated effective July 1, 2016, initial rates for small institutions are subject to minimums and maximums based on an institution’s CAMELS composite rating. (Risk categories for large institutions were eliminated in 2011.) The current assessment rate schedule became effective July 1, 2016. Under the current schedule, initial base assessment rates range from 3 to 30 basis points. An institution’s total base assessment rate FDIC QUARTERLY 27 2018 • Volume 12 • Numb er 3 may differ from its initial rate due to three possible adjustments: (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 3 basis points would have a maximum unsecured debt adjustment of 1.5 basis points and could not have a total base assessment rate lower than 1.5 basis points. (2) Depository Institution Debt Adjustment: For institutions that hold long-term unsecured debt issued by another insured depository institution, a 50 basis point charge is applied to the amount of such debt held in excess of 3 percent of an institution’s Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for large institutions that are not well capitalized or do not have a composite CAMELS rating of 1 or 2 may increase (not to exceed 10 basis points) if their brokered deposits exceed 10 percent of domestic deposits. The assessment rate schedule effective July 1, 2016, is shown in the following table: Total Base Assessment Rates* Established Small Banks 1 or 2 3 4 or 5 Large and Highly Complex Institutions** Initial Base Assessment Rate 3 to 16 6 to 30 16 to 30 3 to 30 Unsecured Debt Adjustment -5 to 0 -5 to 0 -5 to 0 -5 to 0 Brokered Deposit Adjustment N/A N/A N/A 0 to 10 Total Base Assessment Rate 1.5 to 16 3 to 30 11 to 30 1.5 to 40 CAMELS Composite * All amounts for all categories are in basis points annually. Total base rates that are not the minimum or maximum rate will vary between these rates. Total base assessment rates do not include the depository institution debt adjustment. ** Effective July 1, 2016, large institutions are also subject to temporary assessment surcharges in order to raise the reserve ratio from 1.15 percent to 1.35 percent. The surcharges amount to 4.5 basis points of a large institution’s assessment base (after making certain adjustments). Each institution is assigned a risk-based rate for a quarterly assessment period near the end of the quarter following the assessment period. Payment is generally due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are effective for assessment purposes as of the examination transmittal date. Assets securitized and sold – total outstanding principal balance of assets securitized and sold with servicing retained or other sellerprovided 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 non cumulative 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 are classified in a bank’s balance sheet as “Other liabilities.” Common equity Tier 1 capital ratio – ratio of common equity Tier 1 capital to risk-weighted assets. Common equity Tier 1 capital includes common stock instruments and related surplus, retained earnings, accumulated other comprehensive income (AOCI), and limited amounts of common equity Tier 1 minority interest, minus 28 FDIC QUARTERLY applicable regulatory adjustments and deductions. Items that are fully deducted from common equity Tier 1 capital include goodwill, other intangible assets (excluding mortgage servicing assets) and certain deferred tax assets; items that are subject to limits in common equity Tier 1 capital include mortgage servicing assets, eligible deferred tax assets, and certain significant investments. 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 c redit exposure based on the notional amount, the remaining maturity and type of the contract. Derivatives transaction types: Futures and forward contracts – contracts in which the buyer agrees to purchase and the seller agrees to sell, at a specified future date, a specific quantity of an underlying variable or index at a specified price or yield. These contracts exist for a variety of variables or indices, (traditional agricultural or physical commodities, as well as currencies and interest rates). Futures contracts are standardized and are traded on organized exchanges which set limits on counterparty credit exposure. Forward contracts do not have standardized terms and are traded over the counter. Option contracts – contracts in which the buyer acquires the right to buy from or sell to another party some specified amount of an underlying variable or index at a stated price (strike price) during a period or on a specified future date, in return for compensation (such as a fee or premium). The seller is obligated to purchase or sell the variable or index at the discretion of the buyer of the contract. Swaps – obligations between two parties to exchange a series of cash flows at periodic intervals (settlement dates), for a specified period. The cash flows of a swap are either fixed, or determined for each settlement date by multiplying the quantity (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. QUARTERLY BANKING PROFILE Derivatives underlying risk exposure – the potential exposure characterized by the level of banks’ concentration in particular underlying instruments, in general. Exposure can result from market risk, credit risk, and operational risk, as well as, interest rate risk. Domestic deposits to total assets – total domestic office deposits as a percent of total assets on a consolidated basis. Earning assets – all loans and other investments that earn interest or dividend income. Efficiency ratio – Noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net operating revenues that are absorbed by overhead expenses, so that a lower value indicates greater efficiency. Estimated insured deposits – in general, insured deposits are total domestic deposits minus estimated uninsured deposits. Beginning March 31, 2008, for institutions that file Call Reports, insured deposits are total assessable deposits minus estimated uninsured deposits. Beginning September 30, 2009, insured deposits include deposits in accounts of $100,000 to $250,000 that are covered by a temporary increase in the FDIC’s standard maximum deposit insurance amount (SMDIA). The Dodd-Frank Wall Street Reform and Consumer Protection Act enacted on July 21, 2010, made permanent the standard maximum deposit insurance amount (SMDIA) of $250,000. Also, the Dodd-Frank Act amended the Federal Deposit Insurance Act to include noninterest-bearing transaction accounts as a new temporary deposit insurance account category. All funds held in noninterest-bearing transaction accounts were fully insured, without limit, from December 31, 2010, through December 31, 2012. Failed/assisted institutions – an institution fails when regulators take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or another healthy institution. This action may require the FDIC to provide funds to cover losses. An institution is defined as “assisted” when the institution remains open and receives assistance in order to continue operating. Fair Value – the valuation of various assets and liabilities on the balance sheet—including trading assets and liabilities, available-forsale 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 prior to March 31, 2012. Goodwill and other intangibles – intangible assets include s ervicing rights, purchased credit card relationships, and other identifiable intangible assets. Goodwill is the excess of the purchase price over the fair market value of the net assets acquired, less subsequent impairment adjustments. Other intangible assets are recorded at fair value, less subsequent quarterly amortization and impairment adjustments. Loans secured by real estate – includes home equity loans, junior liens secured by 1-4 family residential properties, and all other loans secured by real estate. Loans to individuals – includes outstanding credit card balances and other secured and unsecured consumer loans. Long-term assets (5+ years) – loans and debt securities with remaining maturities or repricing intervals of over five years. Maximum credit exposure – the maximum contractual credit exposure remaining under recourse arrangements and other sellerprovided credit enhancements provided by the reporting bank to securitizations. Mortgage-backed securities – certificates of participation in pools of residential mortgages and collateralized mortgage obligations issued or guaranteed by government-sponsored or private enter prises. Also, see “Securities,” below. Net charge-offs – total loans and leases charged off (removed from balance sheet because of uncollectability), less amounts recovered on loans and leases previously charged off. Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to depositors and other creditors, expressed as a percentage of average earning assets. No adjustments are made for interest income that is tax exempt. Net loans to total assets – loans and lease financing receivables, net of unearned income, allowance and reserves, as a percent of total assets on a consolidated basis. Net operating income – income excluding discretionary transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from operating income have been adjusted to exclude the portion applicable to securities gains (or losses). Noncurrent assets – the sum of loans, leases, debt securities, and other assets that are 90 days or more past due, or in nonaccrual status. Noncurrent loans & leases – the sum of loans and leases 90 days or more past due, and loans and leases in nonaccrual status. Number of institutions reporting – the number of institutions that actually filed a financial report. New reporters – insured institutions filing quarterly financial reports for the first time. Other borrowed funds – federal funds purchased, securities sold with agreements to repurchase, demand notes issued to the U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and trading liabilities, less revaluation losses on assets held in trading accounts. Other real estate owned – primarily foreclosed property. Direct and indirect investments in real estate ventures are excluded. The amount is reflected net of valuation allowances. For institutions that filed a Thrift Financial Report (TFR), the v aluation allowance subtracted also includes allowances for other repossessed assets. Also, for TFR filers the components of other real estate owned are reported gross of valuation allowances. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their losses) compared to the same period a year earlier. “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. FDIC QUARTERLY 29 2018 • Volume 12 • Numb er 3 Recourse – an arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank’s claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Reserves for losses – the allowance for loan and lease losses on a consolidated basis. Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. Excludes restructured loans and leases that are not in compliance with the modified terms. Retained earnings – net income less cash dividends on common and preferred stock for the reporting period. Return on assets – bank net income (including gains or losses on securities and extraordinary items) as a percentage of average total (consolidated) assets. The basic yardstick of bank profitability. Return on equity – bank net income (including gains or losses on securities and extraordinary items) as a percentage of average total equity capital. Risk-weighted assets – assets adjusted for risk-based capital definitions which include on-balance-sheet as well as off-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-balance-sheet accounts. Securities – excludes securities held in trading accounts. Banks’ securities portfolios consist of securities designated as “held-to-maturity” (reported at amortized cost (book value)), securities designated as “available-for-sale” (reported at fair (market) value), and equity securities with readily determinable fair values not held for trading. Securities gains (losses) – realized gains (losses) on held-to- maturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers also include gains (losses) on the sales of assets held for sale. (TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.) Seller’s interest in institution’s own securitizations – the reporting bank’s ownership interest in loans and other assets that have been securitized, except an interest that is a form of recourse or other seller-provided credit enhancement. Seller’s interests differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is generally equal to the total principal amount of the pool of assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the form of securities issued to investors. Small Business Lending Fund – The Small Business Lending Fund (SBLF) was enacted into law in September 2010 as part of the Small 30 FDIC QUARTERLY Business Jobs Act of 2010 to encourage lending to small businesses by providing capital to qualified community institutions with assets of less than $10 billion. The SBLF Program is administered by the U.S. Treasury Department (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. Trust assets – market value, or other reasonably available value of fiduciary and related assets, to include marketable securities, and other financial and physical assets. Common physical assets held in fiduciary accounts include real estate, equipment, collectibles, and household goods. Such fiduciary assets are not included in the assets of the financial institution. Unearned income and contra accounts – unearned income for Call Report filers only. Unused loan commitments – includes credit card lines, home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused commitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for sale, which are accounted for as derivatives on the balance sheet.) Yield on earning assets – total interest, dividend, and fee income earned on loans and investments as a percentage of average earning assets.
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