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Quarterly
Quarterly Banking Profile:
Second Quarter 2021
The Importance of Technology
Investments for Community Bank
Lending and Deposit Taking
During the Pandemic

2021
Volume 15, 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
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should be sent to publicinfo@fdic.gov. Change of address information also should be
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The FDIC Quarterly is available online by visiting the FDIC website at www.fdic.gov.
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individual feature articles, subscribe at www.fdic.gov/about/subscriptions/index.html.
Chairman
Jelena McWilliams
Director, Division of Insurance and Research
Diane Ellis
Executive Editors
George French
Shayna M. Olesiuk
Managing Editors
Rosalind Bennett
Alan Deaton
Patrick Mitchell
Philip A. Shively
Editors
Clayton Boyce
Kathy Zeidler
Publication Manager
Lynne Montgomery
Media Inquiries
(202) 898-6993

FDIC QUARTERLY

2021

FDICQUARTERLY

Volume 15 • Number 3

Quarterly Banking Profile: Second Quarter 2021
FDIC-insured institutions reported aggregate net income of $70.4 billion in second quarter
2021, an increase of $51.9 billion (281 percent) from the same quarter a year ago, driven by a
$73 billion (117.3 percent) decline in provision expense. Two-thirds of all banks (66.4 percent)
reported year-over-year improvement in quarterly net income. The share of profitable
institutions increased slightly, up 1.4 percent year over year to 95.8 percent. However, net
income declined $6.4 billion (8.3 percent) from first quarter 2021, driven by an increase
in provision expense from first quarter 2021 (up $3.7 billion to negative $10.8 billion). The
aggregate return on average assets ratio of 1.24 percent rose 89 basis points from a year ago
but fell 14 basis points from first quarter 2021. See page 1

Community Bank Performance

Community banks—which represent 91 percent of insured institutions—reported yearover-year quarterly net income growth of $1.9 billion (28.7 percent) in second quarter
2021, despite a narrower net interest margin. Nearly two-thirds of all community banks
(65 percent) reported higher net income from the year-ago quarter. The pretax return on
assets ratio of 1.54 percent rose 20 basis points from a year ago but fell 4 basis points from
first quarter 2021. See page 15.

Insurance Fund Indicators

The Deposit Insurance Fund (DIF) balance totaled $120.5 billion at the end of second quarter
2021, an increase of $1.2 billion from the previous quarter. Assessment income, interest
earned on invest­ments, and negative provisions for insurance losses were the largest sources
of the increase, offset partially by operating expenses and unrealized losses on availablefor-sale securities. The DIF reserve ratio was 1.27 percent at June 30, 2021, up 2 basis points
from March 31, 2021, and down 3 basis points from June 30, 2020. See page 23.

Featured Article:
The Importance of Technology Investments for Community
Bank Lending and Deposit Taking During the Pandemic
Community banks that invested more in technology generally reported faster loan and
deposit growth in 2020 than did banks with less technology investment. Moreover, the
differences in loan and deposit growth associated with technology investment were
greater in 2020 than the differences reported prior to the pandemic. Faster loan growth for
community banks with greater technology investment largely stemmed from participation
in the Paycheck Protection Program (PPP). These community banks, on average, originated
a greater share of PPP loans regardless of the loan size, origination date, or borrower
distance from the nearest bank branch. Meanwhile, the larger increases in deposit growth of
community banks that invested more in technology were due to increases in deposit balances
of existing customers rather than from new depositors. See page 31.

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 2021
INSURED INSTITUTION PERFORMANCE
Quarterly Net Income Continued to Increase Year Over Year, Driven by a Second Consecutive Quarter of
Negative Provision Expense
Net Interest Margin Contracted Further to a New Record Low
Quarterly Loan Balances Grew for the First Time Since Second Quarter 2020
Asset Quality Continued to Improve
Quarterly Net Income
Continued to Increase Year
Over Year, Driven by a
Second Consecutive Quarter
of Negative Provision
Expense

Net income totaled $70.4 billion in second quarter 2021, an increase of $51.9 billion
(281 percent) from the same quarter a year ago, driven by a $73 billion (117.3 percent)
decline in provision expense. Two-thirds of all banks (66.4 percent) reported year-overyear improvement in quarterly net income. The share of profitable institutions increased
slightly, up 1.4 percent year over year to 95.8 percent. However, net income declined
$6.4 billion (8.3 percent) from first quarter 2021, driven by an increase in provision expense
from first quarter 2021 (up $3.7 billion to negative $10.8 billion). The aggregate return on
average assets ratio of 1.24 percent rose 89 basis points from a year ago but fell 14 basis
points from first quarter 2021.

Net Interest Margin
Contracted Further to a
New Record Low

The average net interest margin contracted 31 basis points from a year ago to 2.50 percent—
the lowest level on record. The contraction is due to the year-over-year reduction in
earning asset yields (down 53 basis points to 2.68 percent) outpacing the decline in average
funding costs (down 22 basis points to 0.18 percent). Both ratios declined from first quarter
2021 to record lows. Aggregate net interest income declined $2.2 billion (1.7 percent)
from second quarter 2020. Reductions in net interest income at the largest institutions
drove the aggregate decline in net interest income, as more than three-fifths of all banks
(64.1 percent) reported higher net interest income compared with a year ago.

Noninterest Income
Continued to Increase
Despite Lower Trading
Revenue

Noninterest income increased (up $5 billion, or 7.1 percent) from second quarter 2020 due
to improvement in several categories. During the year ending second quarter 2021, “all
other noninterest income” rose $7.9 billion (27.5 percent), offsetting both a $5.9 billion
(42.1 percent) decline in trading revenue and a reduction in net gains on loan sales of
$1.5 billion (19.7 percent).1 Increased income from service charges on deposit accounts
(up $1.5 billion, or 21.5 percent) and fiduciary activities (up $1.2 billion, or 13.1 percent)
from second quarter 2020 also supported the year-over-year improvement in noninterest
income. More than two-thirds of all institutions (69.6 percent) reported higher noninterest
income compared with the year-ago quarter.
1 All

other noninterest income includes, but is not limited to, bankcard and credit card interchange fees, income and fees
from wire transfers, and income and fees from automated teller machines.

Chart 1

Chart 2

Quarterly Net Income

Quarterly Net Interest Margin

All FDIC-Insured Institutions
$ Billions

100

All FDIC-Insured Institutions
Securities and Other Gains/Losses, Net
Net Operating Income

80

Percent

5.0

4.0

40

3.5
3.0
2.5

0

2.0

-20

1.5

-40
-60
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: FDIC.

Assets $100 Million - $1 Billion
Assets < $100 Million

4.5

60

20

Assets > $250 Billion
Assets $10 Billion - $250 Billion
Assets $1 Billion - $10 Billion

1.0
0.5
0.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: FDIC.

FDIC QUARTERLY

1

2021 • Volume 15 • Number 3

Noninterest Expense
Relative to Average Assets
Declined to a Record Low

Noninterest expense rose $3.7 billion (3 percent) year over year, led by an increase in salary
and benefit expense and “all other noninterest expense.” Nearly three-fourths of all banks
(74.5 percent) reported higher noninterest expense year over year. Higher average assets
per employee (up $0.9 million) also increased from a year ago to $11.1 million. However,
noninterest expense as a percentage of average assets continued to decline, reaching a
record low of 2.23 percent, down 14 basis points from the year-ago quarter.

Net Operating Revenue to
Average Assets Continued
to Decline

Net operating revenue (net interest income plus noninterest income) increased $2.8 billion
(1.4 percent) from the year-ago quarter as improvement in noninterest income offset
the decline in net interest income. However, growth in average assets and declining
net interest income contributed to a 29 basis point decline in the ratio of quarterly net
operating revenue to average assets. The ratio stood at 3.62 percent for the quarter—the
lowest level since third quarter 1984.

Provision Expense Was
Negative for the Second
Consecutive Quarter

Provisions for credit losses (provisions) increased $3.7 billion from first quarter 2021 but
declined $73 billion (117.3 percent) from the year-ago quarter to negative $10.8 billion.2 More
than three-fifths of all institutions (63.3 percent) reported lower provisions compared with
the year-ago quarter. Nearly 14 percent of institutions reported an increase in provisions
during the same period, while the remaining institutions reported no material change.
The net number of banks that have adopted current expected credit loss (CECL) accounting
fell by 1 to 319 from first quarter 2021.3 CECL adopters reported aggregate negative
provisions of $10.7 billion in second quarter, an increase of $4.3 billion from the previous
quarter and a reduction of $67.6 billion from one year ago. Provisions for banks that have
not adopted CECL accounting totaled negative $128.1 million (a reduction of $530.6 million
from a quarter ago and $5.2 billion from one year ago).

Allowance for Loan and
Lease Losses to Total
Loans Remained Higher
Than Pre-Pandemic Level

The allowance for loan and lease losses (ALLL) as a percentage of total loans and leases
declined 41 basis points to 1.80 percent from the year-ago quarter due to negative provisions,
but ALLL remains higher than the level of 1.18 percent reported in fourth quarter 2019.
Similarly, the ALLL as a percentage of loans that are 90 days or more past due or in
nonaccrual status (coverage ratio) declined 27 percentage points from the year-ago quarter
to 178 percent but continued to exceed the financial crisis average of 79.1 percent.4 All insured
institutions except the largest Quarterly Banking Profile asset size group (greater than
$250 billion) reported higher aggregate coverage ratios compared with first quarter 2021.
2 Provisions

for credit losses include both losses for loans and securities for CECL adopters but only loan losses for
non-adopters.
3 Changes to the number of CECL accounting adopters may result from closures, mergers and acquisitions, or
examination or audit findings.
4 The financial crisis refers to the period between December 2007 and June 2009.

Chart 3

Chart 4

Change in Quarterly Loan-Loss Provisions

Reserve Coverage Ratio

All FDIC-Insured Institutions

All FDIC-Insured Institutions
Loan-Loss Reserves (Left Axis)
Reserve Coverage Ratio (Right Axis)
Noncurrent Loans (Left Axis)
Coverage Adjusted for GNMA Guaranteed Loans (Right Axis)
Noncurrents Adjusted for GNMA Guaranteed Loans (Left Axis)

Quarter-Over-Quarter Change
($ Billions)

50
40

$ Billions

450

30
20

400

10

300

0
-10
-20
-30
-40
-50
-60
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: FDIC.

2 FDIC QUARTERLY

Coverage Ratio (Percent)

250
200

350

150

250
200

100

150
100

50

50
0

0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: FDIC.
Note: The reserve coverage ratio is the loan-loss reserves to noncurrent loans and leases.

QUARTERLY BANKING PROFILE

Noncurrent Loans
Continued to Decline
Quarter Over Quarter

Loans that were 90 days or more past due or in nonaccrual status (noncurrent loans)
continued to decline (down $13.2 billion, or 10.8 percent) from first quarter 2021, supporting
a 12 basis point reduction in the noncurrent rate to 1.01 percent. Noncurrent 1–4 family
residential loans declined most among loan categories from the previous quarter (down
$5.9 billion, or 10.9 percent), followed by noncurrent commercial and industrial (C&I)
loans (down $3.1 billion, or 13.9 percent). Three-fifths of all banks reported a reduction in
noncurrent loans compared with first quarter 2021.

The Net Charge-Off Rate
Declined Further to a
Record Low

Net charge-offs continued to decline for the fourth consecutive quarter (down
$8.3 billion, or 53.2 percent). In second quarter, the net charge-off rate fell 30 basis points
to 0.27 percent, a record low. A decline in net charge-offs of credit card loans (down
$3.3 billion, or 39.8 percent) and C&I loans (down $2.9 billion, or 69.7 percent) drove threefourths (75.5 percent) of the reduction in net charge-offs from the year-ago quarter. More
than half of all banks (51.6 percent) reported a decline in net charge-offs from a year ago.

Total Assets Increased,
Especially Those With
Maturities of More Than
Five Years

Total assets increased $224.8 billion (1 percent) from first quarter 2021 to $22.8 trillion.
More than four-fifths (86.1 percent) of all banks reported an increase in assets with
contractual maturities greater than five years compared with a quarter ago. Cash and
balances due from depository institutions declined $108 billion (3 percent), while securities
rose $248.9 billion (4.5 percent). Growth in mortgage-backed securities (up $122.7 billion,
or 3.8 percent) and U.S. Treasury securities (up $91.2 billion, or 8.5 percent) continued to
spur quarterly increases in total securities. Growth in held-to-maturity securities from
first quarter 2021 (up $273.6 billion, or 16.8 percent) outpaced that of available-for-sale
(AFS) securities (down $27.3 billion, or 0.7 percent).

Quarterly Loan Balances
Grew for the First Time
Since Second Quarter
2020

Loan and lease balances increased $33.2 billion (0.3 percent) from the previous quarter, the
first quarterly increase in loan balances since second quarter 2020. An increase in credit
card loan balances (up $30.9 billion, or 4.1 percent) and an increase in auto loan balances
(up $18.9 billion, or 3.8 percent) drove this growth. Half (50.3 percent) of all institutions
reported a quarterly increase in total loans.
Compared with second quarter 2020, loan and lease balances contracted slightly (down
$133.9 billion, or 1.2 percent), driven by a reduction in C&I loans (down $360.4 billion, or
13.4 percent). An increase in “all other loans” (up $182.8 billion, or 18.2 percent) mitigated the
annual contraction in total loan balances.5 Compared with the year-ago quarter, more than
half (52.8 percent) of all institutions reported a decline in total loans, but more than threequarters (76.4 percent) of all institutions reported an increase in unused commitments to lend.
5 “All

other loans” includes, but is not limited to, loans to nondepository institutions and loans for purchasing or
carrying securities.

Chart 5

Chart 6

Noncurrent Loan Rate and Quarterly Net Charge-Off Rate
All FDIC-Insured Institutions
Percent

6

Noncurrent Rate
Quarterly Net Charge-Off Rate

Quarterly Change in Loan Balances
All FDIC-Insured Institutions
$ Billions

500
400

5

300
200

4
3

Percent

12
8

100

4

0

0

-100

2

Quarterly Change (Left Axis)
12-Month Growth Rate (Right Axis)

-200

-4

-300
-8
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

1
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: FDIC.

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

2021 • Volume 15 • Number 3

Deposits Continued to
Grow but at a Moderated
Pace in Second Quarter
2021

Deposits grew $271.9 billion (1.5 percent) in second quarter, down from the growth rate of
3.6 percent reported in first quarter 2021. The deposit growth rate in second quarter is near
the long-run average growth rate of 1.2 percent.6 Deposits above $250,000 continued to
drive the quarterly increase (up $297.8 billion, or 3.1 percent) and offset a decline in deposits
below $250,000 (down $53.6 billion, or 0.7 percent). Noninterest-bearing deposit growth
(up $175 billion, or 3.5 percent) continued to outpace that of interest-bearing deposits (up
$53.3 billion, or 0.4 percent), with more than half of banks (57.3 percent) reporting higher
noninterest-bearing deposit balances compared with the previous quarter.

Equity Capital Growth
Remained Strong

Equity capital rose $55.3 billion (2.5 percent) from first quarter 2021. Retained earnings
contributed $33.9 billion to equity formation despite a decline in retained earnings from
first quarter (down $19.1 billion, or 36 percent). Banks distributed 51.9 percent of second
quarter earnings as dividends, which were up $12.7 billion (53 percent) from a quarter
ago. Nearly one-third (32 percent) of banks reported higher dividends compared with the
year-ago quarter. The number of institutions with capital ratios that did not meet Prompt
Corrective Action requirements for the well-capitalized category increased by three to nine
from first quarter 2021.7

Three New Banks Opened
in Second Quarter 2021

The number of FDIC-insured institutions declined from 4,978 in first quarter 2021 to
4,951.8 During second quarter 2021, three new banks opened, 28 institutions merged with
other FDIC-insured institutions, two banks ceased operations, and no banks failed. The
number of banks on the FDIC’s “Problem Bank List” declined by four from first quarter to
51. Total assets of problem banks declined $8.4 billion (15.4 percent) from first quarter to
$45.8 billion.
Author:
Erica Jill Tholmer
Senior Financial Analyst
Division of Insurance and Research
6 The

long-run average growth rate is based on the period between Q1 1984 and Q4 2012.
Corrective Action categories are assigned based on reported capital ratios only and do not include the effects of
regulatory downgrades.
8 The number of insured financial institutions excludes two banks that did not file Call Reports this quarter but continue
to have active banking charters.
7 Prompt

Chart 7
Quarterly Change in Deposits
All FDIC-Insured Institutions
$ Billions

Chart 8
Number and Assets of Banks on the “Problem Bank List”
Number

1,000

Assets of Problem Banks
Number of Problem Banks

Assets ($ Billions)

500

1,400

900

450

1,200

800

400

1,000

700

350

600

300

500

250

400

200

300

150

200

100

100

50

800
600
400
200
0
-200
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: FDIC.

4 FDIC QUARTERLY

0
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: FDIC.

QUARTERLY BANKING PROFILE
TABLE I-A. Selected Indicators, All FDIC-Insured Institutions*
Return on assets (%)
Return on equity (%)
Core capital (leverage) ratio (%)
Noncurrent assets plus other real estate owned to assets (%)
Net charge-offs to loans (%)
Asset growth rate (%)
Net interest margin (%)
Net operating income growth (%)
Number of institutions reporting
Commercial banks
Savings institutions
Percentage of unprofitable institutions (%)
Number of problem institutions
Assets of problem institutions (in billions)
Number of failed institutions

2021**

2020**

2020

2019

2018

2017

2016

1.31
13.00
8.83
0.51
0.30
7.80
2.53
332.42
4,951
4,336
615
3.37
51
$46
0

0.37
3.49
8.77
0.59
0.56
15.73
2.97
-72.41
5,066
4,430
636
5.45
52
$48
2

0.72
6.85
8.81
0.61
0.50
17.36
2.82
-38.77
5,002
4,375
627
4.68
56
$56
4

1.29
11.38
9.66
0.55
0.52
3.92
3.36
-3.14
5,177
4,518
659
3.75
51
$46
4

1.35
11.98
9.70
0.60
0.48
3.03
3.40
45.45
5,406
4,715
691
3.44
60
$48
0

0.97
8.60
9.63
0.73
0.50
3.79
3.25
-3.27
5,670
4,918
752
5.61
95
$14
8

1.04
9.27
9.48
0.86
0.47
5.09
3.13
4.43
5,913
5,112
801
4.48
123
$28
5

* Excludes insured branches of foreign banks (IBAs).
** Through June 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending June30.

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

2nd Quarter
2021

1st Quarter
2021

2nd Quarter
2020

%Change
20Q2-21Q2

4,951
2,058,714

4,978
2,067,221

5,066
2,077,846

-2.3
-0.9

$22,789,003
5,109,191
2,180,506
1,594,933
393,535
277,871
2,335,889
1,757,418
791,990
69,767
1,588,895
2,992
10,858,169
195,173
10,662,996
5,728,192
4,149
393,757
5,999,909

$22,564,251
5,079,254
2,178,189
1,575,705
388,392
286,043
2,457,771
1,689,879
761,103
68,072
1,533,095
3,077
10,824,995
214,262
10,610,734
5,479,335
4,433
392,017
6,077,732

$21,139,330
5,110,704
2,216,550
1,545,465
380,893
324,468
2,696,301
1,704,209
808,171
78,108
1,406,504
3,803
10,992,022
242,717
10,749,305
4,515,796
5,021
386,432
5,482,778

7.8
0.0
-1.6
3.2
3.3
-14.4
-13.4
3.1
-2.0
-10.7
13.0
-21.3
-1.2
-19.6
-0.8
26.8
-17.4
1.9
9.4

22,789,003
18,730,697
17,163,933
1,566,764
1,018,770
66,798
664,514
2,308,224
2,305,721

22,564,251
18,458,784
16,935,687
1,523,096
1,099,727
66,470
686,315
2,252,956
2,250,482

21,139,330
16,962,234
15,519,843
1,442,391
1,302,424
69,595
655,590
2,149,488
2,146,919

7.8
10.4
10.6
8.6
-21.8
-4.0
1.4
7.4
7.4

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

First Half
2021

45,543
109,662
47,190
3,386,814
20,799,357
207,759
8,917,077
19,845,670
463,194
186,058,286
First Half
2020

Total interest income
Total interest expense
Net interest income
Provision for credit losses***
Total noninterest income
Total noninterest expense
Securities gains (losses)
Applicable income taxes
Extraordinary gains, net****
Total net income (includes minority interests)
		 Bank net income
Net charge-offs
Cash dividends
Retained earnings
Net operating income

$277,110
19,361
257,749
-25,187
152,247
249,936
2,128
40,634
26
146,768
146,655
16,415
60,291
86,364
145,027

$319,322
50,916
268,406
114,838
137,612
250,889
4,261
7,368
-105
37,079
36,992
30,173
46,554
-9,562
33,538

%Change

51,772
122,873
48,969
3,264,139
20,576,418
231,305
8,730,450
18,925,459
460,283
191,684,231
2nd Quarter
2021

55,683
118,254
48,297
2,651,813
19,227,935
378,493
8,366,753
17,007,732
550,281
181,707,660
2nd Quarter
2020

-18.2
-7.3
-2.3
27.7
8.2
-45.1
6.6
16.7
-15.8
2.4
%Change
20Q2-21Q2

-13.2
-62.0
-4.0
N/M
10.6
-0.4
-50.1
451.5
N/M
295.8
296.5
-45.6
29.5
N/M
332.4

$138,538
9,345
129,193
-10,782
75,786
126,051
733
20,048
26
70,422
70,376
7,295
36,506
33,869
69,814

$150,182
18,750
131,432
62,200
70,767
122,341
2,505
1,570
-79
18,513
18,469
15,573
14,029
4,440
16,443

-7.8
-50.2
-1.7
N/M
7.1
3.0
-70.7
1,176.7
N/M
280.4
281.0
-53.2
160.2
662.8
324.6

* For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.
** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.
*** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13,
this item represents the provision for loan and lease losses.
**** See Notes to Users for explanation.

N/M - Not Meaningful

FDIC QUARTERLY 5

2021 • Volume 15 • Number 3
TABLE III-A. Second Quarter 2021, 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
Credit loss provision to assets**
Net operating income to assets
Pretax return on assets
Return on assets
Return on equity
Net charge-offs to loans and leases
Loan and lease loss provision to
net charge-offs
Efficiency ratio
% of unprofitable institutions
% of institutions with earnings gains
Structural Changes
New reporters
Institutions absorbed by mergers
Failed institutions

All Insured
Institutions
4,951
4,336
615
$22,789.0
21,359.1
1,429.9
18,730.7
17,538.2
1,192.5
70,376
66,089
4,287

Credit
Card
Banks
11
10
1
$477.8
395.9
81.9
339.6
278.0
61.5
6,995
5,739
1,256

International
Banks
5
5
0
$5,762.7
5,762.7
0.0
4,486.3
4,486.3
0.0
15,788
15,788
0

Agricultural
Banks
1,130
1,119
11
$289.1
282.9
6.2
245.8
242.3
3.4
1,025
978
47

Commercial
Lenders
2,586
2,337
249
$7,185.0
6,724.7
460.4
6,016.6
5,654.2
362.4
22,669
21,226
1,444

Mortgage
Lenders
280
77
203
$684.9
118.0
566.9
601.9
101.4
500.6
1,393
343
1,050

Consumer
Lenders
32
20
12
$152.7
146.0
6.7
130.2
124.4
5.8
542
525
18

Other
Specialized
<$1 Billion
312
283
29
$64.5
59.5
5.0
53.7
50.3
3.4
281
102
180

All Other
<$1 Billion
509
414
95
$119.4
95.7
23.8
102.7
83.1
19.7
324
287
37

All Other
>$1 Billion
86
71
15
$8,052.9
7,773.8
279.1
6,753.8
6,518.1
235.7
21,358
21,103
256

2.68
0.18
2.50
1.34
2.23
-0.19
1.23
1.60
1.24
12.37
0.27

10.40
0.98
9.41
5.68
8.00
-0.92
5.75
7.55
5.76
42.93
2.37

1.93
0.11
1.82
1.62
2.03
-0.22
1.10
1.43
1.10
12.31
0.40

3.86
0.39
3.46
0.69
2.27
0.06
1.41
1.62
1.43
12.99
0.06

3.14
0.22
2.92
0.99
2.20
-0.12
1.25
1.61
1.27
11.68
0.12

1.83
0.15
1.69
0.86
1.47
-0.01
0.80
1.08
0.82
9.41
0.01

3.34
0.48
2.86
0.27
0.97
0.18
1.43
1.91
1.43
16.24
0.22

2.59
0.25
2.35
3.30
3.31
0.04
1.72
2.20
1.77
12.69
0.11

3.41
0.32
3.09
1.20
2.82
0.05
1.09
1.24
1.09
9.77
0.03

2.32
0.13
2.19
1.26
2.11
-0.22
1.06
1.38
1.07
10.75
0.21

-154.12
61.01
4.16
66.39

-50.59
54.34
0.00
100.00

-206.49
62.38
0.00
80.00

167.99
57.22
3.36
61.68

-158.39
59.42
2.55
73.90

-466.09
58.63
9.64
51.79

37.25
31.78
3.13
75.00

129.07
59.88
13.46
44.55

267.86
68.54
5.70
58.55

-236.92
64.18
3.49
67.44

3
28
0

0
0
0

0
0
0

0
5
0

1
22
0

0
0
0

0
0
0

2
0
0

0
1
0

0
0
0

PRIOR SECOND QUARTERS
(The way it was...)
Return on assets (%)
	
	

2020
2018
2016

0.36
1.37
1.06

0.11
2.73
2.27

0.28
1.23
0.96

1.41
1.34
1.23

0.50
1.28
1.06

1.16
1.07
0.94

0.51
1.20
0.96

3.00
3.75
2.51

1.29
1.14
0.94

0.14
1.45
1.01

Net charge-offs to loans & leases (%)
	
	

2020
2018
2016

0.57
0.48
0.45

4.26
4.02
3.28

0.79
0.50
0.55

0.19
0.19
0.16

0.28
0.16
0.22

0.02
0.01
0.06

0.34
1.14
0.64

0.36
0.05
0.27

0.07
0.09
0.16

0.50
0.36
0.40

* See Table V-A (page 10) for explanations.
** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator
represents the provision for loan and lease losses.

6 FDIC QUARTERLY

QUARTERLY BANKING PROFILE
TABLE III-A. Second Quarter 2021, All FDIC-Insured Institutions
Asset Size Distribution
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
Credit loss provision to assets**
Net operating income to assets
Pretax return on assets
Return on assets
Return on equity
Net charge-offs to loans and leases
Loan and lease loss provision to
net charge-offs
Efficiency ratio
% of unprofitable institutions
% of institutions with earnings gains
Structural Changes
New reporters
Institutions absorbed by mergers
Failed institutions

$100
Million to $1 Billion to
$1 Billion $10 Billion
3,103
817
2,754
678
349
139
$1,117.8
$2,151.8
980.7
1,794.2
137.1
357.6
953.4
1,800.4
841.4
1,507.7
112.0
292.7
3,656
7,307
3,146
6,354
509
952

Geographic Regions*

All Insured
Institutions
4,951
4,336
615
$22,789.0
21,359.1
1,429.9
18,730.7
17,538.2
1,192.5
70,376
66,089
4,287

Less Than
$100
Million
871
761
110
$53.0
46.7
6.3
44.4
39.6
4.9
143
131
13

$10 Billion
to $250
Billion
147
131
16
$6,742.7
6,171.9
570.9
5,603.7
5,148.1
455.6
24,857
22,618
2,239

Greater
Than $250
Billion New York
13
586
12
306
1
280
$12,723.8 $4,216.6
12,365.7
3,783.0
358.1
433.6
10,328.8
3,495.1
10,001.4
3,148.8
327.4
346.3
34,412
11,877
33,839
10,735
573
1,142

2.68
0.18
2.50
1.34
2.23
-0.19
1.23
1.60
1.24
12.37
0.27

3.75
0.39
3.36
1.59
3.39
0.07
1.09
1.24
1.09
8.17
0.07

3.74
0.36
3.38
1.32
2.89
0.07
1.30
1.55
1.32
12.14
0.06

3.61
0.30
3.31
1.17
2.60
-0.01
1.34
1.72
1.37
12.62
0.14

3.26
0.25
3.00
1.29
2.34
-0.18
1.47
1.93
1.49
13.95
0.35

2.11
0.10
2.00
1.39
2.04
-0.25
1.08
1.40
1.09
11.44
0.27

-154.12
61.01
4.16
66.39

187.45
71.94
13.55
53.04

207.42
64.23
2.45
65.61

-13.37
60.38
1.22
78.58

-90.85
56.94
1.36
92.52

3
28
0

3
6
0

0
19
0

0
2
0

Atlanta
565
514
51
$4,652.2
4,512.2
140.0
3,892.6
3,775.8
116.9
13,706
13,569
137

Chicago
1,059
915
144
$5,473.4
5,380.0
93.4
4,289.5
4,220.5
69.0
16,791
16,257
534

Kansas
City
1,276
1,236
40
$4,174.8
4,134.4
40.4
3,422.2
3,389.4
32.8
12,056
11,961
96

Dallas
1,095
1,027
68
$1,887.2
1,310.3
576.9
1,621.6
1,110.4
511.2
5,501
4,573
928

San
Francisco
370
338
32
$2,384.7
2,239.1
145.6
2,009.7
1,893.4
116.3
10,444
8,994
1,451

2.63
0.21
2.42
1.19
2.05
-0.11
1.13
1.46
1.14
11.01
0.25

2.67
0.15
2.52
1.15
2.21
-0.27
1.17
1.51
1.18
11.18
0.32

2.25
0.13
2.12
1.67
2.21
-0.21
1.23
1.60
1.23
13.06
0.20

2.67
0.18
2.49
1.22
2.18
-0.20
1.15
1.50
1.16
11.82
0.34

2.91
0.19
2.72
0.92
2.15
-0.10
1.15
1.44
1.17
11.74
0.08

3.59
0.30
3.30
1.72
2.74
-0.19
1.75
2.30
1.77
17.18
0.36

-252.89
63.42
0.00
84.62

-86.48
59.99
4.44
73.21

-169.89
63.74
6.73
72.04

-291.56
61.12
3.97
62.98

-135.53
62.34
3.37
61.13

-241.15
61.56
3.65
67.21

-88.13
56.29
4.59
72.43

0
1
0

0
0
0

0
2
0

2
2
0

1
7
0

0
7
0

0
10
0

0
0
0

PRIOR SECOND QUARTERS
(The way it was…)
Return on assets (%)
	
	

2020
2018
2016

0.36
1.37
1.06

0.98
1.08
0.92

1.29
1.27
1.10

1.09
1.29
1.06

0.38
1.47
1.13

0.14
1.34
1.02

0.13
1.20
0.90

0.32
1.50
0.96

0.51
1.30
1.01

-0.09
1.27
1.13

0.86
1.42
1.10

0.96
1.76
1.54

Net charge-offs to loans & leases (%)
	
	

2020
2018
2016

0.57
0.48
0.45

0.17
0.11
0.19

0.13
0.11
0.12

0.23
0.27
0.21

0.74
0.69
0.62

0.60
0.43
0.46

0.54
0.60
0.46

0.61
0.54
0.53

0.45
0.25
0.27

0.63
0.49
0.52

0.45
0.21
0.31

0.73
0.70
0.54

* See Table V-A (page 11) for explanations.
** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator
represents the provision for loan and lease losses.

FDIC QUARTERLY 7

2021 • Volume 15 • Number 3
TABLE IV-A. First Half 2021, 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 (%)
Yield on earning assets
Cost of funding earning assets
Net interest margin
Noninterest income to assets
Noninterest expense to assets
Credit loss provision to assets**
Net operating income to assets
Pretax return on assets
Return on assets
Return on equity
Net charge-offs to loans and leases
Loan and lease loss provision to
net charge-offs
Efficiency ratio
% of unprofitable institutions
% of institutions with earnings gains
Condition Ratios (%)
Earning assets to total assets
Loss allowance to:
Loans and leases
Noncurrent loans and leases
Noncurrent assets plus
other real estate owned to assets
Equity capital ratio
Core capital (leverage) ratio
Common equity tier 1 capital ratio***
Tier 1 risk-based capital ratio***
Total risk-based capital ratio***
Net loans and leases to deposits
Net loans to total assets
Domestic deposits to total assets
Structural Changes
New reporters
Institutions absorbed by mergers
Failed institutions

All Insured
Institutions
4,951
4,336
615
$22,789.0
21,359.1
1,429.9
18,730.7
17,538.2
1,192.5
146,655
138,385
8,270

Credit
Card
Banks
11
10
1
$477.8
395.9
81.9
339.6
278.0
61.5
14,072
11,969
2,103

International
Banks
5
5
0
$5,762.7
5,762.7
0.0
4,486.3
4,486.3
0.0
35,175
35,175
0

Agricultural
Banks
1,130
1,119
11
$289.1
282.9
6.2
245.8
242.3
3.4
2,036
1,943
92

Commercial
Lenders
2,586
2,337
249
$7,185.0
6,724.7
460.4
6,016.6
5,654.2
362.4
45,895
43,078
2,816

Mortgage
Lenders
280
77
203
$684.9
118.0
566.9
601.9
101.4
500.6
2,942
721
2,221

Consumer
Lenders
32
20
12
$152.7
146.0
6.7
130.2
124.4
5.8
1,563
1,530
33

Other
Specialized
<$1 Billion
312
283
29
$64.5
59.5
5.0
53.7
50.3
3.4
562
224
338

All Other
<$1 Billion
509
414
95
$119.4
95.7
23.8
102.7
83.1
19.7
647
568
78

All Other
>$1 Billion
86
71
15
$8,052.9
7,773.8
279.1
6,753.8
6,518.1
235.7
43,765
43,177
588

2.72
0.19
2.53
1.36
2.23
-0.23
1.30
1.67
1.31
13.00
0.30

10.58
1.02
9.55
5.17
7.54
-0.83
5.76
7.54
5.77
43.86
2.49

1.97
0.11
1.85
1.69
2.07
-0.34
1.23
1.61
1.24
13.87
0.47

3.85
0.42
3.43
0.70
2.26
0.06
1.42
1.64
1.44
12.95
0.04

3.17
0.23
2.94
1.01
2.20
-0.12
1.29
1.65
1.31
11.92
0.12

1.84
0.16
1.68
0.95
1.49
-0.02
0.85
1.14
0.88
10.16
0.02

3.34
0.51
2.83
0.81
0.96
-0.18
2.08
2.80
2.09
23.38
0.25

2.65
0.26
2.39
3.24
3.30
0.05
1.71
2.22
1.80
12.62
0.08

3.44
0.34
3.10
1.27
2.89
0.05
1.09
1.27
1.11
9.79
0.03

2.35
0.14
2.21
1.26
2.12
-0.23
1.09
1.40
1.11
11.09
0.25

-149.45
60.46
3.37
75.44

-42.67
52.55
0.00
100.00

-227.67
61.63
0.00
60.00

237.29
57.21
2.30
70.88

-143.40
58.83
2.17
84.92

-359.49
57.60
8.57
61.43

-67.19
26.92
3.13
84.38

235.43
59.95
11.54
42.31

307.17
68.97
4.32
63.85

-198.63
64.24
2.33
79.07

91.27

94.85

88.67

93.94

91.96

97.50

97.61

93.86

93.94

91.49

1.80
177.98

8.14
1,001.19

2.07
224.71

1.47
166.18

1.38
138.82

0.73
94.10

1.39
526.21

1.59
176.99

1.29
162.73

1.61
140.69

0.51
10.12
8.83
14.21
14.30
15.72
56.93
46.79
75.32

0.65
13.59
14.25
17.60
17.76
19.55
103.42
73.50
68.80

0.31
9.01
7.93
15.21
15.28
16.70
39.34
30.62
54.33

0.58
11.09
10.48
15.08
15.08
16.21
68.74
58.44
85.02

0.66
10.97
9.43
12.92
12.99
14.34
74.36
62.26
83.54

0.22
9.08
8.69
24.68
24.68
25.11
30.94
27.19
87.72

0.20
8.90
9.30
20.39
20.49
20.95
87.25
74.39
85.26

0.29
13.96
13.22
31.36
31.36
32.28
32.36
26.94
83.26

0.49
11.22
10.90
18.26
18.27
19.35
61.07
52.54
86.01

0.53
9.97
8.48
13.90
14.02
15.57
52.18
43.77
81.57

6
53
0

0
0
0

0
0
0

0
12
0

2
36
0

0
1
0

0
0
0

4
1
0

0
2
0

0
1
0

PRIOR FIRST HALVES
(The way it was...)
Number of institutions
	
	

2020
2018
2016

5,066
5,542
6,058

11
12
13

5
5
4

1,198
1,383
1,466

2,790
2,894
3,029

296
406
491

39
71
63

217
246
324

442
474
605

68
51
63

Total assets (in billions)
	
	

2020
2018
2016

$21,139.3
17,532.9
16,534.0

$504.9
626.4
502.0

$5,241.4
4,222.2
3,966.6

$280.1
283.8
270.7

$7,467.5
6,167.6
5,986.3

$610.4
356.4
396.2

$129.4
216.8
200.9

$38.1
39.7
56.4

$86.0
80.4
104.1

$6,781.6
5,539.6
5,050.8

Return on assets (%)
	
	

2020
2018
2016

0.37
1.33
1.02

0.11
2.71
2.31

0.36
1.22
0.90

1.34
1.32
1.22

0.35
1.24
1.01

1.06
1.08
0.95

1.29
1.31
1.00

2.98
3.63
2.50

1.10
1.07
0.93

0.28
1.35
0.97

Net charge-offs to loans & leases (%)
	
	

2020
2018
2016

0.56
0.49
0.45

4.30
4.02
3.27

0.77
0.53
0.57

0.14
0.13
0.13

0.26
0.17
0.22

0.02
0.02
0.06

0.41
0.97
0.65

0.34
0.11
0.17

0.07
0.13
0.15

0.49
0.37
0.40

Noncurrent assets plus
OREO to assets (%)
	
	

2020
2018
2016

0.59
0.65
0.91

1.10
1.05
0.87

0.37
0.43
0.66

0.88
0.88
0.78

0.66
0.65
0.93

0.24
1.61
1.80

0.38
0.47
0.86

0.37
0.44
0.61

0.64
0.76
1.02

0.68
0.71
1.04

Equity capital ratio (%)
	
	

2020
2018
2016

10.16
11.30
11.27

11.48
15.29
14.81

8.99
10.02
9.95

11.46
11.31
11.58

11.15
11.91
11.88

8.61
11.23
11.59

9.58
10.35
10.24

16.40
16.62
15.48

12.36
11.86
11.98

9.90
11.12
11.18

* See Table V-A (page 10) for explanations.
** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator
represents the provision for loan and lease losses.
*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.

8 FDIC QUARTERLY

QUARTERLY BANKING PROFILE
TABLE IV-A. First Half 2021, 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 (%)
Yield on earning assets
Cost of funding earning assets
Net interest margin
Noninterest income to assets
Noninterest expense to assets
Credit loss provision to assets**
Net operating income to assets
Pretax return on assets
Return on assets
Return on equity
Net charge-offs to loans and leases
Loan and lease loss provision to
net charge-offs
Efficiency ratio
% of unprofitable institutions
% of institutions with earnings gains
Condition Ratios (%)
Earning assets to total assets
Loss allowance to:
Loans and leases
Noncurrent loans and leases
Noncurrent assets plus
other real estate owned to assets
Equity capital ratio
Core capital (leverage) ratio
Common equity tier 1 capital ratio***
Tier 1 risk-based capital ratio***
Total risk-based capital ratio***
Net loans and leases to deposits
Net loans to total assets
Domestic deposits to total assets
Structural Changes
New reporters
Institutions absorbed by mergers
Failed institutions

$100
Million to $1 Billion to
$1 Billion $10 Billion
3,103
817
2,754
678
349
139
$1,117.8
$2,151.8
980.7
1,794.2
137.1
357.6
953.4
1,800.4
841.4
1,507.7
112.0
292.7
7,320
15,237
6,290
13,243
1,030
1,993

Geographic Regions*

All Insured
Institutions
4,951
4,336
615
$22,789.0
21,359.1
1,429.9
18,730.7
17,538.2
1,192.5
146,655
138,385
8,270

Less Than
$100
Million
871
761
110
$53.0
46.7
6.3
44.4
39.6
4.9
283
257
26

$10 Billion
to $250
Billion
147
131
16
$6,742.7
6,171.9
570.9
5,603.7
5,148.1
455.6
50,619
46,556
4,063

Greater
Than $250
Billion New York
13
586
12
306
1
280
$12,723.8 $4,216.6
12,365.7
3,783.0
358.1
433.6
10,328.8
3,495.1
10,001.4
3,148.8
327.4
346.3
73,197
23,948
72,039
21,723
1,158
2,224

2.72
0.19
2.53
1.36
2.23
-0.23
1.30
1.67
1.31
13.00
0.30

3.76
0.41
3.35
1.61
3.43
0.06
1.08
1.23
1.09
8.07
0.06

3.77
0.39
3.38
1.36
2.91
0.08
1.32
1.58
1.34
12.23
0.05

3.67
0.32
3.34
1.25
2.59
0.01
1.42
1.82
1.45
13.30
0.14

3.30
0.26
3.04
1.29
2.33
-0.20
1.52
1.99
1.54
14.35
0.37

2.14
0.11
2.03
1.41
2.06
-0.30
1.16
1.49
1.17
12.26
0.33

-149.45
60.46
3.37
75.44

171.24
72.73
11.25
59.59

276.36
63.99
2.03
75.09

16.67
58.62
0.49
90.58

-85.58
56.34
1.36
92.52

91.27

92.56

93.94

93.53

1.80
177.98

1.46
135.56

1.36
194.67

0.51
10.12
8.83
14.21
14.30
15.72
56.93
46.79
75.32

0.66
13.42
13.04
23.54
23.54
24.59
60.83
51.05
83.91

6
53
0

Atlanta
565
514
51
$4,652.2
4,512.2
140.0
3,892.6
3,775.8
116.9
28,670
28,279
391

Chicago
1,059
915
144
$5,473.4
5,380.0
93.4
4,289.5
4,220.5
69.0
35,914
34,821
1,093

Kansas
City
1,276
1,236
40
$4,174.8
4,134.4
40.4
3,422.2
3,389.4
32.8
25,936
25,716
220

Dallas
1,095
1,027
68
$1,887.2
1,310.3
576.9
1,621.6
1,110.4
511.2
10,991
9,144
1,847

San
Francisco
370
338
32
$2,384.7
2,239.1
145.6
2,009.7
1,893.4
116.3
21,196
18,701
2,495

2.67
0.23
2.44
1.20
2.08
-0.13
1.15
1.49
1.17
11.19
0.30

2.70
0.16
2.54
1.17
2.18
-0.28
1.24
1.58
1.25
11.75
0.34

2.28
0.12
2.16
1.72
2.24
-0.31
1.34
1.74
1.34
14.11
0.24

2.70
0.19
2.52
1.25
2.21
-0.25
1.23
1.58
1.25
12.79
0.38

2.94
0.20
2.74
0.97
2.18
-0.07
1.17
1.45
1.19
11.87
0.11

3.65
0.32
3.33
1.72
2.68
-0.17
1.79
2.38
1.82
17.66
0.39

-238.65
63.12
0.00
76.92

-84.85
60.25
4.10
83.45

-165.02
62.30
6.73
75.93

-319.69
60.88
3.40
73.28

-125.94
62.16
1.96
74.45

-132.45
61.06
2.83
71.96

-66.16
54.86
3.51
81.89

92.59

89.94

90.94

90.98

90.29

90.50

93.77

94.05

1.42
190.22

1.94
170.48

1.85
180.92

1.70
171.41

1.85
189.20

1.66
179.34

2.01
184.72

1.34
74.64

2.07
330.35

0.50
10.93
10.61
16.12
16.15
17.28
70.41
60.06
85.29

0.55
10.94
10.20
14.62
14.64
15.76
75.84
63.45
83.57

0.68
10.72
9.50
14.06
14.27
15.59
69.30
57.59
81.13

0.40
9.57
8.07
14.09
14.12
15.68
45.66
37.06
69.93

0.50
10.35
9.05
14.19
14.26
15.64
57.94
48.03
77.55

0.48
10.61
8.50
13.75
13.85
15.11
55.06
46.07
81.04

0.43
9.59
8.38
14.44
14.50
15.85
53.93
42.27
69.11

0.52
9.82
8.90
13.68
13.77
15.71
55.02
45.10
65.65

0.89
10.22
8.93
15.18
15.28
16.40
54.29
46.65
85.89

0.41
10.39
9.86
14.88
15.07
16.30
70.55
59.46
83.02

6
14
0

0
34
0

0
4
0

0
1
0

0
0
0

0
7
0

2
5
0

2
10
0

0
15
0

1
14
0

1
2
0

PRIOR FIRST HALVES
(The way it was…)
Number of institutions
	
	

2020
2018
2016

5,066
5,542
6,058

1,010
1,372
1,637

3,153
3,399
3,690

755
637
619

135
125
102

13
9
10

607
675
739

576
645
743

1,085
1,195
1,305

1,306
1,412
1,519

1,121
1,205
1,292

371
410
460

Total assets (in billions)
	
	

2020
2018
2016

$21,139.3
17,532.9
16,534.0

$60.6
81.8
96.7

$1,096.0
1,112.2
1,173.6

$2,024.4
1,706.7
1,724.1

$6,097.9
5,951.5
4,897.6

$11,860.4
8,680.7
8,642.0

$3,870.1
3,276.4
3,127.7

$4,363.0
3,614.2
3,467.9

$4,957.6
3,957.2
3,692.0

$4,123.9
3,626.7
3,604.1

$1,684.2
1,114.0
976.1

$2,140.6
1,944.4
1,666.2

Return on assets (%)
	
	

2020
2018
2016

0.37
1.33
1.02

0.93
1.02
0.92

1.18
1.23
1.07

0.94
1.28
1.05

0.12
1.42
1.08

0.33
1.29
0.97

0.34
1.17
0.85

0.18
1.41
0.92

0.50
1.29
0.97

0.20
1.22
1.08

0.82
1.38
1.07

0.51
1.70
1.44

Net charge-offs to loans & leases (%)
	
	

2020
2018
2016

0.56
0.49
0.45

0.15
0.15
0.15

0.12
0.10
0.11

0.22
0.22
0.20

0.75
0.71
0.62

0.57
0.44
0.47

0.52
0.61
0.47

0.62
0.55
0.53

0.44
0.25
0.27

0.58
0.51
0.53

0.38
0.21
0.31

0.77
0.72
0.53

Noncurrent assets plus
OREO to assets (%)
	
	

2020
2018
2016

0.59
0.65
0.91

0.91
0.99
1.17

0.69
0.80
1.05

0.66
0.69
0.89

0.74
0.63
0.83

0.50
0.63
0.94

0.56
0.61
0.73

0.52
0.72
1.08

0.52
0.60
0.85

0.74
0.74
1.10

0.79
0.76
1.05

0.55
0.46
0.55

Equity capital ratio (%)
	
	

2020
2018
2016

10.16
11.30
11.27

13.59
13.35
12.97

11.19
11.32
11.47

10.82
11.74
11.78

10.88
12.14
12.21

9.56
10.61
10.60

10.61
12.49
12.01

10.64
12.08
12.37

9.62
10.49
10.31

9.57
10.26
10.15

10.41
11.55
11.21

10.49
11.26
12.22

* See Table V-A (page 11) for explanations.
** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator
represents the provision for loan and lease losses.
*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.

FDIC QUARTERLY 9

2021 • Volume 15 • Number 3
TABLE V-A. Loan Performance, All FDIC-Insured Institutions
Asset Concentration Groups*
All Insured
Institutions

Credit
Card
Banks

International
Banks

Agricultural
Banks

Commercial
Lenders

Mortgage
Lenders

Consumer
Lenders

Other
Specialized
<$1 Billion

All Other
<$1 Billion

All Other
>$1 Billion

Percent of Loans 30-89 Days Past Due
All loans secured by real estate
Construction and development
Nonfarm nonresidential
Multifamily residential real estate
Home equity loans
Other 1-4 family residential
Commercial and industrial loans
Loans to individuals
Credit card loans
Other loans to individuals
All other loans and leases (including farm)
Total loans and leases

0.42
0.28
0.20
0.17
0.36
0.68
0.24
0.82
0.73
0.91
0.24
0.42

0.25
0.00
0.00
0.00
0.00
0.26
0.30
0.85
0.85
0.79
0.17
0.79

0.35
0.08
0.33
0.05
0.44
0.45
0.51
0.63
0.58
0.78
0.33
0.43

0.40
0.63
0.25
0.13
0.37
0.57
0.55
0.68
0.63
0.69
0.50
0.45

0.30
0.30
0.18
0.20
0.29
0.51
0.18
0.60
0.97
0.58
0.24
0.28

0.27
0.68
0.24
0.16
0.23
0.27
0.16
0.19
0.76
0.17
0.03
0.25

0.11
0.14
0.09
0.00
0.18
0.12
0.02
0.68
0.55
0.68
0.01
0.47

0.62
0.86
0.42
0.26
0.46
0.81
0.45
0.91
1.95
0.86
0.75
0.63

0.57
0.42
0.47
0.15
0.43
0.68
0.46
0.78
0.57
0.78
0.51
0.57

0.70
0.18
0.20
0.19
0.45
1.01
0.20
1.03
0.70
1.17
0.16
0.55

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

1.45
0.60
0.89
0.28
2.13
2.22
0.82
0.63
0.81
0.48
0.32
1.01

0.71
2.36
0.00
0.00
0.00
0.69
0.26
0.88
0.92
0.30
0.00
0.81

1.64
2.10
1.08
0.31
5.62
1.92
1.06
0.58
0.70
0.27
0.29
0.92

0.89
0.57
0.79
0.35
0.25
0.64
0.91
0.36
0.26
0.38
0.94
0.89

1.21
0.42
0.82
0.25
1.29
2.42
0.77
0.42
0.97
0.39
0.41
0.99

0.85
1.17
0.62
0.78
0.58
0.88
0.62
0.09
0.51
0.07
0.31
0.78

0.26
0.41
0.59
0.33
0.45
0.23
0.21
0.29
0.43
0.29
0.04
0.26

1.05
0.87
1.05
0.17
0.29
1.02
0.55
0.42
0.71
0.40
0.58
0.90

0.83
0.37
1.01
0.44
0.52
0.81
0.78
0.39
0.25
0.39
0.96
0.79

2.00
0.91
1.13
0.34
2.57
2.50
0.81
0.67
0.79
0.62
0.26
1.15

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
0.02
0.06
0.02
-0.17
-0.02
0.24
1.46
2.73
0.39
0.10
0.30

0.04
0.62
0.00
0.00
0.00
0.03
0.94
2.68
2.76
1.41
0.00
2.49

-0.06
0.00
0.04
0.00
-0.54
-0.06
0.34
2.03
2.66
0.31
0.06
0.47

0.02
0.02
0.04
0.07
0.00
0.02
0.07
0.21
0.76
0.14
0.04
0.04

0.03
0.02
0.08
0.02
-0.06
-0.01
0.24
0.59
3.29
0.41
0.11
0.12

0.00
-0.02
0.01
0.26
-0.05
-0.01
0.01
0.32
2.35
0.25
0.04
0.02

0.00
0.00
0.05
-0.01
0.00
0.00
0.33
0.33
1.25
0.33
0.00
0.25

-0.03
-0.12
-0.07
0.00
0.00
0.00
-0.18
0.79
0.39
0.81
1.24
0.08

0.01
0.00
0.01
0.00
-0.02
0.01
0.10
0.14
1.32
0.13
0.04
0.03

-0.01
0.01
0.03
0.02
-0.22
-0.01
0.16
1.05
2.73
0.36
0.12
0.25

$5,109.2
393.5
1,594.9
490.5
277.9
2,180.5
2,335.9
1,757.4
792.0
965.4
1,658.7
10,861.2

$2.1
0.0
0.0
0.0
0.0
2.0
37.8
341.9
320.4
21.5
0.6
382.3

$564.0
17.8
59.9
83.6
27.6
320.0
351.0
360.8
261.3
99.5
526.3
1,802.1

$105.3
6.4
27.9
3.7
1.6
24.1
25.0
5.9
0.7
5.3
35.3
171.5

$2,760.9
285.6
1,158.1
321.4
145.1
800.9
1,134.3
278.1
17.3
260.8
365.4
4,538.8

$161.3
4.8
13.4
3.8
7.1
131.5
8.5
11.4
0.3
11.1
6.5
187.7

$25.8
0.2
1.5
0.4
0.2
23.5
8.8
75.7
0.4
75.3
4.9
115.2

$12.6
1.1
4.1
0.4
0.3
5.7
2.7
1.5
0.1
1.4
0.9
17.7

$49.1
3.5
11.0
1.5
1.6
27.9
6.7
5.2
0.0
5.1
2.6
63.6

$1,428.0
74.0
319.1
75.8
94.4
844.9
761.0
677.0
191.5
485.5
716.1
3,582.3

4,149.2
801.4
2,302.2
61.3
848.4
100.3

7.3
0.2
7.0
0.0
0.1
0.0

251.2
1.0
88.0
1.0
126.2
0.0

162.3
23.6
61.6
1.3
28.2
47.7

2,574.5
679.4
1,450.2
56.6
340.7
47.7

48.6
10.8
13.3
0.7
23.9
0.0

2.9
1.7
0.2
0.0
0.9
0.0

28.2
10.1
11.8
0.0
5.8
0.5

81.0
19.7
32.1
1.1
24.8
3.3

993.4
55.0
638.0
0.6
297.9
1.2

June 30, 2021

Loans Outstanding (in billions)
All real estate loans
Construction and development
Nonfarm nonresidential
Multifamily residential real estate
Home equity loans
Other 1-4 family residential
Commercial and industrial loans
Loans to individuals
Credit card loans
Other loans to individuals
All other loans and leases (including farm)
Total loans and leases (plus unearned income)
Memo: Other Real Estate Owned (in millions)
All other real estate owned
Construction and development
Nonfarm nonresidential
Multifamily residential real estate
1-4 family residential
Farmland

* Asset Concentration Group Definitions (Groups are hierarchical and mutually exclusive):
Credit-card Lenders - Institutions whose credit-card loans plus securitized receivables exceed 50 percent of total assets plus securitized receivables.
International Banks - Banks with assets greater than $10 billion and more than 25 percent of total assets in foreign offices.
Agricultural Banks - Banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of the total loans and leases.
Commercial Lenders - Institutions whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties exceed
25 percent of total assets.
Mortgage Lenders - Institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets.
Consumer Lenders - Institutions whose residential mortgage loans, plus credit-card loans, plus other loans to individuals, exceed 50 percent of total assets.
Other Specialized < $1 Billion - Institutions with assets less than $1 billion, whose loans and leases are less than 40 percent of total assets.
All Other < $1 billion - Institutions with assets less than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations.
All Other > $1 billion - Institutions with assets greater than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations.
** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.

10 FDIC QUARTERLY

QUARTERLY BANKING PROFILE
TABLE V-A. Loan Performance, All FDIC-Insured Institutions
Asset Size Distribution

Geographic Regions*

All Insured
Institutions

Less Than
$100
Million

$100
Million to
$1 Billion

$1 Billion
to
$10 Billion

$10 Billion
to $250
Billion

Percent of Loans 30-89 Days Past Due
All loans secured by real estate
Construction and development
Nonfarm nonresidential
Multifamily residential real estate
Home equity loans
Other 1-4 family residential
Commercial and industrial loans
Loans to individuals
Credit card loans
Other loans to individuals
All other loans and leases (including farm)
Total loans and leases

0.42
0.28
0.20
0.17
0.36
0.68
0.24
0.82
0.73
0.91
0.24
0.42

0.81
0.66
0.63
0.93
0.32
1.06
0.73
0.98
0.88
0.98
0.43
0.76

0.34
0.41
0.23
0.17
0.34
0.47
0.31
1.20
1.60
1.17
0.46
0.38

0.23
0.31
0.17
0.15
0.22
0.31
0.24
0.99
2.08
0.61
0.21
0.27

0.33
0.29
0.20
0.20
0.31
0.50
0.17
0.72
0.76
0.68
0.20
0.36

0.64
0.16
0.20
0.12
0.45
0.95
0.29
0.89
0.63
1.13
0.25
0.52

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

1.45
0.60
0.89
0.28
2.13
2.22
0.82
0.63
0.81
0.48
0.32
1.01

1.08
0.65
1.17
0.67
0.69
1.00
1.20
0.61
0.57
0.61
1.14
1.08

0.72
0.59
0.73
0.26
0.66
0.72
0.59
0.47
1.28
0.42
0.89
0.70

0.75
0.46
0.75
0.26
0.55
1.01
0.85
0.69
1.75
0.33
0.35
0.75

1.68
0.40
0.94
0.23
1.28
3.08
0.78
0.63
0.87
0.43
0.40
1.14

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
0.02
0.06
0.02
-0.17
-0.02
0.24
1.46
2.73
0.39
0.10
0.30

0.02
0.00
0.01
0.00
-0.02
0.01
0.17
0.22
2.76
0.19
0.11
0.06

0.00
-0.01
0.01
0.00
0.00
0.00
0.11
0.54
3.66
0.32
0.12
0.05

0.02
-0.01
0.04
0.02
-0.02
-0.01
0.16
1.62
5.11
0.37
0.09
0.14

$5,109.2
393.5
1,594.9
490.5
277.9
2,180.5
2,335.9
1,757.4
792.0
965.4
1,658.7

$18.2
1.0
3.8
0.4
0.3
8.8
4.0
1.7
0.0
1.7
3.6

$501.5
47.0
191.6
28.7
14.8
170.7
113.1
26.8
1.7
25.1
39.8

10,861.2

27.4

4,149.2
801.4
2,302.2
61.3
848.4
100.3

54.0
8.9
19.1
6.4
17.1
2.4

June 30, 2021

Loans Outstanding (in billions)
All real estate loans
Construction and development
Nonfarm nonresidential
Multifamily residential real estate
Home equity loans
Other 1-4 family residential
Commercial and industrial loans
Loans to individuals
Credit card loans
Other loans to individuals
All other loans and leases (including farm)
Total loans and leases
(plus unearned income)
Memo: Other Real Estate Owned
(in millions)
All other real estate owned
Construction and development
Nonfarm nonresidential
Multifamily residential real estate
1-4 family residential
Farmland

Greater
Than $250
Billion New York

Atlanta

Chicago

Kansas
City

Dallas

San
Francisco

0.33
0.45
0.22
0.21
0.28
0.46
0.13
0.69
0.81
0.61
0.06
0.31

0.43
0.27
0.18
0.09
0.42
0.68
0.23
1.21
0.85
1.49
0.17
0.49

0.40
0.20
0.21
0.07
0.37
0.61
0.30
0.53
0.51
0.55
0.31
0.38

0.72
0.19
0.17
0.31
0.53
1.25
0.32
0.77
0.68
0.92
0.32
0.56

0.40
0.24
0.18
0.15
0.33
0.79
0.27
0.61
0.38
0.68
0.22
0.37

0.22
0.32
0.22
0.20
0.15
0.21
0.21
0.87
0.82
0.91
0.28
0.38

1.81
1.14
1.08
0.39
3.43
2.18
0.85
0.63
0.73
0.54
0.26
1.02

1.38
1.14
1.24
0.31
2.00
1.90
0.77
0.67
0.99
0.47
0.16
0.99

1.48
0.40
0.76
0.57
1.60
2.27
0.78
0.75
0.88
0.65
0.18
0.98

1.48
0.98
1.00
0.30
2.61
1.90
0.72
0.36
0.58
0.20
0.33
0.93

1.54
0.29
1.02
0.18
3.58
2.05
1.07
0.69
0.83
0.45
0.44
1.09

2.46
0.27
0.57
0.18
1.00
6.46
0.79
0.52
0.86
0.42
0.31
1.80

0.56
0.38
0.65
0.14
0.91
0.59
0.78
0.69
0.80
0.61
0.52
0.63

0.04
0.05
0.11
0.03
-0.07
-0.01
0.30
1.44
2.64
0.42
0.14
0.37

-0.03
0.01
0.02
0.01
-0.30
-0.03
0.22
1.49
2.68
0.36
0.08
0.33

0.04
0.09
0.10
0.03
-0.08
-0.01
0.20
1.53
3.00
0.54
0.08
0.30

0.01
0.05
0.06
0.05
-0.16
-0.01
0.25
1.35
2.71
0.26
0.13
0.34

-0.01
0.01
0.08
0.00
-0.20
-0.04
0.25
1.18
2.49
0.14
0.06
0.24

-0.01
-0.01
0.06
0.04
-0.30
-0.03
0.27
2.10
2.89
0.76
0.07
0.38

0.00
0.00
0.03
-0.01
-0.14
0.00
0.22
0.69
1.76
0.34
0.05
0.11

0.01
-0.05
0.06
0.00
-0.08
0.00
0.20
1.42
2.69
0.43
0.24
0.39

$964.0
96.3
418.3
106.3
34.5
277.3
268.1
80.5
20.7
59.8
73.3

$1,891.7
164.3
648.9
218.5
103.3
740.7
857.2
756.1
342.6
413.5
456.8

$1,733.8
85.0
332.4
136.5
125.0
982.9
1,093.5
892.4
427.0
465.4
1,085.2

$1,069.7
78.5
363.8
168.8
62.6
390.9
420.1
311.5
122.3
189.3
260.1

$909.8
64.8
307.2
44.4
64.8
415.4
540.8
412.0
179.4
232.7
321.5

$1,031.2
65.4
243.6
121.4
68.6
507.9
529.3
353.4
152.6
200.8
438.8

$844.1
54.7
204.2
44.7
39.8
401.0
392.0
279.4
177.8
101.6
406.3

$569.1
83.1
236.5
27.1
18.0
185.1
185.0
66.6
15.9
50.6
72.2

$685.3
47.0
239.6
84.1
24.0
280.1
268.7
334.5
144.1
190.5
159.8

681.2

1,385.9

3,961.8

4,804.8

2,061.4

2,184.1

2,352.7

1,921.8

892.9

1,448.2

823.6
326.6
287.6
30.6
125.0
53.9

1,355.2
236.1
942.1
15.1
124.3
36.9

875.0
197.8
391.4
7.4
271.4
7.0

1,041.4
32.0
662.0
1.8
310.6
0.0

522.2
89.8
201.2
8.0
223.1
0.1

993.1
187.4
607.2
19.7
166.5
12.4

677.7
84.9
325.7
8.2
221.7
11.6

534.4
128.1
254.0
5.7
98.6
38.0

803.8
262.2
404.3
12.9
97.1
27.3

618.0
49.1
509.9
6.7
41.5
10.9

* Regions:
New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, U.S. Virgin Islands
Atlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia
Chicago - Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin
Kansas City - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota
Dallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, Texas
San Francisco - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming
** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.

FDIC QUARTERLY 11

2021 • Volume 15 • Number 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
2021

1st
Quarter
2021

4th
Quarter
2020

3rd
Quarter
2020

2nd
Quarter
2020

%
Change
20Q22  1Q2

1,373
$21,044,777
17,273,924
186,058,286

1,388
$20,832,558
17,013,783
191,684,231

1,388
$20,149,449
16,393,959
165,711,793

1,374
$19,491,668
15,709,088
181,124,686

1,381
$19,425,459
15,570,184
181,707,660

-0.6
8.3
10.9
2.4

28
$1,933
1,599
253

662
$311,562
264,276
21,941

534
$1,562,783
1,308,436
205,856

136
$6,444,725
5,370,840
4,588,195

13
$12,723,774
10,328,773
181,242,041

Derivative Contracts by Underlying Risk Exposure
Interest rate
Foreign exchange*
Equity
Commodity & other (excluding credit derivatives)
Credit
Total

133,334,821
43,728,636
4,254,960
1,631,946
3,106,414
186,056,777

137,477,448
45,257,498
4,004,712
1,582,254
3,361,030
191,682,942

116,058,430
41,448,704
3,774,715
1,394,504
3,034,285
165,710,638

129,835,475
42,148,550
4,022,629
1,536,154
3,580,623
181,123,431

132,119,135
41,266,839
3,574,339
1,491,420
3,254,590
181,706,323

0.9
6.0
19.0
9.4
-4.6
2.4

252
0
0
0
0
252

21,568
0
21
0
25
21,614

197,956
3,507
34
68
3,111
204,676

2,698,316
1,659,012
78,161
98,104
54,600
4,588,195

130,416,728
42,066,117
4,176,744
1,533,774
3,048,678
181,242,041

Derivative Contracts by Transaction Type
Swaps
Futures & forwards
Purchased options
Written options
Total

106,971,001
37,583,984
17,945,500
17,894,265
180,394,750

107,719,719
40,934,399
18,603,556
18,371,380
185,629,054

96,423,495
32,350,455
16,098,917
15,891,741
160,764,608

99,580,043
39,822,587
17,889,179
17,706,928
174,998,738

101,734,113
41,019,662
16,881,937
16,682,488
176,318,200

5.1
-8.4
6.3
7.3
2.3

2
0
0
1
3

2,347
4,163
270
3,894
10,674

122,014
21,481
15,145
16,809
175,450

2,368,077
1,781,514
152,474
154,158
4,456,224

104,478,561
35,776,825
17,777,611
17,719,402
175,752,399

63,859
10,331
-13,321
6,125
16,825
-21,074

69,365
13,849
-6,866
3,967
16,748
-18,373

70,648
-11,466
-7,165
-452
14,331
-18,166

73,198
-7,256
-700
-1,087
3,830
-7,167

60,216
-19,636
-1,171
-3,800
-3,347
553

6.0
N/M
1,037.6
N/M
N/M
N/M

0
0
0
0
0
0

20
0
6
0
0
0

229
3
2
0
15
-15

10,737
947
-984
207
-110
-176

52,872
9,382
-12,345
5,918
16,920
-20,883

71,258,970
45,947,274
22,279,960
30,839,509
4,557,853
2,502,654
3,806,830
957,152
153,371

76,501,727
44,407,789
22,231,036
32,130,016
4,336,231
2,405,347
3,504,313
870,551
124,452

62,457,197
39,201,919
20,844,428
29,434,113
4,404,492
2,402,103
3,287,136
770,821
138,573

76,385,765
39,963,944
20,500,301
29,396,427
4,299,182
2,299,468
3,210,066
882,054
133,921

80,160,078
41,098,879
19,986,413
29,049,567
4,238,687
2,179,498
2,850,740
825,667
128,679

-11.1
11.8
11.5
6.2
7.5
14.8
33.5
15.9
19.2

1
7
0
0
0
0
0
0
0

4,701
1,996
2,973
0
0
0
7
14
0

26,405
45,368
82,791
2,672
347
10
5
4
4

1,274,896
812,193
469,000
1,512,885
100,156
16,293
33,646
40,352
2,586

69,952,968
45,087,709
21,725,196
29,323,952
4,457,350
2,486,351
3,773,172
916,782
150,780

2,234,059
2,137,329
215,834

2,149,899
2,050,971
435,795

1,820,961
2,023,406
215,486

1,926,264
2,249,588
433,136

1,860,285
2,163,848
227,777

20.1
-1.2
-5.2

0
0
0

10
11
69

68
813
1,515

37,625
39,847
7,330

2,196,356
2,096,658
206,920

24.8
34.9

25.6
34.0

30.2
31.0

29.9
32.5

31.9
29.8

0.4
0.0

0.3
0.2

1.9
1.1

5.4
4.9

40.5
58.7

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 (%)

Less
Than
$100
Million

$100
Million
to $1
Billion

$1
Billion
to $10
Billion

$10
Billion
to $250
Billion

Greater
Than
$250
Billion

59.7

59.6

61.2

62.4

61.8

0.4

0.5

3.0

10.3

99.2

21.5

6.8

137.3

130.7

124.8

-82.8

0.0

5.1

-0.1

6.0

10.6

190
16,326,433
13,321,986

188
16,185,202
13,124,988

187
15,885,372
12,847,286

185
15,380,670
12,338,386

185
15,391,035
12,272,454

2.7
6.1
8.6

0
0
0

21
10,152
8,669

88
331,938
277,438

70
4,034,178
3,396,712

11
11,950,165
9,639,166

Derivative Contracts by Underlying Risk Exposure
Interest rate
Foreign exchange
Equity
Commodity & other
Total

129,126,796
40,661,753
4,225,427
1,594,653
175,608,628

133,860,018
42,039,817
3,976,351
1,544,723
181,420,909

112,807,097
39,084,210
3,746,888
1,358,385
156,996,580

126,595,325
39,147,645
3,997,150
1,501,890
171,242,010

129,050,986
38,663,882
3,549,571
1,458,446
172,722,886

0.1
5.2
19.0
9.3
1.7

0
0
0
0
0

514
0
0
0
514

43,737
3,176
3
19
46,936

Trading Revenues: Cash & Derivative Instruments
Interest rate**
Foreign exchange**
Equity**
Commodity & other (including credit derivatives)**
Total trading revenues**

3,373
1,546
2,384
767
8,070

-29
6,343
2,388
1,772
10,474

3,625
18
2,480
191
6,314

2,826
1,942
750
1,380
6,898

4,638
3,841
3,139
2,036
13,653

-27.3
-59.8
-24.1
-62.3
-40.9

0
0
0
0
0

0
0
0
0
0

5
6
16
0
27

-20
226
-1
87
293

3,389
1,314
2,369
679
7,750

5.9
18.1

7.5
21.0

4.6
16.8

4.9
22.0

9.2
302.5

0.0
0.0

0.0
0.0

0.8
2.7

0.9
2.8

7.7
23.5

609
20,003,432
16,400,333

615
19,837,879
16,179,892

623
19,263,989
15,655,539

620
18,645,439
15,010,871

626
18,558,616
14,856,297

-2.7
7.8
10.4

2
111
92

147
75,405
63,447

323
1,144,952
954,373

124
6,059,191
5,053,648

13
12,723,774
10,328,773

4,170,881
548,414
29,534
37,294
4,786,122

3,573,201
569,053
28,361
37,531
4,208,145

3,192,677
511,407
27,826
36,119
3,768,028

3,162,582
534,403
25,479
34,264
3,756,727

3,010,232
527,340
24,768
32,974
3,595,314

38.6
4.0
19.2
13.1
33.1

3
0
0
0
3

10,139
0
21
0
10,160

128,238
196
31
49
128,514

1,289,228
37,465
10,100
3,238
1,340,032

2,743,272
510,753
19,381
34,006
3,307,413

Credit losses on derivatives****
HELD FOR TRADING
Number of institutions reporting derivatives
Total assets of institutions reporting derivatives
Total deposits of institutions reporting derivatives

Share of Revenue
Trading revenues to gross revenues (%)**
Trading revenues to net operating revenues (%)**
HELD FOR PURPOSES OTHER THAN TRADING
Number of institutions reporting derivatives
Total assets of institutions reporting derivatives
Total deposits of institutions reporting derivatives
Derivative Contracts by Underlying Risk Exposure
Interest rate
Foreign exchange
Equity
Commodity & other
Total notional amount

1,409,088 127,673,456
1,544,177 39,114,400
68,061
4,157,363
94,866
1,499,767
3,116,192 172,444,987

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
2021

1st
Quarter
2021

4th
Quarter
2020

3rd
Quarter
2020

2nd
Quarter
2020

%
Change
20Q221Q2

Less
Than
$100
Million

$100
Million
to $1
Billion

$1
Billion
to $10
Billion

$10
Billion
to $250
Billion

Greater
Than
$250
Billion

35

8

60

59

57

58

61

-1.6

0

6

11

$356,054
7
0
316
1,388
0
95,055
377,736

$358,230
7
0
392
1,469
0
91,085
383,561

$382,125
8
0
289
1,569
0
87,334
363,080

$406,116
8
0
579
1,669
0
88,993
390,560

$449,854
9
0
980
1,512
0
90,064
434,330

-20.9
-22.2
0.0
-67.8
-8.2
0.0
5.5
-13.0

$0
0
0
0
0
0
0
0

$5,469
0
0
0
0
0
0
0

$13,862
0
0
0
0
0
7,661
0

964
0
0
26
0
0
2,301
0
67

1,057
0
0
26
0
0
2,274
0
76

1,210
0
0
26
0
0
2,029
0
71

1,403
0
0
38
0
0
2,010
0
71

1,522
0
0
48
0
0
2,205
0
32

-36.7
0.0
0.0
-45.8
0.0
0.0
4.4
0.0
109.4

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

51
0
0
0
0
0
63
0
0

541
0
0
26
0
0
116
0
0

372
0
0
0
0
0
2,122
0
67

1.9
1.9
0.0
2.0
2.4
0.0
0.6
1.7

2.0
6.3
0.0
1.9
2.9
0.0
0.5
1.8

2.7
5.3
0.0
4.2
3.1
0.0
0.6
2.5

3.0
7.2
0.0
3.1
2.3
0.0
1.5
3.1

5.9
8.3
0.0
2.6
3.0
0.0
4.7
6.5

0.0
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
0.0
0.0

0.1
0.0
0.0
0.0
0.0
0.0
0.4
0.0

1.2
1.9
0.0
2.0
1.3
0.0
1.2
0.8

2.3
0.0
0.0
0.0
3.5
0.0
0.5
1.8

2.4
27.3
0.0
0.2
2.2
0.0
1.9
2.1

2.7
24.5
0.0
0.2
2.4
0.0
1.8
2.3

3.0
28.9
0.0
0.6
2.4
0.0
2.4
2.5

2.9
27.8
0.0
0.8
2.2
0.0
2.9
2.8

4.6
28.9
0.0
0.9
3.2
0.0
0.4
4.3

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

1.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.2
0.0
0.0
0.0
0.0
0.0
1.5
0.0

3.6
27.3
0.0
0.2
1.0
0.0
0.3
2.8

2.0
0.0
0.0
0.0
3.6
0.0
2.1
2.0

0.0
1.7
0.0
0.0
0.2
0.0
0.1
0.0

0.0
1.8
0.0
0.1
0.1
0.0
0.1
0.0

0.1
11.9
0.0
3.6
1.0
0.0
0.2
0.1

0.1
10.2
0.0
2.0
0.8
0.0
0.2
0.1

0.1
8.4
0.0
1.1
0.4
0.0
0.1
0.1

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.0
1.7
0.0
0.0
0.1
0.0
0.3
0.0

0.0
0.0
0.0
0.0
0.3
0.0
0.1
0.0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0.0
0.0
0.0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0.0
0.0
0.0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

$103,179 $233,545
7
0
0
0
316
0
716
672
0
0
5,596
81,798
61,721 316,015

345

340

343

347

345

0.0

3

110

154

69

9

37,950
135,583
173,533

36,084
135,492
171,577

35,364
131,293
166,657

31,869
128,103
159,972

28,990
126,493
155,483

30.9
7.2
11.6

14
0
14

6,283
12
6,295

17,855
342
18,197

12,479
36,897
49,377

1,320
98,331
99,651

Maximum Credit Exposure by Asset Type
1-4 family residential loans
All other loans, leases, and other assets
Total credit exposure

14,644
39,279
53,923

13,149
39,242
52,391

13,564
37,880
51,444

12,870
36,997
49,867

10,753
36,423
47,176

36.2
7.8
14.3

1
0
1

762
12
774

6,784
51
6,835

6,443
11,710
18,153

654
27,507
28,161

Support for Securitization Facilities Sponsored by Other Institutions
Number of institutions reporting securitization facilities sponsored by others
Total credit exposure
Total unused liquidity commitments

37
22,536
408

38
23,478
415

37
23,986
418

37
24,893
412

35
26,480
413

5.7
-14.9
-1.2

1
0
0

10
0
0

14
0
0

8
1,559
295

4
20,977
113

5,704,566

5,624,357

5,781,994

5,804,674

5,912,001

-3.5

2,717

161,475

392,024

1,288,833

3,859,518

20,683

18,417

19,694

17,209

17,348

19.2

0

0

0

0

20,683

54,035
204
142
3.4

56,072
3,435
106
3.5

56,904
1,029
77
3.6

59,373
1,364
92
3.7

59,835
-246
39
3.8

-9.7
-182.9
264.1

0
7
0
0.0

0
269
4
0.1

0
218
1
0.4

501
167
73
2.4

53,534
-456
63
5.1

Other
Assets serviced for others**
Asset-backed commercial paper conduits
Credit exposure to conduits sponsored by institutions and others
Unused liquidity commitments to conduits sponsored by institutions
	  and others
Net servicing income (for the quarter)
Net securitization income (for the quarter)
Total credit exposure to Tier 1 capital (%)***

* Does not include banks filing the FFIEC 051 report form, which was introduced in first quarter 2017.
** The amount of financial assets serviced for others, other than closed-end 1-4 family residential mortgages, is reported when these assets are greater than $10 million.
*** Total credit exposure includes the sum of the three line items titled “Total credit exposure” reported above.

FDIC QUARTERLY 13

QUARTERLY BANKING PROFILE

COMMUNITY BANK PERFORMANCE
Community banks are identified based on criteria defined in the FDIC’s 2020 Community Banking Study. When comparing
community bank performance across quarters, prior-quarter dollar amounts are based on community banks designated
as such in the current quarter, adjusted for mergers. In contrast, prior-quarter ratios are based on community banks designated during the previous quarter.

Quarterly Net Income for Community Banks Continued to Increase Year Over Year, Driven by Lower Provision
Expense and Higher Net Interest Income
Net Interest Margin Contracted Further
Loan and Lease Balances Declined From the Previous Quarter, Primarily Due to Payoff and Forgiveness of
Paycheck Protection Program Loans
Asset Quality Improved
Quarterly Net Income for
Community Banks
Continued to Increase
Year Over Year, Driven by
Lower Provision Expense
and Higher Net Interest
Income

Community banks reported year-over-year quarterly net income growth of $1.9 billion
(28.7 percent) in second quarter 2021, despite a narrower net interest margin (NIM).
Provision expense (provisions) decreased $2.3 billion (98.1 percent) from second quarter
2020 but remained positive at $46.1 million. In comparison, noncommunity banks had
provisions of negative $10.8 billion. Net interest income increased $1.4 billion (7.2 percent)
from second quarter 2020 primarily because of lower interest expense and higher
commercial and industrial (C&I) loan interest income, partially from the recognition of loan
fees earned through the payoff and forgiveness of Paycheck Protection Program (PPP) loans.
Nearly two-thirds of the 4,490 FDIC-insured community banks (65 percent) reported higher
net income from the year-ago quarter. The pretax return on assets ratio of 1.54 percent rose
20 basis points from a year ago but fell 4 basis points from first quarter 2021.

Net Interest Margin
Contracted Further

The quarterly NIM narrowed 26 basis points from the year-ago quarter to 3.25 percent, despite
an increase in net interest income of $1.4 billion (7.2 percent). Earning asset growth (up
$232.4 billion, or 10.2 percent) outpaced net interest income growth, causing the contraction
in NIM. The decline in average yields on earning assets also outpaced the decline in average
funding costs. The average yield on earning assets fell 57 basis points to 3.57 percent, and the
average funding cost fell 31 basis points to 0.32 percent—both record lows.

Chart 1

Chart 2

Contributors to the Year-Over-Year Change in Income
FDIC-Insured Community Banks
$ Billions
4.0
3.0

Positive Factor
$1.86

$1.35

-$2.32

$0.25

$1.17

Negative Factor

-$0.31

$0.58

2.0

Percent

Community Banks (3.25)
Industry (2.50)

4.00
3.75
3.50

1.0

3.25

0.0

3.00

-1.0

2.75

-2.0
-3.0

Net Interest Margin

+29%

+7%

Net
Income

Net
Interest
Income

Source: FDIC.

-98%

+4%

+8%

Loan Loss Noninterest Noninterest
Provisions
Income
Expense

-59%

+46%

Realized
Gains on
Securities

Income
Taxes

2.50
2.25
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: FDIC.

FDIC QUARTERLY 15

2021 • Volume 15 • Number 3

Noninterest Income
Increased From Second
Quarter 2020

Noninterest income increased $251.9 million (4.3 percent) from a year ago. Increases in
“all other noninterest income” and service charges on deposit accounts offset a decline
in gains on loan sales.1 During the year ending second quarter 2021, all other noninterest
income rose $203.6 million (9.3 percent), and higher revenue from service charges on
deposit accounts (up $134.8 million, or 23.5 percent) offset a reduction in net gains on loan
sales of $322.3 million (14.5 percent). The increase in net interest income and noninterest
income contributed to growth in quarterly net operating revenue, which rose $1.6 billion
(up 6.5 percent) from the year-ago quarter.

Noninterest Expense
Increased From the
Year-Ago Quarter

An increase in salary and benefits expense of $688.2 million (7.8 percent) drove the growth
in noninterest expense (up $1.2 billion, or 7.8 percent) year over year. Average assets per
employee increased 8.4 percent to $6.8 million from the year-ago quarter. Noninterest
expense as a percentage of average assets declined 18 basis points from the year-ago
quarter to 2.45 percent, a near historic low.

Net Operating Revenue
to Average Assets
Continued to Decline

Net operating revenue (net interest income plus noninterest income) increased $1.6 billion
(6.5 percent) from the year-ago quarter as net interest income and noninterest income
improved. Growth in net operating revenue was outpaced by the growth in average assets,
contributing to a 33 basis point decline in the ratio of net operating revenue to average assets.
The ratio stood at 3.97 percent for the quarter—the lowest level since first quarter 2009.

Provision Expense as a
Percent of Net Operating
Revenue Declined to a
Record Low

Provisions declined $345.1 million (88.2 percent) from the previous quarter and $2.3 billion
(98.1 percent) from the year-ago quarter to $46.1 million. Provisions measured 0.18 percent
of net operating revenue, a record low. Less than one-sixth of community banks
(14.9 percent) reported higher provisions compared with the year-ago quarter.2

Allowance for Loan
and Lease Losses
Remains High

The allowance for loan and lease losses as a percentage of total loans and leases increased
9 basis points from the year-ago quarter to 1.31 percent despite nominal provisions. The
allowance for loan and lease losses as a percentage of loans that are 90 days or more past due
or in nonaccrual status (coverage ratio) increased 39.8 percentage points from the year-ago
quarter to 191.7 percent, a record high, due to declines in noncurrent loans. This ratio is well
above the financial crisis average of 64.5 percent.3 The coverage ratio for community banks
is 15.4 percentage points above the coverage ratio for noncommunity banks.

Eighty-eight community banks had adopted current expected credit loss (CECL) accounting
as of second quarter. Community bank CECL adopters reported negative provisions of
$208.3 million in second quarter, a reduction of $130.7 million from the previous quarter
and a reduction of $746.4 million from one year ago. Provisions for community banks that
had not adopted CECL accounting totaled $254.5 million, a reduction of $214.4 million from
a quarter ago and $1.6 billion from one year ago.

1 All

other noninterest income includes, but is not limited to, bankcard and credit card interchange fees, income and fees
from wire transfers, and income and fees from automated teller machines.
2 Provisions for credit losses include both losses for loans and securities for CECL adopters but only loan losses for
non-adopters.
3 The financial crisis refers to the period between December 2007 and June 2009.

Chart 3

Chart 4

Change in Loan Balances and Unused Commitments
FDIC-Insured Community Banks
Change 2Q 2021 vs. 2Q 2020
Change 2Q 2021 vs. 1Q 2021

$ Billions
40

32.4

30

0

Share of Loan Portfolio Noncurrent
Percent

16

C&D Loans
Nonfarm Nonresidential RE
1–4 Family RE

C&I Loans
Home Equity
Farm Loans

14
12

20
10

Noncurrent Loan Rates for FDIC-Insured Community Banks

9.0

7.3

2.7
-1.1 -0.2

-10
-20

-13.7

3.7

2.1

2.1

4

1–4 Family Construction & Agricultural Commercial RE Commercial
Residential Development Production & Construction & Industrial
RE

Loan Balances

16 FDIC QUARTERLY

8
6

-4.1

-10.1

Nonfarm
Commercial
Nonresidential & Industrial
RE

Source: FDIC.

10

10.5 12.4

Unused
Commitments

2
0
2008 2009 2010
Source: FDIC.

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

QUARTERLY BANKING PROFILE

The Noncurrent Rate
Declined From First
Quarter 2021

Loans and leases that were 90 days or more past due or in nonaccrual status (noncurrent
loans and leases) declined $894.6 million (7.1 percent) to $11.6 billion from first quarter
2021. Noncurrent 1–4 family residential loans declined most among loan categories from
the previous quarter (down $281.1 million, or 8.1 percent). The noncurrent rate for total
loans and leases improved 5 basis points to 0.68 percent from the previous quarter. The
noncurrent rate did not materially increase in any loan portfolio.

Net Charge-Offs
Declined Broadly

Declines in net charge-off balances across most loan portfolios contributed to a reduction in
the net charge-off rate for total loans. The net charge-off rate for community banks declined
8 basis points from the year-ago quarter to 0.05 percent. The net charge-off rate for consumer
loans declined the most among major loan categories, down 51 basis points to 0.36 percent.

Total Assets Increased
From the Previous Quarter

Total assets increased $44.1 billion (1.7 percent) from the previous quarter, driven by
increased securities holdings. Securities grew $46.6 billion (9.6 percent) quarter over quarter,
supported by a $46 billion increase in deposits. Cash and balances due from depository
institutions and securities represent almost one-third (31.7 percent) of total assets.

Loan and Lease Balances
Declined From the
Previous Quarter but
Grew During the Past Year

Community banks reported a decline in loan and lease balances (0.5 percent) between first
quarter 2021 and second quarter 2021. A decrease in C&I loan balances (down $33.8 billion,
or 10.1 percent) drove the trend, led by a $38.3 billion decline in PPP loan balances. More
than two-thirds of community banks (68.5 percent) reported a decrease in C&I loans
in second quarter 2021 from first quarter 2021. Growth in commercial real estate (CRE)
portfolios (up $21.5 billion, or 2.9 percent) offset some of the decline in C&I loans. An
increase in CRE loan commitments (up $10.9 billion, or 10.5 percent) drove the quarterover-quarter growth in unused commitments.
Loan and lease balances grew $5.7 billion (0.3 percent) during the year ending second
quarter 2021. Strong growth in CRE portfolios (up $61.7 billion, or 8.9 percent) offset
declines in C&I loans, agricultural production loans, and 1–4 family mortgage loans during
the year. C&I loans declined (down $47.6 billion, or 13.7 percent) reflecting, in part, the
payoff and forgiveness of PPP loans. Agricultural production loans (down $5.7 billion, or
11.2 percent) and 1–4 family loans (down $4 billion, or 1.1 percent) also declined year over
year. Small loans to businesses declined 8 percent to $343.5 billion from the year-ago
quarter, reflecting, in part, the payoff and forgiveness of PPP loans. C&I loans to small
businesses led the decline (down $26.9 billion, or 15 percent) followed by agricultural
production loans to small farm businesses (down $3.2 billion, or 11.9 percent).

Deposits Continued to
Grow in Second Quarter
2021

Deposits at community banks increased $46 billion (2.1 percent) in second quarter.
Two-thirds of community banks (66.1 percent) reported an increase in deposits during the
second quarter. Growth in deposits of more than $250,000 (up $47.8 billion, or 4.7 percent)
offset a small decline in deposits under $250,000 (down $1.2 billion, or 0.1 percent).
Brokered deposits declined $3.8 billion (6.7 percent) during the quarter. Average funding
costs fell 31 basis points to 0.32 percent, a record low for community banks.

Capital Levels Remained
Strong

Equity capital grew $8.3 billion (3 percent) during the quarter, driven by retained earnings
of $5.3 billion. However, the leverage capital ratio declined 13 basis points to 10.14 percent
as growth in average assets outpaced tier 1 capital formation. The average tier 1 risk-based
capital ratio among noncommunity bank leverage ratio (CBLR) filers was 14.71 percent in
second quarter 2021, up 7 basis points from the prior quarter. The average CBLR for the
1,789 banks that elected to use the CBLR framework was 11 percent.

Two New Community
Banks Opened in Second
Quarter 2021

The number of community banks declined to 4,490, down 38 from the previous
quarter.4 Two new community banks opened, 12 banks transitioned from community to
noncommunity banks, one bank transitioned from noncommunity bank to community
bank, two banks self-liquidated, and 27 community banks merged during the quarter.
Author:
James K. Presley-Nelson
Senior Financial Analyst
Division of Insurance and Research
4 The

number of community bank reporters excludes two banks that did not file Call Reports this quarter but continue to
have active banking charters.

FDIC QUARTERLY 17

2021 • Volume 15 • Number 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 (%)

2021*

2020*

2020

2019

2018

2017

2016

1.28
12.03
10.14
0.50
0.05
9.15
3.26
46.97
4,490
3.47

1.00
8.74
10.48
0.65
0.12
8.30
3.50
-14.13
4,621
5.11

1.09
9.72
10.32
0.59
0.12
14.06
3.39
0.02
4,557
4.52

1.19
10.24
11.15
0.65
0.13
-1.26
3.66
-4.16
4,748
3.98

1.19
10.57
11.09
0.70
0.13
2.20
3.72
27.90
4,979
3.64

0.96
8.65
10.80
0.78
0.16
1.12
3.62
0.19
5,227
5.72

0.99
8.81
10.69
0.94
0.16
3.05
3.57
2.46
5,461
4.67

* 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
2021

1st Quarter
2021

2nd Quarter
2020

%Change
20Q2-21Q2

4,490
392,145

4,528
390,288

4,621
389,579

-2.8
0.7

$2,671,932
1,240,837
378,973
511,727
119,961
40,654
300,544
66,780
1,970
45,733
47,012
1,317
1,699,589
22,324
1,677,265
531,293
1,559
18,078
443,737

$2,636,504
1,222,558
381,088
499,383
115,970
40,854
335,061
64,520
1,880
44,694
47,784
1,354
1,713,264
22,609
1,690,655
486,615
1,709
17,980
439,544

$2,447,866
1,197,326
388,165
474,462
113,961
43,434
346,924
62,283
1,846
52,411
38,545
1,380
1,696,108
20,719
1,675,389
395,245
2,234
17,907
357,090

9.2
3.6
-2.4
7.9
5.3
-6.4
-13.4
7.2
6.7
-12.7
22.0
-4.5
0.2
7.7
0.1
34.4
-30.2
1.0
24.3

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

2,671,932
2,269,413
2,266,700
2,712
52,664
1,545,878
94,415
338
23,769
283,996
283,872

2,636,504
2,230,974
2,228,676
2,298
56,464
1,542,121
104,654
343
23,853
276,679
276,555

2,447,866
2,016,192
2,013,804
2,387
64,189
1,439,720
139,237
237
25,121
267,079
266,970

9.2
12.6
12.6
13.6
-18.0
7.4
-32.2
42.6
-5.4
6.3
6.3

Loans and leases 30-89 days past due
Noncurrent loans and leases
Restructured loans and leases
Mortgage-backed securities
Earning assets
FHLB Advances
Unused loan commitments
Trust assets
Assets securitized and sold
Notional amount of derivatives

5,291
11,643
5,112
241,255
2,508,125
57,845
384,670
342,175
24,145
145,295

6,695
12,590
5,284
222,763
2,474,385
63,414
369,822
300,529
23,129
162,066

6,919
13,644
5,413
185,919
2,288,646
89,028
323,912
279,747
20,355
170,779

-23.5
-14.7
-5.6
29.8
9.6
-35.0
18.8
22.3
18.6
-14.9

(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 credit losses***
Total noninterest income
Total noninterest expense
Securities gains (losses)
Applicable income taxes
Extraordinary gains, net****
Total net income (includes minority interests)
		 Bank net income
Net charge-offs
Cash dividends
Retained earnings
Net operating income

First Half
2021

First Half
2020

%Change

2nd Quarter
2021

2nd Quarter
2020

%Change
20Q2-21  Q2

$44,082
4,260
39,822
437
12,569
32,148
556
3,661
1
16,703
16,680
408
6,118
10,562
16,238

$44,745
7,718
37,027
4,203
10,646
30,348
342
2,109
1
11,356
11,338
952
5,621
5,717
11,048

-1.5
-44.8
7.5
-89.6
18.1
5.9
62.7
73.6
N/M
47.1
47.1
-57.2
8.8
84.7
47.0

$22,210
2,015
20,195
46
6,062
16,217
213
1,862
1
8,346
8,335
223
3,057
5,279
8,171

$22,470
3,437
19,033
2,403
5,978
15,307
530
1,282
0
6,550
6,538
520
2,448
4,090
6,110

-1.2
-41.4
6.1
-98.1
1.4
5.9
-59.8
45.3
N/M
27.4
27.5
-57.1
24.9
29.1
33.7

* For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.
** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.
*** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13,
this item represents the provision for loan and lease losses.
**** See Notes to Users for explanation.

18 FDIC QUARTERLY

N/M - Not Meaningful

QUARTERLY BANKING PROFILE
TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks
Prior Periods Adjusted for Mergers
2nd Quarter
2021

1st Quarter
2021

2nd Quarter
2020

%Change
20Q2-21Q2

4,490
392,145

4,488
388,766

4,483
383,872

0.2
2.2

$2,671,932
1,240,837
378,973
511,727
119,961
40,654
300,544
66,780
1,970
45,733
47,012
1,317
1,699,589
22,324
1,677,265
531,293
1,559
18,078
443,737

$2,627,843
1,219,048
379,710
498,308
115,716
40,676
334,373
64,241
1,878
44,416
47,684
1,356
1,708,406
22,525
1,685,881
484,683
1,701
17,888
437,690

$2,432,978
1,185,984
383,006
469,403
111,760
43,187
348,192
62,986
1,885
51,485
46,626
1,358
1,693,917
20,694
1,673,223
388,485
2,208
17,196
351,866

9.8
4.6
-1.1
9.0
7.3
-5.9
-13.7
6.0
4.5
-11.2
0.8
-3.0
0.3
7.9
0.2
36.8
-29.4
5.1
26.1

Total liabilities and capital
Deposits
		 Domestic office deposits
		 Foreign office deposits
		Brokered deposits
Estimated insured deposits
Other borrowed funds
Subordinated debt
All other liabilities
Total equity capital (includes minority interests)
		 Bank equity capital

2,671,932
2,269,413
2,266,700
2,712
52,664
1,545,878
94,415
338
23,769
283,996
283,872

2,627,843
2,223,424
2,221,126
2,298
56,467
1,536,002
104,561
343
23,803
275,712
275,587

2,432,978
1,999,483
1,997,096
2,387
63,812
1,422,772
143,804
346
25,098
264,247
264,143

9.8
13.5
13.5
13.6
-17.5
8.7
-34.3
-2.3
-5.3
7.5
7.5

Loans and leases 30-89 days past due
Noncurrent loans and leases
Restructured loans and leases
Mortgage-backed securities
Earning assets
FHLB Advances
Unused loan commitments
Trust assets
Assets securitized and sold
Notional amount of derivatives

5,291
11,643
5,112
241,255
2,508,125
57,845
384,670
342,175
24,145
145,295

6,666
12,538
5,257
221,995
2,466,297
63,418
368,677
299,560
23,024
162,013

6,871
13,333
5,525
182,462
2,275,736
89,419
323,765
274,830
20,410
170,304

-23.0
-12.7
-7.5
32.2
10.2
-35.3
18.8
24.5
18.3
-14.7

(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 credit losses***
Total noninterest income
Total noninterest expense
Securities gains (losses)
Applicable income taxes
Extraordinary gains, net****
Total net income (includes minority interests)
		 Bank net income
Net charge-offs
Cash dividends
Retained earnings
Net operating income

First Half
2021

First Half
2020

%Change

2nd Quarter
2021

2nd Quarter
2020

%Change
20Q2-21  Q2

$44,082
4,260
39,822
437
12,569
32,148
556
3,661
1
16,703
16,680
408
6,118
10,562
16,238

$44,294
7,686
36,608
4,150
10,298
29,808
327
2,091
1
11,185
11,169
943
5,539
5,630
10,889

-0.5
-44.6
8.8
-89.5
22.0
7.8
N/M
75.0
N/M
49.3
49.3
-56.8
10.5
87.6
49.1

$22,210
2,015
20,195
46
6,062
16,217
213
1,862
1
8,346
8,335
223
3,057
5,279
8,171

$22,270
3,426
18,844
2,365
5,810
15,046
525
1,279
0
6,489
6,478
513
2,456
4,022
6,052

-0.3
-41.2
7.2
-98.1
4.3
7.8
N/M
45.6
N/M
28.6
28.7
-56.5
24.4
31.2
35.0

* For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.
** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.
*** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13,
this item represents the provision for loan and lease losses.
**** See Notes to Users for explanation. 

N/M - Not Meaningful

FDIC QUARTERLY 19

2021 • Volume 15 • Number 3
TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks
Second Quarter 2021
(dollar figures in millions)

Geographic Regions*
All Community Banks

New York

Atlanta

Chicago

Kansas City

Dallas

San Francisco

4,490
392,145

497
80,479

510
43,255

982
80,476

1,217
71,162

1,005
82,854

279
33,919

$2,671,932
1,240,837
378,973
511,727
119,961
40,654
300,544
66,780
1,970
45,733
47,012
1,317
1,699,589
22,324
1,677,265
531,293
1,559
18,078
443,737

$683,119
363,392
131,569
139,376
26,768
12,021
75,343
18,502
382
551
13,760
224
471,323
5,496
465,828
113,841
245
5,222
97,983

$288,397
131,896
37,380
62,824
15,280
5,527
31,223
6,320
100
1,337
2,843
214
173,405
2,277
171,128
58,500
243
1,318
57,208

$480,345
213,792
63,538
85,031
18,086
8,855
54,298
11,746
207
7,288
11,234
150
298,207
3,970
294,237
103,517
290
3,494
78,806

$452,982
194,142
54,743
69,105
18,339
4,545
51,421
11,641
699
25,695
6,946
173
289,672
4,146
285,526
95,079
316
2,814
69,246

$495,055
216,552
66,059
93,323
30,641
4,364
54,323
12,537
193
8,126
7,042
296
298,283
4,025
294,259
107,154
388
2,881
90,374

$272,034
121,063
25,685
62,068
10,846
5,342
33,936
6,036
389
2,736
5,187
260
168,698
2,410
166,288
53,201
77
2,349
50,119

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

2,671,932
2,269,413
2,266,700
2,712
52,664
1,545,878
94,415
338
23,769
283,996
283,872

683,119
571,669
571,049
620
20,619
384,010
29,647
240
8,416
73,146
73,126

288,397
248,787
248,777
10
3,257
163,415
7,689
7
2,173
29,742
29,739

480,345
405,191
404,859
332
7,955
295,420
19,723
34
3,808
51,589
51,511

452,982
385,297
385,297
0
9,981
282,828
16,442
6
3,111
48,125
48,124

495,055
426,398
426,398
0
6,555
285,289
12,316
40
3,564
52,738
52,716

272,034
232,070
230,320
1,750
4,297
134,917
8,598
11
2,697
28,657
28,656

Loans and leases 30-89 days past due
Noncurrent loans and leases
Restructured loans and leases
Mortgage-backed securities
Earning assets
FHLB Advances
Unused loan commitments
Trust assets
Assets securitized and sold
Notional amount of derivatives

5,291
11,643
5,112
241,255
2,508,125
57,845
384,670
342,175
24,145
145,295

1,337
3,655
1,727
63,084
643,323
18,055
103,883
77,111
9,797
60,375

530
1,043
423
26,907
269,931
5,010
34,504
11,110
111
11,612

850
2,097
1,107
42,393
450,078
13,400
68,595
68,085
4,794
23,653

953
1,776
809
36,009
426,023
10,783
72,995
118,990
4,177
26,335

1,336
2,269
641
41,738
463,477
7,012
62,002
44,270
4,911
13,537

284
804
404
31,124
255,293
3,584
42,691
22,609
354
9,784

$22,210
2,015
20,195
46
6,062
16,217
213
1,862
1
8,346
8,335
223
3,057
5,279
8,171

$5,413
569
4,843
-66
1,247
3,801
139
605
0
1,891
1,889
77
451
1,438
1,779

$2,357
186
2,171
16
617
1,800
19
188
0
803
802
19
134
668
787

$3,883
359
3,523
14
1,518
3,060
13
353
0
1,627
1,625
16
731
893
1,616

$3,998
392
3,607
57
1,073
2,805
14
243
1
1,589
1,589
57
796
793
1,576

$4,347
377
3,970
80
1,095
3,155
23
223
0
1,628
1,622
41
647
975
1,608

$2,213
131
2,081
-54
512
1,596
5
249
0
808
808
14
297
512
804

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 credit losses****
Total noninterest income
Total noninterest expense
Securities gains (losses)
Applicable income taxes
Extraordinary gains, net*****
Total net income (includes minority interests)
		 Bank net income
Net charge-offs
Cash dividends
Retained earnings
Net operating income

* See Table V-A for explanation.
** For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.
*** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.
**** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13,
this item represents the provision for loan and lease losses.
***** See Notes to Users for explanation.

20 FDIC QUARTERLY

QUARTERLY BANKING PROFILE
Table IV-B. Second Quarter 2021, FDIC-Insured Community Banks
All Community Banks
Performance ratios (annualized, %)
Yield on earning assets
Cost of funding earning assets
Net interest margin
Noninterest income to assets
Noninterest expense to assets
Loan and lease loss provision to assets
Net operating income to assets
Pretax return on assets
Return on assets
Return on equity
Net charge-offs to loans and leases
Loan and lease loss provision to net charge-offs
Efficiency ratio
Net interest income to operating revenue
% of unprofitable institutions
% of institutions with earnings gains

2nd Quarter
2021
3.57
0.32
3.25
0.92
2.45
0.01
1.23
1.54
1.26
11.92
0.05
20.67
61.40
76.91
4.25
64.81

1st Quarter
2021
3.64
0.37
3.26
1.01
2.48
0.06
1.26
1.58
1.30
12.16
0.04
211.80
60.66
75.12
4.00
73.79

Second Quarter 2021, Geographic Regions*
New York
3.40
0.36
3.04
0.74
2.25
-0.04
1.05
1.48
1.12
10.49
0.07
-86.38
62.05
79.52
4.83
71.03

Atlanta
3.54
0.28
3.26
0.87
2.53
0.02
1.11
1.39
1.13
11.01
0.04
83.60
64.07
77.88
6.67
71.57

Chicago
3.47
0.32
3.15
1.27
2.56
0.01
1.35
1.66
1.36
12.79
0.02
85.41
60.32
69.89
3.97
61.51

Kansas City
3.77
0.37
3.40
0.95
2.48
0.05
1.40
1.62
1.41
13.37
0.08
101.40
59.50
77.06
3.37
60.15

Dallas
3.79
0.33
3.46
0.89
2.57
0.07
1.31
1.51
1.32
12.50
0.06
195.18
62.06
78.38
3.78
65.97

San Francisco
3.50
0.21
3.29
0.76
2.37
-0.08
1.20
1.57
1.20
11.46
0.03
-391.34
61.29
80.26
5.38
69.18

Dallas
3.83
0.35
3.48
0.95
2.59
0.08
1.34
1.55
1.36
12.70
0.05
274.98
61.40
77.41
2.99
71.14

San Francisco
3.54
0.22
3.32
0.82
2.39
-0.03
1.22
1.58
1.22
11.52
0.04
-111.65
60.44
79.17
4.30
80.29

Table V-B. First Half 2021, FDIC-Insured Community Banks
All Community Banks
Performance ratios (%)
Yield on earning assets
Cost of funding earning assets
Net interest margin
Noninterest income to assets
Noninterest expense to assets
Loan and lease loss provision to assets
Net operating income to assets
Pretax return on assets
Return on assets
Return on equity
Net charge-offs to loans and leases
Loan and lease loss provision to net charge-offs
Efficiency ratio
Net interest income to operating revenue
% of unprofitable institutions
% of institutions with earnings gains

First Half
2021
3.61
0.35
3.26
0.97
2.47
0.03
1.25
1.56
1.28
12.03
0.05
107.18
61.01
76.01
3.47
74.57

First Half
2020
4.23
0.73
3.50
0.94
2.68
0.37
0.97
1.19
1.00
8.74
0.12
441.22
63.07
77.67
5.11
51.20

First Half 2021, Geographic Regions*
New York
3.45
0.39
3.06
0.75
2.28
-0.01
1.03
1.46
1.11
10.32
0.07
-24.28
62.61
79.24
4.63
83.50

Atlanta
3.59
0.31
3.28
0.89
2.53
0.04
1.12
1.41
1.15
11.03
0.03
211.23
63.60
77.59
6.67
75.69

Chicago
3.52
0.34
3.17
1.36
2.60
0.05
1.38
1.71
1.41
13.10
0.02
335.49
59.56
68.61
3.36
72.20

Kansas City
3.79
0.39
3.40
1.02
2.50
0.07
1.43
1.67
1.45
13.63
0.06
169.53
58.88
75.70
1.97
73.87

* See Table V-A for explanation.

FDIC QUARTERLY 21

2021 • Volume 15 • Number 3
Table VI-B. Loan Performance, FDIC-Insured Community Banks
Geographic Regions*
June 30, 2021

All Community Banks

New York

Atlanta

Chicago

Kansas City

Dallas

San Francisco

Percent of Loans 30-89 Days Past Due
All loans secured by real estate
Construction and development
Nonfarm nonresidential
Multifamily residential real estate
Home equity loans
Other 1-4 family residential
Commercial and industrial loans
Loans to individuals
Credit card loans
Other loans to individuals
All other loans and leases (including farm)
Total loans and leases

0.29
0.34
0.19
0.26
0.27
0.40
0.26
0.98
1.57
0.96
0.31
0.31

0.29
0.44
0.19
0.40
0.26
0.30
0.16
0.90
1.45
0.89
0.07
0.28

0.28
0.27
0.16
0.14
0.29
0.49
0.29
0.92
1.07
0.92
0.19
0.31

0.30
0.26
0.23
0.15
0.28
0.46
0.24
0.46
0.68
0.45
0.17
0.28

0.29
0.31
0.19
0.15
0.32
0.37
0.30
0.74
2.57
0.62
0.48
0.33

0.38
0.41
0.22
0.19
0.36
0.57
0.38
1.98
0.93
2.00
0.43
0.45

0.13
0.17
0.10
0.05
0.11
0.20
0.21
0.66
0.82
0.64
0.27
0.17

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

0.72
0.52
0.71
0.29
0.57
0.84
0.63
0.45
0.68
0.44
0.62
0.68

0.85
0.80
0.88
0.34
0.62
1.03
0.68
0.31
1.06
0.29
0.08
0.78

0.62
0.42
0.55
0.41
0.44
0.82
0.56
0.40
0.61
0.39
0.46
0.60

0.77
0.54
0.88
0.26
0.44
0.80
0.62
0.25
0.22
0.25
0.43
0.70

0.60
0.44
0.61
0.30
0.32
0.46
0.51
0.30
0.83
0.27
0.95
0.61

0.74
0.39
0.68
0.22
0.37
0.93
0.80
1.09
0.48
1.10
0.66
0.76

0.47
0.44
0.39
0.17
1.22
0.52
0.48
0.28
0.38
0.28
0.73
0.48

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

0.01
-0.01
0.03
0.02
-0.01
0.00
0.09
0.46
4.03
0.35
0.10
0.05

0.03
0.01
0.06
0.01
-0.01
0.01
0.13
0.61
4.22
0.53
0.05
0.07

-0.01
-0.05
0.00
0.00
-0.02
-0.01
0.08
0.47
0.67
0.46
0.22
0.03

0.00
-0.01
0.02
0.00
-0.01
-0.01
0.05
0.13
1.17
0.11
0.07
0.02

0.03
0.00
0.05
0.11
-0.04
0.00
0.06
0.55
7.52
0.13
0.08
0.06

0.01
0.01
0.01
0.00
0.05
0.00
0.12
0.39
1.30
0.37
0.10
0.05

-0.01
-0.06
0.00
0.00
-0.01
-0.01
0.06
0.58
1.80
0.50
0.24
0.04

Loans Outstanding (in billions)
All loans secured by real estate
Construction and development
Nonfarm nonresidential
Multifamily residential real estate
Home equity loans
Other 1-4 family residential
Commercial and industrial loans
Loans to individuals
Credit card loans
Other loans to individuals
All other loans and leases (including farm)
Total loans and leases

$1,240.8
120.0
511.7
113.4
40.7
379.0
300.5
66.8
2.0
64.8
92.7
1,700.9

$363.4
26.8
139.4
51.4
12.0
131.6
75.3
18.5
0.4
18.1
14.3
471.5

$131.9
15.3
62.8
6.5
5.5
37.4
31.2
6.3
0.1
6.2
4.2
173.6

$213.8
18.1
85.0
20.8
8.9
63.5
54.3
11.7
0.2
11.5
18.5
298.4

$194.1
18.3
69.1
13.2
4.5
54.7
51.4
11.6
0.7
10.9
32.6
289.8

$216.6
30.6
93.3
8.5
4.4
66.1
54.3
12.5
0.2
12.3
15.2
298.6

$121.1
10.8
62.1
13.1
5.3
25.7
33.9
6.0
0.4
5.6
7.9
169.0

Memo: Unfunded Commitments (in millions)
Total Unfunded Commitments
Construction and development: 1-4 family residential
Construction and development: CRE and other
Commercial and industrial

384,670
36,283
76,915
123,783

103,883
6,682
22,568
34,649

34,504
5,372
7,978
9,622

68,595
4,263
12,532
25,106

72,995
5,781
11,741
21,615

62,002
10,836
15,106
18,486

42,691
3,349
6,990
14,305

* See Table V-A for explanation.
Note: Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.

22 FDIC QUARTERLY

QUARTERLY BANKING PROFILE

INSURANCE FUND INDICATORS
Deposit Insurance Fund Increases by $1.2 Billion
Insured Deposits Shrink Slightly in the Second Quarter
DIF Reserve Ratio Rises 2 Basis Points to 1.27 Percent
During the second quarter, the Deposit Insurance Fund (DIF) balance increased by
$1.2 billion to $120.5 billion. Assessment income of $1.6 billion, interest earned on
investments of $251 million, and negative provisions for insurance losses of $42 million
were the largest sources of the increase. Operating expenses of $466 million and unrealized
losses on available-for-sale securities of $233 million partially offset the increase in the
fund balance. No insured institutions failed in the second quarter.
The deposit insurance assessment base—average consolidated total assets minus average
tangible equity—increased by 2.5 percent in the second quarter and by 8.5 percent over
12 months.1, 2 Total estimated insured deposits decreased by 0.2 percent in the second
quarter and increased by 7.3 percent ($649 million) year over year. The increase in the DIF,
combined with the slight decrease in insured deposits, resulted in the DIF reserve ratio
rising by 2 basis points to 1.27 percent at June 30, 2021. This is the first quarterly increase
in the DIF reserve ratio since the third quarter of 2019 when the reserve ratio stood at
1.41 percent. The June 30, 2021, reserve ratio was 3 basis points lower than the previous
year; the 12-month decline in the reserve ratio was entirely the result of extraordinary
insured deposit growth.
The Dodd-Frank Act, enacted on July 21, 2010, contained several provisions to strengthen
the DIF. Among other things, it: (1) raised the minimum reserve ratio for the DIF to
1.35 percent (from the former minimum of 1.15 percent); (2) required that the reserve ratio
reach 1.35 percent by September 30, 2020. Once the reserve ratio reaches 1.35 percent,
the September 30, 2020, deadline in the Dodd-Frank Act will have been met and will no
longer apply. If the reserve ratio later falls below 1.35 percent, even if that occurs before
September 30, 2020, the FDIC will have a minimum of eight years to return the reserve
ratio to 1.35 percent, reducing the likelihood of a large increase in assessment rates. The
reserve ratio exceeded the 1.35 percent minimum imposed by the Dodd-Frank Act on
September 30, 2018, when the reserve ratio was 1.36 percent. The reserve ratio continued
to exceed the 1.35 percent minimum for all subsequent quarters until June 30, 2020, when,
due to extraordinary insured deposit growth, the reserve ratio dropped 8 basis points
to 1.30 percent. Since the reserve ratio fell below its statutorily required minimum of
1.35 percent on June 30, 2020, the FDIC Board adopted a new Fund Restoration Plan in
September 2020.
Author:
Kevin Brown
Senior Financial Analyst
Division of Insurance and Research
1 There

are additional adjustments to the assessment base for banker’s banks and custodial banks.
for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition
to insured commercial banks and savings institutions.
2 Figures

FDIC QUARTERLY 23

2021 • Volume 15 • Number 3
Table I-C. Insurance Fund Balances and Selected Indicators
Deposit Insurance Fund*
2nd
Quarter
2021

1st
Quarter
2021

4th
Quarter
2020

3rd
Quarter
2020

2nd
Quarter
2020

1st
Quarter
2020

4th
Quarter
2019

3rd
Quarter
2019

2nd
Quarter
2019

1st
Quarter
2019

4th
Quarter
2018

3rd
Quarter
2018

2nd
Quarter
2018

$119,362

$117,897

$116,434

$114,651

$113,206

$110,347

$108,940

$107,446

$104,870

$102,609

$100,204

$97,588

$95,072

1,589

1,862

1,884

2,047

1,790

1,372

1,272

1,111

1,187

1,369

1,351

2,728

2,598

251

284

330

392

454

507

531

544

535

507

481

433

381

0
466

0
454

0
470

0
451

0
465

0
460

0
460

0
443

0
459

0
434

0
453

0
434

0
445

-42

-57

-48

-74

-47

12

-88

-192

-610

-396

-236

-121

-141

2

1

9

5

2

2

21

4

9

2

2

2

3

-233
1,185

-285
1,465

-338
1,463

-284
1,783

-383
1,445

1,450
2,859

-45
1,407

86
1,494

694
2,576

421
2,261

788
2,405

-234
2,616

-162
2,516

120,547

119,362

117,897

116,434

114,651

113,206

110,347

108,940

107,446

104,870

102,609

100,204

97,588

5.14

5.44

6.84

6.88

6.71

7.95

7.54

8.72

10.10

10.31

10.63

10.72

11.42

1.27

1.25

1.29

1.30

1.30

1.38

1.41

1.41

1.40

1.36

1.36

1.36

1.33

9,490,281

9,513,932

9,123,046

8,927,668

8,841,566

8,181,859

7,828,160

7,744,543

7,695,116

7,699,009

7,525,204

7,378,900

7,357,163

7.34

16.28

16.54

15.28

14.90

6.27

4.03

4.96

4.59

4.94

5.14

3.89

4.39

(dollar figures in millions)
Beginning Fund Balance
Changes in Fund Balance:
Assessments earned
Interest earned on
investment securities
Realized gain on sale of
investments
Operating expenses
Provision for insurance
losses
All other income,
net of expenses
Unrealized gain/(loss) on
available-for-sale
securities**
Total fund balance change
Ending Fund Balance
Percent change from
   four quarters earlier
Reserve Ratio (%)
Estimated Insured
Deposits
Percent change from
   four quarters earlier
Domestic Deposits
Percent change from
   four quarters earlier

17,203,254 16,980,214 16,339,032

Assessment Base***
Percent change from
   four quarters earlier

19,688,529

10.53

Number of Institutions
Reporting

18.31

15,716,702 15,563,637 14,351,881 13,262,843 13,020,253

23.19

20.71

21.70

12.78

4.77

12,788,773 12,725,363 12,659,406 12,367,954 12,280,904

5.27

4.14

6/18

1.36

9/18 12/18

3.36

3.83

16.57

16.40

16.10

15.74

5.92

4.56

4.43

3.77

3.27

3.01

2.67

2.79

4,960

4,987

5,011

5,042

5,075

5,125

5,186

5,267

5,312

5,371

5,415

5,486

5,551

Deposit Insurance Fund Balance
and Insured Deposits
($ Millions)

Percent of Insured Deposits
1.36

4.37

8.46

DIF Reserve Ratios
1.33

3.41

19,214,767 18,805,803 18,464,915 18,153,227 16,483,536 16,156,600 15,904,422 15,683,980 15,561,770 15,452,126 15,229,424 15,113,551

1.36

3/19

1.40

6/19

1.41

1.41

9/19 12/19

1.38

1.30

3/20

6/20

1.30

1.29

1.25

9/20 12/20

3/21

DIF
Balance

1.27
6/18
9/18
12/18
3/19
6/19
9/19
12/19
3/20
6/20
9/20
12/20
3/21
6/21

6/21

$97,588
100,204
102,609
104,870
107,446
108,940
110,347
113,206
114,651
116,434
117,897
119,362
120,547

DIF-Insured
Deposits
$7,357,163
7,378,900
7,525,204
7,699,009
7,695,116
7,744,543
7,828,160
8,181,859
8,841,566
8,927,668
9,123,046
9,513,932
9,490,281

Table II-C. Problem Institutions and Failed Institutions
(dollar figures in millions)

2021****

2020****

Problem Institutions
Number of institutions
Total assets

2020

2019

51
$45,823

52
$48,127

56
$55,830

51
$46,190

60
$48,481

95
$13,939

123
$27,624

183
$46,780

Failed Institutions
Number of institutions
Total assets*****

0
$0

2
$253

4
$455

4
$209

0
$0

8
$5,082

5
$277

8
$6,706

* Quarterly financial statement results are unaudited.
** Includes unrealized postretirement benefit gain (loss).
*** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks.
**** Through June 30.
***** Total assets are based on final Call Reports submitted by failed institutions.

24 FDIC QUARTERLY

2018

2017

2016

2015

QUARTERLY BANKING PROFILE
Table III-C. Estimated FDIC-Insured Deposits by Type of Institution
(dollar figures in millions)
June 30, 2021

Commercial Banks and Savings Institutions
FDIC-Insured Commercial Banks
		 FDIC-Supervised
		 OCC-Supervised
		 Federal Reserve-Supervised
FDIC-Insured Savings Institutions
		 OCC-Supervised
		 FDIC-Supervised
		 Federal Reserve-Supervised

Total Commercial Banks and Savings Institutions
Other FDIC-Insured Institutions
U.S. Branches of Foreign Banks
Total FDIC-Insured Institutions

Number of
Institutions

Total
Assets

Domestic
Deposits*

Est. Insured
Deposits

4,336
2,887
755
694

$21,359,063
3,677,448
14,241,986
3,439,629

$15,971,759
3,052,833
10,322,634
2,596,292

$8,533,097
1,838,464
5,483,216
1,211,417

615
272
307
36

1,429,940
611,072
396,109
422,759

1,192,174
491,797
315,598
384,779

925,379
405,032
236,868
283,479

4,951

22,789,003

17,163,933

9,458,476

9

88,358

39,320

31,805

4,960

22,877,361

17,203,254

9,490,281

* Excludes $1.6 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, 2021 (dollar figures in billions)
Annual Rate in Basis Points*

Number of
Institutions

Percent of Total
Institutions

Amount of
Assessment Base

Percent of Total
Assessment Base

1.50 - 3.00

2,926

58.7

$4,833.8

25.16

3.01 - 6.00

1,448

29.0

12,154.0

63.25

6.01 - 10.00

508

10.2

2,072.6

10.79

10.01 - 15.00

39

0.8

108.2

0.56

15.01 - 20.00

63

1.3

45.9

0.24

20.01 - 25.00

3

0.1

0.2

0.00

> 25.00

0

0.0

0.0

0.00

* Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, as required by the Dodd-Frank Act.

FDIC QUARTERLY 25

2021 • Volume 15 • Number 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: https://www.fdic.gov/resources/communitybanking/cbi-study.html.
The determination of which insured institutions are considered
­community banks is based on five steps.
The first step in defining a community bank is to aggre­gate all
­charter-level data reported under each holding company into a
­single banking organization. This aggrega­tion applies both to
balance-sheet measures and the number and location of banking
offices. Under the FDIC definition, if the banking organization is
designated as a community bank, every charter reporting under
that organization is also considered a community bank when
working with data at the charter level.
The second step is to exclude any banking organization where more
than 50 percent of total assets are held in certain specialty banking
charters, including: credit card specialists, consumer nonbank banks,
industrial loan compa­nies, trust companies, bankers’ banks, and banks
holding 10 percent or more of total assets in foreign offices.
Once the specialty organizations are removed, the third step
involves including organizations that engage in basic banking
activities as measured by the total loans-to-assets ratio (greater
than 33 percent) and the ratio of core depos­its to assets (greater
than 50 percent). Core deposits are defined as non-brokered
deposits in domestic offices. Analysis of the underlying data shows
that these thresholds establish meaningful levels of basic lending
and deposit gathering and still allow for a degree of diversity in how
indi­vidual banks construct their balance sheets.
The fourth step includes organizations that operate within a
limited geographic scope. This limitation of scope is used as a
proxy measure for a bank’s relationship approach to banking.
Banks that operate within a limited market area have more ease in
managing relationships at a personal level. Under this step, four
criteria are applied to each banking organization. They include
both a minimum and maximum number of total banking offices, a
maximum level of deposits for any one office, and location-based
criteria. The limits on the number of and deposits per office are
adjusted upward quarterly. For banking offices, banks must have

26 FDIC QUARTERLY

more than one office, and the maximum number of offices is 40 in
1985 and reached 87 in 2016. The maximum level of deposits for
any one office is $1.25 billion in deposits in 1985 and reached $6.97
billion in deposits in 2016. The remaining geographic limitations
are also based on maximums for the number of states (fixed at 3)
and large metropolitan areas (fixed at 2) in which the organization
maintains offices. Branch office data are based on the most recent
data from the annual June 30 Summary of Deposits Survey that are
available at the time of publication.
Finally, the definition establishes an asset-size limit, also adjusted
upward quarterly and below which the limits on banking activities
and geographic scope are waived. The asset-size limit is $250
million in 1985 and reached $1.39 billion in 2016. This final step
acknowledges the fact that most of those small banks that are not
excluded as specialty banks meet the requirements for banking
activities and geographic limits in any event.

Summary of FDIC Research Definition of
Community Banking Organizations
Community banks are designated at the level of the banking
organization.
(All charters under designated holding companies are considered
community banking charters.)

Exclude: Any organization with:
— No loans or no core deposits
— Foreign Assets ≥ 10% of total assets
— More than 50% of assets in certain specialty banks, including:
• credit card specialists
• consumer nonbank banks1
• industrial loan companies
• trust companies
• bankers’ banks

Include: All remaining banking organizations with:
— Total assets < indexed size threshold 2
— Total assets ≥ indexed size threshold, where:
• Loan to assets > 33%
• Core deposits to assets > 50%
• More than 1 office but no more than the indexed ­maximum
number of offices.3
• Number of large MSAs with offices ≤ 2
• Number of states with offices ≤ 3
• No single office with deposits > indexed maximum branch
deposit size.4

Tables I-C through IV-C.
A separate set of tables (Tables I-C through IV-C) provides
comparative quarterly data related to the Deposit Insurance Fund
(DIF), ­problem institutions, failed institutions, estimated FDIC-

1 Consumer

nonbank banks are financial institutions with limited charters that
can make commercial loans or take deposits, but not both.
2 Asset

size threshold indexed to equal $250 million in 1985 and $1.39 billion in

2016.
3 Maximum
4 Maximum

number of offices indexed to equal 40 in 1985 and 87 in 2016.

branch deposit size indexed to equal $1.25 billion in 1985 and
$6.97 billion in 2016.

QUARTERLY BANKING PROFILE

insured deposits, as well as assessment rate information. Depository
institutions that are not insured by the FDIC through the DIF are
not included in the FDIC Quarterly Banking Profile. U.S. branches of
institutions ­headquartered in foreign countries and non-deposit
trust companies are not included unless otherwise indicated. Efforts
are made to obtain financial reports for all active institutions.
However, in some cases, final financial reports are not available for
institutions that have closed or converted their charters.

DATA SOURCES
The financial information appearing in this publication is obtained
primarily from the Federal Financial Institutions Examination
Council (FFIEC) Consolidated Reports of Condition and Income
(Call Reports) and the OTS Thrift Financial Reports (TFR) submitted
by all FDIC-insured depository institutions. (TFR filers began filing
Call Reports effective with the quarter ending March 31, 2012.) This
information is stored on and retrieved from the FDIC’s Research
Information System (RIS) database.

COMPUTATION METHODOLOGY
Parent institutions are required to file consolidated reports,
while their subsidiary financial institutions are still required to
file separate reports. Data from subsidiary institution reports are
included in the Quarterly Banking Profile tables, which can lead
to double-counting. No adjustments are made for any doublecounting of subsidiary data. Additionally, c
­ ertain adjustments
are made to the OTS Thrift Financial Reports to provide closer
conformance with the reporting and accounting requirements
of the FFIEC Call Reports. (TFR f­ ilers began filing Call Reports
effective with the quarter e
­ nding March 31, 2012.)
All condition and performance ratios represent weighted averages,
which is the sum of the individual numerator values divided by
the sum of individual denominator values. All asset and liability
figures used in calculating performance ratios represent average
amounts for the period (beginning-of-period amount plus endof-period amount plus any interim periods, divided by the total
number of periods). For “pooling-of-interest” mergers, the
assets of the acquired institution(s) are included in average assets,
since the year-to-date income includes the results of all merged
institutions. No adjustments are made for “purchase accounting”
mergers. Growth rates represent the percentage change over a
12-month period in totals for institutions in the base period to
totals for institutions in the current period. For the community
bank subgroup, growth rates will reflect changes over time in the
number and identities of institutions designated as community
banks, as well as changes in the assets and liabilities, and income
and expenses of group members. Unless indicated otherwise,
growth rates are not adjusted for mergers or other changes in the
composition of the community bank subgroup. When community
bank growth rates are adjusted for mergers, prior period balances
used in the calculations represent totals for the current group
of community bank reporters, plus prior period amounts for
any institutions that were subsequently merged into current
community banks.
All data are collected and presented based on the location of each
reporting institution’s main office. Reported data may include
assets and liabilities located outside of the reporting institution’s
home state. In addition, institutions may relocate across state
lines or change their charters, resulting in an inter-regional or
inter-industry migration; institutions can move their home offices
between regions, savings institutions can convert to commercial
banks, or commercial banks may convert to savings institutions.

ACCOUNTING CHANGES
Financial accounting pronouncements by the Financial Accounting
Standards Board (FASB) can result in changes in an individual
bank’s accounting policies and in the Call Reports they submit. Such
accounting changes can affect the aggregate amounts presented
in the QBP for the current period and the period-to-period
comparability of such financial data.
The current quarter’s Financial Institution Letter (FIL) and related
Call Report supplemental instructions can provide additional
explanation to the QBP reader beyond any material accounting
changes discussed in the QBP analysis.
https://www.fdic.gov/news/financial-institution-letters/2021/
fil21049.html
https://www.fdic.gov/regulations/resources/call/call.html
Further information on changes in financial statement
presentation, income recognition and disclosure is a
­ vailable
from the FASB. http://www.fasb.org/jsp/FASB/Page/
LandingPage&cid=1175805317350.

DEFINITIONS (in alphabetical order)

All other assets – total cash, balances due from depository

institutions, premises, fixed assets, direct investments in real
estate, investment in unconsolidated subsidiaries, customers’
liability on acceptances outstanding, assets held in trading
accounts, federal funds sold, securities purchased with agreements
to resell, fair market value of derivatives, prepaid deposit insurance
assessments, and other assets.

All other liabilities – bank’s liability on acceptances, limited-life
preferred stock, allowance for estimated off-balance-sheet credit
losses, fair market value of derivatives, and other liabilities.

Assessment base – effective April 1, 2011, the deposit insurance

assessment base changed to “average consolidated total assets
minus average tangible equity” with an additional adjustment to
the assessment base for banker’s banks and custodial banks, as
permitted under Dodd-Frank. Previously the assessment base was
“assessable deposits” and consisted of deposits in banks’ domestic
offices with certain adjustments.

Assessment rate schedule – Initial base assessment rates for

small institutions are based on a combination of financial ratios and
CAMELS component ratings. Initial rates for large institutions—
generally those with at least $10 billion in assets—are also based
on CAMELS component ratings and certain financial measures
combined into two scorecards—one for most large institutions and
another for the remaining very large institutions that are structurally
and operationally complex or that pose unique challenges and risks
in case of failure (highly complex institutions). The FDIC may take
additional information into account to make a limited adjustment to
a large institution’s scorecard results, which are used to determine a
large institution’s initial base assessment rate.
While risk categories for small institutions (except new
institutions) were eliminated effective July 1, 2016, initial rates for
small institutions are subject to minimums and maximums based
on an institution’s CAMELS composite rating. (Risk categories for
large institutions were eliminated in 2011.)
The current assessment rate schedule became effective July 1, 2016.
Under the current schedule, initial base assessment rates range
from 3 to 30 basis points. An institution’s total base assessment rate
may differ from its initial rate due to three possible adjustments:
(1) Unsecured Debt Adjustment: An institution’s rate may decrease

FDIC QUARTERLY 27

2021 • Volume 15 • Number 3

by up to 5 basis points for unsecured debt. The unsecured debt
adjustment cannot exceed the lesser of 5 basis points or 50 percent
of an institution’s initial base assessment rate (IBAR). Thus, for
example, an institution with an IBAR of 3 basis points would have
a maximum unsecured debt adjustment of 1.5 basis points and
could not have a total base assessment rate lower than 1.5 basis
points. (2) Depository Institution Debt Adjustment: For institutions
that hold long-term unsecured debt issued by another insured
depository institution, a 50 basis point charge is applied to the
amount of such debt held in excess of 3 percent of an institution’s
Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for large
institutions that are not well capitalized or do not have a composite
CAMELS rating of 1 or 2 may increase (not to exceed 10 basis points)
if their brokered deposits exceed 10 percent of domestic deposits.
The assessment rate schedule effective July 1, 2016, is shown in the
following table:
Total Base Assessment Rates*

Established Small Banks
1 or 2

3

4 or 5

Large and
Highly
Complex
Institutions**

Initial Base
Assessment Rate

3 to 16

6 to 30

16 to 30

3 to 30

Unsecured Debt
Adjustment

-5 to 0

-5 to 0

-5 to 0

-5 to 0

Brokered Deposit
Adjustment

N/A

N/A

N/A

0 to 10

Total Base
Assessment Rate

1.5 to 16

3 to 30

11 to 30

1.5 to 40

CAMELS Composite

* All amounts for all categories are in basis points annually. Total base rates that are not the
minimum or maximum rate will vary between these rates. Total base assessment rates do not
include the depository institution debt adjustment.
** Effective July 1, 2016, large institutions are also subject to temporary assessment
surcharges in order to raise the reserve ratio from 1.15 percent to 1.35 percent. The
surcharges amount to 4.5 basis points of a large institution’s assessment base (after making
certain adjustments).

Each institution is assigned a risk-based rate for a quarterly
assessment period near the end of the quarter following the
assessment period. Payment is generally due on the 30th day of
the last month of the quarter following the assessment period.
Supervisory rating changes are effective for assessment purposes as
of the examination transmittal date.

Assets securitized and sold – total outstanding principal balance
of assets securitized and sold with servicing retained or other
seller-provided credit enhancements.

Capital Purchase Program (CPP) – as announced in October

2008 under the TARP, the Treasury Department purchase of
noncumulative perpetual preferred stock and related warrants that
is treated as Tier 1 capital for regulatory capital purposes is included
in “Total equity capital.” Such warrants to purchase common
stock or non­cumulative preferred stock issued by publicly-traded
banks are reflected as well in “Surplus.” Warrants to purchase
common stock or noncumulative preferred stock of not-publiclytraded bank stock are classified in a bank’s balance sheet as “Other
liabilities.”

Common equity Tier 1 capital ratio – ratio of common equity

Tier 1 capital to risk-weighted assets. Common equity Tier 1 capital
includes common stock instruments and related surplus, retained
earnings, accumulated other comprehensive income (AOCI), and
limited amounts of common equity Tier 1 minority interest, minus
applicable regulatory adjustments and deductions. Items that are

28 FDIC QUARTERLY

fully deducted from common equity Tier 1 capital include goodwill,
other intangible assets (excluding mortgage servicing assets)
and certain deferred tax assets; items that are subject to limits in
common equity Tier 1 capital include mortgage servicing assets,
eligible deferred tax assets, and certain significant investments.
Beginning March 2020, this ratio does not include institutions that
have a Community Bank Leverage Ratio election in effect at the
report date.

Construction and development loans – includes loans for

all ­property types under construction, as well as loans for land
acquisition and development.

Core capital – common equity capital plus noncumulative

perpetual preferred stock plus minority interest in consolidated
subsidiaries, less goodwill and other ineligible intangible assets.
The amount of e
­ ligible intangibles (including servicing rights)
included in core capital is limited in accordance with supervisory
capital regulations.

Cost of funding earning assets – total interest expense paid on
deposits and other borrowed money as a percentage of average
­earning assets.

Credit enhancements – techniques whereby a company attempts

to reduce the credit risk of its obligations. Credit enhancement may
be provided by a third party (external credit enhancement) or by the
originator (internal credit enhancement), and more than one type
of enhancement may be associ­ated with a given issuance.

Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings

Association (SAIF) Insurance Funds were merged in 2006 by the
Federal Deposit Insurance Reform Act to form the DIF.

Derivatives notional amount – the notional, or contractual,

amounts of derivatives represent the level of involvement in the
types of derivatives transactions and are not a quantification of
market risk or credit risk. Notional amounts represent the amounts
used to calculate contractual cash flows to be exchanged.

Derivatives credit equivalent amount – the fair value of the

derivative plus an additional amount for potential future c
­ redit
exposure based on the notional amount, the remaining maturity
and type of the contract.

Derivatives transaction types:
Futures and forward contracts – contracts in which the buyer

agrees to purchase and the seller agrees to sell, at a specified
future date, a specific quantity of an underlying variable or index
at a specified price or yield. These contracts exist for a variety of
variables or indices, (traditional agricultural or physical
commodities, as well as currencies and interest rates). Futures
contracts are standardized and are traded on organized
exchanges which set limits on counterparty credit exposure.
Forward contracts do not have standardized terms and are
traded over the counter.

Option contracts – contracts in which the buyer acquires the

right to buy from or sell to another party some specified amount
of an un­derlying variable or index at a stated price (strike price)
during a period or on a specified future date, in return for
compensation (such as a fee or premium). The seller is obligated
to purchase or sell the variable or index at the discretion of the
buyer of the contract.

Swaps – obligations between two parties to exchange a series

of cash flows at periodic intervals (settlement dates), for a
­specified period. The cash flows of a swap are either fixed, or
determined for each settlement date by multiplying the quantity

QUARTERLY BANKING PROFILE

(notional principal) of the underlying variable or index by
specified reference rates or prices. Except for currency swaps,
the notional principal is used to calculate each payment but is
not exchanged.

Derivatives underlying risk exposure – the potential exposure
characterized by the level of banks’ concentration in particular
underlying instruments, in general. Exposure can result from
­market risk, credit risk, and operational risk, as well as, interest
rate risk.

Domestic deposits to total assets – total domestic office deposits
as a percent of total assets on a consolidated basis.

Earning assets – all loans and other investments that earn interest
or dividend income.

Efficiency ratio – Noninterest expense less amortization

of intangible assets as a percent of net interest income plus
noninterest income. This ratio measures the proportion of net
operating revenues that are absorbed by overhead expenses, so that
a lower value indicates greater efficiency.

Estimated insured deposits – in general, insured deposits are

total domestic deposits minus estimated uninsured deposits.
Beginning March 31, 2008, for institutions that file Call Reports,
insured deposits are total assessable deposits minus estimated
uninsured deposits. Beginning September 30, 2009, insured
deposits include deposits in accounts of $100,000 to $250,000
that are covered by a temporary increase in the FDIC’s standard
maximum deposit insurance amount (SMDIA). The Dodd-Frank
Wall Street Reform and Consumer Protection Act enacted on July 21,
2010, made permanent the standard maximum deposit insurance
amount (SMDIA) of $250,000. Also, the Dodd-Frank Act amended
the Federal Deposit Insurance Act to include noninterest-bearing
transaction accounts as a new temporary deposit insurance
account category. All funds held in noninterest-bearing transaction
accounts were fully insured, without limit, from December 31, 2010,
through December 31, 2012.

Failed/assisted institutions – an institution fails when regulators
take control of the institution, placing the assets and liabilities
into a bridge bank, conservatorship, receivership, or another
healthy institution. This action may require the FDIC to provide
funds to cover losses. An institution is defined as “assisted” when
the institution remains open and receives assistance in order to
continue operating.

Fair Value – the valuation of various assets and liabilities on the

­ alance sheet—including trading assets and liabilities, availableb
for-sale securities, loans held for sale, assets and l­ iabilities
accounted for under the fair value option, and foreclosed assets—
involves the use of fair values. During periods of market stress, the
fair values of some financial instruments and nonfinancial assets
may decline.

FHLB advances – all borrowings by FDIC-insured institutions

from the Federal Home Loan Bank System (FHLB), as reported by
Call Report filers, and by TFR filers prior to March 31, 2012.

Goodwill and other intangibles – intangible assets include

­ ervicing rights, purchased credit card relationships, and other
s
identifiable intangible assets. Goodwill is the excess of the purchase
price over the fair market value of the net assets acquired, less
subsequent impairment adjustments. Other intangible assets are
recorded at fair value, less subsequent quarterly amortization and
impairment adjustments.

Loans secured by real estate – includes home equity loans, junior
liens secured by 1-4 family residential properties, and all other
loans secured by real estate.

Loans to individuals – includes outstanding credit card balances
and other secured and unsecured consumer loans.

Long-term assets (5+ years) – loans and debt securities with
remaining maturities or repricing intervals of over five years.

Maximum credit exposure – the maximum contractual credit

exposure remaining under recourse arrangements and other sellerprovided credit enhancements provided by the reporting bank to
securitizations.

Mortgage-backed securities – certificates of participation in pools
of residential mortgages and collateralized mortgage obligations
issued or guaranteed by government-sponsored or private enter­
prises. Also, see “Securities,” below.

Net charge-offs – total loans and leases charged off (removed from
balance sheet because of uncollectability), less amounts recovered
on loans and leases previously charged off.

Net interest margin – the difference between interest and

dividends earned on interest-bearing assets and interest paid to
depositors and other creditors, expressed as a percentage of average
earning assets. No adjustments are made for interest income that is
tax exempt.

Net loans to total assets – loans and lease financing receivables,
net of unearned income, allowance and reserves, as a percent of
total assets on a consolidated basis.

Net operating income – income excluding discretionary

transactions such as gains (or losses) on the sale of investment
securities and extraordinary items. Income taxes subtracted
from operating income have been adjusted to exclude the portion
applicable to securities gains (or losses).

Noncurrent assets – the sum of loans, leases, debt securities, and
other assets that are 90 days or more past d­ue, or in nonaccrual
status.

Noncurrent loans & leases – the sum of loans and leases 90 days
or more past due, and loans and leases in nonaccrual status.

Number of institutions reporting – the number of institutions
that actually filed a financial report.

New reporters – insured institutions filing quarterly financial
reports for the first time.

Other borrowed funds – federal funds purchased, securities

sold with agreements to repurchase, demand notes issued to the
U.S. Treasury, FHLB advances, other borrowed money, mortgage
indebtedness, obligations under capitalized leases and trading
liabilities, less revaluation losses on assets held in trading accounts.

Other real estate owned – primarily foreclosed property. Direct

and indirect investments in real estate ventures are excluded. The
amount is reflected net of valuation allowances. For institutions
that filed a Thrift Financial Report (TFR), the v
­ aluation allowance
subtracted also includes allowances for other repossessed assets.
Also, for TFR filers the components of other real estate owned are
reported gross of valuation allowances. (TFR filers began filing Call
Reports effective with the quarter ending March 31, 2012.)

Percent of institutions with earnings gains – the percent of

institutions that increased their net income (or decreased their
losses) compared to the same period a year earlier.

FDIC QUARTERLY 29

2021 • Volume 15 • Number 3

“Problem” institutions – federal regulators assign a composite

rating to each financial institution, based upon an evaluation of
financial and operational criteria. The rating is based on a scale
of 1 to 5 in ascending order of supervisory concern. “Problem”
institutions are those institutions with financial, operational, or
managerial weaknesses that threaten their continued financial
viability. Depending upon the degree of risk and supervisory
concern, they are rated either a “4” or “5.” The number and assets
of “problem” institutions are based on FDIC composite ratings.
Prior to March 31, 2008, for institutions whose primary federal
regulator was the OTS, the OTS composite rating was used.

Recourse – an arrangement in which a bank retains, in form or in

substance, any credit risk directly or indirectly associated with an
asset it has sold (in accordance with generally accepted accounting
principles) that exceeds a pro rata share of the bank’s claim on
the asset. If a bank has no claim on an asset it has sold, then the
retention of any credit risk is recourse.

Reserves for losses – the allowance for loan and lease losses on a
consolidated basis.

Restructured loans and leases – loan and lease financing

receivables with terms restructured from the original contract.
Excludes restructured loans and leases that are not in compliance
with the modified terms.

Retained earnings – net income less cash dividends on common
and preferred stock for the reporting period.

Return on assets – bank net income (including gains or losses on

securities and extraordinary items) as a percentage of aver­age total
(consolidated) assets. The basic yardstick of bank profitability.

Return on equity – bank net income (including gains or losses on

securities and extraordinary items) as a percentage of average total
equity capital.

Risk-weighted assets – assets adjusted for risk-based capital

definitions which include on-balance-sheet as well as off-­balancesheet items multiplied by risk-weights that range from zero to
200 percent. A conversion factor is used to assign a balance sheet
equivalent amount for selected off-balance-sheet accounts.

Securities – excludes securities held in trading accounts. Banks’

securities portfolios consist of securities designated as “held-tomaturity” (reported at amortized cost (book value)), securities
designated as “available-for-sale” (reported at fair (market)
value), and equity s
­ ecurities with readily determinable fair values
not held for trading.

Securities gains (losses) – realized gains (losses) on held-to-­

maturity and available-for-sale securities, before adjustments for
income taxes. Thrift Financial Report (TFR) filers also include gains
(losses) on the sales of assets held for sale. (TFR filers began filing
Call Reports effective with the quarter ending March 31, 2012.)

Seller’s interest in institution’s own securitizations – the

reporting bank’s ownership interest in loans and other assets that
have been securitized, except an interest that is a form of recourse
or other seller-provided credit enhancement. Seller’s interests
differ from the securities issued to investors by the securitization
structure. The principal amount of a seller’s interest is generally
equal to the total principal amount of the pool of assets included
in the securitization structure less the principal amount of those
assets attributable to investors, i.e., in the form of securities issued
to investors.

30 FDIC QUARTERLY

Small Business Lending Fund – The Small Business Lending

Fund (SBLF) was enacted into law in September 2010 as part
of the Small Business Jobs Act of 2010 to encourage lending to
small businesses by providing capital to qualified community
institutions with assets of less than $10 billion. The SBLF Program
is administered by the U.S. Treasury Department (https://
home.treasury.gov/policy-issues/small-business-programs/
small-business-lending-fund).
Under the SBLF Program, the Treasury Department purchased
noncumulative perpetual preferred stock from qualifying
depository institutions and holding companies (other than
Subchapter S and mutual institutions). When this stock has been
issued by a depository institution, it is reported as “Perpetual
preferred stock and related surplus.” For regulatory capital
purposes, this noncumulative perpetual preferred stock qualifies as
a component of Tier 1 capital. Qualifying Subchapter S corporations
and mutual institutions issue unsecured subordinated debentures to
the Treasury Department through the SBLF. Depository institutions
that issued these debentures report them as “Subordinated notes
and debentures.” For regulatory capital purposes, the debentures
are eligible for inclusion in an institution’s Tier 2 capital in
accordance with their primary federal regulator’s capital standards.
To participate in the SBLF Program, an institution with outstanding
securities issued to the Treasury Department under the Capital
Purchase Program (CPP) was required to refinance or repay in full
the CPP securities at the time of the SBLF funding. Any outstanding
warrants that an institution issued to the Treasury Department
under the CPP remain outstanding after the refinancing of the CPP
stock through the SBLF Program unless the institution chooses to
repurchase them.

Subchapter S corporation – a Subchapter S corporation is treated
as a pass-through entity, similar to a partnership, for federal
income tax purposes. It is generally not subject to any federal
income taxes at the corporate level. This can have the effect of
reducing institutions’ reported taxes and increasing their after-tax
earnings.

Trust assets – market value, or other reasonably available value of
fiduciary and related assets, to include marketable securities, and
other financial and physical assets. Common physical assets held
in fiduciary accounts include real estate, equipment, collectibles,
and household goods. Such fiduciary assets are not included in the
assets of the financial institution.

Unearned income and contra accounts – unearned income for
Call Report filers only.

Unused loan commitments – includes credit card lines, home

equity lines, commitments to make loans for construction, loans
secured by commercial real estate, and unused commitments to
originate or purchase loans. (Excluded are commitments after
June 2003 for o­riginated mortgage loans held for sale, which are
accounted for as derivatives on the balance sheet.)

Yield on earning assets – total interest, dividend, and fee income
earned on loans and investments as a percentage of average
earning assets.

THE IMPORTANCE OF TECHNOLOGY INVESTMENTS FOR COMMUNITY BANK
LENDING AND DEPOSIT TAKING DURING THE PANDEMIC
For many community banks and their customers, the pandemic was a crash course in the
use of technology in all facets of banking. At the onset of the pandemic, many community
banks turned to technology to provide financial services in the face of temporary
branch closures and stay-at-home orders.1 As restrictions eased, banks continued to use
technology for customers and employees who wished to limit physical contact and for
whom digital banking had become part of the new normal.
Given the important role of technology during the pandemic, this article examines whether
community banks that invested more in technology before 2020 differed from banks that
invested less in technology in their core functions of lending and deposit taking.
Based on data from Consolidated Reports of Condition and Income (Call Reports) and other
available sources, community banks differed in their technology adoption and spending
(hereafter referred to as technology investment) in the years leading up to the pandemic.
Community banks with greater technology investment reported larger increases in loan
growth in 2020, driven primarily by participation in the Paycheck Protection Program
(PPP). These community banks originated a greater share of PPP loans on average to
borrowers regardless of the loan size, when the loan was made, or the distance of the
borrower from the nearest bank branch. Those banks also reported larger increases in
deposit growth in 2020 than did banks with less technology investment. Generally the
recent deposit growth at those institutions was due to increases in deposit balances of
existing customers rather than from new depositors.

Data on Technology
Investment Are Limited
and Must Be Estimated

	Comprehensive data that directly measure technology investment are not available for all
financial institutions, including many community banks. Banks do not report such data
on the Call Report, and information available through other regulatory filings is often not
comparable for, or is not required of, many entities.
However, available data can approximate technology investment in the absence of more
refined measures. This article uses three sources of data—the Call Report, the Conference
of State Bank Supervisor’s (CSBS) National Survey of Community Banks, and the Aberdeen
Technology Data Cloud—to estimate technology adoption and spending by community
banks before the pandemic.
FDIC-insured institutions must report components of noninterest expense, including
data processing expenses exceeding certain thresholds, on the Call Report.2 While not all
institutions met the required reporting thresholds for data processing expenses, many did,
and many banks reported these expenses despite not meeting the reporting threshold. A
total of 3,424 community banks (76 percent of established community banks) that were
active as of December 31, 2020, reported their data processing expenses for the fourth
quarter of each year from 2016 to 2019.3 For these banks, average annual growth in data
processing expenses from 2017 to 2019 was calculated as a measure of technology spending
before the pandemic.4

1 This

article uses the definition of “community bank” in the Notes to Users of the FDIC’s Quarterly Banking Profile. That
definition uses criteria outlined in the FDIC’s 2020 Community Banking Study to identify community banks. The 2020
Community Banking Study is available at https://www.fdic.gov/resources/community-banking/report/2020/2020-cbistudy-full.pdf.
2 Selected

items that exceed $100,000 and 7 percent of other noninterest expense must be reported on Schedule RI-E of
the Call Report. Before 2018, the reporting threshold was $100,000 and 3 percent of other noninterest expense. There
was no noticeable change in the percentage of institutions that reported data processing expenses before and after the
reporting change. The analysis included in this article also did not significantly vary when this measure was limited to
expenses reported in 2018 and 2019.
3 Established

community banks are community banks that have been federally insured for at least five years—those that
have been federally insured since December 31, 2015, or earlier.
4 On

the Call Report, expenses are reported as the cumulative amount spent during the calendar year (year-to-date).
Average annual growth is calculated using fourth quarter data because it is the period for which a bank is most likely to
exceed the required reporting threshold.

FDIC QUARTERLY 31

2021 • Volume 15 • Number 3

In their annual national survey of community banks, CSBS asked if a bank offered a specific
product or service. A total of 717 community banks that were active as of December 31,
2020, participated in one or both of the surveys conducted in 2019 and 2020. The number of
technology-enabled products or services that a bank offered from among seven included in
the survey was calculated as a measure of technology adoption.5 While this broad measure
does not account for differences between the products and services, including the level of
adoption among banks, quality, or use by customers, it should provide an estimation of a
bank’s level of technology adoption.6
Finally, Aberdeen, now Spiceworks Ziff Davis, provided estimates of the number of personal
computers (PCs), number of employees, and annual information technology (IT) spending,
specified to the branch level.7 For community banks where sufficient information was
identifiable and available, branch data were aggregated and extrapolated to the institution
level, resulting in data for 3,652 community banks (81 percent of established community
banks) that were active as of December 31, 2020.8 The average number of PCs per employee
was calculated as a proxy measure of technology adoption. Annual IT spending as a share of
total assets from 2017 to 2019 was calculated as a proxy measure of technology spending.
Not surprisingly, the four measures—IT spending to assets, number of PCs per employee,
annual growth in data processing expenses, and number of adopted technologies—
were positively correlated with each other. These correlations, however, were relatively
weak, suggesting that the four measures captured different components of technology
investment, as intended. For example, number of PCs per employee and number of adopted
technologies were, arguably, proxies for different components of a community bank’s
adoption of technology. The number of PCs per employee targeted hardware, while the
number of adopted technologies targeted the specific products and services included in the
CSBS survey, the adoption of which was more likely driven by software. In the case of IT
spending to assets and annual growth in data processing expenses, both were intended to
proxy for technology spending; however, data processing expenses included only services
performed for the bank by others, while IT spending also included in-house costs, such as
IT staff.

Community Banks
Differed in Their
Technology Investment
Before the Pandemic

	Based on the measures above, community banks differed in their technology investment
before the pandemic. As indicated by the dotted blue bars at the top of each panel in Chart 1,
community banks above the 25th and below the 75th percentiles for each technology
investment measure spent between 0.45 percent and 0.83 percent of their assets on IT, had
between 1.42 and 1.67 PCs per employee, and grew their data processing expenses between
1.9 percent and 15.1 percent, on average, from 2017 to 2019.
While the differences in technology investment may appear small in some cases, they are
meaningful. For example, a difference of 0.38 percent in IT spending as a share of assets
translates to roughly $820,000 in annual IT spending for a bank with $216 million in
assets—the median size of an established community bank at the end of 2019, just before
the start of the pandemic. For the median community bank, that difference of $820,000
equaled roughly 8 percent of total revenues in 2019.

5 For

institutions that participated in both surveys, only the response from 2020 was used, as that response most likely
reflects the status of the bank at the onset of the pandemic. The seven technology-enabled products or services included
in the surveys were online loan applications, online loan closure, automated loan underwriting, remote deposit capture,
electronic bill payment, mobile banking, and interactive teller machines.
6 For

more information on the adoption rate of each technology-enabled product and service and the distribution of
adopted technologies, in total, among community banks, see Chart 6.1 and Table 6.1.1 of the FDIC 2020 Community
Banking Study at https://www.fdic.gov/resources/community-banking/report/2020/2020-cbi-study-full.pdf.
7 Aberdeen

uses web mining of businesses and employee profiles to collect data and redistributes the data for marketing

purposes.
8 The

Aberdeen data did not include FDIC certificate numbers. Instead, company name, street address, zip code, and
website URL from the Aberdeen data were matched with similar information from FDIC Summary of Deposits data. Only
community banks with matched data for more than half of its branches in at least two years from 2017 to 2019 were
included.

32 FDIC QUARTERLY

THE IMPORTANCE OF TECHNOLOGY INVESTMENTS FOR COMMUNITY BANK LENDING AND
DEPOSIT TAKING DURING THE PANDEMIC
Chart 1
Larger Community Banks Invested More in Technology, While Differences in Location Were Less Important
Average Technology Investment From 2017 to 2019, Interquartile Ranges
Annual Growth in Data Processing Expenses

IT Spending to Assets

Number of Personal Computers per Employee

Community Banks

Community Banks

Community Banks

Above Median Size

Above Median Size

Above Median Size

At or Below Median Size

At or Below Median Size

At or Below Median Size

Metropolitan Area

Metropolitan Area

Metropolitan Area

Rural Area

Rural Area

Rural Area

High-COVID Case Area

High-COVID Case Area

High-COVID Case Area

Low-COVID Case Area

Low-COVID Case Area
0

5

10
Percent

15

20

0.25

Low-COVID Case Area
0.40

0.55
0.70
Percent

0.85

1.00

1.30

1.40

1.50

1.60

1.70

1.80

Sources: FDIC, Aberdeen Data Technology Cloud, and Johns Hopkins University.
Note: Shaded bars indicate the interquartile range (25th to 75th percentile). Unshaded areas in the middle of each bar indicate the median. Median size is based on total assets at the end of 2019.
Banks in high-COVID case areas were those that had at least half of their branches in a county with cumulative reported cases per 100,000 residents in the upper quartile (75th percentile or greater) as of
June 30, 2020. Banks in low-COVID case areas were those that had at least half of their branches in a county with cumulative reported cases per 100,000 residents in the lower quartile (25th percentile or
lower) as of June 30, 2020.

Established community banks that were larger—above the median asset size of
$216 million at the end of 2019—invested more in technology before the pandemic. As
shown by the dark blue bars in Chart 1, on average from 2017 to 2019, larger community
banks reported faster annual growth in data processing expenses, spent more on IT
relative to their assets, and had a greater number of PCs per employee than did smaller
community banks at the 25th and 75th percentiles and at the median. Similarly, 56 percent
of community banks above the median asset size offered at least four of the seven
technology-enabled products and services included in the CSBS survey, compared with
24 percent of community banks at or below the median. Greater technology investment,
based on the four technology spending and adoption measures, by larger banks is
consistent with the finding in the 2020 FDIC Community Bank Study that community bank
size was the strongest indicator of technology adoption as of 2019.9
Technology investment also appeared to vary by a community bank’s location, although
results were mixed. Before the pandemic, community banks with a main office in a
metropolitan area (urban community banks) generally reported faster growth in data
processing expenses and had a higher number of PCs per employee than did banks with
a main office in a rural area (rural community banks). This is shown by the medium blue
bars in Chart 1. However, the median for IT spending as a share of assets was lower among
urban community banks than among rural community banks. Similar patterns were found
for community banks that operated at least half of their branches in areas with relatively
high or low COVID case rates (light blue bars in Chart 1), using data from Johns Hopkins
University.10 While differences in technology investment based on location were not as large
as those based on asset size, they are nonetheless important to consider when evaluating
any differences in community bank lending and deposit taking during the pandemic.

Previous Technology
Investment May Have
Affected Lending and
Deposit Taking During
the Pandemic

	During the pandemic, differences in previous technology investment may have affected
community bank core functions of lending and deposit taking. For community bank
staff and customers already familiar with different technologies because of previous
investments by their institution, temporary branch closures and the required shift to
digital banking may have been less disruptive to ongoing banking activities. Compared
with banks that invested less in technology before 2020, these banks may have been

9 FDIC,

“Technology in Community Banks,” 2020 FDIC Community Banking Study, pp. 6-1 to 6-20, https://www.fdic.gov/
resources/community-banking/report/2020/2020-cbi-study-full.pdf.
10 High-COVID

case areas are counties with cumulative cases per 100,000 residents at or above the 75th percentile.
Low-COVID case areas are counties with cumulative cases per 100,000 residents at or below the 25th percentile. Both
measures are as of June 30, 2020.

FDIC QUARTERLY 33

2021 • Volume 15 • Number 3

better‑positioned to grow their deposits and mitigate reductions in loan growth associated
with the pandemic.
The following sections study the potential impact of previous technology investment by
comparing loan growth, including PPP lending, and deposit growth before and during the
pandemic, using the measures described above.

Community Banks With Greater Technology Investment Before the Pandemic Reported
Stronger Loan Growth in 2020
Technology investment may have affected community bank lending during the pandemic
in several ways. Banks with greater technology investment may have been better equipped
to accept and process online loan applications and the required supporting documentation,
mitigating the effect of branch closures and customers’ desire to limit in-person
interaction. Community banks with greater technology offerings may have also been more
likely to attract customers from nonbanks that curtailed their lending at the start of the
pandemic, particularly nonbanks with a large online presence.11
As shown in Chart 2, community banks with greater previous investment in technology
(indicated by the dark blue and dotted blue bars) reported stronger loan growth across all
four technology measures in 2020 compared with banks with less investment (light blue
and dark red bars). This correlation alone, however, is not enough to establish whether
any link between technology investment and lending growth strengthened, as anticipated,
during the pandemic. It could be that banks with greater technology investment already
had stronger loan growth before the pandemic, which continued in 2020. Among
community banks in the highest quartiles for number of PCs per employee and average
growth in data processing expenses, the medians for average quarterly loan growth from
2017 to 2019 were noticeably higher than the medians for banks in the lowest quartiles.
However, Chart 2 also shows that, across all four technology measures, differences in
median loan growth between community banks with greater and less investment in
technology grew in 2020, relative to the three years before the pandemic. Compared with
community banks in the lowest quartile, community banks in the highest quartile reported
median average loan growth in 2020 that was

·

0.56 percentage points higher for IT spending to total assets (compared with
0.04 percentage points lower from 2017 to 2019)

·

0.84 percentage points higher for the number of PCs per employee (compared with
0.37 percentage points higher from 2017 to 2019)

·

0.85 percentage points higher for annual growth in data processing expenses (compared
with 0.54 percentage points higher from 2017 to 2019)

Community banks that adopted four or more of the technologies included in the CSBS
survey reported a median quarterly loan growth that was, on average, 0.74 percentage
points higher in 2020 than banks that adopted three or fewer technologies (compared with
0.08 percentage points higher from 2017 to 2019). Averaged across the four measures, the
difference in the medians for average quarterly loan growth was three times higher in
2020 than the difference in the medians from 2017 to 2019 (0.75 percentage points versus
0.24 percentage points), in favor of community banks with greater previous investment in
technology. Given that loans constitute about two-thirds of a community bank’s assets, a
half of a percentage point difference in quarterly loan growth would have equaled nearly
$3 million in loans for the median-size community bank in 2020.

11 Analysis

by Standard & Poor’s, for example, found that origination volume among the major digital lenders for
consumers, small and medium businesses, and students fell 36 percent in the first three quarters of 2020, relative to
the previous year. See Nimayi Dixit, “U.S. Digital Lender Originations Expected to Rebound Strongly After Painful 2020,”
S&P Global Market Intelligence, February 1, 2021, https://www.spglobal.com/marketintelligence/en/news-insights/
research/us-digital-lender-originations-expected-to-rebound-strongly-after-painful-2020.

34 FDIC QUARTERLY

THE IMPORTANCE OF TECHNOLOGY INVESTMENTS FOR COMMUNITY BANK LENDING AND
DEPOSIT TAKING DURING THE PANDEMIC
Chart 2
Community Banks With Greater Technology Investment Reported a Larger Increase
in Loan Growth in 2020
Median Average Loan Growth by Previous Technology Investment
Percent
2.5

Lowest Quartile

0–3 Technologies

Highest Quartile

4–7 Technologies

2.0
1.5
1.0
0.5
0.0

2017–2019
2020
IT Spending
to Assets

2017–2019
2020
Number of
PCs per
Employee

2017–2019
2020
Average Growth in
Data Processing
Expenses

2017–2019
2020
Number of
Adopted
Technologies

Sources: FDIC, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.
Note: PCs stands for personal computers.

It remains possible that factors other than technology investment may have caused or
influenced differences in loan growth in 2020. For example, larger community banks
and those in metropolitan areas that tended to invest more in technology may have been
more resilient to the effects of the pandemic due to their larger and more geographically
diverse customer bases. The widened gap in loan growth shown in Chart 2 may not have
resulted from a difference in previous technology investment but instead from bank size
and location.
Similar trends in lending growth were found among different subsets of community
banks based on size and location. Differences in the median for average loan growth by
technology investment widened in 2020 for community banks that were above and below
the median asset size before the pandemic, for urban and rural community banks, and for
community banks in areas with higher and lower COVID case rates. In each case, the gap
in the median for average loan growth widened in favor of community banks that invested
more in technology before the pandemic. These findings lend support to the argument that
previous technology spending and adoption helped banks better serve their customers
during the pandemic.

The PPP Drove Differences in Loan Growth in 2020
Community banks held just over $150 billion in PPP loans at the end of third quarter 2020
following the conclusion of the second round of the program on August 8.12 This amount
represented nearly one-third of PPP loan balances reported by FDIC-insured institutions,
despite community banks holding only slightly more than 10 percent of banking industry
assets.13
Lending associated with the PPP also appears to be the main reason that the difference
in loan growth on the basis of technology investment grew in 2020, relative to the
years immediately preceding the pandemic. Excluding PPP loans, the differences in the
medians for average loan growth narrowed for all of the technology investment measures,
with the average difference across the measures falling from 0.75 percentage points to
0.28 percentage points, or roughly equal to the difference reported before the pandemic.

12 This

article focuses on PPP loan data at the end of the third quarter, as these data include all loans made in the first and
second rounds of the program and were not affected by loan forgiveness, which had not yet begun.
13 For

further analysis of contributions of community banks to the PPP and how factors such as location, specialty,
and size affected participation, using data from the Call Report as of June 30, 2020, see Margaret Hanrahan and
Angela Hinton, “The Importance of Community Banks in Paycheck Protection Program Lending,” FDIC Quarterly 14,
no. 4. (2020): 31–36, https://www.fdic.gov/analysis/quarterly-banking-profile/fdic-quarterly/2020-vol14-4/fdicv14n4-3q2020.pdf.

FDIC QUARTERLY 35

2021 • Volume 15 • Number 3

Given that PPP lending widened the gap in loan growth during 2020 in favor of community
banks with greater technology investment, it is not a surprise that these banks also held
more PPP loans than did banks with less technology investment. As shown in Table 1, for
each technology investment measure, a larger share of community banks among those
with greater investment before the pandemic reported a nonzero PPP loan balance on their
third quarter 2020 Call Report compared with banks with less investment. Averaged across
the four measures, the share of community banks that held PPP loans at the end of third
quarter 2020 was 10.4 percentage points higher for banks with greater previous technology
investment than for banks with less technology investment. Among those banks with
a nonzero PPP loan balance, banks that invested more in technology also had a median
share of PPP loans to assets that was more than 2 percentage points higher than those
that invested less.14 For the median-size community bank, this difference equaled roughly
$4.5 million in PPP lending. The association between greater technology investment before
the pandemic and a higher share of PPP loans was not solely driven by larger community
banks. Table 1 also shows that all but one of the technology measures—annual growth in

Table 1
Community Banks That Invested More in Technology Held More PPP Loans
PPP Loan Balances by Previous Technology Investment, Third Quarter 2020
Percentage of Community Banks
With Nonzero PPP Loan Balances at
the End of Third Quarter 2020
Below Median
Asset Size

All
Annual IT Spending to Assets
Lowest Quartile
Middle Quartiles
Highest Quartile
Number of PCs per Employee
Lowest Quartile
Middle Quartiles
Highest Quartile
Annual Growth in Data Processing Expenses
Lowest Quartile
Middle Quartiles
Highest Quartile
Number of Technologies Adopted
0–3 Technologies
4–7 Technologies
Average of All Technology Measures
Less Technology Investment
Greater Technology Investment
All Community Banks

Median PPP Loan Balance as a
Percentage of Assets
Below Median
Asset Size

All

72.1
86.6
90.7

63.1
79.6
81.9

2.3
4.1
5.1

1.2
2.6
3.2

76.2
86.3
87.7

71.8
77.1
78.2

2.7
4.3
4.7

2.0
2.4
2.7

84.6
85.9
87.3

78.0
77.2
76.5

3.9
4.5
5.1

2.6
2.9
2.7

87.5
96.1

82.9
90.8

4.0
6.4

2.9
5.3

80.1
90.5
84.4

74.0
81.9
76.1

3.2
5.3
4.0

2.2
3.5
2.4

Sources: FDIC, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.
Note: PPP = Paycheck Protection Program. Given the strong association between asset size and technology investment, quartiles for each technology investment measure
were recalculated for community banks below the median asset size.

14 Total

assets held by community banks grew 14.2 percent in 2020, compared with 1.2 percent in 2017, 2.2 percent in
2018, and –1.2 percent in 2019. This article measured PPP lending as a share of assets using total assets reported by the
bank at the end of 2019, rather than third quarter 2020 when PPP lending was reported. This approach prevents other
effects that technology investment may have had on asset growth in 2020, unrelated to participation in the PPP, from
influencing the measure.

36 FDIC QUARTERLY

THE IMPORTANCE OF TECHNOLOGY INVESTMENTS FOR COMMUNITY BANK LENDING AND
DEPOSIT TAKING DURING THE PANDEMIC
data processing expenses—were positively related to PPP lending among community banks
at or below the median asset size. Averaged across the four technology measures, greater
technology investment among these smaller banks was associated with an 8 percentage
point increase in the share of banks holding PPP loans as well as a 1.3 percentage point
increase in PPP loans as a share of assets relative to those with less technology investment.
Beyond the reasons previously discussed, other reasons unique to the PPP and the
environment in which it was implemented could explain why technology investment may
have facilitated faster loan growth. Some possible explanations include limited funding,
strong demand, and a restricted ability and limited desire for borrowers and lenders to use
nondigital processes.

Some, but Not All, of the Difference in PPP Lending by Technology Investment Stemmed
From Larger Loans
At the aggregate level, measuring PPP lending based on PPP loans as a share of assets
does not fully address whether a community bank served more or different PPP borrowers
during the pandemic. A smaller loan, for example, had less impact on lending as a share
of assets than a larger loan, despite affecting the same number of borrowers. Applied to
the findings above, it could be that community banks with greater previous investment in
technology reported a greater share of PPP loans because they made larger loans, and not
because they served more borrowers.
Based on total PPP loan volume and number of PPP loans as reported on the third quarter
2020 Call Report, the median for average PPP loan size among community banks with greater
technology investment was, on average across the four measures, about $13,500 greater
than the median for banks with less technology investment. This difference at least partly
explains the higher share of PPP lending for banks with greater technology investment.
Further analysis of loan size is not possible using Call Report data; however, the Small
Business Administration (SBA) released individual loan-level data, which included
approved loan amounts and identifying lender information.15 Chart 3 uses that data to
compare PPP lending by previous technology investment, broken down by loan size. The
largest difference in the average share of PPP loans (by volume) to assets was for PPP loans
with an initial approved amount of more than $1 million. For loans of this size, community

Chart 3
Community Banks That Invested More in Technology Originated a Greater Share of
PPP Lending for All Loan Size Categories
Average PPP Loan Volume as a Share of Assets by Loan Size

Percent of Assets
3.0

Banks With Less Technology Investment
Banks With Greater Technology Investment

2.5
2.0
1.5
1.0
0.5
0.0

Less Than 10

10 to 25

25 to 50

50 to 100
100 to 250
Loan Size (in Thousands of Dollars)

250 to 500

500 to 1,000

More Than 1,000

Sources: FDIC, Small Business Administration, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.
Note: PPP = Paycheck Protection Program. Loan approvals based on initial approved amounts. Approvals as a share of assets by week were
calculated for each measure and then averaged across the four technology investment measures.

15 Several

versions of PPP data have been released by the SBA since the program’s inception. This analysis uses data
downloaded from the SBA website as of February 2021. The SBA data did not include FDIC certificate numbers. Matching
techniques were used to link individual loans to FDIC-insured institutions, when applicable. See https://data.sba.gov/
dataset/ppp-foia.

FDIC QUARTERLY 37

2021 • Volume 15 • Number 3

banks with greater technology investment (indicated by the dark blue bars in Chart 3)
originated a volume that was 0.35 percentage points higher, as a share of assets, than banks
with less investment. This finding is consistent with the argument that community banks
with greater previous investment in technology made larger loans. However, Chart 3 also
shows that community banks with greater technology investment originated a greater
share of PPP loans in smaller size categories than did banks with less investment. This
suggests that banks with greater technology investment made a larger share of loans of all
sizes through the PPP, and that the association between greater technology investment and
a higher share of PPP lending did not stem solely from larger loans.

Community Banks With Greater Previous Investment in Technology Also Approved More
PPP Loans Across Time and Distance
Beyond loan size, community banks with greater investment in technology before the
pandemic may have been able to originate more PPP loans than did banks with less
investment because their speed of approval was faster or because they had easier access
to borrowers outside of their local geographic market and vice versa. Previous technology
investment may have accelerated the loan approval process to the extent that it allowed
lenders to accept applications and the required supporting documentation online and
automated the submission process. On the other hand, the impact of technology investment
may have been reduced by the unique nature of the PPP, last-minute changes to SBA policy,
and reports of difficulties connecting with E-Tran, the SBA’s loan servicing portal.
Speed of approval may have been particularly important for PPP borrowers, given that
funding for the program, while unprecedented in size, was ultimately limited by borrower
demand. The first round of funding—$342 billion—was exhausted within two weeks. The
second round of funding—$317 billion—remained available for almost 15 weeks (see box
below). The PPP’s limited funding and time frame arguably gave an advantage to financial
institutions with a faster approval process.
As indicated by the sizes of the dark blue and light blue bars in Chart 4, the gap in PPP
loan volume as a share of assets was largest during the early weeks of the program, with
community banks that invested more in technology before the pandemic approving a larger
share of loans than did banks with less investment. While this does not necessarily indicate
a difference in approval times, the largest difference in the share of PPP loans by volume
in favor of banks with greater technology investment occurred during the first week of the
program. During that week, PPP loans as a share of assets was 25 percent higher for those
banks with higher technology investment than for banks with less technology investment.
This difference was larger than in any other week during which more than 1 percent
of loans were approved, and provides some evidence that banks with greater previous
investment in technology were faster out of the gate in approving PPP loans.

The Paycheck Protection Program in 2020
In the first months of the pandemic, Congress provided $659 billion to the U.S. Small Business Administration (SBA) to
guarantee loans to small businesses to pay up to 24 weeks of eligible employee salaries, payroll costs, and benefits, as
well as other qualified expenses such as mortgage interest, rent, and utilities, and to pay banks for the forgiven loans and
accrued interest. Lenders received an origination fee of 1 to 5 percent, depending upon the size of the loan.
Applications for the first round of funding were accepted from April 3, 2020, through April 16, 2020, and for the second
round of funding from April 27, 2020, through August 8, 2020. During both rounds, more than 5.2 million loans were
approved for a total of $525 billion.a
a SBA,

“PPP Report: Approvals Through 08/08/2020,” (August 2020).

38 FDIC QUARTERLY

THE IMPORTANCE OF TECHNOLOGY INVESTMENTS FOR COMMUNITY BANK LENDING AND
DEPOSIT TAKING DURING THE PANDEMIC
Chart 4
The Advantage in PPP Lending for Community Banks That Invested More in
Technology Was Most Relevant During the Early Weeks of the Program
Average PPP Loan Volume as a Share of Assets by Week

Percent of Assets
10.0

Week 1
Week 2

Week 3
Beyond Week 3

8.0
6.0
4.0
2.0
0.0

Banks With Less Technology Investment

Banks With Greater Technology Investment

Sources: FDIC, Small Business Administration, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.
Note: PPP = Paycheck Protection Program. Loan approvals based on initial approved amounts. Approvals as a share of assets by week were
calculated for each measure and then averaged across the four technology investment measures. Times exclude a period of 11 days following the
conclusion of the first round and before the beginning of the second round of the program.

The difference in PPP lending in favor of community banks with greater technology
investment was not limited to the early weeks of the program, however. Throughout all but
one week of the program, community banks with greater technology investment originated
more PPP loans when measured as a share of their assets than did community banks with
less investment. Similar to the findings for loan size, speed of approval was not likely
the only reason why community banks with greater technology investment originated a
greater share of PPP lending.
Another way in which technology may have aided community banks is through easier
access to PPP borrowers outside of their geographic market. Some community banks,
regardless of previous technology investment, may have viewed the PPP as a low-risk
opportunity to test and develop new lending relationships outside of their market area,
given that the loans were fully guaranteed by the SBA. Greater previous investment
in technology, however, may have helped these banks better reach and target new
customers—for example, through social media as well as marketing using data and
machine learning. Technology-enabled services, such as online loan applications and
servicing portals and chatbots, may have also allowed customers that were located far from
a branch to more easily apply for a loan and navigate the loan process.
The same SBA data used to analyze the size and timing of PPP loans also included data
on borrowers, which was used to approximate the distance between PPP borrowers and
their lenders.16 As shown in Figure 1, the share of PPP loans originated by community
banks for borrowers located more than 100 miles from a bank branch was higher for banks
with greater technology investment than for those with less technology investment,
as expected. However, the largest difference in PPP lending on the basis of technology
investment was for “local” PPP loans—loans made to borrowers located within five miles
of a bank branch. Community banks with greater technology investment approved local
PPP loans totaling 4.5 percent of their assets, on average, compared with an average of
3.7 percent for banks with less technology investment. For a community bank with the
median asset size of $216 million, this difference of 0.8 percent of assets equaled about
$1.7 million in PPP loans.

16 Data

on the latitude and longitude of PPP borrowers were obtained from Geocodio and are available at
https://www.geocod.io/geocoded-ppp-loan-data/. These data were used to calculate the distance from each borrower
to the nearest branch of the community bank lender, using the latitude and longitude of bank branches from FDIC
Summary of Deposits data.

FDIC QUARTERLY 39

2021 • Volume 15 • Number 3

Figure 1
Community Banks That Invested More in Technology Originated a Greater Share of
PPP Loans Regardless of a Borrower’s Proximity to a Bank Branch
Average PPP Loan Volume as a Share of Assets by Distance From Borrower to Lender

Percent of Assets
3.5

2 Miles

Banks With Less Technology Investment
5 Miles

10 Miles

Banks With Greater Technology Investment

25 Miles

100 Miles

3.0
2.5
2.0
1.5
1.0
0.5
0.0

Distance From Borrower to Lender (Nearest Branch)

Sources: FDIC, Small Business Administration, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.
Note: PPP = Paycheck Protection Program. Loan approvals based on initial approved amounts. Approvals as a share of assets were calculated for
each measure and then averaged across the four technology investment measures.

Generally, community banks made most of their PPP loans to borrowers within five miles
of their branch network consistent with research indicating that local bank relationships
strongly predicted PPP credit.17 Table 2 examines how technology may have differently
affected community banks that entered the pandemic with relatively larger shares of
commercial and industrial (C&I) loans—a likely indicator of strong existing relationships
with local businesses. For banks with C&I loans at or above the 75th percentile (highest
quartile) for all established community banks at the end of 2019, the difference in local
PPP loans to assets on the basis of technology investment was 1.1 percentage points. For
banks with C&I loans at or below the 25th percentile (lowest quartile), the difference was
0.6 percentage points. The larger difference in local PPP lending by technology investment
among banks with larger shares of C&I loans leading into the pandemic suggests that
greater previous investment in technology may have contributed to additional PPP lending,
in part, by facilitating loans to existing borrowers.
Overall, several factors likely drove the relationship between PPP lending and technology
investment before the pandemic in favor of community banks with greater investment.
Community banks with greater technology investment made larger PPP loans, but also
made more PPP loans of all sizes, during all stages of the program, and both inside and
outside of their local geographic market.

Table 2
The Advantage in PPP Lending Associated With Greater Investment in Technology Was Higher for Community Banks
With More Business Loans
Previous Technology Investment
C&I Loans to Assets

Banks With Less Investment

Banks in Lowest Quartile
Banks in Highest Quartile
All Community Banks

Banks With Greater Investment

3.3 %
4.4 %
3.7 %

3.9 %
5.5 %
4.5 %

Sources: FDIC, Small Business Administration, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.
Note: PPP = Paycheck Protection Program. C&I = Commercial and Industrial. Local PPP loans defined as PPP loans made to borrowers located within five miles of a lending
bank branch. C&I loans to assets based on amounts reported at the end of 2019, before the onset of the pandemic. Loan approvals based on initial approved amounts.
Approvals as a share of assets were calculated for each measure and averaged across the four technology investment measures.

17 Lei

Li and Philip Strahan, “Who Supplies PPP Loans (And Does it Matter)? Banks, Relationships, and the
COVID Crisis,” (Working Paper, no. 28286, National Bureau of Economic Research, December 2020),
https://www.nber.org/papers/w28286.

40 FDIC QUARTERLY

THE IMPORTANCE OF TECHNOLOGY INVESTMENTS FOR COMMUNITY BANK LENDING AND
DEPOSIT TAKING DURING THE PANDEMIC
Community Banks With Greater Technology Investment Before the Pandemic Reported
Larger Deposit Growth in 2020
Bank deposits increased significantly at the onset of the pandemic, growing 17.8 percent
over the first three quarters of 2020. Among community banks, deposits grew 11.4 percent.
This growth likely stemmed from multiple factors such as lower consumption and higher
savings by consumers, credit line drawdowns, expansionary monetary policy, and
increased spending by the federal government, including direct payments to individuals.
The PPP also likely influenced deposit growth to the extent that borrowers (and others
for whom the loan proceeds were intended, including employees) directed loan funds into
deposit accounts.
Previous investment in technology might have affected deposit growth during the
pandemic to the extent that it facilitated remote deposit capture, remote payments, and
other functionality that enabled customers to conduct deposit transactions at a time when
face-to-face interactions were more difficult or not possible. If technology investment
attracted more PPP borrowers, as previously indicated, faster deposit growth may also
have resulted from those borrowers depositing the proceeds of the loan into the same
institution.

Chart 5
Deposit Growth Before and During the Pandemic by Technology Investment
Median Average Loan Growth by Previous Technology Investment

Percent
5.0

Lowest Quartile

0–3 Technologies

Highest Quartile

4–7 Technologies

4.0
3.0
2.0
1.0
0.0

2017–2019
2020
IT Spending
to Assets

2017–2019
2020
Number of
PCs per
Employee

2017–2019
2020
Average Growth in
Data Processing
Expenses

2017–2019
2020
Number of
Adopted
Technologies

Sources: FDIC, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.
Note: PCs stands for personal computers.

As shown by the differences between the light blue and dark blue bars and the difference
between the dark red and dotted blue bars in Chart 5, during the three years before the
pandemic, greater technology investment was associated with higher average deposit
growth across all four measures. The differences ranged in magnitude from 0.11 percentage
points (for IT spending to assets) to 0.60 percentage points (for number of PCs per
employee), with an average of 0.38 percentage points across the four measures. In 2020,
differences in the median for average deposit growth widened for three out of the four
technology investment measures. Averaged across the measures, community banks with
greater previous investment in technology reported a median average deposit growth
that was 0.66 percentage points higher than the median for banks with less previous
investment.
The larger difference in deposit growth by previous technology investment for 2020
likely stemmed from higher average account sizes rather than an increase in the number
of accounts. Median growth in the number of nonretirement deposit accounts was, on
average, 31 basis points higher for community banks with greater technology investment
than for banks with less technology investment, from 2017 to 2019. During 2020, the
difference declined to 23 basis points, indicating that the increased difference in deposit
growth on the basis of technology investment reported during the pandemic was not likely
caused by an increased inflow of depositors.

FDIC QUARTERLY 41

2021 • Volume 15 • Number 3

Technology Will Continue
to Be Important to
Community Banks
Beyond the Pandemic

	This article provides compelling evidence that community banks with more technology
investment before the pandemic were better able to serve their customers as a lender and
deposit-taker amid the challenges of the pandemic. Further data and research are needed to
better understand the ways that technology may have assisted banks during the pandemic,
and whether the advantage in loan and deposit growth enjoyed by community banks that
invested more in technology during 2020 will become part of the new normal. Differences
in loan growth and potentially deposit growth can be sustained if new relationships created
through the PPP lead to non-PPP lending and deposits after the pandemic. Given the rising
use of digital banking channels before and during the pandemic, it appears likely that an
effective approach to technology and technology investment will continue to be important
for community banks in the future.

	Author:
Daniel Hoople
Financial Economist
Division of Insurance and Research

42 FDIC QUARTERLY