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Quarterly Banking Profile Third Quarter 2009 INSURED INSTITUTION PERFORMANCE ■ ■ ■ ■ ■ Industry Posts Net Profit of $2.8 Billion Increased Revenues, Lower Securities Losses Offset Higher Loan-Loss Provisions Net Interest Margins Improve at Most Institutions Troubled Loans Continue to Rise, but Rate of Growth Slows Loan Balances Decline by 2.8 Percent in the Quarter Earnings Register Modest Improvement Net Interest Margin Rises to Four-Year High Rising loan-loss provisions continued to dominate industry results, but growth in operating revenues, combined with appreciation in securities values, helped the industry post an aggregate net profit. Insured institutions earned $2.8 billion in net income in the third quarter of 2009, more than three times the $879 million they earned a year earlier and an improvement over the $4.3 billion net loss posted in the second quarter of 2009. Growth in net interest income, lower realized losses on securities and other assets, higher noninterest income, and lower noninterest expenses, all contributed to the year-over-year increase in net income. Only 43 percent of all institutions reported higher quarterly earnings compared to a year ago, but this is the highest proportion reporting improved earnings in the past six quarters. More than one in four institutions (26.5 percent) was unprofitable in the third quarter, up slightly from 24.6 percent a year ago. Net interest income was $4.6 billion (4.8 percent) higher than in the third quarter of 2008. The average net interest margin (NIM) in the third quarter was 3.51 percent, the highest quarterly average since the third quarter of 2005. Almost two-thirds of all institutions (62.1 percent) reported higher NIMs than in the second quarter, but only 42.2 percent registered year-over-year NIM improvement. Realized losses on securities and other assets totaled $4.1 billion, which was $3.8 billion less than the $7.9 billion in losses the industry experienced a year earlier. Noninterest income was $4.0 billion (6.8 percent) higher, as net gains on loan sales were up by $2.7 billion and servicing fees rose by $1.9 billion (45.8 percent). Total noninterest expense was $1.6 billion (1.7 percent) below the level of a year earlier, the first time since the fourth quarter of 2006 that the industry has experienced a year-over-year decline in quarterly noninterest expense. Lower expenses for goodwill impairment and other intangible asset charges (down $1.2 billion, or 23.7 percent) were chiefly responsible for the decline in total noninterest expenses, but expenses for premises and fixed assets were lower as well, falling by $230 million (2.0 percent). Chart 1 Chart 2 Major Factors Affecting Earnings Quarterly Net Income $ Billions 60 3rd Quarter 2009 vs. 3rd Quarter 2008 ($ Billions) 16 Positive Factors 50 40 30 34.0 33.2 34.7 32.6 36.9 38.0 38.0 35.3 35.6 36.8 14 28.7 12 19.3 20 10 4.7 0.9 0.5 0 10 2.8 5.5 6 Securities and Other Gains/Losses, Net Net Operating Income -20 -30 -40 4 -37.6 1 2 3 2005 FDIC Quarterly 4 1 2 3 4 2006 1 2 3 4 2007 1 2 3 4 2008 1 $1.6 Decrease in Noninterest Expense $3.8 Decline in Realized Losses on Securities $4.0 Increase in Noninterest Income 8 -4.3 -10 2 2 3 2009 Negative Factor $14.0 $11.3 Increase in Loan-Loss Provisions $4.6 Increase in Net Interest Income 0 1 2009, Volume 3, No. 4 loans were $4.6 billion (117.5 percent) higher than a year ago. Charge-offs of credit card loans were $4.4 billion (78.2 percent) higher, residential mortgage charge-offs were up by $3.7 billion (63.4 percent), charge-offs of real estate construction and development (C&D) loans rose by $3.1 billion (68.1 percent), and charge-offs of home equity lines of credit were $2.2 billion (78.4 percent) higher. Loss Provisions Surpass $60 Billion for Fourth Quarter in a Row Provisions for loan and lease losses totaled $62.5 billion, marking the fourth consecutive quarter that industry provisions have exceeded $60 billion. The third quarter total was $11.3 billion (22.2 percent) higher than a year earlier, but it was $4.8 billion (7.1 percent) less than the amount that insured institutions set aside in the second quarter. It was also the smallest year-overyear increase in quarterly loss provisions in the past eight quarters. Almost two out of three institutions (62.6 percent) increased their loss provisions over yearearlier levels. Growth in Noncurrent Loans Slows The amount of loans that were noncurrent (90 days or more past due or in nonaccrual status) also continued to rise. Noncurrent loans and leases increased by $34.7 billion (10.5 percent) in the third quarter, to $366.6 billion, or 4.94 percent of all loans and leases, the highest noncurrent rate registered in the 26 years that insured institutions have reported noncurrent loan data. Noncurrent residential mortgage loans increased by $19.0 billion (13.9 percent), noncurrent C&I loans rose by $7.3 billion (19.2 percent), and noncurrent real estate loans secured by nonfarm nonresidential real estate properties increased by $5.7 billion (18.2 percent). The increase in noncurrent loans was the smallest in the past four quarters, as the rate of growth in noncurrent loans slowed for the second quarter in a row. Loan Losses Remain High Net charge-offs continued to rise, registering a yearover-year increase for an 11th consecutive quarter. Insured institutions charged off $50.8 billion (net) in the quarter, an increase of $22.6 billion (80.5 percent) compared to the third quarter of 2008. Net charge-offs were higher, year-over-year, at 60 percent of insured institutions. The annualized net charge-off rate rose to 2.71 percent, from 1.43 percent a year earlier and 2.56 percent in the second quarter. This is the highest annualized net charge-off rate in any quarter since insured institutions began reporting quarterly income and expenses in 1984, and it marks the third time in the past four quarters that the net charge-off rate has reached a new high. The year-over-year increase in charge-offs was led by loans to commercial and industrial (C&I) borrowers, but all major loan categories had sizable increases in charge-offs. Net charge-offs of C&I Reserve Coverage Continues to Erode In the face of the persistent rise in troubled loans, insured institutions continued to build their loan-loss reserves. The industry set aside $11.7 billion more in Chart 3 Chart 4 Quarterly Net Interest Margins, Annualized Percent 4.5 $ Billions 110 Assets < $1 Billion 90 4.0 3.70 50 3.48 30 3.0 10 Assets > $1 Billion 2.5 Quarterly Change in Noncurrent Loans Quarterly Net Charge-Offs 70 3.5 Quarterly Net Charge-Offs and Change in Noncurrent Loans 1 2 3 4 2005 FDIC Quarterly 1 2 3 4 2006 1 2 3 4 2007 1 2 3 4 2008 1 -10 2 3 2009 2 1 2 3 2006 4 1 2 3 2007 4 1 2 3 2008 4 1 2 3 2009 2009, Volume 3, No. 4 Quarterly Banking Profile loan-loss provisions than it charged off in the third quarter, contributing to a $9.2 billion (4.4 percent) increase in total reserves. This was the smallest quarterly increase in reserves in the past eight quarters, but it lifted the industry’s ratio of reserves to total loans and leases from 2.77 percent to 2.97 percent. However, growth in reserves continued to lag the rise in noncurrent loans, and the industry’s ratio of reserves to noncurrent loans declined for a 14th consecutive quarter, from 63.6 percent to 60.1 percent. Quarterly Decline in Loan Balances Is Largest on Record Total assets of insured institutions fell for a third consecutive quarter. The $54.3 billion (0.4 percent) decline followed a $237.9 billion decrease in industry assets in the second quarter and a $303.2 billion drop in the first quarter. The decline in assets was led by falling loan balances. Total loan and lease balances declined by $210.4 billion (2.8 percent) during the quarter. This is the largest percentage decline in loan balances in any quarter since insured institutions began reporting quarterly results in 1984. C&I loans fell by $89.1 billion (6.5 percent), residential mortgage loan balances declined by $83.7 billion (4.2 percent), and real estate C&D loans dropped by $43.6 billion (8.1 percent). The reduction in loan balances was partially offset by increased balances at Federal Reserve banks (up by $142.4 billion, or 36.7 percent) and by a $59.7 billion (2.6 percent) increase in securities. Banks increased their holdings of U.S. Treasury securities by $28.6 billion (49.3 percent) during the quarter. Much of the increase in other securities balances reflected higher market values for available-for-sale securities. Rising Securities Values Boost Equity Capital The industry’s total bank equity capital (excluding minority interests in consolidated subsidiaries) increased by $40.2 billion (2.9 percent) in the third quarter. Most of the increase was a result of appreciation in the values of securities and other investments. Accumulated other comprehensive income, which includes unrealized gains and losses on securities held for sale, increased by $30.5 billion during the quarter. Tier 1 leverage capital, which does not include other comprehensive income, increased by $15.6 billion (1.4 percent). The industry’s equity to assets ratio increased from 10.55 percent to 10.90 percent during the quarter. The average regulatory capital ratios for the industry (tier 1 leverage ratio, tier 1 risk-based capital ratio, and total risk-based capital ratio) all improved during the quarter as well, and are now at their highest levels in the 19 years since current risk-based capital standards were enacted. Reliance on Deposit Funding Increases Total deposits increased by $79.8 billion (0.9 percent), as insured institutions continued to reduce their reliance on nondeposit funding sources. Deposits in domestic offices fell by $2.0 billion, with non-interestbearing deposits registering a $17.7 billion (1.2 percent) Chart 5 Percent 14 Chart 6 Capital Ratios Percent 25 Total Risk-Based Capital 13 20 12 15 11 Tier 1 Risk-Based Capital 10 Twelve-Month Loan Growth Rates 10 5 Equity to Assets 0 9 Core Capital (Leverage) -5 8 -10 7 -15 6 1 2 3 4 2005 FDIC Quarterly 1 2 3 4 2006 1 2 3 4 2007 1 2 3 4 2008 1 Commercial Real Estate Residential Real Estate C&I Loans Consumer Loans -20 2 3 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 3 2009, Volume 3, No. 4 decline. Deposits in foreign offices increased by $81.9 billion (5.6 percent), following a $51.0 billion increase in the second quarter. Nondeposit liabilities declined by $176.1 billion (6.2 percent), including a $59 billion (9.3 percent) decline in Federal Home Loan Bank borrowings and an $86.6 billion (23.8 percent) decline in other short-term borrowings by Call reporters. At the end of September, deposits funded 68.7 percent of total industry assets, the highest proportion since June 30, 1997. absorbed by mergers during the quarter, while 50 institutions failed. This is the largest number of failures in a quarter since the fourth quarter of 1992, when 55 insured institutions failed. Only three insured institutions were chartered in the quarter, the smallest quarterly total since World War II. The number of insured institutions on the FDIC’s “Problem List” rose from 416 to 552 during the quarter, and total assets of “problem” institutions increased from $299.8 billion to $345.9 billion. Both the number and assets of “problem” institutions are now at the highest level since the end of 1993. Only Three New Charters Were Added in the Third Quarter Author: Ross Waldrop, Sr. Banking Analyst Division of Insurance and Research (202) 898-3951 The number of insured institutions reporting financial results fell to 8,099 in the third quarter, from 8,195 in the second quarter. Forty-seven institutions were Chart 7 Chart 8 Quarterly Change in Deposits and Nondeposit Liabilities Quarterly Change ($ Billions) 400 Deposits 150 171 1400 Nondeposit Liabilities 308 300 200 Number of FDIC-Insured “Problem” Institutions Institutions on the FDIC’s “Problem List” 1600 1200 155 162 1000 100 67 80 800 7 0 -100 -66 600 -23 -82 400 -200 -176 200 -300 -400 -320 -337 0 1991 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 FDIC Quarterly 4 1993 1995 1997 1999 2001 2003 2005 2007 2009 2009, Volume 3, No. 4 Quarterly Banking Profile TABLE I-A. Selected Indicators, All FDIC-Insured Institutions* Return on assets (%)������������������������������������������������������������������������������������������������������ Return on equity (%)������������������������������������������������������������������������������������������������������� Core capital (leverage) ratio (%)������������������������������������������������������������������������������������ Noncurrent assets plus other real estate owned to assets (%)������������������������������������ Net charge-offs to loans (%)������������������������������������������������������������������������������������������ Asset growth rate (%)����������������������������������������������������������������������������������������������������� Net interest margin (%)��������������������������������������������������������������������������������������������������� Net operating income growth (%)���������������������������������������������������������������������������������� Number of institutions reporting������������������������������������������������������������������������������������� Commercial banks��������������������������������������������������������������������������������������������������� Savings institutions������������������������������������������������������������������������������������������������� Percentage of unprofitable institutions (%)�������������������������������������������������������������������� Number of problem institutions�������������������������������������������������������������������������������������� Assets of problem institutions (in billions)��������������������������������������������������������������������� Number of failed institutions������������������������������������������������������������������������������������������ Number of assisted institutions�������������������������������������������������������������������������������������� 2009** 0.10 0.93 8.54 3.07 2.38 -2.40 3.46 -62.22 8,099 6,911 1,188 28.31 552 $346 95 0 2008** 0.32 3.26 7.81 1.55 1.18 6.82 3.33 -63.63 8,384 7,146 1,238 21.34 171 $116 13 0 2008 0.04 0.36 7.47 1.89 1.29 6.20 3.16 -90.50 8,305 7,086 1,219 24.79 252 $159 25 5 2007 0.81 7.75 7.97 0.95 0.59 9.89 3.29 -27.58 8,534 7,283 1,251 12.08 76 $22 3 0 2006 1.28 12.30 8.22 0.54 0.39 9.04 3.31 8.53 8,680 7,401 1,279 7.94 50 $8 0 0 2005 1.28 12.43 8.25 0.50 0.49 7.63 3.47 11.39 8,833 7,526 1,307 6.22 52 $7 0 0 2004 1.28 13.20 8.11 0.53 0.56 11.37 3.52 3.99 8,976 7,631 1,345 5.97 80 $28 4 0 * Excludes insured branches of foreign banks (IBAs) ** Through September 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending September 30. TABLE II-A. Aggregate Condition and Income Data, All FDIC-Insured Institutions 3rd Quarter 2009 8,099 2,069,405 2nd Quarter 2009 8,195 2,093,060 3nd Quarter 2008 8,384 2,170,931 %Change 08Q3-09Q3 -3.4 -4.7 $13,247,285 4,526,678 1,928,497 1,089,930 492,213 667,459 1,275,647 1,040,183 392,974 60,014 515,034 2,613 7,414,944 220,268 7,194,676 2,396,639 37,165 425,113 3,193,693 $13,301,549 4,651,631 2,012,172 1,086,490 535,779 672,908 1,364,766 1,037,132 398,233 58,348 516,329 2,903 7,625,303 211,073 7,414,230 2,336,976 33,945 431,398 3,085,001 $13,572,987 4,749,530 2,101,972 1,043,580 614,730 652,106 1,502,746 1,082,714 411,627 59,612 597,963 2,792 7,989,773 156,445 7,833,328 2,025,434 22,460 484,147 3,207,618 -2.4 -4.7 -8.3 4.4 -19.9 2.4 -15.1 -3.9 -4.5 0.7 -13.9 -6.4 -7.2 40.8 -8.2 18.3 65.5 -12.2 -0.4 Total liabilities and capital���������������������������������������������������������������������������������������������� Deposits������������������������������������������������������������������������������������������������������������������� Domestic office deposits��������������������������������������������������������������������������������� Foreign office deposits������������������������������������������������������������������������������������ Other borrowed funds��������������������������������������������������������������������������������������������� Subordinated debt��������������������������������������������������������������������������������������������������� All other liabilities���������������������������������������������������������������������������������������������������� Equity capital����������������������������������������������������������������������������������������������������������� 13,247,285 9,100,946 7,553,140 1,547,805 1,997,419 161,256 524,050 1,463,614 13,301,549 9,021,120 7,555,189 1,465,932 2,162,868 168,125 527,796 1,421,639 13,572,987 8,727,755 7,222,233 1,505,522 2,732,578 176,833 629,555 1,306,266 -2.4 4.3 4.6 2.8 -26.9 -8.8 -16.8 12.0 Loans and leases 30-89 days past due������������������������������������������������������������������������� Noncurrent loans and leases����������������������������������������������������������������������������������������� Restructured loans and leases�������������������������������������������������������������������������������������� Mortgage-backed securities������������������������������������������������������������������������������������������ Earning assets���������������������������������������������������������������������������������������������������������������� FHLB Advances�������������������������������������������������������������������������������������������������������������� Unused loan commitments��������������������������������������������������������������������������������������������� Trust assets�������������������������������������������������������������������������������������������������������������������� Assets securitized and sold������������������������������������������������������������������������������������������� Notional amount of derivatives***���������������������������������������������������������������������������������� 142,698 366,621 50,788 1,350,429 11,407,203 575,624 6,125,546 20,252,884 1,857,417 206,393,244 141,100 331,880 46,412 1,365,640 11,461,540 634,615 6,307,959 17,502,516 1,865,353 204,956,766 121,609 187,355 21,335 1,261,315 11,492,836 911,487 7,852,407 19,739,794 1,892,416 177,121,812 17.3 95.7 138.0 7.1 -0.7 -36.8 -22.0 2.6 -1.8 16.5 (dollar figures in millions) Number of institutions reporting������������������������������������������������������������������������������������� Total employees (full-time equivalent)��������������������������������������������������������������������������� CONDITION DATA Total assets��������������������������������������������������������������������������������������������������������������������� Loans secured by real estate���������������������������������������������������������������������������������� 1-4 family residential mortgages��������������������������������������������������������������������� Nonfarm nonresidential����������������������������������������������������������������������������������� Construction and development Home equity lines��������������������������������������������������������������������������������������������� Commercial & industrial loans�������������������������������������������������������������������������������� Loans to individuals������������������������������������������������������������������������������������������������� Credit cards������������������������������������������������������������������������������������������������������ Farm loans��������������������������������������������������������������������������������������������������������������� Other loans & leases����������������������������������������������������������������������������������������������� Less: Unearned income������������������������������������������������������������������������������������������ Total loans & leases������������������������������������������������������������������������������������������������ Less: Reserve for losses����������������������������������������������������������������������������������������� Net loans and leases����������������������������������������������������������������������������������������������� Securities����������������������������������������������������������������������������������������������������������������� Other real estate owned������������������������������������������������������������������������������������������ Goodwill and other intangibles������������������������������������������������������������������������������� All other assets�������������������������������������������������������������������������������������������������������� INCOME DATA Total interest income������������������������������������������������������������������� Total interest expense����������������������������������������������������������������� Net interest income�������������������������������������������������������������� Provision for loan and lease losses�������������������������������������������� Total noninterest income������������������������������������������������������������� Total noninterest expense����������������������������������������������������������� Securities gains (losses)������������������������������������������������������������� Applicable income taxes������������������������������������������������������������� Extraordinary gains, net�������������������������������������������������������������� Net income���������������������������������������������������������������������������� Net charge-offs���������������������������������������������������������������������������� Cash dividends���������������������������������������������������������������������������� Retained earnings����������������������������������������������������������������������� Net operating income����������������������������������������������������������� First Three Qtrs 2009 $413,593 115,309 298,284 188,577 198,396 287,787 -1,551 4,884 -3,626 9,590 135,868 33,458 -23,868 13,867 First Three Qtrs 2008 $487,007 207,939 279,068 125,190 175,549 274,342 -8,325 15,733 657 31,685 68,840 42,613 -10,928 36,706 *** Call Report filers only. FDIC Quarterly %Change -15.1 -44.6 6.9 50.6 13.0 4.9 N/M -69.0 N/M -69.7 97.4 -21.5 N/M -62.2 3rd Quarter 2009 $134,728 34,809 99,919 62,511 62,211 92,362 -4,084 115 31 2,833 50,779 20,093 -17,260 5,136 3rd Quarter 2008 $159,079 63,776 95,303 51,166 58,250 93,935 -7,881 790 1,098 879 28,135 10,988 -10,109 5,421 %Change 08Q3-09Q3 -15.3 -45.4 4.8 22.2 6.8 -1.7 N/M -85.5 -97.2 222.4 80.5 82.9 N/M -5.3 N/M - Not Meaningful. 5 2009, Volume 3, No. 4 TABLE III-A. Third Quarter 2009, All FDIC-Insured Institutions Asset Concentration Groups* Third quarter All Insured (The way it is...) Institutions Number of institutions reporting����������������������� 8,099 Commercial banks������������������������������������� 6,911 Savings institutions����������������������������������� 1,188 Total assets (in billions)������������������������������������ $13,247.3 Commercial banks������������������������������������� 11,866.4 Savings institutions����������������������������������� 1,380.9 Total deposits (in billions)��������������������������������� 9,100.9 Commercial banks������������������������������������� 8,178.2 Savings institutions����������������������������������� 922.7 Net income (in millions)������������������������������������ 2,833 Commercial banks������������������������������������� 1,457 Savings institutions����������������������������������� 1,377 Performance Ratios (annualized, %) Yield on earning assets������������������������������������ Cost of funding earning assets������������������������ Net interest margin������������������������������������ Noninterest income to assets��������������������������� Noninterest expense to assets������������������������� Loan and lease loss provision to assets���������� Net operating income to assets����������������������� Pretax return on assets������������������������������������ Return on assets����������������������������������������������� Return on equity����������������������������������������������� Net charge-offs to loans and leases���������������� Loan and lease loss provision to net charge-offs������������������������������������������ Efficiency ratio�������������������������������������������������� % of unprofitable institutions���������������������������� % of institutions with earnings gains���������������� Credit Card International Agricultural Commercial Banks Banks Banks Lenders 24 4 1,578 4,541 20 4 1,572 4,059 4 0 6 482 $500.5 $3,183.4 $177.5 $5,184.8 478.8 3,183.4 176.7 4,693.0 21.7 0.0 0.7 491.8 266.8 1,978.9 142.8 3,852.7 255.4 1,978.9 142.2 3,515.3 11.3 0.0 0.6 337.4 416 -310 419 -3,318 185 -310 417 -4,038 232 0 2 721 Mortgage Consumer Lenders Lenders 796 81 212 64 584 17 $852.3 $95.8 178.2 52.4 674.1 43.4 509.7 78.8 66.0 40.9 443.7 37.9 583 48 738 88 -156 -41 Other Specialized All Other <$1 Billion <$1 Billion 284 732 256 679 28 53 $37.8 $102.7 33.8 89.3 4.1 13.4 28.1 84.3 25.5 73.8 2.7 10.5 96 189 43 207 52 -18 All Other >$1 Billion 59 45 14 $3,112.5 2,980.8 131.7 2,158.9 2,080.2 78.7 4,711 4,126 585 4.73 1.22 3.51 1.88 2.79 1.89 0.16 0.09 0.09 0.80 2.71 11.50 1.39 10.11 5.44 5.63 7.55 0.33 0.43 0.34 1.36 10.67 3.76 0.88 2.88 1.97 2.65 1.36 0.33 -0.21 -0.04 -0.46 3.18 5.68 1.67 4.01 0.68 2.74 0.53 0.94 1.11 0.95 8.48 0.59 5.00 1.43 3.57 1.43 2.85 1.95 -0.25 -0.24 -0.26 -2.37 2.12 4.92 1.70 3.22 0.84 1.88 1.18 0.32 0.65 0.27 2.94 1.59 5.68 1.56 4.12 1.75 2.66 2.68 0.20 0.27 0.20 1.90 2.64 3.78 1.09 2.70 8.22 8.72 0.21 1.16 1.49 1.01 5.86 0.79 5.41 1.62 3.80 0.85 3.00 0.41 0.77 0.89 0.74 6.32 0.57 4.04 0.97 3.07 2.28 2.56 1.75 0.50 0.63 0.60 5.45 2.63 123.10 101.20 117.03 133.23 132.44 113.95 129.25 110.55 127.00 132.23 54.63 26.55 43.25 38.21 33.33 50.00 59.58 50.00 0.00 62.14 10.65 43.09 58.04 35.96 41.36 48.32 20.10 55.90 46.82 18.52 46.91 82.10 20.07 35.92 68.90 12.70 43.44 52.11 23.73 50.85 Structural Changes New charters��������������������������������������������� Institutions absorbed by mergers������������� Failed institutions�������������������������������������� 3 47 50 0 1 0 0 0 0 0 9 0 1 34 45 0 0 3 0 0 0 2 0 0 0 1 2 0 2 0 PRIOR Third quarterS (The way it was...) Return on assets (%)������������������������������� 2008 ������������������������������������� 2006 ������������������������������������� 2004 0.03 1.31 1.33 0.36 4.09 4.10 0.49 0.92 0.86 1.01 1.30 1.33 -0.13 1.32 1.34 -1.34 1.06 1.15 0.94 1.60 1.16 0.12 2.12 1.53 0.61 1.07 1.18 0.27 1.35 1.34 Net charge-offs to loans & leases (%)���� 2008 ������������������������������������� 2006 ������������������������������������� 2004 1.43 0.40 0.51 6.24 3.86 4.24 1.44 0.64 0.89 0.43 0.15 0.20 1.23 0.19 0.28 1.02 0.18 0.10 2.04 1.21 1.10 0.43 0.12 0.27 0.38 0.17 0.26 1.11 0.23 0.26 * See Table IV-A (page 8) for explanations. FDIC Quarterly 6 2009, Volume 3, No. 4 Quarterly Banking Profile TABLE III-A. Third Quarter 2009, All FDIC-Insured Institutions Asset Size Distribution Third Quarter All Insured (The way it is...) Institutions Number of institutions reporting����������������������������� 8,099 Commercial banks������������������������������������������� 6,911 Savings institutions����������������������������������������� 1,188 Total assets (in billions)������������������������������������������ $13,247.3 Commercial banks������������������������������������������� 11,866.4 Savings institutions����������������������������������������� 1,380.9 Total deposits (in billions)��������������������������������������� 9,100.9 Commercial banks������������������������������������������� 8,178.2 Savings institutions����������������������������������������� 922.7 Net income (in millions)������������������������������������������ 2,833 Commercial banks������������������������������������������� 1,457 Savings institutions����������������������������������������� 1,377 Geographic Regions* Less than $100 $1 Billion Greater $100 Million to to than Million $1 Billion $10 Billion $10 Billion New York 2,912 4,496 579 112 989 2,588 3,798 440 85 519 324 698 139 27 470 $160.3 $1,346.1 $1,497.9 $10,243.0 $2,501.5 142.9 1,104.2 1,158.9 9,460.3 1,785.7 17.3 241.9 339.0 782.7 715.8 132.4 1,090.3 1,116.7 6,761.5 1,642.9 119.0 904.3 863.5 6,291.4 1,144.4 13.4 186.0 253.2 470.1 498.5 72 -131 -1,761 4,654 354 30 13 -1,508 2,921 -1,214 42 -145 -253 1,733 1,568 Atlanta 1,140 1,005 135 $3,450.5 3,317.6 132.8 2,467.4 2,368.7 98.7 -1,130 -921 -209 Chicago 1,666 1,371 295 $3,106.1 2,963.1 143.0 2,039.1 1,934.3 104.8 1,905 2,645 -740 Kansas City 1,895 1,795 100 $1,077.8 1,028.7 49.1 825.4 788.7 36.7 2,318 2,372 -54 San Dallas Francisco 1,672 737 1,551 670 121 67 $755.6 $2,355.9 646.1 2,125.2 109.5 230.7 572.3 1,553.8 501.9 1,440.2 70.4 113.6 1,029 -1,643 949 -2,374 81 731 Performance Ratios (annualized, %) Yield on earning assets������������������������������������������ Cost of funding earning assets������������������������������ Net interest margin������������������������������������������ Noninterest income to assets��������������������������������� Noninterest expense to assets������������������������������� Loan and lease loss provision to assets���������������� Net operating income to assets����������������������������� Pretax return on assets������������������������������������������ Return on assets����������������������������������������������������� Return on equity����������������������������������������������������� Net charge-offs to loans and leases���������������������� Loan and lease loss provision to net charge-offs� Efficiency ratio�������������������������������������������������������� % of unprofitable institutions���������������������������������� % of institutions with earnings gains���������������������� 4.73 1.22 3.51 1.88 2.79 1.89 0.16 0.09 0.09 0.80 2.71 123.10 54.63 26.55 43.25 5.61 1.70 3.91 1.31 3.82 0.69 0.16 0.39 0.18 1.45 0.83 132.49 77.72 25.65 43.58 5.51 1.83 3.67 0.98 3.22 1.13 -0.04 0.01 -0.04 -0.39 1.23 133.21 72.54 25.69 43.46 5.17 1.71 3.46 1.59 3.01 1.98 -0.40 -0.38 -0.47 -4.41 2.13 137.42 60.04 35.06 41.45 4.53 1.05 3.48 2.05 2.69 1.99 0.26 0.16 0.18 1.68 3.10 120.57 51.50 40.18 35.71 5.14 1.41 3.73 1.80 2.61 1.74 0.61 -0.23 0.06 0.45 3.07 105.73 50.09 22.95 54.70 4.49 1.16 3.32 1.65 2.59 2.18 -0.23 -0.23 -0.13 -1.14 2.69 135.92 55.43 48.77 34.56 4.12 1.09 3.03 2.18 2.79 1.63 0.22 0.40 0.24 2.83 2.58 124.14 56.42 24.25 40.88 5.55 1.06 4.49 3.01 3.95 1.88 0.77 1.30 0.87 8.01 2.52 111.77 55.49 17.99 42.80 5.11 1.35 3.75 1.63 3.19 1.21 0.46 0.71 0.54 5.31 1.40 132.09 62.58 15.91 47.19 4.95 1.31 3.63 1.47 2.62 2.18 -0.21 -0.27 -0.28 -2.64 3.13 125.28 52.82 48.30 38.94 Structural Changes New charters��������������������������������������������������� Institutions absorbed by mergers������������������� Failed institutions�������������������������������������������� 3 47 50 2 24 11 1 16 29 0 4 8 0 3 2 2 6 4 0 9 15 0 8 13 0 14 5 1 4 3 0 6 10 PRIOR Third quarters (The way it was…) Return on assets (%)������������������������������������� 2008 ������������������������������������������� 2006 ������������������������������������������� 2004 0.03 1.31 1.33 0.27 1.02 1.08 -0.02 1.23 1.22 -0.60 1.27 1.47 0.12 1.33 1.33 0.01 1.12 1.13 0.22 1.37 1.46 0.10 1.01 1.21 0.50 1.79 1.49 0.18 1.22 1.46 -0.59 1.82 1.67 Net charge-offs to loans & leases (%)���������� 2008 ������������������������������������������� 2006 ������������������������������������������� 2004 1.43 0.40 0.51 0.44 0.16 0.25 0.71 0.14 0.22 1.10 0.20 0.34 1.63 0.49 0.60 1.49 0.63 0.73 1.28 0.18 0.26 1.36 0.27 0.43 1.61 0.46 0.61 0.85 0.23 0.30 1.80 0.62 0.54 * See Table IV-A (page 9) for explanations. FDIC Quarterly 7 2009, Volume 3, No. 4 TABLE IV-A. First Three Quarters 2009, All FDIC-Insured Institutions Asset Concentration Groups* First Three Quarters All Insured (The way it is...) Institutions Number of institutions reporting����������������������������������������� 8,099 Commercial banks������������������������������������������������������� 6,911 Savings institutions����������������������������������������������������� 1,188 Total assets (in billions)������������������������������������������������������ $13,247.3 Commercial banks������������������������������������������������������� 11,866.4 Savings institutions����������������������������������������������������� 1,380.9 Total deposits (in billions)��������������������������������������������������� 9,100.9 Commercial banks������������������������������������������������������� 8,178.2 Savings institutions����������������������������������������������������� 922.7 Net income (in millions)������������������������������������������������������ 9,590 Commercial banks������������������������������������������������������� 8,064 Savings institutions����������������������������������������������������� 1,526 Performance Ratios (annualized, %) Yield on earning assets������������������������������������������������������ Cost of funding earning assets������������������������������������������ Net interest margin������������������������������������������������������ Noninterest income to assets��������������������������������������������� Noninterest expense to assets������������������������������������������� Loan and lease loss provision to assets���������������������������� Net operating income to assets����������������������������������������� Pretax return on assets������������������������������������������������������ Return on assets����������������������������������������������������������������� Return on equity����������������������������������������������������������������� Net charge-offs to loans and leases���������������������������������� Loan and lease loss provision to net charge-offs������������� Efficiency ratio�������������������������������������������������������������������� % of unprofitable institutions���������������������������������������������� % of institutions with earnings gains���������������������������������� Credit Other Card International Agricultural Commercial Mortgage Consumer Specialized All Other All Other Banks Banks Banks Lenders Lenders Lenders <$1 Billion <$1 Billion >$1 Billion 24 4 1,578 4,541 796 81 284 732 59 20 4 1,572 4,059 212 64 256 679 45 4 0 6 482 584 17 28 53 14 $500.5 $3,183.4 $177.5 $5,184.8 $852.3 $95.8 $37.8 $102.7 $3,112.5 478.8 3,183.4 176.7 4,693.0 178.2 52.4 33.8 89.3 2,980.8 21.7 0.0 0.7 491.8 674.1 43.4 4.1 13.4 131.7 266.8 1,978.9 142.8 3,852.7 509.7 78.8 28.1 84.3 2,158.9 255.4 1,978.9 142.2 3,515.3 66.0 40.9 25.5 73.8 2,080.2 11.3 0.0 0.6 337.4 443.7 37.9 2.7 10.5 78.7 -2,122 100 1,198 -7,918 3,003 145 181 602 14,401 -2,789 100 1,195 -7,204 2,194 113 37 618 13,800 667 0 3 -714 808 33 144 -16 601 4.80 1.34 3.46 1.97 2.86 1.87 0.14 0.14 0.10 0.93 2.38 138.79 54.96 28.31 37.54 11.61 1.39 10.23 5.39 5.77 8.94 -0.68 -0.93 -0.58 -2.45 9.93 125.23 39.16 37.50 25.00 3.93 0.99 2.94 2.00 2.61 1.55 0.27 -0.06 0.00 0.05 2.90 142.61 57.91 75.00 0.00 5.70 1.79 3.92 0.66 2.74 0.48 0.89 1.07 0.91 8.20 0.51 141.22 63.49 10.46 39.48 5.03 1.56 3.48 1.49 3.05 1.71 -0.21 -0.21 -0.20 -1.92 1.77 139.38 61.09 39.11 32.92 5.10 1.88 3.22 0.79 1.83 1.12 0.45 0.84 0.47 5.35 1.26 134.84 47.79 21.23 57.29 5.81 1.68 4.13 2.14 2.81 2.76 0.21 0.46 0.22 2.13 2.64 132.47 46.12 18.52 41.98 3.99 1.19 2.79 7.95 8.96 0.18 0.73 1.15 0.64 3.70 0.80 88.56 81.97 16.55 35.21 5.48 1.71 3.77 0.85 2.99 0.35 0.79 0.97 0.80 6.88 0.46 134.52 69.08 12.70 41.39 4.06 1.09 2.97 2.55 2.57 1.70 0.55 0.80 0.59 5.78 2.31 148.18 50.21 27.12 38.98 86.11 80.92 84.29 91.90 88.02 93.25 93.47 88.55 91.83 82.89 2.97 60.08 9.23 299.84 4.11 59.07 1.43 75.41 2.36 51.27 1.46 34.40 2.97 190.18 1.43 89.10 1.33 73.39 2.88 53.13 3.07 10.90 8.54 11.49 14.17 79.05 54.31 57.02 2.09 25.25 19.03 13.60 15.64 115.67 61.65 45.10 2.63 8.45 6.92 11.40 14.66 54.91 34.13 29.72 1.59 11.32 10.09 13.65 14.76 81.37 65.47 80.46 3.70 10.98 8.63 10.58 13.07 90.61 67.33 71.68 3.10 9.31 8.60 17.08 18.02 105.76 63.25 59.72 1.29 10.87 10.38 13.72 15.53 93.69 77.07 80.87 0.60 17.57 15.82 35.00 35.75 32.50 24.17 73.97 1.35 11.85 11.05 18.12 19.30 67.82 55.62 82.00 2.85 11.26 8.11 11.00 14.23 70.10 48.62 58.58 Structural Changes New charters��������������������������������������������������������������� Institutions absorbed by mergers������������������������������� Failed institutions�������������������������������������������������������� 28 136 95 0 1 0 0 0 0 1 15 3 6 109 83 1 2 5 0 0 0 17 1 0 1 5 4 2 3 0 PRIOR First Three Quarters (The way it was…) Number of institutions������������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 8,384 8,743 9,024 26 29 35 4 4 6 1,588 1,691 1,783 4,810 4,710 4,385 827 845 1,000 100 125 136 298 398 458 691 886 1,138 40 55 83 Total assets (in billions)����������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 $13,573.0 11,754.2 9,877.2 $467.9 382.0 367.9 $3,263.3 2,128.5 1,565.9 $168.1 151.5 137.7 $6,077.9 4,673.1 3,195.3 $1,060.5 1,790.4 1,405.2 $71.0 107.1 211.7 $36.0 42.3 54.1 $93.8 117.4 147.6 $2,334.5 2,361.8 2,791.9 Return on assets (%)��������������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 0.32 1.33 1.29 2.42 4.42 3.90 0.31 1.03 0.89 1.12 1.29 1.28 0.23 1.32 1.33 -0.35 1.07 1.20 1.01 1.69 0.82 1.56 1.33 1.47 0.88 1.07 1.14 0.36 1.31 1.23 Net charge-offs to loans & leases (%)�����������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 1.18 0.36 0.55 5.64 3.38 4.69 1.28 0.59 1.05 0.29 0.14 0.17 0.98 0.18 0.29 0.74 0.14 0.11 1.84 1.00 0.94 0.43 0.53 0.46 0.30 0.17 0.26 0.88 0.20 0.25 Noncurrent plus OREO to assets (%)������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 1.55 0.50 0.57 1.73 1.35 1.30 1.17 0.40 0.69 1.15 0.67 0.77 1.92 0.52 0.55 2.30 0.52 0.59 0.80 0.65 0.63 0.28 0.20 0.30 0.92 0.52 0.63 0.85 0.37 0.40 Equity capital ratio (%)�����������������������������������������������2008 ��������������������������������������������������������2006 ��������������������������������������������������������2004 9.62 10.41 10.13 20.85 27.18 20.78 7.13 7.82 7.27 11.07 10.94 10.87 10.66 10.39 10.40 7.95 10.54 8.74 9.14 9.76 13.62 19.61 22.46 16.95 11.25 11.11 10.93 8.61 9.73 10.25 Condition Ratios (%) Earning assets to total assets�������������������������������������������� Loss Allowance to: Loans and leases�������������������������������������������������������� Noncurrent loans and leases�������������������������������������� Noncurrent assets plus other real estate owned to assets������������������������������� Equity capital ratio�������������������������������������������������������������� Core capital (leverage) ratio����������������������������������������������� Tier 1 risk-based capital ratio��������������������������������������������� Total risk-based capital ratio���������������������������������������������� Net loans and leases to deposits��������������������������������������� Net loans to total assets����������������������������������������������������� Domestic deposits to total assets�������������������������������������� * Asset Concentration Group Definitions (Groups are hierarchical and mutually exclusive): Credit-card Banks - Institutions whose credit-card loans plus securitized receivables exceed 50 percent of total assets plus securitized receivables. International Banks - Banks with assets greater than $10 billion and more than 25 percent of total assets in foreign offices. Agricultural Banks - Banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of their total loans and leases. Commercial Lenders - Institutions whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties exceed 25 percent of total assets. Mortgage Lenders - Institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets. Consumer Lenders - Institutions whose residential mortgage loans, plus credit-card loans, plus other loans to individuals, exceed 50 percent of total assets. Other Specialized < $1 Billion - Institutions with assets less than $1 billion, whose loans and leases are less than 40 percent of total assets. All Other < $1 billion - Institutions with assets less than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. All Other > $1 billion - Institutions with assets greater than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations. FDIC Quarterly 8 2009, Volume 3, No. 4 Quarterly Banking Profile TABLE IV-A. First Three Quarters 2009, All FDIC-Insured Institutions Asset Size Distribution First Three Quarters All Insured Less than (The way it is...) Institutions $100 Million Number of institutions reporting��������������������� 8,099 2,912 Commercial banks����������������������������������� 6,911 2,588 Savings institutions��������������������������������� 1,188 324 Total assets (in billions)���������������������������������� $13,247.3 $160.3 Commercial banks����������������������������������� 11,866.4 142.9 Savings institutions��������������������������������� 1,380.9 17.3 Total deposits (in billions)������������������������������� 9,100.9 132.4 Commercial banks����������������������������������� 8,178.2 119.0 Savings institutions��������������������������������� 922.7 13.4 Net income (in millions)���������������������������������� 9,590 255 Commercial banks����������������������������������� 8,064 166 Savings institutions��������������������������������� 1,526 89 Performance Ratios (annualized, %) Yield on earning assets���������������������������������� Cost of funding earning assets���������������������� Net interest margin���������������������������������� Noninterest income to assets������������������������� Noninterest expense to assets����������������������� Loan and lease loss provision to assets�������� Net operating income to assets��������������������� Pretax return on assets���������������������������������� Return on assets��������������������������������������������� Return on equity��������������������������������������������� Net charge-offs to loans and leases�������������� Loan and lease loss provision to net charge-offs���������������������������������������������� Efficiency ratio������������������������������������������������ % of unprofitable institutions�������������������������� % of institutions with earnings gains�������������� Geographic Regions* $100 Million $1 Billion Greater to to than $1 Billion $10 Billion $10 Billion New York 4,496 579 112 989 3,798 440 85 519 698 139 27 470 $1,346.1 $1,497.9 $10,243.0 $2,501.5 1,104.2 1,158.9 9,460.3 1,785.7 241.9 339.0 782.7 715.8 1,090.3 1,116.7 6,761.5 1,642.9 904.3 863.5 6,291.4 1,144.4 186.0 253.2 470.1 498.5 781 -3,863 12,418 -2,631 945 -3,145 10,098 -3,862 -165 -718 2,320 1,231 Atlanta Chicago 1,140 1,666 1,005 1,371 135 295 $3,450.5 $3,106.1 3,317.6 2,963.1 132.8 143.0 2,467.4 2,039.1 2,368.7 1,934.3 98.7 104.8 2,629 5,313 3,303 6,443 -674 -1,129 Kansas City 1,895 1,795 100 $1,077.8 1,028.7 49.1 825.4 788.7 36.7 5,889 5,914 -25 San Dallas Francisco 1,672 737 1,551 670 121 67 $755.6 $2,355.9 646.1 2,125.2 109.5 230.7 572.3 1,553.8 501.9 1,440.2 70.4 113.6 2,166 -3,777 1,718 -5,451 447 1,674 4.80 1.34 3.46 1.97 2.86 1.87 0.14 0.14 0.10 0.93 2.38 5.65 1.81 3.84 1.30 3.85 0.61 0.20 0.36 0.22 1.72 0.76 5.57 1.97 3.61 0.98 3.22 0.96 0.06 0.13 0.08 0.78 1.00 5.25 1.84 3.42 1.41 3.10 1.70 -0.34 -0.31 -0.35 -3.26 1.82 4.61 1.17 3.44 2.19 2.77 2.03 0.21 0.21 0.16 1.55 2.74 5.21 1.52 3.69 1.87 2.76 1.93 0.27 -0.20 -0.14 -1.14 2.73 4.45 1.29 3.16 1.92 2.62 1.90 0.01 0.15 0.10 0.92 2.18 4.24 1.19 3.05 2.20 2.94 1.59 0.17 0.36 0.22 2.65 2.15 5.60 1.14 4.46 3.13 3.96 1.92 0.76 1.13 0.74 7.19 2.40 5.13 1.48 3.65 1.54 3.33 1.08 0.32 0.51 0.38 3.78 1.18 5.17 1.47 3.70 1.47 2.57 2.41 -0.19 -0.35 -0.22 -2.14 3.09 138.79 128.49 138.48 136.93 139.09 132.12 148.11 144.30 120.08 138.96 137.32 54.96 28.31 37.54 78.89 26.10 40.01 73.63 28.43 37.08 63.78 36.27 30.74 51.52 40.18 26.79 52.38 27.30 49.75 54.12 53.07 25.96 57.16 23.77 38.18 54.81 18.26 36.68 64.68 17.11 42.28 52.91 52.92 29.04 86.11 91.51 91.78 90.64 84.62 85.53 83.23 86.98 88.28 90.38 87.42 2.97 60.08 1.53 62.97 1.65 48.10 2.14 49.58 3.38 62.95 3.08 90.71 2.82 52.85 3.13 54.83 2.66 58.36 1.88 57.53 3.49 59.94 3.07 10.90 8.54 11.49 14.17 79.05 54.31 57.02 2.12 12.44 11.91 17.67 18.75 75.20 62.13 82.61 3.14 10.13 9.52 13.11 14.31 83.68 67.78 80.95 3.50 10.77 9.27 12.52 13.87 88.03 65.63 73.99 3.02 11.00 8.25 11.04 14.13 76.90 50.76 50.99 1.89 12.98 9.80 12.85 14.97 77.47 50.88 56.80 3.51 11.59 7.93 10.35 13.68 80.60 57.64 63.01 3.18 8.69 7.17 9.87 13.13 74.09 48.64 51.65 3.45 10.85 9.12 10.41 12.75 84.51 64.72 71.28 2.66 10.43 9.34 12.44 14.19 84.61 64.09 74.94 3.50 10.78 9.43 14.53 16.46 79.83 52.65 43.26 Structural Changes New charters������������������������������������������� Institutions absorbed by mergers����������� Failed institutions������������������������������������ 28 136 95 24 58 15 1 62 64 1 11 13 2 5 3 3 24 6 10 21 29 5 27 20 0 34 10 6 21 5 4 9 25 PRIOR First Three Quarters (The way it was…) Number of institutions��������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 8,384 8,743 9,024 3,240 3,731 4,204 4,470 4,369 4,223 560 523 480 114 120 117 1,027 1,097 1,136 1,197 1,232 1,223 1,721 1,848 1,968 1,943 2,027 2,104 1,719 1,767 1,840 777 772 753 Total assets (in billions)������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 $13,573.0 11,754.2 9,877.2 $174.9 194.2 217.7 $1,338.2 1,283.5 1,177.3 $1,474.7 1,422.5 1,326.4 $10,585.2 8,854.0 7,155.9 $2,689.5 2,963.5 3,403.0 $3,427.5 2,928.6 2,104.7 $3,324.7 2,736.1 1,745.7 $1,009.2 814.5 763.1 $770.8 644.3 588.8 $2,351.4 1,667.3 1,271.9 Return on assets (%)����������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 0.32 1.33 1.29 0.47 1.01 1.02 0.44 1.20 1.19 0.18 1.30 1.48 0.33 1.36 1.28 0.59 1.24 1.14 0.30 1.34 1.40 0.31 1.07 1.13 0.93 1.68 1.51 0.56 1.27 1.35 -0.22 1.77 1.61 Net charge-offs to loans & leases (%)�� 2008 ����������������������������������� 2006 ����������������������������������� 2004 1.18 0.36 0.55 0.31 0.14 0.22 0.49 0.14 0.23 0.88 0.19 0.35 1.37 0.43 0.66 1.31 0.56 0.81 0.98 0.16 0.31 1.15 0.24 0.36 1.36 0.39 0.75 0.65 0.20 0.26 1.49 0.56 0.60 Noncurrent plus OREO to assets (%)��� 2008 ����������������������������������� 2006 ����������������������������������� 2004 1.55 0.50 0.57 1.40 0.72 0.82 1.82 0.57 0.61 2.03 0.46 0.53 1.46 0.49 0.56 0.98 0.44 0.56 1.67 0.31 0.39 1.56 0.54 0.68 1.90 0.89 0.61 1.63 0.62 0.65 1.85 0.63 0.66 Equity capital ratio (%)�������������������������� 2008 ����������������������������������� 2006 ����������������������������������� 2004 9.62 10.41 10.13 13.14 13.04 11.94 10.18 10.46 10.20 10.87 11.00 10.83 9.32 10.25 9.94 10.92 11.13 10.16 10.14 9.76 8.45 8.56 9.03 10.47 9.66 11.18 10.52 9.87 10.36 10.17 8.79 12.20 12.14 Condition Ratios (%) Earning assets to total assets������������������������ Loss Allowance to: Loans and leases������������������������������������ Noncurrent loans and leases������������������ Noncurrent assets plus other real estate owned to assets����������� Equity capital ratio������������������������������������������ Core capital (leverage) ratio��������������������������� Tier 1 risk-based capital ratio������������������������� Total risk-based capital ratio�������������������������� Net loans and leases to deposits������������������� Net loans to total assets��������������������������������� Domestic deposits to total assets������������������ * Regions: New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, U.S. Virgin Islands Atlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia Chicago - Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin Kansas City - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota Dallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, Texas San Francisco - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming FDIC Quarterly 9 2009, Volume 3, No. 4 TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Concentration Groups* September 30, 2009 All Insured Institutions Credit Card Banks International Agricultural Commercial Mortgage Banks Banks Lenders Lenders Consumer Lenders Other All Other All Other Specialized <$1 >$1 <$1 Billion Billion Billion Percent of Loans 30-89 Days Past Due All loans secured by real estate��������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 2.23 2.88 1.21 1.13 1.35 3.15 0.95 2.57 3.08 2.26 0.52 1.92 1.70 4.66 0.00 0.00 1.84 1.72 4.67 3.29 3.18 4.09 0.01 3.05 3.46 3.60 0.79 0.62 1.93 5.25 0.43 2.27 3.46 1.83 0.38 2.24 1.14 2.14 1.10 0.94 0.60 1.74 1.48 2.11 3.99 2.02 0.74 1.15 1.95 2.97 1.28 1.44 0.90 2.71 1.08 2.10 2.33 2.06 0.68 1.73 2.26 4.23 1.27 1.14 1.50 2.37 1.11 1.90 3.30 1.47 0.43 2.22 1.35 3.39 1.81 0.45 1.05 1.55 1.39 2.06 1.39 2.27 0.35 1.80 1.74 1.82 1.37 2.18 0.58 2.18 1.19 1.47 2.72 1.43 0.87 1.57 1.86 2.59 1.34 1.04 0.94 2.16 1.72 2.33 1.95 2.35 0.68 1.81 2.30 2.09 0.90 0.27 1.51 3.38 0.63 2.73 3.20 2.60 0.55 1.87 Percent of Loans Noncurrent** All real estate loans���������������������������������������������������������� Construction and development.................................. Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 6.41 15.00 3.40 3.58 1.76 8.06 3.56 2.08 3.29 1.34 1.64 4.94 2.72 1.04 0.00 0.00 3.65 3.38 4.43 3.35 3.25 4.02 0.01 3.08 9.52 13.83 3.26 3.38 1.94 15.27 6.95 2.67 4.20 2.10 2.88 6.95 2.32 10.27 2.63 2.62 0.79 1.64 2.40 0.97 4.94 0.78 0.76 1.89 5.75 15.34 3.28 3.95 1.15 5.69 2.81 1.26 2.97 0.98 1.31 4.61 4.43 13.21 3.39 2.84 1.86 4.53 2.01 1.42 3.73 0.72 0.63 4.25 1.80 7.37 2.05 1.12 0.76 2.67 0.85 1.55 1.48 1.57 0.10 1.55 2.00 3.73 1.62 1.82 0.60 2.19 1.76 0.48 0.81 0.47 0.44 1.60 2.06 6.38 2.27 1.91 0.75 1.66 1.95 0.83 1.45 0.81 0.75 1.81 8.03 14.35 4.41 2.32 2.43 11.57 2.90 1.28 3.20 0.78 1.38 5.43 Percent of Loans Charged-off (net, YTD) All real estate loans���������������������������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases������������������������������������������������������ 1.87 4.79 0.62 0.92 2.82 1.64 2.28 5.41 9.17 3.01 1.18 2.38 1.93 0.00 0.00 0.00 0.00 2.88 15.42 10.31 9.63 15.09 0.00 9.93 2.88 2.25 1.26 0.68 3.17 3.60 2.48 4.74 8.12 3.33 1.47 2.90 0.38 2.25 0.40 0.23 0.38 0.27 1.17 1.02 9.18 0.57 0.00 0.51 1.65 4.91 0.64 1.10 1.47 1.16 1.97 2.63 7.96 1.80 1.38 1.77 1.16 5.33 0.72 0.79 3.45 0.89 1.45 3.65 10.22 1.56 0.81 1.26 1.59 2.90 0.76 0.00 2.04 1.05 4.99 2.87 5.33 2.14 1.43 2.62 0.48 1.31 0.19 0.01 0.11 0.61 0.85 1.85 11.57 0.49 0.96 0.80 0.32 1.12 0.30 0.25 0.49 0.24 0.86 0.94 4.20 0.85 0.52 0.46 2.41 4.83 0.41 0.44 4.15 1.94 1.62 3.82 9.52 2.35 0.96 2.31 Loans Outstanding (in billions) All real estate loans���������������������������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� Home equity loans���������������������������������������������������� Other 1-4 family residential��������������������������������������� Commercial and industrial loans������������������������������������� Loans to individuals���������������������������������������������������������� Credit card loans������������������������������������������������������� Other loans to individuals����������������������������������������� All other loans and leases (including farm)��������������������� Total loans and leases (plus unearned income)�������������� $4,526.7 492.2 1,089.9 216.5 667.5 1,928.5 1,275.6 1,040.2 393.0 647.2 575.0 7,417.6 $0.2 0.0 0.0 0.0 0.0 0.1 29.5 273.5 240.4 33.1 36.8 340.0 $566.1 10.9 32.2 40.1 139.6 293.2 220.9 187.8 51.0 136.9 159.3 1,134.1 $68.4 4.8 19.5 1.4 1.4 18.2 15.5 6.7 0.3 6.4 27.3 117.9 $2,433.0 391.6 858.7 137.8 263.3 736.7 671.9 267.4 37.4 230.0 203.9 3,576.2 $512.3 11.0 26.5 12.2 33.6 428.3 9.7 22.3 5.2 17.1 2.8 547.1 $19.9 0.6 0.9 0.1 10.3 8.0 4.8 50.7 12.2 38.4 1.2 76.7 $5.8 0.5 1.8 0.2 0.3 2.8 1.2 1.7 0.1 1.6 0.6 9.3 $41.2 2.8 10.1 0.8 1.6 23.0 5.7 6.8 0.2 6.6 4.3 57.9 $879.7 70.0 140.1 24.0 217.4 418.3 316.5 223.3 46.2 177.1 138.9 1,558.4 Memo: Other Real Estate Owned (in millions) All other real estate owned����������������������������������������������� Construction and development��������������������������������� Nonfarm nonresidential��������������������������������������������� Multifamily residential real estate����������������������������� 1-4 family residential������������������������������������������������� Farmland�������������������������������������������������������������������� GNMA properties������������������������������������������������������ 37,164.6 14,866.2 5,838.2 1,441.8 12,428.8 225.7 2,323.5 -30.5 0.0 0.2 0.0 0.4 0.0 0.0 2,500.0 27.0 138.0 52.0 1,502.0 0.0 628.0 582.6 210.5 168.9 23.3 133.8 45.5 0.6 26,498.4 13,095.0 4,859.1 1,120.7 6,664.3 167.4 580.5 3,119.6 915.5 128.8 37.6 1,854.5 1.9 274.4 47.4 20.2 3.1 5.1 17.7 1.2 0.0 65.4 23.1 18.2 0.9 21.9 1.3 0.0 328.3 84.8 90.7 22.3 123.1 7.3 0.0 4,053.4 490.1 431.1 180.0 2,111.2 1.0 840.1 * See Table IV-A (page 8) for explanations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 10 2009, Volume 3, No. 4 Quarterly Banking Profile TABLE V-A. Loan Performance, All FDIC-Insured Institutions Asset Size Distribution September 30, 2009 Geographic Regions* Less than $100 $1 Billion Greater All Insured $100 Million to to than Institutions Million $1 Billion $10 Billion $10 Billion New York Atlanta Chicago Kansas City Dallas San Francisco Percent of Loans 30-89 Days Past Due All loans secured by real estate������������������������������ Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 2.23 2.88 1.21 1.13 1.35 3.15 0.95 2.57 3.08 2.26 0.52 1.92 1.79 2.55 1.45 1.34 0.99 2.24 1.81 2.48 3.56 2.47 0.59 1.71 1.65 2.75 1.33 1.29 0.86 1.79 1.42 2.10 3.15 2.02 0.64 1.60 1.47 2.44 1.04 1.46 0.81 1.64 1.24 2.16 2.01 2.22 0.80 1.47 2.56 3.16 1.23 0.98 1.43 3.63 0.83 2.64 3.15 2.28 0.49 2.07 1.50 2.57 1.11 0.94 0.66 1.74 1.36 3.22 3.41 2.90 0.45 1.75 2.65 2.95 1.45 1.31 1.49 3.81 0.82 2.57 3.02 2.44 0.29 2.15 2.41 3.58 1.33 1.23 1.51 3.45 0.84 2.12 2.94 1.90 0.86 1.95 1.45 2.42 0.99 0.67 1.32 1.82 1.35 3.14 3.19 3.10 0.60 1.53 1.83 2.11 1.10 1.72 0.85 2.85 0.93 1.66 1.19 1.82 0.64 1.59 2.65 3.17 0.99 1.08 1.34 3.92 0.75 2.13 2.73 1.78 0.39 2.05 Percent of Loans Noncurrent** All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 6.41 15.00 3.40 3.58 1.76 8.06 3.56 2.08 3.29 1.34 1.64 4.94 2.79 8.93 2.79 2.30 1.12 2.05 2.64 1.12 2.48 1.10 0.74 2.42 3.89 11.87 2.64 3.26 1.15 2.57 2.30 0.94 2.76 0.80 0.96 3.42 5.24 15.29 3.03 3.81 1.13 3.80 2.36 1.31 1.68 1.16 1.19 4.32 7.38 16.34 4.00 3.60 1.86 9.79 3.91 2.22 3.41 1.41 1.76 5.37 3.77 14.10 3.26 2.32 0.74 3.21 3.33 2.93 3.53 1.90 1.26 3.40 7.22 14.60 3.99 5.21 2.28 8.96 2.96 1.36 2.76 0.95 0.95 5.34 7.60 17.48 3.92 3.93 1.71 11.19 3.58 1.44 3.11 1.00 2.40 5.71 6.86 13.96 2.81 2.07 2.11 12.35 2.39 2.12 2.96 1.40 0.61 4.55 4.17 8.48 1.95 3.58 0.60 5.11 1.65 0.74 1.19 0.59 1.13 3.26 7.09 21.74 3.35 3.64 1.25 8.10 6.11 2.62 3.69 1.97 3.17 5.82 Percent of Loans Charged-off (net, YTD) All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases��������������������������������������������� 1.87 4.79 0.62 0.92 2.82 1.64 2.28 5.41 9.17 3.01 1.18 2.38 0.63 2.93 0.45 0.49 0.82 0.35 1.43 1.27 11.19 0.92 0.00 0.76 0.88 3.04 0.39 0.53 0.71 0.55 1.48 1.75 9.39 1.18 0.70 1.00 1.66 5.68 0.63 1.07 1.02 0.83 2.07 3.14 6.64 1.82 1.03 1.82 2.17 5.16 0.74 0.96 3.12 1.97 2.40 5.81 9.31 3.31 1.25 2.74 0.81 3.08 0.51 0.48 0.87 0.65 3.34 8.57 10.03 5.96 0.73 2.73 2.26 4.68 0.51 1.28 3.80 1.85 1.57 3.53 8.75 2.01 0.94 2.17 2.05 5.36 0.98 1.10 2.02 2.04 1.95 3.37 8.68 1.82 1.69 2.15 1.70 3.78 0.51 0.42 3.64 1.10 2.52 6.68 10.45 3.52 0.51 2.40 1.11 3.00 0.39 1.18 1.31 0.60 1.22 1.83 4.40 1.13 1.00 1.18 2.51 8.65 0.75 0.98 3.49 2.43 3.37 5.27 7.74 3.68 1.80 3.09 Loans Outstanding (in billions) All real estate loans������������������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� Home equity loans������������������������������������������� Other 1-4 family residential������������������������������ Commercial and industrial loans���������������������������� Loans to individuals������������������������������������������������� Credit card loans���������������������������������������������� Other loans to individuals�������������������������������� All other loans and leases (including farm)������������ Total loans and leases (plus unearned income)����� $4,526.7 492.2 1,089.9 216.5 667.5 1,928.5 1,275.6 1,040.2 393.0 647.2 575.0 7,417.6 $69.3 6.7 20.7 1.9 2.4 28.8 13.3 7.3 0.1 7.2 11.2 101.1 $725.5 108.0 268.9 32.0 39.6 244.4 118.6 44.5 3.1 41.4 39.6 928.1 $730.2 123.2 272.4 45.9 50.7 225.2 149.6 86.5 24.8 61.7 39.1 1,005.5 $3,001.6 254.3 527.9 136.7 574.8 1,430.1 994.2 901.9 364.9 536.9 485.1 5,382.8 $806.5 60.9 207.0 56.3 74.0 403.2 170.6 257.1 162.6 94.4 79.6 1,313.7 $1,303.2 173.8 291.9 40.1 227.7 550.6 357.6 241.7 54.5 187.2 144.2 2,046.8 $957.7 88.6 205.4 62.0 198.9 385.3 295.4 179.6 37.7 141.8 127.0 1,559.8 $393.3 43.6 110.2 12.2 79.1 126.5 128.7 92.0 42.3 49.7 102.7 716.7 $335.7 67.6 121.4 8.9 24.1 101.8 94.0 41.8 10.5 31.3 22.1 493.7 $730.2 57.9 154.1 37.0 63.6 361.1 229.3 228.0 85.3 142.7 99.5 1,287.0 Memo: Other Real Estate Owned (in millions) All other real estate owned�������������������������������������� Construction and development������������������������ Nonfarm nonresidential������������������������������������ Multifamily residential real estate�������������������� 1-4 family residential���������������������������������������� Farmland����������������������������������������������������������� GNMA properties��������������������������������������������� 37,164.6 14,866.2 5,838.2 1,441.8 12,428.8 225.7 2,323.5 949.4 328.1 259.4 26.2 315.0 20.3 0.5 10,394.3 5,305.7 2,137.2 335.7 2,481.6 127.6 8.5 8,746.1 4,689.3 1,612.0 448.9 1,837.9 61.1 97.5 17,074.8 4,543.0 1,829.7 631.0 7,794.3 16.7 2,217.1 2,485.0 662.6 571.3 144.9 1,061.2 10.1 23.4 11,594.5 5,036.3 1,658.0 495.4 4,202.6 35.8 166.6 9,161.3 2,650.3 1,238.1 328.6 3,770.8 37.0 1,224.2 4,503.8 1,739.6 806.5 108.9 971.3 35.0 842.7 3,927.0 1,889.4 856.5 142.7 936.4 87.9 14.2 5,493.0 2,888.0 707.8 221.3 1,486.7 19.9 52.5 * See Table IV-A (page 9) for explanations. ** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. FDIC Quarterly 11 2009, Volume 3, No. 4 TABLE VI-A. Derivatives, All FDIC-Insured Commercial Banks and State-Chartered Savings Banks Asset Size Distribution (dollar figures in millions; 3rd Quarter 2nd Quarter 1st Quarter notional amounts unless otherwise indicated) 2009 2009 2009 ALL DERIVATIVE HOLDERS Number of institutions reporting derivatives����������������� 1,171 1,214 1,170 Total assets of institutions reporting derivatives���������� $10,545,662 $10,594,628 $10,672,649 Total deposits of institutions reporting derivatives������� 7,182,788 7,097,202 6,983,343 Total derivatives������������������������������������������������������������� 206,393,244 204,956,766 203,388,099 % Change Less $100 4th Quarter 3rd Quarter 08Q3than $100 Million to 2008 2008 09Q3 Million $1 Billion 1,102 1,070 $10,975,123 $10,723,563 7,091,683 6,801,835 212,114,644 177,121,812 $1 Billion to $10 Greater than Billion $10 Billion 9.4 -1.7 5.6 16.5 94 $6,641 5,487 284 693 $291,061 232,986 20,444 304 80 $876,990 $9,370,970 656,565 6,287,751 59,854 206,312,662 137,207,613 19,729,753 2,786,005 1,250,074 16,148,367 177,121,812 25.8 -10.2 -21.7 -25.9 -19.6 16.5 273 0 11 0 0 284 19,813 27 172 300 132 20,444 56,366 172,500,798 2,321 17,719,138 916 2,180,925 191 925,805 60 12,985,997 59,854 206,312,662 Derivative Contracts by Transaction Type Swaps���������������������������������������������������������������������������� 135,921,737 135,613,803 133,873,113 143,110,842 108,289,345 Futures & forwards�������������������������������������������������������� 24,879,311 24,706,143 23,587,682 22,528,731 24,492,578 Purchased options��������������������������������������������������������� 15,427,830 14,928,696 14,936,181 14,824,429 13,491,255 Written options��������������������������������������������������������������� 15,065,820 14,787,419 14,983,352 14,922,615 13,454,312 Total�������������������������������������������������������������������������������� 191,294,699 190,036,061 187,380,328 195,386,617 159,727,490 25.5 1.6 14.4 12.0 19.8 30 116 20 118 284 10,179 4,344 816 4,972 20,310 37,363 11,571 3,339 7,210 59,483 135,874,165 24,863,281 15,423,654 15,053,522 191,214,622 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 172,577,250 171,919,307 169,395,794 175,894,783 Foreign exchange*�������������������������������������������������������� 17,721,486 16,646,714 16,272,958 16,922,815 Equity����������������������������������������������������������������������������� 2,182,024 2,041,640 2,174,368 2,206,793 Commodity & other (excluding credit derivatives)�������� 926,295 909,033 938,063 1,061,132 Credit������������������������������������������������������������������������������ 12,986,189 13,440,073 14,606,916 16,029,122 Total�������������������������������������������������������������������������������� 206,393,244 204,956,766 203,388,099 212,114,644 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����������������������������������� 123,736 -5,040 -241 3,615 -234,357 266,208 126,040 -10,568 679 1,156 -476,973 525,587 138,559 -10,459 3,114 4,158 -959,080 1,031,185 131,483 -16,942 2,871 3,848 -975,755 1,046,813 27,300 15,054 3,742 3,173 -566,035 603,936 353.2 N/M N/M 13.9 N/M -55.9 1 0 0 0 0 0 4 0 3 8 0 -1 60 2 17 2 2 -3 123,672 -5,041 -261 3,605 -234,360 266,211 Derivative Contracts by Maturity** Interest rate contracts����������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Foreign exchange contracts������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Equity contracts��������������������������������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years Commodity & other contracts����������������� < 1 year ������������������������������������������ 1-5 years ������������������������������������������ > 5 years 74,555,166 33,977,568 26,620,709 9,674,124 2,405,751 1,325,262 358,462 301,995 82,835 237,860 233,829 43,612 72,457,913 35,921,531 28,356,868 9,490,043 2,293,453 1,193,852 343,418 291,182 75,716 252,705 211,329 45,443 68,442,052 37,293,223 29,984,848 9,234,331 2,163,751 1,056,793 348,777 286,171 82,843 279,748 206,173 41,546 58,618,112 47,456,432 36,868,247 10,561,395 2,168,136 1,079,943 409,029 256,252 72,337 264,916 261,768 45,031 40,400,427 37,760,963 28,785,015 12,664,219 1,787,926 676,596 508,748 332,908 81,967 294,036 288,860 88,832 84.5 -10.0 -7.5 -23.6 34.6 95.9 -29.5 -9.3 1.1 -19.1 -19.1 -50.9 77 13 18 0 0 0 2 2 0 0 0 0 3,732 7,380 3,328 20 3 0 31 82 0 12 113 13 15,963 16,488 15,541 1,522 8 0 83 421 4 146 12 0 74,535,393 33,953,687 26,601,823 9,672,582 2,405,741 1,325,262 358,346 301,491 82,830 237,702 233,703 43,598 57.3 83.6 66.7 80.6 86.2 89.2 107.4 103.2 60.3 122.3 0.1 0.1 0.6 0.4 1.6 0.5 65.0 95.0 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 (%)�������������������������������������������������� 140.9 147.3 175.3 210.6 182.6 0.2 1.0 2.1 160.0 Credit losses on derivatives***���������������������������������� 603.0 383.0 217.0 1,072.0 227.0 165.6 0.0 7.0 2.0 593.0 HELD FOR TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 208 8,917,601 6,018,321 204 8,913,300 5,990,013 200 9,017,972 5,887,336 181 9,413,833 6,085,115 187 9,236,235 5,856,346 11.2 -3.4 2.8 10 748 588 73 30,805 24,623 69 273,194 199,322 56 8,612,854 5,793,789 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� 170,554,634 169,591,911 167,216,659 173,827,598 Foreign exchange���������������������������������������������������������� 15,516,932 15,058,290 14,766,077 16,147,796 Equity����������������������������������������������������������������������������� 2,175,796 2,034,228 2,162,149 2,195,068 Commodity & other�������������������������������������������������������� 924,183 906,108 935,634 1,058,678 Total�������������������������������������������������������������������������������� 189,171,544 187,590,538 185,080,520 193,229,140 135,190,125 18,396,233 2,773,712 1,246,952 157,607,022 26.2 -15.7 -21.6 -25.9 20.0 37 0 0 0 37 833 0 1 9 843 17,352 1,611 255 111 19,329 170,536,412 15,515,320 2,175,539 924,063 189,151,335 N/M N/M -72.7 -43.2 -11.2 0 0 0 0 0 0 0 0 0 0 58 3 2 1 63 5,378 -1,537 151 1,648 5,640 0.0 0.0 0.1 5.9 1.7 -14.2 4.8 76.8 Trading Revenues: Cash & Derivative Instruments Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other (including credit derivatives)�������� Total trading revenues��������������������������������������������������� 5,437 -1,535 153 1,648 5,704 1,080 2,132 -281 2,328 5,259 9,084 2,436 1,043 -2,366 10,197 -5,298 3,388 -1,061 -6,265 -9,237 -132 3,098 561 2,900 6,427 Share of Revenue Trading revenues to gross revenues (%)���������������������� Trading revenues to net operating revenues (%)���������� 4.7 82.6 4.0 96.4 7.6 138.3 -8.2 44.0 4.6 67.0 HELD FOR PURPOSES OTHER THAN TRADING Number of institutions reporting derivatives����������������� Total assets of institutions reporting derivatives���������� Total deposits of institutions reporting derivatives������� 1,043 10,193,321 6,950,206 1,086 10,218,107 6,847,509 1,047 10,304,668 6,729,875 998 10,464,333 6,820,742 970 10,396,554 6,589,371 7.5 -2.0 5.5 84 5,894 4,899 622 262,835 210,231 261 740,958 554,749 76 9,183,634 6,180,327 Derivative Contracts by Underlying Risk Exposure Interest rate�������������������������������������������������������������������� Foreign exchange���������������������������������������������������������� Equity����������������������������������������������������������������������������� Commodity & other�������������������������������������������������������� Total notional amount���������������������������������������������������� 2,022,616 92,197 6,229 2,112 2,123,154 2,327,396 107,791 7,412 2,924 2,445,523 2,179,134 106,027 12,219 2,429 2,299,808 2,067,185 76,113 11,725 2,454 2,157,477 2,017,489 87,565 12,293 3,121 2,120,468 0.3 5.3 -49.3 -32.3 0.1 236 0 11 0 246 18,980 25 172 291 19,467 39,014 398 661 80 40,154 1,964,386 91,774 5,386 1,742 2,063,287 All line items are reported on a quarterly basis. N/M - Not Meaningful * Include spot foreign exchange contracts. All other references to foreign exchange contracts in which notional values or fair values are reported exclude spot foreign exchange contracts. ** Derivative contracts subject to the risk-based capital requirements for derivatives. *** The reporting of credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and to those banks filing the FFIEC 041 report form that have $300 million or more in total assets. FDIC Quarterly 12 2009, Volume 3, No. 4 Quarterly Banking Profile TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Commercial Banks and State-Chartered Savings Banks) Asset Size Distribution (dollar figures in millions) Assets Securitized and Sold with Servicing Retained or with Recourse or Other Seller-Provided Credit Enhancements 3rd Quarter 2009 2nd Quarter 2009 1st Quarter 2009 4th Quarter 2008 3rd Quarter 2008 % Change Less than $100 $1 Billion Greater 08Q3$100 Million to to $10 than $10 09Q3 Million $1 Billion Billion Billion Number of institutions reporting securitization activities����������������������������������������� 145 140 132 132 128 Outstanding Principal Balance by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� $1,225,632 $1,222,173 $1,234,585 $1,256,021 $1,217,682 Home equity loans��������������������������������������������������������������������������������������������� 6,205 6,594 6,595 6,692 6,880 Credit card receivables������������������������������������������������������������������������������������� 391,417 397,918 399,113 398,261 417,832 Auto loans���������������������������������������������������������������������������������������������������������� 8,277 10,266 11,230 12,040 13,842 Other consumer loans��������������������������������������������������������������������������������������� 25,335 26,006 26,692 27,427 28,090 Commercial and industrial loans����������������������������������������������������������������������� 8,435 9,019 8,317 9,705 11,080 All other loans, leases, and other assets*�������������������������������������������������������� 192,116 193,377 197,693 198,471 197,010 Total securitized and sold������������������������������������������������������������������������������������������ 1,857,417 1,865,353 1,884,227 1,908,617 1,892,416 13.3 18 62 0.7 -9.8 -6.3 -40.2 -9.8 -23.9 -2.5 -1.8 $211 0 0 0 0 0 52 263 $855 0 3,499 0 0 6 85 4,445 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��� -19.3 -25.3 465.9 66.7 0.4 61.2 -53.4 309.1 -71.9 4 0 0 0 0 0 1 5 0 8 0 606 0 0 0 4 619 0 0 0 1,897 8 0 94 51 2,049 0 6,054 1,006 133,541 737 1,434 180 277 143,228 358 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 26 39 $2,250 $1,222,316 44 6,162 9,539 378,379 97 8,180 0 25,335 2,819 5,610 187 191,792 14,935 1,837,773 6,066 1,006 136,043 745 1,434 274 333 145,901 358 6,046 1,063 129,373 722 1,399 184 299 139,087 378 6,279 1,120 39,100 912 1,429 367 301 49,509 397 6,892 1,247 23,228 707 1,532 137 612 34,355 830 7,514 1,347 24,039 447 1,428 170 714 35,660 1,273 4.6 1.3 2.9 2.4 3.6 2.9 1.2 3.9 4.3 0.8 2.6 2.2 2.9 2.6 1.9 3.7 4.1 1.1 3.0 2.0 3.1 3.1 0.6 3.5 4.4 1.4 2.9 2.5 3.9 2.6 0.6 3.7 3.8 1.3 2.5 2.1 3.2 1.6 0.2 3.1 2.8 0.0 0.0 0.0 0.0 0.0 0.8 2.4 0.3 0.0 1.8 0.0 0.0 0.0 0.0 1.5 2.2 5.2 2.2 0.6 0.0 7.4 0.3 3.1 4.6 1.2 2.9 2.5 3.6 0.6 1.2 3.9 7.5 1.8 2.6 0.3 3.6 1.2 3.7 5.9 6.6 0.9 2.9 0.2 3.3 1.3 1.6 5.2 5.8 1.4 3.0 0.2 3.5 3.1 1.1 4.6 4.5 1.2 2.5 0.3 3.7 2.1 0.4 3.6 3.2 0.7 2.1 0.2 2.9 1.5 0.2 2.6 1.2 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.6 0.0 1.4 0.0 0.0 0.0 0.0 1.2 1.9 4.4 1.9 0.1 0.0 2.3 0.0 2.0 7.5 1.8 2.7 0.3 3.6 0.7 3.8 6.0 0.7 1.4 7.6 1.9 0.7 10.0 0.0 2.1 0.5 0.9 4.8 1.1 0.5 6.9 0.0 1.4 0.2 0.6 2.1 0.8 0.2 2.6 0.0 0.6 0.3 0.1 6.4 0.8 0.8 5.9 0.0 1.6 0.3 0.4 4.4 1.3 0.6 3.6 0.0 1.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.6 0.0 0.0 0.0 0.0 3.6 0.0 1.8 5.4 0.2 0.0 27.0 0.0 8.5 0.7 1.4 7.7 1.9 0.7 1.5 0.0 2.1 396 73,401 930 134 68,128 451 165 77,212 450 124 113,017 436 166 98,826 636 138.6 -25.7 46.2 0 0 0 0 247 2 0 6,451 756 396 66,703 171 2 788 0 4 594 0 5 556 0 5 584 16 6 623 15 -66.7 26.5 -100.0 0 0 0 0 272 0 0 515 0 2 0 0 Number of institutions reporting asset sales���������������������������������������������������� Outstanding Principal Balance by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� Home equity, credit card receivables, auto, and other consumer loans��������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total sold and not securitized����������������������������������������������������������������������������������� 819 824 818 797 787 4.1 158 498 117 46 66,902 1,024 2,844 47,967 118,737 69,854 1,160 3,195 47,559 121,768 70,033 1,348 6,028 46,438 123,847 70,682 1,477 6,698 46,254 125,110 73,033 1,611 7,314 45,203 127,160 -8.4 -36.4 -61.1 6.1 -6.6 1,171 0 1 0 1,172 10,160 24 62 84 10,329 4,250 5 21 175 4,450 51,321 996 2,761 47,708 102,786 Maximum Credit Exposure by Asset Type 1-4 family residential loans�������������������������������������������������������������������������������� Home equity, credit card receivables, auto, and other consumer loans��������� Commercial and industrial loans����������������������������������������������������������������������� All other loans, leases, and other assets���������������������������������������������������������� Total credit exposure������������������������������������������������������������������������������������������������� 14,549 104 2,003 10,133 26,789 15,210 113 2,224 10,010 27,557 15,420 183 4,995 9,790 30,388 15,312 189 5,617 9,528 30,647 15,586 203 6,180 9,312 31,281 -6.7 -48.8 -67.6 8.8 -14.4 113 0 1 0 114 2,029 7 51 44 2,131 2,675 3 21 55 2,753 9,731 95 1,931 10,033 21,790 Support for Securitization Facilities Sponsored by Other Institutions Number of institutions reporting securitization facilities sponsored by others������� Total credit exposure������������������������������������������������������������������������������������������������� 60 4,872 60 3,812 56 2,134 51 3,319 49 6,050 22.4 -19.5 21 11 27 43 7 21 5 4,797 Total unused liquidity commitments������������������������������������������������������������������������� 327 475 936 1,416 3,531 -90.7 0 0 0 327 Other Assets serviced for others**�������������������������������������������������������������������������������������� Asset-backed commercial paper conduits Credit exposure to conduits sponsored by institutions and others������������������ Unused liquidity commitments to conduits sponsored by institutions and others�������������������������������������������������������������������������������������������������� Net servicing income (for the quarter)���������������������������������������������������������������������� Net securitization income (for the quarter)��������������������������������������������������������������� Total credit exposure to Tier 1 capital (%)***������������������������������������������������������������ 5,978,776 8.1 4,377 75,833 17,658 5,879,912 5,683,430 20,210 22,981 5,615,123 5,528,963 23,064 20,830 -15.2 5 0 96,729 5,801,837 226 17,427 182,740 210,026 273,542 297,908 311,683 -41.4 0 0 0 182,740 5,995 1,163 16.10 10,845 -142 15.70 5,946 2,124 7.70 -390 2,393 6.80 4,110 3,120 7.40 Blank 45.9 -62.7 5 0 0.70 179 62 2.20 220 129 3.60 5,591 972 20.70 * Line item titled “All other loans and all leases” for quarters prior to March 31, 2006. ** The amount of financial assets serviced for others, other than closed-end 1-4 family residential mortgages, is reported when these assets are greater than $10 million. *** Total credit exposure includes the sum of the three line items titled “Total credit exposure” reported above. FDIC Quarterly 13 2009, Volume 3, No. 4 INSURANCE FUND INDICATORS Insured Deposits Grow by 10.2 Percent ■ DIF Reserve Ratio Declines 38 Basis Points to −0.16 Percent ■ Fifty Institutions Failed During Third Quarter ■ Rule Adopted for Prepaid Assessments ■ Total assets of the nation’s 8,099 FDIC-insured commercial banks and savings institutions decreased by $54.3 billion (0.4 percent) during the third quarter of 2009. Total deposits increased by $79.8 billion (0.9 percent) during the quarter, primarily due to activity in foreign offices, which was up $81.9 billion (5.6 percent). This was the largest increase in foreign office deposits since the third quarter of 2007 when these deposits increased by $96.8 billion (7.2 percent). Domestic deposits were almost unchanged in the third quarter, declining by $2.0 billion (0.03 percent) from the previous quarter. Domestic non-interest-bearing deposits decreased by $17.7 billion (1.2 percent), and domestic time deposits decreased by $136.9 billion (5.2 percent). Savings deposits and interest-bearing checking accounts increased by $152.5 billion (4.4 percent). Over the past 12 months, the share of assets funded by domestic deposits rose from 53.2 percent to 57.0 percent, and the share funded by foreign office deposits increased from 11.1 percent to 11.7 percent. During the same period, Federal Home Loan Bank (FHLB) advances as a percentage of total assets declined from 6.7 percent to 4.3 percent, the smallest percentage on record (2001 to present). FHLB advances decreased by $335.9 billion (36.8 percent) over the 12 months ending September 30, 2009. percent) during the third quarter, the sharpest decline since the first quarter of 1991 when they decreased by $11.9 billion (11.0 percent). Reciprocal brokered deposits increased by $1.4 billion (4.1 percent) to $36.1 billion during the three months ending September 30, 2009. On May 20, 2009, the President signed the Helping Families Save Their Homes Act of 2009, which extended the temporary deposit insurance coverage limit increase to $250,000 for deposits other than retirement accounts (from the permanent limit of $100,000) through the end of 2013. The legislation also eliminated the provision in the Emergency Economic Stabilization Act of 2008 that prevented the FDIC from considering this temporary increase in deposit insurance coverage for purposes of setting deposit insurance assessments. Beginning September 30, 2009, insured deposit estimates are based on the $250,000 coverage limit. Estimated insured deposits at all FDIC-insured institutions (based on $250,000 coverage) increased by $491.5 billion (10.2 percent) in the third quarter of 2009. The Deposit Insurance Fund (DIF) decreased by $18.6 billion during the third quarter to a negative $8.2 billion (unaudited) primarily because of $21.7 billion in additional provisions for bank failures. Also, unrealized losses on available-for-sale securities, combined with operating expenses, reduced the fund by $1.1 billion. Accrued assessment income added $3.0 billion to the fund during the quarter, and interest earned, combined with realized gains from sale of securities and surcharges from the Temporary Liquidity Guarantee Program, added $1.2 billion. Since the second quarter of 2009, the portion of brokered deposits exceeding 10 percent of an institution’s domestic deposits has been included in the formula used to price an institution’s deposit insurance.1 Brokered deposits decreased by $73.4 billion (10.0 For an institution in Risk Category I, the initial base assessment rate is adjusted using the adjusted brokered deposit ratio. This ratio will exceed zero if an institution’s brokered deposits are greater than 10 percent of its domestic deposits and its total assets are more than 40 percent greater than they were four years previously. Certain reciprocal brokered deposits are excluded from the calculation of the adjusted brokered deposit ratio. For an institution in any other risk category, the initial base assessment rate is increased if the institution’s ratio of brokered deposits to domestic deposits is greater than 10 percent. Reciprocal brokered deposits are included in the amount of brokered deposits for purposes of computing this ratio. 1 FDIC Quarterly Fifty insured institutions with combined assets of $68.8 billion failed during the third quarter of 2009, the largest number since the second quarter of 1990 when 65 insured institutions failed. Ninety-five insured institutions with combined assets of $104.7 billion failed during the first three quarters of 2009, at a currently estimated cost to the DIF of $25.0 billion. The DIF’s 14 2009, Volume 3, No. 4 Quarterly Banking Profile reserve ratio was negative 0.16 percent on September 30, 2009, down from 0.22 percent on June 30, 2009, and 0.76 percent one year ago. The September 30, 2009, reserve ratio is the lowest reserve ratio for a combined bank and thrift insurance fund since June 30, 1992, when the ratio was negative 0.20 percent. however, an institution’s total annual base assessment rate for purposes of estimating the institution’s assessment for 2011 and 2012 will be increased by 3 basis points. For purposes of calculating the amount that an institution will prepay on December 30, 2009, an institution’s third quarter 2009 assessment base will be increased quarterly at a 5 percent annual growth rate through the end of 2012. The FDIC will begin to draw down an institution’s prepaid assessments on March 30, 2010, representing payment for the regular quarterly risk-based assessment for the fourth quarter of 2009. Prepaid Assessments On November 12, 2009, the FDIC adopted a final rule amending the assessment regulations to require insured depository institutions to prepay their quarterly riskbased assessments for the fourth quarter of 2009 and for all of 2010, 2011, and 2012 on December 30, 2009, along with each institution’s risk-based assessment for the third quarter of 2009. For purposes of estimating an institution’s assessments for the fourth quarter of 2009 and for all of 2010, 2011, and 2012 (and calculating the amount that an institution will prepay on December 30, 2009), an institution’s assessment rate will be its total base assessment rate in effect on September 30, 20092; Author: Kevin Brown, Sr. Financial Analyst Division of Insurance and Research (202) 898-6817 An institution’s risk-based assessment rate may change during a quarter when a new CAMELS rating is transmitted, or a new long-term debt-issuer rating is assigned. See 12 CFR 327.4(f). For purposes of calculating an institution’s prepaid assessment, the FDIC will use the institution’s CAMELS ratings and, where applicable, long-term debt- issuer ratings, and the resulting assessment rate in effect on September 30, 2009. 2 FDIC Quarterly 15 2009, Volume 3, No. 4 Table I-B. Insurance Fund Balances and Selected Indicators (dollar figures in millions) Beginning Fund Balance��� 3rd Quarter 2009* Changes in Fund Balance: Assessments earned������������ Interest earned on investment securities���� Realized gain on sale of investments�������������������� Operating expenses������������� Provision for insurance losses����������������������������� All other income, net of expenses������������� Unrealized gain/(loss) on available-for-sale securities����������������������� Total fund balance change��� 2nd Quarter 2009* 1st Quarter 2009* 4th Quarter 2008 Deposit Insurance Fund 2nd 1st 4th Quarter Quarter Quarter 2008 2008 2007 3rd Quarter 2008 3rd Quarter 2007 2nd Quarter 2007 1st Quarter 2007 4th Quarter 2006 3rd Quarter 2006 2nd Quarter 2006 $10,368 $13,007 $17,276 $34,588 $45,217 $52,843 $52,413 $51,754 $51,227 $50,745 $50,165 $49,992 $49,564 $49,193 2,965 9,095 2,615 996 881 640 448 239 170 140 94 10 10 7 176 240 212 277 526 651 618 585 640 748 567 476 622 665 732 328 521 298 136 266 302 290 473 249 0 256 0 238 0 262 0 243 0 248 0 239 0 248 0 237 0 242 21,694 11,615 6,637 19,163 11,930 10,221 525 39 132 -3 -73 49 -50 -6 308 375 2 15 16 1 0 -2 24 1 4 5 1 12 -770 -18,611 -957 -2,639 -331 -4,269 551 -17,312 -346 -10,629 1,559 -7,626 127 430 138 659 68 527 -162 482 81 580 -21 173 -18 428 -77 371 Ending Fund Balance��������� Percent change from four quarters earlier������� -8,243 10,368 13,007 17,276 34,588 45,217 52,843 52,413 51,754 51,227 50,745 50,165 49,992 49,564 NM -77.07 -75.39 -67.04 -33.17 -11.73 4.13 4.48 3.52 3.36 3.15 3.23 3.35 3.21 Reserve Ratio (%)��������������� -0.16 0.22 0.27 0.36 0.76 1.01 1.19 1.22 1.22 1.21 1.20 1.21 1.22 1.23 4,817,201 4,832,921 4,750,807 4,545,350 4,467,849 4,438,180 4,292,221 4,242,607 4,235,044 4,245,266 4,153,786 4,100,013 4,040,353 7.82 8.89 10.68 7.14 5.50 4.54 3.33 3.48 4.82 6.08 6.76 7.02 7.52 7,561,179 7,561,972 7,546,999 7,505,409 7,230,328 7,036,248 7,076,718 6,921,687 6,747,998 6,698,886 6,702,598 6,640,105 6,484,372 6,446,868 4.58 7.47 6.65 8.43 7.15 5.04 5.58 4.24 4.07 3.91 5.71 6.59 6.76 8.68 8,109 8,205 8,257 8,315 8,394 8,462 8,505 8,545 8,570 8,625 8,661 8,692 8,755 8,790 Estimated Insured Deposits**���������������������������� 5,308,738 Percent change from four quarters earlier������� 16.79 Domestic Deposits������������� Percent change from four quarters earlier������� Number of institutions reporting����������������������� Deposit Insurance Fund Balance and Insured Deposits ($ Millions) DIF Reserve Ratios Percent of Insured Deposits 1.23 1.23 1.22 1.21 1.20 1.21 1.22 1.22 1.19 1.01 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 9/09 0.76 0.36 0.27 0.22 -0.16 3/06 9/06 3/07 9/07 3/08 9/08 3/09 9/09 DIF Balance DIF-Insured Deposits 49,193 49,564 49,992 50,165 50,745 51,227 51,754 52,413 52,843 45,217 34,588 17,276 13,007 10,368 -8,243 4,001,906 4,040,353 4,100,013 4,153,786 4,245,266 4,235,044 4,242,607 4,292,221 4,438,180 4,467,849 4,545,350 4,750,807 4,832,921 4,817,201 5,308,738 Table II-B. Problem Institutions and Failed/Assisted Institutions (dollar figures in millions) Problem Institutions Number of institutions��������������������������������������������������������� Total assets�������������������������������������������������������������������������� Failed Institutions Number of institutions��������������������������������������������������������� Total assets�������������������������������������������������������������������������� Assisted Institutions**** Number of institutions��������������������������������������������������������� Total assets�������������������������������������������������������������������������� 2009*** 2008*** 2008 2007 2006 2005 2004 552 $345,931 171 $115,639 252 $159,405 76 $22,189 50 $8,265 52 $6,607 80 $28,250 95 $104,665 13 $347,569 25 $371,945 3 $2,615 0 $0 0 $0 4 $170 8 $1,917,482 0 $0 5 $1,306,042 0 0 0 0 0 0 0 0 * For 2009, preliminary unaudited fund data, which are subject to change. ** The Emergency Economic Stabilization Act of 2008 prohibited the FDIC from considering the temporary coverage increase to $250,000 in setting assessments. Therefore, we do not include the additional insured deposits in calculating the fund reserve ratio from fourth quarter 2008 through the second quarter 2009. The Helping Families Save Their Home Act of 2009 eliminated the prohibition beginning with the third quarter of 2009, estimates of insured deposits include the temporary coverage increase to $250,000. *** A ssisted institutions represent five institutions under a single holding company that received assistance in 2008, and eight institutions under a different single holding company that received assistance in 2009. **** Through September 30. FDIC Quarterly 16 2009, Volume 3, No. 4 Quarterly Banking Profile Table III-B. Estimated FDIC-Insured Deposits by Type of Institution (dollar figures in millions) Number of Institutions September 30, 2009 Commercial Banks and Savings Institutions Total Assets Domestic Deposits* Est. Insured Deposits FDIC-Insured Commercial Banks����������������������������������������������� FDIC-Supervised������������������������������������������������������������������� OCC-Supervised�������������������������������������������������������������������� Federal Reserve-Supervised������������������������������������������������� 6,911 4,573 1,492 846 $11,866,395 1,942,120 8,213,334 1,710,941 $6,630,501 1,465,607 4,192,889 972,004 $4,493,927 1,174,525 2,687,714 631,688 FDIC-Insured Savings Institutions���������������������������������������������� OTS-Supervised Savings Institutions������������������������������������ FDIC-Supervised State Savings Banks��������������������������������� 1,188 780 408 1,380,890 1,070,636 310,255 922,639 699,400 223,240 808,124 615,610 192,514 Total Commercial Banks and Savings Institutions���������������������� 8,099 13,247,285 7,553,140 5,302,052 Other FDIC-Insured Institutions U.S. Branches of Foreign Banks������������������������������������������������� 10 21,396 8,038 6,687 Total FDIC-Insured Institutions���������������������������������������������������� .. 8,109 13,268,681 7,561,179 5,308,738 * Excludes $1.55 trillion in foreign office deposits, which are uninsured. Table IV-B. Distribution of Institutions and Domestic Deposits Among Risk Categories Quarter Ending June 30, 2009 (dollar figures in billions) Risk Category I Risk Category II Risk Category III Risk Category IV Annual Rate in Basis Points 7.00-12.00 12.01- 14.00 14.01- 15.99 16.00-24.00 17.00-22.00 22.01-43.00 27.00-32.00 32.01-58.00 40.00-45.00 45.01-77.50 Number of Institutions 1,989 1,779 2,584 354 677 337 204 158 67 55 Percent of Total Institutions 24.24 21.68 31.50 4.31 8.25 4.11 2.49 1.93 0.82 0.67 Domestic Deposits 579 1,525 2,360 358 2,158 326 71 107 42 37 Percent of Total Domestic Deposits 7.65 20.17 31.20 4.73 28.53 4.31 0.94 1.41 0.56 0.49 Note: Institutions are categorized based on supervisory ratings, debt ratings and financial data as of June 30, 2009. Rates do not reflect the application of assessment credits. See notes to users for further information on risk categories and rates. Assessment rates within a given risk category vary for several reasons, see 12 CFR Part 327, http://www.fdic.gov/deposit/insurance/initiative/09FinalAD35.pdf FDIC Quarterly 17 2009, Volume 3, No. 4 TEMPORARY LIQUIDITY GUARANTEE PROGRAM Final Rule for Phasing Out Debt Guarantee Program Adopted ■ Transaction Account Guarantee Program Extended to June 30, 2010 ■ More Than 600,000 Additional Transaction Accounts Receive Full Coverage ■ $307 Billion in Debt Outstanding in Program ■ A final rule extending the TAGP six months, to June 30, 2010, was adopted on August 26, 2009. Entities currently participating in the program will have an opportunity to opt out of the extended program. Depository institutions that remain in the extended program will be subject to increased fees that are adjusted to reflect the institution’s risk.3 FDIC Responds to Market Disruptions with TLGP The FDIC Board approved the Temporary Liquidity Guarantee Program (TLGP) on October 13, 2008, as major disruptions in credit markets blocked access to liquidity for financial institutions.1 The TLGP improved access to liquidity through the Transaction Account Guarantee Program (TAGP), which fully guarantees non-interest-bearing transaction deposit accounts above $250,000, regardless of dollar amount, and the Debt Guarantee Program (DGP), which guarantees eligible senior unsecured debt issued by eligible institutions. The Board adopted a final rule on October 20, 2009, that allows the DGP to expire on October 31, 2009.4 The rule also establishes a limited, six-month guarantee facility upon expiration of the DGP. This emergency guarantee facility would be available on a case-by-case basis to entities participating in the DGP, upon application to the FDIC and with the approval of the Chairman after consultation with the Board. All insured depository institutions are eligible to participate in the TAGP. Institutions eligible for participation in the DGP include insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of insured depository institutions that the FDIC designates as eligible entities. Program Funded by Industry Fees and Assessments The TLGP does not rely on taxpayer funding or the Deposit Insurance Fund. Both components of the program are paid for by direct user fees. Institutions participating in the TAGP provide customers full coverage on non-interest-bearing transaction accounts for an annual fee of 10 basis points through year-end 2009. Fees for qualifying non-interest-bearing transaction accounts guaranteed between January 1, 2010, and June 30, 2010, will be based on the participating entity’s risk category assignment under the FDIC’s risk-based premium system. Annualized fees will be either 15, 20, or 25 basis points, depending on an institution’s risk category. FDIC Extends Transaction Account and Debt Guarantee Programs Although financial markets have improved significantly since the fall of 2008, portions of the industry are still suffering from recent economic turmoil. To facilitate the orderly phase-out of the TLGP, and to continue access to FDIC guarantees where they are needed, the FDIC Board of Directors (Board) extended both the TAGP and the DGP. On March 17, 2009, the Board voted to extend the deadline for issuance of guaranteed debt from June 30, 2009, to October 31, 2009, and extended the expiration date of the guarantee to the earlier of maturity of the debt or December 31, 2012, from June 30, 2012. The FDIC imposed a surcharge on debt issued with a maturity of one year or more beginning in the second quarter of 2009.2 Fees for participation in the DGP depend on the maturity of debt issued and range from 50 to 100 basis points (annualized). A surcharge will be imposed on debt issued with a maturity of one year or greater after April 1, 2009. For debt that is not issued under the extension, that is, debt that is issued on or before June 30, 2009, and matures on or before June 30, 2012, surcharges will be 10 basis points (annualized) on debt issued by The FDIC invoked the systemic risk exception pursuant to section 141 of the Federal Deposit Improvement Act of 1991, 12 U.S.C 1823(c)(4) on October 13, 2008. For further information on the TLGP, see http://www.fdic.gov/regulations/resources/TLGP/index.html. 2 See http://www.fdic.gov/news/board/Mar1709rule.pdf. 1 FDIC Quarterly See http://www.fdic.gov/news/board/aug26no3.pdf. See http://www.fdic.gov/regulations/laws/ federal/2009/09finalAD37Oct23.pdf. 3 4 18 2009, Volume 3, No. 4 Quarterly Banking Profile insured depository institutions and 20 basis points (annualized) on debt issued by other participating entities. For debt issued under the extension, that is, debt issued after June 30, 2009, or debt that matures after June 30, 2012, surcharges will be 25 basis points (annualized) on debt issued by insured depository institutions and 50 basis points (annualized) on debt issued by other participating entities. As of September 30, 2009, a total of $9.6 billion in fees had been assessed under the DGP. 30, 2009. Eligible entities may issue debt up to 125 percent of that outstanding amount. The cap for FDICinsured institutions that had no outstanding short-term senior unsecured debt other than Fed funds is set at 2 percent of liabilities as of September 30, 2008. Total debt outstanding at quarter-end represented 50 percent of issuing entities’ total cap. $307 Billion in FDIC-Guaranteed Debt Was Outstanding at September 30, 2009 A Majority of Eligible Entities Have Chosen to Participate in the TLGP Eighty-nine financial entities—57 insured depository institutions and 32 bank and thrift holding companies and nonbank affiliates—had $307 billion in guaranteed debt outstanding at the end of the third quarter. Some banking groups issued FDIC-guaranteed debt at both the subsidiary and holding company level, but most guaranteed debt was issued by holding companies or nonbank affiliates of depository institutions. Bank and thrift holding companies and nonbank affiliates issued 81 percent of FDIC-guaranteed debt outstanding at September 30, 2009. More than 86 percent of FDIC-insured institutions have opted in to the TAGP, and more than half of all eligible entities have elected to opt in to the DGP. Lists of institutions that opted out of the guarantee programs are posted at http://www.fdic.gov/regulations/resources/ TLGP/optout.html. $760 Billion in Transaction Accounts over $250,000 Guaranteed According to third quarter 2009 Call and Thrift Financial Reports, insured institutions reported 647,787 noninterest-bearing transaction accounts over $250,000, a decline of 2.9 percent compared with second quarter 2009. These deposit accounts totaled $923 billion, of which $761 billion was guaranteed under the TAGP. More than 5,800 FDIC-insured institutions reported non-interest-bearing transaction accounts over $250,000 in value. Debt outstanding at September 30 had longer terms at issuance, compared to debt outstanding at year-end. Slightly more than 2 percent of debt outstanding matures in 180 days or less, compared with 49 percent at year-end; and 75 percent matures more than two years after issuance, compared with 39 percent at December 31, 2008. Among types of debt instruments, 89 percent was in medium-term notes, compared with 44 percent at year-end. The share of outstanding debt in commercial paper fell to 2 percent from 43 percent at year-end. Debt Outstanding Represents 50 Percent of Total Cap on Issuers’ Guaranteed Debt Author: Katherine Wyatt Chief, Financial Analysis Section Division of Insurance and Research (202) 898-6755 The amount of FDIC-guaranteed debt that can be issued by each eligible entity, or its “cap,” is based on the amount of its senior unsecured debt outstanding as of September 30, 2008, that matures on or before June Table I-C. Participation in Temporary Liquidity Guarantee Program September 30, 2009 Total Eligible Entities Transaction Account Guarantee Program Depository Institutions with Assets <= $10 Billion�������������������������������� 7,996 Depository Institutions with Assets > $10 Billion���������������������������������� 112 Total Depository Institutions*���������������������������������������������������������� 8,108 Debt Guarantee Program Depository Institutions with Assets <= $10 Billion�������������������������������� Depository Institutions with Assets > $10 Billion���������������������������������� Total Depository Institutions*���������������������������������������������������������� Bank and Thrift Holding Companies and Non-Insured Affiliates���������������������������������������������������������������������������� All Entities���������������������������������������������������������������������������������������� * Depository institutions include insured branches of foreign banks (IBAs). FDIC Quarterly 19 Number Opting In Percent Opting In 6,890 105 6,995 86.2% 93.8% 86.3% 7,996 112 8,108 4,284 104 4,388 53.6% 92.9% 54.1% 6,315 14,423 3,567 7,955 56.5% 55.2% 2009, Volume 3, No. 4 Table II-C. Cap on FDIC-Guaranteed Debt for Opt-In Entities Opt-In Entities with Senior Unsecured Debt Outstanding at 9/30/2008 Debt Amount as of Number 9/30/2008 Initial Cap September 30, 2009 (dollar figures in millions) Depository Institutions with Assets <= $10 Billion*������������������������������������ Depository Institutions with Assets > $10 Billion*�������������������������������������� Bank and Thrift Holding Companies, Non-Insured Affiliates��������� Total��������������������������������������������������������� Opt-In Depository Institutions with no Senior Unsecured Debt at 9/30/2008 2% Liabilities as of Number 9/30/2008 Total Entities Total Initial Cap 116 $3,532 $4,415 4168 $32,342 4,284 $36,757 44 295,879 369,849 60 25,576 104 395,425 88 248 398,008 697,420 497,511 871,775 3,479 7,707 N/A 57,918 3,567 7,955 497,511 929,692 * Depository institutions include insured branches of foreign banks (IBAs). N/A - Not applicable Table III-C. Transaction Account Guarantee Program December 31, 2008 (dollar figures in millions) Number of Non-Interest-Bearing Transaction Accounts over $250,000�������������������������������������������������������������� Amount in Non-Interest-Bearing Transaction .Accounts over $250,000�������������������������������������������������������������� Amount Guaranteed���������������������������������������������������������� March 31, 2009 June 30, 2009 September 30, 2009 % Change 09Q2-09Q3 527,021 586,459 667,186 647,787 -2.9% $854,379 $722,624 $859,577 $712,962 $907,134 $740,338 $922,881 $760,934 1.7% 2.8% Table IV-C. Debt Outstanding in Guarantee Program September 30, 2009 (dollar figures in millions) Insured Depository Institutions Assets <= $10 Billion������������������������������������������������������� Assets > $10 Billion��������������������������������������������������������� Bank and Thrift Holding Companies, Non-Insured Affiliates������������������������������������������������������������ All Issuers����������������������������������������������������������������������� Number Debt Outstanding Debt Outstanding Share of Cap Cap1 for Group 37 20 $1,631 57,356 $3,012 231,965 54.2% 24.7% 32 89 248,194 307,181 384,606 619,583 64.5% 49.6% The amount of FDIC-guaranteed debt that can be issued by each eligible entity, or its “cap,” is based on the amount of senior unsecured debt outstanding as of September 30, 2008. The cap for a depository institution with no senior unsecured debt outstanding at September 30, 2008, is set at 2 percent of total liabilities. See http://www2.fdic.gov/qbp/2008dec/tlgp2c.html for more information. 1 Table V-C. Fees Assessed Under TLGP Transaction Account Guarantee Program* Debt Guarantee Program (dollar figures in millions) Fourth Quarter 2008�������������������������������������������������������������� First Quarter 2009����������������������������������������������������������������� Second Quarter 2009������������������������������������������������������������ Third Quarter 2009���������������������������������������������������������������� Total Fees Assessed $3,437 3,433 Surcharges 1,413 Total��������������������������������������������������������������������������������� Total Fee Amount $3,437 3,433 385 Fees Collected 90 1,797 179 691 280 971 182 $8,973 $665 $9,639 $450 * Pro-rated payment in arrears Table VI-C. Term at Issuance of Debt Instruments Outstanding September 30, 2009 (dollar figures in millions) Term at Issuance 90 days or less�������������������������������������� 91-180 days������������������������������������������� 181-364 days����������������������������������������� 1-2 years����������������������������������������������� Over 2-3 years�������������������������������������� Over 3 years������������������������������������������ Total������������������������������������������������ Share of Total���������������������������������������� FDIC Quarterly Interbank Other Commercial Eurodollar Medium Interbank Paper Deposits Term Notes Deposits $1,763 3,634 408 0 0 1 5,805 1.9% $43 3 2 3 0 0 52 0.0% $0 0 3,400 58,791 76,447 133,985 272,623 88.7% 20 $119 972 1,488 37 0 4 2,621 0.9% Other Senior Unsecured Other Debt Term Note $0 0 1 0 3,352 3,713 7,065 2.3% $1 145 1,838 4,790 5,991 6,251 19,017 6.2% All Debt $1,926 4,754 7,137 63,622 85,789 143,953 307,181 Share by Term 0.6% 1.5% 2.3% 20.7% 27.9% 46.9% 2009, Volume 3, No. 4 Quarterly Banking Profile Notes to Users All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-ofperiod amount plus end-of-period amount plus any interim periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s) are included in average assets since the year-to-date income includes the results of all merged institutions. No adjustments are made for “purchase accounting” mergers. Growth rates represent the percentage change over a 12-month period in totals for institutions in the base period to totals for institutions in the current period. All data are collected and presented based on the location of each reporting institution’s main office. Reported data may include assets and liabilities located outside of the reporting institution’s home state. In addition, institutions may relocate across state lines or change their charters, resulting in an inter-regional or inter-industry migration, e.g., institutions can move their home offices between regions, and savings institutions can convert to commercial banks or commercial banks may convert to savings institutions. This publication contains financial data and other information for depository institutions insured by the Federal Deposit Insurance Corporation (FDIC). These notes are an integral part of this publication and provide information regarding the comparability of source data and reporting differences over time. Tables I-A through VIII-A. The information presented in Tables I-A through V-A of the FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and savings institutions. Tables VI-A (Derivatives) and VII-A (Servicing, Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered savings banks that file quarterly Call Reports. Table VIII-A (Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured institutions. Some tables are arrayed by groups of FDIC-insured institutions based on predominant types of asset concentration, while other tables aggregate institutions by asset size and geographic region. Quarterly and full-year data are provided for selected indicators, including aggregate condition and income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off information for loans outstanding and other assets. ACCOUNTING CHANGES Other-Than-Temporary Impairment When the fair value of an investment in a debt or equity security is less than its cost basis, the impairment is either temporary or other-than-temporary. To determine whether the impairment is other-than-temporary, an institution must apply other pertinent guidance such as paragraph 16 of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities; FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments; FSP FAS 115‑2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments; paragraph 6 of Accounting Principles Board Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock; Emerging Issues Task Force (EITF) Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets; and FSP EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20. Under FSP FAS 115-2 and FAS 124-2 issued on April 9, 2009, if the present value of cash flows expected to be collected on a debt security is less than its amortized cost basis, a credit loss exists. In this situation, if an institution does not intend to sell the security and it is not more likely than not that the institution will be required to sell the debt security before recovery of its amortized cost basis less any current- period credit loss, an other-than-temporary impairment has occurred. The amount of the total other-than-temporary impairment related to the credit loss must be recognized in earnings, but the amount of the total impairment related to other factors must be recognized in other comprehensive income, net of applicable taxes. Although the debt security would be written down to its fair value, its new amortized cost basis is the previous amortized cost basis less the other-thantemporary impairment recognized in earnings. In addition, if an institution intends to sell a debt security whose fair value is less than its amortized costs basis or it is more likely than not that the institution will be required to sell the debt Tables I-B through IV-B. A separate set of tables (Tables I-B through IV-B) provides comparative quarterly data related to the Deposit Insurance Fund (DIF), problem institutions, failed/assisted institutions, estimated FDIC-insured deposits, as well as assessment rate information. Depository institutions that are not insured by the FDIC through the DIF are not included in the FDIC Quarterly Banking Profile. U.S. branches of institutions headquartered in foreign countries and non-deposit trust companies are not included unless otherwise indicated. Efforts are made to obtain financial reports for all active institutions. However, in some cases, final financial reports are not available for institutions that have closed or converted their charters. DATA SOURCES The financial information appearing in this publication is obtained primarily from the Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income (Call Reports) and the OTS Thrift Financial Reports submitted by all FDIC-insured depository institutions. This information is stored on and retrieved from the FDIC’s Research Information System (RIS) data base. COMPUTATION METHODOLOGY Parent institutions are required to file consolidated reports, while their subsidiary financial institutions are still required to file separate reports. Data from subsidiary institution reports are included in the Quarterly Banking Profile tables, which can lead to double-counting. No adjustments are made for any double-counting of subsidiary data. Additionally, certain adjustments are made to the OTS Thrift Financial Reports to provide closer conformance with the reporting and accounting requirements of the FFIEC Call Reports. FDIC Quarterly 21 2009, Volume 3, No. 4 security before recovery of its amortized cost basis, an otherthan-temporary impairment has occurred and the entire difference between the security’s amortized cost basis and its fair value must be recognized in earnings. For any debt security held at the beginning of the interim period in which FSP FAS 115-2 and FAS 124-2 is adopted for which an other-than-temporary impairment loss has been previously recognized, if an institution does not intend to sell such a debt security and it is not more likely than not that the institution will be required to sell the debt security before recovery of its amortized cost basis, the institution should recognize the cumulative effect of initially applying the FSP as an adjustment to the interim period’s opening balance of retained earnings, net of applicable taxes, with a corresponding adjustment to accumulated other comprehensive income. The cumulative effect on retained earnings must be calculated by comparing the present value of the cash flows expected to be collected on the debt security with the security’s amortized cost basis as of the beginning of the interim period of adoption. FSP FAS 115-2 and FAS 124-2 are effective for interim and annual reporting periods ending after June 15, 2009. Early adoption of this FSP is permitted for periods ending after March 15, 2009, if certain conditions are met. Institutions are expected to adopt FSP FAS 115-2 and 124-2 for regulatory reporting purposes in accordance with the FSP’s effective date. 15, 2008. Similarly, FAS 160 is effective for fiscal years beginning on or after December 15, 2008. Thus, for institutions with calendar year fiscal years, these two accounting standards take effect in 2009. Beginning in March 2009, Institution equity capital and Noncontrolling interests are separately reported in arriving at Total equity capital. FASB Statement No. 157 Fair Value Measurements issued in September 2006 and FASB Statement No. 159 The Fair Value Option for Financial Assets and Financial Liabilities issued in February 2007 – both are effective in 2008 with early adoption permitted in 2007. FAS 157 defines fair value and establishes a framework for developing fair value estimates for the fair value measurements that are already required or permitted under other standards. FASB FSP 157-4, issued in April 2009, provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity for the asset or liability have significantly decreased. The FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. The FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Fair value continues to be used for derivatives, trading securities, and available-for-sale securities. Changes in fair value go through earnings for trading securities and most derivatives. Changes in the fair value of available-for-sale securities are reported in other comprehensive income. Available-for-sale securities and held-to-maturity debt securities are written down to fair value if impairment is other than temporary and loans held for sale are reported at the lower of cost or fair value. FAS 159 allows institutions to report certain financial assets and liabilities at fair value with subsequent changes in fair value included in earnings. In general, an institution may elect the fair value option for an eligible financial asset or liability when it first recognizes the instrument on its balance sheet or enters into an eligible firm commitment. FASB Statement No. 158 Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – issued in September 2006 requires a bank to recognize in 2007, and subsequently, the funded status of its postretirement plans on its balance sheet. An overfunded plan is recognized as an asset and an underfunded plan is recognized as a liability. An adjustment is made to equity as accumulated other comprehensive income (AOCI) upon application of FAS 158, and AOCI is adjusted in subsequent periods as net periodic benefit costs are recognized in earnings. FASB Statement No. 156 Accounting for Servicing of Financial Assets – issued in March 2006 and effective in 2007, requires all separately recognized servicing assets and liabilities to be initially measured at fair value and allows a bank the option to subsequently adjust that value by periodic revaluation and recognition of earnings or by periodic amortization to earnings. FASB Statement No. 155 Accounting for Certain Hybrid Financial Instruments – issued in February 2006, requires bifurcation of certain derivatives embedded in interests in securitized financial assets and permits fair value measurement (i.e., a fair value option) for any hybrid financial instrument that contains an embedded derivative that would otherwise require bifurcation under FASB Statement No. 133, Accounting for Extended Net Operating Loss Carryback Period for Small Businesses The American Recovery and Reinvestment Act of 2009, which was enacted on February 17, 2009, permits qualifying small businesses, including FDIC-insured institutions, to elect a net operating loss carryback period of three, four, or five years instead of the usual carryback period of two years for any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally accepted accounting principles, institutions may not record the effect of this tax change in their balance sheets and income statements for financial and regulatory reporting purposes until the period in which the law was enacted, i.e., the first quarter of 2009. Business Combinations and Noncontrolling (Minority) Interests In December 2007, the FASB issued Statement No. 141 (Revised), Business Combinations (FAS 141(R)), and Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements (FAS 160). Under FAS 141(R), all business combinations, including combinations of mutual entities, are to be accounted for by applying the acquisition method. FAS 160 defines a noncontrolling interest, also called a minority interest, as the portion of equity in an institution’s subsidiary not attributable, directly or indirectly, to the parent institution. FAS 160 requires an institution to clearly present in its consolidated financial statements the equity ownership in and results of its subsidiaries that are attributable to the noncontrolling ownership interests in these subsidiaries. FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December FDIC Quarterly 22 2009, Volume 3, No. 4 Quarterly Banking Profile Derivative Instruments and Hedging Activities (FAS 133). In addition, FAS 155 clarifies which interest-only and principalonly strips are not subject to FAS 133. Purchased Impaired Loans and Debt Securities – Statement of Position 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer. The SOP applies to loans and debt securities acquired in fiscal years beginning after December 15, 2004. In general, this Statement of Position applies to “purchased impaired loans and debt securities” (i.e., loans and debt securities that a bank has purchased, including those acquired in a purchase business combination, when it is probable, at the purchase date, that the bank will be unable to collect all contractually required payments receivable). Banks must follow Statement of Position 03-3 for Call Report purposes. The SOP does not apply to the loans that a bank has originated, prohibits “carrying over” or creation of valuation allowances in the initial accounting, and any subsequent valuation allowances reflect only those losses incurred by the investor after acquisition. GNMA Buy-back Option – If an issuer of GNMA securities has the option to buy back the loans that collateralize the GNMA securities, when certain delinquency criteria are met, FASB Statement No. 140 requires that loans with this buyback option must be brought back on the issuer’s books as assets. The rebooking of GNMA loans is required regardless of whether the issuer intends to exercise the buy-back option. The banking agencies clarified in May 2005 that all GNMA loans that are rebooked because of delinquency should be reported as past due according to their contractual terms. FASB Interpretation No. 46 – The FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities, in January 2003 and revised it in December 2003. Generally, banks with variable interests in variable interest entities created after December 31, 2003, must consolidate them. The timing of consolidation varies with certain situations with application as late as 2005. The assets and liabilities of a consolidated variable interest entity are reported on a line-by-line basis according to the asset and liability categories shown on the bank’s balance sheet, as well as related income items. Most small banks are unlikely to have any “variable interests” in variable interest entities. FASB Interpretation No. 48 on Uncertain Tax Positions – FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), was issued in June 2006 as an interpretation of FASB Statement No. 109, Accounting for Income Taxes. Under FIN 48, the term “tax position” refers to “a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities.” FIN 48 further states that a “tax position can result in a permanent reduction of income taxes payable, a deferral of income taxes otherwise currently payable to future years, or a change in the expected realizability of deferred tax assets.” FIN 48 was originally issued effective for fiscal years beginning after December 15, 2006. Banks must adopt FIN 48 for Call Report purposes in accordance with the interpretation’s effective date except as follows. On December 31, 2008, the FASB decided to defer the effective date of FIN 48 for eligible nonpublic enterprises and to require those enterprises to adopt FIN 48 for annual periods beginning after December 15, 2008. A nonpublic enterprise under certain conditions is eligible for deferral, FDIC Quarterly even if it opted to issue interim or quarterly financial information in 2007 under earlier guidance that reflected the adoption of FIN 48. FASB Statement No. 123 (Revised 2004) and Share-Based Payments – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2008dec/qbpnot.html FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2008dec/ qbpnot.html DEFINITIONS (in alphabetical order) All other assets – total cash, balances due from depository institutions, premises, fixed assets, direct investments in real estate, investment in unconsolidated subsidiaries, customers’ liability on acceptances outstanding, assets held in trading accounts, federal funds sold, securities purchased with agreements to resell, fair market value of derivatives, and other assets. All other liabilities – bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities. Assessment base – assessable deposits consist of DIF deposits (deposits insured by the FDIC Deposit Insurance Fund) in banks’ domestic offices with certain adjustments). Assets securitized and sold – total outstanding principal balance of assets securitized and sold with servicing retained or other seller- provided credit enhancements. Capital Purchase Program (CPP) – As announced in October 2008 under the TARP, the Treasury Department purchase of noncumulative perpetual preferred stock and related warrants that is treated as Tier 1 capital for regulatory capital purposes is included in “Total equity capital.” Such warrants to purchase common stock or noncumulative preferred stock issued by publicly-traded banks are reflected as well in “Surplus.” Warrants to purchase common stock or noncumulative preferred stock of not-publicly-traded bank stock classified in a bank’s balance sheet as “Other liabilities.” Construction and development loans – includes loans for all property types under construction, as well as loans for land acquisition and development. Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated subsidiaries, less goodwill and other ineligible intangible assets. The amount of eligible intangibles (including servicing rights) included in core capital is limited in accordance with supervisory capital regulations. Cost of funding earning assets – total interest expense paid on deposits and other borrowed money as a percentage of average earning assets. Credit enhancements – techniques whereby a company attempts to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be associated with a given issuance. Deposit Insurance Fund (DIF) – The Bank (BIF) and Savings Association (SAIF) Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform Act to form the DIF. 23 2009, Volume 3, No. 4 Derivatives notional amount – The notional, or contractual, amounts of derivatives represent the level of involvement in the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent the amounts used to calculate contractual cash flows to be exchanged. Derivatives credit equivalent amount – the fair value of the derivative plus an additional amount for potential future credit exposure based on the notional amount, the remaining maturity and type of the contract. Failed/assisted institutions – An institution fails when regulators take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or another healthy institution. This action may require the FDIC to provide funds to cover losses. An institution is defined as “assisted” when the institution remains open and receives assistance in order to continue operating. Fair Value – the valuation of various assets and liabilities on the balance sheet—including trading assets and liabilities, available-for-sale securities, loans held for sale, assets and liabilities accounted for under the fair value option, and foreclosed assets—involves the use of fair values. During periods of market stress, the fair values of some financial instruments and nonfinancial assets may decline. FHLB advances – all borrowings by FDIC insured institutions from the Federal Home Loan Bank System (FHLB), as reported by Call Report filers and by TFR filers. Goodwill and other intangibles – Intangible assets include servicing rights, purchased credit card relationships, and other identifiable intangible assets. Goodwill is the excess of the purchase price over the fair market value of the net assets acquired, less subsequent impairment adjustments. Other intangible assets are recorded at fair value, less subsequent quarterly amortization and impairment adjustments. Loans secured by real estate – includes home equity loans, junior liens secured by 1-4 family residential properties, and all other loans secured by real estate. Loans to individuals – includes outstanding credit card balances and other secured and unsecured consumer loans. Long-term assets (5+ years) – loans and debt securities with remaining maturities or repricing intervals of over five years. Maximum credit exposure – the maximum contractual credit exposure remaining under recourse arrangements and other seller-provided credit enhancements provided by the reporting bank to securitizations. Mortgage-backed securities – certificates of participation in pools of residential mortgages and collateralized mortgage obligations issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below. Net charge-offs – total loans and leases charged off (removed from balance sheet because of uncollectibility), less amounts recovered on loans and leases previously charged off. Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to depositors and other creditors, expressed as a percentage of average earning assets. No adjustments are made for interest income that is tax exempt. Net loans to total assets – loans and lease financing receivables, net of unearned income, allowance and reserves, as a percent of total assets on a consolidated basis. Net operating income – income excluding discretionary transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from operating income have been adjusted to exclude the portion applicable to securities gains (or losses). Noncurrent assets – the sum of loans, leases, debt securities, and other assets that are 90 days or more past due, or in nonaccrual status. Derivatives transaction types: Futures and forward contracts – contracts in which the buyer agrees to purchase and the seller agrees to sell, at a specified future date, a specific quantity of an underlying variable or index at a specified price or yield. These contracts exist for a variety of variables or indices, (traditional agricultural or physical commodities, as well as currencies and interest rates). Futures contracts are standardized and are traded on organized exchanges which set limits on counterparty credit exposure. Forward contracts do not have standardized terms and are traded over the counter. Option contracts – contracts in which the buyer acquires the right to buy from or sell to another party some specified amount of an underlying variable or index at a stated price (strike price) during a period or on a specified future date, in return for compensation (such as a fee or premium). The seller is obligated to purchase or sell the variable or index at the discretion of the buyer of the contract. Swaps – obligations between two parties to exchange a series of cash flows at periodic intervals (settlement dates), for a specified period. The cash flows of a swap are either fixed, or determined for each settlement date by multiplying the quantity (notional principal) of the underlying variable or index by specified reference rates or prices. Except for currency swaps, the notional principal is used to calculate each payment but is not exchanged. Derivatives underlying risk exposure – the potential exposure characterized by the level of banks’ concentration in particular underlying instruments, in general. Exposure can result from market risk, credit risk, and operational risk, as well as, interest rate risk. Domestic deposits to total assets – total domestic office deposits as a percent of total assets on a consolidated basis. Earning assets – all loans and other investments that earn interest or dividend income. Efficiency ratio – noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net operating revenues that are absorbed by overhead expenses, so that a lower value indicates greater efficiency. Estimated insured deposits – In general, insured deposits are total domestic deposits minus estimated uninsured deposits. Beginning March 31, 2008, for institutions that file Call reports, insured deposits are total assessable deposits minus estimated uninsured deposits. 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 standard maximum FDIC deposit insurance amount. FDIC Quarterly 24 2009, Volume 3, No. 4 Quarterly Banking Profile Noncurrent loans & leases – the sum of loans and leases 90 days or more past due, and loans and leases in nonaccrual status. Number of institutions reporting – the number of institutions that actually filed a financial report. Other borrowed funds – federal funds purchased, securities sold with agreements to repurchase, demand notes issued to the U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and trading liabilities, less revaluation losses on assets held in trading accounts. Other real estate owned – primarily foreclosed property. Direct and indirect investments in real estate ventures are excluded. The amount is reflected net of valuation allowances. For institutions that file a Thrift Financial Report (TFR), the valuation allowance subtracted also includes allowances for other repossessed assets. Also, for TFR filers the components of other real estate owned are reported gross of valuation allowances. Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their losses) compared to the same period a year earlier. “Problem” institutions – Federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. “Problem” institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either a “4” or “5.” The number and assets of “problem” institutions are based on FDIC composite ratings. Prior to March 31, 2008, for institutions whose primary federal regulator was the OTS, the OTS composite rating was used. Recourse – an arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank’s claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Reserves for losses – the allowance for loan and lease losses on a consolidated basis. Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. Excludes restructured loans and leases that are not in compliance with the modified terms. Retained earnings – net income less cash dividends on common and preferred stock for the reporting period. Return on assets – net income (including gains or losses on securities and extraordinary items) as a percentage of average total assets. The basic yardstick of bank profitability. Return on equity – net income (including gains or losses on securities and extraordinary items) as a percentage of average total equity capital. FDIC Quarterly Risk-based capital groups – definition: (Percent) Tier 1 Risk-Based Capital* Total Risk-Based Capital* Well-Capitalized Adequately capitalized Undercapitalized Significantly undercapitalized Critically undercapitalized Tier 1 Leverage Tangible Equity ≥10 and ≥6 and ≥5 – ≥8 ≥6 and and ≥4 ≥3 and and ≥4 ≥3 – – <6 or <3 or <3 – – and >2 ≤2 – * As a percentage of risk-weighted assets. Risk Categories and Assessment Rate Schedule – The current risk categories became effective January 1, 2007. Capital ratios and supervisory ratings distinguish one risk category from another. The following table shows the relationship of risk categories (I, II, III, IV) to capital and supervisory groups as well as the initial base assessment rates (in basis points), effective April 1, 2009 for each risk category. Supervisory Group A generally includes institutions with CAMELS composite ratings of 1 or 2; Supervisory Group B generally includes institutions with a CAMELS composite rating of 3; and Supervisory Group C generally includes institutions with CAMELS composite ratings of 4 or 5. For purposes of risk-based assessment capital groups, undercapitalized includes institutions that are significantly or critically undercapitalized. Supervisory Group Capital Category 1. Well Capitalized 2. Adequately Capitalized 3. Undercapitalized A I 12–16 bps II 22 bps B C II 22 bps III 32 bps III 32 bps IV 45 bps Effective April 1, 2009, the initial base assessment rates are 12 to 45 basis points. An institution’s total assessment rate may be less than or greater than its initial base assessment rate as a result of additional risk adjustments. The base assessment rates for most institutions in Risk Category I are based on a combination of financial ratios and CAMELS component ratings (the financial ratios method). For large institutions in Risk Category I (generally those with at least $10 billion in assets) that have long-term debt issuer ratings, assessment rates are determined by equally weighting the institution’s CAMELS component ratings, long-term debt issuer ratings, and the financial ratios method assessment rate. For all large Risk Category I institutions, additional risk factors are considered to determine whether assessment rates should be adjusted. This additional information includes market data, financial performance measures, considerations of the ability of an institution to withstand financial stress, and loss severity indicators. Any adjustment is limited to no more than one basis point. 25 2009, Volume 3, No. 4 Effective April 1, 2009, the FDIC introduced three possible adjustments to an institution’s initial base assessment rate: (1) a decrease of up to 5 basis points for long-term unsecured debt and, for small institutions, a portion of Tier 1 capital; (2) an increase not to exceed 50 percent of an institution’s assessment rate before the increase for secured liabilities in excess of 25 percent of domestic deposits; and (3) for nonRisk Category I institutions, an increase not to exceed 10 basis points for brokered deposits in excess of 10 percent of domestic deposits. After applying all possible adjustments, minimum and maximum total base assessment rates for each risk category are as follows: (book value), and securities designated as “available-for-sale,” reported at fair (market) value. Securities gains (losses) – realized gains (losses) on held-to- maturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers also include gains (losses) on the sales of assets held for sale. Seller’s interest in institution’s own securitizations – the reporting bank’s ownership interest in loans and other assets that have been securitized, except an interest that is a form of recourse or other seller-provided credit enhancement. Seller’s interests differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is generally equal to the total principal amount of the pool of assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the form of securities issued to investors. Subchapter S Corporation – A Subchapter S corporation is treated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any federal income taxes at the corporate level. This can have the effect of reducing institutions’ reported taxes and increasing their after-tax earnings. Temporary Liquidity Guarantee Program (TLGP) – was approved by the FDIC Board on October 13, 2008. The TLGP was designed to help relieve the crisis in the credit markets by giving banks access to liquidity during a time of global financial distress. Participation in the TLGP is voluntary. The TLGP has two components: Transaction Account Guarantee Program (TAGP) – provides a full guarantee of non-interest-bearing deposit transaction accounts above $250,000, at depository institutions that elected to participate in the program. On August 26, 2009, the FDIC Board voted to extend the TAGP six months beyond its original expiration date to June 30, 2010. Debt Guarantee Program (DGP) – provides a full guarantee of senior unsecured debt1 issued by eligible institutions after October 14, 2008. Initially, debt issued before June 30, 2009, and maturing on or before June 30, 2012, could be guaranteed. On March 17, 2009, the deadline for issuance under the program was extended to October 31, 2009, and the expiration of the guarantee was set at the earlier of maturity of the debt or December 31, 2012. Institutions eligible for participation in the debt guarantee program include insured depository institutions, U.S. bank holding companies, certain U.S. savings and loan holding companies, and other affiliates of an insured depository institution that the FDIC designates as eligible entities. The FDIC Board adopted a final rule on October 20, 2009, that established a limited six-month emergency guarantee facility upon expiration of the DGP. Trust assets – market value, or other reasonably available value of fiduciary and related assets, to include marketable securities, and other financial and physical assets. Common physical assets held in fiduciary accounts include real estate, Total Base Assessment Rates* Risk Category I Risk Category II Risk Category III Risk Category IV Initial base assessment rate 12–16 22 32 45 Unsecured debt adjustment -5 – 0 -5–0 -5 – 0 -5– 0 Secured liability adjustment 0 – 8 0 –11 0 –16 0 –22.5 Brokered deposit adjustment – 0 –10 0 –10 0 –10 Total base assessment rate 7–24.0 17–43.0 27–58.0 40–77.5 *All amounts for all risk categories are in basis points annually. Total base rates that are not the minimum or maximum rate will vary between these rates. Beginning in 2007, each institution is assigned a risk-based rate for a quarterly assessment period near the end of the quarter following the assessment period. Payment is generally due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are effective for assessment purposes as of the examination transmittal date. For institutions with long-term debt issuer ratings, changes in ratings are effective for assessment pur poses as of the date the change was announced. Special Assessment – On May 22, 2009, the FDIC board approved a final rule that imposed a 5 basis point special assessment as of June 30, 2009. The special assessment was levied on each insured depository institution’s assets minus its Tier 1 capital as reported in its report of condition as of June 30, 2009. The special assessment will be collected September 30, 2009, at the same time that the risk-based assessment for the second quarter of 2009 is collected. The special assessment for any institution was capped at 10 basis points of the institution’s assessment base for the second quarter of 2009 risk-based assessment. Risk-weighted assets – assets adjusted for risk-based capital definitions which include on-balance-sheet as well as off- balance-sheet items multiplied by risk-weights that range from zero to 200 percent. A conversion factor is used to assign a balance sheet equivalent amount for selected off-balancesheet accounts. Securities – excludes securities held in trading accounts. Banks’ securities portfolios consist of securities designated as “held-to-maturity,” which are reported at amortized cost FDIC Quarterly Senior unsecured debt generally includes term Federal funds purchased, promissory notes, commercial paper, unsubordinated unsecured notes, certificates of deposit (CDs) standing to the credit of a bank, and U.S. dollar denominated bank deposits owed to an insured depository institution. 1 26 2009, Volume 3, No. 4 Quarterly Banking Profile equipment, collectibles, and household goods. Such fiduciary assets are not included in the assets of the financial institution. Unearned income & contra accounts – unearned income for Call Report filers only. Unused loan commitments – includes credit card lines, home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused commitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for sale, which are accounted for as derivatives on the balance sheet.) FDIC Quarterly Volatile liabilities – the sum of large-denomination time deposits, foreign-office deposits, federal funds purchased, securities sold under agreements to repurchase, and other borrowings. Yield on earning assets – total interest, dividend, and fee income earned on loans and investments as a percentage of average earning assets. 27 2009, Volume 3, No. 4