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FDIC Quarterly
Quarterly Banking Profile:
Third Quarter 2013
Community Bank Developments
in 2012

2013, Volume 7, Number 4

The FDIC Quarterly is published by the Division of Insurance and Research of the Federal Deposit
Insurance Corporation and contains a comprehensive summary of the most current financial results
for the banking industry. Feature articles appearing in the FDIC Quarterly range from timely analysis
of economic and banking trends at the national and regional level that may affect the risk exposure of
FDIC-insured institutions to research on issues affecting the banking system and the development of
regulatory policy.
Single copy subscriptions of the FDIC Quarterly can be obtained through the FDIC Public Information Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. E-mail requests should be
sent to publicinfo@fdic.gov. Change of address information also should be submitted to the Public
Information Center.
The FDIC Quarterly is available online by visiting the FDIC website at www.fdic.gov. To receive
e-mail notification of the electronic release of the FDIC Quarterly and the individual feature articles,
subscribe at www.fdic.gov/about/subscriptions/index.html.

Chairman

Martin J. Gruenberg

Director, Division of Insurance
and Research

Diane Ellis

Executive Editors

Richard A. Brown
Maureen E. Sweeney

Managing Editors

Matthew Green
Jack Reidhill
Philip A. Shively

Editors

Peggi Gill
Frank Solomon

Publication Manager

Lynne Montgomery

Media Inquiries

(202) 898-6993

FDIC Quarterly
2013, Volume 7, Number 4

Quarterly Banking Profile: Third Quarter 2013
FDIC-insured institutions reported aggregate net income of $36 billion in the third quarter of 2013, a
$1.5 billion (3.9 percent) decline from the $37.5 billion in profits that the industry reported a year earlier.
This is the first time in 17 quarters—since the second quarter of 2009—that earnings registered a year-overyear decline. The earnings decline was mainly attributable to a $4 billion increase in litigation expenses at
one institution. Lower revenue from reduced mortgage activity and lower gains on asset sales also contributed to the reduction in earnings. Half of the 6,891 insured institutions reporting had year-over-year growth
in earnings, while half reported declines. The proportion of banks that were unprofitable fell to 8.6 percent,
from 10.7 percent a year earlier. See page 1.

Insurance Fund Indicators
Estimated insured deposit growth was flat in the third quarter of 2013. The DIF reserve ratio was 0.68
percent at September 30, 2013, up from 0.64 percent at June 30, 2013, and 0.35 percent at September 30,
2012. Six FDIC-insured institutions failed during the quarter. See page 15.

Community Bank Developments in 2012
This paper updates the 2012 FDIC Community Banking Study to reflect developments in the structure and
performance of U.S. community banks through the end of 2012. It finds that while the community banking
sector changed little in structural terms during the year, community banks showed continued improvement
in financial performance following the disruptions associated with the recent financial crisis. Problem loans
and failures declined among community banks in 2012, while their pretax profitability was the highest since
2007. While community banks hold just 14 percent of industry assets, they make up almost 95 percent of all
U.S. banking organizations. The sector continues to hold nearly half of the industry’s small loans to farms
and businesses, as well as the majority of deposits in U.S. rural and micropolitan counties. See page 27.

The views expressed are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance
Corporation. Some of the information used in the preparation of this publication was obtained from publicly available sources
that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the
Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited.
Please provide the FDIC’s Division of Insurance and Research with a copy of any publications containing reprinted material.

Quarterly Banking Profile

Third Quarter 2013

INSURED INSTITUTION PERFORMANCE
Quarterly Net Income Posts First Year-Over-Year Decline in Over 4 Years
■	 Litigation Expense, Lower Revenues Contribute to Earnings Decline
■	 Net Charge-Offs Fall to 6-Year Low; Loan-Loss Provisions Drop to 14-Year Low
■	 Mortgage Lending Declines After Rise in Interest Rates
■	

Earnings Are $1.5 Billion Lower Than a Year Ago

Higher Interest Rates Lead to Revenue Decline

Lower revenue from mortgage banking and a large
expense for litigation reserves combined to limit the net
income of FDIC-insured institutions to $36 billion in
the third quarter. This is $1.5 billion (3.9 percent) less
than banks earned a year earlier, and represents the first
time since second quarter 2009 that the industry has
reported a year-over-year decline in quarterly earnings.
The increase in medium- and long-term interest rates in
second quarter 2013 lowered the market values of some
fixed-rate assets. The higher rates reduced demand for
mortgage refinancings, leading to a drop in mortgage
origination and sales activity in the third quarter. Lower
values and reduced origination volume were reflected in
a decline in income from loan sales. Realized gains on
investment securities were also well below year-ago
levels. Net interest margins benefited from the wider
gap between short-term and longer-term interest rates,
but average margins and total net interest income were
still lower than in third quarter 2012.

Net operating revenue—the sum of total noninterest
income and net interest income—declined by $6.1
billion (3.6 percent) from third quarter 2012. Noninterest income was $4.7 billion (7.4 percent) lower, as
income from sale, securitization, and servicing of 1-to-4
family mortgage loans at major mortgage lenders fell by
$4 billion (45.2 percent).1 Noninterest income from
changes in the fair values of financial instruments was
$2.2 billion (54.6 percent) lower than a year ago. Net
interest income was $1.3 billion (1.3 percent) lower
than in third quarter 2012, as interest income declined
more rapidly than interest expense. However, net interest income was $714 million (0.7 percent) higher than
in second quarter 2013, only the second time in the
last seven quarters that there has been a consecutivequarter increase. Noninterest expenses were $2 billion

Chart 1

Chart 2

Billions of Dollars

Quarterly information on origination and sales activity is reported by
insured institutions with more than $1 billion in assets and by smaller
institutions with quarterly origination volumes greater than $10 million
or quarter-end mortgages held for sale in excess of $10 million.
1

Quarterly Revenue and Loan-Loss Provision

Quarterly Net Income

Billions of Dollars
$180

$50
$40

35.2

$30
17.4

$20
$10

-$20

28.7 28.5
21.4

34.8 34.4

40.3
34.5

38.1 36.0

$140

25.3

$120

-12.6

-$30

$80
$60
Securities and Other Gains/Losses, Net
Net Operating Income

$40
$20

-$40
-$50

Quarterly Net Operating Revenue*

$100
-1.7

-6.1

Quarterly Loan-Loss Provision

$160

2.1

$0
-$10

20.9

23.8

37.5

$0
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2012
2010
2009
2013
2011

FDIC Quarterly

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2011
2012
2013
2009
2010

* Net operating revenue = net interest income + noninterest income.

1

2013, Volume 7, No. 4

(1.9 percent) higher than a year ago, as one large institution reported a $4 billion year-over-year increase in
­litigation expenses. Premises and fixed asset expenses
fell by $182 million (1.6 percent), and salary and
­benefit expenses were only $55 million (0.1 percent)
higher than a year ago. The one significant positive
contribution to third-quarter earnings came from lower
loan-loss provisions. Banks set aside $5.8 billion in
provisions in the quarter, down $8.8 billion (60.4
percent) from third quarter 2012. This is the smallest
quarterly loss provision reported by the industry since
third quarter 1999.

Residential Real Estate Loans Post Large Decline in
Noncurrent Balances
The amount of loans and leases that were ­noncurrent—
90 days or more past due or in nonaccrual status—
declined by $18.3 billion (7.7 percent) between June 30
and September 30. Noncurrent levels improved across
all major loan categories. Noncurrent 1-to-4 family
­residential real estate loans fell by $13.2 billion (7.9
percent) during the quarter, noncurrent nonfarm
nonresidential real estate loans declined by $2.3 billion
(9 percent), and noncurrent construction and development loans fell by $2 billion (16.4 percent).

Loan Losses Decline by Almost One-Half

Decline in Noncurrent Loan Balances Outpaces
Reserve Reductions

Net charge-offs totaled $11.7 billion in the quarter,
down $10.5 billion (47.4 percent) from third quarter
2012. This is the lowest quarterly total for charge-offs
since third quarter 2007. All major loan categories had
year-over-year declines in charge-offs. Net charge-offs of
1-to-4 family residential real estate loans fell by $7.1
billion (72.5 percent), with charge-offs on home equity
lines of credit declining by $3 billion (72.5 percent),
and other 1-to-4 family residential real estate chargeoffs falling by $4.1 billion (72.5 percent).

Banks reduced their loan-loss reserves by $6.5 billion
(4.3 percent) in the third quarter, as net charge-offs of
$11.7 billion took more out of reserves than the $5.8
billion in provisions that banks put into their reserves.
This is the 14th quarter in a row that loss reserves have
declined. At the end of the quarter, reserves represented
1.83 percent of total loans and leases, the lowest level
since mid-year 2008, and well below the peak of 3.51
percent at the end of first quarter 2010. Reserve coverage of noncurrent loans increased for the fourth quarter
in a row—from 62.3 percent to 64.5 percent—as a
result of the $18.3 billion decline in noncurrent loan
balances.

Chart 3

Chart 4

Quarterly Noninterest Income From Sale,
Securitization, and Servicing of 1-to-4 Family
Residential Mortgage Loans*

Billions of Dollars
$10
$8

7.1
4.7

$4

5.0

8.8
8.1 7.9 8.1
7.3

6.2
5.6
4.7 4.4 4.3
4.7
3.7
3.6 3.7
3.2

4.0
3.5
3.0

4.8

1.7
1.2 1.50.9
0.9

$2 1.51.2
$0
-$2

2.5

Assets < $1 Billion

2.0

Assets $1 Billion - $10 Billion

1.5

Assets > $100 Billion

Assets $10 Billion - $100 Billion
All Insured Institutions

1.0

-0.8

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2008
2009
2011
2007
2010
2012
2013

0.5
0.0

*Beginning in Q4 2008, includes income from HELOCs. Call Reporters only, subject to
de minimis reporting conditions.

FDIC Quarterly

Quarterly Net Interest Margins

4.5
8.0

$6

Percent

2

2007

2008

2009

2010

2011

2012

2013

2013, Volume 7, No. 4

Quarterly Banking Profile
(3.3 percent), and loans to states and municipalities
increased by $7.5 billion (7.3 percent). In contrast,
home equity lines of credit fell by $10.9 billion (2.1
percent), while balances of other 1-to-4 family residential real estate loans declined by $13.7 billion (0.7
percent). At major mortgage lenders, originations of
1-to-4 family residential real estate loans were $136.8
billion (30.1 percent) lower than in in the previous
quarter, while sales were down $114.7 billion (23.8
percent). Banks reported a $204.7 billion (21.7 percent)
increase in balances due from Federal Reserve banks.
These balances now exceed $1.1 trillion, and represent
7.9 percent of industry assets.

Equity Capital Resumes Growth After Drop in
Second Quarter
Equity capital increased by $13.9 billion (0.9 percent),
after declining by $18.1 billion in the previous quarter,
as retained earnings contributed $13.1 billion to equity
growth. Insured institutions declared $22.9 billion in
dividends in the quarter, an increase of $2.4 billion
(11.9 percent) compared with third quarter 2012. A
decline in unrealized gains on securities held for sale
reduced equity by $1.9 billion, much less than the $32.6
billion reduction in equity that lower unrealized gains
produced in second quarter 2012. At the end of the
quarter, almost 98 percent of all insured institutions,
representing 99.8 percent of total industry assets, met or
exceeded the requirements for the highest regulatory
capital category, as defined for Prompt Corrective
Action purposes.

Large Denomination Deposits Register
Strong Increase
Deposits increased by $247.8 billion (2.3 percent).
Most of the growth—$235.6 billion—occurred in
accounts with balances greater than $250,000. Deposits in foreign offices increased by $43.6 billion (3.1
percent). Noninterest-bearing deposits accounted for
$103.1 billion of the $204.2 billion increase in domestic deposits. At the end of the quarter, deposits funded
75.6 percent of industry assets, the highest level since
mid-year 1993. Nondeposit liabilities declined by
$70.6 billion (3.5 percent) as banks reduced their securities sold under repurchase agreements by $30 billion
(7.9 percent).

Loan Balances Rise by $69.7 Billion
Assets increased by $191.1 billion (1.3 percent) in the
quarter. Loan and lease balances rose for the 8th time in
the last ten quarters, increasing by $69.7 billion (0.9
percent). Apart from 1-to-4 family residential real
estate loans, all major loan categories registered growth
in the quarter. Auto loans increased by $10.6 billion
(3.2 percent), while credit card balances rose by $6.8
billion (1 percent). Real estate loans secured by multifamily residential properties increased by $8.1 billion

Chart 5

Chart 6
Noncurrent Loan Rate and Quarterly Net Charge-Off Rate

Year-Over-Year Change in Quarterly
Loan-Loss Provisions

Percent
6

Billions of Dollars
$0

Noncurrent Loan Rate

5

-$5
-$10

-8.8

4

-$15

3

-$20
2

-$25
-$30
-$35

1

-30.7
1

FDIC Quarterly

2

3
2011

4

1

2

3
2012

4

1

2

Quarterly Net Charge-Off Rate

0

3
2013

2006

3

2007

2008

2009

2010

2011

2012

2013

2013, Volume 7, No. 4

“problem” banks fell from $192.5 billion to $174.2
billion. This is the 10th consecutive quarter that the
number of “problem” banks has fallen. Insured institutions reported 2,080,371 full-time equivalent employees, down from 2,097,284 in second quarter 2013 and
2,105,843 in third quarter 2012.

Trend in Bank Failures Continues to Improve
The number of insured commercial banks and savings
institutions reporting quarterly financial results fell to
6,891, from 6,940 in the previous quarter. During the
third quarter, 43 insured institutions were absorbed in
mergers, while six insured institutions failed. One new
reporting institution was added as a credit union
converted to an FDIC-insured cooperative savings
bank. The number of banks on the FDIC’s “Problem
List” declined from 553 to 515, and total assets of

Author:

Chart 7

Ross Waldrop, Senior Banking Analyst
Division of Insurance and Research
(202) 898-3951

Chart 8
Quarterly Change in Loan Balances

Reserve Coverage Ratio*
Billions of Dollars
$450
Coverage Ratio
(Percent)
$400

Billions of Dollars

Percent
180
Noncurrent Loans & Leases
($ Billions)
160

$300

$300

120

$250

100

$200

80

$100

$100
$0

2007

2008

2009

2010

2011

* Loan-loss reserves to noncurrent loans & leases.

2012

-116 -109
-140

-$150
-$200

2013

Chart 9

-37

-126

-210

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2012
2013
2007
2009
2011
2010
2008

Chart 10
Originations of Closed-End 1-to-4 Family
Residential Mortgages for Sale*

Quarterly Activity (Billions of Dollars)
$600

Quarterly Changes in the Number of
Troubled Institutions
200

Total Originations

175

Total Sales

50

150

$500
$400

100

$300

75

$200

25

50
0

$100

-25
1

2 3
2010

4

1

2 3
2011

4

1

2 3
2012

4

1

*Beginning in Q1 2012, data include new Call Report filers that previously filed
Thrift Financial Reports (TFRs).

FDIC Quarterly

45

Quarterly Failures
Net Quarterly Change in
Number of Problem Banks

24

125

$0

-133

-107

*FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitized
loan balances back onto banks’ balance sheets in the first quarter of 2010. Although the total
amount consolidated cannot be precisely quantified, the industry would have reported a
decline in loan balances for the quarter absent this change in accounting standards.

0

$0
2006

-7 -14
-63

-$100

-$250

73 70

65
24

-6

-$50

20

$50

28

118

102

67

61

$50 43

40

Loan-Loss Reserves ($ Billions)

134

$150

60

$150

221*

203

189

$200

140

$350

237

$250

41

12
9

21

2 54 81
53
2
27
14

111

136

45

150

41
73

54

30

31 24 26 22 26 18 16 15 12 8
4 12 6
4
-23 -21 -31
-38
-38
-39
-40
-43
-41
-59

-50

2 3
2013

-75

4

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2008
2009
2010
2011
2012
2013

2013, Volume 7, 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��������������������������������������������������������������������������������������

2013**
1.06
9.45
9.40
1.75
0.72
2.62
3.26
10.67
6,891
5,937
954
7.95
515
$174
22
0

2012**
1.02
9.02
9.28
2.37
1.14
2.98
3.45
12.52
7,181
6,168
1,013
10.79
694
$262
43
0

2012
1.00
8.91
9.15
2.20
1.10
4.02
3.42
17.78
7,083
6,096
987
10.93
651
$233
51
0

2011
0.88
7.79
9.07
2.61
1.55
4.30
3.60
43.58
7,357
6,291
1,066
16.22
813
$319
92
0

2010
0.65
5.85
8.89
3.11
2.55
1.77
3.76
1594.70
7,658
6,530
1,128
22.15
884
$390
157
0

2009
-0.08
-0.73
8.60
3.37
2.52
-5.45
3.49
-155.98
8,012
6,840
1,172
30.84
702
$403
140
8

2008
0.03
0.35
7.47
1.91
1.29
6.19
3.16
-90.71
8,305
7,087
1,218
24.89
252
$159
25
5

* 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
2013
6,891
2,080,371

2nd Quarter
2013
6,940
2,097,284

3rd Quarter
2012
7,181
2,105,843

%Change
12Q3-13Q3
-4.0
-1.2

$14,596,235
4,053,172
1,841,445
1,092,487
206,145
517,749
1,571,822
1,331,685
677,074
67,996
779,222
1,857
7,802,040
142,572
7,659,468
2,957,637
31,823
367,113
3,580,194

$14,405,155
4,046,909
1,855,188
1,083,287
202,506
528,652
1,563,440
1,310,292
670,289
65,072
748,474
1,831
7,732,356
149,042
7,583,314
2,945,331
32,615
367,077
3,476,817

$14,223,318
4,087,033
1,889,348
1,058,001
210,435
567,481
1,454,634
1,295,525
668,309
65,451
677,339
1,925
7,578,057
167,010
7,411,046
2,986,431
41,038
364,142
3,420,660

2.6
-0.8
-2.5
3.3
-2.0
-8.8
8.1
2.8
1.3
3.9
15.0
-3.6
3.0
-14.6
3.4
-1.0
-22.5
0.8
4.7

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

14,596,235
11,028,212
9,599,681
1,428,531
1,311,801
108,673
510,648
1,636,901
1,622,084

14,405,154
10,780,396
9,395,455
1,384,942
1,328,796
113,621
559,300
1,623,041
1,608,225

14,223,318
10,504,236
9,060,211
1,444,025
1,355,877
112,096
613,478
1,637,631
1,619,234

2.6
5.0
6.0
-1.1
-3.3
-3.1
-16.8
0.0
0.2

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���������������������������������������������������������������������������������������

73,138
221,070
100,713
1,668,561
12,928,881
372,904
6,101,722
19,065,513
761,130
242,915,692

75,327
239,397
102,113
1,678,439
12,704,592
368,408
5,995,431
18,008,962
765,363
236,525,673

86,955
293,102
104,752
1,732,775
12,470,382
318,120
5,812,660
17,260,345
991,017
229,460,777

-15.9
-24.6
-3.9
-3.7
3.7
17.2
5.0
10.5
-23.2
5.9

(dollar figures in millions)
Number of institutions reporting�������������������������������������������������������������������������������������
Total employees (full-time equivalent)���������������������������������������������������������������������������
CONDITION DATA
Total assets���������������������������������������������������������������������������������������������������������������������
Loans secured by real estate����������������������������������������������������������������������������������
		
1-4 Family residential mortgages��������������������������������������������������������������������
		Nonfarm nonresidential�����������������������������������������������������������������������������������
		
Construction and development
		
Home equity lines���������������������������������������������������������������������������������������������
Commercial & industrial loans��������������������������������������������������������������������������������
Loans to individuals�������������������������������������������������������������������������������������������������
		Credit cards������������������������������������������������������������������������������������������������������
Farm loans���������������������������������������������������������������������������������������������������������������
Other loans & leases�����������������������������������������������������������������������������������������������
Less: Unearned income������������������������������������������������������������������������������������������
Total loans & leases������������������������������������������������������������������������������������������������
Less: Reserve for losses�����������������������������������������������������������������������������������������
Net loans and leases�����������������������������������������������������������������������������������������������
Securities�����������������������������������������������������������������������������������������������������������������
Other real estate owned������������������������������������������������������������������������������������������
Goodwill and other intangibles�������������������������������������������������������������������������������
All other assets��������������������������������������������������������������������������������������������������������

INCOME DATA
Total interest income�������������������������������������������������������������������
Total interest expense�����������������������������������������������������������������
Net interest income��������������������������������������������������������������
Provision for loan and lease losses��������������������������������������������
Total noninterest income�������������������������������������������������������������
Total noninterest expense�����������������������������������������������������������
Securities gains (losses)�������������������������������������������������������������
Applicable income taxes�������������������������������������������������������������
Extraordinary gains, net��������������������������������������������������������������
Total net income (includes minority interests)���������������������
		
Bank net income������������������������������������������������������������
Net charge-offs����������������������������������������������������������������������������
Cash dividends����������������������������������������������������������������������������
Retained earnings�����������������������������������������������������������������������
Net operating income�����������������������������������������������������������

First Three
Qtrs 2013
$352,438
41,086
311,352
25,185
192,292
314,671
3,977
52,900
168
115,033
114,468
41,578
58,153
56,315
112,026

First Three
Qtrs 2012
$367,713
50,876
316,837
42,826
185,346
314,005
8,216
46,178
-55
107,335
106,823
63,962
60,916
45,907
101,225



FDIC Quarterly

%Change
-4.2
-19.2
-1.7
-41.2
3.8
0.2
-51.6
14.6
N/M
7.2
7.2
-35
-4.5
22.7
10.7

3rd Quarter
2013
$117,676
13,369
104,307
5,798
59,015
106,493
540
15,684
259
36,146
36,008
11,677
22,861
13,147
35,529

3rd Quarter
2012
$121,734
16,092
105,643
14,642
63,736
104,475
2,717
15,316
-44
37,618
37,485
22,199
20,447
17,038
35,556

%Change
12Q3-13Q3
-3.3
-16.9
-1.3
-60.4
-7.4
1.9
-80.1
2.4
N/M
-3.9
-3.9
-47.4
11.8
-22.8
-0.1

N/M - Not Meaningful

5

2013, Volume 7, No. 4

TABLE III-A. Third Quarter 2013, All FDIC-Insured Institutions
Asset Concentration Groups*
THIRD QUARTER
All Insured
(The way it is...)
Institutions
Number of institutions reporting�����������������������
6,891
Commercial banks�������������������������������������
5,937
Savings institutions�����������������������������������
954
Total assets (in billions)������������������������������������
$14,596.2
Commercial banks�������������������������������������
13,537.7
Savings institutions�����������������������������������
1,058.6
Total deposits (in billions)���������������������������������
11,028.2
Commercial banks�������������������������������������
10,219.7
Savings institutions�����������������������������������
808.5
Bank net income (in millions)���������������������������
36,008
Commercial banks�������������������������������������
33,145
Savings institutions�����������������������������������
2,863

Credit
Card
International Agricultural Commercial
Banks
Banks
Banks
Lenders
17
4
1,536
3,434
14
4
1,516
3,099
3
0
20
335
$596.2
$3,721.7
$243.9
$4,774.5
522.7
3,721.7
238.4
4,418.5
73.5
0.0
5.5
356.0
335.8
2,630.5
202.1
3,756.9
285.7
2,630.5
198.9
3,494.6
50.0
0.0
3.3
262.3
5,022
4,791
756
11,721
4,069
4,791
724
11,032
952
0
32
688

Mortgage Consumer
Lenders
Lenders
596
47
165
36
431
11
$553.9
$149.3
227.3
70.6
326.7
78.7
412.9
126.9
173.2
59.9
239.6
67.0
1,287
393
774
202
512
191

Other
Specialized
All Other
<$1 Billion
<$1 Billion
400
791
361
688
39
103
$63.9
$137.9
59.1
114.3
4.9
23.7
51.9
116.1
48.4
96.8
3.5
19.4
319
293
206
269
114
24

All Other
>$1 Billion
66
54
12
$4,354.9
4,165.2
189.7
3,395.2
3,231.7
163.5
11,426
11,076
350

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����������������

3.67
0.42
3.26
1.63
2.94
0.16
0.98
1.43
0.99
8.92
0.60

10.24
0.71
9.53
4.47
5.84
2.04
3.38
5.36
3.38
22.57
2.91

2.82
0.46
2.35
1.61
2.92
0.01
0.51
0.73
0.52
5.88
0.86

4.24
0.55
3.70
0.66
2.51
0.10
1.25
1.47
1.25
11.35
0.09

4.00
0.44
3.56
1.31
2.98
0.16
0.98
1.35
0.99
8.35
0.35

3.79
0.70
3.09
1.02
2.47
0.10
0.90
1.36
0.92
8.19
0.30

3.81
0.51
3.30
1.41
2.39
0.43
1.12
1.66
1.04
11.04
0.68

3.07
0.44
2.63
5.07
4.62
0.08
2.01
2.73
1.99
14.57
0.41

4.08
0.55
3.53
0.91
3.00
0.12
0.85
1.04
0.85
7.51
0.31

3.02
0.25
2.77
1.72
2.59
0.03
1.03
1.55
1.06
8.96
0.42

49.66
64.14
8.59
50.02

89.71
42.57
0.00
76.47

2.73
79.18
0.00
50.00

164.91
61.22
3.26
45.44

68.88
65.65
9.99
55.18

55.15
62.78
13.93
38.59

94.06
51.08
2.13
46.81

66.11
61.44
12.00
48.25

70.69
71.99
8.34
46.02

16.10
61.16
1.52
45.45

Structural Changes
New reporters��������������������������������������������
Institutions absorbed by mergers�������������
Failed institutions��������������������������������������

1
43
6

0
0
0

0
0
0

0
10
0

0
28
6

1
1
0

0
0
0

0
0
0

0
1
0

0
3
0

PRIOR THIRD QUARTERS
(The way it was...)
Return on assets (%)��������������������������������2012
��������������������������������������2010
������������������������������������� 2008

1.06
0.72
0.03

3.19
2.04
0.36

0.98
0.63
0.49

1.36
1.08
1.01

0.92
0.35
-0.13

0.75
0.70
-1.34

1.67
1.52
0.94

1.42
1.94
0.12

1.04
0.89
0.61

1.01
0.93
0.27

Net charge-offs to loans & leases (%)�����2012
��������������������������������������2010
������������������������������������� 2008

1.18
2.38
1.43

3.53
8.94
6.24

1.74
2.05
1.44

0.23
0.58
0.43

0.74
1.96
1.23

0.76
1.33
1.02

1.26
1.97
2.04

0.42
0.98
0.43

0.49
0.52
0.38

1.07
1.64
1.11

* See Table V-A (page 10) for explanations.
Note: Blue font identifies data that are also presented in the prior quarters’ data at bottom of table.

FDIC Quarterly

6

2013, Volume 7, No. 4

Quarterly Banking Profile
TABLE III-A. Third Quarter 2013, All FDIC-Insured Institutions
Asset Size Distribution
THIRD QUARTER
All Insured
(The way it is...)
Institutions
Number of institutions reporting�����������������������������
6,891
Commercial banks�������������������������������������������
5,937
Savings institutions�����������������������������������������
954
Total assets (in billions)������������������������������������������ $14,596.2
Commercial banks�������������������������������������������
13,537.7
Savings institutions�����������������������������������������
1,058.6
Total deposits (in billions)���������������������������������������
11,028.2
Commercial banks�������������������������������������������
10,219.7
Savings institutions�����������������������������������������
808.5
Bank net income (in millions)���������������������������������
36,008
Commercial banks�������������������������������������������
33,145
Savings institutions�����������������������������������������
2,863

Geographic Regions*

Less Than
$100
$1 Billion
Greater
$100
Million to
to
Than
Million
$1 Billion $10 Billion $10 Billion New York
2,117
4,106
561
107
854
1,875
3,523
450
89
466
242
583
111
18
388
$123.6
$1,245.4
$1,453.1 $11,774.2
$2,876.9
110.1
1,041.6
1,175.7
11,210.3
2,414.5
13.5
203.8
277.4
563.9
462.4
104.7
1,041.7
1,135.0
8,746.8
2,132.5
94.0
877.9
926.0
8,321.7
1,794.8
10.7
163.8
209.0
425.1
337.8
224
2,856
4,193
28,735
7,603
213
2,445
3,613
26,873
6,895
11
411
580
1,862
708

Atlanta
875
788
87
$2,981.8
2,896.3
85.4
2,305.0
2,240.4
64.7
6,991
6,850
140

Chicago
1,480
1,227
253
$3,399.3
3,285.3
114.0
2,452.2
2,366.3
85.9
4,488
4,191
298

Kansas
City
1,675
1,600
75
$3,158.9
3,098.9
60.0
2,417.6
2,369.5
48.1
9,748
9,639
109

San
Dallas
Francisco
1,454
553
1,355
501
99
52
$864.0
$1,315.4
761.3
1,081.3
102.7
234.1
716.6
1,004.2
631.9
816.8
84.7
187.4
2,280
4,898
1,950
3,620
330
1,278

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����������������������

3.67
0.42
3.26
1.63
2.94
0.16
0.98
1.43
0.99
8.92
0.60

4.26
0.55
3.71
1.02
3.41
0.15
0.72
0.86
0.73
6.16
0.28

4.26
0.57
3.70
1.11
3.17
0.18
0.92
1.16
0.92
8.51
0.34

4.35
0.50
3.85
1.22
3.07
0.16
1.17
1.50
1.17
9.90
0.31

3.52
0.39
3.13
1.74
2.89
0.16
0.97
1.45
0.98
8.87
0.68

4.00
0.45
3.55
1.53
2.79
0.36
1.06
1.53
1.06
8.84
0.81

3.67
0.35
3.32
1.63
3.07
0.11
0.90
1.37
0.94
7.66
0.55

2.88
0.35
2.53
1.76
3.21
-0.02
0.52
0.79
0.53
5.82
0.46

3.90
0.50
3.40
1.50
2.62
0.15
1.25
1.74
1.25
11.62
0.75

4.01
0.39
3.62
1.43
3.20
0.12
1.07
1.40
1.06
9.77
0.29

4.22
0.49
3.73
1.97
2.87
0.35
1.48
2.25
1.51
11.67
0.50

49.66
64.14
8.59
50.02

94.37
77.20
13.93
46.72

83.07
69.99
6.72
50.78

77.96
64.17
3.57
56.33

45.23
63.38
0.93
53.27

84.00
58.21
10.19
45.08

34.02
67.32
12.34
57.83

-8.32
80.04
9.59
44.93

36.83
56.61
5.85
48.96

70.12
67.09
6.12
52.06

113.39
52.38
12.30
56.78

Structural Changes
New reporters��������������������������������������������������
Institutions absorbed by mergers�������������������
Failed institutions��������������������������������������������

1
43
6

0
13
2

0
28
3

1
2
1

0
0
0

1
4
1

0
7
1

0
1
1

0
13
0

0
11
2

0
7
1

PRIOR THIRD QUARTERS
(The way it was…)
Return on assets (%)��������������������������������������2012
��������������������������������������������2010
������������������������������������������� 2008

1.06
0.72
0.03

0.79
0.39
0.27

0.87
0.34
-0.02

1.02
0.27
-0.60

1.09
0.83
0.12

1.02
0.77
0.01

0.72
0.58
0.22

0.95
0.61
0.10

1.28
0.99
0.50

1.16
0.78
0.18

1.68
0.74
-0.59

Net charge-offs to loans & leases (%)�����������2012
��������������������������������������������2010
������������������������������������������� 2008

1.18
2.38
1.43

0.38
0.87
0.44

0.58
1.16
0.71

0.79
1.74
1.11

1.33
2.70
1.63

1.15
3.05
1.49

1.33
2.31
1.28

1.04
1.94
1.36

1.54
2.77
1.61

0.52
1.20
0.85

0.83
2.28
1.80

* See Table V-A (page 11) for explanations.
Note: Blue font identifies data that are also presented in the prior quarters’ data at bottom of table.

FDIC Quarterly

7

2013, Volume 7, No. 4

TABLE IV-A. First Three Quarters 2013, All FDIC-Insured Institutions
Asset Concentration Groups*
FIRST THREE QUARTERS
All Insured
(The way it is...)
Institutions
Number of institutions reporting�����������������������
6,891
Commercial banks�������������������������������������
5,937
Savings institutions�����������������������������������
954
Total assets (in billions)������������������������������������
$14,596.2
Commercial banks�������������������������������������
13,537.7
Savings institutions�����������������������������������
1,058.6
Total deposits (in billions)���������������������������������
11,028.2
Commercial banks�������������������������������������
10,219.7
Savings institutions�����������������������������������
808.5
Bank net income (in millions)���������������������������
114,468
Commercial banks�������������������������������������
106,136
Savings institutions�����������������������������������
8,332
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
17
4
1,536
3,434
14
4
1,516
3,099
3
0
20
335
$596.2
$3,721.7
$243.9
$4,774.5
522.7
3,721.7
238.4
4,418.5
73.5
0.0
5.5
356.0
335.8
2,630.5
202.1
3,756.9
285.7
2,630.5
198.9
3,494.6
50.0
0.0
3.3
262.3
14,555
22,810
2,177
32,143
12,033
22,810
2,090
29,848
2,521
0
87
2,294

Mortgage Consumer
Lenders
Lenders
596
47
165
36
431
11
$553.9
$149.3
227.3
70.6
326.7
78.7
412.9
126.9
173.2
59.9
239.6
67.0
4,068
1,440
2,263
767
1,805
672

Other
Specialized
All Other
<$1 Billion
<$1 Billion
400
791
361
688
39
103
$63.9
$137.9
59.1
114.3
4.9
23.7
51.9
116.1
48.4
96.8
3.5
19.4
850
909
521
829
329
81

All Other
>$1 Billion
66
54
12
$4,354.9
4,165.2
189.7
3,395.2
3,231.7
163.5
35,517
34,975
543

3.69
0.43
3.26
1.78
2.90
0.23
1.03
1.55
1.06
9.45
0.72

10.13
0.74
9.39
4.29
5.71
2.05
3.27
5.14
3.26
21.90
3.21

2.87
0.46
2.41
1.83
2.65
0.09
0.80
1.21
0.83
9.38
1.03

4.15
0.56
3.59
0.67
2.50
0.10
1.17
1.40
1.20
10.78
0.11

4.01
0.47
3.54
1.36
3.04
0.21
0.89
1.29
0.91
7.63
0.44

3.74
0.71
3.03
1.10
2.42
0.14
0.94
1.42
0.98
8.70
0.37

3.74
0.52
3.22
1.63
2.29
0.43
1.27
2.03
1.28
13.80
0.77

3.01
0.45
2.55
4.58
4.44
0.11
1.71
2.41
1.74
12.52
0.59

4.06
0.57
3.48
0.98
3.01
0.14
0.84
1.07
0.88
7.66
0.32

3.04
0.27
2.77
1.98
2.67
0.14
1.07
1.62
1.09
9.25
0.51

60.57
60.54
7.95
52.46

81.79
42.63
0.00
82.35

26.25
66.85
0.00
75.00

156.59
62.36
2.60
45.57

71.11
64.21
9.55
59.23

60.99
61.10
12.75
41.44

85.34
47.51
0.00
55.32

68.54
63.82
10.50
43.50

83.50
71.62
7.59
48.29

55.65
58.84
3.03
53.03

88.58

92.17

87.02

92.27

89.29

93.38

96.30

91.47

92.12

87.40

1.83
64.49

3.73
325.13

2.44
82.09

1.50
132.46

1.61
77.01

1.34
43.62

1.21
132.73

1.88
87.81

1.55
79.36

1.52
34.16

1.75
11.11
9.40
13.09
14.97
69.45
52.48
65.77

0.90
14.89
13.09
15.12
17.39
133.52
75.19
52.55

1.13
8.82
7.56
12.07
14.38
47.72
33.73
42.36

0.98
11.01
10.45
14.80
15.94
74.02
61.34
82.88

1.81
11.81
10.18
12.81
14.46
84.26
66.30
77.52

2.16
11.40
10.49
20.66
21.80
80.22
59.79
74.40

0.66
9.64
9.60
13.78
14.61
79.89
67.91
84.99

0.96
13.71
13.22
29.91
30.90
33.84
27.49
80.50

1.55
11.34
11.26
19.48
20.65
63.98
53.87
84.19

2.37
11.77
9.26
12.70
14.62
62.33
48.60
71.18

Structural Changes
New reporters��������������������������������������������
Institutions absorbed by mergers�������������
Failed institutions��������������������������������������

1
159
22

0
0
0

0
0
0

0
27
0

0
106
20

1
6
0

0
0
0

0
1
0

0
11
2

0
8
0

PRIOR FIRST THREE QUARTERS
(The way it was...)
Number of institutions������������������������������2012
��������������������������������������2010
������������������������������������� 2008

7,181
7,761
8,384

17
22
26

5
5
4

1,539
1,583
1,588

3,576
4,172
4,810

706
725
827

53
81
100

397
320
298

818
789
691

70
64
40

Total assets (in billions)����������������������������2012
��������������������������������������2010
������������������������������������� 2008

$14,223.3
13,372.7
13,572.5

$580.5
695.1
467.9

$3,774.2
3,278.1
3,263.3

$223.9
194.0
168.1

$4,125.4
4,442.5
6,077.4

$821.8
789.5
1,060.5

$116.9
102.9
71.0

$63.4
44.5
36.0

$142.6
131.6
93.8

$4,374.5
3,694.6
2,334.6

Return on assets (%)��������������������������������2012
��������������������������������������2010
������������������������������������� 2008

1.02
0.64
0.32

3.14
1.47
2.42

0.83
0.79
0.31

1.30
1.04
1.12

0.90
0.28
0.23

0.82
0.70
-0.35

1.62
1.42
1.01

1.25
1.58
1.57

1.01
0.71
0.88

1.01
0.74
0.36

Net charge-offs to loans & leases (%)�����2012
��������������������������������������2010
������������������������������������� 2008

1.14
2.63
1.18

3.81
11.94
5.64

1.53
2.27
1.28

0.22
0.53
0.29

0.75
1.89
0.98

0.78
1.22
0.74

1.44
2.20
1.84

0.33
0.81
0.43

0.42
0.51
0.30

0.98
1.96
0.88

Noncurrent assets plus
OREO to assets (%)��������������������������2012
��������������������������������������2010
������������������������������������� 2008

2.37
3.24
1.55

1.10
1.97
1.73

1.47
2.36
1.17

1.26
1.70
1.15

2.52
3.84
1.93

2.26
3.13
2.30

1.45
1.05
0.80

1.10
1.06
0.28

1.65
1.96
0.92

3.30
3.78
0.85

Equity capital ratio (%)�����������������������������2012
��������������������������������������2010
������������������������������������� 2008

11.38
11.18
9.62

14.82
14.62
20.85

9.17
9.06
7.13

11.68
11.40
11.07

11.87
11.38
10.66

10.83
10.11
7.95

9.96
10.59
9.14

15.04
17.17
19.61

11.86
11.41
11.25

12.44
12.33
8.61

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��������������������

* See Table V-A (page 10) for explanations.
Note: Blue font identifies data that are also presented in the prior years’ data at bottom of table.

FDIC Quarterly

8

2013, Volume 7, No. 4

Quarterly Banking Profile
TABLE IV-A. First Three Quarters 2013, All FDIC-Insured Institutions
Asset Size Distribution
FIRST THREE QUARTERS
All Insured
(The way it is...)
Institutions
Number of institutions reporting�����������������������������
6,891
Commercial banks�������������������������������������������
5,937
Savings institutions�����������������������������������������
954
Total assets (in billions)������������������������������������������ $14,596.2
Commercial banks�������������������������������������������
13,537.7
Savings institutions�����������������������������������������
1,058.6
Total deposits (in billions)���������������������������������������
11,028.2
Commercial banks�������������������������������������������
10,219.7
Savings institutions�����������������������������������������
808.5
Bank net income (in millions)���������������������������������
114,468
Commercial banks�������������������������������������������
106,136
Savings institutions�����������������������������������������
8,332
Performance Ratios (annualized, %)
Yield on earning assets������������������������������������������
Cost of funding earning assets������������������������������
Net interest margin������������������������������������������
Noninterest income to assets���������������������������������
Noninterest expense to assets�������������������������������
Loan and lease loss provision to assets����������������
Net operating income to assets�����������������������������
Pretax return on assets������������������������������������������
Return on assets�����������������������������������������������������
Return on equity�����������������������������������������������������
Net charge-offs to loans and leases����������������������
Loan and lease loss provision to
net charge-offs������������������������������������������������
Efficiency ratio��������������������������������������������������������
% of unprofitable institutions����������������������������������
% of institutions with earnings gains����������������������

Geographic Regions*

Less Than
$100
$1 Billion
Greater
$100
Million to
to
Than
Million
$1 Billion $10 Billion $10 Billion New York
2,117
4,106
561
107
854
1,875
3,523
450
89
466
242
583
111
18
388
$123.6
$1,245.4
$1,453.1 $11,774.2
$2,876.9
110.1
1,041.6
1,175.7
11,210.3
2,414.5
13.5
203.8
277.4
563.9
462.4
104.7
1,041.7
1,135.0
8,746.8
2,132.5
94.0
877.9
926.0
8,321.7
1,794.8
10.7
163.8
209.0
425.1
337.8
704
8,548
12,642
92,575
17,530
651
7,321
10,549
87,615
15,734
54
1,227
2,093
4,960
1,797

Atlanta
875
788
87
$2,981.8
2,896.3
85.4
2,305.0
2,240.4
64.7
23,220
22,767
453

Chicago
1,480
1,227
253
$3,399.3
3,285.3
114.0
2,452.2
2,366.3
85.9
22,874
21,884
990

Kansas
City
1,675
1,600
75
$3,158.9
3,098.9
60.0
2,417.6
2,369.5
48.1
29,136
28,764
372

San
Dallas
Francisco
1,454
553
1,355
501
99
52
$864.0
$1,315.4
761.3
1,081.3
102.7
234.1
716.6
1,004.2
631.9
816.8
84.7
187.4
7,221
14,487
6,093
10,895
1,128
3,593

3.69
0.43
3.26
1.78
2.90
0.23
1.03
1.55
1.06
9.45
0.72

4.20
0.57
3.63
1.03
3.33
0.14
0.73
0.89
0.75
6.34
0.31

4.23
0.59
3.64
1.13
3.16
0.18
0.89
1.16
0.92
8.45
0.35

4.30
0.52
3.78
1.30
3.06
0.18
1.16
1.55
1.18
10.05
0.38

3.54
0.40
3.14
1.91
2.85
0.25
1.04
1.59
1.06
9.52
0.82

3.99
0.46
3.52
1.57
3.00
0.39
0.79
1.33
0.82
6.74
0.97

3.66
0.37
3.29
1.83
3.01
0.21
1.00
1.51
1.03
8.42
0.69

2.91
0.37
2.54
1.97
2.89
0.07
0.88
1.27
0.91
9.99
0.50

3.96
0.49
3.47
1.68
2.69
0.26
1.25
1.79
1.26
11.59
0.91

3.96
0.40
3.55
1.45
3.09
0.14
1.11
1.48
1.12
10.35
0.33

4.23
0.51
3.72
2.04
2.89
0.36
1.49
2.28
1.52
11.61
0.58

60.57
60.54
7.95
52.46

83.30
76.64
12.33
47.99

84.65
70.41
6.50
53.14

73.58
63.66
3.03
62.21

58.23
58.98
2.80
63.55

76.16
58.12
10.66
48.01

53.09
63.26
13.14
62.74

29.94
68.19
8.78
49.12

53.17
55.37
4.36
49.43

70.85
65.32
5.23
53.03

102.39
52.33
11.39
59.67

88.58

91.37

91.97

91.02

87.89

88.77

86.86

87.94

88.36

91.03

92.59

1.83
64.49

1.71
87.42

1.66
83.86

1.63
70.68

1.88
61.92

1.80
90.60

1.71
45.46

1.95
66.90

2.07
59.23

1.57
75.10

1.60
110.66

1.75
11.11
9.40
13.09
14.97
69.45
52.48
65.77

1.83
11.82
11.74
19.19
20.31
65.67
55.63
84.71

1.98
10.83
10.64
15.79
16.98
74.45
62.27
83.59

1.95
11.76
10.67
15.01
16.21
81.58
63.72
77.73

1.70
11.06
9.08
12.53
14.56
67.33
50.02
62.21

1.20
12.00
9.84
14.02
15.71
71.26
52.82
65.00

2.48
12.30
9.52
12.81
14.59
74.39
57.51
74.08

1.54
9.13
7.93
11.65
13.79
60.67
43.77
59.45

2.08
10.66
9.28
12.37
14.57
67.90
51.97
56.90

1.73
10.87
10.00
14.53
15.88
71.45
59.26
82.52

1.03
12.84
11.86
16.11
17.45
78.05
59.59
75.22

Structural Changes
New reporters��������������������������������������������������
Institutions absorbed by mergers�������������������
Failed institutions��������������������������������������������

1
159
22

0
58
12

0
87
9

1
12
1

0
2
0

1
15
1

0
16
8

0
33
4

0
36
1

0
34
3

0
25
5

PRIOR FIRST THREE QUARTERS
(The way it was…)
Number of institutions������������������������������������2012
��������������������������������������������2010
������������������������������������������� 2008

7,181
7,761
8,384

2,287
2,682
3,240

4,235
4,414
4,470

551
556
560

108
109
114

891
961
1,027

918
1,041
1,197

1,529
1,609
1,721

1,738
1,841
1,943

1,513
1,637
1,719

592
672
777

Total assets (in billions)����������������������������������2012
��������������������������������������������2010
������������������������������������������� 2008

$14,223.3
13,372.7
13,572.5

$132.4
151.1
174.9

$1,278.3
1,315.7
1,338.2

$1,424.4
1,400.5
1,474.7

$11,388.3
10,505.3
10,584.7

$2,927.6
2,724.5
2,689.0

$2,942.9
2,957.1
3,427.5

$3,231.4
2,948.0
3,324.7

$3,059.1
1,649.5
1,009.2

$845.8
788.4
770.8

$1,216.4
2,305.2
2,351.4

Return on assets (%)��������������������������������������2012
��������������������������������������������2010
������������������������������������������� 2008

1.02
0.64
0.32

0.72
0.40
0.47

0.84
0.37
0.44

1.18
0.27
0.18

1.02
0.73
0.33

0.94
0.72
0.59

0.76
0.36
0.30

0.91
0.62
0.31

1.13
0.79
0.93

1.10
0.74
0.56

1.79
0.80
-0.22

Net charge-offs to loans & leases (%)�����������2012
��������������������������������������������2010
������������������������������������������� 2008

1.14
2.63
1.18

0.39
0.73
0.31

0.60
1.02
0.49

0.75
1.71
0.88

1.29
3.07
1.37

1.26
3.77
1.31

1.23
2.51
0.98

0.93
2.04
1.15

1.44
3.02
1.36

0.55
1.22
0.65

0.88
2.35
1.49

Noncurrent assets plus
OREO to assets (%)��������������������������������2012
��������������������������������������������2010
������������������������������������������� 2008

2.37
3.24
1.55

2.20
2.42
1.40

2.61
3.42
1.82

2.70
3.70
2.03

2.30
3.17
1.46

1.53
2.18
0.98

3.66
4.04
1.67

2.13
3.06
1.56

2.51
4.59
1.90

2.27
3.28
1.63

1.56
2.72
1.85

Equity capital ratio (%)�����������������������������������2012
��������������������������������������������2010
������������������������������������������� 2008

11.38
11.18
9.62

12.13
12.18
13.14

11.10
10.36
10.18

11.88
11.22
10.87

11.35
11.26
9.32

12.38
12.48
10.92

12.31
11.55
10.14

9.18
9.06
8.56

11.04
11.55
9.66

11.03
10.76
9.87

13.70
11.76
8.79

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���������������������������

* See Table V-A (page 11) for explanations.
Note: Blue font identifies data that are also presented in the prior years’ data at bottom of table.

FDIC Quarterly

9

2013, Volume 7, No. 4

TABLE V-A. Loan Performance, All FDIC-Insured Institutions
Asset Concentration Groups*
September 30, 2013

All Insured
Institutions

Credit
Card
Banks

International Agricultural Commercial Mortgage
Banks
Banks
Lenders
Lenders

Consumer
Lenders

Other
All Other All Other
Specialized
<$1
>$1
<$1 Billion
Billion
Billion

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

1.20
0.78
0.50
0.33
0.77
1.95
0.30
1.40
1.29
1.51
0.15
0.94

0.13
0.00
0.00
0.00
0.00
0.14
0.90
1.26
1.25
1.41
0.23
1.22

1.62
0.62
0.37
0.11
1.08
2.61
0.25
1.43
1.38
1.51
0.14
0.97

0.67
0.68
0.57
0.53
0.62
1.39
0.95
1.50
1.21
1.52
0.31
0.66

0.78
0.66
0.50
0.34
0.62
1.31
0.29
1.23
1.27
1.23
0.21
0.67

1.07
0.94
0.42
0.27
0.77
1.21
0.66
1.55
1.93
1.19
0.11
1.03

0.60
0.50
1.16
1.61
0.54
0.57
0.09
0.85
0.69
0.90
0.14
0.75

1.27
1.76
0.84
0.67
0.48
1.72
1.17
1.63
1.54
1.64
0.59
1.26

1.37
1.02
1.14
0.57
0.71
1.66
1.09
2.00
1.11
2.02
0.45
1.34

1.84
1.23
0.49
0.60
0.79
2.73
0.25
1.86
1.49
1.93
0.10
1.26

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������������������������������������������������������

4.77
4.89
2.18
0.96
2.70
7.66
0.72
1.04
1.21
0.87
0.29
2.83

0.85
0.00
4.04
0.00
0.00
0.75
0.91
1.17
1.18
0.99
0.17
1.15

6.80
1.82
1.55
0.63
3.58
11.50
0.71
1.20
1.24
1.14
0.24
2.97

1.42
3.01
2.09
1.46
1.00
1.40
1.46
0.60
0.32
0.63
0.35
1.13

2.90
5.21
2.13
1.05
1.58
4.16
0.81
0.94
1.39
0.87
0.45
2.08

3.32
4.61
2.05
0.94
2.02
3.68
1.72
1.13
1.70
0.58
0.23
3.07

2.01
2.79
2.95
0.99
2.98
1.42
0.13
0.66
1.04
0.53
0.13
0.91

2.62
7.07
2.80
1.08
1.09
1.91
1.39
0.64
0.95
0.62
0.69
2.14

2.21
5.10
2.69
2.26
0.89
1.91
1.89
0.94
0.51
0.95
0.54
1.96

8.14
4.32
2.43
0.94
3.57
12.09
0.51
0.91
1.21
0.85
0.20
4.45

Percent of Loans Charged-Off (net, YTD)
All real estate loans����������������������������������������������������������
Construction and development���������������������������������
Nonfarm nonresidential���������������������������������������������
Multifamily residential real estate�����������������������������
Home equity loans����������������������������������������������������
Other 1-4 family residential���������������������������������������
Commercial and industrial loans�������������������������������������
Loans to individuals����������������������������������������������������������
Credit card loans�������������������������������������������������������
Other loans to individuals�����������������������������������������
All other loans and leases (including farm)���������������������
Total loans and leases������������������������������������������������������

0.52
0.64
0.28
0.10
1.14
0.55
0.32
2.17
3.44
0.82
0.09
0.72

0.06
0.00
0.00
0.00
2.15
-0.02
3.10
3.25
3.30
1.95
0.00
3.21

0.95
2.54
0.15
0.01
1.20
1.21
0.27
3.02
4.01
1.33
0.10
1.03

0.10
0.28
0.15
-0.08
0.09
0.15
0.22
0.31
0.58
0.29
0.00
0.11

0.45
0.68
0.32
0.15
0.75
0.53
0.32
1.00
3.72
0.58
0.15
0.44

0.36
0.42
0.34
0.08
1.12
0.32
0.53
0.85
0.80
0.88
0.10
0.37

0.85
1.68
0.56
0.16
1.67
0.42
0.09
0.80
2.16
0.34
0.16
0.77

0.58
1.34
0.44
0.36
3.37
0.33
0.40
0.54
2.43
0.41
1.31
0.59

0.27
0.71
0.29
0.17
0.43
0.23
0.61
0.52
1.26
0.51
0.00
0.32

0.55
0.23
0.17
0.01
1.50
0.44
0.16
1.34
3.35
0.90
0.02
0.51

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)��������������

$4,053.2
206.1
1,092.5
252.3
517.7
1,841.4
1,571.8
1,331.7
677.1
654.6
847.2
7,803.9

$0.2
0.0
0.0
0.0
0.0
0.2
35.0
427.0
410.6
16.4
3.5
465.7

$478.6
6.2
36.2
46.6
92.8
239.9
273.5
254.4
161.8
92.6
280.7
1,287.2

$90.1
4.4
25.0
2.5
1.7
23.4
18.7
6.5
0.5
6.0
36.6
151.9

$1,985.4
148.0
777.8
157.2
204.3
663.8
740.3
267.9
35.3
232.7
224.6
3,218.3

$300.4
6.1
28.5
12.4
17.8
234.2
9.4
12.3
6.1
6.2
13.7
335.8

$21.9
0.3
1.1
0.2
6.9
13.4
5.9
74.5
18.1
56.4
0.4
102.7

$12.7
0.9
4.6
0.4
0.5
5.7
2.2
2.0
0.1
1.9
1.0
17.9

$57.4 $1,106.3
3.1
37.1
14.2
205.1
1.4
31.6
2.4
191.4
32.3
628.5
6.5
480.5
6.3
280.8
0.1
44.4
6.1
236.4
5.3
281.3
75.5
2,149.0

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������������������������������������������������������

31,823.3
9,327.7
7,650.0
832.5
6,791.1
300.6
6,862.5

0.1
0.0
0.0
0.0
0.1
0.0
0.0

2,783.9
3.2
32.2
6.0
711.6
0.0
1,974.0

663.9
233.0
254.0
16.3
112.8
47.2
0.7

18,902.2
7,400.0
5,784.3
660.2
3,679.7
221.7
1,156.3

1,609.9
335.0
199.0
31.5
617.5
2.5
424.3

43.5
8.9
16.5
0.0
17.3
0.8
0.0

221.8
91.2
81.5
1.3
44.6
3.3
0.0

640.0
197.6
206.4
13.8
207.1
14.9
0.2

6,958.0
1,058.9
1,076.2
103.5
1,400.5
10.1
3,306.9

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

FDIC Quarterly

10

2013, Volume 7, No. 4

Quarterly Banking Profile
TABLE V-A. Loan Performance, All FDIC-Insured Institutions
Asset Size Distribution
September 30, 2013

Geographic Regions*

Less Than
$100
$1 Billion Greater
All Insured
$100
Million to
to
Than
Institutions
Million
$1 Billion $10 Billion $10 Billion New York

Atlanta

Chicago

Kansas
City

Dallas

San
Francisco

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

1.20
0.78
0.50
0.33
0.77
1.95
0.30
1.40
1.29
1.51
0.15
0.94

1.33
1.12
1.06
0.99
0.90
1.87
1.21
1.97
1.68
1.98
0.40
1.24

0.84
0.85
0.65
0.49
0.66
1.20
0.69
1.76
1.58
1.77
0.30
0.83

0.76
0.70
0.49
0.31
0.62
1.25
0.43
1.57
1.92
1.44
0.23
0.74

1.38
0.78
0.42
0.30
0.79
2.19
0.25
1.37
1.27
1.50
0.14
0.98

0.82
0.65
0.53
0.31
0.52
1.26
0.39
1.21
1.08
1.59
0.14
0.79

1.43
0.81
0.49
0.66
0.90
2.15
0.27
2.08
2.01
2.11
0.09
1.12

1.11
0.56
0.54
0.22
0.92
1.75
0.32
1.22
1.06
1.27
0.26
0.84

1.73
1.38
0.54
0.55
0.74
2.91
0.22
1.48
1.42
1.56
0.09
1.15

0.99
0.61
0.53
0.39
0.57
1.75
0.43
0.97
0.67
1.13
0.27
0.83

0.66
0.68
0.35
0.15
0.44
1.10
0.27
1.08
1.28
0.89
0.20
0.65

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���������������������������������������������

4.77
4.89
2.18
0.96
2.70
7.66
0.72
1.04
1.21
0.87
0.29
2.83

2.28
5.07
2.83
2.53
1.36
2.08
2.13
0.92
0.77
0.92
0.50
1.96

2.17
5.26
2.12
1.47
1.09
1.95
1.77
0.97
0.98
0.97
0.60
1.98

2.83
5.44
2.28
1.11
1.25
3.73
1.19
0.98
1.65
0.73
0.46
2.31

5.87
4.43
2.13
0.80
2.95
9.29
0.58
1.05
1.19
0.88
0.26
3.04

3.06
6.56
2.43
0.70
1.95
4.03
0.88
1.03
1.06
0.95
0.19
1.98

6.44
5.66
2.18
1.14
3.41
9.76
0.55
1.09
1.60
0.83
0.24
3.75

5.04
4.74
2.39
1.13
2.77
8.33
0.71
0.91
1.17
0.83
0.18
2.91

6.33
3.95
2.15
1.28
2.88
10.68
0.77
1.30
1.28
1.32
0.39
3.49

2.81
3.15
1.95
1.67
2.02
3.99
1.01
0.65
1.01
0.47
0.60
2.09

2.18
4.86
1.69
0.69
1.10
2.82
0.64
0.85
1.24
0.47
0.56
1.44

Percent of Loans Charged-Off (net, YTD)
All real estate loans�������������������������������������������������
Construction and development������������������������
Nonfarm nonresidential������������������������������������
Multifamily residential real estate��������������������
Home equity loans�������������������������������������������
Other 1-4 family residential������������������������������
Commercial and industrial loans����������������������������
Loans to individuals�������������������������������������������������
Credit card loans����������������������������������������������
Other loans to individuals��������������������������������
All other loans and leases (including farm)������������
Total loans and leases���������������������������������������������

0.52
0.64
0.28
0.10
1.14
0.55
0.32
2.17
3.44
0.82
0.09
0.72

0.29
0.61
0.43
0.32
0.35
0.24
0.54
0.43
2.18
0.41
0.08
0.31

0.31
0.82
0.29
0.18
0.42
0.27
0.50
0.77
3.77
0.58
0.15
0.35

0.30
0.49
0.25
0.21
0.49
0.31
0.34
1.37
3.50
0.55
0.17
0.38

0.63
0.62
0.29
0.05
1.25
0.64
0.31
2.26
3.44
0.86
0.08
0.82

0.46
0.91
0.36
0.05
0.65
0.51
0.58
2.59
3.16
1.02
0.07
0.97

0.65
1.31
0.41
0.10
1.55
0.48
0.27
1.94
3.92
0.82
0.08
0.69

0.52
0.64
0.35
0.18
1.00
0.50
0.28
1.28
3.32
0.62
0.03
0.50

0.72
0.22
0.10
0.08
1.41
0.93
0.22
2.91
4.11
1.30
0.12
0.91

0.25
0.24
0.20
0.25
0.92
0.22
0.24
1.07
2.03
0.57
0.23
0.33

0.16
-0.31
0.12
0.01
0.37
0.25
0.44
1.65
2.98
0.38
0.13
0.58

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)�����

$4,053.2
206.1
1,092.5
252.3
517.7
1,841.4
1,571.8
1,331.7
677.1
654.6
847.2
7,803.9

$48.5
2.8
13.8
1.5
1.3
21.4
8.5
4.5
0.0
4.5
8.5
70.0

$607.2
49.3
243.1
31.2
28.3
215.9
102.7
35.2
2.1
33.1
44.0
789.0

$671.4
50.6
277.4
56.6
44.4
226.5
150.3
72.8
20.1
52.7
47.1
941.7

$2,726.1
103.3
558.2
163.0
443.8
1,377.6
1,310.3
1,219.2
654.9
564.4
747.6
6,003.2

$801.3
38.8
247.4
85.7
90.9
333.6
233.9
375.0
275.7
99.4
137.7
1,547.9

$935.7
47.8
228.3
30.0
136.1
484.5
393.8
234.7
78.5
156.2
180.4
1,744.7

$786.8
32.8
183.4
70.5
131.9
348.9
323.0
193.2
47.0
146.2
214.4
1,517.4

$808.4
31.4
163.3
22.7
111.7
391.8
339.4
290.9
166.5
124.4
238.1
1,676.7

$329.2
38.6
127.3
10.4
19.0
120.8
107.8
51.3
17.4
33.9
32.1
520.4

$391.8
16.6
142.8
33.0
28.1
161.9
174.0
186.6
92.0
94.6
44.5
796.9

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���������������������������������������������

31,823.3
9,327.7
7,650.0
832.5
6,791.1
300.6
6,862.5

883.8
287.1
307.7
39.3
230.7
17.8
1.1

8,896.2
4,034.8
2,929.9
253.2
1,523.7
152.2
2.5

6,571.6
2,774.6
2,145.4
216.5
1,277.4
92.0
65.7

15,471.8
2,231.2
2,267.0
323.5
3,759.2
38.6
6,793.2

3,658.3
836.9
1,053.9
205.8
1,226.5
25.1
310.2

8,127.8
2,678.2
1,607.1
111.8
1,773.0
74.1
1,883.5

7,648.0
1,333.4
1,592.4
190.2
1,788.1
55.4
2,688.5

6,464.1
1,868.9
1,480.2
159.4
949.7
48.6
1,898.2

3,953.1
1,766.6
1,283.7
109.6
648.8
79.7
64.6

1,972.1
843.7
632.7
55.7
405.0
17.6
17.4

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

FDIC Quarterly

11

2013, Volume 7, No. 4

Table VI-A. Derivatives, All FDIC-Insured Call Report Filers
Asset Size Distribution
3rd
Quarter
2013

2nd
Quarter
2013

1st
Quarter
2013

4th
Quarter
2012

3rd
Quarter
2012

(dollar figures in millions;
notional amounts unless otherwise indicated)
ALL DERIVATIVE HOLDERS
Number of institutions reporting derivatives�����������������
1,420
1,409
1,398
1,363
1,365
Total assets of institutions reporting derivatives���������� $12,893,020 $12,689,398 $12,688,502 $12,662,780 $12,420,451
Total deposits of institutions reporting derivatives�������
9,671,930
9,409,428
9,427,223
9,383,383
9,074,347
Total derivatives������������������������������������������������������������� 242,915,548 236,525,669 232,753,745 224,271,474 229,460,777

% Change
Less
$100
$1 Billion
12Q3Than $100 Million to
to $10
13Q3
Million
$1 Billion
Billion
874
366
$356,921 $1,049,670
294,689
834,916
19,982
79,885

Greater
Than
$10 Billion

4.0
3.8
6.6
5.9

84
$6,200
5,241
204

96
$11,480,229
8,537,084
242,815,477

Derivative Contracts by Underlying Risk Exposure
Interest rate�������������������������������������������������������������������� 195,486,177 188,302,678 185,029,694 179,126,476 181,573,620
Foreign exchange*��������������������������������������������������������
31,199,117
31,485,719 30,329,231 28,600,020 30,098,397
Equity�����������������������������������������������������������������������������
2,093,955
2,079,940
2,043,789
1,952,110
2,208,326
Commodity & other (excluding credit derivatives)��������
1,287,651
1,275,103
1,449,766
1,402,392
1,582,317
Credit������������������������������������������������������������������������������ 12,848,648 13,382,229 13,901,264
13,190,476
13,998,117
Total�������������������������������������������������������������������������������� 242,915,548 236,525,669 232,753,745 224,271,474 229,460,777

7.7
3.7
-5.2
-18.6
-8.2
5.9

203
0
0
1
0
204

18,116
1,642
102
3
118
19,982

73,458 195,394,399
4,855
31,192,619
620
2,093,233
560
1,287,087
393
12,848,137
79,885 242,815,477

Derivative Contracts by Transaction Type
Swaps���������������������������������������������������������������������������� 150,157,095 141,708,887 138,360,564 134,929,637 135,584,411
Futures & forwards�������������������������������������������������������� 41,732,945 43,358,478 45,677,282 43,579,398 44,143,779
Purchased options��������������������������������������������������������� 17,618,486 17,640,959 16,632,038 15,660,030 16,596,610
Written options��������������������������������������������������������������� 17,681,296
17,761,600
17,149,678 15,985,091 16,819,969
Total�������������������������������������������������������������������������������� 227,189,821 220,469,924 217,819,562 210,154,157 213,144,770

10.7
-5.5
6.2
5.1
6.6

37
70
14
83
204

7,398
6,811
684
4,950
19,843

48,666
15,976
4,591
10,054
79,287

150,100,994
41,710,088
17,613,197
17,666,208
227,090,487

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�����������������������������������

64,826
-10,390
-1,928
1,180
27,246
-22,673

61,166
-5,177
1,396
1,319
-8,729
13,886

67,451
-6,644
-2,588
-2,530
-20,833
25,372

96,554
-5,822
-2,029
-2,467
-40,693
42,352

98,516
-13,618
-264
-2,590
-84,508
87,900

-34.2
N/M
N/M
N/M
N/M
N/M

0
0
0
0
0
0

45
0
12
0
0
2

35
-2
19
0
1
-23

64,745
-10,388
-1,959
1,180
27,245
-22,651

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

91,851,951
32,987,747
21,753,211
18,966,399
2,870,025
1,503,977
706,604
311,790
88,294
375,292
175,069
16,142

88,194,834
30,698,073
20,837,725
19,249,542
2,734,201
1,455,297
660,945
271,219
80,891
424,514
163,094
15,300

86,868,881
29,342,123
20,313,256
18,647,264
2,738,365
1,389,930
648,510
255,625
74,515
480,077
179,413
21,538

83,065,281
30,502,104
21,448,563
18,347,400
2,868,426
1,442,901
627,310
262,230
81,851
391,393
242,068
28,823

84,190,445
30,961,899
21,990,686
18,781,964
2,894,870
1,453,914
638,274
290,474
85,427
460,565
247,795
25,053

9.1
6.5
-1.1
1.0
-0.9
3.4
10.7
7.3
3.4
-18.5
-29.3
-35.6

53
19
41
0
0
0
0
0
0
0
0
0

5,005
3,382
3,929
1,221
0
0
4
11
28
3
0
0

17,669
23,553
20,634
2,817
88
0
146
117
16
179
58
0

91,829,223
32,960,793
21,728,607
18,962,361
2,869,937
1,503,977
706,454
311,662
88,250
375,111
175,011
16,142

27.1
62.5

30.5
62.8

32.6
62.1

35.9
62.8

37.2
66.4

0.1
0.1

0.4
0.2

0.7
0.5

30.9
71.5

Risk-Based Capital: Credit Equivalent Amount
Total current exposure to tier 1 capital (%)�������������������
Total potential future exposure to tier 1 capital (%)������
Total exposure (credit equivalent amount)
to tier 1 capital (%)��������������������������������������������������

89.6

93.3

94.7

98.7

103.6

0.2

0.6

1.2

102.4

Credit losses on derivatives***����������������������������������

181.0

145.0

84.0

230.0

157.0

15.3

0.0

0.0

2.0

178.0

HELD FOR TRADING
Number of institutions reporting derivatives�����������������
Total assets of institutions reporting derivatives����������
Total deposits of institutions reporting derivatives�������

242
10,414,708
7,805,746

243
10,170,206
7,533,623

240
10,138,207
7,538,266

247
10,122,382
7,513,330

248
9,955,537
7,270,076

-2.4
4.6
7.4

12
941
779

88
42,673
35,351

79
275,535
217,228

63
10,095,559
7,552,388

181,197,435 175,375,827 177,664,476
28,425,810 26,892,025 26,858,878
2,030,592
1,939,747
2,194,867
1,433,289
1,386,727
1,559,924
213,087,127 205,594,326 208,278,145

7.9
2.5
-5.3
-18.0
6.9

51
0
0
1
52

2,395
2
0
0
2,397

-30.9
-51.1
-54.6
N/M
-12.3

0
0
0
0
0

2
0
0
0
2

27
-1
0
0
25

3,052
500
230
656
4,438

0.0
0.0

0.4
1.8

0.8
4.0

4.0
21.4

Derivative Contracts by Underlying Risk Exposure
Interest rate�������������������������������������������������������������������� 191,708,900 184,309,887
Foreign exchange���������������������������������������������������������� 27,526,399 28,055,673
Equity�����������������������������������������������������������������������������
2,078,451
2,065,640
Commodity & other��������������������������������������������������������
1,278,658
1,264,349
Total�������������������������������������������������������������������������������� 222,592,408 215,695,549

17,640 191,688,814
2,583
27,523,814
220
2,078,231
60
1,278,598
20,502 222,569,457

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

3,080
499
230
656
4,465

2,762
3,139
922
452
7,275

2,216
3,190
830
1,252
7,488

4,155
759
136
-683
4,367

4,458
1,020
507
-892
5,093

Share of Revenue
Trading revenues to gross revenues (%)����������������������
Trading revenues to net operating revenues (%)����������

3.9
20.7

6.0
31.2

6.2
29.0

3.7
19.9

4.3
22.4

HELD FOR PURPOSES OTHER THAN TRADING
Number of institutions reporting derivatives�����������������
Total assets of institutions reporting derivatives����������
Total deposits of institutions reporting derivatives�������

1,283
12,598,451
9,438,733

1,269
12,298,101
9,102,437

1,262
12,355,323
9,167,823

1,219
12,318,101
9,111,173

1,213
11,985,731
8,728,198

5.8
5.1
8.1

73
5,332
4,526

794
319,579
263,463

327
945,164
750,780

89
11,328,376
8,419,963

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

3,777,277
795,639
15,504
8,992
4,597,413

3,992,791
756,530
14,300
10,754
4,774,375

3,832,259
870,503
13,197
16,477
4,732,435

3,750,650
781,154
12,363
15,664
4,559,831

3,909,144
921,630
13,458
22,393
4,866,625

-3.4
-13.7
15.2
-59.8
-5.5

152
0
0
0
153

15,722
1,620
101
3
17,446

55,818
2,067
400
500
58,785

3,705,586
791,953
15,002
8,489
4,521,030

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

2013, Volume 7, No. 4

Quarterly Banking Profile
TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Call Report Filers)
Asset Size Distribution

(dollar figures in millions)
Assets Securitized and Sold with Servicing Retained or with
Recourse or Other Seller-Provided Credit Enhancements

3rd
Quarter
2013

2nd
Quarter
2013

1st
Quarter
2013

4th
Quarter
2012

3rd
Quarter
2012

% Change Less Than
$100
$1 Billion Greater
12Q3$100
Million to
to $10 Than $10
13Q3
Million
$1 Billion Billion
Billion

Number of institutions reporting securitization activities�����������������������������������������
Outstanding Principal Balance by Asset Type
1-4 family residential loans��������������������������������������������������������������������������������
Home equity loans���������������������������������������������������������������������������������������������
Credit card receivables�������������������������������������������������������������������������������������
Auto loans����������������������������������������������������������������������������������������������������������
Other consumer loans���������������������������������������������������������������������������������������
Commercial and industrial loans�����������������������������������������������������������������������
All other loans, leases, and other assets����������������������������������������������������������
Total securitized and sold������������������������������������������������������������������������������������������

82

88

97

159

168

-51.2

1

30

19

32

$626,737
44
17,115
4,708
4,790
3,941
104,897
762,231

$634,882
46
17,945
3,860
4,938
4,467
99,224
765,363

$636,300
47
18,832
4,505
5,155
4,025
142,783
811,646

$641,236
49
18,942
4,684
5,083
1,839
199,968
871,800

$754,730
51
18,423
4,311
5,226
3,373
204,902
991,017

-17.0
-13.7
-7.1
9.2
-8.3
16.8
-48.8
-23.1

$0
0
0
0
0
0
0
0

$3,724
1
273
0
3
11
3,356
7,367

$14,255
0
0
0
0
1
5,314
19,570

$608,758
43
16,842
4,708
4,787
3,929
96,227
735,294

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���

2,927
0
554
0
168
20
1,729
5,397
121

3,086
0
557
0
168
33
1,861
5,705
121

3,254
0
588
0
185
41
2,438
6,506
121

3,368
0
605
0
200
7
2,280
6,460
130

3,581
0
666
0
206
14
2,317
6,785
125

-18.3
0.0
-16.8
0.0
-18.4
42.9
-25.4
-20.5
-3.2

0
0
0
0
0
0
0
0
0

7
0
109
0
0
0
2
117
0

39
0
0
0
0
0
0
39
0

2,881
0
445
0
168
20
1,727
5,241
121

4.1
10.7
1.0
0.6
5.4
0.0
1.1
3.6

4.3
9.5
0.8
0.4
6.0
0.0
1.2
3.8

4.0
11.5
0.8
0.3
4.9
0.0
1.2
3.4

4.5
12.5
0.8
0.4
6.2
0.0
0.9
3.6

4.1
12.2
0.9
0.4
5.5
0.0
1.1
3.4

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

1.1
0.0
1.6
0.0
0.0
0.0
0.6
0.9

7.4
0.0
0.0
0.0
0.0
0.0
0.5
5.5

4.0
10.8
0.9
0.6
5.4
0.0
1.2
3.6

3.7
34.4
0.6
0.0
7.1
0.0
8.9
4.3

4.2
32.3
0.4
0.0
6.3
0.0
10.2
4.9

4.7
31.7
0.4
0.0
6.8
0.0
8.7
5.2

5.0
29.6
0.3
0.0
6.9
0.1
7.8
5.5

4.8
29.1
0.3
0.0
5.6
0.0
8.0
5.3

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

1.0
0.0
1.7
0.0
0.0
6.6
0.7
0.9

7.7
0.0
0.0
0.0
0.0
60.8
1.2
6.0

3.6
34.8
0.5
0.0
7.1
0.0
9.6
4.3

0.7
0.3
1.9
0.1
0.7
0.0
0.6
0.7

0.5
0.2
1.3
0.1
0.4
0.0
0.5
0.5

0.3
0.3
0.6
0.0
0.2
0.0
0.1
0.3

1.5
1.6
2.6
0.1
1.0
0.0
0.5
1.3

1.0
1.3
2.1
0.1
0.7
0.0
0.3
0.9

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.1
0.0
4.4
0.0
0.0
0.0
0.0
0.2

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.7
0.3
1.9
0.1
0.7
0.0
0.6
0.7

0
13,451
0

0
13,076
0

0
11,868
0

0
14,514
0

0
13,291
0

0.0
1.2
0.0

0
0
0

0
321
0

0
0
0

0
13,130
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0.0
0.0
0.0

0
0
0

0
0
0

0
0
0

0
0
0

Securitized Loans, Leases, and Other Assets 30-89 Days Past Due (%)
1-4 family residential loans��������������������������������������������������������������������������������
Home equity loans���������������������������������������������������������������������������������������������
Credit card receivables�������������������������������������������������������������������������������������
Auto loans����������������������������������������������������������������������������������������������������������
Other consumer loans���������������������������������������������������������������������������������������
Commercial and industrial loans�����������������������������������������������������������������������
All other loans, leases, and other assets����������������������������������������������������������
Total loans, leases, and other assets�����������������������������������������������������������������������
Securitized Loans, Leases, and Other Assets 90 Days or More Past Due (%)
1-4 family residential loans��������������������������������������������������������������������������������
Home equity loans���������������������������������������������������������������������������������������������
Credit card receivables�������������������������������������������������������������������������������������
Auto loans����������������������������������������������������������������������������������������������������������
Other consumer loans���������������������������������������������������������������������������������������
Commercial and industrial loans�����������������������������������������������������������������������
All other loans, leases, and other assets����������������������������������������������������������
Total loans, leases, and other assets�����������������������������������������������������������������������
Securitized Loans, Leases, and Other Assets Charged-off
(net, YTD, annualized, %)
1-4 family residential loans��������������������������������������������������������������������������������
Home equity loans���������������������������������������������������������������������������������������������
Credit card receivables�������������������������������������������������������������������������������������
Auto loans����������������������������������������������������������������������������������������������������������
Other consumer loans���������������������������������������������������������������������������������������
Commercial and industrial loans�����������������������������������������������������������������������
All other loans, leases, and other assets����������������������������������������������������������
Total loans, leases, and other assets�����������������������������������������������������������������������
Seller's Interests in Institution's Own Securitizations - Carried as Loans
Home equity loans���������������������������������������������������������������������������������������������
Credit card receivables�������������������������������������������������������������������������������������
Commercial and industrial loans�����������������������������������������������������������������������
Seller's Interests in Institution's Own Securitizations - Carried as Securities
Home equity loans���������������������������������������������������������������������������������������������
Credit card receivables�������������������������������������������������������������������������������������
Commercial and industrial loans�����������������������������������������������������������������������

Assets Sold with Recourse and Not Securitized

Number of institutions reporting asset sales������������������������������������������������������������
Outstanding Principal Balance by Asset Type
1-4 family residential loans��������������������������������������������������������������������������������
Home equity, credit card receivables, auto, and other consumer loans���������
Commercial and industrial loans�����������������������������������������������������������������������
All other loans, leases, and other assets����������������������������������������������������������
Total sold and not securitized�����������������������������������������������������������������������������������

1,065

1,063

1,058

1,025

1,007

5.8

162

693

163

47

48,266
802
64
62,143
111,275

49,471
829
71
63,988
114,359

51,539
852
74
64,769
117,234

52,099
857
76
64,999
118,031

55,384
863
46
63,170
119,463

-12.9
-7.1
39.1
-1.6
-6.9

1,482
0
1
2
1,485

14,356
7
16
47
14,427

10,218
7
40
423
10,688

22,210
788
7
61,670
84,674

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�������������������������������������������������������������������������������������������������

11,580
156
29
15,316
27,081

12,164
151
34
15,360
27,709

13,077
167
36
15,216
28,496

13,146
173
42
15,043
28,403

15,884
164
38
14,438
30,524

-27.1
-4.9
-23.7
6.1
-11.3

110
0
1
2
114

2,766
7
16
20
2,809

3,757
4
12
66
3,838

4,947
146
1
15,228
20,321

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

153
44,841

158
45,095

167
48,946

166
57,798

172
61,957

-11.0
-27.6

13
13

90
213

31
375

19
44,240

Total unused liquidity commitments�������������������������������������������������������������������������

923

828

673

779

776

18.9

0

0

0

923

5,184,983 5,349,564 5,500,385

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 (%)**�������������������������������������������������������������

4,771,558 4,872,943

-13.3

6,148

139,532

13,050

8,267

7,875

8,372

8,009

62.9

5

0

231,872 4,394,007
3

13,042

40,363
3,407
352
5.9

51,893
5,174
273
6.0

63,355
4,225
394
6.5

68,619
4,497
430
7.3

70,886
2,802
509
7.8

-43.1
21.6
-30.8

0
8
0
0.9

0
186
15
2.4

1,032
181
3
2.8

39,332
3,031
334
6.9

*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

2013, Volume 7, No. 4

Quarterly Banking Profile
INSURANCE FUND INDICATORS
Insured Deposit Growth Flat
■	 DIF Reserve Ratio Rises 4 Basis Points to 0.68 Percent
■	 Six Institutions Fail During Third Quarter
■	

Total assets of the 6,891 FDIC-insured institutions
increased by 1.3 percent ($191.1 billion) during the
third quarter of 2013. Total deposits increased by 2.3
percent ($247.8 billion), domestic office deposits
increased by 2.2 percent ($204.2 billion), and foreign
office deposits increased by 3.1 percent ($43.6 billion).
Domestic noninterest-bearing deposits increased by
4.2 percent ($103.1 billion) and savings deposits and
interest-bearing checking accounts increased by 2.4
percent ($123.9 billion), while domestic time deposits
decreased by 1.4 percent ($22.8 billion). For the 12
months ending September 30, total domestic deposits
grew by 6 percent ($539.5 billion), with interest-bearing deposits increasing by 5.6 percent ($371.4 billion)
and noninterest-bearing deposits rising by 7 percent
($168.1 billion).1 Foreign deposits fell by 1.1 percent,
other borrowed money increased by 3.8 percent, and
securities sold under agreements to repurchase declined
by 18 percent over the same 12-month period.2

The aggregate amount exceeding the $250,000 limit in
noninterest-bearing transaction deposits increased by
$56 billion, or less than 4 percent, since the end of
2012. Table 1 shows the distribution of noninterestbearing transaction accounts larger than $250,000 by
institution asset size.
Total estimated insured deposits increased by 0.1 percent
in the third quarter of 2013.4 For institutions existing at
the start and the end of the most recent quarter, insured
deposits increased during the quarter at 3,025 institutions (44 percent), decreased at 3,841 institutions (56
percent), and remained unchanged at 29 institutions.
Excluding those deposit amounts that received temporary insurance coverage through the end of 2012, estimated insured deposits increased by 3.7 percent over the
12 months ending September 30, 2013.
The condition of the Deposit Insurance Fund (DIF)
continues to improve. The DIF increased by $2.9
billion during the third quarter to $40.8 billion (unaudited). Assessment income of $2.3 billion and a negative provision for insurance losses of $539 million were
primarily responsible for the increase. Investment
income, realized and unrealized gains on securities, and
all other miscellaneous income net of expenses added
another $307 million. Operating expenses reduced the
fund balance by $298 million. The DIF’s reserve ratio
was 0.68 percent on September 30, up from 0.64
percent at June 30, 2013, and 0.35 percent four quarters
ago. For the first nine months of 2013, 22 insured institutions, with combined assets of $5.9 billion, failed at a
current estimated cost to the DIF of $1.2 billion.

At the end of the third quarter, domestic deposits
funded 65.8 percent of industry assets, the largest share
since the fourth quarter of 1993, when domestic deposits funded 67.9 percent of assets. Insured institutions
held $2.6 trillion in domestic noninterest-bearing
deposits on September 30, 2013, 71 percent ($1.8 trillion) of which was in noninterest-bearing transaction
accounts larger than $250,000. Of the $1.8 trillion, $1.6
trillion exceeded the $250,000 insurance limit. The
expiration of the unlimited deposit insurance coverage
for noninterest-bearing transaction accounts at the end
of 2012 appeared to have no significant impact on
deposit levels during the first nine months of 2013.3
Throughout the insurance fund discussion, FDIC-insured institutions
include insured commercial banks and savings associations and,
except where noted, exclude insured branches of foreign banks.
2
Other borrowed money includes FHLB advances, term federal funds,
mortgage indebtedness, and other borrowings.
3
The Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank) enacted on July 21, 2010, provided temporary unlimited
deposit insurance coverage for noninterest-bearing transaction
accounts from December 31, 2010, through December 31, 2012,
regardless of the balance in the account and the ownership capacity of
the funds. The unlimited coverage was available to all depositors,
including consumers, businesses, and government entities. The coverage was separate from, and in addition to, the insurance coverage
provided for a depositor’s other accounts held at an FDIC-insured
bank.
1

FDIC Quarterly

Effective April 1, 2011, the deposit insurance assessment base changed to average consolidated total assets
minus average tangible equity.5 Revisions to insurance
assessment rates and risk-based pricing rules for large
banks (banks with assets greater than $10 billion) also
became effective on that date. The Fourth Quarter
Figures for estimated insured deposits in this discussion include
insured branches of foreign banks, in addition to insured commercial
banks and savings institutions.
5
There is an additional adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank.
4

15

2013, Volume 7, No. 4

Table 1

Insured Commercial Banks and Savings Institutions as of September 30, 2013
Distribution of Noninterest-Bearing Domestic Deposits by Asset Size

Asset Size
Less Than $1 Billion
$1 - $10 Billion
$10 - $50 Billion
$50 - $100 Billion
Over $100 Billion
Total

Number of
Institutions
6,223
561
71
17
19
6,891

Total Assets
($ Bil.)
$1,369.0
1,453.1
1,461.3
1,344.0
8,968.9
14,596.2

June 30, 2013
March 31, 2013
December 31, 2012
September 30, 2012
June 30, 2012
March 31, 2012
December 31, 2011
September 30, 2011
June 30, 2011
March 31, 2011
December 31, 2010

6,940
7,019
7,083
7,181
7,245
7,308
7,357
7,437
7,513
7,574
7,658

14,405.2
14,424.5
14,450.7
14,223.3
14,031.3
13,926.0
13,892.1
13,811.9
13,602.6
13,414.3
13,318.9

Domestic Noninterest-Bearing Transaction Accounts
Larger Than $250,000*
Other
NoninterestAmount Above
Average
Average
Bearing
the $250,000
Account
Number of
Total
Coverage Limit
Size
Accounts per Deposits**
($ Bil.)
($ Bil.)
($ Bil.)
($ Thou.)
Institution
$78.7
$49.9
$682
19
$129.2
117.4
84.4
890
235
114.5
120.7
96.7
1,260
1,349
91.4
157.6
139.9
2,217
4,182
48.5
1,345.4
1,227.6
2,855
24,804
356.9
1,819.8
1,598.5
2,055
128
740.5
1,697.1
1,678.7
1,753.5
1,693.5
1,567.3
1,496.5
1,577.3
1,385.3
1,207.1
1,047.1
1,010.0

1,486.3
1,472.1
1,542.3
1,491.7
1,374.7
1,309.9
1,395.5
1,209.7
1,040.8
888.7
854.2

2,013
2,031
2,075
2,098
2,034
2,004
2,169
1,972
1,815
1,653
1,621

121
118
119
112
106
102
99
94
89
84
81

760.1
766.0
787.9
698.7
730.5
735.8
688.0
708.1
705.3
699.9
679.5

* The Dodd-Frank Act provided temporary unlimited coverage through 12/31/2012, after which these accounts are not insured above the basic $250,000 coverage limit.
** Includes noninterest-bearing transaction accounts smaller than $250,000 and noninterest-bearing deposits not classified as transaction accounts.

Table 2

Distribution of the Assessment Base for FDIC-Insured Institutions*
by Asset Size
Data as of September 30, 2013
Asset Size
Less Than $1 Billion
$1 - $10 Billion
$10 - $50 Billion
$50 - $100 Billion
Over $100 Billion
Total

Number of
Institutions
6,223
561
71
17
19
6,891

Percent of
Assessment Base**
Total Institutions
($ Bil.)
90.3
$1,214.4
8.1
1,285.0
1.0
1,303.9
0.2
1,129.4
0.3
7,555.9
100.0
12,488.6

Percent of
Base
9.7
10.3
10.4
9.0
60.5
100.0

* Excludes insured U.S. branches of foreign banks.
** Average consolidated total assets minus average tangible equity, with adjustments for banker’s banks and custodial banks.

2010 Quarterly Banking Profile includes a more detailed
explanation of these changes. Table 2 shows the distribution of the assessment base as of September 30 by
institution asset size category.

would have been 0.33 percent using the new assessment
base (compared to 0.68 percent using estimated insured
deposits), and the 2 percent DRR using estimated
insured deposits would have been 0.95 percent using
the new assessment base.

Dodd-Frank requires that, for at least five years, the
FDIC must make available to the public the reserve
ratio and the Designated Reserve Ratio (DRR) using
both estimated insured deposits and the new assessment
base. As of September 30, 2013, the FDIC reserve ratio
FDIC Quarterly

Author:

16

Kevin Brown, Senior Financial Analyst
Division of Insurance and Research
(202) 898-6817

2013, Volume 7, No. 4

Quarterly Banking Profile
Table I-B. Insurance Fund Balances and Selected Indicators

(dollar figures in millions)
Beginning Fund Balance�����

Deposit Insurance Fund*
3rd
2nd
1st
4th
Quarter
Quarter
Quarter
Quarter
2012
2012
2012
2011
$22,693
$15,292
$11,827
$7,813

3rd
Quarter
2013
$37,871

2nd
Quarter
2013
$35,742

1st
Quarter
2013
$32,958

4th
Quarter
2012
$25,224

2,339

2,526

2,645

2,937

2,833

2,933

3,694

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�����

3rd
Quarter
2011
$3,916

2nd
Quarter
2011
-$1,023

1st
Quarter
2011
-$7,352

4th
Quarter
2010
-$8,009

3rd
Quarter
2010
-$15,247

3,209

3,642

3,163

3,484

3,498

3,592

34

54

-9

66

-8

81

20

33

30

37

28

39

40

156
298

0
439

0
436

0
469

0
442

0
407

0
460

0
334

0
433

0
463

0
395

0
452

0
414

-539

-33

-499

-3,344

-84

-807

12

1,533

-763

-2,095

-3,089

2,446

-3,763

46

51

55

1,878

57

4,095

63

2,599

83

80

66

48

94

71
2,887

-96
2,129

30
2,784

-22
7,734

7
2,531

-108
7,401

160
3,465

40
4,014

-188
3,897

27
4,939

57
6,329

-30
657

163
7,238

Ending Fund Balance�����������
Percent change from
four quarters earlier���������

40,758

37,871

35,742

32,958

25,224

22,693

15,292

11,827

7,813

3,916

-1,023

-7,352

-8,009

61.58

66.88

133.73

178.67

222.85

479.49

NM

NM

NM

NM

NM

NM

NM

Reserve Ratio (%)�����������������

0.68

0.64

0.59

0.44

0.35

0.32

0.22

0.17

0.12

0.06

-0.02

-0.12

-0.15

5,969,177 5,963,323

6,010,216

7,406,652

7,250,062

7,083,433

7,032,875

6,524,750 6,380,407 6,302,329

5,421,425

6.19

7.31

8.56

10.23

10.67

8,937,725 8,848,706

8,782,134

Estimated Insured
Deposits**������������������������������
Percent change from
four quarters earlier���������

-17.67

Domestic Deposits��������������� 9,630,395
Percent change from
four quarters earlier���������
6.01
Number of Institutions
Reporting������������������������

6,900

-15.81

-14.54

9,424,433 9,454,580

9,474,581 9,084,803

6,974,690 6,756,302

16.59

16.54

1.98

8,526,713 8,244,900 8,006,898

24.62

7,887,733

7,753,409

5.45

6.85

7.88

6.55

8.40

10.51

11.34

9.97

7.34

3.95

2.37

2.54

6,949

7,028

7,092

7,190

7,254

7,317

7,366

7,446

7,522

7,583

7,667

7,770

Deposit Insurance Fund Balance
and Insured Deposits
($ Millions)

DIF Reserve Ratios
Percent of Insured Deposits

0.59

0.64

0.68

0.44
0.32

-0.15 -0.12 -0.02

9/10

3/11

0.06

20.00

0.12

9/11

0.17

0.35

0.22

3/12

9/12

3/13

9/13

DIF
Balance

DIF-Insured
Deposits

9/10

-$8,009

$5,421,425

12/10

-7,352

6,302,329

3/11

-1,023

6,380,407

6/11

3,916

6,524,750

9/11

7,813

6,756,302

12/11

11,827

6,974,690

3/12

15,292

7,032,875

6/12

22,693

7,083,433

9/12

25,224

7,250,062

12/12

32,958

7,406,652

3/13

35,742

6,010,216

6/13

37,871

5,963,323

9/13

40,758

5,969,177

Table II-B. Problem Institutions and Failed/Assisted Institutions
(dollar figures in millions)
Problem Institutions
Number of institutions������������������������������������������������������������
Total assets�����������������������������������������������������������������������������

2013***
515
$174,188

2012***
694
$262,154

2012
651
$232,701

2011
813
$319,432

2010
884
$390,017

2009
702
$402,782

2008
252
$159,405

Failed Institutions
157
140
Number of institutions������������������������������������������������������������
22
43
51
92
25
$92,085
$169,709
Total assets****�����������������������������������������������������������������������
$5,860
$9,465
$11,617
$34,923
$371,945
Assisted Institutions*****
0
8
Number of institutions������������������������������������������������������������
0
0
0
0
5
$0
$1,917,482
$0
$0
$0
$0
Total assets�����������������������������������������������������������������������������
$1,306,042
* Quarterly financial statement results are unaudited.
NM - Not meaningful
** Beginning in the third quarter of 2009, estimates of insured deposits are based on a $250,000 general coverage limit. The Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank) temporarily provided unlimited coverage for noninterest-bearing transaction accounts for two years beginning December 31, 2010, and ending December 31, 2012.
*** Through September 30.
**** Total assets are based on final Call Reports submitted by failed institutions.
*****Assisted institutions represent five institutions under a single holding company that received assistance in 2008, and eight institutions under a different single holding company that
received assistance in 2009.

FDIC Quarterly

17

2013, Volume 7, No. 4

Table III-B. Estimated FDIC-Insured Deposits by Type of Institution
(dollar figures in millions)
September 30, 2013
Commercial Banks and Savings Institutions

Number of
Institutions

Total
Assets

Domestic
Deposits*

Est. Insured
Deposits

FDIC-Insured Commercial Banks�����������������������������������������������
		FDIC-Supervised�������������������������������������������������������������������
		OCC-Supervised��������������������������������������������������������������������
		Federal Reserve-Supervised�������������������������������������������������

5,937
3,907
1,184
846

$13,537,669
2,143,271
9,396,946
1,997,452

$8,791,210
1,663,188
5,833,476
1,294,546

$5,253,915
1,255,179
3,285,919
712,816

FDIC-Insured Savings Institutions����������������������������������������������
		 OCC-Supervised Savings Institutions�����������������������������������
		 FDIC-Supervised Savings Institutions�����������������������������������

954
515
439

1,058,566
712,555
346,011

808,471
547,435
261,036

687,372
468,783
218,588

Total Commercial Banks and Savings Institutions����������������������

6,891

14,596,235

9,599,681

5,941,287

Other FDIC-Insured Institutions
U.S. Branches of Foreign Banks�������������������������������������������������

9

68,807

30,714

27,891

Total FDIC-Insured Institutions���������������������������������������������������� ..

6,900

14,665,042

9,630,395

5,969,177

* Excludes $1.4 trillion in foreign office deposits, which are uninsured.

Table IV-B. Distribution of Institutions and Assessment Base by Assessment Rate Range
Quarter Ending June 30, 2013 (dollar figures in billions)
Number of
Annual Rate in Basis Points
Institutions
2.50-5.00
1,370
5.01-7.50
2,716
7.51-10.00
1,501
10.01-15.00
765
15.01-20.00
39
20.01-25.00
461
25.01-30.00
9
30.01-35.00
83
greater than 35.00
5

Percent of Total
Institutions
19.72
39.08
21.60
11.01
0.56
6.63
0.13
1.19
0.07

Amount of
Assessment Base*
$818
4,491
6,084
739
59
223
35
22
13

Percent of Total
Assessment Base
6.55
35.97
48.74
5.92
0.48
1.79
0.28
0.17
0.10

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

FDIC Quarterly

18

2013, Volume 7, No. 4

Quarterly Banking Profile

Notes to Users

accounting requirements of the FFIEC Call Reports. (TFR
­filers began filing Call Reports effective with the quarter ending March 31, 2012.)
All asset and liability figures used in calculating performance
ratios represent average amounts for the period (beginning-ofperiod amount plus end-of-period amount plus any interim
periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s)
are included in average assets since the year-to-date income
includes the results of all merged institutions. No adjustments
are made for “purchase accounting” mergers. Growth rates
represent the percentage change over a 12-month period in
totals for institutions in the base period to totals for institutions in the current period.
All data are collected and presented based on the location of
each reporting institution’s main office. Reported data may
include assets and liabilities located outside of the reporting
institution’s home state. In addition, institutions may relocate
across state lines or change their charters, resulting in an
inter-regional or inter-industry migration, e.g., institutions
can move their home offices between regions, and savings
institutions can convert to commercial banks or commercial
banks may convert to savings institutions.

This publication contains financial data and other information for depository institutions insured by the Federal Deposit
Insurance Corporation (FDIC). These notes are an integral
part of this publication and provide information regarding
the com­parability of source data and reporting differences
over time.

Tables I-A through VIII-A.
The information presented in Tables I-A through V-A of
the FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and s­ avings institutions. Tables VI-A (Derivatives) and VII-A (Servicing,
Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered
savings banks that file quarterly Call Reports. Table VIII-A
(Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured institutions.
Some tables are arrayed by groups of FDIC-insured institutions based on predominant types of asset concentration,
while other tables aggregate institutions by asset size and geographic region. Quarterly and full-year data are provided for
selected indicators, including aggregate condition and income
data, performance ratios, condition ratios, and structural
changes, as well as past due, noncurrent, and charge-off information for loans outstanding and other assets.

ACCOUNTING CHANGES

Indemnification Assets and Accounting Standards Update No. 201206 – In October 2012, the FASB issued Accounting Standards
Update (ASU) No. 2012-06, “Subsequent Accounting for an
Indemnification Asset Recognized at the Acquisition Date as
a Result of a Government-Assisted Acquisition of a Financial
Institution,” to address the subsequent measurement of an
indemnification asset recognized in an acquisition of a financial institution that includes an FDIC loss-sharing agreement.
This ASU amends ASC Topic 805, Business Combinations
(formerly FASB Statement No. 141 (revised 2007),”Business
Combinations”), which includes guidance applicable to FDICassisted acquisitions of failed institutions.
Under the ASU, when an institution experiences a change in
the cash flows expected to be collected on an FDIC loss-sharing indemnification asset because of a change in the cash
flows expected to be collected on the assets covered by the
loss-sharing agreement, the institution should account for the
change in the measurement of the indemnification asset on
the same basis as the change in the assets subject to indemnification. Any amortization of changes in the value of the
indemnification asset should be limited to the lesser of the
term of the indemnification agreement and the remaining life
of the indemnified assets.
The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2012.
For institutions with a calendar year fiscal year, the ASU takes
effect January 1, 2013. Early adoption of the ASU is permitted.
The ASU’s provisions should be applied prospectively to any
new indemnification assets acquired after the date of adoption
and to indemnification assets existing as of the date of adoption arising from an FDIC-assisted acquisition of a financial
institution. Institutions with indemnification assets arising
from FDIC loss-sharing agreements are expected to adopt ASU
2012-06 for Call Report purposes in accordance with the effective date of this standard. For additional information, refer to
ASU 2012-06, available at http:// www.fasb.org/jsp/FASB/
Page/SectionPage&cid=1176156316498.

Tables I-B through IV-B.
A separate set of tables (Tables I-B through IV-B) provides
comparative quarterly data related to the Deposit Insurance
Fund (DIF), problem institutions, failed/assisted institutions,
estimated FDIC-insured deposits, as well as assessment rate
information. Depository institutions that are not insured by
the FDIC through the DIF are not included in the FDIC
Quarterly Banking Profile. U.S. branches of institutions
­headquartered in foreign countries and non-deposit trust
companies are not included unless otherwise indicated.
Efforts are made to obtain financial reports for all active
institutions. However, in some cases, final financial reports
are not available for institutions that have closed or converted their charters.

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

COMPUTATION METHODOLOGY
Parent institutions are required to file consolidated reports,
while their subsidiary financial institutions are still required
to file separate reports. Data from subsidiary institution
reports are included in the Quarterly Banking Profile tables,
which can lead to double-counting. No adjustments are made
for any double-counting of subsidiary data. Additionally,
­certain adjustments are made to the OTS Thrift Financial
Reports to provide closer conformance with the reporting and
FDIC Quarterly

19

2013, Volume 7, No. 4

ed accounting principles, institutions may not record the
effect of this tax change in their balance sheets and income
statements for financial and regulatory reporting purposes
until the period in which the law was enacted, i.e., the first
quarter of 2009.
Troubled Debt Restructurings and Current Market Interest Rates –
Many institutions are restructuring or modifying the terms of
loans to provide payment relief for those borrowers who have
suffered deterioration in their financial condition. Such loan
restructurings may include, but are not limited to, reductions
in principal or accrued interest, reductions in interest rates,
and extensions of the maturity date. Modifications may be
executed at the original contractual interest rate on the loan,
a current market interest rate, or a below-market interest rate.
Many of these loan modifications meet the definition of a
troubled debt restructuring (TDR).
The TDR accounting and reporting standards are set forth in
ASC Subtopic 310-40, Receivables – Troubled Debt
Restructurings by Creditors (formerly FASB Statement No.
15, “Accounting by Debtors and Creditors for Troubled Debt
Restructurings,” as amended). This guidance specifies that a
restructuring of a debt constitutes a TDR if, at the date of
restructuring, the creditor for economic or legal reasons related to a debtor’s financial difficulties grants a concession to
the debtor that it would not otherwise consider.
In the Call Report, until a loan that is a TDR is paid in full or
otherwise settled, sold, or charged off, it must be reported in
the appropriate loan category, as well as identified as a performing TDR loan, if it is in compliance with its modified
terms. If a TDR is not in compliance with its modified terms,
it is reported as a past-due and nonaccrual loan in the appropriate loan category, as well as distinguished from other past
due and nonaccrual loans. To be considered in compliance
with its modified terms, a loan that is a TDR must not be in
nonaccrual status and must be current or less than 30 days past
due on its contractual principal and interest payments under
the modified repayment terms. A loan restructured in a TDR
is an impaired loan. Thus, all TDRs must be measured for
impairment in accordance with ASC Subtopic 310-10,
Receivables – Overall (formerly FASB Statement No. 114,
“Accounting by Creditors for Impairment of a Loan,” as
amended), and the Call Report Glossary entry for “Loan
Impairment.” Consistent with ASC Subtopic 310-10, TDRs
may be aggregated and measured for impairment with other
impaired loans that share common risk characteristics by using
historical statistics, such as average recovery period and
­average amount recovered, along with a composite effective
interest rate. The outcome of such an aggregation approach
must be consistent with the impairment measurement methods prescribed in ASC Subtopic 310-10 and Call Report
instructions for loans that are “individually” considered
impaired instead of the measurement method prescribed in
ASC Subtopic 450-20, Contingencies – Loss Contingencies
(formerly FASB Statement No. 5, “Accounting for Contin­
gencies”) for loans not individually considered impaired that
are collectively evaluated for impairment. When a loan not
previously considered individually impaired is restructured and
determined to be a TDR, absent a partial charge-off, it generally is not appropriate for the impairment estimate on the loan
to decline as a result of the change from the impairment measurement method prescribed in ASC Subtopic 450-20 to the
methods prescribed in ASC Subtopic 310-10.

Goodwill Impairment Testing – In September 2011, the FASB
issued Accounting Standards Update (ASU) No. 2011-08,
“Testing Goodwill for Impairment,” to address concerns about
the cost and complexity of the existing goodwill impairment
test in ASC Topic 350, Intangibles-Goodwill and Other
­(formerly FASB Statement No. 142, “Goodwill and Other
Intangible Assets”). The ASU’s amendments to ASC
Topic 350 are effective for annual and interim goodwill
impairment tests performed for fiscal years beginning after
December 15, 2011 (i.e., for annual or interim tests performed
on or after January 1, 2012, for institutions with a calendar
year fiscal year). Early adoption of the ASU was permitted.
Under ASU 2011-08, an institution has the option of first
assessing qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test described in ASC Topic 350. If, after considering
all relevant events and circumstances, an institution determines it is unlikely (that is, a likelihood of 50 percent or less)
that the fair value of a reporting unit is less than its carrying
amount (including goodwill), then the institution does not
need to perform the two-step goodwill impairment test. If the
institution instead concludes that the opposite is true (that is,
it is likely that the fair value of a reporting unit is less than its
carrying amount), then it is required to perform the first step
and, if necessary, the second step of the two-step goodwill
impairment test. Under ASU 2011-08, an institution may
choose to bypass the qualitative assessment for any reporting
unit in any period and proceed directly to performing the first
step of the two-step goodwill impairment test.
Extended Net Operating Loss Carryback Period – The Worker,
Homeownership, and Business Assistance Act of 2009, which
was enacted on November 6, 2009, permits banks and other
businesses, excluding those banking organizations that
received capital from the U.S. Treasury under the Troubled
Asset Relief Program, to elect a net operating loss carryback
period of three, four, or five years instead of the usual carryback period of two years for any one tax year ending after
December 31, 2007, and beginning before January 1, 2010.
For calendar-year banks, this extended carryback period
applies to either the 2008 or 2009 tax year. The amount of
the net operating loss that can be carried back to the fifth
carryback year is limited to 50 percent of the available taxable income for that fifth year, but this limit does not apply to
other carryback years.
Under generally accepted accounting principles, banks may
not record the effects of this tax change in their balance
sheets and income statements for financial and regulatory
reporting purposes until the period in which the law was
enacted, i.e., the fourth quarter of 2009. Therefore, banks
should recognize the effects of this fourth quarter 2009 tax
law change on their current and deferred tax assets and liabilities, including valuation allowances for deferred tax assets, in
their Call Reports for December 31, 2009. Banks should not
amend their Call Reports for prior quarters for the effects of
the extended net operating loss carryback period.
The American Recovery and Reinvestment Act of 2009,
which was enacted on February 17, 2009, permits qualifying
small businesses, including FDIC-insured institutions, to elect
a net operating loss carryback period of three, four, or five
years instead of the usual carryback period of two years for
any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally acceptFDIC Quarterly

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Quarterly Banking Profile
Troubled Debt Restructurings and Accounting Standards Update
No. 2011-02 – In April 2011, the FASB issued Accounting
Standards Update (ASU) No. 2011-02, “A Creditor’s
Determination of Whether a Restructuring Is a Troubled
Debt Restructuring,” to provide additional guidance to help
creditors determine whether a concession has been granted to
a borrower and whether a borrower is experiencing financial
difficulties. The guidance is also intended to reduce diversity
in practice in identifying and reporting TDRs. This ASU was
effective for public companies for interim and annual periods
beginning on or after June 15, 2011, and should have been
applied retrospectively to the beginning of the annual period
of adoption for purposes of identifying TDRs. The measurement of impairment for any newly identified TDRs resulting
from retrospective application should have been applied prospectively in the first interim or annual period beginning on
or after June 15, 2011. (For most public institutions, the ASU
takes effect July 1, 2011, but retrospective application begins
as of January 1, 2011.) Nonpublic companies should apply the
new guidance for annual periods ending after December 15,
2012, including interim periods within those annual periods.
(For most nonpublic institutions, the ASU took effect
January 1, 2012.) Early adoption of the ASU was permitted
for both public and nonpublic entities. Nonpublic entities
that adopt early are subject to a retrospective identification
requirement. For additional information, refer to ASU 201102, available at http://www.fasb.org/jsp/FASB/Page/
SectionPage&cid=1176156316498.
Accounting for Loan Participations – Amended ASC Topic 860
(formerly FAS 166) modified the criteria that must be met in
order for a transfer of a portion of a financial asset, such as a
loan participation, to qualify for sale accounting. These
changes apply to transfers of loan participations on or after
the effective date of amended ASC Topic 860 (January 1,
2010, for banks with calendar year fiscal year), including
advances under lines of credit that are transferred on or after
the effective date of amended ASC Topic 860 even if the line
of credit agreements were entered into before this effective
date. Therefore, banks with a calendar-year fiscal year must
account for transfers of loan participations on or after January
1, 2010, in accordance with amended ASC Topic 860. In
general, loan participations transferred before the effective
date of amended ASC Topic 860 are not affected by this new
accounting standard.
Under amended ASC Topic 860, if a transfer of a portion of
an entire financial asset meets the definition of a “participating interest,” then the transferor (normally the lead lender)
must evaluate whether the transfer meets all of the conditions
in this accounting standard to qualify for sale accounting.
Other-Than-Temporary Impairment – When the fair value of an
investment in an individual available-for-sale or held-tomaturity security is less than its cost basis, the impairment is
either temporary or other-than-temporary. The amount of the
total other-than-temporary impairment related to credit loss
must be recognized in earnings, but the amount of total
impairment related to other factors must be recognized in
other comprehensive income, net of applicable taxes. To
determine whether the impairment is other-than-temporary,
an institution must apply the applicable accounting guidance
– refer to previously published Quarterly Banking Profile notes:
http://www2.fdic.gov/qbp/2011mar/qbpnot.html.

FDIC Quarterly

ASC Topic 805 (formerly Business Combinations and Noncontrolling
(Minority) Interests) – In December 2007, the FASB issued
Statement No. 141 (Revised), Business Combinations FAS
141(R)), and Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statements (FAS 160). Under FAS
141(R), all business combinations, including combinations of
mutual entities, are to be accounted for by applying the acquisition method. FAS 160 defines a noncontrolling interest, also
called a minority interest, as the portion of equity in an institution’s subsidiary not attributable, directly or indirectly, to the
parent institution. FAS 160 requires an institution to clearly
present in its consolidated financial statements the equity
ownership in and results of its subsidiaries that are attributable
to the noncontrolling ownership interests in these subsidiaries.
FAS 141(R) applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December
15, 2008. Similarly, FAS 160 is effective for fiscal years beginning on or after December 15, 2008. Thus, for institutions
with calendar-year fiscal years, these two accounting standards
take effect in 2009. Beginning in March 2009, Institution
equity capital and Noncontrolling interests are separately
reported in arriving at Total equity capital and Net income.
ASC Topic 820 (formerly FASB Statement No. 157 Fair Value
Measurements issued in September 2006) and ASC Topic 825
­(formerly FASB Statement No. 159 The Fair Value Option for
Financial Assets and Financial Liabilities) issued in February 2007 –
both are effective in 2008 with early adoption permitted in
2007. FAS 157 defines fair value and establishes a framework
for developing fair value estimates for the fair value measurements that are already required or permitted under other standards. FASB FSP 157-4, issued in April 2009, provides
additional guidance for estimating fair value in accordance
with FAS 157 when the volume and level of activity for the
asset or liability have significantly decreased. The FSP also
includes guidance on identifying circumstances that indicate a
transaction is not orderly. The FSP is effective for interim and
annual reporting periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009.
Fair value continues to be used for derivatives, trading securities, and available-for-sale securities. Changes in fair value go
through earnings for trading securities and most derivatives.
Changes in the fair value of available-for-sale securities are
reported in other comprehensive income. Available-for-sale
securities and held-to-maturity debt securities are written down
to fair value if impairment is other than temporary and loans
held for sale are reported at the lower of cost or fair value.
FAS 159 allows institutions to report certain financial assets
and liabilities at fair value with subsequent changes in fair
value included in earnings. In general, an institution may
elect the fair value option for an eligible financial asset or
­liability when it first recognizes the instrument on its balance
sheet or enters into an eligible firm commitment.
ASC Topic 715 (formerly FASB Statement No. 158 Employers’
Accounting for Defined Benefit Pension and Other Postretirement
Plans) – refer to previously published Quarterly Banking Profile
notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html.
ASC Topic 860 (formerly FASB Statement No. 156 Accounting for
Servicing of Financial Assets) – refer to previously published
Quarterly Banking Profile notes: http://www2.fdic.gov/
qbp/2011mar/qbpnot.html.

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ASC Topic 815 (formerly FASB Statement No. 155 Accounting for
Certain Hybrid Financial Instruments) – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.gov/
qbp/2011mar/qbpnot.html.
GNMA Buy-back Option – If an issuer of GNMA securities has
the option to buy back the loans that collateralize the
GNMA securities, when certain delinquency criteria are met,
ASC Topic 860 (formerly FASB Statement No. 140) requires
that loans with this buy-back option must be brought back on
the issuer’s books as assets. The rebooking of GNMA loans is
required regardless of whether the issuer intends to exercise
the buy-back option. The banking agencies clarified in May
2005 that all GNMA loans that are rebooked because of
delinquency should be reported as past due according to their
contractual terms.
ASC Topics 860 & 810 (formerly FASB Statements 166 & 167) –
In June 2009, the FASB issued Statement No. 166,
Accounting for Transfers of Financial Assets (FAS 166), and
Statement No. 167, Amendments to FASB Interpretation
No. 46(R) (FAS 167), which change the way entities account
for securitizations and special purpose entities. FAS 166
revised FASB Statement No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of
Liabilities, by eliminating the concept of a “qualifying specialpurpose entity,” creating the concept of a “participating interest,” changing the requirements for derecognizing financial
assets, and requiring additional disclosures. FAS 167 revised
FASB Interpretation No. 46(R), Consolidation of Variable
Interest Entities, by changing how a bank or other company
determines when an entity that is insufficiently capitalized or
is not controlled through voting or similar rights, i.e., a “variable interest entity” (VIE), should be consolidated. Under
FAS 167, a bank must perform a qualitative assessment to
determine whether its variable interest or interests give it a
controlling financial interest in a VIE. If a bank’s variable
interest or interests provide it with the power to direct the
most significant activities of the VIE, and the right to receive
benefits or the obligation to absorb losses that could potentially be significant to the VIE, the bank is the primary beneficiary of, and therefore must consolidate, the VIE.
Both FAS 166 and FAS 167 take effect as of the beginning of
each bank’s first annual reporting period that begins after
November 15, 2009, for interim periods therein, and for interim and annual reporting periods thereafter (i.e., as of January
1, 2010, for banks with a calendar year fiscal year). Earlier
application is prohibited. Banks are expected to adopt FAS
166 and FAS 167 for Call Report purposes in accordance with
the effective date of these two standards. Also, FAS 166 has
modified the criteria that must be met in order for a transfer of
a portion of a financial asset, such as a loan participation, to
qualify for sale accounting. These changes apply to transfers of
loan participations on or after the effective date of FAS 166.
Therefore, banks with a calendar year fiscal year must account
for transfers of loan participations on or after January 1, 2010,
in accordance with FAS 166. In general, loan participations
transferred before the effective date of FAS 166 (January 1,
2010, for calendar year banks) are not affected by this new
accounting standard and pre-FAS 166 participations that were
properly accounted for as sales under FASB Statement No.
140 will continue to be reported as having been sold.

FDIC Quarterly

ASC Topic 740 (formerly FASB Interpretation No. 48 on Uncertain
Tax Positions) – refer to previously published Quarterly Banking
Profile notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html.
ASC Topic 718 (formerly FASB Statement No. 123 (Revised 2004)
and Share-Based Payments – refer to previously published
Quarterly Banking Profile notes: http://www2.fdic.gov/
qbp/2008dec/qbpnot.html.
ASC Topic 815 (formerly FASB Statement No. 133 Accounting for
Derivative Instruments and Hedging Activities) – refer to previously published Quarterly Banking Profile notes: http://www2.
fdic.gov/qbp/2008dec/qbpnot.html.
Accounting Standards Codification – refer to previously published
Quarterly Banking Profile notes: http://www2.fdic.gov/
qbp/2011sep/qbpnot.html.

DEFINITIONS (in alphabetical order)

All other assets – total cash, balances due from depository
institutions, premises, fixed assets, direct investments in real
estate, investment in unconsolidated subsidiaries, customers’
liability on acceptances outstanding, assets held in trading
accounts, federal funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid
deposit insurance assessments, and other assets.
All other liabilities – bank’s liability on acceptances, limited-life
preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities.
Assessment base – effective April 1, 2011, the deposit insurance assessment base has changed to “average consolidated
total assets minus average tangible equity” with an additional
adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank. Previously the
assessment base was “assessable deposits” and consisted of DIF
deposits (deposits insured by the FDIC Deposit Insurance
Fund) in banks’ domestic offices with certain adjustments.
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 are 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.

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Quarterly Banking Profile
Credit enhancements – techniques whereby a company attempts
to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit
enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be
associ­ated with a given issuance.
Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings
Association (SAIF) Insurance Funds were merged in 2006 by
the Federal Deposit Insurance Reform Act to form the DIF.
Derivatives notional amount – the notional, or contractual,
amounts of derivatives represent the level of involvement in
the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent
the amounts used to calculate contractual cash flows to be
exchanged.
Derivatives credit equivalent amount – the fair value of the
derivative plus an additional amount for potential future credit exposure based on the notional amount, the remaining
maturity and type of the contract.

Estimated insured deposits – in general, insured deposits are
total domestic deposits minus estimated uninsured deposits.
Beginning March 31, 2008, for institutions that file Call
Reports, insured deposits are total assessable deposits minus
estimated uninsured deposits. Beginning September 30, 2009,
insured deposits include deposits in accounts of $100,000 to
$250,000 that are covered by a temporary increase in the
FDIC’s standard maximum deposit insurance amount
(SMDIA). The Dodd-Frank Wall Street Reform and
Consumer Protection Act enacted on July 21, 2010, made
permanent the standard maximum deposit insurance amount
(SMDIA) of $250,000. Also, the Dodd-Frank Act amended
the Federal Deposit Insurance Act to include noninterestbearing transaction accounts as a new temporary deposit
insurance account category. All funds held in noninterestbearing transaction accounts were fully insured, without limit,
from December 31, 2010, through December 31, 2012.
Failed/assisted institutions – an institution fails when regulators
take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or
another healthy institution. This action may require the
FDIC to provide funds to cover losses. An institution is
defined as “assisted” when the institution remains open and
receives assistance in order to continue operating.
Fair Value – the valuation of various assets and liabilities on
the balance sheet—including trading assets and liabilities,
available-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.

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.

FDIC Quarterly

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Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to
depositors and other creditors, expressed as a percentage of
average earning assets. No adjustments are made for interest
income that is tax exempt.
Net loans to total assets – loans and lease financing receivables, net of unearned income, allowance and reserves, as a
percent of total assets on a consolidated basis.
Net operating income – income excluding discretionary transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from
operating income have been adjusted to exclude the portion
applicable to securities gains (or losses).
Noncurrent assets – the sum of loans, leases, debt securities,
and other assets that are 90 days or more past d­ue, or in nonaccrual status.
Noncurrent loans & leases – the sum of loans and leases 90 days
or more past due, and loans and leases in nonaccrual status.
Number of institutions reporting – the number of institutions
that actually filed a financial report.
New reporters – insured institutions filing quarterly financial
reports for the first time.
Other borrowed funds – federal funds purchased, securities sold
with agreements to repurchase, demand notes issued to the
U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and
trading liabilities, less revaluation losses on assets held in
trading accounts.
Other real estate owned – primarily foreclosed property. Direct
and indirect investments in real estate ventures are excluded.
The amount is reflected net of valuation allowances. For
institutions that file a Thrift Financial Report (TFR), the
­valuation allowance subtracted also includes allowances for
other repossessed assets. Also, for TFR filers the components
of other real estate owned are reported gross of valuation
allowances. (TFR filers began filing Call Reports effective
with the quarter ending March 31, 2012.)
Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their
losses) compared to the same period a year earlier.
“Problem” institutions – federal regulators assign a composite
rating to each financial institution, based upon an evaluation
of financial and operational criteria. The rating is based on a
scale of 1 to 5 in ascending order of supervisory concern.
“Problem” institutions are those institutions with financial,
operational, or managerial weaknesses that threaten their
continued financial viability. Depending upon the degree of
risk and supervisory concern, they are rated either a “4” or
“5.” The number and assets of “problem” institutions are
based on FDIC composite ratings. Prior to March 31, 2008,
for institutions whose primary federal regulator was the OTS,
the OTS composite rating was used.
Recourse – an arrangement in which a bank retains, in form or
in substance, any credit risk directly or indirectly associated
with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the
bank’s claim on the asset. If a bank has no claim on an asset
it has sold, then the retention of any credit risk is recourse.

FDIC Quarterly

Reserves for losses – the allowance for loan and lease losses on
a consolidated basis.
Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract.
Excludes restructured loans and leases that are not in compliance with the modified terms.
Retained earnings – net income less cash dividends on common and preferred stock for the reporting period.
Return on assets – bank net income (including gains or losses
on securities and extraordinary items) as a percentage of aver­
age total (consolidated) assets. The basic yardstick of bank
profitability.
Return on equity – bank net income (including gains or losses
on securities and extraordinary items) as a percentage of average total equity capital.
Risk-based capital groups – definition:
(Percent)

Tier 1
Risk-Based
Capital*

Total
Risk-Based
Capital*

Well-capitalized

≥10

≥6

and

and

Tier 1
Leverage

Tangible
Equity

≥5

–

Adequately
capitalized

≥8

and

≥4

and

≥4

–

Undercapitalized

≥6

and

≥3

and

≥3

–

Significantly
undercapitalized

<6

or

<3

or

<3

Critically
undercapitalized

–

–

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. Effective April 1, 2011, risk categories for large institutions (generally those with at least $10 billion in assets) are
eliminated. The following table shows the relationship of risk
categories (I, II, III, IV) for small institutions to capital and
supervisory groups as well as the initial base assessment rates
(in basis points) for each risk category. Supervisory Group A
generally includes institutions with CAMELS composite ratings of 1 or 2; Supervisory Group B generally includes institutions with a CAMELS composite rating of 3; and Supervisory
Group C generally includes institutions with CAMELS composite ratings of 4 or 5. For purposes of risk-based assessment
capital groups, undercapitalized includes institutions that are
significantly or critically undercapitalized.
Supervisory Group
Capital Category

A

1. Well Capitalized

I
5–9 bps

2. Adequately Capitalized
3. Undercapitalized

II
14 bps

B

C

II
14 bps

III
23 bps

III
23 bps

IV
35 bps

Effective April 1, 2011, the initial base assessment rates are 5
to 35 basis points. An institution’s total assessment rate may
be less than or greater than its initial base assessment rate as a
result of additional risk adjustments.

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Quarterly Banking Profile
The base assessment rates for small institutions in Risk
Category I are based on a combination of financial ratios and
CAMELS component ratings (the financial ratios method).
As required by Dodd-Frank, the calculation of risk-based
assessment rates for large institutions no longer relies on longterm debt issuer ratings. Rates for large institutions are based
on CAMELS ratings and certain forward-looking financial
measures combined into two scorecards—one for most large
institutions and another for the remaining very large institutions that are structurally and operationally complex or that
pose unique challenges and risks in case of failure (highly
complex institutions). In general, a highly complex institution is an institution (other than a credit card bank) with
more than $500 billion in total assets that is controlled by a
parent or intermediate parent company with more than $500
billion in total assets or a processing bank or trust company
with total fiduciary assets of $500 billion or more. The FDIC
retains its ability to take additional information into account
to make a limited adjustment to an institution’s total score
(the large bank adjustment), which will be used to determine
an institution’s initial base assessment rate.
Effective April 1, 2011, the three possible adjustments to
an institution’s initial base assessment rate are as follows:
(1) Unsecured Debt Adjustment: An institution’s rate may
decrease by up to 5 basis points for unsecured debt. The unsecured debt adjustment cannot exceed the lesser of 5 basis
points or 50 percent of an institution’s initial base assessment
rate (IBAR). Thus, for example, an institution with an IBAR
of 5 basis points would have a maximum unsecured debt
adjustment of 2.5 basis points and could not have a total base
assessment rate lower than 2.5 basis points. (2) Depository
Institution Debt Adjustment: For institutions that hold longterm unsecured debt issued by another insured depository
institution, a 50 basis point charge is applied to the amount
of such debt held in excess of 3 percent of an institution’s
Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for
small institutions that are not in Risk Category I and for large
institutions that are not well capitalized or do not have a
composite CAMELS rating of 1 or 2 may increase (not to
exceed 10 basis points) if their brokered deposits exceed 10
percent of domestic deposits. After applying all possible
adjustments (excluding the Depository Institution Debt
Adjustment), minimum and maximum total base assessment
rates for each risk category are as follows:

Beginning in 2007, each institution is assigned a risk-based
rate for a quarterly assessment period near the end of the
quarter following the assessment period. Payment is generally
due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are
effective for assessment purposes as of the examination transmittal date.
Special Assessment – On May 22, 2009, the FDIC board
approved a final rule that imposed a 5 basis point special
assessment as of June 30, 2009. The special assessment was
levied on each insured depository institution’s assets minus
its Tier 1 capital as reported in its report of condition as of
June 30, 2009. The special assessment was collected
September 30, 2009, at the same time that the risk-based
assessment for the second quarter of 2009 was collected.
The special assessment for any institution was capped at
10 basis points of the institution’s assessment base for the
second quarter of 2009 risk-based assessment.
Prepaid Deposit Insurance Assessments – In November 2009,
the FDIC Board of Directors adopted a final rule requiring
insured depository institutions (except those that are
exempted) to prepay their quarterly risk-based deposit
insurance assessments for the fourth quarter of 2009, and
for all of 2010, 2011, and 2012, on December 30, 2009.
For regulatory capital purposes, an institution may assign
a zero-percent risk weight to the amount of its prepaid
deposit assessment asset. As required by the FDIC’s regulation establishing the prepaid deposit insurance assessment
program, this program ended with the final application of
prepaid assessments to the quarterly deposit insurance
assessments payable March 29, 2013. The FDIC issued
refunds of any unused prepaid deposit insurance assessments on June 28, 2013.
Risk-weighted assets – assets adjusted for risk-based capital
definitions which include on-balance-sheet as well as off-­
balance-sheet items multiplied by risk-weights that range
from zero to 200 percent. A conversion factor is used to assign
a balance sheet equivalent amount for selected off-balancesheet accounts.
Securities – excludes securities held in trading accounts.
Banks’ securities portfolios consist of securities designated as
“held-to-maturity,” which are reported at amortized cost
(book value), and securities designated as “available-for-sale,”
reported at fair (market) value.
Securities gains (losses) – realized gains (losses) on held-tomaturity and available-for-sale securities, before adjustments
for income taxes. Thrift Financial Report (TFR) filers also
include gains (losses) on the sales of assets held for sale.
(TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.)
Seller’s interest in institution’s own securitizations – the reporting
bank’s ownership interest in loans and other assets that have
been securitized, except an interest that is a form of recourse
or other seller-provided credit enhancement. Seller’s interests
differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is
generally equal to the total principal amount of the pool of
assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the
form of securities issued to investors.

Total Base Assessment Rates*
Large and
Risk
Risk
Risk
Risk
Highly
Category Category Category Category Complex
I
II
III
IV
Institutions
Initial base
assessment rate

5–9

14

23

35

5–35

Unsecured debt
adjustment

-4.5–0

-5–0

-5–0

-5–0

-5–0

Brokered deposit
adjustment

—

0–10

0–10

0–10

0–10

Total Base
Assessment rate

2.5–9

9–24

18–33

30–45

2.5–45

* All amounts for all categories are in basis points annually. Total base rates that are
not the minimum or maximum rate will vary between these rates. Total base assessment rates do not include the depository institution debt adjustment.

FDIC Quarterly

25

2013, Volume 7, No. 4

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

FDIC Quarterly

Subchapter S corporation – a Subchapter S corporation is treated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any
federal income taxes at the corporate level. This can have the
effect of reducing institutions’ reported taxes and increasing
their after-tax earnings.
Trust assets – market value, or other reasonably available
value of fiduciary and related assets, to include marketable
securities, and other financial and physical assets. Common
physical assets held in fiduciary accounts include real estate,
equipment, collectibles, and household goods. Such fiduciary
assets are not included in the assets of the financial
institution.
Unearned income & contra accounts – unearned income for Call
Report filers only.
Unused loan commitments – includes credit card lines, home
equity lines, commitments to make loans for construction,
loans secured by commercial real estate, and unused commitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for
sale, which are accounted for as derivatives on the balance
sheet.)
Yield on earning assets – total interest, dividend, and fee
income earned on loans and investments as a percentage of
average earning assets.

26

2013, Volume 7, No. 4

Feature Article:
Community Bank Developments in 2012
U.S. counties—almost 20 percent of the total—in 2011
where the only FDIC-insured banking facilities in operation were those run by community banks.

Introduction
In December 2012, the FDIC published the FDIC
Community Banking Study, a comprehensive report on
trends in U.S. community banking over the 27-year
period from year-end 1984 through 2011.1 Developing a
new research definition of community banks, and
addressing topics such as structural change, geography,
financial performance, lending specialties, and capital
formation, the Study showed that community banks
continue to play a central role in the U.S. economy and
in local communities across the country. At the same
time, the Study highlighted a number of important
long-term trends that have dramatically reshaped the
community banking sector over time.

The analysis of comparative financial performance in
the Study also highlighted a combination of challenges
and success stories for community banks. As measured
by pretax return on assets (ROA), noncommunity
banks outperformed community banks by an average of
38 basis points per year in the 15 years leading up to the
financial crisis that began in 2007. While community
banks generally held the advantage in terms of provisions for loan losses, overhead expenses, and net interest income, noncommunity banks were much more
successful at deriving noninterest income from offbalance-sheet activities. Moreover, the advantage that
community banks have traditionally enjoyed in generating net interest income, which accounted for 81
percent of their total revenue stream in 2005, has
waned over time. The Study showed that more than 70
percent of the deterioration in the community bank
efficiency ratio between 1998 and 2011 could be attributed to a squeeze on net interest income, which has
intensified during the zero-interest-rate period that
began in 2008.3

One such trend is consolidation: The total number of
federally insured bank and thrift charters declined by 59
percent between 1984 and 2011 to 7,357. This decline
was driven not only by the failures that occurred in two
major banking crises, but also by the voluntary mergers
and intra-company consolidations that followed the
dismantling of geographic restrictions in banking some
two decades ago. All of the net consolidation that took
place during this period was accounted for by the disappearance of the smallest banks—those with assets less
than $100 million. The number of FDIC-insured institutions with assets between $100 million and $1
billion—almost all of which met the FDIC’s research
definition of a community bank—actually increased
over this period.

The Study failed to find systematic evidence that
community banks are predisposed to be less profitable than larger, noncommunity institutions. Among
charters that operated continuously between 1984
and 2011, community banks were actually a bit more
profitable on average than were noncommunity banks.
Analysis of average costs showed that economies of
scale among community banks—where they existed at
all—were mostly realized at a relatively modest asset
size of $100 million to $300 million.4 More than 60
percent of community banks in 2011 operated in one
of three lending specialty groups—agricultural lending,
mortgage lending, or diversified nonspecialty lending—

This consolidation had little net effect on the relative
number of community bank organizations and charters,
both of which continued to exceed 90 percent of the
total in 2011. Nevertheless, it led to a two-thirds
decline in the share of industry assets held by community banks, which was just 14 percent by year-end 2011.
Even so, at the end of the period, community banks
continued to hold 46 percent of the industry’s small
loans to U.S. farms and businesses as well as the majority of banking deposits at bank branches located in rural
and micropolitan counties.2 The Study identified 627

The efficiency ratio compares the level of overhead costs (total
noninterest expense) to net operating revenues (the sum of net interest income and total noninterest income). A higher efficiency ratio
actually suggests inefficiency, because it indicates that the bank is less
productive in converting expenditures into revenue.
4
Stefan Jacewitz and Paul Kupiec, “Community Bank Efficiency
and Economies of Scale” (Federal Deposit Insurance Corporation,
December 2012), http://www.fdic.gov/regulations/resources/cbi/report/
cbi-eff.pdf.
3

FDIC Community Banking Study, 2012, http://www.fdic.gov/
regulations/resources/cbi/study.html.
2
Micropolitan counties are those centered on an urban core with a
population between 10,000 and 50,000 people. There were 694 micropolitan counties in the United States in 2010, out of a total of 3,238.
1

FDIC Quarterly

27

2013, Volume 7, No. 4

that generally enjoyed high and stable earnings and low
rates of failure during the study period. It was this type
of steady earnings performance that enabled community banks to generate almost half of all the new equity
­capital they added during the study period through
retained earnings.

updated for this report using year-end 2012 data. Designating at the level of the bank holding company, the
definition is applied in two steps: (1) excluding banks
that do not engage in certain basic banking activities,
and (2) including banks that meet minimum requirements for lending and core deposit funding and that
conform to limits on the number and size of their banking offices and the number of states and large metropolitan areas in which they operate.6 The requirements
and limits of item (2) are waived for those institutions
with assets below a certain time-indexed size threshold
($1.12 billion in 2012), which are automatically considered to be community banks.7

As instructive as these long-term results are, they
merely set the stage for a more pressing question: How
will community banks fare in the post-crisis
environment?
This paper seeks to answer this question by extending
the results of the Study. It applies the community bank
definition from the Study to year-end 2012 data, and
recapitulates key elements of the analysis for 2012.
Consistent with the previous Study, it focuses on recent
trends in industry structure, balance sheet composition,
geography, earnings, and capital formation.

Although size remains one factor in our definition of a
community bank, it is not the only factor, as has been
the case in much of the previous research on this topic.
Moreover, where size-based metrics are employed in the
FDIC definition, they have been indexed over time to
adjust for increases in banking industry assets as well as
increases in the nominal level of economic activity.8
Establishing the definition in this way allows for meaningful distinctions between community and noncommunity banks across a 28-year period. It is also worth
noting that the FDIC’s community bank designations
for previous years have been updated to reflect annual
revisions to historical data; however, the changes to
historical designations as a result of data revisions were
relatively inconsequential. For example, of the 6,721
banking organizations reporting at year-end 2011, only
one had its community bank designation changed as a
result of revisions to historical data during 2012.

Trends observed in 2012 suggest a positive outlook for
the community banking sector. Overall, FDIC-insured
institutions have seen problem loans decline from the
peak levels of 2009. Net income has recently exceeded
pre-crisis levels even if profitability—as measured by
ROA—has not.5 The Study and other FDIC analyses
show that smaller institutions have tended to lag larger
ones in this respect, owing in part to their greater
dependence on loans secured by real estate. Community
banks continue to hold a majority of deposits in rural
and micropolitan areas, and remain an important source
of credit in many sectors. Community bank earnings
improved substantially in 2012 primarily because of
lower loss provisions and higher noninterest income.
Higher earnings, in turn, led to greater capital formation through retained earnings, which has traditionally
been the most consistent source of new capital for
community banks. While the recovery of the community banking sector remains incomplete, and in some
respects continues to lag that of noncommunity banks,
2012 represented the best year for community banks
since the onset of the financial crisis in 2007.

Table 1 depicts changes in the designations of community and noncommunity institutions between 2011 and
2012. The number of community bank charters fell by
255 (3.8 percent) during the year, while the number of
noncommunity bank charters fell by 19 (3.4 percent).
The following section explores structural change during
2012 in more detail.

Defining the Community Bank

For a complete description of the community bank definition
d­ eveloped for the FDIC Community Banking Study, see Appendix A of
the Study: http://www.fdic.gov/regulations/resources/cbi/report/
CBSI-A.pdf.
7
Analysis of these institutions shows that 92 percent of them would
have conformed to all of the requirements for inclusion as a community bank at year-end 2012 even if they had not been automatically
designated as community banks because of their size.
8
Between 1984 and 2012, both total assets of FDIC-insured institutions and nominal U.S. GDP rose by an approximate factor of four.
6

The FDIC Community Banking Study was conducted
using a definition of a community bank that emphasized both traditional banking activities and a limited
geographic scope of operations. This definition has been
Industry net income peaked at $215 billion in 2006. Industry net
income was $201 billion in 2012, the second-highest level on record.
5

FDIC Quarterly

28

2013, Volume 7, No. 4

Community Bank Developments in 2012
Table 1

Designation of Community Banking Organizations Using FDIC Research Criteria
2011

2012

6,357

6,141

organizations designated as
“community institutions”out of
6,721 banking organizations

2011
Asset Size
Threshold:

$4.2 trillion
in assets

$1.06 billion

83
small
organizations
excluded
$18.9 billion
in assets

249 organizations
$7.7 trillion in assets

27
large
organizations
excluded

$8.1 trillion in assets

$4.3 trillion
in assets

$655 billion in assets

314 organizations
$630 billion in assets
Size

32
large
organizations
excluded

organizations designated as
“community institutions” out of
6,501 banking organizations

6,043
organizations
$1.3 trillion
in assets

250 organizations

297 organizations

83
small
organizations
excluded

2012
Asset Size
Threshold:
$1.12 billion

5,844
organizations
$1.4 trillion
in assets

$20.1 billion
in assets

6,544 community bank charters
out of 7,083 total FDIC-insured
banking charters

6,799 community bank charters
out of 7,357 total FDIC-insured
banking charters
Source: FDIC.

Structural Change

Chart 1

The banking industry continued to experience a net
consolidation of charters during 2012, but at a slower
pace than that experienced in 2010 or 2011. The total
number of federally insured banks and thrifts fell by 274
(3.7 percent) during the year (see Chart 1), compared
with a 4.4 percent decline in 2010 and a 3.9 percent
decline in 2011. Meanwhile, the number of community
bank charters fell by 255 (3.8 percent) in 2012,
compared with 3.2 percent in 2010 and 3.1 percent
in 2011.

The Banking Industry Experienced Net Consolidation
in Every Year Since 1985
Year-Over-Year Percent Change in the Number of Bank and Thrift Charters

2%
1%

-3.7%

0%
-1%
-2%
-3%
1985–2012 Average:
-3.3%

-4%

Although the pace of industry consolidation has slowed
for two consecutive years, it continues at a rate that is
slightly higher than the historical average. Between
1984 and 2012, the number of insured institutions fell
at an average annual rate of 3.3 percent (Chart 1),
while the number of community bank charters fell at an
average rate of 3.1 percent. Net consolidation of banking charters has taken place in every year since 1985,
but slowed somewhat around 2000 before increasing
again during the recent financial crisis. As the effects of
the crisis recede, it remains to be seen whether charter
consolidation will continue at an above-average pace or
slow to the historically low rates experienced in the precrisis years. The answer depends on future trends in the
various components of charter consolidation, namely

FDIC Quarterly

-5%
-6%

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

Source: FDIC.

failures, intercompany mergers, intracompany consolidations, voluntary liquidations, and new charters.
The number of bank failures continued to fall in 2012,
but was still elevated compared with pre-crisis levels (see
Chart 2). A total of 51 institutions, all of which were
community banks, failed in 2012. This is down from 88
community bank failures in 2011, and down from a
cyclical peak of 144 failures in 2010. The community
bank failure rate, defined as the number of community

29

2013, Volume 7, No. 4

Chart 2

Chart 3
Failure Rates Have Moderated

The Number of Bank Failures Continues to Decline
Annual Number of Bank Failures

Failed Institutions as a Percent of All Institutions Reporting at the Prior Year-End

180

5%

160

Community Banks
Community Banks

140

4%

Noncommunity Banks

Noncommunity Banks

120

3%

100
80

2%

60
40

1%
0.75%

20
0

0.00%

0%
1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: FDIC.

Source: FDIC.

bank failures as a percent of all community banks at the
end of the previous year, fell to 0.75 percent in 2012
from 1.25 percent in 2011 (see Chart 3).

Chart 4

As has been the case throughout much of the post-crisis
period, most of the community banks that failed in
2012 were commercial real estate (CRE) lending
specialists.9 A total of 33 CRE specialist community
banks failed during the year, representing 64 percent of
all community bank failures (see Chart 4). This is down
from 79 CRE specialist community bank failures, 90
percent of total community bank failures, in 2011. The
high rate of failure among community bank CRE
specialists since 2008 illustrates both the shift of
community banks toward CRE lending after 2000 and
the vulnerability of this line of business to the downturn in U.S. real estate prices associated with the crisis.
CRE prices as measured by the Moody’s/Real Capital
Analytics Commercial Property Price Index bottomed
out in 2009, while residential home prices, as measured
by the Standard and Poor’s/Case-Shiller U.S. National
Home Price Index, hit a cyclical low in 2012. Through
the end of 2012, FDIC-insured institutions had charged
off $33 billion in CRE loans, and failures had begun to
moderate. These trends suggest that bank failures will
contribute less to the pace of industry consolidation in
the near future.

100%

CRE Specialists Accounted for the Majority of
Community Bank Failures in Recent Years

Percent of Community Bank Failures

No
Specialty

80%

Agricultural
Specialists

60%

C&I
Specialists

40%

CRE
Specialists

20%

MultiSpecialists

0%

Mortgage
Specialists

2008

2009

2010

2011

2012

Source: FDIC. Lending specialty groups are defined on page 5-3 of the FDIC Community
Banking Study.
Note: No community bank consumer lending specialists have failed since 2008.

After slowing in the post-crisis years, voluntary closings
picked up again in 2011 and 2012.10 Chart 5 and
Chart 6 show that the number of voluntary charter
closings among community banks, which averaged 243
per year between 2003 and 2008, reached a low of 102
in 2010. A total of 188 community bank charters closed
through voluntary deals in 2012, up from 148 in 2011.
Of these 188 closings, 142 were intercompany mergers,
35 were intracompany consolidations, and 11 were
voluntary liquidations.

CRE loans are composed of loans secured by multifamily residential
properties, construction and development loans, and loans secured by
nonfarm nonresidential properties. CRE lending specialists are institutions that either hold construction and development loans greater than
10 percent of assets or hold total CRE loans greater than 30 percent of
assets, and that do not meet any of the other single-specialty lender
criteria. Detailed community bank lending specialty group definitions
are available on page 5-3 of the FDIC Community Banking Study.
9

FDIC Quarterly

Transactions in which a charter exits the industry without failing are
referred to as voluntary charter consolidations. Voluntary charter
consolidations comprise intercompany mergers, intracompany charter
consolidations, and voluntary liquidations. The number of voluntary
liquidations is typically small, averaging seven per year since 1985.
10

30

2013, Volume 7, No. 4

Community Bank Developments in 2012
Chart 5

Chart 7

The Number of Voluntary Community Bank Closings
Increased in 2012

No New Institutions Were Chartered in 2012
Annual Number of New Charters

Annual Number of Voluntary Closings

400

250
Community Banks

350

Community Banks

200

Noncommunity Banks

Noncommunity Banks

300
250

150

200
100

150
100

50

50
0

0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: FDIC. Voluntary closings include intracompany consolidations, intercompany
mergers, and voluntary liquidations.

Chart 6

absence of any new banking charters. Chart 7 shows
how chartering activity—always cyclical in nature—
declined markedly after the onset of the crisis, and
ceased altogether in 2012.11 A number of factors may
have contributed to the steep drop-off in new charters
in this cycle, including the availability to investors of
hundreds of failed bank charters and the ongoing low
interest rate environment that has squeezed net interest
margins and profitability at many community banks
(see Comparative Financial Performance: Community
Versus Noncommunity Banks below).

The Voluntary Closure Rate Among Community Banks
Rose in 2012

Voluntarily Closed Institutions as a Percent of All Institutions Reporting at the Prior Year-End

25%

Community Banks
Noncommunity Banks

20%
15%
10%

6.3%

5%
0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: FDIC.

To the extent that temporary factors have been important in the cyclical decline in new chartering, it seems
likely that chartering activity will pick back up once
these factors begin to abate. As of November 2013,
there were two pending applications for deposit insurance by new community banks. In addition, the credit
quality of bank balance sheets continued to improve, as
evidenced by the decline in noncurrent loan rates for
virtually every loan type in 2012. As the number of
community bank failures has fallen by 65 percent from
its peak in 2010, the availability of charters through
failed bank acquisitions has been reduced.

2.8%

1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

Source: FDIC. Voluntary closings include intracompany consolidations, intercompany
mergers, and voluntary liquidations.

Chart 5 shows that the number of voluntary deals
among community banks in 2012 was lower than in any
of the pre-crisis years between 2003 and 2008. During
those years, a vibrant market for voluntary mergers—
many transacted at a premium to book value—was
viewed by many as a sign of the high value of the
community bank franchise. Chart 6 shows that the rate
of voluntary closure among community banks has
always been lower than that among noncommunity
banks, and this trend continued in 2012. Community
banks exited through this route at less than half the rate
of noncommunity banks in 2012. Chart 6 also shows
that the share of community banks exiting through
voluntary closure recovered in 2010 and 2011 to a level
more consistent with pre-crisis norms.

For now, signs point to slowing in the pace of consolidation among community banks and the banking industry
as a whole. Table 2 provides a summary of the factors
contributing to net consolidation during 2012. As
described above, failures are on the way down, voluntary
deals are on the way up, and there appears to be greater
interest in new banking charters. While gradual charter

Perhaps the most important factor contributing to the
net consolidation of the industry in 2012 was the
FDIC Quarterly

Two of the new charters issued in 2011 were “shelf charters,” used
at their inception to acquire failed banks.
11

31

2013, Volume 7, No. 4

Table 2
Change in the Number of Community and Noncommunity Banks Charters in 2012
Community
Noncommunity
Banks
Banks
All Institutions
Number of Institutions at Year-End 2011
Failures
Intercompany Mergers
Intracompany Consolidations
Other Closings
All Closings
New Charters
Net Reclassifications to/from Community Bank Status
Number of Institutions at Year-End 2012

6,799
-51
-142
-35
-11
-239
0
-16
6,544

558
0
-10
-21
-4
-35
0
16
539

7,357
-51
-152
-56
-15
-274
0
0
7,083

Source: FDIC.

Chart 8

consolidation has been prevalent among community
banks since the mid-1980s, the direction and pace of
future industry consolidation are far from clear.

Community Bank Assets Grew by 2.4 Percent in 2012
Billions of Dollars
$2,500

Community Bank Balance Sheet
$2,000

Even as the number of FDIC-insured institutions
declined in 2012, the total assets of both community
and noncommunity banks increased during the year.
Community bank assets grew by $47 billion (2.4
percent) to $2 trillion in 2012 (see Chart 8), while
noncommunity bank assets grew by $512 billion (4.3
percent) to $12.4 trillion.

$1,500

$299

+4.7%
Other Assets

$313

$450

+3.0%
Securities

$464

$1,224

+1.6%
Net Loans and Leases

$1,000

$500

Net loans and leases held by community banks grew by
1.6 percent in 2012. While this reversed the net decline
in community bank lending observed in 2011, it
remained below the 3.8 percent loan growth seen at
noncommunity banks in 2012. Community banks saw
expansion in agricultural, commercial and industrial
(C&I), and consumer lending in 2012, and they
continued to play a disproportionate role in providing
credit to local farms and businesses. Community banks
held 14 percent of industry assets at year-end 2012, but
held 46 percent of small loans to businesses, shares that
are unchanged from 2011.12

$0
Source: FDIC.

2011

$1,243

2012

offs tend to reduce outstanding loan balances, but high
volumes of noncurrent loans tend to discourage banks
from extending new credit while they are busy remediating problem loans.
The magnitude of the boom and subsequent bust in
community bank CRE balances can be seen by comparing their total CRE loan growth between 2002 and
2008 (+72 percent) and the rate of growth between
2008 and 2012 (–14 percent). The relationship between
high levels of problem loans and slow or negative
growth in community bank loan balances is best illustrated by C&D loans. As has been the case in recent
years, C&D loan balances showed the highest percentage decline of any community bank loan category in
2012 (–9.5 percent, see Table 3), while they continued
to show the highest rate of remaining noncurrent loans
at year-end 2012 (7.8 percent, see Table 4). The
­progress that has been made to date in addressing these
credit problems can be seen in the volume of total

Meanwhile, community banks saw another substantial
decline in their holdings of commercial real estate
loans, especially construction and development (C&D)
loans. It is in these portfolios that community banks
have experienced the highest levels of noncurrent loans
and the highest volumes of net loan charge-offs in the
years following the financial crisis. Not only do chargeSmall loans to businesses include loans secured by nonfarm
nonresidential properties and C&I loans in amounts under $1 million,
and farmland and agricultural production loans in amounts under
$500,000.
12

FDIC Quarterly

2012 Community Bank Asset Growth:
+2.4%

32

2013, Volume 7, No. 4

Community Bank Developments in 2012
Table 3
Changes in the Community Bank Balance Sheet, 2011–2012

Loan or Asset Category
Mortgage Loans*
Consumer Loans
Commercial Real Estate (CRE) Loans**
Construction and Development (C&D)
Loans
Commercial and Industrial (C&I) Loans
Agricultural Loans***
Other Loans and Leases
Less: Loan Loss Provisions and
Unearned Income
Net Loans and Leases
Securities
Other Assets
Total Assets

Year-End 2011
Dollars in
Percent of
Billions
Total Assets
$400.3
20.3%
$53.0
2.7%
$523.8
26.6%

Year-End 2012
Dollars in
Percent of
Billions
Total Assets
$404.6
20.0%
$54.4
2.7%
$517.2
25.6%

Change 2011–2012
Dollars in
Percent
Billions
Change
$4.4
1.1%
$1.3
2.5%
-$6.5
-1.2%

$83.8
$163.5
$85.5
$21.4

4.2%
8.3%
4.3%
1.1%

$75.9
$171.0
$92.5
$25.7

3.8%
8.5%
4.6%
1.3%

-$8.0
$7.5
$7.0
$4.3

-9.5%
4.6%
8.2%
19.9%

$23.5
$1,223.9
$450.2
$298.5
$1,972.6

1.2%
62.0%
22.8%
15.1%
100.0%

$22.3
$1,243.1
$463.5
$312.5
$2,019.1

1.1%
61.6%
23.0%
15.5%
100.0%

-$1.2
$19.2
$13.4
$14.0
$46.5

-5.2%
1.6%
3.0%
4.7%
2.4%

Source: FDIC.
* Mortgage loans include home equity lines of credit, junior liens, and other loans secured by residential real estate.
** CRE loans include construction and development loans, loans secured by multifamily properties, and loans secured by nonfarm, nonresidential real estate.
*** Agricultural loans include production loans and loans secured by farm real estate.

Table 4
Community Bank Noncurrent Rates, 2011–2012
Loan Category
Mortgage Loans*
Consumer Loans
Commercial Real Estate (CRE) Loans**
Construction and Development (C&D) Loans
Commercial and Industrial (C&I) Loans
Agricultural Loans***
All Loans and Leases

2011 Noncurrent
Rate
2.5%
0.9%
4.4%
11.2%
2.1%
1.0%
3.0%

2012 Noncurrent
Rate
2.3%
0.9%
3.3%
7.8%
1.7%
0.8%
2.4%

Change in
Noncurrent Rate
2011–2012
-0.2%
0.0%
-1.1%
-3.4%
-0.4%
-0.2%
-0.6%

Source: FDIC.
* Mortgage loans include home equity lines of credit, junior liens, and other loans secured by residential real estate.
** CRE loans include construction and development loans, loans secured by multifamily properties, and loans secured by nonfarm, nonresidential real estate.
*** Agricultural loans include production loans and loans secured by farm real estate.

C&D loan charge-offs that community banks have
made since 2007 ($21 billion) and the fact that their
noncurrent loan rate for C&D loans has declined by
more than 40 percent from its peak in the first quarter
of 2010.

historical levels, 1-to-4 family residential loan performance at community banks was better than that at
noncommunity banks. The 1-to-4 family noncurrent
rate at noncommunity banks actually rose to 8.9
percent in 2012 from 8.7 percent in 2011.

Other community bank loan categories also continue
to display elevated levels of problem loans, even as
noncurrent rates continue to recede. Some 2.3 percent
of 1-to-4 family residential mortgage loans held by
community banks were noncurrent at year-end 2012.
Although this represents a decline from 2.5 percent in
2011, the noncurrent rate for community bank 1-to-4
family residential mortgage loans never exceeded 1.6
percent between 1990 and 2008. While noncurrent
rates for many loan categories are high relative to

The condition of balance sheets is not the only factor
that influences loan volumes at community banks.
Loan demand also declined sharply during and after
the recession of 2007–2009, and has been slow to
recover since the recession ended. The Federal Reserve
Senior Loan Officer Opinion Survey showed that the
net percent of banks reporting stronger demand for
commercial loans on the part of small firms was consistently negative during a 13-quarter period that
extended from the end of 2006 through the end of

FDIC Quarterly

33

2013, Volume 7, No. 4

Table 5
Community Bank Share of Banking Offices and Total Deposits Located in Metro, Micro, and Rural Counties
Year
1992
2002
2012

Community Bank Share of Banking Offices,
by County Type (Percent)
Metro
Micro
Rural
Total Share
39%
65%
78%
46%
33%
59%
72%
40%
29%
57%
71%
36%

Community Bank Share of Total Deposits,
by County Type (Percent)
Metro
Micro
Rural
Total Share
31%
62%
75%
36%
21%
53%
71%
26%
14%
56%
71%
18%

Source: FDIC.
Note: Based on 2010 county designations made by the U.S. Office of Management and Budget. Deposit and office data are merger-adjusted to year-end.

2010. Since then, however, the net percent reporting
stronger demand has been positive in all but one quarter. These trends point to a gradual improvement in
loan demand, which should contribute to loan growth
at community banks beyond 2012.

counties by both measures since 1984. The relative
concentration of noncommunity banks in metropolitan
statistical areas (MSAs) is one of the factors that have
allowed these institutions to grow their assets ten times
faster than community banks since 1984.

The Geography of Community Banks

Comparative Financial Performance:
Community Versus Noncommunity Banks

As expected, the geographic characteristics of community banking changed little during 2012. While
community banks held just 14 percent of industry
assets at year-end, they continued to hold the majority of bank deposits in rural and micropolitan counties
(see Table 5). Community banks were three times
more likely than noncommunity banks to locate offices
in a nonmetro area in 2012, and were four times more
likely to operate offices in rural counties, as was the
case in 2011.

Community banks continued to improve their earnings
in 2012 following the severe downturn in profitability
and earnings that they experienced during and after
the financial crisis. Their aggregate pretax ROA rose
to 1.06 percent in 2012 from 0.74 percent in 2011
(see Chart 9). Moreover, the gap between community
and noncommunity bank profitability narrowed to
0.42 percent from 0.59 percent. Although the pretax
ROA of community banks has increased in each of
the past three years from a low of –0.13 percent in
2009, it remains well below the average of 1.5 percent
observed in the period 1992 through 2006. Likewise, although the disparity between community and
noncommunity bank earnings has narrowed, it is still
comparable to the gap that existed in 2005. It remains
to be seen whether this disparity is a persistent trend
or simply the result of a slower recovery on the part of
community banks.

In 2012, 615 U.S. counties (627 in 2011) would not
have had any physical banking offices operated by
FDIC-insured institutions if not for those operated by
community banks. Another 642 counties where community banks operated had fewer than three noncommunity banking offices present. This means that more than
1,200 U.S. counties (of 3,238 total), encompassing more
than 16 million in population, would have very limited
physical access to mainstream banking services without
the presence of community banks. Although the office
and deposit shares of community banks continue to
decline, they still play a leading role in providing financial services in many parts of the country.

Low interest rates continued to squeeze net interest
income in 2012 (see Chart 10). Community bank net
interest income fell to 3.37 percent of average assets in
2012 from 3.43 percent in 2011. Community banks still
generated higher net interest income than did noncommunity banks, which saw their net interest income fall
to 2.94 percent of average assets in 2012. As long as
short-term interest rates remain at zero, net interest
margins are likely to remain under pressure as higheryielding loans and securities come to maturity. Because
community banks earned 78 percent of their net operating revenue from net interest income in 2012, versus 61
percent for noncommunity banks, the squeeze on net

Noncommunity banks continued to hold a dominant
market share in the nation’s 1,169 metropolitan counties in 2012. Noncommunity banks operated 71 percent
of all banking offices and held 86 percent of total
deposits in metropolitan counties at year-end, with both
figures up slightly from 2011. As described in the Study,
these counties not only account for the vast majority of
U.S. population and gross domestic product (GDP), but
also have grown faster than rural and micropolitan
FDIC Quarterly

34

2013, Volume 7, No. 4

Community Bank Developments in 2012
Chart 9
Percent
2.5%

Chart 11
Pretax Return on Assets, 1985–2012

Noninterest Income to Average Assets, 1985–2012
Percent
3.0%

2.0%
1.48%

1.5%

Community Banks
Noncommunity Banks

2.5%

1.90%

2.0%

1.0%

1.5%

0.5%

Community Banks

0.96%

1.0%

1.06%

Noncommunity Banks

0.5%

0.0%
-0.5%

0.0%
1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Source: FDIC.

Source: FDIC.

Chart 10

Chart 12

Net Interest Income to Average Assets, 1985–2012

Gains on Asset Sales Drove an Increase in
Community Bank Noninterest Income in 2012

Percent
4.5%

Community Bank Noninterest Income as a Percent of Average Assets
1.2%

4.0%
3.37%

3.5%
3.0%

0.8%

2.94%

2.5%
2.0%

Community Banks

1.5%

Noncommunity Banks

1.0%
0.5%
0.0%

Gains on Asset Sales
Fiduciary Income

0.4%

Service Charges on
Deposit Accounts

0.2%

Other

Source: FDIC.

interest income has had a disproportionate impact on
overall community bank earnings.

0.82%

0.6%

0.0%

1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Source: FDIC.

2011

2012

percent in the first nine months of 2013.13 The higher
long-term interest rates observed through September
2013 will make it difficult for banks to replicate their
2012 gains in noninterest income.

Both community and noncommunity banks earned
higher levels of noninterest income in 2012. Community banks saw their ratio of noninterest income to
average assets rise from 0.82 percent in 2011 to 0.96
percent in 2012, while noncommunity banks saw
their ratio rise from 1.85 percent to 1.9 percent (see
Chart 11). Also, as depicted in Chart 12, virtually all of
the increase in community bank noninterest income
can be attributed to gains on asset sales, which were to
some extent facilitated by the decline in long-term
interest rates that occurred during the year. The tenyear Treasury yield fell from 2.8 percent in 2011 to 1.8
percent in 2012, before rising again to an average of 2.2

Community and noncommunity banks maintained
similar levels of noninterest expenses in 2012. Community banks reported noninterest expenses equal to 3.01
percent of average assets in 2012, versus 3 percent in
2011 (see Chart 13). Noncommunity banks reported
noninterest expenses of 2.99 percent of average assets in
2012, down from 3.05 percent in 2011. As described in
the Study, bank Call Report data do not facilitate the
breakdown of noninterest expenses into regulatory and

13

FDIC Quarterly

0.96%

1.0%

35

Source: Federal Reserve Board (Haver Analytics).

2013, Volume 7, No. 4

Chart 13

Chart 14
Efficiency Ratio, 1985–2012

Noninterest Expense to Average Assets, 1985–2012
Percent
90%

Percent
4.0%

80%

3.5%
3.0%
2.5%

3.01%

70%

2.99%

60%

69.6%

61.9%

50%

2.0%

40%

Community Banks

1.5%
1.0%

Community Banks

30%

Noncommunity Banks

Noncommunity Banks

20%

0.5%

10%

0.0%

0%
1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Source: FDIC.

Source: FDIC.

nonregulatory expenses. Appendix B of the Study
discusses the results of interviews with bankers related
to regulatory costs and overhead expenses.14 Although
the stability of overhead expenses is a positive trend for
the community banking sector, it does not preclude the
possibility that the regulatory component of these costs
could be rising.

Chart 15
Loan-Loss Provisions to Average Assets, 1985–2012
Percent
2.5%
2.0%

Noncommunity Banks

1.5%

A useful metric that relates the various elements of
income and expense is the efficiency ratio, or the ratio of
overhead expenses to net operating revenue.15 As
described in the Study, a sizable gap has emerged since
the late 1990s between the efficiency ratios of community and noncommunity banks. During that period,
community banks experienced a marked increase (deterioration) in their efficiency ratio, most of which was
attributable to the gradual decline of their net interest
income.

1.0%
0.43%

0.5%

0.33%

0.0%

1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

Source: FDIC.

r­ evenue—as has been the case in every year since
2010—the post-crisis trend continues to be a narrowing
of this efficiency gap. Despite this narrowing, declining
net interest income continued to put upward pressure
on the community bank efficiency ratio in 2012 (see
Table 6). It may prove difficult for community banks to
generate further improvements in this ratio until interest rates rise to levels more in line with historical norms.

The efficiency ratio of community banks improved in
2012, declining to 69.8 percent from 70.6 percent in
2011, while the efficiency ratio for noncommunity
banks improved to a smaller extent, declining to 61.9
percent from 62 percent (see Chart 14). These changes
reduced the efficiency gap between community and
noncommunity banks to 7.8 percentage points, or less
than one-half the size of this gap as recently as 2010.
While community banks on average remained less
­efficient than noncommunity banks in generating

For both community and noncommunity banks, a key
element of improved profitability in 2012 was the
continued rapid decline in loan-loss provisions.
Community bank loss provisions fell to $6.5 billion
(0.33 percent of average assets) in 2012 from $10.9
billion (0.56 percent) in 2011 and a peak of $22.5
billion (1.16 percent) in 2009 (see Chart 15). Noncommunity banks recorded loss provisions of $51.7 billion

For a discussion of regulatory costs at community banks, see:
http://www.fdic.gov/regulations/resources/cbi/report/CBSI-B.pdf.
15
Formally, the efficiency ratio is expressed as:
     Noninterest Expense
.
Efficiency Ratio =   
Net Interest Income + Noninterest Income  
14

FDIC Quarterly

Community Banks

36

2013, Volume 7, No. 4

Community Bank Developments in 2012
Table 6
Sources of Change in the Community Bank Efficiency Ratio, 2011–2012

Ratio
Net Interest Income
Assets
Noninterest Income
Assets
Noninterest Expense
Assets
Efficiency Ratio

2011

Change in Income or
Expense Ratio,
Percentage Points
2011–2012

2012

Contribution to Change
in Efficiency Ratio,
Percentage Points
2011–2012

3.43%

3.37%

-0.06

0.97

0.82%

0.96%

0.14

-2.30

3.00%

3.01%

0.02

0.40

70.6%

69.6%

-0.93

Source: FDIC.

Table 7
Community Bank Pretax Return on Assets (ROA) by Lending Specialty Group
Lending Specialty Group
Agricultural Specialists
Consumer Specialists
C&I Specialists
Mortgage Specialists
CRE Specialists
No Specialty
Multi-Specialists
Total

Year
2011

2006–2010
1.25%
0.89%
1.04%
0.64%
0.26%
1.05%
0.69%
0.61%

2012
1.38%
2.22%
0.89%
0.69%
0.36%
1.08%
0.72%
0.74%

1.51%
1.53%
1.30%
0.93%
0.82%
1.18%
1.17%
1.06%

All Years:
1985–2012
1.41%
1.27%
1.04%
1.00%
0.66%
1.27%
0.99%
1.03%

Source: FDIC. Lending specialty groups are defined on page 5-3 of the FDIC Community Banking Study.
Note: Figures represent weighted average pretax return on assets for federally insured community banks reporting in each group during the period.

underperformed other community bank lending
specialty groups, reflecting the ongoing effects of the
real estate downturn. These two specialty groups did
show a marked improvement in their profitability in
2012, mostly due to lower loan-loss provisions (see
Table 7). Nonetheless, consumer and agricultural
specialists continued to outperform other types of
community banks in 2012.

(0.43 percent of average assets) in 2012, down from
$66.6 billion (0.57 percent) in 2011 and a peak of
$141.4 billion (1.25 percent) in 2009.
Chart 15 shows that provision expenses of noncommunity banks far exceeded those of community banks at
their 2009 peak, and have declined faster since then.
As year-over-year reductions in provision expenses at
FDIC-insured institutions become progressively smaller
over time, growth in community bank earnings will
increasingly depend on their ability to increase
revenues.

Capital Formation at Community Banks16
Improved profitability at community banks in 2012 was
driven by higher levels of net income. Community
banks as a group generated $16.4 billion in net income
in 2012, up from $10.6 billion in 2011 and a crisis low
of –$2.8 billion in 2009. The sustained improvement in
community bank earnings since 2009 has once again
afforded these institutions the opportunity to generate
new capital through retained earnings. Community

Community banks are not a uniform group of institutions, and there has always been significant variation
in performance among community bank lending
specialty groups. The Study identified three lending
specialty groups (agricultural specialists, diversified
nonspecialty lenders, and consumer specialists) as
consistently outperforming other groups in terms of
pretax ROA during the 1984–2011 study period, while
CRE specialists underperformed for the study period as
a whole. During 2011, CRE and mortgage specialists

FDIC Quarterly

Although the term “capital formation” is frequently used in national
income accounting to describe increases in the stock of physical
capital, it is used here to represent additions to equity capital by
individual financial institutions.
16

37

2013, Volume 7, No. 4

Table 8
Total Additions to Equity Capital Through Retained Earnings and
New Capital Raised From External Sources, 2012

Bank Type
Community Banks
Noncommunity Banks
Total

Additions to Capital Through:
New Capital Raised From
Retained Earnings
External Sources
$ Billions
% of Total
$ Billions
% of Total
$7.5
69%
$3.4
31%
$37.3
84%
$7.0
16%
$44.8
81%
$10.4
19%

Total
$ Billions
$10.9
$44.3
$55.2

Source: FDIC.
Note: Figures are not adjusted to reflect merger activity.

Reserve’s Comprehensive Capital Analysis and Review
(CCAR) process or have moved cautiously in restoring
their dividends in the wake of the crisis.18

banks generated $7.5 billion in capital through retained
earnings in 2012 (see Table 8), up from $4.2 billion in
2011. Some 69 percent of the total increase in community bank capital in 2012 was generated through
retained earnings, while the remaining $3.4 billion
(31 percent of the total increase) was raised from
­external sources.

Despite the importance of retained earnings to capital formation at both community and noncommunity
banks, capital raising from external sources continues
to be important to both groups. During 2012, 549
community banks raised $3.4 billion in new capital
from external sources. This capped a five-year period
in which community banks as a group raised a total of
nearly $40 billion from the capital markets, and reflects
continued investor confidence in the community banking model. Altogether, this new capital represented 18
percent of the total equity capital held by community
banks at the end of 2012. In addition, none of the
$3.4 billion in external capital raised by community
banks during 2012 was obtained through participation
in either the government-sponsored Capital Purchase
Program, which stopped disbursing in 2009, or the
Small Business Lending Fund, which stopped disbursing
in 2011.

Although earnings were an important source of capital formation during 2012, community banks devoted
a smaller share of net income to retained earnings
during the year. Among community banks that earned
a profit for the year, the earnings retention ratio fell
to 51 percent in 2012 from 58 percent in 2011, with
the remaining income being paid out in dividends.
Although the community bank earnings retention
ratio remained near its ten-year average in 2012, it is
well below the average level of 62 percent reported
between 1984 and 2002. Meanwhile, noncommunity
banks continued to pay dividends at a much higher
rate than did community banks, retaining only 31
percent of 2012 earnings and paying out the remaining
69 percent in dividends.

With the capital obtained during 2012 through retained
earnings and from external sources, community banks
were able to increase their capitalization levels as
measured by both the leverage and total risk-based
­capital ratios (see Table 9).19 Community banks have
historically held higher levels of capital than have
noncommunity banks, and this pattern continued in
2012. At the end of the year, community banks held
equity capital equal to 10.20 percent of total assets,
compared with 8.97 percent for noncommunity banks.

Community banks historically have been more reliant
than noncommunity banks on capital raised through
retained earnings, but the opposite was true in 2012.17
Noncommunity banks generated $37.3 billion in
retained earnings during the year, accounting for 84
percent of their total additions to equity capital. Part of
the success by noncommunity banks in generating
retained earnings is attributable to a more rapid recovery in their net income following the crisis, from a low
of –$7.1 billion in 2009 to $124.7 billion in 2012. In
addition, some of the nation’s largest banks either
remain unable to pay dividends under the Federal

For details on the CCAR process and the Federal Reserve’s dividend
guidance to participating large banking organizations, see: http://
www.federalreserve.gov/newsevents/press/bcreg/20130314a.htm.
19
It should be noted that banks report other changes to equity capital,
some of which are relatively large, but these changes do not represent
net capital formation and are not part of the analysis in this chapter.
18

For a historical comparison of capital raised from retained earnings
by community and noncommunity banks, see Table 6.1 of the FDIC
Community Banking Study.
17

FDIC Quarterly

38

2013, Volume 7, No. 4

Community Bank Developments in 2012
Table 9
Capital Ratios at Community and Noncommunity Banks, 2011–2012
Leverage Ratio
Total RBC Ratio

Bank Type
Community Banks
Noncommunity Banks
Community Banks
Noncommunity Banks

Year-End 2011
10.02%
8.91%
16.27%
15.16%

Year-End 2012
10.20%
8.97%
16.47%
14.89%

Source: FDIC. The leverage ratio measures common equity, certain types of preferred equity, and retained earnings as a percentage of total assets. The total risk-based capital ratio uses a
broader regulatory definition of capital and adjusts total assets to reflect a range of on- and off-balance-sheet exposures.
Note: Capital ratios for 2011 are adjusted to account for acquisitions that occurred in 2012.

The community bank total risk-based capital ratio at
year-end 2012 was 16.47 percent, compared with 14.89
percent at noncommunity banks.

Conclusion

however, and future earnings growth will eventually
need to be based on increases in net interest income.
Even so, community banks were able to augment their
equity capital by $10.9 billion during 2012, of which
$7.5 billion was derived from retained earnings.

By many measures, 2012 was the best year for community banks since the beginning of the financial crisis.
The number and rate of community bank failures
declined, even as voluntary community bank closures
increased. Although there were no new institutions
chartered in 2012, recent signs point to renewed interest in new bank charters. Community banks continued
to strengthen their balance sheets in 2012 by reducing
problem assets and increasing capital levels. Although
community bank assets grew at a slower rate than did
those of noncommunity banks, the improvement in
credit performance at community banks made it possible for them to achieve a net growth rate of 2.4 percent
of total assets for the year.

Despite their relatively low 14 percent share of banking
industry assets, community banks continue to play an
important role in the U.S. financial system. At year-end
2012, community banks represented 92 percent of
FDIC-insured banking charters and 95 percent of U.S.
banking organizations, and held 46 percent of the
industry’s small loans to farms and businesses—all
percentages that were unchanged from 2011. Additionally, they continue to hold the majority of deposits in
offices located in rural and micropolitan areas, and
there were 615 U.S. counties in 2012 where the only
physical banking offices were those operated by community banks.
The ability to generate capital and support balanced
growth through retained earnings has traditionally been
a recipe for long-term success for many community
banks. Although operating conditions remain challenging on a number of fronts, these developments mark
continued progress in the community banking sector’s
recovery from the effects of the financial crisis.

Community bank earnings continued to recover in
2012, with net income totaling $16.4 billion—the
second-highest annual figure on record. Pretax ROA
exceeded 1 percent for the first time since 2007, and
the profitability gap between community and noncommunity banks narrowed by 17 basis points from 2011.
The improvement in community bank profitability was
driven by higher noninterest income and lower loss
provisions, which more than offset a decline in net
interest income. The factors that drove increased
­profitability in 2012 may prove to be short-lived,

FDIC Quarterly

Author:

39

Benjamin R. Backup
Economic Analyst
Division of Insurance and Research

2013, Volume 7, No. 4