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FDIC Quarterly
Quarterly Banking Profile:
Third Quarter 2015
Financial Performance and
Management Structure of
Small, Closely Held Banks

2015, Volume 9, 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 Editor	

Richard A. Brown

Managing Editors	
	
	

Matthew Green
Jack Reidhill
Philip A. Shively

Editors	
	
	
	

Clayton Boyce
Peggi Gill
Frank Solomon
Kathy Zeidler

Publication Manager	

Lynne Montgomery

Media Inquiries	

(202) 898-6993

FDIC Quarterly
2015, Volume 9, Number 4

Quarterly Banking Profile: Third Quarter 2015
FDIC-insured institutions reported aggregate net income of $40.4 billion in the third quarter of 2015, up
$1.9 billion (5.1 percent) from a year earlier. The increase in earnings was mainly attributable to a $3.2
billion decline in noninterest expenses, as itemized litigation expenses at large banks were $2.7 billion
lower than a year ago. Of the 6,270 insured institutions reporting third quarter financial results, more
than half (58.9 percent) reported year-over-year growth in quarterly earnings. The proportion of banks
that were unprofitable during the third quarter fell to 5 percent, down from 6.6 percent a year earlier and
the lowest since the first quarter of 2005. See page 1.

Community Bank Performance
Community banks—which represent 93 percent of insured institutions—reported net income of $5.2
billion in the third quarter, up $363.4 million (7.5 percent) from one year earlier. The increase was
driven by higher net interest income and noninterest income, and lower provision expense. The
12-month growth rate in loan balances at community banks was 8.5 percent, almost twice the rate of
noncommunity banks. Asset quality indicators continued to improve, and community banks accounted
for 44 percent of small loans to businesses. See page 15.

Insurance Fund Indicators
Insured deposits increased by 1.1 percent in the third quarter of 2015. The DIF reserve ratio rose to
1.09 percent on September 30, 2015, up from 1.06 percent at June 30, 2015, and 0.88 percent at
September 30, 2014. One FDIC-insured institution failed during the quarter. See page 23.

Featured Article:
Financial Performance and Management Structure of
Small, Closely Held Banks
Closely held banks may face operational challenges in raising external capital and recruiting future
managers, especially in rural areas. At the same time, closely held banks may have certain operational
advantages, including the ability to focus on long-term goals and to minimize principal-agent problems
that may arise from the separation of ownership and operational control. This paper compares the performance of closely and widely held banks as identified in a survey of FDIC bank examiners and finds that
closely held banks do not appear, on net, to be underperforming widely held banks in recent years.
Closely held banks where the day-to-day manager is a member of the ownership group seem to outperform
banks with a hired manager. The survey of bank examiners in three FDIC supervisory Regions was used to
identify the ownership and management structure of more than 1,350 community banks. The survey
results suggest that almost 75 percent of community banks in these Regions can be regarded as closely
held, typically on the basis of family or community ties. See page 38.

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 2015
INSURED INSTITUTION PERFORMANCE
■	 Quarterly Income of $40.4 Billion Is 5 Percent Higher Than the

Year-Ago Quarter
■	 Lower Noninterest Expenses Are Key to Higher Industry Earnings
■	 Industry Revenue Is Largely Unchanged From the Year Before
■	 12-Month Loan Growth Rate Rises to 5.9 Percent

Earnings Rise, Profitability Remains Flat

Revenues Increase at Most Banks

Reductions in expenses for litigation reserves
outweighed weakness in net operating revenue at large
banks as third quarter net income for FDIC-insured
institutions totaled $40.4 billion. This represents
an increase of $1.9 billion (5.1 percent) from the
$38.4 billion reported in third quarter 2014. Well over
half of all banks, or 58.9 percent, reported higher quarterly earnings than the year-ago quarter. The proportion of banks that were unprofitable fell to 5 percent,
compared with 6.6 percent in third quarter 2014. The
average return on assets was essentially unchanged at
1.02 percent, versus 1.01 percent the year before.

Net operating revenue—the sum of net interest income
and total noninterest income—was only $488 million
(0.3 percent) higher than in third quarter 2014. Net
interest income was $1.8 billion (1.7 percent) above
the year-ago level, while noninterest income was
$1.3 billion (2 percent) lower. The year-over-year
decline in quarterly noninterest income reflects lower
income from asset servicing, reduced gains from loan
sales, and lower trading income. These weaknesses were
most evident among the largest banks. Three of the four
largest banks reported year-over-year declines in net
operating revenue totaling $3.3 billion (6.3 percent).
However, for the industry as a whole, more than two
out of every three institutions (68.8 percent) reported
increased net operating revenue, and the median
growth rate was 3.6 percent.

Chart 1

Chart 2
Unprofitable Institutions and Institutions
With Increased Earnings

Quarterly Net Income

Billions of Dollars
$50

All FDIC-Insured Institutions

$40
$30

28.7 28.5
20.9
17.4

$20
$10

Percentage of Institutions With Year-Over-Year
Quarterly Income Growth

60

25.3

50
40
30

-1.7
-6.1
-12.6

-$20

23.8
21.4

70

2.1

$0
-$10

Percentage of All FDIC-Insured Institutions
80

43.0
40.3
40.4
39.8 40.1
39.8
38.4
38.2
37.5
36.5
36.1 37.3
35.2 34.8 34.5 34.4

Securities and Other Gains/Losses, Net

20

Net Operating Income

10

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
2009
2010
2011
2012
2013
2014
2015

0

Source: FDIC.

FDIC Quarterly	

Percentage of Institutions With Quarterly Losses

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: FDIC.

1

2015, Volume 9, No. 4

Expenses Improve at Large Banks

Loan Losses Decline Further

Total noninterest expense was $3.2 billion (2.9 percent)
less than third quarter 2014, although fewer than one in
three banks (31.4 percent) reported reduced expenses.
Itemized litigation expenses at a few large banks were
$2.7 billion lower, and charges for goodwill impairment
declined by $578 million (45.4 percent). Expenses
for salaries and employee benefits fell by $199 million
(0.4 percent), as insured institutions reported 10,178
fewer employees than in the year-ago quarter.

Loan losses were lower than third quarter 2014. Net
charge-offs (NCOs) totaled $8.7 billion in the third
quarter, down $569 million (6.2 percent) compared
with the year earlier. This is the 21st consecutive quarter in which NCOs have registered a year-over-year
decline. The quarterly NCO rate fell to 0.4 percent
from 0.45 percent in third quarter 2014. This is the
lowest quarterly NCO rate for the industry since third
quarter 2006. NCOs were lower in most major loan
categories. One exception was loans to commercial and
industrial (C&I) borrowers, where NCOs increased by
$231 million (25.3 percent).

Margins Remain Near Historic Low
The industry posted an average net interest margin
(NIM) of 3.08 percent, below the 3.15 percent average
­
in third quarter 2014. However, this is the second
quarter in a row that the industry NIM has been
above the 30-year low of 3.02 percent reached in first
quarter 2015.

Noncurrent Balances Improve Across Most
Loan Categories
The amount of loans that were noncurrent (90 days or
more past due or in nonaccrual status) fell for the 22nd
quarter in a row. Between the end of June and the end
of September, noncurrent loan balances declined by
$5.5 billion (3.8 percent). However, noncurrent C&I
loans increased for a third consecutive quarter, rising
by $1.5 billion (13.8 percent). The average noncurrent
loan rate declined from 1.69 percent to 1.61 percent
during the quarter, and is now at the lowest level since
year-end 2007.

Loss Provisions Continue to Trend Up
For a fifth consecutive quarter, loan-loss provisions
were higher than a year ago. Banks set aside $8.5 billion
in the third quarter to cover loan losses, which was
$1.3 billion (17.9 percent) more than in third quarter 2014. Slightly more than one-third of all banks,
or 34.3 percent, reported year-over-year increases in
loss provisions.

Chart 3

Chart 4
Noncurrent Loan Rate and Quarterly Net Charge-Off Rate

Quarterly Net Operating Revenue
Billions of Dollars
$200

All FDIC-Insured Institutions

$180
5

$160
$140
$120

3

$80
$40

Noncurrent Loan Rate

4

Quarterly Noninterest Income

$100
$60

All FDIC-Insured Institutions

Percent
6

2
Quarterly Net Interest Income

1

$20

Quarterly Net Charge-Off Rate
0
2006

$0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: FDIC.

FDIC Quarterly	

2007

2008

2009 2010

2011 2012

2013

2014 2015

Source: FDIC.

2

2015, Volume 9, No. 4

Quarterly Banking Profile
$4.8 billion. Banks declared $25.6 billion in dividends
in the quarter, only $44 million (0.2 percent) more
than in third quarter 2014. At the end of the quarter,
98.8 percent of all insured institutions, representing
99.9 percent of total industry assets, met or exceeded
the highest capital requirements as defined for Prompt
Corrective Action purposes.

Banks Increase Reserves for Commercial Loans
Banks reduced their loan-loss reserves for the 21st
consecutive quarter, as NCOs of $8.7 billion exceeded
the $8.5 billion in provisions that banks added to
reserves. Aggregate loan-loss reserves declined by
$1.1 billion (0.9 percent) during the three months
ended September 30. The industry’s ratio of reserves
to total loans and leases declined from 1.4 percent
to 1.37 percent. This is the lowest level for this ratio
since the end of 2007. The coverage ratio of reserves to
noncurrent loans rose for a 12th consecutive quarter,
from 82.7 percent at the end of June to 85.2 percent
at the end of September, as the decline in noncurrent
loan balances outweighed the reduction in reserves.
Institutions with more than $1 billion in assets, which
report disaggregated reserves, increased their reserves
for non-real estate commercial loans by $989 million
(3.4 percent), even as they reduced their total reserves
by $819 million (0.8 percent).

Commercial Real Estate Loans Lead Asset Growth
Total assets increased by only $46.5 billion
(0.3 percent) during the quarter as banks reduced their
inventories of cash and balances due from depository institutions by $56.4 billion (3.1 percent). Loans
and leases increased by $95.3 billion (1.1 percent),
led by nonfarm nonresidential real estate loans (up
$23.8 billion, 2 percent), multifamily residential real
estate loans (up $13.9 billion, 4.4 percent), credit card
balances (up $13.6 billion, 1.9 percent), auto loans (up
$10.8 billion, 2.7 percent), and real estate construction
and development loans (up $10.3 billion, 4 percent).
Loans to small businesses and farms rose by $1.6 billion
(0.2 percent). Banks increased their investment securities by $25.9 billion (0.8 percent), with most of the
growth consisting of an increase in mortgage-backed
securities (up $31.2 billion, 1.7 percent).

Retained Earnings Bolster Equity Growth
Total equity capital increased by $21.5 billion
(1.2 percent) in the third quarter, as retained earnings
contributed $14.7 billion to capital growth. Accumulated other comprehensive income increased by

Chart 5

Chart 6
Quarterly Change in Loan Balances

Capital Ratios

All FDIC-Insured Institutions

Percent
18

237
203

$250

16

$200
$150

14

196

221*

189

178

146

134

108

$100

12

66

$50

43

61

67
28

$0

10

6

-7-14
-63

-$100

Total Risk-Based Capital Ratio

118
102
91
74 70
65

24
-6

-$50

8

-107
-116 -109
-133
-140

-$150

185
149
95

38

51

53

-37

-126

Tier 1 Risk-Based Capital Ratio

2008

2009

2010

2011

-$250

Core Capital (Leverage) Ratio

2

-$200

Equity to Assets Ratio

4

0
2007

All FDIC-Insured Institutions

Billions of Dollars
$300

Source: FDIC.
* 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.

2012

2013

2014

2015

Source: FDIC.

FDIC Quarterly	

3

-210

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2015, Volume 9, No. 4

Retail Deposits Fund Balance Sheet Growth

New Charter Is Only Second Start-Up in
Almost Five Years

Total deposits increased by $58 billion (0.5 percent)
during the quarter, with foreign office deposits falling
by $4.7 billion (0.3 percent) and deposits in domestic
offices rising by $62.7 billion (0.6 percent). Most of
the deposit growth consisted of smaller-denomination
deposits. Estimated insured deposits increased by
$69.1 billion (1.1 percent). Banks reduced their
nondeposit liabilities by $32.8 billion as borrowings
from Federal Home Loan Banks fell by $18.3 billion
(3.9 percent) and securities sold under repurchase
agreements declined by $17.7 billion (6.3 percent).

The number of FDIC-insured commercial banks and
savings institutions filing quarterly financial results
declined from 6,348 to 6,270 during the third quarter.
Merger transactions absorbed 72 institutions; there was
one insured institution failure, and one new charter was
added. This is only the second new charter (excluding
charters created to absorb failed banks) of an FDICinsured institution since December 2010. During the
quarter, the number of full-time equivalent employees
at FDIC-insured institutions declined from 2,042,405 to
2,038,462. The number of banks on the FDIC’s “Problem List” declined from 228 to 203, and total assets of
“problem” banks fell from $56.5 billion to $51.1 billion.
Author:	 Ross Waldrop, Senior Banking Analyst
	
Division of Insurance and Research
	
(202) 898-3951

Chart 7

Chart 8
Quarterly Change in Asset Funding

Billions of Dollars

Number and Assets of Banks on the “Problem List”

All FDIC-Insured Institutions

$500

Assets (Billions of Dollars)
$500

Equity Capital
Nondeposit Liabilities
Deposits

Number
1,000

Number of Problem Banks

$450

900

$400

800

$200

$350

700

$100

$300

600

$400
$300

$0

$250

500

-$100

$200

400

-$200

$150

203 300

-$300

$100

-$400

$50

-$500
2007

2008

2009

2010

2011

2012

2013

2014

200
51

$0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

2015

Source: FDIC.

FDIC Quarterly	

Problem Bank Assets

100
0

Source: FDIC.

4

2015, Volume 9, 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��������������������������������������������������������������������������������������

2015**
1.05
9.33
9.61
0.99
0.42
2.94
3.05
5.88
6,270
5,410
860
4.78
203
$51
6
0

2014**
1.03
9.17
9.51
1.29
0.49
5.10
3.15
2.07
6,589
5,670
919
6.60
329
$102
14
0

2014
1.01
9.01
9.45
1.20
0.49
5.59
3.14
-0.73
6,509
5,607
902
6.28
291
$87
18
0

2013
1.07
9.54
9.40
1.63
0.69
1.94
3.26
12.83
6,812
5,847
965
8.15
467
$153
24
0

2012
1.00
8.90
9.15
2.20
1.10
4.02
3.42
17.76
7,083
6,072
1,011
11.00
651
$233
51
0

2011
0.88
7.79
9.07
2.61
1.55
4.30
3.60
43.60
7,357
6,275
1,082
16.23
813
$319
92
0

2010
0.65
5.85
8.89
3.11
2.55
1.77
3.76
1594.34
7,658
6,519
1,139
22.15
884
$390
157
0

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

TABLE II-A.  Aggregate Condition and Income Data, All FDIC-Insured Institutions
3rd Quarter
2015
6,270
2,038,462

2nd Quarter
2015
6,348
2,042,405

3rd Quarter
2014
6,589
2,048,640

%Change
14Q3-15Q3
-4.8
-0.5

$15,800,219
4,307,188
1,887,013
1,199,543
266,088
471,539
1,802,149
1,453,749
714,790
79,159
1,001,990
1,942
8,642,292
118,558
8,523,734
3,303,921
16,118
356,949
3,599,496

$15,753,685
4,261,412
1,880,064
1,175,789
255,774
477,910
1,798,015
1,422,688
701,190
76,344
990,420
1,925
8,546,955
119,646
8,427,309
3,278,029
17,515
359,993
3,670,840

$15,348,842
4,136,131
1,838,276
1,133,409
230,477
496,130
1,672,435
1,382,419
683,022
72,926
898,107
1,922
8,160,096
125,254
8,034,841
3,166,081
24,891
363,934
3,759,095

2.9
4.1
2.7
5.8
15.5
-5.0
7.8
5.2
4.7
8.5
11.6
1.0
5.9
-5.3
6.1
4.4
-35.2
-1.9
-4.2

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

15,800,219
11,990,437
10,649,105
1,341,332
1,382,904
92,163
537,619
1,797,096
1,790,375

15,753,685
11,932,441
10,586,399
1,346,042
1,430,708
92,571
522,235
1,775,730
1,768,861

15,348,842
11,596,585
10,172,707
1,423,878
1,393,698
97,389
534,340
1,726,830
1,718,404

2.9
3.4
4.7
-5.8
-0.8
-5.4
0.6
4.1
4.2

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���������������������������������������������������������������������������������������
First Three
INCOME DATA
Quarters 2015
Total interest income�������������������������������������������������������������������
$356,366
Total interest expense�����������������������������������������������������������������
34,684
	
Net interest income��������������������������������������������������������������
321,683
Provision for loan and lease losses��������������������������������������������
24,958
Total noninterest income�������������������������������������������������������������
190,567
Total noninterest expense�����������������������������������������������������������
312,520
Securities gains (losses)�������������������������������������������������������������
2,895
Applicable income taxes�������������������������������������������������������������
54,356
Extraordinary gains, net��������������������������������������������������������������
49
	
Total net income (includes minority interests)���������������������
123,360
		
Bank net income������������������������������������������������������������
122,952
Net charge-offs����������������������������������������������������������������������������
26,555
Cash dividends����������������������������������������������������������������������������
77,187
Retained earnings�����������������������������������������������������������������������
45,766
	
Net operating income�����������������������������������������������������������
121,294

61,158
139,170
74,153
1,818,696
14,169,513
455,477
6,802,991
16,865,318
846,683
194,663,554
First Three
Quarters 2014
$351,521
35,654
315,867
21,554
188,064
315,187
2,347
53,299
-116
116,121
115,639
29,670
67,323
48,316
114,558

(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��������������������������������������������������������������������������������������������������������



FDIC Quarterly	

59,144
144,702
76,828
1,787,500
14,110,622
473,738
6,680,672
17,780,968
873,089
201,004,777
3rd Quarter
%Change
2015
1.4
$120,289
-2.7
11,545
1.8
108,744
15.8
8,501
1.3
63,255
-0.9
105,558
23.3
838
2.0
18,278
N/M
-34
6.2
40,466
6.3
40,356
-10.5
8,675
14.7
25,643
-5.3
14,713
5.9
39,932

66,207
171,923
89,190
1,718,461
13,695,294
443,157
6,435,142
18,187,509
967,831
243,042,211
3rd Quarter
2014
$118,779
11,840
106,940
7,210
64,571
108,761
755
17,661
-112
38,522
38,411
9,244
25,599
12,812
38,076

-7.6
-19.1
-16.9
5.8
3.5
2.8
5.7
-7.3
-12.5
-19.9
%Change
14Q3-15Q3
1.3
-2.5
1.7
17.9
-2.0
-3.0
11.0
3.5
N/M
5.0
5.1
-6.2
0.2
14.8
4.9

N/M - Not Meaningful

5

2015, Volume 9, No. 4

TABLE III-A.  Third Quarter 2015, All FDIC-Insured Institutions
Asset Concentration Groups*
THIRD QUARTER
All Insured
  (The way it is...)
Institutions
Number of institutions reporting�����������������������
6,270
	
Commercial banks�������������������������������������
5,410
	
Savings institutions�����������������������������������
860
Total assets (in billions)������������������������������������
$15,800.2
	
Commercial banks�������������������������������������
14,726.6
	
Savings institutions�����������������������������������
1,073.6
Total deposits (in billions)���������������������������������
11,990.4
	
Commercial banks�������������������������������������
11,163.0
	
Savings institutions�����������������������������������
827.4
Bank net income (in millions)���������������������������
40,356
	
Commercial banks�������������������������������������
37,568
	
Savings institutions�����������������������������������
2,788
 
Performance Ratios (annualized, %)
Yield on earning assets������������������������������������
3.40
Cost of funding earning assets������������������������
0.33
	
Net interest margin������������������������������������
3.08
Noninterest income to assets���������������������������
1.61
Noninterest expense to assets�������������������������
2.68
Loan and lease loss provision to assets����������
0.22
Net operating income to assets�����������������������
1.01
Pretax return on assets������������������������������������
1.49
Return on assets�����������������������������������������������
1.02
Return on equity�����������������������������������������������
9.09
Net charge-offs to loans and leases����������������
0.40
Loan and lease loss provision to
98.00
  net charge-offs����������������������������������������������
Efficiency ratio��������������������������������������������������
60.16
% of unprofitable institutions����������������������������
5.02
% of institutions with earnings gains����������������
58.93
 
Structural Changes
	
New reporters��������������������������������������������
1
	
Institutions absorbed by mergers�������������
72
	
Failed institutions��������������������������������������
1
 
PRIOR THIRD QUARTERS
 
  (The way it was...)
Return on assets (%)��������������������������������2014
1.01
	
��������������������������������������2012
1.06
	
��������������������������������������2010
0.72
Net charge-offs to loans & leases (%)�����2014
	
��������������������������������������2012
	
��������������������������������������2010

0.45
1.18
2.38

Credit
Card
International Agricultural Commercial
Banks
Banks
Banks
Lenders
14
4
1,494
3,124
12
4
1,477
2,812
2
0
17
312
$519.6
$3,836.6
$274.8
$5,508.6
411.5
3,836.6
269.1
5,120.2
108.0
0.0
5.7
388.4
296.7
2,701.6
225.2
4,285.2
218.2
2,701.6
222.0
4,001.7
78.5
0.0
3.2
283.5
3,647
8,114
252
13,550
2,677
8,114
217
12,717
970
0
34
833

Mortgage Consumer
Lenders
Lenders
515
57
123
43
392
14
$416.3
$184.5
145.0
93.4
271.3
91.1
317.3
154.3
117.7
77.8
199.6
76.5
599
490
450
264
149
225

Other
Specialized
All Other
<$1 Billion
<$1 Billion
337
663
300
584
37
79
$54.8
$118.3
48.8
101.0
6.1
17.3
43.7
99.5
39.6
85.4
4.1
14.1
349
224
157
197
192
27

All Other
>$1 Billion
62
55
7
$4,886.7
4,701.0
185.8
3,867.1
3,699.0
168.0
13,132
12,775
356

10.65
0.96
9.70
4.39
6.44
2.41
2.83
4.50
2.83
19.11
2.61

2.59
0.29
2.29
1.78
2.52
0.12
0.83
1.16
0.84
8.50
0.49

4.17
0.46
3.71
0.67
3.43
0.10
0.35
0.61
0.37
3.19
0.08

3.66
0.38
3.28
1.28
2.71
0.14
0.99
1.40
0.99
8.44
0.20

3.18
0.63
2.55
0.53
2.18
-0.02
0.54
0.82
0.57
4.93
0.12

4.16
0.45
3.71
1.38
2.77
0.47
1.07
1.69
1.08
10.52
0.58

3.02
0.35
2.66
6.93
5.81
0.03
2.53
3.56
2.55
16.65
0.19

3.91
0.40
3.51
1.00
3.21
0.10
0.73
0.96
0.76
6.31
0.18

2.90
0.18
2.72
1.65
2.33
0.17
1.06
1.62
1.08
9.47
0.37

120.42
47.27
0.00
50.00

68.83
65.81
0.00
75.00

199.68
60.57
2.41
57.30

98.90
63.21
5.06
62.32

-26.37
73.85
9.51
54.95

109.22
55.51
7.02
56.14

54.53
61.93
9.79
48.96

101.84
75.41
5.13
54.00

94.57
55.80
1.61
70.97

0
0
0

0
1
0

0
8
0

0
57
1

0
2
0

0
2
0

1
0
0

0
1
0

0
1
0

3.10
3.19
2.04

0.79
0.98
0.63

1.28
1.36
1.08

0.95
0.92
0.35

0.83
0.75
0.70

1.18
1.67
1.52

2.12
1.42
1.94

0.92
1.04
0.89

0.96
1.01
0.93

2.62
3.53
8.94

0.68
1.74
2.05

0.09
0.23
0.58

0.25
0.74
1.96

0.15
0.76
1.33

0.57
1.26
1.97

0.30
0.42
0.98

0.24
0.49
0.52

0.26
1.07
1.64

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

FDIC Quarterly	

6

2015, Volume 9, No. 4

Quarterly Banking Profile
TABLE III-A.  Third Quarter 2015, All FDIC-Insured Institutions
Asset Size Distribution
THIRD QUARTER
All Insured
  (The way it is...)
Institutions
Number of institutions reporting�����������������������������
6,270
	
Commercial banks�������������������������������������������
5,410
	
Savings institutions�����������������������������������������
860
Total assets (in billions)������������������������������������������ $15,800.2
	
Commercial banks�������������������������������������������
14,726.6
	
Savings institutions�����������������������������������������
1,073.6
Total deposits (in billions)���������������������������������������
11,990.4
	
Commercial banks�������������������������������������������
11,163.0
	
Savings institutions�����������������������������������������
827.4
Bank net income (in millions)���������������������������������
40,356
	
Commercial banks�������������������������������������������
37,568
	
Savings institutions�����������������������������������������
2,788

Geographic Regions*

Less Than
$100
$1 Billion
Greater
$100
Million to
to
Than
Million
$1 Billion $10 Billion $10 Billion New York
1,752
3,812
596
110
780
1,542
3,289
486
93
403
210
523
110
17
377
$102.7
$1,194.8
$1,642.8 $12,859.9
$3,018.8
90.9
1,009.4
1,358.5
12,267.8
2,571.6
11.8
185.4
284.3
592.1
447.2
85.8
991.7
1,296.0
9,616.9
2,246.7
76.6
845.4
1,083.5
9,157.5
1,920.4
9.1
146.4
212.5
459.4
326.3
249
3,115
4,426
32,566
6,743
216
2,653
3,826
30,872
6,033
32
461
600
1,694
710

Atlanta
778
705
73
$3,323.9
3,250.7
73.3
2,594.6
2,536.5
58.2
8,424
8,548
-124

Chicago
1,351
1,129
222
$3,531.9
3,421.6
110.3
2,539.4
2,459.1
80.3
8,141
7,775
367

Kansas
City
1,559
1,497
62
$3,436.7
3,382.0
54.7
2,606.2
2,564.5
41.8
9,919
9,810
109

San
Dallas
Francisco
1,319
483
1,236
440
83
43
$940.8
$1,548.1
831.9
1,268.8
108.9
279.3
775.8
1,227.6
686.1
996.5
89.7
231.1
2,654
4,475
2,311
3,091
343
1,383

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����������������������

3.40
0.33
3.08
1.61
2.68
0.22
1.01
1.49
1.02
9.09
0.40

4.16
0.44
3.72
1.23
3.46
0.09
0.95
1.11
0.97
7.63
0.16

4.18
0.46
3.72
1.18
3.21
0.10
1.03
1.34
1.05
9.29
0.15

4.18
0.40
3.78
1.19
2.91
0.20
1.08
1.56
1.09
9.16
0.22

3.22
0.30
2.92
1.70
2.60
0.23
1.00
1.50
1.02
9.08
0.47

3.42
0.43
2.99
1.44
2.56
0.25
0.89
1.30
0.89
7.51
0.43

3.51
0.28
3.24
1.53
2.71
0.25
0.98
1.50
1.02
8.22
0.44

2.66
0.25
2.42
1.84
2.69
0.06
0.92
1.25
0.92
8.98
0.27

3.63
0.34
3.29
1.45
2.48
0.23
1.15
1.70
1.16
11.27
0.46

3.98
0.31
3.67
1.39
3.10
0.18
1.13
1.49
1.14
10.15
0.24

3.96
0.40
3.56
2.04
3.03
0.41
1.17
1.93
1.18
9.56
0.51

98.00
60.16
5.02
58.93

97.34
74.49
9.87
53.08

102.48
69.11
3.38
60.18

130.95
61.76
1.68
68.29

95.21
58.93
2.73
58.18

109.15
61.33
7.18
58.46

97.98
60.59
8.10
60.93

46.05
66.87
5.48
58.77

95.67
55.00
3.01
58.50

117.63
64.64
3.64
57.09

129.82
53.04
5.59
63.35

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

1
72
1

1
26
1

0
38
0

0
5
0

0
3
0

1
6
0

0
7
0

0
18
0

0
13
0

0
19
1

0
9
0

PRIOR THIRD QUARTERS
  (The way it was…)
Return on assets (%)��������������������������������������2014
	
��������������������������������������������2012
	
��������������������������������������������2010

1.01
1.06
0.72

0.88
0.79
0.39

1.04
0.87
0.34

1.11
1.02
0.27

0.99
1.09
0.83

0.87
1.02
0.77

0.89
0.72
0.58

0.82
0.95
0.61

1.14
1.28
0.99

1.17
1.16
0.78

1.61
1.68
0.74

Net charge-offs to loans & leases (%)����������� 2014
	
��������������������������������������������2012
	
��������������������������������������������2010

0.45
1.18
2.38

0.22
0.38
0.87

0.18
0.58
1.16

0.24
0.79
1.74

0.53
1.33
2.70

0.68
1.15
3.05

0.35
1.33
2.31

0.32
1.04
1.94

0.55
1.54
2.77

0.21
0.52
1.20

0.45
0.83
2.28

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

FDIC Quarterly	

7

2015, Volume 9, No. 4

TABLE IV-A.  First Three Quarters 2015, All FDIC-Insured Institutions
Asset Concentration Groups*
FIRST THREE QUARTERS
All Insured
  (The way it is...)
Institutions
Number of institutions reporting�����������������������
6,270
	
Commercial banks�������������������������������������
5,410
	
Savings institutions�����������������������������������
860
Total assets (in billions)������������������������������������
$15,800.2
	
Commercial banks�������������������������������������
14,726.6
	
Savings institutions�����������������������������������
1,073.6
Total deposits (in billions)���������������������������������
11,990.4
	
Commercial banks�������������������������������������
11,163.0
	
Savings institutions�����������������������������������
827.4
Bank net income (in millions)���������������������������
122,952
	
Commercial banks�������������������������������������
114,077
	
Savings institutions�����������������������������������
8,875
 
Performance Ratios (annualized, %)
Yield on earning assets������������������������������������
3.38
Cost of funding earning assets������������������������
0.33
	
Net interest margin������������������������������������
3.05
Noninterest income to assets���������������������������
1.62
Noninterest expense to assets�������������������������
2.66
Loan and lease loss provision to assets����������
0.21
Net operating income to assets�����������������������
1.03
Pretax return on assets������������������������������������
1.51
Return on assets�����������������������������������������������
1.05
Return on equity�����������������������������������������������
9.33
Net charge-offs to loans and leases����������������
0.42
Loan and lease loss provision to
93.98
  net charge-offs����������������������������������������������
Efficiency ratio��������������������������������������������������
59.99
% of unprofitable institutions����������������������������
4.78
% of institutions with earnings gains����������������
63.37
 
Condition Ratios (%)
Earning assets to total assets��������������������������
89.68
Loss allowance to:
	
Loans and leases��������������������������������������
1.37
	
Noncurrent loans and leases��������������������
85.19
Noncurrent assets plus
  other real estate owned to assets����������������
0.99
Equity capital ratio��������������������������������������������
11.33
Core capital (leverage) ratio ����������������������������
9.61
Common equity tier 1 capital ratio ������������������
12.73
Tier 1 risk-based capital ratio���������������������������
12.82
Total risk-based capital ratio����������������������������
14.32
Net loans and leases to deposits���������������������
71.09
Net loans to total assets ����������������������������������
53.95
Domestic deposits to total assets��������������������
67.40
Structural Changes
	
New reporters��������������������������������������������
	
Institutions absorbed by mergers�������������
	
Failed institutions��������������������������������������

1
224
6
 

Credit
Card
International Agricultural Commercial
Banks
Banks
Banks
Lenders
14
4
1,494
3,124
12
4
1,477
2,812
2
0
17
312
$519.6
$3,836.6
$274.8
$5,508.6
411.5
3,836.6
269.1
5,120.2
108.0
0.0
5.7
388.4
296.7
2,701.6
225.2
4,285.2
218.2
2,701.6
222.0
4,001.7
78.5
0.0
3.2
283.5
10,933
26,132
1,864
39,669
8,112
26,132
1,784
37,052
2,821
0
80
2,617

Mortgage Consumer
Lenders
Lenders
515
57
123
43
392
14
$416.3
$184.5
145.0
93.4
271.3
91.1
317.3
154.3
117.7
77.8
199.6
76.5
2,331
1,517
1,301
868
1,030
648

Other
Specialized
All Other
<$1 Billion
<$1 Billion
337
663
300
584
37
79
$54.8
$118.3
48.8
101.0
6.1
17.3
43.7
99.5
39.6
85.4
4.1
14.1
1,060
443
484
372
576
71

All Other
>$1 Billion
62
55
7
$4,886.7
4,701.0
185.8
3,867.1
3,699.0
168.0
39,004
37,972
1,032

10.46
0.92
9.54
4.48
6.40
2.36
2.91
4.54
2.91
19.39
2.72

2.55
0.30
2.25
1.83
2.44
0.14
0.87
1.24
0.88
9.18
0.56

4.08
0.45
3.62
0.66
2.81
0.11
0.89
1.13
0.91
7.93
0.08

3.65
0.38
3.27
1.28
2.74
0.13
0.98
1.37
0.99
8.37
0.19

3.20
0.66
2.54
0.77
2.14
0.01
0.69
1.09
0.74
6.42
0.13

4.06
0.45
3.61
1.40
2.66
0.45
1.11
1.76
1.12
11.11
0.58

3.00
0.36
2.65
6.78
5.60
0.03
2.54
3.62
2.59
17.02
0.18

3.87
0.40
3.46
0.95
3.29
0.08
0.47
0.82
0.50
4.18
0.17

2.94
0.19
2.75
1.63
2.36
0.16
1.06
1.61
1.08
9.46
0.38

111.89
47.35
0.00
71.43

72.32
63.45
0.00
75.00

215.05
61.72
2.28
63.32

101.91
63.86
5.22
67.48

15.35
67.11
8.74
53.59

105.75
54.08
5.26
59.65

68.26
60.87
6.82
49.55

87.04
78.92
4.52
58.52

85.40
56.38
3.23
66.13

92.43

86.76

93.12

90.40

94.72

95.55

91.40

92.61

89.93

3.25
301.00

1.62
85.79

1.40
159.49

1.21
107.04

1.03
38.38

1.10
85.61

1.73
103.65

1.45
99.21

1.23
54.67

0.83
14.83
12.42
12.91
13.03
15.49
130.55
74.56
56.67

0.71
9.98
8.67
12.83
12.86
14.27
49.28
34.70
44.98

0.75
11.48
10.69
14.47
14.48
15.58
79.50
65.14
81.94

0.96
11.81
10.05
12.21
12.35
13.83
86.85
67.56
76.83

1.95
11.63
11.22
22.17
22.23
23.11
81.44
62.07
76.21

1.00
10.22
10.23
13.41
13.64
14.49
87.32
73.02
83.62

0.71
15.49
14.64
32.83
32.89
33.79
33.48
26.67
79.65

1.16
12.10
11.69
20.30
20.34
21.49
64.15
53.97
84.12

1.19
11.42
9.22
12.29
12.36
13.91
62.90
49.78
72.79

0
0
0

0
1
0

0
31
0

0
166
5

0
6
0

0
2
0

1
1
0

0
14
1

0
3
0

PRIOR THREE QUARTERS
  (The way it was...)
Number of institutions������������������������������2014
	
��������������������������������������2012
	
��������������������������������������2010

6,589
7,181
7,761

16
17
22

3
5
5

1,501
1,539
1,583

3,284
3,576
4,172

570
706
725

50
53
81

371
397
320

729
818
789

65
70
64

Total assets (in billions)����������������������������2014
	
��������������������������������������2012
	
��������������������������������������2010

$15,348.8
14,222.9
13,372.7

$605.5
580.5
695.1

$3,690.9
3,774.3
3,278.1

$254.1
223.9
194.0

$5,186.4
4,125.0
4,442.5

$435.5
821.8
789.5

$167.5
116.9
102.9

$60.4
63.4
44.5

$128.5
142.7
131.6

$4,819.9
4,374.5
3,694.6

Return on assets (%)��������������������������������2014
	
��������������������������������������2012
	
��������������������������������������2010

1.03
1.02
0.64

3.20
3.14
1.47

0.81
0.83
0.79

1.20
1.30
1.03

0.97
0.91
0.28

0.86
0.82
0.70

1.10
1.62
1.42

2.08
1.25
1.58

0.89
1.01
0.71

0.97
1.01
0.74

Net charge-offs to loans & leases (%)�����2014
	
��������������������������������������2012
	
��������������������������������������2010

0.49
1.14
2.63

2.86
3.81
11.94

0.73
1.53
2.27

0.09
0.22
0.53

0.26
0.75
1.89

0.19
0.78
1.22

0.62
1.44
2.20

0.24
0.33
0.81

0.23
0.42
0.51

0.29
0.98
1.96

Noncurrent assets plus
  OREO to assets (%)������������������������������2014
	
��������������������������������������2012
	
��������������������������������������2010

1.29
2.36
3.24

0.82
1.10
1.97

0.90
1.47
2.36

0.88
1.26
1.70

1.30
2.51
3.84

2.27
2.26
3.13

1.10
1.45
1.05

0.75
1.10
1.06

1.46
1.65
1.96

1.58
3.30
3.78

Equity capital ratio (%)�����������������������������2014
	
��������������������������������������2012
	
��������������������������������������2010

11.20
11.39
11.18

14.90
14.82
14.62

9.50
9.17
9.06

11.40
11.68
11.40

11.97
11.87
11.38

12.03
10.83
10.11

9.96
9.96
10.59

14.30
15.04
17.17

11.91
11.86
11.41

11.09
12.44
12.33

 

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

FDIC Quarterly	

8

2015, Volume 9, No. 4

Quarterly Banking Profile
TABLE IV-A.  First Three Quarters 2015, All FDIC-Insured Institutions
Asset Size Distribution
FIRST THREE QUARTERS
All Insured
  (The way it is...)
Institutions
Number of institutions reporting�����������������������������
6,270
	
Commercial banks�������������������������������������������
5,410
	
Savings institutions�����������������������������������������
860
Total assets (in billions)������������������������������������������ $15,800.2
	
Commercial banks�������������������������������������������
14,726.6
	
Savings institutions�����������������������������������������
1,073.6
Total deposits (in billions)���������������������������������������
11,990.4
	
Commercial banks�������������������������������������������
11,163.0
	
Savings institutions�����������������������������������������
827.4
Bank net income (in millions)���������������������������������
122,952
	
Commercial banks�������������������������������������������
114,077
	
Savings institutions�����������������������������������������
8,875
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
1,752
3,812
596
110
780
1,542
3,289
486
93
403
210
523
110
17
377
$102.7
$1,194.8
$1,642.8 $12,859.9
$3,018.8
90.9
1,009.4
1,358.5
12,267.8
2,571.6
11.8
185.4
284.3
592.1
447.2
85.8
991.7
1,296.0
9,616.9
2,246.7
76.6
845.4
1,083.5
9,157.5
1,920.4
9.1
146.4
212.5
459.4
326.3
693
8,918
13,760
99,581
20,134
623
7,563
11,892
93,999
17,926
70
1,355
1,868
5,582
2,208

Atlanta
778
705
73
$3,323.9
3,250.7
73.3
2,594.6
2,536.5
58.2
25,367
25,148
219

Chicago
1,351
1,129
222
$3,531.9
3,421.6
110.3
2,539.4
2,459.1
80.3
25,262
24,161
1,101

Kansas
City
1,559
1,497
62
$3,436.7
3,382.0
54.7
2,606.2
2,564.5
41.8
30,258
29,964
295

San
Dallas
Francisco
1,319
483
1,236
440
83
43
$940.8
$1,548.1
831.9
1,268.8
108.9
279.3
775.8
1,227.6
686.1
996.5
89.7
231.1
7,702
14,229
6,645
10,234
1,057
3,996

3.38
0.33
3.05
1.62
2.66
0.21
1.03
1.51
1.05
9.33
0.42

4.08
0.44
3.64
1.18
3.44
0.08
0.87
1.04
0.90
7.14
0.15

4.13
0.46
3.67
1.17
3.19
0.10
0.98
1.30
1.01
8.99
0.13

4.14
0.40
3.74
1.21
2.92
0.18
1.14
1.57
1.15
9.70
0.21

3.21
0.31
2.90
1.72
2.57
0.23
1.03
1.52
1.04
9.33
0.49

3.39
0.42
2.97
1.44
2.58
0.26
0.89
1.27
0.90
7.59
0.46

3.56
0.28
3.28
1.54
2.73
0.26
1.00
1.51
1.03
8.32
0.48

2.62
0.25
2.36
1.86
2.60
0.09
0.94
1.30
0.94
9.37
0.26

3.60
0.34
3.26
1.49
2.48
0.21
1.17
1.73
1.18
11.52
0.50

3.93
0.31
3.62
1.38
3.08
0.17
1.11
1.46
1.12
10.01
0.20

3.98
0.43
3.55
2.04
2.97
0.35
1.27
2.04
1.28
10.30
0.49

93.98
59.99
4.78
63.37

98.83
75.40
9.70
56.68

115.39
69.76
3.20
64.69

129.82
62.11
1.01
75.17

90.76
58.63
1.82
60.00

105.40
62.14
6.67
59.87

91.87
60.47
8.23
61.83

71.68
64.87
4.89
63.95

82.09
55.07
2.57
66.13

128.68
65.14
3.71
60.27

115.81
53.57
6.00
69.36

89.68

91.96

92.74

92.10

89.07

89.18

88.97

88.86

89.47

91.59

93.33

Condition Ratios (%)
Earning assets to total assets���������������������������������
Loss allowance to:
	
Loans and leases���������������������������������������������
	
Noncurrent loans and leases���������������������������
Noncurrent assets plus
  other real estate owned to assets�����������������������
Equity capital ratio���������������������������������������������������
Core capital (leverage) ratio �����������������������������������
Common equity tier 1 capital ratio �������������������������
Tier 1 risk-based capital ratio����������������������������������
Total risk-based capital ratio�����������������������������������
Net loans and leases to deposits����������������������������
Net loans to total assets �����������������������������������������
Domestic deposits to total assets���������������������������

1.37
85.19

1.48
109.46

1.38
118.15

1.27
113.34

1.39
79.36

1.31
102.76

1.40
77.62

1.41
78.68

1.44
68.94

1.28
99.75

1.27
169.68

0.99
11.33
9.61
12.73
12.82
14.32
71.09
53.95
67.40

1.30
12.84
12.43
20.02
20.09
21.20
69.31
57.88
83.51

1.20
11.35
10.95
15.48
15.54
16.67
78.60
65.24
82.99

0.99
11.92
10.61
13.78
13.84
14.89
86.04
67.88
78.54

0.97
11.24
9.33
12.29
12.39
13.98
68.31
51.09
64.40

0.76
11.99
9.72
12.94
13.13
14.71
71.54
53.25
66.53

1.19
12.44
9.71
12.60
12.71
14.26
73.93
57.71
75.24

0.96
10.35
9.12
12.54
12.59
13.77
66.09
47.51
61.97

1.21
10.28
9.05
11.78
11.78
13.72
68.35
51.83
57.00

1.07
11.26
10.04
13.25
13.40
14.57
76.49
63.08
82.25

0.53
12.28
11.28
14.83
14.99
16.08
76.98
61.05
78.69

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

1
224
6

1
78
4

0
126
1

0
17
1

0
3
0

1
22
1

0
25
2

0
49
2

0
42
0

0
60
1

0
26
0

PRIOR THREE QUARTERS
  (The way it was…)
Number of institutions������������������������������������ 2014
	
��������������������������������������������2012
	
��������������������������������������������2010

6,589
7,181
7,761

1,940
2,287
2,682

3,966
4,235
4,414

575
551
556

108
108
109

816
891
961

823
918
1,041

1,427
1,529
1,609

1,614
1,738
1,841

1,387
1,513
1,637

522
592
672

Total assets (in billions)����������������������������������2014
	
��������������������������������������������2012
	
��������������������������������������������2010

$15,348.8
14,222.9
13,372.7

$114.2
132.4
151.1

$1,227.5
1,278.3
1,315.7

$1,531.4
1,424.4
1,400.5

$12,475.8
11,387.8
10,505.3

$3,045.1
2,927.6
2,724.5

$3,134.2
2,942.9
2,957.1

$3,503.2
3,230.9
2,948.0

$3,363.6
3,059.1
1,649.5

$884.9
845.8
788.4

$1,417.9
1,216.4
2,305.2

Return on assets (%)��������������������������������������2014
	
��������������������������������������������2012
	
��������������������������������������������2010

1.03
1.02
0.64

0.84
0.72
0.40

0.99
0.84
0.37

1.08
1.18
0.27

1.03
1.02
0.73

0.94
0.94
0.72

0.89
0.76
0.36

0.89
0.91
0.62

1.14
1.13
0.79

1.15
1.10
0.74

1.50
1.79
0.80

Net charge-offs to loans & leases (%)����������� 2014
	
��������������������������������������������2012
	
��������������������������������������������2010

0.49
1.14
2.63

0.21
0.39
0.73

0.20
0.60
1.02

0.28
0.75
1.71

0.57
1.29
3.07

0.73
1.26
3.77

0.40
1.23
2.51

0.35
0.93
2.04

0.60
1.44
3.02

0.21
0.55
1.22

0.48
0.88
2.35

Noncurrent assets plus
  OREO to assets (%)������������������������������������ 2014
	
��������������������������������������������2012
	
��������������������������������������������2010

1.29
2.36
3.24

1.56
2.20
2.42

1.53
2.61
3.42

1.50
2.70
3.70

1.24
2.30
3.17

0.92
1.53
2.18

1.71
3.66
4.04

1.19
2.13
3.06

1.60
2.51
4.59

1.29
2.27
3.28

0.69
1.56
2.72

Equity capital ratio (%)�����������������������������������2014
	
��������������������������������������������2012
	
��������������������������������������������2010

11.20
11.39
11.18

12.35
12.13
12.18

11.19
11.10
10.36

11.98
11.88
11.22

11.09
11.35
11.26

12.02
12.38
12.48

12.11
12.31
11.55

9.92
9.19
9.06

10.30
11.04
11.55

11.15
11.03
10.76

12.72
13.70
11.76

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

FDIC Quarterly	

9

2015, Volume 9, No. 4

TABLE V-A.  Loan Performance, All FDIC-Insured Institutions
Asset Concentration Groups*
September 30, 2015

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

0.84
0.39
0.29
0.13
0.65
1.47
0.23
1.28
1.19
1.36
0.21
0.71

0.24
0.00
0.00
0.00
0.00
0.25
0.82
1.28
1.28
1.23
0.00
1.24

1.19
1.54
0.26
0.03
0.96
1.79
0.19
1.27
1.15
1.47
0.34
0.80

0.59
0.85
0.49
0.25
0.45
1.13
0.73
1.40
0.93
1.44
0.40
0.59

0.51
0.35
0.29
0.14
0.49
0.94
0.24
1.07
1.19
1.05
0.18
0.47

0.93
0.53
0.31
0.17
0.63
1.04
0.46
0.95
1.53
0.88
0.24
0.89

0.64
0.62
1.21
0.72
0.48
0.61
0.11
0.76
0.72
0.77
0.12
0.67

1.39
0.90
0.93
0.01
0.61
1.97
1.12
1.97
2.17
1.93
0.45
1.37

1.14
0.80
0.76
0.41
0.64
1.49
1.03
1.61
2.09
1.60
0.44
1.13

1.36
0.26
0.24
0.19
0.74
2.20
0.14
1.54
1.10
1.79
0.12
0.91

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

2.62
1.29
0.96
0.33
2.62
4.41
0.69
0.80
1.07
0.53
0.22
1.61

0.35
0.00
0.00
0.00
0.00
0.37
0.62
1.13
1.15
0.59
0.00
1.08

4.06
0.76
0.69
0.23
4.38
6.04
0.77
0.98
1.01
0.94
0.15
1.89

1.00
1.42
1.26
0.70
0.63
1.04
1.23
0.55
0.29
0.57
0.47
0.88

1.45
1.28
0.89
0.34
1.30
2.53
0.71
0.68
1.06
0.63
0.27
1.13

2.89
1.47
1.53
0.75
1.97
3.18
0.89
0.49
1.07
0.42
0.14
2.68

3.36
6.77
7.82
2.62
2.55
2.96
0.26
0.57
1.13
0.41
3.18
1.28

1.93
3.33
2.22
0.82
0.74
1.70
1.54
0.74
0.89
0.72
0.28
1.66

1.66
2.00
1.81
0.99
0.60
1.73
1.32
0.62
1.05
0.60
0.38
1.46

4.55
1.27
1.04
0.28
3.67
6.86
0.59
0.55
0.97
0.32
0.17
2.24

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

0.13
-0.05
0.06
0.00
0.40
0.14
0.22
1.77
2.91
0.65
0.10
0.42

0.21
0.00
0.00
0.00
0.00
0.22
2.07
2.80
2.87
1.33
0.00
2.72

0.21
-0.04
0.01
0.00
0.48
0.21
0.21
2.32
3.15
0.95
0.04
0.56

0.02
-0.17
0.00
0.02
0.08
0.07
0.23
0.34
1.03
0.29
0.00
0.08

0.09
-0.05
0.08
0.00
0.26
0.12
0.20
0.84
3.37
0.48
0.19
0.19

0.11
0.00
0.03
0.01
0.27
0.11
0.22
1.07
6.20
0.47
0.08
0.13

0.20
0.31
0.08
0.01
0.50
0.12
0.07
0.78
2.17
0.39
0.03
0.58

0.08
-0.05
0.10
0.24
0.15
0.09
0.09
0.57
1.62
0.37
0.75
0.18

0.09
-0.17
0.09
0.09
0.07
0.12
0.34
0.56
3.47
0.48
0.41
0.17

0.17
-0.04
0.02
0.00
0.56
0.15
0.16
1.48
2.74
0.74
0.09
0.38

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)��������������

$4,307.2
266.1
1199.5
329.1
471.5
1887.0
1802.1
1453.7
714.8
739.0
1081.1
8644.2

$0.3
0.0
0.0
0.0
0.0
0.3
34.1
365.6
349.0
16.6
0.4
400.4

$506.4
8.6
36.2
60.5
70.7
278.0
279.6
245.4
152.4
93.0
322.5
1353.9

$108.8
6.2
29.8
3.4
2.4
27.3
21.6
6.7
0.5
6.2
44.5
181.6

$2,286.1
197.0
866.4
217.9
212.8
754.8
891.4
302.8
37.1
265.7
288.1
3768.3

$238.5
4.8
18.6
6.2
11.5
196.7
6.4
5.9
0.6
5.3
10.3
261.1

$30.0
0.5
2.5
0.3
5.9
20.6
7.3
93.1
19.9
73.3
5.9
136.3

$10.6
0.7
3.5
0.3
0.4
5.1
1.8
1.6
0.3
1.4
0.8
14.9

$49.5 $1,076.9
2.9
45.2
12.0
230.5
1.4
39.1
2.0
165.8
27.4
576.7
5.6
554.2
5.4
427.1
0.1
155.0
5.3
272.2
4.2
404.5
64.8
2462.8

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

16,118.3
5,207.0
3,965.0
278.2
4,906.7
226.3
1,510.1

0.1
0.0
0.0
0.0
0.1
0.0
0.0

823.3
1.3
54.0
2.0
416.0
0.0
327.0

460.4
183.2
142.9
17.2
79.0
38.1
0.0

10,239.6
4,101.3
2,981.1
225.8
2,615.2
161.3
154.8

1,045.5
129.1
59.1
4.3
332.1
1.3
519.7

105.0
17.7
24.4
0.5
57.1
0.0
5.4

134.1
53.9
43.2
2.9
30.1
3.8
0.2

417.9
129.8
130.8
9.3
141.1
6.9
0.1

2,892.3
590.7
529.5
16.1
1,236.0
15.0
503.0

* 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

2015, Volume 9, No. 4

Quarterly Banking Profile
TABLE V-A.  Loan Performance, All FDIC-Insured Institutions
Asset Size Distribution
September 30, 2015

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

0.84
0.39
0.29
0.13
0.65
1.47
0.23
1.28
1.19
1.36
0.21
0.71

1.20
0.69
0.99
0.54
0.81
1.70
1.11
1.78
3.80
1.75
0.53
1.14

0.62
0.56
0.43
0.31
0.49
0.96
0.59
1.48
1.86
1.45
0.33
0.64

0.41
0.37
0.28
0.11
0.43
0.67
0.39
1.44
1.98
1.19
0.21
0.47

1.00
0.34
0.24
0.11
0.69
1.70
0.18
1.26
1.16
1.37
0.20
0.75

0.55
0.49
0.32
0.14
0.48
0.89
0.25
1.08
0.95
1.31
0.07
0.54

1.08
0.38
0.26
0.16
0.79
1.86
0.16
1.68
1.34
2.04
0.12
0.87

0.88
0.41
0.36
0.08
0.73
1.40
0.24
1.12
1.00
1.16
0.49
0.71

1.15
0.29
0.27
0.20
0.68
1.96
0.19
1.28
1.21
1.35
0.15
0.81

0.77
0.40
0.35
0.17
0.46
1.56
0.43
0.96
0.71
1.08
0.18
0.67

0.36
0.35
0.18
0.13
0.30
0.62
0.25
1.10
1.53
0.73
0.18
0.49

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

2.62
1.29
0.96
0.33
2.62
4.41
0.69
0.80
1.07
0.53
0.22
1.61

1.48
2.01
1.83
0.48
0.63
1.56
1.74
0.83
1.47
0.82
0.62
1.36

1.24
1.99
1.20
0.77
0.70
1.33
1.21
0.84
1.40
0.80
0.41
1.17

1.17
1.26
0.94
0.33
0.80
1.73
1.08
0.84
1.77
0.40
1.00
1.12

3.34
1.03
0.86
0.26
2.98
5.44
0.60
0.79
1.05
0.53
0.16
1.75

1.78
1.46
1.13
0.27
2.21
2.74
0.67
0.86
0.94
0.72
0.40
1.27

3.26
1.90
0.93
0.24
3.15
5.23
0.61
0.82
1.12
0.51
0.14
1.81

3.01
1.13
1.05
0.40
2.68
4.86
0.63
0.74
0.92
0.67
0.17
1.79

3.83
1.03
0.97
0.37
3.04
6.43
0.74
0.79
1.07
0.45
0.20
2.10

1.55
0.94
0.83
0.75
1.53
2.84
1.11
0.73
1.12
0.54
0.29
1.28

0.86
1.05
0.73
0.24
0.73
1.09
0.66
0.75
1.31
0.27
0.25
0.75

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

0.13
-0.05
0.06
0.00
0.40
0.14
0.22
1.77
2.91
0.65
0.10
0.42

0.10
0.03
0.14
0.17
0.04
0.11
0.31
0.53
7.04
0.44
0.00
0.15

0.08
0.05
0.07
0.04
0.11
0.11
0.25
0.72
4.48
0.43
0.16
0.13

0.07
-0.05
0.11
0.00
0.15
0.08
0.19
1.58
3.54
0.66
0.15
0.21

0.15
-0.09
0.04
-0.01
0.45
0.16
0.23
1.81
2.88
0.66
0.10
0.49

0.11
0.05
0.10
0.00
0.26
0.11
0.17
1.94
2.63
0.72
0.11
0.46

0.19
0.10
0.05
0.01
0.53
0.19
0.18
1.81
2.87
0.69
0.06
0.48

0.12
-0.13
0.04
0.01
0.36
0.14
0.21
1.07
2.84
0.50
0.15
0.26

0.15
-0.24
-0.01
-0.03
0.54
0.18
0.23
2.27
3.27
0.98
0.07
0.50

0.04
-0.06
0.03
-0.01
0.25
0.07
0.24
1.17
2.09
0.72
0.19
0.20

0.07
-0.12
0.16
-0.02
0.05
0.04
0.39
1.60
3.12
0.29
0.15
0.49

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)�����

$4,307.2
266.1
1199.5
329.1
471.5
1887.0
1802.1
1453.7
714.8
739.0
1081.1
8644.2

$41.2
2.4
10.5
1.1
1.0
18.8
7.1
3.8
0.1
3.8
8.2
60.4

$606.0
53.9
231.3
32.1
26.4
217.4
101.7
33.0
2.3
30.7
50.1
790.7

$808.2
71.7
327.3
76.4
48.5
265.3
179.6
83.9
26.8
57.1
58.3
1129.9

$2,851.8
138.1
630.4
219.4
395.7
1385.5
1513.8
1333.0
685.6
647.4
964.6
6663.2

$876.3
48.2
274.0
118.0
88.5
343.4
276.0
303.5
192.0
111.5
173.4
1629.2

$890.5
55.9
247.7
40.9
123.6
411.2
452.8
370.5
188.8
181.7
231.9
1945.8

$870.4
43.3
186.8
86.7
118.2
413.2
368.1
210.8
51.4
159.3
253.1
1702.3

$842.1
40.3
173.5
28.7
93.6
415.4
368.1
294.2
163.4
130.8
303.7
1808.0

$372.7
53.0
146.9
14.2
19.8
123.8
125.1
59.1
19.1
40.0
44.4
601.3

$455.1
25.4
170.6
40.6
27.9
180.0
212.1
215.8
100.1
115.7
74.6
957.6

Memo: Other Real Estate Owned (in millions)
All other real estate owned��������������������������������������
	
Construction and development������������������������
	
Nonfarm nonresidential������������������������������������
	
Multifamily residential real estate��������������������
	
1-4 family residential����������������������������������������
	Farmland�����������������������������������������������������������
	
GNMA properties���������������������������������������������

16,118.3
5,207.0
3,965.0
278.2
4,906.7
226.3
1,510.1

516.3
185.6
163.7
22.6
135.1
9.1
0.3

5,015.8
2,338.9
1,574.8
106.5
878.9
115.2
1.5

3,524.9
1,472.1
1,065.2
73.7
811.8
79.2
22.9

7,061.2
1,210.4
1,161.2
75.5
3,080.8
22.8
1,485.5

2,223.7
450.4
579.1
91.4
1,055.0
18.7
29.1

4,230.8
1,526.8
827.3
34.8
1,224.1
53.8
563.9

3,231.5
759.8
868.3
53.9
1,125.4
42.4
381.6

3,161.5
1,087.6
710.6
42.6
755.9
31.8
508.1

2,199.2
982.6
672.5
36.3
432.5
61.1
14.2

1,071.6
399.8
307.1
19.1
313.8
18.5
13.3

* 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

2015, Volume 9, No. 4

Table VI-A. Derivatives, All FDIC-Insured Call Report Filers
Asset Size Distribution
3rd
Quarter
2015

2nd
Quarter
2015

1st
Quarter
2015

4th
Quarter
2014

3rd
Quarter
2014

(dollar figures in millions;
notional amounts unless otherwise indicated)
ALL DERIVATIVE HOLDERS
Number of institutions reporting derivatives�����������������
1,413
1,429
1,434
1,400
1,392
Total assets of institutions reporting derivatives���������� $14,228,410 $14,195,802 $14,161,464 $13,921,828 $13,713,845
Total deposits of institutions reporting derivatives������� 10,732,972 10,704,380 10,664,980 10,461,458 10,291,809
Total derivatives������������������������������������������������������������� 194,663,554 201,004,777 205,900,727 221,952,961 243,042,211

% Change
Less
$100
$1 Billion
14Q3Than $100 Million to
to $10
15Q3
Million
$1 Billion
Billion
1.5
3.8
4.3
-19.9

70
$5,144
4,278
362

Derivative Contracts by Underlying Risk Exposure
Interest rate�������������������������������������������������������������������� 147,846,233 153,754,334 157,728,028 174,010,311 190,996,275
Foreign exchange*�������������������������������������������������������� 34,636,877 34,969,999 35,563,105 34,745,833 37,993,284
Equity�����������������������������������������������������������������������������
2,589,507
2,363,902
2,359,532
2,536,871
2,317,271
Commodity & other (excluding credit derivatives)��������
1,393,268
1,428,824
1,233,520
1,210,879
1,327,011
Credit������������������������������������������������������������������������������
8,197,668
8,487,718
9,016,543
9,449,068 10,408,370
Total�������������������������������������������������������������������������������� 194,663,554 201,004,777 205,900,727 221,952,961 243,042,211

-22.6
-8.8
11.7
5.0
-21.2
-19.9

362
0
0
0
0
362

21,209
0
30
8
10
21,257

92,485
5,243
304
120
596
98,749

Derivative Contracts by Transaction Type
Swaps���������������������������������������������������������������������������� 112,697,606 117,508,966 117,711,335 135,169,550 148,331,152
Futures & forwards�������������������������������������������������������� 38,988,101 40,352,331 44,537,485 43,368,437 45,058,920
Purchased options��������������������������������������������������������� 16,477,230 15,936,785
16,070,746 16,388,881 18,040,949
Written options��������������������������������������������������������������� 15,840,244 15,628,814 15,784,253 16,014,343 17,609,844
Total�������������������������������������������������������������������������������� 184,003,181 189,426,895 194,103,819 210,941,211 229,040,866

-24.0
-13.5
-8.7
-10.0
-19.7

48
78
27
209
362

7,489
6,922
800
6,036
21,247

59,577 112,630,491
19,507
38,961,594
4,636
16,471,766
14,349
15,819,649
98,071 183,883,501

Fair Value of Derivative Contracts
Interest rate contracts���������������������������������������������������
Foreign exchange contracts������������������������������������������
Equity contracts�������������������������������������������������������������
Commodity & other (excluding credit derivatives)��������
Credit derivatives as guarantor�������������������������������������
Credit derivatives as beneficiary�����������������������������������
Derivative Contracts by Maturity**
	
Interest rate contracts����������������������������� < 1 year
		
������������������������������������������ 1-5 years
		
������������������������������������������ > 5 years
	
Foreign exchange and gold contracts���� < 1 year
		
������������������������������������������ 1-5 years
		
������������������������������������������ > 5 years
	
Equity contracts��������������������������������������� < 1 year
		
������������������������������������������ 1-5 years
		
������������������������������������������ > 5 years
	
Commodity & other contracts (including credit
derivatives, excluding gold contracts)���� < 1 year
		
������������������������������������������ 1-5 years
		
������������������������������������������ > 5 years
Risk-Based Capital: Credit Equivalent Amount
Total current exposure to tier 1 capital (%)�������������������
Total potential future exposure to tier 1 capital (%)������
Total exposure (credit equivalent amount)
  to tier 1 capital (%)�����������������������������������������������������

833
407
$349,947 $1,239,207
288,196
987,104
21,257
98,749

Greater
Than
$10 Billion
103
$12,634,113
9,453,394
194,543,186
147,732,177
34,631,634
2,589,173
1,393,140
8,197,062
194,543,186

76,694
-15,284
7,880
-6,952
1,891
2,441

71,659
-19,614
2,695
-3,488
35,840
-34,672

68,541
-10,042
335
-5,755
54,676
-53,203

60,023
-4,845
3,769
-3,376
47,533
-36,630

65,131
13,334
-657
219
67,082
-62,731

17.8
N/M
N/M
N/M
-97.2
N/M

-1
0
0
0
0
0

52
0
0
0
-1
0

-278
16
0
2
-1
-25

76,921
-15,299
7,881
-6,953
1,892
2,466

62,273,980
55,134,239
36,553,709
25,206,275
3,672,989
1,500,445
1,667,034
670,068
183,539

63,464,805
54,758,959
35,837,361
25,075,066
3,859,497
1,612,940
1,567,482
579,705
162,800

68,441,241
54,762,265
35,099,032
25,506,806
3,917,108
1,612,457
1,471,237
518,723
167,889

71,808,688
33,727,025
22,213,590
22,145,398
2,586,643
969,047
996,137
351,854
100,903

79,984,774
40,334,338
22,393,371
22,877,893
2,459,545
1,021,332
763,470
323,010
77,484

-22.1
36.7
63.2
10.2
49.3
46.9
118.3
107.4
136.9

87
23
36
0
0
0
0
0
0

6,868
3,015
4,708
0
0
0
4
10
0

18,166
25,390
29,992
3,907
127
0
32
81
32

62,248,859
55,105,812
36,518,973
25,202,367
3,672,862
1,500,445
1,666,999
669,978
183,507

2,567,847
5,812,508
756,438

2,358,147
5,329,031
428,122

5,553,640
5,890,994
600,004

1,298,825
3,623,142
289,055

1,407,104
4,045,843
321,390

82.5
43.7
135.4

0
0
0

3
5
0

48
35
25

2,567,795
5,812,468
756,413

34.3
50.3

31.6
54.9

39.8
50.3

28.8
48.6

26.0
53.2

0.1
0.7

0.4
0.3

0.8
0.5

39.0
57.4

84.6

86.4

90.1

77.4

79.2

0.8

0.7

1.4

96.3

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

72.0

61.0

69.0

91.0

83.0

-13.3

0.0

0.0

0.0

71.0

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

247
11,385,441
8,554,842

251
11,368,900
8,548,960

250
11,442,012
8,585,796

247
11,274,435
8,457,075

244
11,015,085
8,262,859

1.2
3.4
3.5

7
497
415

83
37,635
31,472

92
307,794
244,342

65
11,039,515
8,278,613

Derivative Contracts by Underlying Risk Exposure
Interest rate�������������������������������������������������������������������� 145,317,817 150,988,408 154,706,680 170,761,929 188,011,288
Foreign exchange���������������������������������������������������������� 31,764,787
31,318,657
32,197,481 32,536,107 33,675,874
Equity�����������������������������������������������������������������������������
2,566,962
2,344,517
2,340,858
2,519,511
2,300,741
Commodity & other��������������������������������������������������������
1,390,888
1,426,415
1,227,079
1,205,276
1,320,794
Total�������������������������������������������������������������������������������� 181,040,454 186,077,996 190,472,098 207,022,823 225,308,697

-22.7
-5.7
11.6
5.3
-19.6

27
0
0
0
27

1,776
0
0
0
1,776

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

2,581
1,931
50
758
5,319

3,404
854
584
660
5,502

957
4,702
791
1,211
7,662

658
2,902
643
255
4,458

-826
4,830
652
946
5,602

N/M
-60.0
-92.3
-19.9
-5.1

0
0
0
0
0

0
0
0
0
0

6
4
0
-2
9

2,575
1,927
50
760
5,311

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

4.4
19.9

4.5
19.0

6.4
29.4

3.8
19.6

4.7
23.6

0.0
0.0

0.0
0.7

0.3
1.3

4.5
20.4

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

1,299
13,938,048
10,499,959

1,307
13,891,982
10,461,534

1,308
13,844,232
10,410,932

1,277
13,613,678
10,218,508

1,272
13,421,601
10,062,067

2.1
3.8
4.4

64
4,731
3,937

767
322,666
265,232

370
1,145,571
912,675

98
12,465,080
9,318,115

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

2,528,416
409,385
22,545
2,381
2,962,726

2,765,926
561,179
19,385
2,409
3,348,899

3,021,347
585,259
18,674
6,441
3,631,721

3,248,382
647,043
17,361
5,602
3,918,388

2,984,988
724,435
16,530
6,216
3,732,169

-15.3
-43.5
36.4
-61.7
-20.6

335
0
0
0
335

19,433
0
30
8
19,471

71,070
1,308
304
92
72,774

2,437,578
408,077
22,211
2,281
2,870,146

21,415 145,294,599
3,853
31,760,934
0
2,566,962
28
1,390,859
25,296 181,013,354

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

2015, Volume 9, 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
2015

2nd
Quarter
2015

1st
Quarter
2015

4th
Quarter
2014

3rd
% Change Less Than
$100
$1 Billion Greater
Quarter
14Q3$100
Million to
to $10
Than $10
2014
15Q3
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������������������������������������������������������������������������������������������

74

74

72

78

74

0.0

0

21

16

37

$734,582
31
14,187
6,221
5,370
14
86,277
846,683

$753,697
33
17,766
5,660
6,534
14
89,384
873,089

$821,870
35
17,817
3,740
5,966
13
94,400
943,841

$847,508
36
18,499
3,951
6,191
11
96,257
972,452

$845,279
38
16,782
4,198
6,425
10
95,099
967,831

-13.1
-18.4
-15.5
48.2
-16.4
40.0
-9.3
-12.5

$0
0
0
0
0
0
0
0

$2,076
0
0
0
617
8
106
2,806

$11,837
0
0
1,977
0
5
8,448
22,267

$720,670
31
14,187
4,244
4,753
1
77,723
821,610

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���

2,933
0
1,187
0
89
0
1,319
5,528
37

3,101
0
1,470
0
187
0
1,084
5,842
38

3,117
0
1,531
0
211
0
1,405
6,264
0

2,918
0
1,529
0
194
0
1,369
6,011
17

2,806
0
1,418
0
188
0
1,129
5,541
17

4.5
0.0
-16.3
0.0
-52.7
0.0
16.8
-0.2
117.6

0
0
0
0
0
0
0
0
0

4
0
0
0
0
0
0
4
0

0
0
0
0
0
0
0
0
0

2,929
0
1,187
0
89
0
1,319
5,524
37

3.8
5.9
0.4
1.1
3.8
0.0
0.3
3.3

3.4
5.3
0.4
0.9
4.0
1.2
0.3
3.0

3.1
5.2
0.4
0.9
4.6
0.0
0.4
2.8

3.9
7.5
0.7
0.9
4.9
0.0
0.3
3.5

3.9
8.0
0.8
0.7
4.8
0.0
0.6
3.5

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

1.3
0.0
0.0
0.0
0.0
0.0
0.6
1.0

1.5
0.0
0.0
1.3
0.0
0.0
0.0
0.9

3.8
5.9
0.4
1.0
4.3
0.0
0.4
3.4

2.1
47.4
0.3
0.2
3.9
1.2
1.2
2.0

2.1
46.5
0.3
0.1
4.3
1.8
1.4
2.0

2.0
44.7
0.3
0.1
5.1
1.8
1.4
2.0

2.2
43.3
0.5
0.1
5.3
2.4
3.3
2.3

2.2
42.0
0.5
0.1
5.2
3.0
6.5
2.6

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

1.3
0.0
0.0
0.0
0.0
2.0
8.3
1.3

0.7
0.0
0.0
0.3
0.0
0.0
0.5
0.6

2.1
47.4
0.3
0.1
4.4
0.0
1.3
2.0

0.3
3.2
1.4
0.2
0.5
0.0
0.5
0.3

0.2
1.8
0.8
0.1
0.3
0.0
0.3
0.2

0.1
0.7
0.4
0.1
0.2
0.0
0.1
0.1

0.4
1.0
1.7
0.2
0.8
0.0
0.9
0.4

0.3
0.1
1.5
0.1
0.6
0.0
0.6
0.3

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.1

0.0
0.0
0.0
0.5
0.0
0.0
0.0
0.0

0.3
3.2
1.4
0.1
0.6
0.0
0.5
0.3

0
13,248
0

0
10,380
0

0
9,983
0

0
12,247
0

0
12,198
0

0.0
8.6
0.0

0
0
0

0
0
0

0
0
0

0
13,248
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�����������������������������������������������������������������������������������

1,098

1,107

1,097

1,103

1,105

-0.6

127

737

181

53

39,027
721
217
72,204
112,168

38,997
750
80
74,994
114,821

38,864
694
83
71,382
111,023

40,547
712
91
69,560
110,909

40,838
709
52
66,271
107,869

-4.4
1.7
317.3
9.0
4.0

1,516
0
0
0
1,517

14,803
8
16
116
14,942

10,355
28
68
1,183
11,634

12,354
685
133
70,904
84,075

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

10,495
140
154
19,659
30,448

10,441
144
16
19,656
30,257

10,051
137
19
18,624
28,831

9,737
137
27
17,954
27,855

9,850
140
23
17,233
27,246

6.5
0.0
569.6
14.1
11.8

112
0
0
0
113

2,717
8
16
15
2,756

3,793
3
5
69
3,870

3,873
129
133
19,574
23,709

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

110
42,211

110
44,649

117
44,981

125
44,248

132
41,590

-16.7
1.5

9
7

59
152

23
371

19
41,681

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

884

2,005

887

1,150

918

-3.7

0

0

0

883

0 4,360,921

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

0

0

4,412,785

-100.0

0

0

0

0

12,020

12,284

11,736

11,981

10,189

18.0

4

1

0

12,015

27,631
1,043
348
5.3

27,902
4,548
325
5.5

28,878
1,600
298
5.5

28,924
1,197
340
5.5

27,948
2,886
385
5.3

-1.1
-63.9
-9.6

0
8
0
0.9

0
199
11
2.2

882
100
7
2.5

26,749
737
329
6.1

* 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

2015, Volume 9, No. 4

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

■	 Earnings Improved Almost 8 Percent From Third Quarter 2014
■	 Net Interest Income and Noninterest Income Increased From the

Year Before
■	 Loan and Lease Balances Increased, Outpacing Growth at
Noncommunity Banks
■	 Asset Quality Indicators Continued to Improve

Earnings of $5.2 Billion Increased From the
Previous Year

Net Interest Margin Declined Despite an Increase in
Net Interest Income

Improved net interest income and noninterest income,
coupled with lower loan-loss provisions, lifted earnings at 5,812 community banks (up $363.4 million,
or 7.5 percent) from third quarter 2014. Almost
60 percent of community banks reported higher yearover-year earnings. The pretax return on assets was
1.31 percent, up 7 basis points from the 2014 quarter
but 21 basis points below that of noncommunity banks.
The percent of unprofitable community banks in the
third quarter totaled 5.2 percent, the lowest since
second quarter 1998.

Net operating revenue totaled $22.4 billion during
third quarter 2015, up $1.6 billion (7.5 percent)
from the year before. Higher net interest income (up
$1.1 billion, or 6.5 percent) and noninterest income
(up $495.8 million, or 11.1 percent) contributed to
the improvement in net operating revenue. Almost
70 percent of community banks reported higher net
interest income than in third quarter 2014. Average
net interest margin (NIM) was 3.62 percent, down
3 basis points from a year earlier, as average asset yields
declined more rapidly than average funding costs.
NIM at community banks was 63 basis points above
the average for noncommunity banks. More than half
(54.1 percent) of the year-over-year increase in noninterest income among community banks was from higher
loan sales revenue (up $268 million, or 31 percent).

Chart 1

Chart 2
Net Interest Margin

Contributors to the Year-Over-Year Change in Income
FDIC-Insured Community Banks

Positive Factor
Negative Factor

Billions of Dollars
$1.5
$0.36

Percent

$1.06

-$0.01

$0.50

$0.98

-$0.01

Community Banks
All Insured Institutions

4.0

$0.23

$1.0
3.65

3.62

$0.5
3.5
$0.0
-$0.5

+8%

+6%

Net
Income

Net
Interest
Income

-2%

+11%

+7%

Loan Loss Noninterest Noninterest
Provisions Income
Expense

-7%
Realized
Gains on
Securities

3.15

+17%
Income
Taxes

3.0
2007

Source: FDIC.

FDIC Quarterly	

2008

2009

2010

2011

2012

2013

2014

3.08

2015

Source: FDIC.

15

2015, Volume 9, No. 4

Long-Term Assets Remained Elevated at
Community Banks

All Major Loan Categories Increased From the
Previous Quarter and the Year Before

Long-term assets at community banks represented
33.9 percent of total assets in the current quarter, down
from 34.3 percent in third quarter 2014.1 Despite being
below the peak of 34.5 percent in second quarter 2014,
long-term assets at community banks continue to exceed
the 26.1 percent held by the banking industry and
the 25 percent for noncommunity banks. For the past
12 of 16 consecutive quarters, community banks have
increased their holdings of long-term assets. Meanwhile,
long-term funding has not grown at the same pace. This
imbalance may lead to an increase in interest rate risk.

Total assets at community banks increased by
$27.8 billion (1.3 percent) from second quarter 2015,
as loan and lease balances grew by $26.7 billion
(1.9 percent). Almost three out of every four community banks (71 percent) increased their loan and lease
balances from the previous quarter, as did all major
loan categories. Close to 74 percent of the quarterly
increase was driven by nonfarm nonresidential loans (up
$9.4 billion, or 2.3 percent), 1-to-4 family residential
mortgages (up $3.5 billion, or 1 percent), multifamily
residential mortgages (up $3.5 billion, or 4.2 percent),
and construction and development loans (up $3.4 billion,
or 3.9 percent). The year-over-year increase in loan and
lease balances was $111.1 billion (8.5 percent). Almost
half (47 percent) of the yearly increase in loan and lease
balances was led by nonfarm nonresidential loans (up
$31.3 billion, or 8.2 percent) and 1-to-4 family residential mortgages (up $21.2 billion, or 6 percent). Community banks continued to expand their 12-month growth
rate in loan and lease balances at almost twice the rate of
noncommunity banks (5.4 percent).

Noninterest Expense Rose From
Third Quarter 2014
With 68 percent of community banks increasing their
noninterest expense from third quarter 2014, noninterest expense of $15.1 billion grew $978.9 million
(6.9 percent). While noninterest expense increased
at community banks, it was down $3.2 billion
(3.4 percent) for noncommunity banks. The annual
increase in noninterest expense for community banks
was led by higher salary and employee benefits (up
$629 million, or 8.1 percent). Full-time employees
increased by 10,846 (2.5 percent) from third quarter 2014 to 439,171. Average assets per employee at
community banks totaled $4.8 million in the latest
quarter, up from $4.6 million in third quarter 2014.

Community Banks Expanded Small Loans to Businesses
Community banks reported $299.2 billion in small
loans to businesses during the third quarter, up
$2.5 billion (0.8 percent) from the second quarter.2
The quarterly growth in these loans at community

1

Long-term assets are loans and debt securities with remaining
maturities or repricing intervals of over five years.

2

Small loans to businesses consist of loans to commercial borrowers
up to $1 million and farm loans up to $500,000.

Chart 3

Chart 4
Noncurrent Loan Rates for FDIC-Insured Community Banks

Change in Loan Balances and Unused Commitments
Billions of Dollars

FDIC-Insured Community Banks

Percent of Loan Portfolio Noncurrent
16

31.3
Change 3Q 2015 vs. 3Q 2014
Change 3Q 2015 vs. 2Q 2015

21.2

C&D Loans
Nonfarm Nonresidential RE
1-to-4 Family RE
C&I Loans
Home Equity
Credit Cards

14
12
10

15.0
10.8

9.4

6

7.7
2.0

Nonfarm
Nonresidential
RE

8

13.8

C&I
Loans

Source: FDIC.

FDIC Quarterly	

3.5

1-to-4
Family
Residential
RE

3.4

C&D
Loans

4.5
1.7 2.0

Agricultural Loans to
Production Individuals
Loans

Loan Balances

3.7

3.2
0.8

4

3.7

1.0
Home
Equity

2
CRE & C&D

C&I
Loans

0
2007

Unused
Commitments

2008

2009

2010

2011

2012

2013

2014

2015

Source: FDIC.

16

2015, Volume 9, No. 4

Quarterly Banking Profile
banks outperformed that of noncommunity banks
(down $876.2 million, or 0.2 percent). While close to
60 percent of the quarterly increase was led by agricultural production loans (up $1.5 billion, or 5.3 percent),
commercial and industrial loans declined (down
$202.5 million, or 0.2 percent). The yearly increase
in small loans to businesses at community banks (up
$9.5 billion, or 3.3 percent) surpassed that of noncommunity banks (up $2.4 billion, or 0.7 percent). The
12-month increase at community banks was led by
commercial and industrial loans (up $4 billion, or
4.6 percent), and nonfarm nonresidential loans (up
$2.8 billion, or 1.9 percent). Community banks continued to hold 44 percent of all small loans to businesses.

was 53 basis points below the 1.7 percent at noncommunity banks. All major loan categories at community
banks, except for commercial and industrial loans, had
lower noncurrent rates from the previous quarter. After
declining for 21 consecutive quarters, the noncurrent
rate for commercial and industrial loans (1.09 percent)
increased 6 basis points from second quarter 2015. The
quarterly net charge-off rate was 0.14 percent, down
3 basis points from third quarter 2014. All major loan
categories, except for commercial and industrial loans
(up 4 basis points), had a decline in the net charge-off
rate from the year before.

One Community Bank Failed in the Third Quarter
The number of FDIC-insured community banks totaled
5,812 at the end of third quarter 2015, down 69 banks
from the previous quarter. One community bank failed
during the quarter. One new community bank charter
was added during the same period.

Noncurrent Rate Declined for 22 Consecutive Quarters
With nearly 60 percent of community banks reducing their noncurrent loan and lease balances from
the year-ago quarter, the noncurrent loan and lease
balance declined $3.1 billion (15.7 percent) from third
quarter 2014 to $16.5 billion. During third quarter
2015, the noncurrent rate was 1.17 percent, down
7 basis points from the previous quarter and 33 basis
points from third quarter 2014. The noncurrent rate

FDIC Quarterly	

Author:	 Benjamin Tikvina, Financial Analyst
	
Division of Insurance and Research
	
(202) 898-6578

17

2015, Volume 9, No. 4

TABLE I-B.  Selected Indicators, FDIC-Insured Community Banks
Return on assets (%)������������������������������������������������������������������������������������������������������
Return on equity (%)�������������������������������������������������������������������������������������������������������
Core capital (leverage) ratio (%)������������������������������������������������������������������������������������
Noncurrent assets plus other real estate owned to assets (%)������������������������������������
Net charge-offs to loans (%)������������������������������������������������������������������������������������������
Asset growth rate (%)�����������������������������������������������������������������������������������������������������
Net interest margin (%)���������������������������������������������������������������������������������������������������
Net operating income growth (%)����������������������������������������������������������������������������������
Number of institutions reporting�������������������������������������������������������������������������������������
Percentage of unprofitable institutions (%)��������������������������������������������������������������������

2015*
0.99
8.88
10.72
1.14
0.13
3.15
3.58
10.29
5,812
5.04

2014*
0.92
8.44
10.60
1.46
0.20
1.22
3.61
1.04
6,107
6.80

2014
0.93
8.46
10.57
1.34
0.21
2.31
3.61
4.92
6,037
6.44

2013
0.90
8.28
10.43
1.73
0.32
0.33
3.59
14.61
6,306
8.40

2012
0.83
7.68
10.18
2.26
0.58
2.25
3.67
56.25
6,541
11.15

2011
0.55
5.19
9.98
2.84
0.87
1.60
3.74
207.82
6,798
16.34

2010
0.21
2.07
9.57
3.25
1.11
-2.45
3.71
206.20
7,014
22.16

* Through September 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending June 30.

TABLE II-B.  Aggregate Condition and Income Data, FDIC-Insured Community Banks
3rd Quarter
2015
5,812
439,171

2nd Quarter
2015
5,881
442,060

3rd Quarter
2014
6,107
445,091

%Change
3Q14-3Q15
-4.8
-1.3

$2,095,679
1,076,041
373,813
411,999
90,288
50,092
192,959
59,947
2,191
50,561
35,488
589
1,414,406
18,660
1,395,746
438,119
7,237
13,735
240,842

$2,085,054
1,064,892
373,660
407,547
87,874
50,049
193,551
60,284
2,152
48,759
35,023
568
1,401,942
18,812
1,383,130
443,577
7,746
13,597
237,004

$2,031,679
1,017,259
355,439
396,537
82,912
49,206
186,293
58,280
1,790
46,074
29,466
573
1,336,799
19,458
1,317,341
452,580
9,450
12,561
239,746

3.2
5.8
5.2
3.9
8.9
1.8
3.6
2.9
22.4
9.7
20.4
2.8
5.8
-4.1
6.0
-3.2
-23.4
9.3
0.5

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

2,095,679
1,717,385
1,717,000
385
70,040
1,304,485
125,039
455
16,794
236,006
235,886

2,085,054
1,708,626
1,708,188
438
67,309
1,308,563
127,407
524
15,633
232,865
232,746

2,031,679
1,672,408
1,672,191
217
59,462
1,300,115
117,209
400
15,628
226,035
225,881

3.2
2.7
2.7
77.5
17.8
0.3
6.7
13.8
7.5
4.4
4.4

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���������������������������������������������������������������������������������������
First Three
INCOME DATA
Quarters 2015
Total interest income�������������������������������������������������������������������
$57,455
Total interest expense�����������������������������������������������������������������
6,528
	
Net interest income��������������������������������������������������������������
50,926
Provision for loan and lease losses��������������������������������������������
1,683
Total noninterest income�������������������������������������������������������������
14,623
Total noninterest expense�����������������������������������������������������������
44,593
Securities gains (losses)�������������������������������������������������������������
453
Applicable income taxes�������������������������������������������������������������
4,481
Extraordinary gains, net��������������������������������������������������������������
26
	
Total net income (includes minority interests)���������������������
15,271
		
Bank net income������������������������������������������������������������
15,248
Net charge-offs����������������������������������������������������������������������������
1,297
Cash dividends����������������������������������������������������������������������������
6,861
Retained earnings�����������������������������������������������������������������������
8,387
	
Net operating income�����������������������������������������������������������
14,893

8,203
16,528
9,695
184,588
1,945,663
93,861
286,501
242,405
16,035
53,177
First Three
Quarters 2014
$56,664
6,820
49,844
1,889
13,219
43,773
390
3,980
2
13,812
13,795
1,907
6,192
7,603
13,504

8,188
17,328
9,961
189,057
1,933,577
95,914
282,020
247,787
14,575
58,202
3rd Quarter
2015
$19,660
2,208
17,452
560
4,955
15,145
100
1,593
1
5,209
5,202
477
2,183
3,019
5,134

9,025
20,004
11,346
197,961
1,879,887
85,855
248,643
238,809
18,907
43,485
3rd Quarter
2014
$19,311
2,274
17,037
574
4,536
14,820
110
1,394
-6
4,890
4,882
554
1,943
2,940
4,807

(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��������������������������������������������������������������������������������������������������������



FDIC Quarterly	

%Change
1.4
-4.3
2.2
-10.9
10.6
1.9
16.4
12.6
1,357.5
10.6
10.5
-32.0
10.8
10.3
10.3

-9.1
-17.4
-14.6
-6.8
3.5
9.3
15.2
1.5
-15.2
22.3
%Change
3Q14-3Q15
1.8
-2.9
2.4
-2.4
9.3
2.2
-9.6
14.3
N/M
6.5
6.5
-14.0
12.4
2.7
6.8

N/M - Not Meaningful

18

2015, Volume 9, No. 4

Quarterly Banking Profile
TABLE II-B.  Aggregate Condition and Income Data, FDIC-Insured Community Banks
Prior Periods Adjusted for Mergers
3rd Quarter
2015
5,812
439,171

2nd Quarter
2015
5,811
439,337

3rd Quarter
2014
5,811
434,526

%Change
3Q14-3Q15
0.0
1.1

$2,095,679
1,076,041
373,813
411,999
90,288
50,092
192,959
59,947
2,191
50,561
35,488
589
1,414,406
18,660
1,395,746
438,119
7,237
13,735
240,842

$2,067,837
1,054,150
370,268
402,600
86,883
49,120
190,924
59,118
2,182
48,843
35,192
568
1,387,660
18,675
1,368,985
442,211
7,672
13,452
235,517

$1,983,966
991,454
352,602
380,691
79,511
46,861
177,992
57,952
2,213
46,013
30,464
555
1,303,320
18,939
1,284,381
444,498
9,288
11,806
233,992

5.6
8.5
6.0
8.2
13.6
6.9
8.4
3.4
-1.0
9.9
16.5
6.0
8.5
-1.5
8.7
-1.4
-22.1
16.3
2.9

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

2,095,679
1,717,385
1,717,000
385
70,040
1,304,485
125,039
455
16,794
236,006
235,886

2,067,837
1,695,089
1,694,664
425
66,790
1,300,322
125,828
455
15,472
230,992
230,874

1,983,966
1,628,961
1,628,577
385
60,231
1,269,746
118,713
451
15,116
220,725
220,603

5.6
5.4
5.4
0.2
16.3
2.7
5.3
0.9
11.1
6.9
6.9

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���������������������������������������������������������������������������������������
First Three
INCOME DATA
Quarters 2015
Total interest income�������������������������������������������������������������������
$57,455
Total interest expense�����������������������������������������������������������������
6,528
	
Net interest income��������������������������������������������������������������
50,926
Provision for loan and lease losses��������������������������������������������
1,683
Total noninterest income�������������������������������������������������������������
14,623
Total noninterest expense�����������������������������������������������������������
44,593
Securities gains (losses)�������������������������������������������������������������
453
Applicable income taxes�������������������������������������������������������������
4,481
Extraordinary gains, net��������������������������������������������������������������
26
	
Total net income (includes minority interests)���������������������
15,271
		
Bank net income������������������������������������������������������������
15,248
Net charge-offs����������������������������������������������������������������������������
1,297
Cash dividends����������������������������������������������������������������������������
6,861
Retained earnings�����������������������������������������������������������������������
8,387
	
Net operating income�����������������������������������������������������������
14,893

8,203
16,528
9,695
184,588
1,945,663
93,861
286,501
242,405
16,035
53,177
First Three
Quarters 2014
$54,502
6,604
47,898
1,713
12,834
41,852
394
3,848
2
13,716
13,698
1,770
6,176
7,523
13,405

8,180
17,189
9,845
188,052
1,917,421
94,424
278,574
249,519
14,575
55,437
3rd Quarter
2015
$19,660
2,208
17,452
560
4,955
15,145
100
1,593
1
5,209
5,202
477
2,183
3,019
5,134

9,006
19,604
11,223
194,050
1,836,654
87,617
256,473
233,594
13,056
40,433
3rd Quarter
2014
$18,599
2,207
16,392
574
4,460
14,166
108
1,366
-6
4,846
4,839
567
1,925
2,914
4,765

(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��������������������������������������������������������������������������������������������������������



FDIC Quarterly	

%Change
5.4
-1.1
6.3
-1.7
13.9
6.5
15.0
16.5
1,357.5
11.3
11.3
-26.7
11.1
11.5
11.1

-8.9
-15.7
-13.6
-4.9
5.9
7.1
11.7
3.8
22.8
31.5
%Change
3Q14-3Q15
5.7
0.0
6.5
-2.3
11.1
6.9
-7.2
16.6
N/M
7.5
7.5
-15.9
13.4
3.6
7.7

N/M - Not Meaningful

19

2015, Volume 9, No. 4

TABLE III-B.  Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks
Geographic Regions*

Third Quarter 2015
(dollar figures in millions)

All Community Banks
Number of institutions reporting�����������������������������������
5,812
Total employees (full-time equivalent)�������������������������
439,171

New York
684
87,774

Atlanta
715
55,854

Chicago
1,282
92,541

Kansas City
1,502
70,811

Dallas
San Francisco
1,244
385
95,510
36,681

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

$2,095,679
1,076,041
373,813
411,999
90,288
50,092
192,959
59,947
2,191
50,561
35,488
589
1,414,406
18,660
1,395,746
438,119
7,237
13,735
240,842

$544,584
320,965
126,660
113,134
17,206
16,834
46,302
12,758
463
527
10,894
164
391,283
4,465
386,818
99,775
1,011
4,481
52,499

$245,743
134,618
43,875
57,668
15,084
7,669
18,716
6,580
132
1,307
2,732
98
163,855
2,291
161,563
48,542
1,886
1,262
32,489

$387,310
194,799
71,222
70,840
11,966
11,637
36,229
12,115
434
7,799
6,319
63
257,197
3,593
253,605
85,322
1,503
2,219
44,661

$325,354
146,927
48,088
48,484
11,772
4,573
31,803
9,792
474
28,054
5,308
35
221,849
3,074
218,775
69,787
1,091
1,720
33,982

$404,953
185,067
61,617
74,803
26,287
4,338
41,247
13,693
306
10,051
7,037
124
256,972
3,419
253,553
97,472
1,337
2,578
50,014

$187,734
93,665
22,351
47,070
7,973
5,041
18,662
5,009
382
2,823
3,197
106
123,251
1,818
121,432
37,222
409
1,474
27,197

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

2,095,679
1,717,385
1,717,000
385
70,040
1,304,485
125,039
455
16,794
236,006
235,886

544,584
432,440
432,139
301
24,806
317,952
44,851
309
5,615
61,370
61,317

245,743
204,256
204,246
9
7,213
157,091
11,990
23
1,841
27,634
27,616

387,310
319,969
319,952
17
11,706
257,242
20,445
50
2,909
43,938
43,917

325,354
264,723
264,723
0
10,413
210,747
22,322
4
2,038
36,268
36,267

404,953
339,867
339,867
0
9,927
251,760
17,694
6
2,701
44,686
44,661

187,734
156,130
156,073
58
5,975
109,692
7,737
66
1,691
22,110
22,109

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�������������������������������������

8,203
16,528
9,695
184,588
1,945,663
93,861
286,501
242,405
16,035
53,177

2,262
5,699
2,662
55,176
508,167
35,897
68,982
51,903
3,877
18,841

1,124
2,381
1,530
20,495
225,669
9,372
29,546
9,431
535
6,276

1,508
3,147
2,552
32,881
359,082
14,315
49,809
64,601
6,132
8,910

1,112
1,704
1,066
22,130
303,233
16,076
44,239
66,243
816
7,601

1,749
2,664
1,109
36,180
374,525
13,705
48,538
39,456
618
7,410

448
934
777
17,726
174,988
4,495
45,386
10,770
4,057
4,139

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

$19,660
2,208
17,452
560
4,955
15,145
100
1,593
1
5,209
5,202
477
2,183
3,019
5,134

$4,898
703
4,195
212
940
3,483
41
477
0
1,004
1,002
136
219
783
977

$2,378
270
2,108
50
566
1,995
12
181
-1
459
458
60
141
316
452

$3,546
391
3,155
47
1,242
3,006
17
316
1
1,047
1,045
113
557
488
1,031

$3,104
351
2,753
89
737
2,235
11
198
0
979
979
56
493
486
969

$3,969
364
3,606
137
965
3,040
13
207
0
1,200
1,198
100
558
640
1,188

$1,765
131
1,634
25
505
1,386
5
213
1
521
521
11
215
305
516

* See Table V-A (page 11) for explanations.

FDIC Quarterly	

20

2015, Volume 9, No. 4

Quarterly Banking Profile
Table IV-B.  Third Quarter 2015, FDIC-Insured Community Banks
All Community Banks
3rd Quarter
2015
Performance ratios (annualized, %)
Yield on earning assets��������������������������������������������������
Cost of funding earning assets��������������������������������������
	
Net interest margin��������������������������������������������������
Noninterest income to assets�����������������������������������������
Noninterest expense to assets���������������������������������������
Loan and lease loss provision to assets������������������������
Net operating income to assets�������������������������������������
Pretax return on assets��������������������������������������������������
Return on assets�������������������������������������������������������������
Return on equity�������������������������������������������������������������
Net charge-offs to loans and leases������������������������������
Loan and lease loss provision to net charge-offs���������
Efficiency ratio����������������������������������������������������������������
Net interest income to operating revenue����������������������
% of unprofitable institutions������������������������������������������
% of institutions with earnings gains������������������������������

4.08
0.46
3.62
0.95
2.91
0.11
0.99
1.31
1.00
8.93
0.14
117.58
67.24
77.88
5.16
58.48

2nd Quarter
2015
4.03
0.46
3.57
0.98
2.92
0.11
1.00
1.29
1.02
9.10
0.14
120.28
67.66
77.10
5.99
58.51

Third Quarter 2015, Geographic Regions*
New York
3.90
0.56
3.34
0.70
2.58
0.16
0.72
1.10
0.74
6.61
0.14
155.80
67.44
81.70
7.46
57.31

Atlanta
4.24
0.48
3.76
0.93
3.26
0.08
0.74
1.04
0.75
6.70
0.15
82.84
74.16
78.82
8.67
59.58

Chicago
3.98
0.44
3.54
1.29
3.13
0.05
1.07
1.42
1.09
9.62
0.18
41.13
68.06
71.75
5.54
58.35

Kansas City

Dallas

4.12
0.47
3.65
0.91
2.76
0.11
1.20
1.45
1.21
10.93
0.10
159.46
63.65
78.89
3.06
58.39

4.27
0.39
3.88
0.96
3.02
0.14
1.18
1.40
1.19
10.88
0.16
137.44
66.23
78.88
3.70
57.23

San Francisco
4.11
0.30
3.81
1.10
3.01
0.05
1.12
1.59
1.13
9.54
0.04
224.16
64.46
76.40
6.23
63.38

Table V-B.  First Three Quarters 2015, FDIC-Insured Community Banks
All Community Banks
First Three
First Three
Quarters 2015 Quarters 2014
Performance ratios (%)
Yield on earning assets��������������������������������������������������
Cost of funding earning assets��������������������������������������
	
Net interest margin��������������������������������������������������
Noninterest income to assets�����������������������������������������
Noninterest expense to assets���������������������������������������
Loan and lease loss provision to assets������������������������
Net operating income to assets�������������������������������������
Pretax return on assets��������������������������������������������������
Return on assets�������������������������������������������������������������
Return on equity�������������������������������������������������������������
Net charge-offs to loans and leases������������������������������
Loan and lease loss provision to net charge-offs���������
Efficiency ratio����������������������������������������������������������������
Net interest income to operating revenue����������������������
% of unprofitable institutions������������������������������������������
% of institutions with earnings gains������������������������������

4.03
0.46
3.58
0.95
2.90
0.11
0.97
1.28
0.99
8.88
0.13
129.76
67.68
77.69
5.04
63.04

4.11
0.49
3.61
0.88
2.93
0.13
0.90
1.19
0.92
8.44
0.20
99.07
69.08
79.04
6.80
60.26

First Three Quarters 2015, Geographic Regions*
New York
3.87
0.56
3.31
0.70
2.61
0.16
0.69
1.07
0.72
6.44
0.16
143.34
68.58
81.42
7.46
59.50

Atlanta
4.21
0.48
3.72
0.92
3.22
0.09
0.77
1.06
0.80
7.15
0.15
89.16
73.96
78.73
8.95
60.28

Chicago
3.95
0.44
3.51
1.29
3.08
0.07
1.09
1.42
1.11
9.89
0.15
73.59
67.41
71.57
4.99
64.04

Kansas City

Dallas

4.05
0.47
3.58
0.91
2.76
0.10
1.16
1.41
1.18
10.72
0.08
189.85
64.62
78.57
2.60
65.78

4.21
0.39
3.82
0.93
2.99
0.13
1.14
1.36
1.16
10.64
0.14
153.57
66.74
79.16
3.94
60.37

San Francisco
4.04
0.30
3.74
1.12
3.01
0.04
1.08
1.56
1.09
9.22
0.02
324.70
65.16
75.60
6.75
69.09

* See Table V-A (page 11) for explanations.

FDIC Quarterly	

21

2015, Volume 9, No. 4

Table VI-B.  Loan Performance, FDIC-Insured Community Banks
Geographic Regions*
September 30, 2015

All Community Banks

New York

Atlanta

Chicago

Kansas City

Dallas

San Francisco

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

0.55
0.49
0.37
0.17
0.44
0.89
0.51
1.70
1.85
1.70
0.34
0.58

0.51
0.43
0.35
0.14
0.49
0.79
0.47
2.97
2.43
2.99
0.34
0.58

0.67
0.75
0.43
0.21
0.52
1.05
0.57
1.68
1.44
1.68
0.21
0.69

0.61
0.40
0.40
0.26
0.44
1.02
0.41
1.01
1.31
1.00
0.32
0.59

0.48
0.47
0.39
0.27
0.35
0.73
0.58
1.03
3.05
0.93
0.35
0.50

0.63
0.45
0.43
0.15
0.44
1.04
0.62
1.96
1.23
1.98
0.34
0.68

0.33
0.43
0.22
0.07
0.28
0.64
0.41
0.79
0.91
0.78
0.38
0.36

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

1.22
1.76
1.10
0.44
0.78
1.53
1.09
0.71
0.98
0.70
0.96
1.17

1.44
1.76
1.25
0.22
0.93
2.01
1.07
0.81
1.34
0.79
4.30
1.46

1.54
3.16
1.34
0.71
0.73
1.49
1.15
1.04
0.59
1.05
0.58
1.45

1.37
1.95
1.27
0.89
0.85
1.65
1.03
0.47
0.88
0.45
0.36
1.22

0.81
1.59
0.93
0.45
0.39
0.81
1.01
0.45
1.25
0.41
0.43
0.77

1.04
1.05
0.93
0.96
0.57
1.24
1.29
1.00
0.66
1.01
0.44
1.04

0.75
1.39
0.63
0.21
0.71
0.91
0.93
0.35
0.73
0.32
0.64
0.76

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

0.08
0.04
0.07
0.02
0.12
0.10
0.22
0.74
4.15
0.61
0.13
0.13

0.11
0.18
0.15
0.02
0.15
0.10
0.24
0.93
4.09
0.81
0.15
0.16

0.11
0.16
0.09
0.07
0.12
0.11
0.21
0.71
1.33
0.69
0.21
0.15

0.11
0.03
0.08
0.03
0.20
0.17
0.25
0.55
3.49
0.43
0.16
0.15

0.03
-0.20
0.06
0.01
0.06
0.06
0.16
0.68
9.62
0.24
0.05
0.08

0.05
0.03
0.04
0.06
0.06
0.08
0.28
0.81
1.32
0.80
0.16
0.14

-0.05
-0.10
-0.06
-0.01
-0.03
-0.02
0.08
0.66
1.94
0.54
0.40
0.02

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

$1,076.0
90.3
412.0
87.6
50.1
373.8
193.0
59.9
2.2
57.8
86.0
1,415.0

$321.0
17.2
113.1
45.2
16.8
126.7
46.3
12.8
0.5
12.3
11.4
391.4

$134.6
15.1
57.7
6.2
7.7
43.9
18.7
6.6
0.1
6.4
4.0
164.0

$194.8
12.0
70.8
14.2
11.6
71.2
36.2
12.1
0.4
11.7
14.1
257.3

$146.9
11.8
48.5
7.3
4.6
48.1
31.8
9.8
0.5
9.3
33.4
221.9

$185.1
26.3
74.8
6.4
4.3
61.6
41.2
13.7
0.3
13.4
17.1
257.1

$93.7
8.0
47.1
8.2
5.0
22.4
18.7
5.0
0.4
4.6
6.0
123.4

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

286,501
22,486
51,846
89,301

68,982
4,671
15,658
21,510

29,546
3,891
7,282
8,297

49,809
2,502
7,535
18,561

44,239
2,735
5,712
14,677

48,538
6,356
11,466
16,414

45,386
2,330
4,193
9,841

* See Table V-A (page 11) for explanations.
** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.

FDIC Quarterly	

22

2015, Volume 9, No. 4

Quarterly Banking Profile
INSURANCE FUND INDICATORS
■	 DIF Reserve Ratio Rises 3 Basis Points to 1.09 Percent
■	 Insured Deposits Increase by 1.1 Percent
■	 One Institution Failed During Third Quarter
Total assets of the 6,270 FDIC-insured institutions
increased by 0.3 percent ($46.5 billion) during the
third quarter of 2015. Total deposits increased by
0.5 percent ($58.0 billion), domestic office deposits
increased by 0.6 percent ($62.7 billion), and foreign
office deposits decreased by 0.3 percent ($4.7 billion).
Domestic interest-bearing deposits increased by
1.1 percent ($85.4 billion), and noninterest-bearing
deposits decreased by 0.8 percent ($22.7 billion). For
the 12 months ending September 30, total domestic
deposits grew by 4.7 percent ($476.4 billion), with
interest-bearing deposits increasing by 4.4 percent
($321.7 billion) and noninterest-bearing deposits
rising by 5.5 percent ($154.7 billion).1 Other borrowed
money increased by 6.0 percent, securities sold under
agreements to repurchase declined by 9.9 percent, and
foreign office deposits declined by 5.8 percent over the
same 12-month period.2

The DIF increased by $2.5 billion during the third
quarter of 2015 to $70.1 billion (unaudited). Assessment income of $2.2 billion and a negative provision
for insurance losses of $578 million were the main
drivers behind the fund balance increase. Interest on
investments, unrealized gains on available for sale securities, and other miscellaneous income added another
$188 million to the fund. Third quarter operating
expenses reduced the fund balance by $410 million.
For the first nine months of 2015, six insured institutions failed, with combined assets of $6.4 billion, at a
current estimated cost to the DIF of $0.8 billion. In
2011, as part of the FDIC’s long-term fund management plan, the FDIC Board of Directors adopted a
lower rate schedule for regular risk-based assessments
that will go into effect the quarter after the DIF reserve
ratio first meets or exceeds 1.15 percent.4 The DIF’s
reserve ratio was 1.09 percent on September 30, up
from 1.06 percent at June 30, 2015, and 0.88 percent
four quarters ago.

Total estimated insured deposits increased by
1.1 percent in the third quarter of 2015.3 For institutions existing at the start and the end of the most
recent quarter, insured deposits increased during the
quarter at 2,929 institutions (47 percent), decreased
at 3,318 institutions (53 percent), and remained
unchanged at 29 institutions. Estimated insured deposits increased by 4.5 percent over the 12 months ending
September 30, 2015.

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.6 Table 1 shows the distribution of the assessment base as of September 30, by
institution asset size category.

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
Figures for estimated insured deposits in this discussion include
insured branches of foreign banks, in addition to insured commercial
banks and savings institutions.
1

FDIC Quarterly	

Adoption of Federal Deposit Insurance Corporation Restoration Plan,
75 Fed. Reg. 66293 (Oct. 27, 2010).
5
There is an additional adjustment to the assessment base for
b
­ anker’s banks and custodial banks, as permitted under Dodd-Frank.
6
The Fourth Quarter 2010 Quarterly Banking Profile includes a more
detailed explanation of these changes.
4

23

2015, Volume 9, No. 4

Table 1

Distribution of the Assessment Base for FDIC-Insured Institutions*
by Asset Size
Data as of September 30, 2015
Asset Size
Less Than $1 Billion
$1 - $10 Billion
$10 - $50 Billion
$50 - $100 Billion
Over $100 Billion
Total

Number of
Institutions
5,564
596
72
14
24
6,270

Percent of
Assessment Base**
Total Institutions
($ Bil.)
88.7
$1,147.2
9.5
1,457.7
1.1
1,430.3
0.2
913.8
0.4
8,674.0
100.0
13,623.0

Percent of
Base
8.4
10.7
10.5
6.7
63.7
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.

and the 2 percent DRR using estimated insured
deposits would have been 0.94 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 DRR using both estimated insured deposits and the new assessment base. As of September
30, 2015, the FDIC reserve ratio would have been
0.51 percent using the new assessment base (compared
to 1.09 percent using estimated insured deposits),

FDIC Quarterly	

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

24

2015, Volume 9, No. 4

Quarterly Banking Profile
Table I-C.  Insurance Fund Balances and Selected Indicators
Deposit Insurance Fund*
3rd
2nd
1st
4th
Quarter
Quarter
Quarter
Quarter
2014
2014
2014
2013
$51,059
$48,893
$47,191
$40,758

3rd
Quarter
2015
$67,589

2nd
Quarter
2015
$65,296

1st
Quarter
2015
$62,780

4th
Quarter
2014
$54,320

3rd
Quarter
2013
$37,871

2nd
Quarter
2013
$35,742

1st
Quarter
2013
$32,958

4th
Quarter
2012
$25,224

3rd
Quarter
2012
$22,693

2,170

2,328

2,189

2,030

2,009

2,224

2,393

122

113

60

70

80

87

45

2,224

2,339

2,526

2,645

2,937

2,833

23

34

54

-9

66

0
410

0
434

0
396

0
408

0
406

0
428

-8

0
422

302
436

156
298

0
439

0
436

0
469

0
442

-578

-317

-426

-6,787

-1,663

-204

348

-4,588

-539

-33

-499

-3,344

-84

2

3

6

-43

6

6

9

9

46

51

55

1,878

57

64
2,526

-34
2,293

231
2,516

24
8,460

-91
3,261

73
2,166

25
1,702

-277
6,433

71
2,887

-96
2,129

30
2,784

-22
7,734

7
2,531

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

70,115

67,589

65,296

62,780

54,320

51,059

48,893

47,191

40,758

37,871

35,742

32,958

25,224

29.08

Reserve Ratio (%)�������������

1.09

32.37

33.55

33.03

33.27

34.82

36.79

43.19

61.58

66.88

133.73

178.67

222.85

1.06

1.03

1.01

0.88

0.84

0.80

0.79

0.68

0.64

0.60

0.45

0.35

6,420,010

6,350,086

6,343,610

6,211,168

6,141,707

6,109,681

6,120,778

6,010,853

5,967,558

5,951,124

5,999,614

7,405,043

7,248,466

4.53

3.93

3.64

3.33

2.92

2.66

2.02

-18.83

-17.67

-15.96

-14.67

6.19

7.32

Domestic Deposits����������� 10,695,512 10,629,336 10,616,332 10,408,065 10,213,080 10,099,337
  Percent change from
   four quarters earlier�������
4.72
5.25
6.56
5.93
6.04
7.16

9,962,453

9,825,399

9,631,580

9,424,503

9,454,658

9,474,585

9,084,803

5.37

3.70

6.02

5.45

6.85

7.88

6.55

(dollar figures in millions)
Beginning Fund Balance���
Changes in Fund Balance:
Assessments earned����������
Interest earned on
  investment securities������
Realized gain on sale of
 investments���������������������
Operating expenses�����������
Provision for insurance
 losses������������������������������
All other income,
  net of expenses���������������
Unrealized gain/(loss) on
 available-for-sale
 securities�������������������������
Total fund balance change���

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

Assessment Base***�������� 13,671,780 13,604,417 13,526,397 13,338,064 13,107,460 12,905,563 12,797,323 12,743,995 12,527,654 12,485,955 12,433,502 12,435,091 12,276,302
  Percent change from
   four quarters earlier�������
4.31
5.42
2.42
4.66
4.63
3.36
2.93
2.48
2.05
2.68
2.68
2.67
2.35
Number of Institutions
 Reporting�����������������������

6,279

6,357

6,428

6,518

6,598

6,665

6,739

0.79
0.64

0.80

1.03

1.06

6,900

6,949

7,028

1.09

DIF
Balance

0.88

$7,248,466

9/12

0.68

$25,224

12/12

32,958

7,405,043

35,742

5,999,614

6/13

5,951,124

40,758

5,967,558

12/13

47,191

6,010,853

3/14

0.45
0.35

37,871

9/13

48,893

6,120,778

6/14

0.60

51,059

6,109,681

9/14

54,320

6,141,707

12/14

62,780

6,211,168

3/15

9/12 12/12 3/13

6/13

9/13 12/13 3/14

6/14

9/14 12/14 3/15

6/15

7,190

DIF-Insured
Deposits

3/13

0.84

7,092

Deposit Insurance Fund Balance
and Insured Deposits
($ Millions)

DIF Reserve Ratios
Percent of Insured Deposits
1.01

6,821

6,343,610

67,589

6,350,086

9/15

9/15

65,296

6/15

70,115

6,420,010

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

2015****
203
$51,068

2014****
329
$102,256

2014
291
$86,712

2013

2012

2011

2010

467
$152,687

651
$232,701

813
$319,432

884
$390,017

Failed Institutions
51
92
	
Number of institutions����������������������������������������������������������������������
6
14
18
24
157
$11,617
$34,923
$6,421
$1,816
$2,914
$6,044
	
Total assets*****�������������������������������������������������������������������������������
$92,085
* Quarterly financial statement results are unaudited.
** 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.
*** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks.
**** Through September 30.
***** Total assets are based on final Call Reports submitted by failed institutions.

FDIC Quarterly	

25

2015, Volume 9, No. 4

Table III-C.  Estimated FDIC-Insured Deposits by Type of Institution
(dollar figures in millions)
September 30, 2015
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�������������������������������������������������

5,410
3,588
1,015
807

$14,726,590
2,369,036
10,102,573
2,254,981

$9,821,750
1,853,152
6,444,181
1,524,417

$5,713,221
1,335,207
3,603,766
774,248

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

860
416
407
37

1,073,629
687,967
362,195
23,467

827,354
536,968
272,157
18,229

677,021
446,605
215,557
14,858

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

6,270

15,800,219

10,649,105

6,390,242

U.S. Branches of Foreign Banks�������������������������������������������������

9

98,665

46,408

29,768

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

6,279

15,898,884

10,695,512

6,420,010

Other FDIC-Insured Institutions
	

* Excludes $1.4 trillion in foreign office deposits, which are not FDIC insured.

Table IV-C.  Distribution of Institutions and Assessment Base by Assessment Rate Range
Quarter Ending June 30, 2015 (dollar figures in billions)
Number of
Annual Rate in Basis Points
Institutions
2.50-5.00
1,601
5.01-7.50
3,107
7.51-10.00
972
10.01-15.00
425
15.01-20.00
23
20.01-25.00
191
25.01-30.00
1
30.01-35.00
37
greater than 35.00
0

Percent of Total
Institutions
25.18
48.88
15.29
6.69
0.36
3.00
0.02
0.58
0.00

Amount of
Assessment Base*
$2,086.3
10,020.4
1,025.3
371.1
41.9
52.1
0.0
7.3
0.0

Percent of Total
Assessment Base
15.34
73.66
7.54
2.73
0.31
0.38
0.00
0.05
0.00

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

FDIC Quarterly	

26

2015, Volume 9, No. 4

Quarterly Banking Profile

Notes to Users

The fourth step includes organizations that operate within a
limited geographic scope. This limitation of scope is used as a
proxy measure for a bank’s relationship approach to banking.
Banks that operate within a limited market area have more
ease in managing relationships at a personal level. Under this
step, four criteria are applied to each banking organization.
They include both a minimum and maximum number of total
banking offices, a maximum level of deposits for any one
office, and location-based criteria. The limits on the number
of and deposits per office are gradually adjusted upward over
time. For banking offices, banks must have more than one
office, and the maximum number of offices starts at 40 in 1985
and reaches 75 in 2010. The maximum level of deposits for
any one office is $1.25 billion in deposits in 1985 and $5 billion in deposits in 2010. The remaining geographic limitations
are also based on maximums for the number of states (fixed at
3) and large metropolitan areas (fixed at 2) in which the organization maintains offices. Branch office data are based on the
most recent data from the annual June 30 Summary of Deposits
Survey that are available at the time of publication.
Finally, the definition establishes an asset-size limit, also
adjusted upward over time from $250 million in 1985 to
$1 billion in 2010, below which the limits on banking activi­
ties and geographic scope are waived. This final step acknowledges the fact that most of those small banks that are not
excluded as specialty banks meet the requirements for banking activities and geographic limits in any event.

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 com­ arability of source data and reporting differences
p
over time.

Tables I-A through VIII-A.
The information presented in Tables I-A through V-A of
the FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and savings insti­
tutions. 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
g
­ eographic region. Quarterly and full-year data are provided
for selected indicators, including aggregate condition and
income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off
information for loans outstanding and other assets.

Tables I-B through VI-B.

Summary of FDIC Research Definition of Community
Banking Organizations

The information presented in Tables I-B through VI-B is
aggregated for all FDIC-insured commercial banks and savings
institutions meeting the criteria for community banks that
were developed for the FDIC’s Community Banking Study,
published in December, 2012: http://fdic.gov/regulations/
resources/cbi/report/cbi-full.pdf.
The determination of which insured institutions are considered community banks is based on five steps.
The first step in defining a community bank is to aggre­ ate
g
all charter-level data reported under each holding company
into a single banking organization. This aggrega­ ion applies
t
both to balance-sheet measures and the number and location of banking offices. Under the FDIC definition, if the
banking organization is designated as a community bank,
every charter reporting under that organization is also considered a community bank when working with data at the
charter level.
The second step is to exclude any banking organization
where more than 50 percent of total assets are held in certain
specialty banking charters, including: credit card specialists,
consumer nonbank banks, industrial loan compa­ ies, trust comn
panies, bankers’ banks, and banks holding 10 percent or more
of total assets in foreign offices.
Once the specialty organizations are removed, the third step
involves including organizations that engage in basic banking
activities as measured by the total loans-to-assets ratio (greater than 33 percent) and the ratio of core depos­ts to assets
i
(greater than 50 percent). Core deposits are defined as nonbrokered deposits in domestic offices. Analysis of the underlying data shows that these thresholds establish meaningful
levels of basic lending and deposit gathering and still allow
for a degree of diversity in how indi­ idual banks construct
v
their balance sheets.
FDIC Quarterly	

Community banks are designated at the level of the banking.
(All charters under designated holding companies are considered community banking charters.)
Exclude: Any organization with:
—	No loans or no core deposits
—	Foreign Assets ≥ 10% of total assets
—	More than 50% of assets in certain specialty banks,
including:
• credit card specialists
• consumer nonbank banks1
• industrial loan companies
• trust companies
• bankers’ banks
Include: All remaining banking organizations with:
2
—	Total assets < indexed size threshold  
—	Total assets ≥ indexed size threshold, where:
•	 Loan to assets > 33%
•	 Core deposits to assets > 50%
•	 More than 1 office but no more than the indexed
m
­ aximum number of offices.3
Consumer nonbank banks are financial institutions with limited charters that can make commercial loans or take deposits, but not both.	
2
Asset size threshold indexed to equal $250 million in 1985 and
$1 billion in 2010.
3
Maximum number of offices indexed to equal 40 in 1985 and 75
in 2010.
1

27

2015, Volume 9, No. 4

•	 Number of large MSAs with offices ≤ 2
•	 Number of states with offices ≤ 3
•	 No single office with deposits > indexed maximum
branch deposit size.4

bilities, and income and expenses of group members. Unless
indicated otherwise, growth rates are not adjusted for mergers or other changes in the composition of the community
bank subgroup.
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.

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

ACCOUNTING CHANGES

Debt Issuance Costs
In April 2015, the Financial Accounting Standards Board
(FASB) issued Accounting Standards Update (ASU) No.
2015-03, “Simplifying the Presentation of Debt Issuance
Costs.” This ASU requires debt issuance costs associated with
a recognized debt liability to be presented as a direct deduction from the face amount of the related debt liability, similar
to debt discounts. The ASU is limited to the presentation of
debt issuance costs; therefore, the recognition and measurement guidance for such costs is unaffected. At present,
Accounting Standards Codification (ASC) Subtopic 835-30,
Interest—Imputation of Interest, requires debt issuance costs
to be reported on the balance sheet as an asset (i.e., a deferred
charge). For Call Report purposes, the costs of issuing debt
currently are reported, net of accumulated amortization, in
“Other assets.”
For institutions that are public business entities, as defined
under U.S. generally accepted accounting principles
(GAAP), ASU 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December
15, 2015. For example, institutions with a calendar year fiscal
year that are public business entities must apply the ASU in
their Call Reports beginning March 31, 2016. For institutions
that are not public business entities (i.e., that are private
companies), the ASU is effective for fiscal years beginning
after December 15, 2015, and interim periods within fiscal
years beginning after December 15, 2016. Thus, institutions
with a calendar year fiscal year that are private companies
must apply the ASU in their December 31, 2016, and subsequent quarterly Call Reports. Early adoption of the guidance
in ASU 2015-03 is permitted.
Extraordinary Items
In January 2015, the FASB issued ASU No. 2015-01,
“Simplifying Income Statement Presentation by Eliminating
the Concept of Extraordinary Items.” This ASU eliminates
from U.S. GAAP the concept of extraordinary items. At
present, ASC Subtopic 225-20, Income Statement –
Extraordinary and Unusual Items (formerly Accounting
Principles Board Opinion No. 30, “Reporting the Results of
Operations”), requires an entity to separately classify, present,
and disclose extraordinary events and transactions. An event
or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its
classification as an extraordinary item. If an event or transaction currently meets the criteria for extraordinary classification, an institution must segregate the extraordinary item

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,
c
­ ertain adjustments are made to the OTS Thrift Financial
Reports to provide closer conformance with the reporting and
accounting requirements of the FFIEC Call Reports. (TFR
f
­ilers began filing Call Reports effective with the quarter
e
­ nding March 31, 2012.)
All condition and performance ratios represent weighted
averages, i.e., the sum of the individual numerator values
divided by the sum of individual denominator values. All
asset and liability figures used in calculating performance
ratios represent average amounts for the period (beginningof-period amount plus end-of-period amount plus any interim periods, divided by the total number of periods). For
“pooling-of-interest” mergers, the assets of the acquired
institution(s) are included in average assets since the yearto-date income includes the results of all merged institutions.
No adjustments are made for “purchase accounting” mergers.
Growth rates represent the percentage change over a
12-month period in totals for institutions in the base period
to totals for institutions in the current period. For the community bank subgroup, growth rates will reflect changes over
time in the number and identities of institutions designated
as community banks, as well as changes in the assets and liaMaximum branch deposit size indexed to equal $1.25 billion in 1985
and $5 billion in 2010.
4

FDIC Quarterly	

28

2015, Volume 9, No. 4

Quarterly Banking Profile
from the results of its ordinary operations and report the
extraordinary item in its income statement as “Extraordinary
items and other adjustments, net of income taxes.”
ASU 2015-01 is effective for fiscal years, and interim periods
within those fiscal years, beginning after December 15, 2015.
Thus, for example, institutions with a calendar year fiscal
year must begin to apply the ASU in their Call Reports for
March 31, 2016. Early adoption of ASU 2015-01 is permitted
provided that the guidance is applied from the beginning of
the fiscal year of adoption. For Call Report purposes, an institution with a calendar year fiscal year must apply the ASU
prospectively, that is, in general, to events or transactions
occurring after the date of adoption. However, an institution
with a fiscal year other than a calendar year may elect to
apply ASU 2015-01 prospectively or, alternatively, it may
elect to apply the ASU retrospectively to all prior calendar
quarters included in the institution’s year-to-date Call Report
income statement that includes the beginning of the fiscal
year of adoption.
After an institution adopts ASU 2015-01, any event or transaction that would have met the criteria for extraordinary classification before the adoption of the ASU should be reported in
“Other noninterest income,” or “Other noninterest expense,”
as appropriate, unless the event or transaction would otherwise
be reportable in the income statement. In addition, consistent
with ASU 2015-01, the agencies plan to remove reference to
the term “extraordinary items” from the income in 2016.
For additional information, institutions should refer to ASU
2015-01, which is available at http://www.fasb.org/jsp/FASB/
Page/SectionPage&cid=1176156316498.
Accounting by Private Companies for Identifiable Intangible Assets
in a Business Combination
In December 2014, the FASB issued ASU No. 2014-18,
“Accounting for Identifiable Intangible Assets in a Business
Combination,” which is a consensus of the Private Company
Council (PCC). This ASU provides an accounting alternative that permits a private company, as defined in U.S.
GAAP (and discussed in a later section of these Supple­
mental Instructions), to simplify the accounting for certain
intangible assets. The accounting alternative applies when a
private company is required to recognize or otherwise consider the fair value of intangible assets as a result of certain
transactions, including when applying the acquisition method
to a business combination under ASC Topic 805, Business
Combinations (formerly FASB Statement No. 141 (revised
2007), “Business Combinations”).
Under ASU 2014-18, a private company that elects the
accounting alternative should no longer recognize separately
from goodwill:
• 
Customer-related intangible assets unless they are capable
of being sold or licensed independently from the other
assets of a business, and
•  Noncompetition agreements.
However, because mortgage servicing rights and core deposit
intangibles are regarded as capable of being sold or licensed
independently, a private company that elects this accounting
alternative must recognize these intangible assets separately
from goodwill, initially measure them at fair value, and subsequently measure them in accordance with ASC Topic 350,

FDIC Quarterly	

Intangibles–Goodwill and Other (formerly FASB Statement
No. 142, “Goodwill and Other Intangible Assets”).
A private company that elects the accounting alternative in
ASU 2014-18 also must adopt the private company goodwill
accounting alternative described in ASU 2014-02,
“Accounting for Goodwill.” However, a private company that
elects the goodwill accounting alternative in ASU 2014-02 is
not required to adopt the accounting alternative for identifiable intangible assets in ASU 2014-18.
A private company’s decision to adopt ASU 2014-18 must be
made upon the occurrence of the first business combination
(or other transaction within the scope of the ASU) in fiscal
years beginning after December 15, 2015. The effective date
of the private company’s decision to adopt the accounting
alternative for identifiable intangible assets depends on the
timing of that first transaction.
If the first transaction occurs in the private company’s first
fiscal year beginning after December 15, 2015, the adoption
will be effective for that fiscal year’s annual financial reporting period and all interim and annual periods thereafter. If
the first transaction occurs in a fiscal year beginning after
December 15, 2016, the adoption will be effective in the
interim period that includes the date of the transaction and
subsequent interim and annual periods thereafter.
Early application of the intangibles accounting alternative is
permitted for any annual or interim period for which a private
company’s financial statements have not yet been made available for issuance. Customer-related intangible assets and noncompetition agreements that exist as of the beginning of the
period of adoption should continue to be accounted for separately from goodwill, i.e., such existing intangible assets
should not be combined with goodwill.
A bank or savings association that meets the private company
definition in U.S. GAAP is permitted, but not required, to
adopt ASU 2014-18 for Call Report purposes and may choose
to early adopt the ASU, provided it also adopts the private
company goodwill accounting alternative. If a private institution issues U.S. GAAP financial statements and adopts ASU
2014-18, it should apply the ASU’s intangible asset accounting alternative in its Call Report in a manner consistent with
its reporting of intangible assets in its financial statements.
For additional information on the private company
a
­ ccounting alternative for identifiable intangible assets,
i
­nstitutions should refer to ASU 2014-18, which is available
at http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=
1176156316498.
Private Company Accounting Alternatives, Including Accounting
for Goodwill
In May 2012, the Financial Accounting Foundation, the
independent private sector organization responsible for the
oversight of the FASB, approved the establishment of the
Private Company Council (PCC) to improve the process of
setting accounting standards for private companies. The PCC
is charged with working jointly with the FASB to determine
whether and in what circumstances to provide alternative
­
recognition, measurement, disclosure, display, effective date,
and transition guidance for private companies reporting under
U.S. GAAP. Alternative guidance for private companies may
include modifications or exceptions to otherwise applicable
existing U.S. GAAP standards. The banking agencies have

29

2015, Volume 9, No. 4

concluded that a bank or savings association that is a private
company, as defined in U.S. GAAP (as discussed in the next
section of these Supplemental Instructions), is permitted to
use private company accounting alternatives issued by the
FASB when preparing its Call Reports, except as provided in
12 U.S.C. 1831n(a) as described in the following sentence. If
the agencies determine that a particular accounting principle
within U.S. GAAP, including a private company accounting
alternative, is inconsistent with the statutorily specified supervisory objectives, the agencies may prescribe an accounting
principle for regulatory reporting purposes that is no less
s
­ tringent than U.S. GAAP. In such a situation, an institution
would not be permitted to use that particular private company accounting alternative or other accounting principle within U.S. GAAP for Call Report purposes. The agencies would
provide appropriate notice if they were to disallow any
accounting alternative under the statutory process.
On January 16, 2014, the FASB issued ASU No. 2014-02,
“Accounting for Goodwill,” which is a consensus of the PCC.
This ASU generally permits a private company to elect to
amortize goodwill on a straight-line basis over a period of ten
years (or less than ten years if more appropriate) and apply a
simplified impairment model to goodwill. In addition, if a private company chooses to adopt the ASU’s goodwill accounting alternative, the ASU requires the private company to
make an accounting policy election to test goodwill for
impairment at either the entity level or the reporting unit
level. Goodwill must be tested for impairment when a triggering event occurs that indicates that the fair value of an entity
(or a reporting unit) may be below its carrying amount. In
contrast, U.S. GAAP does not otherwise permit goodwill to
be amortized, instead requiring goodwill to be tested for
impairment at the reporting unit level annually and between
annual tests in certain circumstances. The ASU’s goodwill
accounting alternative, if elected by a private company, is
effective prospectively for new goodwill recognized in annual
periods beginning after December 15, 2014, and in interim
periods within annual periods beginning after December 15,
2015. Goodwill existing as of the beginning of the period of
adoption is to be amortized prospectively over ten years (or
less than ten years if more appropriate). The ASU states that
early application of the goodwill accounting alternative is
permitted for any annual or interim period for which a private
company’s financial statements have not yet been made available for issuance.
A bank or savings association that meets the private company
definition in ASU 2014-02 is permitted, but not required, to
adopt this ASU for Call Report purposes and may choose to
early adopt the ASU. If a private institution issues U.S.
GAAP financial statements and adopts the ASU, it should
apply the ASU’s goodwill accounting alternative in its Call
Report in a manner consistent with its reporting of goodwill
in its financial statements. Thus, for example, a private institution with a calendar year fiscal year that chooses to adopt
ASU 2014-02 must apply the ASU’s provisions in its
December 31, 2015, and subsequent quarterly Call Reports
unless early application of the ASU is elected. For example, if
a private institution with a calendar year fiscal year chooses
to early adopt ASU 2014-02 for third quarter 2015 financial
reporting purposes, the institution may implement the provisions of the ASU in its Call Report for September 30, 2015.
This would require the private institution to report in its

FDIC Quarterly	

third quarter 2015 Call Report nine months amortization of
goodwill existing as of January 1, 2015, and the amortization
of any new goodwill recognized in the first nine months of
2015. Goodwill amortization expense should be reported
unless the amortization is associated with a discontinued
operation, in which case the goodwill amortization should be
included within the results of discontinued operations and
reported as “Extraordinary items and other adjustments, net
of income taxes.”
For additional information on the private company accounting alternative for goodwill, institutions should refer to ASU
2014-02, which is available at http://www.fasb.org/jsp/FASB/
Page/SectionPage&cid=1176156316498.
Definitions of Private Company and Public Business Entity
According to ASU No. 2014-02, “Accounting for Goodwill,”
a private company is a business entity that is not a public
business entity. ASU No. 2013-12, “Definition of a Public
Business Entity,” which was issued in December 2013, added
this term to the Master Glossary in the Accounting Standards
Codification. This ASU states that a business entity, such as
a bank or savings association, that meets any one of five criteria set forth in the ASU is a public business entity for reporting purposes under U.S. GAAP, including for Call Report
purposes. An institution that is a public business entity is not
permitted to apply the private company goodwill accounting
alternative discussed in the preceding section when preparing
its Call Report.
For additional information on the definition of a public
b
­ usiness entity, institutions should refer to ASU 2013-12,
which is available at http://www.fasb.org/jsp/FASB/Page/
SectionPage&cid=1176156316498.
Reporting Certain Government-Guaranteed Mortgage Loans
Upon Foreclosure
In August 2014, the FASB issued Accounting Standards
Update (ASU) No. 2014-14, “Classification of Certain
Government-Guaranteed Mortgage Loans Upon Fore­
closure,” to address diversity in practice for how governmentguaranteed mortgage loans are recorded upon foreclosure.
The ASU updates guidance contained in ASC Subtopic 31040, Receivables—Troubled Debt Restructurings by Creditors
(formerly FASB Statement No. 15, “Accounting by Debtors
and Creditors for Troubled Debt Restructurings,” as amended), because U.S. GAAP previously did not provide specific
guidance on how to categorize or measure foreclosed mortgage loans that are government guaranteed.
This guidance is applicable to fully and partially governmentguaranteed mortgage loans. Upon foreclosure, the separate
other receivable should be measured based on the amount of
the loan balance (principal and interest) expected to be
recovered from the guarantor. This other receivable should be
reported in “All other assets.” Any interest income earned on
the other receivable would be reported in “Other interest
income.” Other real estate owned would not be recognized by
the institution.
For institutions that are public business entities, as defined
under U.S. GAAP, ASU 2014-14 is effective for fiscal years,
and interim periods within those fiscal years, beginning after
December 15, 2014. For example, institutions with a calendar
year fiscal year that are public business entities must apply the
ASU in their Call Reports beginning March 31, 2015.

30

2015, Volume 9, No. 4

Quarterly Banking Profile
However, institutions that are not public business entities
(i.e., that are private companies) are not required to apply the
guidance in ASU 2014-14 until annual periods ending after
December 15, 2015, and interim periods beginning
after December 15, 2015. Thus, institutions with a calendar
year fiscal year that are private companies must apply the
ASU in their December 31, 2015, and subsequent quarterly
Call Reports. Earlier adoption of the guidance in ASU 201414 is permitted if the institution has already adopted the
amendments in ASU No. 2014-04, “Reclassification of
Residential Real Estate Collateralized Consumer Mortgage
Loans Upon Foreclosure.” Entities can elect to apply ASU
2014-14 on either a modified retrospective transition basis or
a prospective transition basis. For additional information,
institutions should refer to ASU 2014-14, which is available
at http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=
1176156316498.
Reclassification of Residential Real Estate Collateralized Consumer
Mortgage Loans Upon Foreclosure
In January 2014, the FASB issued Accounting Standards
Update (ASU) No. 2014-04, “Reclassification of Residential
Real Estate Collateralized Consumer Mortgage Loans upon
Foreclosure,” to address diversity in practice for when certain
loan receivables should be derecognized and the real estate
collateral recognized. The ASU updated guidance contained
in Accounting Standards Codification 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).
Under prior accounting guidance, all loan receivables were
reclassified to other real estate owned (OREO) when the
institution, as creditor, obtained physical possession of the
property, regardless of whether formal foreclosure proceedings
had taken place. The new ASU clarifies when a creditor is
considered to have received physical possession (resulting
from an in-substance repossession or foreclosure) of residential real estate collateralizing a consumer mortgage loan.
Under the new guidance, physical possession for these residential real estate properties is considered to have occurred
and a loan receivable would be reclassified to OREO
only upon:
• 
The institution obtaining legal title upon completion of a
foreclosure even if the borrower has redemption rights that
provide the borrower with a legal right for a period of time
after foreclosure to reclaim the property by paying certain
amounts specified by law, or
• 
The completion of a deed in lieu of foreclosure or similar
legal agreement under which the borrower conveys all
interest in the residential real estate property to the institution to satisfy the loan.
Loans secured by real estate other than consumer mortgage
loans collateralized by residential real estate should continue
to be reclassified to OREO when the institution has received
physical possession of a borrower’s real estate, regardless of
whether formal foreclosure proceedings take place.
For institutions that are public business entities, as defined
under U.S. generally accepted accounting principles, ASU
2014-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. For
example, institutions with a calendar year fiscal year that are

FDIC Quarterly	

public business entities must apply the ASU in their Call
Reports beginning March 31, 2015. However, institutions
that are not public business entities are not required to apply
the guidance in ASU 2014-04 until annual periods beginning
after December 15, 2014, and interim periods within annual
periods beginning after December 15, 2015. Thus, institutions with a calendar year fiscal year that are not public business entities must apply the ASU in their December 31,
2015, and subsequent quarterly Call Reports. Earlier adoption
of the guidance in ASU 2014-04 is permitted. Entities can
elect to apply the ASU on either a modified retrospective
transition basis or a prospective transition basis. Applying the
ASU on a prospective transition basis should be less complex
for institutions than applying the ASU on a modified retrospective transition basis. Under the prospective transition
method, an institution should apply the new guidance to all
instances where it receives physical possession of residential
real estate property collateralizing consumer mortgage loans
that occur after the date of adoption of the ASU. Under the
modified retrospective transition method, an institution
should apply a cumulative-effect adjustment to residential
consumer mortgage loans and OREO existing as of the beginning of the annual period for which the ASU is effective. As
a result of adopting the ASU on a modified retrospective
basis, assets reclassified from OREO to loans should be measured at the carrying value of the real estate at the date of
adoption while assets reclassified from loans to OREO should
be measured at the lower of the net amount of the loan
receivable or the OREO property’s fair value less costs to sell
at the time of adoption.
For additional information, institutions should refer to ASU
2014-04, which is available at http://www.fasb.org/jsp/FASB/
Page/SectionPage&cid=1176156316498.
True-Up Liability Under an FDIC Loss-Sharing Agreement
An insured depository institution that acquires a failed
insured institution may enter into a loss-sharing agreement
with the FDIC under which the FDIC agrees to absorb a
p
­ ortion of the losses on a specified pool of the failed institution’s assets during a specified time period. The acquiring
institution typically records an indemnification asset representing its right to receive payments from the FDIC for losses
during the specified time period on assets covered under the
loss-sharing agreement.
Since 2009, most loss-sharing agreements have included a
true-up provision that may require the acquiring institution
to reimburse the FDIC if cumulative losses in the acquired
loss-share portfolio are less than the amount of losses claimed
by the institution throughout the loss-sharing period.
Typically, a true-up liability may result because the recovery
period on the loss-share assets (e.g., eight years) is longer
than the period during which the FDIC agrees to reimburse
the acquiring institution for losses on the loss-share portfolio
(e.g., five years).
Consistent with U.S. GAAP and bank guidance for
“Offsetting,” institutions are permitted to offset assets and
l
­iabilities recognized in the Report of Condition when a
“right of setoff” exists. Under ASC Subtopic 210-20, Balance
Sheet—Offsetting (formerly FASB Interpretation No. 39,
“Offsetting of Amounts Related to Certain Contracts”), in
general, a right of setoff exists when a reporting institution
and another party each owes the other determinable

31

2015, Volume 9, No. 4

amounts, the reporting institution has the right to set off the
amounts each party owes and also intends to set off, and the
right of setoff is enforceable at law. Because the conditions
for the existence of a right of offset in ASC Subtopic 210-20
normally would not be met with respect to an indemnification asset and a true-up liability under a loss-sharing agreement with the FDIC, this asset and liability should not be
netted for Call Report purposes. Therefore, institutions
should report the indemnification asset gross (i.e., without
regard to any true-up liability) in Other Assets, and any trueup liability in Other Liabilities.
In addition, an institution should not continue to report
assets covered by loss-sharing agreements after the expiration
of the loss-sharing period even if the terms of the loss-sharing
agreement require reimbursements from the institution to the
FDIC for certain amounts during the recovery period.
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.
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

FDIC Quarterly	

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.
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
32

2015, Volume 9, No. 4

Quarterly Banking Profile
a
­ verage 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 45020 to the methods prescribed in ASC Subtopic 310-10.
Troubled Debt Restructurings and Accounting Standards Update
No. 2011-02 – In April 2011, the FASB issued Accounting
Standards Update (ASU) No. 2011-02, “A Creditor’s
Determination of Whether a Restructuring Is a Troubled
Debt Restructuring,” to provide additional guidance to help
creditors determine whether a concession has been granted to
a borrower and whether a borrower is experiencing financial
difficulties. The guidance is also intended to reduce diversity
in practice in identifying and reporting TDRs. This ASU 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 identi­
fication requirement. For additional information, refer to
ASU 2011-02, 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 – refer
to previously published Quarterly Banking Profile notes:
http://www5.fdic.gov/qbp/2011mar/qbpnot.html.
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://www5.fdic.gov/qbp/2011mar/qbpnot.html.
FDIC Quarterly	

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 Interpre­
tation No. 46(R) (FAS 167), which change the way entities
account for securitizations and special purpose entities—
refer to previously published Quarterly Banking Profile notes:
https://www5.fdic.gov/qbp/2014dec/qbpnot.html.
Accounting Standards Codification – refer to previously published Quarterly Banking Profile notes:
http://www5.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.”
Common equity tier 1 capital ratio – ratio of common equity
tier 1 capital to risk-weighted assets. Common equity tier 1
capital includes common stock instruments and related surplus, retained earnings, accumulated other comprehensive
income (AOCI), and limited amounts of common equity tier
1 minority interest, minus applicable regulatory adjustments
and deductions. Items that are fully deducted from common
equity tier 1 capital include goodwill, other intangible assets
(excluding mortgage servicing assets) and certain deferred tax
assets; items that are subject to limits in common equity tier 1
capital include mortgage servicing assets, eligible deferred tax
assets, and certain significant investments.
Construction and development loans – includes loans for all
p
­ roperty types under construction, as well as loans for land
acquisition and development.

33

2015, Volume 9, No. 4

Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated
subsidiaries, less goodwill and other ineligible intangible
assets. The amount of eligible intangibles (including servicing
rights) included in core capital is limited in accordance with
supervisory capital regulations.
Cost of funding earning assets – total interest expense paid on
deposits and other borrowed money as a percentage of average
earning assets.
Credit enhancements – techniques whereby a company attempts
to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit
enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be
associ­ ted with a given issuance.
a
Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings
Association (SAIF) Insurance Funds were merged in 2006 by
the Federal Deposit Insurance Reform Act to form the DIF.
Derivatives notional amount – the notional, or contractual,
amounts of derivatives represent the level of involvement in
the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent
the amounts used to calculate contractual cash flows to be
exchanged.
Derivatives credit equivalent amount – the fair value of the
derivative plus an additional amount for potential future
c
­ redit exposure based on the notional amount, the remaining
maturity and type of the contract.

Domestic deposits to total assets – total domestic office deposits
as a percent of total assets on a consolidated basis.
Earning assets – all loans and other investments that earn
interest or dividend income.
Efficiency ratio – Noninterest expense less amortization of
intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net
operating revenues that are absorbed by overhead expenses,
so that a lower value indicates greater efficiency.
Estimated insured deposits – in general, insured deposits are
total domestic deposits minus estimated uninsured deposits.
Beginning March 31, 2008, for institutions that file Call
Reports, insured deposits are total assessable deposits minus
estimated uninsured deposits. Beginning September 30, 2009,
insured deposits include deposits in accounts of $100,000 to
$250,000 that are covered by a temporary increase in the
FDIC’s standard maximum deposit insurance amount
(SMDIA). The Dodd-Frank Wall Street Reform and
Consumer Protection Act enacted on July 21, 2010, made
permanent the standard maximum deposit insurance amount
(SMDIA) of $250,000. Also, the Dodd-Frank Act amended
the Federal Deposit Insurance Act to include 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.

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 un­ erlying variable or index at a stated price
d
(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.

FDIC Quarterly	

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
l
­iabilities accounted for under the fair value option, and foreclosed assets—involves the use of fair values. During periods
of market stress, the fair values of some financial instruments
and nonfinancial assets may decline.
FHLB advances – all borrowings by FDIC insured institutions
from the Federal Home Loan Bank System (FHLB), as
reported by Call Report filers, and by TFR filers prior to
March 31, 2012.
Goodwill and other intangibles – intangible assets include
s
­ ervicing rights, purchased credit card relationships, and other
identifiable intangible assets. Goodwill is the excess of the
purchase price over the fair market value of the net assets
acquired, less subsequent impairment adjustments. Other
intangible assets are recorded at fair value, less subsequent
quarterly amortization and impairment adjustments.
Loans secured by real estate – includes home equity loans,
junior liens secured by 1-4 family residential properties, and
all other loans secured by real estate.
Loans to individuals – includes outstanding credit card balances
and other secured and unsecured consumer loans.
Long-term assets (5+ years) – loans and debt securities with
remaining maturities or repricing intervals of over five years.

34

2015, Volume 9, No. 4

Quarterly Banking Profile
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.

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.

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.

Net charge-offs – total loans and leases charged off (removed
from balance sheet because of uncollectibility), less amounts
recovered on loans and leases previously charged off.
Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to
depositors and other creditors, expressed as a percentage of
average earning assets. No adjustments are made for interest
income that is tax exempt.

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.

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.

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

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).

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.

Noncurrent assets – the sum of loans, leases, debt securities,
and other assets that are 90 days or more past d­ e, or in nonu
accrual status.

Return on equity – bank net income (including gains or losses
on securities and extraordinary items) as a percentage of average total equity capital.

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

Risk-based capital groups – definitions:

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

Capital Ratios Used to Determine Capital Evaluations for
Assessment Purposes, Effective January 1, 2015*

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

Capital
Evaluations

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.

Leverage
Ratio

Well
Capitalized

≥10%

≥8%

≥6.5%

≥5%

Adequately
Capitalized**

≥8%

≥6%

≥4.5%

≥4%

Under­
capitalized

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
v
­ aluation allowance subtracted also includes allowances for
other repossessed assets. Also, for TFR filers the components
of other real estate owned are reported gross of valuation
allowances. (TFR filers began filing Call Reports effective
with the quarter ending March 31, 2012.)

Does not qualify as either Well Capitalized or
Adequately Capitalized

* Effective January 1, 2018, the supplemental leverage ratio will be added to capital evaluations for deposit insurance assessment purposes.
**An institution is Adequately Capitalized if it is not Well Capitalized, but satisfies each of
the listed capital ratio standards for Adequately Capitalized.

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)
were 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

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

FDIC Quarterly	

Total RiskTier 1
Common
Based
Risk-Based Equity Tier 1
Capital Ratio Capital Ratio Capital Ratio

35

2015, Volume 9, No. 4

CAMELS composite ratings of 4 or 5. For purposes of riskbased assessment capital groups, undercapitalized includes
institutions that are significantly or critically
undercapitalized.

Adjustment), minimum and maximum total base assessment
rates for each risk category are as follows:
Total Base Assessment Rates*
Risk
Risk
Risk
Risk
Category Category Category Category
I
II
III
IV

Supervisory Group
Capital Category

1. Well Capitalized
2. Adequately Capitalized
3. Undercapitalized

A

B

I
5–9 bps
II
14 bps
III
23 bps

II
14 bps

C

Initial base
assessment rate

III
23 bps

Unsecured debt
adjustment
Brokered deposit
adjustment
Total Base
Assessment rate

IV
35 bps

Effective April 1, 2011, the initial base assessment rates are 5
to 35 basis points. An institution’s total assessment rate may
be less than or greater than its initial base assessment rate as a
result of additional risk adjustments.
The base assessment rates for small institutions in Risk
Category I are based on a combination of financial ratios and
CAMELS component ratings (the financial ratios method).
As required by Dodd-Frank, the calculation of risk-based
assessment rates for large institutions no longer relies on longterm debt issuer ratings. Rates for large institutions are based
on CAMELS ratings and certain forward-looking financial
measures combined into two scorecards—one for most large
institutions and another for the remaining very large institutions that are structurally and operationally complex or that
pose unique challenges and risks in case of failure (highly
complex institutions). In general, a highly complex institution is an institution (other than a credit card bank) with
more than $500 billion in total assets that is controlled by a
parent or intermediate parent company with more than
$500 billion in total assets or a processing bank or trust company with total fiduciary assets of $500 billion or more. The
FDIC retains its ability to take additional information into
account to make a limited adjustment to an institution’s total
score (the large bank adjustment), which will be used to
determine an institution’s initial base assessment rate.
Effective April 1, 2011, the three possible adjustments to
an institution’s initial base assessment rate are as follows:
(1) Unsecured Debt Adjustment: An institution’s rate may
decrease by up to 5 basis points for unsecured debt. The unsecured debt adjustment cannot exceed the lesser of 5 basis
points or 50 percent of an institution’s initial base assessment
rate (IBAR). Thus, for example, an institution with an IBAR
of 5 basis points would have a maximum unsecured debt
adjustment of 2.5 basis points and could not have a total base
assessment rate lower than 2.5 basis points. (2) Depository
Institution Debt Adjustment: For institutions that hold longterm unsecured debt issued by another insured depository
institution, a 50 basis point charge is applied to the amount
of such debt held in excess of 3 percent of an institution’s
Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for
small institutions that are not in Risk Category I and for large
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

FDIC Quarterly	

Large and
Highly
Complex
Institutions

5–9

14

23

35

5–35

-4.5–0

-5–0

-5–0

-5–0

-5–0

—

0–10

0–10

0–10

0–10

2.5–9

9–24

18–33

30–45

2.5–45

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

Beginning in 2007, each institution is assigned a risk-based
rate for a quarterly assessment period near the end of the
quarter following the assessment period. Payment is generally
due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are
effective for assessment purposes as of the examination transmittal date.
Special Assessment – On May 22, 2009, the FDIC board
approved a final rule that imposed a 5 basis point special
assessment as of June 30, 2009. The special assessment was
levied on each insured depository institution’s assets minus
its Tier 1 capital as reported in its report of condition as of
June 30, 2009. The special assessment was collected
September 30, 2009, at the same time that the risk-based
assessment for the second quarter of 2009 was collected.
The special assessment for any institution was capped at
10 basis points of the institution’s assessment base for the
second quarter of 2009 risk-based assessment.
Prepaid Deposit Insurance Assessments – In November 2009,
the FDIC Board of Directors adopted a final rule requiring
insured depository institutions (except those that are
exempted) to prepay their quarterly risk-based deposit
insurance assessments for the fourth quarter of 2009, and
for all of 2010, 2011, and 2012, on December 30, 2009.
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

36

2015, Volume 9, No. 4

Quarterly Banking Profile
(book value), and securities designated as “available-for-sale,”
reported at fair (market) value.
Securities gains (losses) – realized gains (losses) on held-tomaturity and available-for-sale securities, before adjustments
for income taxes. Thrift Financial Report (TFR) filers also
include gains (losses) on the sales of assets held for sale.
(TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.)
Seller’s interest in institution’s own securitizations – the reporting
bank’s ownership interest in loans and other assets that have
been securitized, except an interest that is a form of recourse
or other seller-provided credit enhancement. Seller’s interests
differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is
generally equal to the total principal amount of the pool of
assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the
form of securities issued to investors.
Small Business Lending Fund – The Small Business Lending
Fund (SBLF) was enacted into law in September 2010 as part
of the Small Business Jobs Act of 2010 to encourage lending
to small businesses by providing capital to qualified
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

FDIC Quarterly	

and debentures.” For regulatory capital purposes, the
debentures are eligible for inclusion in an institution’s Tier 2
capital in accordance with their primary federal regulator’s
capital standards. To participate in the SBLF Program, an
institution with outstanding securities issued to the Treasury
Department under the Capital Purchase Program (CPP) was
required to refinance or repay in full the CPP securities at the
time of the SBLF funding. Any outstanding warrants that an
institution issued to the Treasury Department under the CPP
remain outstanding after the refinancing of the CPP stock
through the SBLF Program unless the institution chooses to
repurchase them.
Subchapter S corporation – a Subchapter S corporation is treated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any
federal income taxes at the corporate level. This can have the
effect of reducing institutions’ reported taxes and increasing
their after-tax earnings.
Trust assets – market value, or other reasonably available
value of fiduciary and related assets, to include marketable
securities, and other financial and physical assets. Common
physical assets held in fiduciary accounts include real estate,
equipment, collectibles, and household goods. Such fiduciary
assets are not included in the assets of the financial
institution.
Unearned income & 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.

37

2015, Volume 9, No. 4

Financial Performance and Management
Structure of Small, Closely Held Banks
control over the bank. Subchapter S status, however, is
only a rough proxy for being closely held.

Introduction
It is widely recognized that community banks embody
unique characteristics that distinguish them from other
banks.1 Community banks are generally smaller in asset
size than other banks. They tend to focus on traditional
banking activities, making and holding loans, and funding themselves with core deposits. They hold relatively
large amounts of equity capital relative to assets. Because
they do business in a relatively limited geographic area,
community banks are able to make operational decisions
locally, frequently based on tacit, personal knowledge
of their customers and market area, as opposed to relying primarily on models and standardized data. As a
result, a defining characteristic commonly attributed
to community banks is that of relationship lending, as
opposed to a more impersonal, transactional banking
model. A recent study has incorporated a number of
these attributes into a community bank definition that
can be applied consistently over the past 31 years.2

Additional information on organizational form is available in confidential supervisory data. A 1995 study by
researchers at the Federal Reserve Bank of Kansas City
and the Office of the Comptroller of the Currency
used supervisory data to identify closely held banks as
those where supervisory reports indicated that there
was a “principal shareholder” who owned more than
10 percent of voting shares.6 The study found evidence
that efficient banks tend to have a principal shareholder, managers who hold an ownership stake in the
bank, or owners who were actively involved in the
day-to-day management of the bank. The 10 percent
ownership stake, however, is a blunt measure of the
ownership structure of a bank. The limited availability
of more nuanced data on ownership and related agency
issues has impeded research in this area.
This paper revisits the issue of organizational structure
using new data from an April 2015 survey of FDIC
examiners in three supervisory Regions. The examiners answered questions about ownership structure,
overlap of ownership and management, and management succession at FDIC-supervised banks that were
examined in 2014 and first quarter 2015. The survey
was designed to limit the demands on participating
examiners and eliminate any reporting burden for
bankers. Although it did not employ a random sample
of all FDIC-insured banks, the survey provides a fairly
detailed look at the organizational attributes of more
than 1,350 FDIC-supervised, state-chartered community banks that operate in the FDIC Kansas City,
Dallas, or Chicago Regions.

Less extensively studied are the organizational characteristics of community banks, including management and ownership structure. As of December 2014,
93.2 percent of FDIC-insured community banks
were organized as stock charters, and the remaining
6.8 percent were organized as mutuals, where depositors own the bank.3 As of year-end 2014, 35 percent
of community banks as defined by the FDIC were
organized under Subchapter S, which allows banks
with limited ownership to decrease taxes on earnings.4
Only 7 percent of banks that did not meet the FDIC
community bank definition were organized under
Subchapter S.5 This broad measure confirms the general
understanding that community banks are much more
likely than noncommunity banks to be “closely held,”
or controlled by an ownership group with relatively few,
closely allied members who effectively exercise strategic

The survey allows us to identify closely held banks
among these community banks. Additionally, it
provides information on the overlap of ownership and
management, and preparedness for management succession, at these banks. By merging the survey results with
Call Report data, we find that closely held banks have
not underperformed widely held banks over the past six
years. In fact, closely held banks in which the manager
is a member of the ownership group, or is another
insider, outperform both closely held banks with no
overlap between ownership and management and
widely held banks.

For example, see Hein, Koch, and MacDonald (2005).
FDIC (2012).
3
Approximately 2 percent of stock banks are owned by mutual bank
holding companies, so that they are, in effect, mutually owned banks.
4
Under Subchapter C status, earnings are taxed at the corporate level
and again at the shareholder level. Subchapter S eliminates the corporate taxation of earnings, reducing the tax burden to shareholders.
There are several conditions—including having 100 or fewer owners—
that a firm must meet to receive Subchapter S status. See 26 U.S.C.
§ 1361 for the restrictions on Subchapter S firms.
5
See FDIC (2012) for the FDIC definition of community bank, which
presents a functional definition, rather than a fixed-asset-size
definition.
1
2

FDIC Quarterly	

6

38

Spong, Sullivan, and DeYoung (1995).

2015, Volume 9, No. 4

Financial Performance and Management Structure of Small, Closely Held Banks
Concentrated Ownership. One reason a closely held
ownership structure may be an operational advantage is
that insider shareholders are likely to view their stake as
a major, long-term investment rather than as one stock
in a portfolio. As a result, the owners of a closely held
bank can be expected to take a longer, more strategic
perspective than the owners of a bank that must meet
an earnings target every quarter. To the extent that this
strategic focus translates into more profitable operational decisions, it could enhance the financial performance of the institution over time. This effect might
be especially pronounced in the case of family-owned
banks, for which the planning horizon could span more
than one generation.8

In the next section, we briefly discuss what economic
theory has to say about how ownership structure and
the overlap between ownership and management might
affect financial performance. Then we describe the
survey of FDIC examiners, and compare closely and
widely held banks as identified in the survey. The final
section summarizes our findings and suggests areas for
future research.

Economic Theory: Ownership, Management, and
Bank Efficiency
Closely held banks frequently differ from widely held
banks in two important dimensions. The first is the
degree of concentration of ownership. By definition,
ownership is more concentrated in a closely held bank
than in a widely held bank. One individual may own
the majority of the closely held bank, or ownership may
be shared among a group affiliated by family or community ties.

A second potential advantage of closely held ownership
is the ability of the bank to address the principal-agent
problem that can arise between owners and managers.
A principal-agent problem occurs when the owner
(principal) of a firm delegates responsibility to the
manager (agent), but the two do not share the same
goals.9 Divergence between the goals of owners and
managers may cause firms to underperform if the manager’s choices do not maximize the value of the firm.

Second, concentrated ownership may have implications
for the management structure of the bank. In a closely
held bank, day-to-day operational control of the bank
may reside with a manager who is either a member of
the ownership group or can otherwise be considered an
ownership insider.7 In other cases, the bank may be run
by a hired manager who otherwise has no affiliation
with the ownership group. Both the concentration of
ownership and the degree of overlap between ownership
and control present potential advantages and disadvantages in terms of efficiency (Table 1).

Bank owners can solve this problem by monitoring and
supervising the manager, but these actions are costly
in both time and money. In the case of a closely held
bank, however, owners may have a greater incentive
to invest in monitoring managers because more of the
benefits of monitoring accrue to insider owners, rather
than to external shareholders. Owners of the closely
held bank are then better equipped to address principalagent problems that may arise from the separation of
ownership and control.

Table 1
How Might Closely Held Ownership
Influence Operational Efficiency?
Pros
Closely held banks may be
less beholden to short-term
earnings pressures.
Closely held banks invest
more in monitoring managers because they capture
most of the returns to
monitoring.

On the other hand, a bank with a closely held ownership structure may pursue goals other than strict profit
maximization, so it may be less efficient than a widely
held bank. In some cases, these goals may reflect a decision to incur noninterest expenses for the benefit of the
owners, managers, or other affiliated stakeholders to the
detriment of current earnings (generally referred to as
expense preference behavior).10 This is not to say that the
owners’ goals are inconsistent with the long-term interests of the bank, or the mission of a community bank.

Cons
Closely held banks may
have more trouble raising
external capital to make
investments.
Closely held banks may
pursue goals other than
profit maximization.

Source: Review of literature on pages 39 and 40.

Anderson and Reeb (2003) show that family-owned nonfinancial
businesses outperform non-family-owned businesses among a sample
of S&P 500 companies.
9
For a theoretical discussion of agency problems, see Jensen and
Meckling (1976).
10
See Edwards (1977).
8

Although it is possible that the manager of a widely held bank can
also hold an ownership stake or be considered an ownership insider,
the fact that ownership is not concentrated in a single group limits the
degree to which ownership and control can overlap at widely held
banks.
7

FDIC Quarterly	

39

2015, Volume 9, No. 4

For example, bank owners may choose to support the
credit needs of local businesses during difficult times,
or to invest in the local community through sponsorships or community events. In either case, closely held
ownership may allow owners to achieve some of their
financial and strategic goals through means other than
maximizing profits in the short run.

pool from which to recruit qualified managers. When
the ownership group comprises individuals with close
family or community ties, those ties may also limit the
pool of managerial candidates. Even if the owners of
the closely held bank solve the principal-agent problem
by finding a qualified manager in the ownership group,
the bank may face the problem once again when that
manager retires and the owners must find a qualified
successor. Additionally, if the retiring manager wants to
sell a substantial stake in the bank, the bank must also
find a new owner as well as a new manager.

A second potential disadvantage to closely held ownership is that it may be more difficult for the bank to raise
capital to make investments that improve the profitability of the bank. Banks raise capital using retained
earnings or by issuing new ownership shares. Issuing
shares to new shareholders will dilute the stake of
the current owners in the bank, so closely held banks
may be less willing to do this. Closely held banks may
instead raise new capital from existing owners as “external capital,” and so the amount of capital they can
raise may be limited. This could prevent the bank from
making a profitable investment, such as expanding or
making an acquisition.

Results of the FDIC Examiner Survey
A lack of publicly available data has limited the ability to study how ownership structure and managerial
control affect efficiency and profitability at community
banks. Most research on bank ownership focuses on
large banks that are required to file public disclosures.
For smaller banks without these disclosure requirements,
researchers have used confidential supervisory data.
These supervisory data provide some information on the
ownership structure of community banks, but only about
the existence of a “principal shareholder.” These data do
not address the overlap of ownership and management.

Overlap of Ownership and Control. The degree of
overlap between ownership and managerial control
can also be an operational advantage or disadvantage
for a bank (Table 2). Widely held banks, by definition,
have a substantial separation between ownership and
control, so they are inherently subject to inefficiencies
arising from principal-agent problems and must implement potentially costly measures to overcome them.
In contrast, when the principal owner or an ownership
group insider exerts day-to-day managerial control over
a bank, the agency problem is minimized. The manager
can be expected to act in the interests of the owners
because the manager is an owner.

This study avoids some of these limitations by using
the results of a survey of FDIC bank examiners in the
Chicago, Dallas, and Kansas City supervisory Regions,
which encompass 21 states (Figure 1). Responses were
obtained for every bank that had been examined in
2014 and first quarter 2015. For each bank, the examiners answered a series of simple questions about the
structure of bank ownership, the overlap between
ownership and management, and how the bank was
positioned for management succession. The survey
responses include more than 1,400 FDIC-supervised
banks, which represent about 50 percent of all FDICsupervised banks in these Regions. We limit our analysis to the 97 percent of banks covered by the survey
that meet the FDIC definition of a community bank,
which leaves us with 1,357 community banks.

The potential downside of significant overlap between
ownership and control is the limited size of the talent
Table 2
How Might Overlap of Ownership and Control
Influence Efficiency?
Pros
The incentives of owners
and managers are wellaligned and geared toward
maximizing the long-term
value of the bank.

Cons

The survey is a snapshot of bank ownership of a subset
of community banks at the end of 2014. The responses
are not a random sample of community banks nationwide, nor in these three Regions. The survey responses
cover half of the FDIC-supervised community banks in
the three Regions, and 33 percent of all FDIC-insured
community banks. However, the strengths of the survey
approach include the large number of community banks
within these Regions, the ability to directly access the

Succession planning may
be more difficult because
the bank faces a limited
talent pool.
Succession can involve
transferring both ownership
and control, often at the
same time.

Source: Review of literature on pages 39 and 40.

FDIC Quarterly	

40

2015, Volume 9, No. 4

Financial Performance and Management Structure of Small, Closely Held Banks
Figure 1
Surveyed Banks Represent About Half of all FDIC-Supervised Community Banks
in the Chicago, Dallas, and Kansas City FDIC Regions
34
48%

118
49%

22
47%

108
47%

63
47%
27
53%

70
39%

111
49%

179
56%

42
61%

67
54%
72
59%

26
59%

57
52%

43
46%

33
46%

90
44%

50
45%

16
55%

95
53%

FDIC Region
Chicago
Dallas
Kansas City

34
58%

Total

Number of
Community Banks
Surveyed

Share of
FDIC-Supervised
Community Banks

459
393
505

54%
52%
46%

1,357

50%

Source: April 2015 FDIC Examiner Survey. Community banks are as defined by the FDIC Community Banking Study (2012).
Note: Data are as of December 2014.

Table 3

stake that individually or collectively exerts a deciding influence over the governance of the institution”
(Table 3). The vast majority of these closely held banks
are controlled by groups with family or community ties
(Table 4). In almost all of the closely held community
banks, members of the primary ownership group are
directors of the banks.

Closely Held Banks Make Up Three-Quarters
of FDIC-Supervised Community Banks
in Three Regions
Region
Chicago
Kansas City
Dallas
Total

Survey
Responses
459
505
393
1,357

Identifiable
Primary
Owner
288
424
301
1,013

Closely Held
63%
84%
77%
75%

In a majority of closely held community banks, there
is also significant overlap between the primary ownership group and the key officer, defined by the survey as
the person “who effectively runs the bank on a day-today basis, regardless of his/her title.” In 48 percent of
closely held community banks, the key officer can be
considered a member of the primary ownership group
(Table 5). In an additional 10 percent of closely held
banks, the key officer can be considered an ownership
group insider, even though he or she is not a primary
owner. Taken together, these results imply that in
just under 60 percent of closely held, FDIC-supervised
community banks covered by the survey, overlap
between ownership and management helped to limit
the potential for principal-agent problems that could
impair operational efficiency.

Source: April 2015 FDIC Examiner Survey.
Survey Question 1: In your judgment, is there an identifiable primary owner or ownership
group for this bank? The primary owner or ownership group of the bank is a person or
group with a substantial ownership stake that individually or collectively exerts a deciding
influence over the governance of the institution.

recent experience of FDIC examiners, and the fact that
bank owners or managers are not required to respond to
survey questions.
The survey results show that among FDIC-supervised
community banks in the three Regions, closely held
banks are the norm rather than the exception. Examiners characterized 75 percent of community banks in the
survey as having an identifiable primary owner, defined
as “a person or group with a substantial ownership

FDIC Quarterly	

The survey also included questions on succession
p
­ lanning, as this is widely regarded as an important
41

2015, Volume 9, No. 4

Table 4
Most Closely Held Community Banks Are Built Around Family or Community Ties
Region
Chicago
Kansas City
Dallas
Total

Survey Responses
Indicating Closely Held
Bank
288
424
301
1,013

Ownership Group
Has Family Ties
84%
90%
77%
85%

Ownership Group
Has Ties to Community
84%
83%
89%
85%

Members of
Ownership Group
Sit on Board
94%
96%
94%
95%

Source: April 2015 FDIC Examiner Survey.

Table 5
Ownership and Control Overlap at Most Closely Held Community Banks

Region
Chicago
Kansas City
Dallas
Total

Survey Responses
Indicating Closely Held
Bank
288
424
301
1,013

Key Officer Is Also
a Member of the Primary
Ownership Group
44%
51%
45%
48%

Key Officer Is Not a
Member of Primary
Ownership Group, but
Can Be Considered
an Insider
7%
6%
17%
10%

Total:
Key Officer Closely
Affiliated With
Ownership Group
51%
58%
62%
57%

Source: April 2015 FDIC Examiner Survey.

Table 6

significant challenge for both closely and widely held
community banks.

Management Succession Is an Issue for Many
Closely Held and Widely Held Community Banks

Survey
Region
Responses
Chicago
288
Kansas City
424
Dallas
301
Total Closely Held
1,013
Total Widely Held
344

Bank Has
Identified
a Viable
Successor
41%
57%
50%
50%
46%

Bank Is WellPositioned to
Recruit
Qualified
Management
From Outside
56%
67%
62%
62%
69%

Characteristics, Financial Performance, and
Capital Formation
Merging the survey data with financial data from bank
Call Reports permits further analysis of closely and
widely held community banks. In this section we assess
the effects of ownership structure and managerial control
of surveyed banks on their size and geographic characteristics, financial performance, and ability to raise capital.
Characteristics: Among community banks in our
survey, closely held banks tend to be smaller and
more rural and agricultural, and have older charters
than widely held banks. As discussed at the outset, we
hold certain expectations on how closely held banks
might compare to widely held banks in our survey, and
these expectations are generally met (Table 7). For
example, closely held banks are generally smaller than
widely held banks; closely held banks had average total
assets of $264 million at year-end 2014, compared with
$334 million for widely held banks.

Source: April 2015 FDIC Examiner Survey.

operational concern for community banks.11 Among
the closely held banks, 50 percent have not identified
a potential successor for the key officer, compared with
54 percent of widely held banks (Table 6). In addition,
38 percent of the closely held banks were not deemed
to be “well-positioned to recruit qualified management talent from outside the bank,” compared with
31 percent of widely held banks. Overall, the survey
results indicate that succession planning remains a

Closely held community banks are also more concentrated in rural areas than widely held banks and are
more likely to be headquartered in depopulating

Stewart (2013) discusses the importance of succession planning,
especially following the financial crisis.
11

FDIC Quarterly	

42

2015, Volume 9, No. 4

Financial Performance and Management Structure of Small, Closely Held Banks
Table 7
Closely Held and Widely Held Community Banks Differ on Many Characteristics
Characteristic
Assets
Average Asset Size
Average Equity Capital as Percentage of Assets
Geography
Headquartered in Metropolitan Countya
Headquartered in Micropolitan County
Headquartered in Rural County
Headquartered in Depopulating Rural Countyb
Lending Specialty
Agricultural Lending Specialtyc
Commercial and Industrial Lending Specialty
Commercial Real Estate Lending Specialty
Mortgage Lending Specialty
Multiple Lending Specialties
No Lending Specialty (Diversified)
Other Consumer Lending Specialty
Age
Charter 15 Years Old or Younger
Charter Older Than 100 Years

Closely Held Banks

Widely Held Banks

$264 million
10.7%

$334 million
11.0%

46%
18%
36%
24%

57%
22%
21%
10%

25%
2%
20%
7%
12%
32%
1%

13%
1%
23%
18%
19%
24%
1%

7%
43%

24%
38%

Source: FDIC Data and April 2015 Examiner Survey.
Notes: All figures are as of December 2014.
a.	This study follows the designations established by the U.S. Office of Management and Budget for each of the 3,221 U.S. counties and county equivalents as either metropolitan
(1,236 counties that are economically linked to 1 of the 388 U.S. Metropolitan Statistical Areas), micropolitan (646 counties centered on an urban core with a population of between 10,000
and 50,000 people), or rural (counties not located in metropolitan or micropolitan areas).
b.	“Depopulating Rural County” refers to a county that lost population between the 1980 census and 2010 census. See Anderlik and Cofer (2014).
c.	Community bank lending specialty groups as defined by Chapter 5 of the FDIC Community Banking Study (2012).

c
­ ounties. Thirty-six percent of closely held community
banks were headquartered in rural counties, compared
with 21 percent of widely held institutions. Twentyfour percent of the surveyed closely held community
banks were headquartered in depopulating rural counties, compared with only 10 percent of widely held
banks. Banks headquartered in depopulating areas face
challenges of declining customer bases and, in some
instances, difficulty in attracting qualified management.12

Finally, closely held community banks in the survey
tended to have older charters than did widely held
banks. Both types of institutions have a substantial
proportion of charters that are more than 100 years
old—43 percent for closely held community banks and
38 percent for widely held community banks. Widely
held banks, however, are more than three times more
likely (24 percent) than closely held banks (7 percent)
to have a charter 15 years old or younger.

Closely held community banks in the survey were also
nearly twice as likely as widely held banks to specialize in agricultural lending.13 These characteristics are
consistent with the higher propensity of closely held
banks to be headquartered in rural counties. By contrast,
the widely held community banks in the survey, which
were more heavily concentrated in metropolitan or
micropolitan counties, were more likely to specialize in
mortgage lending or multiple lending areas.

Financial performance: Among community banks in
our survey, closely held banks generally outperformed
widely held banks in recent years when they had an
overlap with management. Based on our prior discussion of the economic theory on ownership, management, and bank efficiency, we wanted to understand
how ownership structure and the overlap of ownership
and control affect financial performance. To capture
these differences, we segmented the banks into three
groups: closely held banks where the key officer is also
a member of the primary ownership group (denoted as
“Overlap” in Charts 1 and 2, Tables 2 and 5, and in
Table A1 in the Appendix); closely held banks where

12
13

Anderlik and Cofer (2014).
Lending specialty definitions are from Chapter 5 of FDIC (2012).

FDIC Quarterly	

43

2015, Volume 9, No. 4

Chart 1
Closely Held Community Banks Where Ownership and Managerial Control Overlap
Have Consistently Reported Higher Profitability
Pretax Return on Assets
Percentage
1.4%

1.4%
Widely Held

1.2%

1.2%

Closely Held

1.0%

1.0%

0.8%

0.8%

0.6%

0.6%

0.4%

0.4%

0.2%

0.2%

0.0%

2009

2010

2011

2012

2013

2014

0.0%

Widely Held
Closely Held – Overlap
Closely Held – No Overlap

2009

2010

2011

2012

2013

2014

Source: FDIC Analysis of Call Report data on 1,357 FDIC-supervised community banks headquartered in the FDIC Kansas City, Dallas, and Chicago Regions that were identified in the April 2015
FDIC Examiner Survey as closely held or widely held.

the manager is an outsider (“No Overlap”); and widely
held banks, where by definition there is no primary
ownership group.

Chart 2
Closely Held Community Banks Where Ownership and
Managerial Control Overlap Have Consistently
Reported Higher Profitability

The first comparison we made is of the pretax return on
assets. The left side of Chart 1 compares pretax return
on assets for closely held and widely held community
banks in our survey from 2009 to 2014 and shows that
the closely held banks consistently outperformed widely
held banks over this period. When we split closely held
banks into those that have ownership–management
overlap and those that do not (right side of Chart 1),
however, we found that the closely held banks where
ownership and management overlap clearly outperformed both widely held banks and the closely held
banks where ownership and management did not overlap. The average annual performance advantage for
closely held community banks with management overlap was 21 basis points higher compared with closely
held banks with no overlap, and 30 basis points higher
compared with widely held community banks. Although
these gaps appear to have narrowed over the past three
years, they were still more than 20 basis points in 2014.

Efficiency Ratio of Community Banks by Ownership Type
72%
70%
68%
66%
64%
Efficiency Ratio =

62%

2009

Noninterest Expenses
Net Interest Income + Noninterest Income

2010

2011

2012

2013

2014

Source: FDIC Analysis of Call Report data on 1,357 FDIC-supervised community banks
headquartered in the FDIC Kansas City, Dallas, and Chicago Regions that were identified
in the April 2015 FDIC Examiner Survey as closely held or widely held.

of closely held banks that have no overlap, as well as
those of widely held banks (Chart 2).
Looking at the components of the efficiency ratio,
closely held banks with overlap of management and
ownership reported higher salary expense as a percentage of average assets in each of the past six years.
Higher levels of noninterest income and much higher
loan yields, however, more than made up for the salary
expense disadvantage.

Another comparison that focuses more squarely on
operational efficiency involves the efficiency ratio, or
the ratio of noninterest expenses to net operating
revenue. This measure represents the expense incurred
by the bank to generate $1 of revenue. Similar to the
profitability comparisons, over the most recent six-year
period, closely held community banks in our survey
that have overlap between ownership and management
consistently reported efficiency ratios better than those
FDIC Quarterly	

Widely Held
Closely Held – Overlap
Closely Held – No Overlap

Because closely held banks and widely held banks differ
in many characteristics, it is important to attempt to
hold these other characteristics constant when comparing performance across these groups. Accordingly, we

44

2015, Volume 9, No. 4

Financial Performance and Management Structure of Small, Closely Held Banks
Chart 3

Chart 4
There Is Little Evidence That Closely Held
Community Banks Were at a Decided Disadvantage
in Access to Capital

Closely Held Community Banks Rely More on
Retained Earnings as a Source of Capital
Retained Earnings

Closely
Held

External Capital

60%

Percentage of Surveyed Community Banks Raising Capital, 2009 to 2014
25

40%

20

23.5

15.2 14.6

15
Widely
Held

48%

52%

Widely Held
Closely Held

19.3

11.3 11.9

10

12.2
9.9

8.1

9.3

7.9

6.5

5
0%

20%

40%

60%

80%

100%

0

Percentage of Gross Capital Raised by Source, 2009 to 2014
Source: FDIC Analysis of Call Report data on 1,357 FDIC-supervised community banks
headquartered in the FDIC Kansas City, Dallas, and Chicago Regions that were identified in
the April 2015 FDIC Examiner Survey as closely held or widely held.
Note: Excludes institutions in first year of existence.

2009

2010

2011

2012

2013

2014

Source: FDIC Analysis of Call Report data on 1,357 FDIC-supervised community banks
headquartered in the FDIC Kansas City, Dallas, and Chicago Regions that were identified
in the April 2015 FDIC Examiner Survey as closely held or widely held.
Note: Excludes institutions in first year of existence.

performed multiple regression analysis of the performance of the surveyed banks during the five years from
2010 to 2014 to determine the relative contribution of
the different characteristics to financial performance.
The appendix presents the results of the analysis. After
controlling for the other differences between the banks,
we find that being closely held has not had a statistically
significant effect on financial performance. Having overlap between owner and management, however, has had
a significant, positive effect on financial performance.
This effect provides evidence that some of the benefit
of a closely held organizational structure is the opportunity to resolve principal-agent problems by aligning the
interests of managers with the interests of owners.

study period.14 In all but one of the six years studied,
widely held community banks raised external capital
more frequently than closely held banks, and the gap
was widest in 2014 (Chart 4). It is important to note
here that external capital may also include capital from
existing owners or insiders and, for community banks,
is more likely to take place through a private placement
than through a market offering. On balance, although
the closely held banks in our sample relied more heavily
on retained earnings to increase their capital, and also
raised external capital less frequently than widely held
banks, there is little evidence that closely held community banks were at a decided disadvantage in terms of
access to external capital.

Capital formation: Among community banks in our
survey, closely held banks raise external capital less
often than their widely held peers, but they do not
appear to be disadvantaged in their access to capital
sources. One potential concern about the closely held
organizational structure is whether it limits the bank’s
access to external sources of capital, thereby limiting
the ability to respond to adverse shocks or to pursue
strategic opportunities. As expected, the closely held
banks surveyed have tended to rely more heavily on
retained earnings to increase equity capital and to raise
less capital from external sources than do widely held
banks (Chart 3). Between 2009 and 2014, the closely
held banks obtained 60 percent of gross additions
to capital via retained earnings, compared with just
48 percent for the widely held community banks.

Summary and Conclusions
Community banks have been defined in a number of
studies as being generally small institutions that rely on
core deposit funding and operate as relationship lenders within a limited geographic area. Less attention has
been paid in the literature to the ownership structure
of community banks and how it relates to day-to-day
operational control and to long-term management
succession.

Our time period includes three years in which the federal government
recapitalized banks through the Troubled Asset Relief Program (TARP)
and the Small Business Lending Fund (SBLF). These programs were
more heavily used by widely held banks than by closely held banks.
TARP was used in 2009 and 2010, and in those years, 36 percent of
widely held banks surveyed that raised capital and 21 percent of
closely held banks surveyed that raised capital received TARP funds.
In 2011, the year the SBLF disbursed funds, 31 percent of widely held
banks surveyed that raised capital received SBLF funds, compared to
24 percent for closely held banks surveyed that raised capital.
14

Moreover, we find that the widely held community
banks surveyed raised capital from external sources
somewhat more often than closely held banks over the
FDIC Quarterly	

45

2015, Volume 9, No. 4

This paper addresses the relative lack of data describing these attributes by introducing new survey data
collected from FDIC examiners of community banks
headquartered in 21 states in the central FDIC supervisory Regions of the United States. We find that threequarters of FDIC-supervised community banks in these
Regions are defined by a closely held organizational form,
where a primary ownership group exerts a deciding influence over the governance of the institution. The vast
majority of these closely held institutions are owned by
groups that share family or community ties, and a majority of them also exhibit a substantial overlap between the
ownership group and the key officer who effectively runs
the bank. Both closely held and widely held community
banks in the survey appear to face significant challenges
when it comes to management succession, with only
half of closely held banks reportedly having identified a
successor to the key officer at the time of the survey.

These favorable comparisons between closely held and
widely held community banks suggest that the closely
held organizational form is by no means an impediment to performance, and may well be one of the
keys to the success of closely held banks. Closely held
community banks in which ownership and management largely overlap appear to exhibit advantages over
other community banks even after accounting for other
factors that affect performance. Nonetheless, this recipe
for success—relying on managers who are insiders to the
ownership group—may prove difficult for these institutions to replicate going forward as they address the
issue of management succession. Additional research
would be useful to better understand how community
banks address management succession, and how their
approach to this issue can affect their financial performance and their ability to remain independent.
Authors:	 John M. Anderlik, Assistant Director
	
Division of Insurance and Research

Economic theory suggests that the closely held organizational form and overlap between ownership and
management may each offer potential advantages
and disadvantages for community bank performance.
Managers of closely held banks may benefit from the
ability to make decisions according to a longer time
horizon than widely held banks, and their owners
may be able to capture more of the returns than can
be earned by monitoring the performance of bank
managers. Closely held community banks may choose
to pursue goals other than strict profit maximization,
however, and may have limited access to external
capital. Although closely held banks may be able to
resolve agency conflicts with managers by recruiting
those managers from within the ranks of ownership,
this ­ olution constrains the size of the talent pool. Even
s
when a closely held bank successfully aligns the longterm interests of owners and managers, it must do so all
over again when it searches for qualified successors to
its current management team.

	
	
	
	

Kathryn L. Fritzdixon, Financial Economist
Division of Insurance and Research

We thank Richard Cofer, Martin Cooper, Chasity Dschaak,
Jessica Kaemingk, James LaPierre, and Rich Speigle for their
valuable contributions in helping to design and execute the
examiner survey. We thank Clayton Boyce and Eric
Breitenstein for a wide range of analytical and editorial
assistance. Any remaining errors are the responsibility of
the authors.

References
Anderlik, John, and Richard Cofer. 2014. Long-Term
Trends in Rural Depopulation and Their Implications for
Community Banks. FDIC Quarterly 8, no. 2:44–59.
Anderson, Ronald, and David Reeb. 2003. Founding-Family
Ownership and Firm Performance: Evidence from the S&P
500. Journal of Finance 58, no. 3:1301–28.

Comparisons of financial performance and efficiency
indicate that the closely held community banks surveyed
consistently outperformed widely held community banks
in recent years. The highest performance has been found
among closely held community banks where there is
substantial overlap between ownership and management, and therefore the potential for agency conflicts
is minimized. Although closely held banks surveyed
relied more on retained earnings to raise capital than
did widely held banks, and raised external capital less
frequently, there is little evidence that closely held
community banks were at a decided disadvantage to
widely held banks in terms of access to external capital.
FDIC Quarterly	

Richard A. Brown, Associate Director
Division of Insurance and Research

Edwards, Franklin R. 1977. Managerial Objectives in
Regulated Industries: Expense-Preference Behavior in
Banking. Journal of Political Economy 85, no. 1:147–61.
Federal Deposit Insurance Corporation (FDIC). 2012. FDIC
Community Banking Study. FDIC.
Hein, Scott, Timothy Koch, and Scott MacDonald. 2005. On
the Uniqueness of Community Banks. Federal Reserve Bank
of Atlanta Economic Review First Quarter:15–36.
Jensen, Michael, and William Meckling. 1976. Theory of the
Firm: Managerial Behavior, Agency Costs and Ownership
Structure. Journal of Financial Economics 3, no. 4:305–60.
Spong, Kenneth, Richard Sullivan, and Robert DeYoung.
1995. What Makes a Bank Efficient? A Look at Financial
46

2015, Volume 9, No. 4

Financial Performance and Management Structure of Small, Closely Held Banks
Table A1

Characteristics and Bank Management and Ownership
Structure. Financial Industry Perspectives December:1–19.
Stewart, Jackie. 2013. Community Banks Are Falling Behind
in Succession Planning. American Banker, March 26.
http://www.americanbanker.com/issues/178_59/communitybanks-are-falling-behind-in-succession-planning-1057825-1.
html. Accessed December 2, 2015.

Regression Analysis Shows Closely Held
Community Banks With Overlap of
Managers and Owners Outperform
Other Community Banks

Appendix:
Regression Analysis of Pretax Return on Assets

Mean Pretax Return on Assets
Closely Held = 1

Closely and widely held community banks differ in
several characteristics that affect financial performance.
To ensure that our comparisons are not simply based
on these other characteristics, we perform multiple
regression analysis of pretax return on assets comparing
whether a bank is closely held, whether it has overlap
of ownership and control, and a number of control
characteristics. Regression analysis allows us to compare
the performance of closely and widely held banks that
are otherwise similar.

Overlap = 1
Age
Total Assets ($ million)
Headquarters in Metropolitan Area
Headquarters in Micropolitan Area

Our regression takes the form of

Market Power

ROAit = β0 + β1CloselyHeldi + β2Overlapi +
β3  Ageit + β4  Assetsit + β5  Metroi + β6BusinessLineit +
β7  MarketPower + γ  State + δ Year + εit,

Agricultural Specialization
Commercial and Industrial
Specialization
Commercial Real Estate Specialization

where ROAit is pretax return on assets; Closely Held is
an indicator variable equal to one if the bank is closely
held and zero otherwise; Overlap is an indicator variable equal to one if there is overlap between ownership
and management; Age is the age of the bank; Assets
is the size of the bank measured in total assets; Metro
is a set of indicator variables for whether the bank is
headquartered in a county in a metropolitan statistical area, micropolitan statistical area, or rural area; and
BusinessLine is a set of indicator variables for the bank’s
business line. The panel regressions also include state
and year fixed effects. Standard errors are clustered at
the state level.

Mortgage Specialization
Multispecialty
No Specialty
State Fixed Effects
Year Fixed Effects
Observations
Adjusted R-Squared

Source: FDIC Data and April 2015 Examiner Survey.
Notes: This table presents regression results for pretax return on assets on whether the
bank is closely held, whether there is overlap in management and ownership, and a set of
controls. Standard errors, clustered at the state level, are in parentheses below the
coefficients.
* p < 0.10
** p < 0.05
*** p < 0.01.

The results of the regressions are presented in Table A1.
The data are from the December Call Report for each
surveyed community bank for the years 2010 through
2014. The data show that closely held banks, on average, have not underperformed widely held banks, even
when controlling for other bank characteristics that
affect profitability. The coefficient on being closely held
is small and statistically insignificant. Once we control
for the other differences between closely and widely
held banks, there does not appear to be a difference
FDIC Quarterly	

Pretax Return on
Assets
0.083
–0.0234
(0.0690)
0.117**
(0.0427)
0.000125
(0.0011)
0.314***
(0.0401)
–0.260***
(0.0518)
0.00821
(0.0767)
0.0000516**
(0.0000)
0.409***
(0.1190)
0.172
(0.1970)
–0.046
(0.1030)
0.200*
(0.1110)
0.082
(0.0917)
1.039***
(0.3270)
Yes
Yes
6,784
0.131

in their financial performance. The coefficient on the
overlap between ownership and management, however,
is positive and statistically significant, which suggests
that having an owner serve as day-to-day manager of
the bank is an effective way to mitigate the principalagent problem in closely held banks.

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2015, Volume 9, No. 4