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7/27/2019 120127 FDIC Quarterly Banking Profile
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7/27/2019 120127 FDIC Quarterly Banking Profile
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7/27/2019 120127 FDIC Quarterly Banking Profile
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FDIC Quarterly 3 2011, Volume5, No. 4
Quarterly Banking Profile
Commercial Lending Activity RisesTotal assets of insured institutions increased by $207.1billion (1.5 percent) during the quarter. Most of theasset growth occurred in securities portfolios and tradingaccounts, while loan balances registered a secondconsecutive quarterly increase. Mortgage-backed securi-
ties holdings increased by $54.4 billion (3.5 percent),while banks U.S. Treasury securities rose by $10.4billion (6.4 percent). Assets in trading accountsincreased by $61 billion (8.8 percent). Balances withFederal Reserve banks, which had grown by $253 billionin the first six months of 2011, declined by $91.2 billion(12.2 percent). Total loans and leases increased for asecond consecutive quarter, rising by $21.8 billion (0.3percent). The largest growth was in C&I loans, whichincreased by $44.8 billion (3.6 percent). This is the fifthconsecutive quarter that C&I loan balances have risen.Small C&I loans (loans with original balances of lessthan $1 million) declined by $3.1 billion (1.1 percent).
Residential mortgage loan balances increased by $23.7billion, the largest quarterly increase since third quarter2007. Real estate construction loan balances fell for a14th consecutive quarter, declining by $20.3 billion (7.4percent). Loans to depository institutions declined by$37.1 billion (25.3 percent), as a result of the elimina-tion of intracompany loans between two affiliated banksthat merged during the third quarter. Adjusted for theimpact of this transaction, overall loan growth in thethird quarter was comparable to the growth reported inthe previous quarter. The larger increases in securitiesproduced a decline in the average risk weighting of the
industrys assets. The ratio of risk-weighted assets tototal assets fell to 67 percent at the end of the quarter,the lowest level since first quarter 1994.
Reserves Decline for Sixth Quarter in a RowLoan-loss reserves fell by $10.4 billion (5 percent)during the quarter, as net charge-offs exceeded lossprovisions by $8.2 billion. A majority of banks (54.5percent) increased their reserves, but the 38.2 percentthat reduced reserves included 17 of the 20 largest
banks. The reduction in total reserves caused the indus-trys coverage ratio of reserves to noncurrent loans tofall from 64.9 percent to 63.7 percent during the quar-ter. The industrys ratio of reserves to total loans andleases also declined, from 2.84 percent to 2.69 percent.
Internal Capital Growth ImprovesTotal equity capital increased by $24.5 billion (1.6percent), as retained earnings contributed $15.5 billionto equity growth. Retained earnings were $5 billion(48.2 percent) higher than in third quarter 2010, andrepresent the largest quarterly total since third quarter
2006. The growth in retained earnings came on top of a$6.5 billion (48.9 percent) year-over-year increase inquarterly dividend payments. Equity received an addi-tional boost from unrealized gains on securities held forsale, which rose by $7.7 billion (38.5 percent) duringthe quarter. Tier 1 regulatory capital, which does notinclude unrealized securities gains, increased by $15.1billion (1.3 percent). Total regulatory capital had asmaller increase$10.9 billion, or 0.8 percentdue tothe reductions in loan-loss reserves. At the end of thequarter, more than 96 percent of all FDIC-insured insti-tutions, representing more than 99 percent of totalindustry assets, met or exceeded the quantitativerequirements for well-capitalized status, as defined forPrompt Corrective Action purposes.
Chart 5
Noncurrent Loans and Loan Losses Continue to Fall,but Remain above Pre-Crisis Levels
Percent
0
1
2
3
4
5
6
1990 1993 1996 1999 2002 2005 2008 2011
Noncurrent Loan Rate
Quarterly Net Charge-off Rate
Chart 6
Strong Deposit Inows Have Not Been Accompaniedby Loan Growth
Quarterly Change (Billions of Dollars)
43
189
237
6128
-6
-116-140
-109
-210
-133-107
-7 -14
-126
6470
235
150
7
155
308
67 80
-28
133149
180163
234
22
203221*
126
-58-82
145140
-$300
-$200
-$100
$0
$100
$200
$300
$400
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
Change in Total Loans and Leases
Change in Total Deposits
2007 2008 2009 2010
* FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitizedloan balances back onto banks' balance sheets in the first quarter of 2010. Although the totalamount consolidated cannot be precisely quantified, the industry would have reported a declinein loan balances for the quarter absent this change in accounting standards.
2011
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FDIC Quarterly 4 2011, Volume5, No. 4
No New Charters Were Added in the QuarterThe number of insured institutions reporting financialresults declined to 7,436 at the end of the quarter, from7,513 in the second quarter. Mergers absorbed 49 insti-tutions during the quarter, and 26 institutions failed.One institution had not yet reported third-quarter
results. For only the second time in the 39 years forwhich data are available, no new charters were addedduring the quarter (the other occasion was second quar-ter 2010). The number of institutions on the FDICsproblem list declined from 865 to 844 during thequarter. Total assets of problem institutions fell from$372 billion to $339 billion. The number of full-timeequivalent employees at FDIC-insured commercialbanks and savings institutions increased by 5,012 (0.2percent) during the quarter, to 2,109,911.
Author: Ross Waldrop, Sr. Banking AnalystDivision of Insurance and Research
(202) 898-3951
The Flow of Large-Denomination Deposits intoLarge Banks IncreasesTotal deposits increased by $234.5 billion (2.4 percent)in the third quarter. Deposits in foreign offices declinedby $45 billion (2.9 percent) while domestic depositsrose by $279.5 billion (3.4 percent). About two-thirds
of the increase in domestic deposits ($183.8 billion)consisted of large-denomination (balances greater than$250,000) noninterest-bearing transaction deposits,which have temporary unlimited deposit insurancecoverage through the end of 2012. Three-quarters ofthe increase in these large deposits occurred at the tenlargest banks, although more than half of all banks(55.9 percent) reported increases in these accounts.
Nondeposit liabilities declined by $51.2 billion (2.2percent), as banks reduced their Federal Home LoanBank advances by $17.9 billion (5.2 percent).
Chart 7
Banks Continue to Reduce the Risk in Their
Asset PortfoliosRisk-Weighted Assets as a Percent of Total Assets
60
62
64
66
68
7072
74
76
78
80
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
2005 2006 2007 2008 2009 2010 2011
Chart 8
-21
268 11 14
27
54
81
53
111
136150
73
54
31 24
-23
9
12
21
24
50
45
41
45
41
30
2622
2
21
101
-25
0
25
50
75
100
125
150
175
200
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
Quarterly Failures
Net Quarterly Change inNumber of Problem Banks
2007 2008 2009 2010 2011
Quarterly Changes in the Number of TroubledInstitutions, 20072011
4433 44
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FDIC Quarterly 5 2011, Volume5, No. 4
Quarterly Banking Profile
TABLE I-A. Selected Indicators, All FDIC-Insured Institutions*2011** 2010** 2010 2009 2008 2007 2006
Return on assets (%) 0 92 0 64 0 65 -007 0 03 0 81 128
Return on equ ity (%) 8 20 5 83 5 87 -072 0 35 775 12 30
Core cap ital ( leverage) rat io (%) 917 8 96 8 89 8 60 747 797 8 22
Non cur re nt assets pl us other r ea l es tate owne d to a ssets (%) 262 324 311 336 191 095 054
Net charge-of fs to loans (%) 161 2 64 2 55 2 52 129 0 59 0 39
Asset g rowth rate (%) 3 25 111 178 -545 6 19 9 88 9 03
Net interest margin (%) 3 61 3 79 3 76 3 49 3 16 3 29 3 31
Net operating income growth (%) 5181 1,00452 1,63237 -15476 -9071 -2759 852
Number of institutions reporting 7,436 7,761 7,658 8 ,012 8 ,305 8 ,534 8 ,680
Commercial banks 6 ,352 6 ,623 6 ,530 6 ,840 7,087 7,284 7,401
Savings insti tutions 1,084 1,138 1,128 1,172 1,218 1,250 1,279
Percentage of unprofitable institutions (%) 1557 2 099 2 207 3 084 2489 1210 795
Num be r of p ro bl em i ns ti tut io ns 8 44 8 60 8 84 702 2 52 76 50
Assets of pr obl em in st it ut ion s (i n bi lli ons) $ 33 9 $ 379 $ 39 0 $ 403 $15 9 $2 2 $ 8
Number of failed institutions 74 127 157 140 25 3 0
Number of assisted institutions 0 0 0 8 5 0 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
(dollar figures in millions)3rd Quarter
20112nd Quarter
20113rd Quarter
2010%Change
10Q3-11Q3Number of institutions reporting 7,436 7,513 7,761 -42
Tota l emp loyees (ful l- time equ ivalen t) 2 ,109,911 2 ,104,899 2 ,042 ,106 3 3
CONDITION DATA
Total assets $13,807,683 $13,600,584 $13,372,951 33
Loans secured by rea l estate 4 ,113 ,653 4 ,122,587 4 ,302 ,513 -44
1- 4 Fa mil y r es ide nt ia l m or tg age s 1,852,00 6 1,828 ,3 40 1,88 2,535 -16
Nonfarm nonresident ia l 1,055,475 1,059,532 1,072,729 -16
Construction and development 254,589 274,916 354,137 -281
Home equity lines 608, 252 615,512 647,919 - 61
Commerc ia l & industr ia l loans 1,283,618 1,238,860 1,165,735 10 1
Loans to ind iv idua ls 1,284,570 1,289,549 1,328,440 -33
Cre dit car ds 6 66,477 6 68,340 6 83 ,94 4 -2 6
Fa rm l oa ns 59,802 57,668 59,104 12
Othe r lo an s & l ea se s 5 95 ,4 62 6 07,260 53 5,519 112
Less: Unearned income 1,728 2,310 2,127 -188
Tota l loans & leases 7,335,378 7,313 ,613 7,389,184 -07
Le ss: Reser ve for lo sses 197,212 207,664 241,989 -185
Net loans and leases 7,138,166 7,105,949 7,147,194 -01
Secur it ies 2 ,788 ,702 2 ,721,750 2 ,641,552 5 6
Othe r re al e state owne d 50,485 51,30 0 5 3,160 - 50
Goo dw ill an d other i ntang ib le s 372,712 3 88 ,3 98 3 84,146 - 30
All o ther assets 3 ,457,618 3 ,333 ,188 3 ,146,899 99
Tota l l iabi li ties and cap ital 13 ,807,683 13 ,600 ,584 13 ,372 ,951 3 3
Deposits 10 ,000 ,070 9 ,765,593 9,273,697 78
Dom es ti c of fi ce de pos it s 8,50 5,121 8 ,22 5,628 7,73 8,109 99
Foreign o ff ice deposits 1,494,949 1,539,965 1,535,588 -26
Other bor rowed funds 1,475,155 1,600,166 1,866,933 -210Subo rdi nate d d eb t 13 6,524 13 8,871 150,820 - 95
A ll other l iab ili ti es 616,947 5 40,7 76 56 7,33 6 8 7
Total e qu it y cap ital (in clu des mi nor it y i nter es ts) 1,578 ,9 84 1,555 ,177 1,514,16 4 43
Bank equ ity cap ital 1,560,746 1,536,265 1,495,119 4 4
Lo an s a nd l eases 3 0- 89 d ays pa st d ue 10 0,240 101,128 123,7 75 -190
Non cur re nt l oa ns an d le ases 3 09,626 32 0,0 64 377,174 -179
Res tru cture d l oa ns an d l eases 12 6,95 3 119,6 91 75,645 678
Mor tgage-backed secur it ies 1,600,933 1,546,500 1,440,577 111
Earning assets 11,916,533 11,816,502 11,547,621 32
FHLB Advances 323 ,290 341,200 402 ,404 -19 7
Unused loan commitments 5,720,248 5,701,0 42 6 ,0 61,4 52 - 56
Trust assets 15,414,297 19,684,965 18,602,057 -171
Assets secur it ize d an d sol d* ** 9 65,061 970,383 99 2,115 -2 7
Not iona l amount o f der ivat ives*** 250 ,463 ,084 251,259,019 236 ,472,991 5 9
INCOME DATAFirst Three
Quarters 2011First Three
Quarters 2010 %Change3rd Quarter
20113rd Quarter
2010%Change
10Q3-11Q3To ta l in tere st i ncom e $ 381,892 $ 40 5,84 4 - 59 $125,824 $133 ,4 81 - 57
Total interest ex pense 65,887 81,791 -194 20, 589 25,873 -204
Net interest income 316,006 324,053 -25 105,235 107,607 -22
Provision for loan and lease losses 57,514 125,754 -543 18,575 35,052 -470Total noninterest income 175,547 176,496 -05 59,495 56,259 58
Total noninterest expense 304,662 288,836 55 100,430 97,005 35
Securities gains (losses) 3,772 6,879 -452 3,097 3,168 -22
Applicable income taxes 40,143 28,210 423 13,812 10,750 285
Extraordinary gains, net 770 -510 N/M 532 -330 N/M
Total net income (includes minority interests) 93,775 64,118 463 35,542 23,898 487
Bank net income 93,209 63,616 465 35,317 23,769 486
Net c harge-of fs 87,764 145,633 -397 26,748 43,980 -39 2
Cash dividends 55,251 30,631 804 19,835 13,322 489
Retained earnings 37,958 32,984 151 15,482 10,447 482
Net operating income 90,255 59,454 518 32,718 21,757 504
*** Call Report filers only N/M - Not Meaningful
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FDIC Quarterly 6 2011, Volume5, No. 4
TABLE III-A. Third Quarter 2011, All FDIC-Insured Institutions
Asset Concentration Groups*
THIRD QUARTER(The way it is...)
All InsuredInstitutions
CreditCard
BanksInternational
BanksAgricultural
BanksCommercial
LendersMortgageLenders
ConsumerLenders
OtherSpecialized
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FDIC Quarterly 7 2011, Volume5, No. 4
Quarterly Banking Profile
TABLE III-A. Third Quarter 2011, All FDIC-Insured InstitutionsAsset Size Distribution Geographic Regions*
THIRD QUARTER(The way it is...)
All InsuredInstitutions
Less than$100
Million
$100Million to$1 Billion
$1 Billionto
$10 Billion
Greaterthan
$10 Billi on New York Atlanta ChicagoKansas
City DallasSan
Francisco
Number of institutions reporting 7,436 2,490 4,279 561 106 923 974 1,563 1,792 1,555 629
Commercial banks 6,352 2,208 3,626 434 84 484 864 1,289 1,698 1,444 573
Savings institutions 1,084 282 653 127 22 439 110 274 94 111 56
Total assets (in bill ions) $13,8077 $1428 $1,2735 $1,4255 $10,9659 $2,8421 $2,9499 $3,1700 $2,9020 $8019 $1,1417
Commercial banks 12 ,5599 1268 1,0478 1,110 0 10 ,275 4 2 ,1888 2 ,833 2 3 ,046 2 2 ,843 1 7063 942 3
Savings institutions 1, 247 8 160 2257 3156 6905 6533 1167 1238 589 957 1994Total deposits ( in bil lions) 10,0001 1206 1,0553 1,0961 7,7281 1,9928 2,2125 2,2063 2,1196 6550 8138
Commercial banks 9,07 70 1078 875 2 8 550 7,2391 1,5214 2 ,1255 2,112 3 2,0727 576 7 66 84
Savings institutions 9230 128 1801 2411 4890 4714 870 940 469 784 1454
Ban k n et in co me (i n mi lli ons) 3 5,317 223 2,15 8 3 ,174 2 9,763 6,837 5,619 7,55 8 9,16 2 2,00 6 4,13 4
Commercial banks 32,695 214 1,810 2,614 28,056 5,953 5,460 7,349 9,055 1,617 3, 260
Savings institutions 2,622 8 348 560 1,706 884 159 208 107 389 874
Performance Ratios (annualized, %)
Yield on earning assets 425 488 486 476 410 470 376 354 470 463 489
Cost of funding earning assets 070 094 100 089 063 082 055 064 075 071 075
Net interest margin 356 394 386 388 347 388 321 290 395 392 413
Noninterest income to assets 174 086 102 102 193 162 174 210 171 138 141
Noninterest expense to assets 294 341 319 280 292 291 298 295 292 319 273
Loan and lease loss provision to assets 054 036 055 058 054 066 060 044 055 046 044
Net operating income to assets 096 054 060 080 102 096 063 089 120 094 137
Pretax return on assets 144 077 090 126 153 145 105 130 172 135 215
Return on assets 103 063 068 090 110 098 077 097 127 102 146
Return on equit y 915 5 26 6 36 758 972 770 632 1135 11 28 914 1070
Net charge-offs to loans and leases 147 062 090 102 163 178 170 102 166 093 105
Loan and lease loss provision tonet charge-offs 6944 9858 9641 9018 6501 6954 6315 9690 5994 8032 6799Eff ic ie ncy r at io 5969 76 12 6 955 6135 5 823 5 64 3 6 583 6 338 5 565 6 44 4 5186
% of unprofitable institutions 14 28 15 86 1414 998 566 10 94 2916 1312 999 990 2210
% of institutions with earnings gains 6298 6161 6317 6595 7170 5796 6078 6174 6719 6334 6391
Structural Changes
New charters 0 0 0 0 0 0 0 0 0 0 0
Institutions absorbed by mergers 49 21 22 4 2 6 4 11 11 11 6
Failed institutions 26 5 18 3 0 1 13 4 1 4 3
PRIOR THIRD QUARTERS(The way it was)
Return on assets (%) 2010 072 040 035 026 083 077 058 061 099 078 074
2008 003 027 -002 -060 012 001 022 010 050 018 -059
2006 131 102 123 127 133 112 137 101 179 122 182
Net charge-offs to loans & leases (%) 2010 238 087 116 175 270 304 231 194 277 121 228
2008 143 044 071 111 163 149 128 136 161 085 180 2006 040 016 014 020 049 063 018 027 046 023 062
* See Table V-A (page 11) for explanations
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FDIC Quarterly 9 2011, Volume5, No. 4
Quarterly Banking Profile
TABLE IV-A. First Three Quarters 2011, All FDIC-Insured InstitutionsAsset Size Distribution Geographic Regions*
FIRST THREE QUARTERS(The way it is...)
All InsuredInstitutions
Less than$100
Million
$100Million to$1 Billion
$1 Billionto
$10 Billion
Greaterthan
$10 Billi on New York Atlanta ChicagoKansas
City DallasSan
Francisco
Number of institutions reporting 7,436 2,490 4,279 561 106 923 974 1,563 1,792 1,555 629
Commercial banks 6,352 2,208 3,626 434 84 484 864 1,289 1,698 1,444 573
Savings institutions 1,084 282 653 127 22 439 110 274 94 111 56
Total assets (in bill ions) $13,8077 $1428 $1,2735 $1,4255 $10,9659 $2,8421 $2,9499 $3,1700 $2,9020 $8019 $1,1417
Commercial banks 12 ,5599 1268 1,0478 1,110 0 10 ,275 4 2 ,1888 2 ,833 2 3 ,046 2 2 ,843 1 7063 942 3
Savings institutions 1, 247 8 160 2257 3156 6905 6533 1167 1238 589 957 1994Total deposits ( in bil lions) 10,0001 1206 1,0553 1,0961 7,7281 1,9928 2,2125 2,2063 2,1196 6550 8138
Commercial banks 9,07 70 1078 875 2 8 550 7,2391 1,5214 2 ,1255 2,112 3 2,0727 576 7 66 84
Savings institutions 9230 128 1801 2411 4890 4714 870 940 469 784 1454
Ban k n et in co me (i n mi lli ons) 9 3,20 9 579 5,74 3 9,0 85 7 7,801 2 2,011 13 ,521 18,44 8 21,20 0 5 ,6 52 12,377
Commercial banks 86,547 566 4,929 7,440 73,612 20,101 12,983 18,143 20,965 4,801 9,554
Savings institutions 6,662 13 814 1,646 4,189 1,910 538 305 236 851 2,823
Performance Ratios (annualized, %)
Yield on earning assets 436 488 488 478 423 484 405 357 475 465 489
Cost of funding earning assets 075 100 107 094 068 088 064 069 080 077 078
Net interest margin 361 388 382 384 355 396 341 288 396 388 411
Noninterest income to assets 174 085 098 117 192 164 165 203 176 135 166
Noninterest expense to assets 302 342 318 291 301 297 305 304 304 317 286
Loan and lease loss provision to assets 057 034 055 061 057 056 074 042 063 044 049
Net operating income to assets 089 050 056 079 095 104 053 076 107 093 139
Pretax return on assets 132 067 080 121 141 161 086 113 138 129 220
Return on assets 092 054 061 086 097 107 062 081 099 097 148
Return on equity 820 467 579 742 862 845 516 948 874 891 1091
Net charge-offs to loans and leases 161 058 083 117 181 197 172 119 194 087 118
Loan and lease loss provision tonet charge-offs 6553 10184 10186 8323 6105 5244 7659 7854 5828 8192 6693Eff ic ie ncy r at io 6 064 7 762 7067 6153 5 926 5 64 5 6 607 6 636 5704 6 47 7 5176
% of un pr of it ab le i ns ti tut io ns 1557 1731 15 28 1159 755 13 11 3 316 1401 1038 1035 2353
% of institutions with earnings gains 6303 5948 6338 7362 7642 6056 6140 6020 6484 6296 7122
Condition Ratios (%)
E arning asset s to total assets 86 30 9 095 9149 9036 8511 86 83 8477 8507 85 26 9 052 9206
Loss allowance to:
Loans and leases 269 177 190 206 292 259 277 286 304 200 203
Noncurrent loans and leases 6369 7010 5693 5166 6613 8408 49 29 62 54 6912 6234 6972
Noncurrent assets plus
other real estate owned to assets 262 239 318 327 248 179 367 240 278 273 217
Equ it y cap ital r at io 1130 1199 1082 1187 1128 1255 1220 862 1119 1116 13 71
Core capit al (leverage) ratio 917 11 33 1015 1054 8 85 10 21 894 707 918 1003 12 39
T ier 1 r is k- ba se d capi ta l r at io 13 16 18 16 1508 1552 1258 1510 1223 1076 1279 144 8 1716
Total r is k- ba sed cap ital rat io 1552 1929 1629 1679 15 22 170 4 15 18 1374 1487 1614 1858
Net loans and leases to deposits 71 38 67 80 7532 7975 6971 72 98 7269 62 20 7253 7387 8379
Net l oa ns to total assets 5170 5728 62 4 2 6132 4913 5118 5 452 4 329 5 297 6 034 5972
Domest ic deposits to tot al asset s 6160 8449 8284 7633 5692 61 53 6965 55 54 5141 81 21 69 88
Structural ChangesNew charters 3 0 2 1 0 0 3 0 0 0 0
Institutions absorbed by mergers 144 50 76 15 3 22 13 29 33 37 10
Failed institutions 74 13 55 6 0 1 38 13 2 10 10
PRIOR FIRST THREE QUARTERS(The way it was)
Number of institutions 2010 7,761 2,682 4,414 556 109 961 1,041 1,609 1,841 1,637 672
2008 8,384 3,240 4,470 560 114 1,027 1,197 1,721 1,943 1,719 777
2006 8,743 3,731 4,369 523 120 1,097 1,232 1,848 2,027 1,767 772
Total assets (in bill ions) 2010 $13,3730 $1511 $1,3158 $1,4007 $10,5054 $2,7246 $2,9571 $2,9480 $1,6495 $7885 $2,3052
2008 13,5725 1749 1,3382 1,4747 10,5847 2,6890 3,4275 3,3247 1,0092 7708 2,3514
2006 11,754 2 1942 1,2835 1,4225 8 ,854 0 2 ,963 5 2 ,928 6 2 ,736 1 814 5 644 3 1,6673
Return on assets (%) 2010 064 040 037 026 073 072 036 062 079 073 080
2008 032 047 044 018 033 059 030 031 093 056 -022
2006 133 101 120 130 136 124 134 107 168 127 177
Net charge-offs to loans & leases (%) 2010 264 073 102 171 307 377 251 204 302 122 235
2008 118 031 049 088 137 131 098 115 136 065 149 2006 036 014 014 019 043 056 016 024 039 020 056
Noncurrent assets plus
OREO to assets (%) 2010 324 242 341 369 317 218 404 306 459 327 272
2008 155 140 182 203 146 098 167 156 190 163 185
2006 050 072 057 046 049 044 031 054 089 062 063
Equ it y cap ital r at io (%) 2010 1118 12 19 1036 1122 1126 12 48 1155 906 1156 107 7 1176
2008 962 1314 1018 1087 932 1092 1014 856 966 987 879 2006 1041 1304 1046 1100 10 25 1113 976 903 1118 1036 12 20
* See Table V-A (page 11) for explanations
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FDIC Quarterly 10 2011, Volume5, No. 4
TABLE V-A. Loan Performance, All FDIC-Insured Institutions
Asset Concentration Groups*
September 30, 2011 All InsuredInstitutions
CreditCard
BanksInternational
BanksAgricultural
BanksCommercial
LendersMortgageLenders
ConsumerLenders
OtherSpecialized $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
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FDIC Quarterly 11 2011, Volume5, No. 4
Quarterly Banking Profile
TABLE V-A. Loan Performance, All FDIC-Insured InstitutionsAsset Size Distribution Geographic Regions*
September 30, 2011 All InsuredInstitutions
Less than$100
Million
$100Million to$1 Billion
$1 Billionto
$10 Billion
Greaterthan
$10 Billion N ew York Atl anta ChicagoKansas
City DallasSan
Francisco
Percent of Loans 30-89 Days Past Due
All loans secured by real estate 172 163 128 113 196 130 193 168 243 140 090
Construction and development 171 186 177 139 182 198 149 194 226 127 134
Nonfarm nonresidential 093 145 110 085 087 093 094 098 111 083 069
Multifamily residential real estate 066 112 095 072 057 064 087 067 083 059 040
Home equity loans 115 103 080 076 121 073 138 134 116 095 046Other 1-4 family residential 255 210 158 159 286 168 275 242 393 223 127
Commercial and industrial loans 048 140 099 068 039 073 035 049 043 059 043
Loans to individuals 171 207 167 168 171 171 198 149 198 120 122
Credit card loans 171 169 208 176 170 161 202 138 209 088 125
Other loans to individuals 171 207 164 166 171 200 196 153 182 136 119
All other loans and leases (including farm) 022 038 031 026 020 021 016 029 018 030 023
Total loans and leases 137 149 121 107 143 126 151 126 169 118 085
Percent of Loans Noncurrent**
All real estate loans 650 300 380 485 757 439 864 719 728 418 430
Construc tion and development 14 57 933 1217 1461 1578 1690 1707 1335 1340 908 1630
Nonfarm nonresidential 392 354 341 389 420 361 464 398 393 304 394
Multifamily residential real estate 291 347 284 340 275 198 427 312 266 444 285
Home equity loans 177 112 137 134 184 124 189 200 211 110 082
Other 1-4 family residential 907 242 280 454 1091 463 1193 1154 1125 447 418
Commercial and industrial loans 149 247 232 227 130 188 119 167 144 159 130
Loans to individuals 142 101 080 104 146 159 123 122 163 061 137
Credit card loans 171 093 145 151 171 172 174 183 179 086 153
Other loans to individuals 111 101 075 087 116 119 096 101 141 049 123
All other loans and leases (including farm) 077 061 074 069 078 031 051 067 118 098 087
Total loans and leases 422 253 333 398 441 308 563 458 440 321 290
Percent of Loans Charged-off (net, YTD)
All real estate loans 136 057 081 116 155 081 193 135 164 082 094
Construction and development 339 252 285 418 329 265 480 382 214 180 380
Nonfarm nonresidential 083 058 060 087 092 069 113 103 068 047 075
Multifamily residential real estate 074 098 076 079 071 056 122 067 132 066 034
Home equity loans 212 061 071 104 232 090 284 178 285 151 078
Other 1-4 family residential 125 039 058 076 145 070 153 116 184 077 086
Commercial and industrial loans 094 100 115 108 089 139 067 087 094 085 106
Loans to individuals 371 057 098 172 393 513 295 190 473 143 205
Credit card loans 583 234 536 437 587 598 655 488 656 297 377
Other loans to individuals 124 049 061 069 134 214 087 087 206 056 058
All other loans and leases (including farm) 025 012 030 048 024 009 021 008 048 044 008
Total loans and leases 161 057 083 116 181 197 172 119 194 086 118
Loans Outstanding (in billions)
All real estate loans $4,1137 $577 $6316 $6495 $2,7749 $8191 $9957 $7912 $8036 $3310 $3730
Construction and development 2546 37 592 590 1327 398 754 417 372 401 204
Non far m no nr es id ent ial 1,0 555 170 252 3 26 46 5216 2 272 2 28 3 1872 1596 1217 1314
Multifamily residential real estate 2168 18 310 457 1383 658 290 609 222 101 288Home equity loans 6083 17 337 477 5251 907 1722 1514 1346 221 374
Othe r 1- 4 fam il y r es id en ti al 1,852 0 25 4 2 213 2194 1,38 59 3 892 4 818 3 349 3744 1248 14 68
Com mer ci al a nd i ndu st ri al l oa ns 1,28 36 104 10 31 13 65 1,03 35 19 50 3 079 26 08 29 22 9 25 13 53
Lo an s to i ndi vi dua ls 1,28 46 56 3 66 710 1,1713 3 804 2 290 18 51 2 86 0 4 59 15 82
Credit card loans 6665 01 25 192 6447 2859 806 458 1658 153 730
Other loans to individuals 6181 55 342 518 5266 945 1485 1392 1202 306 852
All other loans and leases (including farm) 6553 95 393 361 5703 989 1217 1759 2041 246 301
Total l oa ns an d le ases ( pl us un ea rne d in co me) 7,3371 83 3 8106 8 93 2 5,55 01 1,49 34 1,65 43 1,413 0 1,58 59 49 40 6 96 6
Memo: Other Real Estate Owned (in millions)
All other real estate owned 50,4852 1,2743 13,2914 10,8822 25,0373 4,7029 14,1597 11,1307 10,0688 5,9209 4,5022
Construction and development 17,0095 4370 6,1450 5,3725 5,0551 1,2335 5,4907 2,4360 2,9383 2,9417 1,9694
Nonfarm nonresidentia l 10,9023 4151 3,7606 2,9396 3,7870 1,1515 2,5346 2,1832 2,3277 1,4812 1,2241
M ul ti fam ily re si dent ia l r eal es tate 2 ,5 439 4 50 4 064 40 92 1,683 3 278 9 5106 3 954 1,00 83 15 64 1943
1-4 family residential 11,9003 3473 2,7199 1,9772 6,8559 1,6536 3,7501 2,4147 2,1461 1,1772 7586
Farmland 4042 301 2103 1037 601 213 804 837 817 102 5 346
GNM A pr op er tie s 7,575 2 05 516 815 7,4416 3 442 1,793 6 3,6185 1,43 42 619 3 228
* Regions:New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont,
US Virgin IslandsAtlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West VirginiaChicago - Illinois, Indiana, Kentucky, Michigan, Ohio, WisconsinKansas City - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South DakotaDallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, TexasSan 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
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FDIC Quarterly 13 2011, Volume5, No. 4
Quarterly Banking Profile
TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Commercial Banks and State-CharteredSavings Banks)
Asset Size Distribution
(dollar figures in millions)
3rdQuarter
2011
2ndQuarter
2011
1stQuarter
2011
4thQuarter
2010
3rdQuarter
2010
% Change10Q3-11Q3
Less than$100
Million
$100Million to$1 Billion
$1 Billionto $10Billion
Greaterthan $10Billion
Assets Securitized and Sold with Servicing Retained or withRecourse or Other Seller-Provided Credit EnhancementsNumber of institutions reporting securitization activities 142 139 137 136 134 60 20 69 23 30Outstanding Principal Balance by Asset Type
1-4 family residential loans $749,814 $758,033 $757,270 $755,948 $763,534 -18 $68 $1,296 $3,576 $744,874Home equity loans 0 1,028 0 0 0 00 0 0 0 0Credit card receivables 10,326 10,624 11,607 13,748 14,320 -279 0 683 0 9,643Auto loans 1,034 228 234 298 329 214 3 0 0 27 1,007Other consumer loans 4 ,979 4 ,667 4 ,792 4 ,620 4 ,721 5 5 0 0 0 4 ,979Commerc ial a nd i nd ust ri al l oans 8 2 72 252 26 3 4,34 0 - 981 15 11 29 27All other loans, leases, and other assets* 198,826 195,730 207,019 194,842 204,870 -30 1 13 105 198,708
Total securitized and sold 965,061 970,383 981,175 969,719 992,115 -27 83 2,003 3,737 959,238
Maximum Credit Exposure by Asset Type1-4 family residential loans 4,116 4,321 4,511 4,661 4,849 -151 1 4 4 52 4,019Home equity loans 0 0 0 0 0 00 0 0 0 0Cr ed it c ard re ce iva bl es 5 61 5 31 552 6 09 574 -2 3 0 24 4 0 316Auto loans 3 56 4 5 6 -500 0 0 3 0Ot her consumer loans 216 202 201 185 207 43 0 0 0 216Commercial and industrial loans 0 0 0 0 9 -1000 0 0 0 0All other loans, leases, and ot her assets 697 476 489 521 932 -25 2 0 4 0 693
Total credit exposure 5,592 5,584 5,757 5,981 6,577 -150 1 293 54 5,244Total unused liquidity commitments provided to institution's own securitizations 129 124 125 208 211 -389 0 0 8 121
Securitized Loans, Leases, and Other Assets 30-89 Days Past Due (%)1-4 family residential loans 42 40 47 56 60 00 13 22 42Home equit y loans 00 1 5 00 00 00 00 00 00 00Credit card receivables 16 1 3 11 11 1 2 00 2 2 00 16Auto l oa ns 01 19 15 16 14 00 00 16 01Ot her consumer loans 44 4 5 41 42 39 00 00 00 44
Commercial and industrial loans 00 00 00 06 00 00 00 00 00All other loans, leases, and ot her assets 14 09 13 11 15 00 00 01 14Total loans, leases, and other assets 36 3 3 39 47 50 00 16 2 2 36Securitized Loans, Leases, and Other Assets 90 Days or More Past Due (%)
1-4 family residential loans 64 69 90 94 105 00 12 34 64Home equit y loans 00 3 2 00 00 00 00 00 00 00Credit card receivables 06 0 5 05 05 05 00 2 3 00 05Auto l oa ns 00 02 00 03 03 00 00 00 00Ot her consumer loans 46 47 41 3 8 40 00 00 00 46Commercial and industrial loans 00 00 00 00 00 00 00 00 00All other loans, leases, and ot her assets 66 6 2 58 7 3 99 00 00 11 66
Total loans, leases, and other assets 64 67 8 2 88 101 00 16 33 64Securitized Loans, Leases, and Other Assets Charged-off(net, YTD, annualized, %)
1-4 family residential loans 09 06 03 19 14 00 00 00 09Home equit y loans 00 16 00 00 00 00 00 00 00Credit card receivables 41 29 14 7 9 6 2 00 5 9 00 40Auto l oa ns 00 11 00 14 09 00 00 - 02 00Ot her consumer loans 09 06 03 16 13 00 00 00 09Commercial and industrial loans 00 00 00 00 00 00 00 00 00All other loans, leases, and ot her assets 0 2 01 01 04 0 2 00 00 00 0 2
Total loans, leases, and other assets 08 0 5 03 17 1 2 00 20 00 08
Seller's Interests in Institution's Own Securitizations - Carried as LoansHome equity loans 0 0 0 0 0 00 0 0 0 0Cred it card receivables 9 ,252 9 ,115 8 ,157 7,350 6 ,073 523 0 37 0 9 ,216Commercial and industrial loans 6 2 2 2 2 2000 6 0 0 0
Seller's Interests in Institution's Own Securitizations - Carried as SecuritiesHome equity loans 0 447 0 0 0 00 0 0 0 0Credit card receivables 0 0 0 0 0 00 0 0 0 0Commercial and industrial loans 0 0 0 0 0 00 0 0 0 0
Assets Sold with Recourse and Not SecuritizedNu mber of in st it ut io ns re po rt ing a sset sal es 8 61 8 64 8 58 8 56 847 17 154 5 45 124 3 8Outstanding Principal Balance by Asset Type
1-4 family residential loans 52,371 54,882 64,404 63,007 60,734 -138 1,122 10,862 4,754 35,632Home equit y, credit card receivables, auto, and other consumer loans 1, 296 1,360 1,417 1,455 571 1270 0 6 21 1, 269Commercial and industrial loans 70 147 102 379 455 - 846 0 43 10 16All o ther loans , leases, and o ther assets 55,111 54,922 54,961 53,860 53,588 2 8 0 53 119 54,939
Total sold and not securitized 108,847 111,310 120,885 118,701 115,349 -56 1,122 10,965 4,904 91,856
Maximum Credit Exposure by Asset Type1-4 family residential loans 12,707 12,996 13,519 15,315 14,720 -137 110 1,805 2,635 8,156Home equity, credit card receivables, auto, and other consumer loans 188 192 193 190 28 5714 0 3 5 179Commercial and industrial loans 53 127 81 90 77 -31 2 0 33 10 9All o ther loans , leases, and o ther assets 13 ,789 13 ,513 13 ,420 13 ,115 12 ,969 6 3 0 38 17 13 ,733
Total credit exposure 26,735 26,828 27,213 28,711 27,793 -38 110 1,880 2,667 22,078
Support for Securitization Facilities Sponsored by Other I nstitutionsNumber of institutions reporting securitization facilities sponsored by others 158 159 164 168 155 19 20 87 35 16Total credit exposure 44,284 38,047 38,595 38,210 37,384 185 23 258 142 43,861
Total unused liquidit y commitments 593 632 626 514 547 84 0 0 0 593
OtherAssets serviced for others** 5,637,315 5,755,677 5,748,104 5,783,312 5,892,026 -43 3,933 89,962 103,404 5,440,016Asset-backed commercial paper conduits
Cr ed it exp osur e to c on dui ts sp on sor ed by i nst it ut io ns and other s 11,4 84 10,10 9 9,895 10,00 9 11,63 9 -13 4 1 50 11,428Unused liquidity commitments to conduits sponsored by institutions
and others
71,757
70,504
61,988
60,991
74,285
-34
00
1,102
70,655
Net servicing income ( for the quarter) -1,652 2,447 4,339 4,792 2,963 -1558 34 108 41 -1,835Net securitization income (for the quar ter) 179 138 99 148 165 85 0 6 4 169Total cre di t ex po sure t o T ier 1 ca pi ta l (%)** * 630 5 9 0 6 0 0 6 3 0 620 080 190 200 770
* Line item titled All other loans and all leases for quarters prior to March 31, 2006** The amount of financial assets serviced for others, other than closed-end 1-4 family residential mortgages, is reported when these assets are greater than $10 million*** Total credit exposure includes the sum of the three line items titled Total credit exposure reported above
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FDIC Quarterly 14 2011, Volume5, No. 4
Total assets of the 7,436 FDIC-insured institutionsincreased by 1.5 percent ($207.1 billion) during thirdquarter 2011. Total deposits increased by 2.4 percent($234.5 billion), domestic office deposits increased by3.4 percent ($279.5 billion), and foreign office depositsdecreased by 2.9 percent ($45 billion). Domestic nonin-terest-bearing deposits increased by 9.5 percent ($182.2billion) and savings deposits and interest-bearing check-ing accounts increased by 3 percent ($133.4 billion),while domestic time deposits decreased by 1.9 percent
($36.1 billion). For the 12 months ending September30, total domestic deposits grew by 9.9 percent ($767.0billion), with interest-bearing deposits increasing by4.6 percent ($280.2 billion) and noninterest-bearingdeposits rising by 30.3 percent ($486.8 billion).1 Foreigndeposits fell by 2.6 percent and other borrowed fundsdeclined by 21.0 percent over the same period.2
At the end of the third quarter, domestic depositsfunded 61.6 percent of industry assets, the largest sharesince the first quarter of 1996, when domestic depositsfunded 62.1 percent of assets. Insured institutions had$2.1 trillion in domestic noninterest-bearing deposits onSeptember 30, 2011, 67 percent of which ($1.4 trillion)was in noninterest-bearing transaction accounts largerthan $250,000. Of this total, $1.2 trillion exceeded thebasic coverage limit of $250,000 per account, but is fullyinsured until the end of 2012.3 Deposits receiving the
1 Throughout the insurance fund discussion, FDIC-insured institutionsinclude insured commercial banks and savings associations and,except where noted, exclude insured branches of foreign banks.2 Other borrowed funds include federal funds purchased, securitiessold under agreement to repurchase, FHLB advances, other borrowedmoney, mortgage indebtedness, obligations under capitalized leases,trading liabilities, less revaluation losses on assets held in trading
accounts.3 The Dodd-Frank Wall Street Reform and Consumer Protection Act(Dodd-Frank), enacted on July 21, 2010, provides temporary unlimiteddeposit insurance coverage for noninterest-bearing transaction accountsfrom December 31, 2010, through December 31, 2012, regardless ofthe balance in the account and the ownership capacity of the funds. Theunlimited coverage is available to all depositors, including consumers,businesses and government entities. The coverage is separate from, andin addition to, the insurance coverage provided for a depositors otheraccounts held at an FDIC-insured bank.
temporary coverage funded 4 percent of assets at bankswith less than $10 billion in total assets and 10.1percent of assets at banks with more than $10 billion inassets. The total amount receiving temporary coverageincreased by 16.6 percent ($174.3 billion) during thethird quarter, following growth of 17.2 percent ($153.7billion) during the second quarter. The following tableshows the distribution of accounts receiving unlimitedcoverage on noninterest-bearing transaction accountsby institution asset size.
Total estimated insured deposits increased by 3.6percent in the quarter ending September 30, and roseby a total of 25 percent over the past four quarters.4 Thelarge four-quarter increase was primarily attributable tothe additional temporary coverage of noninterest-bear-ing transaction accounts authorized by the Dodd-FrankAct. For institutions existing at the start and the end ofthe most recent quarter, insured deposits increasedduring the quarter at 4,250 institutions (57 percent),decreased at 3,153 institutions (42 percent), andremained unchanged at 29 institutions.
The condition of the Deposit Insurance Fund (DIF)continues to improve. The DIF increased by $3.9 billionduring third quarter 2011 to $7.8 billion (unaudited), theseventh consecutive quarterly increase. Assessmentincome of $3.6 billion and a $763 million negative provi-sion for insurance losses were the primary contributors tothe improvement in the DIF balance. Interest earnings,combined with other net revenue, increased the fund byanother $113 million. Operating expenses and unrealizedlosses on available-for-sale securities reduced the fundbalance by $621 million. For the first three quarters of2011, 74 insured institutions failed, with combined assets
of $30.4 billion, at a current estimated cost to the DIF of$6.4 billion. The DIFs reserve ratio was 0.12 percent onSeptember 30, 2011, up from 0.06 percent at June 30,2011, and negative 0.15 percent four quarters ago.
4 Figures for estimated insured deposits in this discussion includeinsured branches of foreign banks, in addition to insured commercialbanks and savings institutions.
Insured Deposits Grow by 3.6 Percent
DIF Reserve Ratio Rises 6 Basis Points to 0.12 Percent
26 Institutions Fail During Third Quarter
$1.2 Trillion Temporarily Insured in Noninterest-Bearing Transaction Accounts
INSURANCE FUND INDICATORS
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Quarterly Banking Profile
Dodd-Frank requires that, for at least five years, theFDIC must make available to the public the reserveratio and the DRR using both estimated insured depos-its and the new assessment base. As of September 30,2011, the FDIC reserve ratio would have been 0.07percent using the new assessment base (compared with0.12 percent using estimated insured deposits), and the
2 percent DRR using estimated insured deposits wouldhave been 1.1 percent using the new assessment base.
Author: Kevin Brown, Sr. Financial Analyst
Division of Insurance and Research(202) 898-6817
Effective April 1, 2011, the deposit insurance assess-ment base changed to average consolidated total assetsminus average tangible equity.5 Revisions to insuranceassessment rates and risk-based pricing rules for largebanks (banks with assets greater than $10 billion) alsobecame effective on that date. The Fourth Quarter2010 Quarterly Banking Profile includes a more
detailed explanation of these changes. Table 2 showsthe distribution of the assessment base as of September30, 2011, by institution asset size category.
5 There is an additional adjustment to the assessment base for bank-ers banks and custodial banks, as permitted under Dodd-Frank.
Table 1
Insured Commercial Banks and Savings Institutions as of September 30, 2011Distribution of Noninterest-Bearing Domestic Deposits, by Asset Size
Asset SizeNumber ofInstitutions
Total Assets($ Bil.)
Dodd-FrankDomestic Noninterest-Bearing Transaction Accounts
Larger than $250,000 OtherNoninterest-
BearingDeposits*
($ Bil.)Total
($ Bil.)
Amount abovethe $250,000
Coverage Limit($ Bil.)
AverageAccount
Size($000)
AverageNumber of
Accounts perInstitution
Less than $1 Billion 6,769 $1,416.3 $64.9 $41.4 $691 14 $116.2$1 - $10 Billion 561 1,425.5 96.8 71.6 961 180 79.7$10 - $50 Billion 69 1,325.7 114.5 94.6 1,441 1,152 57.9$50 - $100 Billion 18 1,275.9 106.1 91.5 1,821 3,237 48.1Over $100 Billion 19 8,364.3 1,016.4 922.6 2,709 19,751 394.2Total 7,436 13,807.7 1,398.7 1,221.8 1,977 95 696.0
June 30, 2011 7,513 13,600.6 1,214.9 1,047.5 1,814 89 697.6
March 31, 2011 7,574 13,414.7 1,053.3 893.8 1,651 84 694.0
December 31, 2010 7,658 13,319.4 1,015.7 858.9 1,619 82 673.8* Includes noninterest-bearing transaction accounts smaller than $250,000 and noninterest-bearing deposits not classified as transaction accounts.
Table 2
Distribution of the Assessment Base for FDIC-Insured Institutions*by Asset Size
Data as of September 30, 2011
Asset SizeNumber ofInstitutions
Percent ofTotal Institutions
Assessment Base**($ Bil.)
Percent ofBase
Less than $1 Billion 6,769 91.0% $1,260 10.5%$1 - $10 Billion 561 7.5% 1,262 10.5%$10 - $50 Billion 69 0.9% 1,156 9.7%$50 - $100 Billion 18 0.2% 1,099 9.2%
Over $100 Billion 19 0.3% 7,188 60.1%Total 7,436 100.0% 11,966 100.0%* Excludes insured U.S. branches of foreign banks.
** Average consolidated total assets minus average tangible equity, with adjustments for bankers banks and custodial banks.
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FDIC Quarterly 17 2011, Volume5, No. 4
Quarterly Banking Profile
Table III-B. Estimated FDIC-Insured Deposits by Type of Institution(dollar figures in millions)
September 30, 2011Number ofInstitutions
TotalAssets
DomesticDeposits*
Est. InsuredDeposits
Commercial Banks and Savings Institutions
FDIC-Insured Commercial Banks 6,352 $12,559,925 $7,582,210 $5,938,580
FDIC-Supervised 4,193 1,982,314 1,512,331 1,223,555
OCC-Supervised 1,333 8,726,560 4,925,783 3,812,667
Federal Reserve-Supervised 826 1,851,051 1,144,096 902,358
FDIC-Insured Savings Inst itut ions 1,084 1,247,758 922,911 818,470
OCC-Supervised Savings Inst itutions 636 923,258 678,013 602,752
FDIC-Supervised Savings Inst itutions 448 324,500 244,897 215,718
Total Commercial Banks and Savings Institutions 7,436 13,807,683 8,505,121 6,757,050
Other FDIC-Insured Institutions
US Branches of Foreign Banks 9 35,457 21,407 20,277
Total FDIC-Insured Institutions 7,445 13,843,141 8,526,528 6,777,327
* Excludes $15 trillion in foreign office deposits, which are uninsured
Table IV-B. Distribution of Institutions and Assessment Base by Assessment Rate RangeQuarter Ending June 30, 2011 (dollar figures in billions)
Annual Rate in Basis PointsNumber ofInstitutions
Percent of TotalInstitutions
Amount ofAssessment Base*
Percent of TotalAssessment Base
250-500 1,077 1432 $941 791
501-750 2,075 2759 1,165 980
751-1000 2,074 2757 3,529 2968
1001-1500 1,297 1724 4,962 4173
1501-2000 111 148 553 465
2001-2500 670 891 540 454
2501-3000 32 043 87 0733001-3500 152 202 76 064
greater than 3500 34 045 38 032
* Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, asrequired by the Dodd-Frank Act
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FDIC Quarterly 18 2011, Volume5, No. 4
All asset and liability figures used in calculating performanceratios represent average amounts for the period (beginning-of-period amount plus end-of-period amount plus any interimperiods, divided by the total number of periods). For pooling-of-interest mergers, the assets of the acquired institution(s)are included in average assets since the year-to-date incomeincludes the results of all merged institutions. No adjustmentsare made for purchase accounting mergers. Growth rates
represent the percentage change over a 12-month period intotals for institutions in the base period to totals for institu-tions in the current period.
All data are collected and presented based on the location ofeach reporting institutions main office. Reported data mayinclude assets and liabilities located outside of the reportinginstitutions home state. In addition, institutions may relocateacross state lines or change their charters, resulting in aninter-regional or inter-industry migration, e.g., institutionscan move their home offices between regions, and savingsinstitutions can convert to commercial banks or commercialbanks may convert to savings institutions.
ACCOUNTING CHANGESGoodwill Impairment Testing In September 2011, the FASBissued Accounting Standards Update (ASU) No. 2011-08,Testing Goodwill for Impairment, to address concerns aboutthe cost and complexity of the existing goodwill impairmenttest in ASC Topic 350, Intangibles-Goodwill and Other(formerly FASB Statement No. 142, Goodwill and OtherIntangible Assets). The ASUs amendments to ASCTopic 350 will be effective for annual and interim goodwillimpairment tests performed for fiscal years beginning afterDecember 15, 2011 (i.e., for annual or interim tests performedon or after January 1, 2012, for institutions with a calendaryear fiscal year). Early adoption of the ASU is permitted.Under ASU 2011-08, an institution has the option of firstassessing qualitative factors to determine whether it is neces-sary to perform the two-step quantitative goodwill impair-ment test described in ASC Topic 350. If, after considering
all relevant events and circumstances, an institution deter-mines it is unlikely (that is, a likelihood of 50 percent or less)that the fair value of a reporting unit is less than its carryingamount (including goodwill), then the institution does notneed to perform the two-step goodwill impairment test. If theinstitution instead concludes that the opposite is true (that is,it is likely that the fair value of a reporting unit is less than itscarrying amount), then it is required to perform the first stepand, if necessary, the second step of the two-step goodwillimpairment test. Under ASU 2011-08, an institution maychoose to bypass the qualitative assessment for any reportingunit in any period and proceed directly to performing the firststep of the two-step goodwill impairment test.
Extended Net Operating Loss Carryback Period The Worker,Homeownership, and Business Assistance Act of 2009, which
was enacted on November 6, 2009, permits banks and otherbusinesses, excluding those banking organizations thatreceived capital from the U.S. Treasury under the TroubledAsset Relief Program, to elect a net operating loss carrybackperiod of three, four, or five years instead of the usual carry-back period of two years for any one tax year ending afterDecember 31, 2007, and beginning before January 1, 2010.For calendar-year banks, this extended carryback periodapplies to either the 2008 or 2009 tax year. The amount of
Notes to UsersThis publication contains financial data and other informa-tion for depository institutions insured by the Federal DepositInsurance Corporation (FDIC). These notes are an integralpart of this publication and provide information regardingthe comparability of source data and reporting differencesover time.
Tables I-A through VIII-A.The information presented in Tables I-A through V-A ofthe FDIC Quarterly Banking Profile is aggregated for all FDIC-insured institutions, both commercial banks and savings insti-tutions. Tables VI-A (Derivatives) and VII-A (Servicing,Securitization, and Asset Sales Activities) aggregate informa-tion only for insured commercial banks and state-charteredsavings banks that file quarterly Call Reports. Table VIII-A(Trust Services) aggregates Trust asset and income informa-tion collected annually from all FDIC-insured institutions.Some tables are arrayed by groups of FDIC-insured institu-tions based on predominant types of asset concentration,while other tables aggregate institutions by asset size and geo-graphic region. Quarterly and full-year data are provided for
selected indicators, including aggregate condition and incomedata, performance ratios, condition ratios, and structuralchanges, as well as past due, noncurrent, and charge-off infor-mation for loans outstanding and other assets.
Tables I-B through IV-B.A separate set of tables (Tables I-B through IV-B) providescomparative quarterly data related to the Deposit InsuranceFund (DIF), problem institutions, failed/assisted institutions,estimated FDIC-insured deposits, as well as assessment rateinformation. Depository institutions that are not insured bythe FDIC through the DIF are not included in the FDICQuarterly Banking Profile. U.S. branches of institutions head-quartered in foreign countries and non-deposit trust compa-nies 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 avail-able for institutions that have closed or converted theircharters.
DATA SOURCESThe financial information appearing in this publication isobtained primarily from the Federal Financial InstitutionsExamination Council (FFIEC) Consolidated Reports ofCondition and Income (Call Reports) and the OTS ThriftFinancial Reports submitted by all FDIC-insured depositoryinstitutions. This information is stored on and retrieved fromthe FDICs Research Information System (RIS) database.
COMPUTATION METHODOLOGYParent institutions are required to file consolidated reports,while their subsidiary financial institutions are still requiredto file separate reports. Data from subsidiary institutionreports are included in the Quarterly Banking Profile tables,which can lead to double-counting. No adjustments are madefor any double-counting of subsidiary data. Additionally,certain adjustments are made to the OTS Thrift FinancialReports to provide closer conformance with the reporting andaccounting requirements of the FFIEC Call Reports.
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ASC Topic 715 (formerly FASB Statement No. 158 EmployersAccounting for Defined Benefit Pension and Other PostretirementPlans) issued in September 2006, requires a bank to recog-nize in 2007, and subsequently, the funded status of its post-retirement plans on its balance sheet. An overfunded plan isrecognized as an asset and an underfunded plan is recognizedas a liability. An adjustment is made to equity as accumulatedother comprehensive income (AOCI) upon application ofFAS 158, and AOCI is adjusted in subsequent periods as netperiodic benefit costs are recognized in earnings.
ASC Topic 860 (formerly FASB Statement No. 156 Accounting forServicing of Financial Assets) refer to previously publishedQuarterly Banking Profile notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html.
ASC Topic 815 (formerly FASB Statement No. 155 Accounting forCertain Hybrid Financial Instruments) refer to previously pub-lished Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html.
Purchased Impaired Loans and Debt Securities ASC Topic 310(formerly Statement of Position 03-3, Accounting for Certain Loansor Debt Securities Acquired in a Transfer) The SOP applies toloans and debt securities acquired in f iscal years beginning
after December 15, 2004. In general, this Statement ofPosition applies to purchased impaired loans and debt securi-ties (i.e., loans and debt securities that a bank has purchased,including those acquired in a purchase business combination,when it is probable, at the purchase date, that the bank willbe unable to collect all contractually required paymentsreceivable). Banks must follow Statement of Position 03-3 forCall Report purposes. The SOP does not apply to the loansthat a bank has originated, prohibits carrying over or cre-ation of valuation allowances in the initial accounting, andany subsequent valuation allowances reflect only those lossesincurred by the investor after acquisition.
GNMA Buy-back Option If an issuer of GNMA securities hasthe option to buy back the loans that collateralize theGNMA securities, when certain delinquency criteria are met,
ASC Topic 860 (formerly FASB Statement No. 140) requiresthat loans with this buy-back option must be brought back onthe issuers books as assets. The rebooking of GNMA loans isrequired regardless of whether the issuer intends to exercisethe buy-back option. The banking agencies clarified in May2005 that all GNMA loans that are rebooked because ofdelinquency should be reported as past due according to theircontractual terms.
ASC Topics 860 & 810 (formerly FASB Statements 166 & 167) In June 2009, the FASB issued Statement No. 166,Accounting for Transfers of Financial Assets (FAS 166), andStatement No. 167, Amendments to FASB Interpretation
No. 46(R) (FAS 167), which change the way entities accountfor securitizations and special purpose entities. FAS 166revised FASB Statement No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments ofLiabilities, by eliminating the concept of a qualifying special-purpose entity, creating the concept of a participating inter-est, changing the requirements for derecognizing financialassets, and requiring additional disclosures. FAS 167 revisedFASB Interpretation No. 46(R), Consolidation of VariableInterest Entities, by changing how a bank or other companydetermines when an entity that is insufficiently capitalized or
determine whether the impairment is other-than-temporary,an institution must apply the applicable accounting guidance refer to previously published Quarterly Banking Profile notes:http://www2.fdic.gov/qbp/2011mar/qbpnot.html.
ASC Topic 805 (formerly Business Combinations and Noncontrolling(Minority) Interests) In December 2007, the FASB issuedStatement No. 141 (Revised), Business Combinations FAS
141(R)), and Statement No. 160,Noncontrolling Interests inConsolidated Financial Statements (FAS 160). Under FAS141(R), all business combinations, including combinations ofmutual entities, are to be accounted for by applying the acqui-sition method. FAS 160 defines a noncontrolling interest,also called a minority interest, as the portion of equity in aninstitutions subsidiary not attributable, directly or indirectly,to the parent institution. FAS 160 requires an institution toclearly present in its consolidated financial statements theequity ownership in and results of its subsidiaries that areattributable to the noncontrolling ownership interests inthese subsidiaries. FAS 141(R) applies prospectively to busi-ness combinations for which the acquisition date is on orafter the beginning of the first annual reporting period begin-ning on or after December 15, 2008. Similarly, FAS 160 iseffective for fiscal years beginning on or after December 15,2008. Thus, for institutions with calendar-year fiscal years,these two accounting standards take effect in 2009. Beginningin March 2009, Institution equity capital and Noncontrollinginterests are separately reported in arriving at Total equitycapital and Net income.
ASC Topic 820 (formerly FASB Statement No. 157 Fair ValueMeasurementsissued in September 2006) and ASC Topic 825(formerly FASB Statement No. 159 The Fair Value Option forFinancial Assets and Financial Liabilities)issued in February 2007 both are effective in 2008 with early adoption permitted in2007. FAS 157 defines fair value and establishes a frameworkfor developing fair value estimates for the fair value measure-ments that are already required or permitted under other stan-dards. FASB FSP 157-4, issued in April 2009, providesadditional guidance for estimating fair value in accordancewith FAS 157 when the volume and level of activity for theasset or liability have significantly decreased. The FSP alsoincludes guidance on identifying circumstances that indicatea transaction is not orderly. The FSP is effective for interimand annual reporting periods ending after June 15, 2009,with early adoption permitted for periods ending afterMarch 15, 2009.
Fair value continues to be used for derivatives, trading securi-ties, and available-for-sale securities. Changes in fair value gothrough earnings for trading securities and most derivatives.Changes in the fair value of available-for-sale securities arereported in other comprehensive income. Available-for-salesecurities and held-to-maturity debt securities are writtendown to fair value if impairment is other than temporary andloans held for sale are reported at the lower of cost or fairvalue.
FAS 159 allows institutions to report certain financial assetsand liabilities at fair value with subsequent changes in fairvalue included in earnings. In general, an institution mayelect the fair value option for an eligible financial asset or lia-bility when it first recognizes the instrument on its balancesheet or enters into an eligible firm commitment.
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Quarterly Banking Profile
DEFINITIONS (in alphabetical order)All other assets total cash, balances due from depositoryinstitutions, premises, fixed assets, direct investments in realestate, investment in unconsolidated subsidiaries, customersliability on acceptances outstanding, assets held in tradingaccounts, federal funds sold, securities purchased with agree-ments to resell, fair market value of derivatives, prepaid
deposit insurance assessments, and other assets.All other liabilities banks liability on acceptances, limited-lifepreferred stock, allowance for estimated off-balance-sheet cred-it losses, fair market value of derivatives, and other liabilities.
Assessment base effective April 1, 2011, the deposit insur-ance assessment base has changed to average consolidatedtotal assets minus average tangible equity with an additionaladjustment to the assessment base for bankers banks and cus-todial banks, as permitted under Dodd-Frank. Previously theassessment base was assessable deposits and consisted of DIFdeposits (deposits insured by the FDIC Deposit InsuranceFund) in banks domestic offices with certain adjustments.
Assets securitized and sold total outstanding principal balanceof assets securitized and sold with servicing retained or otherseller- provided credit enhancements.
Capital Purchase Program (CPP) As announced in October2008 under the TARP, the Treasury Department purchase ofnoncumulative perpetual preferred stock and related warrantsthat is treated as Tier 1 capital for regulatory capital purposesis included in Total equity capital. Such warrants to pur-chase common stock or noncumulative preferred stock issuedby publicly-traded banks are reflected as well in Surplus.Warrants to purchase common stock or noncumulative pre-ferred stock of not-publicly-traded bank stock classified in abanks balance sheet as Other liabilities.
Construction and development loans includes loans for all prop-erty types under construction, as well as loans for land acqui-sition and development.
Core capital common equity capital plus noncumulative per-
petual preferred stock plus minority interest in consolidatedsubsidiaries, less goodwill and other ineligible intangibleassets. The amount of eligible intangibles (including servicingrights) included in core capital is limited in accordance withsupervisory capital regulations.
Cost of funding earning assets total interest expense paid ondeposits and other borrowed money as a percentage of averageearning assets.
Credit enhancements techniques whereby a company attemptsto reduce the credit risk of its obligations. Credit enhance-ment may be provided by a third party (external creditenhancement) or by the originator (internal credit enhance-ment), and more than one type of enhancement may be asso-ciated with a given issuance.
Deposit Insurance Fund (DIF) the Bank (BIF) and SavingsAssociation (SAIF) Insurance Funds were merged in 2006 bythe Federal Deposit Insurance Reform Act to form the DIF.
Derivatives notional amount the notional, or contractual,amounts of derivatives represent the level of involvement inthe types of derivatives transactions and are not a quantifica-tion of market risk or credit risk. Notional amounts representthe amounts used to calculate contractual cash flows to beexchanged.
is not controlled through voting or similar rights, i.e., a vari-able interest entity (VIE), should be consolidated. UnderFAS 167, a bank must perform a qualitative assessment todetermine whether its variable interest or interests give it acontrolling financial interest in a VIE. If a banks variableinterest or interests provide it with the power to direct themost significant activities of the VIE, and the right to receivebenefits or the obligation to absorb losses that could poten-
tially be significant to the VIE, the bank is the primary bene-ficiary of, and therefore must consolidate, the VIE.
Both FAS 166 and FAS 167 take effect as of the beginning ofeach banks first annual reporting period that begins after
November 15, 2009, for interim periods therein, and for inter-im and annual reporting periods thereafter (i.e., as of January1, 2010, for banks with a calendar year fiscal year). Earlierapplication is prohibited. Banks are expected to adopt FAS166 and FAS 167 for Call Report purposes in accordance withthe effective date of these two standards. Also, FAS 166 hasmodified the criteria that must be met in order for a transfer ofa portion of a financial asset, such as a loan participation, toqualify for sale accounting. These changes apply to transfers ofloan participations on or after the effective date of FAS 166.Therefore, banks with a calendar year fiscal year must accountfor transfers of loan participations on or after January 1, 2010,in accordance with FAS 166. In general, loan participationstransferred before the effective date of FAS 166 (January 1,2010, for calendar year banks) are not affected by this newaccounting standard and pre-FAS 166 participations that wereproperly accounted for as sales under FASB Statement No.140 will continue to be reported as having been sold.
ASC Topic 740 (formerly FASB Interpretation No. 48 on UncertainTax Positions) refer to previously published Quarterly BankingProfile notes: http://www2.fdic.gov/qbp/2011mar/qbpnot.html.
ASC Topic 718 (formerly FASB Statement No. 123 (Revised 2004)and Share-Based Payments refer to previously publishedQuarterly Banking Profile notes: http://www2.fdic.gov/qbp/2008dec/qbpnot.html.
ASC Topic 815 (formerly FASB Statement No. 133 Accounting forDerivative Instruments and Hedging Activities) refer to previ-ously published Quarterly Banking Profile notes: http://www2.fdic.gov/qbp/2008dec/qbpnot.html.
Accounting Standards Codification In June 2009, the FASBissued Statement No. 168, The FASB Accounting StandardsCodification and the Hierarchy of Generally Accepted
Accounting Principles (FAS 168), to establish the FASBCodification as the single source of authoritative nongovern-mental U.S. generally accepted accounting principles (U.S.GAAP). The FASB Codification reorganizes existing U.S.accounting and reporting standards issued by the FASB andother related private-sector standard setters, and all guidancecontained in the FASB Codification carries an equal level ofauthority. All previously existing accounting standards docu-
ments are superseded as described in FAS 168. All otheraccounting literature not included in the FASB Codificationis nonauthoritative. The FASB Codification can be accessedat http://asc.fasb.org/.
The FASB Codification is effective for interim and annualperiods ending after September 15, 2009.
This an FFIEC reference guide at http://www.ffiec.gov/pdf/ffiec_forms/CodificationIntroduction_201006.pdf.
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FDIC Quarterly 22 2011, Volume5, No. 4
bearing transaction accounts are fully insured, without limit,from December 31, 2010, through December 31, 2012.
Failed/assisted institutions an institution fails when regulatorstake control of the institution, placing the assets and liabili-ties into a bridge bank, conservatorship, receivership, oranother healthy institution. This action may require theFDIC to provide funds to cover losses. An institution is
defined as assisted when the institution remains open andreceives assistance in order to continue operating.
Fair Value the valuation of various assets and liabilities onthe balance sheetincluding trading assets and liabilities,available-for-sale securities, loans held for sale, assets andliabilities accounted for under the fair value option, and fore-closed assetsinvolves the use of fair values. During periodsof market stress, the fair values of some financial instrumentsand nonfinancial assets may decline.
FHLB advances all borrowings by FDIC insured institutionsfrom the Federal Home Loan Bank System (FHLB), asreported by Call Report filers and by TFR filers.
Goodwill and other intangibles intangible assets includeservicing rights, purchased credit card relationships, and otheridentifiable intangible assets. Goodwill is the excess of the
purchase price over the fair market value of the net assetsacquired, less subsequent impairment adjustments. Otherintangible assets are recorded at fair value, less subsequentquarterly amortization and impairment adjustments.
Loans secured by real estate includes home equity loans,junior liens secured by 1-4 family residential properties, andall other loans secured by real estate.
Loans to individuals includes outstanding credit card balancesand other secured and unsecured consumer loans.
Long-term assets (5+ years) loans and debt securities withremaining maturities or repricing intervals of over five years.
Maximum credit exposure the maximum contractual creditexposure remaining under recourse arrangements and otherseller-provided credit enhancements provided by the report-
ing bank to securitizations.Mortgage-backed securities certificates of participation inpools of residential mortgages and collateralized mortgageobligations issued or guaranteed by government-sponsored orprivate enterprises. Also, see Securities, below.
Net charge-offs total loans and leases charged off (removedfrom balance sheet because of uncollectibility), less amountsrecovered on loans and leases previously charged off.
Net interest margin the difference between interest and divi-dends earned on interest-bearing assets and interest paid todepositors and other creditors, expressed as a percentage ofaverage earning assets. No adjustments are made for interestincome that is tax exempt.
Net loans to total assets loans and lease f inancing receiv-
ables, net of unearned income, allowance and reserves, as apercent of total assets on a consolidated basis.
Net operating income income excluding discretionary transac-tions such as gains (or losses) on the sale of investment secu-rities and extraordinary items. Income taxes subtracted fromoperating income have been adjusted to exclude the portionapplicable to securities gains (or losses).
Derivatives credit equivalent amount the fair value of thederivative plus an additional amount for potential future cred-it exposure based on the notional amount, the remainingmaturity and type of the contract.
Derivatives transaction types:Futures and forward contracts contracts in which the buyeragrees to purchase and the seller agrees to sell, at a speci-
fied future date, a specific quantity of an underlying vari-able or index at a specified price or yield. These contractsexist for a variety of variables or indices, (traditional agri-cultural or physical commodities, as well as currencies andinterest rates). Futures contracts are standardized and aretraded on organized exchanges which set limits on coun-terparty credit exposure. Forward contracts do not havestandardized terms and are traded over the counter.
Option contracts contracts in which the buyer acquires theright to buy from or sell to another party some specifiedamount of an underlying variable or index at a stated price(strike price) during a period or on a specified future date,in return for compensation (such as a fee or premium).The seller is obligated to purchase or sell the variable orindex at the discretion of the buyer of the contract.
Swaps obligations between two parties to exchange aseries of cash flows at periodic intervals (settlement dates),for a specified period. The cash flows of a swap are eitherfixed, or determined for each settlement date by multiply-ing the quantity (notional principal) of the underlyingvariable or index by specified reference rates or prices.Except for currency swaps, the notional principal is usedto calculate each payment but is not exchanged.
Derivatives underlying risk exposure the potential exposurecharacterized by the level of banks concentration in particu-lar underlying instruments, in general. Exposure can resultfrom market risk, credit risk, and operational risk, as well as,interest rate risk.
Domestic deposits to total assets total domestic office deposits
as a percent of total assets on a consolidated basis.Earning assets all loans and other investments that earninterest or dividend income.
Efficiency ratio Noninterest expense less amortization ofintangible assets as a percent of net interest income plus non-interest income. This ratio measures the proportion of netoperating revenues that are absorbed by overhead expenses,so that a lower value indicates greater efficiency.
Estimated insured deposits in general, insured deposits aretotal domestic deposits minus estimated uninsured deposits.Beginning March 31, 2008, for institutions that file CallReports, insured deposits are total assessable deposits minusestimated 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
FDICs standard maximum deposit insurance amount(SMDIA). The Dodd-Frank Wall Street Reform andConsumer Protection Act enacted on July 21, 2010, madepermanent the standard maximum deposit insurance amount(SMDIA) of $250,000. Also, the Dodd-Frank Act amendsthe Federal Deposit Insurance Act to include noninterest-bearing transaction accounts as a new temporary depositinsurance account category. All funds held in noninterest-
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FDIC Quarterly 23 2011, Volume5, No. 4
Quarterly Banking Profile
Risk-based capital groups definition:
(Percent)
TotalRisk-Based
Capital*
Tier 1Risk-Based
Capital*Tier 1
LeverageTangible
Equity
Well-capitalized 10 and 6 and 5
Adequatelycapitalized 8 and 4 and 4
Undercapitalized 6 and 3 and 3
Significantlyundercapitalized
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FDIC Quarterly 24 2011, Volume5, No. 4
Prepaid Deposit Insurance Assessments In November 2009, theFDIC Board of Directors adopted a final rule requiring insureddepository institutions (except those that are exempted) toprepay their quarterly risk-based deposit insurance assessmentsfor the fourth quarter of 2009, and for all of 2010, 2011, and2012, on December 30, 2009. Each institutions regular risk-based deposit insurance assessment for the third quarter of2009, which is paid in arrears, also was payable on December30, 2009. For regulatory capital purposes, an institution mayassign a zero-percent risk weight to the amount of its prepaiddeposit assessment asset.
Risk-weighted assets assets adjusted for risk-based capitaldefinitions which include on-balance-sheet as well as off-bal-ance-sheet items multiplied by risk-weights that range fromzero to 200 percent. A conversion factor is used to assign abalance sheet equivalent amount for selected off-balance-sheet accounts.
Securities excludes securities held in trading accounts.Banks securities portfolios consist of securities designated asheld-to-maturity, which are reported at amortized cost(book value), and securities designated as available-for-sale,reported at fair (market) value.
Securities gains (losses) realized gains (losses) on held-to-maturity and available-for-sale securities, before adjustmentsfor income taxes. Thrift Financial Report (TFR) filers alsoinclude gains (losses) on the sales of assets held for sale.
Sellers interest in institutions own securitizations the reportingbanks ownership interest in loans and other assets that havebeen securitized, except an interest that is a form of recourseor other seller-provided credit enhancement. Sellers interestsdiffer from the securities issued to investors by the securitiza-tion structure. The principal amount of a sellers interest isgenerally equal to the total principal amount of the pool ofassets included in the securitization structure less the princi-pal amount of those assets attributable to investors, i.e., in theform of securities issued to investors.
Small Business Lending Fund The Small Business LendingFund (SBLF), which was enacted into law in September 2010as part of the Small Business Jobs Act of 2010, is a $30 billionfund that encourages lending to small businesses by providingcapital to qualified community institutions with assets of lessthan $10 billion. The U.S. Treasury Department is adminis-tering the SBLF Program (http://www.treasury.gov/resource-center/sb-programs/Pages/Small-Business-Lending-Fund.aspx).
Under the SBLF Program, the Treasury Department purchas-es noncumulative perpetual preferred stock from qualifyingdepository institutions and holding companies (other thanSubchapter S and mutual institutions). When this stock isissued by a depository institution, it is reported as Perpetualpreferred stock and related surplus. For regulatory capitalpurposes, this noncumulative perpetual preferred stock quali-fies as a component of Tier 1 capital. Qualifying SubchapterS corporations and mutual institutions issue unsecured subor-dinated debentures to the Treasury Department through theSBLF. Depository institutions that issue these report them asSubordinated notes and debentures. For regulatory capitalpurposes, the debentures are eligible for inclusion in an insti-tutions Tier 2 capital in accordance with their primary feder-al regulators capital standards.
to make a limited adjustment to an institutions total score(the large bank adjustment), which will be used to determinean institutions initial base assessment rate.
Effective April 1, 2011, the three possible adjustments to aninstitutions initial base assessment rate are as follows: (1)Unsecured Debt Adjustment: An institutions rate maydecrease by up to 5 basis points for unsecured debt. The unse-
cured debt adjustment cannot exceed the lesser of 5 basispoints or 50 percent of an institutions initial base assessmentrate (IBAR). Thus, for example, an institution with an IBARof 5 basis points would have a maximum unsecured debtadjustment of 2.5 basis points and could not have a total baseassessment rate lower than 2.5 basis points. (2) DepositoryInstitution Debt Adjustment: For institutions that hold long-term unsecured debt issued by another insured depositoryinstitution, a 50 basis point charge is applied to the amountof such debt held in excess of 3 percent of an institutionsTier 1 capital. (3) Brokered Deposit Adjustment: Rates forsmall institutions that are not in Risk Category I and for largeinstitutions that are not well capitalized or do not have acomposite CAMELS rating of 1 or 2 may increase (not toexceed 10 basis points) if their brokered deposits exceed 10percent of domestic deposits. After applying all possibleadjustments (excluding the Depository Institution DebtAdjustment), minimum and maximum total base assessmentrates for each risk category are as follows:
Total Base Assessment Rates*
RiskCategory
I
RiskCategory
II
RiskCategory
III
RiskCategory
IV
Large andHighly
ComplexInstitutions
Initial baseassessment rate
59 14 23 35 535
Unsecured debtadjustment
-4.50 -50 -50 -50 -50
Brokered deposit
adjustment
010 010 010 010
Total BaseAssessment rate
2.59 924 1833 3045 2.545
* All amounts for all categories are in basis points annuall y. Total base rates that are
not the minimum or maximum rate will vary between these rat es. Total base assess-
ment rates do not include the depository institution debt adjustment.
Beginning in 2007, each institution is assigned a risk-basedrate for a quarterly assessment period near the end of thequarter following the ass