FDIC Quarterly v3n2 Entire

8/14/2019 FDIC Quarterly v3n2 Entire

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FDIC Quarterly

Quarterly Banking Profile:First Quarter 2009

The FDICs Small-Dollar LoanPilot Program: A Case Study

after One Year Findings from the FDIC Survey

of Bank Efforts to Serve the Unbanked and Underbanked

2009, Volume 3, Number 2


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Chairman Sheila C. BairDirector, Division of Insurance Arthur J. Murton

and Research

Executive Editor Maureen E. Sweeney

Managing Editors Richard A. BrownDiane L. EllisPaul H. KupiecChristopher J. Newbury

Editor Kathy Zeidler

Publication Managers Peggi GillLynne Montgomery

Media Inquiries (202) 898-6993

The FDIC Quarterly is published by the Division of Insurance and Research of the Federal DepositInsurance Corporation and contains a comprehensive summary of the most current financial results forthe 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 Informa-tion Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. E-mail requests should besent to [email protected]. Change of address information also should be submitted to the PublicInformation Center.

The FDIC Quarterly is available on-line by visiting the FDIC Web site at www.fdic.gov. To receivee-mail notification of the electronic release of the FDIC Quarterly and the individual feature articles,subscribe at www.fdic.gov/about/subscriptions/index.html.


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2009, Volume 3, Number 2

FDIC Quarterly

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

The Federal Deposit Insurance Corporation Celebrates Its75th Year See page ii.

Quarterly Banking Profile: First Quarter 2009FDIC-insured institutions reported net income of $7.6 billion in the first quarter of 2009, a decline of $11.7 billion (60.8 percent) from the $19.3 billion that the industry earned in the first quarter of 2008. Higherloan-loss provisions, increased goodwill write-downs, and reduced income from securitization activities allcontributed to the year-over-year earnings decline. Three out of five insured institutions reported lower netincome in the first quarter and one in five was unprofitable. See page 1.

Insurance Fund IndicatorsEstimated insured deposits (based on the basic FDIC insurance limit of $100,000) increased by 1.7 percentin the first quarter of 2009. The Deposit Insurance Fund reserve ratio fell to 0.27 percent, and 21 FDIC-insured institutions failed during the quarter. See page 14.

Temporary Liquidity Guarantee ProgramThe FDIC Board approved the Temporary Liquidity Guarantee Program (TLGP) in response to majordisruptions in credit markets. The TLGP improves access to liquidity for participating institutions by fullyguaranteeing non-interest-bearing transaction deposit accounts and by guaranteeing eligible senior unsecureddebt. As of March 31, 2009, more than 86 percent of FDIC-insured institutions have opted in to the Trans-action Account Guarantee Program, and 8,102 eligible entities have elected the option to participate inthe Debt Guarantee Program. Approximately $700 billion in non-interest-bearing transaction accounts wasguaranteed as of March 31, 2009, and $336 billion in guaranteed senior unsecured debt, issued by 97 entities,was outstanding at the end of the first quarter. See page 19.

Feature Articles:

The FDICs Small-Dollar Loan Pilot Program: A Case Studyafter One YearThe FDICs Small-Dollar Loan Pilot Program is a two-year case study designed to identify best practices inaffordable small-dollar loan programs that can be replicated by other financial institutions. This article summa-rizes results from the first four quarters of the pilot, highlights factors that have contributed to the success of participating banks programs, and presents the most common small-dollar loan business models. See page 29.

Findings from the FDIC Survey of Bank Efforts to Serve the Unbanked and Underbanked This article summarizes key findings of the FDIC Survey of Bank Efforts to Serve the Unbanked and Underbanked. It is intended to inform bankers, policymakers, and researchers of the results of the survey and to outline stepsfor improving access to the mainstream financial system. See page 39.


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FDIC Q uarterly ii 2009, V olume 3, N o . 2

The Federal Deposit Insurance CorporationCelebrates Its 75th YearChairman Bair and the Federal Deposit Insurance Corporation(FDIC) officially launched the agencys 75th anniversary on June16, 2008. The Corporation is celebrating this milestone with acampaign to promote awareness of deposit insurance and coveragelimits, as well as to reinforce its ongoing commitment to consumersthrough an initiative to enhance financial literacy and improveconsumer savings. Please visit our 75th anni versary web site formore information at www.fdic.gov/anniversary.

The FDIC is an independent government agency that has been protecting Americanssavings for 75 years. Created in 1933, the FDIC pro motes public trust and confidence inthe U.S. banking system by insuring deposits.

The FDIC insures more than $4.8 trillion of deposits in over 8,200 U.S. banks and thriftsdeposits in virtually every bank and thrift in the country. Throughout our 75-year history,

no one has ever lost a penny of insured deposits as a result of a bank failure.

In addition to immediately responding to insured depositors when a bank fails, the FDICmonitors and addresses risks to the Deposit Insurance Fund, and directly supervises andexamines approximately 5,100 institutions that are not members of the Federal ReserveSystem. The FDICwith a staff of more than 5,300 employees nationwideis managed by afive-person Board of Directors, all of whom are appointed by the President and confirmedby the Senate, with no more than three being from the same political party. Sheila C. Bairheads this board as the 19th Chairman of the Federal Deposit Insurance Corporation.


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FDIC Q uarterly 1 2009, V olume 3, N o . 2

Quarterly Banking Profile First Quarter 2009

Highest Earnings in Four Quarters Are 61 PercentLower than a Year Ago

Sharply higher trading revenues at large banks helpedFDIC-insured institutions post an aggregate net profit of $7.6 billion in the first quarter of 2009. Realized gainson securities and other assets at a few large institutionsalso contributed to the quarters profits. First quarterearnings were $11.7 billion (60.8 percent) lower thanin the first quarter of 2008 but represented a significantrecovery from the $36.9 billion net loss the industryreported in the fourth quarter of 2008. 1 Provisions forloan and lease losses were lower than in the fourthquarter of 2008 but continued to rise on a year-over-year basis. The increase in loss provisions, higher

1 Amended financial reports received since the publication of thefourth quarter 2008Quarterly Banking Profile caused the industrysfourth-quarter net loss to widen from $32.1 billion to $36.9 billion.The amendments included higher expenses for goodwill impairmentand increased loan-loss provisions.

charges for goodwill impairment, and reduced incomefrom securitization activity were the primary causes of the year-over-year decline in industry net income.Evidence of earnings weakness was widespread in thefirst quarter; more than one out of every five institu-tions (21.6 percent) reported a net loss, and almostthree out of every five (59.3 percent) reported lower netincome than in the first quarter of 2008.

Loss Provisions Continue to Weigh Heavilyon EarningsInsured institutions set aside $60.9 billion in loan lossprovisions in the first quarter, an increase of $23.7billion (63.6 percent) from the first quarter of 2008.Almost two out of every three insured institutions(65.4 percent) increased their loss provisions. Goodwillimpairment charges and other intangible asset expensesrose to $7.2 billion from $2.8 billion a year earlier.Against these negative factors, total noninterest income

Net Income of $7.6 Billion Is Less than Half Year-Earlier Level Noninterest Income Registers Strong Rebound at Large Banks Aggressive Reserve Building Trails Growth in Troubled Loans Industry Assets Contract by $302 Billion Total Equity Capital Increases by $82.1 Billion

INSURED INSTITUTION PERFORMANCE

Industry Income Remains Well Below Normal

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

Securities and Other Gains/Losses, NetNet Operating Income

$ Billions

2004 2005 2006 2007 2008

-40

-30

-20

-10

0

10

20

30

40

50

31.8 31.2 32.5 31.034.0 33.2 34.7 32.6

36.9 38.0 38.1 35.3 35.6 36.8

28.7

0.6

19.3

4.8 0.9

-36.9

7.6

2009

Chart 1 Chart 2

4.4

7.8

1.9

23.7

6.4

0

5

10

15

20

25

Increase inNet Interest

Income

Increase inNoninterest

Income

Increase inRealized Gainson Securities

Increase inLoan LossProvision

Increase inNoninterest

Expense

1st Quarter 2009 vs. 1st Quarter 2008($ Billions)

Positive FactorsNegativeFactors

Loss Provisions Continue to Be the Most Signi cantFactor Affecting Industry Earnings

With great sadness we note the passing of L. William Seidman, Chairman of the FDIC from 1985 to 1991, and founder of theQuarterly Banking Profile. His wisdom and leadership through difficult times continue to inspire, as does his commitment toopenness, transparency, and an informed public.


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Chart 4

-10

0

10

20

30

4050

60

70

80

90

100

1 2 3 4 1 2 3 4 1 2 3 4 1

Quarterly Change in Noncurrent LoansQuarterly Net Charge-offs

Asset Quality Is Still Deteriorating$ Billions

2006 2007 2008 2009

4.2 6.610.6 13.3 12.0

15.3

26.2

44.0 45.8

55.5

49.4

83.2

97.1

contributed $68.3 billion to pretax earnings, a$7.8-billion (12.8 percent) improvement over the firstquarter of 2008. Net interest income was $4.4 billion(4.7 percent) higher, and realized gains on securitiesand other assets were up by $1.9 billion (152.6percent). The rebound in noninterest income stemmed

primarily from higher trading revenue at a few largebanks, but gains on loan sales and increased servicingfees also provided a boost to noninterest revenues.Trading revenues were $7.6 billion higher than a yearearlier, servicing fees were up by $2.4 billion, and real-ized gains on securities and other assets were $1.9billion higher. Nevertheless, these positive develop-ments were outweighed by the higher expenses for badloans and goodwill impairment. The average return onassets (ROA) was 0.22 percent, less than half the 0.58percent registered in the first quarter of 2008 and lessthan one-fifth the 1.20 percent ROA the industryenjoyed in the first quarter of 2007.

Lower Funding Costs Lift Large Bank MarginsFor the sixth consecutive quarter, falling interest ratescaused declines in both average funding costs and aver-age asset yields. The industrys average funding cost fellby more than its average asset yield in the quarter, andthe quarterly net interest margin (NIM) improved fromfourth quarter 2008 and first quarter 2008 levels. Theaverage NIM in the first quarter was 3.39 percent,compared to 3.34 percent in the fourth quarter of 2008and 3.33 percent in the first quarter of 2008. This is thehighest level for the industry NIM since the second

quarter of 2006. However, most of the improvementwas concentrated among larger institutions; more thanhalf of all institutions (55.4 percent) reported lower

NIMs compared to a year earlier, and almost two-thirds

(66.0 percent) had lower NIMs than in the fourth quar-ter of 2008. The average NIM at institutions with lessthan $1 billion in assets fell from 3.66 percent in thefourth quarter to 3.56 percent, a 21-year low.

Charge-Offs Continue to Rise in All MajorLoan CategoriesFirst-quarter net charge-offs of $37.8 billion wereslightly lower than the $38.5 billion the industrycharged-off in the fourth quarter of 2008, but they werealmost twice as high as the $19.6 billion total in thefirst quarter of 2008. The year-over-year rise in charge-offs was led by loans to commercial and industrial(C&I) borrowers, where charge-offs increased by $4.2billion (170 percent); by credit cards (up $3.4 billion,or 68.9 percent); by real estate construction loans (up$2.9 billion, or 161.7 percent); and by closed-end 14family residential real estate loans (up $2.7 billion, or

64.9 percent). Net charge-offs in all major categorieswere higher than a year ago. The annualized netcharge-off rate on total loans and leases was 1.94percent, slightly below the 1.95 percent rate in thefourth quarter of 2008 that is the highest quarterly netcharge-off rate in the 25 years that insured institutionshave reported these data. Well over half of all insuredinstitutions (58.3 percent) reported year-over-yearincreases in quarterly charge-offs.

Noncurrent Loans Rise by $59.2 BillionThe high level of charge-offs did not stem the growth

in noncurrent loans in the first quarter. On thecontrary, noncurrent loans and leases increased by$59.2 billion (25.5 percent), the largest quarterlyincrease in the three years that noncurrent loans have

Chart 3

2.5

3.0

3.5

4.0

4.5

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

Assets < $1 Billion

Assets > $1 Billion

Community Bank Margins Declined in the First QuarterQuarterly Net Interest Margin(Percent)

3.56%

3.37%

2004 2005 2006 2007 2008 2009


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Quarterly Banking Profile

than half of the increase in equity consisted of good-will). The industrys tier one leverage capital increasedby a record $69.8 billion (7.0 percent) during the quar-ter, and the average leverage capital ratio increasedfrom 7.48 percent to 8.04 percent. Most of the aggre-gate increase in capital was concentrated among a rela-

tively small number of institutions, including someinstitutions participating in the U.S. Treasury Depart-ments Troubled Asset Relief Program (TARP). Amajority of institutions (55.3 percent) reported declinesin their leverage capital ratios during the quarter. Anumber of institutions reduced their dividend paymentsin the first quarter, as the total amount of dividendspaid by insured institutions fell by almost half ($6.8billion) compared to the first quarter of 2008. Of the3,603 institutions that paid dividends in the first quar-ter of 2008, two-thirds (2,337 institutions) reducedtheir dividends in the current quarter, including 995institutions that eliminated first quarter dividends.

Downsizing at a Few Large Banks Causes$302-Billion Decline in Industry AssetsTotal assets declined by $301.7 billion (2.2 percent)during the quarter, as a few large banks reduced theirloan portfolios and trading accounts. This is the largestpercentage decline in industry assets in a single quarterin the 25 years for which quarterly data are available.Eight large institutions accounted for the entire declinein industry assets; most insured institutions (67.3percent) reported increased assets during the quarter,although only 47 percent had increases in their loan

balances. The decline in industry assets consistedprimarily of a $159.6-billion (2.1-percent) reduction inloans and leases, a $144.5-billion (14.9-percent) declinein assets in trading accounts, and a $91.7-billion

been rising. The percentage of loans and leases thatwere noncurrent rose from 2.95 percent to 3.76 percentduring the quarter; the noncurrent rate is now at thehighest level since the second quarter of 1991. The risein noncurrent loans was led by real estate loans, whichaccounted for 84 percent of the overall increase.

Noncurrent closed-end 14 family residential mortgageloans increased by $26.7 billion (28.1 percent), whilenoncurrent real estate construction loans were up by$10.5 billion (20.3 percent), and noncurrent loanssecured by nonfarm nonresidential real estate propertiesrose by $6.9 billion (40 percent). All major loan cate-gories experienced rising levels of noncurrent loans, and58 percent of insured institutions reported increases intheir noncurrent loans during the quarter.

Reserve Building ContinuesLoss provisions surpassed net charge-offs by $23.1

billion in the first quarter, and the industrys loan lossreserves increased by $20.0 billion (11.5 percent). Theratio of reserves to total loans rose during the quarterfrom 2.21 percent to 2.50 percent, an all-time high.The previous record level of 2.38 percent was reachedat the end of the first quarter of 1992. Despite the risein the level of reserves relative to total loans, the indus-trys ratio of reserves to noncurrent loans fell for a 12thconsecutive quarter, from 74.8 percent to 66.5 percent,the lowest level in 17 years.

Industry Capital Registers Largest QuarterlyIncrease Since 2004Total equity capital of insured institutions increased by$82.1 billion in the first quarter, the largest quarterlyincrease since the third quarter of 2004 (when more

Chart 5

0

1

2

3

4

5

6

7

8

9

1984 1986 1989 1991 1994 1996 1999 2001 2004 2006 20090

100

200

300

400

500

600

700

Credit Card Charge-Off Rate

Personal Bankruptcy Filings

The Credit Card Loss Rate Is at an All-Time High

Source: Administrative Office of the U.S. Courts

Net Charge-Off Rate(Percent)

Number of Bankruptcies(Thousands)

Chart 6

6

7

8

9

10

11

12

13

14

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

PercentCapital Growth at Large Banks Lifted Industry Averages

Total Risk-Based Capital

Tier 1 Risk-Based Capital

Equity to Assets

Core Capital (Leverage)

2003 2004 2005 2006 2007 2008 2009


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Twenty-One Failures Is Highest Quarterly TotalSince 1992The number of FDIC-insured commercial banks andsavings institutions reporting financial results declinedfrom 8,305 to 8,246 in the first quarter. Mergersabsorbed 50 institutions, while 21 insured institutionsfailed. This is the largest number of failed institutions ina quarter since the fourth quarter of 1992. Thirteen newcharters were added in the first quarter, the fewest sincethe first quarter of 1994. During the quarter, thenumber of insured banks and thrifts on the FDICsProblem List increased from 252 to 305, and totalassets of problem institutions rose from $159 billionto $220 billion.

Author: Ross Waldrop, Sr. Banking AnalystDivision of Insurance and Research(202) 898-3951

(12.7-percent) drop in Fed funds sold and securitiespurchased under resale agreements. Balances withFederal Reserve banks, which had increased by $488.2billion in the previous two quarters, declined by $32.5billion (6.3 percent) during the first quarter. Unusedloan commitments fell for a fifth consecutive quarter,

declining by $532.0 billion (7.4 percent). Most of thereduction occurred in credit card lines, which fell by$406.6 billion (9.9 percent), but unused commitmentsdeclined for all major loan categories during the quar-ter. The amount of assets securitized and sold declinedby $26.6 billion (1.4 percent) during the quarter.

Deposit Share of Funding Rises Even as TotalDeposits DeclineThe decline in industry assets and the increase in equitycapital meant a reduced need for funding during thequarter. Total deposits declined by $81.3 billion (0.9

percent), while nondeposit liabilities fell by $320.2billion (9.1 percent). Deposits in domestic officesincreased modestly ($41.9 billion, or 0.6 percent), withtime deposits falling by $72.5 billion (2.6 percent).Deposits in foreign offices declined by $123.2 billion(8.0 percent). Liabilities in trading accounts fell by$116.8 billion (24.6 percent), while Federal HomeLoan Bank advances declined for a second consecutivequarter, falling by $91.0 billion (11.6 percent). Depositsfunded 66.1 percent of total industry assets at the end of the quarter, up from 65.3 percent at the end of 2008.This is the highest deposit funding share sinceMarch 2002.

Chart 7

Asset Declines at Large Banks Are Refected inIndustry Growth Rates*

Change in Total Assets(Percent)

-4

-2

0

2

4

68

10

12

14

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008* Through First Quarter 2009

1.3 %

Chart 8

Failures Hit a 17-Year High in the First Quarter*Number of failures

0

20

40

60

80

100

120

140

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008* Through First Quarter 2009. Does not include assistance transactions.


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TABLE I-A. Selected Indicators, All FDIC-Insured Institutions*2009** 2008** 2008 2007 2006 2005 2004

Return on asset s (%) Return on equ ity (%) Core cap ital ( leverage) rat io (%) N on cur re nt as set s pl us ot her r ea l es tat e ow ne d t o a ss et s (%) 239 114 189 Net charge-offs to loans (%) Asset g rowth rate (%) Net interes t margin (%) Net operating income growth (%)Number of institutions reporting

Commercial banks Savings insti tutions

Percentage of unprofitable institutions (%) Number of problem inst itutions A ss et s of pr obl em in st it ut ion s (i n bi lli ons) Number of failed institutionsNumber of assisted institutions

* Excludes insured branches of foreign banks (IBAs)** Through March 31, ratios annualized where appropriate Asset growth rates are for 12 months ending March 31

TABLE II-A. Aggregate Condition and Income Data, All FDIC-Insured Institutions(dollar figures in millions) 1 t Q a te

20094th Q a te

20081 t Q a te

2008%Change

08Q1-09Q1Number of institutions reporting Tota l employees (ful l- time equ ivalen t) CONDITION DATATotal assets

Loans secured by rea l estate 1- 4 Fa mil y r es id ent ia l m or tg age s N onf ar m n on re si dent ia lConstruction and development Home equity lines

Commerc ia l & indus tr ia l loans Loans to ind iv idua ls

C re dit c ar ds Fa rm l oa ns O the r lo an s & l ea se s Less: Unearned income Tota l loans & leases Le ss: R es er ve f or lo ss es Net loans and leases Secur it ies O the r re al e st at e ow ne d G oo dw ill an d ot her i nt ang ib le s All o ther asset s

Tota l l iabi li ti es and cap ital Depos it s

D om es ti c of fi ce de pos it s

Foreign off ice depos it sOther bor rowed funds S ubo rdi nate d d eb t A ll ot her l iab ili ti es Equity cap ital

Lo an s a nd l eas es 3 0- 89 d ays pa st d ue N on cur re nt l oa ns an d le as es R es tru ct ure d l oa ns an d l eas es Direct and indirect investments in real estate Mor tgage-backed secur it ie s Earning assets FHLB advances Unused loan commitments Trust assetsAsset s secur it ized and sold*** Notional amount of derivatives***

INCOME DATAF ll Yea

2008F ll Yea

2007 %Change1 t Q a te

20091 t Q a te

2008%Change

08Q1-09Q1To ta l in tere st i nc om e $ 60 3, 321

Total interest expense 245,590 Net interest income 357,731 Provision for loan and lease losses 175,873 69,193 1542Total noninterest income 207,428 Total noninterest expense 367,872 367,Securities gains (losses) -15,309 Applicable income taxes 6,210 Extraordinary gains, net 5,358

Net income Net charge-of fs Cas h dividends Retained earnings -45

Net operating income 10,111 102

*** Call Report filers only N/M - Not Meaningful


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TABLE III-A. First Quarter 2009, All FDIC-Insured InstitutionsA et Concent ation G o p *

FIrsT QuArTEr(The way it i ...)

All In edIn tit tion

C editCa d

BankInte national

BankAg ic lt al

BankComme cial

LendeMo tgageLende

Con meLende

Othespecialized


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TABLE III-A. First Quarter 2009, All FDIC-Insured InstitutionsA et size Di t ib tion Geog aphic region *

FIrsT QuArTEr(The way it i ...)


Le than$100

Million

$100Million to$1 Billion

$1 Billionto

$10 Billion

G eatethan

$10 Billi on New Yo k Atlanta ChicagoKan a

City Dallasan

F anci coNumber of institutions reporting 8,246 3,050 4,505 576 115 1,005 1,172 1,692

Commercial banks 7,037 2,716 3,796 438 87 530Savings institutions 1,209 334 709 138 28 475

Total assets (in billions) $13,5416 $1671 $1,3599 $1,5134 $10,5013 $2,517Commercial banks 12 ,0069 1494 1,1113 1,1621 9 ,5840

S av ing s i ns ti tut io ns 1, 53 48 177 2486 3513 9173 71Total deposits ( in bil lions) 8,9544 1375 1,0929 1,1138 6,6102 1,5440Commercial banks 7, 98 34 1239 9 048 8 565 6 ,0 982 Savings institutions 9710 136 1881 2574 5119 48

Net income (in millions) 7,560 125 1,116 - 657 6,976 371 Commercial banks 7,663 94 1,060 -448 6,956 904Savings institutions -102 31 55 -208 20 -532

Pe fo mance ratio (ann alized, %)Yield on earning assets 487 571 565 534 467 Cost of funding earning assets 147 194 211 198 130 166 142

Net interest margin 339 377 354 336 337 Noninterest income to assets 200 121 094 112 227 195 Noninterest expense to assets 284 383 311 288 279 275 263Loan and lease loss provision to assets 178 045 069 145 198 213 151 152 2Net operating income to assets 017 028 030 -022 020 010 005 Pretax return on assets 035 039 043 -013 041 Return on assets 022 030 033 -018Return on equity 226 236 331 -165 Net charge-offs to loans and leases 194 054 071 141 227 221 179 162 Lo an a nd l eas e l os s pr ov is io n t o n et c ha rg e- of fs 16 094 13 201 13 876 14 973 16 348 18 024 14 438 18 059 15 30 2 2 2237 141E ff ic ie nc y r at io 537 9 8 033 7290 6 5% of un pr of it ab le i ns ti tut io ns 2165 2328 1913 2934 3 826 2 239 3% of institutions with earnings gains 3964 4393 3907 2396 2696 4507 2867 44

Condition ratio (%)E arning asset s to total asset s 8567 91 26 9177 9053 8409 8472 84 3Loss Allowance to:

Loans and leases 250 143 146 185 282 Noncurrent loans and leases 6649 639 6 52 52 5047 7087 10508 5615 62

Noncurrent assets plusother real estate owned to assets 239 186 252 298 230 152 253 245 272 260

Equit y capit al rat io 1015 1267 999 1060 Core capital (leverage) ratio 804 1232 957 915 761 931 Tier 1 risk-based c apital ratio 1074 1814 1295 1194 1017 1251 9Tot al r is k- ba sed c ap it al r at io 1346 1921 1411 1331 1332 1452 1Net loans and leases to deposits 84 21 7505 8555 9145 8296 8477 8242 N et l oa ns t o t ot al as set s 5 568 6179 6 875 6730 5222 51Domest ic deposits to tot al asset s 5567 82 33 80 27 7289 49 58 5396 6245 51

st ct al Change

New Charters 13 12 0 0 Institutions absorbed by mergers 50 22 24 3 1 9 5 13 11 Failed Institutions 21 1 18 2 0

PrIOr FIrsT QuArTErs(The way it wa )

Number of institutions 2008 8,494 3,347 4,481 549 117 1,036 1, 223 2006 8,790 3,826 4,334 511 119 1,106 2004 9,116 4,300 4,238 465 113 1,162

Total assets (in billions) 2008 $13,3694 $1780 $1,3343 $1,4381 $10,4191 $2,4789 $3,423 2006 11,2098 1990 1,2594 1,3956 8 ,3558 2 2004 9 ,3772 2219 1,1694 1,2821 6 ,7039

Return on assets (%) 2008 058 073 079 076 053 104 2006 134 095 111 130 139 2004 138 100 117 148 141

Net charge-offs to loans & leases (%) 2008 099 020 030 070 116 115 076 084 113 2006 032 012 012 018 039 2004 064 019 022 044 078

Noncurrent assets plusOREO to assets (%) 2008 114 109 133 144 108 08

2006 048 069 052 044 048 2004 067 084 066 059 068

Equit y capit al rat io (%) 2008 1018 1378 10 52 1113 994 1210 2006 10 38 12 29 10 28 1078 10 28 2004 945 1173 1018 1071 900

* See Table IV-A (page 9) for explanations


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TABLE IV-A. Full Year 2008, All FDIC-Insured InstitutionsA et Concent ation G o p *

FuLL YEAr(The way it i ...)


C editCa d

BankInte national

BankAg ic lt al

BankComme cial

LendeMo tgageLende

Con meLende

Othespecialized $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


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TABLE IV-A. Full Year 2008, All FDIC-Insured InstitutionsA et size Di t ib tion Geog aphic region *

FuLL YEAr(The way it i ...)


Le than$100 Million

$100 Millionto

$1 Billion

$1 Billionto

$10 Billion

G eatethan

$10 Billion New Yo k Atl anta ChicagoKan a

City Dallasan

F anci coNumber of institutions reporting 8,305 3,131 4,499 561 114 1,014 1,180 1,705 1,935

Commercial banks 7,085 2,784 3,790 425 86 530 1,041Savings institutions 1,220 347 709 136 28 484 139

Total assets (in billions) $13,8433 $1708 $1,3550 $1,4904 $10,8272 $2,4314 $3,7Commercial banks 12 ,3109 1525 1,1050 1,1416 9 ,9119 1,7253 Savings institutions 1,5324 183 2500 3488 915 3 7061

Tota l depos it s ( in b il lions) 9 ,0357 1391 1,0719 1,0800 6 ,7446 1,5345 2 ,513Commercial banks 8,082 2 1251 8874 8306 6, 2390 1,0585 Savings institutions 9536 140 1845 2495 5056 4760

Net income (in millions) 5, 254 445 3,421 -3,929 5,316 6,933 - 5,111 Commercial banks 16,004 481 3,331 -2,112 14,305 10,831 -3,447Savings institutions -10,751 -35 90 -1,817 -8,989 -3,898 -1,663

Pe fo mance ratio (%)Yield on earning assets 536 625 632 598 511 612 Cost of funding earning assets 218 239 261 247 207 242 194 21

Net interest margin 318 386 370 351 304 370 Noninterest income to assets 158 111 105 112 172 217 115 Noninterest expense to assets 279 379 324 309 268 313 224 2Loan and lease loss provision to assets 134 046 072 119 145 146 103 124 184 0Net operating income to assets 008 029 036 -013 007 044 -012 021 Pretax return on assets 009 037 036 -019 009 055 Return on assets 004 027 026 -027 0Return on equity 041 202 253 -245 05Net charge-offs to loans and leases 129 045 066 109 145 144 100 124 160Loan and lease loss provision to net

charge-offs 17547 16156 15549 15837 17927 17881 17031 18817 16962 17600 169

Ef ficiency ratio 5932 8069 7036 63 32 5% of unprofitable institutions 2441 2485 2289 3084 4035 3077 4305 % of institutions with earnings gains 3642 4066 3532 2442 2281 3738 1924 3953 43

Condition ratio (%)Earning assets to total assets 8504 9145 9166 9022 8340 8564 8408 85Loss Allowance to:

Loans and leases 221 139 141 177 243 239 Noncurrent loans and leases 7485 7102 5959 5971 7949 11422 6497 6758 8

Noncurrent assets plusother real estate owned to assets 189 166 216 243 179 127 195 196 228

Equity capital ratio 933 1289 1001 1068 901 Core capital (leverage) ratio 748 1257 955 921 689 857 662 Tier 1 risk-based capital ratio 996 1825 1275 1177 921 1227 867 Total risk-based c apit al rat io 1278 1931 1390 1318 1248 1415 1171 Net loans and leases to deposits 8522 7763 8838 9441 8340 8785 8547 7717 Net loans to total as sets 5562 63 25 69 92 6842 5195 5544 5Domestic deposits to total assets 5415 8148 7902 7164 4820 5464 5897 5216 6

st ct al ChangeNew Charters 98 92 4 1 1 Institutions absorbed by mergers 292 111 146 28 7 41 72 60 56 54

Failed Institutions 25 6 10 6 3 0 PrIOr FuLL YEArs

(The way it wa )Number of institutions 2007 8,534 3,440 4,424 551 119 1,043 1,221 1,763

2005 8,833 3,864 4,339 512 118 1,110 1,227 2003 9,181 4,390 4,210 471 110 1,173 1,227

Total assets ( in bil lions) 2007 $13,0341 $1819 $1,3088 $1,4221 $10,1213 $2,4411 $3,3296 $2,84220 05 10, 8783 2 008 1, 2476 1, 39 32 8, 03 67 2 ,76 82 20 03 9,0757 2 257 1,16 05 1, 3130 6, 3765 3 ,0 852

Return on assets (%) 2007 081 074 097 096 077 077 081 2005 128 099 124 128 129 121 2003 138 095 118 141 143 128

Net charge-offs to loans & leases (%) 2007 059 024 025 042 068 090 033 047 078 030 2005 049 020 019 024 060 080 2003 078 031 036 054 094 116

Noncurrent plus OREO to assets (%) 2007 094 096 107 109 091 076 081 094 137 100 2005 050 069 052 044 050 044

2003 075 083 069 062 078 078

Equity capital ratio (%) 2007 1034 1373 1049 1134 1012 1206 1030 2005 1028 1216 1020 1068 1018 1054 2003 915 1149 1005 1034 866 905

* region :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


14/52


TABLE V-A. Loan Performance, All FDIC-Insured InstitutionsA et Concent ation G o p *

Ma ch 31, 2009 All In edIn tit tion

C editCa d

BankInte national

BankAg ic lt al

BankComme cial

LendeMo tgageLende

Con meLende

Othespecialized


15/52



TABLE V-A. Loan Performance, All FDIC-Insured InstitutionsA et size Di t ib tion Geog aphic region *

Ma ch 31, 2009 All In edIn tit tion

Le than$100

Million


$1 Billionto

$10 Billion

G eatethan

$10 Billion N ew Yo k Atl anta ChicagoKan a

City Dallasan

F anci coPe cent of Loan 3089 Day Pa t D eAll loans secured by real estate 244 196 190 181 273 159 280

Construction and development 356 265 324 334 383 300 315 4Nonfarm nonresidential 137 169 151 125 134 142 Multifamily residential real estate 137 137 167 137 129 097 160 176

Home equity loans 154 085 091 083 165 Other 1-4 family residential 316 231 190 184 359 166 39Commercial and industrial loans 099 205 160 110 090 146 090 Loans to individuals 245 241 194 186

Credit card loans 299 215 272 201 305Other loans to individuals 212 242 188 180 216 278 2

All other loans and leases (including farm) 066 129 106 100 058 047 057 078 082 Total loans and leases 204 194 183 168 215

Pe cent of Loan Nonc ent**All real estate loans 489 253 313 440 5

Construction and development 1092 760 912 1253 1097 947 1029 13Nonfarm nonresidential 225 242 208 207 241 246 Multifamily residential real estate 245 234 235 350 211 149 335 312 Home equity loans 199 106 093 101 215 Other 1-4 family residential 595 178 192 308 715 232 66

Commercial and industrial loans 223 235 196 199 230 238 148 Loans to individuals 211 102 087 101



Pe cent of Loan Cha ged-off (net, YTD)All real estate loans 144 045 060 120

Construction and development 320 199 208 372 346 191 296 3Nonfarm nonresidential 039 028 024 044 045 051 Multifamily residential real estate 056 023 038 070 056 055 073 072 Home equity loans 236 058 055 082 263 Other 1-4 family residential 136 027 032 068 165 043 18

Commercial and industrial loans 182 106 107 145 196 260 108 Loans to individuals 488 077 163 356



Loan O t tanding (in billion )All real estate loans $4,7005 $723 $7424 $7692 $3,116

Construction and development 5669 81 1258 1475 2854 644 1969 104N on far m no nr es id ent ial 1, 0769 218 26 50 2 696 52 05 2013

Multifamily residential real estate 2106 20 309 457 1321 534 377 613 Home equity loans 6743 25 394 510 5814 O the r 1- 4 f am il y r es id en ti al 2 ,0 452 2 94 2499 24 06 1, 52 53 4198 5240

C om mer ci al a nd i ndu st ri al l oa ns 1, 43 46 145 1234 15 62 1,14 05 18 52 4 027 Loans to individuals 1,046 3 74 456 763 9


All other loans and leases (including farm) 5568 105 378 369 4715 749 1546 1387 731 Tota l loans and leases 7,7382 1048 9492 1,0386 5 ,6456

Memo: Othe real E tate Owned (in million )All other real estate owned 29,6696 7687 7,8614 6,7485 14,2910 2,0103

Construction and development 11,0360 2505 4,0582 3,3828 3,3446 6584 3,7748 1,870Nonfarm nonresident ia l 3 ,6415 2028 1,4710 9510 1,0167 3661 Multifamily resident ial real est ate 1,4670 164 2746 7256 4505 68 2 3628 736 8 1-4 family residential 11,3575 2782 1,9789 1,5552 7,5451 878Farmland 1224 204 730 GNMA proper ties 1,9483 04 7 2 1163 1,8244

* See Table IV-A (page 9) for explanations** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status


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TABLE VI-A. Derivatives, All FDIC-Insured Commercial Banks and State-Chartered Savings BanksA et size Di t ib tion

(dollar figures in millions;notional amounts unless otherwise indicated)

1 t Q a te2009

4th Q a te2008

3 d Q a te2008

2nd Q a te2008

1 t Q a te2008

%Change08Q1-09Q1

LeThan $100

Million


$1 Billionto $10Billion

G eate Than$10 Billion

ALL DErIVATIVE HOLDErsNumber of institutions reporting derivatives 1,158 1,100 1,070 1,068 1,102 51 90 694 2Total assets of institutions reporting derivatives $10,668,402 $10,974,274 $10,723,571 $10,105,028 $10,197,073 46 $6,257 $296,360 $885,022 $9,480,764Total deposits of insti tutions reporting derivatives 6,979,825 7,090,613 6,801,837 6,451,180 6,473,273 78 5,114 235,554 653,174 6,085,984Total derivatives 203,382,420 212,103,859 177,103,461 1

De ivative Cont act by unde lying ri k Expo eInterest rate 169,389,934 175,886,850 1Foreign exchange* 16,272,941 16,922,815 19,729,753 19,41Equity 2,174,368Commodi ty & o ther (exc luding c redi t der ivat ives) 938 ,063 1,049,941 1,233,751 1,137,524 1,129,869 -170 0 125 258 937,680Credit 14,607,1Total 203,382

De ivative Cont act by T an action TypeSwaps 133,873,373 Futures & forwards 23,581,538 22,513,758 24,483,732 23,582,Purchased options 14,936,251 14,821,778 13,485,926 14,501Written options 14,983,291 14,919,984 13,450,1Total 187,374

Fai Val e of De ivative Cont actI nt ere st r at e c ont rac ts 137, 575 131,152 27, 30 0 75, 94 6 Foreign exchange c ontracts -10,460 -16,942 15,054 32,017 9,670 Equity contracts 3,114 2,871 3,742Commodity & other (excluding credit derivatives) 4,158 3,850 3,175 5,063 3,346 243 0 2 3 4,15C re dit d er ivat iv es as gu ar ant or - 959, 081 - 96 0, 572 - 56 6,0 35 - 39 8, 89 3 - 474, 04 5 N /M C re dit d er ivat iv es as be ne fi ci ar y 1, 031,18 5 1, 031,6 30 6 03, 93 6 428, 84 4 5 01,0 34 1058

De ivative Cont act by Mat ity**Interest rate contracts < 1 year 68,435,870 58,610,008 40,400,256 44,995,183 42,621,769 606 119

1-5 years 37,293,367 47,456,476 37,760,963 39,521,416 39,752,501 > 5 years 29,985,002 36,868,293 28,785,014 29,704,389 30,134,307

Foreign exchange contracts < 1 year 9,234,329 10,561,395 12,664,219 12,345,486 12,524,601 -263 0 12 1,85 1- 5 ye ar s 2,16 3,751 2,16 8,13 6 1,787, 926 1, 929, 55 4 1, 924, 840 > 5 years 1,056,793 1,079,943 676, 596 734,445 714,769

Eq ui ty c ont rac ts < 1 y ear 3 48 ,7 76 4 09, 029 5 08,74 8 5 04, 25 8 50 9,70 9 - 31 1-5 years 286,171 256, 252 332,908 207,513 287, 805 > 5 years 82,843 72,337 81,967 76,283 39,960

Commodit y & other contrac ts < 1 year 279,748 264,916 294,036 315, 202 369,747 -243 0 0 20 1-5 years 206,173 261,768 288,860 267, 344 277,956 > 5 years 41,546 45,021 88,822 28,367 33,492

ri k-Ba ed Capital: C edit Eq ivalent Amo ntTotal current exposure to tier 1 capital (%) 861 1074 603 578 671 03 Total potential future exposure to tier 1 capital (%) 896 1031 1223 1185 1227 01 04 06 Total exposure (credit equivalent amount)

to tier 1 capital (%) 1757 2105 1826 176

C edit lo e on de ivative *** 2181 1,0724 2267 1348 148

HELD FOr TrADINGNumber of institutions reporting derivatives 197 181 186 182 171 152 7 67

Total assets of insti tutions reporting derivatives 9,015,841 9,414,088 9,234,891 8,596,866 8,622,620 46 454 30,233 291,700 8,693,454Total deposits of insti tutions reporting derivatives 5,885,814 6,085,224 5,855,784 5,502,108 5,465,692 77 355 24,197 213,231 5,648,032

De ivative Cont act by unde lying ri k Expo eInterest rate 167,216,926 173,365,616 1Foreign exchange 14,766,077 16,147,796 18,396,233 18,1Equity 2,162,149Commodi ty & o ther 935 ,634 1,047,507 1,230,649 1,134Total 185,08

T ading reven e : Ca h & De ivative In t mentInterest rate 9,078 -3,430 Foreign exchange 2,436 4,093 3,090 Equity 1,043Commodity & other (including credit derivatives) -2,810 -8,618 3,305 -1,944 -2,791 N/M 0 0 0 -2,810Total trading revenues 9,747 -9,186 6,422 1,839

sha e of reven eTrading revenues to gross revenues (%) 73 -81 46 13 07 00 Trading revenues to net operating revenues (%) 1324 442 669 248 97 00 11

HELD FOr PurPOsEs OTHEr THAN TrADINGNumber of institutions reporting derivatives 1,037 996 970 975 1,013 24 83 626 2Total assets of institutions reporting derivatives 10,301,778 10,463,328 10,396,562 9,806,938 9,914,653 39 5,803 267,086 746,480 9,282,409

Total deposits of insti tutions reporting derivatives 6,727,535 6,819,580 6,589,374 6,256,368 6,288,937 70 4,759 211,922 550,619 5,960,235De ivative Cont act by unde lying ri k Expo eInterest rate 2,173,008 2,521,235 F ore ig n ex ch an ge 10 6, 011 76,113 87, 56 5 E qu it y 12, 219Commodity & other 2,429 2,434 3,101 Total notional amount 2,293,666 2,611,507 2,640,673 2,777,756

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 t hose banks filing the FFIEC 041 report form that have $300 million or morein total assets


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TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Commercial Banks and State-CharteredSavings Banks)

A et size Di t ib tion

(dollar figures in millions)

1 tQ a te

2009

4thQ a te

2008

3 dQ a te

2008

2ndQ a te

2008

1 tQ a te

2008

%Change08Q1-09Q1

Le Than$100

Million


$1 Billionto $10Billion

G eateThan $10

BillionA et sec itized and sold with se vicing retained o withreco e o Othe selle -P ovided C edit EnhancementNumber of institutions reporting securitization activities 137 132 128 130 132 O t tanding P incipal Balance by A et Type

1-4 family residential loans Home equ ity l oans Credit card receivablesAuto loans Other consumer l oans Commerc ia l and indus tr ia l l oans 8 ,317 All other loans, leases, and other assets* 197,717 200,736 200,879 19

Total securitized and sold

Maxim m C edit Expo e by A et Type1-4 family residential loans Home equ ity l oans Credit card receivablesAut o l oa ns Other consumer l oans Commercial and industrial loans 367 All other loans, leases, and ot her assets 301 725 714

Total credi t exposure Total unused liquidit y commitments provided to institution's own securitizations 397 830 1, 273 1,902 2,944 - 865 0 0 0 397

sec itized Loan , Lea e , and Othe A et 30-89 Day Pa t D e (%)1-4 family residential loans Hom e e qui ty l oan s Credit card receivablesAut o l oa ns Ot her consumer loans

Commercial and industrial loans 3All other loans, leases, and ot her assets 06 06 0Total loans, leases, and other assets 35 sec itized Loan , Lea e , and Othe A et 90 Day o Mo e Pa t D e (%)

1-4 family residential loans Hom e e qui ty l oan s Credit card receivablesAut o l oa ns Ot her consumer loans Commercial and industrial loans 3All other loans, leases, and ot her assets 11 04 0

Total loans, leases, and other assets 46 sec itized Loan , Lea e , and Othe A et Cha ged-Off(net, YTD, ann alized, %)

1-4 family residential loans Home equit y loans Credit card receivablesAut o l oa ns Ot her consumer loans Commercial and industrial loans 2All other loans, leases, and ot her assets 00 00 0

Total loans, leases, and other assets 06

selle ' Inte e t in In tit tion' Own sec itization - Ca ied a LoanHom e e qui ty l oan s Credit card receivablesCom merc ial a nd i nd ust ri al l oans 4 50

selle ' Inte e t in In tit tion' Own sec itization - Ca ied a sec itieHome equity loans Cr ed it c ard re ce iva bl esCommercial and industrial loans 0

A et sold with reco e and Not sec itizedNumber of inst itutions report ing asset sales 809 793 786 77

O t tanding P incipal Balance by A et Type1-4 family residential loans Home equit y, credit card receivables, auto, and other consumer loans 1,348 1,477 1,611 1,786 1, 886 -285 0 30 73 1, 245Commerc ia l and indus tr ia l l oans 6 ,028 All o ther l oans , l ea se s, and o ther a sset s 46,418 42,613 41,501

Total sold and not securitized

Maxim m C edit Expo e by A et Type1-4 family residential loans Home equity, credit card receivables, auto, and other consumer loans 183 189 203 240 165 109 0 11 64 10Commerc ia l and indus tr ia l l oans 4 ,995 All o ther l oans , l ea se s, and o ther a sset s 9 ,770 9 ,290 11,517

Total credit exposure

s ppo t fo sec itization Facilitie spon o ed by Othe In tit tionNumber of institutions reporting securitization facilities sponsored by others 54 51 49 47 48 125 21 25 3 5To ta l c redi t exposu re

Tot al unu sed l iqu idi ty com mi tm ent s 9

OtheAssets serviced for others** Asset-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 ot her s 2 2, 981 23, 06 4 20, 83 0 21, 08 3 22 ,33 2 29 3 0 Unused liquidity commitments to conduits sponsored by institutions

and others 273,542 297,908 311,683 339,007 354,525 -228 0 26 0 273,516

Net s ervi cing income (for t he qua rt er) 5 ,954 Net s ecur it iz at ion income (for t he qua rt er) 2 ,124 2 ,393 Total credit exposure to Tier 1 capital (%)*** 76 6 8

*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


18/52


During the first quarter of 2009, total assets of thenations 8,246 FDIC-insured commercial banks andsavings institutions decreased by $301.7 billion (2.2percent). Total deposits decreased by 0.9 percent;domestic office deposits increased by 0.6 percent ($41.9billion) and foreign office deposits shrank by 8.0percent ($123.2 billion). Domestic time depositsdecreased by 2.6 percent ($72.5 billion), while domesticsavings and interest bearing checking accountsincreased by 2.9 percent ($93.6 billion) and domesticnon-interest bearing deposits increased by 1.5 percent($20.9 billion). From March 31, 2008, to March 31,2009, total domestic deposits increased by 6.6 percent.

Noninterest bearing deposits rose by 19.8 percent($239.2 billion) and interest bearing deposits rose by3.9 percent ($230.2 billion).

Over the past year, the share of assets funded by domes-tic deposits increased from 52.9 percent to 55.7 percent.

By contrast, over the same 12 months, Federal HomeLoan Bank (FHLB) advances as a percent of total assetsdeclined from 6.3 percent to 5.1 percent and the shareof asset funding attributable to foreign office depositsdecreased from 11.2 percent to 10.5 percent.

Estimated insured deposits at all FDIC-insured institu-tions (based on the $100,000 coverage limit) increasedby 1.7 percent ($82.4 billion) during the first quarter of 2009, down from a 4.5 percent increase during theprevious quarter. From March 31, 2008, to March 31,2009, insured deposits increased by 8.9 percent ($393.3billion). For institutions existing on both December 31,2008, and March 31, 2009, insured deposits increasedduring the first quarter at 6,073 institutions (74percent), decreased at 2,125 institutions (26 percent),and remained unchanged at 35 institutions.

The Deposit Insurance Fund (DIF) decreased by 24.7percent ($4.3 billion) during the first quarter to $13,007million (unaudited). Accrued assessment income added$2.6 billion to the DIF during the quarter. Interestearned combined with realized gains and unrealizedlosses on securities added $17 million to the DIF. Oper-ating and other expenses net of other revenue reducedthe fund by $264 million. The reduction in the DIF wasprimarily due to a $6.6 billion increase in loss provi-sions for actual and anticipated insured institutionfailures.

The DIFs reserve ratio equaled 0.27 percent on March31, 2009, down from 0.36 percent at December 31,2008, and 1.19 percent a year ago. The March 31, 2009,reserve ratio is the lowest reserve ratio for a combinedbank and thrift insurance fund since March 31, 1993,when the reserve ratio was 0.06 percent.

Twenty-one FDIC-insured institutions with combinedassets of $9.5 billion failed during the first quarter of 2009, at an estimated cost to the DIF of $2.2 billion.Between March 31, 2008, and March 31, 2009, 44insured institutions with combined assets of $381.4billion failed, at an estimated cost to the DIF of $20.1 billion.

Final Rule Adopted Setting Assessment Rates andModifying the Risk-Based Assessment SystemOn February 27, 2009, the FDIC Board of Directors(the Board) adopted a final rule effective April 1,2009, setting assessment rates and modifying the risk-based assessment system. The rule sets initial baseassessment rates at 12 to 45 basis points. An institu-tions total assessment rate may be less than or greaterthan its initial base assessment rate as a result of addi-tional risk adjustments discussed below.

DIF Reserve Ratio Declines 9 Basis Points to 0.27 Percent Twenty-One Institutions Fail During First Quarter Insured Deposits Grow by 1.7 Percent Final Rule Adopted Setting Assessment Rates and Modifying Risk-Based Assessment System Temporary Coverage Limit to $250,000 Extended through the End of 2013 Final Rule Adopted for Special Assessment

INSURANCE FUND INDICATORS


19/52



Assessment Rates: The FDIC adopted new initial baseassessment rates as of April 1, 2009, as follows:

Initial Ba e A e ment rate

Annual Rates(in basis points)

Risk CategoryI*

II III IVMinimum Maximum

12 16 22 32 45

*Initial base rates that are not the minimum or maximum ratewill vary between these rates

After applying all possible adjustments, minimum andmaximum total base assessment rates for each risk cate-gory are as follows:

Total Ba e A e ment rate *

Risk

CategoryI

RiskCategory

II

RiskCategory

III

RiskCategory

IVInitial base

assessment rate12 16 22 32 45

Unsecured debtadjustment -5 0 -5 0 -5 0 -5 0

Secured liabilityadjustment 0 8 0 11 0 16 0 225

Brokered depositadjustment 0 10 0 10 0 10

Total baseassessment rate 7 240 17 430 27 580 40 775

*All amounts for all risk categories are in basis points annuallyTotal base rates that are not the minimum or maximum ratewill vary between these rates

Temporary Deposit Insurance Coverage to$250,000 ExtendedOn May 20, 2009, the President signed the HelpingFamilies Save Their Homes Act of 2009, which extendsthe temporary deposit insurance coverage limit increaseto $250,000 (from the permanent limit of $100,000 fordeposits other than retirement accounts) through theend of 2013. The legislation also eliminates the prohibi-tion against the FDICs taking the temporary coverageincrease into account when setting assessments. In addi-tion, this new legislation increased the FDICs authorityto borrow from the Treasury from $30 billion to $100billion and authorized a temporary increase until

December 31, 2010, in the FDICs borrowing authorityabove $100 billion (but not to exceed $500 billion)based on a process that would require the concurrenceof the FDICs Board, the Federal Reserve Board, andthe Secretary of the Treasury in consultation withthe President.

Small Risk Category I Institutions and Large RiskCategory I Institutions with No Long-Term DebtIssuer RatingThe FDIC introduced a new financial ratio into thefinancial ratios method (the adjusted brokered depositratio). The adjusted brokered deposit ratio affects insti-tutions in Risk Category I (those that have CAMELScomposite ratings of 1 or 2 and are well capitalized)whose brokered deposits are more than 10 percent of domestic deposits and whose total assets are more than40 percent greater than they were four years previously.The adjusted brokered deposit ratio excludes certainreciprocal brokered deposits. Brokered deposits thatconsist of balances swept into an insured institution areincluded in the adjusted brokered deposit ratio.

Large Risk Category I Institutions with Long-TermDebt Issuer RatingsThe FDIC revised the method for calculating the assess-ment rate for a large Risk Category I institution with along-term debt issuer rating so that it equally weightsthe institutions weighted average CAMELS compo-nent ratings, its long-term debt issuer ratings and thefinancial ratios method assessment rate. The final ruleupdates the uniform amount and the pricing multipliersfor the weighted average CAMELS component ratingsand financial ratios method. It also increases the maxi-mum possible large bank adjustment from 0.5 basispoints to 1.0 basis point.

Adjustments to Assessment RatesThe FDIC introduced three possible adjustments to aninstitutions initial base assessment rate: (1) a decreaseof up to 5 basis points for long-term unsecured debt,including senior unsecured debt (other than debt guar-anteed under the Temporary Liquidity GuaranteeProgram) and subordinated debt and, for small institu-tions, a portion of Tier 1 capital; (2) an increase not toexceed 50 percent of an institutions assessment ratebefore the increase for secured liabilities in excess of 25percent of domestic deposits; and (3) for nonRiskCategory I institutions, an increase not to exceed 10

basis points for brokered deposits in excess of 10 percentof domestic deposits. The brokered deposit adjustmentincludes reciprocal brokered deposits, unlike thebrokered deposit ratio used in the financial ratiosmethod applicable to institutions in Risk Category I.


20/52


each institutions assets minus Tier 1 capital wheneverthe FDIC estimates that the DIF reserve ratio will fallto a level that the Board believes would adversely affectpublic confidence or to a level that will be close to orbelow zero. Any additional special assessment wouldalso be capped at 10 basis points of an institutions

assessment base for the corresponding quarters risk-based assessment. The authority to impose any addi-tional special assessments under the final ruleterminates January 1, 2010.

Author: Kevin Brown, Sr. Financial AnalystDivision of Insurance and Research(202) 898-6817

Final Rule Adopted for Special AssessmentOn May 22, 2009, the Board approved a final rule thatimposes a 5 basis point special assessment as of June 30,2009. The special assessment will be levied on eachinsured depository institutions assets minus its Tier 1capital as reported in its report of condition as of June30, 2009. The special assessment will be collectedSeptember 30, 2009, at the same time that the risk-based assessments for the second quarter of 2009 arecollected. The special assessment for any institution willbe capped at 10 basis points of the institutions assess-ment base for the second quarter of 2009 risk-basedassessment. The final rule also allows the Board toimpose an additional special assessment of up to 5 basispoints on all insured depository institutions based on


21/52



DIF Reserve Ratios***Percent of Insured Deposits

0.27

1.26 1.25 1.23 1.23 1.22 1.21 1.20 1.21 1.22 1.22 1.19

1.01

0.76

0.36

9/05 3/06 9/06 3/07 9/07 3/08 9/08 3/09

Table I-B. Insurance Fund Balances and Selected Indicators


Depo it In ance F nd1 t

Q a te2009*

4thQ a te

2008

3 dQ a te

2008

2ndQ a te

2008

1 tQ a te

2008

4thQ a te

2007

3 dQ a te

2007

2ndQ a te

2007

1 tQ a te

2007

4thQ a te

2006

3 dQ a te

2006

2ndQ a te

2006Beginning F nd Balance ................... $17,276 $34 ,588 $45 ,217 $52 ,843 $52 ,413 $51,754 $51,227 $50 ,745 $50 ,165 $49 ,992 $49 ,564 $49 ,193

Change in F nd Balance:Assessments earned ............................ 2,615 996 881 640 448 239 170 140 94 10 10 7Interest earned on investment

securities ....................................... 212 277 526 651 618 585 640 748 567 476 622 665Realized gain on sale of investments .. 136 302 473 0 0 0 0 0 0 0 0 0Operating expenses ............................. 266 290 249 256 238 262 243 248 239 248 237 242Provision for insurance losses ............. 6,637 19,163 11,930 10,221 525 39 132 -3 -73 49 -50 -6All other income, net of expenses ........ 2 15 16 1 0 -2 24 1 4 5 1 12Unrealized gain/(loss) on

available-for-sale securities ..........

-331

551

-346

1,559

127

138

68

-162

81

-21

-18

-77Total fund balance change ................... -4,269 -17,312 -10,629 -7,626 430 659 527 482 580 173 428 371

Ending F nd Balance ......................... 13,007 17,276 34,588 45,217 52,843 52,413 51,754 51,227 50,745 50,165 49,992 49,564Percent change from four

quarters earlier .......................

-7539

-6704

-3317

-1173

413

448

352

336

315 323

335

321

re e ve ratio (%) ............................... 027 036 076 101 119 122 122 121 120 121 122

E timated In ed Depo it **........... 4,831,473 4,749,036 4,545,288 4,467,771 4,438,141 4,292,221 4,242,607 4,235,044 4,245,266 4,153,786 4,100,013 4,040,353Percent change from four


886

1064

713

550

454

333

348

482

608 676 702 752

Dome tic Depo it ............................. 7,546,377 7,505,434 7,230,331 7,036,247 7,076,719 6,921,687 6,747,998 6,698,886 6,702,598 6,640,105 6,484,372 6,446,868Percent change from four


664

843

715

504

558

424

407

391

571

659

676

868N mbe of in tit tion epo ting ..... 8,256 8,315 8,394 8,462 8,505 8,545 8,570 8,625 8,661 8,692 8,755 8,790

Deposit Insurance Fund Balanceand Insured Deposits***

($ Millions)DIF

BalanceDIF-Insured

Deposits6/05 48,023 3,757,7289/05 48,373 3,830,950

12/05 48,597 3,890,9413/06 49,193 4,001,9066/06 49,564 4,040,3539/06 49,992 4,100,013

12/06 50,165 4,153,7863/07 50,745 4,245,2666/07 51,227 4,235,0449/07 51,754 4,242,607

12/07 52,413 4,292,2213/08 52,843 4,438,1416/08 45,217 4,467,7719/08 34,588 4,545,288

12/08 17,276 4,749,0363/09 13,007 4,831,473

Table II-B. Problem Institutions and Failed/Assisted Institutions(dollar figures in millions) 2009**** 2008**** 2008 2007 2006 2005 2004P oblem In tit tion

Number of institutions 305 90 52 80Total assets $22$6,607 $28,250

Failed In tit tionNumber of institutions 21 2 0 4Total assets $$0 $170

A i ted In tit tion *****Number of institutions 0 0 0 0Total assets $0 $0 $1,306,042 0 0 0 0

*For 2009, preliminary unaudited fund data, which are subject to change**The Emergency Economic Stabilization Act of 2008 directed the FDIC not to consider the temporary coverage increase to $250,000 in setting assessments On May 20, 2009, the Presi-

dent signed the Helping Families Save Their Homes A ct of 2009, which extends the temporary deposit insurance coverage limit increase to $250,000 through the end of 2013 and elimi-nates the prohibition against the FDICs taking the temporary coverage increase into account when setting assessments However, estimated insured deposits and the reserve ratios inthese tables reflect the general $100,000 coverage limit (for deposits other than retirement accounts) and the law in effect as of March 31, 2009

***Prior to 2006, amounts represent sum of separate BIF and SAIF amounts****Through March 31*****Five institutions under the same holding company received assistance under a systemic risk determination


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Table III-B. Estimated FDIC-Insured Deposits by Type of Institution(dollar figures in millions)

March 31, 2009N mbe ofIn tit tion

TotalA et

Dome ticDepo it *

E t. In edDepo it

Commercial Banks and Savings Institutions

FDIC-Insured Commercial Banks FDIC-Supervised

OCC-Supervised Federal Reserve-Supervised

FDIC-Insured Savings Insti tu tions OTS-Supervised Savings Insti tu tions 799 FDIC-Supervised State Savings Banks 410

Total Commercial Banks and Savings Institutions 8,246 13,541,630

Other FDIC-Insured InstitutionsUS Branches of Foreign Banks

Total FDIC-Insured Institutions

* Excludes $142 trillion in foreign office deposits, which are uninsured

Table IV-B. Distribution of Institutions and Domestic Deposits Among Risk CategoriesQ a te Ending Decembe 31, 2008(dollar figures in billions)

ri k Catego y

Ann alrate in

Ba i PointN mbe ofIn tit tion

Pe centof Total

In tit tionDome ticDepo it

Pe centof Total

Dome ticDepo it

I - MinimumI - Middle I - Middle

I - Maximum IIIIIIV

Note: Institutions are categorized based on supervisory ratings, debt ratings, and financial data as of December 31, 2008Rates do not reflect the application of assessment credits See notes to users for further information on risk categories and rates


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FDIC Responds to Market Disruptions with TLGPThe FDIC Board approved the Temporary LiquidityGuarantee Program (TLGP) on October 13, 2008, asmajor disruptions in credit markets blocked access toliquidity for financial institutions. 1 The TLGP improvedaccess to liquidity through two programs: by fully guar-anteeing non-interest-bearing transaction depositaccounts above $250,000, regardless of dollar amount,until December 31, 2009; and by guaranteeing eligiblesenior unsecured debt issued by eligible institutionsbetween October 14, 2008, and June 30, 2009. Underthe final rule adopted on November 21, 2008, the FDICguarantee would be in effect until the earlier of thematurity of the debt or June 30, 2012.

On March 17, 2009, the Board of Directors of the FDICvoted to extend the deadline for issuance to October31, 2009, and set the expiration date of the guaranteeto the earlier of maturity of the debt or December 31,2012. The FDIC will impose a surcharge on debt issuedwith a maturity of one year or more beginning in thesecond quarter of 2009.2

All insured depository institutions are eligible to partici-pate in the Transaction Account Guarantee Program.Institutions eligible for participation in the Debt Guar-antee Program include insured depository institutions,U.S. bank holding companies, certain U.S. savings andloan holding companies, and other affiliates of insureddepository institutions that the FDIC designates aseligible entities.

Program Funded by Industry Fees and AssessmentsThe TLGP does not rely on taxpayer funding or the

Deposit Insurance Fund. Both components of theprogram are paid for by direct user fees. Institutions

1 The FDIC invoked the systemic risk exception pursuant to section141 of the Federal Deposit Improvement Act of 1991, 12 U.S.C1823(c)(4) on October 13, 2008. For further information on the TLGP,see http://www.fdic.gov/regulations/resources/TLGP/index.html.2 See http://www.fdic.gov/news/board/Mar1709rule.pdf.

participating in the Transaction Account GuaranteeProgram provide customers full coverage on non-interest-bearing transaction accounts for an annual fee of 10 basis points. Fees for participation in the Debt Guar-antee Program depend on the maturity of debt issuedand range from 50 to 100 basis points (annualized). Asurcharge will be imposed on debt issued with a matu-rity of one year or greater after April 1, 2009. For debtthat is not issued under the extension, that is, debt thatis issued on or before June 30, 2009, and matures on or

before June 30, 2012, surcharges will be 10 basis points(annualized) on debt issued by insured depository insti-tutions and 20 basis points (annualized) on debt issuedby other participating entities. For debt issued under theextension, that is, debt issued after June 30, 2009, ordebt that matures after June 30, 2012, surcharges will be25 basis points (annualized) on debt issued by insureddepository institutions and 50 basis points (annualized)on debt issued by other participating entities. As of March 31, 2008, a total of $6.9 billion in fees had beenassessed under the Debt Guarantee Program.

A Majority of Eligible Entities Have Chosen toParticipate in the TLGPAccording to submissions received by the FDIC, morethan 86 percent of FDIC-insured institutions haveopted in to the Transaction Account GuaranteeProgram, and more than half of all eligible entities haveelected to opt in to the Debt Guarantee Program. Listsof institutions that opted out of the guarantee programsare posted at http://www.fdic.gov/regulations/resources/TLGP/optout.html .

Insured Institutions Report Half a Million

Transaction Accounts over $250,000According to first quarter 2009 Call Reports, insuredinstitutions reported 580,920 non-interest-bearingtransaction accounts over $250,000, an increase of 12 percent in number compared to fourth quarter 2008.These deposit accounts totaled $845 billion, of which$700 billion was guaranteed under the Transaction

Non-Interest-Bearing Transaction Accounts Can Be Fully Guaranteed Debt Guarantee Program Extended to October 31, 2009 More Than 500,000 Additional Transaction Accounts Receive Full Coverage

$336 Billion in Debt Outstanding in Program

TEMPORARY LIQUIDITY GUARANTEE PROGRAM
http://www.fdic.gov/regulations/resources/TLGP/index.htmlhttp://www.fdic.gov/news/board/Mar1709rule.pdfhttp://www.fdic.gov/regulations/resources/TLGP/optout.htmlhttp://www.fdic.gov/regulations/resources/TLGP/optout.htmlhttp://www.fdic.gov/regulations/resources/TLGP/optout.htmlhttp://www.fdic.gov/regulations/resources/TLGP/optout.htmlhttp://www.fdic.gov/news/board/Mar1709rule.pdfhttp://www.fdic.gov/regulations/resources/TLGP/index.html


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Table I-C. Participation in Temporary Liquidity Guarantee ProgramMarch 31, 2009 Total Eligible Entit ie N mbe Opting In Pe cent Opting InT an action Acco nt G a antee P og am

Depositor y Institutions with Assets $10 Billion 116

Total Depos itory Insti tutions*

Debt G a antee P og amDepositor y Institutions with Assets $10 Billion 116

Total Depos itory Insti tutions* Bank and Thrift Holding Companies andNon-Insured Affil iates

All Entit ies * Depository institutions include insured branches of foreign banks (IBAs)

debt outstanding at the end of the first quarter. Somebanking groups issued FDIC-guaranteed debt at both thesubsidiary and holding company level, but most guaran-teed debt was issued by holding companies or nonbankaffiliates of depository institutions. Bank and thrift hold-ing companies and nonbank affiliates issued 82 percent

of FDIC-guaranteed debt outstanding at year-end.

Debt outstanding at March 31 had longer terms at issu-ance, compared to debt outstanding at year-end. Only28 percent of debt outstanding matures in 180 days orless, compared to 49 percent at year-end, and 53 percentmatures in two or more years after issuance, comparedto 39 percent at December 31, 2008. Among types of debt instruments, almost two-thirds, 64 percent, was inmedium-term notes, compared to 44 percent at year-end. The share of outstanding debt in commercial paperfell to 22 percent from 43 percent at year-end.

Author: Katherine WyattChief, Financial Analysis SectionDivision of Insurance and Research(202) 898-6755

Account Guarantee Program. Over 6,500 FDIC-insuredinstitutions reported non-interest-bearing transactionaccounts over $250,000 in value.

Limits on Debt Issuance Based on Third Quarter2008 BalancesThe amount of FDIC-guaranteed debt that can beissued by each eligible entity, or its cap, is based onthe amount of its senior unsecured debt outstanding asof September 30, 2008, that matures on or before June30, 2009. Eligible entities may issue debt up to 125percent of that outstanding amount. The cap for FDIC-insured institutions that had no outstanding short-termsenior unsecured debt other than Fed funds is set at 2percent of liabilities as of September 30, 2008. Totaldebt outstanding at quarter end represented 44 percentof issuing entities total cap.

$336 Billion in FDIC-Guaranteed Debt WasOutstanding at March 31, 2009

Ninety-seven financial entities66 insured depositoryinstitutions and 31 bank and thrift holding companiesand nonbank affiliateshad $336 billion in guaranteed

Table II-C. Cap on FDIC-Guaranteed Debt for Opt-In Entities

March 31, 2009(dollar figures in millions)

Opt-In Entitie with senio un ec edDebt O t tanding at 9/30/2008

Opt-In Depo ito y In tit tionwith no senio un ec ed

Debt at 9/30/2008

N mbe

Debt Amo nta of

9/30/2008 Initial Cap N mbe

2% Liabilitiea of

9/30/2008Total

EntitieTotal Initial

CapDepository Institutions with Assets

$10 Billion* 44 295,879 369,849 63 29,939 107 399,787Bank and Thrift HoldingCompanies, Non-Insured Affiliates 88 398,008 497,511 3,508 N/A 3,596 497,511Total 252 697,4* Depository institutions include insured branches of foreign banks (IBAs) N/A - Not applicable


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Table V-C. Fees Assessed under TLGP Debt Program


Total Fee

A e edFourth Quarter 2008 $3,437First Quarter 2009 3,433 Total

Table VI-C. Term at Issuance of Debt Instruments Outstanding

March 31, 2009(dollar figures in millions)

Comme cialPape

Inte bank E odollaDepo it

Medi mTe m Note

OtheInte bank Depo it

Othesenio

un ec edDebt

OtheTe m Note All Debt

Shareby Term

Te m at I ance90 days or less $32,432 $125 $0 $161 10.5%91 - 180 days 40,016 36 0 764 17.0%181 - 364 days 2,663 28 3,400 723 3.2%

1 - 2 years 0 3 50,341 16.4%Over 2 - 3 years 0 0 67,547 0 322.9%Over 3 years 1 0 95,196 429.9%

Total 75,112 191 216,484 Share of Total 22.3% 0.1% 64.4% 0.5% 3.8% 9.0%

Table IV-C. Debt Issuance under Guarantee ProgramMarch 31, 2009(dollar figures in millions) N mbe Debt O t tanding Cap

Debt O t tandingsha e of Cap

In ed Depo ito y In tit tionAssets $10 Billion

Bank and Thrift Holding Companies,Non- Insured Af filiates All I e

Table III-C. Transaction Account Guarantee Program(dollar figures in millions) Decembe 31,2008

Ma ch 31,2009

% Change08Q4-09Q1

Number of Non-Interest-Bearing Transaction Accounts over $250,000 518,828 580,920 120%Amount in Non-Interest-Bearing Transaction Accounts over $250,000 $807,679 $845,227 46%Amount Guaranteed


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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 ratesrepresent 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 of each 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 CHANGES

Other-Than-Temporary ImpairmentWhen the fair value of an investment in a debt or equitysecurity is less than its cost basis, the impairment is eithertemporary or other-than-temporary. To determine whetherthe impairment is other-than-temporary, an institution mustapply other pertinent guidance such as paragraph 16 of FASBStatement No. 115, Accounting for Certain Investments in Debtand Equity Securities; FASB Staff Position (FSP) FAS 115-1and FAS 124-1, The Meaning of Other-Than-TemporaryImpairment and Its Application to Certain Investments; FSPFAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments ; paragraph 6 of Accounting Principles Board Opinion No. 18, The EquityMethod of Accounting for Investments in Common Stock;Emerging Issues Task Force (EITF) Issue No. 99-20,

Recognition of Interest Income and Impairment on PurchasedBeneficial Interests and Beneficial Interests That Continue to BeHeld by a Transferor in Securitized Financial Assets; and FSPEITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20 .Under FSP FAS 115-2 and FAS 124-2 issued on April 9,2009, if the present value of cash flows expected to be col-lected on a debt security is less than its amortized cost basis, acredit loss exists. In this situation, if an institution does notintend to sell the security and it is not more likely than notthat the institution will be required to sell the debt securitybefore recovery of its amortized cost basis less any current-period credit loss, an other-than-temporary impairment hasoccurred. The amount of the total other-than-temporaryimpairment related to the credit loss must be recognized in

earnings, but the amount of the total impairment related toother factors must be recognized in other comprehensiveincome, net of applicable taxes. Although the debt securitywould be written down to its fair value, its new amortized costbasis is the previous amortized cost basis less the other-than-temporary impairment recognized in earnings. In addition, if an institution intends to sell a debt security whose fair valueis less than its amortized costs basis or it is more likely thannot that the institution will be required to sell the debt secu-rity before recovery of its amortized cost basis, an other-than-

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 regarding thecomparability of source data and reporting differences overtime.

Tables I-A through VIII-A.The information presented in Tables I-A through V-A of theFDIC 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 andgeographic region. Quarterly and full-year data are provided

for selected indicators, including aggregate condition andincome data, performance ratios, condition ratios, and struc-tural changes, as well as past due, noncurrent, and charge-off information 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 of Condition and Income (Call Reports) and the OTS ThriftFinancial Reportssubmitted by all FDIC-insured depositoryinstitutions. This information is stored on and retrieved fromthe FDICs Research Information System (RIS) data base.

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 Profiletables,which can lead to double-counting. No adjustments are madefor any double-counting of subsidiary data. Additionally, cer-tain adjustments are made to the OTS Thrift Financial Reports to provide closer conformance with the reporting andaccounting requirements of the FFIEC Call Reports.


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take effect in 2009. Beginning in March 2009, Institutionequity capital and Noncontrolling interests are separatelyreported in arriving at Total equity capital.FASB Statement No. 157Fair Value Measurements issued inSeptember 2006 and FASB Statement No. 159The Fair Value Option for Financial Assets and Financial Liabilities issued inFebruary 2007both are effective in 2008 with early adoption

permitted in 2007. FAS 157 defines fair value and establishesa framework for developing fair value estimates for the fairvalue measurements that are already required or permittedunder other standards. FASB FSP 157-4, issued in April 2009,provides additional guidance for estimating fair value inaccordance with FAS 157 when the volume and level of activity for the asset or liability have significantly decreased.The FSP also includes guidance on identifying circumstancesthat indicate a transaction is not orderly. The FSP is effectivefor interim and 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 orliability when it first recognizes the instrument on its balancesheet or enters into an eligible firm commitment.FASB Statement No. 158Employers Accounting for Defined BenefitPension and Other Postretirement Plans issued in September2006, requires a bank to recognize in 2007, and subsequently,

the funded status of its postretirement plans on its balancesheet. An overfunded plan is recognized as an asset and anunderfunded plan is recognized as a liability. An adjustment ismade to equity as accumulated other comprehensive income(AOCI) upon application of FAS 158, and AOCI is adjustedin subsequent periods as net periodic benefit costs are recog-nized in earnings.FASB Statement No. 156Accounting for Servicing of Financial Assets issued in March 2006 and effective in 2007, requiresall separately recognized servicing assets and liabilities to beinitially measured at fair value and allows a bank the optionto subsequently adjust that value by periodic revaluation andrecognition of earnings or by periodic amortization toearnings.FASB Statement No. 155Accounting for Certain Hybrid Financial Instruments issued in February 2006, requires bifurcation of certain derivatives embedded in interests in securitized finan-cial assets and permits fair value measurement (i.e., a fairvalue option) for any hybrid financial instrument that con-tains an embedded derivative that would otherwise requirebifurcation under FASB Statement No. 133, Acco

Documents

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