FDIC Quarterly

Quarterly Banking Profile:

Second Quarter 2014

Minority Depository Institutions: 

Structure, Performance, and 

Social Impact

2014, Volume 8, Number 3
Chairman Martin J. Gruenberg

Director, Division of Insurance Diane Ellis

and Research

Executive Editors Richard A. Brown

Maureen E. Sweeney

Managing Editors Matthew Green

Jack Reidhill

Philip A. Shively

Editors Peggi Gill

Frank Solomon

Publication Manager Lynne Montgomery

Media Inquiries (202) 898-6993

The FDIC Quarterly is published by the Division of Insurance and Research of the Federal Deposit 

Insurance Corporation and contains a comprehensive summary of the most current financial results 

for the banking industry. Feature articles appearing in the FDIC Quarterly range from timely analysis 

of economic and banking trends at the national and regional level that may affect the risk exposure of 

FDIC-insured institutions to research on issues affecting the banking system and the development of 

regulatory policy.

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2014, Volume 8, Number 3

FDIC Quarterly

The views expressed are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance

Corporation. Some of the information used in the preparation of this publication was obtained from publicly available sources 

that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the 

Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited. 

Please provide the FDIC’s Division of Insurance and Research with a copy of any publications containing reprinted material.

Quarterly Banking Profile: Second Quarter 2014

FDIC-insured institutions reported aggregate net income of $40.2 billion in the second quarter of 2014, up 

$2 billion (5.3 percent) from earnings of $38.2 billion the industry reported a year earlier. The increase in earnings was mainly attributable to a $1.9 billion (22.4 percent) decline in loan-loss provisions and a $1.5 billion 

(1.4 percent) decline in noninterest expenses. Strong loan growth contributed to an increase in net interest 

income compared to a year ago. However, lower income from reduced mortgage activity and a drop in trading 

revenue contributed to a year-over-year decline in noninterest income. More than half of the 6,656 insured 

institutions reporting (57.5 percent) had year-over-year growth in quarterly earnings. The proportion of banks 

that were unprofitable during the second quarter fell to 6.8 percent from 8.4 percent a year earlier. See page 1.

Community Bank Performance

Community banks—which represent 93 percent of insured institutions—reported net income of $4.9 billion 

in the second quarter, up $166 million (3.5 percent) from one year earlier. The increase was driven by 

higher net interest income and lower loan loss provisions. In the second quarter of 2014, loan balances at 

community banks grew at a faster pace than in the industry, asset quality indicators continued to show 

improvement, and community banks accounted for 45 percent of small loans to businesses. See page 14.

Insurance Fund Indicators

Estimated insured deposits decreased slightly (0.2 percent) from the prior quarter, but increased 2.6 percent 

from one year earlier. The DIF reserve ratio was 0.84 percent at June 30, 2014, up from 0.80 percent at 

March 31, 2014, and 0.64 percent at June 30, 2013. Seven FDIC-insured institutions failed during the 

quarter. See page 20.

Featured Article:

Minority Depository Institutions: Structure, Performance, 

and Social Impact

While the number of minority depository institutions (MDIs) and community development financial institutions (CDFIs) is relatively small compared with the total number of insured institutions, MDIs and CDFIs play 

an important role in providing financial services to the communities they seek to serve. This study describes 

MDIs and FDIC-insured CDFIs and how the structure of this segment of the financial services industry has 

changed over time. The study also compares the performance of MDIs with other insured institutions. 

Although MDIs tend to underperform non-MDI institutions in terms of standard industry financial performance measures, the study finds that MDI offices tend to be located in communities with higher shares of 

minority populations. In addition, MDIs were found to originate a greater share of their mortgages to borrowers 

living in low- and moderate-income census tracts and to minority borrowers compared with other financial 

institutions. These findings demonstrate a high level of commitment on the part of MDIs to the populations 

they seek to serve and the essential role they play in their local communities. See page 33.

FDIC Quarterly 1 2014, Volume 8, No. 3

Quarterly Banking Profile Second Quarter 2014

Lower Expenses Contribute to Improvement 

in Earnings

The impact of the rise in medium- and long-term interest rates in second quarter 2013 remained evident in 

year-over-year earnings comparisons in second quarter 

2014. The negative effect on noninterest income, 

particularly income from mortgage lending and from 

trading, was greater at large banks, while the positive 

implications of a steeper yield curve for net interest 

margins, combined with strengthening loan growth, 

were more significant for smaller institutions. The 6,656 

FDIC-insured institutions filing financial results for 

second quarter 2014 reported combined net income of 

$40.2 billion. This is $2 billion (5.3 percent) more than 

the industry reported in second quarter 2013. Net operating revenue (the sum of net interest income and total 

noninterest income) was $1.5 billion (0.9 percent) 

lower than in second quarter 2013, as a decline in 

noninterest income from mortgage sales, securitization, 

and servicing outweighed an increase in net interest 

income. Earnings benefited from lower expenses for 

loan-loss provisions, goodwill impairment, and payrolls. 

A majority of banks—57.5 percent—reported year-overyear increases in quarterly earnings, and only 6.8 percent 

of banks were unprofitable, down from 8.4 percent a 

year ago. This is the lowest proportion of unprofitable 

institutions since first quarter 2006. The average return 

on assets for the quarter was 1.07 percent, slightly above 

the 1.06 percent average in the year-ago quarter.

Revenues Decline From Year-Ago Level for 

Fourth Consecutive Quarter

Net interest income posted the largest year-over-year 

increase in 14 quarters, rising by $2 billion (1.9 

percent), as interest-earning assets were 6.4 percent 

above year-ago levels. Almost 72 percent of all institutions reported year-over-year growth in quarterly net 

interest income. The average net interest margin fell to 

3.15 percent from 3.25 percent in second quarter 2013. 

This is the lowest quarterly margin for the industry since 

third quarter 1989. Margin pressure was most evident at 

large banks. Nine of the ten largest banks reported 

lower quarterly margins than a year ago, whereas 55.2 

percent of all banks reported year-over-year margin 

■ Quarterly Net Income of $40.2 Billion Is 5.3 Percent Higher Than a Year Ago

■ Net Interest Income Posts $2 Billion Year-Over-Year Increase

■ Lower Income From Mortgage Activities Contributes to $3.6 Billion Drop in 

Noninterest Income

■ Loan Growth Rises to Post-Crisis High

■ Number of Banks on “Problem List” Falls Below 400

INSURED INSTITUTION PERFORMANCE

Quarterly Net Income

All FDIC-Insured Institutions Billions of Dollars

Source: FDIC.

-$20

-$10

$0

$10

$20

$30

$40

$50

1234123412 3 4 1234123412

-6.1

-12.6

2009 2010

2.1

-1.7

17.4

20.923.821.4

28.7

2011

28.5

35.2

25.3

34.8

2012

34.4

37.534.5

2013

40.438.236.1

39.837.3

2014

40.2

Securities and Other Gains/Losses, Net

Net Operating Income

Chart 1 Chart 2

Unprotable Institutions and Institutions

With Increased Earnings

Percentage of All FDIC-Insured Institutions

Source: FDIC.

0

10

20

30

40

50

60

70

80

2006 2007 2008 2009 2010 2011 2012 2013 2014

Percentage of Institutions With Quarterly Losses

Percentage of Institutions With Year-Over-Year

Quarterly Income Growth
FDIC Quarterly 2 2014, Volume 8, No. 3

increases. Noninterest income was $3.6 billion (5.3 

percent) lower than a year earlier, as income from sales, 

securitization, and servicing of 1-to-4 family residential 

mortgages fell by $3.7 billion (42.5 percent). Trading 

income declined for a fourth consecutive quarter, falling 

by $721 million (10.1 percent). Reduced expenses 

outweighed the weakness in revenues compared with 

the year before. Banks set aside $6.6 billion in provisions for loan and lease losses during the quarter, a 

$1.9 billion (22.4 percent) decline from second quarter 

2013 and the lowest quarterly provision total since 

second quarter 2006. Expenses for goodwill impairment 

totaled $192 million, down from $4.4 billion in second 

quarter 2013, when two institutions reported large 

impairment charges. Expenses for salaries and employee 

benefits were $399 million (0.8 percent) lower as the 

industry reported 37,282 fewer employees than the year 

before. Itemized litigation expenses were $2 billion 

higher than in second quarter 2013.

Charge-Offs Fall to Seven-Year Low

Loan losses declined year over year for a 16th consecutive quarter, falling to $9.9 billion from $14.1 billion in 

second quarter 2013. This is the lowest quarterly net 

charge-off total for the industry since second quarter 

2007. The decline was led by 1-to-4 family residential 

mortgage loans, where net charge-offs fell by $2.2 

billion (74.7 percent). Net charge-offs were down year 

over year in all major loan categories except auto loans, 

where charge-offs increased $31 million (10.4 percent). 

Slightly more than half of all banks—50.8 percent—

reported lower quarterly net charge-offs than in second 

quarter 2013.

Noncurrent Loan Rate Falls to Six-Year Low

Noncurrent loan balances improved for a 17th consecutive quarter, falling by $13.4 billion (6.9 percent) 

during the three months ended June 30. Noncurrent 

balances declined in all major loan categories except 

auto loans, where they increased by $28 million 

(3.2 percent). The largest decline occurred in noncurrent 1-to-4 family residential mortgages, which fell by 

$8 billion (6.4 percent). Noncurrent real estate loans 

secured by nonfarm nonresidential properties fell by 

$1.9 billion (9.6 percent), and noncurrent real estate 

construction loans declined by $1.2 billion (15.9 

percent). At the end of the quarter, the industry’s 

noncurrent loan rate was 2.24 percent, the lowest level 

since second quarter 2008.

Reserve Coverage of Noncurrent Loans Improves 

for Seventh Consecutive Quarter

Loan-loss reserves declined for a 17th consecutive quarter, as charge-offs removed more from reserves than 

banks added in provisions. Reserve balances fell by 

$4.1 billion (3.1 percent) during the quarter, as net 

charge-offs exceeded loss provisions by $3.3 billion. 

More than one-third of all banks (38.3 percent) 

reduced their loan-loss reserves. Despite the decline in 

reserves, the industry’s coverage ratio of reserves to 

noncurrent loans and leases rose from 67.8 percent to 

70.5 percent, thanks to the larger reduction in noncurrent loan balances. This is the seventh consecutive 

quarter that the coverage ratio has improved. The ratio 

is at its highest level since year-end 2008.

Chart 4

Quarterly Noninterest Income From Sale, Securitization, 

and Servicing of 1-to-4 Family Residential Mortgage Loans* Billions of Dollars

Source: FDIC.

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

de minimis reporting conditions.

1.51.2

-0.8

1.2 1.71.50.9

4.7

7.1

4.7

5.6

3.7

4.3

6.2

3.63.23.7

8.0

7.3

8.8

7.47.5

8.6

4.7

5.3

3.5

5.0

0.9

4.4 4.7

-$2

$0

$2

$4

$6

$8

$10

1 2 341234123412341234 1 2 3 4 1 2 3 4 1 2

2007 2008 2009 2010 2011 2012 2013 2014

Chart 3

Quarterly Net Operating Revenue

All FDIC-Insured Institutions

Billions of Dollars

Source: FDIC.

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

123412341234123412341234123412

2007 2008 2009 2010 2011 2012 2013 2014

Quarterly Noninterest Income

Quarterly Net Interest Income
FDIC Quarterly 3 2014, Volume 8, No. 3

Quarterly Banking Profile

Rebound in Securities Values Bolsters 

Equity Growth

Equity capital rose by $34.2 billion (2 percent) during 

the quarter. Retained earnings added $17.6 billion to 

equity growth. Lower interest rates produced a $20 

billion increase in unrealized gains on available-for-sale 

securities, which also contributed to the growth in 

equity. In addition, goodwill increased by $3.8 billion 

(1.3 percent). Tier 1 regulatory capital, unaffected by 

changes in unrealized securities gains and goodwill, 

increased by $19.8 billion (1.4 percent). The average 

equity-to-assets ratio rose from 11.23 percent to 11.26 

percent, the highest level in almost two years. The 

average Tier 1 leverage ratio rose from 9.54 percent to 

9.57 percent, the highest level for this regulatory capital 

ratio since risk-based capital standards were enacted in 

1991. Insured institutions declared $22.6 billion in 

dividends in second quarter, up from $20.9 billion in 

second quarter 2013. At the end of the quarter, 98.4 

percent of all insured institutions, representing 99.8 

percent of all insured institution assets, met or exceeded 

the requirements for the highest regulatory capital category as defined for Prompt Corrective Action purposes.

Increase in Loan Balances Is Largest Since 2007

Total assets increased by $263.1 billion (1.8 percent), as 

loan and lease balances grew by $178.5 billion (2.3 

percent), investment securities portfolios rose by 

$58.6 billion (1.9 percent), and balances at Federal 

Reserve banks increased by $28.2 billion (2.3 percent). 

The growth in loan balances was the largest quarterly 

increase since fourth quarter 2007 (excluding a change 

in accounting rules in first quarter 2010). Loan growth 

was led by commercial and industrial loans (up $49.9 

billion, 3.1 percent), 1-to-4 family residential mortgages 

(up $22.7 billion, 1.2 percent), credit card balances (up 

$20 billion, 3 percent), and auto loans (up $10.9 

billion, 3 percent). All major loan categories posted 

increases during the quarter except home equity lines of 

credit (down $4.4 billion, 0.9 percent). Loans to small 

businesses and farms rose by $8.2 billion (1.3 percent), 

the largest quarterly increase since banks began reporting small-business loan data on a quarterly basis in 

2010. Banks’ holdings of available-for-sale securities 

increased by $13.9 billion (0.6 percent), as a result of a 

$20 billion increase in their market values; the book 

value of the industry’s available-for-sale portfolio registered a slight $6.1 billion decline. In contrast, banks 

increased their portfolios of held-to-maturity securities 

by $44.7 billion (8.3 percent). Unfunded loan commitments increased by $132.2 billion (2.1 percent), the 

largest quarterly increase since first quarter 2010. 

Growth in unfunded commitments was led by a 

$44.5 billion (2.8 percent) increase in unfunded 

commercial and industrial loan commitments.

Chart 5

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

All FDIC-Insured Institutions

Billions of Dollars

Source: FDIC.

-$35

-$30

-$25

-$20

-$15

-$10

-$5

$0

12341234123 4 1 2

-30.7

-1.9

2011 2012 2013 2014

Chart 6

Noncurrent Loan Rate and Quarterly Net Charge-Off Rate

All FDIC-Insured Institutions

Percent

Source: FDIC.

0

1

2

3

4

5

6

2006 2007 2008 2009 2010 2011 2012 2013 2014

Noncurrent Loan Rate

Quarterly Net Charge-Off Rate
FDIC Quarterly 4 2014, Volume 8, No. 3

Large Denomination Noninterest-Bearing Deposits 

Post Strong Growth

Total deposits increased by $172.4 billion (1.5 percent) 

in the quarter. Growth was led by balances in accounts 

larger than $250,000, which increased by $157.5 billion 

(3.2 percent). Balances in domestic deposit accounts of 

$250,000 or less declined by $13.5 billion (0.3 percent). 

Noninterest-bearing accounts in domestic offices were 

up $115 billion (4.3 percent), while deposits in foreign 

offices rose by $35.8 billion (2.6 percent). Nondeposit 

liabilities increased by $56.5 billion (3 percent), as 

banks increased their borrowings from Federal Home 

Loan Banks by $45.6 billion (11.6 percent). Almost 90 

percent of the growth in FHLB advances consisted of 

short-term borrowings (maturing or repricing in one 

year or less). Banks also increased their unsecured 

nondeposit borrowings that mature in one to three 

years by $17.5 billion (21.7 percent). Almost 90 

percent of the $228.9 billion increase in liabilities 

during the quarter consisted of liabilities maturing or 

repricing in one year or less.

“Problem List” Shrinks to Smallest Level in 

Over Five Years

The number of insured institutions filing quarterly 

financial reports declined from 6,730 to 6,656 in the 

second quarter. Mergers absorbed 61 institutions during 

the quarter, while seven institutions failed. No new 

charters were added in the quarter. The number of 

institutions on the FDIC’s “Problem List” declined from 

411 to 354. This is the smallest number of “problem” 

institutions since the end of first quarter 2009, and is 60 

percent below the most recent peak level of 888 “problem” institutions at the end of first quarter 2011. Total 

assets of “problem” institutions declined from $126.1 

billion to $110.2 billion. The number of full-time 

equivalent employees at FDIC-insured institutions 

increased from 2,058,867 to 2,060,002, but remained 

below the year-earlier level of 2,097,284.

Author: Ross Waldrop, Senior Banking Analyst

Division of Insurance and Research

(202) 898-3951

Chart 7

Quarterly Change in Loan Balances

All FDIC-Insured Institutions

Billions of Dollars

43

189

237

203

61

28

-6

-116-140

-109

-210

-133 -107

-7 -14

-126

67

24

-63

102

65

118

-37

73 70 91

38

178

221*

134

-$250

-$200

-$150

-$100

-$50

$0

$50

$100

$150

$200

$250

$300

123412341234 1 2 3 4 1 2 3 4 1 2 341234 1 2

2007 2008 2009 2010

Source: FDIC.

*FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitized

loan balances back onto banks’ balance sheets in the first quarter of 2010. Although the 

total amount consolidated cannot be precisely quantified, the industry would have reported

a decline in loan balances for the quarter absent this change in accounting standards. 

2011 2012 2013 2014

Chart 8

Quarterly Changes in the Number of

Troubled Institutions

Source: FDIC.

27

81

53

111

136

150

73

54

31 24

-23-21-31 -40-38

-43

-39

-59

-38-48-56-57

50 45

41

45

41

30

26 22 26 18 16 15 12 8 12 14

54

4

-41

27

81

53

111

136

150

73

54

31 24

-23-21-31 -40-38

-43

-39

-59

-38-48-56-57

14

54

4

-41

2

2

9

12

21

24

4 6 2 5 7

-75

-50

-25

0

25

50

75

100

125

150

175

200

12341234123412341234123 4 1 2

2008 2009 2010 2011 2012 2013 2014

Quarterly Failures

Net Quarterly Change in 

Number of Problem Banks
FDIC Quarterly 5 2014, Volume 8, No. 3

Quarterly Banking Profile

TABLE I-A. Selected Indicators, All FDIC-Insured Institutions* 2014** 2013** 2013 2012 2011 2010 2009

Return on assets (%)������������������������������������������������������������������������������������������������������ 1.04 1.09 1.07 1.00 0.88 0.6

Return on equity (%)������������������������������������������������������������������������������������������������������� 9.27 9.74 9.54 8.91 7.79 5.8

Core capital (leverage) ratio (%) ������������������������������������������������������������������������������������ 9.57 9.34 9.41 9.15 9.07 8.

Noncurrent assets plus other real estate owned to assets (%) ������������������������������������ 1.40 1.90 1.63 2.20 2.61 3.

Net charge-offs to loans (%) ������������������������������������������������������������������������������������������ 0.51 0.78 0.69 1.10 1.55 2.

Asset growth rate (%) ����������������������������������������������������������������������������������������������������� 5.28 2.66 1.88 4.02 4.30 1.7

Net interest margin (%)��������������������������������������������������������������������������������������������������� 3.16 3.26 3.26 3.42 3.60 3.

Net operating income growth (%)����������������������������������������������������������������������������������� 0.12 16.81 12.84 17.81 43.57 1594.54 

Number of institutions reporting������������������������������������������������������������������������������������� 6,656 6,940 6,812 7,083 7,357 7,658 8,012

Commercial banks��������������������������������������������������������������������������������������������������� 5,757 5,980 5,876 6,096 6,291 6,530 6,840

Savings institutions ������������������������������������������������������������������������������������������������� 899 960 936 987 1,066 1,128 1,172

Percentage of unprofitable institutions (%)�������������������������������������������������������������������� 6.64 8.24 8.16 10.97 16.22 22.1

Number of problem institutions �������������������������������������������������������������������������������������� 354 553 467 651 813 884 702

Assets of problem institutions (in billions) ��������������������������������������������������������������������� $110 $192 $153 $233 $319 $390 $403

Number of failed institutions������������������������������������������������������������������������������������������� 12 16 24 51 92 157 140

Number of assisted institutions�������������������������������������������������������������������������������������� 0 0 0 0 0 0 8

* Excludes insured branches of foreign banks (IBAs)

** Through June 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending June 3

TABLE II-A. Aggregate Condition and Income Data, All FDIC-Insured Institutions

(dollar figures in millions)  2nd Quarter

2014

1st Quarter

2014

2nd Quarter

2013

%Change 

13Q2-14Q2

Number of institutions reporting������������������������������������������������������������������������������������� 6,656 6,730 6,940 -4.

Total employees (full-time equivalent)��������������������������������������������������������������������������� 2,060,002 2,058,867 2,097,284 -1.

CONDITION DATA

Total assets��������������������������������������������������������������������������������������������������������������������� $15,164,599 $14,901,492 $14,404,747 5.

Loans secured by real estate���������������������������������������������������������������������������������� 4,123,542 4,075,607 4,048,096 1.

 1-4 Family residential mortgages �������������������������������������������������������������������� 1,844,997 1,822,297 1,856,242 -0.

 Nonfarm nonresidential������������������������������������������������������������������������������������ 1,125,522 1,117,464 1,083,214 3.

 Construction and development 223,171 214,617 202,575 10.

 Home equity lines��������������������������������������������������������������������������������������������� 499,166 503,520 528,652 -5.

Commercial & industrial loans �������������������������������������������������������������������������������� 1,664,131 1,614,234 1,519,515 9.

Loans to individuals������������������������������������������������������������������������������������������������� 1,366,728 1,326,971 1,310,289 4.

 Credit cards ������������������������������������������������������������������������������������������������������ 678,337 658,386 670,289 1.

Farm loans��������������������������������������������������������������������������������������������������������������� 69,630 64,926 65,039 7.

Other loans & leases����������������������������������������������������������������������������������������������� 887,165 851,019 791,223 12.

Less: Unearned income ������������������������������������������������������������������������������������������ 1,854 1,901 1,831 1.

Total loans & leases ������������������������������������������������������������������������������������������������ 8,109,343 7,930,878 7,732,331 4.

Less: Reserve for losses����������������������������������������������������������������������������������������� 128,204 132,335 149,056 -14.

Net loans and leases����������������������������������������������������������������������������������������������� 7,981,139 7,798,543 7,583,275 5.

Securities����������������������������������������������������������������������������������������������������������������� 3,113,081 3,054,500 2,945,330 5.

Other real estate owned������������������������������������������������������������������������������������������ 27,898 29,362 32,627 -14.

Goodwill and other intangibles ������������������������������������������������������������������������������� 365,586 365,490 367,073 -0.

All other assets�������������������������������������������������������������������������������������������������������� 3,676,894 3,653,596 3,476,442 5.

Total liabilities and capital ���������������������������������������������������������������������������������������������� 15,164,599 14,901,492 14,404,747 5.

Deposits������������������������������������������������������������������������������������������������������������������� 11,490,259 11,317,852 10,780,467 6.

 Domestic office deposits���������������������������������������������������������������������������������� 10,058,717 9,922,103 9,395,525 7.

 Foreign office deposits������������������������������������������������������������������������������������� 1,431,542 1,395,749 1,384,942 3.

Other borrowed funds ��������������������������������������������������������������������������������������������� 1,378,186 1,342,993 1,328,800 3.

Subordinated debt��������������������������������������������������������������������������������������������������� 97,802 95,451 113,621 -13.

All other liabilities ���������������������������������������������������������������������������������������������������� 482,169 463,191 558,546 -13.

Total equity capital (includes minority interests)���������������������������������������������������� 1,716,183 1,682,005 1,623,313 5.

 Bank equity capital������������������������������������������������������������������������������������������� 1,707,437 1,673,268 1,608,497 6.

Loans and leases 30-89 days past due������������������������������������������������������������������������� 65,711 69,539 75,318 -12.

Noncurrent loans and leases ����������������������������������������������������������������������������������������� 181,757 195,185 239,309 -24.

Restructured loans and leases �������������������������������������������������������������������������������������� 94,202 97,144 102,074 -7.

Mortgage-backed securities ������������������������������������������������������������������������������������������ 1,700,887 1,690,536 1,678,439 1.

Earning assets���������������������������������������������������������������������������������������������������������������� 13,516,296 13,267,222 12,704,541 6.

FHLB Advances�������������������������������������������������������������������������������������������������������������� 437,650 392,000 369,402 18.

Unused loan commitments��������������������������������������������������������������������������������������������� 6,346,021 6,213,822 5,992,559 5.

Trust assets��������������������������������������������������������������������������������������������������������������������� 18,344,120 20,192,402 18,123,850 1.

Assets securitized and sold ������������������������������������������������������������������������������������������� 965,835 722,091 765,366 26.

Notional amount of derivatives��������������������������������������������������������������������������������������� 239,197,271 233,457,327 236,532,240 1.

INCOME DATA

First Half 

 2014

First Half 

 2013 %Change

2nd Quarter 

2014

2nd Quarter 

2013

%Change 

13Q2-14Q2

Total interest income ������������������������������������������������������������������� $233,131 $234,917 -0.8 $117,426 $117,104 0

Total interest expense ����������������������������������������������������������������� 23,859 27,852 -14.3 11,976 13,665 -12

Net interest income �������������������������������������������������������������� 209,271 207,065 1.1 105,450 103,439 1

Provision for loan and lease losses �������������������������������������������� 14,190 19,385 -26.8 6,593 8,491 -22

Total noninterest income������������������������������������������������������������� 123,015 133,709 -8.0 63,542 67,093 -5

Total noninterest expense ����������������������������������������������������������� 206,780 208,420 -0.8 104,902 106,429 -1

Securities gains (losses)������������������������������������������������������������� 1,595 3,439 -53.6 770 1,371 -43

Applicable income taxes ������������������������������������������������������������� 35,075 37,301 -6.0 17,766 18,521 -4

Extraordinary gains, net�������������������������������������������������������������� -4 -92 N/M -80 -33 N/M

Total net income (includes minority interests)��������������������� 77,833 79,015 -1.5 40,421 38,429 5

Bank net income������������������������������������������������������������ 77,462 78,588 -1.4 40,243 38,200 5

Net charge-offs���������������������������������������������������������������������������� 20,286 29,934 -32.2 9,921 14,066 -29

Cash dividends ���������������������������������������������������������������������������� 42,478 35,334 20.2 22,625 20,934 8

Retained earnings ����������������������������������������������������������������������� 34,984 43,254 -19.1 17,618 17,266 2

Net operating income����������������������������������������������������������� 76,712 76,624 0.1 39,966 37,490 6

N/M - Not Meaningful
FDIC Quarterly 6 2014, Volume 8, No. 3

TABLE III-A. Second Quarter 2014, All FDIC-Insured Institutions

Asset Concentration Groups*

SECOND QUARTER

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting����������������������� 6,656 16 4 1,493 3,300 570 56 390 765 62

Commercial banks������������������������������������� 5,757 13 4 1,473 2,975 173 44 354 668 53

Savings institutions ����������������������������������� 899 3 0 20 325 397 12 36 97 9

Total assets (in billions)������������������������������������ $15,164.6 $601.2 $3,794.6 $250.6 $5,059.5 $458.5 $212.7 $63.0 $138.

Commercial banks������������������������������������� 14,106.1 517.3 3,794.6 245.1 4,662.9 166.1 127.6 58.2 117

Savings institutions ����������������������������������� 1,058.5 83.9 0.0 5.6 396.7 292.5 85.2 4.8 

Total deposits (in billions)��������������������������������� 11,490.3 344.7 2,711.2 207.9 3,917.8 340.8 174.6 51.5 116

Commercial banks������������������������������������� 10,683.1 285.3 2,711.2 204.5 3,628.2 126.6 103.7 48.2 98

Savings institutions ����������������������������������� 807.2 59.4 0.0 3.4 289.6 214.2 71.0 3.4 

Bank net income (in millions) ��������������������������� 40,243 4,515 8,229 752 12,658 995 571 326 309 11,888

Commercial banks������������������������������������� 37,253 3,589 8,229 724 11,879 458 343 187 283 11,561

Savings institutions ����������������������������������� 2,990 926 0 27 779 537 228 139 27 327

Performance Ratios (annualized, %)

Yield on earning assets������������������������������������ 3.51 9.94 2.75 4.12 3.87 3.62 3.87 3.07

Cost of funding earning assets ������������������������ 0.36 0.67 0.38 0.49 0.40 0.67 0.44 0.38

Net interest margin������������������������������������ 3.15 9.27 2.37 3.63 3.46 2.95 3.43 2.70

Noninterest income to assets��������������������������� 1.69 4.33 1.82 0.62 1.33 1.00 1.21 4.85

Noninterest expense to assets������������������������� 2.79 6.01 2.59 2.48 2.89 2.47 2.45 4.53

Loan and lease loss provision to assets���������� 0.18 2.00 0.09 0.10 0.12 0.09 0.38 0.03

Net operating income to assets ����������������������� 1.06 3.04 0.88 1.18 1.01 0.85 1.08 2.02

Pretax return on assets ������������������������������������ 1.55 4.86 1.21 1.42 1.43 1.24 1.64 2.81

Return on assets����������������������������������������������� 1.07 3.03 0.88 1.20 1.01 0.87 1.08 2.07

Return on equity ����������������������������������������������� 9.54 20.62 9.33 10.79 8.43 7.48 11.06 15.04

Net charge-offs to loans and leases���������������� 0.50 2.96 0.77 0.12 0.26 0.25 0.45 0.28

Loan and lease loss provision to 

net charge-offs���������������������������������������������� 66.45 87.61 33.70 128.02 70.63 61.92 117.07 42.18 7

Efficiency ratio �������������������������������������������������� 60.96 45.18 65.79 62.04 63.92 65.11 53.98 61.60 7

% of unprofitable institutions���������������������������� 6.76 0.00 0.00 3.01 7.36 10.00 5.36 10.77

% of institutions with earnings gains���������������� 57.45 43.75 0.00 56.53 61.09 51.58 42.86 55.64 5

Structural Changes

New reporters�������������������������������������������� 0 0 0 0 0 0 0 0 0 0

Institutions absorbed by mergers ������������� 61 0 0 11 46 2 0 0 1 1

Failed institutions �������������������������������������� 7 0 0 1 3 1 0 0 2 0

PRIOR SECOND QUARTERS

(The way it was...)

Return on assets (%)��������������������������������2013 1.06 3.27 1.03 1.21 0.79 1.07 1.68 1.79

��������������������������������������2011 0.85 3.96 0.46 1.12 0.71 0.55 1.67 1.94

������������������������������������� 2009 -0.38 -7.92 -0.54 0.78 -0.20 0.56 0.64 1.28

Net charge-offs to loans & leases (%) �����2013 0.73 3.38 1.05 0.14 0.46 0.41 1.07 0.45

��������������������������������������2011 1.59 5.58 1.43 0.37 1.27 1.03 1.79 0.41

������������������������������������� 2009 2.57 10.78 3.07 0.61 2.07 1.27 2.80 0.71

* See Table V-A (page 10) for explanations

Note: Blue font identifies data that are also presented in the prior quarters’ data at bottom of table
FDIC Quarterly 7 2014, Volume 8, No. 3

Quarterly Banking Profile

TABLE III-A. Second Quarter 2014, All FDIC-Insured Institutions

Asset Size Distribution Geographic Regions*

SECOND QUARTER

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to 

$10 Billion

Greater 

Than 

$10 Billion New York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting����������������������������� 6,656 1,975 4,007 565 109 823 837 1,444 1,629 1,398 525

Commercial banks������������������������������������������� 5,757 1,744 3,469 451 93 456 756 1,201 1,560 1,306 478

Savings institutions ����������������������������������������� 899 231 538 114 16 367 81 243 69 92 47

Total assets (in billions)������������������������������������������ $15,164.6 $116.3 $1,234.7 $1,493.0 $12,320.7 $3,048.0 $3,049.5 $3,480.3 $3,302.9 $893

Commercial banks������������������������������������������� 14,106.1 102.9 1,044.1 1,198.0 11,761.1 2,579.3 2,962.4 3,368.8 3,242.4 78

Savings institutions ����������������������������������������� 1,058.5 13.4 190.6 295.0 559.6 468.7 87.1 111.5 60.5 

Total deposits (in billions)��������������������������������������� 11,490.3 98.3 1,029.6 1,161.6 9,200.8 2,271.1 2,353.3 2,528.9 2,518.9 74

Commercial banks������������������������������������������� 10,683.1 87.8 877.7 941.9 8,775.7 1,932.8 2,288.3 2,445.7 2,471.2 

Savings institutions ����������������������������������������� 807.2 10.5 151.9 219.7 425.1 338.4 65.0 83.2 47.7

Bank net income (in millions) ��������������������������������� 40,243 251 3,118 3,866 33,009 7,273 6,977 9,055 9,356 2,596 4,986

Commercial banks������������������������������������������� 37,253 226 2,701 3,201 31,125 6,509 6,803 8,712 9,253 2,239 3,738

Savings institutions ����������������������������������������� 2,990 25 416 665 1,883 764 174 343 104 357 1,248

Performance Ratios (annualized, %)

Yield on earning assets������������������������������������������ 3.51 4.14 4.19 4.23 3.35 3.73 3.44 2.78 3.7

Cost of funding earning assets ������������������������������ 0.36 0.48 0.50 0.44 0.33 0.41 0.30 0.29 0.4

Net interest margin������������������������������������������ 3.15 3.65 3.69 3.79 3.01 3.33 3.14 2.49 3.3

Noninterest income to assets��������������������������������� 1.69 1.10 1.10 1.24 1.81 1.54 1.64 2.00 1.5

Noninterest expense to assets������������������������������� 2.79 3.38 3.13 3.11 2.72 2.77 2.96 2.70 2.6

Loan and lease loss provision to assets���������������� 0.18 0.09 0.12 0.14 0.19 0.30 0.16 0.08 0.1

Net operating income to assets ����������������������������� 1.06 0.83 0.99 1.04 1.08 0.97 0.89 1.05 1.1

Pretax return on assets ������������������������������������������ 1.55 1.01 1.28 1.46 1.59 1.46 1.32 1.42 1.6

Return on assets����������������������������������������������������� 1.07 0.86 1.01 1.05 1.08 0.97 0.92 1.05 1.1

Return on equity ����������������������������������������������������� 9.54 7.15 9.23 8.79 9.69 8.09 7.42 10.69 10.95 

Net charge-offs to loans and leases���������������������� 0.50 0.18 0.23 0.26 0.57 0.72 0.38 0.34 0.6

Loan and lease loss provision to 

net charge-offs���������������������������������������������������� 66.45 83.99 84.34 80.99 64.43 77.26 71.03 51.85 43.96 9

Efficiency ratio �������������������������������������������������������� 60.96 75.80 69.22 64.56 59.52 59.09 66.69 63.57 57.82 

% of unprofitable institutions���������������������������������� 6.76 12.15 4.84 2.83 0.00 7.78 10.16 7.69 4.3

% of institutions with earnings gains���������������������� 57.45 52.51 59.05 63.89 55.05 53.46 59.14 54.50 58.26 

Structural Changes

New reporters�������������������������������������������������� 0 0 0 0 0 0 0 0 0 0 0

Institutions absorbed by mergers ������������������� 61 12 38 10 1 5 11 11 13 12 9

Failed institutions �������������������������������������������� 7 5 2 0 0 1 2 3 0 1 0

PRIOR SECOND QUARTERS

(The way it was...)

Return on assets (%)��������������������������������������2013 1.06 0.77 0.95 1.27 1.05 0.53 1.02 1.12 1.2

��������������������������������������������2011 0.85 0.53 0.53 0.93 0.88 1.20 0.44 0.71 1.2

������������������������������������������� 2009 -0.38 0.03 -0.17 -0.83 -0.34 -1.91 -0.04 0.18 0.74

Net charge-offs to loans & leases (%) �����������2013 0.73 0.35 0.37 0.43 0.83 1.00 0.70 0.48 0.9

��������������������������������������������2011 1.59 0.63 0.91 1.22 1.76 1.81 1.69 1.30 1.8

������������������������������������������� 2009 2.57 0.91 1.14 2.23 2.89 2.91 2.26 2.40 2.5

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

Note: Blue font identifies data that are also presented in the prior quarters’ data at bottom of table
FDIC Quarterly 8 2014, Volume 8, No. 3

TABLE IV-A. First Half 2014, All FDIC-Insured Institutions

Asset Concentration Groups*

FIRST HALF

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting����������������������� 6,656 16 4 1,493 3,300 570 56 390 765 62

Commercial banks������������������������������������� 5,757 13 4 1,473 2,975 173 44 354 668 53

Savings institutions ����������������������������������� 899 3 0 20 325 397 12 36 97 9

Total assets (in billions)������������������������������������ $15,164.6 $601.2 $3,794.6 $250.6 $5,059.5 $458.5 $212.7 $63.0 $138.

Commercial banks������������������������������������� 14,106.1 517.3 3,794.6 245.1 4,662.9 166.1 127.6 58.2 117

Savings institutions ����������������������������������� 1,058.5 83.9 0.0 5.6 396.7 292.5 85.2 4.8 

Total deposits (in billions)��������������������������������� 11,490.3 344.7 2,711.2 207.9 3,917.8 340.8 174.6 51.5 116

Commercial banks������������������������������������� 10,683.1 285.3 2,711.2 204.5 3,628.2 126.6 103.7 48.2 98

Savings institutions ����������������������������������� 807.2 59.4 0.0 3.4 289.6 214.2 71.0 3.4 

Bank net income (in millions) ��������������������������� 77,462 9,658 15,401 1,438 24,380 1,866 1,105 617 593 22,404

Commercial banks������������������������������������� 71,603 7,762 15,401 1,386 22,849 891 682 358 541 21,733

Savings institutions ����������������������������������� 5,859 1,896 0 52 1,531 975 423 259 52 671

Performance Ratios (annualized, %)

Yield on earning assets������������������������������������ 3.52 10.01 2.75 4.08 3.85 3.65 3.82 3.09

Cost of funding earning assets ������������������������ 0.36 0.66 0.38 0.49 0.41 0.67 0.45 0.38

Net interest margin������������������������������������ 3.16 9.35 2.37 3.59 3.45 2.98 3.37 2.71

Noninterest income to assets��������������������������� 1.65 4.37 1.74 0.60 1.27 1.00 1.14 4.75

Noninterest expense to assets������������������������� 2.78 5.78 2.51 2.48 2.85 2.49 2.35 4.56

Loan and lease loss provision to assets���������� 0.19 2.05 0.12 0.10 0.13 0.15 0.39 0.04

Net operating income to assets ����������������������� 1.03 3.25 0.83 1.14 0.98 0.79 1.06 1.94

Pretax return on assets ������������������������������������ 1.51 5.16 1.18 1.36 1.39 1.19 1.62 2.68

Return on assets����������������������������������������������� 1.04 3.25 0.82 1.16 0.98 0.82 1.06 1.97

Return on equity ����������������������������������������������� 9.27 22.10 8.81 10.46 8.23 7.08 10.88 14.48

Net charge-offs to loans and leases���������������� 0.51 2.98 0.74 0.10 0.26 0.26 0.50 0.21

Loan and lease loss provision to 

net charge-offs���������������������������������������������� 69.95 88.50 46.79 164.59 72.70 97.91 109.58 72.40 8

Efficiency ratio �������������������������������������������������� 61.17 42.96 65.10 62.86 64.35 65.19 53.06 62.69 7

% of unprofitable institutions���������������������������� 6.64 0.00 0.00 2.61 7.36 9.82 7.14 9.49

% of institutions with earnings gains���������������� 55.89 50.00 50.00 56.73 59.03 47.72 30.36 53.59 5

Condition Ratios (%)

Earning assets to total assets �������������������������� 89.13 92.30 87.47 92.56 89.56 93.80 95.09 91.51 9

Loss allowance to:

Loans and leases �������������������������������������� 1.58 3.31 2.01 1.46 1.41 1.26 1.01 1.90

Noncurrent loans and leases �������������������� 70.54 331.46 81.28 137.38 86.32 41.42 87.85 103.77 7

Noncurrent assets plus

other real estate owned to assets ���������������� 1.40 0.78 0.97 0.90 1.43 2.10 0.89 0.84

Equity capital ratio�������������������������������������������� 11.26 14.61 9.42 11.26 12.05 11.71 9.83 13.99 1

Core capital (leverage) ratio ���������������������������� 9.57 12.70 8.36 10.48 10.24 10.97 9.62 13.15 

Tier 1 risk-based capital ratio��������������������������� 12.98 13.18 12.23 14.78 12.77 20.88 13.89 30.26 1

Total risk-based capital ratio ���������������������������� 14.47 15.43 13.13 15.90 14.36 21.94 14.66 31.33 2

Net loans and leases to deposits��������������������� 69.46 131.40 47.90 74.73 86.66 79.31 86.59 33.50 6

Net loans to total assets ���������������������������������� 52.63 75.33 34.23 61.99 67.10 58.94 71.08 27.39 5

Domestic deposits to total assets �������������������� 66.33 54.95 43.96 82.95 76.53 74.14 82.08 80.87 8

Structural Changes

New reporters�������������������������������������������� 0 0 0 0 0 0 0 0 0 0

Institutions absorbed by mergers ������������� 135 0 0 24 93 5 0 2 5 6

Failed institutions �������������������������������������� 12 0 0 1 7 2 0 0 2 0

PRIOR FIRST HALVES

(The way it was...)

Number of institutions ������������������������������2013 6,940 16 4 1,521 3,455 603 47 416 810 68

��������������������������������������2011 7,513 20 4 1,544 3,953 716 72 347 794 63

������������������������������������� 2009 8,195 24 5 1,551 4,637 808 80 294 743 53

Total assets (in billions)����������������������������2013 $14,404.7 $590.5 $3,645.4 $236.0 $4,723.9 $562.0 $103.9 $64.1 $143.

��������������������������������������2011 13,602.6 656.0 3,328.1 204.2 4,132.2 773.8 97.7 50.0 129

������������������������������������� 2009 13,279.7 464.5 3,204.0 170.1 5,947.0 933.4 84.0 36.0 101

Return on assets (%)��������������������������������2013 1.09 3.19 1.00 1.17 0.87 1.01 1.60 1.73

��������������������������������������2011 0.85 3.81 0.53 1.09 0.66 0.49 1.60 1.65

������������������������������������� 2009 -0.26 -9.56 0.05 0.88 -0.18 0.57 0.28 0.73

Net charge-offs to loans & leases (%) �����2013 0.78 3.37 1.12 0.12 0.49 0.42 1.13 0.44

��������������������������������������2011 1.71 6.12 1.69 0.33 1.29 1.01 1.86 0.57

������������������������������������� 2009 2.25 9.57 2.73 0.47 1.76 1.13 2.71 0.81

Noncurrent assets plus 

OREO to assets (%)������������������������������2013 1.90 0.92 1.28 1.03 1.94 2.30 0.89 1.00

��������������������������������������2011 2.76 1.51 1.76 1.62 3.38 2.72 1.00 1.01

������������������������������������� 2009 2.78 2.56 2.25 1.45 3.36 2.96 1.14 0.72

Equity capital ratio (%)������������������������������2013 11.17 15.10 8.87 11.01 11.86 11.23 9.84 14.42 1

��������������������������������������2011 11.29 17.21 8.28 11.26 11.86 10.56 9.93 15.65 1

������������������������������������� 2009 10.42 21.20 8.42 11.08 10.54 9.47 9.95 16.59 1

* See Table V-A (page 10) for explanations

Note: Blue font identifies data that are also presented in the prior halves’ data at bottom of table
FDIC Quarterly 9 2014, Volume 8, No. 3

Quarterly Banking Profile

TABLE IV-A. First Half 2014, All FDIC-Insured Institutions

Asset Size Distribution Geographic Regions*

FIRST HALF

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to 

$10 Billion

Greater 

Than 

$10 Billion New York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting����������������������������� 6,656 1,975 4,007 565 109 823 837 1,444 1,629 1,398 525

Commercial banks������������������������������������������� 5,757 1,744 3,469 451 93 456 756 1,201 1,560 1,306 478

Savings institutions ����������������������������������������� 899 231 538 114 16 367 81 243 69 92 47

Total assets (in billions)������������������������������������������ $15,164.6 $116.3 $1,234.7 $1,493.0 $12,320.7 $3,048.0 $3,049.5 $3,480.3 $3,302.9 $893

Commercial banks������������������������������������������� 14,106.1 102.9 1,044.1 1,198.0 11,761.1 2,579.3 2,962.4 3,368.8 3,242.4 78

Savings institutions ����������������������������������������� 1,058.5 13.4 190.6 295.0 559.6 468.7 87.1 111.5 60.5 

Total deposits (in billions)��������������������������������������� 11,490.3 98.3 1,029.6 1,161.6 9,200.8 2,271.1 2,353.3 2,528.9 2,518.9 74

Commercial banks������������������������������������������� 10,683.1 87.8 877.7 941.9 8,775.7 1,932.8 2,288.3 2,445.7 2,471.2 

Savings institutions ����������������������������������������� 807.2 10.5 151.9 219.7 425.1 338.4 65.0 83.2 47.7

Bank net income (in millions) ��������������������������������� 77,462 477 5,882 7,546 63,558 14,748 13,607 15,864 18,543 4,989 9,711

Commercial banks������������������������������������������� 71,603 427 5,098 6,328 59,751 13,236 13,256 15,354 18,277 4,312 7,168

Savings institutions ����������������������������������������� 5,859 51 784 1,217 3,807 1,512 351 510 266 678 2,543

Performance Ratios (annualized, %)

Yield on earning assets������������������������������������������ 3.52 4.12 4.17 4.21 3.36 3.77 3.46 2.79 3.7

Cost of funding earning assets ������������������������������ 0.36 0.49 0.51 0.44 0.33 0.41 0.30 0.30 0.4

Net interest margin������������������������������������������ 3.16 3.63 3.66 3.77 3.02 3.37 3.16 2.49 3.3

Noninterest income to assets��������������������������������� 1.65 1.08 1.05 1.21 1.77 1.52 1.65 1.86 1.5

Noninterest expense to assets������������������������������� 2.78 3.37 3.12 3.07 2.70 2.74 3.00 2.67 2.6

Loan and lease loss provision to assets���������������� 0.19 0.09 0.12 0.15 0.20 0.33 0.16 0.11 0.1

Net operating income to assets ����������������������������� 1.03 0.80 0.94 1.01 1.04 0.98 0.87 0.93 1.1

Pretax return on assets ������������������������������������������ 1.51 0.97 1.22 1.44 1.55 1.48 1.30 1.28 1.6

Return on assets����������������������������������������������������� 1.04 0.82 0.96 1.03 1.05 0.99 0.90 0.93 1.1

Return on equity ����������������������������������������������������� 9.27 6.88 8.83 8.68 9.42 8.26 7.31 9.49 10.91 

Net charge-offs to loans and leases���������������������� 0.51 0.18 0.20 0.26 0.59 0.73 0.42 0.36 0.6

Loan and lease loss provision to 

net charge-offs���������������������������������������������������� 69.95 87.54 92.19 89.92 67.54 82.63 66.90 66.80 46.26 8

Efficiency ratio �������������������������������������������������������� 61.17 76.23 70.17 64.95 59.65 58.70 67.19 65.14 57.30 

% of unprofitable institutions���������������������������������� 6.64 12.10 4.74 2.30 0.00 7.17 11.11 8.03 3.93

% of institutions with earnings gains���������������������� 55.89 52.71 57.03 59.65 52.29 51.03 59.74 52.35 58.01 

Condition Ratios (%)

Earning assets to total assets ��������������������������������� 89.13 91.71 92.23 91.24 88.54 89.48 87.67 88.56 88.76 

Loss allowance to:

Loans and leases ��������������������������������������������� 1.58 1.62 1.53 1.45 1.61 1.60 1.46 1.71 1.7

Noncurrent loans and leases ��������������������������� 70.54 95.99 95.35 78.95 67.20 97.63 50.40 71.14 61.69 8

Noncurrent assets plus

other real estate owned to assets ����������������������� 1.40 1.63 1.62 1.62 1.34 0.99 1.90 1.30 1.6

Equity capital ratio��������������������������������������������������� 11.26 12.15 11.09 11.92 11.19 11.92 12.42 9.87 10.44 

Core capital (leverage) ratio ����������������������������������� 9.57 11.88 10.72 10.64 9.29 9.88 9.50 8.74 9.21 

Tier 1 risk-based capital ratio���������������������������������� 12.98 19.44 15.78 14.47 12.48 13.58 12.78 11.84 12.48 

Total risk-based capital ratio ����������������������������������� 14.47 20.54 16.94 15.62 14.05 15.31 14.46 13.02 14.11 

Net loans and leases to deposits���������������������������� 69.46 66.11 75.85 84.37 66.90 70.50 73.99 61.33 67.64 

Net loans to total assets ����������������������������������������� 52.63 55.88 63.25 65.64 49.96 52.53 57.10 44.56 51.59 

Domestic deposits to total assets ��������������������������� 66.33 84.54 83.33 77.41 63.11 65.52 73.85 60.79 57.33 

Structural Changes

New reporters�������������������������������������������������� 0 0 0 0 0 0 0 0 0 0 0

Institutions absorbed by mergers ������������������� 135 44 75 14 2 11 26 25 30 27 16

Failed institutions �������������������������������������������� 12 7 5 0 0 2 3 4 0 2 1

PRIOR FIRST HALVES

(The way it was...)

Number of institutions ������������������������������������2013 6,940 2,141 4,146 546 107 858 884 1,483 1,686 1,468 561

��������������������������������������������2011 7,513 2,550 4,296 561 106 932 990 1,575 1,804 1,570 642

������������������������������������������� 2009 8,195 3,013 4,484 582 116 996 1,164 1,685 1,914 1,680 756

Total assets (in billions)����������������������������������2013 $14,404.7 $124.8 $1,256.7 $1,413.9 $11,609.3 $2,855.1 $2,980.2 $3,344.1 $3,082.9 $867

��������������������������������������������2011 13,602.6 146.0 1,272.9 1,422.1 10,761.6 2,769.3 2,916.0 3,119.5 1,672.3 78

������������������������������������������� 2009 13,279.7 165.4 1,347.9 1,500.8 10,265.6 2,437.9 3,493.7 3,124.6 1,063.0 77

Return on assets (%)��������������������������������������2013 1.09 0.76 0.92 1.19 1.10 0.70 1.07 1.11 1.2

��������������������������������������������2011 0.85 0.53 0.53 0.82 0.90 1.12 0.53 0.69 1.2

������������������������������������������� 2009 -0.26 0.15 0.06 -0.50 -0.28 -1.86 0.15 0.15 0.65 

Net charge-offs to loans & leases (%) �����������2013 0.78 0.31 0.35 0.42 0.90 1.05 0.76 0.52 1.0

��������������������������������������������2011 1.71 0.54 0.84 1.29 1.92 2.05 1.75 1.36 1.9

������������������������������������������� 2009 2.25 0.76 0.95 1.81 2.57 2.56 1.97 2.01 2.3

Noncurrent assets plus 

OREO to assets (%)������������������������������������2013 1.90 1.90 2.11 2.14 1.85 1.26 2.76 1.74 2.1

��������������������������������������������2011 2.76 2.40 3.34 3.36 2.61 1.87 3.82 2.55 3.8

������������������������������������������� 2009 2.78 2.04 2.94 3.44 2.67 1.83 3.08 2.87 3.1

Equity capital ratio (%)������������������������������������2013 11.17 11.76 10.85 11.78 11.12 12.00 12.22 9.17 10.85 

��������������������������������������������2011 11.29 11.84 10.58 11.86 11.29 12.80 12.05 8.49 11.79 

������������������������������������������� 2009 10.42 12.44 9.92 10.60 10.42 11.79 10.97 8.55 10.79

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

Note: Blue font identifies data that are also presented in the prior halves’ data at bottom of table
FDIC Quarterly 10 2014, Volume 8, No. 3

TABLE V-A. Loan Performance, All FDIC-Insured Institutions

Asset Concentration Groups*

June 30, 2014 All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 

Billion

All Other 

>$1 

Billion

Percent of Loans 30-89 Days Past Due

All loans secured by real estate ��������������������������������������� 1.03 0.04 1.54 0.71 0.67 0.87 0.38 1.31

Construction and development��������������������������������� 0.52 0.00 0.65 0.87 0.49 0.50 0.84 1.23

Nonfarm nonresidential��������������������������������������������� 0.40 0.00 0.33 0.65 0.40 0.41 0.67 0.96

Multifamily residential real estate ����������������������������� 0.19 0.00 0.04 0.53 0.22 0.36 0.28 0.83

Home equity loans����������������������������������������������������� 0.66 0.65 0.94 0.44 0.54 0.60 0.42 0.36

Other 1-4 family residential��������������������������������������� 1.75 0.03 2.54 1.22 1.18 0.97 0.33 1.75

Commercial and industrial loans ������������������������������������� 0.26 0.77 0.30 0.94 0.25 0.40 0.21 1.31

Loans to individuals���������������������������������������������������������� 1.28 1.08 1.39 1.38 1.12 1.36 0.72 1.48

Credit card loans ������������������������������������������������������� 1.12 1.08 1.20 1.05 1.15 1.69 0.60 1.14

Other loans to individuals ����������������������������������������� 1.44 1.18 1.72 1.41 1.12 1.07 0.76 1.51

All other loans and leases (including farm) ��������������������� 0.16 0.39 0.18 0.46 0.20 0.11 0.11 0.33

Total loans and leases������������������������������������������������������ 0.81 1.05 0.93 0.70 0.57 0.84 0.55 1.27

Percent of Loans Noncurrent**

All real estate loans ���������������������������������������������������������� 3.82 0.58 5.84 1.29 2.27 3.38 1.83 2.13

Construction and development.................................. 2.77 

Nonfarm nonresidential��������������������������������������������� 1.60 3.61 1.04 1.86 1.54 1.82 4.07 2.13

Multifamily residential real estate ����������������������������� 0.61 0.00 0.45 0.63 0.65 0.91 0.19 1.79

Home equity loans����������������������������������������������������� 2.66 0.00 3.62 1.00 1.49 2.10 2.29 0.80

Other 1-4 family residential��������������������������������������� 6.33 0.49 9.87 1.26 3.62 3.75 1.40 1.93

Commercial and industrial loans ������������������������������������� 0.58 0.82 0.50 1.39 0.67 1.36 0.50 1.65

Loans to individuals���������������������������������������������������������� 0.90 1.02 1.03 0.54 0.82 1.03 0.77 0.66

Credit card loans ������������������������������������������������������� 1.07 1.04 1.10 0.23 1.20 1.58 1.09 0.69

Other loans to individuals ����������������������������������������� 0.74 0.73 0.91 0.57 0.77 0.53 0.68 0.66

All other loans and leases (including farm) ��������������������� 0.23 0.14 0.24 0.40 0.31 0.17 0.13 0.48

Total loans and leases������������������������������������������������������ 2.24 1.00 2.47 1.06 1.63 3.04 1.15 1.83

Percent of Loans Charged-Off (net, YTD)

All real estate loans ���������������������������������������������������������� 0.21 0.03 0.30 0.07 0.21 0.19 0.17 0.11

Construction and development��������������������������������� 0.05 0.00 -0.26 -0.13 0.19 0.34 0.13 0.35 

Nonfarm nonresidential��������������������������������������������� 0.11 0.00 -0.03 0.10 0.15 0.12 -0.04 0.12 

Multifamily residential real estate ����������������������������� 0.02 0.00 0.00 0.14 0.02 0.09 0.00 -0.89 

Home equity loans����������������������������������������������������� 0.66 0.00 0.72 0.37 0.44 0.59 0.81 0.14

Other 1-4 family residential��������������������������������������� 0.21 0.03 0.29 0.12 0.25 0.17 0.08 0.12

Commercial and industrial loans ������������������������������������� 0.23 2.47 0.18 0.18 0.21 0.33 0.08 0.37

Loans to individuals���������������������������������������������������������� 2.04 3.05 2.98 0.35 0.94 1.70 0.80 0.45

Credit card loans ������������������������������������������������������� 3.33 3.11 3.93 0.83 3.63 2.84 2.16 1.75

Other loans to individuals ����������������������������������������� 0.73 1.45 1.33 0.31 0.53 0.59 0.38 0.33

All other loans and leases (including farm) ��������������������� 0.08 0.00 0.07 0.00 0.15 0.06 0.06 0.66

Total loans and leases������������������������������������������������������ 0.51 2.98 0.74 0.10 0.26 0.26 0.50 0.21

Loans Outstanding (in billions)

All real estate loans ���������������������������������������������������������� $4,123.5 $0.3 $479.1 $94.2 $2,100.3 $238.7 $58.9 $12.5 $58.

Construction and development��������������������������������� 223.2 0.0 6.5 4.9 164.1 4.9 1.3 0.

Nonfarm nonresidential��������������������������������������������� 1,125.5 0.0 36.8 25.7 809.9 21.3 5.4 4.5 

Multifamily residential real estate ����������������������������� 281.2 0.0 50.4 2.8 182.0 5.3 4.6 0.

Home equity loans����������������������������������������������������� 499.2 0.0 84.8 1.8 206.4 14.5 8.6 0.4

Other 1-4 family residential��������������������������������������� 1,845.0 0.2 240.3 24.1 703.4 191.5 38.9 5.7 

Commercial and industrial loans ������������������������������������� 1,664.1 37.3 279.7 19.7 814.6 8.0 9.0 2.3

Loans to individuals���������������������������������������������������������� 1,366.7 427.3 254.3 6.4 282.6 12.5 81.0 1.7

Credit card loans ������������������������������������������������������� 678.3 411.0 160.1 0.5 36.5 5.9 18.8 0.

Other loans to individuals ����������������������������������������� 688.4 16.3 94.1 5.9 246.1 6.5 62.2 1.6

All other loans and leases (including farm) ��������������������� 956.8 3.6 312.7 37.4 247.3 14.7 3.9 1.0

Total loans and leases (plus unearned income)�������������� 8,111.2 468.4 1,325.8 157.7 3,444.8 273.8 152.8 17.6 75

Memo: Other Real Estate Owned (in millions)

All other real estate owned����������������������������������������������� 27,898.3 0.2 3,019.0 576.3 15,685.1 1,235.2 138.4 199.9 633

Construction and development��������������������������������� 7,419.4 0.0 2.4 203.3 5,848.5 211.5 22.7 86.3 1

Nonfarm nonresidential��������������������������������������������� 6,128.1 0.0 72.2 201.2 4,626.0 132.4 36.4 68.3 2

Multifamily residential real estate ����������������������������� 611.2 0.0 2.0 20.5 455.7 15.1 0.9 5.5

1-4 family residential ������������������������������������������������� 6,223.6 0.2 666.3 107.2 3,410.4 406.6 67.1 37.8 202

Farmland�������������������������������������������������������������������� 289.4 0.0 0.0 43.9 207.3 2.2 0.2 2.0

GNMA properties������������������������������������������������������� 7,164.6 0.0 2,216.0 0.2 1,137.4 467.4 11.0 0.0 0

* Asset Concentration Group Definitions (Groups are hierarchical and mutually exclusive):

Credit-card Lenders - Institutions whose credit-card loans plus securitized receivables exceed 50 percent of total assets plus securitized receivables

International Banks - Banks with assets greater than $10 billion and more than 25 percent of total assets in foreign offices

Agricultural Banks - Banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of the total loans and leases

Commercial Lenders - Institutions whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties 

exceed 25 percent of total assets

Mortgage Lenders - Institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets

Consumer Lenders - Institutions whose residential mortgage loans, plus credit-card loans, plus other loans to individuals, exceed 50 percent of total assets

Other Specialized < $1 Billion - Institutions with assets less than $1 billion, whose loans and leases are less than 40 percent of total assets

All Other < $1 billion - Institutions with assets less than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset concentrations

All Other > $1 billion - Institutions with assets greater than $1 billion that do not meet any of the definitions above, they have significant lending activity with no identified asset 

concentrations

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status
FDIC Quarterly 11 2014, Volume 8, No. 3

Quarterly Banking Profile

TABLE V-A. Loan Performance, All FDIC-Insured Institutions

Asset Size Distribution Geographic Regions*

June 30, 2014 All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to 

$10 Billion

Greater 

Than 

$10 Billion New York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate ������������������������������ 1.03 1.26 0.74 0.63 1.19 0.69 1.18 1.05 1.5

Construction and development������������������������ 0.52 0.83 0.66 0.47 0.47 0.62 0.53 0.53 0.4

Nonfarm nonresidential������������������������������������ 0.40 1.12 0.56 0.38 0.32 0.44 0.40 0.46 0.2

Multifamily residential real estate �������������������� 0.19 0.65 0.48 0.18 0.15 0.16 0.29 0.17 0.1

Home equity loans�������������������������������������������� 0.66 0.72 0.54 0.53 0.68 0.46 0.73 0.81 0.6

Other 1-4 family residential������������������������������ 1.75 1.70 1.07 1.12 1.97 1.10 1.86 1.72 2.6

Commercial and industrial loans ���������������������������� 0.26 1.25 0.64 0.43 0.21 0.30 0.15 0.33 0.2

Loans to individuals������������������������������������������������� 1.28 1.95 1.57 1.41 1.26 1.04 1.90 1.25 1.3

Credit card loans ���������������������������������������������� 1.12 2.14 1.43 1.77 1.10 0.90 1.66 0.91 1.2

Other loans to individuals �������������������������������� 1.44 1.95 1.58 1.24 1.44 1.41 2.01 1.36 1.5

All other loans and leases (including farm) ������������ 0.16 0.46 0.37 0.26 0.14 0.09 0.07 0.31 0.1

Total loans and leases��������������������������������������������� 0.81 1.21 0.75 0.63 0.84 0.65 0.92 0.81 1.0

Percent of Loans Noncurrent** 

All real estate loans ������������������������������������������������� 3.82 1.94 1.75 2.24 4.72 2.48 5.10 4.26 5.2

Construction and development������������������������ 2.77 3.70 3.44 3.27 2.21 3.57 3.29 2.98 2.1

Nonfarm nonresidential������������������������������������ 1.60 2.40 1.81 1.59 1.49 1.87 1.54 1.82 1.5

Multifamily residential real estate �������������������� 0.61 2.10 1.18 0.68 0.47 0.43 0.64 0.79 0.8

Home equity loans�������������������������������������������� 2.66 1.12 0.89 1.08 2.95 1.96 3.50 2.73 2.7

Other 1-4 family residential������������������������������ 6.33 1.87 1.62 3.47 7.65 3.52 7.93 7.14 8.8

Commercial and industrial loans ���������������������������� 0.58 1.76 1.44 1.02 0.46 0.75 0.46 0.60 0.5

Loans to individuals������������������������������������������������� 0.90 0.83 1.12 0.70 0.91 0.90 0.97 0.77 1.0

Credit card loans ���������������������������������������������� 1.07 0.74 0.93 1.40 1.06 0.94 1.31 0.99 1.1

Other loans to individuals �������������������������������� 0.74 0.83 1.13 0.39 0.75 0.80 0.80 0.70 0.9

All other loans and leases (including farm) ������������ 0.23 0.64 0.47 0.41 0.20 0.38 0.14 0.12 0.2

Total loans and leases��������������������������������������������� 2.24 1.69 1.61 1.84 2.39 1.63 2.90 2.40 2.7

Percent of Loans Charged-Off (net, YTD) 

All real estate loans ������������������������������������������������� 0.21 0.16 0.16 0.15 0.24 0.20 0.28 0.26 0.2

Construction and development������������������������ 0.05 0.16 0.23 0.10 -0.05 0.43 0.15 0.11 -0.39

Nonfarm nonresidential������������������������������������ 0.11 0.20 0.15 0.14 0.08 0.16 0.16 0.15 0.0

Multifamily residential real estate �������������������� 0.02 0.08 0.14 0.05 -0.01 -0.02 0.04 0.06 0.0

Home equity loans�������������������������������������������� 0.66 0.19 0.21 0.27 0.73 0.40 0.91 0.64 0.7

Other 1-4 family residential������������������������������ 0.21 0.18 0.17 0.19 0.22 0.22 0.19 0.25 0.2

Commercial and industrial loans ���������������������������� 0.23 0.29 0.35 0.22 0.22 0.38 0.15 0.24 0.1

Loans to individuals������������������������������������������������� 2.04 0.40 0.65 1.54 2.11 2.34 1.72 1.25 2.7

Credit card loans ���������������������������������������������� 3.33 3.02 3.80 3.62 3.32 2.90 3.74 3.13 4.0

Other loans to individuals �������������������������������� 0.73 0.37 0.44 0.58 0.77 0.82 0.71 0.63 1.1

All other loans and leases (including farm) ������������ 0.08 0.00 0.14 0.15 0.07 0.10 0.04 0.12 0.0

Total loans and leases��������������������������������������������� 0.51 0.18 0.20 0.26 0.59 0.73 0.42 0.36 0.6

Loans Outstanding (in billions) 

All real estate loans ������������������������������������������������� $4,123.5 $45.7 $607.9 $712.8 $2,757.2 $831.9 $917.2 $796.7 $819.4 $3

Construction and development������������������������ 223.2 2.7 50.7 55.6 114.2 42.4 49.2 35.3 33.

Nonfarm nonresidential������������������������������������ 1,125.5 12.5 240.1 290.7 582.2 257.4 231.6 185.0 166.3 

Multifamily residential real estate �������������������� 281.2 1.4 31.6 62.7 185.6 98.7 34.8 75.6 24.

Home equity loans�������������������������������������������� 499.2 1.2 27.4 46.0 424.5 90.5 130.4 126.2 104.

Other 1-4 family residential������������������������������ 1,845.0 20.5 216.9 240.7 1,367.0 338.9 461.3 354.2 399.4 

Commercial and industrial loans ���������������������������� 1,664.1 8.1 105.2 161.1 1,389.8 256.1 397.1 345.0 353.1 

Loans to individuals������������������������������������������������� 1,366.7 4.1 35.2 69.5 1,257.9 385.8 244.0 202.9 294.0

Credit card loans ���������������������������������������������� 678.3 0.0 2.2 21.7 654.4 282.0 79.6 50.4 164.

Other loans to individuals �������������������������������� 688.4 4.1 33.0 47.8 603.5 103.8 164.4 152.4 129.8

All other loans and leases (including farm) ������������ 956.8 8.1 45.2 51.6 851.9 153.8 208.9 233.5 267.

Total loans and leases (plus unearned income)����� 8,111.2 66.1 793.5 994.9 6,256.7 1,627.6 1,767.2 1,578.0 1,734.2 

Memo: Other Real Estate Owned (in millions) 

All other real estate owned�������������������������������������� 27,898.3 770.3 7,116.0 5,721.6 14,290.4 3,295.7 6,365.2 7,073.8 6,345.1 3,23

Construction and development������������������������ 7,419.4 261.6 3,233.6 2,243.3 1,680.9 755.0 2,125.8 1,003.1 1,526.8 1,

Nonfarm nonresidential������������������������������������ 6,128.1 257.5 2,347.7 1,756.8 1,766.1 876.6 1,270.0 1,297.2 1,124.6 1,

Multifamily residential real estate �������������������� 611.2 31.0 179.0 144.5 256.8 187.8 79.5 114.0 135.

1-4 family residential ���������������������������������������� 6,223.6 204.5 1,210.9 1,144.2 3,663.9 1,175.4 1,595.3 1,527.8 960.1 

Farmland����������������������������������������������������������� 289.4 15.6 143.1 89.9 40.7 22.7 70.4 54.4 45.

GNMA properties���������������������������������������������� 7,164.6 0.1 1.6 342.8 6,820.0 278.2 1,224.1 3,077.3 2,490.

* Regions:

New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, 

U.S. Virgin Islan

Atlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia

Chicago - Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin

Kansas City - Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota

Dallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, Texas

San Francisco - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status
FDIC Quarterly 12 2014, Volume 8, No. 3

Table VI-A. Derivatives, All FDIC-Insured Call Report Filers

Asset Size Distribution

(dollar figures in millions;

notional amounts unless otherwise indicated)

2nd

Quarter 

2014

1st

Quarter 

2014

4th 

Quarter 

2013

3rd 

Quarter 

2013

2nd 

Quarter 

2013

% Change 

13Q2-

14Q2

Less 

Than $100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to $10 

Billion

Greater 

Than 

$10 Billion

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives����������������� 1,405 1,398 1,389 1,424 1,412 -0.5 73 853 378 10

Total assets of institutions reporting derivatives ���������� $13,507,684 $13,234,405 $13,064,419 $12,906,255 $12,690,326 6.4 $5,106 $353,901 $1,086,400 $12,062,27

Total deposits of institutions reporting derivatives������� 10,163,264 9,974,664 9,855,694 9,682,692 9,410,509 8.0 4,316 291,577 860,454 9,006,91

Total derivatives������������������������������������������������������������� 239,197,271 233,457,327 238,737,897 243,276,753 236,532,240 1.1 276 22,121 99,607 239,075,26

Derivative Contracts by Underlying Risk Exposure 

Interest rate�������������������������������������������������������������������� 191,551,724 185,829,933 194,555,371 195,710,387 188,190,450 1.8 275 20,007 92,219 191,439,22

Foreign exchange*��������������������������������������������������������� 33,401,040 32,994,578 29,668,744 31,200,455 31,471,711 6.1 0 1,946 6,313 33,392,78

Equity ����������������������������������������������������������������������������� 2,198,432 2,151,169 2,059,611 2,177,583 2,120,550 3.7 0 72 443 2,197,91

Commodity & other (excluding credit derivatives)�������� 1,214,397 1,263,060 1,208,874 1,339,676 1,367,298 -11.2 0 1 139 1,214,25

Credit������������������������������������������������������������������������������ 10,831,679 11,218,586 11,245,297 12,848,651 13,382,231 -19.1 0 95 492 10,831,09

Total�������������������������������������������������������������������������������� 239,197,271 233,457,327 238,737,897 243,276,753 236,532,240 1.1 276 22,121 99,607 239,075,26

Derivative Contracts by Transaction Type 

Swaps ���������������������������������������������������������������������������� 146,467,569 139,451,086 150,590,971 150,061,947 141,026,681 3.9 44 7,320 50,242 146,409,96

Futures & forwards �������������������������������������������������������� 45,312,386 44,424,250 42,022,121 42,067,188 43,970,239 3.1 77 7,851 26,312 45,278,14

Purchased options��������������������������������������������������������� 17,296,921 17,908,952 16,870,263 17,637,787 17,680,639 -2.2 20 781 4,802 17,291,31

Written options��������������������������������������������������������������� 16,872,663 17,629,522 16,929,743 17,784,103 17,800,582 -5.2 135 6,034 16,391 16,850,10

Total�������������������������������������������������������������������������������� 225,949,539 219,413,810 226,413,097 227,551,024 220,478,141 2.5 276 21,986 97,747 225,829,53

Fair Value of Derivative Contracts 

Interest rate contracts���������������������������������������������������� 72,249 72,732 71,270 64,832 60,694 19.0 1 36 118 72,09

Foreign exchange contracts������������������������������������������ 4,729 5,563 5,991 -10,390 -4,673 N/M 0 0 -17 4,746

Equity contracts������������������������������������������������������������� 426 1,548 32 -1,928 1,396 -69.5 0 3 6 41

Commodity & other (excluding credit derivatives)�������� 965 -893 1,350 1,181 1,298 -25.7 0 0 -5 97

Credit derivatives as guarantor������������������������������������� 92,998 80,869 74,838 27,220 -8,794 N/M 0 0 0 92,999

Credit derivatives as beneficiary����������������������������������� -88,369 -77,438 -71,220 -22,646 13,953 N/M 0 0 -25 -88,343

Derivative Contracts by Maturity** 

Interest rate contracts ����������������������������� < 1 year 81,212,239 77,936,411 77,933,066 91,852,227 88,198,011 -7.9 78 5,668 20,248 81,186,24

 ������������������������������������������ 1-5 years 38,531,976 37,667,856 44,472,861 32,988,175 30,694,796 25.5 31 3,424 24,383 38,504,13

 ������������������������������������������ > 5 years 24,201,832 24,282,239 24,885,748 21,753,489 20,836,833 16.1 32 4,094 24,036 24,173,66

Foreign exchange contracts ������������������� < 1 year 20,747,894 20,099,306 18,349,410 18,975,694 19,247,580 7.8 0 1,424 3,612 20,742,85

 ������������������������������������������ 1-5 years 2,420,184 2,299,021 2,325,624 2,870,026 2,737,466 -11.6 0 0 50 2,420,13

 ������������������������������������������ > 5 years 1,016,489 974,381 1,029,302 1,503,977 1,456,229 -30.2 0 0 0 1,016,48

Equity contracts��������������������������������������� < 1 year 698,674 673,720 645,046 694,983 651,964 7.2 0 3 97 698,57

 ������������������������������������������ 1-5 years 292,130 305,141 291,190 309,578 270,282 8.1 0 11 95 292,02

 ������������������������������������������ > 5 years 81,116 89,804 135,907 88,294 80,891 0.3 0 25 20 81,07

Commodity & other contracts ����������������� < 1 year 360,565 379,469 338,091 375,292 424,508 -15.1 0 0 77 360,48

 ������������������������������������������ 1-5 years 150,937 140,984 163,812 175,069 163,093 -7.5 0 0 4 150,93

 ������������������������������������������ > 5 years 18,082 18,960 5,903 16,142 15,300 18.2 0 0 0 18,08

Risk-Based Capital: Credit Equivalent Amount 

Total current exposure to tier 1 capital (%)������������������� 23.5 23.5 26.1 27.1 30.5 0.1 0.3

Total potential future exposure to tier 1 capital (%)������ 55.1 56.7 58.7 62.4 62.8 0.1 0.3

Total exposure (credit equivalent amount) 

to tier 1 capital (%) ����������������������������������������������������� 78.7 80.3 84.8 89.5 93.2 0.1 0.6

Credit losses on derivatives***���������������������������������� 68.7 12.9 264.2 180.7 145.0 -52.6 0.0 0.

HELD FOR TRADING 

Number of institutions reporting derivatives����������������� 247 243 252 241 241 2.5 10 85 89 6

Total assets of institutions reporting derivatives ���������� 10,881,762 10,629,709 10,550,446 10,392,702 10,153,698 7.2 676 39,978 314,445 10,526,66

Total deposits of institutions reporting derivatives������� 8,185,857 7,997,408 7,964,587 7,786,249 7,519,448 8.9 570 33,167 245,107 7,907,01

Derivative Contracts by Underlying Risk Exposure 

Interest rate�������������������������������������������������������������������� 188,491,623 182,694,007 190,612,660 191,930,195 184,196,259 2.3 102 2,134 22,799 188,466,58

Foreign exchange���������������������������������������������������������� 30,165,667 29,320,112 27,745,453 27,518,482 28,043,313 7.6 0 0 2,510 30,163,15

Equity ����������������������������������������������������������������������������� 2,182,209 2,135,205 2,042,887 2,162,079 2,106,250 3.6 0 0 120 2,182,08

Commodity & other�������������������������������������������������������� 1,206,811 1,256,235 1,200,547 1,330,681 1,356,542 -11.0 0 0 48 1,206,76

Total�������������������������������������������������������������������������������� 222,046,310 215,405,557 221,601,547 222,941,437 215,702,364 2.9 102 2,135 25,477 222,018,59

Trading Revenues: Cash & Derivative Instruments 

Interest rate�������������������������������������������������������������������� 3,041 1,847 403 3,129 2,608 16.6 0 0 12 3,02

Foreign exchange���������������������������������������������������������� 1,962 2,201 1,532 499 3,139 -37.5 0 0 1 1,96

Equity ����������������������������������������������������������������������������� 727 603 488 231 927 -21.6 0 0 6 72

Commodity & other (including credit derivatives) �������� 679 1,531 483 657 450 50.9 0 0 0 67

Total trading revenues��������������������������������������������������� 6,409 6,183 2,906 4,517 7,124 -10.0 0 0 20 6,38

Share of Revenue 

Trading revenues to gross revenues (%) ���������������������� 5.4 5.4 2.5 4.0 5.9 0.0 0.

Trading revenues to net operating revenues (%)���������� 24.4 26.9 11.3 20.9 30.5 0.0 0.2

HELD FOR PURPOSES OTHER THAN TRADING 

Number of institutions reporting derivatives����������������� 1,286 1,281 1,253 1,287 1,272 1.1 63 785 343 9

Total assets of institutions reporting derivatives ���������� 13,214,332 12,928,682 12,754,084 12,611,625 12,298,769 7.4 4,431 326,607 983,031 11,900,26

Total deposits of institutions reporting derivatives������� 9,932,683 9,732,821 9,611,265 9,449,509 9,103,518 9.1 3,746 268,797 780,293 8,879,84

Derivative Contracts by Underlying 

Risk Exposure 

Interest rate�������������������������������������������������������������������� 3,060,101 3,135,926 3,942,711 3,780,192 3,994,191 -23.4 173 17,872 69,420 2,972,63

Foreign exchange���������������������������������������������������������� 819,319 849,536 843,789 804,895 756,530 8.3 0 1,906 2,436 814,97

Equity ����������������������������������������������������������������������������� 16,223 15,965 16,724 15,504 14,300 13.4 0 72 323 15,82

Commodity & other�������������������������������������������������������� 7,586 6,825 8,327 8,995 10,756 -29.5 0 1 92 7,49

Total notional amount ���������������������������������������������������� 3,903,228 4,008,253 4,811,550 4,609,587 4,775,777 -18.3 174 19,851 72,270 3,810,93

All line items are reported on a quarterly basis. N/M - Not Meaningf

* 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 contract

** Derivative contracts subject to the risk-based capital requirements for derivatives

*** The reporting of credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and to those banks filing the FFIEC 041 report form that have $300 million or more 

in total assets
FDIC Quarterly 13 2014, Volume 8, No. 3

Quarterly Banking Profile

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

Asset Size Distribution

(dollar figures in millions)

2nd 

Quarter

2014

1st 

Quarter

2014

4th 

Quarter

2013

3rd 

Quarter

2013

2nd 

Quarter

2013

% Change 

13Q2-

14Q2

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to $10 

Billion

Greater 

Than $10 

Billion

Assets Securitized and Sold with Servicing Retained or with 

Recourse or Other Seller-Provided Credit Enhancements 

Number of institutions reporting securitization activities ����������������������������������������� 75 78 83 82 88 -14.8 0 28 15 3

Outstanding Principal Balance by Asset Type 

1-4 family residential loans�������������������������������������������������������������������������������� $843,849 $598,531 $610,275 $625,642 $634,877 32.9 $0 $2,980 $14,014 $826,85

Home equity loans��������������������������������������������������������������������������������������������� 39 41 42 44 46 -15.2 0 0 0 3

Credit card receivables�������������������������������������������������������������������������������������� 16,692 16,349 19,405 17,115 17,945 -7.0 0 128 0 16,56

Auto loans ���������������������������������������������������������������������������������������������������������� 4,312 4,735 4,676 4,708 3,860 11.7 0 865 0 3,44

Other consumer loans ��������������������������������������������������������������������������������������� 4,945 4,462 4,607 4,790 4,938 0.1 0 2 0 4,94

Commercial and industrial loans����������������������������������������������������������������������� 1,217 1,881 1,987 3,945 4,472 -72.8 0 15 0 1,20

All other loans, leases, and other assets���������������������������������������������������������� 94,782 96,092 101,456 104,890 99,226 -4.5 0 3,527 4,947 86,30

Total securitized and sold������������������������������������������������������������������������������������������ 965,835 722,091 742,448 761,133 765,366 26.2 0 7,517 18,960 939,35

Maximum Credit Exposure by Asset Type 

1-4 family residential loans�������������������������������������������������������������������������������� 2,908 2,912 2,794 2,927 3,086 -5.8 0 6 54 2,84

Home equity loans��������������������������������������������������������������������������������������������� 0 0 0 0 0 0.0 0 0 0 

Credit card receivables�������������������������������������������������������������������������������������� 1,450 1,455 603 554 557 160.3 0 57 0 1,39

Auto loans ���������������������������������������������������������������������������������������������������������� 0 5 0 0 0 0.0 0 0 0 

Other consumer loans ��������������������������������������������������������������������������������������� 192 174 164 168 168 14.3 0 0 0 19

Commercial and industrial loans����������������������������������������������������������������������� 25 38 27 20 33 -24.2 0 0 0 2

All other loans, leases, and other assets���������������������������������������������������������� 1,416 1,308 1,633 1,729 1,861 -23.9 0 1 0 1,41

Total credit exposure ������������������������������������������������������������������������������������������������� 5,991 5,892 5,221 5,397 5,705 5.0 0 64 54 5,87

Total unused liquidity commitments provided to institution's own securitizations ��� 17 120 121 121 121 -86.0 0 0 0 1

Securitized Loans, Leases, and Other Assets 30-89 Days Past Due (%) 

1-4 family residential loans�������������������������������������������������������������������������������� 3.5 3.3 4.3 4.1 4.3 0.0 1.

Home equity loans��������������������������������������������������������������������������������������������� 9.1 8.8 10.4 10.7 9.5 0.0 0.

Credit card receivables�������������������������������������������������������������������������������������� 0.8 0.9 0.8 1.0 0.8 0.0 1.

Auto loans ���������������������������������������������������������������������������������������������������������� 0.7 0.6 1.0 0.6 0.4 0.0 0.

Other consumer loans ��������������������������������������������������������������������������������������� 5.5 5.2 5.6 5.4 6.0 0.0 0.

Commercial and industrial loans����������������������������������������������������������������������� 0.0 0.0 0.0 0.0 0.0 0.0 0.

All other loans, leases, and other assets���������������������������������������������������������� 0.4 0.3 0.8 1.1 1.2 0.0 0.

Total loans, leases, and other assets ����������������������������������������������������������������������� 3.2 2.9 3.7 3.6 3.8 0.0 0.

Securitized Loans, Leases, and Other Assets 90 Days or More Past Due (%) 

1-4 family residential loans�������������������������������������������������������������������������������� 2.3 3.3 3.4 3.7 4.2 0.0 1.

Home equity loans��������������������������������������������������������������������������������������������� 40.3 37.8 36.5 34.4 32.3 0.0 0.0

Credit card receivables�������������������������������������������������������������������������������������� 0.6 0.7 0.6 0.6 0.4 0.0 1.

Auto loans ���������������������������������������������������������������������������������������������������������� 0.1 0.1 0.1 0.0 0.0 0.0 0.

Other consumer loans ��������������������������������������������������������������������������������������� 6.3 6.7 7.3 7.1 6.3 0.0 0.

Commercial and industrial loans����������������������������������������������������������������������� 0.0 0.0 0.0 0.0 0.0 0.0 3.

All other loans, leases, and other assets���������������������������������������������������������� 9.2 8.7 9.2 8.9 10.2 0.0 0.9

Total loans, leases, and other assets ����������������������������������������������������������������������� 2.9 3.9 4.1 4.3 4.9 0.0 1.

Securitized Loans, Leases, and Other Assets Charged-off 

(net, YTD, annualized, %) 

1-4 family residential loans�������������������������������������������������������������������������������� 0.2 0.1 0.9 0.7 0.5 0.0 0.

Home equity loans��������������������������������������������������������������������������������������������� 0.1 -0.1 0.2 0.3 0.2 0.0 0.

Credit card receivables�������������������������������������������������������������������������������������� 1.2 0.6 2.2 1.9 1.3 0.0 3.

Auto loans ���������������������������������������������������������������������������������������������������������� 0.1 0.0 0.2 0.1 0.1 0.0 0.

Other consumer loans ��������������������������������������������������������������������������������������� 0.3 0.2 0.9 0.7 0.4 0.0 0.

Commercial and industrial loans����������������������������������������������������������������������� 0.0 0.0 0.0 0.0 0.0 0.0 0.

All other loans, leases, and other assets���������������������������������������������������������� 0.9 0.7 0.9 0.6 0.5 0.0 0.

Total loans, leases, and other assets ����������������������������������������������������������������������� 0.3 0.2 0.9 0.7 0.5 0.0 0.

Seller's Interests in Institution's Own Securitizations - Carried as Loans 

Home equity loans��������������������������������������������������������������������������������������������� 0 0 0 0 0 0.0 0 0 0 

Credit card receivables�������������������������������������������������������������������������������������� 12,905 13,116 12,850 13,451 13,076 -1.3 0 281 0 12,62

Commercial and industrial loans����������������������������������������������������������������������� 2 2 3 3 3 -33.3 0 2 0 

Seller's Interests in Institution's Own Securitizations - Carried as Securities 

Home equity loans��������������������������������������������������������������������������������������������� 0 0 0 0 0 0.0 0 0 0 

Credit card receivables�������������������������������������������������������������������������������������� 0 0 0 0 0 0.0 0 0 0 

Commercial and industrial loans����������������������������������������������������������������������� 0 48 52 0 0 0.0 0 0 0 

Assets Sold with Recourse and Not Securitized 

Number of institutions reporting asset sales������������������������������������������������������������ 1,100 1,087 1,083 1,066 1,065 3.3 150 730 171 4

Outstanding Principal Balance by Asset Type 

1-4 family residential loans�������������������������������������������������������������������������������� 42,185 43,675 46,491 48,349 48,783 -13.5 1,697 13,324 8,212 18,95

Home equity, credit card receivables, auto, and other consumer loans ��������� 727 755 776 802 829 -12.3 0 2 5 71

Commercial and industrial loans����������������������������������������������������������������������� 53 69 62 64 71 -25.4 0 14 38 

All other loans, leases, and other assets���������������������������������������������������������� 65,112 65,974 67,794 62,143 63,988 1.8 1 82 192 64,83

Total sold and not securitized������������������������������������������������������������������������������������ 108,076 110,473 115,122 111,358 113,671 -4.9 1,698 13,422 8,448 84,50

Maximum Credit Exposure by Asset Type 

1-4 family residential loans�������������������������������������������������������������������������������� 9,587 9,529 10,728 11,607 12,225 -21.6 104 2,047 2,896 4,54

Home equity, credit card receivables, auto, and other consumer loans ��������� 141 155 160 156 151 -6.6 0 2 3 13

Commercial and industrial loans����������������������������������������������������������������������� 24 33 27 29 34 -29.4 0 14 9 

All other loans, leases, and other assets���������������������������������������������������������� 16,849 16,970 17,058 15,316 15,360 9.7 1 17 55 16,77

Total credit exposure ������������������������������������������������������������������������������������������������� 26,602 26,688 27,973 27,109 27,769 -4.2 106 2,079 2,964 21,45

Support for Securitization Facilities Sponsored by Other Institutions 

Number of institutions reporting securitization facilities sponsored by others ������� 135 138 148 154 157 -14.0 12 76 28 1

Total credit exposure ������������������������������������������������������������������������������������������������� 42,375 42,058 44,707 44,848 45,095 -6.0 9 189 323 41,85

Total unused liquidity commitments ������������������������������������������������������������������������� 1,122 1,017 981 923 828 35.5 0 0 0 1,12

Other

Assets serviced for others*��������������������������������������������������������������������������������������� 4,458,868 4,556,305 4,712,564 4,773,340 4,885,223 -8.7 5,465 135,523 306,130 4,011,74

Asset-backed commercial paper conduits 

Credit exposure to conduits sponsored by institutions and others������������������ 12,129 12,110 12,317 13,049 11,316 7.2 5 0 4 12,12

Unused liquidity commitments to conduits sponsored by institutions 

 and others������������������������������������������������������������������������������������������������������� 28,274 30,515 31,113 40,363 51,893 -45.5 0 0 667 27,60

Net servicing income (for the quarter)���������������������������������������������������������������������� 2,769 2,141 4,627 3,182 5,827 -52.5 7 175 151 2,43

Net securitization income (for the quarter)��������������������������������������������������������������� 316 283 395 352 273 15.8 0 15 10 29

Total credit exposure to Tier 1 capital (%)** ������������������������������������������������������������� 5.4 5.4 5.8 5.9 6.0 0.8 1.

* The amount of financial assets serviced for others, other than closed-end 1-4 family residential mortgages, is reported when these assets are greater than $10 million

** Total credit exposure includes the sum of the three line items titled “Total credit exposure” reported above
FDIC Quarterly 14 2014, Volume 8, No. 3

■ Net Income of $4.9 Billion Is $166 Million Above Year-Ago Level 

1

■ Higher Net Interest Income and Lower Loan-Loss Provisions Boost Earnings

■ Net Interest Margin Increases From Previous Quarter and a Year Ago

■ Loan Balances Increase, Outpacing Industry Growth

1

 Prior period dollar amounts used for comparisons are mergeradjusted, meaning the same institutions identified as community banks 

in the current quarter are used to determine dollar amounts in prior 

quarters, after taking acquisitions into account. Performance ratios are 

not merger-adjusted.

COMMUNITY BANK PERFORMANCE

Contributors to the Year-Over-Year Change in Income

FDIC-Insured Community Banks

Billions of Dollars Positive Factor

Negative Factor

Net

Income

Net

Interest

Income

Loan Loss

Provisions

Noninterest

Income

Noninterest

Expense

Realized

Gains on

Securities

Income

Taxes

Source: FDIC. 

+4% +6% -30% -9% +2% -41% +12%

0.17

1.00

-0.24

-0.47

0.35

-0.10

0.15

-$2.0

-$1.0

$0.0

$1.0

$2.0

Chart 1 Chart 2

Net Interest Margin

Percent

Source: FDIC.

3.57 3.61

3.25

3.15

3.0

3.5

4.0

2006 2007 2008 2009 2010 2011 2012 2013 2014

Community Banks

All Insured Institutions

Nearly 60 Percent of Community Banks Increase 

Earnings in Second Quarter

Improved net interest income and lower loan-loss 

provisions contributed to community banks’ earnings of 

$4.9 billion, up $166 million (3.5 percent) from second 

quarter 2013. Well over half (58 percent) of all community banks reported higher earnings compared with the 

year-ago quarter, and those reporting a loss fell to 7 

percent—the lowest level since second quarter 2006.

Net Interest Margin Is Nearly Half a Percentage 

Point Higher Than the Industry

Net interest income totaled $16.8 billion for the quarter, up $997 million (6.3 percent) from second quarter 

2013. Almost three out of every four community banks 

(72 percent) reported a year-over-year increase. Similar 

to community banks, the industry improved net interest 

income from second quarter 2013, but at a lower rate. 

Community banks reported net interest margin (NIM) 

of 3.61 percent, up 4 basis points from second quarter 

2013, as average funding costs declined more rapidly 

than average asset yields. For the past five consecutive 

quarters, NIM widened between community banks and 

the industry, as community banks posted a NIM 46 

basis points above the industry average. Nearly 80 

percent of community banks reported NIM above the 

industry’s 3.15 percent.

Lower Gains on Loan Sales and Higher Expenses 

Reduce Earnings

Noninterest income was $4.5 billion in the second 

quarter, down $475 million (9.5 percent) from second 

quarter 2013, as revenue from loan sales—including 

mortgage sales—declined by $334 million (28.7 

percent) from the year before. The industry experienced a lower rate decline (5 percent) in noninterest 

income, but similar to community banks, loan sales 

income declined. Noninterest expense at community 

banks was $348 million (2.4 percent) higher than in 

second quarter 2013. About 62 percent of the increase 

in noninterest expense was accounted for by higher 

salary and employee benefits; however, average assets 

per employee rose to $4.5 million from $4.3 million 

one year earlier.
FDIC QUARTERLY 15 2014, VOLUME 8, NO. 3

Quarterly Banking Profile

Loan Growth Increases From the Previous Quarter 

and a Year Ago

Loan balances totaled $1.3 trillion in the second quarter, 

up $37.7 billion (2.9 percent) from first quarter 2014. 

Community banks reported higher loan growth than the 

industry, which grew at 2.3 percent. All major loan categories increased from the previous quarter, led by 1-to-4 

family (up $9.2 billion, or 2.7 percent), commercial and 

industrial loans (up $6.5 billion, or 3.7 percent), and 

nonfarm nonresidential loans (up $6 billion, or 1.6 

percent). Year-over-year loan growth at community banks 

(7.6 percent) outpaced the industry (4.9 percent). Close 

to 50 percent of the annual increase at community banks 

was accounted for by nonfarm nonresidential loans (up 

$23.9 billion, or 6.5 percent) and commercial and industrial loans (up $17.5 billion, or 10.5 percent). Total 

unused construction and development commitments 

increased by $4 billion (7 percent) to $61 billion, indicating stronger construction and development lending in 

future quarters.

Community Banks Continue to Support Small Loans 

to Businesses

Small loans to businesses—loans to commercial borrowers up to $1 million, and farm loans up to $500,000—

totaled $297.9 billion at community banks in the second 

quarter, up $5 billion (1.7 percent) from the previous 

quarter and $9 billion (3.1 percent) from second quarter 

2013. Close to 62 percent of community banks increased 

small loans to businesses from the first quarter, led by 

agricultural production loans (up $2.1 billion, or 9.1 

percent) and commercial and industrial loans ($1.7 

billion, or 1.9 percent). As in community banks, the 

industry increased small loans to businesses from the year 

before, but at a slower rate (1.1 percent). Almost half (48 

percent) of the year-over-year increase in small loans to 

businesses at community banks was driven by an increase 

in commercial and industrial loans. Community banks 

continued to hold 45 percent of small loans to businesses.

Noncurrent Loan Rate Declines to Pre-Crisis Level

Community banks reported the noncurrent rate of 1.54 

percent in the second quarter, the lowest level since 

fourth quarter 2007. The noncurrent rate fell 14 basis 

points from the first quarter, 58 basis points from the 

previous year, and is 70 basis points below the industry 

rate of 2.24 percent. The noncurrent rate declined for all 

major loan categories from the first quarter. Although 

construction and development loans have the highest 

noncurrent rate (3.36 percent), that rate has declined for 

15 consecutive quarters. The coverage ratio (loan loss 

reserves relative to noncurrent loans) for community 

banks improved from 91.09 percent to 96.08 percent 

during the quarter, and is well above the industry average of 70.54 percent. Despite a small decline in reserves 

during the quarter ($172 million, or 0.9 percent), the 

coverage ratio has increased for 11 consecutive quarters.

Community Banks Decline From the Previous Quarter

The number of FDIC-insured community banks totaled 

6,163 in the second quarter of 2014, down 71 from the 

first quarter. Seven community banks failed during the 

quarter, while 40 merged. Community banks continued 

to represent 93 percent of all insured institutions, with 

$2 trillion in assets, $1.7 trillion in deposits, and $224 

billion in equity capital.

Author: Benjamin Tikvina, Economic Analyst

 Division of Insurance and Research

 (202) 898-6578

Change in Loan Balances and Unused Commitments

FDIC-Insured Community Banks

Source: FDIC. 

Billions of Dollars

Loan Balances

Unused

Commitments

Nonfarm

Nonresidential RE

C&I

Loans

1-to-4

Family

Residential RE

C&D

Loans

Agricultural

Production

Loans

Loans to

Individuals

Home

Equity

C&D

Loans

C&I

Loans

23.9

17.5

7.4 7.2

12.6

1.7

3.4

4.5

15.6

0.3

4.0

1.2 2.0

4.0 3.3

9.2

6.5 6.0

Change 2Q 2013 - 2Q 2014

Change 1Q 2014 - 2Q 2014

Chart 3 Chart 4

Noncurrent Loan Rates for FDIC-Insured Community Banks

Percent of Loan Portfolio Noncurrent

Source: FDIC.

C&D Loans

Nonfarm Nonresidential RE

1-to-4 Family RE

C&I Loans

Home Equity

Credit Cards

0

2

4

6

8

10

12

14

16

2006 2007 2008 2009 2010 2011 2012 2013 2014
FDIC Quarterly 16 2014, Volume 8, No. 3

TABLE I-B. Selected Indicators, FDIC-Insured Community Banks

2014* 2013* 2013 2012 2011 2010 2009

Return on assets (%)������������������������������������������������������������������������������������������������������ 0.93 0.93 0.90 0.83 0.55 0.2

Return on equity (%)������������������������������������������������������������������������������������������������������� 8.52 8.55 8.29 7.67 5.17 2.0

Core capital (leverage) ratio (%) ������������������������������������������������������������������������������������ 10.59 10.41 10.44 10.18 9.98 9.

Noncurrent assets plus other real estate owned to assets (%) ������������������������������������ 1.51 2.02 1.73 2.27 2.84 3.

Net charge-offs to loans (%) ������������������������������������������������������������������������������������������ 0.18 0.31 0.32 0.59 0.87 1.

Asset growth rate (%) ����������������������������������������������������������������������������������������������������� 0.50 0.74 0.25 2.24 1.47 -2.

Net interest margin (%)��������������������������������������������������������������������������������������������������� 3.59 3.55 3.59 3.67 3.74 3.

Net operating income growth (%)����������������������������������������������������������������������������������� 1.49 21.59 14.78 56.54 204.98 204.72 

Number of institutions reporting������������������������������������������������������������������������������������� 6,163 6,425 6,307 6,543 6,800 7,017 7,254

Percentage of unprofitable institutions (%)�������������������������������������������������������������������� 6.85 8.45 8.42 11.16 16.35 22.1

* Through June 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending June 3

TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks

(dollar figures in millions)  2nd Quarter

2014

1st Quarter

2014

2nd Quarter

2013

%Change 

13Q2-14Q2

Number of institutions reporting������������������������������������������������������������������������������������� 6,163 6,234 6,425 -4.

Total employees (full-time equivalent)��������������������������������������������������������������������������� 448,004 449,907 463,121 -3.

CONDITION DATA

Total assets��������������������������������������������������������������������������������������������������������������������� $2,022,294 $2,035,133 $2,012,239 0.

Loans secured by real estate���������������������������������������������������������������������������������� 1,004,765 999,143 981,625 2.

 1-4 Family residential mortgages �������������������������������������������������������������������� 354,196 349,756 350,425 1.

 Nonfarm nonresidential������������������������������������������������������������������������������������ 392,685 394,589 388,116 1.

 Construction and development������������������������������������������������������������������������ 79,632 77,818 75,795 5.

 Home equity lines��������������������������������������������������������������������������������������������� 47,982 47,457 49,063 -2.

Commercial & industrial loans �������������������������������������������������������������������������������� 184,975 182,137 175,618 5.

Loans to individuals������������������������������������������������������������������������������������������������� 57,006 55,452 54,679 4.

 Credit cards ������������������������������������������������������������������������������������������������������ 1,817 1,766 1,962 -7.

Farm loans��������������������������������������������������������������������������������������������������������������� 43,640 39,670 39,385 10.

Other loans & leases����������������������������������������������������������������������������������������������� 28,584 27,983 27,605 3.

Less: Unearned income ������������������������������������������������������������������������������������������ 555 553 512 8.

Total loans & leases ������������������������������������������������������������������������������������������������ 1,318,416 1,303,854 1,278,401 3.

Less: Reserve for losses����������������������������������������������������������������������������������������� 19,542 20,020 21,330 -8.

Net loans and leases����������������������������������������������������������������������������������������������� 1,298,875 1,283,834 1,257,070 3.

Securities����������������������������������������������������������������������������������������������������������������� 458,181 463,856 470,350 -2.

Other real estate owned������������������������������������������������������������������������������������������ 10,011 10,817 13,215 -24.

Goodwill and other intangibles ������������������������������������������������������������������������������� 12,505 12,682 12,483 0.

All other assets�������������������������������������������������������������������������������������������������������� 242,723 263,943 259,121 -6.

Total liabilities and capital ���������������������������������������������������������������������������������������������� 2,022,294 2,035,133 2,012,239 0.

Deposits������������������������������������������������������������������������������������������������������������������� 1,664,159 1,688,062 1,663,419 0.

 Domestic office deposits���������������������������������������������������������������������������������� 1,663,936 1,687,831 1,663,202 0.

 Foreign office deposits������������������������������������������������������������������������������������� 222 231 217 2.

 Brokered deposits �������������������������������������������������������������������������������������������� 56,185 56,085 52,112 7.

Estimated insured deposits������������������������������������������������������������������������������������� 1,303,756 1,327,026 1,331,162 -2.

Other borrowed funds ��������������������������������������������������������������������������������������������� 118,992 111,548 114,843 3.

Subordinated debt��������������������������������������������������������������������������������������������������� 420 432 505 -16.

All other liabilities ���������������������������������������������������������������������������������������������������� 14,826 14,197 15,790 -6.

Total equity capital (includes minority interests)���������������������������������������������������� 223,897 220,895 217,682 2.

 Bank equity capital������������������������������������������������������������������������������������������� 223,751 220,749 217,532 2.

Loans and leases 30-89 days past due������������������������������������������������������������������������� 8,946 10,815 10,501 -14.

Noncurrent loans and leases ����������������������������������������������������������������������������������������� 20,339 21,978 27,079 -24.

Restructured loans and leases �������������������������������������������������������������������������������������� 11,127 11,467 12,881 -13.

Mortgage-backed securities ������������������������������������������������������������������������������������������ 201,690 204,670 210,999 -4.

Earning assets���������������������������������������������������������������������������������������������������������������� 1,866,002 1,876,767 1,852,552 0.

FHLB Advances�������������������������������������������������������������������������������������������������������������� 87,114 80,233 79,877 9.

Unused loan commitments��������������������������������������������������������������������������������������������� 242,722 244,854 245,633 -1.

Trust assets��������������������������������������������������������������������������������������������������������������������� 243,763 237,567 215,222 13.

Assets securitized and sold ������������������������������������������������������������������������������������������� 15,438 15,169 17,274 -10.

Notional amount of derivatives��������������������������������������������������������������������������������������� 49,048 44,467 54,988 -10.

INCOME DATA

First Half 

 2014

First Half 

2013 %Change

2nd Quarter 

2014

2nd Quarter 

2013

%Change 

13Q2-14Q2

Total interest income ������������������������������������������������������������������� $37,601 $38,344 -1.9 $19,027 $19,244 -1

Total interest expense ����������������������������������������������������������������� 4,560 5,490 -16.94 2,277 2,683 -15

Net interest income �������������������������������������������������������������� 33,041 32,854 0.6 16,750 16,561 1

Provision for loan and lease losses �������������������������������������������� 1,089 1,718 -36.6 559 862 -35

Total noninterest income ������������������������������������������������������������� 8,719 10,076 -13.5 4,535 5,217 -13

Total noninterest expense����������������������������������������������������������� 29,025 29,850 -2.8 14,632 14,989 -2

Securities gains (losses)������������������������������������������������������������� 280 534 -47.6 139 246 -43

Applicable income taxes ������������������������������������������������������������� 2,661 2,558 4.0 1,371 1,346 1

Extraordinary gains, net�������������������������������������������������������������� 8 16 -48.8 3 14 -78

Total net income (includes minority interests)��������������������� 9,273 9,353 -0.9 4,866 4,840 0

Bank net income������������������������������������������������������������ 9,264 9,342 -0.8 4,860 4,835 0

Net charge-offs���������������������������������������������������������������������������� 1,159 1,974 -41.3 622 1,060 -41

Cash dividends ���������������������������������������������������������������������������� 4,322 3,935 9.8 2,339 2,168 7

Retained earnings ����������������������������������������������������������������������� 4,942 5,407 -8.6 2,521 2,666 -5

Net operating income����������������������������������������������������������� 9,049 8,916 1.5 4,753 4,630 2

N/M - Not Meaningful
FDIC Quarterly 17 2014, Volume 8, No. 3

Quarterly Banking Profile

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

Second Quarter 2014

(dollar figures in millions)

Geographic Regions*

All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco

Number of institutions reporting����������������������������������� 6,163 722 769 1,376 1,566 1,314 416

Total employees (full-time equivalent)������������������������� 448,004 86,180 59,009 97,748 73,048 96,466 35,553

CONDITION DATA

Total assets������������������������������������������������������������������� $2,022,294 $495,899 $249,577 $394,285 $320,145 $391,520 $170,869

Loans secured by real estate�������������������������������� 1,004,765 282,009 132,912 196,551 138,831 171,513 82,949

 1-4 Family residential mortgages ������������������ 354,196 117,337 42,077 72,843 45,714 57,375 18,850

 Nonfarm nonresidential���������������������������������� 392,685 100,044 58,753 72,919 46,987 71,040 42,942

 Construction and development���������������������� 79,632 14,235 14,521 11,628 10,274 22,432 6,543

 Home equity lines������������������������������������������� 47,982 15,576 7,706 11,404 4,400 4,315 4,582

Commercial & industrial loans ������������������������������ 184,975 41,335 19,324 36,414 30,810 40,014 17,079

Loans to individuals����������������������������������������������� 57,006 10,638 7,341 11,675 9,635 13,455 4,261

 Credit cards ���������������������������������������������������� 1,817 201 135 452 428 321 280

Farm loans������������������������������������������������������������� 43,640 486 1,131 6,640 24,209 8,513 2,660

Other loans & leases��������������������������������������������� 28,584 6,910 2,007 5,458 5,086 6,258 2,866

Less: Unearned income ���������������������������������������� 555 144 97 63 25 118 109

Total loans & leases ���������������������������������������������� 1,318,416 341,234 162,618 256,676 208,547 239,635 109,706

Less: Reserve for losses��������������������������������������� 19,542 4,204 2,633 4,203 3,136 3,480 1,885

Net loans and leases��������������������������������������������� 1,298,875 337,029 159,986 252,474 205,410 236,155 107,821

Securities��������������������������������������������������������������� 458,181 104,223 50,821 90,828 76,087 99,970 36,252

Other real estate owned���������������������������������������� 10,011 1,146 2,648 2,104 1,565 1,870 677

Goodwill and other intangibles ����������������������������� 12,505 3,800 1,237 2,479 1,697 2,244 1,049

All other assets������������������������������������������������������ 242,723 49,700 34,885 46,401 35,385 51,281 25,070

Total liabilities and capital �������������������������������������������� 2,022,294 495,899 249,577 394,285 320,145 391,520 170,869

Deposits����������������������������������������������������������������� 1,664,159 393,104 208,381 327,373 262,450 330,499 142,352

 Domestic office deposits�������������������������������� 1,663,936 392,999 208,309 327,348 262,450 330,499 142,332

 Foreign office deposits����������������������������������� 222 105 73 25 0 0 20

 Brokered deposits ������������������������������������������ 56,185 16,117 6,713 11,892 8,435 8,630 4,398

 Estimated insured deposits ��������������������������� 1,303,756 301,252 164,100 269,611 213,647 249,351 105,796

Other borrowed funds ������������������������������������������� 118,992 42,766 11,940 20,585 20,664 16,347 6,689

Subordinated debt������������������������������������������������� 420 204 58 104 7 5 43

All other liabilities �������������������������������������������������� 14,826 4,624 1,713 2,864 1,835 2,337 1,453

Total equity capital (includes minority interests)�� 223,897 55,201 27,484 43,360 35,189 42,332 20,331

 Bank equity capital����������������������������������������� 223,751 55,155 27,474 43,304 35,186 42,302 20,329

Loans and leases 30-89 days past due����������������������� 8,946 2,271 1,404 1,888 1,211 1,828 344

Noncurrent loans and leases ��������������������������������������� 20,339 5,592 3,548 4,832 2,184 2,797 1,386

Restructured loans and leases ������������������������������������ 11,127 2,244 2,089 3,102 1,352 1,333 1,008

Mortgage-backed securities ���������������������������������������� 201,690 57,778 22,565 36,890 27,008 39,128 18,320

Earning assets�������������������������������������������������������������� 1,866,002 460,702 227,761 362,962 296,520 360,282 157,774

FHLB Advances������������������������������������������������������������ 87,114 34,317 8,914 14,204 14,024 12,061 3,594

Unused loan commitments������������������������������������������� 242,722 58,154 28,270 47,262 41,514 43,250 24,273

Trust assets������������������������������������������������������������������� 243,763 54,235 9,284 66,505 63,463 40,007 10,268

Assets securitized and sold ����������������������������������������� 15,438 3,080 515 6,022 4,342 592 887

Notional amount of derivatives������������������������������������� 49,048 15,591 6,433 10,302 6,013 8,329 2,380

INCOME DATA

Total interest income ���������������������������������������������������� $19,027 $4,501 $2,449 $3,640 $3,025 $3,803 $1,609

Total interest expense �������������������������������������������������� 2,277 673 300 432 372 376 124

Net interest income ����������������������������������������������� 16,750 3,828 2,148 3,208 2,653 3,428 1,485

Provision for loan and lease losses ����������������������������� 559 163 66 114 76 119 20

Total noninterest income���������������������������������������������� 4,535 765 565 1,211 714 917 363

Total noninterest expense �������������������������������������������� 14,632 3,206 1,994 3,006 2,221 2,928 1,277

Securities gains (losses)���������������������������������������������� 139 69 16 17 11 20 6

Applicable income taxes ���������������������������������������������� 1,371 416 160 298 138 207 153

Extraordinary gains, net����������������������������������������������� 3 0 1 2 0 0 0

Total net income (includes minority interests)������ 4,866 877 512 1,019 943 1,110 404

 Bank net income��������������������������������������������� 4,860 876 511 1,016 943 1,110 404

Net charge-offs������������������������������������������������������������� 622 135 116 172 71 106 22

Cash dividends ������������������������������������������������������������� 2,339 271 151 542 590 519 266

Retained earnings �������������������������������������������������������� 2,521 605 360 474 354 590 138

Net operating income�������������������������������������������� 4,753 826 498 1,003 932 1,095 399

* See Table V-A (page 11) for explanations
FDIC QUARTERLY 18 2014, VOLUME 8, NO. 3

Table IV-B. Second Quarter 2014, FDIC-Insured Community Banks

All Community Banks Second Quarter 2014, Geographic Regions*

2nd Quarter 

2014

1st Quarter 

2014 New York Atlanta Chicago Kansas City Dallas San Francisco

Performance ratios (annualized, %)

Yield on earning assets .................................................. 4.10 4.07 3.94 4.33 4.03 4.09 4.25 4.13

Cost of funding earning assets ...................................... 0.49 0.50 0.59 0.53 0.48 0.50 0.42 0.32

 Net interest margin .................................................. 3.61 3.57 3.35 3.80 3.55 3.59 3.83 3.81

Noninterest income to assets ......................................... 0.90 0.82 0.62 0.91 1.24 0.89 0.94 0.86

Noninterest expense to assets ....................................... 2.91 2.91 2.61 3.21 3.07 2.78 3.01 3.03

Loan and lease loss provision to assets ........................ 0.11 0.11 0.13 0.11 0.12 0.10 0.12 0.05

Net operating income to assets ..................................... 0.95 0.85 0.67 0.80 1.02 1.17 1.12 0.95

Pretax return on assets .................................................. 1.24 1.12 1.05 1.08 1.34 1.35 1.35 1.32

Return on assets ............................................................. 0.97 0.87 0.71 0.82 1.04 1.18 1.14 0.96

Return on equity ............................................................. 8.82 8.04 6.45 7.55 9.53 10.86 10.63 8.10

Net charge-offs to loans and leases .............................. 0.19 0.17 0.16 0.29 0.27 0.14 0.18 0.08

Loan and lease loss provision to net charge-offs.......... 89.84 100.97 120.52 56.76 66.67 107.23 112.21 92.52

Efficiency ratio ................................................................ 68.41 70.52 69.44 73.05 67.71 65.59 67.13 68.90

Net interest income to operating revenue ...................... 78.69 80.01 83.35 79.17 72.60 78.80 78.89 80.36

% of unprofitable institutions .......................................... 6.99 7.59 8.03 10.66 7.92 4.34 5.18 11.06

% of institutions with earnings gains .............................. 57.59 53.99 53.46 59.69 54.36 58.30 60.35 60.10

Table V-B. First Half 2014, FDIC-Insured Community Banks

All Community Banks First Half 2014, Geographic Regions*

First Half

 2014

First Half 

2013 New York Atlanta Chicago Kansas City Dallas San Francisco

Performance ratios (%)

Yield on earning assets .................................................. 4.09 4.15 3.93 4.32 4.01 4.08 4.23 4.08

Cost of funding earning assets ...................................... 0.50 0.59 0.59 0.54 0.48 0.51 0.42 0.32

 Net interest margin .................................................. 3.59 3.55 3.34 3.78 3.53 3.57 3.80 3.76

Noninterest income to assets ......................................... 0.87 1.00 0.62 0.84 1.19 0.90 0.89 0.84

Noninterest expense to assets ....................................... 2.91 2.97 2.62 3.19 3.07 2.78 3.00 3.01

Loan and lease loss provision to assets ........................ 0.11 0.17 0.13 0.11 0.13 0.09 0.12 0.03

Net operating income to assets ..................................... 0.91 0.89 0.66 0.74 0.95 1.13 1.09 0.94

Pretax return on assets .................................................. 1.20 1.18 1.02 1.01 1.26 1.36 1.29 1.29

Return on assets ............................................................. 0.93 0.93 0.70 0.76 0.96 1.15 1.10 0.95

Return on equity ............................................................. 8.52 8.55 6.38 7.01 8.93 10.66 10.32 8.03

Net charge-offs to loans and leases .............................. 0.18 0.31 0.16 0.26 0.27 0.12 0.15 0.08

Loan and lease loss provision to net charge-offs.......... 93.97 87.05 118.08 66.14 74.32 108.50 125.26 58.00

Efficiency ratio ................................................................ 69.17 69.21 70.04 74.08 68.85 65.80 68.01 69.59

Net interest income to operating revenue ...................... 79.12 76.53 83.43 80.48 73.12 78.49 79.66 80.63

% of unprofitable institutions .......................................... 6.85 8.45 7.48 11.83 8.21 3.96 4.03 11.78

% of institutions with earnings gains .............................. 56.04 52.59 50.14 59.69 52.40 58.43 58.45 55.05

* See Table V-A (page 11) for explanations.
FDIC Quarterly 19 2014, Volume 8, No. 3

Quarterly Banking Profile

Table VI-B. Loan Performance, FDIC-Insured Community Banks

June 30, 2014

Geographic Regions*

All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco

Percent of Loans 30-89 Days Past Due

All loans secured by real estate ������������������������������������������� 0.67 0.61 0.84 0.78 0.58 0.

Construction and development������������������������������������� 0.60 0.60 0.73 0.71 0.53 0.

Nonfarm nonresidential������������������������������������������������� 0.49 0.46 0.64 0.61 0.42 0.

Multifamily residential real estate ��������������������������������� 0.30 0.20 0.38 0.51 0.25 0.

Home equity loans��������������������������������������������������������� 0.54 0.58 0.58 0.52 0.42 0.

Other 1-4 family residential������������������������������������������� 1.01 0.87 1.27 1.12 0.89 1.

Commercial and industrial loans ����������������������������������������� 0.55 0.53 0.68 0.50 0.62 0.

Loans to individuals�������������������������������������������������������������� 1.66 2.79 1.99 1.14 1.04 1.

Credit card loans ����������������������������������������������������������� 1.67 3.05 1.37 1.09 2.64 1.

Other loans to individuals ��������������������������������������������� 1.66 2.79 2.00 1.14 0.97 1.

All other loans and leases (including farm) ������������������������� 0.34 0.28 0.38 0.30 0.40 0.

Total loans and leases���������������������������������������������������������� 0.68 0.67 0.86 0.74 0.58 0.

Percent of Loans Noncurrent**

All loans secured by real estate ������������������������������������������� 1.72 1.78 2.31 2.14 1.19 1.

Construction and development������������������������������������� 3.36 3.67 5.30 4.42 2.77 1.

Nonfarm nonresidential������������������������������������������������� 1.66 1.67 1.99 2.26 1.28 1.

Multifamily residential real estate ��������������������������������� 0.82 0.44 1.85 1.62 0.77 0.

Home equity loans��������������������������������������������������������� 0.92 0.98 0.94 1.15 0.57 0.

Other 1-4 family residential������������������������������������������� 1.82 2.11 2.04 2.11 1.26 1.

Commercial and industrial loans ����������������������������������������� 1.22 1.12 1.41 1.41 1.18 1.

Loans to individuals�������������������������������������������������������������� 0.86 0.84 2.42 0.47 0.53 0.

Credit card loans ����������������������������������������������������������� 0.81 1.43 0.57 0.72 0.99 0.

Other loans to individuals ��������������������������������������������� 0.86 0.83 2.46 0.46 0.51 0.

All other loans and leases (including farm) ������������������������� 0.45 0.31 0.97 0.53 0.40 0.

Total loans and leases���������������������������������������������������������� 1.54 1.64 2.18 1.88 1.05 1.

Percent of Loans Charged-Off (net, YTD)

All loans secured by real estate ������������������������������������������� 0.14 0.12 0.23 0.25 0.09 0.

Construction and development������������������������������������� 0.19 0.24 0.54 0.37 -0.10 0.0

Nonfarm nonresidential������������������������������������������������� 0.14 0.12 0.22 0.25 0.13 0.

Multifamily residential real estate ��������������������������������� 0.10 0.03 0.11 0.23 0.10 0.3

Home equity loans��������������������������������������������������������� 0.20 0.18 0.24 0.31 0.13 0.

Other 1-4 family residential������������������������������������������� 0.15 0.13 0.16 0.27 0.12 0.

Commercial and industrial loans ����������������������������������������� 0.27 0.29 0.33 0.33 0.21 0.

Loans to individuals�������������������������������������������������������������� 0.62 0.75 0.67 0.51 0.61 0.

Credit card loans ����������������������������������������������������������� 4.03 5.92 1.37 3.31 7.86 1.

Other loans to individuals ��������������������������������������������� 0.51 0.64 0.65 0.39 0.27 0.

All other loans and leases (including farm) ������������������������� 0.12 0.09 0.17 0.09 0.04 0.

Total loans and leases���������������������������������������������������������� 0.18 0.16 0.26 0.27 0.12 0.

Loans Outstanding (in billions)

All loans secured by real estate ������������������������������������������� $1,004.8 $282.0 $132.9 $196.6 $138.8 $171.

Construction and development������������������������������������� 79.6 14.2 14.5 11.6 10.3 2

Nonfarm nonresidential������������������������������������������������� 392.7 100.0 58.8 72.9 47.0 71

Multifamily residential real estate ��������������������������������� 73.1 33.3 5.8 14.0 7.0 

Home equity loans��������������������������������������������������������� 48.0 15.6 7.7 11.4 4.4 

Other 1-4 family residential������������������������������������������� 354.2 117.3 42.1 72.8 45.7 57

Commercial and industrial loans ����������������������������������������� 185.0 41.3 19.3 36.4 30.8 40

Loans to individuals�������������������������������������������������������������� 57.0 10.6 7.3 11.7 9.6 1

Credit card loans ����������������������������������������������������������� 1.8 0.2 0.1 0.5 0.4 

Other loans to individuals ��������������������������������������������� 55.2 10.4 7.2 11.2 9.2 1

All other loans and leases (including farm) ������������������������� 72.2 7.4 3.1 12.1 29.3 1

Total loans and leases���������������������������������������������������������� 1,319.0 341.4 162.7 256.7 208.6 239.

Memo: Unfunded Commitments (in millions)

Total Unfunded Commitments ��������������������������������������������� 242,722 58,154 28,270 47,262 41,514 43,250 24,273

Construction and development: 1-4 family residential �� 18,497 3,887 3,276 2,118 2,352 5,219 1,645

Construction and development: CRE and other ����������� 41,175 12,192 5,488 6,421 5,041 8,858 3,175

Commercial and industrial �������������������������������������������� 83,388 18,833 8,668 17,855 13,553 15,518 8,962

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

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status
FDIC Quarterly 20 2014, Volume 8, No. 3

Total assets of the 6,656 FDIC-insured institutions 

increased by 1.8 percent ($263.1 billion) during the 

second quarter. 1 Total deposits increased by 1.5 

percent ($172.4 billion). Domestic office deposits 

increased by 1.4 percent ($136.6 billion), and foreign 

office deposits increased by 2.6 percent ($35.8 billion). 

Domestic noninterest-bearing deposits increased by 4.3 

percent ($115 billion), while interest-bearing checking 

and savings accounts were nearly unchanged, decreasing by only 0.02 percent ($1.1 billion) from the previous quarter. Domestic time deposits increased by 1.4 

percent ($22.6 billion). Over the past four quarters, 

total domestic deposits grew by 7.1 percent ($663.2 

billion), with interest-bearing deposits increasing by 5 

percent ($344.3 billion) and noninterest-bearing 

deposits rising by 13 percent ($318.8 billion). Foreign 

deposits increased by 3.4 percent, other borrowed 

money increased by 14.8 percent (led by an increase in 

FHLB advances), and securities sold under agreements 

to repurchase declined by 18.7 percent over the same 

four-quarter period.2

1

 Throughout the insurance fund discussion, FDIC-insured institutions 

include insured commercial banks and savings associations and, 

except where noted, exclude insured branches of foreign banks. 

2

 Other borrowed money includes FHLB advances, term federal funds, 

mortgage indebtedness, and other borrowings.

Total estimated insured deposits decreased by 0.2 

percent from the prior quarter and increased by 2.6 

percent from one year earlier.3 For institutions existing 

at the start and the end of the second quarter, insured 

deposits increased during the quarter at 2,561 institutions (38 percent), decreased at 4,063 institutions (61 

percent), and remained unchanged at 32 institutions.

The condition of the Deposit Insurance Fund (DIF) 

continues to improve. The DIF increased by $2.2 

billion during the second quarter to $51.1 billion. 

Assessment income of $2.2 billion was primarily responsible for the increase. Negative provisions for insurance 

losses of $204 million, interest earned on investments of 

$87 million, unrealized gains on available-for-sale securities of $73 million, and other miscellaneous income of 

$6 million also added to the fund. Operating expenses 

of $428 million partially offset the fund balance 

increase. During the second quarter of 2014, 7 insured 

institutions with combined assets of $853 million failed, 

at an estimated cost to the fund of $112 million. The 

DIF’s reserve ratio—the DIF fund balance as a percent 

of estimated insured deposits—was 0.84 percent as of 

the second quarter, up from 0.80 percent in the prior 

quarter and 0.64 percent one year earlier.

3

 Figures for estimated insured deposits in this discussion include 

insured branches of foreign banks, in addition to insured commercial 

banks and savings institutions.

■ Fund Balance Increases to $51.1 Billion

■ DIF Reserve Ratio Rises 4 Basis Points to 0.84 Percent

■ Seven Institutions Fail During Second Quarter

INSURANCE FUND INDICATORS
FDIC Quarterly 21 2014, Volume 8, No. 3

Quarterly Banking Profile

Effective April 1, 2011, the deposit insurance assessment base changed to average consolidated total assets 

minus average tangible equity.4

 Revisions to insurance 

assessment rates and risk-based pricing rules for large 

banks (banks with assets greater than $10 billion) also 

became effective on that date.5 Table 1 shows the distribution of the assessment base by institution asset size 

category as of the second quarter of 2014.

Dodd-Frank requires that, for at least five years, the 

FDIC must make available to the public the reserve 

ratio and the Designated Reserve Ratio (DRR) using 

4

 There is an additional adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank.

5

 The Fourth Quarter 2010 Quarterly Banking Profile includes a more 

detailed explanation of these changes.

both estimated insured deposits and the new assessment 

base. As of June 30, 2014, the FDIC reserve ratio would 

have been 0.40 percent using the new assessment base 

(compared to 0.84 percent using estimated insured 

deposits), and the 2 percent DRR using estimated 

insured deposits would have been 0.95 percent using 

the new assessment base.

Author: Kevin Brown, Senior Financial Analyst

Division of Insurance and Research

(202) 898-6817

Table 1

Distribution of the Assessment Base for FDIC-Insured Institutions* 

by Asset Size

Data as of June 30, 2014

Asset Size

Number of 

Institutions

Percent of 

Total Institutions

Assessment Base** 

($ Bil.)

Percent of 

Base

Less Than $1 Billion 5,982 89.9 $1,194.7 9.3

$1 - $10 Billion 565 8.5 1,320.7 10.3

$10 - $50 Billion 73 1.1 1,405.5 10.9

$50 - $100 Billion 12 0.2 789.0 6.1

Over $100 Billion 24 0.4 8,147.5 63.4

Total 6,656 100.0 12,857.4 100.0

* Excludes insured U.S. branches of foreign banks.

** Average consolidated total assets minus average tangible equity, with adjustments for banker’s banks and custodial banks.
FDIC Quarterly 22 2014, Volume 8, No. 3

DIF Reserve Ratios

Percent of Insured Deposits

0.32 0.35

0.44

0.60

0.64 0.68

0.80

0.06

0.12

0.17

0.22

0.78

0.84

6/11 12/11 6/12 12/12 6/13 12/13 6/14

Table I-C. Insurance Fund Balances and Selected Indicators

(dollar figures in millions)

Deposit Insurance Fund*

2nd 

Quarter 

2014

1st 

Quarter 

2014

4th 

Quarter 

2013

3rd 

Quarter 

2013

2nd 

Quarter 

2013

1st 

Quarter 

2013

4th 

Quarter 

2012

3rd 

Quarter 

2012

2nd 

Quarter 

2012

1st 

Quarter 

2012

4th 

Quarter 

2011

3rd 

Quarter 

2011

2nd 

Quarter 

2011

Beginning Fund Balance ... $48,893 $47,191 $40,758 $37,871 $35,742 $32,958 $25,224 $22,693 $15,292 $11,827 $7,813 $3,916 -$1,023

Changes in Fund Balance:

Assessments earned .......... 2,224 2,393 2,224 2,339 2,526 2,645 2,937 2,833 2,933 3,694 3,209 3,642 3,163

Interest earned on 

investment securities ...... 87 45 23 34 54 -9 66 -8 81 20 33 30 37

Realized gain on sale of

investments...................... 0 0 302 156 0 0 0 0 0 0 0 0 0

Operating expenses ........... 428 422 436 298 439 436 469 442 407 460 334 433 463

Provision for insurance 

losses .............................. -204 348 -4,588 -539 -33 -499 -3,344 -84 -807 12 1,533 -763 -2,095

All other income, 

net of expenses ............... 6 9 9 46 51 55 1,878 57 4,095 63 2,599 83 80

Unrealized gain/(loss) on 

available-for-sale 

securities ......................... 73 25 -277 71 -96 30 -22 7 -108 160 40 -188 27

Total fund balance change ... 2,166 1,702 6,433 2,887 2,129 2,784 7,734 2,531 7,401 3,465 4,014 3,897 4,939

Ending Fund Balance ....... 51,059 48,893 47,191 40,758 37,871 35,742 32,958 25,224 22,693 15,292 11,827 7,813 3,916

Percent change from 

 four quarters earlier ....... 34.82 36.79 43.19 61.58 66.88 133.73 178.67 222.85 479.49 NM

Reserve Ratio (%) ............. 0.84 0.80 0.78 0.68 0.64 0.60 0.44 0.35 0.32 0.22 0

Estimated Insured 

Deposits** .......................... 6,109,217 6,124,064 6,014,696 5,970,277 5,953,671 6,000,746 7,406,525 7,249,849 7,083,434 7,032,875 6,974,690 6,756,302 6,523,225

Percent change from 

 four quarters earlier ....... 2.61 2.06 -18.79 -17.65 -15.95 -14.68 6.19 7.30 8.59 10.24 10.6

Domestic Deposits ........... 10,099,336 9,962,480 9,825,398 9,630,459 9,424,504 9,454,659 9,474,585 9,084,803 8,937,725 8,848,706 8,782,134 8,526,713 8,244,900

Percent change from 

 four quarters earlier ....... 7.16 5.37 3.70 6.01 5.45 6.85 7.88 6.55 8.40 10.51 11

Number of Institutions 

Reporting ....................... 6,665 6,739 6,821 6,900 6,949 7,028 7,092 7,190 7,254 7,317 7,366 7,446 7,522

Deposit Insurance Fund Balance 

and Insured Deposits

($ Millions)

DIF 

Balance

DIF-Insured 

Deposits

6/11 $3,916 $6,523,225

9/11 7,813 6,756,302

12/11 11,827 6,974,690

3/12 15,292 7,032,875

6/12 22,693 7,083,434

9/12 25,224 7,249,849

12/12 32,958 7,406,525

3/13 35,742 6,000,746

6/13 37,871 5,953,671

9/13 40,758 5,970,277

12/13 47,191 6,014,696

3/14 48,893 6,124,064

6/14 51,059 6,109,217

Table II-C. Problem Institutions and Failed/Assisted Institutions

(dollar figures in millions) 2014*** 2013*** 2013 2012 2011 2010 2009

Problem Institutions

Number of institutions �������������������������������������������������� 354 553 467 651 813 884 702

Total assets������������������������������������������������������������������� $110,212 $192,482 $152,687 $232,701 $319,432 $390,017 $402,782

Failed Institutions

Number of institutions �������������������������������������������������� 12 16 24 51 92 157 140

Total assets ������������������������������������������������������������� $1,571 $1,868 $6,044 $11,617 $34,923 $92,085 $169,709

Assisted Institutions** ***

Number of institutions �������������������������������������������������� 0 0 0 0 0 0 8

Total assets������������������������������������������������������������������� $0 $0 $0 $0 $0 $0 $1,917,482

* Quarterly financial statement results are unaudited. NM - Not meaningf

** Beginning in the third quarter of 2009, estimates of insured deposits are based on a $250,000 general coverage limit. The Dodd-Frank Wall Street Reform and Consumer Protection Act

(Dodd-Frank) temporarily provided unlimited coverage for noninterest-bearing transaction accounts for two years beginning December 31, 2010, and ending December 31, 2012

*** Through June 30

  Total assets are based on final Call Reports submitted by failed institutions

** *** Assisted institutions represent eight institutions under a single holding company that received assistance in 2009
FDIC Quarterly 23 2014, Volume 8, No. 3

Quarterly Banking Profile

Table III-C. Estimated FDIC-Insured Deposits by Type of Institution

(dollar figures in millions) 

June 30, 2014

Number of 

Institutions

Total 

Assets

Domestic 

Deposits*

Est. Insured 

Deposits

Commercial Banks and Savings Institutions

FDIC-Insured Commercial Banks ����������������������������������������������� 5,757 $14,106,073 $9,251,576 $5,405,766

 FDIC-Supervised ������������������������������������������������������������������� 3,788 2,221,856 1,728,656 1,289,468

 OCC-Supervised�������������������������������������������������������������������� 1,109 9,696,045 6,078,024 3,383,957

 Federal Reserve-Supervised������������������������������������������������� 860 2,188,172 1,444,896 732,341

FDIC-Insured Savings Institutions ���������������������������������������������� 899 1,058,525 807,141 675,679

 OCC-Supervised Savings Institutions ����������������������������������� 470 693,490 535,182 453,291

 FDIC-Supervised Savings Institutions����������������������������������� 429 365,035 271,959 222,388

Total Commercial Banks and Savings Institutions ���������������������� 6,656 15,164,599 10,058,717 6,081,445

Other FDIC-Insured Institutions

U.S. Branches of Foreign Banks ������������������������������������������������� 9 104,690 40,619 27,7

Total FDIC-Insured Institutions���������������������������������������������������� . 6,665 15,269,289 10,099,336 6,109,2

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

Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range

Quarter Ending March 31, 2014 (dollar figures in billions)

Annual Rate in Basis Points

Number of 

Institutions

Percent of Total 

Institutions

Amount of 

Assessment Base*

Percent of Total 

Assessment Base

2.50-5.00 1,376 20.42 $1,091 

5.01-7.50 2,946 43.72 9,572 7

7.51-10.00 1,378 20.45 1,490 1

10.01-15.00 599 8.89 369 

15.01-20.00 32 0.47 99 

 20.01-25.00 331 4.91 125 

 25.01-30.00 6 0.09 2 

 30.01-35.00 68 1.01 33 

greater than 35.00 3 0.04 8 0

* Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, as 

required by the Dodd-Frank Act
FDIC Quarterly 24 2014, Volume 8, No. 3

The fourth step includes organizations that operate within a 

limited geographic scope. This limitation of scope is used as a 

proxy measure for a bank’s relationship approach to banking. 

Banks that operate within a limited market area have more 

ease in managing relationships at a personal level. Under this 

step, four criteria are applied to each banking organization. 

They include both a minimum and maximum number of total 

banking offices, a maximum level of deposits for any one 

office, and location-based criteria. The limits on the number 

of and deposits per office are gradually adjusted upward over 

time. For banking offices, banks must have more than one 

office, and the maximum number of offices starts at 40 in 1985 

and reaches 75 in 2010. The maximum level of deposits for 

any one office is $1.25 billion in deposits in 1985 and $5 billion in deposits in 2010. The remaining geographic limitations 

are also based on maximums for the number of states (fixed at 

3) and large metropolitan areas (fixed at 2) in which the organization maintains offices. Branch office data are based on the 

most recent data from the annual June 30 Summary of Deposits 

Survey that are available at the time of publication.

Finally, the definition establishes an asset-size limit, also 

adjusted upward over time from $250 million in 1985 to 

$1 billion in 2010, below which the limits on banking activities and geographic scope are waived. This final step acknowledges the fact that most of those small banks that are not 

excluded as specialty banks meet the requirements for banking activities and geographic limits in any event.

Summary of FDIC Research Definition of Community 

Banking Organizations

Community banks are designated at the level of the banking.

(All charters under designated holding companies are considered community banking charters.)

Exclude: Any organization with:

— No loans or no core deposits

— Foreign Assets ≥ 10% of total assets

— More than 50% of assets in certain specialty banks,

including:

• credit card specialists

• consumer nonbank banks1

• industrial loan companies

• trust companies

• bankers’ banks 

Include: All remaining banking organizations with:

— Total assets < indexed size threshold 

2

— Total assets ≥ indexed size threshold, where:

• Loan to assets > 33%

• Core deposits to assets > 50%

• More than 1 office but no more than the indexed 

maximum number of offices.3

1

 Consumer nonbank banks are financial institutions with limited charters that can make commercial loans or take deposits, but not both.

2

 Asset size threshold indexed to equal $250 million in 1985 and 

$1 billion in 2010.

3

 Maximum number of offices indexed to equal 40 in 1985 and 75 

in 2010.

Notes to Users

This publication contains financial data and other information for depository institutions insured by the Federal Deposit 

Insurance Corporation (FDIC). These notes are an integral 

part of this publication and provide information regarding 

the comparability of source data and reporting differences

over time.

Tables I-A through VIII-A.

The information presented in Tables I-A through V-A of 

the FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and savings institutions. Tables VI-A (Derivatives) and VII-A (Servicing, 

Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered 

savings banks that file quarterly Call Reports. Table VIII-A 

(Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured institutions. 

Some tables are arrayed by groups of FDIC-insured institutions based on predominant types of asset concentration, 

while other tables aggregate institutions by asset size and 

geographic region. Quarterly and full-year data are provided 

for selected indicators, including aggregate condition and 

income data, performance ratios, condition ratios, and structural changes, as well as past due, noncurrent, and charge-off 

information for loans outstanding and other assets.

Tables I-B through VI-B.

The information presented in Tables I-B through VI-B is 

aggregated for all FDIC-insured commercial banks and savings 

institutions meeting the criteria for community banks that 

were developed for the FDIC’s Community Banking Study, 

published in December, 2012: http://fdic.gov/regulations/

resources/cbi/report/cbi-full.pdf. 

The determination of which insured institutions are considered community banks is based on five steps.

The first step in defining a community bank is to aggregate

all charter-level data reported under each holding company 

into a single banking organization. This aggregation applies

both to balance-sheet measures and the number and location 

of banking offices. Under the FDIC definition, if the banking 

organization is designated as a community bank, every charter reporting under that organization is also considered a 

community bank when working with data at the charter 

level. 

The second step is to exclude any banking organization 

where more than 50 percent of total assets are held in certain 

specialty banking charters, including: credit card specialists, 

consumer nonbank banks, industrial loan companies, trust companies, bankers’ banks, and banks holding 10 percent or more 

of total assets in foreign offices. 

Once the specialty organizations are removed, the third step 

involves including organizations that engage in basic banking 

activities as measured by the total loans-to-assets ratio (greater than 33 percent) and the ratio of core deposits to assets

(greater than 50 percent). Core deposits are defined as nonbrokered deposits in domestic offices. Analysis of the underlying data shows that these thresholds establish meaningful 

levels of basic lending and deposit gathering and still allow 

for a degree of diversity in how individual banks construct

their balance sheets.
FDIC Quarterly 25 2014, Volume 8, No. 3

Quarterly Banking Profile

• Number of large MSAs with offices ≤ 2

• Number of states with offices ≤ 3

• No single office with deposits > indexed maximum 

branch deposit size.4

Tables I-C through IV-C.

A separate set of tables (Tables I-C through IV-C) provides 

comparative quarterly data related to the Deposit Insurance 

Fund (DIF), problem institutions, failed/assisted institutions, 

estimated FDIC-insured deposits, as well as assessment rate 

information. Depository institutions that are not insured by the 

FDIC through the DIF are not included in the FDIC Quarterly 

Banking Profile. U.S. branches of institutions headquartered in

foreign countries and non-deposit trust companies are not 

included unless otherwise indicated. Efforts are made to obtain 

financial reports for all active institutions. However, in some 

cases, final financial reports are not available for institutions 

that have closed or converted their charters.

DATA SOURCES

The financial information appearing in this publication is 

obtained primarily from the Federal Financial Institutions 

Examination Council (FFIEC) Consolidated Reports of 

Condition and Income (Call Reports) and the OTS Thrift 

Financial Reports submitted by all FDIC-insured depository 

institutions. (TFR filers began filing Call Reports effective 

with the quarter ending March 31, 2012.) This information is 

stored on and retrieved from the FDIC’s Research 

Information System (RIS) database.

COMPUTATION METHODOLOGY

Parent institutions are required to file consolidated reports, 

while their subsidiary financial institutions are still required 

to file separate reports. Data from subsidiary institution 

reports are included in the Quarterly Banking Profile tables, 

which can lead to double-counting. No adjustments are made 

for any double-counting of subsidiary data. Additionally, 

certain adjustments are made to the OTS Thrift Financial 

Reports to provide closer conformance with the reporting and 

accounting requirements of the FFIEC Call Reports. (TFR 

filers began filing Call Reports effective with the quarter ending March 31, 2012.)

All asset and liability figures used in calculating performance 

ratios represent average amounts for the period (beginning-ofperiod amount plus end-of-period amount plus any interim 

periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s) 

are included in average assets since the year-to-date income 

includes the results of all merged institutions. No adjustments 

are made for “purchase accounting” mergers. Growth rates 

represent the percentage change over a 12-month period in 

totals for institutions in the base period to totals for institutions in the current period. For the community bank subgroup, growth rates will reflect changes over time in the 

number and identities of institutions designated as community banks, as well as changes in the assets and liabilities, and 

income and expenses of group members. Unless indicated 

otherwise, growth rates are not adjusted for mergers or other 

changes in the composition of the community bank subgroup.

4

 Maximum branch deposit size indexed to equal $1.25 billion in 1985 

and $5 billion in 2010.

All data are collected and presented based on the location of 

each reporting institution’s main office. Reported data may 

include assets and liabilities located outside of the reporting 

institution’s home state. In addition, institutions may relocate 

across state lines or change their charters, resulting in an 

inter-regional or inter-industry migration, e.g., institutions 

can move their home offices between regions, and savings 

institutions can convert to commercial banks or commercial 

banks may convert to savings institutions.

ACCOUNTING CHANGES

Reclassification of Residential Real Estate Collateralized Consumer 

Mortgage Loans Upon Foreclosure

In January 2014, the FASB issued Accounting Standards 

Update (ASU) No. 2014-04, “Reclassification of Residential 

Real Estate Collateralized Consumer Mortgage Loans upon 

Foreclosure,” to address diversity in practice for when certain 

loan receivables should be derecognized and the real estate 

collateral recognized. The ASU updated guidance contained 

in Accounting Standards Codification Subtopic 310-40, 

Receivables–Troubled Debt Restructurings by Creditors (formerly FASB Statement No.15, “Accounting by Debtors and 

Creditors for Troubled Debt Restructurings,” as amended).

Under prior accounting guidance, all loan receivables were 

reclassified to other real estate owned (OREO) when the 

institution, as creditor, obtained physical possession of the 

property, regardless of whether formal foreclosure proceedings 

had taken place. The new ASU clarifies when a creditor is 

considered to have received physical possession (resulting 

from an in-substance repossession or foreclosure) of residential 

real estate collateralizing a consumer mortgage loan. Under 

the new guidance, physical possession for these residential real 

estate properties is considered to have occurred and a loan 

receivable would be reclassified to OREO only upon:

— The institution obtaining legal title upon completion of a

foreclosure even if the borrower has redemption rights that 

provide the borrower with a legal right for a period of time 

after foreclosure to reclaim the property by paying certain 

amounts specified by law, or

— The completion of a deed in lieu of foreclosure or similar

legal agreement under which the borrower conveys all 

interest in the residential real estate property to the institution to satisfy the loan.

Loans secured by real estate other than consumer mortgage 

loans collateralized by residential real estate should continue 

to be reclassified to OREO when the institution has received 

physical possession of a borrower’s real estate, regardless of 

whether formal foreclosure proceedings take place.

For institutions that are public business entities, as defined 

under U.S. generally accepted accounting principles, ASU 

2014-04 is effective for fiscal years, and interim periods within 

those fiscal years, beginning after December 15, 2014. For 

example, institutions with a calendar year fiscal year that are 

public business entities must apply the ASU in their Call 

Reports beginning March 31, 2015. However, institutions 

that are not public business entities are not required to apply 

the guidance in ASU 2014-04 until annual periods beginning 

after December 15, 2014, and interim periods within annual 

periods beginning after December 15, 2015. Thus, institutions 

with a calendar year fiscal year that are not public business 

entities must apply the ASU in their December 31, 2015, and 
FDIC Quarterly 26 2014, Volume 8, No. 3

Goodwill Impairment Testing – In September 2011, the FASB 

issued Accounting Standards Update (ASU) No. 2011-08, 

“Testing Goodwill for Impairment,” to address concerns about 

the cost and complexity of the existing goodwill impairment 

test in ASC Topic 350, Intangibles-Goodwill and Other 

(formerly FASB Statement No. 142, “Goodwill and Other 

Intangible Assets”). The ASU’s amendments to ASC 

Topic 350 are effective for annual and interim goodwill 

impairment tests performed for fiscal years beginning after 

December 15, 2011 (i.e., for annual or interim tests performed 

on or after January 1, 2012, for institutions with a calendar 

year fiscal year). Early adoption of the ASU was permitted. 

Under ASU 2011-08, an institution has the option of first 

assessing qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test described in ASC Topic 350. If, after considering 

all relevant events and circumstances, an institution determines it is unlikely (that is, a likelihood of 50 percent or less) 

that the fair value of a reporting unit is less than its carrying 

amount (including goodwill), then the institution does not 

need to perform the two-step goodwill impairment test. If the 

institution instead concludes that the opposite is true (that is, 

it is likely that the fair value of a reporting unit is less than its 

carrying amount), then it is required to perform the first step 

and, if necessary, the second step of the two-step goodwill 

impairment test. Under ASU 2011-08, an institution may 

choose to bypass the qualitative assessment for any reporting 

unit in any period and proceed directly to performing the first 

step of the two-step goodwill impairment test.

Extended Net Operating Loss Carryback Period – The Worker, 

Homeownership, and Business Assistance Act of 2009, which 

was enacted on November 6, 2009, permits banks and other 

businesses, excluding those banking organizations that 

received capital from the U.S. Treasury under the Troubled 

Asset Relief Program, to elect a net operating loss carryback 

period of three, four, or five years instead of the usual carryback period of two years for any one tax year ending after 

December 31, 2007, and beginning before January 1, 2010. 

For calendar-year banks, this extended carryback period 

applies to either the 2008 or 2009 tax year. The amount of 

the net operating loss that can be carried back to the fifth 

carryback year is limited to 50 percent of the available taxable income for that fifth year, but this limit does not apply to 

other carryback years.

Under generally accepted accounting principles, banks may 

not record the effects of this tax change in their balance 

sheets and income statements for financial and regulatory 

reporting purposes until the period in which the law was 

enacted, i.e., the fourth quarter of 2009. Therefore, banks 

should recognize the effects of this fourth quarter 2009 tax 

law change on their current and deferred tax assets and liabilities, including valuation allowances for deferred tax assets, in 

their Call Reports for December 31, 2009. Banks should not 

amend their Call Reports for prior quarters for the effects of 

the extended net operating loss carryback period.

The American Recovery and Reinvestment Act of 2009, 

which was enacted on February 17, 2009, permits qualifying 

small businesses, including FDIC-insured institutions, to elect 

a net operating loss carryback period of three, four, or five 

years instead of the usual carryback period of two years for 

any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally 

subsequent quarterly Call Reports. Earlier adoption of the 

guidance in ASU 2014-04 is permitted. Entities can elect to 

apply the ASU on either a modified retrospective transition 

basis or a prospective transition basis. Applying the ASU on a 

prospective transition basis should be less complex for institutions than applying the ASU on a modified retrospective transition basis. Under the prospective transition method, an 

institution should apply the new guidance to all instances 

where it receives physical possession of residential real estate 

property collateralizing consumer mortgage loans that occur 

after the date of adoption of the ASU. Under the modified 

retrospective transition method, an institution should apply a 

cumulative-effect adjustment to residential consumer mortgage 

loans and OREO existing as of the beginning of the annual 

period for which the ASU is effective. As a result of adopting 

the ASU on a modified retrospective basis, assets reclassified 

from OREO to loans should be measured at the carrying value 

of the real estate at the date of adoption while assets reclassified from loans to OREO should be measured at the lower of 

the net amount of the loan receivable or the OREO property’s 

fair value less costs to sell at the time of adoption.

For additional information, institutions should refer to ASU 

2014-04, which is available at http://www.fasb.org/jsp/FASB/

Page/SectionPage&cid=1176156316498.

Indemnification Assets and Accounting Standards Update No. 2012-

06 – In October 2012, the FASB issued Accounting Standards 

Update (ASU) No. 2012-06, “Subsequent Accounting for an 

Indemnification Asset Recognized at the Acquisition Date as 

a Result of a Government-Assisted Acquisition of a Financial 

Institution,” to address the subsequent measurement of an 

indemnification asset recognized in an acquisition of a financial institution that includes an FDIC loss-sharing agreement. 

This ASU amends ASC Topic 805, Business Combinations 

(formerly FASB Statement No. 141 (revised 2007),”Business 

Combinations”), which includes guidance applicable to FDICassisted acquisitions of failed institutions.

Under the ASU, when an institution experiences a change in 

the cash flows expected to be collected on an FDIC loss-sharing indemnification asset because of a change in the cash 

flows expected to be collected on the assets covered by the 

loss-sharing agreement, the institution should account for the 

change in the measurement of the indemnification asset on 

the same basis as the change in the assets subject to indemnification. Any amortization of changes in the value of the 

indemnification asset should be limited to the lesser of the 

term of the indemnification agreement and the remaining life 

of the indemnified assets.

The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2012. 

For institutions with a calendar year fiscal year, the ASU takes 

effect January 1, 2013. Early adoption of the ASU is permitted. 

The ASU’s provisions should be applied prospectively to any 

new indemnification assets acquired after the date of adoption 

and to indemnification assets existing as of the date of adoption arising from an FDIC-assisted acquisition of a financial 

institution. Institutions with indemnification assets arising 

from FDIC loss-sharing agreements are expected to adopt ASU 

2012-06 for Call Report purposes in accordance with the effective date of this standard. For additional information, refer to 

ASU 2012-06, available at http://www.fasb.org/jsp/FASB/

Page/SectionPage&cid=1176156316498.
FDIC Quarterly 27 2014, Volume 8, No. 3

Quarterly Banking Profile

Troubled Debt Restructurings and Accounting Standards Update 

No. 2011-02 – In April 2011, the FASB issued Accounting 

Standards Update (ASU) No. 2011-02, “A Creditor’s 

Determination of Whether a Restructuring Is a Troubled 

Debt Restructuring,” to provide additional guidance to help 

creditors determine whether a concession has been granted to 

a borrower and whether a borrower is experiencing financial 

difficulties. The guidance is also intended to reduce diversity 

in practice in identifying and reporting TDRs. This ASU was 

effective for public companies for interim and annual periods 

beginning on or after June 15, 2011, and should have been 

applied retrospectively to the beginning of the annual period 

of adoption for purposes of identifying TDRs. The measurement of impairment for any newly identified TDRs resulting 

from retrospective application should have been applied prospectively in the first interim or annual period beginning on 

or after June 15, 2011. (For most public institutions, the ASU 

takes effect July 1, 2011, but retrospective application begins 

as of January 1, 2011.) Nonpublic companies should apply the 

new guidance for annual periods ending after December 15, 

2012, including interim periods within those annual periods. 

(For most nonpublic institutions, the ASU took effect 

January 1, 2012.) Early adoption of the ASU was permitted 

for both public and nonpublic entities. Nonpublic entities 

that adopt early are subject to a retrospective identification 

requirement. For additional information, refer to ASU 2011-

02, available at http://www.fasb.org/jsp/FASB/Page/

SectionPage&cid=1176156316498.

Accounting for Loan Participations – Amended ASC Topic 860 

(formerly FAS 166) modified the criteria that must be met in 

order for a transfer of a portion of a financial asset, such as a 

loan participation, to qualify for sale accounting. These 

changes apply to transfers of loan participations on or after 

the effective date of amended ASC Topic 860 (January 1, 

2010, for banks with calendar year fiscal year), including 

advances under lines of credit that are transferred on or after 

the effective date of amended ASC Topic 860 even if the line 

of credit agreements were entered into before this effective 

date. Therefore, banks with a calendar-year fiscal year must 

account for transfers of loan participations on or after January 

1, 2010, in accordance with amended ASC Topic 860. In 

general, loan participations transferred before the effective 

date of amended ASC Topic 860 are not affected by this new 

accounting standard.

Under amended ASC Topic 860, if a transfer of a portion of 

an entire financial asset meets the definition of a “participating interest,” then the transferor (normally the lead lender) 

must evaluate whether the transfer meets all of the conditions 

in this accounting standard to qualify for sale accounting.

Other-Than-Temporary Impairment – When the fair value of an 

investment in an individual available-for-sale or held-tomaturity security is less than its cost basis, the impairment is 

either temporary or other-than-temporary. The amount of the 

total other-than-temporary impairment related to credit loss 

must be recognized in earnings, but the amount of total 

impairment related to other factors must be recognized in 

other comprehensive income, net of applicable taxes. To 

determine whether the impairment is other-than-temporary, 

an institution must apply the applicable accounting guidance 

– refer to previously published Quarterly Banking Profile notes: 

http://www2.fdic.gov/qbp/2011mar/qbpnot.html.

accepted accounting principles, institutions may not record 

the effect of this tax change in their balance sheets and 

income statements for financial and regulatory reporting 

purposes until the period in which the law was enacted, i.e., 

the first quarter of 2009.

Troubled Debt Restructurings and Current Market Interest Rates – 

Many institutions are restructuring or modifying the terms of 

loans to provide payment relief for those borrowers who have 

suffered deterioration in their financial condition. Such loan 

restructurings may include, but are not limited to, reductions 

in principal or accrued interest, reductions in interest rates, 

and extensions of the maturity date. Modifications may be 

executed at the original contractual interest rate on the loan, 

a current market interest rate, or a below-market interest rate. 

Many of these loan modifications meet the definition of a 

troubled debt restructuring (TDR).

The TDR accounting and reporting standards are set forth 

in ASC Subtopic 310-40, Receivables – Troubled Debt 

Restructurings by Creditors (formerly FASB Statement 

No. 15, “Accounting by Debtors and Creditors for Troubled 

Debt Restructurings,” as amended). This guidance specifies 

that a restructuring of a debt constitutes a TDR if, at the date 

of restructuring, the creditor for economic or legal reasons 

related to a debtor’s financial difficulties grants a concession 

to the debtor that it would not otherwise consider.

In the Call Report, until a loan that is a TDR is paid in full or 

otherwise settled, sold, or charged off, it must be reported in 

the appropriate loan category, as well as identified as a performing TDR loan, if it is in compliance with its modified 

terms. If a TDR is not in compliance with its modified terms, 

it is reported as a past-due and nonaccrual loan in the appropriate loan category, as well as distinguished from other past 

due and nonaccrual loans. To be considered in compliance 

with its modified terms, a loan that is a TDR must not be in 

nonaccrual status and must be current or less than 30 days past 

due on its contractual principal and interest payments under 

the modified repayment terms. A loan restructured in a TDR 

is an impaired loan. Thus, all TDRs must be measured for 

impairment in accordance with ASC Subtopic 310-10, 

Receivables – Overall (formerly FASB Statement No. 114, 

“Accounting by Creditors for Impairment of a Loan,” as 

amended), and the Call Report Glossary entry for “Loan 

Impairment.” Consistent with ASC Subtopic 310-10, TDRs 

may be aggregated and measured for impairment with other 

impaired loans that share common risk characteristics by using 

historical statistics, such as average recovery period and 

average amount recovered, along with a composite effective 

interest rate. The outcome of such an aggregation approach 

must be consistent with the impairment measurement methods prescribed in ASC Subtopic 310-10 and Call Report 

instructions for loans that are “individually” considered 

impaired instead of the measurement method prescribed in 

ASC Subtopic 450-20, Contingencies – Loss Contingencies 

(formerly FASB Statement No. 5, “Accounting for Contingencies”) for loans not individually considered impaired that 

are collectively evaluated for impairment. When a loan not 

previously considered individually impaired is restructured and 

determined to be a TDR, absent a partial charge-off, it generally is not appropriate for the impairment estimate on the loan 

to decline as a result of the change from the impairment measurement method prescribed in ASC Subtopic 450-20 to the 

methods prescribed in ASC Subtopic 310-10.
FDIC Quarterly 28 2014, Volume 8, No. 3

Assessment base – effective April 1, 2011, the deposit insurance assessment base has changed to “average consolidated 

total assets minus average tangible equity” with an additional 

adjustment to the assessment base for banker’s banks and custodial banks, as permitted under Dodd-Frank. Previously the 

assessment base was “assessable deposits” and consisted of DIF 

deposits (deposits insured by the FDIC Deposit Insurance 

Fund) in banks’ domestic offices with certain adjustments.

Assets securitized and sold – total outstanding principal balance 

of assets securitized and sold with servicing retained or other 

seller- provided credit enhancements.

Capital Purchase Program (CPP) – as announced in October 

2008 under the TARP, the Treasury Department purchase of 

noncumulative perpetual preferred stock and related warrants 

that is treated as Tier 1 capital for regulatory capital purposes 

is included in “Total equity capital.” Such warrants to purchase common stock or noncumulative preferred stock issued 

by publicly-traded banks are reflected as well in “Surplus.” 

Warrants to purchase common stock or noncumulative preferred stock of not-publicly-traded bank stock are classified in 

a bank’s balance sheet as “Other liabilities.”

Construction and development loans – includes loans for all 

property types under construction, as well as loans for land 

acquisition and development.

Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated 

subsidiaries, less goodwill and other ineligible intangible 

assets. The amount of eligible intangibles (including servicing 

rights) included in core capital is limited in accordance with 

supervisory capital regulations.

Cost of funding earning assets – total interest expense paid on 

deposits and other borrowed money as a percentage of average 

earning assets.

Credit enhancements – techniques whereby a company attempts 

to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit 

enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be 

associated with a given issuance.

Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings 

Association (SAIF) Insurance Funds were merged in 2006 by 

the Federal Deposit Insurance Reform Act to form the DIF.

Derivatives notional amount – the notional, or contractual, 

amounts of derivatives represent the level of involvement in 

the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent 

the amounts used to calculate contractual cash flows to be 

exchanged.

Derivatives credit equivalent amount – the fair value of the 

derivative plus an additional amount for potential future credit exposure based on the notional amount, the remaining 

maturity and type of the contract.

Derivatives transaction types:

Futures and forward contracts – contracts in which the buyer 

agrees to purchase and the seller agrees to sell, at a specified future date, a specific quantity of an underlying variable or index at a specified price or yield. These contracts 

exist for a variety of variables or indices, (traditional agricultural or physical commodities, as well as currencies and 

interest rates). Futures contracts are standardized and are 

ASC Topics 860 & 810 (formerly FASB Statements 166 & 167) – 

In June 2009, the FASB issued Statement No. 166, 

Accounting for Transfers of Financial Assets (FAS 166), and 

Statement No. 167, Amendments to FASB Interpretation 

No. 46(R) (FAS 167), which change the way entities account 

for securitizations and special purpose entities. FAS 166 

revised FASB Statement No. 140, Accounting for Transfers 

and Servicing of Financial Assets and Extinguishments of 

Liabilities, by eliminating the concept of a “qualifying specialpurpose entity,” creating the concept of a “participating interest,” changing the requirements for derecognizing financial 

assets, and requiring additional disclosures. FAS 167 revised 

FASB Interpretation No. 46(R), Consolidation of Variable 

Interest Entities, by changing how a bank or other company 

determines when an entity that is insufficiently capitalized or 

is not controlled through voting or similar rights, i.e., a “variable interest entity” (VIE), should be consolidated. Under 

FAS 167, a bank must perform a qualitative assessment to 

determine whether its variable interest or interests give it a 

controlling financial interest in a VIE. If a bank’s variable 

interest or interests provide it with the power to direct the 

most significant activities of the VIE, and the right to receive 

benefits or the obligation to absorb losses that could potentially be significant to the VIE, the bank is the primary beneficiary of, and therefore must consolidate, the VIE.

Both FAS 166 and FAS 167 take effect as of the beginning of 

each bank’s first annual reporting period that begins after 

November 15, 2009, for interim periods therein, and for 

interim and annual reporting periods thereafter (i.e., as of 

January 1, 2010, for banks with a calendar year fiscal year). 

Earlier application is prohibited. Banks are expected to adopt 

FAS 166 and FAS 167 for Call Report purposes in accordance with the effective date of these two standards. Also, 

FAS 166 has modified the criteria that must be met in order 

for a transfer of a portion of a financial asset, such as a loan 

participation, to qualify for sale accounting. These changes 

apply to transfers of loan participations on or after the effective date of FAS 166. Therefore, banks with a calendar year 

fiscal year must account for transfers of loan participations on 

or after January 1, 2010, in accordance with FAS 166. In general, loan participations transferred before the effective date 

of FAS 166 (January 1, 2010, for calendar year banks) are not 

affected by this new accounting standard and pre-FAS 166 

participations that were properly accounted for as sales under 

FASB Statement No. 140 will continue to be reported as 

having been sold.

Accounting Standards Codification – refer to previously published Quarterly Banking Profile notes: http://www2.fdic.

gov/qbp/2011sep/qbpnot.html.

DEFINITIONS (in alphabetical order)

All other assets – total cash, balances due from depository 

institutions, premises, fixed assets, direct investments in real 

estate, investment in unconsolidated subsidiaries, customers’ 

liability on acceptances outstanding, assets held in trading 

accounts, federal funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid 

deposit insurance assessments, and other assets.

All other liabilities – bank’s liability on acceptances, limited-life 

preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities.
FDIC Quarterly 29 2014, Volume 8, No. 3

Quarterly Banking Profile

closed assets—involves the use of fair values. During periods 

of market stress, the fair values of some financial instruments 

and nonfinancial assets may decline.

FHLB advances – all borrowings by FDIC insured institutions 

from the Federal Home Loan Bank System (FHLB), as 

reported by Call Report filers, and by TFR filers prior to 

March 31, 2012.

Goodwill and other intangibles – intangible assets include 

servicing rights, purchased credit card relationships, and other 

identifiable intangible assets. Goodwill is the excess of the 

purchase price over the fair market value of the net assets 

acquired, less subsequent impairment adjustments. Other 

intangible assets are recorded at fair value, less subsequent 

quarterly amortization and impairment adjustments.

Loans secured by real estate – includes home equity loans, 

junior liens secured by 1-4 family residential properties, and 

all other loans secured by real estate.

Loans to individuals – includes outstanding credit card balances 

and other secured and unsecured consumer loans.

Long-term assets (5+ years) – loans and debt securities with 

remaining maturities or repricing intervals of over five years.

Maximum credit exposure – the maximum contractual credit 

exposure remaining under recourse arrangements and other 

seller-provided credit enhancements provided by the reporting bank to securitizations.

Mortgage-backed securities – certificates of participation in 

pools of residential mortgages and collateralized mortgage 

obligations issued or guaranteed by government-sponsored or 

private enterprises. Also, see “Securities,” below.

Net charge-offs – total loans and leases charged off (removed 

from balance sheet because of uncollectibility), less amounts 

recovered on loans and leases previously charged off.

Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to 

depositors and other creditors, expressed as a percentage of 

average earning assets. No adjustments are made for interest 

income that is tax exempt.

Net loans to total assets – loans and lease financing receivables, net of unearned income, allowance and reserves, as a 

percent of total assets on a consolidated basis.

Net operating income – income excluding discretionary transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from 

operating income have been adjusted to exclude the portion 

applicable to securities gains (or losses).

Noncurrent assets – the sum of loans, leases, debt securities, 

and other assets that are 90 days or more past due, or in nonaccrual status.

Noncurrent loans & leases – the sum of loans and leases 90 days 

or more past due, and loans and leases in nonaccrual status.

Number of institutions reporting – the number of institutions 

that actually filed a financial report.

New reporters – insured institutions filing quarterly financial 

reports for the first time.

Other borrowed funds – federal funds purchased, securities sold 

with agreements to repurchase, demand notes issued to the 

U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and 

traded on organized exchanges which set limits on counterparty credit exposure. Forward contracts do not have 

standardized terms and are traded over the counter.

Option contracts – contracts in which the buyer acquires the 

right to buy from or sell to another party some specified 

amount of an underlying variable or index at a stated price

(strike price) during a period or on a specified future date, 

in return for compensation (such as a fee or premium). 

The seller is obligated to purchase or sell the variable or 

index at the discretion of the buyer of the contract.

Swaps – obligations between two parties to exchange a 

series of cash flows at periodic intervals (settlement dates), 

for a specified period. The cash flows of a swap are either 

fixed, or determined for each settlement date by multiplying the quantity (notional principal) of the underlying 

variable or index by specified reference rates or prices. 

Except for currency swaps, the notional principal is used 

to calculate each payment but is not exchanged.

Derivatives underlying risk exposure – the potential exposure 

characterized by the level of banks’ concentration in particular underlying instruments, in general. Exposure can result 

from market risk, credit risk, and operational risk, as well as, 

interest rate risk.

Domestic deposits to total assets – total domestic office deposits 

as a percent of total assets on a consolidated basis.

Earning assets – all loans and other investments that earn 

interest or dividend income.

Efficiency ratio – Noninterest expense less amortization of 

intangible assets as a percent of net interest income plus noninterest income. This ratio measures the proportion of net 

operating revenues that are absorbed by overhead expenses, 

so that a lower value indicates greater efficiency.

Estimated insured deposits – in general, insured deposits are 

total domestic deposits minus estimated uninsured deposits. 

Beginning March 31, 2008, for institutions that file Call 

Reports, insured deposits are total assessable deposits minus 

estimated uninsured deposits. Beginning September 30, 2009, 

insured deposits include deposits in accounts of $100,000 to 

$250,000 that are covered by a temporary increase in the 

FDIC’s standard maximum deposit insurance amount 

(SMDIA). The Dodd-Frank Wall Street Reform and 

Consumer Protection Act enacted on July 21, 2010, made 

permanent the standard maximum deposit insurance amount 

(SMDIA) of $250,000. Also, the Dodd-Frank Act amended 

the Federal Deposit Insurance Act to include noninterestbearing transaction accounts as a new temporary deposit 

insurance account category. All funds held in noninterestbearing transaction accounts were fully insured, without limit, 

from December 31, 2010, through December 31, 2012.

Failed/assisted institutions – an institution fails when regulators 

take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or 

another healthy institution. This action may require the 

FDIC to provide funds to cover losses. An institution is 

defined as “assisted” when the institution remains open and 

receives assistance in order to continue operating.

Fair Value – the valuation of various assets and liabilities on 

the balance sheet—including trading assets and liabilities, 

available-for-sale securities, loans held for sale, assets and 

liabilities accounted for under the fair value option, and fore-
FDIC Quarterly 30 2014, Volume 8, No. 3

Risk Categories and Assessment Rate Schedule – The current risk 

categories became effective January 1, 2007. Capital ratios and 

supervisory ratings distinguish one risk category from another. 

Effective April 1, 2011, risk categories for large institutions 

(generally those with at least $10 billion in assets) were eliminated. The following table shows the relationship of risk categories (I, II, III, IV) for small institutions to capital and 

supervisory groups as well as the initial base assessment rates 

(in basis points) for each risk category. Supervisory Group A 

generally includes institutions with CAMELS composite ratings of 1 or 2; Supervisory Group B generally includes institutions with a CAMELS composite rating of 3; and Supervisory 

Group C generally includes institutions with CAMELS composite ratings of 4 or 5. For purposes of risk-based assessment 

capital groups, undercapitalized includes institutions that are 

significantly or critically undercapitalized.

Capital Category

Supervisory Group

A B C

1. Well Capitalized I

5–9 bps II

14 bps

III

23 bps 2. Adequately Capitalized II

14 bps

3. Undercapitalized III

23 bps

IV

35 bps

Effective April 1, 2011, the initial base assessment rates are 5 

to 35 basis points. An institution’s total assessment rate may 

be less than or greater than its initial base assessment rate as a 

result of additional risk adjustments.

The base assessment rates for small institutions in Risk 

Category I are based on a combination of financial ratios and 

CAMELS component ratings (the financial ratios method).

As required by Dodd-Frank, the calculation of risk-based 

assessment rates for large institutions no longer relies on longterm debt issuer ratings. Rates for large institutions are based 

on CAMELS ratings and certain forward-looking financial 

measures combined into two scorecards—one for most large 

institutions and another for the remaining very large institutions that are structurally and operationally complex or that 

pose unique challenges and risks in case of failure (highly 

complex institutions). In general, a highly complex institution is an institution (other than a credit card bank) with 

more than $500 billion in total assets that is controlled by a 

parent or intermediate parent company with more than $500 

billion in total assets or a processing bank or trust company 

with total fiduciary assets of $500 billion or more. The FDIC 

retains its ability to take additional information into account 

to make a limited adjustment to an institution’s total score 

(the large bank adjustment), which will be used to determine 

an institution’s initial base assessment rate.

Effective April 1, 2011, the three possible adjustments to 

an institution’s initial base assessment rate are as follows: 

(1) Unsecured Debt Adjustment: An institution’s rate may 

decrease by up to 5 basis points for unsecured debt. The unsecured debt adjustment cannot exceed the lesser of 5 basis 

points or 50 percent of an institution’s initial base assessment 

rate (IBAR). Thus, for example, an institution with an IBAR 

of 5 basis points would have a maximum unsecured debt 

trading liabilities, less revaluation losses on assets held in 

trading accounts.

Other real estate owned – primarily foreclosed property. Direct 

and indirect investments in real estate ventures are excluded. 

The amount is reflected net of valuation allowances. For 

institutions that file a Thrift Financial Report (TFR), the 

valuation allowance subtracted also includes allowances for 

other repossessed assets. Also, for TFR filers the components 

of other real estate owned are reported gross of valuation 

allowances. (TFR filers began filing Call Reports effective 

with the quarter ending March 31, 2012.)

Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their 

losses) compared to the same period a year earlier.

“Problem” institutions – federal regulators assign a composite 

rating to each financial institution, based upon an evaluation 

of financial and operational criteria. The rating is based on a 

scale of 1 to 5 in ascending order of supervisory concern. 

“Problem” institutions are those institutions with financial, 

operational, or managerial weaknesses that threaten their 

continued financial viability. Depending upon the degree of 

risk and supervisory concern, they are rated either a “4” or 

“5.” The number and assets of “problem” institutions are 

based on FDIC composite ratings. Prior to March 31, 2008, 

for institutions whose primary federal regulator was the OTS, 

the OTS composite rating was used.

Recourse – an arrangement in which a bank retains, in form or 

in substance, any credit risk directly or indirectly associated 

with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the 

bank’s claim on the asset. If a bank has no claim on an asset 

it has sold, then the retention of any credit risk is recourse.

Reserves for losses – the allowance for loan and lease losses on 

a consolidated basis.

Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. 

Excludes restructured loans and leases that are not in compliance with the modified terms.

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

Return on assets – bank net income (including gains or losses 

on securities and extraordinary items) as a percentage of average total (consolidated) assets. The basic yardstick of bank 

profitability.

Return on equity – bank net income (including gains or losses 

on securities and extraordinary items) as a percentage of average total equity capital.

Risk-based capital groups – definition:

(Percent)

Total 

Risk-Based 

Capital*

Tier 1 

Risk-Based 

Capital*

Tier 1 

Leverage

Tangible 

Equity

Well-capitalized ≥10 and ≥6 and ≥5 –

Adequately 

capitalized ≥8 and ≥4 and ≥4 –

Undercapitalized ≥6 and ≥3 and ≥3 –

Significantly 

undercapitalized <6 or <3 or <3 and >2

Critically 

undercapitalized – – – ≤2

* As a percentage of risk-weighted assets.
FDIC Quarterly 31 2014, Volume 8, No. 3

Quarterly Banking Profile

prepaid assessments to the quarterly deposit insurance 

assessments payable March 29, 2013. The FDIC issued 

refunds of any unused prepaid deposit insurance assessments on June 28, 2013.

[Note: Effective January 1, 2014, a small number of “advanced 

approach institutions” began reporting Tier 1 capital based on 

regulatory capital standards approved by the banking agencies 

in July 2013. For all other FDIC-insured institutions, prior 

existing reporting will continue until January 2015 when 

mandatory compliance for all institutions is scheduled to 

begin. http://www.fdic.gov/regulations/capital/. At that time a 

revised assessment rate schedule will be used to reflect the 

changes in the regulatory capital rules. http://www.fdic.gov/

news/news/financial/2014/fil14037.html]

Risk-weighted assets – assets adjusted for risk-based capital 

definitions which include on-balance-sheet as well as offbalance-sheet items multiplied by risk-weights that range 

from zero to 200 percent. A conversion factor is used to assign 

a balance sheet equivalent amount for selected off-balancesheet accounts.

Securities – excludes securities held in trading accounts. 

Banks’ securities portfolios consist of securities designated as 

“held-to-maturity,” which are reported at amortized cost 

(book value), and securities designated as “available-for-sale,” 

reported at fair (market) value.

Securities gains (losses) – realized gains (losses) on held-tomaturity and available-for-sale securities, before adjustments 

for income taxes. Thrift Financial Report (TFR) filers also 

include gains (losses) on the sales of assets held for sale. 

(TFR filers began filing Call Reports effective with the quarter ending March 31, 2012.)

Seller’s interest in institution’s own securitizations – the reporting 

bank’s ownership interest in loans and other assets that have 

been securitized, except an interest that is a form of recourse 

or other seller-provided credit enhancement. Seller’s interests 

differ from the securities issued to investors by the securitization structure. The principal amount of a seller’s interest is 

generally equal to the total principal amount of the pool of 

assets included in the securitization structure less the principal amount of those assets attributable to investors, i.e., in the 

form of securities issued to investors.

Small Business Lending Fund – The Small Business Lending 

Fund (SBLF) was enacted into law in September 2010 as part 

of the Small Business Jobs Act of 2010 to encourage lending 

to small businesses by providing capital to qualified 

community institutions with assets of less than $10 billion. 

The SBLF Program is administered by the U.S. Treasury 

Department (http://www.treasury.gov/resource-center/

sb-programs/Pages/Small-Business-Lending-Fund.aspx). 

Under the SBLF Program, the Treasury Department 

purchased noncumulative perpetual preferred stock from 

qualifying depository institutions and holding companies 

(other than Subchapter S and mutual institutions). When 

this stock has been issued by a depository institution, it is 

reported as “Perpetual preferred stock and related surplus.” 

For regulatory capital purposes, this noncumulative perpetual 

preferred stock qualifies as a component of Tier 1 capital. 

Qualifying Subchapter S corporations and mutual institutions 

issue unsecured subordinated debentures to the Treasury 

Department through the SBLF. Depository institutions that 

issued these debentures report them as “Subordinated notes 

adjustment of 2.5 basis points and could not have a total base 

assessment rate lower than 2.5 basis points. (2) Depository 

Institution Debt Adjustment: For institutions that hold longterm unsecured debt issued by another insured depository 

institution, a 50 basis point charge is applied to the amount 

of such debt held in excess of 3 percent of an institution’s 

Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for 

small institutions that are not in Risk Category I and for large 

institutions that are not well capitalized or do not have a 

composite CAMELS rating of 1 or 2 may increase (not to 

exceed 10 basis points) if their brokered deposits exceed 10 

percent of domestic deposits. After applying all possible 

adjustments (excluding the Depository Institution Debt 

Adjustment), minimum and maximum total base assessment 

rates for each risk category are as follows:

Total Base Assessment Rates*

Risk 

Category 

I

Risk 

Category 

II

Risk 

Category 

III

Risk 

Category 

IV

Large and 

Highly 

Complex 

Institutions

Initial base 

assessment rate 5–9 14 23 35 5–35

Unsecured debt 

adjustment -4.5–0 -5–0 -5–0 -5–0 -5–0

Brokered deposit 

adjustment — 0–10 0–10 0–10 0–10

Total Base 

Assessment rate 2.5–9 9–24 18–33 30–45 2.5–45

* All amounts for all categories are in basis points annually. Total base rates that are 

not the minimum or maximum rate will vary between these rates. Total base assessment rates do not include the depository institution debt adjustment.

Beginning in 2007, each institution is assigned a risk-based 

rate for a quarterly assessment period near the end of the 

quarter following the assessment period. Payment is generally 

due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes are 

effective for assessment purposes as of the examination transmittal date.

Special Assessment – On May 22, 2009, the FDIC board 

approved a final rule that imposed a 5 basis point special 

assessment as of June 30, 2009. The special assessment was 

levied on each insured depository institution’s assets minus 

its Tier 1 capital as reported in its report of condition as of 

June 30, 2009. The special assessment was collected 

September 30, 2009, at the same time that the risk-based 

assessment for the second quarter of 2009 was collected. 

The special assessment for any institution was capped at 

10 basis points of the institution’s assessment base for the 

second quarter of 2009 risk-based assessment.

Prepaid Deposit Insurance Assessments – In November 2009, 

the FDIC Board of Directors adopted a final rule requiring 

insured depository institutions (except those that are 

exempted) to prepay their quarterly risk-based deposit 

insurance assessments for the fourth quarter of 2009, and 

for all of 2010, 2011, and 2012, on December 30, 2009. 

For regulatory capital purposes, an institution may assign a 

zero-percent risk weight to the amount of its prepaid 

deposit assessment asset. As required by the FDIC’s regulation establishing the prepaid deposit insurance assessment 

program, this program ended with the final application of 
FDIC Quarterly 32 2014, Volume 8, No. 3

Trust assets – market value, or other reasonably available 

value of fiduciary and related assets, to include marketable 

securities, and other financial and physical assets. Common 

physical assets held in fiduciary accounts include real estate, 

equipment, collectibles, and household goods. Such fiduciary 

assets are not included in the assets of the financial 

institution.

Unearned income & contra accounts – unearned income for Call 

Report filers only.

Unused loan commitments – includes credit card lines, home 

equity lines, commitments to make loans for construction, 

loans secured by commercial real estate, and unused commitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for 

sale, which are accounted for as derivatives on the balance 

sheet.)

Yield on earning assets – total interest, dividend, and fee 

income earned on loans and investments as a percentage of 

average earning assets.

and debentures.” For regulatory capital purposes, the 

debentures are eligible for inclusion in an institution’s Tier 2 

capital in accordance with their primary federal regulator’s 

capital standards. To participate in the SBLF Program, an 

institution with outstanding securities issued to the Treasury 

Department under the Capital Purchase Program (CPP) was 

required to refinance or repay in full the CPP securities at the 

time of the SBLF funding. Any outstanding warrants that an 

institution issued to the Treasury Department under the CPP 

remain outstanding after the refinancing of the CPP stock 

through the SBLF Program unless the institution chooses to 

repurchase them.

Subchapter S corporation – a Subchapter S corporation is treated as a pass-through entity, similar to a partnership, for federal income tax purposes. It is generally not subject to any 

federal income taxes at the corporate level. This can have the 

effect of reducing institutions’ reported taxes and increasing 

their after-tax earnings.
FDIC Quarterly 33 2014, Volume 8, No. 3

Defining Minority Depository Institutions and 

Community Development Financial Institutions

Minority and community development financial institutions are time-honored institutional forms. Over time, 

both Congressional and Executive actions have been 

taken to clearly define these institutional forms. In 

particular, Congress enacted laws to provide a designation process for MDIs, as well as a certification process 

for CDFIs. Institutions that meet these definitions may 

benefit from programs created to support their provision 

of financial services to underserved consumers and 

communities.

In relation to more than 6,800 FDIC-insured financial 

institutions, the number of MDIs and insured institutions that are certified as CDFI banks is quite small. 

Only 2.6 percent of insured institutions are currently 

designated as MDIs, while 1.1 percent of insured institutions are certified as CDFIs (in addition to the CDFIs 

that are not federally insured depository institutions). 

MDIs carry a number of different minority designations, with half of MDIs designated as Asian or Pacific 

Islander American (Asian American), followed by a 

large share of MDIs with a Hispanic American minority status.

A review of financial data indicates that the characteristics of MDI balance sheets generally resemble those of 

community banks, with a reliance on core deposits to 

fund loans that are mostly related to residential and 

commercial real estate, although an increasing percentage of MDIs have specialized in commercial real estate 

lending over time.

The Geography of MDIs and CDFI Banks

Minority depository institutions are naturally linked to 

geographic areas that reflect the communities they seek 

to serve. As a result, most MDIs are headquartered in a 

handful of the most populous states. In addition, a large 

majority of the headquarters and branch offices of these 

institutions are located in large metropolitan areas. 

Owing to the concentration of MDI headquarters and 

branch offices in large metro areas, MDIs generally hold 

a relatively small market share, except in a few large 

counties such as Los Angeles and Miami-Dade. Minority depository institutions also hold a sizable share of 

deposits in a number of micropolitan and rural counties. The concentration of MDI offices in a limited 

number of metropolitan areas is likely due to the 

Introduction and Executive Summary

In the fall of 2011, the Federal Deposit Insurance 

Corporation (FDIC) announced a Community Banking 

Initiative focused on understanding the evolution of 

U.S. community banks over the past 25 years and the 

challenges and opportunities faced by this segment of 

the banking industry. Under this initiative, the FDIC 

hosted roundtable discussions across the country; 

undertook a review of its examination, rulemaking, and 

guidance processes; developed a technical assistance 

video program for bank directors, officers, and employees; and completed the FDIC Community Banking 

Study.

1

 In 2013, FDIC Chairman Martin Gruenberg 

announced that the FDIC would undertake a similar 

study of minority depository institutions (MDIs) and 

FDIC-insured community development financial institutions (CDFIs).2

Chairman Gruenberg described the important mission 

of MDIs and FDIC-insured CDFIs by noting, “Minority 

and CDFI banks play a vital role. Your mission is 

important. You provide responsible banking services 

to those who might not otherwise have access to a 

bank. And, you serve some of the most challenging 

markets in the country. One way we can contribute to 

your efforts is by conducting research specifically on 

MDI and CDFI institutions—to better understand the 

role they play in our financial system and in our 

communities.”

This study carries out this goal by building on analytical 

work discussed at the June 2013 Interagency MDI/CDFI 

Bank Conference, starting with a description of MDIs 

and FDIC-insured CDFIs and where these institutions 

are located. The remainder of the study is primarily 

focused on MDIs, for which the FDIC has historical 

data, exploring how this segment of the financial 

services industry has changed over time, how MDIs 

have performed financially, and the extent to which 

MDIs have achieved their mission in serving the needs 

of their community. It is important to note that when 

discussing CDFIs, the report focuses on the small share 

of CDFIs that are FDIC-insured, rather than all CDFIs.

1 FDIC Community Banking Study, December 2012, http://www.fdic.

gov/regulations/resources/cbi/study.html. 2

 Interagency MDI/CDFI Bank Conference proceedings—Strategies for 

Success through Collaboration, June 11, 2013, http://www.fdic.gov/

regulations/resources/minority/events/interagency2013/agenda2.html.

Minority Depository Institutions: 

Structure, Performance, and Social Impact
FDIC Quarterly 34 2014, Volume 8, No. 3

Social Impact of MDIs

Financial performance is not the only bottom line for 

MDIs. As noted in the FDIC policy statement regarding 

minority depository institutions, these organizations 

often promote the economic viability of minority and 

underserved communities, namely populations that are 

underserved by mainstream financial institutions. The 

study finds that MDIs have much to show for their 

efforts in reaching these populations. Compared with 

community banks, the markets served by MDI offices 

include a higher share of population living in low- or 

moderate-income (LMI) census tracts, as well as a 

higher share of minority populations. In addition, 

among institutions that reported data under the Home 

Mortgage Disclosure Act (HMDA), MDIs originated a 

larger share of their mortgages to borrowers who live in 

LMI census tracts and to minority borrowers than did 

non-MDI community banks. These findings indicate a 

significant degree of success by MDIs in serving the 

purpose that this segment of the banking industry was 

intended to achieve.

Section 1. Defining Minority Depository and 

Community Development Financial Institutions

MDIs

Minority depository institutions (MDIs) are a timehonored institutional form, with the earliest minorityowned banks dating back as far as 1866.3

 Yet, over time, 

there has been a growing recognition that more must be 

done to meet the financial needs of minority communities. Among many responsibilities, the FDIC has long 

played an important role in implementing measures to 

expand access to mainstream banking products and 

services.

There has been a series of legislative and regulatory 

actions designed to promote access to financial services 

on the part of underserved populations. Beginning in 

the 1960s, Congress enacted a number of consumer 

protection laws, including the Consumer Credit 

Protection Act of 1968 and the Equal Credit Opportunity Act of 1974. Congress also enacted laws designed 

to ensure that financial institutions serve all segments 

of their local communities. One of these laws, the 

Community Reinvestment Act (CRA) of 1977, “is 

intended to encourage depository institutions to help 

meet the credit and development needs of their 

3

 See Douglas A. Price, “Minority-Owned Banks: History and Trends,” 

Economic Commentary, Federal Reserve Bank of Cleveland, 1991, 

http://www.clevelandfed.org/research/commentary/1990/0701.pdf.

relatively small geographic footprint of MDIs, with 

most locating all of their banking offices in three counties or less. In addition, with the exception of several 

large Hispanic American MDIs, most MDIs have a 

small number of offices.

FDIC-insured institutions that are certified as CDFIs, 

but are not MDIs, tend to be concentrated in Mississippi, Illinois, and California, with more than half of 

their total banking offices in Mississippi alone. Finally, 

unlike MDIs, only about half of these FDIC-insured 

CDFIs are located in metropolitan areas.

Structural Change Among MDIs

Like other types of banks, the MDI banking segment 

has experienced significant structural change over time. 

The number of MDI charters has fluctuated, owing to 

a number of factors, including institutions being newly 

designated as MDIs, existing MDIs being acquired by 

other institutions, failing MDIs, and the chartering of 

new MDIs. Compared with the industry overall, and 

especially community banks, MDIs have experienced 

a greater degree of structural volatility, with relatively 

few MDIs operating continuously throughout our 

2001–2013 study period. The composition of the 

MDI segment has also changed over time, with the 

share of Asian American MDIs increasing, and the 

share of African American MDIs declining.

Financial Performance of MDIs

The wide size variation among MDIs, in addition to 

the significant amount of structural change in this 

segment, makes long-term group comparisons of MDI 

performance difficult. Nonetheless, MDIs appear to 

underperform non-MDI institutions in terms of standard industry measures of financial performance such 

as pretax return on assets. MDIs were found to perform 

much like community banks with regard to net interest 

income and noninterest income, but generally experienced higher expenses related to problem loans, as 

well as higher overhead expenses. Smaller MDIs, 

especially, were found to have much higher noninterest expenses compared with larger MDIs and community banks. In addition, smaller MDIs also were found 

to be less efficient than both midsize and larger MDIs, 

as well as non-MDI community and noncommunity 

banks. Several factors may contribute to these differences in performance, including the concentration of 

MDIs in metropolitan areas and the relatively young 

age of MDIs.
FDIC Quarterly 35 2014, Volume 8, No. 3

Minority Depository Institutions

communities, especially the needs of low- and moderate-income neighborhoods or persons, small businesses, 

and small farms.”4

In addition to legislative actions, various administrations have issued executive orders that provided federal 

assistance to institutions that serve minority communities. As a result of two executive orders issued in 1969 

and 1971, the Commerce and Treasury Departments 

established the Minority Bank Deposit Program. Financial institutions that participated in this program were 

recognized as minority banks, and private and public 

sector organizations were encouraged to obtain services 

from these institutions.

After turmoil in the financial services industry in the 

1980s and early 1990s resulted in the failure of 

hundreds of banks and savings institutions, including 

some minority banks, Congress enacted the Financial 

Institution Reform, Recovery, and Enforcement Act 

(FIRREA) of 1989. FIRREA established several important goals with respect to MDIs, including to preserve 

the number of minority depository institutions, 

preserve the minority character in cases of merger or 

acquisition, provide technical assistance to prevent 

insolvency of institutions not now insolvent, promote 

and encourage creation of new minority depository 

institutions, and provide for training, technical assistance, and education programs.

With the enactment of FIRREA, the MDI designation 

also became somewhat more structured. FIRREA 

defines an MDI as “any depository institution where 51 

percent or more of the stock is owned by one or more 

socially and economically disadvantaged individuals.” 

The FDIC further interpreted FIRREA’s definition in 

its 2002 Policy Statement on MDIs not only to include 

federally insured depository institutions where 51 

percent or more of the voting stock is owned by minority individuals, but to also allow insured depository 

institutions to choose MDI status if a majority of the 

Board of Directors is minority individuals and the 

community that the institution serves is predominantly 

minority.5

 As noted in the policy statement, institutions 

that are not already identified as minority depository 

institutions can request to be designated as such by 

certifying that they meet the above definition.

4

 Kenneth Spong, Banking Regulation, Federal Reserve Bank of Kansas 

City, 2000.

5

 FDIC Policy Statement Regarding Minority Depository Institutions, 

2002, http://www.fdic.gov/regulations/resources/minority/sop5-only.pdf.

Although seeking designation as a minority depository 

institution is voluntary, because of the goals established 

in FIRREA, MDIs may benefit from technical assistance, training, and educational programs provided by 

the banking regulatory agencies that are unavailable to 

other insured depository institutions. In addition, under 

the Community Reinvestment Act (CRA), non-MDI 

financial institutions may be encouraged to provide 

support to MDIs to meet the requirements of the act 

with respect to the lending, investment, and service 

tests. As noted in Part 345 of the FDIC’s rule implementing CRA, when assessing the CRA performance of 

a bank, the FDIC considers as a factor capital investment, loan participation, and other ventures undertaken by the bank in cooperation with minority- and 

women-owned financial institutions and low-income 

credit unions. Such activities must help meet the credit 

needs of local communities in which the minority- and 

women-owned financial institutions and low-income 

credit unions are chartered. However, to be considered, 

such activities do not need to also benefit the bank’s 

assessment area(s) or the broader statewide or regional 

area that includes the bank’s assessment area(s).6

CDFIs

Community development financial institutions were 

defined by congressional action under the 1994 Riegle 

Community Development and Regulatory Improvement Act. Whereas MDIs are, by definition, insured 

depository institutions, CDFIs may take on any number 

of different institutional forms as long as their primary 

mission involves supporting economic growth through 

investments that promote the long-term economic and 

social viability of a defined investment area or targeted 

population.7 For example, a certification process 

managed by the U.S. Department of the Treasury’s 

Community Development Financial Institutions Fund 

classifies CDFIs as those specialized financial institutions that work in market niches underserved by traditional financial institutions. CDFIs include both 

regulated institutions such as banks and credit unions, 

and nonregulated institutions such as loan and venture 

capital funds. (For additional information on CDFIs, 

see inset box.)

As a result of these overlapping designations, an insured 

depository institution may become certified as a CDFI 

6

 12 CFR § 345.21(f) [60 FR 22201, May 4, 1995, as amended at 75 

FR 61045, Oct. 4, 2010].

7

 Riegle Community Development and Regulatory Improvement Act of 

1994, Title 1, Section 103.
FDIC Quarterly 36 2014, Volume 8, No. 3

Under Title 1 of the Riegle Community Development 

and Regulatory Improvement Act of 1994, Congress 

established community development financial institutions (CDFIs) and the CDFI Fund. Under the act, a 

CDFI is defined as an entity that has a primary mission 

of promoting community development; serves an investment area or targeted population; provides development 

services in conjunction with equity investments or 

loans, directly or through a subsidiary or affiliate; maintains, through representation on its governing board or 

otherwise, accountability to residents of its investment 

area or targeted population; and is not an agency or 

instrumentality of the United States, or of any state or 

political subdivision of a state.

Section 102 of the act states that Congress finds that:

1. Many of the Nation’s urban, rural, and Native American communities face critical social and economic 

problems arising in part from the lack of economic 

growth, people living in poverty, and the lack of 

employment and other opportunities;

2. The restoration and maintenance of the economies 

of these communities will require coordinated development strategies, intensive supportive services, and 

increased access to equity investments and loans 

for development activities, including investment in 

businesses, housing, commercial real estate, human 

development, and other activities that promote the 

long-term economic and social viability of the 

community; and

3. Community development financial institutions have 

proven their ability to identify and respond to 

community needs for equity investments, loans, and 

development services.

Section 102 also states that the purpose of the act is to 

create a Community Development Financial Institutions Fund to promote economic revitalization and 

community development through investment in and 

assistance to community development financial institutions, including enhancing their liquidity.

CDFI certification is a designation conferred by the 

CDFI Fund and is a requirement for accessing financial 

and technical award assistance through a wide range of 

programs, including:

• CDFI Program: Provides Financial Assistance and 

Technical Assistance awards to certified and emerging CDFIs to sustain and expand their services and to 

build their technical capacity.

• Native Initiatives: Includes the Native American 

CDFI Assistance Program, which provides Financial 

Assistance and Technical Assistance awards to 

CDFIs serving Native American communities to 

sustain and expand their services and to build their 

technical capacity, and training opportunities for 

native CDFIs as part of the CDFI Fund’s Capacity 

Building Initiative.

• New Markets Tax Credit Program: Provides tax 

allocation authority to certified community development entities (CDEs), enabling investors to claim 

tax credits against their federal income taxes. The 

CDEs in turn use the capital raised to make investments in low-income communities.

• Capacity Building Initiative: Provides organizations 

certified as CDFIs or trying to become CDFIs with 

access to free seminars, market research and analysis, 

tools, and one-on-one training to help develop, 

diversify, and grow.

• CDFI Bond Guarantee Program: Guarantees the 

full amount of notes or bonds issued to support 

CDFI  banks that make investments for eligible 

community or economic development purposes. 

These bonds or notes support CDFI bank lending 

and investment by providing a source of long-term, 

patient capital.

In addition, any FDIC-insured depository institution, 

regardless of whether it is certified as a CDFI, may 

participate in the CDFI Fund’s Bank Enterprise Award 

(BEA Award) program if they pursue qualified activities 

in economically distressed communities.

 For more information on certified CDFI banks, including 

eligibility requirements, please visit www.CDFIfund.gov.

Community Development Financial Institutions
FDIC Quarterly 37 2014, Volume 8, No. 3

Minority Depository Institutions

met the definition of a community bank as outlined 

in the 2012 FDIC Community Banking Study (see 

Chart 1.1). The remaining 499 FDIC-insured institutions are referred to as noncommunity banks. By way of 

comparison, some 88 percent of MDIs and 97 percent 

of FDIC-insured CDFIs also met the community bank 

definition at year-end 2013.

A closer examination of these entities reveals that the 

number of MDIs and FDIC-insured CDFIs is quite small 

compared with the universe of FDIC-insured institutions (see Chart 1.2). As of year-end 2013, 174 insured 

without also being designated an MDI. Similarly, not 

all MDIs are also certified as CDFIs, although some are 

certified as both.

MDIs and CDFI Banks in Context

When considered in the context of all FDIC-insured 

institutions, MDIs and FDIC-insured CDFIs have a 

number of similarities to the much larger industry 

segment commonly referred to as community banks. 

Among the 6,812 FDIC-insured institutions that 

reported at year-end 2013, some 6,313, or 93 percent, 

Source: FDIC, U.S. Department of the Treasury.

MDIs = 174

0

114

37

19

39

CDFIs

37

Noncommunity

Banks

499

Community Banks

6,313

2

See break-out in Chart 1.2

Number of Institutions

FDIC-Insured Institutions 6,812

FDIC-Insured MDIs 174

FDIC-Insured MDI-CDFIs 41

FDIC-Insured CDFIs (non-MDI) 37

Non-Bank CDFIs 732

Non-Bank CDFIs

732

MDIs (non-CDFI)

133

MDIs and CDFI Banks in the Wider World of FDIC-Insured Institutions, Year-End 2013

MDI-CDFIs

41

Chart 1.1

How FDIC-Insured MDIs and CDFIs Overlap, Year-End 2013

19 Institutions

$121.6 Billion in Assets

Source: FDIC, U.S. Department of the Treasury.

Note: Community and Noncommunity banks are defined per the FDIC Community Banking Study.

Noncommunity Banks Community Banks

114 Institutions

$50.0 Billion in Assets

2 Institutions

$0.4 Billion in Assets

0 Institutions

39 Institutions

$9.3 Billion in Assets

37 Institutions

$13.9 Billion in Assets

MDIs

174 Institutions

$181 Billion in Assets

1,793 Banking Offices CDFIs

78 Institutions

$24 Billion in Assets

534 Banking Offices

Number of Institutions

FDIC-Insured MDIs 133

FDIC-Insured MDI-CDFIs 41

FDIC-Insured CDFIs (non-MDI) 37

Chart 1.2

http://www.fdic.gov/regulations/resources/cbi/study.html.
FDIC Quarterly 38 2014, Volume 8, No. 3

back to year-end 2001, which results in a study period 

that encompasses 13 years.

During the study period, the number of MDIs increased 

from 164 to 174 and their assets more than doubled, 

from $83 billion to $181 billion. While there are 22 

MDIs with assets greater than $1 billion, most MDIs are 

relatively small. The median MDI held $198 million in 

total assets at year-end 2013, compared with $159 

million in total assets at the median community bank.

In addition to their relatively small size, MDIs also tend 

to be younger institutions than non-MDIs. At year-end 

2013, the median age of an MDI charter was 28 years, 

compared with 90 years for community banks (see 

Chart 1.3). Nearly one in five community bank charters 

were established before 1900, compared with only two 

of the 174 MDI charters that reported in 2013.

Most MDIs are owned or managed by individuals from 

a specific minority group. Thus MDIs may be designated as having a minority status of Asian or Pacific 

Islander American (Asian American), Black or African 

American (African American), Hispanic American, 

Native American or Alaskan Native American (Native 

American), or Multi-Racial American (Multi-Racial). 

Half of all MDIs at year-end 2013 were designated as 

serving Asian American communities (see Chart 1.4). 

Another 22 percent were designated as Hispanic 

American, with 5 Hispanic American MDIs located 

in Puerto Rico; 16 percent served African American 

communities; and 10 percent were serving the Native 

American community. Only two institutions were 

designated as Multi-Racial MDIs.

institutions, with assets totaling $181 billion, were 

designated by the FDIC as MDIs, equaling 2.6 percent 

of the 6,812 insured institutions. The number of insured 

institutions certified as CDFIs is even smaller, totaling 

just 78, or 1.1 percent of all insured institutions, at yearend 2013. Of these 78 CDFI banks, 41 were also designated as MDIs. While the number of insured 

institutions that are certified as CDFIs is relatively 

small, there were more than 700 CDFIs that were not 

insured institutions.

Geography and Demographics of MDIs

For reasons of data availability, the remainder of this 

study focuses primarily on the 174 FDIC-insured institutions designated as MDIs. By limiting the study in 

this fashion, we are able to identify MDI charters going 

Most MDIs Are Organized to Serve the Financial Needs of a Specic Minority Group

MDI Charters and Assets by Minority Status, 2013

28

34

5

87

18

2 African American

Hispanic American -

Not Puerto Rican

Hispanic American -

Puerto Rican

Asian American

Native American

Multi-Racial

Source: FDIC.

$6,734

$34,310

$59,456

$78,410

$2,099 $271

Charters Assets ($ millions)

Chart 1.4

MDIs Tend to Be Younger Than Other Institutions 

Age of Charter in Years, Year-End 2013

Source: FDIC.

0

20

40

60

80

100

120

MDIs Community Banks Noncommunity Banks

75th Percentile

Median

25th Percentile

Non-MDIs

Chart 1.3
FDIC Quarterly 39 2014, Volume 8, No. 3

Minority Depository Institutions

The asset portfolio of MDIs also resembles the community bank portfolio (see Table 1.2). Nearly half of MDI 

assets consist of loans secured by residential and 

commercial real estate, compared with 47 percent for 

community banks and 23 percent for noncommunity 

banks. Like community banks, MDIs also hold a disproportionate percentage of small loans to businesses and 

farms.9 MDIs held almost $15 billion in loans to small 

business in 2013, equaling 2.2 percent of the industry 

total, despite holding only a 1.2 percent share of industry assets.

Lending Specialty Group

MDI institutions not only have a higher share of total 

loans secured by real estate, but also exhibit higher 

concentrations in loans secured by commercial real 

estate (CRE) lending than community or noncommunity banks. This is especially apparent when identifying 

CRE specialists according to the lending specialty definitions used in the FDIC Community Banking Study. At 

year-end 2013, 58 percent of MDIs met the definition 

of a commercial real estate specialist, compared with 

22 percent of community banks (see Chart 1.5).10 By 

9

 Small commercial and industrial loans and small loans secured by 

nonfarm, nonresidential properties consist of loans with an original 

loan amount of less than $1 million, whereas small farmland loans and 

agricultural production loans have original loan amounts of less than 

$500,000.

10 Using the definitions in the FDIC Community Banking Study, CRE 

specialists are defined as institutions holding construction and development (C&D) loans greater than 10 percent of assets or total CRE 

loans (C&D, multifamily, and secured by other commercial properties) 

greater than 30 percent of total assets, while not meeting any other 

single-specialist definition.

The largest share of MDI assets are held by Hispanic 

American MDIs, which held 52 percent of MDI assets 

at year-end 2013. Among these institutions, five 

Hispanic American MDIs headquartered in Puerto 

Rico held $59.5 billion in assets—nearly a third of all 

MDI assets. An additional 43 percent of MDI assets 

were held by Asian American MDIs. And while 

African American MDIs make up 16 percent of MDI 

charters, they held less than 4 percent of MDI assets at 

year-end 2013.

Balance Sheet Characteristics

As most MDI-designated institutions also meet the 

definition of a community bank as described in the 

FDIC Community Banking Study, their balance sheet 

characteristics generally resemble those of other 

community banks. Like community banks, MDIs have 

a liability structure primarily built on core deposits.8

MDIs fund 71 percent of their portfolios through core 

deposits, a ratio that is slightly lower than the community bank core deposit ratio of 80 percent, but higher 

than the noncommunity bank ratio of 58 percent (see 

Table 1.1).

8

 Core deposits are defined as domestic deposits less brokered 

deposits. Historically, core deposits have been defined for analytical 

and examination purposes as the sum of demand deposits, all NOW 

and automatic transfer service accounts, money market deposit 

accounts, other savings deposits, and time deposits under $100,000. 

On March 31, 2011, this definition was revised to reflect the permanent increase in FDIC deposit insurance coverage from $100,000 to 

$250,000 and to exclude insured brokered deposits from core deposits. The definition used in the study provides consistency over time, 

since core deposits as defined before March 31, 2011, included some 

brokered deposits.

The MDI Liability Structure Is Mostly Built Around Core Deposits

December 31, 2013 MDIs Non-MDIs

Liability

Community Banks Noncommunity Banks

Dollars in 

Billions

Percent of 

Assets

Dollars in 

Billions

Percent of 

Assets

Dollars in 

Billions

Percent of 

Assets

Core Deposits $130 71% $1,583 80% $7,319 58%

Other Deposits $13 7% $52 3% $2,095 17%

Short-Term Borrowingsa $6 3% $38 2% $683 5%

Long-Term Borrowingsb $3 2% $48 2% $279 2%

Other Liabilities $8 4% $44 2% $768 6%

Equity Capital $22 12% $212 11% $1,410 11%

Total Liabilities and Equity Capital $181 100% $1,977 100% $12,553 100%

Source: FDIC. Amounts and percentages may not total due to rounding.

a

 Includes borrowings with a remaining maturity or time to next repricing of one year or less.

b

 Includes borrowings with a remaining maturity or time to next repricing of more than one year.

Table 1.1
FDIC QUARTERLY 40 2014, VOLUME 8, NO. 3

in CRE lending. The bulk of this shift came from MDIs 

that previously had a more diversified portfolio and met 

none of the lending specialty criteria. In 2002, 31 

percent of MDIs had no lending specialty. By 2013, this 

number had fallen to 21 percent.

Among minority status groups, Asian American MDIs 

had the highest concentration of CRE specialists in 2013 

at 74 percent. However, more than half of all African 

American MDIs were also CRE specialists in 2013.

Although a relatively large share of MDIs have a CRE 

specialization, it is worth noting that not all CRE loans 

bear the same risk. The risk profile of CRE loans may 

vary widely based on the property and occupancy type 

of the collateral. For example, CRE loans may consist 

of loans that finance construction and development 

pro jects, are secured by multifamily properties, or are 

secured by so-called nonfarm nonresidential properties. 

Chart 1.6 shows that of the total CRE loans held by 

MDIs in 2013, more than three-fourths were loans 

secured by nonfarm, nonresidential properties. And 

nearly 30 percent of all CRE loans were secured by 

owner-occupied commercial properties. In many cases, 

these loans closely resemble C&I loans, where real 

estate collateral has been attached in an abundance of 

contrast, fewer than 10 percent of MDIs were categorized as mortgage, commercial and industrial (C&I), or 

multi-specialty, while 21 percent of MDIs were categorized as diversified nonspecialists.

Over the past decade, MDIs have migrated to the CRE 

specialty group from other lending groups. A number of 

MDIs changed their lending strategy during this period 

from a focus on mortgage or C&I lending to specialize 

MDI Asset Portfolios Resemble Those of Community Banks

December 31, 2013 MDIs Non-MDIs

Loan or Asset Category

Community Banks Noncommunity Banks

Dollars in 

Billions

Percent of 

Assets

Dollars in 

Billions

Percent of 

Assets

Dollars in 

Billions

Percent of 

Assets

Mortgage Loansa $31 17% $392 20% $1,916 15%

Consumer Loans $9 5% $53 3% $1,291 10%

Commercial Real Estate (CRE) Loansb $59 32% $526 27% $998 8%

Construction and Development 

(C&D) Loans $5 3% $76 4% $129 1%

Commercial and Industrial (C&I) Loans $20 11% $177 9% $1,402 11%

Agricultural Loansc $1 0% $98 5% $50 0%

Other Loans and Leases $6 3% $10 0% $753 6%

Less: Loan Loss Provisions and 

Unearned Income $1 1% $3 0% $30 0%

Net Loans and Leases $124 68% $1,253 63% $6,381 51%

Securities $28 16% $455 23% $2,518 20%

Other Assets $29 16% $268 14% $3,666 29%

Total Assets $181 100% $1,977 100% $12,565 100%

Source: FDIC. Amounts and percentages may not total due to rounding.

a

 Mortgage loans include home equity lines of credit, junior liens, and other loans secured by residential real estate.

b

 CRE loans include construction and development (C&D) loans, loans secured by multifamily properties, and loans secured by nonfarm nonresidential real estate.

c

 Agricultural loans include production loans and loans secured by farm real estate.

Table 1.2

Minority Depository Institutions

Are Mostly Comprised of CRE Specialists

Source: FDIC. Loan categories with fewer than 5 percent of institutions are not labeled.

Percent of Institutions by Specialty Lending Group, Year-End 2013

32%

21%

16%

5%

22%

58%

16% 6%

Non-MDI Community Bank MDIs

Mortgage

Consumer

CRE

C&I

Agriculture

Multi-Specialty

No Specialty

Single Specialists 

Diversified

12%

9%

Chart 1.5
FDIC Quarterly 41 2014, Volume 8, No. 3

Minority Depository Institutions

as well as a certification process for community development financial institutions. Institutions that meet 

these definitions may benefit from programs created to 

support their provision of financial services to underserved consumers and communities.

Compared with the more than 6,800 insured financial 

institutions, the number of minority depository institutions and insured institutions that are certified as 

community development financial institutions is quite 

small. MDIs serve a number of minority groups, with 

half of MDIs bearing an Asian American minority 

status, followed by a large share of MDIs with a 

Hispanic American minority status. Finally, the balance 

sheet characteristics of MDIs generally resemble those 

of community banks. The following section considers 

the geography of MDIs and CDFI banks. 

Section 2. The Geography of MDIs and 

FDIC-Insured CDFIs

As the report will demonstrate when discussing social 

performance of minority depository institutions, MDIs 

are naturally linked to geographic areas that reflect the 

communities they seek to serve. The 174 MDI headquarters locations are mostly found in a relatively small 

number of metropolitan areas. However, these same 

institutions maintain nearly 1,800 offices that are somewhat more widely distributed. This section describes the 

geographic characteristics of MDI headquarters and 

office locations, examines their market share, and 

briefly describes the geographic characteristics of FDICinsured CDFI institutions.

Map 2.1 highlights a number of regional concentrations 

of MDI headquarters locations according to their 

caution. As documented in the FDIC Community Banking Study, this type of lending has increased throughout 

the industry over the past several decades.11 In addition, 

in terms of credit losses, these owner-occupied CRE 

loans performed somewhat better, on average, than 

unsecured C&I loans in the recent crisis.

The FDIC Community Banking Study also indicated that 

construction and development loans have generally 

performed worse than other CRE loan types during real 

estate downturns, and concentrations in construction 

and development (C&D) lending were associated with 

higher rates of failure during these periods of adversity. 

Although MDIs held $4.6 billion in C&D loans as of 

year-end 2013, few MDIs have concentrations in this 

type of lending. Only four of the MDIs that met the 

CRE lending specialist criteria in 2013 had a 10 percent 

concentration in C&D loans, comprising 4 percent of 

all MDIs that met the CRE criteria (see Chart 1.7). 

This is a much smaller percentage than the 16 percent 

of community bank CRE lenders that had a C&D 

concentration at year-end 2013.

Section Summary

Over time, a series of legislative, regulatory, and executive actions have been taken to further the goal of 

ensuring access to financial services by underserved 

populations and to encourage investment in and 

support of low- and moderate-income households and 

communities. Congress has enacted laws to provide a 

designation process for minority depository institutions 

11 For an extended discussion of the comparative risks of various types 

of CRE lending, see Chapter 5 of the FDIC Community Banking Study, 

2012, http://www.fdic.gov/regulations/resources/cbi/report/CBSI-5.pdf.

CRE Loans Held by MDIs Are Mostly Secured

by Nonfarm, Nonresidential Properties

$29.8

$17.2

$6.9

$4.6

Secured by Nonfarm Nonresidential

(Non-Owner Occupied)

Secured by Nonfarm Nonresidential

(Owner Occupied)

Secured by Multifamily Properties

Construction and Development

Total MDI CRE Loans: $58.6 Billion

Commercial Real Estate Loans Held by All MDIs

Year-End 2013, Dollars in Billions

Source: FDIC.

Chart 1.6

While 58 Percent of MDIs Qualify as CRE Specialists,

Only a Few Hold C&D Loans Greater Than

10 Percent of Total Assets 

MDI Commercial Real Estate Specialists, Year-End 2013,

According to Which CRE Criteria They Meet

Source: FDIC.

1

97

3

C&D Loans > 10% of Assets, or

Total CRE Loans > 30% of Assets,

or

Both

By Denition, CRE Specialists Hold

Either:

Chart 1.7
FDIC Quarterly 42 2014, Volume 8, No. 3

offices with 393, or more than one-fifth of all U.S. 

MDI offices. Texas has the second-largest number of 

MDI charters with 22 MDI institutions operating 306 

banking offices. Puerto Rico only has five MDIs, but it 

is also home to a total of 389 MDI banking offices, 

representing 22 percent of all U.S. MDI offices at yearend 2013.

Map 2.1 also shows that MDI headquarters tend to be 

concentrated in metropolitan areas. In all, some 87 

percent of MDI headquarters offices are located in one of 

the nation’s 388 metropolitan areas.12 In fact, 60 percent 

12 The Office of Management and Budget delineates metropolitan, 

micropolitan, and combined statistical areas. A revised delineation was 

issued on February 28, 2013, http://www.whitehouse.gov/sites/default/

files/omb/bulletins/2013/b13-01.pdf. Metropolitan Statistical Areas have 

at least one urbanized area of 50,000 or more population, plus adjacent 

territory that has a high degree of social and economic integration with 

the core as measured by commuting ties. Micropolitan Statistical Areas 

have at least one urban cluster of at least 10,000 but less than 50,000 

population, plus adjacent territory that has a high degree of social and 

economic integration with the core as measured by commuting ties.

minority status. By way of explanation, the headquarters of MDIs in large metropolitan areas are depicted as 

pie charts, with the size of the pie increasing with the 

number of MDIs headquartered in each city and the 

slices of the pie indicating the breakdown of those institutions by minority status. In the case of metropolitan 

and nonmetropolitan areas with few MDIs, each headquarters location is shown as a smaller circle. This 

depiction of MDI headquarters shows a cluster of 

Hispanic American MDIs in Texas, Florida, and Puerto 

Rico. African American MDIs tend to be concentrated 

in the eastern half of the United States, while Native 

American MDIs are concentrated in Oklahoma and the 

northern plains.

Overall, more than half of all MDIs reporting at yearend 2013 were headquartered in the four most populous 

U.S. states: California, Texas, New York, and Florida. 

California has by far the largest number of MDIs, with 

the 46 MDIs headquartered there representing more 

than one-quarter of all MDI charters (see Table 2.1). 

California is also home to the largest number of MDI 

Source: FDIC Summary of Deposits as of June 30, 2013.

MDIs Tend to Congregate in Metropolitan Areas

Locations of MDI Headquarters by Minority Status

Minority Status (# of Institutions)

 Asian American (87)

 Hispanic American (39)

 African American (28)

 Native American (18)

 Multi-Racial (2)

6 Institutions

6 Institutions

9 Institutions

11 Institutions

16 Institutions

10 Institutions

38 Institutions

Map 2.1
FDIC Quarterly 43 2014, Volume 8, No. 3

Minority Depository Institutions

Miami, and 10 are headquartered in Chicago. The 

remaining 13 percent of MDI headquarters offices, 

shown as medium-sized dots on the map, are located in 

17 nonmetropolitan areas. Nearly half (48 percent) of 

these nonmetro institutions are Native American MDIs.

of all MDI headquarters are located in just 9 cities, and 

another 46 MDIs are headquartered in 31 other metropolitan areas (see Table 2.2). Among the largest cities, 

38 MDIs are headquartered in greater Los Angeles, 16 

are headquartered in New York, 11 are headquartered in 

Top Ten MDI Headquarters Locations by State

State Number of Charters Percent of Charters Number of Offices Percent of Offices

California 46 26% 393 22%

Texas 22 13% 306 17%

New York 13 7% 117 7%

Florida 12 7% 115 6%

Oklahoma 11 6% 86 5%

Georgia 10 6% 41 2%

Illinois 10 6% 70 4%

Puerto Rico 5 3% 389 22%

Hawaii 4 2% 32 2%

*New Jersey 3 2% 30 2%

*Guam 3 2% 20 1%

*Alabama 3 2% 10 1%

*Pennsylvania 3 2% 7 0%

*Wisconsin 3 2% 5 0%

Other States 26 15% 172 10%

Total 174 100% 1,793 100%

Source: FDIC.

Note: Headquarters are as of December 31, 2013. Offices are as of June 30, 2013, as reported in the 2013 Summary of Deposits.

Offices include those physically located in each state, as opposed to the number of MDI offices operated by the MDIs headquartered in each state.

*Shaded states tied for the tenth-largest number of charters located in the state.

Table 2.1

Top Ten MDI Headquarters Locations by Metro Area

Metro Area Number of Charters Percent of Charters Number of Offices Percent of Offices

Los Angeles-Long Beach-Anaheim, CA 38 22% 280 16%

New York-Newark-Jersey City, NY-NJ-PA 16 9% 147 8%

Miami-Fort Lauderdale-West Palm Beach, FL 11 6% 103 6%

Chicago-Naperville-Elgin, IL-IN-WI 10 6% 70 4%

Atlanta-Sandy Springs-Roswell, GA 9 5% 35 2%

Houston-The Woodlands-Sugar Land, TX 6 3% 62 3%

San Francisco-Oakland-Hayward, CA 6 3% 56 3%

San Juan-Carolina-Caguas, PR 5 3% 268 15%

Urban Honolulu, HI 4 2% 24 1%

*McAllen-Edinburg-Mission, TX 3 2% 51 3%

*Dallas-Fort Worth-Arlington, TX 3 2% 30 2%

*Oklahoma City, OK 3 2% 30 2%

*Laredo, TX 3 2% 25 1%

*Philadelphia-Camden-Wilmington, 

PA-NJ-DE-MD 3 2% 7 0%

Other Metros (26) 31 18% 430 24%

Nonmetro Areas (17) 23 13% 175 10%

Total 174 100% 1,793 100%

Source: FDIC.

Note: Headquarters are as of December 31, 2013. Offices are as of June 30, 2013, as reported in the 2013 Summary of Deposits.

*Shaded cities tied for the tenth-largest number of charters located in a metropolitan area.

Table 2.2
FDIC Quarterly 44 2014, Volume 8, No. 3

operated by these institutions. With the exception of 

Hispanic American MDIs, most MDIs have relatively 

few offices. On average, MDIs serving Asian American, 

African American, Native American, and multi-racial 

communities operated fewer than eight offices each 

(see Chart 2.2). In stark contrast, MDIs that focus on 

the Hispanic American community tend to operate 

somewhat larger branch networks. Hispanic American 

MDIs operated 896 offices in Florida, Oklahoma, 

Puerto Rico, and Texas, for an average of 24 offices 

per institution. However, this average is heavily influenced by the 389 MDI banking offices in Puerto Rico. 

Even when excluding the Puerto Rico MDI offices, 

Hispanic American MDIs still operate an average of 15 

offices per institution, more than twice as many as any 

other group.

Market Share

Because so many of their headquarters and branch 

offices are located in metropolitan areas, MDIs tend to 

hold a relatively low share of their local banking 

MDI branch offices are similarly distributed across metro 

and nonmetro areas, with similar geographic concentrations based on minority status (see Map 2.2). Among 

the 1,793 offices maintained by MDIs as of June 30, 

2013, 58 percent were located among the top 9 metro 

areas shown in Table 2.2, an additional 24 percent were 

located in 26 other metro areas, and 175 branch offices, 

or 10 percent, were located in 17 nonmetro areas.

The fact that MDI headquarters and office locations are 

distributed in a similar fashion across the country is 

attributable in part to the relatively small geographic 

footprint of most MDIs. Similar to community banks, 

MDIs establish branch offices in areas they are familiar 

with near their headquarters location. Three-fourths of 

MDIs have offices located in three or fewer counties, 

compared with 83 percent of community bank offices 

(see Chart 2.1).

The close proximity of MDI branch offices may also 

be related to the relatively small number of offices 

Source: FDIC Summary of Deposits as of June 30, 2013.

MDI Ofces Tend to Cluster Geographically According to Minority Status

MDI Office Locations by Minority Status

Minority Status (# of Ofce Locations)

 African American (152)

 Hispanic American (916)

 Asian American (657)

 Native American (63)

 Multi-Racial (5)

Map 2.2
FDIC Quarterly 45 2014, Volume 8, No. 3

Minority Depository Institutions

than 250,000 where MDIs held a deposit-market share 

of at least 25 percent (see Table 2.3).14 MDIs hold a 

sizable market share even in some of the largest U.S. 

metropolitan counties. For instance, they hold more 

than 10 percent of metro-area deposits in Los Angeles 

County and nearly 9 percent of metro-area deposits in 

Miami-Dade County, with combined populations of 

more than 12 million and MDI deposits of more than 

$39 billion.

With so many MDIs located in metropolitan areas, 

micropolitan and rural counties are home to relatively 

14 These market shares exclude counties in U.S. territories, such as 

Puerto Rico, where MDIs control more than 90 percent of local deposits in 56 counties.

market deposits. One way to measure market share is by 

use of the reported deposits held by individual banking 

offices as found in the FDIC Summary of Deposits 

(SOD).13 MDIs held just 1.5 percent of the metro office 

deposits of all FDIC-insured institutions in 2013. 

However, there were four U.S. metropolitan counties 

that were part of metro areas with populations greater 

13 Data on total banking offices are collected through the Summary of 

Deposits (SOD), which provides a detailed record of each individual 

banking office, its location, and total deposits, starting in 1987. The 

SOD covers all FDIC-insured institutions including insured U.S. 

branches of foreign banks. Banking offices are defined to include all 

offices and facilities that actually hold deposits, and do not include 

loan production offices, computer centers, and other nondeposit 

installations, such as automated teller machines (ATMs).

MDIs Generally Have a Small Geographic Footprint,

Similar to Community Banks

Percent of Institutions According to Number of

Counties With Offices

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

MDIs Community Banks

(Excluding MDIs)

 Noncommunity Banks

(Excluding MDIs)

All Offices in One County

All Offices in Two or 

Three Counties

Source: FDIC Summary of Deposits as of June 30, 2013.

75%

32%

43%

36%

13%

47%

33%

83%

46%

Chart 2.1

Hispanic MDIs Tend to Have the Largest

Branch Networks

Average Number of Offices by MDI Minority Status

23.5

0

5

10

15

20

25

Asian

American

African

American

Hispanic

American

Multi-Racial Native

American

Including Puerto Rico

Excluding Puerto Rico

Source: FDIC Summary of Deposits as of June 30, 2013.

7.6 5.4

14.6

2.5 3.5

Chart 2.2

Top Ten Large Metro Counties by MDI Deposit Market Share

County Metro State

MDI Deposits 

($000)

MDI Market Share 

(Percent)

Logan Oklahoma City OK $157,368 48.3%

Webb Laredo TX 2,564,258 46.3%

Hidalgo McAllen TX 2,590,891 26.7%

Cameron Brownsville TX 1,024,956 24.9%

Valencia Albuquerque NM 99,696 18.6%

Los Angeles Los Angeles CA 30,890,448 10.2%

Miami-Dade Miami FL 8,328,806 8.8%

Canadian Oklahoma City OK 118,444 7.5%

Hoke Fayetteville NC 7,771 7.0%

DeKalb Atlanta GA 555,792 6.8%

Total Metro 131,792,042 1.5%

Source: FDIC calculations based on data from the Summary of Deposits and the 2010 Census. 

Note: Includes counties of the 50 states and DC with more than 40,000 people in metropolitan areas with total population greater than 250,000. Total Metro includes all counties in metropolitan 

areas.

Table 2.3
FDIC Quarterly 46 2014, Volume 8, No. 3

FDIC-Insured CDFI Locations Differ From 

Non-CDFI MDI Markets

In 2013, there were 37 FDIC-insured institutions certified as CDFIs that were not also designated as minority 

depository institutions. These non-MDI CDFI banks 

have a geographic footprint that differs from most 

MDIs. Whereas most MDIs are highly concentrated in 

the four most populous states, the 37 FDIC-insured 

CDFIs that are not MDIs are concentrated in Mississippi, Illinois, and California (see Table 2.5). Together, 

few MDIs, and they hold less than 1 percent of local 

deposits in these markets. However, there are selected 

nonmetro areas in which MDIs hold a much larger 

deposit market share. Excluding U.S. territories, MDIs 

held more than a 9 percent deposit market share in 27 

micropolitan and rural counties in 2013. Many of these 

counties, such as those in Oklahoma, New Mexico, and 

Montana, are served by Native American institutions. 

The top ten nonmetro counties by MDI deposit market 

share are shown in Table 2.4.

Top Ten Nonmetro Counties by MDI Deposit Market Share

County Area State

MDI Deposits 

($000)

MDI Market Share 

(Percent)

Zapata Micropolitan TX $292,612 100.0%

Starr Micropolitan TX 344,353 72.7%

Maverick Micropolitan TX 450,900 71.7%

Adair Rural OK 114,730 65.0%

Taos Micropolitan NM 162,091 38.7%

Calhoun Micropolitan TX 147,508 33.5%

Macon Rural AL 25,788 27.8%

Jim Hogg Rural TX 41,269 25.9%

Cherokee Micropolitan OK 98,500 25.8%

Robeson Micropolitan NC 253,394 25.2%

Total Nonmetro 6,740,152 0.9%

Source: FDIC calculations based on data from the Summary of Deposits and the 2010 Census.

Note: The list of top ten nonmetro counties excludes counties in U.S. territories. The total MDI market share for nonmetro counties includes counties in U.S. territories.

Table 2.4

Top Ten Headquarters Locations by State

MDI Excluding CDFI MDIs MDIs That Are Also CDFIs Insured CDFIs That Are Not MDIs

State

Number of 

Charters

Percent of 

Charters State

Number of 

Charters

Percent of 

Charters State

Number of 

Charters

Percent of 

Charters

CA 39 29 CA 7 17 MS 12 32

TX 22 17 IL 7 17 CA 4 11

FL 12 9 OK 3 7 IL 4 11

NY 11 8 GA 3 7 GA 2 5

OK 8 6 NY 2 5 AL 2 5

GA 7 5 AL 2 5 OK 1 3

PR 5 4 PA 2 5 NY 1 3

HI 4 3 TN 2 5 WI 1 3

GU 3 2 NJ 1 2 DC 1 3

IL 3 2 WI 1 2 KY 1 3

15 Other 

States 19 14

11 Other 

States 11 27

8 Other 

States 8 22

Total 133 100 Total 41 100 Total 37 100

Source: FDIC.

Note: Charters are as of December 31, 2013.

Table 2.5
FDIC Quarterly 47 2014, Volume 8, No. 3

Minority Depository Institutions

Non-MDI CDFI banks also differ from MDIs in terms of 

the share located in nonmetropolitan areas. While 

almost 90 percent of MDIs are headquartered in metro 

areas, only about half (51.4 percent) of non-MDI 

FDIC-insured CDFIs are headquartered in metro areas 

(see Table 2.7).

Section Summary

Minority depository institutions are naturally linked to 

geographic areas that reflect the communities they seek 

to serve. As a result, most MDIs are headquartered in a 

handful of the most populous states. In addition, a large 

majority of the headquarters and branch offices of these 

institutions are located in large metropolitan areas. Due 

these states represent more than half (54 percent) of all 

non-MDI FDIC-insured CDFI charters.

Not only are non-MDI FDIC-insured CDFIs concentrated in a few states, but more than half of their banking offices are located in Mississippi. This is in part due 

to the larger size and branching network of Mississippi 

banks that are certified as CDFIs, as well as the higher 

percentage of low-income households in Mississippi. 

(Among all states, Mississippi has the highest percentage population living below the poverty level.) The 12 

FDIC-insured CDFIs headquartered in Mississippi have 

on average 15 offices each (see Table 2.6).

Top Ten Office Locations by State

MDI Excluding CDFI MDIs MDIs That Are Also CDFIs Insured CDFIs That Are Not MDIs

State

Number of 

Offices

Percent of 

Offices State

Number of 

Offices

Percent of 

Offices State

Number of 

Offices

Percent of 

Offices

PR 389 24 IL 41 20 MS 185 56

CA 364 23 CA 29 14 AL 27 8

TX 306 19 NY 25 12 AR 23 7

FL 114 7 GA 18 9 IL 12 4

NY 92 6 LA 12 6 LA 12 4

OK 81 5 MD 9 4 SC 12 4

HI 32 2 AL 8 4 GA 10 3

IL 29 2 NC 8 4 CA 9 3

NJ 24 2 DC 6 3 MN 8 2

GA 23 1 NJ 6 3 OR 6 2

25 Other 

States 136 9

16 Other 

States 41 20

11 Other 

States 27 8

Total 1,590 100 Total 203 100 Total 331 100

Average 

Number of 

Offices Per 

Charter:

12.0

Average Number of 

Offices Per Charter: 5.0 Average Number of Offices Per Charter: 8.9 Excl. PR 9.4

Source: FDIC.

Note: Charters are as of December 31, 2013.

Table 2.6

Location of Charter by Metro and Nonmetro Area

MDI Excluding CDFI MDIs MDIs That Are Also CDFIs Insured CDFIs That Are Not MDIs

Area

Number of 

Charters

Percent of 

Charters

Number of 

Charters

Percent of 

Charters

Number of 

Charters

Percent of 

Charters

Metro 115 86.5 36 87.8 19 51.4

Nonmetro 18 13.5 5 12.2 18 48.6

Total 133 100 41 100 37 100

Source: FDIC.

Note: Charters are as of December 31, 2013.

Table 2.7
FDIC Quarterly 48 2014, Volume 8, No. 3

than community banks as a whole during this period, 

but the sources of this change have been somewhat 

unique to the MDI sector. This section further details 

the nature of structural change in the MDI sector 

between 2001 and 2013.

Number of Charters

During the study period, MDIs increased in absolute 

number, from 164 charters in 2001 to 174 in 2013. As 

previously noted, MDI assets have more than doubled 

over this period, from $83 billion to $181 billion. 

However, as reflected in Chart 3.1, the size of the MDI 

sector peaked near the beginning of the recent financial 

crisis, and has trended downward since that time in 

both absolute and relative terms.

The decline in the size of the MDI sector is related to 

a number of factors, the most important of which has 

been bank failures. Over the entire study period, MDIs 

were about three times as likely to fail as all other 

banks. Between year-end 2001 and 2013, 33 MDIs 

failed (see Chart 3.2, lower right). The number of 

MDI charters has also declined as a result of voluntary 

mergers. During the study period, 29 MDIs were 

acquired by non-MDI financial institutions, and an 

additional 28 MDIs were acquired by other MDIs 

(lower left). There has also been a sharp slowdown in 

the chartering of new MDIs, with only 6 being created 

since 2007, whereas 33 new MDIs were chartered 

between 2005 and 2007 (upper left).

Over the past 13 years, a large number of preexisting 

institutions were designated as MDIs, while fewer institutions lost MDI status (Chart 3.2, upper right). This 

to the concentration of MDI headquarters and branch 

offices in large metro areas, MDIs generally hold a relatively small share of their local market. Nonetheless, 

there are a few large counties, including Los Angeles 

and Miami-Dade, where MDIs hold a rather significant 

share of total bank deposits. Minority depository institutions also hold a sizable share of deposits in some 

micropolitan and rural counties, although their overall 

presence in nonmetro areas is small. The concentration 

of MDI offices in a limited number of metropolitan 

areas is to some extent attributable to the relatively 

small geographic footprint of MDIs, with most MDI 

offices being located in an area of three counties or less. 

With the exception of Hispanic American MDIs, most 

MDIs operate a relatively small number of banking 

offices.

Unlike MDIs, insured institutions that are certified as 

CDFIs, but are not also MDIs, tend to be concentrated 

in Mississippi, Illinois, and California, with more than 

half of their banking offices located in Mississippi. 

Finally, unlike MDIs, only about half of these FDICinsured CDFIs are located in metropolitan areas.

Section 3. Structural Change Among Minority 

Depository Institutions

The financial services industry has experienced significant change over the past three decades as a result of 

failures, mergers between banking organizations, the 

consolidation of charters within existing organizations, 

and newly chartered institutions. During the 13-year 

study period covered by the report, the MDI sector has 

also experienced a great deal of structural change. Not 

only has it experienced even greater structural change 

After Pre-Crisis Growth, the MDI Share of the Banking Industry Has Declined

174

0

50

100

150

200

250

2001 2004 2007 2010 2013

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Charters Percent of Industry

2.6%

MDI Charters

$181

0

50

100

150

200

250

2001 2004 2007 2010 2013

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

Dollars in Billions Percent of Industry

MDI Assets

1.2% 1,793

0

500

1000

1500

2000

2500

2001 2004 2007 2010 2013

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Offices Percent of Industry

MDI Banking Ofces

1.9%

Source: FDIC.

Charters

Percent of Industry

Dollars in Billions

Percent of Industry

Offices

Percent of Industry

Chart 3.1
FDIC Quarterly 49 2014, Volume 8, No. 3

Minority Depository Institutions

was the most important source of growth for the MDI 

sector over much of the study period.

Chart 3.3 depicts the net effect of new charters, mergers, failures, and redesignations over the study period. 

A total of 81 institutions were redesignated as MDIs 

during the study period, compared with 20 institutions 

that lost MDI status, making redesignation the most 

important factor behind the net increase in the number 

of MDIs over the study period.

Impact of Structural Change on the Assets 

Controlled by MDIs

As minority depository institutions have failed or 

merged, concerns have been expressed that these institutions are being acquired by entities that may not be 

focused on addressing the financial needs of minority 

Sources of Structural Change Among FDIC-Insured Minority Depository Institutions (MDIs), 2001–2013

44 New MDIs Were Chartered 81 Existing Institutions Gained MDI Status

Annual Number of New MDI Charters 20 MDI Institutions Lost MDI Status

Annual Number of Institutions Redesignated

57 MDIs Were Acquired in Voluntary Mergers 33 MDIs Failed

Annual Number of MDI Mergers Annual Number of MDI Failures

Source: FDIC.

1

2 2

7

12

14

4

2

0000 0

2

4

6

8

10

12

14

16

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

-2 -1 -2 -1

-3 -2 -2 -3 -2 -2

5 7 9

17

5 6 8

3

8 6

1

6

-5

0

5

10

15

20

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

To MDI

From MDI

3

5

3 2 1 2 2

4

1

5

4

4

8

1

2 5

3

1

1

0

2

4

6

8

10

12

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Acquired by Non-MDIs

Acquired by MDIs 28

29

1 2

4 3 2 1 1

1

5

7

3

1

1

1

0

2

4

6

8

10

12

14

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Depositor Payoff 2

Acquired by Non-MDI 18

Acquired by MDI 13

Chart 3.2

The Increase in the Number of Minority Depository

Institution Charters Since 2001 Has Been Driven

Mostly by Redesignations

Number of MDI Charters

164

+44

Failures

-33

Mergers

-57

Other

-5

To MDI

+81

From MDI

-20

174

Source: FDIC.

+ New

Charters

- Closings

+/-

Redesignations

MDIs

in 2001

MDIs

in 2013

Changes Between 2001 and 2013

-150

-100

-50

0

50

100

150

200

Chart 3.3
FDIC Quarterly 50 2014, Volume 8, No. 3

communities. Indeed, one of the stated goals of 

Section 308 of the Financial Institutions Reform, 

Recovery, and Enforcement Act is to “preserve the 

minority character in cases of merger or acquisition.” 

But despite acquisition of 88 MDIs during the study 

period, most of the assets of these institutions have 

been acquired by other MDIs (see Chart 3.4). Of the 

57 MDIs acquired through voluntary mergers during 

the study period, slightly less than half (28 institutions) were acquired by other MDIs. In addition, of the 

33 MDIs that failed during the study period, 13 (39 

percent) were acquired by other MDIs. Although these 

percentages might appear low at first glance, it is 

important to point out that a much larger share of the 

total assets of closed MDIs remained under the control 

of other MDIs after acquisition. In all, nearly twothirds of the assets of the merged institutions and 87 

percent of the assets of the failed institutions wound 

up staying with MDI acquirers.

While every segment of the banking industry has 

undergone structural change in recent years, the MDI 

population has been relatively volatile compared with 

other types of institutions. For example, MDIs were 

about half as likely as community banks as a whole to 

operate continuously (that is, in the absence of structural change or group redesignation) throughout the 

study period (see Chart 3.5). Only 30 percent of MDIs 

operated continuously throughout the study period, 

compared with 57 percent of community banks. This 

volatility in the MDI population tends to complicate 

time series analysis, as changes in the population 

sometimes matter as much or more than changes 

in performance.

Changes in Minority Status Designation

As the MDI sector has changed over time, so has its 

composition in terms of minority status. The most 

prominent change to this composition has been the 

increase in the share of MDIs that have an Asian 

American minority status. Since 2001, the number of 

MDIs with this minority status increased by about a 

third. By 2013, Asian American institutions represented half of all MDIs (see Chart 3.6). The number of 

Hispanic American MDIs grew from 23 institutions in 

2001 to 34 in 2013, representing 19.5 percent of MDI 

charters. Meanwhile, the number of African American 

MDIs declined by more than one-third during this 

period and they represented fewer than one-fifth of all 

MDIs at year-end 2013, compared with nearly a third 

of all MDIs in 2001.

Most of the Assets of Merged and Failed MDIs

Have Been Acquired by Other MDIs

Acquired by

Non-MDIs

(29 Mergers;

Acquired by $6.7 Billion)

Other MDIs

(28 Mergers;

$12.8 Billion)

Source: FDIC. The failed bank acquisition amount excludes the two depositor payouts.

Percent of Assets Acquired, 2002–2013

In Voluntary Mergers In Failed Bank Acquisitions

Acquired by

Other MDIs

(13 Failures;

$21.8 Billion)

Acquired

by Non-MDIs

(18 Failures;

$3.3 Billion)

Chart 3.4

The MDI Population Has Been Somewhat More Volatile

Over Time Than the Community Bank Population

Unique Banks Reporting in at Least One Year-End as:

9,668 institutions reported as

community banks in at least one

year-end over the study period.

289 institutions reported as

MDIs in at least one year-end

over the study period.

Source: FDIC.

MDIs Community Banks

Continuously

Reported

2001–2013

Underwent

Structural

Changes

Underwent

Definitional

Changes Only

18%

30%

52%

3%

57%

40%

Chart 3.5

The Number of MDI Charters Has Increased Over Time

Source: FDIC.

0

50

100

150

200

250

2001 2003 2005 2007 2009 2011 2013

Multi-Racial

Hispanic American –

Not Puerto Rican

Hispanic American –

Puerto Rican

African American

Native American

Asian American

Number of Charters

Chart 3.6
FDIC Quarterly 51 2014, Volume 8, No. 3

Minority Depository Institutions

This section finds that while the financial performance 

of MDIs also more closely resembles that of community 

banks than noncommunity banks, MDIs tend to underperform both groups in terms of standard measures of 

financial performance. Several factors that may contribute to this difference in performance are also explored, 

including the concentration of MDIs in metropolitan 

areas, many of which experienced extreme financial 

distress during the recession, as well as the relatively 

young age of MDIs.

Profitability

One of the most widely used measures of financial institution performance is pretax return on assets (pretax 

ROA).15 Chart 4.1 depicts annual pretax ROA for 

MDIs and non-MDI community and noncommunity 

institutions over the 2001–2013 period. The shaded 

region on the chart also depicts the 25th to 75th 

percentile of the pretax ROA distribution for MDIs in 

each year, with the bottom and top 25 percent of MDIs 

excluded.

Across the entire study period, MDIs reported a 

weighted average pretax ROA of 0.69 percent, compared 

with 1.02 percent for community banks and 1.34 percent 

for noncommunity banks. The average profitability of 

MDIs and community banks was very similar through 

roughly the first five to six years of this period, after 

which MDIs began to underperform both community 

and noncommunity banks. However, MDI profitability 

once again converged with that of community banks in 

15 Pretax return on assets equals pretax net income as a percent of 

average assets and includes extraordinary items and other adjustments, net of taxes.

As the composition of MDI minority status groups 

changed over the period, the share of MDI assets also 

shifted. In 2001, Asian American institutions held 23 

percent of MDI assets. By year-end 2013, their share of 

MDI assets had nearly doubled to 43 percent. The assets 

of Hispanic American MDIs also grew rapidly, rising 

more than two-thirds during the study period and leaving them with 52 percent of total MDI assets in 2013. 

Hispanic American MDIs in Puerto Rico made up over 

one-third of total MDI assets in 2013. Finally, African 

American, Native American, and Multi-Racial MDIs 

held 4 percent or less of MDI assets at year-end 2013.

Section Summary

Like other groups of depository institutions, the MDI 

banking segment experienced significant structural 

change during the 2001–2013 period of this study. The 

number of MDI charters has fluctuated as new MDIs 

were chartered, existing institutions were designated as 

MDIs, existing MDIs were acquired by other institutions, and some MDIs failed. In fact, compared with the 

industry overall, and especially community banks, the 

MDI population has experienced significant volatility, 

with relatively few MDIs operating continuously 

throughout the study period. The composition of the 

MDI segment has also changed over time, as the share 

of MDIs with an Asian American or Hispanic American minority status has increased and the share of African American MDIs has declined.

Section 4. Financial Performance of Minority 

Depository Institutions

As described in earlier sections, the MDI segment is 

relatively small, with only 174 out of 6,812 FDICinsured institutions being designated as MDIs at yearend 2013. In addition, this industry segment has 

changed significantly during the study period and has 

demonstrated greater volatility than other industry 

segments. These factors make long-term group comparisons of MDI performance difficult. Nonetheless, it is 

instructive to compare the relative performance of 

MDIs with other groups of institutions, both in terms of 

standard measures of financial performance (this 

section) and in terms of social impact (Section 5). This 

section describes the financial performance of MDIs 

between year-end 2001 and year-end 2013, compared 

with two groups: community and noncommunity banks 

that are not designated as MDIs (so-called non-MDI 

community banks and non-MDI noncommunity 

banks). Section 2 has already described how MDIs more 

closely resemble community banks than noncommunity 

banks in terms of size and balance sheet characteristics. 

Many MDIs Underperform in Terms of Standard

Industry Measures of Financial Performance

Annual Weighted Average Pretax Return on Assets (ROA)

(Percent)

-3

-2

-1

0

1

2

3

2001 2003 2005 2007 2009 2011 2013

MDI

Non-MDI Noncommunity Bank

Non-MDI Community Bank

Source: FDIC.

Depicts the 25th to 75th Percentiles of

Pretax ROA Distribution for MDIs in Each Year

Chart 4.1
FDIC Quarterly 52 2014, Volume 8, No. 3

than-average overhead expenses. Across the study 

period, MDIs under $100 million reported noninterest 

expenses that were more than twice as high (4.8 

percent) as those reported by MDIs over $1 billion 

(2.3 percent).

The influence of minority status and institution size 

may also help to explain variation in expense and efficiency ratios across MDI minority status groups. As 

shown in Chart 4.3, overhead expenses have been 

substantially higher among African American, Native 

American and Multi-Racial MDIs than among Asian 

American and Hispanic American MDIs. Although 

geography may be one factor that drives these 

disparities—for example, MDIs in Puerto Rico have 

much lower expense ratios than those in New York—

the most important factor seems to be average size. 

The African American, Native American, and MultiRacial MDIs average $100 to $250 million in size in 

2011 and 2012 as the economy recovered and asset quality stabilized.

Although MDIs were found to perform somewhat like 

community banks with regard to net interest income 

and noninterest income (see Chart 4.2, upper charts), 

MDIs experienced higher expenses related to problem 

loans, as well as higher overhead expenses. For example, across the study period, MDIs reported loan loss 

provisions averaging 0.93 percent of assets, more than 

twice as much as community banks and higher even 

than noncommunity banks (lower left). Meanwhile, 

MDIs reported overhead expenses that were lower, on 

average, than both community and noncommunity 

banks (lower right). However, the shaded region in 

the noninterest expense chart shows that almost 

three-quarters of MDIs reported above average 

expense ratios in any given year. The very smallest 

MDIs, in particular, were found to have much-higherMDIs Perform Much Like Community Banks in Certain Respects, but Many of Them Report Higher Expense Ratios

Net Interest Income 

Loan Loss Provision 

Annual Percent of Average Assets, Weighted Average

Source: FDIC.

0.0

1.0

2.0

3.0

4.0

5.0

2001 2003 2005 2007 2009 2011 2013

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2001 2003 2005 2007 2009 2011 2013

Annual Percent of Average Assets, Weighted Average

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2001 2003 2005 2007 2009 2011 2013

Noninterest Income 

Annual Percent of Average Assets, Weighted Average

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2001 2003 2005 2007 2009 2011 2013

Noninterest Expense

Annual Percent of Average Assets, Weighted Average

MDI

Non-MDI Noncommunity Bank

Non-MDI Community Bank

Depicts the 25th to 75th Percentiles 

for MDIs in Each Year 

Chart 4.2
FDIC Quarterly 53 2014, Volume 8, No. 3

Minority Depository Institutions

overhead expenses on the part of smaller institutions. 

Across the study period, MDIs with assets less than 

$100 million reported an average efficiency ratio (92 

percent) that was substantially higher than MDIs with 

assets over $10 billion (55 percent). While efficiency 

ratios are generally higher for smaller institutions in 

every group, the disparity in efficiency ratios by size is 

even more pronounced in the case of MDIs (see 

Chart 4.5).

Based on the similarities between MDI and community 

bank pretax return on assets during most periods, a 

question arises as to whether the performance differences are statistically significant. The inset box 

discusses two tests of statistical significance with 

respect to MDIs and community banks from our observational study completed in 2013.

2013—far smaller than the $900 million for Asian 

American MDIs and $1 billion for Hispanic American 

MDIs outside Puerto Rico. Puerto Rico MDIs averaged 

$11.9 billion in assets at year-end 2013.

Efficiency ratios also show differences in the ability of 

small and large banks to generate revenue in relation 

to the expenses they incur in doing so. The efficiency 

ratio is the ratio of noninterest expense to net operating revenue, where a higher efficiency ratio indicates 

an institution that is less efficient at generating revenue per dollar of noninterest expense.16 The FDIC 

Community Banking Study identified the emergence of 

a sizable “efficiency gap” between community and 

noncommunity banks during the period after 1998 

that has narrowed only slightly in the years following 

the onset of the recent financial crisis. In comparison, 

the average MDI efficiency ratio has tended to fall 

between the weighted average for community and 

noncommunity banks (see Chart 4.4). During the 

study period, the average efficiency ratio of noncommunity banks equaled 57.1 percent, compared with 

61.4 percent for MDIs, and 66.6 percent for community banks. Although the weighted average MDI efficiency ratios fell between these two figures during most 

years, the shaded region on the chart shows that threequarters or more of MDIs report efficiency ratios 

higher than the average MDI in any given year.

The large share of MDIs with relatively high efficiency 

ratios mostly appears to point to higher-than-average 

16 Formally, the efficiency ratio is expressed as: 

Efficiency Ratio = Noninterest Expense

Net Interest Income + Noninterest Income.

Overhead Expenses Vary Widely

Across Minority Status Groups

Annual Weighted Average Noninterest Expense as a Percent of Average Assets

0

1

2

3

4

5

6

7

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Asian American African American Hispanic American

Multi-Racial Native American

Source: FDIC.

Chart 4.3

Efciency Ratio

MDI

Non-MDI Noncommunity Bank

Non-MDI Community Bank

Source: FDIC.

Annual Weighted Average Efficiency Ratio

(Percent)

0

20

40

60

80

100

120

2001 2003 2005 2007 2009 2011 2013

Efficiency Ratio =

Noninterest Expense

Net Interest Income + Noninterest Income

Depicts the 25th to 75th Percentiles

of Efficiency Ratio Distribution 

for MDIs in Each Year 

Chart 4.4

The Smallest MDIs, in Particular, Stand Out in Terms

of Elevated Efciency Ratios

Weighted Average Efficiency Ratio for Group, 2001–2013

(Percent)

92

71

60

55

0

10

20

30

40

50

60

70

80

90

100

< $100 Million $100 Million – 

$1 Billion

$1 – $10 Billion > $10 Billion

MDIs

Non-MDI Community Banks

Non-MDI Noncommunity Banks

Source: FDIC. Asset Size Group

Chart 4.5
FDIC Quarterly 54 2014, Volume 8, No. 3

Some of the difference in MDI and non-MDI performance may be attributed to the influence of geographic 

concentrations. As noted earlier, 60 percent of MDI 

offices were located among the top nine metro areas, 

with many of these large metro areas experiencing severe 

distress during the economic crisis. Table 4.1 shows that 

both MDI and non-MDI community banks headquartered in metro areas had lower pretax ROA during the 

recession, compared with institutions in nonmetro areas.

Younger institutions also performed worse relative to 

more seasoned charters. Overall, MDIs have a higher 

Factors That Affect Performance

While MDI financial performance resembled that of 

community banks prior to the recent recession, their 

performance diverged during the crisis. Table 4.1 shows 

that the aggregate average pretax return on assets for 

non-MDI and MDI community banks was similar prior 

to the crisis, but MDI community banks experienced 

negative pretax ROA in the period from 2007 to 2009. 

These results do not necessarily rule out the possibility 

of other correlating factors. Future research may provide 

additional insight into these potential correlations, 

which could include geographic and age characteristics.

In a simple comparison of financial performance, the 

pretax ROA of MDIs in Chart 4.1 is generally lower 

than that of non-MDI community banks. Other measures 

of financial performance depicted in Charts 4.2 through 

4.4 also depict systematic differences between the two 

subject groups. Our analytical work related to the 2013 

Interagency MDI/CDFI Bank Conference included analysis of these differences for the period between 2001 and 

2012. But are these differences statistically significant?

To answer this question, we conducted an observational 

study in which financial institutions are treated as 

subjects and the MDI designation serves as a treatment 

factor. In this analysis, we employ two tests: a t-test and 

a Wilcoxon rank-sum test. Both tests have been applied 

to group comparisons of pretax ROA and other financial 

performance ratios on a pooled basis over the 2001–2012 

period (see Chart below). The t-tests and Wilcoxon 

rank-sum tests both consistently indicate that differences in financial performance between MDIs and nonMDI community banks are statistically significant. MDIs 

tend to have measurably lower pretax ROA than do 

non-MDI community banks, and also have higher 

noninterest expenses and loan loss provisions. Differences in MDI and non-MDI efficiency ratios were also 

found to be statistically significant. Overall, the results 

of our analysis indicate that statistically meaningful 

differences exist between the financial performance of 

MDIs and non-MDI community banks.

Additional information related to these tests and the 

methodology is available in the Appendix.

Are Differences in Financial Performance of MDI and 

Non-MDI Financial Institutions Statistically Significant?

Components of MDI and Non-MDI Community Bank ROA, 2001–2012

Pretax ROA

Net Interest

Income

Noninterest

Income to Assets

Noninterest

Expense to Assets

Loan Loss

Provisions to Assets

Source: FDIC. 

*Indicates statistical difference at 5 percent significance level.

Average Values/T-Test Median Values/Rank-Sum Test

0% 1% 2% 3% 4% 5%

0.30%*

0.93%

3.63%

0.73%

0.33%

3.13%

1.05%*

3.77%*

4.01%*

0.57%*

0% 1% 2% 3% 4% 5%

0.70%*

1.14%

3.62%

0.58%

0.17%

2.96%

0.71%*

3.78%*

3.62%*

0.28%*

MDIs

Non-MDI Community Banks
FDIC Quarterly 55 2014, Volume 8, No. 3

Minority Depository Institutions

Smaller MDIs especially were found to have much 

higher noninterest expenses compared with larger MDIs 

and community banks. In addition, smaller MDIs also 

were less efficient compared with both mid-size and 

larger MDIs, as well as non-MDI community and 

noncommunity banks. However, to the extent that 

MDIs have been chartered to serve a variety of stakeholders in addition to equity shareholders, it is important to also consider their relative performance in terms 

of social impact, which we do in Section 5.

Section 5. Social Impact of Minority 

Depository Institutions

MDIs play an important role in providing mortgage 

credit and other banking services to minority and 

low- and moderate-income (LMI) communities.17 As 

noted in Section 2, MDI headquarters are concentrated 

in metropolitan areas, while their 1,793 offices are 

somewhat more widely distributed. There is a natural 

17 Low-income census tracts have median family income of less than 

50 percent of the MSA’s median family income. Moderate-income 

census tracts have median family income of between 50 percent and 

less than 80 percent of the MSA’s median family income.

proportion of younger institutions than do non-MDIs. 

The 2012 FDIC Community Banking Study demonstrated that newer community banks on average underperformed more mature community banks. In nearly 

every time period studied, community banks with an 

age of less than five years performed worse than any 

other age cohort. This phenomenon is consistent 

among young MDI community banks as well. Younger 

MDIs had lower pretax ROA both leading up to as well 

as during the recession.

Section Summary

The wide variation in size among MDI institutions, in 

addition to significant structural change in this 

segment, tends to complicate long-term group comparisons of MDI performance with that of other groups of 

banks. Nonetheless, we find that MDIs generally underperform non-MDI community and noncommunity 

institutions in terms of standard industry measures of 

financial performance such as pretax return on assets. 

MDIs were found to perform much like community 

banks with regard to net interest income and noninterest income, but experienced higher expenses related to 

problem loans as well as higher overhead expenses. 

Table 4.1

MDI Performance Resembles Similarly Situated Community Banks

Aggregate Average Pretax Return on Assets, Percent

Overall 2001–2003 2004–2006 2007–2009 2010–2012 2013 2001–2013

Noncommunity Banks

Non-MDI 2.0 2.0 0.4 1.3 1.6 1.3

MDI 1.6 1.5 -0.1 0.6 0.9 0.8

Community Banks

Non-MDI 1.5 1.5 0.5 0.7 1.1 1.0

MDI 1.3 1.5 -0.5 0.1 0.8 0.5

By MSA

Community Banks

Non-MDI Metro 1.5 1.5 0.3 0.6 1.1 0.9

Nonmetro 1.5 1.5 0.9 0.9 1.2 1.2

MDI Metro 1.3 1.6 -0.6 0.1 0.8 0.5

Nonmetro 1.3 1.4 0.6 0.8 0.8 0.9

By Age

Community Banks

Non-MDI

Less Than 5 Years 0.2 0.2 0.1 0.3 0.4 0.2

5 - 10 Years 1.3 1.4 0.0 0.3 1.0 0.7

Over 10 Years 1.6 1.6 0.5 0.8 1.1 1.1

MDI

Less Than 5 Years -0.2 0.5 -1.9 0.3 -1.2 -0.6

5 - 10 Years 1.2 1.4 -0.6 0.0 1.5 0.3

Over 10 Years 1.3 1.6 -0.4 0.2 0.8 0.6

Source: FDIC. 
FDIC Quarterly 56 2014, Volume 8, No. 3

Comparing the Share of Population Living in 

LMI Tracts

Based on these computed geographic service areas, 

comparisons can be made of the populations served by 

MDIs with those served by non-MDI community and 

noncommunity banks. The first such comparison, 

undertaken for 2006 and 2011, indicates that the share 

of service area populations that live in LMI census 

tracts is higher for MDIs. In fact, the share of estimated 

service area populations living in LMI tracts was 

substantially higher for African American, Hispanic 

American, and Asian American MDIs, compared with 

both community banks and noncommunity banks (see 

Chart 5.1). For example, in 2011 the median non-MDI 

community bank operated in a service area in which 

17 percent of the population resided in an LMI census 

tract. By comparison, the estimated service area population living in LMI tracts for the median African American MDI was 66.5 percent, or 3.9 times the share for 

the median non-MDI community bank. Similarly, the 

correspondence between the local demographics of 

MDI office locations, the lending activities they undertake, and the communities they endeavor to serve. 

This section compares the demographic characteristics 

of service areas of MDI institutions with those of nonMDI community and noncommunity banks, and 

explores lending by these groups of institutions in the 

context of these demographic characteristics.

This evaluation of the social impact of MDIs is based 

on a unique estimate of the relevant geographic service 

area of each institution (see inset box above). The 

results show that compared with other financial institutions, MDI offices tend to be located in communities 

with a higher share of the population living in LMI 

census tracts and with higher shares of minority populations. In addition, MDIs originate a greater share of 

their mortgages to borrowers who live in LMI census 

tracts and to minority borrowers compared with 

community or noncommunity institutions.

To examine the impact of MDIs on the communities 

they serve, it is necessary to first identify the geographic 

service area of each bank. Unfortunately, there are no 

readily available data indicating each bank’s self-identified market area. In addition, the availability of data 

indicating a bank’s Community Reinvestment Act 

(CRA) assessment area is subject to a de minimis test, and 

is therefore incomplete. Some previous researchers have 

estimated bank service areas as simply the sum of the 

census tracts in which each bank operates headquarters 

and branch offices. A shortcoming of this approach is 

that a census tract often covers only a small geographic 

area, and the average size of census tracts tends to decline 

as population density increases. In addition, looking only 

at the census tracts in which a bank’s offices are located 

ignores people living in other nearby tracts who may also 

be served by those offices.

This report employs a novel computation of the service 

area of each bank that also includes census tracts adjacent 

to and nearby those in which the bank’s offices are 

located. The following two-step process is used to identify the geographic service area of each bank:

Step 1: Determine a “reasonable distance” for 

customers to travel to do their banking business in 

a given metropolitan or nonmetropolitan area. For 

each geographic area, the reasonable distance is 

computed such that roughly 90 percent of the area’s 

population has at least one full-service bank branch 

within that distance. Generally this reasonable 

distance is substantially longer for nonmetropolitan 

areas than it is for more densely populated metropolitan areas. Moreover, reasonable distances can differ 

substantially across various metro and nonmetro areas 

located around the country. For example, using 2011 

data from the FDIC Summary of Deposits, New York 

City had the shortest reasonable distance of any 

MSA (0.6 miles), while Flagstaff, Arizona, had the 

longest reasonable distance (22.5 miles). For 

nonmetro areas, which are calculated on a statewide 

basis, reasonable distances based on 2011 data ranged 

from a low of 1.9 miles in Massachusetts to a high of 

66.2 miles in Alaska.

Step 2: Estimate the service area of each banking

office based on this “reasonable distance.” Using 

the reasonable distance calculation made for each 

metro or nonmetro area, a circle can be drawn 

around each banking office located there. Census 

tracts within or touching that circle are said to be 

served by that banking office, and the total population served by each banking office is the sum of the 

residents of all these census tracts. The total population served by each bank, in turn, is the sum of the 

residents of census tracts served by each of its individual banking offices.

Estimating the Service Area of Each Bank
FDIC Quarterly 57 2014, Volume 8, No. 3

Minority Depository Institutions

service area population who were African American 

was roughly 60 percent for African American MDIs, 

compared with less than 7 percent among community 

and noncommunity banks (see Chart 5.2).

Hispanic American MDIs have service area populations 

with an even higher median share of Hispanic American residents compared with non-MDIs (see Chart 5.3). 

In both 2006 and 2011, the median share of estimated 

service area population who were Hispanic American 

was nearly 80 percent among Hispanic American MDIs 

compared with roughly 9 percent or less among community and noncommunity banks.

Asian American MDIs also have service area populations with a higher share of Asian Americans compared 

with non-MDIs (see Chart 5.4).

median Hispanic American MDI’s estimated service 

area had 34.1 percent of its population living in LMI 

tracts, while the median Asian American MDI’s estimated service area had 45.5 percent of its population 

living in LMI tracts.

Estimated Service Area Minority Populations

Having offices in minority communities is also important to providing access to mainstream financial 

services. A 2011 FDIC survey showed that 10 million 

“unbanked” U.S. households did not have bank 

accounts with mainstream financial institutions, and 

another 14 million households could be considered 

“underbanked.”18 The survey also indicated that minority households were more likely than other households 

to be unbanked. Some 21.4 percent of African American households and 20.1 percent of Hispanic American 

households were found to be unbanked in 2011, 

compared with 4 percent of white households.

MDIs are important service providers to minority populations, which tend to have higher percentages of 

unbanked households than other population groups. 

Using the geographic service area designations, MDI 

offices are shown to be located in areas with a higher 

share of minority populations. Analysis of the demographic characteristics of these service areas reveals that 

in both 2006 and 2011, the minority share of estimated 

service area populations was much higher for all three 

groups of MDIs compared with non-MDIs. For example, 

in both 2006 and 2011 the median share of estimated 

18 See 2011 FDIC National Survey of Unbanked and Underbanked 

Households, http://www.fdic.gov/householdsurvey/.

The Median Share of Estimated Service Area Population

Living in LMI Census Tracts Is Higher Among MDIs

46%

72%

33%

49%

8%

24%

46%

67%

34%

46%

17%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

All MDIs African

American

MDIs

Hispanic

American

MDIs

Asian

American

MDIs

Non-MDI

Community

Banks

Non-MDI

Noncommunity

Banks

2006 2011

Source: FDIC, U.S. Census Bureau.

Chart 5.1

Median Share of Estimated Service Area

Population Who Are African American 

Source: FDIC, U.S. Census Bureau.

2%

6%

63%

3%

7%

59%

0%

10%

20%

30%

40%

50%

60%

70%

African

American

MDIs

Non-MDI

Community

Banks

Non-MDI

Noncommunity

Banks

2006 2011

Chart 5.2

Median Share of Estimated Service Area

Population Who Are Hispanic

Source: FDIC, U.S. Census Bureau.

Hispanic

American

MDIs

Non-MDI

Community

Banks

Non-MDI

Noncommunity

Banks

2006 2011

2% 7%

80%

4%

9%

80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Chart 5.3
FDIC Quarterly 58 2014, Volume 8, No. 3

African American MDIs appear to be particularly 

successful in their mission of serving African American 

borrowers. Chart 5.6 shows that the median share of 

HMDA-reported mortgages made to African American 

borrowers in 2006 was 78 percent for African American 

MDIs, compared with less than 1 percent for non-MDI 

community banks. While the median share of mortgages made to African American borrowers fell to 66.7 

percent for African American MDIs in 2011, it still far 

exceeded the less than 1 percent share reported by nonMDI community banks in that year. In fact, the share 

of mortgages made to African American borrowers by 

African American MDIs exceeded the already-high 

share of African Americans residing in their service 

area by 78 percent to 63 percent in 2006 and by 67 

percent to 59 percent in 2011.

Home Mortgage Lending of MDIs

MDIs not only maintain offices in communities with 

higher LMI population shares than other institutions, 

but among banks that report data under the Home 

Mortgage Disclosure Act (HMDA), MDIs also originate 

a greater share of their home mortgages to borrowers 

whose properties are located in LMI census tracts.19, 20

For example, in 2006 the median African American 

MDI originated half of its HMDA-reportable mortgages 

to borrowers for purchasing properties in LMI census 

tracts (see Chart 5.5). This is more than 4.5 times the 

share of mortgages originated to such borrowers by nonMDI community banks and more than 3.8 times the 

share of mortgages originated to such borrowers by nonMDI noncommunity banks.

Chart 5.5 shows that between 2006 and 2011 the share 

of mortgages originated in LMI census tracts declined 

for every group of institutions except African American 

MDIs. Still, in 2011, the median shares of mortgage 

loans made on properties located in LMI census tracts 

by MDIs exceeded the share made by non-MDI 

community banks by anywhere from 2.6 to 5.5 times.

19 Depository institutions that meet three criteria must report HMDA data: 

(a) assets as of December 31 of the year preceding data collection exceed 

an annually adjusted threshold ($40 million for collecting 2011 HMDA 

data and $35 million for collecting 2006 HMDA data); (b) on December 

31 of the year preceding data collection, the institution had a home or 

branch office in an MSA; and (c) in the calendar year preceding HMDA 

data collection, the institution originated at least one home purchase or 

refinance loan secured by a first-lien on a one-to-four-family dwelling.

20 HMDA reportable mortgages are home purchase, home improvement, and refinance mortgages. Home equity lines of credit for home 

purchase or improvement may be reported at the institution’s option 

(FFIEC 2010).

Median Share of Estimated Service Area Population

Who Are Asian or Pacic-Islander

Source: FDIC, U.S. Census Bureau.

Asian

American

MDIs

Non-MDI

Community

Banks

Non-MDI

Noncommunity

Banks

2006 2011

1%

3%

22%

1%

4%

30%

0%

5%

10%

15%

20%

25%

30%

35%

Chart 5.4

The Median Share of HMDA-Reported Mortgage

Originations for Properties in LMI Census Tracts

Is Higher Among MDIs

All MDIs Non-MDI

Community

Banks

Non-MDI

Noncommunity

Banks

African

American

MDIs

Hispanic

American

MDIs

Asian

American

MDIs

2006 2011

Source: FDIC, U.S. Census Bureau.

36%

11% 13%

22%

42%

9% 9%

50%

25%

52%

17%

25%

0%

10%

20%

30%

40%

50%

60%

Chart 5.5

Median Share of HMDA-Reported Mortgage

Originations to African American Borrowers

Source: FDIC, U.S. Census Bureau.

African

American

MDIs

Non-MDI

Community

Banks

Non-MDI

Noncommunity

Banks

2006 2011

0.4% 2%

78%

1%

67%

0% 0%

10%

20%

30%

40%

50%

60%

70%

80%

Chart 5.6
FDIC Quarterly 59 2014, Volume 8, No. 3

Minority Depository Institutions

Hispanic American MDIs also appear to be highly 

successful in their mission of serving Hispanic American borrowers. Chart 5.7 shows that the median share 

of HMDA-reportable mortgages made to Hispanic 

American borrowers in 2006 was 61 percent for 

Hispanic American MDIs, compared with less than 

1 percent for non-MDI community banks. In 2011, the 

median share of mortgages made to Hispanic American 

borrowers rose to 65 percent, while the share remained 

at less than 1 percent for non-MDI community banks.

Finally, Asian American MDIs also originated a higher 

percentage of their mortgages to Asian American 

borrowers. Chart 5.8 shows that the median Asian 

American MDI originated 40 percent of its HMDAreportable mortgages to Asian American borrowers in 

2006, compared with less than 1 percent for non-MDI 

community banks. By 2011, the median share of mortgages made to Asian Americans by Asian American 

MDIs had risen to 57 percent, while the median share 

for non-MDI community banks remained at less than 

1 percent. Similar to African American MDIs, the 

share of HMDA-reported mortgages originated by 

Asian American MDIs in 2006 and 2011 exceeded the 

median shares of Asian American populations they 

served in both years (22.1 percent in 2006 and 30.1 

percent in 2011, shown in Chart 5.4).

Section Summary

Compared with non-MDI community banks, MDI 

offices tend to be located in communities with a higher 

share of their population living in LMI census tracts 

and a higher share of minority residents. In addition, in 

a comparison of mortgage lending based on analysis of 

Home Mortgage Disclosure Act data, MDIs originated a 

greater share of their mortgages for properties located in 

LMI census tracts and to minority borrowers compared 

with non-MDI community and noncommunity banks. 

These group differences were quite substantial in 

magnitude and were found to be statistically significant 

using two different statistical tests. On the basis of these 

comparisons, MDIs appear to be highly successful in 

carrying out their mission of serving low- and moderateincome as well as minority households.

Median Share of HMDA-Reported Mortgage

Originations to Hispanic White Borrowers

Source: FDIC, U.S. Census Bureau.

Hispanic

American

MDIs

Non-MDI

Community

Banks

Non-MDI

Noncommunity

Banks

2006 2011

0.7% 2.2%

61%

1.9%

65%

0.5% 0%

10%

20%

30%

40%

50%

60%

70%

80%

Chart 5.7

Median Share of HMDA-Reported Mortgage

Originations to Asian or Pacic-Islander Borrowers

Source: FDIC, U.S. Census Bureau.

Asian

American

MDIs

Non-MDI

Community

Banks

Non-MDI

Noncommunity

Banks

2006 2011

0% 1.0%

40%

1.4%

57%

0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Chart 5.8
FDIC Quarterly 60 2014, Volume 8, No. 3

Our comparison of the social impact of MDIs and nonMDI community banks has shown that MDIs serve 

higher percentages of populations residing in LMI census 

tracts and originate higher percentages of mortgages to 

LMI and minority populations. But are these differences 

statistically significant? To answer this question, we 

follow the techniques applied to comparisons of financial performance in Section 4 and conduct two statistical 

tests using the same observational techniques: the t-test 

and the Wilcoxon rank-sum test.

The t-test compares the distribution of the share of the 

estimated service population living in LMI census tracts 

and the share of HMDA-reported mortgage originations 

for properties in LMI census tracts, and tests whether or 

not the mean values reported for both groups are equal 

in a statistical sense. A Wilcoxon rank-sum test is also 

employed to indicate whether the overall distributions 

for the two subject groups differ to a statistically significant degree. Both tests were applied to the share of 

service-area populations residing in LMI census tracts 

and the share of HMDA-reportable loans made on properties located in LMI census tracts for 2006 and 2011 

(see Chart below).

The t-tests and Wilcoxon rank-sum tests both consistently indicate that differences in population demographics and lending characteristics between MDIs and 

of non-MDI community banks are statistically significant. MDIs reported significantly higher shares of service 

populations living in LMI census tracts than did nonMDI community banks in both periods, and also reported 

significantly higher shares of HMDA-reported mortgage 

originations in LMI census tracts as well. From the 

results of our analysis, it appears that statistically meaningful differences exist between MDI and non-MDI 

community bank service area demographic and mortgage origination characteristics. Additional information 

related to these tests and the methodology is available in 

the Appendix.

Are There Statistically Significant Differences in the Demographic and 

Income Characteristics of the Geographic Service Areas of MDI 

and Non-MDI Community Banks?

Demographic and Lending Characteristics of MDI and Non-MDI Community Banks, 2006 and 2011

Source: FDIC. 

*Indicates statistical difference at 5 percent significance level.

Average Values/T-Test Median Values/Rank-Sum Test

15.5%

16.8%

14.4%

20.7%

37.7%*

46.3%*

31.2%*

45.9%*

0% 10% 20% 30% 40% 50%

Share of HMDA-Reported Mortgage

Originations for Properties in LMI

Census Tracts

Share of Estimated Service Population

Living in LMI Census Tracts

Share of HMDA-Reported Mortgage

Originations for Properties in LMI

Census Tracts

Share of Estimated Service Population

Living in LMI Census Tracts

10.9%

8.3%

9.3%

17.0%

36.4%*

45.6%*

25.0%*

46.1%*

0% 10% 20% 30% 40% 50%

2011

2006

MDIs

Non-MDI Community Banks

Authors: Eric C. Breitenstein, Economic Analyst

Division of Insurance and Research

Karyen Chu, Chief

Division of Depositor and Consumer Protection

Kathy Kalser, Assistant Director

Division of Insurance and Research

Eric W. Robbins, Regional Manager

Division of Insurance and Research

The authors would like to thank Benjamin R. Backup, 

Camille Campanella, Andrew Driscoll, Denis Dudnik, 

Miguel Hasty, Cody Hyman, Schuyler Livingston, 

Alexander Marshall, John McGee, Arthur Micheli, 

Silvia L. Ramirez, Rachelle Rose, Dhruv Sharma, 

Ronald W. Sims II, and Benjamin Tikvina for their

significant contributions to the analysis of MDIs undertaken in this study.
FDIC Quarterly 61 2014, Volume 8, No. 3

Minority Depository Institutions

ables. To the extent that the goal of conducting statistical tests is to compare means or medians between 

groups of institutions, the presence of these extreme 

values can result in a misleading comparison. To minimize the influence of outliers, we limit our analysis to 

the core of observations that are within four standard 

deviations from the mean for all analysis variables. Any 

institution reporting a value greater than or equal to 

four standard deviations from the average for any analysis variable is defined as an outlier and is excluded from 

the analysis for that particular year. This process 

resulted in the exclusion of 1,926 of the 101,587 total 

observations available for the 2001–2012 period, or just 

fewer than 2 percent of all available observations.

Statistical Tests—Financial Performance

In analyzing financial performance, we use a sample 

composed of annual bank financial performance metrics 

from 2001 through 2012. This sample is used to make 

inferences regarding the population distributions of MDI 

and non-MDI community bank financial ratios. For 

each analysis variable, we conduct statistical tests based 

on the null hypothesis that the population means or 

distributions are identical, and the alternative hypothesis that the mean or distribution for one population 

differs from that of the other population. For any particular comparison, our threshold for statistical significance 

is 5 percent. Comparisons that produce p-values smaller 

than 5 percent reflect statistically significant differences 

between the two samples. In many cases, the p-values 

we have calculated are less than 1 percent.

Our first comparison for each analysis variable was based 

on the t-test, which is commonly used to test whether 

the means of two samples randomly drawn from independent, normally distributed populations are statistically different. A t-statistic was calculated from the 

means, variances, and sizes of each subject group. 

Comparing this test statistic with values drawn from the 

Student t-distribution, we calculated p-values that 

express the probability that the null hypothesis (that the 

means are equal) is correct. Pooling all non-outlier observations for the 2001–2012 period, we obtained results for 

comparisons between MDIs and non-MDI community 

banks for six measures of financial performance.

As discussed previously, one caveat associated with these 

results is that the population distributions for each variable are likely not normal. Moreover, while observations 

made within any given year may be independent, observations for the same institution across years are unlikely 

to meet this assumption. To account for the lack of independence across years, these t-tests were also run for 

APPENDIX: Additional Information on the 

Statistical Significance Tests

Data

We perform an observational study on FDIC-insured 

financial institutions that compares data on MDIs to 

data on non-MDI community banks. In an observational study, the assignment of subjects to groups is 

nonrandom and outside the control of the observer. 

Although our results indicate statistically significant 

differences exist between certain financial metrics of 

MDIs and non-MDI community banks, our results do 

not prove that being an MDI is the only reason for 

these differences. This is because of the possible existence of confounding factors. For example, MDIs may 

have greater exposure to poorer-performing markets 

than community banks in the aggregate. However, 

institutions in both subject groups operating within the 

same market may perform similarly. Further research 

into the comparative financial performance of MDIs 

and non-MDI community banks could compare institutions operating within the same geographic area to 

institutions located outside the area.

As noted earlier, the comparative analysis of financial 

performance of this study was completed in connection 

with the 2013 Interagency MDI/CDFI Bank Conference, and is therefore based on bank-level data from the 

December Call and Thrift Financial Reports each year 

from 2001 through 2012. These data are used to calculate the following financial ratios for each bank: pretax 

return on average assets, annualized net interest 

income, annualized noninterest income, annualized 

noninterest expense, annualized provisions, and the 

efficiency ratio. Each ratio is calculated by dividing the 

appropriate income statement item by an institution’s 

five-quarter average assets.

A key assumption made in constructing some statistical 

tests is whether the variables of interest follow a normal 

distribution. As part of our analysis, we tested pooled and 

annual cross sections of the financial ratio data for 

normality using the Anderson-Darling, Cramer-von 

Mises, and Kolmogorov-Smirnov tests. In every case we 

rejected the null hypothesis of normally distributed population at significance levels less than or equal to 1 percent.

The data were also found to be heavily influenced by 

outliers, or observations well outside of a variable’s usual 

range. For example, a handful of banks report efficiency 

ratios in excess of 10,000 percent, and two dozen report 

efficiency ratios greater than 5,000 percent. Similarly 

extreme values are also found among the other vari-
FDIC Quarterly 62 2014, Volume 8, No. 3

robustness of our conclusion that the observed differences the financial performance between MDIs and 

non-MDI community banks are statistically significant.

Statistical Test—Social Impact

A parallel set of statistical tests are applied below to the 

comparisons between MDIs and non-MDI community 

banks in terms of the social impact measures described 

in Section 5. Table A.3 applies a t-test to the comparison of mean values between these two groups for the 

share of service-area populations residing in LMI census 

tracts and the share of HMDA-reportable mortgages 

made on properties located in LMI census tracts. In 

both cases, the rather large differences in sample means 

observed in Section 5 are found to be statistically significant at the 5 percent level.

A parallel set of t-test results (not reported here) also 

indicates statistically significant differences in mean 

values for these social impact variables between MDIs 

and non-MDI noncommunity banks.

Because these comparisons of the mean values for 

social impact variables depend on the same statistical 

assumptions as the t-test applied above to financial 

performance variables, we also undertake a second 

statistical test based on the Wilcoxon rank-sum test. 

The results in Table A.4 indicate that, compared with 

non-MDI community banks, MDIs serve a significantly 

higher share of populations residing in LMI census 

tracts and originate a significantly higher share of 

HMDA-reportable mortgages in LMI census tracts. 

A parallel set of comparisons between MDIs and nonMDI noncommunity banks (not reported here) also 

indicates significantly higher shares for MDIs in terms 

of both measures.

each individual year. The signs of the relationships indicated in Table A.1 were observed in every individual 

year, while the p-values calculated for individual years 

were below 5 percent in all but a handful of cases. These 

results point to a consistent pattern of statistical relationships between group means as reflected in Table A.1.

Although the t-statistic is generally robust to moderate 

departures from the assumption of normally distributed 

populations, the fact that the populations are likely not 

normally distributed led us to conduct a second statistical test.21 The Wilcoxon rank-sum test was proposed in 

1945 by chemist Frank Wilcoxon as an alternative test 

for comparing two samples without the need to assume 

any particular form for their distributions.22 Using this 

method, a test statistic is calculated based on the rankings of observations for each variable in the pooled 

sample. Within that pooled sample, the ranks for observations belonging to each sample are summed independently and scaled by the size of the overall sample. For 

samples for which the variable distributions are very 

similar, these scaled rank-sums will be nearly equal to 

one another. Alternatively, the sample distributions 

can be said to be statistically different if their scaled 

rank sums differ to a sufficient degree. This type of 

comparison can be used to test the null hypothesis of 

equal distributions for two populations (see Table A.2).

The results of the Wilcoxon rank-sum test in Table A.2 

are perfectly consistent with the results of the t-test in 

Table A.1. This consistency of results adds to the 

21 See Dennis D. Wackerly, William Mendenhall III, and Richard L. 

Scheaffer, Mathematical Statistics with Applications, 7th ed. (Belmont, 

CA: Brooks/Cole, 2008).

22 See Frank Wilcoxon, “Individual Comparisons by Ranking Methods,” 

Biometrics Bulletin, 1, no. 6 (Dec. 1945): 80–83, http://www.jstor.org/

stable/3001968.

Table A.1

T-tests of Differences in Means of Selected Performance Measures of Minority Depository 

Institutions (MDI) and Non-MDI Community Banks, 2001–2012

Pretax ROA

Noninterest 

Income

Noninterest 

Expense

Net Interest 

Income Provisions

Efficiency 

Ratio

Mean MDI 0.30 1.05 4.01 3.77 0.57 89.0

Non-MDI CB 0.93 0.73 3.13 3.63 0.33 74.4

T-test t-statistic 12.9 -6.8 -18.9 -7.0 -12.9 -9.9

Interpretation MDI Lower MDI Higher MDI Higher MDI Higher MDI Higher MDI Higher

Notes: The community bank is defined in the FDIC Community Banking Study (2012).

Variables other than Efficiency Ratio are expressed as a percent of average assets.

Reported averages are not weighted.

The t-statistic is a measure of the difference in means between two samples, adjusted by the sample sizes and variation of the data. Larger absolute values imply greater differences.

The significance level is the probability of observing the result by chance, so that lower values of the significance level indicate greater likelihood that the difference between the populations is 

not random. We consider the results statistically significant if the probability of observing them by chance is less than 5 percent.
FDIC Quarterly 63 2014, Volume 8, No. 3

Minority Depository Institutions

Table A.2

Wilcoxon Rank-Sum Tests of Differences in Distributions of Selected Performance Measures 

of Minority Depository Institutions (MDI) and Non-MDI Community Banks, 2001–2012

Pretax ROA

Noninterest 

Income

Noninterest 

Expense

Net Interest 

Income Provisions

Efficiency 

Ratio

Median MDI 0.7 0.71 3.62 3.78 0.28 77.0

Non-MDI CB 1.14 0.58 2.96 3.62 0.17 68.4

Rank-Sum 

Test

p-value <0.01 <0.01 <0.01 <0.01 <0.01 <0.01

Result MDI Lower MDI Higher MDI Higher MDI Higher MDI Higher MDI Higher

Notes: The community bank is defined in the FDIC Community Banking Study (2012).

Variables other than Efficiency Ratio are expressed as a percent of average assets.

The significance level is the probability of observing the result by chance. Lower p-values indicate greater likelihood that the difference between the populations is not random. We consider the 

results statistically significant if the probability of observing them by chance is less than 5 percent.

Table A.4

Wilcoxon Rank-Sum Tests of Differences in Distributions of Selected Social Impact Measures 

of Minority Depository Institutions (MDI) and Non-MDI Community Banks

Share of Estimated Service Population Living in LMI Census Tracts

2006 2011 Conclusion

Mean MDI 45.6% 46.1%

MDIs have higher shares of service area 

populations living in LMI census tracts

Non-MDI CB 8.3% 17.0%

Rank-Sum Test p-value <0.01 <0.01

Result MDI Higher MDI Higher

Share of HMDA-Reported Mortgage Originations for Properties in LMI Census Tracts

2006 2011 Conclusion

Mean MDI 36.4% 25.0%

MDIs have higher shares of originations 

for properties in LMI census tracts

Non-MDI CB 10.9% 9.3%

Rank-Sum Test p-value <0.01 <0.01

Result MDI Higher MDI Higher

Notes: The community bank is defined in the FDIC Community Banking Study (2012).

The significance level is the probability of observing the result by chance, so that lower values of the significance level indicate greater likelihood that the difference between the populations is 

not random. We consider the results statistically significant if the probability of observing them by chance is less than 5 percent.

Table A.3

T-tests of Differences in Means of Selected Social Impact Measures 

of Minority Depository Institutions (MDI) and Non-MDI Community Banks

Share of Estimated Service Population Living in LMI Census Tracts

2006 2011 Conclusion

Mean MDI 46.3% 45.9%

MDIs have higher shares of service area 

populations living in LMI census tracts

Non-MDI CB 16.8% 20.7%

T-test t-statistic 13.4 12.4

Interpretation MDI Higher MDI Higher

Share of HMDA-Reported Mortgage Originations for Properties in LMI Census Tracts

2006 2011 Conclusion

Mean MDI 37.7% 31.2%

MDIs have higher shares of originations 

for properties in LMI census tracts

Non-MDI CB 15.5% 14.4%

T-test t-statistic 10.3 7.1

Interpretation MDI Higher MDI Higher

Notes: The community bank is defined in the FDIC Community Banking Study (2012).

The t-statistic is a measure of the difference in means between two samples, adjusted by the sample sizes and variation of the data. Larger absolute values imply greater differences.

The significance level is the probability of observing the result by chance, so that lower values of the significance level indicate greater likelihood that the difference between the populations is 

not random. We consider the results statistically significant if the probability of observing them by chance is less than 5 percent.