FDIC Advisory Committee on 

Community Banking 

October 28, 2020 

Deposit Growth, the DIF Restoration Plan, and 

the 2020 Academic Challenge 
Quarterly Change, Total Liabilities, ($Billions) 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

-400 

 Non deposit Liabilities 

 Deposit Liabilities 

I 

1,184 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Source: FDIC. 

Quarterly Change, Total Deposits, ($Billions) 

1,400 

1,200 

1,000 

800 

600 

400 

-200 

 Foreign Deposits 

 Domestic Deposits 

1,212 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Source: FDIC. 

FDIC 

Growth in liabilities has been driven by domestic deposits 
Quarterly Change, Domestic Deposits, ($Billions) 

1,400 

1,200 

1,000  Nonmaturity Deposits 

 Maturity Deposits 

800 

600 

400 

200 

0 

-200 

1,396 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Source: FDIC. 

Quarterly Change, Assessable Deposits, ($Billions) 

1,400 

1,200 

1,000 

 Large Accounts 

 Small Accounts 

800 

600 

400 

200 

0 

-200 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Source: FDIC. Note: Sept. 2009 removed. Beginning t hat quarter, ban ks reported based on new insurance limit. 

FDIC 

 

 

Banks have reported growth in both nonmaturity deposits and 

deposit balances in large accounts 
Percent Change, Domestic Deposits 

12% 

10%  Community Banks 

 Noncommunity Banks 

8% 

6% 

4% 

2% 

0% 

lQ 2019 2Q2019 3Q 2019 

Source: FDIC. 

4Q2019 

Note: Adjusted for mergers and bank designation ch a nges between ea ch quarter. 

11.4% 

1Q2020 2Q 2020 

FDIC 

 

 

Noncommunity bank deposit growth took off in first quarter, while 

community bank deposit growth took off in second quarter 
Change, Total Liabilities, ($Billions) 

2,000 

 Noncore Liabilities 

 All Other Liabili ties 

1,500 

1,000 

500 

0 

-500 

First Quarter 

Source: FD IC. 

Second Quarter 

Quarterly Change, Total Assets, ($Billions) 

2,000 

1,500 

790 

1,000 

500 

0 

-500 

First Quarter 

Source: FDIC. 

 Liquid Assets 

 All Other Assets 

952 

Second Quarter 

FDIC 

 

 

Growth in noncore liabilities has been limited, growth in liquid 

assets has been substantial 
erly Change, Noncore Liabilities, ($Billions) 

500 

400 

300 

200 

100 

0 

-100 

-200 

-300 

-400 

-500 

Source: FD IC. 

407 

First Quarter 

 Noncore Time and Foreign Deposits 

 Other Borrowed Money 

 Brokered and Listing Service Deposits 

 Federal Funds Purchased and Securities Sold 

Under Agreement to Repurchase 

 Total Noncore Liabilities 

-398 

Second Quarter 

Quarterly Change, Liquid Assets, ($Billions) 

1,000 

900 

800 

700 

600 

500 

400 

300 

200 

100 

0 

Source: FDIC. 

 Cash & Due From Depository Institutions 

 Federal Funds and Repos Sold 

 AFS and HTM Securities 

 Total Liquid Assets 

-First Qu­arter 

790 

952 

I 

Se<ond Quarter 

FDIC 

Noncore liabilities fell in second quarter, while growth in liquid 

assets accelerated 
----------------------------------------------------------------------------------

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Insured Deposit Growth in the First Half of 2020 Equaled Deposit 

Growth in the Previous Three Years 

Annual Growth, December to December, Insured Deposits ($ Trillions) 

$6 

3.3% 

$5 

2014 2015 2016 2017 2018 2019 

$7 

$8 

$9 

5.2% 

6.1% 

3.5% 

5.1% 

3.9% 

20Q1 

17.9% 

20Q2 

33.0% 

$1 trillion over two quarters 

$1 trillion over three years 

Source: FDIC. 
FDIC 

 

 

 

 

 

Insured deposit growth caused the DIF reserve ratio to decline 

below the statutory minimum of 1.35 percent 

Fund Balance, Estimated Insured Deposits, and Reserve Ratio 

Fourth Quarter 2019 First Quarter 2020 Second Quarter 2020 

Beginning Fund Balance 

Plus: Net Assessment Revenue 

Plus: Investment Incomea 

Less: Loss Provisions 

Less: Operating Expenses 

Ending Fund Balanceb 

Estimated Insured Deposits 

Ending Reserve Ratio 

108.9 

1.3 

0.5 

-0.1 

0.5 

110.3 

7,815.2 

1.41% 

110.3 

1.4 

2.0 

* 

0.5 

113.2 

8,164.2 

1.39% 

113.2 

1.8 

0.1 

* 

0.5 

114.7 

8,837.3 

1.30% 

Dollars in Billions 

* = Less than $50 million 

a Includes unrealized gains/losses on available-for-sale securities. 

b Components of fund balance changes may not sum to totals due to rounding. 
FDIC 

 

 

 

 

 

 

 

The Restoration Plan adopted by the FDIC Board has three 

components 

1. The FDIC will monitor deposit balance trends, potential losses, 

and other factors that affect the reserve ratio. 

2. The FDIC will maintain the current schedule of assessment rates 

for all IDIs. 

3. At least semiannually, the FDIC will update its analysis and 

projections for the fund and, if necessary, recommend any 

modifications to the Plan, such as increasing assessment rates. 
FDIC 

 

 

 

 

 

 

 

Assuming normal insured deposit growth, the DIF can absorb 

modest losses and reach 1.35 percent within 8 years 

Projected Reserve Ratio at the End of 8 Years Assuming Different Rates of Insured Deposit Growtha 

Annual 

Insured Deposit 

Growth Rate 

[percent] 

Industry Insured 

Deposits 

DIF Reserve Ratio 

[percent] 

DIF Balance needed 

to reach 1.35 percent 

reserve ratio 

Amount available 

to absorb losses 

and reach 1.35 

percent 

2.5 

3.0 

3.5 

4.0 

4.5 

10,835 

11,279 

11,739 

12,215 

12,708 

1.56 

1.50 

1.44 

1.39 

1.33 

145.7 

151.7 

157.9 

164.3 

170.9 

23.7 

17.7 

11.5 

5.1 

(1.5) 

Dollars in Billions 

a Assumes that: (1) the assessment base grows 4.5 percent, annually; (2) the average assessment rate remains at 4.0 basis points; (3) interest 

income on the deposit insurance fund balance is zero; and (4) operating expenses grow at 1 percent per year. 
 

 

 

2020 Academic Challenge:

The Effects of Community Banks on Local Economic Development 

• Bring real-world banking policy questions into the 

classroom 

• Nationwide competition for undergraduate students 

• This year’s Challenge Question: 

“What are the effects of community banks on local economic 

development?” 
 

 

 

 

2020 Academic Challenge: Objectives 

• Increase understanding of the banking industry and the 

FDIC’s role of ensuring the stability of our nation’s financial 

system 

• Engage in critical dialogue with undergraduate scholars 

• Promote interest in future FDIC careers in the fields of 

economics, accounting, and finance 

• Build relationships between the FDIC, students, and the 

academic community 
 

 

2020 Academic Challenge: Logistics 

• Teams consist of 4 or 5 students with a faculty advisor 

• Two rounds: 

• Written component, six pages 

• Five finalists invited to Washington to present their work 

• FDIC provides: 

• Prompts to help students approach the question; 

• Grading rubric on how submissions will be evaluated; 

• Public datasets and codebook that may be used by students to

engage the material. 
 

 

 

2020 Academic Challenge: Timeline 

• Competition Opened on September 18, 2020 

• First Q&A session held on October 7, 2020 

• Second Q&A session to be held on November 12, 2020 

• Submission deadline: November 20, 2020 

• Finalist Selections: February 2021 

• Finalist Presentations: April 16, 2021 

• For more information visit: fdic.gov/academicchallenge