FDIC QUARTERLY A

Quarterly

2019

Volume 13, Number 1

Federal Deposit 

Insurance Corporation

Quarterly Banking Profile:

Fourth Quarter 2018

Merger Adjusting Bank Data: 

A Primer
FDIC QUARTERLY

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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Chairman

Jelena McWilliams

Director, Division of Insurance and Research

Diane Ellis

Executive Editor

George French

Managing Editors

Rosalind Bennett

Alan Deaton

Patrick Mitchell

Shayna M. Olesiuk

Philip A. Shively

Editors

Clayton Boyce

Kathy Zeidler

Publication Manager

Lynne Montgomery

Media Inquiries

(202) 898-6993
FDIC QUARTERLY i

2019 FDIC QUARTERLY

Volume 13 • Number 1

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: Fourth Quarter 2018

FDIC-insured institutions reported aggregate net income of $59.1 billion in the fourth 

quarter of 2018, up $33.8 billion (133.4 percent) from a year earlier. The improvement in 

earnings was attributable to higher net operating revenue and lower income tax expenses. 

The average return on assets was 1.33 percent for the quarter, up from 0.58 percent in 

fourth quarter 2017. The percentage of unprofitable banks in the fourth quarter declined to 

6.5 percent from 16.6 percent a year ago. See page 1.

Community Bank Performance Community banks—which represent 92 percent of insured institutions—reported net 

income of $6.8 billion in the fourth quarter, up $2.7 billion (65.1 percent) from a year 

earlier. Lower income tax expense and higher net interest income contributed most to the 

improvement in earnings. See page 15.

Insurance Fund Indicators The Deposit Insurance Fund (DIF) balance increased by $2.4 billion during the quarter 

to $102.6 billion on December 31, driven by assessment income and unrealized gains 

on available-for-sale securities. The DIF’s reserve ratio (the fund balance as a percent of 

estimated insured deposits) was 1.36 percent on December 31, 2018, unchanged from 

September 30, 2018, and up from 1.30 percent on December 31, 2017. See page 23.

Featured Article:

Merger Adjusting Bank Data: A Primer

Analysis of banking trends often focuses on specific industry subgroups. The analyst tracks 

the performance or characteristics of an industry subgroup over time, and the results, if 

compelling, can serve as input to policy decisions. An important component of analyzing 

industry subgroups is a procedure called merger adjustment. This article describes how 

and when FDIC analysts use merger adjustment when analyzing the banking industry. It 

discusses when to merger adjust and when not to merger adjust, and offers guidance for 

interpreting the results. See page 31.

2019 FDIC QUARTERLY

QUARTERLY BANKING PROFILE Fourth Quarter 2018

FDIC QUARTERLY 1

INSURED INSTITUTION PERFORMANCE

Net Income Rises $33.8 Billion Over Fourth Quarter 2017 to $59.1 Billion

Higher Net Operating Revenue and Lower Income Tax Expenses Lift Net Income

Net Interest Income Increases 8.1 Percent From a Year Earlier

Total Loan and Lease Balances Rise 4.4 Percent Over 12 Months

Full-Year 2018 Net Income Grows to $236.7 Billion

The Number of Banks on the “Problem Bank List” Declines to 60

Net Income Rises $33.8 Billion 

Over Fourth Quarter 2017 to 

$59.1 Billion

The 5,406 FDIC-insured commercial banks and savings institutions reported quarterly net 

income of $59.1 billion in the fourth quarter, an increase of $33.8 billion (133.4 percent) from 

a year earlier.1 Improvement in quarterly net income was attributable to higher net operating revenue (the sum of net interest income and noninterest income) and lower income 

tax expenses. Assuming the effective tax rate before the new tax law, quarterly net income 

would have totaled an estimated $50.3 billion, up $7.9 billion (18.5 percent) from 12 months 

ago.2 The average return on assets was 1.33 percent for the quarter, up from 0.58 percent in 

fourth quarter 2017. The percentage of unprofitable banks in the fourth quarter declined to 

6.5 percent from 16.6 percent a year ago.

Full-Year 2018 Net Income 

Grows to $236.7 Billion

Growth in net operating revenue (up $53.1 billion, or 7 percent), coupled with lower 

income tax expenses (down $36.9 billion, or 37.7 percent) and loan-loss provisions (down 

$1.1 billion, or 2.2 percent), lifted full-year 2018 net income to $236.7 billion, an improvement of $72.4 billion (44.1 percent) from 2017. Assuming the effective tax rate before the new 

tax law, full-year 2018 net income would have totaled an estimated $207.9 billion, compared 

with $183.1 billion in 2017.3 The average net interest margin (NIM) rose from 3.25 percent 

in 2017 to 3.40 percent, as average asset yields (up 43 basis points) exceeded average funding 

costs (up 28 basis points). The average return on assets for 2018 was 1.35 percent, up from 

0.97 percent for 2017.

Securities and Other Gains/Losses, Net

Net Operating Income

Quarterly Net Income

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

-40

-20

0

20

40

60

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

59.1

Chart 1

Quarterly Noninterest Income 

Quarterly Net Interest Income 

Quarterly Net Operating Revenue 

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

0

20

40

60

80

100

120

140

160

180

200

220

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

204.5

Chart 2

1 Three insured institutions had not filed a December 31 Call Report at the time this report was prepared. 

2 This estimate of quarterly net income normalizes fourth quarters 2017 and 2018 by applying the average quarterly tax rate 

between fourth quarter 2011 and third quarter 2017 to income before taxes and discontinued operations. 

3 This estimate of full-year net income normalizes 2018 and 2017 by applying the average annual tax rate between 2011 and 2016 to 

income before taxes and discontinued operations.
2 0 1 9  •  Volume 1 3 • Number 1

2 FDIC QUARTERLY

Net Interest Income 

Increases 8.1 Percent From a 

Year Earlier

Quarterly net interest income rose to $140.2 billion, up $10.5 billion (8.1 percent) from a year 

earlier, owing to growth in interest-bearing assets and wider net interest margins (NIM). 

More than four out of five banks (82.6 percent) reported year-over-year increases in net 

interest income. NIM was 3.48 percent for the quarter, an improvement from the 3.31 percent 

margin reported a year ago, as average asset yields grew more rapidly than average funding 

costs. Banks with assets of $10 billion to $250 billion reported the largest annual increases in 

average asset yields (up 58 basis points) and average funding costs (up 40 basis points).

Loan-Loss Provisions 

Increase Modestly

Banks set aside $14 billion in loan-loss provisions during the fourth quarter, the highest 

level since fourth quarter 2012. Loan-loss provisions rose by $397.3 million (2.9 percent) 

from fourth quarter 2017, with close to 40 percent of all banks reporting increases. Loan-loss 

provisions as a percent of net operating revenue declined from 8.3 percent at year-end 2017 

to 8.2 percent.

Noninterest Income 

Expands From a Year Earlier

Noninterest income increased $1.6 billion (2.6 percent) from a year earlier, as all other 

noninterest income grew by $3.5 billion (11.9 percent) and net gains on sales of other assets 

rose by $393 million (120.3 percent). Despite the overall increase in noninterest income, trading revenue declined by $1.5 billion (25.9 percent) and servicing fees fell by $850.9 million 

(36.1 percent). Slightly more than half of all banks (53.6 percent) reported increases in 

noninterest income compared with the year-ago quarter.

Noninterest Expense 

Increases From Fourth 

Quarter 2017

Noninterest expense posted a modest increase of $194.9 million (0.2 percent) over the past 

12 months. Increases in other noninterest expense (up $2.6 billion, or 5 percent) and salary 

and employee benefits (up $717 million, or 1.3 percent) were partially offset by a decline in 

premises and fixed asset expense (down $2.7 billion, or 22.5 percent). The average assets per 

employee increased from $8.4 million in fourth quarter 2017 to $8.7 million.

Net Charge-Offs Decline 

4.6 Percent From a Year Ago

Banks charged off $12.6 billion in uncollectable loans during the quarter, a decline of 

$605.9 million (4.6 percent) from a year ago. This marks the first time since third quarter 

2015 that net charge-offs registered a year-over-year decline. Credit card balances registered 

the largest annual dollar increase in net-charge offs (up $347.7 million, or 4.4 percent), while 

commercial and industrial loans had the largest annual dollar decline (down $522.6 million, 

or 23.4 percent). The average net charge-off rate declined from 0.55 percent in fourth quarter 

2017 to 0.50 percent.

Source: FDIC.

Percent

Noncurrent Loan Rate and Quarterly Net Charge-O
 Rate

All FDIC-Insured Institutions

0

1

2

3

4

5

6

Quarterly Net Charge-O Rate

Noncurrent Loan Rate

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 3

Source: FDIC.

Note: Loan-loss reserves to noncurrent loans and leases.

$ Billions Coverage Ratio (Percent)

Reserve Coverage Ratio

All FDIC-Insured Institutions

0

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

 Loan-Loss Reserves ($) 

 Noncurrent Loans ($)

 Noncurrents Adjusted for GNMA Guaranteed Loans ($)

 Coverage Ratio (%) 

 Coverage Adjusted for GNMA Guaranteed Loans (%)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 4
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 3

Noncurrent Loan Rate Falls 

Below 1 Percent

Noncurrent loan balances (90 days or more past due or in nonaccrual status) were $1 billion 

(1 percent) lower than the previous quarter. More than half of all banks (53.3 percent) 

reported lower noncurrent loan balances. The quarter-over-quarter decline was reflected 

in residential mortgages balances, which declined by $2 billion (4.4 percent), and commercial and industrial loan balances, which fell by $554.3 million (3.6 percent). Credit card 

balances continued to register the largest quarterly dollar increase, growing by $1.6 billion 

(13.8 percent). The average noncurrent rate was 0.99 percent during the current quarter, 

down 3 basis points from the previous quarter. This is the first time since second quarter 

2007 that the noncurrent rate was below 1 percent.

Loan-Loss Reserves Increase 

From Third Quarter 2018

Loan-loss reserves totaled $124.7 billion at the end of the fourth quarter, an increase of 

$1 billion (0.8 percent) from third quarter 2018. The banking industry continued to build 

reserves, as loan-loss provisions of $14 billion exceeded net charge-offs of $12.6 billion. 

More than half of all banks (57.8 percent) reported a quarterly increase in loan-loss reserves. 

Banks that itemize their loan-loss reserves (banks with assets greater than $1 billion and 

representing 93 percent of total industry assets) reported higher reserves for credit card 

losses (up $997.4 million, or 2.5 percent) and lower reserves for residential real estate losses 

(down $556 million, or 4.4 percent). After declining for the past nine consecutive quarters, 

itemized reserves for losses on commercial loans reported quarterly growth of $409 million 

(1.3 percent).

Equity Capital Increases 

From the Third Quarter

Equity capital increased by $25.3 billion (1.3 percent) during the fourth quarter, led by accumulated other comprehensive income. Retained earnings rose by $70.8 billion (10.3 percent) 

from a year ago. Declared dividends in the fourth quarter totaled $52.7 billion, the highest 

level ever reported by the banking industry. At year-end 2018, 99.6 percent of all insured 

institutions, which account for 99.98 percent of total industry assets, met or exceeded the 

requirements for the well-capitalized category, as defined for Prompt Corrective Action 

purposes.

Total Assets Increase 

1.5 Percent During the 

Fourth Quarter

Total assets rose by $270.4 billion (1.5 percent) during the fourth quarter. Cash and 

balances due from depository institutions declined by $144.4 billion (7.9 percent) and total 

securities holdings grew by $93 billion (2.6 percent). U.S. Treasury securities increased 

$55.4 billion (11.2 percent) during the quarter, the largest quarterly dollar increase since 

fourth quarter 2014.

Held-to-Maturity Securities

Available-for-Sale Securities

Unrealized Gains (Losses) on Investment Securities

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

-46

-100

-80

-60

-40

-20

0

20

40

60

80

100

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 5

Quarterly Change in Loan Balances

All FDIC-Insured Institutions

Source: FDIC.

Note: FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitized loan

balances back onto banks’ balance sheets in the rst quarter of 2010. Although the total amount 

consolidated cannot be precisely quantied, the industry would have reported a decline in loan balances 

for the quarter absent this change in accounting standards.

$ Billions Percent

-300

-200

-100

0

100

200

300

-10

-8

-6

-4

-2

0

2

4

6

8

Quarterly Change (Le Axis)

12-Month Growth Rate (Right Axis)

213

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 6
2 0 1 9  •  Volume 1 3 • Number 1

4 FDIC QUARTERLY

Total Loan and Lease 

Balances Rise 4.4 Percent 

Over 12 Months

Total loan and lease balances were $213 billion (2.1 percent) higher compared with the 

previous quarter. All major loan categories registered quarterly increases.4 Commercial 

and industrial loans increased by $80.7 billion (3.9 percent), and consumer loans (including credit card balances) rose by $52.2 billion (3.1 percent). During the 12 months ended 

December 31, total loan and lease balances rose by $431.2 billion (4.4 percent), a slight 

increase from the 4 percent annual grow rate reported last quarter. All major loan categories 

reported year-over-year increases, led by commercial and industrial loans, which increased 

by $156.2 billion (7.8 percent), and consumer loans (including credit card balances), which 

rose by $64.9 billion (3.9 percent).

Deposits Increase 2.2 

Percent From the Previous 

Quarter

Total deposits increased by $292.6 billion (2.2 percent) from the third quarter, the largest quarterly dollar increase since fourth quarter 2012. Interest-bearing deposits grew 

by $296.5 billion (3.2 percent), while noninterest-bearing deposits fell by $ 5.4 billion 

(0.2 percent). Reliance on nondeposit liabilities declined by $47.5 billion (2.3 percent) from 

the previous quarter, as trade liabilities were reduced by $23.1 billion (8.9 percent) and other 

liabilities fell by $24.4 billion (6 percent).

The Number of Banks on 

the “Problem Bank List” 

Declines to 60

The number of banks on the FDIC’s “Problem Bank List” declined from 71 to 60 at yearend 2018, the fewest since first quarter 2007. Total assets of problem banks fell from 

$53.3 billion to $48.5 billion. During the fourth quarter, two new charters were added, 

70 institutions were absorbed by mergers, and there were no bank failures. For full-year 

2018, eight new charters were added, 259 institutions were absorbed by mergers, and there 

were no bank failures.

Author:

Benjamin Tikvina

Senior Financial Analyst

Division of Insurance and Research

Source: FDIC.

Number

Number and Assets of Banks on the “Problem Bank List” 

0

100

200

300

400

500

600

700

800

900

1,000

0

50

100

150

200

250

300

350

400

450

500

Assets ($ Billions)

Number of Problem Banks 

Assets of Problem Banks

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 7

4 Major loan categories include commercial and industrial loans, residential mortgage loans, consumer loans, and nonfarm 

nonresidential loans. Consumer loans include credit card loans, automobile loans, and all other consumer loans.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 5

TABLE I-A. Selected Indicators, All FDIC-Insured Institutions*

2018 2017 2016 2015 2014 2013 2012

Return on assets (%) 1.35 0.97 1.04 1.04 1.01 1.07 1.00

Return on equity (%) 11.98 8.61 9.29 9.29 9.01 9.54 8.90

Core capital (leverage) ratio (%) 9.70 9.63 9.48 9.59 9.44 9.40 9.15

Noncurrent assets plus other real estate owned to assets (%) 0.60 0.72 0.86 0.97 1.20 1.63 2.20

Net charge-offs to loans (%) 0.48 0.50 0.47 0.44 0.49 0.69 1.10

Asset growth rate (%) 3.03 3.79 5.09 2.66 5.59 1.94 4.02

Net interest margin (%) 3.40 3.25 3.13 3.07 3.14 3.26 3.42

Net operating income growth (%) 45.21 -3.25 4.57 7.11 -0.73 12.82 17.76

Number of institutions reporting 5,406 5,670 5,913 6,182 6,509 6,812 7,083

Commercial banks 4,715 4,918 5,112 5,338 5,607 5,847 6,072

Savings institutions 691 752 801 844 902 965 1,011

Percentage of unprofitable institutions (%) 3.24 5.61 4.46 4.80 6.27 8.16 11.00

Number of problem institutions 60 95 123 183 291 467 651

Assets of problem institutions (in billions) $48 $14 $28 $47 $87 $153 $233

Number of failed institutions 0 8 5 8 18 24 51

* Excludes insured branches of foreign banks (IBAs).

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

(dollar figures in millions)  4th Quarter

2018

3nd Quarter

2018

4th Quarter

2017

%Change 

17Q4-18Q4

Number of institutions reporting 5,406 5,477 5,670 -4.7

Total employees (full-time equivalent) 2,067,086 2,070,617 2,076,128 -0.4

CONDITION DATA

Total assets $17,943,122 $17,672,762 $17,415,369 3.0

Loans secured by real estate 4,887,725 4,863,231 4,773,674 2.4

 1-4 Family residential mortgages 2,119,417 2,112,267 2,063,773 2.7

 Nonfarm nonresidential 1,445,522 1,427,072 1,391,187 3.9

 Construction and development 349,890 350,886 338,318 3.4

 Home equity lines 375,670 381,638 411,151 -8.6

Commercial & industrial loans 2,164,714 2,084,002 2,008,493 7.8

Loans to individuals 1,742,854 1,690,634 1,677,952 3.9

 Credit cards 903,492 856,327 865,055 4.4

Farm loans 82,341 82,346 80,852 1.8

Other loans & leases 1,277,052 1,221,409 1,182,375 8.0

Less: Unearned income 2,383 2,330 2,291 4.0

Total loans & leases 10,152,303 9,939,291 9,721,055 4.4

Less: Reserve for losses 124,737 123,728 123,757 0.8

Net loans and leases 10,027,566 9,815,563 9,597,298 4.5

Securities 3,723,058 3,630,099 3,631,821 2.5

Other real estate owned 6,691 7,187 8,457 -20.9

Goodwill and other intangibles 398,737 397,117 383,388 4.0

All other assets 3,787,070 3,822,797 3,794,405 -0.2

Total liabilities and capital 17,943,122 17,672,762 17,415,369 3.0

Deposits 13,866,258 13,573,675 13,399,208 3.5

 Domestic office deposits 12,612,933 12,321,839 12,081,457 4.4

 Foreign office deposits 1,253,325 1,251,835 1,317,751 -4.9

Other borrowed funds 1,476,120 1,497,299 1,496,033 -1.3

Subordinated debt 68,677 68,844 68,928 -0.4

All other liabilities 509,509 535,705 493,161 3.3

Total equity capital (includes minority interests) 2,022,559 1,997,239 1,958,039 3.3

 Bank equity capital 2,019,086 1,993,746 1,953,700 3.3

Loans and leases 30-89 days past due 65,984 63,196 67,583 -2.4

Noncurrent loans and leases 100,245 101,270 116,421 -13.9

Restructured loans and leases 55,752 56,395 60,221 -7.4

Mortgage-backed securities 2,187,121 2,157,644 2,133,349 2.5

Earning assets 16,255,811 15,959,361 15,760,886 3.1

FHLB Advances 571,406 553,364 582,547 -1.9

Unused loan commitments 7,819,743 7,842,642 7,516,182 4.0

Trust assets 19,304,690 20,422,634 20,333,376 -5.1

Assets securitized and sold 604,697 625,982 677,871 -10.8

Notional amount of derivatives 178,089,249 209,754,237 173,484,033 2.7

INCOME DATA

Full Year 

2018

Full Year

 2017 %Change

4th Quarter 

2018

4th Quarter 

2017

%Change 

17Q4-18Q4

Total interest income $660,988 $572,277 15.5 $176,892 $150,790 17.3

Total interest expense 119,799 73,254 63.5 36,733 21,137 73.8

Net interest income 541,189 499,023 8.5 140,159 129,653 8.1

Provision for loan and lease losses 49,998 51,134 -2.2 14,027 13,630 2.9

Total noninterest income 266,165 255,251 4.3 64,369 62,736 2.6

Total noninterest expense 459,322 442,546 3.8 118,056 117,862 0.2

Securities gains (losses) 328 2,129 -84.6 -231 24 N/M

Applicable income taxes 61,058 97,954 -37.7 13,045 35,327 -63.1

Extraordinary gains, net* -267 -87 -206.4 -40 -222 81.8

Total net income (includes minority interests) 237,036 164,682 43.9 59,129 25,373 133.0

 Bank net income 236,750 164,346 44.1 59,062 25,303 133.4

Net charge-offs 47,479 46,805 1.4 12,592 13,198 -4.6

Cash dividends 164,704 121,413 35.7 52,742 30,258 74.3

Retained earnings 72,045 42,932 67.8 6,320 -4,955 N/M

Net operating income 237,059 163,257 45.2 59,373 25,524 132.6

* See Notes to Users for explanation. N/M - Not Meaningful
2 0 1 9  •  Volume 1 3 • Number 1

6 FDIC QUARTERLY

TABLE III-A. Full Year 2018, All FDIC-Insured Institutions

Asset Concentration Groups*

FULL YEAR

(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 5,406 12 5 1,346 2,866 401 69 226 432 49

Commercial banks 4,715 11 5 1,333 2,572 109 51 203 390 41

Savings institutions 691 1 0 13 294 292 18 23 42 8

Total assets (in billions) $17,943.1 $651.7 $4,285.8 $286.7 $6,374.0 $346.0 $218.3 $36.4 $76.3 $5,667.9

Commercial banks 16,728.2 559.9 4,285.8 281.3 5,893.7 103.3 113.9 31.9 67.2 5,391.1

Savings institutions 1,214.9 91.8 0.0 5.5 480.2 242.7 104.4 4.5 9.0 276.8

Total deposits (in billions) 13,866.3 388.4 3,117.1 237.9 4,999.6 272.6 179.5 28.9 64.2 4,578.1

Commercial banks 12,898.5 321.6 3,117.1 234.8 4,639.4 84.0 92.4 25.8 57.1 4,326.3

Savings institutions 967.7 66.7 0.0 3.2 360.2 188.6 87.1 3.0 7.1 251.8

Bank net income (in millions) 236,750 18,830 49,514 3,688 77,783 3,847 2,992 1,199 849 78,047

Commercial banks 222,032 16,469 49,514 3,553 73,166 1,578 1,878 685 778 74,410

Savings institutions 14,717 2,361 0 135 4,616 2,269 1,114 514 71 3,637

Performance Ratios (%)

Yield on earning assets 4.16 12.43 3.32 4.54 4.28 3.64 5.00 2.95 4.21 3.66

Cost of funding earning assets 0.75 1.95 0.77 0.71 0.73 0.70 0.75 0.39 0.53 0.64

Net interest margin 3.40 10.48 2.55 3.83 3.55 2.94 4.26 2.56 3.68 3.02

Noninterest income to assets 1.51 3.69 1.91 0.64 1.09 1.25 1.28 8.26 0.88 1.46

Noninterest expense to assets 2.61 6.29 2.48 2.56 2.60 2.57 2.98 6.34 2.90 2.28

Loan and lease loss provision to assets 0.28 3.38 0.18 0.15 0.15 0.00 0.55 0.08 0.13 0.17

Net operating income to assets 1.35 2.98 1.16 1.33 1.26 1.12 1.42 3.52 1.13 1.40

Pretax return on assets 1.70 3.74 1.50 1.49 1.57 1.49 1.87 3.63 1.27 1.76

Return on assets 1.35 2.96 1.17 1.32 1.26 1.14 1.42 2.95 1.12 1.40

Return on equity 11.98 19.53 11.78 11.74 10.57 10.01 13.63 18.99 9.30 12.65

Net charge-offs to loans and leases 0.48 3.87 0.50 0.15 0.18 0.02 0.76 1.42 0.17 0.37

Loan and lease loss provision to 

net charge-offs 105.31 109.77 98.77 152.81 120.61 10.07 101.56 18.24 139.33 91.39

Efficiency ratio 56.27 46.36 59.03 60.44 59.55 63.03 54.20 59.64 67.03 53.35

% of unprofitable institutions 3.24 0.00 0.00 2.23 3.07 6.23 5.80 4.87 3.94 0.00

% of institutions with earnings gains 79.65 91.67 100.00 72.29 84.19 73.57 75.36 76.99 78.24 91.84

Condition Ratios (%)

Earning assets to total assets 90.60 93.55 88.25 93.00 90.94 94.63 97.11 91.67 92.98 90.99

Loss allowance to:

Loans and leases 1.23 4.32 1.28 1.40 0.99 0.65 1.05 1.62 1.26 1.04

Noncurrent loans and leases 124.43 281.31 137.93 134.21 126.18 31.58 153.67 126.83 125.13 88.29

Noncurrent assets plus

other real estate owned to assets 0.60 1.26 0.39 0.82 0.63 1.28 0.49 0.43 0.72 0.62

Equity capital ratio 11.25 15.29 9.88 11.34 11.94 11.08 10.51 16.72 12.35 11.04

Core capital (leverage) ratio 9.70 13.47 8.71 11.20 10.18 10.94 10.83 15.39 12.53 9.21

Common equity tier 1 capital ratio 13.16 13.69 13.49 14.61 12.31 22.02 17.26 35.68 21.14 13.17

Tier 1 risk-based capital ratio 13.24 13.79 13.58 14.62 12.38 22.03 17.50 35.70 21.17 13.24

Total risk-based capital ratio 14.60 15.79 14.99 15.74 13.63 22.83 18.51 36.68 22.29 14.66

Net loans and leases to deposits 72.32 132.02 51.36 81.73 89.57 74.88 84.62 34.27 67.48 61.86

Net loans to total assets 55.89 78.68 37.35 67.81 70.26 59.00 69.58 27.16 56.82 49.96

Domestic deposits to total assets 70.29 58.97 48.33 82.97 78.15 78.48 82.21 79.24 84.20 77.52

Structural Changes

New reporters 8 0 0 0 0 1 0 7 0 0

Institutions absorbed by mergers 259 1 0 40 202 6 3 0 5 2

Failed institutions 0 0 0 0 0 0 0 0 0 0

PRIOR FULL YEARS

(The way it was...)

Number of institutions 2017 5,670 11 5 1,389 2,944 420 59 272 510 60

 2015 6,182 14 4 1,479 3,089 500 65 332 632 67

 2013 6,812 16 4 1,532 3,378 588 55 405 772 62

Total assets (in billions) 2017 $17,415.4 $562.7 $4,196.0 $282.6 $6,026.0 $349.3 $270.9 $46.9 $88.8 $5,592.2

 2015 15,967.7 549.1 3,774.6 277.6 5,892.1 385.4 187.3 57.5 113.9 4,730.3

 2013 14,730.8 590.9 3,700.2 261.6 4,921.1 486.9 162.5 62.8 137.6 4,407.1

Return on assets (%) 2017 0.97 1.52 0.62 1.05 1.02 0.94 1.02 2.61 0.91 1.10

 2015 1.04 2.84 0.87 0.96 0.95 0.83 1.04 2.69 0.91 1.12

 2013 1.07 3.35 0.86 1.15 0.91 0.98 1.15 1.93 0.85 1.11

Net charge-offs to loans & leases (%) 2017 0.50 3.95 0.56 0.16 0.21 0.04 0.60 0.23 0.15 0.43

 2015 0.44 2.79 0.59 0.10 0.20 0.13 0.62 0.20 0.20 0.41

 2013 0.69 3.20 0.97 0.14 0.43 0.37 0.80 0.48 0.33 0.49

Noncurrent assets plus 

OREO to assets (%) 2017 0.72 1.25 0.48 0.77 0.70 1.70 0.36 0.59 0.81 0.82

 2015 0.97 0.90 0.71 0.68 0.93 1.92 0.97 0.61 1.19 1.16

 2013 1.63 0.93 1.07 0.95 1.65 2.14 1.23 0.84 1.44 2.18

Equity capital ratio (%) 2017 11.22 15.10 9.83 11.18 11.95 11.22 10.00 15.26 11.94 11.09

 2015 11.24 14.29 10.13 11.32 11.76 11.36 10.12 15.04 11.80 11.08

 2013 11.15 14.73 9.27 10.97 11.79 11.62 9.51 13.50 11.34 11.52

* See Table V-A (page 10) for explanations.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 7

TABLE III-A. Full Year 2018, All FDIC-Insured Institutions 

Asset Size Distribution Geographic Regions*

FULL YEAR

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to $10 

Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion

New 

York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting 5,406 1,278 3,353 638 128 9 659 626 1,163 1,379 1,182 397

Commercial banks 4,715 1,133 2,941 518 114 9 341 572 999 1,333 1,109 361

Savings institutions 691 145 412 120 14 0 318 54 164 46 73 36

Total assets (in billions) $17,943.1 $75.8 $1,108.6 $1,734.9 $6,202.4 $8,821.4 $3,362.0 $3,677.0 $4,042.6 $3,670.8 $1,133.1 $2,057.7

Commercial banks 16,728.2 67.4 954.1 1,386.1 5,499.3 8,821.4 2,915.6 3,573.3 3,942.9 3,627.2 994.1 1,675.1

Savings institutions 1,214.9 8.5 154.5 348.8 703.1 0.0 446.4 103.7 99.7 43.5 138.9 382.6

Total deposits (in billions) 13,866.3 63.0 924.2 1,389.1 4,737.8 6,752.3 2,544.4 2,934.2 2,993.7 2,841.7 922.5 1,629.9

Commercial banks 12,898.5 56.6 802.3 1,121.2 4,166.1 6,752.3 2,205.3 2,852.3 2,923.9 2,808.2 812.4 1,296.4

Savings institutions 967.7 6.3 121.9 267.9 571.7 0.0 339.1 82.0 69.8 33.5 110.0 333.4

Bank net income (in millions) 236,750 761 13,321 22,164 87,302 113,201 39,898 52,024 50,108 45,525 15,438 33,756

Commercial banks 222,032 665 11,641 18,552 77,974 113,201 35,915 51,097 48,767 45,080 13,692 27,480

Savings institutions 14,717 96 1,681 3,612 9,328 0 3,983 927 1,341 445 1,746 6,275

Performance Ratios (%)

Yield on earning assets 4.16 4.40 4.50 4.49 4.73 3.65 4.33 4.23 3.44 4.18 4.51 4.92

Cost of funding earning assets 0.75 0.57 0.67 0.74 0.86 0.69 0.92 0.66 0.66 0.80 0.61 0.81

Net interest margin 3.40 3.83 3.83 3.75 3.87 2.95 3.41 3.57 2.78 3.38 3.89 4.11

Noninterest income to assets 1.51 1.39 1.16 1.14 1.50 1.64 1.38 1.47 1.89 1.28 1.24 1.68

Noninterest expense to assets 2.61 3.63 3.14 2.77 2.70 2.45 2.56 2.56 2.64 2.52 2.97 2.74

Loan and lease loss provision to assets 0.28 0.13 0.14 0.18 0.48 0.19 0.37 0.30 0.12 0.26 0.17 0.55

Net operating income to assets 1.35 1.02 1.25 1.33 1.46 1.29 1.22 1.44 1.27 1.24 1.39 1.74

Pretax return on assets 1.70 1.15 1.43 1.66 1.85 1.64 1.51 1.80 1.60 1.57 1.67 2.25

Return on assets 1.35 1.02 1.23 1.33 1.46 1.29 1.22 1.44 1.26 1.25 1.40 1.74

Return on equity 11.98 7.59 10.80 11.31 11.99 12.32 9.74 11.94 12.14 12.28 12.04 15.33

Net charge-offs to loans and leases 0.48 0.18 0.15 0.19 0.70 0.43 0.59 0.55 0.23 0.50 0.24 0.73

Loan and lease loss provision to 

net charge-offs 105.31 123.82 131.31 127.73 110.19 93.75 110.96 93.10 103.44 97.85 108.28 123.06

Efficiency ratio 56.27 73.57 66.19 59.53 53.14 56.58 56.91 54.39 60.00 56.90 61.08 49.02

% of unprofitable institutions 3.24 8.06 2.06 0.47 0.00 0.00 3.64 5.27 3.44 2.25 2.62 4.03

% of institutions with earnings gains 79.65 69.72 80.88 89.81 94.53 100.00 87.10 84.66 76.61 75.63 78.85 84.63

Condition Ratios (%)

Earning assets to total assets 90.60 92.49 93.13 92.36 91.25 89.45 90.01 89.82 89.59 90.64 91.64 94.27

Loss allowance to:

Loans and leases 1.23 1.38 1.24 1.08 1.34 1.17 1.28 1.20 1.10 1.27 1.04 1.45

Noncurrent loans and leases 124.43 112.62 155.33 139.63 140.03 105.36 135.59 114.08 115.89 106.45 104.97 213.47

Noncurrent assets plus

other real estate owned to assets 0.60 0.97 0.73 0.64 0.62 0.57 0.58 0.65 0.54 0.68 0.76 0.44

Equity capital ratio 11.25 13.57 11.50 11.91 12.08 10.49 12.53 12.07 10.35 10.23 11.81 11.01

Core capital (leverage) ratio 9.70 13.66 11.43 10.92 10.37 8.74 10.56 9.56 9.08 9.23 10.41 10.26

Common equity tier 1 capital ratio 13.16 21.67 15.67 14.09 13.03 12.65 13.56 12.87 12.94 12.60 13.29 14.36

Tier 1 risk-based capital ratio 13.24 21.70 15.69 14.11 13.18 12.69 13.62 12.98 12.98 12.69 13.39 14.47

Total risk-based capital ratio 14.60 22.77 16.77 15.08 14.57 14.15 15.04 14.24 14.15 14.57 14.42 15.52

Net loans and leases to deposits 72.32 71.37 82.25 88.57 80.10 62.16 75.29 71.89 68.06 69.03 80.98 77.07

Net loans to total assets 55.89 59.26 68.57 70.92 61.19 47.58 56.98 57.37 50.40 53.44 65.93 61.05

Domestic deposits to total assets 70.29 83.03 83.36 79.83 73.66 64.30 70.04 77.37 64.64 61.64 81.37 78.51

Structural Changes

New reporters 8 7 1 0 0 0 1 3 0 0 1 3

Institutions absorbed by mergers 259 74 153 31 1 0 38 37 44 58 56 26

Failed institutions 0 0 0 0 0 0 0 0 0 0 0 0

PRIOR FULL YEARS

(The way it was...)

Number of institutions 2017 5,670 1,407 3,513 627 114 9 693 668 1,214 1,438 1,235 422

 2015 6,182 1,688 3,792 595 99 8 762 762 1,337 1,543 1,307 471

 2013 6,812 2,056 4,090 559 100 7 840 869 1,470 1,659 1,431 543

Total assets (in billions) 2017 $17,415.4 $83.7 $1,154.2 $1,751.7 $5,699.2 $8,726.6 $3,248.1 $3,601.0 $3,918.1 $3,683.1 $1,090.0 $1,875.1

 2015 15,967.7 99.2 1,199.9 1,682.4 5,163.6 7,822.6 3,074.1 3,372.6 3,503.7 3,444.0 943.1 1,630.3

 2013 14,730.8 119.7 1,246.1 1,468.5 4,821.1 7,075.3 2,927.2 2,998.8 3,376.9 3,222.9 869.9 1,335.1

Return on assets (%) 2017 0.97 0.83 1.04 1.05 1.04 0.89 0.85 1.00 1.00 0.77 1.12 1.36

 2015 1.04 0.84 1.07 1.10 1.02 1.05 0.87 1.03 0.96 1.16 1.09 1.31

 2013 1.07 0.70 0.91 1.16 1.06 1.08 0.87 0.98 0.95 1.24 1.09 1.55

Net charge-offs to loans & leases (%) 2017 0.50 0.21 0.15 0.22 0.71 0.47 0.58 0.61 0.27 0.51 0.28 0.67

 2015 0.44 0.19 0.16 0.21 0.56 0.48 0.48 0.50 0.27 0.52 0.24 0.52

 2013 0.69 0.35 0.36 0.41 0.90 0.68 0.92 0.66 0.49 0.87 0.32 0.57

Noncurrent assets plus 

OREO to assets (%) 2017 0.72 1.01 0.83 0.66 0.70 0.73 0.65 0.83 0.64 0.86 0.81 0.45

 2015 0.97 1.25 1.12 0.93 0.75 1.09 0.75 1.15 0.94 1.19 1.04 0.53

 2013 1.63 1.75 1.81 1.89 0.99 1.97 1.12 2.23 1.47 1.99 1.58 0.91

Equity capital ratio (%) 2017 11.22 13.01 11.29 11.82 12.13 10.47 12.34 12.06 10.42 9.99 11.49 11.58

 2015 11.24 12.55 11.25 11.69 12.02 10.60 11.78 12.22 10.50 10.22 11.04 12.03

 2013 11.15 11.68 10.78 11.79 12.32 10.28 12.02 12.19 9.66 10.42 10.87 12.65

* See Table V-A (page 11) for explanations.
2 0 1 9  •  Volume 1 3 • Number 1

8 FDIC QUARTERLY

TABLE IV-A. Fourth Quarter 2018, All FDIC-Insured Institutions

Asset Concentration Groups*

FOURTH 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 5,406 12 5 1,346 2,866 401 69 226 432 49

Commercial banks 4,715 11 5 1,333 2,572 109 51 203 390 41

Savings institutions 691 1 0 13 294 292 18 23 42 8

Total assets (in billions) $17,943.1 $651.7 $4,285.8 $286.7 $6,374.0 $346.0 $218.3 $36.4 $76.3 $5,667.9

Commercial banks 16,728.2 559.9 4,285.8 281.3 5,893.7 103.3 113.9 31.9 67.2 5,391.1

Savings institutions 1,214.9 91.8 0.0 5.5 480.2 242.7 104.4 4.5 9.0 276.8

Total deposits (in billions) 13,866.3 388.4 3,117.1 237.9 4,999.6 272.6 179.5 28.9 64.2 4,578.1

Commercial banks 12,898.5 321.6 3,117.1 234.8 4,639.4 84.0 92.4 25.8 57.1 4,326.3

Savings institutions 967.7 66.7 0.0 3.2 360.2 188.6 87.1 3.0 7.1 251.8

Bank net income (in millions) 59,062 5,422 10,904 873 19,821 911 710 382 212 19,827

Commercial banks 55,124 4,647 10,904 842 18,716 338 506 192 193 18,786

Savings institutions 3,937 775 0 31 1,105 573 204 190 19 1,040

Performance Ratios (annualized, %)

Yield on earning assets 4.40 12.96 3.59 4.72 4.50 3.80 5.26 3.34 4.42 3.86

Cost of funding earning assets 0.91 2.18 0.96 0.84 0.88 0.83 0.92 0.49 0.62 0.78

Net interest margin 3.48 10.77 2.62 3.88 3.62 2.97 4.34 2.85 3.80 3.08

Noninterest income to assets 1.45 3.88 1.70 0.64 1.05 1.27 1.15 9.57 0.89 1.43

Noninterest expense to assets 2.65 6.60 2.47 2.66 2.61 2.71 2.99 6.76 3.02 2.34

Loan and lease loss provision to assets 0.32 3.50 0.22 0.19 0.18 0.03 0.61 0.14 0.15 0.19

Net operating income to assets 1.33 3.37 1.02 1.24 1.27 1.06 1.33 4.33 1.13 1.41

Pretax return on assets 1.62 3.79 1.33 1.39 1.53 1.35 1.71 4.92 1.24 1.70

Return on assets 1.33 3.36 1.02 1.23 1.26 1.07 1.32 3.97 1.12 1.41

Return on equity 11.78 21.97 10.30 10.88 10.53 9.49 12.47 24.76 9.12 12.76

Net charge-offs to loans and leases 0.50 3.85 0.49 0.19 0.21 0.06 0.80 0.24 0.22 0.39

Loan and lease loss provision to 

net charge-offs 111.40 112.44 118.21 137.76 119.64 88.33 107.59 191.32 114.59 97.03

Efficiency ratio 57.09 47.03 61.04 62.24 59.52 65.90 55.05 55.46 68.07 54.44

% of unprofitable institutions 6.55 0.00 0.00 7.88 4.61 12.47 11.59 11.95 6.71 4.08

% of institutions with earnings gains 73.57 91.67 100.00 65.30 78.47 69.83 69.57 68.58 72.45 75.51

Structural Changes

New reporters 2 0 0 0 0 0 0 2 0 0

Institutions absorbed by mergers 70 0 0 16 51 0 1 0 2 0

Failed institutions 0 0 0 0 0 0 0 0 0 0

PRIOR FOURTH QUARTERS

(The way it was...)

Return on assets (%) 2017 0.58 -0.04 -0.43 0.48 0.90 0.65 0.69 2.86 0.78 1.04

 2015 1.02 2.66 0.83 1.12 0.90 0.89 0.81 3.43 2.14 1.12

 2013 1.09 3.65 0.92 1.08 0.96 0.96 0.91 2.18 0.76 1.04

Net charge-offs to loans & leases (%) 2017 0.55 4.18 0.56 0.24 0.23 0.06 0.62 0.36 0.18 0.51

 2015 0.49 3.01 0.68 0.17 0.24 0.10 0.71 0.32 0.21 0.44

 2013 0.61 3.09 0.81 0.20 0.38 0.28 0.88 0.66 0.37 0.40

* See Table V-A (page 10) for explanations.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 9

TABLE IV-A. Fourth Quarter 2018, All FDIC-Insured Institutions 

Asset Size Distribution Geographic Regions*

FOURTH QUARTER

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to $10 

Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion

New 

York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting 5,406 1,278 3,353 638 128 9 659 626 1,163 1,379 1,182 397

Commercial banks 4,715 1,133 2,941 518 114 9 341 572 999 1,333 1,109 361

Savings institutions 691 145 412 120 14 0 318 54 164 46 73 36

Total assets (in billions) $17,943.1 $75.8 $1,108.6 $1,734.9 $6,202.4 $8,821.4 $3,362.0 $3,677.0 $4,042.6 $3,670.8 $1,133.1 $2,057.7

Commercial banks 16,728.2 67.4 954.1 1,386.1 5,499.3 8,821.4 2,915.6 3,573.3 3,942.9 3,627.2 994.1 1,675.1

Savings institutions 1,214.9 8.5 154.5 348.8 703.1 0.0 446.4 103.7 99.7 43.5 138.9 382.6

Total deposits (in billions) 13,866.3 63.0 924.2 1,389.1 4,737.8 6,752.3 2,544.4 2,934.2 2,993.7 2,841.7 922.5 1,629.9

Commercial banks 12,898.5 56.6 802.3 1,121.2 4,166.1 6,752.3 2,205.3 2,852.3 2,923.9 2,808.2 812.4 1,296.4

Savings institutions 967.7 6.3 121.9 267.9 571.7 0.0 339.1 82.0 69.8 33.5 110.0 333.4

Bank net income (in millions) 59,062 166 3,438 5,586 22,863 27,010 10,325 13,315 11,980 10,604 3,756 9,082

Commercial banks 55,124 148 2,953 4,726 20,288 27,010 9,361 13,091 11,566 10,493 3,444 7,169

Savings institutions 3,937 18 484 860 2,574 0 964 224 413 111 312 1,913

Performance Ratios (annualized, %)

Yield on earning assets 4.40 4.60 4.71 4.70 4.99 3.87 4.60 4.43 3.67 4.42 4.74 5.15

Cost of funding earning assets 0.91 0.67 0.79 0.88 1.03 0.86 1.12 0.80 0.82 0.96 0.76 0.96

Net interest margin 3.48 3.93 3.92 3.82 3.96 3.02 3.48 3.63 2.85 3.46 3.98 4.19

Noninterest income to assets 1.45 1.35 1.18 1.08 1.49 1.53 1.40 1.43 1.75 1.13 1.16 1.69

Noninterest expense to assets 2.65 3.81 3.22 2.83 2.74 2.48 2.64 2.60 2.63 2.58 3.01 2.77

Loan and lease loss provision to assets 0.32 0.15 0.16 0.17 0.52 0.22 0.40 0.34 0.16 0.27 0.21 0.57

Net operating income to assets 1.33 0.89 1.27 1.32 1.51 1.23 1.25 1.46 1.20 1.16 1.37 1.81

Pretax return on assets 1.62 1.01 1.43 1.59 1.82 1.52 1.48 1.74 1.50 1.42 1.55 2.28

Return on assets 1.33 0.88 1.25 1.30 1.50 1.23 1.25 1.45 1.19 1.16 1.34 1.80

Return on equity 11.78 6.51 10.90 10.96 12.31 11.72 9.88 12.10 11.51 11.36 11.38 16.11

Net charge-offs to loans and leases 0.50 0.24 0.18 0.21 0.73 0.44 0.58 0.58 0.24 0.51 0.30 0.78

Loan and lease loss provision to 

net charge-offs 111.40 104.64 124.68 110.90 114.69 105.53 117.84 103.04 132.26 98.87 108.04 117.68

Efficiency ratio 57.09 76.33 66.37 60.89 53.06 58.13 57.61 54.93 60.69 59.35 61.87 48.81

% of unprofitable institutions 6.55 15.81 4.21 1.72 0.00 0.00 5.16 7.83 6.36 7.11 6.77 4.79

% of institutions with earnings gains 73.57 62.52 75.51 82.76 85.94 88.89 84.83 78.59 71.71 66.86 71.40 82.12

Structural Changes

New reporters 2 2 0 0 0 0 1 1 0 0 0 0

Institutions absorbed by mergers 70 22 43 5 0 0 11 11 13 16 11 8

Failed institutions 0 0 0 0 0 0 0 0 0 0 0 0

PRIOR FOURTH QUARTERS

(The way it was...)

Return on assets (%) 2017 0.58 0.59 0.85 0.73 0.78 0.40 0.59 0.69 0.83 -0.13 0.89 1.10

 2015 1.02 0.75 1.19 1.03 0.99 1.02 0.77 1.02 1.02 1.09 0.97 1.43

 2013 1.09 0.58 0.88 1.06 1.17 1.08 1.04 0.86 1.06 1.20 0.99 1.55

Net charge-offs to loans & leases (%) 2017 0.55 0.29 0.23 0.29 0.76 0.51 0.64 0.69 0.26 0.56 0.33 0.75

 2015 0.49 0.31 0.22 0.30 0.59 0.54 0.53 0.54 0.28 0.59 0.35 0.62

 2013 0.61 0.44 0.41 0.37 0.83 0.55 0.80 0.59 0.46 0.73 0.31 0.57

* See Table V-A (page 11) for explanations.
2 0 1 9  •  Volume 1 3 • Number 1

10 FDIC QUARTERLY

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

Asset Concentration Groups*

December 31, 2018 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 0.61 1.02 0.73 0.70 0.44 0.81 0.54 1.48 1.25 0.88

Construction and development 0.35 12.26 0.08 0.53 0.31 0.82 0.53 0.80 1.04 0.49

Nonfarm nonresidential 0.25 0.00 0.28 0.55 0.24 0.33 0.68 1.17 0.75 0.22

Multifamily residential real estate 0.11 0.00 0.04 0.29 0.09 0.40 0.00 0.98 0.58 0.26

Home equity loans 0.66 0.00 1.18 0.36 0.52 0.48 0.44 0.66 1.12 0.72

Other 1-4 family residential 1.00 0.21 1.00 1.16 0.82 0.90 0.53 1.95 1.54 1.25

Commercial and industrial loans 0.28 0.99 0.21 0.88 0.27 0.79 0.24 1.05 1.12 0.25

Loans to individuals 1.54 1.59 1.14 1.30 1.54 1.19 0.86 1.55 1.83 1.89

Credit card loans 1.39 1.60 1.13 1.49 1.37 0.82 0.81 2.60 2.36 1.22

Other loans to individuals 1.70 1.37 1.14 1.28 1.56 1.22 0.87 1.38 1.81 2.30

All other loans and leases (including farm) 0.26 0.68 0.20 0.68 0.20 0.97 0.22 0.61 0.62 0.28

Total loans and leases 0.65 1.53 0.55 0.73 0.47 0.83 0.75 1.39 1.25 0.79

Percent of Loans Noncurrent**

All real estate loans 1.32 2.12 1.70 1.02 0.82 2.20 1.41 1.48 1.07 2.22

Construction and development 0.44 0.15 1.08 0.47 0.43 0.31 0.79 0.65 0.96 0.31

Nonfarm nonresidential 0.57 50.24 0.70 0.85 0.54 0.41 1.29 1.29 1.17 0.63

Multifamily residential real estate 0.15 0.00 0.07 0.45 0.14 1.11 0.80 1.98 0.82 0.19

Home equity loans 2.24 0.00 3.91 0.39 1.19 1.03 1.79 1.48 0.45 3.53

Other 1-4 family residential 2.06 0.62 2.15 0.84 1.38 2.59 1.40 1.69 1.11 2.90

Commercial and industrial loans 0.68 0.68 0.64 1.31 0.80 1.07 0.42 1.03 0.96 0.49

Loans to individuals 1.03 1.61 0.94 0.50 0.90 0.45 0.50 0.67 0.72 0.74

Credit card loans 1.44 1.66 1.20 0.55 1.23 0.49 1.27 1.85 0.98 1.20

Other loans to individuals 0.59 0.59 0.32 0.50 0.87 0.45 0.31 0.47 0.71 0.45

All other loans and leases (including farm) 0.22 0.38 0.08 1.06 0.32 0.94 0.17 0.78 0.67 0.19

Total loans and leases 0.99 1.54 0.93 1.04 0.78 2.07 0.68 1.28 1.00 1.17

Percent of Loans Charged-Off (net, YTD)

All real estate loans 0.01 0.09 -0.04 0.04 0.02 -0.01 -0.02 1.03 0.06 0.00

Construction and development -0.02 0.02 0.01 -0.02 -0.02 -0.03 -0.05 0.01 0.15 -0.04

Nonfarm nonresidential 0.03 0.00 0.00 0.05 0.03 -0.02 0.06 0.29 0.04 0.02

Multifamily residential real estate 0.00 0.00 0.00 0.00 0.00 -0.01 -0.01 0.01 0.03 -0.01

Home equity loans 0.03 53.58 0.04 -0.13 0.05 -0.34 -0.09 1.57 0.06 0.02

Other 1-4 family residential 0.00 0.02 -0.07 0.04 0.02 0.01 -0.02 1.64 0.06 0.00

Commercial and industrial loans 0.28 2.27 0.21 0.35 0.29 0.06 0.63 0.09 0.53 0.17

Loans to individuals 2.35 4.04 2.60 0.65 1.10 1.10 1.02 4.09 0.72 1.80

Credit card loans 3.75 4.11 3.44 2.93 4.05 2.54 2.75 10.92 1.79 3.24

Other loans to individuals 0.89 2.50 0.77 0.44 0.83 0.98 0.59 3.38 0.68 0.95

All other loans and leases (including farm) 0.12 0.78 0.04 0.27 0.15 0.26 0.06 0.96 0.23 0.15

Total loans and leases 0.48 3.87 0.50 0.15 0.18 0.02 0.76 1.42 0.17 0.37

Loans Outstanding (in billions)

All real estate loans $4,887.7 $0.9 $578.2 $122.8 $2,771.2 $186.0 $32.5 $6.9 $33.0 $1,156.2

Construction and development 349.9 0.1 16.6 7.3 266.1 5.4 0.6 0.6 2.1 51.1

Nonfarm nonresidential 1,445.5 0.0 55.1 33.8 1,077.1 16.6 2.3 2.3 7.4 250.9

Multifamily residential real estate 430.4 0.0 79.8 4.1 296.3 4.6 0.3 0.2 0.9 44.3

Home equity loans 375.7 0.0 45.5 2.4 195.9 10.3 3.6 0.2 1.2 116.5

Other 1-4 family residential 2,119.4 0.8 333.6 28.8 887.0 148.1 25.7 3.2 18.3 673.9

Commercial and industrial loans 2,164.7 44.2 356.7 23.0 1,035.8 5.1 6.9 1.3 4.0 687.7

Loans to individuals 1,742.9 489.9 284.3 6.6 361.5 4.6 110.5 1.4 4.2 480.0

Credit card loans 903.5 467.6 199.1 0.6 31.0 0.3 21.7 0.2 0.1 182.9

Other loans to individuals 839.4 22.4 85.1 6.0 330.5 4.3 88.8 1.2 4.0 297.1

All other loans and leases (including farm) 1,359.4 0.9 403.2 44.8 355.7 10.0 3.7 0.5 2.8 537.8

Total loans and leases (plus unearned income) 10,154.7 535.9 1,622.4 197.2 4,524.3 205.6 153.6 10.1 43.9 2,861.7

Memo: Other Real Estate Owned (in millions)

All other real estate owned 6,690.6 0.2 439.4 289.4 4,343.7 172.3 25.8 29.3 108.3 1,282.2

Construction and development 1,757.1 0.0 5.2 63.7 1,492.4 41.4 4.7 9.5 18.5 121.6

Nonfarm nonresidential 1,987.0 0.0 55.0 94.7 1,468.1 18.6 4.9 11.5 40.0 294.3

Multifamily residential real estate 80.3 0.0 0.0 7.8 70.0 0.6 0.1 0.0 0.6 1.2

1-4 family residential 2,646.8 0.2 349.2 50.9 1,210.4 105.9 16.0 7.7 43.5 862.9

Farmland 188.5 0.0 0.0 72.4 102.8 5.8 0.0 0.6 5.7 1.2

* 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.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 11

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

Asset Size Distribution Geographic Regions*

December 31, 2018 All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to 

$10 Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion

New 

York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate 0.61 1.26 0.63 0.36 0.53 0.81 0.49 0.70 0.65 0.81 0.65 0.28

Construction and development 0.35 0.80 0.49 0.30 0.37 0.22 0.43 0.39 0.30 0.25 0.31 0.40

Nonfarm nonresidential 0.25 0.96 0.39 0.25 0.21 0.20 0.29 0.19 0.30 0.20 0.32 0.17

Multifamily residential real estate 0.11 1.06 0.21 0.10 0.08 0.11 0.09 0.22 0.10 0.17 0.17 0.04

Home equity loans 0.66 0.78 0.54 0.42 0.55 0.83 0.52 0.71 0.80 0.72 0.55 0.33

Other 1-4 family residential 1.00 1.70 0.99 0.60 0.93 1.17 0.83 1.13 0.95 1.32 1.37 0.40

Commercial and industrial loans 0.28 1.24 0.65 0.41 0.25 0.23 0.25 0.27 0.23 0.26 0.40 0.37

Loans to individuals 1.54 1.96 1.63 1.43 1.45 1.65 1.23 2.18 1.08 1.40 0.99 1.66

Credit card loans 1.39 3.99 2.38 2.98 1.52 1.17 1.22 1.60 1.17 1.21 0.79 1.79

Other loans to individuals 1.70 1.93 1.58 1.11 1.37 2.15 1.24 2.78 1.04 1.73 1.08 1.55

All other loans and leases (including farm) 0.26 0.62 0.56 0.34 0.17 0.27 0.33 0.27 0.25 0.20 0.27 0.26

Total loans and leases 0.65 1.21 0.67 0.43 0.64 0.71 0.58 0.83 0.54 0.67 0.60 0.64

Percent of Loans Noncurrent** 

All real estate loans 1.32 1.19 0.78 0.70 1.09 2.10 1.11 1.53 1.48 1.92 1.09 0.42

Construction and development 0.44 0.82 0.76 0.49 0.27 0.47 0.51 0.48 0.66 0.36 0.35 0.26

Nonfarm nonresidential 0.57 1.29 0.71 0.62 0.47 0.60 0.64 0.54 0.70 0.55 0.62 0.36

Multifamily residential real estate 0.15 0.40 0.34 0.14 0.15 0.11 0.15 0.30 0.14 0.13 0.19 0.06

Home equity loans 2.24 0.51 0.51 0.58 1.18 3.72 2.33 2.55 2.15 2.92 1.03 0.53

Other 1-4 family residential 2.06 1.25 0.86 1.02 1.93 2.76 1.75 2.26 2.06 3.00 2.25 0.51

Commercial and industrial loans 0.68 1.75 0.94 1.15 0.74 0.51 0.72 0.52 0.59 0.68 0.99 0.94

Loans to individuals 1.03 0.96 0.70 0.94 1.21 0.85 1.07 1.26 0.56 1.00 0.87 1.11

Credit card loans 1.44 2.29 1.75 3.01 1.59 1.19 1.35 1.52 1.15 1.27 1.24 1.86

Other loans to individuals 0.59 0.94 0.63 0.53 0.70 0.48 0.62 0.98 0.29 0.52 0.70 0.40

All other loans and leases (including farm) 0.22 1.07 0.77 0.41 0.30 0.13 0.25 0.19 0.14 0.27 0.34 0.30

Total loans and leases 0.99 1.22 0.80 0.77 0.95 1.11 0.94 1.05 0.95 1.19 1.00 0.68

Percent of Loans Charged-Off (net, YTD) 

All real estate loans 0.01 0.05 0.05 0.02 0.03 -0.02 0.04 0.02 -0.01 0.00 0.03 0.00

Construction and development -0.02 -0.02 0.02 0.00 -0.04 -0.04 -0.02 0.01 -0.02 -0.03 0.03 -0.15

Nonfarm nonresidential 0.03 0.05 0.04 0.03 0.05 0.00 0.05 0.04 0.04 0.01 0.04 0.01

Multifamily residential real estate 0.00 -0.06 -0.01 -0.01 0.00 0.00 0.00 0.00 -0.01 0.00 0.01 -0.01

Home equity loans 0.03 0.03 0.07 0.02 0.02 0.04 0.10 0.03 0.02 0.00 -0.01 -0.03

Other 1-4 family residential 0.00 0.06 0.07 0.03 0.02 -0.04 0.04 0.01 -0.04 0.00 0.02 0.01

Commercial and industrial loans 0.28 0.57 0.35 0.39 0.39 0.18 0.29 0.27 0.23 0.20 0.41 0.48

Loans to individuals 2.35 0.79 1.33 1.99 2.61 2.13 2.57 2.35 1.45 2.71 1.43 2.57

Credit card loans 3.75 11.90 7.26 7.60 3.96 3.34 3.51 3.83 3.54 3.56 2.62 4.53

Other loans to individuals 0.89 0.64 0.92 0.85 0.86 0.92 1.10 0.85 0.57 1.29 0.90 0.77

All other loans and leases (including farm) 0.12 0.24 0.26 0.19 0.10 0.12 0.13 0.14 0.10 0.14 0.16 0.11

Total loans and leases 0.48 0.18 0.15 0.19 0.70 0.43 0.59 0.55 0.23 0.50 0.24 0.73

Loans Outstanding (in billions) 

All real estate loans $4,887.7 $31.2 $591.9 $917.4 $1,707.8 $1,639.5 $1,010.4 $911.5 $1,008.1 $867.0 $483.2 $607.6

Construction and development 349.9 1.8 56.3 87.1 137.3 67.2 66.3 58.0 58.5 51.6 74.8 40.7

Nonfarm nonresidential 1,445.5 7.4 224.3 371.7 555.9 286.2 332.4 282.5 219.9 196.3 203.1 211.3

Multifamily residential real estate 430.4 0.8 32.7 102.7 171.8 122.4 152.9 43.6 110.5 37.0 21.6 64.8

Home equity loans 375.7 0.7 22.0 41.8 139.1 172.1 76.3 92.6 92.7 65.7 20.7 27.6

Other 1-4 family residential 2,119.4 14.4 204.4 289.9 685.2 925.4 377.6 420.2 502.1 424.4 144.3 250.7

Commercial and industrial loans 2,164.7 5.2 97.2 193.1 829.8 1,039.4 339.4 518.3 488.0 429.7 150.0 239.3

Loans to individuals 1,742.9 2.9 31.7 68.5 891.1 748.8 385.2 420.9 234.4 317.6 67.1 317.6

Credit card loans 903.5 0.0 2.0 11.4 504.7 385.3 235.5 214.4 73.6 203.9 20.7 155.4

Other loans to individuals 839.4 2.8 29.6 57.0 386.3 363.5 149.7 206.5 160.8 113.8 46.4 162.2

All other loans and leases (including farm) 1,359.4 6.2 49.2 65.2 418.9 819.8 206.0 284.7 329.8 373.4 55.0 110.6

Total loans and leases 

(plus unearned income) 10,154.7 45.6 770.0 1,244.1 3,847.5 4,247.5 1,941.0 2,135.3 2,060.3 1,987.8 755.2 1,275.1

Memo: Other Real Estate Owned 

(in millions) 

All other real estate owned 6,690.6 175.6 1,884.0 1,441.4 1,681.5 1,508.2 1,228.3 1,510.2 1,280.0 1,188.4 1,121.5 362.3

Construction and development 1,757.1 42.6 806.3 477.0 330.2 100.9 218.9 482.8 216.1 291.1 421.6 126.6

Nonfarm nonresidential 1,987.0 48.9 612.1 534.6 472.3 319.1 351.1 430.7 370.9 323.9 415.9 94.6

Multifamily residential real estate 80.3 4.3 43.6 23.9 3.4 5.0 16.3 20.9 14.3 15.6 8.2 5.0

1-4 family residential 2,646.8 55.1 340.5 340.9 859.1 1,051.2 630.1 564.5 656.8 436.1 235.1 124.2

Farmland 188.5 24.7 81.5 64.9 16.4 1.0 11.9 11.3 20.9 91.7 40.8 11.9

* Regions:

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

U.S. Virgin Islands

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

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

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

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

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

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.
2 0 1 9  •  Volume 1 3 • Number 1

12 FDIC QUARTERLY

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

4th 

Quarter 

2018

3rd 

Quarter 

2018

2nd

Quarter 

2018

1st

Quarter 

2018

4th 

Quarter 

2017

% 

Change 

17Q4-

18Q4

Asset Size Distribution

(dollar figures in millions;

notional amounts unless otherwise indicated)

Less 

Than 

$100 

Million

$100 

Million 

to $1 

Billion

$1 

Billion 

to $10 

Billion

$10 

Billion 

to $250 

Billion

Greater 

Than 

$250 

Billion

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives 1,311 1,347 1,362 1,361 1,367 -4.1 34 724 424 120 9

Total assets of institutions reporting derivatives $16,296,689 $16,058,057 $15,950,442 $15,950,129 $15,815,207 3.0 $2,427 $319,519 $1,296,780 $5,856,581 $8,821,382

Total deposits of institutions reporting derivatives 12,555,823 12,291,564 12,206,863 12,264,978 12,133,179 3.5 2,019 264,388 1,032,334 4,504,801 6,752,281

Total derivatives 178,089,249 209,754,237 209,828,279 205,986,576 173,484,033 2.7 124 20,871 129,525 50,356,371 127,582,358

Derivative Contracts by Underlying Risk Exposure 

Interest rate 128,174,999 156,781,051 157,435,136 155,478,401 130,423,142 -1.7 122 20,733 123,392 41,511,649 86,519,102

Foreign exchange* 40,948,207 43,473,496 43,279,998 41,064,224 34,422,180 19.0 0 1 4,504 8,286,031 32,657,671

Equity 3,374,363 3,644,559 3,420,624 3,466,899 3,079,607 9.6 0 0 160 144,522 3,229,681

Commodity & other (excluding credit derivatives) 1,314,571 1,510,680 1,510,765 1,631,020 1,372,891 -4.2 0 0 28 86,828 1,227,715

Credit 4,276,947 4,341,695 4,178,619 4,345,494 4,186,122 2.2 0 5 1,412 327,341 3,948,188

Total 178,089,087 209,751,481 209,825,142 205,986,038 173,483,942 2.7 122 20,739 129,496 50,356,371 127,582,358

Derivative Contracts by Transaction Type 

Swaps 97,923,336 104,786,177 107,958,507 105,094,254 94,523,939 3.6 18 8,355 85,125 26,384,850 71,444,988

Futures & forwards 36,143,798 47,051,282 46,023,905 45,497,597 34,407,162 5.0 9 1,686 24,176 10,389,411 25,728,516

Purchased options 18,707,980 25,031,774 23,883,350 23,840,759 19,163,376 -2.4 1 509 10,129 6,296,477 12,400,865

Written options 19,300,817 25,769,185 25,142,041 24,973,515 19,677,317 -1.9 3 1,452 8,369 6,676,396 12,614,597

Total 172,075,932 202,638,418 203,007,802 199,406,126 167,771,793 2.6 31 12,003 127,800 49,747,134 122,188,965

Fair Value of Derivative Contracts 

Interest rate contracts 47,241 53,589 49,616 51,495 49,031 -3.7 0 88 771 4,705 41,677

Foreign exchange contracts 11,282 25,827 23,843 27,846 10,372 8.8 0 0 9 2,015 9,258

Equity contracts 6,407 1,975 5,003 6,582 -7,514 N/M 0 0 1 -144 6,551

Commodity & other (excluding credit derivatives) -1,873 2,948 1,181 -867 -829 N/M 0 0 0 357 -2,230

Credit derivatives as guarantor** 6,606 26,237 23,965 33,701 33,170 -80.1 0 0 0 -740 7,347

Credit derivatives as beneficiary** -6,765 -26,912 -24,348 -34,976 -34,547 N/M 0 0 0 527 -7,291

Derivative Contracts by Maturity*** 

Interest rate contracts < 1 year 71,493,383 93,168,891 91,960,389 95,441,266 72,590,571 -1.5 26 3,948 24,584 19,559,340 51,905,486

 1-5 years 36,682,642 42,735,090 42,279,244 40,334,591 36,154,566 1.5 10 4,202 33,695 8,785,733 27,859,002

 > 5 years 23,245,983 24,228,362 24,373,830 23,687,654 23,565,880 -1.4 15 7,748 53,620 6,749,683 16,434,917

Foreign exchange and gold contracts < 1 year 28,891,823 29,674,897 31,341,537 29,696,500 24,379,652 18.5 0 1 2,637 5,717,756 23,171,429

 1-5 years 4,218,682 4,928,405 4,906,415 5,021,957 4,805,216 -12.2 0 0 961 781,270 3,436,451

 > 5 years 2,095,962 2,470,383 2,472,893 2,630,013 2,525,329 -17.0 0 0 110 589,988 1,505,864

Equity contracts < 1 year 2,448,707 2,825,222 2,679,109 2,747,190 2,295,686 6.7 0 0 28 58,264 2,390,415

 1-5 years 863,793 963,096 867,817 843,259 732,909 17.9 0 0 48 48,514 815,231

 > 5 years 139,158 135,954 123,737 139,432 113,150 23.0 0 0 2 8,961 130,196

 Commodity & other contracts (including credit 

derivatives, excluding gold contracts) < 1 year 1,745,343 1,896,551 1,994,605 2,314,371 2,172,996 -19.7 0 5 38 69,705 1,675,595

 1-5 years 3,105,739 3,017,006 3,019,612 2,862,714 2,814,096 10.4 0 5 414 199,356 2,905,963

 > 5 years 298,068 537,194 309,072 527,870 312,753 -4.7 0 22 512 36,498 261,036

Risk-Based Capital: Credit Equivalent Amount 

Total current exposure to tier 1 capital (%) 22.7 23.9 24.5 24.8 23.3 0.1 0.5 1.1 13.1 35.1

Total potential future exposure to tier 1 capital (%) 36.0 40.9 39.5 41.8 38.6 0.1 0.4 0.8 17.9 57.9

Total exposure (credit equivalent amount) 

to tier 1 capital (%) 58.8 64.8 64.0 66.6 61.9 0.2 0.9 1.9 31.0 93.1

Credit losses on derivatives  12.0 12.0 3.0 -1.0 11.0 9.1 0.0 0.0 2.0 -1.0 11.0

HELD FOR TRADING 

Number of institutions reporting derivatives 192 197 197 199 201 -4.5 2 29 88 65 8

Total assets of institutions reporting derivatives 12,768,651 12,611,908 12,484,266 12,578,335 12,481,545 2.3 171 14,752 304,578 3,930,437 8,518,713

Total deposits of institutions reporting derivatives 9,799,163 9,613,503 9,518,156 9,638,443 9,555,469 2.6 148 12,214 241,382 3,052,735 6,492,683

Derivative Contracts by Underlying Risk Exposure 

Interest rate 126,215,235 154,523,852 155,241,947 153,262,676 128,177,117 -1.5 2 645 34,870 40,951,704 85,228,014

Foreign exchange 38,768,802 40,241,704 40,144,539 38,353,254 32,402,215 19.6 0 0 3,564 7,974,672 30,790,566

Equity 3,359,405 3,628,434 3,402,588 3,450,109 3,063,576 9.7 0 0 10 134,238 3,225,157

Commodity & other 1,285,123 1,481,650 1,481,752 1,602,648 1,343,837 -4.4 0 0 3 58,861 1,226,259

Total 169,628,565 199,875,639 200,270,826 196,668,687 164,986,745 2.8 2 645 38,447 49,119,475 120,469,996

Trading Revenues: Cash & Derivative Instruments 

Interest rate**  2,306 1,998 587 2,316 2,225 3.6 0 0 2 415 1,890

Foreign exchange** 2,105 3,130 4,569 2,860 1,813 16.1 0 0 5 800 1,300

Equity** -43 1,444 1,727 1,624 1,648 -102.6 0 0 3 -131 85

Commodity & other (including credit derivatives)** -202 487 501 882 145 N/M 0 0 0 -334 132

Total trading revenues** 4,166 7,059 7,385 7,683 5,831 -28.6 0 0 10 749 3,407

Share of Revenue 

Trading revenues to gross revenues (%)** 2.6 4.5 4.8 5.2 4.1 0.0 0.0 0.2 1.6 3.2

Trading revenues to net operating revenues (%)** 10.5 16.7 17.8 20.0 36.0 0.0 0.0 1.1 6.1 12.9

HELD FOR PURPOSES OTHER THAN TRADING 

Number of institutions reporting derivatives 735 750 759 758 783 -6.1 9 217 386 114 9

Total assets of institutions reporting derivatives 15,816,482 15,574,878 15,481,221 15,475,559 15,370,173 2.9 680 108,788 1,217,875 5,667,758 8,821,382

Total deposits of institutions reporting derivatives 12,172,698 11,903,873 11,829,384 11,881,099 11,775,231 3.4 575 90,564 969,664 4,359,614 6,752,281

Derivative Contracts by Underlying Risk Exposure 

Interest rate 1,950,705 2,249,555 2,184,811 2,206,558 2,239,391 -12.9 29 11,356 88,286 559,945 1,291,089

Foreign exchange 452,256 468,068 505,117 485,719 500,573 -9.7 0 1 892 29,463 421,900

Equity 14,959 16,125 18,036 16,790 16,031 -6.7 0 0 150 10,284 4,524

Commodity & other 29,448 29,030 29,012 28,371 29,054 1.4 0 0 24 27,967 1,457

Total notional amount 2,447,367 2,762,779 2,736,976 2,737,439 2,785,049 -12.1 29 11,357 89,352 627,659 1,718,969

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

* Includes spot foreign exchange contracts. All other references to foreign exchange contracts in which notional values or fair values are reported exclude spot foreign exchange contracts.

** Does not include banks filing the FFIEC 051 report form, which was introduced in first quarter 2017.

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

**** Credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and banks filing the FFIEC 041 report form that have $300 million or more in total assets, but is 

not applicaable to banks filing the FFIEC 051 form.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 13

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

Asset Size Distribution

(dollar figures in millions)

4th 

Quarter 

2018

3rd 

Quarter

2018

2nd 

Quarter

2018

1st 

Quarter

2018

4th 

Quarter

2017

% 

Change 

17Q4-

18Q4

Less 

Than 

$100 

Million

$100 

Million 

to $1 

Billion

$1 

Billion 

to $10 

Billion

$10 

Billion 

to $250 

Billion

Greater 

Than 

$250 

Billion

Assets Securitized and Sold with Servicing Retained or with 

Recourse or Other Seller-Provided Credit Enhancements 

Number of institutions reporting securitization activities 64 64 64 65 67 -4.5 0 6 17 34 7

Outstanding Principal Balance by Asset Type 

1-4 family residential loans $520,047 $542,310 $560,132 $571,205 $590,211 -11.9 $0 $1,400 $13,468 $90,974 $414,205

Home equity loans 14 15 16 18 20 -30.0 0 0 0 14 0

Credit card receivables 22 24 26 4,781 4,553 -99.5 0 0 0 0 22

Auto loans 3,710 4,415 4,647 8,221 9,770 -62.0 0 0 0 3,710 0

Other consumer loans 1,738 1,806 1,887 2,914 3,052 -43.1 0 0 0 766 972

Commercial and industrial loans 453 360 271 381 380 19.2 0 0 0 0 453

All other loans, leases, and other assets 71,416 68,646 67,948 62,410 60,869 17.3 0 9 10,123 3,133 58,151

Total securitized and sold 543,560 562,500 581,566 649,931 668,855 -18.7 0 0 0 69,758 473,803

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 1,102 1,228 1,327 1,527 1,716 -35.8 0 0 48 800 254

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

Credit card receivables 0 0 0 392 353 -100.0 0 0 0 0 0

Auto loans 104 114 125 164 147 -29.3 0 0 0 104 0

Other consumer loans 86 85 82 88 86 0.0 0 0 0 0 86

Commercial and industrial loans 0 0 0 0 0 0.0 0 0 0 0 0

All other loans, leases, and other assets 1,208 1,112 1,266 1,194 1,131 6.8 0 0 166 30 1,011

Total credit exposure 2,221 2,301 2,565 3,365 3,431 -35.3 0 0 0 870 1,351

Total unused liquidity commitments provided to institution’s own 

securitizations 213 226 144 143 215 -0.9 0 0 0 34 179

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

1-4 family residential loans 3.6 3.9 3.5 3.2 4.7 0.0 3.3 0.9 2.8 3.8

Home equity loans 8.0 8.9 8.4 9.5 9.7 0.0 0.0 0.0 8.0 0

Credit card receivables 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0

Auto loans 2.6 1.9 1.8 1.6 2.1 0.0 0.0 0.0 2.6 0

Other consumer loans 4.2 4.5 4.7 4.5 4.7 0.0 0.0 0.0 2.8 5.3

Commercial and industrial loans 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0

All other loans, leases, and other assets 0.2 0.2 0.3 0.3 0.5 0.0 0.0 0.6 0.8 0.1

Total loans, leases, and other assets 3.3 3.6 3.2 2.9 4.2 0.0 0.0 0.0 2.5 3.4

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

1-4 family residential loans 1.1 1.1 1.2 1.4 1.6 0.0 1.4 0.8 1.2 1.1

Home equity loans 39.0 40.2 42.6 44.1 45.7 0.0 0.0 0.0 39.0 0

Credit card receivables 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0

Auto loans 0.5 0.4 0.4 0.3 0.4 0.0 0.0 0.0 0.5 0

Other consumer loans 4.3 4.3 6.0 4.3 4.6 0.0 0.0 0.0 2.0 6.1

Commercial and industrial loans 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0

All other loans, leases, and other assets 0.5 0.6 0.7 1.2 1.2 0.0 0.0 1.3 0.2 0.4

Total loans, leases, and other assets 1.0 1.0 1.2 1.4 1.5 0.0 0.0 0.0 0.8 1

Securitized Loans, Leases, and Other Assets Charged-off 

(net, YTD, annualized, %) 

1-4 family residential loans 0.1 0.0 -0.1 -0.1 0.2 0.0 0.0 0.0 0.0 0.1

Home equity loans 18.2 13.9 11.4 4.9 11.7 0.0 0.0 0.0 18.2 0

Credit card receivables 9.1 4.2 3.8 0.3 1.2 0.0 0.0 0.0 0.0 9.1

Auto loans 1.4 1.0 0.6 0.4 1.2 0.0 0.0 0.0 1.4 0

Other consumer loans 1.0 0.8 0.6 0.3 1.5 0.0 0.0 0.0 0.8 1.2

Commercial and industrial loans 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0

All other loans, leases, and other assets 1.1 0.4 0.3 0.0 1.7 0.0 0.0 0.3 0.4 1.3

Total loans, leases, and other assets 0.2 0.1 0.0 -0.1 0.4 0.0 0.0 0.0 0.1 0.2

Seller’s Interests in Institution's Own Securitizations – Carried as Loans 

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

Credit card receivables 0 0 0 1,730 2,460 -100.0 0 0 0 0 0

Commercial and industrial loans 427 361 306 426 463 -7.8 0 0 0 0 427

Seller’s Interests in Institution's Own Securitizations – Carried as Securities 

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

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

Commercial and industrial loans 0 0 0 0 0 0.0 0 0 0 0 0

Assets Sold with Recourse and Not Securitized 

Number of institutions reporting asset sales 470 476 474 463 509 -7.7 13 191 202 56 8

Outstanding Principal Balance by Asset Type 

1-4 family residential loans 26,279 25,814 24,721 24,532 180,694 -85.5 133 5,007 12,470 6,848 1,821

All other loans, leases, and other assets 116,464 112,296 109,138 106,242 105,171 10.7 0 20 175 38,134 78,135

Total sold and not securitized 142,743 138,110 133,859 130,775 285,865 -50.1 133 5,028 12,645 44,982 79,956

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 7,658 7,929 7,626 7,987 162,172 -95.3 8 523 3,712 2,610 804

All other loans, leases, and other assets 32,793 31,286 30,545 29,602 29,273 12.0 0 20 44 11,072 21,656

Total credit exposure 40,450 39,215 38,171 37,589 191,445 -78.9 8 544 3,756 13,682 22,460

Support for Securitization Facilities Sponsored by Other Institutions 

Number of institutions reporting securitization facilities sponsored by others 0 0 0 0 0 0.0 0 0 0 0 0

Total credit exposure 23,013 24,792 26,570 29,676 32,237 -28.6 0 0 0 1,389 21,624

Total unused liquidity commitments 604 1,313 1,031 1,148 1,259 -52.0 0 0 0 295 309

Other

Assets serviced for others** 6,060,797 5,984,061 5,918,788 6,034,597 5,996,478 1.1 4,175 156,474 302,651 1,531,179 4,066,318

Asset-backed commercial paper conduits 

Credit exposure to conduits sponsored by institutions and others 17,366 16,898 16,069 15,554 16,909 2.7 0 0 0 0 17,366

Unused liquidity commitments to conduits sponsored by institutions 

 and others 31,491 30,447 30,593 29,497 26,928 16.9 0 0 0 2,537 28,954

Net servicing income (for the quarter) 1,504 2,740 2,812 3,655 2,355 -36.1 7 221 151 825 300

Net securitization income (for the quarter) 65 64 -49 151 131 -50.4 0 1 2 3 59

Total credit exposure to Tier 1 capital (%)*** 3.50 3.60 3.70 4.30 13.90 0.00 0.00 0.00 2.30 6.10

* Does not include banks filing the FFIEC 051 report form, which was introduced in first quarter 2017.

** 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.
2 0 1 9  •  Volume 1 3 • Number 1

14 FDIC QUARTERLY

TABLE VIII-A. Trust Services (All FDIC-Insured Institutions)

All Insured Institutions Asset Size Distribution

(dollar figures in millions)

Dec 31

2018

Dec 31

2017

Dec 31

2016

Dec 31

2015

% Change 

2017-2018

Less 

Than $100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to 

$10 Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion

Number of institutions reporting 5,406 5,670 5,913 6,182 -4.7 1,278 3,353 638 128 9

Number of institutions with fiduciary powers 1,685 1,745 1,808 1,857 -3.4 196 1,043 347 90 9

Commercial banks 1,561 1,617 1,674 1,721 -3.5 181 985 302 84 9

Savings institutions 124 128 134 136 -3.1 15 58 45 6 0

Number of institutions exercising fiduciary powers 1,260 1,292 1,345 1,379 -2.5 123 766 281 81 9

Commercial banks 1,162 1,189 1,235 1,271 -2.3 109 720 249 75 9

Savings institutions 98 103 110 108 -4.9 14 46 32 6 0

Number of institutions reporting fiduciary activity 1,196 1,224 1,268 1,298 -2.3 116 718 274 79 9

Commercial banks 1,103 1,127 1,166 1,197 -2.1 102 676 243 73 9

Savings institutions 93 97 102 101 -4.1 14 42 31 6 0

Fiduciary and related assets - managed assets 

Personal trust and agency accounts 630,187 684,836 633,050 632,459 -8.0 17,026 51,153 71,258 255,961 234,788

Noninterest-bearing deposits 8,918 9,124 9,628 10,627 -2.3 18 787 310 470 7,332

Interest-bearing deposits 76,273 70,383 74,420 79,039 8.4 187 3,982 7,788 15,489 48,827

U.S. Treasury and U.S. Government agency obligations 124,665 109,513 105,921 84,517 13.8 2,054 4,836 18,052 46,863 52,858

State, county and municipal obligations 234,996 220,542 201,762 196,308 6.6 5,422 11,671 18,637 91,746 107,520

Money market mutual funds 123,035 99,955 102,669 106,900 23.1 2,802 10,022 13,474 47,165 49,572

Other short-term obligations 135,186 151,815 149,248 162,047 -11.0 61 78 1,051 93,021 40,975

Other notes and bonds 287,074 270,784 243,491 171,842 6.0 9,429 6,907 12,985 184,634 73,118

Common and preferred stocks 2,969,887 3,324,681 2,906,250 2,669,473 -10.7 45,925 168,305 164,829 1,723,904 866,924

Real estate mortgages 2,087 1,884 2,069 1,994 10.8 321 177 432 727 430

Real estate 49,713 47,896 49,073 50,935 3.8 1,019 7,011 6,791 14,792 20,099

Miscellaneous assets 107,446 121,726 114,175 117,442 -11.7 1,575 7,374 13,198 46,733 38,565

Employee benefit and retirement-related trust and 

agency accounts:

Employee benefit - defined contribution 395,295 429,241 397,432 342,688 -7.9 1,374 6,318 13,777 323,584 50,242

Employee benefit - defined benefit 508,367 585,263 646,896 551,396 -13.1 2,904 3,862 13,274 434,152 54,174

Other employee benefit and retirement-related 

 accounts 339,942 373,447 312,538 290,760 -9.0 4,959 52,257 24,955 135,698 122,074

Corporate trust and agency accounts 16,091 19,896 19,809 19,444 -19.1 0 778 6,990 3,978 4,344

Investment management and investment advisory 

agency accounts 1,837,545 1,935,353 1,619,342 1,444,009 -5.1 40,152 95,534 112,078 947,375 642,406

Other fiduciary accounts 391,851 400,267 329,641 370,369 -2.1 2,399 11,246 15,215 164,797 198,194

Total managed fiduciary accounts: 

Assets 4,119,279 4,428,303 3,958,707 3,651,125 -7.0 68,814 221,149 257,548 2,265,546 1,306,222

Number of accounts 1,853,804 1,839,481 1,755,682 1,690,474 0.8 132,409 390,660 310,619 523,194 496,922

Fiduciary and related assets - nonmanaged assets 

Personal trust and agency accounts 301,478 279,563 259,844 275,280 7.8 7,053 20,930 27,208 154,274 92,013

Employee benefit and retirement-related trust and 

agency accounts: 

Employee benefit - defined contribution 2,152,841 2,331,971 2,111,453 2,035,579 -7.7 116,895 40,927 43,355 1,382,421 569,242

Employee benefit - defined benefit 4,432,203 4,659,295 4,187,669 4,169,033 -4.9 13,370 24,264 11,788 3,458,037 924,744

Other employee benefit and retirement-related accounts 1,489,431 1,627,818 1,304,246 1,303,116 -8.5 16,411 18,936 16,726 1,205,157 232,201

Corporate trust and agency accounts 3,338,048 3,350,526 2,593,482 2,657,963 -0.4 12 6,740 301,756 280,662 2,748,878

Other fiduciary accounts 3,471,409 3,655,900 3,249,875 3,035,011 -5.0 6,998 39,115 30,710 1,758,919 1,635,666

Total nonmanaged fiduciary accounts: 

Assets 15,185,410 15,905,073 13,706,569 13,475,981 -4.5 160,738 150,913 431,544 8,239,470 6,202,745

Number of accounts 3,911,491 3,849,691 3,930,084 3,807,875 1.6 1,065,384 342,806 182,371 1,664,437 656,493

Custody and safekeeping accounts: 

Assets 96,313,038 97,546,110 85,353,590 81,322,476 -1.3 323,129 893,906 903,115 31,687,411 62,505,478

Number of accounts 11,689,806 9,270,960 8,567,321 8,289,877 26.1 3,165,993 4,940,179 91,942 2,147,843 1,343,849

Fiduciary and related services income 

Personal trust and agency accounts 4,749 4,661 4,513 4,706 1.9 144 239 511 1,910 1,945

Retirement-related trust and agency accounts: 

Employee benefit - defined contribution 1,372 1,337 1,230 1,200 2.6 22 52 179 638 481

Employee benefit - defined benefit 1,503 1,508 1,415 1,390 -0.3 10 19 30 1,009 434

Other employee benefit and retirement-related accounts 2,117 1,911 1,654 1,519 10.8 57 516 259 739 545

Corporate trust and agency accounts 1,727 1,720 1,684 1,469 0.4 0 14 306 406 1,001

Investment management agency accounts 9,162 8,510 7,769 7,451 7.7 224 734 865 3,294 4,045

Other fiduciary accounts 823 811 764 684 1.5 4 3 7 403 405

Custody and safekeeping accounts 14,919 14,403 13,372 13,358 3.6 16 603 268 5,595 8,436

Other fiduciary and related services income 983 916 841 978 7.3 16 89 121 284 473

Total gross fiduciary and related services income 37,525 35,871 33,405 32,889 4.6 495 2,378 2,605 14,280 17,766

Less: Expenses 35,126 33,144 30,649 30,776 6.0 341 1,813 2,005 15,104 15,863

Less: Net losses from fiduciary and related services 290 283 208 367 2.5 0 3 3 92 193

Plus: Intracompany income credits for fiduciary and 

 related services 9,306 7,539 5,787 4,962 23.4 2 6 340 4,739 4,218

Net fiduciary and related services income 11,179 9,825 8,170 6,573 13.8 154 457 850 3,789 5,929

Collective investment funds and common trust funds 

(market value) 

Domestic equity funds 615,673 718,199 636,516 558,173 -14.3 5,874 219 15,871 458,276 135,432

International/global equity funds 202,917 230,397 186,627 188,974 -11.9 1,686 5,709 3,611 136,355 55,555

Stock/bond blend funds 148,831 141,328 142,755 137,835 5.3 2,292 248 6,053 84,971 55,266

Taxable bond funds 125,119 148,520 149,992 146,148 -15.8 763 1,632 2,375 3,387 116,962

Municipal bond funds 2,004 3,001 3,291 3,924 -33.2 0 0 42 939 1,023

Short-term investments/money market funds 143,955 154,093 161,565 145,387 -6.6 3,239 0 0 82,261 58,455

Specialty/other funds 58,833 56,774 56,067 52,694 3.6 0 282 5,819 2,303 50,430

Total collective investment funds 1,302,766 1,452,312 1,336,812 1,233,135 -10.3 13,911 9,139 35,150 771,443 473,123
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 15

COMMUNITY BANK PERFORMANCE

Community banks are identified based on criteria defined in the FDIC’s Community Banking Study. When comparing 

community bank performance across quarters, prior-quarter dollar amounts are based on community banks designated 

as such in the current quarter, adjusted for mergers. In contrast, prior-quarter performance ratios are based on community 

banks designated during the previous quarter.

Net Income Climbs $2.7 Billion From a Year Earlier on Lower Income Taxes and Higher Net Interest Income

Loan and Lease Balances Grow 6.5 Percent Year Over Year

Net Interest Margin Expands to 3.78 Percent From a Year Earlier

Asset Quality Improves as Noncurrent and Net Charge-Off Rates Decline

Community Banks Report 

$6.8 Billion in Net Income 

During Fourth Quarter

Results from 4,979 FDIC-insured community banks reflected an increase in fourth quarter 

net income of $2.7 billion (65.1 percent) from a year earlier to $6.8 billion. Lower income tax 

expense and higher net interest income contributed most to the improvement in earnings. 

Normalizing net income from fourth quarter 2017 and fourth quarter 2018 using the average 

tax rate for community banks before the 2017 tax law change, quarterly net income would 

have been $6.1 billion, 11.2 percent higher than the $5.4 billion reported in fourth quarter 

2017.1 Community banks earned a pretax return on assets (ROA) of 1.40 percent, up 10 basis 

points from the year-ago quarter and 25 basis points below that of noncommunity banks.

Full-Year Net Income 

Climbs $5.9 Billion

Net income totaled $26.1 billion during 2018, up $5.9 billion (29.4 percent) compared with 

2017. Only 3.41 percent of community banks were unprofitable in 2018, the lowest percentage of unprofitable community banks on record. A reduction in income tax expense of 

$2.9 billion (37.1 percent) contributed most to the improvement in earnings. Normalizing 

net income from 2017 and 2018 using the average tax rate for community banks before the 

new tax law, net income would have been $24.1 billion—10.7 percent higher than 2017.2

The annual pretax ROA increased to 1.35 percent, up 7 basis points from a year earlier. An 

increase in net interest income of $5.8 billion (8.3 percent) offset an increase in noninterest 

expense of $3 billion (5.3 percent) year over year. An uptick in salary and benefit expenses 

of $1.9 billion (5.9 percent) drove the increase in noninterest expense. However, the ratio of 

noninterest expenses to average assets of 2.75 percent is at its lowest level since 1989.

Contributors to the Year-Over-Year Change in Income 

FDIC-Insured Community Banks 

Source: FDIC.

$ Billions

Net

Income

Net

Interest

Income

Loan Loss

Provisions

Noninterest

Income

Noninterest

Expense

Realized

Gains on

Securities

Income

Taxes

Positive Factor Negative Factor

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

$2.67 $1.41 -$0.09 $0.02 $0.54 -$0.09 -$1.79

+65% +8% + -10% 0% +4% -572% -62%

Chart 1

Source: FDIC.

Net Interest Margin

Percent 

Community Banks (3.78)

Industry (3.48)

3.00

3.25

3.50

3.75

4.00

4.25

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 2

1 This estimate of quarterly net income adjusts fourth quarters 2017 and 2018 by applying the average quarterly tax rate at 

community banks between fourth quarter 2011 and third quarter 2017 to income before taxes and discontinued operations. 

2 This estimate of full-year net income adjusts 2017 and 2018 by applying the average annual tax rate between 2011 and 2016 to 

income before taxes and discontinued operations.
2 0 1 9  •  Volume 1 3 • Number 1

16 FDIC QUARTERLY

Change in Loan Balances and Unused Commitments 

FDIC-Insured Community Banks 

Source: FDIC.

$ Billions Change 4Q 2018 vs. 4Q 2017

Change 4Q 2018 vs. 3Q 2018

Loan Balances

Unused

Commitments

Nonfarm

Nonresidential

RE

C&I

Loans

1–4 Family

Residential

RE

C&D

Loans

Agricultural

Production

Loans

CRE &

C&D

C&I

Loans

-5

0

5

10

15

20

25

30

35

40

34.9

17.0

9.4

18.0

1.1

7.7 9.9 8.6

6.4

4.0 2.5

-0.9 -0.9

1.3

Chart 3

Noncurrent Loan Rates for FDIC-Insured Community Banks

Source: FDIC.

Share of Loan Portfolio Noncurrent

Percent

0

2

4

6

8

10

12

14

16

C&D Loans

Nonfarm Nonresidential RE

1–4 Family RE

C&I Loans 

Credit Cards

Home Equity

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 4

Community Banks Increase 

Net Operating Revenue by 

6.2 Percent

Net operating revenue rose $1.4 billion (6.2 percent) from a year ago primarily because of an 

increase in net interest income of $1.4 billion (7.7 percent). An increase in other real estate 

loan income (up $1.3 billion or 14.6 percent) contributed most to the increase in net interest 

income.3 Noninterest income of $4.7 billion included an increase in other noninterest income 

of $130.1 million (6.7 percent), which helped offset a 17.4 percent decline in income from loan 

sales. More than half of community banks (54 percent) reported higher noninterest income 

compared with fourth quarter 2017. An increase in earning asset yields outpaced an increase in 

average funding costs, supporting a 12 basis point expansion of the average net interest margin 

(NIM) to 3.78 percent. This ratio was 34 basis points above that of noncommunity banks.

Noninterest Expense Rises 

as Salary Expense Meets 

Increase in Average Assets

Noninterest expense of $15.6 billion was $540.2 million (3.6 percent) higher than the year-ago 

quarter. In contrast, noncommunity banks achieved a slight reduction in noninterest expense 

(0.27 percent) during the same period. Payroll expenses of $8.9 billion (up 4.7 percent) rose 

in tandem with the number of full-time employees (up 0.8 percent) and the increase in quarterly average total assets per employee (up 3.9 percent). More than two-thirds of community 

banks (67.2 percent) reported higher noninterest expense compared with one year ago.

Loans and Leases Increase 

1.5 Percent During 

Fourth Quarter 2018

Community banks raised loan and lease volume $24.2 billion (up 1.5 percent) during the 

fourth quarter. Increases in nonfarm nonresidential loans of $8.6 billion (1.8 percent), 

commercial and industrial (C&I) loans of $6.4 billion (3 percent), 1–4 family residential 

real estate loans of $4 billion (1 percent), and construction and development (C&D) loans 

of $2.6 billion (2.3 percent) accounted for almost 90 percent of quarterly loan growth. 

Unfunded commitments increased $2.8 billion (0.9 percent) during the quarter. Quarterly 

loan growth lifted the percentage of net loans and leases to total assets to 70.7 percent—

the highest ratio on record.

Annual loan and lease growth totaled $98.5 billion (up 6.5 percent) and brought yearend loan and lease volume to $1.6 trillion. Increases in nonfarm nonresidential loans 

of $34.9 billion (7.8 percent), 1–4 family residential real estate loans of $18.3 billion 

(4.3 percent), C&I loans of $16.9 billion (8.3 percent), C&D loans of $9.4 billion (9 percent), 

and multifamily loans of $9.2 billion (8.2 percent) contributed most to annual loan growth. 

Community banks made commitments to fund an additional $24.6 billion (up 8.6 percent) 

in loans during 2018. C&I loan commitments increased $9.9 billion (10.7 percent), which 

exceeded growth in commitments for C&D loans of $7.4 billion (8.7 percent).

3 Other real estate loan income includes income from construction and development, farmland, multifamily, and nonfarm 

nonresidential loans.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 17

Small Loans to Businesses 

Grow 3.1 Percent Compared 

With a Year Ago

Community banks extended an additional $9 billion in small loans to businesses during 

2018, lifting the total to $299.3 billion—3.1 percent higher than the year earlier. C&I loan 

growth of 4.5 percent and nonfarm nonresidential loan growth of 2.8 percent contributed 

most to the growth in small loans to businesses. Community banks hold 42.1 percent of the 

industry’s small loans to businesses.

Noncurrent Rate 

Remains Low

The rate of noncurrent loans declined 2 basis points during the quarter and 8 basis points 

from a year ago to 0.78 percent—the lowest it has been since 2007. The noncurrent rate for 

all major loan categories except 1–4 family residential loans declined during the quarter. 

The noncurrent rate for 1–4 family residential loans increased 1 basis point to 1.03 percent. 

The noncurrent rate for C&D loans (down 9 basis points to 0.59 percent) and for C&I loans 

(down 8 basis points to 0.91 percent) decreased the most among major loan categories.4 The 

1.03 percent noncurrent rate for 1–4 family loans is the highest among major loan categories. 

The noncurrent rate for multifamily loans, which account for 7.5 percent of total loans, is at 

its lowest level since fourth quarter 1993. The noncurrent rate for farm loans of 1.11 percent 

increased 23 basis points since the year-ago quarter, continuing a year-over-year climb that 

began in fourth quarter 2016.

Net Charge-Off Rate 

Declines 8 Basis Points 

From a Year Earlier

The net charge-off rate for total loans declined 8 basis points to 0.14 percent compared with 

fourth quarter 2017. This rate was 43 basis points below that of noncommunity banks. The 

net charge-off rate declined for all major loan categories since the year-ago quarter. The net 

charge-off rate for C&I loans registered the greatest annual improvement (down 29 basis 

points to 0.36 percent year over year) despite a 9 basis point increase during the fourth 

quarter. The net charge-off rate for farm loans, which make up 7.9 percent of total loans 

and leases, increased 2 basis points since the year-ago quarter and 8 basis points during the 

quarter to 0.15 percent.

Risk-Based Capital Ratios 

Show Slight Decline

Total equity capital increased $6.7 billion (2.7 percent) during the fourth quarter. The total 

equity capital ratio increased by 17 basis points to 11.41 percent, while the leverage capital 

ratio increased 4 basis points to 11.09 percent. The total risk-based capital ratio declined 

3 basis points to 15.76 percent, and the tier 1 risk-based capital ratio declined 3 basis points 

to 14.72 percent.

Total Deposits Increase 

1.7 Percent During the 

Quarter

Total Deposits increased $30.2 billion to $1.9 trillion during the fourth quarter. This growth 

included an increase in domestic interest-bearing deposits of $26.1 billion (1.8 percent) and 

an increase in domestic noninterest-bearing deposits of $4 billion (1 percent).

One New Bank Opened in 

Fourth Quarter 2018

The number of FDIC-insured community banks declined by 65 to 4,979 during the quarter, 

including 64 mergers and consolidations. Five community banks voluntarily liquidated and 

four became noncommunity banks. Five noncommunity banks transitioned to community 

banks. One new community bank charter was opened during the quarter. No community 

banks failed.

Author:

Erica Jill Tholmer

Senior Financial Analyst

Division of Insurance and Research

4 Major loan categories include C&D, nonfarm nonresidential, C&I, and 1–4 family residential. 
2 0 1 9  •  Volume 1 3 • Number 1

18 FDIC QUARTERLY

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

2018 2017 2016 2015 2014 2013 2012

Return on assets (%) 1.19 0.96 0.99 0.99 0.93 0.90 0.83

Return on equity (%) 10.60 8.65 8.81 8.85 8.45 8.27 7.68

Core capital (leverage) ratio (%) 11.09 10.80 10.69 10.67 10.57 10.43 10.18

Noncurrent assets plus other real estate owned to assets (%) 0.69 0.78 0.94 1.07 1.34 1.73 2.27

Net charge-offs to loans (%) 0.12 0.16 0.16 0.15 0.21 0.32 0.58

Asset growth rate (%) 2.30 1.17 2.97 2.71 2.21 0.39 2.25

Net interest margin (%) 3.72 3.62 3.57 3.57 3.61 3.59 3.67

Net operating income growth (%) 28.35 0.14 2.42 9.54 4.81 14.64 56.17

Number of institutions reporting 4,979 5,228 5,461 5,735 6,037 6,307 6,542

Percentage of unprofitable institutions (%) 3.41 5.74 4.65 5.02 6.44 8.40 11.14

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

(dollar figures in millions)  4th Quarter

2018

3rd Quarter

2018

4th Quarter

2017

%Change 

17Q4-18Q4

Number of institutions reporting 4,979 5,044 5,228 -4.8

Total employees (full-time equivalent) 412,579 411,511 417,393 -1.2

CONDITION DATA

Total assets $2,259,279 $2,222,307 $2,208,517 2.3

Loans secured by real estate 1,238,885 1,221,888 1,198,837 3.3

 1-4 Family residential mortgages 399,812 396,222 396,219 0.9

 Nonfarm nonresidential 481,742 474,099 459,353 4.9

 Construction and development 113,127 110,530 107,075 5.7

 Home equity lines 48,270 48,665 50,038 -3.5

Commercial & industrial loans 221,437 210,573 205,711 7.6

Loans to individuals 63,627 63,184 61,988 2.6

 Credit cards 1,908 1,801 2,039 -6.4

Farm loans 52,756 53,722 51,664 2.1

Other loans & leases 40,153 39,749 38,918 3.2

Less: Unearned income 651 656 706 -7.8

Total loans & leases 1,616,206 1,588,461 1,556,411 3.8

Less: Reserve for losses 18,431 18,271 18,123 1.7

Net loans and leases 1,597,775 1,570,190 1,538,289 3.9

Securities 396,519 396,654 409,786 -3.2

Other real estate owned 3,051 3,267 3,921 -22.2

Goodwill and other intangibles 17,497 15,600 13,700 27.7

All other assets 244,438 236,596 242,821 0.7

Total liabilities and capital 2,259,279 2,222,307 2,208,517 2.3

Deposits 1,854,566 1,823,189 1,809,803 2.5

 Domestic office deposits 1,853,858 1,822,598 1,809,313 2.5

 Foreign office deposits 708 591 490 44.7

 Brokered deposits 77,561 73,120 91,087 -14.8

Estimated insured deposits 1,344,000 1,331,166 1,331,270 1.0

Other borrowed funds 128,889 131,605 136,156 -5.3

Subordinated debt 791 624 864 -8.5

All other liabilities 17,060 16,997 15,951 7.0

Total equity capital (includes minority interests) 257,973 249,892 245,744 5.0

 Bank equity capital 257,894 249,783 245,621 5.0

Loans and leases 30-89 days past due 8,650 7,778 8,376 3.3

Noncurrent loans and leases 12,589 12,747 13,321 -5.5

Restructured loans and leases 6,390 6,496 7,032 -9.1

Mortgage-backed securities 174,441 174,560 174,409 0.0

Earning assets 2,104,202 2,073,075 2,058,450 2.2

FHLB Advances 105,149 109,266 111,892 -6.0

Unused loan commitments 310,580 306,319 292,389 6.2

Trust assets 303,344 296,616 347,351 -12.7

Assets securitized and sold 13,060 14,891 24,076 -45.8

Notional amount of derivatives 74,753 75,823 67,382 10.9

INCOME DATA

Full Year

 2018

Full Year

 2017 %Change

4th Quarter 

2018

4th Quarter 

2017

%Change 

17Q4-18Q4

Total interest income $90,343 $82,472 9.5 $24,063 $21,557 11.6

Total interest expense 14,545 10,348 40.6 4,385 2,859 53.4

Net interest income 75,798 72,123 5.1 19,678 18,698 5.2

Provision for loan and lease losses 2,901 3,157 -8.1 766 869 -11.8

Total noninterest income 18,367 18,796 -2.3 4,655 4,812 -3.3

Total noninterest expense 60,227 59,319 1.5 15,637 15,529 0.7

Securities gains (losses) 40 353 -88.8 -77 25 N/M

Applicable income taxes 4,960 8,199 -39.5 1,083 3,063 -64.6

Extraordinary gains, net* 3 2 N/M 0 -2 N/M

Total net income (includes minority interests) 26,120 20,599 26.8 6,769 4,071 66.3

 Bank net income 26,109 20,576 26.9 6,768 4,066 66.4

Net charge-offs 1,916 2,408 -20.4 570 842 -32.3

Cash dividends 11,471 10,016 14.5 3,572 3,037 17.6

Retained earnings 14,638 10,560 38.6 3,196 1,030 210.4

Net operating income 26,091 20,328 28.3 6,839 4,050 68.9

* See Notes to Users for explanation. N/M - Not Meaningful
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 19

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

Prior Periods Adjusted for Mergers

(dollar figures in millions)  4th Quarter 

2018

3rd Quarter 

2018

4th Quarter

2017

%Change 

17Q4-18Q4

Number of institutions reporting 4,979 4,978 4,973 0.1

Total employees (full-time equivalent) 412,579 412,264 409,187 0.8

CONDITION DATA

Total assets $2,259,279 $2,223,723 $2,154,822 4.8

Loans secured by real estate 1,238,885 1,220,687 1,163,101 6.5

 1-4 Family residential mortgages 399,812 395,854 381,853 4.7

 Nonfarm nonresidential 481,742 473,187 446,881 7.8

 Construction and development 113,127 110,603 103,751 9.0

 Home equity lines 48,270 48,062 47,951 0.7

Commercial & industrial loans 221,437 215,045 204,486 8.3

Loans to individuals 63,627 63,377 60,289 5.5

 Credit cards 1,908 1,858 1,917 -0.5

Farm loans 52,756 53,626 51,699 2.0

Other loans & leases 40,153 39,975 38,791 3.5

Less: Unearned income 651 664 682 -4.5

Total loans & leases 1,616,206 1,592,045 1,517,686 6.5

Less: Reserve for losses 18,431 18,327 17,781 3.7

Net loans and leases 1,597,775 1,573,718 1,499,905 6.5

Securities 396,519 393,707 399,835 -0.8

Other real estate owned 3,051 3,253 3,817 -20.1

Goodwill and other intangibles 17,497 16,880 14,845 17.9

All other assets 244,438 236,165 236,420 3.4

Total liabilities and capital 2,259,279 2,223,723 2,154,822 4.8

Deposits 1,854,566 1,824,344 1,768,343 4.9

 Domestic office deposits 1,853,858 1,823,751 1,767,831 4.9

 Foreign office deposits 708 592 512 38.2

 Brokered deposits 77,561 76,114 89,996 -13.8

Estimated insured deposits 1,344,000 1,329,936 1,300,565 3.3

Other borrowed funds 128,889 129,950 128,149 0.6

Subordinated debt 791 797 771 2.6

All other liabilities 17,060 17,343 15,807 7.9

Total equity capital (includes minority interests) 257,973 251,290 241,752 6.7

 Bank equity capital 257,894 251,179 241,644 6.7

Loans and leases 30-89 days past due 8,650 7,798 8,267 4.6

Noncurrent loans and leases 12,589 12,871 13,186 -4.5

Restructured loans and leases 6,390 6,453 6,867 -7.0

Mortgage-backed securities 174,441 172,299 169,951 2.6

Earning assets 2,104,202 2,072,485 2,006,245 4.9

FHLB Advances 105,149 107,054 103,642 1.5

Unused loan commitments 310,580 307,824 286,014 8.6

Trust assets 303,344 282,870 307,030 -1.2

Assets securitized and sold 13,060 14,891 18,999 -31.3

Notional amount of derivatives 74,753 76,418 65,559 14.0

INCOME DATA

Full Year

 2018

Full Year

 2017 %Change

4th Quarter 

2018

4th Quarter 

2017

%Change 

17Q4-18Q4

Total interest income $90,343 $79,875 13.1 $24,063 $21,016 14.5

Total interest expense 14,545 9,871 47.3 4,385 2,747 59.6

Net interest income 75,798 70,004 8.3 19,678 18,269 7.7

Provision for loan and lease losses 2,901 3,085 -6.0 766 855 -10.4

Total noninterest income 18,367 18,031 1.9 4,655 4,638 0.4

Total noninterest expense 60,227 57,217 5.3 15,637 15,096 3.6

Securities gains (losses) 40 340 -88.4 -77 16 N/M

Applicable income taxes 4,960 7,883 -37.1 1,083 2,868 -62.2

Extraordinary gains, net* 3 2 N/M 0 -2 N/M

Total net income (includes minority interests) 26,120 20,192 29.4 6,769 4,102 65.0

 Bank net income 26,109 20,178 29.4 6,768 4,098 65.1

Net charge-offs 1,916 2,330 -17.8 570 822 -30.7

Cash dividends 11,471 9,702 18.2 3,572 2,874 24.3

Retained earnings 14,638 10,475 39.7 3,196 1,224 161.0

Net operating income 26,091 19,932 30.9 6,839 4,087 67.3

* See Notes to Users for explanation. N/M - Not Meaningful
2 0 1 9  •  Volume 1 3 • Number 1

20 FDIC QUARTERLY

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

Fourth Quarter 2018

(dollar figures in millions) All Community Banks

Geographic Regions*

New York Atlanta Chicago Kansas City Dallas San Francisco

Number of institutions reporting 4,979 571 575 1,094 1,325 1,103 311

Total employees (full-time equivalent) 412,579 85,663 46,852 86,721 71,552 88,892 32,899

CONDITION DATA

Total assets $2,259,279 $626,187 $232,592 $410,281 $369,497 $415,988 $204,734

Loans secured by real estate 1,238,885 392,296 128,254 213,810 181,774 209,124 113,628

 1-4 Family residential mortgages 399,812 142,274 40,051 70,717 54,008 64,860 27,902

 Nonfarm nonresidential 481,742 141,730 56,388 80,811 61,568 87,402 53,842

 Construction and development 113,127 25,883 14,363 16,604 16,224 29,828 10,225

 Home equity lines 48,270 16,009 6,523 10,280 5,430 5,009 5,019

Commercial & industrial loans 221,437 54,852 20,046 47,003 38,027 42,511 18,997

Loans to individuals 63,627 16,196 6,450 12,518 10,922 12,582 4,959

 Credit cards 1,908 422 154 290 587 236 220

Farm loans 52,756 640 1,339 8,859 29,683 9,406 2,829

Other loans & leases 40,153 11,673 3,493 7,787 6,813 6,572 3,816

Less: Unearned income 651 178 98 48 103 125 99

Total loans & leases 1,616,206 475,478 159,483 289,929 267,116 280,070 144,130

Less: Reserve for losses 18,431 4,645 1,788 3,319 3,473 3,408 1,798

Net loans and leases 1,597,775 470,833 157,695 286,610 263,643 276,662 142,332

Securities 396,519 95,974 43,114 74,552 64,853 83,617 34,407

Other real estate owned 3,051 551 617 565 511 647 159

Goodwill and other intangibles 17,497 5,130 1,380 4,216 2,342 2,993 1,437

All other assets 244,438 53,699 29,786 44,338 38,148 52,068 26,399

Total liabilities and capital 2,259,279 626,187 232,592 410,281 369,497 415,988 204,734

Deposits 1,854,566 494,597 194,751 336,960 305,977 351,756 170,524

 Domestic office deposits 1,853,858 494,041 194,750 336,863 305,977 351,756 170,470

 Foreign office deposits 708 556 1 97 0 0 54

 Brokered deposits 77,561 25,531 5,103 14,159 14,077 9,966 8,724

 Estimated insured deposits 1,344,000 345,482 141,764 260,045 235,487 248,468 112,753

Other borrowed funds 128,889 53,385 9,989 22,469 20,206 14,219 8,622

Subordinated debt 791 499 15 209 10 42 15

All other liabilities 17,060 5,880 1,592 3,231 2,215 2,434 1,709

Total equity capital (includes minority interests) 257,973 71,826 26,245 47,412 41,089 47,536 23,864

 Bank equity capital 257,894 71,792 26,241 47,393 41,088 47,516 23,864

Loans and leases 30-89 days past due 8,650 2,114 1,106 1,612 1,397 1,994 427

Noncurrent loans and leases 12,589 3,932 1,239 2,405 1,905 2,422 686

Restructured loans and leases 6,390 2,112 660 1,444 930 837 406

Mortgage-backed securities 174,441 54,035 19,348 29,513 22,411 32,131 17,004

Earning assets 2,104,202 587,620 215,518 379,733 344,060 385,236 192,035

FHLB Advances 105,149 47,513 8,305 16,572 15,331 11,174 6,255

Unused loan commitments 310,580 84,011 28,223 58,623 55,130 53,624 30,969

Trust assets 303,344 73,534 11,992 69,688 93,121 44,970 10,039

Assets securitized and sold 13,060 7,499 72 1,523 2,650 903 413

Notional amount of derivatives 74,753 35,022 6,066 16,527 9,581 5,225 2,331

INCOME DATA

Total interest income $24,063 $6,383 $2,523 $4,261 $3,960 $4,638 $2,299

Total interest expense 4,385 1,436 415 737 736 737 325

Net interest income 19,678 4,947 2,108 3,524 3,224 3,901 1,974

Provision for loan and lease losses 766 181 78 120 149 176 61

Total noninterest income 4,655 1,003 434 1,254 754 872 337

Total noninterest expense 15,637 3,806 1,753 3,035 2,545 3,108 1,389

Securities gains (losses) -77 -14 -17 -11 -8 -17 -9

Applicable income taxes 1,083 327 66 254 152 124 160

Extraordinary gains, net** 0 -1 0 0 0 0 0

Total net income (includes minority interests) 6,769 1,620 628 1,357 1,123 1,348 693

 Bank net income 6,768 1,619 628 1,357 1,123 1,349 693

Net charge-offs 570 112 63 109 115 138 33

Cash dividends 3,572 444 305 894 726 872 331

Retained earnings 3,196 1,174 323 463 398 477 361

Net operating income 6,839 1,633 642 1,368 1,131 1,364 701

* See Table V-A for explanation.

** See Notes to Users for explanation.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 21

Table IV-B. Fourth Quarter 2018, FDIC-Insured Community Banks

Performance ratios (annualized, %)

All Community Banks Fourth Quarter 2018, Geographic Regions*

 4th Quarter 

2018

3rd Quarter 

2018 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 4.62 4.49 4.39 4.73 4.53 4.65 4.86 4.84

Cost of funding earning assets 0.84 0.75 0.99 0.78 0.78 0.86 0.77 0.68

Net interest margin 3.78 3.74 3.40 3.95 3.75 3.79 4.09 4.15

Noninterest income to assets 0.83 0.84 0.65 0.75 1.23 0.83 0.85 0.67

Noninterest expense to assets 2.80 2.73 2.45 3.04 2.99 2.79 3.02 2.74

Loan and lease loss provision to assets 0.14 0.11 0.12 0.14 0.12 0.16 0.17 0.12

Net operating income to assets 1.22 1.24 1.05 1.11 1.35 1.24 1.32 1.38

Pretax return on assets 1.40 1.48 1.25 1.20 1.59 1.40 1.43 1.68

Return on assets 1.21 1.24 1.04 1.09 1.34 1.23 1.31 1.37

Return on equity 10.66 11.05 9.15 9.73 11.62 11.07 11.57 11.79

Net charge-offs to loans and leases 0.14 0.10 0.10 0.16 0.15 0.17 0.20 0.09

Loan and lease loss provision to net charge-offs 134.49 152.03 161.39 123.83 110.64 130.05 127.65 186.69

Efficiency ratio 63.89 62.71 63.64 68.39 63.12 63.56 64.81 59.80

Net interest income to operating revenue 80.87 80.53 83.15 82.92 73.75 81.05 81.73 85.40

% of unprofitable institutions 6.91 3.79 5.43 8.35 6.49 7.40 7.07 5.79

% of institutions with earnings gains 73.11 71.57 84.76 77.74 71.21 66.72 71.80 81.67

Table V-B. Full Year 2018, FDIC-Insured Community Banks

Performance ratios (%)

All Community Banks Full Year 2018, Geographic Regions*

Full Year

 2018

Full Year

 2017 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 4.43 4.14 4.23 4.53 4.34 4.46 4.65 4.63

Cost of funding earning assets 0.71 0.52 0.85 0.65 0.66 0.73 0.64 0.58

Net interest margin 3.72 3.62 3.38 3.87 3.68 3.73 4.00 4.05

Noninterest income to assets 0.84 0.88 0.64 0.78 1.21 0.83 0.88 0.69

Noninterest expense to assets 2.75 2.77 2.45 2.99 2.96 2.70 2.95 2.71

Loan and lease loss provision to assets 0.13 0.15 0.14 0.12 0.11 0.15 0.15 0.12

Net operating income to assets 1.19 0.95 0.98 1.07 1.29 1.28 1.34 1.32

Pretax return on assets 1.42 1.35 1.25 1.27 1.55 1.46 1.49 1.65

Return on assets 1.19 0.96 0.99 1.07 1.29 1.28 1.33 1.32

Return on equity 10.60 8.65 8.76 9.66 11.27 11.57 11.90 11.51

Net charge-offs to loans and leases 0.12 0.16 0.13 0.11 0.10 0.12 0.16 0.09

Loan and lease loss provision to net charge-offs 151.41 131.12 138.74 151.29 150.74 164.99 144.41 204.98

Efficiency ratio 63.61 64.86 63.78 67.87 63.63 62.31 63.87 60.13

Net interest income to operating revenue 80.50 79.33 83.15 82.05 73.88 80.72 80.79 84.61

% of unprofitable institutions 3.41 5.74 4.03 5.57 3.47 2.34 2.72 5.14

% of institutions with earnings gains 78.93 55.16 86.34 83.83 75.69 75.17 78.88 83.92

* See Table V-A for explanation.
2 0 1 9  •  Volume 1 3 • Number 1

22 FDIC QUARTERLY

Table VI-B. Loan Performance, FDIC-Insured Community Banks

December 31, 2018

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 0.50 0.42 0.64 0.58 0.49 0.65 0.21

Construction and development 0.39 0.43 0.34 0.43 0.40 0.43 0.18

Nonfarm nonresidential 0.30 0.28 0.33 0.35 0.29 0.39 0.14

Multifamily residential real estate 0.14 0.11 0.25 0.21 0.21 0.13 0.02

Home equity loans 0.48 0.53 0.60 0.44 0.29 0.58 0.36

Other 1-4 family residential 0.86 0.68 1.26 1.01 0.73 1.16 0.39

Commercial and industrial loans 0.48 0.29 0.76 0.41 0.53 0.61 0.50

Loans to individuals 1.49 1.64 1.73 0.94 1.07 2.27 1.02

Credit card loans 2.43 2.50 1.40 0.95 3.76 1.54 2.39

Other loans to individuals 1.46 1.61 1.73 0.94 0.92 2.29 0.96

All other loans and leases (including farm) 0.46 0.24 0.33 0.33 0.53 0.57 0.60

Total loans and leases 0.54 0.44 0.69 0.56 0.52 0.71 0.30

Percent of Loans Noncurrent**

All loans secured by real estate 0.77 0.83 0.78 0.89 0.67 0.79 0.40

Construction and development 0.59 0.63 0.72 0.66 0.65 0.44 0.53

Nonfarm nonresidential 0.66 0.73 0.63 0.72 0.63 0.76 0.28

Multifamily residential real estate 0.19 0.18 0.22 0.29 0.14 0.30 0.06

Home equity loans 0.51 0.59 0.52 0.51 0.28 0.48 0.50

Other 1-4 family residential 1.03 1.23 1.01 1.20 0.61 0.99 0.61

Commercial and industrial loans 0.91 1.07 0.75 0.71 0.94 1.05 0.80

Loans to individuals 0.68 0.46 0.72 0.35 0.43 1.56 0.44

Credit card loans 1.19 1.23 0.84 0.53 1.79 0.57 1.31

Other loans to individuals 0.66 0.44 0.71 0.34 0.36 1.58 0.40

All other loans and leases (including farm) 0.70 0.29 0.87 0.74 0.76 0.76 0.82

Total loans and leases 0.78 0.83 0.78 0.83 0.71 0.86 0.48

Percent of Loans Charged-Off (net, YTD)

All loans secured by real estate 0.03 0.04 0.04 0.04 0.03 0.03 -0.02

Construction and development 0.00 0.03 0.08 -0.03 -0.02 0.03 -0.16

Nonfarm nonresidential 0.04 0.04 0.03 0.06 0.06 0.03 0.00

Multifamily residential real estate -0.01 0.00 -0.09 -0.03 0.00 0.03 0.00

Home equity loans 0.02 0.04 0.04 0.03 -0.02 0.05 -0.04

Other 1-4 family residential 0.04 0.05 0.04 0.04 0.03 0.03 -0.02

Commercial and industrial loans 0.38 0.58 0.29 0.27 0.24 0.46 0.25

Loans to individuals 0.95 0.89 0.97 0.46 1.08 1.09 1.67

Credit card loans 6.50 4.17 2.10 1.55 14.89 1.71 3.42

Other loans to individuals 0.77 0.79 0.95 0.43 0.29 1.07 1.59

All other loans and leases (including farm) 0.21 0.13 0.21 0.23 0.18 0.25 0.31

Total loans and leases 0.12 0.13 0.11 0.10 0.12 0.16 0.09

Loans Outstanding (in billions)

All loans secured by real estate $1,238.9 $392.3 $128.3 $213.8 $181.8 $209.1 $113.6

Construction and development 113.1 25.9 14.4 16.6 16.2 29.8 10.2

Nonfarm nonresidential 481.7 141.7 56.4 80.8 61.6 87.4 53.8

Multifamily residential real estate 120.5 63.9 6.5 17.9 11.0 8.1 13.0

Home equity loans 48.3 16.0 6.5 10.3 5.4 5.0 5.0

Other 1-4 family residential 399.8 142.3 40.1 70.7 54.0 64.9 27.9

Commercial and industrial loans 221.4 54.9 20.0 47.0 38.0 42.5 19.0

Loans to individuals 63.6 16.2 6.4 12.5 10.9 12.6 5.0

Credit card loans 1.9 0.4 0.2 0.3 0.6 0.2 0.2

Other loans to individuals 61.7 15.8 6.3 12.2 10.3 12.3 4.7

All other loans and leases (including farm) 92.9 12.3 4.8 16.6 36.5 16.0 6.6

Total loans and leases 1,616.9 475.7 159.6 290.0 267.2 280.2 144.2

Memo: Unfunded Commitments (in millions)

Total Unfunded Commitments 310,580 84,011 28,223 58,623 55,130 53,624 30,969

Construction and development: 1-4 family residential 25,913 5,456 3,506 3,151 3,325 7,464 3,012

Construction and development: CRE and other 65,595 20,125 6,871 10,996 8,907 13,154 5,542

Commercial and industrial 102,378 27,343 7,458 22,825 17,183 17,504 10,065

* See Table V-A for explanation.

** 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.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 23

Insurance Fund Indicators

Deposit Insurance Fund Increases by $2.4 Billion

Insured Deposits Grow by 2.0 Percent

DIF Reserve Ratio Is Unchanged at 1.36 Percent

During the fourth quarter, the Deposit Insurance Fund (DIF) balance increased by 

$2.4 billion to $102.6 billion. Assessment income of $1.4 billion and unrealized gains 

on available-for-sale securities of $756 million were the largest sources of the increase. 

Interest earned on investments of $481 million, a negative provision for insurance losses 

of $236 million, and unrealized gains on postretirement benefits of $32 million also added 

to the fund. Operating expenses of $453 million reduced the fund. No institutions failed 

in 2018.

The deposit insurance assessment base—average consolidated total assets minus average tangible equity—increased by 1.5 percent in the fourth quarter and by 3.0 percent over 

12 months.1,2 Total estimated insured deposits increased by 2.0 percent in the quarter and 

5.1 percent year over year.

The strong growth in insured deposits offset the increase in the fund balance, resulting in 

a DIF reserve ratio of 1.36 percent on December 31, 2018. The reserve ratio was unchanged 

from September 30, 2018, and increased by 6 basis points during 2018.

Small banks will receive credits to offset the portion of their assessments that help to raise 

the reserve ratio from 1.15 percent to 1.35 percent. Total credits to be issued among credit 

accruing institutions are estimated to be $764.7 million. Following each quarter that the 

reserve ratio is at or above 1.38 percent, the FDIC will automatically apply a small bank’s 

credits to reduce its regular assessment up to the entire amount of the assessment.

Author:

Kevin Brown

Senior Financial Analyst

Division of Insurance and Research

1 There are additional adjustments to the assessment base for banker’s banks and custodial banks.

2 Figures for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition to insured 

commercial banks and savings institutions.
2 0 1 9  •  Volume 1 3 • Number 1

24 FDIC QUARTERLY

DIF Reserve Ratios

Percent of Insured Deposits

1.20 1.20

1.27 1.30 1.30

1.11 1.13 1.17 1.18

1.24

1.33 1.36 1.36

12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 12/17 3/18 6/18 9/18 12/18

Table I-C. Insurance Fund Balances and Selected Indicators

(dollar figures in millions)

Deposit Insurance Fund*

4th 

Quarter 

2018

3rd 

Quarter 

2018

2nd 

Quarter 

2018

1st 

Quarter 

2018

4th 

Quarter 

2017

3rd 

Quarter 

2017

2nd 

Quarter 

2017

1st 

Quarter 

2017

4th 

Quarter 

2016

3rd 

Quarter 

2016

2nd 

Quarter 

2016

1st 

Quarter 

2016

4th 

Quarter 

2015

Beginning Fund Balance $100,204 $97,588 $95,072 $92,747 $90,506 $87,588 $84,928 $83,162 $80,704 $77,910 $75,120 $72,600 $70,115

Changes in Fund Balance:

Assessments earned 1,351 2,728 2,598 2,850 2,656 2,568 2,634 2,737 2,688 2,643 2,328 2,328 2,160

Interest earned on 

investment securities 481 433 381 338 305 274 251 227 189 171 164 147 128

Realized gain on sale of

investments 0 0 0 0 0 0 0 0 0 0 0 0 0

Operating expenses 453 434 445 433 443 404 450 442 437 422 441 415 447

Provision for insurance 

losses -236 -121 -141 -65 -203 -512 -233 765 -332 -566 -627 -43 -930

All other income, 

net of expenses 2 2 3 1 3 1 4 2 3 3 2 5 12

Unrealized gain/(loss) on 

available-for-sale 

securities** 788 -234 -162 -496 -481 -33 -12 7 -317 -167 110 412 -298

Total fund balance change 2,405 2,616 2,516 2,325 2,242 2,918 2,660 1,766 2,457 2,794 2,790 2,520 2,485

Ending Fund Balance 102,609 100,204 97,588 95,072 92,747 90,506 87,588 84,928 83,162 80,704 77,910 75,120 72,600

Percent change from 

 four quarters earlier 10.63 10.72 11.42 11.95 11.53 12.14 12.42 13.06 14.55 15.10 15.27 15.05 15.64

Reserve Ratio (%) 1.36 1.36 1.33 1.30 1.30 1.27 1.24 1.20 1.20 1.18 1.17 1.13 1.11

Estimated Insured 

Deposits 7,522,753 7,377,348 7,355,417 7,335,611 7,158,286 7,102,057 7,050,287 7,081,910 6,917,928 6,817,984 6,674,980 6,662,907 6,519,449

Percent change from 

 four quarters earlier 5.09 3.88 4.33 3.58 3.47 4.17 5.62 6.29 6.11 6.42 5.39 5.19 5.23

Domestic Deposits 12,659,453 12,368,000 12,280,938 12,305,836 12,129,503 11,966,478 11,827,933 11,856,691 11,693,371 11,506,877 11,242,960 11,156,523 10,952,922

Percent change from 

 four quarters earlier 4.37 3.36 3.83 3.79 3.73 3.99 5.20 6.28 6.76 7.56 5.74 5.06 5.21

Assessment Base*** 15,448,329 15,226,833 15,111,345 15,067,584 15,000,564 14,833,521 14,702,320 14,620,247 14,562,532 14,382,384 14,191,382 13,994,033 13,832,910

Percent change from 

 four quarters earlier 2.98 2.65 2.78 3.06 3.01 3.14 3.60 4.47 5.27 5.27 4.43 3.40 3.65

Number of Institutions 

Reporting 5,415 5,486 5,551 5,616 5,679 5,747 5,796 5,865 5,922 5,989 6,067 6,131 6,191

Deposit Insurance Fund Balance 

and Insured Deposits

($ Millions)

DIF 

Balance

DIF-Insured 

Deposits

12/15 $72,600 $6,519,449

3/16 75,120 6,662,907

6/16 77,910 6,674,980

9/16 80,704 6,817,984

12/16 83,162 6,917,928

3/17 84,928 7,081,910

6/17 87,588 7,050,287

9/17 90,506 7,102,057

12/17 92,747 7,158,286

3/18 95,072 7,335,611

6/18 97,588 7,355,417

9/18 100,204 7,377,348

12/18 102,609 7,522,753

Table II-C. Problem Institutions and Failed Institutions

(dollar figures in millions) 2018 2017 2016 2015 2014 2013 2012

Problem Institutions

Number of institutions 60 95 123 183 291 467 651

Total assets $48,489 $13,939 $27,624 $46,780 $86,712 $152,687 $232,701

Failed Institutions

Number of institutions 0 8 5 8 18 24 51

Total assets**** $0 $5,082 $277 $6,706 $2,914 $6,044 $11,617

* Quarterly financial statement results are unaudited.

** Includes unrealized postretirement benefit gain (loss).

*** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks.

**** Total assets are based on final Call Reports submitted by failed institutions.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 25

Table III-C. Estimated FDIC-Insured Deposits by Type of Institution

(dollar figures in millions)

December 31, 2018

Number of 

Institutions

Total 

Assets

Domestic 

Deposits*

Est. Insured 

Deposits

Commercial Banks and Savings Institutions

FDIC-Insured Commercial Banks 4,715 $16,728,219 $11,645,216 $6,704,238

 FDIC-Supervised 3,140 2,589,311 2,061,033 1,405,657

 OCC-Supervised 819 11,318,969 7,612,608 4,232,931

 Federal Reserve-Supervised 756 2,819,939 1,971,575 1,065,651

FDIC-Insured Savings Institutions 691 1,214,904 967,717 778,636

 OCC-Supervised 310 768,695 630,187 519,788

 FDIC-Supervised 343 415,198 312,958 239,078

 Federal Reserve-Supervised 38 31,010 24,573 19,769

Total Commercial Banks and Savings Institutions 5,406 17,943,122 12,612,933 7,482,874

Other FDIC-Insured Institutions

U.S. Branches of Foreign Banks 9 91,376 46,520 39,879

Total FDIC-Insured Institutions 5,415 18,034,498 12,659,453 7,522,753

* Excludes $1.3 trillion in foreign office deposits, which are not FDIC insured.

Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range

Quarter Ending September 30, 2018 (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

1.50 - 3.00 3,400 61.98 $5,554.4 36.48

3.01 - 6.00 1,428 26.03 8,801.3 57.80

6.01 - 10.00 524 9.55 709.4 4.66

10.01 - 15.00 51 0.93 131.7 0.87

15.01 - 20.00 70 1.28 15.3 0.10

20.01 - 25.00 7 0.13 1.9 0.01

> 25.00 6 0.11 12.8 0.08

* Assessment rates do not incorporate temporary surcharges on large banks.

** 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.
2 0 1 9  •  Volume 1 3 • Number 1

26 FDIC QUARTERLY

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 VIII-A of the 

FDIC Quarterly Banking Profile is aggregated for all FDIC-insured 

Call Report filers, both commercial banks and savings 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://www.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 non-brokered 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.

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 adjusted 

upward quarterly. For banking offices, banks must have more than 

one office, and the maximum number of offices is 40 in 1985 and 

reached 87 in 2016. The maximum level of deposits for any one 

office is $1.25 billion in deposits in 1985 and reached $6.97 billion 

in deposits in 2016. 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 quarterly and below which the limits on banking activities 

and geographic scope are waived. The asset-size limit is $250 million 

in 1985 and reached $1.39 billion in 2016. 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 

organization.

(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

• 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 institutions, estimated FDIC-insured 

deposits, as well as assessment rate information. Depository insti1 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 $1.39 billion in 2016.

3 Maximum number of offices indexed to equal 40 in 1985 and 87 in 2016.

4 Maximum branch deposit size indexed to equal $1.25 billion in 1985 and $6.97 billion 

in 2016.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 27

tutions 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 (TFR) 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 doublecounting. 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 condition and performance ratios represent weighted averages, 

which is the sum of the individual numerator values divided by the 

sum of individual denominator values. All asset and liability figures 

used in calculating performance ratios represent average amounts for 

the period (beginning-of-period amount plus end-of-period amount 

plus any interim periods, divided by the total number of periods). For 

“pooling-of-interest” mergers, the assets of the acquired institution(s) 

are included in average assets, since the 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. When community 

bank growth rates are adjusted for mergers, prior period balances 

used in the calculations represent totals for the current group of community bank reporters, plus prior period amounts for any institutions 

that were subsequently merged into current community banks.

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; institutions can move their home offices between regions, 

savings institutions can convert to commercial banks, or commercial 

banks may convert to savings institutions.

ACCOUNTING CHANGES

Financial accounting pronouncements by the Financial Accounting 

Standards Board (FASB) can result in changes in an individual 

bank’s accounting policies and in the Call Reports they submit. Such 

accounting changes can affect the aggregate amounts presented in the 

QBP for the current period and the period-to-period comparability of 

such financial data. 

The current quarter’s Financial Institution Letter (FIL) and related 

Call Report supplemental instructions can provide additional explanation to the QBP reader beyond any material accounting changes 

discussed in the QBP analysis. 

https://www.fdic.gov/news/news/financial/2019/fil19002.html

https://www.fdic.gov/news/news/financial/2019/fil19002.pdf 

https://www.fdic.gov/regulations/resources/call/call.html

Further information on changes in financial statement presentation, 

income recognition and disclosure is available from the FASB. http://

www.fasb.org/jsp/FASB/Page/LandingPage&cid=1175805317350.

DEFINITIONS (in alphabetical order)

All other assets – total cash, balances due from depository institutions, premises, fixed assets, direct investments in real estate, 

investment in unconsolidated subsidiaries, customers’ liability on 

acceptances outstanding, assets held in trading accounts, federal 

funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid deposit insurance assessments, and 

other assets.

All other liabilities – bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance-sheet credit losses, 

fair market value of derivatives, and other liabilities.

Assessment base – effective April 1, 2011, the deposit insurance 

assessment base 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 deposits in banks’ domestic offices with certain 

adjustments.

Assessment rate schedule – Initial base assessment rates for small 

institutions are based on a combination of financial ratios and 

CAMELS component ratings. Initial rates for large institutions—

generally those with at least $10 billion in assets—are also based 

on CAMELS component ratings and certain 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). The FDIC may take 

additional information into account to make a limited adjustment to 

a large institution’s scorecard results, which are used to determine a 

large institution’s initial base assessment rate.

While risk categories for small institutions (except new institutions) were eliminated effective July 1, 2016, initial rates for small 

institutions are subject to minimums and maximums based on an 

institution’s CAMELS composite rating. (Risk categories for large 

institutions were eliminated in 2011.)

The current assessment rate schedule became effective July 1, 2016. 

Under the current schedule, initial base assessment rates range 

from 3 to 30 basis points. An institution’s total base assessment rate 
2 0 1 9  •  Volume 1 3 • Number 1

28 FDIC QUARTERLY

may differ from its initial rate due to three possible adjustments: 

(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 3 basis points would have a 

maximum unsecured debt adjustment of 1.5 basis points and could 

not have a total base assessment rate lower than 1.5 basis points. 

(2) Depository Institution Debt Adjustment: For institutions that 

hold long-term 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 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.

The assessment rate schedule effective July 1, 2016, is shown in the 

following table:

Total Base Assessment Rates*

Established Small Banks Large and 

Highly 

Complex 

Institutions**

CAMELS Composite

1 or 2 3 4 or 5

Initial Base 

Assessment Rate 3 to 16 6 to 30 16 to 30 3 to 30

Unsecured Debt 

Adjustment -5 to 0 -5 to 0 -5 to 0 -5 to 0

Brokered Deposit 

Adjustment N/A N/A N/A 0 to 10

Total Base 

Assessment Rate 1.5 to 16 3 to 30 11 to 30 1.5 to 40

* 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.

 ** Effective July 1, 2016, large institutions are also subject to temporary 

assessment surcharges in order to raise the reserve ratio from 1.15 percent to 

1.35  percent. The surcharges amount to 4.5 basis points of a large institution’s 

assessment base (after making certain adjustments).

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.

Assets securitized and sold – total outstanding principal balance 

of assets securitized and sold with servicing retained or other sellerprovided credit enhancements.

Capital Purchase Program (CPP) – as announced in October 2008 

under the TARP, the Treasury Department purchase of noncumulative perpetual preferred stock and related warrants that is treated as 

Tier 1 capital for regulatory capital purposes is included in “Total 

equity capital.” Such warrants to purchase common stock or noncumulative preferred stock issued by publicly-traded banks are 

reflected as well in “Surplus.” Warrants to purchase common stock or 

noncumulative preferred stock of not-publicly-traded bank stock are 

classified in a bank’s balance sheet as “Other liabilities.”

Common equity Tier 1 capital ratio – ratio of common equity 

Tier 1 capital to risk-weighted assets. Common equity Tier 1 capital 

includes common stock instruments and related surplus, retained 

earnings, accumulated other comprehensive income (AOCI), and 

limited amounts of common equity Tier 1 minority interest, minus 

applicable regulatory adjustments and deductions. Items that are fully 

deducted from common equity Tier 1 capital include goodwill, other 

intangible assets (excluding mortgage servicing assets) and certain 

deferred tax assets; items that are subject to limits in common equity 

Tier 1 capital include mortgage servicing assets, eligible deferred tax 

assets, and certain significant investments.

Construction and development loans – includes loans for all 

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 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.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 29

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 noninterest-bearing transaction accounts as a new 

temporary deposit insurance account category. All funds held in 

noninterest-bearing 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-forsale securities, loans held for sale, assets and liabilities accounted for 

under the fair value option, and foreclosed assets—involves the use 

of fair values. During periods of market stress, the fair values of some 

financial instruments and nonfinancial assets may decline.

FHLB advances – all borrowings by FDIC-insured institutions from 

the Federal Home Loan Bank System (FHLB), as reported by Call 

Report filers, and by TFR filers prior to March 31, 2012.

Goodwill and other intangibles – intangible assets include 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 sellerprovided 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 uncollectability), 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 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 filed 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.
2 0 1 9  •  Volume 1 3 • Number 1

30 FDIC QUARTERLY

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-weighted assets – assets adjusted for risk-based capital definitions which include on-balance-sheet as well as off-balance-sheet 

items multiplied by risk-weights that range from zero to 200 percent. 

A conversion factor is used to assign a balance sheet equivalent 

amount for selected off-balance-sheet accounts.

Securities – excludes securities held in trading accounts. Banks’ securities portfolios consist of securities designated as “held-to-maturity” 

(reported at amortized cost (book value)), securities designated as 

“available-for-sale” (reported at fair (market) value), and equity 

securities with readily determinable fair values not held for trading.

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 and debentures.” 

For regulatory capital purposes, the debentures are eligible for 

inclusion in an institution’s Tier 2 capital in accordance with their 

primary federal regulator’s capital standards. To participate in the 

SBLF Program, an institution with outstanding securities issued 

to the Treasury Department under the Capital Purchase Program 

(CPP) was required to refinance or repay in full the CPP securities 

at the time of the SBLF funding. Any outstanding warrants that an 

institution issued to the Treasury Department under the CPP remain 

outstanding after the refinancing of the CPP stock through the SBLF 

Program unless the institution chooses to repurchase them.

Subchapter S corporation – a Subchapter S corporation is treated 

as a pass-through entity, similar to a partnership, for federal income 

tax purposes. It is generally not subject to any federal income taxes at 

the corporate level. This can have the effect of reducing institutions’ 

reported taxes and increasing their after-tax earnings.

Trust assets – market value, or other reasonably available value of 

fiduciary and related assets, to include marketable securities, and 

other financial and physical assets. Common physical assets held in 

fiduciary accounts include real estate, equipment, collectibles, and 

household goods. Such fiduciary assets are not included in the assets 

of the financial institution.

Unearned income and 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.
FDIC QUARTERLY 31

Analysis of banking trends often focuses on specific industry subgroups. The analyst tracks 

the performance or characteristics of an industry subgroup over time, and the results, if 

compelling, can serve as input to policy decisions. When conducting such research and 

considering its results, it is important to remember that different ways of analyzing the same 

bank data can produce seemingly different conclusions. This article focuses on the merger 

adjustment analysis technique.

Researchers face challenges when attempting to analyze the characteristics of groups of institutions over time.1

 Membership in a particular group can change as new institutions form 

and older institutions merge, fail, or close. Institutions may also change their characteristics 

over time in ways that cause them to move from one group to another.

The process that FDIC analysts use to account for mergers is called merger adjusting.

2

 This 

article describes how and when FDIC analysts use merger adjustment when analyzing 

change in the banking industry and includes merger adjusting of the number of bank offices, 

balance sheet data, and income statement data. It discusses when to merger adjust and when 

not to merger adjust, and offers caveats for interpreting results. The appendix includes citations to publicly available data needed to perform merger adjustments.

How and When to Perform 

Merger Adjustment

Merger adjustment is often appropriate when analyzing a subset, or group, of the industry 

over time. Consider the regular reporting in the FDIC’s Quarterly Banking Profile (QBP) of 

year-over-year loan growth at all community banks.3 The group of community banks today 

is not necessarily made up of the same institutions that constituted the group a year earlier; 

institutions merge, fail, or close, or they can change and no longer meet the criteria to be a 

community bank. Also, new community banks are chartered, and sometimes noncommunity banks become community banks. Given these ongoing structural changes, how should 

analysts measure year-over-year loan growth at community banks?

The QBP calculation of year-over-year loan growth measures what is called the “organic 

growth” of loans held by currently operating community banks—the portion of growth 

that is independent of the effects of mergers. For example, if two institutions each had 

$100 million in loans one year ago, and they merged, and the combined institution ended the 

year with $200 million in loans, then the organic growth, or merger-adjusted growth, is zero. 

Although the acquiring institution doubled its loan portfolio, for the two institutions as a 

group there was no net increase in loans.

Merger-adjusted calculation of year-over-year loan growth involves identifying the community banks as of the most recent quarter, identifying institutions that those community 

banks acquired over the period being analyzed, and adding the assets and liabilities of the 

acquired institutions to the acquiring institutions in previous periods. The analysis treats 

acquired and acquiring institutions as if the merger had already occurred by the beginning 

of the period being analyzed.4

MERGER ADJUSTING BANK DATA: A PRIMER

1 For example, see S. A. Rhoades and A. J. Yeats, “Growth, Consolidation, and Mergers in Banking,” Journal of Finance 29, no. 5, 

December 1974: 1397-1405. Also, see George J. Stigler, “The Statistics of Monopoly and Merger,” Journal of Political Economy 64, 

no. 1, February 1956: 33-40. 

2 In this article, “merger” refers to any absorption of one institution by another where the absorbed institution no longer maintains 

a separate existence, whether or not both institutions are owned by the same holding company, as well as whether or not the 

absorption involves a failed institution.

3 Community banks are defined according to the FDIC’s research definition. See Chapter 1 of FDIC Community Banking Study 

(2012). In general, the FDIC considers as community banks both larger institutions that are not specialty banks (that are not, for 

example, bankers’ banks, credit card banks, or industrial loan companies) and that rely primarily on core deposits to fund local 

lending and operate within a limited geographic area, as well as smaller institutions that are not specialty banks.

4 Typically, FDIC analysts merger adjust data between two periods—for example an earlier quarter and the current quarter—by 

considering the current quarter’s insured institutions as constituting the group about which information is desired. So, analysts 

drop from the earlier quarter any institutions not also present in the current quarter if they have closed without an acquirer, were 

acquired by a nonbank such as a credit union, or relinquished FDIC insurance during the interval between the earlier quarter and 

the current quarter. New institutions that formed during the interval, and which report in the current quarter but did not report 

in the earlier quarter, are kept in the data. One can think of newly formed institutions as reporting values of zero for their assets 

and liabilities in the earlier quarter.
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32 FDIC QUARTERLY

Why Merger Adjust? Data are merger adjusted so that year-over-year growth calculations are made on data from 

only one group of institutions, and to reduce calculation distortions caused by mergers. 

When one bank purchases another, it acquires the assets and liabilities of the purchased 

bank. It would be confusing to report a change in the amount of the acquiring bank’s total 

assets without accounting for the merger.

Suppose a researcher wishes to compare the number of offices operated by the four largest 

banks, measured by total assets, in 2018 with the number of offices operated by the same 

four banks in 1998. A simple comparison of these two numbers will tell us that the number 

of offices operated by these four banks has greatly increased. The simple comparison will not 

tell us whether the increase was the result of new offices being opened, or the result of acquisitions of the offices of other banks.

Another situation in which merger adjusting makes a crucial difference is when comparing industry size groups over time. Suppose a researcher is interested in determining total 

deposits of institutions with less than $1 billion each in assets over the past 20 years. For any 

given asset-size threshold, fewer and fewer banks will fall under that threshold as time goes 

on simply because of inflation. Banks that are under the threshold at the beginning of the 

period may grow or be acquired by larger institutions. So, over time there could be fewer 

banks, and potentially fewer deposits, under the $1 billion asset size threshold. A mergeradjusted analysis would be appropriate if the researcher is interested in determining the 

growth of deposits at the current group of institutions in this size range, rather than tracking 

the total deposits of all institutions in the group over time.

Three Examples of Merger 

Adjustment

These examples will show the methods, advantages, and drawbacks of merger adjustment. 

Readers will note references to the types of information needed to merger adjust banking 

data. The appendix contains instructions on where to find and how to use this publicly available information.

Example One: Tracking the Number of Offices of Large Institutions

In this example, we will consider how many offices today’s four largest FDIC-insured institutions have operated since 1994. The chart on page 33 shows the number of offices operated since 1994 by the four largest FDIC-insured institutions, measured by total assets, as of 

June 30, 2018. The chart on page 33 shows both a merger-adjusted series, represented by light 

blue bars, and an unadjusted series, represented by dark blue bars.

The adjusted series is made by adding the number of offices of the four largest banks 

to the number of offices of all banks they acquired in every quarter during the analysis 

period.5 Suppose that Bank A, one of today’s four largest banks, acquired two other banks 

between 1994 and today: Bank B in 2001 and Bank C in 2007. To merger adjust the office 

count for Bank A, analysts would add to the offices of Bank A those of Bank B between 1994 

and 2001, and those of Bank C between 1994 and 2007. In other words, the analyst treats 

the offices of Bank B and Bank C as belonging to Bank A as of the period when the analysis 

begins.6

5 The exception is institutions newly chartered during or after 1994 that were acquired by one of the four largest banks. The office 

count of a newly chartered and later acquired institution is added to that of whichever of the four largest banks acquired it as of 

the new institution’s first Call Report filing.

6 To elaborate, suppose Bank A had ten offices in 1994, while Bank B had five offices and Bank C had one office. Suppose also that 

Bank B opened a sixth office in 1999. The unadjusted office counts of the three banks over time are as follows: Bank A, ten offices 

between 1994 and 2000, sixteen offices between 2001 and 2006, and seventeen offices between 2007 and today. Bank B had five 

offices between 1994 and 1998, and six offices between 1999 and 2000. Bank C had one office between 1994 and 2006. Adjusting 

for mergers, Bank A has 16 offices between 1994 and 1998, and 17 offices between 1999 and today. Bank A’s merger-adjusted office 

growth rate between 1994 and today was 6.25 percent, compared with an unadjusted rate of 70 percent.
FDIC QUARTERLY 33

MERGER ADJUSTING BANK DATA: A PRIMER

Number of Oces Held by Banks 
at Became the Four Largest by June 2018

March 31, 1994, to June 30, 2018

Source: FDIC.

0

5,000

10,000

15,000

20,000

25,000

30,000

1994 1997 2000 2003 2006 2009 2012 2015 2018

Merger Adjusted: Held by Banks and T hrif ts 

Ultimately Acquired by the Four Largest Banks

Not Merger Adjusted: Held by Banks T hat 

Became the Four Largest in June 2018

The unadjusted series shows that the number of offices of the four institutions has increased. 

But have the banks opened new offices? Or were the offices acquired from other banks? The 

adjusted series shows that the total number of offices operated by the four largest banks, and 

by all the banks they ultimately acquired at some point during the period, has declined since 

1994. A more thorough analysis could determine how much of the decline is attributable 

to office closures by the four largest banks, and how much is attributable to office closures 

made by the acquired banks before they were acquired.

By analyzing the effects of mergers in this way, analysts get a different view of how acquisitions affected the number of offices, as well as of the net effect of branching and acquisitions 

of the four largest banks on the total number of U.S. banking offices.

Both series in the chart above convey useful information. The unadjusted series depicts how 

today’s four largest banks grew their office networks as they became the largest banks. The 

adjusted series depicts that the number of offices operated by the four largest banks and the 

banks they acquired has declined, and suggests the need for further analysis of which banks 

closed offices and why.7

 Neither series alone presents a full picture, especially not without an 

accompanying discussion of underlying data and assumptions.

Example Two: Adjusting Balance Sheet Data

Community banks play an important role in small business lending, so a researcher may 

want to determine whether small business lending is growing at community banks. Finding 

a correct answer could require the researcher to merger adjust the balance sheet items that 

reflect small business lending.8 This example describes how balance sheet items are merger 

adjusted in the FDIC’s QBP.

7 FDIC analysts examined trends in offices between 2012 and 2017. They found that the aggregate decline in total offices over this 

period was driven by larger institutions reducing the number of offices they operate. Among institutions that closed offices on net 

between 2012 and 2017, average total assets were approximately $12.4 billion in 2017, compared with approximately $1.7 billion 

among institutions that opened offices, and approximately $630 million among institutions that neither opened nor closed offices 

on net. Other factors correlated with closing offices between 2012 and 2017 include reporting high per-office premises expenses 

in 2012, and having offices located in counties with high rates of population loss. See Nathan L. Hinton, Derek K. Thieme, and 

Angela N. Woodhead, “Factors Shaping Recent Trends in Banking Office Structure for Community and Noncommunity Banks,” 

FDIC Quarterly, vol. 11 (4), 2018. https://www.fdic.gov/bank/analytical/quarterly/2017-vol11-4/fdic-v11n4-3q2017-article1.pdf. 8 The specific data items on the Call Report capture small loans to businesses and farms, which include commercial and industrial 

loans and loans secured by nonfarm nonresidential properties, with original balances of $1 million or less, as well as loans to 

finance agricultural production, and loans secured by farmland, with original balances of $500,000 or less. We may reasonably 

suppose that loan size will increase as the size of a business receiving the loan increases, so small loans to businesses are more 

likely to be small business loans compared with large loans to businesses. However, the Call Report data items likely understate 

the true amount of small business loans originated by banks, especially among banks with less than $10 billion in assets. See 2018 

FDIC Small Business Lending Survey, FDIC pp. 9–19. https://www.fdic.gov/bank/historical/sbls/full-survey.pdf.
2 0 1 9  •  Volume 1 3 • Number 1

34 FDIC QUARTERLY

Merger adjusting would not be necessary if the question was: What is the share of small business loans on the balance sheets of community banks, compared with noncommunity banks, 

operating at any given time over the period between 1994 and 2018?

The subject of the question above is not a specific group of banks at a particular point in 

time; rather, it is any community bank operating from 1994 to 2018. Also, if one views the 

question as how the changing structure of the industry affects where loans are housed on 

bank balance sheets by type of institution, it would not be appropriate to remove the effects 

of mergers from the data.

However, what if the question was: How much did the community banks that existed on 

June 30, 2018, grow their loans over the year ending on that date? The subject of this question is community banks as of June 30, 2018, and should be answered by describing actual, 

or “organic,” loan growth, not loan growth that occurs when one bank buys another. Given 

the nature of the question, the researcher should merger adjust the balance sheet data from a 

year ago.

To merger adjust the balance sheet data, the researcher identifies all institutions acquired 

between June 30, 2017, and June 30, 2018, and combines the June 30, 2017, balance sheets 

of the acquired institutions with the balance sheets of their acquirers. Any institution that 

closed without an acquirer, was acquired by a nonbank such as a credit union, or relinquished 

FDIC insurance between June 30, 2017, and June 30, 2018, would be dropped from the June 

30, 2017, dataset. Finally, the community bank designations as of June 30, 2018, would be 

used for both the June 30, 2018, dataset and the June 30, 2017, dataset to aggregate the results 

for community and noncommunity banks. In addition to accounting for structural change 

over the intervening year, merger adjusting allocates loan balances as of June 30, 2017, 

according to an institution’s June 30, 2018, community bank designation (Tables 1 and 2).9

As shown in Tables 1 and 2, following the steps described above yields merger-adjusted 

growth rates of small business loans between June 30, 2017, and June 30, 2018, of 3.1 percent 

at community banks, compared with 1.4 percent at noncommunity banks. Without adjusting for mergers, growth over the past year at community banks was 0.3 percent, and growth 

at noncommunity banks was 3.4 percent.

Table 1

Merger Adjustment of Small Business Loans at Community Banks

June 30, 2017 June 30, 2018 Growth

Step Unadjusted Loan Balances (Thousands) $296,787,281 $297,665,043 0.3%

1 Subtract the loans of community banks that 

became noncommunity banks during the year -$4,916,746

2 Add the loans of noncommunity banks that 

became community banks during the year +$3,844,040

3 Subtract the loans of community banks 

acquired by noncommunity banks -$7,159,659

4 Add the loans of noncommunity banks acquired 

by community banks +$226,678

5

Subtract the loans of community banks that 

closed but were not acquired by another FDICinsured institution-$118,350

Merger-Adjusted Loan Balances (Thousands) $288,663,244 $297,665,043 3.1%

Source: FDIC.

9 Because Call Report and Community Bank data are subject to revisions, readers who perform their own merger adjustment on 

small business loan data, following the guide in the appendix, may calculate figures that do not match those in Table 1 or Table 2.
FDIC QUARTERLY 35

MERGER ADJUSTING BANK DATA: A PRIMER

The results of the loan growth comparison flip depending on the methodology used. Not 

merger adjusting, in this and similar examples, would emphasize the effects of acquisitions 

on which institutions are holding loans, whereas merger adjustment measures the actual or 

“organic” growth of loan portfolios at open institutions.

Tables 1 and 2 show how merger adjustment accounts for structural change and for changes 

in the community bank designations at institutions. With the exception of institutions that 

close without an acquirer, are acquired by a nonbank, or relinquish FDIC insurance, line 

items subtracted from Table 1 are added to Table 2, and vice versa.

As Tables 1 and 2 show, no changes are made to the data for the most recent period when 

merger adjusting. However, some banks that were community banks in the previous period 

are treated in the analysis as noncommunity banks in the previous period, if they became 

noncommunity banks or were acquired by noncommunity banks during the period being 

analyzed. Similarly, if noncommunity banks became, or were acquired by, community banks 

during the interval, then they are treated as community banks in the previous period. Over 

this specific period—June 30, 2017, to June 30, 2018—eight institutions closed but were not 

acquired by other FDIC-insured institutions, and all of those that had small business loans 

were community banks. Those eight institutions are dropped from the June 30, 2017, dataset. 

The effect of dropping those institutions from the previous period’s dataset on the analysis is 

trivial in this case: their combined small business loans represented less than 0.05 percent of 

all small business loans at community banks. Nearly all FDIC-insured institutions that close 

are acquired by another FDIC-insured institution, so this effect is not likely to substantially 

change the results of merger-adjusted analysis of the banking industry.

Neither the unadjusted nor the adjusted calculation is wrong. However, the calculation that is not adjusted for mergers shows growth rates between two different groups of 

banks—community banks on June 30, 2017, and community banks on June 30, 2018—

without accounting for structural change or changes in community bank designations 

over the year.

Table 2

Merger Adjustment of Small Business Loans at Noncommunity Banks 

June 30, 2017 June 30, 2018 Growth

Step Unadjusted Loan Balances (Thousands) $397,980,014 $411,584,879 3.4%

1 Add the loans of community banks that became 

noncommunity banks during the year +$4,916,746

2 Subtract the loans of noncommunity banks that 

became community banks during the year -$3,844,040

3 Add the loans of community banks acquired by 

noncommunity banks +$7,159,659

4 Subtract the loans of noncommunity banks 

acquired by community banks -$226,678

5

Subtract the loans of noncommunity banks that 

closed but were not acquired by another FDICinsured institution-$0

Merger-Adjusted Loan Balances (Thousands) $405,985,701 $411,584,879 1.4%

Source: FDIC.
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36 FDIC QUARTERLY

Example Three: Adjusting Income Statement Data

Income statement data—information on the earnings and expenses of institutions—present 

special challenges. First, while balance sheet items measure assets and liabilities at a point in 

time, income statement items measure earnings and expenditure flows and are reported on 

a year-to-date basis. For example, net income reported on bank Call Reports as of June 30, 

2017, represents the first two quarters of net income in 2017. It would not be appropriate to 

compare it with net income reported as of September 30, 2017, which represents nine months 

of net income. This makes it important for researchers to determine whether the income 

statement variable they are using has been altered from the reported year-to-date value to 

show an annualized or quarterly figure.10

Another challenge is that earnings results for a single quarter tend to be more volatile than 

earnings for a full year. So, when looking at earnings trends over time, it sometimes can be 

important to consider whether one-time events led to particularly good or bad results in a 

particular quarter.

Finally, analysis of earnings trends is complicated by the fact that there are two general 

types of merger accounting methods: pooling-of-interests and acquisition.11 The Financial 

Accounting Standards Board voted to end the use of the pooling-of-interests method in 

2001. However, an analyst should be familiar with this method because it may still be used 

when accounting for mergers between entities under common control, such as those within 

the same bank holding company.12 In the pooling-of-interests method, the reported assets, 

liabilities, and income of the two entities that merged are simply added together, as if they 

had always operated as a single entity.

In contrast, the acquisition method of accounting is used in the majority of bank mergers. It 

requires that the assets of the acquired institution be recorded at fair value.13 Income that the 

acquired institution earned before the acquisition is not reported as income of the acquirer, 

even if it was earned during the same calendar year. Rather, the acquiring institution reports 

income generated from the acquired institution beginning on the date of the merger.

To illustrate the difference between the treatment of earnings when a merger is accounted for 

under acquisition accounting compared with pooling of interests, consider two hypothetical institutions that each earn net income of $25 per quarter at all times. Net income at each 

of these institutions is $100 per year, for a total of $200 per year. Suppose that one institution acquires the other on July 1, 2018. If this merger were accounted for like a pooling-ofinterests merger (this would be permissible only if both institutions were part of the same 

holding company), then the acquirer’s year-end 2018 Call Report would show $200 in fullyear net income, since the two institutions’ income amounts would be added together as if 

they had been a single entity for all of 2018.

10 Users of the FDIC’s Statistics on Depository Institutions (SDI) comparison tool can choose year-to-date or quarterly 

calculations of income and expense items. However, income and expense items from the bulk download of quarterly SDI data for 

all FDIC-insured institutions are only year-to-date.

11 Another merger accounting method, called pushdown, exists as well. Pushdown mergers represent a subset of acquisition 

mergers. An entity acquired through a pushdown merger continues to exist separately from its acquirer. However, its assets and 

liabilities will be restated at fair value (generally, fair value is the current market value) rather than book value (the price at which 

they were acquired minus depreciation, amortization and any impairment charges) and the difference between fair value and the 

price paid for the assets and liabilities will be recorded as goodwill for the acquirer. Most assets and liabilities would have been 

reported at book value by the acquired entity in its previous Call Report filings, so pushdown mergers change the reported values 

of some balance sheet items for the acquired institution and the acquirer. However, there is no way to tell what the values of those 

items would have been had the merger not occurred. There is no need to perform merger adjustment in a pushdown merger, 

because the acquired entity continues to exist. 

12 See “Transactions between entities under common control,” under the “Business Combinations” entry, in the glossary of 

Instructions for Preparation of Consolidated Reports of Condition and Income for a Bank With Domestic Offices Only and Total 

Assets Less Than $1 billion, September 2018, Page A-16, https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC051_201809_i.pdf. 13 Fair value and book value are defined in footnote 11. In a pooling-of-interests merger, the acquiring entity assumes the assets 

and liabilities of the acquired entity at book value, while in acquisition mergers the assets and liabilities are assumed at fair value. 

In both pooling-of-interests and acquisition mergers, the acquired entity ceases to exist.
FDIC QUARTERLY 37

MERGER ADJUSTING BANK DATA: A PRIMER

Since the two institutions earned a combined $200 in 2017, and the acquiring institution 

reports income of $200 in 2018, merger-adjusted income growth as measured using the 

approaches described thus far would be zero, the conceptually correct answer in this idealized example. This example illustrates that in an actual merger in which pooling-of-interests 

accounting is applied, income statement items may be merger adjusted the same way as 

the balance sheet items in Example Two: the earnings and expenses of the acquiring and 

acquired institution are simply added together in its income statement.

If, however, the merger was accounted for using the acquisition method, the acquiring institution would report full year 2018 net income of $150: $100 from its own operations and $50 

from the acquired bank’s operations. The $50 earned by the acquired institution during the 

first half of 2018 is not added to the income earned by the acquiring institution.

If a merger adjustment is performed using the approaches described thus far, 2017’s 

combined income of $200 would be compared with this year’s reported income of $150, 

showing that income contracted 25 percent—an incorrect answer for this example. In 

general, during periods when most banks are reporting positive earnings, the balance sheet 

approach to merger adjustment will tend to understate income growth, since some of the 

earnings of banks acquired using acquisition accounting will not be reported in the current 

period but did appear in the base period.

Conversely, if the income of banks acquired using acquisition accounting is not included in 

the base period for the growth computation, income growth will tend to be overstated. In 

this example, the acquiring bank’s reported net income has increased 50 percent, from $100 

in 2017 to $150 in 2018. This 50 percent growth figure, while correct for the acquiring bank, 

is not the correct merger-adjusted income growth of zero for the two banks taken together.

This hypothetical example illustrates why special treatment is needed when calculating 

the merger-adjusted growth of income and expense items of banks involved in acquisition 

accounting mergers. As of fourth quarter 2018, the FDIC’s merger-adjusted income and 

expense growth calculation includes a portion of the acquired bank’s earnings or expenses in 

the base period, with the portion depending on the acquisition date.14

The approach can be illustrated using the two hypothetical banks discussed above. Recall 

from that example that one bank acquires the other in an acquisition accounting merger, 

with an effective date of July 1, 2018. Before the merger, each bank earned $25 in net income 

each quarter. The $50 in net income earned by the acquired bank during the first two quarters of 2018 is not added to the net income of the acquiring bank, following the rules of 

acquisition accounting. Thus, the acquiring bank reports a full-year 2018 net income of $150.

FDIC analysts merger adjust income statement items for the Community Bank Performance 

Section of the QBP by including a fraction of the acquired bank’s income in the base period 

equal to the fraction of the current reporting period during which the acquirer owns the 

acquired assets. The fraction, or discount factor, is calculated as the number of days during 

which the acquired bank has been owned by the acquirer during the year, divided by the 

number of days that have elapsed since the beginning of the year, as of the end of the current 

reporting period. In this case, the end of the current reporting period—December 31, 2018—

covers all of 2018. The merger is supposed to have occurred midway through the year, so the 

discount factor is 0.5.15

14 This is a refinement of an earlier approach.

15 If the current reporting period was instead the third quarter of 2018, then the discount factor would be 92/273, or approximately 

one-third. As of the end of third quarter 2018, the acquired bank has been owned by the acquirer for 92 days, and 273 days of 

2018 have elapsed. As another example, if the merger had occurred in November 2017, the acquiring bank would have owned the 

acquired assets for all of 2018 and the discount factor would equal 1.
2 0 1 9  •  Volume 1 3 • Number 1

38 FDIC QUARTERLY

As it applies to the example, the approach would involve multiplying the 2017 net income of 

the acquired bank by the discount factor of 0.5. The result is added to the 2017 net income 

of the acquiring bank. The 2017 net income of each bank is $100, so $50 is added to the $100 

earned in 2017 by the acquiring bank, to bring the acquiring bank’s merger-adjusted 2017 

net income to $150. Since the acquiring bank reports $150 in net income for 2018, mergeradjusted growth is zero, the correct answer for this example. Put in simple terms, at year-end 

2018, the acquiring bank is reporting full-year earnings on its own assets and half a year’s 

earnings on the acquired assets, so a consistent base-year comparison should include its own 

2017 earnings plus half the 2017 earnings of the acquired bank.16

This hypothetical example makes clear that the method of merger-adjusting income statement items to calculate growth rates matters greatly at the level of individual banks involved 

in mergers. Income growth rates for large groups of banks will also differ depending on 

how acquisition accounting mergers are handled by the merger adjustment method, but the 

differences in growth rates across different merger adjustment methods will be much smaller 

when the group of banks analyzed is large, since only a small portion of the banks in a large 

group will have been involved in an acquisition accounting merger over a one-year period.

The acquisition accounting adjustment is only one of the steps needed to calculate the 

merger-adjusted income growth of a group of banks. The remaining steps closely parallel 

the merger adjustment of balance sheet items shown in Tables 1 and 2. Tables 3 and 4 show 

the steps involved in calculating merger-adjusted net income growth at community and 

noncommunity banks between June 30, 2017, and June 30, 2018.

Table 3

Merger Adjustment of Year-to-Date Net Income at Community Banks 

June 30, 2017 June 30, 2018 Growth

Step Unadjusted Net Income (Thousands) $11,159,904 $12,453,289 11.6%

1 Subtract the net income (or add the net loss) of community banks 

that became noncommunity banks during the year -$401,008

2 Add the net income (or subtract the net loss) of noncommunity banks 

that became community banks during the year +$161,453

3 Subtract the net income (or add the net loss) of community banks 

acquired by noncommunity banks in any type of merger -$361,772

4 Add the net income (or subtract the net loss) of noncommunity banks 

purchased in pooling-of-interests acquisitions by community banks +$0

5

Add the net income (or subtract the net loss) of noncommunity banks 

purchased in acquisition mergers by community banks, after 

discounting the net income or loss as described in the text

+$2,037

6

Subtract the net income (or add the net loss) of community banks 

purchased in acquisition mergers by other community banks, after 

discounting the net income or loss as described in the text

-$20,036

7

Subtract the net income (or add the net loss) of community banks 

that closed but were not acquired by another FDIC-insured institution +$10,291

Merger-Adjusted Net Income (Thousands) $10,550,869 $12,453,289 18.0%

Source: FDIC.

16 This illustration of discounting a prior period’s income or expense variable applies to items reported on a year-to-date basis. 

If an analyst wanted to merger adjust a quarterly income or expense variable, then the discount factor applied to the variable in 

the base period should equal the share of the current reporting quarter that the acquirer has owned the acquired institution. For 

example, if Bank A acquired Bank B exactly halfway through fourth quarter 2018, and an analyst wished to merger adjust Bank 

A’s quarterly net income reported in fourth quarter 2017, then Bank B’s quarterly net income from fourth quarter 2017 would be 

multiplied by 0.5, the share of fourth quarter 2018 during which Bank A owned Bank B. If an analyst wanted to merger adjust 

Bank A’s quarterly net income reported in third quarter 2018, the same discount factor could be applied to Bank B’s quarterly net 

income from third quarter 2018.
FDIC QUARTERLY 39

MERGER ADJUSTING BANK DATA: A PRIMER

Table 4

Merger Adjustment of Year-to-Date Net Income at Noncommunity Banks

June 30, 2017 June 30, 2018 Growth

Step Unadjusted Net Income (Thousands) $80,782,163 $103,606,302 28.3%

1 Add the net income (or subtract the net loss) of community banks 

that became noncommunity banks during the year +$401,008

2 Subtract the net income (or add the net loss) of noncommunity banks 

that became community banks during the year -$161,453

3 Subtract the net income (or add the net loss) of noncommunity banks 

acquired by community banks in any type of merger -$14,299

4 Add the net income (or subtract the net loss) of community banks 

purchased in pooling-of-interests acquisitions by noncommunity banks +$22,035

5

Add the net income (or subtract the net loss) of community banks 

purchased in acquisition mergers by noncommunity banks, after 

discounting the net income or loss as described in the text

+$291,461

6

Subtract the net income (or add the net loss) of noncommunity banks 

purchased in acquisition mergers by other noncommunity banks, 

after discounting the net income or loss as described in the text

-$16,050

7

Subtract the net income (or add the net loss) of noncommunity banks 

that closed but were not acquired by another FDIC-insured institution -$58,289

Merger-Adjusted Net Income (Thousands) $81,246,576 $103,606,302 27.5%

Source: FDIC.

Four Caveats Regarding 

Merger Adjustment

Merger adjusting bank data accounts for the fact that banks’ balance sheets and income 

statements often change significantly as the result of a merger. However, assets and liabilities can move from one institution to another for other reasons. For example, an acquiring institution may assume some of the assets and liabilities of the institution it acquires, 

while other assets and liabilities could be purchased by other banks. When a bank fails, for 

instance, some of its assets and liabilities may be acquired by an institution other than the 

institution that buys the failed bank. Also, banks may purchase assets or offices from other 

open and operating banks. In those ways the assets and liabilities, as well as the income and 

expenses that those assets and liabilities generate, move between banks that did not merge. 

The FDIC does not collect data about these types of transactions, so merger adjustment does 

not control for their effects.

A second caveat is that merger adjustment is typically done over a short interval, up to 

approximately five years. It is less common to merger adjust historical data covering periods 

longer than five years because any merger adjustment introduces a phenomenon called survivor bias.

Survivor bias is the tendency for weaker institutions that fail or are acquired by stronger 

institutions to be excluded from performance analyses because they no longer exist. Since 

merger adjustment typically considers a set of institutions as of a recent date and studies 

their performance over time, it analyzes the performance only of institutions that did not fail 

or merge over a particular period. Survivor bias increases as the length of the period under 

consideration grows. A way to reduce survivor bias is discussed below, followed by a discussion of how to interpret merger-adjusted data that span a long time interval.
2 0 1 9  •  Volume 1 3 • Number 1

40 FDIC QUARTERLY

One way to reduce survivor bias is to include asset values from institutions that closed without an acquirer, were acquired by nonbanks, or relinquished FDIC insurance. For example, 

when merger adjusting small business loan data, the balances at such institutions could have 

been assigned a community bank designation as of June 30, 2017, since in that example all 

small business loans of institutions that closed and were not acquired by another FDICinsured institution belonged to community banks as of that date. The assets and liabilities of 

those institutions would be assigned values of zero as of June 30, 2018 since those institutions 

ceased to exist over the course of the next year. Then, the growth rates calculated between 

June 30, 2017, and June 30, 2018, for community and noncommunity banks may be lower 

than the growth rates calculated based on dropping these institutions from the data.17

While including balances from institutions that close without an acquirer, are acquired by 

nonbanks, or relinquish FDIC insurance helps reduce survivor bias, the effect is likely to be 

small. The largest component of survivor bias cannot be completely eliminated: financial 

performance of acquired institutions may be weaker than that of institutions that are not 

acquired over any given period.18

A third caveat relates to how one interprets the results of merger adjustment. By adding the 

loans, deposits, or offices reported in past periods by unaffiliated institutions in a merger 

adjustment, we are conducting a counterfactual analysis in the sense that the combined institutions in those past periods exist only hypothetically. For example, in the chart on page 33, 

the merger-adjusted series speaks to the cohort of today’s four largest institutions together 

with all the institutions they acquired since 1993, but specifically does not suggest that 

today’s four largest institutions had nearly 25,000 banking offices in 1994. The researcher 

and the user of the research need to keep in mind that the analysis is simply a useful tool 

for addressing questions involving the performance of a group of institutions over time, 

where correcting for the effects of mergers is important. Care should be taken when presenting merger-adjusted data covering a long interval of time, so that readers do not draw the 

conclusion that a particular institution, or set of institutions, existed and generated that data.

Finally, merger adjusting income statement items when acquisition accounting is used presents researchers with a problem: how to adjust in a way that avoids understating or overstating growth. If income statement items of banks acquired using acquisition accounting are 

included in the base period, then income growth may be underestimated. If these items are 

excluded from the base period, income growth may be overestimated. Including a portion of 

the acquired banks’ income in the base period, as described in this article, is a way to address 

the conceptual issues involved in measuring income growth for banks involved in acquisition accounting mergers.

17 To return to Example Two, a total of $118,350,000 in small business loans belonged to community banks as of June 30, 2017, and 

were dropped from the merger-adjusted total because the institutions closed without an acquirer, were acquired by a nonbank, 

or relinquished FDIC insurance. Adding that amount back to the merger-adjusted total and recalculating yields growth of 

3.08 percent in small business loans at community banks between June 30, 2017, and June 30, 2018, compared with 3.12 percent 

computed using the approach in Example Two.

18 FDIC analysts compared acquired community banks with their non-acquired peers from 2010 through 2016 and found that 

the pretax return on assets at acquired community banks was 30 basis points lower than that at non-acquired community banks 

over the four-quarter period ending one year before the acquisition. Asset quality, however, was found to be better at acquired 

community banks. See Eric C. Breitenstein and Nathan L. Hinton, “Community Bank Mergers Since the Financial Crisis: How 

Acquired Community Banks Compared With Their Peers,” FDIC Quarterly 11 no. 4, 2018, https://www.fdic.gov/bank/analytical/

quarterly/2017-vol11-4/fdic-v11n4-3q2017-article2.pdf. It is possible that these results reflect the unique economic environment 

that followed the financial crisis and Great Recession.
FDIC QUARTERLY 41

MERGER ADJUSTING BANK DATA: A PRIMER

Conclusion Merger adjustment takes into account the structural change that has occurred over a particular period. The balance sheet, income statement, or nonfinancial items of institutions that

are acquired during the period are added to the acquirer’s balance sheet, income statement,

or nonfinancial data. This way the items appear on the acquirer’s books at the beginning of

the period over which the analysis is being conducted.

FDIC analysts frequently use merger adjustment as a tool to standardize comparisons over

time. For example, merger adjustment is used when reporting the year-over-year performance of community banks in the Quarterly Banking Profile. Merger adjustment can also

be used to provide context to questions about nonfinancial data in which merger activity is

important, as shown in Example One.

Whether data should be merger adjusted depends on the question the researcher is trying

to answer. Questions about the performance of today’s institutions over a previous period,

such as their loan or income growth over the previous year, should be answered with merger

adjusted data so that only one group’s performance is evaluated.

Four caveats associated with merger adjustment are important to keep in mind. First, merger

adjustment does not perfectly control for the movement of assets and liabilities between 

institutions in different industry subgroups since institutions may acquire the assets and 

liabilities of other institutions in the normal course of business, even though no merger 

occurs. Second, merger adjustment introduces survivor bias since it measures the performance of the currently open institutions in a group, which tend to be better performers than 

institutions that left the group through acquisitions or otherwise ceased operations. Third, 

when data covering many years of observations are merger adjusted, it is important to 

remember that the institutions have been combined in past periods for analysis purposes but 

were not combined as legal entities. Finally, merger adjustment of income statement items 

requires special care.

Keeping those caveats in mind, merger adjustment is a valuable tool that can shed light

on important questions in the analysis of banking trends. Examples covered in this article

include how the branching and acquisition activity of large banks may have contributed to

changes in their number of banking offices over time, and how to measure the growth of

small business loans and net income at community banks given ongoing merger activity.

For these questions, and questions of a similar form that involve tracking specific groups of

banks over time, merger adjustment is a staple of accurate financial industry analysis.

Authors:

Eric C. Breitenstein

Financial Economist

Division of Insurance and Research

Derek K. Thieme

Economic Analyst

Division of Insurance and Research
2 0 1 9  •  Volume 1 3 • Number 1

42 FDIC QUARTERLY

Appendix: 

Merger Adjustment 

Steps and Data Needed

19 This appendix describes how to merger-adjust only balance sheet items, and only from a historical quarter to the most recent 

quarter, as identified by the latest quarter for which the Quarterly Banking Profile has been published. Readers who wish to 

adjust from one historical quarter to a later historical quarter should replace references to “ULTIMATE_CERT,” below, with 

“PROXIMATE_CERT.” PROXIMATE_CERT identifies the initial acquiring institution. Determine whether the initial acquiring 

institution has itself been acquired by checking the values of PROXIMATE_CERT against the values of CERT in the Community 

Bank Structure Reference Data File that have values of RPT_STOP_CALLYM before the later historical quarter. For example, 

if CERT A has a PROXIMATE_CERT of B, and B has a PROXIMATE_CERT of C, and C has a PROXIMATE_CERT of D, then 

replace the values of PROXIMATE_CERT for A and B with D. Continue in this fashion until there are no remaining values of 

PROXIMATE_CERT that were themselves acquired before the later historical quarter. This ensures that each PROXIMATE_

CERT will have a valid community bank designation as of the later historical quarter. 

This appendix provides information on how to access the necessary data and merger adjust 

balance sheet items, using Example 2 presented in the article as a guide.19

The Three Steps in a Merger Adjustment

1. The data to be adjusted must have a variable that uniquely identifies institutions. FDIC 

analysts typically use CERT, which is an institution’s FDIC insurance certificate number.

2. Because the merger accounting method and merger date matter when adjusting income 

statement items, it may be necessary to determine what type of merger accounting was 

used and when the merger occurred. This appendix describes the merger adjustment 

of balance sheet items, so it is not necessary to pay attention to the merger accounting 

method. However, the merger accounting method is provided by the MERGMETH variable on the Community Banking Structure Reference Data file, described below.

3. To merger adjust the data to reflect industry structure as of the most recent quarter of data 

published in the Quarterly Banking Profile, replace the value of CERT representing the 

acquired institution with the value of CERT representing the acquired institution’s current 

owner from the Community Banking Structure Reference Data file for all periods in the 

analysis that come before the acquisition. Acquired institutions are listed by their CERT 

values in the Community Banking Structure Reference Data file. The value of CERT 

which represents an acquired institution’s current owner is displayed in the ULTIMATE_

CERT variable in the Community Banking Structure Reference Data file. To complete the 

adjustment, sum the data by CERT once the acquired institution’s value has been replaced.

Downloading the Community Banking Structure Reference Data

The Community Banking Structure Reference Data include a list of every FDIC-insured 

institution that started or stopped filing a Call Report or Thrift Financial Report since first 

quarter 1984. This list is provided by the variable CERT, which identifies an institution by its 

unique FDIC insurance certificate number. A researcher may use CERT on this file to join it 

with other FDIC data that the researcher wishes to merger adjust and that also includes the 

variable CERT.

For those institutions that stopped filing because they were acquired by another FDICinsured institution, the FDIC certificate number of the institution that currently owns the 

acquired institution is given by the variable ULTIMATE_CERT.

The Community Banking Structure Reference Data file is available here: https://www.fdic.

gov/regulations/resources/cbi/data/community-banking-structure-reference-data.zip.

The Notes to Users page describes the data file layout and each of the variables. It is available 

here: https://www.fdic.gov/regulations/resources/cbi/data/public-ref-readme.html.

Those interested in performing their own merger adjustments should review the Notes to 

Users page. A brief summary of the data file and variables necessary is below.
FDIC QUARTERLY 43

MERGER ADJUSTING BANK DATA: A PRIMER

A Short Guide to the Community Banking Structure Reference Data File

A row is generated in this file each time an institution starts or stops filing a Call Report. 

Thus, if an institution filed its first Call Report in Q4-2000 and filed its last in Q3-2010, then 

it will appear in the file twice. One record is filled with “start” information, the other with 

“stop” information. To see only rows of institutions that stopped reporting, filter for nonmissing values of RPT_STOP_TYPE. This summary description focuses only on institutions 

that stopped reporting.

Once the data have been filtered to show only rows with non-missing values of RPT_

STOP_TYPE, then users will see rows of institutions that stopped filing Call Reports 

identified by CERT, along with variables that indicate the calendar year and quarter 

during which the institution stopped reporting (RPT_STOP_CALLYM), the reason why 

the institution stopped reporting (RPT_STOP_TYPE), the current owner of the institution, if any, (ULTIMATE_CERT), and the merger accounting method used, if applicable 

(MERGMETH).

The period during which an institution stopped reporting is expressed as the concatenation 

of the year and a two-digit representation of the quarter. Q1 is represented by 03, Q2 is represented by 06, and so on. For example, an institution that stopped reporting during Q3-2017 

would have a value of 201709 for RPT_STOP_CALLYM.

The reason an institution stopped reporting is represented by an integer ranging from one 

to five. One represents failure, two represents a merger of institutions within the same holding company, three represents a merger between unaffiliated institutions, four represents 

a voluntary closing, and five represents all other liquidations, closings, and the voluntary 

termination of FDIC insurance.

If an institution was acquired, MERGMETH records the type of merger accounting used 

in an integer ranging from one to three. One represents pooling-of-interests accounting, 

two represents acquisition accounting, and three represents acquisition accounting for the 

purchase of a failed institution. If MERGMETH is missing or zero, then the institution that 

stopped reporting was not acquired by any other FDIC-insured institution. For example, an 

institution may fail without being acquired, voluntarily liquidate its assets, or be acquired by 

a nonbank, although the latter two events are relatively uncommon.

Downloading Bulk Financial and Demographic Data

The FDIC makes available a variety of financial and demographic data on insured institutions through the Statistics on Depository Institutions (SDI) web page: https://www5.fdic.

gov/sdi/download_large_list_outside.asp.

To calculate annual growth in an item between December 31, 2017, and December 31, 

2018, a researcher would download the zipped files named All_Reports_20171231 and 

All_Reports_20181231.

The SDI Glossary provides variable definitions, which may be downloaded from: 

https://www5.fdic.gov/sdi/SDIAllDefinitions_CSV.zip.

Working With the Data

To calculate annual merger-adjusted growth in small business loans at community banks, a 

researcher needs four items:

1. Each institution’s community bank designation as of December 31, 2018

2. Small business loans outstanding at each institution as of December 31, 2018

3. Small business loans outstanding at each institution as of December 31, 2017

4. A list of institutions acquired between December 31, 2017, and December 31, 2018, that 

identifies the owner of the acquired institution as of December 31, 2018
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44 FDIC QUARTERLY

Items one and two can be found in the zipped file named All_Reports_20181231. Within this 

file is a spreadsheet named All_Reports_20181231_Small Business Loans, which has the variables needed to identify the amounts and number of small business loans outstanding, and 

the community bank designation, of each FDIC-insured institution on December 31, 2018.20

Item three is available from a similarly named spreadsheet that can be found in the zipped 

file named All_Reports_20171231.

Finally, item four is available from the Community Banking Structure Reference Data file.

While it is possible to manually merger-adjust the data, it is easier and faster to use data 

manipulation software. The sample code below was written for use in SAS.

Import the Data

Extract each file from the PKZIP Archive before proceeding. To ensure that numeric variables from the downloaded files are stored as numeric variables in the SAS datasets, save 

each file as an Excel Workbook (with the extension .XLSX), or use Excel or other spreadsheet 

software to change the format of each numeric variable used in the analysis to “Number” as 

described in the footnote.21

Merger Adjusting in SAS:

/*

The sample program below was written in SAS version 9.4,running on 

Windows 7. It may require modification to run on earlier SAS versions 

or on different operating systems.

Once the location of the XLSX files are specified as described, this 

program may be pasted into a SAS Program Editor window and run after 

ensuring that the file names have pasted correctly, including any 

dashes contained therein, removing any line brakes in file names and 

variable labels, and replacing all the quotation marks. More steps 

may be necessary depending on how your version of SAS renders the 

text and symbols from the PDF version of the program.

More advanced users can consolidate some of the steps below.

Import each of the following XLSX files into SAS datasets:

All_Reports_20181231_Small Business Loans

All_Reports_20171231_Small Business Loans

community-banking-structure-reference-data

Replace the text “REPLACE WITH FILE PATH” with the appropriate file 

path. For example, C:\LOCAL DATA\<filename>

*/

20 The variables identifying the amounts outstanding of the four types of small business loans are LNCI4 (commercial and 

industrial loans), LNRENR4 (commercial real estate loans), LNAG4 (agricultural production loans), and LNREAG4 (farmland 

loans). The variable CB equals 1 if an institution meets the FDIC’s definition of community bank that quarter, and 0 otherwise. 

The FDIC refreshes the entire historical community bank designation list every quarter to account for data resubmissions, 

corrections, and updates. When performing an analysis that relies on community bank designations that are more than five years 

old, a researcher should use the historical designations from the spreadsheets available under the heading Current Community 

Banking Reference Data on the FDIC Community Banking Study Reference Data web page, under the subheading Historical 

Community Banking Reference Data. These spreadsheets are available at https://www.fdic.gov/regulations/resources/cbi/data.

html. Questions may be sent to CommunityBanking@FDIC.gov. 21 In Excel, for example, to ensure that CERT is stored as a number, open the downloaded file, select all the rows below CERT, 

right-click using the mouse while the cursor is over the selected rows, left-click on “Format Cells,” select “Number” from the 

Category list, and set the number of decimal places to zero. Apply this format to every observation of each numeric variable used 

in the analysis. 
FDIC QUARTERLY 45

MERGER ADJUSTING BANK DATA: A PRIMER

PROC IMPORT REPLACE

OUT = SMLLNS1712

DATAFILE = “REPLACE WITH FILE PATH\All_Reports_20171231_Small 

Business Loans.xlsx”

DBMS = xlsx;

RUN;

PROC IMPORT REPLACE

OUT = SMLLNS1812

DATAFILE = “REPLACE WITH FILE PATH\All_Reports_20181231_Small 

Business Loans.xlsx”

DBMS = XLSX;

RUN;

PROC IMPORT REPLACE

OUT = STRUC

DATAFILE = “REPLACE WITH FILE PATH\community-banking-structurereference-data.xlsx”

DBMS = XLSX;

RUN;

/*

The files SMLLNS1712 and SMLLNS1812 have variables which detail 

the amount outstanding, and number of, each of the four types of 

small business loan: agricultural production loans, farmland loans, 

commercial real estate loans, and commercial and industrial loans.

First, sum these four variables (LNREAG4, LNAG4, LNRENR4, LNCI4) 

to get an institution’s total amount outstanding of small business 

loans.

Second, drop the variable CB from the file SMLLNS1712. The file 

SMLLNS1812 has the most recent community bank flag, which we will use 

to group small loan balances reported by institutions on the file 

SMLLNS1712.

Finally, both files contain information reported by insured branches 

of foreign banks. These institutions can be identified by their value 

of BKCLASS, which is “OI.” FDIC analysts typically exclude these 

institutions, or report them separately. Below, these institutions 

are dropped from the analysis.

*/

DATA LNS1712; /*Save the work in a new file.*/

SET SMLLNS1712;

WHERE BKCLASS ^= “OI”; /*Exclude insured branches of foreign 

banks*/

SMLLNS = SUM(LNAG4,LNREAG4,LNRENR4,LNCI4); /*New variable with 

all small loans*/

DROP CB;

RUN;
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46 FDIC QUARTERLY

DATA LNS1812; /*Save the work in a new file.*/

SET SMLLNS1812;

WHERE BKCLASS ^= “OI”; /*Exclude insured branches of foreign 

banks*/

SMLLNS = SUM(LNAG4,LNREAG4,LNRENR4,LNCI4); /*New variable with 

all small loans*/

RUN;

/*

The STRUC file has records for every institution that started or 

stopped filing a Call Report or Thrift Financial Report since 

Q1-1984.

Create a new file with records of institutions that stopped reporting 

during 2018.

*/

DATA STRUC2; /*Save the work in a new file.*/

SET STRUC;

WHERE 201712 < RPT_STOP_CALLYM <= 201812;

RUN;

/*

Create a new file by joining the variable CERT on the file STRUC2 to 

the same variable on the file LNS1712. Take the variables ULTIMATE_

CERT and RPT_STOP_TYPE from STRUC2 and add them to the new file.

Every institution identified by CERT on the file LNS1712 that 

closed during 2018 will have a value of RPT_STOP_TYPE, and, if an 

acquisition occurred, a value of ULTIMATE_CERT identifying the 

current owner.

*/

PROC SQL;

CREATE TABLE LNS1712B /*Save work in a new file*/

AS

SELECT A.*,

B.RPT_STOP_TYPE,

B.ULTIMATE_CERT

FROM LNS1712 AS A

LEFT JOIN

STRUC2 AS B

ON A.CERT = B.CERT;

QUIT;
FDIC QUARTERLY 47

MERGER ADJUSTING BANK DATA: A PRIMER

/*

Now, when RPT_STOP_TYPE is not missing, replace CERT on the file 

LNS1712B with ULTIMATE_CERT. Otherwise, leave CERT unchanged.

This is the first step in the merger adjustment.

The second step is to sum the values of SMLLNS by the variable CERT 

that has just been adjusted.

*/

/*Merger adjustment Step 1:*/

DATA LNS1712C; /*Save work in a new file*/

SET LNS1712B;

/*The line below swaps out the CERT of a closed bank

with the CERT of its current owner, if any.

*/

IF RPT_STOP_TYPE ^= . THEN CERT = ULTIMATE_CERT;

RUN;

/*Merger adjustment Step 2:

Now that CERT has been adjusted, acquiring banks appear in LNS1712C 

multiple times (once for their own reporting, and again for each 

bank they acquired). Banks that closed without an acquirer have 

values of CERT that are either zero or missing.

Sum the values of SMLLNS by CERT to complete the merger adjustment.

*/

PROC SUMMARY NWAY MISSING DATA = LNS1712C;

WHERE CERT NOT IN (. 0); /*Drop cases in which an institution closed 

without an acquirer*/

CLASS CERT;

VAR SMLLNS;

OUTPUT OUT = LNS1712D /*Save work in new file*/

SUM=;

RUN;

/*

Now join the community bank designations as of December 31, 2018, 

from the file LNS1812, using the variable CERT.

*/

PROC SQL;

CREATE TABLE LNS1712E /*Save work in new file*/

AS

SELECT A.*,B.CB

FROM LNS1712D AS A

LEFT JOIN

LNS1812 AS B

ON A.CERT = B.CERT;

QUIT;
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48 FDIC QUARTERLY

/*

The final step is to calculate the aggregate amount outstanding of 

small business loans, by community or noncommunity bank, in each 

period, and to calculate change over the year.

*/

/*

Aggregate small business loans outstanding at December 31, 2017 held 

by community and noncommunity banks.

*/

PROC SUMMARY NWAY DATA = LNS1712E;

CLASS CB;

VAR SMLLNS;

OUTPUT OUT = LNS1712F /*Save work in new file*/

SUM=;

RUN;

/*

Aggregate small business loans outstanding at December 31, 2018 held 

by community and noncommunity banks

*/

PROC SUMMARY NWAY DATA = LNS1812;

CLASS CB;

VAR SMLLNS;

OUTPUT OUT = LNS1812B /*Save work in new file*/

SUM=;

RUN;
FDIC QUARTERLY 49

MERGER ADJUSTING BANK DATA: A PRIMER

/*

The aggregate calculations may be combined into a single file by 

joining LNS1712F and LNS1812B using the community bank flag. The 

annual percentage change can also be calculated.

*/

PROC SQL;

CREATE TABLE CHANGE

AS

SELECT A.CB,

A.SMLLNS AS SMLLNS1712 FORMAT = DOLLAR16.

LABEL = “Merger adjusted Small Business Loans 

Q4–2017”,

B.SMLLNS AS SMLLNS1812 FORMAT = DOLLAR16.

LABEL = “Small Business Loans Q4-2018”,

(B.SMLLNS / A.SMLLNS) - 1 AS PCT_CHANGE FORMAT PERCENT8.1

LABEL = “Annual Merger adjusted Percentage Change 

in Small Business Loans”

FROM LNS1712F AS A

LEFT JOIN

LNS1812B AS B

ON A.CB = B.CB;

QUIT;