Quarterly Banking Profile Third Quarter 2008 

INSURED INSTITUTION PERFORMANCE 

n Asset-Quality Problems Continue to Depress Earnings 

n Net Income of $1.7 Billion Is Second-Lowest Since 1990 

n Loan-Loss Rate Rises to 17-Year High 

n Net Interest Margins Register Improvement 

n Nine Failures Are Highest Quarterly Total in 15 Years 

More Institutions Report Declining Earnings, 

Quarterly Losses 

Troubled assets continued to mount at insured commercial banks and savings institutions in the third quarter of 

2008, placing a growing burden on industry earnings. 

Expenses for credit losses topped $50 billion for a second 

consecutive quarter, absorbing one-third of the industry’s 

net operating revenue (net interest income plus total 

noninterest income). Third quarter net income totaled 

$1.7 billion, a decline of $27.0 billion (94.0 percent) 

from the third quarter of 2007. The industry’s quarterly 

return on assets (ROA) fell to 0.05 percent, compared to 

0.92 percent a year earlier. This is the second-lowest 

quarterly ROA reported by the industry in the past 18 

years. Evidence of a deteriorating operating environment 

was widespread. A majority of institutions (58.4 percent) 

reported year-over-year declines in quarterly net income, 

and an even larger proportion (64.0 percent) had lower 

quarterly ROAs. The erosion in profitability has thus far 

been greater for larger institutions. The median ROA at 

institutions with assets greater than $1 billion has fallen 

from 1.03 percent to 0.56 percent since the third quarter 

of 2007, while at community banks (institutions with 

assets less than $1 billion) the median ROA has declined 

from 0.97 percent to 0.72 percent. Almost one in every 

four institutions (24.1 percent) reported a net loss for the 

quarter, the highest percentage in any quarter since the 

fourth quarter of 1990, and the highest percentage in a 

third quarter in the 24 years that all insured institutions 

have reported quarterly earnings. 

Lower Asset Values Add to the Downward Pressure 

on Earnings 

Loan-loss provisions totaled $50.5 billion in the quarter, 

more than three times the $16.8 billion of a year earlier. 

Total noninterest income was $905 million (1.5 percent) 

lower than in the third quarter of 2007. Securitization 

income declined by $1.9 billion (33.0 percent), as 

reduced demand in secondary markets limited new securitization activity. Gains on sales of assets other than 

loans declined by $1.0 billion (78.7 percent) year-overyear, and losses on sales of real estate acquired through 

foreclosure rose by $518 million (588 percent). Among 

the few categories of noninterest income that showed 

Chart 1 Chart 2 

Earnings Weakness Persisted in the Third Quarter 

$ Billions 

Securities and Other Gains/Losses, Net 45.0 Net Operating Income 

40.0 36.9 38.0 38.1 36.8 35.3 35.6 

35.0 34.0 33.2 34.7 32.5 32.6 31.8 31.2 31.0 28.7 30.0 

25.0 

20.0 19.3 

15.0 

10.0 4.8 1.7 5.0 0.6 

0.0 

-5.0 

12 3412 34 123412 34 12 3 

2004 2005 2006 2007 2008 

Almost One in Four Institutions Was Unprofitable 

in the Third Quarter 

Insured Institutions with Third-Quarter Net Losses 

(Percent) 

30 

24% 25 

20% 

20 

15 

10 

5 

0 

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 

FDIC QUARTERLY 1 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

improvement, loan sales produced net gains of $166 

million in the third quarter, compared to $1.2 billion in 

net losses a year earlier, and trading revenue was up by 

$2.8 billion (129.2 percent). Sales of securities and other 

assets yielded net losses of $7.6 billion in the third quarter, compared to gains of $77 million in the third quarter 

of 2007. Expenses for impairment of goodwill and other 

intangible asset expenses were $1.8 billion (58.6 percent) 

higher than a year ago. 

Margin Improvement Provides a Boost to Net 

Interest Income 

One of the few relatively bright spots in third quarter 

results was net interest income, which was $4.4 billion 

(4.9 percent) higher than a year ago. The average net 

interest margin (NIM) in the third quarter was 3.37 

percent, unchanged from the second quarter but up 

from 3.35 percent in the third quarter of 2007. Two out 

of every three institutions reported margin improvement 

over second-quarter levels, but more than half of all 

insured institutions (54 percent) reported lower NIMs 

than in the third quarter of 2007. The year-over-year 

improvement in the industry’s NIM was concentrated 

among larger institutions. Higher margins helped offset 

sluggish growth in interest-earning assets. Earning assets 

increased by only $52.3 billion (0.5 percent) during the 

quarter, after shrinking by $33.6 billion (0.3 percent) in 

the second quarter. Over the 12 months ended September 30, the industry’s interest-earning assets were up by 

only 4.2 percent, the lowest 12-month growth rate in 

more than six years. 

Loan Losses Continue to Mount 

The industry reported year-over-year growth in net 

charge-offs for the seventh consecutive quarter. Net 

charge-offs totaled $27.9 billion in the quarter, an 

increase of $17.0 billion (156.4 percent) from a year 

earlier. Two-thirds of the increase in charge-offs 

consisted of loans secured by real estate. Charge-offs of 

closed-end first and second lien mortgage loans were 

$4.6 billion (423 percent) higher than in the third quarter of 2007, while charged-off real estate construction 

and development (C&D) loans were up by $3.9 billion 

(744 percent). Charge-offs of home equity lines of credit 

were $2.1 billion (306 percent) higher. Charge-offs of 

loans to commercial and industrial (C&I) borrowers 

increased by $2.3 billion (139 percent), credit card loan 

charge-offs rose by $1.5 billion (37.4 percent), and 

charge-offs of other loans to individuals were $1.7 billion 

(76.4 percent) higher. The quarterly net charge-off rate 

in the third quarter was 1.42 percent, up from 1.32 

percent in the second quarter and 0.57 percent in the 

third quarter of 2007. This is the highest quarterly net 

charge-off rate for the industry since 1991. The failure of 

Washington Mutual on September 25 meant that a 

significant amount of charge-off activity was not 

reflected in the reported industry totals for the quarter.1 

Growth in Reported Noncurrent Loans Remains High 

The amount of loans and leases that were noncurrent (90 

days or more past due or in nonaccrual status) increased 

1 Under purchase accounting rules that apply to bank mergers, income 

and expenses that have been booked by an acquired institution are reset to 

zero as of the date when a change in ownership occurs. Income and 

expenses that have been incurred prior to that date are reflected in adjustments to the assets, equity capital, and reserves of the acquired institution. 

Chart 3 Chart 4 

Rising Loss Provisions Remain the Most Significant 

Factor Affecting Industry Earnings 

3rd Quarter 2008 vs. 3rd Quarter 2007 

Community Bank Margins Improved in the 

Third Quarter 

Quarterly Net Interest Margin 

(Percent) ($ Billions) 

40 

35 

30 

25 

20 

15 

10 

5 

0 

-5 

-10 

33.8 

Negative 

Factors 

3.8 

-0.9 -7.7 

Increase in Decrease in Decrease in Increase in Loan Loss Noninterest Proceeds Noninterest Provision Income from Expense Securities Sales 

4.5 Assets < $1 Billion 

4 3.78% 

3.5 

3.32% 

3 

Assets > $1 Billion 

2.5 

1234123412341234123 

2004 2005 2006 2007 2008 

Positive 

Factor 

4.4 

Increase in 

Net Interest Income 

FDIC QUARTERLY 2 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

to $184.3 billion at the end of September. This is $21.4 

billion (13.1 percent) more than insured institutions 

reported as of June 30 and is up by $101.2 billion (122 

percent) over the past 12 months. The percentage of 

total loans and leases that were noncurrent rose from 

2.04 percent to 2.31 percent during the quarter and is 

now at the highest level since the third quarter of 1993. 

The growth in noncurrent loans during the quarter was 

led by closed-end first and second lien mortgage loans, 

where noncurrents rose by $9.6 billion (14.3 percent). 

Noncurrent real estate C&D loans increased by $6.9 

billion (18.1 percent), while noncurrent loans secured by 

nonfarm nonresidential properties rose by $2.2 billion 

(18.1 percent). Noncurrent C&I loans were up by $1.8 

billion (13.7 percent) during the quarter. 

Reserve Coverage of Noncurrent Loans Declines 

Loan-loss reserves increased by $11.7 billion (8.1 percent) 

during the quarter, the smallest quarterly growth in 

reserves since the third quarter of 2007. The industry’s 

ratio of reserves to total loans and leases increased from 

1.81 percent to 1.95 percent, its highest level since the 

first quarter of 1995. However, reserve growth did not 

keep pace with the growth in noncurrent loans, and the 

“coverage ratio” of reserves to noncurrent loans fell from 

89 cents in reserves for every $1.00 of noncurrent loans 

to 85 cents. This is the tenth consecutive quarter that the 

industry’s coverage ratio has fallen; it is now at its lowest 

level since the first quarter of 1993. 

Failure-Related Restructuring Contributes to a 

Decline in Reported Capital 

Total equity capital fell by $44.2 billion (3.3 percent) 

during the third quarter. A $14.6-billion decline in other 

Chart 5 

comprehensive income, driven primarily by unrealized 

losses on securities held for sale, was a significant factor 

in the reduction in equity, but most of the decline 

stemmed from the accounting effect of the failure of 

Washington Mutual Bank (WaMu).2 The WaMu failure 

had a similar effect on the reported industry totals for tier 

1 capital and total risk-based capital, which declined by 

$33.6 billion and $35.3 billion, respectively. Unlike equity 

capital, these regulatory capital amounts are not affected 

by changes in unrealized gains or losses on available-forsale securities. Almost half of all institutions (48.5 

percent) reported declines in their leverage capital ratios 

during the quarter, and slightly more than half (51.2 

percent) reported declines in their total risk-based capital 

ratios. Many institutions reduced their dividends to 

preserve capital; of the 3,761 institutions that paid dividends in the third quarter of 2007, more than half (57.4 

percent) paid lower dividends in the third quarter of 

2008, including 20.7 percent that paid no dividends. 

Third quarter dividends totaled $11.0 billion, a 

$16.9-billion (60.7-percent) decline from a year ago. 

Liquidity Program Provides a Boost to Asset Growth 

Total assets of insured institutions increased by $273.2 

billion (2.1 percent) in the third quarter, led by growth in 

balances at Federal Reserve banks (up $146.8 billion, or 

2 Prior to September 25, 2008, Washington Mutual FSB of Park City, Utah, 

an insured institution with $46 billion in assets and $29 billion in equity 

capital, was directly owned by Washington Mutual Bank of Henderson, 

Nevada. Under accounting rules, the subsidiary institution’s assets and 

liabilities were included in the consolidated financial data reported by the 

parent institution, resulting in double-reporting of some of the subsidiary’s financial data. The direct ownership relationship ended with the 

failure of the parent institution during the third quarter, at which point the 

subsidiary institution’s financial data were no longer double-reported. 

Chart 6 

Growth in Troubled Loans Remains High 

$ Billions 

55 Quarterly Net Charge-offs 

Quarterly Change in Noncurrent Loans 

45 

26.3 

35 16.3 19.6 27.9 

25 

10.9 

15 27.0 26.2 26.7 

8.9 21.4 8.5 

5 7.1 8.2 15.3 

5.5 6.1 6.4 3.5 4.8 3.8 

0.5 -5 -1.3 

1 2 3 4 1 2 3 4 1 2 3 

2006 2007 2008 

Consumer Loans Account for Two-Thirds of 

Quarterly Charge-offs Quarterly Net Charge-offs 

($ Billions) 

30 Loans to Commercial Borrowers 

Consumer Loans* 25 

20 

15 

10 

5 

0 12 3 4 1 2 34 12 34 1 2 3 4 1 2 34 12 3 4 1 2 34 1 2 3 4 1 2 3 

2000 2001 2002 2003 2004 2005 2006 2007 2008 

* Consumer loans include residential mortgage loans, home equity loans, credit card loans, and other 

loans to individuals. 

FDIC QUARTERLY 3 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

505 percent) and a $74.6-billion increase in asset-backed 

commercial paper holdings. A number of large banks 

experienced sizable deposit inflows during the quarter and 

elected to place a large share of these funds with Federal 

Reserve banks. The increase in holdings of commercial 

paper was attributable to the creation of a special lending 

facility—the Asset-Backed Commercial Paper Money 

Market Mutual Fund Liquidity Facility (AMLF)—by the 

Federal Reserve aimed at providing liquidity to money 

market mutual funds (MMFs) by funding bank purchases 

of asset-backed commercial paper from the MMFs.3 

Loans in categories experiencing the greatest credit-quality problems shrank in the third quarter. Residential mortgage loans declined by $52.1 billion (2.4 percent), while 

real estate C&D loans fell by $10.2 billion (1.6 percent). 

One of the few loan categories showing significant growth 

was real estate loans secured by nonfarm nonresidential 

properties, which increased by $24.4 billion (2.4 percent). 

Unused loan commitments declined by $298.1 billion (3.7 

percent) during the quarter. The decline was led by a 

reduction in unused credit card lines, which fell by $122.8 

billion (2.6 percent). 

Discount Window Borrowings Fuel a Surge in 

Nondeposit Liabilities 

Nondeposit liabilities increased by $162.5 billion (4.8 

percent) in the third quarter, as insured institutions 

increased their borrowings from the Federal Reserve’s 

Discount Window (which was used to fund the AMLF), 

as well as their advances from Federal Home Loan Banks. 

3 On September 19, the Federal Reserve instituted the Asset-Backed 

Commercial Paper Money Market Mutual Fund Liquidity Facility 

(AMLF) to restore liquidity to the market for commercial paper, and 

help money market mutual funds meet redemptions. 

Chart 7 

Securities sold under repurchase agreements registered 

strong growth, rising by $64.2 billion (11.2 percent). Total 

deposits increased by $154.8 billion (1.8 percent), as 

noninterest-bearing deposits in domestic offices rose by 

$175.7 billion (14.4 percent). The growth in deposits was 

concentrated in a few large banks. Deposits in foreign 

offices declined by $38 billion (2.5 percent). 

Nine Failures in Third Quarter Include Washington 

Mutual Bank 

The number of insured commercial banks and savings 

institutions fell to 8,384 in the third quarter, down from 

8,451 at midyear. During the quarter, 73 institutions 

were absorbed in mergers, and 9 institutions failed. This 

is the largest number of failures in a quarter since the 

third quarter of 1993, when 16 insured institutions 

failed. Among the failures was Washington Mutual 

Bank, an insured savings institution with $307 billion in 

assets and the largest insured institution to fail in the 

FDIC’s 75-year history. There were 21 new institutions 

chartered in the third quarter, the smallest number of 

new charters in a quarter since 17 new charters were 

added in the first quarter of 2002. Four insured savings 

institutions, with combined assets of $1.0 billion, 

converted from mutual ownership to stock ownership in 

the third quarter. The number of insured institutions on 

the FDIC’s “Problem List” increased from 117 to 171, 

and the assets of “problem” institutions rose from $78.3 

billion to $115.6 billion during the quarter. This is the 

first time since the middle of 1994 that assets of “problem” institutions have exceeded $100 billion. 

Author: Ross Waldrop, Sr. Banking Analyst 

Division of Insurance and Research 

(202) 898-3951 

Chart 8 

Earning Asset Growth Has Slowed Substantially 

Quarterly Change in Interest-Bearing Assets 

($ Billions) 

400 

350 

300 

250 

200 

150 

100 

50 

0 

-50 12 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 34 1 2 3 4 1 2 3 4 1 23 

2000 2001 2002 2003 2004 2005 2006 2007 2008 

2008 Is a Record Year for Failed Bank Assets 

Total Assets of Failed FDIC-Insured Commercial Banks and Savings Institutions 

by Year, 1988 – 2008* 

($ Billions) 

400 

348 350 

300 

250 

200 164 152 147 144 150 

100 90 

50 

10 2 1 0 0 0 2 0 2 3 1 0 0 0 3 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

* Through first nine months of 2008. 

FDIC QUARTERLY 4 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

Quarterly Banking Profile 

TABLE I-A. Selected Indicators, All FDIC-Insured Institutions* 2008** 2007** 2007 2006 2005 2004 2003 

Return on assets (%)...................................................................................................... 0.33 1.10 0.81 1.28 1.28 1.28 1.38 

Return on equity (%)....................................................................................................... 3.85 10.49 7.75 12.30 12.43 13.20 15.05 

Core capital (leverage) ratio (%).................................................................................... 7.81 8.14 7.97 8.22 8.25 8.11 7.88 

Noncurrent assets plus other real estate owned to assets (%) .................................... 1.54 0.73 0.94 0.54 0.50 0.53 0.75 

Net charge-offs to loans (%) .......................................................................................... 1.18 0.50 0.59 0.39 0.49 0.56 0.78 

Asset growth rate (%)..................................................................................................... 6.83 8.10 9.89 9.04 7.63 11.37 7.58 

Net interest margin (%)................................................................................................... 3.33 3.31 3.29 3.31 3.47 3.52 3.73 

Net operating income growth (%) .................................................................................. -62.87 -9.21 -27.57 8.53 11.43 3.99 16.38 

Number of institutions reporting..................................................................................... 8,384 8,559 8,534 8,680 8,833 8,976 9,181 

Commercial banks................................................................................................... 7,146 7,303 7,283 7,401 7,526 7,631 7,770 

Savings institutions ................................................................................................. 1,238 1,256 1,251 1,279 1,307 1,345 1,411 

Percentage of unproftable institutions (%) ................................................................... 21.00 10.33 12.07 7.93 6.22 5.97 5.99 

Number of problem institutions ...................................................................................... 171 65 76 50 52 80 116 

Assets of problem institutions (in billions)..................................................................... $116 $19 $22 $8 $7 $28 $30 

Number of failed/assisted institutions ........................................................................... 13 2 3 0 0 4 3 

* Excludes insured branches of foreign banks (IBAs). 

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

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

(dollar fgures in millions) 

Number of institutions reporting..................................................................................... 

Total employees (full-time equivalent)........................................................................... 

CONDITION DATA 

Total assets..................................................................................................................... 

Loans secured by real estate.................................................................................. 

1-4 Family residential mortgages .................................................................... 

Nonfarm nonresidential.................................................................................... 

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

Home equity lines............................................................................................. 

Commercial & industrial loans ................................................................................ 

Loans to individuals................................................................................................. 

Credit cards ...................................................................................................... 

Farm loans............................................................................................................... 

Other loans & leases............................................................................................... 

Less: Unearned income .......................................................................................... 

Total loans & leases ................................................................................................ 

Less: Reserve for losses......................................................................................... 

Net loans and leases............................................................................................... 

Securities................................................................................................................. 

Other real estate owned.......................................................................................... 

Goodwill and other intangibles ............................................................................... 

All other assets........................................................................................................ 

Total liabilities and capital .............................................................................................. 

Deposits................................................................................................................... 

Domestic offce deposits.................................................................................. 

Foreign offce deposits..................................................................................... 

Other borrowed funds ............................................................................................. 

Subordinated debt................................................................................................... 

All other liabilities .................................................................................................... 

Equity capital ........................................................................................................... 

Loans and leases 30-89 days past due......................................................................... 

Noncurrent loans and leases ......................................................................................... 

Restructured loans and leases ...................................................................................... 

Direct and indirect investments in real estate ............................................................... 

Mortgage-backed securities .......................................................................................... 

Earning assets................................................................................................................ 

FHLB Advances.............................................................................................................. 

Unused loan commitments............................................................................................. 

Trust assets..................................................................................................................... 

Assets securitized and sold*** ....................................................................................... 

Notional amount of derivatives*** .................................................................................. 

3rd Quarter 2nd Quarter 3rd Quarter %Change 

2008 2008 2007 07Q3-08Q3 

8,384 

2,170,671 

$13,573,691 

4,750,985 

2,102,080 

1,043,393 

617,055 

652,119 

1,503,737 

1,082,731 

411,627 

59,656 

595,646 

2,739 

7,990,015 

156,065 

7,833,950 

2,025,534 

22,966 

484,178 

3,207,062 

13,573,691 

8,727,485 

7,221,963 

1,505,522 

2,732,570 

176,833 

629,706 

1,307,097 

121,587 

184,269 

14,846 

910 

1,260,945 

11,493,605 

911,465 

7,860,609 

19,948,345 

1,906,828 

177,103,186 

8,451 

2,203,883 

$13,300,540 

4,794,248 

2,154,173 

1,018,988 

627,283 

646,903 

1,492,357 

1,069,479 

396,045 

58,284 

584,210 

2,513 

7,996,065 

144,383 

7,851,682 

2,017,391 

18,902 

481,438 

2,931,127 

13,300,540 

8,572,643 

7,029,111 

1,543,532 

2,598,234 

185,078 

593,306 

1,351,279 

110,814 

162,895 

14,499 

972 

1,322,210 

11,441,334 

840,543 

8,158,701 

21,750,102 

1,750,710 

183,303,064 

8,559 -2.0 

2,220,522 -2.2 

$12,706,161 6.8 

4,701,346 1.1 

2,238,180 -6.1 

939,556 11.1 

616,538 0.1 

591,372 10.3 

1,388,441 8.3 

1,013,355 6.8 

384,506 7.1 

56,166 6.2 

546,851 8.9 

2,237 22.4 

7,703,922 3.7 

87,037 79.3 

7,616,885 2.8 

1,989,103 1.8 

9,818 133.9 

461,068 5.0 

2,629,288 22.0 

12,706,161 6.8 

8,180,226 6.7 

6,739,817 7.2 

1,440,409 4.5 

2,454,148 11.3 

177,469 -0.4 

567,141 11.0 

1,327,177 -1.5 

92,558 31.4 

83,024 121.9 

4,123 260.1 

1,081 -15.9 

1,217,755 3.5 

11,032,330 4.2 

770,419 18.3 

8,301,846 -5.3 

21,501,132 -7.2 

1,663,308 14.6 

174,574,544 1.4 

First Three First Three 3rd Quarter 3rd Quarter %Change 

INCOME DATA Qtrs 2008 Qtrs 2007 %Change 2008 2007 07Q3-08Q3 

Total interest income .................................................................. $487,019 $542,106 -10.2 $159,097 $188,077 -15.4 

Total interest expense ................................................................ 207,949 278,586 -25.4 63,787 97,215 -34.4 

Net interest income ............................................................. 279,070 263,520 5.9 95,310 90,862 4.9 

Provision for loan and lease losses ........................................... 124,517 37,208 234.7 50,548 16,785 201.2 

Total noninterest income ............................................................ 175,521 187,130 -6.2 58,218 59,123 -1.5 

Total noninterest expense .......................................................... 274,323 265,254 3.4 93,920 90,162 4.2 

Securities gains (losses)............................................................ -8,037 2,325 N/M -7,592 77 N/M 

Applicable income taxes ............................................................ 15,679 48,084 -67.4 717 13,407 -94.7 

Extraordinary gains, net............................................................. 534 -1,917 N/M 975 -995 N/M 

Net income........................................................................... 32,569 100,513 -67.6 1,726 28,714 -94.0 

Net charge-offs........................................................................... 68,559 27,937 145.4 27,892 10,879 156.4 

Cash dividends ........................................................................... 42,592 94,397 -54.9 10,979 27,914 -60.7 

Retained earnings ...................................................................... -10,023 6,116 N/M -9,253 800 N/M 

Net operating income.......................................................... 37,457 100,869 -62.9 6,135 29,678 -79.3 

*** Call Report flers only. N/M - Not Meaningful 

FDIC QUARTERLY 5 2008, VOLUME 2, NO. 4 
 

 

 

 

TABLE III-A. Third Quarter 2008, All FDIC-Insured Institutions 

THIRD QUARTER 

(The way it is...) 

Number of institutions reporting....................... 

All Insured 

Institutions 

Asset Concentration Groups* 

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 

8,384 26 4 1,587 4,811 826 101 297 692 40 

Commercial banks..................................... 7,146 22 4 1,582 4,300 213 81 271 643 30 

Savings institutions ................................... 1,238 4 0 5 511 613 20 26 49 10 

Total assets (in billions).................................... $13,573.7 $467.9 $3,263.3 $168.0 $6,078.2 $1,058.6 $72.4 $35.9 $94.8 $2,334.6 

Commercial banks..................................... 12,050.4 448.4 3,263.3 167.5 5,560.7 225.7 34.3 30.3 83.2 2,236.9 

Savings institutions ................................... 1,523.3 19.5 0.0 0.5 517.5 832.9 38.1 5.6 11.6 97.7 

Total deposits (in billions)................................. 8,727.5 167.8 1,989.4 133.5 4,226.5 600.4 59.5 26.4 77.0 1,447.0 

Commercial bank ...................................... 7,778.5 158.8 1,989.4 133.2 3,894.6 88.2 27.5 22.6 68.0 1,396.3 

Savings institutions ................................... 949.0 8.9 0.0 0.4 331.9 512.2 32.0 3.8 9.0 50.7 

Net income (in millions).................................... 1,726 451 3,702 424 -1,677 -3,100 165 12 151 1,599 

Commercial banks..................................... 8,284 377 3,702 423 25 711 145 -19 164 2,756 

Savings institutions ................................... 

Performance Ratios (annualized,%) 

-6,558 74 0 1 -1,703 -3,811 21 31 -13 -1,157 

Yield on earning assets.................................... 5.63 12.12 4.84 6.36 5.91 5.84 6.80 4.63 6.07 4.41 

Cost of funding earning assets ........................ 2.26 2.84 2.15 2.36 2.27 2.85 2.00 1.57 2.19 1.96 

Net interest margin.................................... 3.37 9.28 2.69 4.00 3.64 2.99 4.80 3.07 3.88 2.45 

Noninterest income to assets........................... 1.76 6.73 2.02 0.67 1.44 0.55 1.74 11.00 0.98 1.78 

Noninterest expense to assets......................... 2.83 6.91 2.48 2.66 3.03 2.08 3.05 11.78 3.01 2.16 

Loan and lease loss provision to assets.......... 1.53 6.78 1.37 0.35 1.38 2.36 1.70 0.16 0.30 0.83 

Net operating income to assets ....................... 0.19 0.23 0.36 1.12 0.14 -1.10 0.96 0.86 1.00 0.52 

Pretax return on assets .................................... 0.07 0.63 0.44 1.21 -0.15 -1.18 1.43 0.88 0.79 0.50 

Return on assets............................................... 0.05 0.39 0.49 1.01 -0.11 -1.17 0.93 0.13 0.64 0.28 

Return on equity ............................................... 0.53 1.84 6.59 9.21 -1.03 -15.07 9.99 0.67 5.70 3.17 

Net charge-offs to loans and leases................ 

Loan and lease loss provision to 

1.42 6.24 1.44 0.41 1.21 1.03 2.00 0.43 0.34 1.11 

net charge-offs .......................................... 181.23 148.52 222.42 125.78 163.75 327.66 100.68 152.18 155.69 165.61 

Effciency ratio .................................................. 57.98 45.45 58.16 60.69 61.16 61.53 48.69 79.11 65.96 54.01 

% of unproftable institutions............................ 24.08 19.23 0.00 8.63 31.03 24.94 13.86 20.88 12.86 32.50 

% of institutions with earnings gains................ 

Structural Changes 

40.71 23.08 50.00 55.39 32.16 53.27 48.51 42.42 50.87 30.00 

New Charters............................................. 21 0 0 1 5 1 0 14 0 0 

Institutions absorbed by mergers ............. 73 0 2 6 57 3 1 0 1 3 

Failed Institutions ...................................... 

PRIOR THIRD QUARTERS 

(The way it was...) 

9 0 0 0 7 2 0 0 0 0 

Return on assets (%) .............................. 2007 0.92 4.07 0.69 1.30 0.99 0.31 1.17 2.20 1.07 0.81 

.............................. 2005 1.31 3.16 1.02 1.33 1.39 1.03 1.76 1.78 1.12 1.31 

.............................. 2003 

Net charge-offs to loans 

1.36 4.25 1.02 1.25 1.28 1.33 1.68 1.47 1.06 1.33 

and leases (%) ........................................ 2007 0.57 3.98 0.77 0.26 0.32 0.42 1.04 0.32 0.22 0.42 

........................................ 2005 0.51 4.28 1.19 0.16 0.23 0.10 1.39 0.18 0.20 0.26 

........................................ 2003 0.73 4.80 1.40 0.29 0.47 0.19 1.34 2.47 0.37 0.48 

* See Table IV-A (page 8) for explanations. 

FDIC QUARTERLY 6 2008, VOLUME 2, NO. 4 
Quarterly Banking Profile 

TABLE III-A. Third Quarter 2008, All FDIC-Insured Institutions 

THIRD QUARTER 

(The way it is...) 

Number of institutions reporting............................... 

All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion 

to $10 

Billion 

Greater 

than 

$10 Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

8,384 3,240 4,470 560 114 1,027 1,197 1,721 1,943 1,719 777 

Commercial banks............................................. 7,146 2,882 3,755 425 84 535 1,056 1,419 1,837 1,592 707 

Savings institutions ........................................... 1,238 358 715 135 30 492 141 302 106 127 70 

Total assets (in billions)............................................ $13,573.7 $174.9 $1,338.3 $1,475.0 $10,585.5 $2,689.6 $3,427.8 $3,324.7 $1,009.2 $770.8 $2,351.5 

Commercial banks............................................. 12,050.4 156.4 1,088.3 1,137.1 9,668.7 1,994.0 3,164.1 3,178.0 964.5 636.0 2,113.7 

Savings institutions ........................................... 1,523.3 18.5 250.1 337.9 916.8 695.6 263.7 146.7 44.7 134.8 237.8 

Total deposits (in billions)......................................... 8,727.5 141.7 1,053.3 1,047.1 6,485.3 1,652.4 2,235.6 2,105.0 708.7 551.0 1,474.8 

Commercial banks............................................. 7,778.5 127.6 869.2 812.8 5,968.8 1,197.2 2,076.0 2,001.3 677.9 473.0 1,353.1 

Savings institutions ........................................... 949.0 14.1 184.1 234.3 516.4 455.2 159.7 103.7 30.7 78.0 121.6 

Net income (in millions)............................................ 1,726 128 43 -1,924 3,479 226 2,307 830 1,322 361 -3,320 

Commercial banks............................................. 8,284 150 301 -434 8,267 2,093 2,437 1,413 1,340 801 200 

Savings institutions ........................................... 

Performance Ratios (annualized,%) 

-6,558 -21 -258 -1,490 -4,788 -1,867 -130 -583 -18 -440 -3,520 

Yield on earning assets............................................ 5.63 6.28 6.25 5.86 5.49 5.87 5.47 4.89 6.41 6.04 6.09 

Cost of funding earning assets ................................ 2.26 2.30 2.50 2.30 2.21 2.24 2.41 2.14 1.98 2.19 2.36 

Net interest margin............................................ 3.37 3.98 3.75 3.56 3.28 3.63 3.07 2.75 4.43 3.86 3.73 

Noninterest income to assets................................... 1.76 0.99 1.06 0.62 2.02 1.91 1.85 1.78 2.20 1.35 1.38 

Noninterest expense to assets................................. 2.83 3.68 3.29 2.78 2.77 2.93 2.56 2.74 3.83 3.29 2.68 

Loan and lease loss provision to assets.................. 1.53 0.46 0.74 1.12 1.70 1.45 1.39 1.39 1.42 1.01 2.19 

Net operating income to assets ............................... 0.19 0.40 0.34 -0.16 0.21 0.33 0.40 0.07 0.57 0.32 -0.33 

Pretax return on assets ............................................ 0.07 0.37 0.08 -0.56 0.16 0.20 0.31 0.01 0.73 0.31 -0.68 

Return on assets....................................................... 0.05 0.30 0.01 -0.52 0.14 0.03 0.27 0.11 0.53 0.19 -0.56 

Return on equity ....................................................... 0.53 2.24 0.13 -4.72 1.42 0.30 2.68 1.20 5.45 1.91 -6.34 

Net charge-offs to loans and leases........................ 1.42 0.42 0.69 1.04 1.63 1.49 1.28 1.32 1.60 0.84 1.79 

Loan and lease loss provision to net charge-offs.... 181.23 172.09 149.53 155.34 186.46 176.41 177.60 195.67 130.65 180.81 197.72 

Effciency ratio .......................................................... 57.98 79.15 69.99 65.49 55.29 55.41 55.82 60.42 61.85 64.54 56.74 

% of unproftable institutions.................................... 24.08 24.75 23.09 26.61 31.58 31.65 40.27 20.05 14.82 15.76 39.64 

% of institutions with earnings gains........................ 

Structural Changes 

40.71 45.19 39.26 30.00 22.81 40.21 22.97 45.67 48.38 46.02 26.77 

New Charters..................................................... 21 16 3 1 1 3 6 1 1 5 5 

Institutions absorbed by mergers ..................... 73 21 47 3 2 10 18 19 15 9 2 

Failed Institutions .............................................. 

PRIOR THIRD QUARTERS 

(The way it was...) 

9 0 4 3 2 0 3 0 1 0 5 

Return on assets (%) .......................................2007 0.92 0.79 1.03 1.18 0.87 0.89 0.75 0.90 1.61 1.14 0.88 

.......................................2005 1.31 1.08 1.27 1.34 1.32 1.24 1.35 1.08 1.73 1.18 1.60 

.......................................2003 1.36 1.01 1.17 1.34 1.41 1.24 1.40 1.21 1.77 1.34 1.66 

Net charge-offs to loans and leases (%) ........2007 0.57 0.26 0.24 0.42 0.66 0.92 0.29 0.44 0.74 0.29 0.76 

........2005 0.51 0.16 0.18 0.23 0.64 0.97 0.27 0.29 0.54 0.25 0.59 

........2003 0.73 0.30 0.37 0.49 0.87 1.10 0.50 0.65 0.85 0.38 0.60 

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

FDIC QUARTERLY 7 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE IV-A. First Three Quarters 2008, All FDIC-Insured Institutions 

FIRST THREE QUARTERS 

(The way it is...) 

Number of institutions reporting......................................... 

All Insured 

Institutions 

Asset Concentration Groups* 

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 

8,384 26 4 1,587 4,811 826 101 297 692 40 

Commercial banks....................................................... 7,146 22 4 1,582 4,300 213 81 271 643 30 

Savings institutions ..................................................... 1,238 4 0 5 511 613 20 26 49 10 

Total assets (in billions)...................................................... $13,573.7 $467.9 $3,263.3 $168.0 $6,078.2 $1,058.6 $72.4 $35.9 $94.8 $2,334.6 

Commercial banks....................................................... 12,050.4 448.4 3,263.3 167.5 5,560.7 225.7 34.3 30.3 83.2 2,236.9 

Savings institutions ..................................................... 1,523.3 19.5 0.0 0.5 517.5 832.9 38.1 5.6 11.6 97.7 

Total deposits (in billions)................................................... 8,727.5 167.8 1,989.4 133.5 4,226.5 600.4 59.5 26.4 77.0 1,447.0 

Commercial banks....................................................... 7,778.5 158.8 1,989.4 133.2 3,894.6 88.2 27.5 22.6 68.0 1,396.3 

Savings institutions ..................................................... 949.0 8.9 0.0 0.4 331.9 512.2 32.0 3.8 9.0 50.7 

Net income (in millions)...................................................... 32,569 8,309 6,912 1,395 10,596 -2,295 530 413 625 6,083 

Commercial banks....................................................... 38,123 7,908 6,912 1,392 11,587 1,938 317 272 624 7,172 

Savings institutions ..................................................... 

Performance Ratios (annualized,%) 

-5,555 401 0 3 -991 -4,233 213 141 0 -1,089 

Yield on earning assets...................................................... 5.81 11.99 5.27 6.48 6.06 5.34 6.94 4.71 6.16 4.80 

Cost of funding earning assets .......................................... 2.48 3.05 2.48 2.57 2.47 2.75 2.24 1.73 2.39 2.29 

Net interest margin...................................................... 3.33 8.94 2.80 3.91 3.59 2.59 4.71 2.97 3.77 2.51 

Noninterest income to assets............................................. 1.80 8.69 1.72 0.67 1.52 0.62 1.97 11.30 0.96 1.76 

Noninterest expense to assets........................................... 2.81 6.75 2.58 2.62 2.96 1.74 3.09 10.98 2.97 2.26 

Loan and lease loss provision to assets............................ 1.27 5.78 1.13 0.25 1.19 1.50 1.95 0.13 0.23 0.80 

Net operating income to assets ......................................... 0.38 2.10 0.29 1.15 0.32 -0.28 0.90 1.79 0.99 0.53 

Pretax return on assets ...................................................... 0.49 3.76 0.32 1.34 0.38 -0.22 1.51 2.53 1.09 0.55 

Return on assets................................................................. 0.33 2.43 0.31 1.13 0.24 -0.29 1.00 1.56 0.89 0.36 

Return on equity ................................................................. 3.35 11.14 4.16 10.15 2.18 -3.72 10.90 7.72 7.87 4.00 

Net charge-offs to loans and leases.................................. 1.18 5.64 1.28 0.28 0.97 0.74 1.81 0.43 0.29 0.88 

Loan and lease loss provision to net charge-offs.............. 181.62 138.96 204.12 135.53 176.61 290.78 127.77 123.77 144.23 196.58 

Effciency ratio .................................................................... 57.70 39.47 63.39 61.25 60.02 56.89 48.08 76.27 67.03 56.63 

% of unproftable institutions.............................................. 21.00 7.69 25.00 5.29 27.85 23.37 11.88 18.18 9.39 25.00 

% of institutions with earnings gains.................................. 

Condition Ratios (%) 

40.73 34.62 50.00 55.64 32.45 47.82 49.50 44.78 52.75 42.50 

Earning assets to total assets ............................................ 

Loss Allowance to: 

84.68 79.29 79.91 91.62 86.90 91.60 93.18 88.43 91.55 82.38 

Loans and leases ........................................................ 1.95 5.84 2.36 1.28 1.70 1.65 1.97 1.33 1.22 1.48 

Noncurrent loans and leases...................................... 

Noncurrent assets plus 

84.69 248.14 104.00 91.62 70.75 57.38 211.15 146.05 96.94 83.19 

other real estate owned to assets............................... 1.54 1.73 1.09 1.15 1.92 2.30 0.82 0.28 0.92 0.85 

Equity capital ratio.............................................................. 9.63 20.86 7.13 11.07 10.67 7.99 9.15 19.55 11.20 8.61 

Core capital (leverage) ratio............................................... 7.81 13.82 6.79 10.18 8.03 7.79 8.97 17.64 10.97 6.84 

Tier 1 risk-based capital ratio............................................. 9.79 13.09 8.30 13.49 9.42 14.03 10.44 38.13 17.83 9.71 

Total risk-based capital ratio .............................................. 12.54 15.60 12.18 14.55 11.90 15.01 12.51 39.03 18.92 12.63 

Net loans and leases to deposits....................................... 89.76 193.28 68.53 84.31 98.98 120.74 100.08 31.52 68.91 69.44 

Net loans to total assets..................................................... 57.71 69.30 41.78 67.02 68.82 68.49 82.22 23.15 55.96 43.04 

Domestic deposits to total assets ...................................... 

Structural Changes 

53.21 33.01 31.03 79.49 66.04 56.66 81.12 69.92 81.14 49.14 

New Charters............................................................... 83 0 0 2 22 2 0 57 0 0 

Institutions absorbed by mergers ............................... 214 0 2 24 159 12 2 1 8 6 

Failed Institutions ........................................................ 

PRIOR FIRST THREE QUARTERS 

(The way it was...) 

13 0 0 1 10 2 0 0 0 0 

Number of institutions ................................................2007 8,559 28 4 1,634 4,739 780 120 376 821 57 

................................................2005 8,858 29 4 1,733 4,557 928 125 420 992 70 

................................................2003 9,236 36 6 1,821 4,167 1,024 166 522 1,391 103 

Total assets (in billions)..............................................2007 $12,706.2 $423.5 $2,644.0 $157.3 $5,054.4 $1,454.1 $95.8 $40.1 $111.4 $2,725.5 

..............................................2005 10,700.7 359.9 1,838.9 143.0 3,667.4 1,677.1 109.2 47.7 128.6 2,729.0 

..............................................2003 8,943.1 308.8 1,427.9 129.5 3,095.8 1,588.5 191.9 62.2 192.1 1,946.3 

Return on assets (%)..................................................2007 1.10 3.81 0.87 1.25 1.09 0.73 1.40 2.37 1.04 1.09 

..................................................2005 1.31 3.19 0.88 1.32 1.36 1.12 1.70 1.73 1.12 1.36 

..................................................2003 1.38 3.93 1.05 1.25 1.30 1.44 1.54 1.36 1.09 1.31 

Net charge-offs to loans & leases (%) .......................2007 0.50 3.90 0.65 0.19 0.28 0.29 0.97 0.30 0.17 0.35 

.......................2005 0.47 4.27 0.88 0.15 0.22 0.10 1.46 0.29 0.27 0.20 

.......................2003 0.78 5.12 1.41 0.24 0.52 0.19 1.42 1.44 0.31 0.56 

Noncurrent assets plus OREO to assets (%) ............2007 0.73 1.34 0.51 0.81 0.81 1.09 0.53 0.26 0.64 0.54 

............2005 0.50 1.36 0.48 0.68 0.48 0.57 0.54 0.25 0.57 0.37 

............2003 0.77 1.34 0.98 0.95 0.79 0.64 0.88 0.36 0.74 0.61 

Equity capital ratio (%) ...............................................2007 10.45 23.17 7.78 11.32 10.86 9.44 11.89 19.54 11.58 10.55 

...............................................2005 10.25 22.07 8.23 10.86 10.21 10.67 9.58 19.26 10.83 9.66 

...............................................2003 9.13 17.03 7.27 10.81 9.42 8.79 7.49 15.92 10.57 8.75 

*Asset Concentration Group Defnitions (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 offces. 

Agricultural Banks - Banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of their 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 defnitions above, they have signifcant lending activity with no identifed asset concentrations. 

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

concentrations. 

FDIC QUARTERLY 8 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

TABLE IV-A. First Three Quarters 2008, All FDIC-Insured Institutions 

FIRST THREE QUARTERS 

(The way it is...) 

Number of institutions reporting..................... 

All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less than 

$100 Million 

$100 Million 

to $1 Billion 

$1 Billion to 

$10 Billion 

Greater than 

$10 Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

8,384 3,240 4,470 560 114 1,027 1,197 1,721 1,943 1,719 777 

Commercial banks................................... 7,146 2,882 3,755 425 84 535 1,056 1,419 1,837 1,592 707 

Savings institutions ................................. 1,238 358 715 135 30 492 141 302 106 127 70 

Total assets (in billions).................................. $13,573.7 $174.9 $1,338.3 $1,475.0 $10,585.5 $2,689.6 $3,427.8 $3,324.7 $1,009.2 $770.8 $2,351.5 

Commercial banks................................... 12,050.4 156.4 1,088.3 1,137.1 9,668.7 1,994.0 3,164.1 3,178.0 964.5 636.0 2,113.7 

Savings institutions ................................. 1,523.3 18.5 250.1 337.9 916.8 695.6 263.7 146.7 44.7 134.8 237.8 

Total deposits (in billions)............................... 8,727.5 141.7 1,053.3 1,047.1 6,485.3 1,652.4 2,235.6 2,105.0 708.7 551.0 1,474.8 

Commercial banks................................... 7,778.5 127.6 869.2 812.8 5,968.8 1,197.2 2,076.0 2,001.3 677.9 473.0 1,353.1 

Savings institutions ................................. 949.0 14.1 184.1 234.3 516.4 455.2 159.7 103.7 30.7 78.0 121.6 

Net income (in millions).................................. 32,569 616 4,395 2,335 25,222 11,278 7,931 7,061 6,889 3,188 -3,779 

Commercial banks................................... 38,123 644 4,178 3,265 30,037 11,463 8,269 7,454 6,913 3,588 437 

Savings institutions ................................. 

Performance Ratios (annualized,%) 

-5,555 -28 217 -930 -4,815 -185 -338 -392 -25 -399 -4,216 

Yield on earning assets.................................. 5.81 6.36 6.40 6.14 5.67 6.08 5.47 5.18 6.53 6.18 6.40 

Cost of funding earning assets ...................... 2.48 2.48 2.70 2.57 2.44 2.53 2.51 2.41 2.22 2.42 2.61 

Net interest margin.................................. 3.33 3.89 3.70 3.57 3.23 3.55 2.96 2.77 4.32 3.76 3.79 

Noninterest income to assets......................... 1.80 1.04 1.10 1.22 1.98 2.10 1.64 1.92 2.86 1.42 1.22 

Noninterest expense to assets....................... 2.81 3.63 3.22 2.97 2.72 2.90 2.46 2.69 3.83 3.22 2.81 

Loan and lease loss provision to assets........ 1.27 0.34 0.55 0.92 1.44 1.16 1.19 1.20 1.40 0.80 1.71 

Net operating income to assets ..................... 0.38 0.50 0.55 0.32 0.37 0.68 0.37 0.26 0.92 0.57 -0.04 

Pretax return on assets .................................. 0.49 0.61 0.61 0.40 0.49 0.96 0.43 0.45 1.38 0.77 -0.30 

Return on assets............................................. 0.33 0.48 0.45 0.21 0.33 0.60 0.31 0.31 0.94 0.57 -0.21 

Return on equity ............................................. 3.35 3.58 4.30 1.90 3.45 5.09 3.04 3.47 9.54 5.75 -2.37 

Net charge-offs to loans and leases.............. 

Loan and lease loss provision to net 

1.18 0.30 0.49 0.85 1.37 1.31 0.98 1.14 1.36 0.65 1.48 

charge-offs .............................................. 181.62 177.88 158.47 157.47 185.64 157.79 197.51 196.39 151.17 185.24 186.59 

Effciency ratio ................................................ 57.70 78.65 69.81 61.13 55.38 53.80 57.23 58.74 56.57 64.37 60.20 

% of unproftable institutions.......................... 21.00 22.90 19.42 21.43 27.19 28.14 36.42 17.55 11.73 12.97 36.42 

% of institutions with earnings gains.............. 

Condition Ratios (%) 

40.73 44.26 39.51 33.57 23.68 40.21 23.14 43.93 48.43 47.59 27.03 

Earning assets to total assets........................ 

Loss Allowance to: 

84.68 91.85 91.73 90.21 82.89 82.90 84.35 84.70 86.30 89.89 84.73 

Loans and leases .................................... 1.95 1.32 1.28 1.54 2.15 1.93 1.76 2.01 1.88 1.47 2.39 

Noncurrent loans and leases .................. 

Noncurrent assets plus other real estate 

84.69 79.21 64.59 62.19 91.76 114.98 73.64 79.44 77.46 71.69 92.95 

owned to assets....................................... 1.54 1.40 1.81 2.04 1.43 0.98 1.67 1.56 1.90 1.63 1.75 

Equity capital ratio.......................................... 9.63 13.15 10.19 10.89 9.33 10.92 10.15 8.56 9.67 9.87 8.80 

Core capital (leverage) ratio........................... 7.81 12.99 9.79 9.24 7.23 8.71 6.93 7.76 8.02 8.83 7.78 

Tier 1 risk-based capital ratio......................... 9.79 18.68 12.95 11.62 8.98 11.81 8.92 8.82 9.44 11.24 10.12 

Total risk-based capital ratio .......................... 12.54 19.73 14.07 13.00 12.16 13.87 11.88 11.86 12.12 12.99 13.18 

Net loans and leases to deposits................... 89.76 78.75 89.59 98.12 88.68 86.34 91.80 83.35 95.17 92.04 96.21 

Net loans to total assets................................. 57.71 63.81 70.52 69.66 54.33 53.04 59.87 52.77 66.83 65.79 60.34 

Domestic deposits to total assets .................. 

Structural Changes 

53.21 81.03 78.58 70.23 47.17 53.05 58.13 50.11 64.26 70.71 40.11 

New Charters........................................... 83 77 4 1 1 18 28 1 4 14 18 

Institutions absorbed by mergers ........... 214 78 109 22 5 28 53 44 44 37 8 

Failed Institutions .................................... 

PRIOR FIRST THREE QUARTERS 

(The way it was...) 

13 3 4 4 2 0 3 0 4 1 5 

Number of institutions ........................... 2007 8,559 3,513 4,391 539 116 1,046 1,215 1,793 1,990 1,740 775 

........................... 2005 8,858 3,943 4,294 503 118 1,113 1,219 1,890 2,074 1,806 756 

........................... 2003 9,236 4,464 4,190 469 113 1,188 1,231 2,027 2,141 1,878 771 

Total assets (in billions)......................... 2007 $12,706.2 $186.1 $1,296.7 $1,408.2 $9,815.2 $2,382.1 $3,195.9 $2,796.4 $931.5 $659.4 $2,740.9 

......................... 2005 10,700.7 205.8 1,225.7 1,365.9 7,903.2 2,755.9 2,635.3 2,494.5 784.1 585.0 1,445.8 

......................... 2003 8,943.1 229.1 1,159.8 1,289.6 6,264.7 3,039.0 1,858.6 1,653.8 445.3 592.6 1,353.9 

Return on assets (%)............................. 2007 1.10 0.84 1.06 1.09 1.12 1.00 1.05 1.01 1.63 1.15 1.16 

............................. 2005 1.31 1.08 1.24 1.34 1.32 1.27 1.38 1.01 1.65 1.25 1.62 

............................. 2003 1.38 0.97 1.20 1.35 1.43 1.25 1.38 1.31 1.62 1.39 1.65 

Net charge-offs to loans & leases (%).. 2007 0.50 0.18 0.19 0.35 0.59 0.86 0.25 0.37 0.66 0.23 0.64 

.. 2005 0.47 0.16 0.18 0.22 0.58 0.81 0.22 0.29 0.54 0.23 0.61 

.. 2003 

Noncurrent assets plus OREO to 

0.78 0.26 0.32 0.52 0.95 1.17 0.56 0.66 0.97 0.38 0.64 

assets (%)....................................... 2007 0.73 0.87 0.89 0.83 0.69 0.66 0.54 0.78 1.19 0.78 0.80 

....................................... 2005 0.50 0.71 0.54 0.50 0.49 0.46 0.31 0.54 0.80 0.73 0.58 

....................................... 2003 0.77 0.91 0.73 0.64 0.81 0.84 0.60 0.96 0.74 0.78 0.64 

Equity capital ratio (%) .......................... 2007 10.45 13.68 10.57 11.38 10.23 12.43 10.14 9.09 10.13 10.39 10.58 

.......................... 2005 10.25 12.26 10.26 10.57 10.14 10.63 9.86 9.18 10.67 9.57 12.12 

.......................... 2003 9.13 11.44 10.03 10.48 8.60 8.96 8.83 8.64 10.79 9.64 9.74 

* 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, Pacifc Islands, Utah, Washington, Wyoming 

FDIC QUARTERLY 9 2008, VOLUME 2, NO. 4 
TABLE V-A. Loan Performance, All FDIC-Insured Institutions 

September 30, 2008 

Asset Concentration Groups* 

All Insured 

Institutions 

Credit 

Card 

Banks 

International 

Banks 

Agricultural 

Banks 

Commercial 

Lenders 

Mortgage 

Lenders 

Consumer 

Lenders 

Other 

Specialized 

<$1 Billion 

All Other 

<$1 

Billion 

All Other 

>$1 

Billion 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate ....................................... 1.78 3.23 2.55 1.28 1.53 2.02 1.13 1.04 1.68 1.96 

Construction and development................................. 2.34 0.00 1.72 2.72 2.39 4.46 1.34 1.05 1.75 0.91 

Nonfarm nonresidential............................................. 0.78 0.00 0.57 1.23 0.78 0.79 1.25 0.71 1.38 0.67 

Multifamily residential real estate ............................. 0.76 0.00 0.28 1.70 0.91 0.88 10.49 0.27 1.24 0.40 

Home equity loans..................................................... 1.17 3.48 1.36 0.86 0.90 1.57 0.90 0.33 0.64 1.45 

Other 1-4 family residential....................................... 2.45 1.38 3.71 1.75 2.12 2.07 1.25 1.34 1.99 2.76 

Commercial and industrial loans ..................................... 0.69 3.63 0.32 1.60 0.72 0.76 1.50 1.11 1.61 0.50 

Loans to individuals.......................................................... 2.22 2.66 2.06 2.03 2.24 1.34 1.87 1.63 2.29 1.72 

Credit card loans ....................................................... 2.50 2.52 2.55 1.49 2.37 2.70 1.38 2.01 2.58 2.73 

Other loans to individual ........................................... 2.04 3.60 1.82 2.06 2.23 1.00 2.04 1.60 2.28 1.50 

All other loans and leases (including farm) ..................... 0.40 0.11 0.23 0.50 0.63 0.48 0.13 1.10 0.76 0.25 

Total loans and leases...................................................... 

Percent of Loans Noncurrent** 

1.52 2.60 1.63 1.19 1.36 1.95 1.56 1.16 1.68 1.40 

All real estate loans .......................................................... 3.12 2.22 3.54 1.69 3.19 3.04 0.90 0.97 1.35 2.74 

Construction and development................................. 7.30 0.00 3.81 6.91 7.34 11.25 4.15 2.16 3.12 6.43 

Nonfarm nonresidential............................................. 1.36 0.00 0.56 1.68 1.39 1.42 1.30 0.95 1.53 1.30 

Multifamily residential real estate ............................. 1.47 0.00 0.56 1.19 1.80 1.15 3.36 2.40 2.13 1.04 

Home equity loans..................................................... 1.19 2.42 1.37 0.40 0.96 1.16 0.53 0.58 0.48 1.63 

Other 1-4 family residential....................................... 3.64 0.62 5.36 1.19 3.58 3.09 1.04 0.82 1.17 3.22 

Commercial and industrial loans ..................................... 1.01 3.10 0.55 1.75 1.09 0.83 0.71 1.54 1.58 0.95 

Loans to individuals.......................................................... 1.50 2.44 1.85 0.76 0.93 0.70 1.00 0.49 0.75 0.67 

Credit card loans ....................................................... 2.35 2.36 2.55 1.47 2.07 2.44 1.26 1.05 1.26 2.50 

Other loans to individuals ......................................... 0.98 2.98 1.51 0.71 0.76 0.27 0.92 0.43 0.73 0.28 

All other loans and leases (including farm) ..................... 0.71 0.03 1.35 0.64 0.48 0.40 0.10 0.29 0.73 0.21 

Total loans and leases...................................................... 

Percent of Loans Charged-off (net, YTD) 

2.31 2.35 2.27 1.40 2.40 2.88 0.93 0.91 1.25 1.78 

All real estate loans .......................................................... 0.91 3.15 1.49 0.22 0.87 0.71 0.61 0.17 0.13 0.96 

Construction and development................................. 2.04 0.00 0.95 1.29 2.04 4.15 0.15 0.38 0.36 1.63 

Nonfarm nonresidential............................................. 0.16 0.00 0.03 0.18 0.17 0.13 0.14 0.12 0.10 0.14 

Multifamily residential real estate ............................. 0.26 0.00 0.02 0.51 0.31 0.28 0.11 0.04 0.12 0.10 

Home equity loans..................................................... 1.55 3.38 1.62 0.22 1.30 1.77 0.89 0.08 0.24 2.09 

Other 1-4 family residential....................................... 0.86 1.34 1.93 0.12 0.79 0.52 0.40 0.19 0.13 0.74 

Commercial and industrial loans ..................................... 0.86 7.91 0.39 0.58 0.84 0.32 4.24 0.05 0.42 0.48 

Loans to individuals.......................................................... 3.29 5.79 3.03 0.75 2.31 1.87 2.33 1.19 0.86 1.76 

Credit card loan ......................................................... 5.24 5.56 4.06 4.53 5.42 6.35 3.47 6.13 3.81 5.69 

Other loans to individuals ......................................... 2.11 7.29 2.56 0.50 1.83 0.74 1.95 0.31 0.75 0.91 

All other loans and leases (including farm) ..................... 0.34 0.01 0.12 0.00 0.55 0.78 0.22 1.11 0.50 0.37 

Total loans and leases...................................................... 

Loans Outstanding (in billions) 

1.18 5.64 1.28 0.28 0.97 0.74 1.81 0.43 0.29 0.88 

All real estate loans .......................................................... $4,751.0 $1.8 $638.0 $64.6 $2,753.1 $686.1 $21.0 $5.0 $37.3 $544.0 

Construction and development................................. 617.1 0.0 14.2 6.1 537.3 18.8 0.5 0.4 2.7 37.1 

Nonfarm nonresidential............................................. 1,043.4 0.0 33.8 18.0 873.0 30.9 1.1 1.5 8.8 76.3 

Multifamily residential real estate ............................. 205.2 0.0 40.6 1.2 137.1 13.2 0.1 0.1 0.7 12.1 

Home equity loans..................................................... 652.1 1.6 143.2 1.2 316.7 56.4 10.1 0.1 1.4 121.3 

Other 1-4 family residential....................................... 2,102.1 0.2 353.6 17.0 841.3 565.9 9.1 2.7 21.0 291.4 

Commercial and industrial loans ..................................... 1,503.7 35.3 300.5 15.8 895.9 16.5 3.3 1.2 5.5 229.7 

Loans to individuals.......................................................... 1,082.7 284.8 242.4 6.8 353.6 29.1 35.2 1.5 6.9 122.6 

Credit card loans ....................................................... 411.6 247.3 80.7 0.4 46.9 5.8 8.8 0.1 0.2 21.4 

Other loans to individuals ......................................... 671.1 37.5 161.7 6.3 306.7 23.3 26.4 1.4 6.6 101.2 

All other loans and leases (including farm) ..................... 655.3 22.5 216.1 26.9 254.5 5.5 1.4 0.7 4.1 123.6 

Total loans and leases...................................................... 

Memo: Other Real Estate Owned (in millions) 

7,992.8 344.4 1,397.1 114.1 4,257.1 737.2 60.9 8.4 53.7 1,019.9 

All other real estate owned........................................ 22,966.4 -20.3 3,610.9 337.0 14,494.8 3,167.0 24.1 20.5 202.3 1,130.1 

Construction and development................................. 6,630.9 0.0 5.0 132.6 5,937.5 412.0 3.4 3.7 41.4 95.2 

Nonfarm nonresidential............................................. 2,406.9 0.2 40.0 93.6 2,007.1 49.1 5.3 6.4 55.8 149.5 

Multifamily residential real estate ............................. 734.6 0.0 19.0 15.2 590.5 40.3 0.0 0.3 23.5 45.9 

1-4 family residential ................................................. 11,500.8 2.8 2,934.9 70.7 4,927.5 2,630.8 14.9 9.8 76.4 833.0 

Farmland.................................................................... 77.1 0.0 0.0 24.4 46.4 0.4 0.6 0.7 4.5 0.0 

GNMA properties....................................................... 1,474.4 0.0 430.0 0.4 979.1 57.6 0.0 0.0 0.8 6.5 

* See Table IV-A (page 8) for explanations. 

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. 

FDIC QUARTERLY 10 2008, VOLUME 2, NO. 4 
Quarterly Banking Profile 

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

September 30, 2008 All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion 

to $10 

Billion 

Greater than 

$10 Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

Percent of Loans 30–89 Days Past Due 

All loans secured by real estate .............................. 1.78 1.58 1.39 1.29 2.00 1.17 1.90 1.96 1.33 1.54 2.32 

Construction and development........................ 2.34 2.13 2.40 2.28 2.36 1.89 1.84 3.01 2.55 1.80 3.36 

Nonfarm nonresidential.................................... 0.78 1.20 0.98 0.74 0.67 0.92 0.66 0.99 0.72 0.68 0.63 

Multifamily residential real estate .................... 0.76 1.04 1.16 0.99 0.59 0.54 0.93 0.85 0.64 0.87 0.80 

Home equity loans............................................ 1.17 0.79 0.81 0.80 1.22 0.66 1.47 1.10 1.01 0.69 1.25 

Other 1-4 family residential.............................. 2.45 2.03 1.46 1.43 2.77 1.29 2.70 2.74 1.77 2.64 3.21 

Commercial and industrial loans ............................ 0.69 1.55 1.18 0.92 0.59 1.09 0.47 0.69 0.93 0.64 0.58 

Loans to individuals................................................. 2.22 2.46 1.94 2.06 2.24 2.50 2.30 1.97 2.79 1.62 1.88 

Credit card loans .............................................. 2.50 2.06 2.56 2.45 2.50 2.56 2.77 2.45 2.48 1.33 2.43 

Other loans to individuals ................................ 2.04 2.47 1.90 1.87 2.06 2.39 2.24 1.77 3.04 1.69 1.56 

All other loans and leases (including farm) ............ 0.40 0.50 0.51 0.59 0.38 0.43 0.23 0.53 0.55 0.60 0.31 

Total loans and leases............................................. 

Percent of Loans Noncurrent** 

1.52 1.52 1.35 1.27 1.59 1.37 1.54 1.56 1.38 1.32 1.74 

All real estate loans ................................................. 3.12 1.88 2.24 3.01 3.38 1.79 3.31 3.65 3.52 2.63 3.52 

Construction and development........................ 7.30 5.07 6.26 7.96 7.49 5.86 7.14 8.74 5.73 4.89 10.18 

Nonfarm nonresidential.................................... 1.36 1.78 1.35 1.32 1.37 1.61 1.31 1.84 1.18 0.99 0.88 

Multifamily residential real estate .................... 1.47 1.93 1.73 2.47 1.05 0.76 2.16 1.92 1.34 2.60 0.88 

Home equity loans............................................ 1.19 0.72 0.71 0.83 1.25 0.71 1.45 1.23 1.19 0.43 0.97 

Other 1-4 family residential.............................. 3.64 1.39 1.36 2.17 4.25 1.52 3.72 4.58 7.00 3.23 4.07 

Commercial and industrial loans ............................ 1.01 1.81 1.38 1.09 0.95 1.35 0.89 1.04 1.15 1.02 0.82 

Loans to individuals................................................. 1.50 0.96 0.69 1.05 1.58 2.03 0.87 1.04 1.61 0.59 1.85 

Credit card loans .............................................. 2.35 1.23 1.53 2.13 2.37 2.51 2.29 1.79 2.07 1.16 2.63 

Other loans to individuals ................................ 0.98 0.96 0.62 0.53 1.05 1.21 0.67 0.73 1.21 0.45 1.39 

All other loans and leases (including farm) ............ 0.71 0.61 0.57 0.57 0.73 0.50 0.20 0.65 0.37 0.63 1.95 

Total loans and leases............................................. 

Percent of Loans Charged-off (net, YTD) 

2.31 1.67 1.98 2.47 2.34 1.68 2.39 2.53 2.42 2.05 2.57 

All real estate loans ................................................. 0.91 0.22 0.40 0.69 1.10 0.31 0.96 1.30 0.84 0.59 1.17 

Construction and development........................ 2.04 0.73 1.35 2.05 2.39 1.01 1.91 2.81 1.47 1.32 3.13 

Nonfarm nonresidential.................................... 0.16 0.16 0.13 0.13 0.20 0.19 0.15 0.29 0.13 0.11 0.05 

Multifamily residential real estate .................... 0.26 0.29 0.24 0.39 0.21 0.09 0.40 0.47 0.13 0.38 0.18 

Home equity loans............................................ 1.55 0.31 0.34 0.61 1.72 0.66 1.91 1.24 1.97 0.71 1.87 

Other 1-4 family residential.............................. 0.86 0.15 0.20 0.44 1.03 0.23 0.75 1.52 0.57 0.51 1.28 

Commercial and industrial loans ............................ 0.86 0.63 0.69 0.79 0.89 1.47 0.67 0.55 1.37 0.63 0.90 

Loans to individuals................................................. 3.29 0.70 1.32 2.63 3.46 4.49 2.09 2.20 4.03 1.31 3.64 

Credit card loans .............................................. 5.24 2.47 7.51 5.08 5.23 5.38 5.74 4.54 5.99 3.25 5.02 

Other loans to individuals ................................ 2.11 0.68 0.84 1.51 2.29 3.01 1.60 1.37 2.44 0.85 2.82 

All other loans and leases (including farm) ............ 0.34 0.11 0.36 0.65 0.32 0.22 0.49 0.35 0.33 0.42 0.24 

Total loans and leases............................................. 

Loans Outstanding (in billions) 

1.18 0.30 0.49 0.85 1.37 1.31 0.98 1.14 1.36 0.65 1.48 

All real estate loans ................................................. $4,751.0 $77.0 $743.9 $763.1 $3,167.0 $843.8 $1,341.4 $1,046.0 $373.6 $347.1 $799.0 

Construction and development........................ 617.1 9.6 139.5 160.6 307.4 68.7 200.0 124.2 51.9 87.7 84.6 

Nonfarm nonresidential.................................... 1,043.4 22.9 260.2 258.9 501.4 200.4 268.3 207.9 101.1 114.5 151.1 

Multifamily residential real estate .................... 205.2 1.9 30.1 45.2 128.0 52.9 34.0 62.2 10.4 8.2 37.4 

Home equity loans............................................ 652.1 2.7 37.2 48.7 563.5 67.6 212.3 203.9 79.3 23.9 65.1 

Other 1-4 family residential.............................. 2,102.1 31.0 247.4 234.5 1,589.2 449.3 607.5 429.7 110.8 101.7 403.0 

Commercial and industrial loans ............................ 1,503.7 15.9 126.1 164.1 1,197.6 211.2 386.0 372.4 140.6 105.2 288.3 

Loans to individuals................................................. 1,082.7 8.3 47.2 79.2 947.9 290.0 200.2 197.7 100.7 40.3 253.8 

Credit card loans .............................................. 411.6 0.1 3.3 25.8 382.4 181.6 24.7 58.4 46.3 7.8 92.9 

Other loans to individuals ................................ 671.1 8.2 43.9 53.4 565.6 108.4 175.4 139.4 54.4 32.5 161.0 

All other loans and leases (including farm) ............ 655.3 11.9 39.2 37.8 566.5 110.1 162.2 174.4 72.5 22.4 113.7 

Total loans and leases............................................. 

Memo: Other Real Estate Owned (in millions) 

7,992.8 113.1 956.4 1,044.2 5,879.0 1,455.1 2,089.8 1,790.6 687.4 514.9 1,454.9 

All other real estate owned...................................... 22,966.4 555.3 5,297.2 4,150.7 12,963.2 1,613.8 6,859.9 6,384.8 2,514.4 1,995.9 3,597.6 

Construction and development........................ 6,630.9 146.8 2,737.6 2,035.8 1,710.7 442.5 2,339.3 1,097.8 757.2 824.5 1,169.7 

Nonfarm nonresidential.................................... 2,406.9 159.0 963.5 526.1 758.3 232.3 661.5 660.6 350.0 370.4 132.1 

Multifamily residential real estate .................... 734.6 18.3 192.5 253.1 270.7 60.8 187.4 276.7 67.6 54.8 87.4 

1-4 family residential ........................................ 11,500.8 215.4 1,365.2 1,309.2 8,611.0 841.1 3,616.5 3,620.7 732.3 672.3 2,017.8 

Farmland........................................................... 77.1 15.2 39.2 11.3 11.3 10.7 11.4 9.7 11.5 31.7 2.2 

GNMA properties.............................................. 1,474.4 1.1 0.9 16.0 1,456.4 17.7 55.8 720.4 597.5 42.4 40.6 

* See Table IV-A (page 8) for explanations. 

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. 

FDIC QUARTERLY 11 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

 

 

 

TABLE VI-A. Derivatives, All FDIC-Insured Commercial Banks and State-Chartered Savings Banks 

(dollar fgures in millions; 

notional amounts unless otherwise indicated) 

3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter %Change 

2008 2008 2008 2007 2007 07Q3-08Q3 

Asset Size Distribution 

Less Than $100 $1 Billion 

$100 Million To To $10 Greater Than 

Million $1 Billion Billion $10 Billion 

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives................. 1,066 1,065 1,099 1,045 1,026 3.9 81 640 266 79 

Total assets of institutions reporting derivatives .......... $10,713,332 $10,102,137 $10,194,206 $9,827,098 $9,459,618 13.3 $5,802 $278,136 $853,648 $9,575,746 

Total deposits of institutions reporting derivatives....... 6,795,048 6,449,005 6,471,046 6,324,979 6,030,658 12.7 4,570 216,179 609,402 5,964,897 

Total derivatives............................................................. 

Derivative Contracts by Underlying Risk Exposure 

177,103,186 183,303,064 181,599,670 166,117,135 174,574,544 1.4 167 17,389 81,009 177,004,621 

Interest rate.................................................................... 137,205,229 144,933,428 141,879,217 129,490,988 138,720,387 -1.1 150 16,813 69,307 137,118,960 

Foreign exchange*......................................................... 19,729,818 19,418,964 19,738,204 17,174,167 16,696,571 18.2 5 34 10,092 19,719,686 

Equity ............................................................................. 2,785,996 2,344,339 2,410,959 2,522,430 2,745,807 1.5 12 157 1,029 2,784,798 

Commodity & other (excluding credit derivatives) ....... 1,233,751 1,137,524 1,129,869 1,066,704 1,015,444 21.5 0 194 339 1,233,218 

Credit.............................................................................. 16,148,392 15,468,809 16,441,421 15,862,846 15,396,335 4.9 0 191 242 16,147,960 

Total................................................................................ 

Derivative Contracts by Transaction Type 

177,103,186 183,303,064 181,599,670 166,117,135 174,574,544 1.4 167 17,389 81,009 177,004,621 

Swaps ............................................................................ 108,289,172 114,178,240 112,564,785 103,102,442 111,396,480 -2.8 14 10,386 50,269 108,228,502 

Futures & forwards ........................................................ 24,483,661 23,582,769 22,361,892 18,866,619 17,126,206 43.0 67 2,162 16,024 24,465,407 

Purchased options......................................................... 13,485,926 14,501,116 14,285,549 13,770,867 14,547,038 -7.3 10 2,081 7,082 13,476,753 

Written options............................................................... 13,450,076 14,414,797 14,705,284 13,954,396 15,022,184 -10.5 71 2,546 7,010 13,440,449 

Total................................................................................ 

Fair Value of Derivative Contracts 

159,708,834 166,676,922 163,917,510 149,694,325 158,091,908 1.0 162 17,176 80,385 159,611,111 

Interest rate contracts.................................................... 27,297 75,935 62,573 20,075 30,716 -11.1 1 15 660 26,622 

Foreign exchange contracts.......................................... 15,054 32,017 9,670 7,980 3,119 382.7 0 0 1 15,054 

Equity contracts............................................................. 3,742 -3,878 -2,426 9,485 -20,872 N/M 0 2 21 3,719 

Commodity & other (excluding credit derivatives) ....... 3,175 5,063 3,346 1,785 1,664 90.8 0 100 1 3,075 

Credit derivatives as guarantor..................................... -566,034 -398,893 -474,045 -212,447 -104,120 443.6 0 0 -26 -566,008 

Credit derivatives as benefciary................................... 

Derivative Contracts by Maturity** 

603,935 428,844 501,034 222,426 110,905 444.6 0 1 -1 603,934 

Interest rate contracts .............................. < 1 year 40,399,684 44,995,175 42,621,752 39,085,340 48,918,972 -17.4 63 2,509 15,701 40,381,411 

............................ 1-5 years 37,760,921 39,521,394 39,752,478 37,222,363 36,311,048 4.0 12 8,156 25,065 37,727,688 

............................ > 5 years 28,784,955 29,704,342 30,105,716 27,724,625 27,877,687 3.3 0 3,397 21,292 28,760,266 

Foreign exchange contracts ..................... < 1 year 12,664,219 12,345,486 12,524,601 11,591,807 10,094,603 25.5 0 10 7,502 12,656,707 

................... 1-5 years 1,787,926 1,929,554 1,924,840 1,604,898 1,831,220 -2.4 0 3 26 1,787,897 

................... > 5 years 676,656 734,305 714,707 618,960 718,390 -5.8 0 0 10 676,646 

Equity contracts ........................................ < 1 year 508,748 504,258 509,709 473,413 464,820 9.5 1 41 126 508,580 

...................................... 1-5 years 332,908 207,513 287,805 297,459 330,227 0.8 4 42 422 332,439 

...................................... > 5 years 81,967 76,283 39,960 70,485 70,134 16.9 0 0 19 81,948 

Commodity & other contracts .................. < 1 year 294,036 315,202 369,747 284,837 267,197 10.0 0 0 263 293,773 

................ 1-5 years 288,860 267,344 277,956 333,631 304,544 -5.1 0 65 22 288,773 

................ > 5 years 

Risk-Based Capital: Credit Equivalent Amount 

88,822 28,367 33,492 28,282 31,483 182.1 0 0 0 88,822 

Total current exposure to tier 1 capital (%)................... 60.4 57.7 67.2 45.4 38.0 0.1 0.4 1.8 69.5 

Total potential future exposure to tier 1 capital (%)...... 

Total exposure (credit equivalent amount) to 

122.5 118.5 122.7 110.1 114.7 0.1 0.4 0.8 141.3 

tier 1 capital (%)...................................................... 182.9 176.2 189.9 155.5 152.7 0.2 0.8 2.5 210.8 

Credit losses on derivatives***.................................. 

HELD FOR TRADING 

227.0 135.0 15.0 156.0 125.0 81.6 0.0 1.0 0.0 226.0 

Number of institutions reporting derivatives................. 182 181 170 166 158 15.2 8 58 62 54 

Total assets of institutions reporting derivatives .......... 9,226,469 8,596,550 8,622,322 8,306,873 7,976,927 15.7 531 27,332 288,951 8,909,655 

Total deposits of institutions reporting derivatives....... 

Derivative Contracts by Underlying Risk Exposure 

5,850,572 5,501,876 5,465,449 5,354,982 5,081,807 15.1 386 21,361 207,048 5,621,777 

Interest rate.................................................................... 134,667,695 142,264,570 139,169,279 127,128,959 136,071,674 -1.0 7 773 28,482 134,638,433 

Foreign exchange.......................................................... 18,396,293 18,166,799 18,413,342 16,483,116 15,489,462 18.8 0 0 9,400 18,386,893 

Equity ............................................................................. 2,773,712 2,333,148 2,402,414 2,515,192 2,729,758 1.6 0 3 303 2,773,406 

Commodity & other........................................................ 1,230,649 1,134,781 1,128,387 1,065,818 1,014,757 21.3 0 0 228 1,230,421 

Total................................................................................ 

Trading Revenues: Cash & Derivative Instruments 

157,068,350 163,899,297 161,113,422 147,193,085 155,305,652 1.1 7 777 38,413 157,029,153 

Interest rate.................................................................... 950 1,503 1,724 -2,531 1,624 -41.5 0 -1 9 942 

Foreign exchange.......................................................... 3,090 2,096 2,084 1,880 1,936 59.6 0 0 17 3,073 

Equity ............................................................................. -923 185 -18 217 -98 841.8 0 0 0 -923 

Commodity & other (including credit derivatives) ........ 3,305 -1,944 -2,791 -10,145 -803 N/M 0 0 1 3,304 

Total trading revenues................................................... 

Share of Revenue 

6,422 1,839 998 -10,579 2,659 141.5 0 -1 27 6,396 

Trading revenues to gross revenues (%)...................... 4.6 1.3 0.7 -7.7 1.8 0.0 -0.2 0.6 4.8 

Trading revenues to net operating revenues (%) ......... 

HELD FOR PURPOSES OTHER THAN TRADING 

66.3 24.8 9.7 -278.0 14.9 0.0 -1.5 9.9 68.3 

Number of institutions reporting derivatives................. 968 973 1,011 965 951 1.8 72 585 238 73 

Total assets of institutions reporting derivatives .......... 10,394,145 9,804,368 9,912,089 9,660,650 9,299,269 11.8 5,214 251,908 747,924 9,389,099 

Total deposits of institutions reporting derivatives....... 

Derivative Contracts by Underlying Risk Exposure 

6,587,322 6,254,425 6,286,953 6,210,106 5,922,180 11.2 4,139 195,425 532,895 5,854,862 

Interest rate.................................................................... 2,537,534 2,668,858 2,709,938 2,362,029 2,648,713 -4.2 143 16,039 40,825 2,480,527 

Foreign exchange.......................................................... 87,565 94,832 84,124 131,087 120,808 -27.5 0 12 311 87,243 

Equity ............................................................................. 12,284 11,191 8,545 7,238 16,048 -23.5 12 154 725 11,392 

Commodity & other........................................................ 3,101 2,743 1,482 886 687 351.4 0 194 111 2,797 

Total notional amount .................................................... 2,640,484 2,777,625 2,804,088 2,501,240 2,786,256 -5.2 155 16,400 41,972 2,581,958 

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

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

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

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

in total assets. 

FDIC QUARTERLY 12 2008, VOLUME 2, NO. 4 
 

 

 

Quarterly Banking Profile 

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

Savings Banks) 

(dollar fgures in millions) 

3rd 2nd 1st 4th 3rd 

Quarter Quarter Quarter Quarter Quarter %Change 

2008 2008 2008 2007 2007 07Q3-08Q3 

Asset Size Distribution 

Less Than $100 $1 Billion Greater 

$100 Million To To $10 Than $10 

Million $1 Billion Billion Billion 

Assets Securitized and Sold with Servicing Retained or with 

Recourse or Other Seller-Provided Credit Enhancements 

Number of institutions reporting securitization activities ........................................ 

Outstanding Principal Balance by Asset Type................................................... 

133 135 134 127 125 6.4 15 57 24 37 

1-4 family residential loans............................................................................... $1,217,806 $1,087,331 $1,068,703 $1,056,363 $1,033,487 17.8 $64 $452 $1,856 $1,215,435 

Home equity loans............................................................................................ 6,880 7,822 8,341 9,353 9,894 -30.5 0 0 210 6,670 

Credit card receivables..................................................................................... 417,832 409,883 402,171 390,035 379,662 10.1 0 3,308 11,953 402,570 

Auto loans ......................................................................................................... 13,742 6,224 7,495 8,285 9,755 40.9 0 0 218 13,524 

Other consumer loans ...................................................................................... 28,090 28,870 27,787 28,542 29,386 -4.4 0 0 0 28,090 

Commercial and industrial loans...................................................................... 11,080 12,491 12,555 14,469 16,183 -31.5 0 4 4,892 6,184 

All other loans, leases, and other assets* ....................................................... 211,398 198,089 197,091 193,875 184,941 14.3 43 48 296 211,010 

Total securitized and sold......................................................................................... 

Maximum Credit Exposure by Asset Type 

1,906,828 1,750,710 1,724,143 1,700,921 1,663,308 14.6 107 3,812 19,425 1,883,483 

1-4 family residential loans............................................................................... 7,515 7,121 7,019 6,913 6,874 9.3 3 74 11 7,426 

Home equity loans............................................................................................ 1,347 1,527 1,752 2,000 2,336 -42.3 0 0 6 1,341 

Credit card receivables..................................................................................... 24,039 23,129 21,412 19,629 19,120 25.7 0 370 1,038 22,630 

Auto loans ......................................................................................................... 447 352 405 380 426 4.9 0 0 13 434 

Other consumer loans ...................................................................................... 1,428 1,417 1,406 1,379 2,114 -32.5 0 0 0 1,428 

Commercial and industrial loans...................................................................... 170 311 276 603 720 -76.4 1 27 73 69 

All other loans, leases, and other assets......................................................... 954 2,161 3,228 3,733 4,578 -79.2 12 255 9 679 

Total credit exposure ................................................................................................ 35,901 36,017 35,499 34,636 36,169 -0.7 16 727 1,151 34,008 

Total unused liquidity commitments provided to institution’s own securitizations ....... 

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

1,273 1,902 2,944 4,686 5,095 -75.0 0 0 0 1,273 

1-4 family residential loans............................................................................... 3.8 2.8 2.5 2.8 2.9 0.7 0.0 1.3 3.8 

Home equity loans............................................................................................ 1.3 0.6 0.7 0.8 0.7 0.0 0.0 2.3 1.3 

Credit card receivables..................................................................................... 2.5 2.1 2.2 2.2 2.1 0.0 1.5 1.7 2.5 

Auto loans ......................................................................................................... 2.1 2.2 1.9 2.4 1.9 0.0 0.0 1.1 2.1 

Other consumer loans ...................................................................................... 3.2 2.7 2.5 3.1 2.8 0.0 0.0 0.0 3.2 

Commercial and industrial loans...................................................................... 1.6 1.3 1.2 1.0 0.9 0.0 0.0 3.4 0.2 

All other loans, leases, and other assets......................................................... 0.2 0.3 0.1 0.1 0.1 0.0 0.0 0.0 0.2 

Total loans, leases, and other assets ...................................................................... 

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

3.0 2.3 2.2 2.4 2.4 0.4 1.3 2.1 3.1 

1-4 family residential loans............................................................................... 3.2 2.0 2.0 1.6 1.3 1.2 0.0 0.7 3.2 

Home equity loans............................................................................................ 0.7 0.7 0.7 0.5 0.4 0.0 0.0 1.2 0.7 

Credit card receivables..................................................................................... 2.1 2.1 2.1 1.9 1.7 0.0 1.2 1.4 2.2 

Auto loans ......................................................................................................... 0.2 0.3 0.3 0.4 0.2 0.0 0.0 0.1 0.2 

Other consumer loans ...................................................................................... 2.9 2.4 2.3 2.4 2.1 0.0 0.0 0.0 2.9 

Commercial and industrial loans...................................................................... 1.5 1.3 1.1 0.9 0.7 0.0 0.0 3.0 0.2 

All other loans, leases, and other assets......................................................... 0.2 0.2 0.2 0.1 0.1 0.0 0.0 0.0 0.2 

Total loans, leases, and other assets ...................................................................... 

Securitized Loans, Leases, and Other Assets Charged-Off (net, YTD, 

annualized, %) 

2.6 1.8 1.8 1.5 1.3 0.7 1.0 1.7 2.6 

1-4 family residential loans............................................................................... 0.3 0.1 0.0 0.1 0.0 0.0 0.0 0.1 0.3 

Home equity loans............................................................................................ 0.4 0.2 0.1 0.2 0.1 0.0 0.0 1.1 0.3 

Credit card receivables..................................................................................... 4.4 2.8 1.4 4.4 3.3 0.0 2.9 3.0 4.4 

Auto loans ......................................................................................................... 1.3 0.9 0.4 1.3 0.8 0.0 0.0 0.3 1.3 

Other consumer loans ...................................................................................... 0.6 0.4 0.2 1.3 1.1 0.0 0.0 0.0 0.6 

Commercial and industrial loans...................................................................... 3.6 1.9 0.8 2.0 1.2 0.0 0.0 7.9 0.2 

All other loans, leases, and other assets......................................................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 

Total loans, leases, and other assets ...................................................................... 

Seller’s Interests in Institution’s Own Securitizations—Carried as Loans 

1.2 0.7 0.4 1.1 0.8 0.0 2.5 3.8 1.2 

Home equity loans............................................................................................ 166 435 282 347 494 -66.4 0 0 0 166 

Credit card receivables..................................................................................... 98,826 82,604 73,418 86,748 77,451 27.6 0 223 4,230 94,373 

Commercial and industrial loans...................................................................... 

Seller’s Interests in Institution’s Own Securitizations—Carried as Securities 

636 3,506 3,263 7,671 6,018 -89.4 0 0 594 42 

Home equity loans............................................................................................ 6 7 9 9 10 -40.0 0 0 0 6 

Credit card receivables..................................................................................... 623 403 377 436 374 66.6 0 7 617 0 

Commercial and industrial loans...................................................................... 

Assets Sold with Recourse and Not Securitized 

15 1 1 2 6 150.0 0 0 0 15 

Number of institutions reporting asset sales........................................................... 

Outstanding Principal Balance by Asset Type 

784 771 759 759 747 5.0 150 479 109 46 

1-4 family residential loans............................................................................... 68,676 65,952 60,386 57,612 57,400 19.6 1,037 8,629 3,431 55,580 

Home equity, credit card receivables, auto, and other consumer loans ........ 1,606 1,718 1,886 637 775 107.2 1 30 62 1,513 

Commercial and industrial loans...................................................................... 7,314 4,794 4,579 4,728 5,053 44.7 0 174 14 7,125 

All other loans, leases, and other assets......................................................... 41,501 28,358 26,105 24,082 21,509 92.9 0 79 457 40,966 

Total sold and not securitized................................................................................... 

Maximum Credit Exposure by Asset Type 

119,097 100,822 92,956 87,059 84,737 40.5 1,038 8,912 3,963 105,183 

1-4 family residential loans............................................................................... 15,702 14,674 14,070 14,780 15,885 -1.2 130 1,436 1,958 12,179 

Home equity, credit card receivables, auto, and other consumer loans ........ 198 171 165 604 742 -73.3 1 11 60 126 

Commercial and industrial loans...................................................................... 6,180 3,614 3,335 3,393 3,422 80.6 0 155 14 6,011 

All other loans, leases, and other assets......................................................... 11,517 7,508 7,180 6,968 6,299 82.8 0 13 99 11,405 

Total credit exposure ................................................................................................ 

Support for Securitization Facilities Sponsored by Other Institutions 

33,597 25,967 24,750 25,745 26,348 27.5 131 1,615 2,131 29,721 

Number of institutions reporting securitization facilities sponsored by others ...... 50 48 49 49 50 0.0 24 18 3 5 

Total credit exposure ................................................................................................ 18,464 12,668 6,825 2,843 1,478 1149.3 9 72 48 18,335 

Total unused liquidity commitments ........................................................................ 

Other 

3,531 5,492 6,778 10,314 8,242 -57.2 0 0 0 3,531 

Assets serviced for others**..................................................................................... 

Asset-backed commercial paper conduits ............................................................. 

5,528,813 3,921,890 3,813,285 3,798,682 3,648,511 51.5 3,587 66,084 107,977 5,351,164 

Credit exposure to conduits sponsored by institutions and others................. 20,830 21,083 22,332 22,226 22,592 -7.8 2 1 236 20,591 

Unused liquidity commitments to conduits sponsored by institutions and 

others ........................................................................................................ 293,183 320,507 345,968 372,709 365,850 -19.9 0 27 0 293,156 

Net servicing income (for the quarter)..................................................................... 4,110 7,280 3,532 2,718 3,635 13.1 7 183 225 3,695 

Net securitization income (for the quarter).............................................................. 3,892 3,836 5,137 5,008 5,812 -33.0 0 60 213 3,619 

Total credit exposure to Tier 1 capital (%)***........................................................... 9.00 7.30 6.60 6.40 6.50 0.70 1.90 2.50 11.80 

*Line item titled “All other loans and all leases” for quarters prior to March 31, 2006. 

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

***Total credit exposure includes the sum of the three line items titled “Total credit exposure” reported above. 

FDIC QUARTERLY 13 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INSURANCE FUND INDICATORS 

n Insured Deposits Grow by 1.8 Percent, Up from the Prior Quarter’s 0.6 

Percent Growth Rate 

n DIF Reserve Ratio Declines 25 Basis Points to 0.76 Percent 

n Nine Institutions Failed During the Third Quarter 

n Changes Proposed for Risk-Based Assessments 

Total assets of the nation’s 8,384 FDIC-insured 

commercial banks and savings institutions increased 

by $273.2 billion (2.1 percent) during the third quarter of 2008. Fifty-seven percent of the quarter’s asset 

growth was funded by deposits, as noninterest-bearing 

deposits increased by 13.7 percent ($176.8 billion), 

while interest-bearing deposits decreased by 0.3 

percent ($21.9 billion). Domestic office deposits of 

banks and thrifts increased by 2.7 percent ($192.9 

billion), and foreign office deposits decreased by 2.5 

percent ($38.0 billion). 

Estimated insured deposits rose by 1.8 percent ($78.6 

billion) in the third quarter of 2008, and by 7.1 percent 

over the past four quarters. The third-quarter increase 

was up from the previous quarter’s 0.6 percent growth 

rate. For institutions existing as of June 30, 2008, and 

September 30, 2008, insured deposits increased during 

the third quarter at 4,820 institutions (58 percent), 

decreased at 3,508 institutions (42 percent), and 

remained unchanged at 35 institutions. 

The Deposit Insurance Fund (DIF) decreased by 23.5 

percent ($10.6 billion) during the third quarter to 

$34,588 million (unaudited). Accrued assessment 

income increased the fund by $881 million. Interest 

earned, combined with realized and unrealized gains 

(losses) on securities, added $653 million to the insurance fund. Operating and other expenses, net of other 

revenue, reduced the fund by $233 million. The 

reduction in the DIF was primarily due to an $11.9 

billion increase in loss provisions for bank failures. 

The DIF’s reserve ratio equaled 0.76 percent on 

September 30, 2008, down from 1.01 percent at June 

30, 2008, and 1.22 percent one year ago. The September figure is the lowest reserve ratio for the combined 

bank and thrift insurance fund since June 30, 1994, 

when the reserve ratio was 0.74 percent. Nine FDICinsured institutions with combined assets of $346 

billion failed during the third quarter of 2008, the 

largest number of quarterly failures since the third 

quarter of 1993 when 16 insured institutions failed. 

The failure of Washington Mutual Bank on September 25, 2008, which reported assets of $307 billion on 

its last quarterly financial report, was the largest single 

failure in the FDIC’s history. For 2008 through 

September 30, thirteen insured institutions with 

combined assets of $348 billion failed, at an estimated 

current cost to the DIF of $11.0 billion. 

Restoration Plan 

Recent bank failures significantly increased the 

Deposit Insurance Fund’s losses, resulting in a decline 

in the reserve ratio. As of September 30, 2008, the 

reserve ratio stood at 0.76 percent, down from 1.01 

percent at June 30 and 1.19 percent at March 31. The 

Federal Deposit Insurance Reform Act of 2005 (the 

Reform Act) requires that the FDIC’s Board of Directors adopt a restoration plan when the Deposit Insurance Fund reserve ratio falls below 1.15 percent or is 

expected to within six months. Absent extraordinary 

circumstances, the restoration plan must provide that 

the reserve ratio increase to at least 1.15 percent no 

later than five years after the plan’s establishment. 

The FDIC Board adopted a restoration plan on 

October 7. 

As part of the restoration plan, and in conjunction 

with it, the FDIC Board also authorized publication 

of a notice of proposed rule making (NPR) that 

would raise assessment rates and make other changes 

to the assessment system. The other changes are 

primarily to ensure that riskier institutions will bear a 

greater share of the proposed increase in assessments. 

Rates for the First Quarter of 2009 

The FDIC proposed raising the current assessment rates 

uniformly by 7 basis points for the first quarter 2009 

assessment period. Assessment rates for the first quarter 

of 2009 would range from 12 to 50 basis points. Institutions in the lowest risk category—Risk Category 

I—would pay between 12 and 14 basis points. 

FDIC QUARTERLY 14 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

Changes to Risk-Based Assessments Effective the 

Second Quarter of 2009 

Range of assessment rates 

Currently, risk-based assessment rates range between 

5 and 43 basis points—5 to 7 basis points for Risk 

Category I. Effective April 1, 2009, the proposal 

would widen the range of rates overall and within 

Risk Category I. Initial base assessment rates would 

range between 10 and 45 basis points—10 to 14 basis 

points for Risk Category I. The initial base rates for 

risk categories II, III, and IV would be 20, 30, and 45 

basis points, respectively. An institution’s total base 

assessment rate may be less than or greater than its 

initial base rate as a result of additional proposed risk 

adjustments (discussed below). 

Large Risk Category I institutions 

Under the current rules, the pricing method for most 

large institutions (generally, those with more than $10 

billion in assets) in Risk Category I relies on average 

CAMELS component ratings and long-term debt issuer 

ratings from credit agencies. Under the proposal, effective April 1, 2009, the assessment rate for a large institution would depend on (1) long-term debt ratings, (2) 

the weighted average CAMELS component rating, and 

(3) the rate determined from the financial ratios 

method, the method used for smaller banks. Each of 

the three components would receive a one-third 

weight. 

Brokered deposits 

For institutions in Risk Category I, the financial ratios 

method would include a new financial ratio that may 

increase the rate of an institution relying significantly 

on brokered deposits to fund rapid asset growth. This 

would only apply to institutions with brokered deposits of more than 10 percent of domestic deposits and 

cumulative asset growth of more than 20 percent over 

the last four years, adjusted for mergers and acquisitions. Like the other financial ratios used to determine 

rates in Risk Category I, a small change in the value 

of the new ratio may lead to only a small rate change, 

and it would not cause an institution’s rate to fall 

outside of the 10-14 basis point initial range. 

For institutions in risk categories II, III, or IV, the 

FDIC proposes to increase an institution’s assessment 

rate above its initial rate if its ratio of brokered deposits to domestic deposits is greater than 10 percent, 

regardless of the rate of asset growth. Such an increase 

would be capped at 10 basis points. 

Secured liabilities 

For institutions in any risk category, assessment rates 

would rise above initial rates for institutions relying 

significantly on secured liabilities. Assessment rates 

would increase for institutions with a ratio of secured 

liabilities to domestic deposits of greater than 15 

percent, with a maximum increase of 50 percent above 

the rate before such adjustment. 

Secured liabilities generally include repurchase agreements, Federal Home Loan Bank advances, secured 

Federal Funds purchased, and other secured borrowings. 

Unsecured debt and Tier I capital 

Institutions would receive a lower rate if they have longterm unsecured debt, including senior unsecured and 

subordinated debt with a remaining maturity of one year 

or more. 

For a large institution, the rate reduction would be 

determined by multiplying the institution’s long-term 

unsecured debt as a percentage of domestic deposits by 

20 basis points. The maximum allowable rate reduction 

would be 2 basis points. 

For a small institution, this adjustment would treat a 

certain amount of Tier 1 capital similarly to unsecured 

debt. The amount of qualifying Tier 1 capital would 

be the sum of one-half of the amount between 10 

percent and 15 percent of adjusted average assets and 

the full amount of Tier 1 capital exceeding 15 percent 

of adjusted average assets. 

Summary of base rate determination 

The minimum and maximum initial base assessment 

rates, range of possible rate adjustments, and minimum 

and maximum total base rates are as follows: 

FDIC QUARTERLY 15 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

Risk Category I Risk Category II Risk Category III Risk Category IV 

Initial base assessment rate 

Unsecured debt adjustment 

Secured liability adjustment 

Brokered deposit adjustment 

Total base assessment rate 

10 – 14 

-2 – 0 

0 – 7 

8 – 21 

20 

-2 – 0 

0 – 10 

0 – 10 

18 – 40 

30 

-2 – 0 

0 – 15 

0 – 10 

28 – 55 

45 

-2 – 0 

0 – 22.5 

0 – 10 

43 – 77.5 

Base rates and actual rates 

The NPR recommended that actual rates equal the 

proposed base rates. The FDIC would continue to have 

the authority to adopt actual rates that were higher or 

lower than total base assessment rates without the 

necessity of further notice-and-comment rulemaking, 

provided that: (1) the Board could not increase or 

decrease rates from one quarter to the next by more 

than 3 basis points without further notice-and-comment 

rulemaking; and (2) cumulative increases and decreases 

could not be more than 3 basis points higher or lower 

than the total base rates without further notice-andcomment rulemaking. 

Author: Kevin Brown, Sr. Financial Analyst 

Division of Insurance and Research 

(202) 898-6817 

FDIC QUARTERLY 16 2008, VOLUME 2, NO. 4 
 

 

 

Quarterly Banking Profile 

Table I-B. Insurance Fund Balances and Selected Indicators 

(dollar fgures in millions) 

Deposit Insurance Fund 

3rd 

Quarter 

2008 

2nd 

Quarter 

2008 

1st 

Quarter 

2008 

4th 

Quarter 

2007 

3rd 

Quarter 

2007 

2nd 

Quarter 

2007 

1st 

Quarter 

2007 

4th 

Quarter 

2006 

3rd 

Quarter 

2006 

2nd 

Quarter 

2006 

1st 

Quarter 

2006 

Beginning Fund Balance*..................... $45,217 $52,843 $52,413 $51,754 $51,227 $50,745 $50,165 $49,992 $49,564 $49,193 $48,597 

Changes in Fund Balance: 

Assessments earned............................... 

Interest earned on investment 

881 640 448 239 170 140 94 10 10 7 5 

securities .......................................... 526 651 618 585 640 748 567 476 622 665 478 

Realized gains on sale of investments ... 473 0 0 0 0 0 0 0 0 0 0 

Operating expenses ................................ 249 256 238 262 243 248 239 248 237 242 224 

Provision for insurance losses ................ 11,930 10,221 525 39 132 -3 -73 49 -50 -6 -45 

All other income, net of expenses**........ 

Unrealized gain/(loss) on 

16 1 0 -2 24 1 4 5 1 12 349 

available-for-sale securities............. -346 1,559 127 138 68 -162 81 -21 -18 -77 -57 

Total fund balance change -10,629 -7,626 430 659 527 482 580 173 428 371 596 

Ending Fund Balance* .......................... 

Percent change from four quarters 

34,588 45,217 52,843 52,413 51,754 51,227 50,745 50,165 49,992 49,564 49,193 

earlier......................................... -33.17 -11.73 4.13 4.48 3.52 3.36 3.15 3.23 3.35 3.21 3.31 

Reserve Ratio (%).................................. 0.76 1.01 1.19 1.22 1.22 1.21 1.20 1.21 1.22 1.23 1.23 

Estimated Insured Deposits***........... . 

Percent change from four quarters 

4,543,752 4,465,139 4,437,034 4,291,700 4,242,607 4,235,044 4,245,267 4,153,786 4,100,013 4,404,353 4,001,906 

earlier......................................... 7.10 5.43 4.52 3.32 3.48 4.82 6.08 6.76 7.02 7.52 8.50 

Domestic Deposits****.......................... 

Percent change from four quarters 

7,230,058 7,036,217 7,076,691 6,921,656 6,747,998 6,698,886 6,702,598 6,640,105 6,484,372 6,446,868 6,340,783 

earlier......................................... 7.14 5.04 5.58 4.24 4.07 3.91 5.71 6.59 6.76 8.68 8.70 

Number of institutions reporting ........ 8,394 8,462 8,505 8,545 8,570 8,625 8,661 8,692 8,755 8,790 8,803 

Deposit Insurance Fund Balance DIF Reserve Ratios* and Insured Deposits* Percent of Insured Deposits ($ Millions) 

DIFDIF Insured 1.29 1.28 1.26 1.25 1.23 1.23 1.22 1.21 1.20 1.21 1.22 1.22 1.19 Balance Deposits 

3/05 47,617 3,688,562 

1.01 6/05 48,023 3,757,728 

9/05 48,373 3,830,950 

12/05 48,597 3,890,941 0.76 3/06 49,193 4,001,906 

6/06 49,564 4,040,353 

9/06 49,992 4,100,013 

12/06 50,165 4,153,786 

3/07 50,745 4,245,267 

6/07 51,227 4,235,044 

9/07 51,754 4,242,607 

12/07 52,413 4,291,700 

3/08 52,843 4,437,034 

6/08 45,217 4,465,139 3/05 9/05 3/06 9/06 3/07 9/07 3/08 9/08 9/08 34,588 4,543,752 

Table II-B. Problem Institutions and Failed/Assisted Institutions 

(dollar fgures in millions) 2008***** 2007***** 2007 2006 2005 2004 2003 

Problem Institutions 

Number of institutions .............................................................. 171 65 76 50 52 80 116 

Total assets............................................................................... $115,639 $18,515 $22,189 $8,265 $6,607 $28,250 $29,917 

Failed/Assisted Institutions 

Number of institutions .............................................................. 13 2 3 0 0 4 3 

Total assets............................................................................... $347,569 $2,490 $2,615 $0 $0 $170 $947 

* Prior to 2006, amounts represent sum of separate BIF and SAIF amounts. 

** First Quarter 2006 includes previously escrowed revenue from SAIF-member exit fees. 

***The Emergency Economic Stabilization Act of 2008 directs the FDIC not to consider the temporary coverage increase to $250,000 in setting assessments. Therefore, we do not include 

the additional insured deposits in calculating the fund reserve ratio, which guides our assessment planning. If Congress were to decide to leave the $250,000 coverage level in place 

indefnitely, however, it would be necessary to account for the increase in insured deposits to determine the appropriate level of the fund. 

  Domestic deposits differ from Table II-A due to inclusion of insured branches of foreign banks. 

** *** Through September 30. 

FDIC QUARTERLY 17 2008, VOLUME 2, NO. 4 
 

 

 

 

 

Table III-B. Estimated FDIC-Insured Deposits by Type of Institution 

(dollar fgures in millions) 

September 30, 2008 

Number of 

Institutions 

Total 

Assets 

Domestic 

Deposits* 

Est. Insured 

Deposits 

Commercial Banks and Savings Institutions 

FDIC-Insured Commercial Banks ............................................... 7,146 $12,050,414 $6,273,276 $3,777,203 

FDIC-Supervised ................................................................... 4,715 1,911,907 1,397,631 1,000,214 

OCC-Supervised.................................................................... 1,556 8,334,895 3,882,905 2,257,327 

Federal Reserve-Supervised................................................. 875 1,803,611 992,740 519,662 

FDIC-Insured Savings Institutions .............................................. 1,238 1,523,277 948,687 761,547 

OTS-Supervised Savings Institutions.................................... 819 1,217,637 740,193 595,575 

FDIC-Supervised State Savings Banks................................. 419 305,640 208,494 165,972 

Total Commercial Banks and Savings Institutions..................... 8,384 13,573,691 7,221,963 4,538,750 

Other FDIC-Insured Institutions 

U.S. Branches of Foreign Banks ................................................. 10 39,459 8,095 5,002 

Total FDIC-Insured Institutions..................................................... 8,394 13,613,150 7,230,058 4,543,752 

* Excludes $1.51 trillion in foreign offce deposits, which are uninsured. 

Table IV-B. Distribution of Institutions and Domestic Deposits Among Risk Categories 

Quarter Ending June 30, 2008 

(dollar fgures in billions) 

Risk Category 

Annual 

Rate in 

Basis Points 

Number of 

Institutions 

Percent 

of Total 

Institutions 

Domestic 

Deposits 

Percent 

of Total 

Assessment 

Base 

I - Minimum.............................................................................. 5 2,038 24.1 2,684 38.2 

I - Middle ................................................................................. 5.01- 6.00 2,633 31.1 2,192 31.2 

I - Middle ................................................................................. 6.01- 6.99 1,587 18.8 702 10.0 

I - Maximum ............................................................................ 7 1,478 17.5 504 7.2 

II............................................................................................... 10 590 7.0 897 12.7 

III.............................................................................................. 28 122 1.4 27 0.4 

IV ............................................................................................. 43 14 0.2 29 0.4 

Note: Institutions are categorized based on supervisory ratings, debt ratings and fnancial data as of June 30, 2008. 

Rates do not refect the application of assessment credits. See notes to users for further information on risk categories and rates. 

FDIC QUARTERLY 18 2008, VOLUME 2, NO. 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

Notes To Users 

This publication contains financial data and other information for depository institutions insured by the Federal Deposit 

Insurance Corporation (FDIC). These notes are an integral 

part of this publication and provide information regarding the 

comparability of source data and reporting differences over 

time. 

Tables I-A through VIII-A. 

The information presented in Tables I-A through V-A of the 

FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and savings institutions. Tables VI-A (Derivatives) and VII-A (Servicing, 

Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered 

savings banks that file quarterly Call Reports. Table VIII-A 

(Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured institutions. 

Some tables are arrayed by groups of FDIC-insured institutions 

based on predominant types of asset concentration, while 

other tables aggregate institutions by asset size and geographic 

region. Quarterly and full-year data are provided for selected 

indicators, including aggregate condition and income data, 

performance ratios, condition ratios, and structural changes, as 

well as past due, noncurrent, and charge-off information for 

loans outstanding and other assets. 

Tables I-B through IV-B. 

A separate set of tables (Tables I-B through IV-B) provides 

comparative quarterly data related to the Deposit Insurance 

Fund (DIF), problem institutions, failed/assisted institutions, 

estimated FDIC-insured deposits, as well as assessment rate 

information. Depository institutions that are not insured by 

the FDIC through the DIF are not included in the FDIC 

Quarterly Banking Profile. U.S. branches of institutions headquartered in foreign countries and non-deposit trust companies 

are not included unless otherwise indicated. Efforts are made 

to obtain financial reports for all active institutions. However, 

in some cases, final financial reports are not available for 

institutions that have closed or converted their charters. 

DATA SOURCES 

The financial information appearing in this publication is 

obtained primarily from the Federal Financial Institutions 

Examination Council (FFIEC) Call Reports and the OTS 

Thrift Financial Reports submitted by all FDIC-insured depository institutions. This information is stored on and retrieved 

from the FDIC’s Research Information System (RIS) data 

base. 

COMPUTATION METHODOLOGY 

Parent institutions are required to file consolidated reports, 

while their subsidiary financial institutions are still required to 

file separate reports. Data from subsidiary institution reports 

are included in the Quarterly Banking Profile tables, which can 

lead to double-counting. No adjustments are made for any 

double-counting of subsidiary data. Additionally, certain 

adjustments are made to the OTS Thrift Financial Reports to 

provide closer conformance with the reporting and accounting 

requirements of the FFIEC Call Reports. 

All asset and liability figures used in calculating performance 

ratios represent average amounts for the period (beginning-ofperiod amount plus end-of-period amount plus any interim 

periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s) 

are included in average assets since the year-to-date income 

includes the results of all merged institutions. No adjustments 

are made for “purchase accounting” mergers. Growth rates 

represent the percentage change over a 12-month period in 

totals for institutions in the base period to totals for institutions in the current period. 

All data are collected and presented based on the location of 

each reporting institution’s main office. Reported data may 

include assets and liabilities located outside of the reporting 

institution’s home state. In addition, institutions may relocate 

across state lines or change their charters, resulting in an 

inter-regional or inter-industry migration, e.g., institutions can 

move their home offices between regions, and savings institutions can convert to commercial banks or commercial banks 

may convert to savings institutions. 

ACCOUNTING CHANGES 

FASB Statement No. 157 Fair Value Measurements issued in 

September 2006 and FASB Statement No. 159 The Fair Value 

Option for Financial Assets and Financial Liabilities issued in 

February 2007—both are effective in 2008 with early adoption 

permitted in 2007. FAS 157 clarifies fair value and establishes 

a framework for developing fair value estimates for the fair 

value measurements that are already required or permitted 

under other standards. Fair value continues to be used for 

derivatives, trading securities, and available-for-sale securities. 

Changes in fair value go through earnings for the derivatives 

and trading securities. Changes in the fair value of availablefor-sale securities are reported in other comprehensive 

income. Available-for-sale securities and held-to-maturity 

debt securities are written down to fair value through earnings if impairment is other than temporary and mortgage 

loans held for sale are reported at the lower of cost or fair 

value. Loans held for investment are also subject to impairment but are written down based on the present value of discounted cash flows. FAS 159 allows banks to elect a 

fair value option when assets are recognized on the balance 

sheet and to report certain financial assets and liabilities at 

fair value with subsequent changes in fair value included in 

earnings. Existing eligible items can be fair-valued as early 

as January 2007 under FAS 159, if a bank adopts FAS 157. 

FASB Statement No. 158 Employers’ Accounting for Defined 

Benefit Pension and Other Postretirement Plans—issued in 

September 2006 requires a bank to recognize in 2007, and 

subsequently, the funded status of its postretirement plans on 

its balance sheet. An overfunded plan is recognized as an 

asset and an underfunded plan is recognized as a liability. An 

adjustment is made to equity as accumulated other comprehensive income (AOCI) upon application of FAS 158, and 

AOCI is adjusted in subsequent periods as net periodic benefit 

costs are recognized in earnings. 

FASB Statement No. 156 Accounting for Servicing of Financial 

Assets—issued in March 2006 and effective in 2007, requires 

all separately recognized servicing assets and liabilities to be 

initially measured at fair value and allows a bank the option 

to subsequently adjust that value by periodic revaluation 

and recognition of earnings or by periodic amortization to 

earnings. 

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FASB Statement No. 155 Accounting for Certain Hybrid Financial 

Instruments—issued in February 2006, requires bifurcation of 

certain derivatives embedded in interests in securitized financial assets and permits fair value measurement (i.e., a fair 

value option) for any hybrid financial instrument that contains 

an embedded derivative that would otherwise require bifurcation under FASB Statement No. 133, Accounting for Derivative 

Instruments and Hedging Activities (FAS 133). In addition, FAS 

155 clarifies which interest-only and principal-only strips are 

not subject to FAS 133. 

Purchased Impaired Loans and Debt Securities—Statement of 

Position 03-3, Accounting for Certain Loans or Debt Securities 

Acquired in a Transfer. The SOP applies to loans and debt 

securities acquired in fiscal years beginning after December 

15, 2004. In general, this Statement of Position applies to 

“purchased impaired loans and debt securities” (i.e., loans and 

debt securities that a bank has purchased, including those 

acquired in a purchase business combination, when it is probable, at the purchase date, that the bank will be unable to 

collect all contractually required payments receivable). Banks 

must follow Statement of Position 03-3 for Call Report purposes. The SOP does not apply to the loans that a bank has 

originated, prohibits “carrying over” or creation 

of valuation allowances in the initial accounting, and any subsequent valuation allowances reflect only those losses 

incurred by the investor after acquisition. 

GNMA Buy-back Option—If an issuer of GNMA securities 

has the option to buy back the loans that collateralize the 

GNMA securities, when certain delinquency criteria are met, 

FASB Statement No. 140 requires that loans with this buyback option must be brought back on the issuer’s books as 

assets. The rebooking of GNMA loans is required regardless 

of whether the issuer intends to exercise the buy-back option. 

The banking agencies clarified in May 2005 that all GNMA 

loans that are rebooked because of delinquency should be 

reported as past due according to their contractual terms. 

FASB Interpretation No. 46—The FASB issued Interpretation 

No. 46, Consolidation of Variable Interest Entities, in January 

2003 and revised it in December 2003. Generally, banks with 

variable interests in variable interest entities created after 

December 31, 2003, must consolidate them. The timing of 

consolidation varies with certain situations with application as 

late as 2005. The assets and liabilities of a consolidated variable interest entity are reported on a line-by-line basis according to the asset and liability categories shown on the bank’s 

balance sheet, as well as related income items. Most small 

banks are unlikely to have any “variable interests” in variable 

interest entities. 

FASB Interpretation No. 48 on Uncertain Tax Positions—FASB 

Interpretation No. 48, Accounting for Uncertainty in Income 

Taxes (FIN 48), was issued in June 2006 as an interpretation 

of FASB Statement No. 109, Accounting for Income Taxes. 

Under FIN 48, the term “tax position” refers to “a position in 

a previously filed tax return or a position expected to be taken 

in a future tax return that is reflected in measuring current 

or deferred income tax assets and liabilities.” FIN 48 further 

states that a “tax position can result in a permanent reduction 

of income taxes payable, a deferral of income taxes otherwise 

currently payable to future years, or a change in the expected 

realizability of deferred tax assets.” As originally issued, FIN 

48 was effective for fiscal years beginning after December 15, 

2006. Banks must adopt FIN 48 for Call Report purposes in 

accordance with the interpretation’s effective date except as 

follows. On January 23, 2008, the FASB decided to defer the 

effective date of FIN 48 for eligible nonpublic enterprises and 

to require those enterprises to adopt FIN 48 for annual periods 

beginning after December 15, 2007. 

FASB Statement No. 123 (Revised 2004) and Share-Based 

Payments—requires all entities to recognize compensation 

expense in an amount equal to the fair value of share-based 

payments (e.g., stock options and restricted stock, granted 

to employees). As of January 2006 all banks must adopt FAS 

123(R). The compensation cost is typically recognized over 

the vesting period with a corresponding credit to equity. 

The recording of the compensation cost also gives rise to a 

deferred tax asset. 

FASB Statement No. 133 Accounting for Derivative Instruments 

and Hedging Activities—All banks must recognize derivatives 

as either assets or liabilities on the balance sheet, measured at 

fair value. A derivative may be specifically designated as 

a “fair value hedge,” a “cash flow hedge,” or a hedge of a 

foreign currency exposure. The accounting for changes in 

the value of a derivative (gains and losses) depends on the 

intended use of the derivative, its resulting designation, and 

the effectiveness of the hedge. Derivatives held for purposes 

other than trading are reported as “other assets” (positive fair 

values) or “other liabilities” (negative fair values). For a fair 

value hedge, the gain or loss is recognized in earnings and 

“effectively” offsets loss or gain on the hedged item attributable to the risk being hedged. Any ineffectiveness of the 

hedge could result in a net gain or loss on the income statement. Accumulated net gains (losses) on cash flow hedges are 

recorded on the balance sheet as “accumulated other comprehensive income” and the periodic change in the accumulated 

net gains (losses) for cash flow hedges is reflected directly in 

equity as the value of the derivative changes. FASB 

Statement No. 149, Amendment of Statement 133 

on Derivative Instruments and Hedging Activities provides 

guidance on the circumstances in which a loan commitment 

must be accounted for as a derivative. Under Statement No. 

149, loan commitments that relate to the origination of mortgage loans that will be held for sale, commonly referred to as 

interest rate lock commitments, must be accounted for as 

derivatives on the balance sheet by the issuer of the 

commitment. 

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, 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—assessable deposits consist of DIF deposits 

(deposits insured by the FDIC Deposit Insurance Fund) in 

banks’ domestic offices with certain adjustments. 

Assets securitized and sold—total outstanding principal balance 

of assets securitized and sold with servicing retained or other 

seller-provided credit enhancements. 

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Quarterly Banking Profile 

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. 

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. 

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 some insurance funds in order to continue 

operating. 

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. 

Goodwill and other intangibles—intangible assets include servicing rights, purchased credit card relationships, and other 

identifiable intangible assets. Goodwill is the excess of the 

purchase price over the fair market value of the net assets 

acquired, less subsequent impairment adjustments. Other 

intangible assets are recorded at fair value, less subsequent 

quarterly amortization and impairment adjustments. 

Loans secured by real estate—includes home equity loans, 

junior liens secured by 1-4 family residential properties, and 

all other loans secured by real estate. 

Loans to individuals—includes outstanding credit card balances 

and other secured and unsecured consumer loans. 

Long-term assets (5+ years)—loans and debt securities with 

remaining maturities or repricing intervals of over five years. 

Maximum credit exposure—the maximum contractual credit 

exposure remaining under recourse arrangements and other 

seller-provided credit enhancements provided by the reporting 

bank to securitizations. 

Mortgage-backed securities—certificates of participation in 

pools of residential mortgages and collateralized mortgage obligations issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below. 

Net charge-offs—total loans and leases charged off (removed 

from balance sheet because of uncollectibility), less amounts 

recovered on loans and leases previously charged off. 

Net interest margin—the difference between interest and dividends earned on interest-bearing assets and interest paid to 

depositors and other creditors, expressed as a percentage of 

average earning assets. No adjustments are made for interest 

income that is tax exempt. 

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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. 

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 file a Thrift Financial Report (TFR), the valuation allowance subtracted also includes allowances for 

other repossessed assets. Also, for TFR filers the components 

of other real estate owned are reported gross of valuation 

allowances. 

Percent of institutions with earnings gains—the percent of institutions that increased their net income (or decreased their 

losses) compared to the same period a year earlier. 

“Problem” institutions—federal regulators assign a composite 

rating to each financial institution, based upon an evaluation 

of financial and operational criteria. The rating is based on a 

scale of 1 to 5 in ascending order of supervisory concern. 

“Problem” institutions are those institutions with financial, 

operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk 

and supervisory concern, they are rated either a “4” or “5.” 

The number and assets of “problem” institutions are based on 

FDIC composite ratings. Prior to March 31, 2008, for institutions whose primary federal regulator was the OTS, the OTS 

composite rating was used. 

Recourse—an arrangement in which a bank retains, in form or 

in substance, any credit risk directly or indirectly associated 

with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the 

bank’s claim on the asset. If a bank has no claim on an asset 

it has sold, then the retention of any credit risk is recourse. 

Reserves for losses—the allowance for loan and lease losses on 

a consolidated basis. 

Restructured loans and leases—loan and lease financing receivables with terms restructured from the original contract. 

Excludes restructured loans and leases that are not in compliance with the modified terms. 

Retained earnings—net income less cash dividends on common 

and preferred stock for the reporting period. 

Return on assets—net income (including gains or losses on 

securities and extraordinary items) as a percentage of average 

total assets. The basic yardstick of bank profitability. 

Return on equity—net income (including gains or losses on 

securities and extraordinary items) as a percentage of average 

total equity capital. 

Risk-based capital groups—definition: 

Total Tier 1 

Risk-Based Risk-Based Tier 1 Tangible 

(Percent) Capital * Capital * Leverage Equity 

Well-Capitalized ≥10 and ≥6 and ≥5 – 

Adequately 

capitalized ≥8 and ≥4 and ≥4 – 

Undercapitalized ≥6 and ≥3 and ≥3 – 

Significantly 

undercapitalized <6 or <3 or <3 and >2 

Critically 

undercapitalized – – – ≤2 

*As a percentage of risk-weighted assets. 

Risk Categories and Assessment Rate Schedule—The current risk 

categories and assessment rate schedule became effective 

January 1, 2007. Capital ratios and supervisory ratings 

distinguish one risk category from another. The following 

table shows the relationship of risk categories (I, II, III, IV) to 

capital and supervisory groups as well as the assessment rates 

(in basis points) for each risk category. Supervisory Group A 

generally includes institutions with CAMELS composite 

ratings of 1 or 2; Supervisory Group B generally includes 

institutions with a CAMELS composite rating of 3; and 

Supervisory Group C generally includes institutions 

with CAMELS composite ratings of 4 or 5. For purposes 

of risk-based assessment capital groups, undercapitalized 

includes institutions that are significantly or critically 

undercapitalized. 

Supervisory Group 

Capital Group A B C 

I 

1. Well Capitalized 5–7 bps III II 

28 bps 10 bps 2. Adequately Capitalized 

III IV 3. Undercapitalized 28 bps 43 bps 

Assessment rates are 3 basis points above the base rate schedule. The FDIC may adjust rates up or down by 3 basis points 

from the base rate schedule without notice and comment, provided that any single adjustment from one quarter to the next 

cannot move rates more than 3 basis points. 

For most institutions in Risk Category I, the assessment rate 

assigned will be based on a combination of financial ratios and 

CAMELS component ratings. 

For large institutions in Risk Category I (generally those 

with at least $10 billion in assets) that have long-term debt 

issuer ratings, assessment rates will be determined by weighting CAMELS component ratings 50 percent and long-term 

debt issuer ratings 50 percent. For all large Risk Category I 

institutions, additional risk factors will be considered to determine whether assessment rates should be adjusted. 

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Quarterly Banking Profile 

This additional information includes market data, financial 

performance measures, considerations of the ability of an 

institution to withstand financial stress, and loss severity indicators. Any adjustment will be limited to no more than 1⁄2 

basis point. 

Beginning in 2007, each institution is assigned a risk-based 

rate for a quarterly assessment period near the end of the 

quarter following the assessment period. Payment will generally be due on the 30th day of the last month of the quarter following the assessment period. Supervisory rating changes will 

be effective for assessment purposes as of the examination 

transmittal date. For institutions with long-term debt issuer 

ratings, changes in ratings will be effective for assessment purposes as of the date the change was announced. 

Risk-weighted assets—assets adjusted for risk-based capital 

definitions which include on-balance-sheet as well as offbalance-sheet items multiplied by risk-weights that range from 

zero to 200 percent. A conversion factor is used to assign a 

balance sheet equivalent amount for selected off-balancesheet accounts. 

Securities—excludes securities held in trading accounts. Banks’ 

securities portfolios consist of securities designated as “heldto-maturity,” which are reported at amortized cost (book 

value), and securities designated as “available-for-sale,” 

reported at fair (market) value. 

Securities gains (losses)—realized gains (losses) on held-tomaturity and available-for-sale securities, before adjustments 

for income taxes. Thrift Financial Report (TFR) filers also 

include gains (losses) on the sales of assets held for sale. 

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. 

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 & 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.) 

Volatile liabilities—the sum of large-denomination time deposits, foreign-office deposits, federal funds purchased, securities 

sold under agreements to repurchase, and other borrowings. 

Yield on earning assets—total interest, dividend, and fee 

income earned on loans and investments as a percentage of 

average earning assets. 

FDIC QUARTERLY 23 2008, VOLUME 2, NO. 4