FDIC QUARTERLY A

Quarterly

2021

Volume 15, Number 3

Federal Deposit 

Insurance Corporation

Quarterly Banking Profile:

Second Quarter 2021

The Importance of Technology 

Investments for Community Bank 

Lending and Deposit Taking 

During the Pandemic
FDIC QUARTERLY

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

Federal Deposit Insurance Corporation and contains a comprehensive summary of the 

most current financial results for the banking industry. Feature articles appearing in the 

FDIC Quarterly range from timely analysis of economic and banking trends at the national 

and regional level that may affect the risk exposure of FDIC-insured institutions to research 

on issues affecting the banking system and the development of regulatory policy.

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Chairman

Jelena McWilliams

Director, Division of Insurance and Research

Diane Ellis

Executive Editors

George French

Shayna M. Olesiuk

Managing Editors

Rosalind Bennett

Alan Deaton

Patrick Mitchell

Philip A. Shively

Editors

Clayton Boyce

Kathy Zeidler

Publication Manager

Lynne Montgomery

Media Inquiries

(202) 898-6993
FDIC QUARTERLY i

2021 FDIC QUARTERLY

Volume 15 • Number 3

The views expressed are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. Some of the information used 

in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute 

an endorsement of its accuracy by the Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited. Please 

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

Quarterly Banking Profile: Second Quarter 2021

FDIC-insured institutions reported aggregate net income of $70.4 billion in second quarter 

2021, an increase of $51.9 billion (281 percent) from the same quarter a year ago, driven by a 

$73 billion (117.3 percent) decline in provision expense. Two-thirds of all banks (66.4 percent) 

reported year-over-year improvement in quarterly net income. The share of profitable 

institutions increased slightly, up 1.4 percent year over year to 95.8 percent. However, net 

income declined $6.4 billion (8.3 percent) from first quarter 2021, driven by an increase 

in provision expense from first quarter 2021 (up $3.7 billion to negative $10.8 billion). The 

aggregate return on average assets ratio of 1.24 percent rose 89 basis points from a year ago 

but fell 14 basis points from first quarter 2021. See page 1

Community Bank Performance Community banks—which represent 91 percent of insured institutions—reported yearover-year quarterly net income growth of $1.9 billion (28.7 percent) in second quarter 

2021, despite a narrower net interest margin. Nearly two-thirds of all community banks 

(65 percent) reported higher net income from the year-ago quarter. The pretax return on 

assets ratio of 1.54 percent rose 20 basis points from a year ago but fell 4 basis points from 

first quarter 2021. See page 15.

Insurance Fund Indicators The Deposit Insurance Fund (DIF) balance totaled $120.5 billion at the end of second quarter 

2021, an increase of $1.2 billion from the previous quarter. Assessment income, interest 

earned on investments, and negative provisions for insurance losses were the largest sources 

of the increase, offset partially by operating expenses and unrealized losses on availablefor-sale securities. The DIF reserve ratio was 1.27 percent at June 30, 2021, up 2 basis points 

from March 31, 2021, and down 3 basis points from June 30, 2020. See page 23.

Featured Article:

The Importance of Technology Investments for Community 

Bank Lending and Deposit Taking During the Pandemic 

Community banks that invested more in technology generally reported faster loan and 

deposit growth in 2020 than did banks with less technology investment. Moreover, the 

differences in loan and deposit growth associated with technology investment were 

greater in 2020 than the differences reported prior to the pandemic. Faster loan growth for 

community banks with greater technology investment largely stemmed from participation 

in the Paycheck Protection Program (PPP). These community banks, on average, originated 

a greater share of PPP loans regardless of the loan size, origination date, or borrower 

distance from the nearest bank branch. Meanwhile, the larger increases in deposit growth of 

community banks that invested more in technology were due to increases in deposit balances 

of existing customers rather than from new depositors. See page 31.

QUARTERLY BANKING PROFILE Second Quarter 2021

FDIC QUARTERLY 1

INSURED INSTITUTION PERFORMANCE

Quarterly Net Income Continued to Increase Year Over Year, Driven by a Second Consecutive Quarter of 

Negative Provision Expense

Net Interest Margin Contracted Further to a New Record Low

Quarterly Loan Balances Grew for the First Time Since Second Quarter 2020

Asset Quality Continued to Improve

Quarterly Net Income 

Continued to Increase Year 

Over Year, Driven by a 

Second Consecutive Quarter 

of Negative Provision 

Expense

Net income totaled $70.4 billion in second quarter 2021, an increase of $51.9 billion 

(281 percent) from the same quarter a year ago, driven by a $73 billion (117.3 percent) 

decline in provision expense. Two-thirds of all banks (66.4 percent) reported year-overyear improvement in quarterly net income. The share of profitable institutions increased 

slightly, up 1.4 percent year over year to 95.8 percent. However, net income declined 

$6.4 billion (8.3 percent) from first quarter 2021, driven by an increase in provision expense 

from first quarter 2021 (up $3.7 billion to negative $10.8 billion). The aggregate return on 

average assets ratio of 1.24 percent rose 89 basis points from a year ago but fell 14 basis 

points from first quarter 2021.

Net Interest Margin 

Contracted Further to a 

New Record Low

The average net interest margin contracted 31 basis points from a year ago to 2.50 percent—

the lowest level on record. The contraction is due to the year-over-year reduction in 

earning asset yields (down 53 basis points to 2.68 percent) outpacing the decline in average 

funding costs (down 22 basis points to 0.18 percent). Both ratios declined from first quarter 

2021 to record lows. Aggregate net interest income declined $2.2 billion (1.7 percent) 

from second quarter 2020. Reductions in net interest income at the largest institutions 

drove the aggregate decline in net interest income, as more than three-fifths of all banks 

(64.1 percent) reported higher net interest income compared with a year ago.

Noninterest Income 

Continued to Increase 

Despite Lower Trading 

Revenue

Noninterest income increased (up $5 billion, or 7.1 percent) from second quarter 2020 due 

to improvement in several categories. During the year ending second quarter 2021, “all 

other noninterest income” rose $7.9 billion (27.5 percent), offsetting both a $5.9 billion 

(42.1 percent) decline in trading revenue and a reduction in net gains on loan sales of 

$1.5 billion (19.7 percent).1 Increased income from service charges on deposit accounts 

(up $1.5 billion, or 21.5 percent) and fiduciary activities (up $1.2 billion, or 13.1 percent) 

from second quarter 2020 also supported the year-over-year improvement in noninterest 

income. More than two-thirds of all institutions (69.6 percent) reported higher noninterest 

income compared with the year-ago quarter. 

Securities and Other Gains/Losses, Net

Net Operating Income

Quarterly Net Income

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

-60

-40

-20

0

20

40

60

80

100

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Chart 1

Source: FDIC.

Percent

Quarterly Net Interest Margin

All FDIC-Insured Institutions

 Assets > $250 Billion

 Assets $10 Billion - $250 Billion

 Assets $1 Billion - $10 Billion

 Assets $100 Million - $1 Billion

 Assets < $100 Million

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Chart 2

1 All other noninterest income includes, but is not limited to, bankcard and credit card interchange fees, income and fees 

from wire transfers, and income and fees from automated teller machines.
2021   •   Volume 15  • Number 3

2 FDIC QUARTERLY

Noninterest Expense 

Relative to Average Assets 

Declined to a Record Low

Noninterest expense rose $3.7 billion (3 percent) year over year, led by an increase in salary 

and benefit expense and “all other noninterest expense.” Nearly three-fourths of all banks 

(74.5 percent) reported higher noninterest expense year over year. Higher average assets 

per employee (up $0.9 million) also increased from a year ago to $11.1 million. However, 

noninterest expense as a percentage of average assets continued to decline, reaching a 

record low of 2.23 percent, down 14 basis points from the year-ago quarter.

Net Operating Revenue to 

Average Assets Continued 

to Decline

Net operating revenue (net interest income plus noninterest income) increased $2.8 billion 

(1.4 percent) from the year-ago quarter as improvement in noninterest income offset 

the decline in net interest income. However, growth in average assets and declining 

net interest income contributed to a 29 basis point decline in the ratio of quarterly net 

operating revenue to average assets. The ratio stood at 3.62 percent for the quarter—the 

lowest level since third quarter 1984.

Provision Expense Was 

Negative for the Second 

Consecutive Quarter

Provisions for credit losses (provisions) increased $3.7 billion from first quarter 2021 but 

declined $73 billion (117.3 percent) from the year-ago quarter to negative $10.8 billion.2 More 

than three-fifths of all institutions (63.3 percent) reported lower provisions compared with 

the year-ago quarter. Nearly 14 percent of institutions reported an increase in provisions 

during the same period, while the remaining institutions reported no material change.

The net number of banks that have adopted current expected credit loss (CECL) accounting 

fell by 1 to 319 from first quarter 2021.3 CECL adopters reported aggregate negative 

provisions of $10.7 billion in second quarter, an increase of $4.3 billion from the previous 

quarter and a reduction of $67.6 billion from one year ago. Provisions for banks that have 

not adopted CECL accounting totaled negative $128.1 million (a reduction of $530.6 million 

from a quarter ago and $5.2 billion from one year ago).

Allowance for Loan and 

Lease Losses to Total 

Loans Remained Higher 

Than Pre-Pandemic Level

The allowance for loan and lease losses (ALLL) as a percentage of total loans and leases 

declined 41 basis points to 1.80 percent from the year-ago quarter due to negative provisions, 

but ALLL remains higher than the level of 1.18 percent reported in fourth quarter 2019. 

Similarly, the ALLL as a percentage of loans that are 90 days or more past due or in 

nonaccrual status (coverage ratio) declined 27 percentage points from the year-ago quarter 

to 178 percent but continued to exceed the financial crisis average of 79.1 percent.4 All insured 

institutions except the largest Quarterly Banking Profile asset size group (greater than 

$250 billion) reported higher aggregate coverage ratios compared with first quarter 2021.

Change in Quarterly Loan-Loss Provisions

All FDIC-Insured Institutions

Quarter-Over-Quarter Change

($ Billions)

Source: FDIC.

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Chart 3

Source: FDIC.

Note: The reserve coverage ratio is the loan-loss reserves to noncurrent loans and leases.

$ Billions Coverage Ratio (Percent)

Reserve Coverage Ratio

All FDIC-Insured Institutions

0

50

100

150

200

250

300

350

400

450

 Loan-Loss Reserves (Le Axis) 

 Noncurrent Loans (Le Axis)

 Noncurrents Adjusted for GNMA Guaranteed Loans (Le Axis)

 Reserve Coverage Ratio (Right Axis) 

 Coverage Adjusted for GNMA Guaranteed Loans (Right Axis)

0

50

100

150

200

250

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Chart 4

2 Provisions for credit losses include both losses for loans and securities for CECL adopters but only loan losses for 

non-adopters. 

3 Changes to the number of CECL accounting adopters may result from closures, mergers and acquisitions, or 

examination or audit findings. 

4 The financial crisis refers to the period between December 2007 and June 2009. 
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 3

Noncurrent Loans 

Continued to Decline 

Quarter Over Quarter

Loans that were 90 days or more past due or in nonaccrual status (noncurrent loans) 

continued to decline (down $13.2 billion, or 10.8 percent) from first quarter 2021, supporting 

a 12 basis point reduction in the noncurrent rate to 1.01 percent. Noncurrent 1–4 family 

residential loans declined most among loan categories from the previous quarter (down 

$5.9 billion, or 10.9 percent), followed by noncurrent commercial and industrial (C&I) 

loans (down $3.1 billion, or 13.9 percent). Three-fifths of all banks reported a reduction in 

noncurrent loans compared with first quarter 2021.

The Net Charge-Off Rate 

Declined Further to a 

Record Low

Net charge-offs continued to decline for the fourth consecutive quarter (down 

$8.3 billion, or 53.2 percent). In second quarter, the net charge-off rate fell 30 basis points 

to 0.27 percent, a record low. A decline in net charge-offs of credit card loans (down 

$3.3 billion, or 39.8 percent) and C&I loans (down $2.9 billion, or 69.7 percent) drove threefourths (75.5 percent) of the reduction in net charge-offs from the year-ago quarter. More 

than half of all banks (51.6 percent) reported a decline in net charge-offs from a year ago.

Total Assets Increased, 

Especially Those With 

Maturities of More Than 

Five Years

Total assets increased $224.8 billion (1 percent) from first quarter 2021 to $22.8 trillion. 

More than four-fifths (86.1 percent) of all banks reported an increase in assets with 

contractual maturities greater than five years compared with a quarter ago. Cash and 

balances due from depository institutions declined $108 billion (3 percent), while securities 

rose $248.9 billion (4.5 percent). Growth in mortgage-backed securities (up $122.7 billion, 

or 3.8 percent) and U.S. Treasury securities (up $91.2 billion, or 8.5 percent) continued to 

spur quarterly increases in total securities. Growth in held-to-maturity securities from 

first quarter 2021 (up $273.6 billion, or 16.8 percent) outpaced that of available-for-sale 

(AFS) securities (down $27.3 billion, or 0.7 percent).

Quarterly Loan Balances 

Grew for the First Time 

Since Second Quarter 

2020

Loan and lease balances increased $33.2 billion (0.3 percent) from the previous quarter, the 

first quarterly increase in loan balances since second quarter 2020. An increase in credit 

card loan balances (up $30.9 billion, or 4.1 percent) and an increase in auto loan balances 

(up $18.9 billion, or 3.8 percent) drove this growth. Half (50.3 percent) of all institutions 

reported a quarterly increase in total loans.

Compared with second quarter 2020, loan and lease balances contracted slightly (down 

$133.9 billion, or 1.2 percent), driven by a reduction in C&I loans (down $360.4 billion, or 

13.4 percent). An increase in “all other loans” (up $182.8 billion, or 18.2 percent) mitigated the 

annual contraction in total loan balances.5 Compared with the year-ago quarter, more than 

half (52.8 percent) of all institutions reported a decline in total loans, but more than threequarters (76.4 percent) of all institutions reported an increase in unused commitments to lend.

Source: FDIC.

Percent

Noncurrent Loan Rate and Quarterly Net Charge-O
 Rate

All FDIC-Insured Institutions

0

1

2

3

4

5

6

Quarterly Net Charge-O Rate

Noncurrent Rate

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Chart 5

-8

-4

Quarterly Change in Loan Balances 

All FDIC-Insured Institutions

Source: FDIC.

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

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

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

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

$ Billions Percent

-300

-200

-100

0

100

200

300

400

500

Quarterly Change (Le Axis)

12-Month Growth Rate (Right Axis)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

0

4

8

12

Chart 6

5 “All other loans” includes, but is not limited to, loans to nondepository institutions and loans for purchasing or 

carrying securities.
2021   •   Volume 15  • Number 3

4 FDIC QUARTERLY

Deposits Continued to 

Grow but at a Moderated 

Pace in Second Quarter 

2021

Deposits grew $271.9 billion (1.5 percent) in second quarter, down from the growth rate of 

3.6 percent reported in first quarter 2021. The deposit growth rate in second quarter is near 

the long-run average growth rate of 1.2 percent.6 Deposits above $250,000 continued to 

drive the quarterly increase (up $297.8 billion, or 3.1 percent) and offset a decline in deposits 

below $250,000 (down $53.6 billion, or 0.7 percent). Noninterest-bearing deposit growth 

(up $175 billion, or 3.5 percent) continued to outpace that of interest-bearing deposits (up 

$53.3 billion, or 0.4 percent), with more than half of banks (57.3 percent) reporting higher 

noninterest-bearing deposit balances compared with the previous quarter.

Equity Capital Growth 

Remained Strong

Equity capital rose $55.3 billion (2.5 percent) from first quarter 2021. Retained earnings 

contributed $33.9 billion to equity formation despite a decline in retained earnings from 

first quarter (down $19.1 billion, or 36 percent). Banks distributed 51.9 percent of second 

quarter earnings as dividends, which were up $12.7 billion (53 percent) from a quarter 

ago. Nearly one-third (32 percent) of banks reported higher dividends compared with the 

year-ago quarter. The number of institutions with capital ratios that did not meet Prompt 

Corrective Action requirements for the well-capitalized category increased by three to nine 

from first quarter 2021.7

Three New Banks Opened 

in Second Quarter 2021

The number of FDIC-insured institutions declined from 4,978 in first quarter 2021 to 

4,951.8 During second quarter 2021, three new banks opened, 28 institutions merged with 

other FDIC-insured institutions, two banks ceased operations, and no banks failed. The 

number of banks on the FDIC’s “Problem Bank List” declined by four from first quarter to 

51. Total assets of problem banks declined $8.4 billion (15.4 percent) from first quarter to 

$45.8 billion.

Author:

Erica Jill Tholmer

Senior Financial Analyst

Division of Insurance and Research

Source: FDIC.

Number

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

0

100

200

300

400

500

600

700

800

900

1,000

0

50

100

150

200

250

300

350

400

450

500

Assets ($ Billions)

Number of Problem Banks 

Assets of Problem Banks

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Chart 8

Quarterly Change in Deposits

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

-200

0

200

400

600

800

1,000

1,200

1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Chart 7

6 The long-run average growth rate is based on the period between Q1 1984 and Q4 2012.

7 Prompt Corrective Action categories are assigned based on reported capital ratios only and do not include the effects of 

regulatory downgrades. 

8 The number of insured financial institutions excludes two banks that did not file Call Reports this quarter but continue 

to have active banking charters.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 5

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

2021** 2020** 2020 2019 2018 2017 2016

Return on assets (%) 1.31 0.37 0.72 1.29 1.35 0.97 1.04

Return on equity (%) 13.00 3.49 6.85 11.38 11.98 8.60 9.27

Core capital (leverage) ratio (%) 8.83 8.77 8.81 9.66 9.70 9.63 9.48

Noncurrent assets plus other real estate owned to assets (%) 0.51 0.59 0.61 0.55 0.60 0.73 0.86

Net charge-offs to loans (%) 0.30 0.56 0.50 0.52 0.48 0.50 0.47

Asset growth rate (%) 7.80 15.73 17.36 3.92 3.03 3.79 5.09

Net interest margin (%) 2.53 2.97 2.82 3.36 3.40 3.25 3.13

Net operating income growth (%) 332.42 -72.41 -38.77 -3.14 45.45 -3.27 4.43

Number of institutions reporting 4,951 5,066 5,002 5,177 5,406 5,670 5,913

Commercial banks 4,336 4,430 4,375 4,518 4,715 4,918 5,112

Savings institutions 615 636 627 659 691 752 801

Percentage of unprofitable institutions (%) 3.37 5.45 4.68 3.75 3.44 5.61 4.48

Number of problem institutions 51 52 56 51 60 95 123

Assets of problem institutions (in billions) $46 $48 $56 $46 $48 $14 $28

Number of failed institutions 0 2 4 4 0 8 5

* Excludes insured branches of foreign banks (IBAs).

** Through June 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending June30.

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

(dollar figures in millions)  2nd Quarter

2021

1st Quarter

2021

2nd Quarter

2020

%Change 

20Q2-21Q2

Number of institutions reporting 4,951 4,978 5,066 -2.3

Total employees (full-time equivalent) 2,058,714 2,067,221 2,077,846 -0.9

CONDITION DATA

Total assets $22,789,003 $22,564,251 $21,139,330 7.8

Loans secured by real estate 5,109,191 5,079,254 5,110,704 0.0

1-4 Family residential mortgages 2,180,506 2,178,189 2,216,550 -1.6

Nonfarm nonresidential 1,594,933 1,575,705 1,545,465 3.2

 Construction and development 393,535 388,392 380,893 3.3

Home equity lines 277,871 286,043 324,468 -14.4

Commercial & industrial loans 2,335,889 2,457,771 2,696,301 -13.4

Loans to individuals 1,757,418 1,689,879 1,704,209 3.1

 Credit cards 791,990 761,103 808,171 -2.0

Farm loans 69,767 68,072 78,108 -10.7

Other loans & leases 1,588,895 1,533,095 1,406,504 13.0

Less: Unearned income 2,992 3,077 3,803 -21.3

Total loans & leases 10,858,169 10,824,995 10,992,022 -1.2

Less: Reserve for losses* 195,173 214,262 242,717 -19.6

Net loans and leases 10,662,996 10,610,734 10,749,305 -0.8

Securities** 5,728,192 5,479,335 4,515,796 26.8

Other real estate owned 4,149 4,433 5,021 -17.4

Goodwill and other intangibles 393,757 392,017 386,432 1.9

All other assets 5,999,909 6,077,732 5,482,778 9.4

Total liabilities and capital 22,789,003 22,564,251 21,139,330 7.8

Deposits 18,730,697 18,458,784 16,962,234 10.4

 Domestic office deposits 17,163,933 16,935,687 15,519,843 10.6

Foreign office deposits 1,566,764 1,523,096 1,442,391 8.6

Other borrowed funds 1,018,770 1,099,727 1,302,424 -21.8

Subordinated debt 66,798 66,470 69,595 -4.0

All other liabilities 664,514 686,315 655,590 1.4

Total equity capital (includes minority interests) 2,308,224 2,252,956 2,149,488 7.4

 Bank equity capital 2,305,721 2,250,482 2,146,919 7.4

Loans and leases 30-89 days past due 45,543 51,772 55,683 -18.2

Noncurrent loans and leases 109,662 122,873 118,254 -7.3

Restructured loans and leases 47,190 48,969 48,297 -2.3

Mortgage-backed securities 3,386,814 3,264,139 2,651,813 27.7

Earning assets 20,799,357 20,576,418 19,227,935 8.2

FHLB Advances 207,759 231,305 378,493 -45.1

Unused loan commitments 8,917,077 8,730,450 8,366,753 6.6

Trust assets 19,845,670 18,925,459 17,007,732 16.7

Assets securitized and sold 463,194 460,283 550,281 -15.8

Notional amount of derivatives 186,058,286 191,684,231 181,707,660 2.4

INCOME DATA

First Half

 2021

First Half

 2020 %Change

2nd Quarter 

2021

2nd Quarter 

2020

%Change 

20Q2-21Q2

Total interest income $277,110 $319,322 -13.2 $138,538 $150,182 -7.8

Total interest expense 19,361 50,916 -62.0 9,345 18,750 -50.2

Net interest income 257,749 268,406 -4.0 129,193 131,432 -1.7

Provision for credit losses*** -25,187 114,838 N/M -10,782 62,200 N/M

Total noninterest income 152,247 137,612 10.6 75,786 70,767 7.1

Total noninterest expense 249,936 250,889 -0.4 126,051 122,341 3.0

Securities gains (losses) 2,128 4,261 -50.1 733 2,505 -70.7

Applicable income taxes 40,634 7,368 451.5 20,048 1,570 1,176.7

Extraordinary gains, net**** 26 -105 N/M 26 -79 N/M

Total net income (includes minority interests) 146,768 37,079 295.8 70,422 18,513 280.4

 Bank net income 146,655 36,992 296.5 70,376 18,469 281.0

Net charge-offs 16,415 30,173 -45.6 7,295 15,573 -53.2

Cash dividends 60,291 46,554 29.5 36,506 14,029 160.2

Retained earnings 86,364 -9,562 N/M 33,869 4,440 662.8

Net operating income 145,027 33,538 332.4 69,814 16,443 324.6

* For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.

** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.

*** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, 

this item represents the provision for loan and lease losses.

**** See Notes to Users for explanation. N/M - Not Meaningful
2021   •   Volume 15  • Number 3

6 FDIC QUARTERLY

TABLE III-A. Second Quarter 2021, All FDIC-Insured Institutions

Asset Concentration Groups*

SECOND QUARTER

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting 4,951 11 5 1,130 2,586 280 32 312 509 86

Commercial banks 4,336 10 5 1,119 2,337 77 20 283 414 71

Savings institutions 615 1 0 11 249 203 12 29 95 15

Total assets (in billions) $22,789.0 $477.8 $5,762.7 $289.1 $7,185.0 $684.9 $152.7 $64.5 $119.4 $8,052.9

Commercial banks 21,359.1 395.9 5,762.7 282.9 6,724.7 118.0 146.0 59.5 95.7 7,773.8

Savings institutions 1,429.9 81.9 0.0 6.2 460.4 566.9 6.7 5.0 23.8 279.1

Total deposits (in billions) 18,730.7 339.6 4,486.3 245.8 6,016.6 601.9 130.2 53.7 102.7 6,753.8

Commercial banks 17,538.2 278.0 4,486.3 242.3 5,654.2 101.4 124.4 50.3 83.1 6,518.1

Savings institutions 1,192.5 61.5 0.0 3.4 362.4 500.6 5.8 3.4 19.7 235.7

Bank net income (in millions) 70,376 6,995 15,788 1,025 22,669 1,393 542 281 324 21,358

Commercial banks 66,089 5,739 15,788 978 21,226 343 525 102 287 21,103

Savings institutions 4,287 1,256 0 47 1,444 1,050 18 180 37 256

Performance Ratios (annualized, %)

Yield on earning assets 2.68 10.40 1.93 3.86 3.14 1.83 3.34 2.59 3.41 2.32

Cost of funding earning assets 0.18 0.98 0.11 0.39 0.22 0.15 0.48 0.25 0.32 0.13

Net interest margin 2.50 9.41 1.82 3.46 2.92 1.69 2.86 2.35 3.09 2.19

Noninterest income to assets 1.34 5.68 1.62 0.69 0.99 0.86 0.27 3.30 1.20 1.26

Noninterest expense to assets 2.23 8.00 2.03 2.27 2.20 1.47 0.97 3.31 2.82 2.11

Credit loss provision to assets** -0.19 -0.92 -0.22 0.06 -0.12 -0.01 0.18 0.04 0.05 -0.22

Net operating income to assets 1.23 5.75 1.10 1.41 1.25 0.80 1.43 1.72 1.09 1.06

Pretax return on assets 1.60 7.55 1.43 1.62 1.61 1.08 1.91 2.20 1.24 1.38

Return on assets 1.24 5.76 1.10 1.43 1.27 0.82 1.43 1.77 1.09 1.07

Return on equity 12.37 42.93 12.31 12.99 11.68 9.41 16.24 12.69 9.77 10.75

Net charge-offs to loans and leases 0.27 2.37 0.40 0.06 0.12 0.01 0.22 0.11 0.03 0.21

Loan and lease loss provision to 

net charge-offs -154.12 -50.59 -206.49 167.99 -158.39 -466.09 37.25 129.07 267.86 -236.92

Efficiency ratio 61.01 54.34 62.38 57.22 59.42 58.63 31.78 59.88 68.54 64.18

% of unprofitable institutions 4.16 0.00 0.00 3.36 2.55 9.64 3.13 13.46 5.70 3.49

% of institutions with earnings gains 66.39 100.00 80.00 61.68 73.90 51.79 75.00 44.55 58.55 67.44

Structural Changes

New reporters 3 0 0 0 1 0 0 2 0 0

Institutions absorbed by mergers 28 0 0 5 22 0 0 0 1 0

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

PRIOR SECOND QUARTERS

(The way it was...)

Return on assets (%) 2020 0.36 0.11 0.28 1.41 0.50 1.16 0.51 3.00 1.29 0.14

 2018 1.37 2.73 1.23 1.34 1.28 1.07 1.20 3.75 1.14 1.45

 2016 1.06 2.27 0.96 1.23 1.06 0.94 0.96 2.51 0.94 1.01

Net charge-offs to loans & leases (%) 2020 0.57 4.26 0.79 0.19 0.28 0.02 0.34 0.36 0.07 0.50

 2018 0.48 4.02 0.50 0.19 0.16 0.01 1.14 0.05 0.09 0.36

 2016 0.45 3.28 0.55 0.16 0.22 0.06 0.64 0.27 0.16 0.40

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

** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator 

represents the provision for loan and lease losses.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 7

TABLE III-A. Second Quarter 2021, All FDIC-Insured Institutions 

Asset Size Distribution Geographic Regions*

SECOND QUARTER

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion to 

$10 Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion New York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting 4,951 871 3,103 817 147 13 586 565 1,059 1,276 1,095 370

Commercial banks 4,336 761 2,754 678 131 12 306 514 915 1,236 1,027 338

Savings institutions 615 110 349 139 16 1 280 51 144 40 68 32

Total assets (in billions) $22,789.0 $53.0 $1,117.8 $2,151.8 $6,742.7 $12,723.8 $4,216.6 $4,652.2 $5,473.4 $4,174.8 $1,887.2 $2,384.7

Commercial banks 21,359.1 46.7 980.7 1,794.2 6,171.9 12,365.7 3,783.0 4,512.2 5,380.0 4,134.4 1,310.3 2,239.1

Savings institutions 1,429.9 6.3 137.1 357.6 570.9 358.1 433.6 140.0 93.4 40.4 576.9 145.6

Total deposits (in billions) 18,730.7 44.4 953.4 1,800.4 5,603.7 10,328.8 3,495.1 3,892.6 4,289.5 3,422.2 1,621.6 2,009.7

Commercial banks 17,538.2 39.6 841.4 1,507.7 5,148.1 10,001.4 3,148.8 3,775.8 4,220.5 3,389.4 1,110.4 1,893.4

Savings institutions 1,192.5 4.9 112.0 292.7 455.6 327.4 346.3 116.9 69.0 32.8 511.2 116.3

Bank net income (in millions) 70,376 143 3,656 7,307 24,857 34,412 11,877 13,706 16,791 12,056 5,501 10,444

Commercial banks 66,089 131 3,146 6,354 22,618 33,839 10,735 13,569 16,257 11,961 4,573 8,994

Savings institutions 4,287 13 509 952 2,239 573 1,142 137 534 96 928 1,451

Performance Ratios (annualized, %)

Yield on earning assets 2.68 3.75 3.74 3.61 3.26 2.11 2.63 2.67 2.25 2.67 2.91 3.59

Cost of funding earning assets 0.18 0.39 0.36 0.30 0.25 0.10 0.21 0.15 0.13 0.18 0.19 0.30

Net interest margin 2.50 3.36 3.38 3.31 3.00 2.00 2.42 2.52 2.12 2.49 2.72 3.30

Noninterest income to assets 1.34 1.59 1.32 1.17 1.29 1.39 1.19 1.15 1.67 1.22 0.92 1.72

Noninterest expense to assets 2.23 3.39 2.89 2.60 2.34 2.04 2.05 2.21 2.21 2.18 2.15 2.74

Credit loss provision to assets** -0.19 0.07 0.07 -0.01 -0.18 -0.25 -0.11 -0.27 -0.21 -0.20 -0.10 -0.19

Net operating income to assets 1.23 1.09 1.30 1.34 1.47 1.08 1.13 1.17 1.23 1.15 1.15 1.75

Pretax return on assets 1.60 1.24 1.55 1.72 1.93 1.40 1.46 1.51 1.60 1.50 1.44 2.30

Return on assets 1.24 1.09 1.32 1.37 1.49 1.09 1.14 1.18 1.23 1.16 1.17 1.77

Return on equity 12.37 8.17 12.14 12.62 13.95 11.44 11.01 11.18 13.06 11.82 11.74 17.18

Net charge-offs to loans and leases 0.27 0.07 0.06 0.14 0.35 0.27 0.25 0.32 0.20 0.34 0.08 0.36

Loan and lease loss provision to 

net charge-offs -154.12 187.45 207.42 -13.37 -90.85 -252.89 -86.48 -169.89 -291.56 -135.53 -241.15 -88.13

Efficiency ratio 61.01 71.94 64.23 60.38 56.94 63.42 59.99 63.74 61.12 62.34 61.56 56.29

% of unprofitable institutions 4.16 13.55 2.45 1.22 1.36 0.00 4.44 6.73 3.97 3.37 3.65 4.59

% of institutions with earnings gains 66.39 53.04 65.61 78.58 92.52 84.62 73.21 72.04 62.98 61.13 67.21 72.43

Structural Changes

New reporters 3 3 0 0 0 0 0 2 1 0 0 0

Institutions absorbed by mergers 28 6 19 2 1 0 2 2 7 7 10 0

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

PRIOR SECOND QUARTERS

(The way it was...)

Return on assets (%) 2020 0.36 0.98 1.29 1.09 0.38 0.14 0.13 0.32 0.51 -0.09 0.86 0.96

 2018 1.37 1.08 1.27 1.29 1.47 1.34 1.20 1.50 1.30 1.27 1.42 1.76

 2016 1.06 0.92 1.10 1.06 1.13 1.02 0.90 0.96 1.01 1.13 1.10 1.54

Net charge-offs to loans & leases (%) 2020 0.57 0.17 0.13 0.23 0.74 0.60 0.54 0.61 0.45 0.63 0.45 0.73

 2018 0.48 0.11 0.11 0.27 0.69 0.43 0.60 0.54 0.25 0.49 0.21 0.70

 2016 0.45 0.19 0.12 0.21 0.62 0.46 0.46 0.53 0.27 0.52 0.31 0.54

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

** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator 

represents the provision for loan and lease losses.
2021   •   Volume 15  • Number 3

8 FDIC QUARTERLY

TABLE IV-A. First Half 2021, All FDIC-Insured Institutions

Asset Concentration Groups*

FIRST HALF

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting 4,951 11 5 1,130 2,586 280 32 312 509 86

Commercial banks 4,336 10 5 1,119 2,337 77 20 283 414 71

Savings institutions 615 1 0 11 249 203 12 29 95 15

Total assets (in billions) $22,789.0 $477.8 $5,762.7 $289.1 $7,185.0 $684.9 $152.7 $64.5 $119.4 $8,052.9

Commercial banks 21,359.1 395.9 5,762.7 282.9 6,724.7 118.0 146.0 59.5 95.7 7,773.8

Savings institutions 1,429.9 81.9 0.0 6.2 460.4 566.9 6.7 5.0 23.8 279.1

Total deposits (in billions) 18,730.7 339.6 4,486.3 245.8 6,016.6 601.9 130.2 53.7 102.7 6,753.8

Commercial banks 17,538.2 278.0 4,486.3 242.3 5,654.2 101.4 124.4 50.3 83.1 6,518.1

Savings institutions 1,192.5 61.5 0.0 3.4 362.4 500.6 5.8 3.4 19.7 235.7

Bank net income (in millions) 146,655 14,072 35,175 2,036 45,895 2,942 1,563 562 647 43,765

Commercial banks 138,385 11,969 35,175 1,943 43,078 721 1,530 224 568 43,177

Savings institutions 8,270 2,103 0 92 2,816 2,221 33 338 78 588

Performance Ratios (%)

Yield on earning assets 2.72 10.58 1.97 3.85 3.17 1.84 3.34 2.65 3.44 2.35

Cost of funding earning assets 0.19 1.02 0.11 0.42 0.23 0.16 0.51 0.26 0.34 0.14

Net interest margin 2.53 9.55 1.85 3.43 2.94 1.68 2.83 2.39 3.10 2.21

Noninterest income to assets 1.36 5.17 1.69 0.70 1.01 0.95 0.81 3.24 1.27 1.26

Noninterest expense to assets 2.23 7.54 2.07 2.26 2.20 1.49 0.96 3.30 2.89 2.12

Credit loss provision to assets** -0.23 -0.83 -0.34 0.06 -0.12 -0.02 -0.18 0.05 0.05 -0.23

Net operating income to assets 1.30 5.76 1.23 1.42 1.29 0.85 2.08 1.71 1.09 1.09

Pretax return on assets 1.67 7.54 1.61 1.64 1.65 1.14 2.80 2.22 1.27 1.40

Return on assets 1.31 5.77 1.24 1.44 1.31 0.88 2.09 1.80 1.11 1.11

Return on equity 13.00 43.86 13.87 12.95 11.92 10.16 23.38 12.62 9.79 11.09

Net charge-offs to loans and leases 0.30 2.49 0.47 0.04 0.12 0.02 0.25 0.08 0.03 0.25

Loan and lease loss provision to 

net charge-offs -149.45 -42.67 -227.67 237.29 -143.40 -359.49 -67.19 235.43 307.17 -198.63

Efficiency ratio 60.46 52.55 61.63 57.21 58.83 57.60 26.92 59.95 68.97 64.24

% of unprofitable institutions 3.37 0.00 0.00 2.30 2.17 8.57 3.13 11.54 4.32 2.33

% of institutions with earnings gains 75.44 100.00 60.00 70.88 84.92 61.43 84.38 42.31 63.85 79.07

Condition Ratios (%)

Earning assets to total assets 91.27 94.85 88.67 93.94 91.96 97.50 97.61 93.86 93.94 91.49

Loss allowance to:

Loans and leases 1.80 8.14 2.07 1.47 1.38 0.73 1.39 1.59 1.29 1.61

Noncurrent loans and leases 177.98 1,001.19 224.71 166.18 138.82 94.10 526.21 176.99 162.73 140.69

Noncurrent assets plus

other real estate owned to assets 0.51 0.65 0.31 0.58 0.66 0.22 0.20 0.29 0.49 0.53

Equity capital ratio 10.12 13.59 9.01 11.09 10.97 9.08 8.90 13.96 11.22 9.97

Core capital (leverage) ratio 8.83 14.25 7.93 10.48 9.43 8.69 9.30 13.22 10.90 8.48

Common equity tier 1 capital ratio*** 14.21 17.60 15.21 15.08 12.92 24.68 20.39 31.36 18.26 13.90

Tier 1 risk-based capital ratio*** 14.30 17.76 15.28 15.08 12.99 24.68 20.49 31.36 18.27 14.02

Total risk-based capital ratio*** 15.72 19.55 16.70 16.21 14.34 25.11 20.95 32.28 19.35 15.57

Net loans and leases to deposits 56.93 103.42 39.34 68.74 74.36 30.94 87.25 32.36 61.07 52.18

Net loans to total assets 46.79 73.50 30.62 58.44 62.26 27.19 74.39 26.94 52.54 43.77

Domestic deposits to total assets 75.32 68.80 54.33 85.02 83.54 87.72 85.26 83.26 86.01 81.57

Structural Changes

New reporters 6 0 0 0 2 0 0 4 0 0

Institutions absorbed by mergers 53 0 0 12 36 1 0 1 2 1

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

PRIOR FIRST HALVES

(The way it was...)

Number of institutions 2020 5,066 11 5 1,198 2,790 296 39 217 442 68

 2018 5,542 12 5 1,383 2,894 406 71 246 474 51

 2016 6,058 13 4 1,466 3,029 491 63 324 605 63

Total assets (in billions) 2020 $21,139.3 $504.9 $5,241.4 $280.1 $7,467.5 $610.4 $129.4 $38.1 $86.0 $6,781.6

 2018 17,532.9 626.4 4,222.2 283.8 6,167.6 356.4 216.8 39.7 80.4 5,539.6

 2016 16,534.0 502.0 3,966.6 270.7 5,986.3 396.2 200.9 56.4 104.1 5,050.8

Return on assets (%) 2020 0.37 0.11 0.36 1.34 0.35 1.06 1.29 2.98 1.10 0.28

 2018 1.33 2.71 1.22 1.32 1.24 1.08 1.31 3.63 1.07 1.35

 2016 1.02 2.31 0.90 1.22 1.01 0.95 1.00 2.50 0.93 0.97

Net charge-offs to loans & leases (%) 2020 0.56 4.30 0.77 0.14 0.26 0.02 0.41 0.34 0.07 0.49

 2018 0.49 4.02 0.53 0.13 0.17 0.02 0.97 0.11 0.13 0.37

 2016 0.45 3.27 0.57 0.13 0.22 0.06 0.65 0.17 0.15 0.40

Noncurrent assets plus 

OREO to assets (%) 2020 0.59 1.10 0.37 0.88 0.66 0.24 0.38 0.37 0.64 0.68

 2018 0.65 1.05 0.43 0.88 0.65 1.61 0.47 0.44 0.76 0.71

 2016 0.91 0.87 0.66 0.78 0.93 1.80 0.86 0.61 1.02 1.04

Equity capital ratio (%) 2020 10.16 11.48 8.99 11.46 11.15 8.61 9.58 16.40 12.36 9.90

 2018 11.30 15.29 10.02 11.31 11.91 11.23 10.35 16.62 11.86 11.12

 2016 11.27 14.81 9.95 11.58 11.88 11.59 10.24 15.48 11.98 11.18

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

** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator 

represents the provision for loan and lease losses.

*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 9

TABLE IV-A. First Half 2021, All FDIC-Insured Institutions 

Asset Size Distribution Geographic Regions*

FIRST HALF

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion to 

$10 Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion New York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting 4,951 871 3,103 817 147 13 586 565 1,059 1,276 1,095 370

Commercial banks 4,336 761 2,754 678 131 12 306 514 915 1,236 1,027 338

Savings institutions 615 110 349 139 16 1 280 51 144 40 68 32

Total assets (in billions) $22,789.0 $53.0 $1,117.8 $2,151.8 $6,742.7 $12,723.8 $4,216.6 $4,652.2 $5,473.4 $4,174.8 $1,887.2 $2,384.7

Commercial banks 21,359.1 46.7 980.7 1,794.2 6,171.9 12,365.7 3,783.0 4,512.2 5,380.0 4,134.4 1,310.3 2,239.1

Savings institutions 1,429.9 6.3 137.1 357.6 570.9 358.1 433.6 140.0 93.4 40.4 576.9 145.6

Total deposits (in billions) 18,730.7 44.4 953.4 1,800.4 5,603.7 10,328.8 3,495.1 3,892.6 4,289.5 3,422.2 1,621.6 2,009.7

Commercial banks 17,538.2 39.6 841.4 1,507.7 5,148.1 10,001.4 3,148.8 3,775.8 4,220.5 3,389.4 1,110.4 1,893.4

Savings institutions 1,192.5 4.9 112.0 292.7 455.6 327.4 346.3 116.9 69.0 32.8 511.2 116.3

Bank net income (in millions) 146,655 283 7,320 15,237 50,619 73,197 23,948 28,670 35,914 25,936 10,991 21,196

Commercial banks 138,385 257 6,290 13,243 46,556 72,039 21,723 28,279 34,821 25,716 9,144 18,701

Savings institutions 8,270 26 1,030 1,993 4,063 1,158 2,224 391 1,093 220 1,847 2,495

Performance Ratios (%)

Yield on earning assets 2.72 3.76 3.77 3.67 3.30 2.14 2.67 2.70 2.28 2.70 2.94 3.65

Cost of funding earning assets 0.19 0.41 0.39 0.32 0.26 0.11 0.23 0.16 0.12 0.19 0.20 0.32

Net interest margin 2.53 3.35 3.38 3.34 3.04 2.03 2.44 2.54 2.16 2.52 2.74 3.33

Noninterest income to assets 1.36 1.61 1.36 1.25 1.29 1.41 1.20 1.17 1.72 1.25 0.97 1.72

Noninterest expense to assets 2.23 3.43 2.91 2.59 2.33 2.06 2.08 2.18 2.24 2.21 2.18 2.68

Credit loss provision to assets** -0.23 0.06 0.08 0.01 -0.20 -0.30 -0.13 -0.28 -0.31 -0.25 -0.07 -0.17

Net operating income to assets 1.30 1.08 1.32 1.42 1.52 1.16 1.15 1.24 1.34 1.23 1.17 1.79

Pretax return on assets 1.67 1.23 1.58 1.82 1.99 1.49 1.49 1.58 1.74 1.58 1.45 2.38

Return on assets 1.31 1.09 1.34 1.45 1.54 1.17 1.17 1.25 1.34 1.25 1.19 1.82

Return on equity 13.00 8.07 12.23 13.30 14.35 12.26 11.19 11.75 14.11 12.79 11.87 17.66

Net charge-offs to loans and leases 0.30 0.06 0.05 0.14 0.37 0.33 0.30 0.34 0.24 0.38 0.11 0.39

Loan and lease loss provision to 

net charge-offs -149.45 171.24 276.36 16.67 -85.58 -238.65 -84.85 -165.02 -319.69 -125.94 -132.45 -66.16

Efficiency ratio 60.46 72.73 63.99 58.62 56.34 63.12 60.25 62.30 60.88 62.16 61.06 54.86

% of unprofitable institutions 3.37 11.25 2.03 0.49 1.36 0.00 4.10 6.73 3.40 1.96 2.83 3.51

% of institutions with earnings gains 75.44 59.59 75.09 90.58 92.52 76.92 83.45 75.93 73.28 74.45 71.96 81.89

Condition Ratios (%)

Earning assets to total assets 91.27 92.56 93.94 93.53 92.59 89.94 90.94 90.98 90.29 90.50 93.77 94.05

Loss allowance to:

Loans and leases 1.80 1.46 1.36 1.42 1.94 1.85 1.70 1.85 1.66 2.01 1.34 2.07

Noncurrent loans and leases 177.98 135.56 194.67 190.22 170.48 180.92 171.41 189.20 179.34 184.72 74.64 330.35

Noncurrent assets plus

other real estate owned to assets 0.51 0.66 0.50 0.55 0.68 0.40 0.50 0.48 0.43 0.52 0.89 0.41

Equity capital ratio 10.12 13.42 10.93 10.94 10.72 9.57 10.35 10.61 9.59 9.82 10.22 10.39

Core capital (leverage) ratio 8.83 13.04 10.61 10.20 9.50 8.07 9.05 8.50 8.38 8.90 8.93 9.86

Common equity tier 1 capital ratio*** 14.21 23.54 16.12 14.62 14.06 14.09 14.19 13.75 14.44 13.68 15.18 14.88

Tier 1 risk-based capital ratio*** 14.30 23.54 16.15 14.64 14.27 14.12 14.26 13.85 14.50 13.77 15.28 15.07

Total risk-based capital ratio*** 15.72 24.59 17.28 15.76 15.59 15.68 15.64 15.11 15.85 15.71 16.40 16.30

Net loans and leases to deposits 56.93 60.83 70.41 75.84 69.30 45.66 57.94 55.06 53.93 55.02 54.29 70.55

Net loans to total assets 46.79 51.05 60.06 63.45 57.59 37.06 48.03 46.07 42.27 45.10 46.65 59.46

Domestic deposits to total assets 75.32 83.91 85.29 83.57 81.13 69.93 77.55 81.04 69.11 65.65 85.89 83.02

Structural Changes

New reporters 6 6 0 0 0 0 0 2 2 0 1 1

Institutions absorbed by mergers 53 14 34 4 1 0 7 5 10 15 14 2

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

PRIOR FIRST HALVES

(The way it was...)

Number of institutions 2020 5,066 1,010 3,153 755 135 13 607 576 1,085 1,306 1,121 371

 2018 5,542 1,372 3,399 637 125 9 675 645 1,195 1,412 1,205 410

 2016 6,058 1,637 3,690 619 102 10 739 743 1,305 1,519 1,292 460

Total assets (in billions) 2020 $21,139.3 $60.6 $1,096.0 $2,024.4 $6,097.9 $11,860.4 $3,870.1 $4,363.0 $4,957.6 $4,123.9 $1,684.2 $2,140.6

 2018 17,532.9 81.8 1,112.2 1,706.7 5,951.5 8,680.7 3,276.4 3,614.2 3,957.2 3,626.7 1,114.0 1,944.4

 2016 16,534.0 96.7 1,173.6 1,724.1 4,897.6 8,642.0 3,127.7 3,467.9 3,692.0 3,604.1 976.1 1,666.2

Return on assets (%) 2020 0.37 0.93 1.18 0.94 0.12 0.33 0.34 0.18 0.50 0.20 0.82 0.51

 2018 1.33 1.02 1.23 1.28 1.42 1.29 1.17 1.41 1.29 1.22 1.38 1.70

 2016 1.02 0.92 1.07 1.05 1.08 0.97 0.85 0.92 0.97 1.08 1.07 1.44

Net charge-offs to loans & leases (%) 2020 0.56 0.15 0.12 0.22 0.75 0.57 0.52 0.62 0.44 0.58 0.38 0.77

 2018 0.49 0.15 0.10 0.22 0.71 0.44 0.61 0.55 0.25 0.51 0.21 0.72

 2016 0.45 0.15 0.11 0.20 0.62 0.47 0.47 0.53 0.27 0.53 0.31 0.53

Noncurrent assets plus 

OREO to assets (%) 2020 0.59 0.91 0.69 0.66 0.74 0.50 0.56 0.52 0.52 0.74 0.79 0.55

 2018 0.65 0.99 0.80 0.69 0.63 0.63 0.61 0.72 0.60 0.74 0.76 0.46

 2016 0.91 1.17 1.05 0.89 0.83 0.94 0.73 1.08 0.85 1.10 1.05 0.55

Equity capital ratio (%) 2020 10.16 13.59 11.19 10.82 10.88 9.56 10.61 10.64 9.62 9.57 10.41 10.49

 2018 11.30 13.35 11.32 11.74 12.14 10.61 12.49 12.08 10.49 10.26 11.55 11.26

 2016 11.27 12.97 11.47 11.78 12.21 10.60 12.01 12.37 10.31 10.15 11.21 12.22

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

** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator 

represents the provision for loan and lease losses.

*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.
2021   •   Volume 15  • Number 3

10 FDIC QUARTERLY

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

Asset Concentration Groups*

June 30, 2021 All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Percent of Loans 30-89 Days Past Due

All loans secured by real estate 0.42 0.25 0.35 0.40 0.30 0.27 0.11 0.62 0.57 0.70

Construction and development 0.28 0.00 0.08 0.63 0.30 0.68 0.14 0.86 0.42 0.18

Nonfarm nonresidential 0.20 0.00 0.33 0.25 0.18 0.24 0.09 0.42 0.47 0.20

Multifamily residential real estate 0.17 0.00 0.05 0.13 0.20 0.16 0.00 0.26 0.15 0.19

Home equity loans 0.36 0.00 0.44 0.37 0.29 0.23 0.18 0.46 0.43 0.45

Other 1-4 family residential 0.68 0.26 0.45 0.57 0.51 0.27 0.12 0.81 0.68 1.01

Commercial and industrial loans 0.24 0.30 0.51 0.55 0.18 0.16 0.02 0.45 0.46 0.20

Loans to individuals 0.82 0.85 0.63 0.68 0.60 0.19 0.68 0.91 0.78 1.03

Credit card loans 0.73 0.85 0.58 0.63 0.97 0.76 0.55 1.95 0.57 0.70

Other loans to individuals 0.91 0.79 0.78 0.69 0.58 0.17 0.68 0.86 0.78 1.17

All other loans and leases (including farm) 0.24 0.17 0.33 0.50 0.24 0.03 0.01 0.75 0.51 0.16

Total loans and leases 0.42 0.79 0.43 0.45 0.28 0.25 0.47 0.63 0.57 0.55

Percent of Loans Noncurrent**

All real estate loans 1.45 0.71 1.64 0.89 1.21 0.85 0.26 1.05 0.83 2.00

Construction and development 0.60 2.36 2.10 0.57 0.42 1.17 0.41 0.87 0.37 0.91

Nonfarm nonresidential 0.89 0.00 1.08 0.79 0.82 0.62 0.59 1.05 1.01 1.13

Multifamily residential real estate 0.28 0.00 0.31 0.35 0.25 0.78 0.33 0.17 0.44 0.34

Home equity loans 2.13 0.00 5.62 0.25 1.29 0.58 0.45 0.29 0.52 2.57

Other 1-4 family residential 2.22 0.69 1.92 0.64 2.42 0.88 0.23 1.02 0.81 2.50

Commercial and industrial loans 0.82 0.26 1.06 0.91 0.77 0.62 0.21 0.55 0.78 0.81

Loans to individuals 0.63 0.88 0.58 0.36 0.42 0.09 0.29 0.42 0.39 0.67

Credit card loans 0.81 0.92 0.70 0.26 0.97 0.51 0.43 0.71 0.25 0.79

Other loans to individuals 0.48 0.30 0.27 0.38 0.39 0.07 0.29 0.40 0.39 0.62

All other loans and leases (including farm) 0.32 0.00 0.29 0.94 0.41 0.31 0.04 0.58 0.96 0.26

Total loans and leases 1.01 0.81 0.92 0.89 0.99 0.78 0.26 0.90 0.79 1.15

Percent of Loans Charged-Off (net, YTD)

All real estate loans 0.01 0.04 -0.06 0.02 0.03 0.00 0.00 -0.03 0.01 -0.01

Construction and development 0.02 0.62 0.00 0.02 0.02 -0.02 0.00 -0.12 0.00 0.01

Nonfarm nonresidential 0.06 0.00 0.04 0.04 0.08 0.01 0.05 -0.07 0.01 0.03

Multifamily residential real estate 0.02 0.00 0.00 0.07 0.02 0.26 -0.01 0.00 0.00 0.02

Home equity loans -0.17 0.00 -0.54 0.00 -0.06 -0.05 0.00 0.00 -0.02 -0.22

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

Commercial and industrial loans 0.24 0.94 0.34 0.07 0.24 0.01 0.33 -0.18 0.10 0.16

Loans to individuals 1.46 2.68 2.03 0.21 0.59 0.32 0.33 0.79 0.14 1.05

Credit card loans 2.73 2.76 2.66 0.76 3.29 2.35 1.25 0.39 1.32 2.73

Other loans to individuals 0.39 1.41 0.31 0.14 0.41 0.25 0.33 0.81 0.13 0.36

All other loans and leases (including farm) 0.10 0.00 0.06 0.04 0.11 0.04 0.00 1.24 0.04 0.12

Total loans and leases 0.30 2.49 0.47 0.04 0.12 0.02 0.25 0.08 0.03 0.25

Loans Outstanding (in billions)

All real estate loans $5,109.2 $2.1 $564.0 $105.3 $2,760.9 $161.3 $25.8 $12.6 $49.1 $1,428.0

Construction and development 393.5 0.0 17.8 6.4 285.6 4.8 0.2 1.1 3.5 74.0

Nonfarm nonresidential 1,594.9 0.0 59.9 27.9 1,158.1 13.4 1.5 4.1 11.0 319.1

Multifamily residential real estate 490.5 0.0 83.6 3.7 321.4 3.8 0.4 0.4 1.5 75.8

Home equity loans 277.9 0.0 27.6 1.6 145.1 7.1 0.2 0.3 1.6 94.4

Other 1-4 family residential 2,180.5 2.0 320.0 24.1 800.9 131.5 23.5 5.7 27.9 844.9

Commercial and industrial loans 2,335.9 37.8 351.0 25.0 1,134.3 8.5 8.8 2.7 6.7 761.0

Loans to individuals 1,757.4 341.9 360.8 5.9 278.1 11.4 75.7 1.5 5.2 677.0

Credit card loans 792.0 320.4 261.3 0.7 17.3 0.3 0.4 0.1 0.0 191.5

Other loans to individuals 965.4 21.5 99.5 5.3 260.8 11.1 75.3 1.4 5.1 485.5

All other loans and leases (including farm) 1,658.7 0.6 526.3 35.3 365.4 6.5 4.9 0.9 2.6 716.1

Total loans and leases (plus unearned income) 10,861.2 382.3 1,802.1 171.5 4,538.8 187.7 115.2 17.7 63.6 3,582.3

Memo: Other Real Estate Owned (in millions)

All other real estate owned 4,149.2 7.3 251.2 162.3 2,574.5 48.6 2.9 28.2 81.0 993.4

Construction and development 801.4 0.2 1.0 23.6 679.4 10.8 1.7 10.1 19.7 55.0

Nonfarm nonresidential 2,302.2 7.0 88.0 61.6 1,450.2 13.3 0.2 11.8 32.1 638.0

Multifamily residential real estate 61.3 0.0 1.0 1.3 56.6 0.7 0.0 0.0 1.1 0.6

1-4 family residential 848.4 0.1 126.2 28.2 340.7 23.9 0.9 5.8 24.8 297.9

Farmland 100.3 0.0 0.0 47.7 47.7 0.0 0.0 0.5 3.3 1.2

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

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

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

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

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

25 percent of total assets.

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

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

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

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

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

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

FDIC QUARTERLY 11

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

Asset Size Distribution Geographic Regions*

June 30, 2021 All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to 

$10 Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion New York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate 0.42 0.81 0.34 0.23 0.33 0.64 0.33 0.43 0.40 0.72 0.40 0.22

Construction and development 0.28 0.66 0.41 0.31 0.29 0.16 0.45 0.27 0.20 0.19 0.24 0.32

Nonfarm nonresidential 0.20 0.63 0.23 0.17 0.20 0.20 0.22 0.18 0.21 0.17 0.18 0.22

Multifamily residential real estate 0.17 0.93 0.17 0.15 0.20 0.12 0.21 0.09 0.07 0.31 0.15 0.20

Home equity loans 0.36 0.32 0.34 0.22 0.31 0.45 0.28 0.42 0.37 0.53 0.33 0.15

Other 1-4 family residential 0.68 1.06 0.47 0.31 0.50 0.95 0.46 0.68 0.61 1.25 0.79 0.21

Commercial and industrial loans 0.24 0.73 0.31 0.24 0.17 0.29 0.13 0.23 0.30 0.32 0.27 0.21

Loans to individuals 0.82 0.98 1.20 0.99 0.72 0.89 0.69 1.21 0.53 0.77 0.61 0.87

Credit card loans 0.73 0.88 1.60 2.08 0.76 0.63 0.81 0.85 0.51 0.68 0.38 0.82

Other loans to individuals 0.91 0.98 1.17 0.61 0.68 1.13 0.61 1.49 0.55 0.92 0.68 0.91

All other loans and leases (including farm) 0.24 0.43 0.46 0.21 0.20 0.25 0.06 0.17 0.31 0.32 0.22 0.28

Total loans and leases 0.42 0.76 0.38 0.27 0.36 0.52 0.31 0.49 0.38 0.56 0.37 0.38

Percent of Loans Noncurrent** 

All real estate loans 1.45 1.08 0.72 0.75 1.68 1.81 1.38 1.48 1.48 1.54 2.46 0.56

Construction and development 0.60 0.65 0.59 0.46 0.40 1.14 1.14 0.40 0.98 0.29 0.27 0.38

Nonfarm nonresidential 0.89 1.17 0.73 0.75 0.94 1.08 1.24 0.76 1.00 1.02 0.57 0.65

Multifamily residential real estate 0.28 0.67 0.26 0.26 0.23 0.39 0.31 0.57 0.30 0.18 0.18 0.14

Home equity loans 2.13 0.69 0.66 0.55 1.28 3.43 2.00 1.60 2.61 3.58 1.00 0.91

Other 1-4 family residential 2.22 1.00 0.72 1.01 3.08 2.18 1.90 2.27 1.90 2.05 6.46 0.59

Commercial and industrial loans 0.82 1.20 0.59 0.85 0.78 0.85 0.77 0.78 0.72 1.07 0.79 0.78

Loans to individuals 0.63 0.61 0.47 0.69 0.63 0.63 0.67 0.75 0.36 0.69 0.52 0.69

Credit card loans 0.81 0.57 1.28 1.75 0.87 0.73 0.99 0.88 0.58 0.83 0.86 0.80

Other loans to individuals 0.48 0.61 0.42 0.33 0.43 0.54 0.47 0.65 0.20 0.45 0.42 0.61

All other loans and leases (including farm) 0.32 1.14 0.89 0.35 0.40 0.26 0.16 0.18 0.33 0.44 0.31 0.52

Total loans and leases 1.01 1.08 0.70 0.75 1.14 1.02 0.99 0.98 0.93 1.09 1.80 0.63

Percent of Loans Charged-Off 

(net, YTD) 

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

Construction and development 0.02 0.00 -0.01 -0.01 0.05 0.01 0.09 0.05 0.01 -0.01 0.00 -0.05

Nonfarm nonresidential 0.06 0.01 0.01 0.04 0.11 0.02 0.10 0.06 0.08 0.06 0.03 0.06

Multifamily residential real estate 0.02 0.00 0.00 0.02 0.03 0.01 0.03 0.05 0.00 0.04 -0.01 0.00

Home equity loans -0.17 -0.02 0.00 -0.02 -0.07 -0.30 -0.08 -0.16 -0.20 -0.30 -0.14 -0.08

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

Commercial and industrial loans 0.24 0.17 0.11 0.16 0.30 0.22 0.20 0.25 0.25 0.27 0.22 0.20

Loans to individuals 1.46 0.22 0.54 1.62 1.44 1.49 1.53 1.35 1.18 2.10 0.69 1.42

Credit card loans 2.73 2.76 3.66 5.11 2.64 2.68 3.00 2.71 2.49 2.89 1.76 2.69

Other loans to individuals 0.39 0.19 0.32 0.37 0.42 0.36 0.54 0.26 0.14 0.76 0.34 0.43

All other loans and leases (including farm) 0.10 0.11 0.12 0.09 0.14 0.08 0.08 0.13 0.06 0.07 0.05 0.24

Total loans and leases 0.30 0.06 0.05 0.14 0.37 0.33 0.30 0.34 0.24 0.38 0.11 0.39

Loans Outstanding (in billions) 

All real estate loans $5,109.2 $18.2 $501.5 $964.0 $1,891.7 $1,733.8 $1,069.7 $909.8 $1,031.2 $844.1 $569.1 $685.3

Construction and development 393.5 1.0 47.0 96.3 164.3 85.0 78.5 64.8 65.4 54.7 83.1 47.0

Nonfarm nonresidential 1,594.9 3.8 191.6 418.3 648.9 332.4 363.8 307.2 243.6 204.2 236.5 239.6

Multifamily residential real estate 490.5 0.4 28.7 106.3 218.5 136.5 168.8 44.4 121.4 44.7 27.1 84.1

Home equity loans 277.9 0.3 14.8 34.5 103.3 125.0 62.6 64.8 68.6 39.8 18.0 24.0

Other 1-4 family residential 2,180.5 8.8 170.7 277.3 740.7 982.9 390.9 415.4 507.9 401.0 185.1 280.1

Commercial and industrial loans 2,335.9 4.0 113.1 268.1 857.2 1,093.5 420.1 540.8 529.3 392.0 185.0 268.7

Loans to individuals 1,757.4 1.7 26.8 80.5 756.1 892.4 311.5 412.0 353.4 279.4 66.6 334.5

Credit card loans 792.0 0.0 1.7 20.7 342.6 427.0 122.3 179.4 152.6 177.8 15.9 144.1

Other loans to individuals 965.4 1.7 25.1 59.8 413.5 465.4 189.3 232.7 200.8 101.6 50.6 190.5

All other loans and leases (including farm) 1,658.7 3.6 39.8 73.3 456.8 1,085.2 260.1 321.5 438.8 406.3 72.2 159.8

Total loans and leases 

(plus unearned income) 10,861.2 27.4 681.2 1,385.9 3,961.8 4,804.8 2,061.4 2,184.1 2,352.7 1,921.8 892.9 1,448.2

Memo: Other Real Estate Owned 

(in millions) 

All other real estate owned 4,149.2 54.0 823.6 1,355.2 875.0 1,041.4 522.2 993.1 677.7 534.4 803.8 618.0

Construction and development 801.4 8.9 326.6 236.1 197.8 32.0 89.8 187.4 84.9 128.1 262.2 49.1

Nonfarm nonresidential 2,302.2 19.1 287.6 942.1 391.4 662.0 201.2 607.2 325.7 254.0 404.3 509.9

Multifamily residential real estate 61.3 6.4 30.6 15.1 7.4 1.8 8.0 19.7 8.2 5.7 12.9 6.7

1-4 family residential 848.4 17.1 125.0 124.3 271.4 310.6 223.1 166.5 221.7 98.6 97.1 41.5

Farmland 100.3 2.4 53.9 36.9 7.0 0.0 0.1 12.4 11.6 38.0 27.3 10.9

* Regions:

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

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

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

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

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

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

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.
2021   •   Volume 15  • Number 3

12 FDIC QUARTERLY

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

2nd 

Quarter 

2021

1st 

Quarter 

2021

4th

Quarter 

2020

3rd

Quarter 

2020

2nd 

Quarter 

2020

% 

Change 

20Q2-

2 1Q2

Asset Size Distribution

(dollar figures in millions;

notional amounts unless otherwise indicated)

Less 

Than 

$100 

Million

$100 

Million 

to $1 

Billion

$1 

Billion 

to $10 

Billion

$10 

Billion 

to $250 

Billion

Greater 

Than 

$250 

Billion

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives 1,373 1,388 1,388 1,374 1,381 -0.6 28 662 534 136 13

Total assets of institutions reporting derivatives $21,044,777 $20,832,558 $20,149,449 $19,491,668 $19,425,459 8.3 $1,933 $311,562 $1,562,783 $6,444,725 $12,723,774

Total deposits of institutions reporting derivatives 17,273,924 17,013,783 16,393,959 15,709,088 15,570,184 10.9 1,599 264,276 1,308,436 5,370,840 10,328,773

Total derivatives 186,058,286 191,684,231 165,711,793 181,124,686 181,707,660 2.4 253 21,941 205,856 4,588,195 181,242,041

Derivative Contracts by Underlying Risk Exposure 

Interest rate 133,334,821 137,477,448 116,058,430 129,835,475 132,119,135 0.9 252 21,568 197,956 2,698,316 130,416,728

Foreign exchange* 43,728,636 45,257,498 41,448,704 42,148,550 41,266,839 6.0 0 0 3,507 1,659,012 42,066,117

Equity 4,254,960 4,004,712 3,774,715 4,022,629 3,574,339 19.0 0 21 34 78,161 4,176,744

Commodity & other (excluding credit derivatives) 1,631,946 1,582,254 1,394,504 1,536,154 1,491,420 9.4 0 0 68 98,104 1,533,774

Credit 3,106,414 3,361,030 3,034,285 3,580,623 3,254,590 -4.6 0 25 3,111 54,600 3,048,678

Total 186,056,777 191,682,942 165,710,638 181,123,431 181,706,323 2.4 252 21,614 204,676 4,588,195 181,242,041

Derivative Contracts by Transaction Type 

Swaps 106,971,001 107,719,719 96,423,495 99,580,043 101,734,113 5.1 2 2,347 122,014 2,368,077 104,478,561

Futures & forwards 37,583,984 40,934,399 32,350,455 39,822,587 41,019,662 -8.4 0 4,163 21,481 1,781,514 35,776,825

Purchased options 17,945,500 18,603,556 16,098,917 17,889,179 16,881,937 6.3 0 270 15,145 152,474 17,777,611

Written options 17,894,265 18,371,380 15,891,741 17,706,928 16,682,488 7.3 1 3,894 16,809 154,158 17,719,402

Total 180,394,750 185,629,054 160,764,608 174,998,738 176,318,200 2.3 3 10,674 175,450 4,456,224 175,752,399

Fair Value of Derivative Contracts 

Interest rate contracts 63,859 69,365 70,648 73,198 60,216 6.0 0 20 229 10,737 52,872

Foreign exchange contracts 10,331 13,849 -11,466 -7,256 -19,636 N/M 0 0 3 947 9,382

Equity contracts -13,321 -6,866 -7,165 -700 -1,171 1,037.6 0 6 2 -984 -12,345

Commodity & other (excluding credit derivatives) 6,125 3,967 -452 -1,087 -3,800 N/M 0 0 0 207 5,918

Credit derivatives as guarantor** 16,825 16,748 14,331 3,830 -3,347 N/M 0 0 15 -110 16,920

Credit derivatives as beneficiary** -21,074 -18,373 -18,166 -7,167 553 N/M 0 0 -15 -176 -20,883

Derivative Contracts by Maturity*** 

Interest rate contracts < 1 year 71,258,970 76,501,727 62,457,197 76,385,765 80,160,078 -11.1 1 4,701 26,405 1,274,896 69,952,968

1-5 years 45,947,274 44,407,789 39,201,919 39,963,944 41,098,879 11.8 7 1,996 45,368 812,193 45,087,709

> 5 years 22,279,960 22,231,036 20,844,428 20,500,301 19,986,413 11.5 0 2,973 82,791 469,000 21,725,196

Foreign exchange and gold contracts < 1 year 30,839,509 32,130,016 29,434,113 29,396,427 29,049,567 6.2 0 0 2,672 1,512,885 29,323,952

1-5 years 4,557,853 4,336,231 4,404,492 4,299,182 4,238,687 7.5 0 0 347 100,156 4,457,350

> 5 years 2,502,654 2,405,347 2,402,103 2,299,468 2,179,498 14.8 0 0 10 16,293 2,486,351

Equity contracts < 1 year 3,806,830 3,504,313 3,287,136 3,210,066 2,850,740 33.5 0 7 5 33,646 3,773,172

1-5 years 957,152 870,551 770,821 882,054 825,667 15.9 0 14 4 40,352 916,782

> 5 years 153,371 124,452 138,573 133,921 128,679 19.2 0 0 4 2,586 150,780

Commodity & other contracts (including credit 

derivatives, excluding gold contracts) < 1 year 2,234,059 2,149,899 1,820,961 1,926,264 1,860,285 20.1 0 10 68 37,625 2,196,356

1-5 years 2,137,329 2,050,971 2,023,406 2,249,588 2,163,848 -1.2 0 11 813 39,847 2,096,658

> 5 years 215,834 435,795 215,486 433,136 227,777 -5.2 0 69 1,515 7,330 206,920

Risk-Based Capital: Credit Equivalent Amount 

Total current exposure to tier 1 capital (%) 24.8 25.6 30.2 29.9 31.9 0.4 0.3 1.9 5.4 40.5

Total potential future exposure to tier 1 capital (%) 34.9 34.0 31.0 32.5 29.8 0.0 0.2 1.1 4.9 58.7

Total exposure (credit equivalent amount) 

to tier 1 capital (%) 59.7 59.6 61.2 62.4 61.8 0.4 0.5 3.0 10.3 99.2

Credit losses on derivatives  21.5 6.8 137.3 130.7 124.8 -82.8 0.0 5.1 -0.1 6.0 10.6

HELD FOR TRADING 

Number of institutions reporting derivatives 190 188 187 185 185 2.7 0 21 88 70 11

Total assets of institutions reporting derivatives 16,326,433 16,185,202 15,885,372 15,380,670 15,391,035 6.1 0 10,152 331,938 4,034,178 11,950,165

Total deposits of institutions reporting derivatives 13,321,986 13,124,988 12,847,286 12,338,386 12,272,454 8.6 0 8,669 277,438 3,396,712 9,639,166

Derivative Contracts by Underlying Risk Exposure 

Interest rate 129,126,796 133,860,018 112,807,097 126,595,325 129,050,986 0.1 0 514 43,737 1,409,088 127,673,456

Foreign exchange 40,661,753 42,039,817 39,084,210 39,147,645 38,663,882 5.2 0 0 3,176 1,544,177 39,114,400

Equity 4,225,427 3,976,351 3,746,888 3,997,150 3,549,571 19.0 0 0 3 68,061 4,157,363

Commodity & other 1,594,653 1,544,723 1,358,385 1,501,890 1,458,446 9.3 0 0 19 94,866 1,499,767

Total 175,608,628 181,420,909 156,996,580 171,242,010 172,722,886 1.7 0 514 46,936 3,116,192 172,444,987

Trading Revenues: Cash & Derivative Instruments 

Interest rate**  3,373 -29 3,625 2,826 4,638 -27.3 0 0 5 -20 3,389

Foreign exchange** 1,546 6,343 18 1,942 3,841 -59.8 0 0 6 226 1,314

Equity** 2,384 2,388 2,480 750 3,139 -24.1 0 0 16 -1 2,369

Commodity & other (including credit derivatives)** 767 1,772 191 1,380 2,036 -62.3 0 0 0 87 679

Total trading revenues** 8,070 10,474 6,314 6,898 13,653 -40.9 0 0 27 293 7,750

Share of Revenue 

Trading revenues to gross revenues (%)** 5.9 7.5 4.6 4.9 9.2 0.0 0.0 0.8 0.9 7.7

Trading revenues to net operating revenues (%)** 18.1 21.0 16.8 22.0 302.5 0.0 0.0 2.7 2.8 23.5

HELD FOR PURPOSES OTHER THAN TRADING 

Number of institutions reporting derivatives 609 615 623 620 626 -2.7 2 147 323 124 13

Total assets of institutions reporting derivatives 20,003,432 19,837,879 19,263,989 18,645,439 18,558,616 7.8 111 75,405 1,144,952 6,059,191 12,723,774

Total deposits of institutions reporting derivatives 16,400,333 16,179,892 15,655,539 15,010,871 14,856,297 10.4 92 63,447 954,373 5,053,648 10,328,773

Derivative Contracts by Underlying Risk Exposure 

Interest rate 4,170,881 3,573,201 3,192,677 3,162,582 3,010,232 38.6 3 10,139 128,238 1,289,228 2,743,272

Foreign exchange 548,414 569,053 511,407 534,403 527,340 4.0 0 0 196 37,465 510,753

Equity 29,534 28,361 27,826 25,479 24,768 19.2 0 21 31 10,100 19,381

Commodity & other 37,294 37,531 36,119 34,264 32,974 13.1 0 0 49 3,238 34,006

Total notional amount 4,786,122 4,208,145 3,768,028 3,756,727 3,595,314 33.1 3 10,160 128,514 1,340,032 3,307,413

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

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

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

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

**** Credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and banks filing the FFIEC 041 report form that have $300 million or more in total assets, but is not 

applicaable to banks filing the FFIEC 051 form.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 13

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

Asset Size Distribution

(dollar figures in millions)

2nd 

Quarter 

2021

1st 

Quarter

2021

4th 

Quarter

2020

3rd 

Quarter

2020

2nd 

Quarter

2020

% 

Change 

20Q2-

21Q2

Less 

Than 

$100 

Million

$100 

Million 

to $1 

Billion

$1 

Billion 

to $10 

Billion

$10 

Billion 

to $250 

Billion

Greater 

Than 

$250 

Billion

Assets Securitized and Sold with Servicing Retained or with 

Recourse or Other Seller-Provided Credit Enhancements 

Number of institutions reporting securitization activities 60 59 57 58 61 -1.6 0 6 11 35 8

Outstanding Principal Balance by Asset Type 

1-4 family residential loans $356,054 $358,230 $382,125 $406,116 $449,854 -20.9 $0 $5,469 $13,862 $103,179 $233,545

Home equity loans 7 7 8 8 9 -22.2 0 0 0 7 0

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

Auto loans 316 392 289 579 980 -67.8 0 0 0 316 0

Other consumer loans 1,388 1,469 1,569 1,669 1,512 -8.2 0 0 0 716 672

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

All other loans, leases, and other assets 95,055 91,085 87,334 88,993 90,064 5.5 0 0 7,661 5,596 81,798

Total securitized and sold 377,736 383,561 363,080 390,560 434,330 -13.0 0 0 0 61,721 316,015

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 964 1,057 1,210 1,403 1,522 -36.7 0 0 51 541 372

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

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

Auto loans 26 26 26 38 48 -45.8 0 0 0 26 0

Other consumer loans 0 0 0 0 0 0.0 0 0 0 0 0

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

All other loans, leases, and other assets 2,301 2,274 2,029 2,010 2,205 4.4 0 0 63 116 2,122

Total credit exposure 0 0 0 0 0 0.0 0 0 0 0 0

Total unused liquidity commitments provided to institution’s own securitizations 67 76 71 71 32 109.4 0 0 0 0 67

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

1-4 family residential loans 1.9 2.0 2.7 3.0 5.9 0.0 1.6 0.1 1.2 2.3

Home equity loans 1.9 6.3 5.3 7.2 8.3 0.0 0.0 0.0 1.9 0.0

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

Auto loans 2.0 1.9 4.2 3.1 2.6 0.0 0.0 0.0 2.0 0.0

Other consumer loans 2.4 2.9 3.1 2.3 3.0 0.0 0.0 0.0 1.3 3.5

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

All other loans, leases, and other assets 0.6 0.5 0.6 1.5 4.7 0.0 0.0 0.4 1.2 0.5

Total loans, leases, and other assets 1.7 1.8 2.5 3.1 6.5 0.0 0.0 0.0 0.8 1.8

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

1-4 family residential loans 2.4 2.7 3.0 2.9 4.6 0.0 1.2 0.2 3.6 2.0

Home equity loans 27.3 24.5 28.9 27.8 28.9 0.0 0.0 0.0 27.3 0.0

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

Auto loans 0.2 0.2 0.6 0.8 0.9 0.0 0.0 0.0 0.2 0.0

Other consumer loans 2.2 2.4 2.4 2.2 3.2 0.0 0.0 0.0 1.0 3.6

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

All other loans, leases, and other assets 1.9 1.8 2.4 2.9 0.4 0.0 0.0 1.5 0.3 2.1

Total loans, leases, and other assets 2.1 2.3 2.5 2.8 4.3 0.0 0.0 0.0 2.8 2.0

Securitized Loans, Leases, and Other Assets Charged-off 

(net, YTD, annualized, %) 

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

Home equity loans 1.7 1.8 11.9 10.2 8.4 0.0 0.0 0.0 1.7 0.0

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

Auto loans 0.0 0.1 3.6 2.0 1.1 0.0 0.0 0.0 0.0 0.0

Other consumer loans 0.2 0.1 1.0 0.8 0.4 0.0 0.0 0.0 0.1 0.3

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

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

Total loans, leases, and other assets 0.0 0.0 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0

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

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

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

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

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

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

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

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

Assets Sold with Recourse and Not Securitized 

Number of institutions reporting asset sales 345 340 343 347 345 0.0 3 110 154 69 9

Outstanding Principal Balance by Asset Type 

1-4 family residential loans 37,950 36,084 35,364 31,869 28,990 30.9 14 6,283 17,855 12,479 1,320

All other loans, leases, and other assets 135,583 135,492 131,293 128,103 126,493 7.2 0 12 342 36,897 98,331

Total sold and not securitized 173,533 171,577 166,657 159,972 155,483 11.6 14 6,295 18,197 49,377 99,651

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 14,644 13,149 13,564 12,870 10,753 36.2 1 762 6,784 6,443 654

All other loans, leases, and other assets 39,279 39,242 37,880 36,997 36,423 7.8 0 12 51 11,710 27,507

Total credit exposure 53,923 52,391 51,444 49,867 47,176 14.3 1 774 6,835 18,153 28,161

Support for Securitization Facilities Sponsored by Other Institutions 

Number of institutions reporting securitization facilities sponsored by others 37 38 37 37 35 5.7 1 10 14 8 4

Total credit exposure 22,536 23,478 23,986 24,893 26,480 -14.9 0 0 0 1,559 20,977

Total unused liquidity commitments 408 415 418 412 413 -1.2 0 0 0 295 113

Other

Assets serviced for others** 5,704,566 5,624,357 5,781,994 5,804,674 5,912,001 -3.5 2,717 161,475 392,024 1,288,833 3,859,518

Asset-backed commercial paper conduits 

Credit exposure to conduits sponsored by institutions and others 20,683 18,417 19,694 17,209 17,348 19.2 0 0 0 0 20,683

Unused liquidity commitments to conduits sponsored by institutions 

 and others 54,035 56,072 56,904 59,373 59,835 -9.7 0 0 0 501 53,534

Net servicing income (for the quarter) 204 3,435 1,029 1,364 -246 -182.9 7 269 218 167 -456

Net securitization income (for the quarter) 142 106 77 92 39 264.1 0 4 1 73 63

Total credit exposure to Tier 1 capital (%)*** 3.4 3.5 3.6 3.7 3.8 0.0 0.1 0.4 2.4 5.1

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

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

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

QUARTERLY BANKING PROFILE

FDIC QUARTERLY 15

COMMUNITY BANK PERFORMANCE

Community banks are identified based on criteria defined in the FDIC’s 2020 Community Banking Study. When comparing 

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

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

Quarterly Net Income for Community Banks Continued to Increase Year Over Year, Driven by Lower Provision 

Expense and Higher Net Interest Income

Net Interest Margin Contracted Further

Loan and Lease Balances Declined From the Previous Quarter, Primarily Due to Payoff and Forgiveness of 

Paycheck Protection Program Loans

Asset Quality Improved

Quarterly Net Income for 

Community Banks 

Continued to Increase 

Year Over Year, Driven by 

Lower Provision Expense 

and Higher Net Interest 

Income

Community banks reported year-over-year quarterly net income growth of $1.9 billion 

(28.7 percent) in second quarter 2021, despite a narrower net interest margin (NIM). 

Provision expense (provisions) decreased $2.3 billion (98.1 percent) from second quarter 

2020 but remained positive at $46.1 million. In comparison, noncommunity banks had 

provisions of negative $10.8 billion. Net interest income increased $1.4 billion (7.2 percent) 

from second quarter 2020 primarily because of lower interest expense and higher 

commercial and industrial (C&I) loan interest income, partially from the recognition of loan 

fees earned through the payoff and forgiveness of Paycheck Protection Program (PPP) loans. 

Nearly two-thirds of the 4,490 FDIC-insured community banks (65 percent) reported higher 

net income from the year-ago quarter. The pretax return on assets ratio of 1.54 percent rose 

20 basis points from a year ago but fell 4 basis points from first quarter 2021.

Net Interest Margin 

Contracted Further

The quarterly NIM narrowed 26 basis points from the year-ago quarter to 3.25 percent, despite 

an increase in net interest income of $1.4 billion (7.2 percent). Earning asset growth (up 

$232.4 billion, or 10.2 percent) outpaced net interest income growth, causing the contraction 

in NIM. The decline in average yields on earning assets also outpaced the decline in average 

funding costs. The average yield on earning assets fell 57 basis points to 3.57 percent, and the 

average funding cost fell 31 basis points to 0.32 percent—both record lows.

Contributors to the Year-Over-Year Change in Income

FDIC-Insured Community Banks 

Source: FDIC.

$ Billions

Net

Income

Net

Interest

Income

Loan Loss

Provisions

Noninterest

Income

Noninterest

Expense

Realized

Gains on

Securities

Income

Taxes

Positive Factor Negative Factor

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

+7% -98% +4% +8% -59% +46%

$1.86 $1.35 -$2.32 $0.25 $1.17 -$0.31 $0.58

+29%

Chart 1

Source: FDIC.

Net Interest Margin

Percent 

Community Banks (3.25)

Industry (2.50)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

Chart 2
2021   •   Volume 15  • Number 3

16 FDIC QUARTERLY

Change in Loan Balances and Unused Commitments 

FDIC-Insured Community Banks 

Source: FDIC.

$ Billions

Loan Balances

Unused

Commitments

Nonfarm

Nonresidential

RE

Commercial

& Industrial

1–4 Family

Residential

RE

Construction &

Development

Agricultural

Production

Commercial RE

& Construction

Commercial

& Industrial

Change 2Q 2021 vs. 2Q 2020

Change 2Q 2021 vs. 1Q 2021

9.0 7.3

-13.7

-1.1

-4.1

32.4

12.4

2.7

-10.1

-0.2

3.7 2.1

10.5

2.1

-20

-10

0

10

20

30

40

Chart 3

Noncurrent Loan Rates for FDIC-Insured Community Banks

Source: FDIC.

Share of Loan Portfolio Noncurrent

Percent

0

2

4

6

8

10

12

14

16

C&D Loans

Nonfarm Nonresidential RE

1–4 Family RE

C&I Loans

Farm Loans

Home Equity

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Chart 4

Noninterest Income 

Increased From Second 

Quarter 2020

Noninterest income increased $251.9 million (4.3 percent) from a year ago. Increases in 

“all other noninterest income” and service charges on deposit accounts offset a decline 

in gains on loan sales.1 During the year ending second quarter 2021, all other noninterest 

income rose $203.6 million (9.3 percent), and higher revenue from service charges on 

deposit accounts (up $134.8 million, or 23.5 percent) offset a reduction in net gains on loan 

sales of $322.3 million (14.5 percent). The increase in net interest income and noninterest 

income contributed to growth in quarterly net operating revenue, which rose $1.6 billion 

(up 6.5 percent) from the year-ago quarter.

Noninterest Expense 

Increased From the 

Year-Ago Quarter

An increase in salary and benefits expense of $688.2 million (7.8 percent) drove the growth 

in noninterest expense (up $1.2 billion, or 7.8 percent) year over year. Average assets per 

employee increased 8.4 percent to $6.8 million from the year-ago quarter. Noninterest 

expense as a percentage of average assets declined 18 basis points from the year-ago 

quarter to 2.45 percent, a near historic low.

Net Operating Revenue 

to Average Assets 

Continued to Decline

Net operating revenue (net interest income plus noninterest income) increased $1.6 billion 

(6.5 percent) from the year-ago quarter as net interest income and noninterest income 

improved. Growth in net operating revenue was outpaced by the growth in average assets, 

contributing to a 33 basis point decline in the ratio of net operating revenue to average assets. 

The ratio stood at 3.97 percent for the quarter—the lowest level since first quarter 2009.

Provision Expense as a 

Percent of Net Operating 

Revenue Declined to a 

Record Low

Provisions declined $345.1 million (88.2 percent) from the previous quarter and $2.3 billion 

(98.1 percent) from the year-ago quarter to $46.1 million. Provisions measured 0.18 percent 

of net operating revenue, a record low. Less than one-sixth of community banks 

(14.9 percent) reported higher provisions compared with the year-ago quarter.2

Eighty-eight community banks had adopted current expected credit loss (CECL) accounting 

as of second quarter. Community bank CECL adopters reported negative provisions of 

$208.3 million in second quarter, a reduction of $130.7 million from the previous quarter 

and a reduction of $746.4 million from one year ago. Provisions for community banks that 

had not adopted CECL accounting totaled $254.5 million, a reduction of $214.4 million from 

a quarter ago and $1.6 billion from one year ago.

Allowance for Loan 

and Lease Losses 

Remains High

The allowance for loan and lease losses as a percentage of total loans and leases increased 

9 basis points from the year-ago quarter to 1.31 percent despite nominal provisions. The 

allowance for loan and lease losses as a percentage of loans that are 90 days or more past due 

or in nonaccrual status (coverage ratio) increased 39.8 percentage points from the year-ago 

quarter to 191.7 percent, a record high, due to declines in noncurrent loans. This ratio is well 

above the financial crisis average of 64.5 percent.3 The coverage ratio for community banks 

is 15.4 percentage points above the coverage ratio for noncommunity banks.

1 All other noninterest income includes, but is not limited to, bankcard and credit card interchange fees, income and fees 

from wire transfers, and income and fees from automated teller machines.

2 Provisions for credit losses include both losses for loans and securities for CECL adopters but only loan losses for 

non-adopters. 

3 The financial crisis refers to the period between December 2007 and June 2009. 
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 17

The Noncurrent Rate 

Declined From First 

Quarter 2021

Loans and leases that were 90 days or more past due or in nonaccrual status (noncurrent 

loans and leases) declined $894.6 million (7.1 percent) to $11.6 billion from first quarter 

2021. Noncurrent 1–4 family residential loans declined most among loan categories from 

the previous quarter (down $281.1 million, or 8.1 percent). The noncurrent rate for total 

loans and leases improved 5 basis points to 0.68 percent from the previous quarter. The 

noncurrent rate did not materially increase in any loan portfolio.

Net Charge-Offs 

Declined Broadly

Declines in net charge-off balances across most loan portfolios contributed to a reduction in 

the net charge-off rate for total loans. The net charge-off rate for community banks declined 

8 basis points from the year-ago quarter to 0.05 percent. The net charge-off rate for consumer 

loans declined the most among major loan categories, down 51 basis points to 0.36 percent.

Total Assets Increased 

From the Previous Quarter

Total assets increased $44.1 billion (1.7 percent) from the previous quarter, driven by 

increased securities holdings. Securities grew $46.6 billion (9.6 percent) quarter over quarter, 

supported by a $46 billion increase in deposits. Cash and balances due from depository 

institutions and securities represent almost one-third (31.7 percent) of total assets.

Loan and Lease Balances 

Declined From the 

Previous Quarter but 

Grew During the Past Year

Community banks reported a decline in loan and lease balances (0.5 percent) between first 

quarter 2021 and second quarter 2021. A decrease in C&I loan balances (down $33.8 billion, 

or 10.1 percent) drove the trend, led by a $38.3 billion decline in PPP loan balances. More 

than two-thirds of community banks (68.5 percent) reported a decrease in C&I loans 

in second quarter 2021 from first quarter 2021. Growth in commercial real estate (CRE) 

portfolios (up $21.5 billion, or 2.9 percent) offset some of the decline in C&I loans. An 

increase in CRE loan commitments (up $10.9 billion, or 10.5 percent) drove the quarterover-quarter growth in unused commitments.

Loan and lease balances grew $5.7 billion (0.3 percent) during the year ending second 

quarter 2021. Strong growth in CRE portfolios (up $61.7 billion, or 8.9 percent) offset 

declines in C&I loans, agricultural production loans, and 1–4 family mortgage loans during 

the year. C&I loans declined (down $47.6 billion, or 13.7 percent) reflecting, in part, the 

payoff and forgiveness of PPP loans. Agricultural production loans (down $5.7 billion, or 

11.2 percent) and 1–4 family loans (down $4 billion, or 1.1 percent) also declined year over 

year. Small loans to businesses declined 8 percent to $343.5 billion from the year-ago 

quarter, reflecting, in part, the payoff and forgiveness of PPP loans. C&I loans to small 

businesses led the decline (down $26.9 billion, or 15 percent) followed by agricultural 

production loans to small farm businesses (down $3.2 billion, or 11.9 percent).

Deposits Continued to 

Grow in Second Quarter 

2021

Deposits at community banks increased $46 billion (2.1 percent) in second quarter. 

Two-thirds of community banks (66.1 percent) reported an increase in deposits during the 

second quarter. Growth in deposits of more than $250,000 (up $47.8 billion, or 4.7 percent) 

offset a small decline in deposits under $250,000 (down $1.2 billion, or 0.1 percent). 

Brokered deposits declined $3.8 billion (6.7 percent) during the quarter. Average funding 

costs fell 31 basis points to 0.32 percent, a record low for community banks.

Capital Levels Remained 

Strong

Equity capital grew $8.3 billion (3 percent) during the quarter, driven by retained earnings 

of $5.3 billion. However, the leverage capital ratio declined 13 basis points to 10.14 percent 

as growth in average assets outpaced tier 1 capital formation. The average tier 1 risk-based 

capital ratio among noncommunity bank leverage ratio (CBLR) filers was 14.71 percent in 

second quarter 2021, up 7 basis points from the prior quarter. The average CBLR for the 

1,789 banks that elected to use the CBLR framework was 11 percent.

Two New Community 

Banks Opened in Second 

Quarter 2021

The number of community banks declined to 4,490, down 38 from the previous 

quarter.4 Two new community banks opened, 12 banks transitioned from community to 

noncommunity banks, one bank transitioned from noncommunity bank to community 

bank, two banks self-liquidated, and 27 community banks merged during the quarter.

Author:

James K. Presley-Nelson

Senior Financial Analyst

Division of Insurance and Research

4 The number of community bank reporters excludes two banks that did not file Call Reports this quarter but continue to 

have active banking charters.
2021   •   Volume 15  • Number 3

18 FDIC QUARTERLY

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

2021* 2020* 2020 2019 2018 2017 2016

Return on assets (%) 1.28 1.00 1.09 1.19 1.19 0.96 0.99

Return on equity (%) 12.03 8.74 9.72 10.24 10.57 8.65 8.81

Core capital (leverage) ratio (%) 10.14 10.48 10.32 11.15 11.09 10.80 10.69

Noncurrent assets plus other real estate owned to assets (%) 0.50 0.65 0.59 0.65 0.70 0.78 0.94

Net charge-offs to loans (%) 0.05 0.12 0.12 0.13 0.13 0.16 0.16

Asset growth rate (%) 9.15 8.30 14.06 -1.26 2.20 1.12 3.05

Net interest margin (%) 3.26 3.50 3.39 3.66 3.72 3.62 3.57

Net operating income growth (%) 46.97 -14.13 0.02 -4.16 27.90 0.19 2.46

Number of institutions reporting 4,490 4,621 4,557 4,748 4,979 5,227 5,461

Percentage of unprofitable institutions (%) 3.47 5.11 4.52 3.98 3.64 5.72 4.67

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

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

(dollar figures in millions)  2nd Quarter

2021

1st Quarter

2021

2nd Quarter

2020

%Change 

20Q2-21Q2

Number of institutions reporting 4,490 4,528 4,621 -2.8

Total employees (full-time equivalent) 392,145 390,288 389,579 0.7

CONDITION DATA

Total assets $2,671,932 $2,636,504 $2,447,866 9.2

Loans secured by real estate 1,240,837 1,222,558 1,197,326 3.6

1-4 Family residential mortgages 378,973 381,088 388,165 -2.4

Nonfarm nonresidential 511,727 499,383 474,462 7.9

 Construction and development 119,961 115,970 113,961 5.3

Home equity lines 40,654 40,854 43,434 -6.4

Commercial & industrial loans 300,544 335,061 346,924 -13.4

Loans to individuals 66,780 64,520 62,283 7.2

 Credit cards 1,970 1,880 1,846 6.7

Farm loans 45,733 44,694 52,411 -12.7

Other loans & leases 47,012 47,784 38,545 22.0

Less: Unearned income 1,317 1,354 1,380 -4.5

Total loans & leases 1,699,589 1,713,264 1,696,108 0.2

Less: Reserve for losses* 22,324 22,609 20,719 7.7

Net loans and leases 1,677,265 1,690,655 1,675,389 0.1

Securities** 531,293 486,615 395,245 34.4

Other real estate owned 1,559 1,709 2,234 -30.2

Goodwill and other intangibles 18,078 17,980 17,907 1.0

All other assets 443,737 439,544 357,090 24.3

Total liabilities and capital 2,671,932 2,636,504 2,447,866 9.2

Deposits 2,269,413 2,230,974 2,016,192 12.6

 Domestic office deposits 2,266,700 2,228,676 2,013,804 12.6

Foreign office deposits 2,712 2,298 2,387 13.6

 Brokered deposits 52,664 56,464 64,189 -18.0

Estimated insured deposits 1,545,878 1,542,121 1,439,720 7.4

Other borrowed funds 94,415 104,654 139,237 -32.2

Subordinated debt 338 343 237 42.6

All other liabilities 23,769 23,853 25,121 -5.4

Total equity capital (includes minority interests) 283,996 276,679 267,079 6.3

 Bank equity capital 283,872 276,555 266,970 6.3

Loans and leases 30-89 days past due 5,291 6,695 6,919 -23.5

Noncurrent loans and leases 11,643 12,590 13,644 -14.7

Restructured loans and leases 5,112 5,284 5,413 -5.6

Mortgage-backed securities 241,255 222,763 185,919 29.8

Earning assets 2,508,125 2,474,385 2,288,646 9.6

FHLB Advances 57,845 63,414 89,028 -35.0

Unused loan commitments 384,670 369,822 323,912 18.8

Trust assets 342,175 300,529 279,747 22.3

Assets securitized and sold 24,145 23,129 20,355 18.6

Notional amount of derivatives 145,295 162,066 170,779 -14.9

INCOME DATA

First Half

 2021

First Half

 2020 %Change

2nd Quarter 

2021

2nd Quarter 

2020

%Change 

20Q2-21 Q2

Total interest income $44,082 $44,745 -1.5 $22,210 $22,470 -1.2

Total interest expense 4,260 7,718 -44.8 2,015 3,437 -41.4

Net interest income 39,822 37,027 7.5 20,195 19,033 6.1

Provision for credit losses*** 437 4,203 -89.6 46 2,403 -98.1

Total noninterest income 12,569 10,646 18.1 6,062 5,978 1.4

Total noninterest expense 32,148 30,348 5.9 16,217 15,307 5.9

Securities gains (losses) 556 342 62.7 213 530 -59.8

Applicable income taxes 3,661 2,109 73.6 1,862 1,282 45.3

Extraordinary gains, net**** 1 1 N/M 1 0 N/M

Total net income (includes minority interests) 16,703 11,356 47.1 8,346 6,550 27.4

 Bank net income 16,680 11,338 47.1 8,335 6,538 27.5

Net charge-offs 408 952 -57.2 223 520 -57.1

Cash dividends 6,118 5,621 8.8 3,057 2,448 24.9

Retained earnings 10,562 5,717 84.7 5,279 4,090 29.1

Net operating income 16,238 11,048 47.0 8,171 6,110 33.7

* For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.

** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.

*** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, 

this item represents the provision for loan and lease losses.

**** See Notes to Users for explanation. N/M - Not Meaningful
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 19

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

Prior Periods Adjusted for Mergers

(dollar figures in millions)  2nd Quarter 

2021

1st Quarter 

2021

2nd Quarter

2020

%Change 

20Q2-21Q2

Number of institutions reporting 4,490 4,488 4,483 0.2

Total employees (full-time equivalent) 392,145 388,766 383,872 2.2

CONDITION DATA

Total assets $2,671,932 $2,627,843 $2,432,978 9.8

Loans secured by real estate 1,240,837 1,219,048 1,185,984 4.6

1-4 Family residential mortgages 378,973 379,710 383,006 -1.1

Nonfarm nonresidential 511,727 498,308 469,403 9.0

 Construction and development 119,961 115,716 111,760 7.3

Home equity lines 40,654 40,676 43,187 -5.9

Commercial & industrial loans 300,544 334,373 348,192 -13.7

Loans to individuals 66,780 64,241 62,986 6.0

 Credit cards 1,970 1,878 1,885 4.5

Farm loans 45,733 44,416 51,485 -11.2

Other loans & leases 47,012 47,684 46,626 0.8

Less: Unearned income 1,317 1,356 1,358 -3.0

Total loans & leases 1,699,589 1,708,406 1,693,917 0.3

Less: Reserve for losses* 22,324 22,525 20,694 7.9

Net loans and leases 1,677,265 1,685,881 1,673,223 0.2

Securities** 531,293 484,683 388,485 36.8

Other real estate owned 1,559 1,701 2,208 -29.4

Goodwill and other intangibles 18,078 17,888 17,196 5.1

All other assets 443,737 437,690 351,866 26.1

Total liabilities and capital 2,671,932 2,627,843 2,432,978 9.8

Deposits 2,269,413 2,223,424 1,999,483 13.5

 Domestic office deposits 2,266,700 2,221,126 1,997,096 13.5

Foreign office deposits 2,712 2,298 2,387 13.6

 Brokered deposits 52,664 56,467 63,812 -17.5

Estimated insured deposits 1,545,878 1,536,002 1,422,772 8.7

Other borrowed funds 94,415 104,561 143,804 -34.3

Subordinated debt 338 343 346 -2.3

All other liabilities 23,769 23,803 25,098 -5.3

Total equity capital (includes minority interests) 283,996 275,712 264,247 7.5

 Bank equity capital 283,872 275,587 264,143 7.5

Loans and leases 30-89 days past due 5,291 6,666 6,871 -23.0

Noncurrent loans and leases 11,643 12,538 13,333 -12.7

Restructured loans and leases 5,112 5,257 5,525 -7.5

Mortgage-backed securities 241,255 221,995 182,462 32.2

Earning assets 2,508,125 2,466,297 2,275,736 10.2

FHLB Advances 57,845 63,418 89,419 -35.3

Unused loan commitments 384,670 368,677 323,765 18.8

Trust assets 342,175 299,560 274,830 24.5

Assets securitized and sold 24,145 23,024 20,410 18.3

Notional amount of derivatives 145,295 162,013 170,304 -14.7

INCOME DATA

First Half

 2021

First Half

 2020 %Change

2nd Quarter 

2021

2nd Quarter 

2020

%Change 

20Q2-21 Q2

Total interest income $44,082 $44,294 -0.5 $22,210 $22,270 -0.3

Total interest expense 4,260 7,686 -44.6 2,015 3,426 -41.2

Net interest income 39,822 36,608 8.8 20,195 18,844 7.2

Provision for credit losses*** 437 4,150 -89.5 46 2,365 -98.1

Total noninterest income 12,569 10,298 22.0 6,062 5,810 4.3

Total noninterest expense 32,148 29,808 7.8 16,217 15,046 7.8

Securities gains (losses) 556 327 N/M 213 525 N/M

Applicable income taxes 3,661 2,091 75.0 1,862 1,279 45.6

Extraordinary gains, net**** 1 1 N/M 1 0 N/M

Total net income (includes minority interests) 16,703 11,185 49.3 8,346 6,489 28.6

 Bank net income 16,680 11,169 49.3 8,335 6,478 28.7

Net charge-offs 408 943 -56.8 223 513 -56.5

Cash dividends 6,118 5,539 10.5 3,057 2,456 24.4

Retained earnings 10,562 5,630 87.6 5,279 4,022 31.2

Net operating income 16,238 10,889 49.1 8,171 6,052 35.0

* For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.

** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.

*** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, 

this item represents the provision for loan and lease losses.

**** See Notes to Users for explanation. N/M - Not Meaningful
2021   •   Volume 15  • Number 3

20 FDIC QUARTERLY

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

Second Quarter 2021

(dollar figures in millions) All Community Banks

Geographic Regions*

New York Atlanta Chicago Kansas City Dallas San Francisco

Number of institutions reporting 4,490 497 510 982 1,217 1,005 279

Total employees (full-time equivalent) 392,145 80,479 43,255 80,476 71,162 82,854 33,919

CONDITION DATA

Total assets $2,671,932 $683,119 $288,397 $480,345 $452,982 $495,055 $272,034

Loans secured by real estate 1,240,837 363,392 131,896 213,792 194,142 216,552 121,063

1-4 Family residential mortgages 378,973 131,569 37,380 63,538 54,743 66,059 25,685

Nonfarm nonresidential 511,727 139,376 62,824 85,031 69,105 93,323 62,068

 Construction and development 119,961 26,768 15,280 18,086 18,339 30,641 10,846

Home equity lines 40,654 12,021 5,527 8,855 4,545 4,364 5,342

Commercial & industrial loans 300,544 75,343 31,223 54,298 51,421 54,323 33,936

Loans to individuals 66,780 18,502 6,320 11,746 11,641 12,537 6,036

 Credit cards 1,970 382 100 207 699 193 389

Farm loans 45,733 551 1,337 7,288 25,695 8,126 2,736

Other loans & leases 47,012 13,760 2,843 11,234 6,946 7,042 5,187

Less: Unearned income 1,317 224 214 150 173 296 260

Total loans & leases 1,699,589 471,323 173,405 298,207 289,672 298,283 168,698

Less: Reserve for losses** 22,324 5,496 2,277 3,970 4,146 4,025 2,410

Net loans and leases 1,677,265 465,828 171,128 294,237 285,526 294,259 166,288

Securities*** 531,293 113,841 58,500 103,517 95,079 107,154 53,201

Other real estate owned 1,559 245 243 290 316 388 77

Goodwill and other intangibles 18,078 5,222 1,318 3,494 2,814 2,881 2,349

All other assets 443,737 97,983 57,208 78,806 69,246 90,374 50,119

Total liabilities and capital 2,671,932 683,119 288,397 480,345 452,982 495,055 272,034

Deposits 2,269,413 571,669 248,787 405,191 385,297 426,398 232,070

 Domestic office deposits 2,266,700 571,049 248,777 404,859 385,297 426,398 230,320

Foreign office deposits 2,712 620 10 332 0 0 1,750

 Brokered deposits 52,664 20,619 3,257 7,955 9,981 6,555 4,297

 Estimated insured deposits 1,545,878 384,010 163,415 295,420 282,828 285,289 134,917

Other borrowed funds 94,415 29,647 7,689 19,723 16,442 12,316 8,598

Subordinated debt 338 240 7 34 6 40 11

All other liabilities 23,769 8,416 2,173 3,808 3,111 3,564 2,697

Total equity capital (includes minority interests) 283,996 73,146 29,742 51,589 48,125 52,738 28,657

 Bank equity capital 283,872 73,126 29,739 51,511 48,124 52,716 28,656

Loans and leases 30-89 days past due 5,291 1,337 530 850 953 1,336 284

Noncurrent loans and leases 11,643 3,655 1,043 2,097 1,776 2,269 804

Restructured loans and leases 5,112 1,727 423 1,107 809 641 404

Mortgage-backed securities 241,255 63,084 26,907 42,393 36,009 41,738 31,124

Earning assets 2,508,125 643,323 269,931 450,078 426,023 463,477 255,293

FHLB Advances 57,845 18,055 5,010 13,400 10,783 7,012 3,584

Unused loan commitments 384,670 103,883 34,504 68,595 72,995 62,002 42,691

Trust assets 342,175 77,111 11,110 68,085 118,990 44,270 22,609

Assets securitized and sold 24,145 9,797 111 4,794 4,177 4,911 354

Notional amount of derivatives 145,295 60,375 11,612 23,653 26,335 13,537 9,784

INCOME DATA

Total interest income $22,210 $5,413 $2,357 $3,883 $3,998 $4,347 $2,213

Total interest expense 2,015 569 186 359 392 377 131

Net interest income 20,195 4,843 2,171 3,523 3,607 3,970 2,081

Provision for credit losses  46 -66 16 14 57 80 -54

Total noninterest income 6,062 1,247 617 1,518 1,073 1,095 512

Total noninterest expense 16,217 3,801 1,800 3,060 2,805 3,155 1,596

Securities gains (losses) 213 139 19 13 14 23 5

Applicable income taxes 1,862 605 188 353 243 223 249

Extraordinary gains, net** *** 1 0 0 0 1 0 0

Total net income (includes minority interests) 8,346 1,891 803 1,627 1,589 1,628 808

 Bank net income 8,335 1,889 802 1,625 1,589 1,622 808

Net charge-offs 223 77 19 16 57 41 14

Cash dividends 3,057 451 134 731 796 647 297

Retained earnings 5,279 1,438 668 893 793 975 512

Net operating income 8,171 1,779 787 1,616 1,576 1,608 804

* See Table V-A for explanation.

** For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.

*** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.

  For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, 

this item represents the provision for loan and lease losses.

** *** See Notes to Users for explanation.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 21

Table IV-B. Second Quarter 2021, FDIC-Insured Community Banks

Performance ratios (annualized, %)

All Community Banks Second Quarter 2021, Geographic Regions*

 2nd Quarter 

2021

1st Quarter 

2021 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 3.57 3.64 3.40 3.54 3.47 3.77 3.79 3.50

Cost of funding earning assets 0.32 0.37 0.36 0.28 0.32 0.37 0.33 0.21

Net interest margin 3.25 3.26 3.04 3.26 3.15 3.40 3.46 3.29

Noninterest income to assets 0.92 1.01 0.74 0.87 1.27 0.95 0.89 0.76

Noninterest expense to assets 2.45 2.48 2.25 2.53 2.56 2.48 2.57 2.37

Loan and lease loss provision to assets 0.01 0.06 -0.04 0.02 0.01 0.05 0.07 -0.08

Net operating income to assets 1.23 1.26 1.05 1.11 1.35 1.40 1.31 1.20

Pretax return on assets 1.54 1.58 1.48 1.39 1.66 1.62 1.51 1.57

Return on assets 1.26 1.30 1.12 1.13 1.36 1.41 1.32 1.20

Return on equity 11.92 12.16 10.49 11.01 12.79 13.37 12.50 11.46

Net charge-offs to loans and leases 0.05 0.04 0.07 0.04 0.02 0.08 0.06 0.03

Loan and lease loss provision to net charge-offs 20.67 211.80 -86.38 83.60 85.41 101.40 195.18 -391.34

Efficiency ratio 61.40 60.66 62.05 64.07 60.32 59.50 62.06 61.29

Net interest income to operating revenue 76.91 75.12 79.52 77.88 69.89 77.06 78.38 80.26

% of unprofitable institutions 4.25 4.00 4.83 6.67 3.97 3.37 3.78 5.38

% of institutions with earnings gains 64.81 73.79 71.03 71.57 61.51 60.15 65.97 69.18

Table V-B. First Half 2021, FDIC-Insured Community Banks

Performance ratios (%)

All Community Banks First Half 2021, Geographic Regions*

First Half

 2021

First Half

 2020 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 3.61 4.23 3.45 3.59 3.52 3.79 3.83 3.54

Cost of funding earning assets 0.35 0.73 0.39 0.31 0.34 0.39 0.35 0.22

Net interest margin 3.26 3.50 3.06 3.28 3.17 3.40 3.48 3.32

Noninterest income to assets 0.97 0.94 0.75 0.89 1.36 1.02 0.95 0.82

Noninterest expense to assets 2.47 2.68 2.28 2.53 2.60 2.50 2.59 2.39

Loan and lease loss provision to assets 0.03 0.37 -0.01 0.04 0.05 0.07 0.08 -0.03

Net operating income to assets 1.25 0.97 1.03 1.12 1.38 1.43 1.34 1.22

Pretax return on assets 1.56 1.19 1.46 1.41 1.71 1.67 1.55 1.58

Return on assets 1.28 1.00 1.11 1.15 1.41 1.45 1.36 1.22

Return on equity 12.03 8.74 10.32 11.03 13.10 13.63 12.70 11.52

Net charge-offs to loans and leases 0.05 0.12 0.07 0.03 0.02 0.06 0.05 0.04

Loan and lease loss provision to net charge-offs 107.18 441.22 -24.28 211.23 335.49 169.53 274.98 -111.65

Efficiency ratio 61.01 63.07 62.61 63.60 59.56 58.88 61.40 60.44

Net interest income to operating revenue 76.01 77.67 79.24 77.59 68.61 75.70 77.41 79.17

% of unprofitable institutions 3.47 5.11 4.63 6.67 3.36 1.97 2.99 4.30

% of institutions with earnings gains 74.57 51.20 83.50 75.69 72.20 73.87 71.14 80.29

* See Table V-A for explanation.
2021   •   Volume 15  • Number 3

22 FDIC QUARTERLY

Table VI-B. Loan Performance, FDIC-Insured Community Banks

June 30, 2021

Geographic Regions*

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

Percent of Loans 30-89 Days Past Due

All loans secured by real estate 0.29 0.29 0.28 0.30 0.29 0.38 0.13

Construction and development 0.34 0.44 0.27 0.26 0.31 0.41 0.17

Nonfarm nonresidential 0.19 0.19 0.16 0.23 0.19 0.22 0.10

Multifamily residential real estate 0.26 0.40 0.14 0.15 0.15 0.19 0.05

Home equity loans 0.27 0.26 0.29 0.28 0.32 0.36 0.11

Other 1-4 family residential 0.40 0.30 0.49 0.46 0.37 0.57 0.20

Commercial and industrial loans 0.26 0.16 0.29 0.24 0.30 0.38 0.21

Loans to individuals 0.98 0.90 0.92 0.46 0.74 1.98 0.66

Credit card loans 1.57 1.45 1.07 0.68 2.57 0.93 0.82

Other loans to individuals 0.96 0.89 0.92 0.45 0.62 2.00 0.64

All other loans and leases (including farm) 0.31 0.07 0.19 0.17 0.48 0.43 0.27

Total loans and leases 0.31 0.28 0.31 0.28 0.33 0.45 0.17

Percent of Loans Noncurrent

All loans secured by real estate 0.72 0.85 0.62 0.77 0.60 0.74 0.47

Construction and development 0.52 0.80 0.42 0.54 0.44 0.39 0.44

Nonfarm nonresidential 0.71 0.88 0.55 0.88 0.61 0.68 0.39

Multifamily residential real estate 0.29 0.34 0.41 0.26 0.30 0.22 0.17

Home equity loans 0.57 0.62 0.44 0.44 0.32 0.37 1.22

Other 1-4 family residential 0.84 1.03 0.82 0.80 0.46 0.93 0.52

Commercial and industrial loans 0.63 0.68 0.56 0.62 0.51 0.80 0.48

Loans to individuals 0.45 0.31 0.40 0.25 0.30 1.09 0.28

Credit card loans 0.68 1.06 0.61 0.22 0.83 0.48 0.38

Other loans to individuals 0.44 0.29 0.39 0.25 0.27 1.10 0.28

All other loans and leases (including farm) 0.62 0.08 0.46 0.43 0.95 0.66 0.73

Total loans and leases 0.68 0.78 0.60 0.70 0.61 0.76 0.48

Percent of Loans Charged-Off (net, YTD)

All loans secured by real estate 0.01 0.03 -0.01 0.00 0.03 0.01 -0.01

Construction and development -0.01 0.01 -0.05 -0.01 0.00 0.01 -0.06

Nonfarm nonresidential 0.03 0.06 0.00 0.02 0.05 0.01 0.00

Multifamily residential real estate 0.02 0.01 0.00 0.00 0.11 0.00 0.00

Home equity loans -0.01 -0.01 -0.02 -0.01 -0.04 0.05 -0.01

Other 1-4 family residential 0.00 0.01 -0.01 -0.01 0.00 0.00 -0.01

Commercial and industrial loans 0.09 0.13 0.08 0.05 0.06 0.12 0.06

Loans to individuals 0.46 0.61 0.47 0.13 0.55 0.39 0.58

Credit card loans 4.03 4.22 0.67 1.17 7.52 1.30 1.80

Other loans to individuals 0.35 0.53 0.46 0.11 0.13 0.37 0.50

All other loans and leases (including farm) 0.10 0.05 0.22 0.07 0.08 0.10 0.24

Total loans and leases 0.05 0.07 0.03 0.02 0.06 0.05 0.04

Loans Outstanding (in billions)

All loans secured by real estate $1,240.8 $363.4 $131.9 $213.8 $194.1 $216.6 $121.1

Construction and development 120.0 26.8 15.3 18.1 18.3 30.6 10.8

Nonfarm nonresidential 511.7 139.4 62.8 85.0 69.1 93.3 62.1

Multifamily residential real estate 113.4 51.4 6.5 20.8 13.2 8.5 13.1

Home equity loans 40.7 12.0 5.5 8.9 4.5 4.4 5.3

Other 1-4 family residential 379.0 131.6 37.4 63.5 54.7 66.1 25.7

Commercial and industrial loans 300.5 75.3 31.2 54.3 51.4 54.3 33.9

Loans to individuals 66.8 18.5 6.3 11.7 11.6 12.5 6.0

Credit card loans 2.0 0.4 0.1 0.2 0.7 0.2 0.4

Other loans to individuals 64.8 18.1 6.2 11.5 10.9 12.3 5.6

All other loans and leases (including farm) 92.7 14.3 4.2 18.5 32.6 15.2 7.9

Total loans and leases 1,700.9 471.5 173.6 298.4 289.8 298.6 169.0

Memo: Unfunded Commitments (in millions)

Total Unfunded Commitments 384,670 103,883 34,504 68,595 72,995 62,002 42,691

Construction and development: 1-4 family residential 36,283 6,682 5,372 4,263 5,781 10,836 3,349

Construction and development: CRE and other 76,915 22,568 7,978 12,532 11,741 15,106 6,990

Commercial and industrial 123,783 34,649 9,622 25,106 21,615 18,486 14,305

* See Table V-A for explanation.

Note: Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 23

INSURANCE FUND INDICATORS

Deposit Insurance Fund Increases by $1.2 Billion

Insured Deposits Shrink Slightly in the Second Quarter

DIF Reserve Ratio Rises 2 Basis Points to 1.27 Percent

During the second quarter, the Deposit Insurance Fund (DIF) balance increased by 

$1.2 billion to $120.5 billion. Assessment income of $1.6 billion, interest earned on 

investments of $251 million, and negative provisions for insurance losses of $42 million 

were the largest sources of the increase. Operating expenses of $466 million and unrealized 

losses on available-for-sale securities of $233 million partially offset the increase in the 

fund balance. No insured institutions failed in the second quarter.

The deposit insurance assessment base—average consolidated total assets minus average 

tangible equity—increased by 2.5 percent in the second quarter and by 8.5 percent over 

12 months.1, 2 Total estimated insured deposits decreased by 0.2 percent in the second 

quarter and increased by 7.3 percent ($649 million) year over year. The increase in the DIF, 

combined with the slight decrease in insured deposits, resulted in the DIF reserve ratio 

rising by 2 basis points to 1.27 percent at June 30, 2021. This is the first quarterly increase 

in the DIF reserve ratio since the third quarter of 2019 when the reserve ratio stood at 

1.41 percent. The June 30, 2021, reserve ratio was 3 basis points lower than the previous 

year; the 12-month decline in the reserve ratio was entirely the result of extraordinary 

insured deposit growth.

The Dodd-Frank Act, enacted on July 21, 2010, contained several provisions to strengthen 

the DIF. Among other things, it: (1) raised the minimum reserve ratio for the DIF to 

1.35 percent (from the former minimum of 1.15 percent); (2) required that the reserve ratio 

reach 1.35 percent by September 30, 2020. Once the reserve ratio reaches 1.35 percent, 

the September 30, 2020, deadline in the Dodd-Frank Act will have been met and will no 

longer apply. If the reserve ratio later falls below 1.35 percent, even if that occurs before 

September 30, 2020, the FDIC will have a minimum of eight years to return the reserve 

ratio to 1.35 percent, reducing the likelihood of a large increase in assessment rates. The 

reserve ratio exceeded the 1.35 percent minimum imposed by the Dodd-Frank Act on 

September 30, 2018, when the reserve ratio was 1.36 percent. The reserve ratio continued 

to exceed the 1.35 percent minimum for all subsequent quarters until June 30, 2020, when, 

due to extraordinary insured deposit growth, the reserve ratio dropped 8 basis points 

to 1.30 percent. Since the reserve ratio fell below its statutorily required minimum of 

1.35 percent on June 30, 2020, the FDIC Board adopted a new Fund Restoration Plan in 

September 2020.

Author:

Kevin Brown

Senior Financial Analyst

Division of Insurance and Research

1 There are additional adjustments to the assessment base for banker’s banks and custodial banks.

2 Figures for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition 

to insured commercial banks and savings institutions.
2021   •   Volume 15  • Number 3

24 FDIC QUARTERLY

DIF Reserve Ratios

Percent of Insured Deposits

1.40 1.41 1.41 1.38

1.30 1.30

1.25

1.33 1.36 1.36 1.36

1.29 1.27

6/18 9/18 12/18 3/19 6/19 9/19 12/19 3/20 6/20 9/20 12/20 3/21 6/21

Table I-C. Insurance Fund Balances and Selected Indicators

(dollar figures in millions)

Deposit Insurance Fund*

2nd 

Quarter 

2021

1st 

Quarter 

2021

4th 

Quarter 

2020

3rd 

Quarter 

2020

2nd 

Quarter 

2020

1st 

Quarter 

2020

4th 

Quarter 

2019

3rd 

Quarter 

2019

2nd 

Quarter 

2019

1st 

Quarter 

2019

4th 

Quarter 

2018

3rd 

Quarter 

2018

2nd 

Quarter 

2018

Beginning Fund Balance $119,362 $117,897 $116,434 $114,651 $113,206 $110,347 $108,940 $107,446 $104,870 $102,609 $100,204 $97,588 $95,072

Changes in Fund Balance:

Assessments earned 1,589 1,862 1,884 2,047 1,790 1,372 1,272 1,111 1,187 1,369 1,351 2,728 2,598

Interest earned on 

investment securities 251 284 330 392 454 507 531 544 535 507 481 433 381

Realized gain on sale of

investments 0 0 0 0 0 0 0 0 0 0 0 0 0

Operating expenses 466 454 470 451 465 460 460 443 459 434 453 434 445

Provision for insurance 

losses -42 -57 -48 -74 -47 12 -88 -192 -610 -396 -236 -121 -141

All other income, 

net of expenses 2 1 9 5 2 2 21 4 9 2 2 2 3

Unrealized gain/(loss) on 

available-for-sale 

securities** -233 -285 -338 -284 -383 1,450 -45 86 694 421 788 -234 -162

Total fund balance change 1,185 1,465 1,463 1,783 1,445 2,859 1,407 1,494 2,576 2,261 2,405 2,616 2,516

Ending Fund Balance 120,547 119,362 117,897 116,434 114,651 113,206 110,347 108,940 107,446 104,870 102,609 100,204 97,588

Percent change from 

 four quarters earlier 5.14 5.44 6.84 6.88 6.71 7.95 7.54 8.72 10.10 10.31 10.63 10.72 11.42

Reserve Ratio (%) 1.27 1.25 1.29 1.30 1.30 1.38 1.41 1.41 1.40 1.36 1.36 1.36 1.33

Estimated Insured 

Deposits 9,490,281 9,513,932 9,123,046 8,927,668 8,841,566 8,181,859 7,828,160 7,744,543 7,695,116 7,699,009 7,525,204 7,378,900 7,357,163

Percent change from 

 four quarters earlier 7.34 16.28 16.54 15.28 14.90 6.27 4.03 4.96 4.59 4.94 5.14 3.89 4.39

Domestic Deposits 17,203,254 16,980,214 16,339,032 15,716,702 15,563,637 14,351,881 13,262,843 13,020,253 12,788,773 12,725,363 12,659,406 12,367,954 12,280,904

Percent change from 

 four quarters earlier 10.53 18.31 23.19 20.71 21.70 12.78 4.77 5.27 4.14 3.41 4.37 3.36 3.83

Assessment Base*** 19,688,529 19,214,767 18,805,803 18,464,915 18,153,227 16,483,536 16,156,600 15,904,422 15,683,980 15,561,770 15,452,126 15,229,424 15,113,551

Percent change from 

 four quarters earlier 8.46 16.57 16.40 16.10 15.74 5.92 4.56 4.43 3.77 3.27 3.01 2.67 2.79

Number of Institutions 

Reporting 4,960 4,987 5,011 5,042 5,075 5,125 5,186 5,267 5,312 5,371 5,415 5,486 5,551

Deposit Insurance Fund Balance 

and Insured Deposits

($ Millions)

DIF 

Balance

DIF-Insured 

Deposits

6/18 $97,588 $7,357,163

9/18 100,204 7,378,900

12/18 102,609 7,525,204

3/19 104,870 7,699,009

6/19 107,446 7,695,116

9/19 108,940 7,744,543

12/19 110,347 7,828,160

3/20 113,206 8,181,859

6/20 114,651 8,841,566

9/20 116,434 8,927,668

12/20 117,897 9,123,046

3/21 119,362 9,513,932

6/21 120,547 9,490,281

Table II-C. Problem Institutions and Failed Institutions

(dollar figures in millions) 2021  2020** ** 2020 2019 2018 2017 2016 2015

Problem Institutions

Number of institutions 51 52 56 51 60 95 123 183

Total assets $45,823 $48,127 $55,830 $46,190 $48,481 $13,939 $27,624 $46,780

Failed Institutions

Number of institutions 0 2 4 4 0 8 5 8

Total assets***** $0 $253 $455 $209 $0 $5,082 $277 $6,706

* Quarterly financial statement results are unaudited.

** Includes unrealized postretirement benefit gain (loss).

*** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks.

  Through June 30.

** *** Total assets are based on final Call Reports submitted by failed institutions.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 25

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

(dollar figures in millions)

June 30, 2021

Number of 

Institutions

Total 

Assets

Domestic 

Deposits*

Est. Insured 

Deposits

Commercial Banks and Savings Institutions

FDIC-Insured Commercial Banks 4,336 $21,359,063 $15,971,759 $8,533,097

FDIC-Supervised 2,887 3,677,448 3,052,833 1,838,464

OCC-Supervised 755 14,241,986 10,322,634 5,483,216

Federal Reserve-Supervised 694 3,439,629 2,596,292 1,211,417

FDIC-Insured Savings Institutions 615 1,429,940 1,192,174 925,379

OCC-Supervised 272 611,072 491,797 405,032

FDIC-Supervised 307 396,109 315,598 236,868

Federal Reserve-Supervised 36 422,759 384,779 283,479

Total Commercial Banks and Savings Institutions 4,951 22,789,003 17,163,933 9,458,476

Other FDIC-Insured Institutions

U.S. Branches of Foreign Banks 9 88,358 39,320 31,805

Total FDIC-Insured Institutions 4,960 22,877,361 17,203,254 9,490,281

* Excludes $1.6 trillion in foreign office deposits, which are not FDIC insured.

Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range

Quarter Ending March 31, 2021 (dollar figures in billions)

Annual Rate in Basis Points*

Number of 

Institutions

Percent of Total 

Institutions

Amount of 

Assessment Base

Percent of Total 

Assessment Base

1.50 - 3.00 2,926 58.7 $4,833.8 25.16

3.01 - 6.00 1,448 29.0 12,154.0 63.25

6.01 - 10.00 508 10.2 2,072.6 10.79

10.01 - 15.00 39 0.8 108.2 0.56

15.01 - 20.00 63 1.3 45.9 0.24

20.01 - 25.00 3 0.1 0.2 0.00

> 25.00 0 0.0 0.0 0.00

* Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, as required by the Dodd-Frank Act.
2021   •   Volume 15  • Number 3

26 FDIC QUARTERLY

Notes to Users

This publication contains financial data and other information for 

depository institutions insured by the Federal Deposit Insurance 

Corporation (FDIC). These notes are an integral part of this 

publication and provide information regarding the comparability of 

source data and reporting differences over time.

Tables I-A through VIII-A.

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

FDIC Quarterly Banking Profile is aggregated for all FDIC-insured Call 

Report filers, both commercial banks and savings institutions. Some 

tables are arrayed by groups of FDIC-insured institutions based 

on predominant types of asset concentration, while other tables 

aggregate institutions by asset size and geographic region. Quarterly 

and full-year data are provided for selected indicators, including 

aggregate condition and income data, performance ratios, condition 

ratios, and structural changes, as well as past due, noncurrent, and 

charge-off information for loans outstanding and other assets.

Tables I-B through VI-B.

The information presented in Tables I-B through VI-B is 

aggregated for all FDIC-insured commercial banks and savings 

institutions meeting the criteria for community banks that were 

developed for the FDIC’s Community Banking Study, published 

in December, 2012: https://www.fdic.gov/resources/communitybanking/cbi-study.html.

The determination of which insured institutions are considered 

community banks is based on five steps.

The first step in defining a community bank is to aggregate all 

charter-level data reported under each holding company into a 

single banking organization. This aggregation applies both to 

balance-sheet measures and the number and location of banking 

offices. Under the FDIC definition, if the banking organization is 

designated as a community bank, every charter reporting under 

that organization is also considered a community bank when 

working with data at the charter level.

The second step is to exclude any banking organization where more 

than 50 percent of total assets are held in certain specialty banking 

charters, including: credit card specialists, consumer nonbank banks, 

industrial loan companies, trust companies, bankers’ banks, and banks 

holding 10 percent or more of total assets in foreign offices.

Once the specialty organizations are removed, the third step 

involves including organizations that engage in basic banking 

activities as measured by the total loans-to-assets ratio (greater 

than 33 percent) and the ratio of core deposits to assets (greater 

than 50 percent). Core deposits are defined as non-brokered 

deposits in domestic offices. Analysis of the underlying data shows 

that these thresholds establish meaningful levels of basic lending 

and deposit gathering and still allow for a degree of diversity in how 

individual banks construct their balance sheets.

The fourth step includes organizations that operate within a 

limited geographic scope. This limitation of scope is used as a 

proxy measure for a bank’s relationship approach to banking. 

Banks that operate within a limited market area have more ease in 

managing relationships at a personal level. Under this step, four 

criteria are applied to each banking organization. They include 

both a minimum and maximum number of total banking offices, a 

maximum level of deposits for any one office, and location-based 

criteria. The limits on the number of and deposits per office are 

adjusted upward quarterly. For banking offices, banks must have 

more than one office, and the maximum number of offices is 40 in 

1985 and reached 87 in 2016. The maximum level of deposits for 

any one office is $1.25 billion in deposits in 1985 and reached $6.97 

billion in deposits in 2016. The remaining geographic limitations 

are also based on maximums for the number of states (fixed at 3) 

and large metropolitan areas (fixed at 2) in which the organization 

maintains offices. Branch office data are based on the most recent 

data from the annual June 30 Summary of Deposits Survey that are 

available at the time of publication. 

Finally, the definition establishes an asset-size limit, also adjusted 

upward quarterly and below which the limits on banking activities 

and geographic scope are waived. The asset-size limit is $250 

million in 1985 and reached $1.39 billion in 2016. This final step 

acknowledges the fact that most of those small banks that are not 

excluded as specialty banks meet the requirements for banking 

activities and geographic limits in any event.

Summary of FDIC Research Definition of 

Community Banking Organizations

Community banks are designated at the level of the banking 

organization.

(All charters under designated holding companies are considered 

community banking charters.)

Exclude: Any organization with:

— No loans or no core deposits

— Foreign Assets ≥ 10% of total assets

— More than 50% of assets in certain specialty banks, including:

•	 credit card specialists

•	 consumer nonbank banks1

•	 industrial loan companies

•	 trust companies

•	 bankers’ banks

Include: All remaining banking organizations with:

— Total assets < indexed size threshold 2

— Total assets ≥ indexed size threshold, where:

•	 Loan to assets > 33%

•	 Core deposits to assets > 50%

•	 More than 1 office but no more than the indexed maxim

number of offices.3

•	 Number of large MSAs with offices ≤ 2

•	 Number of states with offices ≤ 3

•	 No single office with deposits > indexed maximum branch

deposit size.4

Tables I-C through IV-C.

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

comparative quarterly data related to the Deposit Insurance Fund 

(DIF), problem institutions, failed institutions, estimated FDIC1 Consumer nonbank banks are financial institutions with limited charters that 

can make commercial loans or take deposits, but not both.

2 Asset size threshold indexed to equal $250 million in 1985 and $1.39 billion in 

2016.

3 Maximum number of offices indexed to equal 40 in 1985 and 87 in 2016.

4 Maximum branch deposit size indexed to equal $1.25 billion in 1985 and 

$6.97 billion in 2016.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 27

insured deposits, as well as assessment rate information. Depository 

institutions that are not insured by the FDIC through the DIF are 

not included in the FDIC Quarterly Banking Profile. U.S. branches of 

institutions headquartered in foreign countries and non-deposit 

trust companies are not included unless otherwise indicated. Efforts 

are made to obtain financial reports for all active institutions. 

However, in some cases, final financial reports are not available for 

institutions that have closed or converted their charters.

DATA SOURCES

The financial information appearing in this publication is obtained 

primarily from the Federal Financial Institutions Examination 

Council (FFIEC) Consolidated Reports of Condition and Income 

(Call Reports) and the OTS Thrift Financial Reports (TFR) submitted 

by all FDIC-insured depository institutions. (TFR filers began filing 

Call Reports effective with the quarter ending March 31, 2012.) This 

information is stored on and retrieved from the FDIC’s Research 

Information System (RIS) database.

COMPUTATION METHODOLOGY

Parent institutions are required to file consolidated reports, 

while their subsidiary financial institutions are still required to 

file separate reports. Data from subsidiary institution reports are 

included in the Quarterly Banking Profile tables, which can lead 

to double-counting. No adjustments are made for any doublecounting of subsidiary data. Additionally, certain adjustments 

are made to the OTS Thrift Financial Reports to provide closer 

conformance with the reporting and accounting requirements 

of the FFIEC Call Reports. (TFR filers began filing Call Reports 

effective with the quarter ending March 31, 2012.)

All condition and performance ratios represent weighted averages, 

which is the sum of the individual numerator values divided by 

the sum of individual denominator values. All asset and liability 

figures used in calculating performance ratios represent average 

amounts for the period (beginning-of-period amount plus endof-period amount plus any interim periods, divided by the total 

number of periods). For “pooling-of-interest” mergers, the 

assets of the acquired institution(s) are included in average assets, 

since the year-to-date income includes the results of all merged 

institutions. No adjustments are made for “purchase accounting” 

mergers. Growth rates represent the percentage change over a 

12-month period in totals for institutions in the base period to 

totals for institutions in the current period. For the community 

bank subgroup, growth rates will reflect changes over time in the 

number and identities of institutions designated as community 

banks, as well as changes in the assets and liabilities, and income 

and expenses of group members. Unless indicated otherwise, 

growth rates are not adjusted for mergers or other changes in the 

composition of the community bank subgroup. When community 

bank growth rates are adjusted for mergers, prior period balances 

used in the calculations represent totals for the current group 

of community bank reporters, plus prior period amounts for 

any institutions that were subsequently merged into current 

community banks.

All data are collected and presented based on the location of each 

reporting institution’s main office. Reported data may include 

assets and liabilities located outside of the reporting institution’s 

home state. In addition, institutions may relocate across state 

lines or change their charters, resulting in an inter-regional or 

inter-industry migration; institutions can move their home offices 

between regions, savings institutions can convert to commercial 

banks, or commercial banks may convert to savings institutions.

ACCOUNTING CHANGES

Financial accounting pronouncements by the Financial Accounting 

Standards Board (FASB) can result in changes in an individual 

bank’s accounting policies and in the Call Reports they submit. Such 

accounting changes can affect the aggregate amounts presented 

in the QBP for the current period and the period-to-period 

comparability of such financial data. 

The current quarter’s Financial Institution Letter (FIL) and related 

Call Report supplemental instructions can provide additional 

explanation to the QBP reader beyond any material accounting 

changes discussed in the QBP analysis.

https://www.fdic.gov/news/financial-institution-letters/2021/

fil21049.html

https://www.fdic.gov/regulations/resources/call/call.html

Further information on changes in financial statement 

presentation, income recognition and disclosure is available 

from the FASB. http://www.fasb.org/jsp/FASB/Page/

LandingPage&cid=1175805317350.

DEFINITIONS (in alphabetical order)

All other assets – total cash, balances due from depository 

institutions, premises, fixed assets, direct investments in real 

estate, investment in unconsolidated subsidiaries, customers’ 

liability on acceptances outstanding, assets held in trading 

accounts, federal funds sold, securities purchased with agreements 

to resell, fair market value of derivatives, prepaid deposit insurance 

assessments, and other assets.

All other liabilities – bank’s liability on acceptances, limited-life 

preferred stock, allowance for estimated off-balance-sheet credit 

losses, fair market value of derivatives, and other liabilities.

Assessment base – effective April 1, 2011, the deposit insurance 

assessment base changed to “average consolidated total assets 

minus average tangible equity” with an additional adjustment to 

the assessment base for banker’s banks and custodial banks, as 

permitted under Dodd-Frank. Previously the assessment base was 

“assessable deposits” and consisted of deposits in banks’ domestic 

offices with certain adjustments.

Assessment rate schedule – Initial base assessment rates for 

small institutions are based on a combination of financial ratios and 

CAMELS component ratings. Initial rates for large institutions—

generally those with at least $10 billion in assets—are also based 

on CAMELS component ratings and certain financial measures 

combined into two scorecards—one for most large institutions and 

another for the remaining very large institutions that are structurally 

and operationally complex or that pose unique challenges and risks 

in case of failure (highly complex institutions). The FDIC may take 

additional information into account to make a limited adjustment to 

a large institution’s scorecard results, which are used to determine a 

large institution’s initial base assessment rate.

While risk categories for small institutions (except new 

institutions) were eliminated effective July 1, 2016, initial rates for 

small institutions are subject to minimums and maximums based 

on an institution’s CAMELS composite rating. (Risk categories for 

large institutions were eliminated in 2011.)

The current assessment rate schedule became effective July 1, 2016. 

Under the current schedule, initial base assessment rates range 

from 3 to 30 basis points. An institution’s total base assessment rate 

may differ from its initial rate due to three possible adjustments: 

(1) Unsecured Debt Adjustment: An institution’s rate may decrease 
2021   •   Volume 15  • Number 3

28 FDIC QUARTERLY

by up to 5 basis points for unsecured debt. The unsecured debt 

adjustment cannot exceed the lesser of 5 basis points or 50 percent 

of an institution’s initial base assessment rate (IBAR). Thus, for 

example, an institution with an IBAR of 3 basis points would have 

a maximum unsecured debt adjustment of 1.5 basis points and 

could not have a total base assessment rate lower than 1.5 basis 

points. (2) Depository Institution Debt Adjustment: For institutions 

that hold long-term unsecured debt issued by another insured 

depository institution, a 50 basis point charge is applied to the 

amount of such debt held in excess of 3 percent of an institution’s 

Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for large 

institutions that are not well capitalized or do not have a composite 

CAMELS rating of 1 or 2 may increase (not to exceed 10 basis points) 

if their brokered deposits exceed 10 percent of domestic deposits.

The assessment rate schedule effective July 1, 2016, is shown in the 

following table:

Total Base Assessment Rates*

Established Small Banks Large and 

Highly 

Complex 

Institutions**

CAMELS Composite

1 or 2 3 4 or 5

Initial Base 

Assessment Rate 3 to 16 6 to 30 16 to 30 3 to 30

Unsecured Debt 

Adjustment -5 to 0 -5 to 0 -5 to 0 -5 to 0

Brokered Deposit 

Adjustment N/A N/A N/A 0 to 10

Total Base 

Assessment Rate 1.5 to 16 3 to 30 11 to 30 1.5 to 40

* All amounts for all categories are in basis points annually. Total base rates that are not the 

minimum or maximum rate will vary between these rates. Total base assessment rates do not 

include the depository institution debt adjustment.

 ** Effective July 1, 2016, large institutions are also subject to temporary assessment 

surcharges in order to raise the reserve ratio from 1.15 percent to 1.35  percent. The 

surcharges amount to 4.5 basis points of a large institution’s assessment base (after making 

certain adjustments).

Each institution is assigned a risk-based rate for a quarterly 

assessment period near the end of the quarter following the 

assessment period. Payment is generally due on the 30th day of 

the last month of the quarter following the assessment period. 

Supervisory rating changes are effective for assessment purposes as 

of the examination transmittal date.

Assets securitized and sold – total outstanding principal balance 

of assets securitized and sold with servicing retained or other 

seller-provided credit enhancements.

Capital Purchase Program (CPP) – as announced in October 

2008 under the TARP, the Treasury Department purchase of 

noncumulative perpetual preferred stock and related warrants that 

is treated as Tier 1 capital for regulatory capital purposes is included 

in “Total equity capital.” Such warrants to purchase common 

stock or noncumulative preferred stock issued by publicly-traded 

banks are reflected as well in “Surplus.” Warrants to purchase 

common stock or noncumulative preferred stock of not-publiclytraded bank stock are classified in a bank’s balance sheet as “Other 

liabilities.”

Common equity Tier 1 capital ratio – ratio of common equity 

Tier 1 capital to risk-weighted assets. Common equity Tier 1 capital 

includes common stock instruments and related surplus, retained 

earnings, accumulated other comprehensive income (AOCI), and 

limited amounts of common equity Tier 1 minority interest, minus 

applicable regulatory adjustments and deductions. Items that are 

fully deducted from common equity Tier 1 capital include goodwill, 

other intangible assets (excluding mortgage servicing assets) 

and certain deferred tax assets; items that are subject to limits in 

common equity Tier 1 capital include mortgage servicing assets, 

eligible deferred tax assets, and certain significant investments. 

Beginning March 2020, this ratio does not include institutions that 

have a Community Bank Leverage Ratio election in effect at the 

report date.

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 
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 29

(notional principal) of the underlying variable or index by 

specified reference rates or prices. Except for currency swaps, 

the notional principal is used to calculate each payment but is 

not exchanged.

Derivatives underlying risk exposure – the potential exposure 

characterized by the level of banks’ concentration in particular 

underlying instruments, in general. Exposure can result from 

market risk, credit risk, and operational risk, as well as, interest 

rate risk.

Domestic deposits to total assets – total domestic office deposits 

as a percent of total assets on a consolidated basis.

Earning assets – all loans and other investments that earn interest 

or dividend income.

Efficiency ratio – Noninterest expense less amortization 

of intangible assets as a percent of net interest income plus 

noninterest income. This ratio measures the proportion of net 

operating revenues that are absorbed by overhead expenses, so that 

a lower value indicates greater efficiency.

Estimated insured deposits – in general, insured deposits are 

total domestic deposits minus estimated uninsured deposits. 

Beginning March 31, 2008, for institutions that file Call Reports, 

insured deposits are total assessable deposits minus estimated 

uninsured deposits. Beginning September 30, 2009, insured 

deposits include deposits in accounts of $100,000 to $250,000 

that are covered by a temporary increase in the FDIC’s standard 

maximum deposit insurance amount (SMDIA). The Dodd-Frank 

Wall Street Reform and Consumer Protection Act enacted on July 21, 

2010, made permanent the standard maximum deposit insurance 

amount (SMDIA) of $250,000. Also, the Dodd-Frank Act amended 

the Federal Deposit Insurance Act to include noninterest-bearing 

transaction accounts as a new temporary deposit insurance 

account category. All funds held in noninterest-bearing transaction 

accounts were fully insured, without limit, from December 31, 2010, 

through December 31, 2012.

Failed/assisted institutions – an institution fails when regulators 

take control of the institution, placing the assets and liabilities 

into a bridge bank, conservatorship, receivership, or another 

healthy institution. This action may require the FDIC to provide 

funds to cover losses. An institution is defined as “assisted” when 

the institution remains open and receives assistance in order to 

continue operating.

Fair Value – the valuation of various assets and liabilities on the 

balance sheet—including trading assets and liabilities, availablefor-sale securities, loans held for sale, assets and liabilities 

accounted for under the fair value option, and foreclosed assets—

involves the use of fair values. During periods of market stress, the 

fair values of some financial instruments and nonfinancial assets 

may decline.

FHLB advances – all borrowings by FDIC-insured institutions 

from the Federal Home Loan Bank System (FHLB), as reported by 

Call Report filers, and by TFR filers prior to March 31, 2012.

Goodwill and other intangibles – intangible assets include 

servicing rights, purchased credit card relationships, and other 

identifiable intangible assets. Goodwill is the excess of the purchase 

price over the fair market value of the net assets acquired, less 

subsequent impairment adjustments. Other intangible assets are 

recorded at fair value, less subsequent quarterly amortization and 

impairment adjustments.

Loans secured by real estate – includes home equity loans, junior 

liens secured by 1-4 family residential properties, and all other 

loans secured by real estate.

Loans to individuals – includes outstanding credit card balances 

and other secured and unsecured consumer loans.

Long-term assets (5+ years) – loans and debt securities with 

remaining maturities or repricing intervals of over five years.

Maximum credit exposure – the maximum contractual credit 

exposure remaining under recourse arrangements and other sellerprovided credit enhancements provided by the reporting bank to 

securitizations.

Mortgage-backed securities – certificates of participation in pools 

of residential mortgages and collateralized mortgage obligations 

issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below.

Net charge-offs – total loans and leases charged off (removed from 

balance sheet because of uncollectability), less amounts recovered 

on loans and leases previously charged off.

Net interest margin – the difference between interest and 

dividends earned on interest-bearing assets and interest paid to 

depositors and other creditors, expressed as a percentage of average 

earning assets. No adjustments are made for interest income that is 

tax exempt.

Net loans to total assets – loans and lease financing receivables, 

net of unearned income, allowance and reserves, as a percent of 

total assets on a consolidated basis.

Net operating income – income excluding discretionary 

transactions such as gains (or losses) on the sale of investment 

securities and extraordinary items. Income taxes subtracted 

from operating income have been adjusted to exclude the portion 

applicable to securities gains (or losses).

Noncurrent assets – the sum of loans, leases, debt securities, and 

other assets that are 90 days or more past due, or in nonaccrual 

status.

Noncurrent loans & leases – the sum of loans and leases 90 days 

or more past due, and loans and leases in nonaccrual status.

Number of institutions reporting – the number of institutions 

that actually filed a financial report.

New reporters – insured institutions filing quarterly financial 

reports for the first time.

Other borrowed funds – federal funds purchased, securities 

sold with agreements to repurchase, demand notes issued to the 

U.S. Treasury, FHLB advances, other borrowed money, mortgage 

indebtedness, obligations under capitalized leases and trading 

liabilities, less revaluation losses on assets held in trading accounts.

Other real estate owned – primarily foreclosed property. Direct 

and indirect investments in real estate ventures are excluded. The 

amount is reflected net of valuation allowances. For institutions 

that filed a Thrift Financial Report (TFR), the valuation allowance 

subtracted also includes allowances for other repossessed assets. 

Also, for TFR filers the components of other real estate owned are 

reported gross of valuation allowances. (TFR filers began filing Call 

Reports effective with the quarter ending March 31, 2012.)

Percent of institutions with earnings gains – the percent of 

institutions that increased their net income (or decreased their 

losses) compared to the same period a year earlier.
2021   •   Volume 15  • Number 3

30 FDIC QUARTERLY

“Problem” institutions – federal regulators assign a composite 

rating to each financial institution, based upon an evaluation of 

financial and operational criteria. The rating is based on a scale 

of 1 to 5 in ascending order of supervisory concern. “Problem” 

institutions are those institutions with financial, operational, or 

managerial weaknesses that threaten their continued financial 

viability. Depending upon the degree of risk and supervisory 

concern, they are rated either a “4” or “5.” The number and assets 

of “problem” institutions are based on FDIC composite ratings. 

Prior to March 31, 2008, for institutions whose primary federal 

regulator was the OTS, the OTS composite rating was used.

Recourse – an arrangement in which a bank retains, in form or in 

substance, any credit risk directly or indirectly associated with an 

asset it has sold (in accordance with generally accepted accounting 

principles) that exceeds a pro rata share of the bank’s claim on 

the asset. If a bank has no claim on an asset it has sold, then the 

retention of any credit risk is recourse.

Reserves for losses – the allowance for loan and lease losses on a 

consolidated basis.

Restructured loans and leases – loan and lease financing 

receivables with terms restructured from the original contract. 

Excludes restructured loans and leases that are not in compliance 

with the modified terms.

Retained earnings – net income less cash dividends on common 

and preferred stock for the reporting period.

Return on assets – bank net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total 

(consolidated) assets. The basic yardstick of bank profitability.

Return on equity – bank net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total 

equity capital.

Risk-weighted assets – assets adjusted for risk-based capital 

definitions which include on-balance-sheet as well as off-balancesheet items multiplied by risk-weights that range from zero to 

200 percent. A conversion factor is used to assign a balance sheet 

equivalent amount for selected off-balance-sheet accounts.

Securities – excludes securities held in trading accounts. Banks’ 

securities portfolios consist of securities designated as “held-tomaturity” (reported at amortized cost (book value)), securities 

designated as “available-for-sale” (reported at fair (market) 

value), and equity securities with readily determinable fair values 

not held for trading.

Securities gains (losses) – realized gains (losses) on held-tomaturity and available-for-sale securities, before adjustments for 

income taxes. Thrift Financial Report (TFR) filers also include gains 

(losses) on the sales of assets held for sale. (TFR filers began filing 

Call Reports effective with the quarter ending March 31, 2012.)

Seller’s interest in institution’s own securitizations – the 

reporting bank’s ownership interest in loans and other assets that 

have been securitized, except an interest that is a form of recourse 

or other seller-provided credit enhancement. Seller’s interests 

differ from the securities issued to investors by the securitization 

structure. The principal amount of a seller’s interest is generally 

equal to the total principal amount of the pool of assets included 

in the securitization structure less the principal amount of those 

assets attributable to investors, i.e., in the form of securities issued 

to investors.

Small Business Lending Fund – The Small Business Lending 

Fund (SBLF) was enacted into law in September 2010 as part 

of the Small Business Jobs Act of 2010 to encourage lending to 

small businesses by providing capital to qualified community 

institutions with assets of less than $10 billion. The SBLF Program 

is administered by the U.S. Treasury Department (https://

home.treasury.gov/policy-issues/small-business-programs/

small-business-lending-fund).

Under the SBLF Program, the Treasury Department purchased 

noncumulative perpetual preferred stock from qualifying 

depository institutions and holding companies (other than 

Subchapter S and mutual institutions). When this stock has been 

issued by a depository institution, it is reported as “Perpetual 

preferred stock and related surplus.” For regulatory capital 

purposes, this noncumulative perpetual preferred stock qualifies as 

a component of Tier 1 capital. Qualifying Subchapter S corporations 

and mutual institutions issue unsecured subordinated debentures to 

the Treasury Department through the SBLF. Depository institutions 

that issued these debentures report them as “Subordinated notes 

and debentures.” For regulatory capital purposes, the debentures 

are eligible for inclusion in an institution’s Tier 2 capital in 

accordance with their primary federal regulator’s capital standards. 

To participate in the SBLF Program, an institution with outstanding 

securities issued to the Treasury Department under the Capital 

Purchase Program (CPP) was required to refinance or repay in full 

the CPP securities at the time of the SBLF funding. Any outstanding 

warrants that an institution issued to the Treasury Department 

under the CPP remain outstanding after the refinancing of the CPP 

stock through the SBLF Program unless the institution chooses to 

repurchase them.

Subchapter S corporation – a Subchapter S corporation is treated 

as a pass-through entity, similar to a partnership, for federal 

income tax purposes. It is generally not subject to any federal 

income taxes at the corporate level. This can have the effect of 

reducing institutions’ reported taxes and increasing their after-tax 

earnings.

Trust assets – market value, or other reasonably available value of 

fiduciary and related assets, to include marketable securities, and 

other financial and physical assets. Common physical assets held 

in fiduciary accounts include real estate, equipment, collectibles, 

and household goods. Such fiduciary assets are not included in the 

assets of the financial institution.

Unearned income and contra accounts – unearned income for 

Call Report filers only.

Unused loan commitments – includes credit card lines, home 

equity lines, commitments to make loans for construction, loans 

secured by commercial real estate, and unused commitments to 

originate or purchase loans. (Excluded are commitments after 

June 2003 for originated mortgage loans held for sale, which are 

accounted for as derivatives on the balance sheet.)

Yield on earning assets – total interest, dividend, and fee income 

earned on loans and investments as a percentage of average 

earning assets.
THE IMPORTANCE OF TECHNOLOGY INVESTMENTS FOR COMMUNITY BANK 

LENDING AND DEPOSIT TAKING DURING THE PANDEMIC

For many community banks and their customers, the pandemic was a crash course in the 

use of technology in all facets of banking. At the onset of the pandemic, many community 

banks turned to technology to provide financial services in the face of temporary 

branch closures and stay-at-home orders.1 As restrictions eased, banks continued to use 

technology for customers and employees who wished to limit physical contact and for 

whom digital banking had become part of the new normal.

Given the important role of technology during the pandemic, this article examines whether 

community banks that invested more in technology before 2020 differed from banks that 

invested less in technology in their core functions of lending and deposit taking.

Based on data from Consolidated Reports of Condition and Income (Call Reports) and other 

available sources, community banks differed in their technology adoption and spending 

(hereafter referred to as technology investment) in the years leading up to the pandemic. 

Community banks with greater technology investment reported larger increases in loan 

growth in 2020, driven primarily by participation in the Paycheck Protection Program 

(PPP). These community banks originated a greater share of PPP loans on average to 

borrowers regardless of the loan size, when the loan was made, or the distance of the 

borrower from the nearest bank branch. Those banks also reported larger increases in 

deposit growth in 2020 than did banks with less technology investment. Generally the 

recent deposit growth at those institutions was due to increases in deposit balances of 

existing customers rather than from new depositors.

Data on Technology 

Investment Are Limited 

and Must Be Estimated

 Comprehensive data that directly measure technology investment are not available for all 

financial institutions, including many community banks. Banks do not report such data 

on the Call Report, and information available through other regulatory filings is often not 

comparable for, or is not required of, many entities.

However, available data can approximate technology investment in the absence of more 

refined measures. This article uses three sources of data—the Call Report, the Conference 

of State Bank Supervisor’s (CSBS) National Survey of Community Banks, and the Aberdeen 

Technology Data Cloud—to estimate technology adoption and spending by community 

banks before the pandemic.

FDIC-insured institutions must report components of noninterest expense, including 

data processing expenses exceeding certain thresholds, on the Call Report.2 While not all 

institutions met the required reporting thresholds for data processing expenses, many did, 

and many banks reported these expenses despite not meeting the reporting threshold. A 

total of 3,424 community banks (76 percent of established community banks) that were 

active as of December 31, 2020, reported their data processing expenses for the fourth 

quarter of each year from 2016 to 2019.3 For these banks, average annual growth in data 

processing expenses from 2017 to 2019 was calculated as a measure of technology spending 

before the pandemic.4

1 This article uses the definition of “community bank” in the Notes to Users of the FDIC’s Quarterly Banking Profile. That 

definition uses criteria outlined in the FDIC’s 2020 Community Banking Study to identify community banks. The 2020 

Community Banking Study is available at https://www.fdic.gov/resources/community-banking/report/2020/2020-cbistudy-full.pdf. 

2 Selected items that exceed $100,000 and 7 percent of other noninterest expense must be reported on Schedule RI-E of 

the Call Report. Before 2018, the reporting threshold was $100,000 and 3 percent of other noninterest expense. There 

was no noticeable change in the percentage of institutions that reported data processing expenses before and after the 

reporting change. The analysis included in this article also did not significantly vary when this measure was limited to 

expenses reported in 2018 and 2019.

3 Established community banks are community banks that have been federally insured for at least five years—those that 

have been federally insured since December 31, 2015, or earlier. 

4 On the Call Report, expenses are reported as the cumulative amount spent during the calendar year (year-to-date). 

Average annual growth is calculated using fourth quarter data because it is the period for which a bank is most likely to 

exceed the required reporting threshold.

FDIC QUARTERLY 31
2021   •   Volume 15  • Number 3

32 FDIC QUARTERLY

In their annual national survey of community banks, CSBS asked if a bank offered a specific 

product or service. A total of 717 community banks that were active as of December 31, 

2020, participated in one or both of the surveys conducted in 2019 and 2020. The number of 

technology-enabled products or services that a bank offered from among seven included in 

the survey was calculated as a measure of technology adoption.5 While this broad measure 

does not account for differences between the products and services, including the level of 

adoption among banks, quality, or use by customers, it should provide an estimation of a 

bank’s level of technology adoption.6

Finally, Aberdeen, now Spiceworks Ziff Davis, provided estimates of the number of personal 

computers (PCs), number of employees, and annual information technology (IT) spending, 

specified to the branch level.7 For community banks where sufficient information was 

identifiable and available, branch data were aggregated and extrapolated to the institution 

level, resulting in data for 3,652 community banks (81 percent of established community 

banks) that were active as of December 31, 2020.8 The average number of PCs per employee 

was calculated as a proxy measure of technology adoption. Annual IT spending as a share of 

total assets from 2017 to 2019 was calculated as a proxy measure of technology spending.

Not surprisingly, the four measures—IT spending to assets, number of PCs per employee, 

annual growth in data processing expenses, and number of adopted technologies—

were positively correlated with each other. These correlations, however, were relatively 

weak, suggesting that the four measures captured different components of technology 

investment, as intended. For example, number of PCs per employee and number of adopted 

technologies were, arguably, proxies for different components of a community bank’s 

adoption of technology. The number of PCs per employee targeted hardware, while the 

number of adopted technologies targeted the specific products and services included in the 

CSBS survey, the adoption of which was more likely driven by software. In the case of IT 

spending to assets and annual growth in data processing expenses, both were intended to 

proxy for technology spending; however, data processing expenses included only services 

performed for the bank by others, while IT spending also included in-house costs, such as 

IT staff.

Community Banks 

Differed in Their 

Technology Investment 

Before the Pandemic

 Based on the measures above, community banks differed in their technology investment 

before the pandemic. As indicated by the dotted blue bars at the top of each panel in Chart 1, 

community banks above the 25th and below the 75th percentiles for each technology 

investment measure spent between 0.45 percent and 0.83 percent of their assets on IT, had 

between 1.42 and 1.67 PCs per employee, and grew their data processing expenses between 

1.9 percent and 15.1 percent, on average, from 2017 to 2019.

While the differences in technology investment may appear small in some cases, they are 

meaningful. For example, a difference of 0.38 percent in IT spending as a share of assets 

translates to roughly $820,000 in annual IT spending for a bank with $216 million in 

assets—the median size of an established community bank at the end of 2019, just before 

the start of the pandemic. For the median community bank, that difference of $820,000 

equaled roughly 8 percent of total revenues in 2019.

5 For institutions that participated in both surveys, only the response from 2020 was used, as that response most likely 

reflects the status of the bank at the onset of the pandemic. The seven technology-enabled products or services included 

in the surveys were online loan applications, online loan closure, automated loan underwriting, remote deposit capture, 

electronic bill payment, mobile banking, and interactive teller machines. 

6 For more information on the adoption rate of each technology-enabled product and service and the distribution of 

adopted technologies, in total, among community banks, see Chart 6.1 and Table 6.1.1 of the FDIC 2020 Community 

Banking Study at https://www.fdic.gov/resources/community-banking/report/2020/2020-cbi-study-full.pdf. 

7 Aberdeen uses web mining of businesses and employee profiles to collect data and redistributes the data for marketing 

purposes.

8 The Aberdeen data did not include FDIC certificate numbers. Instead, company name, street address, zip code, and 

website URL from the Aberdeen data were matched with similar information from FDIC Summary of Deposits data. Only 

community banks with matched data for more than half of its branches in at least two years from 2017 to 2019 were 

included. 
T H E I M P O RTA N C E O F T E C H N O LO G Y I N V E ST M E N TS FO R CO M M U N I TY B A N K L E N D I N G A N D 

DEPOSIT TAKING DURING THE PANDEMIC

FDIC QUARTERLY 33

Larger Community Banks Invested More in Technology, While Dierences in Location Were Less Important

Sources: FDIC, Aberdeen Data Technology Cloud, and Johns Hopkins University.

Note: Shaded bars indicate the interquartile range (25th to 75th percentile). Unshaded areas in the middle of each bar indicate the median. Median size is based on total assets at the end of 2019. 

Banks in high-COVID case areas were those that had at least half of their branches in a county with cumulative reported cases per 100,000 residents in the upper quartile (75th percentile or greater) as of

June 30, 2020. Banks in low-COVID case areas were those that had at least half of their branches in a county with cumulative reported cases per 100,000 residents in the lower quartile (25th percentile or

lower) as of June 30, 2020.

Average Technology Investment From 2017 to 2019, Interquartile Ranges

0 5 10 15 20

Low-COVID Case Area

High-COVID Case Area

Rural Area

Metropolitan Area

At or Below Median Size

Above Median Size

Community Banks

Percent

Annual Growth in Data Processing Expenses

Low-COVID Case Area

High-COVID Case Area

Rural Area

Metropolitan Area

At or Below Median Size

Above Median Size

Community Banks

Percent

IT Spending to Assets

Low-COVID Case Area

High-COVID Case Area

Rural Area

Metropolitan Area

At or Below Median Size

Above Median Size

Community Banks

Number of Personal Computers per Employee

0.25 0.40 0.55 0.70 0.85 1.00 1.30 1.40 1.50 1.60 1.70 1.80

Chart 1

Established community banks that were larger—above the median asset size of 

$216 million at the end of 2019—invested more in technology before the pandemic. As 

shown by the dark blue bars in Chart 1, on average from 2017 to 2019, larger community 

banks reported faster annual growth in data processing expenses, spent more on IT 

relative to their assets, and had a greater number of PCs per employee than did smaller 

community banks at the 25th and 75th percentiles and at the median. Similarly, 56 percent 

of community banks above the median asset size offered at least four of the seven 

technology-enabled products and services included in the CSBS survey, compared with 

24 percent of community banks at or below the median. Greater technology investment, 

based on the four technology spending and adoption measures, by larger banks is 

consistent with the finding in the 2020 FDIC Community Bank Study that community bank 

size was the strongest indicator of technology adoption as of 2019.9

Technology investment also appeared to vary by a community bank’s location, although 

results were mixed. Before the pandemic, community banks with a main office in a 

metropolitan area (urban community banks) generally reported faster growth in data 

processing expenses and had a higher number of PCs per employee than did banks with 

a main office in a rural area (rural community banks). This is shown by the medium blue 

bars in Chart 1. However, the median for IT spending as a share of assets was lower among 

urban community banks than among rural community banks. Similar patterns were found 

for community banks that operated at least half of their branches in areas with relatively 

high or low COVID case rates (light blue bars in Chart 1), using data from Johns Hopkins 

University.10 While differences in technology investment based on location were not as large 

as those based on asset size, they are nonetheless important to consider when evaluating 

any differences in community bank lending and deposit taking during the pandemic.

Previous Technology 

Investment May Have 

Affected Lending and 

Deposit Taking During 

the Pandemic

 During the pandemic, differences in previous technology investment may have affected 

community bank core functions of lending and deposit taking. For community bank 

staff and customers already familiar with different technologies because of previous 

investments by their institution, temporary branch closures and the required shift to 

digital banking may have been less disruptive to ongoing banking activities. Compared 

with banks that invested less in technology before 2020, these banks may have been 

9 FDIC, “Technology in Community Banks,” 2020 FDIC Community Banking Study, pp. 6-1 to 6-20, https://www.fdic.gov/

resources/community-banking/report/2020/2020-cbi-study-full.pdf. 

10 High-COVID case areas are counties with cumulative cases per 100,000 residents at or above the 75th percentile. 

Low-COVID case areas are counties with cumulative cases per 100,000 residents at or below the 25th percentile. Both 

measures are as of June 30, 2020.
2021   •   Volume 15  • Number 3

34 FDIC QUARTERLY

better-positioned to grow their deposits and mitigate reductions in loan growth associated 

with the pandemic.

The following sections study the potential impact of previous technology investment by 

comparing loan growth, including PPP lending, and deposit growth before and during the 

pandemic, using the measures described above.

Community Banks With Greater Technology Investment Before the Pandemic Reported 

Stronger Loan Growth in 2020

Technology investment may have affected community bank lending during the pandemic 

in several ways. Banks with greater technology investment may have been better equipped 

to accept and process online loan applications and the required supporting documentation, 

mitigating the effect of branch closures and customers’ desire to limit in-person 

interaction. Community banks with greater technology offerings may have also been more 

likely to attract customers from nonbanks that curtailed their lending at the start of the 

pandemic, particularly nonbanks with a large online presence.11

As shown in Chart 2, community banks with greater previous investment in technology 

(indicated by the dark blue and dotted blue bars) reported stronger loan growth across all 

four technology measures in 2020 compared with banks with less investment (light blue 

and dark red bars). This correlation alone, however, is not enough to establish whether 

any link between technology investment and lending growth strengthened, as anticipated,

during the pandemic. It could be that banks with greater technology investment already 

had stronger loan growth before the pandemic, which continued in 2020. Among 

community banks in the highest quartiles for number of PCs per employee and average 

growth in data processing expenses, the medians for average quarterly loan growth from 

2017 to 2019 were noticeably higher than the medians for banks in the lowest quartiles.

However, Chart 2 also shows that, across all four technology measures, differences in 

median loan growth between community banks with greater and less investment in 

technology grew in 2020, relative to the three years before the pandemic. Compared with 

community banks in the lowest quartile, community banks in the highest quartile reported 

median average loan growth in 2020 that was

· 0.56 percentage points higher for IT spending to total assets (compared with 

0.04 percentage points lower from 2017 to 2019)

· 0.84 percentage points higher for the number of PCs per employee (compared with 

0.37 percentage points higher from 2017 to 2019)

· 0.85 percentage points higher for annual growth in data processing expenses (compared 

with 0.54 percentage points higher from 2017 to 2019)

Community banks that adopted four or more of the technologies included in the CSBS 

survey reported a median quarterly loan growth that was, on average, 0.74 percentage 

points higher in 2020 than banks that adopted three or fewer technologies (compared with 

0.08 percentage points higher from 2017 to 2019). Averaged across the four measures, the 

difference in the medians for average quarterly loan growth was three times higher in 

2020 than the difference in the medians from 2017 to 2019 (0.75 percentage points versus 

0.24 percentage points), in favor of community banks with greater previous investment in 

technology. Given that loans constitute about two-thirds of a community bank’s assets, a 

half of a percentage point difference in quarterly loan growth would have equaled nearly 

$3 million in loans for the median-size community bank in 2020.

11 Analysis by Standard & Poor’s, for example, found that origination volume among the major digital lenders for 

consumers, small and medium businesses, and students fell 36 percent in the first three quarters of 2020, relative to 

the previous year. See Nimayi Dixit, “U.S. Digital Lender Originations Expected to Rebound Strongly After Painful 2020,” 

S&P Global Market Intelligence, February 1, 2021, https://www.spglobal.com/marketintelligence/en/news-insights/

research/us-digital-lender-originations-expected-to-rebound-strongly-after-painful-2020. 
T H E I M P O RTA N C E O F T E C H N O LO G Y I N V E ST M E N TS FO R CO M M U N I TY B A N K L E N D I N G A N D 

DEPOSIT TAKING DURING THE PANDEMIC

FDIC QUARTERLY 35

Community Banks With Greater Technology Investment Reported a Larger Increase

in Loan Growth in 2020

Sources: FDIC, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.

Note: PCs stands for personal computers.

Median Average Loan Growth by Previous Technology Investment

0.0

0.5

1.0

1.5

2.0

2.5

Percent

IT Spending

to Assets

Number of

PCs per

Employee

Average Growth in

Data Processing

Expenses

Number of

Adopted

Technologies

2017–2019 2020 2017–2019 2020 2017–2019 2020 2017–2019 2020

Lowest Quartile

Highest Quartile

0–3 Technologies

4–7 Technologies

Chart 2

It remains possible that factors other than technology investment may have caused or 

influenced differences in loan growth in 2020. For example, larger community banks 

and those in metropolitan areas that tended to invest more in technology may have been 

more resilient to the effects of the pandemic due to their larger and more geographically 

diverse customer bases. The widened gap in loan growth shown in Chart 2 may not have 

resulted from a difference in previous technology investment but instead from bank size 

and location.

Similar trends in lending growth were found among different subsets of community 

banks based on size and location. Differences in the median for average loan growth by 

technology investment widened in 2020 for community banks that were above and below 

the median asset size before the pandemic, for urban and rural community banks, and for 

community banks in areas with higher and lower COVID case rates. In each case, the gap 

in the median for average loan growth widened in favor of community banks that invested 

more in technology before the pandemic. These findings lend support to the argument that 

previous technology spending and adoption helped banks better serve their customers 

during the pandemic.

The PPP Drove Differences in Loan Growth in 2020

Community banks held just over $150 billion in PPP loans at the end of third quarter 2020 

following the conclusion of the second round of the program on August 8.12 This amount 

represented nearly one-third of PPP loan balances reported by FDIC-insured institutions, 

despite community banks holding only slightly more than 10 percent of banking industry 

assets.13

Lending associated with the PPP also appears to be the main reason that the difference 

in loan growth on the basis of technology investment grew in 2020, relative to the 

years immediately preceding the pandemic. Excluding PPP loans, the differences in the 

medians for average loan growth narrowed for all of the technology investment measures, 

with the average difference across the measures falling from 0.75 percentage points to 

0.28 percentage points, or roughly equal to the difference reported before the pandemic.

12 This article focuses on PPP loan data at the end of the third quarter, as these data include all loans made in the first and 

second rounds of the program and were not affected by loan forgiveness, which had not yet begun. 

13 For further analysis of contributions of community banks to the PPP and how factors such as location, specialty, 

and size affected participation, using data from the Call Report as of June 30, 2020, see Margaret Hanrahan and 

Angela Hinton, “The Importance of Community Banks in Paycheck Protection Program Lending,” FDIC Quarterly 14, 

no. 4. (2020): 31–36, https://www.fdic.gov/analysis/quarterly-banking-profile/fdic-quarterly/2020-vol14-4/fdicv14n4-3q2020.pdf. 
2021   •   Volume 15  • Number 3

36 FDIC QUARTERLY

Given that PPP lending widened the gap in loan growth during 2020 in favor of community 

banks with greater technology investment, it is not a surprise that these banks also held 

more PPP loans than did banks with less technology investment. As shown in Table 1, for 

each technology investment measure, a larger share of community banks among those 

with greater investment before the pandemic reported a nonzero PPP loan balance on their 

third quarter 2020 Call Report compared with banks with less investment. Averaged across 

the four measures, the share of community banks that held PPP loans at the end of third 

quarter 2020 was 10.4 percentage points higher for banks with greater previous technology 

investment than for banks with less technology investment. Among those banks with 

a nonzero PPP loan balance, banks that invested more in technology also had a median 

share of PPP loans to assets that was more than 2 percentage points higher than those 

that invested less.14 For the median-size community bank, this difference equaled roughly 

$4.5 million in PPP lending. The association between greater technology investment before 

the pandemic and a higher share of PPP loans was not solely driven by larger community 

banks. Table 1 also shows that all but one of the technology measures—annual growth in 

14 Total assets held by community banks grew 14.2 percent in 2020, compared with 1.2 percent in 2017, 2.2 percent in 

2018, and –1.2 percent in 2019. This article measured PPP lending as a share of assets using total assets reported by the 

bank at the end of 2019, rather than third quarter 2020 when PPP lending was reported. This approach prevents other 

effects that technology investment may have had on asset growth in 2020, unrelated to participation in the PPP, from 

influencing the measure.

Community Banks That Invested More in Technology Held More PPP Loans

PPP Loan Balances by Previous Technology Investment, Third Quarter 2020

Percentage of Community Banks 

With Nonzero PPP Loan Balances at 

the End of Third Quarter 2020

Median PPP Loan Balance as a 

Percentage of Assets

All Below Median 

Asset Size All Below Median Asset Size

Annual IT Spending to Assets

Lowest Quartile 72.1 63.1 2.3 1.2

Middle Quartiles 86.6 79.6 4.1 2.6

Highest Quartile 90.7 81.9 5.1 3.2

Number of PCs per Employee

Lowest Quartile 76.2 71.8 2.7 2.0

Middle Quartiles 86.3 77.1 4.3 2.4

Highest Quartile 87.7 78.2 4.7 2.7

Annual Growth in Data Processing Expenses

Lowest Quartile 84.6 78.0 3.9 2.6

Middle Quartiles 85.9 77.2 4.5 2.9

Highest Quartile 87.3 76.5 5.1 2.7

Number of Technologies Adopted

0–3 Technologies 87.5 82.9 4.0 2.9

4–7 Technologies 96.1 90.8 6.4 5.3

Average of All Technology Measures

Less Technology Investment 80.1 74.0 3.2 2.2

Greater Technology Investment 90.5 81.9 5.3 3.5

All Community Banks 84.4 76.1 4.0 2.4

Sources: FDIC, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.

Note: PPP = Paycheck Protection Program. Given the strong association between asset size and technology investment, quartiles for each technology investment measure 

were recalculated for community banks below the median asset size.

Table 1
T H E I M P O RTA N C E O F T E C H N O LO G Y I N V E ST M E N TS FO R CO M M U N I TY B A N K L E N D I N G A N D 

DEPOSIT TAKING DURING THE PANDEMIC

FDIC QUARTERLY 37

data processing expenses—were positively related to PPP lending among community banks 

at or below the median asset size. Averaged across the four technology measures, greater 

technology investment among these smaller banks was associated with an 8 percentage 

point increase in the share of banks holding PPP loans as well as a 1.3 percentage point 

increase in PPP loans as a share of assets relative to those with less technology investment.

Beyond the reasons previously discussed, other reasons unique to the PPP and the 

environment in which it was implemented could explain why technology investment may 

have facilitated faster loan growth. Some possible explanations include limited funding, 

strong demand, and a restricted ability and limited desire for borrowers and lenders to use 

nondigital processes.

Some, but Not All, of the Difference in PPP Lending by Technology Investment Stemmed 

From Larger Loans

At the aggregate level, measuring PPP lending based on PPP loans as a share of assets 

does not fully address whether a community bank served more or different PPP borrowers 

during the pandemic. A smaller loan, for example, had less impact on lending as a share 

of assets than a larger loan, despite affecting the same number of borrowers. Applied to 

the findings above, it could be that community banks with greater previous investment in 

technology reported a greater share of PPP loans because they made larger loans, and not 

because they served more borrowers.

Based on total PPP loan volume and number of PPP loans as reported on the third quarter 

2020 Call Report, the median for average PPP loan size among community banks with greater 

technology investment was, on average across the four measures, about $13,500 greater 

than the median for banks with less technology investment. This difference at least partly 

explains the higher share of PPP lending for banks with greater technology investment.

Further analysis of loan size is not possible using Call Report data; however, the Small 

Business Administration (SBA) released individual loan-level data, which included 

approved loan amounts and identifying lender information.15 Chart 3 uses that data to 

compare PPP lending by previous technology investment, broken down by loan size. The 

largest difference in the average share of PPP loans (by volume) to assets was for PPP loans 

with an initial approved amount of more than $1 million. For loans of this size, community 

15 Several versions of PPP data have been released by the SBA since the program’s inception. This analysis uses data 

downloaded from the SBA website as of February 2021. The SBA data did not include FDIC certificate numbers. Matching 

techniques were used to link individual loans to FDIC-insured institutions, when applicable. See https://data.sba.gov/

dataset/ppp-foia. 

Community Banks That Invested More in Technology Originated a Greater Share of 

PPP Lending for All Loan Size Categories

Sources: FDIC, Small Business Administration, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.

Note: PPP = Paycheck Protection Program. Loan approvals based on initial approved amounts. Approvals as a share of assets by week were

calculated for each measure and then averaged across the four technology investment measures.

Average PPP Loan Volume as a Share of Assets by Loan Size

Percent of Assets

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Less Than 10 10 to 25 25 to 50 50 to 100 100 to 250 250 to 500 500 to 1,000 More Than 1,000

Loan Size (in Thousands of Dollars)

Banks With Less Technology Investment

Banks With Greater Technology Investment

Chart 3
2021   •   Volume 15  • Number 3

38 FDIC QUARTERLY

banks with greater technology investment (indicated by the dark blue bars in Chart 3) 

originated a volume that was 0.35 percentage points higher, as a share of assets, than banks 

with less investment. This finding is consistent with the argument that community banks 

with greater previous investment in technology made larger loans. However, Chart 3 also 

shows that community banks with greater technology investment originated a greater 

share of PPP loans in smaller size categories than did banks with less investment. This 

suggests that banks with greater technology investment made a larger share of loans of all 

sizes through the PPP, and that the association between greater technology investment and 

a higher share of PPP lending did not stem solely from larger loans.

Community Banks With Greater Previous Investment in Technology Also Approved More 

PPP Loans Across Time and Distance

Beyond loan size, community banks with greater investment in technology before the 

pandemic may have been able to originate more PPP loans than did banks with less 

investment because their speed of approval was faster or because they had easier access 

to borrowers outside of their local geographic market and vice versa. Previous technology 

investment may have accelerated the loan approval process to the extent that it allowed 

lenders to accept applications and the required supporting documentation online and 

automated the submission process. On the other hand, the impact of technology investment 

may have been reduced by the unique nature of the PPP, last-minute changes to SBA policy, 

and reports of difficulties connecting with E-Tran, the SBA’s loan servicing portal.

Speed of approval may have been particularly important for PPP borrowers, given that 

funding for the program, while unprecedented in size, was ultimately limited by borrower 

demand. The first round of funding—$342 billion—was exhausted within two weeks. The 

second round of funding—$317 billion—remained available for almost 15 weeks (see box 

below). The PPP’s limited funding and time frame arguably gave an advantage to financial 

institutions with a faster approval process.

As indicated by the sizes of the dark blue and light blue bars in Chart 4, the gap in PPP 

loan volume as a share of assets was largest during the early weeks of the program, with 

community banks that invested more in technology before the pandemic approving a larger 

share of loans than did banks with less investment. While this does not necessarily indicate 

a difference in approval times, the largest difference in the share of PPP loans by volume 

in favor of banks with greater technology investment occurred during the first week of the 

program. During that week, PPP loans as a share of assets was 25 percent higher for those 

banks with higher technology investment than for banks with less technology investment. 

This difference was larger than in any other week during which more than 1 percent 

of loans were approved, and provides some evidence that banks with greater previous 

investment in technology were faster out of the gate in approving PPP loans.

The Paycheck Protection Program in 2020

In the first months of the pandemic, Congress provided $659 billion to the U.S. Small Business Administration (SBA) to 

guarantee loans to small businesses to pay up to 24 weeks of eligible employee salaries, payroll costs, and benefits, as 

well as other qualified expenses such as mortgage interest, rent, and utilities, and to pay banks for the forgiven loans and 

accrued interest. Lenders received an origination fee of 1 to 5 percent, depending upon the size of the loan.

Applications for the first round of funding were accepted from April 3, 2020, through April 16, 2020, and for the second 

round of funding from April 27, 2020, through August 8, 2020. During both rounds, more than 5.2 million loans were 

approved for a total of $525 billion.a

a SBA, “PPP Report: Approvals Through 08/08/2020,” (August 2020).
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DEPOSIT TAKING DURING THE PANDEMIC

FDIC QUARTERLY 39

0.0

2.0

4.0

6.0

8.0

10.0

Banks With Less Technology Investment Banks With Greater Technology Investment

The Advantage in PPP Lending for Community Banks That Invested More in

Technology Was Most Relevant During the Early Weeks of the Program

Sources: FDIC, Small Business Administration, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.

Note: PPP = Paycheck Protection Program. Loan approvals based on initial approved amounts. Approvals as a share of assets by week were

calculated for each measure and then averaged across the four technology investment measures. Times exclude a period of 11 days following the 

conclusion of the first round and before the beginning of the second round of the program.

Average PPP Loan Volume as a Share of Assets by Week

Percent of Assets

Beyond Week 3

Week 3

Week 2

Week 1

Chart 4

The difference in PPP lending in favor of community banks with greater technology 

investment was not limited to the early weeks of the program, however. Throughout all but 

one week of the program, community banks with greater technology investment originated 

more PPP loans when measured as a share of their assets than did community banks with 

less investment. Similar to the findings for loan size, speed of approval was not likely 

the only reason why community banks with greater technology investment originated a 

greater share of PPP lending.

Another way in which technology may have aided community banks is through easier 

access to PPP borrowers outside of their geographic market. Some community banks, 

regardless of previous technology investment, may have viewed the PPP as a low-risk 

opportunity to test and develop new lending relationships outside of their market area, 

given that the loans were fully guaranteed by the SBA. Greater previous investment 

in technology, however, may have helped these banks better reach and target new 

customers—for example, through social media as well as marketing using data and 

machine learning. Technology-enabled services, such as online loan applications and 

servicing portals and chatbots, may have also allowed customers that were located far from 

a branch to more easily apply for a loan and navigate the loan process.

The same SBA data used to analyze the size and timing of PPP loans also included data 

on borrowers, which was used to approximate the distance between PPP borrowers and 

their lenders.16 As shown in Figure 1, the share of PPP loans originated by community 

banks for borrowers located more than 100 miles from a bank branch was higher for banks 

with greater technology investment than for those with less technology investment, 

as expected. However, the largest difference in PPP lending on the basis of technology 

investment was for “local” PPP loans—loans made to borrowers located within five miles 

of a bank branch. Community banks with greater technology investment approved local 

PPP loans totaling 4.5 percent of their assets, on average, compared with an average of 

3.7 percent for banks with less technology investment. For a community bank with the 

median asset size of $216 million, this difference of 0.8 percent of assets equaled about 

$1.7 million in PPP loans.

16 Data on the latitude and longitude of PPP borrowers were obtained from Geocodio and are available at 

https://www.geocod.io/geocoded-ppp-loan-data/. These data were used to calculate the distance from each borrower 

to the nearest branch of the community bank lender, using the latitude and longitude of bank branches from FDIC 

Summary of Deposits data. 
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40 FDIC QUARTERLY

Community Banks That Invested More in Technology Originated a Greater Share of

PPP Loans Regardless of a Borrower’s Proximity to a Bank Branch

Sources: FDIC, Small Business Administration, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.

Note: PPP = Paycheck Protection Program. Loan approvals based on initial approved amounts. Approvals as a share of assets were calculated for 

each measure and then averaged across the four technology investment measures.

Average PPP Loan Volume as a Share of Assets by Distance From Borrower to Lender

Percent of Assets

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Banks With Less Technology Investment Banks With Greater Technology Investment

Distance From Borrower to Lender (Nearest Branch)

2 Miles 5 Miles 10 Miles 25 Miles 100 Miles

Figure 1

Generally, community banks made most of their PPP loans to borrowers within five miles 

of their branch network consistent with research indicating that local bank relationships 

strongly predicted PPP credit.17 Table 2 examines how technology may have differently 

affected community banks that entered the pandemic with relatively larger shares of 

commercial and industrial (C&I) loans—a likely indicator of strong existing relationships 

with local businesses. For banks with C&I loans at or above the 75th percentile (highest 

quartile) for all established community banks at the end of 2019, the difference in local 

PPP loans to assets on the basis of technology investment was 1.1 percentage points. For 

banks with C&I loans at or below the 25th percentile (lowest quartile), the difference was 

0.6 percentage points. The larger difference in local PPP lending by technology investment 

among banks with larger shares of C&I loans leading into the pandemic suggests that 

greater previous investment in technology may have contributed to additional PPP lending, 

in part, by facilitating loans to existing borrowers.

Overall, several factors likely drove the relationship between PPP lending and technology 

investment before the pandemic in favor of community banks with greater investment. 

Community banks with greater technology investment made larger PPP loans, but also 

made more PPP loans of all sizes, during all stages of the program, and both inside and 

outside of their local geographic market.

The Advantage in PPP Lending Associated With Greater Investment in Technology Was Higher for Community Banks 

With More Business Loans

C&I Loans to Assets

Previous Technology Investment

Banks With Less Investment Banks With Greater Investment

Banks in Lowest Quartile 3.3 % 3.9 %

Banks in Highest Quartile 4.4 % 5.5 %

All Community Banks 3.7 % 4.5 %

Sources: FDIC, Small Business Administration, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.

Note: PPP = Paycheck Protection Program. C&I = Commercial and Industrial. Local PPP loans defined as PPP loans made to borrowers located within five miles of a lending 

bank branch. C&I loans to assets based on amounts reported at the end of 2019, before the onset of the pandemic. Loan approvals based on initial approved amounts. 

Approvals as a share of assets were calculated for each measure and averaged across the four technology investment measures.

Table 2

17 Lei Li and Philip Strahan, “Who Supplies PPP Loans (And Does it Matter)? Banks, Relationships, and the 

COVID Crisis,” (Working Paper, no. 28286, National Bureau of Economic Research, December 2020), 

https://www.nber.org/papers/w28286. 
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DEPOSIT TAKING DURING THE PANDEMIC

FDIC QUARTERLY 41

Community Banks With Greater Technology Investment Before the Pandemic Reported 

Larger Deposit Growth in 2020

Bank deposits increased significantly at the onset of the pandemic, growing 17.8 percent 

over the first three quarters of 2020. Among community banks, deposits grew 11.4 percent. 

This growth likely stemmed from multiple factors such as lower consumption and higher 

savings by consumers, credit line drawdowns, expansionary monetary policy, and 

increased spending by the federal government, including direct payments to individuals. 

The PPP also likely influenced deposit growth to the extent that borrowers (and others 

for whom the loan proceeds were intended, including employees) directed loan funds into 

deposit accounts.

Previous investment in technology might have affected deposit growth during the 

pandemic to the extent that it facilitated remote deposit capture, remote payments, and 

other functionality that enabled customers to conduct deposit transactions at a time when 

face-to-face interactions were more difficult or not possible. If technology investment 

attracted more PPP borrowers, as previously indicated, faster deposit growth may also 

have resulted from those borrowers depositing the proceeds of the loan into the same 

institution.

0.0

1.0

2.0

3.0

4.0

5.0

Deposit Growth Before and During the Pandemic by Technology Investment

Sources: FDIC, Aberdeen Technology Data Cloud, and Conference of State Bank Supervisors.

Note: PCs stands for personal computers.

Median Average Loan Growth by Previous Technology Investment

Percent

IT Spending

to Assets

Number of

PCs per

Employee

Average Growth in

Data Processing

Expenses

Number of

Adopted

Technologies

2017–2019 2020 2017–2019 2020 2017–2019 2020 2017–2019 2020

Lowest Quartile

Highest Quartile

0–3 Technologies

4–7 Technologies

Chart 5

As shown by the differences between the light blue and dark blue bars and the difference 

between the dark red and dotted blue bars in Chart 5, during the three years before the 

pandemic, greater technology investment was associated with higher average deposit 

growth across all four measures. The differences ranged in magnitude from 0.11 percentage 

points (for IT spending to assets) to 0.60 percentage points (for number of PCs per 

employee), with an average of 0.38 percentage points across the four measures. In 2020, 

differences in the median for average deposit growth widened for three out of the four 

technology investment measures. Averaged across the measures, community banks with 

greater previous investment in technology reported a median average deposit growth 

that was 0.66 percentage points higher than the median for banks with less previous 

investment.

The larger difference in deposit growth by previous technology investment for 2020 

likely stemmed from higher average account sizes rather than an increase in the number 

of accounts. Median growth in the number of nonretirement deposit accounts was, on 

average, 31 basis points higher for community banks with greater technology investment 

than for banks with less technology investment, from 2017 to 2019. During 2020, the 

difference declined to 23 basis points, indicating that the increased difference in deposit 

growth on the basis of technology investment reported during the pandemic was not likely 

caused by an increased inflow of depositors.
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42 FDIC QUARTERLY

Technology Will Continue 

to Be Important to 

Community Banks 

Beyond the Pandemic

 This article provides compelling evidence that community banks with more technology 

investment before the pandemic were better able to serve their customers as a lender and 

deposit-taker amid the challenges of the pandemic. Further data and research are needed to 

better understand the ways that technology may have assisted banks during the pandemic, 

and whether the advantage in loan and deposit growth enjoyed by community banks that 

invested more in technology during 2020 will become part of the new normal. Differences 

in loan growth and potentially deposit growth can be sustained if new relationships created 

through the PPP lead to non-PPP lending and deposits after the pandemic. Given the rising 

use of digital banking channels before and during the pandemic, it appears likely that an 

effective approach to technology and technology investment will continue to be important 

for community banks in the future.

Author:

Daniel Hoople

Financial Economist

Division of Insurance and Research