Donald E. Powell, Chairman 

Second Quarter 2002 

Division of Insurance 

& Research 

Don Inscoe 

Associate Director 

Statistics Branch 

(202) 898-3940 

Kevin Brown 

(202) 898-6817 

Tim Critchfield 

(202) 898-8557 

Ross Waldrop 

(202) 898-3951 

Jim McFadyen 

1946–2002 

COMMERCIAL BANK PERFORMANCE – SECOND QUARTER 2002 

n Earnings Climb To Record-High $23.4 Billion 

n Higher Noninterest Income, Nonrecurring Gains Lift Profits 

n Asset Growth Sets Quarterly Record 

n Net Interest Margins Improve At Community Banks 

n Troubled Commercial & Industrial Loans Continue To Rise 

Improved Profitability Is Widespread 

Continued strength in consumer loan demand, 

plus a favorable interest-rate environment outweighed the negative effects of weakness in commercial loans for banks in the second quarter of 

2002. Commercial banks’ earnings rose to $23.4 

billion in the second quarter, eclipsing the quarterly earnings record of $21.7 billion that was set in 

the first quarter by $1.7 billion (7.8 percent). 

Improved noninterest income, lower provisions for 

loan losses, increased gains from securities sales, 

and relatively low growth in noninterest expenses 

all contributed to the earnings record. Secondquarter earnings were $4.3 billion (22.7 percent) 

higher than in the same quarter of last year.1 Net 

interest income was $5.6 billion (10.6 percent) 

higher than a year ago, noninterest income was up 

by $3.5 billion (8.9 percent), and gains from securities sales and other extraordinary items added 

$283 million (51.3 percent) more to after-tax earnINDUSTRY EARNINGS CONTINUE 

TO EXHIBIT STRENGTH 

$ Billions 

30 

Securities and Other Gains/Losses, Net 

25 Net Operating Income 

19.5 19.3 19.4 19.8 19.1 

23.4 

21.7 

20 18.5 18.0 17.7 17.6 17.4 16.9 15.9 16.1 14.6 15.1 14.8 15 

10 

5 

0 

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

1998 1999 2000 2001 2002 

COMMUNITY BANKS’ MARGINS SHOW 

IMPROVEMENT 

Net Interest Margin (%) 

5.0 

4.5 

4.0 

3.5 

1234 

1998 

Assets < $100 Million 

4.40 

4.10 

Assets > $100 Million 

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

1999 2000 2001 2002 

ings. While the industry’s loan-loss provisions 

were $688 million (6.0 percent) below the level of 

the first quarter, they were still $2.0 billion (22.8 

percent) more than in the second quarter of 2001, 

limiting the year-to-year improvement in net 

income. The average return on assets (ROA) rose 

to 1.41 percent in the second quarter, matching 

the all-time high reached in the third quarter of 

1999. The industry’s ROA was 1.33 percent in the 

first quarter and 1.21 percent in the second quarter of 2001. Almost two out of every three commercial banks (62.8 percent) reported an ROA of 

1 percent or higher in the second quarter, and a 

similar proportion (62.1 percent) reported a higher 

quarterly ROA than a year ago. 

1 Year-to-year increases in the number and size of directly-owned 

subsidiary banks accounted for $269 million of the increase in 

net income. See Computation Methodology, p.21. 

Requests for copies of and subscriptions to the FDIC Quarterly Banking Profile should be made through the FDIC’s Public 

Information Center, 801 17th Street, NW, Washington, DC 20434; telephone (202) 416-6940 or (800) 276-6003; or Email: publicinfo@fdic.gov. 

Also available on the Internet at www.fdic.gov. Comparable financial data for individual institutions can now be obtained from 

the FDIC’s Institution Directory (I.D.) System on this Web site. 
Diversification Is Evident In Banking Profits 

A combination of strength in both transaction-based 

revenues and market-sensitive revenues contributed 

to the improvement in noninterest income. Higher 

securitization income at credit-card lenders, continued 

growth in service charges on deposit accounts, and 

increased income from trading activities were the main 

areas of strength. Income from securitization activities 

totaled $4.6 billion, an increase of $941 million (25.4 

percent) over the second quarter of 2001. Service 

charges on deposit accounts added $7.5 billion to noninterest revenues, $710 million (10.5 percent) more 

than a year earlier. Trading revenue was $656 million 

(24.2 percent) higher. Higher net interest income (up 

$5.6 billion, or 10.6 percent) was partly the result of 

wider net interest margins in a more favorable interestrate environment. The overall low level of interest 

rates contributed to loan growth, while the steep yield 

curve helped net interest margins. The industry’s net 

interest margin of 4.11 percent was 8 basis points 

lower than in the first quarter, but was 21 basis points 

above the level of 2001’s second quarter. After four 

successive quarters of no improvement, average margins at commercial banks with less than $100 million in 

assets rose for the first time in two years, increasing by 

14 basis points, to 4.40 percent, from 4.26 percent in 

both the first quarter and in the second quarter of 2001. 

Favorable Rate Environment Helps 

Year-To-Year Comparisons 

In the first six months of 2002, commercial banks 

earned $45.3 billion, a $6.5-billion (16.7 percent) 

improvement over their performance in the first half of 

2001. The industry’s six-month ROA was 1.37 percent, up from 1.23 percent a year earlier. A majority of 

banks – 59.8 percent – reported higher ROAs in the 

first half of 2002, compared to the same period in 

2001, and more than two out of three banks (68.9 percent) reported higher net income. One of the main 

contributions to the earnings improvement came from 

net interest income, which was up by $12.8 billion 

(12.2 percent). A more favorable interest rate environment helped lift net interest margins in the first six 

months of 2002. The average margin was 4.13 percent, compared to 3.86 percent a year earlier. 

Increased noninterest income also contributed to the 

higher earnings. Noninterest revenues were $5.2 billion (6.5 percent) more than in the first half of 2001. 

Service charges on deposit accounts were up by $1.6 

billion (12.4 percent), and securitization income was 

$2.0 billion (27.5 percent) higher. The improvement in 

earnings was limited by a $5.6-billion (33.7-percent) 

increase in provisions for loan losses. More than onefourth of this increase ($1.6 billion, or 27.5 percent) 

was attributable to higher provisions for credit losses in 

banks’ foreign operations. Even with these increased 

credit expenses, net income from international operations was down by only $44 million (1.2 percent), compared to the first half of 2001. 

Commercial Loans Still Lead A Rising Trend 

In Charge-Offs 

The quarter’s net charge-offs of $10.6 billion were $2.6 

billion (33.1 percent) higher than a year earlier. 

Commercial and industrial (C&I) loans registered the 

largest increase; charge-offs were up by $1.1 billion 

(34.6 percent), as net losses on C&I loans to non-U.S. 

borrowers increased by $405 million (206 percent). 

Other loan categories had smaller increases in net 

charge-offs. Credit-card charge-offs were $894 million 

(31.6 percent) above the level of a year ago, and 

charge-offs on other consumer loans were $256 million (24.7 percent) higher. Net charge-offs on leases 

increased by $200 million (89.3 percent). 

$ Billions 

35 

30 

25 

4.2 

20 

15 

10 

26.9 

5 

0 

1 2 3 4 

1997 

1 2 3 4 

1998 

1 2 3 4 

1999 

1 2 3 4 

2000 

1 2 3 4 

2001 

12 

2002 

Credit Quality Of Domestic C&I Loans 

Shows Positive Signs 

31.1 

7.4 

Quarterly Net Charge-offs 

Noncurrent Loans 

TROUBLED C&I LOANS ARE STILL GROWING 

Growth in noncurrent loans (loans 90 days or more 

past due or in nonaccrual status) slowed for the second consecutive quarter. Total noncurrent loans 

increased by only $1.3 billion, the smallest quarterly 

increase since the fourth quarter of 1999, and would 

have declined but for a $1.7-billion (41.2 percent) jump 

in noncurrent loans to non-U.S. C&I borrowers. 

Noncurrent loans to domestic C&I borrowers declined 

for the first time since the second quarter of 1998, 

falling by $79.4 million (0.4 percent). After rising by 

$294 million in the first quarter, noncurrent loans to 

foreign governments and official institutions increased 

by an additional $119 million (36.6 percent) in the second quarter. The percentage of commercial banks’ 

total loans that were noncurrent remained unchanged 

at 1.47 percent, marking the first time since the fourth 

quarter of 1999 that the industry’s noncurrent rate did 

not increase. 

Reserves Fall, Equity Grows 

Commercial banks’ reserves for loan losses fell by 

$756 million in the second quarter, the first time in 

three years (since the second quarter of 1999) that 

FDIC Quarterly Banking Profile 

FDIC-Insured Commercial Banks 2 Second Quarter 2002 
CREDIT CARD LOSSES REMAIN HIGH 

Net Charge-off Rate (%) Number of Bankruptcy Filings (Thousands) 

9 

Credit Card Charge-Off Rates 

Personal 

Bankruptcy 

Filings 

400 

391 

8 

350 

7 

300 

6 5.98 

250 5 

4 200 

3 

150 

2 

100 1 

0 50 

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 

reserves have declined. In contrast, equity capital registered fairly robust growth, rising by $19.4 billion (3.2 

percent), with retained earnings and accumulated 

comprehensive income2 contributing almost equal 

shares ($9.3 billion and $9.7 billion, respectively) of the 

increase. A substantial increase in assets caused the 

industry’s equity-capital-to-assets ratio to dip slightly 

during the quarter, from the 61-year high of 9.30 percent to 9.24 percent. 

Surge In Refinancing Helps Propel Industry 

Growth 

Total assets increased by $245.3 billion (3.8 percent) 

in the second quarter, after declining by $64.8 billion in 

the first quarter. This is the largest quarterly increase 

in industry assets on record, surpassing the $222.1-billion increase posted by the industry in the fourth quarter of 1999. Total loans and leases grew by $78.2 

billion (2.0 percent) during the quarter. Assets in trading accounts increased by $66.4 billion (21.1 percent), 

as revaluation gains grew by $35.1 billion. Foreign 

office assets increased by $71.4 billion (9.7 percent). 

SMALL-BUSINESS LOANS GREW SLOWLY, WHILE 

LARGE BUSINESS LENDING CONTRACTED 

$ Billions 

800 

600 

400 

200 

0 

477.5 

547.4 

629.4 611.1 

531.4 

200.7 212 232.5 243.4 250.9 

Small Businesses (Original loan amounts < $1 Million) 

Medium/Large Businesses 

(Original loan amounts > $1 Million) 

1998 1999 2000 2001 2002 

Reflecting the continued strength in mortgage refinancing activity, banks’ holdings of mortgage-backed 

securities increased by $45.4 billion (7.4 percent), 

while their residential mortgage loans rose by $30.5 

billion (3.8 percent). During the 12 months ending 

June 30, commercial banks’ mortgage-backed securities grew by $152.7 billion (30.0 percent). Home equity loans continued to exhibit strong growth, rising by 

$21.8 billion (13.1 percent) in the quarter. C&I loans 

declined for the sixth consecutive quarter, falling by 

$27.4 billion (2.8 percent). The industry’s C&I loan 

portfolio is now $113.3 billion (10.8 percent) below its 

peak level at the end of 2000. Annual data on C&I 

loans to small businesses show that during the 12 

months ending June 30, these loans increased by $7.5 

billion (3.1 percent), while larger C&I loans fell by 

$79.7 billion (13.0 percent). 

Savings Deposit Growth Slows, But 

Remains Strong 

The largest share of funding for the increase in bank 

assets came from savings deposits, which grew by 

$50.9 billion (2.6 percent). Over the past 12 months, 

savings deposits have increased by $325.4 billion 

(19.2 percent). Deposits in foreign offices ended a 

string of three consecutive quarterly declines, rising by 

$37.4 billion (6.2 percent) in the second quarter. 

Short-term nondeposit borrowings were another significant contributor to commercial bank funding. Other 

borrowed money with a remaining maturity of less than 

one year increased by $35.6 billion (12.4 percent). 

Banks increased their borrowings from Federal Home 

Loan Banks by $13.7 billion during the quarter, with all 

of the growth occurring in longer-term (over 1 year) 

borrowings. Trading liabilities jumped by $46.4 billion 

(26.1 percent), as revaluation losses on derivatives 

contracts increased by $43.5 billion (43.6 percent). 

Brokered deposits fell by $1.2 billion (0.5 percent) during the quarter, only the second time in the last 14 

quarters that these deposits have decreased. 

Number Of Insured Commercial Banks Falls 

Below 8,000 

The number of insured commercial banks reporting 

financial results declined from 8,005 to 7966 during the 

second quarter. One insured commercial bank failed 

during the quarter, while 66 were absorbed in mergers 

with other institutions. There were 26 new banks 

reporting financial results. The number of commercial 

banks on the FDIC’s “Problem List” increased from 

102 to 115 during the quarter, but assets of “problem” 

banks declined from $36.7 billion to $35.9 billion. 

2 Accumulated comprehensive income includes net unrealized 

gains/losses on available-for-sale securities, accumulated net 

gains/losses on cash flow hedges, cumulative foreign currency translation adjustments, and minimum pension liability adjustments. 

FDIC Quarterly Banking Profile 

Second Quarter 2002 3 FDIC-Insured Commercial Banks 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE I-A. Selected Indicators, FDIC-Insured Commercial Banks 

2002* 2001* 2001 2000 1999 1998 1997 

Return on assets (%)............................................. 1.37 1.23 1.15 1.19 1.31 1.19 1.23 

Return on equity (%)............................................. 14.85 14.24 13.05 14.02 15.31 13.93 14.68 

Core capital (leverage) ratio (%).............................. 8.00 7.73 7.79 7.70 7.79 7.54 7.56 

Noncurrent assets plus 

other real estate owned to assets (%)..................... 0.96 0.82 0.92 0.74 0.63 0.65 0.66 

Net charge-offs to loans (%).................................... 1.10 0.78 0.95 0.67 0.61 0.67 0.64 

Asset growth rate (%)............................................. 6.13 6.29 5.20 8.88 5.38 8.53 9.54 

Net interest margin (%).......................................... 4.13 3.86 3.90 3.95 4.07 4.07 4.21 

Net operating income growth (%)........................... 16.73 6.52 -1.97 1.80 20.42 2.26 12.42 

Number of institutions reporting.............................. 7,966 8,178 8,080 8,315 8,579 8,773 9,142 

Percentage of unprofitable institutions (%).................. 6.24 7.23 8.09 7.34 7.51 6.11 4.85 

Number of problem institutions................................. 115 80 95 76 66 69 71 

Assets of problem institutions (in billions).................. $36 $17 $36 $17 $4 $5 $5 

Number of failed/assisted institutions........................ 7 2 3 6 7 3 1 

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

TABLE II-A. Aggregate Condition and Income Data, FDIC-Insured Commercial Banks 

(dollar figures in millions) 

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

Preliminary 

2nd Quarter 1st Quarter 2nd Quarter %Change 

2002 2002 2001 01:2-02:2 

7,966 8,005 8,178 -2.6 

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

CONDITION DATA

1,738,770 1,722,882 1,690,443 2.9 

 Total assets..................................................................... $6,749,662 $6,504,315 $6,360,020 6.1

 Loans secured by real estate............................................. 1,886,961 1,811,380 1,736,990 8.6

 Commercial & industrial loans.......................................... 938,726 966,125 1,027,834 -8.7

 Loans to individuals...................................................... 662,454 649,136 610,682 8.5

 Farm loans.................................................................. 47,647 45,083 49,070 -2.9

 Other loans & leases...................................................... 439,578 425,419 437,194 0.5

 Less: Unearned income................................................... 3,830 3,845 2,768 38.4

 Total loans & leases......................................................... 3,971,537 3,893,297 3,859,003 2.9

 Less: Reserve for losses................................................... 74,325 75,081 65,757 13.0

 Net loans and leases......................................................... 3,897,212 3,818,216 3,793,246 2.7

 Securities........................................................................ 1,237,108 1,185,937 1,056,279 17.1

 Other real estate owned................................................... 3,874 3,810 3,204 20.9

 Goodwill and other intangibles............................................. 129,568 131,798 103,447 25.3

 All other assets............................................................... 1,481,900 1,364,548 1,403,843 5.6 

Total liabilities and capital................................................... 6,749,662 6,504,315 6,360,020 6.1

 Noninterest-bearing deposits............................................. 826,577 805,421 753,533 9.7

 Interest-bearing deposits.................................................. 3,621,321 3,546,787 3,491,194 3.7

 Other borrowed funds...................................................... 1,191,061 1,136,083 1,135,921 4.9

 Subordinated debt............................................................ 93,716 92,983 89,580 4.6

 All other liabilities............................................................ 392,993 318,493 332,689 18.1

 Equity capital.................................................................. 623,994 604,551 557,102 12.0 

Loans and leases 30-89 days past due................................. 46,528 49,057 46,778 -0.5 

Noncurrent loans and leases................................................ 58,424 57,100 48,684 20.0 

Restructured loans and leases............................................. 1,637 1,871 1,004 63.0 

Direct and indirect investments in real estate........................... 270 259 267 0.9 

1-4 Family residential mortgages.......................................... 1,012,887 960,565 943,806 7.3 

Mortgage-backed securities................................................ 661,372 615,947 508,638 30.0 

Earning assets.................................................................. 5,796,777 5,619,535 5,478,426 5.8 

Long-term assets (5+ years)................................................ 1,397,859 1,324,901 1,241,881 12.6 

Volatile liabilities............................................................... 2,128,517 2,043,698 2,157,858 -1.4 

Foreign office deposits...................................................... 640,905 603,522 682,411 -6.1 

FHLB Advances............................................................... 217,801 204,058 184,098 18.3 

Unused loan commitments................................................... 5,183,234 5,066,653 4,646,279 11.6 

Derivatives..................................................................... 50,577,822 46,508,825 48,212,888 4.9 

INCOME DATA 

Total interest income......................................... 

Total interest expense......................................... 

 Net interest income.......................................... 

Provision for loan and lease losses........................ 

Total noninterest income.................................... 

Total noninterest expense.................................... 

Securities gains (losses).................................... 

Applicable income taxes..................................... 

Extraordinary gains, net....................................... 

 Net income................................................... 

Net charge-offs................................................... 

Cash dividends.................................................. 

 Net operating income....................................... 

Preliminary Preliminary 

First Half First Half 2nd Quarter 2nd Quarter %Change 

2002 2001 %Change 2002 2001 01:2-02:2 

$179,782 $213,515 -15.8 $90,405 $104,315 -13.3 

62,158 108,695 -42.8 31,562 51,113 -38.3

117,624 104,820 12.2 58,843 53,202 10.6 

22,432 16,782 33.7 10,861 8,847 22.8 

84,184 79,029 6.5 42,541 39,050 8.9 

113,396 110,026 3.1 57,035 55,202 3.3 

1,718 2,031 -15.4 1,008 861 17.1 

22,431 19,890 12.8 11,216 9,951 12.7 

39 -350 N/M 159 -17 N/M

45,305 38,831 16.7 23,440 19,097 22.7 

21,636 14,887 45.3 10,561 7,934 33.1 

33,901 25,893 30.9 14,169 12,519 13.2

44,102 37,780 16.7 22,605 18,545 21.9 

N/M - Not meaningful 

FDIC Quarterly Banking Profile 

FDIC-Insured Commercial Banks 4 Second Quarter 2002 
 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE III-A. First Half 2002, FDIC-Insured Commercial Banks 

FIRST HALF Preliminary 

(The way it is...) 

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

All 

Institutions 

Asset Size Distribution Geographic Distribution by Region 

Less $100 Million $1 Billion Greater 

than $100 to to than $10 

Million $1 Billion $10 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- Southwest west West 

7,966 4,374 3,194 320 78 634 1,371 1,708 2,074 1,315 864 

Total assets (in billions).................................... $6,749.7 $219.6 $831.5 $935.2 $4,763.4 $2,323.3 $1,658.6 $1,379.0 $377.0 $280.1 $731.8 

Total deposits (in billions).................................... 4,448.1 185.2 677.7 638.6 2,946.7 1,457.1 1,126.1 882.0 253.5 227.9 501.6 

Net income (in millions)....................................... 45,305 1,135 5,106 6,798 32,265 13,679 11,448 9,268 3,080 1,823 6,007 

% of unprofitable institutions.............................. 6.2 9.5 2.4 1.6 2.6 9.9 8.5 4.5 4.1 4.9 10.5 

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

Performance ratios (annualized, %) 

68.9 63.3 75.9 75.3 76.9 70.5 74.8 72.5 66.8 64.7 63.1 

Yield on earning assets.................................... 6.32 6.84 6.85 6.51 6.15 6.18 6.22 6.10 7.27 6.49 6.78 

Cost of funding earning assets........................... 2.18 2.52 2.41 2.18 2.12 2.38 2.14 2.23 2.20 2.00 1.68 

Net interest margin.......................................... 4.13 4.32 4.44 4.32 4.03 3.80 4.09 3.87 5.07 4.49 5.11 

Noninterest income to earning assets.................. 2.96 1.22 1.64 2.66 3.36 3.85 2.66 2.20 3.04 1.64 2.86 

Noninterest expense to earning assets.................. 3.99 3.79 3.78 3.95 4.04 4.41 3.89 3.28 4.44 3.80 4.10 

Loan and lease loss provision to assets............... 0.68 0.27 0.35 0.54 0.78 0.91 0.42 0.54 0.94 0.31 0.79 

Net operating income to assets........................... 1.33 1.03 1.25 1.45 1.33 1.17 1.36 1.30 1.63 1.29 1.67 

Pretax return on assets.............................. 2.04 1.36 1.76 2.22 2.09 1.82 2.08 2.02 2.41 1.82 2.63 

Return on assets............................................. 1.37 1.05 1.26 1.48 1.38 1.21 1.40 1.36 1.65 1.32 1.67 

Return on equity................................................ 14.85 9.55 12.89 14.69 15.57 13.90 14.73 15.89 16.51 13.53 15.65 

Net charge-offs to loans and leases..................... 1.10 0.28 0.37 0.82 1.34 1.75 0.65 0.80 1.33 0.37 1.17 

Loan and lease loss provision to net charge-offs...... 103.68 156.82 144.97 105.31 100.73 102.01 104.61 102.50 104.48 144.72 105.35 

Efficiency ratio................................................ 

Condition Ratios (%) 

55.03 68.19 61.85 55.65 53.35 56.46 56.27 53.04 53.19 61.44 50.60 

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

Loss allowance to: 

85.88 91.58 91.47 90.00 83.84 82.85 85.60 88.10 90.45 89.91 88.08 

Loans and leases.......................................... 1.87 1.44 1.45 1.81 1.99 2.25 1.58 1.75 1.77 1.51 1.98 

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

Noncurrent assets plus 

127.22 123.08 151.26 173.24 118.51 111.11 133.85 119.70 159.30 145.90 179.68 

other real estate owned to assets..................... 0.96 0.88 0.75 0.73 1.04 1.12 0.81 1.04 0.84 0.73 0.78 

Equity capital ratio............................................. 9.24 11.12 9.91 10.29 8.84 8.64 9.50 8.66 10.31 10.02 10.84 

Core capital (leverage) ratio................................. 8.00 10.72 9.33 9.06 7.42 7.48 7.93 7.81 9.39 8.79 9.15 

Tier 1 risk-based capital ratio.............................. 10.14 15.88 13.04 12.45 9.05 9.95 9.61 9.33 12.55 12.92 11.40 

Total risk-based capital ratio.............................. 12.95 16.99 14.24 14.37 12.33 12.98 12.48 12.42 13.90 14.37 14.02 

Net loans and leases to deposits........................ 

Structural Changes (YTD) 

87.61 72.37 78.92 89.10 90.25 77.62 89.51 99.87 99.70 70.82 92.34 

New Charters................................................ 42 41 1 0 0 6 12 3 5 4 12 

Banks absorbed by mergers.............................. 152 63 73 12 4 18 39 20 25 26 24 

Failed banks................................................ 

PRIOR FIRST HALVES

 (The way it was...) 

7 4 2 1 0 1 2 2 0 1 1 

Number of institutions................................2001 8,178 4,685 3,101 313 79 653 1,413 1,744 2,118 1,356 894

 ...............................................1999 8,673 5,301 2,978 317 77 684 1,439 1,880 2,243 1,485 942

 ...............................................1997 9,308 6,047 2,888 306 67 738 1,543 2,048 2,357 1,648 974 

Total assets (in billions).............................2001 $6,360.0 $227.9 $789.8 $899.6 $4,442.6 $2,233.6 $1,612.5 $1,144.2 $406.9 $264.2 $698.6

 ................................................1999 5,468.6 246.9 736.6 872.7 3,612.3 1,910.4 1,233.1 901.7 374.6 304.3 744.5

 ................................................1997 4,771.4 273.5 711.3 916.0 2,870.6 1,810.7 855.1 795.9 289.3 342.1 678.4 

Return on assets (%)................................2001 1.23 0.98 1.24 1.32 1.22 1.18 1.21 1.05 1.32 1.17 1.73

 ................................................1999 1.28 1.08 1.38 1.56 1.21 1.15 1.27 1.31 1.56 1.18 1.50

 ................................................1997 

Net charge-offs to loans & leases (%) 

1.24 1.24 1.36 1.25 1.21 1.16 1.29 1.26 1.45 1.24 1.31 

 ................................................2001 0.78 0.23 0.33 0.84 0.88 0.92 0.59 0.60 0.94 0.36 1.21

 ................................................1999 0.58 0.21 0.33 0.74 0.62 0.75 0.44 0.35 0.71 0.42 0.72

 ................................................1997 

Noncurrent assets plus 

0.60 0.21 0.35 0.99 0.55 0.69 0.43 0.44 0.79 0.30 0.83 

OREO to assets (%)..............................2001 0.82 0.79 0.69 0.73 0.87 0.81 0.88 0.86 0.75 0.70 0.76

 ................................................1999 0.64 0.75 0.61 0.62 0.65 0.73 0.57 0.58 0.61 0.66 0.63

 ................................................1997 0.69 0.79 0.72 0.82 0.64 0.75 0.61 0.62 0.69 0.60 0.79 

Equity capital ratio (%)..............................2001 8.76 11.13 9.80 9.50 8.30 8.14 9.13 8.10 9.84 9.68 9.99

 ................................................1999 8.52 10.82 9.41 9.53 7.94 7.83 8.89 8.36 8.72 8.72 9.72

 ................................................1997 8.44 10.84 9.69 9.14 7.68 7.38 8.93 8.56 9.21 9.54 9.66 

REGIONS: Northeast - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, 

Rhode Island, Vermont, U.S. Virgin Islands

 Southeast - Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia

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

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

 Southwest - Arkansas, Louisiana, New Mexico, Oklahoma, Texas

 West - Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming 

FDIC Quarterly Banking Profile 

Second Quarter 2002 5 FDIC-Insured Commercial Banks 
 

 

 

 

 

TABLE IV-A. Second Quarter 2002, FDIC-Insured Commercial Banks 

SECOND QUARTER Preliminary 

(The way it is...) 

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

All 

Institutions 

Asset Size Distribution Geographic Distribution by Region 

Less $100 Million $1 Billion Greater 

than $100 to to than $10 

Million $1 Billion $10 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- South 

west west West 

7,966 4,374 3,194 320 78 634 1,371 1,708 2,074 1,315 864 

Total assets (in billions).................................... $6,749.7 $219.6 $831.5 $935.2 $4,763.4 $2,323.3 $1,658.6 $1,379.0 $377.0 $280.1 $731.8 

Total deposits (in billions).................................... 4,448.1 185.2 677.7 638.6 2,946.7 1,457.1 1,126.1 882.0 253.5 227.9 501.6 

Net income (in millions)....................................... 23,440 595 2,669 3,407 16,769 7,178 5,845 4,722 1,573 961 3,161 

% of unprofitable institutions.............................. 6.7 9.9 2.8 3.4 2.6 9.8 9.3 5.0 5.0 4.9 10.4 

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

Performance Ratios (annualized, %) 

70.2 65.8 75.8 73.4 75.6 72.2 75.6 71.8 67.5 68.4 66.0 

Yield on earning assets.................................... 6.32 6.83 6.83 6.46 6.16 6.21 6.19 6.08 7.26 6.48 6.78 

Cost of funding earning assets........................... 2.21 2.44 2.34 2.14 2.18 2.51 2.12 2.20 2.16 1.94 1.64 

Net interest margin.......................................... 4.11 4.40 4.49 4.32 3.98 3.71 4.08 3.88 5.10 4.54 5.14 

Noninterest income to earning assets.................. 2.97 1.25 1.66 2.57 3.40 3.87 2.71 2.21 3.06 1.69 2.80 

Noninterest expense to earning assets.................. 3.99 3.81 3.81 3.92 4.04 4.35 3.91 3.34 4.44 3.85 4.11 

Loan and lease loss provision to assets............... 0.65 0.29 0.36 0.51 0.75 0.87 0.42 0.54 0.94 0.31 0.70 

Net operating income to assets........................... 1.36 1.08 1.28 1.45 1.37 1.23 1.38 1.29 1.66 1.34 1.71 

Pretax return on assets................................. 2.09 1.41 1.81 2.20 2.14 1.84 2.12 2.05 2.45 1.90 2.73 

Return on assets............................................. 1.41 1.09 1.30 1.47 1.43 1.26 1.43 1.39 1.68 1.38 1.75 

Return on equity................................................ 15.24 9.92 13.29 14.44 16.10 14.47 15.04 16.05 16.53 14.03 16.14 

Net charge-offs to loans and leases..................... 1.07 0.32 0.39 0.79 1.30 1.68 0.69 0.77 1.33 0.36 1.09 

Loan and lease loss provision to net charge-offs...... 102.84 150.42 139.13 103.38 100.03 102.50 98.29 106.48 104.07 146.61 99.62 

Efficiency ratio................................................ 

Structural Changes (QTR) 

55.04 67.27 61.51 55.98 53.35 56.12 56.19 53.83 52.66 61.21 50.98 

New charters................................................ 26 26 0 0 0 4 5 3 4 3 7 

Banks absorbed by mergers.............................. 66 32 30 1 3 5 14 11 11 14 11 

Failed banks................................................ 

PRIOR SECOND QUARTERS

 (The way it was...) 

1 0 1 0 0 1 0 0 0 0 0 

Return on assets (%)................................2001 1.21 0.95 1.24 1.28 1.20 1.17 1.27 1.02 1.38 1.18 1.39

 .................................................1999 1.24 1.08 1.30 1.68 1.14 0.98 1.29 1.28 1.60 1.30 1.59

 .................................................1997 

Net charge-offs to loans & leases (%)

1.24 1.27 1.37 1.23 1.21 1.14 1.28 1.25 1.50 1.27 1.32 

 .................................................2001 0.83 0.27 0.37 0.95 0.91 0.97 0.62 0.63 1.02 0.39 1.31

 .................................................1999 0.56 0.24 0.34 0.74 0.57 0.70 0.45 0.31 0.73 0.41 0.68

 .................................................1997 0.62 0.25 0.38 1.01 0.58 0.72 0.44 0.47 0.84 0.29 0.87 

FDIC Quarterly Banking Profile 

FDIC-Insured Commercial Banks 6 Second Quarter 2002 
TABLE V-A. Loan Performance, FDIC-Insured Commercial Banks 

June 30, 2002 

Asset Size Distribution Geographical Distribution by Region 

All 

Institutions 

Less $100 Million $1 Billion Greater 

than $100 to to than $10 

Million $1 Billion $10 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- Southwest west West 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate.............................. 1.03 1.30 0.92 0.87 1.09 1.07 0.91 1.30 0.98 0.99 0.78 

Construction and development........................... 1.03 1.38 0.91 0.94 1.10 0.67 0.65 1.31 1.14 1.08 1.61 

Commercial real estate.................................... 0.72 0.96 0.73 0.77 0.66 0.76 0.62 0.92 0.84 0.77 0.48 

Multifamily residential real estate........................ 0.43 0.66 0.45 0.46 0.40 0.24 0.50 0.63 0.42 0.63 0.22 

Home equity loans.......................................... 0.57 0.75 0.53 0.55 0.57 0.46 0.54 0.68 0.57 0.48 0.52 

Other 1-4 Family residential.............................. 1.34 1.66 1.24 1.03 1.41 1.26 1.26 1.83 1.13 1.25 0.91 

Commercial and industrial loans........................... 1.13 1.81 1.38 1.35 1.04 1.03 1.01 1.26 1.55 1.27 1.18 

Loans to individuals............................................. 2.05 2.43 2.23 1.97 2.03 2.24 1.85 1.81 2.45 1.81 1.79 

Credit card loans............................................. 2.55 2.36 5.32 2.46 2.49 2.66 3.48 1.94 2.83 1.42 1.95 

Other loans to individuals................................. 1.74 2.43 1.86 1.70 1.70 1.86 1.60 1.80 1.74 1.82 1.53 

All other loans and leases (including farm)............... 0.62 0.97 0.97 0.69 0.57 0.54 0.36 0.79 1.05 0.91 0.63 

Total loans and leases....................................... 1.17 1.48 1.13 1.13 1.17 1.24 0.99 1.28 1.45 1.16 1.04 

Memo: Commercial RE loans not secured by RE...... 

Percent of Loans Noncurrent* 

1.00 0.62 0.30 0.76 1.06 0.59 0.47 2.02 1.72 1.91 0.95 

All real estate loans............................................. 0.95 1.00 0.83 0.83 1.02 1.09 0.76 1.32 0.73 0.88 0.64 

Construction and development........................... 1.08 0.98 0.99 1.12 1.11 1.03 0.96 1.27 0.94 0.82 1.26 

Commercial real estate.................................... 0.97 1.11 0.91 0.86 1.05 0.94 0.88 1.31 0.92 0.93 0.72 

Multifamily residential real estate........................ 0.38 0.65 0.48 0.28 0.38 0.29 0.37 0.50 0.38 0.78 0.22 

Home equity loans.......................................... 0.32 0.30 0.28 0.33 0.32 0.27 0.26 0.43 0.32 0.43 0.27 

Other 1-4 Family residential.............................. 1.00 0.87 0.74 0.81 1.11 1.10 0.76 1.70 0.55 0.79 0.42 

Commercial and industrial loans........................... 2.87 1.82 1.43 1.75 3.28 3.83 2.63 2.47 1.46 1.50 2.27 

Loans to individuals............................................. 1.40 0.94 0.83 1.01 1.55 2.05 0.76 0.66 1.61 0.69 1.21 

Credit card loans............................................. 2.02 1.43 3.07 1.74 2.03 2.23 1.86 1.39 2.04 0.86 1.70 

Other loans to individuals................................. 1.02 0.92 0.56 0.61 1.20 1.88 0.59 0.56 0.82 0.69 0.39 

All other loans and leases (including farm)............... 0.89 1.31 1.26 0.82 0.85 0.88 0.78 0.85 1.11 1.45 1.05 

Total loans and leases....................................... 1.47 1.17 0.96 1.04 1.68 2.02 1.18 1.46 1.11 1.03 1.10 

Memo: Commercial RE loans not secured by RE...... 

Percent of Loans Charged-off (net, YTD) 

0.80 0.70 0.28 0.63 0.84 0.20 1.28 1.09 1.44 0.33 0.38 

All real estate loans............................................. 0.15 0.08 0.08 0.13 0.18 0.10 0.11 0.29 0.08 0.09 0.08 

Construction and development........................... 0.12 0.13 0.09 0.18 0.12 0.15 0.09 0.16 0.17 0.05 0.14 

Commercial real estate.................................... 0.14 0.11 0.10 0.16 0.16 0.04 0.09 0.32 0.14 0.11 0.10 

Multifamily residential real estate........................ 0.06 0.04 0.04 0.08 0.05 0.06 0.05 0.10 0.00 0.04 0.01 

Home equity loans.......................................... 0.20 0.03 0.04 0.14 0.23 0.05 0.18 0.38 0.10 0.15 0.07 

Other 1-4 Family residential.............................. 0.14 0.07 0.07 0.09 0.18 0.08 0.12 0.31 0.05 0.09 0.04 

Commercial and industrial loans........................... 1.60 0.63 0.65 1.30 1.80 1.81 1.64 1.40 0.80 0.70 1.97 

Loans to individuals............................................. 3.49 0.83 1.73 2.73 3.93 4.94 1.50 1.86 4.58 0.95 3.72 

Credit card loans............................................. 7.05 3.76 9.05 5.64 7.23 8.54 4.09 5.40 6.87 3.15 5.14 

Other loans to individuals................................. 1.36 0.74 0.82 1.11 1.55 1.81 1.11 1.33 0.45 0.89 1.34 

All other loans and leases (including farm)............... 0.52 0.17 0.34 0.43 0.55 0.59 0.25 0.68 0.21 0.38 0.62 

Total loans and leases....................................... 1.10 0.28 0.37 0.82 1.34 1.75 0.65 0.80 1.33 0.37 1.17 

Memo: Commercial RE loans not secured by RE...... 

Loans Outstanding (in billions) 

0.09 0.80 0.16 0.22 0.08 0.02 0.18 0.10 0.02 0.22 0.03 

All real estate loans............................................. $1,887.0 $80.6 $365.3 $329.4 $1,111.7 $376.8 $579.3 $454.8 $121.2 $94.5 $260.4 

Construction and development........................... 198.6 7.4 45.8 42.5 102.9 21.0 70.4 49.7 10.8 14.7 32.1 

Commercial real estate.................................... 532.7 24.3 145.5 119.2 243.7 87.3 161.0 125.6 33.1 36.4 89.3 

Multifamily residential real estate........................ 69.4 1.9 13.0 14.8 39.8 15.6 17.2 19.1 3.4 2.9 11.1 

Home equity loans.......................................... 188.3 2.4 17.2 21.9 146.9 37.5 58.8 60.9 6.1 1.7 23.3 

Other 1-4 Family residential.............................. 824.6 34.3 128.1 126.4 535.8 181.3 261.6 190.5 56.3 34.6 100.3 

Commercial and industrial loans........................... 938.7 23.1 94.8 115.8 704.9 317.0 227.0 218.7 42.5 37.6 96.0 

Loans to individuals............................................. 662.5 16.3 55.1 96.1 494.9 266.4 122.9 102.2 63.6 22.0 85.4 

Credit card loans............................................. 250.4 0.5 6.0 34.1 209.9 125.5 16.5 13.3 41.4 0.6 53.1 

Other loans to individuals................................. 412.1 15.9 49.1 62.0 285.0 140.8 106.4 88.9 22.2 21.4 32.3 

All other loans and leases (including farm)............... 487.2 16.1 28.1 38.6 404.5 199.3 95.6 121.1 30.1 10.0 31.1 

Total loans and leases....................................... 3,975.4 136.1 543.3 579.9 2,716.0 1,159.5 1,024.7 896.8 257.3 164.0 472.9 

Memo: Commercial RE loans not secured by RE...... 

Memo: Other Real Estate Owned (in millions) 

38.8 0.3 1.4 3.5 33.6 9.1 11.7 9.0 0.8 0.7 7.4 

All other real estate owned.................................... $3,873.7 $323.5 $1,008.0 $651.9 $1,890.2 $584.9 $1,326.1 $896.1 $297.1 $332.4 $437.1 

Construction and development........................... 351.9 34.3 169.3 74.0 74.3 42.7 119.0 56.9 32.9 45.2 55.1 

Commercial real estate.................................... 1,806.1 143.2 466.3 329.1 867.5 269.8 696.0 287.2 138.1 168.1 246.9 

Multifamily residential real estate........................ 68.9 9.9 39.1 7.4 12.5 11.9 15.2 10.4 13.1 5.8 12.5 

1-4 Family residential....................................... 1,457.2 110.5 291.0 231.8 823.9 151.8 480.9 531.6 92.2 92.0 108.7 

Farmland...................................................... 79.1 25.7 40.5 7.8 5.0 1.6 14.9 9.9 20.7 21.3 10.6 

Other real estate owned in foreign offices............ 110.5 0.0 1.7 1.8 107.0 107.3 0.0 0.0 0.0 0.0 3.2 

*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. N/A - Not Available 

FDIC Quarterly Banking Profile 

Second Quarter 2002 7 FDIC-Insured Commercial Banks 
SAVINGS INSTITUTION PERFORMANCE—SECOND QUARTER, 2002 

n Gains On Sales Of Securities Contribute To Record Earnings 

n Asset Quality Improved For The First Time After Six Quarters Of 

Deterioration 

n Industry Assets Decline As The Number Of Institutions Falls Below 1,500 

Earnings Hit a Record $3.9 Billion 

A favorable interest rate environment enabled the thrift 

industry to sustain relatively wide net interest margins 

and supplement earnings with gains on securities 

sales. FDIC-insured savings institutions earned a 

record $3.9 billion in the second quarter, up $236 million from last quarter and $519 million higher than a 

year ago. Gains on sales of securities of $1.3 billion 

drove earnings to record levels. These gains were 

$656 million higher than in the first quarter and $264 

million higher than a year ago. Several factors limited 

the rise in earnings. Net interest income was $265 million lower than in the first quarter, but $1.1 billion higher than a year ago. Provision expenses for loan losses 

were $127 million higher than in the first quarter and 

$214 million higher than a year ago. Noninterest income was $164 million lower than in the first quarter, 

primarily because of a decline in servicing fees. The annualized return on assets (ROA) for the industry rose to 

a record 1.21 percent for the second quarter, from the 

first quarter’s 1.12 percent and the 1.06 percent reported a year ago. Almost three fourths of all savings institutions reported earnings gains from year-ago levels 

The 6 Percent Decline in Noninterest 

Income Was Driven by Mortgage Banking 

Activities 

Lower mortgage rates continue to spur refinancings 

and drive down mortgage-servicing rights’ values at 

some institutions. A year ago, noninterest income was 

$439 million higher. Servicing fee income—which 

EARNINGS REACH RECORD LEVELS 

$ Billions 

2.6 2.8 3.0 

2.0 

2.7 2.9 2.8 2.7 

2.9 2.7 2.5 2.6 

2.9 

3.4 3.5 

3.7 3.6 3.9 

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

0 

1 

2 

3 

4 

5 

Securities and Other Gains/Losses, Net 

Net Operating Income 

1998 1999 2000 2001 2002 

includes changes in the valuations of mortgage servicing rights—contributed $175 million to earnings in the 

first quarter. During the second quarter the industry 

had servicing fee income that was a negative $1.1 billion, primarily because of declines in the values of mortgage servicing rights. This resulted in a $1.3-billion 

swing in servicing fees.1 Apart from servicing losses, 

other noninterest income rose by $1.1 billion compared 

to the first quarter. The increase included gains from 

successful hedging strategies that offset some of the 

decline in the value of mortgage servicing rights. 

Net Interest Margins Slipped Just 2 Basis 

Points during the Quarter 

The decline in short term interest rates over the past 

year has helped the industry maintain net interest margins that are close to the peak of 3.58 percent reached 

in early 1993. A steep yield curve helped keep net 

interest margins at 3.50 percent, down only 2 basis 

points from 3.52 percent in the first quarter. A year ago 

margins were 35 basis points lower, at 3.15 percent. 

The decline in net interest margins was concentrated in 

large institutions with over $5 billion in assets. This 

group reported a 9-basis-point decline, while the other 

asset size groups reported increases ranging from 6 to 

15 basis points. Smaller institutions tend to lag the rest 

of the industry in reducing their funding costs and thus 

their margins are still improving as a result of interest 

rate cuts. 

Persistently Low Long-Term Rates 

Results in Lower Asset Yields 

Long-term interest rates have been persistently low 

over the last two years and this has led to a mortgagerefinancing boom, but has reduced the industry’s asset 

yields. Asset yields fell 12 basis points during the second quarter to 6.38 percent, while the cost of funding 

earning assets declined just 10 basis points to 2.88 percent. This was the first time since rates began to fall 

last year that asset yields fell faster than the cost of 

funding earning assets. If short-term rates do not con1 Much of the decline in servicing fees was caused by a write-down 

in the value of mortgage servicing rights reported by Washington 

Mutual Bank, FA, which reported servicing fees of minus $1.1 billion. This loss was partially offset by gains on derivatives, which 

can serve to hedge changes in mortgage servicing rights’ values. 

FDIC Quarterly Banking Profile 

FDIC-Insured Savings Institutions 8 Second Quarter 2002 
0 

10 

20 

30 

40 

50 

38.8 

Assets < $100 Million 

21.0 

Assets > $100 Million 

NET INTEREST MARGINS TAPERED OFF 

FOR LARGE THRIFTS 

Net Interest Margin (%) 

4.0 

3.5 

3.0 

2.5 

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

Assets < $100 Million 

3.50 

3.48 

Assets > $100 Million 

1998 1999 2000 2001 2002 

tinue to fall and drive down costs, the industry’s net 

interest margin may have reached a peak at 3.52 percent last quarter. 

Small Thrifts Reported a Slight 

Improvement in Profitability 

Small thrifts, 542 institutions with less than $100 million 

in assets, reported a 4 basis point improvement in 

ROA, compared to the first quarter, to 0.86 percent. A 

14 basis point improvement in the group’s net interest 

margin, which rose to 3.48 percent, helped drive the 

earnings improvement. Noninterest income as a percentage of earning assets declined 2 basis points to 

2.21 percent, while noninterest expense increased 6 

basis points to 4.29 percent. Specialized small thrifts 

that obtain more than 90 percent of their operating revenue from noninterest income heavily influence the 

group’s results. Without 11 specialized small thrifts, the 

remaining 531 institutions with less than $100 million in 

PROFITABILITY WAS DRIVEN BY NET INTEREST 

MARGINS INSTEAD OF FEE INCOME 

Quarterly Noninterest Income, % of Net Operating Revenue 

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 

FDIC Quarterly Banking Profile 

assets reported a 5 basis point improvement in ROA, 

primarily because of the 14 basis point improvement in 

their net interest margin. At these institutions, noninterest income was equal to 0.88 percent of earning 

assets, 8 basis points higher than last quarter. While 

most small thrifts reported improved ROAs, 15 percent 

of the group reported losses for the quarter, which was 

the same as last quarter, but down from 18 percent a 

year ago. 

Asset Quality Improved after Six 

Consecutive Quarterly Declines 

Noncurrent assets plus other real estate owned 

equaled 0.65 percent of assets at the end of the quarter, a slight improvement from 0.68 percent at the end 

of the first quarter. This was the first improvement after 

6 consecutive quarterly increases in the level of troubled assets. All real estate and consumer loan categories showed improvement and other real estate 

owned declined. Commercial and industrial (C&I) 

loans were the only loan category to show deterioration. Noncurrent C&I loans rose from 2.21 percent to 

2.27 percent of all C&I loans during the second quarter. 

NONCURRENT REAL ESTATE RATES IMPROVED 

IN ALL CATEGORIES 

Percent of Loans 

3/00 6/00 9/00 12/00 3/01 6/01 9/01 12/01 3/02 6/02 

0.0 

0.5 

1.0 

1.5 

2.0 

Total 

Real Estate 

Construction and Land 

1-4 Family 

Multifamily 

Commercial Loans 

Provision Expenses Outpace 

Net Charge-offs 

Provision expenses for loan losses exceeded net 

charge-offs during the second quarter to a degree not 

seen since 1990. Loan loss provisions were 193 percent of net charge-offs, up from 141 percent in the first 

quarter and just below the 211 percent recorded in the 

third quarter of 1990. Provision expenses were $930 

million while net charge-offs were about half as much at 

$481 million. One third of the industry reported higher 

provision expenses, but one institution, Capital One 

Second Quarter 2002 9 FDIC-Insured Savings Institutions 
FSB, accounted for almost one third (31 percent) of the 

provision expenses for the second quarter. The net 

charge-off rate fell 4 basis points to 0.23 percent, primarily because of improvements in home mortgages. 

The only dark spot was charge-offs on loans secured 

by non-residential (commercial) property, which rose 7 

basis points to 0.11 percent during the quarter. The net 

charge-off rate for C&I loans declined to 1.36 percent 

from 1.39 percent last quarter. 

Loan Loss Reserves Rise with Higher 

Provisions and Lower Net Charge-offs 

Strong provisions for loan losses helped boost reserves 

for loan losses by $183 million, to $8 billion. Noncurrent 

loans declined $521 million to $7.4 billion. Last quarter, 

noncurrent loans exceeded reserves slightly, by $56 

million, but during the second quarter reserves pulled 

ahead of noncurrent loans. As a result, the coverage 

ratio—loan loss reserves to noncurrent loans—rose to 

109 percent from 99 percent during the second quarter 

with more than half the industry reporting an improvement. 

RESERVES IMPROVE RELATIVE TO 

NONCURRENT LOANS 

$ Billions Coverage Ratio (%) 

30 

Coverage Ratio (%) 

Noncurrent Loans ($) 

Loan-Loss Reserves ($) 

140 

120 

24 

100 

18 80 

60 12 

40 

6 

20 

0 0 

1998 1999 2000 2001 2002 

Industry Assets Shrink by $30.3 Billion, 

But Deposits Continue to Flow In 

Industry assets fell by $30.3 billion in the second quarter, primarily because of a charter transfer. Charter 

One Bank, FSB, with $38 billion in assets, converted to 

a national bank during the second quarter. This institution held over $25 billion in deposits last quarter and 

was the fourth largest savings institution as ranked by 

total assets. The industry’s decline in deposits in the 

second quarter was just $14.5 billion, as over two-thirds 

of institutions reported increases. Federal Home Loan 

Bank Advances were also down by a similar amount, 

$14.4 billion. A decline in securities portfolios at the two 

largest thrifts led to a $9.3-billion decline for the industry. One of these institutions, World Savings Bank, FSB 

reported a $5.9 billion rise in home mortgages which 

was caused by conversions of mortgage backed securities into loans. 

Capital Rises To Highest Level Ever 

Reductions in interest rates have raised the value of 

thrifts’ investment securities and these gains have 

boosted equity capital ratios. Equity capital increased 

$2.4 billion to $119.6 billion or 9.29 percent of assets, 

the highest level seen since data are available, back to 

1940. Unrealized gains on available-for-sale securities 

accounted for $2.2 billion (90 percent) of the increase 

in capital. Core capital, which excludes these gains, 

improved to 8.18 percent of average assets from 7.89 

percent last quarter. This is its highest level since 

reporting on this ratio began in 1990. 

The Count of Savings Institutions Fell 

below 1,500 For the First Time Since 

1935 

At the end of June there were 1,498 savings institutions, which was 17 fewer than at the end of the first 

quarter. During the quarter 8 institutions with assets of 

$1.6 billion were absorbed by commercial banks and 3 

with $207 million were absorbed by thrifts. One institution with $52 million in assets failed and merged, with 

assistance, into a commercial bank. There were 3 institutions with $37.9 billion in assets that converted their 

charter to a commercial bank charter during the quarter. The number of “problem” thrifts fell slightly to 21 

from 22 at the end March. The assets of “problem” 

thrifts fell to $3.8 billion from $15.0 billion at the end of 

March. 

CAPITAL HITS A RECORD 

Ratio (%) 

18 

16 

14 

12 

10 

8 

6 

4 

Core Capital (Leverage) 

Equity to Assets 

Tier 1 Risk-Based Capital 

Total Risk-Based Capital 

1996 1997 1998 1999 2000 2001 2002 

FDIC Quarterly Banking Profile 

FDIC-Insured Savings Institutions 10 Second Quarter 2002 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE I-B. Selected Indicators, FDIC-Insured Savings Institutions 

2002* 2001* 2001 2000 1999 1998 1997 

Return on assets (%)............................................. 1.22 1.01 1.09 0.92 1.00 1.01 0.93 

Return on equity (%)............................................. 13.65 11.95 12.73 11.14 11.73 11.35 10.84 

Core capital (leverage) ratio (%).............................. 8.18 7.76 7.80 7.80 7.86 7.85 7.95 

Noncurrent assets plus 

other real estate owned to assets (%)..................... 0.65 0.60 0.66 0.56 0.58 0.72 0.95 

Net charge-offs to loans (%).................................... 0.24 0.25 0.28 0.20 0.17 0.22 0.25 

Asset growth rate (%)............................................. 1.04 8.13 6.76 5.99 5.52 6.06 -0.28 

Net interest margin................................................ 3.52 3.10 3.23 2.96 3.10 3.10 3.23 

Net operating income growth (%).............................. 28.55 -7.80 7.14 3.05 16.62 7.71 19.98 

Number of institutions reporting.............................. 1,498 1,569 1,533 1,589 1,642 1,690 1,780 

Percentage of unprofitable institutions (%).................. 8.21 10.07 8.55 8.56 8.28 5.27 4.10 

Number of problem institutions................................. 21 22 19 18 13 15 12 

Assets of problem institutions (in billions).................. $4 $7 $4 $7 $6 $6 $2 

Number of failed/assisted institutions........................ 1 0 1 1 1 0 0 

* 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 Savings Institutions 

(dollar figures in millions) 

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

Preliminary 

2nd Quarter 1st Quarter 2nd Quarter %Change 

2002 2002 2001 01:2-02:2 

1,498 1,515 1,569 -4.5 

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

CONDITION DATA

262,460 271,259 263,814 -0.5 

 Total assets..................................................................... $1,288,032 $1,318,304 $1,274,768 1.0

 Loans secured by real estate............................................. 740,572 746,302 751,645 -1.5 

1-4 Family Residential................................................... 575,912 583,105 593,596 -3.0 

Multifamily residential property.......................................... 60,449 59,648 58,246 3.8 

Commercial real estate................................................... 66,963 65,766 63,058 6.2 

Construction, development, and land................................. 37,247 37,783 36,746 1.4

 Commercial & industrial loans.......................................... 37,978 38,423 37,671 0.8

 Loans to individuals......................................................... 66,316 68,904 65,031 2.0

 Other loans & leases...................................................... 4,706 6,787 6,591 -28.6

 Less: Unearned income & contra accounts........................... 158 158 177 -10.8

 Total loans & leases......................................................... 849,413 860,258 860,760 -1.3

 Less: Reserve for losses................................................... 8,040 7,857 7,627 5.4

 Net loans & leases............................................................ 841,373 852,402 853,133 -1.4

 Securities........................................................................ 293,041 302,325 279,262 4.9

 Other real estate owned................................................... 1,030 1,065 1,031 -0.1

 Goodwill and other intangibles............................................. 23,948 26,217 23,048 3.9

 All other assets............................................................... 128,639 136,295 118,293 8.7 

Total liabilities and capital................................................... 1,288,032 1,318,304 1,274,768 1.0

 Deposits........................................................................ 805,633 820,099 775,695 3.9

 Other borrowed funds...................................................... 337,703 355,194 364,972 -7.5

 Subordinated debt............................................................ 3,304 3,747 3,896 -15.2

 All other liabilities............................................................ 21,792 22,053 21,657 0.6

 Equity capital.................................................................. 119,600 117,210 108,548 10.2 

Loans and leases 30-89 days past due.................................... 7,696 8,682 8,250 -6.7 

Noncurrent loans and leases................................................ 7,391 7,912 6,557 12.7 

Restructured loans and leases............................................. 1,661 1,622 1,502 10.5 

Direct and indirect investments in real estate........................... 434 429 614 -29.3 

Mortgage-backed securities................................................ 194,064 198,146 207,935 -6.7 

Earning assets.................................................................. 1,177,550 1,205,159 1,170,058 0.6 

FHLB Advances............................................................... 224,121 238,516 254,116 -11.8 

Unused loan commitments................................................... 331,451 316,479 288,575 14.9 

INCOME DATA 

Total interest income............................................ 

Total interest expense......................................... 

 Net interest income.......................................... 

Provision for loan and lease losses........................ 

Total noninterest income....................................... 

Total noninterest expense.................................... 

Securities gains (losses)....................................... 

Applicable income taxes..................................... 

Extraordinary gains, net....................................... 

 Net income...................................................... 

Net charge-offs................................................... 

Cash dividends.................................................. 

 Net operating income....................................... 

Preliminary Preliminary 

First Half First Half 2nd Quarter 2nd Quarter %Change 

2002 2001 %Change 2002 2001 01:2-02:2 

$37,555 $44,398 -15.4 $18,708 $22,119 -15.4 

17,063 26,701 -36.1 8,450 12,972 -34.9

20,492 17,697 15.8 10,258 9,147 12.2 

1,693 1,397 21.3 930 716 29.8 

5,891 6,187 -4.8 2,802 3,242 -13.6 

14,835 14,501 2.3 7,514 7,452 0.8 

1,982 1,874 5.8 1,310 1,045 25.4 

4,080 3,532 15.5 2,005 1,891 6.0 

6 -47 N/M -42 -15 N/M

7,763 6,281 23.6 3,880 3,361 15.5 

1,009 1,051 -4.0 481 543 -11.4 

3,468 2,920 18.8 2,064 1,766 16.9

6,428 5,001 28.6 3,054 2,599 17.5 

N/M - Not Meaningful 

FDIC Quarterly Banking Profile 

Second Quarter 2002 11 FDIC-Insured Commercial Banks 
 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE III-B. First Half 2002, FDIC-Insured Savings Institutions 

FIRST HALF Preliminary 

(The way it is...) 

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

All 

Institutions 

Asset Size Distribution Geographic Distribution by Region 

Less $100 Million $1 Billion Greater 

than $100 to to than $5 

Million $1 Billion $5 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- Southwest west West 

1,498 542 808 104 44 600 193 378 118 104 105 

Total assets (in billions).................................... $1,288.0 $27.8 $252.0 $198.4 $809.9 $439.0 $101.0 $134.3 $43.6 $76.6 $493.6 

Total deposits (in billions).................................... 805.6 22.2 191.8 140.0 451.6 295.5 70.8 97.5 26.7 41.9 273.3 

Net income (in millions).................................... 7,763 118 1,096 1,064 5,486 2,546 285 747 190 604 3,391 

% of unprofitable institutions.............................. 8.2 15.3 4.1 5.8 2.3 7.0 9.8 10.3 11.0 6.7 2.9 

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

Performance ratios (annualized, %) 

75.7 71.4 78.0 78.8 79.5 76.8 75.6 74.3 67.8 75.0 83.8 

Yield on earning assets.................................... 6.45 6.53 6.58 6.56 6.38 6.46 6.70 6.95 6.62 6.39 6.24 

Cost of funding earning assets........................... 2.93 3.11 3.05 2.97 2.88 2.93 3.47 3.50 3.32 2.62 2.68 

Net interest margin.......................................... 3.52 3.42 3.53 3.58 3.50 3.53 3.23 3.45 3.29 3.77 3.56 

Noninterest income to earning assets.................. 1.01 2.17 0.94 0.81 1.04 0.86 1.78 1.36 0.84 1.23 0.88 

Noninterest expense to earning assets.................. 2.55 4.24 2.99 2.72 2.31 2.37 3.37 3.37 2.72 2.76 2.27 

Loan and lease loss provision to assets............... 0.27 0.14 0.15 0.19 0.32 0.15 1.08 0.40 0.16 0.34 0.17 

Net operating income to assets........................... 1.01 0.70 0.82 0.95 1.09 1.12 0.28 0.60 0.74 1.47 1.13 

Pretax return on assets................................. 1.86 1.34 1.34 1.56 2.11 1.83 0.91 1.73 1.35 1.94 2.14 

Return on assets............................................. 1.22 0.86 0.89 1.11 1.36 1.20 0.59 1.14 0.88 1.64 1.35 

Return on equity............................................. 13.65 6.98 8.51 11.91 16.44 12.23 6.86 10.98 9.90 19.57 16.88 

Net charge-offs to loans and leases..................... 0.24 0.14 0.15 0.15 0.29 0.18 0.70 0.33 0.18 0.33 0.16 

Loan and lease loss provision to net charge-offs...... 167.85 153.97 150.77 194.30 167.49 142.98 221.01 164.05 133.87 168.31 148.45 

Efficiency ratio................................................ 

Condition Ratios (%) 

55.46 75.53 66.48 60.93 49.89 52.83 66.66 69.62 65.10 54.92 50.35 

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

Loss allowance to: 

91.42 93.91 93.38 92.59 90.44 92.36 92.83 92.68 92.76 93.16 89.57 

Loans and leases.......................................... 0.95 0.77 0.89 1.10 0.93 0.97 1.35 0.83 0.77 1.11 0.87 

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

Noncurrent assets plus 

108.78 83.08 118.06 109.59 107.02 134.45 157.08 83.19 120.04 77.05 97.99 

other real estate owned to assets..................... 0.65 0.76 0.59 0.79 0.64 0.49 0.71 0.86 0.61 0.98 0.69 

Noncurrent RE loans to RE loans........................ 0.83 0.87 0.70 0.92 0.85 0.66 0.64 0.99 0.60 1.68 0.87 

Equity capital ratio............................................. 9.29 12.39 10.49 9.36 8.79 9.90 8.88 10.70 8.92 8.37 8.61 

Core capital (leverage) ratio.............................. 8.18 11.99 10.00 8.57 7.39 8.84 8.62 9.48 8.39 8.24 7.14 

Tier 1 risk-based capital ratio.............................. 13.32 21.68 16.68 13.72 11.93 14.69 13.28 15.18 14.44 13.36 11.54 

Total risk-based capital ratio.............................. 14.64 22.74 17.74 14.80 13.40 15.94 14.76 16.12 15.48 14.37 13.06 

Gross real estate assets to gross assets............... 72.22 68.58 69.70 72.97 72.94 71.71 64.56 72.57 75.53 61.47 75.52 

Gross 1-4 family mortgages to gross assets......... 44.43 46.60 41.13 35.38 47.60 38.41 38.36 50.30 44.12 24.93 52.49 

Net loans and leases to deposits........................ 

Structural Changes (YTD) 

104.44 82.26 85.06 91.45 117.78 87.82 96.53 101.35 110.16 109.31 124.24 

New Charters................................................ 1 1 0 0 0 0 1 0 0 0 0 

Thrifts absorbed by mergers........................... 29 9 18 1 1 10 8 7 1 1 2 

Failed Thrifts................................................ 

PRIOR FIRST HALVES

 (The way it was...) 

1 1 0 0 0 0 0 1 0 0 0 

Number of institutions...............................2001 1,569 603 822 102 42 618 207 401 123 109 111

 ...............................................1999 1,654 683 828 108 35 644 227 431 127 113 112

 ...............................................1997 1,852 808 887 121 36 704 271 478 139 126 134 

Total assets (in billions).............................2001 $1,274.8 $30.6 $254.1 $197.7 $792.3 $421.8 $91.0 $189.6 $42.0 $69.3 $461.2

 ................................................1999 1,126.0 35.2 241.4 220.8 628.7 372.9 68.9 179.5 39.2 72.3 393.2

 ................................................1997 1,028.6 42.1 263.4 246.3 476.8 341.5 65.8 175.9 41.8 64.7 338.9 

Return on assets (%)................................2001 1.01 0.67 0.71 0.82 1.17 1.01 0.55 0.71 0.80 1.23 1.22

 ................................................1999 1.01 0.68 0.92 1.14 1.01 0.98 0.92 1.08 0.82 1.15 1.01

 ................................................1997 

Net charge-offs to loans & leases (%) 

0.94 0.80 0.96 1.12 0.85 0.99 0.91 1.00 0.84 1.11 0.85 

 ................................................2001 0.25 0.11 0.11 0.24 0.31 0.17 0.38 0.54 0.18 0.34 0.15

 ................................................1999 0.17 0.09 0.09 0.39 0.13 0.10 0.22 0.25 0.16 0.20 0.17

 ................................................1997 

Noncurrent assets plus 

0.28 0.10 0.13 0.36 0.35 0.31 0.46 0.22 0.05 0.40 0.26 

OREO to assets (%)*.....................2001 0.60 0.68 0.54 0.83 0.55 0.52 0.59 0.77 0.72 1.03 0.52

 ................................................1999 0.62 0.70 0.59 0.91 0.53 0.66 0.58 0.66 0.51 0.86 0.54

 .................................................1997 1.02 0.89 0.90 1.35 0.92 1.20 0.93 0.64 0.66 1.01 1.09 

Equity capital ratio (%)..............................2001 8.52 12.99 10.56 8.82 7.61 9.82 8.67 8.54 9.19 8.48 7.22

 ................................................1999 8.55 12.22 10.71 8.87 7.40 9.59 10.30 9.12 10.21 8.17 6.89

 ................................................1997 8.53 11.65 10.08 8.52 7.41 9.29 9.64 9.27 8.73 8.30 7.19 

* Beginning with June 1996, TFR filers report noncurrent loans net of specific reserves. Accordingly, specific reserves have been subtracted from loan-loss

 reserves, beginning with June 1996, to make the ratio more closely comparable to prior periods. 

FDIC Quarterly Banking Profile 

FDIC-Insured Savings Institutions 12 Second Quarter 2002 
 

 

 

 

 

TABLE IV-B. SECOND Quarter 2002, FDIC-Insured Savings Institutions 

SECOND QUARTER Preliminary 

(The way it is...) 

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

All 

Institutions 

Asset Size Distribution Geographic Distribution by Region 

Less $100 Million $1 Billion Greater 

than $100 to to than $5 

Million $1 Billion $5 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- South 

west west West 

1,498 542 808 104 44 600 193 378 118 104 105 

Total assets (in billions).................................... $1,288.0 $27.8 $252.0 $198.4 $809.9 $439.0 $101.0 $134.3 $43.6 $76.6 $493.6 

Total deposits (in billions).................................... 805.6 22.2 191.8 140.0 451.6 295.5 70.8 97.5 26.7 41.9 273.3 

Net income (in millions).................................... 3,880 59 565 530 2,725 1,319 89 349 100 342 1,681 

% of unprofitable institutions.............................. 7.8 15.1 3.5 5.8 2.3 6.8 9.3 10.3 9.3 6.7 1.0 

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

Performance Ratios (annualized, %) 

74.2 70.1 76.6 75.0 79.5 76.2 75.6 70.4 66.9 76.9 80.0 

Yield on earning assets.................................... 6.38 6.49 6.53 6.54 6.29 6.44 6.61 6.86 6.56 6.45 6.12 

Cost of funding earning assets........................... 2.88 3.01 2.96 2.89 2.85 2.86 3.38 3.41 3.26 2.55 2.67 

Net interest margin.......................................... 3.50 3.48 3.57 3.65 3.44 3.57 3.22 3.46 3.30 3.90 3.45 

Noninterest income to earning assets.................. 0.96 2.21 0.94 0.78 0.96 0.87 1.79 1.30 0.77 1.31 0.73 

Noninterest expense to earning assets.................. 2.56 4.29 2.98 2.76 2.32 2.36 3.39 3.39 2.66 2.78 2.30 

Loan and lease loss provision to assets............... 0.29 0.17 0.16 0.25 0.34 0.15 1.46 0.40 0.16 0.31 0.16 

Net operating income to assets........................... 0.95 0.69 0.84 0.93 1.00 1.15 0.03 0.55 0.75 1.68 0.98 

Pretax return on assets................................. 1.83 1.36 1.37 1.51 2.07 1.87 0.55 1.61 1.40 2.14 2.11 

Return on assets............................................. 1.21 0.86 0.91 1.08 1.34 1.22 0.36 1.05 0.93 1.83 1.34 

Return on equity............................................. 13.24 6.97 8.69 11.66 15.66 12.44 4.14 9.87 10.36 21.83 16.03 

Net charge-offs to loans and leases..................... 0.23 0.15 0.17 0.13 0.27 0.16 0.72 0.27 0.16 0.27 0.17 

Loan and lease loss provision to net charge-offs...... 193.28 170.71 145.24 282.18 192.33 161.18 295.22 197.09 150.34 187.03 133.48 

Efficiency ratio................................................ 

Structural Changes (QTR) 

56.73 75.01 65.63 61.10 51.91 52.10 66.72 70.84 64.62 53.09 54.26 

New charters................................................ 0 0 0 0 0 0 0 0 0 0 0 

Thrifts absorbed by mergers........................... 11 5 6 0 0 1 4 4 0 1 1 

Failed Thrifts................................................ 

PRIOR SECOND QUARTERS

 (The way it was...) 

1 1 0 0 0 0 0 1 0 0 0 

Return on assets (%)................................2001 1.06 0.70 0.71 0.85 1.24 1.04 0.55 0.73 0.84 1.31 1.31

 .................................................1999 1.03 0.66 0.88 1.18 1.05 1.05 0.82 1.06 0.89 1.23 1.00

 .................................................1997 

Net charge-offs to loans & leases (%)

0.95 0.83 0.97 1.15 0.84 1.00 0.92 1.09 0.68 1.16 0.82 

 .................................................2001 0.25 0.15 0.11 0.23 0.31 0.14 0.44 0.53 0.25 0.43 0.16

 .................................................1999 0.17 0.11 0.10 0.31 0.16 0.12 0.21 0.19 0.19 0.20 0.20

 .................................................1997 0.30 0.12 0.16 0.33 0.37 0.35 0.46 0.19 0.17 0.37 0.28 

REGIONS: Northeast - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, 

Rhode Island, Vermont, U.S. Virgin Islands

 Southeast - Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia

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

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

 Southwest - Arkansas, Louisiana, New Mexico, Oklahoma, Texas

 West - Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming 

FDIC Quarterly Banking Profile 

Second Quarter 2002 13 FDIC-Insured Savings Institutions 
TABLE V-B. Loan Performance, FDIC-Insured Savings Institutions 

June 30, 2002 

Asset Size Distribution Geographical Distribution by Region 

All 

Institutions 

Less $100 Million $1 Billion Greater 

than $100 to to than $5 

Million $1 Billion $5 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- Southwest west West 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate........................... 0.83 1.69 0.94 0.76 0.78 0.67 0.84 1.25 1.02 1.14 0.79 

Construction, development, and land.................. 1.01 1.74 1.26 0.73 0.97 0.62 0.85 1.71 0.94 0.62 1.43 

Commercial real estate.................................... 0.62 1.07 0.72 0.73 0.42 0.50 0.75 1.16 0.82 1.38 0.30 

Multifamily residential real estate........................ 0.18 0.99 0.33 0.26 0.11 0.18 0.58 0.52 1.32 0.38 0.08 

Home equity loans.......................................... 0.18 0.48 0.35 0.21 0.11 0.28 0.24 0.19 0.28 0.01 0.09 

Other 1-4 Family residential.............................. 0.96 1.85 1.06 0.92 0.91 0.78 0.91 1.38 1.09 1.41 0.93 

Commercial and industrial loans........................... 1.22 2.32 1.88 0.90 1.06 1.01 1.98 1.75 1.73 1.26 0.94 

Loans to individuals............................................. 1.61 2.31 1.72 1.26 1.63 1.35 2.14 1.29 1.62 0.76 2.31 

Credit card loans............................................. 1.57 1.39 2.28 0.89 1.52 1.72 3.91 0.88 3.45 0.61 1.53 

Other loans to individuals................................. 1.63 2.37 1.66 1.29 1.70 1.29 1.50 1.70 1.48 0.90 2.39 

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

Percent of Loans Noncurrent* 

0.91 1.76 1.03 0.80 0.86 0.73 1.16 1.27 1.09 1.06 0.85 

All real estate loans............................................. 0.83 0.87 0.70 0.92 0.85 0.66 0.64 0.99 0.60 1.68 0.87 

Construction, development, and land.................. 1.52 1.04 1.10 1.42 1.87 1.01 0.69 2.05 0.92 1.54 2.40 

Commercial real estate.................................... 1.26 0.94 0.82 1.48 1.52 0.86 1.04 1.25 0.69 3.51 1.60 

Multifamily residential real estate........................ 0.34 0.90 0.36 0.86 0.15 0.23 0.52 0.79 0.44 9.17 0.05 

Home equity loans.......................................... 0.09 0.18 0.12 0.11 0.07 0.11 0.17 0.11 0.06 0.00 0.05 

Other 1-4 Family residential.............................. 0.83 0.88 0.71 0.77 0.87 0.68 0.62 0.96 0.59 0.94 0.93 

Commercial and industrial loans........................... 2.27 1.96 1.84 2.93 2.19 1.77 3.45 2.48 1.89 2.42 2.55 

Loans to individuals............................................. 0.54 1.04 0.63 0.54 0.51 0.55 0.81 0.64 0.48 0.37 0.33 

Credit card loans............................................. 1.00 0.77 0.86 0.74 1.02 1.52 2.04 0.57 1.15 0.56 0.72 

Other loans to individuals................................. 0.38 1.07 0.60 0.53 0.25 0.39 0.36 0.72 0.43 0.20 0.31 

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

Percent of Loans Charged-off (net, YTD) 

0.87 0.93 0.75 1.01 0.87 0.72 0.86 0.99 0.65 1.44 0.89 

All real estate loans............................................. 0.05 0.04 0.04 0.05 0.05 0.03 0.06 0.10 0.04 0.09 0.04 

Construction, development, and land.................. 0.10 0.01 0.08 0.13 0.11 0.04 0.11 0.14 0.01 0.06 0.19 

Commercial real estate.................................... 0.07 0.05 0.06 0.01 0.12 0.02 0.14 0.10 0.10 0.39 0.02 

Multifamily residential real estate........................ 0.00 -0.05 0.01 0.05 -0.02 0.00 0.00 0.16 -0.06 0.00 -0.02 

Home equity loans.......................................... 0.05 0.02 0.01 0.09 0.06 0.02 0.26 0.06 0.11 0.06 0.02 

Other 1-4 Family residential.............................. 0.05 0.04 0.04 0.04 0.05 0.04 0.03 0.09 0.03 0.04 0.04 

Commercial and industrial loans........................... 1.37 1.12 0.92 0.83 1.72 0.95 2.91 1.07 1.19 1.20 1.63 

Loans to individuals............................................. 1.78 0.85 1.09 0.80 2.17 1.35 2.54 1.92 1.37 0.78 2.32 

Credit card loans............................................. 3.35 2.39 3.01 1.97 3.41 4.20 6.96 2.62 9.12 1.12 4.02 

Other loans to individuals................................. 1.22 0.80 0.80 0.75 1.51 0.88 0.97 1.20 0.81 0.44 2.19 

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

Loans Outstanding (in billions) 

0.24 0.14 0.15 0.15 0.29 0.18 0.70 0.33 0.18 0.33 0.16 

All real estate loans............................................. $740.6 $16.3 $146.0 $111.2 $467.0 $226.0 $51.0 $85.3 $26.2 $32.0 $320.0 

Construction, development, and land.................. 37.2 1.1 10.4 9.0 16.7 8.4 5.9 5.1 2.0 7.1 8.8 

Commercial real estate.................................... 66.7 1.7 22.4 18.6 24.0 30.5 4.8 7.6 3.7 4.5 15.6 

Multifamily residential real estate........................ 60.4 0.5 8.8 12.9 38.3 17.5 1.1 4.6 1.2 1.1 34.9 

Home equity loans.......................................... 34.7 0.5 7.2 5.4 21.6 10.6 3.2 5.6 0.9 1.2 13.2 

Other 1-4 Family residential.............................. 541.2 12.5 97.0 65.3 366.3 159.1 35.9 62.3 18.4 18.1 247.4 

Commercial and industrial loans........................... 38.0 0.8 7.6 7.6 22.0 17.4 4.8 2.8 1.2 3.7 8.0 

Loans to individuals............................................. 66.3 1.2 10.5 9.4 45.3 15.9 13.0 11.3 2.1 10.2 13.8 

Credit card loans............................................. 17.3 0.0 1.5 0.4 15.4 2.4 3.4 5.6 0.1 5.0 0.8 

Other loans to individuals................................. 48.6 1.2 8.9 8.9 29.7 13.4 9.5 5.7 2.0 5.2 12.8 

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

Memo: Other Real Estate Owned (in millions)** 

849.6 18.4 164.7 129.5 536.9 262.2 69.3 99.7 29.6 46.3 342.6 

All other real estate owned.................................... $1,029.9 $37.1 $241.7 $254.4 $496.7 $233.3 $118.6 $169.7 $76.0 $87.1 $345.0 

Construction, development, and land.................. 141.6 2.8 33.3 28.3 77.2 17.4 48.2 10.4 29.5 14.6 21.5 

Commercial real estate.................................... 295.5 7.5 65.0 146.6 76.4 126.5 16.2 28.8 14.1 31.5 78.4 

Multifamily residential real estate........................ 35.9 1.4 10.9 21.7 1.9 6.5 2.6 7.9 1.1 16.9 1.0 

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

Troubled Real Estate Asset Rates*** 

(% of total RE assets) 

577.6 25.8 134.0 74.0 343.8 98.4 52.4 123.0 32.5 24.6 246.8 

All real estate loans............................................. 0.97 1.10 0.87 1.15 0.95 0.76 0.87 1.18 0.89 1.95 0.98 

Construction, development, and land.................. 1.90 1.29 1.42 1.73 2.32 1.21 1.49 2.25 2.36 1.74 2.64 

Commercial real estate.................................... 1.70 1.34 1.11 2.26 1.84 1.27 1.37 1.62 1.07 4.16 2.10 

Multifamily residential real estate........................ 0.40 1.20 0.49 1.03 0.16 0.27 0.74 0.96 0.54 10.57 0.05 

1-4 family residential....................................... 0.88 1.04 0.79 0.83 0.92 0.70 0.72 1.07 0.73 1.01 0.98 

* 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. 

** TFR filers report "All other real estate owned" net of valuation allowances, while individual categories of OREO are reported gross. 

*** Noncurrent real estate loans plus other real estate owned as a percent of total real estate loans plus OREO. 

FDIC Quarterly Banking Profile 

FDIC-Insured Savings Institutions 14 Second Quarter 2002 
ALL FDIC-INSURED INSTITUTIONS 

n Insured Deposit Growth Slows in Second Quarter to 0.1 Percent 

n BIF Reserve Ratio Rises To 1.26 Percent 

n SAIF Reserve Ratio increases to 1.38 Percent 

n Two Insured Institutions Fail During Quarter 

Total assets of the nation’s 9,480 FDIC-insured depository institutions increased by $215 billion from March 31 to 

June 30, 2002. Deposits, which increased $81.5 billion 

during the period, funded about 38 percent of this growth. 

Deposits from domestic offices grew by $44.1 billion (1 

percent) while deposits from foreign offices increased by 

$37.3 billion (6.2 percent). Domestic deposits in accounts 

greater than $100 thousand grew by $45.2 billion while 

domestic deposits in accounts less than $100 thousand 

shrank by $1.1 billion. Quarterly growth was strongest for 

money market deposit accounts, which grew by $29.5 billion (2 percent), and other savings deposits which 

increased by $17.2 billion (2.7 percent). 

Insured deposits increased by 0.1 percent during the second quarter, the slowest rate of growth since the second 

quarter of 1999. Insured deposits increased at 5,050 

institutions, remained unchanged at 60 institutions, and 

declined at 4,328 institutions. Deposits insured by the 

Bank Insurance Fund (BIF) decreased by 0.1 percent during the quarter, after increasing in the first quarter by 3.2 

percent.1 Deposits insured by the Savings Association 

Insurance Fund (SAIF) rose by 1.0 percent, following a 

first quarter increase of 1.3 percent. 

The Bank Insurance Fund (BIF) grew by 1.6 percent 

($490 million) during the second quarter of 2002, ending 

the quarter with a balance of $31.19 billion (unaudited). 

The BIF’s second quarter growth was $232 million greater 

than the previous quarter’s. The second quarter’s faster 

growth was attributable to a greater amount of interest 

income from investments and a larger amount of unrealized gains on securities. The increase to the Bank 

Insurance Fund plus the decrease in BIF-insured deposits 

caused the BIF reserve ratio to rise from 1.23 percent on 

March 31 to 1.26 percent on June 30. 

The Savings Association Insurance Fund (SAIF) 

increased during the second quarter of 2002 by 2.5 percent to $11.32 billion (unaudited). Increased income from 

investments, unrealized gains on securities, and a nega1 About two-thirds of the first quarter’s deposit growth was due to a 

reporting change for institutions filing Call reports. Starting in March 

2002 all institutions filing the Call Report are required to report estimated uninsured deposits. Prior to March 2002 reporting estimated 

uninsured deposits was voluntary for these institutions. If uninsured 

deposits were not reported then they were estimated using a simple 

formula ((Amount of domestic deposits>$100K) less (number of 

deposit accounts>$100K times $100K)). An institution’s insured 

deposits are estimated by subtracting estimated uninsured deposits 

from total domestic deposits. 

tive provision for insurance losses made the second quarter growth for the SAIF the largest since it was recapitalized in the third quarter of 1996. The growth of SAIF more 

than offset the quarterly increase in SAIF insured 

deposits, and the reserve ratio rose from 1.36 on March 

31 to 1.38 percent on June 30. This was the largest 

increase in the SAIF reserve ratio since the third quarter 

of 2000. 

Sweeps of brokerage-originated cash management funds 

to FDIC-insured accounts of affiliate banks lost momentum during the quarter. Among insured institutions whose 

brokerage affiliates sweep cash management accounts 

into FDIC-insured accounts, insured brokered deposits 

decreased by $2.1 billion during the second quarter of 

2002. At these institutions, BIF-insured brokered deposits 

fell by $1.2 billion and SAIF-insured brokered deposits 

dropped by $900 million. During the same period, fully 

insured brokered deposits increased by 2.3 percent at all 

other BIF-insured institutions and decreased at all other 

SAIF-insured institutions by .6 percent. 

Two FDIC insured institutions failed during the second 

quarter of 2002, one BIF member commercial bank and 

one SAIF member savings bank. At the time of failure the 

BIF-member commercial bank had $379 million in assets, 

and the SAIF-member savings bank had $50 million in 

assets. For the first six months of 2002 seven BIF member institutions have failed with combined assets of 

$2,403 million at an estimated cost of $611 million. During 

the same period one SAIF-member institutions failed with 

assets of $50 million and an estimated cost of $11 million. 

QUARTERLY PERCENTAGE CHANGE IN 

INSURANCE FUND BALANCES, 1999–2002 

Percent Change (not annualized) 

0 

1.0 1.3 1.4 

0.7 

1.5 

1.0 

1.6 

0.5 

2.0 

-1.7 

0.9 1.1 1.0 

2.5 

0.8 

-0.1 

-1.1 

-0.3 

1.1 

0.1 

2.6 

1.4 1.5 

0.8 0.9 

-4.4 

0.9 

1.6 

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

Bank Insurance Fund (BIF) 

Savings Association 

Insurance Fund (SAIF) 

1999 2000 2001 2002 

FDIC Quarterly Banking Profile 

Second Quarter 2002 15 All FDIC-Insured Institutions 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE I-C. Selected Indicators, FDIC-Insured Institutions* 

(dollar figures in millions) 2002** 2001** 2001 2000 1999 1998 1997 

Number of institutions reporting.............................. 9,464 9,747 9,613 9,904 10,221 10,463 10,922 

Total assets......................................................... $ 8,037,693 $7,634,788 $7,868,670 $7,461,958 $6,883,684 $6,530,951 $6,041,128 

Total deposits...................................................... 5,253,776 5,020,422 5,189,418 4,914,827 4,538,085 4,386,298 4,125,862 

Number of problem institutions................................. 136 102 114 94 79 84 92 

Assets of problem institutions (in billions).................. $40 $24 $40 $24 $10 $11 $6 

Number of failed/assisted institutions..................... 8 ... 2 4 7 8 3 1 

Assets of failed/assisted institutions (in billions)......... $2.45 $0.03 $2.25 $0.41 $1.56 $0.37 $0.03 

** As of June 30. 

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

(dollar figures in millions) 

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

Preliminary 

2nd Quarter 1st Quarter 2nd Quarter %Change 

2002 2002 2001 01:2-02:2 

 9,464 9,520 9,747 -2.9 

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

CONDITION DATA 

2,001,230 1,994,141 1,954,257 2.4 

Total assets..................................................................... $8,037,693 $7,822,619 $7,634,788 5.3

 Loans secured by real estate............................................. 2,627,533 2,557,682 2,488,635 5.6 

1-4 Family residential................................................... 1,588,799 1,543,669 1,537,402 3.3 

Home equity loans...................................................... 223,062 198,960 160,995 38.6 

Multifamily residential property....................................... 129,830 125,478 118,733 9.3 

Commercial real estate................................................... 599,344 585,036 540,931 10.8 

Construction, development, and land................................. 235,887 232,222 221,412 6.5 

Other real estate loans................................................... 73,672 71,277 70,157 5.0 

Commercial & industrial loans 976,704 1,004,547 1,065,505 -8.3

 Loans to individuals...................................................... 728,769 718,040 675,713 7.9

 Credit cards & related plans.......................................... 267,743 264,393 242,311 10.5

 Other loans & leases...................................................... 491,931 477,289 492,855 -0.2

 Less: Unearned income & contra accounts........................ 3,988 4,003 2,945 35.4

 Total loans & leases......................................................... 4,820,950 4,753,556 4,719,763 2.1

 Less: Reserve for losses................................................... 82,365 82,938 73,384 12.2 

Net loans and leases......................................................... 4,738,585 4,670,618 4,646,380 2.0 

Securities........................................................................ 1,530,149 1,488,262 1,335,542 14.6 

Other real estate owned...................................................... 4,904 4,875 4,235 15.8 

Goodwill and other intangibles............................................. 153,516 158,015 126,495 21.4 

All other assets.................................................................. 1,610,539 1,500,843 1,522,136 5.8 

Total liabilities and capital................................................... 8,037,693 7,822,619 7,634,788 5.3

 Deposits....................................................................... 5,253,776 5,172,305 5,020,422 4.6

 Other borrowed funds...................................................... 1,528,765 1,491,277 1,500,893 1.9

 Subordinated debt............................................................ 97,020 96,731 93,476 3.8

 All other liabilities............................................................ 414,537 340,546 354,346 17.0

 Equity capital.................................................................. 743,595 721,761 665,650 11.7 

Loans and leases 30-89 days past due................................. 54,224 57,739 55,028 -1.5 

Noncurrent loans and leases................................................ 65,816 65,012 55,240 19.1 

Restructured loans and leases............................................. 3,298 3,492 2,506 31.6 

Direct and indirect investments in real estate........................... 704 688 881 -20.1 

Mortgage-backed securities................................................ 855,436 814,093 716,572 19.4 

Earning assets.................................................................. 6,974,327 6,824,694 6,648,484 4.9 

FHLB Advances............................................................... 441,614 442,551 438,214 0.8 

Unused loan commitments................................................... 5,514,685 5,383,133 4,934,854 11.7 

INCOME DATA 

Total interest income......................................... 

Total interest expense......................................... 

 Net interest income.......................................... 

Provision for loan and lease losses........................ 

Total noninterest income.................................... 

Total noninterest expense.................................... 

Securities gains (losses).................................... 

Applicable income taxes..................................... 

Extraordinary gains, net....................................... 

 Net income................................................... 

Preliminary Preliminary 

First Half First Half 2nd Quarter 2nd Quarter %Change 

2002 2001 %Change 2002 2001 01:2-02:2 

$217,337 $257,913 -15.7 $109,113 $126,434 -13.7 

79,221 135,396 -41.5 40,012 64,085 -37.6

138,116 122,517 12.7 69,102 62,349 10.8 

24,125 18,179 32.7 11,791 9,563 23.3 

90,075 85,215 5.7 45,343 42,292 7.2 

128,230 124,528 3.0 64,549 62,654 3.0 

3,700 3,905 -5.2 2,319 1,907 21.6 

26,511 23,421 13.2 13,221 11,842 11.6 

45 -397 N/M 117 -31 N/M

53,068 45,112 17.6 27,320 22,458 21.6 

* Excludes insured branches of foreign banks (IBAs). N/M - Not meaningful 

FDIC Quarterly Banking Profile 

All FDIC-Insured Institutions 16 Second Quarter 2002 
 

 

 

 

 

TABLE III-C. Selected Insurance Fund Indicators* 

(dollar figures in millions) Preliminary 

2nd Quarter 1st Quarter 2nd Quarter %Change 

2002 2002 2001 01:2-02:2 

Bank Insurance Fund 

Reserve ratio (%)..................................................................... 1.26 1.23 1.33 -5.6 

Fund balance (unaudited)......................................................... $31,187 $30,697 $31,681 -1.6 

Estimated insured deposits...................................................... 2,482,836 2,485,809 2,381,111 4.3 

SAIF-member Oakars............................................................ 83,732 80,944 61,558 36.0 

BIF-members........................................................................ 2,399,104 2,404,865 2,319,553 3.4 

Assessment base.................................................................. 3,631,687 3,590,199 3,415,156 6.3 

SAIF-member Oakars............................................................ 85,215 82,366 62,628 36.1 

BIF-members........................................................................ 3,546,472 3,507,833 3,352,528 5.8 

Savings Association Insurance Fund 

Reserve ratio (%)..................................................................... 1.38 1.36 1.40 -1.4 

Fund balance (unaudited)......................................................... $11,323 $11,049 $10,792 4.9 

Estimated insured deposits...................................................... 820,464 812,769 772,428 6.2 

BIF-member Oakars............................................................... 345,912 340,770 317,907 8.8 

SAIF-member Sassers......................................................... 95,688 78,717 71,625 33.6 

Other SAIF members............................................................ 378,864 393,283 382,896 -1.1 

Assessment base.................................................................. 925,679 913,145 861,252 7.5 

BIF-member Oakars............................................................... 348,400 343,129 318,963 9.2 

SAIF-member Sassers......................................................... 114,598 94,765 88,412 29.6 

Other SAIF members............................................................ 462,682 475,250 453,876 1.9 

Insurance Fund Reserve Ratios* Fund Balances and Insured Deposits* 

Percent of Insured Deposits ($Millions) 

BIF BIF-Insured SAIF SAIF-Insured 

Balance Deposits Balance Deposits 

12/97 28,293 2,056,558 9,368 689,915 

12/98 29,612 2,134,425 9,840 716,029 

12/99 29,414 2,151,454 10,281 717,591 

12/00 30,975 2,299,932 10,759 755,156 

3/01 31,426 2,371,197 10,973 768,580 

Target 6/01 31,681 2,381,111 10,792 772,428 

Ratio 

1.25 9/01 31,834 2,403,880 10,815 778,880 

12/01 30,439 2,408,350 10,935 802,358 

3/02 30,697 2,485,809 11,049 812,769 

6/02 31,187 2,482,836 11,323 820,464 

12/97 12/98 12/99 12/00 3/01 6/01 9/01 12/01 3/02 6/02 

1.38 1.39 

1.37 

1.35 

1.33 1.33 1.32 

1.26 

1.23 

1.26 

1.36 1.37 

1.43 1.43 1.43 

1.40 1.39 

1.36 1.36 

1.38 

BIF 

SAIF 

* A reserve ratio is the fund balance as a percentage of estimated insured deposits. As with other Call Report items, prior 

periods may reflect adjustments. As a result, prior period reserve ratios may differ from previously reported values. Only year 

end fund balances are audited by GAO. BIF-insured deposit totals include U.S. branches of foreign banks. 

TABLE IV-C. Closed/Assisted Institutions 

(dollar figures in millions) 

BIF Members 

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

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

SAIF Members 

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

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

**Through June 30. 

2002** 2001** 2001 2000 1999 1998 1997 

7 

$2,403 

2 

$28 

3 

$54 

6 

$378 

7 

$1,490 

3 

$371 

1 

$27 

1 

$50 

0 

$0 

1 

$2,200 

1 

$30 

1 

$71 

0 

$0 

0 

$0 

FDIC Quarterly Banking Profile 

Second Quarter 2002 17 All FDIC-Insured Institutions 
 

 

 

 

TABLE V-C. Selected Indicators, By Fund Membership* 

(dollar figures in millions) 2002** 2001** 2001 2000 1999 1998 1997 

BIF Members 

Number of institutions reporting................................................... 8,208 

BIF-member Oakars............................................................ 785 

Other BIF-members............................................................... 7,423 

Total assets...........................................................................$ 6,974,962 

Total deposits........................................................................ 4,586,933 

Net income........................................................................... 46,738 

Return on assets (%)............................................................... 1.36 

Return on equity (%)............................................................... 14.78 

Noncurrent assets plus OREO to assets (%)................................. 0.93 

Number of problem institutions................................................... 111 

Assets of problem institutions................................................... $32,028 

Number of failed/assisted institutions....................................... 7 ...

Assets of failed/assisted institutions............................................. $2,403 

SAIF Members 

Number of institutions reporting................................................... 1,256 

SAIF-member Oakars............................................................ 132 

Other SAIF-members............................................................ 1,124 

Total assets...........................................................................$ 1,062,732 

Total deposits........................................................................ 666,843 

Net income........................................................................... 6,330 

Return on assets (%)............................................................... 1.21 

Return on equity (%)............................................................... 13.86 

Noncurrent assets plus OREO to assets (%)................................. 0.73 

Number of problem institutions................................................... 25 

Assets of problem institutions................................................... $7,673 

Number of failed/assisted institutions....................................... 1 ...

Assets of failed/assisted institutions............................................. $50 

8,430 

748 

7,682 

$6,641,201 

4,411,904 

40,467 

1.23 

14.19 

0.80 

76 

$12,152 

2 

$28 

1,317 

128 

1,189 

$993,587 

608,518 

4,646 

0.96 

11.64 

0.68 

26 

$11,537 

0 

$0 

8,326 

763 

7,563 

$6,856,933 

4,567,594 

76,697 

1.14 

12.94 

0.90 

90 

$31,881 

3 

$54 

1,287 

130 

1,157 

$1,011,737 

621,823 

10,622 

1.11 

13.46 

0.75 

24 

$7,923 

1 

$2,200 

8,571 

743 

7,828 

$6,509,796 

4,337,727 

73,637 

1.18 

13.90 

0.72 

74 

$10,787 

6 

$378 

1,333 

123 

1,210 

$952,161 

577,100 

8,070 

0.89 

11.12 

0.65 

20 

$13,053 

1 

$30 

8,834 

744 

8,090 

$5,980,153 

3,987,382 

73,967 

1.30 

15.11 

0.62 

66 

$4,450 

7 

$1,490 

1,387 

123 

1,264 

$903,532 

550,703 

8,450 

0.99 

11.97 

0.64 

13 

$5,524 

1 

$71 

9,031 9,404 

745 778 

8,286 8,626 

$5,702,774 $5,285,403 

3,843,816 3,611,453 

64,335 61,459 

1.18 1.22 

13.80 14.44 

0.64 0.67 

68 73 

$5,326 $4,598 

3 1 

$371 $27 

1,432 1,518 

116 112 

1,316 1,406 

$828,177 $755,724 

542,481 514,409 

7,598 6,486 

0.98 0.94 

11.34 11.13 

0.80 0.98 

16 19 

$5,992 $1,662 

0 0 

$0 $0 

* Excludes insured branches of foreign banks (IBAs). 

** Through June 30, ratios annualized where appropriate. 

TABLE VI-C. Estimated FDIC-Insured Deposits by Fund Membership and Type of Institution 

(dollar figures in millions) 

June 30, 2002 

Commercial Banks and Savings Institutions 

Number of Total Domestic 

Institutions Assets Deposits* 

Estimated Insured Deposits 

BIF SAIF Total 

FDIC-Insured Commercial Banks............................................. 7,966 6,749,662 3,807,239 2,252,225 370,710 2,622,935 

BIF-member..................................................................... 7,859 6,597,875 3,704,477 2,225,967 312,442 2,538,409 

SAIF-member.................................................................. 107 151,787 102,762 26,258 58,268 84,526 

FDIC-Supervised............................................................... 4,932 1,247,657 930,844 618,486 79,045 697,531 

OCC-Supervised............................................................... 2,118 3,739,495 2,025,600 1,195,169 213,560 1,408,729 

Federal Reserve-Supervised................................................ 955 1,762,509 850,795 438,571 78,105 516,675 

FDIC-Insured Savings Institutions............................................. 1,498 1,288,032 805,633 229,375 449,754 679,129 

OTS-Supervised Savings Institutions....................................... 995 972,225 581,499 101,807 388,520 490,326 

BIF-member..................................................................... 38 123,303 61,808 46,750 9,656 56,406 

SAIF-member.................................................................. 957 848,921 519,691 55,057 378,864 433,921 

FDIC-Supervised State Savings Banks.................................... 503 315,807 224,133 127,568 61,234 188,802 

BIF-member..................................................................... 311 253,784 179,842 125,151 23,814 148,965 

SAIF-member..................................................................

Total Commercial Banks and 

 192 62,023 44,291 2,417 37,420 39,837 

Savings Institutions................................................... 9,464 8,037,693 4,612,871 2,481,600 820,464 3,302,063 

BIF-member........................................................................ 8,208 6,974,962 3,946,127 2,397,867 345,912 2,743,779 

SAIF-member.....................................................................

Other FDIC-Insured Institutions 

 1,256 1,062,732 666,744 83,732 474,552 558,284 

U.S. Branches of Foreign Banks............................................. 18 9,998 5,321 1,237 0 1,237 

Total FDIC-Insured Institutions....................................... 9,482 8,047,692 4,618,193 2,482,836 820,464 3,303,300 

* Excludes $641 billion in foreign office deposits, which are uninsured. 

FDIC Quarterly Banking Profile 

All FDIC-Insured Institutions 18 Second Quarter 2002 
TABLE VII-C. Assessment Base Distribution and Rate Schedules 

BIF Assessment Base Distribution 

Assessable Deposits in Millions as of June 30, 2002 

Supervisory and Capital Ratings for Second Semiannual Assessment Period, 2002 

Capital Group 

Supervisory Risk Subgroup 

A B C 

1. Well-capitalized 

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

Assessable deposit base...........................

2. Adequately capitalized 

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

Assessable deposit base...........................

3. Undercapitalized 

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

Assessable deposit base...........................

7,542 

 $3,470,795 

125 

 $23,407 

3 

 $451 

91.7 

95.6 

1.5 

0.6 

0.0 

0.0 

433 5.3 

$109,516 3.0 

13 0.2 

$1,270 0.0 

0 0.0 

$0 0.0 

90 

$22,641 

13 

$2,340 

7 

$1,267 

1.1 

0.6 

0.2 

0.1 

0.1 

0.0 

Note: "Number" reflects the number of BIF members; "Base" reflects the BIF-assessable deposits held by both BIF and SAIF members. 

Institutions are categorized based on capitalization and a supervisory subgroup rating, which is generally determined 

by on-site examinations. 

SAIF Assessment Base Distribution 

Assessable Deposits in Millions as of June 30, 2002 

Supervisory and Capital Ratings for Second Semiannual Assessment Period, 2002 

Capital Group 

Supervisory Risk Subgroup 

A B C 

1. Well-capitalized 

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

Assessable deposit base...........................

2. Adequately capitalized 

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

Assessable deposit base...........................

3. Undercapitalized 

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

Assessable deposit base...........................

1,139 

 $878,998 

7 

 $1,814 

0 

 $0 

90.7 

95.0 

0.6 

0.2 

0.0 

0.0 

78 6.2 

$38,382 4.1 

6 0.5 

$490 0.1 

0 0.0 

$0 0.0 

17 

$5,471 

7 

$451 

2 

$73 

1.4 

0.6 

0.6 

0.0 

0.2 

0.0 

Note: "Number" reflects the number of SAIF members; "Base" reflects the SAIF-assessable deposits held by both BIF and SAIF members. 

Institutions are categorized based on capitalization and a supervisory subgroup rating, which is generally determined 

by on-site examinations. 

Assessment Rate Schedules 

Second Semiannual 2002 Assessment Period 

Cents Per $100 of Assessable Deposits 

Capital Group 

Supervisory Risk Subgroup 

A B C 

1. Well Capitalized....................................... 

2. Adequately Capitalized.............................. 

3. Undercapitalized.......................................

0 

3 

 10 

3 

10 

24 

17 

24 

27 

Note: Rates for the BIF and the SAIF are set separately by the FDIC. 

Currently, the rate schedules are identical. 

FDIC Quarterly Banking Profile 

Second Quarter 2002 19 All FDIC-Insured Institutions 
NUMBER OF FDIC-INSURED “PROBLEM” INSTITUTIONS, 

1994–2002 

Number of Institutions 

12/94 12/95 12/96 12/97 12/98 12/99 3/00 6/00 9/00 12/00 3/01 6/01 9/01 12/01 3/02 6/02 

318 

193 

117 

92 84 79 87 89 90 94 95 102 94 

114 124 

136 

0 

50 

100 

150 

200 

250 

300 

350 

Saving Institutions 

Commercial Banks 

Saving Institutions 71 49 35 21 15 13 15 16 15 18 17 22 20 19 22 21 

Commercial Banks 247 144 82 71 69 66 72 73 75 76 78 80 74 95 102 115 

ASSETS OF FDIC-INSURED “PROBLEM” INSTITUTIONS, 

1994–2002 

$ Billions 

$72 

$31 

$12 

$6 

$11 $10 $10 

$19 $19 

$24 $23 $24 

$18 

$40 

$52 

$40 

0 

10 

20 

30 

40 

50 

60 

70 

80 

Savings Institutions 

Commercial Banks 

12/94 12/95 12/96 12/97 12/98 12/99 3/00 6/00 9/00 12/00 3/01 6/01 9/01 12/01 3/02 6/02 

Saving Institutions 39 14 7 2 6 6 5 8 7 7 6 7 4 4 15 4 

Commercial Banks 33 17 5 5 5 4 5 11 12 17 17 17 14 36 37 36 

FDIC Quarterly Banking Profile 

All FDIC-Insured Institutions 20 Second Quarter 2002 
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. The information presented in the FDIC Quarterly Banking Profile is divided into the following groups of institutions: 

FDIC-Insured Commercial Banks 

(Tables I-A through V-A.) 

This section covers commercial banks insured by the FDIC 

either through the Bank Insurance Fund (BIF) or through the 

Savings Association Insurance Fund (SAIF). These institutions 

are regulated by and submit financial reports to one of the 

three federal commercial bank regulators (the Board of 

Governors of the Federal Reserve System, the FDIC or the 

Office of the Comptroller of the Currency). 

FDIC-Insured Savings Institutions 

(Tables I-B through V-B.) 

This section covers savings institutions insured by either BIF 

or SAIF that operate under state or federal banking codes 

applicable to thrift institutions. Savings institutions in conservatorships are excluded from these tables while in conservatorship, where applicable. The institutions covered in this 

section are regulated by and submit financial reports to one of 

two Federal regulators — the FDIC or the Office of Thrift 

Supervision (OTS). 

FDIC-Insured Institutions by Insurance Fund 

(Tables I-C through VII-C.) 

Summary balance-sheet and earnings data are provided for 

commercial banks and savings institutions according to insurance fund membership. BIF-member institutions may acquire 

SAIF-insured deposits, resulting in institutions with some 

deposits covered by both insurance funds. Also, SAIF members may acquire BIF-insured deposits. The insurance fund 

membership does not necessarily reflect which fund insures 

the largest percentage of an institution’s deposits. Therefore, 

the BIF-member and the SAIF-member tables each include 

deposits from both insurance funds. Depository institutions 

that are not insured by the FDIC through either the BIF or SAIF 

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 charter. 

DATA SOURCES 

The financial information appearing in this publication is 

obtained primarily from the Federal Financial Institutions 

Examination Council (FFIEC) Call Reports and the OTS Thrift 

Financial Reports submitted by all FDIC-insured depository 

institutions. This information is stored on and retrieved from 

the FDIC’s Research Information System (RIS) data base. 

COMPUTATION METHODOLOGY 

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. Parent 

institutions are required to file consolidated reports, while their 

subsidiary financial institutions are still required to file separate 

reports. Data from subsidiary institution reports are included in 

the Quarterly Banking Profile tables, which can lead to doublecounting. No adjustments are made for any double-counting of 

subsidiary data. 

All asset and liability figures used in calculating performance 

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

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

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

includes the results of all merged institutions. No adjustments 

are made for “purchase accounting” mergers. Growth rates 

represent the percentage change over a 12-month period in 

totals for institutions in the base period to totals for institutions 

in the current period. 

All data are collected and presented based on the location of 

each reporting institution’s main office. Reported data may 

include assets and liabilities located outside of the reporting 

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

their charters, resulting in an inter-industry migration, e.g., savings institutions can convert to commercial banks or commercial banks may convert to savings institutions. These 

situations can affect state and regional statistics. 

ACCOUNTING CHANGES 

Goodwill and intangible assets — FAS 141 terminates the 

use of pooling-of-interest accounting for business combinations after 2001 and requires purchase accounting. Under 

FAS 142 amortization of goodwill is eliminated. Only intangible assets other than goodwill are amortized each quarter. In 

addition companies are required to test for impairment of 

both goodwill and other intangibles once each fiscal year. 

The year 2002, the first fiscal year affected by this accounting change, has been designated a transitional year and the 

amount of initial impairments are to be recorded as extraordinary losses on a “net of tax” basis (and not as noninterest 

expense). Subsequent annual review of intangibles and 

goodwill impairment may require additional noninterest 

expense recognition. 

FASB Statement No. 133 Accounting for Derivative 

Instruments and Hedging Activities — establishes new 

accounting and reporting standards. Derivatives were previously off-balance sheet items, but beginning in 2001 all 

banks must recognize derivatives as either assets or liabilities on the balance sheet, measured at fair value. A derivative may be specifically designated as a “fair value hedge,” a 

“cash flow hedge,” or a hedge of a foreign currency exposure. The accounting for changes in the value of a derivative 

(gains and losses) depends on the intended use of the derivative, its resulting designation, and the effectiveness of the 

hedge. Derivatives held for purposes other than trading are 

reported as “other assets” (positive fair values) or “other liabilities” (negative fair values). For a fair value hedge, the gain 

or loss is recognized in earnings and “effectively” offsets loss 

or gain on the hedged item attributable to the risk being 

hedged. Any ineffectiveness of the hedge could result in a 

net gain or loss on the income statement. Accumulated net 

gains (losses) on cash flow hedges are recorded on the balance sheet as “accumulated other comprehensive income” 

and the periodic change in the accumulated net gains (losses) for cash flow hedges is reflected directly in equity as the 

value of the derivative changes. 

Initial transition adjustments upon adoption of FAS 133 are 

reported as adjustments to net income in the income statement as extraordinary items. Upon implementing FAS 133, 

a bank may transfer any debt security categorized as heldto-maturity into the available-for-sale category or the trading 

category. Unrealized gains (losses) on transferred held-tomaturity debt securities on the date of initial application must 

FDIC Quarterly Banking Profile 

Second Quarter 2002 21 Notes to Users 
be reflected as an adjustment to net income if transferred to 

the trading category or an adjustment to equity if transferred 

to the available-for-sale category. 

Subchapter S Corporations — The Small Business Job 

Protection Act of 1996 changed the Internal Revenue Code 

to allow financial institutions to elect Subchapter S corporation status, beginning in 1997. 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. Its taxable 

income flows through to its shareholders in proportion to their 

stock ownership, and the shareholders generally pay federal 

income taxes on their share of this taxable income. This can 

have the effect of reducing institutions’ reported taxes and 

increasing their after-tax earnings. 

The election of Subchapter S status may result in an increase in shareholders’ personal tax liability. Therefore, some 

S corporations may increase the amount of earnings distributed as dividends to compensate for higher personal taxes. 

DEFINITIONS (in alphabetical order) 

Accumulated other comprehensive income — includes 

net unrealized gains/losses on available-for-sale securities, 

accumulated net gains/losses on cash flow hedges, cumulative foreign currency translation adjustments, and minimum 

pension liability adjustments. 

All other assets — total cash, balances due from depository 

institutions, premises, fixed assets, direct investments in real 

estate, investment in unconsolidated subsidiaries, customers’ liability on acceptances outstanding, assets held in trading accounts, federal funds sold, securities purchased with 

agreements to resell, fair market value of derivatives, and 

other assets. 

All other liabilities — bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance 

sheet credit losses, fair market value of derivatives, and 

other liabilities. 

Assessment base distribution — assessable deposits 

consist of BIF and SAIF deposits in banks’ domestic offices 

with certain adjustments. Each institution’s assessment 

depends on its assigned risk-based capital category and 

supervisory risk subgroup: 

Total Tier 1 

Risk-Based Risk-Based Tier 1 Tangible 

(Percent) Capital * Capital * Leverage Equity 

Well-capitalized >10 and >6 and >5 — 

Adequately 

capitalized >8 and >4 and >4 — 

Undercapitalized >6 and >3 and >3 — 

Significantly 

undercapitalized <6 or <3 or <3 and >2 

Critically 

undercapitalized — — — <2 

*As a percentage of risk-weighted assets. 

For purpose of BIF and SAIF assessments, risk-based 

assessment rules combine the three lowest capital rating 

categories into a single “undercapitalized” group. Supervisory risk subgroup assignments are based on supervisory 

ratings. Generally, the strongest institutions (those rated 1 or 

2) are in subgroup A, those rated 3 are in subgroup B, and 

those rated 4 or 5 are in subgroup C. 

BIF-insured deposits (estimated) — the portion of estimated insured deposits that is insured by the BIF. For SAIFmember “Oakar” institutions, it represents the adjusted 

attributable amount acquired from BIF members. 

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. 

Derivatives (notional amount) — represents the sum of the 

following: interest-rate contracts (defined as the “notional” 

value of interest-rate swap, futures, forward and option contracts), foreign-exchange-rate contracts, commodity contracts and equity contracts (defined similarly to interest-rate 

contracts). 

Futures and forward contracts — a contract 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 — a contract 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 — an obligation between two parties to exchange a 

series of cash flows at periodic intervals (settlement dates), 

for a specified period. The cash flows of a swap are either 

fixed, or determined for each settlement date by multiplying 

the quantity (notional principal) of the underlying variable or 

index by specified reference rates or prices. Except for currency swaps, the notional principal is used to calculate each 

payment but is not exchanged. 

Direct and indirect investments in real estate — excludes 

loans secured by real estate and property acquired through 

foreclosure. 

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. While the uninsured estimate is calculated as the 

sum of the excess amounts in accounts over $100,000, beginning June 30, 2000 the amount of estimated uninsured 

deposits was adjusted to consider a financial institution’s better estimate. Since March 31, 2002, all institutions provide a 

reasonable estimate of uninsured deposits from their systems and records. 

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 

FDIC Quarterly Banking Profile 

Notes to Users 22 Second Quarter 2002 
another healthy institution. This action may require the FDIC 

to provide funds to cover losses. An institution is defined as 

“assisted” when the institution remains open and receives 

some insurance funds in order to continue operating. 

FHLB advances — all borrowings by FDIC insured institutions from the Federal Home Loan Bank System (FHLB), as 

reported by Call Report filers and by TFR filers. 

Goodwill and other intangibles — intangible assets 

include servicing rights, purchased credit card relationships 

and other identifiable intangible assets. 

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. 

Mortgage-backed securities — certificates of participation 

in pools of residential mortgages and collateralized mortgage 

obligations issued or guaranteed by government-sponsored 

or private enterprises. Also, see “Securities”, below. 

Net charge-offs — total loans and leases charged off 

(removed from balance sheet because of uncollectibility), 

less amounts recovered on loans and leases previously 

charged off. 

Net interest margin — the difference between interest and 

dividends earned on interest-bearing assets and interest 

paid to depositors and other creditors, expressed as a percentage of average earning assets. No adjustments are 

made for interest income that is tax exempt. 

Net operating income — income excluding discretionary 

transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from operating income have been adjusted to 

exclude the portion applicable to securities gains (or losses). 

Noncurrent assets — the sum of loans, leases, debt securities and other assets that are 90 days or more past due, or 

in nonaccrual status. 

Noncurrent loans & leases — the sum of loans and leases 

90 days or more past due, and loans and leases in nonaccrual status. 

Number of institutions reporting — the number of institutions that actually filed a financial report. 

Other borrowed funds — federal funds purchased, securities sold with agreements to repurchase, demand notes 

issued to the U.S. Treasury, FHLB advances, other borrowed 

money, mortgage indebtedness, obligations under capitalized leases and trading liabilities, less revaluation losses on 

assets held in trading accounts. 

Other real estate owned — primarily foreclosed property. 

Direct and indirect investments in real estate ventures are 

excluded. The amount is reflected net of valuation 

allowances. For institutions that file a Thrift Financial Report 

(TFR), the valuation allowance subtracted also includes 

allowances for other repossessed assets. Also, for TFR filers 

the components of other real estate owned are reported 

gross of valuation allowances. 

Percent of institutions with earnings gains — the percent 

of institutions that increased their net income (or decreased 

their losses) compared to the same period a year earlier. 

“Problem” institutions — federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is 

based on a scale of 1 to 5 in ascending order of supervisory 

concern. “Problem” institutions are those institutions with 

financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the 

degree of risk and supervisory concern, they are rated either 

a “4” or “5”. For all BIF-member institutions, and for all SAIFmember institutions for which the FDIC is the primary federal regulator, FDIC composite ratings are used. For all 

SAIF-member institutions whose primary federal regulator is 

the OTS, the OTS composite rating is used. 

Reserves for losses — the allowance for loan and lease 

losses on a consolidated basis. Prior to March 31, 2001 

reserves for losses included the allocated transfer risk 

reserve, which is no longer included as part of the loss 

reserve, but netted from loans and leases. 

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. 

Return on assets — net income (including gains or losses 

on securities and extraordinary items) as a percentage of 

average total assets. The basic yardstick of bank profitability. 

Return on equity — net income (including gains or losses 

on securities and extraordinary items) as a percentage of 

average total equity capital. 

Risk-weighted assets — assets adjusted for risk-based 

capital definitions which include on-balance-sheet as well as 

off-balance-sheet items multiplied by risk-weights that range 

from zero to 100 percent. A conversion factor is used to 

assign a balance sheet equivalent amount for selected offbalance-sheet accounts. 

SAIF-insured deposits (estimated) — the portion of estimated insured deposits that is insured by the SAIF. For BIFmember “Oakar” institutions, it represents the adjusted 

attributable amount acquired from SAIF members. 

Securities — excludes securities held in trading accounts. 

Banks’ securities portfolios consist of securities designated 

as “held-to-maturity”, which are reported at amortized cost 

(book value), and securities designated as “available-forsale”, reported at fair (market) value. 

Securities gains (losses) — realized gains (losses) on 

held-to-maturity 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. 

Troubled real estate asset rate — noncurrent real estate 

loans plus other real estate owned as a percent of total real 

estate loans and other real estate owned. 

Unearned income & contra accounts — unearned income 

for Call Report filers only. 

Unused loan commitments — includes credit card lines, 

home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused 

commitments to originate or purchase loans. 

Volatile liabilities — the sum of large-denomination time 

deposits, foreign-office deposits, federal funds purchased, 

securities sold under agreements to repurchase, and other 

borrowings. 

Yield on earning assets — total interest, dividend and fee 

income earned on loans and investments as a percentage of 

average earning assets. 

FDIC Quarterly Banking Profile 

Second Quarter 2002 23 Notes to Users