Donald E. Powell, Chairman 

Third 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 BANKING PERFORMANCE – THIRD QUARTER, 2002 

� Gains On Securities Sales Help Keep Earnings Near Record Level 

� Weakness In Overseas Operations Limits Industry Profits 

� Margins Improve At Community Banks, Decline At Larger Institutions 

� Strong Mortgage Demand Fuels Growth In Loans 

� Asset-Quality Problems Continue To Grow At Large Banks 

Profitability of Banks’ Domestic 

Operations Remains Strong 

Weaknesses in commercial and overseas business lines were mitigated by beneficial effects 

from low interest rates and strength in consumer 

loan demand in the third quarter of 2002, as commercial bank earnings almost set a new record. 

Insured commercial banks earned $23.3 billion in 

the quarter, falling just $25 million short of the 

quarterly earnings record, set in the second quarter of 2002. The slight decline in net income was 

caused primarily by sharply lower income from 

banks’ international operations, which fell by $1.2 

billion (58.6 percent). Earnings were also held 

down by higher expenses for loan losses, reduced 

income from market-sensitive sources, such as 

trading and investment banking activities, fiduciary 

income, and venture capital investments, and by 

lower servicing fees caused by declining values of 

mortgage servicing assets. The industry’s net income from domestic operations was $1.2 billion 

(5.5 percent) higher than in the second quarter, but 

much of the improvement was in nonrecurring 

items, rather than in revenues from ongoing operations. The greatest revenue increase occurred in 

gains on sales of securities, which were $1.5 billion (145.8 percent) higher than in the second 

quarter. Income from securitization activities and 

from sales of loans and other assets was higher 

than in the previous quarter, contributing to a $1.1 

billion (2.5 percent) increase in the industry’s total 

noninterest income. Net interest income also 

improved, increasing by $947 million (1.6 percent). 

Although 5 of the 10 largest commercial banks 

had lower earnings than in the second quarter, 

more than 60 percent of all banks reported earnings increases. The average ROA in the third 

quarter was 1.37 percent, down from the record 

1.41 percent in the second quarter, even though a 

majority of banks (55.6 percent) saw their ROAs 

improve. Almost two-thirds of all banks (65.7 percent) had an ROA of 1 percent or better in the 

third quarter. Quarterly earnings were $6.0 billion 

(34.4 percent) higher than a year ago, when 

sharply higher loan-loss provisions at many large 

banks depressed industry results. 

NET OPERATING INCOME IS DOWN SLIGHTLY 

FROM PREVIOUS QUARTER’S RECORD LEVEL 

$ Billions 

25 Securities and Other 

Gains/Losses, Net 

20 19.4

18.0 17.7 16.9 15.916.1 15.114.7 15 

10 

5 

0 

Net Operating Income 23.4 23.3 

21.7 

19.5 19.3 19.8 19.1 

17.418.5 17.6 

14.6 

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

1998 1999 2000 2001 2002 

Performance Continues To Outstrip 

2001 Results 

Through the first nine months of 2002, commercial 

banks earned $68.5 billion, up $12.8 billion (23.0 

percent) from the same period in 2001. The industry’s ROA so far this year is 1.37 percent, compared to 1.17 percent for the first three quarters of 

2001. Almost three out of every four banks (72.6 

percent) reported improved year-to-date earnings. 

The main source of the earnings improvement has 

been higher net interest income (up $19.3 billion, 

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. 
or 12.2 percent). Net interest margins are above the 

levels of a year ago, and interest-earning assets have 

grown by 6.2 percent during the past 12 months. 

These improvements, along with a $10.7 billion (9.2 

percent) increase in noninterest income, have outweighed a $7.2 billion (25.7 percent) rise in provisions 

for loan losses. Almost half of the increase in loss provisions this year (46.5 percent) has come from higher 

provisions for loan losses in banks’ international operations. 

BANKS’ FOREIGN OPERATIONS ARE 

PROVIDING LESS SUPPORT TO EARNINGS 

Earnings from International Operations, % of Net Income 

16 

12 

8 

4 

0 

Interest-Rate Environment Helps Community 

Banks’ Net Interest Margins 

The industry’s net interest margin fell for the second 

consecutive quarter, but a $149.5 billion (2.6 percent) 

increase in interest-earning assets during the quarter 

helped lift net interest income above the level of the 

second quarter. The average margin declined from 

4.11 percent to 4.08 percent, although a majority of 

commercial banks reported margin increases. Smaller 

institutions rely more on retail (core) deposits to fund 

their assets, and with interest rates at historic lows, 

many community banks have difficulty lowering the 

COMMUNITY BANKS’ MARGINS IMPROVE FOR 

SECOND CONSECUTIVE QUARTER 

Net Interest Margin (%) 

5.0 

4.5 

4.0 

3.5 

1998 1999 2000 2001 2002 

1998 1999 2000 2001 2002 

Assets < $100 Million 

Assets > $100 Million 

4.43 

4.06 

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

interest rates they pay to retail depositors when shortterm interest rates decline. As a result, margins at 

community banks have tended to not improve until 

after rates stabilize. Larger banks rely more on interest-sensitive liabilities, which reprice quickly when 

short-term interest rates change; their margins have 

tended to improve when rates are falling, but tend to 

narrow when interest rates are stable. 

C&I Loans At Large Banks Remain A Source 

Of Asset-Quality Woes 

Credit-quality problems continued to grow in commercial and industrial (C&I) loan portfolios at large banks. 

The industry’s noncurrent rate on C&I loans increased 

from 2.87 to 3.01 percent during the quarter, the first 

time since the first quarter of 1993 that it has been 

above 3 percent. Unlike the second quarter, when rising levels of noncurrent C&I loans were caused by 

non-U.S. customers, most of the $845 million (3.1 percent) increase in the third quarter occurred in loans to 

domestic borrowers. Noncurrent loans to non-U.S. 

borrowers were up by only $59 million (1.0 percent). 

As has been the case throughout most of the period 

that troubled C&I loans have been rising, fewer than 

one out of three commercial banks had an increase in 

noncurrent C&I loans during the third quarter. Banks 

charged-off $4.7 billion in C&I loans during the quarter, 

$1.4 billion (43.5 percent) more than in the third quarter of 2001. Almost a quarter (23.7 percent) of these 

charge-offs consisted of loans to non-U.S. C&I borrowers. C&I charge-offs accounted for 41.1 percent of 

all loans charged-off by commercial banks in the quarter. 

Loss Rate On Credit Cards Remains High 

Charge-offs of credit card loans totaled $3.9 billion in 

the third quarter, an increase of $1.0 billion (35.5 percent) compared to a year ago, and $128 million (3.4 

percent) more than banks charged-off in the second 

quarter. The annualized net charge-off rate on credit 

card loans in the quarter was 6.04 percent, slightly 

below the 6.08 percent rate in the second quarter, but 

above the 5.20 percent rate of a year earlier. This is 

the fourth consecutive quarter that the loss rate on 

banks’ credit card loans has been above 6 percent, a 

level never previously reached in any quarter during 

the 19 years that banks have reported credit card 

charge-offs. Despite the high level of charge-offs, the 

amount of credit-card loans that were noncurrent 

increased by $685 million (13.6 percent) during the 

quarter. Also, the amount of credit cards that were 30­

89 days delinquent on scheduled payments increased 

by $1.0 billion (15.8 percent). Over the last 12 months, 

noncurrent credit-card loans have increased by $972 

million (20.4 percent), and 30-89 day delinquencies 

are up by $1.4 billion (22.5 percent). Despite the historically high loss levels, the profitability of credit-card 

lending continued to improve, as net interest margins 

FDIC Quarterly Banking Profile 

FDIC-Insured Commercial Banks 2 Third Quarter 2002 
C&I LOANS AND CREDIT CARDS ACCOUNT FOR
 

MOST OF THE INDUSTRY’S CREDIT LOSSES
 

All 

Other 

5.5% C&I 

41.1% 

Credit Cards 

34.0% 

Other 

Consumer 

13.3% 

Real
 

Estate
 

6.1%
 

remained high, and income from fees and securitization activities increased. 

Growth In Equity Capital And Reserves Lags 

Growth In Assets, Loans 

Equity capital increased by $18.5 billion (3.0 percent) 

during the quarter, keeping pace with the growth in 

banking assets, as the industry’s equity-to-assets ratio 

remained at 9.22 percent. This level is only five basis 

points below the 60-year high of 9.27 percent reached 

at the end of the first quarter. Retained earnings contributed $8.0 billion, compared to just $3.8 billion in the 

third quarter of 2001. Reserves increased by $1.3 billion (1.7 percent), as loss provisions of $12.7 billion 

exceeded net charge-offs of $11.5 billion. However, 

strong loan growth caused the ratio of reserves to total 

loans to decline from 1.87 percent to 1.85 percent. 

Also, the increase in noncurrent loans caused the 

TROUBLED COMMERCIAL LOANS CONTINUE 

TO INCREASE $ Billions 

35 

30 Quarterly Net Charge-offs 

Noncurrent Loans 

32.5 

7.4 

4.7 

25 

20 

15 

27.7 

10 

5 

0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 

1997 1998 1999 2000 2001 2002 

industry’s “coverage ratio” to decline from $1.28 in 

reserves for every $1.00 of noncurrent loans, to $1.24, 

the eleventh consecutive quarter that this ratio has 

declined. At its peak, in mid-1998, the coverage ratio 

stood at $1.94. 

Mortgage Activity Accounts For Largest 

Share Of Industry Asset Growth 

Commercial bank assets increased by $201 billion (3.0 

percent) during the quarter, as mortgage lending activity contributed to growth in banks’ loans and securities 

portfolios. Residential mortgage loans increased by 

$58.1 billion (7.1 percent), while home equity loans 

grew by $13.3 billion (7.1 percent). Bank holdings of 

mortgage-backed securities increased by $33.7 billion 

(5.1 percent). Together, these assets accounted for 

52.3 percent of the increase in commercial bank 

assets during the quarter. Strong growth was also 

reported in credit card loans (up $17.3 billion, or 6.9 

percent), loans to depository institutions (up $10.3 billion, or 8.1 percent), and real estate construction and 

development loans (up $7.2 billion, or 3.6 percent). 

The industry’s C&I loans declined for the seventh consecutive quarter, falling by $15.0 billion (1.6 percent), 

even though a majority of banks (50.8 percent) reported increases in their C&I loans during the quarter. 

Overall, C&I loans have declined by $130.6 billion 

(12.4 percent) since the end of 2000. 

Money Continues To Flow Into Savings 

Deposits 

Domestic deposit growth remained very strong in the 

third quarter. Deposits in domestic offices of commercial banks grew by $135.2 billion (3.6 percent), led by 

a $101.6 billion (5.0 percent) increase in savings 

deposits. Deposits in banks’ foreign offices declined 

by $27.9 billion (4.4 percent). Commercial banks also 

increased their borrowings from Federal Home Loan 

Banks by $22.8 billion (10.4 percent). Brokered 

deposits increased by $12.0 billion (5.1 percent), their 

largest increase in over a year. 

Industry Consolidation Slows In Third 

Quarter 

After declining by 113 institutions in the first six months 

of 2002, the number of insured commercial banks 

reporting financial results fell by 34 institutions during 

the third quarter, from 7,967 to 7,933. There were 23 

new charters added, while mergers absorbed 58 

banks, and one insured commercial bank failed. 

During the first six months of the year, mergers 

absorbed 152 commercial banks. The number of commercial banks on the FDIC’s “Problem List” increased 

from 115 to 126 during the quarter, and total assets of 

“problem” banks increased from $36 billion to $38 billion. 

FDIC Quarterly Banking Profile 

Third 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 1.17 1.15 1.19 1.31 1.19 1.23 

Return on equity (%)............................................. 14.88 13.40 13.12 14.01 15.30 13.92 14.68 

Core capital (leverage) ratio (%).............................. 8.00 7.81 7.79 7.70 7.79 7.54 7.55 

Noncurrent assets plus 

other real estate owned to assets (%)..................... 0.97 0.85 0.92 0.74 0.63 0.65 0.66 

Net charge-offs to loans (%).................................... 1.12 0.83 0.95 0.67 0.61 0.67 0.64 

Asset growth rate (%)............................................. 5.75 8.05 4.92 8.88 5.38 8.53 9.53 

Net interest margin (%).......................................... 4.11 3.84 3.91 3.95 4.07 4.07 4.21 

Net operating income growth (%).............................. 21.74 -2.71 -1.91 1.79 20.38 2.26 12.43 

Number of institutions reporting.............................. 7,933 8,149 8,080 8,315 8,579 8,773 9,142 

Percentage of unprofitable institutions (%).................. 6.24 7.60 8.08 7.34 7.52 6.11 4.85 

Number of problem institutions................................. 126 74 95 76 66 69 71 

Assets of problem institutions (in billions).................. $38 $14 $36 $17 $4 $5 $5 

Number of failed/assisted institutions........................ 8 3 3 6 7 3 1 

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

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

(dollar figures in millions) 

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

2002 

2nd Quarter 3rd Quarter 

2001 

%Change 

01:3-02:3 

3rd Quarter 

2002 

7,933 7,967 8,149 -2.7 

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

CONDITION DATA

1,729,035 1,735,172 1,671,152 3.5 

Total assets..................................................................... $6,932,604 $6,731,492 $6,555,519 5.8

 Loans secured by real estate............................................. 1,970,709 1,884,853 1,747,875 12.7

 Commercial & industrial loans.......................................... 921,365 936,346 1,011,433 -8.9

 Loans to individuals......................................................... 688,201 660,038 607,562 13.3

 Farm loans.................................................................. 47,669 47,641 48,427 -1.6

 Other loans & leases...................................................... 444,885 439,439 448,147 -0.7

 Less: Unearned income................................................... 3,634 3,830 2,665 36.4

 Total loans & leases......................................................... 4,069,196 3,964,486 3,860,780 5.4

 Less: Reserve for losses................................................... 75,502 74,252 68,213 10.7

 Net loans and leases......................................................... 3,993,694 3,890,235 3,792,567 5.3

 Securities........................................................................ 1,292,320 1,229,268 1,106,870 16.8

 Other real estate owned................................................... 3,954 3,876 3,459 14.3

 Goodwill and other intangibles.......................................... 122,115 127,339 111,728 9.3

 All other assets............................................................... 1,520,520 1,480,775 1,540,896 -1.3 

Total liabilities and capital................................................... 6,932,604 6,731,492 6,555,519 5.8

 Noninterest-bearing deposits............................................. 890,406 824,635 777,491 14.5

 Interest-bearing deposits.................................................. 3,650,675 3,609,184 3,517,121 3.8

 Other borrowed funds...................................................... 1,242,998 1,190,845 1,167,133 6.5

 Subordinated debt............................................................ 92,748 93,712 92,439 0.3

 All other liabilities............................................................ 416,461 392,345 415,615 0.2

 Equity capital.................................................................. 639,317 620,771 585,720 9.2 

Loans and leases 30-89 days past due................................. 46,542 45,737 52,559 -11.4 

Noncurrent loans and leases................................................ 61,170 58,376 51,693 18.3 

Restructured loans and leases............................................. 1,784 1,649 1,061 68.2 

Direct and indirect investments in real estate........................... 252 270 253 -0.6 

1-4 Family residential mortgages.......................................... 1,082,785 1,011,391 931,415 16.3 

Mortgage-backed securities................................................ 695,045 653,672 560,263 24.1 

Earning assets.................................................................. 5,931,418 5,781,910 5,585,109 6.2 

Long-term assets (5+ years)................................................ 1,446,252 1,390,185 1,264,493 14.4 

Volatile liabilities............................................................... 2,168,183 2,127,400 2,182,809 -0.7 

Foreign office deposits...................................................... 612,973 640,905 680,897 -10.0 

FHLB Advances............................................................... 240,595 217,837 191,545 25.6 

Unused loan commitments................................................... 5,261,265 5,180,898 4,732,508 11.2 

Derivatives..................................................................... 53,694,588 50,577,563 51,348,981 4.6 

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....................................... 

2001 

3rd Quarter %Change 

%Change 2002 01:3-02:3

3rd Quarter 

Qtrs 2002 

First Three 

Qtrs 2001 

First Three 

$269,777 $310,507 -13.1 $90,710 $100,111 -9.4 

92,998 152,994 -39.2 31,074 45,855 -32.2

176,779 157,513 12.2 59,636 54,256 9.9 

35,192 28,004 25.7 12,699 11,583 9.6 

127,642 116,909 9.2 43,624 38,838 12.3 

170,995 164,787 3.8 58,120 56,173 3.5 

4,173 2,921 42.9 2,465 1,007 144.8 

33,892 28,580 18.6 11,522 8,986 28.2 

-3 -265 N/M -40 8 N/M

68,512 55,708 23.0 23,344 17,365 34.4 

33,189 23,837 39.2 11,524 9,258 24.5 

49,295 39,207 25.7 15,388 13,572 13.4

65,688 53,957 21.7 21,713 16,667 30.3 

N/M - Not meaningful 

FDIC Quarterly Banking Profile 

FDIC-Insured Commercial Banks 4 Third Quarter 2002 
TABLE III-A. First Three Quarters 2002, FDIC-Insured Commercial Banks 

FIRST THREE QUARTERS 

(The way it is...) 

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

All 

Institutions 

Asset Size Distribution Geographic Distribution by Region 

to 

$1 Billion 

$1 Billion 

to 

$10 Billion 

$100 Million 

than $100 

Less 

Million 

than $10 

Billion 

Greater 

Northeast Southeast Central 

East 

west 

SouthWest Midwest 

West 

7,933 4,285 3,249 319 80 628 1,378 1,690 2,063 1,310 864 

Total assets (in billions).................................... $6,932.6 $216.8 $855.5 $917.0 $4,943.3 $2,351.2 $1,717.9 $1,424.1 $384.8 $288.0 $766.6 

Total deposits (in billions).................................... 4,541.1 182.2 695.6 631.0 3,032.3 1,449.8 1,169.8 902.7 254.8 233.4 530.6 

Net income (in millions).................................... 68,512 1,701 7,804 10,196 48,811 19,893 17,497 14,028 4,693 2,794 9,608 

% of unprofitable institutions.............................. 6.2 9.5 2.4 2.8 3.8 9.6 9.4 4.7 3.2 5.0 10.8 

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

Performance ratios (annualized, %) 

72.6 67.3 79.0 77.4 76.3 73.4 77.3 76.5 70.3 68.5 68.5 

Yield on earning assets.................................... 6.28 6.79 6.80 6.43 6.12 6.13 6.20 6.05 7.29 6.45 6.69 

Cost of funding earning assets........................... 2.16 2.45 2.36 2.14 2.12 2.39 2.11 2.19 2.18 1.95 1.64 

Net interest margin.......................................... 4.11 4.34 4.44 4.29 4.00 3.74 4.09 3.86 5.11 4.49 5.05 

Noninterest income to earning assets.................. 2.97 1.12 1.56 2.90 3.34 3.84 2.64 2.21 3.14 1.65 3.00 

Noninterest expense to earning assets.................. 3.98 3.66 3.69 4.03 4.04 4.39 3.90 3.31 4.48 3.83 4.02 

Loan and lease loss provision to assets............... 0.70 0.28 0.36 0.57 0.80 0.95 0.44 0.55 1.02 0.31 0.81 

Net operating income to assets........................... 1.31 1.05 1.26 1.50 1.30 1.11 1.35 1.28 1.64 1.28 1.75 

Pretax return on assets.............................. 2.04 1.39 1.77 2.33 2.07 1.77 2.06 2.02 2.43 1.84 2.78 

Return on assets............................................. 1.37 1.08 1.27 1.54 1.36 1.17 1.41 1.36 1.67 1.34 1.76 

Return on equity............................................. 14.88 9.69 12.98 15.11 15.48 13.51 14.81 15.91 16.55 13.60 16.57 

Net charge-offs to loans and leases..................... 1.12 0.30 0.38 0.92 1.34 1.78 0.67 0.81 1.30 0.39 1.22 

Loan and lease loss provision to net charge-offs...... 106.03 155.02 146.88 100.69 104.01 105.13 105.62 103.91 114.42 139.36 103.90 

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

Condition Ratios (%) 

54.93 66.89 61.10 55.10 53.52 56.74 56.42 53.00 52.75 61.81 49.06 

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

Loss allowance to: 

85.56 91.42 91.46 89.99 83.46 82.39 84.65 88.21 90.38 89.74 88.39 

Loans and leases.......................................... 1.86 1.45 1.46 1.79 1.97 2.29 1.56 1.70 1.78 1.50 1.91 

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

Noncurrent assets plus 

123.43 123.26 143.92 163.04 115.97 106.71 131.50 115.86 155.47 138.78 179.05 

other real estate owned to assets..................... 0.97 0.89 0.79 0.74 1.05 1.16 0.81 1.05 0.89 0.75 0.74 

Equity capital ratio............................................. 9.22 11.28 9.93 10.33 8.80 8.69 9.52 8.54 10.51 10.06 10.50 

Core capital (leverage) ratio.............................. 8.00 10.82 9.31 9.18 7.41 7.60 7.77 7.80 9.40 8.84 9.04 

Tier 1 risk-based capital ratio.............................. 10.18 16.05 13.03 12.65 9.10 10.04 9.60 9.35 12.75 13.00 11.33 

Total risk-based capital ratio.............................. 12.95 17.16 14.22 14.68 12.30 13.08 12.30 12.42 14.11 14.44 14.03 

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

Structural Changes (YTD) 

87.95 72.49 79.03 86.35 91.25 78.18 88.34 101.24 104.49 70.90 90.68 

New Charters................................................ 65 64 1 0 0 7 22 3 7 6 20 

Banks absorbed by mergers........................... 210 91 96 18 5 24 46 36 41 33 30 

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

PRIOR FIRST THREE QUARTERS

 (The way it was...) 

8 5 2 1 0 1 3 2 0 1 1 

Number of institutions................................2001 8,149 4,598 3,150 321 80 650 1,411 1,738 2,106 1,351 893

 ...............................................1999 8,621 5,240 2,989 315 77 682 1,442 1,878 2,219 1,467 933

 ...............................................1997 9,214 5,977 2,874 297 66 724 1,536 2,020 2,343 1,613 978 

Total assets (in billions).............................2001 $6,555.5 $225.8 $803.2 $898.2 $4,628.4 $2,343.0 $1,647.8 $1,251.0 $335.6 $269.9 $708.2

 ................................................1999 5,513.1 245.4 743.6 881.8 3,642.3 1,898.5 1,493.7 931.7 373.8 306.7 508.6

 ................................................1997 4,869.3 272.3 711.1 899.7 2,986.2 1,839.9 898.5 793.4 329.2 341.4 666.9 

Return on assets (%)................................2001 1.17 0.96 1.22 1.31 1.14 1.15 1.03 1.04 1.42 1.18 1.68

 ................................................1999 1.32 1.08 1.36 1.50 1.29 1.25 1.29 1.29 1.51 1.21 1.68

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

Net charge-offs to loans & leases (%) 

1.24 1.25 1.38 1.30 1.18 1.13 1.29 1.27 1.40 1.24 1.31 

................................................2001 0.83 0.27 0.35 0.90 0.93 0.96 0.69 0.76 0.69 0.39 1.20

 ................................................1999 0.58 0.35 0.32 0.64 0.64 0.76 0.40 0.35 0.74 0.42 0.94

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

Noncurrent assets plus 

0.62 0.23 0.33 1.03 0.58 0.71 0.44 0.48 0.82 0.33 0.83 

OREO to assets (%)..............................2001 0.85 0.82 0.73 0.77 0.89 0.82 0.85 0.96 0.73 0.74 0.84

 ................................................1999 0.67 0.72 0.63 0.62 0.69 0.78 0.57 0.59 0.62 0.68 0.72

 ................................................1997 0.68 0.77 0.71 0.82 0.62 0.72 0.61 0.62 0.67 0.55 0.77 

Equity capital ratio (%)..............................2001 8.93 11.25 9.86 9.79 8.49 8.09 9.58 8.61 9.23 9.83 10.31

 ................................................1999 8.51 10.92 9.40 9.27 7.97 7.91 8.59 8.21 8.89 8.73 10.62

 ................................................1997 8.53 10.96 9.69 9.33 7.79 7.39 9.28 8.69 9.20 8.98 9.92 

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 

Third Quarter 2002 5 FDIC-Insured Commercial Banks 
TABLE IV-A. Third Quarter 2002, FDIC-Insured Commercial Banks 

THIRD QUARTER 

(The way it is...) 

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

Institutions 

All 

Asset Size Distribution Geographic Distribution by Region 

$1 Billion Billion

$1 Billion 

to 

$10 Billion 

Less $100 Million

than $100 

Million 

to 

Greater 

than $10 

Central 

Northeast Southeast 

East 

West 

West 

west 

Mid- Southwest 

7,933 4,285 3,249 319 80 628 1,378 1,690 2,063 1,310 864 

Total assets (in billions).................................... $6,932.6 $216.8 $855.5 $917.0 $4,943.3 $2,351.2 $1,717.9 $1,424.1 $384.8 $288.0 $766.6 

Total deposits (in billions).................................... 4,541.1 182.2 695.6 631.0 3,032.3 1,449.8 1,169.8 902.7 254.8 233.4 530.6 

Net income (in millions).................................... 23,344 610 2,783 3,765 16,186 6,240 6,061 4,751 1,627 976 3,690 

% of unprofitable institutions.............................. 6.1 8.9 2.7 3.8 5.0 9.4 8.7 5.6 3.3 4.6 9.8 

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

Performance Ratios (annualized, %) 

72.2 67.6 77.7 77.4 70.0 70.9 75.8 73.9 70.0 70.7 71.5 

Yield on earning assets.................................... 6.20 6.77 6.73 6.24 6.06 6.02 6.17 5.95 7.34 6.39 6.58 

Cost of funding earning assets........................... 2.12 2.34 2.26 2.05 2.10 2.40 2.06 2.11 2.15 1.87 1.58 

Net interest margin.......................................... 4.08 4.43 4.47 4.19 3.96 3.63 4.11 3.84 5.19 4.52 5.00 

Noninterest income to earning assets.................. 2.98 1.16 1.59 3.13 3.30 3.76 2.60 2.21 3.31 1.66 3.33 

Noninterest expense to earning assets.................. 3.97 3.71 3.69 3.91 4.05 4.34 3.91 3.36 4.55 3.90 3.92 

Loan and lease loss provision to assets............... 0.74 0.31 0.38 0.61 0.85 1.00 0.46 0.58 1.17 0.32 0.84 

Net operating income to assets........................... 1.27 1.09 1.29 1.60 1.22 0.98 1.35 1.22 1.67 1.26 1.93 

Pretax return on assets................................. 2.04 1.47 1.84 2.56 2.01 1.66 2.05 2.01 2.47 1.89 3.13 

Return on assets............................................. 1.37 1.14 1.32 1.67 1.33 1.07 1.44 1.36 1.71 1.38 1.98 

Return on equity............................................. 14.84 10.13 13.37 16.15 15.10 12.42 15.09 15.82 16.50 13.71 18.52 

Net charge-offs to loans and leases..................... 1.15 0.33 0.39 1.05 1.36 1.82 0.70 0.83 1.25 0.42 1.30 

Loan and lease loss provision to net charge-offs...... 110.19 151.43 148.37 94.65 109.95 111.04 107.31 106.22 134.39 129.55 100.56 

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

Structural Changes (QTR) 

54.86 66.07 60.55 52.45 54.03 57.62 56.77 52.92 52.03 62.63 46.27 

New charters................................................ 23 23 0 0 0 1 10 0 2 2 8 

Banks absorbed by mergers........................... 58 28 23 6 1 6 7 16 16 7 6 

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

PRIOR THIRD QUARTERS

 (The way it was...) 

1 1 0 0 0 0 1 0 0 0 0 

Return on assets (%)................................2001 1.08 0.95 1.23 1.31 1.01 1.10 0.78 1.00 1.53 1.21 1.58

 .................................................1999 1.41 1.11 1.32 1.57 1.41 1.46 1.37 1.25 1.40 1.26 1.74

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

Net charge-offs to loans & leases (%)

1.22 1.31 1.43 1.40 1.11 1.09 1.32 1.28 1.32 1.23 1.32 

.................................................2001 0.96 0.34 0.41 0.97 1.10 1.04 0.98 0.86 0.79 0.44 1.19

 .................................................1999 0.58 0.23 0.35 0.70 0.63 0.78 0.41 0.33 0.80 0.44 0.85

 .................................................1997 0.66 0.26 0.34 1.10 0.62 0.74 0.47 0.54 0.90 0.39 0.86 

FDIC Quarterly Banking Profile 

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

September 30, 2002 

Asset Size Distribution Geographical Distribution by Region 

Institutions 

All 

Less Greater

than $100 

Million $1 Billion 

to 

$100 Million $1 Billion 

to 

$10 Billion 

than $10 

Billion Central 

Northeast 

East 

east 

SouthWest 

West 

Midwest west SouthPercent of Loans 30-89 Days Past Due 

All loans secured by real estate........................... 1.03 1.31 0.94 0.89 1.08 1.14 0.90 1.31 0.83 1.04 0.78 

Construction and development........................... 1.03 1.31 0.96 1.00 1.06 1.15 0.62 1.42 1.02 1.26 1.20 

Commercial real estate.................................... 0.70 1.03 0.72 0.74 0.64 0.76 0.55 0.94 0.78 0.75 0.53 

Multifamily residential real estate........................ 0.40 0.65 0.56 0.40 0.34 0.31 0.27 0.67 0.30 0.54 0.25 

Home equity loans.......................................... 0.61 0.67 0.52 0.54 0.62 0.53 0.59 0.69 0.57 0.58 0.56 

Other 1-4 Family residential.............................. 1.35 1.70 1.29 1.13 1.39 1.35 1.31 1.79 0.90 1.28 0.94 

Commercial and industrial loans........................... 0.91 1.77 1.32 1.39 0.75 0.81 0.62 1.10 1.43 1.31 1.09 

Loans to individuals............................................. 2.19 2.46 2.30 2.02 2.20 2.35 2.20 1.84 2.55 1.91 1.89 

Credit card loans............................................. 2.76 2.54 4.87 2.73 2.70 2.82 4.18 2.15 2.92 1.40 2.12 

Other loans to individuals................................. 1.83 2.46 1.94 1.68 1.81 1.89 1.87 1.79 1.79 1.92 1.54 

All other loans and leases (including farm)............... 0.56 0.83 0.75 0.76 0.51 0.49 0.28 0.79 0.86 0.89 0.52 

Total loans and leases....................................... 1.14 1.47 1.13 1.17 1.12 1.24 0.94 1.25 1.36 1.20 1.01 

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

Percent of Loans Noncurrent* 

0.85 0.22 0.47 0.64 0.90 0.64 0.34 1.31 2.01 0.66 1.27 

All real estate loans............................................. 0.93 1.03 0.88 0.87 0.96 1.04 0.74 1.34 0.69 0.92 0.62 

Construction and development........................... 1.09 1.08 1.10 1.13 1.07 1.12 0.91 1.40 0.85 0.83 1.18 

Commercial real estate.................................... 0.96 1.14 0.95 0.89 0.97 0.86 0.81 1.32 0.96 1.04 0.76 

Multifamily residential real estate........................ 0.39 0.76 0.45 0.25 0.40 0.23 0.46 0.53 0.40 0.65 0.18 

Home equity loans.......................................... 0.30 0.31 0.26 0.31 0.31 0.23 0.25 0.42 0.29 0.47 0.25 

Other 1-4 Family residential.............................. 0.97 0.90 0.78 0.90 1.03 1.04 0.77 1.69 0.48 0.80 0.40 

Commercial and industrial loans........................... 3.01 1.73 1.54 1.90 3.43 4.19 2.68 2.58 1.50 1.59 2.23 

Loans to individuals............................................. 1.45 0.98 0.98 1.01 1.59 2.03 0.86 0.68 1.82 0.72 1.24 

Credit card loans............................................. 2.14 1.36 3.56 1.84 2.14 2.26 2.43 1.41 2.30 0.98 1.79 

Other loans to individuals................................. 1.01 0.97 0.62 0.61 1.16 1.81 0.60 0.56 0.85 0.71 0.39 

All other loans and leases (including farm)............... 1.03 1.27 1.19 0.81 1.03 1.26 0.89 0.75 1.06 1.56 1.01 

Total loans and leases....................................... 1.50 1.17 1.02 1.10 1.69 2.14 1.19 1.47 1.15 1.08 1.07 

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

Percent of Loans Charged-off (net, YTD) 

0.84 0.76 0.26 0.51 0.89 0.56 1.20 0.97 1.52 0.71 0.34 

All real estate loans............................................. 0.15 0.09 0.08 0.15 0.17 0.10 0.12 0.29 0.07 0.10 0.07 

Construction and development........................... 0.16 0.13 0.11 0.23 0.15 0.15 0.11 0.26 0.13 0.06 0.15 

Commercial real estate.................................... 0.13 0.12 0.09 0.14 0.15 0.04 0.09 0.30 0.10 0.11 0.09 

Multifamily residential real estate........................ 0.06 0.05 0.03 0.12 0.05 0.04 0.04 0.11 0.00 0.23 0.02 

Home equity loans.......................................... 0.19 0.04 0.04 0.13 0.22 0.05 0.16 0.35 0.11 0.16 0.06 

Other 1-4 Family residential.............................. 0.14 0.08 0.07 0.13 0.16 0.08 0.14 0.30 0.05 0.09 0.04 

Commercial and industrial loans........................... 1.75 0.66 0.76 1.34 1.98 2.13 1.69 1.52 0.80 0.72 1.99 

Loans to individuals............................................. 3.40 0.88 1.65 3.15 3.73 4.62 1.59 1.76 4.46 1.01 4.09 

Credit card loans............................................. 6.68 3.89 7.67 6.95 6.61 7.60 4.73 4.78 6.55 3.08 5.73 

Other loans to individuals................................. 1.40 0.79 0.85 1.08 1.60 1.93 1.10 1.30 0.53 0.95 1.37 

All other loans and leases (including farm)............... 0.77 0.36 0.59 0.64 0.81 0.89 0.35 0.98 0.35 0.67 0.91 

Total loans and leases....................................... 1.12 0.30 0.38 0.92 1.34 1.77 0.67 0.81 1.30 0.39 1.22 

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

Loans Outstanding (in billions) 

0.11 0.44 0.31 0.20 0.09 0.02 0.17 0.18 -0.04 0.22 0.03 

All real estate loans............................................. $1,970.7 $79.7 $378.2 $315.1 $1,197.7 $385.2 $597.6 $479.4 $128.6 $97.7 $282.2 

Construction and development........................... 205.9 7.4 47.9 42.4 108.1 21.0 74.8 50.6 11.3 15.2 32.9 

Commercial real estate.................................... 541.7 23.9 150.0 116.7 251.1 89.2 163.2 127.7 34.0 37.3 90.2 

Multifamily residential real estate........................ 68.8 1.8 13.2 13.6 40.2 15.9 16.5 19.6 3.5 3.0 10.4 

Home equity loans.......................................... 201.2 2.3 18.5 22.7 157.7 40.0 60.3 65.8 6.5 1.8 26.8 

Other 1-4 Family residential.............................. 881.5 33.9 132.3 114.8 600.5 188.1 272.1 206.1 61.6 36.1 117.6 

Commercial and industrial loans........................... 921.4 22.4 94.9 110.4 693.6 303.7 224.7 216.6 42.7 38.1 95.5 

Loans to individuals............................................. 688.2 15.8 55.8 91.1 525.4 281.7 126.3 106.8 68.7 22.0 82.7 

Credit card loans............................................. 267.7 0.4 6.8 29.8 230.6 137.7 18.2 14.8 46.0 0.6 50.3 

Other loans to individuals................................. 420.5 15.4 49.0 61.3 294.8 144.0 108.1 92.1 22.7 21.3 32.4 

All other loans and leases (including farm)............... 492.6 16.2 29.6 38.6 408.2 191.8 101.8 127.0 31.1 10.4 30.6 

Total loans and leases....................................... 4,072.8 134.2 558.4 555.3 2,825.0 1,162.3 1,050.3 929.9 271.1 168.1 491.0 

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

Memo: Other Real Estate Owned (in millions) 

39.2 0.3 1.5 3.4 34.1 9.1 12.0 9.2 0.8 0.7 7.3 

All other real estate owned.................................... $3,954.1 $324.5 $1,067.5 $587.3 $1,974.8 $556.3 $1,343.2 $964.5 $323.7 $330.1 $436.4 

Construction and development........................... 366.6 32.7 177.1 73.0 83.7 44.1 125.9 62.6 33.0 42.6 58.2 

Commercial real estate.................................... 1,755.8 141.2 503.5 319.9 791.3 250.2 681.7 267.4 159.5 164.8 232.2 

Multifamily residential real estate........................ 81.2 13.4 38.8 12.8 16.2 11.0 14.8 18.7 13.3 6.5 16.8 

1-4 Family residential....................................... 1,560.7 110.8 307.2 170.9 971.9 146.2 506.6 606.8 94.9 96.5 109.8 

Farmland...................................................... 84.1 26.3 39.1 8.9 9.7 2.5 14.1 8.9 23.0 19.6 15.8 

Other real estate owned in foreign offices............ 105.7 0.0 1.8 1.9 102.0 102.3 0.0 0.0 0.0 0.0 3.5 

*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 

Third Quarter 2002 7 FDIC-Insured Commercial Banks 
SAVINGS INSTITUTION PERFORMANCE—THIRD QUARTER, 2002
 

� Industry Has Second Consecutive Quarter Of Record Earnings 

� Gains On Sales Of Securities Propel Earnings 

� Margins And Profitability Improve At Community Thrifts 

� Real Estate Loan Quality Remains Strong 

� Deposits Increase Sharply 

Earnings in the Third Quarter Reached 

$4.0 Billion for the First Time 

A favorable interest rate environment helped insured 

savings institutions realize $1.9 billion in gains from 

sales of securities, lifting industry earnings to just under 

$4.0 billion in the third quarter. This was the highest 

quarterly total ever for savings institutions. The previous record was set last quarter at $3.9 billion. In the 

third quarter of 2001, thrifts earned $3.5 billion. Loan 

loss provisions fell $116 million (12 percent) from the 

second quarter, to $822 million. This was the first 

decline in provisions in a year. In the third quarter of 

last year provisions were $889 million. The $1.9 billion 

in gains on securities sales was up $563 million (43 

percent) from last quarter and $550 million (42 percent) 

from a year ago. Noninterest income fell $382 million 

(13 percent) from last quarter primarily because of losses on servicing operations. 

The ROA for the industry this quarter was 1.20 percent, 

the highest quarterly return ever reported, and slightly 

above the previous record level of 1.19 percent reported in the second quarter. Profitability was much higher 

than a year ago, when the industry’s ROA was just 1.08 

percent. More than three out of four thrifts (77 percent) 

reported higher earnings from year-ago levels. ROA 

EARNINGS REACH $4.0 BILLION 

$ Billions 

5 

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

Securities and Other Gains/Losses, Net 

Net Operating Income 3.9 4.0 4 3.7 3.6 

3.4 3.5 

3.0 2.9 2.9 3 2.8 2.9 2.8 2.7 2.7 2.7 2.6 2.5 2.6 

2.0 2 

1 

0 

1998 1999 2000 2001 2002 

strength was fairly widespread, with 557 institutions (38 

percent of the industry) reporting an ROA of 1.00 percent or better. 

Losses Continue on Servicing 

Operations 

The decline in long-term interest rates has generated a 

large amount of refinancings of home mortgages and 

the resulting prepayments of older, higher-rate mortgages have hurt the value of thrifts’ mortgage servicing 

rights (MSRs). Mortgage servicing rights represent the 

future cash flows expected from processing mortgage 

payments, and much of the fee income earned by savings institutions comes from servicing home mortgages. Servicing fee income normally is reduced by 

any loss in the value of mortgage servicing rights. In 

the second quarter, thrifts’ servicing operations produced net losses of $1.1 billion; in the third quarter 

these losses grew to $2.2 billion. There were 373 savings institutions that reported lower servicing fee 

income or that had higher losses in the third quarter 

compared to the second quarter. These declines were 

the primary reason that noninterest income fell by $382 

million to $2.5 billion. Other noninterest income, including some hedging gains, helped moderate the effect on 

total noninterest income in the third quarter. 

Net Interest Margins Improved at Small 

Thrifts, Declined at Larger Institutions 

Another result of declining long-term interest rates was 

that the industry’s net interest margin contracted for the 

second quarter in a row. The industry’s net interest 

margin declined 9 basis points to 3.41 percent during 

the third quarter. The asset yield fell faster, down 18 

basis points, than the cost of funding earning assets, 

down 8 basis points. While larger institutions reported 

declining margins, small savings institutions with assets 

of less than $100 million reported a 4 basis point 

improvement in their net interest margin, which rose to 

3.52 percent. These small institutions were able to 

reduce the cost of funding earning assets by 14 basis 

points, while their asset yields fell only 10 basis points. 

FDIC Quarterly Banking Profile 

FDIC-Insured Savings Institutions 8 Third Quarter 2002 
0 

10 

20 

30 

40 

50 

44.6 

Assets < $100 Million 

18.5 

Assets > $100 Million 

SMALL INSTITUTIONS’ NET INTEREST 

MARGINS IMPROVE 

Net Interest Margin (%) 

4.0 

3.5 

3.0 

2.5 

Assets < $100 Million 

3.52 

3.40 

Assets > $100 Million 

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

1998 1999 2000 2001 2002 

Small Thrifts Reported a Significant 

Improvement in Profitability 

There were 524 savings institutions with less than $100 

million in assets at the end of the third quarter and they 

reported an aggregate ROA of 0.99 percent, up from 

0.85 percent last quarter and from 0.71 percent a year 

ago. In addition to improved net interest margins, a 43 

percent decline in provisions for loan losses and a 20 

percent increase in the gains on sales of securities 

helped lift community thrifts’ earnings this quarter. 

Noninterest income, which provides 45 percent of operating revenue for this group, continued to expand, 

growing 63 basis points to 2.84 percent of earning 

assets. Noninterest expenses grew even faster, up 64 

basis points to 4.93 percent of assets. One dozen specialty institutions with assets less than $100 million generate over 90 percent of their operating revenue from 

noninterest income. Without these specialty instituSMALL SPECIALTY INSTITUTIONS CONTINUE TO
 

GROW NONINTEREST INCOME WHILE LARGE
 

INSTITUTIONS REPORT LOWER SERVICING FEES
 

Quarterly Noninterest Income, % of Net Operating Revenue 

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 

FDIC Quarterly Banking Profile 

tions, the remaining 512 community savings institutions 

reported an aggregate ROA of 0.71 percent, up from 

0.59 percent last quarter and from 0.37 percent a year 

ago. Almost 78 percent of these small institutions 

reported improved earnings over year-ago levels. 

Real Estate Loan Quality Held Steady 

Noncurrent loans rose $261 million during the quarter, 

but remained at 0.87 percent of loans. All residential 

and commercial real estate loan categories showed 

improvement or held steady, which led to a 1 basis 

point drop in the noncurrent rate on thrifts’ real estate 

loans, to 0.82 percent. The noncurrent rate for commercial & industrial loans rose 6 basis points to 2.28 

percent, but this category of loans represents only 5 

percent of the industry’s total loan portfolio. The percent of credit card loans that were noncurrent rose 43 

basis points to 1.43 percent. Total credit card loans 

declined $3.1 billion for the industry as one institution 

(Household Bank, FSB) sold nearly its entire portfolio of 

over $4 billion in credit card loans. Now just 3 savings 

institutions hold 73 percent of all credit card plans in the 

industry. 

NONCURRENT REAL ESTATE RATES
 

CONTINUE TO IMPROVE
 

Percent of Loans 

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

0.0 

0.5 

1.0 

1.5 

2.0 

Total Real Estate 

Construction and Land 

Multifamily 1-4 Family 

Commercial Loans 

Credit Cards Fuel Rise in Net Charge-offs 

Net charge-offs increased $125 million to $612 million 

or 0.28 percent of total loans. Net charge-offs on credit card loans accounted for 60 percent of this increase, 

rising $75 million to $195 million, as the charge-off rate 

rose to 4.94 percent from 2.83 percent in the second 

quarter. A year ago the rate was 4.99 percent. The net 

charge-off rate on commercial & industrial loans rose 2 

basis points to 1.34 percent during the third quarter, but 

this was 7 basis points lower than a year ago when 

charge-off rate was 1.41 percent. The net charge-off 

rate on real estate loans held steady at 5 basis points. 

Third Quarter 2002 9 FDIC-Insured Savings Institutions 
Reserve Growth Closely Tracks Growth 

in Noncurrent Loans and Total Loans 

Loan loss reserves rose $192 million to $8.3 billion, as 

loss provisions of $822 million exceeded net chargeoffs of $612 million. At the end of September, reserves 

represented 0.94 percent of total loans, down slightly 

from 0.95 percent last quarter. Similarly, the industry’s 

coverage ratio—loan loss reserves to noncurrent 

loans—fell slightly, to $1.08 in reserves for every $1 of 

noncurrent loans from $1.09. 

GROWTH IN NONCURRENT LOANS SLIGHTLY
 

OUTPACES RESERVE GROWTH
 

$ 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 Grew by $50 Billion over 

Past 12 Months 

Asset growth was 4 percent over the past year, with 

almost two-thirds ($33 billion) occurring in the third 

quarter. Home equity loans have grown by $10.2 billion 

or 36 percent over the past year, with $3.2 billion of this 

increase occurring in the third quarter. At the current 

low level of interest rates, these loans have been popular as one way to reduce other types of higher cost 

debt. Declining interest rates continued to cause the 

value of savings institutions’ portfolios of securities to 

rise; appreciation added $1.6 billion to thrifts’ securities 

holdings during the third quarter, in addition to the gains 

that were realized on sales during the quarter. 

Asset growth was mainly funded by deposits in the third 

quarter. Deposits increased by $30.7 billion, accounting 

for more than half of the increase of $61 billion (8 percent) over the last 12 months. Other borrowed funds 

declined by $4.9 billion in the quarter and are down by 

$26 billion from a year ago. This quarter’s decline in 

other borrowed funds did not include Federal Home 

Loan Bank advances, which rose $389 million. FHLB 

advances were $31 billion higher a year ago, and the 

increase this quarter reverses a trend away from 

advances in favor of deposits. 

THE INDUSTRY’S CAPITAL RATIO SLIPS BACK 

FROM RECORD LEVEL 

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 

The Increase in Capital Was Outstripped 

by Asset Growth 

Equity capital rose by $1.4 billion because of the 

increase in gains on available-for-sale securities, up by 

$1.6 billion. However, the growth in industry assets led 

to a decline in the equity capital ratio from a record 9.40 

percent to 9.27 percent. Core capital, which does not 

include gains on AFS securities, declined from a record 

8.15 percent of average assets to 8.09 percent. 

The Number of Savings Institutions Falls 

to 1,482 

A dozen mergers resulted in a decline in the number of 

savings institutions. There were 6 thrifts that were 

merged into other thrifts during the quarter and 6 thrifts 

were absorbed by commercial banks. An additional 2 

thrifts converted their charters to a commercial bank 

charter during the quarter. There were 4 mutual-tostock conversions of savings institutions with $953 million assets during the third quarter. The number of 

“problem” thrifts declined by one to 20 and assets of 

these institutions rose slightly to $3.9 billion from $3.8 

billion at the end of June. 

FDIC Quarterly Banking Profile 

FDIC-Insured Savings Institutions 10 Third Quarter 2002 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

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

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

Core capital (leverage) ratio (%).............................. 

Noncurrent assets plus 

other real estate owned to assets (%)..................... 

Net charge-offs to loans (%)................................. 

Asset growth rate (%).......................................... 

Net interest margin............................................. 

Net operating income growth (%)........................... 

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

Percentage of unprofitable institutions (%)............... 

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

Assets of problem institutions (in billions).................. 

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

2002* 2001* 2001 2000 1999 1998 1997 

1.20 

13.19 

8.09 

0.66 

0.25 

3.87 

3.48 

18.99 

1,482 

7.22 

22 

$4 

1 

1.05 

12.36 

7.82 

0.64 

0.25 

7.36 

3.16 

-2.49 

1,553 

9.47 

20 

$4 

1 

1.07 

12.33 

7.77 

0.65 

0.28 

8.17 

3.20 

6.63 

1,533 

8.68 

19 

$4 

1 

0.92 

11.14 

7.80 

0.56 

0.20 

5.99 

2.96 

3.05 

1,589 

8.56 

18 

$7 

1 

1.00 1.01 0.93 

11.73 11.35 10.84 

7.86 7.85 7.95 

0.58 0.72 0.95 

0.17 0.22 0.25 

5.52 6.06 -0.28 

3.10 3.10 3.23 

16.62 7.71 19.98 

1,642 1,690 1,780 

8.28	 5.27 4.10 

13 15 12 

$6 $6 $2 

1 0 0 

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

TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Savings Institutions 

(dollar figures in millions) 

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

2002 

2nd Quarter 3rd Quarter 

2001 

%Change 

01:3-02:3 

3rd Quarter 

2002 

1,482 1,498 1,553 -4.6 

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

CONDITION DATA

268,031 266,696 263,310 1.8 

Total assets.................................................................. $1,339,293 $1,306,190 $1,289,416 3.9

 Loans secured by real estate.......................................... 773,676 742,938 758,554 2.0 

1-4 Family Residential................................................... 602,901 577,377 597,874 0.8 

Multifamily residential property....................................... 63,072 60,470 58,971 7.0 

Commercial real estate................................................ 69,922 67,765 63,956 9.3 

Construction, development, and land.............................. 37,782 37,326 37,753 0.1

 Commercial & industrial loans.......................................... 41,037 40,102 37,609 9.1

 Loans to individuals...................................................... 65,464 68,722 68,832 -4.9

 Other loans & leases...................................................... 4,850 4,858 6,547 -25.9

 Less: Unearned income & contra accounts........................ 156 158 169 -7.8

 Total loans & leases...................................................... 884,872 856,461 871,373 1.5

 Less: Reserve for losses................................................ 8,337 8,145 7,862 6.0

 Net loans & leases......................................................... 876,534 848,316 863,511 1.5

 Securities..................................................................... 297,048 300,951 275,818 7.7

 Other real estate owned................................................... 1,084 1,035 1,049 3.4

 Goodwill and other intangibles.......................................... 23,661 26,183 23,183 2.1

 All other assets............................................................... 140,965 129,705 125,856 12.0 

Total liabilities and capital................................................... 1,339,293 1,306,190 1,289,416 3.9

 Deposits........................................................................ 850,733 820,027 789,752 7.7

 Other borrowed funds...................................................... 333,031 337,882 359,115 -7.3

 Subordinated debt......................................................... 3,244 3,304 3,946 -17.8

 All other liabilities............................................................ 28,176 22,256 24,626 14.4

 Equity capital.................................................................. 124,108 122,721 111,978 10.8 

Loans and leases 30-89 days past due................................. 8,526 7,764 9,568 -10.9 

Noncurrent loans and leases............................................. 7,713 7,451 7,158 7.8 

Restructured loans and leases............................................. 1,756 1,667 1,685 4.2 

Direct and indirect investments in real estate........................ 444 434 662 -32.9 

Mortgage-backed securities................................................ 206,655 201,784 206,680 0.0 

Earning assets............................................................... 1,222,840 1,192,392 1,181,659 3.5 

FHLB Advances............................................................... 224,564 224,175 255,583 -12.1 

Unused loan commitments................................................ 322,281 334,101 299,445 7.6 

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....................................... 

2001 

3rd Quarter %Change 

%Change 2002 01:3-02:3

3rd Quarter 

Qtrs 2002 

First Three 

Qtrs 2001 

First Three 

$56,529 $65,349 -13.5 $18,667 $21,439 -12.9 

25,540 38,255 -33.2 8,399 11,874 -29.3

30,989 27,093 14.4 10,268 9,565 7.3 

2,499 2,226 12.3 822 889 -7.5 

8,429 8,994 -6.3 2,463 2,889 -14.7 

22,861 21,768 5.0 7,691 7,531 2.1 

3,826 3,185 20.1 1,873 1,322 41.6 

6,179 5,477 12.8 2,118 1,959 8.1 

5 16 -67.3 -1 63 N/M

11,711 9,817 19.3 3,971 3,460 14.8 

1,603 1,603 0.0 612 593 3.3 

6,105 4,098 49.0 2,649 1,230 115.3

9,150 7,690 19.0 2,730 2,605 4.8 

N/M - Not Meaningful 

FDIC Quarterly Banking Profile 

Third Quarter 2002 11 FDIC-Insured Commercial Banks 
TABLE III-B. First Three Quarters 2002, FDIC-Insured Savings Institutions 

FIRST THREE QUARTERS 

(The way it is...) 

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

All 

Institutions 

Asset Size Distribution Geographic Distribution by Region 

to 

$1 Billion 

$1 Billion 

to 

$5 Billion 

$100 Million 

than $100 

Less 

Million 

than $5 

Billion 

Greater 

Northeast Southeast Central 

East 

west 

SouthWest Midwest 

West 

1,482 524 810 102 46 594 189 377 117 101 104 

Total assets (in billions).................................... $1,339.3 $27.1 $257.8 $200.3 $854.1 $474.9 $100.3 $136.4 $45.0 $79.9 $502.7 

Total deposits (in billions).................................... 850.7 21.6 195.9 143.7 489.6 318.2 70.6 101.1 27.2 43.6 290.1 

Net income (in millions).................................... 11,711 176 1,663 1,367 8,505 3,956 458 988 302 896 5,111 

% of unprofitable institutions.............................. 7.2 13.4 4.0 3.9 2.2 6.2 9.5 9.5 8.5 5.0 1.0 

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

Performance ratios (annualized, %) 

78.7 75.8 80.2 80.4 80.4 78.8 82.0 76.4 76.9 75.2 85.6 

Yield on earning assets.................................... 6.34 6.47 6.51 6.33 6.29 6.35 6.68 6.77 6.55 6.28 6.14 

Cost of funding earning assets........................... 2.87 3.02 2.97 2.90 2.82 2.82 3.39 3.43 3.26 2.57 2.66 

Net interest margin.......................................... 3.48 3.45 3.54 3.43 3.47 3.53 3.29 3.35 3.29 3.71 3.48 

Noninterest income to earning assets.................. 0.95 2.78 0.88 0.76 0.95 0.87 1.81 1.15 0.75 1.23 0.76 

Noninterest expense to earning assets.................. 2.57 4.85 2.95 2.72 2.34 2.43 3.39 3.26 2.63 2.73 2.30 

Loan and lease loss provision to assets............... 0.26 0.13 0.15 0.18 0.31 0.15 1.16 0.32 0.18 0.34 0.16 

Net operating income to assets........................... 0.94 0.73 0.81 0.75 1.03 1.08 0.28 0.52 0.73 1.40 1.00 

Pretax return on assets................................. 1.84 1.37 1.35 1.46 2.08 1.79 0.96 1.51 1.41 1.94 2.15 

Return on assets............................................. 1.20 0.89 0.90 0.95 1.36 1.17 0.63 0.99 0.93 1.59 1.36 

Return on equity............................................. 13.19 7.07 8.55 10.35 15.86 11.62 7.26 9.76 10.42 19.02 16.67 

Net charge-offs to loans and leases..................... 0.25 0.13 0.15 0.17 0.30 0.19 0.76 0.35 0.18 0.32 0.17 

Loan and lease loss provision to net charge-offs...... 155.87 154.97 146.33 167.47 155.84 133.39 218.31 123.81 151.04 172.51 135.59 

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

Condition Ratios (%) 

57.12 77.51 66.41 63.80 51.84 53.92 65.79 72.13 64.42 55.13 53.49 

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

Loss allowance to: 

91.30 93.86 93.38 92.73 90.26 92.36 92.82 92.41 92.82 93.37 89.25 

Loans and leases.......................................... 0.94 0.78 0.88 1.09 0.93 0.96 1.53 0.79 0.78 1.13 0.84 

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

Noncurrent assets plus 

108.10 82.47 115.18 133.03 102.00 130.97 166.29 71.54 113.15 77.85 99.86 

other real estate owned to assets..................... 0.66 0.76 0.59 0.64 0.68 0.48 0.76 0.93 0.63 0.98 0.68 

Noncurrent RE loans to RE loans........................ 0.82 0.91 0.71 0.69 0.88 0.67 0.65 1.04 0.65 1.66 0.82 

Equity capital ratio............................................. 9.27 12.59 10.48 9.35 8.77 10.10 9.29 9.67 8.76 8.35 8.56 

Core capital (leverage) ratio.............................. 8.09 12.19 9.94 8.42 7.31 8.62 8.84 9.25 8.31 8.23 7.08 

Tier 1 risk-based capital ratio.............................. 13.15 22.18 16.62 13.49 11.78 14.56 13.60 15.00 14.22 13.44 11.18 

Total risk-based capital ratio.............................. 14.41 23.23 17.66 14.55 13.17 15.77 15.09 15.90 15.28 14.46 12.60 

Gross real estate assets to gross assets............... 72.85 67.94 69.82 72.78 73.94 70.95 64.18 73.36 75.29 62.54 77.66 

Gross 1-4 family mortgages to gross assets............ 44.73 46.06 40.45 36.02 48.03 37.48 39.33 50.71 44.04 25.77 54.12 

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

Structural Changes (YTD) 

103.03 81.56 84.70 90.47 115.00 87.13 97.74 96.70 111.66 108.28 122.38 

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

Thrifts absorbed by mergers........................... 41 12 26 2 1 16 11 8 1 3 2 

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

PRIOR FIRST THREE QUARTERS

 (The way it was...) 

1 1 0 0 0 0 0 1 0 0 0 

Number of institutions...............................2001 1,553 593 814 102 44 613 205 395 122 109 109

 ...............................................1999 1,649 672 831 111 35 637 229 428 127 114 114

 ...............................................1997 1,813 789 868 121 35 693 263 466 137 122 132 

Total assets (in billions).............................2001 $1,289.4 $30.6 $251.1 $190.4 $817.3 $433.9 $92.4 $191.0 $42.7 $70.1 $459.3

 ................................................1999 1,142.6 34.3 243.0 224.5 640.8 374.5 73.4 181.3 40.4 73.7 399.3

 ................................................1997 1,021.9 41.0 255.5 246.8 478.7 343.4 65.1 172.5 34.6 64.7 341.7 

Return on assets (%)................................2001 1.05 0.72 0.77 0.87 1.20 1.00 0.58 0.91 0.82 1.28 1.24

 ................................................1999 1.01 0.70 0.90 1.04 1.05 1.02 0.85 1.05 0.82 1.16 1.00

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

Net charge-offs to loans & leases (%) 

0.89 0.80 0.97 1.02 0.80 1.00 0.92 0.97 1.01 0.88 0.74 

................................................2001 0.25 0.11 0.11 0.20 0.32 0.18 0.42 0.53 0.19 0.35 0.16

 ................................................1999 0.16 0.07 0.09 0.28 0.15 0.10 0.23 0.24 0.15 0.21 0.16

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

Noncurrent assets plus 

0.29 0.10 0.14 0.42 0.32 0.28 0.46 0.23 0.06 0.38 0.30 

OREO to assets (%)*.....................2001 0.64 0.72 0.58 0.77 0.62 0.53 0.63 0.82 0.74 0.97 0.60

 ................................................1999 0.61 0.70 0.56 0.91 0.52 0.65 0.54 0.67 0.52 0.91 0.51

 .................................................1997 1.02 0.88 0.88 1.44 0.89 1.24 0.91 0.65 0.61 1.03 1.04 

Equity capital ratio (%)..............................2001 8.68 12.80 10.63 8.90 7.88 9.95 8.75 8.39 9.01 8.60 7.58

 ................................................1999 8.45 12.37 10.50 8.68 7.38 9.50 9.85 8.91 10.02 8.37 6.84

 ................................................1997 8.63 11.93 10.31 8.69 7.43 9.47 9.92 9.29 9.26 8.41 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 Third Quarter 2002 
TABLE IV-B. THIRD Quarter 2002, FDIC-Insured Savings Institutions 

THIRD QUARTER 

(The way it is...) 

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

All 

Institutions 

Asset Size Distribution Geographic Distribution by Region 

to 

Greater 

than $5 

Less 

than $100 

Million $1 Billion 

$1 Billion 

to 

$5 Billion 

$100 Million 

Billion 

East 

Northeast Southeast Central West 

West 

west 

Mid- South 

west 

1,482 524 810 102 46 594 189 377 117 101 104 

Total assets (in billions).................................... $1,339.3 $27.1 $257.8 $200.3 $854.1 $474.9 $100.3 $136.4 $45.0 $79.9 $502.7 

Total deposits (in billions).................................... 850.7 21.6 195.9 143.7 489.6 318.2 70.6 101.1 27.2 43.6 290.1 

Net income (in millions).................................... 3,971 66 584 468 2,852 1,418 182 247 111 293 1,719 

% of unprofitable institutions.............................. 6.7 10.9 4.4 5.9 2.2 6.1 5.8 9.3 6.8 6.9 2.9 

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

Performance Ratios (annualized, %) 

76.8 76.3 77.4 72.5 80.4 77.1 79.9 72.7 82.1 76.2 78.8 

Yield on earning assets.................................... 6.19 6.39 6.41 6.20 6.12 6.22 6.59 6.42 6.44 6.11 6.00 

Cost of funding earning assets........................... 2.79 2.87 2.84 2.75 2.77 2.72 3.20 3.28 3.14 2.49 2.64 

Net interest margin.......................................... 3.41 3.52 3.56 3.45 3.34 3.51 3.39 3.14 3.30 3.62 3.36 

Noninterest income to earning assets.................. 0.82 2.84 0.86 0.67 0.77 0.86 1.84 0.76 0.59 1.24 0.53 

Noninterest expense to earning assets.................. 2.55 4.93 2.96 2.71 2.31 2.37 3.38 3.05 2.48 2.71 2.39 

Loan and lease loss provision to assets............... 0.25 0.10 0.14 0.18 0.30 0.15 1.25 0.24 0.22 0.32 0.14 

Net operating income to assets........................... 0.83 0.80 0.81 0.66 0.87 1.11 0.31 0.33 0.70 1.25 0.74 

Pretax return on assets................................. 1.84 1.49 1.39 1.54 2.06 1.86 1.08 1.10 1.52 1.95 2.19 

Return on assets............................................. 1.20 0.99 0.92 0.95 1.35 1.22 0.73 0.73 1.01 1.50 1.38 

Return on equity............................................. 12.89 7.87 8.77 10.25 15.22 12.01 8.03 7.18 11.36 17.95 16.08 

Net charge-offs to loans and leases..................... 0.28 0.10 0.16 0.20 0.34 0.21 0.85 0.49 0.17 0.30 0.17 

Loan and lease loss provision to net charge-offs...... 134.39 155.08 131.20 138.32 134.13 120.93 212.30 65.46 186.78 181.13 111.82 

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

Structural Changes (QTR) 

59.52 77.14 66.59 64.75 55.00 52.88 64.17 77.66 63.22 55.63 60.75 

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

Thrifts absorbed by mergers........................... 12 3 8 1 0 6 3 1 0 2 0 

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

PRIOR THIRD QUARTERS

 (The way it was...) 

0 0 0 0 0 0 0 0 0 0 0 

Return on assets (%)................................2001 1.08 0.71 0.86 0.82 1.23 1.00 0.65 1.03 0.85 1.39 1.25

 .................................................1999 1.01 0.70 0.87 1.04 1.06 1.08 0.71 1.00 0.81 1.19 0.98

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

Net charge-offs to loans & leases (%)

0.79 0.83 0.95 0.86 0.66 1.01 0.93 0.90 1.04 0.41 0.53 

.................................................2001 0.27 0.12 0.11 0.23 0.34 0.19 0.49 0.59 0.22 0.37 0.16

 .................................................1999 0.15 0.05 0.09 0.25 0.14 0.09 0.25 0.21 0.14 0.23 0.14

 .................................................1997 0.29 0.10 0.17 0.32 0.36 0.21 0.42 0.26 0.09 0.35 0.37 

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 

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

September 30, 2002 

Asset Size Distribution Geographical Distribution by Region 

Institutions 

All 

$5 Billion 

than $5 

Billion 

to 

$100 Million $1 Billion 

to 

Less Greater

than $100 

Million $1 Billion 

East 

east 

SouthCentral Northeast West 

West 

Midwest west SouthPercent of Loans 30-89 Days Past Due 

All loans secured by real estate.............................. 0.88 1.63 0.95 0.59 0.91 0.80 0.77 1.24 0.99 1.32 0.81 

Construction, development, and land.................. 0.92 1.35 1.19 0.76 0.81 0.53 0.75 1.62 0.93 1.38 0.62 

Commercial real estate.................................... 0.66 1.13 0.73 0.45 0.72 0.54 0.82 0.81 0.96 2.07 0.29 

Multifamily residential real estate........................ 0.14 0.69 0.29 0.18 0.08 0.12 0.81 0.39 0.24 0.28 0.08 

Home equity loans.......................................... 0.18 0.43 0.34 0.21 0.12 0.31 0.24 0.19 0.27 0.03 0.06 

Other 1-4 Family residential.............................. 1.04 1.82 1.08 0.71 1.06 0.97 0.82 1.43 1.09 1.26 1.00 

Commercial and industrial loans........................... 1.15 1.93 1.69 0.92 1.03 0.90 2.16 1.88 1.62 0.64 1.01 

Loans to individuals............................................. 1.84 2.39 1.85 1.29 1.94 1.32 2.48 1.97 1.68 0.80 2.69 

Credit card loans............................................. 2.16 0.97 2.75 1.07 2.13 1.48 4.61 2.81 3.92 0.68 1.79 

Other loans to individuals................................. 1.77 2.50 1.72 1.31 1.89 1.31 1.65 1.77 1.54 0.92 2.78 

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

Percent of Loans Noncurrent* 

0.96 1.69 1.03 0.66 0.99 0.84 1.18 1.31 1.06 1.15 0.89 

All real estate loans............................................. 0.82 0.91 0.71 0.69 0.88 0.67 0.65 1.04 0.65 1.66 0.82 

Construction, development, and land.................. 1.53 1.03 1.22 1.22 1.91 1.19 0.53 2.47 1.28 0.95 2.48 

Commercial real estate.................................... 1.24 0.98 0.84 0.98 1.80 0.86 0.86 1.13 0.67 4.27 1.43 

Multifamily residential real estate........................ 0.32 0.35 0.36 0.28 0.32 0.21 0.30 0.84 1.10 8.10 0.06 

Home equity loans.......................................... 0.09 0.23 0.13 0.11 0.08 0.12 0.16 0.13 0.08 0.01 0.05 

Other 1-4 Family residential.............................. 0.82 0.93 0.70 0.67 0.87 0.69 0.70 1.01 0.58 1.05 0.88 

Commercial and industrial loans........................... 2.28 1.61 1.90 2.97 2.20 1.76 3.34 2.87 1.99 2.45 2.59 

Loans to individuals............................................. 0.63 1.10 0.66 0.57 0.63 0.50 1.07 0.93 0.54 0.42 0.42 

Credit card loans............................................. 1.43 0.63 0.81 0.44 1.54 1.26 2.85 1.37 1.49 0.61 1.08 

Other loans to individuals................................. 0.42 1.15 0.64 0.58 0.28 0.36 0.37 0.83 0.49 0.22 0.38 

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

Percent of Loans Charged-off (net, YTD) 

0.87 0.95 0.77 0.82 0.91 0.73 0.92 1.10 0.69 1.45 0.85 

All real estate loans............................................. 0.05 0.04 0.05 0.07 0.04 0.04 0.08 0.10 0.05 0.06 0.04 

Construction, development, and land.................. 0.11 0.10 0.14 0.15 0.06 0.04 0.09 0.24 0.10 0.06 0.14 

Commercial real estate.................................... 0.06 0.02 0.09 0.03 0.07 0.04 0.21 0.12 0.15 0.16 -0.01 

Multifamily residential real estate........................ 0.00 -0.02 0.01 0.05 -0.02 -0.01 0.12 0.12 -0.05 0.01 -0.02 

Home equity loans.......................................... 0.11 0.03 0.04 0.37 0.07 0.19 0.28 0.06 0.13 0.06 0.03 

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

Commercial and industrial loans........................... 1.34 0.98 0.89 0.77 1.66 0.96 2.86 1.13 0.98 1.13 1.60 

Loans to individuals............................................. 1.86 0.73 1.10 0.84 2.27 1.24 2.74 2.22 1.27 0.88 2.48 

Credit card loans............................................. 3.69 1.20 3.21 2.05 3.79 4.01 7.48 3.15 8.94 1.31 3.93 

Other loans to individuals................................. 1.26 0.69 0.78 0.78 1.56 0.80 1.01 1.47 0.73 0.44 2.38 

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

Loans Outstanding (in billions) 

0.25 0.13 0.15 0.17 0.30 0.19 0.76 0.35 0.18 0.32 0.17 

All real estate loans............................................. $773.7 $15.7 $148.7 $113.0 $496.2 $238.0 $51.8 $87.8 $27.1 $33.7 $335.3 

Construction, development, and land.................. 37.8 1.1 11.1 8.6 16.9 8.6 5.9 5.5 2.1 7.1 8.6 

Commercial real estate.................................... 69.6 1.7 23.4 18.3 26.3 32.3 4.9 7.8 3.8 4.7 16.1 

Multifamily residential real estate........................ 63.1 0.4 9.2 13.3 40.2 18.1 1.1 4.8 1.2 1.0 36.8 

Home equity loans.......................................... 38.3 0.6 7.8 5.5 24.4 11.6 3.5 6.1 1.1 1.3 14.8 

Other 1-4 Family residential.............................. 564.6 12.0 97.1 67.2 388.4 167.5 36.4 63.5 18.8 19.5 259.0 

Commercial and industrial loans........................... 41.0 0.8 7.8 7.6 24.9 19.7 5.1 3.1 1.3 3.7 8.1 

Loans to individuals............................................. 65.5 1.2 10.3 9.7 44.3 19.4 12.7 7.5 2.1 10.0 13.7 

Credit card loans............................................. 14.2 0.1 1.5 0.5 12.3 3.1 3.6 1.5 0.1 5.1 0.8 

Other loans to individuals................................. 50.7 1.1 8.8 9.2 31.7 15.9 9.1 6.0 2.0 4.9 12.7 

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

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

885.0 17.7 167.5 131.5 568.3 280.0 70.1 98.6 30.6 47.7 358.0 

All other real estate owned.................................... $1,084.4 $34.1 $229.6 $209.4 $611.3 $231.1 $112.5 $180.9 $72.4 $89.9 $397.6 

Construction, development, and land.................. 193.4 2.5 34.7 34.6 121.6 21.2 48.7 13.9 31.3 15.4 62.8 

Commercial real estate.................................... 227.0 8.2 55.0 106.9 57.0 105.2 14.4 29.2 8.1 28.4 41.8 

Multifamily residential real estate........................ 32.4 1.3 5.8 5.0 20.3 2.6 1.6 4.8 1.7 19.3 2.4 

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

Troubled Real Estate Asset Rates*** 

(% of total RE assets) 

648.9 22.6 135.9 76.5 413.9 114.4 48.7 133.6 32.5 27.4 292.4 

All real estate loans............................................. 0.96 1.12 0.86 0.88 1.00 0.76 0.87 1.25 0.91 1.92 0.94 

Construction, development, and land.................. 2.03 1.26 1.53 1.61 2.61 1.44 1.34 2.71 2.73 1.17 3.18 

Commercial real estate.................................... 1.57 1.51 1.07 1.56 2.02 1.18 1.15 1.51 0.88 4.79 1.69 

Multifamily residential real estate........................ 0.37 0.66 0.43 0.32 0.37 0.22 0.44 0.94 1.24 9.78 0.07 

1-4 family residential....................................... 0.88 1.07 0.79 0.74 0.93 0.72 0.78 1.12 0.71 1.11 0.94 

* 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 Third Quarter 2002 
ALL FDIC-INSURED INSTITUTIONS
 

� BIF Reserve Ratio Remains Unchanged At 1.25 Percent 

� Unrealized Gains on Securities Prevent BIF from Shrinking 

� SAIF Reserve Ratio Increases to 1.39 Percent 

� One Small BIF-Member Institution Fails During Quarter 

Total assets of the nation’s 9,433 FDIC-insured depository institutions increased by $235.7 billion from June 30 to 

September 30, 2002. Deposits, which increased by 

$138.6 billion during the period, funded about 58.8 percent of this growth. Deposits in domestic offices grew by 

$166.4 billion (3.6 percent) while deposits in foreign 

offices shrank by $27.9 billion (4.4 percent). Domestic 

deposits in accounts greater than $100 thousand grew by 

$158.2 billion while domestic deposits in accounts less 

than $100 thousand grew by $8.3 billion. Quarterly 

growth was strongest for money market deposit accounts 

which increased by $60.2 billion, other savings deposits 

which increased by $45.2 billion, and large time deposits, 

which grew by $43.3 billion. 

Insured deposits increased by 1.1 percent during the third 

quarter of 2002, faster than the 0.9 percent growth in the 

third quarter of 2001, and faster than the 0.3 percent 

growth of the previous quarter. Insured deposits 

increased at 5,807 institutions, remained unchanged at 

65 institutions, and declined at 3,520 institutions. Deposits insured by the Bank Insurance Fund (BIF) 

increased by 0.8 percent for the three months ending on 

September 30, 2002, reaching $2.510 trillion. During the 

first nine months of 2002 deposits insured by the BIF 

increased by 4.2 percent. During the third quarter of 2002 

deposits insured by the Savings Association Insurance 

Fund (SAIF) increased by 2.2 percent, to $836.3 billion. 

SAIF-insured deposits grew by 4.2 percent during the first 

three quarters of 2002. 

The Bank Insurance Fund (BIF) grew by 0.6 percent 

($196 million) during the third quarter, ending the quarter 

with a balance of $31.38 billion (unaudited). The BIF’s 

third quarter growth was almost entirely due to a $433 million rise in unrealized gains on investment securities. 

Without these unrealized gains in the third quarter, the 

BIF would have shrunk enough to cause the BIF reserve 

ratio to decline by more than 1.7 basis points. For the first 

nine months of 2002, unrealized gains on securities were 

more than three times as much as were recorded during 

the same period a year earlier. During the third quarter, 

the provision for insurance losses to the BIF increased by 

$466 million, and interest income on securities declined 

by $80 million. The reserve ratio for the Bank Insurance 

Fund was 1.25 percent at the end of third quarter 2002, 

unchanged from three months earlier. 

The Savings Association Insurance Fund (SAIF) 

increased during the third quarter of 2002 by 2.3 percent 

to $11.69 billion (unaudited). Increased unrealized gains 

on securities and a negative provision for insurance losses made the third quarter increase for the SAIF the second 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 allowed the 

SAIF reserve ratio rise from 1.38 on June 30 to 1.39 percent on September 30. This was the second time the 

SAIF reserve ratio has increased since the beginning of 

2002. 

Sweeps of brokerage-originated cash management funds 

to FDIC-insured accounts of affiliate banks increased by 3 

percent ($2.5 billion) during the third quarter of 2002. 

Among insured institutions whose brokerage affiliates 

sweep cash management accounts into FDIC-insured 

accounts, BIF-insured brokered deposits rose by $2.4 billion and SAIF-insured brokered deposits increased by 

$102 million. During the same period, fully insured brokered deposits increased by 1.2 percent at all other 

BIF-insured institutions and increased at all other SAIFinsured institutions by 4.5 percent. 

One FDIC insured institution, a BIF-member commercial 

bank failed during the third quarter of 2002. At the time of 

failure this institution had $9.6 million in assets. Its estimated cost to the BIF was $5.7 million. For the first nine 

months of 2002, eight BIF member institutions with combined assets of $2,413 million have failed at an estimated 

cost of $623 million. During the same period one SAIFmember institution with assets of $50 million failed with an 

estimated cost of $1.4 million. 

QUARTERLY PERCENTAGE CHANGE IN 

INSURANCE FUND BALANCES, 1999–2002 

Percent Change (not annualized) 

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 

0.6 

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

Bank Insurance Fund (BIF) 

Savings Association 

Insurance Fund (SAIF) 

0 

1999 2000 2001 2002 

FDIC Quarterly Banking Profile 

Third Quarter 2002 15 All FDIC-Insured Institutions 

2.3 
 

 

 

 

 

 

 

 

 

 

 

 

 

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

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

Number of institutions reporting.............................. 9,415 9,702 9,613 9,904 10,221 10,463 10,922 

Total assets...................................................... $ 8,271,896 7,844,936 7,868,407 7,461,814 6,883,603 6,530,837 6,041,026 

Total deposits...................................................... 5,391,814 5,084,365 5,189,370 4,914,764 4,538,042 4,386,260 4,125,796 

Number of problem institutions.............................. 148 94 114 94 79 84 92 

Assets of problem institutions (in billions).................. $42 $18 $40 $24 $10 $11 $6 

Number of failed/assisted institutions..................... 9 ... 4 4 7 8 3 1 

Assets of failed/assisted institutions (in billions)......... $2.46 $2.36 $2.25 $0.41 $1.56 $0.37 $0.03 

** As of September 30. 

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

(dollar figures in millions) 

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

3rd Quarter 

2002 2002 

2nd Quarter 3rd Quarter 

2001 

%Change 

01:3-02:3 

9,415 9,465 9,702 -3.0 

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

CONDITION DATA 

1,997,066 2,001,868 1,934,462 3.2 

Total assets..................................................................... $8,271,896 $8,037,682 $7,844,936 5.4

 Loans secured by real estate.......................................... 2,744,385 2,627,790 2,506,430 9.5 

1-4 Family residential................................................... 1,685,686 1,588,767 1,529,288 10.2 

Home equity loans...................................................... 239,583 223,066 173,852 37.8 

Multifamily residential property....................................... 131,876 129,840 122,471 7.7 

Commercial real estate................................................ 611,313 599,558 556,121 9.9 

Construction, development, and land.............................. 243,635 235,944 228,265 6.7 

Other real estate loans................................................ 71,875 73,680 70,285 2.3 

Commercial & industrial loans 962,402 976,448 1,049,042 -8.3

 Loans to individuals...................................................... 753,665 728,760 676,394 11.4

 Credit cards & related plans.......................................... 281,883 267,745 234,938 20.0

 Other loans & leases...................................................... 497,405 491,938 503,121 -1.1

 Less: Unearned income & contra accounts..................... 3,789 3,988 2,833 33.7

 Total loans & leases...................................................... 4,954,068 4,820,948 4,732,153 4.7

 Less: Reserve for losses................................................ 83,839 82,397 76,075 10.2 

Net loans and leases......................................................... 4,870,228 4,738,550 4,656,078 4.6 

Securities........................................................................ 1,589,368 1,530,218 1,382,688 14.9 

Other real estate owned................................................... 5,039 4,911 4,507 11.8 

Goodwill and other intangibles............................................. 145,776 153,522 134,911 8.1 

All other assets............................................................... 1,661,485 1,610,480 1,666,752 -0.3 

Total liabilities and capital................................................... 8,271,896 8,037,682 7,844,936 5.4

 Deposits....................................................................... 5,391,814 5,253,845 5,084,365 6.0

 Other borrowed funds...................................................... 1,576,028 1,528,728 1,526,247 3.3

 Subordinated debt......................................................... 95,992 97,016 96,385 -0.4

 All other liabilities............................................................ 444,638 414,601 440,241 1.0

 Equity capital.................................................................. 763,425 743,492 697,698 9.4 

Loans and leases 30-89 days past due................................. 55,068 53,501 62,127 -11.4 

Noncurrent loans and leases............................................. 68,883 65,827 58,851 17.0 

Restructured loans and leases............................................. 3,541 3,317 2,746 28.9 

Direct and indirect investments in real estate........................ 696 704 915 -24.0 

Mortgage-backed securities................................................ 901,700 855,455 766,943 17.6 

Earning assets............................................................... 7,154,258 6,974,302 6,766,768 5.7 

FHLB Advances............................................................... 465,154 441,929 447,128 4.0 

Unused loan commitments................................................ 5,583,546 5,514,999 5,031,952 11.0 

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................................................... 

First Three 

Qtrs 2001 

First Three %Change 

2002 01:3-02:3

3rd Quarter 

2001 

3rd Quarter 

Qtrs 2002 %Change

$326,306 $375,856 -13.2 $109,377 $121,550 -10.0 

118,538 191,250 -38.0 39,473 57,729 -31.6

207,768 184,606 12.5 69,904 63,821 9.5 

37,691 30,230 24.7 13,521 12,472 8.4 

136,071 125,903 8.1 46,087 41,727 10.5 

193,855 186,555 3.9 65,811 63,704 3.3 

7,999 6,106 31.0 4,338 2,329 86.2 

40,071 34,057 17.7 13,640 10,945 24.6 

3 -249 N/M -41 70 N/M

80,223 65,525 22.4 27,315 20,826 31.2 

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

FDIC Quarterly Banking Profile 

All FDIC-Insured Institutions 16 Third Quarter 2002 
 

TABLE III-C. Selected Insurance Fund Indicators* 

(dollar figures in millions) 

3rd Quarter 2nd Quarter 3rd Quarter %Change 

2002 2002 2001 01:3-02:3 

Bank Insurance Fund 

Reserve ratio (%)..................................................................... 1.25 1.25 1.32 -5.5 

Fund balance (unaudited)......................................................... $31,383 $31,187 $31,834 -1.4 

Estimated insured deposits...................................................... 2,509,640 2,490,341 2,405,596 4.3 

SAIF-member Oakars............................................................ 90,108 87,712 66,811 34.9 

BIF-members........................................................................ 2,419,532 2,402,629 2,338,785 3.5 

Assessment base.................................................................. 3,760,672 3,632,658 3,477,163 8.2 

SAIF-member Oakars............................................................ 91,791 89,195 68,059 34.9 

BIF-members........................................................................ 3,668,882 3,543,463 3,409,104 7.6 

Savings Association Insurance Fund 

Reserve ratio (%)..................................................................... 1.39 1.38 1.39 -0.4 

Fund balance (unaudited)......................................................... $11,586 $11,323 $10,815 7.1 

Estimated insured deposits...................................................... 836,319 818,397 777,246 7.6 

BIF-member Oakars............................................................... 358,244 347,691 323,358 10.8 

SAIF-member Sassers......................................................... 92,976 92,257 68,829 35.1 

Other SAIF members............................................................ 385,099 378,448 385,059 0.0 

Assessment base.................................................................. 957,665 923,455 873,239 9.7 

BIF-member Oakars............................................................... 362,951 350,179 324,565 11.8 

SAIF-member Sassers......................................................... 113,766 111,012 86,758 31.1 

Other SAIF members............................................................ 480,948 462,264 461,916 4.1 

Fund Balances and Insured Deposits* 

Insurance Fund Reserve Ratios* ($Millions) 

Percent of Insured Deposits BIF BIF-Insured SAIF SAIF-Insured 

Balance Deposits Balance Deposits 

Target 

Ratio 

1.25 

1.38 1.39 

1.37 

1.35 

1.33 1.33 1.32 

1.26 

1.23 

1.25 1.25 

1.36 1.37 

1.43 1.43 1.43 

1.4 1.39 

1.36 1.36 

1.38 1.39 

BIF 

SAIF 

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 

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

9/01 31,834 2,405,596 10,815 777,246 

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 2,490,341 11,323 818,397 

9/02 31,383 2,509,640 11,586 836,319 

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

* 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 September 30. 

2002* 2001* 2001 2000 1999 1998 1997 

8 

$2,413 

3 

$59 

3 

$54 

6 

$378 

7 

$1,490 

3 

$371 

1 

$27 

1 

$50 

1 

$2,300 

1 

$2,200 

1 

$30 

1 

$71 

0 

$0 

0 

$0 

FDIC Quarterly Banking Profile 

Third 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................................................ 8,171 8,398 8,326 8,571 8,834 9,031 9,404 

BIF-member Oakars............................................................ 788 762 763 743 744 745 778 

Other BIF-members............................................................... 7,383 7,636 7,563 7,828 8,090 8,286 8,626 

Total assets...........................................................................$ 7,185,642 $6,839,516 $6,856,670 $6,509,653 $5,980,071 $5,702,659 $5,285,302 

Total deposits........................................................................ 4,699,960 4,466,763 4,567,547 4,337,665 3,987,339 3,843,778 3,611,387 

Net income........................................................................... 70,525 58,148 76,636 73,580 73,916 64,303 61,417 

Return on assets (%)............................................................... 1.36 1.17 1.14 1.18 1.29 1.18 1.22 

Return on equity (%)............................................................... 14.70 13.36 12.93 13.89 15.10 13.80 14.43 

Noncurrent assets plus OREO to assets (%)................................. 0.95 0.83 0.90 0.72 0.62 0.64 0.67 

Number of problem institutions................................................... 124 70 90 74 66 68 73 

Assets of problem institutions................................................... $34,140 $10,047 $31,881 $10,787 $4,450 $5,326 $4,598 

Number of failed/assisted institutions....................................... 8 ... 3 3 6 7 3 1 

Assets of failed/assisted institutions............................................. $2,413 $59 $54 $378 $1,490 $371 $27 

SAIF Members 

Number of institutions reporting................................................ 1,244 1,304 1,287 1,333 1,387 1,432 1,518 

SAIF-member Oakars............................................................ 132 128 130 123 123 116 112 

Other SAIF-members............................................................ 1,112 1,176 1,157 1,210 1,264 1,316 1,406 

Total assets...........................................................................$ 1,086,254 $1,005,420 $1,011,737 $952,161 $903,532 $828,177 $755,724 

Total deposits........................................................................ 691,854 617,602 621,823 577,100 550,703 542,481 514,409 

Net income........................................................................... 9,697 7,377 10,622 8,070 8,450 7,598 6,486 

Return on assets (%)............................................................... 1.22 1.01 1.11 0.89 0.99 0.98 0.94 

Return on equity (%)............................................................... 13.93 12.27 13.46 11.12 11.97 11.34 11.13 

Noncurrent assets plus OREO to assets (%)................................. 0.74 0.73 0.75 0.65 0.64 0.80 0.98 

Number of problem institutions................................................... 24 24 24 20 13 16 19 

Assets of problem institutions................................................... $8,132 $8,275 $7,923 $13,053 $5,524 $5,992 $1,662 

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

Assets of failed/assisted institutions............................................. $50 $2,300 $2,200 $30 $71 $0 $0 

* Excludes insured branches of foreign banks (IBAs). 

** Through September 30, ratios annualized where appropriate. 

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

(dollar figures in millions) 

Commercial Banks and Savings Institutions 

September 30, 2002 

Number of 

Institutions 

Total 

Assets 

Domestic 

Deposits* 

Estimated Insured Deposits 

BIF SAIF Total

FDIC-Insured Commercial Banks............................................. 7,933 6,932,604 3,928,107 2,264,761 377,971 2,642,732 

BIF-member..................................................................... 7,824 6,775,702 3,823,135 2,234,407 323,265 2,557,672 

SAIF-member.................................................................. 109 156,901 104,972 30,354 54,706 85,060 

FDIC-Supervised............................................................... 4,894 1,268,382 936,183 617,757 79,407 697,164 

OCC-Supervised............................................................... 2,092 3,846,111 2,114,022 1,211,949 216,782 1,428,731 

Federal Reserve-Supervised................................................ 947 1,818,111 877,903 435,055 81,782 516,837 

FDIC-Insured Savings Institutions............................................. 1,482 1,339,293 850,733 243,654 458,348 702,003 

OTS-Supervised Savings Institutions....................................... 983 995,137 606,789 103,583 395,522 499,105 

BIF-member..................................................................... 38 129,586 65,513 46,311 10,423 56,734 

SAIF-member.................................................................. 945 865,550 541,276 57,272 385,099 442,371 

FDIC-Supervised State Savings Banks.................................... 499 344,156 243,944 140,071 62,827 202,898 

BIF-member..................................................................... 309 280,354 198,471 137,590 24,556 162,146 

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

Total Commercial Banks and 

190 63,802 45,473 2,482 38,270 40,752 

Savings Institutions................................................ 9,415 8,271,896 4,778,840 2,508,416 836,319 3,344,735 

BIF-member........................................................................ 8,171 7,185,642 4,087,120 2,418,307 358,244 2,776,552 

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

Other FDIC-Insured Institutions 

1,244 1,086,254 691,721 90,108 478,075 568,183 

U.S. Branches of Foreign Banks............................................. 18 11,346 5,763 1,225 0 1,225 

Total FDIC-Insured Institutions....................................... 9,433 8,283,242 4,784,603 2,509,640 836,319 3,345,959 

* Excludes $613 billion in foreign office deposits, which are uninsured. 

FDIC Quarterly Banking Profile 

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

BIF Assessment Base Distribution
 

Assessable Deposits in Millions as of September 30, 2002
 

Supervisory and Capital Ratings for First Semiannual Assessment Period, 2003
 

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........................... 

7,489 

$3,592,687 

119 

$15,360 

2 

$207 

91.5 

95.5 

1.5 

0.0 

0.0 

0.0 

445 5.4 

$123,391 3.3 

13 0.0 

$1,854 0.0 

0 0.0 

$0 0.0 

102 

$24,414 

12 

$1,100 

7 

$1,660 

1.2 

1.0 

0.0 

0.0 

0.0 

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 September 30, 2002
 

Supervisory and Capital Ratings for First Semiannual Assessment Period, 2003
 

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........................... 

1,121 

$912,236 

9 

$3,767 

0 

$0 

90.1 

95.3 

1.0 

0.0 

0.0 

0.0 

84 6.8 

$35,273 3.7 

4 0.0 

$252 0.0 

0 0.0 

$0 0.0 

19 

$5,846 

6 

$254 

1 

$38 

1.5 

1.0 

0.1 

0.0 

0.0 

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
 

First Semiannual 2003 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 

Third 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 9/02 

Saving Institutions 71 49 35 21 15 13 15 16 15 18 17 22 20 19 22 21 20
 

Commercial Banks 247 144 82 71 69 66 72 73 75 76 78 80 74 95 102 115 126
 

318 

193 

117 

92 84 79 87 89 90 94 95 102 94 

114 124 

136 

146 

0 

50 

100 

150 

200 

250 

300 

350 

Saving Institutions 

Commercial Banks 

ASSETS OF FDIC-INSURED “PROBLEM” INSTITUTIONS, 

1994–2002 

$ Billions 

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 9/02
 

Saving Institutions 39 14 7 2 6 6 5 8 7 7 6 7 4 4 15 4
 4
 

Commercial Banks 33 17 5 5 5 4 5 11 12 17 17 17 14 36 37 36 38
 

$72 

$31 

$12 

$6 

$11 $10 $10 

$19 $19 

$24 $23 $24 

$18 

$40 

$52 

$40 $42 

0 

10 

20 

30 

40 

50 

60 

70 

80 

Saving Institutions 

Commercial Banks 

FDIC Quarterly Banking Profile 

All FDIC-Insured Institutions 20 Third 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 

Third 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 Third 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 

Third Quarter 2002 23 Notes to Users