2023 VOLUME 17 NUMBER 4

THIRD QUARTER 

Quarterly Banking Profile 1

Implications of High Inflation for Banking Outcomes and 45

Flows: Observations From 2021 to 2022 and the 1970s 

Quarterly

FEDERAL DEPOSIT INSURANCE CORPORATION 
QUARTERLY 2023 VOLUME 17, NUMBER 4

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

and contains a comprehensive summary of the most current financial results for the banking industry. Feature articles 

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

level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and 

the development of regulatory policy.

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Chairman 

Martin J. Gruenberg

Director, Division of Insurance and Research

Patrick Mitchell

Executive Editors

George French 

Philip Shively

Managing Editors

John M. Anderlik

Rosalind Bennett

Alexander L. Marshall

Michael Spencer

Editors

Clayton Boyce

Kathy Zeidler

Publication Manager

Lynne Montgomery

Media Inquiries

(202) 898-6993
QUARTERLY 2023 VOLUME 17, NUMBER 4

i 

QUARTERLY BANKING PROFILE: 

THIRD QUARTER 2023

Net income for the 4,614 FDIC-insured commercial banks and savings 

institutions declined $2.4 billion (3.4 percent) from one quarter ago to $68.4 

billion in third quarter 2023. Lower noninterest income and higher realized 

losses on securities drove the decline in net income from the previous quarter. 

First and second quarter income benefitted from non-recurring accounting 

gains resulting from the acquisition of the three large bank failures this spring. 

Excluding these one-time gains, net income would have been roughly flat for the 

past four quarters at approximately $68 billion. The banking industry reported 

an average return on assets (ROA) of 1.17 percent in the third quarter, down from 

1.21 percent in the previous quarter and 1.21 percent in the year-ago quarter. 

See page 1.

COMMUNITY BANK PERFORMANCE Community banks—which represent 90 percent of insured institutions—

reported quarterly net income of $6.7 billion in third quarter 2023, a decline of 

$335.5 million (4.8 percent) from one quarter ago. Higher noninterest expense, 

lower net interest income, increased provisions, and greater losses on the sale 

of securities more than offset higher noninterest income. More than half (55.0 

percent) of all community banks reported a decline in net income compared 

with second quarter 2023. The share of unprofitable community banks rose 

slightly to 6.6 percent. The community bank pretax ROA declined 6 basis points 

from one quarter ago to 1.21 percent. See page 19.

INSURANCE FUND INDICATORS The Deposit Insurance Fund (DIF) balance increased by $2.4 billion to $119.3 

billion. The rise in the DIF was primarily driven by assessment income of $3.2 

billion. Net investment income, which includes interest income and the effect of 

unrealized and realized gains and losses, added $0.9 billion. These gains were 

partially offset by provisions for insurance losses of $1.2 billion and operating 

expenses of $0.5 billion. One insured institution failed during the third quarter 

at an estimated cost to the Fund of $54.2 million. The DIF reserve ratio was 1.13 

percent on September 30, 2023, up 2 basis points from the previous quarter and 

10 basis points lower than one year ago. See page 31.

Featured Article

IMPLICATIONS OF HIGH INFLATION FOR BANKING OUTCOMES AND DEPOSIT FLOWS: 

OBSERVATIONS FROM 2021 TO 2022 AND THE 1970s

Persistently high inflation can affect banks in various ways as monetary policy 

tightening and macroeconomic changes occur. This article compares lending and 

bank performance during the stagflation periods of the 1970s and recent high 

inflation with a focus on the effects on deposits. Robust deposit growth in the 

1970s suggests that banks were actively seeking deposits, while in 2021 to 2022, 

banks generally were flush with deposits as a result of varying pandemic support 

programs. The differences between the two periods illustrate the importance of 

considering broader macroeconomic conditions when analyzing the effects of 

inflation on banks. See page 45.
PAGE INTENTIONALLY LEFT BLANK
QUARTERLY 2023 VOLUME 17, NUMBER 4

1 

INSURED INSTITUTION PERFORMANCE

Net Income Decreased From the Prior Quarter, Driven by Lower Noninterest Income and Higher Realized Losses on Securities

The Net Interest Margin Increased From the Prior Quarter to 3.30 Percent

Unrealized Losses on Securities Increased From the Prior Quarter

Loan Balances Increased From Last Quarter and One Year Ago

Total Deposits Declined for a Sixth Consecutive Quarter 

Overall Asset Quality Metrics Remained Favorable Despite Modest Deterioration

NET INCOME DECREASED FROM THE 

PRIOR QUARTER, DRIVEN BY 

LOWER NONINTEREST INCOME AND 

HIGHER REALIZED LOSSES ON 

SECURITIES

The aggregate net income for the 4,614 FDIC-insured commercial 

banks and savings institutions totaled $68.4 billion during the three 

months ended September 30, a decline of $2.4 billion (3.4 percent) from 

the prior quarter. Lower noninterest income (down $4.1 billion, or 5.2 

percent) and higher realized losses on securities (up $3.0 billion) drove 

the decline in net income. First and second quarter income benefited 

from non-recurring accounting gains resulting from the acquisition 

of the three large bank failures this spring. Excluding these one-time 

gains, net income would have been roughly flat for the past four 

quarters at about $68 billion. Year-over-year net income declined by 

$3.3 billion (4.6 percent), as higher provision expense (up $4.9 billion, 

or 33.2 percent), higher realized losses on securities (up $2.9 billion), 

and lower noninterest income (down $2.7 billion, or 3.5 percent) more 

than offset an increase in net interest income (up $6.6 billion, or 3.9 

percent).

The banking industry reported an average return on assets of 1.17 

percent in the third quarter, down from 1.21 percent in the previous 

quarter and 1.21 percent in the year-ago quarter.

Chart 1

Quarterly Net Income

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

Net Operating Income

Realized Securities Gains/Losses, Net

-40

-20

0

20

40

60

80

100

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Chart 2

Source: FDIC.

Percent

Quarterly Net Interest Margin

All FDIC-Insured Institutions

 Assets > $250 Billion

 Assets $10 Billion - $250 Billion

 Assets $1 Billion - $10 Billion

 Assets $100 Million - $1 Billion

 Assets < $100 Million

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Industry

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0
QUARTERLY 2023 VOLUME 17, NUMBER 4

2 

THE NET INTEREST MARGIN 

INCREASED FROM THE PRIOR 

QUARTER TO 3.30 PERCENT

The net interest margin (NIM) for the banking industry increased 3 

basis points from the previous quarter to 3.30 percent. While deposit 

costs increased faster than loan yields over the past quarter, the cost of 

nondeposit liabilities was stable, resulting in the increased NIM. The 

banking industry’s NIM is 16 basis points higher than the year-ago 

quarter and is above the pre-pandemic average of 3.25 percent.1

NET OPERATING REVENUE 

DECLINED QUARTER OVER 

QUARTER BUT INCREASED YEAR 

OVER YEAR

Net operating revenue (net interest income plus noninterest income) 

declined by $3.2 billion (1.3 percent) from the second quarter to $249.3 

billion. Noninterest income declined by $4.1 billion (5.2 percent), 

while net interest income increased by $897.1 million (0.5 percent). 

The reduction in noninterest income was driven by a $2.7 billion 

non-recurring accounting gain from the acquisition of a large bank 

failure last quarter. The quarterly increase in net interest income was 

from higher interest income (up $15.4 billion, or 5.4 percent) that was 

partially offset by higher interest expense (up $14.5 billion, or 13.3 

percent). Relative to third quarter 2022, net operating revenue rose 

by $3.9 billion (1.6 percent), as the increase in net interest income (up 

$6.6 billion, or 3.9 percent) outpaced the decline in noninterest income 

(down $2.7 billion, or 3.5 percent).

1 The “pre-pandemic average” refers to the period first quarter 2015 through fourth quarter 2019 and is used consistently throughout this report.

Chart 3

Source: FDIC.

Quarter-Over-Quarter Change

($ Billions)

Change in Quarterly Credit Loss Provisions

All FDIC-Insured Institutions

-50

-40

-30

-20

-10

0

10

20

30

40

50

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Chart 4

Source: FDIC.

Note: ASC Topics 810 and 860 resulted in the consolidation of large amounts of securitized loan balances 

back onto banks’ balance sheets in the first quarter of 2010. Although the amount consolidated cannot be

precisely quantified, the industry would have reported a decline in loan balances for the quarter absent

this change in accounting standards.

$ Billions

Quarterly Change in Loan Balances

All FDIC-Insured Institutions

Quarterly Change (Le Axis)

12-Month Growth Rate (Right Axis) Percent

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 -10

-5

0

5

10

15

-300

-200

-100

0

100

200

300

400

500
QUARTERLY 2023 VOLUME 17, NUMBER 4

3 

NONINTEREST EXPENSE DECLINED 

FROM THE PRIOR QUARTER

Noninterest expense totaled $140.9 billion during the three months 

ended September 30, down $987.6 million (0.7 percent) from the prior 

quarter. A decline in “all other noninterest expense” (down $1.7 billion, 

or 2.7 percent), including lower write-in items and legal expenses, 

drove the quarterly decline.2 However, noninterest expense rose by $2.1 

billion (1.5 percent) from a year ago, led by an increase in salary and 

employee benefits expense (up $2.2 billion, or 3.3 percent). 

The efficiency ratio (noninterest expense to net operating revenue) 

increased 22 basis points from the prior quarter to 55.8 percent, 

indicating that the banking industry was less efficient in producing 

revenue. While the efficiency ratio increased for most Quarterly 

Banking Profile asset size groups, it decreased modestly for banks with 

assets between $1 billion and $10 billion.

2 “All other noninterest expense” includes material write-in items as well as expenses related to data processing, advertising and marketing, legal fees, intracompany 

transactions, and consulting and advisory fees. 

Chart 5

Quarterly Change in Deposits

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

-600

-400

-200

0

200

400

600

800

1,000

1,200

1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Chart 6

Source: FDIC.

Percent

Noncurrent Loan Rate and Quarterly Net Charge-O
 Rate

All FDIC-Insured Institutions

Quarterly Net Charge-O Rate

Noncurrent Rate

0

1

2

3

4

5

6

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
QUARTERLY 2023 VOLUME 17, NUMBER 4

4 

PROVISION EXPENSE DECLINED 

MODESTLY FROM THE PRIOR 

QUARTER

Provisions for credit losses totaled $19.5 billion in third quarter 2023, 

down $1.9 billion from the previous quarter but up $4.9 billion from a 

year ago.3

The reserve coverage ratio (the ratio of the allowance for credit losses 

to noncurrent loans) for the banking industry declined to 209.9 percent 

in third quarter 2023, down from the previous quarter’s record-high 

level of 224.8 percent. The decline in the ratio was due to noncurrent 

loan balances increasing at a faster pace than the allowance for credit 

losses.

UNREALIZED LOSSES ON 

SECURITIES INCREASED FROM THE 

PRIOR QUARTER4

Unrealized losses on securities totaled $683.9 billion in third quarter, 

up $125.5 billion (22.5 percent) from the prior quarter, primarily due 

to an increase in mortgage rates that reduced the value of mortgagebacked securities. Unrealized losses on held-to-maturity securities 

totaled $390.5 billion in the third quarter, while unrealized losses on 

available-for-sale securities totaled $293.5 billion.

3 Provisions for credit losses include both losses for loans and securities for CECL adopters but only loan losses for non-adopters. 

4 Unrealized losses on securities reflect the difference between the market value as of quarter end and the book value of non-equity securities. This calculation does not 

account for any unrealized gains or losses in “accumulated other comprehensive income” because unrealized gains and losses cannot be derived from Call Reports for the 

industry. 

Chart 7

-675

-600

-525

-450

-375

-300

-225

-150

-75

0

75

150

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: FDIC.

Note: Insured Call Report filers only. Unrealized losses on securities solely reflect the dierence

between the market value as of quarter end and the book value of non-equity securities.

Unrealized Gains (Losses) on Investment Securities

All FDIC-Insured Institutions

$ Billions Held-to-Maturity Securities Available-for-Sale Securities

Chart 8

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

All FDIC-Insured Institutions

 Assets of Problem Banks (Right Axis)

 Number of Problem Banks (Le Axis) Number $ Billions

Source: FDIC.

Note: The asset values of insured financial institutions on the problem bank list are what were

on record as of the last day of the quarter.

0

100

200

300

400

500

0

100

200

300

400

500

600

700

800

900

1,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
QUARTERLY 2023 VOLUME 17, NUMBER 4

5 

BANKING INDUSTRY ASSETS 

DECREASED FROM THE PRIOR 

QUARTER AND ONE YEAR AGO

Total assets declined by $56.2 billion (0.2 percent) from the previous 

quarter to $23.4 trillion. Securities portfolios led the decline (down 

$132.5 billion, or 2.4 percent), followed by assets in trading accounts 

(down $8.5 billion, or 1.0 percent). The decline in securities portfolios 

was primarily in mortgage-backed securities (down 92.2 billion, or 3.1 

percent) and state and municipal securities (down $22.0 billion, or 6.3 

percent). 

Relative to third quarter 2022, total assets decreased by $221.9 billion 

(0.9 percent). The increase in total loan and lease balances (up $343.0 

billion, or 2.9 percent) was more than offset by a decline in securities 

portfolios (down $620.1 billion, or 10.5 percent), primarily in mortgagebacked securities (down $330.9 billion, or 10.3 percent) and U.S. 

Treasury securities (down $209.6 billion, or 14.4 percent). 

LOAN BALANCES INCREASED FROM 

LAST QUARTER AND ONE YEAR AGO

Total loan and lease balances increased by $45.9 billion (0.4 percent) 

from the previous quarter. An increase in credit card loans (up $25.9 

billion, or 2.5 percent) and one-to-four family residential mortgages 

(up $23.1 billion, or 0.9 percent) drove the quarterly loan growth.

Relative to third quarter 2022, total loan and lease balances increased 

by $343.0 billion (2.9 percent). The 12-month growth rate for total loan 

and leases moderated compared to the previous quarter’s 4.5 percent 

increase. Credit card loans (up $118.4 billion, or 12.7 percent), one-tofour family residential loans (up $113.5 billion, or 4.7 percent), and 

nonfarm nonresidential commercial real estate loans (up $58.4 billion, 

or 3.3 percent) led the annual increase in loan balances.

TOTAL DEPOSITS DECLINED FOR A 

SIXTH CONSECUTIVE QUARTER

Total deposits of $18.6 trillion fell by $90.4 billion (0.5 percent) from 

the previous quarter, on par with the decline reported in the second 

quarter. This was the sixth consecutive quarter that the industry 

reported a lower level of total deposits. Deposits declined in both 

domestic offices (down $39.6 billion, or 0.2 percent) and in foreign 

offices (down $50.8 billion, or 3.5 percent). Interest-bearing deposits 

increased, while noninterest-bearing deposits fell. Estimated insured 

deposits (up $6.9 billion, or 0.1 percent) increased modestly during the 

quarter.
QUARTERLY 2023 VOLUME 17, NUMBER 4

6 

OVERALL ASSET QUALITY METRICS 

REMAINED FAVORABLE DESPITE 

MODEST DETERIORATION

The share of loans and leases 90 days or more past due or in nonaccrual 

status increased to 0.82 percent of total loans, up 7 basis points from 

the previous quarter. This ratio remains well below the industry’s 

1.28 percent pre-pandemic average noncurrent rate. Higher nonfarm, 

nonresidential commercial real estate loan balances drove the increase 

in the noncurrent rate.  

Net charge-offs as a ratio to total loans increased 2 basis points from 

the prior quarter and 25 basis points from a year ago to 0.51 percent. 

The industry’s net charge-off rate was 3 basis points above its 

pre-pandemic average. Higher credit card charge-off balances drove 

the annual increase.

CAPITAL RATIOS REMAINED STABLE Equity capital declined by $8.0 billion (0.4 percent) in third quarter 

2023, as a decline in accumulated other comprehensive income (down 

$35.3 billion) more than offset growth in retained earnings (up $22.5 

billion). 

The leverage capital ratio increased 16 basis points from a quarter ago 

to 9.26 percent, and the tier 1 risk-based capital ratio increased 18 basis 

points to 14.02 percent. The number of institutions with capital ratios 

that did not meet Prompt Corrective Action requirements for the wellcapitalized category declined by four from second quarter 2023 to five.5

5 Prompt Corrective Action categories are assigned based on reported capital ratios only and do not include the effects of regulatory downgrades. 
QUARTERLY 2023 VOLUME 17, NUMBER 4

7 

TWO NEW BANKS OPENED AND 

ONE BANK FAILED IN THIRD 

QUARTER 2023

The number of FDIC-insured institutions declined from 4,645 in 

the second quarter to 4,614 in the third quarter. Two banks opened, 

one bank failed, and 28 institutions merged during the quarter. The 

number of banks on the FDIC’s “Problem Bank List” increased by one 

from the previous quarter to 44.6 Total assets of problem institutions 

increased by $7.5 billion quarter over quarter to $53.5 billion.

Author:

Benjamin Tikvina

Senior Financial Analyst

Division of Insurance and Research

6 Banks on the FDIC’s Problem Bank List have a CAMELS composite rating of “4” or “5” due to financial, operational, or managerial weaknesses, or a combination of such 

issues. It is common for banks to move on or off this list each quarter.
QUARTERLY 2023 VOLUME 17, NUMBER 4

8 

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

2023** 2022** 2022 2021 2020 2019 2018

Return on assets (%) 1.25 1.10 1.11 1.23 0.72 1.29 1.35

Return on equity (%) 13.13 11.67 11.82 12.21 6.85 11.38 11.98

Core capital (leverage) ratio (%) 9.26 8.86 8.98 8.73 8.82 9.66 9.70

Noncurrent assets plus other real estate owned to assets (%) 0.45 0.38 0.39 0.44 0.61 0.55 0.60

Net charge-offs to loans (%) 0.47 0.24 0.27 0.25 0.50 0.52 0.48

Asset growth rate (%) -0.94 1.63 -0.51 8.46 17.29 3.92 3.03

Net interest margin (%) 3.31 2.83 2.95 2.54 2.82 3.36 3.40

Net operating income growth (%) 13.70 -7.55 -3.67 96.90 -38.77 -3.14 45.45

Number of institutions reporting 4,614 4,746 4,706 4,839 5,002 5,177 5,406

 Commercial banks 4,049 4,160 4,127 4,232 4,375 4,518 4,715

 Savings institutions 565 586 579 607 627 659 691

Percentage of unprofitable institutions (%) 4.77 3.94 3.55 3.10 4.70 3.73 3.46

Number of problem institutions 44 42 39 44 56 51 60

Assets of problem institutions (in billions)*** $54 $164 $47 $170 $56 $46 $48

Number of failed institutions 4 0 0 0 4 4 0

* Excludes insured branches of foreign banks (IBAs).

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

*** Assets shown are what were on record as of the last day of the quarter.
QUARTERLY 2023 VOLUME 17, NUMBER 4

9 

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

(dollar figures in millions)

Number of institutions reporting 

3rd Quarter

2023

2nd Quarter

2023

3rd Quarter

2022

%Change 

22Q3-23Q3

4,614 4,645 4,746 -2.8

Total employees (full-time equivalent) 2,098,463 2,115,571 2,115,041 -0.8

CONDITION DATA

Total assets $23,408,839 $23,465,010 $23,630,725 -0.9

 Loans secured by real estate 5,888,650 5,849,608 5,651,687 4.2

 1-4 Family residential mortgages 2,549,169 2,526,070 2,435,713 4.7

 Nonfarm nonresidential 1,804,750 1,796,878 1,746,340 3.3

 Construction and development 497,085 488,551 447,191 11.2

 Home equity lines 269,304 269,118 270,561 -0.5

 Commercial & industrial loans 2,487,175 2,517,261 2,502,920 -0.6

 Loans to individuals 2,096,282 2,072,143 2,001,115 4.8

 Credit cards 1,053,769 1,027,824 935,418 12.7

 Farm loans 79,503 75,726 74,556 6.6

 Other loans & leases 1,795,302 1,785,728 1,773,033 1.3

 Less: Unearned income 2,482 1,949 1,897 30.9

 Total loans & leases 12,344,430 12,298,517 12,001,414 2.9

Less: Reserve for losses* 213,124 209,043 185,554 14.9

Net loans and leases 12,131,306 12,089,474 11,815,860 2.7

Securities** 5,303,810 5,436,345 5,923,926 -10.5

Other real estate owned 2,891 2,841 2,731 5.9

Goodwill and other intangibles 436,192 435,980 425,506 2.5

 All other assets 5,534,640 5,500,370 5,462,702 1.3

Total liabilities and capital 23,408,839 23,465,010 23,630,725 -0.9

 Deposits 18,553,521 18,643,921 19,357,098 -4.2

 Domestic office deposits 17,158,289 17,197,921 17,891,441 -4.1

 Foreign office deposits 1,395,232 1,446,000 1,465,656 -4.8

 Other borrowed funds 1,745,006 1,738,648 1,254,368 39.1

 Subordinated debt 57,209 59,450 63,299 -9.6

 All other liabilities 807,880 769,782 791,408 2.1

 Total equity capital (includes minority interests) 2,245,224 2,253,210 2,164,552 3.7

 Bank equity capital 2,242,824 2,250,834 2,162,390 3.7

Loans and leases 30-89 days past due 66,830 62,245 61,308 9.0

Noncurrent loans and leases 101,516 92,988 86,358 17.6

Restructured loans and leases 29,185 21,019 43,434 -32.8

Mortgage-backed securities 2,870,131 2,962,311 3,201,025 -10.3

Earning assets 21,178,573 21,267,972 21,397,661 -1.0

FHLB Advances 602,617 658,626 444,788 35.5

Unused loan commitments 9,830,158 9,815,381 9,499,142 3.5

Trust assets 31,142,480 31,771,351 17,543,935 77.5

Assets securitized and sold 436,928 383,090 402,639 8.5

Notional amount of derivatives 207,440,885 224,647,718 198,385,321 4.6

INCOME DATA

First Three

Qtrs 2023

First Three 

Qtrs 2022 %Change

3rd Quarter

2023

3rd Quarter

2022

%Change 

22Q3-23Q3

Total interest income $840,939 $513,124 63.9 298,619 202,692 47.3

Total interest expense 316,766 56,316 462.5 123,391 34,072 262.2

 Net interest income 524,174 456,809 14.8 175,228 168,620 3.9

Provision for credit losses*** 61,686 30,940 99.4 19,513 14,655 33.2

Total noninterest income 237,938 230,105 3.4 74,104 76,792 -3.5

Total noninterest expense 423,135 406,488 4.1 140,916 138,845 1.5

Securities gains (losses) -7,664 -2,209 N/M -4,255 -1,318 N/M

Applicable income taxes 50,727 51,059 -0.7 16,216 18,856 -14.0

Extraordinary gains, net**** 53 -261 N/M 48 -11 N/M

 Total net income (includes minority interests) 218,952 195,957 11.7 68,481 71,728 -4.5

 Bank net income 218,636 195,774 11.7 68,393 71,663 -4.6

Net charge-offs 42,820 20,631 107.6 15,652 7,672 104.0

Cash dividends 141,004 95,542 47.6 45,878 37,874 21.1

Retained earnings 77,632 100,232 -22.6 22,515 33,789 -33.4

 Net operating income 225,135 198,006 13.7 71,816 72,799 -1.4

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

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

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

this item represents the provision for loan and lease losses.

**** See Notes to Users for explanation.

 N/M - Not Meaningful
QUARTERLY 2023 VOLUME 17, NUMBER 4

10 

TABLE III-A. Third Quarter 2023, All FDIC-Insured Institutions

THIRD QUARTER

(The way it is...)

All Insured 

Institutions

Asset Concentration Groups*

Credit 

Card

Banks

International

Banks

Agricultural

Banks

Commercial

Lenders

Mortgage

Lenders

Consumer

Lenders

Other

Specialized

<$1 Billion

All Other

<$1 Billion

All Other

>$1 Billion

Number of institutions reporting 4,614 10 5 1,020 2,523 318 39 233 399 67

 Commercial banks 4,049 9 5 1,009 2,287 93 29 212 347 58

 Savings institutions 565 1 0 11 236 225 10 21 52 9

Total assets (in billions) $23,408.8 $490.4 $5,797.7 $294.6 $8,367.8 $613.3 $389.7 $50.1 $92.3 $7,312.9

 Commercial banks 22,200.4 385.1 5,797.7 287.1 7,937.6 95.3 383.7 45.8 80.5 7,187.6

 Savings institutions 1,208.4 105.3 0.0 7.6 430.2 518.0 6.0 4.3 11.8 125.3

Total deposits (in billions) 18,553.5 374.3 4,355.9 248.5 6,750.5 497.9 317.4 42.1 79.5 5,887.5

 Commercial banks 17,580.4 294.7 4,355.9 244.5 6,412.6 73.8 312.2 39.3 69.8 5,777.7

 Savings institutions 973.2 79.6 0.0 4.0 337.9 424.1 5.2 2.9 9.7 109.8

Bank net income (in millions) 68,393 3,186 18,640 917 20,203 812 1,013 249 253 23,120

 Commercial banks 66,230 2,596 18,640 866 19,393 242 1,007 138 235 23,113

 Savings institutions 2,163 590 0 52 810 570 6 111 18 7

Performance Ratios (annualized, %)

Yield on earning assets 5.63 14.48 5.59 5.15 5.44 3.29 7.17 4.26 4.81 5.42

Cost of funding earning assets 2.33 3.74 2.68 1.74 2.11 1.74 3.56 1.16 1.33 2.23

 Net interest margin 3.30 10.74 2.91 3.40 3.33 1.55 3.61 3.11 3.48 3.19

Noninterest income to assets 1.26 6.25 1.66 0.64 0.85 0.77 0.96 4.52 0.99 1.16

Noninterest expense to assets 2.41 8.83 2.33 2.31 2.34 1.42 2.07 4.70 2.92 2.20

Credit loss provision to assets** 0.33 4.28 0.21 0.07 0.20 0.01 0.88 0.08 0.06 0.34

Net operating income to assets 1.23 2.64 1.32 1.27 1.08 0.65 1.05 2.05 1.12 1.27

Pretax return on assets 1.44 3.43 1.65 1.42 1.20 0.66 1.40 2.45 1.24 1.50

Return on assets 1.17 2.64 1.28 1.25 0.97 0.52 1.05 1.97 1.10 1.27

Return on equity 12.18 25.59 13.62 14.16 9.71 7.77 12.47 17.10 12.47 13.16

Net charge-offs to loans and leases 0.51 3.57 0.57 0.05 0.22 0.02 0.93 0.34 0.05 0.60

Loan and lease loss provision to net 

charge-offs 126.72 142.92 108.09 205.53 138.61 109.48 118.16 90.53 201.59 119.70

Efficiency ratio 55.80 52.97 54.51 60.15 59.42 62.74 47.46 63.31 68.44 53.38

% of unprofitable institutions 6.59 10.00 0.00 3.53 5.23 21.38 15.38 13.73 6.02 7.46

% of institutions with earnings gains 37.04 50.00 40.00 38.14 36.62 28.93 25.64 45.92 38.60 38.81

Structural Changes

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

 Institutions absorbed by mergers 28 0 0 6 20 0 0 0 2 0

 Failed institutions 1 0 0 1 0 0 0 0 0 0

PRIOR THIRD QUARTERS

(The way it was...)

Return on assets (%) 2022 1.21 3.43 1.05 1.37 1.24 0.98 1.31 2.14 1.12 1.16

2020 0.97 3.00 0.96 1.31 1.05 1.05 1.48 2.64 1.16 0.68

2018 1.41 3.09 1.21 1.42 1.31 1.22 1.38 3.82 1.22 1.48

Net charge-offs to loans & leases (%) 2022 0.26 2.13 0.31 0.04 0.10 0.01 0.41 0.08 0.03 0.22

2020 0.46 3.63 0.67 0.13 0.23 0.01 0.85 0.12 0.08 0.39

2018 0.45 3.70 0.44 0.13 0.17 0.01 0.69 0.23 0.14 0.37

* See Table IV-A for explanations.

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

ASU 2016-13, the numerator represents the provision for loan and lease losses.
QUARTERLY 2023 VOLUME 17, NUMBER 4

11 

TABLE III-A. Third Quarter 2023, All FDIC-Insured Institutions

THIRD QUARTER

(The way it is...)

All Insured

Institutions

Asset Size Distribution Geographic Regions*

Less

Than

$100 

Million

$100 

Million 

to $1 

Billion

$1 Billion

to $10 

Billion

$10 Billion 

to $250 

Billion

Greater

Than 

$250

Billion New York Atlanta Chicago

Kansas

City Dallas

San

Francisco

Number of institutions reporting 4,614 726 2,890 842 142 14 544 523 984 1,181 1,039 343

 Commercial banks 4,049 636 2,564 708 128 13 287 480 849 1,145 974 314

 Savings institutions 565 90 326 134 14 1 257 43 135 36 65 29

Total assets (in billions) $23,408.8 $44.3 $1,072.4 $2,334.9 $6,454.1 $13,503.1 $4,504.7 $4,777.8 $5,945.4 $4,152.3 $1,980.7 $2,048.0

 Commercial banks 22,200.4 39.3 941.0 2,000.7 6,018.2 13,201.3 4,135.5 4,763.6 5,869.4 4,094.3 1,454.2 1,883.4

 Savings institutions 1,208.4 5.1 131.4 334.2 435.9 301.8 369.2 14.2 76.0 58.0 526.5 164.6

Total deposits (in billions) 18,553.5 36.7 910.4 1,918.2 5,189.8 10,498.4 3,583.8 3,831.9 4,516.1 3,343.1 1,635.6 1,643.2

 Commercial banks 17,580.4 33.0 805.0 1,654.9 4,842.7 10,244.9 3,290.2 3,820.3 4,462.7 3,294.0 1,200.5 1,512.7

 Savings institutions 973.2 3.8 105.4 263.4 347.2 253.5 293.5 11.6 53.5 49.1 435.0 130.5

Bank net income (in millions) 68,393 106 3,150 6,466 16,351 42,320 11,009 14,801 19,992 12,608 4,850 5,133

 Commercial banks 66,230 100 2,848 5,908 15,263 42,111 10,469 14,776 19,740 12,511 4,360 4,375

 Savings institutions 2,163 6 301 558 1,089 209 541 25 252 97 490 758

Performance Ratios (annualized, %)

Yield on earning assets 5.63 5.12 5.16 5.54 6.18 5.42 5.84 5.42 5.32 5.72 4.94 6.99

Cost of funding earning assets 2.33 1.25 1.64 2.04 2.49 2.36 2.78 2.05 2.20 2.34 1.98 2.63

 Net interest margin 3.30 3.87 3.52 3.51 3.69 3.06 3.06 3.37 3.12 3.38 2.96 4.35

Noninterest income to assets 1.26 1.82 1.19 1.01 1.19 1.35 1.18 1.04 1.50 1.14 0.85 1.95

Noninterest expense to assets 2.41 4.10 2.97 2.60 2.57 2.25 2.31 2.24 2.38 2.35 2.22 3.37

Credit loss provision to assets** 0.33 0.13 0.10 0.24 0.54 0.27 0.34 0.39 0.17 0.31 0.18 0.84

Net operating income to assets 1.23 0.99 1.20 1.15 1.16 1.27 1.01 1.24 1.37 1.24 0.99 1.44

Pretax return on assets 1.44 1.13 1.38 1.39 1.29 1.53 1.24 1.44 1.70 1.51 1.18 1.28

Return on assets 1.17 0.96 1.18 1.11 1.01 1.25 0.98 1.24 1.34 1.21 0.97 1.01

Return on equity 12.18 7.48 12.52 11.42 10.47 13.13 9.71 12.63 14.23 12.74 11.50 10.40

Net charge-offs to loans and leases 0.51 0.19 0.09 0.25 0.60 0.56 0.48 0.62 0.33 0.50 0.26 0.93

Loan and lease loss provision to net 

charge-offs 126.72 129.95 170.01 133.22 141.01 114.25 137.51 123.47 110.04 125.74 133.49 132.81

Efficiency ratio 55.80 75.71 66.01 60.21 55.39 54.25 56.90 54.48 54.79 55.70 61.22 55.38

% of unprofitable institutions 6.59 12.53 5.92 4.28 4.23 0.00 12.13 8.22 6.00 4.23 5.58 8.16

% of institutions with earnings gains 37.04 46.42 36.54 31.35 31.69 50.00 29.78 44.17 35.37 33.02 43.41 37.03

Structural Changes

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

 Institutions absorbed by mergers 28 9 14 5 0 0 4 5 7 7 5 0

 Failed institutions 1 0 1 0 0 0 0 0 0 1 0 0

PRIOR THIRD QUARTERS

(The way it was...)

Return on assets (%) 2022 1.21 0.99 1.31 1.37 1.41 1.07 1.15 1.24 1.19 1.01 1.23 1.63

 2020 0.97 0.90 1.26 1.19 1.16 0.80 0.89 0.86 1.15 0.64 1.16 1.35

 2018 1.41 1.09 1.28 1.42 1.50 1.36 1.28 1.48 1.29 1.37 1.49 1.74

Net charge-offs to loans and 

leases (%) 2022 0.26 0.04 0.05 0.16 0.33 0.26 0.26 0.30 0.17 0.26 0.10 0.42

 2020 0.46 0.10 0.11 0.18 0.61 0.49 0.43 0.49 0.39 0.51 0.22 0.68

 2018 0.45 0.19 0.13 0.19 0.65 0.41 0.55 0.53 0.19 0.48 0.24 0.68

* See Table IV-A for explanations.

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

2016-13, the numerator represents the provision for loan and lease losses.
QUARTERLY 2023 VOLUME 17, NUMBER 4

12 

TABLE IV-A. First Three Quarters 2023, All FDIC-Insured Institutions

FIRST THREE QUARTERS

(The way it is...)

All Insured

Institutions

Asset Concentration Groups*

Credit 

Card

Banks

International

Banks

Agricultural

Banks

Commercial

Lenders

Mortgage

Lenders

Consumer

Lenders

Other

Specialized

<$1 Billion

All Other

<$1 Billion

All Other

>$1 Billion

Number of institutions reporting 4,614 10 5 1,020 2,523 318 39 233 399 67

 Commercial banks 4,049 9 5 1,009 2,287 93 29 212 347 58

 Savings institutions 565 1 0 11 236 225 10 21 52 9

Total assets (in billions) $23,408.8 $490.4 $5,797.7 $294.6 $8,367.8 $613.3 $389.7 $50.1 $92.3 $7,312.9

 Commercial banks 22,200.4 385.1 5,797.7 287.1 7,937.6 95.3 383.7 45.8 80.5 7,187.6

 Savings institutions 1,208.4 105.3 0.0 7.6 430.2 518.0 6.0 4.3 11.8 125.3

Total deposits (in billions) 18,553.5 374.3 4,355.9 248.5 6,750.5 497.9 317.4 42.1 79.5 5,887.5

 Commercial banks 17,580.4 294.7 4,355.9 244.5 6,412.6 73.8 312.2 39.3 69.8 5,777.7

 Savings institutions 973.2 79.6 0.0 4.0 337.9 424.1 5.2 2.9 9.7 109.8

Bank net income (in millions) 218,636 9,793 55,853 2,692 74,983 3,044 3,713 449 747 67,361

 Commercial banks 211,357 8,137 55,853 2,565 72,287 758 3,696 48 686 67,327

 Savings institutions 7,278 1,656 0 127 2,696 2,285 17 401 62 34

Performance Ratios (annualized, %)

Yield on earning assets 5.31 13.92 5.22 4.84 5.19 3.16 6.84 4.14 4.55 5.09

Cost of funding earning assets 2.00 3.42 2.35 1.42 1.79 1.50 3.18 1.09 1.08 1.90

 Net interest margin 3.31 10.51 2.87 3.42 3.40 1.65 3.66 3.04 3.47 3.19

Noninterest income to assets 1.36 6.36 1.75 0.57 1.04 0.72 1.06 4.68 0.92 1.18

Noninterest expense to assets 2.42 9.03 2.32 2.30 2.37 1.42 2.08 4.78 2.85 2.22

Credit loss provision to assets** 0.35 3.78 0.27 0.07 0.23 0.01 0.74 0.21 0.07 0.36

Net operating income to assets 1.29 2.78 1.33 1.25 1.26 0.67 1.29 1.79 1.10 1.24

Pretax return on assets 1.54 3.61 1.65 1.39 1.46 0.81 1.68 1.78 1.23 1.47

Return on assets 1.25 2.77 1.28 1.23 1.21 0.63 1.29 1.11 1.08 1.23

Return on equity 13.13 26.54 13.74 13.94 12.21 10.50 15.63 10.21 12.34 12.82

Net charge-offs to loans and leases 0.47 3.42 0.54 0.05 0.19 0.02 0.87 0.87 0.08 0.57

Loan and lease loss provision to net 

charge-offs 143.80 132.18 146.71 185.26 180.86 149.38 112.64 100.17 149.79 134.65

Efficiency ratio 54.75 54.50 53.68 60.51 55.93 61.64 46.17 63.57 68.12 53.99

% of unprofitable institutions 4.77 0.00 0.00 2.06 3.65 16.35 17.95 10.73 4.76 5.97

% of institutions with earnings gains 53.12 60.00 40.00 58.92 51.92 39.62 38.46 64.81 53.13 41.79

Condition Ratios (%)

Earning assets to total assets 90.47 95.58 88.41 93.48 90.80 95.69 94.05 91.05 93.44 90.60

Loss Allowance to:

 Loans and leases 1.73 7.04 1.86 1.31 1.30 0.63 2.07 1.64 1.24 1.78

 Noncurrent loans and leases 209.94 471.03 256.03 244.62 181.66 156.90 322.49 212.26 203.28 172.36

Noncurrent assets plus other real estate 

owned to assets 0.45 1.25 0.27 0.38 0.50 0.15 0.49 0.23 0.37 0.51

Equity capital ratio 9.58 10.25 9.46 8.68 9.91 6.81 8.34 11.04 8.64 9.60

Core capital (leverage) ratio 9.26 10.92 8.52 10.86 9.72 10.31 9.82 15.64 11.57 8.94

Common equity tier 1 capital ratio*** 13.96 12.56 16.07 13.73 12.25 27.52 14.36 36.02 17.81 14.21

Tier 1 risk-based capital ratio*** 14.02 12.71 16.14 13.73 12.30 27.52 14.38 36.02 17.81 14.26

Total risk-based capital ratio*** 15.36 14.65 17.31 14.82 13.61 27.96 15.40 36.90 18.84 15.77

Net loans and leases to deposits 65.39 101.70 46.46 77.03 82.01 42.21 91.34 30.72 64.97 58.34

Net loans and leases to total assets 51.82 77.62 34.91 64.97 66.16 34.27 74.39 25.84 55.96 46.97

Domestic deposits to total assets 73.30 76.32 54.02 84.35 80.58 80.98 81.44 84.12 86.11 78.29

Structural Changes

 New reporters 5 0 0 0 0 0 0 5 0 0

 Institutions absorbed by mergers 84 0 0 17 61 0 0 1 4 1

 Failed institutions 4 0 0 1 1 0 0 0 0 2

PRIOR FIRST THREE QUARTERS

(The way it was...)

Number of institutions 2022 4,746 11 5 1,064 2,468 306 41 314 460 77

 2020 5,033 11 5 1,182 2,768 303 36 230 430 68

 2018 5,477 12 5 1,366 2,878 408 70 233 453 52

Total assets (in billions) 2022 $23,630.7 $552.2 $5,827.1 $297.2 $7,548.8 $758.3 $576.8 $70.5 $110.1 $7,889.8

 2020 21,209.4 508.6 5,277.4 281.0 7,505.7 635.9 132.0 40.1 86.8 6,742.0

 2018 17,672.8 640.0 4,245.9 285.2 6,232.8 352.0 212.8 36.0 78.0 5,590.2

Return on assets (%) 2022 1.10 4.00 0.93 1.23 1.14 0.88 1.43 1.69 1.00 1.01

 2020 0.58 1.07 0.57 1.34 0.60 1.07 1.36 2.67 1.10 0.42

 2018 1.35 2.83 1.22 1.35 1.27 1.12 1.46 3.82 1.16 1.39

Net charge-offs to loans & leases (%) 2022 0.24 2.06 0.30 0.03 0.09 0.01 0.32 0.10 0.02 0.20

 2020 0.53 4.06 0.74 0.14 0.25 0.02 0.56 0.24 0.07 0.46

 2018 0.48 3.90 0.50 0.13 0.17 0.01 0.74 0.15 0.13 0.38

Noncurrent assets plus OREO 

to assets (%) 2022 0.38 0.99 0.24 0.38 0.46 0.28 0.33 0.20 0.35 0.38

 2020 0.63 0.84 0.39 0.83 0.73 0.24 0.33 0.42 0.62 0.70

 2018 0.62 1.13 0.39 0.89 0.65 1.39 0.49 0.46 0.77 0.65

Equity capital ratio (%) 2022 9.15 11.55 8.97 8.34 9.51 5.80 8.23 9.48 8.42 9.20

 2020 10.29 11.51 9.13 11.55 11.25 8.63 9.31 17.08 12.22 10.10

 2018 11.28 15.27 9.98 11.32 11.96 10.99 10.67 16.87 12.05 11.06

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

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

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

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

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

properties exceed 25 percent of total assets.

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

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

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

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

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

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

the numerator represents the provision for loan and lease losses.

*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.
QUARTERLY 2023 VOLUME 17, NUMBER 4

13 

TABLE IV-A. First Three Quarters 2023, All FDIC-Insured Institutions

FIRST THREE QUARTERS

(The way it is...)

All Insured

Institutions

Asset Size Distribution Geographic Regions*

Less Than 

$100

Million

$100 

Million to 

$1 Billion

$1 Billion

to $10 

Billion

$10 Billion

to $250 

Billion

Greater

Than $250

Billion New York Atlanta Chicago

Kansas

City Dallas

San

Francisco

Number of institutions reporting 4,614 726 2,890 842 142 14 544 523 984 1,181 1,039 343

 Commercial banks 4,049 636 2,564 708 128 13 287 480 849 1,145 974 314

 Savings institutions 565 90 326 134 14 1 257 43 135 36 65 29

Total assets (in billions) $23,408.8 $44.3 $1,072.4 $2,334.9 $6,454.1 $13,503.1 $4,504.7 $4,777.8 $5,945.4 $4,152.3 $1,980.7 $2,048.0

 Commercial banks 22,200.4 39.3 941.0 2,000.7 6,018.2 13,201.3 4,135.5 4,763.6 5,869.4 4,094.3 1,454.2 1,883.4

 Savings institutions 1,208.4 5.1 131.4 334.2 435.9 301.8 369.2 14.2 76.0 58.0 526.5 164.6

Total deposits (in billions) 18,553.5 36.7 910.4 1,918.2 5,189.8 10,498.4 3,583.8 3,831.9 4,516.1 3,343.1 1,635.6 1,643.2

 Commercial banks 17,580.4 33.0 805.0 1,654.9 4,842.7 10,244.9 3,290.2 3,820.3 4,462.7 3,294.0 1,200.5 1,512.7

 Savings institutions 973.2 3.8 105.4 263.4 347.2 253.5 293.5 11.6 53.5 49.1 435.0 130.5

Bank net income (in millions) 218,636 334 9,047 20,448 65,780 123,026 36,344 52,902 58,506 36,720 15,126 19,037

 Commercial banks 211,357 307 7,983 18,582 62,352 122,132 34,406 52,825 57,655 36,171 13,431 16,868

 Savings institutions 7,278 27 1,064 1,865 3,428 894 1,938 77 850 548 1,695 2,169

Performance Ratios (annualized, %)

Yield on earning assets 5.31 4.75 4.90 5.29 5.83 5.09 5.50 5.11 5.01 5.39 4.68 6.62

Cost of funding earning assets 2.00 0.99 1.35 1.72 2.14 2.04 2.41 1.73 1.89 2.04 1.65 2.32

 Net interest margin 3.31 3.76 3.55 3.58 3.69 3.05 3.09 3.38 3.12 3.36 3.03 4.30

Noninterest income to assets 1.36 1.68 1.13 1.01 1.50 1.37 1.21 1.35 1.59 1.14 0.80 2.08

Noninterest expense to assets 2.42 3.88 2.96 2.61 2.62 2.25 2.28 2.27 2.38 2.37 2.23 3.50

Credit loss provision to assets** 0.35 0.09 0.10 0.22 0.51 0.32 0.32 0.42 0.27 0.33 0.14 0.77

Net operating income to assets 1.29 1.02 1.19 1.21 1.43 1.24 1.11 1.49 1.38 1.18 1.02 1.42

Pretax return on assets 1.54 1.18 1.34 1.48 1.70 1.49 1.36 1.69 1.68 1.47 1.22 1.65

Return on assets 1.25 1.01 1.13 1.19 1.37 1.21 1.08 1.48 1.33 1.17 1.01 1.25

Return on equity 13.13 7.90 12.10 12.19 14.21 12.87 10.79 15.18 14.11 12.39 12.27 13.07

Net charge-offs to loans and leases 0.47 0.09 0.08 0.22 0.53 0.54 0.44 0.58 0.33 0.44 0.18 0.89

Loan and lease loss provision to net 

charge-offs 143.80 172.68 171.76 138.15 147.06 141.65 135.79 139.30 171.88 148.85 156.44 129.23

Efficiency ratio 54.75 74.96 66.26 59.62 52.25 54.22 56.11 51.09 53.77 56.31 61.33 54.93

% of unprofitable institutions 4.77 10.33 4.08 2.38 4.93 0.00 7.54 6.31 5.28 2.62 3.46 7.87

% of institutions with earnings gains 53.12 64.19 53.60 43.11 46.48 50.00 44.85 61.38 51.22 50.80 57.65 53.35

Condition Ratios (%)

Earning assets to total assets 90.47 92.63 93.55 92.84 91.84 89.16 89.85 90.08 89.41 90.38 92.61 93.96

Loss Allowance to:

 Loans and leases 1.73 1.41 1.28 1.34 1.83 1.82 1.70 1.72 1.56 1.82 1.28 2.35

 Noncurrent loans and leases 209.94 167.80 241.89 212.76 224.26 198.29 173.24 220.06 219.91 199.34 155.04 329.49

Noncurrent assets plus other real 

estate owned to assets 0.45 0.51 0.39 0.47 0.54 0.41 0.54 0.42 0.36 0.47 0.48 0.49

Equity capital ratio 9.58 12.76 9.29 9.67 9.66 9.54 10.08 9.76 9.43 9.51 8.46 9.72

Core capital (leverage) ratio 9.26 14.84 11.34 10.57 9.60 8.68 9.57 8.79 8.94 9.07 10.03 10.22

Common equity tier 1 capital ratio*** 13.96 23.61 15.48 13.49 13.27 14.34 13.99 13.08 14.61 13.34 15.08 14.45

Tier 1 risk-based capital ratio*** 14.02 23.62 15.51 13.52 13.38 14.37 14.02 13.13 14.66 13.42 15.18 14.50

Total risk-based capital ratio*** 15.36 24.66 16.62 14.59 14.74 15.77 15.27 14.37 16.07 15.00 16.31 15.78

Net loans and leases to deposits 65.39 66.46 76.64 84.02 78.21 54.66 66.48 64.45 63.04 60.73 65.50 80.96

Net loans and leases to total assets 51.82 55.07 65.06 69.02 62.89 42.50 52.89 51.69 47.89 48.90 54.09 64.95

Domestic deposits to total assets 73.30 82.87 84.89 82.07 79.14 68.04 75.85 77.75 67.28 66.36 82.56 79.91

Structural Changes

 New reporters 5 5 0 0 0 0 1 0 2 0 0 2

 Institutions absorbed by mergers 84 24 40 17 3 0 8 13 26 18 17 2

 Failed institutions 4 0 1 0 3 0 1 0 0 1 0 2

PRIOR FIRST THREE QUARTERS 

(The way it was...)

Number of institutions 2022 4,746 778 2,981 829 145 13 561 540 1,019 1,212 1,061 353

 2020 5,033 981 3,135 766 138 13 598 572 1,079 1,300 1,112 372

 2018 5,477 1,335 3,369 635 129 9 671 633 1,180 1,397 1,193 403

Total assets (in billions) 2022 $23,630.7 $47.3 $1,095.3 $2,251.4 $7,109.1 $13,127.7 $4,530.0 $4,653.1 $5,690.9 $4,171.7 $1,969.8 $2,615.4

 2020 21,209.4 59.0 1,089.7 2,019.2 6,198.1 11,843.4 3,887.9 4,349.6 5,004.1 4,081.7 1,719.5 2,166.6

 2018 17,672.8 79.2 1,107.7 1,694.4 6,036.1 8,755.5 3,275.4 3,654.9 3,996.3 3,641.5 1,119.5 1,985.3

Return on assets (%) 2022 1.10 0.88 1.15 1.27 1.34 0.95 1.00 1.12 1.04 0.98 1.10 1.59

 2020 0.58 0.91 1.21 1.04 0.49 0.49 0.53 0.42 0.73 0.35 0.95 0.80

 2018 1.35 1.05 1.25 1.32 1.45 1.31 1.21 1.43 1.29 1.27 1.42 1.71

Net charge-offs to loans & leases (%) 2022 0.24 0.04 0.04 0.13 0.31 0.24 0.23 0.30 0.16 0.24 0.08 0.38

 2020 0.53 0.14 0.11 0.21 0.70 0.54 0.49 0.58 0.43 0.56 0.32 0.74

 2018 0.48 0.17 0.11 0.21 0.69 0.43 0.59 0.54 0.23 0.50 0.22 0.71

Noncurrent assets plus OREO 

to assets (%) 2022 0.38 0.53 0.35 0.41 0.47 0.33 0.42 0.38 0.33 0.41 0.43 0.35

 2020 0.63 0.86 0.65 0.67 0.81 0.52 0.58 0.52 0.55 0.77 1.04 0.51

 2018 0.62 1.01 0.77 0.68 0.63 0.58 0.61 0.66 0.56 0.71 0.76 0.45

Equity capital ratio (%) 2022 9.15 11.90 8.93 9.40 9.46 8.95 9.63 9.70 8.79 9.17 7.73 9.16

 2020 10.29 13.59 11.32 10.97 10.91 9.75 10.71 10.87 9.78 9.78 10.32 10.52

 2018 11.28 13.48 11.41 11.85 12.21 10.50 12.67 11.95 10.38 10.21 11.68 11.31

* Regions:

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

Vermont, U.S. Virgin Islands

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

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

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

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

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

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

2016-13, the numerator represents the provision for loan and lease losses.

*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.
QUARTERLY 2023 VOLUME 17, NUMBER 4

14 

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

September 30, 2023 All Insured 

Institutions

Asset Concentration Groups*

Credit 

Card

Banks

International

Banks

Agricultural

Banks

Commercial

Lenders

Mortgage

Lenders

Consumer

Lenders

Other

Specialized

<$1 Billion

All Other

<$1 Billion

All Other

>$1 

Billion

Percent of Loans 30-89 Days Past Due

All loans secured by real estate 0.40 0.39 0.29 0.39 0.40 0.29 0.19 0.89 0.71 0.49

 Construction and development 0.41 0.22 0.53 0.53 0.36 0.43 0.07 0.77 0.59 0.70

 Nonfarm nonresidential 0.21 0.39 0.51 0.28 0.20 0.16 0.31 0.71 0.45 0.21

 Multifamily residential real estate 0.11 0.00 0.11 0.15 0.11 0.09 0.04 1.10 0.20 0.09

 Home equity loans 0.57 0.00 0.77 0.47 0.59 0.30 0.77 0.81 0.65 0.49

 Other 1-4 family residential 0.60 0.40 0.28 0.67 0.76 0.31 0.16 1.13 0.89 0.62

Commercial and industrial loans 0.28 0.76 0.37 0.66 0.25 0.31 0.47 0.40 0.77 0.23

Loans to individuals 1.56 1.69 1.09 0.96 1.17 0.37 2.37 1.46 2.06 1.78

 Credit card loans 1.56 1.72 1.16 1.36 1.69 1.48 2.90 0.69 9.41 1.76

 Other loans to individuals 1.55 1.40 0.87 0.92 1.13 0.34 2.36 1.49 1.67 1.81

All other loans and leases (including farm) 0.19 0.71 0.25 0.32 0.21 0.10 0.04 0.32 0.55 0.11

Total loans and leases 0.54 1.57 0.46 0.43 0.40 0.29 1.53 0.85 0.82 0.63

Percent of Loans Noncurrent**

All real estate loans 1.00 0.75 0.98 0.52 0.78 0.43 0.18 0.80 0.56 1.82

 Construction and development 0.49 0.00 1.41 0.40 0.37 0.51 0.36 0.61 0.36 0.96

 Nonfarm nonresidential 1.04 2.59 1.52 0.54 0.69 0.43 0.17 0.86 0.67 2.90

 Multifamily residential real estate 0.29 0.95 0.18 0.50 0.25 0.24 0.00 0.00 0.07 0.67

 Home equity loans 1.70 0.00 5.47 0.21 1.05 0.39 0.80 0.47 0.31 2.56

 Other 1-4 family residential 1.18 0.58 0.91 0.45 1.20 0.44 0.18 0.79 0.58 1.56

Commercial and industrial loans 0.68 0.70 0.76 0.81 0.76 0.46 0.84 0.83 0.73 0.51

Loans to individuals 1.01 1.61 0.91 0.35 0.54 0.13 0.81 0.63 0.57 1.08

 Credit card loans 1.53 1.71 1.12 0.40 1.50 1.12 3.37 0.15 2.82 1.73

 Other loans to individuals 0.48 0.51 0.21 0.35 0.48 0.11 0.77 0.65 0.45 0.43

All other loans and leases (including farm) 0.24 0.63 0.26 0.46 0.24 0.02 0.03 0.52 1.16 0.21

Total loans and leases 0.82 1.50 0.73 0.54 0.71 0.40 0.64 0.77 0.61 1.03

Percent of Loans Charged-Off (net, YTD)

All real estate loans 0.05 0.01 0.01 0.01 0.04 0.00 0.00 0.18 0.01 0.12

 Construction and development 0.02 0.00 0.00 0.00 0.03 0.01 0.10 -0.01 -0.02 0.01

 Nonfarm nonresidential 0.17 0.00 0.27 0.02 0.10 0.01 0.04 0.37 0.00 0.51

 Multifamily residential real estate 0.02 0.00 0.00 -0.01 0.02 0.00 0.00 0.39 0.00 0.07

 Home equity loans -0.07 0.00 -0.28 0.01 -0.03 -0.06 -0.46 0.35 0.00 -0.11

 Other 1-4 family residential 0.00 0.01 -0.01 0.00 0.00 0.00 -0.01 0.13 0.02 0.02

Commercial and industrial loans 0.32 2.22 0.28 0.18 0.34 0.04 0.51 3.89 0.16 0.21

Loans to individuals 2.13 3.62 2.15 0.45 1.13 0.30 1.34 2.10 0.30 2.17

 Credit card loans 3.37 3.75 2.66 1.79 4.29 2.76 7.70 1.06 0.13 3.58

 Other loans to individuals 0.92 2.14 0.51 0.30 0.91 0.24 1.25 2.15 0.30 0.84

All other loans and leases (including farm) 0.11 2.81 0.09 0.05 0.11 0.05 0.04 1.25 0.54 0.12

Total loans and leases 0.47 3.42 0.54 0.05 0.19 0.02 0.87 0.87 0.08 0.57

Loans Outstanding (in billions)

All real estate loans $5,888.7 $6.0 $696.4 $125.0 $3,515.4 $185.6 $62.2 $9.7 $40.2 $1,248.2

 Construction and development 497.1 0.1 22.4 9.3 394.5 4.7 0.6 1.0 3.0 61.5

 Nonfarm nonresidential 1,804.8 0.5 72.7 32.6 1,398.4 13.5 8.8 3.3 8.6 266.3

 Multifamily residential real estate 605.8 0.0 114.0 4.9 404.7 3.7 1.1 0.3 1.3 75.9

 Home equity loans 269.3 0.0 20.5 2.0 173.9 8.7 0.6 0.3 1.3 62.0

 Other 1-4 family residential 2,549.2 5.3 433.0 29.4 1,082.4 154.1 51.1 4.2 22.6 767.0

Commercial and industrial loans 2,487.2 43.4 361.0 23.3 1,236.4 6.0 39.4 1.6 4.4 771.6

Loans to individuals 2,096.3 358.6 427.7 6.8 366.1 14.5 178.2 1.2 4.6 738.6

 Credit card loans 1,053.8 328.7 328.7 0.7 24.1 0.3 2.6 0.0 0.2 368.4

 Other loans to individuals 1,042.5 29.9 99.0 6.1 342.0 14.1 175.7 1.1 4.4 370.2

All other loans and leases (including farm) 1,874.8 1.5 577.3 38.9 492.8 5.6 16.2 0.7 3.1 738.8

Total loans and leases (plus unearned income) 12,346.9 409.5 2,062.5 194.0 5,610.6 211.7 296.0 13.2 52.3 3,497.1

Memo: Other Real Estate Owned 

(in millions)

All other real estate owned 2,891.0 1.0 318.3 71.1 1,684.9 39.0 11.9 12.6 24.8 727.4

 Construction and development 424.6 0.0 14.0 5.2 360.3 12.2 0.9 5.4 9.4 17.2

 Nonfarm nonresidential 1,619.5 0.9 160.0 33.4 919.8 9.4 9.0 5.2 7.3 474.5

 Multifamily residential real estate 39.3 0.0 0.0 1.3 37.8 0.0 0.0 0.0 0.2 0.0

 1-4 family residential 747.2 0.1 140.3 9.2 333.0 17.4 2.0 1.9 7.8 235.6

 Farmland 55.1 0.0 0.0 22.0 32.8 0.0 0.0 0.1 0.3 0.0

* See Table IV-A for explanations.

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.
QUARTERLY 2023 VOLUME 17, NUMBER 4

15 

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

September 30, 2023 All Insured

Institutions

Asset Size Distribution Geographic Regions*

Less Than

$100 

Million

$100 

Million to

$1 Billion

$1 Billion

to

$10 Billion

$10 Billion

to $250 

Billion

Greater

Than $250

Billion New York Atlanta Chicago

Kansas

City Dallas

San

Francisco

Percent of Loans 30-89 Days 

Past Due 

All loans secured by real estate 0.40 0.92 0.41 0.24 0.47 0.42 0.40 0.41 0.34 0.43 0.61 0.25

 Construction and development 0.41 0.50 0.47 0.36 0.36 0.57 0.51 0.33 0.36 0.62 0.34 0.34

 Nonfarm nonresidential 0.21 0.74 0.29 0.17 0.20 0.25 0.28 0.21 0.26 0.19 0.17 0.13

 Multifamily residential real estate 0.11 0.14 0.29 0.10 0.09 0.10 0.14 0.05 0.11 0.10 0.16 0.04

 Home equity loans 0.57 0.46 0.46 0.46 0.62 0.58 0.54 0.49 0.71 0.60 0.61 0.39

 Other 1-4 family residential 0.60 1.29 0.54 0.34 0.85 0.51 0.56 0.61 0.39 0.61 1.39 0.42

Commercial and industrial loans 0.28 0.92 0.55 0.40 0.28 0.24 0.17 0.27 0.30 0.27 0.33 0.48

Loans to individuals 1.56 1.70 1.20 1.76 1.50 1.59 1.39 2.13 0.93 1.45 0.91 1.91

 Credit card loans 1.56 3.97 4.18 3.73 1.60 1.48 1.85 1.91 1.06 1.34 0.73 1.71

 Other loans to individuals 1.55 1.69 1.11 1.34 1.42 1.73 1.01 2.34 0.81 1.71 0.96 2.09

All other loans and leases (including farm) 0.19 0.45 0.26 0.34 0.22 0.16 0.08 0.12 0.26 0.23 0.15 0.24

Total loans and leases 0.54 0.91 0.45 0.36 0.60 0.56 0.48 0.66 0.40 0.51 0.55 0.77

Percent of Loans Noncurrent** 

All real estate loans 1.00 0.80 0.49 0.49 0.92 1.52 1.11 1.02 0.91 1.40 0.92 0.45

 Construction and development 0.49 0.49 0.37 0.42 0.33 1.01 0.99 0.32 0.65 0.33 0.19 0.54

 Nonfarm nonresidential 1.04 0.89 0.52 0.49 0.79 2.54 1.41 1.19 0.76 2.04 0.44 0.37

 Multifamily residential real estate 0.29 0.55 0.21 0.26 0.28 0.34 0.42 0.46 0.17 0.37 0.19 0.15

 Home equity loans 1.70 0.58 0.53 0.44 1.08 2.86 1.48 1.28 2.13 3.69 0.73 0.58

 Other 1-4 family residential 1.18 0.88 0.49 0.60 1.38 1.33 1.11 1.05 1.09 1.36 2.04 0.59

Commercial and industrial loans 0.68 1.24 0.82 1.10 0.75 0.56 0.95 0.52 0.71 0.51 0.71 0.91

Loans to individuals 1.01 0.72 0.43 1.14 1.00 1.02 1.10 1.17 0.60 1.05 0.68 1.18

 Credit card loans 1.53 1.76 1.89 3.88 1.60 1.44 1.83 1.86 0.99 1.32 1.12 1.70

 Other loans to individuals 0.48 0.71 0.39 0.56 0.51 0.44 0.51 0.49 0.22 0.44 0.55 0.69

All other loans and leases (including farm) 0.24 0.71 0.60 0.56 0.16 0.24 0.38 0.11 0.30 0.16 0.34 0.22

Total loans and leases 0.82 0.84 0.53 0.63 0.82 0.92 0.98 0.78 0.71 0.91 0.83 0.71

Percent of Loans Charged-Off

(net, YTD) 

All real estate loans 0.05 0.00 0.01 0.02 0.06 0.09 0.06 0.10 0.05 0.03 0.02 0.05

 Construction and development 0.02 -0.01 0.00 0.00 0.06 0.01 0.04 -0.01 0.01 0.00 0.00 0.14

 Nonfarm nonresidential 0.17 -0.01 0.02 0.03 0.15 0.46 0.19 0.32 0.17 0.12 0.05 0.09

 Multifamily residential real estate 0.02 0.00 0.00 0.01 0.03 0.03 0.02 0.01 0.06 0.00 0.01 0.00

 Home equity loans -0.07 0.02 0.01 0.00 -0.02 -0.14 -0.03 -0.12 -0.09 -0.08 -0.03 0.02

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

Commercial and industrial loans 0.32 0.46 0.30 0.31 0.47 0.24 0.21 0.33 0.32 0.16 0.38 0.85

Loans to individuals 2.13 0.47 0.80 2.67 2.08 2.15 2.21 2.24 1.46 2.54 1.03 2.53

 Credit card loans 3.37 13.50 4.17 9.01 3.50 3.15 3.96 3.59 2.43 3.18 2.12 3.85

 Other loans to individuals 0.92 0.38 0.69 1.31 0.94 0.86 0.84 0.98 0.57 1.12 0.72 1.29

All other loans and leases (including farm) 0.11 0.01 0.15 0.14 0.09 0.12 0.08 0.17 0.09 0.09 0.25 0.06

Total loans and leases 0.47 0.09 0.08 0.22 0.53 0.54 0.44 0.58 0.33 0.44 0.18 0.89

Loans Outstanding (in billions) 

All real estate loans $5,888.7 $17.0 $555.0 $1,215.3 $2,057.4 $2,044.0 $1,266.9 $1,004.0 $1,335.2 $914.5 $738.1 $630.0

 Construction and development 497.1 1.1 57.1 135.2 206.4 97.2 89.6 77.3 85.2 72.2 122.6 50.2

 Nonfarm nonresidential 1,804.8 3.5 201.4 507.4 716.2 376.2 407.1 334.1 300.7 225.0 294.0 243.9

 Multifamily residential real estate 605.8 0.4 32.9 139.2 240.1 193.3 193.1 54.6 177.4 61.4 38.2 81.1

 Home equity loans 269.3 0.3 16.2 39.8 99.7 113.4 73.2 57.3 68.0 28.0 21.5 21.3

 Other 1-4 family residential 2,549.2 8.3 194.7 353.8 777.6 1,214.8 498.3 465.8 677.5 446.1 237.6 223.8

Commercial and industrial loans 2,487.2 3.0 83.5 249.9 811.2 1,339.7 422.6 633.5 600.1 434.6 196.2 200.2

Loans to individuals 2,096.3 1.7 27.6 95.7 804.6 1,166.7 396.3 483.4 422.8 309.4 81.5 402.8

 Credit card loans 1,053.8 0.0 0.8 16.7 363.1 673.1 177.4 239.9 204.8 216.9 18.1 196.7

 Other loans to individuals 1,042.5 1.7 26.8 78.9 441.6 493.6 218.9 243.5 218.0 92.6 63.4 206.1

All other loans and leases (including farm) 1,874.8 3.2 41.0 73.3 462.7 1,294.5 338.3 392.1 534.3 409.9 69.9 130.3

Total loans and leases (plus unearned income) 12,346.9 24.8 707.1 1,634.2 4,135.9 5,844.9 2,424.2 2,513.0 2,892.4 2,068.4 1,085.7 1,363.2

Memo: Other Real Estate Owned 

(in millions) 

All other real estate owned 2,891.0 17.3 360.6 666.6 730.5 1,116.0 420.8 637.3 576.2 580.4 497.7 178.5

 Construction and development 424.6 4.0 116.5 182.2 99.6 22.3 57.0 51.3 30.2 86.9 158.6 40.7

 Nonfarm nonresidential 1,619.5 7.1 159.1 371.1 314.6 767.6 146.6 452.5 297.5 413.3 247.7 61.9

 Multifamily residential real estate 39.3 0.3 10.9 7.7 17.6 2.8 8.6 1.0 9.0 6.7 13.9 0.1

 1-4 family residential 747.2 5.8 56.6 84.3 284.7 315.8 208.6 130.6 232.1 58.9 59.0 58.0

 Farmland 55.1 0.1 17.5 20.0 14.0 3.5 0.0 1.3 6.8 10.6 18.5 17.9

* See Table IV-A for explanations.

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.
QUARTERLY 2023 VOLUME 17, NUMBER 4

16 

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

(dollar figures in millions;

notional amounts unless otherwise indicated)

3rd 

Quarter

2023

2nd 

Quarter

2023

1st

 Quarter

2023

4th 

Quarter

2022

3rd 

Quarter

2022

%

Change

22Q3-

23Q3

Asset Size Distribution

Less 

Than

$100 

Million

$100 

Million

to $1 

Billion

$1 

Billion

to $10 

Billion

$10 

Billion

to $250 

Billion

Greater 

Than

$250 

Billion

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives 1,185 1,187 1,178 1,141 1,212 -2.2 11 501 529 130 14

Total assets of institutions reporting derivatives $21,461,378 $21,524,610 $21,778,547 $21,630,187 $21,656,120 -0.9 $685 $262,011 $1,679,418 $6,016,178 $13,503,085

Total deposits of institutions reporting derivatives 16,948,122 17,039,067 17,123,919 17,562,378 17,673,277 -4.1 508 220,087 1,381,216 4,847,894 10,498,418

Total derivatives 207,440,885 224,647,718 220,468,605 192,875,723 198,385,321 4.6 126 10,932 321,123 4,275,686 202,833,017

Derivative Contracts by Underlying 

Risk Exposure 

Interest rate 145,917,935 164,098,784 160,283,111 139,774,359 141,989,523 2.8 126 10,492 313,804 2,186,287 143,407,226

Foreign exchange* 50,002,364 49,083,326 48,529,675 43,001,986 45,988,455 8.7 0 0 2,986 1,810,931 48,188,447

Equity 5,875,155 5,471,018 5,001,131 4,423,904 4,409,702 33.2 0 29 15 56,770 5,818,342

Commodity & other (excluding credit derivatives) 1,529,544 1,519,658 1,574,689 1,432,977 1,606,776 -4.8 0 0 139 152,723 1,376,681

Credit 4,114,991 4,474,144 5,079,273 4,241,352 4,389,784 -6.3 0 15 3,680 68,975 4,042,321

Total 207,439,989 224,646,930 220,467,879 192,874,578 198,384,240 4.6 126 10,536 320,624 4,275,686 202,833,017

Derivative Contracts by Transaction Type 

Swaps 124,696,693 143,242,667 137,729,743 118,597,662 121,132,626 2.9 0 1,434 153,747 2,639,877 121,901,636

Futures & forwards 34,215,368 33,317,054 34,502,393 28,748,693 31,661,060 8.1 0 912 8,541 1,114,107 33,091,808

Purchased options 20,220,077 20,127,902 20,067,871 19,695,467 19,118,334 5.8 0 834 24,262 186,341 20,008,640

Written options 20,929,560 20,751,678 20,222,587 19,693,855 18,780,453 11.4 0 872 8,863 172,499 20,747,326

Total 200,061,697 217,439,301 212,522,593 186,735,678 190,692,473 4.9 0 4,052 195,413 4,112,823 195,749,409

Fair Value of Derivative Contracts 

Interest rate contracts 72,427 54,260 64,099 72,856 76,860 -5.8 0 74 2,538 -1,134 70,950

Foreign exchange contracts 17,473 9,782 2,918 -14,980 15,025 16.3 0 0 1 930 16,542

Equity contracts -2,176 -7,184 -5,957 4,403 16,949 N/M 0 -1 0 955 -3,129

Commodity & other (excluding credit derivatives) 4,374 1,819 2,790 8,892 18,933 -76.9 0 0 2 442 3,931

Credit derivatives as guarantor** 11,961 15,417 12,909 5,346 -16,373 N/M 0 2 17 -87 12,028

Credit derivatives as beneficiary** -10,044 -17,352 -14,434 -4,002 23,163 N/M 0 0 -10 -297 -9,737

Derivative Contracts by Maturity*** 

 Interest rate contracts < 1 year 97,313,208 112,943,731 109,261,325 92,694,360 97,477,065 -0.2 0 719 20,682 1,018,970 96,272,836

 1-5 years 29,223,353 29,392,050 30,208,347 27,375,717 26,085,681 12.0 0 1,447 89,910 664,296 28,467,701

 > 5 years 21,228,573 21,500,230 21,259,200 20,667,400 19,919,888 6.6 0 419 61,917 344,414 20,821,823

 Foreign exchange and gold contracts < 1 year 36,129,454 35,713,887 34,845,789 31,270,845 33,098,861 9.2 0 0 1,798 1,683,610 34,444,047

 1-5 years 6,295,512 5,264,822 6,287,007 5,995,985 5,519,081 14.1 0 0 312 100,715 6,194,485

 > 5 years 3,277,686 3,320,695 3,271,833 3,145,766 2,843,951 15.3 0 0 1 6,510 3,271,175

 Equity contracts < 1 year 5,522,090 5,331,649 4,990,234 4,335,420 4,315,354 28.0 0 7 2 22,496 5,499,585

 1-5 years 1,435,442 1,142,298 1,150,946 999,329 1,057,822 35.7 0 22 4 30,706 1,404,711

 > 5 years 109,540 132,964 106,507 98,766 140,485 -22.0 0 0 0 884 108,657

 Commodity & other contracts (including 

 credit derivatives, excluding 

 gold contracts) < 1 year 2,842,842 2,903,697 3,102,480 2,743,038 2,933,679 -3.1 0 0 220 46,940 2,795,683

 1-5 years 2,637,051 3,038,310 3,290,726 2,844,783 2,819,537 -6.5 0 6 1,332 71,822 2,563,890

 > 5 years 437,927 270,488 487,503 272,418 468,669 -6.6 0 7 1,950 9,364 426,605

Risk-Based Capital: Credit Equivalent Amount 

Total current exposure to tier 1 capital (%) 16.0 14.4 13.0 14.9 21.0 0.0 0.2 3.2 5.7 23.5

Total potential future exposure to tier 1 capital (%) 30.5 31.6 32.0 31.9 32.5 0.0 0.1 0.9 5.4 48.1

Total exposure (credit equivalent amount)

to tier 1 capital (%) 46.5 45.9 45.1 46.8 53.4 0.0 0.3 4.1 11.1 71.6

Credit losses on derivatives  -21.0 -13.0 -13.0 101.0 107.0 -119.6 0.0 0.0 3.0 -1.0 -24.0

HELD FOR TRADING

Number of institutions reporting derivatives 156 153 157 164 172 -9.3 0 10 79 55 12

Total assets of institutions reporting derivatives 16,244,247 16,286,947 16,514,141 16,454,137 16,475,466 -1.4 0 5,227 357,036 3,046,979 12,835,005

Total deposits of institutions reporting derivatives 12,708,722 12,811,834 12,892,291 13,221,795 13,287,425 -4.4 0 4,336 295,669 2,468,280 9,940,437

Derivative Contracts by Underlying 

Risk Exposure 

Interest rate 140,720,039 157,949,351 155,617,474 135,502,070 137,554,819 2.3 0 242 45,087 925,361 139,749,349

Foreign exchange 46,289,689 45,798,549 45,123,349 40,604,230 42,216,283 9.6 0 0 2,751 1,671,854 44,615,084

Equity 5,817,413 5,417,476 4,948,378 4,375,929 4,363,822 33.3 0 0 0 45,881 5,771,531

Commodity & other 1,482,346 1,476,394 1,532,080 1,391,961 1,565,817 -5.3 0 0 24 144,277 1,338,045

Total 194,309,487 210,641,770 207,221,281 181,874,190 185,700,740 4.6 0 242 47,862 2,787,372 191,474,010

Trading Revenues: Cash & Derivative 

Instruments 

Interest rate**  641 3,479 5,728 4,623 -1,179 N/M 0 0 5 -36 672

Foreign exchange** 8,037 5,173 4,438 1,168 8,156 -1.5 0 0 1 197 7,839

Equity** 2,262 3,995 5,335 3,099 3,308 -31.6 0 0 5 381 1,875

Commodity & other (including credit derivatives)** 2,286 1,027 2,086 785 2,453 -6.8 0 0 0 238 2,048

Total trading revenues** 13,227 13,674 17,586 9,675 12,739 3.8 0 0 12 780 12,435

Share of Revenue

Trading revenues to gross revenues (%)** 5.2 5.6 7.6 4.8 7.1 0.0 0.0 0.2 1.7 6.1

Trading revenues to net operating revenues (%)** 25.7 27.0 33.5 20.8 27.7 0.0 0.0 1.1 9.5 29.5

HELD FOR PURPOSES OTHER THAN TRADING 

Number of institutions reporting derivatives 548 547 547 529 542 1.1 0 104 305 125 14

Total assets of institutions reporting derivatives 20,678,560 20,737,969 20,874,524 20,709,358 20,734,138 -0.3 0 55,498 1,219,527 5,900,450 13,503,085

Total deposits of institutions reporting derivatives 16,294,514 16,387,383 16,457,598 16,788,787 16,885,434 -3.5 0 45,964 997,655 4,752,478 10,498,418

Derivative Contracts by Underlying Risk 

Exposure 

Interest rate 5,069,801 6,123,143 4,642,802 4,253,101 4,413,003 14.9 0 3,780 147,219 1,260,926 3,657,876

Foreign exchange 577,469 577,582 563,149 519,396 491,890 17.4 0 0 203 45,190 532,076

Equity 57,742 53,542 52,752 47,975 45,880 25.9 0 29 14 10,888 46,810

Commodity & other 47,198 43,264 42,609 41,016 40,959 15.2 0 0 115 8,446 38,636

Total notional amount 5,752,210 6,797,531 5,301,313 4,861,488 4,991,733 15.2 0 3,809 147,551 1,325,451 4,275,399

All line items are reported on a quarterly basis. 

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

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

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

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

but is not applicable to banks filing the FFIEC 051 form. N/M - Not Meaningful 

 
QUARTERLY 2023 VOLUME 17, NUMBER 4

17 

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

(dollar figures in millions)

3rd 

Quarter

2023

2nd 

Quarter

2023

1st 

Quarter

2023

4th 

Quarter

2022

3rd 

Quarter

2022

%

Change

22Q3-

23Q3

Asset Size Distribution

Less 

Than

$100 

Million

$100 

Million

to $1 

Billion

$1 

Billion

to $10 

Billion

$10 

Billion to

$250 

Billion

Greater 

Than

$250 

Billion

Assets Securitized and Sold with Servicing Retained or with 

Recourse or Other Seller-Provided Credit Enhancements 

Number of institutions reporting securitization activities 62 61 62 63 64 -3.1 0 4 10 37 11

Outstanding Principal Balance by Asset Type** 

 1-4 family residential loans $303,098 $251,654 $254,891 $257,043 $270,421 12.1 $0 $3,246 $10,152 $64,529 $225,172

 Home equity loans 4 4 4 5 5 -20.0 0 0 0 4 0

 Credit card receivables 131 130 118 103 76 72.4 0 0 0 131 0

 Auto loans 2,110 1,336 1,237 1,102 541 290.0 0 0 0 1,110 1,000

 Other consumer loans 1,370 1,545 1,654 1,782 1,664 -17.7 0 0 0 586 783

 Commercial and industrial loans 5,157 4,648 4,703 4,988 4,626 11.5 0 0 0 0 5,157

 All other loans, leases, and other assets 112,796 111,473 109,531 110,712 113,555 -0.7 0 0 2,709 11,182 98,905

Total securitized and sold 424,666 370,790 372,138 375,735 390,888 8.6 0 3,246 12,861 77,542 331,018

Maximum Credit Exposure by Asset Type** 

 1-4 family residential loans 866 874 648 633 650 33.2 0 0 0 371 495

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

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

 Auto loans 45 12 12 19 19 136.8 0 0 0 0 45

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

 Commercial and industrial loans 259 210 207 219 203 27.6 0 0 0 0 259

 All other loans, leases, and other assets 2,790 2,767 2,783 2,790 2,975 -6.2 0 0 64 342 2,384

Total credit exposure 3,960 3,863 3,650 3,661 3,847 2.9 0 0 64 713 3,183

Total unused liquidity commitments provided to 

institution’s own securitizations 199 229 251 236 210 -5.2 0 0 0 0 199

Securitized Loans, Leases, and Other Assets 30-89 Days 

Past Due (%)** 

 1-4 family residential loans 3.5 2.7 2.3 2.9 2.5 0.0 2.2 3.4 3.2 3.6

 Home equity loans 6.1 6.3 7.1 5.5 3.4 0.0 0.0 0.0 6.1 0.0

 Credit card receivables 6.9 6.2 5.1 5.8 3.9 0.0 0.0 0.0 6.9 0.0

 Auto loans 4.4 4.5 2.1 1.2 0.4 0.0 0.0 0.0 7.7 0.6

 Other consumer loans 2.5 2.2 2.1 2.5 2.5 0.0 0.0 0.0 1.6 3.2

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

 All other loans, leases, and other assets 0.8 0.5 0.6 0.3 0.3 0.0 0.0 1.4 2.3 0.6

Total loans, leases, and other assets 2.7 2.0 1.7 2.0 1.8 0.0 0.0 0.0 3.6 2.7

Securitized Loans, Leases, and Other Assets 

90 Days or More Past Due (%)** 

 1-4 family residential loans 1.2 0.8 0.8 0.8 1.0 0.0 1.0 1.3 1.8 1.0

 Home equity loans 25.5 27.0 28.6 28.1 27.5 0.0 0.0 0.0 25.5 0.0

 Credit card receivables 8.4 6.2 6.8 5.8 2.6 0.0 0.0 0.0 8.4 0.0

 Auto loans 0.3 0.3 0.2 0.0 0.0 0.0 0.0 0.0 0.6 0.0

 Other consumer loans 1.7 1.5 1.7 1.9 2.1 0.0 0.0 0.0 1.1 2.1

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

 All other loans, leases, and other assets 0.9 0.9 0.6 0.6 0.9 0.0 0.0 0.6 0.7 0.9

Total loans, leases, and other assets 1.0 0.6 0.5 0.5 0.8 0.0 0.0 0.0 0.9 1.0

Securitized Loans, Leases, and Other Assets 

Charged-Off (net, YTD, annualized, %)** 

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

 Home equity loans 2.9 1.2 0.1 4.0 2.1 0.0 0.0 0.0 2.9 0.0

 Credit card receivables 16.0 10.0 4.2 1.9 0.0 0.0 0.0 0.0 16.0 0.0

 Auto loans 0.8 0.4 0.2 0.0 0.0 0.0 0.0 0.0 1.4 0.1

 Other consumer loans 1.2 0.8 0.4 0.8 0.6 0.0 0.0 0.0 0.8 1.6

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

 All other loans, leases, and other assets 0.2 0.1 0.1 0.2 0.1 0.0 0.0 0.0 1.4 0.1

Total loans, leases, and other assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0

Seller’s Interests in Institution’s Own Securitizations 

- Carried as Securities or Loans***

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

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

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

Assets Sold with Recourse and Not Securitized 

Number of institutions reporting asset sales 310 307 307 311 316 -1.9 3 94 139 64 10

Outstanding Principal Balance by Asset Type 

 1-4 family residential loans 24,385 20,352 20,297 24,182 27,018 -9.7 20 2,630 9,598 11,058 1,079

 All other loans, leases, and other assets 149,386 146,945 144,741 144,016 142,239 5.0 0 40 263 44,340 104,743

Total sold and not securitized 173,770 167,297 165,038 168,198 169,257 2.7 20 2,669 9,861 55,397 105,823

Maximum Credit Exposure by Asset Type 

 1-4 family residential loans 6,646 6,487 6,349 8,620 9,015 -26.3 1 263 2,910 2,802 670

 All other loans, leases, and other assets 44,053 43,182 41,996 41,742 41,221 6.9 0 40 390 13,801 29,822

Total credit exposure 50,699 49,669 48,344 50,362 50,235 0.9 1 303 3,300 16,603 30,492

Support for Securitization Facilities Sponsored by 

Other Institutions 

Number of institutions reporting securitization facilities 

sponsored by others 34 33 34 36 36 0 11 11 5 7

Total credit exposure 17,869 19,524 20,213 20,092 21,922 -18.5 0 0 0 0 17,869

Total unused liquidity commitments 2,415 2,722 3,049 3,165 3,576 -32.5 0 0 0 265 2,150

Other

Assets serviced for others  6,452,793 6,238,588 6,226,181 6,329,175 6,178,078 4.4 2,764 221,766 641,448 1,478,001 4,108,814

Asset-backed commercial paper conduits 

 Credit exposure to conduits sponsored by institutions 

 and others 5,071 4,920 4,090 4,128 3,803 33.3 0 0 0 27 5,044

 Unused liquidity commitments to conduits 

 sponsored by institutions and others 68,303 69,682 59,759 60,714 59,659 14.5 0 0 0 33 68,270

Net servicing income (for the quarter) 3,164 2,391 1,755 1,412 3,224 -1.9 6 110 473 989 1,586

Net securitization income (for the quarter) 57 30 29 38 -11 -618.2 0 0 5 4 49

Total credit exposure to Tier 1 capital (%)** *** 3.1 3.2 3.2 3.1 3.3 0.0 0.0 0.1 2.4 4.5

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

** Beginning in June 2018, for banks that file the FFIEC 041 report form, all other loans include home equity loans, credit card receivables, auto loans, other consumer loans, and 

commercial and industrial loans.

*** Beginning in June 2018, only includes banks that file the FFIEC 031 report form.

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

** *** Total credit exposure includes the sum of the three line items titled “Total credit exposure” reported above. N/M- Not Meaningful
PAGE INTENTIONALLY LEFT BLANK
QUARTERLY 2023 VOLUME 17, NUMBER 4

19 

COMMUNITY BANK PERFORMANCE

Community banks are identified based on criteria defined in the FDIC’s 2012 Community Banking Study. When 

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

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

on community banks designated during the previous quarter.

Net Income Fell From a Quarter Ago and One Year Ago

The Net Interest Margin Decreased for the Third Straight Quarter

Unrealized Losses on Securities Increased From the Prior Quarter

Loan Growth Remained Positive and Was Broad-Based Across Loan Categories 

Total Deposits Increased Quarter Over Quarter 

 Asset Quality Metrics Remained Favorable Overall

NET INCOME DECREASED FROM THE 

PRIOR QUARTER AND ONE YEAR AGO

Net income for the 4,166 community banks declined $335.5 million 

(4.8 percent) in third quarter 2023 from a quarter ago to $6.7 billion. 

Higher noninterest expense, lower net interest income, increased 

provisions, and greater losses on the sale of securities more than 

exceeded an increase in noninterest income. More than half (55.0 

percent) of all community banks reported a decline in net income from 

second quarter 2023. The share of unprofitable community banks was 

6.6 percent, up from 5.0 percent in the prior quarter. The pretax return 

on assets ratio fell 6 basis points from one quarter ago and 30 basis 

points from one year ago to 1.21 percent. Net income decreased $1.2 

billion (15 percent) from third quarter 2022, driven primarily by higher 

noninterest expense and lower net interest income.

Chart 1

Contributors to the Year-Over-Year Change in Income

FDIC-Insured Community Banks

$ Billions

Source: FDIC.

Net

Income

Net

Interest

Income

Loan Loss

Provisions

Noninterest

Income

Noninterest

Expense

Realized

Gains on

Securities

Income

Taxes

Positive Factor Negative Factor

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

-3% 11% 9% 6% 106% -18%

-$1.18 -0.67 0.08 0.44 0.97 -0.20 -0.30

-15%

Chart 2

Source: FDIC.

Percent

Net Interest Margin

Industry (3.30)

Community Banks (3.35)

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
QUARTERLY 2023 VOLUME 17, NUMBER 4

20 

THE NET INTEREST MARGIN 

DECLINED FOR A THIRD STRAIGHT 

QUARTER

The community bank net interest margin (NIM) decreased 4 basis 

points in third quarter 2023 from a quarter ago to 3.35 percent, as the 

cost of deposits increased more than the yield on total loans. Higher 

deposit costs also contributed to a quarterly NIM decline of 10 basis 

points in second quarter 2023 and 22 basis points in first quarter 2023. 

While the yield on earning assets rose 21 basis points quarter over 

quarter and 110 basis points year over year, the cost of funds increased 

25 basis points quarter over quarter and 138 basis points year over year. 

The NIM was down 28 basis points from the year-ago quarter.

NET OPERATING REVENUE EDGED UP 

IN THIRD QUARTER DUE TO HIGHER 

NONINTEREST INCOME

Community bank net operating revenue (net interest income plus 

noninterest income) increased $181.2 million (0.7 percent) quarter over 

quarter, as higher noninterest income offset lower net interest income. 

Noninterest income rose $250.2 million (5.1 percent) from the prior 

quarter predominately due to higher service charges on deposit accounts, 

net servicing fees, and “all other noninterest income.”1 Interest expense 

increased in third quarter—mainly from domestic time deposits—by a 

greater amount than interest income, causing a $69.0 million (0.3 percent) 

decline in net interest income. More than 52 percent of community banks 

reported lower net interest income in third quarter 2023.

Net operating revenue declined $237.9 million (0.9 percent) year over year, 

as a $435.5 million increase in noninterest income was more than offset by 

a $673.4 million decrease in net interest income. Although interest income 

rose across all loan types, net interest income was down from a year ago 

due to higher interest expense. Higher “all other noninterest income” 

drove the annual increase in noninterest income.

1 “All other noninterest income” includes material write-in items as well as income related to wire transfers and ATM fees, bank card and credit card interchange fees, safe 

deposit box rent, printing and sale of checks, earnings on/increase in value of cash surrender value of life insurance, and other noninterest sources.

Chart 3

Change in Loan Balances and Unused Commitments 

FDIC-Insured Community Banks

Source: FDIC. Loan Balances

Unused

Commitments

Nonfarm

Nonresidential

RE

Commercial

& Industrial

1–4 Family

Residential

RE

Construction &

Development

Farm

Loans

Commercial RE

& Construction

Commercial

& Industrial

Change 3Q 2023 vs. 3Q 2022

Change 3Q 2023 vs. 2Q 2023

-20

-10

 0

10

20

30

40

50

60

$ Billions

46.0

14.4

49.5

16.9

3.8

-11.0

3.7 8.9

0.2

10.1

2.8 2.6

-4.2

0.8

Chart 4

Source: FDIC.

Share of Loan Portfolio Noncurrent

Percent

Noncurrent Loan Rates for FDIC-Insured Community Banks

C&D Loans

Nonfarm Nonresidential RE

1–4 Family RE

C&I Loans

Farm Loans

Home Equity

0

2

4

6

8

10

12

14

16

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

#
QUARTERLY 2023 VOLUME 17, NUMBER 4

21 

NONINTEREST EXPENSE INCREASED 

QUARTER OVER QUARTER AND YEAR 

OVER YEAR

Noninterest expense increased $200.7 million (1.2 percent) from a 

quarter ago and $971.3 million (6.2 percent) from a year ago to $16.7 

billion. Higher salaries and benefits expense and “all other noninterest 

expense” led the quarterly and yearly increases in noninterest 

expense.2 The efficiency ratio (noninterest expense as a share of net 

operating revenue) rose 6 basis points from a quarter ago to 63.9 

percent, indicating that community banks were slightly less efficient at 

generating revenue.

PROVISION EXPENSE ROSE FROM 

THE PRIOR QUARTER AND ONE 

YEAR AGO

Quarterly provision expense of $808.5 million was up $61.6 million 

(8.2 percent) from a quarter ago and $77.4 million (10.6 percent) from 

a year ago. The reserve coverage ratio (the ratio of the allowance for 

credit losses to noncurrent loans) decreased 20.9 percentage points 

from a quarter ago and 26.2 percentage points from a year ago to 238.5 

percent, driven by higher noncurrent loan balances. Nevertheless, the 

community bank reserve coverage ratio was 31.5 percentage points 

above the reserve coverage ratio at noncommunity banks.

UNREALIZED LOSSES ON SECURITIES 

INCREASED FROM THE PRIOR 

QUARTER3

Unrealized losses on securities totaled $76.5 billion in third quarter 

2023, up $12.8 billion (20.2 percent) from the prior quarter and $3.6 

billion (4.9 percent) from the prior year. Unrealized losses on heldto-maturity securities ($13.4 billion) and available-for-sale securities 

($63.1 billion) both increased quarter over quarter and year over year. 

Nearly all community banks (97.0 percent) reported unrealized losses 

on securities.

TOTAL ASSETS WERE UP FROM A 

YEAR AGO AND QUARTER AGO EVEN 

THOUGH SECURITIES FELL

Total assets at community banks rose $20.8 billion (0.8 percent) 

quarter over quarter and $113.6 billion (4.4 percent) year over year. 

Quarterly growth in total loans and leases was $31.8 billion (1.7 percent) 

in third quarter 2023, slightly below the $47.1 billion (2.6 percent) 

increase in second quarter 2023. Total loans and leases grew $165.0 

billion (9.8 percent) from a year ago. Securities balances fell $20.3 

billion (3.6 percent) quarter over quarter and $46.7 billion (8.0 percent) 

year over year. Cash and balances due from depository institutions fell 

$13.1 billion (7.6 percent) year over year despite a quarterly rise of $4.9 

billion (3.2 percent).

2 “All other noninterest expense” includes material write-in items as well as expense related to data processing, advertising, and marketing, legal fees, and consulting and 

advisory fees.

3 Unrealized losses on securities reflect the difference between the market value as of quarter-end and the book value of non-equity securities. 
QUARTERLY 2023 VOLUME 17, NUMBER 4

22 

LOAN GROWTH WAS POSITIVE 

ACROSS ALL MAJOR LOAN 

CATEGORIES

Loan and lease balances were up from one quarter ago across all major 

portfolios. Increases in 1–4 family residential real estate loans ($11.1 

billion, or 2.3 percent) and nonfarm, nonresidential commercial real 

estate (CRE) loans ($8.9 billion, or 1.6 percent) led the quarter-overquarter growth in lending. The majority of community banks (77.1 

percent) reported quarterly growth in total loan balances.

Loan and lease balances also increased from one year ago across all 

major portfolios, and 88.5 percent of community banks reported 

annual growth in total loan balances. Increases in 1–4 family 

residential real estate loans ($53.7 billion, or 12.1 percent) and nonfarm, 

nonresidential CRE loans ($46.0 billion, or 8.8 percent) led the yearover-year growth in lending.

DEPOSITS INCREASED FROM THE 

PREVIOUS QUARTER

Community banks reported an increase in total deposits of 1.0 percent 

($23.2 billion) during third quarter 2023, compared to a decline of 0.1 

percent ($1.5 billion) reported in second quarter 2023. Slightly more 

than half of all community banks (53.3 percent) reported an increase 

in deposit balances from the prior quarter. Growth occurred in both 

insured ($17.4 billion) and uninsured deposit account balances ($7.5 

billion) at approximately the same rate as total deposits. In the third 

quarter, growth in interest-bearing deposit balances ($33.2 billion, or 

2.0 percent) was somewhat offset by a decline in noninterest-bearing 

deposits ($10.2 billion, or 1.8 percent). Total deposits increased 1.2 

percent ($27.1 billion) from one year ago.

Wholesale funds decreased in the quarter reflecting lower Federal 

Home Loan Bank borrowings ($7.8 billion, down 6.7 percent) and lower 

levels of brokered deposits ($3.2 billion, down 2.8 percent). The share of 

wholesale funds to total assets was 18.7 percent in third quarter, down 

from 18.9 percent in second quarter 2023.

THE NONCURRENT LOAN RATE 

INCREASED SLIGHTLY FROM THE 

PRIOR QUARTER

The share of loans and leases 90 days or more past due or in nonaccrual 

status increased 4 basis points from second quarter 2023 to 0.51 percent. 

Less than half of community banks (40.5 percent) reported quarterover-quarter increases in noncurrent loan balances. Noncurrent loan 

balances for all major loan portfolios increased from one quarter ago.
QUARTERLY 2023 VOLUME 17, NUMBER 4

23 

THE NET CHARGE-OFF RATE 

INCREASED BUT REMAINED 

RELATIVELY LOW

The community bank net charge-off rate increased 2 basis points 

from one quarter ago and 4 basis points from one year ago to 0.11 

percent. This ratio remained low compared to the average rate of the 

past decade. In addition, about 45 percent of the annual increase in net 

charge-off volume occurred in consumer loans, a relatively small loan 

portfolio at community banks (4.0 percent of total loan balances). The 

net charge-off rate for consumer loans increased 49 basis points from 

one year ago to 1.33 percent.

CAPITAL RATIOS REMAINED STABLE The tier one risk-based capital ratio for community banks that did not 

file the community bank leverage ratio (CBLR) was 13.76 percent, up 

2 basis points from the prior quarter, as reductions in risk-weighted 

assets outpaced tier 1 capital declines. The average CBLR for the 1,641 

community banks that elected to use the CBLR framework was 12.13 

percent, up 7 basis points from second quarter 2023. The leverage 

capital ratio for community banks increased 3 basis points to 10.70 

percent from a quarter ago.

ONE COMMUNITY BANK OPENED 

AND NONE FAILED IN THIRD 

QUARTER 2023

The number of community banks declined to 4,166 in the third 

quarter, down 30 from the previous quarter. One community bank 

opened and none failed. Several banks transitioned from community 

to noncommunity banks or vice versa, and 23 merged out of existence 

during the quarter.

Authors:

Alex Kokkinakis

Senior Financial Analyst

Division of Insurance and Research

Brian L. Webb

Senior Financial Analyst

Division of Insurance and Research
PAGE INTENTIONALLY LEFT BLANK
QUARTERLY 2023 VOLUME 17, NUMBER 4

25 

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

2023* 2022* 2022 2021 2020 2019 2018

Return on assets (%) 1.06 1.13 1.15 1.26 1.09 1.20 1.19

Return on equity (%) 11.30 11.70 11.98 11.70 9.72 10.24 10.51

Core capital (leverage) ratio (%) 10.70 10.42 10.50 10.16 10.32 11.14 11.13

Noncurrent assets plus other real estate owned to assets (%) 0.38 0.34 0.33 0.40 0.60 0.65 0.71

Net charge-offs to loans (%) 0.09 0.05 0.07 0.07 0.12 0.13 0.12

Asset growth rate (%) -0.81 -1.36 -1.81 8.86 12.15 2.55 0.23

Net interest margin (%) 3.41 3.36 3.45 3.28 3.39 3.66 3.73

Net operating income growth (%) -7.17 -7.18 -4.09 29.70 -2.07 0.13 25.30

Number of institutions reporting 4,166 4,303 4,257 4,386 4,556 4,750 4,978

Percentage of unprofitable institutions (%) 4.78 4.09 3.62 3.26 4.54 3.96 3.66

* Through September 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending September 30.
QUARTERLY 2023 VOLUME 17, NUMBER 4

26 

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

(dollar figures in millions)

3rd Quarter

2023

2nd Quarter 

2023

3rd Quarter 

2022

% Change

22Q3-23Q3

Number of institutions reporting 4,166 4,196 4,303 -3.2

Total employees (full-time equivalent) 368,149 372,244 379,800 -3.1

CONDITION DATA

Total assets $2,682,218 $2,704,674 $2,704,008 -0.8

 Loans secured by real estate 1,445,778 1,426,247 1,376,961 5.0

 1-4 Family residential mortgages 449,984 440,376 415,273 8.4

 Nonfarm nonresidential 568,060 566,450 559,175 1.6

 Construction and development 155,487 152,165 145,460 6.9

 Home equity lines 45,878 44,313 42,892 7.0

 Commercial & industrial loans 234,904 239,260 237,048 -0.9

 Loans to individuals 73,810 87,248 78,768 -6.3

 Credit cards 2,883 2,882 2,550 13.0

 Farm loans 49,853 47,345 47,138 5.8

 Other loans & leases 45,100 49,234 47,275 -4.6

 Less: Unearned income 846 756 709 19.3

 Total loans & leases 1,848,599 1,848,578 1,786,481 3.5

 Less: Reserve for losses* 22,664 22,611 21,934 3.3

 Net loans and leases 1,825,935 1,825,967 1,764,547 3.5

 Securities** 538,512 562,383 604,522 -10.9

 Other real estate owned 746 787 862 -13.4

 Goodwill and other intangibles 18,712 17,869 18,288 2.3

 All other assets 298,312 297,667 315,790 -5.5

Total liabilities and capital 2,682,218 2,704,674 2,704,008 -0.8

 Deposits 2,245,043 2,256,281 2,331,388 -3.7

 Domestic office deposits 2,242,281 2,255,486 2,330,847 -3.8

 Foreign office deposits 2,761 795 541 410.9

 Brokered deposits 109,379 112,556 66,460 64.6

 Estimated insured deposits 1,580,600 1,592,413 1,562,590 1.2

 Other borrowed funds 157,561 164,025 103,703 51.9

 Subordinated debt 179 315 326 -45.2

 All other liabilities 29,723 27,196 24,372 22.0

 Total equity capital (includes minority interests) 249,712 256,856 244,220 2.2

 Bank equity capital 249,610 256,751 244,087 2.3

Loans and leases 30-89 days past due 7,052 6,209 5,837 20.8

Noncurrent loans and leases 9,503 8,717 8,287 14.7

Restructured loans and leases 2,594 2,585 4,120 -37.0

Mortgage-backed securities 218,715 228,751 246,542 -11.3

Earning assets 2,503,651 2,529,351 2,528,980 -1.0

FHLB Advances 108,417 116,186 78,459 38.2

Unused loan commitments 410,602 416,038 433,954 -5.4

Trust assets 313,739 344,594 352,806 -11.1

Assets securitized and sold 23,583 26,144 24,586 -4.1

Notional amount of derivatives 225,170 122,905 105,130 114.2

INCOME DATA

First Three Qtrs 

2023

First Three Qtrs

2022 % Change

3rd Quarter 

2023

3rd Quarter 

2022

% Change 

22Q3-23Q3

Total interest income $91,432 $69,032 32.4 $32,372 $25,736 25.8

Total interest expense 28,346 6,075 366.6 11,487 2,885 298.2

 Net interest income 63,086 62,957 0.2 20,885 22,851 -8.6

Provision for credit losses*** 2,239 1,647 35.9 808 778 3.9

Total noninterest income 14,620 15,877 -7.9 5,164 5,103 1.2

Total noninterest expense 49,442 48,921 1.1 16,740 16,762 -0.1

Securities gains (losses) -653 -811 -19.5 -393 -239 64.0

Applicable income taxes 4,309 4,837 -10.9 1,387 1,785 -22.3

Extraordinary gains, net**** 5 -4 N/M 0 -5 N/M

 Total net income (includes minority interests) 21,068 22,613 -6.8 6,720 8,384 -19.8

 Bank net income 21,063 22,602 -6.8 6,719 8,380 -19.8

Net charge-offs 1,252 623 101.1 519 314 65.3

Cash dividends 8,746 8,759 -0.1 2,516 2,750 -8.5

Retained earnings 12,317 13,843 -11.0 4,203 5,630 -25.3

 Net operating income 21,617 23,286 -7.2 7,040 8,592 -18.1

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

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

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

this item represents the provision for loan and lease losses.

**** See Notes to Users for explanation. N/M - Not Meaningful
QUARTERLY 2023 VOLUME 17, NUMBER 4

27 

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

Prior Periods Adjusted for Mergers

(dollar figures in millions)

3rd Quarter 

2023

2nd Quarter 

2023

3rd Quarter 

2022

% Change 

22Q3-23Q3

Number of institutions reporting 4,166 4,165 4,160 0.1

Total employees (full-time equivalent) 368,149 370,423 366,150 0.5

CONDITION DATA

Total assets $2,682,218 $2,661,430 $2,568,664 4.4

 Loans secured by real estate 1,445,778 1,418,211 1,307,621 10.6

 1-4 Family residential mortgages 449,984 439,899 400,495 12.4

 Nonfarm nonresidential 568,060 559,196 522,034 8.8

 Construction and development 155,487 152,682 138,584 12.2

 Home equity lines 45,878 44,817 41,651 10.1

 Commercial & industrial loans 234,904 234,725 220,510 6.5

 Loans to individuals 73,810 73,020 68,664 7.5

 Credit cards 2,883 2,815 2,507 15.0

 Farm loans 49,853 47,232 46,095 8.2

 Other loans & leases 45,100 44,392 41,435 8.8

 Less: Unearned income 846 769 680 24.4

 Total loans & leases 1,848,599 1,816,810 1,683,646 9.8

 Less: Reserve for losses* 22,664 22,391 20,872 8.6

 Net loans and leases 1,825,935 1,794,419 1,662,774 9.8

 Securities** 538,512 558,797 585,258 -8.0

 Other real estate owned 746 785 817 -8.7

 Goodwill and other intangibles 18,712 18,600 17,909 4.5

 All other assets 298,312 288,827 301,906 -1.2

Total liabilities and capital 2,682,218 2,661,430 2,568,664 4.4

 Deposits 2,245,043 2,221,803 2,217,945 1.2

 Domestic office deposits 2,242,281 2,219,276 2,215,650 1.2

 Foreign office deposits 2,761 2,527 2,295 20.3

 Brokered deposits 109,379 101,861 60,226 81.6

 Estimated insured deposits 1,580,600 1,563,169 1,498,863 5.5

 Other borrowed funds 157,561 159,738 95,475 65.0

 Subordinated debt 179 176 181 -1.3

 All other liabilities 29,723 26,837 23,227 28.0

 Total equity capital (includes minority interests) 249,712 252,876 231,836 7.7

 Bank equity capital 249,610 252,771 231,714 7.7

Loans and leases 30-89 days past due 7,052 6,189 5,241 34.6

Noncurrent loans and leases 9,503 8,428 7,903 20.3

Restructured loans and leases 2,594 2,569 3,957 -34.4

Mortgage-backed securities 218,715 227,416 237,472 -7.9

Earning assets 2,503,651 2,486,787 2,400,831 4.3

FHLB Advances 108,417 112,719 71,030 52.6

Unused loan commitments 410,602 413,366 415,952 -1.3

Trust assets 313,739 354,133 291,158 7.8

Assets securitized and sold 23,583 25,245 24,086 -2.1

Notional amount of derivatives 225,170 116,476 91,968 144.8

INCOME DATA

First Three Qtrs 

2023

First Three Qtrs

2022 % Change

3rd Quarter 

2023

3rd Quarter 

 2022

% Change 

22Q3-23Q3

Total interest income $91,432 $65,016 40.6 $32,372 $24,186 33.8

Total interest expense 28,346 5,629 403.6 11,487 2,628 337.1

 Net interest income 63,086 59,387 6.2 20,885 21,558 -3.1

Provision for credit losses*** 2,239 1,493 49.9 808 731 10.6

Total noninterest income 14,620 14,775 -1.0 5,164 4,729 9.2

Total noninterest expense 49,442 46,198 7.0 16,740 15,769 6.2

Securities gains (losses) -653 -692 -5.7 -393 -190 106.3

Applicable income taxes 4,309 4,533 -4.9 1,387 1,684 -17.6

Extraordinary gains, net**** 5 -4 N/M 0 -5 N/M

 Total net income (includes minority interests) 21,068 21,241 -0.8 6,720 7,907 -15.0

 Bank net income 21,063 21,231 -0.8 6,719 7,903 -15.0

Net charge-offs 1,252 556 125.3 519 285 82.1

Cash dividends 8,746 8,418 3.9 2,516 2,602 -3.3

Retained earnings 12,317 12,812 -3.9 4,203 5,301 -20.7

 Net operating income 21,617 21,817 -0.9 7,040 8,075 -12.8

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

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

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

this item represents the provision for loan and lease losses.

**** See Notes to Users for explanation. N/M - Not Meaningful
QUARTERLY 2023 VOLUME 17, NUMBER 4

28 

Table III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks

Third Quarter 2023

(dollar figures in millions) All Community 

Banks

Geographic Regions*

New York Atlanta Chicago Kansas City Dallas San Francisco

Number of institutions reporting 4,166 449 470 909 1,137 946 255

Total employees (full-time equivalent) 368,149 70,471 37,689 76,408 71,356 81,015 31,210

CONDITION DATA

Total assets $2,682,218 $618,383 $260,798 $507,506 $508,112 $522,652 $264,765

 Loans secured by real estate 1,445,778 378,381 140,750 264,966 255,197 268,001 138,482

 1-4 Family residential mortgages 449,984 143,486 43,512 78,364 73,622 79,134 31,865

 Nonfarm nonresidential 568,060 137,648 62,321 102,104 87,856 111,107 67,024

 Construction and development 155,487 27,344 17,082 25,071 28,501 45,378 12,110

 Home equity lines 45,878 11,109 5,577 11,195 5,974 5,675 6,348

 Commercial & industrial loans 234,904 44,818 20,229 50,329 52,573 47,063 19,892

 Loans to individuals 73,810 16,399 7,664 14,065 14,071 13,389 8,221

 Credit cards 2,883 411 117 194 1,028 244 889

 Farm loans 49,853 488 1,519 7,994 28,847 8,202 2,802

 Other loans & leases 45,100 10,440 2,308 13,184 7,999 7,523 3,647

 Less: Unearned income 846 213 88 75 141 195 134

 Total loans & leases 1,848,599 450,313 172,383 350,464 358,546 343,982 172,911

 Less: Reserve for losses** 22,664 4,576 2,150 4,300 4,622 4,503 2,514

 Net loans and leases 1,825,935 445,737 170,233 346,164 353,924 339,479 170,398

 Securities*** 538,512 104,306 54,136 105,082 102,798 114,594 57,597

 Other real estate owned 746 149 95 127 177 161 38

 Goodwill and other intangibles 18,712 4,554 670 4,348 3,519 3,520 2,102

 All other assets 298,312 63,637 35,665 51,786 47,695 64,897 34,631

Total liabilities and capital 2,682,218 618,383 260,798 507,506 508,112 522,652 264,765

 Deposits 2,245,043 502,504 227,024 424,604 422,018 448,394 220,498

 Domestic office deposits 2,242,281 501,680 227,024 424,604 422,018 448,394 218,561

 Foreign office deposits 2,761 824 0 0 0 0 1,937

 Brokered deposits 109,379 30,281 8,149 23,537 22,335 16,327 8,750

 Estimated insured deposits 1,580,600 354,290 157,335 311,457 315,656 302,199 139,663

 Other borrowed funds 157,561 45,855 8,517 32,150 35,802 21,350 13,887

 Subordinated debt 179 9 0 16 4 139 10

 All other liabilities 29,723 9,054 2,512 4,831 5,000 4,514 3,813

 Total equity capital (includes minority interests) 249,712 60,961 22,745 45,905 45,289 48,256 26,557

 Bank equity capital 249,610 60,957 22,747 45,813 45,288 48,248 26,557

Loans and leases 30-89 days past due 7,052 1,529 605 1,269 1,292 1,802 555

Noncurrent loans and leases 9,503 2,596 636 1,771 1,542 2,123 835

Restructured loans and leases 2,594 569 223 713 490 449 149

Mortgage-backed securities 218,715 54,240 21,383 38,848 33,280 41,288 29,675

Earning assets 2,503,651 576,663 244,229 472,858 475,183 487,754 246,964

FHLB Advances 108,417 34,703 5,976 23,928 24,829 11,650 7,331

Unused loan commitments 410,602 87,259 34,934 83,832 88,489 72,698 43,390

Trust assets 313,739 62,780 9,911 63,483 125,037 32,295 20,231

Assets securitized and sold 23,583 10,153 31 3,782 6,088 2,963 565

Notional amount of derivatives 225,170 50,104 8,383 117,110 26,921 8,922 13,730

INCOME DATA

Total interest income $32,372 $7,125 $3,222 $6,074 $6,100 $6,670 $3,180

Total interest expense 11,487 2,855 1,020 2,160 2,311 2,189 953

 Net interest income 20,885 4,270 2,203 3,914 3,789 4,481 2,228

Provision for credit losses  808 168 71 107 169 175 119

Total noninterest income 5,164 1,022 465 1,078 986 1,153 461

Total noninterest expense 16,740 3,676 1,694 3,111 3,115 3,467 1,678

Securities gains (losses) -393 -96 -25 -29 -221 -18 -4

Applicable income taxes 1,387 314 169 325 147 230 202

Extraordinary gains, net** *** 0 0 0 0 0 0 0

 Total net income (includes minority interests) 6,720 1,038 708 1,421 1,123 1,746 685

 Bank net income 6,719 1,038 709 1,420 1,123 1,745 685

Net charge-offs 519 110 53 60 90 112 94

Cash dividends 2,516 430 215 566 465 625 215

Retained earnings 4,203 608 494 854 657 1,120 470

 Net operating income 7,040 1,116 729 1,447 1,299 1,762 688

* See Table IV-A for explanation.

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

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

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

this item represents the provision for loan and lease losses.

** *** See Notes to Users for explanation.
QUARTERLY 2023 VOLUME 17, NUMBER 4

29 

Table IV-B. Third Quarter 2023, FDIC-Insured Community Banks

Performance ratios (annualized, %)

All Community Banks Third Quarter 2023, Geographic Regions*

3rd Quarter 

 2023

2nd Quarter 

2023 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 5.19 4.98 4.97 5.29 5.17 5.15 5.48 5.18

Cost of funding earning assets 1.84 1.59 1.99 1.68 1.84 1.95 1.80 1.55

 Net interest margin 3.35 3.39 2.98 3.62 3.33 3.20 3.68 3.63

Noninterest income to assets 0.77 0.75 0.66 0.72 0.85 0.78 0.89 0.70

Noninterest expense to assets 2.51 2.52 2.39 2.61 2.47 2.46 2.66 2.55

Loan and lease loss provision to assets 0.12 0.12 0.11 0.11 0.08 0.13 0.13 0.18

Net operating income to assets 1.05 1.07 0.73 1.12 1.15 1.03 1.35 1.05

Pretax return on assets 1.21 1.28 0.88 1.35 1.38 1.00 1.52 1.35

Return on assets 1.01 1.06 0.68 1.09 1.13 0.89 1.34 1.04

Return on equity 10.71 11.14 6.79 12.39 12.30 9.83 14.39 10.32

Net charge-offs to loans and leases 0.11 0.09 0.10 0.12 0.07 0.10 0.13 0.22

Loan and lease loss provision to net 

charge-offs 155.57 186.96 160.70 131.73 166.03 184.38 154.46 129.93

Efficiency ratio 63.85 63.79 69.15 63.36 61.57 64.82 61.13 62.15

Net interest income to operating revenue 80.17 80.89 80.69 82.58 78.41 79.35 79.53 82.86

% of unprofitable institutions 6.63 5.20 13.14 8.72 6.27 4.22 5.50 7.45

% of institutions with earnings gains 36.87 52.24 27.39 44.04 34.43 32.54 45.14 37.65

*See Table IV-A for explanation. 

Table V-B. First Three Quarters 2023, FDIC-Insured Community Banks

Performance ratios (%)

All Community Banks First Three Quarters 2023, Geographic Regions*

First Three 

Qtrs 2023

First Three 

Qtrs 2022 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 4.94 3.69 4.74 5.06 4.89 4.88 5.21 4.94

Cost of funding earning assets 1.53 0.32 1.68 1.36 1.52 1.63 1.48 1.27

 Net interest margin 3.41 3.36 3.06 3.70 3.36 3.26 3.73 3.67

Noninterest income to assets 0.74 0.80 0.65 0.68 0.86 0.77 0.77 0.66

Noninterest expense to assets 2.49 2.45 2.38 2.60 2.46 2.46 2.62 2.53

Loan and lease loss provision to assets 0.11 0.08 0.09 0.12 0.09 0.11 0.12 0.18

Net operating income to assets 1.09 1.17 0.80 1.16 1.18 1.09 1.33 1.06

Pretax return on assets 1.28 1.38 1.01 1.41 1.39 1.18 1.49 1.35

Return on assets 1.06 1.13 0.78 1.15 1.14 1.03 1.32 1.05

Return on equity 11.30 11.70 7.82 13.06 12.41 11.39 14.21 10.48

Net charge-offs to loans and leases 0.09 0.05 0.08 0.09 0.05 0.09 0.10 0.19

Loan and lease loss provision to net 

charge-offs 173.89 259.09 149.23 189.43 236.80 181.11 178.18 147.02

Efficiency ratio 63.26 61.70 67.72 62.52 61.20 63.91 61.28 61.80

Net interest income to operating revenue 81.19 79.86 81.50 83.65 78.58 79.86 81.90 83.86

% of unprofitable institutions 4.78 4.09 7.80 6.60 5.39 2.73 3.59 7.45

% of institutions with earnings gains 53.48 46.87 42.76 62.77 50.94 50.84 59.30 54.51

*See Table IV-A for explanation. 
QUARTERLY 2023 VOLUME 17, NUMBER 4

30 

Table VI-B. Loan Performance, FDIC-Insured Community Banks

All Community 

Banks

Geographic Regions*

September 30, 2023 New York Atlanta Chicago Kansas City Dallas San Francisco

Percent of Loans 30-89 Days Past Due

All loans secured by real estate 0.32 0.27 0.28 0.36 0.31 0.42 0.23

 Construction and development 0.40 0.21 0.18 0.46 0.60 0.43 0.41

 Nonfarm nonresidential 0.23 0.25 0.15 0.29 0.20 0.26 0.19

 Multifamily residential real estate 0.14 0.09 0.14 0.16 0.10 0.39 0.12

 Home equity loans 0.43 0.50 0.47 0.37 0.42 0.51 0.33

 Other 1-4 family residential 0.44 0.34 0.49 0.51 0.42 0.64 0.26

Commercial and industrial loans 0.42 0.33 0.55 0.32 0.45 0.52 0.44

Loans to individuals 1.65 2.11 1.14 0.76 1.25 2.71 1.67

 Credit card loans 3.78 2.36 1.58 1.31 5.99 1.64 3.31

 Other loans to individuals 1.56 2.10 1.14 0.75 0.88 2.73 1.47

All other loans and leases (including farm) 0.27 0.22 0.40 0.19 0.26 0.38 0.29

Total loans and leases 0.38 0.34 0.35 0.36 0.36 0.52 0.32

Percent of Loans Noncurrent

All loans secured by real estate 0.47 0.55 0.33 0.50 0.40 0.51 0.38

 Construction and development 0.40 0.66 0.15 0.33 0.45 0.26 0.69

 Nonfarm nonresidential 0.48 0.61 0.32 0.59 0.41 0.53 0.23

 Multifamily residential real estate 0.25 0.29 0.34 0.27 0.25 0.18 0.12

 Home equity loans 0.47 0.55 0.23 0.33 0.37 0.34 0.99

 Other 1-4 family residential 0.49 0.56 0.38 0.53 0.35 0.57 0.43

Commercial and industrial loans 0.77 0.89 0.66 0.64 0.61 0.99 0.86

Loans to individuals 0.58 0.47 0.36 0.25 0.46 1.24 0.70

 Credit card loans 2.22 1.63 0.47 0.37 2.35 1.64 3.12

 Other loans to individuals 0.51 0.45 0.35 0.25 0.32 1.23 0.41

All other loans and leases (including farm) 0.51 0.26 0.39 0.39 0.39 0.82 1.34

Total loans and leases 0.51 0.58 0.37 0.51 0.43 0.62 0.48

Percent of Loans Charged-Off (net, YTD)

All loans secured by real estate 0.01 0.02 0.00 0.02 0.01 0.02 0.00

 Construction and development 0.00 0.00 -0.02 -0.01 0.00 0.00 0.00

 Nonfarm nonresidential 0.03 0.05 0.00 0.03 0.01 0.04 0.00

 Multifamily residential real estate 0.01 0.01 0.00 0.03 0.00 0.02 0.00

 Home equity loans 0.01 -0.01 -0.01 0.00 0.00 0.01 0.08

 Other 1-4 family residential 0.00 0.00 0.00 0.01 0.00 0.01 -0.01

Commercial and industrial loans 0.22 0.27 0.34 0.12 0.15 0.24 0.31

Loans to individuals 1.24 0.99 1.03 0.34 1.52 1.28 2.91

 Credit card loans 8.88 4.45 1.91 1.32 15.26 1.50 8.03

 Other loans to individuals 0.93 0.91 1.02 0.33 0.41 1.28 2.36

All other loans and leases (including farm) 0.12 0.13 0.50 0.14 0.02 0.13 0.37

Total loans and leases 0.09 0.08 0.09 0.05 0.09 0.10 0.19

Loans Outstanding (in billions)

All real estate loans $1,445.8 $378.4 $140.8 $265.0 $255.2 $268.0 $138.5

 Construction and development 155.5 27.3 17.1 25.1 28.5 45.4 12.1

 Nonfarm nonresidential 568.1 137.6 62.3 102.1 87.9 111.1 67.0

 Multifamily residential real estate 139.4 56.6 7.5 28.7 19.3 10.1 17.2

 Home equity loans 45.9 11.1 5.6 11.2 6.0 5.7 6.3

 Other 1-4 family residential 450.0 143.5 43.5 78.4 73.6 79.1 31.9

Commercial and industrial loans 234.9 44.8 20.2 50.3 52.6 47.1 19.9

Loans to individuals 73.8 16.4 7.7 14.1 14.1 13.4 8.2

 Credit card loans 2.9 0.4 0.1 0.2 1.0 0.2 0.9

 Other loans to individuals 70.9 16.0 7.5 13.9 13.0 13.1 7.3

All other loans and leases (including farm) 95.0 10.9 3.8 21.2 36.8 15.7 6.4

Total loans and leases (plus unearned income) 1,849.4 450.5 172.5 350.5 358.7 344.2 173.0

Memo: Unfunded Commitments (in millions)

Total Unfunded Commitments 410,602 87,259 34,934 83,832 88,489 72,698 43,390

 Construction and development: 1-4 family 

 residential 34,442 5,766 4,691 4,625 5,541 10,980 2,840

 Construction and development: CRE and other 93,658 20,466 8,606 18,580 16,982 21,437 7,586

 Commercial and industrial 126,832 29,918 9,369 28,041 25,643 20,502 13,359

* See Table IV-A for explanation.

Note: Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.
QUARTERLY 2023 VOLUME 17, NUMBER 4

31 

INSURANCE FUND INDICATORS

Deposit Insurance Fund Increases by $2.4 Billion

DIF Reserve Ratio Rises 2 Basis Points, Ends Third Quarter at 1.13 Percent

One Institution Failed During the Third Quarter

During the third quarter, the Deposit Insurance Fund (DIF) balance 

increased by $2.4 billion to $119.3 billion. The rise in the DIF was 

primarily driven by assessment income of $3.2 billion. Net investment 

income, which includes interest income and the effect of unrealized and 

realized gains and losses, added $0.9 billion. These gains were partially 

offset by provisions for insurance losses of $1.2 billion and operating 

expenses of $0.5 billion. One insured institution failed during the third 

quarter at an estimated cost to the Fund of $54.2 million.

The deposit insurance assessment base—average consolidated total 

assets minus average tangible equity—decreased by 0.6 percent in the 

third quarter and fell by 1.5 percent over the last 12 months.1,2 

Total estimated insured deposits increased by 0.1 percent in the third 

quarter. Year-over-year insured deposit growth was 4.1 percent. The 

DIF reserve ratio (the fund balance as a percent of insured deposits) was 

1.13 percent on September 30, 2023, up 2 basis points from the previous 

quarter and 10 basis points lower than one year ago.

The FDIC adopted a DIF Restoration Plan on September 15, 2020, that 

would return the reserve ratio to the statutory minimum of 1.35 percent 

by September 2028, as required by law. Based on FDIC projections, the 

reserve ratio remains on track to reach 1.35 percent by the statutory 

deadline. The FDIC will continue to monitor factors affecting the reserve 

ratio, including, but not limited to, insured deposit growth and potential 

losses due to bank failures and related reserves, as required under the 

current Restoration Plan.

Author:

Charles James

Senior Financial Economist

Division of Insurance and Research

1 There are additional adjustments to the assessment base for banker’s banks and custodial banks.

2 Figures for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition to insured commercial banks and savings institutions.
QUARTERLY 2023 VOLUME 17, NUMBER 4

32 

Table I-C. Insurance Fund Balances and Selected Indicators* 

 Deposit Insurance Fund**

(dollar figures in millions)

 3rd

Quarter 

2023

2nd 

Quarter 

2023

1st 

Quarter 

2023

 4th 

Quarter 

2022

 3rd 

Quarter 

2022

2nd 

Quarter

 2022

 1st 

Quarter 

2022

 4th 

Quarter 

2021

 3rd 

Quarter 

2021

 2nd

Quarter 

2021

 1st 

Quarter 

2021

 4th 

Quarter 

2020

 3rd 

Quarter 

2020

Beginning Fund Balance $116,968 $116,071 $128,218 $125,457 $124,458 $123,039 $123,141 $121,935 $120,547 $119,362 $117,897 $116,434 $114,651

Changes in Fund Balance:

Assessments earned 3,225 3,127 3,306 2,142 2,145 2,086 1,938 1,967 1,662 1,589 1,862 1,884 2,047

Interest earned on investment 

securities 828 673 661 498 332 225 191 197 221 251 284 330 392

Realized gain on sale of 

investments -272 96 -1,666 0 0 0 0 0 0 0 0 0 0

Operating expenses 517 497 508 515 456 460 453 475 448 466 454 470 451

Provision for insurance losses 1,237 2,033 16,402 -48 -49 -86 100 8 -53 -42 -57 -48 -74

All other income, net of 

expenses 4 3 12 114 6 29 8 61 65 2 1 9 5

Unrealized gain/(loss) on 

available-for-sale securities*** 340 -472 2,450 474 -1,077 -547 -1,686 -536 -165 -233 -285 -338 -284

Total fund balance change 2,371 897 -12,147 2,761 999 1,419 -102 1,206 1,388 1,185 1,465 1,463 1,783

Ending Fund Balance 119,339 116,968 116,071 128,218 125,457 124,458 123,039 123,141 121,935 120,547 119,362 117,897 116,434

Percent change from four 

quarters earlier -4.88 -6.02 -5.66 4.12 2.89 3.24 3.08 4.45 4.72 5.14 5.44 6.84 6.88

Reserve Ratio (%) 1.13 1.11 1.11 1.25 1.23 1.23 1.21 1.24 1.25 1.27 1.26 1.30 1.31

Estimated Insured Deposits 10,592,562 10,584,047 10,496,488 10,265,997 10,175,818 10,107,936 10,168,562 9,923,221 9,756,766 9,482,542 9,507,232 9,103,253 8,900,869

 Percent change from four 

quarters earlier 4.10 4.71 3.22 3.45 4.29 6.60 6.96 9.01 9.62 7.56 16.50 16.56 15.15

 Percent of Total Deposit 

Liabilites After Exclusions 59.81 59.70 58.90 56.30 55.27 54.49 53.87 53.09 53.77 53.64 54.52 54.24 55.01

Estimated Uninsured 

Deposits 7,118,197 7,144,438 7,325,362 7,969,404 8,235,821 8,442,076 8,706,176 8,768,085 8,390,253 8,195,454 7,929,267 7,681,044 7,280,443

Percent change from four 

quarters earlier -13.57 -15.37 -15.86 -9.11 -1.84 3.01 9.80 14.15 15.24 14.00 19.83 30.77 27.68

Percent of Total Deposit 

Liabilites After Exclusions 40.19 40.30 41.10 43.70 44.73 45.51 46.13 46.91 46.23 46.36 45.48 45.76 44.99

Total Deposit Liabilities 

After Exclusions  17,710,759 17,728,485 17,821,850 18,235,401 18,411,639 18,550,012 18,874,738 18,691,306 18,147,019 17,677,996 17,436,499 16,784,297 16,181,312

Percent change from four 

quarters earlier -3.81 -4.43 -5.58 -2.44 1.46 4.93 8.25 11.36 12.15 10.45 17.99 22.66 20.47

Assessment Base** *** 20,715,464 20,847,033 20,729,563 21,012,846 21,027,434 21,059,827 20,942,706 20,683,058 20,128,423 19,776,250 19,310,349 18,904,749 18,570,323

Percent change from four 

quarters earlier -1.48 -1.01 -1.02 1.59 4.47 6.49 8.45 9.41 8.39 8.29 16.43 16.20 15.90

Number of Institutions 

Reporting 4,623 4,654 4,681 4,715 4,755 4,780 4,805 4,848 4,923 4,959 4,987 5,011 5,042

Table II-C. Problem Institutions and Failed Institutions

(dollar figures in millions) 2023****** 2022****** 2022 2021 2020 2019 2018 2017

Problem Institutions

 Number of institutions 44 42 39 44 56 51 60 95

 Total assets******* $53,514 $163,809 $47,463 $170,172 $55,830 $46,190 $48,481 $13,939

Failed Institutions

 Number of institutions 4 0 0 0 4 4 0 8

 Total assets******** $532,168 $0 $0 $0 $455 $209 $0 $5,082

* Includes insured branches of foreign banks (IBAs) and any revisions to prior quarter data.

** Quarterly financial statement results are unaudited.

*** Includes unrealized postretirement benefit gain (loss).

  Does not equal total deposits and domestic office deposits in the tables above due to adjustments to align with the determination of deposit insurance coverage in the event 

of a bank failure.

** *** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks.

****** Through September 30.

******* Assets shown are what were on record as of the last day of the quarter.

******** Total assets are based on final Call Reports submitted by failed institutions.
QUARTERLY 2023 VOLUME 17, NUMBER 4

33 

Deposit Insurance Fund Balance 

and Insured Deposits

($ Millions)

DIF 

Balance

DIF-Insured 

Deposits

9/20 $116,434 $8,900,869

12/20 117,897 9,103,253

3/21 119,362 9,507,232

6/21 120,547 9,482,542

9/21 121,935 9,756,766

12/21 123,141 9,923,221

3/22 123,039 10,168,562

6/22 124,458 10,107,936

9/22 125,457 10,175,818

12/22 128,218 10,265,997

3/23 116,071 10,496,488

6/23 116,968 10,584,047

9/23 119,339 10,592,562

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

(dollar figures in millions)

September 30, 2023

Number of

Institutions

Total

Assets

Domestic

Deposits*

Est. Insured

Deposits

Commercial Banks and Savings Institutions

 FDIC-Insured Commercial Banks 4,049 $22,200,418 $16,185,439 $9,735,461 

 FDIC-Supervised 2,670 3,863,040 3,091,063 2,112,328 

 OCC-Supervised 710 14,887,014 10,558,747 6,192,739 

 Federal Reserve-Supervised 669 3,450,364 2,535,629 1,430,394 

 FDIC-Insured Savings Institutions 565 1,208,421 972,849 809,368 

 OCC-Supervised 246 518,400 410,005 348,599 

 FDIC-Supervised 282 307,261 243,418 183,791 

 Federal Reserve-Supervised 37 382,760 319,426 276,977 

Total Commercial Banks and Savings Institutions 4,614 23,408,839 17,158,289 10,544,829 

Other FDIC-Insured Institutions

 U.S. Branches of Foreign Banks 9 94,897 55,491 47,734 

Total FDIC-Insured Institutions 4,623 23,503,736 17,213,780 10,592,562 

* Excludes $1.4 trillion in foreign office deposits, which are not FDIC insured.

Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range 

Quarter Ending June 30, 2023 (dollar figures in billions)

Annual Rate in Basis Points

Number of

Institutions

Percent of Total

Institutions

Amount of

Assessment Base

Percent of Total

Assessment Base

2.50 - 5.00 2,858 61.4 $6,459.8 30.99

5.01 - 8.00 1,222 26.3 12,424.0 59.60

8.01 - 12.00 459 9.9 1,657.0 7.95

12.01 - 17.00 57 1.2 178.0 0.85

>17.00 58 1.2 128.2 0.62

DIF Reserve Ratios

Percent of Insured Deposits

1.31 1.30 1.26 1.27 1.25 1.24 1.21 1.23 1.23 1.25

1.11 1.11 1.13

9/20 12/20 3/21 6/21 9/21 12/21 3/22 6/22 9/22 12/22 3/23 6/23 9/23
QUARTERLY 2023 VOLUME 17, NUMBER 4

34 

NOTES TO USERS

This publication contains financial data and other information for depository 

institutions insured by the Federal Deposit Insurance Corporation (FDIC). These 

notes are an integral part of this publication and provide information regarding 

the comparability of source data and reporting differences over time.

TABLES I-A THROUGH VIII-A. The information presented in Tables I-A through VIII-A of the FDIC Quarterly 

Banking Profile is aggregated for all FDIC-insured Call Report filers, both 

commercial banks and savings institutions. Some tables are arrayed by 

groups of FDIC-insured institutions based on predominant types of asset 

concentration, while other tables aggregate institutions by asset size and 

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

indicators, including aggregate condition and income data, performance ratios, 

condition ratios, and structural changes, as well as past due, noncurrent, and 

charge-off information for loans outstanding and other assets.

TABLES I-B THROUGH VI-B. The information presented in Tables I-B through VI-B is aggregated for 

all FDIC-insured commercial banks and savings institutions meeting the 

criteria for community banks that were developed for the FDIC’s Community 

Banking Study, published in December, 2012: https://www.fdic.gov/resources/

community-banking/cbi-study.html. 

The determination of which insured institutions are considered community 

banks is based on five steps.

The first step in defining a community bank is to aggregate all charter-level 

data reported under each holding company into a single banking organization. 

This aggregation applies both to balance-sheet measures and the number 

and location of banking offices. Under the FDIC definition, if the banking 

organization is designated as a community bank, every charter reporting under 

that organization is also considered a community bank when working with data 

at the charter level. 

The second step is to exclude any banking organization where more than 50 

percent of total assets are held in certain specialty banking charters, including: 

credit card specialists, consumer nonbank banks, industrial loan companies, trust 

companies, bankers’ banks, and banks holding 10 percent or more of total assets 

in foreign offices.

Once the specialty organizations are removed, the third step involves including 

organizations that engage in basic banking activities as measured by the total 

loans-to-assets ratio (greater than 33 percent) and the ratio of core deposits 

to assets (greater than 50 percent). Core deposits are defined as non-brokered 

deposits in domestic offices. Analysis of the underlying data shows that these 

thresholds establish meaningful levels of basic lending and deposit gathering 

and still allow for a degree of diversity in how individual banks construct their 

balance sheets.

The fourth step includes organizations that operate within a limited geographic 

scope. This limitation of scope is used as a proxy measure for a bank’s 

relationship approach to banking. Banks that operate within a limited market 

area have more ease in managing relationships at a personal level. Under this 

step, four criteria are applied to each banking organization. They include both 

a minimum and maximum number of total banking offices, a maximum level 

of deposits for any one office, and location-based criteria. The limits on the 
QUARTERLY 2023 VOLUME 17, NUMBER 4

35 

number of and deposits per office are adjusted upward quarterly. For banking 

offices, banks must have more than one office, and the maximum number of 

offices is 40 in 1985 and reached 104 in 2023. The maximum level of deposits 

for any one office is $1.25 billion in deposits in 1985 and reached $10.28 billion 

in deposits in 2023. The remaining geographic limitations are also based on 

maximums for the number of states (fixed at 3) and large metropolitan areas 

(fixed at 2) in which the organization maintains offices. Branch office data are 

based on the most recent data from the annual June 30 Summary of Deposits 

Survey that are available at the time of publication. 

Finally, the definition establishes an asset-size limit, also adjusted upward 

quarterly and below which the limits on banking activities and geographic 

scope are waived. The asset-size limit is $250 million in 1985 and reached 

$2.06 billion in 2023. This final step acknowledges the fact that most of those 

small banks that are not excluded as specialty banks meet the requirements for 

banking activities and geographic limits in any event.

SUMMARY OF FDIC RESEARCH 

DEFINITION OF COMMUNITY 

BANKING ORGANIZATIONS

Community banks are designated at the level of the banking organization.

(All charters under designated holding companies are considered community 

banking charters.)

Exclude: Any organization with:

— No loans or no core deposits

— Assets held in foreign branches ≥ 10% of total assets

— More than 50% of assets in certain specialty banks, including:

• credit card specialists

• consumer nonbank banks1

• industrial loan companies

• trust companies

• bankers’ banks

Include: All remaining banking organizations with:

— Total assets < indexed size threshold 2

— Total assets ≥ indexed size threshold, where:

• Loan to assets > 33%

• Core deposits to assets > 50%

• More than 1 office but no more than the indexed maximum number of 

offices.3

• Number of large MSAs with offices ≤ 2

• Number of states with offices ≤ 3

• No single office with deposits > indexed maximum branch deposit size.4

TABLES I-C THROUGH IV-C. A separate set of tables (Tables I-C through IV-C) provides comparative 

quarterly data related to the Deposit Insurance Fund (DIF), problem 

institutions, failed institutions, estimated FDIC-insured deposits, as well as 

1 Consumer nonbank banks are financial institutions with limited charters that can make commercial loans or take deposits, but not both.

2 Asset size threshold indexed to equal $250 million in 1985 and $2.06 billion in 2023.

3 Maximum number of offices indexed to equal 40 in 1985 and 104 in 2023.

4 Maximum branch deposit size indexed to equal $1.25 billion in 1985 and $10.28 billion in 2023.
QUARTERLY 2023 VOLUME 17, NUMBER 4

36 

assessment rate information. Depository institutions that are not insured 

by the FDIC through the DIF are not included in the FDIC Quarterly Banking 

Profile. U.S. branches of institutions headquartered in foreign countries and 

non-deposit trust companies are not included unless otherwise indicated. 

Efforts are made to obtain financial reports for all active institutions. However, 

in some cases, final financial reports are not available for institutions that have 

closed or converted their charters.

DATA SOURCES The financial information appearing in this publication is obtained primarily 

from the Federal Financial Institutions Examination Council (FFIEC) 

Consolidated Reports of Condition and Income (Call Reports) and the OTS Thrift 

Financial Reports (TFR) submitted by all FDIC-insured depository institutions. 

(TFR filers began filing Call Reports effective with the quarter ending March 

31, 2012.) This information is stored on and retrieved from the FDIC’s Research 

Information System (RIS) database.

COMPUTATION METHODOLOGY Parent institutions are required to file consolidated reports, while their 

subsidiary financial institutions are still required to file separate reports. 

Data from subsidiary institution reports are included in the Quarterly Banking 

Profile tables, which can lead to double-counting. No adjustments are made for 

any double-counting of subsidiary data. Additionally, certain adjustments are 

made to the OTS Thrift Financial Reports to provide closer conformance with the 

reporting and accounting requirements of the FFIEC Call Reports. (TFR filers 

began filing Call Reports effective with the quarter ending March 31, 2012.)

All condition and performance ratios represent weighted averages, which is 

the sum of the individual numerator values divided by the sum of individual 

denominator values. All asset and liability figures used in calculating 

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

by the total number of periods). For “pooling-of-interest” mergers, the assets 

of the acquired institution(s) are included in average assets, since the yearto-date income includes the results of all merged institutions. No adjustments 

are made for “purchase accounting” mergers. Growth rates represent the 

percentage change over a 12-month period in totals for institutions in the 

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

bank subgroup, growth rates will reflect changes over time in the number and 

identities of institutions designated as community banks, as well as changes 

in the assets and liabilities, and income and expenses of group members. 

Unless indicated otherwise, growth rates are not adjusted for mergers or 

other changes in the composition of the community bank subgroup. When 

community bank growth rates are adjusted for mergers, prior period balances 

used in the calculations represent totals for the current group of community 

bank reporters, plus prior period amounts for any institutions that were 

subsequently merged into current community banks.

All data are collected and presented based on the location of each reporting 

institution’s main office. Reported data may include assets and liabilities 

located outside of the reporting institution’s home state. In addition, 

institutions may relocate across state lines or change their charters, resulting 

in an inter-regional or inter-industry migration; institutions can move their 

home offices between regions, savings institutions can convert to commercial 

banks, or commercial banks may convert to savings institutions.
QUARTERLY 2023 VOLUME 17, NUMBER 4

37 

ACCOUNTING CHANGES Financial accounting pronouncements by the Financial Accounting Standards 

Board (FASB) can result in changes in an individual bank’s accounting policies 

and in the Call Reports they submit. Such accounting changes can affect the 

aggregate amounts presented in the QBP for the current period and the periodto-period comparability of such financial data. 

The current quarter’s Financial Institution Letter (FIL) and related Call Report 

supplemental instructions can provide additional explanation to the QBP reader 

beyond any material accounting changes discussed in the QBP analysis.

https://www.fdic.gov/news/financial-institution-letters/2023/fil23054.html

https://www.fdic.gov/resources/bankers/call-reports/index.html

Further information on changes in financial statement presentation, income 

recognition and disclosure is available from the FASB. 

https://www.fasb.org/page/index?pageId=standards/index.html

DEFINITIONS 

(IN ALPHABETICAL ORDER)

All other assets – total cash, balances due from depository institutions, 

premises, fixed assets, direct investments in real estate, investment in 

unconsolidated subsidiaries, customers’ liability on acceptances outstanding, 

assets held in trading accounts, federal funds sold, securities purchased 

with agreements to resell, fair market value of derivatives, prepaid deposit 

insurance assessments, and other assets.

All other liabilities – bank’s liability on acceptances, limited-life preferred 

stock, allowance for estimated off-balance-sheet credit losses, fair market 

value of derivatives, and other liabilities.

Assessment base – Effective April 1, 2011, the deposit insurance assessment 

base changed to “average consolidated total assets minus average tangible 

equity” with an additional adjustment to the assessment base for banker’s 

banks and custodial banks. Previously, the assessment base consisted of 

deposit liabilities after exclusions.

Assessment rate schedule – Initial base assessment rates for small institutions 

(except new institutions) are based on a combination of financial ratios and 

CAMELS component ratings. Initial rates for large institutions—generally 

those with at least $10 billion in assets—are also based on CAMELS component 

ratings and certain financial measures combined into two scorecards—one for 

most large institutions and another for the remaining very large institutions 

that are structurally and operationally complex or that pose unique challenges 

and risks in case of failure (highly complex institutions). The FDIC may take 

additional information into account to make a limited adjustment to a large 

institution’s scorecard results, which are used to determine a large institution’s 

initial base assessment rate.

Initial rates for small institutions are subject to minimums and maximums 

based on an institution’s CAMELS composite rating.

The current assessment rate schedule became effective January 1, 2023. Under 

the current schedule, initial base assessment rates range from 5 to 32 basis 

points. An institution’s total base assessment rate may differ from its initial 

rate due to three possible adjustments: (1) Unsecured Debt Adjustment: An 

institution’s rate may decrease by up to 5 basis points for unsecured debt. 

The unsecured debt adjustment cannot exceed the lesser of 5 basis points or 

50 percent of an institution’s initial base assessment rate (IBAR). Thus, for 

example, an institution with an IBAR of 5 basis points would have a maximum 
QUARTERLY 2023 VOLUME 17, NUMBER 4

38 

unsecured debt adjustment of 2.5 basis points and could not have a total base 

assessment rate lower than 2.5 basis points. (2) Depository Institution Debt 

Adjustment: For institutions that hold long-term unsecured debt issued by 

another insured depository institution, a 50 basis point charge is applied to the 

amount of such debt held in excess of 3 percent of an institution’s Tier 1 capital. 

(3) Brokered Deposit Adjustment: Rates for large institutions that are not well 

capitalized or do not have a composite CAMELS rating of 1 or 2 may increase 

(not to exceed 10 basis points) if their brokered deposits exceed 10 percent of 

domestic deposits.

The assessment rate schedule effective January 1, 2023, is shown in the 

following table:

Total Base Assessment Rates*

Established Small Banks Large and 

Highly Complex 

Institutions

CAMELS Composite

1 or 2 3 4 or 5

Initial Base Assessment Rate 5 to 18 8 to 32 18 to 32 5 to 32

Unsecured Debt Adjustment -5 to 0 -5 to 0 -5 to 0 -5 to 0

Brokered Deposit Adjustment N/A N/A N/A 0 to 10

Total Base Assessment Rate 2.5 to 18 4 to 32 13 to 32 2.5 to 42

* All amounts for all categories are in basis points annually. Total base rates that are not the minimum or 

maximum rate will vary between these rates. Total base assessment rates do not include the depository 

institution debt adjustment.

Each institution is assigned a risk-based rate for a quarterly assessment 

period near the end of the quarter following the assessment period. Payment 

is generally due on the 30th day of the last month of the quarter following the 

assessment period. Supervisory rating changes are effective for assessment 

purposes as of the examination transmittal date.

Assets securitized and sold – total outstanding principal balance of assets 

securitized and sold with servicing retained or other seller-provided credit 

enhancements.

Capital Purchase Program (CPP) – As announced in October 2008 under the 

TARP, the Treasury Department purchase of noncumulative perpetual preferred 

stock and related warrants that is treated as Tier 1 capital for regulatory capital 

purposes is included in “Total equity capital.” Such warrants to purchase 

common stock or noncumulative preferred stock issued by publicly-traded 

banks are reflected as well in “Surplus.” Warrants to purchase common stock or 

noncumulative preferred stock of not-publicly-traded bank stock are classified 

in a bank’s balance sheet as “Other liabilities.”

Common equity Tier 1 capital ratio – ratio of common equity Tier 1 capital 

to risk-weighted assets. Common equity Tier 1 capital includes common 

stock instruments and related surplus, retained earnings, accumulated other 

comprehensive income (AOCI), and limited amounts of common equity Tier 1 

minority interest, minus applicable regulatory adjustments and deductions. 

Items that are fully deducted from common equity Tier 1 capital include 

goodwill, other intangible assets (excluding mortgage servicing assets) and 

certain deferred tax assets; items that are subject to limits in common equity 

Tier 1 capital include mortgage servicing assets, eligible deferred tax assets, 

and certain significant investments. Beginning March 2020, this ratio does not 
QUARTERLY 2023 VOLUME 17, NUMBER 4

39 

include institutions that have a Community Bank Leverage Ratio election in 

effect at the report date.

Construction and development loans – includes loans for all property types 

under construction, as well as loans for land acquisition and development.

Core capital – common equity capital plus noncumulative perpetual preferred 

stock plus minority interest in consolidated subsidiaries, less goodwill and 

other ineligible intangible assets. The amount of eligible intangibles (including 

servicing rights) included in core capital is limited in accordance with 

supervisory capital regulations.

Cost of funding earning assets – total interest expense paid on deposits and 

other borrowed money as a percentage of average earning assets.

Credit enhancements – techniques whereby a company attempts to reduce 

the credit risk of its obligations. Credit enhancement may be provided by a 

third party (external credit enhancement) or by the originator (internal credit 

enhancement), and more than one type of enhancement may be associated with 

a given issuance.

Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings Association (SAIF) 

Insurance Funds were merged in 2006 by the Federal Deposit Insurance Reform 

Act to form the DIF.

Deposits liabilities after exclusions – amount equal to gross total deposit 

liabilities meeting the statutory definition of a deposit in Section 3(l) of 

the Federal Deposit Insurance Act, before deducting allowable exclusions. 

Deposit liabilities after exclusions may differ from amounts reported for total 

deposits or total domestic deposits due to adjustments made to align with the 

determination of deposit insurance coverage in the event of a bank failure, 

including reporting based on an unconsolidated single FDIC certificate number 

basis.

Derivatives notional amount – the notional, or contractual, amounts of 

derivatives represent the level of involvement in the types of derivatives 

transactions and are not a quantification of market risk or credit risk. Notional 

amounts represent the amounts used to calculate contractual cash flows to be 

exchanged.

Derivatives credit equivalent amount – the fair value of the derivative plus an 

additional amount for potential future credit exposure based on the notional 

amount, the remaining maturity and type of the contract.

Derivatives transaction types:

Futures and forward contracts – contracts in which the buyer agrees to 

purchase and the seller agrees to sell, at a specified future date, a specific 

quantity of an underlying variable or index at a specified price or yield. These 

contracts exist for a variety of variables or indices, (traditional agricultural 

or physical commodities, as well as currencies and interest rates). Futures 

contracts are standardized and are traded on organized exchanges which 

set limits on counterparty credit exposure. Forward contracts do not have 

standardized terms and are traded over the counter.

Option contracts – contracts in which the buyer acquires the right to buy 

from or sell to another party some specified amount of an underlying 

variable or index at a stated price (strike price) during a period or on a 

specified future date, in return for compensation (such as a fee or premium). 
QUARTERLY 2023 VOLUME 17, NUMBER 4

40 

The seller is obligated to purchase or sell the variable or index at the 

discretion of the buyer of the contract.

Swaps – obligations between two parties to exchange a series of cash flows 

at periodic intervals (settlement dates), for a specified period. The cash 

flows of a swap are either fixed, or determined for each settlement date by 

multiplying the quantity (notional principal) of the underlying variable or 

index by specified reference rates or prices. Except for currency swaps, the 

notional principal is used to calculate each payment but is not exchanged.

Derivatives underlying risk exposure – the potential exposure characterized 

by the level of banks’ concentration in particular underlying instruments, in 

general. Exposure can result from market risk, credit risk, and operational risk, 

as well as, interest rate risk.

Domestic deposits to total assets – total domestic office deposits as a percent 

of total assets on a consolidated basis.

Earning assets – all loans and other investments that earn interest or dividend 

income.

Efficiency ratio – noninterest expense less amortization of intangible assets as 

a percent of net interest income plus noninterest income. This ratio measures 

the proportion of net operating revenues that are absorbed by overhead 

expenses, so that a lower value indicates greater efficiency.

Estimated insured deposits – In general, insured deposits are total deposit 

liabilities after exclusions minus estimated uninsured deposits. Beginning 

September 30, 2009, insured deposits reflect an increase in the FDIC’s standard 

maximum deposit insurance amount from $100,000 to $250,000. From 

December 31, 2010, through December 31, 2012, insured deposits also include all 

funds held in noninterest-bearing transaction accounts, without limit.

Estimated uninsured deposits – In general, institutions with $1 billion or 

more in total assets report estimated uninsured deposits in domestic offices 

of the bank and in insured branches in Puerto Rico and U.S. territories and 

possessions, including related interest accrued and unpaid. For institutions 

that do not report estimated uninsured deposits, the FDIC calculates this 

amount as the amount of deposit and retirement accounts with balances greater 

than the standard maximum deposit insurance amount (SMDIA), currently 

$250,000, minus the portion that is insured. The amount that is insured is 

estimated by multiplying the number of accounts with balances greater than 

the SMDIA, as reported on the Call Report, by the SMDIA. For example, under 

the current SMDIA, if an institution reports a number and amount of deposit 

and retirement accounts with balances greater than $250,000 of 1,000 and $500 

million, respectively, estimated uninsured deposits as calculated by the FDIC 

would equal $250 million ($500,000,000 – 1,000 * $250,000).

Failed/assisted institutions – An institution fails when regulators take 

control of the institution, placing the assets and liabilities into a bridge bank, 

conservatorship, receivership, or another healthy institution. This action may 

require the FDIC to provide funds to cover losses. An institution is defined as 

“assisted” when the institution remains open and receives assistance in order 

to continue operating.

Fair Value – the valuation of various assets and liabilities on the balance 

sheet—including trading assets and liabilities, available-for-sale securities, 

loans held for sale, assets and liabilities accounted for under the fair value 

option, and foreclosed assets—involves the use of fair values. During periods of 
QUARTERLY 2023 VOLUME 17, NUMBER 4

41 

market stress, the fair values of some financial instruments and nonfinancial 

assets may decline.

FHLB advances – all borrowings by FDIC-insured institutions from the Federal 

Home Loan Bank System (FHLB), as reported by Call Report filers, and by TFR 

filers prior to March 31, 2012.

Goodwill and other intangibles – Intangible assets include servicing rights, 

purchased credit card relationships, and other identifiable intangible assets. 

Goodwill is the excess of the purchase price over the fair market value of the 

net assets acquired, less subsequent impairment adjustments. Other intangible 

assets are recorded at fair value, less subsequent quarterly amortization and 

impairment adjustments.

Liquidity ratio – liquid assets to total assets. Liquid assets include cash, federal 

funds sold, securities purchased under agreements to resell, and securities 

(including unrealized gains/losses on securities) less pledged securities.

Loans secured by real estate – includes home equity loans, junior liens secured 

by 1-4 family residential properties, and all other loans secured by real estate.

Loans to individuals – includes outstanding credit card balances and other 

secured and unsecured consumer loans.

Long-term assets (5+ years) – loans and debt securities with remaining 

maturities or repricing intervals of over five years.

Maximum credit exposure – the maximum contractual credit exposure 

remaining under recourse arrangements and other seller-provided credit 

enhancements provided by the reporting bank to securitizations.

Mortgage-backed securities – certificates of participation in pools of 

residential mortgages and collateralized mortgage obligations issued or 

guaranteed by government-sponsored or private enterprises. Also, see 

“Securities,” below.

Net charge-offs – total loans and leases charged off (removed from balance 

sheet because of uncollectability), less amounts recovered on loans and leases 

previously charged off.

Net interest margin – the difference between interest and dividends earned 

on interest-bearing assets and interest paid to depositors and other creditors, 

expressed as a percentage of average earning assets. No adjustments are made 

for interest income that is tax exempt.

Net loans to total assets – loans and lease financing receivables, net of 

unearned income, allowance and reserves, as a percent of total assets on a 

consolidated basis.

Net operating income – income excluding discretionary transactions such as 

gains (or losses) on the sale of investment securities and extraordinary items. 

Income taxes subtracted from operating income have been adjusted to exclude 

the portion applicable to securities gains (or losses).

Noncurrent assets – the sum of loans, leases, debt securities, and other assets 

that are 90 days or more past due, or in nonaccrual status.

Noncurrent loans & leases – the sum of loans and leases 90 days or more past 

due, and loans and leases in nonaccrual status.
QUARTERLY 2023 VOLUME 17, NUMBER 4

42 

Number of institutions reporting – the number of institutions that actually 

filed a financial report.

New reporters – insured institutions filing quarterly financial reports for the 

first time.

Other borrowed funds – federal funds purchased, securities sold with 

agreements to repurchase, demand notes issued to the U.S. Treasury, FHLB 

advances, other borrowed money, mortgage indebtedness, obligations under 

capitalized leases and trading liabilities, less revaluation losses on assets held 

in trading accounts.

Other real estate owned – primarily foreclosed property. Direct and indirect 

investments in real estate ventures are excluded. The amount is reflected net 

of valuation allowances. For institutions that filed a Thrift Financial Report

(TFR), the valuation allowance subtracted also includes allowances for other 

repossessed assets. Also, for TFR filers the components of other real estate 

owned are reported gross of valuation allowances. (TFR filers began filing Call 

Reports effective with the quarter ending March 31, 2012.)

Percent of institutions with earnings gains – the percent of institutions that 

increased their net income (or decreased their losses) compared to the same 

period a year earlier.

“Problem” institutions – Federal regulators assign a composite rating to each 

financial institution, based upon an evaluation of financial and operational 

criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory 

concern. “Problem” institutions are those institutions with financial, 

operational, or managerial weaknesses that threaten their continued financial 

viability. Depending upon the degree of risk and supervisory concern, they are 

rated either a “4” or “5.” The number and assets of “problem” institutions are 

based on FDIC composite ratings. Prior to March 31, 2008, for institutions whose 

primary federal regulator was the OTS, the OTS composite rating was used.

Recourse – an arrangement in which a bank retains, in form or in substance, 

any credit risk directly or indirectly associated with an asset it has sold (in 

accordance with generally accepted accounting principles) that exceeds a pro 

rata share of the bank’s claim on the asset. If a bank has no claim on an asset it 

has sold, then the retention of any credit risk is recourse.

Reserves for losses – the allowance for loan and lease losses on a consolidated 

basis.

Restructured loans and leases – loan and lease financing receivables with 

terms restructured from the original contract. Excludes restructured loans and 

leases that are not in compliance with the modified terms.

Retained earnings – net income less cash dividends on common and preferred 

stock for the reporting period.

Return on assets – bank net income (including gains or losses on securities and 

extraordinary items) as a percentage of average total (consolidated) assets. The 

basic yardstick of bank profitability.

Return on equity – bank net income (including gains or losses on securities and 

extraordinary items) as a percentage of average total equity capital.
QUARTERLY 2023 VOLUME 17, NUMBER 4

43 

Risk-weighted assets – assets adjusted for risk-based capital definitions which 

include on-balance-sheet as well as off-balance-sheet items multiplied by 

risk-weights that range from zero to 200 percent. A conversion factor is used 

to assign a balance sheet equivalent amount for selected off-balance-sheet 

accounts.

Securities – excludes securities held in trading accounts. Banks’ securities 

portfolios consist of securities designated as “held-to-maturity” (reported 

at amortized cost (book value)), securities designated as “available-forsale” (reported at fair (market) value), and equity securities with readily 

determinable fair values not held for trading.

Securities gains (losses) – realized gains (losses) on held-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. (TFR filers began filing Call Reports effective with the quarter 

ending March 31, 2012.)

Seller’s interest in institution’s own securitizations – the reporting bank’s 

ownership interest in loans and other assets that have been securitized, 

except an interest that is a form of recourse or other seller-provided credit 

enhancement. Seller’s interests differ from the securities issued to investors 

by the securitization structure. The principal amount of a seller’s interest is 

generally equal to the total principal amount of the pool of assets included 

in the securitization structure less the principal amount of those assets 

attributable to investors, i.e., in the form of securities issued to investors.

Small Business Lending Fund – The Small Business Lending Fund (SBLF) was 

enacted into law in September 2010 as part of the Small Business Jobs Act of 

2010 to encourage lending to small businesses by providing capital to qualified 

community institutions with assets of less than $10 billion. The SBLF Program 

is administered by the U.S. Treasury Department (https://home.treasury.gov/

policy-issues/small-business-programs/small-business-lending-fund).

Under the SBLF Program, the Treasury Department purchased noncumulative 

perpetual preferred stock from qualifying depository institutions and holding 

companies (other than Subchapter S and mutual institutions). When this stock 

has been issued by a depository institution, it is reported as “Perpetual preferred 

stock and related surplus.” For regulatory capital purposes, this noncumulative 

perpetual preferred stock qualifies as a component of Tier 1 capital. Qualifying 

Subchapter S corporations and mutual institutions issue unsecured subordinated 

debentures to the Treasury Department through the SBLF. Depository 

institutions that issued these debentures report them as “Subordinated notes 

and debentures.” For regulatory capital purposes, the debentures are eligible 

for inclusion in an institution’s Tier 2 capital in accordance with their primary 

federal regulator’s capital standards. To participate in the SBLF Program, an 

institution with outstanding securities issued to the Treasury Department under 

the Capital Purchase Program (CPP) was required to refinance or repay in full 

the CPP securities at the time of the SBLF funding. Any outstanding warrants 

that an institution issued to the Treasury Department under the CPP remain 

outstanding after the refinancing of the CPP stock through the SBLF Program 

unless the institution chooses to repurchase them.
QUARTERLY 2023 VOLUME 17, NUMBER 4

44 

Subchapter S corporation – A Subchapter S corporation is treated as a passthrough entity, similar to a partnership, for federal income tax purposes. It is 

generally not subject to any federal income taxes at the corporate level. This 

can have the effect of reducing institutions’ reported taxes and increasing their 

after-tax earnings.

Trust assets – market value, or other reasonably available value of fiduciary 

and related assets, to include marketable securities, and other financial and 

physical assets. Common physical assets held in fiduciary accounts include real 

estate, equipment, collectibles, and household goods. Such fiduciary assets are 

not included in the assets of the financial institution.

Unearned income and contra accounts – unearned income for Call Report

filers only.

Unused loan commitments – includes credit card lines, home equity lines, 

commitments to make loans for construction, loans secured by commercial 

real estate, and unused commitments to originate or purchase loans. (Excluded 

are commitments after June 2003 for originated mortgage loans held for sale, 

which are accounted for as derivatives on the balance sheet.)

Yield on earning assets – total interest, dividend, and fee income earned on 

loans and investments as a percentage of average earning assets.
QUARTERLY 2023 VOLUME 17, NUMBER 4

45 

IMPLICATIONS OF HIGH INFLATION FOR 

BANKING OUTCOMES AND DEPOSIT FLOWS: 

OBSERVATIONS FROM 2021 TO 2022 AND 

THE 1970s

INTRODUCTION This article examines how persistently high inflation affects banks by 

comparing the inflationary cycle that began in 2021 with that of the 

1970s. The 1970s included two periods of stagflation—high inflation 

and sluggish or negative economic growth and high unemployment. 

The 1970s may shed light on the current period of high inflation and 

offer insights into conditions banks may face over the coming years 

if inflation persists. Inflation can affect banks in various ways as 

central banks generally respond with monetary policy tightening and 

higher interest rates and the economy generally slows in response to 

these changes. This article compares lending and bank performance 

during two inflationary periods with a focus on the effects on deposits. 

Robust deposit growth in the 1970s suggests that banks were actively 

seeking deposits, competing both against each other and against 

other short-term investments. In 2021 to 2022, banks generally were 

flush with deposits as a result of varying pandemic support programs, 

and generally were slow to raise rates to compete to keep deposits. 

The differences between the two periods illustrate the importance of 

considering broader macroeconomic conditions when analyzing the 

effects of inflation on banks.
QUARTERLY 2023 VOLUME 17, NUMBER 4

46 

THE CURRENT HIGH INFLATION 

PERIOD

In 2022, inflation reached its highest level since the early 1980s 

(Chart 1). The United States had not experienced sustained high 

inflation since the stagflation period of the 1970s and early 1980s. 

This recent period of high inflation to some degree reflected a period of 

adjustment associated with the COVID-19 pandemic and its aftermath. 

Inflation fell close to zero in second quarter 2020 as pandemic-related 

restrictions and job losses led to lower demand for most goods and 

services. As the economy reopened in 2020, inflation rose back toward 

the Federal Reserve’s long-run 2 percent target. Inflation rose above 

the 2 percent target in 2021 and 2022 and peaked at 9.1 percent in June 

2022, the highest level since 1981.

Several factors contributed to rising inflation in 2021 and 2022. 

Manufacturing disruptions and transportation delays limited supply 

and raised the costs of producing and shipping goods, and labor 

shortages raised costs for many businesses. Russia’s invasion of 

Ukraine disrupted food and energy markets, pushing up prices. An 

increased preference for goods rather than services pushed up goods 

demand at the same time that supply fell.1 Pandemic support programs 

bolstered household incomes through 2021 and allowed households 

to continue to spend through disruptions, which bolstered consumer 

demand and pushed up prices.

In 2021, the Federal Open Market Committee (FOMC) stated that 

inflation was transitory and the FOMC did not tighten monetary policy 

to reduce it.2 But in 2022, as inflation continued to increase, the FOMC 

raised interest rates by 425 basis points in less than a year, the fastest 

monetary policy tightening since 1981. In response, inflation fell from 

June 2022 through December 2022 but remained above the Federal 

Reserve’s 2 percent target.

1 See Francesco Ferrante, Sebastian Graves, and Matteo Iacoviello, “The Inflationary Effects of Sectoral Reallocation,” International Finance Discussion Papers 1369, Board of 

Governors of the Federal Reserve System, (2023), https://www.federalreserve.gov/econres/ifdp/files/ifdp1369.pdf.

2 See, for example, Federal Reserve, press release, April 28, 2021, https://www.federalreserve.gov/monetarypolicy/files/monetary20210428a1.pdf; Federal Reserve, press 

release, June 16, 2021, https://www.federalreserve.gov/monetarypolicy/files/monetary20210616a1.pdf; and Federal Reserve, press release, November 3, 2021, 

https://www.federalreserve.gov/monetarypolicy/files/monetary20211103a1.pdf.
QUARTERLY 2023 VOLUME 17, NUMBER 4

47 

INFLATION IN THE 1970s AND 1980s In the 1970s, the United States experienced two periods of stagflation: 

high inflation and sluggish or negative economic growth and high 

unemployment. Compared with the 2021 inflation period, inflation in 

the 1970s was longer lasting and was defined by two large spikes. Chart 

2 compares consumer price index (CPI) inflation in the 1970s and in the 

2020s, starting from the first month of each rising inflation period. 

The 1970s period began in January 1973 and the 2020s period began in 

January 2021.

In response to high inflation and low job growth in the 1970s, 

economist Arthur Okun proposed a new measure called the misery 

index—the sum of the inflation rate and the unemployment rate. There 

were two periods of stagflation in the 1970s when the misery index was 

above 16 percent: from 1974 to 1975 and from 1979 to 1982. Inflation 

spiked in both of these periods and remained elevated between them. 

In contrast, the misery index was only 12.7 percent when it peaked in 

June 2022 during the most recent high-inflation period.3

3 The misery index spiked to 15.0 percent in April 2020 at the height of pandemic-related unemployment, but declined with unemployment and was 8.1 percent by October 2020.

Inflation Rose to the Highest Level Since the 1980s in 2022

Year-Over-Year Change in CPI and Federal Funds Rate

Percent

Source: Bureau of Labor Statistics (Haver Analytics). 

Note: Data are monthly through December 2022. 

Chart 1

-5

0

5

10

15

20

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Federal Funds Rate

CPI Inflation
QUARTERLY 2023 VOLUME 17, NUMBER 4

48 

Several factors contributed to high inflation during the 1970s. The Arab 

oil embargo of 1973 more than tripled oil prices, and crop failures and 

depleted inventories pushed up food prices. Social spending programs 

enacted in the late 1960s as part of the “Great Society” also continued 

to boost civilian demand, while the Vietnam War increased military 

spending. Inflation remained elevated for much of the 1970s and was 

expected to continue to rise. In 1979, the Iranian Revolution led to 

the second oil crisis, again raising oil prices and pushing other prices 

higher.4

4 For a contemporaneous discussion of inflation in the 1970s, see Robert E. Hall, Inflation: Causes and Effects, (University of Chicago Press, 1982), https://www.nber.org/booksand-chapters/inflation-causes-and-effects. For a more recent discussion, see Alan S. Blinder and Jeremy B. Rudd, “The Supply-Shock Explanation of the Great Stagflation 

Revisited,” National Bureau of Economic Research, February 2010, https://www.nber.org/system/files/chapters/c9160/revisions/c9160.rev2.pdf. 

Inflation Peaked Lower and Came Down Faster in 2021

Year-Over-Year Inflation

Percent

Source: Bureau of Labor Statistics (Haver Analytics).

Note: The chart shows year-over-year CPI inflation starting from the first month of a high-inflation period. The 1973 line starts in

January 1973, and the 2021 line starts in January 2021.

Chart 2

#

0

2

4

6

8

10

12

14

16

0 1 2 3 456 789 10

Years of High Inflation Period

1973

2021
QUARTERLY 2023 VOLUME 17, NUMBER 4

49 

In response to high inflation, the Federal Reserve quickly raised 

interest rates in 1973 and then quickly lowered them. Chart 3 shows the 

federal funds rate in the two high-inflation periods. While inflation 

rose equally fast during both periods, interest rates rose earlier in the 

1970s. The federal funds rate peaked in June 1974 and started to decline 

even before inflation did, and returned to its 1972 level by mid-1975. 

Rates then slowly rose from 1975 through 1979 as inflation rose. In 

1979, Paul Volcker became Chairman of the Federal Reserve and the 

FOMC raised the federal funds rate significantly in an effort to bring 

down inflation and reduce inflation expectations. The Federal Reserve 

kept the federal funds rate higher for longer than expected, signaling 

its commitment to reducing inflation. 

In contrast, in the 2021 inflation period, the FOMC did not begin to 

raise rates until about a year after inflation began to rise, but raised 

rates more sharply than the initial rate increases of the 1970s. If 

current inflation were to remain persistently high or to increase 

again, interest rates may rise and become more volatile, similar to the 

experience of the 1970s. Bank management of interest rate risk would 

become more challenging in such an environment. The recent bout of 

inflation, however, has been modest compared to that of the 1970s, as 

shown in Chart 2.

The Federal Funds Rate Started to Increase Later in the 2021 High-Inflation 

Period Than in the 1970s

Federal Funds Rate

Percent

Source: Federal Reserve Board (Haver Analytics).

Note: The chart shows the federal funds rate starting from the first month of a high inflation period. The 1973 line starts in

January 1973, and the 2021 line starts in January 2021.

Chart 3

#

Years of High-Inflation Period

0

5

10

15

20

25

0 1 2 3 456789 10

1973

2021
QUARTERLY 2023 VOLUME 17, NUMBER 4

50 

EFFECTS OF HIGH INFLATION ON 

LOAN GROWTH, LOAN 

PERFORMANCE, AND BANK 

PROFITABILITY

Inflation and the monetary policy response to inflation can affect 

banks through several channels, some of which support favorable 

banking outcomes while others weaken them. One effect of inflation is 

higher nominal growth of aggregate values like GDP and loans, even if 

real growth slows. At some point, monetary policy tightens to contain 

inflation and interest rates rise, slowing the economy. The table on 

page 51 summarizes, at a conceptual level, some of the possible effects 

of inflation or higher interest rates on loan demand, loan performance, 

and bank profitability.

Banks generally increase loan interest rates as market interest rates 

rise. Higher interest rates may reduce loan demand by increasing the 

cost of a loan. Loan demand may fall to the extent that higher interest 

rates slow economic growth. On the other hand, rising prices may 

increase the size of loans needed, at least partially offsetting some of 

the downward pressure on loan demand from rising interest rates and 

slowing economic growth.

The effects of inflation on loan volumes were different in the 1970s 

than in the 2020s, in line with broader macroeconomic conditions. 

In the early 1970s, loan growth rose after the end of the 1969–1970 

recession along with nominal GDP growth, with year-over-year loan 

growth peaking at 19 percent in second quarter 1973. As inflation 

continued to rise, the FOMC raised interest rates and the economy 

entered a recession. Year-over-year loan growth fell through the first 

stagflation period to a low of 2 percent in third quarter 1975. Similarly, 

loan growth accelerated after the 1973–1975 recession but slowed 

significantly in 1980 as the FOMC quickly raised interest rates and the 

economy entered another recession. Loan growth increased during 

the 2020 pandemic-related recession as businesses drew down lines 

of credit to have cash on hand and the Paycheck Protection Program 

boosted commercial and industrial loans.5 Because of this boost, loans 

fell in 2021 from a year earlier as inflation started to increase, but 

recovered strongly in 2022 even as interest rates increased quickly.

5 U.S. Department of the Treasury, Paycheck Protection Program, https://home.treasury.gov/policy-issues/coronavirus/assistance-for-small-businesses/paycheckprotection-program, and Margaret Hanrahan and Angela Hinton, “The Importance of Community Banks in Paycheck Protection Program Lending,” FDIC Quarterly 14 no. 4 

(2020), https://www.fdic.gov/analysis/quarterly-banking-profile/fdic-quarterly/2020-vol14-4/article1.pdf.
QUARTERLY 2023 VOLUME 17, NUMBER 4

51 

Table 1

High Inflation and High Interest Rates Affect Banks in Multiple Ways

Channels of Effect Experience

Increase Decrease 1970s 2020s

Loan Demand

Higher prices cause 

households and 

businesses to require 

larger loans for the same 

purchase or project

If inflation comes from 

economic growth, loan 

demand will be high

Higher interest rates lower 

loan demand

Loan growth was strong 

throughout the 1970s but 

slowed in 1974 through 

1975 and in 1979 through 

1981

Loan growth slowed in 

2021 but increased in 

2022

Loan Repayments

Inflation lowers the real 

amount people owe on 

an existing loan, making 

repayment easier

Higher prices can strap 

budgets, leaving less 

money to repay loans

Higher interest rates make 

repayment harder

Net charge-off rates 

trended up in the 1970s 

and worsened in the 

1980s

Pandemic support 

programs lowered net 

charge-off rates

Bank Profitability

Higher interest rates 

generate higher interest 

income from new or 

floating-rate loans

Funding costs increase 

with interest rates

If loan demand falls, 

interest income may fall

Return on assets (ROA) 

declined and worsened 

in the Federal Reserve 

Chairman Paul Volcker 

period

ROA rose from 2020 lows 

in 2021

Source: FDIC.

High inflation and interest rates may have conflicting effects on loan 

performance. Inflation causes the real value of existing loans to fall. 

If high inflation is accompanied by rising wages or rising profits, 

then making payments on existing loans may become easier. On the 

other hand, high inflation—if it outpaces wage growth—can mean 

lower household disposable income to meet loan obligations, causing 

higher rates of loan delinquency. In addition, floating interest rates can 

worsen loan performance as monthly payments increase with interest 

rates.
QUARTERLY 2023 VOLUME 17, NUMBER 4

52 

General economic conditions matter in determining which effect 

dominated in the two periods. As shown in Chart 4, the 1970s were 

characterized by high unemployment rates, which may have impeded 

households’ ability to stay current on loans. With the increase in 

the unemployment rate that occurred during the first stagflation 

period of 1974 to 1975, the net charge-off rate on loans rose from 

1974 to 1976. The net charge-off rate rose again in 1979 and 1980 as 

inflation rose during the second stagflation period, but it rose more 

quickly through the 1980s from high interest rates to fight inflation, a 

recession, and the Savings and Loan Crisis (Chart 4). The more recent 

period of inflation, in contrast, has been characterized by historically 

low unemployment rates and very low net charge-off rates. Wages 

accelerated in both periods, but at the peak of inflation, real wage 

growth was negative in both periods. Loan performance improved 

in 2021 compared to pre-2020 levels as pandemic fiscal support and 

the quick recovery from the pandemic bolstered income and loan 

repayments. The net charge-off rate rose slightly in 2022 but remained 

relatively low.

Net Charge-Os Tend to Rise With the Unemployment Rate

Unemployment Rate

Percent

Net Charge-O Rate

Percent

Sources: FDIC and Bureau of Labor Statistics (Haver Analytics).

Note: Data are annual through 2022. 

Chart 4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

2

4

6

8

10

12

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Unemployment Rate

Net Charge-O Rate
QUARTERLY 2023 VOLUME 17, NUMBER 4

53 

The net results of the effects on bank profitability described above are a 

priori ambiguous. As noted in the table on page 51, downward pressure 

on loan demand and upward pressure on funding costs from monetary 

tightening in response to inflation tend to reduce bank income and 

profitability. On the other hand, higher interest rates earned on new 

loans may offset any decreases in loan growth and loan performance.

Bank profitability measured by return on assets trended downward 

in the 1970s (Chart 5). This includes the two stagflation periods, as 

slow economic growth and high unemployment weighed on loan 

performance: industry return on assets declined 14 percent in 1974 

and fell consistently from 1980 through 1984. The declines in return 

on assets during the two stagflation periods, however, were relatively 

small, potentially reflecting that the positive effect of higher interest 

rates on net income helped mitigate the total decline. In contrast, in 

2021 and 2022 the unemployment rate remained at historic lows, loan 

growth was strong through much of 2022, and the return on assets 

increased.

Bank Performance Fell in 2020 but Recovered in 2021

Return on Assets

Percent

Source: FDIC.

Note: Data are annual through 2022. 

Chart 5

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
QUARTERLY 2023 VOLUME 17, NUMBER 4

54 

EFFECTS ON DEPOSITS This section examines deposit behavior at banks in more detail 

because deposits are an important funding source for banks. Deposit 

growth and inflation interact in multiple ways. In economic theory, 

growth in the supply of money, including deposits, is an important 

driver of inflation. Conversely, inflation and the increases in interest 

rates that result from Federal Reserve tightening in response can have 

feedback effects on deposit growth. High inflation periods may strain 

household budgets as the same purchases cost more, resulting in lower 

savings and a drawdown in deposits. If banks raise deposit rates more 

slowly than market rates, households and businesses may invest their 

bank deposits in higher-yielding alternatives, contributing to deposit 

outflows from their bank.6

Before the high inflation period in 2021–2022, banks had unusually 

high levels of deposits. Banks experienced large inflows of deposits 

in 2020 and early 2021 due to the pandemic and pandemic-related 

policy measures and programs, and deposit growth continued through 

mid-2022 (Chart 6).7 At the start of the pandemic, many businesses 

with lines of credit drew down their lines to have cash on hand, also 

pushing up business deposits. Pandemic fiscal support, like stimulus 

checks and enhanced unemployment benefits, increased household 

deposits. With these developments, bank account balances as of 

December 31, 2020, were 23 percent higher than a year earlier, well 

above the previous peak increase in 1972.

6 Deposits may leave the depositor’s bank but remain in the banking system if the withdrawn funds ultimately give rise to new deposits in other U.S. banks.

7 The deposit data come from Table L.111 of the Federal Reserve’s Z.1 release: U.S. Chartered Depositories. The variables used are checkable deposits and currency and time and 

savings deposits.

Deposits Are Weakly Correlated With CPI Inflation

Year-Over-Year Change

Percent

Sources: Federal Reserve Board Z.1 and Bureau of Labor Statistics (Haver Analytics).

Note: Data are quarterly through first quarter 2023. 

Chart 6

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15

20

25

30

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

CPI Inflation

Deposits
QUARTERLY 2023 VOLUME 17, NUMBER 4

55 

These deposits have been slow to normalize even as the economy 

recovered from the pandemic recession and the need for precautionary 

savings lessened. As inflation and interest rates rose in first half 2022, 

deposits continued to rise. Strong nominal wage growth and positive 

economic conditions supported deposit growth. Because of the high 

level of deposits, banks were slower than usual to raise deposit rates 

(Chart 7). As market interest rates continued to rise, deposits declined 

in second half 2022. Many banks reported a decline in deposits as some 

depositors began to seek higher-yielding alternatives. Despite the 

decline, total deposits remained about 35 percent above their fourth 

quarter 2019 level at year-end 2022.

One-Year Certificate of Deposit Rates Rose in 2022 but Remained Well

Below the Comparable Treasury Rate

Average Deposit Rate Oered for One-Year CDs by Bank Size

Percent

Sources: S&P Capital IQ and Federal Reserve Board.

Note: Lines show the average deposit rate oered on household accounts, weighted by domestic deposits. Data are weekly through 

December 2022.

Chart 7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Feb-2020 Jul-2020 Nov-2020 Apr-2021 Aug-2021 Jan-2022 Jun-2022 Oct-2022

Less Than $10 Billion

$10 Billion to $250 Billion

Greater Than $250 Billion

Global Systemically Important Banks

One-Year Treasury Yield
QUARTERLY 2023 VOLUME 17, NUMBER 4

56 

In contrast, banks in the 1970s were generally seeking deposits, as 

evidenced by the robust growth of deposits through the 1970s shown in 

Chart 6. But they were limited in the amount they could raise deposit 

rates in response to changes in market interest rates. Regulation Q 

placed caps on the rates that banks could pay on deposits, and by the 

1970s, deposit rates rose to the regulatory caps.8

As market interest rates rose, banks increased their deposit rates to 

the cap to compete with each other and other investment alternatives 

for short-term investments like commercial paper and money market 

funds.9 These comparable market rates were generally above the caps 

on deposit rates. As market interest rates rose well above the rate banks 

were allowed to pay in the 1970s, interest rate caps were raised several 

times to allow banks to continue to compete for deposits.

Each time the interest rate cap on deposits was raised, almost all banks 

raised their rates to the cap.10 For example, in July 1973, when inflation 

was rising but in line with then-prevailing trends and the federal 

funds rate had started to rise, 64 percent of banks reported paying the 

deposit rate cap on savings deposits. By October 1974, when the CPI 

inflation rate peaked and the federal funds rate was already declining, 

84 percent of banks reported paying the maximum rate allowed on 

savings deposits. The percentage paying the cap remained above 80 

percent through April 1978, when data collection ended. This pattern is 

true for other deposit rates. In July 1973, 80 percent of banks reported 

paying the cap on the surveyed category of one-year to two-and-ahalf-year certificates of deposit; that share rose to 97 percent of banks 

in October 1974 and remained above 90 percent through April 1978.

8 Regulation Q was a Federal Reserve regulation that prohibited banks from paying interest on demand deposits and limited the interest paid on other deposits. The interest 

rate ceilings were gradually raised during the 1960s through the 1980s, and the regulation was fully repealed by the Dodd-Frank Act. For history through the mid-1980s, see R. 

Alton Gilbert, “Requiem for Regulation Q: What It Did and Why It Passed Away,” Federal Reserve Bank of Saint Louis, February 1986, https://files.stlouisfed.org/files/htdocs/

publications/review/86/02/Requiem_Feb1986.pdf.

9 Not all deposit categories had caps in 1970. Some certificates of deposit over $100,000—about $800,000 in 2023 dollars—were exempted from the caps in June 1970.

10 Timothy Q. Cook, “Regulation Q and the Behavior of Savings and Small Time Deposits at Commercial Banks and the Thrift Institutions,” Federal Reserve Bank of Richmond 

Economic Review, November/December 1978, https://www.richmondfed.org/-/media/RichmondFedOrg/publications/research/economic_review/1978/pdf/er640602.pdf.
QUARTERLY 2023 VOLUME 17, NUMBER 4

57 

With the high interest rates of the 1970s and the constraints imposed 

by Regulation Q, bank reliance on deposits decreased (Chart 8).11 In the 

1970s, deposits—especially demand deposits, which were not allowed 

to pay interest—paid far less than other comparable investments as 

market interest rates rose. In response, some depositors moved their 

money into higher-yielding financial instruments and decreased their 

deposit holdings. This search for yield is widely agreed to explain the 

sharp growth in money market fund assets that began in the late 1970s, 

as assets in these funds increased from $10.8 billion at year-end 1978 to 

$186.3 billion at year-end 1981.12

Deposit changes during the 1970s included a reduction in bank reliance 

on checking and savings deposits for funding (Chart 8).13 Checking and 

savings accounts are generally considered a stable source of funding 

for banks. Reliance on deposits declined from 1960 through the Great 

Recession, and the reliance on checking and savings deposits fell 

more quickly. Checking and savings deposits as a share of bank assets 

had been trending down since the 1940s and fell almost 10 percentage 

points in 1974, the fastest decline since data collection began in 

1934.14 The decline in the checking and savings deposit share of assets 

accelerated in 1981 as the federal funds rate rose.

11 Banks increased their use of Federal Home Loan Bank advances and commercial paper to fund their balance sheets during this period.

12 The money market funds increased their investments in commercial paper during the 1970s, and companies placed some of the money they raised from selling commercial 

paper back into banks. Additionally, their investments in time deposits would also flow back into banks as deposits.

13For this chart, we use the FDIC’s Annual Historical Bank Data rather than the Federal Reserve’s Z.1 release because we can distinguish savings deposits in the FDIC’s data, while 

savings deposits and time deposits are combined in the Z.1 release.

14 These data come from the FDIC’s Annual Historical Bank Data, domestic demand deposits, domestic savings deposits, and total deposits. The longer-term decline in reliance on 

checking and savings deposits was partially caused by the increased demand for interest on deposits.

Bank Reliance on Checking and Savings Deposits Fell in the 1970s and Rose 

in 2020 and 2021

Deposits as a Share of Total Assets

Percent

Source: FDIC Annual Historical Bank Data.

Note: Data are annual through 2022. 

Chart 8

0

10

20

30

40

50

60

70

80

90

100

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Checkable and Savings

Total Deposits
QUARTERLY 2023 VOLUME 17, NUMBER 4

58 

In contrast, total deposits and checking and savings deposits spiked 

in 2020 and 2021 and only began falling slightly in fourth quarter 2022 

from a year earlier. Bank reliance on deposits also increased in 2020 

and 2021 as deposits remained a cheap funding source, particularly as 

market interest rates began to rise.

In both the 1970s and the 2020s, bank deposit interest rates tended to 

lag increases in market interest rates. Deposit rates lower than market 

interest rates affected deposit flows into banks. Unique features of each 

historical period likely contributed to the slow adjustment of deposit 

interest rates: Regulation Q in the 1970s, and more recently the glut of 

deposits in the aftermath of the pandemic. Recent trends suggest that 

banks continue to face upward pressure on funding costs.15

CONCLUSIONS High inflation affects banking conditions through direct effects on 

loan performance, interest income, and deposit flows and indirect 

effects through broader macroeconomic conditions. With relatively few 

periods of high inflation in recent history, the experience of the 1970s 

may provide insights into how inflation may affect banking conditions 

during the high interest rate period that started in 2021. If inflation 

persists or increases, then a continuation of relatively high market 

interest rates would be expected to increase competition for deposits 

as banks raise deposit rates. Interest rate tightening in response to 

the high inflation of the 1970s also contributed to recessions, which 

can directly affect borrowers’ ability to pay and the demand for 

loans. Similarly, in the current tightening cycle, the possibility of an 

economic slowdown or recession exists that could adversely affect 

bank profitability separately from inflation. Finally, if inflation rates 

remain high or volatile, the experience of the 1970s suggests that 

interest rates would also be high and volatile, increasing the challenges 

of interest rate risk management for banks.

Author:

Kate Fritzdixon

Senior Financial Economist

Division of Insurance and Research

15 For a detailed discussion of recent banking trends related to the interest rate environment, including an analysis of deposit betas, see Nafij Ahmed, Dorothy G. Miranda, and 

Krishna Patel, “Banking Sector Performance During Two Periods of Sharply Higher Interest Rates: 2022 and 2004 Interest Rate Increase Cycles,” FDIC Quarterly 17 no. 3 (2023), 

https://www.fdic.gov/analysis/quarterly-banking-profile/fdic-quarterly/2023-vol17-3/article1.pdf.