FDIC QUARTERLY A

Quarterly

2021

Volume 15, Number 2

Federal Deposit 

Insurance Corporation

Quarterly Banking Profile:

First Quarter 2021

The Historic Relationship Between 

Bank Net Interest Margins and 

Short-Term Interest Rates

Residential Lending During the 

Pandemic
FDIC QUARTERLY

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

Federal Deposit Insurance Corporation and contains a comprehensive summary of the 

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

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

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

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

Single copy subscriptions of the FDIC Quarterly can be obtained through the FDIC Public 

Information Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. E-mail requests 

should be sent to publicinfo@fdic.gov. Change of address information also should be 

submitted to the Public Information Center. 

The FDIC Quarterly is available online by visiting the FDIC website at www.fdic.gov. 

To receive e-mail notification of the electronic release of the FDIC Quarterly and the 

individual feature articles, subscribe at www.fdic.gov/about/subscriptions/index.html.

Chairman

Jelena McWilliams

Director, Division of Insurance and Research

Diane Ellis

Executive Editors

George French

Shayna M. Olesiuk

Managing Editors

Rosalind Bennett

Alan Deaton

Patrick Mitchell

Philip A. Shively

Editors

Clayton Boyce

Kathy Zeidler

Publication Manager

Lynne Montgomery

Media Inquiries

(202) 898-6993
FDIC QUARTERLY i

2021 FDIC QUARTERLY

Volume 15 • Number 2

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

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

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

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

Quarterly Banking Profile: First Quarter 2021

FDIC-insured institutions reported aggregate net income of $76.8 billion in first quarter 

2021, an increase of $17.3 billion (29.1 percent) from fourth quarter 2020 and $58.3 billion 

(315.3 percent) from a year ago. Aggregate negative provision expense, reflecting 

improvements in the economy and asset quality, drove the increase in quarterly net 

income. Three-fourths of all institutions (74.8 percent) reported year-over-year increases 

in quarterly net income. The share of unprofitable institutions dropped from 7.4 percent a 

year ago to 3.9 percent. The average return on assets ratio was 1.38 percent for the quarter, up 

1 percentage point from a year ago and 28 basis points from fourth quarter 2020. See page 1.

Community Bank Performance Community banks—which represent 91 percent of insured institutions—reported yearover-year quarterly net income growth of $3.7 billion (77.5 percent) in first quarter 2021, 

despite a narrower net interest margin. Nearly three-quarters of all community banks 

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

assets ratio increased 56 basis points from the year-ago quarter to 1.58 percent as net income 

growth outpaced the growth in average assets. See page 15.

Insurance Fund Indicators The Deposit Insurance Fund (DIF) balance totaled $119.4 billion at the end of first quarter 

2021, an increase of $1.5 billion from the previous quarter. Assessment income, interest 

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

of the increase, offset partially by operating expenses and unrealized losses on availablefor-sale securities. The DIF reserve ratio was 1.25 percent on March 31, 2021, down 4 basis 

points from December 31, 2020, and down 13 basis points from March 31, 2020. See page 23.

Featured Articles:

The Historic Relationship Between Bank Net Interest 

Margins and Short-Term Interest Rates

The years since the Great Recession generally demonstrate that protracted periods of low 

interest rates tend to compress net interest margin (NIM) at FDIC-insured banks. NIM 

decreased during the period of historically low interest rates after that recession, increased 

during the upward interest rate cycle between 2015 and 2019, and decreased again as interest 

rates fell toward zero with the onset of the COVID-19 pandemic. In most rate cycles since the 

1980s, the median NIM, representative of typical banks, has moved in the same direction 

as changes in the federal funds rate. But this relationship has been much less pronounced 

for banks with high concentrations of long-term assets. Those banks with a relatively high 

proportion of long-term assets to total assets report greater insulation from changes in 

short-term interest rates. This means that their NIM falls less during downward rate cycles 

but rises less during upward rate cycles. The overall positive relationship between short-term 

interest rates and NIM and the effect of maturity structure on this relationship generally hold 

true over time for both community and noncommunity banks. See page 31.

Residential Lending During the Pandemic

The housing market rebounded from the COVID-19 pandemic-induced recession faster 

than other sectors of the economy, helped by historically low interest rates and fiscal 

support. Still, weaker economic fundamentals led to tightening of mortgage credit and 

underwriting standards as lenders sought to reduce credit risk from new mortgages. 

Mortgage credit performance improved after deteriorating at the start of the pandemic, 

but high rates of delinquent loans reflect lingering financial distress for many borrowers. 

The coming expiration of federal programs that have aided homeowners raises concern 

about the possible increased risk of mortgage credit quality deterioration and reduced credit 

availability. Nevertheless, banks have been resilient and, despite the uncertain outlook, 

continue to extend residential loans. See page 43.

QUARTERLY BANKING PROFILE First Quarter 2021

FDIC QUARTERLY 1

INSURED INSTITUTION PERFORMANCE

Quarterly Net Income Rose From a Year Ago Primarily Because of Negative Provisions for Credit Losses

Net Interest Margin Contracted Further, Setting a Record Low

Loan Balances Declined From the Previous Quarter and Year, Driven by a Reduction in Credit Card Balances

Asset Quality Improved

Quarterly Net Income More 

Than Tripled From the 

Year-Ago Quarter

Net income totaled $76.8 billion in first quarter 2021, an increase of $17.3 billion (29.1 percent) 

from fourth quarter 2020 and $58.3 billion (315.3 percent) from a year ago. Aggregate negative provision expense of $14.5 billion, which declined $17.7 billion from fourth quarter 2020, 

drove the improvement in net income from the previous quarter. Three-fourths of all banks 

(74.8 percent) reported higher quarterly net income compared with the year-ago quarter.1

The share of unprofitable institutions dropped from 7.4 percent a year ago to 3.9 percent. The 

banking industry reported an aggregate return on average assets ratio of 1.38 percent, up 

1 percentage point from a year ago and 28 basis points from fourth quarter 2020.

Net Interest Margin 

Contracted Further to a 

New Record Low

The average net interest margin contracted 57 basis points from a year ago to 2.56 percent, 

the lowest level on record in the Quarterly Banking Profile (QBP). Net interest income 

declined $7.6 billion (5.6 percent) from first quarter 2020 as the year-over-year reduction in interest income (down $29.8 billion, or 17.6 percent) outpaced the decline in interest 

expense (down $22.2 billion, or 68.7 percent). Despite the aggregate decline in net interest income, more than three-fifths of all banks (64.4 percent) reported higher net interest 

income compared with a year ago. The average yield on earning assets declined 1.1 percentage points from the year-ago quarter to 2.76 percent, while the average cost of funding 

earning assets declined 54 basis points to 0.20 percent, both of which are record lows.

More Than Two-Thirds of 

Banks Reported Higher 

Noninterest Income 

Year Over Year

More than two thirds of all banks (67.9 percent) reported an annual increase in noninterest 

income. Increased revenue from servicing fees, loan sales, and trading activities lifted noninterest income by $9.9 billion (14.8 percent) to $76.8 billion from a year ago. Servicing fee revenue increased $5.2 billion, net gains on loan sales increased $4.5 billion, and trading revenue 

increased $3.8 billion. A decline in “other noninterest income” of $4.3 billion (12.1 percent) 

partially offset the improvement in noninterest income from the year-ago quarter.2

Securities and Other Gains/Losses, Net

Net Operating Income

Quarterly Net Income

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

-60

-40

-20

0

20

40

60

80

100

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

Chart 1

Source: FDIC.

Percent

Quarterly Net Interest Margin

All FDIC-Insured Institutions

 Assets > $250 Billion

 Assets $10 Billion - $250 Billion

 Assets $1 Billion - $10 Billion

 Assets $100 Million - $1 Billion

 Assets < $100 Million

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

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

Chart 2

1 Industry participation counts consist of institutions existing in both reporting periods.

2 Other noninterest income includes items such as bank card and credit card interchange fees, income and fees from 

automated teller machines, and other related items. 
2021   •   Volume 15  • Number 2

2 FDIC QUARTERLY

Noninterest Expense 

Declined From the 

Year-Ago Quarter

A decline in amortization expense of intangible assets drove a $4.1 billion (3.2 percent) 

reduction in total noninterest expense year over year. Amortization expense declined 

$8.4 billion (88.8 percent). An increase in salary and employee benefits (up $6.2 billion, 

or 10.6 percent) offset the annual reduction in noninterest expense. Average assets per 

employee rose $1.1 million from a year ago to $10.9 million.

Nearly two-thirds of all banks (65.3 percent) reported higher noninterest expense year 

over year. However, the average efficiency ratio (noninterest expense as a percentage of 

net interest income plus noninterest income, which indicates the cost of generating bank 

income) during this period declined 2.7 percentage points to 60.5 percent. Banks in all QBP 

asset size groups reported improvements in this ratio.

Provisions for Credit 

Losses Were Negative for 

the First Time on Record

Provisions for credit losses (provisions) declined $17.7 billion (552.6 percent) from the 

previous quarter and $67.2 billion from the year-ago quarter to negative $14.5 billion, the 

lowest level on record. Less than one-fourth of all institutions (24.5 percent) reported 

higher provisions compared with the year-ago quarter.3 The number of banks that have 

adopted current expected credit loss (CECL) accounting rose by 41 to 320 from fourth 

quarter 2020. CECL adopters reported aggregate negative provisions of $14.9 billion in 

the first quarter, a reduction of $16.1 billion from the previous quarter and a reduction of 

$63.0 billion from one year ago. Provisions for banks that have not adopted CECL accounting totaled $391.4 million (a reduction of $1.7 billion from a quarter ago and $4.0 billion 

from one year ago).

The Coverage Ratio 

Remained Above the 

Financial Crisis Average

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

more past due or in nonaccrual status (coverage ratio) declined 9.4 percentage points to 

174.2 percent from fourth quarter 2020. This ratio remains above the financial crisis average of 79.1 percent.4 Coverage ratios for banks in the largest two QBP asset size groups 

(“$10 billion to $250 billion” and “greater than $250 billion”) declined the most from fourth 

quarter 2020.

Change in Quarterly Loan-Loss Provisions

All FDIC-Insured Institutions

Quarter-Over-Quarter Change

($ Billions)

Source: FDIC.

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

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

Chart 3

Source: FDIC.

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

$ Billions Coverage Ratio (Percent)

Reserve Coverage Ratio

All FDIC-Insured Institutions

0

50

100

150

200

250

300

350

400

450

 Loan-Loss Reserves (Le Axis) 

 Noncurrent Loans (Le Axis)

 Noncurrents Adjusted for GNMA Guaranteed Loans (Le Axis)

 Reserve Coverage Ratio (Right Axis) 

 Coverage Adjusted for GNMA Guaranteed Loans (Right Axis)

0

50

100

150

200

250

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

Chart 4

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

non-adopters. 

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

FDIC QUARTERLY 3

The Noncurrent Rate 

Declined Modestly From 

Fourth Quarter 2020

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

loans and leases) declined $5.9 billion (4.6 percent) to $122.9 billion from fourth quarter 2020. 

The noncurrent rate for total loans and leases improved 5 basis points to 1.14 percent from 

the previous quarter. However, the noncurrent rate for construction and development loans 

increased 7 basis points from the previous quarter to 0.72 percent, and the noncurrent rate 

for home equity credit lines increased 5 basis points from the previous quarter to 2.17 percent.

Net Charge-Off Volume 

Declined From the 

Year-Ago Quarter

During the year ending first quarter 2021, net charge-offs declined $5.4 billion 

(36.8 percent), and the net charge-off rate fell 20 basis points to 0.34 percent, slightly 

above the record low of 0.32 percent. Reductions in charged-off credit card balances (down 

$3.3 billion, or 36.4 percent) and charged-off commercial and industrial (C&I) loans (down 

$1.2 billion, or 43.5 percent) contributed most to the decline.

Total Assets Increased 

From the Previous Quarter

Total assets increased $680.9 billion (3.1 percent) from fourth quarter 2020 to $22.6 trillion. 

Cash and balances due from depository institutions expanded $440.1 billion (13.8 percent), and 

securities rose a record $366.9 billion (7.2 percent). Mortgage-backed securities led the quarterly growth, rising $220.4 billion (7.2 percent), followed by growth in U.S. Treasury securities, which rose $110.7 billion (11.5 percent). Total loan and lease volume declined by a modest 

0.4 percent from the previous quarter. Together, the asset growth and loan volume contraction led to a decline in the net loans and leases to total assets ratio to 47.0 percent, a record low.

Loan Volume 

Continued to Decline, 

Driven by a Reduction in 

Credit Card Balances

Total loan and lease balances contracted $38.7 billion (0.4 percent) from the previous 

quarter. A reduction in credit card balances (down $60.9 billion, or 7.4 percent) drove the 

quarterly decline in loan volume. Unused credit card commitments declined for a fourth 

consecutive quarter (down $364.6 billion, or 9.2 percent). This was the largest percentage 

reduction in credit card commitments since first quarter 2009. Growth in Paycheck Protection Program loans, guaranteed by the Small Business Administration, grew $61.2 billion 

from the previous quarter to $469.4 billion.

Compared with the year-ago quarter, total loan and lease balances declined $136.3 billion 

(1.2 percent). This was the first annual contraction in loan and lease volume reported by 

the banking industry since third quarter 2011. Reductions in credit card balances (down 

$111.9 billion, or 12.8 percent) and C&I loans (down $93.2 billion, or 3.7 percent) drove the 

annual decline in loan volume. Despite the aggregate decline in loan volume, more than twothirds of all banks (71.9 percent) reported year-over-year growth in loan and lease volume.

Source: FDIC.

Percent

Noncurrent Loan Rate and Quarterly Net Charge-O
 Rate

All FDIC-Insured Institutions

0

1

2

3

4

5

6

Quarterly Net Charge-O Rate

Noncurrent Rate

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

Chart 5

-8

-4

0

4

8

12

Quarterly Change in Loan Balances 

All FDIC-Insured Institutions

Source: FDIC.

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

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

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

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

$ Billions Percent

-300

-200

-100

0

100

200

300

400

500

Quarterly Change (Le Axis)

12-Month Growth Rate (Right Axis)

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

Chart 6
2021   •   Volume 15  • Number 2

4 FDIC QUARTERLY

Deposit Growth 

Remained Strong

Deposits grew $635.2 billion (3.6 percent) from fourth quarter 2020 to $18.5 trillion, 

continuing several quarters of unprecedented deposit growth. Among deposit categories, 

deposits above $250,000 (up $424.8 billion, or 4.7 percent) and noninterest-bearing deposits 

(up $371.1 billion, or 8.1 percent) grew most from the previous quarter. Deposits as a percentage of total assets reached a record high for the QBP of 81.8 percent in first quarter 2021.

Equity Capital 

Continued to Grow

Equity capital rose $26.1 billion (1.2 percent) from fourth quarter 2020, supported by 

an increase in retained earnings of $15.3 billion (40.5 percent). Cash dividends totaled 

$23.9 billion, up 9.4 percent from the previous quarter. Fewer institutions—six banks with 

total assets of $536.5 million—reported capital ratios that did not meet Prompt Corrective 

Action (PCA) requirements for the well-capitalized category, compared with eight banks 

that did not meet this requirement in fourth quarter 2020.5 The number of banks that are 

not “well capitalized” for PCA purposes is the lowest on record.

Three New Banks Opened 

in First Quarter 2021

Three new banks opened and 25 institutions merged in first quarter 2021. No banks failed 

during the quarter. With these changes, the number of FDIC-insured commercial banks 

and savings institutions declined from 5,002 to 4,978 in first quarter 2021.6 The number 

of institutions on the FDIC’s “Problem Bank List” declined by one to 55 from fourth quarter 2020. Total assets of problem banks declined $1.7 billion from the fourth quarter to 

$54.2 billion.

Author:

Erica Jill Tholmer

Senior Financial Analyst

Division of Insurance and Research

Source: FDIC.

Number

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

0

100

200

300

400

500

600

700

800

900

1,000

0

50

100

150

200

250

300

350

400

450

500

Assets ($ Billions)

Number of Problem Banks 

Assets of Problem Banks

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

Chart 8

Quarterly Change in Deposits

All FDIC-Insured Institutions

Quarterly Change ($ Billions)

Source: FDIC.

-200

0

200

400

600

800

1,000

1,200

1,400

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

Chart 7

5 Prompt corrective action (PCA) categories are assigned based on reported capital ratios only and do not include the 

effects of regulatory downgrades. 

6 The total number of insured financial institutions includes 2 banks that did not file Call Reports this quarter because 

most of their assets were sold to credit unions, but their banking charters remain active. 
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 5

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

2021** 2020** 2020 2019 2018 2017 2016

Return on assets (%) 1.38 0.38 0.72 1.29 1.35 0.97 1.04

Return on equity (%) 13.73 3.50 6.85 11.38 11.98 8.60 9.27

Core capital (leverage) ratio (%) 8.85 9.41 8.81 9.66 9.70 9.63 9.48

Noncurrent assets plus other real estate owned to assets (%) 0.57 0.54 0.61 0.55 0.60 0.73 0.86

Net charge-offs to loans (%) 0.34 0.54 0.50 0.52 0.48 0.50 0.47

Asset growth rate (%) 11.41 11.96 17.37 3.91 3.03 3.79 5.09

Net interest margin (%) 2.56 3.13 2.82 3.36 3.40 3.25 3.13

Net operating income growth (%) 343.81 -71.60 -38.77 -3.14 45.45 -3.27 4.43

Number of institutions reporting 4,978 5,116 5,002 5,177 5,406 5,670 5,913

Commercial banks 4,357 4,464 4,375 4,518 4,715 4,918 5,112

Savings institutions 621 652 627 659 691 752 801

Percentage of unprofitable institutions (%) 3.88 7.39 4.64 3.75 3.44 5.61 4.48

Number of problem institutions 55 54 56 51 60 95 123

Assets of problem institutions (in billions) $54 $45 $56 $46 $48 $14 $28

Number of failed institutions 0 1 4 4 0 8 5

* Excludes insured branches of foreign banks (IBAs).

** Through March 31, ratios annualized where appropriate. Asset growth rates are for 12 months ending March 31.

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

(dollar figures in millions)  1st Quarter

2021

4th Quarter

2020

1st Quarter

2020

%Change 

20Q1-21Q1

Number of institutions reporting 4,978 5,002 5,116 -2.7

Total employees (full-time equivalent) 2,067,213 2,065,606 2,069,356 -0.1

CONDITION DATA

Total assets $22,564,200 $21,883,275 $20,253,734 11.4

Loans secured by real estate 5,079,208 5,118,278 5,084,049 -0.1

1-4 Family residential mortgages 2,178,126 2,210,916 2,207,005 -1.3

Nonfarm nonresidential 1,575,028 1,568,515 1,534,469 2.6

 Construction and development 388,391 386,009 370,042 5.0

Home equity lines 286,055 300,311 338,273 -15.4

Commercial & industrial loans 2,457,390 2,440,715 2,550,595 -3.7

Loans to individuals 1,689,878 1,744,175 1,771,389 -4.6

 Credit cards 761,103 822,028 872,980 -12.8

Farm loans 68,053 71,781 75,242 -9.6

Other loans & leases 1,533,496 1,491,872 1,482,242 3.5

Less: Unearned income 3,094 3,196 2,300 34.5

Total loans & leases 10,824,931 10,863,625 10,961,218 -1.2

Less: Reserve for losses* 214,253 236,615 196,406 9.1

Net loans and leases 10,610,678 10,627,010 10,764,812 -1.4

Securities** 5,479,337 5,112,405 4,208,512 30.2

Other real estate owned 4,434 4,627 5,588 -20.6

Goodwill and other intangibles 392,016 386,755 391,789 0.1

All other assets 6,077,735 5,752,478 4,883,033 24.5

Total liabilities and capital 22,564,200 21,883,275 20,253,734 11.4

Deposits 18,458,784 17,823,563 15,777,037 17.0

 Domestic office deposits 16,935,688 16,289,744 14,305,863 18.4

Foreign office deposits 1,523,096 1,533,819 1,471,174 3.5

Other borrowed funds 1,099,727 1,091,994 1,560,167 -29.5

Subordinated debt 66,470 68,230 69,459 -4.3

All other liabilities 686,249 672,504 729,182 -5.9

Total equity capital (includes minority interests) 2,252,971 2,226,984 2,117,887 6.4

 Bank equity capital 2,250,497 2,224,378 2,115,323 6.4

Loans and leases 30-89 days past due 51,801 63,210 72,387 -28.4

Noncurrent loans and leases 122,979 128,873 102,391 20.1

Restructured loans and leases 50,804 49,323 46,841 8.5

Mortgage-backed securities 3,264,138 3,043,762 2,546,452 28.2

Earning assets 20,576,308 19,920,261 18,236,418 12.8

FHLB Advances 231,304 255,985 612,677 -62.2

Unused loan commitments 8,316,938 8,444,142 8,034,514 3.5

Trust assets 18,925,437 18,875,483 20,003,202 -5.4

Assets securitized and sold 460,283 480,364 551,354 -16.5

Notional amount of derivatives 191,683,719 165,711,590 199,743,579 -4.0

INCOME DATA

Full Year

 2020

Full Year

 2019 %Change

1st Quarter 

2021

1st Quarter 

2020

%Change 

20Q1-21Q1

Total interest income $603,753 $705,398 -14.4 $139,745 $169,537 -17.6

Total interest expense 77,098 158,731 -51.4 10,086 32,240 -68.7

Net interest income 526,655 546,668 -3.7 129,659 137,297 -5.6

Provision for credit losses*** 132,252 55,101 140.0 -14,532 52,695 -127.6

Total noninterest income 280,237 264,374 6.0 76,814 66,934 14.8

Total noninterest expense 498,986 466,147 7.0 124,857 128,920 -3.2

Securities gains (losses) 8,144 3,977 104.8 1,395 1,757 -20.6

Applicable income taxes 36,334 60,926 -40.4 20,686 5,812 255.9

Extraordinary gains, net**** -101 164 -161.6 0 -26 100.0

Total net income (includes minority interests) 147,362 233,008 -36.8 76,857 18,535 314.7

 Bank net income 147,126 232,772 -36.8 76,787 18,491 315.3

Net charge-offs 54,112 52,164 3.7 9,225 14,606 -36.9

Cash dividends 84,029 182,407 -53.9 23,860 32,678 -27.0

Retained earnings 63,097 50,365 25.3 52,928 -14,187 473.1

Net operating income 140,600 229,633 -38.8 75,724 17,062 343.8

* 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
2021   •   Volume 15  • Number 2

6 FDIC QUARTERLY

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

Asset Concentration Groups*

FIRST QUARTER

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting 4,978 11 5 1,124 2,645 270 40 297 509 77

Commercial banks 4,357 10 5 1,113 2,386 76 24 272 407 64

Savings institutions 621 1 0 11 259 194 16 25 102 13

Total assets (in billions) $22,564.2 $493.9 $5,752.9 $279.3 $7,867.4 $672.6 $151.7 $58.2 $116.2 $7,171.9

Commercial banks 21,128.9 408.5 5,752.9 273.9 7,401.2 117.8 144.3 53.9 92.3 6,883.9

Savings institutions 1,435.3 85.4 0.0 5.4 466.2 554.8 7.3 4.2 23.9 288.0

Total deposits (in billions) 18,458.8 351.2 4,408.2 237.8 6,554.4 598.6 129.9 47.6 99.8 6,031.3

Commercial banks 17,261.9 285.9 4,408.2 234.5 6,190.1 101.3 123.7 44.9 80.0 5,793.3

Savings institutions 1,196.9 65.3 0.0 3.3 364.3 497.4 6.2 2.7 19.8 238.0

Bank net income (in millions) 76,787 7,077 19,387 991 25,715 1,546 1,020 288 345 20,419

Commercial banks 72,796 6,230 19,387 945 24,331 401 1,007 108 298 20,088

Savings institutions 3,992 847 0 46 1,384 1,145 13 180 47 330

Performance Ratios (annualized, %)

Yield on earning assets 2.76 10.68 1.99 3.83 3.22 1.86 3.34 2.63 3.46 2.31

Cost of funding earning assets 0.20 1.06 0.11 0.44 0.24 0.18 0.54 0.26 0.37 0.15

Net interest margin 2.56 9.63 1.88 3.39 2.99 1.68 2.79 2.37 3.09 2.16

Noninterest income to assets 1.38 4.64 1.75 0.71 1.05 1.00 1.35 3.97 1.58 1.26

Noninterest expense to assets 2.25 7.04 2.09 2.24 2.26 1.50 0.97 3.69 3.09 2.10

Credit loss provision to assets** -0.26 -0.74 -0.46 0.05 -0.12 -0.02 -0.55 0.07 0.06 -0.26

Net operating income to assets 1.36 5.73 1.36 1.41 1.31 0.91 2.72 1.92 1.17 1.13

Pretax return on assets 1.75 7.49 1.79 1.64 1.68 1.20 3.67 2.56 1.39 1.42

Return on assets 1.38 5.74 1.37 1.45 1.33 0.93 2.73 2.04 1.22 1.15

Return on equity 13.73 44.38 15.47 12.96 12.05 11.35 30.49 13.39 10.64 11.70

Net charge-offs to loans and leases 0.34 2.66 0.55 0.01 0.15 0.02 0.27 0.05 0.04 0.30

Loan and lease loss provision to 

net charge-offs -145.25 -35.65 -243.33 619.68 -111.29 -303.12 -157.39 502.13 293.65 -189.10

Efficiency ratio 59.96 50.69 60.91 57.22 58.86 56.35 23.75 59.42 68.82 64.48

% of unprofitable institutions 3.88 0.00 0.00 2.85 2.57 9.26 7.50 12.46 5.30 1.30

% of institutions with earnings gains 74.71 100.00 60.00 66.37 84.91 58.15 92.50 42.76 65.03 79.22

Condition Ratios (%)

Earning assets to total assets 91.19 95.03 88.62 93.91 91.61 97.44 97.78 93.37 93.69 91.64

Loss allowance to:

Loans and leases 1.98 9.41 2.43 1.48 1.44 0.77 1.50 1.64 1.28 1.85

Noncurrent loans and leases 174.22 800.27 232.53 150.20 135.65 86.47 438.02 159.52 143.49 136.48

Noncurrent assets plus

other real estate owned to assets 0.57 0.87 0.34 0.65 0.72 0.25 0.25 0.33 0.56 0.60

Equity capital ratio 9.97 13.25 8.81 10.92 10.88 8.12 8.74 14.66 11.15 9.79

Core capital (leverage) ratio 8.85 14.20 7.88 10.61 9.43 8.02 9.16 14.40 11.16 8.55

Common equity tier 1 capital ratio*** 14.17 18.87 15.06 14.81 12.72 22.19 20.62 33.48 18.43 14.27

Tier 1 risk-based capital ratio*** 14.27 19.03 15.14 14.81 12.84 22.19 20.73 33.48 18.44 14.35

Total risk-based capital ratio*** 15.75 20.85 16.54 15.95 14.31 22.63 21.19 34.38 19.51 15.96

Net loans and leases to deposits 57.48 94.43 38.97 68.55 75.87 30.56 83.21 32.06 61.87 50.69

Net loans to total assets 47.02 67.14 29.86 58.35 63.20 27.20 71.26 26.24 53.11 42.63

Domestic deposits to total assets 75.06 68.25 53.65 85.12 83.10 88.83 85.64 81.87 85.82 81.73

Structural Changes

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

Institutions absorbed by mergers 25 0 0 7 14 1 0 1 1 1

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

PRIOR FIRST QUARTERS

(The way it was...)

Number of institutions 2020 5,116 11 5 1,261 2,706 384 50 214 428 57

 2018 5,606 11 5 1,355 2,936 412 61 274 495 57

 2016 6,122 14 5 1,459 3,045 502 60 336 635 66

Total assets (in billions) 2020 $20,253.7 $503.8 $5,231.1 $279.1 $7,548.7 $388.1 $154.6 $37.0 $78.8 $6,032.7

 2018 17,530.3 542.0 4,278.6 270.7 6,143.8 353.4 278.1 45.6 85.5 5,532.6

 2016 16,293.3 540.1 4,014.9 275.5 5,741.8 404.6 193.1 60.1 112.5 4,950.8

Return on assets (%) 2020 0.38 0.11 0.44 1.28 0.22 0.15 1.79 2.63 0.93 0.47

 2018 1.28 2.64 1.21 1.30 1.23 1.04 1.42 3.16 1.01 1.25

 2016 0.97 2.72 0.83 1.21 0.90 0.97 1.08 2.36 0.89 0.92

Net charge-offs to loans & leases (%) 2020 0.54 4.32 0.74 0.10 0.26 0.04 0.54 0.27 0.09 0.46

 2018 0.50 4.26 0.55 0.07 0.19 0.04 0.61 0.15 0.15 0.40

 2016 0.46 3.07 0.57 0.10 0.20 0.06 0.68 0.07 0.16 0.42

Noncurrent assets plus 

OREO to assets (%) 2020 0.54 1.39 0.30 0.94 0.64 1.18 0.41 0.40 0.65 0.50

 2018 0.70 1.25 0.47 0.87 0.69 1.77 0.42 0.55 0.78 0.77

 2016 0.96 0.88 0.69 0.75 0.99 1.84 0.90 0.62 1.10 1.10

Equity capital ratio (%) 2020 10.44 11.51 8.77 11.85 11.63 9.66 9.61 17.77 12.65 10.26

 2018 11.20 16.03 9.81 11.20 11.90 11.27 10.05 15.71 11.56 11.04

 2016 11.25 14.82 9.89 11.57 11.82 11.36 10.02 14.67 11.90 11.28

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

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

represents the provision for loan and lease losses.

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

FDIC QUARTERLY 7

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

Asset Size Distribution Geographic Regions*

FIRST QUARTER

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion to 

$10 Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion New York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting 4,978 895 3,119 806 145 13 588 568 1,064 1,285 1,103 370

Commercial banks 4,357 780 2,768 668 129 12 308 516 918 1,245 1,034 336

Savings institutions 621 115 351 138 16 1 280 52 146 40 69 34

Total assets (in billions) $22,564.2 $54.8 $1,118.0 $2,133.6 $6,638.9 $12,618.9 $4,112.7 $4,607.6 $5,417.3 $4,209.4 $1,871.5 $2,345.7

Commercial banks 21,128.9 48.0 979.9 1,780.9 6,052.3 12,267.8 3,684.4 4,464.8 5,321.4 4,169.7 1,293.6 2,195.0

Savings institutions 1,435.3 6.8 138.1 352.7 586.6 351.1 428.3 142.9 95.8 39.8 577.9 150.6

Total deposits (in billions) 18,458.8 45.9 951.7 1,780.3 5,496.0 10,184.8 3,395.2 3,848.5 4,201.0 3,434.2 1,609.8 1,970.1

Commercial banks 17,261.9 40.7 839.2 1,492.7 5,032.8 9,856.5 3,055.5 3,729.0 4,131.1 3,401.9 1,096.0 1,848.5

Savings institutions 1,196.9 5.2 112.6 287.6 463.2 328.4 339.7 119.5 69.9 32.3 513.8 121.6

Bank net income (in millions) 76,787 144 3,690 7,983 26,186 38,784 12,054 15,323 19,140 14,001 5,493 10,776

Commercial banks 72,796 130 3,187 6,917 24,363 38,199 10,969 15,070 18,580 13,876 4,569 9,731

Savings institutions 3,992 14 503 1,066 1,823 585 1,085 253 560 125 924 1,045

Performance Ratios (annualized, %)

Yield on earning assets 2.76 3.77 3.78 3.70 3.39 2.16 2.71 2.79 2.30 2.75 2.95 3.69

Cost of funding earning assets 0.20 0.44 0.41 0.34 0.28 0.11 0.25 0.17 0.12 0.19 0.21 0.34

Net interest margin 2.56 3.33 3.37 3.36 3.12 2.05 2.46 2.61 2.18 2.55 2.74 3.35

Noninterest income to assets 1.38 1.61 1.35 1.38 1.29 1.43 1.21 1.19 1.76 1.27 1.02 1.69

Noninterest expense to assets 2.25 3.45 2.88 2.60 2.36 2.07 2.11 2.19 2.27 2.24 2.19 2.60

Credit loss provision to assets** -0.26 0.04 0.09 0.04 -0.23 -0.36 -0.15 -0.30 -0.41 -0.28 -0.05 -0.15

Net operating income to assets 1.36 1.05 1.31 1.49 1.58 1.23 1.16 1.34 1.44 1.31 1.19 1.83

Pretax return on assets 1.75 1.20 1.58 1.92 2.07 1.58 1.52 1.68 1.87 1.65 1.46 2.46

Return on assets 1.38 1.07 1.35 1.53 1.60 1.25 1.19 1.35 1.44 1.34 1.20 1.88

Return on equity 13.73 7.92 12.27 14.10 14.96 13.12 11.37 12.62 15.28 13.70 12.11 18.27

Net charge-offs to loans and leases 0.34 0.04 0.04 0.15 0.41 0.39 0.35 0.36 0.28 0.42 0.13 0.43

Loan and lease loss provision to 

net charge-offs -145.25 189.32 401.46 44.04 -81.50 -228.63 -83.04 -161.69 -340.71 -114.04 -67.51 -48.91

Efficiency ratio 59.96 73.73 63.64 57.14 55.87 62.82 60.61 60.96 60.64 62.05 60.58 53.27

% of unprofitable institutions 3.88 12.63 2.31 0.74 1.38 0.00 5.10 6.69 4.70 2.02 3.08 4.05

% of institutions with earnings gains 74.71 57.43 74.99 89.95 90.34 76.92 79.42 75.18 75.09 75.02 69.45 80.00

Condition Ratios (%)

Earning assets to total assets 91.19 92.35 93.94 93.21 92.52 89.90 90.66 90.91 90.26 90.38 93.80 94.18

Loss allowance to:

Loans and leases 1.98 1.44 1.36 1.45 2.12 2.11 1.83 2.10 1.87 2.19 1.40 2.27

Noncurrent loans and leases 174.22 128.33 179.14 178.79 163.79 182.78 163.80 197.10 182.88 171.30 67.75 335.25

Noncurrent assets plus

other real estate owned to assets 0.57 0.70 0.55 0.60 0.79 0.45 0.57 0.53 0.46 0.61 1.04 0.44

Equity capital ratio 9.97 13.20 10.79 10.72 10.62 9.42 10.39 10.58 9.30 9.77 9.74 10.16

Core capital (leverage) ratio 8.85 13.20 10.77 10.29 9.55 8.05 9.09 8.68 8.30 8.94 8.82 9.90

Common equity tier 1 capital ratio*** 14.17 23.50 16.07 14.67 14.08 14.01 14.08 13.90 14.33 13.76 14.74 14.87

Tier 1 risk-based capital ratio*** 14.27 23.51 16.09 14.69 14.30 14.04 14.16 14.00 14.38 13.85 14.85 15.07

Total risk-based capital ratio*** 15.75 24.57 17.22 15.84 15.71 15.64 15.62 15.41 15.77 15.77 16.01 16.34

Net loans and leases to deposits 57.48 61.13 71.55 77.06 70.30 45.82 59.41 55.25 53.90 55.98 54.88 70.91

Net loans to total assets 47.02 51.27 60.91 64.30 58.19 36.98 49.04 46.15 41.80 45.67 47.21 59.55

Domestic deposits to total assets 75.06 83.87 85.12 83.36 80.83 69.69 77.40 81.10 68.36 65.65 85.98 82.69

Structural Changes

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

Institutions absorbed by mergers 25 8 15 2 0 0 5 3 3 8 4 2

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

PRIOR FIRST QUARTERS

(The way it was...)

Number of institutions 2020 5,116 1,124 3,168 680 131 13 617 582 1,099 1,317 1,126 375

 2018 5,606 1,393 3,453 628 123 9 684 656 1,208 1,426 1,214 418

 2016 6,122 1,663 3,734 616 100 9 752 753 1,325 1,528 1,299 465

Total assets (in billions) 2020 $20,253.7 $66.6 $1,066.7 $1,802.6 $5,770.4 $11,547.5 $3,787.4 $4,128.7 $4,719.6 $4,027.1 $1,547.4 $2,043.5

 2018 17,530.3 83.2 1,130.2 1,700.5 5,827.3 8,789.1 3,273.9 3,604.2 3,969.6 3,674.5 1,102.9 1,905.3

 2016 16,293.3 97.8 1,179.8 1,723.1 5,013.9 8,278.7 3,084.7 3,417.7 3,624.0 3,543.5 962.2 1,661.2

Return on assets (%) 2020 0.38 0.83 1.09 0.76 -0.16 0.52 0.55 0.04 0.49 0.49 0.77 0.00

 2018 1.28 0.93 1.18 1.27 1.37 1.24 1.15 1.31 1.27 1.17 1.35 1.63

 2016 0.97 0.92 1.03 1.04 1.01 0.92 0.81 0.88 0.93 1.03 1.05 1.32

Net charge-offs to loans & leases (%) 2020 0.54 0.12 0.11 0.22 0.76 0.53 0.51 0.62 0.43 0.53 0.31 0.81

 2018 0.50 0.19 0.08 0.18 0.74 0.46 0.62 0.56 0.24 0.53 0.21 0.74

 2016 0.46 0.12 0.10 0.19 0.62 0.49 0.49 0.54 0.26 0.55 0.30 0.52

Noncurrent assets plus 

OREO to assets (%) 2020 0.54 0.97 0.74 0.68 0.68 0.43 0.49 0.55 0.47 0.61 0.70 0.52

 2018 0.70 1.02 0.83 0.70 0.68 0.69 0.63 0.79 0.66 0.79 0.82 0.47

 2016 0.96 1.22 1.10 0.93 0.81 1.04 0.77 1.13 0.93 1.15 1.10 0.56

Equity capital ratio (%) 2020 10.44 14.05 11.98 11.69 11.27 9.68 10.71 11.24 9.83 9.75 10.94 10.76

 2018 11.20 13.10 11.24 11.71 12.19 10.43 12.36 12.04 10.37 10.04 11.48 11.45

 2016 11.25 12.86 11.34 11.72 12.04 10.65 12.00 12.35 10.32 10.14 11.10 12.12

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

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

represents the provision for loan and lease losses.

*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.
2021   •   Volume 15  • Number 2

8 FDIC QUARTERLY

TABLE IV-A. Full Year 2020, All FDIC-Insured Institutions

Asset Concentration Groups*

FULL YEAR

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting 5,002 11 5 1,163 2,667 291 36 277 485 67

Commercial banks 4,375 10 5 1,152 2,403 75 24 251 399 56

Savings institutions 627 1 0 11 264 216 12 26 86 11

Total assets (in billions) $21,883.3 $492.6 $5,553.8 $287.7 $7,591.1 $684.0 $144.8 $51.5 $105.7 $6,972.0

Commercial banks 20,505.3 407.3 5,553.8 282.6 7,135.6 81.0 138.7 46.7 84.1 6,775.5

Savings institutions 1,377.9 85.3 0.0 5.2 455.5 603.0 6.0 4.8 21.7 196.5

Total deposits (in billions) 17,823.6 349.0 4,270.5 242.5 6,251.3 603.1 123.1 41.9 89.9 5,852.1

Commercial banks 16,684.2 283.2 4,270.5 239.3 5,900.1 67.7 118.0 38.7 72.3 5,694.4

Savings institutions 1,139.3 65.8 0.0 3.2 351.3 535.4 5.2 3.2 17.6 157.7

Bank net income (in millions) 147,126 9,710 35,890 3,499 52,700 5,480 2,118 1,244 1,082 35,403

Commercial banks 136,457 8,281 35,890 3,337 48,936 1,107 2,068 455 953 35,430

Savings institutions 10,669 1,429 0 162 3,765 4,372 49 789 129 -26

Performance Ratios (%)

Yield on earning assets 3.24 11.24 2.51 4.22 3.63 2.10 3.96 2.95 3.87 2.77

Cost of funding earning assets 0.41 1.51 0.29 0.67 0.47 0.25 0.84 0.38 0.53 0.35

Net interest margin 2.82 9.73 2.22 3.54 3.16 1.84 3.11 2.57 3.34 2.42

Noninterest income to assets 1.36 4.36 1.69 0.68 1.07 0.99 0.44 4.70 1.26 1.25

Noninterest expense to assets 2.43 6.44 2.20 2.40 2.54 1.54 1.05 3.97 3.03 2.25

Credit loss provision to assets** 0.64 4.75 0.60 0.18 0.51 0.08 0.32 0.09 0.14 0.60

Net operating income to assets 0.68 1.92 0.66 1.25 0.71 0.91 1.57 2.46 1.07 0.50

Pretax return on assets 0.89 2.44 0.89 1.46 0.93 1.18 2.13 3.18 1.24 0.64

Return on assets 0.72 1.92 0.70 1.30 0.74 0.92 1.59 2.59 1.10 0.53

Return on equity 6.85 16.09 7.59 11.14 6.40 10.53 16.46 16.22 8.98 5.24

Net charge-offs to loans and leases 0.50 3.73 0.69 0.14 0.25 0.05 0.52 0.19 0.07 0.43

Loan and lease loss provision to 

net charge-offs 243.46 162.41 258.82 195.38 292.95 615.10 83.46 157.77 312.10 276.63

Efficiency ratio 59.84 46.80 59.94 59.74 59.91 55.16 30.28 55.77 69.20 64.43

% of unprofitable institutions 4.64 27.27 0.00 2.67 4.39 9.97 8.33 8.30 4.74 4.48

% of institutions with earnings gains 52.96 27.27 20.00 49.96 57.86 45.02 61.11 35.02 49.90 43.28

Condition Ratios (%)

Earning assets to total assets 91.03 94.81 88.60 93.39 91.35 97.37 97.56 93.04 93.46 91.44

Loss allowance to:

Loans and leases 2.18 9.79 2.90 1.49 1.52 0.83 1.76 1.59 1.28 2.03

Noncurrent loans and leases 183.60 838.76 254.94 147.92 140.88 69.09 499.26 158.17 149.27 142.29

Noncurrent assets plus

other real estate owned to assets 0.61 0.92 0.38 0.69 0.76 0.30 0.26 0.34 0.56 0.66

Equity capital ratio 10.16 12.61 8.92 11.37 11.22 8.40 9.21 15.79 11.81 9.90

Core capital (leverage) ratio 8.81 13.63 7.94 10.66 9.38 7.80 9.86 14.71 11.36 8.45

Common equity tier 1 capital ratio*** 13.85 17.68 14.97 14.45 12.43 21.41 20.91 34.27 19.28 13.90

Tier 1 risk-based capital ratio*** 13.94 17.54 15.04 14.45 12.53 21.41 21.02 34.27 19.29 13.98

Total risk-based capital ratio*** 15.46 19.44 16.43 15.60 14.04 21.84 21.80 35.15 20.36 15.65

Net loans and leases to deposits 59.62 99.89 40.03 71.85 79.09 27.17 83.01 32.72 63.58 53.21

Net loans to total assets 48.56 70.78 30.78 60.56 65.13 23.96 70.62 26.64 54.06 44.66

Domestic deposits to total assets 74.44 67.96 53.14 84.29 82.13 88.01 85.05 81.42 85.02 81.32

Structural Changes

New reporters 6 0 0 0 1 0 0 5 0 0

Institutions absorbed by mergers 168 1 0 27 131 4 0 0 2 3

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

PRIOR FULL YEARS

(The way it was...)

Number of institutions 2019 5,177 12 5 1,291 2,733 393 58 210 428 47

 2017 5,670 11 5 1,389 2,944 420 59 272 510 60

 2015 6,182 14 4 1,479 3,089 500 65 332 632 67

Total assets (in billions) 2019 $18,645.3 $530.8 $4,481.1 $283.5 $6,735.8 $392.7 $230.7 $38.3 $76.3 $5,876.2

 2017 17,415.4 562.7 4,196.0 282.6 6,026.0 349.2 270.9 46.9 88.8 5,592.2

 2015 15,967.7 549.1 3,774.6 277.6 5,892.1 385.4 187.3 57.5 113.9 4,730.3

Return on assets (%) 2019 1.29 3.27 1.23 1.33 1.18 1.20 1.21 3.56 1.17 1.27

 2017 0.97 1.52 0.62 1.05 1.02 0.93 1.02 2.61 0.91 1.10

 2015 1.04 2.84 0.87 0.96 0.95 0.83 1.04 2.69 0.91 1.12

Net charge-offs to loans & leases (%) 2019 0.52 4.15 0.72 0.18 0.20 0.03 0.82 0.17 0.13 0.39

 2017 0.50 3.95 0.56 0.16 0.21 0.04 0.60 0.23 0.15 0.43

 2015 0.44 2.79 0.59 0.10 0.20 0.13 0.62 0.20 0.20 0.41

Noncurrent assets plus 

OREO to assets (%) 2019 0.55 1.39 0.33 0.81 0.60 1.18 0.48 0.45 0.62 0.52

 2017 0.73 1.25 0.51 0.77 0.70 1.70 0.36 0.59 0.81 0.82

 2015 0.97 0.90 0.71 0.68 0.93 1.92 0.97 0.61 1.19 1.16

Equity capital ratio (%) 2019 11.32 12.81 10.20 11.85 12.27 10.94 10.41 18.48 12.79 10.93

 2017 11.22 15.10 9.83 11.18 11.95 11.21 10.00 15.26 11.94 11.09

 2015 11.24 14.29 10.13 11.32 11.76 11.36 10.12 15.04 11.80 11.08

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

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

represents the provision for loan and lease losses.

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

FDIC QUARTERLY 9

TABLE IV-A. Full Year 2020, All FDIC-Insured Institutions 

Asset Size Distribution Geographic Regions*

FULL YEAR

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion to 

$10 Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion New York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting 5,002 946 3,129 776 138 13 593 570 1,069 1,292 1,107 371

Commercial banks 4,375 827 2,769 644 123 12 308 518 922 1,252 1,038 337

Savings institutions 627 119 360 132 15 1 285 52 147 40 69 34

Total assets (in billions) $21,883.3 $57.2 $1,101.4 $2,069.8 $6,358.5 $12,296.4 $4,015.1 $4,485.3 $5,205.7 $4,148.6 $1,792.6 $2,236.1

Commercial banks 20,505.3 50.1 959.5 1,727.3 5,814.0 11,954.4 3,596.1 4,360.6 5,108.3 4,110.3 1,241.8 2,088.2

Savings institutions 1,377.9 7.0 141.9 342.5 544.5 342.0 418.9 124.7 97.4 38.2 550.9 147.9

Total deposits (in billions) 17,823.6 47.6 926.1 1,703.8 5,226.2 9,919.9 3,304.6 3,718.1 4,041.0 3,366.6 1,529.7 1,863.6

Commercial banks 16,684.2 42.3 812.1 1,428.9 4,798.8 9,602.1 2,977.3 3,617.6 3,971.4 3,335.8 1,038.1 1,744.1

Savings institutions 1,139.3 5.3 114.0 274.9 427.3 317.8 327.4 100.5 69.6 30.7 491.6 119.5

Bank net income (in millions) 147,126 457 12,506 21,310 42,349 70,505 23,601 24,728 41,818 19,610 15,761 21,607

Commercial banks 136,457 421 10,676 18,267 39,150 67,943 20,530 24,987 39,720 19,190 12,558 19,472

Savings institutions 10,669 36 1,830 3,043 3,198 2,562 3,071 -259 2,098 420 3,204 2,135

Performance Ratios (%)

Yield on earning assets 3.24 4.04 4.12 3.99 3.92 2.65 3.15 3.25 2.79 3.21 3.42 4.25

Cost of funding earning assets 0.41 0.61 0.63 0.58 0.55 0.29 0.50 0.36 0.30 0.41 0.38 0.64

Net interest margin 2.82 3.43 3.49 3.41 3.37 2.36 2.65 2.88 2.49 2.80 3.05 3.61

Noninterest income to assets 1.36 1.41 1.33 1.30 1.32 1.40 1.21 1.21 1.76 1.14 1.10 1.65

Noninterest expense to assets 2.43 3.55 3.01 2.71 2.65 2.20 2.24 2.42 2.37 2.45 2.41 2.86

Credit loss provision to assets** 0.64 0.13 0.23 0.43 0.86 0.61 0.60 0.69 0.55 0.74 0.41 0.84

Net operating income to assets 0.68 0.81 1.17 1.07 0.68 0.58 0.61 0.56 0.84 0.43 0.94 0.99

Pretax return on assets 0.89 0.95 1.40 1.38 0.94 0.74 0.78 0.74 1.10 0.55 1.17 1.38

Return on assets 0.72 0.84 1.21 1.11 0.71 0.61 0.62 0.59 0.87 0.49 0.98 1.03

Return on equity 6.85 6.09 10.44 9.90 6.34 6.19 5.76 5.27 8.75 4.95 9.28 9.59

Net charge-offs to loans and leases 0.50 0.13 0.12 0.22 0.66 0.51 0.48 0.54 0.41 0.53 0.31 0.70

Loan and lease loss provision to 

net charge-offs 243.46 167.39 284.76 282.30 205.34 275.34 237.34 238.98 280.72 276.08 252.82 180.23

Efficiency ratio 59.84 77.21 65.17 59.75 55.02 62.26 59.44 60.31 59.16 65.51 60.52 52.52

% of unprofitable institutions 4.64 11.42 3.04 1.80 10.87 0.00 6.75 7.89 4.12 2.48 3.97 7.28

% of institutions with earnings gains 52.96 39.43 58.07 54.90 22.46 15.38 46.21 47.02 59.31 56.89 49.86 50.13

Condition Ratios (%)

Earning assets to total assets 91.03 91.97 93.64 93.06 92.37 89.76 90.93 90.49 90.03 90.25 93.72 93.91

Loss allowance to:

Loans and leases 2.18 1.43 1.35 1.41 2.35 2.39 2.00 2.30 2.17 2.37 1.46 2.45

Noncurrent loans and leases 183.60 126.49 169.35 164.00 177.76 194.23 173.36 215.27 197.98 168.93 69.97 350.99

Noncurrent assets plus

other real estate owned to assets 0.61 0.74 0.60 0.65 0.83 0.50 0.60 0.55 0.52 0.69 1.08 0.48

Equity capital ratio 10.16 13.44 11.27 10.94 10.84 9.57 10.49 10.78 9.59 9.80 10.08 10.44

Core capital (leverage) ratio 8.81 13.04 10.86 10.20 9.47 8.04 9.04 8.60 8.38 8.85 8.66 9.88

Common equity tier 1 capital ratio*** 13.85 22.35 15.92 14.21 13.57 13.81 13.78 13.54 14.02 13.70 13.93 14.45

Tier 1 risk-based capital ratio*** 13.94 22.35 15.94 14.23 13.77 13.85 13.86 13.63 14.08 13.79 14.04 14.61

Total risk-based capital ratio*** 15.46 23.42 17.08 15.38 15.26 15.48 15.37 15.13 15.49 15.67 15.23 15.93

Net loans and leases to deposits 59.62 63.98 74.89 80.98 72.65 47.65 60.49 58.06 55.85 58.07 57.34 74.06

Net loans to total assets 48.56 53.26 62.97 66.66 59.71 38.44 49.79 48.13 43.36 47.13 48.93 61.72

Domestic deposits to total assets 74.44 83.25 84.08 82.20 80.11 69.29 76.48 80.34 68.03 65.32 85.30 82.08

Structural Changes

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

Institutions absorbed by mergers 168 42 107 17 2 0 35 16 36 35 39 7

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

PRIOR FULL YEARS

(The way it was...)

Number of institutions 2019 5,177 1,156 3,225 656 130 10 625 587 1,118 1,330 1,138 379

 2017 5,670 1,407 3,513 627 114 9 693 668 1,214 1,438 1,235 422

 2015 6,182 1,688 3,792 595 99 8 762 762 1,337 1,543 1,307 471

Total assets (in billions) 2019 $18,645.3 $68.6 $1,087.9 $1,753.9 $6,071.6 $9,663.4 $3,407.7 $3,847.5 $4,235.2 $3,796.7 $1,204.6 $2,153.7

 2017 17,415.4 83.7 1,154.2 1,751.7 5,699.2 8,726.7 3,248.1 3,601.0 3,918.1 3,683.2 1,090.0 1,875.1

 2015 15,967.7 99.2 1,199.9 1,682.4 5,163.6 7,822.6 3,074.1 3,372.6 3,503.7 3,444.0 943.1 1,630.3

Return on assets (%) 2019 1.29 1.01 1.29 1.30 1.35 1.26 1.09 1.29 1.34 1.20 1.32 1.66

 2017 0.97 0.83 1.04 1.05 1.04 0.89 0.85 1.00 1.00 0.76 1.12 1.36

 2015 1.04 0.84 1.07 1.10 1.02 1.05 0.87 1.03 0.96 1.16 1.09 1.31

Net charge-offs to loans & leases (%) 2019 0.52 0.21 0.14 0.21 0.70 0.51 0.48 0.58 0.42 0.53 0.24 0.78

 2017 0.50 0.21 0.15 0.22 0.71 0.47 0.58 0.61 0.27 0.51 0.28 0.67

 2015 0.44 0.19 0.16 0.21 0.56 0.48 0.48 0.50 0.27 0.52 0.24 0.52

Noncurrent assets plus 

OREO to assets (%) 2019 0.55 0.94 0.70 0.57 0.62 0.48 0.51 0.57 0.49 0.61 0.84 0.42

 2017 0.73 1.01 0.83 0.66 0.70 0.74 0.65 0.83 0.67 0.86 0.81 0.45

 2015 0.97 1.25 1.12 0.93 0.75 1.09 0.75 1.15 0.94 1.19 1.04 0.53

Equity capital ratio (%) 2019 11.32 14.27 12.01 12.03 11.86 10.76 11.83 12.23 10.89 10.24 12.16 11.15

 2017 11.22 13.01 11.29 11.82 12.13 10.47 12.34 12.06 10.42 9.99 11.49 11.58

 2015 11.24 12.55 11.25 11.69 12.02 10.60 11.78 12.22 10.50 10.22 11.04 12.03

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

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

represents the provision for loan and lease losses.

*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.
2021   •   Volume 15  • Number 2

10 FDIC QUARTERLY

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

Asset Concentration Groups*

March 31, 2021 All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Percent of Loans 30-89 Days Past Due

All loans secured by real estate 0.50 0.31 0.35 0.57 0.35 0.35 0.12 0.82 0.66 0.94

Construction and development 0.39 0.48 0.35 0.67 0.32 1.01 0.05 0.63 0.48 0.66

Nonfarm nonresidential 0.27 0.00 0.43 0.41 0.23 0.28 0.08 0.60 0.49 0.36

Multifamily residential real estate 0.17 0.00 0.26 0.06 0.13 0.34 0.10 0.12 0.22 0.26

Home equity loans 0.37 0.00 0.35 0.30 0.32 0.36 0.43 0.44 0.43 0.49

Other 1-4 family residential 0.77 0.31 0.38 0.69 0.58 0.33 0.12 1.06 0.79 1.27

Commercial and industrial loans 0.27 0.40 0.45 0.55 0.21 0.22 0.04 0.55 0.56 0.25

Loans to individuals 0.88 0.97 0.74 0.68 0.73 0.31 0.67 1.01 0.83 1.03

Credit card loans 0.87 0.98 0.73 0.88 0.97 0.84 0.74 1.81 0.59 0.85

Other loans to individuals 0.89 0.78 0.78 0.66 0.71 0.29 0.67 0.98 0.83 1.11

All other loans and leases (including farm) 0.32 0.41 0.51 0.96 0.25 0.21 0.01 0.67 0.72 0.20

Total loans and leases 0.48 0.91 0.49 0.65 0.33 0.33 0.47 0.79 0.67 0.66

Percent of Loans Noncurrent**

All real estate loans 1.61 0.70 1.78 1.01 1.32 0.97 0.29 1.22 0.94 2.45

Construction and development 0.72 1.97 2.31 0.66 0.47 1.10 0.44 1.28 0.36 1.50

Nonfarm nonresidential 0.97 0.00 1.37 0.89 0.87 0.68 0.66 1.20 0.96 1.35

Multifamily residential real estate 0.25 0.00 0.18 0.43 0.22 0.55 0.35 0.21 0.46 0.49

Home equity loans 2.17 0.00 5.45 0.28 1.37 0.59 0.70 0.33 0.46 2.78

Other 1-4 family residential 2.50 0.68 2.14 0.69 2.56 1.03 0.26 1.12 1.01 3.02

Commercial and industrial loans 0.90 0.37 1.28 0.87 0.77 0.86 0.47 0.70 0.88 0.99

Loans to individuals 0.81 1.27 0.75 0.42 0.77 0.12 0.37 0.52 0.48 0.69

Credit card loans 1.15 1.33 0.95 0.39 1.16 0.56 0.61 1.08 0.46 1.14

Other loans to individuals 0.53 0.36 0.26 0.43 0.74 0.11 0.36 0.49 0.48 0.50

All other loans and leases (including farm) 0.32 0.00 0.27 1.08 0.41 0.09 0.05 0.42 0.86 0.26

Total loans and leases 1.14 1.18 1.04 0.98 1.06 0.89 0.34 1.03 0.89 1.36

Percent of Loans Charged-Off (net, YTD)

All real estate loans 0.01 0.04 -0.05 0.01 0.03 0.00 0.01 -0.07 0.01 0.00

Construction and development 0.02 0.49 0.00 -0.01 0.02 -0.02 0.05 -0.12 0.03 0.07

Nonfarm nonresidential 0.07 0.00 -0.01 0.00 0.09 0.02 0.08 -0.16 0.03 0.03

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

Home equity loans -0.13 0.00 -0.45 0.00 -0.04 -0.04 0.12 0.01 -0.02 -0.23

Other 1-4 family residential -0.01 0.03 -0.05 0.01 -0.01 0.00 0.00 -0.02 0.01 -0.01

Commercial and industrial loans 0.26 1.06 0.45 0.03 0.23 0.05 0.01 -0.18 0.10 0.19

Loans to individuals 1.65 2.84 2.28 0.22 0.81 0.44 0.40 0.80 0.16 1.26

Credit card loans 2.92 2.91 2.96 0.97 3.71 2.46 1.55 0.60 1.33 2.79

Other loans to individuals 0.55 1.77 0.43 0.13 0.56 0.37 0.39 0.81 0.15 0.56

All other loans and leases (including farm) 0.10 0.01 0.05 -0.02 0.13 0.04 0.00 0.92 0.04 0.13

Total loans and leases 0.34 2.66 0.55 0.01 0.15 0.02 0.27 0.05 0.04 0.30

Loans Outstanding (in billions)

All real estate loans $5,079.2 $1.9 $551.7 $100.4 $2,968.7 $157.7 $24.8 $10.8 $48.5 $1,214.6

Construction and development 388.4 0.0 18.3 5.8 297.8 4.7 0.3 1.0 3.3 57.3

Nonfarm nonresidential 1,575.0 0.0 57.3 26.2 1,203.1 13.1 1.3 3.5 10.5 260.1

Multifamily residential real estate 481.3 0.0 82.9 3.4 335.9 4.1 0.4 0.3 1.4 52.8

Home equity loans 286.1 0.0 29.2 1.5 162.0 7.2 0.2 0.3 1.6 84.1

Other 1-4 family residential 2,178.1 1.9 309.3 23.2 918.4 127.8 22.6 4.9 28.1 741.9

Commercial and industrial loans 2,457.4 35.2 356.2 25.7 1,317.9 9.7 7.9 2.5 6.9 695.3

Loans to individuals 1,689.9 328.7 346.0 5.5 337.5 9.8 72.4 1.4 4.6 583.8

Credit card loans 761.1 307.4 249.6 0.6 25.6 0.3 0.3 0.1 0.0 177.1

Other loans to individuals 928.8 21.3 96.4 5.0 311.9 9.5 72.1 1.3 4.6 406.7

All other loans and leases (including farm) 1,601.5 0.2 506.8 33.8 424.0 7.2 4.5 0.9 2.5 621.5

Total loans and leases (plus unearned income) 10,828.0 366.1 1,760.8 165.5 5,048.1 184.5 109.7 15.5 62.6 3,115.2

Memo: Other Real Estate Owned (in millions)

All other real estate owned 4,434.3 8.1 280.5 180.8 2,947.1 49.5 3.2 32.5 86.6 846.1

Construction and development 885.5 0.2 1.0 25.5 765.5 12.6 1.8 12.1 20.4 46.5

Nonfarm nonresidential 2,357.5 7.9 95.0 68.8 1,623.1 9.7 0.4 15.0 34.5 503.0

Multifamily residential real estate 65.5 0.0 0.0 4.6 60.3 0.4 0.0 0.0 0.0 0.2

1-4 family residential 959.1 0.1 139.5 32.6 431.3 26.8 1.0 5.3 28.0 294.5

Farmland 121.9 0.0 0.0 49.4 66.9 0.0 0.0 0.0 3.8 1.8

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

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

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

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

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

25 percent of total assets.

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

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

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

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

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

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

FDIC QUARTERLY 11

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

Asset Size Distribution Geographic Regions*

March 31, 2021 All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to 

$10 Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion New York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate 0.50 0.83 0.46 0.32 0.36 0.74 0.39 0.53 0.48 0.81 0.52 0.22

Construction and development 0.39 0.84 0.53 0.45 0.28 0.45 0.43 0.45 0.35 0.45 0.36 0.28

Nonfarm nonresidential 0.27 0.59 0.32 0.26 0.22 0.35 0.32 0.20 0.29 0.30 0.25 0.24

Multifamily residential real estate 0.17 0.38 0.18 0.15 0.13 0.25 0.16 0.17 0.24 0.25 0.17 0.06

Home equity loans 0.37 0.45 0.38 0.26 0.33 0.44 0.32 0.42 0.36 0.48 0.36 0.23

Other 1-4 family residential 0.77 1.02 0.60 0.43 0.57 1.03 0.54 0.81 0.67 1.31 0.99 0.24

Commercial and industrial loans 0.27 0.92 0.36 0.25 0.22 0.30 0.22 0.26 0.28 0.29 0.35 0.23

Loans to individuals 0.88 1.00 1.03 0.97 0.77 0.96 0.76 1.26 0.60 0.85 0.60 0.90

Credit card loans 0.87 1.09 1.27 2.13 0.89 0.79 0.92 1.00 0.64 0.86 0.41 0.95

Other loans to individuals 0.89 1.00 1.01 0.56 0.67 1.12 0.66 1.47 0.56 0.84 0.66 0.86

All other loans and leases (including farm) 0.32 0.78 0.75 0.38 0.19 0.36 0.14 0.18 0.43 0.49 0.22 0.25

Total loans and leases 0.48 0.85 0.48 0.35 0.38 0.59 0.38 0.54 0.44 0.64 0.46 0.38

Percent of Loans Noncurrent** 

All real estate loans 1.61 1.17 0.79 0.83 1.90 1.96 1.51 1.56 1.60 1.78 2.92 0.56

Construction and development 0.72 0.56 0.59 0.56 0.45 1.48 1.27 0.54 1.09 0.51 0.32 0.48

Nonfarm nonresidential 0.97 1.39 0.81 0.81 0.99 1.20 1.21 0.82 1.07 1.23 0.70 0.70

Multifamily residential real estate 0.25 0.91 0.30 0.25 0.22 0.27 0.24 0.56 0.18 0.34 0.21 0.16

Home equity loans 2.17 0.43 0.65 0.60 1.39 3.38 2.09 1.60 2.67 3.51 1.02 0.92

Other 1-4 family residential 2.50 1.05 0.79 1.13 3.59 2.39 2.28 2.36 2.09 2.36 7.73 0.51

Commercial and industrial loans 0.90 1.08 0.58 0.80 0.84 1.01 0.85 0.82 0.80 1.30 0.80 0.82

Loans to individuals 0.81 0.70 0.57 0.97 0.84 0.78 0.86 0.96 0.48 0.85 0.69 0.92

Credit card loans 1.15 0.78 1.59 2.47 1.25 1.01 1.34 1.30 0.85 1.09 1.12 1.21

Other loans to individuals 0.53 0.70 0.50 0.45 0.51 0.57 0.55 0.70 0.21 0.46 0.56 0.70

All other loans and leases (including farm) 0.32 1.15 0.98 0.38 0.39 0.26 0.20 0.18 0.38 0.42 0.29 0.39

Total loans and leases 1.14 1.12 0.76 0.81 1.29 1.15 1.11 1.07 1.02 1.28 2.07 0.68

Percent of Loans Charged-Off 

(net, YTD) 

All real estate loans 0.01 0.01 0.00 0.01 0.05 -0.02 0.05 0.00 0.00 0.01 0.01 0.01

Construction and development 0.02 -0.01 -0.02 -0.02 0.04 0.06 0.13 -0.01 0.02 -0.02 0.01 -0.04

Nonfarm nonresidential 0.07 0.00 0.00 0.03 0.14 0.02 0.12 0.05 0.08 0.08 0.04 0.04

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

Home equity loans -0.13 -0.03 -0.01 -0.01 -0.03 -0.26 -0.06 -0.19 -0.15 -0.19 -0.10 -0.06

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

Commercial and industrial loans 0.26 0.07 0.06 0.19 0.27 0.29 0.24 0.21 0.30 0.33 0.28 0.20

Loans to individuals 1.65 0.22 0.60 1.67 1.62 1.70 1.75 1.57 1.35 2.27 0.79 1.57

Credit card loans 2.92 3.06 3.83 5.16 2.79 2.92 3.23 2.91 2.76 3.08 1.78 2.78

Other loans to individuals 0.55 0.20 0.38 0.39 0.61 0.53 0.73 0.47 0.22 0.91 0.46 0.63

All other loans and leases (including farm) 0.10 0.06 0.08 0.08 0.16 0.07 0.09 0.14 0.06 0.07 0.03 0.24

Total loans and leases 0.34 0.04 0.04 0.15 0.41 0.39 0.35 0.36 0.28 0.42 0.13 0.43

Loans Outstanding (in billions) 

All real estate loans $5,079.2 $18.9 $500.3 $943.9 $1,869.5 $1,746.6 $1,065.0 $913.1 $1,002.5 $875.9 $557.1 $665.6

Construction and development 388.4 1.0 45.9 93.6 164.2 83.7 77.3 63.2 64.1 54.4 83.0 46.3

Nonfarm nonresidential 1,575.0 3.9 190.0 406.8 641.9 332.4 363.0 305.2 231.5 208.7 231.6 235.0

Multifamily residential real estate 481.3 0.5 28.7 103.1 214.0 135.1 166.2 45.4 119.4 43.9 26.0 80.3

Home equity loans 286.1 0.4 14.9 34.7 105.0 131.1 63.1 67.5 68.5 44.7 18.2 23.9

Other 1-4 family residential 2,178.1 9.3 172.2 275.4 728.6 992.7 390.4 418.9 494.8 424.8 179.4 269.9

Commercial and industrial loans 2,457.4 4.4 125.2 299.3 911.7 1,116.9 439.4 560.7 549.7 414.4 201.6 291.5

Loans to individuals 1,689.9 1.7 26.0 76.6 726.4 859.1 300.8 393.9 333.1 278.4 64.7 319.0

Credit card loans 761.1 0.0 1.6 19.9 329.7 409.9 119.1 172.7 143.1 173.6 15.5 137.2

Other loans to individuals 928.8 1.7 24.4 56.7 396.8 449.2 181.7 221.2 190.0 104.8 49.2 181.8

All other loans and leases (including farm) 1,601.5 3.6 39.4 73.2 441.1 1,044.3 250.6 304.5 422.5 397.1 73.1 153.6

Total loans and leases 

(plus unearned income) 10,828.0 28.5 690.9 1,393.1 3,948.7 4,766.8 2,055.8 2,172.2 2,307.8 1,965.9 896.6 1,429.7

Memo: Other Real Estate Owned 

(in millions) 

All other real estate owned 4,434.3 63.6 925.7 1,410.1 976.6 1,058.3 573.3 1,057.4 737.6 629.5 796.1 640.5

Construction and development 885.5 13.2 364.8 269.3 200.1 38.2 99.4 223.5 103.3 142.7 268.1 48.3

Nonfarm nonresidential 2,357.5 21.8 323.2 941.5 454.6 616.5 216.5 605.1 341.9 302.9 364.8 526.2

Multifamily residential real estate 65.5 5.1 34.5 17.1 8.2 0.7 8.1 21.8 6.2 8.6 13.3 7.4

1-4 family residential 959.1 20.0 148.5 134.7 298.4 357.5 249.1 191.6 242.8 122.7 107.6 45.3

Farmland 121.9 3.6 54.7 47.6 15.4 0.6 0.1 15.3 18.3 32.6 42.2 13.3

* Regions:

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

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

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

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

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

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

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status.
2021   •   Volume 15  • Number 2

12 FDIC QUARTERLY

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

1st 

Quarter 

2021

4th 

Quarter 

2020

3rd

Quarter 

2020

2nd

Quarter 

2020

1st 

Quarter 

2020

% 

Change 

20Q1-

2 1Q1

Asset Size Distribution

(dollar figures in millions;

notional amounts unless otherwise indicated)

Less 

Than 

$100 

Million

$100 

Million 

to $1 

Billion

$1 

Billion 

to $10 

Billion

$10 

Billion 

to $250 

Billion

Greater 

Than 

$250 

Billion

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives 1,387 1,387 1,374 1,381 1,361 1.9 31 673 535 135 13

Total assets of institutions reporting derivatives $20,832,233 $20,149,152 $19,490,738 $19,424,357 $18,647,664 11.7 $2,241 $311,534 $1,561,281 $6,338,307 $12,618,870

Total deposits of institutions reporting derivatives 17,013,500 16,393,695 15,707,363 15,568,557 14,473,395 17.6 1,858 263,769 1,303,801 5,259,257 10,184,815

Total derivatives 191,683,719 165,711,590 181,124,600 181,706,545 199,743,579 -4.0 284 25,988 226,847 4,240,579 187,190,021

Derivative Contracts by Underlying Risk Exposure 

Interest rate 137,476,936 116,058,227 129,835,389 132,102,551 146,069,414 -5.9 283 25,666 218,317 2,287,833 134,944,837

Foreign exchange* 45,257,498 41,448,704 42,148,550 41,266,839 44,381,157 2.0 0 0 4,360 1,719,734 43,533,403

Equity 4,004,712 3,774,715 4,022,629 3,574,339 3,661,579 9.4 0 20 26 54,406 3,950,259

Commodity & other (excluding credit derivatives) 1,582,254 1,394,504 1,536,154 1,506,889 1,643,731 -3.7 0 0 93 90,773 1,491,388

Credit 3,361,030 3,034,285 3,580,623 3,254,590 3,986,479 -15.7 0 25 3,037 87,833 3,270,134

Total 191,682,430 165,710,435 181,123,345 181,705,208 199,742,360 -4.0 283 25,711 225,833 4,240,579 187,190,021

Derivative Contracts by Transaction Type 

Swaps 107,718,346 96,423,475 99,580,043 101,734,113 110,598,852 -2.6 2 2,162 121,376 2,379,600 105,215,206

Futures & forwards 40,934,044 32,350,205 39,822,413 41,018,444 46,803,966 -12.5 0 4,142 32,305 1,326,592 39,571,004

Purchased options 18,603,556 16,098,917 17,889,179 16,881,937 18,151,997 2.5 0 268 15,532 201,620 18,386,136

Written options 18,371,420 15,891,780 17,706,980 16,682,545 17,959,266 2.3 1 4,249 23,201 174,841 18,169,128

Total 185,627,365 160,764,376 174,998,615 176,317,039 193,514,081 -4.1 3 10,822 192,414 4,082,653 181,341,473

Fair Value of Derivative Contracts 

Interest rate contracts 69,377 70,648 73,199 60,217 48,270 43.7 0 54 920 11,802 56,601

Foreign exchange contracts 13,849 -11,466 -7,256 -19,636 -16,009 N/M 0 0 11 1,666 12,172

Equity contracts -6,866 -7,165 -700 -1,171 9,837 N/M 0 3 2 -284 -6,586

Commodity & other (excluding credit derivatives) 3,967 -452 -1,087 -3,800 9,802 -59.5 0 0 0 237 3,730

Credit derivatives as guarantor** 16,748 14,331 3,830 -3,347 -24,127 N/M 0 0 13 -74 16,810

Credit derivatives as beneficiary** -18,373 -18,166 -7,167 553 26,454 N/M 0 0 -13 -17 -18,343

Derivative Contracts by Maturity*** 

Interest rate contracts < 1 year 76,501,371 62,456,947 76,385,591 80,158,815 92,838,175 -17.6 0 2,698 26,689 880,039 75,591,946

1-5 years 44,407,789 39,201,919 39,963,944 41,098,879 43,088,736 3.1 2 657 42,375 802,111 43,562,644

> 5 years 22,231,036 20,844,428 20,500,301 19,986,413 20,987,249 5.9 0 1,336 77,542 465,330 21,686,828

Foreign exchange and gold contracts < 1 year 32,130,016 29,434,113 29,396,427 29,049,567 31,570,063 1.8 0 0 3,489 1,567,090 30,559,437

1-5 years 4,336,231 4,404,492 4,299,182 4,238,687 4,127,647 5.1 0 0 403 107,834 4,227,994

> 5 years 2,405,347 2,402,103 2,299,468 2,179,498 2,152,437 11.7 0 0 6 21,010 2,384,331

Equity contracts < 1 year 3,504,313 3,287,136 3,210,066 2,850,740 2,959,453 18.4 0 7 7 25,155 3,479,144

1-5 years 870,551 770,821 882,054 825,667 779,791 11.6 0 14 5 24,056 846,477

> 5 years 124,452 138,573 133,921 128,679 124,492 0.0 0 0 5 4,272 120,175

Commodity & other contracts (including credit 

derivatives, excluding gold contracts) < 1 year 2,149,899 1,820,961 1,926,264 1,860,285 2,040,847 5.3 0 0 54 45,126 2,104,719

1-5 years 2,050,971 2,023,406 2,249,588 2,163,848 2,612,164 -21.5 0 1 514 46,048 2,004,408

> 5 years 435,795 215,486 433,136 227,777 449,878 -3.1 0 23 1,503 8,721 425,549

Risk-Based Capital: Credit Equivalent Amount 

Total current exposure to tier 1 capital (%) 25.6 30.2 29.9 31.9 37.9 0.0 0.1 2.0 5.2 42

Total potential future exposure to tier 1 capital (%) 34.0 31.0 32.5 29.8 29.9 0.0 0.1 1.0 4.8 57.4

Total exposure (credit equivalent amount) 

to tier 1 capital (%) 59.6 61.2 62.4 61.8 67.8 0.0 0.2 3.1 10.1 99.5

Credit losses on derivatives  6.8 137.3 130.7 124.8 82.7 -91.8 0.0 4.4 -0.6 -1.1 4.0

HELD FOR TRADING 

Number of institutions reporting derivatives 189 188 186 186 182 3.8 0 20 87 71 11

Total assets of institutions reporting derivatives 16,190,214 15,890,219 15,384,583 15,394,454 14,841,843 9.1 0 9,795 330,981 3,993,264 11,856,173

Total deposits of institutions reporting derivatives 13,129,162 12,851,305 12,340,493 12,274,431 11,424,297 14.9 0 8,355 276,096 3,348,098 9,496,613

Derivative Contracts by Underlying Risk Exposure 

Interest rate 133,858,835 112,807,115 126,595,376 129,035,575 143,093,184 -6.5 0 541 44,600 1,459,030 132,354,663

Foreign exchange 42,039,817 39,084,210 39,147,645 38,663,882 41,651,419 0.9 0 0 3,944 1,610,485 40,425,388

Equity 3,976,351 3,746,888 3,997,150 3,549,571 3,639,261 9.3 0 0 3 44,447 3,931,902

Commodity & other 1,544,723 1,358,385 1,501,890 1,473,915 1,611,455 -4.1 0 0 44 87,729 1,456,950

Total 181,419,726 156,996,598 171,242,061 172,722,943 189,995,319 -4.5 0 541 48,591 3,201,691 178,168,902

Trading Revenues: Cash & Derivative Instruments 

Interest rate**  -29 3,625 2,826 4,638 4,940 N/M 0 0 6 -35 0

Foreign exchange** 6,343 18 1,942 3,841 2,167 192.7 0 0 3 288 6,053

Equity** 2,388 2,480 750 3,139 -1,040 N/M 0 0 16 -23 2,395

Commodity & other (including credit derivatives)** 1,772 191 1,380 2,036 612 189.5 0 0 0 157 1,616

Total trading revenues** 10,474 6,314 6,898 13,653 6,678 56.8 0 0 25 386 10,063

Share of Revenue 

Trading revenues to gross revenues (%)** 7.4 4.6 4.9 9.2 4.2 0.0 0.0 0.7 1.1 9.9

Trading revenues to net operating revenues (%)** 21.0 16.8 22.0 300.9 60.0 0.0 0.0 2.2 3.3 27.2

HELD FOR PURPOSES OTHER THAN TRADING 

Number of institutions reporting derivatives 614 623 620 626 616 -0.3 2 148 326 125 13

Total assets of institutions reporting derivatives 19,824,856 19,263,989 18,644,510 18,557,513 17,928,826 10.6 113 73,927 1,145,801 5,986,145 12,618,870

Total deposits of institutions reporting derivatives 16,168,974 15,655,539 15,009,146 14,854,670 13,891,758 16.4 94 61,887 953,696 4,968,483 10,184,815

Derivative Contracts by Underlying Risk Exposure 

Interest rate 3,572,695 3,192,426 3,162,408 3,009,014 2,934,180 21.8 3 10,260 143,456 828,802 2,590,173

Foreign exchange 569,053 511,407 534,403 527,340 529,987 7.4 0 0 295 39,156 529,602

Equity 28,361 27,826 25,479 24,768 22,318 27.1 0 20 24 9,959 18,357

Commodity & other 37,531 36,119 34,264 32,974 32,277 16.3 0 0 48 3,044 34,439

Total notional amount 4,207,639 3,767,778 3,756,553 3,594,097 3,518,762 19.6 3 10,280 143,823 880,962 3,172,571

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

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

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

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

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

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

FDIC QUARTERLY 13

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

Asset Size Distribution

(dollar figures in millions)

1st 

Quarter 

2021

4th 

Quarter

2020

3rd 

Quarter

2020

2nd 

Quarter

2020

1st 

Quarter

2020

% 

Change 

20Q1-

21Q1

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 59 57 58 61 63 -6.3 0 6 10 35 8

Outstanding Principal Balance by Asset Type 

1-4 family residential loans 358,230 382,125 406,116 449,854 452,586 -20.8 0 5,331 9,828 101,589 241,483

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

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

Auto loans 392 289 579 980 1,196 -67.2 0 0 0 392 0

Other consumer loans 1,469 1,569 1,669 1,512 1,587 -7.4 0 0 0 773 696

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

All other loans, leases, and other assets 91,085 87,334 88,993 90,064 88,439 3.0 0 0 7,769 5,478 77,838

Total securitized and sold 451,183 471,325 497,365 542,419 543,817 -17.0 0 5,331 17,597 108,239 320,017

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 1,057 1,210 1,403 1,522 1,726 -38.8 0 0 51 582 424

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

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

Auto loans 26 26 38 48 53 -50.9 0 0 0 26 0

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

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

All other loans, leases, and other assets 2,274 2,029 2,010 2,205 1,645 38.2 0 0 63 118 2,094

Total credit exposure 3,357 3,265 3,451 3,775 3,424 -2.0 0 0 114 726 2,518

Total unused liquidity commitments provided to institution’s own securitizations 76 71 71 32 29 162.1 0 0 0 0 76

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

1-4 family residential loans 2.0 2.7 3.0 5.9 3.7 0.0 1.7 0.5 1.6 2.2

Home equity loans 6.3 5.3 7.2 8.3 19.7 0.0 0.0 0.0 6.3 0.0

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

Auto loans 1.9 4.2 3.1 2.6 4.5 0.0 0.0 0.0 1.9 0.0

Other consumer loans 2.9 3.1 2.3 3.0 3.7 0.0 0.0 0.0 1.4 4.6

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 0.5 0.6 1.5 4.7 0.1 0.0 0.0 0.2 1.1 0.5

Total loans, leases, and other assets 1.8 2.5 3.1 6.5 3.4 0.0 0.0 0.0 1.5 1.8

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

1-4 family residential loans 2.7 3.0 2.9 4.6 1.0 0.0 1.5 0.8 4.0 2.3

Home equity loans 24.5 28.9 27.8 28.9 29.3 0.0 0.0 0.0 24.5 0.0

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

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

Other consumer loans 2.4 2.4 2.2 3.2 3.6 0.0 0.0 0.0 0.9 4.1

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 1.8 2.4 2.9 0.4 0.3 0.0 0.0 1.6 0.2 2.0

Total loans, leases, and other assets 2.3 2.5 2.8 4.3 0.8 0.0 0.0 0.0 3.0 2.2

Securitized Loans, Leases, and Other Assets Charged-off 

(net, YTD, annualized, %) 

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

Home equity loans 1.8 11.9 10.2 8.4 6.9 0.0 0.0 0.0 1.8 0.0

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

Auto loans 0.1 3.6 2.0 1.1 0.5 0.0 0.0 0.0 0.1 0.0

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

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 0.1 0.2 0.2 0.1 0.1 0.0 0.0 0.0 0.1 0.1

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

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

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

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

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

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

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

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

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

Assets Sold with Recourse and Not Securitized 

Number of institutions reporting asset sales 340 343 347 345 339 0.3 3 111 151 66 9

Outstanding Principal Balance by Asset Type 

1-4 family residential loans 36,198 35,430 31,869 28,990 27,752 30.4 13 5,859 17,236 11,685 1,405

All other loans, leases, and other assets 135,492 131,293 128,103 126,493 123,427 9.8 0 12 103 36,852 98,526

Total sold and not securitized 171,690 166,723 159,972 155,483 151,179 13.6 13 5,870 17,339 48,537 99,931

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 13,228 13,630 12,870 10,753 9,675 36.7 1 678 6,080 5,778 691

All other loans, leases, and other assets 39,242 37,880 36,997 36,423 35,313 11.1 0 12 21 11,656 27,554

Total credit exposure 52,470 51,510 49,867 47,176 44,989 16.6 1 690 6,100 17,434 28,245

Support for Securitization Facilities Sponsored by Other Institutions 

Number of institutions reporting securitization facilities sponsored by others 38 37 37 35 36 5.6 1 10 14 8 5

Total credit exposure 23,478 23,986 24,893 26,480 22,894 2.6 0 0 0 1,649 21,829

Total unused liquidity commitments 415 418 412 413 208 99.5 0 0 0 295 120

Other

Assets serviced for others** 5,624,097 5,781,786 5,804,674 5,912,001 6,185,782 -9.1 2,676 153,507 386,795 1,240,448 3,840,671

Asset-backed commercial paper conduits 

Credit exposure to conduits sponsored by institutions and others 18,417 19,694 17,209 17,348 18,170 1.4 0 0 0 0 18,417

Unused liquidity commitments to conduits sponsored by institutions 

 and others 56,072 56,904 59,373 59,835 56,530 -0.8 0 0 0 1,195 54,877

Net servicing income (for the quarter) 3,436 1,030 1,364 -246 -1,757 -295.6 8 274 425 1,145 1,584

Net securitization income (for the quarter) 106 77 92 39 37 186.5 0 6 7 5 88

Total credit exposure to Tier 1 capital (%)*** 3.5 3.6 3.7 3.8 3.6 0.0 0.2 0.4 2.3 5.4

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

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

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

QUARTERLY BANKING PROFILE

FDIC QUARTERLY 15

COMMUNITY BANK PERFORMANCE

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

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

as such in the current quarter, adjusted for mergers. In contrast, prior-quarter asset quality ratios are based on community 

banks designated during the previous quarter.

Community Banks Reported Strong Quarterly Net Income Growth Due to Higher Noninterest Income and 

Lower Provision Expense

Net Interest Margin Contracted to a Record Low

Loan and Lease Volume Increased 10.8 Percent Year Over Year, Primarily Because of Commercial and 

Industrial Loan Growth

Asset Quality Remained Stable

Community Banks 

Reported Strong 

Quarterly Net Income 

Growth Year Over Year 

Due to Higher Noninterest 

Income and Lower 

Provision Expense

Community banks reported year-over-year quarterly net income growth of $3.7 billion 

(77.5 percent) in first quarter 2021, despite a narrower net interest margin (NIM). Noninterest income of $6.6 billion increased $2 billion (45 percent) from first quarter 2020 primarily because of net gains on loan sales (up $1.3 billion, or 126.4 percent). Provision expense 

(provisions) decreased $1.4 billion (78.4 percent) from first quarter 2020 but remained 

positive at $390.1 million. In comparison, noncommunity banks had provision expense of 

negative $14.9 billion. Nearly three-quarters of the 4,531 FDIC–insured community banks 

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

on assets ratio increased 56 basis points from the year-ago quarter to 1.58 percent as net 

income growth outpaced the growth in average assets.

Net Interest Margin 

Narrowed Year Over Year

The quarterly NIM narrowed 28 basis points from the year-ago quarter to 3.26 percent 

despite an increase in net interest income of $1.8 billion (10.1 percent). Earning asset growth 

(up $425.1 billion, or 20.6 percent) outpaced net interest income growth. The decline in 

average yields on earning assets outpaced the decline in average funding costs. The average 

yield on earning assets fell 76 basis points to 3.64 percent, and the average funding cost fell 

48 basis points to 0.37 percent.

Contributors to the Year-Over-Year Change in Income

FDIC-Insured Community Banks 

Source: FDIC.

$ Billions

Net

Income

Net

Interest

Income

Loan Loss

Provisions

Noninterest

Income

Noninterest

Expense

Realized

Gains on

Securities

Income

Taxes

Positive Factor Negative Factor

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

+10% -78% +45% +8% -276% +121%

$3.68 $1.81 -$1.42 $2.04 $1.13 $0.54 $0.99

+77%

Chart 1

Source: FDIC.

Net Interest Margin

Percent 

Community Banks (3.26)

Industry (2.56)

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

2.50

2.75

3.00

3.25

3.50

3.75

4.00

Chart 2
2021   •   Volume 15  • Number 2

16 FDIC QUARTERLY

Change in Loan Balances and Unused Commitments 

FDIC-Insured Community Banks 

Source: FDIC.

$ Billions

Loan Balances

Unused

Commitments

Nonfarm

Nonresidential

RE

Commercial

& Industrial 1–4 FamilyResidential

RE

Construction &

Development

Agricultural

Production Commercial RE& Construction Commercial& Industrial

-10

0

10

20

30

40

50

60

70

7.3 5.2

58.4

-0.2 -4.4

18.1

24.7

1.7

6.7

-1.1

1.1

-2.7

8.5

4.1

Change 1Q 2021 vs. 1Q 2020

Change 1Q 2021 vs. 4Q 2020

Chart 3

Noncurrent Loan Rates for FDIC-Insured Community Banks

Source: FDIC.

Share of Loan Portfolio Noncurrent

Percent

0

2

4

6

8

10

12

14

16

C&D Loans

Nonfarm Nonresidential RE

1–4 Family RE

C&I Loans

Farm Loans

Home Equity

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

Chart 4

Noninterest Income 

Increased From 

First Quarter 2020

Noninterest income increased $2 billion from a year ago (45 percent), driven by an increase 

in gains on loan sales (up $1.3 billion, or 126.4 percent). The increase in net interest income 

and noninterest income contributed to growth in quarterly net operating revenue, which 

rose $3.9 billion (up 17.1 percent) from the year-ago quarter.

Noninterest Expense 

Increased From the 

Year-Ago Quarter

An increase in salary and benefit expense of $838.1 million (9.6 percent) drove the growth 

in noninterest expense (up $1.1 billion, or 7.6 percent) year over year. Average assets per 

employee increased 18.5 percent to $6.8 million from the year-ago quarter.

Noncurrent Balances 

Remained Stable Year 

Over Year, and the 

Noncurrent Rate Declined

Noncurrent loan balances remained relatively stable from a year ago, increasing 

$19.3 million (0.2 percent). The increase in nonfarm nonresidential (NFNR) noncurrent 

loan balances (up $650.1 million, or 20.5 percent) slightly outpaced the decline in noncurrent farm and consumer loan balances. Despite the slight increase in noncurrent balances, 

the noncurrent rate for total loans declined 8 basis points from the year-ago quarter to 

0.73 percent on strong year-over-year loan growth.

Community banks reported a $512 million (3.9 percent) decline in noncurrent balances 

across most major loan portfolios in first quarter 2021. A decrease in 1–4 family noncurrent 

balances, down $222.2 million (6 percent), drove the overall decline. Nearly 70 percent of all 

community banks reported a reduction in noncurrent balances since the prior quarter. The 

coverage ratio (allowance for loan and lease losses as a percentage of loans that are 90 days 

or more past due or in nonaccrual status) increased 30 percentage points to 180 percent year 

over year, a 14-year high.

Community Banks 

Reported a Broad-Based 

Decline in Net Charge-Off 

Volume

Declines in net charge-off volume across loan portfolios contributed to a reduction in the 

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

7 basis points from the year-ago quarter to 0.04 percent, a record low. The net charge-off 

rate for consumer loans declined the most among major loan categories (down 41 basis 

points to 0.56 percent).

Total Assets Increased 

From the Previous Quarter

Total assets increased $108.7 billion (4.3 percent) from the previous quarter driven by 

increases in cash and securities. Cash and balances due from depository institutions at 

community banks grew $38.4 billion (14.1 percent) quarter over quarter. Securities grew 

$44.8 billion (10.1 percent) quarter over quarter, supported by an influx of deposits. Cash 

and securities now represent 30.2 percent of total assets, the highest level in seven years.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 17

Loan and Lease Volume 

Grew During Both the 

Past Year and Quarter

Loan and lease balances grew $167.3 billion (10.8 percent) between first quarter 2020 and 

first quarter 2021. Growth in commercial and industrial loans (C&I) (up $124.2 billion, or 

58.4 percent) accounted for nearly three-quarters of the year-over-year increase, reflecting 

Paycheck Protection Program (PPP) loan growth. Growth in NFNR loans (up $34.1 billion, 

or 7.3 percent) also contributed to total loan growth. Farm loans (down $5.5 billion, or 

4.4 percent) and 1–4 family loans (down $4.9 billion, or 1.1 percent) declined year over year.

Community banks reported an increase in loan volume (1.4 percent) between fourth quarter 2020 and first quarter 2021. The increase in C&I loan balances (up $21.2 billion, or 

6.7 percent) was driven by a $24.4 billion increase in PPP loan balances. More than twothirds of community banks (69.8 percent) reported an increase in C&I loans in first quarter 2021 from fourth quarter 2020. Growth in NFNR loans (up $8.4 billion, or 1.7 percent), 

multifamily loans (up $2.4 billion, or 2.2 percent), and construction and development 

loans (up $1.3 billion, or 1.1 percent) offset declines in 1–4 family loans (down $5.6 billion, 

or 1.3 percent) and farm loans (down $3.3 billion, or 2.7 percent). An increase in commercial real estate loan commitments (up $8.3 billion, or 8.5 percent) drove the quarter-overquarter growth in unfunded loan volume.

Growth in Deposits of 

More Than $250,000 Drove 

the Annual Increase in 

Total Deposits

Deposits at community banks increased $429.7 billion (23.7 percent) compared with the 

year-ago quarter. Nearly all community banks (98 percent) reported an increase in deposit 

volume during the year. Growth in deposits of more than $250,000 (up $283.9 billion, or 

38.8 percent) drove the annual increase. Brokered deposit volume declined $4.6 billion 

(7.6 percent) from the year-ago quarter. Average funding costs fell 48 basis points to 

0.37 percent, a record low for community banks.

Community banks also reported strong deposit growth from fourth quarter 2020 (up 

$119.8 billion, or 5.6 percent). Growth was widespread: 92 percent of banks reported an 

increase in deposit volume in first quarter 2021.

Capital Levels 

Remained Strong

Equity capital grew $1.8 billion (0.7 percent) during the quarter, driven by an increase in 

retained earnings (up $1.9 billion, or 54.6 percent). However, the leverage capital ratio 

declined 5 basis points to 10.27 percent as growth in average assets outpaced tier 1 capital 

formation. The average tier 1 risk-based capital ratio among noncommunity bank leverage 

ratio (CBLR) filers was 14.62 percent in first quarter 2021, up 17 basis points from the prior 

quarter. The average CBLR for the 1,845 banks that elected to use the CBLR framework was 

11.15 percent.

Two New Community 

Banks Opened in 

First Quarter 2021

The number of community banks declined to 4,531, down 29 from the previous quarter.1 

Two new community banks opened, five banks transitioned from community to noncommunity banks, two banks self-liquidated, and twenty-four community banks merged 

during the quarter.

Author:

James K. Presley-Nelson

Senior Financial Analyst

Division of Insurance and Research

1 The number of community bank reporters excludes two banks: one that did not file on time and one that sold most of its 

assets to a credit union but whose charter remains active.
2021   •   Volume 15  • Number 2

18 FDIC QUARTERLY

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

2021* 2020* 2020 2019 2018 2017 2016

Return on assets (%) 1.30 0.87 1.09 1.20 1.19 0.96 0.99

Return on equity (%) 12.18 7.44 9.73 10.25 10.58 8.65 8.81

Core capital (leverage) ratio (%) 10.27 11.13 10.32 11.15 11.09 10.80 10.69

Noncurrent assets plus other real estate owned to assets (%) 0.54 0.68 0.59 0.65 0.70 0.78 0.94

Net charge-offs to loans (%) 0.04 0.12 0.12 0.13 0.13 0.16 0.16

Asset growth rate (%) 17.54 -0.20 14.16 -1.17 2.22 1.17 2.97

Net interest margin (%) 3.26 3.55 3.39 3.66 3.72 3.62 3.57

Net operating income growth (%) 63.75 -22.00 0.12 -4.04 28.01 0.21 2.42

Number of institutions reporting 4,531 4,681 4,560 4,750 4,980 5,228 5,462

Percentage of unprofitable institutions (%) 3.99 6.90 4.47 3.98 3.63 5.72 4.67

* Through March 31, ratios annualized where appropriate. Asset growth rates are for 12 months ending March 31.

TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks

(dollar figures in millions)  1st Quarter

2021

4th Quarter

2020

1st Quarter

2020

%Change 

20Q1-21Q1

Number of institutions reporting 4,531 4,560 4,681 -3.2

Total employees (full-time equivalent) 392,198 392,849 395,453 -0.8

CONDITION DATA

Total assets $2,647,439 $2,547,147 $2,252,299 17.5

Loans secured by real estate 1,227,731 1,225,675 1,209,967 1.5

1-4 Family residential mortgages 382,617 388,518 391,145 -2.2

Nonfarm nonresidential 501,266 494,370 479,581 4.5

 Construction and development 116,533 115,731 114,128 2.1

Home equity lines 41,020 42,306 45,767 -10.4

Commercial & industrial loans 336,851 316,632 216,465 55.6

Loans to individuals 65,048 65,271 65,305 -0.4

 Credit cards 1,881 2,102 1,990 -5.5

Farm loans 44,689 47,500 50,582 -11.7

Other loans & leases 47,866 49,143 39,174 22.2

Less: Unearned income 1,355 1,047 538 151.6

Total loans & leases 1,720,831 1,703,174 1,580,955 8.8

Less: Reserve for losses* 22,702 22,526 19,242 18.0

Net loans and leases 1,698,129 1,680,648 1,561,713 8.7

Securities** 488,564 444,985 382,664 27.7

Other real estate owned 1,710 1,859 2,385 -28.3

Goodwill and other intangibles 18,141 18,009 17,691 2.5

All other assets 440,895 401,647 287,846 53.2

Total liabilities and capital 2,647,439 2,547,147 2,252,298 17.5

Deposits 2,240,098 2,126,482 1,842,769 21.6

 Domestic office deposits 2,237,800 2,124,081 1,840,678 21.6

Foreign office deposits 2,298 2,401 2,092 9.8

 Brokered deposits 56,560 61,445 61,877 -8.6

Estimated insured deposits 1,548,363 1,478,449 1,340,232 15.5

Other borrowed funds 105,236 118,198 124,399 -15.4

Subordinated debt 343 352 338 1.5

All other liabilities 23,967 24,657 22,621 5.9

Total equity capital (includes minority interests) 277,795 277,459 262,170 6.0

 Bank equity capital 277,671 277,339 262,079 5.9

Loans and leases 30-89 days past due 6,731 7,544 11,495 -41.4

Noncurrent loans and leases 12,610 13,188 12,845 -1.8

Restructured loans and leases 7,191 5,596 5,209 38.1

Mortgage-backed securities 223,343 201,819 185,070 20.7

Earning assets 2,484,458 2,381,875 2,095,332 18.6

FHLB Advances 63,853 73,210 100,081 -36.2

Unused loan commitments 372,222 349,718 316,331 17.7

Trust assets 300,529 349,448 241,401 24.5

Assets securitized and sold 23,129 23,237 18,916 22.3

Notional amount of derivatives 163,013 182,369 149,235 9.2

INCOME DATA

Full Year

 2020

Full Year

 2019 %Change

1st Quarter 

2021

1st Quarter 

2020

%Change 

20Q1-21 Q1

Total interest income $88,714 $92,458 -4.0 $22,050 $22,757 -3.1

Total interest expense 13,434 18,897 -28.9 2,262 4,398 -48.6

Net interest income 75,279 73,561 2.3 19,788 18,359 7.8

Provision for credit losses*** 7,049 2,910 142.3 390 1,826 -78.6

Total noninterest income 24,333 18,899 28.8 6,580 4,626 42.2

Total noninterest expense 62,598 59,581 5.1 16,079 15,292 5.1

Securities gains (losses) 1,086 783 38.7 345 -178 -294.1

Applicable income taxes 5,097 5,096 0.0 1,814 843 115.1

Extraordinary gains, net**** 1 127 N/M 0 1 N/M

Total net income (includes minority interests) 25,957 25,783 0.7 8,430 4,846 73.9

 Bank net income 25,903 25,772 0.5 8,417 4,843 73.8

Net charge-offs 2,016 2,021 -0.3 183 459 -60.1

Cash dividends 12,073 13,326 -9.4 3,104 3,156 -1.6

Retained earnings 13,830 12,445 11.1 5,313 1,686 215.1

Net operating income 25,023 24,993 0.1 8,139 4,971 63.7

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

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

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

this item represents the provision for loan and lease losses.

**** See Notes to Users for explanation. N/M - Not Meaningful
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 19

TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks

Prior Periods Adjusted for Mergers

(dollar figures in millions)  1st Quarter 

2021

4th Quarter 

2020

1st Quarter

2020

%Change 

20Q1-21Q1

Number of institutions reporting 4,531 4,529 4,525 0.1

Total employees (full-time equivalent) 392,198 391,021 388,439 1.0

CONDITION DATA

Total assets $2,647,439 $2,538,696 $2,213,374 19.6

Loans secured by real estate 1,227,731 1,221,694 1,184,700 3.6

1-4 Family residential mortgages 382,617 386,994 383,435 -0.2

Nonfarm nonresidential 501,266 492,841 467,193 7.3

 Construction and development 116,533 115,246 110,787 5.2

Home equity lines 41,020 42,194 45,125 -9.1

Commercial & industrial loans 336,851 315,631 212,616 58.4

Loans to individuals 65,048 65,061 64,325 1.1

 Credit cards 1,881 1,963 2,028 -7.3

Farm loans 44,689 47,403 49,762 -10.2

Other loans & leases 47,866 49,093 42,622 12.3

Less: Unearned income 1,355 1,037 522 159.5

Total loans & leases 1,720,831 1,697,845 1,553,503 10.8

Less: Reserve for losses* 22,702 22,472 19,027 19.3

Net loans and leases 1,698,129 1,675,373 1,534,476 10.7

Securities** 488,564 443,760 376,387 29.8

Other real estate owned 1,710 1,854 2,348 -27.2

Goodwill and other intangibles 18,141 17,931 17,305 4.8

All other assets 440,895 399,777 282,858 55.9

Total liabilities and capital 2,647,439 2,538,695 2,213,374 19.6

Deposits 2,240,098 2,120,322 1,810,372 23.7

 Domestic office deposits 2,237,800 2,117,922 1,808,280 23.8

Foreign office deposits 2,298 2,401 2,092 9.8

 Brokered deposits 56,560 60,653 61,192 -7.6

Estimated insured deposits 1,548,363 1,474,256 1,319,868 17.3

Other borrowed funds 105,236 117,754 122,677 -14.2

Subordinated debt 343 352 338 1.5

All other liabilities 23,967 24,277 22,308 7.4

Total equity capital (includes minority interests) 277,795 275,990 257,678 7.8

 Bank equity capital 277,671 275,870 257,588 7.8

Loans and leases 30-89 days past due 6,731 7,505 11,373 -40.8

Noncurrent loans and leases 12,610 13,122 12,591 0.2

Restructured loans and leases 7,191 5,575 5,300 35.7

Mortgage-backed securities 223,343 200,932 180,610 23.7

Earning assets 2,484,458 2,374,406 2,059,413 20.6

FHLB Advances 63,853 73,085 98,509 -35.2

Unused loan commitments 372,222 348,750 311,761 19.4

Trust assets 300,529 348,691 231,844 29.6

Assets securitized and sold 23,129 23,237 19,148 20.8

Notional amount of derivatives 163,013 181,970 146,922 11.0

INCOME DATA

Full Year

 2020

Full Year

 2019 %Change

1st Quarter 

2021

1st Quarter 

2020

%Change 

20Q1-21 Q1

Total interest income $88,357 $89,598 -1.4 $22,050 $22,288 -1.1

Total interest expense 13,368 18,270 -26.8 2,262 4,309 -47.5

Net interest income 74,988 71,328 5.1 19,788 17,979 10.1

Provision for credit losses*** 7,012 2,797 150.7 390 1,806 -78.4

Total noninterest income 24,233 18,083 34.0 6,580 4,538 45.0

Total noninterest expense 62,335 57,611 8.2 16,079 14,947 7.6

Securities gains (losses) 1,085 756 N/M 345 -196 N/M

Applicable income taxes 5,076 4,903 3.5 1,814 821 120.8

Extraordinary gains, net**** 1 150 N/M 0 1 N/M

Total net income (includes minority interests) 25,885 25,007 3.5 8,430 4,747 77.6

 Bank net income 25,831 24,991 3.4 8,417 4,742 77.5

Net charge-offs 2,007 1,988 0.9 183 435 -57.9

Cash dividends 12,049 13,004 -7.3 3,104 3,128 -0.8

Retained earnings 13,783 11,987 15.0 5,313 1,614 229.2

Net operating income 24,953 24,216 3.0 8,139 4,886 66.6

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

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

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

this item represents the provision for loan and lease losses.

**** See Notes to Users for explanation. N/M - Not Meaningful
2021   •   Volume 15  • Number 2

20 FDIC QUARTERLY

TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks

First Quarter 2021

(dollar figures in millions) All Community Banks

Geographic Regions*

New York Atlanta Chicago Kansas City Dallas San Francisco

Number of institutions reporting 4,531 499 514 993 1,231 1,013 281

Total employees (full-time equivalent) 392,198 79,805 42,883 82,143 71,112 82,315 33,940

CONDITION DATA

Total assets $2,647,439 $670,206 $282,584 $487,932 $452,989 $486,810 $266,919

Loans secured by real estate 1,227,731 358,428 129,726 217,186 191,994 212,134 118,265

1-4 Family residential mortgages 382,617 131,591 37,827 66,074 55,317 66,398 25,409

Nonfarm nonresidential 501,266 137,010 60,761 85,292 67,877 90,207 60,118

 Construction and development 116,533 26,135 14,820 17,894 17,662 29,443 10,578

Home equity lines 41,020 12,193 5,578 8,994 4,545 4,380 5,330

Commercial & industrial loans 336,851 82,555 35,748 61,942 56,644 59,259 40,701

Loans to individuals 65,048 17,518 6,086 12,138 11,281 12,250 5,775

 Credit cards 1,881 394 98 202 617 191 378

Farm loans 44,689 543 1,197 7,138 25,680 7,615 2,516

Other loans & leases 47,866 13,992 2,947 11,387 7,130 7,330 5,081

Less: Unearned income 1,355 252 221 147 172 286 276

Total loans & leases 1,720,831 472,783 175,483 309,645 292,557 298,302 172,061

Less: Reserve for losses** 22,702 5,652 2,296 4,078 4,180 4,015 2,481

Net loans and leases 1,698,129 467,131 173,187 305,567 288,377 294,287 169,580

Securities*** 488,564 104,692 53,075 97,203 86,903 98,275 48,415

Other real estate owned 1,710 274 290 328 342 395 81

Goodwill and other intangibles 18,141 5,196 1,309 3,615 2,793 2,895 2,332

All other assets 440,895 92,913 54,722 81,219 74,573 90,958 46,511

Total liabilities and capital 2,647,439 670,206 282,584 487,932 452,989 486,810 266,919

Deposits 2,240,098 556,019 242,114 411,286 385,229 418,726 226,724

 Domestic office deposits 2,237,800 555,408 242,104 411,286 385,229 418,726 225,047

Foreign office deposits 2,298 611 10 0 0 0 1,676

 Brokered deposits 56,560 22,866 3,660 8,868 9,757 7,144 4,265

 Estimated insured deposits 1,548,363 381,131 162,087 302,841 283,912 284,015 134,377

Other borrowed funds 105,236 34,334 9,545 21,244 17,316 13,182 9,614

Subordinated debt 343 240 7 34 11 40 11

All other liabilities 23,967 8,506 2,212 3,889 3,125 3,526 2,708

Total equity capital (includes minority interests) 277,795 71,107 28,706 51,478 47,307 51,335 27,862

 Bank equity capital 277,671 71,086 28,701 51,402 47,306 51,314 27,861

Loans and leases 30-89 days past due 6,731 1,655 713 998 1,247 1,660 459

Noncurrent loans and leases 12,610 3,921 1,099 2,236 1,950 2,522 882

Restructured loans and leases 7,191 1,742 502 2,161 838 1,563 385

Mortgage-backed securities 223,343 57,993 24,585 40,402 33,811 38,516 28,036

Earning assets 2,484,458 630,856 264,238 457,063 426,102 455,316 250,884

FHLB Advances 63,853 21,753 5,547 14,037 11,201 7,034 4,281

Unused loan commitments 372,222 98,188 33,242 68,462 71,767 59,343 41,221

Trust assets 300,529 67,333 9,148 62,165 107,164 35,093 19,626

Assets securitized and sold 23,129 8,927 112 4,828 4,170 4,865 227

Notional amount of derivatives 163,013 62,036 12,176 28,978 32,582 16,366 10,875

INCOME DATA

Total interest income $22,050 $5,367 $2,323 $3,968 $3,941 $4,276 $2,175

Total interest expense 2,262 648 214 408 433 412 147

Net interest income 19,788 4,719 2,110 3,560 3,508 3,864 2,028

Provision for credit losses  390 29 41 83 102 118 17

Total noninterest income 6,580 1,256 618 1,728 1,212 1,196 570

Total noninterest expense 16,079 3,794 1,740 3,127 2,770 3,089 1,559

Securities gains (losses) 345 196 31 52 30 30 7

Applicable income taxes 1,814 555 181 383 244 224 226

Extraordinary gains, net** *** 0 0 0 0 0 0 0

Total net income (includes minority interests) 8,430 1,792 796 1,747 1,634 1,658 803

 Bank net income 8,417 1,791 793 1,744 1,634 1,652 803

Net charge-offs 183 79 8 16 31 30 19

Cash dividends 3,104 650 200 757 660 546 291

Retained earnings 5,313 1,141 593 987 974 1,107 512

Net operating income 8,139 1,636 771 1,699 1,607 1,630 796

* See Table V-A for explanation.

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

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

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

this item represents the provision for loan and lease losses.

** *** See Notes to Users for explanation.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 21

Table IV-B. First Quarter 2021, FDIC-Insured Community Banks

Performance ratios (annualized, %)

All Community Banks First Quarter 2021, Geographic Regions*

 1st Quarter 

2021

4th Quarter 

2020 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 3.64 3.78 3.48 3.62 3.54 3.79 3.85 3.56

Cost of funding earning assets 0.37 0.45 0.42 0.33 0.36 0.42 0.37 0.24

Net interest margin 3.26 3.32 3.06 3.29 3.18 3.37 3.48 3.32

Noninterest income to assets 1.02 1.11 0.77 0.90 1.44 1.09 1.01 0.88

Noninterest expense to assets 2.48 2.67 2.31 2.53 2.61 2.50 2.60 2.40

Loan and lease loss provision to assets 0.06 0.19 0.02 0.06 0.07 0.09 0.10 0.03

Net operating income to assets 1.26 1.12 1.00 1.12 1.42 1.45 1.37 1.22

Pretax return on assets 1.58 1.41 1.43 1.42 1.78 1.69 1.58 1.58

Return on assets 1.30 1.18 1.09 1.15 1.46 1.47 1.39 1.23

Return on equity 12.18 10.79 10.17 11.09 13.59 13.86 12.94 11.57

Net charge-offs to loans and leases 0.04 0.15 0.07 0.02 0.02 0.04 0.04 0.05

Loan and lease loss provision to net charge-offs 213.32 192.36 36.25 515.10 507.59 331.82 399.89 91.29

Efficiency ratio 60.63 62.92 63.16 63.28 58.76 58.26 60.80 59.79

Net interest income to operating revenue 75.05 73.66 78.98 77.34 67.31 74.32 76.37 78.07

% of unprofitable institutions 3.99 7.81 5.61 6.81 4.83 2.03 3.16 4.63

% of institutions with earnings gains 73.89 56.64 79.16 74.32 74.02 74.65 68.31 80.07

Table V-B. Full Year 2020, FDIC-Insured Community Banks

Performance ratios (%)

All Community Banks Full Year 2020, Geographic Regions*

Full Year

 2020

Full Year

 2019 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 4.00 4.61 3.82 4.04 3.83 4.19 4.24 3.95

Cost of funding earning assets 0.61 0.94 0.70 0.56 0.57 0.66 0.58 0.43

Net interest margin 3.39 3.66 3.12 3.48 3.26 3.54 3.66 3.52

Noninterest income to assets 1.02 0.88 0.78 0.94 1.45 1.14 0.97 0.82

Noninterest expense to assets 2.63 2.76 2.42 2.75 2.72 2.69 2.78 2.52

Loan and lease loss provision to assets 0.30 0.13 0.33 0.33 0.26 0.26 0.28 0.34

Net operating income to assets 1.05 1.16 0.75 0.90 1.25 1.30 1.17 0.99

Pretax return on assets 1.30 1.43 1.00 1.15 1.55 1.54 1.37 1.28

Return on assets 1.09 1.20 0.79 0.94 1.28 1.34 1.21 1.01

Return on equity 9.73 10.25 7.08 8.51 11.37 12.02 10.76 8.90

Net charge-offs to loans and leases 0.12 0.13 0.11 0.10 0.10 0.14 0.16 0.13

Loan and lease loss provision to net charge-offs 349.69 143.95 408.94 502.99 373.40 278.71 263.01 376.38

Efficiency ratio 62.32 64.05 64.82 65.23 59.92 59.97 63.24 60.94

Net interest income to operating revenue 75.57 79.56 79.00 77.41 67.67 74.33 77.80 80.06

% of unprofitable institutions 4.47 3.98 6.75 7.32 4.01 2.42 4.03 7.42

% of institutions with earnings gains 54.01 63.68 48.21 48.75 60.52 56.95 49.61 54.06

* See Table V-A for explanation.
2021   •   Volume 15  • Number 2

22 FDIC QUARTERLY

Table VI-B. Loan Performance, FDIC-Insured Community Banks

March 31, 2021

Geographic Regions*

All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco

Percent of Loans 30-89 Days Past Due

All loans secured by real estate 0.38 0.36 0.41 0.36 0.39 0.49 0.27

Construction and development 0.41 0.32 0.30 0.30 0.49 0.53 0.49

Nonfarm nonresidential 0.29 0.36 0.26 0.27 0.25 0.31 0.22

Multifamily residential real estate 0.19 0.25 0.19 0.16 0.14 0.23 0.02

Home equity loans 0.30 0.33 0.32 0.26 0.27 0.40 0.24

Other 1-4 family residential 0.52 0.41 0.74 0.55 0.44 0.72 0.35

Commercial and industrial loans 0.28 0.21 0.32 0.18 0.28 0.50 0.19

Loans to individuals 0.93 1.00 0.89 0.42 0.60 1.81 0.66

Credit card loans 1.36 1.67 0.79 0.63 1.82 1.10 0.94

Other loans to individuals 0.92 0.98 0.90 0.42 0.53 1.82 0.64

All other loans and leases (including farm) 0.52 0.12 0.32 0.31 0.82 0.62 0.36

Total loans and leases 0.39 0.35 0.41 0.32 0.43 0.56 0.27

Percent of Loans Noncurrent

All loans secured by real estate 0.78 0.91 0.67 0.80 0.67 0.85 0.52

Construction and development 0.55 0.81 0.49 0.52 0.46 0.46 0.46

Nonfarm nonresidential 0.76 0.94 0.57 0.91 0.69 0.80 0.39

Multifamily residential real estate 0.30 0.34 0.39 0.24 0.33 0.25 0.20

Home equity loans 0.59 0.66 0.45 0.49 0.31 0.42 1.14

Other 1-4 family residential 0.91 1.11 0.89 0.84 0.48 1.04 0.63

Commercial and industrial loans 0.61 0.71 0.49 0.61 0.52 0.78 0.44

Loans to individuals 0.54 0.41 0.46 0.29 0.36 1.27 0.36

Credit card loans 0.98 1.99 0.34 0.34 0.94 0.61 0.68

Other loans to individuals 0.53 0.38 0.47 0.29 0.32 1.28 0.34

All other loans and leases (including farm) 0.68 0.09 0.52 0.49 1.02 0.67 0.86

Total loans and leases 0.73 0.83 0.63 0.72 0.67 0.84 0.51

Percent of Loans Charged-Off (net, YTD)

All loans secured by real estate 0.01 0.02 -0.02 0.01 0.00 0.01 -0.01

Construction and development -0.02 0.01 -0.09 0.01 -0.03 0.01 -0.07

Nonfarm nonresidential 0.02 0.04 0.00 0.03 0.01 0.01 0.00

Multifamily residential real estate 0.01 0.01 -0.01 0.00 0.04 -0.01 0.00

Home equity loans -0.01 0.00 -0.03 -0.02 -0.03 0.02 -0.01

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

Commercial and industrial loans 0.06 0.12 0.05 0.03 0.04 0.05 0.07

Loans to individuals 0.56 0.77 0.51 0.16 0.62 0.53 0.74

Credit card loans 4.27 3.14 0.49 1.33 8.70 1.57 2.25

Other loans to individuals 0.44 0.71 0.51 0.14 0.14 0.51 0.63

All other loans and leases (including farm) 0.08 0.04 0.14 0.03 0.08 0.05 0.23

Total loans and leases 0.04 0.07 0.02 0.02 0.04 0.04 0.05

Loans Outstanding (in billions)

All loans secured by real estate $1,227.7 $358.4 $129.7 $217.2 $192.0 $212.1 $118.3

Construction and development 116.5 26.1 14.8 17.9 17.7 29.4 10.6

Nonfarm nonresidential 501.3 137.0 60.8 85.3 67.9 90.2 60.1

Multifamily residential real estate 110.9 49.3 6.4 21.6 12.7 8.2 12.8

Home equity loans 41.0 12.2 5.6 9.0 4.5 4.4 5.3

Other 1-4 family residential 382.6 131.6 37.8 66.1 55.3 66.4 25.4

Commercial and industrial loans 336.9 82.6 35.7 61.9 56.6 59.3 40.7

Loans to individuals 65.0 17.5 6.1 12.1 11.3 12.2 5.8

Credit card loans 1.9 0.4 0.1 0.2 0.6 0.2 0.4

Other loans to individuals 63.2 17.1 6.0 11.9 10.7 12.1 5.4

All other loans and leases (including farm) 92.6 14.5 4.1 18.5 32.8 14.9 7.6

Total loans and leases 1,722.2 473.0 175.7 309.8 292.7 298.6 172.3

Memo: Unfunded Commitments (in millions)

Total Unfunded Commitments 372,222 98,188 33,242 68,462 71,767 59,343 41,221

Construction and development: 1-4 family residential 32,292 5,967 4,735 4,134 5,009 9,545 2,901

Construction and development: CRE and other 70,987 20,740 7,626 11,279 10,982 13,875 6,484

Commercial and industrial 122,653 32,617 9,429 26,374 21,998 18,164 14,071

* See Table V-A for explanation.

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

FDIC QUARTERLY 23

INSURANCE FUND INDICATORS

Deposit Insurance Fund Increases by $1.5 Billion

Insured Deposits Grow by 4.4 Percent in the First Quarter

DIF Reserve Ratio Declines 4 Basis Points to 1.25 Percent

During the first quarter, the Deposit Insurance Fund (DIF) balance increased by $1.5 billion 

to $119.4 billion. Assessment income of $1.9 billion, interest earned on investments of 

$284 million, and negative provisions for insurance losses of $57 million were the largest sources of the increase. Operating expenses of $454 million and unrealized losses 

on available-for-sale securities of $285 million partially offset the increase in the fund 

balance. No insured institutions failed in the first quarter.

The deposit insurance assessment base—average consolidated total assets minus average tangible equity—increased by 2.2 percent in the first quarter and by 16.6 percent over 

12 months.12 Total estimated insured deposits increased by 4.4 percent in the first quarter 

and by 16.4 percent ($1.3 trillion) year over year. The strong quarterly growth in insured 

deposits more than offset the quarterly increase in the DIF; as a result, the DIF reserve 

ratio declined 4 basis points to 1.25 percent at March 31, 2021. The March 31, 2021, reserve 

ratio was 13 basis points lower than the previous year; the extreme 12-month decline in 

the reserve ratio was entirely the result of extraordinary insured deposit growth.

The Dodd-Frank Act, enacted on July 21, 2010, contained several provisions to strengthen 

the DIF. Among other things, it: (1) raised the minimum reserve ratio for the DIF to 

1.35 percent (from the former minimum of 1.15 percent); (2) required that the reserve ratio 

reach 1.35 percent by September 30, 2020. Once the reserve ratio reaches 1.35 percent, 

the September 30, 2020, deadline in the Dodd-Frank Act will have been met and will no 

longer apply. If the reserve ratio later falls below 1.35 percent, even if that occurs before 

September 30, 2020, the FDIC will have a minimum of eight years to return the reserve 

ratio to 1.35 percent, reducing the likelihood of a large increase in assessment rates. The 

reserve ratio exceeded the 1.35 percent minimum imposed by the Dodd-Frank Act on 

September 30, 2018, when the reserve ratio was 1.36 percent. The reserve ratio continued to exceed the 1.35 percent minimum for all subsequent quarters until June 30, 2020, 

when, due to extraordinary insured deposit growth, the reserve ratio dropped 8 basis 

points to 1.30 percent. Since the reserve ratio fell below its statutorily required minimum 

of 1.35 percent on June 30, 2020, the FDIC Board adopted a new Fund Restoration Plan in 

September 2020.

Author:

Kevin Brown

Senior Financial Analyst

Division of Insurance and Research

1 There are additional adjustments to the assessment base for banker’s banks and custodial banks.

2 Figures for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition 

to insured commercial banks and savings institutions.
2021   •   Volume 15  • Number 2

24 FDIC QUARTERLY

DIF Reserve Ratios

Percent of Insured Deposits

1.36 1.40 1.41 1.41 1.38

1.30 1.30 1.29 1.33 1.36 1.36

1.30 1.25

3/18 6/18 9/18 12/18 3/19 6/19 9/19 12/19 3/20 6/20 9/20 12/20 3/21

Table I-C. Insurance Fund Balances and Selected Indicators

(dollar figures in millions)

Deposit Insurance Fund*

1st 

Quarter 

2021

4th 

Quarter 

2020

3rd 

Quarter 

2020

2nd 

Quarter 

2020

1st 

Quarter 

2020

4th 

Quarter 

2019

3rd 

Quarter 

2019

2nd 

Quarter 

2019

1st 

Quarter 

2019

4th 

Quarter 

2018

3rd 

Quarter 

2018

2nd 

Quarter 

2018

1st 

Quarter 

2018

Beginning Fund Balance $117,897 $116,434 $114,651 $113,206 $110,347 $108,940 $107,446 $104,870 $102,609 $100,204 $97,588 $95,072 $92,747

Changes in Fund Balance:

Assessments earned 1,862 1,884 2,047 1,790 1,372 1,272 1,111 1,187 1,369 1,351 2,728 2,598 2,850

Interest earned on 

investment securities 284 330 392 454 507 531 544 535 507 481 433 381 338

Realized gain on sale of

investments 0 0 0 0 0 0 0 0 0 0 0 0 0

Operating expenses 454 470 451 465 460 460 443 459 434 453 434 445 433

Provision for insurance 

losses -57 -48 -74 -47 12 -88 -192 -610 -396 -236 -121 -141 -65

All other income, 

net of expenses 1 9 5 2 2 21 4 9 2 2 2 3 1

Unrealized gain/(loss) on 

available-for-sale 

securities** -285 -338 -284 -383 1,450 -45 86 694 421 788 -234 -162 -496

Total fund balance change 1,465 1,463 1,783 1,445 2,859 1,407 1,494 2,576 2,261 2,405 2,616 2,516 2,325

Ending Fund Balance 119,362 117,897 116,434 114,651 113,206 110,347 108,940 107,446 104,870 102,609 100,204 97,588 95,072

Percent change from 

 four quarters earlier 5.44 6.84 6.88 6.71 7.95 7.54 8.72 10.10 10.31 10.63 10.72 11.42 11.95

Reserve Ratio (%) 1.25 1.29 1.30 1.30 1.38 1.41 1.41 1.40 1.36 1.36 1.36 1.33 1.30

Estimated Insured 

Deposits 9,518,588 9,119,789 8,925,969 8,835,355 8,178,036 7,824,633 7,740,925 7,691,767 7,695,885 7,522,441 7,375,867 7,353,996 7,333,159

Percent change from 

 four quarters earlier 16.39 16.55 15.31 14.87 6.27 4.02 4.95 4.59 4.95 5.14 3.90 4.35 3.59

Domestic Deposits 16,980,214 16,339,030 15,714,977 15,562,010 14,350,253 13,262,206 13,020,253 12,788,773 12,725,363 12,659,406 12,367,954 12,280,904 12,305,817

Percent change from 

 four quarters earlier 18.33 23.20 20.70 21.68 12.77 4.76 5.27 4.14 3.41 4.37 3.36 3.83 3.79

Assessment Base*** 19,214,847 18,805,738 18,464,902 18,153,332 16,483,625 16,156,678 15,904,512 15,684,071 15,561,859 15,452,229 15,229,530 15,113,666 15,068,512

Percent change from 

 four quarters earlier 16.57 16.40 16.10 15.74 5.92 4.56 4.43 3.77 3.27 3.01 2.67 2.79 3.06

Number of Institutions 

Reporting 4,987 5,011 5,042 5,075 5,125 5,186 5,267 5,312 5,371 5,415 5,486 5,551 5,615

Deposit Insurance Fund Balance 

and Insured Deposits

($ Millions)

DIF 

Balance

DIF-Insured 

Deposits

3/18 $95,072 $7,333,159

6/18 97,588 7,353,996

9/18 100,204 7,375,867

12/18 102,609 7,522,441

3/19 104,870 7,695,885

6/19 107,446 7,691,767

9/19 108,940 7,740,925

12/19 110,347 7,824,633

3/20 113,206 8,178,036

6/20 114,651 8,835,355

9/20 116,434 8,925,969

12/20 117,897 9,119,789

3/21 119,362 9,518,588

Table II-C. Problem Institutions and Failed Institutions

(dollar figures in millions) 2021  2020** ** 2020 2019 2018 2017 2016 2015

Problem Institutions

Number of institutions 55 54 56 51 60 95 123 183

Total assets $54,182 $44,519 $55,830 $46,190 $48,481 $13,939 $27,624 $46,780

Failed Institutions

Number of institutions 0 1 4 4 0 8 5 8

Total assets***** $0 $101 $455 $209 $0 $5,082 $277 $6,706

* Quarterly financial statement results are unaudited.

** Includes unrealized postretirement benefit gain (loss).

*** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks.

  Through March 31.

** *** Total assets are based on final Call Reports submitted by failed institutions.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 25

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

(dollar figures in millions)

March 31, 2021

Number of 

Institutions

Total 

Assets

Domestic 

Deposits*

Est. Insured 

Deposits

Commercial Banks and Savings Institutions

FDIC-Insured Commercial Banks 4,357 $21,128,887 $15,738,798 $8,547,896

FDIC-Supervised 2,899 3,609,231 2,990,121 1,831,637

OCC-Supervised 767 14,250,210 10,301,542 5,541,589

Federal Reserve-Supervised 691 3,269,447 2,447,135 1,174,669

FDIC-Insured Savings Institutions 621 1,435,313 1,196,890 934,289

OCC-Supervised 275 625,178 498,729 412,123

FDIC-Supervised 310 395,339 313,210 238,718

Federal Reserve-Supervised 36 414,795 384,951 283,447

Total Commercial Banks and Savings Institutions 4,978 22,564,200 16,935,688 9,482,185

Other FDIC-Insured Institutions

U.S. Branches of Foreign Banks 9 96,181 44,526 36,403

Total FDIC-Insured Institutions 4,987 22,660,381 16,980,214 9,518,588

* Excludes $1.5 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 December 31, 2020 (dollar figures in billions)

Annual Rate in Basis Points*

Number of 

Institutions

Percent of Total 

Institutions

Amount of 

Assessment Base

Percent of Total 

Assessment Base

1.50 - 3.00 2,888 57.63 $3,753.3 19.96

3.01 - 6.00 1,436 28.66 12,543.9 66.70

6.01 - 10.00 564 11.26 2,337.9 12.43

10.01 - 15.00 53 1.06 143.8 0.76

15.01 - 20.00 69 1.38 26.6 0.14

20.01 - 25.00 1 0.02 0.2 0.00

> 25.00 0 0.00 0.0 0.0

* Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, as required by the Dodd-Frank Act.
2021   •   Volume 15  • Number 2

26 FDIC QUARTERLY

Notes to Users

This publication contains financial data and other information for 

depository institutions insured by the Federal Deposit Insurance 

Corporation (FDIC). These notes are an integral part of this publication and provide information regarding the comparability of source 

data and reporting differences over time.

Tables I-A through VIII-A.

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

FDIC Quarterly Banking Profile is aggregated for all FDIC-insured Call 

Report filers, both commercial banks and savings institutions. Some 

tables are arrayed by groups of FDIC-insured institutions based 

on predominant types of asset concentration, while other tables 

aggregate institutions by asset size and geographic region. Quarterly 

and full-year data are provided for selected indicators, including 

aggregate condition and income data, performance ratios, condition 

ratios, and structural changes, as well as past due, noncurrent, and 

charge-off information for loans outstanding and other assets.

Tables I-B through VI-B.

The information presented in Tables I-B through VI-B is aggregated for all FDIC-insured commercial banks and savings institutions 

meeting the criteria for community banks that were developed for 

the FDIC’s Community Banking Study, published in December, 2012: 

https://www.fdic.gov/resources/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 number of and deposits per office are adjusted 

upward quarterly. For banking offices, banks must have more 

than one office, and the maximum number of offices is 40 in 1985 

and reached 87 in 2016. The maximum level of deposits for any 

one office is $1.25 billion in deposits in 1985 and reached $6.97 

billion in deposits in 2016. The remaining geographic limitations 

are also based on maximums for the number of states (fixed at 3) 

and large metropolitan areas (fixed at 2) in which the organization 

maintains offices. Branch office data are based on the most recent 

data from the annual June 30 Summary of Deposits Survey that are 

available at the time of publication. 

Finally, the definition establishes an asset-size limit, also adjusted 

upward quarterly and below which the limits on banking activities and geographic scope are waived. The asset-size limit is $250 

million in 1985 and reached $1.39 billion in 2016. This final step 

acknowledges the fact that most of those small banks that are not 

excluded as specialty banks meet the requirements for banking 

activities and geographic limits in any event.

Summary of FDIC Research Definition of 

Community Banking Organizations

Community banks are designated at the level of the banking 

organization.

(All charters under designated holding companies are considered 

community banking charters.)

Exclude: Any organization with:

— No loans or no core deposits

— Foreign Assets ≥ 10% of total assets

— More than 50% of assets in certain specialty banks, including:

•	 credit card specialists

•	 consumer nonbank banks1

•	 industrial loan companies

•	 trust companies

•	 bankers’ banks

Include: All remaining banking organizations with:

— Total assets < indexed size threshold 2

— Total assets ≥ indexed size threshold, where:

•	 Loan to assets > 33%

•	 Core deposits to assets > 50%

•	 More than 1 office but no more than the indexed maxim

number of offices.3

•	 Number of large MSAs with offices ≤ 2

•	 Number of states with offices ≤ 3

•	 No single office with deposits > indexed maximum branch

deposit size.4

Tables I-C through IV-C.

A separate set of tables (Tables I-C through IV-C) provides comparative quarterly data related to the Deposit Insurance Fund (DIF), 

problem institutions, failed institutions, estimated FDIC-insured 

deposits, as well as assessment rate information. Depository insti1 Consumer nonbank banks are financial institutions with limited charters that 

can make commercial loans or take deposits, but not both.

2 Asset size threshold indexed to equal $250 million in 1985 and $1.39 billion in 

2016.

3 Maximum number of offices indexed to equal 40 in 1985 and 87 in 2016.

4 Maximum branch deposit size indexed to equal $1.25 billion in 1985 and 

$6.97 billion in 2016.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 27

tutions 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-of-period amount plus endof-period amount plus any interim periods, divided by the total 

number of periods). For “pooling-of-interest” mergers, the assets 

of the acquired institution(s) are included in average assets, since 

the year-to-date income includes the results of all merged institutions. No adjustments are made for “purchase accounting” mergers. Growth rates represent the percentage change over a 12-month 

period in totals for institutions in the base period to totals for institutions in the current period. For the community bank subgroup, 

growth rates will reflect changes over time in the number and 

identities of institutions designated as community banks, as well 

as changes in the assets and liabilities, and income and expenses of 

group members. Unless indicated otherwise, growth rates are not 

adjusted for mergers or other changes in the composition of the 

community bank subgroup. When community bank growth rates 

are adjusted for mergers, prior period balances used in the calculations represent totals for the current group of community bank 

reporters, plus prior period amounts for any institutions that were 

subsequently merged into current community banks.

All data are collected and presented based on the location of each 

reporting institution’s main office. Reported data may include 

assets and liabilities located outside of the reporting institution’s 

home state. In addition, institutions may relocate across state 

lines or change their charters, resulting in an inter-regional or 

inter-industry migration; institutions can move their home offices 

between regions, savings institutions can convert to commercial 

banks, or commercial banks may convert to savings institutions.

ACCOUNTING CHANGES

Financial accounting pronouncements by the Financial Accounting 

Standards Board (FASB) can result in changes in an individual 

bank’s accounting policies and in the Call Reports they submit. Such 

accounting changes can affect the aggregate amounts presented in 

the QBP for the current period and the period-to-period comparability of such financial data. 

The current quarter’s Financial Institution Letter (FIL) and related 

Call Report supplemental instructions can provide additional explanation to the QBP reader beyond any material accounting changes 

discussed in the QBP analysis.

https://www.fdic.gov/news/financial-institution-letters/2021/

fil21025.html 

https://www.fdic.gov/regulations/resources/call/call.html

Further information on changes in financial statement presentation, income recognition and disclosure is available from the FASB. http://www.fasb.org/jsp/FASB/Page/

LandingPage&cid=1175805317350.

DEFINITIONS (in alphabetical order)

All other assets – total cash, balances due from depository institutions, premises, fixed assets, direct investments in real estate, 

investment in unconsolidated subsidiaries, customers’ liability on 

acceptances outstanding, assets held in trading accounts, federal 

funds sold, securities purchased with agreements to resell, fair 

market value of derivatives, prepaid deposit insurance assessments, 

and other assets.

All other liabilities – bank’s liability on acceptances, limited-life 

preferred stock, allowance for estimated off-balance-sheet credit 

losses, fair market value of derivatives, and other liabilities.

Assessment base – effective April 1, 2011, the deposit insurance 

assessment base changed to “average consolidated total assets 

minus average tangible equity” with an additional adjustment to 

the assessment base for banker’s banks and custodial banks, as 

permitted under Dodd-Frank. Previously the assessment base was 

“assessable deposits” and consisted of deposits in banks’ domestic 

offices with certain adjustments.

Assessment rate schedule – Initial base assessment rates for 

small institutions are based on a combination of financial ratios and 

CAMELS component ratings. Initial rates for large institutions—

generally those with at least $10 billion in assets—are also based 

on CAMELS component ratings and certain financial measures 

combined into two scorecards—one for most large institutions and 

another for the remaining very large institutions that are structurally and operationally complex or that pose unique challenges and 

risks in case of failure (highly complex institutions). The FDIC may 

take additional information into account to make a limited adjustment to a large institution’s scorecard results, which are used to 

determine a large institution’s initial base assessment rate.

While risk categories for small institutions (except new institutions) were eliminated effective July 1, 2016, initial rates for small 

institutions are subject to minimums and maximums based on an 

institution’s CAMELS composite rating. (Risk categories for large 

institutions were eliminated in 2011.)

The current assessment rate schedule became effective July 1, 2016. 

Under the current schedule, initial base assessment rates range 

from 3 to 30 basis points. An institution’s total base assessment rate 
2021   •   Volume 15  • Number 2

28 FDIC QUARTERLY

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 3 basis points would have a 

maximum unsecured debt adjustment of 1.5 basis points and could 

not have a total base assessment rate lower than 1.5 basis points. 

(2) Depository Institution Debt Adjustment: For institutions that 

hold long-term unsecured debt issued by another insured depository institution, a 50 basis point charge is applied to the amount of 

such debt held in excess of 3 percent of an institution’s Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for large institutions 

that are not well capitalized or do not have a composite CAMELS 

rating of 1 or 2 may increase (not to exceed 10 basis points) if their 

brokered deposits exceed 10 percent of domestic deposits.

The assessment rate schedule effective July 1, 2016, is shown in the 

following table:

Total Base Assessment Rates*

Established Small Banks Large and 

Highly 

Complex 

Institutions**

CAMELS Composite

1 or 2 3 4 or 5

Initial Base 

Assessment Rate 3 to 16 6 to 30 16 to 30 3 to 30

Unsecured Debt 

Adjustment -5 to 0 -5 to 0 -5 to 0 -5 to 0

Brokered Deposit 

Adjustment N/A N/A N/A 0 to 10

Total Base 

Assessment Rate 1.5 to 16 3 to 30 11 to 30 1.5 to 40

* All amounts for all categories are in basis points annually. Total base rates that are not the 

minimum or maximum rate will vary between these rates. Total base assessment rates do not 

include the depository institution debt adjustment.

 ** Effective July 1, 2016, large institutions are also subject to temporary assessment 

surcharges in order to raise the reserve ratio from 1.15 percent to 1.35  percent. The 

surcharges amount to 4.5 basis points of a large institution’s assessment base (after making 

certain adjustments).

Each institution is assigned a risk-based rate for a quarterly assessment period near the end of the quarter following the assessment 

period. Payment is generally due on the 30th day of the last month 

of the quarter following the assessment period. Supervisory rating 

changes are effective for assessment purposes as of the examination transmittal date.

Assets securitized and sold – total outstanding principal balance of assets securitized and sold with servicing retained or other 

seller-provided credit enhancements.

Capital Purchase Program (CPP) – as announced in October 2008 

under the TARP, the Treasury Department purchase of noncumulative perpetual preferred stock and related warrants that is treated 

as Tier 1 capital for regulatory capital purposes is included in “Total 

equity capital.” Such warrants to purchase common stock or noncumulative preferred stock issued by publicly-traded banks are 

reflected as well in “Surplus.” Warrants to purchase common stock 

or noncumulative preferred stock of not-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 include institutions that have a 

Community Bank Leverage Ratio election in effect at the report 

date.

Construction and development loans – includes loans for all 

property types under construction, as well as loans for land acquisition and development.

Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated subsidiaries, less goodwill and other ineligible intangible assets. The amount 

of eligible intangibles (including servicing rights) included in core 

capital is limited in accordance with supervisory capital regulations.

Cost of funding earning assets – total interest expense paid on 

deposits and other borrowed money as a percentage of average 

earning assets.

Credit enhancements – techniques whereby a company attempts 

to reduce the credit risk of its obligations. Credit enhancement may 

be provided by a third party (external credit enhancement) or by the 

originator (internal credit enhancement), and more than one type 

of enhancement may be associated with a given issuance.

Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings 

Association (SAIF) Insurance Funds were merged in 2006 by the 

Federal Deposit Insurance Reform Act to form the DIF.

Derivatives notional amount – the notional, or contractual, 

amounts of derivatives represent the level of involvement in the 

types of derivatives transactions and are not a quantification of 

market risk or credit risk. Notional amounts represent the amounts 

used to calculate contractual cash flows to be exchanged.

Derivatives credit equivalent amount – the fair value of the 

derivative plus an additional amount for potential future credit 

exposure based on the notional amount, the remaining maturity 

and type of the contract.

Derivatives transaction types:

Futures and forward contracts – contracts in which the buyer 

agrees to purchase and the seller agrees to sell, at a specified 

future date, a specific quantity of an underlying variable or index 

at a specified price or yield. These contracts exist for a variety of 

variables or indices, (traditional agricultural or physical commodities, as well as currencies and interest rates). Futures contracts are standardized and are traded on organized exchanges 

which set limits on counterparty credit exposure. Forward contracts do not have standardized terms and are traded over the 

counter.

Option contracts – contracts in which the buyer acquires the 

right to buy from or sell to another party some specified amount 

of an underlying variable or index at a stated price (strike price) 

during a period or on a specified future date, in return for compensation (such as a fee or premium). The seller is obligated to 

purchase or sell the variable or index at the discretion of the 

buyer of the contract.

Swaps – obligations between two parties to exchange a series 

of cash flows at periodic intervals (settlement dates), for a 
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 29

specified period. The cash flows of a swap are either fixed, or 

determined for each settlement date by multiplying the quantity 

(notional principal) of the underlying variable or index by specified reference rates or prices. Except for currency swaps, the 

notional principal is used to calculate each payment but is not 

exchanged.

Derivatives underlying risk exposure – the potential exposure 

characterized by the level of banks’ concentration in particular 

underlying instruments, in general. Exposure can result from 

market risk, credit risk, and operational risk, as well as, interest 

rate risk.

Domestic deposits to total assets – total domestic office deposits 

as a percent of total assets on a consolidated basis.

Earning assets – all loans and other investments that earn interest 

or dividend income.

Efficiency ratio – Noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest 

income. This ratio measures the proportion of net operating revenues that are absorbed by overhead expenses, so that a lower value 

indicates greater efficiency.

Estimated insured deposits – in general, insured deposits are 

total domestic deposits minus estimated uninsured deposits. 

Beginning March 31, 2008, for institutions that file Call Reports, 

insured deposits are total assessable deposits minus estimated 

uninsured deposits. Beginning September 30, 2009, insured 

deposits include deposits in accounts of $100,000 to $250,000 

that are covered by a temporary increase in the FDIC’s standard 

maximum deposit insurance amount (SMDIA). The Dodd-Frank 

Wall Street Reform and Consumer Protection Act enacted on July 

21, 2010, made permanent the standard maximum deposit insurance amount (SMDIA) of $250,000. Also, the Dodd-Frank Act 

amended the Federal Deposit Insurance Act to include noninterestbearing transaction accounts as a new temporary deposit insurance 

account category. All funds held in noninterest-bearing transaction 

accounts were fully insured, without limit, from December 31, 2010, 

through December 31, 2012.

Failed/assisted institutions – an institution fails when regulators 

take control of the institution, placing the assets and liabilities into 

a bridge bank, conservatorship, receivership, or another healthy 

institution. This action may require the FDIC to provide funds to 

cover losses. An institution is defined as “assisted” when the institution remains open and receives assistance in order to continue 

operating.

Fair Value – the valuation of various assets and liabilities on the 

balance sheet—including trading assets and liabilities, availablefor-sale securities, loans held for sale, assets and liabilities accounted for under the fair value option, and foreclosed assets—involves 

the use of fair values. During periods of market stress, the fair values 

of some financial instruments and nonfinancial assets may decline.

FHLB advances – all borrowings by FDIC-insured institutions 

from the Federal Home Loan Bank System (FHLB), as reported by 

Call Report filers, and by TFR filers prior to March 31, 2012.

Goodwill and other intangibles – intangible assets include 

servicing rights, purchased credit card relationships, and other 

identifiable intangible assets. Goodwill is the excess of the purchase 

price over the fair market value of the net assets acquired, less 

subsequent impairment adjustments. Other intangible assets are 

recorded at fair value, less subsequent quarterly amortization and 

impairment adjustments.

Loans secured by real estate – includes home equity loans, junior 

liens secured by 1-4 family residential properties, and all other 

loans secured by real estate.

Loans to individuals – includes outstanding credit card balances 

and other secured and unsecured consumer loans.

Long-term assets (5+ years) – loans and debt securities with 

remaining maturities or repricing intervals of over five years.

Maximum credit exposure – the maximum contractual credit 

exposure remaining under recourse arrangements and other sellerprovided credit enhancements provided by the reporting bank to 

securitizations.

Mortgage-backed securities – certificates of participation in pools 

of residential mortgages and collateralized mortgage obligations 

issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below.

Net charge-offs – total loans and leases charged off (removed from 

balance sheet because of uncollectability), less amounts recovered 

on loans and leases previously charged off.

Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to depositors and other creditors, expressed as a percentage of average 

earning assets. No adjustments are made for interest income that is 

tax exempt.

Net loans to total assets – loans and lease financing receivables, 

net of unearned income, allowance and reserves, as a percent of 

total assets on a consolidated basis.

Net operating income – income excluding discretionary transactions such as gains (or losses) on the sale of investment securities 

and extraordinary items. Income taxes subtracted from operating 

income have been adjusted to exclude the portion applicable to 

securities gains (or losses).

Noncurrent assets – the sum of loans, leases, debt securities, and 

other assets that are 90 days or more past due, or in nonaccrual 

status.

Noncurrent loans & leases – the sum of loans and leases 90 days 

or more past due, and loans and leases in nonaccrual status.

Number of institutions reporting – the number of institutions 

that actually filed a financial report.

New reporters – insured institutions filing quarterly financial 

reports for the first time.

Other borrowed funds – federal funds purchased, securities 

sold with agreements to repurchase, demand notes issued to the 

U.S. Treasury, FHLB advances, other borrowed money, mortgage 

indebtedness, obligations under capitalized leases and trading liabilities, less revaluation losses on assets held in trading accounts.

Other real estate owned – primarily foreclosed property. Direct 

and indirect investments in real estate ventures are excluded. The 

amount is reflected net of valuation allowances. For institutions 

that filed a Thrift Financial Report (TFR), the valuation allowance 

subtracted also includes allowances for other repossessed assets. 

Also, for TFR filers the components of other real estate owned are 

reported gross of valuation allowances. (TFR filers began filing Call 

Reports effective with the quarter ending March 31, 2012.)

Percent of institutions with earnings gains – the percent of 

institutions that increased their net income (or decreased their 

losses) compared to the same period a year earlier.
2021   •   Volume 15  • Number 2

30 FDIC QUARTERLY

“Problem” institutions – federal regulators assign a composite 

rating to each financial institution, based upon an evaluation of 

financial and operational criteria. The rating is based on a scale of 

1 to 5 in ascending order of supervisory concern. “Problem” institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. 

Depending upon the degree of risk and supervisory concern, they 

are rated either a “4” or “5.” The number and assets of “problem” 

institutions are based on FDIC composite ratings. Prior to March 31, 

2008, for institutions whose primary federal regulator was the OTS, 

the OTS composite rating was used.

Recourse – an arrangement in which a bank retains, in form or in 

substance, any credit risk directly or indirectly associated with an 

asset it has sold (in accordance with generally accepted accounting 

principles) that exceeds a pro rata share of the bank’s claim on the 

asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse.

Reserves for losses – the allowance for loan and lease losses on a 

consolidated basis.

Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. Excludes 

restructured loans and leases that are not in compliance with the 

modified terms.

Retained earnings – net income less cash dividends on common 

and preferred stock for the reporting period.

Return on assets – bank net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total 

(consolidated) assets. The basic yardstick of bank profitability.

Return on equity – bank net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total 

equity capital.

Risk-weighted assets – assets adjusted for risk-based capital 

definitions which include on-balance-sheet as well as off-balancesheet items multiplied by risk-weights that range from zero to 

200 percent. A conversion factor is used to assign a balance sheet 

equivalent amount for selected off-balance-sheet accounts.

Securities – excludes securities held in trading accounts. Banks’ 

securities portfolios consist of securities designated as “held-tomaturity” (reported at amortized cost (book value)), securities designated as “available-for-sale” (reported at fair (market) value), 

and equity securities with readily determinable fair values not held 

for trading.

Securities gains (losses) – realized gains (losses) on held-tomaturity and available-for-sale securities, before adjustments for 

income taxes. Thrift Financial Report (TFR) filers also include gains 

(losses) on the sales of assets held for sale. (TFR filers began filing 

Call Reports effective with the quarter ending March 31, 2012.)

Seller’s interest in institution’s own securitizations – the 

reporting bank’s ownership interest in loans and other assets that 

have been securitized, except an interest that is a form of recourse 

or other seller-provided credit enhancement. Seller’s interests 

differ from the securities issued to investors by the securitization 

structure. The principal amount of a seller’s interest is generally 

equal to the total principal amount of the pool of assets included 

in the securitization structure less the principal amount of those 

assets attributable to investors, i.e., in the form of securities issued 

to investors.

Small Business Lending Fund – The Small Business Lending 

Fund (SBLF) was enacted into law in September 2010 as part 

of the Small Business Jobs Act of 2010 to encourage lending to 

small businesses by providing capital to qualified community 

institutions with assets of less than $10 billion. The SBLF Program 

is administered by the U.S. Treasury Department (https://

home.treasury.gov/policy-issues/small-business-programs/

small-business-lending-fund).

Under the SBLF Program, the Treasury Department purchased 

noncumulative perpetual preferred stock from qualifying 

depository institutions and holding companies (other than 

Subchapter S and mutual institutions). When this stock has been 

issued by a depository institution, it is reported as “Perpetual 

preferred stock and related surplus.” For regulatory capital 

purposes, this noncumulative perpetual preferred stock qualifies as 

a component of Tier 1 capital. Qualifying Subchapter S corporations 

and mutual institutions issue unsecured subordinated debentures to 

the Treasury Department through the SBLF. Depository institutions 

that issued these debentures report them as “Subordinated notes 

and debentures.” For regulatory capital purposes, the debentures 

are eligible for inclusion in an institution’s Tier 2 capital in 

accordance with their primary federal regulator’s capital standards. 

To participate in the SBLF Program, an institution with outstanding 

securities issued to the Treasury Department under the Capital 

Purchase Program (CPP) was required to refinance or repay in full 

the CPP securities at the time of the SBLF funding. Any outstanding 

warrants that an institution issued to the Treasury Department 

under the CPP remain outstanding after the refinancing of the CPP 

stock through the SBLF Program unless the institution chooses to 

repurchase them.

Subchapter S corporation – a Subchapter S corporation is treated 

as a pass-through entity, similar to a partnership, for federal 

income tax purposes. It is generally not subject to any federal 

income taxes at the corporate level. This can have the effect of 

reducing institutions’ reported taxes and increasing their after-tax 

earnings.

Trust assets – market value, or other reasonably available value of 

fiduciary and related assets, to include marketable securities, and 

other financial and physical assets. Common physical assets held 

in fiduciary accounts include real estate, equipment, collectibles, 

and household goods. Such fiduciary assets are not included in the 

assets of the financial institution.

Unearned income and contra accounts – unearned income for 

Call Report filers only.

Unused loan commitments – includes credit card lines, home 

equity lines, commitments to make loans for construction, loans 

secured by commercial real estate, and unused commitments to 

originate or purchase loans. (Excluded are commitments after 

June 2003 for originated mortgage loans held for sale, which are 

accounted for as derivatives on the balance sheet.)

Yield on earning assets – total interest, dividend, and fee income 

earned on loans and investments as a percentage of average 

earning assets.
THE HISTORIC RELATIONSHIP BETWEEN BANK NET INTEREST MARGINS 

AND SHORT-TERM INTEREST RATES

Developments since the Great Recession generally support the idea that protracted periods 

of low interest rates tend to compress net interest margin (NIM) at FDIC-insured institutions (banks). NIM decreased during the period of historically low interest rates after that 

recession, increased during the upward interest rate cycle (rate cycle) between 2015 and 

2019, and decreased again as interest rates fell toward zero with the onset of the COVID-19 

pandemic. While recent rate movements have been associated with a change in NIM, the 

direction of the relationship can differ across banks depending on a variety of factors. 

This article explores the historical relationship between interest rates and NIM at banks, 

discusses how NIM responded to interest rate changes in previous rate cycles, and then 

considers which types of banks may have a NIM that is more sensitive to changes in the 

effective federal funds rate (federal funds rate). The analysis shows that in most rate cycles 

since the 1980s, the NIM of typical community banks (median NIM) has moved in the same 

direction as changes in the federal funds rate, but that this relationship has been much less 

pronounced for banks with high concentrations of long-term assets.

The Effect of Short-Term 

Interest Rates on NIM Is 

Theoretically Ambiguous 

and Influenced by Many 

Banking and Economic 

Conditions

 It is often assumed that higher short-term market interest rates result in higher net interest income, which translates into higher NIM and greater profitability in the banking 

industry more generally.1 This reasoning led to broader concerns about bank profitability 

when a prolonged period of low interest rates began in 2008.2

But the directional effect of rising short-term market interest rates on NIM is theoretically 

ambiguous because a bank’s cost of funds may increase either faster or slower than its yield 

on earning assets. When interest rates rise, banks may have to pay higher interest rates on 

some portion of their deposits or other liabilities to attract or keep funding; some portion 

of the bank’s assets, meanwhile, will continue to yield their contractual interest rates and 

therefore not reprice upward.

Many factors can influence the comparative changes in bank asset yields and funding costs. 

In addition to the maturity distribution and repricing distribution of bank assets, which 

figure heavily in this article’s analysis, the contractual and effective maturities of liabilities 

play an important role. Certain banks may have a high number of longer-term loans with a 

floating rate that reprice quickly as short-term interest rates increase, such as credit cards, 

other types of consumer loans, and commercial loans. Even longer-term assets without a 

1 For academic discussion on the subject see: Diana Hancock, “Bank Profitability, Interest Rates, and Monetary Policy,” 

Journal of Money, Credit, and Banking 17, no. 2 (May 1985), or Paul A. Samuelson, “The Effect of Interest Rate Increases 

on the Banking System,” American Economic Review 35, no. 1 (March 1945). For discussion in the popular press, see: 

John Carney, “When the Fed Lifts Off, This Is What to Watch at Banks,” Wall Street Journal, September 29, 2015, and 

Avi Salzman, “Banks Will Benefit From Rising Rates. Other Sectors, Not So Much,” Barron’s, October 12, 2018.

2 The interest rate is just one factor that affects bank profitability. For a discussion of some of the other determinants 

of bank profitability, see Jared Fronk, “Core Profitability of Community Banks: 1985-2015,” FDIC Quarterly 10, no. 4 

(November 2016).

FDIC QUARTERLY 31

Overview

What Is Net Interest Margin?

Net interest margin (NIM) is a key profitability ratio that measures the difference between the interest income generated 

by bank lending and investment and the interest expense incurred from bank borrowing activities, normalized by average 

earning assets. The ratio is comparable over time and across banks of different sizes.

This measure is so popular that banks report it, bank examiners assess it for individual banks, and the FDIC calculates it for 

the industry every quarter in the Quarterly Banking Profile. For a vast majority of banks, net interest income is the primary 

source of income, and for such banks NIM is a primary component of profitability.

Several components of the Reports of Condition and Income (Call Reports) feed into the yield on earning assets: income 

on loans, leases, balances due from depository institutions, securities, trading assets, federal funds sold, and other interest income. Similarly, several components of the Call Report feed into the cost of funds: expense on deposits, federal funds 

purchased, trading liabilities, subordinated notes, and other interest expense.
2021   •   Volume 15  • Number 2

32 FDIC QUARTERLY

floating rate can reprice during times of lower interest rates, in particular 30-year residential mortgage loans which can be prepaid without penalty to get a lower interest rate for the 

borrower. The same is true of the composition of their deposits. For example, some banks 

may be able to delay increasing their deposit interest rates when market interest rates 

increase and reduce deposit interest rates relatively promptly when market interest rates 

decrease. All of these factors, unique to each specific bank’s portfolio of loans and deposits, 

will have an effect on NIM over the course of a rate cycle.

Broad economic factors can affect NIM as well. For instance, in a time of economic contraction (out of which stem some of the rate cycles in this analysis) the Federal Reserve may 

lower the federal funds rate. Simultaneously, many banks may report an increase in nonaccrual loans, which would likely hurt their NIM in a way that is not predictable by maturity 

structure, but by loan quality. Similarly, economic expansions influence NIM in unique 

ways. Often, upward rate environments are caused by good economic times, when banks 

tend to lend more, and the resulting increase in the composition of loans relative to investments tends to increase asset yields. At the same time, expanding lending requires increasing bank funding. This could require increasing the cost of funding to attract new deposits 

or using other more expensive funding sources. These potentially countervailing effects 

add to the ambiguity of whether NIM increases or decreases when interest rates rise.

Finally, effects of interest rates on NIM reflect not just changes to the federal funds rate but 

changes in interest rates across the yield curve. Thus, for example, the yield a bank will earn 

on a new mortgage loan depends on the prevailing interest rates on mortgages, not on the 

federal funds rate. Changes in NIM will vary by bank depending on the composition of assets 

and liabilities by yield, cost, and maturity, and on the specific changes in the yield curve.

Because it is not immediately clear how rising interest rates will affect NIM, previous 

research examined the actual effects over time. Two studies found that NIM moves in the 

opposite direction as the federal funds rate, in contrast to conventional wisdom. Staff 

studies from the Federal Reserve Bank of St. Louis and the Federal Reserve Bank of Richmond published in 2016 found that over shorter periods the banking industry’s weighted 

average NIM often moves in the opposite direction of interest rates.3 The studies computed 

the weighted average NIM of all FDIC-insured banks and the weighted average cost of funds 

and yield on assets and concluded that NIM typically increased during falling rate cycles 

and decreased during rising rate cycles. The studies posited that the results are driven by 

the sensitivity of funding costs to changes in interest rates.

Previous work has also considered the historically low interest rates that prevailed in the 

decade after the onset of the Great Recession in 2008.4 Over that period, interest rates, 

including the federal funds rate, and bank funding costs were historically low. But NIM was 

low as well. A contributing factor to low NIM during this period was the extended length of 

the historically low rates; maturing assets were replaced by new assets with lower interest 

rates. This steadily drove the yield on earning assets lower. As this research was conducted 

before liftoff from the zero lower bound in 2015, it bears revisiting now that an additional 

interest rate cycle has completed.

Considering that the theoretical predictions of how interest rates affect NIM are unclear, 

this article explores the topic in all rate cycles since 1984 by examining the change in 

the median bank NIM during rising and falling rate cycles. It looks at this change for the 

median community bank and the median noncommunity bank over each rate cycle, and 

for banks with relatively short-term asset portfolios and with relatively long-term asset 

portfolios. For simplicity, the analysis of interest rates focuses solely on changes in the 

federal funds rate. Importantly, the analysis focuses on median changes in NIM rather 

3 David Wheelock, “Are Banks More Profitable When Interest Rates Are High or Low?” Federal Reserve Bank of St. Louis 

Economy Blog, May 16, 2016; and Huberto M. Ennis, Helen Fessenden, and John R. Walter, “Do Net Interest Margins and 

Interest Rates Move Together?” Federal Reserve Bank of Richmond Economic Brief no. 16-05, May 2016.

4 Francisco B. Covas, Marcelo Rezende, and Cindy M. Vojtech, “Why Are Net Interest Margins of Large Banks So 

Compressed?” FEDS Notes, Federal Reserve Board of Governors, October 5, 2015.
THE HISTORIC RELATIONSHIP BETWEEN BANK NET INTEREST MARGINS AND SHORT-TERM INTEREST RATES

FDIC QUARTERLY 33

than weighted average changes. The NIM changes reported in this article are thus more 

reflective of typical small banks than of the large banks that dominate weighted average calculations. In line with conventional wisdom, the analysis demonstrates that at the 

median—in other words, for the typical community bank—NIM has tended to increase 

when short-term interest rates increase, and decrease when short-term interest rates 

decrease. The analysis also confirms the importance of the maturity distribution of bank 

assets in determining how NIM responds to interest-rate changes, including how differences in asset maturities help explain differences in NIM between the responses of 

community banks versus the responses of noncommunity banks. The analysis thus sheds 

some light on the broader discussion of bank profitability and may help banks understand 

the challenging interest rate environment.

The Spread Between the 

Banks With the Highest 

and Lowest NIM Has Been 

Relatively Stable Since the 

Early 1990s

 Both the NIM of the median bank and the distribution of NIM for the entire industry have 

trended down during each rate cycle since the 1980s. Chart 1 shows the NIM for the 5th and 

95th percentile of banks at the beginning and end of each rate cycle; while the distribution 

has decreased slowly over time, it does not display any major jumps. The spread between 

NIM at the 25th and 75th percentile, illustrated by the boxes, appears more stable over time, 

a trend comparable to the trend for NIM of the median bank. This suggests that examining trends based on the median NIM instead of the average NIM is also a good method for 

capturing industry trends. This approach also adds to the understanding of trends affecting the vast majority of small banks, as much previous analysis has been based on the 

industry-weighted average NIM, which is influenced by the largest banks.5

The Median Bank Net Interest Margin Has Trended Down but the 

Distribution Has Been Stable

Source: FDIC.

Note: Each box and whisker displays the distribution of net interest margin in the first and last quarter of each rate cycle in the analysis. In two

 instances, a rate cycle end date coincides with the next cycle start date, resulting in 18 distinct start or end quarters. Box denotes the range from

25th to 75th percentiles. 

Percent

0.80

1.53 1.76 1.74

3.00 2.93 2.82 2.71 2.69 2.50 2.58 2.52 2.48 2.13 2.46 2.66 2.64 2.25

7.25

6.36 6.06

6.62 6.36 6.23 6.51

5.78 6.23

5.58 5.44

5.94 5.71

4.99 4.96 5.04 5.07 5.12

0

1

2

3

4

5

6

7

8

3Q1984 4Q1992 3Q2000 2Q2007 2Q2019

Increasing Rate Cycle Decreasing Rate Cycle

Median NIM 5th and 95th Percentile

Chart 1

NIM Has Varied With 

Interest Rates Over Time, 

but Both Have Trended 

Downward

 Since the 1980s, interest rates have declined notably and bank NIM has trended downward. 

The median quarterly NIM for both community and noncommunity banks and the federal 

funds rate since 1984 are displayed in Chart 2.6 The Federal Reserve adjusts the federal 

funds rate in response to real economic conditions as part of conducting monetary policy, 

but the rate still displays a clear downward trend over time. The corresponding decline in 

NIM has been even more pronounced for noncommunity banks than for community banks, 

5 As of first quarter 2021, FDIC-insured banks had a median asset size of $294.4 million. FDIC-insured community banks 

had a median asset size of $266.2 million and noncommunity banks had a median asset size of $3.8 billion.

6 This article analyzes quarterly net interest margins using the calculation that the Quarterly Banking Profile uses: 

annualized quarterly net interest income, interest income minus interest expense, divided by two-period average 

earning assets. For simplicity, when discussing the banking industry NIM, the article is referring to the median 

industry quarterly NIM. Likewise, when discussing community and noncommunity bank NIM, the article is referring 

to the median community and noncommunity bank quarterly NIM. Community banks are identified using criteria in 

Appendix A of the FDIC Community Banking Study, December 2020, https://www.fdic.gov/resources/community-banking/

report/2020/2020-cbi-study-full.pdf.
2021   •   Volume 15  • Number 2

34 FDIC QUARTERLY

which may have occurred for a variety of reasons. Noncommunity banks often have more 

sources of noninterest income, which mitigates the adverse impact of this trend for these 

banks. This overall downward trend in industry NIM has caused recent concerns about 

profitability challenges for community banks, and how community banks may be responding by changing asset and liability structures or by adopting other strategies to maintain 

NIM that could pose additional risk.

The Eective Federal Funds Rate and Median Bank Net Interest Margin

Have Trended Downward Over Time

Sources: Federal Reserve Economic Database and FDIC.

Note: Data through first quarter 2021. 

Median Net Interest Margin

Percent

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2021

0

2

4

6

8

10

12

Eective Federal Funds Rate Community Banks (Le Axis) Percent

Noncommunity Banks (Le Axis) Eective Federal Funds Rate (Right Axis)

Chart 2

Chart 2 shows that while interest rates and NIM both have generally drifted downward 

over time, the relationship between them is less clear. In some periods, NIM continued 

to decline during an upward rate cycle. This makes sense in light of the above discussion 

about how a change in interest rates may not necessarily result in a corresponding change 

in NIM. Decomposing median NIM into two components, the median yield on earning 

assets and median cost of funds, tells a similar story. The trends of both components for 

both community banks and noncommunity banks move in a similar pattern over time. One 

key difference is that the percentage point declines in the yield on earning assets and in the 

cost of funds have been more pronounced than the overall decline in median NIM. But since 

both components have trended downward roughly the same level, this change is netted out 

of median NIM to create the decline shown in Chart 2.

The rest of this study breaks the historical changes in the federal funds rate—the gold line 

in Chart 2—into upward and downward rate cycles. In determining the exact cycle starts 

and endpoints in this analysis, downward cycles are dated from the peak of a rate cycle to 

the beginning of the trough and do not include flat periods of interest rates, similar to work 

conducted by the Federal Reserve Bank of Richmond.7 Upward rate cycles are dated from 

the end of the trough to the peak.8

7 Ennis et al. May 2016.

8 To limit our analysis to the immediate effects of the upward or downward adjustment in interest rates, some months 

in which interest rates were held constant—typically following downward cycles—are excluded from analysis. We 

determined five separate upward rate cycles for analysis: first quarter 1987 to second quarter 1989, fourth quarter 1993 

to second quarter 1995, first quarter 1999 to 3rd quarter 2000, first quarter 2004 to third quarter 2006, and fourth quarter 

2015 to first quarter 2019. We determined five separate downward rate cycles for analysis: third quarter 1984 to third 

quarter 1986, second quarter 1989 to fourth quarter 1992, third quarter 2000 to fourth quarter 2003, second quarter 2007 

to first quarter 2009, and second quarter 2019 to second quarter 2020.
THE HISTORIC RELATIONSHIP BETWEEN BANK NET INTEREST MARGINS AND SHORT-TERM INTEREST RATES

FDIC QUARTERLY 35

Median NIM for the Banking 

Industry as a Whole Has 

Generally Increased in 

Upward Rate Cycles and 

Decreased in Downward 

Rate Cycles

 Interest rates and median NIM have generally moved in the same direction in both downward and upward rate cycles since the 1980s (Table 1). In nearly every upward rate cycle, 

median NIM expanded between 12 and 22 basis points, with one exception in the early 

1990s. Similarly, in all but one downward rate cycle, NIM contracted between 22 and 

32 basis points. The average length of downward and upward rate cycles was the same (ten 

quarters). During downward rate cycles, however, the magnitude of the reductions in both 

NIM and the federal funds rate tended to exceed the increases in NIM and the federal funds 

rate that occurred in the upward rate cycles. One striking finding is that the change in NIM 

was fairly consistent in size throughout rate cycles, even though the total change in the 

federal funds rate was much smaller in later cycles.

Change in Median Industry Net Interest Margin Over Upward and Downward Rate Cycles

Upward Rate Cycles (Percentage Points)

1Q 1987 to 

2Q 1989

4Q 1993 to 

2Q 1995

1Q 1999 to 

3Q 2000

1Q 2004 to 

3Q 2006

4Q 2015 to 

1Q 2019

Change in Effective Federal Funds Rate 3.51 3.03 1.79 4.24 2.04

Change in Median

Yield on Earning Assets –0.19 0.74 0.70 2.71 0.16

Cost of Funds –0.40 0.75 0.55 2.58 0.05

Net Interest Margin 0.22 –0.01 0.15 0.13 0.12

Downward Rate Cycles (Percentage Points)

3Q 1984 to 

3Q 1986

2Q 1989 to 

4Q 1992

3Q 2000 to 

4Q 2003

2Q 2007 to 

1Q 2009

2Q 2019 to 

2Q 2020

Change in Effective Federal Funds Rate –5.18 –6.69 –5.52 –5.07 –0.85

Change in Median

Yield on Earning Assets –3.08 –1.71 –3.07 –0.77 –0.44

Cost of Funds –2.86 –2.07 –2.81 –0.45 –0.20

Net Interest Margin –0.22 0.36 –0.25 –0.32 –0.25

Sources: Federal Reserve Economic Database and FDIC.

Note: Change measured in percentage points. For the first and last quarter of each cycle, the bank with the median NIM is found, and the corresponding yield on earning assets 

and cost of funds for that bank are selected. Then the change is calculated. 

Table 1

This Relationship Holds for 

Both Community and 

Noncommunity Banks

 Generally, upward rate cycles have corresponded with an expansion of NIM for both 

community and noncommunity banks. Table 2 shows changes for the median bank between 

the starting quarter and ending quarter of each rate cycle.9 Community banks reported 

an increase or no change in NIM in each of the five upward rate cycles, consistent with 

the conventional wisdom that increasing interest rates increase NIM. In each of these five 

periods, both the yield on earning assets and cost of funds increased, but the yield on earning assets increased more, resulting in the increase in NIM. Noncommunity banks reported 

a similar trend, with NIM increasing in four out of five upward rate cycles. Like community 

banks, in each of these upward rate cycles both their yield on earning assets and their cost 

of funds increased, most often resulting in NIM expansion. These results demonstrate that 

banks may be able to exert market power as interest rates begin to rise to hold their cost of 

funds down at the beginning of upward cycles, as was observed in the most recent upward 

cycle, again affecting NIM.

9 For the first and last quarter of each cycle, the bank with the median NIM is found, and the corresponding yield on 

earning assets and cost of funds for that bank is selected. Then the change is calculated.
2021   •   Volume 15  • Number 2

36 FDIC QUARTERLY

Change in Median Community and Noncommunity Bank Net Interest Margin Over Upward Rate Cycles

Upward Rate Cycles (Percentage Points)

1Q 1987 to 

2Q 1989

4Q 1993 to 

2Q 1995

1Q 1999 to 

3Q 2000

1Q 2004 to 

3Q 2006

4Q 2015 to 

1Q 2019

Change in Effective Federal Funds Rate 3.51 3.03 1.79 4.24 2.04

Change in Median

Noncommunity Bank

Yield on Earning Assets 1.25 0.26 0.75 1.41 0.71

Cost of Funds 0.74 0.32 0.66 1.26 0.45

Net Interest Margin 0.51 –0.07 0.09 0.15 0.25

Community Bank

Yield on Earning Assets 1.97 0.88 0.20 1.47 0.97

Cost of Funds 1.80 0.88 0.04 1.34 0.86

Net Interest Margin 0.17 0.00 0.15 0.13 0.11

Sources: Federal Reserve Economic Database and FDIC.

Note: Change measured in percentage points. For the first and last quarter of each cycle, the bank with the median NIM in each group is found, and the corresponding yield on 

earning assets and cost of funds for that bank are selected. Then the change is calculated. 

Table 2

Conversely, downward rate cycles most often resulted in a compression of median NIM for 

both community and noncommunity banks. Table 3 shows that during four out of the five 

downward rate cycles between 1984 and 2020, community banks reported a decline in median 

NIM. While both the yield on earning assets and cost of funds fell during each cycle, the yield 

on earning assets almost always fell by more, and as a result median NIM declined in all downward cycles except that between second quarter 1989 and fourth quarter 1992. Noncommunity 

banks reported a decrease in median NIM in the same four out of five downward rate cycles. 

Like community banks, in each downward rate cycle both the yield on earning assets and cost 

of funds fell for noncommunity banks, but the yield on earning assets almost always fell by 

more. The two most recent downward cycles have encountered the zero lower bound, resulting in liabilities being unable to reprice as low as they otherwise would in a typical downward cycle, thereby further compressing NIM. Even so, because interest rates have started 

from relatively lower rates, the percentage change in the federal funds rate is in line with the 

percentage changes in previous downward cycles. Table 3 shows that the effects on NIM in 

downward cycles that reach the zero lower bound are similar to previous downward cycles.

Change in Median Community and Noncommunity Bank Net Interest Margin Over Downward Rate Cycles

Downward Rate Cycles (Percentage Points)

3Q 1984 to 

3Q 1986

2Q 1989 to 

4Q 1992

3Q 2000 to 

4Q 2003

2Q 2007 to 

1Q 2009

2Q 2019 to 

2Q 2020

Change in Effective Federal Funds Rate –5.18 –6.69 –5.52 –5.07 –0.85

Change in Median

Noncommunity Bank

Yield on Earning Assets –3.14 –2.20 –2.96 –2.34 –1.02

Cost of Funds –2.55 –2.48 –2.52 –1.87 –0.66

Net Interest Margin –0.59 0.28 –0.43 –0.47 –0.36

Community Bank

Yield on Earning Assets –0.94 –3.20 –2.81 –0.95 –0.26

Cost of Funds –0.79 –3.58 –2.58 –0.65 –0.04

Net Interest Margin –0.15 0.37 –0.23 –0.30 –0.23

Sources: Federal Reserve Economic Database and FDIC.

Note: Change measured in percentage points. For the first and last quarter of each cycle, the bank with the median NIM in each group is found, and the corresponding yield on 

earning assets and cost of funds for that bank are selected. Then the change is calculated. 

Table 3
THE HISTORIC RELATIONSHIP BETWEEN BANK NET INTEREST MARGINS AND SHORT-TERM INTEREST RATES

FDIC QUARTERLY 37

While Community and 

Noncommunity Banks 

Reported the Same 

Directional Change in 

Median NIM in Nearly Every 

Rate Cycle, the Magnitude 

of Change Was Different

 The change in community bank median NIM was almost always smaller in magnitude than 

that of noncommunity banks regardless of interest rate direction. For instance, in the most 

recent downward rate cycle from second quarter 2019 to second quarter 2020, noncommunity banks reported a 36 basis point decline in median NIM, while community banks 

reported a decline of only 23 basis points (Table 3). Similarly, in the most recent upward 

rate cycle from fourth quarter 2015 to first quarter 2019, noncommunity banks reported 

a 25 basis point increase in median NIM, while community banks reported an increase of 

11 basis points (Table 2). Community banks reported a smaller absolute change in median 

NIM than noncommunity banks in eight out of ten rate cycles. The difference was especially 

pronounced during downward rate cycles: the reduction in median NIM was markedly 

greater for noncommunity banks than for community banks in four of the five downward 

cycles (Table 2).

It is worth noting that in downward rate cycles, while both community and noncommunity banks reported declining yields and costs, noncommunity bank yields and costs 

responded with a substantially greater basis point decline in three of the five cycles. Interestingly, during upward rate cycles, community banks tended to report a larger change in 

both components, but the components changed more proportionally, resulting in median 

community bank NIMs that have been more insulated from changes in interest rates in 

both directions.

Dividing the data into community and noncommunity banks allows a better understanding of the differing experiences of many of the banks that the FDIC supervises and insures. 

As discussed below, the differing responses of community and noncommunity bank NIM 

to changes in interest rates are likely driven to an important extent by the differing asset 

maturity structures of the two types of banks.

The Maturity and Repricing 

Structure of Bank Assets 

Is an Important Factor in 

How NIM Responds to 

Rate Changes

 The maturity structures of bank balance sheets—the relative volumes, maturities, and 

rates of assets and liabilities—naturally play a central role in determining how NIM will 

respond to a change in prevailing interest rates. Regulators and banking institutions 

themselves dedicate much time to understanding these relationships at individual banks 

through asset-liability management and complex interest rate risk models. Given the difficulties associated with analyzing the effective maturity of deposits, however, the analysis 

in this paper focuses on how asset maturities have affected the response of NIM to changes 

in market interest rates.

Long-term assets are defined in this analysis as assets that mature or reprice in three years 

or more. Banks with a higher share of long-term assets to total assets should report smaller 

NIM compression than their counterparts during downward rate cycles, as they reprice 

their deposits and lower their cost of funds, but have a larger proportion of assets that do 

not immediately reprice downward, propping up their yield on earning assets. Conversely, 

those banks should report less NIM expansion during upward rate cycles, as they will 

reprice their deposits upward (albeit as slowly as possible) and increase their cost of funds, 

but have a larger proportion of assets that do not reprice upward in their favor, suppressing their yield on earning assets. In response to these pressures, banks may seek higher 

returns by taking on more credit risk or issuing longer maturities, which often increases 

their income at the expense of additional risk to improve their margins. While either taking 

on more credit risk or increasing maturities can increase net interest income, changing the 

structure of their balance sheet may affect how their NIM responds to interest rate changes.

Table 4 breaks down the industry into quartiles of the proportion of long-term assets to 

total assets at the beginning of each rate cycle. Banks with the highest share of long-term 

assets to total assets (those in the fourth quartile) nearly always reported the least NIM 

expansion during upward rate cycles and the least NIM compression during downward rate 
2021   •   Volume 15  • Number 2

38 FDIC QUARTERLY

cycles.10 In fact, in the upward rate cycle between first quarter 2004 and third quarter 2006, 

banks with the highest proportion of long-term assets actually reported a decline in NIM. 

Similarly, during the downward rate cycle between second quarter 2007 and first quarter 

2009, those banks in the highest quartile reported NIM expansion.

The only rate cycle in which the change in NIM was not strongly related to the proportion of 

long-term assets to total assets was the most-recent downward rate cycle of second quarter 

2019 to second quarter 2020. In that cycle, banks with the highest share of long-term assets 

reported a slightly larger decline in NIM than those in the third quartile. There are many 

reasons this may have occurred, since many factors other than a bank’s share of long-term 

assets influence NIM. It could be that the banks in the fourth quartile saw larger prepayment 

volumes than other banks. In this analysis, the designation of a bank’s quartile was held fixed 

as of the quarter before the rate cycle. Therefore, a bank in the highest quartile would remain 

in that quartile despite prepayment activity shortening its maturity profile. As a result, 

if banks in the highest quartile of long-term assets to total assets experienced the most 

prepayment activity, they may have seen yield on earning assets fall faster than would be 

expected given their relatively longer maturities at the beginning of the period. Many banks 

in the fourth quartile held a comparatively high share of mortgage loans and are more likely 

to be classified as mortgage specialists, and therefore may have experienced a relatively 

high share of the refinancing activity that occurred as mortgage rates fell. The percentage 

of single-family mortgage originations that were refinancings doubled from 34 percent to 

68 percent over the course of the most-recent downward rate cycle, and such an increase in 

refinancing activity could affect the composition of their balance sheet and hence NIM.

Change in Median Net Interest Margin Over Upward and Downward Rate Cycles by Share of Long-Term Assets

Upward Rate Cycles (Percentage Points)

1Q 1999 to 

3Q 2000

1Q 2004 to 

3Q 2006

4Q 2015 to 

1Q 2019

Change in Effective Federal Funds Rate 1.79 4.24 2.04

Change in Median NIM by Share of Long-Term Assets

First Quartile 0.36 0.50 0.20

Second Quartile 0.19 0.21 0.11

Third Quartile 0.11 0.05 0.09

Fourth Quartile 0.04 –0.18 0.04

Downward Rate Cycles (Percentage Points)

3Q 2000 to 

4Q 2003

2Q 2007 to 

1Q 2009

2Q 2019 to 

2Q 2020

Change in Effective Federal Funds Rate –5.52 –5.07 –0.21

Change in Median NIM by Share of Long-Term Assets

First Quartile –0.58 –0.80 –0.36

Second Quartile –0.29 –0.40 –0.27

Third Quartile –0.21 –0.22 –0.22

Fourth Quartile –0.09 0.09 –0.24

Sources: Federal Reserve Economic Database and FDIC.

Note: Change measured in percentage points. Maturity is determined by the proportion of assets with a remaining maturity or next repricing frequency of three years or more 

(“long-term assets”) to total assets. Maturity buckets are calculated based on industry quartiles in the quarter before each cycle. Each bank is placed into a maturity bucket 

based on the proportion of long-term assets as of the quarter prior to each cycle. Each bank’s bucket is held constant throughout the cycle. For the first and last quarter of each 

cycle, the median NIM of each bucket is found and the change is calculated. Reports of Condition and Income (Call Report) filers began reporting asset maturity breakdowns in 

1997. Thrifts are excluded from this analysis because they did not begin reporting maturity and repricing data until their adoption of the Call Report in first quarter 2011.

Table 4

10 Maturity buckets are calculated based on industry quartiles in the quarter before each cycle. Each bank is placed into 

a maturity bucket based on its proportion of long-term assets as of the quarter before each cycle. Each bank’s bucket is 

held constant throughout the cycle. For the first and last quarter of each cycle, the median NIM of banks in each bucket 

is found and the change between those two NIMs is calculated. Therefore, “banks” in this portion of the analysis are 

defined by the bank with the median NIM within a quartile of long-term assets to total assets. Reports of Condition and 

Income (Call Reports) first included asset maturity breakdowns in 1997. Thrifts are excluded from this analysis, as they 

did not begin reporting maturity and repricing data until their adoption of the Call Report in first quarter 2011.
THE HISTORIC RELATIONSHIP BETWEEN BANK NET INTEREST MARGINS AND SHORT-TERM INTEREST RATES

FDIC QUARTERLY 39

Community and 

Noncommunity Banks 

Have Increased Their Share 

of Long-Term Assets Since 

the Great Recession

 While community and noncommunity banks use different business models and strategies that influence how NIM will change when interest rates change, one trend apparent 

for both types of banks in recent years is an increase in the share of long-term assets to 

total assets. Community banks traditionally hold a higher share of long-term assets to 

total assets, but both community banks and noncommunity banks have increased their 

shares in the aftermath of the Great Recession (Chart 3). As of first quarter 2021, community 

banks reported that 49 percent of their total assets repriced in three or more years, while 

noncommunity banks reported that 43 percent of their total assets repriced in three or 

more years.

The Ratio of Long-Term Assets to Total Assets Has Increased Since 2008

Source: FDIC.

Note: Data through first quarter 2021. Median by group. Thris are excluded from the data.

Long-Term Assets to Total Assets

Percent Community Banks

Noncommunity Banks

0

5

10

15

20

25

30

35

40

45

50

2001 2006 2011 2016 2021

Chart 3

The effect long-term asset holdings has on NIM becomes clearer when examining banks 

grouped into quartiles based on their share of long-term assets to total assets. Both 

community and noncommunity banks in the fourth quartile of long-term assets to total 

assets reported the least NIM expansion during each upward rate cycle (Table 5). During 

downward rate cycles, the results were slightly mixed: community banks in the fourth 

quartile consistently reported the least NIM contraction, while noncommunity banks in 

either the third or fourth quartile reported the least NIM contraction.

The Effect of Heightened 

Long-Term Assets to Total 

Assets Shares Can Be Seen 

in Recent Rate Cycles

 During the low-for-long interest rate environment of 2008 to 2015, many banks pursued 

a strategy of investing in longer-maturity assets in an attempt to bolster their yield on 

earning assets. This drove the share of long-term assets to total assets at community and 

noncommunity banks to the highest levels in available data. While this strategy helped 

bolster NIM at these banks when rates were low, it hurt them during the upward rate cycle 

that followed. As seen in Table 5, the relative interest-rate insensitivity of their assets was 

met with increasing costs of funding, and community banks and noncommunity banks 

with the highest share of long-term assets to total assets reported the least NIM expansion 

(3 basis points) as a result.

During the downward rate cycle of second quarter 2019 to second quarter 2020, however, 

banks with the highest share of long-term assets reported slightly less NIM compression than other banks, though the relationship was not as strong. Community banks in 

the highest quartile of long-term assets to total assets reported a decline in NIM that was 

12 basis points less than in community banks in the lowest quartile of long-term assets, 

and a decline similar to that of community banks in the middle two quartiles. Noncommunity banks in the highest quartile of long-term assets to total assets reported a decline 

in NIM that was 27 basis points less than in noncommunity banks in the lowest quartile of 

long-term assets.
2021   •   Volume 15  • Number 2

40 FDIC QUARTERLY

Change in Median Community and Noncommunity Bank Net Interest Margin Over Upward and Downward Rate Cycles 

by Share of Long-Term Assets

Upward Rate Cycles (Percentage Points)

1Q 1999 to 

3Q 2000

1Q 2004 to 

3Q 2006

4Q 2015 to 

1Q 2019

Change in Effective Federal Funds Rate 1.79 4.24 2.04

Change in Median NIM by Share of Long-Term Assets

Noncommunity Banks

First Quartile 0.38 0.55 0.46

Second Quartile 0.23 0.20 0.13

Third Quartile 0.04 0.04 0.15

Fourth Quartile –0.11 –0.17 0.07

Community Banks

First Quartile 0.36 0.50 0.19

Second Quartile 0.18 0.23 0.12

Third Quartile 0.12 0.05 0.08

Fourth Quartile 0.05 –0.17 0.03

Downward Rate Cycles (Percentage Points)

3Q 2000 to 

4Q 2003

2Q 2007 to 

1Q 2009

2Q 2019 to 

2Q 2020

Change in Effective Federal Funds Rate –5.52 –5.07 –0.21

Change in Median NIM by Share of Long-Term Assets

Noncommunity Banks

First Quartile –1.16 –1.18 –0.55

Second Quartile –0.38 –0.45 –0.39

Third Quartile –0.19 –0.44 –0.12

Fourth Quartile –0.23 0.20 –0.28

Community Banks

First Quartile –0.54 –0.78 –0.35

Second Quartile –0.29 –0.39 –0.24

Third Quartile –0.21 –0.19 –0.24

Fourth Quartile –0.08 0.08 –0.23

Sources: Federal Reserve Economic Database and FDIC.

Note: Change measured in percentage points. Maturity is determined by the proportion of assets with a remaining maturity or next repricing frequency of three years or more 

(“long-term assets”) to total assets. Maturity buckets are calculated based on industry quartiles in the quarter before each cycle. Each bank is placed into a maturity bucket 

based on the proportion of long-term assets as of the quarter prior to each cycle. Each bank’s bucket is held constant throughout the cycle. For the first and last quarter of each 

cycle, the median NIM of each bucket is found and the change is calculated. Report of Condition and Income (Call Report) filers began reporting asset maturity breakdowns in 

1997. Thrifts are excluded from this analysis because they did not begin reporting maturity and repricing data until their adoption of the Call Report in first quarter 2011. 

Table 5
THE HISTORIC RELATIONSHIP BETWEEN BANK NET INTEREST MARGINS AND SHORT-TERM INTEREST RATES

FDIC QUARTERLY 41

Since the End of the Most 

Recent Downward Rate 

Cycle, Industry NIM Has 

Fallen to a Record Low

 The Federal Reserve lowered the target federal funds rate three times in the second half 

of 2019 and two more times in March 2020, bringing the lower bound of the target rate to 

zero. While the effective rate ended its downward cycle in second quarter 2020, which is 

the end of the downward rate cycle in this analysis, this low interest rate and other impacts 

of the COVID-19 pandemic have had a severe adverse impact on NIMs in the months since. 

Fiscal and monetary stimulus to combat the economic impact of the pandemic resulted in 

bank balance sheets flooded with deposits. The banking industry reported annual deposit 

growth of $3.3 trillion (22.6 percent) in 2020. However, with weak loan demand and tightening credit standards, banks placed much of that liquidity into low-yielding cash and 

balances due from depository institutions (up 91.2 percent year over year) instead of into 

higher-yielding loans, whose 3.3 percent growth was driven in large part by low-yielding 

Paycheck Protection Program loans.11 The combined effect of balance sheet composition 

changes and lower prevailing market rates resulted in third quarter 2020 in the largest 

year-over-year basis point decline in NIM and the lowest level of industry NIM on record, 

where it remained in first quarter 2021.

Summary The directional response of NIM to changes in prevailing interest rates is theoretically 

ambiguous. Analyzing the changes in median NIM for the industry, community banks, and 

noncommunity banks over upward and downward rate cycles since the early 1980s clarifies 

the potential effects of short-term interest rate changes on NIM. In line with conventional 

wisdom, at the median, NIM has tended to increase when short-term interest rates increase 

and decline when short-term interest rates decline.

While many factors influence NIM, one that is particularly important is the maturity structure of bank assets. Those banks with a relatively high proportion of long-term assets to 

total assets report greater insulation from changes in short-term interest rates. This means 

that their NIM falls less during downward rate cycles but rises less during upward rate 

cycles. This positive relationship between short-term interest rates and NIM and the effect 

of maturity structure on this relationship generally hold true over time for both community 

and noncommunity banks.

Authors:

Angela Hinton

Senior Financial Analyst

Division of Insurance and Research

Chester Polson

Senior Financial Economist

Division of Insurance and Research

11 Federal Reserve Senior Loan Officer Opinion Survey on Bank Lending Practices, October 2020, https://www.

federalreserve.gov/data/sloos/sloos-202010.htm. For more information on the Paycheck Protection Program see: 

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program#:~:text=

The%20Paycheck%20Protection%20Program%20is,an%20interest%20rate%20of%201%25.

FDIC QUARTERLY 43

RESIDENTIAL LENDING DURING THE PANDEMIC

Overview In 2020, a global health crisis caused a deep recession in the United States. Despite the 

economic downturn, housing market fundamentals have remained resilient and banks 

were well positioned to support growth in the mortgage market. The housing market benefited from historically low interest rates and fiscal support to businesses and consumers, 

which helped borrowers stay current on their mortgages and supported new home sales. 

Mortgage lenders continued to extend mortgages even as they tightened underwriting 

standards to protect against increased default risk from adverse economic and financial conditions during the pandemic. Mortgage credit quality deteriorated but has since 

improved. The outlook for mortgage credit and the housing market depends on the outlook 

for interest rates and economic conditions. Higher interest rates may slow the mortgage 

market and demand for mortgage loans. Programs that have aided homeowners, such as 

forbearance and government stimulus, are scheduled to expire in 2021, increasing the 

risk for deterioration in credit quality of mortgages, higher mortgage delinquencies, and 

reduced credit availability.1

FDIC-insured institutions (banks) held $2.5 trillion in residential mortgage loans as of first 

quarter 2021, of which $2.1 trillion were first-lien mortgages. Banks held an additional 

$3.3 trillion in mortgage-backed securities. Banks also serviced $2.9 trillion of mortgage 

loans originated by other institutions. These volumes, while less than during the financial 

crisis of 2008 and 2009, suggest that banks continue to have meaningful exposure to the 

housing market. This article discusses residential lending and underwriting trends in the 

mortgage market, in light of the changed environment presented by the pandemic, and 

bank residential lending activity during this time.

Economic Backdrop The housing market remained resilient during the pandemic as many other sectors of 

the economy were distressed.

The housing credit cycle was in a long benign and mature stage in 2019 before transitioning to a stressed one in 2020 as economic conditions deteriorated. Despite weak economic 

fundamentals in 2020, housing credit was helped by a strong recovery in the housing 

market. Home sales strengthened in 2020 and were above their pre-pandemic levels as 

of first quarter 2021, even as the labor market and other areas of the economy had slower 

recoveries (Chart 1). Home prices resumed their upward trend after a short pause in the 

spring of 2020, when pandemic restrictions began, due to low interest rates and the low 

inventory of homes for sale (Chart 2). Stay-at-home restrictions and remote work opportunities intensified homebuyers’ interest in larger or different living space and drove demand 

for home purchases. In December 2020, home prices were 11.5 percent higher than the year 

before, a year-over-year increase that outpaced the robust gains recorded during the 2000s 

housing boom. While the recent housing market resembles the housing boom from 2004 to 

2005 with low interest rates, the growth in home prices during the previous boom was also 

driven by loose credit and widespread speculation. Such factors did not fuel the 2020 home 

price gains, as discussed in the next section.

1 Board of Governors of the Federal Reserve System Federal Open Market Committee, “Summary of Economic 

Projections,” March 17, 2021, https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20210317.htm.
2021   •   Volume 15  • Number 2

44 FDIC QUARTERLY

Residential Construction and Home Sales Recovered Quickly From 

Initial Pandemic Shocks

Sources: Bureau of Labor Statistics, National Association of Realtors, and Census Bureau (Haver Analytics).

Note: Data are indexed to a level of 100 at February 2020. Data as of March 2021.

Indexed Level

0

20

40

60

80

100

120

140

Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21

Total Nonfarm Employment

Total Existing Home Sales

Housing Starts

Chart 1

Home Price Appreciation Accelerated in 2020 in Contrast to Previous Recessions

Source: S&P CoreLogic Case-Shiller (Haver Analytics).

Note: The home price index is indexed to a level of 100 at January 2000. Data as of February 2021. Shaded areas indicate recessions.

Home Price Index

Year-over-year percent change

-15

-10

-5

0

5

10

15

1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020

Chart 2

In contrast to the housing market’s resilience, the rest of the economy was in distress 

throughout the year, as the economy contracted 3.5 percent in 2020 with a steep decline 

during the first half of the year and the unemployment rate reached a post-World War II 

high of 14.8 percent. These factors introduced credit risk to banks for the mortgages they 

held. Still, amid this backdrop, banking conditions remained sound.

Underwriting Trends Underwriting standards tightened in 2020 in response to weaker economic fundamentals.

Despite the relative strength in the housing market, the economic deterioration and uncertain outlook in 2020 led mortgage lenders to tighten standards to ensure a borrower’s ability to repay. Lenders implemented stricter employment verification and asset and income 

documentation and reduced the age of required documents before closing, sometimes 

requiring employment confirmation on the day of closing.2 Nevertheless, mortgage lending 

was robust throughout 2020 on strong demand for new homes and refinancing existing 

2 Federal Home Loan Mortgage Corporation, “Selling Guidance Related to COVID-19,” Bulletin 2020-8, March 31, 

2020, https://guide.freddiemac.com/app/guide/bulletin/2020-8; Inside Mortgage Finance, “Underwriting 

Tightened in View of Market Uncertainty,” April 3, 2020; and HousingWire, “Mortgage Lenders Are 

Tightening Standards as Coronavirus Crisis Worsens,” April 3, 2020, https://www.housingwire.com/articles/

mortgage-lenders-are-tightening-standards-as-coronavirus-crisis-worsens/. 
FDIC QUARTERLY 45

RESIDENTIAL LENDING DURING THE PANDEMIC

mortgages to lower interest rates. The volume of new first-lien mortgage originations, 

primarily refinancings, reached a record high in nominal terms of $4.04 trillion in 2020.3

Of this amount, banks originated $869 billion loans or 21.5 percent. While the level of mortgage originations in 2020 outpaced the previous record of $3.73 trillion in 2003, also during 

a refinance boom, it was below previous peaks when measured per household and adjusted 

for inflation. The composition of the mortgage market has changed in the intervening 

years. In 2005–2006, private label securitizations comprised about a 40 percent share of 

origination volume, while securitizations by the government sponsored enterprises (the 

GSEs, with specific underwriting criteria) and the Federal Housing Administration and 

Veterans Administration (FHA/VA, or the agencies) had an estimated 33 percent share, and 

the share of bank portfolio loans was about 25 percent. By 2020, GSE and agency securitizations had a dominant 77.6 percent share of the mortgage originations market, the bank 

portfolio share had declined to 21.5 percent, and private label securitizations had all but 

disappeared to a 0.9 percent share.4

As the industry tightened standards, banks also focused on more prudent residential lending by tightening underwriting standards in response to uncertainty about the economy. 

The Federal Reserve Senior Loan Officer Opinion Survey on Bank Lending Practices 

reported sharply tighter credit standards on new mortgage originations after the onset 

of the pandemic (Chart 3).5 By second quarter 2020, a net share of 61 percent of surveyed 

banks reported tightened standards on residential loans, up sharply from 9.2 percent that 

reported tightened standards in first quarter 2020. Banks left standards largely unchanged 

in fourth quarter, as a net share of just 0.3 percent of banks tightened standards for residential real estate loans. By first quarter 2021, according to the survey, banks reported they 

had started to ease lending standards. 

The initial spike in bank reports of tighter standards reflected the pandemic’s immediate 

impact on the economy and employment. Banks halted tightening as support programs 

were quickly implemented. In contrast, during the financial crisis, banks tightened underwriting standards for the new mortgage loans they made, but did so seemingly in steps over 

a period of several years as the crisis worsened. While banks tightened standards on mortgages they held, they continued to extend conforming mortgage loans that were sold to the 

GSEs, adhering to underwriting standards set by the GSEs.

Bank Underwriting Standards Tightened A
er the Initial Pandemic Shock

Source: Federal Reserve Board (Haver Mortgage Series/Haver Analytics).

Note: Above zero indicates more banks tightened; below zero indicates more banks eased. Data as of April 2021

Net Share of Banks Tightening Credit Standards on Residential Mortgage Loans

Percent

-20

0

20

40

60

80

100

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Chart 3

3 Urban Institute, “Housing Finance at a Glance: A Monthly Chartbook,” April 2021:8.

4 Ibid. 

5 Board of Governors of the Federal Reserve System, “Senior Loan Officer Opinion Survey on Bank Lending Practices,” 

January 2021, https://www.federalreserve.gov/data/sloos/sloos-202101.htm.
2021   •   Volume 15  • Number 2

46 FDIC QUARTERLY

Mortgage lending for both banks and nonbanks was concentrated among borrowers with 

excellent credit. Of all home mortgages originated in first quarter 2021, 73 percent went 

to borrowers with a credit score above 760 (Chart 4).6 This share was even higher than the 

71.9 percent pandemic peak reached in third quarter 2020 and was a record high for the 

period since 2003. Borrowers with credit scores under 620 accounted for just 1.4 percent of 

originations in first quarter 2021, a record low and well under the 15.2 percent reported in 

first quarter 2007, just before the financial crisis.

Loan Originations Are Increasing to Borrowers With Stellar Credit

Source: Federal Reserve Board of New York Quarterly Report on Household Debt and Credit (Haver Analytics). 

Note: Data as of first quarter 2021.

Mortgage Originations by Credit Score

Percent share

0

20

40

60

80

100

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021

< 620 620-659 660-719 720-759 760+

Chart 4

Banks historically maintain stricter mortgage credit standards than do nonbanks. After the 

financial crisis and through the start of the pandemic, median FICO scores for bank originators remained in the 740 to 755 range and median FICO scores for nonbank originators 

remained in the 710 to 730 range. In spring 2020, median credit scores for both bank and 

nonbank originators began to increase and the difference began to narrow. By April 2021, 

the bank originator median FICO score was 772 and the nonbank originator median FICO 

score followed closely at 758. Some of the increase in FICO scores is attributed to increased 

refinance activity, which is skewed toward higher FICO scores, according to the Urban 

Institute (UI).7

Mortgage Credit 

Availability

The supply of mortgage credit has tightened, while large banks’ mortgage lending 

presence has declined.

As lenders tightened documentation standards and were less likely to originate new mortgages, overall mortgage credit supply tightened beginning in March 2020. Mortgage credit 

availability declined sharply during the early months of the pandemic, according to the 

Mortgage Bankers Association Mortgage Credit Availability Index (MCAI), a summary 

measure that combines several factors related to borrower eligibility and underwriting 

criteria. The index level was near 180 during most of 2019 and early 2020.8 By September, the 

index was 118.6, the lowest level since April 2014. Mortgage credit availability has edged up 

since then, but remained low in March 2021 at 125.4, 18 percent lower than one year earlier.

The UI’s Housing Credit Availability Index (HCAI) showed a similar reduction in credit 

availability as the pandemic triggered a tightening of credit. The HCAI, which measures the 

probability of default of first-lien owner-occupied home purchases as a reflection of lender 

approaches to issuing credit, declined from 5.3 percent in first quarter 2020 to just under 

6 Federal Reserve Bank of New York, “Quarterly Report on Household Debt and Credit (Q1 2021),” 

https://www.newyorkfed.org/microeconomics/hhdc.html.

7 Urban Institute, April 2021.

8 The MCAI is indexed to a level of 100 at first quarter 2012. 
FDIC QUARTERLY 47

RESIDENTIAL LENDING DURING THE PANDEMIC

5.0 percent in third quarter 2020, the lowest figure since the inception of the index in first 

quarter 1999.9 In fourth quarter, the index edged up to 5.1 percent. A lower HCAI signals 

lenders’ greater intolerance for default risk, which manifests as tighter lending standards 

and greater difficulty for borrowers to get a loan. Even if the current index level were to 

double, it would still fall well below the pre-financial crisis standard of 12.5 percent from 

2001 to 2003, when there was greater borrower and product risk.10

At the same time that the MCAI and HCAI indexes indicate tighter mortgage credit availability overall, the pace of residential lending by banks slowed appreciably during the 

pandemic. The volume of 1–4 family residential lending in the banking industry was up 

only slightly between fourth quarter 2019 and fourth quarter 2020 and was down between 

third quarter 2020 and fourth quarter 2020. It was down for fourth quarter 2020 and the 

year among community banks. More broadly, there is some evidence of a reduction in residential mortgage lending activity since the 2008–2009 crisis among a subset of community banks with relatively smaller residential mortgage programs, and more evidence of a 

reduction by larger noncommunity banks.11 Among large lenders, nonbanks now originate 

a majority of residential loans, accounting for 68.1 percent of mortgage originations by the 

top 100 lenders in 2020, up from 58.9 percent in 2019.12

Mortgage Credit 

Performance

Mortgage credit performance has recovered somewhat from sharp declines at the 

start of the pandemic, but high rates of delinquent loans point to lingering financial 

distress for many borrowers.

The rapid onset of the pandemic and the immediate toll on employment and the economy 

caused national mortgage delinquency rates to rise sharply in 2020 (Chart 5). Prior to 2020, 

delinquency rates had steadily declined since the financial crisis to 3.77 percent in fourth 

quarter 2019, just before the pandemic, according to the Mortgage Bankers Association 

National Delinquency Survey. The survey covers loans representing about 88 percent of all 

first-lien residential mortgage loans outstanding nationwide, including mortgages held 

by both banks and the GSEs. The fourth quarter 2019 rate was the lowest level of national 

delinquency in the survey’s almost 50 years of reporting and was also well below the 

4.41 percent delinquency rate in first quarter 2006, near the peak of the pre-crisis housing boom. Mortgage delinquencies rose in early 2020, reflecting pandemic-related financial distress faced by borrowers. The total past-due rate reached its highest level since 

2011. Soon thereafter, however, mortgage delinquency rates started to decline almost as 

quickly, as federal support in the form of stimulus payments, enhanced unemployment 

compensation benefits, and forbearance and moratorium measures provided temporary 

relief. The national delinquency rate for all mortgage loans decreased from its recent peak 

of 8.22 percent in second quarter 2020 to 6.38 percent in first quarter 2021. A decrease in 

30-day and 60-day delinquencies drove the decline. The 90+ day delinquency rate receded 

slightly in fourth quarter but then increased again in first quarter 2021, reflecting the more 

entrenched distress of those with longer-term delinquencies.

The swift improvement in delinquency rates contrasts with the experience during the 

financial crisis. The slow rollout of assistance to borrowers left many distressed homeowners vulnerable to foreclosures, which were severe and exacerbated the housing market 

distress during that crisis. The total past-due rate breached 5 percent in second quarter 

2007 after hovering for decades in the 4 percent to 5 percent range. The delinquency rate 

doubled by 2010 and did not fall below 5 percent until five years later.

9 Urban Institute, Housing Credit Availability Index, Q4 2020, May 7, 2021, https://www.urban.org/policy-centers/

housing-finance-policy-center/projects/housing-credit-availability-index.

10 Ibid.

11 Kayla Shoemaker, “Trends in Mortgage Origination and Servicing: Nonbanks in the Post-Crisis Period,” FDIC Quarterly

13 no. 4 (2019), https://www.fdic.gov/bank/analytical/quarterly/2019-vol13-4/fdic-v13n4-3q2019-article3.pdf; Kathryn 

Fritzdixon, “Bank and Nonbank Lending Over the Past 70 Years,” FDIC Quarterly 13 no. 4 (2019), https://www.fdic.gov/

bank/analytical/quarterly/2019-vol13-4/fdic-v13n4-3q2019-article1.pdf; and FDIC Community Banking Study (2020), 

Chapter 5, https://www.fdic.gov/resources/community-banking/report/2020/2020-cbi-study-full.pdf.

12 John Bancroft, “Nonbanks Hit New Mortgage Lending Milestone in 4Q20,” Inside Mortgage Finance, March 11, 2021.
2021   •   Volume 15  • Number 2

48 FDIC QUARTERLY

Delinquencies Spiked During the Pandemic

Source: Mortgage Bankers Association (Haver Analytics). 

Note: FHA/VA is Federal Housing Administration and Veterans Administration. Data as of first quarter 2021.

Residential Mortgage Loans 

Percent delinquent or in forbearance

0

2

4

6

8

10

12

14

16

18

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

30-59 Days Past Due

60-89 Days Past Due

90+ Days Past Due

Total Past Due

In Forbearance

FHA/VA Seriously Delinquent

Chart 5

While most mortgage delinquency rates began to decline during 2020, seriously delinquent FHA and VA loans were at record highs in fourth quarter 2020, almost 12 percentage 

points higher than a year earlier, before the pandemic.13 Although the rate edged down in 

first quarter 2021, the near record-high delinquency rate indicates the continuing distress 

of these borrowers, who are disproportionately either first-time buyers or borrowers 

with lower credit scores and lower down payments and who may already be financially 

stretched.14 Ginnie Mae securitizes over 90 percent of FHA and VA loan originations. 

Although banks comprise only about 6 percent of Ginnie Mae originations, delinquent 

Ginnie Mae securitized loans have an impact on bank credit measures, as discussed below 

in the section on bank credit conditions.15

Many homeowners who were facing financial strain have been able to avoid delinquency 

by requesting mortgage forbearance, while others entered forbearance in anticipation of 

potential financial strain but continued to make payments. Under the Coronavirus Aid, 

Relief, and Economic Security (CARES) Act, mortgage servicers or lenders must provide a 

forbearance plan to any homeowner with a federally backed mortgage that requests one. 

Borrowers with loans not backed by the federal government (i.e., non-agency mortgages) 

are not included under the CARES Act. Forbearance programs may be available on these 

loans but are not required, although financial regulators have encouraged financial institutions to work with borrowers.

Of the borrowers who exited forbearance from June 1, 2020, through March 14, 2021, 

27.1 percent had continued to make their monthly payments during their forbearance 

period. However, a large share of borrowers is exiting forbearance and remaining delinquent, without becoming current on missed payments or without having a loss mitigation 

plan in place. In March 2021, these borrowers represented almost 23 percent of borrowers in 

forbearance, more than double the percentage in the financial crisis.16

Banks not only have exposure to the housing market through direct mortgage lending, but 

also face exposure through the mortgages they service. The credit performance trends in 

the overall mortgage industry suggest that bank mortgage servicers may be vulnerable to 

missed payments in the future by borrowers of federally backed mortgages who, after exiting forbearance for federally backed mortgages, are unable to make timely payments on 

13 Seriously delinquent loans include those that are 90 days or more past due and those that are in foreclosure.

14 Shoemaker, 2019: 51-69.

15 Urban Institute, April 2021. 

16 Mortgage Bankers Association, “Share of Monthly Forbearance Exits by Reason,” presentation at National Association 

of Business Economists Policy Conference, March 23, 2021. 
FDIC QUARTERLY 49

RESIDENTIAL LENDING DURING THE PANDEMIC

their loans. In addition, banks may be vulnerable to borrowers of bank mortgage loans who 

remain financially squeezed after support from enhanced employment benefits or stimulus 

checks end. Both scenarios raise the possibility of future stress on bank portfolios.

Bank Credit 

Performance

Asset quality of bank loans began deteriorating in mid-2020. While conditions improved 

by year-end 2020, the outlook is uncertain.

As total mortgage delinquencies increased, bank residential portfolios deteriorated. In 2020, 

banks increased allowances for loan and lease losses to help absorb estimated credit losses. 

Residential mortgage allowances for mortgage credit losses increased from $9.8 billion in 

fourth quarter 2019 to $18.9 billion in second quarter 2020. Noncurrent balances in the residential loan portfolio increased $10 billion (22 percent) from second quarter to third quarter 

2020.17 Although this was by far the largest quarterly increase since the financial crisis, the 

volume gain was well below the crisis-high $27 billion quarterly increase in fourth quarter 

2009. The noncurrent loan balance reached a pandemic peak of $55.7 billion in third quarter 2020, and then declined to $55.2 billion in fourth quarter 2020 and $53.6 billion in first 

quarter 2021. The noncurrent loan balance is higher than in recent years, but noncurrent 

loan balances after the financial crisis were more than three times larger.

Noncurrent loan rates exhibit a similar pattern. After declining for eight years, the 

1–4 family mortgage noncurrent loan rate increased from 1.77 percent in fourth quarter 

2019 to 2.54 percent in fourth quarter 2020. While it remained high at 2.50 percent in first 

quarter 2021, it was well below the financial crisis high of 10.81 percent reported in first 

quarter 2010. Mortgage delinquency rates for the market overall followed a similar pattern 

(Chart 5). Banks reported lower mortgage delinquency rates than the overall mortgage 

market because bank delinquencies do not count loans in forbearance.

The large increase in bank noncurrent loan balances during 2020 was due not only to deterioration in credit quality, but also to increased rebooking of Ginnie Mae loans primarily 

among the industry’s largest banks, those with at least $100 billion in total assets (Chart 6). 

When a Ginnie Mae loan becomes delinquent for 90 days or is in forbearance, the loan is 

typically brought back on a bank’s books. While Ginnie Mae loans are guaranteed by the U.S. 

government, banks remain responsible for maintaining timely payments to investors in 

servicing these loans.

The rebooking of loans is not new, and the share of rebooked loans among bank total 

noncurrent 1–4 family mortgage loans reached more than 50 percent in the aftermath of 

the financial crisis. However, Ginnie Mae rebookings had been on a downward trend for 

seven years before the pandemic and reached a low of 45 percent of bank total noncurrent 1–4 family mortgage loans in first quarter 2020. By second quarter 2020, rebooked 

Ginnie Mae loans had climbed to 47 percent of noncurrent 1–4 family mortgage loans. By 

first quarter 2021, some borrowers exited forbearance or resumed loan payments, and as 

a result, the volume of rebooked noncurrent Ginnie Mae loans declined to 40 percent of 

noncurrent 1–4 family mortgage loans.

Rebooked Ginnie Mae loans made up the bulk of residential mortgage noncurrent 

volume during 2020. Excluding rebooked Ginnie Mae loans, the noncurrent rate for bank 

1–4 family mortgage loans increased during 2020, from 0.9 percent in fourth quarter 2019 

to 1.5 percent in fourth quarter 2020 and remained at 1.5 percent in first quarter 2021. These 

figures are well below the first quarter banking industry noncurrent rate of 2.50 percent 

that includes rebooked Ginnie Mae loans, but does not include mortgage loans in forbearance. The inherent forbearance risk and the elevated serious delinquency rate of Ginnie 

Mae loans introduce credit quality concerns as the pandemic-induced financial stress for 

borrowers persists.

17 Noncurrent balance is the sum of 1–4 family residential loans secured by 1–4 family residential properties that are 

90 days or more past due and 1–4 family residential loans secured by 1–4 family residential properties that are in 

nonaccrual status. Noncurrent is a narrower category than delinquency and can refer to loans whose installments are 

past due by 30 to 90 days or more. Total delinquency refers to all loans that are 30+ days past due. 
2021   •   Volume 15  • Number 2

50 FDIC QUARTERLY

Rebooked Loans Drove the Recent Increase in Bank Noncurrent Loan Balances

Source: FDIC.

Note: GNMA is Government National Mortgage Association, also known as Ginnie Mae. “Rebooked: Excluding GNMA Loans” are loans other than

GNMA that also have a government guaranty. Data as of first quarter 2021. 

Components of Residential Noncurrent Loan Balance

$ Billions

0

20

40

60

80

100

120

140

160

180

200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Noncurrent Other Loans

Rebooked: GNMA Loans

Rebooked: Excluding GNMA Loans

Chart 6

The decline of most delinquency rates from the peak in second quarter 2020 reflects 

temporary relief provided by pandemic-support measures. Banks’ noncurrent rate for 

1–4 family loans remained high, however, driven by the large share of loans that are 

90 days or more past due that reflect missed payments earlier in the pandemic. Unprecedented support during the pandemic-induced economic crisis from stimulus and protective measures helped many homeowners and borrowers to avoid delinquency or loss of 

their homes. Federal support in the form of forbearance helped homeowners of federally 

backed mortgages, held by GSEs, while other forms of support to consumers such as unemployment insurance and stimulus checks helped borrowers of mortgages held by banks. 

Several federal programs that helped struggling consumers were extended or expanded as 

the recession progressed in 2020. Most recently, the Federal Housing Finance Agency halted 

foreclosures and evictions through June 30, 2021, and extended forbearance and payment 

deferrals for up to 18 months.18 In March, Congress passed the American Rescue Plan Act of 

2021 to provide an additional $1.9 trillion of fiscal stimulus, including direct payments to 

households, extended unemployment benefits, and more funding for businesses and for the 

U.S. Small Business Administration Paycheck Protection Program (PPP).

Despite improvements and extensions of support, credit quality concerns remain. Eventually, the fiscal support that has been available to borrowers will end. As many borrowers 

continue to face challenges from lingering economic weakness, their diminished income 

and weakened financial situations may put debt repayments at risk.

Bank Residential 

Mortgage Lending

While the outlook is uncertain, banks continue to make residential loans.

Despite the stresses associated with the pandemic, the banking system continued to extend 

credit. Unlike in 2008, when a financial crisis resulted in an economic crisis and the banking 

system entered a long period of balance sheet repair, the banking system was much stronger in 2020 and better able to withstand economic distress. Banks have been in a position to 

help support the economy by extending credit and by working with distressed borrowers.

Community banks in particular have maintained strength in residential lending. Community banks have declined in number over the years, from over 8,000 before 2005 to 4,531 

in first quarter 2021, but they have maintained a consistent and supportive presence in 

residential lending. Residential real estate loans held by community banks have averaged 

26 percent of total loans and leases for more than a decade (Chart 7). This contrasts with 

18 Federal Housing Finance Agency, “FHFA Extends COVID-19 Forbearance Period and Foreclosure and REO Eviction 

Moratoriums,” news release, February 25, 2021, https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-ExtendsCOVID-19-Forbearance-Period-and-Foreclosure-and-REO-Eviction-Moratoriums.aspx.
FDIC QUARTERLY 51

RESIDENTIAL LENDING DURING THE PANDEMIC

noncommunity banks, whose residential loans as a share of their total loans and leases has 

declined by about a third from 30.8 percent in 2005 to 19.7 percent in first quarter 2021.

Further, a higher percentage of community banks specialize in 1–4 family residential mortgage lending than noncommunity banks.19 In first quarter 2021, 14.1 percent of 

community banks specialized in residential mortgage lending, well above the 8.1 percent 

share of residential mortgage specialists among noncommunity banks.20 The spread 

between the percentage of community banks and noncommunity banks that are residential 

mortgage lending specialists has widened since the financial crisis. As indicated in Chart 

7, the percentage of noncommunity bank mortgage specialists has declined steadily, while 

community bank mortgage specialists comprised a steady 20 percent share of community 

banks for most of the period since 2003.

Community Banks Maintain a More Consistent and Larger Presence in

Residential Lending

Source: FDIC.

Note: Data as of first quarter 2021.

Residential Loans 

Percent of total loans and leases

Residential Mortgage Specialists

Percent of banks

35

0

5

10

15

20

25

30

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021

0

5

10

15

20

25

30

35

Noncommunity Banks (Le Axis)

Community Banks (Le Axis)

Community Bank Residential Mortgage Specialists (Right Axis)

Noncommunity Bank Residential Mortgage Specialists (Right Axis)

Chart 7

Conclusion The housing market has rebounded from deep and immediate declines at the start of the 

pandemic and has weathered the pandemic-driven economic distress so far. The combined 

effects of policy actions, fiscal stimulus, and foreclosure and eviction moratoria eased 

the financial stress of households and borrowers. Despite these support measures, uncertainty about the economy led to tightening of mortgage credit and underwriting standards, 

as lenders sought to reduce credit risk from new mortgages. Although national mortgage delinquency rate increases have subsided somewhat and banks have built loan loss 

reserves, mortgage credit quality concerns remain, reflecting the still-high unemployment 

and the near record-high levels of seriously delinquent FHA and VA loans, particularly 

among borrowers in vulnerable industries or who are already financially pressed. Overall, 

banks have been resilient through the recent period of economic distress and have been 

able to support the mortgage market. However, the housing market outlook, while improving, continues to be sensitive to economic developments and remains uncertain.

Author:

Cynthia Angell

Senior Financial Economist

Division of Insurance and Research

19 The 2020 FDIC Community Banking Study defines a residential mortgage specialist as a bank that holds residential 

mortgage loans greater than 30 percent of total assets. See https://www.fdic.gov/resources/community-banking/

report/2020/2020-cbi-study-full.pdf.

20 In 2020, community bank lending in the Paycheck Protection Program outpaced new 1–4 family loan growth. As a 

result, the share of banks that meet the threshold to be considered a residential mortgage lending specialist declined.