FDIC Quarterly 

Quarterly Banking Profile: 

First Quarter 2014 

Community Banks Remain Resilient 

Amid Industry Consolidation 

Long-Term Trends in Rural 

Depopulation and Their 

Implications for Community Banks 

2014, Volume 8, Number 2 
Chairman Martin J. Gruenberg

Director, Division of Insurance Diane Ellis

and Research

Executive Editors Richard A. Brown

Maureen E. Sweeney

Managing Editors Matthew Green

Jack Reidhill

Philip A. Shively

Editors Peggi Gill

Frank Solomon

Publication Manager Lynne Montgomery

Media Inquiries (202) 898-6993

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. 
2014, Volume 8, Number 2

FDIC Quarterly

Quarterly Banking Profile: First Quarter 2014 

FDIC-insured institutions reported aggregate net income of $37.2 billion in the first quarter of 2014, down 

$3.1 billion (7.6 percent) from earnings of $40.3 billion the industry reported a year earlier. The decline in 

earnings was mainly attributable to a $7.1 billion (10.7 percent) decline in noninterest income. Lower income 

from reduced mortgage activity and a drop in trading revenue contributed to a year-over-year decline in noninterest income. Additionally, noninterest income was higher one year ago due to a one-time gain at one institution. Despite the decline in earnings, more than half of the 6,730 insured institutions reporting (54 percent) 

had year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable during the first 

quarter fell to 7.3 percent from 8.5 percent a year earlier. See page 1. 

Community Bank Performance 

Community banks—which represent 93 percent of insured institutions—reported $4.4 billion in earnings 

with net interest income up five percent over first quarter 2013. While overall earnings declined, the 1.5 

percent decline was less than the 7.6 percent decline for the industry. Lower noninterest income and higher 

noninterest expense reduced earnings for community banks. Community banks hold 45 percent of small 

loans to businesses and saw annual total loan growth of almost 7 percent. See page 14. 

Insurance Fund Indicators 

Estimated insured deposits increased by 1.9 percent in the first quarter of 2014. The DIF reserve ratio was 

0.80 percent at March 31, 2014, up from 0.79 percent at December 31, 2013, and 0.60 percent at March 31, 

2013. Five FDIC-insured institutions failed during the quarter. See page 20. 

Featured Articles: 

Community Banks Remain Resilient Amid Industry 

Consolidation 

There has been a great deal of focus recently on banking industry consolidation and its effects on community 

banks. New analysis based on the FDIC’s functional definition of the community bank shows that these institutions have been highly resilient amid long-term industry consolidation. The rate of attrition among community 

banks over the past decade has been less than half that of noncommunity banks. When community banks have 

been acquired, almost two-thirds of the time the acquirer has been another community bank. After more than 

30 years of consolidation, the evidence strongly suggests that community banks will continue to carry out their 

important financial role for the foreseeable future. See page 33. 

Long-Term Trends in Rural Depopulation and Their 

Implications for Community Banks 

This article discusses rural depopulation, a long-term trend that not only encompasses half of the nation’s rural 

counties, but also intensified in many areas in the 2000s. Technological advances that continue to make farms 

larger are the main driver of the trends, and as such the Great Plains and the Corn Belt are the areas with the 

most counties experiencing population outflows. Community banks in depopulating areas tend to specialize in 

agricultural lending, which is far less common in metropolitan and micropolitan areas. The unusual strength in 

the agricultural sector in the 2000s, even through the U.S. recession, helped community banks in depopulating 

rural areas avoid many of the asset quality and earnings issues that affected banks located elsewhere. The strong 

agricultural sector also enabled these institutions to grow assets and deposits at relatively high rates, when such 

growth had been challenging in these areas before the agricultural boom. See page 44. 

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. 

FDIC QUARTERLY 1 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile First Quarter 2014

INSURED INSTITUTION PERFORMANCE 

■ Net Income of $37.2 Billion Is $3.1 Billion Below Year-Ago Level 

■ Reduced Mortgage Activity Contributes to Decline in Revenue 

■ 54 Percent of Banks Report Year-Over-Year Improvement in Earnings 

■ Balances at Federal Reserve Banks Account for Almost Half of Asset Growth 

Effects of Last Year’s Rate Increase Are Evident in 

First Quarter Results 

The increase in medium- and long-term interest rates 

that occurred in second quarter 2013 continued to affect 

year-over-year earnings comparisons. Lower noninterest 

income, reflecting diminished mortgage revenue, declining trading income, and a one-time gain that inflated 

year-ago results, was the principal cause of the $3.1 

billion (7.6 percent) year-over-year decline in industry 

earnings. This is only the second time in the last 19 

quarters that the industry has reported a year-over-year 

decline in quarterly earnings. Both declines have 

occurred in the last three quarters. Last year’s rise in 

interest rates resulted in a drying-up of demand for mortgage refinancings. Without this demand, mortgage originations have fallen sharply, and mortgage revenue has 

declined by almost one-half. The increase in interest 

rates also resulted in a steeper yield curve that has been 

beneficial for the net interest margins of banks that 

invest in longer-term assets and fund the investments 

with short-term liabilities. For the industry in aggregate, 

the declines in mortgage revenue and realized gains on 

securities caused by higher interest rates outweighed the 

gains in net interest income that stemmed from a 

steeper yield curve. For a majority of banks, however, 

the opposite was true. Even as total industry net income 

fell, more than half of all banks—54 percent—reported 

increased earnings compared with the year-ago period. 

The average return on assets for the quarter was 1.01 

percent, down from 1.12 percent in first quarter 2013. 

Lower Noninterest Income Outweighs Growth in 

Net Interest Income 

Net operating revenue—the sum of net interest income 

and total noninterest income—totaled $163.7 billion 

in the first quarter. This was $6.7 billion (4 percent) 

lower than the first-quarter 2013 total. Net interest 

income was $361 million (0.3 percent) higher than 

the year before, but noninterest income was down by 

$7.1 billion (10.7 percent). More than two-thirds of 

all banks reported year-over-year increases in net interest income, but only seven of the 20 largest banks 

reported increases. The average net interest margin fell 

to 3.17 percent, from 3.27 percent in first quarter 2013, 

although 54 percent of banks reported higher margins 

compared with first quarter 2013. Larger institutions are 

less invested in longer-maturity, higher-yield assets, and 

a sizable share of their recent asset growth has consisted 

of low-yield, high-liquidity balances at Federal Reserve 

banks. They experienced the greatest margin erosion. 

Chart 1 Chart 2 

Quarterly Net Income 

All FDIC-Insured Institutions Billions of Dollars 

$50 

40.3 39.8 $40 38.2 37.5 37.2 35.2 34.8 36.0 34.4 34.4 

28.7 28.5 25.3 $30 23.8 20.9 21.4 

$20 17.4 

$10 2.1 

$0 -1.7 

-6.1 Securities and Other Gains/Losses, Net

Net Operating Income 

-$10 

-12.6 

-$20 1234 12341 234 12341234 1 

2009 2010 2011 2012 2013 2014 

Source: FDIC. 

Unproÿtable Institutions and Institutions 

With Increased Earnings 

0 

10 

20 

30 

40 

50 

60 

70 

80 

2006 2007 2008 2009 2010 2011 2012 2013 2014 

Percentage of Institutions With Year-Over-Year 

Quarterly Income Growth 

Percentage of Institutions With Quarterly Losses 

Percentage of All FDIC-Insured Institutions 

Source: FDIC. 
FDIC QUARTERLY 2 2014, VOLUME 8, NO. 2 

Reduced Income From Mortgage Lending 

Contributes to Revenue Decline 

The year-over-year decline in noninterest income was 

led by a $4 billion (53.6 percent) drop in income from 

mortgage sales, securitization, and servicing. Trading 

revenue was $1.4 billion (18.3 percent) lower than the 

comparable period in 2013. In addition, first quarter 

2013 noninterest income received a $2.5 billion boost 

from a litigation settlement, while there was no similar 

boost to first quarter 2014 income. A majority of banks, 

55.6 percent, reported lower noninterest income than 

in first quarter 2013. Noninterest expense was essentially unchanged from 2013 (down $18 million, or 

0.02 percent). Payroll expenses were $579 million 

(1.2 percent) lower, as the number of full-time equivalent employees was 43,890 fewer than a year ago. Firstquarter expenses were elevated by a $959 million 

litigation expense. 

Gains From Lower Provisioning Are Diminishing 

The largest positive contribution to the year-over-year 

change in earnings came from reduced loan-loss provisions. The $7.6 billion that banks set aside for their 

loan-loss reserves was $3.3 billion (30.3 percent) lower 

than the year before. This is the 18th consecutive quarter that loan-loss provisions have declined year over 

year, and it is the second-smallest decline during this 

period. Forty-two percent of all banks reduced their 

loss provisions. 

Chart 3 

Quarterly Net Operating Revenue 

All FDIC-Insured Institutions 

Billions of Dollars 

$0 

$20 

$40 

$60 

$80 

$100 

$120 

$140 

$160 

$180 

1 2 3 4 1 2 3 4 1 2 3 4 12 34 1 2 3 4 1 2 3 4 1 2 3 4 1 

2007 2008 2009 2010 2011 2012 2013

Source: FDIC. 

2014 

Quarterly Noninterest Income 

Quarterly Net Interest Income 

Charge-Offs Fall to Pre-Crisis Level 

Loan losses continued to decline. Net charge-offs 

(NCOs) fell year over year for a 15th consecutive quarter, to $10.4 billion, $5.5 billion (34.8 percent) less 

than in first quarter 2013. This is the lowest quarterly 

NCO total since second quarter 2007. Charge-offs were 

lower across all major loan categories, with the largest 

declines occurring in residential mortgage loans (down 

$2 billion, 63.1 percent), home equity lines (down $1 

billion, 53.3 percent), real estate loans secured by 

nonfarm nonresidential properties (down $734 million, 

71.9 percent), and credit cards (down $709 million, 

11.4 percent). The annualized NCO rate fell to 0.52 

percent from 0.83 percent in first quarter 2013. 

Noncurrent Balances Fall Below $200 Billion 

The amount of loan and lease balances that were 

noncurrent (90 days or more past due or in nonaccrual 

status) declined for a 16th quarter in a row, as noncurrent levels improved in all major loan categories. 

Noncurrent balances totaled $195.1 billion at the end 

of the first quarter, down $12.1 billion (5.8 percent) 

from the total at year-end 2013. This is the first time 

since the end of third quarter 2008 that noncurrent 

balances have been below $200 billion. The improvement was led by residential mortgage loans, where 

noncurrent balances fell by $8.7 billion (6.5 percent), 

real estate loans secured by nonfarm nonresidential 

properties (down $1.2 billion, 5.7 percent) and real 

estate construction and development loans (down 

$1.1 billion, 12.7 percent). 

Chart 4 

Quarterly Noninterest Income From Sale, Securitization, 

and Servicing of 1-to-4 Family Residential Mortgage Loans* 

Billions of Dollars 

$10 8.8 8.6 8.0 

$8 7.4 7.5 7.3 7.1 

6.2 5.6 5.3 4.7 $6 4.7 4.7 4.7 4.4 4.3 3.7 3.6 3.7 3.5 $4 3.2 

1.5 1.7 $2 1.5 1.2 1.2 0.9 0.9 

$0 

-0.8 

-$2 1 2 3 4 1234 1 2 341234 1 2 3412 3 4 1234 1 

2007 2008 2009 2010 2011 2012 2013 2014 

Source: FDIC. 

*Beginning in Q4 2008, includes income from HELOCs. Call Reporters only, subject to 

de minimis reporting conditions. 
FDIC QUARTERLY 3 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

Reserve Coverage Improves for Sixth 

Consecutive Quarter 

Banks continued to release reserves in the first quarter, 

adding $7.6 billion in loss provisions while net chargeoffs subtracted $10.4 billion. Total loan-loss reserves 

declined from $135.9 billion at year-end 2013 to 

$132.3 billion. This is the 16th consecutive quarter 

that reserve balances have fallen; reserves are now at a 

six-year low. The industry’s coverage ratio of reserves 

to noncurrent loans increased from 65.6 percent to 

67.8 percent during the quarter, however, owing to the 

decline in noncurrent loan balances. The coverage 

ratio has increased in each of the last six quarters. A 

year ago, the ratio was 59.5 percent. 

Capital Measures Exhibit Strength 

Equity capital increased by $29.8 billion (1.8 percent) 

in the quarter. Retained earnings contributed $17.3 

billion, down from $25.9 billion in the same period of 

2013, as declared dividends were up by $5.5 billion 

(38.3 percent). Higher market values for available-forsale securities added $6.7 billion to equity during the 

quarter. Both the core capital (leverage) ratio and the 

Tier 1 risk-based capital ratio (as defined for Prompt 

Corrective Action purposes) rose to record levels for 

the industry. At the end of the first quarter, 98.2 

percent of all insured institutions, representing 99.8 

percent of industry assets, met or exceeded the requirements of the highest regulatory capital category. 

Pace of Loan Growth Picks Up 

Total assets increased by $178.3 billion (1.2 percent) 

in the first three months of 2014. Balances with 

Federal Reserve banks rose by $82.5 billion (7.1 

percent), accounting for 46 percent of total asset 

growth. Investment securities portfolios rose by $52.7 

billion (1.8 percent), as banks increased their holdings 

of U.S. Treasury securities by $44.6 billion (23.1 

percent). Total loans and leases increased by $37.8 

billion (0.5 percent) during the quarter. Credit card 

balances and agricultural production loans posted 

seasonal declines of $33 billion (4.8 percent) and $5.7 

billion (8 percent), respectively. Home equity lines of 

credit declined for a 20th consecutive quarter, falling 

by $7.2 billion (1.4 percent). Residential mortgage 

balances declined by $6.3 billion (0.3 percent), as 

banks reduced their inventories of mortgages held for 

sale. All other major loan categories increased during 

the quarter. Loans to commercial and industrial 

borrowers increased by $15.3 billion (1.0 percent), 

while real estate loans secured by multifamily residential properties rose by $9 billion (3.4 percent), real 

estate loans secured by nonfarm nonresidential properties increased by $8.1 billion (0.7 percent), and auto 

loans rose by $6.2 billion (1.8 percent). Assets in trading accounts declined by $18.6 billion (3.1 percent). 

Chart 5 Chart 6 

Year-Over-Year Change in Quarterly Loan-Loss Provisions 

All FDIC-Insured ̃Institutions 

Billions of Dollars 

$0 

-$5 -3.3 

-$10 

-$15 

-$20 

-$25 

-$30 -30.7 

-$35 

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

2011 2012 2013 2014 

Source: FDIC. 

Noncurrent Loan Rate and Quarterly Net Charge-Off Rate 

All FDIC-Insured Institutions 

0 

1 

2 

3 

4 

5 

6 

2006 2007 2008 2009 2010 2011 2012 2013 2014 

Percent 

Source: FDIC. 

Noncurrent Loan Rate 

Quarterly Net Charge-Off Rate 
FDIC QUARTERLY 4 2014, VOLUME 8, NO. 2 

Retail Deposits Lead Growth in Funding 

Deposit balances were up by $125.8 billion (1.1 

percent) in the quarter, as deposits in foreign offices fell 

by $5.4 billion (0.4 percent) and domestic office deposits increased by $131.1 billion (1.3 percent). Much of 

the increase in domestic deposits consisted of balances 

in smaller-denomination accounts. Deposits in accounts 

of less than $250,000 rose by $85.9 billion (1.7 

percent). Nondeposit liabilities increased by $25.4 

billion (1.4 percent), as unsecured borrowings increased 

by $28.1 billion (13.9 percent), and securities sold 

under repo agreements rose by $22 billion (7.2 percent). 

Liabilities in trading accounts declined by $22 billion 

(9.1 percent). 

Problem List Falls to Less Than Half of Recent Peak 

The number of insured commercial banks and savings 

institutions reporting financial results declined to 6,730 

in the first quarter, down from 6,812 reporters at the 

end of fourth quarter 2013. No new reporters were 

added in the first quarter. Mergers absorbed 74 institutions during the quarter, and five insured institutions 

failed. The number of institutions on the FDIC’s “Problem List” declined from 467 to 411 during the quarter. 

Assets of “problem” banks fell from $152.7 billion to 

$126.1 billion. The number of full-time equivalent 

employees declined to 2,058,927, from 2,102,817 in first 

quarter 2013. This is the fourth consecutive quarter 

that the number of employees has declined year over 

year. 

Author: Ross Waldrop, Senior Banking Analyst 

Division of Insurance and Research 

(202) 898-3951 

Chart 7 Chart 8 

Quarterly Change in Loan Balances 

All FDIC-Insured Institutions 

Billions of Dollars 

$300 

$250 237 221* 203 $200 189 

$150 134 118 102 91 $100 61 67 65 73 70 43 $50 28 38 24 

$0 -6 -7 -14 -$50 -37 -63 -$100 -116 -109 -107 -$150 -126 -140 -133 

-$200 -210 -$250 12 34 1 2 3 4 1 2 3 4 12 3 4 1 2 34 12 34 1 2 3 4 1 

2007 2008 2009 2010 2011 2012 2013 2014 

Source: FDIC. 

*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. 

Quarterly Changes in the Number of 

Troubled Institutions 

200 

175 45 50 

150 Quarterly Failures 

125 24 Net Quarterly Change in 

Number of Problem Banks 

100 41 12 150 75 45 21 136 136 9 111 50 41 81 2 7373 30 54 25 2 5353 5454 

2727 3131 24 26 22 26 18 16 15 12 8 6 5 144 12 2 0 4-23 -21-31 -40-38 -39 -25 -41-43 -38-48 -59-56

-50 

-75 

1 2 3 4 12 3412341234123412341 

2008 2009 2010 2011 2012 2013 2014 

Source: FDIC. 
FDIC QUARTERLY 5 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

 

 

 

 

 

 

 

 

 

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

Return on assets (%) ������������������������������������������������������������������������������������������������������ 

Return on equity (%)������������������������������������������������������������������������������������������������������� 

Core capital (leverage) ratio (%) ������������������������������������������������������������������������������������ 

Noncurrent assets plus other real estate owned to assets (%) ������������������������������������ 

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

Asset growth rate (%) ����������������������������������������������������������������������������������������������������� 

Net interest margin (%)��������������������������������������������������������������������������������������������������� 

Net operating income growth (%)����������������������������������������������������������������������������������� 

Number of institutions reporting������������������������������������������������������������������������������������� 

Commercial banks��������������������������������������������������������������������������������������������������� 

Savings institutions ������������������������������������������������������������������������������������������������� 

Percentage of unprofitable institutions (%)�������������������������������������������������������������������� 

Number of problem institutions �������������������������������������������������������������������������������������� 

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

Number of failed institutions������������������������������������������������������������������������������������������� 

Number of assisted institutions�������������������������������������������������������������������������������������� 

2014** 2013** 2013 2012 2011 2010 2009 

1�01 

8�99 

9�54 

1�52 

0�52 

3�30 

3�17 

-5�85 

6,730 

5,809 

921 

7�28 

411 

$126 

5 

0 

1�12 

9�96 

9�26 

2�08 

0�83 

3�58 

3�27 

19�61 

7,019 

6,048 

971 

8�55 

612 

$213 

4 

0 

1�07 

9�53 

9�40 

1�63 

0�69 

1�88 

3�26 

12�75 

6,812 

5,876 

936 

8�12 

467 

$153 

24 

0 

1�00 0�88 0�65 -0�08 

8�91 7�79 5�85 -0�73 

9�15 9�07 8�89 8�60 

2�20 2�61 3�11 3�37 

1�10 1�55 2�55 2�52 

4�02 4�30 1�77 -5�45 

3�42 3�60 3�76 3�49 

17�75 43�55 1594�66 -155�98 

7,083 7,357 7,658 8,012 

6,096 6,291 6,530 6,840 

987 1,066 1,128 1,172 

10�98 16�22 22�15 30�84 

651 813 884 702 

$233 $319 $390 $403 

51 92 157 140 

0 0 0 8 

* 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) 

Number of institutions reporting������������������������������������������������������������������������������������� 

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

CONDITION DATA 

Total assets��������������������������������������������������������������������������������������������������������������������� 

Loans secured by real estate���������������������������������������������������������������������������������� 

1-4 Family residential mortgages �������������������������������������������������������������������� 

Nonfarm nonresidential������������������������������������������������������������������������������������ 

Construction and development 

Home equity lines��������������������������������������������������������������������������������������������� 

Commercial & industrial loans �������������������������������������������������������������������������������� 

Loans to individuals������������������������������������������������������������������������������������������������� 

Credit cards ������������������������������������������������������������������������������������������������������ 

Farm loans��������������������������������������������������������������������������������������������������������������� 

Other loans & leases����������������������������������������������������������������������������������������������� 

Less: Unearned income ������������������������������������������������������������������������������������������ 

Total loans & leases ������������������������������������������������������������������������������������������������ 

Less: Reserve for losses����������������������������������������������������������������������������������������� 

Net loans and leases����������������������������������������������������������������������������������������������� 

Securities����������������������������������������������������������������������������������������������������������������� 

Other real estate owned������������������������������������������������������������������������������������������ 

Goodwill and other intangibles ������������������������������������������������������������������������������� 

All other assets�������������������������������������������������������������������������������������������������������� 

Total liabilities and capital ���������������������������������������������������������������������������������������������� 

Deposits������������������������������������������������������������������������������������������������������������������� 

Domestic office deposits���������������������������������������������������������������������������������� 

Foreign office deposits������������������������������������������������������������������������������������� 

Other borrowed funds ��������������������������������������������������������������������������������������������� 

Subordinated debt��������������������������������������������������������������������������������������������������� 

All other liabilities ���������������������������������������������������������������������������������������������������� 

Total equity capital (includes minority interests)���������������������������������������������������� 

Bank equity capital������������������������������������������������������������������������������������������� 

Loans and leases 30-89 days past due������������������������������������������������������������������������� 

Noncurrent loans and leases ����������������������������������������������������������������������������������������� 

Restructured loans and leases �������������������������������������������������������������������������������������� 

Mortgage-backed securities ������������������������������������������������������������������������������������������ 

Earning assets���������������������������������������������������������������������������������������������������������������� 

FHLB Advances�������������������������������������������������������������������������������������������������������������� 

Unused loan commitments��������������������������������������������������������������������������������������������� 

Trust assets��������������������������������������������������������������������������������������������������������������������� 

Assets securitized and sold ������������������������������������������������������������������������������������������� 

Notional amount of derivatives��������������������������������������������������������������������������������������� 

1st Quarter 

2014 

6,730 

2,058,927 

$14,901,002 

4,075,508 

1,822,313 

1,117,684 

214,319 

503,539 

1,614,329 

1,326,961 

658,387 

64,972 

851,019 

1,902 

7,930,910 

132,323 

7,798,587 

3,054,501 

29,367 

365,486 

3,653,062 

14,901,002 

11,317,837 

9,922,088 

1,395,749 

1,343,002 

95,451 

463,007 

1,681,705 

1,672,967 

69,570 

195,054 

97,167 

1,690,537 

13,269,584 

391,990 

6,214,801 

20,193,283 

722,091 

233,457,475 

4th Quarter 1st Quarter %Change 

2013 2013 13Q1-14Q1 

6,812 

2,068,754 

$14,722,664 

4,065,663 

1,828,625 

1,109,585 

209,935 

510,756 

1,599,063 

1,353,508 

691,397 

70,642 

806,149 

1,896 

7,893,129 

135,927 

7,757,202 

3,001,760 

30,209 

368,316 

3,565,177 

14,722,664 

11,192,053 

9,790,951 

1,401,102 

1,307,630 

99,618 

468,773 

1,654,590 

1,643,211 

75,883 

207,136 

99,419 

1,673,883 

13,067,384 

406,163 

6,098,254 

19,691,995 

742,448 

238,755,603 

7,019 -4�1 

2,102,817 -2�1 

$14,424,434 3�3 

4,059,427 0�4 

1,877,838 -3�0 

1,072,938 4�2 

201,534 6�3 

538,912 -6�6 

1,519,577 6�2 

1,288,060 3�0 

660,224 -0�3 

59,810 8�6 

733,951 16�0 

1,926 -1�3 

7,658,899 3�6 

155,488 -14�9 

7,503,411 3�9 

2,998,531 1�9 

35,892 -18�2 

367,041 -0�4 

3,519,559 3�8 

14,424,434 3�3 

10,819,197 4�6 

9,426,565 5�3 

1,392,632 0�2 

1,300,306 3�3 

116,075 -17�8 

547,377 -15�4 

1,641,479 2�5 

1,626,316 2�9 

80,037 -13�1 

261,170 -25�3 

105,772 -8�1 

1,698,409 -0�5 

12,753,050 4�1 

330,183 18�7 

5,908,378 5�2 

18,271,244 10�5 

809,168 -10�8 

232,583,465 0�4 

Full Year Full Year 1st Quarter 1st Quarter %Change 

INCOME DATA 2013 2012 %Change 2014 2013 13Q1-14Q1 

Total interest income ������������������������������������������������������������������� $470,760 $486,730 -3�3 $116,125 $118,110 -1�7 

Total interest expense ����������������������������������������������������������������� 53,610 65,902 -18�7 11,937 14,284 -16�4 

Net interest income �������������������������������������������������������������� 417,150 420,828 -0�9 104,187 103,826 0�4 

Provision for loan and lease losses �������������������������������������������� 32,426 57,807 -43�9 7,601 10,911 -30�3 

Total noninterest income ������������������������������������������������������������� 251,844 248,629 1�3 59,513 66,621 -10�7 

Total noninterest expense ����������������������������������������������������������� 416,751 421,221 -1�1 102,266 102,283 0�0 

Securities gains (losses) ������������������������������������������������������������� 4,474 9,680 -53�8 827 2,071 -60�1 

Applicable income taxes ������������������������������������������������������������� 69,530 58,303 19�3 17,304 18,758 -7�8 

Extraordinary gains, net�������������������������������������������������������������� 243 -146 N/M 76 -59 N/M 

Total net income (includes minority interests)��������������������� 155,004 141,660 9�4 37,432 40,506 -7�6 

Bank net income������������������������������������������������������������ 154,219 141,050 9�3 37,239 40,308 -7�6 

Net charge-offs���������������������������������������������������������������������������� 53,529 82,222 -34�9 10,374 15,900 -34�8 

Cash dividends ���������������������������������������������������������������������������� 87,161 96,409 -9�6 19,939 14,413 38�3 

Retained earnings ����������������������������������������������������������������������� 67,059 44,640 50�2 17,300 25,895 -33�2 

Net operating income����������������������������������������������������������� 151,632 134,484 12�8 36,765 39,051 -5�9 

N/M - Not Meaningful 
FDIC QUARTERLY 6 2014, VOLUME 8, NO. 2 

TABLE III-A. First Quarter 2014, All FDIC-Insured Institutions 

FIRST QUARTER 

(The way it is...) 

Number of institutions reporting����������������������� 

All Insured 

Institutions 

Asset Concentration Groups* 

Credit 

Card 

Banks 

International 

Banks 

Agricultural 

Banks 

Commercial 

Lenders 

Mortgage 

Lenders 

Consumer 

Lenders 

Other 

Specialized 

<$1 Billion 

All Other 

<$1 Billion 

All Other 

>$1 Billion 

6,730 16 4 1,481 3,323 563 54 444 783 62 

Commercial banks������������������������������������� 5,809 13 4 1,463 2,986 168 40 405 677 53 

Savings institutions ����������������������������������� 921 3 0 18 337 395 14 39 106 9 

Total assets (in billions)������������������������������������ $14,901�0 $592�3 $3,715�4 $245�2 $4,977�1 $575�5 $164�1 $70�2 $141�3 $4,419�9 

Commercial banks������������������������������������� 13,854�7 511�8 3,715�4 240�2 4,587�5 256�2 79�9 65�2 116�2 4,282�2 

Savings institutions ����������������������������������� 1,046�3 80�5 0�0 5�0 389�6 319�3 84�1 5�0 25�1 137�7 

Total deposits (in billions)��������������������������������� 11,317�8 342�3 2,641�7 206�6 3,895�6 432�1 139�2 57�9 119�1 3,483�2 

Commercial banks������������������������������������� 10,516�0 285�8 2,641�7 203�4 3,608�7 198�3 67�6 54�2 98�8 3,357�5 

Savings institutions ����������������������������������� 801�8 56�6 0�0 3�2 286�9 233�8 71�6 3�7 20�3 125�7 

Bank net income (in millions) ��������������������������� 37,239 5,143 7,172 682 11,724 1,201 415 320 288 10,294 

Commercial banks������������������������������������� 34,363 4,173 7,172 657 10,993 742 222 201 257 9,945 

Savings institutions ����������������������������������� 

Performance Ratios (annualized, %) 

2,876 970 0 25 731 458 193 119 31 349 

Yield on earning assets������������������������������������ 3�53 10�10 2�76 4�05 3�85 3�57 3�78 3�10 3�96 2�82 

Cost of funding earning assets ������������������������ 0�36 0�65 0�39 0�50 0�41 0�58 0�48 0�38 0�49 0�20 

Net interest margin������������������������������������ 3�17 9�45 2�37 3�55 3�44 2�99 3�31 2�71 3�47 2�62 

Noninterest income to assets��������������������������� 1�61 4�43 1�67 0�59 1�20 0�81 1�21 4�58 0�90 1�79 

Noninterest expense to assets������������������������� 2�76 5�55 2�44 2�48 2�82 2�28 2�32 4�59 3�02 2�66 

Loan and lease loss provision to assets���������� 0�21 2�11 0�15 0�09 0�14 0�13 0�49 0�05 0�08 0�08 

Net operating income to assets ����������������������� 0�99 3�47 0�78 1�11 0�94 0�81 1�02 1�82 0�80 0�91 

Pretax return on assets ������������������������������������ 1�47 5�48 1�14 1�30 1�34 1�25 1�61 2�46 1�02 1�40 

Return on assets����������������������������������������������� 1�01 3�48 0�77 1�12 0�95 0�84 1�02 1�85 0�82 0�94 

Return on equity ����������������������������������������������� 8�99 23�59 8�29 10�21 8�01 7�22 10�64 13�73 7�16 8�17 

Net charge-offs to loans and leases���������������� 

Loan and lease loss provision to 

0�52 3�03 0�72 0�06 0�27 0�23 0�72 0�11 0�17 0�34 

net charge-offs���������������������������������������������� 73�27 89�37 60�89 229�97 74�41 94�42 100�08 152�17 88�65 48�81 

Efficiency ratio �������������������������������������������������� 61�48 40�77 64�37 63�70 65�02 62�56 51�61 64�67 73�52 63�74 

% of unprofitable institutions���������������������������� 7�28 0�00 0�00 3�78 7�61 11�19 5�56 10�36 8�56 3�23 

% of institutions with earnings gains���������������� 

Condition Ratios (%) 

54�01 43�75 50�00 56�11 56�30 45�83 40�74 51�58 49�04 50�00 

Earning assets to total assets �������������������������� 

Loss allowance to: 

89�05 92�35 87�34 92�48 89�59 93�53 97�51 91�45 91�95 88�22 

Loans and leases �������������������������������������� 1�67 3�52 2�18 1�51 1�48 1�26 1�21 1�91 1�55 1�37 

Noncurrent loans and leases �������������������� 

Noncurrent assets plus 

67�84 309�27 83�31 131�75 81�67 48�51 77�47 103�76 77�50 35�78 

other real estate owned to assets ���������������� 1�52 0�87 1�03 0�95 1�57 1�78 1�15 0�87 1�57 1�99 

Equity capital ratio�������������������������������������������� 11�23 14�74 9�38 11�06 11�92 11�68 9�64 13�54 11�55 11�48 

Core capital (leverage) ratio ���������������������������� 9�54 12�80 8�22 10�45 10�20 10�74 9�43 13�18 11�41 9�13 

Tier 1 risk-based capital ratio��������������������������� 13�34 15�17 13�00 15�02 12�84 20�83 14�10 29�62 19�95 12�75 

Total risk-based capital ratio ���������������������������� 15�07 17�97 14�75 16�15 14�45 21�90 14�93 30�65 21�13 14�59 

Net loans and leases to deposits��������������������� 68�91 127�58 48�13 71�31 85�05 77�63 78�95 33�96 63�14 59�99 

Net loans to total assets ���������������������������������� 52�34 73�73 34�22 60�08 66�57 58�29 66�99 28�01 53�23 47�28 

Domestic deposits to total assets �������������������� 

Structural Changes 

66�59 55�25 43�65 84�25 77�26 74�93 84�84 81�74 84�31 71�82 

New reporters�������������������������������������������� 0 0 0 0 0 0 0 0 0 0 

Institutions absorbed by mergers ������������� 74 0 0 13 47 3 0 2 4 5 

Failed institutions �������������������������������������� 

PRIOR FIRST QUARTERS 

(The way it was...) 

5 0 0 0 4 1 0 0 0 0 

Number of institutions ������������������������������2013 7,019 16 5 1,491 3,483 619 49 450 827 79 

��������������������������������������2011 7,574 21 4 1,531 3,983 699 72 354 844 66 

������������������������������������� 2009 8,247 25 5 1,524 4,680 838 80 305 745 45 

Total assets (in billions)����������������������������2013 $14,424�4 $594�3 $3,838�6 $231�1 $4,223�7 $566�2 $106�3 $69�4 $148�9 $4,645�8 

��������������������������������������2011 13,414�3 676�3 3,164�6 200�3 4,084�5 795�8 118�4 51�8 137�1 4,185�5 

������������������������������������� 2009 13,526�2 464�0 3,203�0 165�4 6,002�0 1,100�9 73�2 36�2 103�5 2,377�9 

Return on assets (%) ��������������������������������2013 1�12 3�10 0�95 1�14 0�89 0�94 1�48 1�52 0�93 1�22 

��������������������������������������2011 0�86 3�68 0�60 1�04 0�59 0�48 1�33 1�34 0�80 0�90 

������������������������������������� 2009 -0�18 -11�26 0�61 0�73 -0�19 0�54 0�08 0�30 0�92 0�55 

Net charge-offs to loans & leases (%) �����2013 0�83 3�41 1�17 0�10 0�51 0�42 1�18 0�34 0�29 0�63 

��������������������������������������2011 1�83 6�67 1�96 0�31 1�34 0�98 1�77 0�76 0�39 1�40 

������������������������������������� 2009 

Noncurrent assets plus 

1�94 8�57 2�42 0�52 1�45 1�05 2�56 0�43 0�30 1�87 

OREO to assets (%)������������������������������2013 2�08 1�04 1�30 1�07 2�12 2�57 0�92 1�05 1�68 2�85 

��������������������������������������2011 2�96 1�72 2�01 1�64 3�59 2�93 1�22 0�93 1�78 3�43 

������������������������������������� 2009 2�40 2�63 2�00 1�48 2�82 3�04 0�99 0�62 1�11 1�71 

Equity capital ratio (%)������������������������������2013 11�27 14�94 8�97 11�27 11�94 11�44 9�50 14�56 11�49 12�07 

��������������������������������������2011 11�25 16�03 8�72 10�95 11�60 10�30 10�81 15�07 11�16 12�22 

������������������������������������� 2009 10�05 21�57 8�44 11�05 10�26 8�92 9�25 16�24 11�34 9�77 

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

Note: Blue font identifies data that are also presented in the prior quarters’ data at bottom of table� 
FDIC QUARTERLY 7 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

TABLE III-A. First Quarter 2014, All FDIC-Insured Institutions 

FIRST QUARTER 

(The way it is...) 

Number of institutions reporting����������������������������� 

All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less Than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion 

to 

$10 Billion 

Greater 

Than 

$10 Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

6,730 2,005 4,053 565 107 831 852 1,457 1,641 1,414 535 

Commercial banks������������������������������������������� 5,809 1,770 3,496 452 91 458 767 1,209 1,571 1,319 485 

Savings institutions ����������������������������������������� 921 235 557 113 16 373 85 248 70 95 50 

Total assets (in billions)������������������������������������������ $14,901�0 $118�1 $1,245�8 $1,494�9 $12,042�3 $2,963�4 $3,032�9 $3,417�0 $3,238�4 $883�0 $1,366�4 

Commercial banks������������������������������������������� 13,854�7 104�6 1,051�2 1,207�5 11,491�5 2,500�0 2,947�1 3,307�6 3,177�4 777�1 1,145�4 

Savings institutions ����������������������������������������� 1,046�3 13�5 194�6 287�4 550�8 463�4 85�7 109�4 61�0 105�9 221�0 

Total deposits (in billions)��������������������������������������� 11,317�8 100�6 1,045�5 1,174�2 8,997�6 2,213�0 2,333�5 2,479�4 2,490�7 739�0 1,062�4 

Commercial banks������������������������������������������� 10,516�0 89�9 890�1 957�9 8,578�2 1,878�7 2,268�6 2,396�2 2,441�7 650�7 880�1 

Savings institutions ����������������������������������������� 801�8 10�7 155�5 216�2 419�4 334�3 64�8 83�2 48�9 88�3 182�3 

Bank net income (in millions) ��������������������������������� 37,239 240 2,804 3,760 30,435 7,505 6,631 6,801 9,185 2,371 4,746 

Commercial banks������������������������������������������� 34,363 217 2,426 3,209 28,511 6,749 6,458 6,634 9,023 2,048 3,451 

Savings institutions ����������������������������������������� 

Performance Ratios (annualized, %) 

2,876 23 379 550 1,924 755 174 168 162 323 1,295 

Yield on earning assets������������������������������������������ 3�53 4�11 4�15 4�21 3�37 3�83 3�47 2�80 3�74 3�89 4�05 

Cost of funding earning assets ������������������������������ 0�36 0�49 0�51 0�45 0�33 0�41 0�29 0�30 0�41 0�34 0�44 

Net interest margin������������������������������������������ 3�17 3�62 3�64 3�76 3�03 3�42 3�18 2�49 3�33 3�55 3�61 

Noninterest income to assets��������������������������������� 1�61 1�21 1�01 1�16 1�73 1�52 1�66 1�72 1�51 1�27 1�87 

Noninterest expense to assets������������������������������� 2�76 3�47 3�12 3�03 2�68 2�73 3�03 2�64 2�60 3�02 2�75 

Loan and lease loss provision to assets���������������� 0�21 0�09 0�12 0�17 0�22 0�35 0�17 0�14 0�16 0�10 0�31 

Net operating income to assets ����������������������������� 0�99 0�81 0�89 0�99 1�01 1�00 0�84 0�80 1�14 1�07 1�40 

Pretax return on assets ������������������������������������������ 1�47 0�96 1�15 1�42 1�52 1�51 1�28 1�14 1�71 1�41 2�17 

Return on assets����������������������������������������������������� 1�01 0�82 0�91 1�01 1�02 1�02 0�88 0�80 1�14 1�08 1�41 

Return on equity ����������������������������������������������������� 8�99 6�94 8�36 8�55 9�13 8�47 7�18 8�24 10�88 9�92 11�15 

Net charge-offs to loans and leases���������������������� 

Loan and lease loss provision to 

0�52 0�18 0�18 0�26 0�62 0�75 0�47 0�38 0�61 0�21 0�50 

net charge-offs���������������������������������������������������� 73�27 87�48 100�35 99�45 70�47 87�44 63�31 80�95 48�72 76�40 102�01 

Efficiency ratio �������������������������������������������������������� 61�48 76�59 71�35 65�39 59�82 58�36 67�72 66�87 56�77 66�46 52�30 

% of unprofitable institutions���������������������������������� 7�28 12�92 5�33 2�65 0�00 7�94 11�27 8�24 5�12 5�02 9�91 

% of institutions with earnings gains���������������������� 

Condition Ratios (%) 

54�01 52�47 54�48 56�46 52�34 51�26 58�69 48�73 55�51 56�36 54�39 

Earning assets to total assets ��������������������������������� 

Loss allowance to: 

89�05 91�42 92�15 91�12 88�45 89�34 87�45 88�45 88�68 91�56 92�75 

Loans and leases ��������������������������������������������� 1�67 1�67 1�58 1�53 1�70 1�68 1�52 1�80 1�85 1�48 1�48 

Noncurrent loans and leases ��������������������������� 

Noncurrent assets plus 

67�84 92�50 92�54 74�41 64�77 94�10 48�26 69�62 59�46 84�47 123�46 

other real estate owned to assets ����������������������� 1�52 1�71 1�71 1�77 1�47 1�08 2�04 1�39 1�86 1�46 0�85 

Equity capital ratio��������������������������������������������������� 11�23 11�86 10�91 11�90 11�17 12�04 12�32 9�79 10�47 10�96 12�60 

Core capital (leverage) ratio ����������������������������������� 9�54 11�76 10�70 10�67 9�25 9�93 9�49 8�62 9�20 10�04 11�57 

Tier 1 risk-based capital ratio���������������������������������� 13�34 19�45 15�87 14�92 12�84 14�36 12�77 12�44 12�58 14�45 15�80 

Total risk-based capital ratio ����������������������������������� 15�07 20�56 17�04 16�09 14�70 16�15 14�51 14�08 14�63 15�78 17�09 

Net loans and leases to deposits���������������������������� 68�91 64�07 74�03 81�87 66�67 70�62 73�70 61�10 66�96 70�77 76�28 

Net loans to total assets ����������������������������������������� 52�34 54�57 62�13 64�31 49�82 52�74 56�71 44�34 51�50 59�23 59�31 

Domestic deposits to total assets ��������������������������� 

Structural Changes 

66�59 85�18 83�87 78�14 63�18 65�93 73�69 60�78 57�89 83�30 76�57 

New reporters�������������������������������������������������� 0 0 0 0 0 0 0 0 0 0 0 

Institutions absorbed by mergers ������������������� 74 32 37 4 1 6 15 14 17 15 7 

Failed institutions �������������������������������������������� 

PRIOR FIRST QUARTERS 

(The way it was...) 

5 2 3 0 0 1 1 1 0 1 1 

Number of institutions ������������������������������������2013 7,019 2,161 4,196 553 109 867 894 1,500 1,701 1,480 577 

�������������������������������������������� 2011 7,574 2,573 4,331 563 107 942 1,010 1,581 1,811 1,580 650 

������������������������������������������� 2009 8,247 3,052 4,504 576 115 1,005 1,172 1,692 1,924 1,690 764 

Total assets (in billions) ����������������������������������2013 $14,424�4 $126�0 $1,270�8 $1,423�9 $11,603�8 $2,862�6 $3,017�0 $3,345�9 $3,068�2 $870�9 $1,259�8 

�������������������������������������������� 2011 13,414�3 147�1 1,284�8 1,428�4 10,554�0 2,709�1 2,913�4 3,047�9 1,680�2 788�2 2,275�5 

������������������������������������������� 2009 13,526�2 167�2 1,359�5 1,512�5 10,486�9 2,505�7 3,520�2 3,176�6 1,064�7 908�9 2,350�2 

Return on assets (%) ��������������������������������������2013 1�12 0�72 0�87 1�10 1�15 0�86 1�11 1�09 1�25 1�09 1�47 

��������������������������������������������2011 0�86 0�57 0�52 0�69 0�93 1�04 0�60 0�68 1�19 0�92 0�96 

������������������������������������������� 2009 -0�18 0�25 0�27 -0�24 -0�23 -1�82 0�20 0�12 0�56 -0�37 0�37 

Net charge-offs to loans & leases (%) �����������2013 0�83 0�26 0�33 0�43 0�96 1�10 0�83 0�55 1�05 0�37 0�65 

�������������������������������������������� 2011 1�83 0�43 0�77 1�37 2�09 2�29 1�82 1�43 2�02 0�83 1�98 

������������������������������������������� 2009 

Noncurrent assets plus 

1�94 0�57 0�76 1�43 2�26 2�23 1�76 1�63 2�15 0�91 2�67 

OREO to assets (%)������������������������������������2013 2�08 2�04 2�30 2�17 2�04 1�41 3�03 1�87 2�34 2�01 1�28 

�������������������������������������������� 2011 2�96 2�39 3�39 3�47 2�84 2�05 3�97 2�75 4�05 3�02 2�18 

������������������������������������������� 2009 2�40 1�87 2�53 2�98 2�31 1�53 2�56 2�43 2�72 2�60 2�81 

Equity capital ratio (%)������������������������������������2013 11�27 11�97 11�00 11�84 11�23 12�26 12�22 9�12 11�03 10�82 13�41 

��������������������������������������������2011 11�25 11�57 10�28 11�43 11�34 12�74 11�84 8�52 11�58 10�73 12�33 

������������������������������������������� 2009 10�05 12�66 9�96 10�56 9�95 11�71 10�19 8�37 9�90 9�87 10�49 

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

Note: Blue font identifies data that are also presented in the prior quarters’ data at bottom of table� 
FDIC QUARTERLY 8 2014, VOLUME 8, NO. 2 

TABLE IV-A. Full Year 2013, All FDIC-Insured Institutions 

FULL YEAR 

(The way it is...) 

Number of institutions reporting����������������������� 

All Insured 

Institutions 

Asset Concentration Groups* 

Credit 

Card 

Banks 

International 

Banks 

Agricultural 

Banks 

Commercial 

Lenders 

Mortgage 

Lenders 

Consumer 

Lenders 

Other 

Specialized 

<$1 Billion 

All Other 

<$1 Billion 

All Other 

>$1 Billion 

6,812 16 4 1,532 3,377 588 55 406 772 62 

Commercial banks������������������������������������� 5,876 13 4 1,511 3,040 169 42 369 675 53 

Savings institutions ����������������������������������� 936 3 0 21 337 419 13 37 97 9 

Total assets (in billions)������������������������������������ $14,722�7 $590�9 $3,691�5 $261�6 $4,921�9 $486�9 $162�5 $63�0 $137�6 $4,406�8 

Commercial banks������������������������������������� 13,670�2 514�3 3,691�5 255�3 4,508�3 194�8 80�8 58�4 116�0 4,250�7 

Savings institutions ����������������������������������� 1,052�5 76�6 0�0 6�3 413�6 292�1 81�7 4�7 21�6 156�0 

Total deposits (in billions)��������������������������������� 11,192�1 340�6 2,645�5 218�0 3,849�5 362�9 137�4 51�6 116�0 3,470�7 

Commercial banks������������������������������������� 10,389�3 287�0 2,645�5 213�7 3,546�0 147�8 68�3 48�2 98�3 3,334�6 

Savings institutions ����������������������������������� 802�8 53�6 0�0 4�3 303�5 215�1 69�1 3�4 17�6 136�1 

Bank net income (in millions) ��������������������������� 154,219 19,490 31,399 2,955 43,622 4,794 1,837 1,221 1,175 47,726 

Commercial banks������������������������������������� 143,052 15,960 31,399 2,833 41,063 2,579 1,037 714 1,067 46,399 

Savings institutions ����������������������������������� 

Performance Ratios (%) 

11,167 3,530 0 121 2,558 2,215 800 507 108 1,327 

Yield on earning assets������������������������������������ 3�68 10�19 2�88 4�16 3�98 3�59 3�84 3�08 4�06 3�06 

Cost of funding earning assets ������������������������ 0�42 0�72 0�45 0�55 0�46 0�72 0�53 0�43 0�56 0�26 

Net interest margin ������������������������������������ 3�26 9�47 2�43 3�61 3�52 2�87 3�31 2�65 3�49 2�81 

Noninterest income to assets��������������������������� 1�74 4�49 1�77 0�65 1�33 1�06 1�54 5�10 0�96 1�93 

Noninterest expense to assets������������������������� 2�88 5�91 2�54 2�52 3�03 2�35 2�50 4�81 3�01 2�65 

Loan and lease loss provision to assets���������� 0�22 2�03 0�10 0�10 0�20 0�10 0�47 0�08 0�16 0�14 

Net operating income to assets ����������������������� 1�05 3�37 0�83 1�14 0�90 0�95 1�10 1�90 0�83 1�08 

Pretax return on assets ������������������������������������ 1�55 5�22 1�27 1�36 1�26 1�34 1�82 2�66 1�04 1�62 

Return on assets����������������������������������������������� 1�07 3�35 0�86 1�15 0�91 0�98 1�15 1�92 0�86 1�10 

Return on equity ����������������������������������������������� 9�53 22�96 9�57 10�30 7�65 8�59 12�23 13�98 7�46 9�34 

Net charge-offs to loans and leases���������������� 

Loan and lease loss provision to 

0�69 3�20 0�97 0�14 0�42 0�37 0�80 0�49 0�33 0�49 

net charge-offs���������������������������������������������� 60�58 81�69 27�99 120�51 69�24 41�72 88�77 60�13 86�30 56�82 

Efficiency ratio �������������������������������������������������� 60�51 43�26 64�84 62�75 64�75 62�23 52�18 63�62 71�86 59�09 

% of unprofitable institutions���������������������������� 8�12 0�00 0�00 2�87 9�89 12�76 3�64 10�34 7�12 1�61 

% of institutions with earnings gains���������������� 

Condition Ratios (%) 

54�05 81�25 75�00 48�63 60�73 43�37 49�09 47�04 46�24 64�52 

Earning assets to total assets �������������������������� 

Loss allowance to: 

88�76 92�23 86�82 92�01 89�49 93�71 97�39 91�62 92�03 87�90 

Loans and leases �������������������������������������� 1�72 3�48 2�26 1�44 1�52 1�29 1�26 1�86 1�51 1�43 

Noncurrent loans and leases �������������������� 

Noncurrent assets plus 

65�62 296�22 82�57 132�84 80�06 42�96 75�78 97�02 82�58 34�56 

other real estate owned to assets ���������������� 1�63 0�93 1�07 0�95 1�64 2�14 1�23 0�87 1�44 2�17 

Equity capital ratio�������������������������������������������� 11�16 14�73 9�30 10�97 11�79 11�62 9�51 13�50 11�34 11�52 

Core capital (leverage) ratio ���������������������������� 9�40 13�01 7�89 10�33 10�13 10�91 9�45 13�10 11�26 9�03 

Tier 1 risk-based capital ratio��������������������������� 13�13 14�71 12�68 14�52 12�75 21�40 13�82 29�71 19�36 12�58 

Total risk-based capital ratio ���������������������������� 14�93 16�96 14�77 15�64 14�37 22�52 14�65 30�73 20�53 14�46 

Net loans and leases to deposits��������������������� 69�31 132�84 47�99 74�07 84�89 80�79 80�08 34�19 63�99 60�82 

Net loans to total assets ���������������������������������� 52�69 76�57 34�39 61�72 66�39 60�22 67�72 27�97 53�92 47�90 

Domestic deposits to total assets �������������������� 

Structural Changes 

66�50 54�61 43�93 83�33 77�13 74�38 84�55 81�07 84�26 71�84 

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

Institutions absorbed by mergers ������������� 232 0 0 36 161 8 0 2 15 10 

Failed institutions �������������������������������������� 

PRIOR FULL YEARS 

(The way it was...) 

24 0 0 0 21 0 0 0 3 0 

Number of institutions ������������������������������2012 7,083 19 5 1,537 3,499 659 51 414 826 73 

��������������������������������������2010 7,658 22 4 1,559 4,085 718 72 314 815 69 

������������������������������������� 2008 8,305 26 5 1,559 4,753 839 91 279 709 44 

Total assets (in billions)����������������������������2012 $14,450�7 $600�7 $3,808�4 $239�8 $4,339�4 $628�3 $101�6 $64�9 $145�8 $4,521�8 

��������������������������������������2010 13,318�9 705�4 3,038�1 199�8 4,094�6 789�0 114�3 42�9 132�3 4,202�6 

������������������������������������� 2008 13,841�2 513�0 3,410�1 168�8 5,461�2 997�1 122�2 34�4 94�8 3,039�6 

Return on assets (%) ��������������������������������2012 1�00 3�13 0�80 1�27 0�89 0�87 1�46 1�23 0�86 1�00 

��������������������������������������2010 0�65 1�82 0�72 0�98 0�20 0�68 1�28 1�48 0�70 0�80 

������������������������������������� 2008 0�03 1�70 0�25 1�00 -0�13 -0�48 -0�01 1�43 0�82 -0�09 

Net charge-offs to loans & leases (%) �����2012 1�10 3�69 1�41 0�24 0�75 0�82 1�31 0�45 0�45 0�94 

��������������������������������������2010 2�55 10�83 2�29 0�59 1�90 1�14 2�37 0�64 0�56 1�87 

������������������������������������� 2008 

Noncurrent assets plus 

1�29 5�94 1�44 0�41 1�14 0�86 1�74 0�35 0�35 0�74 

OREO to assets (%)������������������������������2012 2�20 1�11 1�39 1�11 2�21 2�70 0�88 1�04 1�67 3�05 

��������������������������������������2010 3�11 1�90 2�38 1�62 3�71 2�88 1�22 0�81 1�67 3�49 

������������������������������������� 2008 1�91 2�08 1�59 1�17 2�34 2�55 1�31 0�35 1�05 1�35 

Equity capital ratio (%)������������������������������2012 11�17 14�67 8�93 11�14 11�93 11�09 9�57 14�27 11�47 11�84 

��������������������������������������2010 11�15 14�96 8�93 10�86 11�40 10�05 11�00 16�31 11�01 12�04 

������������������������������������� 2008 9�33 20�47 7�01 10�99 10�04 7�45 9�85 18�63 11�28 9�11 

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

Note: Blue font identifies data that are also presented in the prior years’ data at bottom of table� 
FDIC QUARTERLY 9 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

TABLE IV-A. Full Year 2013, All FDIC-Insured Institutions 

FULL YEAR 

(The way it is...) 

Number of institutions reporting����������������������������� 

All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less Than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion 

to 

$10 Billion 

Greater 

Than 

$10 Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

6,812 2,056 4,090 559 107 840 869 1,470 1,659 1,431 543 

Commercial banks������������������������������������������� 5,876 1,814 3,522 450 90 461 784 1,219 1,586 1,334 492 

Savings institutions ����������������������������������������� 936 242 568 109 17 379 85 251 73 97 51 

Total assets (in billions)������������������������������������������ $14,722�7 $119�7 $1,246�1 $1,468�7 $11,888�2 $2,927�4 $2,998�8 $3,377�7 $3,214�1 $870�0 $1,334�6 

Commercial banks������������������������������������������� 13,670�2 106�0 1,046�4 1,188�3 11,329�5 2,470�6 2,913�6 3,267�1 3,153�8 766�9 1,098�2 

Savings institutions ����������������������������������������� 1,052�5 13�7 199�7 280�4 558�6 456�8 85�3 110�6 60�3 103�1 236�4 

Total deposits (in billions)��������������������������������������� 11,192�1 101�7 1,042�7 1,147�6 8,900�0 2,179�6 2,308�7 2,464�2 2,482�0 726�2 1,031�3 

Commercial banks������������������������������������������� 10,389�3 90�8 883�1 937�5 8,477�9 1,849�5 2,244�5 2,379�8 2,433�6 641�1 840�9 

Savings institutions ����������������������������������������� 802�8 10�9 159�6 210�1 422�1 330�1 64�3 84�4 48�5 85�1 190�4 

Bank net income (in millions) ��������������������������������� 154,219 853 11,218 16,792 125,356 25,112 29,637 31,923 38,681 9,299 19,567 

Commercial banks������������������������������������������� 143,052 797 9,511 14,116 118,629 22,705 29,061 30,544 38,183 7,969 14,590 

Savings institutions ����������������������������������������� 

Performance Ratios (%) 

11,167 56 1,707 2,676 6,727 2,407 576 1,378 499 1,330 4,977 

Yield on earning assets������������������������������������������ 3�68 4�17 4�23 4�33 3�53 3�97 3�66 2�91 3�95 3�97 4�22 

Cost of funding earning assets ������������������������������ 0�42 0�56 0�58 0�52 0�39 0�46 0�36 0�36 0�48 0�39 0�50 

Net interest margin������������������������������������������ 3�26 3�62 3�66 3�81 3�14 3�51 3�30 2�54 3�47 3�57 3�72 

Noninterest income to assets��������������������������������� 1�74 1�11 1�13 1�31 1�86 1�58 1�77 1�92 1�62 1�42 2�05 

Noninterest expense to assets������������������������������� 2�88 3�47 3�19 3�15 2�81 2�98 3�02 2�77 2�68 3�12 2�91 

Loan and lease loss provision to assets���������������� 0�22 0�14 0�18 0�19 0�23 0�38 0�20 0�06 0�25 0�14 0�35 

Net operating income to assets ����������������������������� 1�05 0�69 0�89 1�15 1�05 0�86 0�96 0�93 1�23 1�09 1�50 

Pretax return on assets ������������������������������������������ 1�55 0�81 1�15 1�46 1�60 1�37 1�45 1�34 1�76 1�42 2�28 

Return on assets����������������������������������������������������� 1�07 0�71 0�91 1�17 1�07 0�88 0�98 0�95 1�24 1�08 1�53 

Return on equity ����������������������������������������������������� 9�53 5�99 8�40 9�82 9�65 7�23 8�07 10�32 11�54 10�03 11�75 

Net charge-offs to loans and leases���������������������� 

Loan and lease loss provision to 

0�69 0�34 0�36 0�40 0�78 0�93 0�66 0�48 0�87 0�32 0�57 

net charge-offs���������������������������������������������������� 60�58 75�78 79�98 72�34 58�39 76�30 53�52 27�62 53�57 72�90 101�04 

Efficiency ratio �������������������������������������������������������� 60�51 78�56 70�73 64�81 58�75 58�65 64�07 66�15 55�78 66�19 52�48 

% of unprofitable institutions���������������������������������� 8�12 13�08 6�53 2�50 2�80 10�71 14�15 9�18 4�40 5�31 10�31 

% of institutions with earnings gains���������������������� 

Condition Ratios (%) 

54�05 48�49 55�53 62�08 62�62 50�12 62�26 50�88 51�66 54�58 61�51 

Earning assets to total assets ��������������������������������� 

Loss allowance to: 

88�76 91�40 92�10 91�13 88�09 89�25 87�09 87�72 88�60 91�44 92�68 

Loans and leases ��������������������������������������������� 1�72 1�67 1�60 1�56 1�76 1�71 1�59 1�83 1�94 1�51 1�52 

Noncurrent loans and leases ��������������������������� 

Noncurrent assets plus 

65�62 91�21 88�44 70�93 62�85 92�92 46�87 67�31 57�88 79�99 117�79 

other real estate owned to assets ����������������������� 1�63 1�75 1�81 1�89 1�57 1�12 2�23 1�47 1�99 1�58 0�92 

Equity capital ratio��������������������������������������������������� 11�16 11�69 10�78 11�80 11�12 12�02 12�19 9�66 10�46 10�87 12�64 

Core capital (leverage) ratio ����������������������������������� 9�40 11�59 10�63 10�61 9�10 9�83 9�48 8�36 8�97 9�97 11�62 

Tier 1 risk-based capital ratio���������������������������������� 13�13 19�06 15�73 14�88 12�60 14�07 12�67 12�25 12�20 14�36 15�79 

Total risk-based capital ratio ����������������������������������� 14�93 20�16 16�90 16�07 14�54 15�74 14�41 14�20 14�35 15�67 17�10 

Net loans and leases to deposits���������������������������� 69�31 65�66 74�89 82�42 67�01 71�14 74�55 61�24 67�00 71�50 77�02 

Net loans to total assets ����������������������������������������� 52�69 55�78 62�67 64�40 50�16 52�97 57�39 44�68 51�74 59�68 59�52 

Domestic deposits to total assets ��������������������������� 

Structural Changes 

66�50 84�95 83�62 77�74 63�13 65�70 73�62 61�09 57�80 83�09 76�13 

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

Institutions absorbed by mergers ������������������� 232 80 130 20 2 29 20 42 50 56 35 

Failed institutions �������������������������������������������� 

PRIOR FULL YEARS 

(The way it was...) 

24 13 10 1 0 1 9 4 1 4 5 

Number of institutions ������������������������������������2012 7,083 2,204 4,217 555 107 873 904 1,515 1,716 1,490 585 

��������������������������������������������2010 7,658 2,625 4,367 559 107 949 1,022 1,602 1,825 1,601 659 

������������������������������������������� 2008 8,305 3,132 4,498 561 114 1,015 1,180 1,705 1,935 1,700 770 

Total assets (in billions)����������������������������������2012 $14,450�7 $128�1 $1,275�0 $1,454�8 $11,592�7 $2,896�0 $3,056�1 $3,298�5 $3,068�7 $870�4 $1,260�9 

��������������������������������������������2010 13,318�9 148�6 1,291�7 1,429�6 10,449�0 2,694�8 2,929�8 2,950�1 1,686�5 789�0 2,268�7 

������������������������������������������� 2008 13,841�2 170�9 1,354�7 1,489�8 10,825�8 2,594�2 3,745�9 3,264�3 1,057�2 780�9 2,398�7 

Return on assets (%) ��������������������������������������2012 1�00 0�68 0�80 1�13 1�01 0�96 0�77 0�90 1�10 1�01 1�72 

��������������������������������������������2010 0�65 0�27 0�26 0�19 0�76 0�76 0�34 0�60 0�84 0�68 0�81 

������������������������������������������� 2008 0�03 0�25 0�24 -0�30 0�05 0�25 -0�14 0�29 0�56 0�51 -0�63 

Net charge-offs to loans & leases (%) �����������2012 1�10 0�43 0�64 0�73 1�22 1�24 1�19 0�85 1�37 0�55 0�84 

��������������������������������������������2010 2�55 0�80 1�12 1�80 2�93 3�57 2�43 2�03 2�88 1�27 2�29 

������������������������������������������� 2008 

Noncurrent assets plus 

1�29 0�46 0�67 1�10 1�45 1�44 1�01 1�24 1�60 0�68 1�74 

OREO to assets (%)������������������������������������2012 2�20 2�10 2�37 2�46 2�15 1�46 3�23 2�00 2�45 2�06 1�38 

��������������������������������������������2010 3�11 2�38 3�44 3�57 3�01 2�14 3�93 2�98 4�24 3�17 2�51 

������������������������������������������� 2008 1�91 1�66 2�16 2�46 1�80 1�20 2�02 1�93 2�28 1�80 2�33 

Equity capital ratio (%)������������������������������������2012 11�17 12�00 10�90 11�77 11�11 12�18 12�03 9�09 10�86 10�70 13�23 

��������������������������������������������2010 11�15 11�70 10�15 11�18 11�26 12�58 11�59 8�71 11�33 10�54 12�11 

������������������������������������������� 2008 9�33 12�87 10�00 10�65 9�01 11�14 9�56 8�07 9�49 9�95 8�45 

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

Note: Blue font identifies data that are also presented in the prior years’ data at bottom of table� 
FDIC QUARTERLY 10 2014, VOLUME 8, NO. 2 

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

March 31, 2014 All Insured 

Institutions 

Asset Concentration Groups* 

Credit 

Card 

Banks 

International 

Banks 

Agricultural 

Banks 

Commercial 

Lenders 

Mortgage 

Lenders 

Consumer 

Lenders 

Other 

Specialized 

<$1 Billion 

All Other 

<$1 

Billion 

All Other 

>$1 

Billion 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate ��������������������������������������� 1�10 0�15 1�45 0�87 0�78 0�95 0�73 1�51 1�50 1�63 

Construction and development��������������������������������� 0�70 0�00 0�80 0�88 0�65 0�72 1�14 1�11 1�32 0�79 

Nonfarm nonresidential��������������������������������������������� 0�50 0�00 0�38 0�81 0�50 0�52 1�46 1�08 1�29 0�40 

Multifamily residential real estate ����������������������������� 0�28 0�00 0�14 0�28 0�28 0�31 0�02 0�73 0�70 0�41 

Home equity loans����������������������������������������������������� 0�71 0�62 0�94 0�62 0�59 0�70 0�47 1�03 0�66 0�74 

Other 1-4 family residential��������������������������������������� 1�80 0�14 2�33 1�37 1�32 1�06 0�75 2�06 1�79 2�47 

Commercial and industrial loans ������������������������������������� 0�34 0�95 0�34 1�03 0�28 0�53 0�32 1�63 1�12 0�35 

Loans to individuals���������������������������������������������������������� 1�26 1�11 1�36 1�43 1�13 1�36 0�76 1�52 1�85 1�64 

Credit card loans ������������������������������������������������������� 1�15 1�10 1�27 1�14 1�19 1�82 0�56 1�15 1�32 1�28 

Other loans to individuals ����������������������������������������� 1�37 1�22 1�52 1�45 1�12 1�00 0�82 1�55 1�86 1�70 

All other loans and leases (including farm) ��������������������� 0�26 0�28 0�18 0�94 0�25 0�15 0�10 0�58 0�42 0�28 

Total loans and leases������������������������������������������������������ 

Percent of Loans Noncurrent** 

0�88 1�09 0�90 0�93 0�65 0�91 0�71 1�47 1�42 1�15 

All real estate loans ���������������������������������������������������������� 4�16 0�60 6�04 1�37 2�52 2�91 4�14 2�21 2�25 7�23 

Construction and development ��������������������������������� 3�43 0�00 1�29 2�78 3�65 2�55 30�60 4�75 5�00 2�64 

Nonfarm nonresidential��������������������������������������������� 1�78 4�11 1�20 1�99 1�74 1�51 11�89 2�38 2�47 1�88 

Multifamily residential real estate ����������������������������� 0�74 0�00 0�47 0�69 0�81 0�67 3�19 1�03 2�18 0�67 

Home equity loans����������������������������������������������������� 2�70 0�00 3�64 1�07 1�55 1�96 2�84 0�93 0�76 3�68 

Other 1-4 family residential��������������������������������������� 6�85 0�50 10�21 1�30 3�92 3�28 3�26 1�88 2�13 10�92 

Commercial and industrial loans ������������������������������������� 0�60 0�90 0�54 1�51 0�68 0�80 0�81 1�58 1�72 0�39 

Loans to individuals���������������������������������������������������������� 1�01 1�17 1�12 0�58 0�91 1�19 0�81 0�54 0�91 0�83 

Credit card loans ������������������������������������������������������� 1�21 1�18 1�22 0�29 1�38 1�75 1�18 0�70 0�71 1�26 

Other loans to individuals ����������������������������������������� 0�81 0�86 0�93 0�61 0�84 0�76 0�69 0�53 0�91 0�75 

All other loans and leases (including farm) ��������������������� 0�28 0�17 0�33 0�43 0�38 0�14 0�09 0�65 0�49 0�15 

Total loans and leases������������������������������������������������������ 

Percent of Loans Charged-Off (net, YTD) 

2�46 1�14 2�62 1�14 1�81 2�60 1�56 1�84 1�99 3�82 

All real estate loans ���������������������������������������������������������� 0�24 0�07 0�35 0�05 0�21 0�22 0�43 0�05 0�15 0�27 

Construction and development��������������������������������� 0�06 0�00 -0�21 -0�30 0�20 0�30 0�15 0�33 0�05 -0�49 

Nonfarm nonresidential��������������������������������������������� 0�10 0�00 -0�03 0�09 0�14 0�05 -0�21 0�08 0�21 -0�01 

Multifamily residential real estate ����������������������������� 0�01 0�00 0�01 0�16 0�02 0�02 -0�21 -1�97 0�09 -0�03 

Home equity loans����������������������������������������������������� 0�72 0�00 0�83 -0�12 0�47 0�56 1�24 0�11 0�21 0�96 

Other 1-4 family residential��������������������������������������� 0�25 0�06 0�35 0�10 0�28 0�22 0�19 0�09 0�15 0�22 

Commercial and industrial loans ������������������������������������� 0�23 2�42 0�19 0�10 0�23 0�04 0�08 0�02 0�22 0�09 

Loans to individuals���������������������������������������������������������� 2�05 3�11 2�73 0�39 0�98 0�92 0�87 0�35 0�25 1�36 

Credit card loans ������������������������������������������������������� 3�26 3�18 3�48 1�11 3�63 1�25 2�16 1�72 1�52 3�64 

Other loans to individuals ����������������������������������������� 0�83 1�56 1�42 0�33 0�58 0�63 0�47 0�24 0�23 0�92 

All other loans and leases (including farm) ��������������������� 0�08 0�00 0�07 0�00 0�15 0�10 0�18 0�57 0�00 0�04 

Total loans and leases������������������������������������������������������ 

Loans Outstanding (in billions) 

0�52 3�03 0�72 0�06 0�27 0�23 0�72 0�11 0�17 0�34 

All real estate loans ���������������������������������������������������������� $4,075�5 $0�2 $476�6 $90�9 $2,060�7 $293�5 $25�5 $13�9 $59�2 $1,055�0 

Construction and development��������������������������������� 214�3 0�0 6�3 4�5 155�8 6�9 0�3 0�9 3�1 36�4 

Nonfarm nonresidential��������������������������������������������� 1,117�7 0�0 37�1 24�8 802�5 28�2 1�8 5�1 14�4 203�8 

Multifamily residential real estate ����������������������������� 271�7 0�0 49�5 2�6 175�5 9�6 0�2 0�4 1�6 32�4 

Home equity loans����������������������������������������������������� 503�5 0�0 88�2 1�7 204�9 20�1 6�7 0�5 2�5 179�0 

Other 1-4 family residential��������������������������������������� 1,822�3 0�2 237�3 23�4 688�1 227�3 16�4 6�2 33�4 590�0 

Commercial and industrial loans ������������������������������������� 1,614�3 35�9 274�3 18�8 793�2 16�4 6�2 2�6 6�5 460�3 

Loans to individuals���������������������������������������������������������� 1,327�0 412�9 249�3 6�0 274�2 13�7 77�6 2�4 5�8 285�2 

Credit card loans ������������������������������������������������������� 658�4 396�6 157�1 0�4 35�4 5�9 18�3 0�2 0�1 44�3 

Other loans to individuals ����������������������������������������� 668�6 16�3 92�2 5�5 238�7 7�7 59�2 2�2 5�7 240�9 

All other loans and leases (including farm) ��������������������� 916�0 3�6 300�0 33�9 235�8 16�3 2�0 1�2 4�9 318�2 

Total loans and leases (plus unearned income)�������������� 

Memo: Other Real Estate Owned (in millions) 

7,932�8 452�7 1,300�3 149�6 3,363�9 339�8 111�3 20�1 76�4 2,118�7 

All other real estate owned����������������������������������������������� 29,366�6 1�2 3,076�8 612�5 16,733�6 1,345�9 148�2 232�0 670�4 6,545�9 

Construction and development��������������������������������� 7,934�9 0�0 2�1 216�8 6,252�3 251�6 23�1 98�4 206�8 883�8 

Nonfarm nonresidential��������������������������������������������� 6,695�0 0�0 61�4 229�3 5,029�4 137�0 42�2 81�0 204�7 910�1 

Multifamily residential real estate ����������������������������� 696�3 0�0 6�0 21�7 522�7 18�2 0�4 5�1 17�3 104�9 

1-4 family residential ������������������������������������������������� 6,573�3 0�2 739�3 101�5 3,611�3 489�2 72�7 45�5 229�7 1,283�8 

Farmland�������������������������������������������������������������������� 283�1 0�0 0�0 42�7 212�4 2�3 0�9 2�0 12�0 10�8 

GNMA properties������������������������������������������������������� 7,126�1 0�0 2,213�0 0�4 1,105�7 447�5 8�9 0�0 0�0 3,350�6 

* 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� 
FDIC QUARTERLY 11 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

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

March 31, 2014 All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less Than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion 

to 

$10 Billion 

Greater 

Than 

$10 Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate ������������������������������ 1�10 1�41 0�93 0�75 1�23 0�81 1�25 1�07 1�59 0�99 0�55 

Construction and development������������������������ 0�70 0�91 0�82 0�66 0�66 0�88 0�86 0�59 0�61 0�60 0�50 

Nonfarm nonresidential������������������������������������ 0�50 1�19 0�73 0�49 0�39 0�59 0�48 0�60 0�37 0�58 0�34 

Multifamily residential real estate �������������������� 0�28 0�65 0�49 0�23 0�25 0�20 0�47 0�32 0�25 0�37 0�22 

Home equity loans�������������������������������������������� 0�71 0�93 0�62 0�54 0�73 0�49 0�82 0�80 0�72 0�50 0�51 

Other 1-4 family residential������������������������������ 1�80 1�88 1�32 1�29 1�96 1�23 1�86 1�67 2�75 1�76 0�83 

Commercial and industrial loans ���������������������������� 0�34 1�38 0�79 0�43 0�29 0�40 0�37 0�39 0�24 0�43 0�26 

Loans to individuals������������������������������������������������� 1�26 1�85 1�51 1�32 1�25 1�09 1�81 1�14 1�36 0�83 0�99 

Credit card loans ���������������������������������������������� 1�15 1�81 1�35 1�60 1�13 0�97 1�61 0�98 1�31 0�54 1�25 

Other loans to individuals �������������������������������� 1�37 1�85 1�52 1�19 1�37 1�42 1�91 1�20 1�42 0�98 0�78 

All other loans and leases (including farm) ������������ 0�26 0�95 0�66 0�37 0�23 0�37 0�17 0�34 0�16 0�41 0�44 

Total loans and leases��������������������������������������������� 

Percent of Loans Noncurrent** 

0�88 1�38 0�92 0�72 0�89 0�77 1�00 0�83 1�06 0�82 0�57 

All real estate loans ������������������������������������������������� 4�16 2�07 1�85 2�51 5�13 2�69 5�46 4�52 5�77 2�40 1�74 

Construction and development������������������������ 3�43 4�16 4�02 3�76 2�97 4�79 3�92 3�45 2�87 2�13 2�99 

Nonfarm nonresidential������������������������������������ 1�78 2�46 1�83 1�94 1�66 2�05 1�70 2�01 1�73 1�55 1�41 

Multifamily residential real estate �������������������� 0�74 2�33 1�17 0�86 0�60 0�52 0�82 0�91 0�96 1�29 0�52 

Home equity loans�������������������������������������������� 2�70 1�20 0�98 1�16 2�98 2�04 3�48 2�82 2�75 1�90 1�04 

Other 1-4 family residential������������������������������ 6�85 1�98 1�74 3�70 8�28 3�71 8�45 7�52 9�95 3�77 2�23 

Commercial and industrial loans ���������������������������� 0�60 1�83 1�52 1�05 0�46 0�77 0�47 0�65 0�54 0�73 0�53 

Loans to individuals������������������������������������������������� 1�01 0�83 1�23 0�77 1�01 1�00 1�07 0�85 1�21 0�68 0�86 

Credit card loans ���������������������������������������������� 1�21 0�93 1�12 1�57 1�20 1�05 1�55 1�16 1�28 1�16 1�32 

Other loans to individuals �������������������������������� 0�81 0�83 1�24 0�42 0�81 0�87 0�84 0�75 1�13 0�44 0�49 

All other loans and leases (including farm) ������������ 0�28 0�65 0�50 0�48 0�25 0�37 0�20 0�15 0�36 0�33 0�49 

Total loans and leases��������������������������������������������� 

Percent of Loans Charged-Off (net, YTD) 

2�46 1�80 1�71 2�05 2�63 1�78 3�14 2�58 3�11 1�75 1�20 

All real estate loans ������������������������������������������������� 0�24 0�16 0�14 0�15 0�28 0�21 0�33 0�28 0�26 0�10 0�06 

Construction and development������������������������ 0�06 0�45 0�16 0�10 -0�02 0�48 0�16 0�03 -0�35 -0�01 -0�20 

Nonfarm nonresidential������������������������������������ 0�10 0�21 0�13 0�14 0�07 0�14 0�15 0�15 0�00 0�04 0�06 

Multifamily residential real estate �������������������� 0�01 -0�06 0�10 -0�01 0�00 -0�02 0�01 0�05 -0�09 0�10 0�01 

Home equity loans�������������������������������������������� 0�72 0�28 0�17 0�28 0�80 0�43 1�00 0�69 0�82 0�61 0�15 

Other 1-4 family residential������������������������������ 0�25 0�16 0�16 0�21 0�28 0�25 0�27 0�28 0�32 0�13 0�09 

Commercial and industrial loans ���������������������������� 0�23 0�22 0�29 0�18 0�23 0�37 0�14 0�27 0�14 0�13 0�35 

Loans to individuals������������������������������������������������� 2�05 0�46 0�68 1�57 2�12 2�40 1�87 1�25 2�63 1�09 1�76 

Credit card loans ���������������������������������������������� 3�26 2�76 3�96 3�74 3�24 2�92 3�98 3�10 3�63 2�04 3�32 

Other loans to individuals �������������������������������� 0�83 0�44 0�46 0�58 0�87 0�95 0�81 0�63 1�32 0�60 0�47 

All other loans and leases (including farm) ������������ 0�08 0�00 0�11 0�11 0�08 0�08 0�04 0�15 0�04 0�12 0�09 

Total loans and leases��������������������������������������������� 

Loans Outstanding (in billions) 

0�52 0�18 0�18 0�26 0�62 0�75 0�47 0�38 0�61 0�21 0�50 

All real estate loans ������������������������������������������������� $4,075�5 $45�9 $605�8 $699�6 $2,724�2 $820�7 $918�3 $788�7 $807�9 $332�6 $407�3 

Construction and development������������������������ 214�3 2�7 49�8 53�7 108�1 40�3 48�2 34�0 32�0 41�5 18�4 

Nonfarm nonresidential������������������������������������ 1,117�7 12�7 241�3 289�3 574�3 256�0 231�1 184�8 166�4 130�9 148�4 

Multifamily residential real estate �������������������� 271�7 1�4 31�6 60�6 178�1 94�9 33�3 74�2 22�9 11�4 34�9 

Home equity loans�������������������������������������������� 503�5 1�2 27�6 44�8 429�9 90�3 131�8 127�1 107�3 18�9 28�2 

Other 1-4 family residential������������������������������ 1,822�3 20�5 214�7 234�8 1,352�3 335�2 463�4 348�6 390�6 116�6 167�9 

Commercial and industrial loans ���������������������������� 1,614�3 8�0 103�8 161�2 1,341�3 248�4 388�2 333�9 342�3 113�7 187�8 

Loans to individuals������������������������������������������������� 1,327�0 4�1 34�6 67�4 1,220�9 376�2 235�8 196�7 288�2 51�9 178�1 

Credit card loans ���������������������������������������������� 658�4 0�0 2�2 20�7 635�5 274�4 76�6 48�0 161�6 17�5 80�2 

Other loans to individuals �������������������������������� 668�6 4�0 32�4 46�7 585�4 101�8 159�2 148�7 126�6 34�4 97�9 

All other loans and leases (including farm) ������������ 916�0 7�6 42�6 48�4 817�4 144�7 204�1 223�4 261�3 32�8 49�7 

Total loans and leases (plus unearned income)����� 

Memo: Other Real Estate Owned (in millions) 

7,932�8 65�6 786�8 976�6 6,103�8 1,589�9 1,746�4 1,542�8 1,699�6 531�0 823�0 

All other real estate owned�������������������������������������� 29,366�6 835�5 7,699�5 6,216�4 14,615�2 3,470�7 6,785�7 7,357�9 6,575�6 3,467�4 1,709�3 

Construction and development������������������������ 7,934�9 280�4 3,455�0 2,429�4 1,770�1 723�7 2,266�3 1,098�5 1,636�9 1,514�8 694�6 

Nonfarm nonresidential������������������������������������ 6,695�0 287�7 2,539�3 1,938�3 1,929�7 969�0 1,374�4 1,408�0 1,305�4 1,094�2 544�0 

Multifamily residential real estate �������������������� 696�3 32�5 213�9 176�5 273�5 200�8 98�4 144�9 139�7 77�9 34�6 

1-4 family residential ���������������������������������������� 6,573�3 220�2 1,339�3 1,263�7 3,750�1 1,279�8 1,666�0 1,668�5 946�6 617�1 395�2 

Farmland����������������������������������������������������������� 283�1 14�8 140�5 97�0 30�9 20�0 72�8 48�3 46�3 78�0 17�7 

GNMA properties���������������������������������������������� 7,126�1 0�0 11�6 311�5 6,803�0 276�4 1,307�8 2,989�8 2,443�7 85�4 23�0 

* 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� 
FDIC QUARTERLY 12 2014, VOLUME 8, NO. 2 

 

 

 

 

 

 

 

 

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

(dollar figures in millions; 

notional amounts unless otherwise indicated) 

1st 4th 3rd 2nd 1st % Change 

Quarter Quarter Quarter Quarter Quarter 13Q1-

2014 2013 2013 2013 2013 14Q1 

Asset Size Distribution 

Less $100 $1 Billion Greater 

Than $100 Million to to $10 Than 

Million $1 Billion Billion $10 Billion 

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives����������������� 1,398 1,390 1,424 1,412 1,400 -0�1 72 855 372 99 

Total assets of institutions reporting derivatives ���������� $13,233,953 $13,068,354 $12,906,608 $12,690,786 $12,689,035 4�3 $5,355 $357,844 $1,086,216 $11,784,538 

Total deposits of institutions reporting derivatives������� 9,974,698 9,858,640 9,682,692 9,410,509 9,427,713 5�8 4,583 297,053 867,615 8,805,447 

Total derivatives������������������������������������������������������������� 

Derivative Contracts by Underlying Risk Exposure 

233,457,475 238,755,603 243,290,586 236,542,159 232,583,465 0�4 190 20,638 91,148 233,345,500 

Interest rate�������������������������������������������������������������������� 185,830,083 194,555,379 195,710,388 188,190,450 184,797,423 0�6 189 18,787 83,240 185,727,867 

Foreign exchange*��������������������������������������������������������� 32,994,577 29,668,744 31,200,455 31,471,711 30,374,632 8�6 0 1,680 6,852 32,986,044 

Equity ����������������������������������������������������������������������������� 2,151,169 2,077,309 2,191,416 2,130,468 2,064,904 4�2 0 73 415 2,150,681 

Commodity & other (excluding credit derivatives)�������� 1,263,060 1,208,874 1,339,676 1,367,298 1,445,238 -12�6 0 5 220 1,262,835 

Credit������������������������������������������������������������������������������ 11,218,586 11,245,297 12,848,651 13,382,231 13,901,267 -19�3 0 93 420 11,218,072 

Total�������������������������������������������������������������������������������� 

Derivative Contracts by Transaction Type 

233,457,475 238,755,603 243,290,586 236,542,159 232,583,465 0�4 190 20,638 91,148 233,345,500 

Swaps ���������������������������������������������������������������������������� 139,451,119 150,608,677 150,075,780 141,036,599 137,818,904 1�2 47 7,389 49,558 139,394,125 

Futures & forwards �������������������������������������������������������� 44,424,266 42,022,121 42,067,188 43,970,239 46,024,148 -3�5 44 6,926 22,456 44,394,840 

Purchased options��������������������������������������������������������� 17,909,006 16,870,263 17,637,787 17,680,639 16,644,988 7�6 14 815 4,785 17,903,392 

Written options��������������������������������������������������������������� 17,629,569 16,929,743 17,784,103 17,800,582 17,161,532 2�7 85 5,399 12,705 17,611,380 

Total�������������������������������������������������������������������������������� 

Fair Value of Derivative Contracts 

219,413,960 226,430,803 227,564,857 220,488,059 217,649,573 0�8 190 20,528 89,504 219,303,737 

Interest rate contracts���������������������������������������������������� 72,730 71,270 64,832 60,694 67,678 7�5 1 40 56 72,633 

Foreign exchange contracts������������������������������������������ 5,563 5,991 -10,390 -4,673 -6,685 N/M 0 0 -6 5,569 

Equity contracts������������������������������������������������������������� 1,553 32 -1,928 1,396 -2,588 N/M 0 9 8 1,537 

Commodity & other (excluding credit derivatives)�������� -893 1,350 1,181 1,298 -2,544 N/M 0 1 -4 -890 

Credit derivatives as guarantor������������������������������������� 80,758 74,870 27,246 -8,729 -20,833 N/M 0 0 0 80,758 

Credit derivatives as beneficiary����������������������������������� 

Derivative Contracts by Maturity** 

-77,327 -71,252 -22,672 13,888 25,373 N/M 0 0 -24 -77,303 

Interest rate contracts ����������������������������� < 1 year 77,936,405 77,933,066 91,852,227 88,198,011 86,869,690 -10�3 41 5,237 17,252 77,913,874 

������������������������������������������ 1-5 years 37,667,856 44,472,870 32,988,175 30,694,796 29,322,277 28�5 25 3,423 23,953 37,640,454 

������������������������������������������ > 5 years 24,282,231 24,885,723 21,753,468 20,836,812 20,275,485 19�8 38 4,104 23,790 24,254,299 

Foreign exchange contracts ������������������� < 1 year 20,099,306 18,349,410 18,975,694 19,247,580 18,646,641 7�8 0 1,249 4,232 20,093,826 

������������������������������������������ 1-5 years 2,299,021 2,325,624 2,870,026 2,737,466 2,758,223 -16�6 0 0 93 2,298,928 

������������������������������������������ > 5 years 974,381 1,029,302 1,503,977 1,456,229 1,427,702 -31�8 0 0 0 974,381 

Equity contracts��������������������������������������� < 1 year 673,720 661,448 706,604 660,945 648,510 3�9 0 3 37 673,679 

������������������������������������������ 1-5 years 305,141 292,486 311,790 271,219 255,625 19�4 0 12 112 305,017 

������������������������������������������ > 5 years 89,804 135,907 88,294 80,891 74,515 20�5 0 23 18 89,763 

Commodity & other contracts ����������������� < 1 year 379,469 338,091 375,292 424,508 479,201 -20�8 0 1 137 379,331 

������������������������������������������ 1-5 years 140,984 163,812 175,069 163,093 179,141 -21�3 0 0 8 140,976 

������������������������������������������ > 5 years 

Risk-Based Capital: Credit Equivalent Amount 

18,960 5,903 16,142 15,300 21,505 -11�8 0 0 0 18,960 

Total current exposure to tier 1 capital (%) ������������������� 23�5 26�1 27�1 30�5 32�6 0�1 0�3 0�6 26�7 

Total potential future exposure to tier 1 capital (%)������ 

Total exposure (credit equivalent amount) 

56�7 58�7 62�4 62�8 62�3 0�1 0�3 0�5 64�5 

to tier 1 capital (%) ����������������������������������������������������� 80�3 84�8 89�5 93�3 94�9 0�2 0�6 1�1 91�3 

Credit losses on derivatives***���������������������������������� 

HELD FOR TRADING 

12�9 264�2 180�7 145�0 84�3 -84�7 0�0 0�3 0�1 12�5 

Number of institutions reporting derivatives����������������� 245 253 242 242 239 2�5 8 92 81 64 

Total assets of institutions reporting derivatives ���������� 10,658,787 10,573,821 10,414,762 10,169,674 10,137,664 5�1 641 45,186 282,175 10,330,786 

Total deposits of institutions reporting derivatives������� 

Derivative Contracts by Underlying Risk Exposure 

8,023,514 7,985,223 7,805,731 7,533,192 7,537,825 6�4 545 37,451 223,522 7,761,996 

Interest rate�������������������������������������������������������������������� 182,694,013 190,617,697 191,932,848 184,197,615 180,965,139 1�0 25 2,320 21,682 182,669,985 

Foreign exchange���������������������������������������������������������� 29,320,112 27,745,453 27,518,482 28,043,313 28,471,504 3�0 0 0 2,700 29,317,411 

Equity ����������������������������������������������������������������������������� 2,135,205 2,060,585 2,175,912 2,116,168 2,051,707 4�1 0 0 1 2,135,204 

Commodity & other�������������������������������������������������������� 1,256,235 1,200,547 1,330,681 1,356,542 1,428,759 -12�1 0 3 123 1,256,108 

Total�������������������������������������������������������������������������������� 

Trading Revenues: Cash & Derivative Instruments 

215,405,564 221,624,282 222,957,923 215,713,638 212,917,110 1�2 26 2,323 24,507 215,378,708 

Interest rate�������������������������������������������������������������������� 1,775 475 3,085 2,762 2,216 -19�9 0 0 27 1,748 

Foreign exchange���������������������������������������������������������� 2,201 1,532 499 3,139 3,190 -31�0 0 0 2 2,199 

Equity ����������������������������������������������������������������������������� 607 470 230 922 830 -26�9 0 0 4 603 

Commodity & other (including credit derivatives) �������� 1,531 483 656 452 1,253 22�2 0 0 0 1,532 

Total trading revenues��������������������������������������������������� 

Share of Revenue 

6,114 2,960 4,469 7,275 7,489 -18�4 0 0 32 6,082 

Trading revenues to gross revenues (%) ���������������������� 5�4 2�6 3�9 6�0 6�2 0�0 0�0 1�0 5�5 

Trading revenues to net operating revenues (%)���������� 

HELD FOR PURPOSES OTHER THAN TRADING 

26�5 11�5 20�8 31�2 29�0 0�0 0�3 7�9 27�0 

Number of institutions reporting derivatives����������������� 1,280 1,254 1,287 1,272 1,264 1�3 64 785 340 91 

Total assets of institutions reporting derivatives ���������� 12,928,122 12,757,901 12,611,978 12,299,488 12,355,856 4�6 4,715 328,413 993,839 11,601,154 

Total deposits of institutions reporting derivatives������� 

Derivative Contracts by Underlying 

Risk Exposure 

9,732,773 9,614,299 9,449,509 9,103,518 9,168,313 6�2 4,038 272,530 793,395 8,662,811 

Interest rate�������������������������������������������������������������������� 3,136,071 3,937,682 3,777,540 3,992,835 3,832,284 -18�2 164 16,467 61,558 3,057,882 

Foreign exchange���������������������������������������������������������� 849,536 843,789 804,895 756,530 870,503 -2�4 0 1,664 2,929 844,944 

Equity ����������������������������������������������������������������������������� 15,964 16,724 15,504 14,300 13,197 21�0 0 73 414 15,477 

Commodity & other�������������������������������������������������������� 6,825 8,327 8,995 10,756 16,479 -58�6 0 2 97 6,727 

Total notional amount ���������������������������������������������������� 4,008,396 4,806,521 4,606,934 4,774,421 4,732,462 -15�3 164 18,205 64,997 3,925,029 

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

* Include 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� 

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

*** The reporting of credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and to those banks filing the FFIEC 041 report form that have $300 million or more 

in total assets� 
FDIC QUARTERLY 13 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

 

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

(dollar figures in millions) 

1st 4th 3rd 2nd 1st % Change 

Quarter Quarter Quarter Quarter Quarter 13Q1-

2014 2013 2013 2013 2013 14Q1 

Asset Size Distribution 

Less Than $100 $1 Billion Greater 

$100 Million to to $10 Than $10 

Million $1 Billion Billion Billion 

Assets Securitized and Sold with Servicing Retained or with 

Recourse or Other Seller-Provided Credit Enhancements 

Number of institutions reporting securitization activities ����������������������������������������� 

Outstanding Principal Balance by Asset Type 

79 83 82 88 96 -17�7 1 30 17 31 

1-4 family residential loans�������������������������������������������������������������������������������� $598,531 $610,275 $625,642 $634,877 $636,296 -5�9 $0 $2,824 $13,689 $582,018 

Home equity loans��������������������������������������������������������������������������������������������� 41 42 44 46 47 -12�8 0 0 0 40 

Credit card receivables�������������������������������������������������������������������������������������� 16,349 19,405 17,115 17,945 18,832 -13�2 0 161 0 16,189 

Auto loans ���������������������������������������������������������������������������������������������������������� 4,735 4,676 4,708 3,860 4,505 5�1 0 711 0 4,024 

Other consumer loans ��������������������������������������������������������������������������������������� 4,462 4,607 4,790 4,938 5,155 -13�4 0 2 0 4,460 

Commercial and industrial loans����������������������������������������������������������������������� 1,881 1,987 3,945 4,472 4,025 -53�3 0 12 0 1,869 

All other loans, leases, and other assets���������������������������������������������������������� 96,092 101,456 104,890 99,226 140,309 -31�5 0 3,507 5,040 87,545 

Total securitized and sold������������������������������������������������������������������������������������������ 

Maximum Credit Exposure by Asset Type 

722,091 742,448 761,133 765,366 809,168 -10�8 0 7,218 18,730 696,144 

1-4 family residential loans�������������������������������������������������������������������������������� 2,895 2,794 2,927 3,086 3,254 -11�0 0 6 38 2,851 

Home equity loans��������������������������������������������������������������������������������������������� 0 0 0 0 0 0�0 0 0 0 0 

Credit card receivables�������������������������������������������������������������������������������������� 1,455 603 554 557 588 147�4 0 76 0 1,379 

Auto loans ���������������������������������������������������������������������������������������������������������� 5 0 0 0 0 0�0 0 0 0 5 

Other consumer loans ��������������������������������������������������������������������������������������� 174 164 168 168 185 -5�9 0 0 0 174 

Commercial and industrial loans����������������������������������������������������������������������� 38 27 20 33 41 -7�3 0 0 0 38 

All other loans, leases, and other assets���������������������������������������������������������� 1,308 1,633 1,729 1,861 2,438 -46�3 0 1 0 1,307 

Total credit exposure ������������������������������������������������������������������������������������������������� 5,876 5,221 5,397 5,705 6,506 -9�7 0 83 38 5,755 

Total unused liquidity commitments provided to institution's own securitizations ��� 

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

120 121 121 121 121 -0�8 0 0 0 120 

1-4 family residential loans�������������������������������������������������������������������������������� 3�3 4�3 4�1 4�3 4�0 0�0 1�2 4�4 3�3 

Home equity loans��������������������������������������������������������������������������������������������� 8�8 10�4 10�7 9�5 11�5 0�0 0�0 0�0 8�9 

Credit card receivables�������������������������������������������������������������������������������������� 0�9 0�8 1�0 0�8 0�8 0�0 1�4 0�0 0�9 

Auto loans ���������������������������������������������������������������������������������������������������������� 0�6 1�0 0�6 0�4 0�3 0�0 0�0 0�0 0�7 

Other consumer loans ��������������������������������������������������������������������������������������� 5�2 5�6 5�4 6�0 4�9 0�0 0�0 0�0 5�2 

Commercial and industrial loans����������������������������������������������������������������������� 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�3 0�8 1�1 1�2 1�2 0�0 1�0 0�2 0�3 

Total loans, leases, and other assets ����������������������������������������������������������������������� 

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

2�9 3�7 3�6 3�8 3�4 0�0 1�0 3�2 2�9 

1-4 family residential loans�������������������������������������������������������������������������������� 3�3 3�4 3�7 4�2 4�7 0�0 1�4 6�5 3�2 

Home equity loans��������������������������������������������������������������������������������������������� 37�8 36�5 34�4 32�3 31�7 0�0 0�0 0�0 38�3 

Credit card receivables�������������������������������������������������������������������������������������� 0�7 0�6 0�6 0�4 0�4 0�0 1�7 0�0 0�7 

Auto loans ���������������������������������������������������������������������������������������������������������� 0�1 0�1 0�0 0�0 0�0 0�0 0�0 0�0 0�1 

Other consumer loans ��������������������������������������������������������������������������������������� 6�7 7�3 7�1 6�3 6�9 0�0 0�0 0�0 6�7 

Commercial and industrial loans����������������������������������������������������������������������� 0�0 0�0 0�0 0�0 0�0 0�0 4�2 0�0 0�0 

All other loans, leases, and other assets���������������������������������������������������������� 8�7 9�2 8�9 10�2 8�8 0�0 0�6 1�7 9�4 

Total loans, leases, and other assets ����������������������������������������������������������������������� 

Securitized Loans, Leases, and Other Assets Charged-off 

(net, YTD, annualized, %) 

3�9 4�1 4�3 4�9 5�3 0�0 0�9 5�2 3�9 

1-4 family residential loans�������������������������������������������������������������������������������� 0�2 0�9 0�7 0�5 0�3 0�0 0�0 0�0 0�2 

Home equity loans��������������������������������������������������������������������������������������������� -0�1 0�2 0�3 0�2 0�3 0�0 0�0 0�0 -0�1 

Credit card receivables�������������������������������������������������������������������������������������� 0�6 2�2 2�0 1�3 0�6 0�0 1�4 0�0 0�6 

Auto loans ���������������������������������������������������������������������������������������������������������� 0�0 0�3 0�1 0�1 0�1 0�0 0�0 0�0 0�0 

Other consumer loans ��������������������������������������������������������������������������������������� 0�2 0�9 0�7 0�4 0�2 0�0 0�0 0�0 0�2 

Commercial and industrial loans����������������������������������������������������������������������� 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�7 0�9 0�6 0�5 0�1 0�0 0�0 0�0 0�8 

Total loans, leases, and other assets ����������������������������������������������������������������������� 

Seller's Interests in Institution's Own Securitizations - Carried as Loans 

0�2 0�9 0�7 0�5 0�3 0�0 0�1 0�0 0�2 

Home equity loans��������������������������������������������������������������������������������������������� 0 0 0 0 0 0�0 0 0 0 0 

Credit card receivables�������������������������������������������������������������������������������������� 13,116 12,850 13,451 13,076 11,868 10�5 0 257 0 12,859 

Commercial and industrial loans����������������������������������������������������������������������� 

Seller's Interests in Institution's Own Securitizations - Carried as Securities 

2 3 3 3 0 0�0 0 2 0 0 

Home equity loans��������������������������������������������������������������������������������������������� 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 

Commercial and industrial loans����������������������������������������������������������������������� 

Assets Sold with Recourse and Not Securitized 

48 52 0 0 0 0�0 0 0 0 48 

Number of institutions reporting asset sales������������������������������������������������������������ 

Outstanding Principal Balance by Asset Type 

1,086 1,083 1,066 1,065 1,059 2�5 149 718 171 48 

1-4 family residential loans�������������������������������������������������������������������������������� 43,650 46,443 48,349 48,783 50,644 -13�8 1,712 13,540 7,842 20,556 

Home equity, credit card receivables, auto, and other consumer loans ��������� 755 776 802 829 852 -11�4 0 14 6 734 

Commercial and industrial loans����������������������������������������������������������������������� 69 62 64 71 74 -6�8 0 23 40 6 

All other loans, leases, and other assets���������������������������������������������������������� 65,974 67,794 62,143 63,988 64,769 1�9 2 61 199 65,713 

Total sold and not securitized������������������������������������������������������������������������������������ 

Maximum Credit Exposure by Asset Type 

110,448 115,074 111,358 113,671 116,339 -5�1 1,713 13,639 8,087 87,008 

1-4 family residential loans�������������������������������������������������������������������������������� 9,529 10,727 11,607 12,225 13,152 -27�5 110 1,981 2,669 4,768 

Home equity, credit card receivables, auto, and other consumer loans ��������� 155 160 156 151 167 -7�2 0 14 3 138 

Commercial and industrial loans����������������������������������������������������������������������� 33 27 29 34 36 -8�3 0 23 10 1 

All other loans, leases, and other assets���������������������������������������������������������� 16,970 17,058 15,316 15,360 15,216 11�5 2 18 55 16,896 

Total credit exposure ������������������������������������������������������������������������������������������������� 

Support for Securitization Facilities Sponsored by Other Institutions 

26,687 27,973 27,109 27,769 28,571 -6�6 112 2,035 2,738 21,802 

Number of institutions reporting securitization facilities sponsored by others ������� 139 148 154 157 167 -16�8 14 78 28 19 

Total credit exposure ������������������������������������������������������������������������������������������������� 42,058 44,707 44,848 45,095 48,946 -14�1 12 194 347 41,506 

Total unused liquidity commitments ������������������������������������������������������������������������� 

Other 

1,017 981 923 828 673 51�1 0 0 0 1,016 

Assets serviced for others* ��������������������������������������������������������������������������������������� 

Asset-backed commercial paper conduits 

4,557,964 4,712,508 4,773,340 4,885,219 5,186,035 -12�1 5,373 158,848 287,074 4,106,670 

Credit exposure to conduits sponsored by institutions and others������������������ 

Unused liquidity commitments to conduits sponsored by institutions 

12,110 12,317 13,049 11,316 10,925 10�8 5 0 3 12,102 

and others������������������������������������������������������������������������������������������������������� 30,515 31,113 40,363 51,893 63,355 -51�8 0 0 798 29,716 

Net servicing income (for the quarter) ���������������������������������������������������������������������� 2,141 4,627 3,182 5,827 4,218 -49�2 8 184 155 1,795 

Net securitization income (for the quarter) ��������������������������������������������������������������� 283 395 352 273 394 -28�2 0 8 8 266 

Total credit exposure to Tier 1 capital (%)** ������������������������������������������������������������� 5�4 5�8 5�9 6�0 6�5 0�9 1�8 2�0 6�5 

* 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� 
FDIC QUARTERLY 14 2014, VOLUME 8, NO. 2 

COMMUNITY BANK PERFORMANCE 

■ Community Banks Earn $4.4 Billion in First Quarter 2014 

■ Net Interest Income Up 5 Percent From a Year Ago, Boosted by Loan Growth 

■ Loan Balances Rise During the Quarter, Outpacing Industry Growth 

■ Asset Quality Indicators Show Continuing Improvement 

■ Community Banks Account for 45 Percent of Small Loans to Businesses 

Community Banks Represent 93 Percent of 

Insured Institutions 

In December 2012, the FDIC released the Community 

Banking Study which examined institutions that provide 

traditional, relationship-based banking services in their 

communities. Based on criteria developed for the study, 

there were 6,234 community banks (93 percent of all 

FDIC-insured institutions) in the first quarter of 2014 

with assets of $2.0 trillion (14 percent of industry 

assets). This new section of the Quarterly Banking Profile 

will provide insight into the condition and performance 

of this important part of the banking industry. 

Earnings Down 1.5 Percent From a Year Ago, 

Far Less Than the Industry Decline 

Community banks reported net income of $4.4 billion, 

down $67 million (1.5 percent) from first quarter 2013.1 

Despite the decline, more than half (54 percent) of all 

community banks reported higher earnings from a year 

ago and the percentage reporting a quarterly loss fell to 

1

 Prior period dollar amounts used for comparisons are mergeradjusted, meaning the same institutions identified as community 

banks in the current quarter are used to determine dollar amounts in 

prior quarters, after taking into account acquisitions. Performance 

ratios are not merger-adjusted. 

7.5 percent from 8.7 percent. The percentage decline in 

earnings at community banks was far less than the 7.6 

percent decline for the industry. 

Net Interest Income Increases at a Faster Pace 

Than the Industry 

Net interest income—which accounts for about 80 

percent of net operating revenue at community banks— 

was $16.6 billion during the quarter, up $790 million 

(5 percent) from a year ago. Two-thirds (67 percent) of 

community banks reported a year-over-year increase. 

The average net interest margin at community banks of 

3.57 percent was 4 basis points higher than a year ago 

and 40 basis points above the industry average. Nearly 

76 percent of community banks reported net interest 

margins above the industry average of 3.17 percent. 

Lower Noninterest Income and Higher Noninterest 

Expense Reduce Earnings 

Noninterest income—which accounts for about 20 

percent of net operating revenue at community banks— 

was $4.1 billion in the first quarter, down $562 million 

(12 percent) from first quarter 2013 as revenue from 

loan sales—including mortgage sales—declined by $657 

million (52 percent) from a year ago. Like community 

Chart 1 Chart 2 

Contributors to the Year-Over-Year Change in Income 

FDIC-Insured Community Banks 

Billions of Dollars Positive Factor

Negative Factor $1.0 0.79 

$0.5 0.32 

0.09 

$0.0 

-0.14 

-0.27 

-$0.5 

-0.56 

-$1.0 Net Loan Loss Noninterest Noninterest Realized Income 

Interest Provisions Income Expense Gains on Taxes 

Income Securities 

+5% -33% -12% +2% -48% +8% 

-0.07 

Net 

Income 

-2% 

Source: FDIC. 

Net Interest Margin 

Percent 

3.53 3.57 

3.27 

3.17 

3.0 

3.5 

4.0 

2006 2007 2008 2009 2010 2011 2012 2013 2014 

Community Banks 

All Insured Institutions 

Source: FDIC. 
FDIC QUARTERLY 15 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

banks, the industry experienced an 11 percent yearover-year decline in noninterest income, driven by a 44 

percent decline in income from loan sales. Noninterest 

expense at community banks was $315 million (2.2 

percent) higher than a year earlier. Relative to total 

assets at community banks, noninterest expense 

declined to 0.72 percent from 0.73 percent a year ago, 

as assets grew at a faster pace than noninterest expense. 

Loan Growth at Community Banks Higher 

Than the Industry 

Total assets at community banks increased by $28 

billion (1.4 percent) from the previous quarter, as loan 

balances grew by $12.3 billion (0.9 percent). Community banks reported higher loan growth than the industry, which experienced 0.5 percent growth. Over 75 

percent of the increase in loan balances at community 

banks during the quarter was due to nonfarm nonresidential real estate loans (up $5.8 billion or 1.5 percent) 

and commercial and industrial loans (up $3.6 billion or 

2.0 percent). Year-over-year loan growth at community 

banks of 6.6 percent also outpaced the industry at 3.6 

percent. Total unused loan commitments at community 

banks increased by $12.1 billion (5.2 percent) during the 

quarter to $245 billion, indicating the potential for additional on-balance sheet loan growth in future quarters. 

Community Banks Hold 45 Percent of Small Loans 

to Businesses 

Small loans to businesses—loans to commercial borrowers up to $1 million, and farm loans up to $500,000—at 

community banks totaled $296.1 billion in the first 

quarter, down by $920 million (0.3 percent) from the 

Chart 3 

Change in Loan Balances and Unused Commitments 

FDIC-Insured Community Banks

Billions of Dollars 

23.8 

Change 1Q 2013 - 1Q 2014 

Change 4Q 2013 - 1Q 2014 

15.7 

10.0 

5.8 4.9 4.3 3.6 2.4 1.7 1.1 0.4 -0.1 0.0 

Nonfarm C&I 1-to-4 C&D 

-3.5 

Loans to Home Nonresidential Loans Family Loans Individuals Equity RE Residential RE Agricultural 

Production 

Loans 

Loan Balances Source: FDIC. 

13.7 

7.4 

3.0 2.5 

Real Estate C&I 

(CRE & Loans 

C&D) 

Unused 

Commitments 

prior quarter but up by $8.2 billion (2.9 percent) from a 

year ago. Commercial and industrial loans increased by 

$1.4 billion (1.6 percent) from last quarter, while agricultural production loans fell by $2.8 billion (10.5 

percent). Over two-thirds (68 percent) of the year-overyear increase in small loans to businesses was driven by 

improvement in commercial and industrial loans, and 

nonfarm nonresidential real estate loans. 

Noncurrent Loan Rate at Community Banks Declines 

for 16 Consecutive Quarters 

Loan performance at community banks continued to 

improve, as the noncurrent loan rate and the net-charge 

off rate both declined from the previous quarter and a 

year ago. Noncurrent loans (those 90+ days past due or 

in nonaccrual status) totaled $22 billion, down $6.2 

billion (22 percent) from a year ago. Over 60 percent of 

community banks reported a decline in noncurrent 

loans relative to a year ago. The noncurrent rate was 

1.68 percent in the first quarter, its lowest level since 

the first quarter of 2008. The noncurrent rate fell 11 

basis points from the previous quarter and 65 basis 

points from a year ago, and it is 78 basis points below 

the industry rate of 2.46 percent. The coverage ratio 

(loan loss reserves relative to noncurrent loans) for 

community banks improved for a 10th consecutive quarter, rising from 87.4 percent to 91.2 percent despite a 

small ($55 million or 0.3 percent) decline in reserves 

during the quarter. The coverage ratio at community 

banks is well above the industry average of 67.8 percent. 

Author: Benjamin Tikvina, Economic Analyst 

Division of Insurance and Research 

(202) 898-6578 

Chart 4 

Noncurrent Loan Rates 

FDIC-Insured Community Banks 

Percent of Loan Portfolio Noncurrent 

0 

2 

4 

6 

8 

10 

12 

14 

16 

2006 2007 2008 2009 2010 2011 2012 2013 2014 

C&D Loans 

Nonfarm Nonresidential RE 

1-to-4 Family RE 

C&I Loans 

Home Equity 

Credit Cards 

Source: FDIC. 
FDIC QUARTERLY 16 2014, VOLUME 8, NO. 2 

 

 

 

 

 

 

 

 

 

 

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

Return on assets (%) ������������������������������������������������������������������������������������������������������ 

Return on equity (%)������������������������������������������������������������������������������������������������������� 

Core capital (leverage) ratio (%) ������������������������������������������������������������������������������������ 

Noncurrent assets plus other real estate owned to assets (%) ������������������������������������ 

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

Asset growth rate (%) ����������������������������������������������������������������������������������������������������� 

Net interest margin (%)��������������������������������������������������������������������������������������������������� 

Net operating income growth (%)����������������������������������������������������������������������������������� 

Number of institutions reporting������������������������������������������������������������������������������������� 

Percentage of unprofitable institutions (%)�������������������������������������������������������������������� 

2014* 2013* 2013 2012 2011 2010 2009 

0�87 

8�03 

10�50 

1�62 

0�17 

1�20 

3�57 

0�65 

6,234 

7�49 

0�89 

8�15 

10�29 

2�17 

0�29 

0�78 

3�53 

13�69 

6,489 

8�66 

0�90 

8�30 

10�44 

1�72 

0�31 

0�25 

3�59 

14�99 

6,307 

8�37 

0�83 0�55 0�21 -0�15 

7�66 5�17 2�08 -1�48 

10�18 9�98 9�56 9�30 

2�27 2�84 3�25 3�27 

0�59 0�87 1�11 1�26 

2�24 1�47 -2�30 3�54 

3�67 3�74 3�71 3�56 

56�45 204�41 204�92 -162�26 

6,543 6,800 7,017 7,254 

11�17 16�35 22�15 29�74 

* 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) 

Number of institutions reporting������������������������������������������������������������������������������������� 

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

CONDITION DATA 

Total assets��������������������������������������������������������������������������������������������������������������������� 

Loans secured by real estate���������������������������������������������������������������������������������� 

1-4 Family residential mortgages �������������������������������������������������������������������� 

Nonfarm nonresidential������������������������������������������������������������������������������������ 

Construction and development������������������������������������������������������������������������ 

Home equity lines��������������������������������������������������������������������������������������������� 

Commercial & industrial loans �������������������������������������������������������������������������������� 

Loans to individuals������������������������������������������������������������������������������������������������� 

Credit cards ������������������������������������������������������������������������������������������������������ 

Farm loans��������������������������������������������������������������������������������������������������������������� 

Other loans & leases����������������������������������������������������������������������������������������������� 

Less: Unearned income ������������������������������������������������������������������������������������������ 

Total loans & leases ������������������������������������������������������������������������������������������������ 

Less: Reserve for losses����������������������������������������������������������������������������������������� 

Net loans and leases����������������������������������������������������������������������������������������������� 

Securities����������������������������������������������������������������������������������������������������������������� 

Other real estate owned������������������������������������������������������������������������������������������ 

Goodwill and other intangibles ������������������������������������������������������������������������������� 

All other assets�������������������������������������������������������������������������������������������������������� 

Total liabilities and capital ���������������������������������������������������������������������������������������������� 

Deposits������������������������������������������������������������������������������������������������������������������� 

Domestic office deposits���������������������������������������������������������������������������������� 

Foreign office deposits������������������������������������������������������������������������������������� 

Brokered deposits �������������������������������������������������������������������������������������������� 

Estimated insured deposits������������������������������������������������������������������������������������� 

Other borrowed funds ��������������������������������������������������������������������������������������������� 

Subordinated debt��������������������������������������������������������������������������������������������������� 

All other liabilities ���������������������������������������������������������������������������������������������������� 

Total equity capital (includes minority interests)���������������������������������������������������� 

Bank equity capital������������������������������������������������������������������������������������������� 

Loans and leases 30-89 days past due������������������������������������������������������������������������� 

Noncurrent loans and leases ����������������������������������������������������������������������������������������� 

Restructured loans and leases �������������������������������������������������������������������������������������� 

Mortgage-backed securities ������������������������������������������������������������������������������������������ 

Earning assets���������������������������������������������������������������������������������������������������������������� 

FHLB Advances�������������������������������������������������������������������������������������������������������������� 

Unused loan commitments��������������������������������������������������������������������������������������������� 

Trust assets��������������������������������������������������������������������������������������������������������������������� 

Assets securitized and sold ������������������������������������������������������������������������������������������� 

Notional amount of derivatives��������������������������������������������������������������������������������������� 

1st Quarter 

2014 

6,234 

449,924 

$2,035,169 

999,115 

349,772 

394,568 

77,825 

47,476 

182,169 

55,442 

1,766 

39,716 

27,975 

553 

1,303,885 

20,020 

1,283,865 

463,857 

10,822 

12,681 

263,946 

2,035,169 

1,688,056 

1,687,825 

231 

56,078 

1,326,886 

111,543 

432 

14,223 

220,916 

220,770 

10,850 

21,954 

11,499 

204,670 

1,876,464 

80,224 

244,787 

237,443 

15,169 

44,487 

4th Quarter 1st Quarter %Change 

2013 2013 13Q1-14Q1 

6,307 

453,462 

$2,019,280 

994,247 

349,691 

392,763 

77,372 

47,830 

179,673 

55,646 

1,850 

43,290 

27,894 

554 

1,300,196 

20,285 

1,279,911 

461,702 

11,362 

12,647 

253,657 

2,019,280 

1,669,232 

1,668,991 

241 

53,578 

1,314,925 

118,397 

447 

14,296 

216,908 

216,765 

10,763 

23,219 

12,503 

203,863 

1,860,414 

83,896 

234,091 

278,654 

14,862 

40,598 

6,489 -3�9 

459,761 -2�1 

$2,010,959 1�2 

965,688 3�5 

345,124 1�3 

382,382 3�2 

75,410 3�2 

49,314 -3�7 

171,298 6�3 

53,304 4�0 

1,938 -8�8 

35,677 11�3 

25,894 8�0 

523 5�7 

1,251,338 4�2 

21,586 -7�3 

1,229,752 4�4 

471,985 -1�7 

14,284 -24�2 

11,632 9�0 

283,306 -6�8 

2,010,959 1�2 

1,669,753 1�1 

1,669,553 1�1 

200 15�5 

51,924 8�0 

1,338,259 -0�8 

103,972 7�3 

553 -21�9 

16,144 -11�9 

220,538 0�2 

220,373 0�2 

12,007 -9�6 

29,121 -24�6 

12,914 -11�0 

214,307 -4�5 

1,854,720 1�2 

70,571 13�7 

241,981 1�2 

228,276 4�0 

16,173 -6�2 

54,196 -17�9 

Full Year Full Year 1st Quarter 1st Quarter %Change 

INCOME DATA 2013 2012 %Change 2014 2013 13Q1-14Q1 

Total interest income ������������������������������������������������������������������� $75,772 $79,518 -4�7 $18,927 $19,120 -1�0 

Total interest expense ����������������������������������������������������������������� 10,346 13,457 -23�12 2,330 2,808 -17�0 

Net interest income �������������������������������������������������������������� 65,425 66,061 -1�0 16,597 16,313 1�7 

Provision for loan and lease losses �������������������������������������������� 3,151 6,572 -52�1 549 863 -36�4 

Total noninterest income ������������������������������������������������������������� 18,579 18,688 -0�6 4,148 4,879 -15�0 

Total noninterest expense ����������������������������������������������������������� 59,137 59,082 0�1 14,698 14,958 -1�7 

Securities gains (losses) ������������������������������������������������������������� 562 1,517 -63�0 145 290 -50�1 

Applicable income taxes ������������������������������������������������������������� 4,522 4,284 5�5 1,267 1,194 6�1 

Extraordinary gains, net�������������������������������������������������������������� 43 -10 -521�9 5 2 123�5 

Total net income (includes minority interests)��������������������� 17,800 16,318 9�1 4,382 4,469 -2�0 

Bank net income������������������������������������������������������������ 17,777 16,289 9�1 4,378 4,463 -1�9 

Net charge-offs���������������������������������������������������������������������������� 3,947 7,195 -45�1 542 921 -41�1 

Cash dividends ���������������������������������������������������������������������������� 8,705 8,951 -2�8 2,092 1,765 18�5 

Retained earnings ����������������������������������������������������������������������� 9,072 7,337 23�6 2,286 2,698 -15�2 

Net operating income����������������������������������������������������������� 17,320 15,062 15�0 4,267 4,239 0�6 

N/M - Not Meaningful 
FDIC QUARTERLY 17 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

 

 

 

 

 

 

 

 

 

 

 

TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks 

First Quarter 2014 

(dollar figures in millions) 

Number of institutions reporting����������������������������������� 

All Community Banks 

Geographic Regions* 

New York Atlanta Chicago Kansas City Dallas San Francisco 

6,234 730 783 1,392 1,576 1,328 425 

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

CONDITION DATA 

449,924 87,366 59,299 97,735 72,162 97,461 35,901 

Total assets������������������������������������������������������������������� $2,035,169 $503,960 $250,784 $394,761 $317,344 $397,693 $170,627 

Loans secured by real estate�������������������������������� 999,115 284,931 132,024 194,371 135,188 171,196 81,405 

1-4 Family residential mortgages ������������������ 349,772 118,093 41,271 71,443 44,147 56,568 18,251 

Nonfarm nonresidential���������������������������������� 394,568 101,466 59,032 73,023 46,478 71,982 42,586 

Construction and development���������������������� 77,825 13,871 14,263 11,450 9,850 22,163 6,226 

Home equity lines������������������������������������������� 47,476 15,591 7,737 11,099 4,243 4,261 4,545 

Commercial & industrial loans ������������������������������ 182,169 40,249 18,849 35,710 29,848 40,861 16,654 

Loans to individuals����������������������������������������������� 55,442 10,338 7,162 11,278 9,234 13,388 4,041 

Credit cards ���������������������������������������������������� 1,766 202 134 444 395 317 275 

Farm loans������������������������������������������������������������� 39,716 451 936 6,233 22,464 7,386 2,246 

Other loans & leases��������������������������������������������� 27,975 7,504 1,877 5,173 4,837 5,766 2,818 

Less: Unearned income ���������������������������������������� 553 141 97 62 25 116 112 

Total loans & leases ���������������������������������������������� 1,303,885 343,333 160,773 252,702 201,545 238,480 107,051 

Less: Reserve for losses��������������������������������������� 20,020 4,302 2,727 4,345 3,120 3,569 1,956 

Net loans and leases��������������������������������������������� 1,283,865 339,031 158,046 248,357 198,425 234,911 105,095 

Securities��������������������������������������������������������������� 463,857 107,568 51,543 91,349 75,870 100,763 36,763 

Other real estate owned���������������������������������������� 10,822 1,249 2,839 2,262 1,728 1,997 748 

Goodwill and other intangibles ����������������������������� 12,681 4,101 1,266 2,458 1,686 2,288 882 

All other assets������������������������������������������������������ 263,946 52,011 37,091 50,335 39,635 57,735 27,139 

Total liabilities and capital �������������������������������������������� 2,035,169 503,960 250,784 394,761 317,344 397,693 170,627 

Deposits����������������������������������������������������������������� 1,688,056 400,967 210,792 330,825 264,454 338,556 142,461 

Domestic office deposits�������������������������������� 1,687,825 400,849 210,725 330,798 264,454 338,556 142,443 

Foreign office deposits����������������������������������� 231 119 67 27 0 0 18 

Brokered deposits ������������������������������������������ 56,078 15,968 6,635 11,929 8,119 9,096 4,332 

Estimated insured deposits ��������������������������� 1,326,886 310,130 166,308 272,848 215,373 255,482 106,744 

Other borrowed funds ������������������������������������������� 111,543 43,105 11,221 18,550 17,374 14,679 6,613 

Subordinated debt������������������������������������������������� 432 207 68 103 7 5 43 

All other liabilities �������������������������������������������������� 14,223 4,552 1,549 2,701 1,722 2,290 1,409 

Total equity capital (includes minority interests)�� 220,916 55,128 27,155 42,582 33,788 42,162 20,100 

Bank equity capital����������������������������������������� 220,770 55,082 27,146 42,527 33,787 42,131 20,098 

Loans and leases 30-89 days past due����������������������� 10,850 2,802 1,709 2,242 1,529 2,069 500 

Noncurrent loans and leases ��������������������������������������� 21,954 6,012 3,954 5,167 2,198 3,003 1,619 

Restructured loans and leases ������������������������������������ 11,499 2,375 2,163 3,107 1,364 1,478 1,012 

Mortgage-backed securities ���������������������������������������� 204,670 59,450 23,029 37,146 26,881 39,732 18,433 

Earning assets�������������������������������������������������������������� 1,876,464 467,786 228,645 363,485 293,212 365,542 157,793 

FHLB Advances������������������������������������������������������������ 80,224 33,696 8,265 12,454 11,962 10,397 3,449 

Unused loan commitments������������������������������������������� 244,787 59,555 28,487 46,749 42,137 43,994 23,865 

Trust assets������������������������������������������������������������������� 237,443 53,530 8,614 66,692 60,863 37,605 10,138 

Assets securitized and sold ����������������������������������������� 15,169 3,063 516 6,140 4,183 531 736 

Notional amount of derivatives������������������������������������� 

INCOME DATA 

44,487 15,194 5,441 9,794 5,157 6,946 1,955 

Total interest income ���������������������������������������������������� $18,927 $4,542 $2,439 $3,612 $2,952 $3,794 $1,588 

Total interest expense �������������������������������������������������� 2,330 690 307 443 376 388 126 

Net interest income ����������������������������������������������� 16,597 3,853 2,132 3,170 2,576 3,406 1,461 

Provision for loan and lease losses ����������������������������� 549 159 66 145 62 116 1 

Total noninterest income ���������������������������������������������� 4,148 760 469 1,132 633 814 340 

Total noninterest expense �������������������������������������������� 14,698 3,278 1,973 3,027 2,171 2,969 1,279 

Securities gains (losses) ���������������������������������������������� 145 66 16 16 19 17 11 

Applicable income taxes ���������������������������������������������� 1,267 385 148 282 163 152 137 

Extraordinary gains, net����������������������������������������������� 5 0 1 0 3 1 0 

Total net income (includes minority interests)������ 4,382 857 430 863 835 1,002 395 

Bank net income��������������������������������������������� 4,378 856 430 861 835 1,002 395 

Net charge-offs������������������������������������������������������������� 542 135 90 167 54 75 22 

Cash dividends ������������������������������������������������������������� 2,092 169 157 435 491 533 307 

Retained earnings �������������������������������������������������������� 2,286 687 273 426 344 469 88 

Net operating income�������������������������������������������� 4,267 808 417 850 818 987 387 

* See Table V-A (page 11) for explanations� 
FDIC QUARTERLY 18 2014, VOLUME 8, NO. 2 

Table IV-B. First Quarter 2014, FDIC-Insured Community Banks 

Performance ratios (annualized, %) 

Yield on earning assets�������������������������������������������������� 

Cost of funding earning assets �������������������������������������� 

Net interest margin�������������������������������������������������� 

Noninterest income to assets����������������������������������������� 

Noninterest expense to assets��������������������������������������� 

Loan and lease loss provision to assets������������������������ 

Net operating income to assets ������������������������������������� 

Pretax return on assets �������������������������������������������������� 

Return on assets������������������������������������������������������������� 

Return on equity ������������������������������������������������������������� 

Net charge-offs to loans and leases������������������������������ 

Loan and lease loss provision to net charge-offs���������� 

Efficiency ratio ���������������������������������������������������������������� 

Net interest income to operating revenue���������������������� 

% of unprofitable institutions������������������������������������������ 

% of institutions with earnings gains������������������������������ 

All Community Banks First Quarter 2014, Geographic Regions* 

1st Quarter 

2014 

4th Quarter 

2013 New York Atlanta Chicago Kansas City Dallas San Francisco 

4�07 4�18 3�92 4�31 4�00 4�05 4�20 4�06 

0�50 0�53 0�60 0�54 0�49 0�52 0�43 0�32 

3�57 3�65 3�32 3�76 3�51 3�53 3�77 3�74 

0�82 0�84 0�61 0�75 1�15 0�80 0�83 0�80 

2�91 3�07 2�62 3�18 3�08 2�75 3�02 3�03 

0�11 0�15 0�13 0�11 0�15 0�08 0�12 0�00 

0�85 0�80 0�65 0�67 0�87 1�04 1�00 0�92 

1�12 0�98 0�99 0�93 1�16 1�26 1�17 1�26 

0�87 0�80 0�69 0�69 0�88 1�06 1�02 0�93 

8�03 7�42 6�29 6�42 8�21 10�00 9�64 7�92 

0�17 0�35 0�16 0�22 0�26 0�11 0�13 0�08 

101�17 68�23 117�57 73�30 86�92 114�07 154�92 5�92 

70�52 71�90 70�70 75�44 70�05 67�30 70�07 70�84 

80�00 79�96 83�52 81�98 73�69 80�26 80�70 81�12 

7�49 13�11 8�49 11�88 8�33 5�20 5�05 11�06 

54�03 52�81 49�86 58�24 48�42 56�35 56�70 54�82 

Table V-B. Full Year 2013, FDIC-Insured Community Banks 

Performance ratios (%) 

All Community Banks Full Year 2013, Geographic Regions* 

Full Year

 2013 

Full Year 

2012 New York Atlanta Chicago Kansas City Dallas San Francisco 

Yield on earning assets�������������������������������������������������� 4�16 4�42 3�99 4�39 4�11 4�13 4�29 4�18 

Cost of funding earning assets �������������������������������������� 0�57 0�75 0�66 0�62 0�57 0�59 0�49 0�37 

Net interest margin�������������������������������������������������� 3�59 3�67 3�33 3�77 3�54 3�54 3�80 3�81 

Noninterest income to assets����������������������������������������� 0�94 0�95 0�72 0�84 1�27 0�91 0�93 1�00 

Noninterest expense to assets��������������������������������������� 2�99 3�01 2�70 3�30 3�14 2�81 3�06 3�17 

Loan and lease loss provision to assets������������������������ 0�16 0�34 0�18 0�17 0�20 0�12 0�16 0�06 

Net operating income to assets ������������������������������������� 0�87 0�77 0�65 0�61 0�95 1�05 1�03 1�09 

Pretax return on assets �������������������������������������������������� 1�13 1�05 0�99 0�83 1�22 1�27 1�22 1�31 

Return on assets������������������������������������������������������������� 0�90 0�83 0�69 0�63 0�97 1�07 1�04 1�11 

Return on equity ������������������������������������������������������������� 8�30 7�66 6�29 5�86 9�16 10�00 9�79 9�30 

Net charge-offs to loans and leases������������������������������ 0�31 0�59 0�25 0�47 0�48 0�20 0�28 0�18 

Loan and lease loss provision to net charge-offs���������� 79�84 91�35 109�94 55�71 66�68 93�50 95�54 53�01 

Efficiency ratio ���������������������������������������������������������������� 69�85 69�25 70�50 75�29 68�86 66�91 68�88 70�00 

Net interest income to operating revenue���������������������� 77�88 77�95 80�98 80�40 71�91 78�27 78�89 77�79 

% of unprofitable institutions������������������������������������������ 8�37 11�17 10�72 14�86 9�54 4�47 5�36 12�30 

% of institutions with earnings gains������������������������������ 53�72 67�31 49�39 62�17 50�11 51�76 54�36 62�41 

* See Table V-A (page 11) for explanations� 
FDIC QUARTERLY 19 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

 

Table VI-B. Loan Performance, FDIC-Insured Community Banks 

March 31, 2014 All Community Banks 

Geographic Regions* 

New York Atlanta Chicago Kansas City Dallas San Francisco 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate ������������������������������������������� 0�83 0�77 1�08 0�96 0�73 0�87 0�43 

Construction and development������������������������������������� 0�78 0�96 0�94 0�77 0�73 0�63 0�57 

Nonfarm nonresidential������������������������������������������������� 0�64 0�60 0�80 0�83 0�55 0�59 0�36 

Multifamily residential real estate ��������������������������������� 0�33 0�23 0�42 0�63 0�27 0�45 0�07 

Home equity loans��������������������������������������������������������� 0�58 0�60 0�73 0�56 0�55 0�52 0�37 

Other 1-4 family residential������������������������������������������� 1�22 1�07 1�66 1�32 1�04 1�39 0�63 

Commercial and industrial loans ����������������������������������������� 0�68 0�73 0�74 0�62 0�76 0�66 0�55 

Loans to individuals�������������������������������������������������������������� 1�60 2�79 1�83 1�03 1�09 1�70 0�59 

Credit card loans ����������������������������������������������������������� 1�47 2�73 1�37 1�02 2�10 0�96 1�03 

Other loans to individuals ��������������������������������������������� 1�61 2�79 1�84 1�03 1�04 1�72 0�55 

All other loans and leases (including farm) ������������������������� 0�62 0�23 0�61 0�36 0�80 0�68 0�71 

Total loans and leases���������������������������������������������������������� 

Percent of Loans Noncurrent** 

0�83 0�82 1�06 0�89 0�76 0�87 0�47 

All loans secured by real estate ������������������������������������������� 1�87 1�89 2�60 2�31 1�23 1�39 1�61 

Construction and development������������������������������������� 3�93 4�11 6�47 5�01 3�21 2�05 3�50 

Nonfarm nonresidential������������������������������������������������� 1�83 1�82 2�23 2�44 1�40 1�31 1�64 

Multifamily residential real estate ��������������������������������� 0�86 0�44 1�73 1�75 0�77 0�83 0�53 

Home equity loans��������������������������������������������������������� 1�00 1�07 1�00 1�25 0�55 0�72 0�81 

Other 1-4 family residential������������������������������������������� 1�90 2�20 2�21 2�25 1�13 1�38 1�40 

Commercial and industrial loans ����������������������������������������� 1�34 1�27 1�53 1�53 1�32 1�10 1�54 

Loans to individuals�������������������������������������������������������������� 0�95 0�93 2�84 0�49 0�56 0�71 0�51 

Credit card loans ����������������������������������������������������������� 0�99 2�09 2�06 0�70 1�01 0�50 0�68 

Other loans to individuals ��������������������������������������������� 0�94 0�91 2�85 0�49 0�54 0�72 0�50 

All other loans and leases (including farm) ������������������������� 0�46 0�25 1�00 0�60 0�35 0�53 0�54 

Total loans and leases���������������������������������������������������������� 

Percent of Loans Charged-Off (net, YTD) 

1�68 1�75 2�46 2�04 1�09 1�26 1�51 

All loans secured by real estate ������������������������������������������� 0�14 0�12 0�20 0�25 0�08 0�07 0�04 

Construction and development������������������������������������� 0�18 0�37 0�45 0�31 -0�03 0�00 -0�10 

Nonfarm nonresidential������������������������������������������������� 0�14 0�10 0�20 0�29 0�10 0�05 0�06 

Multifamily residential real estate ��������������������������������� 0�09 0�02 0�07 0�21 0�08 0�38 -0�01 

Home equity loans��������������������������������������������������������� 0�17 0�15 0�15 0�35 0�13 0�09 -0�05 

Other 1-4 family residential������������������������������������������� 0�15 0�14 0�17 0�24 0�12 0�09 0�06 

Commercial and industrial loans ����������������������������������������� 0�22 0�28 0�22 0�32 0�14 0�17 0�15 

Loans to individuals�������������������������������������������������������������� 0�65 0�72 0�71 0�51 0�65 0�74 0�44 

Credit card loans ����������������������������������������������������������� 4�28 5�70 1�03 3�59 9�09 1�92 1�77 

Other loans to individuals ��������������������������������������������� 0�53 0�61 0�70 0�38 0�26 0�71 0�34 

All other loans and leases (including farm) ������������������������� 0�10 0�07 0�13 0�13 0�02 0�15 0�29 

Total loans and leases���������������������������������������������������������� 

Loans Outstanding (in billions) 

0�17 0�16 0�22 0�26 0�11 0�13 0�08 

All loans secured by real estate ������������������������������������������� $999�1 $284�9 $132�0 $194�4 $135�2 $171�2 $81�4 

Construction and development������������������������������������� 77�8 13�9 14�3 11�5 9�8 22�2 6�2 

Nonfarm nonresidential������������������������������������������������� 394�6 101�5 59�0 73�0 46�5 72�0 42�6 

Multifamily residential real estate ��������������������������������� 73�7 34�5 5�7 13�9 6�7 5�8 7�1 

Home equity loans��������������������������������������������������������� 47�5 15�6 7�7 11�1 4�2 4�3 4�5 

Other 1-4 family residential������������������������������������������� 349�8 118�1 41�3 71�4 44�1 56�6 18�3 

Commercial and industrial loans ����������������������������������������� 182�2 40�2 18�8 35�7 29�8 40�9 16�7 

Loans to individuals�������������������������������������������������������������� 55�4 10�3 7�2 11�3 9�2 13�4 4�0 

Credit card loans ����������������������������������������������������������� 1�8 0�2 0�1 0�4 0�4 0�3 0�3 

Other loans to individuals ��������������������������������������������� 53�7 10�1 7�0 10�8 8�8 13�1 3�8 

All other loans and leases (including farm) ������������������������� 67�7 8�0 2�8 11�4 27�3 13�2 5�1 

Total loans and leases���������������������������������������������������������� 

Memo: Unfunded Commitments (in millions) 

1,304�4 343�5 160�9 252�8 201�6 238�6 107�2 

Total Unfunded Commitments ��������������������������������������������� 244,787 59,555 28,487 46,749 42,137 43,994 23,865 

Construction and development: 1-4 family residential �� 17,461 3,594 3,417 1,854 2,050 5,060 1,487 

Construction and development: CRE and other ����������� 39,709 12,312 5,428 5,974 4,719 8,282 2,994 

Commercial and industrial �������������������������������������������� 85,053 19,714 8,617 17,854 13,797 16,143 8,928 

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

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status� 
FDIC QUARTERLY 20 2014, VOLUME 8, NO. 2 

INSURANCE FUND INDICATORS 

■ Insured Deposits Grow by 1.9 Percent 

■ DIF Reserve Ratio Rises 1 Basis Point to 0.80 Percent 

■ Five Institutions Fail During First Quarter 

Total assets of the 6,730 FDIC-insured institutions 

increased by 1.2 percent ($178.3 billion) during the 

first quarter of 2014. Total deposits increased by 1.1 

percent ($125.8 billion), domestic office deposits 

increased by 1.3 percent ($131.1 billion), and foreign 

office deposits decreased by 0.4 percent ($5.4 billion). 

Domestic noninterest-bearing deposits increased by 

1.8 percent ($46.4 billion) and savings deposits and 

interest-bearing checking accounts increased by 1.9 

percent ($105.6 billion), while domestic time deposits 

decreased by 1.3 percent ($20.8 billion). For the twelve 

months ending March 31, total domestic deposits grew 

by 5.3 percent ($495.5 billion), with interest-bearing 

deposits increasing by 4 percent ($279.1 billion) and 

noninterest-bearing deposits rising by 8.9 percent 

($216.4 billion).1 Foreign deposits increased by 0.2 

percent, other borrowed money increased by 9.5 

percent, while securities sold under agreements to 

repurchase declined by 11.2 percent over the same 

twelve-month period.2 At the end of the first quarter, 

domestic deposits funded 66.6 percent of industry assets, 

the largest share since the fourth quarter of 1993, when 

the share was 68 percent. 

Total estimated insured deposits increased by 1.9 

percent from the prior quarter and by 2.1 percent from 

one year earlier.3 For institutions existing at the start 

and the end of the first quarter, insured deposits 

increased during the quarter at 4,932 institutions (73 

percent), decreased at 1,760 institutions (26 percent), 

and remained unchanged at 35 institutions. 

The condition of the Deposit Insurance Fund (DIF) 

continues to improve. The DIF increased by $1.7 

billion during the first quarter to $48.9 billion. Assessment income of $2.4 billion was primarily responsible 

for the increase. Interest earned on investments of 

$45 million, unrealized gains on available-for-sale securities of $25 million, and other miscellaneous income of 

$9 million also added to the fund. Operating expenses 

of $422 million and provisions for insurance losses of 

$348 million partially offset the fund balance increase. 

During the first quarter of 2014, five insured institutions 

with combined assets of $718 million failed, at an estimated cost to the fund of $92 million. The DIF’s 

reserve ratio—the DIF fund balance as a percent of 

estimated insured deposits—was 0.80 percent as of the 

first quarter, up from 0.79 percent in the prior quarter 

and 0.60 percent one year earlier. 

1

 Throughout the insurance fund discussion, FDIC-insured institutions 

include insured commercial banks and savings associations and, 

except where noted, exclude insured branches of foreign banks. 3 Figures for estimated insured deposits in this discussion include 2

 Other borrowed money includes FHLB advances, term federal funds, insured branches of foreign banks, in addition to insured commercial 

mortgage indebtedness, and other borrowings. banks and savings institutions. 
FDIC QUARTERLY 21 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

Table 1 

Distribution of the Assessment Base for FDIC-Insured Institutions* 

by Asset Size 

Data as of March 31, 2014 

Asset Size 

Number of 

Institutions 

Percent of 

Total Institutions 

Assessment Base** 

($ Bil.) 

Percent of 

Base 

Less Than $1 Billion 

$1 - $10 Billion 

$10 - $50 Billion 

$50 - $100 Billion 

Over $100 Billion 

6,058 

565 

71 

14 

22 

90.0 

8.4 

1.1 

0.2 

0.3 

$1,202.6 

1,321.4 

1,349.6 

939.7 

7,937.8 

9.4 

10.4 

10.6 

7.4 

62.3 

Total 6,730 100.0 12,751.0 100.0 

* Excludes insured U.S. branches of foreign banks. 

** Average consolidated total assets minus average tangible equity, with adjustments for banker’s banks and custodial banks. 

Effective April 1, 2011, the deposit insurance assessment base changed to average consolidated total assets 

minus average tangible equity.4

 Revisions to insurance 

assessment rates and risk-based pricing rules for large 

banks (banks with assets greater than $10 billion) also 

became effective on that date.5 Table 1 shows the distribution of the assessment base by institution asset size 

category as of the first quarter of 2014. 

Dodd-Frank requires that, for at least five years, the 

FDIC must make available to the public the reserve 

ratio and the Designated Reserve Ratio (DRR) using 

4

 There is an additional adjustment to the assessment base for banker’s 

banks and custodial banks, as permitted under Dodd-Frank. 

5

 The Fourth Quarter 2010 Quarterly Banking Profile includes a more 

detailed explanation of these changes. 

both estimated insured deposits and the new assessment 

base. As of March 31, 2014, the FDIC reserve ratio 

would have been 0.38 percent using the new assessment 

base (compared to 0.80 percent using estimated insured 

deposits), and the 2 percent DRR using estimated 

insured deposits would have been 0.96 percent using 

the new assessment base. 

Author: Kevin Brown, Senior Financial Analyst 

Division of Insurance and Research 

(202) 898-6817 
FDIC QUARTERLY 22 2014, VOLUME 8, NO. 2 

 

 

 

Table I-C. Insurance Fund Balances and Selected Indicators 

(dollar figures in millions) 

Deposit Insurance Fund* 

1st 

Quarter 

2014 

4th 

Quarter 

2013 

3rd 

Quarter 

2013 

2nd 

Quarter 

2013 

1st 

Quarter 

2013 

4th 

Quarter 

2012 

3rd 

Quarter 

2012 

2nd 

Quarter 

2012 

1st 

Quarter 

2012 

4th 

Quarter 

2011 

3rd 

Quarter 

2011 

2nd 

Quarter 

2011 

1st 

Quarter 

2011 

Beginning Fund Balance .. 

Changes in Fund Balance: 

$47,191 $40,758 $37,871 $35,742 $32,958 $25,224 $22,693 $15,292 $11,827 $7,813 $3,916 -$1,023 -$7,352 

Assessments earned.......... 

Interest earned on 

2,393 2,224 2,339 2,526 2,645 2,937 2,833 2,933 3,694 3,209 3,642 3,163 3,484 

investment securities ...... 

Realized gain on sale of 

45 23 34 54 -9 66 -8 81 20 33 30 37 28 

investments...................... 0 302 156 0 0 0 0 0 0 0 0 0 0 

Operating expenses ........... 

Provision for insurance 

422 436 298 439 436 469 442 407 460 334 433 463 395 

losses .............................. 

All other income, 

348 -4,588 -539 -33 -499 -3,344 -84 -807 12 1,533 -763 -2,095 -3,089 

net of expenses............... 

Unrealized gain/(loss) on 

available-for-sale 

9 9 46 51 55 1,878 57 4,095 63 2,599 83 80 66 

securities ......................... 25 -277 71 -96 30 -22 7 -108 160 40 -188 27 57 

Total fund balance change.. 1,702 6,433 2,887 2,129 2,784 7,734 2,531 7,401 3,465 4,014 3,897 4,939 6,329 

Ending Fund Balance ....... 

Percent change from 

48,893 47,191 40,758 37,871 35,742 32,958 25,224 22,693 15,292 11,827 7,813 3,916 -1,023 

four quarters earlier....... 36�79 43�19 61�58 66�88 133�73 178�67 222�85 479�49 NM NM NM NM NM 

Reserve Ratio (%) ............. 

Estimated Insured 

0�80 0�79 0�68 0�64 0�60 0�44 0�35 0�32 0�22 0�17 0�12 0�06 -0�02 

Deposits**.......................... 

Percent change from 

$6,123,766 $6,009,801 $5,969,906 $5,953,332 $6,000,446 $7,406,525 $7,249,849 $7,083,434 $7,032,875 $6,974,690 $6,756,302 $6,524,750 $6,380,407 

four quarters earlier....... 2�06 -18�86 -17�65 -15�95 -14�68 6�19 7�30 8�56 10�23 10�67 24�62 20�00 16�59 

Domestic Deposits ........... 

Percent change from 

$9,962,466 $9,825,321 $9,630,392 $9,424,433 $9,454,580 $9,474,585 $9,084,803 $8,937,725 $8,848,706 $8,782,134 $8,526,713 $8,244,900 $8,006,898 

four quarters earlier....... 

Number of Institutions 

5�37 3�70 6�01 5�45 6�85 7�88 6�55 8�40 10�51 11�34 9�97 7�34 3�95 

Reporting ....................... 6,739 6,821 6,900 6,949 7,028 7,092 7,190 7,254 7,317 7,366 7,446 7,522 7,583 

DIF Reserve Ratios 

Percent of Insured Deposits 

0.44 

0.60 

0.64 

0.79 

-0.02 

0.06 

0.12 

0.17 

0.22 

0.32 0.35 

0.68 

0.80 

3/11 9/11 3/12 9/12 3/13 9/13 3/14 

Table II-C. Problem Institutions and Failed/Assisted Institutions 

Deposit Insurance Fund Balance 

and Insured Deposits 

($ Millions) 

DIF DIF-Insured 

Balance Deposits 

3/11 -$1,023 $6,380,407 

6/11 3,916 6,524,750 

9/11 7,813 6,756,302 

12/11 11,827 6,974,690 

3/12 15,292 7,032,875 

6/12 22,693 7,083,434 

9/12 25,224 7,249,849 

12/12 32,958 7,406,525 

3/13 35,742 6,000,446 

6/13 37,871 5,953,332 

9/13 40,758 5,969,906 

12/13 47,191 6,009,801 

3/14 48,893 6,123,766 

(dollar figures in millions) 2014*** 2013*** 2013 2012 2011 2010 2009 

Problem Institutions 

Number of institutions �������������������������������������������������� 411 612 467 651 813 884 702 

Total assets������������������������������������������������������������������� $126,106 $213,339 $152,687 $232,701 $319,432 $390,017 $402,782 

Failed Institutions 

Number of institutions �������������������������������������������������� 5 4 24 51 92 157 140 

Total assets ������������������������������������������������������������� $718 $459 $6,044 $11,617 $34,923 $92,085 $169,709 

Assisted Institutions** *** 

Number of institutions �������������������������������������������������� 0 0 0 0 0 0 8 

Total assets������������������������������������������������������������������� $0 $0 $0 $0 $0 $0 $1,917,482 

* Quarterly financial statement results are unaudited� NM - Not meaningful 

** Beginning in the third quarter of 2009, estimates of insured deposits are based on a $250,000 general coverage limit� The Dodd-Frank Wall Street Reform and Consumer Protection Act 

(Dodd-Frank) temporarily provided unlimited coverage for noninterest-bearing transaction accounts for two years beginning December 31, 2010, and ending December 31, 2012� 

*** Through March 31� 

  Total assets are based on final Call Reports submitted by failed institutions� 

** *** Assisted institutions represent eight institutions under a single holding company that received assistance in 2009� 
FDIC QUARTERLY 23 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

 

 

 

 

 

Table III-C. Estimated FDIC-Insured Deposits by Type of Institution 

(dollar figures in millions) 

March 31, 2014 

Number of 

Institutions 

Total 

Assets 

Domestic 

Deposits* 

Est. Insured 

Deposits 

Commercial Banks and Savings Institutions 

FDIC-Insured Commercial Banks ����������������������������������������������� 5,809 $13,854,733 $9,120,424 $5,417,543 

FDIC-Supervised ������������������������������������������������������������������� 3,817 2,190,907 1,717,051 1,284,587 

OCC-Supervised�������������������������������������������������������������������� 1,131 9,560,608 6,009,317 3,399,985 

Federal Reserve-Supervised������������������������������������������������� 861 2,103,219 1,394,056 732,972 

FDIC-Insured Savings Institutions ���������������������������������������������� 921 1,046,269 801,665 676,804 

OCC-Supervised Savings Institutions ����������������������������������� 489 690,467 537,353 455,439 

FDIC-Supervised Savings Institutions����������������������������������� 432 355,802 264,311 221,366 

Total Commercial Banks and Savings Institutions ���������������������� 

Other FDIC-Insured Institutions 

6,730 14,901,002 9,922,088 6,094,347 

U�S� Branches of Foreign Banks ������������������������������������������������� 9 86,151 40,377 29,419 

Total FDIC-Insured Institutions���������������������������������������������������� �� 6,739 14,987,152 9,962,466 6,123,766 

* Excludes $1�4 trillion in foreign office deposits, which are uninsured� 

Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range 

Quarter Ending December 31, 2013 (dollar figures in billions) 

Number of Percent of Total Amount of Percent of Total 

Annual Rate in Basis Points Institutions Institutions Assessment Base* Assessment Base 

2�50-5�00 

5�01-7�50 

7�51-10�00 

10�01-15�00 

15�01-20�00 

 20�01-25�00 

 25�01-30�00 

 30�01-35�00 

greater than 35�00 

1,369 

2,895 

1,408 

653 

31 

382 

8 

70 

5 

20�07 

42�44 

20�64 

9�57 

0�45 

5�60 

0�12 

1�03 

0�07 

$1,035 

9,215 

1,704 

443 

147 

142 

18 

16 

12 

8�13 

72�37 

13�38 

3�48 

1�15

1�12

0�14

0�12 

0�10 

* 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� 
FDIC QUARTERLY 24 2014, VOLUME 8, NO. 2 

 

 

 

 

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 V-A of 

the FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and savings institutions. Tables VI-A (Derivatives) and VII-A (Servicing, 

Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered 

savings banks that file quarterly Call Reports. Table VIII-A 

(Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured 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: http://fdic.gov/regulations/ 

resources/cbi/report/cbi-full.pdf. 

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 nonbrokered 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 gradually adjusted upward over 

time. For banking offices, banks must have more than one 

office, and the maximum number of offices starts at 40 in 1985 

and reaches 75 in 2010. The maximum level of deposits for 

any one office is $1.25 billion in deposits in 1985 and $5 billion in deposits in 2010. 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 over time from $250 million in 1985 to 

$1 billion in 2010, below which the limits on banking activities and geographic scope are waived. 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. 

(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 threshold2 

— Total assets ≥ indexed size threshold, where: 

• Loan to assets > 33% 

• Core deposits to assets > 50% 

• More than 1 office but no more than the indexed 

maximum number of offices.3 

1

 Consumer nonbank banks are financial institutions with limited charters that can make commercial loans or take deposits, but not both. 

2

 Asset size threshold indexed to equal $250 million in 1985 and 

$1 billion in 2010. 

3

 Maximum number of offices indexed to equal 40 in 1985 and 75 

in 2010. 
FDIC QUARTERLY 25 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

 

• 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/assisted institutions, 

estimated FDIC-insured deposits, as well as assessment rate 

information. Depository institutions that are not insured by the 

FDIC through the DIF are not included in the FDIC Quarterly 

Banking Profile. U.S. branches of institutions headquartered in 

foreign countries and non-deposit trust companies are not 

included unless otherwise indicated. Efforts are made to obtain 

financial reports for all active institutions. However, in some 

cases, final financial reports are not available for institutions 

that have closed or converted their charters. 

DATA SOURCES 

The financial information appearing in this publication is 

obtained primarily from the Federal Financial Institutions 

Examination Council (FFIEC) Consolidated Reports of 

Condition and Income (Call Reports) and the OTS Thrift 

Financial Reports 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 asset and liability figures used in calculating performance 

ratios represent average amounts for the period (beginning-ofperiod amount plus end-of-period amount plus any interim 

periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s) 

are included in average assets since the year-to-date income 

includes the results of all merged institutions. No adjustments 

are made for “purchase accounting” mergers. Growth rates 

represent the percentage change over a 12-month period in 

totals for institutions in the base period to totals for institutions in the current period. 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. 

4

 Maximum branch deposit size indexed to equal $1.25 billion in 1985 

and $5 billion in 2010. 

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, e.g., institutions 

can move their home offices between regions, and savings 

institutions can convert to commercial banks or commercial 

banks may convert to savings institutions. 

ACCOUNTING CHANGES 

Indemnification Assets and Accounting Standards Update No. 2012-

06 – In October 2012, the FASB issued Accounting Standards 

Update (ASU) No. 2012-06, “Subsequent Accounting for an 

Indemnification Asset Recognized at the Acquisition Date as 

a Result of a Government-Assisted Acquisition of a Financial 

Institution,” to address the subsequent measurement of an 

indemnification asset recognized in an acquisition of a financial institution that includes an FDIC loss-sharing agreement. 

This ASU amends ASC Topic 805, Business Combinations 

(formerly FASB Statement No. 141 (revised 2007),”Business 

Combinations”), which includes guidance applicable to FDICassisted acquisitions of failed institutions. 

Under the ASU, when an institution experiences a change in 

the cash flows expected to be collected on an FDIC loss-sharing indemnification asset because of a change in the cash 

flows expected to be collected on the assets covered by the 

loss-sharing agreement, the institution should account for the 

change in the measurement of the indemnification asset on 

the same basis as the change in the assets subject to indemnification. Any amortization of changes in the value of the 

indemnification asset should be limited to the lesser of the 

term of the indemnification agreement and the remaining life 

of the indemnified assets. 

The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2012. 

For institutions with a calendar year fiscal year, the ASU takes 

effect January 1, 2013. Early adoption of the ASU is permitted. 

The ASU’s provisions should be applied prospectively to any 

new indemnification assets acquired after the date of adoption 

and to indemnification assets existing as of the date of adoption arising from an FDIC-assisted acquisition of a financial 

institution. Institutions with indemnification assets arising 

from FDIC loss-sharing agreements are expected to adopt ASU 

2012-06 for Call Report purposes in accordance with the effective date of this standard. For additional information, refer to 

ASU 2012-06, available at http://www.fasb.org/jsp/FASB/ 

Page/SectionPage&cid=1176156316498. 

Goodwill Impairment Testing – In September 2011, the FASB 

issued Accounting Standards Update (ASU) No. 2011-08, 

“Testing Goodwill for Impairment,” to address concerns about 

the cost and complexity of the existing goodwill impairment 

test in ASC Topic 350, Intangibles-Goodwill and Other 

(formerly FASB Statement No. 142, “Goodwill and Other 

Intangible Assets”). The ASU’s amendments to ASC 

Topic 350 are effective for annual and interim goodwill 

impairment tests performed for fiscal years beginning after 

December 15, 2011 (i.e., for annual or interim tests performed 

on or after January 1, 2012, for institutions with a calendar 

year fiscal year). Early adoption of the ASU was permitted. 

Under ASU 2011-08, an institution has the option of first 

assessing qualitative factors to determine whether it is neces-
FDIC QUARTERLY 26 2014, VOLUME 8, NO. 2 

sary to perform the two-step quantitative goodwill impairment test described in ASC Topic 350. If, after considering 

all relevant events and circumstances, an institution determines it is unlikely (that is, a likelihood of 50 percent or less) 

that the fair value of a reporting unit is less than its carrying 

amount (including goodwill), then the institution does not 

need to perform the two-step goodwill impairment test. If the 

institution instead concludes that the opposite is true (that is, 

it is likely that the fair value of a reporting unit is less than its 

carrying amount), then it is required to perform the first step 

and, if necessary, the second step of the two-step goodwill 

impairment test. Under ASU 2011-08, an institution may 

choose to bypass the qualitative assessment for any reporting 

unit in any period and proceed directly to performing the first 

step of the two-step goodwill impairment test. 

Extended Net Operating Loss Carryback Period – The Worker, 

Homeownership, and Business Assistance Act of 2009, which 

was enacted on November 6, 2009, permits banks and other 

businesses, excluding those banking organizations that 

received capital from the U.S. Treasury under the Troubled 

Asset Relief Program, to elect a net operating loss carryback 

period of three, four, or five years instead of the usual carryback period of two years for any one tax year ending after 

December 31, 2007, and beginning before January 1, 2010. 

For calendar-year banks, this extended carryback period 

applies to either the 2008 or 2009 tax year. The amount of 

the net operating loss that can be carried back to the fifth 

carryback year is limited to 50 percent of the available taxable income for that fifth year, but this limit does not apply to 

other carryback years. 

Under generally accepted accounting principles, banks may 

not record the effects of this tax change in their balance 

sheets and income statements for financial and regulatory 

reporting purposes until the period in which the law was 

enacted, i.e., the fourth quarter of 2009. Therefore, banks 

should recognize the effects of this fourth quarter 2009 tax 

law change on their current and deferred tax assets and liabilities, including valuation allowances for deferred tax assets, in 

their Call Reports for December 31, 2009. Banks should not 

amend their Call Reports for prior quarters for the effects of 

the extended net operating loss carryback period. 

The American Recovery and Reinvestment Act of 2009, 

which was enacted on February 17, 2009, permits qualifying 

small businesses, including FDIC-insured institutions, to elect 

a net operating loss carryback period of three, four, or five 

years instead of the usual carryback period of two years for 

any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally accepted accounting principles, institutions may not record the 

effect of this tax change in their balance sheets and income 

statements for financial and regulatory reporting purposes 

until the period in which the law was enacted, i.e., the first 

quarter of 2009. 

Troubled Debt Restructurings and Current Market Interest Rates – 

Many institutions are restructuring or modifying the terms of 

loans to provide payment relief for those borrowers who have 

suffered deterioration in their financial condition. Such loan 

restructurings may include, but are not limited to, reductions 

in principal or accrued interest, reductions in interest rates, 

and extensions of the maturity date. Modifications may be 

executed at the original contractual interest rate on the loan, 

a current market interest rate, or a below-market interest rate. 

Many of these loan modifications meet the definition of a 

troubled debt restructuring (TDR). 

The TDR accounting and reporting standards are set forth in 

ASC Subtopic 310-40, Receivables – Troubled Debt 

Restructurings by Creditors (formerly FASB Statement No. 

15, “Accounting by Debtors and Creditors for Troubled Debt 

Restructurings,” as amended). This guidance specifies that a 

restructuring of a debt constitutes a TDR if, at the date of 

restructuring, the creditor for economic or legal reasons related to a debtor’s financial difficulties grants a concession to 

the debtor that it would not otherwise consider. 

In the Call Report, until a loan that is a TDR is paid in full or 

otherwise settled, sold, or charged off, it must be reported in 

the appropriate loan category, as well as identified as a performing TDR loan, if it is in compliance with its modified 

terms. If a TDR is not in compliance with its modified terms, 

it is reported as a past-due and nonaccrual loan in the appropriate loan category, as well as distinguished from other past 

due and nonaccrual loans. To be considered in compliance 

with its modified terms, a loan that is a TDR must not be in 

nonaccrual status and must be current or less than 30 days past 

due on its contractual principal and interest payments under 

the modified repayment terms. A loan restructured in a TDR 

is an impaired loan. Thus, all TDRs must be measured for 

impairment in accordance with ASC Subtopic 310-10, 

Receivables – Overall (formerly FASB Statement No. 114, 

“Accounting by Creditors for Impairment of a Loan,” as 

amended), and the Call Report Glossary entry for “Loan 

Impairment.” Consistent with ASC Subtopic 310-10, TDRs 

may be aggregated and measured for impairment with other 

impaired loans that share common risk characteristics by using 

historical statistics, such as average recovery period and 

average amount recovered, along with a composite effective 

interest rate. The outcome of such an aggregation approach 

must be consistent with the impairment measurement methods prescribed in ASC Subtopic 310-10 and Call Report 

instructions for loans that are “individually” considered 

impaired instead of the measurement method prescribed in 

ASC Subtopic 450-20, Contingencies – Loss Contingencies 

(formerly FASB Statement No. 5, “Accounting for Contingencies”) for loans not individually considered impaired that 

are collectively evaluated for impairment. When a loan not 

previously considered individually impaired is restructured and 

determined to be a TDR, absent a partial charge-off, it generally is not appropriate for the impairment estimate on the loan 

to decline as a result of the change from the impairment measurement method prescribed in ASC Subtopic 450-20 to the 

methods prescribed in ASC Subtopic 310-10. 

Troubled Debt Restructurings and Accounting Standards Update 

No. 2011-02 – In April 2011, the FASB issued Accounting 

Standards Update (ASU) No. 2011-02, “A Creditor’s 

Determination of Whether a Restructuring Is a Troubled 

Debt Restructuring,” to provide additional guidance to help 

creditors determine whether a concession has been granted to 

a borrower and whether a borrower is experiencing financial 

difficulties. The guidance is also intended to reduce diversity 

in practice in identifying and reporting TDRs. This ASU was 

effective for public companies for interim and annual periods 

beginning on or after June 15, 2011, and should have been 

applied retrospectively to the beginning of the annual period 

of adoption for purposes of identifying TDRs. The measurement of impairment for any newly identified TDRs resulting 
FDIC QUARTERLY 27 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

from retrospective application should have been applied prospectively in the first interim or annual period beginning on 

or after June 15, 2011. (For most public institutions, the ASU 

takes effect July 1, 2011, but retrospective application begins 

as of January 1, 2011.) Nonpublic companies should apply the 

new guidance for annual periods ending after December 15, 

2012, including interim periods within those annual periods. 

(For most nonpublic institutions, the ASU took effect 

January 1, 2012.) Early adoption of the ASU was permitted 

for both public and nonpublic entities. Nonpublic entities 

that adopt early are subject to a retrospective identification 

requirement. For additional information, refer to ASU 2011-

02, available at http://www.fasb.org/jsp/FASB/Page/ 

SectionPage&cid=1176156316498. 

Accounting for Loan Participations – Amended ASC Topic 860 

(formerly FAS 166) modified the criteria that must be met in 

order for a transfer of a portion of a financial asset, such as a 

loan participation, to qualify for sale accounting. These 

changes apply to transfers of loan participations on or after 

the effective date of amended ASC Topic 860 (January 1, 

2010, for banks with calendar year fiscal year), including 

advances under lines of credit that are transferred on or after 

the effective date of amended ASC Topic 860 even if the line 

of credit agreements were entered into before this effective 

date. Therefore, banks with a calendar-year fiscal year must 

account for transfers of loan participations on or after January 

1, 2010, in accordance with amended ASC Topic 860. In 

general, loan participations transferred before the effective 

date of amended ASC Topic 860 are not affected by this new 

accounting standard. 

Under amended ASC Topic 860, if a transfer of a portion of 

an entire financial asset meets the definition of a “participating interest,” then the transferor (normally the lead lender) 

must evaluate whether the transfer meets all of the conditions 

in this accounting standard to qualify for sale accounting. 

Other-Than-Temporary Impairment – When the fair value of an 

investment in an individual available-for-sale or held-tomaturity security is less than its cost basis, the impairment is 

either temporary or other-than-temporary. The amount of the 

total other-than-temporary impairment related to credit loss 

must be recognized in earnings, but the amount of total 

impairment related to other factors must be recognized in 

other comprehensive income, net of applicable taxes. To 

determine whether the impairment is other-than-temporary, 

an institution must apply the applicable accounting guidance 

– refer to previously published Quarterly Banking Profile notes: 

http://www2.fdic.gov/qbp/2011mar/qbpnot.html. 

ASC Topics 860 & 810 (formerly FASB Statements 166 & 167) – 

In June 2009, the FASB issued Statement No. 166, 

Accounting for Transfers of Financial Assets (FAS 166), and 

Statement No. 167, Amendments to FASB Interpretation 

No. 46(R) (FAS 167), which change the way entities account 

for securitizations and special purpose entities. FAS 166 

revised FASB Statement No. 140, Accounting for Transfers 

and Servicing of Financial Assets and Extinguishments of 

Liabilities, by eliminating the concept of a “qualifying specialpurpose entity,” creating the concept of a “participating interest,” changing the requirements for derecognizing financial 

assets, and requiring additional disclosures. FAS 167 revised 

FASB Interpretation No. 46(R), Consolidation of Variable 

Interest Entities, by changing how a bank or other company 

determines when an entity that is insufficiently capitalized or 

is not controlled through voting or similar rights, i.e., a “variable interest entity” (VIE), should be consolidated. Under 

FAS 167, a bank must perform a qualitative assessment to 

determine whether its variable interest or interests give it a 

controlling financial interest in a VIE. If a bank’s variable 

interest or interests provide it with the power to direct the 

most significant activities of the VIE, and the right to receive 

benefits or the obligation to absorb losses that could potentially be significant to the VIE, the bank is the primary beneficiary of, and therefore must consolidate, the VIE. 

Both FAS 166 and FAS 167 take effect as of the beginning of 

each bank’s first annual reporting period that begins after 

November 15, 2009, for interim periods therein, and for 

interim and annual reporting periods thereafter (i.e., as of 

January 1, 2010, for banks with a calendar year fiscal year). 

Earlier application is prohibited. Banks are expected to adopt 

FAS 166 and FAS 167 for Call Report purposes in accordance with the effective date of these two standards. Also, 

FAS 166 has modified the criteria that must be met in order 

for a transfer of a portion of a financial asset, such as a loan 

participation, to qualify for sale accounting. These changes 

apply to transfers of loan participations on or after the effective date of FAS 166. Therefore, banks with a calendar year 

fiscal year must account for transfers of loan participations on 

or after January 1, 2010, in accordance with FAS 166. In general, loan participations transferred before the effective date 

of FAS 166 (January 1, 2010, for calendar year banks) are not 

affected by this new accounting standard and pre-FAS 166 

participations that were properly accounted for as sales under 

FASB Statement No. 140 will continue to be reported as 

having been sold. 

Accounting Standards Codification – refer to previously published Quarterly Banking Profile notes: http://www2.fdic. 

gov/qbp/2011sep/qbpnot.html. 

DEFINITIONS (in alphabetical order) 

All other assets – total cash, balances due from depository 

institutions, premises, fixed assets, direct investments in real 

estate, investment in unconsolidated subsidiaries, customers’ 

liability on acceptances outstanding, assets held in trading 

accounts, federal funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid 

deposit insurance assessments, and other assets. 

All other liabilities – bank’s liability on acceptances, limited-life 

preferred stock, allowance for estimated off-balance-sheet credit losses, fair market value of derivatives, and other liabilities. 

Assessment base – effective April 1, 2011, the deposit insurance assessment base has 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 DIF 

deposits (deposits insured by the FDIC Deposit Insurance 

Fund) in banks’ domestic offices with certain adjustments. 

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 
FDIC QUARTERLY 28 2014, VOLUME 8, NO. 2 

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.” 

Construction and development loans – includes loans for all 

property types under construction, as well as loans for land 

acquisition and development. 

Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated 

subsidiaries, less goodwill and other ineligible intangible 

assets. The amount of eligible intangibles (including servicing 

rights) included in core capital is limited in accordance with 

supervisory capital regulations. 

Cost of funding earning assets – total interest expense paid on 

deposits and other borrowed money as a percentage of average 

earning assets. 

Credit enhancements – techniques whereby a company attempts 

to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit 

enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be 

associated with a given issuance. 

Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings 

Association (SAIF) Insurance Funds were merged in 2006 by 

the Federal Deposit Insurance Reform Act to form the DIF. 

Derivatives notional amount – the notional, or contractual, 

amounts of derivatives represent the level of involvement in 

the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent 

the amounts used to calculate contractual cash flows to be 

exchanged. 

Derivatives credit equivalent amount – the fair value of the 

derivative plus an additional amount for potential future credit exposure based on the notional amount, the remaining 

maturity and type of the contract. 

Derivatives transaction types: 

Futures and forward contracts – contracts in which the buyer 

agrees to purchase and the seller agrees to sell, at a specified future date, a specific quantity of an underlying variable or index at a specified price or yield. These contracts 

exist for a variety of variables or indices, (traditional agricultural or physical commodities, as well as currencies and 

interest rates). Futures contracts are standardized and are 

traded on organized exchanges which set limits on counterparty credit exposure. Forward contracts do not have 

standardized terms and are traded over the counter. 

Option contracts – contracts in which the buyer acquires the 

right to buy from or sell to another party some specified 

amount of an underlying variable or index at a stated price 

(strike price) during a period or on a specified future date, 

in return for compensation (such as a fee or premium). 

The seller is obligated to purchase or sell the variable or 

index at the discretion of the buyer of the contract. 

Swaps – obligations between two parties to exchange a 

series of cash flows at periodic intervals (settlement dates), 

for a specified period. The cash flows of a swap are either 

fixed, or determined for each settlement date by multiplying the quantity (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 noninterestbearing 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, 

available-for-sale securities, loans held for sale, assets and 

liabilities accounted for under the fair value option, and foreclosed assets—involves the use of fair values. During periods 

of 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. 
FDIC QUARTERLY 29 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

Loans secured by real estate – includes home equity loans, 

junior liens secured by 1-4 family residential properties, and 

all other loans secured by real estate. 

Loans to individuals – includes outstanding credit card balances 

and other secured and unsecured consumer loans. 

Long-term assets (5+ years) – loans and debt securities with 

remaining maturities or repricing intervals of over five years. 

Maximum credit exposure – the maximum contractual credit 

exposure remaining under recourse arrangements and other 

seller-provided credit enhancements provided by the reporting bank to securitizations. 

Mortgage-backed securities – certificates of participation in 

pools of residential mortgages and collateralized mortgage 

obligations issued or guaranteed by government-sponsored or 

private enterprises. Also, see “Securities,” below. 

Net charge-offs – total loans and leases charged off (removed 

from balance sheet because of uncollectibility), less amounts 

recovered on loans and leases previously charged off. 

Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to 

depositors and other creditors, expressed as a percentage of 

average earning assets. No adjustments are made for interest 

income that is tax exempt. 

Net 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 file a Thrift Financial Report (TFR), the 

valuation allowance subtracted also includes allowances for 

other repossessed assets. Also, for TFR filers the components 

of other real estate owned are reported gross of valuation 

allowances. (TFR filers began filing Call Reports effective 

with the quarter ending March 31, 2012.) 

Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their 

losses) compared to the same period a year earlier. 

“Problem” institutions – federal regulators assign a composite 

rating to each financial institution, based upon an evaluation 

of financial and operational criteria. The rating is based on a 

scale of 1 to 5 in ascending order of supervisory concern. 

“Problem” institutions are those institutions with financial, 

operational, or managerial weaknesses that threaten their 

continued financial viability. Depending upon the degree of 

risk and supervisory concern, they are rated either a “4” or 

“5.” The number and assets of “problem” institutions are 

based on FDIC composite ratings. Prior to March 31, 2008, 

for institutions whose primary federal regulator was the OTS, 

the OTS composite rating was used. 

Recourse – an arrangement in which a bank retains, in form or 

in substance, any credit risk directly or indirectly associated 

with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the 

bank’s claim on the asset. If a bank has no claim on an asset 

it has sold, then the retention of any credit risk is recourse. 

Reserves for losses – the allowance for loan and lease losses on 

a consolidated basis. 

Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. 

Excludes restructured loans and leases that are not in compliance with the modified terms. 

Retained earnings – net income less cash dividends on common and preferred stock for the reporting period. 

Return on assets – bank net income (including gains or losses 

on securities and extraordinary items) as a percentage of average total (consolidated) assets. The basic yardstick of bank 

profitability. 

Return on equity – bank net income (including gains or losses 

on securities and extraordinary items) as a percentage of average total equity capital. 

Risk-based capital groups – definition: 

Total Tier 1 

Risk-Based Risk-Based Tier 1 Tangible 

(Percent) Capital* Capital* Leverage Equity 

Well-capitalized ≥10 and ≥6 and ≥5 – 

Adequately 

capitalized ≥8 and ≥4 and ≥4 – 

Undercapitalized ≥6 and ≥3 and ≥3 – 

Significantly 

undercapitalized <6 or <3 or <3 and >2 

Critically 

undercapitalized – – – ≤2 

* As a percentage of risk-weighted assets. 

Risk Categories and Assessment Rate Schedule – The current risk 

categories became effective January 1, 2007. Capital ratios 

and supervisory ratings distinguish one risk category from 

another. Effective April 1, 2011, risk categories for large institutions (generally those with at least $10 billion in assets) 

were eliminated. [Note: Effective January 1, 2014, a small 

number of “advanced approach institutions” began reporting 

Tier 1 capital based on regulatory capital standards approved 

by the banking agencies in July 2013. For all other FDICinsured institutions, prior existing reporting will continue 

until January 2015 when mandatory compliance for all institutions is scheduled to begin. http://www.fdic.gov/regulations/ 

capital/.] The following table shows the relationship of risk 

categories (I, II, III, IV) for small institutions to capital and 
FDIC QUARTERLY 30 2014, VOLUME 8, NO. 2 

supervisory groups as well as the initial base assessment rates 

(in basis points) for each risk category. Supervisory Group A 

generally includes institutions with CAMELS composite ratings of 1 or 2; Supervisory Group B generally includes institutions with a CAMELS composite rating of 3; and Supervisory 

Group C generally includes institutions with CAMELS composite ratings of 4 or 5. For purposes of risk-based assessment 

capital groups, undercapitalized includes institutions that are 

significantly or critically undercapitalized. 

Capital Category 

Supervisory Group 

A B C 

1. Well Capitalized I 

5–9 bps II 

14 bps 

III 

23 bps 2. Adequately Capitalized II 

14 bps 

3. Undercapitalized III 

23 bps 

IV 

35 bps 

Effective April 1, 2011, the initial base assessment rates are 5 

to 35 basis points. An institution’s total assessment rate may 

be less than or greater than its initial base assessment rate as a 

result of additional risk adjustments. 

The base assessment rates for small institutions in Risk 

Category I are based on a combination of financial ratios and 

CAMELS component ratings (the financial ratios method). 

As required by Dodd-Frank, the calculation of risk-based 

assessment rates for large institutions no longer relies on longterm debt issuer ratings. Rates for large institutions are based 

on CAMELS ratings and certain forward-looking 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). In general, a highly complex institution is an institution (other than a credit card bank) with 

more than $500 billion in total assets that is controlled by a 

parent or intermediate parent company with more than $500 

billion in total assets or a processing bank or trust company 

with total fiduciary assets of $500 billion or more. The FDIC 

retains its ability to take additional information into account 

to make a limited adjustment to an institution’s total score 

(the large bank adjustment), which will be used to determine 

an institution’s initial base assessment rate. 

Effective April 1, 2011, the three possible adjustments to 

an institution’s initial base assessment rate are as follows: 

(1) Unsecured Debt Adjustment: An institution’s rate may 

decrease by up to 5 basis points for unsecured debt. The unsecured debt adjustment cannot exceed the lesser of 5 basis 

points or 50 percent of an institution’s initial base assessment 

rate (IBAR). Thus, for example, an institution with an IBAR 

of 5 basis points would have a maximum unsecured debt 

adjustment of 2.5 basis points and could not have a total base 

assessment rate lower than 2.5 basis points. (2) Depository 

Institution Debt Adjustment: For institutions that hold longterm 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 

small institutions that are not in Risk Category I and 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. After applying all possible 

adjustments (excluding the Depository Institution Debt 

Adjustment), minimum and maximum total base assessment 

rates for each risk category are as follows: 

Total Base Assessment Rates* 

Risk 

Category 

I 

Risk 

Category 

II 

Risk 

Category 

III 

Risk 

Category 

IV 

Large and 

Highly 

Complex 

Institutions 

Initial base 

assessment rate 5–9 14 23 35 5–35 

Unsecured debt 

adjustment -4.5–0 -5–0 -5–0 -5–0 -5–0 

Brokered deposit 

adjustment — 0–10 0–10 0–10 0–10 

Total Base 

Assessment rate 2.5–9 9–24 18–33 30–45 2.5–45 

* 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. 

Beginning in 2007, 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. 

Special Assessment – On May 22, 2009, the FDIC board 

approved a final rule that imposed a 5 basis point special 

assessment as of June 30, 2009. The special assessment was 

levied on each insured depository institution’s assets minus 

its Tier 1 capital as reported in its report of condition as of 

June 30, 2009. The special assessment was collected 

September 30, 2009, at the same time that the risk-based 

assessment for the second quarter of 2009 was collected. 

The special assessment for any institution was capped at 

10 basis points of the institution’s assessment base for the 

second quarter of 2009 risk-based assessment. 

Prepaid Deposit Insurance Assessments – In November 2009, 

the FDIC Board of Directors adopted a final rule requiring 

insured depository institutions (except those that are 

exempted) to prepay their quarterly risk-based deposit 

insurance assessments for the fourth quarter of 2009, and 

for all of 2010, 2011, and 2012, on December 30, 2009. 

For regulatory capital purposes, an institution may assign 

a zero-percent risk weight to the amount of its prepaid 

deposit assessment asset. As required by the FDIC’s regulation establishing the prepaid deposit insurance assessment 

program, this program ended with the final application of 

prepaid assessments to the quarterly deposit insurance 

assessments payable March 29, 2013. The FDIC issued 

refunds of any unused prepaid deposit insurance assessments on June 28, 2013. 

Risk-weighted assets – assets adjusted for risk-based capital 

definitions which include on-balance-sheet as well as offbalance-sheet items multiplied by risk-weights that range 

from zero to 200 percent. A conversion factor is used to assign 
FDIC QUARTERLY 31 2014, VOLUME 8, NO. 2 

Quarterly Banking Profile

a balance sheet equivalent amount for selected off-balancesheet accounts. 

Securities – excludes securities held in trading accounts. 

Banks’ securities portfolios consist of securities designated as 

“held-to-maturity,” which are reported at amortized cost 

(book value), and securities designated as “available-for-sale,” 

reported at fair (market) value. 

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 (http://www.treasury.gov/resource-center/ 

sb-programs/Pages/Small-Business-Lending-Fund.aspx). 

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 & 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. 

FDIC QUARTERLY 33 2014, VOLUME 8, NO. 2 

Community Banks Remain Resilient Amid 

Industry Consolidation 

Analysts agree that consolidation is a long-term trend 

that has significantly reshaped the banking industry 

over the past 30 years.1

 There has recently been 

renewed debate as to the future pace of industry consolidation and what implications this trend holds for 

community banks. This paper presents an analysis of 

long-term consolidation and its effects on community 

banks. We conclude that the recent uptick in the rate 

of consolidation is attributable to factors that are likely 

to subside once the effects of the crisis are fully behind 

us. We also find that consolidation has had much less 

impact on the community banking sector than is 

commonly believed. 

The key finding of this study is that institutions with 

assets between $100 million and $10 billion—most of 

which can be considered community banks—have 

increased in both number and in total assets since 

1985. The number of banks with assets between 

$100 million and $1 billion increased by 7 percent 

between 1985 and 2013, while the number of banks 

with assets between $1 billion and $10 billion 

increased by 5 percent. These groups of institutions 

also experienced growth in terms of total assets. The 

assets of banks between $100 million and $1 billion 

increased by 27 percent between 1985 and 2013, while 

the assets of banks between $1 billion and $10 billion 

grew by 4 percent. 

Consolidation has had its biggest net effect on the very 

smallest and the largest banks. The number of institutions with assets less than $100 million declined by 

85 percent between 1985 and 2013. Meanwhile, institutions with assets greater than $10 billion have seen 

their number almost triple, while their total assets have 

increased more than ten-fold. 

Because of the limitations of applying fixed asset-size 

thresholds over such a long period of time, we also 

analyze the effects of consolidation using the functional 

definition of community banks that was introduced in 

the 2012 FDIC Community Banking Study.

2

 Seen 

1

 For a previous FDIC study of long-term consolidation in banking, see 

Jones and Critchfield (2004). 

2

 The 2012 FDIC Study defined “community banks” in terms of 

balance-sheet characteristics that reflected a focus on lending and 

deposit-gathering activities, and on a limited geographic scope of 

operations. For more details, see: http://www.fdic.gov/regulations/ 

resources/cbi/report/CBSI-1.pdf. 

through this lens, consolidation has had a much less 

pronounced effect on the community banking sector. 

More than 90 percent of FDIC-insured institutions 

operate as community banks, a share that has steadily 

increased since the mid-1980s. Moreover, the rate of 

total attrition through failure or merger has been far 

lower among community banks than among noncommunity banks since 1985—a disparity that has become 

even more pronounced over the past decade. When 

community banks do fail or close voluntarily, almost 

two-thirds of the time the acquirer is another community bank. So while today’s community banks may be 

somewhat larger, on average, than those of 30 years ago, 

they continue to meet the definition of institutions 

providing traditional banking services to their local 

markets. 

These conclusions are somewhat at odds with the often 

expressed view that the post-crisis period will be characterized by heightened consolidation, which will 

increasingly marginalize the community banking sector. 

Our analysis shows that the projected decline of the 

community banking sector has been significantly overstated. Community banks have, in fact, remained 

highly resilient amid the long-term trend of banking 

industry consolidation. While their share of industry 

assets has declined over time, they are disproportionately important providers of credit to small businesses 

and serve hundreds of counties and thousands of 

communities that are overlooked by larger noncommunity institutions. While the overall trend of consolidation may well continue, it appears unlikely to diminish 

the importance of community banks or the role they 

play in our financial system. 

A Closer Look at the Process of Consolidation 

Before specifically evaluating the effects of consolidation on community banks, it may be useful to examine 

the process of consolidation itself. Consolidation is by 

no means a new development; in fact, it has been a 

defining trend in the U.S. banking industry since 

around 1980. After remaining fairly steady for more 

than three decades, the total number of banking and 

thrift charters declined from around 20,000 in 1980 to 

6,812 at the end of 2013 (Chart 1). While the top-line 

figures in Chart 1 appear to depict a disappearance of 

banking charters over time, it is more useful to consider 

this trend in terms of the three main components of 

structural change in banking. 
FDIC QUARTERLY 34 2014, VOLUME 8, NO. 2 

Chart 1 Chart 2 

Number of U.S. Banking and Thrift Institutions, Annual Rates of Voluntary Attrition: 1986–2013 

1934–2013 As a Percent of Charters Reporting at Previous Year-End 

Number of Charters at Year-End 0% 

30,000 

Commercial Bank and Savings Institution Charters, 

25,000 Estimated From Historical Records 

20,000 

-1% 

-2% 

-3% 

-4% 

15,000 

10,000 

Federally Insured Banks and Thrifts, 

5,000 Based on Bank Call Reports and 

Thrift Financial Reports 

0 

1934 1942 1950 1958 1966 1974 1982 1990 1998 2006 

Source: 1934–83: FDIC Historical Statistics on Banking, Tables CB03 and SI01; Federal 

Home Loan Bank Board, Savings and Home Financing Sourcebook, 1987, pp. A1–A2. 

1984–2013: FDIC, Bank Call Reports and Thrift Financial Reports. 

Average:

-5% 2002–2013 Average: (–3.3%) -6% 1986–1992 

(–3.4%)

-7% Average: 

1993–2001 Voluntary Inter-Company Mergers -8% (–5.4%) Intra-Company Consolidation of 

Charters -9% 

Other Closings 

-10% 

1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 

Source: FDIC. 

Voluntary closures have slowed since 2001. The most 

important component of long-term consolidation in 

banking is the voluntary closure of bank charters, which 

has accounted for around 80 percent of the total attrition in charters that has taken place since 1985. Voluntary closures of charters occur through intra-company 

consolidation of commonly owned charters, inter-company 

mergers, and, occasionally, through self-liquidation. It is 

useful to think about intra-company consolidation as a 

means by which an existing bank holding company can 

rationalize its internal structure by combining charters. These consolidations reduce the number of charters, but have no effect on the total number of banking 

organizations. In contrast, inter-company mergers are a 

means by which banking organizations can expand their 

size and geographic reach by merging with or acquiring 

charters operating under separate ownership. 

Chart 2 depicts the annual rate of voluntary attrition, 

and divides the period since 1985 into three distinct 

periods. These include two periods of relatively slow 

voluntary attrition—the first between 1986 and 1992 

when the annual voluntary attrition averaged 3.4 

percent, and the second between 2002 and 2013 when 

the annual rate averaged 3.3 percent. During these 19 

years of relatively slow voluntary attrition, the annual 

rate exceeded 4.5 percent in only one year. These periods 

were divided by a period of more rapid voluntary attrition between 1993 and 2001 when voluntary closings 

exceeded 4.5 percent of existing charters in every year. 

The period of highest rates of voluntary attrition 

immediately followed a period of changes in federal 

and state law, during which geographic barriers to 

banking activities were significantly relaxed. Before the 

1980s, depository institutions were subject to a range of 

geographic restrictions, interest rate ceilings, and other 

limitations that had been introduced in response to the 

banking crisis that accompanied the Great Depression. 

Around 1980, however, increasing disintermediation 

from traditional banks, and especially thrifts, prompted 

a series of legislative measures to enable depository 

institutions to more effectively compete with nonbank 

providers.3 

These regulatory changes at the state and federal levels 

virtually eliminated the geographic restrictions on 

banking activities that applied to many states prior to 

1980. While only 16 states permitted unrestricted intrastate branching in 1984, by 1994 the number had risen 

to 40.4 Similarly, while 42 states restricted interstate 

combinations of banking charters in 1984, by 1994 only 

Hawaii retained this restriction.5 The Interstate Banking and Branching Efficiency Act of 1994 (Riegle-Neal) 

introduced full interstate branching, which further 

facilitated the consolidation of charters within banking 

companies. It was in the immediate aftermath of this 

liberalization of geographic restrictions that the industry 

3

 The Depository Institutions Deregulation and Monetary Control Act of 

1980 (DIDMCA) and the Garn-St. Germain Depository Institutions Act 

of 1982 (Garn-St. Germain) lowered net worth requirements and 

expanded investment powers for savings institutions, eliminated the 

Regulation Q interest-rate ceilings on bank and thrift deposits, and 

increased federal deposit insurance coverage from $40,000 to 

$100,000. Also around this time, state usury laws that placed interestrate ceilings on consumer loans were being superseded by a 1978 

U.S. Supreme Court ruling that permitted banks to follow the usury 

ceiling in place in their home state. 

4

 Strahan (2002). The District of Columbia is not included in these 

state counts. 

5

 Strahan (2002). 
FDIC QUARTERLY 35 2014, VOLUME 8, NO. 2 

Community Banks Remain Resilient Amid Industry Consolidation 

Chart 3 

Annual Rates of Failure: 1986–2013 

As a Percent of Charters Reporting at Previous Year-End 

0% 

-1% 

-2% 

-3% 

-4% 

-5% 

-6% 

-7% 

-8% 

-9% 

-10% 

1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 

Average: 

1986–1993 

(–1.6%) 

Average: 

2008–2013 

(–1.0%) 

Average: 

1994–2007 

(–0.05%) 

Source: FDIC. 

experienced its highest annual rates of voluntary 

consolidation. This relaxation of these geographic 

restrictions was conducive to both the consolidation of 

charters within existing organizations and the acquisition of charters operated under different ownership.6 

However, in some sense this represents a one-time 

historical factor that by now, some 20 years or more 

after the fact, has diminished in importance as a driver 

of industry consolidation. 

Failures rose during the recent crisis, but are now 

abating. The second most important factor contributing to consolidation since 1985 has been bank and thrift 

failures. Between 1985 and 2013, a total of 2,580 federally insured banks and thrifts failed. Failures have 

accounted for slightly less than 17 percent of all charter 

attrition since 1985. The vast majority of those failures 

have taken place within two concentrated waves: one 

during the 1980s and early 1990s, and the other beginning in 2008. 

Chart 3 depicts annual percentage rates of failure for 

federally insured banks and thrifts. The chart divides the 

period since 1985 into distinct eras that coincide with 

two crisis periods. The annual rate of failure ranged 

between 0.3 percent and 3.2 percent in every year 

between 1986 and 1993, as the banking and thrift 

industries were experiencing credit losses associated with 

commercial real estate and construction lending and a 

series of regional economic downturns.7

 After 1993, the 

6

 See Berger, Demsetz and Strahan (1999), p. 150. 7

 For a detailed analysis of the complex combination of causes that led 

to the extraordinary number of bank failures in the 1980s and early 

1990s, see FDIC (1997). 

annual rate of failure never exceeded 0.1 percent in any 

year until 2008, when the industry experienced a second 

wave of failures associated with the recent financial 

crisis. The annual rate of failure once again equaled or 

exceeded 0.3 percent in every year between 2008 and 

2013, peaking in 2010 at 2 percent. In all, 97 percent of 

the failures that have taken place since 1985 have 

occurred during these two crisis periods. 

While failures have been an important factor contributing to the banking industry consolidation since 1985, it 

is by no means assured that they will continue to 

contribute to consolidation to the same degree in the 

years ahead. Substantial reforms put in place since the 

recent crisis, including the Dodd-Frank Wall Street 

Reform and Consumer Protection Act of 2010 (DoddFrank) and the Basel III capital standards, are designed 

to contribute to a more stable banking environment in 

the years ahead. To the extent that bank risk managers 

and bank supervisors are successful in creating a more 

stable banking environment in the years ahead, failures 

may contribute much less to consolidation than they 

have since 1985. 

New charters represent a highly cyclical component 

of consolidation. The other main component of 

consolidation is new banking charters. The rate at which 

new charters have been added to the industry has 

proven to be highly cyclical. Since year-end 1985, the 

industry has established new federally insured institutions at an average annual rate of 1.3 percent 

(Chart 4). The establishment of new institutions has 

been strongest during periods of economic expansion 

and strong financial performance on the part of the 

banking industry. The pace of chartering activity has 

undergone three distinct lulls that have occurred 

during and immediately after the recessions of 1990-91, 

2001, and 2008-09. The most recent crisis period has 

taken a particularly severe toll on the pace of chartering activity. Only 15 new charters were established 

between the end of 2009 and the end of 2013. The 

highly cyclical nature of chartering activity suggests 

that, in the wake of the worst financial crisis since the 

Great Depression, a significant drop-off in chartering 

activity should not have been wholly unexpected. 

If the experience of the last banking crisis is any guide, 

chartering activity can be expected to recover over the 

next few years as the effects of the crisis recede. As 

depicted in Chart 4, the lowest levels of industry-wide 

chartering activity before 2008 were registered in 1993 

and 1994, when new charters amounted to fewer than 
FDIC QUARTERLY 36 2014, VOLUME 8, NO. 2 

Chart 4 Chart 5 

Annual Rates of New Chartering Activity: 1986–2013 

New Charters Established During Year as a Percent of 

Existing Charters at Previous Year-End 

3.0% 

2.5% 

2.0% 

1986–2013 

Average: 1.5% 1.3% 

1.0% 

0.5% 

0.0% 

1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 

Source: FDIC. 

All Net Consolidation in Charters Since 1985 

Has Occurred Among Banks With Assets

Less Than $100 Million 

Number of Federally Insured Banks and Thrift Institutions 

20,000 Percent Change, 

18,000 Asset Size Group 1985–2013 

<$100M –85% 16,000 $100M-$1B +7% 

14,000 $1B-$10B +5% 

12,000 >$10B +197% 

10,000 

8,000 

6,000 

4,000 

2,000 

0 

1985 1989 1993 1997 2001 2005 2009 2013 

Source: FDIC. 

0.5 percent of existing institutions. By 1999, however, 

the pace of chartering activity had risen to 2.6 

percent—the fastest of any year since 1985 and twice 

the annual average for the past 28 years. There are 

certainly reasons to think that chartering activity in 

this cycle might not recover as quickly or to the same 

degree in this recovery. However, to the extent that the 

pace of chartering activity does increase, we can expect 

the rate of net consolidation to slow in coming years. 

Effects of Consolidation on the Size Distribution 

of Banks 

Consolidation has mainly affected the smallest and the 

largest institutions. Consolidation since 1985 has had 

two main effects on the size distribution of the banking 

industry. It has dramatically reduced the number of 

institutions with assets less than $100 million, while 

greatly increasing the size and share of assets held by the 

largest institutions. Notably however, consolidation has 

had much less effect on institutions operating in the size 

categories between $100 million and $10 billion, which 

currently encompass most community banks. 

All of the net reduction in the number of bank and 

thrift charters between 1985 and 2013 can be 

accounted for by the decline in the number of institutions with assets less than $100 million, which fell by 

85 percent over this period (Chart 5). The number of 

institutions with assets less than $25 million declined 

by 96 percent during this period, from 5,717 to just 

205. While the number of institutions with assets 

between $25 million and $100 million also declined by 

77 percent during this period, some 1,851 institutions 

continued to operate in this size category in 2013. 

It is important not to misread the net decline in the 

number of small charters as an indicator of their relative 

success or longevity. Among charters operating at the 

end of 1985, the rates of failure, voluntary closure, and 

overall attrition through year-end 2013 were lower for 

institutions that started out with assets less than $100 

million than for those in any other size group (Chart 6). 

Equivalently, the proportion of institutions starting out 

with less than $100 million in assets in 1985 that were 

still operating in 2013 was greater than that of any 

other size group.8 

The second way that consolidation has reshaped the 

size distribution of the banking industry is by generating 

tremendous growth in the size and share of industry 

assets held by the largest banking companies. The share 

of industry assets held by the top 10 banking organizations rose from 19 percent as late as 1990 to 56 percent 

at the end of 2013. In all, the total assets of institutions 

with assets greater than $10 billion grew from $1.1 trillion (28 percent of industry assets) in 1985 to $11.9 

trillion (81 percent of industry assets) in 2013 

(Chart 7). 

Institutions with assets between $100 million and 

$10 billion have increased in number and total assets. 

Somewhat overlooked amid these large changes at 

either end of the size distribution is the relative stability 

8

 The reason institutions in this smallest size group could experience 

the lowest rate of attrition and yet see their numbers decline the most 

in percentage terms was that so many of them managed to grow into 

one of the larger size categories. In all, some 2,777 of the institutions 

that started out in 1985 with assets less than $100 million were still 

reporting at year-end 2013 in one of the larger size categories. In fact, 

12 of them reported total assets of more than $10 billion in 2013. 
FDIC QUARTERLY 37 2014, VOLUME 8, NO. 2 

Community Banks Remain Resilient Amid Industry Consolidation 

Chart 6 

Rates of Long-Term Attrition by Size Class, 1985–2013 

Percent of Institutions Reporting at Year-End 1985 

100% Attrition Rate: 

Attrition Rate: 90% 

Failed 

22% 

Voluntarily 

Merged or 

Consolidated 

68% 

90% Attrition Rate: 83% 

Failed 

15% 

Voluntarily 

Merged or 

Consolidated 

68% 

81% 

80% Attrition Rate: 

70% 67% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Failed 

11% 

Voluntarily 

Merged or 

Consolidated 

56% 

Failed 

11% 

Voluntarily 

Merged or 

Consolidated 

69% 

<$100M $100M-$1B $1B-$10B >$10B 

Year-End 1985 Assets 

Source: FDIC.

that has been observed among banks between $100 

million and $10 billion in assets. As depicted in 

Chart 5, the number of banks with assets between 

$100 million and $1 billion increased by 7 percent 

between 1985 and 2013, while the number of banks 

with assets between $1 billion and $10 billion increased 

by 5 percent. These groups of institutions also experienced growth in terms of total assets. The assets of 

banks between $100 million and $1 billion increased by 

27 percent between 1985 and 2013, while banks with 

assets between $1 billion and $10 billion grew by 

4 percent (Chart 7). 

One reason why this stability in the $100 million to 

$10 billion size category is so important for this study is 

that it is in these size groups where most community 

banks currently operate. At year-end 2013, some 68 

percent of community bank charters held assets 

between $100 million and $10 billion.9

 Another reason 

not to overlook the relative stability of these institutions is the research that has recently been done on 

economies of scale in banking.10 A recent FDIC study 

explored the issue of economies of scale in community 

9

 The term “community bank” here refers to institutions meeting the 

definition established in the 2012 FDIC Community Banking Study. 10 The term economies of scale refers to the relationship between the 

cost of producing a unit of output and the level of output. To the 

extent that average costs fall with the level of output, then a firm can 

be said to experience economies of scale. The existence of economies 

of scale is important to understanding consolidation in banking. To the 

extent that they exist, economies of scale can render smaller institutions uncompetitive, making them more likely to exit the industry over 

time. Improved operational efficiency has been posited as one of three 

main motivations behind bank mergers, with the other two being 

increased market power and increased access to the regulatory safety 

net. See Berger, Demsetz and Strahan (1999). 

Chart 7 

Only the Smallest Institutions Have Seen an 

Aggregate Decline in Total Assets Since 1985 

Total Assets of Institutions in Size Group, Dollars in Trillions 

$16 Percent 

$14 

$12 

$10 

$8 

$6 

$4 

$2 

$0 

1985 1989 1993 1997 2001 2005 2009 2013 

Source: FDIC. 

< $100 Mil. 

$100 Mil. - $1 Bil. 

$1 Bil. - $10 Bil. 

> $10 Bil. 

Change in Assets, 

–76% 

1985–2013 

+27% 

+4% 

+972% 

Asset Size Group 

banking and the extent to which the presence of economies of scale may have induced mergers and acquisitions that contributed to banking industry 

consolidation over time.11 While the magnitude of 

economies of scale among community banks was found 

to vary according to lending specialization, most of the 

cost benefits from scale appear to be achieved for 

community banks with as little as $100 million in assets 

(Charts 8 and 9). What this implies is that while economies of scale may help to explain the large declines 

that have occurred over time in the number of banks 

with assets less than $100 million, they do not appear 

to have had nearly the same effect on banks bigger 

than $100 million. As such, economies of scale do not 

appear to be working against the majority of community banks. 

Community Banks Have Been Highly Resilient 

Amid Consolidation 

By focusing strictly on size group definitions, the previous discussion provides only a limited account of the 

effect of consolidation on community banks. In part, 

these shifts in the asset size distribution reflect the limitations of relying on fixed asset-size categories, as any 

yardstick measured in nominal dollars is likely to shrink 

over such a long period of time.12 A more robust analysis of how consolidation affects community banks 

requires a functional definition of the community bank 

that is not strictly based on asset size. This is precisely 

11 Jacewitz and Kupiec (2012). 

12 Between 1985 and 2013 the consumer price index increased by 2.2 

times, the total assets held by federally insured banks and thrifts rose 

by 2.7 times, and the nominal size of U.S. Gross Domestic Product 

(GDP) rose by 3.9 times. 
FDIC QUARTERLY 38 2014, VOLUME 8, NO. 2 

Chart 8 Chart 9 

For Some Community Bank Lending Specialties,

Economies of Scale Are Realized at 

Very Small Asset Sizes 

Estimated Average Costs as a Function of Asset Size, 

FDIC-Insured Community Banks 

$10,000,000 $100,000,000 $1,000,000,000 $10,000,000,000 

Estimate 

95% Confidence 

Agricultural Lending Specialists, 2006 

Total Assets 

Source: Jacewitz and Kupiec (2012). 

3% 

4% 

5% 

6% 

7% 

8% 

9% 

10% 

Most Economies of Scale for Community Banks Are 

Realized at an Asset Size of Around $100 Million 

Estimated Average Costs as a Function of Asset Size, 

FDIC-Insured Community Banks 

3% 

4% 

5% 

6% 

7% 

8% 

9% 

10% 

$10,000,000 $100,000,000 $1,000,000,000 $10,000,000,000 

Estimate 

95% Confidence 

CRE Lending Specialists, 2006 

Total Assets 

Source: Jacewitz and Kupiec (2012). 

the type of definition that was introduced in the 2012 

FDIC Community Banking Study. 

While they are frequently thought of strictly in terms of 

asset size, community banks are more accurately 

described in terms of how and where they conduct business. Community banks tend to focus on providing 

essential banking services in their local communities. 

They obtain most of their core deposits locally and 

make many of their loans to local businesses. For this 

reason, they are often considered to be “relationship” 

bankers as opposed to “transactional” bankers. This 

means that they have specialized knowledge of their 

local community and their customers. Because of this 

expertise, community banks tend to base credit decisions on local knowledge and nonstandard data 

obtained through long-term relationships and are less 

likely to rely on the models-based underwriting used by 

larger banks. 

The 2012 FDIC Study incorporated a number of these 

considerations into a new research definition of the 

community bank based on publicly available data that 

describe banking activities and the institution’s 

geographic scope of operations.13 Because this definition is not strictly based on a fixed asset-size threshold, 

it does not automatically “define away” community 

banks as smaller institutions grow, merge, or acquire 

other banks. An implementation of this definition 

13 Appendix A of the 2012 FDIC Study details the implantation of this 

definition using publicly available data. See: http://www.fdic.gov/ 

regulations/resources/cbi/report/CBSI-A.pdf. Listings of FDIC-insured 

institutions according to whether they meet this definition are provided 

on the FDIC website at: http://www.fdic.gov/regulations/resources/cbi/ 

data.html 

using year-end 2012 data resulted in the identification 

of 6,544 community banking charters operating within 

6,141 community banking organizations.14 Based on 

this more robust definition, we are better able to 

analyze the effects of consolidation on institutions 

engaged in community banking, as opposed to institutions operating within arbitrary, fixed asset-size 

thresholds. 

The vast majority of FDIC-insured institutions operate as community banks. The most obvious indicator 

of the resilience of community banks in the face of 

industry consolidation is the fact that some 93 percent 

of FDIC-insured banking charters met the community 

bank definition at year-end 2013, up from 87 percent at 

the end of 1985 (Chart 10). While the total number of 

federally insured institutions declined by 62 percent 

over this period, the decline among noncommunity 

banks (78 percent) was actually greater than that 

among community banks (60 percent). 

Notwithstanding the relative stability in the community bank share of banking charters, the community 

bank shares of offices and assets have steadily declined 

since 1985. As a share of total banking offices, community banks have experienced a gradually declining share 

over time, from 53 percent in 1985 to 35 percent in 

2013 (Chart 11). In large part, this trend reflects the 

large increases in geographic scope seen among 

14 The community bank analysis conducted in this paper generally 

follows the convention established in FDIC (2012) and Backup (2013) 

of defining community banks as of the end of each calendar year. The 

exception in this paper is our analysis of calendar-year 2013, which is 

based on community bank definitions as of year-end 2012. 
FDIC QUARTERLY 39 2014, VOLUME 8, NO. 2 

Community Banks Remain Resilient Amid Industry Consolidation 

Chart 10 

FDIC-Insured Community Banks and Noncommunity Banks, 1985–2013 

Banking Charters 

Number of Federally Insured Banking Charters 

Source: FDIC. 

Percent of Federally Insured Banking Charters 

1985 1989 1993 1997 2001 2005 2009 2013 1985 1989 1993 1997 2001 2005 2009 2013 

0 

2,000 

4,000 

6,000 

8,000 

10,000 

12,000 

14,000 

16,000 

18,000 

20,000 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% 

Noncommunity Banks 

Community Banks 

Chart 11 

FDIC-Insured Community Banks and Noncommunity Banks, 1 85–2013 

Banking Ofÿces 

Number of Offices 

Source: FDIC. 

Percent of Industry Offices 

1985 1989 1993 1997 2001 2005 2009 2013 1985 1989 1993 1997 2001 2005 2009 2013 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% Noncommunity Banks 

Community Banks 

0 

20,000 

40,000 

60,000 

80,000 

100,000 

120,000 

noncommunity banks over this period. The average 

number of offices operated by noncommunity banking 

organizations grew from 83 offices in 1985 to 154 

offices in 2013, while the average number of offices 

operated by community banking organizations grew 

from 3 to 6. 

The community bank share of banking industry assets 

also underwent a secular decline over this period 

(Chart 12). While community banks held 37 percent 

of industry assets in 1985, their share declined to just 

14 percent by 2013. However, most of the gain in the 

share of industry assets held by noncommunity banks 

was concentrated in just a handful of institutions. 

Excluding the ten largest banking organizations, the 

community bank share of industry assets would have 

been 45 percent in 1985 and 31 percent in 2013. 

The rate of long-term charter attrition has been far 

lower for community banks than for noncommunity 

banks—particularly over the past decade. As 

described earlier in the case of banks with assets under 

$100 million, simply tracking the net number of institutions in a group over time does not necessarily 

provide the clearest picture of their relative success or 

longevity. It is also instructive to look to their rate of 

total attrition over time as a measure of their long-term 

staying power. Among institutions operating at yearend 1985, some 68 percent of the community banks 

had failed, merged or otherwise consolidated by 2013, 

compared to 94 percent of noncommunity banks 

(Chart 13). This disparity in rates of total attrition is 

even more startling when measured during the period 

of relatively slow voluntary attrition since 2003. 

Between year-end 2003 and year-end 2013, the total 
FDIC QUARTERLY 40 2014, VOLUME 8, NO. 2 

Chart 12 

FDIC-Insured Community Banks and Noncommunity Banks, 1985–2013 

Total Assets 

Assets in Trillions of Dollars 

Source: FDIC. 

Percent of Industry Assets 

1985 1989 1993 1997 2001 2005 2009 2013 1985 1989 1993 1997 2001 2005 2009 2013 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% 

Noncommunity Banks 

Community Banks 

$0 

$2 

$4 

$6 

$8 

$10 

$12 

$14 

$16 

Chart 13 

Attrition Rates of Community and Noncommunity Banks 

1985–2013 2003–2013 

Percent of Institutions Reporting Year-End 1985 Percent of Institutions Reporting Year-End 2003 

Community Banks Noncommunity Banks 0% 

Failed -12% 

Voluntarily 

Merged or 

Consolidated 

-55% 

0% 

-10% 

Failed -9% 

Voluntarily 

Merged or 

Consolidated 

-86% 

-10% 

-20% -20% 

-30% -30% 

-40% -40% 

-50% -50% 

-60% -60% 

-70% Attrition Rate: -70%

68% -80% -80% 

-90% -90% 

Attrition Rate: -100% -100% 

94% 

Community Banks Noncommunity Banks 

Voluntarily Merged 

or Consolidated 

-25% 

Failed -5% Failed -5%

Attrition Rate: 

29% 

Voluntarily 

Merged or 

Consolidated 

-56% 

Attrition Rate: 

61% 

Source: FDIC. 

attrition rate for community banks was 29 percent, 

compared to 61 percent for noncommunity banks. The 

failure rate was identical for the two groups, rounding 

to 5 percent. 

Despite the perception that community banks are losing 

their place in the banking industry as a result of consolidation, the data show that over the past decade they 

have failed just as often as noncommunity banks, while 

their rate of total attrition was less than half that of 

noncommunity banks. 

When community banks are closed through failure or 

voluntary merger, nearly two-thirds of the time the 

acquirer is another community bank. The attrition of 

charters over the past decade, depicted on the right 

hand side of Chart 13, resulted in the acquisition of 

over 2,500 community bank charters by other 

institutions. While this could be interpreted as a net 

loss to the community banking sector, this would not 

necessarily be the case if the acquirer were also a 

community bank. In that event, the resulting institution would likely continue to carry out traditional lending and deposit gathering activities within a fairly 

limited geographic area, with relatively little impact on 

the nature of banking services provided to the customers of the bank or the communities it serves. 

Analysis of the 2,579 community bank charters that 

were acquired between year-end 2003 and year-end 

2013 shows that 65 percent were acquired by other 

community banks (Chart 14). Among community 

banks with assets less than $100 million, the share 

acquired by other community banks was 85 percent, 

and among those with assets between $100 million and 
FDIC QUARTERLY 41 2014, VOLUME 8, NO. 2 

Community Banks Remain Resilient Amid Industry Consolidation 

Chart 14 

Small Community Banks Have Been Overwhelmingly 

Acquired by Other Community Banks Since 2003 

Percent of Closed Community Bank Charters Acquired by Other Community Banks 

100% 

All Closed 90% 85% Community Banks 80% 2003–2013: 

70% 65% 

56% 

50% 

40% 

30% 

20% 

60% 

10% 

10% 

0% 

<$100M $100M-$1B $1B-$10B 

Assets of Closed Community Bank 

Source: FDIC. 

$1 billion, the share acquired by community banks was 

56 percent.15 

There may be two reasons why the percentage of 

community banks acquired by other community banks 

declines as asset size increases. One is that in most 

mergers the substantially larger institution acquires the 

smaller institution. Of the 1,668 community bank charters acquired as part of voluntary inter-company mergers between year-end 2003 and year-end 2013, the 

acquiring banking organization was larger than the 

target organization in 83 percent of the cases. This 

means that the ranks of potential community bank 

acquirers diminish rather quickly as the size of a potential merger target increases. While 62 percent of institutions with assets between $1 billion and $10 billion met 

the community bank definition at year-end 2013, only 

2 percent of banks over $10 billion did so. 

In addition, small community banks have proven to be 

far more likely than larger institutions to be acquired 

through voluntary transactions. Of community banks 

acquired between 2003 and 2013, only 9 percent of 

those with assets less than $100 million were failed 

institutions, compared to 21 percent of banks with 

assets between $100 million and $1 billion and 23 

percent of those with assets between $1 billion and 

$10 billion. A higher share of “forced sales” among 

these larger acquisition targets may reduce the odds of 

finding a suitable community bank acquirer at the time 

of failure. 

15 Only 158 (6 percent) of the 2,579 community banks that were 

acquired between 2003 and 2013 held total assets of more than 

$1 billion at the time of acquisition. 

Chart 15 

Share of 2003 Community Banks Still Under 

Community Bank Control in 2013 

Percent of 2003 Community Bank Charters Status as of Year-End 2013: 

100% Acquired by Community Banks Total 94% 

Still Operating as Community 90% 

71% 

23% 

Total 84% Banks 

80% 

70% 

60% 

69% 

15% 

Total 48% 

50% 

40% 

30% 

20% 

10% 

0% 

<$100M $100M-$1B $1B-$10B 

Year-End 2003 Assets 

Source: FDIC. 

45% 

2%

The net result of community bank attrition and acquisitions over the past decade is depicted in Chart 15. 

The chart compares the percent of 2003 community 

banks, in three size classes, that either continued to 

report as community banks in 2013 or that had been 

acquired by another community bank sometime during 

the decade. Ninety-four percent of the community 

banks that started out in 2003 with assets less than 

$100 million either continued to report as a community bank in 2013 or had been acquired by another 

community bank sometime during the decade. For 

community banks that started out with assets between 

$100 million and $1 billion, the share was 84 percent. 

By contrast, fewer than 50 percent of community 

banks that started out with assets between $1 billion 

and $10 billion continued to operate as community 

banks at the end of the decade. 

These results suggest a significant degree of underlying stability in the structure of the community banking sector overall, and especially among the smaller 

size classes of community banks. While attrition has 

led to consolidation among these institutions over 

the past decade, the vast majority have remained 

part of the community banking sector. It is in the 

largest size class of community banks—those with 

assets over $1 billion—that we see more institutions 

leaving the community banking sector either by 

changing their business model (and thereby no 

longer meeting the community bank definition) or 

by being acquired by a noncommunity bank. For 

perspective, it is useful to note that fewer than 5 

percent of community banks held assets greater than 

$1 billion at year-end 2013. 
FDIC QUARTERLY 42 2014, VOLUME 8, NO. 2 

Chart 16 

Community Banks Have Grown Somewhat Larger 

Over Time, in Part as a Result of Consolidation 

Asset Distribution of Community Banking Organizations 

Dollars in Millions 

$1,000 

$900 1985 2013 

$800 $205 million 90th Percentile $731 million 

$40 million Median $167 million 90th Percentile $700 

$11 million 10th Percentile $45 million $600 

$500 

$400 

$300 

$200 Median 

$100 

$0 

10th Percentile 

1985 1990 1995 2000 2005 2010 

Source: FDIC. 

Compared to the mid-1980s, today’s community 

banking sector is composed of somewhat larger institutions that continue to provide essential banking 

services to a limited geographic market. We have 

shown that community banks have experienced relatively low rates of attrition and, when they do exit the 

industry, are usually acquired by other community 

banks. After nearly 30 years of industry consolidation, 

the median community bank in 2013 had grown to 

$167 million, more than four times the median size in 

1985 (Chart 16). 

This increase in the median size of community banks is 

consistent with both the large declines that have been 

observed in the number of very small charters (especially those with assets less than $25 million) and the 

existence of economies of scale at these very small asset 

sizes. It does not comport with claims that only community banks with assets of $1 billion or more could be 

considered viable.16 In fact, almost 90 percent of 

community banks operating at the end of 2013 held 

total assets of less than $730 million. 

Many of today’s community banks have survived two 

episodes of bank failures and a long-term process of 

consolidation that has reduced their total number by 

around one-half. What they do have in common with 

community banks from previous eras is a focus on 

providing essential banking services in their local 

communities. Amid the changes associated with consolidation, community banks continue to serve this core 

function in our economy much as they always have. 

16 See “Small Banks Look to Sell as Rules Bite,” Wall Street Journal, 

April 3, 2014, p. C-1. 

As defined in the 2012 FDIC Study, community banks 

are vitally important sources of small loans to U.S. 

farms and businesses and as providers of mainstream 

banking services to rural communities, small towns, and 

urban neighborhoods that are frequently overlooked by 

larger banks. At year-end 2012, community banks held 

just 14 percent of banking industry assets, but held 46 

percent of the industry’s small loans to farms and businesses.17 While they held just 18 percent of banking 

industry deposits in 2012, they held the majority of 

deposits in banking offices located in both rural counties and micropolitan counties. In addition, there are 

more than 600 U.S. counties (almost one fifth of all 

U.S. counties) that would not have had any physical 

banking offices operated by FDIC-insured institutions if 

not for those operated by community banks. 

Conclusion 

The post-crisis period has brought renewed debate as to 

the future pace of banking industry consolidation and 

the possible implications for community banks. Despite 

the concerns of some that a period of heightened 

consolidation could diminish the prospects of community banks, there are several reasons to think that these 

concerns may be significantly overstated. 

Consolidation is by no means a recent development. 

Instead, it is a long-term trend that has been reshaping 

the banking industry since around 1980. About 80 

percent of the charter attrition that has been observed 

since 1985 has taken the form of voluntary closings, 

mainly consolidations within holding companies or 

voluntary mergers between banking organizations. The 

period when the pace of voluntary consolidation was 

most rapid was between 1993 and 2001, shortly after 

geographic restrictions on banking activities were 

virtually eliminated. To the extent that these one-time 

regulatory changes took place 20 years or more in the 

past, their impact on future consolidation is likely to 

be limited. 

Another 20 percent of charter attrition since 1985 has 

taken place through bank failures, mainly during the 

crisis periods of the late 1980s and early 1990s and since 

2007. To the extent that regulatory reforms, prudential 

supervision and bank risk management can ward off a 

repeat of these episodes, failures also figure to contribute less to charter attrition going forward. 

17 These year-end 2012 calculations for community banks are found in 

Backup (2013). 
FDIC QUARTERLY 43 2014, VOLUME 8, NO. 2 

Community Banks Remain Resilient Amid Industry Consolidation 

New chartering activity has brought new resources into 

the banking sector over time, replenishing the number 

of charters amid ongoing attrition. Chartering has 

proven to be highly cyclical over time, and never more 

so than during and after the recent crisis. If the experience of the last banking crisis is any guide, chartering 

activity can be expected to recover over the next few 

years as the effects of the crisis recede. To the extent 

that this turns out to be the case, we can expect the 

rate of net consolidation to slow in coming years. 

Much attention has been focused on the effects that 

consolidation has had on the smallest and the largest 

institutions. While all of the net reduction in the 

number of banking charters can be explained by the 

decline in the number of banks with assets less than 

$100 million, the largest institutions have seen tremendous increases in their size and share of industry assets. 

Too often overlooked is the relative stability among 

institutions with assets between $100 million and 

$10 billion, which have seen their number and their 

total assets grow amid industry consolidation since 

1985. The disparity between the decline in very small 

charters and growth among charters between $100 

million and $10 billion suggests that economies of scale 

offer only a limited explanation for consolidation, and 

that community banks have been much less affected by 

consolidation than is commonly thought to be the case. 

Conducting analysis using the FDIC’s functional definition of the community bank further demonstrates the 

resilience of community banks in the face of long-term 

consolidation. After more than 30 years of industry 

consolidation, well more than 90 percent of banking 

charters met the FDIC’s community bank definition at 

the end of 2013. Second, the rate of long-term charter 

attrition has been far lower for community banks than 

for noncommunity banks, particularly over the past 

decade. In addition, when community banks are closed 

through failure or voluntary merger, almost two-thirds 

of the time the acquirer has been another community 

bank. In these cases, the nature of banking services 

provided to the customers and communities served by 

these institutions can be expected to remain relatively 

unaffected by consolidation. 

The net result is a community banking sector made up 

of institutions that tend to be somewhat larger than 

was the case in 1985, but that otherwise continue, as 

before, to make loans and take deposits within a fairly 

limited geographic area. After more than 30 years of 

industry consolidation, community banks still serve as 

vital sources of credit for small businesses and providers of banking services to communities that might not 

be served by noncommunity banks. The available 

evidence strongly suggests that they will continue 

to carry out these important functions for the 

foreseeable future. 

Authors: Benjamin R. Backup, Economic Analyst 

Division of Insurance and Research 

Richard A. Brown, Chief Economist 

Division of Insurance and Research 

References 

Backup, Benjamin R. “Community Bank Developments in 

2012,” FDIC Quarterly, 7 (4), 2013. http://www.fdic.gov/ 

bank/analytical/quarterly/2013_vol7_4/article.pdf. 

Berger, Allen N., Rebecca S. Demsetz and Philip E. Strahan. 

“The Consolidation of the Financial Services Industry: 

Causes, Consequences and Implications for the Future,” 

Journal of Banking and Finance 23 (2), 1999. 

Federal Deposit Insurance Corporation, History of the 

Eighties—Lessons for the Future, December 1997. http:// 

www.fdic.gov/bank/historical/history/. 

Federal Deposit Insurance Corporation, FDIC Community 

Banking Study, December 2012. http://www.fdic.gov/ 

regulations/resources/cbi/study.html. 

Jacewitz, Stefan and Paul Kupiec. “Community Bank 

Efficiency and Economies of Scale,” FDIC Special Study, 

December 2012. http://www.fdic.gov/regulations/resources/ 

cbi/report/cbi-eff.pdf. 

Jones, Kenneth D. and Tim Critchfield. “Consolidation in the 

U.S. Banking Industry: Is the ‘Long Strange Trip’ About to 

End?” Federal Deposit Insurance Corporation, The Future of 

Banking in America, 2004. http://www.fdic.gov/bank/ 

analytical/banking/2006jan/article2/article2.pdf. 

Philip E. Strahan. “The Real Effects of U.S. Banking 

Deregulation.” Wharton Financial Institutions Center 

Working Paper 02-39, 2002. http://fic.wharton.upenn.edu/ 

fic/papers/02/0239.pdf. 
FDIC QUARTERLY 44 2014, VOLUME 8, NO. 2 

 

Long-Term Trends in Rural Depopulation and 

Their Implications for Community Banks 

Introduction 

This article explores trends in rural depopulation in the 

United States and the implications of these trends for 

rural community banks. Although rural depopulation 

continues to pose significant challenges for rural areas, 

community banks appear to be coping fairly well—much 

better, in fact, than one would have expected. Nevertheless, the underlying negative effects of depopulating 

rural areas have been neither eliminated nor reduced, 

and to the extent that depopulation accelerates over 

time, its effects will increasingly create problems for 

community banks that operate in affected areas. 

Depopulation in rural counties can be seen throughout 

the United States. Between 1980 and 2010, the total 

number of U.S. residents increased by more than 36 

percent to nearly 309 million.1

 During that same 30-year 

period, more than half of all U.S. rural counties lost 

population. In fact, the rural counties that experienced 

outflows lost 14.8 percent of their population on average. 

The onset of rural depopulation in the United States 

antedates 1980, with more than one-third of U.S. rural 

counties having reached their maximum population 

before 1930, and the trend appears to be accelerating. 

Between 1980 and 2010, some 692 rural counties lost 

population, compared with 529 that lost population 

between 1970 and 2000. 

The United States is not the only country experiencing 

the gradual depopulation of its rural areas. Several 

studies have documented similar trends in Canada and 

Mexico; countries in South America; China, Japan, 

and other Asian countries; as well as some European 

countries.2

 Factors cited by these studies to explain rural 

depopulation include productivity gains that led to agricultural consolidation and a reduction in the number 

of farm workers required; a lack of opportunities for 

nonfarm employment in the affected areas; and prospects for higher standards of living in urban centers. 

1

 All population figures cited in this article are from the U.S. Census. 2

 See, for example, James P. Robson and Prateep K. Nayak, “Rural OutMigration and Resource-Dependent Communities in Mexico and India,” 

Population and Environment 32.2–3 (Dec. 2010): 263–284; Shim Jae 

Hoon, Robert Delfs, and Julian Baum, “Rural Exodus: Seeds of Despair,” 

Far Eastern Economic Review 156.9 (Mar. 4, 1993): 20; Thomas Feldhoff, “Shrinking Communities in Japan: Community Ownership of Assets 

as a Development Potential for Rural Japan?” Urban Design International, 

suppl. Special Issue: Shrinking Cities 18.1 (Spring 2013): 99–109; Vladimir Drgona and David Turnock, “Policies for Rural Eastern Europe in 

Transition: The Case of Slovakia,” GeoJournal 50.2–3 (2000): 235–247. 

This is not the first time FDIC analysts have addressed 

the subject of rural depopulation. A 2004 issue of the 

FDIC Banking Review contained an article titled “Rural 

Depopulation: What Does It Mean for the Future 

Economic Health of Rural Areas and the Community 

Banks That Support Them?”3 That article explored the 

relationship among agriculture, population density, and 

depopulation for the period 1970 to 2000, describing 

the demographic components of the rural depopulation 

trend as well as the roles played by technological change 

and organizational innovation. Focusing on the Great 

Plains region, the article noted the pressures that depopulation can place on both sides of the banking balance 

sheet and the difficulties it can pose in the recruitment 

and retention of bank management and staff. 

Part I of this article builds on the earlier article by 

incorporating county-level population data from the 

2010 Census to compare the depopulation trends of 

1970 to 2000 with those of 1980 to 2010. We highlight 

the particular affinity between depopulation and the 

Great Plains, and elaborate on the connection between 

rural depopulation and age distribution within the 

depopulating counties. In Part II, we focus on community banks in rural depopulating regions: the particular 

characteristics of these banks, their striking financial 

performance between 2000 and 2012, and the degree to 

which they have been affected by consolidation. Part III 

describes recent developments that may positively affect 

depopulation trends in some areas. Our conclusion, in 

this article as in the earlier one, is that despite the 

adverse effects of depopulation, rural community banks 

as a group have tended to perform well, but achieving 

growth remains a challenge. 

Part I 

Depopulation Trends 

The trends discussed in Part I are: the depopulation 

trends in rural areas for the period 1980 to 2010 

compared with the period 1970 to 2000; depopulation 

and population density in the Great Plains, the region 

that has long been affected most strongly by rural 

depopulation and that has the lowest population density 

of any of the four regions with high rates of depopulation; and the relationship between rural depopulation 

3

 John Anderlik and Jeffrey Walser, “Rural Depopulation: What Does It 

Mean for the Future Economic Health of Rural Areas and the Community Banks That Support Them?” FDIC Banking Review 16.3 (2004), 

http://fdic.gov/bank/analytical/banking/2005jan/article2.html. 
FDIC QUARTERLY 45 2014, VOLUME 8, NO. 2 

Rural Depopulation

 

Changes to Definitions of County Types 

Between the 2000 and 2010 Census Periods 

The U.S. Office of Management and Budget (OMB) definition file, which did not yet include micropolitan 

designates clusters of counties as metropolitan statistical statistical area definitions. The 2004 study labeled counareas or micropolitan statistical areas (the latter category ties shown to be part of metropolitan statistical areas as 

was first defined in 2003) to provide nationally consis- metro counties and all other counties as rural counties. 

tent definitions for collecting, tabulating, and publish- The present update uses the OMB 2009 core statistical 

ing federal statistics. The OMB bases the designations area definitions, which include micropolitan statistical 

on the population size of the urban cores and on socio- areas. Thus, this update labels counties belonging to 

economic integration. Under these definitions, metro- metropolitan areas as “metro counties,” counties belongpolitan areas have an urban core of at least 50,000 ing to micropolitan areas as “micro counties,” and all 

people. Micropolitan areas, though otherwise similar to other counties as “rural counties.” 

metropolitan areas, have an urban core of between 

In full, in its 2009 definitions the OMB reclassified 401 10,000 and 50,000 people. The OMB periodically 

counties from rural to micropolitan in the four FDIC- reviews and revises its designations of metropolitan and 

micropolitan, adding new metropolitan and micropoli defined depopulating areas (see footnote 6): Corn Belt - (166), Delta-South (104), Great Plains (84), and Appa- tan clusters as well as adding or deleting individual 

lachia-East (47). Much like their larger (metro) counter- counties from existing clusters of designated metro and 

micro areas. parts, micro counties tend to have growing populations.

In the 2004 FDIC study, most of these counties had been 

The 2004 FDIC study based its system for classifying classified as “growing” rural counties, and between 1980 

counties as rural on the OMB 2000 core statistical area and 2010, 70 percent of them added population. 

and age distribution (age distribution is an indicator of 

the vitality that characterizes local communities). 

Depopulation Trends in Rural Areas, 

1970–2000 and 1980–2010 

The 2004 FDIC study focused on population trends at 

the county level during the 30 years from 1970 to 2000, 

categorizing all U.S. counties according to the population trends they experienced during this period.4

 Counties that gained population were designated “growing 

counties,” while those that lost population were designated “depopulating counties.” Depopulating counties 

were segmented according to whether their rate of 

population loss did or did not accelerate during the 

1990s (the last of the three decades in the period under 

study): Depopulating counties whose rates of outflow 

during the 1990s did not increase were designated 

“declining counties,” while depopulating counties 

whose rates of outflow during the 1990s did increase 

were designated “accelerated declining counties.” 

Using these definitions, the study found that in 2000, 

one-quarter of all U.S. counties were depopulating 

4

 In this paper we use the term “county” to refer to counties and other 

geographies (for example, parishes, municipios, districts, and islands) 

that are treated as county equivalents by the U.S. Census Bureau. 

counties (either declining or accelerated declining). 

The study also found that depopulation appeared to be 

occurring primarily in rural areas. From 1970 to 2000, 

some 32 percent of rural counties had lost population, 

compared with just 11 percent of metro counties (for 

the definitions of rural, metro, and micro counties, see 

inset box above).5 Furthermore, the vast majority of 

depopulating rural counties were identified in 2004 as 

belonging to one or another of four distinct geographic 

areas: the Great Plains, the Corn Belt, the Delta-South, 

and Appalachia-East.6 

Although the 2004 study focused on the Great Plains, 

the factors leading to long-term depopulation were basically similar across the four regions. In all four, fewer 

workers were needed in the dominant economic sector 

(agriculture in the center of the country, coal mining in 

Appalachia-East), but jobs in other sectors were scarce.7 

Hence these regions saw an out-migration to urban 

5

 We use the shorthand “metro” to refer to counties belonging to a 

metropolitan statistical area, and “micro” to refer to counties belonging to a micropolitan statistical area, as defined in the inset box. 

6

 These areas are defined in the 2004 FDIC article and are shown on 

Map 2 of this update. 

7

 As noted in the introduction, ongoing consolidation in the agricultural 

sector was largely the product of technological change and organizational innovation. 
Map 1 

Approximately One-Third of U.S. Counties Lost Population Between 1980 and 2010 

Population Category 

(Number of Counties) 

Growing (2195) 

Source: 2010 U.S. Census Population compared with 1980 U.S. Census Population. 

Note: Growing—population increased between 1980 and 2010; Declining—population declined between 1980 and 2010; Declining (650) 

Accelerated Declining—population declined between 1980 and 2010, and the rate of decline between 2000 and 2010 worsened Accelerated Declining (393) from the previous two decades. 

areas or rural counties that offered employment in 

manufacturing or retail. This out-migration in turn led 

to a slow disintegration of rural towns, which led to 

further population outflows. The result has been a longterm cycle of population decline in many rural counties. 

More-current data allow us to compare depopulation 

trends and locations for our two 30-year periods.8 Map 1 

shows the population category of all U.S. counties 

8

 In this update, we applied the current county border definitions 

(2010) and the Office of Management and Budget statistical area definitions (2009) back to 2000 to make valid comparisons with the previous FDIC study. In addition, we expanded the current analysis to 

include geographic coverage beyond the 50 states and Washington, 

D.C., that were used in the 2004 study. These areas include American 

Samoa, Federated States of Micronesia, Guam, Commonwealth of the 

Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands, 

although these additions are not shown on Maps 1 and 2. Together, 

these 6 territories encompass 95 counties, of which 85 are growing, 5 

are declining, and 5 are accelerated declining. With the broader 

geographic scope of this study and with the changes made to county 

definitions between 2000 and 2010, this update covers 3,238 counties, 

compared with 3,141 in the 2004 study. 

between 1980 and 2010 without reference to the 

designation of rural or urban, and we see that the longterm trend of depopulation is accelerating. Between 

1980 and 2010, 1,043 U.S. counties (32 percent) lost 

population, compared with 779 counties (25 percent) 

between 1970 and 2000. Moreover, the number of 

counties meeting the definition of “accelerated declining” rose from 188 at the 2000 Census to 393 as of 2010. 

Map 1 shows that most depopulation continues to occur 

in the center of the country, with additional concentrations of depopulating counties among states of the midSouth region and the noncoastal states of the East. 

Because these geographic concentrations have remained 

relatively unchanged since our previous study, we 

continue to group depopulating counties within the 

four geographic areas of the Great Plains, the Corn 

Belt, the Delta-South, and Appalachia-East. 

Map 2, which uses the same data as Map 1, shows that 

the four depopulating regions comprise the vast majority of the nation’s depopulating rural counties. In 2010, 

FDIC QUARTERLY 46 2014, VOLUME 8, NO. 2 
Rural Depopulation

the four depopulating regions contained 530 of the Table 1, which breaks down the population trend in 

nation’s 650 declining counties and 343 of its 393 number of counties for each of the four regions, shows 

accelerated declining counties (see Table 1). More than that depopulation continues to be most prevalent in 

46 percent of all counties in these regions lost popula- the Great Plains region, with Corn Belt counties expetion between 1980 and 2010. Although depopulating riencing the second-highest rate of depopulation. Some 

counties were also found outside the four depopulating 71 percent of Great Plains counties (340 of 478), and 

regions—170 of them in 2010—such counties consti- 41 percent of Corn Belt counties (310 of 749) lost 

tuted only 13 percent of all the depopulating counties. population between 1980 and 2010. 

Map 2 

U.S. Rural Depopulation Remains Concentrated in Four Distinct Regions 

Corn Belt 

Appalachia-East 

Great Plains 

Delta-South 

County Type 

Metropolitan or

Micropolitan County 

Rural County 

Sources: 2010 U.S. Census Population compared with 1980 U.S. Census Population and Growing 2010 OMB Metropolitan and Micropolitan Statistical Area county classifications. 

Note: Growing—population increased between 1980 and 2010; Declining—population declined between 1980 and 2010; Declining 

Accelerated Declining—population declined between 1980 and 2010, and the rate of decline between 2000 and 2010 worsened Accelerated Declining from the previous two decades. 

Table 1 

Four Broad Geographic Regions Have Most of the Nation’s Depopulating Counties 

Number of Counties 

Region Growing Declining Accelerated Declining Region Total 

Great Plains 138 199 141 478 

Corn Belt 439 198 112 749 

Delta-South 316 65 70 451 

Appalachia-East 125 68 20 213 

Other 1,177 120 50 1,347 

U.S. Total 2,195 650 393 3,238 

Source: 2010 U.S. Census Population compared with 1980 U.S. Census Population. 

Note: ‘Other’ category includes American Samoa, Federated States of Micronesia, Guam, Commonwealth of the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands. 

FDIC QUARTERLY 47 2014, VOLUME 8, NO. 2 
FDIC QUARTERLY 48 2014, VOLUME 8, NO. 2 

Table 2 takes the depopulating counties only, and 

breaks them down in percentages by type of county for 

each of the four regions, thus helping to illustrate the 

extent to which long-term U.S. depopulation is most 

pronounced in rural counties generally and in rural 

counties in the Great Plains region specifically. Half of 

all rural counties in the United States lost population 

between 1980 and 2010, compared with 30 percent of 

micro counties and just 12 percent of metro counties. 

Among rural and micro counties, the greatest concentration of depopulating counties was found in the Great 

Plains, where 86 percent of rural counties and 51 

percent of micro counties lost population. The trends 

are similar, if less pronounced, in the other three depopulating regions. 

Although the Great Plains region has the highest overall share of depopulating counties, the trend toward 

greater depopulation is accelerating in all four regions. 

Between 1980 and 2010, 52 percent of Great Plains 

counties lost population faster than they had between 

1970 and 2000, followed by the other three depopulating regions, where 28 to 36 percent of counties lost 

population faster. In only a few counties in the four 

regions did the population decline either slow down or 

reverse itself. 

Depopulation and Population Density in the 

Great Plains 

As noted several times above, of the four major regions 

undergoing rural depopulation, the Great Plains region 

stands out. It is noteworthy for the intensity and duration of its depopulation trend and for its low population 

density. Low population density is important because of 

Table 2 

Half of All U.S. Rural Counties and 

86 Percent of Great Plains Rural Counties 

Lost Population Between 1980 and 2010 

Region 

Percent of Counties That Lost Population 

Between 1980 and 2010 

Rural Micropolitan Metropolitan 

Great Plains 

Corn Belt 

Delta-South 

Appalachia-East 

Other 

86 

59 

44 

43 

23 

51 

43 

34 

48 

11 

11 

20 

13 

36 

4 

U.S. Total 50 30 12 

Sources: 2010 U.S. Census Population compared with 1980 U.S. Census Population and 

2010 OMB Metropolitan and Micropolitan Statistical Area county classifications. 

Note: ‘Other’ category includes American Samoa, Federated States of Micronesia, Guam, 

Commonwealth of the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands 

the difficulties it poses to local governments in maintaining critical infrastructure such as transportation 

systems and public schools. 

The majority of Great Plains counties—rural, micro, 

and metro—lost population during the 1930s, when 

Dust Bowl conditions across the region created overwhelming adversity for agricultural producers and local 

communities. Although no decade since then has been 

nearly as challenging to the region, a majority of Great 

Plains counties have experienced depopulation in every 

decade since 1930 (see Chart 1). Between 1930 and 

2010, rural counties in the Great Plains region cumulatively shed more than 40 percent of their population; 

the rural counties of the Delta-South followed, but 

there the cumulative loss was just 5 percent. 

Chart 1 

For Eight Consecutive Decades, a Majority of Great Plains Counties Lost Population 

0 

10 

20 

30 

40 

50 

60 

70 

80 

90 

191019301950197019902010191019301950197019902010191019301950197019902010191019301950197019902010 

Share of Counties With Negative Population Growth During the Decade 

(Percent) 

Appalachia-East Corn Belt Delta-South Great Plains 

Source: Bureau of U.S. Census, decennial census data. 

Note: Counties with zero or unknown population at the beginning or ending of the census period were excluded from the calculations. 
FDIC QUARTERLY 49 2014, VOLUME 8, NO. 2 

Rural Depopulation

Table 3 shows that population densities tend to be 

lower in the Great Plains counties (rural, micro, and 

metro) than in the other depopulating regions. Rural 

counties in the Great Plains average only 4.2 people per 

square mile, whereas rural counties in the Corn Belt, 

Delta-South, and Appalachia-East have an average 

population density six to ten times greater. Micro and 

metro counties in the Great Plains also have much 

lower population densities than micro and metro counties in the other depopulating regions. 

Rural Depopulation and Age Distribution 

One very important aspect of the overall depopulation 

trend is its close connection to the age distribution in 

rural areas. Many rural areas have experienced outmigration of young adults beginning after the high 

school years, as these people move for better employment or educational opportunities.9

 The result is a 

dearth of residents in their 20s, 30s, and early 40s— 

age cohorts that represent a substantial portion of 

child-rearing, working-age adults. 

Chart 2 illustrates the effects of these trends in terms of 

“age pyramids,” or population distributions, broken 

down by five-year age cohorts. The top age pyramid on 

the left shows the distribution for all metropolitan 

counties in the United States. Notwithstanding the 

bulge among the baby boom cohorts now aged between 

45 and 59, the age distribution in metropolitan U.S. 

counties is fairly uniform across age cohorts through age 

55, after which the relative share of population gradually declines. 

The next pyramid, for the nation’s micropolitan counties, starts to show a different shape, with fewer people 

in the 20 to 45 range than metro counties. In the 

micropolitan counties, the shape of the pyramid demonstrates what some demographers refer to as a “pinched 

waist,” which indicates that the populations aged 20 to 

45 are smaller than the populations younger or older 

than the 20 to 45 group. 

In rural areas the pinched waist becomes more 

pronounced. The relative absence of people in the 20 

to 45 age group reflects the effects of out-migration by 

young adults. The convex shape of these age pyramids 

9

 Although out-migration of young adults is the most significant demographic trend in depopulating rural counties, weak or negative “natural 

increase” (or births minus deaths) is also a factor affecting population 

growth in these areas. The role of natural increase in depopulating 

rural counties is discussed in more depth in the 2004 study. 

Table 3 

Population Densities Are Low in Rural 

Counties, Especially Those in the Great Plains 

Region 

Population Density (people/square mile) 

Rural Micropolitan Metropolitan 

Great Plains 

Corn Belt 

Delta-South 

Appalachia-East 

Other 

4.2 

25.9 

30.1 

41.5 

7.7 

18.8 

67.6 

62.5 

96.3 

33.6 

110.7 

336.0 

205.6 

573.3 

281.7 

U.S. Total 10.6 42.2 285.9 

Sources: 2010 U.S. Census Population compared with 1980 U.S. Census Population and 

2010 OMB Metropolitan and Micropolitan Statistical Area county classifications. 

Note: ‘Other’ category includes American Samoa, Federated States of Micronesia, Guam, 

Commonwealth of the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands. 

becomes most pronounced in accelerated declining 

counties, from which many people aged 20 to 45 have 

departed in search of better opportunities in fastergrowing areas. 

The age pyramids also indicate a relatively high proportion of elderly people in depopulating rural counties. In 

2010, some 13.2 percent of the residents of accelerated 

declining rural counties were aged 70 or older, 

compared with 10.6 percent in micro counties and only 

8.6 percent in metro counties. 

The demographic trends shown in the age pyramids do 

not represent a new phenomenon for depopulating rural 

areas. A similar shape, showing a pinched waist for 

young adults and a relatively high proportion of elderly 

persons, was shown in age pyramids in the 2004 study. 

Part II 

Depopulation and Rural Community Banks 

Outflows of young adults have clear implications for 

rural community banks, but many of the effects have 

been mitigated by other factors in recent years.10 This 

part of the paper compares the characteristics of rural 

10 Population outflows also have clear implications for local governments. The combination of relatively few working young adults and 

college graduates plus a relatively high proportion of elderly residents 

can put significant fiscal strains on depopulating rural counties. Local 

governments subsidize the primary education of young citizens, but if, 

after graduating from college, these citizens live elsewhere, the governments do not reap the rewards that flow from adding college-educated 

people to the local labor force and tax base. In addition, the moreelderly populations that are left behind tend to require certain specialized governmental services that add costs to local government budgets. 
FDIC QUARTERLY 50 2014, VOLUME 8, NO. 2 

Chart 2 

The ‘Pinched Waist’ in Depopulating Rural Count Age P ramids Reects the Outow of Young Adults 

U.S. Metropolitan and Micropolitan Counties—Distribution by Age 

Sources: 2010 U.S. Census Population compared with 1980 U.S. Census Population and 2010 OMB Metropolitan and Micropolitan Statistical Area county classifications. 

0%2%4%6%8%10% 4%2%0% 10%8%6%

<5 

10–14 

20–24 

30–34 

40–44 

50–54 

60–64 

70–74 

80–84 

0%2%4%6%8%10% 10%8%6%4%2%0% 

<5 

10–14 

20–24 

30–34 

40–44 

50–54 

60–64 

70–74 

80–84 

0%2%4%6%8%10% 10%8%6%4%2%0% 

<5 

10–14 

20–24 

30–34 

40–44 

50–54 

60–64 

70–74 

80–84 

Accelerated Declining Male Female Declining Male Female Growing Male Female 

0%2%4%6%8%10% 10%8%6%4%2%0% 

<5 

10–14 

20–24 

30–34 

40–44 

50–54 

60–64 

70–74 

80–84 

0%2%4%6%8%10% 10%8%6%4%2%0% 

<5 

10–14 

20–24 

30–34 

40–44 

50–54 

60–64 

70–74 

80–84 

Metropolitan Male Female Micropolitan Male Female 

U.S. Rural Counties—Distribution by Age 

community banks with those of community banks headquartered in metropolitan and micropolitan counties, 

and then compares community banks in the three types 

of counties in terms of their financial performance. The 

finding is that in recent years, the loan mix of banks in 

rural depopulating areas has helped to insulate them 

from the worst effects of the recent financial crisis and 

recession, and although these banks still find it challenging to grow their balance sheets, community banks 

in depopulating rural areas have actually fared better, 

on average, than banks in metro areas. Finally, the 

comparison is made with community banks in the 

different types of counties with respect to the consolidation of charters. Here, too, depopulation does not 

appear to have had the expected negative effect. 

Characteristics of Community Banks Headquartered 

in Depopulating Rural Areas 

As of year-end 2012, there were 1,064 community 

banks headquartered in depopulating rural areas, with 

total assets of nearly $150 billion (see Table 4).11 

Although the total assets of these institutions represent just 1 percent of the banking industry’s total 

assets, the number of community banks in depopulating rural counties constitutes 15 percent of all insured 

institutions in the nation, and 16 percent of all 

community banks. 

Like the areas they serve, community banks headquartered in depopulating rural areas tend to be clustered in 

the Great Plains and the Corn Belt. (The Great Plains 

contains so many depopulating areas that nearly half of 

all community banks in the region are located in 

depopulating rural counties.) Together, the Great 

11 The FDIC Community Banking Study (which defines community 

banks for purposes of the data in Table 4) was built around a custom 

definition that emphasizes traditional banking activities and a limited 

geographic scope of operations. This present study uses the same 

definition. For a complete description of the definition, see http://www. 

fdic.gov/regulations/resources/cbi/report/CBSI-A.pdf. 
FDIC QUARTERLY 51 2014, VOLUME 8, NO. 2 

Rural Depopulation

Table 4 

More Than 1,000 Community Banks Are Headquartered in Depopulating Rural Counties 

Number and Assets of Community Banks by County Type 

Region 

Rural 

Growing Declining Micropolitan Metropolitan Total

Accelerated 

Declining 

Great Plains 

Number of Institutions 47 227 166 185 211 836 

Total Assets ($ billions) 6.4 30.8 17.7 41.2 78.5 174.6 

Median Assets ($ millions) 112.8 73.6 62.9 140.9 153.9 99.7 

Corn Belt 

Number of Institutions 240 269 173 527 1,135 2,344 

Total Assets ($ billions) 38.3 34.2 21.7 112.5 349.9 556.7 

Median Assets ($ millions) 113.5 87.9 80.1 130.9 152.2 125.3 

Delta-South 

Number of Institutions 122 41 65 175 296 699 

Total Assets ($ billions) 22.9 8.8 12.7 51.5 94.7 190.5 

Median Assets ($ millions) 139.5 135.6 113.8 186.8 172.4 160.0 

Appalachia-East 

Number of Institutions 50 21 4 74 282 431 

Total Assets ($ billions) 19.4 4.1 0.8 28.3 186.5 239.1 

Median Assets ($ millions) 226.6 124.7 199.3 205.1 305.4 258.3 

Other 

Number of Institutions 307 64 34 336 1,493 2,234 

Total Assets ($ billions) 58.2 9.8 7.5 101.6 681.1 858.2 

Median Assets ($ millions) 127.0 110.3 126.6 196.2 238.8 204.5 

U.S. Total 

Number of Institutions 766 622 442 1,297 3,417 6,544 

Total Assets ($ billions) 145.3 87.6 60.4 335.2 1,390.5 2,019.1 

Median Assets ($ millions) 126.7 88.0 84.0 153.9 199.9 155.2 

Sources: FDIC Call Reports (year-end 2012), 2010 U.S. Census Population compared with 1980 U.S. Census Population, and 2010 OMB Metropolitan and Micropolitan Statistical Area county 

classifications. 

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). ‘Other’ category includes American Samoa, Federated States of Micronesia, Guam, 

Commonwealth of the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands. 

Plains and the Corn Belt have 835 community banks 

headquartered in depopulating rural counties (both 

declining and accelerated declining), or 78 percent of 

all such community banks in the nation. In addition, 

the two regions account for 339 of the nation’s 442 

community banks that are headquartered in accelerated 

declining counties. 

Table 4 also shows that the asset sizes of community 

banks headquartered in depopulating rural counties 

tend to be relatively small. Community banks headquartered in declining or accelerated declining rural 

counties have median asset sizes of $88 million and $84 

million, respectively. Community banks headquartered 

in growing rural counties have a median asset size of 

$127 million, and the median metro-based community 

bank has assets of $200 million. 

In addition—and this has proved critical for reasons 

detailed below—community banks headquartered in 

depopulating rural counties tend to be focused much 

more on agriculture than community banks headquartered elsewhere, particularly those headquartered in 

metro areas. The reason for this agricultural focus is 

closely linked with depopulating trends. As the agricultural sector has consolidated over the past century, 

the loss of employment in that sector, together with the 

absence of other employment possibilities in any other 
FDIC QUARTERLY 52 2014, VOLUME 8, NO. 2 

Table 5 

Community Banks in Depopulating Rural Areas Tend To Be Agricultural Lending Specialists 

Lending Specialty 

Number of Community Banks by County Type and Lending Specialty 

Rural 

Growing Declining Micropolitan Metropolitan Total

Accelerated 

Declining 

Mortgage Lending 

Other Consumer Lending 

Commercial RE Lending 

C&I Lending 

Agricultural Lending 

Multi Specialty Lending 

No Lending Specialty 

134 

3 

71 

10 

86 

80 

382 

29 

4 

18 

7 

285 

33 

246 

22 

0 

22 

4 

215 

28 

151 

218 

6 

162 

24 

198 

157 

532 

637 

29 

1,199 

96 

148 

435 

873 

1,040 

42 

1,472 

141 

932 

733 

2,184 

Total 766 622 442 1,297 3,417 6,544 

Sources: FDIC Call Reports (year-end 2012), 2010 U.S. Census Population compared with 1980 U.S. Census Population, and 2010 OMB Metropolitan and Micropolitan Statistical Area county 

classifications. 

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). Lending specialty as defined in the FDIC Community Banking Study (2012). 

sector, led to out-migration. In turn, the depopulation 

led to the erosion of main-street businesses and their 

commercial lending needs. For community banks in 

depopulating areas, the result has been a continuing 

shrinkage of lending options in their local markets 

apart from agricultural loans. 

At year-end 2012, agricultural loans held by the 

median community bank in depopulating rural areas 

constituted 19.3 percent of total assets, while commercial real estate (CRE) loans constituted 6.6 percent, 

including 0.6 percent in construction and development (C&D) loans. Metro-based community banks 

had contrasting portfolios, with a median 0.4 percent 

in agricultural loans and 26.3 percent in CRE loans, 

including 3.1 percent in C&D loans. At year-end 

2007 (when the recession started), the contrast 

between the holdings of community banks in the two 

types of areas had been even more pronounced, when 

metro-based community banks had medians of 29.8 

and 7.6 percent of their assets in total CRE and C&D 

loans, respectively. At that time, the median community bank in depopulating rural areas had 7.8 percent 

of its total assets in CRE loans, including 0.9 percent 

in C&D loans. 

Another way to look at the differences in lending 

between community banks headquartered in different 

types of areas is to look at the lending specialty of the 

institutions. Table 5 depicts the lending specialty 

groups of community banks as defined in the FDIC 

Community Banking Study.

12 At year-end 2012, nearly 

half of all community banks headquartered in depopulating rural counties specialized in agriculture, followed 

closely by community banks that had no lending 

specialty. Less than 4 percent of community banks in 

depopulating rural areas specialized in CRE lending. 

Not surprisingly, few community banks in metro areas 

specialized in agriculture, but a much higher proportion 

specialized in CRE lending. Even growing rural areas 

had relatively few community banks that specialized in 

agricultural lending; instead, half of the community 

banks in these counties had no lending specialty. 

Financial Performance of Community Banks in 

Depopulating Rural Areas 

As has been the case for decades, community banks 

headquartered in depopulating rural areas face difficulties related to their local market areas. In effect, the 

eroding size of the local customer base makes it harder 

at the margin to raise deposits and attract loan customers. This study shows that challenges to balance-sheet 

growth have continued to exist in depopulating rural 

areas, and banks that searched for deposit and loan 

growth by branching into metro areas in the first 

decade of the 21st century were adversely affected by 

12 Page 5-3 of the Study defines the lending specialty groups. Banks 

are agricultural specialists if their combined agricultural production 

loans plus loans secured by farm real estate are greater than 20 

percent of total assets. CRE specialists hold C&D loans greater than 

10 percent of total assets OR total CRE loans (C&D, multifamily, and 

secured by other commercial properties) greater than 30 percent of 

total assets. 
FDIC QUARTERLY 53 2014, VOLUME 8, NO. 2 

Rural Depopulation

 

For many rural community banks, specialization in agricultural lending had unexpectedly beneficial results for 

the better part of the past decade. Historically the agricultural sector has been relatively volatile, with a downside risk that was clear in the 1980s, when the sector 

propelled hundreds of rural farm banks to failure. 

Currently, however, the agricultural sector is in the 

midst of a prolonged period of unusual strength. Annual 

U.S. net farm income, perhaps the best measure of the 

sector’s strength, averaged $63.7 billion from 1990 

through 2003. From 2004 through 2012, annual U.S. net 

farm income averaged $84.5 billion per year. This nineyear period includes six of the top ten annual net farm 

income figures since 1960 (see Chart I.B.1). The 2013 

forecast of $123 billion would also be among the top 

years in the past half century. 

Much of the strength in net farm income is attributable to 

unusually high prices for corn, soybeans, and wheat—key 

crops in the Great Plains and Corn Belt. The average 

price of corn was 59 percent higher from 2007 through 

2012 than it had been from 1990 through 2006. Comparable price increases for wheat and soybeans over the same 

two periods were 53 percent and 45 percent, respectively. 

In addition, the U.S. recession in 2008 and 2009 (as 

noted above) appeared to have little adverse effect on 

the agricultural sector. In fact, 2008 was among the ten 

best years for U.S. net farm income since 1960. This 

success came at a time when many metro and micro 

areas were being hit hard by job losses, especially in the 

construction industry. 

Unusual Strength in the Agricultural Sector 

Source: USDA’s Economic Research Service, inflation-adjusted 

figures using 2009 dollars. 

Chart I.B.1 

The Decade 2002–2012 Was Marked by Historically Strong Net Farm Incomes 

U.S. Net Farm Income, Billions of Dollars 

Constant Dollars (2009=100) 

Source: USDA/ERS. 

0 

10 

20 

30 

40 

50 

60 

70 

80 

90 

100 

110 

120 

130 

140 

1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 

Dark-Blue Bars Indicate the 10 Highest 

Net Farm Incomes Since 1960 

2013 Forecast 

the recession, just as metro-based banks were. Financial 

performance as measured by earnings and asset quality 

was actually stronger in depopulating rural areas than in 

metro areas because the agricultural sector—on which 

so many rural community banks depended, as described 

earlier—was strong during and following the overall 

U.S. recession. For details on the strength in the agricultural sector, see inset box above. 

The Challenge of Balance-Sheet Growth 

In keeping with the gradual decline in their local 

customer base, community banks headquartered in 

depopulating rural areas have historically had challenges in growing their balance sheets. Between 1991 

and 2005, community banks in depopulating rural areas 

generally had much lower rates of growth in total 

assets, loans, and deposits than their counterparts in 

metro, micro, or growing rural counties (see Table 6). 

Starting in 2006, however, asset growth rates increased 

in depopulating rural areas in keeping with the strength 

in the agricultural sector, while weakening in other 

areas. As a result, from 2006 through 2012 community 

banks in depopulating rural areas posted higher asset 

growth rates than community banks elsewhere. Asset 

growth was accompanied by strong deposit growth, 

since farmers looked to place their high earnings into 

their local institutions. The downside, though, was that 

these earnings led farmers to reduce their borrowing 
FDIC QUARTERLY 54 2014, VOLUME 8, NO. 2 

 

 

 

Table 6 

Balance-Sheet Growth in Depopulating Rural Counties Has Been Bolstered in Recent Years 

Median Annualized Total Asset, Total Loan, and Total Deposit Growth Rates of Community Banks by Type of County, 1991–2012 (Percent) 

County Type 

Total Assets Total Loans Total Deposits* 

1991– 

1995 

1996– 

2000 

2001– 

2005 

2006– 

2010 

2011– 

2012 

1991– 

1995 

1996– 

2000 

2001– 

2005 

2006– 

2010 

2011– 

2012 

1991– 

1995 

1996– 

2000 

2001– 

2005 

2006– 

2010 

2011– 

2012 

Metropolitan 

Micropolitan 

Rural: 

Growing 

Declining 

Accelerated 

Declining 

5.07 7.84 7.44 4.56 2.90 

4.33 5.83 5.16 4.32 3.72 

4.73 6.23 4.97 4.14 3.13 

2.60 3.91 3.42 4.61 5.76 

2.86 4.09 3.30 4.67 5.54 

5.68 10.42 8.24 4.17 -0.10 

6.33 8.57 5.54 3.53 0.33 

6.59 9.39 5.17 3.44 -0.79 

6.15 6.75 4.39 4.22 1.86 

6.05 6.70 3.91 3.82 1.46 

4.38 6.76 7.12 4.94 3.20 

3.69 4.99 5.00 4.76 4.04 

4.27 5.49 4.85 4.47 3.36 

2.12 3.30 3.24 5.02 6.06 

2.52 3.46 3.11 5.10 5.72 

Sources: FDIC Call Reports, 2010 U.S. Census Population compared with 1980 U.S. Census Population, and 2010 OMB Metropolitan and Micropolitan Statistical area county classifications. 

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). Growth rates are merger-adjusted. 

* Significant changes in FDIC deposit insurance coverage occurred during the 2006–2010 and 2011–2012 periods. 

requirements, so that loan growth rates at community 

banks in depopulating rural areas dropped to under 2 

percent in 2011 and 2012.13 

It is unclear how long community banks in depopulating rural areas will continue to have a growth advantage over community banks elsewhere. It is probably 

not reasonable to assume that the agricultural sector 

will continue indefinitely to enjoy the exceptionally 

strong conditions of recent years. Should farm earnings 

return to their normal level, most likely the banks that 

operate in rural areas will see their growth rates revert 

to levels more in line with historical norms. At the 

same time, as the overall economy continues to recover 

from the recession, metro-based community banks 

should see their growth rates improve. 

Branching Strategies 

Before the recession, some community banks in depopulating rural areas adopted various strategies to offset 

the effects of local population declines and to achieve 

higher rates of balance-sheet growth. One such strategy 

was to branch into metro areas where population and 

economic activity were growing faster than in the 

banks’ local areas. But with such a strategy came the 

associated risks of managing a branch not only in a new 

geography but also, in many cases, with a corresponding 

shift in lending focus. 

13 There may be other factors that also contributed to lower loan 

demand at these institutions, but the unusually strong cash positions 

of farmers was the most common reason cited by bankers at meetings 

with FDIC regulators and during their examinations. 

As of year-end 2000, 9.3 percent of community banks 

headquartered in depopulating rural areas operated 

branches in metro areas. By year-end 2007, the percentage had risen to 17.5. This branching strategy led to 

higher growth rates for these institutions. During the 

seven-year period from year-end 2000 through year-end 

2007, community banks headquartered in depopulating 

rural areas that had at least one metro branch grew total 

assets by 6.6 percent per year and loans by 8.2 percent 

per year on a merger-adjusted basis. These growth rates 

were approximately twice the rates experienced by 

community banks headquartered in depopulating rural 

areas that did not have metro branches. 

In achieving this growth, however, community banks 

with metro branches took on many of the lending characteristics of metro banks. From 2000 through 2007, 

while rural community banks without metro branches 

maintained high levels of agricultural loans and low 

levels of CRE and C&D loans, their counterparts with 

metro bank branches had significantly more exposure to 

CRE and C&D loans (see Table 7). 

As a result, when the U.S. economy went into recession and the quality of many CRE and C&D loans was 

adversely affected, rural community banks with metro 

branches reported asset quality and earnings performance that was more in line with that of metro banks 

than with that of other rural banks (see Chart 3). 

Past-due loan rates, loan losses, and provision expenses 

rose sharply, following the trend observed for metrobased community banks. The number of rural community banks with metro branches reporting annual net 
FDIC QUARTERLY 55 2014, VOLUME 8, NO. 2 

Rural Depopulation

Table 7 

Community Banks in Depopulating Rural Areas That Had Metro Branches 

Took on More CRE and C&D Loans Between 2000 and 2007 

Banks Headquartered in: 

(Percent) 

2000 2007 2012 

Metropolitan Areas 

CRE Loans to Total Assets 

C&D Loans to Total Assets 

Ag Loans to Total Loans 

16.82 

5.08 

1.88 

22.30 

12.85 

2.01 

24.65 

4.04 

2.02 

Depopulating Rural With Branches in Metro Areas 

CRE Loans to Total Assets 

C&D Loans to Total Assets 

Ag Loans to Total Loans 

11.44 

2.57 

12.43 

17.25 

7.83 

14.50 

17.00 

3.51 

15.99 

Depopulating Rural Without Branches in Metro Areas 

CRE Loans to Total Assets 

C&D Loans to Total Assets 

Ag Loans to Total Loans 

6.23 

0.94 

21.95 

8.74 

2.21 

22.94 

7.95 

1.03 

22.33 

Source: FDIC Call Reports. 

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). CRE loans are exclusive of C&D loans (which are shown separately). Ag loans are loans 

for agricultural production and loans secured by farmland. All ratios are weighted averages for the time periods shown. 

losses also increased, but not quite to the level seen at 

community banks in metro areas. 

In addition, the operation of metro-area branches had a 

negative effect on the failure rates of community banks 

headquartered in depopulating rural areas. Between 

2000 and year-end 2012, of all community banks headquartered in such areas, 3.65 percent of those with 

metro branches failed, compared with 0.98 percent of 

those without metro branches. 

Earnings and Asset Quality 

Despite the demographic challenges in their local areas, 

community banks headquartered in depopulating rural 

counties reported relatively strong earnings and asset 

quality between 2001 and 2012, even through the U.S. 

recession. By contrast, community banks located in 

areas with increasing populations, such as metro areas, 

reported substantial deterioration in earnings and asset 

quality during the recession and had still not recovered 

fully at year-end 2012. This finding that banking performance has diverged from depopulation trends may be 

striking, but the explanation is simple. 

In the early 2000s, community banks in both growing 

and depopulating areas were solidly profitable and had 

strong asset quality (see Table 8). Pretax return on 

assets (ROA) of community banks across geographies 

was in a tight range of 1.42 percent to 1.56 percent. 

These earnings were bolstered by low and stable loan 

loss provision expenses for all groups studied. Levels of 

noncurrent loans and net loan losses were low in all 

groups, particularly in community banks headquartered 

in metro areas. 

From 2006 through 2010, the financial performance of 

community banks began to vary depending on the type 

of area in which the bank was headquartered. Most 

noticeable was the deterioration in earnings and asset 

quality reported by community banks located in metro 

areas. In the five years between 2006 and 2010, metrobased community banks earned, on average, a full 

percentage point less per year than they had in the prior 

five-year period. These institutions also reported large 

spikes in provision expenses and in levels of noncurrent 

loans and leases: Between 2006 and 2010, both of these 

measures were more than three times what they had 

been between 2001 and 2005. 

During the same period, community banks based in 

micro areas and growing rural areas fared somewhat 

better than metro banks, but their earnings and asset 

quality were still weaker than they had been between 

2001 and 2005. The institutions based in micro and in 

growing rural areas reported declines in annual pretax 

ROA of 62 and 57 basis points, respectively, compared 

with the 2001 through 2005 period. As in metro-based 
FDIC QUARTERLY 56 2014, VOLUME 8, NO. 2 

 

                   

 

Chart 3 

Community Banks in Depopulating Rural Areas With Metro Branches Showed Deterioration During the Recession 

Noncurrent Loan and Lease Ratio Loan and Lease Net Charge-Off Rate 

0.00 

0.50 

1.00 

1.50 

2.00 

2.50 

2000 2002 2004 2006 2008 2010 2012 

Percent (median) 

2000 2002 2004 2006 2008 2010 2012 

Percent (median) 

0.00 

0.10 

0.20 

0.30 

0.40 

0.50 

0.60 

Loan and Lease Loss Provision Expense to Average Assets Share of Institutions That Are Unprofitable 

2000 2002 2004 2006 2008 2010 2012 

Percent (median) 

2000 2002 2004 2006 2008 2010 2012 

Percent (median) 

Source: FDIC Call Reports. 

Note: Charts reflect only community banks as defined in the FDIC Community Banking Study (2012). 

0.00 

0.10 

0.20 

0.30 

0.40 

0.50 

0.60 

0.70 

Depopulating rural without metropolitan branches 

Depopulating rural with metropolitan branches 

Metropolitan area 

0 

5 

10 

15 

20 

25 

30 

35 

40 

45 

Table 8 

The Financial Performance of Community Banks in Depopulating Rural Areas 

Remained Solid Through the U.S. Recession 

County Type 

Pretax Return on Assets 

(Percent) 

Provision Expense to Average 

Assets (Percent) 

Total Noncurrent Loans to Total 

Loans (Percent) 

2001– 

2005 

2006– 

2010 2011 2012 

2001– 

2005 

2006– 

2010 2011 2012 

2001– 

2005 

2006– 

2010 2011 2012 

Metropolitan 

Micropolitan 

Rural: 

Growing 

Declining 

Accelerated 

Declining 

1.49 0.46 0.65 1.01 

1.49 0.87 0.89 1.12 

1.56 0.99 0.88 1.11 

1.45 1.08 1.04 1.17 

1.42 1.13 1.23 1.41 

0.22 0.73 0.61 0.35 

0.24 0.55 0.51 0.31 

0.24 0.45 0.50 0.32 

0.21 0.39 0.35 0.24 

0.25 0.40 0.32 0.22 

0.74 2.55 3.33 2.62 

0.87 1.93 2.57 2.05 

0.96 1.88 2.76 2.21 

1.04 1.64 1.95 1.51 

1.13 1.45 1.59 1.35 

Source: FDIC Call Reports. 

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). All ratios are weighted averages for the period shown. 
FDIC QUARTERLY 57 2014, VOLUME 8, NO. 2 

Rural Depopulation

community banks, higher provision expenses drove a 

large part of this earnings decline. In addition, between 

2006 and 2010 noncurrent loan levels in the institutions based in micro and growing rural areas were 

approximately twice what they had been between 2001 

and 2005. 

In contrast, community banks headquartered in depopulating rural areas found the latter half of the 2000s to 

be much less difficult. These institutions reported only 

modest declines in average ROA—declines of between 

29 and 37 basis points annually, when 2006 through 

2010 is compared with 2001 through 2005. When the 

2006–2010 performance of community banks headquartered in depopulating rural areas is compared not with 

these banks’ own previous performance but with the 

2006–2010 performance of metro-based community 

banks, the comparison is starkly in favor of the banks 

in the depopulating areas: The average pretax ROA 

reported by community banks in depopulating rural 

areas was more than 60 basis points higher than that of 

their metro-based counterparts. In 2011 and 2012, this 

gap closed somewhat, though by no means completely, 

as community banks in depopulating rural areas still 

reported higher earnings than metro community banks. 

Of all community banks, between 2006 and 2010 those 

in depopulating rural areas also reported the lowest 

increases in provision expenses and in levels of noncurrent loans. This trend continued in 2011 and 2012. 

Since 2006, much of the disparity in performance 

between community banks located in depopulating 

rural areas and those located in metro areas can be 

explained by the differences in the loan mix of the 

two groups (loan mix as of year-end 2012 was surveyed 

above, at the end of the “Characteristics” section). 

Community banks operating in depopulating rural 

counties relied substantially more on agricultural lending and had lower holdings of CRE loans, and this mix 

translated directly into lower loan losses during the 

recession. From 2001 through 2006, virtually every type 

of loan had performed well, but beginning in 2007 

several loan types, particularly C&D loans, had begun 

to show significant deterioration (see Chart 4). The 

noncurrent rate for C&D loans at community banks 

overall peaked at 13.4 percent in 2009, and at year-end 

2012 was still an elevated 7.9 percent. By 2009, CRE, 

residential, and commercial and industrial loans also 

showed substantial increases in noncurrent rates. The 

noncurrent rate of agricultural loans, however, 

remained low throughout the recession. 

Chart 4 

CRE Loans, Particularly C&D Loans, 

Deteriorated Substantially Beginning in 2007 

0 

2 

4 

6 

8 

10 

12 

14 

16 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 

C&D 

Other CRE 

1-4 Family Residential 

C&I 

Agricultural 

Noncurrent Loans as a Percent of Total Loans in Category 

Source: FDIC Call Reports. 

Notes: Chart reflects only community banks as defined in the FDIC Community Banking 

Study (2012). 

Noncurrent loans are loans 90 days or more past due or on nonaccrual status. 

Ratios are weighted averages. 

Number of Community Bank Charters in Rural Areas 

Compared With Metro Areas 

Consolidation has been a long-term trend in the U.S. 

banking industry. The number of federally insured 

bank and thrift charters has declined steadily for 

almost three decades, from just under 18,000 in 1984 

to fewer than 7,000 in 2012. In concert with this 

trend, the number of community bank charters in 

depopulating rural areas has declined steadily since 

1984 (see Table 9). At year-end 1984, there were 

2,477 total charters in depopulating rural areas, more 

than 96 percent of which were community banks. By 

the end of 2012, total charters in these areas had 

declined to 1,074, and 99 percent (all but 10) were 

community banks. During the 28 years between 1984 

and 2012, the number of community banks in depopulating rural areas had declined by 55 percent. 

Though depopulation is likely one of many factors that 

drove long-term consolidation of charters in rural areas, 

consolidation rates were even higher in metro and 

micro areas of the country.14 In metro areas, the number 

of community bank charters declined by 60 percent 

between 1984 and 2012, and in micro areas, it declined 

by 58 percent. Only growing rural areas showed less 

consolidation (slightly less) than depopulating rural 

areas, with a 54 percent reduction in charters between 

1984 and 2012. 

14 See page 2-2 of the Study for other factors that have influenced 

consolidation rates among community banks since the mid-1980s. 
FDIC QUARTERLY 58 2014, VOLUME 8, NO. 2 

                 

 

Table 9 

Consolidation of Charters Has Occurred Since 1984, 

but Has Been Less Pronounced in Rural Counties 

County and Bank Type 

Number of Charters by Period Number by Period as Percent of 1984 Total 

1984 1990 2000 2010 2012 1984 1990 2000 2010 2012 

Metropolitan 

Community Banks 8,569 7,175 4,566 3,723 3,417 100% 84% 53% 43% 40% 

Noncommunity Banks 1,758 1,580 916 543 453 100% 90% 52% 31% 26% 

Total 10,327 8,755 5,482 4,266 3,870 100% 85% 53% 41% 37% 

Micropolitan 

Community Banks 3,053 2,498 1,756 1,371 1,297 100% 82% 58% 45% 42% 

Noncommunity Banks 271 261 116 63 51 100% 96% 43% 23% 19% 

Total 3,324 2,759 1,872 1,434 1,348 100% 83% 56% 43% 41% 

Rural 

Growing 

Community Banks 1,651 1,448 1,048 809 766 100% 88% 63% 49% 46% 

Noncommunity Banks 122 106 41 22 25 100% 87% 34% 18% 20% 

Total 

Declining 

1,773 1,554 1,089 831 791 100% 88% 61% 47% 45% 

Community Banks 1,423 1,194 856 654 622 100% 84% 60% 46% 44% 

Noncommunity Banks 54 42 9 8 5 100% 78% 17% 15% 9% 

Total 

Accelerated Declining 

1,477 1,236 865 662 627 100% 84% 59% 45% 42% 

Community Banks 967 836 590 459 442 100% 86% 61% 47% 46% 

Noncommunity Banks 33 18 6 6 5 100% 55% 18% 18% 15% 

Total 1,000 854 596 465 447 100% 85% 60% 47% 45% 

Sources: FDIC Call Reports, 2010 U.S. Census Population compared with 1980 U.S. Census Population, and 2010 OMB Metropolitan and Micropolitan Statistical Area county classifications. 

Note: Community banks as defined in the FDIC Community Banking Study (2012). 

Continued depopulation raises the possibility that 

consolidation rates may increase in rural depopulating 

areas. Depopulation can make it more challenging to 

staff and manage bank branches and back-office facilities. Moreover, many small banks in rural areas are 

owned and operated by one or two key people, and the 

children of these executives, who perhaps would have 

been the successors to management, often move away 

to pursue opportunities in larger towns and cities. In 

such cases, if there are neither clear options within the 

institution for succession nor viable professional candidates within the community, successorship may become 

a concern. 

The possible solution is to recruit talent from metro 

areas, but that can be hard to accomplish. At outreach 

meetings with FDIC staff, rural bankers have noted 

various challenges in bringing talented individuals into 

rural areas. 

Part III 

Looking Ahead: Some Positive Trends but Continued 

Challenges 

When the FDIC conducted the prior study in 2004, 

continued depopulation of much of America’s rural 

areas seemed to be inevitable, as many of these areas, 

particularly in the Great Plains, were caught in a slow, 

self-reinforcing circle of decline. Population trends 

have, in fact, worsened since 2000: Not only are depopulation trends now covering more of the country than 

they did in 2000, but also in many areas the depopulation is accelerating. 

Despite these adverse trends, as of early 2014 there are 

a few favorable developments affecting population flows 

in pockets of rural America. Most significant is the 

advent of the energy extraction of shale oil and natural 

gas in parts of the rural depopulating Great Plains and 

Appalachia-East regions. This exploration activity 
FDIC QUARTERLY 59 2014, VOLUME 8, NO. 2 

Rural Depopulation

requires significant manpower, and some of these areas 

have seen large increases in population. An example is 

western North Dakota, a part of the Great Plains that is 

heavily rural and has long been sparsely populated and 

depopulating, yet has seen a great deal of energy extraction over the past decade. Exploration for additional 

suitable oil fields is under way across much of the rest of 

the western Great Plains, from Montana through Oklahoma. While it remains to be seen how many rural 

counties ultimately gain population because of these 

exploration activities, in some rural areas energy drilling 

represents perhaps the most promising economic development in decades. 

On a much smaller scale, positive population trends 

may be developing in some areas. Two limited-scope 

studies indicate that a few rural areas may be seeing 

positive net in-migration of adults of child-rearing age 

together with their children.15 However, the inflows 

were very modest and the causes apparently idiosyncratic. And although positive, they are not sufficiently 

large or widespread to reverse the “pinched-waist” 

patterns observed in rural-county age pyramids overall. 

The positive trends found in energy extraction and 

other developments do provide some optimism for rural 

areas, but the likelihood of a large-scale reversal in rural 

depopulation trends seems remote. The population 

outflows are well entrenched and in many areas date 

back a century or more. 

Still, community banks in depopulating rural areas have 

been resilient in meeting the challenges posed by difficult demographic trends. In the years leading up to the 

financial crisis and recession, community banks in 

depopulating rural areas reported earnings and asset 

quality performance that was relatively similar to the 

performance of banks located in more economically 

vibrant areas. Through the recession and its aftermath, 

the community banks in depopulating rural areas 

outperformed their peers, thanks to the strong agricultural economy, which kept agricultural loan portfolios 

from feeling the adverse shocks received by C&D and 

CRE portfolios. Even the banking structure in depopulating rural areas has been more stable than in metro 

areas in terms of the number of charters. 

15 Ben Winchester, Tobias Spanier, and Art Nash, “The Glass Half-Full: 

A New View of Rural Minnesota,” Rural Minnesota Journal 6 (2011); 

and Cheryl Burkhart-Kriesel, Randolph Cantrell, Bruce Johnson, 

Charlotte Narjes, and Rebecca Vogt, Newcomers to the Nebraska 

Panhandle: Who Are They? (Center for Applied Rural Innovation: 

University of Nebraska-Lincoln, 2007). 

The data brought to bear in this study indicate that 

community bankers in depopulating rural areas will 

most likely have to continue managing their institutions with the prospect of weak or negative growth from 

their local communities. Although searching for growth 

opportunities in other geographies is possible, it has its 

own set of challenges, as seen by the institutions that 

branched into metro areas before the recession. All in 

all, the conclusion of the 2004 FDIC study is equally 

applicable to this study: Although there may in fact be 

far fewer rural banks in the future, the rural banking 

system will most likely remain intact and strong. 

Authors: John M. Anderlik, Assistant Director 

Division of Insurance and Research 

Richard D. Cofer Jr., Regional Manager 

Division of Insurance and Research 

The authors would like to thank Stephanie A. Brockmann 

for her contributions to this article. 
Federal Deposit Insurance Corporation

Washington, DC 20429-9990 

OFFICIAL BUSINESS 

PENALTY FOR PRIVATE USE, $300 

PRESORTED 

STANDARD 

MAIL 

Postage & 

Fees Paid 

FDIC 

Permit No. G-36