FDIC QUARTERLY A

Quarterly

2017

Volume 11, Number 4

Federal Deposit 

Insurance Corporation

Quarterly Banking Profile:

Third Quarter 2017

Factors Shaping Recent Trends 

in Banking Office Structure for 

Community and Noncommunity 

Banks 

Community Bank Mergers 

Since the Financial Crisis: 

How Acquired Community Banks 

Compared With Their Peers 
FDIC QUARTERLY

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

Federal Deposit Insurance Corporation and contains a comprehensive summary of the 

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

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

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

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

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

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

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

submitted to the Public Information Center. 

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

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

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

Chairman

Martin J. Gruenberg

Director, Division of Insurance and Research

Diane Ellis

Executive Editor

Richard A. Brown

Managing Editors

Alan Deaton

Matthew Green

Patrick Mitchell

Shayna M. Olesiuk

Jonathan Pogach

Philip A. Shively

Kathy Zeidler

Editors

Clayton Boyce

Kathy Zeidler

Publication Manager

Lynne Montgomery

Media Inquiries

(202) 898-6993
FDIC QUARTERLY i

2017 FDIC QUARTERLY

Volume 11 • Number 4

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

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

its accuracy by the Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited. Please provide the FDIC’s Division 

of Insurance and Research with a copy of any publications containing reprinted material.

Quarterly Banking Profile: Third Quarter 2017

FDIC-insured institutions reported aggregate net income of $47.9 billion in the third 

quarter of 2017, up $2.4 billion (5.2 percent) from a year earlier. The increase in earnings 

was mainly attributable to an $8.8 billion (7.4 percent) increase in net interest income. 

Of the 5,737 insured institutions reporting third quarter financial results, 67.3 percent 

reported year-over-year growth in quarterly earnings. The proportion of banks that were 

unprofitable in the third quarter fell to 3.9 percent from 4.6 percent a year earlier. See page 1.

Community Bank Performance Community banks—which represent 92 percent of insured institutions—reported net 

income of $6 billion in the third quarter, up 9.4 percent from one year earlier. Year-over-year 

profitability grew on gains in net interest income, driven by growth in higher-yielding loans. 

The 12-month growth rate in loan balances at community banks was 7.3 percent, which 

exceeded the industry growth rate. The noncurrent rate continued to improve, and net 

charge-offs declined. See page 15.

Insurance Fund Indicators Insured deposits increased by 0.7 percent in the third quarter of 2017. The DIF reserve 

ratio rose to 1.28 percent on September 30, 2017, up from 1.24 percent on June 30, 2017, and 

1.18 percent on September 30, 2016. There were no failures of FDIC-insured institutions 

during the quarter. See page 23.

Featured Articles:

Factors Shaping Recent Trends in Banking Office Structure 

for Community and Noncommunity Banks

Total industry deposits grew once again in 2017, and the rate of deposit growth was higher 

at community banks than at noncommunity banks, according to the 2017 Summary of 

Deposits (SOD) survey. Key findings from the SOD survey also show that the number of 

offices operated by noncommunity banks declined on a merger-adjusted basis in the most 

recent year and over the past five years, while the number of community bank offices 

increased slightly over both intervals. Relatively few banks have reported a net decline in 

their number of offices over the past five years, yet cutbacks in offices at these banks have 

been large enough to drive a sizable decline in the overall number of banking industry 

offices since 2012. This continuing trend of fewer banking offices can be attributed to 

factors such as population migration, office expense mitigation, industry consolidation, 

and financial technology. See page 31.

Community Bank Mergers Since the Financial Crisis: How 

Acquired Community Banks Compared With Their Peers

An increase in mergers and a dearth of new charters in the post-crisis period have renewed 

the interest of researchers in banking industry consolidation. This analysis focuses on 

community banks acquired between 2010 and 2016 in voluntary, inter-bank transactions 

and compares their characteristics with selected peer institutions. It refines the peer-group 

selection used in previous research by applying the FDIC’s community bank definition and 

controlling for asset size, geography, and lending specialty—a method that can be applied 

to future peer group analyses. A comparison of acquired community banks with their peers 

shows that acquired institutions were typically less profitable, reported lower capital ratios, 

and reported higher core deposit-to-asset ratios but lower ratios of nonperforming assets. 

The results of this research are consistent with past findings that acquired community banks 

generally underperform their peers. See page 41.

2017 FDIC QUARTERLY

QUARTERLY BANKING PROFILE Third Quarter 2017

FDIC QUARTERLY 1

INSURED INSTITUTION PERFORMANCE

FDIC-Insured Institutions Earn $47.9 Billion in the Third Quarter

Industry Net Income Is 5.2 Percent Higher Than a Year Earlier

Annual Loan and Lease Growth Slows to 3.5 Percent

Net Interest Income Rises 7.4 Percent From Third Quarter 2016

Community Bank Earnings Increase 9.4 Percent From a Year Earlier

Higher Net Interest Income 

Lifts Industry Earnings

Higher net interest income, reflecting modest growth in interest-bearing assets and wider 

net interest margins, helped earnings increase in the third quarter. Quarterly net income 

at the 5,737 commercial banks and savings institutions insured by the FDIC rose to 

$47.9 billion, an increase of $2.4 billion (5.2 percent) from third quarter 2016.1 The average 

return on assets (ROA) rose to 1.12 percent from 1.10 percent a year earlier. More than two 

out of every three banks—67.3 percent—reported year-over-year increases in earnings, and 

59.8 percent reported higher quarterly ROAs. Only 3.9 percent of banks reported net losses 

for the quarter, compared with 4.6 percent in third quarter 2016.

Net Interest Margins 

Continue to Improve

Net operating revenue—the sum of net interest income and total noninterest income—

totaled $191.7 billion, an increase of $8.2 billion (4.5 percent). Net interest income was 

$8.8 billion higher (7.4 percent), as 83.5 percent of all banks reported year-over-year 

increases. The average net interest margin (NIM) increased to 3.30 percent from 3.18 percent 

a year earlier, as average interest-bearing assets rose by 3.6 percent. Almost two out of every 

three banks—65.9 percent—reported higher net interest margins than a year earlier. Noninterest income was $639 million (1 percent) lower than in third quarter 2016. Gains on loan 

sales were down $1.1 billion (26.7 percent), while servicing fee income was $290 million 

(11.2 percent) lower. Trading income was down $25 million (0.4 percent), while income from 

fiduciary activities was $612 million (7.2 percent) higher than a year earlier.

Securities and Other Gains/Losses, Net

Net Operating Income

Quarterly Net Income

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

50

-10

0

10

20

30

40

1 2 3 4 123412 341234 1 2 341234 1 2 3

2011

28.7

2012

28.5

35.2

25.3

34.8

2013

34.5

37.5

34.4

2014

40.3 38.2 36.1

39.8

37.3

2015

40.1 38.5 36.5

2016

39.8

43.0

40.4 40.6 39.0

43.6 45.6

43.2

2017

44.0

48.1 47.9

Chart 1

Quarterly Noninterest Income 

Quarterly Net Interest Income 

Quarterly Net Operating Revenue 

All FDIC-Insured Institutions

$ Billions

Source: FDIC.

0

20

40

60

80

100

120

140

160

180

200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Chart 2

1

 The results do not include one insured community bank that was delayed in reporting. The omission does not have a material 

impact on industry or community bank results.
2 0 1 7  •  Volume 1 1  • Number 4

2 FDIC QUARTERLY

Banks Increase Loan-Loss 

Provisions

For the 12th time in the past 13 quarters, banks increased their provisions for loan and 

lease losses from year-earlier levels. Loss provisions totaled $13.8 billion, an increase of 

$2.4 billion (20.9 percent). This is the largest quarterly loss provision for the industry since 

fourth quarter 2012. Only 37.3 percent of banks reported year-over-year increases in their 

loss provisions, while 32.2 percent reported lower provisions than in third quarter 2016.

Net Charge-Off Rate 

Continues to Rise at a 

Slow Pace

Banks charged off $11 billion in uncollectible loans during the third quarter, up $813 million 

(8 percent) from a year earlier. This is the eighth consecutive quarter that charge-offs have 

increased. Credit card charge-offs were $1.2 billion (21.9 percent) higher, while charge-offs 

of auto loans were up $238 million (29.1 percent). Charge-offs of commercial and industrial 

(C&I) loans were $433 million (20.6 percent) lower than a year earlier, and charge-offs of 

residential mortgage loans were $227 million (72 percent) lower. The average net charge-off 

rate rose to 0.46 percent for the quarter, compared with 0.44 percent in third quarter 2016.

Noncurrent Balances Fall for 

Mortgages and C&I Loans, 

Rise for Consumer Loans

For the 29th time in the past 30 quarters, the amount of loans and leases that were 

noncurrent—90 days or more past due or in nonaccrual status—declined, falling by 

$2.1 billion (1.8 percent) during the three months ended September 30. The decline in noncurrent balances was led by a $1.5 billion (7.2 percent) drop in noncurrent C&I loans. Noncurrent residential mortgage loans fell by $1.6 billion (2.9 percent), while noncurrent credit 

cards increased by $1.2 billion (12.4 percent) and noncurrent auto loans rose by $296 million 

(20.3 percent). The average noncurrent rate fell from 1.23 percent to 1.20 percent during the 

quarter. This is the lowest noncurrent rate for the industry since third quarter 2007.

Reserve Allocations Mirror 

Loan Performance Trends

Banks increased their reserves for loan and lease losses by $2.1 billion (1.8 percent) during 

the quarter, as loss provisions of $13.8 billion exceeded net charge-offs of $11 billion. At 

banks with assets greater than $1 billion, which account for 90 percent of total industry 

reserves, most of the growth in reserves occurred in reserves for credit card losses (up 

$2.3 billion, 6.9 percent). These banks, which report their reserves on a disaggregated basis, 

reduced their reserves for commercial loan losses and residential real estate losses during the 

quarter. The overall increase in reserves, combined with the reduction in noncurrent loan 

balances, meant that the industry’s coverage ratio of reserves to noncurrent loans rose from 

104.2 percent to 107.9 percent during the quarter. This is the highest level for the coverage 

ratio since midyear 2007.

Quarterly Net Interest Margin

All FDIC-Insured Institutions

Percent

Source: FDIC.

2.0

2.5

3.0

3.5

4.0

4.5

5.0

 Assets > $250 Billion

 Assets $10 Billion - $250 Billion

 Assets $1 Billion - $10 Billion

 Assets $100 Million - $1 Billion

 Assets < $100 Million

2010 2011 2012 2013 2014 2015 2016 2017

Chart 3

Source: FDIC.

Percent

Noncurrent Loan Rate and Quarterly Net Charge-O
 Rate

All FDIC-Insured Institutions

0

1

2

3

4

5

6

Noncurrent Loan Rate

Quarterly Net Charge-O Rate

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Chart 4
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 3

Banks Increase Dividends in 

the Third Quarter

Equity capital growth slowed in the third quarter, as a number of banks increased their 

dividends. Total equity capital increased by $16.3 billion (0.8 percent), with retained earnings contributing $12.1 billion to capital growth and with an increase in accumulated other 

comprehensive income adding $2.1 billion. Retained earnings were $2.9 billion lower than 

a year earlier, as dividends were $5.3 billion (17.2 percent) higher. More than a quarter of 

all banks (28 percent), including four of the five largest banks, increased their quarterly 

dividends from year-earlier levels. At the end of the quarter, 99.4 percent of all banks, 

representing 99.97 percent of total industry assets, met or exceeded the highest regulatory 

capital standards, as defined for Prompt Corrective Action purposes.

Asset Growth Slows for 

Fourth Consecutive Quarter

Total assets increased by $168.8 billion (1 percent) during the three months ended 

September 30. Banks increased their securities holdings by $45.7 billion (1.3 percent), as 

mortgage-backed securities increased by $44.5 billion (2.1 percent). Cash and balances due 

from depository institutions rose by $53.3 billion (2.8 percent), as balances due from Federal 

Reserve banks increased by only $2 billion (0.2 percent). Assets in trading accounts rose by 

$912 million (0.2 percent) during the quarter.

Annual Loan and Lease 

Growth Slows to 3.5 Percent

Total loan and lease balances grew by $96.2 billion (1 percent) during the quarter. 

Growth was led by residential mortgage loans (up $20.5 billion, 1 percent), credit cards (up 

$15.7 billion, 2 percent), real estate loans secured by nonfarm nonresidential real estate 

properties (up $12.1 billion, 0.9 percent), real estate construction and development loans 

(up $6.7 billion, 2.1 percent), and C&I loans (up $6.5 billion, 0.3 percent). Unused loan 

commitments increased by $61.4 billion (0.8 percent) during the quarter. For the 12 months 

ended September 30, total loan balances were up 3.5 percent, compared with a 3.7 percent 

annual growth rate last quarter and 6.8 percent a year earlier. Unused loan commitments 

rose 3.1 percent over the past 12 months, down from a 3.9 percent annual growth rate last 

quarter and 4.8 percent a year earlier. The slowdowns in loan and unused commitment 

growth occurred across all major loan categories and are reflective of an economy in its 

ninth year of expansion.

Source: FDIC.

*Loan-loss reserves to noncurrent loans & leases.

$ Billions Coverage Ratio (Percent)

Reserve Coverage Ratio*

 0

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

Noncurrent Loans & Leases ($ Billions)

Loan-Loss Reserves ($ Billions)

Coverage Ratio (Percent)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Chart 5

Quarterly Change in Loan Balances

All FDIC-Insured Institutions

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 rst quarter of 2010. Although the total amount

consolidated cannot be precisely quantied, the industry would have reported a decline in loan balances 

for the quarter absent this change in accounting standards. 

Quarterly Change in Loans ($ Billions) 12-Month Growth Rate (Percent)

-15

-10

-5

0

5

10

15

-300

-200

-100

0

100

200

300

146

108

66 43

189

237

203

61

28

-6

-109

-210

-133

-107

-7

-126

67

24

134

-63

102 117

-37

74 7091

178

51

149

53

185 197

99

182

-8

161

96

196

-116-140

-14

65 38

95 112

72

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

221*

Chart 6
2 0 1 7  •  Volume 1 1  • Number 4

4 FDIC QUARTERLY

Large Denomination 

Deposits and Nondeposit 

Liabilities Fund Most of 

Asset Growth

Total deposits increased by $110.9 billion (0.8 percent) in the third quarter. Domestic office 

deposits rose by $136.1 billion (1.2 percent), while deposits in foreign offices declined 

by $25.2 billion (1.9 percent). Deposits in consumer accounts declined by $69 billion 

(1.6 percent). Domestic interest-bearing deposits rose by $140.2 billion, while deposits 

in noninterest-bearing accounts fell by $4.1 billion (0.1 percent). Domestic deposits in 

accounts larger than $250,000 increased by $87.6 billion (1.4 percent). Banks increased their 

nondeposit liabilities by $41.7 billion (2.1 percent) during the quarter. Federal Home Loan 

Bank advances rose by $9.7 billion (1.7 billion), and unsecured borrowings increased by 

$15.8 billion (4.5 percent).

Two New Charters 

Are Added

The number of FDIC-insured commercial banks and savings institutions reporting quarterly 

financial results declined to 5,737 in the third quarter, from 5,787 reporters in the second 

quarter. During the third quarter, mergers absorbed 50 insured institutions. Two new charters 

were added during the third quarter, and there were no bank failures. One insured institution 

had not filed a September 30 Call Report at the time this report was prepared. The number of 

banks on the FDIC’s “Problem Bank List” declined from 105 to 104 during the third quarter. 

Total assets of “problem” banks fell from $17.2 billion to $16 billion. The number of full-time 

equivalent employees at FDIC-insured institutions in the third quarter was 2,083,029. This is 

10,245 fewer than in the second quarter but 39,572 more than a year ago.

Author:

Ross Waldrop

Senior Banking Analyst

Division of Insurance and Research

(202) 898-3951

0

10

20

30

40

50

> 15 Years

5-15 Years

3-5 Years

Loans and Securities > 3 Years as a Percent of Total Assets

All Insured Call Report Filers

Percent

Source: FDIC.

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

33.3% 35.5%

2017

Chart 7

Source: FDIC.

Assets ($ Billions) Number

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

0

50

100

150

200

250

300

350

400

450

500

0

100

200

300

400

500

600

700

800

900

1,000

Number of Problem Banks 

$16

104

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Problem Bank Assets

Chart 8
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 5

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

2017** 2016** 2016 2015 2014 2013 2012

Return on assets (%) 1.10 1.04 1.04 1.04 1.01 1.07 1.00

Return on equity (%) 9.78 9.28 9.29 9.29 9.01 9.54 8.90

Core capital (leverage) ratio (%) 9.70 9.55 9.48 9.59 9.44 9.40 9.15

Noncurrent assets plus other real estate owned to assets (%) 0.72 0.88 0.86 0.97 1.20 1.63 2.20

Net charge-offs to loans (%) 0.48 0.45 0.47 0.44 0.49 0.69 1.10

Asset growth rate (%) 2.81 6.12 5.09 2.66 5.59 1.94 4.02

Net interest margin (%) 3.23 3.11 3.13 3.07 3.14 3.26 3.42

Net operating income growth (%) 9.67 3.93 4.62 7.11 -0.73 12.82 17.76

Number of institutions reporting 5,737 5,980 5,913 6,182 6,509 6,812 7,083

Commercial banks 4,969 5,169 5,112 5,338 5,607 5,847 6,072

Savings institutions 768 811 801 844 902 965 1,011

Percentage of unprofitable institutions (%) 3.82 4.00 4.43 4.79 6.27 8.16 11.00

Number of problem institutions 104 132 123 183 291 467 651

Assets of problem institutions (in billions) $16 $25 $28 $47 $87 $153 $233

Number of failed institutions 6 5 5 8 18 24 51

Number of assisted institutions 0 0 0 0 0 0 0

* Excludes insured branches of foreign banks (IBAs).

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

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

(dollar figures in millions)  3rd Quarter

2017

2nd Quarter

2017

3rd Quarter

2016

%Change 

16Q3-17Q3

Number of institutions reporting 5,737 5,787 5,980 -4.1

Total employees (full-time equivalent) 2,083,029 2,093,274 2,043,457 1.9

CONDITION DATA

Total assets $17,238,238 $17,069,437 $16,766,542 2.8

Loans secured by real estate 4,728,321 4,690,849 4,567,616 3.5

 1-4 Family residential mortgages 2,040,347 2,019,823 1,989,173 2.6

 Nonfarm nonresidential 1,377,267 1,365,182 1,301,016 5.9

 Construction and development 330,747 324,093 303,240 9.1

 Home equity lines 417,288 424,033 444,313 -6.1

Commercial & industrial loans 1,988,928 1,982,455 1,940,879 2.5

Loans to individuals 1,602,277 1,573,843 1,544,469 3.7

 Credit cards 795,395 779,715 761,645 4.4

Farm loans 80,884 79,452 80,624 0.3

Other loans & leases 1,156,036 1,133,655 1,101,284 5.0

Less: Unearned income 2,059 2,040 2,075 -0.8

Total loans & leases 9,554,387 9,458,213 9,232,797 3.5

Less: Reserve for losses 123,512 121,387 122,064 1.2

Net loans and leases 9,430,875 9,336,826 9,110,733 3.5

Securities 3,614,696 3,568,971 3,507,739 3.1

Other real estate owned 9,041 9,627 11,781 -23.3

Goodwill and other intangibles 377,994 376,682 363,422 4.0

All other assets 3,805,632 3,777,331 3,772,867 0.9

Total liabilities and capital 17,238,238 17,069,437 16,766,542 2.8

Deposits 13,216,202 13,105,314 12,798,806 3.3

 Domestic office deposits 11,916,718 11,780,621 11,460,799 4.0

 Foreign office deposits 1,299,484 1,324,692 1,338,006 -2.9

Other borrowed funds 1,474,082 1,447,741 1,445,298 2.0

Subordinated debt 75,110 77,428 87,037 -13.7

All other liabilities 518,277 500,648 548,793 -5.6

Total equity capital (includes minority interests) 1,954,567 1,938,306 1,886,609 3.6

 Bank equity capital 1,949,532 1,933,225 1,880,397 3.7

Loans and leases 30-89 days past due 64,019 58,406 60,095 6.5

Noncurrent loans and leases 114,445 116,515 133,999 -14.6

Restructured loans and leases 61,509 62,831 67,822 -9.3

Mortgage-backed securities 2,117,054 2,072,554 1,979,654 6.9

Earning assets 15,582,650 15,406,758 15,103,238 3.2

FHLB Advances 575,397 565,704 541,825 6.2

Unused loan commitments 7,408,050 7,346,677 7,187,631 3.1

Trust assets 19,709,519 18,547,441 17,656,868 11.6

Assets securitized and sold 698,213 714,677 762,656 -8.5

Notional amount of derivatives 190,583,180 187,860,431 179,902,250 5.9

INCOME DATA

First Three 

Quarters 2017

First Three 

Quarters 2016 %Change

3rd Quarter 

2017

3rd Quarter 

2016

%Change 

16Q3-17Q3

Total interest income $423,002 $382,660 10.5 $147,334 $132,540 11.2

Total interest expense 52,318 40,093 30.5 19,835 13,867 43.0

Net interest income 370,685 342,567 8.2 127,499 118,672 7.4

Provision for loan and lease losses 37,750 35,655 5.9 13,796 11,408 20.9

Total noninterest income 193,006 190,973 1.1 64,234 64,873 -1.0

Total noninterest expense 325,455 315,110 3.3 108,972 106,926 1.9

Securities gains (losses) 2,107 3,161 -33.4 825 867 -4.8

Applicable income taxes 62,899 57,653 9.1 21,887 20,340 7.6

Extraordinary gains, net** 135 -295 N/M 119 -89 N/M

Total net income (includes minority interests) 139,827 127,988 9.3 48,023 45,649 5.2

 Bank net income 139,562 127,747 9.2 47,936 45,583 5.2

Net charge-offs 33,597 30,322 10.8 10,952 10,139 8.0

Cash dividends 91,298 74,190 23.1 35,815 30,555 17.2

Retained earnings 48,264 53,557 -9.9 12,121 15,028 -19.4

Net operating income 138,251 126,061 9.7 47,342 45,122 4.9

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled. N/M - Not Meaningful

** See Notes to Users for explanation.
2 0 1 7  •  Volume 1 1  • Number 4

6 FDIC QUARTERLY

TABLE III-A. Third Quarter 2017, All FDIC-Insured Institutions*

Asset Concentration Groups**

THIRD QUARTER

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting 5,737 11 5 1,421 2,944 446 62 271 519 58

Commercial banks 4,969 10 5 1,407 2,640 112 48 241 456 50

Savings institutions 768 1 0 14 304 334 14 30 63 8

Total assets (in billions) $17,238.2 $518.3 $4,205.0 $284.7 $5,868.0 $366.1 $260.4 $46.0 $90.5 $5,599.2

Commercial banks 16,053.3 442.6 4,205.0 278.8 5,385.2 105.7 160.8 41.3 77.3 5,356.6

Savings institutions 1,184.9 75.7 0.0 5.9 482.8 260.4 99.6 4.7 13.2 242.6

Total deposits (in billions) 13,216.2 294.4 3,035.6 233.4 4,603.8 287.4 220.2 37.0 76.1 4,428.3

Commercial banks 12,287.1 237.7 3,035.6 230.5 4,242.9 88.9 135.5 33.9 65.3 4,216.8

Savings institutions 929.1 56.7 0.0 3.0 361.0 198.5 84.7 3.1 10.8 211.5

Bank net income (in millions) 47,936 2,808 10,626 949 16,394 889 795 349 222 14,904

Commercial banks 44,454 2,350 10,626 912 14,998 375 525 167 202 14,298

Savings institutions 3,482 457 0 37 1,396 513 270 181 20 606

Performance Ratios (annualized, %)

Yield on earning assets 3.81 12.78 2.98 4.35 4.00 3.43 4.14 3.12 3.95 3.37

Cost of funding earning assets 0.51 1.64 0.53 0.54 0.50 0.55 0.47 0.34 0.42 0.41

Net interest margin 3.30 11.14 2.45 3.81 3.50 2.88 3.67 2.77 3.53 2.96

Noninterest income to assets 1.50 2.63 1.82 0.67 1.32 1.33 1.16 7.94 0.93 1.36

Noninterest expense to assets 2.54 5.25 2.33 2.53 2.70 2.59 2.37 6.36 2.95 2.26

Loan and lease loss provision to assets 0.32 4.15 0.22 0.13 0.19 0.03 0.43 0.07 0.09 0.21

Net operating income to assets 1.11 2.22 1.00 1.33 1.12 0.96 1.23 3.02 0.97 1.05

Pretax return on assets 1.63 3.38 1.43 1.58 1.62 1.46 1.95 4.11 1.19 1.61

Return on assets 1.12 2.21 1.01 1.34 1.13 0.98 1.23 3.06 0.99 1.07

Return on equity 9.89 13.94 10.19 11.63 9.32 8.70 12.17 19.37 8.31 9.63

Net charge-offs to loans and leases 0.46 3.75 0.54 0.09 0.19 0.03 0.56 0.25 0.15 0.39

Loan and lease loss provision to 

net charge-offs 125.98 139.27 114.66 200.05 141.29 128.63 106.05 107.76 105.91 106.06

Efficiency ratio 56.15 40.38 58.12 59.54 59.35 63.49 49.23 60.57 69.87 54.91

% of unprofitable institutions 3.92 9.09 0.00 2.11 3.46 8.74 4.84 8.12 5.20 1.72

% of institutions with earnings gains 67.30 45.45 100.00 62.42 71.37 62.56 69.35 60.52 65.51 63.79

Structural Changes

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

Institutions absorbed by mergers 50 0 0 13 34 1 0 0 1 1

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

PRIOR THIRD QUARTERS

(The way it was...)

Return on assets (%) 2016 1.10 2.26 0.90 1.29 1.01 1.04 1.02 2.68 0.95 1.22

 2014 1.01 3.10 0.79 1.28 0.95 0.83 1.18 2.12 0.92 0.96

 2012 1.06 3.19 0.98 1.36 0.92 0.75 1.67 1.42 1.04 1.01

Net charge-offs to loans & leases (%) 2016 0.44 3.11 0.48 0.09 0.22 0.04 0.66 0.16 0.19 0.41

 2014 0.46 2.62 0.68 0.09 0.25 0.15 0.57 0.30 0.24 0.26

 2012 1.18 3.53 1.74 0.23 0.74 0.76 1.26 0.42 0.49 1.07

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled.

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

FDIC QUARTERLY 7

TABLE III-A. Third Quarter 2017, All FDIC-Insured Institutions* 

Asset Size Distribution Geographic Regions**

THIRD QUARTER

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to $10 

Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion

New 

York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting 5,737 1,444 3,538 630 116 9 704 683 1,221 1,449 1,246 434

Commercial banks 4,969 1,267 3,081 511 101 9 365 618 1,023 1,400 1,166 397

Savings institutions 768 177 457 119 15 0 339 65 198 49 80 37

Total assets (in billions) $17,238.2 $85.7 $1,154.8 $1,725.6 $5,574.9 $8,697.3 $3,182.0 $3,584.3 $3,902.6 $3,687.4 $1,067.3 $1,814.6

Commercial banks 16,053.3 75.6 984.3 1,390.4 4,905.8 8,697.3 2,734.7 3,484.5 3,791.0 3,646.8 934.8 1,461.7

Savings institutions 1,184.9 10.1 170.5 335.3 669.1 0.0 447.3 99.8 111.7 40.7 132.5 352.9

Total deposits (in billions) 13,216.2 71.2 960.4 1,372.3 4,249.4 6,562.9 2,398.8 2,817.7 2,906.0 2,770.7 869.6 1,453.5

Commercial banks 12,287.1 63.5 825.6 1,116.8 3,718.4 6,562.9 2,060.5 2,737.8 2,828.7 2,741.0 761.0 1,158.2

Savings institutions 929.1 7.7 134.9 255.5 531.0 0.0 338.3 79.9 77.3 29.7 108.6 295.3

Bank net income (in millions) 47,936 219 3,327 4,947 16,673 22,770 7,614 9,892 10,972 9,630 3,170 6,658

Commercial banks 44,454 188 2,888 4,167 14,441 22,770 6,728 9,725 10,636 9,539 2,742 5,086

Savings institutions 3,482 31 439 780 2,232 0 886 167 337 91 428 1,573

Performance Ratios (annualized, %)

Yield on earning assets 3.81 4.26 4.31 4.19 4.32 3.32 3.95 3.92 3.08 3.90 4.21 4.48

Cost of funding earning assets 0.51 0.47 0.51 0.53 0.59 0.46 0.63 0.44 0.44 0.58 0.42 0.52

Net interest margin 3.30 3.79 3.80 3.66 3.73 2.86 3.32 3.47 2.64 3.31 3.79 3.96

Noninterest income to assets 1.50 1.35 1.18 1.19 1.58 1.55 1.38 1.38 1.91 1.22 1.33 1.72

Noninterest expense to assets 2.54 3.54 3.13 2.74 2.65 2.35 2.51 2.51 2.54 2.40 3.02 2.68

Loan and lease loss provision to assets 0.32 0.12 0.13 0.21 0.54 0.23 0.45 0.37 0.13 0.30 0.20 0.53

Net operating income to assets 1.11 1.01 1.15 1.15 1.19 1.04 0.96 1.10 1.13 1.02 1.20 1.45

Pretax return on assets 1.63 1.20 1.48 1.64 1.80 1.54 1.40 1.65 1.61 1.53 1.60 2.27

Return on assets 1.12 1.02 1.16 1.16 1.21 1.05 0.96 1.11 1.13 1.05 1.20 1.49

Return on equity 9.89 7.74 10.19 9.80 9.82 9.95 7.74 9.13 10.82 10.39 10.56 12.36

Net charge-offs to loans and leases 0.46 0.16 0.13 0.20 0.64 0.46 0.52 0.58 0.25 0.49 0.26 0.59

Loan and lease loss provision to 

net charge-offs 125.98 128.79 142.91 146.99 139.26 107.19 151.36 108.51 107.03 118.69 119.81 148.08

Efficiency ratio 56.15 72.92 66.10 59.15 52.59 56.52 56.90 55.29 58.86 56.07 62.11 48.86

% of unprofitable institutions 3.92 8.59 2.54 1.11 3.45 0.00 6.82 5.86 3.77 2.69 2.81 3.92

% of institutions with earnings gains 67.30 59.42 68.29 77.62 79.31 66.67 74.29 69.99 66.26 61.70 67.17 73.73

Structural Changes

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

Institutions absorbed by mergers 50 15 25 9 1 0 6 10 11 12 9 2

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

PRIOR THIRD QUARTERS

(The way it was...)

Return on assets (%) 2016 1.10 0.97 1.13 1.11 1.09 1.10 0.87 1.25 1.00 1.10 1.16 1.40

 2014 1.01 0.88 1.04 1.12 1.06 0.95 0.87 0.89 0.82 1.14 1.17 1.61

 2012 1.06 0.79 0.87 1.02 1.11 1.08 1.02 0.72 0.95 1.28 1.16 1.68

Net charge-offs to loans & leases (%) 2016 0.44 0.15 0.12 0.23 0.62 0.43 0.50 0.51 0.27 0.47 0.28 0.58

 2014 0.46 0.22 0.18 0.25 0.66 0.41 0.68 0.35 0.32 0.55 0.21 0.45

 2012 1.18 0.38 0.58 0.79 1.26 1.39 1.15 1.33 1.04 1.54 0.52 0.83

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled.

** See Table V-A (page 11) for explanations.
2 0 1 7  •  Volume 1 1  • Number 4

8 FDIC QUARTERLY

TABLE IV-A. First Three Quarters 2017, All FDIC-Insured Institutions*

Asset Concentration Groups**

FIRST THREE QUARTERS

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting 5,737 11 5 1,421 2,944 446 62 271 519 58

Commercial banks 4,969 10 5 1,407 2,640 112 48 241 456 50

Savings institutions 768 1 0 14 304 334 14 30 63 8

Total assets (in billions) $17,238.2 $518.3 $4,205.0 $284.7 $5,868.0 $366.1 $260.4 $46.0 $90.5 $5,599.2

Commercial banks 16,053.3 442.6 4,205.0 278.8 5,385.2 105.7 160.8 41.3 77.3 5,356.6

Savings institutions 1,184.9 75.7 0.0 5.9 482.8 260.4 99.6 4.7 13.2 242.6

Total deposits (in billions) 13,216.2 294.4 3,035.6 233.4 4,603.8 287.4 220.2 37.0 76.1 4,428.3

Commercial banks 12,287.1 237.7 3,035.6 230.5 4,242.9 88.9 135.5 33.9 65.3 4,216.8

Savings institutions 929.1 56.7 0.0 3.0 361.0 198.5 84.7 3.1 10.8 211.5

Bank net income (in millions) 139,562 7,886 30,108 2,625 45,767 2,771 2,205 1,014 646 46,539

Commercial banks 129,637 6,692 30,108 2,541 41,672 1,341 1,512 465 583 44,724

Savings institutions 9,925 1,195 0 84 4,096 1,430 694 549 63 1,815

Performance Ratios (annualized, %)

Yield on earning assets 3.69 12.40 2.88 4.21 3.88 3.30 3.98 3.07 3.87 3.26

Cost of funding earning assets 0.46 1.49 0.47 0.50 0.46 0.46 0.41 0.33 0.40 0.35

Net interest margin 3.23 10.91 2.41 3.71 3.42 2.84 3.57 2.74 3.46 2.91

Noninterest income to assets 1.52 2.48 1.87 0.65 1.28 1.36 1.09 7.73 0.93 1.45

Noninterest expense to assets 2.56 5.22 2.41 2.51 2.72 2.47 2.30 6.20 2.90 2.25

Loan and lease loss provision to assets 0.30 3.98 0.19 0.14 0.17 0.06 0.46 0.05 0.08 0.19

Net operating income to assets 1.09 2.09 0.96 1.23 1.06 1.01 1.15 2.96 0.95 1.10

Pretax return on assets 1.59 3.24 1.39 1.47 1.51 1.55 1.83 4.01 1.17 1.66

Return on assets 1.10 2.09 0.97 1.24 1.06 1.04 1.15 2.98 0.96 1.12

Return on equity 9.78 13.42 9.74 10.94 8.88 9.40 11.49 19.20 8.22 10.17

Net charge-offs to loans and leases 0.48 3.90 0.56 0.13 0.21 0.10 0.60 0.19 0.14 0.39

Loan and lease loss provision to 

net charge-offs 112.36 128.74 92.92 157.72 119.80 89.00 108.03 98.02 108.11 98.24

Efficiency ratio 57.04 41.25 60.06 60.79 61.27 60.88 49.42 60.53 69.90 54.17

% of unprofitable institutions 3.82 0.00 0.00 2.39 3.29 8.07 6.45 6.64 5.78 0.00

% of institutions with earnings gains 65.82 45.45 100.00 57.28 72.18 58.74 67.74 53.87 64.35 74.14

Condition Ratios (%)

Earning assets to total assets 90.40 91.29 87.88 93.30 90.98 94.67 97.62 92.11 92.82 90.78

Loss allowance to:

Loans and leases 1.29 4.61 1.39 1.41 1.07 0.75 0.85 1.47 1.27 1.15

Noncurrent loans and leases 107.92 308.21 110.48 131.09 117.48 30.98 169.80 104.25 117.07 76.47

Noncurrent assets plus

other real estate owned to assets 0.72 1.19 0.48 0.86 0.74 1.56 0.37 0.54 0.86 0.79

Equity capital ratio 11.31 15.69 9.97 11.57 12.07 11.32 10.10 15.84 11.90 11.11

Core capital (leverage) ratio 9.70 13.40 8.81 11.14 10.22 11.01 10.17 15.19 11.73 9.23

Common equity tier 1 capital ratio 13.19 12.58 13.52 14.67 12.45 21.66 18.09 33.47 20.06 13.05

Tier 1 risk-based capital ratio 13.27 12.70 13.59 14.69 12.53 21.68 18.31 33.48 20.08 13.14

Total risk-based capital ratio 14.69 14.85 15.02 15.81 13.86 22.57 19.18 34.46 21.21 14.65

Net loans and leases to deposits 71.36 133.75 49.45 82.08 88.36 77.40 84.23 33.55 65.87 63.36

Net loans to total assets 54.71 75.97 35.70 67.31 69.33 60.76 71.20 26.94 55.40 50.11

Domestic deposits to total assets 69.13 56.25 47.48 82.00 78.17 78.22 84.52 80.29 84.11 74.80

Structural Changes

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

Institutions absorbed by mergers 166 0 0 27 122 7 0 1 7 2

Failed institutions 6 0 0 0 4 1 0 0 1 0

PRIOR FIRST THREE QUARTERS

(The way it was...)

Number of institutions 2016 5,980 13 5 1,461 3,012 478 62 304 585 60

 2014 6,589 16 3 1,501 3,284 570 50 371 729 65

 2012 7,181 17 5 1,539 3,576 706 53 397 818 70

Total assets (in billions) 2016 $16,766.5 $500.8 $4,145.8 $273.5 $5,678.8 $386.7 $205.5 $54.6 $103.3 $5,417.6

 2014 15,348.7 605.5 3,690.9 254.1 5,186.3 435.5 167.5 60.5 128.5 4,819.9

 2012 14,222.9 580.5 3,774.3 223.9 4,125.0 821.8 116.9 63.4 142.7 4,374.5

Return on assets (%) 2016 1.04 2.31 0.90 1.24 0.99 0.99 1.01 2.56 0.96 1.08

 2014 1.03 3.20 0.81 1.20 0.97 0.86 1.10 2.08 0.89 0.97

 2012 1.02 3.14 0.83 1.30 0.91 0.82 1.62 1.25 1.01 1.01

Net charge-offs to loans & leases (%) 2016 0.45 3.21 0.53 0.11 0.20 0.05 0.65 0.16 0.18 0.42

 2014 0.49 2.86 0.73 0.09 0.26 0.19 0.62 0.24 0.23 0.29

 2012 1.14 3.81 1.53 0.22 0.75 0.78 1.44 0.33 0.42 0.98

Noncurrent assets plus 

OREO to assets (%) 2016 0.88 1.01 0.62 0.78 0.88 1.78 0.87 0.59 1.00 1.01

 2014 1.29 0.82 0.90 0.88 1.30 2.27 1.10 0.75 1.46 1.58

 2012 2.36 1.10 1.47 1.26 2.51 2.26 1.45 1.10 1.65 3.30

Equity capital ratio (%) 2016 11.22 15.17 9.79 11.61 11.98 11.33 10.00 15.46 12.01 11.10

 2014 11.20 14.90 9.50 11.40 11.97 12.02 9.96 14.30 11.91 11.09

 2012 11.39 14.82 9.17 11.68 11.87 10.83 9.96 15.04 11.86 12.44

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled.

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

FDIC QUARTERLY 9

TABLE IV-A. First Three Quarters 2017, All FDIC-Insured Institutions* 

Asset Size Distribution Geographic Regions**

FIRST THREE QUARTERS

(The way it is...)

All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to $10 

Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion

New 

York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Number of institutions reporting 5,737 1,444 3,538 630 116 9 704 683 1,221 1,449 1,246 434

Commercial banks 4,969 1,267 3,081 511 101 9 365 618 1,023 1,400 1,166 397

Savings institutions 768 177 457 119 15 0 339 65 198 49 80 37

Total assets (in billions) $17,238.2 $85.7 $1,154.8 $1,725.6 $5,574.9 $8,697.3 $3,182.0 $3,584.3 $3,902.6 $3,687.4 $1,067.3 $1,814.6

Commercial banks 16,053.3 75.6 984.3 1,390.4 4,905.8 8,697.3 2,734.7 3,484.5 3,791.0 3,646.8 934.8 1,461.7

Savings institutions 1,184.9 10.1 170.5 335.3 669.1 0.0 447.3 99.8 111.7 40.7 132.5 352.9

Total deposits (in billions) 13,216.2 71.2 960.4 1,372.3 4,249.4 6,562.9 2,398.8 2,817.7 2,906.0 2,770.7 869.6 1,453.5

Commercial banks 12,287.1 63.5 825.6 1,116.8 3,718.4 6,562.9 2,060.5 2,737.8 2,828.7 2,741.0 761.0 1,158.2

Savings institutions 929.1 7.7 134.9 255.5 531.0 0.0 338.3 79.9 77.3 29.7 108.6 295.3

Bank net income (in millions) 139,562 623 9,400 14,707 46,540 68,292 22,146 29,105 30,376 29,192 9,356 19,386

Commercial banks 129,637 533 8,110 12,397 40,305 68,292 19,585 28,640 29,403 28,907 8,143 14,959

Savings institutions 9,925 90 1,290 2,310 6,235 0 2,561 466 973 285 1,213 4,427

Performance Ratios (annualized, %)

Yield on earning assets 3.69 4.16 4.22 4.11 4.15 3.23 3.81 3.81 2.95 3.80 4.08 4.33

Cost of funding earning assets 0.46 0.45 0.49 0.48 0.52 0.40 0.57 0.38 0.38 0.53 0.38 0.46

Net interest margin 3.23 3.71 3.73 3.62 3.62 2.82 3.24 3.43 2.57 3.27 3.70 3.87

Noninterest income to assets 1.52 1.27 1.16 1.25 1.52 1.62 1.36 1.45 1.88 1.27 1.38 1.75

Noninterest expense to assets 2.56 3.44 3.12 2.75 2.64 2.39 2.52 2.56 2.55 2.43 2.98 2.67

Loan and lease loss provision to assets 0.30 0.12 0.13 0.21 0.50 0.21 0.39 0.35 0.13 0.27 0.20 0.51

Net operating income to assets 1.09 0.97 1.10 1.16 1.13 1.05 0.94 1.09 1.05 1.04 1.20 1.44

Pretax return on assets 1.59 1.14 1.41 1.66 1.68 1.55 1.35 1.63 1.51 1.54 1.61 2.22

Return on assets 1.10 0.97 1.11 1.17 1.13 1.06 0.94 1.10 1.05 1.07 1.21 1.46

Return on equity 9.78 7.48 9.82 10.04 9.33 10.08 7.66 9.09 10.15 10.67 10.82 12.22

Net charge-offs to loans and leases 0.48 0.17 0.12 0.20 0.68 0.46 0.55 0.58 0.28 0.49 0.27 0.64

Loan and lease loss provision to 

net charge-offs 112.36 121.20 152.05 145.40 121.98 94.65 126.58 104.32 92.19 104.05 118.27 131.60

Efficiency ratio 57.04 73.10 67.03 59.25 54.10 57.08 58.40 56.01 60.59 56.61 61.65 49.16

% of unprofitable institutions 3.82 8.73 2.54 0.48 0.00 0.00 4.97 5.56 4.10 2.48 3.45 3.92

% of institutions with earnings gains 65.82 54.78 67.21 81.11 76.72 77.78 73.72 69.40 65.36 58.25 64.77 76.96

Condition Ratios (%)

Earning assets to total assets 90.40 92.47 93.11 92.49 90.91 89.27 89.62 89.80 89.88 90.03 91.98 93.86

Loss allowance to:

Loans and leases 1.29 1.40 1.27 1.11 1.40 1.26 1.29 1.33 1.18 1.34 1.16 1.42

Noncurrent loans and leases 107.92 107.74 137.02 136.96 129.60 86.47 126.87 96.68 98.96 89.15 110.43 194.72

Noncurrent assets plus

other real estate owned to assets 0.72 1.09 0.88 0.68 0.70 0.72 0.63 0.86 0.64 0.85 0.83 0.48

Equity capital ratio 11.31 13.31 11.42 11.87 12.23 10.57 12.47 12.15 10.45 10.08 11.47 11.86

Core capital (leverage) ratio 9.70 13.07 11.16 10.73 10.44 8.80 10.40 9.64 9.19 8.95 10.24 10.94

Common equity tier 1 capital ratio 13.19 20.77 15.42 13.90 13.18 12.65 13.33 12.91 13.18 12.33 13.27 15.24

Tier 1 risk-based capital ratio 13.27 20.81 15.46 13.92 13.35 12.69 13.40 13.02 13.23 12.38 13.37 15.39

Total risk-based capital ratio 14.69 21.88 16.56 14.93 14.84 14.21 14.80 14.42 14.45 14.33 14.47 16.48

Net loans and leases to deposits 71.36 71.16 81.31 87.39 78.33 62.04 74.21 72.93 65.65 68.73 78.73 75.62

Net loans to total assets 54.71 59.15 67.63 69.50 59.71 46.81 55.94 57.33 48.88 51.64 64.14 60.57

Domestic deposits to total assets 69.13 83.12 83.16 79.28 73.10 62.57 68.74 76.24 64.86 58.41 81.42 79.50

Structural Changes

New reporters 4 3 0 1 0 0 0 1 0 0 2 1

Institutions absorbed by mergers 166 45 96 24 1 0 22 30 44 33 29 8

Failed institutions 6 2 2 2 0 0 1 0 3 0 1 1

PRIOR FIRST THREE QUARTERS

(The way it was...)

Number of institutions 2016 5,980 1,589 3,656 621 104 10 731 731 1,287 1,500 1,280 451

 2014 6,589 1,940 3,966 575 100 8 816 823 1,427 1,614 1,387 522

 2012 7,181 2,287 4,235 551 101 7 891 918 1,529 1,738 1,513 592

Total assets (in billions) 2016 $16,766.5 $94.1 $1,171.8 $1,741.0 $4,983.0 $8,776.7 $3,158.4 $3,478.0 $3,785.4 $3,644.3 $1,001.6 $1,698.8

 2014 15,348.7 114.2 1,227.5 1,531.3 4,795.9 7,679.9 3,045.0 3,134.2 3,503.2 3,363.6 884.9 1,417.9

 2012 14,222.9 132.4 1,278.3 1,424.4 4,605.4 6,782.4 2,927.6 2,942.9 3,230.9 3,059.1 845.8 1,216.4

Return on assets (%) 2016 1.04 0.95 1.09 1.07 1.08 1.01 0.85 1.03 0.98 1.09 1.10 1.43

 2014 1.03 0.84 0.99 1.08 1.12 0.97 0.95 0.89 0.89 1.14 1.15 1.50

 2012 1.02 0.72 0.84 1.18 1.08 0.98 0.94 0.76 0.91 1.13 1.10 1.79

Net charge-offs to loans & leases (%) 2016 0.45 0.15 0.11 0.21 0.62 0.46 0.48 0.53 0.27 0.51 0.30 0.55

 2014 0.49 0.21 0.20 0.28 0.70 0.45 0.73 0.40 0.35 0.60 0.21 0.48

 2012 1.14 0.39 0.60 0.75 1.32 1.26 1.26 1.23 0.93 1.44 0.55 0.88

Noncurrent assets plus 

OREO to assets (%) 2016 0.88 1.19 1.02 0.84 0.82 0.89 0.70 1.07 0.81 1.04 1.04 0.53

 2014 1.29 1.56 1.53 1.50 0.87 1.47 0.92 1.71 1.19 1.60 1.29 0.69

 2012 2.36 2.20 2.61 2.70 1.53 2.82 1.53 3.66 2.13 2.51 2.27 1.56

Equity capital ratio (%) 2016 11.22 13.15 11.46 11.80 12.18 10.50 12.03 12.39 10.18 10.08 11.22 12.05

 2014 11.20 12.35 11.19 11.97 12.68 10.10 12.02 12.11 9.92 10.30 11.15 12.72

 2012 11.39 12.13 11.10 11.88 12.82 10.34 12.38 12.31 9.19 11.04 11.03 13.70

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled.

** See Table V-A (page 11) for explanations.
2 0 1 7  •  Volume 1 1  • Number 4

10 FDIC QUARTERLY

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

Asset Concentration Groups**

September 30, 2017 All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Percent of Loans 30-89 Days Past Due

All loans secured by real estate 0.69 0.25 0.91 0.58 0.45 0.79 0.43 1.30 1.16 1.07

Construction and development 0.31 0.00 0.26 0.49 0.30 0.45 0.45 0.65 0.98 0.27

Nonfarm nonresidential 0.27 0.00 0.52 0.50 0.25 0.28 0.23 0.90 0.87 0.23

Multifamily residential real estate 0.09 0.00 0.03 0.19 0.10 0.12 0.11 2.22 0.95 0.06

Home equity loans 0.71 1.18 1.14 0.43 0.52 0.52 0.39 0.80 0.82 0.85

Other 1-4 family residential 1.18 0.27 1.27 1.05 0.85 0.91 0.45 1.77 1.41 1.62

Commercial and industrial loans 0.27 0.94 0.23 0.83 0.28 0.41 0.35 1.01 0.89 0.22

Loans to individuals 1.44 1.64 1.14 1.34 1.29 1.13 0.80 1.61 1.82 1.69

Credit card loans 1.40 1.65 1.16 1.04 1.03 1.29 0.79 1.02 2.49 1.25

Other loans to individuals 1.48 1.38 1.10 1.37 1.33 1.11 0.80 1.66 1.80 1.95

All other loans and leases (including farm) 0.25 0.45 0.42 0.51 0.16 0.32 0.04 0.43 0.46 0.15

Total loans and leases 0.67 1.61 0.69 0.62 0.45 0.77 0.62 1.25 1.15 0.82

Percent of Loans Noncurrent***

All real estate loans 1.63 0.58 2.28 1.03 0.94 2.64 0.56 1.58 1.13 2.69

Construction and development 0.59 0.00 0.37 0.74 0.61 0.58 0.87 2.94 0.69 0.51

Nonfarm nonresidential 0.63 0.00 0.57 1.01 0.63 0.91 0.81 1.42 1.29 0.54

Multifamily residential real estate 0.15 0.00 0.06 0.29 0.17 0.52 0.47 0.63 0.36 0.12

Home equity loans 2.41 0.00 4.09 0.43 1.25 1.32 1.96 0.64 0.49 3.51

Other 1-4 family residential 2.63 0.64 3.10 0.86 1.59 3.08 0.40 1.61 1.19 3.79

Commercial and industrial loans 1.00 0.81 0.99 1.53 1.08 0.52 0.47 1.46 0.92 0.88

Loans to individuals 0.94 1.53 0.88 0.53 0.77 0.42 0.53 0.63 1.39 0.69

Credit card loans 1.34 1.58 1.12 0.30 0.93 1.15 1.25 0.72 1.20 1.17

Other loans to individuals 0.54 0.60 0.40 0.55 0.75 0.35 0.36 0.62 1.39 0.42

All other loans and leases (including farm) 0.22 0.32 0.15 1.08 0.31 0.18 0.01 0.66 0.45 0.15

Total loans and leases 1.20 1.50 1.25 1.08 0.91 2.41 0.50 1.41 1.09 1.50

Percent of Loans Charged-Off (net, YTD)

All real estate loans 0.03 0.09 0.04 0.03 0.04 0.01 0.00 0.07 0.06 0.02

Construction and development -0.04 0.00 -0.01 -0.02 -0.03 0.02 -0.08 0.32 -0.03 -0.10

Nonfarm nonresidential 0.03 0.00 0.00 0.04 0.03 0.05 0.03 0.09 0.05 0.01

Multifamily residential real estate 0.00 0.00 0.00 -0.03 0.00 0.02 0.00 0.05 0.08 -0.02

Home equity loans 0.16 0.74 0.24 0.01 0.12 -0.04 0.04 0.01 0.05 0.21

Other 1-4 family residential 0.03 0.10 0.03 0.05 0.05 0.01 0.00 0.04 0.07 0.00

Commercial and industrial loans 0.35 2.78 0.26 0.37 0.38 0.19 0.45 0.32 0.31 0.30

Loans to individuals 2.23 3.95 2.71 0.48 1.03 1.90 0.97 0.53 0.57 1.69

Credit card loans 3.59 4.06 3.32 1.71 3.13 3.20 2.74 1.40 1.24 3.10

Other loans to individuals 0.89 1.96 1.53 0.37 0.73 0.88 0.55 0.46 0.54 0.90

All other loans and leases (including farm) 0.12 0.78 0.05 0.24 0.18 0.30 0.01 0.74 0.33 0.12

Total loans and leases 0.48 3.90 0.56 0.13 0.21 0.10 0.60 0.19 0.14 0.39

Loans Outstanding (in billions)

All real estate loans $4,728.3 $0.4 $569.2 $120.0 $2,517.4 $201.9 $56.5 $8.9 $38.6 $1,215.6

Construction and development 330.8 0.0 15.5 7.1 241.7 6.4 0.3 0.7 2.3 56.7

Nonfarm nonresidential 1,377.3 0.0 50.3 32.7 994.5 18.0 3.8 3.0 9.0 266.0

Multifamily residential real estate 400.1 0.0 75.2 3.9 261.1 4.8 0.7 0.2 1.1 53.1

Home equity loans 417.3 0.0 56.3 2.4 198.2 11.5 4.3 0.3 1.6 142.7

Other 1-4 family residential 2,040.3 0.3 324.2 29.2 777.4 160.3 47.2 4.2 21.3 676.2

Commercial and industrial loans 1,988.9 16.1 322.3 22.0 950.0 6.1 9.1 1.6 4.2 657.6

Loans to individuals 1,602.3 395.4 267.0 6.7 326.5 5.5 109.3 1.4 4.4 486.0

Credit card loans 795.4 375.3 178.9 0.6 40.8 0.5 21.0 0.1 0.1 178.1

Other loans to individuals 806.9 20.0 88.2 6.1 285.7 5.0 88.2 1.3 4.3 307.9

All other loans and leases (including farm) 1,236.9 1.0 364.3 45.7 319.4 10.6 12.4 0.7 3.5 479.3

Total loans and leases (plus unearned income) 9,556.4 412.8 1,522.8 194.4 4,113.3 224.2 187.2 12.6 50.8 2,838.5

Memo: Other Real Estate Owned (in millions)

All other real estate owned 9,041.3 0.2 534.2 337.3 5,897.4 264.7 28.2 69.1 222.4 1,687.9

Construction and development 2,762.4 0.0 21.2 79.2 2,274.3 57.3 4.9 33.4 69.3 222.9

Nonfarm nonresidential 2,487.7 0.0 76.0 115.8 1,863.1 26.4 4.2 21.0 67.2 314.1

Multifamily residential real estate 134.7 0.0 0.0 13.5 102.2 6.9 0.0 0.4 1.6 10.1

1-4 family residential 3,079.0 0.2 309.9 62.7 1,542.0 129.3 19.1 13.8 75.6 926.6

Farmland 146.5 0.0 0.0 66.2 65.1 1.4 0.0 0.4 8.6 4.7

GNMA properties 401.0 0.0 99.0 0.1 50.8 43.4 0.0 0.2 0.0 207.6

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled.

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

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

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

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

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

exceed 25 percent of total assets.

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

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

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

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

concentrations.

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

concentrations.

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

FDIC QUARTERLY 11

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

Asset Size Distribution Geographic Regions**

September 30, 2017 All Insured 

Institutions

Less Than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to 

$10 Billion

$10 Billion 

to $250 

Billion

Greater 

Than $250 

Billion

New 

York Atlanta Chicago

Kansas 

City Dallas

San 

Francisco

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate 0.69 1.11 0.55 0.32 0.54 1.06 0.50 0.88 0.68 1.03 0.61 0.26

Construction and development 0.31 0.91 0.42 0.33 0.26 0.25 0.32 0.37 0.22 0.36 0.30 0.21

Nonfarm nonresidential 0.27 0.81 0.37 0.23 0.23 0.27 0.33 0.21 0.26 0.34 0.32 0.12

Multifamily residential real estate 0.09 0.77 0.27 0.07 0.08 0.05 0.09 0.05 0.09 0.12 0.16 0.03

Home equity loans 0.71 0.73 0.49 0.40 0.54 0.94 0.50 0.89 0.79 0.79 0.52 0.33

Other 1-4 family residential 1.18 1.55 0.85 0.51 0.95 1.60 0.82 1.47 1.03 1.71 1.26 0.44

Commercial and industrial loans 0.27 1.27 0.58 0.44 0.25 0.21 0.18 0.25 0.23 0.28 0.46 0.35

Loans to individuals 1.44 1.81 1.35 1.40 1.37 1.52 1.21 1.94 1.06 1.38 0.99 1.51

Credit card loans 1.40 5.08 2.27 2.90 1.53 1.18 1.17 1.58 1.19 1.23 0.78 2.05

Other loans to individuals 1.48 1.75 1.29 1.15 1.17 1.83 1.27 2.30 1.01 1.59 1.09 1.08

All other loans and leases (including farm) 0.25 0.52 0.41 0.22 0.19 0.26 0.15 0.09 0.30 0.36 0.24 0.28

Total loans and leases 0.67 1.09 0.58 0.40 0.63 0.80 0.55 0.83 0.56 0.81 0.59 0.56

Percent of Loans Noncurrent*** 

All real estate loans 1.63 1.31 0.90 0.73 1.25 2.72 1.22 2.10 1.82 2.37 1.02 0.51

Construction and development 0.59 1.27 1.14 0.58 0.33 0.56 0.66 0.92 0.52 0.40 0.47 0.49

Nonfarm nonresidential 0.63 1.50 0.82 0.61 0.58 0.54 0.72 0.65 0.73 0.57 0.60 0.44

Multifamily residential real estate 0.15 0.80 0.44 0.18 0.09 0.11 0.15 0.16 0.16 0.17 0.22 0.08

Home equity loans 2.41 0.45 0.60 0.63 1.29 3.82 2.24 3.06 2.28 2.86 1.12 0.61

Other 1-4 family residential 2.63 1.32 0.98 1.06 2.18 3.82 1.92 3.19 2.70 3.88 1.99 0.60

Commercial and industrial loans 1.00 1.71 1.20 1.33 1.11 0.82 0.97 0.90 0.77 1.13 1.53 1.11

Loans to individuals 0.94 0.89 0.70 0.82 1.11 0.78 0.98 1.10 0.56 0.91 0.85 1.00

Credit card loans 1.34 2.91 1.53 2.84 1.48 1.12 1.19 1.40 1.11 1.19 1.25 1.93

Other loans to individuals 0.54 0.85 0.64 0.48 0.62 0.46 0.65 0.79 0.34 0.48 0.66 0.29

All other loans and leases (including farm) 0.22 1.13 0.82 0.41 0.26 0.14 0.16 0.13 0.15 0.32 0.35 0.39

Total loans and leases 1.20 1.30 0.93 0.81 1.08 1.46 1.02 1.37 1.19 1.51 1.05 0.73

Percent of Loans Charged-Off (net, YTD) 

All real estate loans 0.03 0.04 0.03 0.03 0.04 0.02 0.05 0.05 0.03 0.01 0.02 -0.01

Construction and development -0.04 0.00 0.02 -0.01 -0.05 -0.09 0.00 0.00 -0.04 -0.12 -0.01 -0.12

Nonfarm nonresidential 0.03 0.02 0.03 0.03 0.05 -0.01 0.05 0.05 0.02 0.00 0.02 0.00

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

Home equity loans 0.16 0.03 0.05 0.06 0.13 0.22 0.15 0.26 0.15 0.14 0.02 0.01

Other 1-4 family residential 0.03 0.07 0.05 0.04 0.04 0.00 0.07 0.01 0.02 0.01 0.03 0.01

Commercial and industrial loans 0.35 0.41 0.34 0.38 0.44 0.28 0.36 0.40 0.25 0.28 0.49 0.48

Loans to individuals 2.23 0.91 0.91 1.77 2.48 2.07 2.31 2.31 1.63 2.48 1.48 2.37

Credit card loans 3.59 17.33 5.97 6.04 3.83 3.18 3.16 3.86 3.38 3.36 2.70 4.59

Other loans to individuals 0.89 0.60 0.56 0.82 0.73 1.07 0.88 0.80 0.98 1.24 0.92 0.59

All other loans and leases (including farm) 0.12 0.27 0.27 0.23 0.12 0.10 0.11 0.14 0.12 0.09 0.24 0.10

Total loans and leases 0.48 0.17 0.12 0.20 0.68 0.46 0.55 0.58 0.28 0.49 0.27 0.64

Loans Outstanding (in billions) 

All real estate loans $4,728.3 $35.0 $611.5 $889.6 $1,521.4 $1,670.9 $961.5 $921.8 $987.1 $866.2 $440.1 $551.6

Construction and development 330.8 2.1 56.7 83.8 116.9 71.3 59.8 60.4 56.1 51.1 67.8 35.5

Nonfarm nonresidential 1,377.3 8.7 232.5 364.4 480.5 291.2 313.7 275.5 213.1 194.0 183.3 197.7

Multifamily residential real estate 400.1 1.0 33.5 94.5 151.6 119.6 143.5 43.2 106.3 33.6 19.4 54.1

Home equity loans 417.3 0.9 24.3 45.7 143.4 203.0 81.4 106.4 103.5 76.8 20.6 28.7

Other 1-4 family residential 2,040.4 15.8 214.2 278.7 612.7 919.0 358.6 422.0 484.9 419.7 131.5 223.7

Commercial and industrial loans 1,988.9 5.9 97.3 187.1 735.6 963.1 303.1 492.2 429.5 404.3 135.4 224.3

Loans to individuals 1,602.3 3.4 32.2 72.5 762.8 731.4 349.4 403.2 220.9 316.8 63.8 248.2

Credit card loans 795.4 0.1 2.0 10.4 431.3 351.7 216.0 200.6 61.3 189.5 20.0 107.9

Other loans to individuals 806.9 3.3 30.3 62.0 331.5 379.7 133.4 202.5 159.6 127.3 43.8 140.3

All other loans and leases (including farm) 1,236.9 7.1 50.4 64.1 356.8 758.5 190.0 265.5 293.0 343.6 53.6 91.2

Total loans and leases 

(plus unearned income) 9,556.4 51.4 791.4 1,213.2 3,376.5 4,123.9 1,804.0 2,082.7 1,930.5 1,930.9 692.9 1,115.4

Memo: Other Real Estate Owned 

(in millions) 

All other real estate owned 9,041.3 258.9 2,764.1 1,955.4 2,102.2 1,960.7 1,609.9 2,072.2 1,727.3 1,585.2 1,465.1 581.5

Construction and development 2,762.4 68.2 1,231.5 782.6 418.6 261.5 278.4 755.6 347.7 552.7 613.4 214.6

Nonfarm nonresidential 2,487.7 81.5 888.9 643.7 554.0 319.6 452.2 506.5 476.4 375.6 504.0 173.0

Multifamily residential real estate 134.7 8.5 58.8 31.1 12.7 23.6 32.8 31.2 15.2 30.3 16.6 8.5

1-4 family residential 3,079.0 80.0 500.4 453.5 984.5 1,060.5 776.0 714.1 737.6 413.4 282.1 155.8

Farmland 146.5 20.4 84.0 33.4 5.6 3.0 9.0 21.0 18.4 45.9 41.1 11.0

GNMA properties 401.0 0.2 0.5 11.1 126.7 262.5 61.5 43.7 132.0 137.2 8.0 18.6

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled.

** 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.
2 0 1 7  •  Volume 1 1  • Number 4

12 FDIC QUARTERLY

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

3rd 

Quarter 

2017

2nd 

Quarter 

2017

1st

Quarter 

2017

4th

Quarter 

2016

3rd 

Quarter 

2016

% 

Change 

16Q3-

17Q3

Asset Size Distribution

(dollar figures in millions;

notional amounts unless otherwise indicated)

Less 

Than 

$100 

Million

$100 

Million 

to $1 

Billion

$1 

Billion 

to $10 

Billion

$10 

Billion 

to $250 

Billion

Greater 

Than 

$250 

Billion

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives 1,394 1,422 1,417 1,427 1,441 -3.3 50 801 425 109 9

Total assets of institutions reporting derivatives $15,654,686 $15,451,566 $15,361,654 $15,183,959 $15,189,010 3.1 $3,813 $347,121 $1,303,530 $5,302,967 $8,697,255

Total deposits of institutions reporting derivatives 11,930,561 11,789,324 11,768,346 11,589,525 11,513,889 3.6 3,193 286,382 1,035,999 4,042,126 6,562,861

Total derivatives 190,583,150 187,860,438 180,503,690 166,795,928 179,902,250 5.9 250 21,485 126,685 51,904,204 138,530,525

Derivative Contracts by Underlying Risk Exposure 

Interest rate 141,252,145 139,826,426 132,697,581 124,479,973 132,992,944 6.2 243 21,392 121,822 45,419,920 95,688,769

Foreign exchange* 39,707,444 38,856,459 38,313,393 33,277,647 36,299,774 9.4 0 3 3,629 5,946,510 33,757,302

Equity 3,055,705 2,908,473 2,839,056 2,487,763 2,734,807 11.7 0 0 147 153,243 2,902,314

Commodity & other (excluding credit derivatives) 1,477,532 1,334,384 1,349,981 1,257,180 1,312,260 12.6 0 0 27 94,889 1,382,617

Credit 5,090,228 4,934,591 5,303,594 5,293,365 6,562,465 -22.4 0 1 1,060 289,642 4,799,525

Total 190,574,031 187,851,324 180,495,795 166,795,928 179,902,250 5.9 38 12,845 126,419 51,904,204 138,530,525

Derivative Contracts by Transaction Type 

Swaps 101,808,058 103,004,241 99,182,539 96,383,754 103,013,911 -1.2 19 6,400 83,027 26,111,636 75,606,976

Futures & forwards 40,118,668 39,841,404 39,858,005 34,192,708 36,956,809 8.6 9 3,344 22,249 8,460,056 31,633,008

Purchased options 20,398,392 19,127,368 16,947,382 14,799,701 15,466,920 31.9 0 270 7,046 8,283,623 12,107,454

Written options 20,908,417 18,608,635 17,051,401 14,586,169 15,460,733 35.2 9 2,830 12,914 8,567,451 12,325,213

Total 183,233,535 180,581,649 173,039,326 159,962,332 170,898,372 7.2 38 12,844 125,235 51,422,767 131,672,651

Fair Value of Derivative Contracts 

Interest rate contracts 52,120 68,960 65,746 62,629 77,294 -32.6 0 83 243 9,689 42,105

Foreign exchange contracts 13,938 -430 1,613 10,779 13,372 4.2 0 0 -16 3,265 10,688

Equity contracts -5,742 -4,898 -4,921 -2,181 1,643 N/M 0 0 0 -251 -5,491

Commodity & other (excluding credit derivatives) -1,390 -1,300 118 622 -2,185 N/M 0 0 0 547 -1,938

Credit derivatives as guarantor** 34,840 31,164 24,958 16,617 17,871 95 0 -1 -2 854 33,988

Credit derivatives as beneficiary** -37,666 -31,788 -24,932 -15,028 -17,575 N/M 0 0 -30 -950 -36,686

Derivative Contracts by Maturity*** 

Interest rate contracts < 1 year 72,145,476 65,971,632 61,926,348 55,052,886 58,874,863 22.5 49 5,654 20,971 21,749,129 50,369,673

 1-5 years 43,430,456 48,374,437 46,450,818 43,262,490 45,382,723 -4.3 27 1,974 32,064 8,122,318 35,274,073

 > 5 years 27,041,460 29,634,366 29,973,243 29,761,959 32,522,164 -16.9 17 6,202 49,595 6,932,240 20,053,406

Foreign exchange and gold contracts < 1 year 28,416,487 27,411,021 27,320,407 23,910,532 25,797,765 10.2 0 3 2,202 4,173,938 24,240,344

 1-5 years 4,987,149 4,813,394 4,772,294 4,453,265 4,096,173 21.8 0 0 838 847,115 4,139,195

 > 5 years 2,543,811 2,496,193 2,429,269 2,420,119 1,901,381 33.8 0 0 39 664,677 1,879,094

Equity contracts < 1 year 2,159,633 2,236,472 2,202,638 1,847,254 1,953,663 10.5 0 0 16 39,426 2,120,190

 1-5 years 780,834 720,365 762,751 680,105 821,802 -5 0 0 57 42,308 738,470

 > 5 years 119,191 126,774 84,970 122,956 129,226 -7.8 0 0 0 7,549 111,643

 Commodity & other contracts (including credit 

derivatives, excluding gold contracts) < 1 year 2,542,161 2,544,432 2,722,501 2,681,842 2,826,215 -10.1 0 5 29 74,412 2,467,715

 1-5 years 3,173,345 3,069,752 3,054,143 3,198,687 4,009,130 -20.8 0 5 199 167,603 3,005,537

 > 5 years 524,420 311,157 487,184 339,228 540,260 -2.9 0 20 268 35,943 488,188

Risk-Based Capital: Credit Equivalent Amount 

Total current exposure to tier 1 capital (%) 24.3 26.1 25.7 29.2 35.2 0.0 0.4 0.6 15.1 36.0

Total potential future exposure to tier 1 capital (%) 45.2 45.4 46.7 44.0 41.0 0.1 0.3 0.8 19.2 73.4

Total exposure (credit equivalent amount) 

to tier 1 capital (%) 69.4 71.5 72.3 73.2 76.2 0.1 0.7 1.4 34.3 109.5

Credit losses on derivatives  1.0 10.0 1.0 30.0 38.0 -97.4 0.0 0.0 0.0 -2.0 4.0

HELD FOR TRADING 

Number of institutions reporting derivatives 200 205 201 260 251 -20.3 2 37 91 62 8

Total assets of institutions reporting derivatives 12,403,336 12,228,056 12,124,176 12,093,915 12,138,739 2.2 170 17,157 315,943 3,658,306 8,411,760

Total deposits of institutions reporting derivatives 9,422,233 9,306,454 9,265,757 9,222,603 9,188,820 2.5 154 14,228 250,050 2,837,956 6,319,846

Derivative Contracts by Underlying Risk Exposure 

Interest rate 138,885,951 137,316,308 130,188,927 121,957,324 130,490,614 6.4 2 589 35,379 44,902,753 93,947,228

Foreign exchange 36,960,614 36,002,239 35,648,745 31,228,297 33,353,870 10.8 0 0 3,055 5,703,196 31,254,364

Equity 3,040,023 2,893,124 2,823,564 2,472,551 2,718,187 11.8 0 0 0 141,372 2,898,651

Commodity & other 1,450,053 1,306,894 1,321,931 1,255,198 1,310,469 10.7 0 0 16 68,505 1,381,533

Total 180,336,641 177,518,566 169,983,168 156,913,371 167,873,141 7.4 2 589 38,449 50,815,824 129,481,775

Trading Revenues: Cash & Derivative Instruments 

Interest rate**  2,917 4,521 3,866 -1,547 2,919 -0.1 0 0 30 638 2,250

Foreign exchange** 1,540 681 1,684 5,941 2,294 -32.9 0 0 3 -150 1,686

Equity** 1,183 1,122 922 680 733 61.4 0 0 6 17 1,160

Commodity & other (including credit derivatives)** 754 314 653 928 472 59.7 0 0 1 275 478

Total trading revenues** 6,394 6,637 7,126 6,003 6,418 -0.4 0 0 40 780 5,574

Share of Revenue 

Trading revenues to gross revenues (%)** 4.6 4.8 5.4 4.6 4.9 0.0 0.0 1.1 1.9 5.8

Trading revenues to net operating revenues (%)** 19.8 20.5 24.2 20.0 20.7 0.0 0.0 5.0 8.2 25.6

HELD FOR PURPOSES OTHER THAN TRADING 

Number of institutions reporting derivatives 797 820 830 1,298 1,320 -39.6 10 287 386 105 9

Total assets of institutions reporting derivatives 15,208,607 15,021,569 14,906,778 14,886,971 14,893,528 2.1 715 139,844 1,200,286 5,170,507 8,697,255

Total deposits of institutions reporting derivatives 11,569,670 11,438,123 11,394,184 11,348,675 11,271,425 2.6 604 115,798 952,756 3,937,651 6,562,861

Derivative Contracts by Underlying Risk Exposure 

Interest rate 2,357,172 2,501,109 2,500,845 2,522,649 2,502,329 -5.8 35 12,251 86,178 517,167 1,741,541

Foreign exchange 496,561 519,135 511,772 509,119 504,491 -1.6 0 3 450 51,520 444,588

Equity 15,682 15,349 15,492 15,211 16,620 -5.6 0 0 147 11,872 3,663

Commodity & other 27,479 27,490 28,049 1,982 1,791 1,434.30 0 0 11 26,384 1,084

Total notional amount 2,896,894 3,063,083 3,056,158 3,048,961 3,025,231 -4.2 35 12,254 86,786 606,942 2,190,875

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

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

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

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

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

total assets, but is not applicable to banks filing the FFIEC 051 form.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 13

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

Asset Size Distribution

(dollar figures in millions)

3rd 

Quarter 

2017

2nd 

Quarter

2017

1st 

Quarter

2017

4th 

Quarter

2016

3rd 

Quarter

2016

% 

Change 

16Q3-

17Q3

Less 

Than 

$100 

Million

$100 

Million 

to $1 

Billion

$1 

Billion 

to $10 

Billion

$10 

Billion 

to $250 

Billion

Greater 

Than 

$250 

Billion

Assets Securitized and Sold with Servicing Retained or with 

Recourse or Other Seller-Provided Credit Enhancements 

Number of institutions reporting securitization activities 65 68 67 75 74 -12.2 0 7 18 33 7

Outstanding Principal Balance by Asset Type 

1-4 family residential loans $605,512 $620,524 $634,480 $643,700 $668,378 -9.4 $0 $1,855 $10,676 $90,144 $502,837

Home equity loans 21 22 24 25 27 -22.2 0 0 0 21 0

Credit card receivables 16,114 17,306 16,406 12,879 13,491 19.4 0 0 0 16,078 36

Auto loans 10,494 11,566 12,158 11,543 11,024 -4.8 0 0 1,714 8,780 0

Other consumer loans 3,610 3,778 3,955 4,576 4,732 -23.7 0 0 0 2,080 1,530

Commercial and industrial loans 316 309 312 276 161 96.3 0 0 0 0 316

All other loans, leases, and other assets 55,105 54,375 56,771 64,170 64,843 -15.0 0 0 9,109 1,532 44,464

Total securitized and sold 691,171 707,880 724,106 737,169 762,656 -9.4 0 1,855 21,499 118,634 549,183

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 1,718 1,750 1,906 2,056 2,114 -18.7 0 3 20 1,218 477

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

Credit card receivables 1,405 1,508 1,443 1,162 1,209 16.2 0 0 0 1,405 0

Auto loans 161 183 125 428 436 -63.1 0 0 13 148 0

Other consumer loans 87 96 100 97 96 -9.4 0 0 0 0 87

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

All other loans, leases, and other assets 908 874 875 1,142 838 8.4 0 0 114 0 794

Total credit exposure 4,279 4,410 4,448 4,884 4,693 -8.8 0 3 146 2,771 1,358

Total unused liquidity commitments provided to institution’s own 

securitizations 246 172 142 175 140 75.7 0 0 0 11 235

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

1-4 family residential loans 4.3 3.4 3.0 4.1 3.7 0.0 1.7 2.7 3.8 4.4

Home equity loans 5.9 8.2 5.6 6.9 5.5 0.0 0.0 0.0 5.9 0

Credit card receivables 0.4 0.4 0.4 0.4 0.4 0.0 0.0 0.0 0.4 0

Auto loans 1.6 1.4 1.2 1.7 1.5 0.0 0.0 3.1 1.3 0

Other consumer loans 4.2 4.1 4.0 4.6 4.4 0.0 0.0 0.0 2.3 6.8

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

All other loans, leases, and other assets 0.7 1.3 0.9 0.7 0.4 0.0 0.0 0.3 0.1 0.8

Total loans, leases, and other assets 3.9 3.1 2.7 3.7 3.3 0.0 1.7 1.7 3.1 4.1

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

1-4 family residential loans 1.3 1.3 1.4 1.4 1.5 0.0 0.6 0.7 1.2 1.3

Home equity loans 47.1 47.4 47.8 47.1 47.4 0.0 0.0 0.0 47.1 0

Credit card receivables 0.3 0.3 0.3 0.3 0.3 0.0 0.0 0.0 0.3 0

Auto loans 0.3 0.3 0.3 0.3 0.3 0.0 0.0 0.5 0.3 0

Other consumer loans 4.2 4.0 4.1 4.2 3.8 0.0 0.0 0.0 1.1 8.6

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

All other loans, leases, and other assets 1.2 1.4 1.6 1.3 1.5 0.0 0.0 0.2 0.0 1.5

Total loans, leases, and other assets 1.3 1.3 1.4 1.4 1.4 0.0 0.6 0.5 1.0 1.3

Securitized Loans, Leases, and Other Assets Charged-off 

(net, YTD, annualized, %) 

1-4 family residential loans 0.2 0.1 0.1 0.3 0.2 0.0 0.0 0.0 0.0 0.2

Home equity loans 8.7 5.9 2.6 6.9 3.6 0.0 0.0 0.0 8.7 0

Credit card receivables 1.2 0.8 0.4 4.2 3.7 0.0 0.0 0.0 1.2 5.6

Auto loans 0.8 0.5 0.2 0.7 0.5 0.0 0.0 1.9 0.6 0

Other consumer loans 1.0 0.6 0.4 1.0 0.7 0.0 0.0 0.0 0.6 1.5

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

All other loans, leases, and other assets 1.3 0.7 0.5 0.4 0.3 0.0 0.0 0.0 0.0 1.6

Total loans, leases, and other assets 0.3 0.2 0.1 0.4 0.3 0.0 0.0 0.2 0.2 0.3

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

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

Credit card receivables 8,171 7,260 8,080 13,335 11,355 -28.0 0 0 0 8,171 0

Commercial and industrial loans 401 334 365 327 216 85.6 0 0 0 0 401

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

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

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

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

Assets Sold with Recourse and Not Securitized 

Number of institutions reporting asset sales 522 548 579 1,066 1,079 -51.6 17 254 191 52 8

Outstanding Principal Balance by Asset Type 

1-4 family residential loans 26,285 26,223 25,933 38,320 37,792 -30.4 196 6,392 9,764 5,341 4,592

Home equity, credit card receivables, auto, and other consumer loans 523 543 564 580 626 -16.5 0 1 28 19 475

Commercial and industrial loans 190 188 230 364 339 -44.0 0 13 48 94 35

All other loans, leases, and other assets 97,455 95,098 93,140 89,265 84,258 15.7 0 17 136 31,349 65,953

Total sold and not securitized 124,453 122,053 119,867 128,528 123,015 1.2 196 6,422 9,976 36,804 71,055

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 7,732 7,932 7,655 10,885 11,033 -29.9 10 888 3,172 2,150 1,511

Home equity, credit card receivables, auto, and other consumer loans 151 152 153 147 148 2.0 0 1 27 2 121

Commercial and industrial loans 116 133 175 308 183 -36.6 0 13 9 94 0

All other loans, leases, and other assets 27,057 26,299 25,918 25,036 23,286 16.2 0 17 36 9,098 17,906

Total credit exposure 35,056 34,516 33,902 36,375 34,651 1.2 10 919 3,244 11,345 19,538

Support for Securitization Facilities Sponsored by Other Institutions 

Number of institutions reporting securitization facilities sponsored by others 54 56 63 104 104 -48.1 1 17 18 12 6

Total credit exposure 34,350 35,012 35,130 35,264 40,190 -14.5 0 38 123 2,260 31,930

Total unused liquidity commitments 1,298 981 1,118 1,131 1,411 -8.0 0 11 0 447 840

Other

Assets serviced for others** 5,925,909 5,946,416 5,944,428 5,981,964 5,962,395 -0.6 4,652 167,574 295,713 1,306,648 4,151,321

Asset-backed commercial paper conduits 

Credit exposure to conduits sponsored by institutions and others 16,618 16,698 17,521 21,720 23,084 -28.0 0 0 0 0 16,618

Unused liquidity commitments to conduits sponsored by institutions 

 and others 27,458 28,342 25,784 21,832 24,417 12.5 0 0 5 1,734 25,718

Net servicing income (for the quarter) 2,305 2,166 2,829 4,997 2,594 -11.1 8 288 172 951 884

Net securitization income (for the quarter) 395 472 363 228 287 37.6 0 5 25 297 68

Total credit exposure to Tier 1 capital (%)*** 4.5 4.6 4.7 4.9 5.1 0.1 0.8 1.9 2.9 7.1

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

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

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

QUARTERLY BANKING PROFILE

FDIC QUARTERLY 15

COMMUNITY BANK PERFORMANCE

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

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

in the current quarter, adjusted for mergers. In contrast, prior-quarter performance ratios are based on community banks 

designated during the previous quarter.

Net Income Increases to $6 Billion on 9.4 Percent Year-Over-Year Growth

Net Interest Income Growth Drives Gains in Net Operating Revenue

Net Interest Margin Widens to 3.65 Percent

Total Loans and Leases Grow 7.3 Percent During the Year

Noncurrent Rates Improve Across Major Loan Categories

Net Income Growth 

Continued From the 

Previous Quarter for Most 

Community Banks

Of the 5,294 community banks reporting third quarter financial results, 67 percent saw an 

annual increase in net income.1 Quarterly net income rose 6.7 percent to $6 billion, reflecting 

an annual increase of 9.4 percent. Year-over-year profitability grew on gains in net interest 

income, driven by growth in higher-yielding loans. Pretax return on assets (ROA) increased to 

1.42 percent during the quarter, reflecting a quarterly increase of 6 basis points and an annual 

increase of 4 basis points. The ROA at community banks remained 21 basis points below that 

of the industry, consistent with the spread during the same period last year. Compared with 

the previous quarter, the number of banks reporting a net loss declined by 11 to 216. Two new 

community banks received charters during the quarter, and no community banks failed.

Growth in Net Interest 

Income Raises Net 

Operating Revenue

Higher interest income on non 1-to-4 family real estate loans pushed net interest income 

up 9.7 percent during the year to $18.8 billion.2 Interest income on non 1-to-4 family real 

estate loans increased 4.1 percent during the quarter and 12.9 percent during the year to 

$8.8 billion. The average yield on assets continued to outpace funding costs, leading to a 

4-basis-point expansion in the average net interest margin (NIM) since the prior quarter and 

a 7-basis-point expansion since the previous year. At 3.65 percent, the community bank NIM 

is 35 basis points wider than the industry NIM. However, this spread has narrowed 19 basis 

points since third quarter 2015.

Contributors to the Year-Over-Year Change in Income 

FDIC-Insured Community Banks 

Source: FDIC.

$ Billions

Net

Income NetInterest

Income

Loan Loss

Provisions NoninterestIncome NoninterestExpense RealizedGains on

Securities

Income

Taxes

Positive Factor Negative Factor

-0.5

0.0

0.5

1.0

1.5

2.0

$0.51 $1.66 $0.04 -$0.17 $0.63 -$0.08 $0.23

+9% +10% +6% -3% +4% -44% +14%

Chart 1

Source: FDIC.

Net Interest Margin 

Percent

4.0 

Community Banks

All Insured Institutions 

3.0

3.5

3.65

3.30

2009 2010 2011 2012 2013 2014 2015 2016 2017

Chart 2

1 Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time 

data were compiled. 

2 Non 1-to-4 family real estate loans include construction and development, farmland, multifamily, and nonfarm nonresidential 

loans.
2 0 1 7  •  Volume 1 1  • Number 4

16 FDIC QUARTERLY

Change in Loan Balances and Unused Commitments 

FDIC-Insured Community Banks 

Source: FDIC.

$ Billions

Change 3Q 2017 vs. 3Q 2016

Change 3Q 2017 vs. 2Q 2017 

Loan Balances

Unused

Commitments

Nonfarm

Nonresidential

RE

C&I

Loans

1-to-4 Family

Residential

RE

C&D

Loans

Agricultural

Production

Loans

CRE &

C&D

C&I

Loans

43.4

13.0

10.6

15.3

0.7

9.4 6.9 9.0

1.5 4.5 3.3 1.4 2.6 3.1

Chart 3

Noncurrent Loan Rates for FDIC-Insured Community Banks

Source: FDIC.

Percent of Loan Portfolio Noncurrent

0

2

4

6

8

10

12

14

C&D Loans Nonfarm Nonresidential RE

1-to-4 Family RE

C&I Loans Home Equity 

Credit Cards

2009 2010 2011 2012 2013 2014 2015 2016 2017

Chart 4

Noninterest Income 

Declines

More than half of community banks (50.9 percent) reported a decrease in noninterest 

income compared with the same quarter last year. A reduction in net gains on loan sales 

during the year caused this decline, lowering noninterest income by $174.2 million, or 

3.4 percent. Net gains on loan sales increased $45.4 million (4.3 percent) during the quarter 

but fell $323.7 million (22.9 percent) from a year earlier.

Noninterest Expense Grows 

During the Year

Most community banks (63.2 percent) reported higher noninterest expense compared to 

the same period last year. Higher expenses for salary and employee benefits contributed 

to this increase and lifted noninterest expense 4.3 percent to $15.2 billion during the year. 

Salary and employee benefits increased $190.1 million (2.24 percent) during the quarter and 

$392 million (4.7 percent) during the year to $8.7 billion. Annual growth in the volume of 

assets per employee, from $5 million to $5.3 million, accompanied this increase. The number 

of full-time employees contracted 0.07 percent to 421,808 during the quarter but increased 

1.97 percent during the year.

Loans and Leases Grow 

7.3 Percent

Community bank loan balances increased $26.3 billion (1.7 percent) to $1.6 trillion during 

the quarter, reflecting an annual increase of $106.7 billion (7.3 percent). Quarterly and yearly 

increases slowed moderately compared with the quarterly growth rate of 2.7 percent and 

yearly growth rate of 7.8 percent achieved as of the second quarter. Both quarterly and annual 

loan growth rates continued to exceed those of the industry. Growth in nonfarm nonresidential loans of $9 billion led the increase in loan volume among major loan categories during 

the quarter, followed by 1-to-4 family residential mortgage loan growth of $5.2 billion, and 

construction and development (C&D) loan growth of $3.3 billion. Growth in nonfarm 

nonresidential loans of $43.4 billion (10.5 percent), 1-to-4 family residential mortgage loans 

of $17 billion (3.9 percent), and commercial and industrial loans of $13 billion (6.7 percent) 

led the increase in annual loan growth. Unfunded loan commitments grew $23.3 billion or 

8.6 percent during the year, led by a $9.9 billion or 12.7 percent increase in commitments to 

fund C&D loans. Community banks continued to hold a higher volume of loans and leases 

as a percentage of total assets (69.3 percent) when compared with the industry (54.7 percent).
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 17

Noncurrent Rates Improve 

Across Major Loan 

Categories

Noncurrent loans declined $499.9 million (3.5 percent) to $13.8 billion during the year, 

helping to reduce the noncurrent rate by 15 basis points to 0.88 percent—the lowest noncurrent rate since second quarter 2007. The noncurrent rate for loans secured by C&D property declined 29 basis points to 0.89 percent, the largest annual decline in noncurrent rates 

among the major loan categories and the lowest noncurrent rate for C&D loans since 2006. 

Farm loans experienced a 17-basis-point increase in the noncurrent rate to 0.99 percent over 

the year. Despite a 5-basis-point reduction during the year to 1.26 percent, the noncurrent 

rate for commercial and industrial loans remained the highest among major loan categories 

for the fourth consecutive quarter.

Net Charge-Offs Decline 

During the Quarter 

and Year

Net charge-offs fell $234.5 million (34 percent) from the previous quarter and $132 million 

(22.5 percent) from the previous year. These reductions helped lower the net charge-off 

rate for total loans and leases by 7 basis points during the quarter and 4 basis points during 

the year to 0.12 percent. The net charge-off rate for commercial and industrial (C&I) loans 

showed the most improvement among major loan categories during the year, dropping 

13 basis points to 0.33 percent. The net charge-off rate for C&I loans has been the highest 

among major loan categories since first quarter 2014. The net charge-off rate for nonfarm 

nonresidential loans declined 2 basis points during the year to 0.04 percent, while the net 

charge-off rate for C&D loans rose 5 basis points to 0.03 percent. The coverage ratio (reserves 

to noncurrent loans) continued a steady quarterly increase, from 126.8 percent in the second 

quarter to 132.3 percent in the third quarter.

Author:

Erica Jill Tholmer

Senior Financial Analyst

Division of Insurance and Research

(202) 898-3935
2 0 1 7  •  Volume 1 1  • Number 4

18 FDIC QUARTERLY

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

2017* 2016* 2016 2015 2014 2013 2012

Return on assets (%) 1.04 1.02 0.99 0.99 0.93 0.90 0.83

Return on equity (%) 9.34 9.09 8.81 8.85 8.45 8.27 7.68

Core capital (leverage) ratio (%) 10.83 10.74 10.69 10.67 10.57 10.43 10.18

Noncurrent assets plus other real estate owned to assets (%) 0.81 0.97 0.94 1.07 1.34 1.73 2.27

Net charge-offs to loans (%) 0.14 0.13 0.15 0.15 0.21 0.32 0.58

Asset growth rate (%) 2.71 3.24 2.97 2.71 2.21 0.39 2.25

Net interest margin (%) 3.60 3.57 3.57 3.57 3.61 3.59 3.67

Net operating income growth (%) 6.68 5.37 2.48 9.55 4.81 14.64 56.17

Number of institutions reporting 5,294 5,522 5,461 5,735 6,037 6,307 6,542

Percentage of unprofitable institutions (%) 4.06 4.17 4.61 5.00 6.44 8.40 11.14

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

TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks*

(dollar figures in millions)  3rd Quarter

2017

2nd Quarter

2017

3rd Quarter

2016

%Change 

16Q3-17Q3

Number of institutions reporting 5,294 5,338 5,522 -4.1

Total employees (full-time equivalent) 421,808 425,207 431,151 -2.2

CONDITION DATA

Total assets $2,222,172 $2,206,031 $2,163,575 2.7

Loans secured by real estate 1,199,578 1,185,782 1,143,175 4.9

 1-4 Family residential mortgages 397,987 396,628 389,635 2.1

 Nonfarm nonresidential 458,044 453,568 434,601 5.4

 Construction and development 104,869 102,481 98,993 5.9

 Home equity lines 50,077 49,595 50,538 -0.9

Commercial & industrial loans 206,313 206,082 200,388 3.0

Loans to individuals 61,526 60,780 60,314 2.0

 Credit cards 2,018 1,988 2,141 -5.7

Farm loans 52,687 51,397 52,468 0.4

Other loans & leases 39,500 40,282 40,554 -2.6

Less: Unearned income 687 696 642 7.1

Total loans & leases 1,558,917 1,543,627 1,496,258 4.2

Less: Reserve for losses 18,263 18,327 18,443 -1.0

Net loans and leases 1,540,653 1,525,300 1,477,815 4.3

Securities 419,558 423,934 419,994 -0.1

Other real estate owned 4,180 4,448 5,466 -23.5

Goodwill and other intangibles 14,252 14,430 14,287 -0.2

All other assets 243,529 237,918 246,013 -1.0

Total liabilities and capital 2,222,172 2,206,031 2,163,575 2.7

Deposits 1,816,024 1,802,193 1,771,676 2.5

 Domestic office deposits 1,815,353 1,801,427 1,771,266 2.5

 Foreign office deposits 671 766 411 63.4

 Brokered deposits 90,032 86,748 78,412 14.8

Estimated insured deposits 1,341,298 1,338,931 1,323,726 1.3

Other borrowed funds 137,673 139,051 128,667 7.0

Subordinated debt 1,007 759 802 25.5

All other liabilities 17,205 15,851 17,662 -2.6

Total equity capital (includes minority interests) 250,264 248,177 244,768 2.2

 Bank equity capital 250,148 248,050 244,656 2.2

Loans and leases 30-89 days past due 7,624 7,304 7,802 -2.3

Noncurrent loans and leases 13,802 14,459 15,461 -10.7

Restructured loans and leases 7,335 7,456 8,667 -15.4

Mortgage-backed securities 179,461 181,021 179,987 -0.3

Earning assets 2,072,394 2,056,179 2,012,486 3.0

FHLB Advances 111,799 112,725 100,683 11.0

Unused loan commitments 292,974 290,472 281,245 4.2

Trust assets 282,638 259,882 253,776 11.4

Assets securitized and sold 20,512 21,279 14,435 42.1

Notional amount of derivatives 70,774 69,797 74,280 -4.7

INCOME DATA

First Three 

Quarters 2017

First Three 

Quarters 2016 %Change

3rd Quarter 

2017

3rd Quarter 

2016

%Change 

16Q3-17Q3

Total interest income $62,290 $59,175 5.3 $21,573 $20,188 6.9

Total interest expense 7,708 6,805 13.3 2,791 2,337 19.4

Net interest income 54,582 52,370 4.2 18,782 17,851 5.2

Provision for loan and lease losses 2,301 2,100 9.6 759 744 2.0

Total noninterest income 14,384 14,941 -3.7 4,929 5,321 -7.3

Total noninterest expense 44,710 44,712 0.0 15,198 15,239 -0.3

Securities gains (losses) 333 600 -44.5 105 195 -46.3

Applicable income taxes 5,327 4,960 7.4 1,891 1,730 9.3

Extraordinary gains, net** 4 0 N/M 5 -2 N/M

Total net income (includes minority interests) 16,966 16,140 5.1 5,973 5,652 5.7

 Bank net income 16,947 16,123 5.1 5,967 5,645 5.7

Net charge-offs 1,540 1,418 8.6 455 608 -25.1

Cash dividends 7,251 7,217 0.5 2,234 2,187 2.1

Retained earnings 9,697 8,906 8.9 3,733 3,457 8.0

Net operating income 16,711 15,665 6.7 5,889 5,497 7.1

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled. N/M - Not Meaningful

** See Notes to Users for explanation.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 19

TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Community Banks*

Prior Periods Adjusted for Mergers

(dollar figures in millions)  3rd Quarter 

2017

2nd Quarter 

2017

3rd Quarter

2016

%Change 

16Q3-17Q3

Number of institutions reporting 5,294 5,292 5,291 0.1

Total employees (full-time equivalent) 421,808 422,101 413,664 2.0

CONDITION DATA

Total assets $2,222,172 $2,193,726 $2,104,167 5.6

Loans secured by real estate 1,199,578 1,177,666 1,110,794 8.0

 1-4 Family residential mortgages 397,987 393,464 382,693 4.0

 Nonfarm nonresidential 458,044 449,082 414,679 10.5

 Construction and development 104,869 101,598 94,282 11.2

 Home equity lines 50,077 49,411 48,416 3.4

Commercial & industrial loans 206,313 204,858 193,269 6.7

Loans to individuals 61,526 60,282 58,272 5.6

 Credit cards 2,018 1,985 2,052 -1.6

Farm loans 52,687 51,276 51,978 1.4

Other loans & leases 39,500 39,240 38,563 2.4

Less: Unearned income 687 689 622 10.5

Total loans & leases 1,558,917 1,532,633 1,452,255 7.3

Less: Reserve for losses 18,263 17,998 17,651 3.5

Net loans and leases 1,540,653 1,514,635 1,434,604 7.4

Securities 419,558 423,985 413,554 1.5

Other real estate owned 4,180 4,360 5,242 -20.3

Goodwill and other intangibles 14,252 14,059 13,284 7.3

All other assets 243,529 236,687 237,484 2.5

Total liabilities and capital 2,222,172 2,193,726 2,104,167 5.6

Deposits 1,816,024 1,792,868 1,720,314 5.6

 Domestic office deposits 1,815,353 1,792,102 1,719,903 5.5

 Foreign office deposits 671 766 411 63.4

 Brokered deposits 90,032 86,926 76,648 17.5

Estimated insured deposits 1,341,298 1,333,019 1,289,214 4.0

Other borrowed funds 137,673 138,657 128,310 7.3

Subordinated debt 1,007 759 793 27.0

All other liabilities 17,205 15,794 17,190 0.1

Total equity capital (includes minority interests) 250,264 245,648 237,559 5.3

 Bank equity capital 250,148 245,528 237,465 5.3

Loans and leases 30-89 days past due 7,624 7,228 7,670 -0.6

Noncurrent loans and leases 13,802 13,813 14,302 -3.5

Restructured loans and leases 7,335 7,429 8,494 -13.6

Mortgage-backed securities 179,461 181,156 177,625 1.0

Earning assets 2,072,394 2,045,015 1,958,305 5.8

FHLB Advances 111,799 112,800 101,037 10.7

Unused loan commitments 292,974 287,627 269,680 8.6

Trust assets 282,638 272,411 255,960 10.4

Assets securitized and sold 20,512 20,046 13,257 54.7

Notional amount of derivatives 70,774 68,309 68,654 3.1

INCOME DATA

First Three 

Quarters 2017

First Three 

Quarters 2016 %Change

3rd Quarter 

2017

3rd Quarter 

2016

%Change 

16Q3-17Q3

Total interest income $62,290 $56,850 9.6 $21,573 $19,389 11.3

Total interest expense 7,708 6,600 16.8 2,791 2,266 23.2

Net interest income 54,582 50,250 8.6 18,782 17,123 9.7

Provision for loan and lease losses 2,301 1,995 15.3 759 719 5.5

Total noninterest income 14,384 14,311 0.5 4,929 5,104 -3.4

Total noninterest expense 44,710 42,801 4.5 15,198 14,566 4.3

Securities gains (losses) 333 575 -42.0 105 186 -43.7

Applicable income taxes 5,327 4,787 11.3 1,891 1,665 13.6

Extraordinary gains, net** 4 0 N/M 5 -2 N/M

Total net income (includes minority interests) 16,966 15,553 9.1 5,973 5,461 9.4

 Bank net income 16,947 15,536 9.1 5,967 5,454 9.4

Net charge-offs 1,540 1,359 13.4 455 587 -22.5

Cash dividends 7,251 6,873 5.5 2,234 2,050 9.0

Retained earnings 9,697 8,663 11.9 3,733 3,404 9.7

Net operating income 16,711 15,096 10.7 5,889 5,313 10.8

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled. N/M - Not Meaningful

** See Notes to Users for explanation.
2 0 1 7  •  Volume 1 1  • Number 4

20 FDIC QUARTERLY

TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks*

Third Quarter 2017

(dollar figures in millions) All Community Banks

Geographic Regions**

New York Atlanta Chicago Kansas City Dallas San Francisco

Number of institutions reporting 5,294 612 624 1,152 1,396 1,170 340

Total employees (full-time equivalent) 421,808 85,666 51,313 86,893 70,779 93,178 33,979

CONDITION DATA

Total assets $2,222,172 $612,024 $245,231 $393,039 $344,273 $428,010 $199,596

Loans secured by real estate 1,199,578 378,074 135,601 204,290 166,248 208,291 107,073

 1-4 Family residential mortgages 397,987 138,995 42,560 71,757 51,393 66,604 26,677

 Nonfarm nonresidential 458,044 132,355 59,091 74,238 55,538 85,425 51,396

 Construction and development 104,869 22,487 15,354 14,368 14,268 29,401 8,991

 Home equity lines 50,077 16,710 7,592 10,949 5,139 4,823 4,863

Commercial & industrial loans 206,313 52,309 20,284 38,628 34,498 41,834 18,761

Loans to individuals 61,526 14,082 6,938 12,260 10,419 13,384 4,443

 Credit cards 2,018 409 154 395 565 228 266

Farm loans 52,687 588 1,473 8,377 28,741 10,475 3,034

Other loans & leases 39,500 12,354 3,305 6,849 5,858 7,849 3,285

Less: Unearned income 687 168 105 55 87 132 140

Total loans & leases 1,558,917 457,239 167,496 270,348 245,677 281,701 136,455

Less: Reserve for losses 18,263 4,431 1,972 3,274 3,300 3,529 1,757

Net loans and leases 1,540,653 452,808 165,524 267,075 242,377 278,172 134,698

Securities 419,558 99,801 45,402 80,240 65,144 92,264 36,707

Other real estate owned 4,180 685 996 756 654 863 227

Goodwill and other intangibles 14,252 4,758 1,345 2,532 1,885 2,667 1,065

All other assets 243,529 53,972 31,965 42,436 34,213 54,045 26,899

Total liabilities and capital 2,222,172 612,024 245,231 393,039 344,273 428,010 199,596

Deposits 1,816,024 481,959 203,540 323,866 282,010 358,035 166,615

 Domestic office deposits 1,815,353 481,426 203,447 323,848 282,010 358,035 166,587

 Foreign office deposits 671 533 93 17 0 0 28

 Brokered deposits 90,032 29,082 8,103 15,910 14,767 13,010 9,161

 Estimated insured deposits 1,341,298 342,965 151,628 256,142 221,752 257,900 110,911

Other borrowed funds 137,673 54,363 12,459 21,750 21,359 19,248 8,494

Subordinated debt 1,007 657 254 46 22 13 15

All other liabilities 17,205 6,010 1,745 2,857 2,039 2,796 1,759

Total equity capital (includes minority interests) 250,264 69,035 27,234 44,521 38,843 47,918 22,713

 Bank equity capital 250,148 68,974 27,219 44,504 38,842 47,896 22,713

Loans and leases 30-89 days past due 7,624 1,970 951 1,383 1,098 1,864 357

Noncurrent loans and leases 13,802 4,401 1,542 2,515 1,956 2,655 732

Restructured loans and leases 7,335 2,278 912 1,667 993 1,004 482

Mortgage-backed securities 179,461 56,852 19,019 30,472 21,117 34,305 17,696

Earning assets 2,072,394 574,015 226,575 365,940 321,395 397,128 187,341

FHLB Advances 111,799 47,234 10,566 16,769 15,903 15,205 6,122

Unused loan commitments 292,974 76,949 30,169 54,080 48,768 52,814 30,194

Trust assets 282,638 65,920 9,092 71,226 84,454 44,336 7,611

Assets securitized and sold 20,512 5,286 77 8,006 2,283 761 4,099

Notional amount of derivatives 70,774 27,423 7,247 14,843 8,169 9,834 3,257

INCOME DATA

Total interest income $21,573 $5,657 $2,410 $3,739 $3,431 $4,325 $2,012

Total interest expense 2,791 923 286 468 448 476 190

Net interest income 18,782 4,734 2,124 3,271 2,983 3,849 1,821

Provision for loan and lease losses 759 277 81 91 122 161 27

Total noninterest income 4,929 984 557 1,191 762 968 467

Total noninterest expense 15,198 3,698 1,830 2,881 2,347 3,069 1,372

Securities gains (losses) 105 37 9 13 15 20 10

Applicable income taxes 1,891 556 221 355 220 274 266

Extraordinary gains, net*** 5 6 0 0 0 0 -2

Total net income (includes minority interests) 5,973 1,231 558 1,148 1,070 1,334 632

 Bank net income 5,967 1,229 556 1,147 1,070 1,332 632

Net charge-offs 455 113 58 79 65 131 10

Cash dividends 2,234 301 201 589 461 492 190

Retained earnings 3,733 929 355 558 609 839 442

Net operating income 5,889 1,199 552 1,137 1,059 1,317 625

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled. 

** See Table V-A for explanations.

*** See Notes to Users for explanation.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 21

Table IV-B. Third Quarter 2017, FDIC-Insured Community Banks*

Performance ratios (annualized, %)

All Community Banks Third Quarter 2017, Geographic Regions**

 3rd Quarter 

2017

2nd Quarter 

2017 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 4.19 4.12 3.97 4.29 4.11 4.29 4.39 4.34

Cost of funding earning assets 0.54 0.50 0.65 0.51 0.51 0.56 0.48 0.41

Net interest margin 3.65 3.61 3.33 3.78 3.60 3.73 3.91 3.93

Noninterest income to assets 0.89 0.88 0.65 0.92 1.22 0.89 0.91 0.95

Noninterest expense to assets 2.76 2.75 2.44 3.01 2.95 2.74 2.89 2.78

Loan and lease loss provision to assets 0.14 0.16 0.18 0.13 0.09 0.14 0.15 0.06

Net operating income to assets 1.07 1.03 0.79 0.91 1.16 1.24 1.24 1.27

Pretax return on assets 1.42 1.36 1.18 1.28 1.54 1.51 1.51 1.82

Return on assets 1.08 1.04 0.81 0.91 1.17 1.25 1.25 1.28

Return on equity 9.64 9.29 7.21 8.26 10.39 11.11 11.24 11.26

Net charge-offs to loans and leases 0.12 0.19 0.10 0.14 0.12 0.11 0.19 0.03

Loan and lease loss provision to net charge-offs 166.67 126.04 245.16 139.65 115.03 189.66 122.87 266.59

Efficiency ratio 63.78 64.29 64.38 67.85 64.28 62.30 63.43 59.73

Net interest income to operating revenue 79.21 79.18 82.79 79.21 73.31 79.65 79.90 79.61

% of unprofitable institutions 4.08 4.38 6.86 6.25 3.91 2.79 2.91 5.00

% of institutions with earnings gains 66.60 62.29 73.37 69.87 65.36 61.39 66.58 74.12

Table V-B. First Three Quarters 2017, FDIC-Insured Community Banks*

Performance ratios (%)

All Community Banks First Three Quarters 2017, Geographic Regions**

First Three 

Quarters 2017

First Three 

Quarters 2016 New York Atlanta Chicago Kansas City Dallas San Francisco

Yield on earning assets 4.10 4.03 3.90 4.20 4.02 4.18 4.30 4.23

Cost of funding earning assets 0.51 0.46 0.61 0.48 0.48 0.52 0.45 0.38

Net interest margin 3.60 3.57 3.29 3.72 3.54 3.66 3.85 3.85

Noninterest income to assets 0.88 0.95 0.63 0.92 1.21 0.87 0.92 0.92

Noninterest expense to assets 2.75 2.83 2.42 3.00 2.94 2.73 2.89 2.76

Loan and lease loss provision to assets 0.14 0.13 0.18 0.11 0.10 0.15 0.17 0.08

Net operating income to assets 1.03 0.99 0.77 0.90 1.12 1.17 1.18 1.18

Pretax return on assets 1.37 1.34 1.15 1.25 1.48 1.43 1.44 1.71

Return on assets 1.04 1.02 0.79 0.91 1.13 1.18 1.20 1.20

Return on equity 9.34 9.09 7.08 8.25 10.10 10.64 10.84 10.64

Net charge-offs to loans and leases 0.14 0.13 0.17 0.11 0.10 0.12 0.20 0.05

Loan and lease loss provision to net charge-offs 149.41 148.11 145.61 153.47 144.74 172.31 133.97 226.97

Efficiency ratio 64.52 66.08 64.93 68.62 64.89 63.22 64.20 60.78

Net interest income to operating revenue 79.14 77.80 83.14 78.94 73.09 79.66 79.52 79.67

% of unprofitable institutions 4.06 4.17 5.39 6.09 4.25 2.58 3.59 5.00

% of institutions with earnings gains 64.87 63.22 72.39 68.59 64.84 57.74 63.93 77.06

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled. 

** See Table V-A for explanations.
2 0 1 7  •  Volume 1 1  • Number 4

22 FDIC QUARTERLY

Table VI-B. Loan Performance, FDIC-Insured Community Banks*

September 30, 2017

Geographic Regions**

All Community Banks New York Atlanta Chicago Kansas City Dallas San Francisco

Percent of Loans 30-89 Days Past Due

All loans secured by real estate 0.45 0.39 0.53 0.53 0.40 0.60 0.19

Construction and development 0.36 0.25 0.39 0.40 0.40 0.42 0.31

Nonfarm nonresidential 0.29 0.26 0.33 0.36 0.27 0.36 0.15

Multifamily residential real estate 0.13 0.09 0.17 0.25 0.20 0.28 0.01

Home equity loans 0.43 0.49 0.47 0.41 0.29 0.56 0.27

Other 1-4 family residential 0.74 0.65 0.91 0.83 0.63 1.01 0.29

Commercial and industrial loans 0.45 0.29 0.55 0.35 0.53 0.60 0.51

Loans to individuals 1.57 2.16 1.56 0.92 1.05 2.16 0.94

Credit card loans 2.36 2.94 1.33 1.40 3.91 1.29 1.13

Other loans to individuals 1.54 2.14 1.56 0.91 0.88 2.17 0.93

All other loans and leases (including farm) 0.37 0.27 0.18 0.39 0.40 0.45 0.30

Total loans and leases 0.49 0.43 0.57 0.51 0.45 0.66 0.26

Percent of Loans Noncurrent***

All loans secured by real estate 0.85 0.89 0.95 0.98 0.75 0.83 0.49

Construction and development 0.89 0.85 1.33 0.94 0.94 0.69 0.74

Nonfarm nonresidential 0.75 0.81 0.76 0.93 0.78 0.72 0.34

Multifamily residential real estate 0.22 0.13 0.55 0.47 0.18 0.27 0.11

Home equity loans 0.58 0.71 0.53 0.53 0.30 0.61 0.55

Other 1-4 family residential 1.09 1.30 1.15 1.14 0.60 1.07 0.79

Commercial and industrial loans 1.26 1.76 0.89 0.95 1.04 1.49 0.80

Loans to individuals 0.70 0.58 0.78 0.37 0.45 1.40 0.31

Credit card loans 1.17 1.28 0.67 1.05 1.75 0.53 0.75

Other loans to individuals 0.68 0.56 0.78 0.35 0.38 1.42 0.29

All other loans and leases (including farm) 0.68 0.22 0.55 0.70 0.89 0.64 0.66

Total loans and leases 0.88 0.96 0.92 0.93 0.80 0.94 0.54

Percent of Loans Charged-Off (net, YTD)

All loans secured by real estate 0.04 0.05 0.03 0.04 0.03 0.04 -0.02

Construction and development 0.00 0.05 0.01 -0.01 -0.07 0.02 -0.05

Nonfarm nonresidential 0.04 0.06 0.04 0.05 0.06 0.04 -0.03

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

Home equity loans 0.04 0.06 0.06 0.04 0.03 0.03 -0.03

Other 1-4 family residential 0.05 0.06 0.03 0.06 0.03 0.05 0.00

Commercial and industrial loans 0.45 0.82 0.29 0.20 0.22 0.60 0.16

Loans to individuals 0.92 0.89 0.90 0.59 1.17 1.06 0.98

Credit card loans 6.47 4.17 1.67 3.90 15.55 1.71 2.30

Other loans to individuals 0.73 0.79 0.88 0.47 0.34 1.05 0.89

All other loans and leases (including farm) 0.21 0.14 0.24 0.18 0.14 0.43 0.22

Total loans and leases 0.14 0.17 0.11 0.10 0.12 0.20 0.05

Loans Outstanding (in billions)

All loans secured by real estate $1,199.6 $378.1 $135.6 $204.3 $166.2 $208.3 $107.1

Construction and development 104.9 22.5 15.4 14.4 14.3 29.4 9.0

Nonfarm nonresidential 458.0 132.4 59.1 74.2 55.5 85.4 51.4

Multifamily residential real estate 117.7 65.3 6.6 16.4 9.2 8.5 11.7

Home equity loans 50.1 16.7 7.6 10.9 5.1 4.8 4.9

Other 1-4 family residential 398.0 139.0 42.6 71.8 51.4 66.6 26.7

Commercial and industrial loans 206.3 52.3 20.3 38.6 34.5 41.8 18.8

Loans to individuals 61.5 14.1 6.9 12.3 10.4 13.4 4.4

Credit card loans 2.0 0.4 0.2 0.4 0.6 0.2 0.3

Other loans to individuals 59.5 13.7 6.8 11.9 9.9 13.2 4.2

All other loans and leases (including farm) 92.2 12.9 4.8 15.2 34.6 18.3 6.3

Total loans and leases 1,559.6 457.4 167.6 270.4 245.8 281.8 136.6

Memo: Unfunded Commitments (in millions)

Total Unfunded Commitments 292,974 76,949 30,169 54,080 48,768 52,814 30,194

Construction and development: 1-4 family residential 25,804 5,143 4,132 2,962 3,335 7,247 2,984

Construction and development: CRE and other 62,216 19,033 6,636 10,081 7,562 13,667 5,237

Commercial and industrial 93,260 23,932 8,424 18,799 15,634 16,621 9,850

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled. 

** See Table V-A for explanations.

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

FDIC QUARTERLY 23

Insurance Fund Indicators

Deposit Insurance Fund Increases by $2.9 Billion

Insured Deposits Grow by 0.7 Percent

DIF Reserve Ratio Rises 4 Basis Points to 1.28 Percent

The Deposit Insurance Fund (DIF) balance increased by $2.9 billion, to $90.5 billion, during 

the third quarter. Assessment income of $2.6 billion, which includes temporary assessment 

surcharges on large banks, and a negative provision for insurance losses of $512 million were 

the largest sources of the increase. Interest earned and other revenue added $275 million, 

while operating expenses and unrealized losses on available-for-sale securities reduced the 

fund by $437 million. No banks failed during the quarter. During the first nine months of 

2017 six institutions failed, with combined assets of $4.9 billion.

The deposit insurance assessment base—average consolidated total assets minus average tangible equity—increased by 0.8 percent in the third quarter and by 3.0 percent over 

12 months.1, 2 Total estimated insured deposits increased by 0.7 percent in the third quarter of 

2017 and by 4.0 percent year-over-year. The DIF’s reserve ratio (the fund balance as a percent 

of estimated insured deposits) rose to 1.28 percent on September 30, 2017, from 1.24 percent 

at June 30, 2017, and 1.18 percent four quarters ago. The September 30, 2017, reserve ratio is 

the highest for the DIF since June 30, 2005, when the reserve ratio was also 1.28 percent.3

By law, the reserve ratio must reach a minimum of 1.35 percent by September 30, 2020. The 

law also requires that, in setting assessments, the FDIC offset the effect of the increase in the 

reserve ratio from 1.15 to 1.35 percent on banks with less than $10 billion in assets. To satisfy 

these requirements, large banks are subject to a temporary surcharge of 4.5 basis points of 

their assessment base, after making certain adjustments.4,5 Surcharges began in the third 

quarter of 2016 and will continue through the quarter in which the reserve ratio first meets 

or exceeds 1.35 percent. If, however, the reserve ratio has not reached 1.35 percent by the end 

of 2018, large banks will pay a shortfall assessment in early 2019 to close the gap.

Small banks will receive credits to offset the portion of their assessments that help to 

raise the reserve ratio from 1.15 percent to 1.35 percent. When the reserve ratio is at least 

1.38 percent, the FDIC will automatically apply a small bank’s credits to reduce its regular 

assessment up to the entire amount of the assessment.

Author:

Kevin Brown

Senior Financial Analyst

Division of Insurance and Research

(202) 898-6817

1 There are additional adjustments to the assessment base for banker’s banks and custodial banks.

2 Figures for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition to insured 

commercial banks and savings institutions.

3 The reserve ratio for June 30, 2005, represents the combined balances of the Bank Insurance Fund and Savings Association 

Insurance Fund as a percent of estimated insured deposits.

4 Large banks are generally those with assets of $10 billion or more.

5 The assessment base for the surcharge is a large bank’s regular assessment base reduced by $10 billion (and subject to additional 

adjustment for affiliated banks).
2 0 1 7  •  Volume 1 1  • Number 4

24 FDIC QUARTERLY

DIF Reserve Ratios

Percent of Insured Deposits

1.09 1.11 1.13 1.17 1.18 1.20 1.24

0.89

1.01 1.03 1.07

1.20

1.28

9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17

Table I-C. Insurance Fund Balances and Selected Indicators*

(dollar figures in millions)

Deposit Insurance Fund**

3rd 

Quarter 

2017

2nd 

Quarter 

2017

1st 

Quarter 

2017

4th 

Quarter 

2016

3rd 

Quarter 

2016

2nd 

Quarter 

2016

1st 

Quarter 

2016

4th 

Quarter 

2015

3rd 

Quarter 

2015

2nd 

Quarter 

2015

1st 

Quarter 

2015

4th 

Quarter 

2014

3rd 

Quarter 

2014

Beginning Fund Balance $87,588 $84,928 $83,162 $80,704 $77,910 $75,120 $72,600 $70,115 $67,589 $65,296 $62,780 $54,320 $51,059

Changes in Fund Balance:

Assessments earned 2,568 2,634 2,737 2,688 2,643 2,328 2,328 2,160 2,170 2,328 2,189 2,030 2,009

Interest earned on 

investment securities 274 251 227 189 171 164 147 128 122 113 60 70 80

Realized gain on sale of

investments 0 0 0 0 0 0 0 0 0 0 0 0 0

Operating expenses 404 450 442 437 422 441 415 447 410 434 396 408 406

Provision for insurance 

losses -512 -233 765 -332 -566 -627 -43 -930 -578 -317 -426 -6,787 -1,663

All other income, 

net of expenses 1 4 2 3 3 2 5 12 2 3 6 -43 6

Unrealized gain/(loss) on 

available-for-sale 

securities -33 -12 7 -317 -167 110 412 -298 64 -34 231 24 -91

Total fund balance change 2,918 2,660 1,766 2,458 2,794 2,790 2,520 2,485 2,526 2,293 2,516 8,460 3,261

Ending Fund Balance 90,506 87,588 84,928 83,162 80,704 77,910 75,120 72,600 70,115 67,589 65,296 62,780 54,320

Percent change from 

 four quarters earlier 12.15 12.42 13.06 14.55 15.10 15.27 15.05 15.64 29.08 32.37 33.55 33.03 33.27

Reserve Ratio (%) 1.28 1.24 1.20 1.20 1.18 1.17 1.13 1.11 1.09 1.07 1.03 1.01 0.89

Estimated Insured 

Deposits 7,091,993 7,045,471 7,078,396 6,914,305 6,816,688 6,675,378 6,663,048 6,522,388 6,409,239 6,336,141 6,334,862 6,196,472 6,125,603

Percent change from 

 four quarters earlier 4.04 5.54 6.23 6.01 6.36 5.35 5.18 5.26 4.63 3.95 3.72 3.30 2.78

Domestic Deposits 11,963,382 11,827,936 11,856,691 11,691,575 11,505,081 11,240,160 11,154,724 10,950,122 10,695,506 10,629,335 10,616,458 10,408,187 10,213,199

Percent change from 

 four quarters earlier 3.98 5.23 6.29 6.77 7.57 5.75 5.07 5.21 4.72 5.25 6.56 5.93 6.04

Assessment Base*** 14,817,154 14,703,126 14,620,881 14,563,365 14,383,050 14,193,985 13,994,465 13,833,119 13,662,687 13,589,497 13,533,471 13,346,567 13,113,585

Percent change from 

 four quarters earlier 3.02 3.59 4.48 5.28 5.27 4.45 3.41 3.65 4.19 5.33 5.78 4.61 4.61

Number of Institutions 

Reporting 5,746 5,796 5,865 5,922 5,989 6,067 6,131 6,191 6,279 6,357 6,428 6,518 6,598

Deposit Insurance Fund Balance 

and Insured Deposits

($ Millions)

DIF 

Balance

DIF-Insured 

Deposits*

9/14 $54,320 $6,125,603

12/14 62,780 6,196,472

3/15 65,296 6,334,862

6/15 67,589 6,336,141

9/15 70,115 6,409,239

12/15 72,600 6,522,388

3/16 75,120 6,663,048

6/16 77,910 6,675,378

9/16 80,704 6,816,688

12/16 83,162 6,914,305

3/17 84,928 7,078,396

6/17 87,588 7,045,471

9/17 90,506 7,091,993

Table II-C. Problem Institutions and Failed Institutions

(dollar figures in millions) 2017**** 2016  2016 2015 2014 2013 2012 2011

Problem Institutions

Number of institutions 104 132 123 183 291 467 651 813

Total assets $16,044 $24,917 $27,624 $46,780 $86,712 $152,687 $232,701 $319,432

Failed Institutions

Number of institutions 6 5 5 8 18 24 51 92

Total assets** *** $4,882 $277 $277 $6,706 $2,914 $6,044 $11,617 $34,923

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled.

** Quarterly financial statement results are unaudited.

*** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks.

  Through September 30.

** *** Total assets are based on final Call Reports submitted by failed institutions.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 25

Table III-C. Estimated FDIC-Insured Deposits by Type of Institution*

(dollar figures in millions)

September 30, 2017

Number of 

Institutions

Total 

Assets

Domestic 

Deposits**

Est. Insured 

Deposits

Commercial Banks and Savings Institutions

FDIC-Insured Commercial Banks 4,969 $16,053,323 $10,987,756 $6,304,691

 FDIC-Supervised 3,290 2,478,839 1,958,754 1,352,971

 OCC-Supervised 894 10,929,267 7,192,742 3,956,051

 Federal Reserve-Supervised 785 2,645,218 1,836,260 995,670

FDIC-Insured Savings Institutions 768 1,184,915 928,962 747,291

 OCC-Supervised 353 760,193 605,330 493,747

 FDIC-Supervised 378 398,534 303,069 237,402

 Federal Reserve-Supervised 37 26,188 20,563 16,143

Total Commercial Banks and Savings Institutions 5,737 17,238,238 11,916,718 7,051,983

Other FDIC-Insured Institutions

U.S. Branches of Foreign Banks 9 97,769 46,663 40,010

Total FDIC-Insured Institutions 5,746 17,336,008 11,963,382 7,091,993

* Data for third quarter 2017 do not include one insured institution with $4.1 billion in assets, which had not reported at the time data were compiled.

** Excludes $1.3 trillion in foreign office deposits, which are not FDIC insured.

Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range

Quarter Ending June 30, 2017 (dollar figures in billions)

Annual Rate in Basis Points*

Number of 

Institutions

Percent of Total 

Institutions

Amount of 

Assessment Base**

Percent of Total 

Assessment Base

1.50 - 3.00 3,421 59.02 $2,832.1 19.26

3.01 - 6.00 1,611 27.80 10,996.5 74.79

6.01 - 10.00 571 9.85 693.5 4.72

10.01 - 15.00 74 1.28 131.0 0.89

15.01 - 20.00 100 1.73 33.0 0.22

20.01 - 25.00 7 0.12 4.5 0.03

>25.00 12 0.21 12.5 0.09

* Assessment rates do not incorporate temporary surcharges on large banks.

** 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.
2 0 1 7  •  Volume 1 1  • Number 4

26 FDIC QUARTERLY

Notes to Users

This publication contains financial data and other information for 

depository institutions insured by the Federal Deposit Insurance 

Corporation (FDIC). These notes are an integral part of this publication and provide information regarding the comparability of source 

data and reporting differences over time.

Tables I-A through VIII-A.

The information presented in Tables I-A through VIII-A of the 

FDIC Quarterly Banking Profile is aggregated for all FDIC-insured 

Call report filers, both commercial banks and savings institutions. 

Some tables are arrayed by groups of FDIC-insured institutions 

based on predominant types of asset concentration, while other tables 

aggregate institutions by asset size and geographic region. Quarterly 

and full-year data are provided for selected indicators, including 

aggregate condition and income data, performance ratios, condition 

ratios, and structural changes, as well as past due, noncurrent, and 

charge-off information for loans outstanding and other assets.

Tables I-B through VI-B.

The information presented in Tables I-B through VI-B is aggregated 

for all FDIC-insured commercial banks and savings institutions 

meeting the criteria for community banks that were developed for 

the FDIC’s Community Banking Study, published in December, 2012: 

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 non-brokered deposits in domestic offices. 

Analysis of the underlying data shows that these thresholds establish 

meaningful levels of basic lending and deposit gathering and still 

allow for a degree of diversity in how individual banks construct their 

balance sheets.

The fourth step includes organizations that operate within a limited geographic scope. This limitation of scope is used as a proxy 

measure for a bank’s relationship approach to banking. Banks that 

operate within a limited market area have more ease in managing 

relationships at a personal level. Under this step, four criteria are 

applied to each banking organization. They include both a minimum and maximum number of total banking offices, a maximum 

level of deposits for any one office, and location-based criteria. 

The limits on the number of and deposits per office are adjusted 

upward quarterly. For banking offices, banks must have more than 

one office, and the maximum number of offices is 40 in 1985 and 

reached 87 in 2016. The maximum level of deposits for any one 

office is $1.25 billion in deposits in 1985 and reached $6.97 billion 

in deposits in 2016. The remaining geographic limitations are also 

based on maximums for the number of states (fixed at 3) and large 

metropolitan areas (fixed at 2) in which the organization maintains 

offices. Branch office data are based on the most recent data from 

the annual June 30 Summary of Deposits Survey that are available at 

the time of publication. 

Finally, the definition establishes an asset-size limit, also adjusted 

upward quarterly and below which the limits on banking activities 

and geographic scope are waived. The asset-size limit is $250 million 

in 1985 and reached $1.39 billion in 2016. This final step acknowledges the fact that most of those small banks that are not excluded 

as specialty banks meet the requirements for banking activities and 

geographic limits in any event.

Summary of FDIC Research Definition of Community 

Banking Organizations

Community banks are designated at the level of the banking 

organization.

(All charters under designated holding companies are considered 

community banking charters.)

Exclude: Any organization with:

— No loans or no core deposits

— Foreign Assets ≥ 10% of total assets

— More than 50% of assets in certain specialty banks, including:

• credit card specialists

• consumer nonbank banks1

• industrial loan companies

• trust companies

• bankers’ banks

Include: All remaining banking organizations with:

— Total assets < indexed size threshold 

2

— Total assets ≥ indexed size threshold, where:

• Loan to assets > 33%

• Core deposits to assets > 50%

• More than 1 office but no more than the indexed maximum 

number of offices.3

• Number of large MSAs with offices ≤ 2

• Number of states with offices ≤ 3

• No single office with deposits > indexed maximum branch 

deposit size.4

Tables I-C through IV-C.

A separate set of tables (Tables I-C through IV-C) provides comparative quarterly data related to the Deposit Insurance Fund (DIF), 

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 $1.39 billion in 2016.

3 Maximum number of offices indexed to equal 40 in 1985 and 87 in 2016.

4 Maximum branch deposit size indexed to equal $1.25 billion in 1985 and $6.97 billion 

in 2016.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 27

problem institutions, failed/assisted institutions, estimated FDICinsured 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 doublecounting. No adjustments are made for any double-counting of subsidiary data. Additionally, certain adjustments are made to the OTS 

Thrift Financial Reports to provide closer conformance with the 

reporting and accounting requirements of the FFIEC Call Reports.

(TFR filers began filing Call Reports effective with the quarter 

ending March 31, 2012.)

All condition and performance ratios represent weighted averages, 

i.e., the sum of the individual numerator values divided by the sum 

of individual denominator values. All asset and liability figures used 

in calculating performance ratios represent average amounts for the 

period (beginning-of-period amount plus end-of-period amount plus 

any interim periods, divided by the total number of periods). For 

“pooling-of-interest” mergers, the assets of the acquired institution(s) 

are included in average assets since the year-to-date income includes 

the results of all merged institutions. No adjustments are made for 

“purchase accounting” mergers. Growth rates represent the percentage change over a 12-month period in totals for institutions in the 

base period to totals for institutions in the current period. For the 

community bank subgroup, growth rates will reflect changes over 

time in the number and identities of institutions designated as community banks, as well as changes in the assets and liabilities, and 

income and expenses of group members. Unless indicated otherwise, 

growth rates are not adjusted for mergers or other changes in the 

composition of the community bank subgroup. When community 

bank growth rates are adjusted for mergers, prior period balances 

used in the calculations represent totals for the current group of community bank reporters, plus prior period amounts for any institutions 

that were subsequently merged into current community banks.

All data are collected and presented based on the location of each 

reporting institution’s main office. Reported data may include assets 

and liabilities located outside of the reporting institution’s home state. 

In addition, institutions may relocate across state lines or change 

their charters, resulting in an inter-regional or inter-industry migration, e.g., institutions can move their home offices between regions, 

savings institutions can convert to commercial banks, or commercial 

banks may convert to savings institutions.

ACCOUNTING CHANGES

Financial accounting pronouncements by the Financial Accounting 

Standards Board (FASB) can result in changes in an individual 

bank’s accounting policies and in the Call reports they submit. Such 

accounting changes can affect the aggregate amounts presented in the 

QBP for the current period and the period-to-period comparability of 

such financial data.

The current quarter’s Financial Institution Letter (FIL) and related 

Call report supplemental instructions can provide additional explanation to the QBP reader beyond any material accounting changes 

discussed in the QBP analysis.

https://www.fdic.gov/news/news/financial/2017/fil17049.html

https://www.fdic.gov/news/news/financial/2017/fil17049a.pdf

https://www.fdic.gov/regulations/resources/call/call.html

Further information on changes in financial statement presentation, 

income recognition and disclosure is available from the FASB. 

http://www.fasb.org/jsp/FASB/Page/LandingPage&cid=

1175805317350.

DEFINITIONS (in alphabetical order)

All other assets – total cash, balances due from depository institutions, premises, fixed assets, direct investments in real estate, 

investment in unconsolidated subsidiaries, customers’ liability on 

acceptances outstanding, assets held in trading accounts, federal 

funds sold, securities purchased with agreements to resell, fair market value of derivatives, prepaid deposit insurance assessments, and 

other assets.

All other liabilities – bank’s liability on acceptances, limited-life preferred stock, allowance for estimated off-balance-sheet credit losses, 

fair market value of derivatives, and other liabilities.

Assessment base – effective April 1, 2011, the deposit insurance 

assessment base changed to “average consolidated total assets minus 

average tangible equity” with an additional adjustment to the assessment base for banker’s banks and custodial banks, as permitted under 

Dodd-Frank. Previously the assessment base was “assessable deposits” and consisted of deposits in banks’ domestic offices with certain 

adjustments.

Assessment rate schedule – Initial base assessment rates for small 

institutions are based on a combination of financial ratios and 

CAMELS component ratings. Initial rates for large institutions—

generally those with at least $10 billion in assets—are also based 

on CAMELS component ratings and certain financial measures 

combined into two scorecards—one for most large institutions and 

another for the remaining very large institutions that are structurally 

and operationally complex or that pose unique challenges and risks 

in case of failure (highly complex institutions). The FDIC may take 

additional information into account to make a limited adjustment to 

a large institution’s scorecard results, which are used to determine a 

large institution’s initial base assessment rate.

While risk categories for small institutions (except new institutions) were eliminated effective July 1, 2016, initial rates for small 

institutions are subject to minimums and maximums based on an 

institution’s CAMELS composite rating. (Risk categories for large 

institutions were eliminated in 2011.)

The current assessment rate schedule became effective July 1, 2016. 

Under the current schedule, initial base assessment rates range 

from 3 to 30 basis points. An institution’s total base assessment rate 

may differ from its initial rate due to three possible adjustments: 
2 0 1 7  •  Volume 1 1  • Number 4

28 FDIC QUARTERLY

(1) Unsecured Debt Adjustment: An institution’s rate may decrease 

by up to 5 basis points for unsecured debt. The unsecured debt 

adjustment cannot exceed the lesser of 5 basis points or 50 percent 

of an institution’s initial base assessment rate (IBAR). Thus, for 

example, an institution with an IBAR of 3 basis points would have a 

maximum unsecured debt adjustment of 1.5 basis points and could 

not have a total base assessment rate lower than 1.5 basis points. 

(2) Depository Institution Debt Adjustment: For institutions that 

hold long-term unsecured debt issued by another insured depository institution, a 50 basis point charge is applied to the amount of 

such debt held in excess of 3 percent of an institution’s Tier 1 capital. 

(3) Brokered Deposit Adjustment: Rates for large institutions that are 

not well capitalized or do not have a composite CAMELS rating of 

1 or 2 may increase (not to exceed 10 basis points) if their brokered 

deposits exceed 10 percent of domestic deposits.

The assessment rate schedule effective July 1, 2016, is shown in the 

following table:

Total Base Assessment Rates*

Established Small Banks Large and 

Highly 

Complex 

Institutions**

CAMELS Composite

1 or 2 3 4 or 5

Initial Base 

Assessment Rate 3 to 16 6 to 30 16 to 30 3 to 30

Unsecured Debt 

Adjustment -5 to 0 -5 to 0 -5 to 0 -5 to 0

Brokered Deposit 

Adjustment N/A N/A N/A 0 to 10

Total Base 

Assessment Rate 1.5 to 16 3 to 30 11 to 30 1.5 to 40

* All amounts for all categories are in basis points annually. Total base rates that 

are not the minimum or maximum rate will vary between these rates. Total base 

assessment rates do not include the depository institution debt adjustment.

 ** Effective July 1, 2016, large institutions are also subject to temporary 

assessment surcharges in order to raise the reserve ratio from 1.15 percent to 

1.35  percent. The surcharges amount to 4.5 basis points of a large institution’s 

assessment base (after making certain adjustments).

Each institution is assigned a risk-based rate for a quarterly assessment period near the end of the quarter following the assessment 

period. Payment is generally due on the 30th day of the last month 

of the quarter following the assessment period. Supervisory rating 

changes are effective for assessment purposes as of the examination 

transmittal date.

Assets securitized and sold – total outstanding principal balance 

of assets securitized and sold with servicing retained or other sellerprovided credit enhancements.

Capital Purchase Program (CPP) – as announced in October 2008 

under the TARP, the Treasury Department purchase of noncumulative perpetual preferred stock and related warrants that is treated as 

Tier 1 capital for regulatory capital purposes is included in “Total 

equity capital.” Such warrants to purchase common stock or noncumulative preferred stock issued by publicly-traded banks are 

reflected as well in “Surplus.” Warrants to purchase common stock or 

noncumulative preferred stock of not-publicly-traded bank stock are 

classified in a bank’s balance sheet as “Other liabilities.”

Common equity Tier 1 capital ratio – ratio of common equity tier 1 

capital to risk-weighted assets. Common equity tier 1 capital includes 

common stock instruments and related surplus, retained earnings, 

accumulated other comprehensive income (AOCI), and limited 

amounts of common equity tier 1 minority interest, minus applicable 

regulatory adjustments and deductions. Items that are fully deducted 

from common equity tier 1 capital include goodwill, other intangible 

assets (excluding mortgage servicing assets) and certain deferred tax 

assets; items that are subject to limits in common equity tier 1 capital 

include mortgage servicing assets, eligible deferred tax assets, and 

certain significant investments.

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.
QUARTERLY BANKING PROFILE

FDIC QUARTERLY 29

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 noninterest-bearing transaction accounts as a new 

temporary deposit insurance account category. All funds held in 

noninterest-bearing transaction accounts were fully insured, without 

limit, from December 31, 2010, through December 31, 2012.

Failed/assisted institutions – an institution fails when regulators 

take control of the institution, placing the assets and liabilities into a 

bridge bank, conservatorship, receivership, or another healthy institution. This action may require the FDIC to provide funds to cover 

losses. An institution is defined as “assisted” when the institution 

remains open and receives assistance in order to continue operating.

Fair Value – the valuation of various assets and liabilities on the 

balance sheet—including trading assets and liabilities, available-forsale securities, loans held for sale, assets and liabilities accounted for 

under the fair value option, and foreclosed assets—involves the use 

of fair values. During periods of market stress, the fair values of some 

financial instruments and nonfinancial assets may decline.

FHLB advances – all borrowings by FDIC insured institutions from 

the Federal Home Loan Bank System (FHLB), as reported by Call 

Report filers, and by TFR filers prior to March 31, 2012.

Goodwill and other intangibles – intangible assets include servicing 

rights, purchased credit card relationships, and other identifiable 

intangible assets. Goodwill is the excess of the purchase price over the 

fair market value of the net assets acquired, less subsequent impairment adjustments. Other intangible assets are recorded at fair value, 

less subsequent quarterly amortization and impairment adjustments.

Loans secured by real estate – includes home equity loans, junior 

liens secured by 1-4 family residential properties, and all other loans 

secured by real estate.

Loans to individuals – includes outstanding credit card balances and 

other secured and unsecured consumer loans.

Long-term assets (5+ years) – loans and debt securities with remaining maturities or repricing intervals of over five years.

Maximum credit exposure – the maximum contractual credit 

exposure remaining under recourse arrangements and other sellerprovided credit enhancements provided by the reporting bank to 

securitizations.

Mortgage-backed securities – certificates of participation in pools 

of residential mortgages and collateralized mortgage obligations 

issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below.

Net charge-offs – total loans and leases charged off (removed from 

balance sheet because of uncollectability), less amounts recovered on 

loans and leases previously charged off.

Net interest margin – the difference between interest and dividends 

earned on interest-bearing assets and interest paid to depositors and 

other creditors, expressed as a percentage of average earning assets. 

No adjustments are made for interest income that is tax exempt.

Net loans to total assets – loans and lease financing receivables, net 

of unearned income, allowance and reserves, as a percent of total 

assets on a consolidated basis.

Net operating income – income excluding discretionary transactions such as gains (or losses) on the sale of investment securities and 

extraordinary items. Income taxes subtracted from operating income 

have been adjusted to exclude the portion applicable to securities 

gains (or losses).

Noncurrent assets – the sum of loans, leases, debt securities, and 

other assets that are 90 days or more past due, or in nonaccrual status.

Noncurrent loans & leases – the sum of loans and leases 90 days or 

more past due, and loans and leases in nonaccrual status.

Number of institutions reporting – the number of institutions that 

actually filed a financial report.

New reporters – insured institutions filing quarterly financial reports 

for the first time.

Other borrowed funds – federal funds purchased, securities sold with 

agreements to repurchase, demand notes issued to the U.S. Treasury, 

FHLB advances, other borrowed money, mortgage indebtedness, 

obligations under capitalized leases and trading liabilities, less revaluation losses on assets held in trading accounts.

Other real estate owned – primarily foreclosed property. Direct and 

indirect investments in real estate ventures are excluded. The amount 

is reflected net of valuation allowances. For institutions that 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.
2 0 1 7  •  Volume 1 1  • Number 4

30 FDIC QUARTERLY

Recourse – an arrangement in which a bank retains, in form or in 

substance, any credit risk directly or indirectly associated with an 

asset it has sold (in accordance with generally accepted accounting 

principles) that exceeds a pro rata share of the bank’s claim on the 

asset. If a bank has no claim on an asset it has sold, then the retention 

of any credit risk is recourse.

Reserves for losses – the allowance for loan and lease losses on a 

consolidated basis.

Restructured loans and leases – loan and lease financing receivables with terms restructured from the original contract. Excludes 

restructured loans and leases that are not in compliance with the 

modified terms.

Retained earnings – net income less cash dividends on common and 

preferred stock for the reporting period.

Return on assets – bank net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total 

(consolidated) assets. The basic yardstick of bank profitability.

Return on equity – bank net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total 

equity capital.

Risk-weighted assets – assets adjusted for risk-based capital definitions which include on-balance-sheet as well as off-balance-sheet 

items multiplied by risk-weights that range from zero to 200 percent. 

A conversion factor is used to assign a balance sheet equivalent 

amount for selected off-balance-sheet accounts.

Securities – excludes securities held in trading accounts. Banks’ securities portfolios consist of securities designated as “held-to-maturity,” 

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 31

2017 Summary of Deposits 

Highlights

Deposit growth and office contraction are once again the trends reflected in the Summary 

of Deposits (SOD) survey.1 This paper highlights key findings from the June 30, 2017, SOD 

survey and discusses factors that may be influencing the ongoing decline in the number of 

offices, including branches and main offices, of FDIC-insured institutions. 

Although deposits continued to grow in 2017, the rate of growth has slowed because of slower 

growth in metropolitan areas. Micropolitan and rural areas reported an increase in the 

pace of deposit growth, driven by community banks.2 Community bank deposit growth has 

exceeded noncommunity bank deposit growth on a percentage basis in metropolitan, micropolitan, and rural areas since 2015. The trend of office contraction accelerated in 2017, and 

the greatest declines occurred in metropolitan and micropolitan areas. Less than one-fifth 

of banks reported a net decrease in their number of offices over the past five years. However, 

the reduction in the number of offices by those banks has been large enough to drive a 

sizable decline in the overall number of offices operated by FDIC-insured institutions. This 

continuing trend can be partially attributed to factors such as population migration, office 

expense mitigation, industry consolidation, and financial technology.

Total Deposits of FDICInsured Institutions 

Continue to Grow

Total deposits of all FDIC-insured institutions increased by roughly $570 billion, or 

5.1 percent, from June 2016 to June 2017.3 FDIC-insured institutions held $11.8 trillion in 

deposits in 2017, compared with $11.2 trillion in 2016 (Chart 1). Deposit growth in 2017 was 

lower than the 5.8 percent five-year annual growth rate.4 Deposits grew even as the number 

of institutions and offices declined. As a result, deposits per institution increased 10 percent 

to $2.0 billion in 2017. Deposits per office increased 7.4 percent, from $122 million in 2016 to 

$131 million in 2017.

Deposits Increased in 2017, Continuing a Multiyear Trend

Total Deposits of FDIC-Insured Institutions

Source: FDIC Summary of Deposits.

8.9

11.8

0

2

4

6

8

10

12

14

2012 2013 2014 2015 2016 2017

$ Trillions

Chart 1

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE 

STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

1 The term “deposits” refers to deposits in domestic offices—meaning offices of FDIC-insured institutions located in the United 

States or U.S. territories. U.S. offices of foreign institutions and their deposits are not included.

2 Community banks are identified based on criteria defined in the FDIC Community Banking Study, December 2012, 

https://www.fdic.gov/regulations/resources/cbi/report/cbi-full.pdf. 3 All figures are as of June 30 in any given year, and all growth rates are between SOD filings, which report data as of June 30 

each year.

4 The five-year compound annual growth rate represents the average annual rate of growth that would be necessary to produce 

the net change over five years. For simplicity, it will be referred to here as “five-year annual growth.”
2 0 1 7  •  Volume 1 1  • Number 4

32 FDIC QUARTERLY

Deposit Growth Slowed in 

Metropolitan Counties

Although deposits overall grew at a slower rate in 2017 than in past years, deposit growth in 

micropolitan and rural areas increased.5 In fact, 2017 deposit growth in nonmetropolitan 

areas was higher than at any point over the past five years (Chart 2). Deposits increased by 

3.1 percent in rural areas, which outpaced the five-year annual growth rate of 2.1 percent. 

Similarly, deposits grew by 3.6 percent in micropolitan areas, which exceeded the fiveyear annual growth of 2.2 percent. In contrast, metropolitan areas reported slower deposit 

growth in 2017 than in any of the past five years. Deposits in metropolitan areas increased 

by 5.2 percent, down from the five-year annual growth rate of 6.1 percent. This slowdown in 

deposit growth in metropolitan areas, which account for almost 93 percent of total deposits, 

largely explains the lower growth rate of deposits overall.

e Pace of Deposit Growth Increased in Micropolitan and Rural Counties in 2017

Year-Over-Year Change in Total Deposits by County Type

Sources: FDIC Summary of Deposits and U.S. Census Bureau.

Note: Metropolitan statistical areas contain a core urban area of greater than 50,000 inhabitants.  Micropolitan statistical areas have urban clusters of

between 10,000 and 50,000 inhabitants. All other areas are classied as rural.

5.2

3.6

3.1

0

1

2

3

4

5

6

7

8

2013 2014 2015 2016 2017

Metropolitan Counties Micropolitan Counties Rural Counties Percent

Chart 2

Deposit Growth at 

Community Banks 

Outpaces Deposit Growth at 

Noncommunity Banks in 

Every County Type

In a reversal of trend, community banks reported greater merger-adjusted deposit growth 

than noncommunity banks in 2017.6 Noncommunity banks, which reported a five-year 

annual deposit growth rate of 6.0 percent, reported an increase in deposits of only 4.9 percent 

in 2017. Community banks, which reported a five-year annual deposit growth rate of only 

4.7 percent, reported a 6.4 percent increase in deposits in 2017.

Deposit growth at community banks has outpaced deposit growth at noncommunity banks 

in micropolitan and rural areas over the past five years, and in recent years has begun to 

outpace noncommunity bank deposit growth in metropolitan areas. Still, as of 2017, the 

five-year annual growth rate of noncommunity banks exceeds that of community banks in 

metropolitan areas (Chart 3).

5 Metropolitan statistical areas contain a core urban area of greater than 50,000 inhabitants. Micropolitan statistical areas have 

urban clusters of between 10,000 and 50,000 inhabitants. All other areas are counted as rural. Statistical areas consist of one or 

more counties. This analysis uses “areas” and “counties” interchangeably, and refers to the combination of micropolitan and rural 

areas as nonmetropolitan areas.

6 Figures are adjusted for mergers whenever calculations are made for subgroups of institutions. This includes comparing any 

industry subgroups such as those banks that increased, decreased, or maintained office counts, as well as community and 

noncommunity banks. When these groups are compared across time, figures are adjusted for mergers. No other figures in this 

analysis were adjusted for mergers, because doing so is required only of industry subgroups.
FDIC QUARTERLY 33

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

Community and Noncommunity Banks Report Strongest Deposit Growth in Metropolitan Counties

Five-Year Average Annual Deposit Growth

Sources: FDIC Summary of Deposits and U.S. Census Bureau.

Note: Metropolitan statistical areas contain a core urban area of greater than 50,000 inhabitants. Micropolitan statistical areas have urban clusters of

between 10,000 and 50,000 inhabitants. All other areas are classied as rural.

Percent

6.2

1.5

1.0

6.0

5.5

3.0 2.6

4.7

0

1

2

3

4

5

6

7

Metropolitan Counties Micropolitan Counties Rural Counties All County Types

Noncommunity Banks Community Banks

Chart 3

Noncommunity banks reported a five-year annual increase in deposits of 1.5 percent in 

micropolitan areas and 1.0 percent in rural areas, while community banks reported annual 

increases of 3.0 percent in micropolitan areas and 2.6 percent in rural areas. That disparity continued in 2017, when noncommunity banks reported deposit growth 1.8 percentage 

points lower than community banks in micropolitan areas and 0.9 percentage points lower 

in rural areas.

In metropolitan areas, noncommunity banks reported a five-year annual increase in deposits 

that was 0.7 percentage points higher than community banks. In 2017, however, community 

banks in metropolitan areas reported deposit growth that was 2.5 percentage points higher 

than noncommunity banks. Community bank deposit growth has exceeded noncommunity 

bank deposit growth in metropolitan areas since 2015.

The pace of deposit growth at community banks in 2017 contributed to a year-over-year 

increase in their share of deposits nationally and in metropolitan, micropolitan, and rural 

areas. Over the past five years, however, the community bank share of deposits has risen 

only in nonmetropolitan areas. Community banks continue to hold a majority of deposits 

in micropolitan areas (53 percent) and rural areas (71 percent), while they hold less than 

12 percent of deposits in metropolitan areas. The growth in community bank deposits in 

metropolitan areas over the past five years has not been large enough to offset growth by 

noncommunity banks, and thus the share of deposits held by community banks in metropolitan areas has fallen. Although the decline in the community bank share of deposits in 

metropolitan areas was slight, it was enough to cause the community bank share of total 

deposits to fall from 16.1 percent in 2012 to 15.3 percent in 2017.
2 0 1 7  •  Volume 1 1  • Number 4

34 FDIC QUARTERLY

The Decline in the Number 

of U.S. Banking Offices 

Accelerates

Since reaching a peak of nearly 100,000 in June 2009, the number of banking offices operated by FDIC-insured institutions has declined steadily. The trend continued in 2017, with 

the number of offices declining by 1,977 (2.2 percent) to 89,847. This change represents the 

fastest rate of decline in U.S. banking offices since the trend began in 2010, and exceeds the 

five-year annual decline of 1.6 percent. In all, banking offices operated by FDIC-insured 

institutions have declined by 7,484, or 7.7 percent, over the past five years.

This decline in the number of offices has been driven by a relatively small subset of 

banks—only 17.5 percent of banks reported a net decline in offices between 2012 and 2017. 

A higher percentage of banks, 21.8 percent, actually reported an increase in offices, while 

the remaining 60.7 percent of banks reported no net change in office counts. However, the 

number of offices closed by the few banks that reduced offices outstripped gains in offices 

by the rest of the banks. Banks that reported a decline in the number of offices were more 

likely to be noncommunity banks and were generally larger than those that did not, both in 

average total assets and number of offices (see Table).

A Small Subset of Banks Reduced Offices Enough to Drive the National Office Decline From 2012 to 2017

Institutions That 

Reduced Offices

Institutions That 

Increased Offices

Institutions With 

Unchanged Offices

Number of Institutions 1,013 1,259 3,515

Average Total Assets (Thousands), 2017 $12,439,423 $1,651,278 $631,848

Average Offices per Institution, 2017 58 14 4

Total Change in Offices –10,126 +2,642 0

 Percent of Office Change by Noncommunity Banks 81% 21% 0%

 Percent of Office Change by Community Banks 19% 79% 0%

Sources: FDIC Summary of Deposits and Consolidated Reports of Condition and Income.

Rural Counties Continue 

to Report the Highest 

Office Density

Rural counties maintained the highest office density, defined as offices per 10,000 people, 

while metropolitan, micropolitan, and rural areas all continued to report declines in office 

density at a slow and steady pace.7 Rural areas reported an office density of 4.7 in 2017, 

compared with 3.6 in micropolitan areas and 2.5 in metropolitan areas.

Since 1987, office density has fallen by 0.8 in metropolitan counties, by 0.5 in micropolitan 

counties, and by 0.4 in rural counties. The relatively low rate of decline in office density in 

rural areas is a result of the outsized presence of community banks in those areas. The rate 

of reduction in the number of offices by community banks is lower than among noncommunity banks. Community banks make up 72.4 percent of offices in rural areas, so trends in 

community banks have a large influence on trends in rural areas.

Rural Counties Continue 

to Report Slowest Decline 

in Office Numbers

Rural areas have had the smallest reduction in offices over time, reporting only a 6.4 percent 

decline between 2012 and 2017, compared with 8.4 percent in micropolitan areas and 

7.8 percent in metropolitan areas. Rural areas also reported a smaller year-over-year 

percentage decline in offices in four of the past five years. Micropolitan areas reported 

the largest percentage decrease in offices in three of the past five years (Chart 4). Overall, 

micropolitan areas have reported the largest percentage decline in offices since the national 

trend of office reductions began in 2010.

7 Population data are from Moody’s Analytics. Data for 2017 are forecasted by Moody’s Analytics. Data from 2016 are used as the 

2017 forecast for Alaska, Hawaii, and Virginia.
FDIC QUARTERLY 35

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

Micropolitan Counties Have Reported the Largest Percentage Decline in Oces, 

While Rural Counties Have Reported the Smallest Decline 

Year-Over-Year Change in Oces by County Type

Sources: FDIC Summary of Deposits and U.S. Census Bureau.

Note: Metropolitan statistical areas contain a core urban area of greater than 50,000 inhabitants.  Micropolitan statistical areas have urban clusters of

between 10,000 and 50,000 inhabitants. All other areas are classied as rural.

Percent

-2.5 -2.3

-2.0

-1.5

-1.0

-0.5

0.0

2013 2014 2015 2016 2017

Metropolitan Counties Micropolitan Counties Rural Counties

Chart 4

However, the county type with the largest decline in the number of offices has shifted from 

micropolitan to metropolitan in the past two years. The pace of office closures increased in 

metropolitan areas in 2017. Offices declined 2.3 percent during the year, compared with the 

five-year annual decline of only 1.7 percent. In absolute terms, the vast majority of banking 

offices are located in metropolitan areas. Therefore, it is not surprising that between 2012 

and 2017 the majority of national office closures also have occurred in metropolitan areas, 

even though losses have been higher in micropolitan areas on a percentage basis.

Community Bank Offices 

Increased Slightly in 2017

Noncommunity banks have driven the national decline in the number of offices for many 

years, and were particularly aggressive in office reductions between 2016 and 2017. Noncommunity banks have reduced offices by a total of 7,629 (11.5 percent) over the past five years. 

In 2017, offices operated by noncommunity banks declined by 3.3 percent (2,011 offices)—

a marked increase from the five-year annual decline of 2.4 percent. Nearly half of noncommunity banks reported reduced office counts between 2012 and 2017 (Chart 5). In contrast, 

community banks have been much more likely to maintain their existing offices or grow 

their branch networks. Only 14.9 percent of community banks reported a decline in office 

counts between 2012 and 2017. Community banks operated 31,244 offices in 2017, up 34 

offices (0.1 percent) from the past year and up 145 offices (0.5 percent) from five years ago.

Noncommunity Banks Have Been Much More Likely to Close Oces an Community Banks

2012–2017

Source: FDIC Summary of Deposits.

Noncommunity Banks Community Banks

Decreased Oces Increased Oces Maintained Oces

32%

19%

49% 63%

22%

15%

Chart 5
2 0 1 7  •  Volume 1 1  • Number 4

36 FDIC QUARTERLY

Noncommunity Banks 

Reduced Offices in Both 

Metropolitan and 

Nonmetropolitan Counties

Community banks increased their number of offices in metropolitan areas and overall 

from 2012 to 2017, while noncommunity banks reduced their number of offices in all areas. 

Noncommunity banks reported a five-year annual decline in offices of 3.5 percent in micropolitan areas and 3.6 percent in rural areas, far more than the community bank declines 

of 0.2 percent in micropolitan areas and 0.4 percent in rural areas (Chart 6). The pace of 

office closures among noncommunity banks increased in 2017 as office numbers declined 

by 4.4 percent in micropolitan areas and 3.8 percent in rural areas. In contrast, community 

bank closures slowed. These banks reported no change in offices in micropolitan areas and a 

0.3 percent decrease in offices in rural areas.

In metropolitan areas, noncommunity banks reported a five-year annual decline in offices 

of 2.3 percent, compared with a 0.3 percent increase by community banks. In 2017, noncommunity banks reduced offices by 3.2 percent in metropolitan areas, while community banks 

reported slight office growth of 0.3 percent in these areas.

Between 2012 and 2017, and in 2017 alone, the overall increase in community bank offices 

and the minimal decrease in community bank offices in nonmetropolitan areas led to a rise 

in the community bank share of offices in all areas and nationally.

Community Banks Buck the Trend of O
ce Consolidation in Metropolitan Counties

Five-Year Average Annual Change in O
ces

Sources: FDIC Summary of Deposits and U.S. Census Bureau.

Note: Metropolitan statistical areas contain a core urban area of greater than 50,000 inhabitants.  Micropolitan statistical areas have urban clusters of

between 10,000 and 50,000 inhabitants. All other areas are classied as rural.

Noncommunity Banks Community Banks Percent

-2.3

-3.5 -3.6

-2.4

0.3

-0.2 -0.4

0.1

-4

-3

-2

-1

0

1

Metropolitan Counties Micropolitan Counties Rural Counties All County Types

Chart 6

Many Factors May Explain 

the National Decline in the 

Number of Offices

More than 7,000 offices have closed during the past five years, and office density has 

declined across the country. A bank may weigh many different factors when making the 

business decision to close offices. For example, measurable factors may include population migration, office expense, industry consolidation, and financial technology. The rest 

of this article explores these factors to see if they contribute to office reductions. Relationships between these factors are likely. Each section of analysis that follows suggests a causal 

relationship, but does not control for other factors, as doing so is outside of the scope of 

this article. The outcome of this analysis suggests these factors should be included in future 

research on this topic.
FDIC QUARTERLY 37

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

Rates of Population Decline 

Correspond to Rates of 

Decline in the Number 

of Offices

Some 3,116 U.S. counties were home to banking offices of FDIC-insured institutions in 

either 2012 or 2017.8 Of these, some 1,680 counties (54 percent) lost population over that 

interval according to the most recent annual figures from the U.S. Census Bureau.9 The rate 

of decline in banking offices was measurably higher in counties that lost population than in 

counties where population increased (Chart 7). This pattern suggests that the decline in the 

number of offices may be attributable at least in part to declines in population. However, the 

number of banking offices also declined in counties where population increased over this 

period, which suggests that the general decline in office locations is in part attributable to 

factors other than the loss of population.

Counties With Increasing Population Have Reported the Smallest Rate of Decline 

in the Number of Oces

Change in Number of Oces, 2012 to 2017

Sources: FDIC Summary of Deposits and U.S. Census Bureau.

Note: Each quintile represents 20 percent of U.S. counties, ordered by population growth from 2012 to 2016. 

Percent

-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

Quintiles of U.S. Counties Ranked by Population Growth (2012 to 2016)

Largest Population Loss (–16% to –2%) Second Quintile (–2% to –1%) ird Quintile (–1% to 0.5%)

Fourth Quintile (0.5% to 3%) Largest Population Increase (3% to 59%)

Chart 7

Institutions With Higher 

Premises Expense Are More 

Likely to Shed Offices

During the post crisis period, low interest rates have compressed net interest margins 

for banks of all sizes.10 As a result, many institutions have turned to expense controls to 

strengthen their bottom lines. There are multiple ways to analyze whether expenses for 

premises and fixed assets (premises expense) may contribute to a bank’s decision to close 

offices.11 This analysis will consider two of those ways. First, premises expense should 

increase more slowly at banks that reduce offices. Indeed, between 2012 and 2017, banks that 

reduced their number of offices reported an increase in premises expense of 6.3 percent—less 

than the 13.2 percent increase at banks with no change in their number of offices and much 

less than the 23.6 percent increase at banks that increased their number of offices.12

8 This figure excludes population levels in U.S. territories because the U.S. Census Bureau does not produce annual population 

estimates at the county level for territories. For an analysis of population trends at the county level over a longer time period and 

the effect of population changes on banks, see John Anderlik and Richard Cofer, “Long-Term Trends in Rural Depopulation 

and Their Implications for Community Banks,” FDIC Quarterly 8, no. 2 (2014): 44–59, https://www.fdic.gov/bank/analytical/

quarterly/2014-vol8-2/article2.pdf. 9 The most recent annual population figures are from 2016. See U.S. Census Bureau, “County Population Totals Tables: 2010-2016,” 

https://www.census.gov/data/tables/2016/demo/popest/counties-total.html. 10 See Jared Fronk, “Core Profitability of Community Banks: 1985-2015,” FDIC Quarterly 10, no. 4 (2017): 37–44, https://www.fdic.

gov/bank/analytical/quarterly/2016-vol10-4/article1.pdf. 11 Banks list “expenses of premises and fixed assets” in consolidated reports of income. These expenses include rent, property 

taxes, utilities, maintenance, and many other items. For a complete list, see Federal Financial Institutions Examination Council, 

“Line Item Instructions for the Consolidated Report of Income,” https://www.fdic.gov/regulations/resources/call/crinst/2017-

03/317ri-033117.pdf. 12 The analysis of bank premises expense is merger-adjusted. It is important to combine the offices and premises expense of banks 

involved in a merger for a “like-to-like” comparison between years.
2 0 1 7  •  Volume 1 1  • Number 4

38 FDIC QUARTERLY

Second, while it is reasonable to presume that slowing growth in premises expense may 

be a motivation for shedding offices, a stronger case exists if the banks that are reducing 

their numbers of offices have higher premises expense in the first place. In 2012, the average premises expense per office among banks that subsequently reduced their numbers of 

offices was $143,291—much higher than the average of $64,640 at banks that increased their 

numbers of offices. It stands to reason that if high premises expense serves as a motivation 

for reducing office counts, then banks with higher premises expense should be more likely to 

close offices. Indeed, banks in the top 20 percent of premises expense per office in 2012 were 

the most likely to reduce office counts in the following five years, while banks in the lowest 

20 percent of premises expense per office were the least likely (Chart 8). Only 8.4 percent of 

banks with the lowest premises expense per office reduced their number of offices, while 

31.1 percent of banks with the highest premises expense per office reduced their number of 

offices. Similarly, banks in the highest 20 percent of premises expense per office were the 

least likely to increase office counts (Chart 9). Therefore, it is possible that the decline in 

the number of offices is at least partly attributable to a desire by banks to limit increases in 

premises expense or reduce premises expense.

Banks With the Highest Premises Expense per Oce Were More Likely to Reduce

eir Number of Oces

Banks at Reduced Oces From 2012 to 2017

Sources: FDIC Summary of Deposits and Consolidated Reports of Condition and Income.

Percent

Quintile of Banks Ranked by Premises Expense per Oce in 2012

Lowest Premises Expense per Oce Second Quintile ird Quintile

Fourth Quintile Highest Premises Expense per Oce

8

31

0

10

20

30

40

Chart 8

Banks With the Highest Premises Expense per Oce Were Also the Least Likely to Increase 

eir Number of Oces

Banks at Increased Oces From 2012 to 2017

Sources: FDIC Summary of Deposits and Consolidated Reports of Condition and Income.

Percent

Quintile of Banks Ranked by Premises Expense per Oce in 2012

Lowest Premises Expense per Oce Second Quintile ird Quintile

Fourth Quintile Highest Premises Expense per Oce

0

10

20

30

40

23

13

Chart 9
FDIC QUARTERLY 39

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

Mergers Between Banks 

Account for Some Reduction 

in Offices

The rate of intercompany bank mergers quadrupled following the financial crisis as the 

wave of post crisis failures receded. The merger rate climbed from 1.0 percent in 2009 to a 

17-year high of 4.0 percent in 2015.13 It is plausible that the increase in merger activity has 

contributed to the decline in offices, as banks may close duplicative offices if two institutions operating in the same area merge. With that in mind, this analysis compares the rate of 

office decline at banks involved in a merger (acquirers) with the rate of decline at banks not 

involved in a merger (nonacquirers).

Merger-adjusted data show that acquirers reduce offices at a higher rate than nonacquirers. 

From 2012 to 2017, acquiring banks reported 2.8 percent fewer offices in the SOD immediately following a merger, double the 1.4 percent rate of office decline at nonacquirers. 

Community bank acquirers shed offices at a slower rate than noncommunity banks, but 

both community and noncommunity bank acquirers report fewer offices between SOD 

filings. Because acquirers close offices at a higher rate than nonacquirers, it is likely that 

mergers account for some of the reduction in total offices. Nevertheless, the 2.8 percent rate 

of office decline at acquirers amounts to a total of 1,409 offices, or just 18.8 percent of total 

office closures from 2012 to 2017. Even if it is likely that many of the 1,409 offices were closed 

as a direct result of the merger, it is clear that mergers account for a relatively small portion 

of the overall decline in offices during this period.

Technology Reduces the 

Need for a Physical Presence

Technology allows traditional interactions between banks and customers to take place 

remotely, reducing the need for banks to maintain a physical presence. In 2015, the FDIC’s 

National Survey of Unbanked and Underbanked Households collected data on the methods 

used by consumers to access their banking accounts.14 The survey showed that fewer than 

half of consumers (49.2 percent) used a bank teller or automated teller machine (ATM) as 

the primary means of accessing their account, down from 56.6 percent in 2013. Online and 

mobile banking were the primary methods used by 46.4 percent of customers, up from 

38.6 percent in 2013. There is nothing to suggest that the trend toward a virtual channel as 

the primary means of accessing a banking account has abated since the survey data were 

collected.

That said, it is also important to keep the trends in context. Consumers continue to demand 

access to tellers and ATMs even as their primary means of accessing their accounts shift. 

Seventy-five percent of households used bank tellers in 2015, and 70 percent of households 

used an ATM or kiosk. This shows that physical offices remain a vital channel for banks to 

deliver financial services to their customers, and that brick-and-mortar banking and electronic banking are more complements than substitutes for one another. This is especially 

true at community banks, where relationship banking plays a larger role. Technology has 

likely lowered the equilibrium number of offices needed to serve customers and thus may 

have contributed to the reduction in bank offices since 2010. However, the evidence also 

suggests that physical banking offices continue to be an important conduit for delivering 

banking services, particularly among community banks.15

13 The merger rate is calculated as the number of banks merged as a percentage of total number of banks at past year-end.

14 Federal Deposit Insurance Corporation, “2015 FDIC National Survey of Unbanked and Underbanked Households,” October 20, 

2016, https://www.fdic.gov/householdsurvey/2015/2015report.pdf. 15 See Eric C. Breitenstein and John M. McGee, “Brick and Mortar Banking Remains Prevalent in an Increasingly Virtual 

World,” FDIC Quarterly 9, no. 1 (2015): 37–51, https://www.fdic.gov/bank/analytical/quarterly/2015-vol9-1/fdic-4q2014-v9n1-

brickandmortar.pdf.
2 0 1 7  •  Volume 1 1  • Number 4

40 FDIC QUARTERLY

Conclusion The 2017 Summary of Deposits data show that recent trends in overall offices and deposits of FDIC-insured institutions continued in the year ending in June 2017. Total deposits 

increased, and they increased at a faster rate among community banks than noncommunity 

banks. The total number of offices decreased, which continues a trend that began in 2010. 

The decline in the number of offices was driven by larger banks that tend to operate in 

metropolitan areas.

Four factors may contribute to the decision to close offices. First, the rate of decline in the 

number of offices at the county level corresponds to the rate of population decline, which 

suggests that banks may, in part, close offices as a result of people moving out of areas that 

they service. Second, the decline in the number of offices seems to be partly driven by a 

desire to increase efficiency and profitability, and institutions with higher premises expense 

per office have reduced office counts at a higher rate than their counterparts. Third, industry 

consolidation likely plays a role in some office closures as the rate of office decline is higher 

among acquirers than nonacquirers. Finally, consumers may have less of a need for physical 

offices for some services as banks have increasingly made those services available digitally.

Authors:

Nathan L. Hinton

Economic Analyst

Division of Insurance and Research

Derek K. Thieme

Economic Analyst

Division of Insurance and Research

Angela N. Woodhead

Economic Analyst

Division of Insurance and Research
FDIC QUARTERLY 41

Introduction An increase in mergers and a dearth of new charters in the post-crisis period have renewed 

interest among researchers in banking industry consolidation. The rate of voluntary attrition increased sharply following the financial crisis as a wave of post-crisis failures receded. 

Voluntary attrition increased from 2.2 percent of existing charters per year in 2009 to a 

15-year high of 4.9 percent in 2015 (Chart 1).1 Nearly all of the increase in attrition represents 

voluntary mergers between unaffiliated institutions.

The vast majority of merger participants are community banks (91 percent).2 However, 

community banks make up the vast majority of institutions (92 percent). In fact, the proportion of community banks among total banking charters has actually increased since 1985 

and remains stable today.

1985

Voluntary Mergers Have Increased Since the Crisis

Annual Rates of Voluntary Attrition, 1985 to 2016, as a Percentage of Charters Reporting at Previous Year-End

Source: FDIC.

Percent Other Closings Intracompany Consolidation of Charters Voluntary Intercompany Mergers

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

1988 1991 1994 1997 2000 2003 2006 2009 2012

Average: 1985 to 1992

–3.3

Average: 1993 to 2001

–5.4

Average: 2002 to 2015

–3.5

: –4.3

–4.9

–4.2

2016

Chart 1

Community banks also make up the vast majority of merger participants on both sides of the 

deal. Most community banks that are acquired merge with other community banks (Chart 2), 

which results in a community banking sector composed of somewhat larger institutions that 

continue to provide essential financial services within a limited geographic market.

This analysis extends the research of Kowalik et al. that compared acquired community 

banks with nonacquired community banks.3 We refine other researchers’ definitions of 

community banks by applying the FDIC’s functional definition, and we control for asset size, 

geography, and lending specialty in selecting the peers of acquired banks. Using the refined 

definitions of community banks and peers of acquired banks, we compare community banks 

acquired between 2010 and 2016 with their peers using key metrics of financial performance, 

credit quality, and balance sheet structure. Past research on bank mergers has examined 

acquirer motives, explored characteristics that increase the value of an institution to an 

acquirer, compared acquired banks with their acquirers, and compared acquired banks with 

nonacquired peers.4

COMMUNITY BANK MERGERS SINCE THE FINANCIAL CRISIS:

HOW ACQUIRED COMMUNITY BANKS COMPARED WITH THEIR PEERS

1 Voluntary attrition includes mergers between unaffiliated institutions (intercompany mergers), consolidation of charters within 

the same holding company (intracompany mergers), liquidations not involving an acquisition, and institutions relinquishing 

FDIC insurance. The latter two events are not common, accounting for an average of 0.1 percent of institutions per year between 

1985 and 2016.

2 For the FDIC’s definition of community bank, see Chapter 1 of the FDIC Community Banking Study (2012), 

https://www.fdic.gov/regulations/resources/cbi/study.html. 3 Michal Kowalik, Troy Davig, Charles S. Morris, and Kristen Regehr, “Bank Consolidation and Merger Activity Following the 

Crisis,” Federal Reserve Bank of Kansas City Economic Review 100, no. 1 (2015): 31–49. 4 “Bank” means any FDIC-insured bank or thrift. 
2 0 1 7  •  Volume 1 1  • Number 4

42 FDIC QUARTERLY

Small Community Banks Overwhelmingly Have Been Acquired by Other Community Banks

Percentage of Community Banks at Merged Intercompany With Other Community Banks Between 2007 and 2016,

by Asset Size Group of Acquired Community Bank

Source: FDIC.

93

34

16

0

10

20

30

40

50

60

70

80

90

100

< $100M $100M to $500M $500M to $1B $1B to $10B

Asset Size Group of Acquired Community Bank

All Community Banks: 70%

Percent

66

Chart 2

Our results show that acquired community banks were typically less profitable and reported 

lower Tier 1 leverage ratios than their peers. Acquired community banks also reported 

higher core deposit to asset ratios and lower ratios of nonperforming assets than their peers. 

Acquired community banks were also more likely to be on the FDIC’s problem bank list.5

Past Research Generally 

Found That Acquired Banks 

Underperformed Others

Academics and banking analysts have produced a rich literature exploring different aspects 

of bank attrition. In a comprehensive summary of the literature, DeYoung et al. reviewed 

more than 150 studies published since 2000.6 Following is an overview of the relevant findings from past research that helped inform this article.

Kowalik et al. looked at consolidation among community banks between 2011 and 2014 and 

found that acquired banks generally performed worse than nonacquired banks. Jagtiani 

looked at consolidation between 1990 and 2006 and found that the acquirers of community banks tended to outperform the acquired institutions.7

 Consistent with Backup and 

Brown, Jagtiani also found that most community banks were acquired by other community banks.8

 In a sample of banks that merged between 1990 and 2000, Cornett et al. found 

that the performance of merged banks improved after a merger.9 Wheelock and Wilson 

explored bank failures and acquisitions between 1984 and 1993 and found that a lower 

return on assets (ROA) and a lower capital ratio increased the likelihood a bank would be 

acquired.10 Cyree found that acquirers paid a premium for banks with higher core deposits 

to assets ratios.11

5 The list of problem banks is made up of all FDIC-insured institutions with CAMELS ratings of 4 or 5. CAMELS ratings are a 

composite of ratings of a bank’s capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk.

6 Robert DeYoung, Douglas Evanoff, and Philip Molyneux, “Mergers and Acquisitions of Financial Institutions: A Review of the 

Post-2000 Literature,” Journal of Financial Services Research 36, no. 2 (2009): 87–110. 7 Julapa Jagtiani, “Understanding the Effects of the Merger Boom on Community Banks,” Federal Reserve Bank of Kansas City 

Economic Review 93, no. 2 (2008) 29–48. 8 Benjamin R. Backup and Richard A. Brown, “Community Banks Remain Resilient Amid Industry Consolidation,” FDIC 

Quarterly 8, no. 2 (2014): 37–51. 9 Marcia Millon Cornett, Jamie John McNutt, and Hassan Tehranian, “Performance Changes Around Bank Mergers: Revenue 

Enhancements Versus Cost Reductions,” Journal of Money, Credit and Banking 38, no. 4 (2006): 1013–1050. 10 David C. Wheelock and Paul W. Wilson, “Why Do Banks Disappear? The Determinants of U.S. Bank Failures and 

Acquisitions,” Review of Economics and Statistics 82, no. 1 (2000): 127–138. 11 Ken B. Cyree, “What Do Bank Acquirers Value in Non-Public Bank Mergers and Acquisitions?” Quarterly Review of Economics 

and Finance 50, no. 3 (2010): 341–351.
FDIC QUARTERLY 43

COMMUNITY BANK MERGERS SINCE THE FINANCIAL CRISIS

The authors above used several methods to compare acquired banks with other institutions. 

Kowalik et al. compared acquired banks with all nonacquired banks. Jagtiani compared 

acquired banks with their acquirers. Cornett et al. compared their sample of banks with 

others located in the same Federal Reserve district and asset size class. Wheelock and Wilson 

used a statistical method that compared banks that failed or were acquired with those that 

were not. Finally, Cyree included adjustments to control for industrywide trends.

Applying the FDIC’s 

Community Bank 

Definition and Refining the 

Definition of Peer

We analyzed community bank mergers that occurred between 2010 and 2016. These mergers occurred between institutions that were not part of the same bank holding company as 

of one year before the merger. We used the FDIC’s functional definition of community bank 

to select both the acquired institutions and their peers. This definition goes beyond asset 

size to take into account the activities and geographic scope of an institution. In using this 

definition, we excluded from our analysis small institutions whose primary business model 

is not based on local deposit gathering and lending, while we retained somewhat larger 

institutions whose business model is just that. Using this definition provides a more precise 

picture of community bank mergers than using a definition of community banks based 

solely on asset size.

We refined the definition of peer institutions so that each comparison group closely matched 

the acquired community bank.12 In addition to the requirement that the acquired banks and 

their peers were community banks and were similar in asset size, the acquired banks and 

their peers also belonged to the same lending specialty group and were headquartered in the 

same type of area: metropolitan (metro) or nonmetropolitan (nonmetro).13 Controlling for 

size improved the accuracy of financial performance comparisons, as certain performance 

ratios correlate with asset size. We applied the same logic to lending specialty groups, as 

business model plays an important role in performance ratios.14 For example, earnings at 

agricultural-lending specialists tend to be higher than earnings among mortgage-lending 

specialists. Controlling for lending specialty also accounted for discrepancies between lending specialty group performance associated with the Great Recession. Finally, we controlled 

for geography to account for regional differences in performance.

Once we matched the acquired community banks to groups of like peers, we compared 

their financial performance, credit quality, and balance sheets as of a year before the merger. 

We compared pretax ROA, net interest margin (NIM), noninterest income as a percentage 

of average assets, and the efficiency ratio to explore differences in financial performance. 

We used net charge-off rates and the nonperforming asset ratio to compare credit quality.15

To compare balance sheets, we explored differences in the Tier 1 leverage ratio, the loan-toassets ratio, and core deposits as a percentage of assets. We calculated flow items, such as the 

efficiency ratio, over four quarters ending one year before the merger. We calculated stock 

items, such as the loan-to-asset ratio, as of one year before the merger.

12 See the Appendix for a detailed description of the peer selection criteria.

13 The U.S. Office of Management and Budget designates clusters of counties as metropolitan statistical areas (MSAs) based on 

the population size of the urban cores and on socioeconomic integration. MSAs have an urban core of at least 50,000 people. 

Counties outside of MSAs are nonmetropolitan.

14 Lending specialty groups include commercial real estate, commercial and industrial, agricultural, mortgage, consumer, 

multi-specialists, and no lending specialty. See Chapter 5 of the FDIC Community Banking Study (2012), https://www.fdic.gov/

regulations/resources/cbi/study.html. 15 The nonperforming asset ratio is defined as all past-due and nonaccrual loans and leases, plus other real estate owned, as a 

share of total assets.
2 0 1 7  •  Volume 1 1  • Number 4

44 FDIC QUARTERLY

For each ratio, we performed a sign test to determine if the median difference between the 

acquired banks and their peers was statistically significant.16 A median difference that was 

statistically significant and positive suggested that acquired banks had higher values of the 

ratio compared with peers. A median difference that was statistically significant and negative suggested that acquired banks had lower values compared with peers. We compared 

acquired banks and peers across three dimensions: the overall sample of acquired banks and 

peers, acquired banks and peers by type of area, and acquired banks and peers by lending 

specialty group.

Our Sample of 

Acquired Banks

Between 2010 and 2016, 1,106 community banks were acquired. We excluded 139 banks 

(12.6 percent) from this population, which brought the final count of community banks 

analyzed to 967. We excluded 118 of the 139 institutions because we found no peers for them 

using our refined definition of peer. The remaining 21 banks were excluded because they 

acquired another institution within two years of their own acquisition.

Most of the 967 banks analyzed were acquired in the latter part of the seven-year period, 

corresponding to the post-crisis period of increase in the pace of mergers (Table 1). Each 

lending specialty was represented in the sample, though some were more common than 

others. Consumer specialists and commercial and industrial specialists were represented 

the least, with only ten acquired banks between the two specialty groups. Each of the other 

specialty groups contributed at least 106 institutions (or 11 percent) to the sample. Commercial real estate (CRE) specialists were the most common, accounting for roughly one-third of 

the sample.

Nearly two-thirds of the acquired banks were headquartered in metro areas. Acquired banks 

headquartered in metro areas had a median of five peers, whereas acquired banks headquartered in nonmetro areas had a median of 33 peers. The median number of peers for all 

acquired institutions was eight.

Table 1

Acquired Community Banks by Year Acquired, Lending Specialty, and Headquarter Location 

Year 

Acquired Count Percentage Lending Specialty Count Percentage HQ Location Count Percentage

2010 54 6% Agriculture 110 11% Metro 613 63%

2011 73 8% Commercial and Industrial 8 1% Nonmetro 354 37%

2012 128 13% Commercial Real Estate 316 33%

2013 139 14% Consumer 2 0%

2014 171 18% Mortgage 139 14%

2015 219 23% Multi-Specialist 106 11%

2016 183 19% No Specialty 286 30%

Total 967 100% Total 967 100% Total 967 100%

Source: FDIC.

Note: Percentages may sum to more than 100 because of rounding.

Statistical Comparisons of 

Acquired Banks and Peers

Acquired community banks were compared with their peers along three dimensions: by 

profitability, asset quality, and balance sheet; by type of area in which their headquarters are 

located; and by lending specialty group.

16 A result is statistically significant in this analysis if the likelihood of getting the result is less than 5 percent, assuming the 

financial data from the acquired banks come from the same distribution as the data from the peers.
FDIC QUARTERLY 45

COMMUNITY BANK MERGERS SINCE THE FINANCIAL CRISIS

Overall Comparisons of 

Acquired Banks and 

Their Peers

Acquired banks underperformed on measures of profitability, reported better asset quality, 

and reported balance sheets that differed from those of their peers. All of these differences 

were statistically significant. We discuss each in turn.

Acquired banks underperformed peers on measures of profitability. Our analysis showed 

that acquired banks reported statistically significant differences in pretax ROA, NIM, noninterest income as a percentage of average assets, and the efficiency ratio, compared with their 

peers.17 Median pretax ROA at all acquired community banks was 0.53 percent, 30 basis 

points below the median ratio at all peer banks (Chart 3). Both lower net operating revenue 

and higher expenses contributed to acquired banks’ lower profitability.18

Revenue was adversely affected by lower noninterest income and lower net interest income. 

Acquired banks reported median noninterest income as a percentage of average assets of 

0.45 percent, 10 basis points lower than the 0.55 percent reported by peers.

81

74

70

73

76

79

82

85

Acquired Community Banks Peers

Percent

Acquired Community Banks Underperformed Peers Across a Range of Performance Ratios

Community Banks Acquired Between 2010 and 2016, Compared With eir Peers

Percent

Percent Percent

Source: FDIC.

Note: e median dierence between acquired banks and peers for each ratio is statistically signicant at the 5 percent level.

Median Pretax Return on Assets Median Net Interest Margin

Median Noninterest Income as a Percentage of Average Assets Median Eciency Ratio

0.53

0.83

0.0

0.2

0.4

0.6

0.8

1.0

Acquired Community Banks Peers

3.61

3.71

3.50

3.55

3.60

3.65

3.70

3.75

3.80

Acquired Community Banks Peers

0.45

0.55

0.25

0.35

0.45

0.55

0.65

0.75

Acquired Community Banks Peers

Chart 3

17 See the Appendix for a discussion of the statistical significance test.

18 Net operating revenue is defined as the sum of net interest income and noninterest income.
2 0 1 7  •  Volume 1 1  • Number 4

46 FDIC QUARTERLY

Net interest income of acquired banks as a share of average assets was also below that of 

peers: a median of 3.31 percent at acquired banks, compared with 3.41 percent at peer institutions. Underperformance was highlighted by two factors. First, acquired banks reported 

NIM below peers. The median NIM at acquired banks was 3.61 percent, 10 basis points 

below the peer median of 3.71 percent. Second, acquired institutions reported a slightly 

smaller earnings base—defined as earning assets as a share of total assets—than peers. The 

median earnings base at acquired banks was 92.7 percent, compared with 93.5 percent at 

peers. The combination of lower margins and lower shares of earning assets led to the underperformance in net interest income as a share of assets.

A smaller earnings base among acquired banks compared with their peers also contributed 

to the fourth underperforming profitability metric shown in Chart 3—the efficiency ratio.19

Acquired banks were far less efficient than peers and reported a median efficiency ratio of 

81 percent, compared with just 74 percent at peers. Efficiency ratios increase as expenses rise, 

net operating revenue declines, or some combination of the two. Our analysis showed that 

the higher efficiency ratios of acquired banks resulted primarily from lower revenues, while 

higher expenses played a smaller role.

Asset quality at acquired banks was better than at peers. While acquired banks underperformed peers on measures of profitability, they had stronger asset quality than peers. 

Chart 4 shows acquired banks reported a lower net charge-off ratio and nonperforming asset 

ratio than peers.

Our results regarding asset quality differed from those reported in Kowalik et al. One possible reason for this difference is that we used the FDIC’s community bank definition, which 

resulted in a different sample of acquired institutions and peers. Another possible reason is 

that our peer group definition differed from that used by other researchers. For example, 

we did not include all nonacquired community banks in our peer group definition, as other 

researchers did.

Acquired Community Banks Reported Stronger Asset Quality an Did Peers

Community Banks Acquired Between 2010 and 2016, Compared With eir Peers

Source: FDIC.

Note: e median dierence between acquired banks and peers for each ratio is statistically signicant at the 5 percent level.

Percent Median Net Charge-O Ratio Percent Median Nonperforming Asset Ratio

Acquired Community Banks Peers Acquired Community Banks Peers

0.23

0.33

0.00

0.10

0.20

0.30

0.40

0.50

1.22

1.44

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

Chart 4

19 The efficiency ratio is defined as noninterest expense as a share of net operating revenue. Higher values indicate an institution 

is less efficient.
FDIC QUARTERLY 47

COMMUNITY BANK MERGERS SINCE THE FINANCIAL CRISIS

Acquired banks tended to have a higher proportion of funds from stable sources, as well 

as lower loan-to-asset ratios. While the previous sections dealt with the performance and 

credit quality of acquired institutions and their peers, here we analyze the composition 

of the balance sheet and pay particular consideration to areas influencing the acquisition 

(Chart 5). First, acquired banks reported higher ratios of core deposits to assets than their 

peers. Core deposits tend to be more stable sources of funding and may indicate stronger 

relationships with the local community. Second, acquired banks reported lower loan-to-asset 

ratios. Banks with lower loan-to-asset ratios are generally less risky than those with higher 

ratios. Finally, acquired banks reported lower capital ratios than peers, but each group was 

well-capitalized. It may be advantageous, from a price perspective, to acquire a bank with a 

lower capital ratio, because in many cases the merger price is a multiple of the value of the 

equity acquired.

Percent

Acquired Banks Had Higher Shares of Core Deposits and Lower Capital Ratios

Community Banks Acquired Between 2010 and 2016, Compared With eir Peers

Percent Percent

Source: FDIC.

Note: e median dierence between acquired banks and peers for each ratio is statistically signicant at the 5 percent level.

Median Tier 1 Leverage Ratio

Median Core Deposits as a Percentage of Average Assets Median Loans as a Percentage of Average Assets

Acquired Community Banks Peers

Acquired Community Banks Peers Acquired Community Banks Peers

9.8

10.8

9.0

9.5

10.0

10.5

11.0

11.5

12.0

80.4

78.4

 77

78

79

80

81

82

83

61.9

64.9

56

58

60

62

64

66

68

70

Chart 5
2 0 1 7  •  Volume 1 1  • Number 4

48 FDIC QUARTERLY

Comparisons Within Metro 

and Nonmetro Locations

As mentioned earlier, an acquired bank and each of its peers were both headquartered in 

metro areas or were both headquartered in nonmetro areas. In this section, we compare 

acquired banks with their peers depending on where they were headquartered. The statistically significant differences between acquired banks and their peers found in the overall 

sample remained when the sample was broken down by headquarters location.

Within metro and nonmetro areas, acquired banks underperformed their peers on measures 

of profitability. The acquired banks reported lower pretax ROA, NIM, and noninterest 

income as a percentage of assets, and higher efficiency ratios. As in the overall sample, 

acquired banks reported better asset quality compared with their peers. In addition, 

acquired banks had balance sheets that may have made them more likely than their peers to 

be acquired. Tier 1 leverage ratios were lower, reliance on core funding was greater, and loanto-asset ratios were lower at acquired banks than at their peers (Table 2). The statistically 

significant differences we observed between acquired banks and their peers within metro 

and nonmetro areas suggest geography alone did not account for the differences we observed 

in the overall sample.

Table 2

The Median Differences Between Acquired Banks and Peers by Geography Are Statistically Significant 

for Each Ratio

Median Ratios

Metropolitan Area Nonmetropolitan Area

Acquired Banks Peers Acquired Banks Peers

Pretax ROA 0.47% 0.64% 0.66% 1.02%

Net Interest Margin 3.62% 3.68% 3.60% 3.76%

Noninterest Income Percent of Assets 0.40% 0.55% 0.51% 0.55%

Efficiency Ratio 81.8% 78.3% 78.1% 70.2%

Net Charge-Off Rate 0.29% 0.37% 0.16% 0.27%

Nonperforming Asset Ratio 1.43% 1.87% 0.82% 1.04%

Tier 1 Leverage Ratio 9.84% 10.55% 9.78% 11.11%

Core Deposits Percent of Assets 78.8% 76.7% 82.9% 80.2%

Loan-to-Asset Ratio 65.3% 67.3% 54.3% 58.1%

Source: FDIC.

Notes: The threshold for statistical significance is 5 percent. The banks were acquired between 2010 and 2016.

Comparisons Within 

Lending Specialty Groups

As discussed before, acquired banks and their peers had the same lending specialty. In this 

section, we compare acquired banks with their peers based on their lending specialties. Most 

financial differences between acquired banks and their peers remained statistically significant when broken down by lending specialty.
FDIC QUARTERLY 49

COMMUNITY BANK MERGERS SINCE THE FINANCIAL CRISIS

The results we discussed in the preceding two sections remained broadly unchanged when 

we analyzed acquired banks and their peers by lending specialty. Acquired banks tended to 

underperform their peers on measures of profitability, report better asset quality, and report 

different balance sheet structures. Financial underperformance among the acquired banks 

compared with their peers was concentrated in agricultural-lending specialists, mortgagelending specialists, and banks with no lending specialty. However, the differences between 

acquired bank and peer pretax ROA were statistically significant at institutions of every 

specialty except CRE. Credit quality differences between acquired banks and their peers 

appeared to be driven primarily by agricultural-lending specialists, CRE lenders, and banks 

with no lending specialty. Differences in balance sheet structure between acquired banks and 

their peers were most prominent among agricultural-lending specialists, CRE lenders, and 

banks with no lending specialty. Acquired banks and their peers were most similar among 

mortgage lenders and multi-specialists (Table 3).

These results suggest that controlling for lending specialty is important for determining 

whether genuine differences exist in financial performance, asset quality, and balance sheet 

structure between acquired banks and their peers.

Table 3

Summary of Comparisons and Statistical Significance: Median Ratios From Acquired Banks and Peers 

by Lending Specialty

Median Ratios

Agriculture

Commercial 

Real Estate Mortgage Multi-Specialist No Specialty

Acquired 

Banks Peers

Acquired 

Banks Peers

Acquired 

Banks Peers

Acquired 

Banks Peers

Acquired 

Banks Peers

Pretax ROA 0.92% 1.19% 0.50% 0.54% 0.34% 0.57% 0.64% 0.94% 0.45% 0.90%

Net Interest Margin 3.79% 3.90% 3.73% 3.88% 3.42% 3.37% 3.81% 4.02% 3.38% 3.47%

Noninterest Income 

Percent of Assets 0.36% 0.45% 0.42% 0.55% 0.40% 0.48% 0.52% 0.64% 0.50% 0.59%

Efficiency Ratio 71.5% 66.6% 78.3% 78.6% 86.3% 78.0% 77.9% 74.6% 84.6% 73.6%

Net Charge-Off Rate 0.05% 0.17% 0.33% 0.49% 0.18% 0.21% 0.34% 0.37% 0.22% 0.31%

Nonperforming 

Asset Ratio 0.44% 0.81% 1.82% 2.83% 1.35% 1.51% 1.52% 1.91% 0.98% 1.04%

Tier 1 Leverage Ratio 10.02% 11.05% 10.03% 10.40% 9.98% 11.09% 9.65% 10.09% 9.61% 11.22%

Core Deposits 

Percent of Assets 83.3% 79.5% 78.4% 76.0% 78.7% 77.7% 78.1% 76.5% 84.0% 81.0%

Loan-to-Asset Ratio 59.7% 61.8% 68.6% 69.3% 68.4% 67.2% 69.9% 73.3% 44.2% 44.1%

Source: FDIC.

Notes: For highlighted ratios, the median difference between acquired banks and peers is significant at the 5 percent level. The banks were acquired 

between 2010 and 2016.
2 0 1 7  •  Volume 1 1  • Number 4

50 FDIC QUARTERLY

Conclusion The results of this research are consistent with past findings that acquired community banks 

generally underperform their peers. The only exception is that acquired institutions reported 

stronger asset quality than their peers, particularly among agricultural and CRE lending 

specialists. The balance sheets of acquired banks showed a greater reliance on core funding 

and a lower loan-to-assets ratio, which suggest a less-risky asset mix and an institution with 

strong community ties.

Our results cannot be disassociated from the post-crisis environment. Prominent among 

the concerns of community banks in the post-crisis period were asset quality and low net 

interest margins, which influenced merger decisions. How these results were influenced by 

economic conditions is an area for future research.

The peer group methodology in this research can be applied to other analyses comparing groups of banks. Financial institutions, even community banks, differ widely. Future 

research could use peer group criteria to compare acquirers with peers, both before and after 

acquisition.

Authors:

Eric C. Breitenstein

Economic Analyst

Division of Insurance and Research

Nathan L. Hinton

Economic Analyst

Division of Insurance and Research
FDIC QUARTERLY 51

COMMUNITY BANK MERGERS SINCE THE FINANCIAL CRISIS

Appendix:

Matching Methodology

This is an observational study of FDIC-insured community banks that were voluntarily 

acquired by unaffiliated institutions between 2010 and 2016. We compare them with a 

sample of peers that were chosen based on their similarity to the acquired institutions.

Both the acquired banks and peers met the following criteria as of one year before the 

acquisition:

• Were community banks

20

• Were chartered more than three years earlier

• Had the same lending specialty

21

• Were headquartered in one of the 50 states or the District of Columbia, and were both 

headquartered within metropolitan areas or were both headquartered outside of metropolitan areas:

– If both were headquartered in metropolitan areas, the headquarters of the banks were 

within 100 miles of each other.

– If both were headquartered outside of metropolitan areas, the headquarters of the banks 

were within 300 miles of each other.

• Asset size criteria:

– For acquired banks that had less than $100 million in assets, the asset size of the peer 

had to be within $50 million.

– For acquired banks that had $100 million in assets or more, the asset size of the peer had 

to be within 50 percent of the acquired bank’s asset size.

• Neither the acquired banks nor their peers had themselves purchased any other banks 

during the two years before the merger of the acquired bank.

Finally, peer banks must have continued to file Call Reports for at least one year following 

the acquisition of the bank of which they were peers.

Although our results indicate that statistically significant differences exist between acquired 

banks and their peers, this does not mean that acquisitions have caused such differences. 

For example, while we attempted to control for geographic differences in economic performance by ensuring that acquired banks and their peers were headquartered near each other, 

acquired banks may be likely to do more business in economically struggling areas relative 

to their peers.

20 For the FDIC’s definition of community bank, see Chapter 1 of the FDIC Community Banking Study (2012), 

https://www.fdic.gov/regulations/resources/cbi/study.html. 21 Lending specialty groups include commercial real estate, commercial and industrial, agricultural, mortgage, consumer, 

multi-specialist, and no lending specialty. See Chapter 5 of the FDIC Community Banking Study (2012), https://www.fdic.gov/

regulations/resources/cbi/study.html. 
2 0 1 7  •  Volume 1 1  • Number 4

52 FDIC QUARTERLY

Data We calculated flow variables over the four quarters ended one year before the acquisition. 

We also calculated five-quarter averages of assets, earning assets, and gross loans and leases 

based on the five quarters ended one year before the acquisition. We then divided the annual 

flow item by the appropriate average. For acquired banks with multiple peers, the peers’ 

financial data were aggregated to create one weighted average. The variables pretax return on 

assets, net interest margin, noninterest income, efficiency ratio, and net charge-off rate were 

constructed in this manner.

We measured stock variables as of one year before the acquisition and included the nonperforming asset ratio, Tier 1 leverage ratio, core deposit ratio, and loan-to-asset ratio. For 

acquired banks with multiple peers, the peers’ financial data were aggregated to create one 

weighted average.

Once we calculated financial ratios for each acquired bank and its aggregate peer, we calculated the difference between them. We performed a statistical test on these paired differences

to determine whether the acquired banks performed better or worse than their peers.

Statistical Test We used the sign test on the paired differences in the financial ratios described above to 

determine whether the performance of acquired banks was statistically different from the 

performance of their peers. The sign test is used to determine whether the distribution of 

data from one group differs from that of another, when the variable of interest does not 

follow a normal distribution and is also skewed. If the test shows that the distributions of 

data from acquired banks and peers are different, then we have reason to believe that their 

performance is different.22 For each test, our threshold for statistical significance is 5 percent.

22 See Dennis D. Wackerly, William Mendenhall III, and Richard L. Scheaffer, Mathematical Statistics With Applications, 7th ed., 

Brooks/Cole (2008).