First Quarter, 1991 

FDIC 

Division of Research 

& Statistics 

Don Inscoe 

(202) 898-3940 

Ross Waldrop 

(202) 898-3951 

The FDIC 

uarter1Y-_______L._W_il_lia_m_S_eid_m_a_n,_C_ha_irm_a_n 

anking Rofile 

COMMERCIAL BANKING PERFORMANCE - FIRST QUARTER, 1991 

• Commercial Banks Earn $5. 7 Billion In First Quarter 

• Real Estate Troubles Persist Along the East Coast 

• Commercial Banking Assets Shrink by $38 Billion 

Commercial banks reported net income of $5.66 billion 

for the first quarter of 1991 , more than the $1.1 billion 

earned in the fourth quarter of 1990, but a decline of 

8.8 percent from the $6.2 billion earned in last year's 

first quarter. Nonrecurring gains of $814 million were 56 

percent greater than a year earlier, and accounted for 

14 percent of industry net income. Higher loan-loss 

provisioning was the main reason for the decline in 

earnings. Banks set aside $7.1 billion for future losses 

in the first quarter, a 21 percent increase from the same 

period in 1990. Most of the increased provisioning 

activity took place at banks in the Northeast, Southeast 

and West regions, the only three regions whose banks 

reported a year-to-year decline in earnings. 

$ Billions 

8 

5.2 

4 

(4) 

(8) 

Chart A - Quarterly Net Income of 

FDIC-Insured Commercial Banks 

1987-1991 

D :Net Opera!!~ Income . . 

• : Secunties and '?111• Gains 

D :Rn,t Republic Effec! 

<12> .__.1___.,2...... 3...i..4.-.&.1__,_2_3..._4,._1...._,2..._.3.......4__.1__.2......3......4_..,1_, 

1987 1988 1989 1990 1991 

Industry profitability is down from a year ago. Banks' 

return on assets averaged 0.67 percent (annualized) 

for the quarter, compared to 0.76 percent in 1990. 

Earnings difficulties remained greatest among larger 

banks; of the 46 banks with more than $10 billion in 

assets, 24 reported lower earnings than a year ago, 

and one in five registered a net loss for the quarter. 

Their average return on assets was 0.43 percent, down 

from 0.74 percent for the first quarter of 1990, despite 

wider net interest margins. Banks in the Northeast, 

afflicted by rising levels of troubled assets, reported an 

average return on assets of 0.39 percent, the lowest of 

any region. 

Total assets of commercial banks fell by $38 billion 

during the first quarter as rising levels of troubled 

assets and a slow national economy limited industry 

growth. Over the past twelve months, commercial bank 

assets have increased by only 1 percent. This is the 

lowest 12-month asset growth rate since banks began 

reporting consolidated data in 1976. Real estate assets 

were the only category to show significant growth in the 

first quarter. 

Chart B - Quarterly Net Interest Margins of 

FDIC-Insured Commercial Banks 

Net Interest Margin (%) 1984-1991

5.0 

~ i; ~ "" 

' \., ~ 

4.5 ""I' 

' 

~~ 

"loo ~I; i.1io' /" "'~ i ........ Banks < $100 Mllfion """ ~ 

j~ 

4.0 

~" i;r-- 1,, ,~ i,,l111iii II~ ii- Ii.,. .. 11 "'"' 

I 

Banks

"'"> $100 Mllfion 13.99 l 3.5 12341234123412341234 123412341 

1984 1985 1986 1987 1988 1989 1990 '91 

Real estate loans, mainly for residential mortgages and 

commercial real estate, increased by $6.8 billion in the 

first three months of 1991, while banks' holdings of 

mortgage-backed securities and collateralized 

mortgage obligations grew by $12.5 billion. 

Commercial and industrial loans fell by $8.9 billion 

during the quarter, while consumer loans experienced 

seasonal shrinkage of $13.3 billion. Equity capital 

increased by $4.4 billion in the quarter. Coupled with 

the decline in assets, this meant an increase in the 

industry's average equity capital ratio to 6.66 percent 

from 6.46 percent at the end of 1990. 

Total interest revenues are 7 percent lower than a year 

ago, but interest expense fell by more than 13 percent, 

NEW DATA ON TROUBLED LOANS ARE PRESENTED ON PAGE 3. 

Noncurrent Rate on Construction & Development Loans Exceeds 13%. 

Over 22 Percent of Construction Loans in Northeast are Noncurrent. 

Almost 10 Percent of HLTs and More than 20 Percent of Loans to Foreign 

Governments are Noncurrent. 

For assistance contact: Section508@fdic.gov
.

so that net interest income is $1.3 billion higher. Net 

interest margins improved most at the larger banks. 

Banks with less than $100 million in assets had slightly 

narrower net interest margins than in the first quarter of 

last year. Noninterest income increased by $1.6 billion 

over the first quarter of 1990, while noninterest 

expense grew by $2.4 billion. About 16 percent of the 

year-to-year increase in noninterest expense is due to 

higher deposit insurance premiums, which were 

increased from 12 cents per hundred dollars of 

domestic deposits in 1990 to 19.5 cents for the first six 

months of 1991. 

Troubled assets increased by $10 billion in the first 

quarter. Noncurrent loans and leases grew by $7.2 

billion, while properties acquired through foreclosure 

were nearly $3 billion higher than at the end of 1990. 

Real estate loans accounted for $4.3 billion of the $7.2 

billion increase in noncurrent loans and leases. Total 

net charge-offs of $6.3 billion in the first quarter are 

about $400 million (6 percent) lower than a year earlier, 

although net charge-offs on real estate loans are up by 

$442 million, to $1.5 billion. Three-quarters of the net 

losses on real estate loans came from commercial real 

estate and construction and land development loans. 

New data collected for the first time in March show that 

troubled real estate loans are concentrated in 

commercial real estate and construction and 

development lending, and are higher at larger banks. 

The noncurrent rates for these categories of real estate 

lending are several times as high as the rates for home 

mortgage loans. 

Asset-quality problems continue for banks in the 

Northeast. Net charge-offs are $817 million lower than 

in the same period in 1990, but provisions for future 

losses are up by $766 million. Noncurrent loans and 

leases increased by $3.5 billion during the quarter, to 

6.3 percent of all loans and leases. Over 22 percent of 

the $45 billion in real estate construction and land 

development loans held by banks in the region were 

noncurrent at the end of the first quarter. Net income is 

almost one-fourth below the amount earned in last 

year's first quarter; if higher nonrecurring gains are 

omitted, net operating revenue is down by more than 

40 percent. 

Banks in the Southeast had a smaller earnings decline 

from year-ago levels. Net operating income is 26 

percent lower than in 1990, but higher nonrecurring 

gains limited the decline in net income to 15 percent. 

Both net charge-offs and provisioning for future loan 

losses are up by more than one-third, while noncurrent 

loans and leases are almost two-thirds higher than 12 

months ago. Real estate loans account for more than 

half of the increase in both net loan charge-offs and 

noncurrent loans. 

Banks in the West Region are the only group that show 

an increase in total assets during in the first three 

months of 1991. The $3.2 billion increase in assets 

was led by growth in real estate loans and temporary 

investments. Net income is 23 percent lower than in 

last year's first quarter, due to higher loss provisioning, 

increased noninterest expense and lower noninterest 

income. Net charge-offs are 76 percent above the level 

of a year ago. The net charge-off rate on real estate 

loans doubled. Noncurrent loans and leases increased 

by $1.6 billion during the quarter, while holdings of 

foreclosed property grew by $850 million. 

Twenty-eight commercial banks failed in the first 

quarter, compared to 36 failures in the first quarter of 

1990. The number of banks on the FDIC's "Problem 

List" fell during the quarter, from 1,012 at the beginning 

of the year to 996 at the end of March. However, as the 

numbers of failed and "Problem" banks have fallen, 

their average asset size has remained high. 

The commercial banking industry will continue to 

confront loan problems this year, concentrated in 

commercial and industrial loans and in commercial real 

estate loans. The rise in noncurrent loans reduces 

banks' interest income, and portends higher loan 

charge-offs in subsequent periods. Growing inventories 

of foreclosed properties will exert an upward pressure 

on overhead costs. The sluggish national economy will 

lengthen the time required for recovery from 

asset-quality problems. These difficulties remain 

concentrated among larger regional and money-center 

banks, particularly on the East Coast, but the high 

proportion of U.S. banking assets held by these 

institutions ensures that their difficulties will continue to 

depress national performance indicators. 

Chart C - Troubled Real Estate Asset Rates* By State 

March 31, 1991 

Central Northeast 

11 .48 

17.28 

16.50 16.38 

U2 

.. / . 0 .., 

~... ··.> "

V 

.,.. Hawall 0.70 

Troubled Real Estate Asset Raie: 

D Less Than 4% • Noncurrent Real Estate Loans Plus 

□ Between 4% and 8% Other Real Estate Owned As A Percent 

■ 8o/o or Higher Of Total Real Estate Loans Plus OREO. 

2 
DELINQUENCY, NONACCRUAL AND NET CHARGE-OFF RATES FOR NEW LOAN CATEGORIES,* 

MARCH 31, 1991 

ASSET SIZE GEOGRAPHIC DISTRIBUTION 

LESS NORTH· SOUTH· MID· SOUTH· 

ALL THAN $100MM $1B TO $10B OR EAST EAST CENTRAL WEST WEST WEST 

BANKS $1 OOMM TO $1B $10B MORE REGION REGION REGION REGION REGION REGION 

PERCENT OF LOANS 30-89 DAYS PAST-DUE 

All real estate loans 2.88 2.27 2.34 2.93 3.44 3.91 2.58 2.05 2.00 2.42 2.54 

Construction & development 5.70 2.87 3.85 5.55 6.98 7.62 4.68 3.94 2.93 2.28 5.32 

Commercial real estate 3.24 2.20 2.40 3.18 4.63 4.81 2.65 2.01 2.50 2.35 3.00 

Multifamily residential 4.04 2.20 2.60 3.82 6.07 5.27 4.49 2.88 2.33 3.56 3.57 

1-4 family residential 1.96 2.33 2.09 1.85 1.77 2.46 1.98 1.73 1.66 2.44 1.42 

Home equity lines of credit 1.15 1.99 1.78 0.98 0.96 1.46 1.02 1.09 1.45 3.02 0.63 

Commercial RIE loans not secured by real estate 5.03 5.59 6.52 4.17 5.10 5.92 3.07 4.46 2.98 2.90 6.72 

Highly leveraged transactions (HLTs) 0.67 NIA 4.12 0.77 0.59 0.61 0.55 0.61 2.86 0.02 0.93 

Loans to foreign governments and official institutions 0.16 NIA 0.00 0.15 0.16 0.18 0.01 0.06 0.00 0.00 0.12 

PERCENT OF LOANS 90 DAYS OR MORE PAST DUE 

All real estate loans 0.63 0.63 0.57 0.69 0.61 0.85 0.56 0.36 0.37 0.52 0.65 

Construction & development 1.22 0.94 1.12 1.44 1.09 1.44 0.95 0.40 0.36 0.66 1.53 

Commercial real estate 0.65 0.69 0.57 0.68 0.69 0.88 0.59 0.41 0.43 0.58 0.67 

Multifamily residential 0.64 0.58 0.55 0.54 0.84 1.15 0.81 0.37 0.29 0.22 0.28 

1-4 family residential 0.46 0.54 0.47 0.45 0.42 0.63 0.44 0.32 0.29 0.42 0.42 

Home equity lines of credit 0.34 0.59 0.42 0.31 0.28 0.54 0.28 0.20 0.26 0.69 0.11 

Commercial RIE loans not secured by real estate 0.88 1.91 1.87 0.42 0.63 1.40 0.59 0.87 0.64 0.57 0.53 

Highly leveraged transactions (HLTs) 0.28 NIA 0.11 0.41 0.25 0.08 0.61 0.66 0.08 0.01 0.63 

Loans to foreign governments and official institutions 0.23 NIA 0.00 0.01 0.25 0.31 0.03 0.00 0.00 0.00 0.00 

PERCENT OF LOANS IN NONACCRUAL STATUS 

All real estate loans 4.19 1.41 1.93 4.38 6.69 7.74 3.07 1.87 1.43 4.03 2.31 

Construction & development 11.91 2.76 5.19 11.08 16.66 20.74 7.79 6.71 3.63 7.58 6.21 

Commercial real estate 5.47 2.09 2.59 5.33 10.02 9.86 4.39 2.57 2.25 5.52 3.06 

Multifamily residential 6.81 2.18 2.96 4.61 13.96 16.02 3.82 2.01 2.66 5.13 2.19 

1-4 family residential 1.05 0.88 0.87 1.07 1.26 1.87 0.86 0.55 0.61 1.69 0.49 

Home equity lines of credit 0.41 0.67 0.54 0.36 0.35 0.65 0.29 0.36 0.34 0.97 0.10 

Commercial RIE loans not secured by real estate 7.28 5.81 7.06 6.94 8.18 13.81 3.62 6.65 4.68 3.63 2.82 

Highly leveraged transactions (HLTs) 9.55 NIA 5.10 8.49 9.95 10.81 4.50 9.15 9.95 6.87 9.07 

Loans to foreign governments and official institutions 20.45 NIA 21.80 8.80 21.25 22.83 2.39 23.45 0.00 8.75 11.21 

PERCENT OF LOANS CHARGED-OFF (NET, ANNUALIZED) 

All real estate loans 0.72 0.16 0.33 0.87 1.05 1.25 0.69 0.26 0.38 0.85 0.34 

Construction & development 2.39 0.29 0.87 2.49 3.29 3.94 2.39 0.78 0.96 2.41 1.03 

Commercial real estate 0.67 0.23 0.44 0.86 0.81 1.07 0.48 0.41 0.60 1.02 0.33 

Multifamily residential 1.36 0.36 0.91 0.95 2.38 1.16 3.82 0.26 1.42 2.19 0.55 

1-4 family residential 0. 17 0.14 0.14 0.24 0.13 0.26 0.16 0.07 0.18 0.39 0.07 

Home equity lines of credit 0.12 0.14 0.13 0.10 0.13 0.16 0.12 0.06 0.18 0.21 0.09 

Commercial RIE loans not secured by real estate 3.24 1.99 3.11 4.07 3.15 4.75 4.02 2.38 2.62 3.14 1.29 

Highly leveraged transactions (HLTs) 1.54 NIA 0.45 1.29 1.62 1.77 0.66 1.76 0.73 0.19 1.46 

Loans to foreign governments and official institutions 9.29 NIA 0.92 2.34 9.87 4.95 -1.39 0.47 -0.57 0.57 33.97 

Noncurrent loan rates can be calculated by adding the Percent of Loans 

90 Days or More Past Due plus the Percent of Loans in Nonaccual Status. 

* Reported for the first time in the March 31, 1991 Call reports. 

N/A - Not applicable 

3 
Table I. Selected Indicators, FDIC-Insured Commercial Banks 

1991* 1990* 1990 1989 1988 1987 1986 

Return on assets ......................... 0.67% 0.76% 0.50% 0.49% 0.82% 0.12% 0.63% 

Return on equity . ... . . ... ..... ... .. ...... 1027 11.96 7.73 7.78 13.30 2.00 9.94 

Equity capital to assets . .. . ... . . ...... . . . . 6.66 6.38 6.46 6.21 6.28 6.04 6.20 

Primary capital ratio ....... . . .. ......... . . 8.08 7.98 7.93 7.92 7.84 7.70 7.22 

Noncurrent loans and leases plus 

other real estate to assets . . . . . . . . . . ..... 3.17 2.33 2.90 2.26 2.14 2.46 1.94 

Net charge-offs to loans ................... 1.19 1.29 1.41 1.16 1.00 0.92 0.98 

Asset growth rate ........................ 1.01 5.32 2.72 5.37 4.36 2.01 7.71 

Net operating income growth .. ... . . .. .. .. .. -14.76 -20.83 5.33 -35.84 1905.16 -91.04 -20.65 

Percentage of unprofitable banks .. ... . . ..... 10.48 10.49 12.98 12.48 14.65 17.66 19.79 

Number of problem banks . ........ . .. . .... 996 1,044 1,012 1,092 1,394 1,559 1,457 

Number of failed/assisted banks ............ 28 36 159 206 221 201 144 

• Through March 31; ratios annualized where appropriate. 

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

(dollar figures in millions) 

Preliminary 

1st Qtr 4th Qtr 1st Qtr %Change 

1991 1990 1990 00:1-91:1 

Number of banks reporting ........ ... .... ........ ... . . .......... . 12,246 12,338 12,593 -2.8 

Total employees (full-time equivalent) ............... ..... .......... . 1,502,380 1,517,296 1,525,091 -1.5 

CONDfflON DATA 

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . $3,350,813 $3,388,914 $3,317,290 1.0 

Real estate loans ...... ........ ... ......... ............... .. 836,106 829,268 m,577 7.5 

Commercial & industrial loans .......... ..... . .. .. . . ...... ... . 606,403 615,306 623,061 -2.7 

Loans to individuals ..... . ....... ..... ... ..... ............ . . . 389,494 402,833 390,441 -0.2 

Farm loans . .. .. ....... .............. .. .. . ..... . ... .. . ... . . 32,385 33,334 29,731 8.9 

Other loans and leases . ... ..... .. . ... .. .. . . . .. .. .. . ... .. .. . . 224,265 228,442 237,230 -5.5 

Total loans and leases . ..... .. . ............................. . 2,088,653 2,109,183 2,058,040 1.5 

LESS: Reserve for losses ................................... . 54,979 55,464 52,637 4.4 

Net loans and leases . ............. . .. ...... . . ..... .. . .. . .. .. . . 2,033,674 2,053,718 2,005,403 1.4 

Temporary investments ... . . ............. . ... . ................ . 467,861 451,551 489,888 -4.5 

Securities over 1 year .... ......... . . ..... . ..... .. .... . ....... . 466,296 450,346 421,198 10.7 

All other assets .................... . .......... ... . .. .. .. .... . 382,981 433,299 400,001 -4.4 

3,350,813 3,388,914 3,317,290 1.0 Total Iiabilities and capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 

Noninterest-bearing 418,733 488,521 437,320 -4.3 deposits ..........• •. ....... •......... ... ... 2,189,629 2,161,475 2,106,017 4.0 Interest-bearing deposits ............ •.•... .. .......... . ..... .. . 

Other 378,722 384,784 426,799 -11.3 borrowed funds ............................ .. .......... . 23,989 23,821 19,250 24.6 Subordinated debt . .. .. . . ..... . . . ................ .... . .... . .. . 116,437 111,451 116,269 0.1 All other liabilities . . ....... .. ... ...... . ...... .... . .. .. ... .. .. . 

Equity 223,303 218,862 211,634 5.5 capital .. .. . .. ......... ... .. ......................... . . 

Goodwill 4,205 3,988 3,110 35.2 .. . .... .. ..... . ............ ... .. ...... . ... . .......... . 

Noncurrent 85,423 78,166 64,437 32.6 loans and leases .... .. . ... .. ... . .... .... . . .. . .... .... . 

Other 2,123 N/A N/A N/A noncurrent assets . ... .. .. ... .. ...... ...... ... .. ...... .... . 

Other 22,926 19,960 12,817 78.9 real estate owned ............ ...... . .... .. . .. . .. .. . . ..... . 1,305,327 1,306,645 1,244,965 4.8 Loan commitments and letters of credit . ..... ... .. .... ..... ... . . .. . 

Domestic 2,955,610 2,999,276 2,895,293 2.1 office assets .. . ............... . . . .. . ... .... . .. ....... . 395,203 389,638 421,996 -6.3 Foreign office assets ........... ..... ........................... . 2,303,189 2,356,551 2,216,607 3.9 Domestic office deposits ............... .. . . ....... . ............. . 305,172 293,445 326,731 -6.6 Foreign office deposits ......... . .. ... .. .... . . . ... . .. . .. . . .. .. .. . 2,967,831 2,955,615 2,916,489 1.8 Earning assets .... . .. . .... .... .. .... ... .. . .. ........ ..... ..... . 1,045,668 1,055,119 1,150,115 -9.1 Volatile liabilities .. . .............. ................ .. ........... . 

Preliminary 

INCOME DATA Full Year Full Year 1st Qtr 1st Qtr 

1990 1989 % Change 1991 1990 %Change 

Total interest income ...... ......... ..... . . $320,406 $317,320 1.0 $75,619 $81,342 -7.0 

Total interest expense ... ........ .. ..• . .. . . 204,920 205,122 -0.1 45,921 52,984 -13.3 

Net interest income ............. .. ..... . 115,487 112,197 2.9 29,698 28,359 4.7 

Provision for loan losses .. .. ... ....... . ... . 31,904 31,032 2.8 7,125 5,872 21.3 

Total noninterest income ...... . . . . . .. .... . . 55,100 51,076 7.9 14,887 13,335 11.6 

Total noninterest expense .. .. . .... . ....... . 115,570 108,090 6.9 30,216 27,762 8.8 

Applicable income taxes ........... ....... . 7,839 9,652 -18.8 2,394 2,370 1.0 

Net operating income . .... . ...... . .... . . . 15,273 14,500 5.3 4,850 5,690 -14.8 

Securities gains, net . .. . ... .. ... ......... . . 477 In) -40.4 463 118 291.4 

Extraordinary gains, net .... ... . . . .... ..... . 628 306 104.8 351 403 -12.8 

Net income ..................... . ..... . 16,378 15,606 4.9 5,665 6,211 -8.8 

Net charge-offs .. .. ..... . ...... .......... . 29,111 22,874 27.3 6,271 6,665 -5.9 

Net additions to capital stock ..... .... . .... . 2,168 1,491 45.4 898 663 35.4 

Cash dividends on capital stock ... .. ....... . 13,853 14,074 -1.6 3,486 3,214 8.4 

N/A-Not available 4 
Table Ill. First Quarter 1991 Bank Data (Dollar figures in billions, ratios in %) 

Asset Size Distribution Geographic Distribution 

EAST WEST Less $100 Million Greater 

FIRST QUARTER Preliminary than $100 to $1-10 than $10 Northeast Southeast Central Midwest Southwest West 

(The way it is ... ) All Banks Million $1 Billion Billion Billion Region Region Region Region Region Region 

Number of banks reporting .............. 12,246 9,176 2,701 323 46 1,054 1,940 2,695 2,937 2,157 1,463 

Total assets .......................... $3,350.81 $359.09 $652.27 $1,050.94 $1,288.51 $1,266.48 $506.51 $543.95 $225.92 $264.02 $543.93 

Total deposits ..... .. .... . ............ . 2,608.36 319.10 561.87 800.83 926.56 918.1 8 404.96 435.21 186.11 226.43 437.47 

Net income (in millions/ ....... ....... ... .. 5,665 1,065 1,388 1,817 1,396 1,244 767 1,275 651 473 1,255 

Percentage of banks losing money . . . . . . . 10.5% 11.3% 7.2% 13.3% 19.6% 22.1% 12.6% 5.1% 5.5% 11 .1% 18.2% 

Percentage of banks with earnings gains . . 52.4 51 .3 56.0 55.1 47.8 41.5 50.3 54.4 54.0 57.3 48.9 

Perfonnance Ratios (annualized) 

Yield on earning assets ....... . .... . .... 10.25% 9.91% 10.04% 10.19% 10.50% 10.66% 9.96% 9.66% 9.95% 9.54% 10.43% 

Cost of funding earning assets ...... ..... 6.22 5.59 5.64 5.82 7.07 7.08 5.79 5.83 5.70 5.66 5.53 

Net interest margin . ' ... ..... ' ........ . 4.02 4.32 4.40 4.38 3.43 3.58 4.17 4.02 4.25 3.87 4.89 

Noninterest income to earning assets ..... 2.02 0.97 1.39 2.19 2.51 2.54 1.47 1.42 2.07 1.70 2.05 

Noninterest expense to earning assets .... 4.09 3.74 3.97 4.20 4.17 4.28 3.83 3.52 3.93 4.11 4.56 

Net operating income to assets ...... . ... 0.58 0.78 0.81 0.62 0.37 0.24 0.51 0.90 1.11 0.58 0.89 

Return on assets . . . ... . . .. .. . .. . . .. . . 0.67 1.18 0.85 0.69 0.43 0.39 0.61 0.93 1.14 0.71 0.93 

Return on equity .. . . ' ................. 10.27 13.13 10.93 10.54 8.14 6.75 8.56 13.04 14.57 10.74 13.75 

Net charge-offs to loans and leases . . .... . 1.20 0.48 0.72 1.54 1.31 1.58 0.95 0.68 0.96 1.21 1.14 

Loan loss provision to net charge-offs ... .. 113.62 123.54 113.39 117.47 109.14 119.58 148.33 122.99 101 .45 84.54 81.94 

Condition Ratios 

Loss allowance to: 

Loans and leases . ................... 2.63% 1.73% 1.75% 2.50% 3.37% 3.63% 1.93% 1.73% 1.93% 2.63% 2.16% 

Noncurrent loans and leases .. . .... .. .. 64.36 77.31 73.27 69.24 58.89 57.21 69.53 76.12 97.24 80.99 70.76 

Noncurrent loans and leases plus 

oth-:ir real estate owned to assets .. . .. 3.17 1.77 2.10 3.08 4.17 4.66 2.38 1.77 1.57 2.76 2.70 

Equity capital ratio . . .. . .... . .. . . . . . . .. . 6.66 9.06 7.85 6.68 5.38 5.91 7.14 7.27 7.97 6.72 6.80 

Core capital (leverage) ratio .... ...... . .. . 6.36 9.04 7.64 6.36 5.01 5.62 6.86 7.05 7.75 6.50 6.35 

Net loans and leases to deposits ... . ..... 77.97 58.05 69.23 82.73 86.01 83.62 76.50 74.98 67.47 53.75 87.43 

Growth Rates (year-to-year) 

Assets ........ . .. . . .. .. . .... . .. .. . . . . 1.0% 5.6% 7.4% 5.5% -1 .0% -3.1% 3.2% 2.4% 6.8% 0.3% 6.1% 

Equity capital ................ .. .... . . . 5.5 4.3 7.9 7.0 7.7 2.7 3.6 6.0 8.7 6.3 11 .1 

Net interest income ...... . .. . ... . ... . .. 4.7 4.9 7.7 8.5 7.9 -0.0 5.8 7.5 6.8 12.5 6.5 

Net income ... . ............. . ......... -8.8 47.4 -1.3 14.0 -44.4 -23.5 -15.5 10.9 7.2 62.4 -22.9 

Noncurrent loans and leases plus 

other real estate owned ............... 37.5 10.2 35.2 67.2 36.5 46.6 77.8 40.5 14.5 -13.9 24.6 

Net charge-offs . .................. . .... -5.9 12.4 44.2 40.8 -28.4 -20.6 38.6 -35.2 11.8 2.3 76.2 

Loan loss provision ... ... .... ... .... .. . 21.3 0.8 24.1 6.7 68.6 25.5 36.4 6.3 6.8 -7.7 20.8 

PRIOR FIRST QUARTERS 

(The way it was . .. ) 

Return on assets ......... ........ 1990 0.76% 0.80% 0.88% 0.68% 0.74% 0.50% 0.75% 0.87% 1.15% 0.44% 1.28% 

........ . . ....... 1988 0.66 0.75 0.69 0.74 0.55 0.94 1.01 1.12 1.05 -2.43 0.82 

................. 1986 0.75 0.88 0.91 0.70 0.65 0.85 1.14 0.98 0.77 -0.09 0.58 

Equity capital ratio .... . ..... . ... .1990 6.38 8.99 7.63 6.49 4.94 5.57 7.10 7.02 7.83 6.35 6.49 

....... ..... . .... 1988 6.07 8.71 7.30 6.19 4.42 5.53 6.95 6.75 7.43 5.40 5.75 

. ................ 1986 6.34 8.67 7.25 6.14 5.01 5.80 6.79 7.04 7.52 6.94 5.69 

Noncurrent loans and leases plus 

other real estate owned to assets. 1990 2.33 1.79 1.80 1.94 3.06 3.08 1.38 1.29 1.46 3.21 2.30 

........ . ....... . 1988 2.48 2.16 1.92 1.81 3.43 2.39 1.06 1.26 1.87 6.29 3.26 

... .. ............ 1986 1.99 2.39 1.83 1.59 2.26 1.54 1.09 1.61 2.52 3.18 3.07 

Net charge-offs to loans and leases .1990 1.30 0.47 0.59 1.41 1.75 1.94 0.71 1.10 0.90 1.18 0.71 

................. 1988 0.88 0.65 0.61 0.96 1.02 0.69 0.69 0.78 1.38 2.16 0.79 

. . .... . .......... 1986 0.74 0.91 0.65 0.75 0.73 0.52 0.46 0.56 1.53 1.20 0.98 

REGIONS: Northeast - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New Yori<, Pennsylvania, 

Puerto Rico, Rhode Island, Vermont 

Southeast - Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia 

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

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

Southwest - Ar1<ansas, Louisiana, New Mexico, Oklahoma, Texas 

West - Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming 

5 
Table IV. Full Year 1990 Bank Data (Dollar figures in billions, ratios in %) 

Asset Size Distribution Geographic Distribution 

EAST WEST Less $100 Million Greater 

than $100 to $1-10 than $10 Northeast Southeast Central Midwest Southwest West 

All Banks Million $1 Billion Billion Billion Region Region Region Region Region Region 

Number of banks reporting . . .......... . . 12,338 9,249 2,715 325 49 1,068 1,956 2,716 2,954 2,179 1,465 

Total assets ...... . . . .. . .. . ... . .... ... $3,388.91 $359.45 $655.02 $1,044.38 $1,330.07 $1,290.43 $507.82 $551 .06 $231.26 $267.59 $540.76 

Total deposits . .. . ...... .. . ..... . . . .... 2,650.00 319.42 563.04 806.00 961.53 941.66 406.83 442.15 190.07 230.55 438.75 

Net income (in millions) . ... . .. . ......... 16,378 2,496 4,878 3,754 5,250 392 3,093 4,434 2,229 1,244 4,985 

Percentage of banks losing money .. .... . 13.0% 13.8% 9.2% 20.6% 24.5% 27.8% 16.8% 5.6% 5.8% 17.8% 18.0% 

Percentage of banks with earnings gains .. 55.2 54.8 57.6 46.8 53.1 40.2 56.2 58.7 54.2 57.4 56.7 

Perfonnance Ratios 

Yield on earning assets . .. . ........... . . 11.06% 10.37% 10.61 % 10.63% 11.82% 11 .78% 10.58% 10.45% 10.47% 10.12% 11.11% 

Cost of funding earning assets ........... 7.07 5.92 6.09 6.44 8.39 8.27 6.38 6.51 6.20 6.30 6.15 

Net interest margin . .. . . . . . . . . . . . . . . . . . 3.99 4.45 4.52 4.19 3.43 3.51 4.20 3.95 4.26 3.83 4.96 

Noninterest income to earning assets ... . . 1.90 0.98 1.18 1.90 2.52 2.22 1.45 1.37 2.14 1.57 2.16 

Noninterest expense to earning assets .... 3.99 3.79 3.76 3.99 4.16 4.06 3.76 3.45 4.07 4.03 4.54 

Net operating income to assets . .... . . ... 0.46 0.70 0.77 0.35 0.34 --0.02 0.60 0.83 1.01 0.44 0.92 

Return on assets . . . . . . .... . ..... . .. . . . 0.50 0.72 0.78 0.37 0.40 0.03 0.63 0.84 1.03 0.48 0.95 

Return on equity ..... .. . ... . .. . . .. ... . 7.73 7.86 10.06 5.81 7.83 0.55 8.86 11.90 13.15 7.35 14.67 

Net charge-offs to loans and leases ....... 1.41 0.69 0.83 1.37 1.86 1.99 0.90 0.90 0.99 1.38 1.16 

Loan loss provision to net charge-offs ..... 109.60 125.77 131.39 151 .80 79.64 106.68 154.06 104.78 113.00 90.96 101 .45 

Condition Ratios 

Loss allowance to: 

Loans and leases . .............. ... .. 2.63% 1.70% 1.71% 2.47% 3.39% 3.68% 1.80% 1.68% 1.89% 2.64% 2.19% 

Noncurrent loans and leases . ....... . .. 70.96 84.21 77.72 74.08 66.82 63.13 76.63 81.31 103.86 83.99 83.12 

Noncurrent loans and leases plus 

other real estate owned to assets ... . .. 2.90 1.69 1.93 2.80 3.77 4.35 2.02 1.58 1.43 2.71 2.30 

Equity capital ratio ... .. ...... ..... .... . 6.46 9.00 7.69 6.34 5.26 5.66 7.03 7.05 7.70 6.51 6.67 

Primary capital ratio ........ ... .... ... .. 7.93 9.91 8.62 7.69 7.27 7.71 8.01 7.94 8.98 7.67 8.08 

Net loans and leases to deposits ......... 77.50 58.24 69.50 80.68 85.91 82.79 76.64 74.25 66.87 53.62 87.38 

Growth Rates (year-to-yearj 

Assets ........ .... ..... ... ....•...... 2.7% 7.0% 9.5% 6.6% 3.1% --0.2% 4.9% 3.3% 8.0% 0.1% 6.6% 

Equity capital ... . ..... . .. . . .. . .. .. .... 6.9 5.0 10.3 6.4 11 .5 1.7 6.5 6.1 9.3 17.6 13.5 

Net interest income ...•.... . .. . . . .... . . 2.9 6.0 8.8 7.3 4.3 --0.6 7.3 2.8 0.6 10.8 4.2 

Net income ...................... .. ... 4.9 -3.6 -5.5 -44.3 256.9 N/M -23.0 -13.7 7.9 N/M 3.4 

Noncurrent loans and leases plus 

other real estate owned .. . . .. .... .... . 31.5 8.3 30.4 78.5 27.9 54.3 80.4 37.9 10.6 -38.5 8.6 

Net charge-offs ......... .. .... .. .... ... 27.3 3.3 28.9 47.5 28.1 55.3 61 .9 2.7 -15.1 -31 .7 9.1 

Loan loss provision . .. .. . .............. 2.8 7.0 37.1 63.5 -25.4 -3.9 84.8 30.3 -3.3 -49.4 12.1 

PRIOR FULL YEARS 

(The way it was .. . ) 

Return on assets .... ..... .. . . . . . . 1989 0.49% 0.77% 0.90% 0.64% 0.10% --0.02% 0.88% 1.00% 1.01% --0.08% 0.99% 

. . .... .. . . ....... 1987 0.12 0.57 0.74 0.53 --0.65 --0.13 0.93 0.44 0.67 --0.62 --0.01 

......... .. ...... 1985 0.70 0.66 0.84 0.87 0.51 0.78 1.01 0.82 0.69 0.43 0.34 

Equity capital ratio . .. . . . ......... 1989 6.21 8.92 7.47 6.12 4.86 5.55 6.93 6.86 7.61 5.54 6.26 

... . ....... . ..... 1987 6.04 8.55 7.29 6.14 4.41 5.43 6.81 6.52 7.46 6.06 5.77 

... . .... . . .. . ... . 1985 6.20 8.50 7.20 5.84 4.91 5.67 6.60 6.81 7.34 6.86 5.53 

Noncurrent loans and leases plus 

other real estate owned to assets . 1989 2.26 1.75 1.65 1.84 3.07 2.82 1.18 1.18 1.39 4.40 2.26 

. ... . .. . ........ .1987 2.46 2.10 1.80 1.81 3.47 2.44 1.04 1.27 1.87 5.82 3.28 

.... . ... . .. .... .. 1985 1.87 2.13 1.70 1.49 2.19 1.55 1.07 1.49 2.22 2.75 2.83 

Net charge-offs to loans and leases .1989 1.16 0.75 0.74 1.06 1.54 1.32 0.59 0.91 1.20 1.92 1.18 

. . . . .. . . ... . . . . .. 1987 0.92 1.15 0.88 0.94 0.89 0.67 0.69 0.68 1.57 1.99 1.07 

. . ... . ........... 1985 0.84 1.41 0.84 0.70 0.79 0.49 0.59 0.68 1.70 1.46 1.19 

NIM-not meaningful 

6 
SAVINGS BANK PERFORMANCE - FIRST QUARTER, 1991 

• BIF-lnsured Savings Banks Lose $170 Million in First Quarter 

• Assets Shrink by $1.4 Billion 

• Asset Quality Problems Are Concentrated in Commercial 

Real Estate and Construction Loans 

• Inventory of Foreclosed Property Increases by $1.2 Billion 

• Number of "Problem" Savings Banks Increases from 34 to 48 

BIF-insured savings banks lost $170 million in 

the first quarter of 1991 compared with first 

quarter 1990 losses of $257 million. During the 

fourth quarter of 1990, savings banks lost $1.2 

billion, contributing to record full-year 1990 

losses of $2.5 billion. Diminished first quarter 

losses are attributable to lower loan loss 

provisions and increased gains on the sale of 

securities. 

Twenty-seven percent of all BIF-insured 

savings institutions lost money during the first 

quarter, and 39 percent of the largest 

institutions - those with more than $1 billion in 

assets - were unprofitable. In the six New 

England states 31 percent of all BIF-insured 

savings banks were unprofitable and 70 

percent of the largest institutions lost money. 

Savings banks in New England reported a 

quarterly loss of $217 million, compared with a 

loss of $163 million in first quarter 1990. First 

quarter return on assets for the 341 New 

England institutions is a negative 0.79 percent. 

Overall, savings banks operating outside of 

New England were profitable. The 107 other 

Northeast savings banks - those outside of 

New England - barely broke even with an 

aggregate average return on assets of .05 

percent. All 15 institutions located outside of 

the Northeast were profitable during the first 

quarter with a combined return on assets of 

1.06 percent. 

Savings bank assets shrank by $1.4 billion 

during the quarter and were 7.5 percent lower 

than in first quarter of 1990. Construction and 

land development loans are down by $1 billion 

and 1-4 family residential loans decreased by 

$1.1 billion. Asset shrinkage offset net capital 

losses of $124 million, thus equity capital ratios 

held steady at 6.7 percent of total assets. 

A shift in funding away from high cost 

borrowings coupled with lower interest rates 

resulted in wider net interest margins compared 

with the previous quarter. Both noninterest 

overhead expense and noninterest income 

remained steady compared with the first 

quarter of the previous year, despite the 

substantial increases in troubled loans and 

other real estate owned. Higher deposit 

insurance premiums added over $35 million to 

noninterest expense during the quarter. 

Net charge-offs of $525 million were double the 

amount charged-off in the first quarter of 1990 

and exceed loan loss provisions ($482 million), 

reducing reserves against loan losses. 

Noncurrent loans increased $541 million since 

year-end 1990, below the $900 million increase 

during the previous quarter. Growth of 

noncurrent loans in New England slowed to 

under 2 percent during the quarter. Loss 

allowance coverage of troubled loans 

deteriorated moderately from the previous 

quarter. At the end of the first quarter of 1991, 

savings banks held 29.7 cents in reserves 

against each dollar of troubled loans, slightly 

lower than the 31.4 cents at the end of 1990. 

Other real estate owned - primarily foreclosed 

properties - increased nearly $1.2 billion in the 

first three months of 1991, an accelerating pace 

compared with the $789 million increase that 

occurred during the final quarter of 1990. Sixty 

percent of the increase occurred outside of the 

New England states. Impaired assets comprise 

5.7 percent of total assets, up from 5 percent at 

the end of the previous year and well above the 

rates for commercial banks. Overall, 5.7 percent 

of the industry's real estate loans are noncurrent, 

i.e., either delinquent at least 90 days or in 

nonaccrual status. However, the bulk of these 

asset quality problems are concentrated in 

commercial real estate and construction loans. 

While approximately 3 percent of residential 

loans were noncurrent at the end of the quarter, 

nearly 1 0 percent of commercial real estate 

loans and 26 percent of construction loans were 

noncurrent. 

Two institutions with combined assets of $1.3 

billion failed during the first three months of 

1991. The number of problem savings banks 

increased to 48 at the end of the first quarter of 

1991 from 34 as of December 31, 1990. 

Lower interest rates may improve net interest 

margins and help absorb credit losses. 

However, the higher levels of noncurrent loans 

and other real estate owned may increase losses 

in the near term. Additional savings bank failures 

are expected in the Northeast where losses from 

real estate assets have eroded capital. 

7 
Return on assets ......... ...... . . . .. . .. . 

Equity capital to assets .......... . ....... . 

Tangible net worth to assets ... .. ....... . . 

Noncurrent RE loans to total RE loans** .... 

Noncurrent loans and leases plus 

other real estate owned to assets** ... .. . 

Asset grow1h rate . . . . . .... . . ... ... . .. ... 

Deposit grow1h rate .. . .......... ..... .. . . 

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

Number of problem savings banks . . . ... . . . . 

Number of failed savings banks ...... ..... . 

* Through March 31 ; ratios annualized where appropriate. 

* * Excludes Federally-chartered Savings Banks before 1900. 

Table II. Aggregate Condition and Income Data, BIF-lnsured Savings Banks 

Table I. Selected Indicators, Savings Banks Insured by the FDIC Bank Insurance Fund (BIF) 

1991' 1900' 1900 1989 1988 

--0.27% --0.37% --0.94% --0.27% 0.44% 

6.65 6.99 6.66 7.06 7.44 

5.94 6.22 5.94 6.30 6.69 

5.70 4.00 5.32 3.14 1.67 

5.70 3.29 5.04 2.63 1.51 

-7.53 -1.67 -7.43 -1.52 8.52 

-5.32 1.31 -4.98 1.36 7.00 

463 483 469 489 492 

48 22 34 17 12 

2 10 1 0 

(dollar figures in millions) 

Number of savings banks reporting .......... . ........ . . . .... ..... . .. ... . 

CONDITION DATA 

Total assets ...... . . .. ... . . ......... ............... .. .... . .... .. ... . . 

Mortgage loans ............ ... ....... . .... . .. . . ... .. . .. .. ... ....... . 

1-4 family residential ..... . ........ .. ......... . .. . . . .............. . 

Construction and land development . .. .... . ... .. . . .• . ..... . ... ... ... . 

Commercial and multi-family . .. . ... . .... . ... .. ... .. . . ....... .. . . ... . 

All other loans and leases ... . .. . ... ...... . ...... .. ... . ... . ... ...... . . 

LESS: Reserves for losses ... . ..... . ............... .. ......... . .... . 

LESS: Other contra accounts ....... . ............ . .... . ... .. .. . .... . 

Net loans and leases . ........ . . . . . .. . .......... .... . . ............ . . . 

Mortgaged-backed securities . .... .... . .... .. .. ... ... .. ..... . . .... . ... . 

Other real estate owned .......................... . ........... ... ... . 

Goodwill .... . .... . .. . ... . . . . . ... .. .... .. ... .. .. . • . . . ...... . ..... .. 

All other assets ........................ . . . ..... . ........ . ... . . .. .. . 

Total liabilities and capital .... . . .... . ........... . ..... . ................ . 

Interest-bearing deposits ........ . ........... .. .. . .......... . ...... . . . 

Noninterest-bearing deposits . ........................................ . 

Other borrowed funds ... .. . .. . . ....... . .. .. . . ... . . ... .. .. . . ... . .... . 

Subordinated debt ..... . .. . .. . .. .... ........ . . ... . . ... . .. . ... .. .... . 

Other liabilities ...... .. ..................... .. . ... ................. . 

Equity capital . .. . . . ....... ... ........... . ... .... ... ... . .. . ..... .. . . 

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

Other noncurrent assets . . . . ....... .... .... . ....... .. . .. ......... .. . . . . 

Direct and indirect investments in real estate ...... . ............. . .. . ..... . 

INCOME DATA 

Total interest income . .... .. .............. . 

Total interest expense ... . . . .............. . 

Net interest income .. ..... .. .. ....... . . . 

Provision for loan losses ...... ... ..... . ... . 

Total noninterest income ............. . .... . 

Total noninterest expense ..... . . . ...... .. . . 

Securities gains, net ................. . .... . 

Applicable income taxes .... . . . .. ...... ... . 

Extraordinary gains, net .... ...... ......... . 

Net income .................... . .... .. . 

Net charge-offs ... . . . .. ..... ... ...... .... . 

N/A-Not available 

N/M-Not meaningful 

Full Year Full Year 

1900 1989 

$24,522 $26,435 

18,084 19,736 

6,438 6,700 

3,487 2,219 

1,255 1,355 

6,466 6,114 

-22 -36 

196 493 

11 35 

-2,468 -773 

2,189 NIA 

Preliminary 

1st Qtr 4th Qtr 

1991 1900 

463 469 

$257,682 $259,115 

156,709 159,049 

103,933 105,046 

7,788 8,800 

44,987 45,203 

20,664 21 ,509 

3,097 3,145 

830 928 

173,446 176,485 

25,302 26,323 

4,514 3,331 

1,584 1,624 

52,836 51,352 

257,682 259,115 

206,304 206,241 

5,988 6,300 

24,439 25,346 

675 683 

3,145 3,198 

17,132 17,256 

10,438 9,897 

36 NIA 

1,599 1,695 

Preliminary 

1st Qtr 

% Change 1991 

-7.2 $5,746 

-8.4 4,133 

-3.9 1,612 

57.2 482 

-7.4 314 

5.8 1,547 

NIM 72 

-60.2 138 

~-0 -1 

NIM -170 

NIA 525 

1987 

0.84% 

7.69 

6.73 

1.01 

0.95 

10.54 

5.81 

484 

16 

2 

1st Qtr 

1900 

483 

$278,654 

166,954 

108,899 

11,472 

46,583 

24,826 

2,318 

1,181 

188,281 

31,519 

1,538 

1,917 

55,398 

278,654 

218,143 

6,000 

30,ID> 

737 

3,413 

19,474 

7,688 

NIA 

1,855 

1st Qtr 

1900 

$6,456 

4,787 

1,669 

565 

307 

1,550 

3 

141 

21 

-257 

262 

1986 

1.08% 

7.41 

6.31 

1.02 

0.83 

15.40 

8.26 

472 

27 

0 

3⁄4Change 

00:1-91:1 

-4.1 

-7.5 

-6.1 

-4.6 

-32.1 

-3.4 

-16.8 

33.6 

-29.8 

-7.9 

-19.7 

193.5 

-17.4 

-4.6 

-7.5 

-5.4 

-1.5 

-20.7 

-8.4 

-7.9 

-12.0 

35.8 

NIA 

-13.8 

% Change 

-11.0 

-13.7 

-3.4 

-14.7 

2.5 

--0.2 

2161.9 

-1.8 

NIM 

NIM 

100.3 

8 
Table Ill. First Quarter 1991 Savings Bank Data (Dollar figures in billions, ratios in %) 

Geographic Distribution All 

Asset Size Distribution 

BIF-lnsured Less $100 Million Greater 

Savings than $100 to than 

Banks Million $1 Billion $1 billion 

FIRST QUARTER Preliminary 

Number of savings banks reporting . .. .......... . . . . . ..... . .. . ... 463 133 269 61 

Total assets .......... .... .. ........ . ..... .... .... . . ...... ' .. $257.68 $7.03 $87.71 $162.95 

Total deposits ..... ... .......... . ... .... .. ................... . 212.29 6.28 75.82 130.19 

Net income (in mil/Ions) . .... . . .... . .... .. ... .. ... . .... ... . . . ..... -170 -4 -58 -109 

Percentage of savings banks losing money ..... ...... ' .. .. '' .. ' .. 27.21% 30.08% 23.05% 39.34% 

Percentage of savings banks with earnings gains . ..... ..... . ...... 44.71 43.61 43.49 52.46 

Perfonnance Ratios (annualized) 

Yield on earning assets . . .. .. .. . ... .. . ... . .. .. . ...... .. .. . . . .. . 9.73% 9.82% 9.79% 9.70% 

Cost of funding earning assets ... ...... ... ' . ......... ' . .. .. .... 7.00 6.62 6.n 7.14 

Net interest margin ........................... . ..... . .. . .. ' . .. 2.73 3.20 3.01 2.56 

Net noninterest expense to earning assets .... .. . .. . ..... .. . . .. .. . 2.09 2.73 .2.42 1.88 

Return on assets . ... .. ... . ... ... ......... . ... .. •. . . . .. . ...... -0.27 -0.21 -0.26 -0.27 

Return on equity . .. ........ . .... .. .. ' . ......... .. . . ..... . .... -3.96 -2.56 -3.39 - 4.43 

Net charge-offs to loans and leases ..... . ... ' ............ '' ..... 1.19 0.69 0.94 1.35 

Loan loss provision to net charge-offs .. . ... . ........ . ..... . .. .. .. 91 .82 102.12 102.81 87.21 

Condition Ratios 

Loss allowance to: 

Loans and leases ............. .. ... . ... . . . . . . .. . . .. .. . .. ... . 1.76% 1.03% 1.58% 1.90% 

Noncurrent loans and leases .. . ..... .. .. .. .... . ..... . . . ...... 29.67 24.31 33.15 28.41 

Noncurrent loans and leases plus 

other real estate owned to assets .................. ' .. . ... . ... 5.70 4.05 5.21 6.04 

Noncurrent RE loans to total RE loans ............ . . .. ..... .. . . .. 5.70 4.21 4.63 6.37 

Equity capital ratio ....... . ..... . ... .. . .. .... ... .. . . .. .. . .... . . 6.65 8.22 7.70 6.02 

Core capital (leverage) ratio ........ .. . . ........ .. •. .. ........... 6.21 8.25 7.71 5.17 

Net loans and leases to deposits .... . ....... . .. . . . .. . ..... . . ... . 81 .70 77.36 80.51 82.61 

Growth Rates (year-to-yeatj 

Assets . . .. . .. . .... . . . .. . ..... . . . ... .. ..... . .. . .. . ........... -7.53% 4.43% 1.25% -6.96% 

Equity capital .......... . .. .. ........•....... . . . ..•....... .. . . -12.03 -1 .23 -9.23 -12.39 

Net interest income . .... ........ . ... .. . .. ... . .... . ... .. . .. . . .. -3.39 3.26 -1.01 -2.50 

Net income .............. . .. . . .. .......... . ............... .. . NIM NIM NIM NIM 

Net charge-offs .. ... . .. .. . . ... . .. . .. .. .. . .. .. .... ... . . . . .... . . 100.26 100.16 80.82 154.48 

Loan loss provision .............. . ..... .. ............ . ........ -14.70 17.99 12.13 -20.58 

New 

England 

341 

$109.61 

93.15 

-217 

31 .09% 

42.23 

9.88% 

7.06 

2.82 

2.51 

-0.79 

-11 .83 

1.74 

89.34 

2.21% 

35.99 

6.n 

5.83 

6.61 

6.58 

83.30 

-5.46% 

-19.64 

-8.37 

NIM 

104.29 

-7.99 

Other 

Northeast 

107 

$136.52 

111 .60 

16 

18.69% 

46.73 

9.58% 

6.95 

2.63 

1.82 

0.05 

0.71 

0.79 

96.20 

1.44% 

23.64 

5.11 

5.94 

6.57 

5.67 

78.81 

-9.51% 

-6.36 

-0.23 

NIM 

95.81 

-24.59 

Rest 

of U.S. 

15 

$11.55 

7.54 

30 

0.00% 

86.67 

10.19% 

7.04 

3.15 

1.29 

1.06 

13.32 

0.13 

129.36 

0.83% 

41.84 

2.49 

2.00 

8.01 

7.98 

104.81 

-2.49% 

4.18 

13.06 

40.35 

-7.81 

-26.75 

Geographic Distribution: New England -Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont 

Other Northeast - Delaware, Maryland, New Jersey, New Yori<, Pennsylvania 

Rest of U.S. - Alaska, Florida, Indiana, Oregon, Washington 

NIM - Not meaningful 

9 
Table IV. Full Year 1990 Savings Bank Data (Dollar figures in billions, ratios in %) 

Asset Size Distribution Geographic Distribution All 

FULL YEAR Preliminary 

Number of savings banks reporting .......... . . ... . .. .... ... . . .. . 

Total assets . . .. . . .. ......... .. . .. . .............. . . . . ...... . . 

Total deposits .................. .. . . .. . .. .. . .. . .... ...... . ... . 

Net income (in millions/ . ... . ..... . . .......... ... . . . ... . . . .. . ... . . 

Percentage of savings banks losing money . ...... ......... ... . .. . 

Percentage of savings banks with earnings gains .......... . .. ... . . 

Perfonnance Ratios 

Yield on earning assets .. .. . . ........................ . .. .. ... . . 

Cost of funding earning assets ..... . .... . ..... . .. . ... .. ... . . .. . 

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

Net noninterest expense to earning assets ..... . .... . .. .. .. . .. .. . . 

Return on assets ...... . ........... . . . ........ . . .......... ... . 

Return on equity ... . ... . .... . . ... . . . ......... .. . ....... .... . . 

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

Loan loss provision to net charge-offs ....... .. . . . ... . .... .. . ... . . 

Condition Ratios 

Loss allowance to: 

Loans and leases . .. .. . .... ... . ............... . . . .. ... . . . .. . 

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

Noncurrent loans and leases plus 

other real estate owned to assets . .. . .. .......... ..... .. . ... . . 

Noncurrent RE loans to total RE loans . .. . ....... . ........ . ..... . 

Equity capital ratio . .. .. ... . . .. . ... . ... . ......... ...... .. . . ... . 

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

Growth Rates (year-to-year) 

Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Net charge-offs* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Loan loss provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

BACKGROUND 

BIF-lnsured 

Savings 

Banks 

469 

$259.12 

212.63 

-2,468 

41 .58% 

24.73 

10.05% 

7.41 

2.64 

2.14 

-0.94 

-13.15 

1.20 

159.29 

1.76% 

31.78 

5.04 

5.32 

6.66 

83.00 

-7.43% 

-12.71 

-3.91 

N/M 

67.17 

57.16 

Less 

than $100 

Million 

134 

$6.91 

6.16 

-34 

38.81% 

27.61 

10.16% 

6.97 

3.18 

2.64 

-0.49 

-5.74 

0.89 

144.66 

0.97% 

24.38 

3.87 

3.97 

8.30 

79.76 

4.04% 

-2.67 

0.52 

N/M 

231.61 

195.67 

$100 Million 

to 

$1 Billion 

274 

$87.85 

75.60 

-763 

39.78% 

22.99 

10.24% 

7.15 

3.09 

2.41 

-0.88 

-10.34 

1.29 

145.48 

1.56% 

34.10 

4.70 

4.48 

7.80 

83.00 

2.62% 

-10.33 

0.48 

N/M 

151 .57 

97.37 

Greater 

than 

$1 billion 

61 

$164.35 

130.86 

-1,671 

55.74% 

26.23 

9.95% 

7.56 

2.38 

1.97 

-0.98 

-15.46 

1.16 

168.37 

1.91% 

31 .00 

5.27 

5.87 

5.98 

83.15 

-6.80% 

-14.25 

-3.50 

N/M 

73.97 

77.85 

New 

England 

346 

$110.86 

93.43 

-1,814 

46.82% 

18.50 

10.22% 

7.43 

2.79 

2.54 

-1.63 

-21 .38 

1.76 

148.09 

2.21% 

37.81 

6.22 

5.58 

6.64 

85.62 

-3.83% 

-20.05 

-9.62 

N/M 

71 .70 

40.29 

Other 

Northeast 

108 

$136.92 

111.69 

-717 

29.63% 

38.89 

9.88% 

7.38 

2.50 

1.87 

-0.51 

-7.62 

0.77 

180.25 

1.42% 

25.50 

4.31 

5.45 

6.58 

79.49 

- 10.51 % 

-7.14 

0.15 

N/M 

58.65 

96.63 

Rest 

of U.S. 

15 

$11.33 

7.51 

63 

6.67% 

66.67 

10.46% 

7.61 

2.85 

1.50 

0.54 

7.19 

0.23 

251.89 

0.82% 

53.67 

2.18 

1.54 

7.90 

102.70 

-2.56% 

2.76 

15.26 

21.06 

-3.93 

80.53 

The preceding tables present information on savings banks insured by the FDIC Bank Insurance Fund (BIF). In aggregate, these 463 

thrift institutions hold approximately 10 percent of all BIF-insured deposits. Information on thrift institutions insured by the FDIC Savings Association Insurance Fund (SAIF) is available from the Office of Thrift Supervision. SAIF-insured institutions are primarily savings 

and loans. 

The BIF-insured savings banks analyzed here differ from commercial banks in several ways: 

1. In general, savings banks hold a higher portion of home mortgages and other real estate loans. For example, while commercial banks 

have invested about a quarter of their assets in real estate loans, savings banks average over 60 percent in these loans. 

2. There are relatively few BIF-insured savings banks. While there are over 12,000 commercial banks, there are fewer than 500 savings banks. 

3. The average savings bank's asset size is $550 million, compared with $275 million for commercial banks. The largest BIF-insured savings bank has about $10 billion in assets; the largest commercial bank has over $150 billion. 

4. As the preceding tables show, most savings banks are located in the Northeast, especially in New England. In three of the six New 

England states (Connecticut, Massachusetts and New Hampshire), savings banks have a higher market share in real estate lending 

than commercial banks. Fifteen institutions with $11.6 billion in assets-less than 5 percent of the industry's assets-are located 

in other regions (nine in Washington and three in Indiana, while Alaska, Florida and Oregon each have one). 

Regardless of the differences described above, depositors in all BIF-insured institutions-both savings banks and commercial bankshave the same benefits and restrictions governing their FDIC deposit insurance protection. 

N/M - Not meaningful 

*These growth rates do not include Federally-chartered Savings Banks 

10 
Number of Commercial and Savings Banks on FDIC's "Problem List" 

1984 -1991 

Number of Banks 

2,000 

1 575 

1 484 1,500 1,406 

1 140 1,109 1,046 

1,000 

848 

500 

0 

12/84 12/85 12/86 12/87 12/88 12/89 12/90 03/91 

Assets of Commercial and Savings Banks on FDIC's "Problem List" 

1984-1991 

$ BIiiions 

$500 ,------------------------------------, 

408.8 

400 

358.5 352.2 

335.5 

300 

237.8 235.5 228.3 

200 

100 

0 

12/84 12/85 12/86 12/87 12/88 12/89 12/90 03/91 

11 
FDIC 

FIRST CLASS Federal Deposit Insurance Corporation MAIL Washington, DC 20429 Postage & 

Fees Paid OFFICIAL BUSINESS 

Penalty for Private Use, $300 FDIC

Permit No. G36 

Attn: Chief Executive Officer 

NOTES TO USERS 

COMPUTATION METHODOLOGY FOR PERFORMANCE AND CONDITION RATIOS 

The data on commercial banks and state-chartered savings banks were obtained from Call reports filed with the FDIC and Federal Reserve Board. Data on Federally-chartered 

savings banks (17 institutions as of March 31 , 1991) were obtained from Thrift Financial Reports filed with the Office of Thrift Supervision. Certain adjustments are made 

to the Thrift Financial Reports to provide closer conformance with Call report disclosure requirements. 

All income figures used in calculating performance ratios represent amounts for that period, annualized (multiplied by the number of periods in a year). 

Al l 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 periods in between, divided by the total number of periods). 

All asset and liability figures used in calculating the condition ratios represent amounts as of the end of the quarter. 

DEFINITIONS 

"Problem" Banks-Federal regulators assign to each financial institution a uniform composite rating, 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" banks 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 "4" or "5". 

Earning Assets-all loans and other investments that earn interest, dividend or fee income. 

Yield on Earning Assets-total interest, dividend and fee income earned on loans and investments as a percentage of average earning assets. 

Cost of Funding Earning Assets-total interest expense paid on deposits and other borrowed money as a percentage of average earning assets. 

Net Interest Margin-the difference between the yield on earning assets and the cost of funding them, i.e., the profit margin a bank earns on its loans and Investments. 

Return on Assets-net income (including securities transactions and nonrecurring items) as a percentage of average total assets. The basic yardstick of bank profitability. 

Return on Equity-net income as a percentage of average total equity capital. 

Loan Commitments and Letters of Credit-includes unused credit card commitments and overdraft plans, reflecting Call report revisions effective March 31, 1990. 

Net Charge-offs-total loans and leases charged off (removed from balance sheet because of uncollectibility) during the quarter, less amounts recovered on loans and leases 

previously charged off. 

Noncurrent Loans & Leases-the sum of loans past-due 90 days or more and loans in nonaccrual status. 

Other Real Estate Owned-primarily foreclosed property. Direct and indirect investments in real estate ventures are excluded where appropriate. 

Other noncurrent assets-debt securities and other assets (excluding loans, leases and other real estate owned) that are either past due at least 90 days or in nonaccrual 

status. Due to reporting differences, only defaulted debt securites are included for Federal Savings Banks. 

Core capital-common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated subsidaries, less goodwill and other ineligible intangible assets. El igible intangibles (including mortgage servicing rights) are limited to 100 percent of core capital for savings banks, to 50 percent of core capital for statechartered commercial banks that are not Federal Reserve members, and to 25 percent for National banks. 

Net Loans and Leases-total loans and leases less unearned income and the allowance for loan and lease losses. 

Temporary Investments-the sum of interest-bearing balances due from depository institutions, federal funds sold and resold, trading-account assets and investment securities 

with remaining maturities of one year or less. 

Volatile Liabilities-the sum of large denomination time deposits, foreign office deposits, federal funds purchased, and other borrowed money. 

Requests for copies of and subscriptions to the FDIC Quarterly Banking Profile should be made through the FDIC's Office of 

Corporate Communications, 550 17th Street N.W., Washington, D.C. 20429; telephone (202) 898-6996.