Federal Deposit Insurance Corporation

Washington, DC 20429-9990

OFFICIAL BUSINESS

PENALTY FOR PRII/ATE USE, $300

BULK RATE

MAIL

Postage &

Fees Paid

FDIC

Permit No. G36

Attention:

Chief Executive Officer 
Net interest margins widened for the second consecutivequarter, as average asset yields rose, and average

funding costs remained stable. Only the largest banks

— with assets greater than $10 billion —failed to

register margin improvement, as their average asset

yields experienced a larger decline than their average

funding costs. The increase in asset yields came as

banks reduced their securities holdings and increased

their loans, especially higher-yielding credit-card loans

and loans to commercial borrowers. On the liability

side of the balance sheet, banks were able to increase

the proportion of noninterest-bearing deposits, which

helped to reduce average funding costs.

Asset-quality indicators remained favorable. Although

net loan charge-offs of $3.8 billion were $574 million

higher than a year earlier, they remained modest by

historical standards, and the percentage of loans that

were noncurrent at the end of the quarter fell to an

all-time low of 1.11 percent. Improvements in asset

quality were evident in several of the main loan categories, and deterioration was concentrated in consumer loans, especially credit-card loans. Net

charge-offs of credit-card loans accounted for almost

two-thirds of all loans charged-off in the third quarter,

even as delinquent credit-card loans increased. Other

loans to individuals, including residential mortgages,

also showed increases in charge-offs and delinquencies. In contrast, delinquencies and charge-offs on

loans to commercial and industrial borrowers and on

commercial real estate loans fell during the quarter.

Quarterly Net Loan Charge-Off Rates

of loans 1992 -1996

3.0

z.o

iii

o.o

~ , ~ Loans to Individuals _ ..

.. .` ~ ~.

.•1 ~ ~

,./~ Real Estate

Other ~ / ...

1992 1993 1994 1995 1996

Banks added $3.9 billion in loan-loss provisions in the

third quarter, boosting their loan-loss reserves by $100

million. At the end of September, the industry's "coverage ratio" stood at $1.76 in reserves for every $1.00

in noncurrent loans, only slightly below the record level

of $1.77 set at the end of the previous quarter. At the

same time, the ratio of reserves to total loans fell to

1.96 percent, from 1.99 percent at midyear. These are

the only two periods since 1986 that the industry's

reserves-to-loans ratio has been below two percent.

Coverage Ratio' and Reserve Levels, 1992 - 1996

$ Billions Coverage Ratio (%)

,o0 200

BO

so

ao

zo

1 G ;7 4 1 'C :1 4 1 C :1 4 1 2 :1 4 1 'L :1

1992 1993 1994 1995 1996

'Loan-Loss reserves to Noncurrent Loans and Leases.

160

i zo

so

►o

Commercial banks' average capitalization reached its

highest level since 1941, as equity capital rose to 8.31

percent of total assets. Retained earnings accounted

for less than half of the $5.5-billion increase in equity

capital during the third quarter, as banks paid out 81

percent of their earnings in dividends to shareholders.

A year earlier, banks paid out only 50 percent of their

earnings in dividends. During the quarter, 827 banks

paid dividends in excess of their total earnings, with

the excess amounts being paid out of equity capital.

The conversion of equity into dividends at these banks

totaled $3.5 billion. Much of the increased dividends

is expected to go to support stock buy-back programs

by parent holding companies.

Gluarterly Noncurrent Loan Rates'

1992 -1996 of Loans

s.o

2.5

o.o

'-.~' ., Real Estate

c~i

~ ~~•

/ ~ Other ~ ~•.

Loans to Individuals ` ~ ~-------

1992 1993 1994 1995 1996

Loans past due 90 or more days ar in nonaccrual status.

FDIC Quarterly Banking Profile

FDIC-Insured Commercial Banks 2 Third Quarter 1996
The FASB announcement and guide also sought to provide further clarification of Statement 115, and correct

misinterpretations of the original pronouncement.

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, and other assets. Beginning

3/31/94, FASB Interpretation 39 limited the netting of related trading assets and liabilities, which had the effect of

increasing the amount of trading account assets reported.

All other liabilities —bank's liability on acceptances,

limited-life preferred stock, and other liabilities. Effective

3/31/94, includes revaluation losses on assets held in

trading accounts.

BIF-insured deposits (estimated) — the amount of deposits inaccounts ofless than $100,000 insured by the BIF.

For SAIF-member "Dakar" institutions, it represents the

adjusted attributable amount acquired from BIF members.

Capital category distribution —each institution's capital

category is calculated or estimated from its financial report

and does not reflect supervisory upgrades or downgrades:

Total Tier 1

(Percent) Rlsk-Based Risk-Based Tier 1 Tangible

Capital ` Capital' Leverage Equity

Well-capitalized >_10 and >_6 and >_5 —

Adequately

capitalized >_8 and >_4 and >_4 —

Undercapitalized >_6 and >_3 and >_3 —

Significantly

undercapitalized <6 or <3 or <3 and >2

Critically

undercapitalized — — — <2

'As a percentage of risk-weighted assets.

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 consolidatedsubsidiaries, less goodwill and other ineligible intangible assets. The amount of eligible intangibles (including

mortgage 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.

Derivative contracts, gross fair values (positive/negative) —are reported separately and represent the amount

at which a contract could be exchanged in a transaction

between willing parties, other than in a forced or liquidation

sale. If a quoted market price is available for a contract,

the fair value reported for that contract is calculated using

this market price. If quoted market prices are not available,

the reporting banks use the best estimate of fair value

based on quoted market prices of similar contracts or on

valuation techniques such as discounted cash flows. This

information is reported only by banks with assets greater

than $100 million.

Direct and indirect investments in real estate — excludes loans secured by real estate and property acquired

through foreclosure.

Earning assets —all loans and other investments that earn

interest or dividend income.

Estimated insured deposits —estimated amount of insured deposits (account balances less than $100,000).

The sum of all deposit balances in accounts of less than

$100,000 plus the number of accounts with balances

greater than $100,000 multiplied by $100,000.

Failed/assisted institutions — An institution fails when

regulators take control of the institution, placing the assets

and liabilities into a bridge bank, conservatorship, receivership, or another healthy institution. This action may

require the FDIC — orthe RTC—to provide funds to cover

losses. An institution is defined as "assisted" when the

institution remains open and receives some insurance

funds in order to continue operating.

FHLB adaances —borrowings from the Federal Home

Loan Bank (FHLB) reported by institutions that file a Thrift

Financial Report. Institutions that file a Call Report do not

report borrowings ("advances")from the FHLB separately.

Goodwill and other intangibles —intangible assets include mortgage servicing rights, purchased credit card

relationships and other identifiable intangible assets.

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.

Mortgage-backed securities —certificates of participation in pools of residential mortgages and collateralized

mortgage obligations issued or guaranteed by government-sponsored or private enterprises. Effective 3/31/94,

the full implementation of FASB 115 meant that a portion

of banks' mortgage-backed securities portfolio is now reported based upon fair (market) values; previously, all

mortgage-backed securities not held in trading accounts

were reported at either amortized cost or lower of cost or

market.

Net charge-offs —total loans and leases charged off (removed from balance sheet because of uncollectibiliry), 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 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).

Notes to Users

FDIC Quarterly Banking Profile

22 Third Quarter 1996
TABLE I-A. Selected Indicators, FDIC-Insured Commercial Banks

1996' 1995` 1995 1994 1993 1992 1991 Return on assets (%) ................................................. 1.19 1.19 1.17 1.15 1.20 0.93 0.53

Return on equfly (%) ................................................. 14.40 14.95 14.66 14.61 15.34 12.98 7.94

Core capital (leverage) ratio (%) ............................... 7.79 7.73 7.61 7.64 7.65 7.21 6.48

Noncurrent assets plus

other real estate owned to assets (°/,) ..................... 0.80 0.92 0.85 1.01 1.61 2.54 3.02 Net charg~o(is to loans (%) ...................................... 0.56 0.45 0.49 0,50 0.85 1.27 1.59

Asset growth rate (°/,) ................................................ 5.41 7.81 7.53 8.21 5.72 2.19 1.22

Net interest margin (%) ............................................. 4.27 4.31 429 4.36 4.40 4.41 4.11 Net operating income growth (%) .............................. 4.07 8.17 7.48 16.17 35.37 92.41 -0.63

Number of institutions reporting ................................ 9,586 10,052 9,940 10,451 10,958 11,462 11,921

Percentage of unprofitable institutions ...................... 3.75 3.23 3.52 3.97 4.89 6.85 11.60

Number of problem institutions .................................. 89 158 144 247 426 787 1,016

Assets of problem institutions (in billions) ................. $7 $20 $17 $33 $242 $408 $528

Number of failed/assisted institutions ........................ 5 6 6 11 42 100 108

'Through September 30, ratios annualized where appropriate. Asset growth rates are (or 12 months ending September 30.

TABLE II-A. A re ate Condition and Income Data FDIC-Insured Commercial Banks

(dollar f/gures in mi//Jons) Preliminary

3rd Quarter 2nd Quarter 3rd Quarter %Change

1996 1996 1995 95:3-96:3

Number of institutions reporting ............................................... 9,586 9,690 10,052 -4.6

Total employees (full-time equivalent) ..................................... 1,479,289 1,476,204 1,482,934 -0.3

CONDITION DATA

Total assets ............................................................................. $4,458,409 $4.396,978 $4.229,402 5.4 Loans secured by real estate ............................................ 1,115,701 1,103,338 1,070,938 4.2

Commercial &industrial loans ........................................... 698,718 685,410 647,346 7.9 Loans to individuals ........................................................... 548,744 537,482 518,477 5.8

Farm loans ......................................................................... 42,032 41,405 41,872 0.4

Other loans &leases ......................................................... 338,205 328,249 283,033 19.5 Less: Unearned income ..................................................... 5,581 5,625 6,053 -7.8

Total loans &leases ............................................................ 2,737,820 2,690,259 2,555,615 7.1 Less: Reserve (or losses ..................................................... 53,678 53,578 52,882 1.5

Net loans &leases ................................................................. 2,684,143 2,636,681 2,502,733 7.3

Securities ............................................................................... 799,675 806,487 818,746 -2.3

Other real estate owned ........................................................ 5,035 5,349 7,010 -28.2

Goodwill and other intangibles .............................................. 43,530 42,811 28,533 52.6

All other assets ...................................................................... 926,026 905,649 872,380 6.2

Total liabilities and capital ........................................................ 4,458,409 4,396,978 4,229,402 5.4

Nonintefest-bearing deposits ................................................. 628,388 604,731 556,375 12.9

Inleresl•bearing deposits ....................................................... 2,467,626 2,456,731 2,375,027 3.9

Othef bofrowed funds ............................................................ 723,301 690,507 676,591 6.9

Subordinated debl ................................................................. 48,502 47,815 43,724 10.9

All other liabilities ................................................................... 220,194 232,264 233,621 -5.8

Equity capital ......................................................................... 370,399 364,930 344,063 7.7

Loans and leases 30-89 days past due ................................... 34,766 33,572 31,173 11.5 Noncurrent loans and leases ................................................... 30,428 30,181 31,494 -3.4

Restructured loans and leases ................................................ 4,012 3,571 4,531 -11.5

Direct and indirect investments in real estate .......................... 561 573 621 -9,7

1-4 Family residential mortgages ............................................ 640,212 634,627 622,013 2.9

Mortgag2backed securities .................................................... 327,500 332,886 329,192 -0.5

Earning assets ......................................................................... 3,856,831 3,807,643 3,674,999 5.0

Long-term assets (5+ years) ................................................... 628,602 626,248 575,623 9.2

Volatile liabilities ...................................................................... 1,384,091 1,349,428 1,283,215 7.9

Foreign office deposits ............................................................ 451,054 462,031 449,649 0.3

Unused loan commilments ...................................................... 2,400,097 2,334,327 2,053,390 16.9

O((-balance-sheet derivatives .................................................. 20,385,196 19,596,445 18,241,567 11,8

Preliminary Preliminary

First Three First Three 3rd Quarter 3rd Quarter %Change

INCOME DATA Qtrs 1996 Qtrs 1995 %Change 1996 1995 95:3-96:3

Total interest income ............................................. $231,752 $225,080 3.0 $78,927 $77,735 1.5

Total interest expense ........................................... 111,168 109,925 1.1 37,480 38,342 -2.3 Net interest income ............................................. 120,584 115,155 4.7 41,447 39,393 5.2

Provision (or loan losses ....................................... 11,754 8,813 33.4 3,949 3,229 22.3

Total noninterest income ....................................... 68,752 60,766 13.1 22,932 21,700 5.7

Totalnonintereslexpense ..................................... 118,965 111,065 7.1 40,161 36,951 8.7

Securities gains (losses) ....................................... 720 460 56.4 168 151 11.3

Applicable income taxes ........................................ 20,802 19,664 5.8 7,277 7,239 0.5

F~ciraordinary gains, net ....................................... 90 24 273.8 0 1 -125.1

Net income .......................................................... 38,625 36,864 4.8 13,161 13,827 -4.8

Net charge-offs ...................................................... 11,078 8,263 34.1 3,798 3,224 17.8

Cash dividends ...................................................... 25,797 19,936 29.4 10,720 6,963 54.0

Net opefating_income .......................................... 38,036 36,547 4.1 13,072 13,723 -4.8

FDIC Quarterly Banking Profile

FDIC-Insured Commercial Banks 4 Third Quarter 1996
Number of FDIC-Insured "Problem" Institutions

1991 -1996

Number of Institutions

1,426

1,063

Savings Institutions

~ Commercial Banks

572 501 433 3~7

:c~ ._1.93 169 137 125

12/91 12/9212/93 3/94 6/94 9/94 12/94 3/95 6/95 9/95 12/95 3/96 6/96 9/96

Savings Institutions 410 276 146 118 95 84 71 71 64 59 49 42 38 36

Commercial Banks 1,016 787 426 383 338 293 247 215 190 158 144 127 99 89

Assets of FDIC-Insured "Problem" Institutions

1991 -1996

$ Billions

$819

$592

$334

Savings Institutions

~ Commercial Banks

$142 $113 $95 •:: 72 .~~ ~~~~ .:~,~ $66 $56 $37 $31 $27 $18 $15

12/91 12/9212/93 3/94 6/94 9/94 12/94 3/95 6/95 9/95 12/95 3/96 6/96 9/96

Savings Institutions 291 184 92 89 71 59 39 39 33 17 14 13 10 8

Commercial Banks 528 408 242 53 42 36 33 27 23 20 17 13 8 7

FDIC quarterly Banking Profile

All FDIC-Insured Institutions 20 Third Quarter 1996
TABLE IV-A. Third Gluarter 1996, FDIC-Insured Commercial Banks

Asset Size Distribution Geogra hic Di:

Less $100 Million $1 Billion Greater East

THIRD QUARTER Prelim/nary All than $100 to to than $10 North- South-

(The wayTt is...) Institutions Million $1 Billion $10 Billion Billion east east Contra

Number of institutions reporting ................ 9,586 6,334 2,854 330 68 752 1,587 2,122

Total assets (in billions) ............................. $4,458.4 $285.1 $694.3 $1,035.0 $2,444.1 1,687.4 $776.3 $704.9

Total deposits (in billions) .......................... 3,096.0 2462 576.5 701.1 1,5722 1,043.0 561.3 515.0

Net income (in millions) ............................. 13,160.6 896.2 2,182.5 3,353.3 6,728.6 4,670.6 2,256.5 2,114.5

of unprofitable institutions ..................... 4.4 5.1 2.9 3.0 2.9 4.7 5.0 3,8

of institutions with earnings gains......... 58.2 56.3 62.1 62.7 50.0 62.1 64.8 56.6

Performance Ratios (annualized, %)

Yield on earning assets ............................. 8.24 8.48

Cost of funding earning assets .................. 3.91 3.70

Net interest margin .................................... 4.33 4.78

Noninterest income to earning assets....... 2.40 1.26

Noninterest expense to earning assets..... 4.19 3.80

Net operating income to assets ................. 1.18 1.27

Return on assets ....................................... 1.19 1.27

Return on equity ........................................ 14.33 12.07

Net charge-offs to loans and leases.......... 0.56 0.28

Loan loss provision to net charge-offs...... 103.99 125.25

Growth Rates (year-to-year, %)

Nel interest income ................................... 5.21 -

Net income ................................................ -4.82 -

Nei charge-o(fs .......................................... 17.78 -

Loan loss provision ................................... 22.31 -

PRIOR THIRD QUARTERS

(The way it was ...

Return on assets (%) ........................1995 1.32 1.33

.........................................1993 1.28 1.20

.........................................1991 0.50 0.83

Net charge-offs to loans &leases (%)

.........................................1995 0.51 0.25

.........................................1993 0.75 0.30

.........................................1991 1.64 0.64

West

Mid- Southwest west West

2,425 1,687 1,013

$289.4 $327.9 $672.6

220.4 264.9 491.5

1,046.2 1,0042 2,068.6

2.8 4.1 8.6

56.3 54.1 59.4

8.44 8.79 7.90 8.05 8.30 8.18 8.51 8.00 8.72

3.67 3.89 4.03 4.24 3.85 3.92 3.86 3.46 3.45

4.77 4.90 3.87 3.81 4.45 4.26 4.65 4.54 5.27

1.54 2.58 2.72 2.97 1.89 1.66 2,54 1.93 2.59

3.93 4.34 4.26 4.36 3.91 3.54 4.16 4.16 4.89

1.27 1.31 1.09 1.11 1.16 1.19 1.46 1.24 1.23

1.27 1.31 1.11 1.12 1.17 1.21 1.46 1.23 1.24

13.50 14.61 14.85 15.10 13.75 14.10 16.49 13.97 12,93

0.40 1.03 0.42 0.59 0.44 0.45 0.71 0.34 0.77

126.92 113.59 84.88 89.62 140.48 119.02 111.03 104.88 92.01

- - 1.24 13.59 4.97 -0.31 6.54 6.54

- - - 1.63 0.99 -0.64 -11.13 0.74 -2324

- - - -11.94 67.83 43.44 40.45 46.30 37,48

- - -12.50 104.36 22.62 34.85 16.33 50.79

1.31 1.35 1.30 1.15 1.27 1.24 1.77 1.27 1.74

1.22 1.42 1.22 1.23 1 24 1.35 1.53 1.29 1.23

0.70 0.61 0.23 0.27 0.64 0.81 1, 02 0.72 0.27

0.35 0.73 0.48 0.71 0.29 0.33 0.54 0.24 0.61

0.51 0.88 0.85 1.06 0.40 0.52 0.47 0.25 0.97

0.93 1.68 2.18 2.52 121 0.89 1.05 0.97 1.29

Commercial Banks Make More Credit Available to Businesses and Consumers

Quarterly Increase in Loans Outstanding quarterly Increase in Unused Loan Commitments

($ Billions) ($ Billions)

sn.~ s~a.e

565.1

ss~.ssso.i ss~.o sse.z

Ssz.a sass sa~.s

$29.0 529.2

s~z.a

9/93 12/93 3/94 6/94 9/94 12/94 3195 6/95 9/9512/95 3/96 fv96 9/96

In the third quarter of 1996, commeraal and industrial loans Increased by 513.3 billion, real

estate loans increased by 512.4 Wllion and loans to individuals Increased by 511.3 blltlon.

9193 12/93 3/~J4 6194 9/94 12/94 3/95 6195 9/95 12/95 3P96 6/96 9/96

In tF~e third quarter of 1996, unused credit cab commilmenls increased by 540.1 bBllon and

unused commitments for loans la businesses Increased by $20.1 bili(on.

FDIC Quarterly Banking Profile

FDIC-Insured Commercial Banks 6 Third Quarter 1996
TABLE I-D. Selected Indicators, BIF-Member Depository Institutions*

(dollar figures in millions) 1996" 1995' 1995 1994 1993 1992

Number of institutions reporting ...................................... 9,884 10,356 10,242 10,759 11,291 11,813

Total assets ..................................................................... $4,733,592 $4,479,133 $4,576,161 $4,246,785 $3,949,694 $3,711,612

Total deposits .................................................................. 3,301,318 3,119,207 3,224,302 3,061,457 2,951,980 2,873,169

Number of problem institutions ........................................ 93 167 151 264 472 856

Assets of problem institutions (in billions) ........................ $8 $23 $20 $42 $269 $464

Number of failed assisted institutions .............................. 5 6 6 13 41 122

Assets of failed/assisted institutions (in billions) .............. $0.19 $0.76 $0.76 $1.43 $3.54 $44

`*As of September 30.

TABLE II-D. Selected Aggregate Condition and Income Data, BIF-Member Depository Institutions"

(dollar figures in millions) Preliminary

3rd Quarter 2nd Quarter 3rd Quarter %Change

1996 1996 1995 95:3-96:3

Number of institutions reporting ............................................... 9,884 9,987 10,356 -4.6

Commercial banks ................................................................. 9,502 9,605 9,971 -4.7

Savings institutions ................................................................ 382 382 385 -0.8

Total employees (full-time equivalent) ..................................... 1,538,166 1,533,752 1,537,649 0.0

CONDITION DATA

Total assets ............................................................................. $4,733,592 $4,666,288 $4,479,133 5.7

Loans secured by real estate, total ........................................ 1,280,142 1,259,867 1,206,511 6.1

1-4 Family residential .......................................................... 766,529 753,649 721,242 6.3

Multifamily residential property ............................................ 58,673 57,716 54,251 8.2

Commercial real estate ........................................................ 326,755 322,164 309,794 5.5

Construction, development and land ................................... 76,477 73,695 70,119 9.1

Commercial &industrial loans ............................................... 702,090 688,446 650,375 8.0

Reserve for losses ............................................................... 55,876 55,745 55,078 1.5

Total deposits ........................................................................ 3,301,318 3,260,836 3,119,207 5.8

Domestic deposits ................................................................. 2,850,333 2,798,864 2,669,559 6.8

Estimated insured deposits"` ............................................... 2,175,756 2,173,879 2,105,564 3.3

BIF-insured deposits (estimated) ......................................... 1,958,163 1,935,601 1,896,490 3.3

SAIF-insured deposits (estimated) ...................................... 217,593 238,278 209,074 4.1

Noncurrent loans and leases ................................................. 33,126 33,004 34,385 -3.7

Other real estate owned ........................................................ 5,719 6,198 8,034 -28.8

Equity capital ......................................................................... 393,879 388,069 366,035 7.6

CAPITAL CATEGORY DISTRIBUTION

Number of institutions:

Well capitalized ...................................................................... 9,721 9,843 10,192 -4.6

Adequately capitalized ........................................................... 151 128 146 3.4

Undercapitalized.................................................................... 8 11 12 -33.3

Significantly undercapitalized ................................................ 3 2 6 -50.0

Critically undercapitalized ...................................................... 1 3 0 NA

Total assets:

Well capitalized ...................................................................... $4,710,655 $4,648,515 $4,403,715 7.0

Adequately capitalized ........................................................... 21,966 16,322 73,518 -70.1

Undercapitalized .................................................................... 594 1,183 1,206 -50.7

Significantly undercapitalized ..................:............................ 339 120 694 -51.2

Critically undercapitalized ...................................................... 37 148 0 NA

Preliminary Preliminary

First Three First Three 3rd Quarter 3rd Quarter %Change

INCOME DATA Qtrs 1996 Qtrs 1995 %Chan e 1996 1995 95:3-96:3

Net interest income ............................................... $126,741 $120,776 4.9 $43,558 $41,267 5.6

Provision for loan losses ....................................... 12,170 9,184 32.5 4,113 3,369 22.1

Net income ............................................................ 40,193 38,375 4.7 13,574 14,388 -5.7

Ne#charge-offs ...................................................... 11,507 8,762 31.3 3,933 3,399 15.7

Number of institutions reporting net losses........... 357 333 7.2 406 354 14.7

rExcludes insured branches of foreign banks.

*" Includes changes made effective on October 1, 1996. Refer to Page 15 for details.

FDIC Quarterly Banking Profile

BIF-Member Depository Institutions 18 Third Quarter 1996
SAVINGS INSTITUTION PERFORMANCE -THIRD QUARTER, 1996

• A $3.5-Billion Special Assessment On SA/F Deposits Absorbs Most Of

Industry's Third-Quarter Net Income

• Industry Reports First Quarterly Loss Since The Third Quarter Of 1991

• Over 96 Percent of Thrifts Still Meet Highest Capital Standards After

Capitalizing The SA/F

Savings institutions paid a $3.5-billion special

assessment on SAIF deposits that reduced their

third quarter after-tax earnings by approximately

$2.2 billion. As a result of the special assessment

and extraordinary losses of $250 millions, savings

institutions reported an aggregate loss of $55 million for the quarter. Absent these one-time

charges, the industry's profitability remains strong.

Excluding the special assessment, net income

would have been approximately $2.2 billion, comparedwith net income of $2.6 billion in the previous

quarter. The net operating return on assets, which

also excludes extraordinary items, would have

been 0.89 percent, compared to the record 0.97

percent last quarter. Almost 65 percent of all

savings institutions reported losses for the third

quarter. Of the 340 savings institutions with no

SAIF deposits, only five percent were unprofitable

during the third quarter.

$ e~n~o~ quarterly Net Income, 1992 -1996

a

3

2

0

1

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

1992 1993 1994 1995 1996

~ Securities

~

end Other Geins, Net

~

Q Net Opereting Income

z.s 2.s 2.4 2.2

~.s

1.7

1.5 7.6 1.5

1.7 1.6 1.8 1.6 1.7 1.9 1.8

1.2 1.3

-0.1

Earnings through the first three quarters of 1996

amounted to $4.9 billion, which was $1.1 billion

below earnings for the first three quarters of 1995.

The special assessment on SAIF deposits largely

'World Savings and Loan of Oakland, California and Standard

Federal Bank of Troy, Michigan both reduced goodwill related to

acquisitions before 1982. Accounting rules permit an institution to

elect to write-off goodwill for acquisitions prior to 1982. These

thrifts had extraordinary charges of $245 million.

accounted for the $3.8-billion increase in noninterest expenses and a $1.3-billion reduction in incometaxes. Net interest income so far in 1996 is

$1.3 billion higher than in the same period last

year. A steeper yield curve has kept net interest

margins above last year's levels. Gains on the

sales of securities, at $646 million, were $295

million greater than in the first three quarters of last

year.

Equity capital, at $85 billion, fell just below the

amount held a year ago. Thrifts have continued to

pay dividends in excess of last year's level. Dividendsfor the first three quarters of 1996 were $1.7

billion greater than the amount paid during the first

three quarters of last year. During the third quarter, 316 thrifts paid out more in cash dividends than

they earned, with the difference coming out of

equity capital. The industry's equity capital declined by $916 million during the third quarter, with

most of the reduction attributable to these dividends. The equity capital ratio declined from 8.40

percent at midyear to 8.21 percent as of the end

of September. Even with this decline, over 96

percent of all savings institutions remain wellcapitalized and only four institutions were undercapitalized as of the end of the third quarter.

Savings institutions continued to support loan

growth by reducing their holdings of securities

and funding asset expansion primarily with

non-deposit borrowings. Industry assets grew by

$12.2 billion during the third quarter. Thrifts increased residential mortgage loans by $14.4 billion. Non-mortgage lending also increased.

Loans to individuals increased by $2.9 billion while

commercial and industrial loans increased by $1.1

billion. Thrifts shed $7.4 billion in investment securities, including $5 billion in mortgage-backed

securities. The industry was able to increase funding by $2.7 billion from deposits and by $7.6 billion

from other borrowed funds.

For 1997, deposit insurance premiums are expected todecline, on average, by 16.3 basis points

(down from an average of 23.4 basis points to

FDIC-Insured Savings Institutions

FDIC Quarterly Banking Profile

8 Third Quarter 1996
Estimated FDIC-Insured Deposits by Fund Membership and Type of Institution

September 30, 1996*

(dollar /figures !n mllllonsJ Number of Total Domestic Estimated Insured Deposits

Institutions Assets De osits" BIF SAIF Total

Private-Sector Commercial and Savings Institutions

FDIC-Insured Commercial Banks ......................................... 9,586 4,458,409 2,644,960 1,800,421 176,918 1,977,339

BIF-member ...................................................................... 9,502 4,419,551 2,616,081 1,790,324 163,989 1,954,313

SAIF-member ................................................................... 84 38,858 28,879 10,096 12,929 23,025

FDIC-Insured Savings Institutions ........................................ 1,961 1,035,214 730,143 179,035 511,293 690,328

OTS-Supervised Savings Institutions ............................... 1,376 777,670 530,290 43,254 458,836 502,091

BIF-member ................................................................... 27 109,012 73,867 32,573 38,378 70,951

SAIF-member' ............................................................... 1,349 668,658 456,423 10,681 420,459 431,139

FDIC-Supervised State Savings Banks ............................ 585 257,544 199,853 135,780 52,457 188,238

BIF-member ................................................................... 355 205,029 160,385 135,266 15,226 150,492

SAIF-member ................................................................ 230 52,515 39,468 515 37,231 37,746

Total Private-Sector Commercial and

Savings Institutions ........................................................ 11,547 5,493,623 3,375,103 1,979,455 688,212 2,667,667

BIF-member .......................................................................... 9,884 4,733,592 2,850,333 1,958,163 217,593 2,175,757

SAIF-member ....................................................................... 1,663 760,031 524,770 21,292 470,618 491,910

Other FDIC•Insured Institutions

U.S. Branches of Foreign Banks ......................................... 33 7,233 2,999 1,622 0 1,622

Total FDIC-Insured Institutions ............................................ 11,580 5,500,856 3,378,102 1,981,078 688,212 2,669,289

'Excludes one self-liquidating savings institution with less than ~1 million in SAIF-insured deposits.

"Excludes $451.0 billion in foreign olfice deposits, which are uninsured.

SAIF Assessment Base

December 31, 1989 -September 30, 1996

$ Billions

1000 r

RTC Conservatorships

0

(S eflllons) 12/89 12/90 12/91 12/92 12/93

Sasser Institutions 0.0 2.8 11.9 28.4 42.8

Oakar Deposits (BIF-members) 2.1 34.0 69.8 80.5 139.8

RTC Conservatorships 89.0 67.3 36.9 31.2 17.7

PJIOtherinstitulions 851.6 766.0 693.2 615.2 520.3

Total 942.8 870.0 811.7 755.3 720.7

'Includes changes matle effective October 7, 1996. Refer to page 15 for details.

Sasser Institutions

Oakar Deposits

(BIF-members)

12/94 12/95 3/96 6/96 9/96'

52.0 56.2 56.5 54.2 54.6

181.7 220.1 230.8 238.3 217.6

1.2 0.0 0.0 0.0 0.0

479.2 459.0 451.1 444.6 440.1

714.1 735.3 736.5 737.1 712.4

FDIC Quarterly Banking Profile

All FDIC-Insured Institutions 16 Third Quarter 1996
 

 

in reserves during 1996, provisions have not exceeded net charge-offs sufficiently to halt the erosion in the ratio of reserves to total loans.

Noncurrent loans have grown by over two percent

in the past 12 months. This has caused the reserve coverage ratio —loan loss reserves to noncurrent loans — to decline to 73 percent from 82

percent a year ago.

The number of savings institutions declined by 19

during the third quarter to 1,961 institutions. The

commercial banking industry absorbed six savings

institutions with $3.8 billion in assets during the

West

Washington

0.5

Montana

0.3

Oregon

o.s

Idaho ~ 0.3

Alaska

0.3

Arizona

o.z

Hawall ~ 1.B

~ Greater than 1.5%

Between .75%and 1.5%

Less than .75%

quarter and one thrift converted to a bank charter.

Industry consolidation absorbed 12 thrifts with $3

billion in assets. Two commercial banks with $427

million in assets converted to thrift charters. One

thrift in California with $34 ~r~illion in assets failed

during the third quarter. This was the first failure

for the industry in over a year. There were 17

mutual-to-stock conversions during the third quarterinvolving $4.8 billion in assets. The number of

"problem" institutions fell to 36 from 38 at the end

of the second quarter. Assets of "problem" institutions declined from $9.9 billion to $8.3 billion.

Noncurrent Loan Rates By State*

September 30, 1996

Midwest

it ~,.3

rNH: 7.2 .AMA: 1.0

'~ Re o.s

CT: 2.0

NJ: 2.3

DE: 7.2

MD: 1.7

DC: 3.3

Noncurrent loan rates represent the percentage of loans that

are past due 90 days or more or in nonaccrual status.

Puerto

Rico

1.7

FDIC Quarterly Banking Profile

FDIC-Insured Savings Institutions 10 Third Quarter 1996
TABLE V-B. Loan Pertormance, FDIC-Insured Savings Institutions

Asset Size Distribution Geo ra hic Distribution b Re ion Less $100 Million $1 Billion Greater East West September 30, 1996 All than $100 to to than $5 North- Soufh- Mid- South- Institutions Million $1 Billion $5 Billion Billion east east Central west west West

Percent of Loans 30-89 Days Past Due

All loans secured by real estate .............................. 1.22 1.91 1.23 1.18 1.17 1,28 1.49 1.09 1.31 1.22 1.18

Construction, development and land ..................... 1.18 1.28 1.17 1.62 0.69 1.07 1.15 1.56 2.26 0.54 1.12

Commercial real estate ......................................... 1.12 1.74 1.19 1.38 0.68 .1.31 1.50 1.07 0.88 0.93 0.83

Multifamily residential real estate .......................... 0.62 1.35 0.85 0.58 0.53 0.84 0.48 0.59 0.43 0.56 0.54

i-4 Family residential ............................................ 1.31 2.00 1.28 1.23 1.29 1.33 1.57 1.10 1.34 1.45 1.33

Commercial and industrial loans ............................. 1.12 2.28 1.67 1.12 0.39 1.14 1.52 1.35 1.51 0.76 0.73 Loans to individuals ................................................. 2,19 2,52 2.12 2.58 1.93 2.30 2.90 2.34 2.39 1.28 2.04

Percent of Loans Noncurrent

All real estate loans ................................................. 1.32 1.09 1.03 1.69 1.32 1.67 1.36 0.72 0.68 1.41 1.36

Construction, development and land ..................... 1.10 0.99 1.19 1.43 0.59 2.21 0.93 0.94 1.04 0.35 1.00

Commercial real estate ......................................... 2.23 1.90 1.81 2.99 1.97 3.10 0.85 1.84 1.28 1.22 1.88

Multifamily residential real estate .......................... 1.65 1.40 1.49 2.85 1.04 2.31 1.80 1.28 1.50 3.24 1.22

1-4 Family residential ............................................ 1.19 1.01 0.87 1,32 1.33 1.41 1.47 0.59 0.56 1.34 1.35

Commercial and industrial loans ............................. 1.90 2,76 2.89 1.98 0.68 2.48 2.44 1.70 1.67 1.03 0.66 Loans to individuals ................................................. 1.02 1.21 0.91 1.1 1 1.00 1.24 1.12 1.21 0.95 0.60 0.68

Percent of Loans Charged-of(

(net, annualized)

All real estate loans ................................................. 0.22 0.05 0.12 0.19 0.32 0.21 0.04 0.05 0.01 0.18 0.41

Construction, development and land ..................... 0.08 0.12 0.13 0.04 0.02 0.11 0.05 0.04 0.07 0.03 0.17

Commercial real estate ......................................... 0.41 0.11 0.30 0.43 0.55 0.54 0.04 0.09 -0.03 0.22 0.57

Multifamily residential real estate .......................... 0.52 0.19 0.40 0.42 0.62 0.31 0.37 0.17 0.02 0.02 0.77

1-4 Family residential ............................................ 0.18 0.04 0.07 0.12 0.28 0.16 0.03 0.04 0.01 0.21 0.33

Commercial and industrial loans ............................. 0.31 0.87 0.72 0.23 -0.09 0.35 0.61 0.39 0.24 0.27 0.01 Loans to individuals ................................................. 1.52 0.40 0.68 1.71 1.99 1.35 2.73 125 1.21 1.09 1.92

Loans Outstanding (in billions)

All real estate loans ................................................. $637.0 $28.9 $172.8 $146.1 $289.3 $203.3 $41.6 $112.2 $30,7 $41.6 $207.7

Construction, development and land ..................... 25.6 1.9 11.3 6.6 5.9 4.9 4.8 5.8 1.4 4.1 4.7

Commercial real estate ......................................... 50.4 2.3 17.6 15.7 14.8 21.4 3.8 6.1 2.4 4.4 12.5

Multifamily residential real estate .......................... 59.4 1.0 11.3 17.1 30.1 15.0 1.1 7.4 1.3 4.0 30.6

1-4 Family residential ............................................ 501.5 23.8 132.6 106.6 238.5 162.0 31.9 92.9 25.6 29.1 159.9

Commercial and industrial loans ............................. 14.5 0.6 4.4 5.0 4.4 7.1 1.2 1.8 0.8 1.1 2.6 Loans to individuals ................................................. 45.1 1.9 11.2 13.1 19.0 14.1 5.3 8.6 3.4 6.9 6.7

Memoranda:

Other Real Estate Owned (in millions)"`

All other real estate owned ...................................... $2,610.8 $86.0 $599.7 $659.1 $1,266.0 $870.3 $219.1 $165.1 $89.6 $197.4 $1,069.3

Construction, development and land ..................... 489.6 14.7 158.5 69.1 247,3 119.1 215.1 11.3 12.5 27.6 104.1

Commercial real estate ......................................... 556.1 24.4 181.0 199.6 151.0 261.4 30.6 51.9 47.7 38.1 126.5

Multifamily residential real estate .......................... 388.7 4.2 53.3 159.3 172.0 99.4 5.3 15.6 6.4 55.6 206.4

1-4 Family residential ............................................ 1,482.3 48.7 272.9 282,4 878.2 438.0 59.1 96.2 40.7 93.4 755.0

Troubled Real Estate Asset Rates*`•

(% of total RE assets)

All real estate loans ................................................. 1.72 1.38 1.37 2.13 1.75 2.09 1.88 0.87 0.97 1.88 1.86

Construction, development and land ..................... 2.96 1.77 2.57 2.45 4.59 4.54 5.20 1.13 1.92 1.02 3.13

Commercial real estate ......................................... 3.30 2.94 2.81 4.21 2.96 4.27 1.65 2.68 3.24 2.07 2,86

Multifamily residential real eslate .......................... 2.29 1.81 1.95 3.75 1.61 2.95 2.28 1.49 1.99 4.55 1.88

1-4 Famil residential ............................................ 1.49 1.21 1.08 1.58. 1.70 1.68 1.65 0.69 0.72 1.66 1.81 ~vunw~~en~ roan ~a~es represern ine percernage of loans in eacn category cnac are past aue au nays or more or inat are in nonaccruai status. "TFR filers report "All other real estate owned" net of valuation allowances, while individual categories of OREO are reported gross.

""Noncurrent real estate loans plus other real estate owned as a percent of total real estate loans plus OREO.

125

0

Insurance Fund Reserve Ratios*

Percent of Insured Deposits

1.32 1.32

Target Ratio ~.3o t.3i ~ Z~

1.15

0.70 0.69

0.51 0.55 o.a~

o.2e o.zt o.~~

0.00 0.00 0.01 0.04

-0.01

SAIF

~ BIF

-0.36

~ 

Fund Balance and Insured Deposits

(S Millions)

BIF Fund BIF-Insured SAIF Fund SAIF-Insured

Balance Deposits Balance Deposits

12/89 13,210 1,873,837 0 882,920

12/90 4,045 1,929,612 18 830,028

12/91 -7,028 1,957,722 101 776,351

12/92 -101 1,945,550 279 732,159

12/93 13,122 1,905,279 1,157 697,608

12/94 21.848 1,895,192 1,937 693,428

12/95 25,454 1,951,736 3,358 712,433

3196 25,748 1,959,470 3,650 716,271

6/96 25,828 1,957,927 3,914 713,186

9/96 26,106 1,981,078 8,722 688,212

'Insured deposit amounts are estimates. InGudes changes made effective

October 1, 1996. Refer to page 15 for details.

FDIC Quarterly Banking Profile

14 Third Quarter 1996

12189 12/90 12/91 12/92 12/93 1?J94 12/95 3/96 6/96 9/96'

FDIC-Insured Savings Institutions

 
TABLE III-B. First Three Quarters 1996, FDIC-Insured Savings Institutions 

Asset Size Distribution Geographic Distribution by Region

Less $100 Million $1 Billion Greater Easl Wesl

F/RST THREE QUARTERS Pre/Iminary All than $100 to to than $5 North- South- Mid- South-

(Thewayitis...) Institutions Million $1 Billion $56iilion Billion east east Central west west West Number of institutions reporting ................ 1,961 861 939 124 37 737 293 504 149 130 148

Total assets (in billions) ............................. $1,035.2 $44.9 $276.4 $253.8 $460.1 $361.7 $68.0 $174.4 $52.1 $77.9 $301.2

Total deposits (in billions) .......................... 730.1 37.3 216.3 181.5 295.1 279.4 51.4 126.4 35.6 45.7 192.7 Net income (in millions) ............................. 4,908.9 109.0 1,149.3 1,296.7 2,353.9 2,063.9 228.5 681.3 207.2 1,021.4 706.8

o(unpro(itable institutions ..................... 18.3 26.8 12.2 7.3 8.1 11,8 22,9 22.0 19.5 22.3 23.6

ofinstitutions with earnings gains.......,. 22.6 15.8 26.1 38.7 40.5 36.0 14.3 10.1 13.4 15.4 31.1

Performance Ratios (annualized, %)

Yield on earning assets ............................. 7.72 7.82 7.77 7.86 7.61 7.64 8.04 7.74 7.77 8.00 7.65

Cost of funding earning assets .................. 4.51 4.30 4.32 4.44 4.68 4.18 4.49 4.65 4.74 4.98 4.65 Net interest margin .................................... 3.21 3.52 3.45 3.42 2.93 3.47 3.56 3.10 3.03 3,03 3.OD

Noninterest income to earning assets....... 0.80 0.64 0.62 0.87 0.88 0.56 1.40 0.88 0.90 1.81 0.63

Noninteresi expense to earning assets..... 2.84 3.55 3.04 3.00 2.57 2.60 3.86 2.95 2,96 3.00 2,79 Net operating income to assets ................. 0.62 0.24 0.52 0.62 0.71 0.74 0.36 0.52 0.48 1.56 0.36 Return on assets ....................................... 0.65 0.33 0.57 0.71 0.69 0.79 0.47 0.53 0.53 1.76 0.32 Return on equity ........................................ 7.75 3.01 5.78 8.59 9.51 5.81 4.90 5.95 6.25 22.56 4.43 Net charge-offs to loans and leases.......... 0.31 0.09 0.17 0.31 0.42 0.29 0.34 0.14 0.14 0.32 0.45

Loan loss provision to net charge-offs...... 110.02 182.38 137.17 125.19 96.21 106.64 171.60 149.19 158.04 108.75 93.53

Condition Ratios (%)

Loss allowance to:

Loans and leases .................................... 1.07 0.81 1.01 1.26 1.03 1.15 1.12 0.79 0.85 1.12 1.15 Noncurrent loans and leases' ................. 73.00 63.51 84.42 68.97 70.85 65.42 69.18 94.74 109.36 77.30 72.54 Noncurrent assets plus

other real estate owned to assets........... 1.14 0.98 0.95 1.33 1.16 1.29 1.28 0.64 0.66 1.08 1.32

Noncurrent RE loans to RE loans ............. 1.32 1.09 1.03 1.69 1.32 1.67 1.36 0.72 0,68 1.41 1.36

Equity capital ratio ..................................... 8.21 10.96 9.75 8.13 7.08 8.88 9.24 8.70 8.33 7.95 6.92

Core capital (leverage) ratio ...................... 7.67 10.74 9.40 7.57 6.38 8.23 8.74 8.31 7.64 x.31 6.47 toss real estate assets to toss assets.. 79.94 72.91 75,30 78.55 84.22 75.51 73.48 80.64 77.72 78.04 8724

Gross 1-4 famil y mort 9 9 9 a es90 r. assets. 47.60 51.83 46.94 41.24 51.10 44.26 45.36 52,33 48.33 35.82 52.36 Net loans and leases to deposits .............. 93.20 82.02 84.47 88.37 103.97 79.21 89.08 95.55 95.55 101.54 110.63

Growth Rates (year-to-year, %)

Assets ....................................................... 1.03 - - - - 4.35 -8.60 3.84 -1.33 3.87 -2.20

Equity capital ............................................. -0.16 - - - - 4.55 -6.05 -0.48 -0.91 10.68 -7.20 Net interest income ................................... 6.02 - - - - 2.46 -1.86 5.63 4.10 20.79 10.60 Net income ......:......................................... -17.83 - - - - -7.31 -52.26 -39.96 -47.54 100.98 -42.60 Noncurrent assets plus

other real estate owned ........................... -5.20 - - - - -11.34 11.48 27.06 9.85 7.45 -10.51 Net charge-o(fs .......................................... -4.41 - - - - -20.76 112.80 4.54 -14.74 69.92 -7.49 Loan loss provision ................................... 12.37 - - - - 0.00 256.17 15.69 -30.06 28.86 3.05

PRIOR FIRST THREE QUARTERS*"

(The way it was , .. )

Number of institutions .......................1995 2,060 926 973 126 35 765 313 527 157

.......................................1993 2,297 1,061 1,063 146 27 835 378 575 169

.......................................1991 2, 606 1, 219 1,168 190 29 919 473 633 189

Total assets (in billions) .....................1995 $1,024.7 $47.4 $281.6 $266.9 $428.7 $346.7 $74.4 $167.9 $52.8

.......................................1993 1,006.0 53.9 307.7 311.5 332.9 333.6 90.1 151.4 50.7

.......................................1991 1,133.6 60.6 336.2 392.5 344.3 377.7 129.7 160.1 50.0

Return on assets (%) ........................1995 0.80 0.69 0.83 0,84 0.76 0.90 0.88 0.92 1.01

.......................................1993 0.71 1.05 0.99 0.61 0.51 0.61 0.92 1.03 1.03

.......................................1991 0.06 0.35 0.19 0.04 -0.11 -0.34 0.01 0.53 0.50

Nei charge-offs to loans &leases (% )

.......................................1995 0.34 0.14 0.16 0.38 0.45 0.39 0.15 0.14

.......................................1993 0.62 0.16 0.28 0.5D 1.09 0.64 0.24 0.11

.......................................1991 0.63 0.28 0.49 0.77 0.68 1.05 0.60 0.20

Noncurrent assets plus

OREO to assets (%)...............1995 1.21 1.02 1.08 1.38 1,22 1.51 1.05 0.52

.......................................1993 2.44 1.65 2.00 2.56 2.85 3.12 1.67 0.78

.......................................1991 3.93 2.34 3.21 4.63 4.11 5.13 3.65 1.40

Equity capital ratio (%) ......................1995 8.31 10.62 9.60 8.43 7.12 8.87 8,99 9,08

.......................................1993 7.76 9.19 8.53 7.48 7.07 7.89 8.04 8.45

.......................................1991 6.08 7.71 6.69 5.61 5.73 6.28 5.80 6.66

`Beginning with June 1996, TFR filers report noncurrent loans net of specific reserves. Accordingly, specific reserves have been subtracted from reserves, beginning with June 1996, to make the ratio more closely comparable to prior periods.

"Data between 1989 and 1995 do not include Resolution Trust Corporation conservatorships. Excludes one self-liquidating institution.

138 160

149 191

166 226

$75.0 $307.9

58.9 321.4

67.1 348.9

0.93 0.54

1.65 0.40

0.42 0.15

0.17 D.21 0.48

0,15 0.33 0.99

0.25 0.42 0.46

0.59 1.04 1.44

0.90 2.77 2.90

1.83 8.47 3.31

8.29 7.47 7.30

7.70 6.93 7.37 F 77 '2 AO L.` 7A

FDIC Quarterly Banking Profile

FDIC-Insured Savings Institutions 12 Third Quarter 1996
TABLE III-B. First Three Quarters 1996, FDIC-Insured Savings Institutions 

Asset Size Distribution Geographic Distribution by Region

Less $100 Million $1 Billion Greater Easl Wesl

F/RST THREE QUARTERS Pre/Iminary All than $100 to to than $5 North- South- Mid- South-

(Thewayitis...) Institutions Million $1 Billion $56iilion Billion east east Central west west West Number of institutions reporting ................ 1,961 861 939 124 37 737 293 504 149 130 148

Total assets (in billions) ............................. $1,035.2 $44.9 $276.4 $253.8 $460.1 $361.7 $68.0 $174.4 $52.1 $77.9 $301.2

Total deposits (in billions) .......................... 730.1 37.3 216.3 181.5 295.1 279.4 51.4 126.4 35.6 45.7 192.7 Net income (in millions) ............................. 4,908.9 109.0 1,149.3 1,296.7 2,353.9 2,063.9 228.5 681.3 207.2 1,021.4 706.8

o(unpro(itable institutions ..................... 18.3 26.8 12.2 7.3 8.1 11,8 22,9 22.0 19.5 22.3 23.6

ofinstitutions with earnings gains.......,. 22.6 15.8 26.1 38.7 40.5 36.0 14.3 10.1 13.4 15.4 31.1

Performance Ratios (annualized, %)

Yield on earning assets ............................. 7.72 7.82 7.77 7.86 7.61 7.64 8.04 7.74 7.77 8.00 7.65

Cost of funding earning assets .................. 4.51 4.30 4.32 4.44 4.68 4.18 4.49 4.65 4.74 4.98 4.65 Net interest margin .................................... 3.21 3.52 3.45 3.42 2.93 3.47 3.56 3.10 3.03 3,03 3.OD

Noninterest income to earning assets....... 0.80 0.64 0.62 0.87 0.88 0.56 1.40 0.88 0.90 1.81 0.63

Noninteresi expense to earning assets..... 2.84 3.55 3.04 3.00 2.57 2.60 3.86 2.95 2,96 3.00 2,79 Net operating income to assets ................. 0.62 0.24 0.52 0.62 0.71 0.74 0.36 0.52 0.48 1.56 0.36 Return on assets ....................................... 0.65 0.33 0.57 0.71 0.69 0.79 0.47 0.53 0.53 1.76 0.32 Return on equity ........................................ 7.75 3.01 5.78 8.59 9.51 5.81 4.90 5.95 6.25 22.56 4.43 Net charge-offs to loans and leases.......... 0.31 0.09 0.17 0.31 0.42 0.29 0.34 0.14 0.14 0.32 0.45

Loan loss provision to net charge-offs...... 110.02 182.38 137.17 125.19 96.21 106.64 171.60 149.19 158.04 108.75 93.53

Condition Ratios (%)

Loss allowance to:

Loans and leases .................................... 1.07 0.81 1.01 1.26 1.03 1.15 1.12 0.79 0.85 1.12 1.15 Noncurrent loans and leases' ................. 73.00 63.51 84.42 68.97 70.85 65.42 69.18 94.74 109.36 77.30 72.54 Noncurrent assets plus

other real estate owned to assets........... 1.14 0.98 0.95 1.33 1.16 1.29 1.28 0.64 0.66 1.08 1.32

Noncurrent RE loans to RE loans ............. 1.32 1.09 1.03 1.69 1.32 1.67 1.36 0.72 0,68 1.41 1.36

Equity capital ratio ..................................... 8.21 10.96 9.75 8.13 7.08 8.88 9.24 8.70 8.33 7.95 6.92

Core capital (leverage) ratio ...................... 7.67 10.74 9.40 7.57 6.38 8.23 8.74 8.31 7.64 x.31 6.47 toss real estate assets to toss assets.. 79.94 72.91 75,30 78.55 84.22 75.51 73.48 80.64 77.72 78.04 8724

Gross 1-4 famil y mort 9 9 9 a es90 r. assets. 47.60 51.83 46.94 41.24 51.10 44.26 45.36 52,33 48.33 35.82 52.36 Net loans and leases to deposits .............. 93.20 82.02 84.47 88.37 103.97 79.21 89.08 95.55 95.55 101.54 110.63

Growth Rates (year-to-year, %)

Assets ....................................................... 1.03 - - - - 4.35 -8.60 3.84 -1.33 3.87 -2.20

Equity capital ............................................. -0.16 - - - - 4.55 -6.05 -0.48 -0.91 10.68 -7.20 Net interest income ................................... 6.02 - - - - 2.46 -1.86 5.63 4.10 20.79 10.60 Net income ......:......................................... -17.83 - - - - -7.31 -52.26 -39.96 -47.54 100.98 -42.60 Noncurrent assets plus

other real estate owned ........................... -5.20 - - - - -11.34 11.48 27.06 9.85 7.45 -10.51 Net charge-o(fs .......................................... -4.41 - - - - -20.76 112.80 4.54 -14.74 69.92 -7.49 Loan loss provision ................................... 12.37 - - - - 0.00 256.17 15.69 -30.06 28.86 3.05

PRIOR FIRST THREE QUARTERS*"

(The way it was , .. )

Number of institutions .......................1995 2,060 926 973 126 35 765 313 527 157

.......................................1993 2,297 1,061 1,063 146 27 835 378 575 169

.......................................1991 2, 606 1, 219 1,168 190 29 919 473 633 189

Total assets (in billions) .....................1995 $1,024.7 $47.4 $281.6 $266.9 $428.7 $346.7 $74.4 $167.9 $52.8

.......................................1993 1,006.0 53.9 307.7 311.5 332.9 333.6 90.1 151.4 50.7

.......................................1991 1,133.6 60.6 336.2 392.5 344.3 377.7 129.7 160.1 50.0

Return on assets (%) ........................1995 0.80 0.69 0.83 0,84 0.76 0.90 0.88 0.92 1.01

.......................................1993 0.71 1.05 0.99 0.61 0.51 0.61 0.92 1.03 1.03

.......................................1991 0.06 0.35 0.19 0.04 -0.11 -0.34 0.01 0.53 0.50

Nei charge-offs to loans &leases (% )

.......................................1995 0.34 0.14 0.16 0.38 0.45 0.39 0.15 0.14

.......................................1993 0.62 0.16 0.28 0.5D 1.09 0.64 0.24 0.11

.......................................1991 0.63 0.28 0.49 0.77 0.68 1.05 0.60 0.20

Noncurrent assets plus

OREO to assets (%)...............1995 1.21 1.02 1.08 1.38 1,22 1.51 1.05 0.52

.......................................1993 2.44 1.65 2.00 2.56 2.85 3.12 1.67 0.78

.......................................1991 3.93 2.34 3.21 4.63 4.11 5.13 3.65 1.40

Equity capital ratio (%) ......................1995 8.31 10.62 9.60 8.43 7.12 8.87 8,99 9,08

.......................................1993 7.76 9.19 8.53 7.48 7.07 7.89 8.04 8.45

.......................................1991 6.08 7.71 6.69 5.61 5.73 6.28 5.80 6.66

`Beginning with June 1996, TFR filers report noncurrent loans net of specific reserves. Accordingly, specific reserves have been subtracted from reserves, beginning with June 1996, to make the ratio more closely comparable to prior periods.

"Data between 1989 and 1995 do not include Resolution Trust Corporation conservatorships. Excludes one self-liquidating institution.

138 160

149 191

166 226

$75.0 $307.9

58.9 321.4

67.1 348.9

0.93 0.54

1.65 0.40

0.42 0.15

0.17 D.21 0.48

0,15 0.33 0.99

0.25 0.42 0.46

0.59 1.04 1.44

0.90 2.77 2.90

1.83 8.47 3.31

8.29 7.47 7.30

7.70 6.93 7.37 F 77 '2 AO L.` 7A

FDIC Quarterly Banking Profile

FDIC-Insured Savings Institutions 12 Third Quarter 1996
 

TABLE V-B. Loan Pertormance, FDIC-Insured Savings Institutions

Asset Size Distribution Geo ra hic Distribution b Re ion Less $100 Million $1 Billion Greater East West September 30, 1996 All than $100 to to than $5 North- Soufh- Mid- South- Institutions Million $1 Billion $5 Billion Billion east east Central west west West

Percent of Loans 30-89 Days Past Due

All loans secured by real estate .............................. 1.22 1.91 1.23 1.18 1.17 1,28 1.49 1.09 1.31 1.22 1.18

Construction, development and land ..................... 1.18 1.28 1.17 1.62 0.69 1.07 1.15 1.56 2.26 0.54 1.12

Commercial real estate ......................................... 1.12 1.74 1.19 1.38 0.68 .1.31 1.50 1.07 0.88 0.93 0.83

Multifamily residential real estate .......................... 0.62 1.35 0.85 0.58 0.53 0.84 0.48 0.59 0.43 0.56 0.54

i-4 Family residential ............................................ 1.31 2.00 1.28 1.23 1.29 1.33 1.57 1.10 1.34 1.45 1.33

Commercial and industrial loans ............................. 1.12 2.28 1.67 1.12 0.39 1.14 1.52 1.35 1.51 0.76 0.73 Loans to individuals ................................................. 2,19 2,52 2.12 2.58 1.93 2.30 2.90 2.34 2.39 1.28 2.04

Percent of Loans Noncurrent

All real estate loans ................................................. 1.32 1.09 1.03 1.69 1.32 1.67 1.36 0.72 0.68 1.41 1.36

Construction, development and land ..................... 1.10 0.99 1.19 1.43 0.59 2.21 0.93 0.94 1.04 0.35 1.00

Commercial real estate ......................................... 2.23 1.90 1.81 2.99 1.97 3.10 0.85 1.84 1.28 1.22 1.88

Multifamily residential real estate .......................... 1.65 1.40 1.49 2.85 1.04 2.31 1.80 1.28 1.50 3.24 1.22

1-4 Family residential ............................................ 1.19 1.01 0.87 1,32 1.33 1.41 1.47 0.59 0.56 1.34 1.35

Commercial and industrial loans ............................. 1.90 2,76 2.89 1.98 0.68 2.48 2.44 1.70 1.67 1.03 0.66 Loans to individuals ................................................. 1.02 1.21 0.91 1.1 1 1.00 1.24 1.12 1.21 0.95 0.60 0.68

Percent of Loans Charged-of(

(net, annualized)

All real estate loans ................................................. 0.22 0.05 0.12 0.19 0.32 0.21 0.04 0.05 0.01 0.18 0.41

Construction, development and land ..................... 0.08 0.12 0.13 0.04 0.02 0.11 0.05 0.04 0.07 0.03 0.17

Commercial real estate ......................................... 0.41 0.11 0.30 0.43 0.55 0.54 0.04 0.09 -0.03 0.22 0.57

Multifamily residential real estate .......................... 0.52 0.19 0.40 0.42 0.62 0.31 0.37 0.17 0.02 0.02 0.77

1-4 Family residential ............................................ 0.18 0.04 0.07 0.12 0.28 0.16 0.03 0.04 0.01 0.21 0.33

Commercial and industrial loans ............................. 0.31 0.87 0.72 0.23 -0.09 0.35 0.61 0.39 0.24 0.27 0.01 Loans to individuals ................................................. 1.52 0.40 0.68 1.71 1.99 1.35 2.73 125 1.21 1.09 1.92

Loans Outstanding (in billions)

All real estate loans ................................................. $637.0 $28.9 $172.8 $146.1 $289.3 $203.3 $41.6 $112.2 $30,7 $41.6 $207.7

Construction, development and land ..................... 25.6 1.9 11.3 6.6 5.9 4.9 4.8 5.8 1.4 4.1 4.7

Commercial real estate ......................................... 50.4 2.3 17.6 15.7 14.8 21.4 3.8 6.1 2.4 4.4 12.5

Multifamily residential real estate .......................... 59.4 1.0 11.3 17.1 30.1 15.0 1.1 7.4 1.3 4.0 30.6

1-4 Family residential ............................................ 501.5 23.8 132.6 106.6 238.5 162.0 31.9 92.9 25.6 29.1 159.9

Commercial and industrial loans ............................. 14.5 0.6 4.4 5.0 4.4 7.1 1.2 1.8 0.8 1.1 2.6 Loans to individuals ................................................. 45.1 1.9 11.2 13.1 19.0 14.1 5.3 8.6 3.4 6.9 6.7

Memoranda:

Other Real Estate Owned (in millions)"`

All other real estate owned ...................................... $2,610.8 $86.0 $599.7 $659.1 $1,266.0 $870.3 $219.1 $165.1 $89.6 $197.4 $1,069.3

Construction, development and land ..................... 489.6 14.7 158.5 69.1 247,3 119.1 215.1 11.3 12.5 27.6 104.1

Commercial real estate ......................................... 556.1 24.4 181.0 199.6 151.0 261.4 30.6 51.9 47.7 38.1 126.5

Multifamily residential real estate .......................... 388.7 4.2 53.3 159.3 172.0 99.4 5.3 15.6 6.4 55.6 206.4

1-4 Family residential ............................................ 1,482.3 48.7 272.9 282,4 878.2 438.0 59.1 96.2 40.7 93.4 755.0

Troubled Real Estate Asset Rates*`•

(% of total RE assets)

All real estate loans ................................................. 1.72 1.38 1.37 2.13 1.75 2.09 1.88 0.87 0.97 1.88 1.86

Construction, development and land ..................... 2.96 1.77 2.57 2.45 4.59 4.54 5.20 1.13 1.92 1.02 3.13

Commercial real estate ......................................... 3.30 2.94 2.81 4.21 2.96 4.27 1.65 2.68 3.24 2.07 2,86

Multifamily residential real eslate .......................... 2.29 1.81 1.95 3.75 1.61 2.95 2.28 1.49 1.99 4.55 1.88

1-4 Famil residential ............................................ 1.49 1.21 1.08 1.58. 1.70 1.68 1.65 0.69 0.72 1.66 1.81 ~vunw~~en~ roan ~a~es represern ine percernage of loans in eacn category cnac are past aue au nays or more or inat are in nonaccruai status. "TFR filers report "All other real estate owned" net of valuation allowances, while individual categories of OREO are reported gross.

""Noncurrent real estate loans plus other real estate owned as a percent of total real estate loans plus OREO.

125

0

Insurance Fund Reserve Ratios*

Percent of Insured Deposits

1.32 1.32

Target Ratio ~.3o t.3i ~ Z~

1.15

0.70 0.69

0.51 0.55 o.a~

o.2e o.zt o.~~

0.00 0.00 0.01 0.04

-0.01

SAIF

~ BIF

-0.36

~ 

Fund Balance and Insured Deposits

(S Millions)

BIF Fund BIF-Insured SAIF Fund SAIF-Insured

Balance Deposits Balance Deposits

12/89 13,210 1,873,837 0 882,920

12/90 4,045 1,929,612 18 830,028

12/91 -7,028 1,957,722 101 776,351

12/92 -101 1,945,550 279 732,159

12/93 13,122 1,905,279 1,157 697,608

12/94 21.848 1,895,192 1,937 693,428

12/95 25,454 1,951,736 3,358 712,433

3196 25,748 1,959,470 3,650 716,271

6/96 25,828 1,957,927 3,914 713,186

9/96 26,106 1,981,078 8,722 688,212

'Insured deposit amounts are estimates. InGudes changes made effective

October 1, 1996. Refer to page 15 for details.

FDIC Quarterly Banking Profile

14 Third Quarter 1996

12189 12/90 12/91 12/92 12/93 1?J94 12/95 3/96 6/96 9/96'

FDIC-Insured Savings Institutions
in reserves during 1996, provisions have not exceeded net charge-offs sufficiently to halt the erosion in the ratio of reserves to total loans.

Noncurrent loans have grown by over two percent

in the past 12 months. This has caused the reserve coverage ratio —loan loss reserves to noncurrent loans — to decline to 73 percent from 82

percent a year ago.

The number of savings institutions declined by 19

during the third quarter to 1,961 institutions. The

commercial banking industry absorbed six savings

institutions with $3.8 billion in assets during the

West

Washington

0.5

Montana

0.3

Oregon

o.s

Idaho ~ 0.3

Alaska

0.3

Arizona

o.z

Hawall ~ 1.B

~ Greater than 1.5%

Between .75%and 1.5%

Less than .75%

quarter and one thrift converted to a bank charter.

Industry consolidation absorbed 12 thrifts with $3

billion in assets. Two commercial banks with $427

million in assets converted to thrift charters. One

thrift in California with $34 ~r~illion in assets failed

during the third quarter. This was the first failure

for the industry in over a year. There were 17

mutual-to-stock conversions during the third quarterinvolving $4.8 billion in assets. The number of

"problem" institutions fell to 36 from 38 at the end

of the second quarter. Assets of "problem" institutions declined from $9.9 billion to $8.3 billion.

Noncurrent Loan Rates By State*

September 30, 1996

Midwest

it ~,.3

rNH: 7.2 .AMA: 1.0

'~ Re o.s

CT: 2.0

NJ: 2.3

DE: 7.2

MD: 1.7

DC: 3.3

Noncurrent loan rates represent the percentage of loans that

are past due 90 days or more or in nonaccrual status.

Puerto

Rico

1.7

FDIC Quarterly Banking Profile

FDIC-Insured Savings Institutions 10 Third Quarter 1996

 

 
Estimated FDIC-Insured Deposits by Fund Membership and Type of Institution

September 30, 1996*

(dollar /figures !n mllllonsJ Number of Total Domestic Estimated Insured Deposits

Institutions Assets De osits" BIF SAIF Total

Private-Sector Commercial and Savings Institutions

FDIC-Insured Commercial Banks ......................................... 9,586 4,458,409 2,644,960 1,800,421 176,918 1,977,339

BIF-member ...................................................................... 9,502 4,419,551 2,616,081 1,790,324 163,989 1,954,313

SAIF-member ................................................................... 84 38,858 28,879 10,096 12,929 23,025

FDIC-Insured Savings Institutions ........................................ 1,961 1,035,214 730,143 179,035 511,293 690,328

OTS-Supervised Savings Institutions ............................... 1,376 777,670 530,290 43,254 458,836 502,091

BIF-member ................................................................... 27 109,012 73,867 32,573 38,378 70,951

SAIF-member' ............................................................... 1,349 668,658 456,423 10,681 420,459 431,139

FDIC-Supervised State Savings Banks ............................ 585 257,544 199,853 135,780 52,457 188,238

BIF-member ................................................................... 355 205,029 160,385 135,266 15,226 150,492

SAIF-member ................................................................ 230 52,515 39,468 515 37,231 37,746

Total Private-Sector Commercial and

Savings Institutions ........................................................ 11,547 5,493,623 3,375,103 1,979,455 688,212 2,667,667

BIF-member .......................................................................... 9,884 4,733,592 2,850,333 1,958,163 217,593 2,175,757

SAIF-member ....................................................................... 1,663 760,031 524,770 21,292 470,618 491,910

Other FDIC•Insured Institutions

U.S. Branches of Foreign Banks ......................................... 33 7,233 2,999 1,622 0 1,622

Total FDIC-Insured Institutions ............................................ 11,580 5,500,856 3,378,102 1,981,078 688,212 2,669,289

'Excludes one self-liquidating savings institution with less than ~1 million in SAIF-insured deposits.

"Excludes $451.0 billion in foreign olfice deposits, which are uninsured.

SAIF Assessment Base

December 31, 1989 -September 30, 1996

$ Billions

1000 r

RTC Conservatorships

0

(S eflllons) 12/89 12/90 12/91 12/92 12/93

Sasser Institutions 0.0 2.8 11.9 28.4 42.8

Oakar Deposits (BIF-members) 2.1 34.0 69.8 80.5 139.8

RTC Conservatorships 89.0 67.3 36.9 31.2 17.7

PJIOtherinstitulions 851.6 766.0 693.2 615.2 520.3

Total 942.8 870.0 811.7 755.3 720.7

'Includes changes matle effective October 7, 1996. Refer to page 15 for details.

Sasser Institutions

Oakar Deposits

(BIF-members)

12/94 12/95 3/96 6/96 9/96'

52.0 56.2 56.5 54.2 54.6

181.7 220.1 230.8 238.3 217.6

1.2 0.0 0.0 0.0 0.0

479.2 459.0 451.1 444.6 440.1

714.1 735.3 736.5 737.1 712.4

FDIC Quarterly Banking Profile

All FDIC-Insured Institutions 16 Third Quarter 1996
SAVINGS INSTITUTION PERFORMANCE -THIRD QUARTER, 1996

• A $3.5-Billion Special Assessment On SA/F Deposits Absorbs Most Of

Industry's Third-Quarter Net Income

• Industry Reports First Quarterly Loss Since The Third Quarter Of 1991

• Over 96 Percent of Thrifts Still Meet Highest Capital Standards After

Capitalizing The SA/F

Savings institutions paid a $3.5-billion special

assessment on SAIF deposits that reduced their

third quarter after-tax earnings by approximately

$2.2 billion. As a result of the special assessment

and extraordinary losses of $250 millions, savings

institutions reported an aggregate loss of $55 million for the quarter. Absent these one-time

charges, the industry's profitability remains strong.

Excluding the special assessment, net income

would have been approximately $2.2 billion, comparedwith net income of $2.6 billion in the previous

quarter. The net operating return on assets, which

also excludes extraordinary items, would have

been 0.89 percent, compared to the record 0.97

percent last quarter. Almost 65 percent of all

savings institutions reported losses for the third

quarter. Of the 340 savings institutions with no

SAIF deposits, only five percent were unprofitable

during the third quarter.

$ e~n~o~ quarterly Net Income, 1992 -1996

a

3

2

0

1

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

1992 1993 1994 1995 1996

~ Securities

~

end Other Geins, Net

~

Q Net Opereting Income

z.s 2.s 2.4 2.2

~.s

1.7

1.5 7.6 1.5

1.7 1.6 1.8 1.6 1.7 1.9 1.8

1.2 1.3

-0.1

Earnings through the first three quarters of 1996

amounted to $4.9 billion, which was $1.1 billion

below earnings for the first three quarters of 1995.

The special assessment on SAIF deposits largely

'World Savings and Loan of Oakland, California and Standard

Federal Bank of Troy, Michigan both reduced goodwill related to

acquisitions before 1982. Accounting rules permit an institution to

elect to write-off goodwill for acquisitions prior to 1982. These

thrifts had extraordinary charges of $245 million.

accounted for the $3.8-billion increase in noninterest expenses and a $1.3-billion reduction in incometaxes. Net interest income so far in 1996 is

$1.3 billion higher than in the same period last

year. A steeper yield curve has kept net interest

margins above last year's levels. Gains on the

sales of securities, at $646 million, were $295

million greater than in the first three quarters of last

year.

Equity capital, at $85 billion, fell just below the

amount held a year ago. Thrifts have continued to

pay dividends in excess of last year's level. Dividendsfor the first three quarters of 1996 were $1.7

billion greater than the amount paid during the first

three quarters of last year. During the third quarter, 316 thrifts paid out more in cash dividends than

they earned, with the difference coming out of

equity capital. The industry's equity capital declined by $916 million during the third quarter, with

most of the reduction attributable to these dividends. The equity capital ratio declined from 8.40

percent at midyear to 8.21 percent as of the end

of September. Even with this decline, over 96

percent of all savings institutions remain wellcapitalized and only four institutions were undercapitalized as of the end of the third quarter.

Savings institutions continued to support loan

growth by reducing their holdings of securities

and funding asset expansion primarily with

non-deposit borrowings. Industry assets grew by

$12.2 billion during the third quarter. Thrifts increased residential mortgage loans by $14.4 billion. Non-mortgage lending also increased.

Loans to individuals increased by $2.9 billion while

commercial and industrial loans increased by $1.1

billion. Thrifts shed $7.4 billion in investment securities, including $5 billion in mortgage-backed

securities. The industry was able to increase funding by $2.7 billion from deposits and by $7.6 billion

from other borrowed funds.

For 1997, deposit insurance premiums are expected todecline, on average, by 16.3 basis points

(down from an average of 23.4 basis points to

FDIC-Insured Savings Institutions

FDIC Quarterly Banking Profile

8 Third Quarter 1996
TABLE I-D. Selected Indicators, BIF-Member Depository Institutions*

(dollar figures in millions) 1996" 1995' 1995 1994 1993 1992

Number of institutions reporting ...................................... 9,884 10,356 10,242 10,759 11,291 11,813

Total assets ..................................................................... $4,733,592 $4,479,133 $4,576,161 $4,246,785 $3,949,694 $3,711,612

Total deposits .................................................................. 3,301,318 3,119,207 3,224,302 3,061,457 2,951,980 2,873,169

Number of problem institutions ........................................ 93 167 151 264 472 856

Assets of problem institutions (in billions) ........................ $8 $23 $20 $42 $269 $464

Number of failed assisted institutions .............................. 5 6 6 13 41 122

Assets of failed/assisted institutions (in billions) .............. $0.19 $0.76 $0.76 $1.43 $3.54 $44

`*As of September 30.

TABLE II-D. Selected Aggregate Condition and Income Data, BIF-Member Depository Institutions"

(dollar figures in millions) Preliminary

3rd Quarter 2nd Quarter 3rd Quarter %Change

1996 1996 1995 95:3-96:3

Number of institutions reporting ............................................... 9,884 9,987 10,356 -4.6

Commercial banks ................................................................. 9,502 9,605 9,971 -4.7

Savings institutions ................................................................ 382 382 385 -0.8

Total employees (full-time equivalent) ..................................... 1,538,166 1,533,752 1,537,649 0.0

CONDITION DATA

Total assets ............................................................................. $4,733,592 $4,666,288 $4,479,133 5.7

Loans secured by real estate, total ........................................ 1,280,142 1,259,867 1,206,511 6.1

1-4 Family residential .......................................................... 766,529 753,649 721,242 6.3

Multifamily residential property ............................................ 58,673 57,716 54,251 8.2

Commercial real estate ........................................................ 326,755 322,164 309,794 5.5

Construction, development and land ................................... 76,477 73,695 70,119 9.1

Commercial &industrial loans ............................................... 702,090 688,446 650,375 8.0

Reserve for losses ............................................................... 55,876 55,745 55,078 1.5

Total deposits ........................................................................ 3,301,318 3,260,836 3,119,207 5.8

Domestic deposits ................................................................. 2,850,333 2,798,864 2,669,559 6.8

Estimated insured deposits"` ............................................... 2,175,756 2,173,879 2,105,564 3.3

BIF-insured deposits (estimated) ......................................... 1,958,163 1,935,601 1,896,490 3.3

SAIF-insured deposits (estimated) ...................................... 217,593 238,278 209,074 4.1

Noncurrent loans and leases ................................................. 33,126 33,004 34,385 -3.7

Other real estate owned ........................................................ 5,719 6,198 8,034 -28.8

Equity capital ......................................................................... 393,879 388,069 366,035 7.6

CAPITAL CATEGORY DISTRIBUTION

Number of institutions:

Well capitalized ...................................................................... 9,721 9,843 10,192 -4.6

Adequately capitalized ........................................................... 151 128 146 3.4

Undercapitalized.................................................................... 8 11 12 -33.3

Significantly undercapitalized ................................................ 3 2 6 -50.0

Critically undercapitalized ...................................................... 1 3 0 NA

Total assets:

Well capitalized ...................................................................... $4,710,655 $4,648,515 $4,403,715 7.0

Adequately capitalized ........................................................... 21,966 16,322 73,518 -70.1

Undercapitalized .................................................................... 594 1,183 1,206 -50.7

Significantly undercapitalized ..................:............................ 339 120 694 -51.2

Critically undercapitalized ...................................................... 37 148 0 NA

Preliminary Preliminary

First Three First Three 3rd Quarter 3rd Quarter %Change

INCOME DATA Qtrs 1996 Qtrs 1995 %Chan e 1996 1995 95:3-96:3

Net interest income ............................................... $126,741 $120,776 4.9 $43,558 $41,267 5.6

Provision for loan losses ....................................... 12,170 9,184 32.5 4,113 3,369 22.1

Net income ............................................................ 40,193 38,375 4.7 13,574 14,388 -5.7

Ne#charge-offs ...................................................... 11,507 8,762 31.3 3,933 3,399 15.7

Number of institutions reporting net losses........... 357 333 7.2 406 354 14.7

rExcludes insured branches of foreign banks.

*" Includes changes made effective on October 1, 1996. Refer to Page 15 for details.

FDIC Quarterly Banking Profile

BIF-Member Depository Institutions 18 Third Quarter 1996
TABLE IV-A. Third Gluarter 1996, FDIC-Insured Commercial Banks

Asset Size Distribution Geogra hic Di:

Less $100 Million $1 Billion Greater East

THIRD QUARTER Prelim/nary All than $100 to to than $10 North- South-

(The wayTt is...) Institutions Million $1 Billion $10 Billion Billion east east Contra

Number of institutions reporting ................ 9,586 6,334 2,854 330 68 752 1,587 2,122

Total assets (in billions) ............................. $4,458.4 $285.1 $694.3 $1,035.0 $2,444.1 1,687.4 $776.3 $704.9

Total deposits (in billions) .......................... 3,096.0 2462 576.5 701.1 1,5722 1,043.0 561.3 515.0

Net income (in millions) ............................. 13,160.6 896.2 2,182.5 3,353.3 6,728.6 4,670.6 2,256.5 2,114.5

of unprofitable institutions ..................... 4.4 5.1 2.9 3.0 2.9 4.7 5.0 3,8

of institutions with earnings gains......... 58.2 56.3 62.1 62.7 50.0 62.1 64.8 56.6

Performance Ratios (annualized, %)

Yield on earning assets ............................. 8.24 8.48

Cost of funding earning assets .................. 3.91 3.70

Net interest margin .................................... 4.33 4.78

Noninterest income to earning assets....... 2.40 1.26

Noninterest expense to earning assets..... 4.19 3.80

Net operating income to assets ................. 1.18 1.27

Return on assets ....................................... 1.19 1.27

Return on equity ........................................ 14.33 12.07

Net charge-offs to loans and leases.......... 0.56 0.28

Loan loss provision to net charge-offs...... 103.99 125.25

Growth Rates (year-to-year, %)

Nel interest income ................................... 5.21 -

Net income ................................................ -4.82 -

Nei charge-o(fs .......................................... 17.78 -

Loan loss provision ................................... 22.31 -

PRIOR THIRD QUARTERS

(The way it was ...

Return on assets (%) ........................1995 1.32 1.33

.........................................1993 1.28 1.20

.........................................1991 0.50 0.83

Net charge-offs to loans &leases (%)

.........................................1995 0.51 0.25

.........................................1993 0.75 0.30

.........................................1991 1.64 0.64

West

Mid- Southwest west West

2,425 1,687 1,013

$289.4 $327.9 $672.6

220.4 264.9 491.5

1,046.2 1,0042 2,068.6

2.8 4.1 8.6

56.3 54.1 59.4

8.44 8.79 7.90 8.05 8.30 8.18 8.51 8.00 8.72

3.67 3.89 4.03 4.24 3.85 3.92 3.86 3.46 3.45

4.77 4.90 3.87 3.81 4.45 4.26 4.65 4.54 5.27

1.54 2.58 2.72 2.97 1.89 1.66 2,54 1.93 2.59

3.93 4.34 4.26 4.36 3.91 3.54 4.16 4.16 4.89

1.27 1.31 1.09 1.11 1.16 1.19 1.46 1.24 1.23

1.27 1.31 1.11 1.12 1.17 1.21 1.46 1.23 1.24

13.50 14.61 14.85 15.10 13.75 14.10 16.49 13.97 12,93

0.40 1.03 0.42 0.59 0.44 0.45 0.71 0.34 0.77

126.92 113.59 84.88 89.62 140.48 119.02 111.03 104.88 92.01

- - 1.24 13.59 4.97 -0.31 6.54 6.54

- - - 1.63 0.99 -0.64 -11.13 0.74 -2324

- - - -11.94 67.83 43.44 40.45 46.30 37,48

- - -12.50 104.36 22.62 34.85 16.33 50.79

1.31 1.35 1.30 1.15 1.27 1.24 1.77 1.27 1.74

1.22 1.42 1.22 1.23 1 24 1.35 1.53 1.29 1.23

0.70 0.61 0.23 0.27 0.64 0.81 1, 02 0.72 0.27

0.35 0.73 0.48 0.71 0.29 0.33 0.54 0.24 0.61

0.51 0.88 0.85 1.06 0.40 0.52 0.47 0.25 0.97

0.93 1.68 2.18 2.52 121 0.89 1.05 0.97 1.29

Commercial Banks Make More Credit Available to Businesses and Consumers

Quarterly Increase in Loans Outstanding quarterly Increase in Unused Loan Commitments

($ Billions) ($ Billions)

sn.~ s~a.e

565.1

ss~.ssso.i ss~.o sse.z

Ssz.a sass sa~.s

$29.0 529.2

s~z.a

9/93 12/93 3/94 6/94 9/94 12/94 3195 6/95 9/9512/95 3/96 fv96 9/96

In the third quarter of 1996, commeraal and industrial loans Increased by 513.3 billion, real

estate loans increased by 512.4 Wllion and loans to individuals Increased by 511.3 blltlon.

9193 12/93 3/~J4 6194 9/94 12/94 3/95 6195 9/95 12/95 3P96 6/96 9/96

In tF~e third quarter of 1996, unused credit cab commilmenls increased by 540.1 bBllon and

unused commitments for loans la businesses Increased by $20.1 bili(on.

FDIC Quarterly Banking Profile

FDIC-Insured Commercial Banks 6 Third Quarter 1996
Number of FDIC-Insured "Problem" Institutions

1991 -1996

Number of Institutions

1,426

1,063

Savings Institutions

~ Commercial Banks

572 501 433 3~7

:c~ ._1.93 169 137 125

12/91 12/9212/93 3/94 6/94 9/94 12/94 3/95 6/95 9/95 12/95 3/96 6/96 9/96

Savings Institutions 410 276 146 118 95 84 71 71 64 59 49 42 38 36

Commercial Banks 1,016 787 426 383 338 293 247 215 190 158 144 127 99 89

Assets of FDIC-Insured "Problem" Institutions

1991 -1996

$ Billions

$819

$592

$334

Savings Institutions

~ Commercial Banks

$142 $113 $95 •:: 72 .~~ ~~~~ .:~,~ $66 $56 $37 $31 $27 $18 $15

12/91 12/9212/93 3/94 6/94 9/94 12/94 3/95 6/95 9/95 12/95 3/96 6/96 9/96

Savings Institutions 291 184 92 89 71 59 39 39 33 17 14 13 10 8

Commercial Banks 528 408 242 53 42 36 33 27 23 20 17 13 8 7

FDIC quarterly Banking Profile

All FDIC-Insured Institutions 20 Third Quarter 1996
TABLE I-A. Selected Indicators, FDIC-Insured Commercial Banks

1996' 1995` 1995 1994 1993 1992 1991 Return on assets (%) ................................................. 1.19 1.19 1.17 1.15 1.20 0.93 0.53

Return on equfly (%) ................................................. 14.40 14.95 14.66 14.61 15.34 12.98 7.94

Core capital (leverage) ratio (%) ............................... 7.79 7.73 7.61 7.64 7.65 7.21 6.48

Noncurrent assets plus

other real estate owned to assets (°/,) ..................... 0.80 0.92 0.85 1.01 1.61 2.54 3.02 Net charg~o(is to loans (%) ...................................... 0.56 0.45 0.49 0,50 0.85 1.27 1.59

Asset growth rate (°/,) ................................................ 5.41 7.81 7.53 8.21 5.72 2.19 1.22

Net interest margin (%) ............................................. 4.27 4.31 429 4.36 4.40 4.41 4.11 Net operating income growth (%) .............................. 4.07 8.17 7.48 16.17 35.37 92.41 -0.63

Number of institutions reporting ................................ 9,586 10,052 9,940 10,451 10,958 11,462 11,921

Percentage of unprofitable institutions ...................... 3.75 3.23 3.52 3.97 4.89 6.85 11.60

Number of problem institutions .................................. 89 158 144 247 426 787 1,016

Assets of problem institutions (in billions) ................. $7 $20 $17 $33 $242 $408 $528

Number of failed/assisted institutions ........................ 5 6 6 11 42 100 108

'Through September 30, ratios annualized where appropriate. Asset growth rates are (or 12 months ending September 30.

TABLE II-A. A re ate Condition and Income Data FDIC-Insured Commercial Banks

(dollar f/gures in mi//Jons) Preliminary

3rd Quarter 2nd Quarter 3rd Quarter %Change

1996 1996 1995 95:3-96:3

Number of institutions reporting ............................................... 9,586 9,690 10,052 -4.6

Total employees (full-time equivalent) ..................................... 1,479,289 1,476,204 1,482,934 -0.3

CONDITION DATA

Total assets ............................................................................. $4,458,409 $4.396,978 $4.229,402 5.4 Loans secured by real estate ............................................ 1,115,701 1,103,338 1,070,938 4.2

Commercial &industrial loans ........................................... 698,718 685,410 647,346 7.9 Loans to individuals ........................................................... 548,744 537,482 518,477 5.8

Farm loans ......................................................................... 42,032 41,405 41,872 0.4

Other loans &leases ......................................................... 338,205 328,249 283,033 19.5 Less: Unearned income ..................................................... 5,581 5,625 6,053 -7.8

Total loans &leases ............................................................ 2,737,820 2,690,259 2,555,615 7.1 Less: Reserve (or losses ..................................................... 53,678 53,578 52,882 1.5

Net loans &leases ................................................................. 2,684,143 2,636,681 2,502,733 7.3

Securities ............................................................................... 799,675 806,487 818,746 -2.3

Other real estate owned ........................................................ 5,035 5,349 7,010 -28.2

Goodwill and other intangibles .............................................. 43,530 42,811 28,533 52.6

All other assets ...................................................................... 926,026 905,649 872,380 6.2

Total liabilities and capital ........................................................ 4,458,409 4,396,978 4,229,402 5.4

Nonintefest-bearing deposits ................................................. 628,388 604,731 556,375 12.9

Inleresl•bearing deposits ....................................................... 2,467,626 2,456,731 2,375,027 3.9

Othef bofrowed funds ............................................................ 723,301 690,507 676,591 6.9

Subordinated debl ................................................................. 48,502 47,815 43,724 10.9

All other liabilities ................................................................... 220,194 232,264 233,621 -5.8

Equity capital ......................................................................... 370,399 364,930 344,063 7.7

Loans and leases 30-89 days past due ................................... 34,766 33,572 31,173 11.5 Noncurrent loans and leases ................................................... 30,428 30,181 31,494 -3.4

Restructured loans and leases ................................................ 4,012 3,571 4,531 -11.5

Direct and indirect investments in real estate .......................... 561 573 621 -9,7

1-4 Family residential mortgages ............................................ 640,212 634,627 622,013 2.9

Mortgag2backed securities .................................................... 327,500 332,886 329,192 -0.5

Earning assets ......................................................................... 3,856,831 3,807,643 3,674,999 5.0

Long-term assets (5+ years) ................................................... 628,602 626,248 575,623 9.2

Volatile liabilities ...................................................................... 1,384,091 1,349,428 1,283,215 7.9

Foreign office deposits ............................................................ 451,054 462,031 449,649 0.3

Unused loan commilments ...................................................... 2,400,097 2,334,327 2,053,390 16.9

O((-balance-sheet derivatives .................................................. 20,385,196 19,596,445 18,241,567 11,8

Preliminary Preliminary

First Three First Three 3rd Quarter 3rd Quarter %Change

INCOME DATA Qtrs 1996 Qtrs 1995 %Change 1996 1995 95:3-96:3

Total interest income ............................................. $231,752 $225,080 3.0 $78,927 $77,735 1.5

Total interest expense ........................................... 111,168 109,925 1.1 37,480 38,342 -2.3 Net interest income ............................................. 120,584 115,155 4.7 41,447 39,393 5.2

Provision (or loan losses ....................................... 11,754 8,813 33.4 3,949 3,229 22.3

Total noninterest income ....................................... 68,752 60,766 13.1 22,932 21,700 5.7

Totalnonintereslexpense ..................................... 118,965 111,065 7.1 40,161 36,951 8.7

Securities gains (losses) ....................................... 720 460 56.4 168 151 11.3

Applicable income taxes ........................................ 20,802 19,664 5.8 7,277 7,239 0.5

F~ciraordinary gains, net ....................................... 90 24 273.8 0 1 -125.1

Net income .......................................................... 38,625 36,864 4.8 13,161 13,827 -4.8

Net charge-offs ...................................................... 11,078 8,263 34.1 3,798 3,224 17.8

Cash dividends ...................................................... 25,797 19,936 29.4 10,720 6,963 54.0

Net opefating_income .......................................... 38,036 36,547 4.1 13,072 13,723 -4.8

FDIC Quarterly Banking Profile

FDIC-Insured Commercial Banks 4 Third Quarter 1996
The FASB announcement and guide also sought to provide further clarification of Statement 115, and correct

misinterpretations of the original pronouncement.

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, and other assets. Beginning

3/31/94, FASB Interpretation 39 limited the netting of related trading assets and liabilities, which had the effect of

increasing the amount of trading account assets reported.

All other liabilities —bank's liability on acceptances,

limited-life preferred stock, and other liabilities. Effective

3/31/94, includes revaluation losses on assets held in

trading accounts.

BIF-insured deposits (estimated) — the amount of deposits inaccounts ofless than $100,000 insured by the BIF.

For SAIF-member "Dakar" institutions, it represents the

adjusted attributable amount acquired from BIF members.

Capital category distribution —each institution's capital

category is calculated or estimated from its financial report

and does not reflect supervisory upgrades or downgrades:

Total Tier 1

(Percent) Rlsk-Based Risk-Based Tier 1 Tangible

Capital ` Capital' Leverage Equity

Well-capitalized >_10 and >_6 and >_5 —

Adequately

capitalized >_8 and >_4 and >_4 —

Undercapitalized >_6 and >_3 and >_3 —

Significantly

undercapitalized <6 or <3 or <3 and >2

Critically

undercapitalized — — — <2

'As a percentage of risk-weighted assets.

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 consolidatedsubsidiaries, less goodwill and other ineligible intangible assets. The amount of eligible intangibles (including

mortgage 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.

Derivative contracts, gross fair values (positive/negative) —are reported separately and represent the amount

at which a contract could be exchanged in a transaction

between willing parties, other than in a forced or liquidation

sale. If a quoted market price is available for a contract,

the fair value reported for that contract is calculated using

this market price. If quoted market prices are not available,

the reporting banks use the best estimate of fair value

based on quoted market prices of similar contracts or on

valuation techniques such as discounted cash flows. This

information is reported only by banks with assets greater

than $100 million.

Direct and indirect investments in real estate — excludes loans secured by real estate and property acquired

through foreclosure.

Earning assets —all loans and other investments that earn

interest or dividend income.

Estimated insured deposits —estimated amount of insured deposits (account balances less than $100,000).

The sum of all deposit balances in accounts of less than

$100,000 plus the number of accounts with balances

greater than $100,000 multiplied by $100,000.

Failed/assisted institutions — An institution fails when

regulators take control of the institution, placing the assets

and liabilities into a bridge bank, conservatorship, receivership, or another healthy institution. This action may

require the FDIC — orthe RTC—to provide funds to cover

losses. An institution is defined as "assisted" when the

institution remains open and receives some insurance

funds in order to continue operating.

FHLB adaances —borrowings from the Federal Home

Loan Bank (FHLB) reported by institutions that file a Thrift

Financial Report. Institutions that file a Call Report do not

report borrowings ("advances")from the FHLB separately.

Goodwill and other intangibles —intangible assets include mortgage servicing rights, purchased credit card

relationships and other identifiable intangible assets.

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.

Mortgage-backed securities —certificates of participation in pools of residential mortgages and collateralized

mortgage obligations issued or guaranteed by government-sponsored or private enterprises. Effective 3/31/94,

the full implementation of FASB 115 meant that a portion

of banks' mortgage-backed securities portfolio is now reported based upon fair (market) values; previously, all

mortgage-backed securities not held in trading accounts

were reported at either amortized cost or lower of cost or

market.

Net charge-offs —total loans and leases charged off (removed from balance sheet because of uncollectibiliry), 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 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).

Notes to Users

FDIC Quarterly Banking Profile

22 Third Quarter 1996
Net interest margins widened for the second consecutivequarter, as average asset yields rose, and average

funding costs remained stable. Only the largest banks

— with assets greater than $10 billion —failed to

register margin improvement, as their average asset

yields experienced a larger decline than their average

funding costs. The increase in asset yields came as

banks reduced their securities holdings and increased

their loans, especially higher-yielding credit-card loans

and loans to commercial borrowers. On the liability

side of the balance sheet, banks were able to increase

the proportion of noninterest-bearing deposits, which

helped to reduce average funding costs.

Asset-quality indicators remained favorable. Although

net loan charge-offs of $3.8 billion were $574 million

higher than a year earlier, they remained modest by

historical standards, and the percentage of loans that

were noncurrent at the end of the quarter fell to an

all-time low of 1.11 percent. Improvements in asset

quality were evident in several of the main loan categories, and deterioration was concentrated in consumer loans, especially credit-card loans. Net

charge-offs of credit-card loans accounted for almost

two-thirds of all loans charged-off in the third quarter,

even as delinquent credit-card loans increased. Other

loans to individuals, including residential mortgages,

also showed increases in charge-offs and delinquencies. In contrast, delinquencies and charge-offs on

loans to commercial and industrial borrowers and on

commercial real estate loans fell during the quarter.

Quarterly Net Loan Charge-Off Rates

of loans 1992 -1996

3.0

z.o

iii

o.o

~ , ~ Loans to Individuals _ ..

.. .` ~ ~.

.•1 ~ ~

,./~ Real Estate

Other ~ / ...

1992 1993 1994 1995 1996

Banks added $3.9 billion in loan-loss provisions in the

third quarter, boosting their loan-loss reserves by $100

million. At the end of September, the industry's "coverage ratio" stood at $1.76 in reserves for every $1.00

in noncurrent loans, only slightly below the record level

of $1.77 set at the end of the previous quarter. At the

same time, the ratio of reserves to total loans fell to

1.96 percent, from 1.99 percent at midyear. These are

the only two periods since 1986 that the industry's

reserves-to-loans ratio has been below two percent.

Coverage Ratio' and Reserve Levels, 1992 - 1996

$ Billions Coverage Ratio (%)

,o0 200

BO

so

ao

zo

1 G ;7 4 1 'C :1 4 1 C :1 4 1 2 :1 4 1 'L :1

1992 1993 1994 1995 1996

'Loan-Loss reserves to Noncurrent Loans and Leases.

160

i zo

so

►o

Commercial banks' average capitalization reached its

highest level since 1941, as equity capital rose to 8.31

percent of total assets. Retained earnings accounted

for less than half of the $5.5-billion increase in equity

capital during the third quarter, as banks paid out 81

percent of their earnings in dividends to shareholders.

A year earlier, banks paid out only 50 percent of their

earnings in dividends. During the quarter, 827 banks

paid dividends in excess of their total earnings, with

the excess amounts being paid out of equity capital.

The conversion of equity into dividends at these banks

totaled $3.5 billion. Much of the increased dividends

is expected to go to support stock buy-back programs

by parent holding companies.

Gluarterly Noncurrent Loan Rates'

1992 -1996 of Loans

s.o

2.5

o.o

'-.~' ., Real Estate

c~i

~ ~~•

/ ~ Other ~ ~•.

Loans to Individuals ` ~ ~-------

1992 1993 1994 1995 1996

Loans past due 90 or more days ar in nonaccrual status.

FDIC Quarterly Banking Profile

FDIC-Insured Commercial Banks 2 Third Quarter 1996
Federal Deposit Insurance Corporation

Washington, DC 20429-9990

OFFICIAL BUSINESS

PENALTY FOR PRII/ATE USE, $300

BULK RATE

MAIL

Postage &

Fees Paid

FDIC

Permit No. G36

Attention:

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