Donna Tanoue, Chairman 

Third Quarter 1998 

FDIC 

Division of Research 

& Statistics 

Don Inscoe 

Associate Director 

Statistics Branch 

(202) 898-3940 

Tim Critchfield 

(202) 898-8557 

Jim McFadyen 

(202) 898-7027 

Ross Waldrop 

(202) 898-3951 

COMMERCIAL BANK PERFORMANCE — THIRD QUARTER, 1998 

• Bank Earnings Drop to $15.0 Billion in Third Quarter, Ending String of 

Earnings Records 

• Lower Earnings from Trading Activities and International Operations 

Reduce Industry Profits 

• Banks Boost Reserves to Cover Rising Loan Losses 

• Equity Capital Ratio Rises to 47-Year High 

Insured commercial banks reported net income Problems in foreign and domestic financial marof $15.0 billion for the third quarter of 1998, kets contributed to a decline of more than $4.0 

bringing to an end a run of six consecutive quar- billion in the earnings of several of the largest 

ters of record earnings. Industry profits were U.S. banking companies, although only $2.9 bil-

$1.1 billion below the level of the second quar- lion of this decline was absorbed by the compater.1 The industry’s return on assets (ROA) fell nies’ U.S. commercial bank subsidiaries. The 

to 1.15 percent in the third quarter, down from industry’s earnings from domestic operations 

1.25 percent in the second quarter and from were higher than in the second quarter by $429 

1.22 percent in the third quarter of 1997. The million (3.1 percent). A majority of commercial 

earnings decline was caused by weaknesses in banks (54.5 percent) had higher earnings than in 

the overseas operations and the trading activi- the second quarter, and an even larger proporties of a few of the largest banks. The average tion — 57.2 percent — registered improvements 

ROA at banks with more than $10 billion in over earnings in the third quarter of 1997. More 

assets fell to 0.97 percent, from 1.18 percent in NET INCOME ATTRIBUTED TO DOMESTIC AND the second quarter; the average ROA at banks FOREIGN OPERATIONS, 1994–1998 with less than $10 billion in assets increased to $ Billions 

1.47 percent, from 1.37 percent in the second 

quarter. 15 14.5 

Domestic Operations 

QUARTERLY NET INCOME, 

1994–1998 $ Billions 

10 

Securities and Other Gains, Net Income 15.916.1 

Net Operating Income 15.3 15.0 14.5 14.614.7 

13.8 13.8 13.7 13.2 

11.8 12.0 12.0 12.0 

11.1 11.2 10.7 11.1 5 

Foreign Operations 

0.6 

0 

1994 1995 1996 1997 1998 

1Third-quarter earnings include $139 million in net income 

for 8 commercial banks that are directly owned by other 0 

commercial banks. Because their owners report earnings 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 on a consolidated basis, some of this income will be double- 1994 1995 1996 1997 1998 counted. See Notes to Users, p. 21. 

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

Information Center, 801 17th Street, NW, Washington, DC 20434; telephone (202) 416-6940 or (800) 276-6003. 

Also available on the Internet at www.fdic.gov. Comparable financial data for individual institutions can now be obtained 

from the FDIC’s Institution Directory (I.D.) System on this Web site. 
than two out of three banks — 68.1 percent — had 

ROAs of 1 percent or higher in the third quarter. For 

the first three quarters of 1998, industry earnings 

totaled $47.1 billion, a 7.4 percent ($3.2 billion) 

improvement over the same period of 1997, and the 

industry’s ROA was 1.22 percent, compared with 1.24 

percent in the same period of 1997. 

The greatest drag on industry earnings came from 

banks’ trading activities, which produced $1.9 billion 

less in pre-tax revenue than during the second quarter. 

Some of the adverse trading results were reflected in 

international operations, which contributed $1.5 billion 

less to bottom-line profits than in the second quarter. 

Loss provisions for international operations increased 

by $203 million, while domestic loan-loss provisions 

increased by $1.2 billion. These negative factors were 

partially offset by a $1.3-billion decline in income taxes 

and a $792-million increase in net interest income. Net 

interest margins improved slightly, averaging 4.12 percent for the quarter, up from 4.10 percent in the second 

quarter. A year ago, the industry’s margin was 4.24 

percent. 

QUARTERLY NET INTEREST MARGINS, 

1994–1998 Net Interest Margin (%) 

4.0 

4.5 

5.0 Assets < $100 Million 

Assets > $100 Million 

4.60% 

4.09% 

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

1994 1995 1996 1997 1998 

Asset quality remained largely healthy, particularly in 

domestic loans. Noncurrent loans increased by $468 

million, with roughly one-third of the increase ($160 

million) occurring in loans to foreign borrowers. The 

domestic loan categories with increases in noncurrent 

loans included commercial and industrial loans, where 

noncurrent loans increased by $207 million, and consumer loans other than credit cards, where noncurrent 

loans grew by $202 million. During the last 12 months, 

noncurrent loans to foreign borrowers increased by 

$1.3 billion (80.3 percent), while noncurrent loans to 

domestic borrowers declined by $428 million (1.6 percent). The percentage of total bank loans that were 

noncurrent remained unchanged at 0.94 percent, the 

lowest level in the 17 years that noncurrent data have 

been reported. 

BANKS’ LENDING EXPOSURE TO FOREIGN 

BORROWERS, 1994–1998 

Loans to Non-U.S. Borrowers*, % of Total Loans and Leases 

8 

7 

6 

* Includes leases and commercial and industrial loans to non-U.S. addressees, loans to 

foreign governments, real estate loans in foreign offices, and loans to banks in foreign 

countries. 

Commercial banks charged off $5.7 billion in loans in 

the third quarter, an increase of $853 million over the 

second quarter and $915 million (19.3 percent) over 

the third quarter of 1997. The charge-offs on loans to 

foreign borrowers totaled $519 million, $220 million 

more than in the second quarter and $458 million more 

than a year earlier. In the charge-offs on domestic 

loans, the largest increases occurred in the “all other 

loans” category, which includes loans for purchasing or 

carrying securities. Net loan losses in the “all other” 

category were $491 million higher than during the second quarter. Losses on credit-card loans declined 

slightly. The net charge-off rate on all commercial 

bank loans rose to 0.73 percent in the third quarter, up 

from 0.63 percent in the second quarter and 0.66 percent a year earlier. This is the highest quarterly net 

CREDIT CARD LOSS RATES AND PERSONAL 

BANKRUPTCY FILINGS, 1984–1998 Net Charge-Off Rate (%) Number of Bankruptcy Filings (Thousands) 

1994 1995 1996 1997 1998 

0 

1 

2 

3 

4 

5 

6 

7 

50 

100 

150 

200 

250 

300 

350 

400 

1984 1986 1988 1990 1992 1994 1996 1998 

Personal 

Bankruptcy 

Filings 

Credit Card Charge-Off Rates 

Sources: Bankruptcies - Administrative Office of the United States Courts 

Charge-Off Rates - Commercial Bank Call Reports 

FDIC Quarterly Banking Profile 

FDIC-Insured Commercial Banks 2 Third Quarter 1998 
charge-off rate reported by the industry since the 

fourth quarter of 1993. 

Equity capital increased by $11.4 billion to $457.4 billion, or 8.68 percent of industry assets, up from 8.60 

percent at midyear. This ratio is now at its highest level 

since 1941. Reserves rose by $881 million, as loss 

provisions exceeded net charge-offs by $915 million. 

At the end of the third quarter, commercial banks’ 

reserves amounted to 1.82 percent of total loans, 

unchanged from the end of the second quarter. The 

industry’s “coverage ratio” rose to a record $1.94 in 

reserves for every $1 of noncurrent loans. 

CAPITAL RATIOS, 1992–1998 Ratios (%) 

6 

8 

10 

12 

14 

Tier 1 Risk-Based Capital 

Equity to Assets 

Total Risk-Based Capital 

Core Capital (Leverage) 

1992 1993 1994 1995 1996 1997 1998 

Assets of commercial banks increased by $86.4 billion 

in the third quarter, and by $400 billion (8.2 percent) in 

the 12 months ended September 30. Much of the 

growth during the quarter occurred in loans to commercial borrowers (up $23.6 billion), loans for commercial real estate properties and construction (up 

$9.3 billion and $6.7 billion, respectively), and consumer loans other than credit cards (up $8.3 billion). 

Banks’ on-balance-sheet portfolios of credit-card 

loans, residential mortgage loans, and home equity 

loans all declined during the third quarter. The amount 

of credit-card loans securitized and sold off-balancesheet increased by $13.9 billion. Banks continued to 

reduce their holdings of U.S. Treasury securities (by 

$25.1 billion), while increasing their mortgage-backed 

securities (by $40.6 billion). Total securities increased 

by $29.1 billion. Intangible assets registered their 

smallest quarterly increase in two years, reflecting 

both slower growth in merger-related goodwill and a 

$244-million reduction in mortgage servicing assets as 

mortgage prepayments increased. Banks’ off-balance-sheet derivatives contracts rose by $4.6 trillion 

during the quarter, more than twice the previous 

largest quarterly increase, partly because of turmoil in 

overseas financial markets. 

Deposit growth was negligible in the third quarter, 

although the composition of bank deposits shifted significantly. Deposits in domestic offices declined by 

$5.3 billion, while foreign-office deposits increased by 

$5.7 billion. The decline in domestic-office deposits 

was caused by a $39.2-billion drop in (noninterestbearing) demand deposits, while other (interest-bearing) deposits rose by $33.9 billion. One effect of these 

shifts was to raise banks’ average funding costs, as 

low-cost deposits were replaced by higher-cost 

deposits and nondeposit liabilities. Other (nondeposit) 

borrowings rose by $34.2 billion, as fed funds purchased increased by $28.5 billion. The average cost 

of funding earning assets rose by 8 basis points, from 

4.01 percent to 4.09 percent. Banks’ trading account 

liabilities increased by $28.3 billion, as revaluation 

losses on off-balance-sheet contracts rose by $24.0 

billion. 

The number of insured commercial banks declined by 

73 institutions in the third quarter. Mergers absorbed 

124 banks, while 49 new banks were chartered. Three 

savings institutions converted to commercial bank 

charters, while one commercial bank converted to a 

thrift charter. Two commercial banks failed during the 

quarter, marking the first time in two years that there 

has been more than one commercial bank failure in a 

quarter. The number of commercial banks on the 

FDIC’s “Problem List” increased from 64 to 70 during 

the quarter, and assets of “problem” banks rose from 

$5.0 billion to $5.4 billion. 

STRUCTURAL CHANGES AMONG FDIC-INSURED 

COMMERCIAL BANKS, 1994–1998 

Number of Institutions 

0 

50 

100 

150 

200 

New Charters 

Failed Banks 

Mergers 

2 

49 

124 

1994 1995 1996 1997 1998 

FDIC Quarterly Banking Profile 

Third Quarter 1998 3 FDIC-Insured Commercial Banks 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE I-A. Selected Indicators, FDIC-Insured Commercial Banks 

Return on assets (%)............................................. 

Return on equity (%)............................................. 

Core capital (leverage) ratio (%).............................. 

Noncurrent assets plus 

other real estate owned to assets (%)..................... 

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

Asset growth rate (%)............................................. 

Net interest margin (%).......................................... 

Net operating income growth (%).............................. 

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

Percentage of unprofitable institutions (%).................. 

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

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

Number of failed/assisted institutions........................ 

1998* 1997* 1997 1996 1995 1994 1993 

1.22 

14.30 

7.70 

0.65 

0.66 

8.21 

4.09 

4.88 

8,910 

5.15 

70 

$5 

3 

1.24 

14.69 

7.78 

0.68 

0.62 

9.21 

4.23 

13.55 

9,215 

3.99 

71 

$4 

0 

1.23 

14.69 

7.56 

0.66 

0.64 

9.54 

4.21 

12.48 

9,143 

4.81 

71 

$5 

1 

1.19 

14.45 

7.64 

0.75 

0.58 

6.16 

4.27 

6.43 

9,528 

4.29 

82 

$5 

5 

1.17 1.15 1.20 

14.66 14.61 15.34 

7.61 7.64 7.65 

0.85 1.01 1.61 

0.49 0.50 0.85 

7.53 8.21 5.72 

4.29 4.36 4.40 

7.48 16.18 35.36 

9,940 10,451 10,958 

3.55 3.98 4.89 

144 247 426 

$17 $33 $242 

6 11 42 

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

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

(dollar figures in millions) 

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

Preliminary 

3rd Quarter 2nd Quarter 3rd Quarter %Change 

1998 1998 1997 97:3-98:3 

8,910 8,983 9,215 -3.3 

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

CONDITION DATA

1,597,787 1,593,895 1,524,060 4.8 

 Total assets..................................................................... $5,269,220 $5,182,785 $4,869,295 8.2

 Loans secured by real estate............................................. 1,300,378 1,284,681 1,226,869 6.0

 Commercial & industrial loans.......................................... 873,935 850,381 765,212 14.2

 Loans to individuals......................................................... 555,298 547,733 554,549 0.1

 Farm loans..................................................................... 48,214 47,075 45,021 7.1

 Other loans & leases...................................................... 372,156 366,067 316,043 17.8

 Less: Unearned income................................................... 4,193 4,241 4,750 -11.7

 Total loans & leases......................................................... 3,145,788 3,091,696 2,902,944 8.4

 Less: Reserve for losses................................................... 57,263 56,382 54,923 4.3

 Net loans and leases......................................................... 3,088,525 3,035,313 2,848,021 8.4

 Securities........................................................................ 923,072 894,012 835,546 10.5

 Other real estate owned................................................... 3,431 3,530 4,133 -17.0

 Goodwill and other intangibles............................................. 77,110 76,196 58,837 31.1

 All other assets............................................................... 1,177,082 1,173,734 1,122,758 4.8 

Total liabilities and capital................................................... 5,269,220 5,182,785 4,869,295 8.2

 Noninterest-bearing deposits............................................. 653,789 686,672 629,506 3.9

 Interest-bearing deposits..................................................... 2,853,111 2,819,882 2,675,420 6.6

 Other borrowed funds...................................................... 907,414 873,189 822,244 10.4

 Subordinated debt............................................................ 68,823 67,273 55,096 24.9

 All other liabilities............................................................ 328,653 289,780 271,593 21.0

 Equity capital.................................................................. 457,430 445,989 415,435 10.1 

Loans and leases 30-89 days past due................................. 37,798 35,670 35,442 6.6 

Noncurrent loans and leases................................................ 29,523 29,055 28,684 2.9 

Restructured loans and leases............................................. 1,950 1,961 2,726 -28.5 

Direct and indirect investments in real estate........................... 513 535 657 -22.0 

1-4 Family residential mortgages.......................................... 739,280 741,119 708,223 4.4 

Mortgage-backed securities................................................ 433,604 392,969 360,242 20.4 

Earning assets.................................................................. 4,530,893 4,459,069 4,214,511 7.5 

Long-term assets (5+ years)................................................ 926,561 872,340 738,480 25.5 

Volatile liabilities............................................................... 1,700,275 1,670,312 1,580,321 7.6 

Foreign office deposits......................................................... 554,722 549,037 507,048 9.4 

Unused loan commitments................................................... 3,616,684 3,480,843 2,967,941 21.9 

Off-balance-sheet derivatives................................................ 33,448,825 28,837,675 25,679,246 30.3 

INCOME DATA 

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

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

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

Provision for credit losses.................................... 

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

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

Securities gains (losses)....................................... 

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

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

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

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

Cash dividends.................................................. 

 Net operating income....................................... 

Preliminary Preliminary 

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

Qtrs 1998 Qtrs 1997 %Change 1998 1997 97:3-98:3 

$271,261 $250,916 8.1 $92,355 $86,122 7.2 

135,027 121,108 11.5 46,051 41,890 9.9

136,234 129,809 5.0 46,303 44,232 4.7 

16,720 14,277 17.1 6,585 4,974 32.4 

89,448 77,192 15.9 29,717 27,283 8.9 

139,616 125,558 11.2 47,418 43,790 8.3 

2,051 974 110.6 681 256 165.9 

24,820 24,326 2.0 7,641 8,294 -7.9 

513 45 N/M -12 9 N/M

47,091 43,858 7.4 15,047 14,723 2.2 

15,282 13,184 15.9 5,670 4,755 19.3 

28,465 26,435 7.7 10,107 8,579 17.8

45,284 43,175 4.9 14,658 14,541 0.8 

N/M - Not meaningful 
TABLE III-A. First Three Quarters 1998, FDIC-Insured Commercial Banks 

FIRST THREE QUARTERS Preliminary 

(The way it is...) 

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

All 

Instituitions 

Asset Size Distribution Geographic Distribution by Region 

Less $100 Million $1 Billion Greater 

than $100 to to than $10 

Million $1 Billion $10 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- Southwest west West 

8,910 5,580 2,947 319 64 697 1,466 1,941 2,295 1,549 962 

Total assets (in billions).................................... $5,269.2 $257.4 $730.9 $956.8 $3,324.1 $1,917.8 $1,148.6 $835.2 $363.0 $301.5 $703.1 

Total deposits (in billions)................................. 3,506.9 219.4 601.6 641.4 2,044.5 1,142.5 751.2 584.9 266.0 246.9 515.3 

Net income (in millions).................................... 47,091 2,359 7,186 11,003 26,544 15,160 10,872 8,090 3,989 2,670 6,311 

% of unprofitable institutions.............................. 5.2 7.2 1.7 1.9 1.6 6.0 7.0 3.8 2.7 5.0 10.4 

% of institutions with earnings gains..................... 

Performance ratios (annualized, %) 

62.6 57.3 71.4 71.2 73.4 67.6 61.3 63.1 60.6 61.2 66.7 

Yield on earning assets.................................... 8.15 8.33 8.32 8.61 7.95 8.14 7.90 8.06 8.48 7.94 8.60 

Cost of funding earning assets........................... 4.06 3.74 3.74 3.90 4.21 4.58 3.80 4.01 3.87 3.45 3.54 

Net interest margin.......................................... 4.09 4.58 4.58 4.71 3.74 3.57 4.10 4.05 4.61 4.49 5.07 

Noninterest income to earning assets.................. 2.69 1.56 1.74 3.10 2.88 3.30 2.34 2.05 2.65 1.63 2.94 

Noninterest expense to earning assets.................. 4.19 4.02 3.88 4.46 4.20 4.40 3.97 3.61 4.19 3.95 4.85 

Credit loss provision to assets........................... 0.43 0.24 0.29 0.71 0.40 0.44 0.29 0.32 0.52 0.25 0.79 

Net operating income to assets........................... 1.17 1.24 1.33 1.47 1.04 1.02 1.23 1.30 1.48 1.17 1.19 

Return on assets............................................. 1.22 1.25 1.35 1.58 1.08 1.08 1.29 1.32 1.49 1.20 1.22 

Return on equity............................................. 14.30 11.19 13.98 16.48 13.97 14.40 14.34 15.38 16.41 13.08 12.41 

Net charge-offs to loans and leases..................... 0.66 0.29 0.33 1.08 0.64 0.90 0.40 0.41 0.71 0.38 0.97 

Credit loss provision to net charge-offs.................. 106.89 136.89 141.20 100.00 105.49 92.18 116.73 117.33 108.51 119.19 122.95 

Efficiency ratio................................................ 

Condition Ratios (%) 

59.78 65.01 60.50 54.94 60.95 62.13 59.22 57.67 56.51 62.87 57.77 

Earning assets to total assets.............................. 

Loss allowance to: 

85.99 92.10 92.03 89.24 83.25 82.19 87.62 89.36 90.94 89.83 85.48 

Loans and leases.......................................... 1.82 1.45 1.52 2.10 1.83 2.11 1.48 1.55 1.75 1.40 2.25 

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

Noncurrent assets plus 

193.96 134.50 171.83 201.78 201.75 171.42 200.42 190.82 200.67 153.58 269.44 

other real estate owned to assets..................... 0.65 0.76 0.65 0.74 0.61 0.74 0.55 0.59 0.64 0.59 0.65 

Equity capital ratio.......................................... 8.68 11.17 9.80 9.82 7.91 7.65 9.36 8.81 9.11 9.36 9.73 

Core capital (leverage) ratio.............................. 7.70 10.84 9.31 8.57 6.83 7.02 7.85 8.01 8.58 8.42 8.19 

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

Structural Changes (YTD) 

88.07 68.87 73.71 94.50 92.34 83.31 96.44 92.95 90.92 67.73 89.16 

New Charters................................................... 125 121 4 0 0 10 39 15 13 17 31 

Banks absorbed by mergers.............................. 359 169 167 19 4 20 137 70 48 44 40 

Failed banks................................................... 

PRIOR FIRST THREE QUARTERS

 (The way it was...) 

3 2 1 0 0 0 0 1 0 0 2 

Number of institutions................................1997 9,215 5,978 2,874 297 66 724 1,536 2,021 2,343 1,613 978

 ...............................................1995 10,052 6,828 2,816 339 69 809 1,671 2,195 2,527 1,789 1,061

 ...............................................1993 11,081 7,932 2,778 319 52 886 1,855 2,431 2,726 1,966 1,217 

Total assets (in billions).............................1997 $4,869.3 $272.3 $711.1 $899.8 $2,986.2 $1,839.9 $898.5 $793.4 $329.2 $341.4 $666.9

 ................................................1995 4,229.5 301.5 692.2 1,066.8 2,168.9 1,613.6 709.8 692.5 274.2 315.5 623.9

 ................................................1993 3,631.3 335.7 679.7 1,047.7 1,568.2 1,372.6 575.5 599.1 245.6 290.9 547.6 

Return on assets (%)................................1997 1.24 1.25 1.38 1.30 1.18 1.14 1.29 1.27 1.40 1.24 1.31

 ................................................1995 1.19 1.24 1.25 1.31 1.10 1.04 1.19 1.19 1.53 1.20 1.43

 ................................................1993 

Net charge-offs to loans & leases (%) 

1.22 1.23 1.21 1.32 1.16 1.13 1.23 1.31 1.46 1.49 1.11 

 ................................................1997 0.62 0.23 0.33 1.03 0.58 0.71 0.44 0.48 0.82 0.33 0.83

 ................................................1995 0.45 0.20 0.32 0.67 0.40 0.60 0.27 0.27 0.49 0.19 0.59

 ................................................1993 

Noncurrent assets plus 

0.83 0.29 0.49 0.94 1.00 1.25 0.41 0.50 0.57 0.25 0.96 

OREO to assets (%)..............................1997 0.68 0.77 0.71 0.82 0.62 0.72 0.61 0.62 0.67 0.55 0.77

 ................................................1995 0.92 0.85 0.87 0.89 0.95 1.14 0.69 0.64 0.65 0.64 1.18

 ................................................1993 1.95 1.19 1.48 1.74 2.46 2.63 1.33 1.11 1.14 1.09 2.65 

Equity capital ratio (%)..............................1997 8.53 10.96 9.69 9.33 7.79 7.39 9.28 8.69 9.20 8.98 9.92

 ................................................1995 8.13 10.51 9.42 8.69 7.12 7.57 8.24 8.31 8.83 8.71 8.68

 ................................................1993 7.95 9.92 8.71 8.14 7.06 7.24 8.09 8.19 8.76 8.33 8.73 

REGIONS: Northeast - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, 

Rhode Island, Vermont, U.S. Virgin Islands

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

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

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

 Southwest - Arkansas, Louisiana, New Mexico, Oklahoma, Texas

 West - Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming 
TABLE IV-A. Third Quarter 1998, FDIC-Insured Commercial Banks 

THIRD QUARTER Preliminary 

(The way it is...) 

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

All 

Institutions 

Asset Size Distribution Geographic Distribution by Region 

Less $100 Million $1 Billion Greater 

than $100 to to than $10 

Million $1 Billion $10 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- South 

west west West 

8,910 5,580 2,947 319 64 697 1,466 1,941 2,295 1,549 962 

Total assets (in billions).................................... $5,269.2 $257.4 $730.9 $956.8 $3,324.1 $1,917.8 $1,148.6 $835.2 $363.0 $301.5 $703.1 

Total deposits (in billions)................................. 3,506.9 219.4 601.6 641.4 2,044.5 1,142.5 751.2 584.9 266.0 246.9 515.3 

Net income (in millions).................................... 15,047 816 2,407 3,839 7,984 4,301 4,155 2,876 1,344 947 1,423 

% of unprofitable institutions.............................. 5.9 7.7 2.6 4.1 4.7 7.7 8.3 4.7 3.3 5.3 10.6 

% of institutions with earnings gains..................... 

Performance Ratios (annualized, %) 

57.2 52.1 65.4 67.4 71.9 62.4 56.5 58.9 54.7 55.8 59.3 

Yield on earning assets.................................... 8.21 8.40 8.37 8.70 8.00 8.21 8.03 8.04 8.58 7.93 8.63 

Cost of funding earning assets........................... 4.09 3.79 3.77 3.91 4.25 4.58 3.93 4.02 3.89 3.47 3.56 

Net interest margin.......................................... 4.12 4.60 4.60 4.79 3.75 3.63 4.11 4.02 4.69 4.46 5.07 

Noninterest income to earning assets.................. 2.64 1.67 1.79 3.33 2.72 3.07 2.50 2.14 2.80 1.68 2.73 

Noninterest expense to earning assets.................. 4.22 4.12 3.94 4.57 4.18 4.32 3.97 3.63 4.42 3.90 5.11 

Credit loss provision to assets........................... 0.50 0.25 0.33 0.72 0.50 0.51 0.31 0.30 0.56 0.29 1.10 

Net operating income to assets........................... 1.12 1.28 1.31 1.58 0.93 0.92 1.37 1.35 1.48 1.21 0.79 

Return on assets............................................. 1.15 1.28 1.33 1.62 0.97 0.90 1.47 1.38 1.49 1.26 0.82 

Return on equity............................................. 13.31 11.46 13.67 16.54 12.26 11.87 15.67 15.87 16.37 13.64 8.35 

Net charge-offs to loans and leases..................... 0.73 0.39 0.36 1.10 0.72 0.98 0.40 0.42 0.75 0.37 1.19 

Credit loss provision to net charge-offs.................. 111.33 107.48 149.87 100.85 112.14 93.65 121.60 106.96 111.23 141.78 137.86 

Efficiency ratio................................................ 

Structural Changes (QTR) 

60.07 65.15 60.80 54.11 61.77 62.10 57.23 57.38 57.91 61.76 62.66 

New charters................................................ 49 49 0 0 0 3 17 6 5 7 11 

Banks absorbed by mergers........................... 124 55 63 6 0 10 41 26 22 10 15 

Failed banks................................................ 

PRIOR THIRD QUARTERS

 (The way it was...) 

2 1 1 0 0 0 0 0 0 0 2 

Return on assets (%)................................1997 1.22 1.31 1.43 1.40 1.11 1.09 1.32 1.28 1.32 1.23 1.32

 .................................................1995 1.32 1.33 1.31 1.35 1.30 1.15 1.27 1.24 1.77 1.27 1.74

 .................................................1993 

Net charge-offs to loans & leases (%)

1.28 1.20 1.22 1.42 1.22 1.23 1.24 1.35 1.53 1.29 1.23 

 .................................................1997 0.66 0.26 0.34 1.10 0.62 0.74 0.47 0.54 0.90 0.39 0.86

 .................................................1995 0.51 0.25 0.35 0.73 0.48 0.71 0.29 0.33 0.54 0.24 0.61

 .................................................1993 0.75 0.30 0.51 0.88 0.85 1.06 0.40 0.52 0.47 0.25 0.97 

INTERNATIONAL OPERATIONS’ CONTRIBUTION NONINTEREST INCOME PROVIDES A GROWING 

TO BANK EARNINGS, 1994-1998 PROPORTION OF BANK REVENUE, 1984-1998 

Earnings from International Operations, % of Net Income Quarterly Noninterst Income, % of Net Operating Revenue* 

45 

16 

40 

12 

35 

8 

30 

4 25 

0 20 

1994 1995 1996 1997 1998 

24.7 

39.1 

1984 1986 1988 1990 1992 1994 1996 1998 

* Net operating revenue equals net income plus noninterest income. 
TABLE V-A. Loan Performance, FDIC-Insured Commercial Banks 

September 30, 1998 

Asset Size Distribution Geographical Distribution by Region 

All 

Institutions 

Less $100 Million $1 Billion Greater 

than $100 to to than $10 

Million $1 Billion $10 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- Southwest west West 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate........................... 1.17 1.34 1.01 1.16 1.21 1.24 1.19 1.21 1.05 1.27 0.97 

Construction and development........................... 1.26 1.23 1.11 1.45 1.26 1.28 1.06 1.61 1.61 1.52 0.97 

Commercial real estate.................................... 0.87 1.07 0.78 1.02 0.81 0.94 0.88 1.00 0.78 0.95 0.64 

Multifamily residential real estate........................ 0.71 0.66 0.57 0.79 0.74 0.52 0.88 0.97 0.94 0.57 0.47 

Home equity loans.......................................... 0.86 0.85 0.87 0.95 0.83 0.96 0.68 1.10 0.76 0.76 0.76 

Other 1-4 Family residential.............................. 1.38 1.68 1.23 1.26 1.45 1.35 1.46 1.33 1.20 1.53 1.42 

Commercial and industrial loans*........................... 0.84 1.52 1.41 1.18 0.58 0.57 0.66 1.24 1.74 1.31 0.76 

Loans to individuals.......................................... 2.40 2.32 2.11 2.50 2.42 2.81 2.32 2.24 2.28 1.87 1.97 

Credit card loans............................................. 2.74 2.92 3.38 2.70 2.71 2.84 3.30 2.41 2.73 1.85 2.28 

Other loans to individuals................................. 2.19 2.30 1.89 2.27 2.23 2.76 1.99 2.20 1.89 1.87 1.63 

All other loans and leases (including farm)............... 0.46 N/A N/A 1.15 0.41 0.39 0.39 0.95 0.46 0.59 0.26 

Memo: Commercial RE loans not secured by RE...... 

Percent of Loans Noncurrent** 

0.42 0.25 0.18 1.32 0.34 0.10 0.14 1.98 0.98 0.42 0.33 

All real estate loans.......................................... 0.94 0.90 0.76 0.87 1.04 1.25 0.85 0.80 0.69 0.92 0.91 

Construction and development........................... 0.90 0.70 0.87 0.91 0.95 1.57 0.73 0.91 0.92 0.69 0.93 

Commercial real estate.................................... 1.02 0.91 0.82 1.05 1.15 1.50 0.82 0.98 0.64 1.06 0.99 

Multifamily residential real estate........................ 0.82 0.70 0.68 0.79 0.91 0.92 0.96 0.73 0.58 0.38 0.81 

Home equity loans.......................................... 0.43 0.52 0.38 0.50 0.41 0.56 0.36 0.40 0.32 0.35 0.44 

Other 1-4 Family residential.............................. 0.89 0.83 0.70 0.80 1.00 0.99 0.94 0.74 0.61 0.84 0.96 

Commercial and industrial loans*........................... 0.96 1.47 1.26 0.96 0.81 1.06 0.63 0.93 1.33 1.36 0.91 

Loans to individuals.......................................... 1.42 0.93 0.76 1.52 1.55 2.23 0.95 0.91 1.19 0.59 1.11 

Credit card loans............................................. 2.04 1.85 1.77 1.96 2.13 2.32 1.97 1.77 1.72 0.98 1.73 

Other loans to individuals................................. 1.02 0.89 0.59 1.03 1.17 2.12 0.60 0.68 0.72 0.57 0.41 

All other loans and leases (including farm)............... 0.27 N/A N/A 0.49 0.24 0.26 0.16 0.42 0.30 0.28 0.25 

Memo: Commercial RE loans not secured by RE...... 

Percent of Loans Charged-off (net, YTD) 

0.31 1.03 0.43 0.58 0.28 0.25 0.21 0.37 0.25 0.61 0.45 

All real estate loans.......................................... 0.04 0.04 0.04 0.06 0.04 0.05 0.04 0.05 0.02 0.03 0.04 

Construction and development........................... 0.00 0.05 0.03 -0.01 -0.02 -0.07 0.01 0.00 0.09 0.00 -0.01 

Commercial real estate.................................... -0.02 0.04 0.03 0.06 -0.10 -0.12 0.02 0.05 -0.07 0.02 -0.04 

Multifamily residential real estate........................ 0.07 0.08 0.06 -0.01 0.12 0.00 0.04 0.02 0.06 -0.02 0.30 

Home equity loans.......................................... 0.14 0.17 0.06 0.15 0.15 0.17 0.13 0.16 0.09 0.44 0.10 

Other 1-4 Family residential.............................. 0.06 0.05 0.05 0.07 0.07 0.08 0.05 0.05 0.06 0.04 0.08 

Commercial and industrial loans........................... 0.34 0.33 0.37 0.26 0.34 0.32 0.25 0.29 0.42 0.37 0.56 

Loans to individuals.......................................... 2.74 1.15 1.46 3.57 2.68 3.46 1.92 1.65 2.92 1.24 3.94 

Credit card loans............................................. 5.37 5.73 5.70 5.93 4.93 5.37 4.87 4.57 5.27 4.52 6.22 

Other loans to individuals................................. 1.01 0.76 0.66 0.92 1.19 1.23 0.84 0.89 0.75 0.97 1.32 

All other loans and leases (including farm)............... 0.45 N/A N/A 0.34 0.52 0.52 0.17 0.34 0.18 0.13 0.89 

Memo: Commercial RE loans not secured by RE...... 

Loans Outstanding (in billions) 

-0.05 0.65 0.22 -0.57 -0.01 -0.17 0.00 0.03 0.00 0.38 -0.07 

All real estate loans.......................................... $1,300.4 $85.6 $277.9 $283.1 $653.8 $311.7 $364.8 $251.9 $111.2 $75.8 $184.9 

Construction and development........................... 102.5 6.3 26.2 25.5 44.5 11.1 35.1 19.9 9.2 9.5 17.7 

Commercial real estate.................................... 357.5 23.1 96.7 83.7 154.0 68.8 93.6 73.8 29.0 26.9 65.4 

Multifamily residential real estate........................ 42.5 1.8 9.1 11.8 19.7 11.6 9.1 8.6 3.4 2.1 7.6 

Home equity loans.......................................... 96.9 1.9 12.8 19.7 62.5 21.1 28.8 23.3 4.8 0.9 17.9 

Other 1-4 Family residential.............................. 642.4 41.6 122.1 138.5 340.2 172.4 192.8 119.0 55.3 33.3 69.7 

Commercial and industrial loans........................... 873.9 25.3 81.4 127.8 639.4 306.8 185.5 152.9 51.7 44.3 132.7 

Loans to individuals.......................................... 555.3 22.2 65.7 167.7 299.7 197.8 110.1 87.5 49.3 33.6 77.0 

Credit card loans............................................. 216.1 1.0 9.6 87.9 117.5 104.1 28.1 18.3 23.2 1.6 40.8 

Other loans to individuals................................. 339.2 21.2 56.1 79.7 182.2 93.6 82.0 69.2 26.1 32.0 36.2 

All other loans and leases (including farm)............... 420.4 20.8 26.3 41.4 331.8 157.9 75.6 60.4 34.0 16.4 76.0 

Memo: Commercial RE loans not secured by RE...... 

Memo: Other Real Estate Owned (in millions) 

35.3 0.2 0.9 2.9 31.3 11.2 8.7 3.5 2.1 1.7 8.1 

All other real estate owned................................. $3,431.0 $307.9 $759.5 $576.2 $1,787.4 $1,147.2 $849.3 $394.2 $196.5 $234.5 $609.3 

Construction and development........................... 325.2 36.1 137.0 67.5 84.5 63.8 121.5 33.1 32.9 18.0 55.8 

Commercial real estate.................................... 1,514.6 130.4 345.5 261.1 777.7 489.5 313.2 168.9 70.0 128.7 344.2 

Multifamily residential real estate........................ 115.5 8.4 22.7 32.7 51.7 54.8 20.1 11.6 8.5 2.8 17.8 

1-4 Family residential....................................... 1,143.9 102.2 230.1 206.4 605.1 279.2 385.3 173.9 67.1 63.8 174.6 

Farmland...................................................... 75.1 30.9 24.2 8.3 11.8 5.4 9.1 6.6 17.9 21.2 14.9 

Other real estate owned in foreign offices............ 256.7 0.0 0.0 0.2 256.5 254.5 0.1 0.0 0.0 0.0 2.1 

* Includes "All other loans" for institutions under $1 billion in asset size. N/A - Not Available 

** Noncurrent loan rates represent the percentage of loans in each category that are past due 90 days or more or that are in nonaccrual status. 
SAVINGS INSTITUTION PERFORMANCE – THIRD QUARTER, 1998 

• Savings Institutions Earn A Record $3.0 Billion 

• Gains From Sales Of Assets Boost Noninterest Income 

• Lower Asset Yields Reduce Net Interest Margins 

• Equity Capital Sets New Record At 8.99 Percent, But Core Capital Is Down 

Savings institution profitability continued to set quarterly records during the third quarter. The industry 

reported $3.0 billion in income — the second consecutive quarterly record for thrift profits. Third-quarter 

earnings were $136 million higher than second-quarter results, although fewer than half of all savings 

institutions (44 percent) had higher earnings compared with the previous quarter. Noninterest income 

was $899 million (41 percent) higher than in the second quarter because several large institutions reported gains from sales of assets. With the increased 

income, income tax expenses rose to $1.8 billion for 

the third quarter from $1.2 billion in the previous 

quarter. (The $604-million increase was partly attributable to a large tax benefit that one institution had 

recognized in the previous quarter.) Net interest 

income was $161 million lower this quarter, primarily 

because of lower asset yields. The industry’s average annualized return on assets (ROA) was 1.14 

percent, the second consecutive quarterly record for 

this profitability measure and the third consecutive 

quarter that industry ROA was over 1 percent. One 

third of all savings institutions reported an ROA of 

over 1 percent. 

For the first nine months of the year, thrifts earned 

$8.3 billion, $1.6 billion (24 percent) more than in the 

QUARTERLY NET INCOME, 

1994–1998 

$ Billions 

Securities and Other Gains, Net Income 

Net Operating Income 3.0 

2.8 

2.6 2.5 2.6 

2.4 2.4 2.2 2.3 

1.9 2.2 

2.0 1.9 1.8 1.7 1.8 1.6 

1.3 

-0.0 

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

1994 1995 1996 1997 1998 

first nine months of 1997. Noninterest income led the 

improvement in earnings, increasing by $1.6 billion 

(30 percent). Another significant contribution came 

from gains on the sales of securities, which were $1.9 

billion for the first nine months of 1998, up from $710 

million in the same period a year ago.1 

Profitability at small thrifts did not keep pace with that 

at larger thrifts. Smaller institutions, with less than 

$100 million in assets, tend to have higher overhead 

expenses and they rely more on net interest margins. 

For these thrifts net interest margins were 3.43 percent during the third quarter, while larger thrifts 

reported margins of 3.06 percent. The smaller institutions’ advantage of wider net interest margins was 

more than offset by higher overhead expenses, 

which were 3.41 percent of earning assets, while 

larger thrifts reported 2.41 percent. Small thrifts 

reported an aggregate ROA of less than 1 percent 

(0.80 percent) this quarter, while larger thrifts had an 

aggregate ROA of 1.16 percent. 

The industry’s interest margin declined 7 basis points 

to 3.07 percent for the third quarter, the lowest level 

since 1995. The yield on earning assets fell 8 basis 

points, while the cost of funding earning assets 

declined just 1 basis point. Smaller thrifts, with less 

than $100 million in assets, showed a decline in margins of 5 basis points. Most of the decline in the 

industry’s margins was driven by the largest thrifts. 

Savings institutions with over $5 billion in assets 

showed a 10-basis-point drop in their net interest 

margins. The merger of two large California institutions in the third quarter affected the magnitude of 

this decline. Because the merger used purchase 

accounting, only part of the income from the acquired 

institution’s operations was reported in the combined 

entity. Without the merger, the remaining group of 

large institutions would have shown a 7-basis-point 

drop in net interest margins. 

Asset quality continued to improve to its best levels in 

the 8 years that all institutions have provided consis1For institutions that file a Thrift Financial Report (TFR), these gains 

also included gains from the sale of assets held for sale, such as 

mortgages. 

FDIC Quarterly Banking Profile 

FDIC-Insured Savings Institutions 8 Third Quarter 1998 

0 
QUARTERLY NET INTEREST MARGINS, 

1994–1998 

Net Interest Margin (%) 

4.0 

3.5 

3.0 

Assets < $100 Million 

Assets > $100 Million 

3.43% 

3.06% 

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

1994 1995 1996 1997 1998 

tent measures of noncurrent loans. Noncurrent loans 

were 0.89 percent of total loans, a record low. 

Troubled assets—noncurrent loans and other real 

estate owned—also fell to a record low of 0.75 percent of assets. The coverage ratio—loan-loss 

reserves to noncurrent loans—improved to $1.10 in 

reserves for each dollar of noncurrent loans, its highest level ever. Loan-loss reserves fell slightly ($18 

million) during the quarter to just under $7 billion. 

Noncurrent loans fell by $433 million during the quarter, with almost half (48 percent) of this decline 

accounted for by one institution.2 

COVERAGE RATIO AND RESERVE LEVELS, 

1994–1998 

$ Billions Coverage Ratio (%) 

30 

Loan- Loss Reserves ($) Noncurrent Loans ($) 

Coverage Ratio (%) 

120 

25 100 

20 80 

15 60 

10 40 

5 20 

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

1994 1995 1996 1997 1998 

*Loan-Loss reserves to Noncurrent Loans and Leases. 

Net charge-offs were $404 million this quarter, up by 

$59 million from last quarter. Institutions in the 

Southeast Region reported $123 million in net 

charge-offs, up by $80 million from the previous quarter. One institution in this region sold a large creditcard portfolio and took net charge-offs of $108 

FDIC Quarterly Banking Profile 

million.3 Without this transaction, the Southeast 

Region would have reported net charge-offs of $4.9 

million for credit cards, for an annualized rate of 4.31 

percent. 

Industry assets rose by $11.8 billion during the quarter because of strong loan growth and increases in 

securities. Loans rose $5.6 billion with roughly equal 

increases in real estate loans, loans to individuals, 

and commercial and industrial loans. Real estate 

loans and loans to individuals both rose by $1.9 billion, while commercial and industrial loans increased 

by $1.6 billion. Real estate loans secured by 1-4 

family properties increased by $2.6 billion, while 

loans secured by multifamily properties declined by 

$2.4 billion. One institution involved in a merger sold 

almost $2 billion in multifamily real estate loans during the quarter.4 Total investments in securities rose 

by over $3 billion, as thrifts added $4.7 billion in 

mortgage-backed securities. 

Industry growth during the quarter was funded primarily by nondeposit borrowings. Deposits declined by 

$6.1 billion, while other borrowed funds increased by 

$13.5 billion. Much of the increase in nondeposit borrowings was from Federal Home Loan Bank 

advances, which were up by $7.1 billion at institutions 

that file a Thrift Financial Report. Equity capital 

increased to $95 billion, 8.99 percent of assets—the 

second consecutive record high for this ratio. Core 

CAPITAL RATIOS, 1992–1998 

Ratios (%) 

18 

16 

14 

12 

10 

8 

6 

4 

1992 1993 1994 1995 1996 1997 1998 

Tier 1 Risk-Based Capital 

Equity to Assets 

Total Risk-Based Capital 

Core Capital (Leverage) 

2Ocwen Federal Bank, FSB of Fort Lee, New Jersey, reported a 

$208 million decline in noncurrent loans during the quarter. 

3Chevy Chase Bank, FSB of McLean, Virginia, showed a $947 

million decline in credit cards and an $83 million increase in net 

charge-offs for the third quarter. 

4California Federal Bank, FSB, of San Francisco, California. 

Third Quarter 1998 9 FDIC-Insured Savings Institutions 
capital, as measured by the leverage ratio, declined 

from 8.11 percent to 8.08 percent, mostly because of 

a $1.1-billion increase in goodwill during the quarter. 

The added goodwill, which resulted from several 

large institutions’ use of purchase accounting in 

acquisitions, is not counted in core capital. Core capital also excluded a $217-million increase in unrealized gains on available-for-sale securities. Despite 

the slight decline in core capital, no institution was 

considered undercapitalized at the end of the third 

quarter according to risk-based capital standards. 

The decline in the number of charters slowed to 16 

for the third quarter, mostly because of an increase in 

new charters. Commercial banks absorbed 18 savings institutions with $10.9 billion in assets; savings 

institutions absorbed 8 other thrifts with $23.3 billion 

in assets; and 3 savings institutions with $2.4 billion 

in assets converted to commercial bank charters. 

But 12 newly created thrifts began operations during 

the third quarter—the most for one quarter since 

1986—and 1 commercial bank ($195 million in 

assets) and 1 credit union ($161 million in assets) 

converted their charters to thrift charters during the 

quarter. One institution, with $82 million in assets, 

ceased operations and surrendered its charter voluntarily. 

The credit union that converted to a thrift charter 

issued stock as part of its conversion. In addition to 

this transaction, 11 thrifts with $5.8 billion in assets 

converted from mutual to stock ownership during the 

quarter. Savings institutions also purchased 4 commercial banks with $1.3 billion in assets in the third 

quarter. 

In the last eight quarters, no savings institution has 

failed. This remains the longest period without a failure since the late 1950s. The number of “problem” 

thrifts remained unchanged at 18 and assets for this 

group were stable at $2.9 billion. 

NONCURRENT LOAN RATES,* 

SEPTEMBER 30, 1998 

IL IN 

KY 

MI 

OH 

WI 

Central 

0.9 1.0 

1.1 

0.7 

0.7 

ME 

NY 

PA 

Northeast 

0.9 

1.2 

0.8 

IA 

KS 

MN 

MO 

NE 

ND 

SD 

Midwest 

0.7 

0.4 

0.5 

0.6 

0.2 

0.6 

1.1 

AR 

LA 

NM OK 

TX 

Southwest 

0.5 

0.4 

0.9 

0.4 

1.2 

0.5 

AL 

FL 

MS GA 

NC 

SC 

TN 

VA WV 

Southeast 

0.8 

0.7 

0.9 1.2 

0.6 

0.5 

0.6 

0.7 0.9 

Between .75% and 1.5% 

Less than .75% 

Greater than 1.5% 

OR 

0.4 

AK 

AZ 

CA CO 

CT: 0.8 

DE: 0.7 

DC: 1.6 

HI 

ID 

MD: 2.0 

MA: 0.5 

MT 

NV 

NH: 0.7 

NJ: 3.0 

RI: 1.1 

UT 

VT: 1.3 

WA 

WY 

PR 

West 

0.1 

0.4 

0.9 0.3 

2.3 

0.4 

0.5 

N/A 

1.1 

0.4 

0.7 

N/A 

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

* Noncurrent loan rates represent the percentage of loans that 

FDIC Quarterly Banking Profile 

FDIC-Insured Savings Institutions 10 Third Quarter 1998 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE I-B. Selected Indicators, FDIC-Insured Savings Institutions* 

1998** 1997** 1997 1996 1995 1994 1993 

Return on assets (%)............................................. 1.10 0.89 0.93 0.70 0.77 0.66 0.71 

Return on equity (%)............................................. 12.30 10.56 10.84 8.40 9.40 8.28 9.32 

Core capital (leverage) ratio (%).............................. 8.08 7.91 7.95 7.76 7.80 7.65 7.45 

Noncurrent assets plus 

other real estate owned to assets (%)..................... 0.75 1.02 0.95 1.09 1.20 1.38 2.10 

Net charge-offs to loans (%).................................... 0.21 0.29 0.25 0.32 0.34 0.51 0.65 

Asset growth rate (%)............................................. 3.42 -1.30 -0.21 0.25 1.70 0.77 -2.85 

Net interest margin................................................ 3.13 3.24 3.23 3.22 3.09 3.34 3.51 

Net operating income growth (%).............................. 12.73 30.31 20.08 -13.99 13.81 22.24 21.16 

Number of institutions reporting.............................. 1,713 1,812 1,779 1,924 2,030 2,152 2,262 

Percentage of unprofitable institutions (%).................. 4.67 3.64 4.10 12.01 5.86 6.97 5.88 

Number of problem institutions................................. 18 27 21 35 49 71 146 

Assets of problem institutions (in billions).................. $3 $2 $2 $7 $14 $39 $92 

Number of failed/assisted institutions........................ 0 0 0 1 2 4 8 

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

TABLE II-B. Aggregate Condition and Income Data, FDIC-Insured Savings Institutions 

(dollar figures in millions) 

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

Preliminary 

3rd Quarter 2nd Quarter 3rd Quarter %Change 

1998 1998 1997 97:3-98:3 

1,713 1,729 1,812 -5.5 

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

CONDITION DATA

244,925 247,441 245,040 0.0 

 Total assets..................................................................... $1,056,805 $1,044,997 $1,021,858 3.4

 Loans secured by real estate............................................. 634,253 632,357 631,449 0.4 

1-4 Family Residential................................................... 510,644 508,064 505,740 1.0 

Multifamily residential property.......................................... 54,370 56,734 58,486 -7.0 

Commercial real estate................................................... 46,642 46,741 47,641 -2.1 

Construction, development, and land................................. 22,596 20,819 19,581 15.4

 Commercial & industrial loans.......................................... 19,356 17,763 16,092 20.3

 Loans to individuals......................................................... 50,711 48,850 48,935 3.6

 Other loans & leases...................................................... 3,301 3,063 3,021 9.3

 Less: Unearned income & contra accounts***..................... 164 182 227 -27.8

 Total loans & leases......................................................... 707,457 701,852 699,269 1.2

 Less: Reserve for losses................................................... 6,965 6,983 6,942 0.3

 Net loans & leases............................................................ 700,492 694,868 692,327 1.2

 Securities........................................................................ 255,112 252,071 247,412 3.1

 Other real estate owned................................................... 1,625 1,764 2,205 -26.3

 Goodwill and other intangibles............................................. 14,016 12,689 10,381 35.0

 All other assets............................................................... 85,559 83,606 69,532 23.0 

Total liabilities and capital................................................... 1,056,805 1,044,997 1,021,858 3.4

 Deposits........................................................................ 696,687 702,797 706,429 -1.4

 Other borrowed funds...................................................... 244,190 230,675 210,477 16.0

 Subordinated debt............................................................ 2,823 2,930 2,931 -3.7

 All other liabilities............................................................ 18,071 15,201 13,826 30.7

 Equity capital.................................................................. 95,033 93,394 88,195 7.8 

Loans and leases 30-89 days past due................................. 7,325 7,119 7,870 -6.9 

Noncurrent loans and leases................................................ 6,319 6,753 8,217 -23.1 

Restructured loans and leases............................................. 2,674 2,888 3,576 -25.2 

Direct and indirect investments in real estate........................... 564 619 584 -3.5 

Mortgage-backed securities................................................ 192,472 187,722 182,242 5.6 

Earning assets.................................................................. 984,909 973,862 957,542 2.9 

FHLB Advances (TFR Filers only).......................................... 125,674 118,545 106,762 17.7 

Unused loan commitments................................................... 181,855 193,484 110,484 64.6 

INCOME DATA 

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

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

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

Provision for credit losses***................................. 

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

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

Securities gains (losses)....................................... 

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

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

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

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

Cash dividends.................................................. 

 Net operating income....................................... 

Preliminary Preliminary 

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

Qtrs 1998 Qtrs 1997 %Change 1998 1997 97:3-98:3 

$53,571 $53,981 -0.8 $18,246 $18,558 -1.7 

31,594 31,424 0.5 10,840 10,957 -1.1

21,977 22,557 -2.6 7,406 7,600 -2.6 

1,344 1,806 -25.6 505 638 -20.9 

7,034 5,411 30.0 3,080 1,905 61.7 

17,114 16,539 3.5 5,897 5,883 0.3 

1,934 710 172.3 649 154 320.4 

4,211 3,694 14.0 1,763 1,136 55.2 

-23 -3 N/M -15 -3 N/M

8,252 6,636 24.4 2,955 1,999 47.8 

1,075 1,440 -25.4 404 507 -20.5 

4,862 3,449 40.9 2,313 1,187 94.8

6,897 6,118 12.7 2,510 1,883 33.3 

* Data between 1993 and 1995 do not include Resolution Trust Corporation conservatorships. Excludes one self-liquidating institution. N/M - Not Meaningful 

*** For TFR filers, includes only loan and lease loss provisions. 
TABLE III-B. First Three Quarters 1998, FDIC-Insured Savings Institutions 

FIRST THREE QUARTERS Preliminary 

(The way it is...) 

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

All 

Instituitions 

Asset Size Distribution Geographic Distribution by Region 

Less $100 Million $1 Billion Greater 

than $100 to to than $5 

Million $1 Billion $5 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- Southwest west West 

1,713 725 844 108 36 665 237 448 127 119 117 

Total assets (in billions).................................... $1,056.8 $37.8 $248.0 $214.6 $556.4 $354.6 $65.3 $171.9 $34.8 $66.1 $364.1 

Total deposits (in billions)................................. 696.7 30.7 192.3 142.6 331.1 257.0 47.2 122.2 25.2 41.3 203.8 

Net income (in millions).................................... 8,252 232 1,715 1,648 4,656 2,597 490 1,302 234 580 3,049 

% of unprofitable institutions.............................. 4.7 7.9 1.9 6.5 0.0 3.9 5.5 3.8 6.3 6.7 6.8 

% of institutions with earnings gains..................... 

Performance ratios (annualized, %) 

49.8 38.5 56.0 66.7 80.6 51.1 53.2 44.2 43.3 47.1 66.7 

Yield on earning assets.................................... 7.62 7.71 7.71 7.77 7.52 7.54 7.91 7.70 7.63 7.87 7.57 

Cost of funding earning assets........................... 4.49 4.24 4.28 4.48 4.62 4.17 4.52 4.63 4.67 4.69 4.69 

Net interest margin.......................................... 3.13 3.47 3.43 3.29 2.90 3.37 3.39 3.07 2.96 3.18 2.87 

Noninterest income to earning assets.................. 1.00 1.18 0.67 1.11 1.10 0.69 1.88 1.09 0.78 1.30 1.08 

Noninterest expense to earning assets.................. 2.43 3.31 2.64 2.73 2.16 2.48 3.43 2.62 2.23 2.85 2.06 

Credit loss provision to assets*........................... 0.18 0.09 0.15 0.31 0.14 0.12 0.41 0.24 0.13 0.32 0.14 

Net operating income to assets........................... 0.92 0.74 0.77 0.83 1.03 0.87 0.84 0.75 0.83 0.87 1.08 

Return on assets............................................. 1.10 0.84 0.94 1.08 1.19 1.02 1.05 1.04 0.92 1.21 1.20 

Return on equity............................................. 12.30 6.83 8.88 11.83 15.29 10.34 10.34 11.06 9.37 14.05 16.18 

Net charge-offs to loans and leases..................... 0.21 0.07 0.15 0.26 0.23 0.16 0.66 0.19 0.09 0.42 0.17 

Credit loss provision to net charge-offs.................. 125.05 193.74 154.63 192.30 88.49 126.70 92.27 174.98 208.06 113.20 118.25 

Efficiency ratio................................................ 

Condition Ratios (%) 

57.02 70.78 63.66 60.17 51.29 58.97 64.02 60.34 58.53 62.56 50.25 

Earning assets to total assets.............................. 

Loss allowance to: 

93.20 94.41 94.44 92.89 92.68 93.34 92.99 92.79 94.08 91.88 93.44 

Loans and leases.......................................... 0.98 0.77 0.89 1.23 0.95 1.07 0.93 0.80 0.68 0.91 1.05 

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

Noncurrent assets plus 

110.21 78.82 104.82 99.69 121.37 93.76 134.68 108.07 116.03 89.70 131.75 

other real estate owned to assets..................... 0.75 0.78 0.73 1.01 0.66 0.84 0.66 0.65 0.54 0.95 0.72 

Noncurrent RE loans to RE loans........................ 0.89 0.95 0.80 1.28 0.80 1.17 0.66 0.72 0.56 0.98 0.81 

Equity capital ratio.......................................... 8.99 12.35 10.74 9.25 7.88 10.07 10.42 9.48 9.98 8.63 7.43 

Core capital (leverage) ratio.............................. 8.08 11.92 10.18 8.47 6.73 8.91 9.85 8.48 9.22 8.28 6.64 

Gross real estate assets to gross assets............... 77.91 68.93 71.99 73.13 83.00 72.65 72.52 76.68 76.32 67.38 86.63 

Gross 1-4 family mortgages to gross assets......... 48.00 50.25 47.16 39.61 51.45 42.42 47.08 53.46 53.84 36.64 52.51 

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

Structural Changes (YTD) 

100.55 81.89 85.20 95.12 113.53 83.38 91.28 100.93 100.00 106.44 122.98 

New Charters................................................ 20 20 0 0 0 1 5 6 4 3 1 

Thrifts absorbed by mergers........................... 81 24 37 18 2 24 17 18 11 3 8 

Failed Thrifts................................................ 

PRIOR FIRST THREE QUARTERS**

 (The way it was...) 

0 0 0 0 0 0 0 0 0 0 0 

Number of institutions...............................1997 1,812 788 868 121 35 693 263 465 137 122 132

 ...............................................1995 2,060 926 973 126 35 765 313 527 157 138 160

 ...............................................1993 2,297 1,061 1,063 146 27 835 378 575 169 149 191 

Total assets (in billions).............................1997 $1,021.9 $41.0 $255.5 $246.8 $478.7 $343.4 $65.1 $172.4 $34.6 $64.7 $341.7

 ................................................1995 1,024.7 47.4 281.6 266.9 428.7 346.7 74.4 167.9 52.8 75.0 307.9

 ................................................1993 1,006.0 53.9 307.7 311.5 332.9 333.6 90.1 151.4 50.7 58.9 321.4 

Return on assets (%)................................1997 0.89 0.81 0.97 1.02 0.80 1.00 0.92 0.97 1.02 0.88 0.74

 ................................................1995 0.80 0.69 0.83 0.84 0.76 0.90 0.88 0.92 1.01 0.93 0.54

 ................................................1993 

Net charge-offs to loans & leases (%) 

0.72 1.05 0.99 0.61 0.53 0.61 0.92 1.03 1.03 1.65 0.42 

 ................................................1997 0.29 0.10 0.14 0.42 0.32 0.28 0.46 0.23 0.06 0.38 0.30

 ................................................1995 0.34 0.14 0.16 0.38 0.45 0.39 0.15 0.14 0.17 0.21 0.48

 ................................................1993 

Noncurrent assets plus 

0.63 0.16 0.28 0.50 1.13 0.64 0.24 0.11 0.15 0.33 1.03 

OREO to assets (%)***.....................1997 1.02 0.88 0.88 1.44 0.89 1.24 0.91 0.65 0.61 1.03 1.04

 ................................................1995 1.21 1.02 1.08 1.38 1.22 1.51 1.05 0.52 0.59 1.04 1.44

 .................................................1993 2.44 1.65 2.00 2.56 2.85 3.12 1.67 0.78 0.90 2.77 2.90 

Equity capital ratio (%)..............................1997 8.63 11.92 10.31 8.69 7.43 9.47 9.92 9.28 9.26 8.41 7.19

 ................................................1995 8.31 10.62 9.60 8.43 7.12 8.87 8.99 9.08 8.29 7.47 7.30

 ................................................1993 7.76 9.19 8.53 7.48 7.07 7.89 8.04 8.45 7.70 6.93 7.37 

* For TFR filers, includes only loan and lease loss provisions. 

** Data between 1993 and 1995 do not include Resolution Trust Corporation conservatorships. Exludes one self-liquidating institution. 

*** Beginning with June 1996, TFR filers report noncurrent loans net of specific reserves. Accordingly, specific reserves have been subtracted from loan-loss

 reserves, beginning with June 1996, to make the ratio more closely comparable to prior periods. 
TABLE IV-B. Third Quarter 1998, FDIC-Insured Savings Institutions 

THIRD QUARTER Preliminary 

(The way it is...) 

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

All 

Institutions 

Asset Size Distribution Geographic Distribution by Region 

Less $100 Million $1 Billion Greater 

than $100 to to than $5 

Million $1 Billion $5 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- South 

west west West 

1,713 725 844 108 36 665 237 448 127 119 117 

Total assets (in billions).................................... $1,056.8 $37.8 $248.0 $214.6 $556.4 $354.6 $65.3 $171.9 $34.8 $66.1 $364.1 

Total deposits (in billions)................................. 696.7 30.7 192.3 142.6 331.1 257.0 47.2 122.2 25.2 41.3 203.8 

Net income (in millions).................................... 2,955 75 552 577 1,752 912 215 453 73 188 1,115 

% of unprofitable institutions.............................. 6.5 9.5 3.6 9.3 5.6 4.2 9.7 6.5 7.9 6.7 11.1 

% of institutions with earnings gains..................... 

Performance Ratios (annualized, %) 

47.2 36.7 52.0 69.4 77.8 48.9 49.4 42.4 37.0 49.6 59.8 

Yield on earning assets.................................... 7.57 7.71 7.69 7.80 7.41 7.50 7.85 7.71 7.64 7.87 7.45 

Cost of funding earning assets........................... 4.50 4.28 4.30 4.50 4.60 4.18 4.54 4.63 4.72 4.71 4.68 

Net interest margin.......................................... 3.07 3.43 3.38 3.30 2.81 3.32 3.31 3.08 2.92 3.16 2.78 

Noninterest income to earning assets.................. 1.28 1.25 0.64 1.24 1.59 0.73 2.84 1.21 0.73 1.27 1.63 

Noninterest expense to earning assets.................. 2.45 3.41 2.59 2.77 2.18 2.45 3.50 2.79 2.27 2.72 2.05 

Credit loss provision to assets........................... 0.20 0.09 0.17 0.36 0.15 0.12 0.64 0.24 0.13 0.29 0.16 

Net operating income to assets........................... 0.97 0.69 0.74 0.84 1.14 0.90 1.16 0.76 0.75 0.87 1.15 

Return on assets............................................. 1.14 0.80 0.90 1.09 1.30 1.04 1.34 1.07 0.85 1.15 1.27 

Return on equity............................................. 12.71 6.49 8.37 11.90 16.43 10.47 12.94 11.31 8.56 13.28 16.87 

Net charge-offs to loans and leases..................... 0.23 0.04 0.16 0.24 0.27 0.14 1.14 0.19 0.08 0.42 0.16 

Credit loss provision to net charge-offs*............... 125.06 352.03 162.06 230.17 79.13 139.35 83.19 170.54 223.83 102.90 144.85 

Efficiency ratio................................................ 

Structural Changes (QTR) 

54.22 72.39 63.60 58.57 47.11 57.74 55.96 62.62 60.80 60.31 44.99 

New charters................................................ 12 12 0 0 0 0 5 5 2 0 0 

Thrifts absorbed by mergers........................... 26 6 12 7 1 8 7 5 3 0 3 

Failed Thrifts................................................ 

PRIOR THIRD QUARTERS**

 (The way it was...) 

0 0 0 0 0 0 0 0 0 0 0 

Return on assets (%)................................1997 0.79 0.84 0.95 0.86 0.66 1.01 0.94 0.90 1.04 0.41 0.53

 .................................................1995 0.87 0.78 0.87 0.96 0.83 0.95 0.94 0.94 1.04 1.16 0.64

 .................................................1993 

Net charge-offs to loans & leases (%)

0.48 1.02 0.97 -0.15 0.53 0.02 0.98 0.92 1.04 1.15 0.39 

 .................................................1997 0.29 0.10 0.17 0.32 0.36 0.21 0.42 0.26 0.09 0.35 0.37

 .................................................1995 0.34 0.08 0.18 0.43 0.42 0.42 0.18 0.24 0.15 0.26 0.41

 .................................................1993 0.59 0.17 0.27 0.50 0.99 0.61 0.23 0.09 0.16 0.30 0.93 

* For TFR filers, includes only loan and lease loss provisions. 

** Data between 1993 and 1995 do not include Resolution Trust Corporation conservatorships. Excludes one self-liquidating institution. 

REGIONS: Northeast - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, 

Rhode Island, Vermont, U.S. Virgin Islands

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

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

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

 Southwest - Arkansas, Louisiana, New Mexico, Oklahoma, Texas

 West - Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming 
TABLE V-B. Loan Performance, FDIC-Insured Savings Institutions 

September 30, 1998 

Asset Size Distribution Geographical Distribution by Region 

All 

Institutions 

Less $100 Million $1 Billion Greater 

than $100 to to than $5 

Million $1 Billion $5 Billion Billion 

East 

North- Southeast east Central 

West 

Mid- Southwest west West 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate........................... 0.95 1.75 1.07 0.93 0.85 0.97 1.04 0.95 1.16 1.19 0.87 

Construction, development, and land.................. 1.36 2.25 1.31 1.34 1.29 1.20 1.21 1.85 1.18 1.34 1.21 

Commercial real estate.................................... 0.89 1.37 0.89 1.21 0.56 1.04 0.94 0.82 1.16 1.21 0.50 

Multifamily residential real estate........................ 0.42 0.89 0.63 0.27 0.41 0.39 0.60 0.46 0.63 0.47 0.41 

Home equity loans.......................................... 0.65 0.63 0.84 0.61 0.54 0.89 0.45 0.57 0.80 0.09 0.40 

Other 1-4 Family residential.............................. 1.01 1.81 1.12 0.97 0.92 1.01 1.07 0.97 1.19 1.24 0.97 

Commercial and industrial loans........................... 1.47 2.36 1.63 1.16 1.43 1.97 1.71 1.57 1.51 0.64 0.61 

Loans to individuals.......................................... 1.98 2.21 1.90 2.30 1.81 1.88 2.74 2.24 1.43 1.02 2.39 

Credit card loans............................................. 2.05 1.27 3.34 3.47 1.14 1.23 2.52 3.10 3.63 0.69 4.92 

Other loans to individuals................................. 

Percent of Loans Noncurrent* 

1.96 2.24 1.78 1.88 2.06 2.03 2.78 1.99 1.32 1.32 1.96 

All real estate loans.......................................... 0.89 0.95 0.80 1.28 0.80 1.17 0.66 0.72 0.56 0.98 0.81 

Construction, development, and land.................. 1.07 1.21 1.22 1.09 0.89 1.29 1.01 1.51 0.92 0.36 1.26 

Commercial real estate.................................... 1.30 1.31 1.13 1.71 1.14 1.60 0.80 1.08 1.23 1.42 0.99 

Multifamily residential real estate........................ 0.75 0.67 0.74 1.41 0.50 1.17 0.74 0.72 0.37 3.71 0.38 

Home equity loans.......................................... 0.34 0.20 0.47 0.30 0.27 0.46 0.14 0.33 0.21 0.02 0.25 

Other 1-4 Family residential.............................. 0.88 0.92 0.74 1.25 0.83 1.13 0.63 0.68 0.51 0.83 0.87 

Commercial and industrial loans........................... 1.20 1.63 1.50 1.26 0.86 1.31 0.87 1.19 1.66 1.94 0.64 

Loans to individuals.......................................... 0.79 1.08 1.22 0.97 0.50 0.74 0.97 0.88 0.46 0.95 0.64 

Credit card loans............................................. 1.10 0.82 1.99 1.60 0.72 0.92 1.38 1.65 1.62 0.49 1.86 

Other loans to individuals................................. 

Percent of Loans Charged-off (net, YTD) 

0.70 1.09 1.16 0.73 0.43 0.70 0.91 0.67 0.40 1.38 0.43 

All real estate loans.......................................... 0.07 0.03 0.04 0.08 0.08 0.09 0.02 0.03 0.02 0.04 0.10 

Construction, development, and land.................. 0.07 0.01 0.04 0.08 0.11 0.09 -0.04 0.16 -0.15 0.00 0.19 

Commercial real estate.................................... 0.03 0.06 0.09 0.10 -0.09 0.07 0.07 -0.03 0.12 0.02 -0.03 

Multifamily residential real estate........................ 0.06 0.11 0.01 0.04 0.08 0.03 -0.04 -0.02 0.00 0.03 0.10 

Home equity loans.......................................... 0.16 0.01 0.14 0.16 0.18 0.14 0.08 0.06 0.25 0.23 0.34 

Other 1-4 Family residential.............................. 0.07 0.03 0.04 0.08 0.09 0.09 0.02 0.03 0.02 0.04 0.10 

Commercial and industrial loans........................... 0.33 0.30 0.51 0.27 0.24 0.27 0.41 0.24 0.67 0.52 0.33 

Loans to individuals.......................................... 1.97 0.51 1.54 1.95 2.26 1.06 6.12 1.79 0.67 2.07 1.82 

Credit card loans............................................. 5.00 2.05 3.65 4.69 5.30 2.53 18.09 5.99 4.22 1.77 4.23 

Other loans to individuals................................. 

Loans Outstanding (in billions) 

1.06 0.46 1.37 1.01 0.98 0.74 1.09 0.64 0.49 2.35 1.46 

All real estate loans.......................................... $634.3 $22.8 $150.3 $116.5 $344.6 $191.4 $38.2 $108.8 $22.3 $34.6 $238.9 

Construction, development, and land.................. 22.6 1.2 7.8 5.5 8.2 4.7 3.3 4.4 1.1 4.9 4.3 

Commercial real estate.................................... 46.4 1.9 15.9 12.9 15.7 21.1 3.3 5.7 1.6 3.3 11.5 

Multifamily residential real estate........................ 54.4 0.6 8.8 12.4 32.6 14.1 0.8 6.3 0.8 2.0 30.4 

Home equity loans.......................................... 17.3 0.5 5.2 3.9 7.8 6.9 1.5 4.5 0.5 0.3 3.6 

Other 1-4 Family residential.............................. 493.3 18.6 112.5 81.8 280.3 144.5 29.4 87.9 18.3 24.0 189.1 

Commercial and industrial loans........................... 19.4 0.7 4.8 5.8 8.0 8.6 1.5 2.7 0.8 1.9 3.9 

Loans to individuals.......................................... 50.7 1.8 9.9 13.6 25.5 15.3 3.6 12.0 2.3 7.6 9.9 

Credit card loans............................................. 11.2 0.1 0.7 3.6 6.7 2.8 0.5 2.7 0.1 3.7 1.4 

Other loans to individuals................................. 

Memo: Other Real Estate Owned (in millions)** 

39.6 1.7 9.1 10.0 18.7 12.5 3.2 9.3 2.2 3.9 8.5 

All other real estate owned................................. $1,625.4 $47.8 $403.2 $466.3 $708.1 $495.7 $131.5 $191.9 $39.2 $180.4 $586.6 

Construction, development, and land.................. 194.1 5.9 41.0 38.1 109.0 43.2 97.1 13.8 6.9 4.9 28.2 

Commercial real estate.................................... 251.1 7.0 90.3 102.8 51.1 103.5 9.4 39.0 10.6 41.0 47.8 

Multifamily residential real estate........................ 235.1 1.4 91.0 74.7 68.1 62.9 1.8 8.1 2.4 82.4 77.4 

1-4 Family residential....................................... 

Troubled Real Estate Asset Rates*** 

(% of total RE assets) 

1,001.5 34.1 187.2 267.0 513.2 302.1 48.1 133.7 25.2 53.5 439.0 

All real estate loans.......................................... 1.15 1.15 1.06 1.67 1.01 1.42 1.00 0.90 0.74 1.50 1.05 

Construction, development, and land.................. 1.91 1.72 1.74 1.77 2.19 2.19 3.84 1.82 1.55 0.46 1.91 

Commercial real estate.................................... 1.84 1.65 1.68 2.51 1.46 2.09 1.08 1.75 1.89 2.65 1.39 

Multifamily residential real estate........................ 1.18 0.89 1.76 2.00 0.71 1.61 0.97 0.85 0.66 7.60 0.63 

1-4 family residential....................................... 1.06 1.08 0.89 1.51 0.99 1.30 0.76 0.81 0.63 1.04 1.08 

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

** 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. 
ALL FDIC-INSURED INSTITUTIONS 

• BIF Reserve Ratio Climbs To 1.41 Percent And SAIF To 1.39 Percent 

• Two BIF-Member Commercial Banks Fail In The Third Quarter 

• The SAIF Records An Eighth Consecutive Quarter Without A Failure 

The total assets of the 10,623 depository institutions 

insured by the FDIC increased by $98 billion, or 1.6 percent, from June 30 to September 30. This growth was 

funded predominantly by nondeposit liabilities, as total 

deposits actually declined slightly (by $5.8 billion, or 0.1 

percent) during the three-month period. This is the first 

third-quarter decline in total deposits since 1992, as institutions became more reliant on federal funds purchased, 

securities repurchase agreements, Federal Home Loan 

Bank advances and other borrowed funds. 

Total FDIC-insured deposits also declined during the 

third quarter, but a $6.7-billion drop in deposits insured 

by the Bank Insurance Fund was partially offset by a 

$2.3-billion rise in deposits insured by the Savings 

Association Insurance Fund. With low insurance losses 

and minimal receivership activity, both insurance funds 

grew during the third quarter. Based on unaudited 

results, the BIF increased by $170 million, to $29.1 billion, and the SAIF rose by $121 million, to $9.7 billion. 

The ratio of the bank fund to BIF-insured deposits 

increased to 1.41 percent on September 30, up from 

1.40 percent on June 30. The reserve ratio of the SAIF 

also rose 1 basis point during the third quarter, to 1.39 

percent. 

On January 1, 1999, current law requires the FDIC to 

transfer all funds in the SAIF above the statutory minimum reserve ratio of 1.25 percent to a Special Reserve, 

a segregated account available for insurance purposes 

only after substantial decline in the SAIF reserve ratio. 

Based on figures as of September 30, $980 million 

would be transferred to the Special Reserve, after which 

the SAIF reserve ratio would be reduced to 1.25 percent. 

The FDIC initially is expected to fund the reserve with an 

estimated amount, which would be adjusted in early 

1999 when year-end 1998 figures become available. 

Two BIF-member commercial banks, with total assets of 

$329 million, failed during the third quarter. For the first 

three quarters of 1998, BIF-member failures totaled 

three, and failed-bank assets were $371 million. The 

SAIF experienced no failures during the third quarter of 

1998, and the fund has gone eight consecutive quarters 

since its most recent failure, in August 1996. 

Interstate deposits. The map below shows the percentage of each state’s deposits that are held by organizations headquartered outside of the state. These 

organizations include bank and thrift holding companies 

and independent banks and thrifts. The percentages are 

based on domestic deposits held in offices of FDICinsured banks and thrifts on June 30, 1998, adjusted for 

office ownership as of September 30, 1998. Nationally, 

38.1 percent of deposits are held by out-of-state organizations. 

PERCENT OF BRANCH DEPOSITS HELD BY OUT-OF-STATE ORGANIZATIONS, 

SEPTEMBER 30, 1998* 

6.8 

33.6 

95.6 

64.6 

80.8 

47.9 

37.9 

82.6 

37.3 44.0 

29.4 

49.0 

39.5 

26.1 

50.6 

5.9 

19.0 

26.5 

26.6 

1.7 

36.0 

16.3 

59.4 

23.0 

3.5 

22.2 

79.3 

27.5 

42.6 

58.0 

47.9 

24.7 

54.6 

23.8 

49.8 

51.1 

13.0 

21.4 

69.8 

AL 

AZ 

AR 

CO 

FL 

GA 

ID 

IL IN 

IA 

KS 

KY 

LA 

ME 

MI 

MN 

MS 

MO 

MT 

NV NE 

NM 

NY 

NC 

ND 

OH 

OK 

OR 

PA 

SC 

SD 

TN 

TX 

UT 

VA 

WA 

WV 

WI 

WY 

PR 

85.9 

Greater than 75% 

Less than 25% 

CT: 48.9 

DE: 54.1 

DC: 66.9 

MD: 52.8 

MA: 9.6 

NH: 78.1 

NJ: 45.0 

RI: 86.9 

VT: 13.3 

45.6 

CA 

0.0 

HI 

*Branch ownership is as of September 30, 1998. Deposits 

are obtained from the 1998 Summary of Deposits and are 

AK 

14.8 Between 50% and 75% 

Between 25% and 50% 

as of June 30, 1998. 

FDIC Quarterly Banking Profile 

Third Quarter 1998 15 All FDIC-Insured Institutions 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE I-C. Selected Indicators, FDIC-Insured Institutions* 

(dollar figures in millions) 1998** 1997** 1997 1996 1995 1994 1993 

Number of institutions reporting.............................. 10,623 11,027 10,922 11,452 11,970 12,603 13,220 

Total assets......................................................... $ 6,326,025 $5,891,153 $6,041,132 $5,606,609 $5,338,419 $5,019,085 $4,707,056 

Total deposits...................................................... 4,203,587 4,011,356 4,125,862 3,925,059 3,769,481 3,611,619 3,528,486 

Number of problem institutions................................. 88 98 92 117 193 318 572 

Assets of problem institutions (in billions).................. $8 $6 $6 $12 $31 $73 $334 

Number of failed/assisted institutions........................ 3 0 1 6 8 15 50 

Assets of failed/assisted institutions (in billions)............ $0.37 $0.00 $0.03 $0.22 $1.21 $1.57 $9.67 

** As of September 30. 

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

(dollar figures in millions) 

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

Preliminary 

3rd Quarter 2nd Quarter 3rd Quarter %Change 

1998 1998 1997 97:3-98:3 

 10,623 10,712 11,027 -3.7 

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

CONDITION DATA 

1,842,712 1,841,336 1,769,100 4.2 

Total assets..................................................................... $6,326,025 $6,227,782 $5,891,153 7.4

 Loans secured by real estate............................................. 1,934,631 1,917,039 1,858,318 4.1 

1-4 Family residential...................................................... 1,249,924 1,249,183 1,213,963 3.0 

Home equity loans......................................................... 114,236 114,426 113,562 0.6 

Multifamily residential property.......................................... 96,823 98,817 98,394 -1.6 

Commercial real estate................................................... 403,961 394,807 383,610 5.3 

Construction, development, and land................................. 125,063 116,541 105,694 18.3 

Other real estate loans................................................... 58,860 57,691 56,657 3.9 

Commercial & industrial loans 893,291 868,144 781,304 14.3

 Loans to individuals......................................................... 606,009 596,583 603,483 0.4

 Credit cards & related plans.......................................... 227,256 227,911 232,025 -2.1

 Other loans & leases...................................................... 423,672 416,204 364,085 16.4

 Less: Unearned income & contra accounts........................ 4,357 4,423 4,977 -12.5

 Total loans & leases......................................................... 3,853,245 3,793,547 3,602,213 7.0

 Less: Reserve for losses................................................... 64,228 63,365 61,864 3.8 

Net loans and leases......................................................... 3,789,018 3,730,182 3,540,349 7.0 

Securities........................................................................ 1,178,184 1,146,083 1,082,958 8.8 

Other real estate owned...................................................... 5,056 5,294 6,339 -20.2 

Goodwill and other intangibles............................................. 91,126 88,884 69,217 31.7 

All other assets.................................................................. 1,262,641 1,257,340 1,192,290 5.9 

Total liabilities and capital................................................... 6,326,025 6,227,782 5,891,153 7.4

 Deposits....................................................................... 4,203,587 4,209,351 4,011,356 4.8

 Other borrowed funds...................................................... 1,151,604 1,103,864 1,032,721 11.5

 Subordinated debt............................................................ 71,647 70,203 58,027 23.5

 All other liabilities............................................................ 346,724 304,981 285,420 21.5

 Equity capital.................................................................. 552,463 539,383 503,630 9.7 

Loans and leases 30-89 days past due................................. 45,123 42,789 43,312 4.2 

Noncurrent loans and leases................................................ 35,842 35,808 36,901 -2.9 

Restructured loans and leases............................................. 4,624 4,848 6,302 -26.6 

Direct and indirect investments in real estate........................... 1,077 1,154 1,242 -13.3 

Mortgage-backed securities................................................ 626,076 580,692 542,484 15.4 

Earning assets.................................................................. 5,515,803 5,432,931 5,172,052 6.6 

Unused loan commitments................................................... 3,798,539 3,674,326 3,078,426 23.4 

INCOME DATA 

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

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

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

Provision for credit losses.................................... 

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

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

Securities gains (losses)....................................... 

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

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

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

Preliminary Preliminary 

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

Qtrs 1998 Qtrs 1997 %Change 1998 1997 97:3-98:3 

$324,832 $304,897 6.5 $110,600 $104,679 5.7 

166,621 152,532 9.2 56,891 52,847 7.7

158,211 152,365 3.8 53,709 51,832 3.6 

18,064 16,082 12.3 7,090 5,613 26.3 

96,482 82,603 16.8 32,797 29,188 12.4 

156,730 142,097 10.3 53,315 49,672 7.3 

3,985 1,684 136.6 1,331 411 223.9 

29,031 28,021 3.6 9,404 9,430 -0.3 

490 41 N/M -27 7 N/M

55,343 50,494 9.6 18,002 16,723 7.6 

* Excludes insured branches of foreign banks (IBAs) and institutions in RTC conservatorship (the last of which ended in 1995). N/M - Not meaningful 
 

 

 

 

0 

TABLE III-C. Selected Insurance Fund Indicators 

(dollar figures in millions) 

Bank Insurance Fund* 

Reserve ratio (%)**..................................................................

Fund balance (unaudited).........................................................

Estimated insured deposits......................................................

SAIF-member Oakars............................................................

BIF-members........................................................................

Assessment base.....................................................................

SAIF-member Oakars............................................................

BIF-members........................................................................

Savings Association Insurance Fund 

Reserve ratio (%)**..................................................................

Fund balance (unaudited).........................................................

Estimated insured deposits......................................................

BIF-member Oakars...............................................................

SAIF-member Sassers.........................................................

Other SAIF members............................................................

Assessment base.....................................................................

BIF-member Oakars...............................................................

SAIF-member Sassers.........................................................

Other SAIF members............................................................

Preliminary 

3rd Quarter 

1998 

2nd Quarter 

1998 

3rd Quarter 

1997 

%Change 

97:3-98:3 

 1.41 1.40 1.38 2.2 

 $29,101 $28,931 $27,967 4.1 

 2,065,499 2,072,183 2,024,855 2.0 

 34,349 32,493 25,746 33.4 

 2,031,150 2,039,690 1,999,109 1.6 

 2,829,087 2,838,921 2,695,835 4.9 

 35,751 34,267 27,424 30.4 

 2,793,336 2,804,655 2,668,411 4.7 

 1.39 1.38 1.35 3.0 

 $9,731 $9,610 $9,253 5.2 

 700,074 697,744 687,044 1.9 

 277,655 268,851 239,567 15.9 

 62,215 60,633 62,302 -0.1 

 360,203 368,260 385,176 -6.5 

 739,604 732,544 716,803 3.2 

 279,833 269,358 240,072 16.6 

 68,402 66,412 68,096 0.5 

 391,370 396,774 408,636 -4.2 

* Includes U.S. branches of foreign banks. 

** Fund balance as a percent of estimated insured deposits. 

Insurance Fund Reserve Ratios* Fund Balance and Insured Deposits 

Percent of Insured Deposits ($ Millions) 

BIF Fund BIF-Insured SAIF Fund SAIF-Insured 1.41 

1.34 1.36 1.35 1.38 1.38 1.40 1.38 1.39 Balance Deposits Balance Deposits Target Ratio 1.30 1.30 

1.25 1.15 12/91 -7,028 1,957,722 101 776,351 

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

12/93 13,122 1,905,245 1,157 697,885 0.69 

12/94 21,848 1,895,258 1,937 693,610 

0.47 12/95 25,454 1,951,963 3,358 711,897 

0.28 12/96 26,854 2,007,042 8,888 683,403 0.17 

0.01 0.04 12/97 28,293 2,056,172 9,368 689,802 

-0.01 3/98 28,559 2,076,128 9,484 701,212 

BIF 6/98 28,931 2,071,753 9,610 697,386 

SAIF -0.36 9/98 29,101 2,065,499 9,731 700,074 

* Insured deposit amounts are estimates. 1998 fund balance amounts are unaudited. 12/91 12/92 12/93 12/94 12/95 12/96 12/97 3/98 6/98 9/98 

* Insurance fund balance as a percent of total insured deposits. 

TABLE IV-C. Closed/Assisted Institutions 

(dollar figures in millions) 

BIF Members 

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

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

SAIF Members 

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

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

* Through September 30. 

1998* 1997* 1997 1996 1995 1994 1993 

3 

$371 

0 

$0 

1 

$27 

5 

$182 

6 

$753 

13 

$1,392 

41 

$3,539 

0 

$0 

0 

$0 

0 

$0 

1 

$35 

2 

$426 

2 

$129 

9 

$6,105 
 

 

 

 

 

TABLE V-C. Selected Indicators, By Fund Membership* 

(dollar figures in millions) 1998** 1997** 1997 1996 1995 1994 1993 

BIF Members 

Number of institutions reporting................................................ 9,161 9,482 9,404 9,823 10,243 10,760 11,291 

BIF-member Oakars............................................................ 759 776 778 793 807 719 570 

Other BIF-members............................................................... 8,402 8,706 8,626 9,030 9,436 10,041 10,721 

Total assets........................................................................... $5,573,585 $5,139,968 $5,285,408 $4,857,761 $4,577,898 $4,248,300 $3,949,695 

Total deposits........................................................................ 3,701,174 3,500,225 3,611,453 3,404,204 3,225,650 3,062,718 2,951,980 

Net income........................................................................... 49,609 45,614 61,468 54,484 50,780 46,882.19 44,498.12 

Return on assets (%)............................................................... 1.22 1.22 1.22 1.17 1.15 1.14 1.17 

Return on equity (%)............................................................... 14.21 14.44 14.44 14.14 14.32 14.43 14.89 

Noncurrent assets plus OREO to assets (%)................................. 0.65 0.69 0.67 0.77 0.89 1.06 1.69 

Number of problem institutions................................................... 69 73 73 86 151 264 472 

Assets of problem institutions................................................... $5,413 $4,303 $4,598 $6,624 $20,166 $42,311 $269,159 

Number of failed/assisted institutions.......................................... 3 0 1 5 6 13 41 

Assets of failed/assisted institutions............................................. $371 $0 $27 $182 $753 $1,392 $3,539 

SAIF Members 

Number of institutions reporting................................................ 1,462 1,545 1,518 1,629 1,727 1,843 1,929 

SAIF-member Oakars............................................................ 112 106 111 94 77 55 28 

Other SAIF-members............................................................ 1,350 1,439 1,407 1,535 1,650 1,788 1,901 

Total assets........................................................................... $752,440 $751,184 $755,724 $748,848 $760,521 $770,785 $757,362 

Total deposits........................................................................ 502,413 511,131 514,409 520,855 543,831 548,901 576,507 

Net income........................................................................... 5,734 4,880 6,487 4,883 5,584 4,102 5,381 

Return on assets (%)............................................................... 1.06 0.90 0.94 0.67 0.76 0.56 0.72 

Return on equity (%)............................................................... 12.13 10.75 11.13 8.07 9.47 7.16 9.74 

Noncurrent assets plus OREO to assets (%)................................. 0.81 1.05 0.98 1.07 1.12 1.23 1.85 

Number of problem institutions................................................... 19 25 19 31 42 54 100 

Assets of problem institutions................................................... $2,953 $1,888 $1,662 $5,548 $10,846 $30,336 $64,973 

Number of failed/assisted institutions.......................................... 0 0 0 1 2 2 9 

Assets of failed/assisted institutions............................................. $0 $0 $0 $35 $426 $129 $6,105 

* Excludes insured branches of foreign banks (IBAs) and institutions in RTC conservatorship (the last of which ended in 1995).

 Excludes one self-liquidating institution. 

** Through September 30, ratios annualized where appropriate. 

TABLE VI-C. Estimated FDIC-Insured Deposits by Fund Membership and Type of Institution 

(dollar figures in millions) 

September 30, 1998 

Commercial Banks and Savings Institutions 

Number of Total Domestic 

Institutions Assets Deposits 

Estimated Insured Deposits 

BIF SAIF Total 

FDIC-Insured Commercial Banks............................................. 8,910 $5,269,220 $2,952,178 $1,879,396 $245,875 $2,125,271 

BIF-member..................................................................... 8,805 5,210,302 2,909,562 1,868,242 221,127 2,089,370 

SAIF-member.................................................................. 105 58,919 42,616 11,153 24,748 35,902 

FDIC-Supervised............................................................... 5,401 922,817 696,472 489,330 54,571 543,900 

OCC-Supervised............................................................... 2,520 3,049,020 1,698,664 1,080,192 146,956 1,227,148 

Federal Reserve-Supervised................................................ 989 1,297,383 557,042 309,874 44,349 354,223 

FDIC-Insured Savings Institutions............................................. 1,713 1,056,805 696,687 184,768 454,198 638,967 

OTS-Supervised Savings Institutions....................................... 1,170 796,278 509,006 64,938 401,784 466,722 

BIF-member..................................................................... 38 158,335 89,981 42,758 41,581 84,338 

SAIF-member.................................................................. 1,132 637,943 419,025 22,180 360,203 382,384 

FDIC-Supervised State Savings Banks.................................... 543 260,526 187,681 119,831 52,414 172,245 

BIF-member..................................................................... 318 204,948 146,909 118,815 14,947 133,762 

SAIF-member..................................................................

Total Commercial Banks and 

 225 55,578 40,772 1,016 37,467 38,483 

Savings Institutions................................................... 10,623 6,326,025 3,648,865 2,064,164 700,074 2,764,238 

BIF-member........................................................................ 9,161 5,573,585 3,146,452 2,029,815 277,655 2,307,470 

SAIF-member.....................................................................

Other FDIC-Insured Institutions 

 1,462 752,440 502,413 34,349 422,419 456,768 

U.S. Branches of Foreign Banks............................................. 26 9,916 2,897 1,335 0 1,335 

Total FDIC-Insured Institutions....................................... 10,649 6,335,941 3,651,762 2,065,499 700,074 2,765,573 

* Excludes $555 billion in foreign office deposits, which are uninsured. 
TABLE VII-C. Assessment Base Distribution and Rate Schedules 

BIF Assessment Base Distribution 

Assessable Deposits in Millions as of September 30, 1998 

Supervisory and Capital Ratings for First Semiannual Assessment Period, 1999 

Capital Group 

Supervisory Risk Subgroup 

A B C 

1. Well-capitalized 

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

Assessable deposit base..............................

2. Adequately capitalized 

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

Assessable deposit base..............................

3. Undercapitalized 

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

Assessable deposit base..............................

 8,707 

 $2,759,781 

 126 

 $20,698 

 6 

 $419 

94.8% 

97.6% 

1.4% 

0.7% 

0.1% 

0.0% 

266 2.9% 

$42,151 1.5% 

15 0.2% 

$1,438 0.1% 

2 0.0% 

$224 0.0% 

38 

$2,015 

13 

$1,608 

13 

$636 

0.4% 

0.1% 

0.1% 

0.1% 

0.1% 

0.0% 

Note: "Number" reflects the number of BIF members; "Base" reflects the BIF-assessable deposits held by both BIF and SAIF members. 

Institutions are categorized based on capitalization and a supervisory subgroup rating, which is generally determined 

by on-site examinations. 

SAIF Assessment Base Distribution 

Assessable Deposits in Millions as of September 30, 1998 

Supervisory and Capital Ratings for First Semiannual Assessment Period, 1999 

Capital Group 

Supervisory Risk Subgroup 

A B C 

1. Well-capitalized 

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

Assessable deposit base..............................

2. Adequately capitalized 

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

Assessable deposit base..............................

3. Undercapitalized 

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

Assessable deposit base..............................

 1,344 

 $709,389 

 17 

 $4,386 

 1 

 $123 

92.2% 

96.0% 

1.2% 

0.6% 

0.1% 

0.0% 

69 4.7% 

$19,821 2.7% 

5 0.3% 

$233 0.0% 

1 0.1% 

$64 0.0% 

15 

$4,642 

5 

$342 

1 

$103 

1.0% 

0.6% 

0.3% 

0.0% 

0.1% 

0.0% 

Note: "Number" reflects the number of SAIF members; "Base" reflects the SAIF-assessable deposits held by both BIF and SAIF members. 

Institutions are categorized based on capitalization and a supervisory subgroup rating, which is generally determined 

by on-site examinations. 

Assessment Rate Schedules 

First Semiannual 1999 Assessment Period 

Cents Per $100 of Assessable Deposits 

Capital Group 

Supervisory Risk Subgroup 

A B C 

1. Well Capitalized..........................................

2. Adequately Capitalized.................................

3. Undercapitalized..........................................

 0 

 3 

 10 

3 

10 

24 

17 

24 

27 

Note: Rates for the BIF and the SAIF are set separately by the FDIC. 

Currently, the rate schedules are identical. 
Number of FDIC-Insured "Problem" Institutions, 

1990 - 1998 

Number of Institutions 

1,500 

1,000 

500 

0 

Savings Institutions 

Commercial Banks 

800 

600 

400 

200 

0 

12/90 12/91 12/92 12/93 12/94 12/95 12/96 3/97 6/97 9/97 12/97 3/98 6/98 9/98 

$640 

$819 

$592 

$334 

$72 

$31 $12 $10 $8 $7 $6 $7 $8 $8 

12/90 12/91 12/92 12/93 12/94 12/95 12/96 3/97 6/97 9/97 12/97 3/98 6/98 9/98 

1,492 

1,426 

1,063 

572 

318 

193 

117 112 103 98 92 84 82 88 

$ Billions 

Assets of FDIC-Insured "Problem" Institutions, 

1990 - 1998 

Savings Institutions 

Commercial Banks 

Savings Institutions 

Commercial Banks 

480 410 276 146 71 49 35 35 29 27 21 16 18 18 

1,012 1,016 787 426 247 144 82 77 74 71 71 68 64 70 

Savings Institutions 298 291 184 92 39 14 7 5 3 2 2 2 3 3 

Commercial Banks 342 528 408 242 33 17 5 5 5 4 5 5 5 5 

FDIC Quarterly Banking Profile 

FDIC-Insured Commercial Banks 20 Third Quarter 1998 
NOTES TO USERS 

This publication contains financial data and other information 

for depository institutions insured by the Federal Deposit 

Insurance Corporation (FDIC). These notes are an integral 

part of this publication and provide information regarding the 

comparability of source data and reporting differences over 

time. The information presented in the FDIC Quarterly Banking Profile is divided into the following groups of institutions: 

FDIC-Insured Commercial Banks 

(Tables I-A through V-A.) 

This section covers commercial banks insured by the FDIC 

either through the Bank Insurance Fund (BIF) or through the 

Savings Association Insurance Fund (SAIF). These institutions are regulated by and submit financial reports to one of 

the three federal commercial bank regulators (the Board of 

Governors of the Federal Reserve System, the FDIC or the 

Office of the Comptroller of the Currency). 

FDIC-Insured Savings Institutions 

(Tables I-B through V-B.) 

This section covers savings institutions insured by either BIF 

or SAIF that operate under state or federal banking codes 

applicable to thrift institutions, except for one self-liquidating 

institution primarily funded by the FSLIC Resolution Fund 

(FRF). Savings institutions in Resolution Trust Corporation 

conservatorships are also excluded from these tables while 

in conservatorship, where applicable. The institutions covered in this section are regulated by and submit financial 

reports to one of two Federal regulators – the FDIC or the 

Office of Thrift Supervision (OTS). 

FDIC-Insured Institutions by Insurance Fund 

(Tables I-C through VII-C.) 

Summary balance-sheet and earnings data are provided for 

commercial banks and savings institutions according to 

insurance fund membership. BIF-member institutions may 

acquire SAIF-insured deposits, resulting in institutions with 

some deposits covered by both insurance funds. Also, SAIF 

members may acquire BIF-insured deposits. The insurance 

fund membership does not necessarily reflect which fund 

insures the largest percentage of an institution's deposits. 

Therefore, the BIF-member and the SAIF-member tables 

each include deposits from both insurance funds. Depository 

institutions that are not insured by the FDIC through either the 

BIF or SAIF are not included in the FDIC Quarterly Banking 

Profile. U.S. branches of institutions headquartered in foreign 

countries and non-deposit trust companies are not included 

unless otherwise indicated. Efforts are made to obtain finan -

cial reports for all active institutions. However, in some cases, 

final financial reports are not available for institutions that 

have closed or converted their charter. 

DATA SOURCES 

The financial information appearing in this publication is 

obtained primarily from the Federal Financial Institutions 

Examination Council (FFIEC) Call Reports and the OTS 

Thrift Financial Reports submitted by all FDIC-insured 

depository institutions. This information is stored on and 

retrieved from the FDIC's Research Information System 

(RIS) data base. 

COMPUTATION METHODOLOGY 

Certain adjustments are made to the OTS Thrift Financial 

Reports to provide closer conformance with the reporting and 

accounting requirements of the FFIEC Call Reports. Beginning in March 1997, both Thrift Financial Reports and Call 

Reports are completed on a fully consolidated basis. Previously, the consolidation of subsidiary depository institutions 

was prohibited. Now, parent institutions are required to file 

consolidated reports, while their subsidiary financial institutions are still required to file separate reports. Data from subsidiary institution reports are included in the Quarterly 

Banking Profile tables, which can lead to double-counting. No 

adjustments are made for any double-counting of subsidiary 

data. 

All asset and liability figures used in calculating performance 

ratios represent average amounts for the period (beginningof-period amount plus end-of-period amount plus any interim 

periods, divided by the total number of periods). For “poolingof-interest” mergers, the assets of the acquired institution(s) 

are included in average assets since the year-to-date income 

includes the results of all merged institutions. No adjustments 

are made for “purchase accounting” mergers. Growth rates 

represent the percentage change over a 12-month period in 

totals for institutions in the base period to totals for institutions 

in the current period. 

All data are collected and presented based on the location of 

each reporting institution's main office. Reported data may 

include assets and liabilities located outside of the reporting 

institution's home state. In addition, institutions may change 

their charters, resulting in an inter-industry migration, e.g., 

savings institutions can convert to commercial banks or commercial banks may convert to savings institutions. These 

situations can affect state and regional statistics. 

ACCOUNTING CHANGES 

Adoption of GAAP Reporting – Effective with the March 31, 

1997 Call Reports, generally accepted accounting principles 

(GAAP) were adopted as the reporting basis for the balance 

sheet, income statement and supporting schedules. New 

reporting instructions for 1997 and 1998 changed the 

amounts reported for a number of items used in the Quarterly 

Banking Profile, so that comparability with prior periods may 

be affected. Among the items most significantly affected by 

the new reporting rules are: loans & leases, reserve for 

losses, loss provisions, goodwill and other intangibles, all 

other assets and equity capital (see definitions below). More 

information on changes to the Call Report in March 1997 and 

in March 1998 is contained in Financial Institution Letters 

(FIL-27-97 and FIL-28-98), which are available through the 

FDIC World Wide Web site at www.fdic.gov/banknews/fils/, 

or from the FDIC Public Information Center, 801 17th Street, 

NW, Washington, DC 20434; telephone (800) 276-6003. 

Information on changes to the March 31, 1997 Thrift Financial 

Reports is available from the Office of Thrift Supervision, 

1700 G Street, NW, Washington, DC 20552; telephone (202) 

906-5900. 

Subchapter S Corporations –The Small Business Job Protection Act of 1996 changed the Internal Revenue Code to 

allow financial institutions to elect Subchapter S corporation 

status, beginning in 1997. A Subchapter S corporation is 

treated as a pass-through entity, similar to a partnership, for 

federal income tax purposes. It is generally not subject to any 

federal income taxes at the corporate level. Its taxable 

income flows through to its shareholders in proportion to their 

stock ownership, and the shareholders generally pay federal 

income taxes on their share of this taxable income. This can 

FDIC Quarterly Banking Profile

Second Quarter 1998 21 Notes to Users
have the effect of reducing institutions’ reported taxes and 

increasing their after-tax earnings. 

The election of Subchapter S status may result in an increase 

in shareholders’ personal tax liability. Therefore, some S corporations may increase the amount of earnings distributed as 

dividends to compensate for higher personal taxes. 

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 3/31/97, 

Federal funds sold are reported on a consolidated basis 

(domestic and foreign offices combined). Previously, Federal 

funds sold through foreign offices were reported as loans. 

All other liabilities – bank's liability on acceptances, limitedlife preferred stock, allowance for estimated off-balance 

sheet credit losses, and other liabilities. 

Assessment base 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

Risk-Based Risk-Based Tier 1 Tangible

(Percent) Capital * Capital * Leverage Equity

Well-capitalized ≥10 and ≥6 and ≥5 Š

Adequately

capitalized ≥8 and ≥4 and ≥4 Š

Undercapitalized ≥6 and ≥3 and ≥3 Š

Significantly

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

Critically

undercapitalized Š Š Š ≤2

*As a percentage of risk-weighted assets.

For purpose of BIF and SAIF assessments, risk-based 

assessment rules combine the last three capital rating 

categories into a single “undercapitalized” group. 

Supervisory risk subgroup assignments are based on 

supervisory ratings. The strongest institutions (those rated 1 

or 2) are in subgroup A, those rated 3 are in subgroup B, and 

those rated 4 or 5 are in subgroup C. 

BIF-insured deposits (estimated) – the portion of estimated 

insured deposits that is insured by the BIF. For SAIFmember “Oakar” institutions, it represents the adjusted attributable amount acquired from BIF members. 

Construction and development loans – includes loans for 

all property types under construction, as well as loans for land 

acquisition and development. 

Core capital – common equity capital plus noncumulative 

perpetual preferred stock plus minority interest in consolidated subsidiaries, less goodwill and other ineligible intangible assets. The amount of eligible intangibles (including 

servicing rights) included in core capital is limited in accordance with supervisory capital regulations. 

Cost of funding earning assets – total interest expense 

paid on deposits and other borrowed money as a percentage 

of average earning assets. 

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. 

Efficiency Ratio – Noninterest expense less amortization of 

intangible assets as a percent of net interest income plus 

noninterest income. This ratio measures the proportion of net 

operating revenues that are absorbed by overhead 

expenses, so that a lower value indicates greater efficiency. 

Estimated insured deposits – 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 

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 advances – 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 

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. Also, see “Securities”, below. 

Net charge-offs – total loans and leases charged off 

(removed from balance sheet because of uncollectibility), 

less amounts recovered on loans and leases previously 

charged off. 

Net interest margin – the difference between interest and 

dividends earned on interest-bearing assets and interest paid 

to depositors and other creditors, expressed as a percentage 

of average earning assets. No adjustments are made for 

interest income that is tax exempt. 

Net operating income – income excluding discretionary 

transactions such as gains (or losses) on the sale of investment securities and extraordinary items. Income taxes subtracted from operating income have been adjusted to exclude 

the portion applicable to securities gains (or losses). 

Noncurrent assets – the sum of loans, leases, debt securities and other assets that are 90 days or more past due, or in 

nonaccrual status. 

FDIC Quarterly Banking Profile

Notes to Users 22 Second Quarter 1998
Noncurrent loans & leases – the sum of loans and leases 

90 days or more past due, and loans and leases in nonaccrual status. 

Number of institutions reporting – the number of institutions that actually filed a financial report. 

Off-balance-sheet derivatives – represents the sum of the 

following: interest-rate contracts (defined as the notional 

value of interest-rate swap, futures, forward and option contracts), foreign-exchange-rate contracts, commodity contracts and equity contracts (defined similarly to interest-rate 

contracts). 

Futures and forward contracts – a contract in which the 

buyer agrees to purchase and the seller agrees to sell, at a 

specified future date, a specific quantity of underlying at a 

specified price or yield. These contracts exist for a variety of 

underlyings, including the traditional agricultural or physical 

commodities, as well as currencies and interest rates. Futures contracts are standardized and are traded on organized 

exchanges which set limits on counterparty credit exposure. 

Forward contracts do not have standardized terms and are 

traded over the counter. 

Option contracts – a contract in which the buyer acquires 

the right to buy from or sell to another party some specified 

amount of underlying at a stated price (strike price) during a 

period or on a specified future date, in return for compensation (such as a fee or premium). The seller is obligated to purchase or sell the underlying at the discretion of the buyer of 

the contract. 

Swaps – an obligation between two parties to exchange a series of cash flows at periodic intervals (settlement dates), for 

a specified period. The cash flows of a swap are either fixed, 

or determined for each settlement date by multiplying the 

quantity of the underlying (notional principal) by specified reference rates or prices. Except for currency swaps, the notional principal is used to calculate each payment but is not 

exchanged. 

Other borrowed funds – federal funds purchased, securities sold with agreements to repurchase, demand notes 

issued to the U.S. Treasury, other borrowed money, mortgage indebtedness, obligations under capitalized leases and 

trading liabilities, less revaluation losses on assets held in 

trading accounts. 

Other real estate owned – primarily foreclosed property. 

Direct and indirect investments in real estate ventures are 

excluded. The amount is reflected net of valuation allowances. For institutions that file a Thrift Financial Report 

(TFR), the valuation allowance subtracted also includes 

allowances for other repossessed assets. Also, for TFR filers 

the components of other real estate owned are reported 

gross of valuation allowances. 

Percent of institutions with earnings gains – the percent 

of institutions that increased their net income (or decreased 

their losses) compared to the same period a year earlier. 

“Problem” institutions – federal regulators assign a composite rating to each financial institution, based upon an 

evaluation of financial and operational criteria. The rating is 

based on a scale of 1 to 5 in ascending order of supervisory 

concern. “Problem” institutions are those institutions with 

financial, operational, or managerial weaknesses that 

threaten their continued financial viability. Depending upon 

the degree of risk and supervisory concern, they are rated 

either a “4” or “5”. For all BIF-member institutions, and for all 

SAIF-member institutions for which the FDIC is the primary 

federal regulator, FDIC composite ratings are used. For all 

SAIF-member institutions whose primary federal regulator is 

the OTS, the OTS composite rating is used. 

Reserves for losses – the allowance for loan and lease 

losses and the allocated transfer risk reserve on a consolidated basis. Prior to March 31, 1997, institutions filing a Thrift 

Financial Report (TFR) included specific reserves, while Call 

Report filers included only general valuation allowances. 

Beginning March 31, 1997, TFR reporters net these specific 

reserves against each loan balance. Also beginning March 

31, 1997, the allowance for off-balance-sheet credit exposures was moved to “Other liabilities”; previously, it had been 

included in the general valuation allowance. 

Restructured loans and leases – loan and lease financing 

receivables with terms restructured from the original contract. 

Excludes restructured loans and leases that are not in compliance with the modified terms. 

Return on assets – net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total assets. The basic yardstick of bank profitability. 

Return on equity – net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total equity capital. 

Risk-weighted assets – assets adjusted for risk-based capital definitions which include on-balance-sheet as well as offbalance-sheet items multiplied by risk-weights that range 

from zero to 100 percent. A conversion factor is used to 

assign a balance sheet equivalent amount for selected offbalance-sheet accounts. 

SAIF-insured deposits (estimated) – the portion of estimated insured deposits that is insured by the SAIF. For BIFmember “Oakar” institutions, it represents the adjusted attributable amount acquired from SAIF members. 

Securities – excludes securities held in trading accounts. 

Banks' securities portfolios consist of securities designated 

as “held-to-maturity”, which are reported at amortized cost 

(book value), and securities designated as “available-forsale”, reported at fair (market) value. 

Securities gains (losses) – realized gains (losses) on heldto-maturity and available-for-sale securities, before adjustments for income taxes. Thrift Financial Report (TFR) filers 

also include gains (losses) on the sales of assets held for 

sale. 

Troubled real estate asset rate – noncurrent real estate 

loans plus other real estate owned as a percent of total real 

estate loans and other real estate owned. 

Unearned income & contra accounts – unearned income 

and loans-in-process for TFR filers. Beginning March 31 

1997, TFR filers net the unearned income and the loans-inprocess against each loan balance, leaving just the unearned 

income on loans reported by Call Report filers. 

Unused loan commitments – includes credit card lines, 

home equity lines, commitments to make loans for construction, loans secured by commercial real estate, and unused 

commitments to originate or purchase loans. 

Volatile liabilities – the sum of large-denomination time 

deposits, foreign-office deposits, federal funds purchased, 

securities sold under agreements to repurchase, and other 

borrowings. 

Yield on earning assets – total interest, dividend and fee 

income earned on loans and investments as a percentage of 

average earning assets. 

FDIC Quarterly Banking Profile

Second Quarter 1998 23 Notes to Users