FDIC QUARTERLY A 

Quarterly 

Quarterly Banking Profile: 

Third Quarter 2021 

Commercial Real Estate: 

Resilience, Recovery, and 

Risks Ahead 

Implications of Record Deposit 

Inflows for Banks During 

the Pandemic 

2021 

Volume 15, Number 4 

Federal Deposit 

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

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Chairman 

Jelena McWilliams 

Director, Division of Insurance and Research 

Diane Ellis 

Executive Editors 

George French 

Shayna M. Olesiuk 

Managing Editors 

Rosalind Bennett 

Alan Deaton 

Patrick Mitchell 

Philip A. Shively 

Editors 

Clayton Boyce 

Kathy Zeidler 

Publication Manager 

Lynne Montgomery 

Media Inquiries 

(202) 898-6993 

FDIC QUARTERLY 
FDIC QUARTERLY i 

2021 FDIC QUARTERLY 

V olume 15 • Number 4

Quarterly Banking Profile: Third Quarter 2021

FDIC-insured institutions reported aggregate net income of $69.5 billion in third quarter 

2021, an increase of $18.4 billion (35.9 percent) from the same quarter a year ago, primarily 

due to a $19.7 billion decline in provision expense. Two-thirds of all banks (66.5 percent) 

reported annual improvements in quarterly net income. The share of profitable institutions 

increased slightly year over year to 95.9 percent. However, net income declined $875.5 million 

(1.2 percent) from second quarter 2021, driven by an increase in provision expense from 

second quarter 2021 (up $5.5 billion to negative $5.2 billion). The banking industry reported 

an aggregate return on average assets ratio of 1.21 percent, up 24 basis points from a year ago 

but down 3 basis points from second quarter 2021. See page 1. 

Community Bank Performance Community banks—which represent 91 percent of insured institutions—reported net

income of $8.6 billion in the third quarter, up $1.4 billion (19.6 percent) from third quarter

2020. Nearly two-thirds of all community banks (65.8 percent) reported higher net income

from the year-ago quarter. The pretax return on assets ratio increased 14 basis points from

the year-ago quarter to 1.56 percent. See page 15. 

Insurance Fund Indicators The Deposit Insurance Fund (DIF) balance totaled $121.9 billion at the end of third quarter

2021, an increase of $1.4 billion from the previous quarter. Assessment income of $1.7 billion

drove the fund balance increase. Interest earned on investments, negative provisions for

insurance losses, and other miscellaneous income also added to the fund balance. Operating

expenses and unrealized losses on available-for-sale securities partially offset the increase in

the fund balance. The DIF reserve ratio was 1.27 percent on September 30, 2021, unchanged

from the previous quarter and 3 basis points lower than the previous year. See page 23. 

Featured Articles: 

Commercial Real Estate: Resilience, Recovery, and Risks Ahead

Commercial real estate (CRE) lending is important to the banking industry, which holds 

$2.7 trillion in CRE loans. In the pandemic, CRE conditions in several property types came 

under stress. The pandemic challenged the brick-and-mortar retail, hotel, and office sectors, 

while multifamily largely held up and the industrial sector benefitted from increased 

demand. Market conditions improved with economic recovery in 2021, but some of the 

changes the CRE industry experienced in the pandemic may be long-lasting. The issues 

facing CRE will be important considerations for a large share of the banking industry. 

Initially the pandemic threatened to significantly challenge banks’ CRE loan quality, but loan 

delinquency rates remained low through third quarter 2021 against the backdrop of economic 

rebound, stimulus support, and loan forbearance. This article analyzes conditions across 

major CRE property types and discusses FDIC-insured institutions’ exposure to CRE loans, 

credit quality, and potential challenges ahead. See page 31. 

Implications of Record Deposit Inflows for Banks During the Pandemic

In 2020, the pandemic disrupted the global economy, creating stress and uncertainties for 

consumers and businesses. The U.S. government responded with assistance programs that, 

combined with increased personal savings, contributed to a record inflow of deposits to 

banks. The deposit inflows created historically high bank liquidity and many banks shifted 

their balance sheet composition to shorter-term, lower-yielding and non-yielding assets. The 

shift in asset composition and a prolonged period of low interest rates caused the net interest 

margin to decline to its lowest level on record. The loans-to-deposits ratio reached record 

lows in 2020 and 2021, while the cash-to-deposits ratio rose to 1.6 times the pre-pandemic 

level and almost three times the previous trough in 2006. Benefits of higher liquidity include 

reduced dependence on less stable sources of funding and an ability to respond to unforeseen 

deposit account withdrawals. However, higher liquidity can also challenge bank earnings, 

depending on loan demand and the shape of the yield curve. See page 45. 

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

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

an endorsement of its accuracy by the Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited. Please

provide the FDIC’s Division of Insurance and Research with a copy of any publications containing reprinted material.

QUARTERLY BANKING PROFILE Third Quarter 2021 

INSURED INSTITUTION PERFORMANCE 

Net Income Continued to Increase Year Over Year 

Net Interest Margin Rose Modestly From Last Quarter’s Record Low 

Quarterly Loan Growth Continued 

Asset Quality Continued to Improve 

Net Income Continued to 

Increase Year Over Year, 

Driven by a Third 

Consecutive Quarter of 

Negative Provision Expense 

Quarterly net income rose $18.4 billion (35.9 percent) to $69.5 billion from the same period 

one year ago. The increase was primarily due to a $19.7 billion decline in provision expense 

(provisions). Net interest income increased over the same period as the decline in interest 

expense outpaced the decline in interest income. Two-thirds of all banks (66.5 percent) 

reported annual improvements in quarterly net income, and the share of profitable 

institutions increased slightly year over year to 95.9 percent. However, net income declined 

$875.5 million (1.2 percent) from second quarter 2021, driven by an increase in provisions 

from second quarter 2021 (up $5.5 billion to negative $5.2 billion). The banking industry 

reported an aggregate return on average assets ratio of 1.21 percent, up 24 basis points from 

a year ago but down 3 basis points from second quarter 2021. 

Net Interest Margin Rose 

Modestly From Last 

Quarter’s Record Low 

The quarterly net interest margin (NIM) improved to 2.56 percent in the third quarter, up 

6 basis points from the record low in second quarter but down 12 basis points from one 

year earlier. The yield on earning assets rose 5 basis points from the record low in second 

quarter 2021 to 2.73 percent, while the cost of funds declined 1 basis point from the second 

quarter to a new record low of 0.17 percent. 

Quarterly NIM expansion was accompanied by a $5.2 billion (4 percent) increase in net 

interest income from the prior quarter. The improvement was driven by a $4.6 billion 

increase in interest income and a $573 million decline in interest expense. Year over year, 

net interest income increased $5.6 billion driven by a decline in interest expense (down 

$5.7 billion) that outpaced the decline in interest income (down $55 million). Improvement 

in net interest income was widespread, as nearly three-quarters of banks (72.1 percent) 

reported higher net interest income compared with a year ago. 

Noninterest Income 

Continued to Increase 

Noninterest income increased (up $3.4 billion, or 4.7 percent) from third quarter 2020 primarily 

due to higher “all other noninterest income” (up $2.2 billion, or 6.5 percent) and higher investment banking fee income (up $1.8 billion, or 70 percent).1 Higher interchange fees were the 

main driver of the increase in all other noninterest income. More than half of all institutions 

(57.5 percent) reported higher noninterest income compared with the year-ago quarter. 

1 All other noninterest income includes, but is not limited to, bankcard and credit card interchange fees, income and fees 

from wire transfers, and income and fees from automated teller machines. Among banks who filled out schedule RI-E, 

interchange fees was the largest driver of the increase in all other noninterest income. 

Chart 1 Chart 2 

Quarterly Net Income 

All FDIC-Insured Institutions 

$ Billions Securities and Other Gains/Losses, Net 

Net Operating Income 100 

80 

60 

40 

20 

0 

-20 

-40 

-60 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Source: FDIC. 

Note: Date labels are centered under the first quarter of each year. Data starts in third quarter 2007. 

Quarterly Net Interest Margin 

All FDIC-Insured Institutions

 Assets > $250 Billion Assets $100 Million - $1 Billion

 Assets $10 Billion - $250 Billion Assets < $100 Million 

Percent Assets $1 Billion - $10 Billion

5.0 

4.5 

4.0 

3.5 

3.0 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Source: FDIC. 

Note: Date labels are centered under the first quarter of each year. Data starts in third quarter 2007. 

FDIC QUARTERLY 1 
2021 • Volume           15  • Number 4

Noninterest Expense 

Increased From the 

Year-Ago Quarter 

Noninterest expense rose $4.4 billion (3.5 percent) year over year, led by an increase in “all 

other noninterest expense” and salary and benefit expense.2 Higher marketing and data 

processing expenses drove the increase in all other noninterest expense. Average assets 

per employee (up $1.1 million) also increased from a year ago to $11.3 million. While nearly 

three-fourths of all banks (73.6 percent) reported higher noninterest expense compared 

with the year-ago quarter, noninterest expense as a percentage of average assets declined 

11 basis points from third quarter 2020 to 2.23 percent, matching last quarter’s record low. 

Provision Expense Was 

Negative for the Third 

Consecutive Quarter 

Provisions have been negative for three consecutive quarters. However, provisions were 

less negative this quarter, declining from negative $10.8 billion in second quarter 2021 

to negative $5.2 billion in third quarter 2021. Provision expense declined $19.7 billion 

(136.2 percent) from the year-ago quarter to negative $5.2 billion.3 Fifty-eight percent of all 

institutions reported lower provisions compared with the year-ago quarter. 

The net number of banks that have adopted current expected credit loss (CECL) accounting 

increased by one from second quarter 2021 to 313.4 CECL adopters reported aggregate 

negative provisions of $5.5 billion in third quarter, $5.2 billion less negative than second 

quarter 2021, and $16.6 billion less negative than one year ago. Provisions for banks that 

have not adopted CECL accounting totaled $226 million (up from negative $122.4 million a 

quarter ago and down from $3.4 billion one year ago). 

Allowance for Loan and 

Lease Losses to Total 

Loans Remained Higher 

Than the Pre-Pandemic 

Level 

The allowance for loan and lease losses (ALLL) as a percentage of total loans and leases 

declined 55 basis points to 1.69 percent from the year-ago quarter due to negative 

provisions, but ALLL remains higher than the level of 1.18 percent reported in fourth 

quarter 2019. Similarly, ALLL as a percentage of loans 90 days or more past due or in 

nonaccrual status (coverage ratio) declined 12 percentage points from the year-ago quarter 

to 180.1 percent but remained well above the financial crisis average of 79.1 percent.5 All 

insured institutions except the largest Quarterly Banking Profile (QBP) asset size group 

(greater than $250 billion) reported higher aggregate coverage ratios compared with 

second quarter 2021. 

2 All other noninterest expenses include, but are not limited to, automated teller machine and interchange expenses, 

legal fees, advertising and marketing expenses, consulting expenses, data processing expenses, and FDIC deposit 

insurance assessments. Among banks who filled out schedule RI-E, higher marketing and data processing expenses 

drove of the increase in all other noninterest expense. 

3 Provisions for credit losses include both losses for loans and securities for CECL adopters but only loan losses for 

non-adopters. 

4 Changes to the number of CECL accounting adopters may result from closures, mergers and acquisitions, or 

examination or audit findings. 

5 The financial crisis refers to the period between December 2007 and June 2009. 

Chart 3 Chart 4 

Change in Quarterly Loan-Loss Provisions 

All FDIC-Insured Institutions 

Quarter-Over-Quarter Change 

($ Billions) 

Source: FDIC. 

Note: Date labels are centered under the first quarter of each year. Data starts in third quarter 2007. 

-60 

-50 

-40 

-30 

-20 

-10 

0 

10 

20 

30 

40 

50 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: FDIC. 

Note: The reserve coverage ratio is the loan-loss reserves to noncurrent loans and leases. 

Date labels are centered under the first quarter of each year. Data starts in third quarter 2007. 

$ Billions Coverage Ratio (Percent) 

Reserve Coverage Ratio 

All FDIC-Insured Institutions 

0 

50 

100 

150 

200 

250 

300 

350 

400 

450

 Loan-Loss Reserves (Le ̃ Axis) 

Noncurrent Loans (Le ̃ Axis)

 Noncurrents Adjusted for GNMA Guaranteed Loans (Le ̃ Axis)

 Reserve Coverage Ratio (Right Axis) 

Coverage Adjusted for GNMA Guaranteed Loans (Right Axis) 

0 

50 

100 

150 

200 

250 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

2 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

Total Assets Increased 

From the Previous Quarter 

Total assets increased $462.6 billion (2 percent) from second quarter 2021 to $23.3 trillion. 

Securities rose $225 billion (3.9 percent), while cash and balances due from depository 

institutions rose $126.8 billion (3.6 percent). Growth in mortgage-backed securities (up 

$101.9 billion, or 3 percent) and U.S. Treasury securities (up $99.3 billion, or 8.5 percent) 

continued to drive quarterly increases in total securities. Loans and securities with 

maturities longer than 5 years now make up almost a third (31.3 percent) of total assets, 

up from 28 percent in fourth quarter 2019. 

Loan and Lease Balances 

Increased From the 

Previous Quarter and a 

Year Ago 

Total loan and lease balances increased $62.7 billion (0.6 percent) from second quarter 2021. 

Several portfolios contributed meaningfully to the industry’s growth, including 1-4 family 

residential mortgages (up $41.3 billion, or 1.9 percent), consumer loans (up $39.6 billion, or 

2.3 percent), nonfarm nonresidential commercial real estate loans (CRE) (up $24.5 billion, 

or 1.5 percent), and loans to nondepository institutions (up $24.2 billion, or 3.9 percent). 

Annually, total loan and lease balances increased $10 billion (0.1 percent) as growth in 

loans to nondepository institutions (up $95.9 billion, or 17.5 percent), consumer loans 

(up $87.1 billion, or 5.1 percent), and nonfarm nonresidential CRE loan balances (up 

$63.2 billion, or 4.1 percent) helped offset declines in commercial and industrial (C&I) loans 

(down $301.8 billion, or 11.9 percent). The decline in C&I balances was driven by Paycheck 

Protection Program loan forgiveness and repayment. 

Deposit Growth 

Accelerated From the 

Previous Quarter 

Deposits grew 2.3 percent ($436 billion) in third quarter, up from 1.5 percent growth 

($271.8 billion) reported in second quarter 2021 but below the first quarter 2021 gain that 

was boosted by federal support programs. Deposits above $250,000 continued to drive 

the quarterly increase (up $445.2 billion, or 4.5 percent). Interest-bearing deposit growth 

(up $284.6 billion, or 2.4 percent) outpaced that of noninterest-bearing deposits (up 

$185.4 billion, or 3.6 percent). More than two-thirds (68.7 percent) of banks reported higher 

deposit balances compared with the previous quarter. 

Noncurrent Loan Balances 

Continued to Decline 

Quarter Over Quarter 

Loans and leases 90 days or more past due or in nonaccrual status (noncurrent loan 

balances) continued to decline (down $7 billion, or 6.3 percent) from second quarter 2021, 

supporting a 7 basis point reduction in the noncurrent rate to 0.94 percent. Noncurrent C&I 

loans declined most among loan categories from the previous quarter (down $2.3 billion, 

or 12.2 percent), followed by noncurrent 1–4 family residential loans (down $1.8 billion, 

or 3.7 percent). Fifty-eight percent of all banks reported a reduction in noncurrent loans 

compared with second quarter 2021. 

Chart 5 Chart 6 

Source: FDIC. 

Note: Date labels are centered under the first quarter of each year. Data starts in third quarter 2007. 

Percent 

Noncurrent Loan Rate and Quarterly Net Charge-O
 Rate 

All FDIC-Insured Institutions 

0 

1 

2 

3 

4 

5 

6 

Quarterly Net Charge-O ̃ Rate 

Noncurrent Rate 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

-8 

-4 

Quarterly Change in Loan Balances 

All FDIC-Insured Institutions 

Source: FDIC. 

Note: FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitized

loan balances back onto banks’ balance sheets in the first quarter of 2010. Although the total

amount consolidated cannot be precisely quantified, the industry would have reported a decline

in loan balances for the quarter absent this change in accounting standards. Date labels are

centered under the first quarter of each year. Data starts in third quarter 2007. 

$ Billions Percent 

-300 

-200 

-100 

0 

100 

200 

300 

400 

500 

Quarterly Change (Le ̃ Axis) 

12-Month Growth Rate (Right Axis) 

0 

4 

8 

12 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

FDIC QUARTERLY 3 
2021 • Volume           15  • Number 4

The Net Charge-Off Rate 

Declined Further to a 

Record Low 

Net charge-offs declined for the fifth consecutive quarter (down $7.4 billion, or 

58.4 percent). In third quarter, the net charge-off rate fell 27 basis points to 0.19 percent, 

a record low since QBP data collection began in 1984. A decline in net charge-offs of 

credit card loans (down $3.4 billion, or 50.3 percent) and C&I loans (down $2.3 billion, or 

72.2 percent) drove three-fourths (77.4 percent) of the reduction in net charge-offs from 

the year-ago quarter. 

Equity Capital Growth 

Remained Strong 

Equity capital rose $33.8 billion (1.5 percent) from second quarter 2021 and the leverage 

capital ratio increased 3 basis points to 8.86 percent. Retained earnings contributed 

$14.8 billion to equity formation despite a decline in retained earnings from second quarter 

(down $19 billion, or 56.2 percent). Banks distributed 78.6 percent of third quarter earnings 

as dividends, which were up $18.2 billion (49.7 percent) from second quarter 2021. Twentynine percent of banks reported higher dividends compared with the year-ago quarter. 

The number of institutions with capital ratios that did not meet Prompt Corrective Action 

requirements for the well-capitalized category decreased by one to eight from second 

quarter 2021.6 

Three New Banks Opened 

and No Banks Failed in 

Third Quarter 2021 

The number of FDIC-insured institutions declined from 4,951 in second quarter 2021 to 

4,914. During third quarter 2021, three new banks opened, 39 institutions merged with 

other FDIC-insured institutions, one bank ceased operations, and no banks failed.7 The 

number of banks on the FDIC’s “Problem Bank List” declined by five from second quarter to 

46, the lowest level since QBP data collection began in 1984. Total assets of problem banks 

increased $4.8 billion (10.5 percent) from second quarter to $50.6 billion. 

Author: 

James K. Presley-Nelson 

Senior Financial Analyst 

Division of Insurance and Research 

6 Prompt Corrective Action categories are assigned based on reported capital ratios only and do not include the effects of 

regulatory downgrades. 

7 The number of insured financial institutions excludes two banks that did not file Call Reports this quarter. One bank is 

a newly insured trust company; the other bank ceased operations but its charter remains active. 

Chart 7 Chart 8 

Source: FDIC. 

Note: Date labels are centered under the first quarter of each year. Data starts in third quarter 2007. 

Number 

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

0 

100 

200 

300 

400 

500 

600 

700 

800 

900 

1,000 

0 

50 

100 

150 

200 

250 

300 

350 

400 

450 

500 

Assets ($ Billions) 

Number of Problem Banks 

Assets of Problem Banks 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Quarterly Change in Deposits 

All FDIC-Insured Institutions 

$ Billions 

Source: FDIC. 

Note: Date labels are centered under the first quarter of each year. Data starts in third quarter 2007. 

-200 

0 

200 

400 

600 

800 

1,000 

1,200 

1,400 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

4 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Return on assets (%)

Return on equity (%)

Core capital (leverage) ratio (%)

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

Net charge-offs to loans (%)

Asset growth rate (%)

Net interest margin (%)

Net operating income growth (%)

Number of institutions reporting

Commercial banks

Savings institutions

Percentage of unprofitable institutions (%)

Number of problem institutions

Assets of problem institutions (in billions)

Number of failed institutions

2021** 2020** 2020 2019 2018 2017 2016 

1.28 0.58 0.72 1.29 1.35 0.97 1.04

12.66 5.51 6.85 11.38 11.98 8.60 9.27 

8.86 8.80 8.81 9.66 9.70 9.63 9.48

0.46 0.63 0.61 0.55 0.60 0.73 0.86 

0.27 0.53 0.50 0.52 0.48 0.50 0.47

9.57 14.82 17.36 3.92 3.03 3.79 5.09 

2.54 2.88 2.82 3.36 3.40 3.25 3.13 

158.85 -53.89 -38.78 -3.14 45.45 -3.27 4.43

4,914 5,033 5,002 5,177 5,406 5,670 5,913

4,301 4,401 4,375 4,518 4,715 4,918 5,112

613 632 627 659 691 752 801 

3.24 4.77 4.68 3.73 3.44 5.61 4.48

46 56 56 51 60 95 123 

$51 $54 $56 $46 $48 $14 $28 

0 2 4 4 0 8 5 

* Excludes insured branches of foreign banks (IBAs).

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

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

(dollar figures in millions)

Number of institutions reporting

Total employees (full-time equivalent)

CONDITION DATA 

Total assets 

Loans secured by real estate

1-4 Family residential mortgages

Nonfarm nonresidential

Construction and development 

Home equity lines

Commercial & industrial loans 

Loans to individuals 

Credit cards 

Farm loans 

Other loans & leases 

Less: Unearned income

Total loans & leases 

Less: Reserve for losses*

Net loans and leases

Securities** 

Other real estate owned 

Goodwill and other intangibles

All other assets

3rd Quarter 

2021 

2nd Quarter 

2021 

3rd Quarter 

2020 

%Change 

20Q3-21Q3 

4,914

2,056,573

$23,251,659

5,182,410

2,221,812

1,619,362

402,056

270,278

2,243,280

1,796,993

805,961

73,102

1,627,506

2,408

10,920,884

185,064

10,735,820

5,953,236

3,819

396,651

6,162,132

4,951

2,058,714

$22,789,018

5,109,205

2,180,518

1,594,870

393,582

277,871

2,335,852

1,757,415

791,990

69,763

1,588,915

2,987

10,858,163

195,175

10,662,988

5,728,187

4,149

393,756

5,999,938

5,033

2,071,908

$21,220,827

5,144,713

2,240,755

1,556,192

386,394

312,892

2,545,076

1,709,912

796,450

76,796

1,438,032

3,623

10,910,908

244,267

10,666,641

4,793,031

4,548

385,497

5,371,110

-2.4

-0.7

9.6 

0.7 

-0.9

4.1

4.1

-13.6

-11.9

5.1 

1.2 

-4.8

13.2 

-33.5

0.1 

-24.2

0.7 

24.2

-16.0

2.9 

14.7

Total liabilities and capital

Deposits 

Domestic office deposits 

Foreign office deposits

Other borrowed funds

Subordinated debt

All other liabilities

Total equity capital (includes minority interests)

Bank equity capital 

23,251,659

19,166,663

17,633,886

1,532,777

989,701

66,246

687,128

2,341,922

2,339,483

22,789,018

18,730,697

17,163,933

1,566,764

1,018,754

66,798

664,561

2,308,209

2,305,706

21,220,827

17,118,378

15,671,764

1,446,614

1,207,522

68,489

640,711

2,185,727

2,183,161

9.6 

12.0 

12.5 

6.0 

-18.0

-3.3

7.2 

7.2 

7.2 

Loans and leases 30-89 days past due

Noncurrent loans and leases

Restructured loans and leases 

Mortgage-backed securities

Earning assets

FHLB Advances

Unused loan commitments

Trust assets 

Assets securitized and sold

Notional amount of derivatives

47,781

102,745

45,356

3,488,704

21,241,499

190,103

9,076,319

19,981,395

462,865

187,643,803

45,551

109,692

47,187

3,386,816

20,799,371

207,582

8,917,077

19,845,541

463,194

186,058,293

58,711

127,180

49,637

2,798,839

19,320,745

304,509

8,412,087

17,775,673

505,520

181,124,686

-18.6

-19.2

-8.6

24.7

9.9 

-37.6

7.9 

12.4

-8.4

3.6 

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

INCOME DATA Quarters 2021 Quarters 2020 %Change 2021 2020 20Q3-21Q3 

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****

Total net income (includes minority interests)

Bank net income 

Net charge-offs

Cash dividends 

Retained earnings

Net operating income

$419,914

28,104

391,810

-30,411

228,174

377,691

2,465

58,998

31 

216,203

216,035

21,682

114,872

101,162

214,181

$461,567 -9.0 $143,168 $143,223 0.0 

65,184 -56.9 8,772 14,470 -39.4

396,382 -1.2 134,397 128,753 4.4

129,062 -123.6 -5,233 14,460 -136.2

210,032 8.6 76,012 72,602 4.7

373,934 1.0 128,040 123,656 3.6 

6,730 -63.4 338 2,479 -86.4

21,837 170.2 18,391 14,491 26.9 

-110 N/M 3 -5 N/M

88,201 145.1 69,551 51,223 35.8 

88,027 145.4 69,496 51,136 35.9 

42,795 -49.3 5,277 12,696 -58.4

62,251 84.5 54,649 15,822 245.4

25,776 292.5 14,847 35,314 -58.0

82,744 158.9 69,271 49,299 40.5

* For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.

** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.

*** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13,

this item represents the provision for loan and lease losses. 

**** See Notes to Users for explanation. N/M - Not Meaningful

FDIC QUARTERLY 5 
2021 • Volume           15  • Number 4

 

 

 

 

 

 

 

 

 

 

 

 

TABLE III-A. Third Quarter 2021, All FDIC-Insured Institutions 

THIRD QUARTER 

(The way it is...) 

All Insured 

Institutions 

Asset Concentration Groups* 

Credit 

Card 

Banks 

International 

Banks 

Agricultural 

Banks 

Commercial 

Lenders 

Mortgage 

Lenders 

Consumer 

Lenders 

Other 

Specialized 

<$1 Billion 

All Other 

<$1 Billion 

All Other 

>$1 Billion 

Number of institutions reporting

Commercial banks

Savings institutions

Total assets (in billions)

Commercial banks

Savings institutions

Total deposits (in billions)

Commercial banks

Savings institutions

Bank net income (in millions)

Commercial banks

Savings institutions

4,914

4,301

613 

$23,251.7

21,781.9

1,469.8

19,166.7

17,933.0

1,233.7

69,496

65,471

4,025

11 

10 

1 

$476.3

394.0

82.3 

338.3 

275.8 

62.5 

6,555

5,410

1,145

5 

5 

0 

$5,868.2

5,868.2

0.0 

4,615.6

4,615.6

0.0 

15,111

15,111

0 

1,135

1,124

11 

$295.5 

289.1 

6.4

251.1 

247.5

3.6 

1,029

978 

51 

2,483 287 34

2,241 84 21 

242 203 13 

$7,242.1 $758.7 $332.1 

6,779.5 160.3 324.5

462.5 598.4 7.6 

6,088.0 669.9 280.6 

5,722.8 138.3 274.0

365.1 531.6 6.6 

22,055 1,617 1,511

20,766 476 1,493

1,289 1,141 18 

342

310 

32 

$76.3 

71.1 

5.2 

63.5 

60.0 

3.6 

289 

125 

163 

521 

426

95 

$129.3 

103.8 

25.6 

111.3 

90.1 

21.2 

367 

329 

38 

96 

80 

16 

$8,073.3

7,791.5

281.8 

6,748.5

6,508.9

239.6 

20,963

20,784

180 

Performance Ratios (annualized, %) 

Yield on earning assets

Cost of funding earning assets

Net interest margin

Noninterest income to assets

Noninterest expense to assets

Credit loss provision to assets** 

Net operating income to assets

Pretax return on assets

Return on assets 

Return on equity 

Net charge-offs to loans and leases

Loan and lease loss provision to 

2.73 

0.17 

2.56 

1.32 

2.23 

-0.09

1.20 

1.53 

1.21 

11.97 

0.19 

11.34

0.96 

10.38 

5.93 

8.62 

0.02 

5.49

7.14

5.50 

40.66

1.54

1.97 

0.11 

1.86 

1.48

1.96 

-0.12

1.05 

1.28 

1.04

11.54

0.29 

3.79 

0.35 

3.44

0.66 

2.25 

0.06 

1.38 

1.59 

1.40

12.63 

0.04

3.16 1.86 4.10

0.19 0.14 0.61 

2.96 1.72 3.49

0.99 0.79 0.95 

2.25 1.36 1.54

-0.07 -0.01 0.29 

1.22 0.87 1.82 

1.56 1.11 2.41

1.23 0.87 1.84

11.26 9.80 19.40

0.09 0.00 0.24

2.57 

0.23 

2.34

3.09 

3.38 

0.02 

1.51 

1.91 

1.54

11.16 

0.08 

3.42

0.29 

3.13 

1.30 

2.89 

0.03 

1.15 

1.32 

1.15 

10.30 

0.01 

2.31 

0.11 

2.20 

1.30 

2.10 

-0.13

1.05 

1.35 

1.05 

10.55 

0.16 

net charge-offs

Efficiency ratio 

% of unprofitable institutions

% of institutions with earnings gains

-81.71

60.40

4.13

66.56 

0.15 

54.23

0.00 

90.91 

-73.22

62.22 

0.00 

80.00 

256.52 

57.63 

3.96 

59.21 

-131.85 -1,049.62 138.37 

59.77 55.12 36.56 

2.46 9.06 2.94

73.14 56.10 67.65 

99.30 

63.62 

13.45

55.85 

716.29 

68.09 

4.22

62.96 

-171.87

63.07 

2.08 

68.75 

Structural Changes 

New reporters

Institutions absorbed by mergers

Failed institutions 

3 

39 

0 

0 

0 

0 

0 

0 

0 

0 

11 

0 

0 0 0 

27 0 0 

0 0 0 

3 

0 

0 

0 

0 

0 

0 

1 

0 

PRIOR THIRD QUARTERS 

(The way it was...) 

Return on assets (%)

Net charge-offs to loans & leases (%)

2020

2018 

2016 

2020

2018 

2016 

0.97 

1.41

1.10 

0.46

0.45

0.44

3.00 

3.09 

2.26 

3.63 

3.70 

3.11 

0.96 

1.21 

0.90 

0.67 

0.44

0.48

1.31 

1.42

1.29 

0.13 

0.13 

0.09 

1.05 1.05 1.48

1.31 1.22 1.38 

1.01 1.03 1.02 

0.23 0.01 0.85 

0.17 0.01 0.69 

0.22 0.04 0.66 

2.64

3.82 

2.68 

0.12 

0.23 

0.16 

1.16 

1.22 

0.95 

0.08 

0.14

0.19 

0.68 

1.48

1.21 

0.39 

0.37 

0.41

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

** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator

represents the provision for loan and lease losses. 

6 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE III-A. Third Quarter 2021, All FDIC-Insured Institutions 

THIRD QUARTER 

(The way it is...) 

All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less Than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion to 

$10 Billion 

$10 Billion 

to $250 

Billion 

Greater 

Than $250 

Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

Number of institutions reporting

Commercial banks

Savings institutions

Total assets (in billions)

Commercial banks

Savings institutions

Total deposits (in billions)

Commercial banks

Savings institutions

Bank net income (in millions)

Commercial banks

Savings institutions

4,914

4,301

613 

$23,251.7

21,781.9

1,469.8

19,166.7

17,933.0

1,233.7

69,496

65,471

4,025

853 

747

106 

$51.9 

45.8

6.0 

43.4

38.7 

4.7

124

109 

15 

3,066 833 149

2,717 693 132 

349 140 17 

$1,111.2 $2,195.4 $6,918.4

974.3 1,837.0 6,329.2

136.9 358.3 589.2 

949.1 1,847.2 5,769.5

836.9 1,553.9 5,295.1

112.2 293.2 474.4

3,743 7,554 24,285

3,261 6,663 22,313

482 892 1,972

13 

12 

1 

$12,974.9

12,595.6

379.3 

10,557.6

10,208.4

349.2

33,790

33,126

664

583 561 1,052 1,264 1,088 366 

303 511 909 1,225 1,019 334

280 50 143 39 69 32 

$4,290.4 $4,727.9 $5,607.9 $4,211.3 $1,941.5 $2,472.7

3,852.4 4,588.8 5,514.8 4,168.1 1,336.1 2,321.8

438.0 139.1 93.1 43.2 605.4 151.0 

3,527.7 3,958.9 4,414.4 3,495.2 1,675.8 2,094.7

3,177.1 3,842.3 4,345.1 3,459.8 1,136.3 1,972.4

350.6 116.7 69.3 35.4 539.5 122.3 

11,459 14,664 17,135 10,781 5,502 9,956

10,464 14,561 16,585 10,673 4,564 8,624

994 103 550 108 938 1,333

Performance Ratios (annualized, %) 

Yield on earning assets

Cost of funding earning assets

Net interest margin

Noninterest income to assets

Noninterest expense to assets

Credit loss provision to assets** 

Net operating income to assets

Pretax return on assets

Return on assets 

Return on equity 

Net charge-offs to loans and leases

Loan and lease loss provision to 

net charge-offs

Efficiency ratio 

% of unprofitable institutions

% of institutions with earnings gains

2.73 

0.17 

2.56 

1.32 

2.23 

-0.09

1.20 

1.53 

1.21 

11.97 

0.19 

-81.71

60.40

4.13

66.56 

3.60 

0.36 

3.24

1.78 

3.61 

0.07 

0.94

1.11 

0.96 

7.00 

0.04

311.87 

75.54

14.54

50.29 

3.73 3.69 3.30 

0.33 0.27 0.22 

3.40 3.42 3.07 

1.39 1.22 1.29 

2.93 2.60 2.40

0.07 0.07 -0.09

1.35 1.38 1.41

1.60 1.76 1.84

1.36 1.39 1.42

12.37 12.75 13.32 

0.05 0.13 0.23 

240.09 78.95 -68.07

63.70 58.65 57.38 

2.25 0.96 1.34

68.20 74.91 78.52 

2.15 

0.10 

2.05 

1.35 

2.01 

-0.14

1.05 

1.32 

1.05 

11.01 

0.21 

-134.08

62.40

0.00 

76.92 

2.65 2.78 2.28 2.70 2.89 3.65 

0.19 0.14 0.12 0.18 0.17 0.26 

2.45 2.64 2.16 2.52 2.73 3.38 

1.30 1.17 1.57 1.09 0.95 1.76 

2.14 2.14 2.13 2.22 2.16 2.81 

0.01 -0.14 -0.15 -0.14 -0.03 0.01 

1.07 1.24 1.25 1.02 1.14 1.62 

1.38 1.59 1.53 1.31 1.39 2.15 

1.08 1.25 1.24 1.03 1.15 1.64

10.37 11.87 12.94 10.50 11.36 15.87 

0.19 0.21 0.14 0.24 0.09 0.26 

-6.23 -124.29 -149.07 -121.05 -79.41 -1.58

60.22 59.33 60.14 65.19 61.09 56.51 

3.95 6.42 4.37 3.64 3.58 3.55 

70.67 72.37 60.65 59.81 71.97 75.41

Structural Changes 

New reporters

Institutions absorbed by mergers

Failed institutions 

3 

39 

0 

3 

7 

0 

0 0 0 

27 4 1 

0 0 0 

0 

0 

0 

0 1 1 0 0 1 

2 5 6 13 8 5 

0 0 0 0 0 0 

PRIOR THIRD QUARTERS 

(The way it was...) 

Return on assets (%)

Net charge-offs to loans & leases (%)

2020

2018 

2016 

2020

2018 

2016 

0.97 

1.41

1.10 

0.46

0.45

0.44

0.90 

1.09 

0.97 

0.10 

0.19 

0.15 

1.26 1.19 1.16 

1.28 1.42 1.50 

1.13 1.10 1.09 

0.11 0.18 0.61 

0.13 0.19 0.65 

0.12 0.23 0.62 

0.80 

1.36 

1.09 

0.49

0.41

0.43

0.89 0.86 1.15 0.64 1.16 1.35 

1.28 1.48 1.29 1.37 1.49 1.74

0.87 1.25 1.00 1.09 1.16 1.40

0.43 0.49 0.39 0.51 0.22 0.68 

0.55 

0.50 

0.53 

0.51 

0.19 0.48

0.27 0.47

0.24

0.28 

0.68 

0.58 

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

** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator

represents the provision for loan and lease losses. 

FDIC QUARTERLY 7 
2021 • Volume           15  • Number 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE IV-A. First Three Quarters 2021, All FDIC-Insured Institutions 

FIRST THREE QUARTERS 

(The way it is...) 

All Insured 

Institutions 

Asset Concentration Groups* 

Credit 

Card 

Banks 

International 

Banks 

Agricultural 

Banks 

Commercial 

Lenders 

Mortgage 

Lenders 

Consumer 

Lenders 

Other 

Specialized 

<$1 Billion 

All Other 

<$1 Billion 

All Other 

>$1 Billion 

Number of institutions reporting

Commercial banks

Savings institutions

Total assets (in billions)

Commercial banks

Savings institutions

Total deposits (in billions)

Commercial banks

Savings institutions

Bank net income (in millions)

Commercial banks

Savings institutions

4,914

4,301

613 

$23,251.7

21,781.9

1,469.8

19,166.7

17,933.0

1,233.7

216,035

203,731

12,303

11 

10 

1 

$476.3

394.0

82.3 

338.3 

275.8 

62.5 

20,626

17,378

3,248

5 

5 

0 

$5,868.2

5,868.2

0.0 

4,615.6

4,615.6

0.0 

50,285

50,285

0 

1,135

1,124

11 

$295.5 

289.1 

6.4

251.1 

247.5

3.6 

3,079

2,935

143

2,483 287 34

2,241 84 21 

242 203 13 

$7,242.1 $758.7 $332.1 

6,779.5 160.3 324.5

462.5 598.4 7.6 

6,088.0 669.9 280.6 

5,722.8 138.3 274.0

365.1 531.6 6.6 

67,403 4,726 4,951

63,308 1,362 4,898

4,095 3,364 54

342

310 

32 

$76.3 

71.1 

5.2 

63.5 

60.0 

3.6 

923 

418

505 

521 

426

95 

$129.3 

103.8 

25.6 

111.3 

90.1 

21.2 

1,063

941

122 

96 

80 

16 

$8,073.3

7,791.5

281.8 

6,748.5

6,508.9

239.6 

62,978

62,206

772 

Performance Ratios (annualized, %) 

Yield on earning assets

Cost of funding earning assets

Net interest margin

Noninterest income to assets

Noninterest expense to assets

Credit loss provision to assets** 

Net operating income to assets

Pretax return on assets

Return on assets 

Return on equity 

Net charge-offs to loans and leases

Loan and lease loss provision to 

2.72 

0.18 

2.54

1.35 

2.23 

-0.18

1.26 

1.62 

1.28 

12.66 

0.27 

10.81 

1.00 

9.81 

5.41

7.88 

-0.55

5.66 

7.40

5.67 

42.88

2.17 

1.97 

0.11 

1.86 

1.62 

2.03 

-0.27

1.17 

1.50 

1.17 

13.08 

0.41

3.83 

0.39 

3.44

0.71 

2.28 

0.06 

1.40

1.62 

1.43

12.83 

0.04

3.16 1.84 4.02

0.22 0.15 0.68 

2.95 1.69 3.34

1.00 0.85 1.10 

2.21 1.40 1.53 

-0.11 -0.02 0.05 

1.26 0.86 2.02 

1.62 1.13 2.67 

1.28 0.87 2.04

11.70 10.09 21.45

0.11 0.01 0.26 

2.65 

0.25 

2.40

3.13 

3.35 

0.03 

1.62 

2.08 

1.69 

12.15 

0.04

3.46

0.32 

3.14

1.31 

2.93 

0.05 

1.12 

1.30 

1.13 

10.09 

0.02 

2.31 

0.12 

2.19 

1.27 

2.12 

-0.20

1.06 

1.36 

1.07 

10.75 

0.22 

net charge-offs

Efficiency ratio 

% of unprofitable institutions

% of institutions with earnings gains

-133.00

60.44

3.24

76.01 

-32.39

53.14

0.00 

100.00 

-191.20

61.82 

0.00 

80.00 

235.27 

57.63 

2.03 

73.66 

-141.46 -508.17 30.55 

59.10 56.03 36.15 

2.38 8.01 2.94

84.29 59.93 85.29 

229.49

61.93 

9.94

48.54

337.45

68.73 

3.45

66.03 

-197.81

64.36

1.04

83.33 

Condition Ratios (%) 

Earning assets to total assets

Loss allowance to:

Loans and leases 

Noncurrent loans and leases

Noncurrent assets plus

other real estate owned to assets 

Equity capital ratio 

Core capital (leverage) ratio

Common equity tier 1 capital ratio*** 

Tier 1 risk-based capital ratio***

Total risk-based capital ratio***

Net loans and leases to deposits

Net loans to total assets

Domestic deposits to total assets 

91.35 

1.69 

180.12 

0.46

10.06 

8.86 

14.17

14.27

15.63 

56.01 

46.17

75.84

94.73

7.55 

911.15 

0.68 

13.45

14.19

16.89 

17.05 

18.81 

107.35 

76.24

69.15 

89.08 

1.92 

230.96 

0.28 

9.00 

8.08 

15.31 

15.38 

16.75 

38.35 

30.16 

55.99 

93.71 

1.48

180.60 

0.53 

11.14

10.59 

14.90

14.91

16.04

68.36 

58.08 

84.97

92.05 97.57 93.52 

1.33 0.66 2.03 

143.86 92.49 312.20 

0.61 0.21 0.47

10.89 8.77 9.41

9.41 8.68 9.93 

12.86 24.29 15.90 

12.93 24.29 15.93 

14.21 24.73 16.92 

72.45 32.29 82.45

60.90 28.51 69.67 

83.89 88.14 84.50

94.01

1.67 

192.43

0.29 

13.88 

13.39 

29.12 

29.15 

30.08 

32.25 

26.85 

83.26 

93.89 

1.32 

185.04

0.43

11.10 

10.83 

18.01 

18.03 

19.11 

60.35 

51.96 

86.07 

91.36 

1.45

134.97

0.48

9.95 

8.43

13.83 

13.96 

15.44

51.65 

43.17

81.36 

Structural Changes 

New reporters

Institutions absorbed by mergers

Failed institutions 

9 

92 

0 

0 

0 

0 

0 

0 

0 

0 

23 

0 

2 0 0 

63 1 0 

0 0 0 

7 

1 

0 

0 

2 

0 

0 

2 

0 

PRIOR FIRST THREE QUARTERS 

(The way it was...) 

Number of institutions

Total assets (in billions)

Return on assets (%)

Net charge-offs to loans & leases (%)

2020

2018 

2016 

2020

2018 

2016 

2020

2018 

2016 

2020

2018 

2016 

5,033

5,477

5,980

$21,220.8

17,672.8

16,766.6

0.58 

1.35 

1.04

0.53 

0.48

0.45

11 

12 

13 

$508.6 

640.0

500.8 

1.07 

2.83 

2.30 

4.06

3.90 

3.21 

5 

5 

5 

$5,288.8

4,245.9

4,145.8

0.57 

1.22 

0.90 

0.74

0.50 

0.53 

1,182

1,366

1,461

$281.0 

285.2 

273.5 

1.34

1.35 

1.24

0.14

0.13 

0.11 

2,768 303 36 

2,878 408 70 

3,012 478 62 

$7,505.7 $635.9 $132.0 

6,232.8 352.0 212.8 

5,678.8 386.7 205.5 

0.60 1.07 1.36 

1.27 1.12 1.46

0.99 0.98 1.01 

0.25 0.02 0.56 

0.17 0.01 0.74

0.20 0.05 0.65 

230 

233 

304

$40.1

36.0 

54.7

2.67 

3.82 

2.57 

0.24

0.15 

0.16 

430

453

585 

$86.8 

78.0 

103.3 

1.10 

1.16 

0.96 

0.07 

0.13 

0.18 

68 

52 

60 

$6,742.0

5,590.2

5,417.6

0.42

1.39 

1.07 

0.46

0.38 

0.42

Noncurrent assets plus

OREO to assets (%) 2020 0.63 0.84 0.39 0.83 0.73 0.24 0.33 0.42 0.62 0.70 

Equity capital ratio (%)

2018 

2016 

2020

2018 

2016 

0.62 

0.88 

10.29 

11.28 

11.21 

1.13 

1.01 

11.51 

15.27 

15.16 

0.39 

0.62 

9.11 

9.98 

9.79 

0.89 

0.78 

11.55 

11.32 

11.61 

0.65 1.39 0.49

0.88 1.78 0.87 

11.25 8.63 9.31 

11.96 10.99 10.67 

11.98 11.32 10.00 

0.46

0.59 

17.08 

16.87 

15.49

0.77 

1.00 

12.22 

12.05 

12.01 

0.65 

1.01 

10.10 

11.06 

11.10 

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

** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator

represents the provision for loan and lease losses. 

*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.

8 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE IV-A. First Three Quarters 2021, All FDIC-Insured Institutions 

FIRST THREE QUARTERS 

(The way it is...) 

All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less Than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion to 

$10 Billion 

$10 Billion 

to $250 

Billion 

Greater 

Than $250 

Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

Number of institutions reporting

Commercial banks

Savings institutions

Total assets (in billions)

Commercial banks

Savings institutions

Total deposits (in billions)

Commercial banks

Savings institutions

Bank net income (in millions)

Commercial banks

Savings institutions

4,914

4,301

613 

$23,251.7

21,781.9

1,469.8

19,166.7

17,933.0

1,233.7

216,035

203,731

12,303

853 

747

106 

$51.9 

45.8

6.0 

43.4

38.7 

4.7

405

360 

45

3,066 833 149

2,717 693 132 

349 140 17 

$1,111.2 $2,195.4 $6,918.4

974.3 1,837.0 6,329.2

136.9 358.3 589.2 

949.1 1,847.2 5,769.5

836.9 1,553.9 5,295.1

112.2 293.2 474.4

10,912 22,579 75,153

9,404 19,714 69,088

1,507 2,865 6,065

13 

12 

1 

$12,974.9

12,595.6

379.3 

10,557.6

10,208.4

349.2

106,987

105,165

1,822

583 561 1,052 1,264 1,088 366 

303 511 909 1,225 1,019 334

280 50 143 39 69 32 

$4,290.4 $4,727.9 $5,607.9 $4,211.3 $1,941.5 $2,472.7

3,852.4 4,588.8 5,514.8 4,168.1 1,336.1 2,321.8

438.0 139.1 93.1 43.2 605.4 151.0 

3,527.7 3,958.9 4,414.4 3,495.2 1,675.8 2,094.7

3,177.1 3,842.3 4,345.1 3,459.8 1,136.3 1,972.4

350.6 116.7 69.3 35.4 539.5 122.3 

35,359 43,317 53,032 36,714 16,488 31,124

32,145 42,823 51,390 36,383 13,693 27,297

3,214 495 1,642 332 2,794 3,827

Performance Ratios (annualized, %) 

Yield on earning assets

Cost of funding earning assets

Net interest margin

Noninterest income to assets

Noninterest expense to assets

Credit loss provision to assets** 

Net operating income to assets

Pretax return on assets

Return on assets 

Return on equity 

Net charge-offs to loans and leases

Loan and lease loss provision to 

net charge-offs

Efficiency ratio 

% of unprofitable institutions

% of institutions with earnings gains

2.72 

0.18 

2.54

1.35 

2.23 

-0.18

1.26 

1.62 

1.28 

12.66 

0.27 

-133.00

60.44

3.24

76.01 

3.71 

0.39 

3.31 

1.69 

3.50 

0.06 

1.04

1.21 

1.06 

7.72 

0.06 

201.14

73.60 

10.79 

59.79 

3.76 3.68 3.30 

0.37 0.31 0.25 

3.39 3.38 3.05 

1.39 1.25 1.29 

2.93 2.60 2.35 

0.08 0.03 -0.16

1.33 1.40 1.48

1.59 1.79 1.94

1.35 1.43 1.50 

12.29 13.04 14.03

0.05 0.14 0.32 

267.16 36.99 -81.52

63.91 58.85 56.62 

1.89 0.84 1.34

76.09 88.84 94.63

2.14

0.11 

2.03 

1.39 

2.04

-0.25

1.12 

1.43

1.13 

11.84

0.29 

-213.61

62.88 

84.62

2.66 2.73 2.28 2.70 2.92 3.65 

0.22 0.15 0.12 0.18 0.19 0.30 

2.45 2.57 2.16 2.52 2.73 3.35 

1.23 1.17 1.67 1.20 0.97 1.73 

2.10 2.17 2.20 2.21 2.17 2.72 

-0.08 -0.23 -0.26 -0.21 -0.06 -0.11

1.12 1.24 1.31 1.16 1.16 1.73 

1.46 1.58 1.67 1.49 1.43 2.30 

1.14 1.25 1.30 1.18 1.17 1.76 

10.90 11.79 13.72 12.03 11.73 17.05 

0.26 0.29 0.21 0.33 0.10 0.35 

-65.56 -155.37 -279.60 -124.75 -117.92 -49.86

60.22 61.27 60.63 63.15 61.06 55.44

4.46 6.60 3.33 1.66 2.48 3.55 

82.85 77.90 71.48 74.68 75.55 81.15 

Condition Ratios (%) 

Earning assets to total assets

Loss allowance to:

Loans and leases 

Noncurrent loans and leases

Noncurrent assets plus

other real estate owned to assets 

Equity capital ratio 

Core capital (leverage) ratio

Common equity tier 1 capital ratio*** 

Tier 1 risk-based capital ratio***

Total risk-based capital ratio***

Net loans and leases to deposits

Net loans to total assets

Domestic deposits to total assets 

91.35 

1.69 

180.12 

0.46

10.06 

8.86 

14.17

14.27

15.63 

56.01 

46.17

75.84

92.42

1.49

139.06 

0.64

13.75 

13.43

24.04

24.08

25.14

60.78 

50.84

83.64

93.93 93.19 92.86 

1.39 1.42 1.82 

209.08 200.94 174.80

0.46 0.50 0.62 

11.04 10.93 10.60 

10.76 10.29 9.42

16.10 14.61 14.03

16.13 14.64 14.24

17.25 15.73 15.48

68.88 73.44 68.24

58.84 61.79 56.91 

85.41 84.04 81.54

90.02 

1.71 

178.08 

0.37 

9.53 

8.13 

14.06

14.09

15.58 

45.10

36.70 

70.56 

90.45 91.16 90.43 90.88 93.85 94.22

1.64 1.72 1.57 1.85 1.31 1.95 

174.19 193.57 186.29 172.68 79.34 339.28 

0.47 0.43 0.38 0.50 0.79 0.37 

10.45 10.48 9.53 9.77 10.04 10.29 

9.21 8.41 8.46 8.90 8.97 9.84

14.32 13.64 14.47 13.48 15.21 14.78

14.39 13.73 14.53 13.57 15.31 15.01 

15.71 14.92 15.78 15.49 16.38 16.18 

57.70 54.57 52.46 54.05 52.36 69.59 

47.44 45.70 41.30 44.86 45.20 58.95 

77.04 81.34 69.49 67.55 86.28 83.56 

Structural Changes 

New reporters

Institutions absorbed by mergers

Failed institutions 

9 

92 

0 

9 

21 

0 

0 0 0 

61 8 2 

0 0 0 

0 

0 

0 

0 3 3 0 1 2 

9 10 16 28 22 7 

0 0 0 0 0 0 

PRIOR FIRST THREE QUARTERS 

(The way it was...) 

Number of institutions

Total assets (in billions)

Return on assets (%)

Net charge-offs to loans & leases (%)

2020

2018 

2016 

2020

2018 

2016 

2020

2018 

2016 

2020

2018 

2016 

5,033

5,477

5,980

$21,220.8

17,672.8

16,766.6

0.58 

1.35 

1.04

0.53 

0.48

0.45

981 

1,335

1,589

$59.0 

79.2 

94.1

0.91 

1.05 

0.95 

0.14

0.17 

0.15 

3,135 766 138 

3,369 635 129 

3,656 621 104

$1,089.7 $2,019.2 $6,198.1

1,107.7 1,694.4 6,036.1

1,171.9 1,741.0 4,983.0

1.21 1.04 0.49

1.25 1.32 1.45

1.09 1.06 1.08 

0.11 0.21 0.70 

0.11 0.21 0.69 

0.11 0.21 0.62 

13 

9 

10 

$11,854.9

8,755.5

8,776.7

0.49

1.31 

1.01 

0.54

0.43

0.46

598 572 1,079 1,300 1,112 372 

671 633 1,180 1,397 1,193 403

731 731 1,287 1,500 1,280 451

$3,887.9 $4,349.6 $5,004.1 $4,093.2 $1,719.5 $2,166.6

3,275.4 3,654.9 3,996.3 3,641.5 1,119.5 1,985.3

3,158.4 3,478.0 3,785.4 3,644.3 1,001.6 1,698.9

0.53 0.42 0.73 0.35 0.95 0.80 

1.21 1.43 1.29 1.27 1.42 1.71 

0.85 1.03 0.98 1.09 1.10 1.43

0.49 0.58 0.43 0.56 0.32 0.74

0.59 0.54 0.23 0.50 0.22 0.71 

0.48 0.53 0.27 0.51 0.30 0.55 

Noncurrent assets plus

OREO to assets (%) 2020 0.63 0.86 0.65 0.67 0.81 0.52 0.58 0.52 0.55 0.77 1.04 0.51 

Equity capital ratio (%)

2018 

2016 

2020

2018 

2016 

0.62 

0.88 

10.29 

11.28 

11.21 

1.01 

1.19 

13.59 

13.48

13.15 

0.77 0.68 0.63 

1.02 0.84 0.82 

11.32 10.97 10.91 

11.41 11.85 12.21 

11.47 11.80 12.18 

0.58 

0.89 

9.74

10.50 

10.50 

0.61 0.66 0.56 0.71 0.76 0.45

0.70 1.07 0.81 1.04 1.04 0.53 

10.71 10.87 9.78 9.76 10.32 10.52 

12.67 

12.03 

11.95 

12.39 

10.38 10.21 

10.18 10.08 

11.68 

11.22 

11.31 

12.04

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

** For institutions that have adopted ASU 2016-13, the numerator represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13, the numerator

represents the provision for loan and lease losses. 

*** Beginning March 2020, does not include institutions that have a Community Bank Leverage Ratio election in effect at the report date.

FDIC QUARTERLY 9 
2021 • Volume           15  • Number 4

 

 

 

 

 

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

Asset Concentration Groups* 

Credit Other 

September 30, 2021 All Insured Card International Agricultural Commercial Mortgage Consumer Specialized All Other All Other 

Institutions Banks Banks Banks Lenders Lenders Lenders <$1 Billion <$1 Billion >$1 Billion 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate 0.40 0.28 0.31 0.36 0.31 0.27 0.36 0.59 0.55 0.60 

Construction and development 0.29 0.20 0.27 0.34 0.31 0.86 0.40 0.34 0.41 0.14

Nonfarm nonresidential 0.19 0.00 0.19 0.30 0.17 0.16 0.02 0.39 0.33 0.24

Multifamily residential real estate 0.22 2.08 0.11 0.02 0.29 0.12 0.00 0.05 0.26 0.06 

Home equity loans 0.38 0.00 0.41 0.44 0.32 0.22 0.59 0.34 0.43 0.48

Other 1-4 family residential 0.61 0.27 0.39 0.60 0.53 0.27 0.41 0.85 0.67 0.84

Commercial and industrial loans 0.29 0.38 0.49 0.55 0.23 0.28 0.19 0.99 0.48 0.26 

Loans to individuals 0.93 1.02 0.74 0.74 0.64 0.27 1.32 0.99 0.88 1.05 

Credit card loans 0.84 1.03 0.62 0.77 1.12 0.83 0.58 2.02 0.84 0.79 

Other loans to individuals 1.01 0.89 1.04 0.74 0.61 0.26 1.33 0.94 0.88 1.17 

All other loans and leases (including farm) 0.24 0.23 0.34 0.32 0.28 0.02 0.06 0.42 0.40 0.15 

Total loans and leases 0.44 0.95 0.44 0.39 0.31 0.26 0.94 0.66 0.56 0.51 

Percent of Loans Noncurrent** 

All real estate loans 1.36 0.76 1.52 0.80 1.11 0.79 0.32 0.93 0.75 1.97 

Construction and development 0.55 1.05 1.91 0.42 0.39 0.76 0.20 0.84 0.41 0.86 

Nonfarm nonresidential 0.80 0.00 0.94 0.68 0.74 0.50 0.26 0.86 0.95 1.05 

Multifamily residential real estate 0.30 0.00 0.35 0.31 0.26 0.65 0.20 0.43 0.22 0.37 

Home equity loans 2.08 0.00 5.50 0.25 1.22 0.50 4.63 0.35 0.50 2.62 

Other 1-4 family residential 2.09 0.76 1.78 0.62 2.22 0.83 0.26 0.93 0.72 2.52 

Commercial and industrial loans 0.75 0.25 0.98 1.08 0.76 0.77 0.83 0.72 0.73 0.63 

Loans to individuals 0.60 0.89 0.52 0.35 0.40 0.07 0.75 0.58 0.35 0.56 

Credit card loans 0.78 0.93 0.62 0.32 0.91 0.42 0.40 0.79 0.52 0.72 

Other loans to individuals 0.46 0.34 0.27 0.35 0.36 0.06 0.75 0.57 0.35 0.48

All other loans and leases (including farm) 0.26 0.03 0.21 0.80 0.36 0.07 0.10 0.69 0.75 0.23 

Total loans and leases 0.94 0.83 0.83 0.82 0.92 0.71 0.65 0.87 0.71 1.07 

Percent of Loans Charged-Off (net, YTD) 

All real estate loans 0.00 0.03 -0.06 0.02 0.03 -0.01 -0.01 -0.07 0.00 -0.01

Construction and development 0.02 0.72 0.00 0.08 0.02 0.03 -0.17 -0.08 -0.06 0.03 

Nonfarm nonresidential 0.06 0.00 0.04 0.03 0.07 0.00 0.01 -0.18 0.02 0.02 

Multifamily residential real estate 0.02 0.00 0.00 0.02 0.02 0.14 0.02 0.18 0.00 0.01 

Home equity loans -0.19 0.00 -0.58 0.02 -0.08 -0.05 -0.25 -0.12 0.01 -0.24

Other 1-4 family residential -0.02 0.02 -0.06 0.01 -0.02 -0.01 -0.01 0.00 0.00 -0.01

Commercial and industrial loans 0.21 0.80 0.29 0.11 0.21 0.00 0.14 -0.08 0.07 0.16 

Loans to individuals 1.28 2.33 1.77 0.22 0.57 0.25 0.38 0.69 0.15 0.95 

Credit card loans 2.38 2.40 2.32 0.76 3.07 2.20 1.11 0.29 0.81 2.38 

Other loans to individuals 0.35 1.22 0.31 0.16 0.40 0.19 0.38 0.71 0.15 0.29 

All other loans and leases (including farm) 0.09 0.32 0.06 0.04 0.10 0.06 0.12 1.10 0.07 0.11 

Total loans and leases 0.27 2.17 0.41 0.04 0.11 0.01 0.26 0.04 0.02 0.22 

Loans Outstanding (in billions) 

All real estate loans $5,182.4 $2.2 $567.3 $109.6 $2,772.3 $188.1 $48.8 $15.4 $53.4 $1,425.4

Construction and development 402.1 0.1 18.1 7.3 290.4 5.4 0.5 1.5 4.0 75.0 

Nonfarm nonresidential 1,619.4 0.0 61.2 29.2 1,164.2 15.1 6.0 5.5 12.4 325.8 

Multifamily residential real estate 496.2 0.0 84.1 3.9 322.9 4.9 0.7 0.6 1.7 77.5 

Home equity loans 270.3 0.0 26.0 1.7 142.0 7.0 0.7 0.4 1.8 90.5 

Other 1-4 family residential 2,221.8 2.1 323.3 24.9 803.9 154.8 40.9 6.4 29.7 835.8 

Commercial and industrial loans 2,243.3 38.9 344.7 22.2 1,056.5 7.9 30.1 2.8 6.1 734.1

Loans to individuals 1,797.0 351.1 365.1 6.1 277.2 12.6 148.7 1.5 5.6 629.1 

Credit card loans 806.0 328.8 262.4 0.7 17.2 0.3 0.4 0.1 0.0 196.1 

Other loans to individuals 991.0 22.3 102.8 5.5 259.9 12.2 148.3 1.5 5.6 432.9

All other loans and leases (including farm) 1,700.6 0.6 527.5 36.3 366.3 9.2 8.5 1.1 3.0 748.0

Total loans and leases (plus unearned income) 10,923.3 392.8 1,804.6 174.2 4,472.3 217.8 236.2 20.8 68.1 3,536.5

Memo: Other Real Estate Owned (in millions) 

All other real estate owned 3,819.5 6.2 236.2 146.6 2,335.5 46.0 9.1 38.9 71.1 929.8 

Construction and development 707.7 0.2 1.0 20.2 589.1 8.6 1.7 12.1 21.5 53.3 

Nonfarm nonresidential 2,155.7 5.9 87.0 64.5 1,367.1 16.0 0.2 20.2 25.3 569.6 

Multifamily residential real estate 50.0 0.0 0.0 1.4 48.1 0.2 0.1 0.0 0.0 0.2 

1-4 family residential 793.5 0.1 119.2 22.8 294.0 20.4 7.0 4.7 22.4 302.8 

Farmland 82.9 0.0 0.0 37.7 37.2 0.8 0.0 1.9 2.1 3.2 

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

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

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

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

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

25 percent of total assets.

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

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

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

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

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

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

10 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

 

 

 

 

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

September 30, 2021 All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less Than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion 

to 

$10 Billion 

$10 Billion 

to $250 

Billion 

Greater 

Than $250 

Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate

Construction and development 

Nonfarm nonresidential

Multifamily residential real estate 

Home equity loans

Other 1-4 family residential

Commercial and industrial loans 

Loans to individuals 

Credit card loans 

Other loans to individuals 

All other loans and leases (including farm)

Total loans and leases 

0.40

0.29 

0.19 

0.22 

0.38 

0.61 

0.29 

0.93 

0.84

1.01 

0.24

0.44

0.78 

0.52 

0.68 

0.11 

0.19 

1.04

0.89 

1.09 

1.31 

1.09 

0.31 

0.75 

0.35 0.20 0.36 

0.36 0.23 0.36 

0.25 0.14 0.19 

0.15 0.11 0.35 

0.33 0.25 0.34

0.49 0.30 0.51 

0.46 0.34 0.22 

1.46 1.08 0.83 

1.69 2.43 0.92 

1.44 0.62 0.76 

0.31 0.19 0.22 

0.41 0.27 0.40

0.56 

0.16 

0.22 

0.10 

0.46

0.79 

0.31 

0.99 

0.69 

1.27 

0.25 

0.51 

0.38 

0.36 

0.21 

0.46

0.30 

0.50 

0.20 

0.76 

0.92 

0.66 

0.14

0.37 

0.41

0.22 

0.20 

0.06 

0.45

0.64

0.32 

1.34

1.01 

1.60 

0.13 

0.53 

0.36 0.59 

0.17 0.26 

0.18 0.18 

0.12 0.05 

0.39 0.51 

0.53 1.00 

0.31 0.30 

0.65 0.84

0.57 0.74

0.70 1.03 

0.37 0.28 

0.40 0.50 

0.40

0.28 

0.17 

0.12 

0.34

0.78 

0.33 

0.70 

0.46

0.78 

0.19 

0.39 

0.21 

0.45

0.18 

0.08 

0.19 

0.23 

0.27 

1.01 

0.99 

1.03 

0.19 

0.41

Percent of Loans Noncurrent** 

All real estate loans

Construction and development 

Nonfarm nonresidential

Multifamily residential real estate 

Home equity loans

Other 1-4 family residential

Commercial and industrial loans 

Loans to individuals 

Credit card loans 

Other loans to individuals 

All other loans and leases (including farm)

Total loans and leases 

1.36 

0.55 

0.80 

0.30 

2.08 

2.09 

0.75 

0.60 

0.78 

0.46

0.26 

0.94

1.04

0.58 

1.15 

0.64

0.64

0.98 

1.27 

0.67 

0.91 

0.66 

1.18 

1.07 

0.66 0.68 1.51 

0.46 0.48 0.36 

0.66 0.64 0.86 

0.28 0.29 0.27 

0.62 0.52 1.20 

0.68 0.92 2.70 

0.70 0.91 0.74

0.48 0.76 0.62 

1.24 2.03 0.86 

0.43 0.31 0.41

0.76 0.30 0.37 

0.66 0.71 1.04

1.80 

1.07 

0.98 

0.36 

3.46

2.21 

0.72 

0.58 

0.65 

0.52 

0.20 

0.96 

1.32 

1.13 

1.20 

0.37 

1.91 

1.75 

0.69 

0.65 

0.96 

0.45

0.16 

0.94

1.34

0.34

0.61 

0.57 

1.62 

2.07 

0.70 

0.72 

0.86 

0.62 

0.16 

0.89 

1.36 1.64

0.91 0.25 

0.88 0.95 

0.31 0.15 

2.58 3.62 

1.75 2.37 

0.63 0.96 

0.34 0.62 

0.54 0.72 

0.19 0.45

0.27 0.31 

0.84 1.07 

2.21 

0.21 

0.53 

0.17 

0.89 

5.79 

0.81 

0.48

0.84

0.37 

0.24

1.65 

0.47

0.35 

0.53 

0.11 

0.81 

0.50 

0.78 

0.69 

0.83 

0.58 

0.49

0.57 

Percent of Loans Charged-Off 

(net, YTD) 

All real estate loans

Construction and development 

Nonfarm nonresidential

Multifamily residential real estate 

Home equity loans

Other 1-4 family residential

Commercial and industrial loans 

Loans to individuals 

Credit card loans 

Other loans to individuals 

All other loans and leases (including farm)

Total loans and leases 

0.00 

0.02 

0.06 

0.02 

-0.19

-0.02

0.21 

1.28 

2.38 

0.35 

0.09 

0.27 

0.02 

0.02 

0.03 

0.00 

-0.02

0.01 

0.12 

0.24

2.61 

0.22 

0.08 

0.06 

0.01 0.02 0.03 

0.00 0.00 0.04

0.01 0.05 0.10 

0.00 0.01 0.03 

0.00 -0.02 -0.08

0.00 -0.01 -0.01

0.10 0.16 0.25 

0.54 1.57 1.26 

3.31 4.71 2.29 

0.35 0.43 0.39 

0.11 0.07 0.11 

0.05 0.14 0.32 

-0.04

0.01 

0.02 

0.01 

-0.33

-0.04

0.20 

1.29 

2.34

0.31 

0.08 

0.29 

0.03 

0.07 

0.09 

0.03 

-0.10

-0.01

0.17 

1.34

2.66 

0.46

0.07 

0.26 

0.00 

0.01 

0.05 

0.04

-0.19

-0.01

0.24

1.16 

2.31 

0.24

0.12 

0.29 

-0.02 -0.02

0.04 -0.01

0.06 0.03 

0.00 0.03 

-0.22 -0.32

-0.04 -0.03

0.22 0.22 

1.02 1.88 

2.14 2.57 

0.15 0.69 

0.06 0.08 

0.21 0.33 

0.01 

0.00 

0.04

0.00 

-0.19

-0.01

0.20 

0.64

1.59 

0.34

0.06 

0.10 

0.02 

-0.01

0.06 

0.00 

-0.07

0.00 

0.19 

1.25 

2.35 

0.41

0.17 

0.35 

Loans Outstanding (in billions) 

All real estate loans

Construction and development 

Nonfarm nonresidential

Multifamily residential real estate 

Home equity loans

Other 1-4 family residential

Commercial and industrial loans 

Loans to individuals 

Credit card loans 

Other loans to individuals 

All other loans and leases (including farm)

Total loans and leases 

(plus unearned income)

$5,182.4

402.1

1,619.4

496.2

270.3 

2,221.8

2,243.3

1,797.0

806.0 

991.0 

1,700.6

10,923.3

$18.1 

1.1 

3.8 

0.4

0.4

8.7 

3.4

1.7 

0.0 

1.7 

3.6 

26.8 

$502.5 $984.2 $1,935.3

48.8 99.8 168.1 

190.3 429.9 658.5 

28.5 108.2 221.3 

14.5 33.9 102.2 

171.5 280.5 768.7 

94.0 240.4 825.3 

27.2 81.2 776.0 

1.8 21.0 350.6 

25.4 60.2 425.4

39.7 71.0 475.0

663.4 1,376.8 4,011.7

$1,742.3

84.3

336.9 

137.8 

119.4

992.4

1,080.2

910.9 

432.6

478.3

1,111.3

4,844.7

$1,077.0

79.3 

365.5 

168.9 

62.2 

396.0 

400.9

320.4

125.6 

194.8

272.1 

2,070.3

$918.3 

65.7 

312.1 

44.3

62.4

420.3

524.6

424.6

184.5

240.1

331.0 

2,198.5

$1,041.8 $847.5

65.8 56.0 

246.5 209.9 

124.5 44.9

66.2 37.6 

514.3 399.9 

505.0 389.2 

359.6 280.4

153.9 179.2 

205.8 101.2 

446.6 407.9

2,353.1 1,925.0

$579.2 

86.7 

240.2

26.7 

17.7 

188.1 

169.2 

67.6 

15.8 

51.8 

73.7 

889.6 

$718.7 

48.7

245.3

86.9 

24.2

303.2 

254.4

344.4

147.0

197.4

169.4

1,486.9

Memo: Other Real Estate Owned 

(in millions) 

All other real estate owned

Construction and development 

Nonfarm nonresidential

Multifamily residential real estate 

1-4 family residential

Farmland 

3,819.5

707.7 

2,155.7

50.0 

793.5 

82.9 

47.0

7.8 

16.9 

6.2 

13.0 

3.0 

697.6 1,239.6 869.6 

279.1 221.6 171.6 

244.3 863.4 417.3

26.9 9.5 6.7 

101.2 112.9 271.7 

46.0 31.6 2.3 

965.7 

27.5 

613.6 

0.9 

294.6

0.0 

495.0

78.5 

173.7 

9.0 

233.5 

0.4

917.1 

171.3 

581.8 

12.2 

140.4

11.5 

670.9 477.2

74.5 111.9 

351.7 231.7 

2.2 7.1 

207.5 90.4

9.4 32.1 

678.1 

227.1 

339.4

12.8 

79.1 

19.7 

581.1 

44.5

477.4

6.7 

42.5

9.9 

* Regions: 

New York - Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, U.S. Virgin Islands

Atlanta - Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia

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

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

Dallas - Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, Texas

San Francisco - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Pacific Islands, Utah, Washington, Wyoming

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

FDIC QUARTERLY 11 
2021 • Volume           15  • Number 4

 

 

 

 

 

 

 

 

 

 

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

3rd 

Quarter 

2021 

2nd 

Quarter 

2021 

1st 

Quarter 

2021 

4th 

Quarter 

2020 

3rd 

Quarter 

2020 

% 

Change

20Q3-

21Q3 

Asset Size Distribution 

(dollar figures in millions;

notional amounts unless otherwise indicated)

Less 

Than 

$100 

Million 

$100 

Million 

to $1 

Billion 

$1 

Billion 

to $10 

Billion 

$10 

Billion 

to $250 

Billion 

Greater 

Than 

$250 

Billion 

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives 1,358 1,374 1,389 1,388 1,374 -1.2 29 640 538 138 13 

Total assets of institutions reporting derivatives $21,479,312 $21,045,088 $20,833,034 $20,149,443 $19,491,662 10.2 $2,054 $305,247 $1,577,426 $6,619,714 $12,974,871

Total deposits of institutions reporting derivatives 17,677,878 17,274,185 17,014,112 16,393,959 15,709,088 12.5 1,667 259,077 1,328,031 5,531,499 10,557,605

Total derivatives 187,643,803 186,058,293 191,684,281 165,711,793 181,124,686 3.6 356 21,235 203,332 4,512,831 182,906,048

Derivative Contracts by Underlying Risk Exposure 

Interest rate 131,804,111 133,334,814 137,477,498 116,058,430 129,835,475 1.5 356 20,864 194,878 2,673,427 128,914,586

Foreign exchange* 45,631,510 43,728,636 45,257,498 41,448,704 42,148,550 8.3 0 0 3,827 1,619,178 44,008,505

Equity 4,649,081 4,254,960 4,004,712 3,774,715 4,022,629 15.6 0 21 57 67,971 4,581,032

Commodity & other (excluding credit derivatives) 1,703,480 1,631,946 1,582,254 1,394,504 1,536,154 10.9 0 0 41 100,900 1,602,540

Credit 3,854,151 3,106,414 3,361,030 3,034,285 3,580,623 7.6 0 27 3,383 51,355 3,799,386

Total 187,642,333 186,056,770 191,682,992 165,710,638 181,123,431 3.6 356 20,912 202,186 4,512,831 182,906,048

Derivative Contracts by Transaction Type 

Swaps 111,081,251 106,971,001 107,719,719 96,423,495 99,580,043 11.5 2 2,279 121,665 2,382,062 108,575,244

Futures & forwards 35,311,292 37,583,984 40,934,399 32,350,455 39,822,587 -11.3 0 4,059 20,891 1,688,788 33,597,555

Purchased options 17,182,098 17,945,500 18,603,556 16,098,917 17,889,179 -4.0 0 262 15,007 150,652 17,016,177

Written options 17,050,718 17,894,265 18,371,380 15,891,741 17,706,928 -3.7 1 3,869 16,616 148,262 16,881,971

Total 180,625,360 180,394,750 185,629,054 160,764,608 174,998,738 3.2 3 10,468 174,179 4,369,764 176,070,946

Fair Value of Derivative Contracts 

Interest rate contracts 63,671 63,859 69,365 70,648 73,198 -13.0 0 29 353 9,382 53,906

Foreign exchange contracts 11,247 10,331 13,849 -11,466 -7,256 N/M 0 0 8 1,063 10,177

Equity contracts -10,450 -13,321 -6,866 -7,165 -700 N/M 0 6 2 105 -10,563

Commodity & other (excluding credit derivatives) 15,125 6,125 3,967 -452 -1,087 N/M 0 0 0 559 14,567

Credit derivatives as guarantor** 22,626 16,825 16,748 14,331 3,830 490.8 0 0 14 -98 22,710

Credit derivatives as beneficiary** -25,233 -21,074 -18,373 -18,166 -7,167 N/M 0 0 -13 -180 -25,041

Derivative Contracts by Maturity*** 

Interest rate contracts < 1 year 73,183,709 71,259,031 76,501,727 62,457,197 76,385,765 -4.2 0 2,679 19,270 1,241,439 71,920,322

1-5 years 41,533,578 45,947,274 44,407,789 39,201,919 39,963,944 3.9 0 875 42,902 805,176 40,684,625

> 5 years 22,926,832 22,279,945 22,231,036 20,844,428 20,500,301 11.8 0 1,314 76,885 473,000 22,375,634

Foreign exchange and gold contracts < 1 year 31,560,013 30,839,509 32,130,016 29,434,113 29,396,427 7.4 0 0 3,084 1,461,606 30,095,323

1-5 years 4,723,452 4,557,853 4,336,231 4,404,492 4,299,182 9.9 0 0 313 102,642 4,620,497

> 5 years 2,576,222 2,502,654 2,405,347 2,402,103 2,299,468 12.0 0 0 13 12,710 2,563,499

Equity contracts < 1 year 4,079,641 3,806,830 3,504,313 3,287,136 3,210,066 27.1 0 7 4 33,452 4,046,178

1-5 years 1,135,840 957,152 870,551 770,821 882,054 28.8 0 14 21 30,496 1,105,309

> 5 years 159,126 153,371 124,452 138,573 133,921 18.8 0 0 5 2,407 156,714

Commodity & other contracts (including credit

derivatives, excluding gold contracts) < 1 year 2,417,770 2,234,059 2,149,899 1,820,961 1,926,264 25.5 0 0 65 31,131 2,386,574

1-5 years 2,478,994 2,137,329 2,050,971 2,023,406 2,249,588 10.2 0 12 845 45,435 2,432,701

> 5 years 519,222 215,849 435,795 215,486 433,136 19.9 0 13 1,483 8,980 508,747

Risk-Based Capital: Credit Equivalent Amount 

Total current exposure to tier 1 capital (%) 24.9 24.8 25.6 30.2 29.9 0.0 0.1 1.7 5.2 40.9

Total potential future exposure to tier 1 capital (%) 37.3 34.9 34.0 31.0 32.5 0.0 0.1 1.0 4.9 63.1 

Total exposure (credit equivalent amount)

to tier 1 capital (%) 62.3 59.7 59.6 61.2 62.4 0.0 0.2 2.7 10.1 103.9 

Credit losses on derivatives  21.0 21.0 7.0 137.0 131.0 -84.0 0.0 6.0 0.0 7.0 9 

HELD FOR TRADING 

Number of institutions reporting derivatives 188 190 188 187 185 1.6 0 19 89 69 11 

Total assets of institutions reporting derivatives 16,663,554 16,326,459 16,185,378 15,885,372 15,380,670 8.3 0 9,802 351,962 4,119,359 12,182,431

Total deposits of institutions reporting derivatives 13,628,595 13,321,986 13,125,102 12,847,286 12,338,386 10.5 0 8,418 295,461 3,475,832 9,848,883

Derivative Contracts by Underlying Risk Exposure 

Interest rate 127,448,311 129,126,796 133,860,018 112,807,097 126,595,325 0.7 0 543 43,684 1,422,095 125,981,989

Foreign exchange 41,961,260 40,661,753 42,039,817 39,084,210 39,147,645 7.2 0 0 3,566 1,489,145 40,468,549

Equity 4,620,993 4,225,427 3,976,351 3,746,888 3,997,150 15.6 0 0 36 58,302 4,562,655

Commodity & other 1,665,050 1,594,653 1,544,723 1,358,385 1,501,890 10.9 0 0 18 96,980 1,568,051

Total 175,695,613 175,608,628 181,420,909 156,996,580 171,242,010 2.6 0 543 47,304 3,066,522 172,581,244

Trading Revenues: Cash & Derivative Instruments 

Interest rate**  -323 3,373 -29 3,625 2,826 N/M 0 0 4 201 -528

Foreign exchange** 3,998 1,546 6,343 18 1,942 105.9 0 0 3 128 3,868

Equity** 1,729 2,384 2,388 2,480 750 130.5 0 0 16 -12 1,725

Commodity & other (including credit derivatives)** 1,415 767 1,772 191 1,380 2.5 0 0 0 17 1,398

Total trading revenues** 6,819 8,070 10,474 6,314 6,898 -1.1 0 0 23 335 6,462

Share of Revenue 

Trading revenues to gross revenues (%)** 4.8 5.9 7.5 4.6 4.9 0.0 0.0 0.6 1.0 6.3 

Trading revenues to net operating revenues (%)** 15.4 18.1 21.0 16.8 22.0 0.0 0.0 2.1 3.1 19.9 

HELD FOR PURPOSES OTHER THAN TRADING 

Number of institutions reporting derivatives 607 609 615 623 620 -2.1 2 141 322 129 13 

Total assets of institutions reporting derivatives 20,529,349 20,003,429 19,838,053 19,263,989 18,645,437 10.1 110 72,623 1,149,490 6,332,256 12,974,871

Total deposits of institutions reporting derivatives 16,878,746 16,400,333 16,180,006 15,655,539 15,010,871 12.4 89 61,187 961,916 5,297,949 10,557,605

Derivative Contracts by Underlying Risk Exposure 

Interest rate 4,320,508 4,170,881 3,573,201 3,192,677 3,162,582 36.6 3 9,904 126,672 1,251,333 2,932,597

Foreign exchange 542,719 548,414 569,053 511,407 534,403 1.6 0 0 159 38,320 504,240

Equity 28,088 29,534 28,361 27,826 25,479 10.2 0 21 22 9,669 18,377

Commodity & other 38,431 37,294 37,531 36,119 34,264 12.2 0 0 23 3,920 34,488

Total notional amount 4,929,747 4,786,122 4,208,145 3,768,028 3,756,727 31.2 3 9,925 126,875 1,303,241 3,489,702

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

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

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

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

**** Credit losses on derivatives is applicable to all banks filing the FFIEC 031 report form and banks filing the FFIEC 041 report form that have $300 million or more in total assets, but is not

applicaable to banks filing the FFIEC 051 form.

12 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

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

Asset Size Distribution 

(dollar figures in millions)

3rd 

Quarter 

2021 

2nd 

Quarter 

2021 

1st 

Quarter 

2021 

4th 

Quarter 

2020 

3rd 

Quarter 

2020 

% 

Change 

20Q3-

21Q3 

Less 

Than 

$100 

Million 

$100 

Million 

to $1 

Billion 

$1 

Billion 

to $10 

Billion 

$10 

Billion 

to $250 

Billion 

Greater 

Than 

$250 

Billion 

Assets Securitized and Sold with Servicing Retained or with 

Recourse or Other Seller-Provided Credit Enhancements 

Number of institutions reporting securitization activities 63 60 59 57 58 8.6 1 7 11 35 9 

Outstanding Principal Balance by Asset Type 

1-4 family residential loans $344,786 $356,054 $358,230 $382,125 $406,116 -15.1 $0 $5,588 $12,288 $101,714 $225,196

Home equity loans 6 7 7 8 8 -25.0 0 0 0 6 0 

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

Auto loans 209 316 392 289 579 -63.9 0 0 0 209 0 

Other consumer loans 1,313 1,388 1,469 1,569 1,669 -21.3 0 0 0 664 648

Commercial and industrial loans 6,285 0 0 0 0 0.0 0 0 0 0 6,285

All other loans, leases, and other assets 99,498 95,055 91,085 87,334 88,993 11.8 2 0 7,318 5,352 86,826

Total securitized and sold 452,097 452,820 451,183 471,325 497,365 -9.1 2 5,588 19,606 107,945 318,955

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 1,016 964 1,057 1,210 1,403 -27.6 0 0 51 517 448

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

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

Auto loans 2 26 26 26 38 -94.7 0 0 0 2 0 

Other consumer loans 0 0 0 0 0 0.0 0 0 0 0 0 

Commercial and industrial loans 257 0 0 0 0 0.0 0 0 0 0 257 

All other loans, leases, and other assets 2,414 2,301 2,274 2,029 2,010 20.1 0 0 63 113 2,238

Total credit exposure 3,689 3,291 3,357 3,265 3,451 6.9 0 0 114 632 2,943

Total unused liquidity commitments provided to institution’s own securitizations 255 67 76 71 71 259.2 0 0 0 0 255 

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

1-4 family residential loans 1.9 1.9 2.0 2.7 3.0 0.0 0.7 0.2 1.3 2.3 

Home equity loans 7.5 1.9 6.3 5.3 7.2 0.0 0.0 0.0 7.5 0.0 

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

Auto loans 1.4 2.0 1.9 4.2 3.1 0.0 0.0 0.0 1.4 0.0 

Other consumer loans 2.5 2.4 2.9 3.1 2.3 0.0 0.0 0.0 1.3 3.7 

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

All other loans, leases, and other assets 0.4 0.6 0.5 0.6 1.5 0.0 0.0 0.1 1.5 0.4

Total loans, leases, and other assets 1.6 1.7 1.8 2.5 3.1 0.0 0.0 0.0 0.9 1.8 

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

1-4 family residential loans 2.2 2.4 2.7 3.0 2.9 0.0 2.0 0.2 3.2 1.8 

Home equity loans 26.3 27.3 24.5 28.9 27.8 0.0 0.0 0.0 26.3 0.0 

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

Auto loans 0.1 0.2 0.2 0.6 0.8 0.0 0.0 0.0 0.1 0.0 

Other consumer loans 2.3 2.2 2.4 2.4 2.2 0.0 0.0 0.0 1.1 3.5 

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

All other loans, leases, and other assets 1.5 1.9 1.8 2.4 2.9 0.0 0.0 2.0 0.3 1.5 

Total loans, leases, and other assets 1.8 2.1 2.3 2.5 2.8 0.0 0.0 0.0 2.5 1.7 

Securitized Loans, Leases, and Other Assets Charged-off 

(net, YTD, annualized, %) 

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

Home equity loans 3.0 1.7 1.8 11.9 10.2 0.0 0.0 0.0 3.0 0.0 

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

Auto loans 0.0 0.0 0.1 3.6 2.0 0.0 0.0 0.0 0.0 0.0 

Other consumer loans 0.3 0.2 0.1 1.0 0.8 0.0 0.0 0.0 0.2 0.5 

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

All other loans, leases, and other assets 0.2 0.1 0.1 0.2 0.2 0.0 0.0 0.0 0.5 0.1 

Total loans, leases, and other assets 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.1 

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

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

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

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

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

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

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

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

Assets Sold with Recourse and Not Securitized 

Number of institutions reporting asset sales 342 345 340 343 347 -1.4 4 110 150 69 9 

Outstanding Principal Balance by Asset Type 

1-4 family residential loans 33,775 37,950 36,084 35,364 31,869 6.0 69 5,812 14,972 11,691 1,231

All other loans, leases, and other assets 137,571 135,583 135,492 131,293 128,103 7.4 0 12 48 37,916 99,594

Total sold and not securitized 171,346 173,533 171,577 166,657 159,972 7.1 69 5,824 15,020 49,607 100,825

Maximum Credit Exposure by Asset Type 

1-4 family residential loans 12,469 14,644 13,149 13,564 12,870 -3.1 2 734 5,976 5,140 617 

All other loans, leases, and other assets 40,025 39,279 39,242 37,880 36,997 8.2 0 12 25 11,979 28,008

Total credit exposure 52,494 53,923 52,391 51,444 49,867 5.3 2 746 6,002 17,119 28,625

Support for Securitization Facilities Sponsored by Other Institutions 

Number of institutions reporting securitization facilities sponsored by others 37 37 38 37 37 0.0 0 10 13 8 6 

Total credit exposure 22,380 22,536 23,478 23,986 24,893 -10.1 0 0 0 1,539 20,841

Total unused liquidity commitments 432 408 415 418 412 4.9 0 0 0 295 137 

Other 

Assets serviced for others** 5,809,448 5,704,565 5,624,357 5,781,994 5,804,674 0.1 2,858 163,224 380,044 1,325,655 3,937,667

Asset-backed commercial paper conduits

Credit exposure to conduits sponsored by institutions and others 20,788 20,683 18,417 19,694 17,209 20.8 0 0 0 0 20,788

Unused liquidity commitments to conduits sponsored by institutions

and others 55,177 54,035 56,072 56,904 59,373 -7.1 0 0 0 315 54,862

Net servicing income (for the quarter) 1,755 204 3,435 1,029 1,364 28.7 6 278 237 562 672 

Net securitization income (for the quarter) 110 142 106 77 92 19.6 0 5 2 54 49

Total credit exposure to Tier 1 capital (%)*** 3.4 3.4 3.5 3.6 3.7 0.0 0.1 0.3 2.3 5.1 

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

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

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

FDIC QUARTERLY 13 

QUARTERLY BANKING PROFILE 

 

COMMUNITY BANK PERFORMANCE 

Community banks are identified based on criteria defined in the FDIC’s 2020 Community Banking Study. When comparing 

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

as such in the current quarter, adjusted for mergers. In contrast, prior-quarter ratios are based on community banks designated during the previous quarter. 

Net Income Continued to Increase Year Over Year 

Net Interest Margin Rose Modestly 

Loan and Lease Balances Declined From the Previous Year and Quarter, Primarily Due to Payoff and Forgiveness of 

Paycheck Protection Program Loans 

Asset Quality Continued to Improve 

Community Banks 

Reported Net Income 

Growth From One 

Year Ago 

Quarterly net income for the 4,450 FDIC-insured community banks increased to $8.6 billion 

in the third quarter, up $1.4 billion (19.6 percent) from third quarter 2020. The annual 

increase in net income was due to an increase in net interest income and a decline in 

provision expense (provisions). Declines in noninterest income and securities gains along 

with increases in noninterest expense and income tax expense partially offset these 

improvements. Nearly two-thirds of community banks (65.8 percent) reported higher net 

income from the year-ago quarter. The pretax return on assets ratio increased 14 basis 

points from the year-ago quarter to 1.56 percent. 

Quarterly Net Interest 

Margin Rose From the 

Previous Quarter and 

One Year Ago 

The quarterly net interest margin (NIM) rose to 3.31 percent in the third quarter, up 6 basis 

points from second quarter 2021, as growth in net interest income outpaced growth in earning 

assets. The cost of funds declined 3 basis points from the second quarter to a new record low 

of 0.29 percent, while the yield on earning assets rose 3 basis points from second quarter’s 

record low to 3.60 percent. NIM increased 3 basis points from the previous year, as a 23 basis 

point decline in cost of funds outpaced a 20 basis point decline in yield on earning assets. This 

was the first annual expansion in NIM since first quarter 2019. The annual declines in both the 

cost of funds and yield on earning assets were the smallest reported since first quarter 2020. 

Quarterly NIM expansion was accompanied by a $2.2 billion (11.7 percent) increase in net 

interest income from third quarter 2020. The increase in net interest income was due to 

both lower interest expense (down $1.2 billion, or 38.9 percent) and higher interest income 

(up $1.0 billion, or 4.7 percent) compared to one year ago. The decline in interest expense 

was driven by a decline in expense on domestic deposits of $1.0 billion (39.5 percent). The 

increase in interest income was primarily due to an increase in commercial and industrial 

(C&I) loan income of $723.8 million (20.7 percent), reflecting increased deferred fee income 

from the payoff and forgiveness of Paycheck Protection Program (PPP) loans. Nearly threefourths of community banks (72.2 percent) reported higher net interest income compared 

with third quarter 2020. 

Chart 1 Chart 2 

Contributors to the Year-Over-Year Change in Income 

FDIC-Insured Community Banks 

$ Billions Positive Factor Negative Factor 

-2.0 

-1.0 

0.0 

1.0 

2.0 

3.0 

4.0 

12% -84% -9% 6% -65% 28%

 $1.42 $2.20 -$1.37 -$0.62 $0.90 -$0.23 $0.41 

20% 

Source: FDIC. 

Net Interest Margin 

Percent 

Community Banks (3.31) 

Industry (2.56) 

2.25 

2.50 

2.75 

3.00 

3.25 

3.50 

3.75 

4.00 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Net Net Loan Loss Noninterest Noninterest Realized Income 

Income Interest Provisions Income Expense Gains on Taxes 

Source: FDIC. Income Securities 

FDIC QUARTERLY 15 
2021 • Volume           15  • Number 4

Noninterest Income 

Decreased From 

Third Quarter 2020 

Noninterest income fell $616.3 million (9.0 percent) from one year ago primarily because 

of a decline in net gains on loan sales revenue. Higher “all other noninterest income” and 

service charges on deposit accounts partially offset this decline.1 Net gains on loan sales 

revenue declined $1.2 billion (41.5 percent) from the year-ago quarter, while all other 

noninterest income rose $343.3 million (15.2 percent) and revenue from service charges on 

deposit accounts increased $100.3 million (14.5 percent). 

Noninterest Expense 

Increased From the 

Year-Ago Quarter 

An increase in “all other noninterest expense” of $469.3 million (10.4 percent) and salary 

and benefits expense of $402.2 million (4.3 percent) drove a $900.1 million (5.7 percent) 

increase in noninterest expense year over year.2 Average assets per employee increased 

10.4 percent to $7.0 million from the year-ago quarter. While nearly three-fourths of 

community banks (74.1 percent) reported higher noninterest expense compared with the 

year-ago quarter, noninterest expense as a percentage of average assets declined 12 basis 

points from third quarter 2020 to 2.45 percent. 

Provision Expense 

Increased Quarter 

Over Quarter 

Provisions declined $1.4 billion (83.5 percent) from the year-ago quarter but increased 

$219.2 million (427.9 percent) from second quarter to $270.4 million. Nearly one-fifth of 

community banks (17.5 percent) reported higher provisions compared with the year-ago 

quarter, while one-fourth (25.5 percent) reported higher provisions compared with second 

quarter 2021.3 

Eighty-five community banks had adopted current expected credit loss (CECL) accounting 

as of third quarter. Community bank CECL adopters reported negative provisions of 

$70.4 million in third quarter, an increase of $133.5 million from the previous quarter and 

a reduction of $419.6 million from one year ago. Provisions for community banks that had 

not adopted CECL accounting totaled $340.8 million, an increase of $85.7 million from one 

quarter ago and a reduction of $953.4 million from one year ago. 

Allowance for Loan 

and Lease Losses to 

Total Loans Remained 

Higher Than the 

Pre-Pandemic Level 

The allowance for loan and lease losses (ALLL) as a percentage of total loans and leases 

increased 5 basis points from the year-ago quarter to 1.32 percent. ALLL as a percentage 

of loans 90 days or more past due or in nonaccrual status (coverage ratio) increased 

44.1 percentage points from the year-ago quarter to 203.5 percent, a record high, due to 

declining noncurrent loan balances. This ratio is well above the 147.9 percent reported 

prior to the pandemic in fourth quarter 2019.4 The coverage ratio for community banks is 

26.2 percentage points above the coverage ratio for noncommunity banks. 

1 All other noninterest income includes, but is not limited to, bankcard and credit card interchange fees, income and fees 

from wire transfers, and income and fees from automated teller machines. 

2 All other noninterest expense includes, but is not limited to, automated teller machine and interchange expenses, legal 

fees, advertising and marketing expenses, consulting expenses, data processing expenses, and FDIC deposit insurance 

assessments. 

3 Provisions for credit losses include both losses for loans and securities for CECL adopters but only loan losses for 

non-adopters. 

4 The financial crisis refers to the period between December 2007 and June 2009. 

Chart 3 Chart 4 

Change in Loan Balances and Unused Commitments 

FDIC-Insured Community Banks 

Change 3Q 2021 vs. 3Q 2020 $ Billions Change 3Q 2021 vs. 2Q 2021 40 

36.0 

30 

20 

11.6 10 9.5 10.9 

7.6 5.0 2.5 1.4 0 

2.5 3.4 

-0.5 

-10 

-12.7 -20 

-7.1 

-30 -24.9 

Nonfarm Commercial 1–4 Family Construction & 

Nonresidential & Industrial Residential Development

RE RE 

Loan Balances Source: FDIC. 

Agricultural

Production Commercial RE Commercial & Construction & Industrial 

Unused 

Commitments 

Noncurrent Loan Rates for FDIC-Insured Community Banks 

Source: FDIC. 

Share of Loan Portfolio Noncurrent 

Percent 

0 

2 

4 

6 

8 

10 

12 

14 

16 

C&D Loans 

Nonfarm Nonresidential RE 

1–4 Family RE 

C&I Loans 

Farm Loans 

Home Equity 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

16 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

Total Assets Increased Total assets increased $55.8 billion (2.1 percent) from the previous quarter, driven by 

From the Previous Quarter increased securities holdings. Securities grew $36.3 billion (6.8 percent) quarter over 

quarter. The quarterly increase of $21.9 billion (7 percent) in cash and balances due from 

depository institutions also contributed to total asset growth. Securities and cash and 

balances due from depository institutions represent almost one-third (33.0 percent) of total 

assets, higher than the 24 percent reported in fourth quarter 2019. 

Loan and Lease Balances Community bank loan and lease balances declined $4.2 billion (0.2 percent) between second 

Declined From the and third quarter 2021. A decrease in C&I loan balances of $38.3 billion (12.7 percent) drove 

Previous Quarter and a 

Year Ago 

the decline, reflecting the payoff and forgiveness of PPP loan balances (down $45.6 billion). 

More than 80 percent of community banks (84.3 percent) reported a decrease in C&I loans 

from second quarter 2021. Growth in nonfarm nonresidential commercial real estate (CRE) 

loan balances of $12.7 billion (2.5 percent) and construction and development (C&D) loan 

balances of $6 billion (5 percent) offset some of the decline in C&I loans. An increase in 

unused CRE loan commitments of $8.8 billion (7.6 percent) drove the quarter-over-quarter 

growth in unused commitments of $14.6 billion (3.8 percent). 

Total loans and leases declined $19.2 billion (1.1 percent) during the year ending third 

quarter 2021. C&I loan balances declined $87.3 billion (24.9 percent), due in part to a decline 

in PPP loan balances of $99.8 billion (64.7 percent). Growth in nonfarm nonresidential CRE 

loan balances of $45.8 billion (9.5 percent), C&D loan balances of $13.1 billion (11.6 percent), 

and multifamily loan balances of $11 billion (10.1 percent) offset a portion of this decline. 

Deposit Growth Was 

Widespread in Third 

Quarter 

Community banks reported deposit growth of 2.6 percent ($58.9 billion) during the third 

quarter, up from 2.1 percent ($46 billion) in second quarter 2021. Nearly seven out of ten 

community banks (68.4 percent) reported an increase in deposit balances. Growth in 

deposits of more than $250,000 accounted for most of the deposit growth (up $57.8 billion, 

or 5.5 percent), while growth in deposits under $250,000 was positive but nominal (up 

$1.7 billion, or 0.1 percent). Growth in domestic deposit balances was split evenly between 

noninterest-bearing deposits (up $29.5 billion, or 4.8 percent) and interest-bearing 

deposits (up $29.4 billion, or 1.8 percent). 

The Noncurrent Rate Loans and leases 90 days or more past due or in nonaccrual status (noncurrent loans and 

Continued to Decline in leases) declined $847 million (7.1 percent) to $11.1 billion from second quarter 2021. The 

Third Quarter noncurrent balances of all major loan categories declined from one year ago. More than 

half of community banks (57.6 percent) reported reductions in noncurrent loan balances. 

The quarterly dollar decline was primarily attributable to a $307.4 million (8.3 percent) 

decrease in nonfarm nonresidential CRE noncurrent balances and a $241.6 million decrease 

(7.6 percent) in 1–4 family residential noncurrent balances. The noncurrent rate for total 

loans and leases dropped 4 basis points from second quarter to 0.65 percent. 

Net Charge-Offs Declined 

Across All Major Loan 

Categories From One 

Year Ago 

Net charge-offs totaled $275.2 million in the third quarter, a decline of $238.3 million 

(46.4 percent) from a year ago. Net charge-offs declined in all major loan categories from 

one year ago. The largest contributors to the year-over-year decrease in net charge-offs 

were the C&I loan portfolio, which declined $128.4 million (60.2 percent), and the nonfarm 

nonresidential CRE portfolio, which declined $46.5 million (42.9 percent). The net charge-off 

rate for community banks declined 4 basis points from the year-ago quarter to 0.06 percent. 

Equity Capital Growth 

Remained Strong 

Equity capital grew $6.4 billion (2.2 percent) in third quarter and the leverage capital 

ratio rose 11 basis points to 10.25 percent. The average tier 1 risk-based capital ratio 

among community banks that did not file the community bank leverage ratio (CBLR) was 

14.61 percent in third quarter 2021, down 9 basis points from the prior quarter, as growth in 

risk-weighted assets outpaced tier 1 capital formation. The average CBLR for the 1,737 banks 

that elected to use the CBLR framework was 11.3 percent. 

One New Community Bank 

Opened and No 

Community Banks Failed 

in Third Quarter 2021 

The number of community banks declined to 4,450, down 40 from the previous quarter. One 

new community bank opened, ten banks transitioned from community to noncommunity 

banks, five banks transitioned from noncommunity to community banks, one community 

bank ceased operations, and 35 community banks merged during the quarter.5 

Author: 

Angela Hinton 

Senior Financial Analyst 

Division of Insurance and Research 

5 The number of community bank reporters excludes one bank that ceased operations and did not file a Call Report this 

quarter but continues to have an active banking charter. 

FDIC QUARTERLY 17 
2021 • Volume           15  • Number 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

2021* 2020* 2020 2019 2018 2017 2016 

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 (%)

1.28 

11.93 

10.25 

0.46

0.06 

10.91 

3.29 

39.11 

4,450

3.30 

1.07 

9.44

10.40

0.64

0.11 

10.96 

3.43

-6.62

4,587

4.62

1.09 

9.72 

10.32 

0.60 

0.12 

14.06

3.39 

-0.02

4,557

4.52

1.19 

10.24

11.15 

0.65 

0.13 

-1.26

3.66 

-4.15

4,748

3.96 

1.19 

10.57 

11.09 

0.70 

0.13 

2.20 

3.72 

27.90 

4,979

3.64

0.96 

8.65 

10.80 

0.78 

0.16 

1.12 

3.62 

0.19 

5,227

5.72 

0.99 

8.81 

10.69 

0.94

0.16 

3.05 

3.57 

2.46

5,461

4.67

* 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 Community Banks 

(dollar figures in millions)

Number of institutions reporting

Total employees (full-time equivalent)

 3rd Quarter 

2021 

2nd Quarter 

2021 

3rd Quarter 

2020 

%Change 

20Q3-21Q3 

4,450 

390,771

4,490 

392,145

4,587 

388,807

-3.0

0.5 

CONDITION DATA 

Total assets 

Loans secured by real estate

1-4 Family residential mortgages

Nonfarm nonresidential

Construction and development 

Home equity lines

Commercial & industrial loans 

Loans to individuals 

Credit cards 

Farm loans 

Other loans & leases 

Less: Unearned income

Total loans & leases 

Less: Reserve for losses*

Net loans and leases

Securities** 

Other real estate owned 

Goodwill and other intangibles

All other assets

$2,737,541

1,275,722

384,803

526,763

126,065

40,753

263,770

65,271

2,024

46,772

52,522

1,001

1,703,055

22,513

1,680,542

570,084

1,367

20,346

465,202

$2,671,947

1,240,850

378,984

511,702

120,008

40,654

300,512

66,777

1,970

45,729

47,033

1,318

1,699,583

22,327

1,677,256

531,289

1,559

18,078

443,766

$2,468,308

1,206,103

390,307

479,600

113,708

42,767

344,182

63,734

2,021

51,061

44,854

1,283

1,708,651

21,758

1,686,892

408,126

2,080

17,758

353,452

10.9 

5.8 

-1.4

9.8 

10.9 

-4.7

-23.4

2.4

0.1 

-8.4

17.1 

-22.0

-0.3

3.5 

-0.4

39.7 

-34.2

14.6

31.6 

Total liabilities and capital

Deposits 

Domestic office deposits 

Foreign office deposits

Brokered deposits 

Estimated insured deposits 

Other borrowed funds

Subordinated debt

All other liabilities

Total equity capital (includes minority interests)

Bank equity capital 

2,737,541

2,334,128

2,331,710

2,419

51,598

1,571,016

84,259

283 

24,636

294,235

294,109

2,671,947

2,269,413

2,266,700

2,712

52,652

1,545,846

94,416

338 

23,800

283,981

283,856

2,468,308

2,041,050

2,038,691

2,359

60,576

1,438,682

131,482

241

24,969

270,566

270,456

10.9 

14.4

14.4

2.5 

-14.8

9.2 

-35.9

17.2 

-1.3

8.7 

8.7 

Loans and leases 30-89 days past due

Noncurrent loans and leases

Restructured loans and leases 

Mortgage-backed securities

Earning assets

FHLB Advances

Unused loan commitments

Trust assets 

Assets securitized and sold

Notional amount of derivatives

5,334

11,065

4,988

260,168

2,568,776

55,360

393,803

320,703

24,359

142,533

5,298

11,674

5,109

241,257

2,508,139

57,668

384,670

342,175

24,145

145,303

6,661

13,650

5,474

188,954

2,308,797

83,042

335,658

262,884

21,601

202,063

-19.9

-18.9

-8.9

37.7 

11.3 

-33.3

17.3 

22.0 

12.8 

-29.5

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****

Total net income (includes minority interests)

Bank net income 

Net charge-offs

Cash dividends 

Retained earnings

Net operating income

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

Quarters 2021 Quarters 2020 %Change 2021 2020 20Q3-21Q3 

$67,113 $66,038 1.6 $22,873 $21,757 5.1 

6,079 10,658 -43.0 1,845 3,009 -38.7

61,034 55,381 10.2 21,028 18,748 12.2 

723 5,746 -87.4 270 1,620 -83.3

18,802 17,437 7.8 6,223 6,982 -10.9

48,734 45,676 6.7 16,559 15,726 5.3 

672 671 0.2 123 342 -64.0

5,598 3,597 55.6 1,902 1,493 27.4

2 1 N/M 1 0 N/M

25,454 18,470 37.8 8,644 7,234 19.5 

25,418 18,434 37.9 8,631 7,214 19.6 

725 1,335 -45.7 275 427 -35.6

9,475 8,025 18.1 3,318 2,528 31.3 

15,943 10,409 53.2 5,312 4,686 13.4

24,890 17,893 39.1 8,538 6,954 22.8 

* For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.

** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.

*** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13,

this item represents the provision for loan and lease losses. 

**** See Notes to Users for explanation. N/M - Not Meaningful

18 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Prior Periods Adjusted for Mergers 

(dollar figures in millions)

Number of institutions reporting

Total employees (full-time equivalent)

3rd Quarter 

2021 

2nd Quarter 

2021 

3rd Quarter 

2020 

%Change 

20Q3-21Q3 

4,450 

390,771

4,449 

392,455 

4,443 

385,440 

0.2 

1.4

CONDITION DATA 

Total assets 

Loans secured by real estate

1-4 Family residential mortgages

Nonfarm nonresidential

Construction and development 

Home equity lines

Commercial & industrial loans 

Loans to individuals 

Credit cards 

Farm loans 

Other loans & leases 

Less: Unearned income

Total loans & leases 

Less: Reserve for losses*

Net loans and leases

Securities** 

Other real estate owned 

Goodwill and other intangibles

All other assets

$2,737,541

1,275,722

384,803

526,763

126,065

40,753

263,770

65,271

2,024

46,772

52,522

1,001

1,703,055

22,513

1,680,542

570,084

1,367

20,346

465,202

$2,681,770

1,246,926

379,320

514,054

120,036

40,612

302,104

63,532

1,970

45,633

50,407

1,313

1,707,289

22,561

1,684,728

533,804

1,555

20,052

441,631

$2,480,752

1,207,688

386,722

480,995

112,954

42,493

351,028

61,824

1,882

50,367

52,651

1,268

1,722,290

22,039

1,700,251

407,550

2,054

19,474

351,423

10.4

5.6 

-0.5

9.5 

11.6 

-4.1

-24.9

5.6 

7.5 

-7.1

-0.2

-21.1

-1.1

2.2 

-1.2

39.9 

-33.4

4.5

32.4

Total liabilities and capital

Deposits 

Domestic office deposits 

Foreign office deposits

Brokered deposits 

Estimated insured deposits 

Other borrowed funds

Subordinated debt

All other liabilities

Total equity capital (includes minority interests)

Bank equity capital 

2,737,541

2,334,128

2,331,710

2,419

51,598

1,571,016

84,259

283 

24,636

294,235

294,109

2,681,770

2,275,225

2,272,844

2,381

51,773

1,551,649

94,135

334

24,204

287,871

287,746

2,480,752

2,045,912

2,043,553

2,359

63,348

1,442,238

136,232

520 

25,320

272,768

272,658

10.4

14.1

14.1

2.5 

-18.5

8.9 

-38.2

-45.6

-2.7

7.9 

7.9 

Loans and leases 30-89 days past due

Noncurrent loans and leases

Restructured loans and leases 

Mortgage-backed securities

Earning assets

FHLB Advances

Unused loan commitments

Trust assets 

Assets securitized and sold

Notional amount of derivatives

5,334

11,065

4,988

260,168

2,568,776

55,360

393,803

320,703

24,359

142,533

5,332

11,912

5,125

241,315

2,514,913

57,643

379,207

341,622

24,145

145,774

6,688

13,719

5,471

187,864

2,318,408

83,830

331,834

261,828

21,446

202,901

-20.2

-19.3

-8.8

38.5 

10.8 

-34.0

18.7 

22.5 

13.6 

-29.8

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****

Total net income (includes minority interests)

Bank net income 

Net charge-offs

Cash dividends 

Retained earnings

Net operating income

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

Quarters 2021 Quarters 2020 %Change 2021 2020 20Q3-21Q3 

$67,113 $66,191 1.4 $22,873 $21,851 4.7

6,079 10,693 -43.1 1,845 3,019 -38.9

61,034 55,498 10.0 21,028 18,832 11.7 

723 5,985 -87.9 270 1,643 -83.5

18,802 17,157 9.6 6,223 6,840 -9.0

48,734 45,411 7.3 16,559 15,659 5.7 

672 690 N/M 123 352 N/M

5,598 3,560 57.2 1,902 1,487 27.9 

2 1 N/M 1 0 N/M

25,454 18,391 38.4 8,644 7,235 19.5 

25,418 18,355 38.5 8,631 7,214 19.6 

725 1,463 -50.5 275 514 -46.4

9,475 8,179 15.8 3,318 2,547 30.3 

15,943 10,176 56.7 5,312 4,667 13.8 

24,890 17,797 39.9 8,538 6,948 22.9 

* For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.

** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.

*** For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13,

this item represents the provision for loan and lease losses. 

**** See Notes to Users for explanation. N/M - Not Meaningful

FDIC QUARTERLY 19 
2021 • Volume           15  • Number 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE III-B. Aggregate Condition and Income Data by Geographic Region, FDIC-Insured Community Banks 

Third Quarter 2021 

(dollar figures in millions)

Number of institutions reporting

Total employees (full-time equivalent)

All Community Banks 

Geographic Regions* 

New York Atlanta Chicago Kansas City Dallas San Francisco 

4,450

390,771

493

80,314

506 

42,843

975 1,206

80,014 70,846

998 

83,436

272 

33,318

CONDITION DATA 

Total assets 

Loans secured by real estate

1-4 Family residential mortgages

Nonfarm nonresidential

Construction and development 

Home equity lines

Commercial & industrial loans 

Loans to individuals 

Credit cards 

Farm loans 

Other loans & leases 

Less: Unearned income

Total loans & leases 

Less: Reserve for losses**

Net loans and leases

Securities*** 

Other real estate owned 

Goodwill and other intangibles

All other assets

$2,737,541

1,275,722

384,803

526,763

126,065

40,753

263,770

65,271

2,024

46,772

52,522

1,001

1,703,055

22,513

1,680,542

570,084

1,367

20,346

465,202

$704,667

376,039

134,037

144,497

27,117

11,909

67,020

15,611

374

547

17,032

175 

476,073

5,587

470,485

124,142

222 

6,956

102,862

$292,203

133,684

37,466

63,918

15,910

5,438

26,655

6,540

102 

1,403

2,997

176 

171,103

2,236

168,866

62,548

236 

1,283

59,270

$490,223 $459,888

218,863 199,927

64,347 55,862

87,270 71,153

18,851 19,829

9,051 4,609

48,208 45,033

12,193 11,935

185 782 

7,670 26,142

12,416 6,861

99 123 

299,252 289,776

3,994 4,195

295,258 285,581

110,690 100,198

267 278 

3,635 2,837

80,373 70,993

$514,184

225,699

67,031

98,084

33,399

4,499

49,563

12,812

207 

8,352

8,102

230 

304,298

4,145

300,154

114,517

302 

3,342

95,869

$276,377

121,510

26,061

61,841

10,958

5,246

27,290

6,180

374

2,657

5,113

196 

162,554

2,356

160,197

57,990

62 

2,293

55,835

Total liabilities and capital

Deposits 

Domestic office deposits 

Foreign office deposits

Brokered deposits 

Estimated insured deposits 

Other borrowed funds

Subordinated debt

All other liabilities

Total equity capital (includes minority interests)

Bank equity capital 

2,737,541

2,334,128

2,331,710

2,419

51,598

1,571,016

84,259

283 

24,636

294,235

294,109

704,667

594,152

593,510

642

20,654

396,935

22,962

193 

9,198

78,163

78,144

292,203

253,214

253,204

10 

3,033

164,037

6,738

7 

2,085

30,159

30,155

490,223 459,888

414,738 391,545

414,738 391,545

0 0 

8,447 9,154

298,442 283,940

19,218 16,081

25 6 

3,586 3,186

52,655 49,070

52,575 49,069

514,184

443,304

443,304

0 

6,441

291,842

11,831

40

3,730

55,279

55,257

276,377

237,177

235,410

1,767

3,870

135,819

7,429

11 

2,851

28,910

28,909

Loans and leases 30-89 days past due

Noncurrent loans and leases

Restructured loans and leases 

Mortgage-backed securities

Earning assets

FHLB Advances

Unused loan commitments

Trust assets 

Assets securitized and sold

Notional amount of derivatives

5,334

11,065

4,988

260,168

2,568,776

55,360

393,803

320,703

24,359

142,533

1,404

3,573

1,708

67,851

661,115

16,287

99,480

71,829

10,013

58,968

568 

916 

406

29,020

273,941

4,657

35,577

9,223

112 

11,329

812 861 

1,976 1,624

1,091 788 

44,495 37,838

459,929 432,243

13,264 10,672

71,281 74,608

68,732 112,387

4,607 4,270

22,289 25,562

1,363

2,213

623 

46,556

481,755

7,210

69,334

38,067

4,955

14,862

327 

764

372 

34,408

259,794

3,270

43,522

20,465

401

9,523

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** ***

Total net income (includes minority interests)

Bank net income 

Net charge-offs

Cash dividends 

Retained earnings

Net operating income

$22,873

1,845

21,028

270 

6,223

16,559

123 

1,902

1 

8,644

8,631

275 

3,318

5,312

8,538

$5,726

506 

5,221

19 

1,222

3,934

37 

596 

0 

1,929

1,928

119 

757 

1,171

1,899

$2,377

173 

2,204

28 

620 

1,803

17 

189 

0 

820 

819 

33 

190 

629 

806 

$3,999 $3,997

329 367 

3,670 3,630

39 74

1,514 1,075

3,093 2,853

15 20 

372 248

0 0 

1,695 1,550

1,692 1,550

31 23 

712 605 

980 945

1,682 1,532

$4,538

351 

4,187

98 

1,291

3,267

33 

261 

0 

1,886

1,878

59 

695 

1,183

1,856

$2,236

120 

2,117

13 

502 

1,608

2 

236 

0 

764

764

10 

359 

404

762 

* See Table V-A for explanation.

** For institutions that have adopted ASU 2016-13, this item represents the allowance for credit losses on loans and leases held for investment and allocated transfer risk.

*** For institutions that have adopted ASU 2016-13, securities are reported net of allowances for credit losses.

  For institutions that have adopted ASU 2016-13, this item represents provisions for credit losses on a consolidated basis; for institutions that have not adopted ASU 2016-13,

this item represents the provision for loan and lease losses. 

** *** See Notes to Users for explanation.

20 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

 

 

Table IV-B. Third Quarter 2021, FDIC-Insured Community Banks 

Performance ratios (annualized, %) 

Yield on earning assets

Cost of funding earning assets

Net interest margin

Noninterest income to assets

Noninterest expense to assets

Loan and lease loss provision to assets 

Net operating income to assets

Pretax return on assets

Return on assets 

Return on equity 

Net charge-offs to loans and leases

Loan and lease loss provision to net charge-offs

Efficiency ratio 

Net interest income to operating revenue

% of unprofitable institutions

% of institutions with earnings gains

All Community Banks Third Quarter 2021, Geographic Regions*

 3rd Quarter 2nd Quarter 

2021 2021 New York Atlanta Chicago Kansas City Dallas San Francisco 

3.60 3.58 

0.29 0.32 

3.31 3.25 

0.92 0.91 

2.45 2.45

0.04 0.01 

1.26 1.23 

1.56 1.54

1.28 1.26 

11.88 11.92 

0.06 0.05 

98.25 21.87 

60.40 61.42

77.16 76.94

4.31 4.21

65.98 64.81

3.49

0.31 

3.19 

0.70 

2.25 

0.01 

1.09 

1.44

1.10 

9.96 

0.10 

16.09 

60.69 

81.04

4.46

69.98 

3.53 3.52 3.73 

0.26 0.29 0.34

3.27 3.23 3.39 

0.86 1.25 0.94

2.51 2.55 2.50 

0.04 0.03 0.06 

1.12 1.39 1.34

1.40 1.70 1.58 

1.14 1.40 1.36 

11.03 13.01 12.77 

0.08 0.04 0.03 

84.49 127.84 317.36 

63.37 59.31 60.24

78.05 70.79 77.15 

6.72 4.31 3.81 

71.74 59.79 59.78 

3.81 

0.29 

3.52 

1.02 

2.57 

0.08 

1.46

1.68 

1.48

13.77 

0.08 

166.08 

59.34

76.43

3.71 

72.04

3.52 

0.19 

3.33 

0.74

2.38 

0.02 

1.13 

1.48

1.13 

10.75 

0.02 

124.32

61.17 

80.84

4.04

75.37 

Table V-B. First Three Quarters 2021, FDIC-Insured Community Banks 

Performance ratios (%) 

Yield on earning assets

Cost of funding earning assets

Net interest margin

Noninterest income to assets

Noninterest expense to assets

Loan and lease loss provision to assets 

Net operating income to assets

Pretax return on assets

Return on assets 

Return on equity 

Net charge-offs to loans and leases

Loan and lease loss provision to net charge-offs

Efficiency ratio 

Net interest income to operating revenue

% of unprofitable institutions

% of institutions with earnings gains

All Community Banks First Three Quarters 2021, Geographic Regions* 

First Three First Three 

Quarters 2021 Quarters 2020 New York Atlanta Chicago Kansas City Dallas San Francisco 

3.62 4.09

0.33 0.66 

3.29 3.43

0.95 1.01 

2.46 2.64

0.04 0.33 

1.26 1.04

1.57 1.27 

1.28 1.07 

11.93 9.44

0.06 0.11 

99.71 430.50

60.67 62.17 

76.45 76.05 

3.30 4.62

75.26 50.53 

3.48

0.35 

3.13 

0.73 

2.27 

0.00 

1.06 

1.47

1.12 

10.11 

0.08 

-2.46

61.52 

80.01 

5.07 

82.56 

3.57 3.52 3.77 

0.29 0.33 0.38 

3.28 3.19 3.40

0.88 1.32 1.00 

2.53 2.58 2.50 

0.04 0.04 0.07 

1.12 1.39 1.40

1.40 1.71 1.64

1.14 1.40 1.42

11.00 13.09 13.33 

0.05 0.03 0.05 

143.43 237.38 202.25 

63.59 59.39 59.33 

77.68 69.41 76.22 

6.52 3.18 1.74

77.27 70.36 74.54

3.83 

0.33 

3.50 

0.97 

2.58 

0.08 

1.39 

1.60 

1.41

13.04

0.07 

199.08 

60.52 

77.11 

2.61 

75.15 

3.52 

0.21 

3.31 

0.80 

2.39 

-0.01

1.18 

1.54

1.19 

11.21 

0.04

-51.83

60.84

79.58 

4.04

79.41

* See Table V-A for explanation.

FDIC QUARTERLY 21 
2021 • Volume           15  • Number 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table VI-B. Loan Performance, FDIC-Insured Community Banks 

September 30, 2021

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate

Construction and development 

Nonfarm nonresidential

Multifamily residential real estate 

Home equity loans

Other 1-4 family residential

Commercial and industrial loans 

Loans to individuals 

Credit card loans 

Other loans to individuals 

All other loans and leases (including farm)

Total loans and leases 

All Community Banks 

Geographic Regions* 

New York Atlanta Chicago Kansas City Dallas San Francisco 

0.27 

0.27 

0.18 

0.15 

0.30 

0.40

0.36 

1.19 

1.74

1.18 

0.21 

0.31 

0.26 

0.32 

0.19 

0.24

0.33 

0.31 

0.35 

1.23 

1.73 

1.22 

0.07 

0.29 

0.27 

0.22 

0.15 

0.06 

0.38 

0.51 

0.47

1.13 

0.91 

1.13 

0.15 

0.33 

0.28 0.25 

0.29 0.28 

0.18 0.18 

0.10 0.09 

0.25 0.22 

0.48 0.36 

0.23 0.35 

0.51 0.98 

0.50 2.57 

0.51 0.87 

0.15 0.25 

0.27 0.30 

0.35 

0.26 

0.23 

0.11 

0.38 

0.56 

0.46

2.28 

1.29 

2.30 

0.39 

0.45

0.14

0.23 

0.11 

0.04

0.21 

0.21 

0.37 

0.70 

1.08 

0.67 

0.16 

0.20 

Percent of Loans Noncurrent 

All loans secured by real estate

Construction and development 

Nonfarm nonresidential

Multifamily residential real estate 

Home equity loans

Other 1-4 family residential

Commercial and industrial loans 

Loans to individuals 

Credit card loans 

Other loans to individuals 

All other loans and leases (including farm)

Total loans and leases 

0.66 

0.46

0.65 

0.32 

0.55 

0.76 

0.72 

0.45

0.71 

0.44

0.50 

0.65 

0.79 

0.79 

0.80 

0.46

0.68 

0.91 

0.79 

0.38 

0.94

0.37 

0.06 

0.75 

0.53 

0.26 

0.47

0.17 

0.39 

0.73 

0.62 

0.39 

0.56 

0.39 

0.40

0.53 

0.70 0.54

0.52 0.38 

0.78 0.54

0.22 0.18 

0.40 0.30 

0.77 0.43

0.69 0.59 

0.26 0.29 

0.20 0.94

0.26 0.25 

0.36 0.77 

0.66 0.56 

0.69 

0.30 

0.68 

0.19 

0.34

0.87 

0.88 

0.99 

0.47

1.00 

0.53 

0.73 

0.43

0.44

0.35 

0.17 

1.07 

0.49

0.64

0.26 

0.44

0.25 

0.72 

0.47

Percent of Loans Charged-Off (net, YTD) 

All loans secured by real estate

Construction and development 

Nonfarm nonresidential

Multifamily residential real estate 

Home equity loans

Other 1-4 family residential

Commercial and industrial loans 

Loans to individuals 

Credit card loans 

Other loans to individuals 

All other loans and leases (including farm)

Total loans and leases 

0.02 

0.01 

0.04

0.02 

-0.01

0.01 

0.11 

0.48

3.69 

0.38 

0.08 

0.06 

0.05 

0.08 

0.08 

0.03 

-0.01

0.03 

0.13 

0.72 

3.76 

0.64

0.04

0.08 

0.00 

-0.06

0.03 

0.00 

-0.03

-0.01

0.12 

0.42

0.85 

0.42

0.21 

0.05 

0.01 0.02 

0.00 0.00 

0.03 0.04

0.00 0.09 

-0.01 -0.02

-0.01 0.00 

0.07 0.06 

0.15 0.53 

1.08 6.78 

0.13 0.14

0.07 0.06 

0.03 0.05 

0.01 

0.02 

0.01 

0.01 

0.04

0.01 

0.18 

0.45

1.24

0.44

0.09 

0.07 

-0.01

-0.06

0.00 

0.00 

0.00 

-0.01

0.05 

0.57 

1.53 

0.51 

0.26 

0.04

Loans Outstanding (in billions) 

All loans secured by real estate

Construction and development 

Nonfarm nonresidential

Multifamily residential real estate 

Home equity loans

Other 1-4 family residential

Commercial and industrial loans 

Loans to individuals 

Credit card loans 

Other loans to individuals 

All other loans and leases (including farm)

Total loans and leases 

$1,275.7

126.1 

526.8 

120.2 

40.8

384.8

263.8 

65.3 

2.0 

63.2 

99.3 

1,704.1

$376.0 

27.1 

144.5

56.2 

11.9 

134.0

67.0 

15.6 

0.4

15.2 

17.6 

476.2

$133.7 

15.9 

63.9 

6.5 

5.4

37.5 

26.7 

6.5 

0.1 

6.4

4.4

171.3 

$218.9 $199.9 

18.9 19.8 

87.3 71.2 

21.6 13.7 

9.1 4.6

64.3 55.9 

48.2 45.0

12.2 11.9 

0.2 0.8 

12.0 11.2 

20.1 33.0 

299.4 289.9 

$225.7 

33.4

98.1 

8.8 

4.5

67.0 

49.6

12.8 

0.2 

12.6 

16.5 

304.5

$121.5 

11.0 

61.8 

13.4

5.2 

26.1 

27.3 

6.2 

0.4

5.8 

7.8 

162.8 

Memo: Unfunded Commitments (in millions) 

Total Unfunded Commitments

Construction and development: 1-4 family residential

Construction and development: CRE and other

Commercial and industrial 

393,803

37,770

85,433

125,139

99,480

6,815

24,653

32,594

35,577

5,619

8,474

9,942

71,281 74,608

4,227 5,793

13,753 12,691

25,791 22,140

69,334

11,837

18,267

20,364

43,522

3,480

7,595

14,309

* See Table V-A for explanation.

Note: 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.

22 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

INSURANCE FUND INDICATORS 

Deposit Insurance Fund Increases by $1.4 Billion 

Insured Deposits Grow by 0.9 Percent 

DIF Reserve Ratio Is Unchanged at 1.27 Percent 

During the third quarter, the Deposit Insurance Fund (DIF) balance increased by $1.4 billion 

to $121.9 billion. Assessment income of $1.7 billion drove the fund balance increase. 

Interest earned on investments of $221 million, negative provisions for insurance losses of 

$53 million, and other miscellaneous income of $65 million also added to the fund balance. 

Operating expenses of $448 million and unrealized losses on available-for-sale securities 

of $165 million partially offset the increase in the fund balance. No insured institutions 

failed in the third quarter. 

The deposit insurance assessment base—average consolidated total assets minus average 

tangible equity—rose by 1.7 percent in the third quarter and 8.4 percent over 12 months.1,2 

Total estimated insured deposits increased by 0.9 percent in the third quarter of 2021 

and by 7.3 percent year over year. The DIF’s reserve ratio (the fund balance as a percent of 

insured deposits) was 1.27 percent on September 30, 2021, unchanged from the previous 

quarter and 3 basis points lower than the previous year. The 12-month decline in the 

reserve ratio was entirely the result of extraordinary insured deposit growth, mostly 

during first quarter 2021. 

The Federal Deposit Insurance Act (the FDI Act) requires a minimum reserve ratio for the 

DIF of 1.35 percent. If the reserve ratio falls below 1.35 percent, the FDIC has a minimum 

of eight years to return the reserve ratio to 1.35 percent, reducing the likelihood of a large 

increase in assessment rates. During the first half of 2020, due to extraordinary insured 

deposit growth, the reserve ratio dropped 8 basis points to 1.30 percent as of June 30, 

2020. Since the reserve ratio fell below its statutorily required minimum of 1.35 percent on 

June 30, 2020, the FDIC Board adopted a Fund Restoration Plan in September 2020.3 

Author: 

Kevin Brown 

Senior Financial Analyst 

Division of Insurance and Research 

1 There are additional adjustments to the assessment base for banker’s banks and custodial banks. 

2 Figures for estimated insured deposits and the assessment base include insured branches of foreign banks, in addition 

to insured commercial banks and savings institutions. 

3 See https://www.fdic.gov/news/board-matters/2020/2020-09-15-notice-dis-a-fr.pdf. 

FDIC QUARTERLY 23 
2021 • Volume           15  • Number 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table I-C. Insurance Fund Balances and Selected Indicators 

(dollar figures in millions) 

Deposit Insurance Fund* 

3rd 

Quarter 

2021 

2nd 

Quarter 

2021 

1st 

Quarter 

2021 

4th 

Quarter 

2020 

3rd 

Quarter 

2020 

2nd 

Quarter 

2020 

1st 

Quarter 

2020 

4th 

Quarter 

2019 

3rd 

Quarter 

2019 

2nd 

Quarter 

2019 

1st 

Quarter 

2019 

4th 

Quarter 

2018 

3rd 

Quarter 

2018 

Beginning Fund Balance $120,547 $119,362 $117,897 $116,434 $114,651 $113,206 $110,347 $108,940 $107,446 $104,870 $102,609 $100,204 $97,588

Changes in Fund Balance: 

Assessments earned

Interest earned on 

investment securities 

1,662

221 

1,589

251 

1,862

284

1,884

330 

2,047

392 

1,790

454

1,372

507 

1,272

531 

1,111

544

1,187

535 

1,369

507 

1,351

481

2,728

433

Realized gain on sale of

investments 0 0 0 0 0 0 0 0 0 0 0 0 0 

Operating expenses 448 466 454 470 451 465 460 460 443 459 434 453 434

Provision for insurance

losses -53 -42 -57 -48 -74 -47 12 -88 -192 -610 -396 -236 -121

All other income,

net of expenses 65 2 1 9 5 2 2 21 4 9 2 2 2 

Unrealized gain/(loss) on

available-for-sale

securities** -165 -233 -285 -338 -284 -383 1,450 -45 86 694 421 788 -234

Total fund balance change 1,388 1,185 1,465 1,463 1,783 1,445 2,859 1,407 1,494 2,576 2,261 2,405 2,616

Ending Fund Balance 121,935 120,547 119,362 117,897 116,434 114,651 113,206 110,347 108,940 107,446 104,870 102,609 100,204

Percent change from

four quarters earlier 4.72 5.14 5.44 6.84 6.88 6.71 7.95 7.54 8.72 10.10 10.31 10.63 10.72 

Reserve Ratio (%) 1.27 1.27 1.25 1.29 1.30 ` 1.30 1.38 1.41 1.41 1.40 1.36 1.36 1.36 

Estimated Insured 

Deposits 9,577,101 9,490,249 9,513,955 9,123,046 8,927,668 8,841,566 8,181,859 7,828,160 7,744,543 7,695,116 7,699,009 7,525,204 7,378,900

Percent change from

four quarters earlier 7.27 7.34 16.28 16.54 15.28 14.90 6.27 4.03 4.96 4.59 4.94 5.14 3.89 

Domestic Deposits 17,676,713 17,203,253 16,980,327 16,339,032 15,716,702 15,563,637 14,351,881 13,262,843 13,020,253 12,788,773 12,725,363 12,659,406 12,367,954

Percent change from

four quarters earlier 12.47 10.53 18.31 23.19 20.71 21.70 12.78 4.77 5.27 4.14 3.41 4.37 3.36 

Assessment Base*** 20,017,170 19,687,718 19,214,924 18,806,094 18,465,171 18,153,259 16,484,341 16,157,322 15,904,903 15,684,001 15,561,782 15,452,139 15,229,424

Percent change from

four quarters earlier 8.41 8.45 16.56 16.39 16.10 15.74 5.93 4.56 4.44 3.77 3.27 3.01 2.67 

Number of Institutions 

Reporting 4,923 4,960 4,987 5,011 5,042 5,075 5,125 5,186 5,267 5,312 5,371 5,415 5,486

DIF Reserve Ratios 

Percent of Insured Deposits 

Deposit Insurance Fund Balance 

and Insured Deposits 

($ Millions) 

DIF DIF-Insured 

Balance Deposits 

9/18 $100,204 $7,378,900

12/18 102,609 7,525,204

3/19 104,870 7,699,009

6/19 107,446 7,695,116

9/19 108,940 7,744,543

12/19 110,347 7,828,160

3/20 113,206 8,181,859

6/20 114,651 8,841,566

9/20 116,434 8,927,668

12/20 117,897 9,123,046

3/21 119,362 9,513,955

6/21 120,547 9,490,249

9/21 121,935 9,577,101

1.40 1.41 1.41 1.36 1.36 1.36 1.38 

1.30 1.30 1.29 1.27 1.27 1.25 

9/18 12/18 3/19 6/19 9/19 12/19 3/20 6/20 9/20 12/20 3/21 6/21 9/21 

Table II-C. Problem Institutions and Failed Institutions 

(dollar figures in millions) 2021  2020** ** 2020 2019 2018 2017 2016 2015 

Problem Institutions 

Number of institutions 46 56 56 51 60 95 123 183 

Total assets $50,588 $53,884 $55,830 $46,190 $48,481 $13,939 $27,624 $46,780

Failed Institutions 

Number of institutions 0 2 4 4 0 8 5 8 

Total assets***** $0 $253 $455 $209 $0 $5,082 $277 $6,706

* Quarterly financial statement results are unaudited. 

** Includes unrealized postretirement benefit gain (loss).

*** Average consolidated total assets minus tangible equity, with adjustments for banker’s banks and custodial banks.

  Through September 30.

** *** Total assets are based on final Call Reports submitted by failed institutions.

24 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

 

 

 

 

 

 

Table III-C. Estimated FDIC-Insured Deposits by Type of Institution 

(dollar figures in millions) 

September 30, 2021

Number of 

Institutions 

Total 

Assets 

Domestic 

Deposits* 

Est. Insured 

Deposits 

Commercial Banks and Savings Institutions 

FDIC-Insured Commercial Banks

FDIC-Supervised

OCC-Supervised

Federal Reserve-Supervised

FDIC-Insured Savings Institutions

OCC-Supervised

FDIC-Supervised

Federal Reserve-Supervised

4,301

2,864

750 

687 

613 

269 

307 

37 

$21,781,913

3,803,324

14,464,684

3,513,905

1,469,746

617,649

403,507

448,590

$16,400,571

3,176,529

10,590,408

2,633,634

1,233,315

499,614

322,689

411,012

$8,600,841

1,869,480

5,514,211

1,217,150

942,565

406,346

241,268

294,950

Total Commercial Banks and Savings Institutions 4,914 23,251,659 17,633,886 9,543,405

Other FDIC-Insured Institutions 

U.S. Branches of Foreign Banks 9 87,265 42,827 33,696

Total FDIC-Insured Institutions 4,923 23,338,924 17,676,713 9,577,101

* Excludes $1.5 trillion in foreign office deposits, which are not FDIC insured.

Table IV-C. Distribution of Institutions and Assessment Base by Assessment Rate Range

Quarter Ending June 30, 2021 (dollar figures in billions) 

Number of Percent of Total Amount of Percent of Total 

Annual Rate in Basis Points* Institutions Institutions Assessment Base Assessment Base 

1.50 - 3.00 2,915 58.8 $10,721.4 54.46

3.01 - 6.00 1,454 29.3 8,194.4 41.62

6.01 - 10.00 500 10.1 687.8 3.49

10.01 - 15.00 30 0.6 56.3 0.29 

15.01 - 20.00 56 1.1 27.4 0.14

20.01 - 25.00 4 0.1 0.3 0.00 

> 25.00 1 0.0 0.0 0.00 

* Beginning in the second quarter of 2011, the assessment base was changed to average consolidated total assets minus tangible equity, as required by the Dodd-Frank Act.

FDIC QUARTERLY 25 
2021 • Volume           15  • Number 4

 	 	

	 	

	 	

	 	 	 	

	 	 	 	 	

	 	 	 	 	 	 	 	 	 		 	

	 	 	 	 	 	 	

	 	 	 	 	 	

	 	 	 	 	 	 	 	 	

Notes to Users 

This publication contains financial data and other information for 

depository institutions insured by the Federal Deposit Insurance 

Corporation (FDIC). These notes are an integral part of this 

publication and provide information regarding the comparability of 

source data and reporting differences over time. 

Tables I-A through VIII-A. 

The information presented in Tables I-A through VIII-A of the 

FDIC Quarterly Banking Profile is aggregated for all FDIC-insured Call 

Report filers, both commercial banks and savings institutions. Some 

tables are arrayed by groups of FDIC-insured institutions based 

on predominant types of asset concentration, while other tables 

aggregate institutions by asset size and geographic region. Quarterly 

and full-year data are provided for selected indicators, including 

aggregate condition and income data, performance ratios, condition 

ratios, and structural changes, as well as past due, noncurrent, and 

charge-off information for loans outstanding and other assets. 

Tables I-B through VI-B. 

The information presented in Tables I-B through VI-B is 

aggregated for all FDIC-insured commercial banks and savings 

institutions meeting the criteria for community banks that were 

developed for the FDIC’s Community Banking Study, published 

in December, 2012: https://www.fdic.gov/resources/communitybanking/cbi-study.html. 

The determination of which insured institutions are considered 

community banks is based on five steps. 

The first step in defining a community bank is to aggregate all 

charter-level data reported under each holding company into a 

single banking organization. This aggregation applies both to 

balance-sheet measures and the number and location of banking 

offices. Under the FDIC definition, if the banking organization is 

designated as a community bank, every charter reporting under 

that organization is also considered a community bank when 

working with data at the charter level. 

The second step is to exclude any banking organization where more 

than 50 percent of total assets are held in certain specialty banking 

charters, including: credit card specialists, consumer nonbank banks, 

industrial loan companies, trust companies, bankers’ banks, and banks 

holding 10 percent or more of total assets in foreign offices. 

Once the specialty organizations are removed, the third step 

involves including organizations that engage in basic banking 

activities as measured by the total loans-to-assets ratio (greater 

than 33 percent) and the ratio of core deposits to assets (greater 

than 50 percent). Core deposits are defined as non-brokered 

deposits in domestic offices. Analysis of the underlying data shows 

that these thresholds establish meaningful levels of basic lending 

and deposit gathering and still allow for a degree of diversity in how 

individual banks construct their balance sheets. 

The fourth step includes organizations that operate within a 

limited geographic scope. This limitation of scope is used as a 

proxy measure for a bank’s relationship approach to banking. 

Banks that operate within a limited market area have more ease in 

managing relationships at a personal level. Under this step, four 

criteria are applied to each banking organization. They include 

both a minimum and maximum number of total banking offices, a 

maximum level of deposits for any one office, and location-based 

criteria. The limits on the number of and deposits per office are 

adjusted upward quarterly. For banking offices, banks must have 

more than one office, and the maximum number of offices is 40 in 

1985 and reached 87 in 2016. The maximum level of deposits for 

any one office is $1.25 billion in deposits in 1985 and reached $6.97 

billion in deposits in 2016. The remaining geographic limitations 

are also based on maximums for the number of states (fixed at 3) 

and large metropolitan areas (fixed at 2) in which the organization 

maintains offices. Branch office data are based on the most recent 

data from the annual June 30 Summary of Deposits Survey that are 

available at the time of publication. 

Finally, the definition establishes an asset-size limit, also adjusted 

upward quarterly and below which the limits on banking activities 

and geographic scope are waived. The asset-size limit is $250 

million in 1985 and reached $1.39 billion in 2016. This final step 

acknowledges the fact that most of those small banks that are not 

excluded as specialty banks meet the requirements for banking 

activities and geographic limits in any event. 

Summary of FDIC Research Definition of 

Community Banking Organizations 

Community banks are designated at the level of the banking 

organization. 

(All charters under designated holding companies are considered 

community banking charters.) 

Exclude: Any organization with: 

— No loans or no core deposits 

— Foreign Assets ≥ 10% of total assets 

— More than 50% of assets in certain specialty banks, including: 

•	 credit card specialists

•	 consumer nonbank banks1 

•	 industrial loan companies

•	 trust companies

•	 bankers’ banks

Include: All remaining banking organizations with: 

— Total assets < indexed size threshold2 

— Total assets ≥ indexed size threshold, where: 

•	 Loan to assets > 33%

•	 Core deposits to assets > 50%

•	 More than 1 office but no more than the indexed maximum

number of offices.3 

•	 Number of large MSAs with offices ≤ 2

•	 Number of states with offices ≤ 3

•	 No single office with deposits > indexed maximum branch

deposit size.4 

Tables I-C through IV-C. 

A separate set of tables (Tables I-C through IV-C) provides 

comparative quarterly data related to the Deposit Insurance Fund 

(DIF), problem institutions, failed institutions, estimated FDIC1 Consumer nonbank banks are financial institutions with limited charters that 

can make commercial loans or take deposits, but not both. 

2 Asset size threshold indexed to equal $250 million in 1985 and $1.39 billion in 

2016. 

3 Maximum number of offices indexed to equal 40 in 1985 and 87 in 2016. 

4 Maximum branch deposit size indexed to equal $1.25 billion in 1985 and 

$6.97 billion in 2016. 

26 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

insured deposits, as well as assessment rate information. Depository 

institutions that are not insured by the FDIC through the DIF are 

not included in the FDIC Quarterly Banking Profile. U.S. branches of 

institutions headquartered in foreign countries and non-deposit 

trust companies are not included unless otherwise indicated. Efforts 

are made to obtain financial reports for all active institutions. 

However, in some cases, final financial reports are not available for 

institutions that have closed or converted their charters. 

DATA SOURCES 

The financial information appearing in this publication is obtained 

primarily from the Federal Financial Institutions Examination 

Council (FFIEC) Consolidated Reports of Condition and Income 

(Call Reports) and the OTS Thrift Financial Reports (TFR) submitted 

by all FDIC-insured depository institutions. (TFR filers began filing 

Call Reports effective with the quarter ending March 31, 2012.) This 

information is stored on and retrieved from the FDIC’s Research 

Information System (RIS) database. 

COMPUTATION METHODOLOGY 

Parent institutions are required to file consolidated reports, 

while their subsidiary financial institutions are still required to 

file separate reports. Data from subsidiary institution reports are 

included in the Quarterly Banking Profile tables, which can lead 

to double-counting. No adjustments are made for any doublecounting of subsidiary data. Additionally, certain adjustments 

are made to the OTS Thrift Financial Reports to provide closer 

conformance with the reporting and accounting requirements 

of the FFIEC Call Reports. (TFR filers began filing Call Reports 

effective with the quarter ending March 31, 2012.) 

All condition and performance ratios represent weighted averages, 

which is the sum of the individual numerator values divided by 

the sum of individual denominator values. All asset and liability 

figures used in calculating performance ratios represent average 

amounts for the period (beginning-of-period amount plus endof-period amount plus any interim periods, divided by the total 

number of periods). For “pooling-of-interest” mergers, the 

assets of the acquired institution(s) are included in average assets, 

since the year-to-date income includes the results of all merged 

institutions. No adjustments are made for “purchase accounting” 

mergers. Growth rates represent the percentage change over a 

12-month period in totals for institutions in the base period to 

totals for institutions in the current period. For the community 

bank subgroup, growth rates will reflect changes over time in the 

number and identities of institutions designated as community 

banks, as well as changes in the assets and liabilities, and income 

and expenses of group members. Unless indicated otherwise, 

growth rates are not adjusted for mergers or other changes in the 

composition of the community bank subgroup. When community 

bank growth rates are adjusted for mergers, prior period balances 

used in the calculations represent totals for the current group 

of community bank reporters, plus prior period amounts for 

any institutions that were subsequently merged into current 

community banks. 

All data are collected and presented based on the location of each 

reporting institution’s main office. Reported data may include 

assets and liabilities located outside of the reporting institution’s 

home state. In addition, institutions may relocate across state 

lines or change their charters, resulting in an inter-regional or 

inter-industry migration; institutions can move their home offices 

between regions, savings institutions can convert to commercial 

banks, or commercial banks may convert to savings institutions. 

ACCOUNTING CHANGES 

Financial accounting pronouncements by the Financial Accounting 

Standards Board (FASB) can result in changes in an individual 

bank’s accounting policies and in the Call Reports they submit. Such 

accounting changes can affect the aggregate amounts presented 

in the QBP for the current period and the period-to-period 

comparability of such financial data. 

The current quarter’s Financial Institution Letter (FIL) and related 

Call Report supplemental instructions can provide additional 

explanation to the QBP reader beyond any material accounting 

changes discussed in the QBP analysis. 

https://www.fdic.gov/news/financial-institution-letters/2021/ 

fil21068.html 

https://www.fdic.gov/regulations/resources/call/call.html 

Further information on changes in financial statement 

presentation, income recognition and disclosure is available 

from the FASB. http://www.fasb.org/jsp/FASB/Page/ 

LandingPage&cid=1175805317350. 

DEFINITIONS (in alphabetical order) 

All other assets – total cash, balances due from depository 

institutions, premises, fixed assets, direct investments in real 

estate, investment in unconsolidated subsidiaries, customers’ 

liability on acceptances outstanding, assets held in trading 

accounts, federal funds sold, securities purchased with agreements 

to resell, fair market value of derivatives, prepaid deposit insurance 

assessments, and other assets. 

All other liabilities – bank’s liability on acceptances, limited-life 

preferred stock, allowance for estimated off-balance-sheet credit 

losses, fair market value of derivatives, and other liabilities. 

Assessment base – effective April 1, 2011, the deposit insurance 

assessment base changed to “average consolidated total assets 

minus average tangible equity” with an additional adjustment to 

the assessment base for banker’s banks and custodial banks, as 

permitted under Dodd-Frank. Previously the assessment base was 

“assessable deposits” and consisted of deposits in banks’ domestic 

offices with certain adjustments. 

Assessment rate schedule – Initial base assessment rates for 

small institutions are based on a combination of financial ratios and 

CAMELS component ratings. Initial rates for large institutions— 

generally those with at least $10 billion in assets—are also based 

on CAMELS component ratings and certain financial measures 

combined into two scorecards—one for most large institutions and 

another for the remaining very large institutions that are structurally 

and operationally complex or that pose unique challenges and risks 

in case of failure (highly complex institutions). The FDIC may take 

additional information into account to make a limited adjustment to 

a large institution’s scorecard results, which are used to determine a 

large institution’s initial base assessment rate. 

While risk categories for small institutions (except new 

institutions) were eliminated effective July 1, 2016, initial rates for 

small institutions are subject to minimums and maximums based 

on an institution’s CAMELS composite rating. (Risk categories for 

large institutions were eliminated in 2011.) 

The current assessment rate schedule became effective July 1, 2016. 

Under the current schedule, initial base assessment rates range 

from 3 to 30 basis points. An institution’s total base assessment rate 

may differ from its initial rate due to three possible adjustments: 

(1) Unsecured Debt Adjustment: An institution’s rate may decrease 

FDIC QUARTERLY 27 
2021 • Volume           15  • Number 4

 

 

 

 

 

 

by up to 5 basis points for unsecured debt. The unsecured debt 

adjustment cannot exceed the lesser of 5 basis points or 50 percent 

of an institution’s initial base assessment rate (IBAR). Thus, for 

example, an institution with an IBAR of 3 basis points would have 

a maximum unsecured debt adjustment of 1.5 basis points and 

could not have a total base assessment rate lower than 1.5 basis 

points. (2) Depository Institution Debt Adjustment: For institutions 

that hold long-term unsecured debt issued by another insured 

depository institution, a 50 basis point charge is applied to the 

amount of such debt held in excess of 3 percent of an institution’s 

Tier 1 capital. (3) Brokered Deposit Adjustment: Rates for large 

institutions that are not well capitalized or do not have a composite 

CAMELS rating of 1 or 2 may increase (not to exceed 10 basis points) 

if their brokered deposits exceed 10 percent of domestic deposits. 

The assessment rate schedule effective July 1, 2016, is shown in the 

following table: 

Total Base Assessment Rates* 

Established Small Banks Large and 

Highly 

Complex 

Institutions** 

CAMELS Composite 

1 or 2 3 4 or 5 

Initial Base 

Assessment Rate 3 to 16 6 to 30 16 to 30 3 to 30 

Unsecured Debt 

Adjustment -5 to 0 -5 to 0 -5 to 0 -5 to 0

Brokered Deposit 

Adjustment N/A N/A N/A 0 to 10 

Total Base 

Assessment Rate 1.5 to 16 3 to 30 11 to 30 1.5 to 40

* All amounts for all categories are in basis points annually. Total base rates that are not the

minimum or maximum rate will vary between these rates. Total base assessment rates do not

include the depository institution debt adjustment.

 ** Effective July 1, 2016, large institutions are also subject to temporary assessment

surcharges in order to raise the reserve ratio from 1.15 percent to 1.35  percent. The

surcharges amount to 4.5 basis points of a large institution’s assessment base (after making

certain adjustments).

Each institution is assigned a risk-based rate for a quarterly 

assessment period near the end of the quarter following the 

assessment period. Payment is generally due on the 30th day of 

the last month of the quarter following the assessment period. 

Supervisory rating changes are effective for assessment purposes as 

of the examination transmittal date. 

Assets securitized and sold – total outstanding principal balance 

of assets securitized and sold with servicing retained or other 

seller-provided credit enhancements. 

Capital Purchase Program (CPP) – as announced in October 

2008 under the TARP, the Treasury Department purchase of 

noncumulative perpetual preferred stock and related warrants that 

is treated as Tier 1 capital for regulatory capital purposes is included 

in “Total equity capital.” Such warrants to purchase common 

stock or noncumulative preferred stock issued by publicly-traded 

banks are reflected as well in “Surplus.” Warrants to purchase 

common stock or noncumulative preferred stock of not-publiclytraded bank stock are classified in a bank’s balance sheet as “Other 

liabilities.” 

Common equity Tier 1 capital ratio – ratio of common equity 

Tier 1 capital to risk-weighted assets. Common equity Tier 1 capital 

includes common stock instruments and related surplus, retained 

earnings, accumulated other comprehensive income (AOCI), and 

limited amounts of common equity Tier 1 minority interest, minus 

applicable regulatory adjustments and deductions. Items that are 

fully deducted from common equity Tier 1 capital include goodwill, 

other intangible assets (excluding mortgage servicing assets) 

and certain deferred tax assets; items that are subject to limits in 

common equity Tier 1 capital include mortgage servicing assets, 

eligible deferred tax assets, and certain significant investments. 

Beginning March 2020, this ratio does not include institutions that 

have a Community Bank Leverage Ratio election in effect at the 

report date. 

Construction and development loans – includes loans for 

all property types under construction, as well as loans for land 

acquisition and development. 

Core capital – common equity capital plus noncumulative 

perpetual preferred stock plus minority interest in consolidated 

subsidiaries, less goodwill and other ineligible intangible assets. 

The amount of eligible intangibles (including servicing rights) 

included in core capital is limited in accordance with supervisory 

capital regulations. 

Cost of funding earning assets – total interest expense paid on 

deposits and other borrowed money as a percentage of average 

earning assets. 

Credit enhancements – techniques whereby a company attempts 

to reduce the credit risk of its obligations. Credit enhancement may 

be provided by a third party (external credit enhancement) or by the 

originator (internal credit enhancement), and more than one type 

of enhancement may be associated with a given issuance. 

Deposit Insurance Fund (DIF) – the Bank (BIF) and Savings 

Association (SAIF) Insurance Funds were merged in 2006 by the 

Federal Deposit Insurance Reform Act to form the DIF. 

Derivatives notional amount – the notional, or contractual, 

amounts of derivatives represent the level of involvement in the 

types of derivatives transactions and are not a quantification of 

market risk or credit risk. Notional amounts represent the amounts 

used to calculate contractual cash flows to be exchanged. 

Derivatives credit equivalent amount – the fair value of the 

derivative plus an additional amount for potential future credit 

exposure based on the notional amount, the remaining maturity 

and type of the contract. 

Derivatives transaction types: 

Futures and forward contracts – contracts in which the buyer 

agrees to purchase and the seller agrees to sell, at a specified 

future date, a specific quantity of an underlying variable or index 

at a specified price or yield. These contracts exist for a variety of 

variables or indices, (traditional agricultural or physical 

commodities, as well as currencies and interest rates). Futures 

contracts are standardized and are traded on organized 

exchanges which set limits on counterparty credit exposure. 

Forward contracts do not have standardized terms and are 

traded over the counter. 

Option contracts – contracts in which the buyer acquires the 

right to buy from or sell to another party some specified amount 

of an underlying variable or index at a stated price (strike price) 

during a period or on a specified future date, in return for 

compensation (such as a fee or premium). The seller is obligated 

to purchase or sell the variable or index at the discretion of the 

buyer of the contract. 

Swaps – obligations between two parties to exchange a series 

of cash flows at periodic intervals (settlement dates), for a 

specified period. The cash flows of a swap are either fixed, or 

determined for each settlement date by multiplying the quantity 

28 FDIC QUARTERLY 
QUARTERLY BANKING PROFILE 

 

(notional principal) of the underlying variable or index by 

specified reference rates or prices. Except for currency swaps, 

the notional principal is used to calculate each payment but is 

not exchanged. 

Derivatives underlying risk exposure – the potential exposure 

characterized by the level of banks’ concentration in particular 

underlying instruments, in general. Exposure can result from 

market risk, credit risk, and operational risk, as well as, interest 

rate risk. 

Domestic deposits to total assets – total domestic office deposits 

as a percent of total assets on a consolidated basis. 

Earning assets – all loans and other investments that earn interest 

or dividend income. 

Efficiency ratio – Noninterest expense less amortization 

of intangible assets as a percent of net interest income plus 

noninterest income. This ratio measures the proportion of net 

operating revenues that are absorbed by overhead expenses, so that 

a lower value indicates greater efficiency. 

Estimated insured deposits – in general, insured deposits are 

total domestic deposits minus estimated uninsured deposits. 

Beginning March 31, 2008, for institutions that file Call Reports, 

insured deposits are total assessable deposits minus estimated 

uninsured deposits. Beginning September 30, 2009, insured 

deposits include deposits in accounts of $100,000 to $250,000 

that are covered by a temporary increase in the FDIC’s standard 

maximum deposit insurance amount (SMDIA). The Dodd-Frank 

Wall Street Reform and Consumer Protection Act enacted on July 21, 

2010, made permanent the standard maximum deposit insurance 

amount (SMDIA) of $250,000. Also, the Dodd-Frank Act amended 

the Federal Deposit Insurance Act to include noninterest-bearing 

transaction accounts as a new temporary deposit insurance 

account category. All funds held in noninterest-bearing transaction 

accounts were fully insured, without limit, from December 31, 2010, 

through December 31, 2012. 

Failed/assisted institutions – an institution fails when regulators 

take control of the institution, placing the assets and liabilities 

into a bridge bank, conservatorship, receivership, or another 

healthy institution. This action may require the FDIC to provide 

funds to cover losses. An institution is defined as “assisted” when 

the institution remains open and receives assistance in order to 

continue operating. 

Fair Value – the valuation of various assets and liabilities on the 

balance sheet—including trading assets and liabilities, availablefor-sale securities, loans held for sale, assets and liabilities 

accounted for under the fair value option, and foreclosed assets— 

involves the use of fair values. During periods of market stress, the 

fair values of some financial instruments and nonfinancial assets 

may decline. 

FHLB advances – all borrowings by FDIC-insured institutions 

from the Federal Home Loan Bank System (FHLB), as reported by 

Call Report filers, and by TFR filers prior to March 31, 2012. 

Goodwill and other intangibles – intangible assets include 

servicing rights, purchased credit card relationships, and other 

identifiable intangible assets. Goodwill is the excess of the purchase 

price over the fair market value of the net assets acquired, less 

subsequent impairment adjustments. Other intangible assets are 

recorded at fair value, less subsequent quarterly amortization and 

impairment adjustments. 

Loans secured by real estate – includes home equity loans, junior 

liens secured by 1-4 family residential properties, and all other 

loans secured by real estate. 

Loans to individuals – includes outstanding credit card balances 

and other secured and unsecured consumer loans. 

Long-term assets (5+ years) – loans and debt securities with 

remaining maturities or repricing intervals of over five years. 

Maximum credit exposure – the maximum contractual credit 

exposure remaining under recourse arrangements and other sellerprovided credit enhancements provided by the reporting bank to 

securitizations. 

Mortgage-backed securities – certificates of participation in pools 

of residential mortgages and collateralized mortgage obligations 

issued or guaranteed by government-sponsored or private enterprises. Also, see “Securities,” below. 

Net charge-offs – total loans and leases charged off (removed from 

balance sheet because of uncollectability), less amounts recovered 

on loans and leases previously charged off. 

Net interest margin – the difference between interest and 

dividends earned on interest-bearing assets and interest paid to 

depositors and other creditors, expressed as a percentage of average 

earning assets. No adjustments are made for interest income that is 

tax exempt. 

Net loans to total assets – loans and lease financing receivables, 

net of unearned income, allowance and reserves, as a percent of 

total assets on a consolidated basis. 

Net operating income – income excluding discretionary 

transactions such as gains (or losses) on the sale of investment 

securities and extraordinary items. Income taxes subtracted 

from operating income have been adjusted to exclude the portion 

applicable to securities gains (or losses). 

Noncurrent assets – the sum of loans, leases, debt securities, and 

other assets that are 90 days or more past due, or in nonaccrual 

status. 

Noncurrent loans & leases – the sum of loans and leases 90 days 

or more past due, and loans and leases in nonaccrual status. 

Number of institutions reporting – the number of institutions 

that actually filed a financial report. 

New reporters – insured institutions filing quarterly financial 

reports for the first time. 

Other borrowed funds – federal funds purchased, securities 

sold with agreements to repurchase, demand notes issued to the 

U.S. Treasury, FHLB advances, other borrowed money, mortgage 

indebtedness, obligations under capitalized leases and trading 

liabilities, less revaluation losses on assets held in trading accounts. 

Other real estate owned – primarily foreclosed property. Direct 

and indirect investments in real estate ventures are excluded. The 

amount is reflected net of valuation allowances. For institutions 

that filed a Thrift Financial Report (TFR), the valuation allowance 

subtracted also includes allowances for other repossessed assets. 

Also, for TFR filers the components of other real estate owned are 

reported gross of valuation allowances. (TFR filers began filing Call 

Reports effective with the quarter ending March 31, 2012.) 

Percent of institutions with earnings gains – the percent of 

institutions that increased their net income (or decreased their 

losses) compared to the same period a year earlier. 

FDIC QUARTERLY 29 
2021 • Volume           15  • Number 4

 

“Problem” institutions – federal regulators assign a composite 

rating to each financial institution, based upon an evaluation of 

financial and operational criteria. The rating is based on a scale 

of 1 to 5 in ascending order of supervisory concern. “Problem” 

institutions are those institutions with financial, operational, or 

managerial weaknesses that threaten their continued financial 

viability. Depending upon the degree of risk and supervisory 

concern, they are rated either a “4” or “5.” The number and assets 

of “problem” institutions are based on FDIC composite ratings. 

Prior to March 31, 2008, for institutions whose primary federal 

regulator was the OTS, the OTS composite rating was used. 

Recourse – an arrangement in which a bank retains, in form or in 

substance, any credit risk directly or indirectly associated with an 

asset it has sold (in accordance with generally accepted accounting 

principles) that exceeds a pro rata share of the bank’s claim on 

the asset. If a bank has no claim on an asset it has sold, then the 

retention of any credit risk is recourse. 

Reserves for losses – the allowance for loan and lease losses on a 

consolidated basis. 

Restructured loans and leases – loan and lease financing 

receivables with terms restructured from the original contract. 

Excludes restructured loans and leases that are not in compliance 

with the modified terms. 

Retained earnings – net income less cash dividends on common 

and preferred stock for the reporting period. 

Return on assets – bank net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total 

(consolidated) assets. The basic yardstick of bank profitability. 

Return on equity – bank net income (including gains or losses on 

securities and extraordinary items) as a percentage of average total 

equity capital. 

Risk-weighted assets – assets adjusted for risk-based capital 

definitions which include on-balance-sheet as well as off-balancesheet items multiplied by risk-weights that range from zero to 

200 percent. A conversion factor is used to assign a balance sheet 

equivalent amount for selected off-balance-sheet accounts. 

Securities – excludes securities held in trading accounts. Banks’ 

securities portfolios consist of securities designated as “held-tomaturity” (reported at amortized cost (book value)), securities 

designated as “available-for-sale” (reported at fair (market) 

value), and equity securities with readily determinable fair values 

not held for trading. 

Securities gains (losses) – realized gains (losses) on held-tomaturity and available-for-sale securities, before adjustments for 

income taxes. Thrift Financial Report (TFR) filers also include gains 

(losses) on the sales of assets held for sale. (TFR filers began filing 

Call Reports effective with the quarter ending March 31, 2012.) 

Seller’s interest in institution’s own securitizations – the 

reporting bank’s ownership interest in loans and other assets that 

have been securitized, except an interest that is a form of recourse 

or other seller-provided credit enhancement. Seller’s interests 

differ from the securities issued to investors by the securitization 

structure. The principal amount of a seller’s interest is generally 

equal to the total principal amount of the pool of assets included 

in the securitization structure less the principal amount of those 

assets attributable to investors, i.e., in the form of securities issued 

to investors. 

Small Business Lending Fund – The Small Business Lending 

Fund (SBLF) was enacted into law in September 2010 as part 

of the Small Business Jobs Act of 2010 to encourage lending to 

small businesses by providing capital to qualified community 

institutions with assets of less than $10 billion. The SBLF Program 

is administered by the U.S. Treasury Department (https:// 

home.treasury.gov/policy-issues/small-business-programs/ 

small-business-lending-fund). 

Under the SBLF Program, the Treasury Department purchased 

noncumulative perpetual preferred stock from qualifying 

depository institutions and holding companies (other than 

Subchapter S and mutual institutions). When this stock has been 

issued by a depository institution, it is reported as “Perpetual 

preferred stock and related surplus.” For regulatory capital 

purposes, this noncumulative perpetual preferred stock qualifies as 

a component of Tier 1 capital. Qualifying Subchapter S corporations 

and mutual institutions issue unsecured subordinated debentures to 

the Treasury Department through the SBLF. Depository institutions 

that issued these debentures report them as “Subordinated notes 

and debentures.” For regulatory capital purposes, the debentures 

are eligible for inclusion in an institution’s Tier 2 capital in 

accordance with their primary federal regulator’s capital standards. 

To participate in the SBLF Program, an institution with outstanding 

securities issued to the Treasury Department under the Capital 

Purchase Program (CPP) was required to refinance or repay in full 

the CPP securities at the time of the SBLF funding. Any outstanding 

warrants that an institution issued to the Treasury Department 

under the CPP remain outstanding after the refinancing of the CPP 

stock through the SBLF Program unless the institution chooses to 

repurchase them. 

Subchapter S corporation – a Subchapter S corporation is treated 

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

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

income taxes at the corporate level. This can have the effect of 

reducing institutions’ reported taxes and increasing their after-tax 

earnings. 

Trust assets – market value, or other reasonably available value of 

fiduciary and related assets, to include marketable securities, and 

other financial and physical assets. Common physical assets held 

in fiduciary accounts include real estate, equipment, collectibles, 

and household goods. Such fiduciary assets are not included in the 

assets of the financial institution. 

Unearned income and contra accounts – unearned income for 

Call Report filers only. 

Unused loan commitments – includes credit card lines, home 

equity lines, commitments to make loans for construction, loans 

secured by commercial real estate, and unused commitments to 

originate or purchase loans. (Excluded are commitments after 

June 2003 for originated mortgage loans held for sale, which are 

accounted for as derivatives on the balance sheet.) 

Yield on earning assets – total interest, dividend, and fee income 

earned on loans and investments as a percentage of average 

earning assets. 

30 FDIC QUARTERLY 
COMMERCIAL REAL ESTATE: RESILIENCE, RECOVERY, AND RISKS AHEAD 

Overview Commercial real estate (CRE) lending is important to the banking industry.1 FDIC-insured 

institutions collectively hold $2.7 trillion in CRE loans, more than 50 percent of the broader 

financial industry’s CRE loans. FDIC-insured institutions’ CRE loan portfolios have 

experienced the ups and downs of economic cycles, including significant credit quality 

stress during the Great Recession and challenges posed by the COVID-19 pandemic. 

The pandemic initially strained several types of CRE properties. Hotels sat empty as 

travel came to a near standstill. Foot traffic at retail properties all but ceased. Many office 

employees transitioned to remote work, and office occupancy dropped significantly. In 

contrast, the multifamily sector largely held up, as the degree to which tenants paid rent on 

time declined only slightly as the pandemic took hold. More positively, as delivery of goods 

from online shopping increased, industrial property demand strengthened. 

While CRE market conditions improved with economic recovery in 2021, some parts of 

the CRE industry may experience lasting changes. The retail sector already had been 

facing long-term growth in online shopping, suggesting less need for brick-and-mortar 

retail, and the pandemic hastened this trend. In the office sector, the pandemic spurred 

businesses to re-evaluate use of office space as they explored remote work capabilities. 

Reflecting this dynamic, forecasts suggest office vacancy rates will rise and rent growth 

will be weak in 2022. Meanwhile businesses’ use of technology to manage properties, or 

PropTech, is expected to increasingly become part of the office landscape. 

The issues facing CRE after the pandemic will be important considerations for a large share 

of the banking industry. Almost all FDIC-insured institutions are involved in CRE lending 

and many have large CRE loan portfolios. Banks have increased CRE loan exposure over the 

past decade, and while construction lending has grown only modestly, many banks have 

increased multifamily lending. The pandemic initially looked like it would significantly 

challenge banks’ CRE loan quality, but loan delinquency rates remained low through 

third quarter 2021 against the backdrop of economic rebound, stimulus support, and 

loan forbearance. 

This paper is organized into two sections. The first section analyzes the five major CRE 

property types—multifamily, industrial, lodging, retail, and office—and the conditions 

evident in each since the onset of the pandemic. We identify those property types that 

have emerged in relatively good shape (multifamily and industrial), those that are still 

challenged in one or more subcategories (lodging and retail), and the one whose future 

may be most uncertain (office). In the second section, we discuss FDIC-insured institution 

exposure to CRE loans, credit quality, and potential challenges ahead. 

I. CRE Market 

Conditions 

The Multifamily and Industrial Property Sectors Have Weathered the Pandemic 

Relatively Well 

Despite initial concerns about the prognosis for CRE, the multifamily and industrial sectors 

have recovered from the initial shock of the pandemic. By some measures, these sectors 

have exceeded pre-pandemic performance. 

Multifamily 

Heading into the pandemic, the multifamily sector’s balance of supply and demand was 

healthy, despite a large amount of new construction in recent years. In the six years 

leading up to the pandemic, the multifamily construction industry built a record amount of 

properties. From 2014 to 2019, almost 2 million multifamily units were built in the United 

States, more than double that of 2008 to 2013.2 The number of units built, referred to as 

completions, also was high when measured against the size of the existing U.S. multifamily 

1 The term “banking industry” refers to FDIC-insured institutions. 

2 CoStar, third quarter 2021 data. 

FDIC QUARTERLY 31 
2021 • Volume           15  • Number 4

market; the number of completions averaged 0.51 percent of total stock from 2014 to 2019, 

compared with only 0.25 percent in the previous six years. High levels of construction can 

lead to a rise in vacancy rates, but increased demand for multifamily-type living in the 

mid-2010s absorbed the large amount of construction. As a result, the U.S. multifamily 

vacancy rate was low and flat—it hovered near 6 percent from 2014 to 2019 (Chart 1). 

Chart 1 

Strong Demand Kept Multifamily Vacancy Rates Low for Much of the Past Decade 

Source: CoStar. 

Note: Data are quarterly figures with forecast data as of third quarter 2021. 

Share of Existing Stock 

Percent 

Vacancy Rate 

Percent 

0.0 

0.2 

0.4 

0.6 

0.8 

1.0 

1.2 

1.4 

3Q07 1Q09 3Q10 1Q12 3Q13 1Q15 3Q16 1Q18 3Q19 1Q21 3Q22 

0 

1 

2 

3 

4 

5 

6 

7 

8 

Forecast 

Absorption/Stock (Percent, Le ̃ Axis) 

Completions/Stock (Percent, Le ̃ Axis) 

Vacancy Rate (Percent, Right Axis) 

When the pandemic hit, some stress emerged in the multifamily sector, but little stress 

has lasted. The multifamily vacancy rate increased slightly early in the pandemic but 

since has declined to 4.5 percent as of third quarter 2021, the lowest rate in more than 

20 years. Demand for multifamily rental units improved significantly in 2021—the ratio 

of absorption of multifamily units to the amount of total stock has almost tripled from 

the pandemic low in 2020. Rent growth dropped from 2.4 percent in fourth quarter 2019 

to 0.2 percent in third quarter 2020, its low during the pandemic. But by third quarter 

2021, multifamily property rent growth had surpassed its average pre-pandemic level and 

was the highest among the major property types. Finally, renters’ payment performance 

weakened only modestly during the pandemic, despite labor market weakness. According 

to the Multifamily Housing Council, the share of rent payments due that were ultimately 

paid in a given month slipped only 1 percentage point nationally to 95 percent on average 

between March 2020 and September 2021.3 

The multifamily sector’s resilience likely reflects several factors. First, the health risk of 

living in close quarters may have driven people who shared houses and apartments to seek 

independent living. Second, prices of single-family homes have risen dramatically in 2021, 

which may have led home seekers to rent instead of buy a home. Finally, stimulus payments 

and aid for renters may have mitigated weakening in rental payment performance; several 

studies found that about 30 percent of renters reported reliance on government support to 

pay rent at some point during the pandemic.4 

While the multifamily property sector has been resilient, pressure may be ahead for part of 

the sector. Some properties’ cash flows could be strained by delayed rent payments as relief 

programs and forbearance efforts wane. And, as the pace of construction is expected to 

remain brisk, demand will need to be strong to keep vacancy rates stable. 

3 National Multifamily Housing Council Rent Payment Tracker, October 2021. 

4 Whitney Airgood-Obrycki, Ben Demers, Solomon Greene, Chris Herbert, Alexander Hermann, David Luberoff, and 

Sophia Wedeen, “Renters’ Responses to Financial Stress During the Pandemic,” Joint Center for Housing Studies of 

Harvard University, April 2021, https://www.jchs.harvard.edu/sites/default/files/research/files/harvard_jchs_renter_ 

responses_covid_airgood-obrycki_etal_2021.pdf. 

32 FDIC QUARTERLY 
CO M M E R C I A L R E A L E STAT E : R E S I L I E N C E , R E COV E RY, A N D R I S KS A H E A D 

Industrial 

Demand for industrial space increased significantly during the pandemic. In the almost 

two years from first quarter 2020 through third quarter 2021, 582 million square feet 

of industrial space was rented (absorbed). This amount is well above the 366 million 

square feet rented in the almost two years leading up to the pandemic. As a percentage of 

the total amount of industrial space in the United States, the amount of space absorbed 

increased from 0.2 percent in first quarter 2020 to 0.9 percent in third quarter 2021, 

the highest percentage on record.5 The rise in demand reflected, in part, an increase in 

e-commerce since the start of the pandemic. E-commerce sales grew by $68 billion from 

the start of the pandemic in first quarter 2020 through second quarter 2021. This growth 

is equal to the increase in e-commerce sales in the four and a half years leading up to the 

pandemic (Chart 2).6 

Chart 2 

Demand for Industrial Properties Increased Amid a Rise in E-Commerce Sales 

Sources: U.S. Census Bureau (Federal Reserve Bank of St. Louis), CoStar. 

Note: E-commerce retail sales are seasonally adjusted quarterly figures through second quarter 2021. Net absorption are quarterly figures through 

third quarter 2021. 

E-Commerce Retail Sales 

$ Billions 

Net Absorption as a Share of Inventory 

Percent 

0 

25 

50 

75 

100 

125 

150 

175 

200 

225 

250 

275 

3Q11 3Q13 3Q15 3Q17 3Q19 3Q21 

0.0 

0.1 

0.2 

0.3 

0.4 

0.5 

0.6 

0.7 

0.8 

0.9 

1.0 

4.5 Years 

+$69 Billion 

1.25 Years 

+$68 Billion 

E-Commerce Retail Sales (Le ̃ Axis) 

Net Absorption (Right Axis) 

This increase in e-commerce boosted demand for industrial space because e-commerce 

is logistics-intensive and requires warehouse space at transportation hubs and close to 

“last-mile” population centers.7 Users of industrial space include not just e-commerce 

providers but also manufacturers, brick-and-mortar retailers, and third-party logistics 

firms. Tenants nationwide have leased a record amount of industrial space to meet 

customer demand. Amazon remains the most active tenant, both in the number of leases 

and in total space, but third-party logistics firms like DHL and FedEx have been active 

as well. Traditional food and beverage manufacturers and retailers round out the broad 

sample of industrial tenants that contributed to the record leasing pace in early 2021.8 

The rise in e-commerce and increased need for industrial space helped absorb a large 

amount of construction that has occurred in the industrial sector for much of the past 

decade. Prompted by increased demand shortly after the Great Recession, construction of 

industrial properties has been rising since 2014. From first quarter 2014 to first quarter 

2020, deliveries of new industrial space as a share of total space increased more than 

fivefold. Demand has been strong in 2021, but the large amount of industrial property 

supply in recent years bears watching. 

5 Data available from first quarter 2001. 

6 U.S. Census Bureau (Federal Reserve Bank of St. Louis). 

7 Transportation management firm Cerasis defines last-mile logistics as the final step of the delivery process from a 

distribution center or facility to the end user. 

8 CoStar, Industrial National Report, July 1, 2021. 

FDIC QUARTERLY 33 
2021 • Volume           15  • Number 4

Lodging and Retail Sectors Have Improved, but Some Subsectors Still Face Headwinds 

The pandemic immediately and severely affected the lodging and retail sectors. Hotel visits 

dropped as travel all but ceased. Retail stores were empty as shoppers stayed home. These 

two sectors have since recovered but continue to face headwinds in important subsectors. 

Lodging

The lodging sector was among the most severely affected sectors early in the pandemic. The 

U.S. hotel occupancy rate dropped sharply from more than 60 percent pre-pandemic to less 

than 25 percent in April 2020.9 In luxury hotels, the occupancy rate dropped to single digits. 

The severe decline in hotel occupancy sharply reduced hotel revenues. Hotel revenues fell 

by 80 percent in April 2020 compared with the previous year. As travel began to increase in 

late 2020, overall occupancy rates rebounded from 2020 lows and returned to pre-pandemic 

levels by mid-2021. Hotel revenues have partially recovered, but through third quarter 2021 

have yet to stabilize at pre-pandemic levels. 

Differentiation in the lodging sector is driving performance. The luxury hotel sector was 

hit hardest, and while it has largely recovered, occupancy remains below its pre-pandemic 

level (Chart 3).10 The luxury hotel sector continues to suffer from the slower return of 

corporate travel. According to CoStar, mid-week occupancy, a measure of corporate travel 

activity, was low as of mid-2021 at approximately 50 percent.11 The resumption of corporate 

travel to pre-pandemic levels is uncertain, as companies reevaluate their travel needs in 

the context of widely available teleconferencing technology. 

Chart 3 

A°er Falling Early in the Pandemic, U.S. Hotel Occupancy Nears Pre-Pandemic Levels, 

While Luxury Occupancy Lags 

Occupancy Index National Luxury 

September 2019 = 100 National Economy 

National All 140 

Source: CoStar. 

Note: Data are monthly figures. 

0 

20 

40 

60 

80 

100 

120 

Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 

In contrast, the economy hotel sector recovered more quickly, which reflected the return 

of leisure travel. Increased vaccinations and pent-up savings and vacation time supported 

a rise in leisure travel demand. The weekend occupancy rate, which reflects leisure travel, 

rebounded by mid-2021 to consistently above 70 percent.12 

While leisure travel is important, accounting for the largest share of the hotel industry’s 

room nights, group and corporate travel account for roughly two-thirds of hotel revenues.13 

Therefore, the return of corporate travel is important for a more complete recovery of the 

lodging sector. 

9 CoStar. 

10 Ibid. 

11 CoStar, Hospitality National Report, July 2, 2021. 

12 Ibid. 

13 Bank of America, Lodging Primer, September 11, 2018. 

34 FDIC QUARTERLY 
CO M M E R C I A L R E A L E STAT E : R E S I L I E N C E , R E COV E RY, A N D R I S KS A H E A D 

Retail 

Trends in the retail segment reflect changes under way in the sector before the pandemic. 

The sector had already been struggling with elevated store closures and competition from 

online shopping. 

The retail sector comprises several subtypes such as malls, strip centers, and general 

retail.14 Mall space has suffered the quickest rise in vacancy since the onset of the 

pandemic. Many mall anchor tenants, such as traditional department stores, were 

struggling before the pandemic, and the complete closure of malls for several months dealt 

a blow to struggling inline stores as well.15 Elimination of all foot traffic at the nation’s 

malls contributed to a doubling of the vacancy rate from a near cycle low of 3.8 percent 

in third quarter 2017 to 7.2 percent in third quarter 2021 (Chart 4). Much of that increase 

occurred since the onset of the pandemic. 

Chart 4 

Vacancy at U.S. Malls Increased More Than Other Types of Retail 

Retail Vacancy 

Percent 

8 

3Q17 3Q19 3Q21 

General 

Source: CoStar. 

Note: Data are quarterly figures. 

Strip Center Power Center Mall Neighborhood 

Center 

0 

1 

2 

3 

4 

5 

6 

7 

Rising vacancy in some malls may indicate the degree to which property valuations may 

contract. Between February 2020 and September 2021, mall property valuations dropped 

18 percent.16 And a recent report showed that at least 49 U.S. malls have re-appraised at 

values 65 percent lower than pre-pandemic levels.17 Landlords are experimenting with 

new uses for unproductive mall space, including various forms of experiential retail such 

as fitness centers, movie theaters, and climbing gyms. More dramatic transformations 

include medical office, education, industrial, and even multifamily use. Despite the rapid 

increase in vacancy, malls were not the most-vacant retail subtype as of third quarter 2021. 

Another common suburban and rural retail subtype known as a “neighborhood center” 

ended third quarter 2021 with an average vacancy rate of 7.4 percent, the highest among 

subtypes.18 Neighborhood centers typically are anchored by a grocery store and have 

several smaller stores. While grocery stores held up relatively well through the pandemic, 

smaller ancillary stores were hard-hit by competition from e-commerce and the sharp 

14 According to CoStar, there are five major subtypes of retail properties: general, strip center, power center, mall, and 

neighborhood center. 

15 Commercial real estate consulting company VTS describes inline stores as what most people would consider smaller 

stores that fill in the space between the larger stores in malls and open-air centers. These stores compensate for the 

discounted rents provided to anchors and typically pay more per square foot. Inline stores range between 1,500 and 

5,000 square feet. 

16 Green Street Advisors Commercial Property Price Index. 

17 Bank of America Securities, “CMBS Commentary: Appraising the Situation,” November 1, 2021. 

18 Neighborhood centers have 30,000 to 100,000 square feet of space and are typically anchored by grocery stores. 

Inline stores surrounding the grocer may include apparel, sporting goods, electronics, and other personal goods and 

service stores. 

FDIC QUARTERLY 35 
2021 • Volume           15  • Number 4

drop in foot traffic as the pandemic took hold. Taken together, malls and neighborhood 

centers account for a third of all retail space. 

General retail, which typically includes freestanding and independent, nonchain retailers, 

accounts for the largest amount of retail space in the United States. It also is the fastest 

growing retail subtype; most of the retail space added in the United States over the past five 

years has been general retail. Despite adding more space than other types of retail, demand 

for general retail has kept pace with supply. As a result, the general retail vacancy rate has 

been approximately 3 percent for the past five years, less than all other types of retail space. 

Since the U.S. economy is consumption-centered, retail will continue to occupy an 

important place in the CRE industry. Different types of retail will continue to adjust to 

evolving consumer preferences, and vacancy rates, demand, and rent growth likely will 

reflect those preferences. 

The Office Sector May Face the Most Significant Challenges 

The pandemic has reduced demand for office space, possibly for the long run. Net office 

absorption in second quarter 2020 was negative for the first time in a decade; this 

means that the amount of commercial office space that was vacated or supplied by new 

construction exceeded that which was leased, or absorbed, by commercial tenants. At its 

worst during the pandemic, negative net absorption reached 0.5 percent of total inventory, 

twice the worst percentage recorded during the Great Recession.19 The drop in demand 

for office space as the pandemic emerged contributed to a significant increase in office 

vacancy. The office vacancy rate increased in almost two-thirds of U.S. office markets, and 

in each of the nation’s ten largest markets, since the start of the pandemic. As a result, the 

U.S. office vacancy rate increased from 9.7 percent in fourth quarter 2019 to 12.3 percent in 

third quarter 2021, an eight-year high (Chart 5). 

Chart 5 

Demand for Oice Space Dropped Significantly at the Onset of the COVID-19 Pandemic 

Source: CoStar. 

Note: Data are quarterly figures through third quarter 2023 with forecasted data as of third quarter 2021. 

Share of Existing Stock 

Percent 

Vacancy Rate 

Percent 

Forecast 

Absorption/Stock (Percent, Le ̃ Axis) 

Completions/Stock (Percent, Le ̃ Axis) 

Vacancy Rate (Percent, Right Axis) 

-1.0 

-0.8 

-0.5 

-0.3 

0.0 

0.3 

0.5 

0.8 

1.0 

3Q01 3Q05 3Q09 3Q13 3Q17 3Q21 

0 

2 

4 

6 

8 

10 

12 

14 

Large Office Markets

The nation’s large office markets have suffered more than smaller markets since the 

pandemic began. The average vacancy rate in the nation’s gateway markets (large, typically 

coastal markets that attract significant foreign investment) increased from 9.4 percent in 

fourth quarter 2019 to 13.0 percent in third quarter 2021.20 In contrast, the average vacancy 

19 CoStar, third quarter 2021 data. 

20 CoStar. FDIC calculations of vacancy rates for gateway and non-gateway markets are simple averages and will not tie to

the aggregate national vacancy rates cited above. 

36 FDIC QUARTERLY 
CO M M E R C I A L R E A L E STAT E : R E S I L I E N C E , R E COV E RY, A N D R I S KS A H E A D 

rate in the rest of U.S. markets increased only modestly from 5.6 percent to 6.3 percent over 

the same period. 

Gateway office markets also suffered an outsized decline in rental rates. Rent growth 

in the nation’s gateway markets had exceeded or at least equaled the U.S. average in the 

two years leading up to the pandemic. But as the pandemic took hold in 2020, office rent 

growth decelerated across the nation, and rents dropped in the gateway markets, reflecting 

avoidance of densely populated cities (Chart 6). Rent growth is expected to be low across 

U.S. markets and remain negative in gateway markets into 2022. 

Chart 6 

Rents in Gateway Oice Markets Dropped More Than Others in the COVID-19 Pandemic 

Year-Over-Year Change in Rent 

Percent 

Gateway Markets 

Non-Gateway Markets 

-5 

-4 

-3 

-2 

-1 

0 

1 

2 

3 

4 

5 

3Q18 3Q19 3Q20 3Q21 3Q22 

Forecast 

Source: CoStar. 

Note: Data are quarterly figures with forecast data as of third quarter 2021. Gateway markets include New York, Washington, DC, Boston, 

Chicago, Los Angeles, and San Francisco. 

The drop in demand also has led to an increase in sublease availability across many 

markets. Sublease availability occurs when tenants offer excess space for lease to a third 

party, typically at a discount. During the pandemic, space available through sublease 

increased, especially in large, densely populated markets such as San Francisco (Chart 7). 

Offering space for sublease became more common as the pandemic progressed into early 

2021, reflecting in part tenants’ uncertainty about returning to the office. The amount 

of space offered for sublease began to ease in second quarter 2021 but remains above 

pre-pandemic levels in some cities, which suggests vacancy issues in some office markets 

will continue. 

Chart 7 

The Amount of Oice Space Available for Sublease in Several Large Cities

Increased as the COVID-19 Pandemic Took Hold 

Source: CoStar. 

Note: Data are quarterly figures. 

Share of O ̃ice Space Available for Sublease 

Percent 

0 

1 

2 

3 

4 

5 

6 

7 

3Q17 3Q18 3Q19 3Q20 3Q21 

San Francisco, CA San Jose, CA 

New York, NY Seattle, WA 

Boston, MA Washington, DC 

Los Angeles, CA Chicago, IL 

FDIC QUARTERLY 37 
2021 • Volume           15  • Number 4

Remote Work, Return-to-Office, and Changing Office Layouts

Many companies re-evaluated their office space needs and expanded remote work during 

the pandemic. Office usage dropped significantly, and the number of employees that 

regularly occupied office buildings declined. According to one company that monitors 

office building access in several large markets, less than 15 percent of the workforce 

was going into the office in April 2020, with some markets dropping below 5 percent.21 

Foot traffic in office buildings has since improved with more than one-third of workers 

returning to offices as of October 2021, but uncertainty around new variants of the virus 

has many companies delaying their return-to-office plans to 2022.22 

Several surveys and reports reveal that a large share of companies have or plan to adopt a 

hybrid return-to-office model—a mix of office and remote work—rather than a full return 

to the office. According to PwC, more than two-thirds of company executives surveyed 

plan to implement a hybrid model.23 As companies execute new work plans, an increase in 

remote work may eventually translate into less demand for office space. 

Companies also are planning to change how they use office space. Some companies are 

redesigning space to account for fewer employees working in the office each day. Changes 

include more shared workstations, fewer permanent desks and offices, and more flexible 

space. This redesign could further dampen demand for office space, but could be partially 

offset by the need to implement social distancing among workers. Additionally, increased 

interest in flexible space also could boost demand for space provided by co-working 

companies, which struggled at the onset of the pandemic.24 

Flexibility and changes in the sector also include how various forms of PropTech will be 

implemented in CRE. PropTech is a term used to define technologically innovative products 

and business models for the CRE market (Inset Box). 

What Is PropTech? 

PropTech, short for property technology, is a term used to define technologically innovative products and business models for the CRE

market, similar to the way FinTech describes the use of technology in finance. PropTech is the use of digital innovation to address the needs

of the property industry. Below are a few examples of PropTech.

Technology Description 

“Smart” Buildings Equipping buildings with internet-enabled technology and sensors that can connect and exchange data

with each other via an internet connection. Internet-enabled devices can gather maintenance data, power

usage statistics, and information about the movement of people in a building. The information can be

studied using building management software to improve building efficiency.

Increasing the number of potential buyers by providing virtual visualizations to tour available space. This

technology was implemented quickly by many brokers at the onset of the pandemic.

Power Efficiency Building and retrofitting buildings with upgrades that reduce energy use or change the types of energy

used in construction and operation. 

Construction Technology Improving the speed, environmental efficiency, cost savings, and safety of building construction through

modeling, planning, and automation.

Appraisal Completing appraisals faster using property valuation technology based on multiple data sources.

Virtual Experiences 

Note: PropTech examples are sourced from multiple analyst reports and articles. This is not an exhaustive list of technologies nor endorsement of specific products or technology.

21 Kastle Systems LLC, Back to Work Barometer, October 2021. 

22 Morgan Stanley Research, WFH Tracker, October 2021. 

23 PwC, US Pulse Survey, August 2021. The US Pulse Survey is conducted periodically to track the sentiments and priorities 

of business executives. PwC surveyed 752 U.S. company executives in August 2021 about company workforce location plans. 

24 Co-working companies sign long-term office leases and sublease that space at a premium over current market rates. 

Co-working tenants are attracted to the flexibility of short-term obligations and the ability to avoid costs to build out 

office space. Popular co-working companies include WeWork and Regus. 

38 FDIC QUARTERLY 
CO M M E R C I A L R E A L E STAT E : R E S I L I E N C E , R E COV E RY, A N D R I S KS A H E A D 

While there have been encouraging signs, such as an increase in office lease activity 

since mid-2021, hybrid return-to-office policies and reconfigured office space likely 

will contribute to changes in the office sector. Technological innovations helped make 

the transition to remote work possible, and the transition has landlords and tenants 

considering a new equilibrium level of demand for office space. Some degree of remote work 

likely will become a permanent part of the office culture. 

The Decline in CRE Property Values During the Pandemic Has Been Modest Compared 

With the Great Recession 

Economic stress hurt CRE values in the Great Recession and the pandemic, but price 

performance in each of the two recessions was different. A more modest drop in CRE 

prices in the pandemic compared with the Great Recession reflects the different natures 

of each crisis. The Great Recession followed a global crisis in financial intermediation and 

manifested in a boom and bust cycle in real estate conditions in much of the United States. 

The pandemic recession was caused by a global health crisis and manifested in economic 

shutdown and contraction, with more significant stress felt in some industries and CRE 

property types than in others. 

During the Great Recession, CRE prices dropped significantly. According to Green Street 

Advisors, prices for a compilation of all CRE property types, otherwise known as the 

all-property index, dropped 28 percent within one year of the start of the recession 

and 35 percent within two years.25 The ultimate fall in prices ranged from 31 percent in 

multifamily to 48 percent in lodging (Chart 8). The decline in CRE values accompanied 

significant financial market dislocation and credit quality stress in the banking industry, 

and took five years to recover. 

Chart 8 

Price Declines in the Great Recession Were Steep... ...But Were Less Dramatic During the COVID-19 Pandemic 

Source: Green Street Advisors. 

Note: Data are monthly figures through December 2012. 

Source: Green Street Advisors. 

Note: Data are monthly figures through September 2021. 

Indexed Price Change From the Onset of the Great Recession 

December 2007 = 100 

Indexed Price Change From the Onset of the Pandemic 

February 2020 = 100 

50 

75 

100 

125 

150 

Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 

50 

75 

100 

125 

150 

Feb-20 Jun-20 Oct-20 Feb-21 Jun-21 

All Property Multifamily 

Industrial O ̃ice 

Lodging Retail 

All Property Multifamily 

Industrial O ̃ice 

Lodging Retail 

In the pandemic, CRE prices initially dropped by approximately 10 percent. However, there 

was no second leg down and many prices were flat for several months as transactions 

declined sharply. CRE prices have since recovered with prices for some property types now 

well above pre-pandemic levels. Industrial and multifamily property prices, after falling 

during the pandemic, have rebounded, with industrial property prices 42 percent above the 

pre-pandemic level and multifamily posting an 18 percent increase. Property prices in the 

retail, office, and lodging sectors have recovered more modestly. Property prices are still 

6 percent below pre-pandemic levels in retail, 5 percent in office, and 4 percent in lodging. 

25 Green Street Commercial Property Price Index. 

FDIC QUARTERLY 39 
2021 • Volume           15  • Number 4

II. CRE Lending and

Credit Conditions

40 FDIC QUARTERLY 

CRE prices have recovered with improvement in COVID-19 cases, business re-openings, 

and economic recovery. Investors have begun to show willingness to pay higher prices for 

some of these properties as fundamentals are stronger than expected and borrowing costs 

are relatively low. Financial market dislocation and credit quality stress have been much 

more muted than in the Great Recession, but rapid price appreciation in some CRE property 

sectors warrants monitoring. 

Banks Remain a Leading Source of CRE Lending 

As important providers of CRE financing, FDIC-insured institutions are among those 

lenders interested in CRE market dynamics in the years ahead. Banks are the largest 

participant in the commercial mortgage lending market, holding more than half of the 

nearly $5 trillion in commercial mortgages outstanding as of second quarter 2021.26 

Entities such as insurance companies, government-sponsored enterprises (GSE), and other 

issuers of commercial mortgage-backed securities (CMBS) also are active in CRE financing. 

However, FDIC-insured institutions’ market share has remained significant at near 

50 percent for more than a decade (Chart 9). 

Chart 9 

Banks Hold More CRE Loans Than All Other Market Participants Combined and

Their Market Share Has Held Steady for More Than a Decade 

Source: Federal Reserve Board, Financial Accounts of the United States, Levels of Financial Assets and Liabilities, by Sector and by Financial 

Instrument, Multifamily Residential Mortgages and Commercial Mortgages, September 23, 2021 release. 

Note: Data are quarterly figures through second quarter 2021. 

Total CRE Mortgages Held 

$ Billions 

Share of CRE Mortgages 

Percent 

0 

600 

1,200 

1,800 

2,400 

3,000 

3,600 

4,200 

4,800 

5,400 

6,000 

2005 2007 2009 2011 2013 2015 2017 2019 2021 

0 

10 

20 

30 

40 

50 

60 

70 

80 

90 

100 

All Other Holders of CRE Mortgages 

Federal, State, and Local Government Holdings 

Issuers of Asset Backed Securities (Other Than Agency/GSE) 

Insurance Industry 

Agency and GSE Debt (Including Securitized Mortgage Pools) 

Banking Industry 

Banking Industry Share of CRE Mortgages (Percent, Right Axis) 

While the ten largest FDIC-insured institutions hold nearly one-quarter of the banking 

industry’s CRE loans, participation in CRE lending is widespread among banks. More than 

98 percent of FDIC-insured institutions hold CRE loans, and CRE is the largest loan category 

at more than 40 percent of insured institutions. 

CRE lending is particularly prevalent among community banks. As noted in the FDIC’s 

December 2020 Community Banking Study, community banks play an outsized role in CRE 

lending relative to their overall market share.27 As of third quarter 2021, community banks 

held less than 12 percent of the banking industry’s assets but accounted for 29 percent of 

CRE loans. 

Besides exposure through loans, the banking industry is exposed to CRE via holdings of 

CMBS. As of third quarter 2021, banks held more than $550 billion in CMBS, most of which 

was U.S. government agency-issued or GSE-issued CMBS. Although not as prevalent as CRE 

loan exposure, more than 40 percent of banks hold some level of CMBS. 

26 Federal Reserve Board, Financial Accounts of the United States, Levels of Financial Assets and Liabilities, by Sector 

and by Financial Instrument, Multifamily Residential Mortgages and Commercial Mortgages, September 23, 2021, 

https://www.federalreserve.gov/apps/fof/FOFTables.aspx. 

27 FDIC, Community Banking Study, December 2020, https://www.fdic.gov/resources/community-banking/ 

report/2020/2020-cbi-study-full.pdf. 
CO M M E R C I A L R E A L E STAT E : R E S I L I E N C E , R E COV E RY, A N D R I S KS A H E A D 

The Composition of CRE Loan Portfolios Has Shifted Since the Previous Real Estate Cycle 

The mix of CRE loans held by the banking industry as the Great Recession took hold in the 

United States in 2008 differed from that heading into the pandemic. In 2008, construction 

and development (C&D) loans were a large part of the mix reflecting, in part, significant 

bank involvement in residential construction projects. C&D lending was particularly active 

in the Pacific, Mountain, and South Atlantic U.S. Census Divisions of the nation amid 

rapid residential construction activity.28 At that time, the volume of multifamily property 

loans was modest. But following more than a decade of growth amid rising interest in 

multifamily living, the dollar volume of multifamily property loans outstanding more than 

doubled, and multifamily loans as a share of total CRE loans increased (Chart 10). 

Chart 10 

Since the Previous Cycle’s Peak Reached in 2008, Bank CRE Lending Focus 

Has Shi ̃ed Away From C&D and Into Other Categories 

Composition of CRE ($ Billions) 

4Q-2008 3Q-2021 Other CRE $1,934 $2,695 $177 

7% Other CRE 

$70 

4% 

Source: CoStar. 

Note: Other CRE includes loans to finance commercial real estate that are not secured by real estate. Due to rounding, the loan dollar balances 

do not add up to total CRE loans. 

C&D 

$591 

30% 

Multifamily

$206 

11% 

Nonfarm 

15% 

Nonresidential 

$1,066 

Nonresidential 

55% 

C&D $402 

18% 

60% 

Multifamily

$496 

Nonfarm 

$1,619 

Despite Substantial Loan Growth, CRE Concentrations Remain Below Levels Reached in 

the Previous Cycle 

Although the total amount of CRE loans has grown, individual banks’ holdings of CRE loans 

relative to their capital levels, referred to as concentrations of CRE loans, have remained 

below the peaks reached in the Great Recession.29 High concentrations of CRE loans are 

often a subject of interest to analysts, regulators, and economists, reflecting the significant 

stress experienced by highly concentrated banks during the Great Recession and other 

economic cycles.30 

CRE loan concentrations rose steadily from 2013 to 2018, consistent with a recovering 

economy, rising CRE prices, and increasing demand for multifamily property loans. 

However, concentrations have eased in recent years because growth in capital and reserves 

has outpaced CRE loan growth. The median ratio of CRE loans to capital and allowances 

of 181 percent in third quarter 2021 is well below the peak of 214 percent reached in fourth 

quarter 2008. Further, the share of banks with elevated levels of CRE loan exposure has 

declined. Less than one-quarter of banks hold elevated CRE concentrations as of third 

quarter 2021, compared with 35 percent of banks at year-end 2008.31 

28 U.S. Census Bureau, “Census Regions and Divisions of the United States,” www2.census.gov/geo/pdfs/maps-data/ 

maps/reference/us_regdiv.pdf. 

29 “CRE concentration” in this article is shorthand for the volume of a bank’s CRE loans expressed as a percentage of its 

tier 1 capital and allowances. It is an analytical measurement and is not intended to denote examination concerns. 

30 FDIC, Crisis and Response: An FDIC History, 2008-2013, https://www.fdic.gov/bank/historical/crisis/crisis-complete.pdf. 

31 For this analysis, a bank is considered to have an elevated CRE concentration if its ratio of CRE loans to tier 1 capital 

and allowances is above 300 percent. This terminology is used only as means of identifying banks with a significant CRE 

lending focus rather than to denote examination concerns. 

FDIC QUARTERLY 41 
2021 • Volume           15  • Number 4

Nevertheless, pockets of high exposure exist, most notably in the Pacific, Middle Atlantic, 

and South Atlantic U.S. Census Bureau Divisions of the nation (map).32 The states with the 

highest median CRE loan concentration levels include California, Arizona, Washington, 

New Jersey, and Florida. 

Map 

CRE Concentrations Are Highest Along the Coasts 

Source: FDIC. 

Note: The CRE concentration ratio measures banks’ CRE loans as a percentage of tier 1 capital and allowances. Data as of September 30, 2021. ̃ 

Median CRE 

Concentration Ratio 

by Quartile (Percent) 

Less Than 156 

156 to 203 

204 to 245 

Greater Than 245 

CRE concentrations reflect many factors, including local loan demand, bank-specific 

lending expertise, and board-approved risk appetites. Another key factor is the geographic 

proximity to commercial properties. So it is understandable that CRE lending is most 

prevalent among banks headquartered in metro areas, where large amounts of CRE 

properties are located. 

Multifamily lending has become a driver for CRE loan growth among many banks, 

particularly in the Pacific, New England, and Middle Atlantic U.S. Census Bureau Divisions 

of the nation.33 For example, median multifamily loan concentrations have more than 

doubled in the past decade among banks headquartered in California, Massachusetts, 

New Jersey, and New York. Multifamily loan concentrations in these states are among the 

highest in the nation, reflecting, in part, the above-average prevalence of multifamily 

living in these states.34 Increasing concentrations of multifamily loans could influence loan 

portfolio performance going forward as multifamily loans have historically experienced 

lower delinquency and loss rates than C&D loans. 

CRE Credit Quality Was Resilient in the Pandemic, Reflecting Stimulus, Forbearance, 

and Economic Recovery 

CRE credit conditions remained relatively stable despite a sharp downturn in the U.S. 

economy in 2020. The total dollar amount of delinquent CRE loans held by FDIC-insured 

institutions increased in 2020 but has steadily improved since then. The CRE delinquency 

rate among banks increased from 0.64 percent in fourth quarter 2019 to a pandemic peak of 

1.11 percent in December 2020, and has since improved to 0.87 percent in third quarter 2021 

32 U.S. Census Bureau, “Census Regions and Divisions of the United States,” www2.census.gov/geo/pdfs/maps-data/ 

maps/reference/us_regdiv.pdf. 

33 Ibid. 

34 2018 American Community Survey, One-Year Estimates, U.S. Census Bureau, https://www.census.gov/programssurveys/acs/technical-documentation/table-and-geography-changes/2018/1-year.html. The four states mentioned in 

the text have a higher percentage of total housing with five or more housing units than the national percentage. 

42 FDIC QUARTERLY 
CO M M E R C I A L R E A L E STAT E : R E S I L I E N C E , R E COV E RY, A N D R I S KS A H E A D 

(Chart 11). Additionally, net loan loss rates have been negligible among CRE loans and are 

comparable to pre-pandemic levels. 

Chart 11 

CRE Delinquency Rates Remain Historically Low 

Source: FDIC. 

Note: Data are quarterly figures through third quarter 2021. Other CRE loans include loans to finance commercial properties that are not secured 

by real estate. 

Past-Due and Nonaccrual Loans to Total Loans by CRE Loan Type 

Percent 

0 

5 

10 

15 

20 

25 

1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021 

Recession 

C&D 

Multifamily 

Nonfarm Nonresidential 

Other CRE 

CRE (All Types) 

The resilience of CRE credit quality among FDIC-insured institutions reflects several 

factors. First, government stimulus, including economic relief programs, grants, 

and tax breaks, helped borrowers maintain loan payments.35 For example, increased 

unemployment benefits helped apartment tenants pay rent. And, funds allocated under 

the Restaurant Revitalization Fund and the Small Business Administration’s Paycheck 

Protection Program were specifically designed to help businesses affected by the pandemic 

to pay operational expenses, including rent. 

Second, banks offered forbearance plans to borrowers to provide temporary relief in certain 

instances. Bank-offered forbearance plans included short-term loan modifications such as 

payment deferrals, fee waivers, extension of repayment terms, or other delays in payment 

to borrowers hurt by the pandemic.36 

Finally, broader economic circumstances lessened the pandemic’s effect on CRE. For 

instance, historically low interest rates played a role in limiting property value declines 

and kept interest payments on loans down. Also, the speed of economic rebound helped 

job growth and consumer spending return, which helped businesses recover. Other 

factors helped parts of CRE as well—the sharp rise in home prices may have spurred some 

would-be buyers to rent apartments, and the boom in e-commerce drove demand for 

industrial space. 

But there have been signs of credit stress in CRE outside of bank-reported delinquencies. 

CMBS delinquency rates among hotel and retail properties hit double digits in 2020, 

surpassing peak delinquency rates in the previous cycle. CMBS delinquency rates have 

improved in 2021 but remain above pre-pandemic levels. CMBS backed by industrial, 

multifamily, and office properties had only limited increases in delinquency rates, which 

helped moderate the effect on overall CMBS performance. 

35 Relief programs for individuals include Economic Impact Payments, federal unemployment compensation, and 

emergency rental assistance. Tax breaks for individuals include the Child Tax Credit. Relief programs for businesses 

include the Emergency Capital Investment Program, the Paycheck Protection Program, the Small Business Lending 

Fund, the Community Development Financial Institutions Fund, and others. Tax breaks for business include Payroll 

Tax Deferral, the Employee Retention Credit, and the Paid Leave Credit. The Restaurant Revitalization Fund and the 

Shuttered Venues Grant are other examples of funds or grants provided to businesses affected by the pandemic. More 

information on economic relief is available at https://home.treasury.gov/policy-issues/coronavirus. 

36 FDIC, “Revised Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working With 

Customers Affected by the Coronavirus,” Financial Institution Letter 36-2020, April 7, 2020, https://www.fdic.gov/news/ 

financial-institution-letters/2020/fil20036.html. 

FDIC QUARTERLY 43 
2021 • Volume           15  • Number 4

Challenges Facing the CRE Industry and the Lending Landscape 

CRE has been resilient amid the pandemic, but challenges remain. First, loan performance 

could weaken as stimulus benefits sunset and loan modifications wind down. Stimulus 

programs such as the Paycheck Protection Program and supplemental unemployment 

benefits have ended, and many loans have exited loan modification agreements or will soon. 

Second, banks are facing low loan yields. Loan yields have declined in recent years amid 

the drop in interest rates and reached a record low in third quarter 2021.37 Low loan yields 

contribute to margin compression and may complicate risk/reward lending decisions, as 

banks seek to deploy the record levels of deposits that flowed into banks since the start of 

the pandemic. 

Third, lending decisions likely will need to navigate uncertain CRE conditions for some 

time. Rising office vacancy rates and elevated sublease activity indicate waning demand, 

but the full effects of changing dynamics in the sector are still developing. Office property 

demand may take time to stabilize as tenants navigate remote work decisions and adjust 

how much space they need. A slow return to densely populated urban office centers could 

reduce the desirability of nearby multifamily and retail space that caters to those office 

employees. Similarly, the extent to which business travel returns could have lasting effects 

on certain hotel properties. 

Last, pandemic-related stress continues to hamper economic conditions. Labor market 

weakness and inflation concerns may continue to pressure borrowers’ ability to repay 

loans. The threat of new COVID variants and the pressure of combating a pandemic 

may continue for some time. These and other potential threats remain, but CRE so far 

has weathered some of the most severe economic conditions in recent history and has 

been resilient. 

Authors: 

Jeffrey A. Ayres, PhD 

Senior Financial Analyst 

Division of Insurance and Research 

Robert M. DiChiara 

Regional Manager 

Division of Insurance and Research 

Alexander J. G. Gilchrist 

Regional Economist 

Division of Insurance and Research 

James K. Presley-Nelson 

Senior Financial Analyst 

Division of Insurance and Research 

Stephen H. Simpson 

Senior Financial Analyst 

Division of Insurance and Research 

The authors thank Margaret M. Hanrahan and Olayemi F. Jegede for their contributions to this article. 

37 Loan interest income is aggregated among all nonresidential real estate loans, so yields calculated include agricultural 

real estate loans. 

44 FDIC QUARTERLY 
 

IMPLICATIONS OF RECORD DEPOSIT INFLOWS FOR BANKS 

DURING THE PANDEMIC 

Overview In 2020, the COVID-19 pandemic disrupted the global economy, creating stress and 

uncertainties for consumers and businesses. The U.S. government responded with 

assistance programs that, combined with increased personal savings, contributed to a 

record inflow of deposits to the banking industry. The deposit inflows in 2020, especially in 

each of the first two quarters, created historically high levels of bank liquidity. Economic 

uncertainty and high levels of liquidity prompted many banks to shift their balance sheet 

composition to shorter-term, lower-yielding assets. The loans-to-deposits ratio reached 

record lows in 2020 and 2021, while the cash-to-deposits ratio rose to 1.6 times the prepandemic level and almost three times the previous trough, which occurred in 2006, ahead 

of the Great Recession.1 

This article explores the benefits and challenges that community and noncommunity 

banks face when liquidity is abundant.2 Benefits of higher liquidity include less 

dependence on less stable sources of funding and an ability to respond effectively to 

unforeseen deposit account withdrawals. However, higher liquidity can also challenge 

bank earnings, depending on loan demand and the shape of the yield curve. Given the 

economic uncertainty associated with the pandemic, record deposit inflows, and tepid 

loan demand, banks deployed unusually high proportions of deposits into cash and 

securities. The shift in the composition of assets and a prolonged period of low interest 

rates have caused the industry net interest margin (NIM) to decline to its lowest level 

on record.3 

The Pandemic Led to a 

Record Level of Deposits 

and Abundant Liquidity 

Uncertainty about financial markets had repercussions on the U.S. economy in 2020. 

Consumer spending declined and personal savings increased. Deposits from businesses 

increased from programs such as the Paycheck Protection Program (PPP). Banks reported 

an influx of $3.3 trillion in total deposits in 2020, including more than $1 trillion in 

deposits in each of the first two quarters. Before this, the largest increase in deposits 

during a quarter had been $313.1 billion in fourth quarter 2012. Cash and securities also 

climbed to the highest level on record in 2020. The rapid growth in deposits was broadbased, with almost one-fourth of all banks reporting an increase of at least 25 percent 

in 2020. 

Lack of liquidity played a role in the failure of many banks during the Great Recession. Almost 

500 banks failed from 2008 through 2013. As described in the FDIC’s study of the crisis, 

“In 2008, concerns about the value of mortgage-related assets were the main cause 

of the liquidity crisis experienced by many large financial institutions. For smaller 

banks, the effects of a declining housing market and the accompanying recession were 

gradual at first, but in 2009 and 2010 the number of failed and problem banks increased 

exponentially.”4 Concentrations of noncore funding, such as brokered deposits, created 

problems for many banks. Even with unprecedented liquidity support from the Federal 

Reserve and the FDIC’s Temporary Liquidity Guarantee Program (TLGP), banks in 

1 This article compares the unprecedented conditions of 2020 to those of the Great Recession, which began in fourth 

quarter 2007. See National Bureau of Economic Research, “U.S. Business Cycle Expansions and Contractions,” 

https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions, July 19, 2021. 

2 The analysis covers year-end periods between 2000 and 2020 and includes third quarter 2021. All changes reflect a 

12-month time period. Data are as of September 15, 2021. Data presented on community banks and noncommunity banks 

are merger-adjusted on an annual period-by-period basis. Any references to ratios are not merger-adjusted. All charts 

include third quarter 2021 data points. This article uses the definition of “community bank” in the Notes to Users in the 

FDIC Quarterly Banking Profile. That definition uses criteria outlined in the 2020 FDIC Community Banking Study to identify 

community banks. The 2020 FDIC Community Banking Study is available at https://www.fdic.gov/resources/communitybanking/report/2020/2020-cbi-study-full.pdf. 

3 The net interest margin is a weighted average for all filers of Consolidated Reports of Condition and Income (Call Reports). 

4 FDIC, Crisis and Response: An FDIC History, 2008–2013, 2017, https://www.fdic.gov/bank/historical/crisis/crisiscomplete.pdf. 

FDIC QUARTERLY 45 
2021 • Volume           15  • Number 4

aggregate experienced a 5 percent decline in cash and a 43 percent decline in federal funds 

sold from 2008 to 2009. However, liquid assets of banks in aggregate fell by a modest 

2 percent. The liquidity ratio, which measures liquid assets to total assets, reached a low of 

16.87 percent in 2007 but rebounded in 2008 and continued on an upward trend.5 

Due to the economic uncertainties driven by the onset of the pandemic, bank regulators 

grew concerned about the potential liquidity problems. As it transpired, however, fiscal 

and monetary policies minimized the impact of the pandemic on banks and the real 

economy. These policies contributed to the largest one-year increase in deposits and the 

largest one-year increase in cash in 13 years. Over the same period, federal funds sold rose 

more than 39 percent. These factors resulted in a 49 percent rise in liquid assets and a 

7.54 percentage point increase in the liquidity ratio to 35.46 percent from 2019 to 2020. 

The extraordinary growth in deposits during the first half of 2020 was driven by pandemic policy 

actions that supported individuals and businesses, and by precautionary savings behavior of 

individuals, businesses, and financial market participants. As the pandemic spread throughout 

the United States, individual states and major metropolitan areas implemented widespread 

stay-at-home orders and business closures that severely reduced economic activity and 

forced many businesses to furlough employees. The abrupt disruption to the economy 

and the weakening outlook resulted in heightened financial market stress. As a result of 

this stress, corporations conserved cash and drew down their lines of credit. In addition, 

individuals changed their spending behavior as a result of the lockdowns and conserved 

cash in response to weak labor market prospects. All of these factors contributed to 

higher deposits. 

Fiscal support programs contributed to unprecedented deposit growth for both individuals 

and businesses in 2020 and 2021. Deposit growth typically has been modest during 

recessions, even with fiscal policy support. In contrast to previous recessions, the fiscal 

response to the COVID-19 pandemic, which consisted primarily of direct payments to 

households and businesses, was larger, more immediate, and more frequent than programs 

in the past. The U.S. government approved more than $5 trillion in fiscal support between 

March 2020 and March 2021, or 22.7 percent of first quarter 2021 U.S. gross domestic 

product (GDP).6 This far exceeded the Great Recession fiscal support passed between first 

quarter 2008 and first quarter 2009, which was 11.7 percent of U.S. GDP.7 Of the $5 trillion 

appropriated, more than $3.7 trillion was disbursed as of June 14, 2021, under three major 

pieces of legislation (Table 1).8 A large share of fiscal support directly targeted consumers, 

particularly Economic Impact Payments and expanded unemployment benefits. The PPP 

supported small businesses and payrolls for their employees. These programs boosted 

personal income. Personal income was $35.5 trillion for the seven quarters ending third 

5 The liquidity ratio measures the percentage of marketable assets available to cover deposits and other borrowings. 

For purposes of this analysis, the liquidity ratio is defined as liquid assets to total assets. Liquid assets are defined 

as cash, federal funds sold, and securities including unrealized gains on held-to-maturity securities less pledged 

securities [LIQUIDITY RATIO = (LIQUID ASSETS/ASSET)] where [LIQUID ASSETS = SUM(CHBAL + FREPO + SC + SCHF) 

– SUM(SCPLEDGE + SCHA)]. See https://www7.fdic.gov/DICT/app/templates/Index.html#!/Main for RIS variable 

definitions. 

6 The CARES Act, Public Law 116-136, March 27, 2020; The Consolidated Appropriations Act of 2021, Public Law 

116-260, December 27, 2020; and The American Rescue Plan Act of 2021, Public Law 117-2, March 11, 2021. Bureau 

of Economic Analysis, “Gross Domestic Product, 1st Quarter 2021 (Second Estimate); Corporate Profits, 1st 

Quarter 2021 (Preliminary Estimate),” news release BEA 21-22, May 27, 2021, https://www.bea.gov/news/2021/ 

gross-domestic-product-1st-quarter-2021-second-estimate-corporate-profits-1st-quarter. 

7 Congressional Budget Office, “Estimated Impact of the American Recovery and Reinvestment Act on Employment 

and Economic Output in 2014,” February 2015, https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/ 

reports/49958-ARRA.pdf; Congressional Budget Office, “Congressional Budget Office Cost Estimate—Economic 

Stimulus Act of 2008,” February 2008, cbo.gov/sites/default/files/110th-congress-2007-2008/costestimate/ 

hr5140pgo0.pdf; and Congressional Budget Office, “Troubled Asset Relief Program,” April 2009, https://www.bea. 

gov/news/2009/gross-domestic-product-1st-quarter-2009-final-and-corporate-profits; and Bureau of Economic 

Analysis, “Gross Domestic Product, 1st Quarter 2009 (final) and Corporate Profits,” news release bea.gov/news/2009/ 

gross-domestic-product-1st-quarter-2009-final-and-corporate-profits. 

8 Committee for a Responsible Federal Budget, June 14, 2021. 

46 FDIC QUARTERLY 
 

 

IMPLICATIONS OF RECORD DEPOSIT INFLOWS FOR BANKS DURING THE PANDEMIC 

quarter 2021, up from $31.8 trillion during the previous seven quarters (second quarter 

2018 through fourth quarter 2019). Income excluding compensation of employees increased 

$2.5 trillion over the same period, primarily driven by increased government social benefits 

to individuals.9 

Table 1 

Total Funds Distributed Under Major Fiscal Support Programs Since March 2020 ($ Billions) 

CARES Act 

(March 2020) 

Response and 

Relief Act 

(December 2020) 

American 

Rescue Plan 

(March 2021) 

Total 

Economic Impact Payments

Income Support 

State and Local Funding

Paycheck Protection Program

Tax Policy

Other Spending

Health Spending

Other Loan and Grant Programs

Total 

274.0

473.0

191.0 

330.0 

324.0

125.0 

147.0

111.0 

1,975.0

141.0

132.0 

82.6 

284.0

9.6 

53.0 

51.4

33.0 

786.6 

395.0 

199.0 

359.0 

7.3 

70.6 

77.6 

52.4

50.7 

1,211.6

810.0 

804.0

632.6 

621.3 

404.2

255.6 

250.8 

194.7

3,973.2

Source: Committee for a Responsible Federal Budget.

Note: Data as of October 8, 2021.

During the pandemic, the monthly personal savings rate varied with fiscal support 

payments (Chart 1).10 The savings rate spiked to 34 percent in April 2020, up from the 

pre-pandemic average rate of 7.5 percent, and declined through much of the year, ending 

at 14 percent in December 2020.11 As many individuals received additional government 

payments, personal savings rose again to 27 percent in March 2021. The savings rate 

declined through third quarter 2021 to 8 percent in September 2021. 

Chart 1 

Deposits Increased With Each Round of Stimulus and Subsequent Rise in

Government Transfers to Persons 

Sources: Federal Reserve Board, Bureau of Economic Analysis (Haver). 

Note: All series presented at a monthly frequency. 

$ Billions 

0 

100 

200 

300 

400 

500 

600 

700 

800 

900 

Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 

Personal Savings 

Recession 

Government Transfers to Persons 

Change in Deposits at Domestically 

Chartered Commercial Banks 

9 Bureau of Economic Analysis, “National Income and Product Accounts,” Table 2.1. 

10 The Bureau of Economic Analysis calculates personal savings by subtracting taxes and outlays from personal income. 

The personal savings rate is personal savings divided by disposable personal income. 

11 Bureau of Economic Analysis, “National Income and Product Accounts,” Table 2.6. 

FDIC QUARTERLY 47 
2021 • Volume           15  • Number 4

Expansionary monetary policy also likely contributed to deposit growth. Beginning 

in March 2020, the Federal Reserve announced a series of monetary policy actions, 

including large-scale asset purchases and emergency lending facilities.12 These programs 

contributed to an increase in deposits, as market participants sold financial assets to the 

Federal Reserve. The specific impact of monetary policy on deposit growth is unclear, 

however, as market participants likely reinvested a portion of the funds in other financial 

assets and held some in bank deposits. 

While the specific impact of monetary policy on deposit growth might be unclear, it is 

evident that low interest rates did not deter households and businesses from placing funds 

in banks. Deposits at FDIC-insured commercial banks and savings institutions increased 

$3.3 billion (22.6 percent) in 2020. Both interest-bearing and noninterest-bearing accounts 

reported record annual dollar increases in 2020: interest-bearing accounts increased 

$1.8 trillion (16.1 percent) and noninterest-bearing accounts increased $1.5 trillion 

(45 percent) (Chart 2).13 The growth in both deposit categories would suggest that customers 

were less concerned about near-zero interest rates, and more intent on placing their funds 

in insured depository institutions. In comparison with the Great Recession, during which 

certain programs were created to restore stability and strengthen liquidity in the banking 

industry, the proactive government actions during the 2020 economic downturn resulted in 

large amounts of liquidity in the banking industry. 

Chart 2 

Both Interest-Bearing Accounts and Noninterest-Bearing Accounts Had 

Record Annual Dollar Increases in 2020 

Source: FDIC. 

Note: Includes both domestic and foreign deposits. 2021 depicts third quarter data. All other years depict fourth quarter data. 

$ Trillions Noninterest-Bearing 

Interest-Bearing 

Total Deposits 

0 

5 

10 

15 

20 

25 

2000 2003 2006 2009 2012 2015 2018 2021 

Economic uncertainty and a lack of loan demand from households and businesses contributed 

to a shift in the deployment of deposits from loans to cash. Lower loan demand resulted in 

fewer opportunities to fund loans with the surge of deposits. As a result, banks invested 

a high level of deposits in bank accounts at other financial institutions (known as “due 

from accounts”) and in securities. Tepid loan demand combined with strong deposit 

growth resulted in substantial shifts in balance sheet composition (Table 2). The loans-todeposits ratio decreased from a 20-year high in 2000 to a 20-year low in 2020. Conversely, 

the cash-to-deposits ratio increased from a low in 2006 to a high in 2020. The ratio of 

12 Federal Reserve, “Federal Reserve Announces Extensive New Measures to Support the Economy,” press release, March 

23, 2020, federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm. 

13 Deposits can be categorized as interest-bearing and noninterest-bearing accounts. Interest-bearing accounts 

are accounts in which an individual can deposit money and earn interest, while noninterest-bearing accounts are 

transaction accounts in which money can quickly be accessed but does not earn interest. For the purpose of this analysis, 

interest-bearing accounts and noninterest-bearing accounts include deposits in domestic and foreign offices. 

48 FDIC QUARTERLY 
- - - -

IMPLICATIONS OF RECORD DEPOSIT INFLOWS FOR BANKS DURING THE PANDEMIC 

securities-to-deposits increased for noncommunity banks but decreased for community 

banks. The shift from higher-yielding assets (loans) to lower-yielding assets (securities) 

and non-yielding assets (cash) was a main factor that reduced interest income on earning 

assets, resulting in NIM compression.14 

Table 2 

Average Cash to Deposits Increased While Average Loans to Deposits Declined During the Pandemic (Percent) 

2000–2007 2008–2011 2012–2019 2020 2021 

Noncommunity Banks

Loans-to-Deposits

Cash-to-Deposits

Securities-to-Deposits

95.01 

7.47

27.12 

78.77 

12.49

26.74

70.17 

14.83

27.75 

58.37 

18.57 

29.73 

54.76

19.68 

31.98 

Community Banks 

Loans-to-Deposits

Cash-to-Deposits

Securities-to-Deposits

83.99 

5.09 

27.88 

82.72 

7.69 

25.20 

82.58 

8.24

24.45

80.07 

12.88 

20.93 

72.96 

14.34

24.42

Source: FDIC.

Note: 2020 depicts fourth quarter data while 2021 depicts third quarter data. All other timeframes are averages over the time period.

Liquid assets and the liquidity ratio spiked in 2020 and 2021, mainly attributable to the 

influx of deposits that were converted to cash and securities (Charts 3 and 4). Liquid 

assets grew at a similar rate between noncommunity banks and community banks. 

Noncommunity banks have exhibited higher and more rapidly growing liquidity ratios than 

community banks since 2006 (Chart 5). During the Great Recession in 2008, the liquidity 

ratio was 6.55 percentage points higher for noncommunity banks (21.29 percent) than for 

community banks (14.74 percent). In 2020, the difference reached a high of 14.82 percentage 

points, as the liquidity ratio reached a record high of 37.18 percent for noncommunity banks 

at that time. Of the liquid asset components, securities were the main driver of the higher 

divergence in the liquidity ratio. 

Chart 3 

Deposits Funded Cash and Securities at a Higher Rate in 2020 and 2021 

$ Trillions 

25 Loans 

Securities 

Cash 

20 

15 

10 

5 

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Source: FDIC. 

Note: 2021 depicts third quarter data. All other years depict fourth quarter data. 

14 Another contributor to NIM compression was an influx of earning assets, due to temporary PPP balances. 

FDIC QUARTERLY 49 
2021 • Volume           15  • Number 4

Chart 4 

Liquid Assets and the Liquid Assets to Total Assets Ratio Spiked in 2020 and 2021 

$ Trillions Percent 

10 40 

Liquid Assets (Le ̃ Axis) 

Benefits of Abundant 

Liquidity in the 

Banking Industry 

9 

8 

7 

6 

5 

4 

3 

2 

1 

0 

Liquid Assets to Total Assets (Right Axis) 35 

30 

25 

20 

15 

10 

5 

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Source: FDIC. 

Note: 2021 depicts third quarter data. All other years depict fourth quarter data. Liquid assets are defined as cash, federal funds sold, and securities, 

including unrealized gains on held-to-maturity securities, less pledged securities. 

Chart 5 

Liquid Assets to Total Assets Has Increased at a Faster Rate for Noncommunity Banks 

Than Community Banks Since 2006 

and Community Banks 

-5 

0 

5 

10 

15 

20 

25 

30 

35 

Liquid Assets to Total Assets (Percent) Community Banks 

45 Noncommunity Banks 

Di ̃erence Between Noncommunity 40 

-10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Source: FDIC. 

Note: 2021 depicts third quarter data. All other years depict fourth quarter data. 

Dependency on wholesale funding declined to an all-time low following strong deposit growth 

in 2020.15 In the early 2000s and leading up to the Great Recession, the banking industry 

steadily increased its dependency on wholesale funding. Wholesale funding-to-total assets 

at year-end 2007 stood at 27.64 percent, with most of the growth derived from the reliance 

on borrowings from Federal Home Loan Banks (FHLBs), other borrowed funds (excluding 

FHLBs), and brokered deposits.16 During the post-Great Recession period, dependency on 

wholesale funding progressively declined for the banking industry. Leading up to 2020, the 

dependency continued to decline, and by year-end 2020 wholesale funding-to-total assets 

reached an all-time low of 15.51 percent for the banking industry (Chart 6). 

The benefit of having a lower exposure to wholesale funding is less reliance on a 

potentially unstable source of funds, which may be rapidly withdrawn or transferred. 

With an abundance of liquidity in the banking sector, dependency on certain components 

15 Wholesale funding includes federal funds purchased and securities sold under agreement to repurchase; Federal Home 

Loan Bank borrowings; brokered, municipal and state, and foreign deposits; and other borrowings. Listing services were 

not included in order to compare across periods. For the period 2018 to 2020, reciprocal deposits were included to permit 

comparison with 2007 brokered deposits, as many reciprocal deposits were no longer reported as brokered deposits. 

16 The analysis covers balance sheet levels between year-end 2001 and year-end 2007. 

50 FDIC QUARTERLY 
IMPLICATIONS OF RECORD DEPOSIT INFLOWS FOR BANKS DURING THE PANDEMIC 

of wholesale funding in 2020 declined from a year earlier. The largest decline in 2020 

occurred in borrowings from the FHLBs, which fell $226.5 billion (46.9 percent), and other 

borrowed funds (excluding FHLBs), which fell $116.5 billion (19.8 percent). Leading up to 

the Great Recession, FHLB borrowing was one of three major sources of wholesale funding, 

representing 6.21 percent of total assets at year-end 2007. Borrowings from FHLBs totaled 

$808.9 billion in 2007, and by 2020 totaled only $256 billion, or 1.17 percent of total assets. 

Chart 6 

Dependency on Wholesale Funding Declined in 2020 

Percent of Total Assets Community Banks 

35 Noncommunity Banks 

Industry 

30 

25 

20 

15 

10 

5 

0 

2000 2003 2006 2009 2012 2015 2018 2021 

Source: FDIC. 

Note: Wholesale funding includes federal funds purchased and securities sold under agreement to repurchase; Federal Home Loan Bank 

borrowings; brokered, municipal and state, and foreign deposits; and other borrowings. Listing services were not included. For period 2018 to 2021, 

reciprocal deposits were consolidated with brokered deposits. 2021 depicts third quarter data. All other years depict fourth quarter data. 

Leading up to the Great Recession, dependency on wholesale funding increased among 

both noncommunity and community banks. Noncommunity banks reported growth 

similar to that of the industry, as the wholesale funding-to-total assets ratio increased to 

29.19 percent at year-end 2007. Wholesale funding growth at community banks increased 

and reached 18.17 percent of assets at year-end 2007. However, after a steady decline from 

2009 to 2012, community banks increased their reliance on wholesale funding, particularly 

in brokered deposits and FHLB borrowings, and wholesale funds reached 17.72 percent of 

assets at year-end 2017. As deposits grew, the dependency on these two items fell and the 

wholesale funding-to-total assets ratio steadily declined to 16.88 percent by year-end 2020.17 

Sufficient liquidity levels provide buffers to effectively respond to unforeseen deposit account 

withdrawals and provide credit during the economic recovery. Strong liquidity levels, 

especially highly liquid assets such as cash, should position the banking industry to 

respond to potential deposit account withdrawals as the economic recovery progresses. 

Additionally, ample liquidity levels should allow banks to serve the credit needs of 

households and businesses as the recovery progresses. 

Challenges of 

Abundant Liquidity in 

the Banking Industry 

A large share of the deposits that flowed into banks during the pandemic were deployed in 

non-yielding and low-yielding assets which pushed down asset yields and caused the banking 

industry’s NIM to decline to record low levels.18 Earning assets in the banking industry grew 

at a record rate from 2019 to 2020. However, loan growth was relatively slow in 2020 and the 

main contributor to earning assets growth was short-term securities. This caused a decline 

in total interest income relative to pre-pandemic levels and reduced the industry’s yield 

on earning assets. Total interest income declined 17.4 percent between 2019 and 2020 even 

though earning assets grew 17.8 percent during the year. As a result, the yield on earning 

assets declined 125 basis points to 2.92 percent as of fourth quarter 2020, the lowest level on 

17 Statutorily mandated regulatory changes finalized in 2019 caused many reciprocal deposits formerly reported as 

brokered to no longer be reported as brokered. This change reduced to some degree the reported dependency on brokered 

deposits. 

18 Record low dates back to first quarter 1984 when Quarterly Banking Profile data were first collected. 

FDIC QUARTERLY 51 
2021 • Volume           15  • Number 4

record at that time.19 NIM compressed 61 basis points over the same period, to 2.68 percent, 

also the lowest on record at that time.20 

In the future, banks with low levels of liquid assets may have to increase deposit rates to 

retain deposits as loan demand increases or interest rates rise, which may cause further 

NIM compression. On the other hand, institutions that have an abundance of liquid assets 

may feel less pressure to increase deposit rates to compete under the same circumstances. 

NIM compressed to record lows for both noncommunity banks and community banks 

in 2020 and the first half of 2021. Total interest income declined disproportionately in 

2020 between noncommunity and community banks, as noncommunity banks tend to 

hold more short-term assets and have operated with NIM lower than community banks 

(Chart 7). For noncommunity banks, total interest income declined 19.6 percent, while 

community banks’ total interest income declined only 2.8 percent from 2019 to 2020. The 

yield on earning assets reached all-time lows of 2.81 percent for noncommunity banks 

and 3.78 percent for community banks. The cost of funding earning assets also fell to 

all-time lows of 0.22 percent for noncommunity banks and 0.45 percent for community 

banks, so the possibility for further downward movement is limited. Lower asset yields 

at noncommunity banks reflect differences in the asset composition, as previously 

discussed, as well as the maturity distribution of the assets compared with community 

banks. Assets maturing or repricing in more than three years are a smaller share of total 

assets for noncommunity banks than for community banks (Charts 8 and 9).21 Since 2014, 

the largest loan category for noncommunity banks has been commercial and industrial 

loans, which tend to reprice in less than three years, while community banks tend to 

hold higher levels of long-term loans such as commercial real estate mortgages and 

1–4 family mortgages.22 Due to this difference in maturity distributions, in a declining 

interest-rate environment noncommunity bank loans and securities will tend to reprice 

downward faster than those of community banks, with resulting downward pressure on 

their NIMs. Conversely, noncommunity bank NIMs will tend to increase faster than those of 

community banks when rates rise, as seen in 2015 to 2018. 

Chart 7 

Community Banks Have Larger Net Interest Margins Than Noncommunity Banks 

Net Interest Margin (Percent) Community Banks 

4.50 Noncommunity Banks 

Industry 4.00 

3.50 

3.00 

2.50 

2.00 

1.50 

1.00 

0.50 

0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Source: FDIC. 

Note: 2021 depicts third quarter data. All other years depict fourth quarter data. 

19  The yield on earning assets reached another record low of 2.68 percent in second quarter 2021, but increased 5 basis 

points from second quarter 2021 to third quarter 2021. 

20 NIM continued to decline and reached another record low of 2.50 percent in second quarter 2021, but increased 6 basis 

points from second quarter 2021 to third quarter 2021. 

21 FDIC, “Remarks by FDIC Chairman Jelena McWilliams and Division of Insurance and Research Director Diane Ellis on 

the First Quarter 2020 Quarterly Banking Profile,” press release, June 16, 2020, fdic.gov/news/speeches/2020/spjun1620. 

html. 

22 The various loan compositions are calculated as a percentage of total loans and leases. 

52 FDIC QUARTERLY 
IMPLICATIONS OF RECORD DEPOSIT INFLOWS FOR BANKS DURING THE PANDEMIC 

Chart 8 

Loans and Securities Maturing in More Than Three Years Remain Around 

50 Percent of Total Assets for Community Banks 

Percent of Total Assets 

60 

50 

> 15 Years 

5 to 15 Years 

3 to 5 Years 

40 

30 

20 

10 

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Source: FDIC. 

Note: 2021 depicts third quarter data. All other years depict fourth quarter data. 

Chart 9 

Loans and Securities Maturing in More Than Three Years Reached a 20-Year High but 

Remain Below 40 Percent of Total Assets for Noncommunity Banks 

Percent of Total Assets 

60 > 15 Years 

5 to 15 Years 

50 3 to 5 Years 

40 

30 

20 

10 

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Source: FDIC. 

Note: 2021 depicts third quarter data. All other years depict fourth quarter data. 

Record deposit growth reduced capital ratios for the banking industry. Net income in fourth 

quarter 2020 increased from a year ago, mainly from lower provision expenses for credit 

losses and higher noninterest income. These higher earnings helped grow equity capital 

over the year. Despite an increase in equity capital (up 5.4 percent from 2019), the equityto-total assets ratio declined because deposit growth resulted in total assets increasing at 

a rate more than three times greater than equity (17.4 percent). The decline in capital ratios 

as a result of the growth in assets caused banks to adjust their balance sheets in order to 

maintain adequate capital ratio requirements. The aggregate equity-to-total assets ratio 

for the U.S. banking industry was 11.32 percent in 2019 and declined 116 basis points to 10.16 

by year-end 2020, a year-end level not seen since 2008. Banks’ aggregate leverage ratio also 

declined by 85 basis points from 2019 to 8.81 percent in 2020.23 Risk-based capital ratios, 

however, improved due to the higher level of low or zero-risk weighted assets. The total 

risk-based capital ratio rose 84 basis points from 2019 to 15.46 percent in 2020. 

23 Excluding PPP loans from industry’s total assets at year-end 2020, the equity-to-total assets ratio would have been 

10.36 percent. 

FDIC QUARTERLY 53 
2021 • Volume           15  • Number 4

Looking Ahead Elevated levels of liquidity, especially in cash and securities, create many benefits and 

challenges for banks. It can be beneficial for banks to have abundant liquidity to decrease 

reliance on wholesale funds, to provide credit for households and businesses, and to 

provide a buffer in case depositors withdraw funds. However, abundant liquidity levels 

combined with weak loan demand may cause lower earnings and lower overall asset yields 

resulting in NIM compression and lower capital levels. In the low interest rate environment, 

banks have been adding longer-term assets to their balance sheets in order to maintain 

or increase NIM. However, as interest rates begin to normalize, a higher share of longerterm assets may result in a longer-lasting negative effect on earnings pressure. Coming 

out of the pandemic, as loan demand is restored and deposits are presumably withdrawn, 

monitoring both the level and the composition of liquidity in the banking industry will 

remain important. 

Authors: 

Caitlyn R. Kasper 

Financial Analyst 

Division of Insurance and Research 

Benjamin Tikvina 

Senior Financial Analyst 

Division of Insurance and Research 

The authors thank Kevin Curran and Krishna Patel for their analysis of the U.S. government policy response to the pandemic. 

54 FDIC QUARTERLY