FDIC Quarterly 

Quarterly Banking Profile: 

First Quarter 2010 

A Template for Success: 

The FDIC’s Small-Dollar Loan 

Pilot Program 

A Guide to Processing 

Deposit Insurance Claims: 

A Cross-Country Perspective 

2010, Volume 4, Number 2 
 

 

 

 

 

 

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

Insurance Corporation and contains a comprehensive summary of the most current financial results for 

the banking industry. Feature articles appearing in the FDIC Quarterly range from timely analysis of 

economic and banking trends at the national and regional level that may affect the risk exposure of 

FDIC-insured institutions to research on issues affecting the banking system and the development of 

regulatory policy. 

Single copy subscriptions of the FDIC Quarterly can be obtained through the FDIC Public Information Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. E-mail requests should be 

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

Information Center. 

The FDIC Quarterly is available online by visiting the FDIC Web site at www.fdic.gov. To receive 

e-mail notification of the electronic release of the FDIC Quarterly and the individual feature articles, 

subscribe at www.fdic.gov/about/subscriptions/index.html. 

Chairman Sheila C. Bair 

Director, Division of Insurance Arthur J. Murton 

and Research 

Executive Editor Richard A. Brown 

Managing Editors Diane L. Ellis 

Paul H. Kupiec 

Christopher J. Newbury 

Editor Kathy Zeidler 

Publication Managers Peggi Gill 

Lynne Montgomery 

Media Inquiries (202) 898-6993 
 

 

 

 

 

 

 

 

 

FDIC Quarterly 

2010, Volume 4, Number 2 

Quarterly Banking Profile: First Quarter 2010 

FDIC-insured institutions reported an aggregate profit of $18.0 billion in the first quarter of 2010, a $12.5 billion 

improvement from the $5.6 billion the industry earned in the first quarter of 2009, but still well below historical 

norms for quarterly profits. More than half of all institutions (52.2 percent) reported year-over-year improvements 

in their quarterly net income. Fewer than one in five institutions (18.7 percent) reported net losses for the quarter, compared to 22.3 percent a year earlier. The average return on assets (ROA) rose to 0.54 percent, from 0.16 

percent a year ago. This is the highest quarterly ROA for the industry since the first quarter of 2008. See page 1. 

Insurance Fund Indicators 

Estimated insured deposits (based on $250,000 coverage) increased 1.3 percent in the first quarter of 2010. 

The Deposit Insurance Fund reserve ratio rose 1 basis point during the quarter to –0.38 percent, and 41 

FDIC-insured institutions failed during the quarter. See page 14. 

Temporary Liquidity Guarantee Program 

The FDIC Board approved the Temporary Liquidity Guarantee Program (TLGP) in response to major disruptions in credit markets. The TLGP improves access to liquidity for participating institutions by fully guaranteeing non-interest-bearing transaction deposit accounts and by guaranteeing eligible senior unsecured debt. 

As of March 31, 2010, approximately 80 percent of FDIC-insured institutions have opted in to the Transaction 

Account Guarantee Program, and 7,678 eligible entities elected the option to participate in the Debt Guarantee 

Program. Approximately $279 billion in non-interest-bearing transaction accounts was guaranteed as of March 

31, 2010, and $305 billion in guaranteed senior unsecured debt, issued by 79 entities, was outstanding at the end 

of the first quarter. Issuance under the Debt Guarantee Program ended on October 31, 2009. See page 18. 

Feature Articles: 

A Template for Success: The FDIC’s Small-Dollar Loan 

Pilot Program 

The Federal Deposit Insurance Corporation’s (FDIC) two-year Small-Dollar Loan Pilot Program concluded in 

the fourth quarter of 2009. The pilot was a case study designed to illustrate how banks can profitably offer 

affordable small-dollar loans as an alternative to high-cost credit products such as payday loans and fee-based 

overdraft programs. This article summarizes the results of the pilot, outlines the lessons learned and the potential strategies for expanding the supply of affordable small-dollar loans, and highlights pilot bank successes 

through case studies. See page 28. 

A Guide to Processing Deposit Insurance Claims: 

A Cross-Country Perspective 

This article discusses the deposit insurance claims process, whereby insured depositors are reimbursed when a 

bank fails. The article reviews the role of deposit insurers in a bank failure as well as their responsibilities in the 

claims process. It also reviews the basic tools that deposit insurers need to satisfy the claims of insured depositors 

(and others) and the procedures commonly followed in the claims process. Finally, the article explores the claims 

process of deposit insurers in Canada, the Philippines, the Russian Federation, and the United States. See page 42. 

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 First Quarter 2010 

INSURED INSTITUTION PERFORMANCE 

■ Industry Net Income Improves to a Two-Year High of $18 Billion 

■ Loss Provisions Decline but Remain above $50 Billion 

■ Asset Quality Deterioration Continues to Moderate 

■ New Accounting Rules Cause Sharp Increase in Reported Loan Balances 

■ Number of Insured Institutions Falls below 8,000 

Earnings Post Significant Increase 

First quarter results for insured commercial banks and 

savings institutions contained positive signs of recovery 

for the industry. While new accounting rules had a major 

effect on several components of the industry’s balance 

sheet and income statement, there was clear improvement in certain performance indicators.1 Lower provisions for loan losses and reduced expenses for goodwill 

impairment lifted the earnings of FDIC-insured commercial banks and savings institutions to $18.0 billion. 

While still low by historical standards, first quarter earnings represented a significant improvement from the $5.6 

billion the industry earned in first quarter 2009 and are 

the highest quarterly total since first quarter 2008. The 

largest year-over-year increases occurred at the biggest 

banks, but a majority of institutions (52.2 percent) 

reported net income growth. This is the highest percentage of institutions reporting increased quarterly earnings 

in more than three years (since third quarter 2006). 

1 FASB Statements 166 and 167. See Notes to Users. 

Chart 1 

New Accounting Rules Affect Reported Cash Flows 

Implementation of FAS 166 and 167 caused a large 

amount of loans in securitized loan pools to be consolidated into the reported loan balances of a relatively 

small number of large insured institutions in the first 

quarter. As a result, the interest income, interest 

expense, and charge-offs associated with these balances 

also were included in first quarter financial reports, and 

the inclusion of the loan balances triggered changes to 

capital and reserves, as well. Net interest income 

totaled $109.1 billion in the first quarter, a $9.7 billion 

(9.7 percent) increase from first quarter 2009. Most of 

this increase reflected the application of the new 

accounting rules. It was somewhat offset by a $2.1 

billion (99.4 percent) year-over-year decline in income 

from securitization activities and a $1.1 billion (18.5 

percent) drop in servicing income that were also largely 

a result of the new rules. Application of the accounting 

changes had no significant effect on the year-over-year 

increase in the industry’s reported net income; lower 

provisions for loan losses and reduced expenses for 

Chart 2 

FDIC QUARTERLY 1 2010, VOLUME 4, NO. 2 

Quarterly Net Income 

Billions of Dollars 

-40 

-30 

-20 

-10 

0 

10 

20 

30 

40 

50 

60 

1234123412341234 1 

Securities and Other Gains/Losses, Net 

Net Operating Income 

36.9 38.0 38.0 35.3 35.6 36.8 

28.7 

0.5 

19.3 

4.7 0.9 

-37.8 

5.6 

-4.4 

2006 2007 2008 2009 

2.0 

-1.3 

2010 

18.0 

Percentage of Insured Institutions with Earnings Gains 

Percent of Institutions with Year-over-Year Increases in Quarterly Net Income 

0 

10 

20 

30 

40 

50 

60 

70 

1234123412341234123 41 

2005 2006 2007 2008 2009 2010 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

goodwill impairment were the main sources of the 

improvement in industry earnings. 

Reduced Loan-Loss Provisions Help Drive 

Earnings Improvement 

Insured institutions set aside $51.3 billion in provisions 

for loan and lease losses in the first quarter, a $10.2 

billion (16.6 percent) decline from a year earlier. 

However, only about one-third of insured institutions 

reported year-over-year declines in loss provisions, with 

much of the overall reduction concentrated among a 

few of the largest banks. Another positive factor in the 

earnings improvement at larger institutions was a $2.2 

billion (2.3 percent) decline in noninterest expenses 

that was caused by lower goodwill impairment losses. 

Total noninterest income was $6.6 billion (9.7 percent) 

lower than a year earlier because of the declines in securitization and servicing income and a $1.5 billion (15.1 

percent) reduction in trading revenue. The average 

return on assets (ROA) rose to 0.54 percent, compared 

to 0.16 percent in first quarter 2009. This is the highest 

quarterly ROA for the industry since first quarter 2008. 

Almost half of all institutions—48.1 percent—reported 

improved ROAs. 

Rise in Average Margin Reflects Impact of 

New Rules 

The sharp increase in net interest income caused by 

adoption of the new accounting rules significantly 

boosted the industry’s net interest margin (NIM). The 

average margin increased to a seven-year high of 3.83 

percent, from 3.53 percent in fourth quarter 2009 and 

3.41 percent in first quarter 2009. Most of the improvement occurred at a few large credit card lenders; only 

40.7 percent of institutions reported higher NIMs 

compared to the fourth quarter, although 57.8 percent 

reported year-over-year improvement. 

C&I Charge-Offs Decline for First Time in Four Years 

Loan losses posted a year-over-year increase for a 13th 

consecutive quarter. Net charge-offs totaled $52.4 

billion, an increase of $14.5 billion (38.4 percent) from a 

year earlier. Credit cards accounted for almost threequarters ($10.4 billion) of the growth in charge-offs, 

reflecting the securitized receivables brought back onto 

balance sheets by the new accounting rules. Charge-offs 

were up from a year ago in most major loan categories, 

although the increases were smaller than in recent quarters. Most non-consumer loan categories were not 

affected by the new accounting rules. A notable exception to the rising trend was loans to commercial and 

industrial (C&I) borrowers, where charge-offs fell for the 

first time since first quarter 2006, declining by $675 

million (10.2 percent). Net charge-offs of real estate 

loans secured by nonfarm nonresidential real estate properties increased by $1.6 billion (155.5 percent). Chargeoffs of residential mortgage loans were $1.6 billion (22.9 

percent) higher than a year earlier, while charged-off 

home equity loans rose by $1.2 billion (29.9 percent). 

Chart 3 Chart 4 

Quarterly Net Interest Margins 

Percent 

3.84 

3.73 

2.5 

3.0 

3.5 

4.0 

4.5 

1 234123412341234123 41 

2005 2006 2007 2008 2009 2010 

Assets < $1 Billion 

Assets > $1 Billion 

Major Factors Contributing to the 

Year-over-Year Change in Quarterly Earnings 

Billions of Dollars 

$10.2 

$9.7 

$2.2 

$6.6 

$3.1 

Positive Factors 

Negative Factors 

Increase in 

Income Taxes 

Increase in Net 

Interest Income 

Decrease in 

Noninterest Expense 

Decrease in 

Noninterest 

Income 

Decrease in Loan 

Loss Provisions 

0 

5 

10 

15 

20 

25 

FDIC QUARTERLY 2 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

Increase in Noncurrent Loans Is Smallest in 

Three Years 

The amount of loans and leases that were noncurrent 

(90 days or more past due or in nonaccrual status) 

increased for a 16th consecutive quarter, rising by $17.4 

billion (4.4 percent) from the level at the end of 2009. 

This is the smallest quarterly increase in noncurrent 

loans since third quarter 2007, and all of the increase 

consisted of loans and leases 90 days or more past due. 

Loans and leases in nonaccrual status fell for the first 

time in four years, declining by $65 million. Noncurrent credit card loans increased during the quarter by 

$7.6 billion (51.9 percent), reflecting the inclusion of 

securitized credit card receivables. Noncurrent residential mortgage loans rose by $12.9 billion (7.2 percent), 

and noncurrent nonfarm nonresidential real estate 

loans increased by $3.7 billion (8.8 percent). In 

contrast, noncurrent C&I loans declined by $5.1 billion 

(12.2 percent), and noncurrent real estate construction 

and development loans fell by $1.8 billion (2.5 

percent). It was the second consecutive quarterly 

decline in noncurrent levels for both loan categories. 

New Accounting Rules Require Higher Reserves at 

Some Institutions 

Total reserves for loan losses of insured institutions 

increased by $34.5 billion (15.1 percent) during the 

first quarter, even though net charge-offs exceeded loss 

provisions by $1.2 billion. The large jump in reported 

reserves was associated with the requirements of FASB 

166 and 167, as affected institutions converted equity 

capital directly into reserves. The increased reserves 

Chart 5 

Quarterly Net Charge-offs and Change in 

Noncurrent Loans, 2007–2010 

Billions of Dollars 

110 

10 

30 

50 

70 

90 Quarterly Change in Noncurrent Loans 

Quarterly Net Charge-offs 

-10 1 2 3 4 1 2 3 4 1 2 3 4 1 

caused the industry’s “coverage ratio” of reserves to 

noncurrent loans and leases to increase for the first time 

in 16 quarters, from 58.3 percent to 64.2 percent, even 

though slightly fewer than half of all insured institutions (49.2 percent) improved their coverage ratios 

during the quarter. 

Internal Capital Generation Turns Positive for 

First Time in Two Years 

Total equity capital increased by $15.1 billion (1.0 

percent) in the first quarter. The increase would have 

been larger, but institutions reported almost $22 billion 

in reductions in equity capital stemming from the application of FAS 167. More than three-quarters of all 

institutions (76.6 percent) increased their equity capital 

by a combined total of $30 billion during the quarter, 

but these increases were partially offset by the accounting-related equity declines noted above. Retained earnings were positive for the first time since first quarter 

2008, as net income exceeded dividends by $13.6 

billion. Insured institutions paid $4.4 billion in dividends in the first quarter, down $2.9 billion (39.4 

percent) from a year earlier. 

Accounting Change Lifts Reported Total Assets 

Industry assets increased for the first time since fourth 

quarter 2008, and total loan and lease balances rose for 

the first time since second quarter 2008, but only 

because of the new accounting rules. Total assets 

reported by insured institutions were $248.6 billion (1.9 

percent) higher than at the end of 2009, but this was 

entirely due to a $294.9 billion (69.9 percent) increase 

Chart 6 

Quarterly Change in Loan Balances, 

First Quarter 2010 

Billions of Dollars 

350 

$295 300 

250 

200 

150 

100 

50 $28 

0 -$2 

-50 -$29 -$33 -$40 

-100 

Credit Other Residential Home C&I Other 

Cards Consumer Mortgage Equity Loans Loans & 

Loans Loans Lines of Leases 

2007 2008 2009 2010 Credit

FDIC QUARTERLY 3 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in credit card loans caused by the consolidation of more 

than $300 billion in securitized credit card receivables 

into reported loan balances at the end of the first quarter. Other consumer loan balances increased by $28.0 

billion, also reflecting similar consolidations of securitized loan pools into reported loan balances, but all 

other major loan categories registered net declines 

during the quarter. C&I loan balances fell by $33.1 

billion (2.7 percent), real estate construction and development loans declined by $33.1 billion (7.3 percent), 

and residential mortgage loans declined by $28.9 billion 

(1.5 percent). Real estate loans secured by nonfarm 

nonresidential real estate properties declined for the 

first time since third quarter 1992, falling by $891 

million (0.1 percent). In addition to the declines in 

most major loan categories, banks reduced their holdings of mortgage-backed securities by $8.9 billion (0.6 

percent). Institutions increased their portfolios of U.S. 

Treasury securities by $54.4 billion (53.0 percent) and 

their balances with Federal Reserve banks by $23.6 

billion (4.1 percent). 

Securitized Consumer Loans Return to Balance Sheets 

The increase in loan balances was mirrored by declines 

in loans securitized and sold. Securitized credit card 

receivables declined by $347.4 billion (95.6 percent) 

during the quarter, while securitized other consumer 

loans fell by $25.7 billion (80.5 percent), and securitized home equity lines of credit dropped by $5.8 billion 

(97.2 percent). In all, securitized assets posted a $403.1 

billion (22.2 percent) decline in the first quarter. 

Chart 7 

Secured Borrowings Register Sharp Increase 

A substantial amount of short-term secured borrowings 

accompanied securitized loans onto bank balance sheets 

in the first quarter. Total deposits fell for the first time 

in a year, declining by $28.6 billion (0.3 percent). 

Nondeposit liabilities increased by $262.9 billion (10.9 

percent). Federal Home Loan Bank advances fell for a 

sixth consecutive quarter, declining by $52.9 billion 

(9.9 percent), while other nondeposit borrowings 

increased by $294.3 billion (52.8 percent). 

“Problem List” Continues to Grow 

The number of institutions reporting quarterly financial results declined by 80 in the first quarter, from 

8,012 to 7,932. Forty-one FDIC-insured institutions 

failed during the quarter, while 37 institutions were 

merged into other charters. Only three new charters 

were added during the quarter, and all three were charters formed to acquire failed banks. The number of 

insured commercial banks and savings institutions on 

the FDIC’s “Problem List” increased from 702 to 775 

during the quarter, and total assets of “problem” institutions increased from $403 billion to $431 billion. 

Author: Ross Waldrop, Sr. Banking Analyst 

Division of Insurance and Research 

(202) 898-3951 

Chart 8 

Quarterly Change in Loan Balances 

Securitized and Sold, First Quarter 2010 

Billions of Dollars 

-$347 

-$19 -$15 -$6 -$4 -$6 

-400 

-350 

-300 

-250 

-200 

-150 

-100 

-50 

0 

Credit 

Cards 

Other 

Consumer 

Loans 

Residential 

Mortgage 

Loans 

Home 

Equity 

Lines of 

Credit 

C&I 

Loans 

Other 

Loans & 

Leases 

Number of FDIC-Insured “Problem” Institutions, 

2006–2010 

Number of Institutions 

48 50 47 50 53 61 65 76 90 117 

171 

252 

305 

416 

552 

702 

775 

0 

100 

200 

300 

400 

500 

600 

700 

800 

900 

123412341234123 4 1 

2006 2007 2008 2009 2010 

FDIC QUARTERLY 4 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

TABLE I-A. Selected Indicators, All FDIC-Insured Institutions* 2010** 2009** 2009 2008 2007 2006 2005 

Return on assets (%) ...................................................................................................... 0.54 0.16 0.08 0.03 0.81 1.28 1.28 

Return on equity (%)....................................................................................................... 4.96 1.66 0.74 0.35 7.75 12.30 12.43 

Core capital (leverage) ratio (%) .................................................................................... 8.57 8.02 8.63 7.47 7.97 8.22 8.24 

Noncurrent assets plus other real estate owned to assets (%) .................................... 3.43 2.40 3.33 1.91 0.95 0.54 0.50 

Net charge-offs to loans (%) .......................................................................................... 2.84 1.94 2.50 1.29 0.59 0.39 0.49 

Asset growth rate (%) ..................................................................................................... -1.34 1.26 -5.30 6.19 9.88 9.03 7.64 

Net interest margin (%)................................................................................................... 3.83 3.41 3.47 3.16 3.29 3.31 3.47 

Net operating income growth (%)................................................................................... 230.35 -72.79 54.79 -90.68 -27.59 8.52 11.40 

Number of institutions reporting..................................................................................... 7,932 8,247 8,012 8,305 8,534 8,680 8,833 

Commercial banks................................................................................................... 6,772 7,038 6,839 7,086 7,283 7,401 7,526 

Savings institutions ................................................................................................. 1,160 1,209 1,173 1,219 1,251 1,279 1,307 

Percentage of unprofitable institutions (%).................................................................... 18.67 22.31 30.45 24.86 12.09 7.94 6.22 

Number of problem institutions ...................................................................................... 775 305 702 252 76 50 52 

Assets of problem institutions (in billions) ..................................................................... $431 $220 $403 $159 $22 $8 $7 

Number of failed institutions........................................................................................... 41 21 140 25 3 0 0 

Number of assisted institutions...................................................................................... 0 8 8 5 0 0 0 

* Excludes insured branches of foreign banks (IBAs) 

** Through March 31, ratios annualized where appropriate. Asset growth rates are for 12 months ending March 31. 

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........................................................................................................ 

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........................................................................................... 

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*** .................................................................................. 

1st Quarter 

2010 

7,932 

2,027,141 

$13,356,625 

4,400,501 

1,887,370 

1,090,417 

417,972 

659,603 

1,187,609 

1,380,686 

716,995 

55,598 

480,932 

2,710 

7,502,616 

262,875 

7,239,742 

2,531,562 

46,263 

424,849 

3,114,209 

13,356,625 

9,198,191 

7,691,747 

1,506,444 

2,051,797 

150,540 

476,073 

1,480,025 

1,460,356 

144,109 

409,279 

63,995 

1,386,426 

11,552,854 

480,333 

6,105,396 

18,096,616 

1,414,197 

218,074,225 

4th Quarter 1st Quarter %Change 

2009 2009 09Q1-10Q1 

8,012 

2,063,107 

$13,107,980 

4,462,931 

1,916,253 

1,091,308 

451,080 

661,429 

1,220,672 

1,060,226 

422,092 

59,581 

482,524 

3,765 

7,282,168 

228,348 

7,053,820 

2,500,459 

41,226 

428,338 

3,084,137 

13,107,980 

9,226,795 

7,696,820 

1,529,974 

1,782,222 

156,989 

476,254 

1,465,719 

1,445,210 

140,249 

391,898 

58,114 

1,395,280 

11,267,422 

533,211 

5,963,073 

18,622,040 

1,817,280 

213,563,342 

8,247 -3.8 

2,114,901 -4.1 

$13,538,166 -1.3 

4,701,123 -6.4 

2,045,744 -7.7 

1,077,150 1.2 

566,680 -26.2 

674,238 -2.2 

1,432,211 -17.1 

1,046,281 32.0 

403,071 77.9 

56,137 -1.0 

500,602 -3.9 

2,481 9.2 

7,733,872 -3.0 

194,321 35.3 

7,539,551 -4.0 

2,206,200 14.7 

29,689 55.8 

415,133 2.3 

3,347,594 -7.0 

13,538,166 -1.3 

8,953,914 2.7 

7,538,993 2.0 

1,414,921 6.5 

2,417,120 -15.1 

170,929 -11.9 

606,739 -21.5 

1,389,463 6.5 

1,371,742 6.5 

158,741 -9.2 

291,904 40.2 

32,906 94.5 

1,313,451 5.6 

11,587,244 -0.3 

703,715 -31.7 

6,617,851 -7.7 

15,786,613 14.6 

1,881,015 -24.8 

206,742,719 5.5 

Full Year Full Year 1st Quarter 1st Quarter %Change 

INCOME DATA 2009 2008 %Change 2010 2009 09Q1-10Q1 

Total interest income ................................................................... $541,155 $603,300 -10.3 $138,407 $142,437 -2.8 

Total interest expense ................................................................. 145,487 245,576 -40.8 29,280 42,975 -31.9 

Net interest income .............................................................. 395,668 357,724 10.6 109,128 99,461 9.7 

Provision for loan and lease losses ............................................ 249,151 176,217 41.4 51,264 61,444 -16.6 

Total noninterest income ............................................................. 260,403 207,711 25.4 61,591 68,229 -9.7 

Total noninterest expense ........................................................... 384,868 368,313 4.5 95,288 97,514 -2.3 

Securities gains (losses) ............................................................. -1,607 -15,440 N/M 1,603 1,644 -2.5 

Applicable income taxes ............................................................. 5,619 6,294 -10.7 7,624 4,531 68.3 

Extraordinary gains, net.............................................................. -3,787 5,360 N/M 58 -31 N/M 

Total net income (includes minority interests)..................... 11,040 N/A N/A 18,203 5,813 213.1 

Bank net income............................................................ 10,239 4,532 125.9 18,010 5,550 224.5 

Net charge-offs............................................................................ 187,424 100,365 86.7 52,434 37,896 38.4 

Cash dividends ............................................................................ 47,183 51,089 -7.7 4,386 7,242 -39.4 

Retained earnings ....................................................................... -36,944 -46,557 N/M 13,624 -1,692 N/M 

Net operating income........................................................... 14,760 9,536 54.8 16,927 5,124 230.4 

*** Call Report filers only. N/A - Data Not Available; N/M - Not Meaningful. 

FDIC QUARTERLY 5 2010, VOLUME 4, NO. 2 
TABLE III-A. First Quarter 2010, All FDIC-Insured Institutions 

FIRST QUARTER 

(The way it is...) 

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

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 

7,932 21 4 1,553 4,355 745 75 304 813 62 

Commercial banks..................................... 6,772 17 4 1,548 3,890 189 59 276 742 47 

Savings institutions ................................... 1,160 4 0 5 465 556 16 28 71 15 

Total assets (in billions).................................... $13,356.6 $745.3 $3,157.3 $181.1 $4,498.0 $777.2 $94.7 $40.6 $126.5 $3,735.8 

Commercial banks..................................... 12,086.5 722.4 3,157.3 180.4 4,016.4 191.2 49.1 35.7 106.9 3,627.1 

Savings institutions ................................... 1,270.1 22.9 0.0 0.7 481.6 586.1 45.6 4.9 19.6 108.7 

Total deposits (in billions)................................. 9,198.2 269.2 2,010.3 148.8 3,430.6 512.3 78.6 30.9 105.0 2,612.4 

Commercial banks..................................... 8,294.0 255.8 2,010.3 148.2 3,101.0 89.9 38.3 27.6 89.3 2,533.6 

Savings institutions ................................... 904.2 13.4 0.0 0.6 329.6 422.4 40.3 3.3 15.7 78.8 

Bank net income (in millions) ........................... 18,010 1,071 5,842 438 2,084 1,525 331 121 276 6,321 

Commercial banks..................................... 15,841 857 5,842 436 1,644 811 245 72 251 5,683 

Savings institutions ................................... 

Performance Ratios (%) 

2,169 214 0 2 440 714 86 49 25 638 

Yield on earning assets.................................... 4.86 15.94 3.54 5.26 4.91 4.58 5.99 3.76 5.04 4.03 

Cost of funding earning assets ........................ 1.03 1.82 0.72 1.40 1.22 1.50 1.41 1.04 1.33 0.75 

Net interest margin.................................... 3.83 14.12 2.82 3.87 3.68 3.08 4.58 2.72 3.71 3.29 

Noninterest income to assets........................... 1.86 3.06 2.19 0.59 1.31 0.78 1.96 7.15 0.94 2.32 

Noninterest expense to assets......................... 2.88 4.59 2.84 2.63 2.93 1.75 2.66 7.74 3.03 2.77 

Loan and lease loss provision to assets.......... 1.55 9.31 0.86 0.41 1.39 0.74 1.43 0.18 0.29 1.29 

Net operating income to assets ....................... 0.51 0.65 0.67 0.94 0.15 0.75 1.43 1.20 0.84 0.68 

Pretax return on assets .................................... 0.78 1.03 0.98 1.12 0.28 1.20 2.22 1.67 1.07 0.99 

Return on assets............................................... 0.54 0.68 0.75 0.97 0.19 0.79 1.43 1.20 0.88 0.68 

Return on equity ............................................... 4.96 3.48 8.52 8.71 1.74 8.21 13.49 7.05 7.88 5.61 

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

Loan and lease loss provision to 

2.84 14.26 2.50 0.44 1.88 1.15 2.69 0.54 0.42 2.29 

net charge-offs .......................................... 97.77 82.78 98.22 145.20 108.27 107.13 68.40 132.13 122.54 107.13 

Efficiency ratio .................................................. 54.39 28.70 61.29 63.12 62.84 47.53 41.62 80.21 69.60 52.91 

% of unprofitable institutions............................ 18.67 19.05 0.00 7.28 25.81 13.56 13.33 16.45 9.10 8.06 

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

Condition Ratios (%) 

52.23 85.71 75.00 49.45 53.32 56.11 72.00 42.11 48.09 66.13 

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

Loss allowance to: ............................................ 

86.50 86.33 84.88 91.60 88.45 93.16 94.38 89.43 91.58 83.50 

Loans and leases ...................................... 3.50 10.29 4.18 1.55 2.61 1.49 2.98 1.77 1.40 2.99 

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

Noncurrent assets plus 

64.23 330.14 59.55 78.41 53.83 32.46 194.25 86.89 68.70 42.89 

other real estate owned to assets............. 3.43 2.67 2.64 1.66 4.00 3.14 1.27 0.69 1.54 3.87 

Equity capital ratio............................................ 10.93 15.83 8.77 11.24 10.77 9.76 10.54 16.96 11.21 12.15 

Core capital (leverage) ratio............................. 8.57 10.35 7.09 10.12 8.91 9.14 10.22 15.18 10.57 8.66 

Tier 1 risk-based capital ratio........................... 12.09 12.45 11.81 14.11 11.43 19.12 13.70 34.20 17.48 11.64 

Total risk-based capital ratio ............................ 14.74 15.30 14.95 15.24 13.66 20.14 15.46 35.09 18.63 14.81 

Net loans and leases to deposits..................... 78.71 213.46 53.01 76.69 86.97 89.24 89.28 31.80 66.28 72.54 

Net loans to total assets................................... 54.20 77.10 33.75 63.00 66.33 58.83 74.03 24.17 55.03 50.72 

Domestic deposits to total assets .................... 

Structural Changes 

57.59 32.87 30.52 82.16 74.52 65.83 81.85 73.89 83.01 60.44 

New charters ............................................. 3 0 0 0 2 0 0 0 0 1 

Institutions absorbed by mergers ............. 37 0 0 4 28 0 0 0 1 4 

Failed institutions ...................................... 

PRIOR FIRST QUARTERS 

(The way it was...) 

41 0 0 1 37 2 0 1 0 0 

Number of institutions ............................. 2009 8,247 25 5 1,524 4,680 838 80 305 745 45 

..................................... 2007 8,649 26 4 1,617 4,719 798 115 403 906 61 

..................................... 2005 8,931 28 5 1,698 4,489 971 134 459 1,079 68 

Total assets (in billions)........................... 2009 $13,538.2 $476.0 $3,203.0 $165.4 $6,002.1 $1,100.9 $73.2 $36.2 $103.5 $2,377.9 

..................................... 2007 11,982.3 407.2 2,435.7 149.0 4,757.4 1,507.4 99.4 45.7 119.5 2,461.0 

..................................... 2005 10,286.4 363.7 1,875.5 135.1 3,466.7 1,582.0 110.9 54.5 137.0 2,561.0 

Return on assets (%) ............................... 2009 0.16 -1.36 0.61 0.73 -0.18 0.54 0.08 0.30 0.92 0.48 

..................................... 2007 1.20 3.84 0.93 1.19 1.14 0.91 1.77 2.03 0.99 1.25 

..................................... 2005 1.34 3.22 0.92 1.28 1.32 1.20 1.52 1.52 1.17 1.48 

Net charge-offs to loans & leases (%) .... 2009 1.94 8.57 2.42 0.52 1.45 1.05 2.56 0.43 0.30 1.87 

..................................... 2007 0.45 3.86 0.57 0.14 0.23 0.21 1.43 0.18 0.17 0.31 

..................................... 2005 

Noncurrent assets plus 

0.47 4.39 0.76 0.13 0.22 0.10 1.49 0.22 0.21 0.18 

OREO to assets (%) ......................... 2009 2.40 2.56 2.00 1.48 2.82 3.04 0.99 0.62 1.11 1.71 

..................................... 2007 0.57 1.32 0.41 0.78 0.62 0.67 0.55 0.18 0.59 0.45 

..................................... 2005 0.50 1.26 0.54 0.71 0.49 0.41 0.52 0.30 0.56 0.42 

Equity capital ratio (%)............................. 2009 10.13 23.55 8.44 11.05 10.26 8.92 9.25 16.24 11.34 9.77 

..................................... 2007 10.58 24.50 7.67 10.87 11.32 10.15 10.25 20.27 11.26 9.75 

..................................... 2005 10.26 21.96 8.17 10.78 9.95 10.83 11.10 17.09 10.79 9.97 

* See Table IV-A (page 8) for explanations. 

FDIC QUARTERLY 6 2010, VOLUME 4, NO. 2 
Quarterly Banking Profile 

TABLE III-A. First Quarter 2010, All FDIC-Insured Institutions 

FIRST QUARTER 

(The way it is...) 

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

All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion 

to 

$10 Billion 

Greater 

than 

$10 Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

7,932 2,778 4,474 575 105 976 1,103 1,636 1,868 1,654 695 

Commercial banks........................................... 6,772 2,469 3,780 440 83 512 977 1,346 1,769 1,535 633 

Savings institutions ......................................... 1,160 309 694 135 22 464 126 290 99 119 62 

Total assets (in billions).......................................... $13,356.6 $155.4 $1,339.6 $1,478.2 $10,383.4 $2,692.2 $2,989.1 $2,977.9 $1,664.4 $786.5 $2,246.4 

Commercial banks........................................... 12,086.5 138.7 1,098.1 1,136.3 9,713.4 1,998.6 2,864.8 2,848.1 1,612.9 695.7 2,066.4 

Savings institutions ......................................... 1,270.1 16.7 241.5 342.0 669.9 693.6 124.4 129.7 51.6 90.8 180.0 

Total deposits (in billions)....................................... 9,198.2 130.3 1,099.7 1,118.2 6,850.0 1,743.7 2,112.3 2,016.0 1,196.7 614.3 1,515.2 

Commercial banks........................................... 8,294.0 117.2 911.3 859.1 6,406.5 1,262.8 2,020.5 1,919.7 1,157.6 540.7 1,392.7 

Savings institutions ......................................... 904.2 13.1 188.3 259.1 443.6 480.9 91.8 96.2 39.2 73.6 122.5 

Net income (in millions) .......................................... 18,010 198 1,427 758 15,626 3,663 2,373 3,605 2,723 1,498 4,149 

Commercial banks........................................... 15,841 155 1,185 310 14,192 2,721 2,278 3,722 2,627 1,287 3,206 

Savings institutions ......................................... 

Performance Ratios (%) 

2,169 44 242 448 1,435 942 94 -116 96 211 942 

Yield on earning assets.......................................... 4.86 5.28 5.22 5.02 4.77 5.66 4.55 3.93 5.97 4.95 4.68 

Cost of funding earning assets .............................. 1.03 1.41 1.50 1.38 0.90 1.25 0.98 0.86 0.93 1.08 1.10 

Net interest margin .......................................... 3.83 3.87 3.72 3.63 3.87 4.41 3.57 3.07 5.04 3.87 3.58 

Noninterest income to assets................................. 1.86 1.27 0.89 1.23 2.09 1.72 1.81 2.02 2.34 1.40 1.71 

Noninterest expense to assets............................... 2.88 3.72 3.10 2.82 2.85 2.80 2.73 3.03 3.41 3.18 2.49 

Loan and lease loss provision to assets................ 1.55 0.46 0.69 1.33 1.71 1.90 1.64 1.13 2.29 0.82 1.29 

Net operating income to assets ............................. 0.51 0.47 0.38 0.15 0.58 0.54 0.31 0.41 0.66 0.70 0.72 

Pretax return on assets .......................................... 0.78 0.66 0.56 0.44 0.85 0.85 0.46 0.63 0.97 0.96 1.09 

Return on assets..................................................... 0.54 0.51 0.43 0.21 0.61 0.56 0.32 0.49 0.66 0.76 0.74 

Return on equity ..................................................... 4.96 4.28 4.27 1.90 5.48 4.31 2.83 5.69 5.70 7.35 6.60 

Net charge-offs to loans and leases...................... 2.84 0.61 0.86 1.75 3.40 4.09 2.73 2.35 3.27 1.21 2.34 

Loan and lease loss provision to net charge-offs.. 97.77 123.16 118.78 116.18 95.12 83.83 105.03 99.29 103.30 102.55 105.69 

Efficiency ratio ........................................................ 54.39 77.43 71.94 60.54 51.52 48.82 55.79 63.69 48.61 64.52 50.50 

% of unprofitable institutions.................................. 18.67 19.76 17.30 22.96 24.76 15.37 34.90 16.26 12.85 11.91 34.96 

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

Condition Ratios (%) 

52.23 49.32 53.20 56.87 62.86 64.86 49.14 47.25 51.71 51.27 54.82 

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

Loss allowance to: 

86.50 91.10 91.47 90.49 85.22 86.76 83.89 86.71 87.23 90.07 87.57 

Loans and leases ............................................. 3.50 1.64 1.81 2.33 4.01 4.09 3.33 3.38 3.75 2.11 3.52 

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

Noncurrent assets plus 

64.23 62.01 49.56 50.77 67.50 101.26 50.96 56.40 60.66 54.18 69.45 

other real estate owned to assets.................... 3.43 2.31 3.37 3.69 3.42 2.44 4.16 3.22 4.79 3.19 3.02 

Equity capital ratio................................................... 10.93 11.99 10.07 10.87 11.04 12.59 11.29 8.56 11.52 10.42 11.37 

Core capital (leverage) ratio ................................... 8.57 11.54 9.53 9.47 8.26 9.39 7.93 7.09 8.96 9.36 9.80 

Tier 1 risk-based capital ratio.................................. 12.09 17.57 13.52 13.52 11.62 13.36 11.03 10.50 11.03 12.98 14.77 

Total risk-based capital ratio ................................... 14.74 18.67 14.74 14.92 14.66 15.72 14.21 13.82 13.60 14.71 16.52 

Net loans and leases to deposits............................ 78.71 71.87 80.09 84.00 77.75 84.15 77.48 68.50 93.88 82.19 74.34 

Net loans to total assets ......................................... 54.20 60.24 65.74 63.54 51.29 54.50 54.76 46.37 67.50 64.19 50.14 

Domestic deposits to total assets ........................... 

Structural Changes 

57.59 83.81 81.98 75.17 51.55 57.60 62.71 52.46 66.78 77.60 43.74 

New charters ................................................... 3 0 1 2 0 0 2 0 0 1 0 

Institutions absorbed by mergers ................... 37 17 17 2 1 4 4 4 9 6 10 

Failed institutions ............................................ 

PRIOR FIRST QUARTERS 

(The way it was...) 

41 11 22 8 0 3 14 4 5 3 12 

Number of institutions ................................... 2009 8,247 3,052 4,504 576 115 1,005 1,172 1,692 1,924 1,690 764 

............................................2007 8,649 3,597 4,397 536 119 1,087 1,222 1,818 2,007 1,742 773 

............................................2005 8,931 4,053 4,285 480 113 1,118 1,220 1,932 2,089 1,824 748 

Total assets (in billions)................................. 2009 $13,538.2 $167.2 $1,359.5 $1,512.5 $10,498.9 $2,517.7 $3,520.2 $3,176.6 $1,064.7 $909.0 $2,350.2 

............................................2007 11,982.3 189.6 1,298.2 1,420.9 9,073.6 2,204.0 2,948.8 2,778.8 863.4 662.8 2,524.5 

............................................2005 10,286.4 210.1 1,207.8 1,324.5 7,544.1 2,843.6 2,274.0 2,423.0 762.9 618.5 1,364.4 

Return on assets (%) ..................................... 2009 0.16 0.25 0.27 -0.24 0.20 0.06 0.16 0.12 0.56 -0.37 0.37 

............................................2007 1.20 0.85 1.08 1.14 1.23 1.12 1.22 1.07 1.75 1.11 1.20 

............................................2005 1.34 1.04 1.21 1.34 1.36 1.31 1.44 1.01 1.67 1.28 1.64 

Net charge-offs to loans & leases (%) .......... 2009 1.94 0.57 0.76 1.43 2.26 2.23 1.76 1.63 2.15 0.91 2.67 

............................................2007 0.45 0.15 0.13 0.25 0.55 0.81 0.22 0.31 0.63 0.19 0.57 

............................................2005 

Noncurrent assets plus 

0.47 0.12 0.15 0.27 0.57 0.71 0.22 0.32 0.58 0.20 0.63 

OREO to assets (%) ............................... 2009 2.40 1.87 2.53 2.98 2.31 1.53 2.56 2.43 2.72 2.60 2.81 

............................................2007 0.57 0.77 0.67 0.58 0.55 0.56 0.36 0.60 1.08 0.63 0.61 

............................................2005 0.50 0.74 0.54 0.48 0.49 0.52 0.32 0.51 0.78 0.59 0.52 

Equity capital ratio (%)................................... 2009 10.13 12.66 9.96 10.56 10.05 12.13 10.19 8.37 9.90 9.87 10.49 

............................................2007 10.58 13.24 10.50 11.24 10.43 12.72 10.04 9.13 10.57 10.60 10.92 

............................................2005 10.26 11.85 10.08 10.74 10.16 11.29 8.49 9.24 10.55 10.80 12.48 

* See Table IV-A (page 9) for explanations. 

FDIC QUARTERLY 7 2010, VOLUME 4, NO. 2 
TABLE IV-A. Full Year 2009, All FDIC-Insured Institutions 

FULL YEAR 

(The way it is...) 

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

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 

8,012 22 4 1,568 4,452 767 82 289 772 56 

Commercial banks....................................................... 6,839 18 4 1,563 3,974 203 66 258 708 45 

Savings institutions ..................................................... 1,173 4 0 5 478 564 16 31 64 11 

Total assets (in billions)...................................................... $13,108.0 $521.9 $3,107.1 $182.0 $4,547.3 $810.5 $96.2 $38.0 $116.2 $3,688.8 

Commercial banks....................................................... 11,843.8 498.3 3,107.1 181.3 4,059.4 203.5 50.8 32.8 99.4 3,611.2 

Savings institutions ..................................................... 1,264.2 23.6 0.0 0.7 487.9 606.9 45.4 5.2 16.8 77.6 

Total deposits (in billions)................................................... 9,226.8 270.0 2,024.5 148.9 3,463.4 528.3 78.4 28.4 96.5 2,588.4 

Commercial banks....................................................... 8,333.2 256.2 2,024.5 148.3 3,129.4 99.8 38.9 25.0 83.1 2,528.0 

Savings institutions ..................................................... 893.6 13.8 0.0 0.6 334.1 428.5 39.5 3.4 13.4 60.4 

Net income (in millions)...................................................... 10,239 -1,409 2,407 1,446 -18,692 5,206 304 274 906 19,797 

Commercial banks....................................................... 8,559 -2,204 2,407 1,442 -17,674 3,067 186 156 862 20,317 

Savings institutions ..................................................... 

Performance Ratios (annualized, %) 

1,680 795 0 4 -1,018 2,139 118 118 44 -520 

Yield on earning assets...................................................... 4.75 11.42 3.86 5.65 5.07 4.89 5.82 4.03 5.41 4.12 

Cost of funding earning assets .......................................... 1.28 1.36 0.94 1.72 1.57 1.84 1.70 1.20 1.64 1.00 

Net interest margin...................................................... 3.47 10.06 2.92 3.92 3.50 3.05 4.12 2.83 3.78 3.12 

Noninterest income to assets............................................. 1.96 5.41 1.91 0.64 1.48 1.14 2.31 7.49 0.89 2.31 

Noninterest expense to assets........................................... 2.89 5.75 2.59 2.75 3.15 1.85 2.93 8.65 3.01 2.63 

Loan and lease loss provision to assets............................ 1.87 8.38 1.48 0.58 1.92 0.98 2.67 0.22 0.40 1.60 

Net operating income to assets ......................................... 0.11 -0.36 0.27 0.79 -0.42 0.69 0.34 0.70 0.79 0.47 

Pretax return on assets ...................................................... 0.12 -0.51 0.02 0.94 -0.49 1.06 0.59 1.13 0.96 0.71 

Return on assets................................................................. 0.08 -0.28 0.08 0.82 -0.41 0.65 0.34 0.72 0.80 0.51 

Return on equity ................................................................. 0.74 -1.20 0.92 7.39 -3.99 7.38 3.23 4.10 7.14 4.70 

Net charge-offs to loans and leases.................................. 2.50 9.77 2.97 0.65 2.01 1.21 2.74 0.78 0.54 2.19 

Loan and lease loss provision to net charge-offs.............. 132.93 120.45 134.78 136.01 135.64 132.68 123.95 105.35 129.28 137.71 

Efficiency ratio .................................................................... 55.57 39.41 58.88 64.04 62.71 46.16 46.79 82.92 68.73 51.68 

% of unprofitable institutions.............................................. 30.45 31.82 75.00 11.54 42.72 22.56 17.07 19.03 11.92 23.21 

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

Condition Ratios (%) 

40.44 31.82 25.00 40.18 37.38 56.98 45.12 36.68 42.36 55.36 

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

Loss Allowance to: 

85.96 80.29 84.68 91.04 88.43 92.38 94.74 89.16 91.43 82.69 

Loans and leases ........................................................ 3.14 9.33 4.34 1.50 2.53 1.43 3.01 1.59 1.33 2.89 

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

Noncurrent assets plus 

58.27 277.71 58.58 81.70 53.87 30.96 172.33 82.91 74.94 45.21 

other real estate owned to assets............................... 3.33 2.31 2.75 1.56 3.87 3.17 1.44 0.69 1.34 3.55 

Equity capital ratio.............................................................. 11.03 24.56 8.75 10.96 10.49 9.48 11.16 17.72 11.27 11.95 

Core capital (leverage) ratio............................................... 8.63 19.60 6.98 9.95 8.70 8.92 10.46 15.62 10.65 8.22 

Tier 1 risk-based capital ratio............................................. 11.66 14.24 11.28 13.54 11.00 18.57 14.13 35.79 17.44 10.77 

Total risk-based capital ratio .............................................. 14.31 16.50 14.35 14.66 13.22 19.55 15.91 36.63 18.58 14.13 

Net loans and leases to deposits....................................... 76.45 120.53 51.23 78.08 87.91 90.65 93.32 33.33 66.95 73.57 

Net loans to total assets..................................................... 53.81 62.36 33.38 63.86 66.95 59.09 76.04 24.90 55.57 51.62 

Domestic deposits to total assets ...................................... 

Structural Changes 

58.72 46.24 30.96 81.80 74.26 65.11 80.38 74.24 83.00 60.68 

New charters ............................................................... 31 0 0 1 7 1 0 19 1 2 

Institutions absorbed by mergers ............................... 179 1 0 24 137 4 0 1 7 5 

Failed institutions ........................................................ 

PRIOR FULL YEARS 

(The way it was...) 

140 0 0 4 123 8 0 0 5 0 

Number of Institutions ................................................2008 8,305 26 5 1,559 4,753 839 91 279 709 44 

........................................................2006 8,680 26 4 1,634 4,713 817 123 411 895 57 

........................................................2004 8,976 34 5 1,731 4,423 990 132 466 1,120 75 

Total assets (in billions)..............................................2008 $13,841.2 $513.0 $3,410.1 $168.8 $5,461.2 $997.1 $122.2 $34.4 $94.8 $3,039.6 

........................................................2006 11,861.9 408.4 2,337.2 149.2 4,905.0 1,445.0 109.9 42.2 119.6 2,345.4 

........................................................2004 10,107.4 383.0 1,881.3 138.7 3,301.4 1,505.0 104.1 52.0 143.3 2,598.4 

Return on assets (%) ..................................................2008 0.03 1.70 0.25 1.00 -0.13 -0.48 -0.01 1.43 0.82 -0.09 

........................................................2006 1.28 4.19 1.01 1.23 1.28 0.94 1.75 1.54 1.04 1.26 

........................................................2004 1.28 4.03 0.76 1.22 1.29 1.17 1.66 1.68 1.10 1.32 

Net charge-offs to loans & leases (%) .......................2008 1.29 5.94 1.43 0.41 1.14 0.86 1.74 0.35 0.35 0.74 

........................................................2006 0.39 3.48 0.48 0.17 0.22 0.15 1.40 0.42 0.20 0.22 

........................................................2004 

Noncurrent assets plus 

0.56 4.66 0.91 0.22 0.30 0.12 1.57 0.59 0.29 0.25 

OREO to assets (%) ............................................2008 1.91 2.08 1.59 1.17 2.34 2.55 1.31 0.35 1.05 1.35 

........................................................2006 0.54 1.37 0.40 0.67 0.56 0.56 0.85 0.20 0.56 0.46 

........................................................2004 0.53 1.50 0.57 0.68 0.51 0.43 0.53 0.31 0.59 0.45 

Equity capital ratio (%)................................................2008 9.33 20.47 7.01 10.99 10.04 7.45 9.85 18.63 11.28 9.11 

........................................................2006 10.52 22.88 7.75 10.73 11.16 9.91 14.16 21.12 10.97 9.78 

........................................................2004 10.28 20.54 8.05 10.78 10.10 10.53 11.36 17.47 10.79 10.23 

*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. 

FDIC QUARTERLY 8 2010, VOLUME 4, NO. 2 
Quarterly Banking Profile 

TABLE IV-A. Full Year 2009, All FDIC-Insured Institutions 

FULL YEAR 

(The way it is...) 

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

All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less than 

$100 Million 

$100 Million 

to 

$1 Billion 

$1 Billion 

to 

$10 Billion 

Greater 

than 

$10 Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

8,012 2,847 4,493 565 107 986 1,121 1,647 1,879 1,660 719 

Commercial banks................................... 6,839 2,526 3,799 429 85 518 992 1,355 1,780 1,540 654 

Savings institutions ................................. 1,173 321 694 136 22 468 129 292 99 120 65 

Total assets (in billions).................................. $13,108.0 $158.9 $1,354.7 $1,461.8 $10,132.7 $2,587.8 $3,427.5 $2,934.5 $1,145.7 $784.9 $2,227.6 

Commercial banks................................... 11,843.8 141.4 1,111.7 1,119.6 9,471.1 1,894.9 3,303.2 2,803.4 1,094.8 695.6 2,051.8 

Savings institutions ................................. 1,264.2 17.5 243.0 342.2 661.5 692.9 124.3 131.0 50.9 89.3 175.8 

Total deposits (in billions)............................... 9,226.8 132.5 1,106.4 1,107.9 6,880.0 1,749.4 2,464.5 2,020.1 867.7 606.3 1,518.8 

Commercial banks................................... 8,333.2 119.0 918.2 850.6 6,445.4 1,272.5 2,373.1 1,922.7 829.2 535.0 1,400.6 

Savings institutions ................................. 893.6 13.6 188.2 257.3 434.5 476.9 91.4 97.5 38.5 71.3 118.1 

Net income (in millions).................................. 10,239 -48 -1,110 -4,989 16,386 -1,269 -333 5,616 8,716 2,819 -5,310 

Commercial banks................................... 8,559 17 -1,019 -4,570 14,131 -1,915 53 6,419 8,718 2,472 -7,189 

Savings institutions ................................. 

Performance Ratios (annualized, %) 

1,680 -65 -92 -419 2,255 646 -386 -803 -2 346 1,878 

Yield on earning assets.................................. 4.75 5.59 5.54 5.18 4.56 5.17 4.42 4.13 5.55 5.11 5.05 

Cost of funding earning assets ...................... 1.28 1.75 1.90 1.75 1.11 1.46 1.22 1.12 1.08 1.36 1.43 

Net interest margin.................................. 3.47 3.84 3.64 3.43 3.45 3.71 3.19 3.01 4.46 3.75 3.62 

Noninterest income to assets......................... 1.96 0.99 1.02 1.39 2.17 1.93 1.87 2.11 3.10 1.60 1.48 

Noninterest expense to assets....................... 2.89 3.76 3.29 3.09 2.80 2.84 2.73 2.87 3.88 3.32 2.61 

Loan and lease loss provision to assets........ 1.87 0.72 1.14 1.69 2.01 1.92 1.90 1.63 1.90 1.24 2.32 

Net operating income to assets ..................... 0.11 -0.05 -0.10 -0.32 0.20 0.24 -0.08 0.14 0.79 0.32 -0.19 

Pretax return on assets .................................. 0.12 0.03 -0.05 -0.33 0.20 -0.05 0.00 0.28 1.18 0.48 -0.38 

Return on assets............................................. 0.08 -0.03 -0.08 -0.35 0.16 -0.05 -0.01 0.19 0.77 0.36 -0.24 

Return on equity ............................................. 0.74 -0.25 -0.83 -3.23 1.52 -0.39 -0.09 2.23 7.43 3.59 -2.32 

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

Loan and lease loss provision to net 

2.50 0.88 1.23 1.90 2.84 2.75 2.28 2.35 2.40 1.34 3.33 

charge-offs .............................................. 132.93 130.74 133.50 132.05 133.01 129.33 141.21 137.91 117.96 139.38 127.71 

Efficiency ratio ................................................ 55.57 82.22 73.46 63.23 52.31 52.92 55.43 57.49 54.03 63.23 54.85 

% of unprofitable institutions.......................... 30.45 28.42 30.49 38.05 42.99 27.89 55.93 26.41 20.17 19.16 56.47 

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

Condition Ratios (%) 

40.44 39.37 41.00 42.12 36.45 55.98 29.17 39.89 40.18 43.25 32.13 

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

Loss Allowance to: 

85.96 90.76 91.32 90.23 84.55 85.95 83.26 86.66 86.80 90.18 87.27 

Loans and leases ................................... 3.14 1.62 1.78 2.20 3.57 3.40 2.99 3.32 2.70 2.06 3.60 

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

Noncurrent assets plus 

58.27 63.91 50.11 49.29 60.31 84.30 48.26 56.45 46.46 55.53 66.37 

other real estate owned to assets.......... 3.33 2.24 3.28 3.57 3.31 2.31 4.04 3.20 4.28 3.03 3.19 

Equity capital ratio......................................... 11.03 11.98 9.88 10.74 11.20 13.22 11.67 8.60 10.71 10.30 11.11 

Core capital (leverage) ratio.......................... 8.63 11.55 9.35 9.27 8.39 10.15 7.93 7.05 9.22 9.28 9.53 

Tier 1 risk-based capital ratio........................ 11.66 17.34 13.05 12.82 11.23 13.47 10.42 10.06 10.64 12.65 13.95 

Total risk-based capital ratio ......................... 14.31 18.43 14.26 14.18 14.28 15.81 13.73 13.33 12.81 14.39 15.69 

Net loans and leases to deposits.................. 76.45 73.47 81.86 84.84 74.29 77.11 79.67 68.61 84.17 84.05 73.45 

Net loans to total assets................................ 53.81 61.29 66.85 64.30 50.44 52.13 57.29 47.23 63.75 64.93 50.07 

Domestic deposits to total assets ................. 

Structural Changes 

58.72 83.43 81.61 75.15 52.90 59.55 64.28 53.04 70.70 76.52 44.24 

New charters .......................................... 31 25 3 1 2 3 11 7 0 6 4 

Institutions absorbed by mergers .......... 179 78 81 11 9 27 25 36 48 29 14 

Failed institutions ................................... 

PRIOR FULL YEARS 

(The way it was...) 

140 25 88 22 5 6 45 30 15 9 35 

Number of Institutions ........................... 2008 8,305 3,132 4,498 561 114 1,015 1,180 1,705 1,935 1,700 770 

................................... 2006 8,680 3,632 4,399 530 119 1,092 1,218 1,826 2,018 1,753 773 

................................... 2004 8,976 4,093 4,286 480 117 1,129 1,219 1,951 2,094 1,834 749 

Total assets (in billions)......................... 2008 $13,841.2 $170.9 $1,354.7 $1,489.8 $10,825.8 $2,594.2 $3,745.9 $3,264.3 $1,057.2 $780.9 $2,398.7 

................................... 2006 11,861.9 189.9 1,290.0 1,397.9 8,984.0 2,216.1 2,911.4 2,746.2 859.8 652.3 2,476.1 

................................... 2004 10,107.4 211.7 1,199.6 1,318.5 7,377.6 2,856.4 2,177.1 2,387.6 768.2 603.1 1,315.1 

Return on assets (%) ............................. 2008 0.03 0.25 0.24 -0.30 0.05 0.25 -0.14 0.29 0.57 0.51 -0.63 

................................... 2006 1.28 0.92 1.16 1.22 1.31 1.27 1.31 1.10 1.76 1.23 1.29 

................................... 2004 1.28 1.00 1.19 1.45 1.27 1.37 1.34 0.88 1.55 1.26 1.60 

Net charge-offs to loans & leases (%) .. 2008 1.29 0.46 0.67 1.10 1.44 1.44 1.01 1.24 1.60 0.68 1.74 

................................... 2006 0.39 0.18 0.16 0.20 0.47 0.72 0.19 0.28 0.55 0.21 0.43 

................................... 2004 

Noncurrent assets plus 

0.56 0.28 0.27 0.39 0.65 0.87 0.31 0.41 0.74 0.27 0.60 

OREO to assets (%) ....................... 2008 1.91 1.66 2.16 2.46 1.80 1.20 2.02 1.93 2.28 1.80 2.33 

................................... 2006 0.54 0.73 0.59 0.52 0.53 0.52 0.33 0.57 1.05 0.62 0.56 

................................... 2004 0.53 0.74 0.56 0.51 0.53 0.58 0.35 0.55 0.81 0.61 0.51 

Equity capital ratio (%)........................... 2008 9.33 12.87 10.00 10.65 9.01 11.14 9.56 8.07 9.49 9.95 8.45 

................................... 2006 10.52 13.01 10.39 10.97 10.42 12.47 10.05 9.07 10.64 10.42 10.92 

................................... 2004 10.28 11.82 10.19 10.87 10.15 11.20 8.74 9.36 10.62 10.78 12.10 

* 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 

FDIC QUARTERLY 9 2010, VOLUME 4, NO. 2 
TABLE V-A. Loan Performance, All FDIC-Insured Institutions 

March 31, 2010 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 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate ....................................... 2.23 3.66 2.93 1.48 1.83 1.94 1.13 1.44 1.92 2.79 

Construction and development................................. 2.81 0.00 3.82 1.67 2.76 4.21 1.81 1.49 2.27 2.84 

Nonfarm nonresidential............................................. 1.44 0.00 0.81 1.31 1.42 1.78 2.33 0.95 1.58 1.55 

Multifamily residential real estate ............................. 1.28 0.00 0.62 0.84 1.46 1.36 5.09 1.86 1.28 1.38 

Home equity loans..................................................... 1.24 1.43 1.63 0.59 0.85 1.16 0.89 0.58 0.92 1.39 

Other 1-4 family residential....................................... 3.07 4.47 4.41 2.01 2.37 1.97 1.25 1.82 2.18 3.96 

Commercial and industrial loans ..................................... 0.94 4.08 0.36 1.77 1.05 1.23 1.45 1.37 1.72 0.71 

Loans to individuals.......................................................... 2.29 2.69 2.06 1.89 1.79 1.52 1.91 1.90 1.87 2.18 

Credit card loans ....................................................... 2.61 2.66 2.72 1.62 2.08 2.93 1.16 2.43 1.27 2.77 

Other loans to individuals ......................................... 1.95 3.33 1.83 1.90 1.73 1.11 2.27 1.84 1.88 2.06 

All other loans and leases (including farm) ..................... 0.64 0.01 0.25 1.19 0.78 0.19 0.48 1.23 0.64 0.91 

Total loans and leases...................................................... 

Percent of Loans Noncurrent** 

1.92 2.68 1.91 1.48 1.63 1.89 1.67 1.48 1.80 2.18 

All real estate loans .......................................................... 7.55 5.67 10.69 2.39 6.08 4.86 1.38 2.45 2.35 10.39 

Construction and development................................. 16.82 0.00 17.91 10.82 17.16 16.02 10.47 5.43 6.90 16.37 

Nonfarm nonresidential............................................. 4.17 0.00 4.81 2.61 3.87 3.18 2.91 2.31 2.52 5.70 

Multifamily residential real estate ............................. 4.62 0.00 4.18 3.27 4.41 3.93 0.19 2.75 3.95 6.28 

Home equity loans..................................................... 1.72 6.07 1.86 0.68 1.15 1.99 0.83 1.23 0.88 2.16 

Other 1-4 family residential....................................... 10.17 5.94 17.91 1.60 5.70 4.96 1.39 2.23 1.88 15.17 

Commercial and industrial loans ..................................... 3.11 3.99 5.72 2.44 2.54 1.71 0.93 1.33 2.10 2.60 

Loans to individuals.......................................................... 2.27 3.18 2.37 0.76 1.37 1.20 1.63 0.91 0.70 1.26 

Credit card loans ....................................................... 3.09 3.14 3.10 0.63 2.98 3.37 1.43 1.92 0.90 3.19 

Other loans to individuals ......................................... 1.37 3.94 2.11 0.76 1.04 0.59 1.72 0.80 0.70 0.86 

All other loans and leases (including farm) ..................... 1.65 0.02 2.35 0.93 1.66 0.25 1.11 1.38 0.80 1.32 

Total loans and leases...................................................... 

Percent of Loans Charged-off (net, YTD) 

5.45 3.12 7.02 1.98 4.85 4.60 1.52 2.04 2.04 6.98 

All real estate loans .......................................................... 2.04 3.54 2.73 0.35 1.87 1.04 1.98 0.33 0.33 2.60 

Construction and development................................. 5.32 0.00 4.98 2.14 5.63 5.99 7.58 0.19 1.75 4.47 

Nonfarm nonresidential............................................. 0.97 0.00 0.90 0.30 1.01 0.59 0.11 0.17 0.23 0.97 

Multifamily residential real estate ............................. 1.10 0.00 0.94 0.59 1.26 1.01 0.00 1.47 0.34 0.79 

Home equity loans..................................................... 3.12 3.34 2.98 0.55 1.47 3.46 2.40 0.08 0.20 4.65 

Other 1-4 family residential....................................... 1.76 3.83 3.44 0.24 1.37 0.78 1.31 0.42 0.24 2.11 

Commercial and industrial loans ..................................... 1.98 16.75 2.03 1.00 1.72 0.93 6.40 0.94 0.97 1.15 

Loans to individuals.......................................................... 7.41 14.96 3.45 0.53 2.73 3.63 2.62 1.11 0.62 3.45 

Credit card loans ....................................................... 13.13 15.01 6.69 3.03 8.42 11.36 5.45 5.66 2.34 10.31 

Other loans to individuals ......................................... 2.41 14.26 2.27 0.44 1.61 1.33 1.42 0.54 0.59 1.94 

All other loans and leases (including farm) ..................... 0.92 0.01 1.11 0.00 1.35 0.40 2.20 0.82 0.28 0.58 

Total loans and leases...................................................... 

Loans Outstanding (in billions) 

2.84 14.26 2.50 0.44 1.88 1.15 2.67 0.54 0.42 2.29 

All real estate loans .......................................................... $4,400.5 $0.1 $543.0 $68.6 $2,110.6 $431.2 $18.4 $6.8 $51.1 $1,170.6 

Construction and development................................. 418.0 0.0 9.0 4.4 308.9 8.4 0.5 0.6 3.4 82.8 

Nonfarm nonresidential............................................. 1,090.4 0.0 31.5 19.7 799.9 25.7 0.7 2.3 12.5 198.1 

Multifamily residential real estate ............................. 214.9 0.0 41.3 1.5 128.7 8.8 0.1 0.2 1.1 33.3 

Home equity loans..................................................... 659.6 0.0 134.2 1.5 223.4 26.4 9.6 0.2 2.2 262.0 

Other 1-4 family residential....................................... 1,887.4 0.1 277.6 18.1 607.1 361.1 7.4 3.2 28.3 584.4 

Commercial and industrial loans ..................................... 1,187.6 33.4 196.0 15.2 568.3 9.2 4.0 1.3 7.0 353.2 

Loans to individuals.......................................................... 1,380.7 585.6 208.5 6.0 231.3 20.8 49.8 1.3 7.4 269.9 

Credit card loans ....................................................... 717.0 556.6 53.6 0.1 39.3 4.6 16.2 0.1 0.1 46.3 

Other loans to individuals ......................................... 663.7 29.0 154.9 5.9 192.0 16.2 33.5 1.2 7.3 223.6 

All other loans and leases (including farm) ..................... 536.5 21.3 165.7 26.1 154.2 3.1 0.7 0.6 5.1 159.7 

Total loans and leases (plus unearned income).............. 

Memo: Other Real Estate Owned (in millions) 

7,505.3 640.5 1,113.2 115.9 3,064.4 464.2 72.9 10.0 70.6 1,953.5 

All other real estate owned............................................... 46,263.3 -28.2 3,127.0 699.7 30,928.4 3,005.4 40.0 65.0 489.1 7,937.0 

Construction and development................................. 17,621.6 0.0 29.0 242.0 15,492.6 410.6 17.5 23.1 120.8 1,286.0 

Nonfarm nonresidential............................................. 8,044.8 0.0 160.0 206.6 6,571.7 168.6 5.4 16.5 134.4 781.5 

Multifamily residential real estate ............................. 2,655.8 0.0 784.0 33.9 1,204.1 29.9 0.3 3.3 24.0 576.4 

1-4 family residential ................................................. 14,552.7 0.1 1,219.0 163.7 6,697.4 2,070.8 16.7 20.1 195.9 4,169.0 

Farmland.................................................................... 245.7 0.0 0.0 52.1 169.4 1.6 0.1 1.9 13.6 7.0 

GNMA properties....................................................... 2,996.4 0.0 750.0 1.6 782.8 344.6 0.0 0.0 0.4 1,117.0 

* See Table IV-A (page 8) for explanations. 

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

FDIC QUARTERLY 10 2010, VOLUME 4, NO. 2 
Quarterly Banking Profile 

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

March 31, 2010 All Insured 

Institutions 

Asset Size Distribution Geographic Regions* 

Less than 

$100 

Million 

$100 

Million to 

$1 Billion 

$1 Billion 

to 

$10 Billion 

Greater 

than 

$10 Billion New York Atlanta Chicago 

Kansas 

City Dallas 

San 

Francisco 

Percent of Loans 30-89 Days Past Due 

All loans secured by real estate .............................. 2.23 1.96 1.77 1.63 2.49 1.82 2.52 2.12 2.54 1.92 2.25 

Construction and development........................ 2.81 2.65 2.64 2.72 2.92 3.52 2.18 2.70 3.66 2.67 3.07 

Nonfarm nonresidential.................................... 1.44 1.73 1.57 1.29 1.43 1.58 1.52 1.43 1.58 1.26 1.08 

Multifamily residential real estate .................... 1.28 1.90 1.36 1.45 1.20 1.29 1.33 1.22 1.80 1.17 1.08 

Home equity loans............................................ 1.24 1.20 0.85 0.80 1.30 0.71 1.51 1.24 1.21 0.92 1.27 

Other 1-4 family residential.............................. 3.07 2.27 1.94 1.81 3.49 2.00 3.73 3.06 3.59 2.53 3.31 

Commercial and industrial loans ............................ 0.94 1.89 1.49 1.12 0.83 1.56 0.84 0.76 1.07 1.01 0.59 

Loans to individuals................................................. 2.29 2.29 1.77 2.04 2.32 2.58 2.21 1.68 2.70 1.43 2.10 

Credit card loans .............................................. 2.61 2.42 2.31 2.29 2.62 2.65 2.50 2.32 3.02 0.99 2.30 

Other loans to individuals ................................ 1.95 2.29 1.73 1.94 1.96 2.33 2.05 1.50 2.21 1.65 1.97 

All other loans and leases (including farm) ............ 0.64 1.19 0.92 0.75 0.59 0.55 0.43 0.71 1.17 0.77 0.23 

Total loans and leases............................................. 

Percent of Loans Noncurrent** 

1.92 1.89 1.70 1.56 2.02 1.94 2.08 1.70 2.22 1.67 1.74 

All real estate loans ................................................. 7.55 3.07 4.15 5.51 8.97 5.00 9.17 8.42 9.30 4.98 6.59 

Construction and development........................ 16.82 10.21 13.05 16.72 18.59 18.80 16.33 17.11 16.87 10.81 23.68 

Nonfarm nonresidential.................................... 4.17 3.15 3.17 3.57 5.04 3.87 4.57 4.39 4.84 2.69 4.21 

Multifamily residential real estate .................... 4.62 2.91 3.37 4.16 5.08 3.32 7.14 4.48 5.03 3.98 4.49 

Home equity loans............................................ 1.72 1.38 1.18 1.38 1.79 0.88 2.10 1.75 2.27 1.02 0.88 

Other 1-4 family residential.............................. 10.17 2.23 2.75 4.21 12.58 4.75 12.92 13.40 14.14 5.58 7.66 

Commercial and industrial loans ............................ 3.11 2.62 2.39 2.44 3.30 3.21 2.36 2.90 2.92 1.70 5.00 

Loans to individuals................................................. 2.27 1.10 0.81 1.39 2.37 3.04 1.62 1.45 2.39 0.83 2.30 

Credit card loans .............................................. 3.09 1.91 1.50 2.13 3.13 3.37 2.93 3.00 3.04 1.22 2.62 

Other loans to individuals ................................ 1.37 1.09 0.76 1.10 1.45 1.80 0.87 1.01 1.39 0.63 2.11 

All other loans and leases (including farm) ............ 1.65 0.98 1.12 1.31 1.74 1.28 0.99 2.00 1.20 1.42 2.74 

Total loans and leases............................................. 

Percent of Loans Charged-off (net, YTD) 

5.45 2.65 3.64 4.59 5.94 4.03 6.52 5.99 6.18 3.90 5.07 

All real estate loans ................................................. 2.04 0.51 0.79 1.72 2.46 1.10 2.75 2.25 2.14 1.21 2.17 

Construction and development........................ 5.32 2.29 2.61 6.08 6.16 5.41 5.24 6.42 4.23 3.23 8.00 

Nonfarm nonresidential.................................... 0.97 0.44 0.47 1.01 1.22 0.90 1.07 1.12 0.67 0.56 1.34 

Multifamily residential real estate .................... 1.10 0.59 0.58 1.25 1.19 0.81 1.05 1.20 0.88 0.81 1.69 

Home equity loans............................................ 3.12 0.48 0.66 1.07 3.48 0.83 4.73 2.22 4.06 1.64 2.69 

Other 1-4 family residential.............................. 1.76 0.32 0.56 0.88 2.14 0.69 2.27 2.30 1.98 0.87 2.02 

Commercial and industrial loans ............................ 1.98 1.09 1.17 1.49 2.17 3.14 1.53 2.26 1.78 0.99 1.83 

Loans to individuals................................................. 7.41 0.70 1.48 3.10 7.98 12.28 5.28 3.00 10.28 2.03 4.03 

Credit card loans .............................................. 13.13 4.88 7.80 8.94 13.30 14.71 12.65 8.53 18.39 4.58 6.58 

Other loans to individuals ................................ 2.41 0.64 1.04 1.14 2.66 5.31 1.90 1.45 2.16 0.93 2.47 

All other loans and leases (including farm) ............ 0.92 0.00 0.46 0.53 1.00 0.60 0.37 2.28 0.71 0.64 0.47 

Total loans and leases............................................. 

Loans Outstanding (in billions) 

2.84 0.61 0.86 1.75 3.40 4.09 2.73 2.35 3.27 1.21 2.34 

All real estate loans ................................................. $4,400.5 $65.9 $704.1 $711.6 $2,918.9 $833.7 $1,081.6 $868.4 $645.9 $359.3 $611.6 

Construction and development........................ 418.0 5.6 90.9 100.7 220.8 57.7 133.0 70.3 55.9 59.4 41.8 

Nonfarm nonresidential.................................... 1,090.4 19.8 269.5 278.0 523.0 221.9 247.7 196.0 153.7 125.0 146.2 

Multifamily residential real estate .................... 214.9 1.9 32.2 41.8 139.1 57.4 34.7 62.3 18.1 9.3 33.1 

Home equity loans............................................ 659.6 2.2 38.7 50.0 568.7 86.0 193.6 178.1 117.3 24.5 60.1 

Other 1-4 family residential.............................. 1,887.4 27.8 239.7 228.4 1,391.5 405.2 456.4 345.3 277.0 129.3 274.2 

Commercial and industrial loans ............................ 1,187.6 12.5 112.8 141.2 921.1 182.1 275.7 253.4 175.7 90.4 210.3 

Loans to individuals................................................. 1,380.7 6.7 42.1 76.1 1,255.8 433.2 232.8 192.9 235.9 44.1 241.8 

Credit card loans .............................................. 717.0 0.1 2.5 21.5 692.9 340.9 84.6 43.0 143.6 14.6 90.3 

Other loans to individuals ................................ 663.7 6.6 39.6 54.5 563.0 92.4 148.2 149.8 92.3 29.4 151.5 

All other loans and leases (including farm) ............ 536.5 10.1 38.4 33.8 454.3 81.2 103.1 114.6 109.8 22.2 105.6 

Total loans and leases (plus unearned income)..... 

Memo: Other Real Estate Owned (in millions) 

7,505.3 95.2 897.3 962.7 5,550.1 1,530.3 1,693.2 1,429.3 1,167.3 516.0 1,169.3 

All other real estate owned...................................... 46,263.3 1,061.4 12,295.9 10,232.8 22,673.2 3,693.0 13,639.5 9,797.5 7,560.0 4,862.8 6,710.5 

Construction and development........................ 17,621.6 367.6 6,113.7 5,568.0 5,572.3 1,064.1 5,840.7 2,684.4 2,625.3 2,418.3 2,988.8 

Nonfarm nonresidential.................................... 8,044.8 294.4 2,823.0 2,065.5 2,862.0 828.5 1,899.7 1,828.0 1,302.3 1,055.7 1,130.5 

Multifamily residential real estate .................... 2,655.8 35.3 429.4 402.1 1,789.1 250.5 471.7 368.7 494.0 143.4 927.6 

1-4 family residential ........................................ 14,552.7 341.5 2,778.3 1,972.9 9,460.0 1,357.6 5,186.8 3,454.2 1,977.6 1,137.5 1,439.0 

Farmland........................................................... 245.7 21.1 150.2 52.9 21.4 15.9 35.3 31.7 45.8 90.1 26.8 

GNMA properties.............................................. 2,996.4 1.7 7.8 175.3 2,811.5 167.4 220.5 1,426.6 1,117.9 17.9 46.1 

* See Table IV-A (page 9) for explanations. 

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

FDIC QUARTERLY 11 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

TABLE VI-A. Derivatives, All FDIC-Insured Commercial Banks and State-Chartered Savings Banks 

(dollar figures in millions; 

notional amounts unless otherwise indicated) 

% Change 

1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 09Q1- 

2010 2009 2009 2009 2009 10Q1 

Asset Size Distribution 

Less $100 $1 Billion 

than $100 Million to to $10 Greater than 

Million $1 Billion Billion $10 Billion 

ALL DERIVATIVE HOLDERS 

Number of institutions reporting derivatives................. 1,146 1,130 1,175 1,214 1,170 -2.1 86 677 306 77 

Total assets of institutions reporting derivatives .......... $10,766,357 $10,568,276 $10,546,529 $10,593,193 $10,671,375 0.9 $6,228 $291,379 $897,508 $9,571,242 

Total deposits of institutions reporting derivatives....... 7,281,570 7,341,195 7,183,905 7,097,228 6,983,343 4.3 5,180 235,964 682,198 6,358,227 

Total derivatives............................................................. 

Derivative Contracts by Underlying Risk Exposure 

218,074,225 213,563,342 210,008,291 208,656,901 206,742,719 5.5 223 18,120 98,455 217,957,427 

Interest rate.................................................................... 181,997,144 179,565,445 176,204,154 175,648,997 172,763,155 5.3 212 17,697 94,572 181,884,663 

Foreign exchange*......................................................... 19,201,849 17,297,929 17,709,286 16,640,233 16,266,432 18.0 1 84 2,678 19,199,087 

Equity ............................................................................. 1,570,950 1,685,227 2,182,431 2,041,638 2,174,365 -27.8 11 161 878 1,569,900 

Commodity & other (excluding credit derivatives)........ 939,818 978,922 926,295 909,250 938,063 0.2 0 116 134 939,568 

Credit.............................................................................. 14,364,464 14,035,819 12,986,125 13,416,784 14,600,703 -1.6 0 62 193 14,364,209 

Total................................................................................ 

Derivative Contracts by Transaction Type 

218,074,225 213,563,342 210,008,291 208,656,901 206,742,719 5.5 223 18,120 98,455 217,957,427 

Swaps ............................................................................ 136,341,268 142,022,036 139,477,065 137,993,983 135,835,552 0.4 30 9,792 79,969 136,251,478 

Futures & forwards ........................................................ 34,096,746 26,495,662 24,944,757 25,885,385 24,744,597 37.8 81 3,552 7,800 34,085,313 

Purchased options......................................................... 15,757,712 15,151,690 15,424,802 15,020,266 15,053,701 4.7 10 760 3,202 15,753,740 

Written options............................................................... 15,908,657 15,113,322 15,063,184 14,859,851 15,106,838 5.3 102 3,900 7,053 15,897,602 

Total................................................................................ 

Fair Value of Derivative Contracts 

202,104,384 198,782,710 194,909,809 193,759,485 190,740,687 6.0 223 18,004 98,024 201,988,133 

Interest rate contracts.................................................... 94,822 96,997 122,592 123,696 134,105 -29.3 1 -8 89 94,740 

Foreign exchange contracts.......................................... 1,431 9,671 -5,037 -10,568 -10,459 N/M 0 0 -2 1,433 

Equity contracts............................................................. -856 1,236 -253 670 3,103 N/M 0 3 6 -865 

Commodity & other (excluding credit derivatives)........ 976 1,623 3,615 1,156 4,158 -76.5 0 8 2 966 

Credit derivatives as guarantor..................................... -121,491 -160,980 -234,357 -474,635 -959,080 N/M 0 0 2 -121,493 

Credit derivatives as beneficiary................................... 

Derivative Contracts by Maturity** 

141,273 188,641 266,208 523,242 1,031,185 -86.3 0 0 -1 141,275 

Interest rate contracts ............................. < 1 year 84,018,163 80,979,650 78,128,617 74,833,456 70,402,282 19.3 53 3,410 18,939 83,995,761 

.......................................... 1-5 years 33,334,943 33,638,337 33,977,577 35,928,119 37,299,179 -10.6 13 7,280 27,991 33,299,659 

.......................................... > 5 years 24,119,801 26,141,316 26,620,986 28,371,872 30,000,656 -19.6 19 2,444 38,161 24,079,177 

Foreign exchange contracts ................... < 1 year 11,091,990 10,416,223 9,674,124 9,490,043 9,234,171 20.1 0 27 1,527 11,090,436 

.......................................... 1-5 years 2,440,019 2,448,723 2,405,751 2,293,453 2,162,670 12.8 0 2 61 2,439,956 

.......................................... > 5 years 1,328,830 1,343,778 1,325,262 1,193,852 1,056,327 25.8 0 0 0 1,328,830 

Equity contracts....................................... < 1 year 320,739 312,066 358,462 343,416 348,774 -8.0 3 29 130 320,577 

.......................................... 1-5 years 220,441 227,854 301,995 291,182 286,171 -23.0 1 67 364 220,010 

.......................................... > 5 years 83,990 81,647 82,835 75,716 82,844 1.4 0 0 1 83,989 

Commodity & other contracts ................. < 1 year 287,748 261,429 237,860 252,705 279,748 2.9 0 85 53 287,610 

.......................................... 1-5 years 177,250 223,654 233,829 211,329 206,173 -14.0 0 17 41 177,193 

.......................................... > 5 years 

Risk-Based Capital: Credit Equivalent Amount 

31,220 34,250 43,612 45,443 41,546 -24.9 0 0 0 31,220 

Total current exposure to tier 1 capital (%) ................... 41.2 45.9 57.3 66.8 86.2 0.1 0.4 1.3 46.8 

Total potential future exposure to tier 1 capital (%)...... 

Total exposure (credit equivalent amount) 

88.9 83.3 83.6 80.6 89.2 0.1 0.3 0.9 101.2 

to tier 1 capital (%).................................................. 130.2 129.2 140.9 147.3 175.3 0.2 0.7 2.2 148.0 

Credit losses on derivatives***.................................. 

HELD FOR TRADING 

103.6 767.1 605.3 384.7 217.1 -52.3 0.0 3.5 0.4 99.7 

Number of institutions reporting derivatives................. 195 196 207 204 199 -2.0 10 64 67 54 

Total assets of institutions reporting derivatives .......... 8,950,711 8,873,819 8,911,543 8,911,914 9,016,071 -0.7 756 27,257 279,526 8,643,172 

Total deposits of institutions reporting derivatives....... 

Derivative Contracts by Underlying Risk Exposure 

6,096,651 6,145,431 6,014,547 5,990,076 5,886,779 3.6 614 21,671 211,387 5,862,979 

Interest rate.................................................................... 180,117,242 177,717,171 174,199,745 173,339,084 170,603,660 5.6 25 884 50,687 180,065,647 

Foreign exchange.......................................................... 17,462,255 16,437,639 15,510,657 15,051,809 14,759,077 18.3 0 0 1,989 17,460,266 

Equity ............................................................................. 1,563,707 1,677,767 2,175,796 2,034,228 2,162,149 -27.7 0 1 234 1,563,472 

Commodity & other........................................................ 932,983 974,849 924,183 906,325 935,634 -0.3 0 0 44 932,940 

Total................................................................................ 

Trading Revenues: Cash & Derivative Instruments 

200,076,187 196,807,425 192,810,380 191,331,447 188,460,521 6.2 25 885 52,953 200,022,325 

Interest rate.................................................................... 304 -1,208 5,436 900 9,265 -96.7 0 0 17 287 

Foreign exchange.......................................................... 3,906 2,560 -1,535 2,132 2,436 60.3 0 0 6 3,900 

Equity ............................................................................. 965 144 153 -92 854 13.0 0 0 1 964 

Commodity & other (including credit derivatives) ........ 3,004 417 1,648 2,320 -2,358 N/M 0 0 0 3,004 

Total trading revenues................................................... 

Share of Revenue 

8,178 1,914 5,702 5,260 10,197 -19.8 0 0 24 8,154 

Trading revenues to gross revenues (%) ...................... 6.6 1.6 4.7 4.0 7.6 0.0 0.0 0.7 6.7 

Trading revenues to net operating revenues (%).......... 

HELD FOR PURPOSES OTHER THAN TRADING 

74.0 100.2 88.1 96.9 138.0 0.0 0.0 -14.2 72.9 

Number of institutions reporting derivatives................. 1,028 1,010 1,048 1,086 1,048 -1.9 76 615 265 72 

Total assets of institutions reporting derivatives .......... 10,340,778 10,212,224 10,199,835 10,216,757 10,304,121 0.4 5,472 266,237 752,613 9,316,455 

Total deposits of institutions reporting derivatives....... 

Derivative Contracts by Underlying Risk 

Exposure 

7,031,798 7,098,524 6,955,097 6,847,472 6,730,432 4.5 4,566 215,652 570,211 6,241,369 

Interest rate.................................................................... 1,879,902 1,848,275 2,004,409 2,309,913 2,159,495 -12.9 187 16,813 43,886 1,819,016 

Foreign exchange.......................................................... 134,216 115,478 86,272 107,791 106,027 26.6 1 29 451 133,735 

Equity ............................................................................. 7,243 7,459 6,635 7,410 12,216 -40.7 11 161 644 6,428 

Commodity & other........................................................ 6,835 4,073 2,112 2,924 2,429 181.4 0 116 90 6,629 

Total notional amount .................................................... 2,028,197 1,975,285 2,099,429 2,428,038 2,280,166 -11.1 198 17,120 45,071 1,965,808 

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

* Include 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. 

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

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

in total assets. 

FDIC QUARTERLY 12 2010, VOLUME 4, NO. 2 
 

 

Quarterly Banking Profile 

TABLE VII-A. Servicing, Securitization, and Asset Sales Activities (All FDIC-Insured Commercial Banks and State-Chartered 

Savings Banks) 

(dollar figures in millions) 

1st 4th 3rd 2nd 1st % Change 

Quarter Quarter Quarter Quarter Quarter 09Q1- 

2010 2009 2009 2009 2009 10Q1 

Asset Size Distribution 

Less than $100 $1 Billion Greater 

$100 Million to to $10 than $10 

Million $1 Billion Billion Billion 

Assets Securitized and Sold with Servicing Retained or with 

Recourse or Other Seller-Provided Credit Enhancements 

Number of institutions reporting securitization activities ......................................... 

Outstanding Principal Balance by Asset Type 

132 143 143 140 132 0.0 19 61 23 29 

1-4 family residential loans................................................................................ $1,194,691 $1,209,474 $1,225,694 $1,222,193 $1,230,735 -2.9 $232 $931 $2,045 $1,191,483 

Home equity loans............................................................................................. 167 5,947 6,205 6,594 6,595 -97.5 14 0 0 153 

Credit card receivables...................................................................................... 16,133 363,486 391,417 397,918 399,113 -96.0 0 861 0 15,272 

Auto loans .......................................................................................................... 600 7,182 8,277 10,266 11,862 -94.9 0 0 79 521 

Other consumer loans ....................................................................................... 5,610 24,692 25,335 26,006 26,692 -79.0 0 0 0 5,610 

Commercial and industrial loans....................................................................... 4,127 7,649 8,436 9,019 8,317 -50.4 1 10 594 3,522 

All other loans, leases, and other assets.......................................................... 192,868 198,849 192,086 193,377 197,699 -2.4 4 41 143 192,681 

Total securitized and sold.......................................................................................... 

Maximum Credit Exposure by Asset Type 

1,414,197 1,817,280 1,857,449 1,865,374 1,881,015 -24.8 252 1,843 2,861 1,409,242 

1-4 family residential loans................................................................................ 5,166 5,780 6,115 6,058 6,279 -17.7 2 11 55 5,098 

Home equity loans............................................................................................. 14 1,023 1,006 1,063 1,120 -98.8 14 0 0 0 

Credit card receivables...................................................................................... 730 134,193 136,043 129,373 39,100 -98.1 0 267 0 463 

Auto loans .......................................................................................................... 6 637 745 722 912 -99.3 0 0 6 0 

Other consumer loans ....................................................................................... 237 1,410 1,434 1,399 1,429 -83.4 0 0 0 237 

Commercial and industrial loans....................................................................... 95 225 274 184 367 -74.1 0 0 86 9 

All other loans, leases, and other assets.......................................................... 257 287 333 299 301 -14.6 0 5 0 253 

Total credit exposure ................................................................................................. 6,506 143,555 145,950 139,100 49,509 -86.9 17 282 147 6,060 

Total unused liquidity commitments provided to institution's own securitizations ... 

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

162 387 358 378 397 -59.2 1 0 2 159 

1-4 family residential loans................................................................................ 3.9 4.4 4.6 4.3 4.1 4.0 1.1 2.5 3.9 

Home equity loans............................................................................................. 0.5 1.3 1.3 0.8 1.1 0.0 0.0 0.0 0.5 

Credit card receivables...................................................................................... 1.5 2.7 2.9 2.6 3.0 0.0 2.4 0.0 1.4 

Auto loans .......................................................................................................... 1.2 2.3 2.4 2.2 1.9 0.0 0.0 0.6 1.3 

Other consumer loans ....................................................................................... 3.3 4.0 3.6 2.9 3.1 0.0 0.0 0.0 3.3 

Commercial and industrial loans....................................................................... 0.3 2.3 2.9 2.6 3.1 0.0 16.8 1.5 0.0 

All other loans, leases, and other assets.......................................................... 2.2 3.5 1.2 1.9 0.6 0.0 0.0 0.4 2.2 

Total loans, leases, and other assets ....................................................................... 

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

3.6 4.0 3.9 3.7 3.5 3.7 1.8 2.1 3.6 

1-4 family residential loans................................................................................ 8.5 7.9 7.5 6.6 5.7 1.6 0.4 3.2 8.6 

Home equity loans............................................................................................. 0.5 2.0 1.8 0.9 1.4 0.0 0.0 0.0 0.5 

Credit card receivables...................................................................................... 0.8 3.0 2.6 2.9 3.0 0.0 3.7 0.0 0.7 

Auto loans .......................................................................................................... 0.3 0.2 0.3 0.2 0.2 0.0 0.0 0.1 0.4 

Other consumer loans ....................................................................................... 2.7 3.6 3.6 3.3 3.5 0.0 0.0 0.0 2.7 

Commercial and industrial loans....................................................................... 0.1 1.0 1.2 1.3 3.1 0.0 0.0 0.7 0.0 

All other loans, leases, and other assets.......................................................... 7.5 4.3 3.8 1.6 1.1 9.5 0.0 0.6 7.5 

Total loans, leases, and other assets ....................................................................... 

Securitized Loans, Leases, and Other Assets Charged-off 

(net, YTD, annualized, %) 

8.3 6.4 5.9 5.2 4.6 1.7 1.9 2.5 8.3 

1-4 family residential loans................................................................................ 0.2 1.0 0.7 0.5 0.2 0.0 0.0 0.0 0.2 

Home equity loans............................................................................................. 0.2 1.8 1.4 0.9 0.6 0.0 0.0 0.0 0.2 

Credit card receivables...................................................................................... 2.2 10.2 7.6 4.8 2.1 0.0 3.0 0.0 2.1 

Auto loans .......................................................................................................... 0.3 2.5 1.9 1.1 0.7 0.0 0.0 0.1 0.4 

Other consumer loans ....................................................................................... 0.4 1.0 0.7 0.5 0.2 0.0 0.0 0.0 0.4 

Commercial and industrial loans....................................................................... 0.0 13.9 10.0 6.9 2.6 0.0 0.0 0.0 0.0 

All other loans, leases, and other assets.......................................................... 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 

Total loans, leases, and other assets ....................................................................... 

Seller's Interests in Institution's Own Securitizations - Carried as Loans 

0.2 2.8 2.1 1.4 0.6 0.0 1.4 0.0 0.2 

Home equity loans............................................................................................. 0 316 396 134 165 -100.0 0 0 0 0 

Credit card receivables...................................................................................... 4,831 62,235 73,401 68,128 77,212 -93.7 0 53 0 4,778 

Commercial and industrial loans....................................................................... 

Seller's Interests in Institution's Own Securitizations - Carried as Securities 

4 894 930 451 450 -99.1 0 2 1 0 

Home equity loans............................................................................................. 0 1 2 4 5 -100.0 0 0 0 0 

Credit card receivables...................................................................................... 0 789 788 594 556 -100.0 0 0 0 0 

Commercial and industrial loans....................................................................... 

Assets Sold with Recourse and Not Securitized 

0 0 0 0 0 0.0 0 0 0 0 

Number of institutions reporting asset sales............................................................ 

Outstanding Principal Balance by Asset Type 

818 826 820 826 819 -0.1 158 501 115 44 

1-4 family residential loans................................................................................ 62,493 66,985 67,999 70,504 70,061 -10.8 1,066 9,401 4,212 47,813 

Home equity, credit card receivables, auto, and other consumer loans ......... 40 908 1,024 1,159 1,348 -97.0 0 20 3 17 

Commercial and industrial loans....................................................................... 669 2,654 2,844 3,195 6,028 -88.9 1 43 15 610 

All other loans, leases, and other assets.......................................................... 48,372 48,757 47,971 47,560 46,438 4.2 0 95 44 48,233 

Total sold and not securitized.................................................................................... 

Maximum Credit Exposure by Asset Type 

111,574 119,304 119,839 122,418 123,875 -9.9 1,067 9,559 4,273 96,674 

1-4 family residential loans................................................................................ 13,701 16,541 15,418 15,836 15,421 -11.2 110 1,237 2,433 9,920 

Home equity, credit card receivables, auto, and other consumer loans ......... 21 100 104 112 183 -88.5 0 7 1 12 

Commercial and industrial loans....................................................................... 62 1,934 2,003 2,224 4,995 -98.8 1 32 15 14 

All other loans, leases, and other assets.......................................................... 10,450 10,412 10,136 10,011 9,790 6.7 0 66 5 10,379 

Total credit exposure ................................................................................................. 

Support for Securitization Facilities Sponsored by Other Institutions 

24,233 28,986 27,661 28,183 30,389 -20.3 111 1,342 2,455 20,325 

Number of institutions reporting securitization facilities sponsored by others ....... 74 57 60 60 56 32.1 26 33 7 8 

Total credit exposure ................................................................................................. 6,410 4,296 4,872 3,812 2,134 200.4 10 97 37 6,266 

Total unused liquidity commitments ......................................................................... 

Other 

846 545 327 475 936 -9.6 0 0 0 846 

Assets serviced for others* ....................................................................................... 

Asset-backed commercial paper conduits 

6,034,911 6,010,532 5,977,515 5,878,337 5,681,694 6.2 3,968 119,605 94,369 5,816,968 

Credit exposure to conduits sponsored by institutions and others.................. 7,268 15,967 17,658 20,210 22,981 -68.4 5 0 68 7,195 

Unused liquidity commitments to conduits sponsored by institutions 

and others .................................................................................................. 80,156 170,373 182,740 210,026 273,542 -70.7 0 0 1,272 78,884 

Net servicing income (for the quarter) ...................................................................... 4,844 8,019 5,995 10,845 5,946 -18.5 7 180 177 4,480 

Net securitization income (for the quarter) ............................................................... 13 1,615 1,163 -142 2,124 -99.4 1 2 2 8 

Total credit exposure to Tier 1 capital (%)** ............................................................. 3.3 15.9 16.2 15.8 7.7 0.8 1.4 1.9 3.9 

* 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 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INSURANCE FUND INDICATORS 

■ Insured Deposits Grow by 1.3 Percent 

■ DIF Reserve Ratio Rises 1 Basis Point to −0.38 Percent 

■ Forty-one Institutions Fail during First Quarter 

Total assets of the nation’s 7,932 FDIC-insured 

commercial banks and savings institutions increased by 

$248.6 billion (1.9 percent) during first quarter 2010, 

funded primarily by an increase in nondeposit liabilities. 

Total deposits decreased by $28.6 billion, with domestic 

deposits almost flat, decreasing by $5.1 billion (0.1 

percent), and foreign office deposits declining by $23.5 

billion (1.5 percent). Domestic noninterest-bearing 

deposits decreased by $26.4 billion (1.7 percent), and 

domestic time deposits decreased by $116.1 billion 

(4.9 percent). Savings deposits and interest-bearing 

checking accounts increased by $137.4 billion (3.6 

percent) during the quarter. The share of assets funded 

by domestic deposits declined from 58.7 percent to 57.6 

percent, and the share funded by foreign office deposits 

decreased from 11.7 percent to 11.3 percent. Federal 

Home Loan Bank (FHLB) advances as a percentage of 

total assets continued to decline, from 4.1 percent to 

3.6 percent on March 31, 2010, the smallest percentage 

on record (2001 to present). 

Brokered deposits decreased by $10.0 billion (1.6 

percent) during the first quarter and decreased by 

$164.4 billion (21.2 percent) during the previous 12 

months. Reciprocal brokered deposits decreased by 

$639.7 million (1.9 percent) to $33.3 billion during the 

three months ending March 31, 2010. Since the second 

quarter of 2009, the portion of brokered deposits 

exceeding 10 percent of an institution’s domestic deposits has been included in the formula used to price 

deposit insurance.1 

1 For an institution in Risk Category I, the initial base assessment rate 

is adjusted using the adjusted brokered deposit ratio. This ratio will 

exceed zero if an institution’s brokered deposits are greater than 10 

percent of its domestic deposits and its total assets are more than 40 

percent greater than they were four years previously. Certain reciprocal brokered deposits are excluded from the calculation of the adjusted 

brokered deposit ratio. For an institution in any other risk category, the 

initial base assessment rate is increased if the institution’s ratio of 

brokered deposits to domestic deposits is greater than 10 percent. 

Reciprocal brokered deposits are included in the amount of brokered 

deposits for purposes of computing this ratio. 

Since September 30, 2009, insured deposit estimates 

have been based on the temporary $250,000 deposit 

insurance coverage limit.2 Estimated insured deposits 

(including U.S. branches of foreign banks) rose by 

$70.0 billion (1.3 percent) during first quarter 2010, 

down slightly from the previous quarter’s 1.7 percent 

growth. For the most recent 12-month period, insured 

deposits increased by 13.1 percent ($631.5 billion), 

which includes the effect of the temporary increase in 

FDIC deposit insurance coverage. For institutions 

reporting at December 31, 2009 and March 31, 2010, 

insured deposits increased at 5,027 institutions (63 

percent), decreased at 2,876 institutions (36 percent), 

and remained unchanged at 26 institutions. 

The Deposit Insurance Fund (DIF) increased by $145 

million during the first quarter to a negative $20.7 

billion (unaudited). This was the first increase in the 

fund’s balance since first quarter 2008. Accrued assessment income added $3.3 billion to the DIF during the 

first quarter. The fund received $62 million from interest on securities and $149 million from net unrealized 

gains and losses on available-for-sale securities. The 

biggest reduction in the DIF came from a $3.0 billion 

increase in additional provisions for bank failures. Operating and other expenses, net of other revenue, reduced 

the fund by $323 million. 

The small increase in the DIF combined with average 

insured deposit growth raised the first quarter reserve 

ratio to −0.38 percent, 1 basis point higher than the 

previous quarter, but the reserve ratio is 65 basis points 

2 On May 20, 2009, the President signed the Helping Families Save 

Their Homes Act of 2009, which extended the temporary deposit 

insurance coverage limit increase to $250,000 for deposits other than 

retirement accounts (from the permanent limit of $100,000) through 

the end of 2013. The legislation also eliminated the provision in the 

Emergency Economic Stabilization Act of 2009 that prevented the FDIC 

from considering this temporary increase in deposit insurance coverage for purposes of setting deposit insurance assessments. Beginning 

September 30, 2009, insured deposit estimates are based on the 

$250,000 coverage limit. 

FDIC QUARTERLY 14 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

Quarterly Banking Profile 

lower than a year earlier. The fund’s reserve ratio for 

March 31, 2010 (−0.38 percent) is the second lowest 

on record. Forty-one FDIC-insured institutions with 

combined assets of $22.1 billion failed during first quarter 2010, at an estimated cost of $6.3 billion. One 

hundred and sixty FDIC-insured institutions with 

combined assets of $182.4 billion failed during the 

latest 12 months, at an estimated cost of $39.6 billion. 

Author: Kevin Brown, Sr. Financial Analyst 

Division of Insurance and Research 

(202) 898-6817 

FDIC QUARTERLY 15 2010, VOLUME 4, NO. 2 
Table I-B. Insurance Fund Balances and Selected Indicators 

(dollar figures in millions) 

Deposit Insurance Fund 

1st 

Quarter 

2010* 

4th 

Quarter 

2009* 

3rd 

Quarter 

2009 

2nd 

Quarter 

2009 

1st 

Quarter 

2009 

4th 

Quarter 

2008 

3rd 

Quarter 

2008 

2nd 

Quarter 

2008 

1st 

Quarter 

2008 

4th 

Quarter 

2007 

3rd 

Quarter 

2007 

2nd 

Quarter 

2007 

1st 

Quarter 

2007 

Beginning Fund Balance ..... 

Changes in Fund Balance: 

-$20,862 -$8,243 $10,368 $13,007 $17,276 $34,588 $45,217 $52,843 $52,413 $51,754 $51,227 $50,745 $50,165 

Assessments earned.............. 

Interest earned on 

3,278 3,042 2,965 9,095 2,615 996 881 640 448 239 170 140 94 

investment securities ...... 

Realized Gain on Sale of 

62 76 176 240 212 277 526 651 618 585 640 748 567 

Investments...................... 0 0 732 521 136 302 473 0 0 0 0 0 0 

Operating expenses ............... 

Provision for insurance 

345 379 328 298 266 290 249 256 238 262 243 248 239 

losses............................... 

All other income, 

3,021 17,766 21,694 11,615 6,637 19,163 11,930 10,221 525 39 132 -3 -73 

net of expenses ............... 

Unrealized gain/(loss) on 

available-for-sale 

22 2,721 308 375 2 15 16 1 0 -2 24 1 4 

securities ......................... 149 -313 -770 -957 -331 551 -346 1,559 127 138 68 -162 81 

Total fund balance change ..... 145 -12,619 -18,611 -2,639 -4,269 -17,312 -10,629 -7,626 430 659 527 482 580 

Ending Fund Balance........... 

Percent change from 

-20,717 -20,862 -8,243 10,368 13,007 17,276 34,588 45,217 52,843 52,413 51,754 51,227 50,745 

four quarters earlier......... NM NM NM -77.07 -75.39 -67.04 -33.17 -11.73 4.13 4.48 3.52 3.36 3.15 

Reserve Ratio (%) ................. 

Estimated Insured 

-0.38 -0.39 -0.16 0.22 0.27 0.36 0.76 1.01 1.19 1.22 1.22 1.21 1.20 

Deposits**.............................. 

Percent change from 

5,462,644 5,392,677 5,304,695 4,817,614 4,831,129 4,775,133 4,558,937 4,468,240 4,439,491 4,292,940 4,243,129 4,235,314 4,245,447 

four quarters earlier......... 13.07 12.93 16.36 7.82 8.82 11.23 7.44 5.50 4.57 3.34 3.49 4.82 6.08 

Domestic Deposits............... 

Percent change from 

7,709,420 7,714,167 7,564,731 7,571,019 7,567,128 7,529,934 7,244,167 7,036,919 7,078,340 6,922,406 6,748,520 6,699,156 6,702,779 

four quarters earlier......... 

Number of institutions 

1.88 2.45 4.43 7.59 6.91 8.78 7.34 5.04 5.60 4.25 4.07 3.91 5.71 

reporting......................... 7,942 8,022 8,109 8,205 8,257 8,315 8,394 8,462 8,505 8,545 8,570 8,625 8,661 

DIF Reserve Ratios 

Percent of Insured Deposits 

1.20 1.21 1.22 1.22 1.19 

1.01 

0.76 

0.36 

0.27 0.22 

-0.16 -0.39 -0.38 

3/07 9/07 3/08 9/08 3/09 9/09 3/10 

Table II-B. Problem Institutions and Failed/Assisted Institutions 

Deposit Insurance Fund Balance 

and Insured Deposits 

($ Millions) 

DIF DIF-Insured 

Balance Deposits 

3/07 50,745 4,245,447 

6/07 51,227 4,235,314 

9/07 51,754 4,243,129 

12/07 52,413 4,292,940 

3/08 52,843 4,439,491 

6/08 45,217 4,468,240 

9/08 34,588 4,558,937 

12/08 17,276 4,775,133 

3/09 13,007 4,831,129 

6/09 10,368 4,817,614 

9/09 -8,243 5,304,695 

12/09 -20,862 5,392,677 

3/10 -20,717 5,462,644 

(dollar figures in millions) 2010  2009** ** 2009 2008 2007 2006 2005 

Problem Institutions 

Number of institutions ............................................................... 775 305 702 252 76 50 52 

Total assets................................................................................ $431,189 $220,047 $402,782 $159,405 $22,189 $8,265 $6,607 

Failed Institutions 

Number of institutions ............................................................... 41 21 140 25 3 0 0 

Total assets................................................................................ $22,140 $9,498 $169,709 $371,945 $2,615 $0 $0 

Assisted Institutions*** 

Number of institutions ............................................................... 0 8 8 5 0 0 0 

Total assets................................................................................ $0 $1,917,482 $1,917,482 $1,306,042 0 0 0 

* Preliminary unaudited fund data, which are subject to change. NM - Not meaningful 

** The Emergency Economic Stabilization Act of 2008 directs the FDIC not to consider the temporary coverage increase to $250,000 in setting assessments. Therefore, we do not include 

the additional insured deposits in calculating the fund reserve ratio, which guides our assessment planning, from fourth quarter 2008 through second quarter 2009. The Helping Families 

Save Their Homes Act of 2009 eliminated the prohibition against the FDIC’s taking the temporary increase into account when setting assessments. Beginning in the third quarter of 2009, 

estimates of insured deposits include the temporary coverage increase to $250,000. 

***Assisted institutions represent five institutions under a single holding company that received assistance in 2008, and eight institutions under a different single holding company that 

received assistance in 2009. 

****Through March 31. 

FDIC QUARTERLY 16 2010, VOLUME 4, NO. 2 
 

 

 

 

 

Quarterly Banking Profile 

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

(dollar figures in millions) 

March 31, 2010 

Number of 

Institutions 

Total 

Assets 

Domestic 

Deposits* 

Est. Insured 

Deposits 

Commercial Banks and Savings Institutions 

FDIC-Insured Commercial Banks ............................................... 6,772 $12,086,503 $6,787,692 $4,649,672 

FDIC-Supervised ................................................................... 4,485 1,952,489 1,482,631 1,185,569 

OCC-Supervised.................................................................... 1,446 8,471,255 4,305,510 2,826,502 

Federal Reserve-Supervised................................................. 841 1,662,760 999,551 637,601 

FDIC-Insured Savings Institutions .............................................. 1,160 1,270,122 904,055 803,066 

OTS-Supervised Savings Institutions.................................... 755 950,168 667,393 596,399 

FDIC-Supervised State Savings Banks................................. 405 319,954 236,662 206,667 

Total Commercial Banks and Savings Institutions ...................... 

Other FDIC-Insured Institutions 

7,932 13,356,625 7,691,747 5,452,738 

U.S. Branches of Foreign Banks ................................................. 10 28,018 17,673 9,906 

Total FDIC-Insured Institutions.................................................... .. 7,942 13,384,643 7,709,420 5,462,644 

* Excludes $1.51 trillion in foreign office deposits, which are uninsured. 

Table IV-B. Distribution of Institutions and Domestic Deposits Among Risk Categories 

Quarter Ending December 31, 2009 

(dollar figures in billions) 

Annual 

Rate in 

Basis Points* 

Number of 

Institutions 

Percent 

of Total 

Institutions 

Domestic 

Deposits 

Percent 

of Total 

Domestic 

Deposits 

Risk Category I

 7.00–12.00 1,812 22.59 619 8.02 

12.01–14.00 1,629 20.31 2,129 27.60 

14.01–15.99 2,381 29.68 1,909 24.75

 16.00–24.00 259 3.23 349 4.53 

Risk Category II 17.00–22.00 906 11.29 1,948 25.25

 22.01–43.00 307 3.83 447 5.79 

Risk Category III 27.00–32.00 358 4.46 101 1.31

 32.01–58.00 187 2.33 125 1.61 

Risk Category IV 40.00–45.00 107 1.33 36 0.46

 45.01–77.50 76 0.95 52 0.68 

Note: Institutions are categorized based on supervisory ratings, debt ratings and financial data as of December 31, 2009. Rates do not reflect 

the application of assessment credits. See Notes to Users for further information on risk categories and rates. 

* Assessment rates with a given risk category vary for several reasons, see 12 CFR Part 327 

http://www.fdic.gov/deposit/insurance/initiative/09FinalAD35.pdf 

FDIC QUARTERLY 17 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TEMPORARY LIQUIDITY GUARANTEE PROGRAM 

■ Debt Guarantee Program Ended October 31, 2009 

■ Transaction Account Guarantee Program Extended to December 31, 2010 

■ $279 Billion Guaranteed in Transaction Accounts over $250,000 

■ $305 Billion Outstanding in Debt Guarantee Program 

FDIC Responds to Market Disruptions with TLGP 

The FDIC Board approved the Temporary Liquidity 

Guarantee Program (TLGP) on October 13, 2008, 

as major disruptions in credit markets blocked access 

to liquidity for financial institutions.1 The TLGP 

improved access to liquidity through two programs: the 

Transaction Account Guarantee Program (TAGP), 

which fully guarantees noninterest-bearing transaction 

deposit accounts above $250,000, regardless of dollar 

amount; and the Debt Guarantee Program (DGP), 

which guarantees eligible senior unsecured debt issued 

by eligible institutions. 

All insured depository institutions were eligible to 

participate in the TAGP. Institutions eligible for participation in the DGP were insured depository institutions, 

U.S. bank holding companies, certain U.S. savings and 

loan holding companies, and other affiliates of insured 

depository institutions that the FDIC designated as 

eligible entities. 

FDIC Extends Guarantee Programs 

Although financial markets improved significantly in 

the first half of 2009, portions of the industry were still 

affected by the recent economic turmoil. To facilitate 

the orderly phase-out of the TLGP, and to continue 

access to FDIC guarantees where they were needed, the 

FDIC Board extended both the DGP and TAGP. 

On March 17, 2009, the Board of Directors of the FDIC 

voted to extend the deadline for issuance of guaranteed 

debt from June 30, 2009, to October 31, 2009, and 

extended the expiration date of the guarantee to the 

earlier of maturity of the debt or December 31, 2012, 

from June 30, 2012. The FDIC imposed a surcharge on 

debt issued with a maturity of one year or more begin1 The FDIC invoked the systemic risk exception pursuant to section 

141 of the Federal Deposit Improvement Act of 1991, 12 U.S.C 

1823(c)(4) on October 13, 2008. For further information on the TLGP, 

see http://www.fdic.gov/regulations/resources/TLGP/index.html. 

ning in second quarter 2009.2 The Board adopted a 

final rule on October 20, 2009, that allowed the DGP 

to expire on October 31, 2009.3 

A final rule extending the TAGP six months, to June 

30, 2010, was adopted on August 26, 2009. Entities 

participating in the TAGP had the opportunity to opt 

out of the extended program. Depository institutions 

that remain in the extended program are subject to 

increased fees that are adjusted to reflect the institution’s risk.4 

On April 13, 2010, the FDIC adopted an interim final 

rule extending the TAGP for another six months, 

through December 31, 2010. Under the rule, the FDIC 

may extend the program for an additional 12 months 

without further rulemaking.5 

Program Funded by Industry Fees and Assessments 

The TLGP does not rely on taxpayer funding or the 

Deposit Insurance Fund. Both the TAGP and the DGP 

are paid for by direct user fees. Institutions participating 

in the TAGP through year-end 2009 were assessed 

an annual fee of 10 basis points. Fees for qualifying 

noninterest-bearing transaction accounts guaranteed 

between January 1, 2010, and June 30, 2010, are based 

on the participating entity’s risk category assignment 

under the FDIC’s risk-based premium system. Annualized fees are 15, 20, or 25 basis points, depending on an 

institution’s risk category. 

Fees for participation in the DGP were based on the 

maturity of debt issued and ranged from 50 to 100 basis 

points (annualized). A surcharge was imposed on debt 

issued with a maturity of one year or greater after April 

1, 2009. For debt that was not issued under the exten2 See http://www.fdic.gov/news/board/Mar1709rule.pdf. 3 See http://www.fdic.gov/regulations/laws/federal/2009/09finalAD37 

Oct23.pdf. 4 See http://www.fdic.gov/news/board/aug26no3.pdf. 5 See http://www.fdic.gov/news/news/press/2010/pr10075.html. 

FDIC QUARTERLY 18 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

sion, that is, debt issued on or before June 30, 2009, and 

maturing on or before June 30, 2012, surcharges were 

10 basis points (annualized) on debt issued by insured 

depository institutions and 20 basis points (annualized) 

on debt issued by other participating entities. For debt 

issued under the extension, that is, debt issued after 

June 30, 2009, or debt that matures after June 30, 2012, 

surcharges were 25 basis points (annualized) on debt 

issued by insured depository institutions and 50 basis 

points (annualized) on debt issued by other participating entities. As of March 31, 2010, fees totaling $10.4 

billion had been assessed under the DGP. 

A Majority of Eligible Entities Have Chosen to 

Participate in the TLGP 

Almost 80 percent of FDIC-insured institutions opted 

in to the TAGP extension through June 30, 2010. 

More than half of all eligible entities elected to opt in 

to the DGP. Lists of institutions that opted out of the 

guarantee programs are posted at http://www.fdic.gov/ 

regulations/resources/TLGP/optout.html. 

$279 Billion in Transaction Accounts over $250,000 

Guaranteed 

According to first quarter 2010 Call and Thrift Financial Reports, insured institutions reported 305,302 

noninterest-bearing transaction accounts over 

$250,000, about half the number of accounts reported 

at year-end 2009. These deposit accounts totaled $356 

billion, of which $279 billion was guaranteed under the 

TAGP. More than 5,500 FDIC-insured institutions 

reported noninterest-bearing transaction accounts over 

$250,000 in value. 

$305 Billion in FDIC-Guaranteed Debt Was 

Outstanding at March 31, 2010 

Seventy-nine financial entities—49 insured depository 

institutions and 30 bank and thrift holding companies 

and nonbank affiliates—had $305 billion in guaranteed 

debt outstanding at the end of first quarter 2010. Some 

banking groups issued FDIC-guaranteed debt at both 

the subsidiary and holding company level, but most 

guaranteed debt was issued by holding companies or 

nonbank affiliates of depository institutions. Bank and 

thrift holding companies and nonbank affiliates issued 

81 percent of FDIC-guaranteed debt outstanding at 

March 31, 2010. 

Debt outstanding at March 31, 2010, had longer term 

at issuance, compared to debt outstanding at year-end 

2008. Less than 1 percent of debt outstanding matures 

in 180 days or less, compared to 49 percent at year-end 

2008; and 79 percent matures more than two years after 

issuance, compared to 39 percent at December 31, 

2008. Among types of debt instruments, 91 percent 

was in medium-term notes, compared to 44 percent at 

year-end. The share of outstanding debt in commercial 

paper fell to less than 0.1 percent from 43 percent at 

year-end 2008. 

Author: Katherine Wyatt 

Chief, Financial Analysis Section 

Division of Insurance and Research 

(202) 898-6755 

Table I-C. Participation in Temporary Liquidity Guarantee Program 

March 31, 2010 Total 

Eligible Entities 

Number 

Opting In 

Percent 

Opting In 

Transaction Account Guarantee Program Extension to June 30, 2010 

Depository Institutions with Assets <= $10 Billion .................................................. 

Depository Institutions with Assets > $10 Billion .................................................... 

Total Depository Institutions* ............................................................................ 

Debt Guarantee Program 

Depository Institutions with Assets <= $10 Billion .................................................. 

Depository Institutions with Assets > $10 Billion .................................................... 

Total Depository Institutions* ............................................................................ 

Bank and Thrift Holding Companies and Non-Insured Affiliates ........................... 

All Entities.......................................................................................................... 

7,835 

107 

7,942 

7,835 

107 

7,942 

6,071 

14,013 

6,258 

67 

6,325 

4,161 

96 

4,257 

3,421 

7,678 

79.9% 

62.6% 

79.6% 

53.1% 

89.7% 

53.6% 

56.3% 

54.8% 

* Depository institutions include insured branches of foreign banks (IBAs). 

FDIC QUARTERLY 19 2010, VOLUME 4, NO. 2 
 

 

 

Table II-C. Cap on FDIC-Guaranteed Debt for Opt-In Entities 

March 31, 2010 

Opt-In Entities with Senior Unsecured 

Debt Outstanding at 9/30/2008 

Opt-In Depository Institutions 

with no Senior Unsecured 

Debt at 9/30/2008 

(dollar figures in millions) 

Number 

 Debt Amount 

as of 

9/30/2008 Initial Cap Number 

2% Liabilities 

as of 

9/30/2008 

Total 

Entities 

Total Initial 

Cap 

Depository Institutions with Assets 

<= $10 Billion*.................................... 

Depository Institutions with Assets 

> $10 Billion* ...................................... 

Bank and Thrift Holding Companies, 

Noninsured Affiliates................................ 

Total......................................................... 

114 

39 

83 

236 

$3,507 

269,228 

397,727 

670,462 

$4,384 

336,535 

497,158 

838,078 

4,047 

57 

3,338 

7,442 

$31,211 

24,392 

N/A 

55,603 

4,161 

96 

3,421 

7,678 

$35,595 

360,927 

497,158 

893,681 

* Depository institutions include insured branches of foreign banks (IBAs). N/A - Not applicable 

Table III-C. Transaction Account Guarantee Program 

(dollar figures in millions) Mar. 31, 

2009 

June 30, 

2009 

Sep. 30, 

2009 

Dec. 31, 

2009 

Mar. 31, 

2010 

% Change 

09Q4-10Q1 

Number of Noninterest-Bearing Transaction Accounts 

over $250,000.............................................................. 586,910 681,429 646,997 687,741 305,302 -55.6% 

Amount in Noninterest-Bearing Transaction Accounts 

over $250,000.............................................................. $854,934 $903,762 $926,401 $1,007,010 $355,800 -64.7% 

Amount Guaranteed .......................................................... $708,207 $733,405 $764,652 $835,074 $279,475 -66.5% 

Table IV-C. Debt Outstanding in Guarantee Program 

March 31, 2010 

(dollar figures in millions) Number Debt Outstanding Cap1 for Group 

Debt Outstanding 

Share of Cap 

Insured Depository Institutions 

Assets <= $10 Billion ....................................................... 

Assets > $10 Billion ......................................................... 

Bank and Thrift Holding Companies, 

Noninsured Affiliates.............................................................. 

All Issuers....................................................................... 

32 

17 

30 

79 

$1,593 

55,881 

247,903 

305,376 

$2,852 

210,244 

387,487 

600,582 

55.8% 

26.6% 

64.0% 

50.8% 

1

 The amount of FDIC-guaranteed debt that can be issued by each eligible entity, or its “cap,” is based on the amount of senior unsecured debt outstanding as of 

September 30, 2008. The cap for a depository institution with no senior unsecured debt outstanding at September 30, 2008, is set at 2 percent of total liabilities. 

See http://www2.fdic.gov/qbp/2008dec/tlgp2c.html for more information. 

Table V-C. Fees Assessed Under TLGP 

(dollar figures in millions) 

Debt Guarantee Program 

Transaction Account 

Guarantee Program* 

Fees Assessed Surcharges Total Fee Amount Fees Collected 

Fourth Quarter 2008.............................................................. 

First Quarter 2009 ................................................................. 

Second Quarter 2009 ............................................................ 

Third Quarter 2009 ................................................................ 

Fourth Quarter 2009.............................................................. 

First Quarter 2010** 

$3,437 

3,433 

1,413 

691 

503 

14 

385 

280 

207 

$3,437 

3,433 

1,797 

971 

709 

14 

90 

179 

182 

188 

207 

Total................................................................................. $9,491 $872 $10,363 $846 

* Pro-rated payment in arrears. 

** A review of data systems led us to recognize a nominal fee amount that had been dropped in error from previously reported amounts. 

Table VI-C. Term at Issuance of Debt Instruments Outstanding 

Other 

Interbank Other Senior 

March 31, 2010 Commercial Eurodollar Medium Interbank Unsecured Other Share 

(dollar figures in millions) Paper Deposits Term Notes Deposits Debt Term Note All Debt by Term 

Term at Issuance 

90 days or less...................................... $0 $0 $0 $0 $0 $0 $0 0.0% 

91-180 days........................................... 0 0 0 2 0 0 2 0.0% 

181-364 days......................................... 0 0 0 65 1 1 67 0.0% 

1-2 years ............................................... 0 0 57,876 3 0 4,773 62,651 20.5% 

Over 2-3 years ...................................... 0 0 80,447 0 3,352 6,005 89,803 29.4% 

Over 3 years.......................................... 1 0 139,985 4 3,713 9,151 152,853 50.1% 

Total................................................ 1 0 278,307 74 7,065 19,929 305,376 

Share of Total........................................ 0.0% 0.0% 91.1% 0.0% 2.3% 6.5% 

FDIC QUARTERLY 20 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

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 V-A of the 

FDIC Quarterly Banking Profile is aggregated for all FDICinsured institutions, both commercial banks and savings institutions. Tables VI-A (Derivatives) and VII-A (Servicing, 

Securitization, and Asset Sales Activities) aggregate information only for insured commercial banks and state-chartered 

savings banks that file quarterly Call Reports. Table VIII-A 

(Trust Services) aggregates Trust asset and income information collected annually from all FDIC-insured 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 IV-B. 

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

comparative quarterly data related to the Deposit Insurance 

Fund (DIF), problem institutions, failed/assisted institutions, 

estimated FDIC-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 submitted by all FDIC-insured depository 

institutions. This information is stored on and retrieved from 

the FDIC’s Research Information System (RIS) data base. 

COMPUTATION METHODOLOGY 

Parent institutions are required to file consolidated reports, 

while their subsidiary financial institutions are still required 

to file separate reports. Data from subsidiary institution 

reports are included in the Quarterly Banking Profile tables, 

which can lead to double-counting. No adjustments are made 

for any double-counting of subsidiary data. 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. 

All asset and liability figures used in calculating performance 

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

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

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

includes the results of all merged institutions. No adjustments 

are made for “purchase accounting” mergers. Growth rates 

represent the percentage change over a 12-month period in 

totals for institutions in the base period to totals for institutions in the current period. 

All data are collected and presented based on the location of 

each reporting institution’s main office. Reported data may 

include assets and liabilities located outside of the reporting 

institution’s home state. In addition, institutions may relocate 

across state lines or change their charters, resulting in an 

inter-regional or inter-industry migration, e.g., institutions 

can move their home offices between regions, and savings 

institutions can convert to commercial banks or commercial 

banks may convert to savings institutions. 

ACCOUNTING CHANGES 

Extended Net Operating Loss Carryback Period – The Worker, 

Homeownership, and Business Assistance Act of 2009, which 

was enacted on November 6, 2009, permits banks and other 

businesses, excluding those banking organizations that 

received capital from the U.S. Treasury under the Troubled 

Asset Relief Program, to elect a net operating loss carryback 

period of three, four, or five years instead of the usual carryback period of two years for any one tax year ending after 

December 31, 2007, and beginning before January 1, 2010. 

For calendar year banks, this extended carryback period 

applies to either the 2008 or 2009 tax year. The amount of 

the net operating loss that can be carried back to the fifth 

carryback year is limited to 50 percent of the available taxable income for that fifth year, but this limit does not apply to 

other carryback years. 

Under generally accepted accounting principles, banks may 

not record the effects of this tax change in their balance 

sheets and income statements for financial and regulatory 

reporting purposes until the period in which the law was 

enacted, i.e., the fourth quarter of 2009. Therefore, banks 

should recognize the effects of this fourth quarter 2009 tax 

law change on their current and deferred tax assets and liabilities, including valuation allowances for deferred tax assets, in 

their Call Reports for December 31, 2009. Banks should not 

amend their Call Reports for prior quarters for the effects of 

the extended net operating loss carryback period. 

The American Recovery and Reinvestment Act of 2009, 

which was enacted on February 17, 2009, permits qualifying 

small businesses, including FDIC-insured institutions, to elect 

a net operating loss carryback period of three, four, or five 

years instead of the usual carryback period of two years for 

any tax year ending in 2008 or, at the small business’s election, any tax year beginning in 2008. Under generally accepted accounting principles, institutions may not record the 

effect of this tax change in their balance sheets and income 

statements for financial and regulatory reporting purposes 

until the period in which the law was enacted, i.e., the first 

quarter of 2009. 

Other-Than-Temporary Impairment – When the fair value of an 

investment in a debt or equity security is less than its cost 

basis, the impairment is either temporary or other-thanFDIC QUARTERLY 21 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

temporary. To determine whether the impairment is otherthan-temporary, an institution must apply other pertinent 

guidance such as paragraph 16 of FASB Statement No. 115, 

Accounting for Certain Investments in Debt and Equity Securities; 

FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, 

The Meaning of Other-Than-Temporary Impairment and Its 

Application to Certain Investments; FSP FAS 115-2 and FAS 

124-2, Recognition and Presentation of Other-Than-Temporary 

Impairments; paragraph 6 of Accounting Principles Board 

Opinion No. 18, The Equity Method of Accounting for 

Investments in Common Stock; Emerging Issues Task Force 

(EITF) Issue No. 99-20, Recognition of Interest Income and 

Impairment on Purchased Beneficial Interests and Beneficial 

Interests That Continue to Be Held by a Transferor in Securitized 

Financial Assets; and FSP EITF 99-20-1, Amendments to the 

Impairment Guidance of EITF Issue No. 99-20. 

Under FSP FAS 115-2 and FAS 124-2 issued on April 9, 

2009, if the present value of cash flows expected to be collected on a debt security is less than its amortized cost basis, a 

credit loss exists. In this situation, if an institution does not 

intend to sell the security and it is not more likely than not 

that the institution will be required to sell the debt security 

before recovery of its amortized cost basis less any currentperiod credit loss, an other-than-temporary impairment has 

occurred. The amount of the total other-than-temporary 

impairment related to the credit loss must be recognized in 

earnings, but the amount of the total impairment related to 

other factors must be recognized in other comprehensive 

income, net of applicable taxes. Although the debt security 

would be written down to its fair value, its new amortized cost 

basis is the previous amortized cost basis less the other-thantemporary impairment recognized in earnings. In addition, if 

an institution intends to sell a debt security whose fair value 

is less than its amortized costs basis or it is more likely than 

not that the institution will be required to sell the debt security before recovery of its amortized cost basis, an other-thantemporary impairment has occurred and the entire difference 

between the security’s amortized cost basis and its fair value 

must be recognized in earnings. 

For any debt security held at the beginning of the interim 

period in which FSP FAS 115-2 and FAS 124-2 is adopted 

for which an other-than-temporary impairment loss has been 

previously recognized, if an institution does not intend to sell 

such a debt security and it is not more likely than not that 

the institution will be required to sell the debt security before 

recovery of its amortized cost basis, the institution should 

recognize the cumulative effect of initially applying the FSP 

as an adjustment to the interim period’s opening balance of 

retained earnings, net of applicable taxes, with a corresponding adjustment to accumulated other comprehensive income. 

The cumulative effect on retained earnings must be calculated by comparing the present value of the cash flows expected 

to be collected on the debt security with the security’s amortized cost basis as of the beginning of the interim period of 

adoption. 

FSP FAS 115-2 and FAS 124-2 are effective for interim and 

annual reporting periods ending after June 15, 2009. Early 

adoption of this FSP is permitted for periods ending after 

March 15, 2009, if certain conditions are met. Institutions are 

expected to adopt FSP FAS 115-2 and 124-2 for regulatory 

reporting purposes in accordance with the FSP’s effective date. 

Business Combinations and Noncontrolling (Minority) Interests – 

In December 2007, the FASB issued Statement No. 141 

(Revised), Business Combinations (FAS 141(R)), and Statement No. 160, Noncontrolling Interests in Consolidated Financial 

Statements (FAS 160). Under FAS 141(R), all business combinations, including combinations of mutual entities, are to 

be accounted for by applying the acquisition method. FAS 

160 defines a noncontrolling interest, also called a minority 

interest, as the portion of equity in an institution’s subsidiary 

not attributable, directly or indirectly, to the parent institution. FAS 160 requires an institution to clearly present in its 

consolidated financial statements the equity ownership in and 

results of its subsidiaries that are attributable to the noncontrolling ownership interests in these subsidiaries. FAS 141(R) 

applies prospectively to business combinations for which the 

acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. 

Similarly, FAS 160 is effective for fiscal years beginning on or 

after December 15, 2008. Thus, for institutions with calendar 

year fiscal years, these two accounting standards take effect in 

2009. Beginning in March 2009, Institution equity capital 

and Noncontrolling interests are separately reported in arriving at Total equity capital and Net income. 

FASB Statement No. 157 Fair Value Measurements issued in 

September 2006 and FASB Statement No. 159 The Fair Value 

Option for Financial Assets and Financial Liabilities issued in February 

2007 – both are effective in 2008 with early adoption permitted in 2007. FAS 157 defines fair value and establishes a 

framework for developing fair value estimates for the fair value 

measurements that are already required or permitted under 

other standards. FASB FSP 157-4, issued in April 2009, provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity for 

the asset or liability have significantly decreased. The FSP also 

includes guidance on identifying circumstances that indicate a 

transaction is not orderly. The FSP is effective for interim and 

annual reporting periods ending after June 15, 2009, with early 

adoption permitted for periods ending after March 15, 2009. 

Fair value continues to be used for derivatives, trading securities, and available-for-sale securities. Changes in fair value 

go through earnings for trading securities and most derivatives. Changes in the fair value of available-for-sale securities 

are reported in other comprehensive income. Available-forsale securities and held-to-maturity debt securities are written 

down to fair value if impairment is other than temporary and 

loans held for sale are reported at the lower of cost or fair 

value. 

FAS 159 allows institutions to report certain financial assets 

and liabilities at fair value with subsequent changes in fair 

value included in earnings. In general, an institution may 

elect the fair value option for an eligible financial asset or liability when it first recognizes the instrument on its balance 

sheet or enters into an eligible firm commitment. 

FASB Statement No. 158 Employers’ Accounting for Defined Benefit 

Pension and Other Postretirement Plans – issued in September 

2006 requires a bank to recognize in 2007, and subsequently, 

the funded status of its postretirement plans on its balance 

sheet. An overfunded plan is recognized as an asset and an 

underfunded plan is recognized as a liability. An adjustment is 

made to equity as accumulated other comprehensive income 

(AOCI) upon application of FAS 158, and AOCI is adjusted 

FDIC QUARTERLY 22 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

in subsequent periods as net periodic benefit costs are recognized in earnings. 

FASB Statement No. 156 Accounting for Servicing of Financial Assets 

– issued in March 2006 and effective in 2007, requires all separately recognized servicing assets and liabilities to be initially 

measured at fair value and allows a bank the option to subsequently adjust that value by periodic revaluation and recognition of earnings or by periodic amortization to earnings. 

FASB Statement No. 155 Accounting for Certain Hybrid Financial 

Instruments – issued in February 2006, requires bifurcation of 

certain derivatives embedded in interests in securitized financial assets and permits fair value measurement (i.e., a fair 

value option) for any hybrid financial instrument that contains an embedded derivative that would otherwise require 

bifurcation under FASB Statement No. 133, Accounting for 

Derivative Instruments and Hedging Activities (FAS 133). In 

addition, FAS 155 clarifies which interest-only and principalonly strips are not subject to FAS 133. 

Purchased Impaired Loans and Debt Securities – Statement of 

Position 03-3, Accounting for Certain Loans or Debt Securities 

Acquired in a Transfer. The SOP applies to loans and debt 

securities acquired in fiscal years beginning after December 

15, 2004. In general, this Statement of Position applies to 

“purchased impaired loans and debt securities” (i.e., loans and 

debt securities that a bank has purchased, including those 

acquired in a purchase business combination, when it is probable, at the purchase date, that the bank will be unable to 

collect all contractually required payments receivable). Banks 

must follow Statement of Position 03-3 for Call Report purposes. The SOP does not apply to the loans that a bank has 

originated, prohibits “carrying over” or creation of valuation 

allowances in the initial accounting, and any subsequent valuation allowances reflect only those losses incurred by the 

investor after acquisition. 

GNMA Buy-back Option – If an issuer of GNMA securities has 

the option to buy back the loans that collateralize the 

GNMA securities, when certain delinquency criteria are met, 

FASB Statement No. 140 requires that loans with this buyback option must be brought back on the issuer’s books as 

assets. The rebooking of GNMA loans is required regardless 

of whether the issuer intends to exercise the buy-back option. 

The banking agencies clarified in May 2005 that all GNMA 

loans that are rebooked because of delinquency should be 

reported as past due according to their contractual terms. 

FASB Statements 166 & 167 – In June 2009, the FASB issued 

Statement No. 166, Accounting for Transfers of Financial 

Assets (FAS 166), and Statement No. 167, Amendments to 

FASB Interpretation No. 46(R) (FAS 167), which change 

the way entities account for securitizations and special purpose entities. FAS 166 revises FASB Statement No. 140, 

Accounting for Transfers and Servicing of Financial Assets 

and Extinguishments of Liabilities, by eliminating the concept of a “qualifying special-purpose entity,” creating the concept of a “participating interest,” changing the requirements 

for derecognizing financial assets, and requiring additional 

disclosures. FAS 167 revises FASB Interpretation No. 46(R), 

Consolidation of Variable Interest Entities, by changing how 

a bank or other company determines when an entity that is 

insufficiently capitalized or is not controlled through voting 

or similar rights, i.e., a “variable interest entity” (VIE), should 

be consolidated. Under FAS 167, a bank must perform a 

qualitative assessment to determine whether its variable interest or interests give it a controlling financial interest in a VIE. 

If a bank’s variable interest or interests provide it with the 

power to direct the most significant activities of the VIE, and 

the right to receive benefits or the obligation to absorb losses 

that could potentially be significant to the VIE, the bank is 

the primary beneficiary of, and therefore must consolidate, 

the VIE. 

Both FAS 166 and FAS 167 take effect as of the beginning of 

each bank’s first annual reporting period that begins after 

November 15, 2009, for interim periods therein, and for 

interim and annual reporting periods thereafter (i.e., as of 

January 1, 2010, for banks with a calendar year fiscal year). 

Earlier application is prohibited. Banks are expected to adopt 

FAS 166 and FAS 167 for Call Report purposes in accordance with the effective date of these two standards. Also, 

FAS 166 has modified the criteria that must be met in order 

for a transfer of a portion of a financial asset, such as a loan 

participation, to qualify for sale accounting. These changes 

apply to transfers of loan participations on or after the effective date of FAS 166. Therefore, banks with a calendar year 

fiscal year must account for transfers of loan participations on 

or after January 1, 2010, in accordance with FAS 166. In general, loan participations transferred before the effective date 

of FAS 166 (January 1, 2010, for calendar year banks) are not 

affected by this new accounting standard and pre-FAS 166 

participations that were properly accounted for as sales under 

FASB Statement No. 140 will continue to be reported as 

having been sold. 

FASB Interpretation No. 48 on Uncertain Tax Positions – FASB 

Interpretation No. 48, Accounting for Uncertainty in Income 

Taxes (FIN 48), was issued in June 2006 as an interpretation 

of FASB Statement No. 109, Accounting for Income Taxes. 

Under FIN 48, the term “tax position” refers to “a position in 

a previously filed tax return or a position expected to be 

taken in a future tax return that is reflected in measuring 

current or deferred income tax assets and liabilities.” FIN 48 

further states that a “tax position can result in a permanent 

reduction of income taxes payable, a deferral of income taxes 

otherwise currently payable to future years, or a change in the 

expected realizability of deferred tax assets.” FIN 48 was originally issued effective for fiscal years beginning after December 

15, 2006. Banks must adopt FIN 48 for Call Report purposes 

in accordance with the interpretation’s effective date except 

as follows. On December 31, 2008, the FASB decided to defer 

the effective date of FIN 48 for eligible nonpublic enterprises 

and to require those enterprises to adopt FIN 48 for annual 

periods beginning after December 15, 2008. A nonpublic 

enterprise under certain conditions is eligible for deferral, 

even if it opted to issue interim or quarterly financial information in 2007 under earlier guidance that reflected the 

adoption of FIN 48. 

FASB Statement No. 123 (Revised 2004) and Share-Based 

Payments – refer to previously published Quarterly Banking 

Profile notes: http://www2.fdic.gov/qbp/2008dec/qbpnot.html 

FASB Statement No. 133 Accounting for Derivative Instruments and 

Hedging Activities – refer to previously published Quarterly 

Banking Profile notes: http://www2.fdic.gov/qbp/2008dec/ 

qbpnot.html 

FDIC QUARTERLY 23 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 – assessable deposits consist of DIF deposits 

(deposits insured by the FDIC Deposit Insurance Fund) in 

banks’ domestic offices with certain adjustments). 

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-publicly-traded bank stock classified in a 

bank’s balance sheet as “Other liabilities.” 

Construction and development loans – includes loans for all 

property types under construction, as well as loans for land 

acquisition and development. 

Core capital – common equity capital plus noncumulative perpetual preferred stock plus minority interest in consolidated 

subsidiaries, less goodwill and other ineligible intangible 

assets. The amount of eligible intangibles (including servicing 

rights) included in core capital is limited in accordance with 

supervisory capital regulations. 

Cost of funding earning assets – total interest expense paid on 

deposits and other borrowed money as a percentage of average 

earning assets. 

Credit enhancements – techniques whereby a company attempts 

to reduce the credit risk of its obligations. Credit enhancement may be provided by a third party (external credit 

enhancement) or by the originator (internal credit enhancement), and more than one type of enhancement may be 

associated with a given issuance. 

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

Association (SAIF) Insurance Funds were merged in 2006 by 

the Federal Deposit Insurance Reform Act to form the DIF. 

Derivatives notional amount – The notional, or contractual, 

amounts of derivatives represent the level of involvement in 

the types of derivatives transactions and are not a quantification of market risk or credit risk. Notional amounts represent 

the amounts used to calculate contractual cash flows to be 

exchanged. 

Derivatives credit equivalent amount – the fair value of the 

derivative plus an additional amount for potential future 

credit exposure based on the notional amount, the remaining 

maturity and type of the contract. 

Derivatives transaction types: 

Futures and forward contracts – contracts in which the buyer 

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

future date, a specific quantity of an underlying variable or 

index at a specified price or yield. These contracts exist for 

a variety of variables or indices, (traditional agricultural or 

physical commodities, as well as currencies and interest 

rates). Futures contracts are standardized and are traded on 

organized exchanges which set limits on counterparty credit 

exposure. Forward contracts do not have standardized terms 

and are traded over the counter. 

Option contracts – contracts in which the buyer acquires the 

right to buy from or sell to another party some specified 

amount of an underlying variable or index at a stated price 

(strike price) during a period or on a specified future date, 

in return for compensation (such as a fee or premium). The 

seller is obligated to purchase or sell the variable or index at 

the discretion of the buyer of the contract. 

Swaps – obligations between two parties to exchange a 

series of cash flows at periodic intervals (settlement dates), 

for a specified period. The cash flows of a swap are either 

fixed, or determined for each settlement date by multiplying 

the quantity (notional principal) of the underlying variable 

or index by specified reference rates or prices. Except for 

currency swaps, the notional principal is used to calculate 

each payment but is not exchanged. 

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). 

Failed/assisted institutions – an institution fails when regulators 

take control of the institution, placing the assets and liabilities into a bridge bank, conservatorship, receivership, or 

another healthy institution. This action may require the 

FDIC to provide funds to cover losses. An institution is 

defined as “assisted” when the institution remains open and 

receives assistance in order to continue operating. 

Fair Value – the valuation of various assets and liabilities on 

the balance sheet—including trading assets and liabilities, 

available-for-sale securities, loans held for sale, assets and 

liabilities accounted for under the fair value option, and foreFDIC QUARTERLY 24 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

closed 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. 

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 

seller-provided 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 uncollectibility), less amounts 

recovered on loans and leases previously charged off. 

Net interest margin – the difference between interest and dividends earned on interest-bearing assets and interest paid to 

depositors and other creditors, expressed as a percentage of 

average earning assets. No adjustments are made for interest 

income that is tax exempt. 

Net 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 charters – insured institutions filing quarterly financial 

reports for the first time. 

Other borrowed funds – federal funds purchased, securities sold 

with agreements to repurchase, demand notes issued to the 

U.S. Treasury, FHLB advances, other borrowed money, mortgage indebtedness, obligations under capitalized leases and 

trading liabilities, less revaluation losses on assets held in 

trading accounts. 

Other real estate owned – primarily foreclosed property. Direct 

and indirect investments in real estate ventures are excluded. 

The amount is reflected net of valuation allowances. For 

institutions that file a Thrift Financial Report (TFR), the 

valuation allowance subtracted also includes allowances for 

other repossessed assets. Also, for TFR filers the components 

of other real estate owned are reported gross of valuation 

allowances. 

Percent of institutions with earnings gains – the percent of institutions that increased their net income (or decreased their 

losses) compared to the same period a year earlier. 

“Problem” institutions – federal regulators assign a composite 

rating to each financial institution, based upon an evaluation 

of financial and operational criteria. The rating is based on a 

scale of 1 to 5 in ascending order of supervisory concern. 

“Problem” institutions are those institutions with financial, 

operational, or managerial weaknesses that threaten their 

continued financial viability. Depending upon the degree of 

risk and supervisory concern, they are rated either a “4” or 

“5.” The number and assets of “problem” institutions are 

based on FDIC composite ratings. Prior to March 31, 2008, 

for institutions whose primary federal regulator was the OTS, 

the OTS composite rating was used. 

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-based capital groups – definition: 

Total Tier 1 

Risk-Based Risk-Based Tier 1 Tangible 

(Percent) Capital* Capital* Leverage Equity 

Well-capitalized ≥10 and ≥6 and ≥5 – 

Adequately 

capitalized ≥8 and ≥4 and ≥4 – 

Undercapitalized ≥6 and ≥3 and ≥3 – 

Significantly 

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

Critically 

undercapitalized – – – ≤2 

* As a percentage of risk-weighted assets. 

FDIC QUARTERLY 25 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Categories and Assessment Rate Schedule – The current risk 

categories became effective January 1, 2007. Capital ratios 

and supervisory ratings distinguish one risk category from 

another. The following table shows the relationship of risk 

categories (I, II, III, IV) to capital and supervisory groups as 

well as the initial base assessment rates (in basis points), 

effective April 1, 2009 for each risk category. Supervisory 

Group A generally includes institutions with CAMELS 

composite ratings of 1 or 2; Supervisory Group B generally 

includes institutions with a CAMELS composite rating of 3; 

and Supervisory Group C generally includes institutions with 

CAMELS composite ratings of 4 or 5. For purposes of riskbased assessment capital groups, undercapitalized includes 

institutions that are significantly or critically undercapitalized. 

Capital Category 

Supervisory Group 

A B C 

1. Well Capitalized I 

12–16 bps II 

22 bps 

III 

32 bps 

2. Adequately Capitalized II 

22 bps 

3. Undercapitalized III 

32 bps 

IV 

45 bps 

Effective April 1, 2009, the initial base assessment rates are 

12 to 45 basis points. An institution’s total assessment rate 

may be less than or greater than its initial base assessment 

rate as a result of additional risk adjustments. 

The base assessment rates for most institutions in Risk 

Category I are based on a combination of financial ratios and 

CAMELS component ratings (the financial ratios method). 

For large institutions in Risk Category I (generally those with 

at least $10 billion in assets) that have long-term debt issuer 

ratings, assessment rates are determined by equally weighting 

the institution’s CAMELS component ratings, long-term debt 

issuer ratings, and the financial ratios method assessment rate. 

For all large Risk Category I institutions, additional risk factors are considered to determine whether assessment rates 

should be adjusted. This additional information includes market data, financial performance measures, considerations of 

the ability of an institution to withstand financial stress, and 

loss severity indicators. Any adjustment is limited to no more 

than one basis point. 

Effective April 1, 2009, the FDIC introduced three possible 

adjustments to an institution’s initial base assessment rate: 

(1) a decrease of up to 5 basis points for long-term unsecured 

debt and, for small institutions, a portion of Tier 1 capital; 

(2) an increase not to exceed 50 percent of an institution’s 

assessment rate before the increase for secured liabilities in 

excess of 25 percent of domestic deposits; and (3) for nonRisk Category I institutions, an increase not to exceed 10 

basis points for brokered deposits in excess of 10 percent of 

domestic deposits. After applying all possible adjustments, 

minimum and maximum total base assessment rates for each 

risk category are as follows: 

Total Base Assessment Rates* 

Risk 

Category 

I 

Risk 

Category 

II 

Risk 

Category 

III 

Risk 

Category 

IV 

Initial base 

assessment rate 12–16 22 32 45 

Unsecured debt 

adjustment -5–0 -5–0 -5–0 -5–0 

Secured liability 

adjustment 0–8 0–11 0–16 0–22.5 

Brokered deposit 

adjustment – 0–10 0–10 0–10 

Total base 

assessment rate 7–24.0 17–43.0 27–58.0 40–77.5 

*All amounts for all risk categories are in basis points annually. Total base rates that are 

not the minimum or maximum rate will vary between these rates. 

Beginning in 2007, 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. For institutions with long-term debt issuer 

ratings, changes in ratings are effective for assessment purposes as of the date the change was announced. 

Special Assessment – On May 22, 2009, the FDIC board 

approved a final rule that imposed a 5 basis point special 

assessment as of June 30, 2009. The special assessment was 

levied on each insured depository institution’s assets minus its 

Tier 1 capital as reported in its report of condition as of June 

30, 2009. The special assessment will be collected September 

30, 2009, at the same time that the risk-based assessment for 

the second quarter of 2009 is collected. The special assessment for any institution was capped at 10 basis points of the 

institution’s assessment base for the second quarter of 2009 

risk-based assessment. 

Prepaid Deposit Insurance Assessments – On November 12, 

2009, the FDIC Board of Directors adopted a final rule requiring insured depository institutions (except those that are 

exempted) to prepay their quarterly risk-based deposit insurance assessments for the fourth quarter of 2009, and for all of 

2010, 2011, and 2012, on December 30, 2009. Each institution’s regular risk-based deposit insurance assessment for the 

third quarter of 2009, which is paid in arrears, also is payable 

on December 30, 2009. 

Risk-weighted assets – assets adjusted for risk-based capital 

definitions which include on-balance-sheet as well as offbalance-sheet items multiplied by risk-weights that range 

from zero to 200 percent. A conversion factor is used to assign 

a balance sheet equivalent amount for selected off-balancesheet accounts. 

Securities – excludes securities held in trading accounts. 

Banks’ securities portfolios consist of securities designated as 

“held-to-maturity,” which are reported at amortized cost 

(book value), and securities designated as “available-for-sale,” 

reported at fair (market) value. 

FDIC QUARTERLY 26 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Banking Profile 

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. 

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. 

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. 

Temporary Liquidity Guarantee Program (TLGP) – was approved 

by the FDIC Board on October 13, 2008. The TLGP was 

designed to help relieve the crisis in the credit markets by 

giving banks access to liquidity during a time of global financial distress. Participation in the TLGP is voluntary. The 

TLGP has two components: 

Transaction Account Guarantee Program (TAGP) provides a full 

guarantee of non-interest-bearing deposit transaction 

accounts above $250,000, at depository institutions that 

elected to participate in the program. On August 26, 2009, 

the FDIC Board voted to extend the TAGP six months 

beyond its original expiration date to June 30, 2010. (On 

April 13, 2010, the FDIC Board adopted an interim rule 

extending the TAG program for six months through 

December 31, 2010, with a possibility of an additional 

12-month extension, through December 31, 2011.) 

Debt Guarantee Program (DGP) provides a full guarantee of 

senior unsecured debt1 issued by eligible institutions after 

October 14, 2008. Initially, debt issued before June 30, 

2009, and maturing on or before June 30, 2012, could be 

guaranteed. On March 17, 2009, the deadline for issuance 

under the program was extended to October 31, 2009, and 

the expiration of the guarantee was set at the earlier of 

maturity of the debt or December 31, 2012. Institutions 

eligible for participation in the debt guarantee program 

include insured depository institutions, U.S. bank holding 

companies, certain U.S. savings and loan holding companies, and other affiliates of an insured depository institution 

that the FDIC designates as eligible entities. The FDIC 

Board adopted a final rule on October 20, 2009, that established a limited six-month emergency guarantee facility 

upon expiration of the DGP. 

Trust assets – market value, or other reasonably available 

value of fiduciary and related assets, to include marketable 

securities, and other financial and physical assets. Common 

physical assets held in fiduciary accounts include real estate, 

equipment, collectibles, and household goods. Such fiduciary 

assets are not included in the assets of the financial 

institution. 

Unearned income & contra accounts – unearned income for Call 

Report filers only. 

Unused loan commitments – includes credit card lines, home 

equity lines, commitments to make loans for construction, 

loans secured by commercial real estate, and unused commitments to originate or purchase loans. (Excluded are commitments after June 2003 for originated mortgage loans held for 

sale, which are accounted for as derivatives on the balance 

sheet.) 

Volatile liabilities – the sum of large-denomination time deposits, foreign-office deposits, federal funds purchased, securities 

sold under agreements to repurchase, and other borrowings. 

Yield on earning assets – total interest, dividend, and fee 

income earned on loans and investments as a percentage of 

average earning assets. 

1 Senior unsecured debt generally includes term Federal funds 

purchased, promissory notes, commercial paper, unsubordinated 

unsecured notes, certificates of deposit (CDs) standing to the credit of 

a bank, and U.S. dollar denominated bank deposits owed to an insured 

depository institution. 

FDIC QUARTERLY 27 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Feature Article: 

A Template for Success: 

The FDIC’s Small-Dollar Loan Pilot Program 

Introduction 

The Federal Deposit Insurance Corporation’s (FDIC) 

two-year Small-Dollar Loan Pilot Program concluded in 

the fourth quarter of 2009. The pilot was a case study 

designed to illustrate how banks can profitably offer 

affordable small-dollar loans as an alternative to highcost credit products such as payday loans and fee-based 

overdraft programs.1 This article summarizes the results 

of the pilot, outlines the lessons learned and the potential strategies for expanding the supply of affordable 

small-dollar loans, and highlights pilot bank successes 

through case studies. 

Since the pilot began, participating banks made more 

than 34,400 small-dollar loans with a principal balance 

of $40.2 million. Overall, small-dollar loan default rates 

were in line with default rates for similar types of unsecured loans. A key lesson learned was that most pilot 

bankers use small-dollar loan products as a cornerstone 

for building or retaining long-term banking relationships. In addition, long-term support from a bank’s 

board and senior management was cited as the most 

important element for programmatic success. Almost all 

of the pilot bankers indicated that small-dollar lending 

is a useful business strategy and that they will continue 

their small-dollar loan programs beyond the pilot. 

A Safe, Affordable, and Feasible Template for 

Small-Dollar Loans 

The pilot resulted in a template of essential product 

design and delivery elements for safe, affordable, and 

feasible small-dollar loans that can be replicated by 

other banks (see Figure 1). While each component of 

the template is important, participating bankers 

reported that a longer loan term is key to program 

success because it provides more time for consumers to 

recover from a financial emergency than the single pay 

1 See previous articles on the Small-Dollar Loan Pilot Program, 

“An Introduction to the FDIC’s Small-Dollar Loan Pilot Program,” 

FDIC Quarterly 2, no. 3 (2008), http://www.fdic.gov/bank/analytical/ 

quarterly/2008_vol2_3/2008_Quarterly_Vol2No3.html; and “The FDIC’s 

Small-Dollar Loan Pilot Program: A Case Study after One Year,” 

FDIC Quarterly 3, no. 2 (2009), http://www.fdic.gov/bank/analytical/ 

quarterly/2009_vol3_2/smalldollar.html. 

Figure 1 

A Safe, Affordable, and Feasible Template 

for Small-Dollar Loans 

Product Element Parameters 

Amount $2,500 or less 

Term 90 days or more 

Annual Percentage 

Rate (APR) 

36 percent or less 

Fees Low or none; origination and other 

upfront fees plus interest charged 

equate to APR of 36 percent or less 

Underwriting Streamlined with proof of identity, 

address, and income, and a credit 

report to determine loan amount and 

repayment ability; loan decision within 

24 hours 

Optional Features Mandatory savings and financial 

education 

Source: FDIC. 

cycle for payday loans, or the immediate repayment 

often required for fee-based overdrafts. 

FDIC Chairman Sheila C. Bair has expressed a desire to 

determine how safe and affordable small-dollar lending 

can be expanded and become more of a staple product 

for all banks.2 Pilot banks have demonstrated that the 

Safe, Affordable, and Feasible Small-Dollar Loan 

Template is relatively simple to implement and requires 

no particular technology or other major infrastructure 

investment. Moreover, adoption of the template could 

help banks better adhere to existing regulatory guidance 

regarding offering alternatives to fee-based overdraft 

protection programs.3 Specifically, this guidance 

suggests that banks should “monitor excessive consumer 

usage (of overdrafts), which may indicate a need for 

2 See opening comments from FDIC Chairman Sheila C. Bair at the 

December 2, 2009, FDIC Advisory Committee on Economic Inclusion 

Meeting, at http://www.vodium.com/MediapodLibrary/index.asp? 

library=pn100472_fdic_advisorycommittee&SessionArgs=0A1 

U0100000100000101. 3 “Overdraft Protection Programs, Joint Agency Guidance,” Financial 

Institution Letter, February 18, 2005, http://www.fdic.gov/news/news/ 

financial/2005/fil1105.html. 

FDIC QUARTERLY 28 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small-Dollar Loan Pilot Program 

Table 1 

Small-Dollar Loan Pilot Program Participants 

Bank Location Total Assets ($000s) Number of Branches 

Amarillo National Bank Amarillo, TX 2,792,382 16 

Armed Forces Bank Fort Leavenworth, KS 862,852 52 

Bank of Commerce Stilwell, OK 93,672 3 

BankFive Fall River, MA 708,545 13 

BankPlus Belzoni, MS 2,144,987 61 

BBVA Bancomer USA* Diamond Bar, CA 139,327 25 

Benton State Bank Benton, WI 45,780 3 

Citizens Trust Bank Atlanta, GA 387,130 11 

Citizens Union Bank Shelbyville, KY 715,927 18 

Community Bank of Marshall Marshall, MO 98,478 6 

Community Bank - Wheaton/Glen Ellyn Glen Ellyn, IL 340,628 4 

The First National Bank of Fairfax Fairfax, MN 27,539 1 

Kentucky Bank Paris, KY 676,239 15 

Lake Forest Bank & Trust Lake Forest, IL 1,816,422 8 

Liberty Bank and Trust Company New Orleans, LA 423,624 24 

Liberty National Bank Paris, TX 245,262 3 

Mitchell Bank Milwaukee, WI 73,623 5 

National Bank of Kansas City Overland Park, KS 708,191 6 

Oklahoma State Bank Guthrie, OK 43,228 4 

Pinnacle Bank Lincoln, NE 2,538,702 57 

Red River Bank Alexandria, LA 795,889 16 

State Bank of Alcester Alcester, SD 94,263 1 

State Bank of Countryside Countryside, IL 913,111 6 

The Heritage Bank Hinesville, GA 982,012 32 

The Savings Bank Wakefield, MA 417,081 9 

Washington Savings Bank Lowell, MA 164,724 3 

Webster Five Cents Savings Bank Webster, MA 559,762 8 

Wilmington Trust Wilmington, DE 9,609,666 44 

Source: FDIC. 

Note: Data as of fourth quarter 2009. 

*BBVA Bancomer USA merged into Compass Bank (Birmingham, AL) in September 2009. Data shown are the latest available for BBVA, as of June 30, 2009. 

alternative credit arrangements or other services, and 

inform consumers of these available options” that could 

include small-dollar credit products. 

Background 

The Small-Dollar Loan Pilot Program pilot began with 

31 banks, and several banks entered and exited as the 

pilot progressed. The pilot concluded with 28 participating banks ranging in size from $28 million to nearly 

$10 billion (see Table 1). The banks have more than 

450 offices across 27 states. Before being accepted into 

the pilot program, banks had to submit an application, 

describe their programs, and meet certain supervisory 

criteria.4 About one-third of the banks in the pilot had 

existing small-dollar loan programs at the time of their 

applications, while the rest instituted new programs in 

conjunction with the pilot. The FDIC anticipated that 

4 “An Introduction to the FDIC’s Small-Dollar Loan Pilot Program” 

described pilot program application parameters. See footnote 1. 

most programs would be consistent with the Affordable 

Small-Dollar Loan Guidelines (SDL Guidelines), but it 

offered banks some flexibility to encourage innovation.5 

The pilot was a case study and does not represent a 

statistical sample of the banking universe. Pilot bankers 

provided some basic information about their programs 

each quarter.6 Some data, such as number and volume 

of loans originated, were relatively straightforward to 

obtain and aggregate. To obtain more subjective or 

5 FDIC, “Affordable Small-Dollar Loan Guidelines,” news release, June 

19, 2007, http://www.fdic.gov/news/news/press/2007/pr07052a.html. 

The primary product features described in the guidelines included loan 

amounts up to $1,000, payment periods beyond a single paycheck 

cycle, annual percentage rates below 36 percent, low or no origination 

fees, streamlined underwriting, prompt loan application processing, 

an automatic savings component, and access to financial education. 

6 The information collection request complied with the Paperwork 

Reduction Act; it did not include account-level information, in accordance with the Right to Financial Privacy Act. See the Federal Register 

citation at http://www.fdic.gov/regulations/laws/federal/2007/07notice 

June7.html for a description of the information collection process. 

FDIC QUARTERLY 29 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- 

otherwise difficult-to-quantify information, the FDIC 

held periodic one-on-one discussions and group conference calls with bank management. 

The pilot tracked two types of loans: small-dollar loans 

(SDLs) of $1,000 or less and nearly small-dollar loans 

(NSDLs) between $1,000 and $2,500. Data collection 

was initially concentrated in the SDL category, in 

accordance with the SDL Guidelines. Data collection 

was expanded for the NSDL category after the first year 

of the pilot, when some bankers relayed to the FDIC the 

importance of these loans to their business plans. In 

particular, they indicated that some of their customers 

needed and could qualify for larger loans and that these 

loans cost the same to originate and service as SDLs, but 

resulted in higher revenues. Some bankers conducted 

only SDL or NSDL programs, and some conducted both 

types. In this article, the terms “small-dollar lending” 

and “small-dollar loans” refer to banks’ overall programs, 

regardless of which category of loan they originated. 

Pilot Results 

During the two-year pilot, participating banks made 

more than 18,100 SDLs with a principal balance of 

$12.4 million and almost 16,300 NSDLs with a principal balance of nearly $27.8 million (see Table 2). As 

of the end of the pilot in fourth quarter 2009, 7,307 

SDLs totaling $3.3 million and 7,224 NSDLs totaling 

$9.2 million were outstanding. Quarterly origination 

volumes were affected by seasoning of newer programs, 

periodic changes some banks made to their programs, 

banks exiting and entering the pilot, seasonality of 

demand, and local economic conditions. 

Loan Volume 

Table 3 shows loan volume data for fourth quarter 2009 

by originator size. Because several banks with longstanding programs had disproportionately large origination volumes, results for banks originating 50 or more 

loans per quarter were isolated from the rest of the group 

to prevent skewing the loan volume. Interestingly, 

several banks with new programs produced enough 

volume to move into the large originator category. 

Smaller originators made, on average, 10 SDLs in 

fourth quarter 2009, compared with 9 SDLs in the third 

quarter, 13 SDLs in the second quarter, and 15 SDLs in 

the first quarter. Smaller originators made, on average, 

11 NSDLs in fourth quarter 2009, versus 18, 13, and 13 

loans in the third, second, and first quarters of 2009, 

respectively. 

Table 2 

Small Dollar Loan Pilot Program 

Cumulative Statistics 

SDL Originations NSDL Originations 

Number Amount ($) Number Amount ($) 

1Q08 

2Q08 

3Q08 

4Q08 

1Q09 

2Q09 

3Q09 

4Q09 

Total 

1,523 

2,388 

2,225 

2,210 

1,650 

2,229 

2,928 

3,010 

18,163 

1,013,118 

1,495,661 

1,502,456 

1,492,273 

1,079,999 

1,553,296 

2,135,767 

2,168,295 

$12,440,864 

1,617 

1,918 

2,113 

2,033 

1,745 

2,389 

2,178 

2,301 

16,294 

2,696,996 

3,202,358 

3,651,934 

3,434,906 

2,943,952 

4,135,785 

3,744,603 

3,972,694 

$27,783,227 

Source: FDIC. 

Loan Characteristics 

While the application process did not preclude openended credit, all banks in the pilot offered only closedend installment loans. Basic loan characteristics, such as 

interest rates, fees, and repayment terms, did not vary 

between large and smaller originators. Therefore, there is 

no distinction made for origination volume in the fourthquarter loan characteristics data shown in Table 4. 

Loan terms remained fairly consistent from quarter to 

quarter. For example, the average loan amount for SDLs 

was approximately $700, and the average term was 10 to 

12 months. The average loan amount for NSDLs was 

approximately $1,700, and the average term was 14 to 

16 months. Average interest rates for both types of loans 

ranged between 13 and 16 percent, and the most 

common interest rate charged was 18 percent. About 

half of the banks charged an origination fee (the average 

fee was $31 for SDLs and $46 for NSDLs), and when 

this fee was added to the interest rate, all banks were 

within the targeted 36 percent annual percentage rate. 

Loan Performance 

The delinquency ratio for SDLs climbed to 11 percent 

in fourth quarter 2009 from a relatively stable rate of 

about 9 percent for much of 2009.7 The fourth quarter 

increase in SDL delinquencies is attributed largely to 

adverse economic conditions in bank communities. The 

delinquency ratio for NSDLs has also been high, though 

somewhat volatile, again due to adverse local economic 

conditions. As of fourth quarter 2009, the NSDL delinquency ratio was 9.4 percent compared with 10.9 

percent in the third quarter, 6.4 percent in the second 

quarter, and 6.6 percent in first quarter 2009. Delin7 Delinquency refers to loans 30 days or more past due. 

FDIC QUARTERLY 30 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

Small-Dollar Loan Pilot Program 

Table 3 

Small-Dollar Loan Pilot 4Q09: Origination Data by Program Size 

Number of Banks 

Reporting Total Average Minimum Maximum 

Loans up to $1,000 (SDLs) 

All Banks 

# of Notes 22 3,010 111 1 

Note Volume 22 $2,168,295 $98,559 $500 

Banks Originating Fewer Than 50 Loans 

# of Notes 15 146 10 1 

Note Volume 15 $99,880 $6,659 $500 

Banks Originating More Than 50 Loans 

# of Notes 7 2,864 409 51 

Note Volume 7 $2,068,415 $337,437 $38,700 

1675 

$1,140,660 

26 

$15,800 

1,675 

$1,140,660 

Loans over $1,000 (NSDLs) 

All Banks 

# of Notes 12 2,301 192 1 

Note Volume 12 $3,972,694 $331,058 $1,200 

Banks Originating Fewer Than 50 Loans 

# of Notes 7 78 11 1 

Note Volume 7 $135,064 $19,295 $1,200 

Banks Originating More Than 50 Loans 

# of Notes 5 2,223 445 109 

Note Volume 5 $3,837,630 $767,526 $193,355 

1,151 

$1,942,837 

38 

$64,868 

1,151 

$1,942,837 

Source: FDIC. 

Table 4 

quency ratios for both SDLs and NSDLs are much 

higher than for general unsecured “loans to individuals.” According to the FDIC Call Report, delinquency 

ratios for those loans were 2.5 percent in fourth quarter 

2009, 2.6 percent in the third quarter, 2.4 percent in 

the second quarter, and 2.5 percent in the first quarter. 

However, charge-off ratios for SDLs and NSDLs, 

although climbing, are in line with the industry averSmall-Dollar Loan Pilot 4Q09: Summary of Loan Characteristics 

Number of 

Banks Reporting Average Minimum Maximum 

Loans up to $1,000 

Loan amount 22 $724 $445 

Term (months) 22 12 2 

Interest rate 22 13.09% 4.00% 

Non-zero fees 9 $31 $8 

$1,000 

24 

31.90% 

$70 

Loans over $1,000 

Loan amount 12 $1,727 $1,200 

Term (months) 12 15 10 

Interest rate 12 13.99% 4.00% 

Non-zero fees 6 $46 $15 

$2,070 

24 

33.53% 

$70 

Source: FDIC. 

age. For SDLs, the final, cumulative charge-off ratio was 

6.2 percent as of fourth quarter 2009 versus 5.7 percent 

in the third quarter, 5.2 percent in the second quarter, 

and 4.3 percent in the first quarter.8 These compare 

with ratios of 5.4 percent, 5.4 percent, 5.3 percent, 

and 4.9 percent for unsecured “loans to individuals,” 

8 Cumulative charge-off ratios for SDLs are calculated from the beginning of the pilot period. 

FDIC QUARTERLY 31 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

according to fourth, third, second, and first quarter 

2009 Call Reports, respectively. 

The cumulative charge-off rate for NSDLs, at 8.8 

percent, is higher than for SDLs and general unsecured 

loans to individuals.9 However, the charge-off rate for 

these larger loans compares favorably with other types 

of unsecured credit. For example, the charge-off rate for 

“credit cards” on bank balance sheets was 9.1 percent as 

of the fourth quarter 2009 Call Report, and defaults on 

managed credit cards exceeded 10 percent throughout 

2009.10 Performance statistics of loans originated during 

the pilot show that while small-dollar loan borrowers 

are more likely to have trouble paying loans on time, 

they have a default risk similar to those in the general 

population. 

Lessons Learned 

Best practices and elements of success emerged from the 

pilot and underpin the Safe, Affordable, and Feasible 

Small-Dollar Loan Template. In particular, a dominant 

business model emerged: most pilot bankers indicated 

that small dollar loans were a useful business strategy for 

developing or retaining long-term relationships with 

consumers. In terms of overall programmatic success, 

bankers reported that long-term support from a bank’s 

board and senior management was most important. 

The most prominent product elements bankers linked 

to the success of their program were longer loan terms, 

followed by streamlined but solid underwriting. 

Long-Term, Profitable Relationship Building 

Was Predominant Program Goal 

About three-quarters of pilot bankers indicated that 

they primarily used small-dollar loans to build or retain 

profitable, long-term relationships with consumers and 

also create goodwill in the community. A few banks 

focused exclusively on building goodwill and generating 

an opportunity for favorable Community Reinvestment 

Act (CRA) considerations, while a few others indicated 

that short-term profitability was the primary goal for 

their small-dollar loan programs.11 

9 The cumulative charge-off ratio for NSDLs was calculated only for 

fourth quarter 2009 because data regarding NSDL charge-offs were 

not collected until 2009. The cumulative ratio for NSDLs is calculated 

from the beginning of 2009. 

10 “Credit Card Charge-Off Rate on the Rise Again,” Washington Post, 

December 30, 2009. This article reports the results of Moody’s Investor Service’s Credit Card Index. 

11 The extent to which a bank’s small-dollar loan program may be 

subject to positive CRA consideration is described in the “Affordable 

Loan Guidelines.” See footnote 3. 

Program and product profitability calculations are not 

standardized and are not tracked through regulatory 

reporting. Profitability assessments can be highly subjective, depending on a bank’s location, business model, 

product mix, cost and revenue allocation philosophies, 

and many other factors. Moreover, many of the banks 

in the pilot are community banks that indicated they 

either cannot or choose not to expend the resources to 

track profitability at the product and program level. 

Nevertheless, as a general guideline, pilot bankers indicated that costs related to launching and marketing 

small-dollar loan programs and originating and servicing small-dollar loans are similar to other loans. 

However, given the small size of SDLs and to a lesser 

extent NSDLs, the interest and fees generated are not 

always sufficient to achieve robust short-term profitability. Rather, most pilot bankers sought to generate 

long-term profitability through volume and by using 

small-dollar loans to cross-sell additional products. 

Board and Senior Management Support Was Most 

Important Element Related to Program Feasibility 

According to interviews with pilot bankers, several 

overarching elements directly affect the feasibility of 

small-dollar loan programs. Banks indicated that strong 

senior management and board of director support over 

the long term is the primary factor in ensuring the 

success of small-dollar loan programs. They also cited 

the importance of an engaged “champion” in charge 

of the program, preferably with lending authority, 

significant influence over bank policy decisions, or 

both. One of the champion’s key challenges was to 

convince branch staff, local loan officers, or similar 

personnel to promote the small-dollar loan product 

among the bank’s many products and services. 

Location was also linked to program feasibility. Banks 

with offices in communities with large populations of 

low- and moderate-income, military, or immigrant 

households tended to benefit from greater demand for 

small-dollar loan products. Banks in rural markets with 

few nonbank alternative financial services providers 

also benefitted from limited competition for SDL and 

NSDL products. 

Banks, particularly those in suburban locations with less 

demand at the branch level, cited the importance of 

strong partnerships with nonprofit community groups to 

refer, and sometimes qualify, potential borrowers. These 

partnerships were especially useful for fostering word-ofmouth advertising for their small-dollar loan products. 

FDIC QUARTERLY 32 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small-Dollar Loan Pilot Program 

While some banks used mass media, Web page links, 

and targeted promotional efforts, word of mouth 

emerged as the dominant form of advertising for small 

dollar loans, particularly for established programs. 

Longer Loan Term and Streamlined but Solid 

Underwriting May Have Been Key Performance 

Determinants 

Pilot bankers indicated that a longer loan term was critical to loan performance because it gave consumers more 

time to recover from a financial emergency than a single 

pay cycle for payday loans, or the immediate repayment 

often required for fee-based overdrafts. Several banks 

experimented with relatively short loan terms, largely in 

an attempt to mimic the customer’s experience with 

payday lenders. For example, as described in the text 

box on page 39, Liberty Bank in New Orleans, Louisiana, initially required that loan terms coincide with 

three paycheck cycles, but found that borrowers often 

could not repay the loans on time and returned to the 

bank for multiple renewals.12 To avoid the cycle of 

continuously renewed “treadmill” loans, Liberty Bank 

extended loan terms to a minimum of six months. For 

the pilot overall, a 90-day loan term emerged as the 

minimum time needed to repay a small-dollar loan. 

Underwriting processes varied somewhat among pilot 

banks and were streamlined compared with other loans, 

but bankers reported that some basic elements were 

important in minimizing defaults. Notably, most pilot 

banks required a credit report to help determine loan 

amounts and repayment ability and to check for fraud 

or recent bankruptcy. Few banks used credit scoring in 

the underwriting process, but those that did had low 

minimum thresholds, such as a Fair Isaac Corporation 

(FICO) score in the low to mid-500s. In addition to the 

credit report, all pilot banks required proof of identity, 

address, and income. 

Virtually all of the pilot banks could process loans 

within 24 hours, and many processed loans within an 

hour if borrowers had the proper documentation. Banks 

tended to have strong opinions about the merits of 

centralized versus decentralized loan approval processes, 

based on the bank’s size and business model, but no 

clear link to performance under either method emerged. 

About three-fourths of banks offered borrowers the 

option of automatically debiting payments, and some 

provided interest rate discounts to encourage borrowers 

12 Financial institutions, companies, community groups, and other 

organizations mentioned in this article are for illustration only. The 

FDIC does not endorse any individual organization or specific products. 

to choose this payment method. It is difficult to draw 

empirical conclusions about the effect of automatic 

payments on performance because not all borrowers 

chose this option. Nevertheless, pilot bankers in general 

believed that automatic repayments can improve performance for all credit products, not just small-dollar loans. 

Pilot Bankers Had Mixed Views on Optional Linked 

Savings and Financial Education 

As part of the pilot application process, the FDIC 

specifically sought to test whether savings linked to 

small-dollar credit and access to financial education 

would improve loan performance, and ultimately, build 

a savings cushion to reduce future reliance on high-cost 

emergency credit. Cumulatively, pilot banks reported 

opening more than 4,000 savings accounts linked to 

SDLs with a balance of $1.4 million. These numbers are 

likely understated because of the limited ability of some 

banks to track this information. 

On the surface, it appears that default rates for loans 

made under programs featuring savings and financial 

education are lower than for programs without those 

features. To illustrate, about one-half of pilot banks 

required or strongly encouraged SDL customers to open 

savings accounts linked to SDLs.13 About 80 percent of 

the SDL funds originated during the pilot were made by 

banks that offered and encouraged, but did not require, 

a linked savings account. The cumulative charge-off 

rate on SDLs was 6.4 percent at banks with optional 

linked savings versus 11.4 percent at banks that did not 

feature linked savings as part of their programs. Slightly 

more than 10 percent of SDL funds were originated by 

banks that required linked savings accounts; these 

banks had the lowest cumulative charge-off rate during 

the pilot period, at just 1.6 percent. 

Almost one-half of pilot banks strongly encouraged or 

required formal financial education. Because many of 

the largest SDL programs had educational components, 

more than 90 percent of SDLs were made by banks that 

featured education as part of their lending programs. 

The cumulative SDL charge-off rate was 5.7 percent 

where financial education was featured compared with 

12.0 percent where it was not. 

Given the limited sample size and variances in the 

program requirements and other features, it is unclear 

13 Performance data for linked savings and financial education components are limited to SDLs, as data for NSDLs were not collected until 

later in the pilot, which limited their usefulness. 

FDIC QUARTERLY 33 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

whether linked savings or formal financial education 

directly affected loan performance. Moreover, it is 

uncertain whether these factors reduced future reliance 

on high-cost credit, particularly since reducing reliance 

on credit is a long-term goal that may extend beyond 

the pilot period and it is difficult to track based on data 

available to banks. Anecdotally, some pilot bankers 

indicated that some small-dollar loan borrowers subsequently used linked savings or financial management 

skills in positive ways. 

All of the pilot bankers recognized the importance of 

both savings and financial education, but perhaps the 

most interesting finding regarding program design was 

the difference in opinion among bankers about the 

effectiveness of requiring or even strongly encouraging 

these features. Some bankers felt that linked savings 

and formal financial education must be hardwired into 

the small-dollar loan product to break the cycle of highcost lending. Others believed that requiring extra 

features for a loan complicates the process and can drive 

an already stressed consumer to the ease of the payday 

lending process; these bankers thought that financial 

education counseling should be provided during the 

application process. 

Small-dollar loan programs at two of the pilot banks— 

BankPlus in Belzoni, Mississippi, and Liberty Bank and 

Trust Company, of New Orleans, Louisiana—illustrate 

these differences in opinion. BankPlus required both 

formal education seminars and a significant savings 

component to qualify for its small dollar loan program 

(see text box on page 38). The bank strongly believed 

that these components were the driving factor in minimizing defaults and rehabilitating small-dollar loan 

customers with problematic credit histories into what it 

believes will be future mainstream banking customers. 

On the other hand, Liberty Bank and Trust Company 

believed that its program’s initial formal financial 

education and linked savings requirements introduced 

an unwanted level of complexity for borrowers already 

facing a financial emergency (see text box on page 39). 

Liberty reported a surge in loan demand when it 

removed these requirements. A common theme that 

Liberty and other banks cited was the importance of 

informal financial education and counseling as part of 

the loan closing process. For many small-dollar loan 

consumers, obtaining a loan from a bank is an exciting 

and sometimes life-changing event, and part of relationship building is capitalizing on a teachable moment— 

explaining the importance of repaying the loan—when 

the loan is delivered. 

Strategies to Scale Small-Dollar Loans 

Banks other than those in the pilot provide small-dollar 

loans, but it is likely that most banks do not offer these 

loans.14 Pilot bankers and other banks that have started 

or have expressed interest in starting a small-dollar loan 

program indicated that the primary obstacles to entry 

are the cost of launching and maintaining the program 

and concerns about defaults. The strategies described 

below could help overcome these obstacles and increase 

the supply of small-dollar loans. 

Highlight Facts about Existing Models 

A straightforward way to encourage more banks to 

offer small-dollar loans is to emphasize the facts about 

successful programs. The key facts are that safe, affordable, and feasible small-dollar lending does occur in 

mainstream financial institutions; that small-dollar 

lending can be part of a cornerstone for creating profitable relationships; and that defaults on these loans are 

in line with other types of unsecured credit. Indeed, 

other small-dollar loan programs have reported loan 

performance results similar to those of the pilot. 

For example, the Pennsylvania Credit Union Association’s Credit Union Better Choice program reported an 

approximate 5 percent default rate as of third quarter 

2009.15 This program was launched in early 2007 in 

partnership with the Pennsylvania Credit Union 

Association and the State Treasurers’ Office, and about 

80 credit unions are currently participating. The maximum loan amount is $500, the maximum fee is $25, 

and the maximum interest rate is 18 percent. The loan 

term is 90 days, and financial counseling is offered but 

not required. At disbursement, an amount equal to 10 

percent of the loan is placed in a mandatory savings 

account. 

In another example, the country’s largest microlender, 

ACCION Texas, also indicated its loss rate is about 

14 The FDIC Survey of Banks’ Efforts to Serve the Unbanked and 

Underbanked, published in December 2008 (http://www.fdic.gov/ 

unbankedsurveys/), included a question regarding whether banks offer 

small-dollar loans. However, the response to this question was materially skewed, apparently by widespread misinterpretation by banks that 

believed small-dollar loans included standard overdraft lines of credit. 

This question will be clarified in subsequent survey efforts. 

15 Data regarding the Better Choice Program were reported to the FDIC 

Committee on Economic Inclusion on December 2, 2009, http://www. 

vodium.com/MediapodLibrary/index.asp?library=pn100472_fdic_ 

advisorycommittee&SessionArgs=0A1U0100000100000101. See also 

the Better Choice Program Web site at http://www.pacreditunions. 

com/betterchoice.html. 

FDIC QUARTERLY 34 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small-Dollar Loan Pilot Program 

5 percent.16 Its maximum loan amounts are higher, 

up to $100,000, and the average amount is about 

$10,000, but 75 percent of its loans are for $1,500 or 

less. ACCION Texas’s active portfolio was $24 million 

as of third quarter 2009, and loans are targeted to 

Latina women seeking to start or expand small businesses. Most applicants do not have a credit history, 

and the average FICO score is 575. 

The FDIC has taken steps to highlight the facts about 

the small-dollar loan pilot program by releasing program 

results and lessons learned, as well as setting forth the 

Safe, Affordable, and Feasible Small-Dollar Loan 

Template. In addition, the FDIC has been discussing 

the pilot and template in speeches and public forums 

with a number of groups, including banks; other regulators; policymakers; academics; nonprofit, community, 

and philanthropic groups; and innovators in the smalldollar lending area. 

Study Creation of Pools of Nonprofit Funds or 

Government Operating Funds to Serve as 

“Guarantees” for Safe Small-Dollar Loan Programs 

Several existing small-dollar loan programs feature 

“guarantees” in the form of loan loss reserves or linked, 

low-cost deposits provided by government bodies or 

philanthropic groups. These guarantees provide important assurances to banks that are interested in offering 

small-dollar loans but are concerned about the costs of 

doing so. 

For example, pilot bank Wilmington Trust in Wilmington, Delaware, originates small-dollar loans solely to 

clients of West End Neighborhood House (WENH), a 

social services nonprofit organization. WENH screens 

applications, performs loan underwriting (based on 

bank-approved criteria), and provides a full range of 

counseling and social services for prospective borrowers. 

In addition, all of the loans are fully guaranteed by 

WENH and backed by a loan loss reserve funded by 

grants and donations from other program partners.17 

In another example, as part of the Better Choice 

Program, the Pennsylvania State Treasurers’ Department has established a loan guarantee pool whereby 

16 Ibid. See also ACCION Texas’s Web site at http://www.acciontexas. 

org/. 17 The partnership between Wilmington Trust and WENH was profiled 

in “The FDIC’s Small-Dollar Loan Pilot Program: A Case Study after 

One Year,” page 38. See footnote 1. See also WENH’s Web site at 

http://www.westendnh.org/financial-management-services/# for more 

information about the program. 

$20 million in state operating funds are deposited in a 

corporate federal credit union and receive a market rate 

of return. The difference between that rate and the 

corporate credit union’s earnings on the deposit is used 

to fund a loan loss reserve pool. Participating credit 

unions can apply to the pool to have up to 50 percent 

of their losses offset. While it is not a guarantee fund 

per se, the Pennsylvania Credit Union Association 

helps offset the cost of entry into small-dollar lending 

by paying for traditional advertising for credit unions 

that wish to enroll in the Better Choice Program. 

In addition to guarantee programs, opportunities may 

exist to create larger and more broadly available guarantees. For example, recently proposed legislation would 

amend the Community Development Banking and 

Financial Institutions Act of 1994 to provide financial 

assistance to help defray the costs of operating smalldollar loan programs.18 Elements of the Safe, Affordable, and Feasible Small-Dollar Loan Template were 

incorporated into this proposed legislation. 

Encourage Partnerships 

Pilot bankers and other successful small-dollar lending 

programs reported that partnerships with community 

groups were crucial to the success of their programs. 

Among other things, these partnerships can serve as an 

incentive to banks by providing client referrals and the 

opportunity for other parties to share in program costs. 

In some instances, the partnerships are direct and oneon-one relationships, such as the Wilmington Trust and 

WENH partnership described above. Other models, 

such as the state and local “Bank On” campaigns, use 

broad-based coalitions and strategies, which often 

include the provision of short-term emergency credit, to 

increase access to the financial mainstream.19 

The Alliance for Economic Inclusion (AEI) is the 

FDIC’s national initiative to establish coalitions of 

financial institutions, local policymakers, communitybased and consumer organizations, and other partners 

in 14 markets across the country to bring unbanked and 

underserved populations into the financial mainstream. 

The focus is on expanding basic retail financial services, 

including savings accounts, affordable remittance products, small-dollar loan programs, targeted financial 

education programs, and asset-building programs, to 

underserved populations. The number of AEI members 

18 S. 3217, 111th Cong. § 1206 (2010). 

19 See the National League of Cities Web site for a general description 

of Bank On campaigns at http://www.nlc.org/ASSETS/7E6FA32D3A364 

733B3172E44818A0CE3/IYEF_BankOnOnePagerFinal_4-10.pdf. 

FDIC QUARTERLY 35 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

nationwide is 967, and 35 banks offer or are developing 

small-dollar loan programs.20 

Study Feasibility of Safe and Innovative Small-Dollar 

Loan Business Models 

The relationship-building small-dollar loan model is as 

costly to originate as other, larger loans because of the 

“high-touch” nature of the loan delivery process. 

Emerging technologies and delivery channels could 

reduce handling costs and, potentially, credit losses. 

For example, employer-based lending is an emerging 

model whereby loans are delivered through the workplace as an employee benefit, like medical insurance or 

401(k) plans. Banks or credit unions could process loans 

using employment information as a proxy for most of its 

underwriting criteria. That is, the employee’s name, 

address, social security or tax identification number, 

salary, and length and status of employment would 

already be known, potentially reducing or eliminating 

the time a bank employee would spend gathering that 

information. Moreover, payments would be made automatically from payroll deduction, and features such as 

financial education screens and required savings could 

be factored into the loan origination process. 

There are no large-scale examples of employer-based 

lending, but some organizations are experimenting with 

the concept. For example, Employee Loan Solutions 

(ELS) is a start-up company that has a patented process 

for delivering closed-end installment loans as an 

employee benefit.21 According to ELS, underwriting 

costs would fall to virtually zero because of an automated process with no consumer interaction. Defaults 

also would be limited through automated payroll deduction for payments. While ELS has not had any practical 

application of its process yet, there are a few operating 

examples of employer-based small-dollar lending. 

In July 2009 the Commonwealth of Virginia launched 

a pilot program, the Virginia State Employees Loan 

Program (VSELP), to deliver loans to state employees 

through its payroll system.22 The program does not 

involve any state funds, and loans are funded by the 

20 Some of the AEI member banks offering small-dollar loans are also 

in the pilot. See the FDIC’s Web site at http://www.fdic.gov/consumers/ 

community/AEI/index.html for more information about the AEI. 21 Information regarding Employee Loan Solution’s proposed business 

model was reported to the FDIC Committee on Economic Inclusion on 

December 2, 2009. 

22 Ibid. See also the State of Virginia’s Web site for more information 

about the loan program at http://www.dhrm.virginia.gov/vaemploan/. 

Virginia Credit Union. An Internal Revenue Code 

§501(c) 3 nonprofit organization called the Virginia 

State Employee Assistance Fund (VSEAF) provided a 

$10,000 guarantee to fund a loan loss reserve. Previously, the VSEAF was being used for direct emergency 

aid to state workers, and the VSELP provided a way to 

leverage those funds to assist more employees who 

might need emergency funds. 

VSELP loans are for amounts up to $500, and terms are 

up to six months with an interest rate of 24.99 percent. 

Loans are also conditioned on taking a short computerbased financial education course and passing a tenquestion financial education quiz. After about three 

months, more than 2,000 VSELP loans had been originated with a cumulative balance of over $1 million; this 

represented about 2 percent of Virginia’s 100,000 state 

employees who were using the loans. According to the 

Commonwealth of Virginia, borrowers are disproportionately minority, female, and low-income. 

E-Duction is a for-profit company that offers openended loans through employers with credit lines delivered through MasterCard®. The maximum loan amount 

is 2.5 percent of annual pay, which, for example, would 

be $1,000 for an employee earning $40,000 per year.23 

There is no interest rate; rather, the company charges 

an annual fee, which as of late 2009 was $36 to $40 per 

year. Equal payments are made through payroll deduction over two to six months, depending on the type of 

expense. The company has been in business since 2002 

and reports that it has about 18,000 accounts. According to E-Duction, about two-thirds of its borrowers earn 

between $20,000 and $40,000, and more than half have 

been employed for five or more years. Their average 

FICO score is 568. 

Several pilot banks have been experimenting with 

innovative program features. For example, as described 

in the text box on page 40, Lake Forest Bank & Trust, 

of Lake Forest, Illinois, began working with a local 

municipality to offer small-dollar loans to city workers. 

These loans are structured along the terms of the bank’s 

standard small-dollar loan but are repaid through automatic payroll deductions. As described on page 41 

Mitchell Bank, Milwaukee, Wisconsin, created a 

unique low-cost financial education aspect to its loan 

program in which borrowers sign a pledge that they will 

not incur another payday loan during the term of their 

Mitchell Bank loan. 

23 Ibid. See also e-Duction’s Web site at http://www.e-duction.com/ 

html2.0/index.html for more information. 

FDIC QUARTERLY 36 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small-Dollar Loan Pilot Program 

Consider Ways That Regulators Can Encourage 

Banks to Offer Affordable and Responsible Products 

and That Small-Dollar Loan Programs Can Receive 

Favorable CRA Consideration 

Pilot bankers and others have reported that a more flexible regulatory environment could encourage more 

banks to offer small-dollar loans. The SDL Guidelines 

and the pilot application process indicated that smalldollar loan programs can already receive favorable 

consideration for CRA purposes. However, several pilot 

bankers believe that small-dollar lending should receive 

more emphasis in CRA examinations, even if the 

program is relatively small. The FDIC is reviewing this 

suggestion and other types of regulatory and supervisory 

incentives to encourage small-dollar lending. 

Conclusion 

The FDIC small-dollar loan pilot program, conducted 

between December 2007 and December 2009, demonstrated that banks can offer alternatives to high-cost, 

emergency credit products, such as payday loans or overdrafts. The pilot resulted in a Safe, Affordable, and 

Feasible Small-Dollar Loan Template that other banks 

can replicate. Loans originated under the program have 

a default risk similar to other types of unsecured credit. 

Small-dollar loan programs can be an important tool in 

building and retaining customers, can be eligible for 

favorable CRA consideration, and could help banks’ 

consistency with regulatory guidance regarding offering 

customers alternatives to fee-based overdraft protection 

programs. The FDIC continues to work with the banking industry, consumer and community groups, nonprofit 

organizations, other government agencies, and others to 

research and pursue strategies that could prove useful in 

expanding the supply of small-dollar loans. 

Authors: Rae-Ann Miller, Special Advisor to the Director 

Division of Insurance and Research 

Susan Burhouse, Senior Financial Economist 

Division of Insurance and Research 

Luke Reynolds, Chief, Outreach and 

Program Development Section 

Division of Supervision and Consumer 

Protection 

Aileen G. Sampson, Financial Economist 

Division of Insurance and Research 

The authors would like to thank Jack Webb, Senior Executive Vice President and President–South Region, BankPlus; 

Kelly Dixon, Manager of E-Commerce and Howard 

Brooks, Executive Vice President, Liberty Bank and Trust 

Company; Cassandra Slade, Vice President, Lake Forest 

Bank & Trust Company; and James Maloney, President, 

Mitchell Bank for their contributions to this article, and all 

of the volunteer pilot bankers for their assistance in the 

successful execution of the pilot. 

FDIC QUARTERLY 37 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Education, Savings, and Small-Dollar Lending 

at Work for Public Servants 

BankPlus 

Belzoni, Mississippi 

BankPlus is a $2.1 billion institution headquartered in 

Belzoni, Mississippi. In addition to its main office, the 

bank has 61 branches throughout northwest, central, 

and southeastern Mississippi. BankPlus operates in a 

largely nonmetropolitan environment; of the bank’s 

four designated assessment areas, only one is in a metropolitan statistical area (Jackson). The bank’s business 

strategy of placing branches near businesses may provide 

banking services to residents of rural, sparsely populated 

environments who commute to work. For example, 

BankPlus operates a branch inside the Nissan plant in 

Canton, Mississippi. 

The bank learned that there was a strong need for a 

small-dollar loan program after it opened branches in 

Jackson. As a result of the bank’s community outreach 

and partnerships, it soon discovered that many local 

residents had not received financial education and, as a 

result, were unaware of the high costs of using alternative financial services. The bank studied the predominate users of payday loans in the local community and 

found that public servants such as teachers, firefighters, 

and police officers were particularly vulnerable to a 

cycle of high-cost lending. 

The bank launched its CreditPlus program in April 2008. 

CreditPlus is a small, short-term loan product designed 

to encourage participants to break the cycle of high-cost 

debt while developing a regular savings plan. BankPlus 

opens a new checking and savings account for those 

approved for a CreditPlus loan. One-half of the loan 

proceeds are deposited into an interest-bearing personal 

savings account, and these funds are “on hold” until the 

loan is repaid. The bank encourages participants to use 

the remaining loan proceeds to eliminate outstanding 

debts to alternative financial services providers. 

BankPlus reported that the educational component has 

been the “key to [the program’s] success.” Consumers 

must complete a three-hour seminar based on the 

FDIC’s Money Smart financial education curriculum 

before they can apply for a small-dollar loan.* Owing to 

the popularity of the seminars, the bank capped registrations at 50 people per class. In fourth quarter 2009, 

the bank held 21 seminars and reached 667 people. 

* See the FDIC’s Web site at http://www.fdic.gov/consumers/ 

consumer/moneysmart/ for more information on Money Smart. 

Slightly more than half (51 percent) of those who 

attended the financial education workshops came to 

the bank for a small-dollar loan. 

CreditPlus applicants also receive one-on-one credit 

counseling so they can better understand their credit 

report at the time of application. Bank staff also encourages CreditPlus customers to save 10 percent of their 

income each pay period through electronic transfer 

from the checking account into the savings account. 

CreditPlus loans range from $500 to $1,000, and all are 

closed-end with a 12- or 24-month term (the average 

being 21 months). The interest rate is fixed at 5 percent. 

No fees are charged, and proof of recurring income (for 

at least 60 days), identity, and address is required. A 

credit report is obtained as part of the underwriting 

process, but the bank does not require a particular credit 

score. Rather, those with a FICO score above 500 

receive a $1,000 loan, while those with a FICO score 

below 500 receive a $500 loan. If the customer’s documents are in order, a loan can be underwritten in less 

than one hour after the financial education workshop is 

completed. The bank conducted training for loan officers so that the underwriting process could be decentralized and made in the community. 

BankPlus joined the pilot in 2009 and originated 610 

SDLs in fourth quarter 2009. At the conclusion of the 

pilot, 1,404 SDLs with a cumulative balance of about 

$1 million were outstanding. Only 58 SDLs totaling 

$34,000 were 30 days or more delinquent at the end of 

the pilot. The bank’s cumulative charge-off rate during 

the pilot period was 1.8 percent. 

Bank management indicated that SDLs are not profitable on a stand-alone basis but can help establish 

customer relationships and improve the bank’s community, which benefits the bank over the long term. 

According to Senior Executive Vice President and 

President–South Region Jack Webb, “We see CreditPlus as an investment in the future—it is about building 

a relationship over the long term. Financial education 

improves habits, and the change of habits improves the 

future of customers.” One of many success stories the 

bank cites is of a customer who had bad credit, received 

a CreditPlus loan, improved her credit score by making 

timely repayments, and was later able to qualify for a 

mortgage through BankPlus and become a first-time 

homebuyer. 

FDIC QUARTERLY 38 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small-Dollar Loan Pilot Program 

Product Simplification Leads to Small-Dollar Loan Success 

Liberty Bank and Trust Company 

New Orleans, Louisiana 

Liberty Bank and Trust Company is a minority-owned 

$424 million bank headquartered in New Orleans, Louisiana. Liberty has 24 branches in six states. Ten branches 

are in New Orleans; four are in Baton Rouge; one is the 

New Orleans suburb of Harahan, Louisiana; and one is 

in Opelousas, Louisiana. The bank has two branches 

each in Jackson, Mississippi; Detroit, Michigan; and 

Kansas City, Kansas. It also has one branch in Kansas 

City, Missouri; and one in Houston, Texas. Most of the 

small-dollar loans made by Liberty are originated out of 

the New Orleans and Kansas City, Missouri, branches. 

With the exception of the Harahan branch, all of Liberty’s branches are in urban areas, and most of the branches 

are in low- and moderate-income neighborhoods. 

The bank did not have an active small-dollar loan 

product when it applied for the FDIC pilot. In its initial 

application, the bank cited providing affordable “antipayday” loans to the qualified public, attracting new 

clientele, and increasing future cross-selling opportunities as its objectives for offering small-dollar loans. The 

pre-launch, conceptual product outlined in its application was called the Payday Assistance Loan. It featured 

a $300 to $1,000 line of credit, a $15 initial saving 

deposit, a $15 refundable financial literacy course fee, 

a $10 processing fee, a 17.99 percent interest rate, and 

a three-payment term structure incorporating a $15 

savings deposit into each payment. The financial literacy fee was to be refundable upon completion of a 

literacy class within 30 days of application. 

By the launch of the bank’s small-dollar loan program in 

April 2008, the Payday Assistance Loan had been 

rebranded as the Liberty Bank Fast Cash Loan. The Fast 

Cash loan required a minimum FICO score of 525, the 

opening of a Liberty checking account with direct 

deposit, deposit of 9 percent of the loan amount into a 

Liberty savings account, completion of a 90-minute 

financial literacy course, and a $4.50 application fee. 

The loan had an 18 percent interest rate and was payable 

in three installments commensurate with the borrower’s 

paycheck schedule. The minimum loan size remained 

$300, while the maximum was increased to $2,500. If all 

required customer documents were provided at the time 

of application, the Fast Cash approval process, featuring 

localized underwriting authority in most cases, was 

designed to take 15 minutes on average. A complete 

application consisted of the applicant’s two most recent 

pay stubs, most recent mortgage statement, utility bills, 

and proper identification. 

In response to customer needs, Liberty refined the Fast 

Cash program over the remaining quarters of the pilot. 

According to Kelly Dixon, Liberty Bank’s manager of 

E-commerce, the savings component proved too 

complicated for potential borrowers. Thus, it was 

dropped before the end of 2008. Similarly, potential 

borrowers viewed the financial education requirements 

as too burdensome, and the bank modified them to 

allow customers to take out and repay two Fast Cash 

loans before completing a literacy class to qualify for a 

third loan. The three-payment term structure was 

dropped in favor of 6- to 12-month terms for loans up 

to $1,000 and 18-month terms for loans up to $2,500, 

to give borrowers more time to repay. Also, the smalldollar loan approval process was centralized and the 

underwriting guidelines were made more flexible. Rates 

on Fast Cash loans are 18 percent and fees are $4.50. 

After implementing the program refinements, Liberty 

originated more SDL and NSDL loans in the first quarter of 2009 than it had in the previous three quarters 

combined. Liberty’s marketing efforts initially included 

media advertising, point-of-sale displays, Web site 

advertising, and dissemination of information at local 

churches. As the pilot progressed, Liberty came to rely 

more on word of mouth and the dissemination of 

brochures at gatherings to market the program. 

Subsequently, the Fast Cash program continued to 

evolve. By November 2009, the financial education 

component had been dropped altogether. The program 

was modified to accommodate more credit history 

“glitches,” such as payment problems due to medical 

issues, job losses, hourly employment cutbacks, unexpected spikes in expenses affecting household budgets, 

and divorce, and to give greater consideration to borrowers using small-dollar loans to support educational 

purposes or to military families. According to Liberty 

Bank and Trust’s Executive Vice President Howard 

Brooks, “We needed more flexibility to avoid pushing 

our low- and moderate-income consumers to high-costdebt products such as payday loans. In particular, our 

customers told us that they don’t have the time or the 

resources to fulfill mandatory financial literacy or savings 

requirements.” He believes that the modifications to the 

Fast Cash program allowed Liberty Bank and Trust to be 

of greater service to its communities. 

During the pilot, Liberty originated 102 SDLs and 82 

NSDLs. In all, Liberty originated approximately 

$217,000 in small-dollar loans during the pilot. The 

bank did not report any charge-offs, and its 30-day 

delinquency rate was about 5.60 percent. The bank 

reported a positive net income on small-dollar loans. 

FDIC QUARTERLY 39 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Innovating to Build Profitable Relationships 

Lake Forest Bank & Trust 

Lake Forest, Illinois 

Lake Forest Bank & Trust is a $1.8 billion institution 

headquartered in Lake Forest, Illinois, in the northern 

suburbs of Chicago. In addition to the main office, the 

bank has seven branches throughout the state. It is 

owned by the Wintrust Financial Corporation holding 

company, which also owns 14 other banks serving the 

Chicago, Illinois, and southern Wisconsin metropolitan areas. 

To expand the bank’s community reinvestment activities, Lake Forest initiated a small-dollar lending program 

in late 2008. The program was designed to meet the 

FDIC’s Guidelines on Affordable Small-Dollar Loans, 

and the bank joined the ongoing pilot program in fourth 

quarter 2008. All seven of the bank’s branches offer the 

small-dollar loan product. Lake Forest has encouraged 

its sister banks—which, including Lake Forest, have 84 

branches—to offer the product as well, and many have 

started their own programs. Although Lake Forest was 

a relatively late entrant into the pilot program, the 

program has grown quickly, from 5 loans originated in 

its first quarter of participation to 51 in the final quarter 

of the pilot. 

Lake Forest’s small-dollar loans range from $250 to 

$1,000. One of the most successful changes the bank 

made to its program over the past year has been reducing the minimum loan amount to accommodate borrowers who did not need large amounts of credit. The bank 

charges a fixed interest rate of prime plus 5 percent, 

which has hovered around 8.5 percent since it implemented the loan product, with no fees. Interest rates are 

reduced by 0.25 percent if the borrower chooses to use 

auto-debit payments or payroll deduction. Loans must 

be repaid within 24 months, but are paid off in 18 

months, on average. The underwriting process allows 

for loan decisions within 24 hours at the branch level. 

There are no minimum credit score requirements. 

While the bank initially required a minimum credit 

score, it found this requirement was an obstacle for too 

many applicants. Underwriting processes now consist of 

completing the application for credit, which collects 

information on employment history, income, assets, 

and debts. A credit report is also ordered to help determine the borrower’s ability to repay. 

Since joining the pilot program, Lake Forest has made 

more than 100 SDLs for nearly $86,000. Forty-four loans 

had been paid off by the end of 2009. With just one loan 

delinquent and 11 loans charged off by fourth quarter 

2009, the bank reports that losses on the SDL product 

are no higher than those on other consumer loans. In 

addition to the positive effect the SDL program has had 

on community development, the bank has been able to 

earn a small profit on the loans and intends to develop 

long-term relationships with performing SDL borrowers. 

Lake Forest is also involved in several innovative 

approaches to its small-dollar lending. In fourth quarter 

2009, the bank began working with a local municipality 

to offer workplace-based loans to city employees to 

reduce their reliance on payday loans and other alternative financial services. City workers can get a loan 

application directly from their employer, can fax the 

complete application to the bank, and will go in to the 

bank only to close the loan. The loans are structured 

along the terms of the bank’s standard small-dollar loan 

but are repaid through automatic payroll deductions. 

In addition, the bank is working with the State of Illinois on the Micro Loan Program and was the first bank 

approved by the state as a lender under this program. 

This program is designed to provide affordable capital 

to credit unions and community banks so they can 

make micro loans to low-income residents who might 

otherwise turn to payday lenders. If a bank is accepted 

into the program, the Micro Loan Program will deposit 

up to $250,000 at a reduced rate at the bank for one 

year. These funds are then used to make loans to borrowers. The bank plans to work on modifying its product to 

meet the state guidelines, and the state program will 

become a subset of the small-dollar loan program. 

While these partnerships are successful in providing loan 

prospects for the bank, the majority of the small-dollar 

loan borrowers come from outside of these relationships. 

Lake Forest consistently advertises the small-dollar loan 

in a community newspaper, which is the biggest driver 

of applications. Program information and the loan application are also available on the bank’s Web site, which 

is becoming a more important channel for applicants. 

Also, the bank’s successful track record with the program 

is generating positive word of mouth that is reaching 

increasing numbers of potential borrowers. 

FDIC QUARTERLY 40 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small-Dollar Loan Pilot Program 

A Pledge to Break the High-Cost Lending Cycle 

Mitchell Bank 

Milwaukee, Wisconsin 

Mitchell Bank is a $74 million institution headquartered in Milwaukee, Wisconsin. In addition to the main 

office, the bank has four branches. The bank’s main 

office and branches are located in communities with 

concentrations of Latino and low- and moderate-income households. 

Mitchell Bank’s small-dollar loan program was new 

when the pilot began in February 2008. The bank’s 

goals for the program were to provide consumers with 

an alternative to high-cost credit, build multiple account 

relationships, and provide opportunities for financial 

education. Initially, loans were offered only to existing 

customers who had had an account for six months or 

more and also had a Social Security number. In 2009, 

Mitchell Bank relaxed the existing customer requirement but required borrowers who were new customers 

to open a Mitchell Bank deposit account and to have 

their payroll or benefits check direct deposited into the 

account. Because of its large immigrant customer base, 

the bank also altered its program requirements to allow 

customers who had only an Individual Taxpayer Identification Number (ITIN) to apply for a loan. 

Loans range from $300 to $1,000, although loans up to 

$2,500 may be made on a case-by-case basis. The interest rates range from 15 to 22 percent, depending on the 

borrower’s credit score; the average rate is about 19 

percent. Each loan application requires a credit report. 

Generally, the bank requires borrowers to have a minimum FICO score of 570 but will extend loans to those 

below that threshold if the borrower agrees to a single 

financial counseling session. An $8 fee is charged to 

cover the cost of the credit report. Loan terms range 

from 6 to 12 months, with an average of 9 months. In 

addition, borrowers must have a minimum income of 

$1,000 per month and are required to provide Mitchell 

Bank with two months’ evidence of payroll or other 

recurring income. 

A unique aspect of Mitchell Bank’s program is that 

borrowers must sign a pledge that they will not incur 

another payday loan during the term of their Mitchell 

Bank loan. The bank also requires that the borrower set 

aside 10 percent of loan proceeds in a savings account 

that is restricted until the loan is paid. The interest rate 

on the savings account is three times higher than 

Mitchell Bank’s regular accounts to encourage smalldollar loan customers to add to savings and avoid future 

reliance on short-term credit. The bank also offers a 2 

percent discount for customers who agree to have 

payments automatically debited from their accounts. 

The bank made 84 SDLs and one NSDL during the 

pilot, with cumulative balances of about $56,000. Eight 

loans were charged off. The bank found that a borrower’s status as an existing customer (versus a new customer) 

had little effect on loan performance. However, the lack 

of credit history, as opposed to a poor credit history, was 

correlated to performance. Of the eight loans charged 

off, six were ITIN loans whose borrowers, for the most 

part, had no credit score. Mitchell Bank also reported 

that loans that became 30 days delinquent were 

frequently charged off. Management attributed the 

correlation between late payments and default to state 

laws that limit the penalty for late charges.* Recent 

collection efforts have resulted in recovery and payment 

of three of the previously charged-off loans, and the 

bank anticipates collecting on several more. 

In terms of successful program components, Mitchell 

Bank reported that extended loan terms significantly 

reduced the incidence of repeat customers. Several 

customers have taken two loans per year (the bank’s 

maximum), but all have paid as agreed. The program 

also provides for a discount on subsequent loans if 

initial loans performed as agreed. Mitchell Bank indicated that the savings component was well received by 

consumers and resulted in substantial savings balances. 

Sixty-two percent of savings accounts opened by loan 

customers remained open at the end of the program, 

and most were active. Most accounts are in the $250 to 

$300 range, but several accounts are in the five-figure 

range. Overall, Mitchell Bank reported that its smalldollar loan program was profitable and met the emergency credit needs of the community it serves. Mitchell 

Bank plans to continue to offer small-dollar loans and 

will continue to develop and refine its program. 

* The Wisconsin Consumer Act (§422.203(1) Wis. Stats.) limits late 

charges to the lesser of 5 percent of the payment or $10. A late 

charge may be assessed only once on an installment, however long 

it remains in default. A borrower who misses a $30 installment 

payment on a small-dollar loan will be charged a $1.50 penalty. 

FDIC QUARTERLY 41 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Feature Article: 

A Guide to Processing Deposit Insurance Claims: 

A Cross-Country Perspective 

A fundamental goal of most deposit insurance systems is 

to contribute to financial stability. However, establishing a deposit insurance system will not improve financial sector resilience unless depositors are confident that 

the system will work. Indeed, depositor confidence is 

key to preventing individual bank failures from escalating into a systemic banking crisis. 

This article discusses the deposit insurance claims 

process, whereby insured depositors are reimbursed 

when a bank fails.1 The article reviews the role of 

deposit insurers in a bank failure as well as their responsibilities in the claims process. It also reviews the basic 

tools that deposit insurers need to satisfy the claims of 

insured depositors (and others) and the procedures 

commonly followed in the claims process. Finally, the 

article explores the claims process of deposit insurers in 

Canada, the Philippines, the Russian Federation, and 

the United States. 

When a Bank Fails: The Deposit Insurer’s Role 

A number of steps are involved in winding up or liquidating the business and affairs of a failed bank.2 First, 

the resolution authority determines a methodology for 

handling the failed bank. That methodology may 

include the purchase of some or all of the bank’s deposits and assets by an acquiring bank, liquidation of the 

bank’s assets, settlement of depositor and other claims 

under applicable laws, and disposition of pending or 

outstanding litigation. 

In many countries, once a decision is made to revoke a 

bank’s charter or license, the bank is placed into receivership.3 A receiver may be appointed administratively 

1 For a more in-depth discussion of the claims process, see “Reimbursing Depositors” and “Claims and Recoveries,” Financial Stability 

Forum (FSF) Working Group on Deposit Insurance Discussion Papers, 

September 2001. 

2 The processes discussed in this article are generally applicable to 

most deposit insurance systems; however, specific features of the 

claims process will reflect the laws and customs of the specific 

country. 

3 In some countries, a bank’s charter or license will not be revoked 

until the affairs of the bank have been wound up, and some countries 

do not have a formal receivership process. 

Figure 1 

Troubled 

Bank 

Supervisory 

Intervention 

Bank Remains 

Troubled 

Bank Fails; 

License 

Revoked 

Bank Saved; 

No Assistance 

(Internal Clean-up) 

Bank Saved; 

External Merger 

Bank Placed in Receivership; 

Buyer Found (P&A) or 

Bank Liquidated 

Claims 

Process 

Recoveries 

Process 

Insured Depositors 

Paid by 

Deposit Insurer 

(Bank Liquidation) 

Insured Deposits 

Acquired by 

Assuming Bank 

(Purchase and 

Assumption) 

Deposit Insurer, 

Uninsured Depositors, 

and Other Creditors 

Paid from Receivership 

Failure Resolution Process 

Source: FDIC. 

or through a bankruptcy court.4 The receivership 

process has two parts: recovering value from the failed 

bank’s assets and paying claims (see Figure 1). The 

receiver sells the bank’s assets and returns recovered 

funds to the bank’s claimants according to established 

protocols on seniority. Claimants include depositors, 

general creditors, subordinated debt holders, and shareholders.5 Claims against the receivership may also arise 

4 In most countries, bank failures are administered by the court system 

through the bankruptcy process. A third party that is not a creditor of 

the failed bank is appointed as the receiver or bankruptcy trustee. In a 

few countries, however, the deposit insurer may be appointed as 

receiver operating under the judicial process. In still others—notably 

the United States and the Philippines—the deposit insurer is appointed 

as receiver and operates through an administrative process. 

5 General creditors include vendors, suppliers, and contractors of the 

failed bank; employees; and lease holders. A claims priority, established in law, determines the order in which claimants are paid from 

the receivership. For example, in the United States depositors are 

given preference over other claimants. This allows the Federal Deposit 

Insurance Corporation (FDIC), standing in the place of insured depositors, and uninsured depositors to be paid from the liquidation of the 

failed bank’s assets before the general creditors. 

FDIC QUARTERLY 42 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing Deposit Insurance Claims 

from legal actions by or against the insolvent bank and 

from financial assistance provided to the bank by the 

deposit insurer or others prior to failure. 

Insured depositors in many countries subrogate their 

claims against the receivership to the deposit insurer 

when a failed bank is liquidated. Accordingly, the 

deposit insurer becomes the claimant against the receivership, acting in place of the insured depositors. The 

deposit insurer reimburses depositors, up to the level 

of their insured deposits, for the funds that are covered 

by deposit insurance. In doing so, the deposit insurer 

bears the time and recovery-rate risks of the receivership process.6 

In addition to insured depositor claims, the deposit 

insurer may be responsible for processing other claims— 

that is, gathering information on the monies owed and 

filing the paperwork with the receiver or bankruptcy 

administrator. Any excess funds that are recovered from 

the sale of the bank’s assets are then distributed to those 

claimants, as appropriate, according to applicable laws. 

The methodology used to resolve a failed bank determines the scope of the claims process. For example, in a 

purchase and assumption transaction (P&A), all deposits, secured liabilities, and good assets (typically cash 

and cash equivalents) of the failed bank are transferred 

to an acquiring bank. If the good assets are insufficient 

to cover the failed bank’s deposit liabilities, the deposit 

insurer adds enough cash or bonds to make the depositors whole. The acquiring bank may take other assets as 

well. A whole bank P&A transaction greatly reduces 

the work involved in the claims process, as it is not 

necessary to make an insurance determination. 

Making the Claims Process Efficient and Effective 

A number of factors contribute to efficient and effective 

claims processing. First, the scope and level of deposit 

insurance coverage must be clearly defined in law and 

well understood by the public.7 The public must be 

aware of the institutions, products, and types of accounts 

covered by deposit insurance; the amount of coverage; 

and adjustments that may be made to that coverage. 

(Coverage adjustment calculations may involve account 

6 The rights of insured depositors to file claims against the receivership are taken on or subrogated by the deposit insurer. In other 

words, it becomes the duty of the deposit insurer—not the insured 

depositor—to file a claim against the receivership. 

7 For a discussion of the elements of a well-designed deposit insurance system, see Blair, Carns, and Kushmeider (2007); and FSF Working Group on Deposit Insurance (2001). 

consolidation or the offset of loans against deposit 

balances.) A well-designed deposit insurance system will 

provide the information that is necessary for an orderly 

and fair claims process. For example, laws in some countries require that depositors be ranked ahead of other 

claimants in the distribution of the failed bank’s assets.8 

That is, depositor claims are paid first out of the funds 

recovered as the bank’s assets are liquidated. The priority for paying insured depositors must be transparent to 

instill confidence in the insurance system. As such, this 

information should be available to depositors and other 

creditors when they place their funds in the bank. 

The deposit insurer also must be adequately funded to 

ensure that payments to insured depositors are made in 

a timely manner and to maintain public confidence in 

the value of the insurance guarantee. In practice, many 

deposit insurance systems have access to more than one 

source of funding. The most common source of ready 

money is a deposit insurance fund, which typically is 

built up from assessments paid by member banks and 

accumulated interest on the fund balance. The authority to borrow from the government or the private sector 

often provides a backup source of funds. Assessments 

can also be charged to the banking industry after a bank 

failure. 

An efficient claims process also requires that information systems and human resources be readily available 

to the deposit insurer. Also, because communication 

among authorities involved in the claims process is 

crucial, the deposit insurer must foster strong working 

relationships with the supervisory authority, other relevant safety-net players, and the receiver to ensure the 

cooperation necessary for a timely, accurate, and efficient payout of insured depositors. The deposit insurer 

must develop detailed procedures to implement when 

an insured institution fails. These procedures must 

clearly delineate the deposit insurer’s responsibilities as 

well as a schedule for claims processing. 

Finally, the deposit insurer should possess efficient 

systems for processing claimant information and making 

monetary distributions. The claims process involves 

aggregating the monies belonging to an individual 

depositor housed in separate accounts for the purpose of 

determining insured balances. Further, in some cases 

deposit insurance is provided on the basis of the different rights and capacities in which the funds are held; 

8 For example, Title III of the Omnibus Budget Reconciliation Act of 

1993 established national depositor preference for all insured depository institutions in the United States. 

FDIC QUARTERLY 43 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

	 	 	 	 	 	

	 	 	 	 	

	 	 	 	 	 	

	 	 	 	 	 	 	

 

 

 

 

 

 

	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	

	 	 	 	 	 	

	 	 	 	 	 	 	 	

	 	 	 	 	 	

	 	 	 	 	 	 	 	

	 	 	 	 	

The Claims Process: Basic Procedures 

The deposit insurer should establish the necessary systems 

to process the claims of insured depositors and, if responsible, of uninsured depositors and other claimants. If 

necessary, an appeals process should also be established. 

As part of preclosure preparatory work, the deposit insurer 

should, whenever possible, 

•	 Receive notification about a possible failure and

collect preliminary deposit data or receive information from the primary regulator, 

•	 Gather information about the institution’s data

system(s), and 

•	 Pre-position claims-processing staff.

After an insured institution is closed, the deposit insurer 

should 

•	 Notify the public and depositors of reimbursement

procedures; 

•	 Secure information on depositors (and on other claimants, if responsible) and determine the insurance 

status of each depositor by 

– Downloading the institution’s deposit information 

into the deposit insurer’s processing systems, 

– Reviewing incoming transfers and determining 

whether they arrived prior to the institution’s 

closure, 

– Drawing up individual deposit statements showing 

principal and interest as of the closing date and 

then sorting them to determine ownership, 

that is, deposit insurance is provided to the ultimate 

beneficial owner of the account, regardless of how the 

account may be titled. These are complex processes that 

require specialized systems to ensure depositors are paid 

in a timely fashion. 

The Claims Process: How Depositors Are Reimbursed 

Efficient and timely claims processing requires extensive 

planning and preparation by the deposit insurer. Determining who should be reimbursed and ensuring that 

insurance limits are respected are the most crucial and 

time-consuming steps (see text box). 

Legislative or other provisions in a number of countries 

allow the deposit insurer to prepare for closure at institutions that appear likely to fail—often known as preclo-

– Identifying the excluded depositors or accounts, 

verifying the rights of trustees and beneficiaries, 

and clarifying any fiduciary relationships, 

– Performing the interest calculations on deposits 

according to the statutory provisions, and 

– Posting account statements to the general ledger 

and balancing to ensure accuracy; 

•	 Determine if any deposits are to be set off against

outstanding loans or if any deposits are used as 

collateral; 

•	 Make adjustments, as appropriate, for any insured

deposits that are held in foreign currencies; 

•	 Examine proof of insurance, if needed; and

•	 Keep records of all reimbursements made to depositors

for verification and auditing purposes. 

Follow-up tasks may be required, such as 

•	 Submitting the reimbursement process to an independent auditor, 

•	 Submitting the deposit insurer’s claim as creditor of

the closed institution to the liquidator in compliance 

with the subrogation rules, and 

•	 Locating depositors whose reimbursement was unsuccessful during the normal process. 

sure planning.

9 During the preclosure planning phase, 

the bank’s primary regulator notifies the deposit insurer 

of a possible failure and provides the insurer information about the failing bank. Deposit insurers also collect 

preliminary deposit data and information about the 

institution’s data system(s) and pre-position staff in 

preparation for the closing. 

Granting the deposit insurer access to, or control of, 

deposit data before a bank is closed helps to ensure that 

legitimate claims are paid promptly and lessens the risk 

of account misrepresentation. However, advance notice 

9 For example, in the United States, the FDIC, which insures bank and 

thrift deposits, generally is given at least 90 days’ notice before an 

insured institution is closed. If no financial institution can be found to 

assume the deposits during this period, the FDIC makes plans to pay 

depositors the full amount of their insured deposits. 

FDIC QUARTERLY 44 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing Deposit Insurance Claims 

in a number of countries is not possible.10 Accordingly, 

the deposit insurer cannot begin the insurance determination process until after the institution has been 

closed, delaying payment to insured depositors (and the 

bank’s other creditors). The longer the period between 

closure and the deposit insurer’s access to the institution’s records, the greater the risk that manipulation of 

the institution’s data might occur. This could result in 

the inability of the deposit insurer to sort out depositors 

with legitimate claims from those seeking protection of 

funds that were not legally insured. 

Regardless of how a bank closing is handled, a deposit 

insurer needs to know when to start and when to 

complete the claims process. Likewise, depositors (and 

other claimants) need to know when and how they 

can expect to receive their funds. In many instances, 

insured depositors do not have to take any action to 

receive their reimbursement—once the bank’s records 

are processed, the insurer distributes depositor funds. 

In other cases, however, insured depositors must file a 

claim and show proof of ownership or identification 

before being reimbursed. In addition, an appeals process 

may need to be established, and the deposit insurer 

may need to process claims and payments for uninsured 

and nondepositor claimants if it is also acting as the 

receiver. To reduce the loss of public confidence in the 

insurance guarantee, depositors must be made aware of 

any actions that affect their insured deposits—such as 

the need to file a claim and how to do so—and when 

they can expect to be reimbursed. 

A deposit insurer should have clearly established procedures for determining deposit and other account balances 

in the event of failure. Over the course of any business 

day, a depositor’s account balance may be affected by 

debit or credit transactions. Transparent rules should be 

in place indicating how the bank’s business on the day of 

failure will be closed out to arrive at deposit balances 

used for insurance determination purposes. 

To begin reimbursing insured depositors (and if responsible, processing other claims) as soon as possible, the 

deposit insurer needs to secure depositor and other 

claimant information immediately after an institution is 

10 In many countries, the decision to close an institution rests with the 

supervisory authority, which will either suspend or withdraw the institution’s license or charter. In other countries, the process of closing 

an institution may be initiated by the supervisor or deposit insurer, but 

must be approved by a court. In still other countries, the deposit 

insurer is restricted by strict bank deposit secrecy rules from gathering information before closure. 

closed. The deposit insurer does this by completing the 

following activities: 

•	 Downloading deposit information 

– Cleansing the data and reconciling them to the 

bank’s general ledger and supporting subsidiary 

systems 

– Inputting the deposit data into the insurer’s 

processing systems 

•	 Identifying depositors and determining insurance 

coverage 

– Preparing and sorting individual account statements showing principal and interest as of the 

closing date to determine ownership 

– Grouping depositors with multiple accounts and 

preparing a combined account statement 

– Sorting the combined account statement to show 

the rights and capacities allowed under deposit 

insurance laws 

– Identifying excluded depositors or accounts 

Any deposits that are to be offset against outstanding 

loans or that are used as collateral require special treatment according to the laws and regulations in effect. 

The deposit insurer makes appropriate adjustments for 

any insured deposits that are held in foreign currencies. 

In many cases, the deposit insurer will simply convert a 

deposit held in a foreign currency to the domestic 

currency at the appropriate exchange rate. In other 

cases, the deposit insurer may have to pay the depositor 

in the foreign currency. 

The last step before reimbursement is preparing a settlements claim statement specifying the amount to be paid 

by the deposit insurer and claimed from the receivership. At this point, the deposit insurer is prepared to 

reimburse insured depositors, provided there are sufficient funds to do so. The deposit insurer can then 

require identification or other documentation, if 

needed, and issue checks or implement other means of 

payment. The insurer must keep a record of all reimbursements made to depositors for verification and 

auditing purposes. 

In some instances, the deposit insurer takes certain 

follow-up steps after the reimbursement is complete. 

For example, the insurer may need to submit the 

FDIC QUARTERLY 45 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reimbursement process to an independent auditor, 

especially if the procedures implementing the regulations and supporting software were not audited before 

use. In some cases, the deposit insurer will also need to 

submit its claim as creditor of the closed institution to 

the liquidator in compliance with the subrogation rules 

specifying the amounts reimbursed and the indemnification obligation. 

The Claims Process: Canada, the Philippines, 

the Russian Federation, and the United States 

The steps discussed above present a general framework for 

the deposit insurance claims process. However, deposit 

insurers use a variety of tools and processes to reimburse 

insured depositors. The remainder of this article examines 

the claims process of four deposit insurers: the Canada 

Deposit Insurance Corporation (CDIC), the Philippines 

Deposit Insurance Corporation (PDIC), the Deposit 

Insurance Agency (DIA) of the Russian Federation, and 

the Federal Deposit Insurance Corporation (FDIC) in the 

United States. (Select characteristics of each country’s 

claims process can also be found in Table 1.) 

Canada 

The CDIC maintains a deposit insurance fund that is 

supported by premiums paid by member institutions. 

In addition, the CDIC has access to government funds 

and may borrow in the financial markets. The CDIC 

has staff dedicated to the claims process, but it sometimes calls upon external consultants to do the detailed 

accounting and information systems work related to the 

claims process. 

The CDIC coordinates its activities with Canada’s bank 

supervisory agencies (the Office of the Superintendent of 

Financial Institutions (OSFI) and provincial supervisory 

agencies). The CDIC board of directors includes OSFI 

and other safety-net players (the Bank of Canada, the 

Department of Finance, and the Financial Consumer 

Agency of Canada). The Guide to Intervention for Federal 

Financial Institutions, which was jointly developed and 

published by the CDIC and the federal bank regulator, 

provides a framework for responding effectively to circumstances that could lead to the instability of a financial 

institution. Given the close working relationships between 

the CDIC and these safety-net players, the CDIC is fully 

informed of the potential for a bank’s closing. 

Before a closure, the CDIC conducts special and preparatory examinations, assesses potential resolution strategies, and secures the necessary funding to undertake its 

preferred resolution strategy.11 The CDIC begins to 

verify, reconcile, and settle insured deposit accounts 

immediately after a bank is closed. Deposits are paid out 

“as soon as possible,” with one to three months being 

the average period from the date of closing to payment. 

During this period, depositors can request advance 

payment(s) of their insured deposits. These requests are 

checked against the bank’s records, and the CDIC 

approves or disapproves the request. 

The CDIC has developed extensive processes and procedures to verify, reconcile, and settle insured deposit 

accounts. The CDIC calculates interest and pays all 

eligible deposits up to the application date of the courtapproved winding-up order. The CDIC relies on the 

books and records of the failed member institution; 

depositors do not have to file a proof of claim. The 

CDIC obtains final data from the failed bank at the time 

of closure and reconciles the eligible deposit balance 

information from its insurance determination process to 

the bank’s sub ledgers and general ledger. Depending on 

the completeness and accuracy of the bank’s records, 

this process can be quite time-consuming. 

Before making a payout, the CDIC identifies depositors 

whose payments should be withheld because of an 

offsetting loan balance or other reasons. Payments can 

be made in the form of a check or by transfer of the 

deposit to another member institution. The CDIC 

obtains an independent audit of the payout for control 

purposes and to support its proof of claim submitted to 

the liquidator of the estate. 

The CDIC reviews the bank’s records to identify depositors with multiple accounts and combines those 

accounts to determine the total amount that will be 

paid. If the combined deposit balance exceeds the insurance limit, the CDIC confirms the depositor’s identity 

by referring to the bank’s original records. This ensures 

the appropriate aggregation of depositor accounts and 

mitigates the risk of over- or underpayment of deposit 

insurance. 

Shortly after a bank is closed, the CDIC sends a letter 

to depositors outlining the process and anticipated 

timing of the reimbursement. A second letter is sent 

detailing whether deposits will be transferred to another 

institution or whether depositors will be reimbursed by 

check. Finally, a customer statement is prepared and 

mailed to all depositors when their account balances 

are reimbursed. 

11 This work helps put CDIC in a payout-ready mode with the information it needs on systems and access to data. 

FDIC QUARTERLY 46 2010, VOLUME 4, NO. 2 
	 	

	 	

	 	 	 	 	

	 	

	 	 	

	 	

	 	 	

	 	

	 	

	 	 	

	 	

	 	 	

	 	 	

	 	 	 	 	

	 	 	

	 	 	

	 	 	

	 	

	 	

	 	

	 	 	

	 	 	

Processing Deposit Insurance Claims 

Table 1 

Characteristics of the Deposit Insurance Claims Process 

Canada Philippines Russian Federation United States 

Deposit insurer Canada Deposit 

Insurance Corporation 

Philippines Deposit 

Insurance Corporation 

Deposit Insurance 

Agency 

Federal Deposit 

Insurance Corporation 

Year established 1967 1963 2004 1933 

Mandate •	Deposit insurer •	Deposit insurer

•	Co-regulator of banks

•	Receiver and liquidator of closed banks 

•	Deposit insurer

•	Liquidator of banks

that take household 

deposits 

•	Deposit insurer

•	Supervisor of statechartered banks 

•	Receiver and liquidator of closed banks 

Funding 

•	Primary source

•	Secondary source(s)

•	Ex ante deposit insurance fund 

•	Member premiums

•	Government funds

•	Borrowing authority

from markets 

•	Ex ante deposit insurance fund 

•	Member premiums

•	Government capital

contribution 

•	Borrowing authority

from the central bank 

and certain private 

sector banks 

•	Ex ante deposit insurance fund 

•	Member premiums

•	Government capital

contribution 

•	Limited authority to

borrow from the 

government 

•	Ex ante deposit insurance fund 

•	Member premiums

•	Line of credit with the

U.S. Treasury 

•	Authority to borrow

from the Federal 

Financing Bank and 

insured institutions 

Staffing External consultants 

and CDIC staff 

PDIC staff DIA staff and/or 

selected agent banks 

FDIC staff 

Number of failed 

insured institutions 

since inception, as of 

year-end 2007 

43 473* Not available 2,237 

Other features 

•	Advance notice of

failure 

Yes Yes No Yes 

•	Advance access to

deposit records 

Yes No (bank secrecy laws) Access required within 

seven days of bank 

closure, but DIA may 

have advance access in 

some cases 

Yes 

•	Prompt corrective

action letter 

No Yes Yes Yes 

•	Deposit insurer

named receiver of 

failed bank 

No Yes Yes Yes 

•	Payouts begin Within one to three 

months, on average 

Within nine days of 

bank closure 

No later than 14 days 

after bank closure 

Following business day 

•	Form of payouts Check or deposit 

transfer 

Cash or deposit transfer Cash or deposit transfer Check or deposit 

transfer 

•	Claim by depositors

required 

No Yes, identification 

required 

Yes, application and 

identification required 

No 

•	Depositor notification By letter Register of Estimated 

Insured Deposits, 

national and local media 

announcements 

By letter, local newspapers, and Bank of 

Russia Bulletin 

By letter 

* Number of banks closed from 1970 to 1997. 

Source: FDIC. 

FDIC QUARTERLY 47 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Philippines 

The PDIC maintains a deposit insurance fund that is 

supported by premium assessments paid by member 

banks. Funding is also provided by the Philippine 

government through paid-in capital. The PDIC is 

authorized to borrow from the Philippine central bank 

and, if necessary, from certain private sector banks. 

With the approval of the country’s president, the PDIC 

may issue bonds or other obligations to pay insured 

depositor claims. 

A distressed bank may request financial assistance from 

the PDIC. If the bank meets certain conditions—for 

example, if the continued operation of the bank is 

needed to provide adequate banking service in the 

community or to maintain financial stability in the 

economy—the PDIC may provide assistance. When 

rehabilitation is unlikely to resolve the bank’s problems, 

however, the Monetary Board of the central bank may 

order the bank closed. The PDIC automatically 

becomes the receiver and begins the payout process. 

Because a bank deposit secrecy law is in effect, the 

PDIC can obtain deposit records only upon closure or 

takeover of the bank, in which case the PDIC is notified and immediately takes charge of the bank’s assets 

and liabilities. 

The PDIC’s Claims Processing Department handles 

claims for payment of insured deposits. Staff in this 

department checks for compliance with documentary 

requirements, validates supporting documents, and 

approves or denies claims. This department also determines the funding requirements for a payout and settles 

claims by either check or cash. 

The PDIC follows a self-imposed deadline of making 

payouts within nine days of a bank takeover. Before 

making payouts, the PDIC conducts a presettlement 

examination in which outstanding and insured deposits 

are identified by bank documents and records. Next, 

the PDIC establishes the validity of deposit accounts 

and tracks the inflow of funds. Then, it generates a 

Register of Estimated Insured Deposits, which becomes 

the basis for the claims process to begin. Depositors file 

a claim, and a claims agent verifies that they are the 

rightful owners by requiring basic documents, such as a 

passbook or bank statement and valid customer identification, according to established guidelines.12 

12 Valid identification includes affidavits of ownership of accounts and 

birth certificates, among others. 

The PDIC pays insured deposits after the validity of the 

claim is established. A claim is normally processed and 

paid on the same day it is filed, except in cases where 

the bank’s records are inaccurate or inadequate, or the 

claimant is unable to provide the required 

documentation. 

The PDIC completes initial servicing or payout of 

claims at the bank within two to three weeks after the 

closing/takeover. Thereafter, acceptance and servicing 

of claims is continued at the PDIC office. Depositors 

have two years from the bank closing date to file their 

claims. 

The Russian Federation 

In the Russian Federation, the DIA is funded by capital 

contributed by the government and by assessments paid 

by member institutions. The DIA may conduct the 

payout process using its own dedicated staff or may use 

an agent bank selected on a competitive basis. The DIA 

has preestablished agreements with banks that are 

accredited to conduct the payout process. 

Banking licenses are granted and revoked by the 

Central Bank of Russia (CBR), which regulates and 

supervises banks. Banks are declared insolvent by a 

bankruptcy court (the arbitration court), which also 

appoints a receiver for the failed bank. The DIA is 

named receiver when banks that accept household 

deposits fail. 

The CBR is not required to notify the DIA of a potential bank closure; however, the DIA is informed when 

prompt corrective action measures are taken against an 

institution. Once the CBR revokes the bank’s license, 

the DIA must be notified no later than the following 

business day. Often this means that the DIA receives 

official information about a bank’s closure at the same 

time as the public. However, upon mutual agreement 

with the CBR, DIA staff may be included in the temporary administration of the bank preclosure and thus gain 

quicker access to the information. 

By law, within seven days from the bank’s closure, the 

DIA must receive a register of the bank’s depositors that 

lists the deposits and other liabilities of the bank. Once 

the DIA receives this information, it sends letters to all 

eligible depositors describing the procedure for filing 

claims and the location, timing, and form of reimbursement. The DIA also publishes information on the 

payout process in local newspapers and the Bank of 

Russia Bulletin. 

FDIC QUARTERLY 48 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing Deposit Insurance Claims 

Payouts are required by law to start no later than 14 

days from the date a bank is closed. Payment calculations are made on the basis of the register of depositors. 

Adjustments are made if a depositor has borrowed funds 

from the bank. In such cases, the amount borrowed is 

deducted (set off) from the aggregate of all deposits. 

If aggregate deposits exceed the coverage limit but the 

deduction for borrowings brings the sum below the 

insurance limit, the full amount of the net deposits 

is paid. 

Depositors can file their claims immediately after the 

bank is closed. To receive payment, a depositor must 

submit a claims application and identity documents. 

Once the paperwork is submitted, the DIA has three 

days to make the payout. Payments can be by cash or 

funds transferred to an account specified by the depositor. The depositor also receives a reference document 

with information about the accounts that were paid. 

Eligible deposits made in a foreign currency are covered, 

but the reimbursement is made in rubles. To calculate 

the amount of the deposit, the DIA uses the exchange 

rate set by the CBR as of the day the bank fails. A 

depositor who files a claim that exceeds the coverage 

limit is paid an amount equal to the coverage limit. 

The remaining claim is recorded in a claims register, 

which is used to track deposits and other claims that 

are not covered by deposit insurance. These claims are 

paid from the proceeds of the receivership on a pro rata 

basis. Household depositors and the DIA (as the holder 

of subrogated claims) have first priority on the assets of 

the receivership.13 The claims register closes out no 

earlier than 60 days after a failed bank’s receiver 

publishes information on the court decision declaring a 

bank insolvent. 

The United States 

The FDIC’s primary source of funding comes from 

premiums paid by member banks to a deposit insurance 

fund. Additional funding is available through a line of 

credit with the U.S. Department of the Treasury. The 

FDIC also has the authority to borrow from the Federal 

Financing Bank and insured depository institutions. 

The FDIC’s Division of Resolutions and Receiverships 

performs both the claims and receivership functions 

when a bank fails. To prepare for a bank closing, the 

13 According to the Russian Deposit Insurance Law, insured deposits 

are paid from the DIA’s own resources. All other creditors are paid 

from the bankruptcy estate according to the established priority of 

claims on a pro rata basis. 

FDIC reviews the institution’s financial and operational 

information to determine the number of staff likely to 

be needed. A claims agent is appointed to lead the 

claims process. Before the closing, FDIC staff learns as 

much as possible about the failing bank by reviewing 

bank deposit records and making preliminary insurance 

determinations. 

On the day of the closing, claims staff assembles to 

make final payout determinations. If all of the deposits 

in the failed bank are not sold to an acquiring institution, staff conducts an insurance determination to identify which deposits are fully insured. 

During a typical bank closing, the FDIC takes possession of the premises and records of the bank and then 

determines the insured status of deposits. Since the 

FDIC is also the receiver of the bank, it processes the 

claims of uninsured depositors and other claimants. The 

payment to insured depositors and the processing of 

claims that exceed the insurance limit begin the next 

business day after closure. In general, most banks are 

closed on a Friday, and depositors have access to their 

insured deposits on Monday. 

Over the closing weekend, the final insurance determination must be made. Staff locates and aggregates 

deposit accounts that are related by name, address, or 

tax identification number. Then, ownership rights and 

capacities are determined and the insurance limit 

applied. A combined account statement for depositors 

with multiple accounts is prepared. 

In a payout, deposit amounts identified as fully insured 

are either passed to an agent bank in an insured deposit 

transfer or paid to depositors in the form of a check 

mailed to the depositor’s address of record. If an 

account appears to exceed the coverage limit or if other 

questions exist, the FDIC contacts depositors directly; 

additional information may be required before the full 

claim is paid. The FDIC relies primarily on the records 

of the bank to determine the status of depositor claims. 

Insurance payments are available to depositors for 

18 months, after which time all remaining unclaimed 

funds are escheated with the appropriate state. The 

state can attempt to locate the depositors for ten years 

before the funds revert to the FDIC. 

As receiver of the failed bank, the FDIC is also responsible for notifying general creditors of the bank’s failure 

and paying their claims to the extent that funds remain 

after depositors are paid. The FDIC follows a standardFDIC QUARTERLY 49 2010, VOLUME 4, NO. 2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ized receivership claims process, which requires that 

a notice be placed in a local newspaper for three 

consecutive months and an individual notice be mailed 

to creditors on the books and records of the failed bank. 

Creditors may file a claim within the time frame 

provided in the notice—usually 90 days from the date 

of the notice. A determination regarding the validity of 

the claim is made, and if sufficient funds are recovered, 

the general creditors are reimbursed in whole or in part 

by the FDIC. If no funds are available for immediate 

distribution, the claimant gets a receivership certificate 

showing entitlement to a share in the receivership 

estate. 

Staff also identifies depositors with delinquent loans. 

The FDIC may have the right to set off the accounts of 

these depositors. In addition, customers who have uninsured deposits may apply to have their loan balances 

reduced by the amount of their uninsured deposits. 

Conclusion 

The capacity to manage the claims process for a failed 

bank efficiently is an essential function of an effective 

deposit insurance system. It involves satisfying insured 

depositors and often liability holders who have bona 

fide claims against the bank. 

The primary purpose of a deposit insurance system is to 

protect the interests of insured depositors in the event 

of a bank failure. Despite international differences in 

the deposit insurance claims process, most nations share 

a core set of processes for managing claims. A successful 

claims process ultimately depends on having the necessary resources and developing consistent strategies 

within the country. 

Authors: Christine E. Blair, Senior Economist 

Division of Insurance and Research 

Rose M. Kushmeider, Senior Economist 

Division of Insurance and Research 

The authors wish to thank Paul Kupiec and Jack Reidhill of 

the FDIC’s Division of Insurance and Research and James 

Marino of the FDIC’s Division of Resolutions and Receiverships for their advice and comments. They also thank the 

deposit insurance agencies in Canada, the Philippines, and 

the Russian Federation for supplying data and descriptions 

of their systems. 

Bibliography 

Blair, Christine E., Frederick Carns, and Rose M. 

Kushmeider. “Instituting a Deposit Insurance System: 

Why? How?” In Deposit Insurance, eds. Andrew 

Campbell, John Raymond LaBrosse, David G. Mayes, 

and Dalvinder Singh. Basingstoke, U.K.: Palgrave 

Macmillan, 2007. 

Canada Deposit Insurance Corporation. 2007 Annual 

Report. http://www.cdic.ca/multimedia/Website/ 

Documents/ar/en/CDIC_AR07E.pdf. 2007. 

Deposit Insurance Agency. Report of the Deposit Insurance Agency State Corporation for 2006. http://www.asv. 

org.ru/agency/annual/2006/eng/index.html. 2006. 

European Parliament and the Council of the European 

Union. Directive 94/19/EC on Deposit-Guarantee 

Schemes. Brussels: European Union, 1994. 

Federal Deposit Insurance Corporation (FDIC). Annual 

Report. Washington, DC: FDIC, 1935. 

FDIC. Managing the Crisis: The FDIC and RTC Experience, 1980–1994. Washington, DC: FDIC, 1998. 

FDIC. Resolutions Handbook: Methods for Resolving 

Troubled Financial Institutions in the United States. 

Washington, DC: FDIC, 1998. 

Financial Stability Forum (FSF). Guidance for Developing Effective Deposit Insurance Systems. Basel, Switzerland: FSF, 2001. 

FSF Working Group on Deposit Insurance. “Guidance 

for Developing Effective Deposit Insurance Systems.” 

Discussion paper. http://www.fdic.gov/deposit/deposits/ 

international/guidance/guidance/index.html#discussion. 

2001. 

Mason, Joseph, Ali Anari, and James Kolari. “Bank 

Asset Liquidation and the Propagation of the U.S. 

Great Depression.” Paper presented at the Bank Structure and Competition Conference, Federal Reserve 

Bank of Chicago. 2000. 

Philippine Deposit Insurance Corporation. Annual 

Report 2006. http://www.pdic.gov.ph/index.php?nid1=0. 

2006. 

FDIC QUARTERLY 50 2010, VOLUME 4, NO. 2 

Federal Deposit Insurance Corporation

Washington, DC 20429-9990 

OFFICIAL BUSINESS 

PENALTY FOR PRIVATE USE, $300 

STANDARD 

MAIL 

Postage & 

Fees Paid 

FDIC 

Permit No. G-36