The FDIC 

uarte r lY-_______L_.W_i_llia_m_S_e_id_m_an_,_C_ha_ir_m_an 

anking Profile 

COMMERCIAL BANKING PERFORMANCE - FIRST QUARTER 1988 

• First RepublicBank Losses Prevent Quarterly Earnings Record 

• Number of Unprofitable Banks Declines Modestly 

• Insolvencies Running at Same Rate as a Year Ago 

• Midwest Banks Show Greatest Improvement 

First Quarter 1988 

FDIC 

Office of Research 

& Strategic Planning 

John Quinn 

(202) 898-3940 

/ 

U.S. commercial banks earned $5.0 billion in the 

first quarter of 1988, compared to $5.3 billion in 

the first quarter of 1987. Earnings improved in all 

areas of the country except the Southwest. But 

for the $1.49 billion aggregate loss reported by 

First RepublicBank Corp. banks, first quarter 

results would have established a new quarterly 

earnings high. Nationwide, over half of all banks 

reported higher first quarter earnings in 1988 than 

a year ago, and the percentage of unprofitable 

banks fell to less than 13 percent from almost 

15 percent in the first quarter last year. 

Loan growth continued to be led by increases in 

real estate and consumer lending, as commercial 

loan growth remained sluggish. Real estate loans 

were $15.7 billion higher at the end of March than 

at year-end, accounting for 90 percent of aggregate asset growth in the quarter. The increase 

in real estate lending was distributed among construction and development and other commercial 

real estate loans (up $6.6 billion), home equity 

loans (up $1.6 billion), and 1-4 family residential 

mortgage loans (up $3.5 billion). Loans to individuals were up 6.8 percent from year-ago 

levels, but down $0.4 billion from year end. 

Chart A - Composition of Total Loans Outstanding 

March 31, 1988 

13.9% 

• 

D 

Nonperforming assets were slightly below yearago levels, but were up about $1 billion from yearend 1987, despite first quarter charge-offs of $5.0 

billion. The industry's ratio of nonperforming 

assets to assets rose to 2.48 percent. The aggregate loan-loss allowance also was up nearly 

$1 billion in the first three months of 1988, to 

$50.3 billion, representing 78.8 percent of noncurrent loans and leases. 

The industry's net interest income grew 5.9 percent over last year's first quarter, and noninterest 

income continued to grow strongly, up 17.3 percent. First quarter noninterest expenses were up 

8.1 percent over last year. However, employment 

at commercial banks continued to decline, and 

the rate of growth in noninterest expense may 

subside as cost-cutting moves begin to take effect. Net nonrecurring gains contributed a single 

quarter record $165 million to the industry's bottom line in the first quarter. 

The banking sector's equity capital base grew by 

$1.9 billion in the first quarter, after cash 

dividends of $3.3 billion. The industry's ratio of 

equity capital to assets rose slightly to 6.07 percent, up from 6.04 percent at year-end. 

Chart B - Distribution of Noncurrent Loans 

March 31, 1988 

6.6% 

Real Estate 

Consumer 

~ Other Ross Waldrop 

(202) 898-3951 ~ C&I 

For assistance contact: Section508@fdic.gov
Chart C - Quarterly Net Income of FDIC-Insured 

Commercial Banks, 1984-1988 

$Billions 

6>-----------------,5"'.C.B____, 

~ 5--4.8 . 4,7- ,_5..- .o -~5_., _ •4 .. os - --1a-----1,;;+---.5·.....io 

4 ;~ 'ni3 ~i ~5 - ~ , • ::: 3.5 •. , .. 3.5- ,,, .. E. 

2 .. •. i'-i:'; •;, Iii -,;~iii; .. !mil ::: ,i!i: • • ·· ·· m .ie-- w: :: 1m:1 

-10 rn: 1iI " ' 1lii• u -• ,, im:1 0 

-

2 

lfilillilll Securities & other nonrecu.....u. lllfinS 

_ ~ Net onRrs rina income 4 

-6>---------------<ii•>-------t 

- 8f---------------iti!-----; 

- 10>-----------------.,---------1 

1234 1234 1 2 3 4 1 2 3 4 

1984 1985 1986 1987 1988 

Fifty-four banks either failed or received FDIC 

assistance during the first quarter, the same 

number as in last year's first quarter. The number 

of "Problem" banks has continued to decline 

from its peak of over 1,600 institutions in the middle of 1987, reaching 1,491 at the end of March. 

Improvement was most pronounced among 

banks in the agricultural Midwest. In the 

Southwest, banks remain mired in asset-quality 

problems, mainly in real estate loans, and banks 

in that region account for a disproportionately 

large share of the "Problem Bank" list. 

Southwest banks reported aggregate first quarter 

losses representing 2.4 percent of total assets, 

on an annualized basis; however, over 90 percent 

of these losses were concentrated in the subsidiaries of First RepublicBank Corp. While far 

from rosy, the picture of banking in the 

Southwest looks far less bleak when the First 

Republic banks are excluded. 

Impact of the Southwest Region on 

First Quarter 1988 U.S. Banking Aggregates 

Southwest Region 

with excl. Rest of 

FRBC FRBC the U.S. 

Return on assets -2.37% -0.26% 0.97% 

Net charge-offs to loans 

& leases 2.14 1.50 0.75 

Nonperforming assets to 

assets 6.28 5.31 2.10 

Equity capital to assets 5.43 6.20 6.13 

Apart from First RepublicBank subsidiaries, the 

region's banks still registered an aggregate first 

quarter loss. During the quarter, 27 percent of the 

region's banks reported losses, and nonperforming assets reached disturbingly high levels. 

Southwest banks have boosted their loan-loss 

provisions, but reserves against noncurrent loans 

are still low, especially in comparison to other 

regions. Smaller banks in the Southwest have 

begun to show modest improvement, but it likely will take some time before banks benefit 

significantly from improving economic trends in 

that part of the country. 

Improvement among Midwest banks is much 

more apparent. Aggregate profits increased 26 

percent. The levels of nonperforming assets and 

loan-loss expense, as well as the number of 

banks losing money, all dropped significantly. 

The percentage of Midwest banks reporting first 

quarter losses fell from 13.5 percent a year ago 

to only 7.6 percent. 

Improvement was also evident in the West. 

Nonperforming assets fell by 15 percent and net 

income jumped by 59 percent over last year's first 

quarter. While the percent of assets in nonperforming status (3.26%) and the percent of unprofitable banks (19.3%) remain relatively high, 

both showed improvement when compared to 

last year. 

Chart D - Percentage of Banks In Each Region 

Percent on "Problem Bank" List

25 CJ March 31 , 1987 23.2 

■ March 31, 1988 

20 f------- - - -----

15 1-------------+ 

S t-----

0 

NE SE C MW SW w 

Southeast and Central banks continued to exhibit 

strong performance in the first quarter. Earnings 

remained high and nonperforming assets remained low. Banks in the Northeast showed a 

dramatic 35 percent increase in earnings, yielding 

an aggregate return on equity of 17.4 percent. 

Nonperforming assets grew only 2 percent. Equity, however, was 3.5 percent lower than a year 

ago, reflecting the loss provisioning taken by the 

region's large banks last year. 

Overall, the industry should continue to enjoy improved profitability through the rest of the year. 

Large banks will benefit from lower loss provisioning, and banks in the East will continue to 

benefit from a strong regional economy. 

Although it appears that the Southwest's 

economic problems have bottomed out, that 

region will continue to dominate 1988 banking 

news and numbers. 

2 
Table I. Selected Indicators, FDIC-Insured Commercial Banks 

1988* 1987* 1987 1986 198.5 1984 1983 

Return on assets .... ..................... 0.67% 0.72% 0.12% 0.63% 0.70% 0.65% 0.66% 

Return on equity . .................. .... ... 11.00 11.39 2.00 9.94 11.31 10.73 10.70 

Equity capital to assets . . ...... .......... .. 6.07 6.43 6.04 6.20 6.20 6.15 6.00 

Primary capital ratio ... ....... ... .. . . . . .... 7.74 7.57 7.69 722. 6.91 6.91 6.59 

Nonperfonning assets to asse.ts .... . .. . . .. .. 2.48 2.61 2.46 1.94 1.87 1.97 1.97 

Net charg&-0ffs to loans . . ......... . .... .. .. 0.88 0.75 0.92 0.98 0.84 0.76 0.67 

Asset growth rate ....... . ....... . ......... 4.00 6.25 2.03 7.71 8.86 7.11 6.75 

Net operating income growth .... . .. . . . . .... 2.04 9.01 -8527 -20.65 6.30 3.40 -3.69 

Percentage of unprofitable banks .... . . . . . ... 12.84 14.65 17.66 19.79 17.09 13.00 10.58 

Number of problem banks ............. .... . 1,491 1,509 1,559 1,457 1,098 Im 603 

Number of failed/assisted banks ..... .. . . .. . . 54 54 201 144 118 78 45 

• - Through March 31 ; ratios annualized where appropriate 

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

(dollar figures In millions) 

Preliminary 

1st Qtr 4th Qtr 1st Qtr % Change 

1988 1987 1987 87:1-88:1 

Number of banks reporting ..... .... . .... . ...... . . ......... ... ... . 13,541 13,699 14,073 -3.8 

Total employees (full-time equivalent) . . . .... .................... . . . . 1,531,367 1,554,994 1,555,220 -1.5 

CONDmON DATA 

Total assets .. . .. ................ . .. . ......................... . $3,018,230 $3,<XXl,914 $2,900,585 4.1 

Real estate loans ........... .. .. ... .... . .. ... .............. . 615,571 599,904 532,184 15.7 

Commercial & industrial loans ....... . ........ ....... . . .••••.. 596,316 589,675 585,097 1.9 

Loans to individuals ........ ... .. . . .. .... . .. . . . . .... .. ..... . . 350,819 351,216 328,597 6.8 

Farm loans . ..... . .......... . . . .... . ..... . ....... .. . .. .. . . . 28,630 29,426 29,216 -2.0 

Other loans and leases ......................... ... ...... .. . . 257,898 259,002 263,822 -2.2 

Total loans and leases ......... . ............... . . . .... . .. . .. . 1,849,234 1,829,283 1,738,916 6.3 

LESS: Reserve for losses ... .... . . ... ...... . .... .. ....... . .. . 50,303 49,458 29,729 692 

Net loans and leases .. ... .. ... ..... .. .. .... ... .. .... .. .. ..... . 1,798,931 1,TT9,825 1,709,187 5.3 

Temporary investments .................... . ... . ........ . .. .. . . 471 ,707 451,199 450,001 4.8 

Securities over 1 year . . . . . . ..... ... . ............ ... ...•....... 393,473 396,567 366,913 72 

All ~ther assets ................ . ....... . .... . . .. ... .. •... .. .. 354,119 373,323 374,424 -5.4 

Total liabilities and capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,018.230 $3,<XXl,914 $2,900,585 4.1 

Noninterest-bearing deposits . .. .. . . . ......... . . .. •. . . .. . . ... . ... 439,009 4TT,797 462,m -5.1 

Interest-bearing deposits ...... ..... ......... . . . . . ............. . 1,880,123 1,857,104 1,TT8,520 5.7 

Other borrowed funds .. . . . .. . .. . ...............•...... ... .... . 393,922 361 ,447 348,464 13.0 

Subordinated debt .... ... . ........ . .......... . .. . . . ...... . ... . 17,474 17,592 17,282 1.1 

All other liabilities . .. . ... . . ... .. . . ... .... . .. . .............. . . . 104,389 105,605 100,992 -2.4 

Equity capital .. . .. . . ..... . . .. . .. .... .. ..... . .. . ......... .. .. . 183,253 181,369 186,554 -1.8 

Primary capital . ... . ....... ... . .. ..... ... .. ... . .. . .. . .... .. .... . 237,428 234,613 219,637 8.1 

Nonperfonning assets . . . ... .......... . .. ........... .. . ... ...... . 74,800 73,905 75,582 --0.9 

Loan commitments and letters of credit ........ . .. . ........... ... . . 002,308 794,698 752,650 6.6 

Domestic office assets .. . ........ . . .. .. . ......•. . ....... . . . ..... 2,585,400 2,575,379 2,4TT,493 4.4 

Foreign office assets .. . ........... . ... . . . .. . ..••. .. ... .. . . .. .. .. 432,824 425,535 423,092 2.3 

Domestic office deposits . ...... ........ . . ....................... . 1,985,465 1,993,293 1,908,973 4.0 

Foreign office deposits ............. . ..... . .... . ................ . 333,727 341,608 332,320 0.4 

Earning assets . . . . ... .. ..... . ... .. .. . . . .. .. .. .. ...... . ...... . . . 2,664,111 2,627,591 2,526,161 5.5 

Volatile liabilities . . ......... .. ...... ..... ... . .................. . 1,0TT,456 1,049,222 993,705 8.4 

Preliminary 

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

1987 1986 % Change 1988 1987 % Change 

Total interest income ..... . ... . ... . .. $244,891 $237,806 3.0 $64,147 58,426 9.8 

Total interest expense ..... . . ....... 144,921 142,825 1.5 38,615 34,311 12.5 

Net interest income .... . .. . .. .. .. 99,970 94,981 5.3 25,532 24,115 5.9 

Provisions for loan losses ... .. . ... .. 36,999 22,075 67.6 4,698 4,107 14.4 

Total noninterest income .. .. . . .•. ••. 41,459 35,890 15.5 11,024 9,399 17.3 

Total noninterest expense .. . . ... . ... 97,053 90,247 7.5 25,030 23,144 8.1 

Applicable Income taxes ...... . ... . . 5,424 5,288 2.6 2,371 1,895 25.1 

Net operating income ........ ... .. 1,953 13,261 -85.3 4,457 4,368 2.0 

Securities gains, net . . .. ......... .. . 1,445 3,950 -63.4 390 795 -50.9 

Extraordinary gains, net . . ..•.. . . . . . . 218 272 -29.9 165 89 85.4 

Net income .. . ......... ..... . . . . 3,616 17,483 -79.3 5,012 5,252 -4.6 

Net charge-offs .. . ................. 16,360 16,550 -1 .1 4,031 3,269 23.3 

Net additions to capital stock ... . .. .. 2,561 3,244 -21.1 129 40 222.5 

Cash dividends on capital stock .. . . . . 10,648 9,228 15.4 3,295 2,334 41 .2 

3 
Table Ill. First Quarter Bank Data (Dollar figures in billions, ratios in %) 

Asset Size Distribution Geographic Distribution 

Less Greater EAST WEST 

than $100 $1~1,COO $1-10 than $10 Northeast Southeac;t Central Midwest Southwest West 

All Banks MIiiion Million Billion BIiiion Region Region Region Region Region Region 

CURRENT QUARTER 

Preliminary (The way it is . . . ) 

Number of banks reporting .... . ..... ... 13,541 10,805 2,379 320 37 1,086 1,927 3,002 3,181 2,811 1,534 

Total assets ....... . . . ...... . .. .. . . .. . $3,018.2 $391.2 $568.8 $933.5 $1,124.7 $1,203.9 $410.3 $4TT.4 $204.0 $274.7 $447.9 

Total deposits .. . ............ . . ....... 2,319.2 349.1 487.0 704.0 779.1 861 .9 326.1 384.3 159.9 224.7 362.3 

Net income ~n ml/lions/ .••• • .• • . ••• • • • .•• 5,012 731 998 1,725 1,558 2,831 1,031 1,335 541 -1 ,644 918 

Percentage of banks losing money ....... 12.8% 14.1% 8.1% 6.6% 2.7% 7.9% 11.3% 4.6% 7.6% 27.0% 19.3% 

Perfonnance ratios (annualized) 

Yield on earning assets .... . ... ..... . . . 9.70% 9.59% 9.61% 9.63% 9.96% 9.99% 9.63% 9.33% 9.92% 9.20% 9.90% 

Cost of funding earning assets . . ........ 5.84 527 5.34 5.46 6.70 6.50 5.42 5.49 5.60 5.85 5.16 

Net interest margin ............ . . . .. . .. 3.86 4.32 427 4.17 326 3.49 4.21 3.84 4.32 3.35 4.74 

Net noninterest expense to earning assets 2.12 2.79 2.65 2.33 1.43 1.63 2.44 1.96 2.07 3.00 2.~ 

Adjusted net operating income to assets .. 1.54 1.39 1.46 1.62 1.57 1.63 1.57 1.67 2.01 0.30 1.68 

Net operating income to assets ..... .... 0.59 0.69 0.64 0.68 0.47 0.87 0.94 1.06 1.02 -2.48 0.76 

Return on assets . .. . .... . ..... . ... . .. 0.67 0.75 0.71 0.74 0.56 0.95 1.01 1.12 1.07 -2.37 0.83 

Return on equity . . ....... . ... . . ...... . 11 .00 8.71 9.67 12.04 12.64 17.39 14.75 16.88 14.34 -4121 14.31 

Net charge-0ffs to loans and leases ... ... 0.88 0.64 0.60 0.96 1.01 0.69 0.68 0.78 1.39 2.14 0.76 

Loan loss provision to net charge-offs .... 116.58 127.47 147.84 101 .16 117.71 91.51 84.08 75.87 81 .45 222.15 105.36 

Condition Ratios 

Loss allowance to: 

Loans and leases .. .... .. .. ......... 2.72% 1.68% 1.66% 1.91% 4.24% 3.06% 1.33% 2.17% 2.13% 4.12% 3.11% 

Noncurrent loans and leases .. . ....... 79.73 58.32 70.03 86.17 89.57 82.49 95.83 118.04 79.58 51.00 n22. 

Nonperforming assets to assets ... . ..... 2.46 2.16 1.93 1.81 3.42 2.40 1.06 1.26 1.87 6.28 3.26 

Equity capital ratio ...... .. ............ 6.07 8.72 7.31 6.19 4.41 5.52 6.94 6.74 7.43 5.43 5.76 

Primary capital ratio ......... .. ... ..... 7.74 9.49 8.14 728 7.32 7.54 7.65 7.99 8.55 7.45 7.95 

Net loans and leases to deposits .... . . . . 78.78 61.41 69.n 81 .73 82.37 86.11 TT.65 74.40 71 .05 67.85 83.98 

Growth Rates (year-to-year) 

Assets .. . .... .... ... ... . . .. .. . ...... 4.1% 5.1% 10.2% 12.5% 3.1% 5.1% 9.0% 4.9% --0.8% -6.5% 1.6% 

Equity capital ... . . . ... . .......... .... -1 .8 3.7 8.1 10.0 -14.5 -3.5 10.4 0.4 1.4 -22.5 1.8 

Net interest Income ... . .... . .. . . . .... . 5.9 4.3 8,4 15.0 5.7 6.8 6.5 7.9 4.7 -7.3 5.7 

Net Income ....... ..... . .. .... .. . .. . . -4.6 0.3 -15.7 -4.6 0.7 35.1 1.6 23.2 25.8 N/M 58.6 

Nonperforming assets .... . ............ --0.9 --0.5 18.3 20.5 -32 1.9 52 -14.9 -16.0 27.3 -14.7 

Net charge-offs .... . . . .. . ... . .. . ... . . . 23.3 -13.0 1.4 71 .9 28.5 31 .1 72.2 86.7 -1.3 30.3 -23.4 

Loan loss provision ........ . ... . . . . . .. 14.4 -14.5 24.8 37.0 21.9 -19.3 5.5 12 -29.1 165.9 -242 

PRIOR FIRST QUARTERS 

(The way It was . . . ) 

Return on assets ....... . .... .. ... 1987 0.72% 0.72% 0.85% 0.84% 0.55% 0.73% 1.08% 0.95% 0.84% 0.10% 0.52% 

.. . ... . .. .. ...... 1985 0.75 0.92 0.91 0.78 0.60 0.78 1.14 0.83 0.82 0.59 0.52 

...... . . . ........ 1983 0.78 1.24 0.93 0.67 0.54 0.72 1.03 0.79 1.14 1.09 0.40 

Equity capital ratio . .. . . .. . .. ... . . 1987 6.43 8.54 7.39 6.16 5.32 6.01 6.85 7.05 7.39 6.55 5.96 

.. . ..... . ... . .... 1985 6.29 8.65 7.25 5.95 4.92 5.65 6.83 6.91 7.62 7.00 5.67 

. . ... . .. . ... . ... . 1983 6.02 8.68 7.14 5.73 4.30 527 6.92 6.70 7.63 6.99 5.07 

Nonperforming assets to assets .... 1987 2.61 2.36 1.98 1.82 3.73 2.58 1.10 1.55 2.25 4.63 3.90 

. . . .. . .. .. .. . . . . .1985 2.09 2.06 1.65 1.74 2.67 1.84 1.12 1.73 2.32 2.48 3.34 

. . . .. .. .. . ... .. . .1983 2.08 1.63 1.74 2.02 2.53 1.63 1.27 2.24 1.66 2.15 3.45 

Net charge-offs to loans and leases .1987 0.75 0.86 0.76 0.62 0.83 0.56 0.45 0.45 1.43 1.53 1.00 

.. .. .. .. .. .. ..... 1985 0.58 0.72 0.50 0.54 0.60 0.37 0.35 0.48 1.08 0.93 0.82 

. ......... . .. . . .. 1983 0.52 0.44 0.56 0.64 0.46 0.38 0.57 0.55 0.47 0.75 0.62 

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

Puerto Rico, Rhode Island, Vermont 

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

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

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

Southwest - Arl<:ansas, Louisiana, New Mexico, Oklahoma, Texas 

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

4 
Table IV. Full Year 1987 Bank Data (Dollar figures in billions, ratios in %) 

Asset Size Distribution Geographic Distribution 

Less Greater Ten EAST WEST 

than $100 $1~ $:ID1 ,(XX) $1-5 than $.5 Largest Northeast Southeast Central Midwest Southwest West 

All Banks Million Million Million Billion Billion Banks Region Region Region Region Region Region 

Number of banks 

reporting .. . ... .. .. 13,699 10,927 1,884 536 268 74 10 1,081 1,924 3,053 3,232 2,873 1,536 

Total assets . . . . . . . . . $3,000.9 $393.8 $304.0 $272.5 $589.5 $7612 $679.9 $1,100.1 $400.8 $41:Kl.3 $208.6 $200.4 $444.7 

Total deposits . ... ... . 2,334.9 351.5 267.1 226.7 455.1 536.3 498.2 8652 323.3 387.7 163.9 229.8 365.0 

Net income (In ml/lions) . . 3,616 2,120 2,337 1,725 3,058 5 -5,619 -1 ,535 3,590 2,029 1,3n -1,779 ..ffi 

Percentage of banks 

losing money .. ... ... 17.7% 19.4% 9A% 11.6% 12.3% 24.3% 90.0% 9.7% 8.4% 5.8% 12.6% 36.1% 24.2% 

Performance Ratios 

Yield on earning assets . 9.54% 9.65% 9.59% 9.66% 9.62% 9.55% 9.99% 9.00% 9.74% 9.29% 10.02% 9.20% 9.98% 

Cost of funding 

earning assets .. .. . . 5.65 5.22 5.17 5.23 5.34 5.73 6.82 6.26 5.28 5.42 5.66 5.69 5.18 

Net interest margin ... 3.89 4.43 4.41 4.43 4.27 3.82 3.17 3.54 4.46 3.87 4.36 3.51 4.lll 

Net noninterest expense 

to earning assets ... .. 2.17 2.86 2.66 2.64 2.38 1.98 1.51 1.74 2.52 2.16 2.03 2.57 2.98 

Net operating 

income to assets .. . . 0.07 0.52 0.75 0.62 0.51 -0.05 -0.89 -0.22 0.91 0.40 0.68 -0.70 -0.05 

Return on assets . .... 0.12 0.57 0.81 0.67 0.56 -0.00 --0.81 -0.13 0.95 0.44 0.70 -0.65 -0.01 

Return on equity .. .. . 2.00 6.62 10.55 9.60 8.60 -0.01 -18.29 -2.37 13.96 6.51 9.39 -10.03 -0.25 

Net charge-offs to 

loans and leases .... 0.92 1.15 0.82 0.95 0.92 1.04 0.78 0.68 0.70 0.69 1.63 2.11 1.09 

Condition Ratios 

Loss allowance to 

loans and leases .. .. 2.69% 1.64% 1.50% 1.60% 1.85% 2.92% 4.62% 3.15% 1.38% 2.24% 2.20% 3.09% 3.12% 

Nonperforming assets 

to assets . . . . .. .. ... 2.46 2.09 1.75 1.88 1.92 2.28 3.88 2.44 1.03 1.27 1.86 5.00 3.27 

Loss allowance to 

noncurrent loans 78.00 61 .53 68.59 70.68 75.36 88.08 78.72 83.33 100.17 117.92 00.85 41.20 76.79 

Equity capital ratio .... 6.04 8.60 7.61 6.88 6.40 5.11 4.24 5.43 6.81 6.52 7.45 6.06 5.76 

Primary capital ratio .. . 7.81 9.42 8.42 7.75 7.41 7.12 7.75 7.51 7.52 7.78 8.57 7.54 7.96 

Net loans and leases 

to assets ........... 59.30 51.11 56.61 60.92 63.09 61.21 59.19 59.60 60.12 57.57 53.15 53.90 65.95 

Net assets repriceable 

in one year or less 

to assets . . .... .. ... -7.22 -9.39 -7.52 -7.40 -8.18 -8.01 -4.06 -6.07 -12.06 -4.60 -13.67 -11.27 - 3.13 

Growth Rates 

(year-to-year,! 

Assets .... . ......... 2.0% 4.0% 5.9% 7.7% 9.4% 8.4% -1 .8% 4.1% 6.6% 3.6% 1.0% -7.1% -2.0% 

Earning assets .. . .. .. 3.1 4.6 7.0 9.0 10.7 10.0 -1 .3 5.1 7.6 4.3 1.5 -7.3 0.5 

Loans and leases ..... 4.1 6.9 10.4 12.0 14.9 9.3 -3.0 5.9 11 .4 7.0 3.4 -8.3 -0.4 

Loss reserve ......... 71 .1 11.1 16.5 21.0 43.4 98.9 141.7 123.9 18.2 65.8 17.1 20.0 63.8 

Net charge-offs . .. .. .. -1 .1 -20.9 -10.4 16.1 24.4 40.6 -15.4 19.0 24.9 5.5 -22.2 -12.4 -11 .2 

Nonperforming assets . 29.0 0.6 9.2 20.3 41 .8 58.5 49.7 64.6 15.4 1.2 -6.3 32.0 8.1 

Deposits .. .. . . ... .. . 2.3 4.1 5.4 6.1 9.1 9.0 0.2 4.7 6.0 4.5 1.6 -6.8 -2.2 

Equity capital .. . .... . -0.5 4.2 8.7 8.6 11.5 0.8 -16.3 -2.7 10.5 -0.5 5.8 -12.0 -0.5 

Interest income . . .... 3.0 -1 .2 3.3 6.0 11.3 11.6 3.8 10.2 5.1 1.3 -1 .6 -11 .3 -2.4 

Interest expense . . .. . . 1.5 -5.8 - 1.3 1.6 7.4 11.2 6.3 11.7 1.4 -1 .8 -4.6 -12.7 -8.2 

Net interest income . .. 5.3 4.9 9.3 11 .6 16.5 12.1 -1 .1 7.7 9.9 6.2 2.6 -8.9 4.6 

Loan loss provision . .. 67.6 -23.1 -15.9 5.3 36.0 141..5 173.8 204.0 23.8 96.4 -19.1 17.2 43.0 

Noninterest income ... 15.5 10.5 11 .4 13.0 21 .8 18.6 23.6 27.4 11 .5 8.9 12.5 4.7 2.2 

Noninterest expense .. 

Net operating income . 

7.5 

-85.3 

6.2 

49.2 

9.0 

28.2 

10.7 

13.5 

15.5 

-5.9 

15.9 

N/M 

9.1 

NIM 

12.7 

N/M 

7.1 

10.4 

6.0 

-44.1 

4.2 

n.4 

-0.1 

N/M 

4.5 

N/M 

Net income . .. ... . ... -79.3 11 .4 10.8 -1 .0 -14.0 N/M N/M N/M 0.4 -47.0 -1.6 N/M N/M 

5 
FDIC 

Washington, 

Federal Deposit 

DC 20429 

Insurance Corporation (I]

OFFICIAL BUSINESS 

Penalty for Private Use, $300 Postage and Fees paid 

Federal Deposit 

Insurance Corporation 

FDIC-616 

NOTES TO USERS 

COMPUTATION METHODOLOGY FOR PERFORMANCE AND CONDITION RATIOS 

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

All asset and liability figures used in calculating performance ratios represent average amounts for the period (beginning-of-period amount plus end-of-period amount 

plus any periods in between, divided by the total number of periods). 

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

DEFINITIONS 

"Problem" Banks-Federal regulators assign to each financial institution a uniform composite rating, based upon an evaluation of financial and operational criteria. 

The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. "Problem" banks are those institutions with financial, operational or managerial 

weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either "4" or "5". 

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

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

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

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

Net Nonlnterest Expense-total non interest expense, excluding the expense of providing for loan losses, less total non interest income. A measure of banks' overhead 

costs. 

Net Operating Income-income after taxes and before gains (or losses) from securities transactions and from nonrecurring items. The profit earned on banks' regular 

banking business. 

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

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

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

and leases previously charged off. 

Nonperforming Assets-the sum of loans past-due 90 days or more, loans in nonaccrual status, and noninvestment real estate owned other than bank premises. 

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

Primary Capital-total equity capital plus the allowance for loan and lease losses plus minority interests in consolidated subsidiaries plus qualifying mandatory convertible debt (cannot exceed 20 percent of total primary capital), less intangible assets except purchased mortgage servicing rights. 

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

Net Assets Reprlceable In One Year or Less-all assets with interest rates that are repriceable in one year or less plus assets with remaining maturity of one year 

or less, minus all liabilities that are repriced or due to mature within one year of the reporting date. A positive value indicates that banks' income from assets is more 

sensitive to movements in interest rates than is the expense of their liabilities, and vice-versa for a negative value. 

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

securities with remaining maturities of one year or less. 

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

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

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