FDIC Quarterly

Quarterly Banking Profile:

Third Quarter 2010

Toward a Long-Term Strategy 

for Deposit Insurance 

Fund Management

Highlights from the 2010 

Summary of Deposits

2010, Volume 4, Number 4
Chairman Sheila C. Bair

Director, Division of Insurance Arthur J. Murton

 and Research

Executive Editors Rae-Ann Miller

Maureen E. Sweeney

Managing Editors Richard A. Brown

Diane L. Ellis

Paul H. Kupiec

Christopher J. Newbury

Editor Kathy Zeidler

Publication Manager Lynne Montgomery

Media Inquiries (202) 898-6993

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.
2010, Volume 4, Number 4

FDIC Quarterly

The views expressed are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance 

Corporation. Some of the information used in the preparation of this publication was obtained from publicly available sources 

that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the 

Federal Deposit Insurance Corporation. Articles may be reprinted or abstracted if the publication and author(s) are credited. 

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

Quarterly Banking Profile: Third Quarter 2010

FDIC-insured institutions reported an aggregate profit of $14.5 billion in the third quarter of 2010, a $12.5 billion 

improvement from the $2 billion the industry earned in the third quarter of 2009. This is the fifth consecutive 

quarter that earnings have registered a year-over-year increase. Almost two-thirds of all institutions reported 

improvements in their quarterly net income from a year ago, but nearly one in five institutions had a net loss for 

the quarter. The average return on assets (ROA) rose to 0.44 percent, from 0.06 percent a year ago. See page 1.

Insurance Fund Indicators

Estimated insured deposits (based on $250,000 coverage) declined by 0.3 percent during the third quarter 

of 2010. The Deposit Insurance Fund reserve ratio was -0.15 percent on September 30, 2010, up from 

-0.28 percent on June 30, 2010, and -0.16 percent one year earlier. Forty-one FDIC-insured institutions 

failed during the quarter. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) 

revised the statutory authorities governing the FDIC’s management of the deposit insurance fund and 

requires that the FDIC change the deposit insurance assessment base from domestic deposits to average 

assets less average tangible equity. The FDIC is implementing these changes and related changes to 

risk-based premium rates through the rulemaking process. See page 14.

Temporary Liquidity Guarantee Program

As of September 30, 2010, about 74 percent of FDIC-insured institutions have opted in to the Transaction 

Account Guarantee Program, and 7,489 eligible entities elected the option to participate in the Debt 

Guarantee Program. Approximately $107 billion in non-interest-bearing transaction accounts was guaranteed as of September 30, 2010, and $287 billion in guaranteed senior unsecured debt, issued by 68 entities, 

was outstanding at the end of the third quarter. See page 19.

Toward a Long-Term Strategy for Deposit Insurance 

Fund Management

The FDIC has developed a comprehensive, long-range management plan for the Deposit Insurance Fund. 

The plan is designed to reduce pro-cyclicality; keep assessment rates moderate, steady, and predictable throughout economic and credit cycles; and maintain a positive fund balance even during a period of large fund losses. 

This article presents the FDIC analysis that informed the medium- and long-term elements of the plan. Using 

multiple simulations, this analysis demonstrates that a moderate, long-term average industry assessment rate, 

combined with an appropriate dividend or assessment rate reduction policy, would have prevented the fund 

from becoming negative during both the crises of the 1980s and early 1990s and the current crisis. However, 

the fund’s reserve ratio would have had to have exceeded 2 percent before the crises began. See page 29.

Highlights from the 2010 Summary of Deposits

Each year as of June 30, the FDIC and the Office of Thrift Supervision survey each FDIC-insured institution to 

collect information on bank and thrift deposits and operating branches and offices. The resulting Summary of 

Deposits (SOD) is a valuable resource for analyzing deposit and office trends as well as domestic deposit market 

share. This article highlights findings from the 2010 SOD. See page 41.

FDIC Quarterly 1 2010, Volume 4, No. 4

Quarterly Banking Profile Third Quarter 2010

Net Income Continues to Improve

Resilient revenues and improving asset quality 

remained a positive combination for insured institution 

earnings in the third quarter. Net income for the 7,760 

insured commercial banks and savings institutions 

reporting quarterly financial results totaled $14.5 

billion, a considerable improvement over the $2 billion 

reported a year ago. Third quarter net income was 

below the $17.7 billion and $21.4 billion reported in 

the first and second quarters of this year, respectively, 

but the shortfall was attributable to a $10.1 billion 

quarterly net loss at one large institution that had a 

$10.4 billion charge for goodwill impairment. Absent 

this loss, third quarter earnings would have represented 

a three-year high. Almost two out of every three institutions (63.3 percent) reported higher net income than 

a year earlier, and fewer than one in five (18.9 percent) 

was unprofitable. This is the lowest percentage of 

unprofitable institutions since second quarter 2008. 

A year ago, more than 27 percent of all institutions 

reported negative net income.

Quarterly Provisions Are Lowest Since 2007

Provisions for loan losses totaled $34.9 billion, the 

lowest quarterly amount since fourth quarter 2007 and 

$28 billion (44.5 percent) less than insured institutions 

set aside a year earlier. Other contributions to the yearover-year improvement in earnings came from net 

interest income, which increased by $8.1 billion (8.1 

percent), and realized gains on securities and other 

assets, which totaled $3.2 billion in the quarter, a 

$7.3 billion improvement over the $4.1 billion in realized losses reported a year earlier. The improvement in 

net income was limited by higher noninterest expenses, 

which were $14.8 billion (16 percent) more than a year 

earlier and included the large goodwill impairment 

charge. Increased income taxes (up $11.3 billion) also 

reduced reported earnings, as did lower noninterest 

income, which was $4.5 billion (7.2 percent) below the 

level of a year ago. The year-over-year decline in noninterest income was led by a $2.9 billion reduction in 

servicing fee income, a $2.2 billion decline in service 

■ Year-Over-Year Earnings Improve for Fifth Consecutive Quarter

■ Net Income Totals $14.5 Billion, Up from $2 Billion a Year Earlier

■ Lower Loan-Loss Provisions Remain Key to Earnings Gains

■ Asset Quality Trends Continued to Improve

■ Industry Assets Increase by $163 Billion

INSURED INSTITUTION PERFORMANCE

Earnings Had Strong Year-Over-Year Improvement

Securities and Other Gains/Losses, Net

Net Operating Income

-40

-30

-20

-10

0

10

20

30

40

50

60

36.9 38.0 38.0 35.3 35.6 36.8

28.7

0.5

19.3

4.8 0.9

-37.8

5.5

-4.4

2006 2007 2008 2009

2.0

-1.8

2010

17.7

21.4

14.5

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

Billions of Dollars

Chart 1 Chart 2

Provisions Were $28 Billion Lower than a Year Ago

Year-Over-Year Change in Quarterly Earnings

(Billions of Dollars)

Positive Factors

Negative Factors

50

45

40

35

30

25

20

15

10

5

0

$4.5

$14.8

$28.0

$11.3

$8.1

$7.3

Increase in 

Income Taxes

Increase in Net

Interest Income

Increase in Realized

Gains on Securities

Increase in 

Noninterest Expense

Decline in

Noninterest Income

Decline in Loan

Loss Provisions
FDIC Quarterly 2 2010, Volume 4, No. 4

Chart 4

Community Bank Margins Continue to Improve

Assets < $1 Billion

Assets > $1 Billion

3.83

3.74

Quarterly Net Interest Margin

(Percent)

2.5

3.0

3.5

4.0

4.5

1234123412341234123412 3

2005 2006 2007 2008 2009 2010

charges on deposit accounts, a $1.8 billion drop in 

trading revenue, and a $1 billion decline in securitization income. Much of the year-over-year increase in net 

interest income and the declines in servicing and securitization income reflect the effect of new accounting 

rules on financial reporting that became effective in 

2010.1 Quarterly earnings have improved year-over-year 

in each of the past five quarters. Loss provisions have 

declined year-over-year in each of the past four quarters.

Charge-Offs Are Lower in Most Loan Categories

For the second quarter in a row, net charge-offs 

(NCOs) were lower than in both the previous quarter 

and the year-earlier quarter. Third quarter NCOs 

totaled $42.9 billion, compared to $49.1 billion in the 

second quarter and $50.9 billion in the third quarter of 

2009. Prior to the past two quarters of improvement, 

quarterly NCOs had increased year-over-year for 13 

consecutive quarters. NCOs for most major loan categories declined year-over-year in the third quarter. 

Commercial and industrial (C&I) loan NCOs were 

$3.6 billion (41.8 percent) lower than a year earlier, 

while one-to-four family residential mortgage loan 

NCOs were $3.0 billion (31.6 percent) less. Real estate 

construction and development (C&D) loan NCOs 

were down by $2.5 billion (32.4 percent), and NCOs 

of non-credit card consumer loans were $2.0 billion 

1

 See FASB Statements 166 & 177 in Notes to Users.

(41.1 percent) lower. Among the loan categories with 

year-over-year increases in NCOs, credit card NCOs 

were up by $4.3 billion (43.3 percent), as a result of the 

application of FASB 166 and 167, while NCOs of real 

estate loans secured by nonfarm nonresidential properties were $1.1 billion (46.2 percent) higher.2

Noncurrent Loan Balances Decline

The amount of loans and leases that were noncurrent 

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

for a second consecutive quarter. Noncurrent balances 

declined by $8.3 billion (2.1 percent) in the third quarter, after an $18.9 billion (4.6 percent) decline in the 

second quarter. Before these two quarterly declines, the 

industry’s noncurrent loan balances had risen for 16 

consecutive quarters. As was the case with NCOs, 

noncurrent balances for most major loan categories 

declined. The largest declines occurred in C&D loans 

(down $5.7 billion, or 8.9 percent in the quarter), credit 

cards (down $2 billion, or 11.2 percent), one-to-four 

family residential mortgages (down $1.7 billion, or 0.9 

percent), and C&I loans (down $1.5 billion, or 4.3 

percent). Noncurrent balances increased in multifamily 

residential real estate loans (up $1.2 billion, or 13.6 

percent) and in nonfarm nonresidential real estate 

loans (up $604 million, or 1.3 percent).

2

 Ibid.

Chart 3

Loss Provisions Account for a Falling Share

of Industry Revenue Billions of Dollars

0

20

40

60

80

100

120

140

160

180 Quarterly Loan-Loss

Provision

Quarterly Net Operating Revenue*

2005 2006 2007 2008 2009 2010

* Net operating revenue = net interest income + noninterest income

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
FDIC Quarterly 3 2010, Volume 4, No. 4

Quarterly Banking Profile

Securities Portfolios Drive Growth in 

Industry Assets

Total assets of insured institutions increased by $163 

billion (1.2 percent) during the quarter. Notwithstanding the increase in reported assets in the first quarter 

that reflected new financial reporting rules, this is the 

first real growth in industry assets since fourth quarter 

2008. Interest-bearing assets increased by $154.8 billion 

(1.4 percent), as investment securities portfolios rose by 

$113.7 billion (4.5 percent). Assets held in trading 

accounts were up by $86.9 billion (12.8 percent). 

Reported loan balances declined for the eighth time in 

the past nine quarters. Total loans and leases fell by 

$6.8 billion (0.1 percent), as C&D loans declined by 

$28.9 billion (7.6 percent) and credit card balances 

and other loans to individuals fell by $16.1 billion 

(1.2 percent). Loans to depository institutions grew 

strongly during the quarter, increasing by $27.8 billion 

(36.4 percent). C&I loans increased for the first time 

in eight quarters, rising by $4.9 billion (0.4 percent). 

One-to-four family residential mortgages increased 

for the first time in six quarters, rising by $5.3 billion 

(0.3 percent). Unused loan commitments were up by 

$34.1 billion (0.6 percent). Indications of credit risk in 

industry assets continued to fall in the third quarter. 

The ratio of risk-weighted assets (used in calculating 

risk-based capital ratios) to total assets declined from 

69.1 percent to 68.3 percent during the quarter, as total 

risk-weighted assets increased by only $2.8 billion 

(0.03 percent). This is the lowest level for this ratio 

since first quarter 1995. 

Lower Provisions Lead to a Fall in Reserves

The industry’s reserves for loan losses declined for a 

second consecutive quarter, falling by $9.6 billion 

(3.8 percent), as NCOs took $42.9 billion out of 

reserves while loss provisions added only $34.9 billion. 

Almost 60 percent of insured institutions increased 

their reserves during the quarter, but the 34.4 percent 

that reduced their reserves included nine of the ten 

largest banks, and 54 of the 100 largest. The reductions 

in reserves contributed to the industry’s coverage ratio 

of reserves to noncurrent loans falling from 65.0 percent 

to 63.9 percent during the quarter. 

Leverage Capital Posts Strong Growth

Equity capital increased by $18.4 billion (1.2 percent) 

during the quarter, compared to a $27.2 billion (1.9 

percent) increase in the second quarter. The smaller 

increase in equity in the third quarter reflected the 

$10.4 billion write-down of goodwill. Tier 1 leverage 

capital, which does not include goodwill, increased by 

$24 billion (2.1 percent). This is the largest quarterly 

increase since first quarter 2009, when the Troubled 

Asset Relief Program (TARP) contributed to a $67.6 

billion surge in leverage capital. Almost three out of 

four institutions (74.5 percent) increased both their 

leverage capital and total risk-based capital during 

the quarter. Insured institutions paid $13.3 billion in 

dividends in the third quarter, compared to $20.1 

billion a year earlier.

Chart 5

Asset Quality Indicators Exhibit Further Improvement

Billions of Dollars

-20

0

20

40

60

80

100

12341234123412 3

Quarterly Change in Noncurrent Loans

Quarterly Net Charge-Offs

2007 2008 2009 2010

Chart 6

Reductions in Loss Reserves Lead to Erosion in

Coverage of Bad Loans Coverage Ratio

(Percent)

0

20

40

60

80

100

120

140

160

180

200

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

0

1

2

3

4

5

6

Coverage Ratio 

(Reserves as a % of Noncurrent Loans)

Noncurrent Rate

(Noncurrent Loans as a % of Total Loans)

58.66%

(6/30/91)

3.79%

(6/30/91)

5.43%

(12/31/09)

57.70%

(12/31/09)

Noncurrent Loan Rate

(Percent)
FDIC Quarterly 4 2010, Volume 4, No. 4

The Number of “Problem” Institutions Continues 

to Rise

The number of insured commercial banks and savings 

institutions reporting quarterly financial results fell from 

7,830 in the second quarter to 7,760 in the third quarter. Five new reporting institutions were added during 

the quarter, while 30 institutions were absorbed into 

other charters through mergers. Forty-one institutions 

failed in the third quarter, bringing the total number of 

failures for the first nine months of 2010 to 127. The 

number of insured institutions on the FDIC’s “Problem 

List” increased from 829 to 860 during the quarter. This 

is the largest number of “problem” institutions since 

March 31, 1993, when there were 928. Total assets of 

“problem” institutions declined for the second quarter 

in a row, from $403.2 billion to $379.2 billion. The 

number of employees (full-time equivalent) increased 

for a second consecutive quarter, after falling in each 

of the previous 12 quarters. The 0.4 percent (8,195) 

increase lifted the industry’s total employment to 

2.04 million, which is still 8.2 percent below the peak 

of 2.22 million reported in first quarter 2007.

Author: Ross Waldrop, Sr. Banking Analyst

Division of Insurance and Research

(202) 898-3951

Deposits Increase by 1.5 Percent

Deposits funded 81 percent ($132.6 billion) of the 

growth in assets during the quarter. Deposits in foreign 

offices increased by $62.3 billion (4.2 percent), while 

domestic office deposits rose by $70.3 billion (0.9 

percent). Most of the growth in domestic deposits 

occurred in large denomination noninterest-bearing 

deposits. Interest-bearing deposits in domestic offices 

increased by only $9.5 billion (0.2 percent), while 

estimated insured deposits fell by $15.9 billion (0.3 

percent). Time deposits fell for the seventh consecutive 

quarter, declining by $73.4 billion (3.4 percent). 

Nondeposit liabilities increased by only $12 billion 

(0.5 percent) during the quarter. Federal Home Loan 

Bank (FHLB) advances declined by $43 billion (9.7 

percent), marking the eighth consecutive quarter that 

FHLB advances have fallen. During this period, total 

balances declined by $509.1 billion (55.8 percent).

Chart 7

Net Decline in Loans Was Smallest in Two Years

43.4

188.9

237.3

202.6

61.4

28.1

-6.3

-116.2

-139.6

-108.6

-210.3

-133.2

220.9

-106.6

-6.8

-250

-200

-150

-100

-50

0

50

100

150

200

250

300

12341234123412 3

Quarterly Change in Reported Total Loans Outstanding

(Billions of Dollars)

2007 2008 2009 2010

Chart 8

The Number of “Problem” Institutions Is Highest

Since 1993

Number of Institutions

48 50 47 50 53 61 65 76 90 117

171

252

305

416

552

702

775

829860

0

100

200

300

400

500

600

700

800

900

1234123412341234123

2006 2007 2008 2009 2010
FDIC Quarterly 5 2010, Volume 4, No. 4

Quarterly Banking Profile

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

Return on assets (%)������������������������������������������������������������������������������������������������������ 0.56 0.09 0.07 0.03 0.81 1.

Return on equity (%)������������������������������������������������������������������������������������������������������� 5.00 0.84 0.70 0.35 7.75 12.3

Core capital (leverage) ratio (%) ������������������������������������������������������������������������������������ 8.99 8.54 8.63 7.47 7.97 8.

Noncurrent assets plus other real estate owned to assets (%) ������������������������������������ 3.25 3.08 3.36 1.91 0.95 0.

Net charge-offs to loans (%) ������������������������������������������������������������������������������������������ 2.59 2.38 2.50 1.29 0.59 0.

Asset growth rate (%) ����������������������������������������������������������������������������������������������������� 1.03 -2.40 -5.30 6.19 9.88 9.

Net interest margin (%)��������������������������������������������������������������������������������������������������� 3.78 3.45 3.47 3.16 3.29 3.

Net operating income growth (%)����������������������������������������������������������������������������������� 291.33 -64.54 50.07 -90.71 -27.59 8.5

Number of institutions reporting������������������������������������������������������������������������������������� 7,760 8,099 8,012 8,305 8,534 8,680 8,833

Commercial banks��������������������������������������������������������������������������������������������������� 6,622 6,911 6,839 7,086 7,283 7,401 7,526

Savings institutions ������������������������������������������������������������������������������������������������� 1,138 1,188 1,173 1,219 1,251 1,279 1,307

Percentage of unprofitable institutions (%)�������������������������������������������������������������������� 20.44 28.74 30.75 24.89 12.09 7.

Number of problem institutions �������������������������������������������������������������������������������������� 860 552 702 252 76 50 52

Assets of problem institutions (in billions) ��������������������������������������������������������������������� $379 $346 $403 $159 $22 $8 $7

Number of failed institutions������������������������������������������������������������������������������������������� 127 95 140 25 3 0 0

Number of assisted institutions�������������������������������������������������������������������������������������� 0 8 8 5 0 0 0

* Excludes insured branches of foreign banks (IBAs)

** Through September 30, ratios annualized where appropriate. Asset growth rates are for 12 months ending September 3

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

(dollar figures in millions) 3rd Quarter 

2010

2nd Quarter 

2010

3rd Quarter 

2009

%Change 

09Q3-10Q3

Number of institutions reporting������������������������������������������������������������������������������������� 7,760 7,830 8,099 -4.

Total employees (full-time equivalent)��������������������������������������������������������������������������� 2,042,030 2,033,835 2,069,470 -1.

CONDITION DATA

Total assets��������������������������������������������������������������������������������������������������������������������� $13,383,291 $13,220,319 $13,246,471 1.

Loans secured by real estate ��������������������������������������������������������������������������������� 4,302,273 4,337,167 4,527,197 -5.

 1-4 Family residential mortgages �������������������������������������������������������������������� 1,880,441 1,875,131 1,928,224 -2.

 Nonfarm nonresidential ����������������������������������������������������������������������������������� 1,072,833 1,081,602 1,090,087 -1.

 Construction and development������������������������������������������������������������������������ 353,827 382,771 493,039 -28.

 Home equity lines��������������������������������������������������������������������������������������������� 647,947 654,064 667,473 -2.

Commercial & industrial loans �������������������������������������������������������������������������������� 1,174,655 1,169,737 1,273,927 -7.

Loans to individuals������������������������������������������������������������������������������������������������� 1,328,944 1,345,052 1,040,987 27.

 Credit cards ������������������������������������������������������������������������������������������������������ 683,911 692,665 392,971 74.

Farm loans �������������������������������������������������������������������������������������������������������������� 58,893 58,269 60,019 -1.

Other loans & leases����������������������������������������������������������������������������������������������� 526,595 488,635 515,478 2.

Less: Unearned income ������������������������������������������������������������������������������������������ 2,125 2,794 2,613 -18.

Total loans & leases ������������������������������������������������������������������������������������������������ 7,389,234 7,396,065 7,414,995 -0.

Less: Reserve for losses����������������������������������������������������������������������������������������� 241,861 251,419 220,528 9.

Net loans and leases����������������������������������������������������������������������������������������������� 7,147,373 7,144,646 7,194,467 -0.

Securities����������������������������������������������������������������������������������������������������������������� 2,641,607 2,527,875 2,396,676 10.

Other real estate owned������������������������������������������������������������������������������������������ 53,194 49,536 37,142 43.

Goodwill and other intangibles ������������������������������������������������������������������������������� 394,096 409,841 424,684 -7.

All other assets�������������������������������������������������������������������������������������������������������� 3,147,021 3,088,421 3,193,502 -1.

Total liabilities and capital ���������������������������������������������������������������������������������������������� 13,383,291 13,220,319 13,246,471 1.

Deposits������������������������������������������������������������������������������������������������������������������� 9,273,623 9,140,981 9,101,076 1.

 Domestic office deposits���������������������������������������������������������������������������������� 7,738,035 7,667,696 7,553,270 2.

 Foreign office deposits������������������������������������������������������������������������������������� 1,535,588 1,473,285 1,547,805 -0.

Other borrowed funds ��������������������������������������������������������������������������������������������� 1,866,191 1,911,857 1,997,430 -6.

Subordinated debt��������������������������������������������������������������������������������������������������� 150,823 150,986 161,256 -6.

All other liabilities ���������������������������������������������������������������������������������������������������� 568,094 510,236 524,078 8.

Total equity capital (includes minority interests)���������������������������������������������������� 1,524,561 1,506,258 1,462,631 4.

 Bank equity capital������������������������������������������������������������������������������������������� 1,505,516 1,487,095 1,443,159 4.

Loans and leases 30-89 days past due������������������������������������������������������������������������� 124,110 124,828 142,807 -13.

Noncurrent loans and leases ����������������������������������������������������������������������������������������� 378,342 386,612 367,641 2.

Restructured loans and leases �������������������������������������������������������������������������������������� 80,270 71,968 50,063 60.

Mortgage-backed securities ������������������������������������������������������������������������������������������ 1,439,964 1,381,196 1,350,441 6.

Earning assets���������������������������������������������������������������������������������������������������������������� 11,546,575 11,391,762 11,408,682 1.

FHLB Advances�������������������������������������������������������������������������������������������������������������� 402,425 445,416 575,700 -30.

Unused loan commitments��������������������������������������������������������������������������������������������� 6,041,482 6,007,390 6,125,678 -1.

Trust assets��������������������������������������������������������������������������������������������������������������������� 18,591,198 17,606,465 18,380,940 1.

Assets securitized and sold***��������������������������������������������������������������������������������������� 1,013,180 1,411,792 1,863,994 -45.

Notional amount of derivatives***���������������������������������������������������������������������������������� 236,386,455 225,433,410 211,694,352 11.

INCOME DATA

First Three Qtrs 

2010

First Three Qtrs 

2009 %Change

3rd Quarter 

2010

3rd Quarter 

2009

%Change 

09Q3-10Q3

Total interest income ������������������������������������������������������������������� $405,787 $412,575 -1.7 $133,472 $134,211 -0

Total interest expense ����������������������������������������������������������������� 82,308 115,293 -28.6 26,010 34,807 -25

Net interest income �������������������������������������������������������������� 323,479 297,282 8.8 107,462 99,405 8

Provision for loan and lease losses �������������������������������������������� 125,462 188,982 -33.6 34,891 62,855 -44

Total noninterest income������������������������������������������������������������� 180,429 199,423 -9.5 58,207 62,715 -7

Total noninterest expense ����������������������������������������������������������� 299,854 288,255 4.0 107,631 92,818 16

Securities gains (losses)������������������������������������������������������������� 6,900 -1,589 N/M 3,191 -4,102 N/M

Applicable income taxes ������������������������������������������������������������� 29,257 4,876 500.1 11,346 80 N/

Extraordinary gains, net�������������������������������������������������������������� -510 -3,625 N/M -330 31 N/M

Total net income (includes minority interests)��������������������� 55,726 9,379 494.2 14,661 2,296 538

 Bank net income������������������������������������������������������������ 55,223 8,712 533.9 14,532 2,039 612

Net charge-offs���������������������������������������������������������������������������� 143,164 136,027 5.3 42,863 50,928 -15

Cash dividends ���������������������������������������������������������������������������� 30,611 33,466 -8.5 13,301 20,094 -33

Retained earnings ����������������������������������������������������������������������� 24,612 -24,753 N/M 1,230 -18,055 N/M

Net operating income����������������������������������������������������������� 50,935 13,016 291.3 12,385 4,360 184

*** Call Report filers only. N/M - Not Meaningf
FDIC Quarterly 6 2010, Volume 4, No. 4

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

Asset Concentration Groups*

Third Qu

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting����������������������� 7,760 22 5 1,583 4,171 723 82 320 790 64

Commercial banks������������������������������������� 6,622 18 5 1,579 3,719 188 65 292 706 50

Savings institutions ����������������������������������� 1,138 4 0 4 452 535 17 28 84 14

Total assets (in billions)������������������������������������ $13,383.3 $705.0 $3,278.2 $194.0 $4,442.1 $789.3 $103.9 $44.5 $131.

Commercial banks������������������������������������� 12,130.3 679.7 3,278.2 193.4 3,968.9 218.3 55.3 39.0 109

Savings institutions ����������������������������������� 1,252.9 25.3 0.0 0.5 473.2 571.1 48.6 5.5 

Total deposits (in billions)��������������������������������� 9,273.6 281.9 2,085.6 159.4 3,362.3 540.0 87.2 34.3 109

Commercial banks������������������������������������� 8,372.9 266.8 2,085.6 159.0 3,036.2 120.9 44.2 30.4 91

Savings institutions ����������������������������������� 900.7 15.1 0.0 0.4 326.1 419.1 43.0 3.9

Bank net income (in millions) ��������������������������� 14,532 -6,852 5,037 525 4,049 1,400 415 213 292 9,455

Commercial banks������������������������������������� 12,297 -7,152 5,037 524 3,412 562 256 165 281 9,212

Savings institutions ����������������������������������� 2,235 299 0 1 637 838 159 47 10 243

Performance Ratios (annualized, %

Yield on earning assets������������������������������������ 4.66 12.70 3.33 5.28 4.90 4.48 5.69 3.69

Cost of funding earning assets ������������������������ 0.91 1.35 0.64 1.28 1.10 1.36 1.22 0.93

Net interest margin������������������������������������ 3.75 11.35 2.69 4.00 3.80 3.12 4.47 2.76

Noninterest income to assets��������������������������� 1.75 2.63 1.89 0.68 1.39 0.89 2.26 6.54

Noninterest expense to assets������������������������� 3.24 10.13 2.83 2.67 3.06 1.99 2.87 7.02

Loan and lease loss provision to assets���������� 1.05 5.24 0.52 0.46 1.20 0.78 1.16 0.21

Net operating income to assets ����������������������� 0.37 -3.92 0.61 1.06 0.29 0.64 1.63 1.48

Pretax return on assets ������������������������������������ 0.78 -2.87 0.84 1.26 0.57 1.11 2.46 2.22

Return on assets����������������������������������������������� 0.44 -3.85 0.63 1.09 0.37 0.71 1.63 1.94

Return on equity ����������������������������������������������� 3.88 -23.73 6.88 9.61 3.24 7.06 15.39 11.60

Net charge-offs to loans and leases���������������� 2.32 8.79 1.85 0.56 1.95 1.12 1.96 0.98

Loan and lease loss provision to 

net charge-offs ������������������������������������������ 81.40 70.72 80.82 125.26 90.76 116.77 79.37 78.30 11

Efficiency ratio �������������������������������������������������� 57.14 32.22 67.38 60.83 62.97 51.84 43.85 77.21 6

% of unprofitable institutions���������������������������� 18.90 13.64 0.00 7.20 26.76 13.83 4.88 13.75 

% of institutions with earnings gains���������������� 63.29 81.82 60.00 61.84 64.25 68.05 70.73 50.00 6

Structural Changes

New charters ��������������������������������������������� 5 0 0 0 3 1 0 1 0 0

Institutions absorbed by mergers ������������� 30 0 0 6 17 1 0 0 3 3

Failed institutions �������������������������������������� 41 0 0 1 36 2 1 0 1 0

PRIOR Third Q

(The way it was...)

Return on assets (%)������������������������������� 2009 0.06 0.34 -0.04 0.93 -0.31 0.26 0.20 1.03

������������������������������������� 2007 0.92 4.07 0.69 1.30 0.98 0.31 1.17 2.20

������������������������������������� 2005 1.31 3.16 1.02 1.33 1.39 1.03 1.76 1.78

Net charge-offs to loans & leases (%) ���� 2009 2.72 10.67 3.18 0.60 2.13 1.59 2.64 0.80

������������������������������������� 2007 0.57 3.98 0.77 0.26 0.32 0.42 1.04 0.32

������������������������������������� 2005 0.51 4.28 1.19 0.16 0.23 0.10 1.39 0.18

* See Table IV-A (page 8) for explanations
FDIC Quarterly 7 2010, Volume 4, No. 4

Quarterly Banking Profile

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

Asset Size Distribution Geographic Regions

Third QU

(The way it is...)

All Insured 

Institutions

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

Number of institutions reporting����������������������������� 7,760 2,681 4,414 556 109 960 1,041 1,609 1,841 1,637 672

Commercial banks������������������������������������������� 6,622 2,383 3,731 421 87 502 921 1,326 1,743 1,518 612

Savings institutions ����������������������������������������� 1,138 298 683 135 22 458 120 283 98 119 60

Total assets (in billions)������������������������������������������ $13,383.3 $151.1 $1,316.0 $1,400.9 $10,515.4 $2,734.6 $2,957.2 $2,948.1 $1,649.6 $788

Commercial banks������������������������������������������� 12,130.3 134.7 1,079.5 1,068.6 9,847.6 2,065.5 2,830.6 2,820.4 1,600.9 69

Savings institutions ����������������������������������������� 1,252.9 16.4 236.5 332.2 667.8 669.2 126.5 127.8 48.7

Total deposits (in billions)��������������������������������������� 9,273.6 126.5 1,082.6 1,071.6 6,993.0 1,793.8 2,105.2 1,976.5 1,199.8 62

Commercial banks������������������������������������������� 8,372.9 113.6 896.3 820.7 6,542.4 1,326.4 2,013.3 1,881.0 1,162.8 55

Savings institutions ����������������������������������������� 900.7 12.9 186.3 250.9 450.6 467.4 91.9 95.5 37.0

Bank net income (in millions) ��������������������������������� 14,532 162 1,310 1,003 12,057 -5,198 5,256 4,542 4,114 1,576 4,242

Commercial banks������������������������������������������� 12,297 171 1,134 628 10,364 -6,289 5,238 4,453 4,060 1,356 3,479

Savings institutions ����������������������������������������� 2,235 -8 176 375 1,692 1,090 18 89 55 220 763

Performance Ratios (annualized, %

Yield on earning assets������������������������������������������ 4.66 5.23 5.16 4.90 4.54 5.33 4.29 3.82 5.7

Cost of funding earning assets ������������������������������ 0.91 1.27 1.35 1.24 0.80 1.07 0.87 0.76 0.8

Net interest margin������������������������������������������ 3.75 3.96 3.82 3.66 3.75 4.26 3.41 3.05 4.9

Noninterest income to assets��������������������������������� 1.75 1.30 0.99 1.31 1.91 1.49 1.77 1.92 2.2

Noninterest expense to assets������������������������������� 3.24 3.87 3.19 2.96 3.27 4.31 2.78 2.98 3.4

Loan and lease loss provision to assets���������������� 1.05 0.56 0.81 1.14 1.07 1.30 0.99 0.78 1.5

Net operating income to assets ����������������������������� 0.37 0.37 0.31 0.22 0.40 -0.86 0.57 0.59 1.0

Pretax return on assets ������������������������������������������ 0.78 0.54 0.58 0.60 0.83 -0.34 1.05 0.83 1.5

Return on assets����������������������������������������������������� 0.44 0.43 0.40 0.29 0.46 -0.77 0.71 0.63 1.0

Return on equity ����������������������������������������������������� 3.88 3.54 3.88 2.57 4.06 -5.95 6.17 6.86 8.6

Net charge-offs to loans and leases���������������������� 2.32 0.85 1.11 1.75 2.63 2.98 2.30 1.95 2.6

Loan and lease loss provision to net charge-offs�� 81.40 106.32 110.12 101.99 77.14 78.92 76.81 82.25 84.86 1

Efficiency ratio �������������������������������������������������������� 57.14 78.61 70.61 61.55 54.82 51.88 58.32 64.62 50.21 

% of unprofitable institutions���������������������������������� 18.90 19.58 18.28 21.76 12.84 13.96 38.71 17.09 13.31 

% of institutions with earnings gains���������������������� 63.29 59.98 64.50 66.55 78.90 70.52 58.69 66.63 63.23 

Structural Changes

New charters ��������������������������������������������������� 5 1 1 2 1 1 1 1 0 1 1

Institutions absorbed by mergers ������������������� 30 17 9 3 1 7 3 4 8 6 2

Failed institutions �������������������������������������������� 41 8 32 1 0 4 19 6 2 1 9

PRIOR Third Q

(The way it was...)

Return on assets (%)������������������������������������� 2009 0.06 0.11 -0.10 -0.51 0.17 0.05 -0.18 0.24 0.85

��������������������������������������������2007 0.92 0.78 1.03 1.18 0.87 0.89 0.75 0.90 1.6

��������������������������������������������2005 1.31 1.08 1.27 1.34 1.32 1.24 1.35 1.08 1.7

Net charge-offs to loans & leases (%) ���������� 2009 2.72 0.89 1.27 2.15 3.10 3.07 2.70 2.59 2.5

��������������������������������������������2007 0.57 0.26 0.24 0.42 0.66 0.92 0.29 0.44 0.7

��������������������������������������������2005 0.51 0.16 0.18 0.23 0.64 0.97 0.27 0.29 0.5

* See Table IV-A (page 9) for explanations
FDIC Quarterly 8 2010, Volume 4, No. 4

TABLE IV-A. First Three Quarters 2010, All FDIC-Insured Institutions

Asset Concentration Groups*

First Three

(The way it is...)

All Insured 

Institutions

Credit 

Card 

Banks

International 

Banks

Agricultural 

Banks

Commercial 

Lenders

Mortgage 

Lenders

Consumer 

Lenders

Other 

Specialized 

<$1 Billion

All Other 

<$1 Billion

All Other 

>$1 Billion

Number of institutions reporting����������������������������������������� 7,760 22 5 1,583 4,171 723 82 320 790 64

Commercial banks������������������������������������������������������� 6,622 18 5 1,579 3,719 188 65 292 706 50

Savings institutions ����������������������������������������������������� 1,138 4 0 4 452 535 17 28 84 14

Total assets (in billions)������������������������������������������������������ $13,383.3 $705.0 $3,278.2 $194.0 $4,442.1 $789.3 $103.9 $44.5 $131.

Commercial banks������������������������������������������������������� 12,130.3 679.7 3,278.2 193.4 3,968.9 218.3 55.3 39.0 109

Savings institutions ����������������������������������������������������� 1,252.9 25.3 0.0 0.5 473.2 571.1 48.6 5.5 

Total deposits (in billions)��������������������������������������������������� 9,273.6 281.9 2,085.6 159.4 3,362.3 540.0 87.2 34.3 109

Commercial banks������������������������������������������������������� 8,372.9 266.8 2,085.6 159.0 3,036.2 120.9 44.2 30.4 91

Savings institutions ����������������������������������������������������� 900.7 15.1 0.0 0.4 326.1 419.1 43.0 3.9

Bank net income (in millions) ��������������������������������������������� 55,223 -3,206 18,895 1,484 9,698 4,160 1,070 509 689 21,923

Commercial banks������������������������������������������������������� 48,995 -4,025 18,895 1,482 8,103 1,923 679 353 778 20,808

Savings institutions ����������������������������������������������������� 6,228 819 0 2 1,595 2,238 391 156 -88 1,115

Performance Ratios (annualized, %

Yield on earning assets������������������������������������������������������ 4.74 14.08 3.41 5.28 4.91 4.46 5.80 3.80

Cost of funding earning assets ������������������������������������������ 0.96 1.56 0.69 1.34 1.16 1.41 1.29 0.99

Net interest margin������������������������������������������������������ 3.78 12.52 2.71 3.94 3.75 3.05 4.51 2.81

Noninterest income to assets��������������������������������������������� 1.82 2.94 2.11 0.64 1.36 0.90 2.07 7.06

Noninterest expense to assets������������������������������������������� 3.02 6.52 2.82 2.65 3.00 1.92 2.76 7.53

Loan and lease loss provision to assets���������������������������� 1.26 7.08 0.60 0.44 1.29 0.74 1.33 0.23

Net operating income to assets ����������������������������������������� 0.51 -0.71 0.73 1.01 0.24 0.69 1.45 1.41

Pretax return on assets ������������������������������������������������������ 0.85 0.11 1.07 1.20 0.44 1.11 2.25 1.99

Return on assets����������������������������������������������������������������� 0.56 -0.64 0.79 1.04 0.29 0.70 1.45 1.57

Return on equity ����������������������������������������������������������������� 5.00 -3.60 8.81 9.27 2.64 7.18 13.73 9.65

Net charge-offs to loans and leases���������������������������������� 2.59 11.88 2.04 0.53 1.88 1.15 2.20 0.81

Loan and lease loss provision to net charge-offs�������������� 87.63 72.91 84.30 129.54 100.22 106.94 79.66 103.60 11

Efficiency ratio �������������������������������������������������������������������� 55.94 30.58 63.31 61.69 62.84 50.78 43.14 77.95 7

% of unprofitable institutions���������������������������������������������� 20.44 13.64 0.00 7.14 29.56 14.94 6.10 12.19 

% of institutions with earnings gains���������������������������������� 64.16 86.36 80.00 64.56 64.66 70.26 76.83 50.31 5

Condition Ratios (%

Earning assets to total assets �������������������������������������������� 86.28 87.55 83.85 91.53 88.29 93.04 94.18 90.05 9

Loss Allowance to:

Loans and leases �������������������������������������������������������� 3.27 9.21 3.91 1.56 2.54 1.48 2.63 1.86

Noncurrent loans and leases �������������������������������������� 63.93 403.00 60.68 80.41 56.02 30.69 199.45 69.24 5

Noncurrent assets plus

other real estate owned to assets������������������������������� 3.25 1.94 2.36 1.71 3.84 3.24 1.10 1.06

Equity capital ratio�������������������������������������������������������������� 11.25 15.82 9.06 11.40 11.39 10.11 10.58 17.17 1

Core capital (leverage) ratio����������������������������������������������� 8.99 12.02 7.39 10.16 9.45 9.23 10.29 15.44 

Tier 1 risk-based capital ratio��������������������������������������������� 12.68 14.01 12.18 14.11 12.24 19.12 14.18 34.74 1

Total risk-based capital ratio ���������������������������������������������� 15.30 16.78 15.26 15.25 14.39 20.16 15.34 35.77 1

Net loans and leases to deposits��������������������������������������� 77.07 193.17 50.85 77.23 87.42 85.03 86.09 33.88 6

Net loans to total assets����������������������������������������������������� 53.41 77.25 32.35 63.46 66.17 58.18 72.23 26.14 5

Domestic deposits to total assets �������������������������������������� 57.82 35.60 30.70 82.17 73.94 68.33 82.88 76.11 8

Structural Changes

New charters ��������������������������������������������������������������� 8 0 0 0 5 1 0 1 0 1

Institutions absorbed by mergers ������������������������������� 124 0 0 18 91 1 0 0 5 9

Failed institutions �������������������������������������������������������� 127 0 0 3 115 4 1 1 2 1

PRIOR first Th

(The way it was...)

Number of Institutions ������������������������������������������������2009 8,099 24 4 1,580 4,540 795 81 284 732 59

��������������������������������������������������������2007 8,559 28 4 1,634 4,739 780 120 376 821 57

��������������������������������������������������������2005 8,858 29 4 1,733 4,557 928 125 420 992 70

Total assets (in billions)����������������������������������������������2009 $13,246.5 $500.5 $3,183.4 $177.7 $5,184.1 $852.0 $95.8 $37.8 $102.

��������������������������������������������������������2007 12,706.1 423.5 2,644.0 157.3 5,054.4 1,454.1 95.8 40.1 111

��������������������������������������������������������2005 10,700.7 359.9 1,838.9 143.0 3,667.4 1,677.1 109.2 47.7 128

Return on assets (%)��������������������������������������������������2009 0.09 -0.58 0.00 0.90 -0.22 0.47 0.22 0.64

��������������������������������������������������������2007 1.10 3.81 0.87 1.25 1.09 0.73 1.40 2.37

��������������������������������������������������������2005 1.31 3.19 0.88 1.32 1.36 1.12 1.70 1.73

Net charge-offs to loans & leases (%) �����������������������2009 2.38 9.93 2.90 0.52 1.77 1.26 2.64 0.81

��������������������������������������������������������2007 0.50 3.90 0.65 0.19 0.28 0.29 0.97 0.30

��������������������������������������������������������2005 0.47 4.27 0.88 0.15 0.22 0.10 1.46 0.29

Noncurrent assets plus 

OREO to assets (%) ��������������������������������������������2009 3.08 2.09 2.64 1.59 3.71 3.17 1.25 0.60

��������������������������������������������������������2007 0.73 1.34 0.51 0.81 0.81 1.09 0.53 0.26

��������������������������������������������������������2005 0.50 1.36 0.48 0.68 0.48 0.57 0.54 0.25

Equity capital ratio (%)������������������������������������������������2009 10.89 25.25 8.45 11.32 10.97 9.30 10.87 17.58 1

��������������������������������������������������������2007 10.44 23.17 7.78 11.32 10.85 9.44 11.89 19.54 1

��������������������������������������������������������2005 10.25 22.07 8.23 10.86 10.21 10.67 9.58 19.26 

* 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 their 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 9 2010, Volume 4, No. 4

Quarterly Banking Profile

TABLE IV-A. First Three Quarters 2010, All FDIC-Insured Institutions

Asset Size Distribution Geographic Regions

First Three

(The way it is...)

All Insured 

Institutions

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

Number of institutions reporting��������������������� 7,760 2,681 4,414 556 109 960 1,041 1,609 1,841 1,637 672

Commercial banks����������������������������������� 6,622 2,383 3,731 421 87 502 921 1,326 1,743 1,518 612

Savings institutions ��������������������������������� 1,138 298 683 135 22 458 120 283 98 119 60

Total assets (in billions)���������������������������������� $13,383.3 $151.1 $1,316.0 $1,400.9 $10,515.4 $2,734.6 $2,957.2 $2,948.1 $1,649.6 $788

Commercial banks����������������������������������� 12,130.3 134.7 1,079.5 1,068.6 9,847.6 2,065.5 2,830.6 2,820.4 1,600.9 69

Savings institutions ��������������������������������� 1,252.9 16.4 236.5 332.2 667.8 669.2 126.5 127.8 48.7

Total deposits (in billions)������������������������������� 9,273.6 126.5 1,082.6 1,071.6 6,993.0 1,793.8 2,105.2 1,976.5 1,199.8 62

Commercial banks����������������������������������� 8,372.9 113.6 896.3 820.7 6,542.4 1,326.4 2,013.3 1,881.0 1,162.8 55

Savings institutions ��������������������������������� 900.7 12.9 186.3 250.9 450.6 467.4 91.9 95.5 37.0

Bank net income (in millions) ������������������������� 55,223 471 3,854 2,878 48,021 3,806 9,811 13,800 9,875 4,367 13,563

Commercial banks����������������������������������� 48,995 468 3,349 1,775 43,403 924 9,720 13,785 9,684 3,750 11,132

Savings institutions ��������������������������������� 6,228 4 504 1,102 4,618 2,882 91 16 190 617 2,431

Performance Ratios (annualized, %

Yield on earning assets���������������������������������� 4.74 5.25 5.20 4.94 4.64 5.51 4.41 3.83 5.8

Cost of funding earning assets ���������������������� 0.96 1.34 1.42 1.30 0.85 1.15 0.92 0.81 0.8

Net interest margin���������������������������������� 3.78 3.91 3.78 3.64 3.80 4.36 3.49 3.03 5.0

Noninterest income to assets������������������������� 1.82 1.26 0.96 1.26 2.01 1.64 1.73 2.00 2.2

Noninterest expense to assets����������������������� 3.02 3.83 3.17 2.90 3.01 3.33 2.78 2.99 3.4

Loan and lease loss provision to assets�������� 1.26 0.51 0.78 1.17 1.35 1.58 1.30 0.87 1.9

Net operating income to assets ��������������������� 0.51 0.38 0.33 0.24 0.57 0.15 0.38 0.56 0.8

Pretax return on assets ���������������������������������� 0.85 0.52 0.54 0.52 0.94 0.55 0.66 0.85 1.1

Return on assets��������������������������������������������� 0.56 0.42 0.39 0.28 0.62 0.19 0.44 0.63 0.8

Return on equity ��������������������������������������������� 5.00 3.48 3.86 2.51 5.47 1.47 3.89 7.10 6.8

Net charge-offs to loans and leases�������������� 2.59 0.72 1.00 1.71 3.02 3.75 2.51 2.04 2.9

Loan and lease loss provision to net 

charge-offs ���������������������������������������������� 87.63 115.42 115.45 106.20 84.35 76.25 91.55 88.35 94.08 1

Efficiency ratio ������������������������������������������������ 55.94 79.23 70.96 61.68 53.37 49.97 58.40 63.76 50.15 

% of unprofitable institutions�������������������������� 20.44 21.04 20.00 22.30 13.76 14.58 41.59 18.33 14.01 

% of institutions with earnings gains�������������� 64.16 60.98 65.27 68.71 74.31 75.83 61.86 62.40 64.75 

Condition Ratios (%

Earning assets to total assets ����������������������� 86.28 90.98 91.46 90.23 85.03 86.48 84.11 86.19 87.29 

Loss Allowance to:

Loans and leases ����������������������������������� 3.27 1.66 1.85 2.27 3.69 3.63 3.16 3.17 3.6

Noncurrent loans and leases ����������������� 63.93 62.13 51.86 49.45 67.13 99.74 49.61 56.87 63.35 

Noncurrent assets plus

other real estate owned to assets���������� 3.25 2.42 3.40 3.71 3.18 2.18 4.06 3.06 4.5

Equity capital ratio����������������������������������������� 11.25 12.20 10.37 11.23 11.35 12.80 11.56 9.06 11.56 

Core capital (leverage) ratio�������������������������� 8.99 11.57 9.70 9.76 8.76 9.95 8.36 7.47 9.16

Tier 1 risk-based capital ratio������������������������ 12.68 17.78 14.01 14.19 12.25 14.28 11.52 10.95 11.22 

Total risk-based capital ratio ������������������������� 15.30 18.89 15.23 15.53 15.23 16.64 14.71 14.19 13.81 

Net loans and leases to deposits������������������ 77.07 71.97 79.01 81.41 76.20 80.87 75.94 69.33 91.58 

Net loans to total assets�������������������������������� 53.41 60.27 65.00 62.27 50.67 53.05 54.06 46.48 66.61 

Domestic deposits to total assets ����������������� 57.82 83.74 82.19 75.96 51.98 57.76 62.47 52.98 67.59 

Structural Changes

New charters ������������������������������������������ 8 1 2 4 1 1 3 1 0 2 1

Institutions absorbed by mergers ���������� 124 51 56 15 2 14 37 13 30 17 13

Failed institutions ����������������������������������� 127 27 82 17 1 11 44 22 13 6 31

PRIOR first Th

(The way it was...)

Number of Institutions ��������������������������� 2009 8,099 2,915 4,493 579 112 989 1,140 1,666 1,895 1,672 737

����������������������������������� 2007 8,559 3,513 4,391 539 116 1,046 1,215 1,793 1,990 1,740 775

����������������������������������� 2005 8,858 3,943 4,294 503 118 1,113 1,219 1,890 2,074 1,806 756

Total assets (in billions)������������������������� 2009 $13,246.5 $160.5 $1,345.7 $1,497.6 $10,242.6 $2,501.3 $3,449.9 $3,106.2 $1,077.7 $755

����������������������������������� 2007 12,706.1 186.1 1,296.7 1,408.2 9,815.2 2,382.1 3,195.9 2,796.4 931.5 65

����������������������������������� 2005 10,700.7 205.8 1,225.7 1,366.0 7,903.2 2,756.0 2,635.3 2,494.5 784.1 58

Return on assets (%)����������������������������� 2009 0.09 0.19 0.05 -0.36 0.15 -0.14 0.08 0.22 0.73

����������������������������������� 2007 1.10 0.84 1.06 1.09 1.12 1.00 1.05 1.01 1.6

����������������������������������� 2005 1.31 1.08 1.24 1.34 1.32 1.27 1.38 1.01 1.6

Net charge-offs to loans & leases (%) �� 2009 2.38 0.78 1.01 1.82 2.74 2.73 2.18 2.15 2.4

����������������������������������� 2007 0.50 0.18 0.19 0.35 0.59 0.86 0.25 0.37 0.6

����������������������������������� 2005 0.47 0.16 0.18 0.22 0.58 0.81 0.22 0.29 0.5

Noncurrent assets plus 

OREO to assets (%) ����������������������� 2009 3.08 2.13 3.14 3.52 3.02 1.91 3.52 3.19 3.4

����������������������������������� 2007 0.73 0.87 0.89 0.83 0.70 0.67 0.54 0.78 1.1

����������������������������������� 2005 0.50 0.71 0.54 0.50 0.49 0.46 0.31 0.54 0.8

Equity capital ratio (%)��������������������������� 2009 10.89 12.41 10.11 10.75 10.99 12.98 11.57 8.68 10.85 

����������������������������������� 2007 10.44 13.68 10.57 11.38 10.23 12.43 10.14 9.09 10.13 

����������������������������������� 2005 10.25 12.26 10.26 10.57 10.14 10.63 9.86 9.18 10.67

* 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 Islan

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 10 2010, Volume 4, No. 4

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

Asset Concentration Groups*

September 30, 2010 All Insured 

Institutions

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 ��������������������������������������� 1.97 2.12 2.90 1.17 1.52 1.75 1.14 1.64

Construction and development��������������������������������� 2.23 0.00 1.88 2.35 2.14 3.99 1.52 2.35

Nonfarm nonresidential��������������������������������������������� 1.09 0.00 0.63 0.93 1.11 1.39 1.50 1.18

Multifamily residential real estate ����������������������������� 1.05 0.00 0.61 1.38 1.23 1.30 0.26 1.64

Home equity loans����������������������������������������������������� 1.23 3.31 1.72 0.72 0.88 1.08 1.07 0.50

Other 1-4 family residential��������������������������������������� 2.85 2.02 4.48 1.80 2.07 1.79 1.17 1.95

Commercial and industrial loans ������������������������������������� 0.74 2.88 0.48 1.44 0.78 0.92 1.18 1.04

Loans to individuals���������������������������������������������������������� 2.10 2.19 2.38 1.79 1.76 1.42 1.76 1.70

Credit card loans ������������������������������������������������������� 2.17 2.14 2.86 1.37 1.64 2.76 1.13 1.94

Other loans to individuals ����������������������������������������� 2.03 3.22 2.20 1.79 1.78 1.07 2.05 1.68

All other loans and leases (including farm) ��������������������� 0.45 0.01 0.35 0.46 0.58 0.64 0.37 0.85

Total loans and leases������������������������������������������������������ 1.68 2.16 1.92 1.07 1.35 1.71 1.56 1.53

Percent of Loans Noncurrent**

All real estate loans ���������������������������������������������������������� 7.28 4.41 10.23 2.38 5.72 5.09 1.42 3.31 

Construction and development.................................. 16.63 0.00 1

Nonfarm nonresidential��������������������������������������������� 4.36 0.00 4.50 2.68 4.15 3.59 4.04 2.93

Multifamily residential real estate ����������������������������� 4.67 0.00 4.35 3.08 4.48 2.24 3.63 8.42

Home equity loans����������������������������������������������������� 1.82 2.75 2.00 0.99 1.33 1.54 0.82 0.58

Other 1-4 family residential��������������������������������������� 9.68 5.36 17.06 1.68 5.24 5.38 1.22 2.00 

Commercial and industrial loans ������������������������������������� 2.78 2.38 4.99 2.37 2.39 2.59 0.75 2.13

Loans to individuals���������������������������������������������������������� 1.87 2.35 2.31 0.73 1.38 1.10 1.32 0.85

Credit card loans ������������������������������������������������������� 2.35 2.31 2.58 0.73 2.72 3.38 1.10 1.26

Other loans to individuals ����������������������������������������� 1.36 3.24 2.21 0.73 1.11 0.50 1.42 0.82

All other loans and leases (including farm) ��������������������� 1.31 0.02 1.77 0.85 1.40 0.61 0.45 0.76

Total loans and leases������������������������������������������������������ 5.12 2.29 6.44 1.94 4.54 4.82 1.31 2.69

Percent of Loans Charged-off (net, YTD)

All real estate loans ���������������������������������������������������������� 1.92 4.92 2.27 0.50 1.94 1.04 1.47 0.76

Construction and development��������������������������������� 5.28 0.00 2.94 3.07 5.84 4.80 1.61 4.47

Nonfarm nonresidential��������������������������������������������� 1.17 0.00 1.22 0.56 1.23 0.73 0.40 0.33

Multifamily residential real estate ����������������������������� 1.14 0.00 0.97 0.53 1.30 0.88 0.71 1.00

Home equity loans����������������������������������������������������� 2.73 6.96 2.63 0.66 1.43 3.31 2.11 0.29

Other 1-4 family residential��������������������������������������� 1.55 4.80 2.77 0.33 1.43 0.81 0.93 0.37

Commercial and industrial loans ������������������������������������� 1.83 15.28 1.49 1.20 1.69 1.48 5.31 0.81

Loans to individuals���������������������������������������������������������� 6.42 12.11 3.28 0.58 2.37 3.28 2.20 0.85

Credit card loans ������������������������������������������������������� 10.93 12.07 6.38 2.09 7.68 10.27 4.73 4.37

Other loans to individuals ����������������������������������������� 2.05 12.84 2.17 0.54 1.31 1.23 1.10 0.55

All other loans and leases (including farm) ��������������������� 0.69 0.01 0.65 0.00 1.15 0.43 2.45 1.30

Total loans and leases������������������������������������������������������ 2.59 11.88 2.04 0.53 1.88 1.15 2.18 0.81

Loans Outstanding (in billions)

All real estate loans ���������������������������������������������������������� $4,302.3 $0.1 $521.8 $73.7 $2,061.7 $430.8 $20.2 $8.1 $53.

Construction and development��������������������������������� 353.8 0.0 7.8 4.6 252.2 8.1 0.5 0.

Nonfarm nonresidential��������������������������������������������� 1,072.8 0.0 30.6 21.2 784.7 27.9 1.1 2.7 

Multifamily residential real estate ����������������������������� 215.8 0.0 40.3 1.6 131.0 9.6 0.1 0.

Home equity loans����������������������������������������������������� 647.9 0.0 129.4 1.6 224.2 28.0 9.0 0.2

Other 1-4 family residential��������������������������������������� 1,880.4 0.1 263.9 19.6 628.0 356.2 9.2 3.9 

Commercial and industrial loans ������������������������������������� 1,174.7 30.8 198.1 15.9 564.6 12.1 4.1 1.5

Loans to individuals���������������������������������������������������������� 1,328.9 551.0 188.7 6.5 237.1 20.6 52.7 1.6

Credit card loans ������������������������������������������������������� 683.9 527.0 51.2 0.1 39.9 4.2 16.5 0.

Other loans to individuals ����������������������������������������� 645.0 24.1 137.5 6.3 197.2 16.4 36.2 1.5

All other loans and leases (including farm) ��������������������� 585.5 17.9 195.6 29.0 153.4 2.6 0.8 0.6

Total loans and leases (plus unearned income)�������������� 7,391.4 599.9 1,104.3 125.1 3,016.8 466.1 77.7 11.9 72

Memo: Other Real Estate Owned (in millions

All other real estate owned����������������������������������������������� 53,194.4 -19.2 4,448.9 849.1 33,348.8 2,975.7 73.7 147.4 706.

Construction and development��������������������������������� 18,447.6 0.0 6.0 303.1 15,829.2 436.7 23.4 84.0 188

Nonfarm nonresidential��������������������������������������������� 10,222.0 0.0 203.5 266.9 7,997.6 207.2 12.1 30.6 158

Multifamily residential real estate ����������������������������� 2,886.6 0.0 914.0 40.6 1,334.4 63.6 3.0 3.9 

1-4 family residential ������������������������������������������������� 14,761.9 0.2 1,337.4 169.8 6,853.8 1,781.9 29.7 27.5 315

Farmland�������������������������������������������������������������������� 364.5 0.0 0.0 68.6 252.3 8.5 5.5 1.4

GNMA properties������������������������������������������������������� 6,293.5 0.0 1,772.0 0.1 1,058.8 478.0 0.0 0.0 1

* 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 11 2010, Volume 4, No. 4

Quarterly Banking Profile

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

Asset Size Distribution Geographic Regions

September 30, 2010 All Insured 

Institutions

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 ������������������������������ 1.97 1.67 1.48 1.27 2.25 1.52 2.13 1.90 2.5

Construction and development������������������������ 2.23 2.03 2.37 2.08 2.23 2.50 1.90 2.40 2.6

Nonfarm nonresidential������������������������������������ 1.09 1.35 1.25 1.03 1.02 1.18 1.19 1.14 1.0

Multifamily residential real estate �������������������� 1.05 1.44 1.32 1.11 0.97 1.04 1.14 0.98 1.0

Home equity loans�������������������������������������������� 1.23 0.92 0.88 0.81 1.29 0.69 1.45 1.39 1.1

Other 1-4 family residential������������������������������ 2.85 2.20 1.67 1.42 3.28 1.83 3.05 2.74 4.1

Commercial and industrial loans ���������������������������� 0.74 1.76 1.18 0.90 0.66 1.14 0.58 0.73 0.9

Loans to individuals������������������������������������������������� 2.10 2.22 1.81 2.05 2.11 2.13 2.22 1.69 2.5

Credit card loans ���������������������������������������������� 2.17 1.68 2.30 2.25 2.17 2.04 2.35 1.96 2.5

Other loans to individuals �������������������������������� 2.03 2.23 1.78 1.98 2.05 2.44 2.15 1.62 2.3

All other loans and leases (including farm) ������������ 0.45 0.48 0.50 0.48 0.44 0.30 0.30 0.59 0.6

Total loans and leases��������������������������������������������� 1.68 1.59 1.41 1.25 1.79 1.56 1.76 1.54 2.1

Percent of Loans Noncurrent** 

All real estate loans ������������������������������������������������� 7.28 3.12 4.06 5.52 8.53 4.86 9.16 8.02 8.6

Construction and development������������������������ 16.63 10.33 13.00 17.17 18.03 18.20 17.47 15.01 17.13 

Nonfarm nonresidential������������������������������������ 4.36 3.44 3.29 4.33 4.95 3.87 4.91 4.47 4.5

Multifamily residential real estate �������������������� 4.67 3.16 3.57 4.51 4.98 2.98 8.25 4.43 3.9

Home equity loans�������������������������������������������� 1.82 1.27 1.26 1.44 1.89 1.21 1.87 1.69 2.8

Other 1-4 family residential������������������������������ 9.68 2.29 2.76 4.02 11.87 4.81 12.52 13.01 12.7

Commercial and industrial loans ���������������������������� 2.78 2.69 2.43 2.62 2.85 2.78 2.07 2.60 2.7

Loans to individuals������������������������������������������������� 1.87 1.04 0.79 1.25 1.95 2.18 1.49 1.38 2.1

Credit card loans ���������������������������������������������� 2.35 0.93 1.67 2.06 2.36 2.34 2.39 2.68 2.4

Other loans to individuals �������������������������������� 1.36 1.04 0.74 0.96 1.45 1.61 1.00 1.04 1.5

All other loans and leases (including farm) ������������ 1.31 0.93 0.94 1.14 1.35 0.83 0.66 1.34 0.9

Total loans and leases��������������������������������������������� 5.12 2.67 3.56 4.59 5.49 3.64 6.36 5.57 5.7

Percent of Loans Charged-off (net, YTD) 

All real estate loans ������������������������������������������������� 1.92 0.66 0.93 1.70 2.22 1.04 2.63 2.11 1.9

Construction and development������������������������ 5.28 3.19 3.30 5.80 5.89 4.51 6.07 6.36 4.1

Nonfarm nonresidential������������������������������������ 1.17 0.59 0.60 1.23 1.45 0.87 1.45 1.58 0.7

Multifamily residential real estate �������������������� 1.14 0.85 0.80 1.35 1.16 0.83 1.43 1.23 0.8

Home equity loans�������������������������������������������� 2.73 0.83 0.68 1.21 3.00 0.87 3.92 1.98 3.7

Other 1-4 family residential������������������������������ 1.55 0.37 0.60 0.85 1.83 0.75 1.92 1.92 1.6

Commercial and industrial loans ���������������������������� 1.83 1.42 1.48 1.50 1.92 2.97 1.41 1.81 1.8

Loans to individuals������������������������������������������������� 6.42 0.80 1.37 2.55 6.88 10.56 4.34 2.69 8.4

Credit card loans ���������������������������������������������� 10.93 4.04 7.34 7.50 11.04 12.41 10.02 7.91 13.4

Other loans to individuals �������������������������������� 2.05 0.75 0.98 0.97 2.25 4.50 1.55 1.34 1.8

All other loans and leases (including farm) ������������ 0.69 0.00 0.55 0.79 0.71 0.43 0.40 1.12 0.6

Total loans and leases��������������������������������������������� 2.59 0.72 1.00 1.71 3.02 3.74 2.51 2.04 2.9

Loans Outstanding (in billions) 

All real estate loans ������������������������������������������������� $4,302.3 $63.6 $681.5 $657.6 $2,899.6 $827.4 $1,040.1 $848.5 $633.8 $3

Construction and development������������������������ 353.8 4.9 77.7 77.8 193.4 50.3 111.0 57.0 50.

Nonfarm nonresidential������������������������������������ 1,072.8 18.9 263.6 262.9 527.4 222.5 236.7 194.5 149.8 

Multifamily residential real estate �������������������� 215.8 1.9 31.6 41.7 140.6 59.8 31.9 64.1 18

Home equity loans�������������������������������������������� 647.9 2.0 37.7 48.6 559.6 89.2 186.2 173.0 115.

Other 1-4 family residential������������������������������ 1,880.4 27.3 237.0 215.3 1,400.8 399.9 458.5 343.5 274.7 

Commercial and industrial loans ���������������������������� 1,174.7 12.0 109.4 132.7 920.7 181.3 274.8 245.8 169.6

Loans to individuals������������������������������������������������� 1,328.9 6.5 40.9 71.1 1,210.5 404.2 223.4 181.8 226.0

Credit card loans ���������������������������������������������� 683.9 0.1 2.4 18.8 662.6 318.2 78.9 37.8 138.

Other loans to individuals �������������������������������� 645.0 6.4 38.4 52.3 547.9 86.0 144.6 144.0 87.1

All other loans and leases (including farm) ������������ 585.5 10.5 40.2 32.2 502.6 93.0 112.5 139.1 111.1

Total loans and leases (plus unearned income)����� 7,391.4 92.6 871.9 893.5 5,533.3 1,505.8 1,650.8 1,415.2 1,140.5 51

Memo: Other Real Estate Owned (in millions)

All other real estate owned�������������������������������������� 53,194.4 1,155.0 13,634.0 10,763.5 27,641.9 4,454.9 14,972.8 11,034.2 10,055.8 5,80

Construction and development������������������������ 18,447.6 393.4 6,462.2 5,771.5 5,820.5 1,187.4 5,883.7 2,510.9 3,229.3 2,95

Nonfarm nonresidential������������������������������������ 10,222.0 349.9 3,509.4 2,370.1 3,992.6 1,040.6 2,253.4 2,301.2 1,917.6 1,32

Multifamily residential real estate �������������������� 2,886.6 36.5 499.7 399.5 1,950.8 257.9 510.1 547.9 456.1 

1-4 family residential ���������������������������������������� 14,761.9 345.1 2,962.5 2,035.5 9,418.9 1,710.4 4,466.0 2,980.3 2,875.5 1,25

Farmland����������������������������������������������������������� 364.5 28.4 197.0 97.7 41.4 22.0 52.3 65.6 78.5

GNMA properties���������������������������������������������� 6,293.5 2.0 4.5 90.3 6,196.7 216.4 1,807.4 2,628.9 1,499.0

* 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 12 2010, Volume 4, No. 4

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

Asset Size Distribution

(dollar figures in millions;

notional amounts unless otherwise indicated)

3rd Quarter

2010

2nd Quarter

2010

1st Quarter

2010

4th Quarter

2009

3rd Quarter 

2009

% Change 

09Q3-

10Q3

Less 

than $100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to $10 

Billion

Greater than 

$10 Billion

ALL DERIVATIVE HOLDE

Number of institutions reporting derivatives����������������� 1,209 1,159 1,149 1,130 1,175 2.9 96 743 290 8

Total assets of institutions reporting derivatives ���������� $10,899,038 $10,670,936 $10,766,563 $10,568,136 $10,546,525 3.3 $6,761 $309,670 $838,111 $9,744,49

Total deposits of institutions reporting derivatives������� 7,402,523 7,248,693 7,281,901 7,341,245 7,183,905 3.0 5,616 251,106 646,921 6,498,87

Total derivatives������������������������������������������������������������� 236,386,455 225,433,410 218,715,076 215,449,089 211,694,352 11.7 430 24,351 81,121 236,280,55

Derivative Contracts by Underlying Risk Exposur

Interest rate�������������������������������������������������������������������� 196,549,856 188,613,951 182,641,572 181,454,530 177,897,013 10.5 423 24,078 76,180 196,449,17

Foreign exchange*��������������������������������������������������������� 22,531,799 20,245,402 19,202,392 17,299,787 17,709,555 27.2 0 35 3,704 22,528,06

Equity ����������������������������������������������������������������������������� 1,679,107 1,615,041 1,570,952 1,685,227 2,180,499 -23.0 8 133 658 1,678,30

Commodity & other (excluding credit derivatives)�������� 1,153,316 1,082,812 941,687 978,922 926,295 24.5 0 77 161 1,153,07

Credit������������������������������������������������������������������������������ 14,472,378 13,876,204 14,358,473 14,030,623 12,980,990 11.5 0 28 418 14,471,93

Total�������������������������������������������������������������������������������� 236,386,455 225,433,410 218,715,076 215,449,089 211,694,352 11.7 430 24,351 81,121 236,280,55

Derivative Contracts by Transaction Type 

Swaps ���������������������������������������������������������������������������� 146,953,921 141,420,345 136,333,735 139,137,539 137,212,838 7.1 37 9,464 46,535 146,897,88

Futures & forwards �������������������������������������������������������� 39,643,725 36,793,803 34,747,302 29,651,811 27,306,403 45.2 174 6,735 18,003 39,618,81

Purchased options��������������������������������������������������������� 16,911,273 15,402,898 15,759,284 15,986,712 16,236,605 4.2 14 693 3,223 16,907,34

Written options��������������������������������������������������������������� 16,697,413 15,901,536 15,910,905 15,897,600 15,845,169 5.4 206 7,431 12,484 16,677,29

Total�������������������������������������������������������������������������������� 220,206,332 209,518,582 202,751,226 200,673,663 196,601,015 12.0 430 24,323 80,245 220,101,33

Fair Value of Derivative Contracts 

Interest rate contracts���������������������������������������������������� 107,170 98,101 94,739 97,185 123,707 -13.4 6 28 221 106,91

Foreign exchange contracts������������������������������������������ -7,464 -4,874 1,329 9,511 -5,171 N/M 0 0 -5 -7,458

Equity contracts������������������������������������������������������������� -1,784 305 -856 1,236 -253 N/M 0 4 3 -1,790

Commodity & other (excluding credit derivatives)�������� -721 -574 1,064 1,661 3,641 N/M 0 6 2 -729

Credit derivatives as guarantor������������������������������������� -131,313 -222,426 -121,494 -161,114 -235,401 N/M 0 0 1 -131,314

Credit derivatives as beneficiary����������������������������������� 150,796 242,561 141,388 189,531 268,165 -43.8 0 0 -4 150,80

Derivative Contracts by Maturity** 

Interest rate contracts ����������������������������� < 1 year 90,918,669 89,000,748 84,010,744 81,236,281 78,357,119 16.0 132 7,505 16,869 90,894,16

 ������������������������������������������ 1-5 years 35,138,749 33,347,773 33,334,968 33,970,247 34,321,414 2.4 20 6,458 23,418 35,108,85

 ������������������������������������������ > 5 years 24,550,165 23,099,484 24,121,171 26,373,563 26,851,340 -8.6 36 2,300 17,743 24,530,08

Foreign exchange contracts ������������������� < 1 year 13,362,678 11,959,581 11,092,119 10,416,223 9,674,124 38.1 0 30 2,349 13,360,29

 ������������������������������������������ 1-5 years 2,582,310 2,356,096 2,440,019 2,448,723 2,405,751 7.3 0 4 54 2,582,25

 ������������������������������������������ > 5 years 1,431,627 1,306,940 1,329,332 1,345,678 1,325,661 8.0 0 0 84 1,431,54

Equity contracts��������������������������������������� < 1 year 352,002 326,742 320,739 312,066 358,462 -1.8 2 22 123 351,85

 ������������������������������������������ 1-5 years 217,566 205,283 220,441 227,854 301,995 -28.0 1 49 243 217,27

 ������������������������������������������ > 5 years 86,705 80,586 83,990 81,647 81,869 5.9 0 3 0 86,70

Commodity & other contracts ����������������� < 1 year 311,897 324,203 287,660 261,429 237,860 31.1 0 38 77 311,78

 ������������������������������������������ 1-5 years 241,288 210,319 177,250 223,654 233,829 3.2 0 17 42 241,22

 ������������������������������������������ > 5 years 33,836 30,459 31,220 34,250 43,612 -22.4 0 0 0 33,83

Risk-Based Capital: Credit Equivalent Amount

Total current exposure to tier 1 capital (%)������������������� 48.4 44.9 41.2 45.9 57.3 0.2 0.7

Total potential future exposure to tier 1 capital (%)������ 82.8 82.9 88.9 83.3 83.6 0.1 0.1

Total exposure (credit equivalent amount) 

to tier 1 capital (%)�������������������������������������������������� 131.1 127.7 130.2 129.2 140.9 0.3 0.8 

Credit losses on derivatives***���������������������������������� 544.0 259.0 100.0 767.0 605.0 -10.1 0.0 1.0 

HELD FOR TRADI

Number of institutions reporting derivatives����������������� 200 189 195 197 207 -3.4 11 76 56 5

Total assets of institutions reporting derivatives ���������� 9,001,838 8,882,950 8,949,285 8,873,916 8,911,543 1.0 775 32,396 222,924 8,745,74

Total deposits of institutions reporting derivatives������� 6,139,839 6,078,628 6,095,318 6,145,572 6,014,547 2.1 626 26,120 172,274 5,940,82

Derivative Contracts by Underlying Risk Exposur

Interest rate�������������������������������������������������������������������� 194,576,807 186,774,376 180,761,592 179,606,768 175,892,604 10.6 34 1,455 21,592 194,553,72

Foreign exchange���������������������������������������������������������� 20,699,946 18,072,001 17,462,757 16,439,507 15,510,936 33.5 0 0 2,576 20,697,37

Equity ����������������������������������������������������������������������������� 1,672,913 1,608,817 1,563,707 1,677,767 2,173,864 -23.0 0 1 233 1,672,67

Commodity & other�������������������������������������������������������� 1,145,723 1,077,566 934,851 974,849 924,183 24.0 0 0 75 1,145,64

Total�������������������������������������������������������������������������������� 218,095,389 207,532,761 200,722,908 198,698,891 194,501,586 12.1 34 1,456 24,477 218,069,42

Trading Revenues: Cash & Derivative Instruments

Interest rate�������������������������������������������������������������������� 4,209 144 304 707 3,547 18.7 0 0 36 4,17

Foreign exchange���������������������������������������������������������� -1,066 4,299 3,906 671 354 N/M 0 0 6 -1,072

Equity ����������������������������������������������������������������������������� 371 378 965 144 153 142.5 0 0 1 36

Commodity & other (including credit derivatives) �������� 637 1,815 3,004 417 1,648 -61.3 0 0 0 63

Total trading revenues��������������������������������������������������� 4,151 6,636 8,178 1,940 5,702 -27.2 0 0 44 4,10

Share of Revenue

Trading revenues to gross revenues (%) ���������������������� 3.5 5.4 6.6 1.6 4.7 0.0 0.

Trading revenues to net operating revenues (%)���������� 27.2 45.8 74.1 108.0 88.1 0.0 0.0 -1

HELD FOR PURPOSES OTHER THAN 

Number of institutions reporting derivatives����������������� 1,087 1,046 1,033 1,009 1,048 3.7 86 669 256 7

Total assets of institutions reporting derivatives ���������� 10,545,569 10,282,422 10,344,801 10,211,947 10,199,832 3.4 6,081 279,922 727,029 9,532,53

Total deposits of institutions reporting derivatives������� 7,198,934 7,015,333 7,035,433 7,098,433 6,955,097 3.5 5,064 226,948 558,595 6,408,32

Derivative Contracts by Underlying Risk Exposur

Interest rate�������������������������������������������������������������������� 1,973,049 1,839,575 1,879,980 1,847,762 2,004,409 -1.6 389 22,623 54,588 1,895,45

Foreign exchange���������������������������������������������������������� 124,108 134,777 134,258 115,478 86,272 43.9 0 35 669 123,40

Equity ����������������������������������������������������������������������������� 6,193 6,224 7,245 7,459 6,635 -6.7 7 132 425 5,62

Commodity & other�������������������������������������������������������� 7,593 5,246 6,835 4,073 2,112 259.5 0 77 86 7,43

Total notional amount ���������������������������������������������������� 2,110,943 1,985,821 2,028,318 1,974,772 2,099,429 0.5 396 22,867 55,768 2,031,91

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

* 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 contract

** 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 13 2010, Volume 4, No. 4

Quarterly Banking Profile

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

Savings Banks)

Asset Size Distribution

(dollar figures in millions)

3rd 

Quarter

2010

2nd 

Quarter

2010

1st 

Quarter

2010

4th 

Quarter

2009

3rd 

Quarter 

2009

% Change 

09Q3-

10Q3

Less than 

$100 

Million

$100 

Million to 

$1 Billion

$1 Billion 

to $10 

Billion

Greater 

than $10 

Billion

Assets Securitized and Sold with Servicing Retained or with Recourse or Other Seller-Provided Credit Enhancement

Number of institutions reporting securitization activities ����������������������������������������� 138 128 126 141 142 -2.8 21 68 20 2

Outstanding Principal Balance by Asset Type 

1-4 family residential loans�������������������������������������������������������������������������������� $776,028 $1,180,361 $1,194,082 $1,208,975 $1,225,978 -36.7 $319 $462 $2,287 $772,96

Home equity loans��������������������������������������������������������������������������������������������� 0 0 15 5,947 6,205 -100.0 0 0 0 

Credit card receivables�������������������������������������������������������������������������������������� 14,320 15,452 16,133 363,486 391,417 -96.3 0 796 0 13,52

Auto loans ���������������������������������������������������������������������������������������������������������� 326 486 600 7,182 8,277 -96.1 0 0 54 27

Other consumer loans ��������������������������������������������������������������������������������������� 4,333 5,021 5,610 24,692 25,335 -82.9 0 0 0 4,33

Commercial and industrial loans����������������������������������������������������������������������� 7,972 3,796 4,127 7,649 8,436 -5.5 1 8 664 7,30

All other loans, leases, and other assets* �������������������������������������������������������� 210,199 206,675 192,853 198,835 198,346 6.0 5 48 118 210,02

Total securitized and sold������������������������������������������������������������������������������������������ 1,013,180 1,411,792 1,413,420 1,816,767 1,863,994 -45.6 324 1,314 3,123 1,008,41

Maximum Credit Exposure by Asset Type 

1-4 family residential loans�������������������������������������������������������������������������������� 4,834 4,953 5,166 5,868 6,203 -22.1 2 22 0 4,81

Home equity loans��������������������������������������������������������������������������������������������� 0 0 14 1,023 1,006 -100.0 0 0 0 

Credit card receivables�������������������������������������������������������������������������������������� 574 664 730 134,193 136,043 -99.6 0 139 0 43

Auto loans ���������������������������������������������������������������������������������������������������������� 6 6 6 637 745 -99.2 0 0 6 

Other consumer loans ��������������������������������������������������������������������������������������� 207 245 237 1,410 1,434 -85.6 0 0 0 20

Commercial and industrial loans����������������������������������������������������������������������� 102 94 95 225 274 -62.8 0 0 86 1

All other loans, leases, and other assets���������������������������������������������������������� 1,142 248 257 287 333 242.9 0 4 0 1,13

Total credit exposure ������������������������������������������������������������������������������������������������� 6,864 6,210 6,506 143,643 146,038 -95.3 2 165 91 6,60

Total unused liquidity commitments provided to institution's own securitizations ��� 211 166 162 387 398 -47.0 1 0 1 20

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

1-4 family residential loans�������������������������������������������������������������������������������� 6.0 3.7 3.9 4.4 4.6 3.2 0.

Home equity loans��������������������������������������������������������������������������������������������� 0.0 0.0 0.0 1.3 1.3 0.0 0.

Credit card receivables�������������������������������������������������������������������������������������� 1.2 1.5 1.5 2.7 2.9 0.0 2.

Auto loans ���������������������������������������������������������������������������������������������������������� 1.4 1.2 1.2 2.3 2.4 0.0 0.

Other consumer loans ��������������������������������������������������������������������������������������� 3.4 3.7 3.3 3.9 3.6 0.0 0.

Commercial and industrial loans����������������������������������������������������������������������� 0.1 0.2 0.3 2.3 2.9 0.0 21.

All other loans, leases, and other assets���������������������������������������������������������� 1.5 2.6 2.2 3.5 1.2 0.0 0.

Total loans, leases, and other assets ����������������������������������������������������������������������� 5.0 3.5 3.6 4.0 3.9 3.2 1.

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

1-4 family residential loans�������������������������������������������������������������������������������� 11.5 7.8 8.5 7.9 7.5 1.5 0.1

Home equity loans��������������������������������������������������������������������������������������������� 0.0 0.0 0.0 2.0 1.8 0.0 0.

Credit card receivables�������������������������������������������������������������������������������������� 0.5 0.7 0.8 3.0 2.6 0.0 3.

Auto loans ���������������������������������������������������������������������������������������������������������� 0.3 0.2 0.3 0.2 0.3 0.0 0.

Other consumer loans ��������������������������������������������������������������������������������������� 2.9 2.7 2.7 3.6 3.6 0.0 0.

Commercial and industrial loans����������������������������������������������������������������������� 0.1 0.1 0.1 1.0 1.2 0.0 0.

All other loans, leases, and other assets���������������������������������������������������������� 9.8 8.5 7.5 4.3 3.6 8.9 0.

Total loans, leases, and other assets ����������������������������������������������������������������������� 10.9 7.8 8.3 6.4 5.9 1.6 1.9

Securitized Loans, Leases, and Other Assets Charged-off 

(net, YTD, annualized, %) 

1-4 family residential loans�������������������������������������������������������������������������������� 0.9 0.4 0.2 1.0 0.7 0.0 0.

Home equity loans��������������������������������������������������������������������������������������������� 0.0 0.0 0.0 1.8 1.4 0.0 0.

Credit card receivables�������������������������������������������������������������������������������������� 6.2 4.2 2.2 10.2 7.6 0.0 8.

Auto loans ���������������������������������������������������������������������������������������������������������� 0.9 0.4 0.3 2.5 1.9 0.0 0.

Other consumer loans ��������������������������������������������������������������������������������������� 1.4 0.9 0.4 1.0 0.8 0.0 0.

Commercial and industrial loans����������������������������������������������������������������������� 0.0 0.0 0.0 13.9 10.0 0.0 0.

All other loans, leases, and other assets���������������������������������������������������������� 0.2 0.0 0.0 0.1 0.0 0.0 0.

Total loans, leases, and other assets ����������������������������������������������������������������������� 0.9 0.4 0.2 2.8 2.1 0.0 5.

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

Home equity loans��������������������������������������������������������������������������������������������� 0 0 0 316 396 -100.0 0 0 0 

Credit card receivables�������������������������������������������������������������������������������������� 6,073 5,088 4,831 62,235 73,401 -91.7 0 62 0 6,01

Commercial and industrial loans����������������������������������������������������������������������� 2 3 4 894 930 -99.8 0 2 0 

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

Home equity loans��������������������������������������������������������������������������������������������� 0 0 0 1 2 -100.0 0 0 0 

Credit card receivables�������������������������������������������������������������������������������������� 0 0 0 789 788 -100.0 0 0 0 

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

Assets Sold with Recourse and Not Securitized

Number of institutions reporting asset sales������������������������������������������������������������ 847 834 819 826 821 3.2 167 520 117 4

Outstanding Principal Balance by Asset Type 

1-4 family residential loans�������������������������������������������������������������������������������� 61,015 62,233 62,198 66,978 68,000 -10.3 1,152 10,497 4,646 44,72

Home equity, credit card receivables, auto, and other consumer loans ��������� 41 41 40 908 1,024 -96.0 0 9 17 1

Commercial and industrial loans����������������������������������������������������������������������� 445 537 669 2,654 2,844 -84.4 1 48 20 37

All other loans, leases, and other assets���������������������������������������������������������� 52,953 52,435 48,635 48,736 47,971 10.4 7 83 322 52,54

Total sold and not securitized������������������������������������������������������������������������������������ 114,454 115,246 111,542 119,277 119,840 -4.5 1,159 10,636 5,005 97,65

Maximum Credit Exposure by Asset Type 

1-4 family residential loans�������������������������������������������������������������������������������� 14,994 14,193 13,702 16,534 15,419 -2.8 118 1,717 2,878 10,28

Home equity, credit card receivables, auto, and other consumer loans ��������� 20 21 21 100 104 -80.8 0 6 3 1

Commercial and industrial loans����������������������������������������������������������������������� 77 77 62 1,934 2,003 -96.2 1 37 20 1

All other loans, leases, and other assets���������������������������������������������������������� 12,901 12,749 10,429 10,391 10,136 27.3 3 55 12 12,83

Total credit exposure ������������������������������������������������������������������������������������������������� 27,992 27,039 24,214 28,959 27,662 1.2 122 1,816 2,912 23,14

Support for Securitization Facilities Sponsored by Other Institutions 

Number of institutions reporting securitization facilities sponsored by others ������� 151 129 79 58 60 151.7 27 72 38 1

Total credit exposure ������������������������������������������������������������������������������������������������� 28,219 9,262 6,445 4,297 4,872 479.2 25 255 156 27,78

Total unused liquidity commitments ������������������������������������������������������������������������� 504 418 846 545 327 54.1 0 0 0 50

Other

Assets serviced for others**�������������������������������������������������������������������������������������� 5,891,806 5,956,287 5,995,633 6,011,088 5,978,455 -1.4 4,279 82,782 97,514 5,707,23

Asset-backed commercial paper conduits 

Credit exposure to conduits sponsored by institutions and others������������������ 11,649 7,299 7,253 15,953 17,649 -34.0 5 0 53 11,59

Unused liquidity commitments to conduits sponsored by institutions 

 and others �������������������������������������������������������������������������������������������������� 82,137 83,062 87,156 170,373 182,740 -55.1 0 0 1,373 80,76

Net servicing income (for the quarter)���������������������������������������������������������������������� 3,084 3,587 5,164 6,874 5,995 -48.6 34 107 136 2,80

Net securitization income (for the quarter)��������������������������������������������������������������� 164 156 13 1,615 1,163 -85.9 1 7 4 15

Total credit exposure to Tier 1 capital (%)***������������������������������������������������������������ 5.40 3.70 3.30 15.90 16.20 0.90 1.80 

* Line item titled “All other loans and all leases” for quarters prior to March 31, 2006

** 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 14 2010, Volume 4, No. 4

Total assets of the nation’s 7,760 FDIC-insured 

commercial banks and savings institutions increased by 

$163.0 billion (1.2 percent) during third quarter 2010. 

Eighty-one percent of the quarter’s asset growth was 

funded by deposits, as noninterest-bearing deposits 

increased by 4.3 percent ($69.1 billion) and interestbearing deposits increased by 0.8 percent ($63.5 

billion). Domestic office deposits of banks and thrifts 

increased by 0.9 percent ($70.3 billion), and foreign 

office deposits increased by 4.2 percent ($62.3 billion).

Estimated insured deposits at all FDIC-insured institutions decreased by 0.3 percent during the third quarter 

but are 2.0 percent higher than four quarters earlier. For 

institutions existing at the start and end of the third 

quarter, insured deposits increased during the quarter at 

4,285 institutions (55 percent), decreased at 3,438 institutions (44 percent), and remained unchanged at 32 

institutions.

The Deposit Insurance Fund (DIF) balance increased by 

$7.2 billion during the third quarter to -$8.0 billion 

(unaudited), the third consecutive quarterly increase 

following seven quarters of decline. Assessment income 

of $3.6 billion and a $3.8 billion negative provision for 

insurance losses were the primary contributors to the 

improvement in the DIF balance. Interest earnings, 

combined with unrealized gains on available-for-sale 

securities and other net revenue, boosted the balance by 

another $0.3 billion. Operating expenses reduced the 

balance by $0.4 billion.

The DIF’s reserve ratio was -0.15 percent on September 

30, 2010, up from -0.28 percent at June 30, 2010, and 

up from -0.16 percent one year earlier. Forty-one FDICinsured institutions with combined assets of $13.9 

billion failed during third quarter 2010, at an estimated 

cost of $2.3 billion. For the first three quarters of 2010, 

127 insured institutions with combined assets of $83.3 

billion failed, at a currently estimated cost to the DIF of 

$19.4 billion.

Changes to Deposit Insurance Fund Management

The Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank), enacted in July 2010, 

revised the statutory authorities governing the FDIC’s 

management of the DIF. Specifically, Dodd-Frank: (1) 

raised the minimum designated reserve ratio (DRR), 

which the FDIC must set each year, to 1.35 percent 

from 1.15 percent; (2) removed the 1.5 percent upper 

limit on the DRR, thereby effectively eliminating the 

cap on the size of the fund; (3) required that the DIF 

reserve ratio reach 1.35 percent by September 30, 2020 

(rather than 1.15 percent by the end of 2016, as 

formerly required); (4) required that, in setting assessments, the FDIC offset the effect of raising the minimum DRR from 1.15 percent to 1.35 percent on 

insured depository institutions with total consolidated 

assets of less than $10 billion; (5) eliminated the 

requirement that the FDIC pay dividends when the 

reserve ratio is between 1.35 percent and 1.5 percent; 

and (6) continued the FDIC’s authority to declare dividends when the reserve ratio is at least 1.5 percent, but 

granted the FDIC sole discretion in determining 

whether to suspend or limit dividends.1

In October 2010, the FDIC adopted a new Restoration 

Plan to ensure that the reserve ratio reaches 1.35 

percent by September 30, 2020. Because of lower 

expected losses over the next five years and the 

additional time provided by Dodd-Frank to meet the 

minimum (albeit higher) DRR, the Restoration Plan 

eliminated the uniform 3 basis point increase in assessment rates scheduled to go into effect on January 1, 

2011.

Also in October, the FDIC approved the publication 

of a proposed rule with several features that would 

improve insurance fund management using the authority provided under Dodd-Frank. First, the FDIC 

1

 Pub. L. No. 111-203, §§332 and 334, 124 Stat. 1376, 1539 (to be 

codified at 12 U.S.C. § 1817).

■ DIF Reserve Ratio Rises 13 Basis Points to -0.15 Percent

■ Insured Deposit Growth Flat in Third Quarter

■ 41 Institutions Fail during Third Quarter

■ New Restoration Plan Removes Scheduled Assessment Rate Increase for 2011

■ Changes Proposed for Deposit Insurance Fund Management and Risk-Based 

Assessments

Insur
FDIC Quarterly 15 2010, Volume 4, No. 4

Quarterly Banking Profile

“custodial banks.”3 On November 9, 2010, the FDIC 

approved a proposed rule that would implement these 

changes. The FDIC expects to finalize this rulemaking 

in first quarter 2011. The change in the assessment base 

would take effect in second quarter 2011.

The proposed rule would require all insured depository 

institutions to report their average consolidated total 

assets on a daily basis. The proposal would define average 

tangible equity as the average of month-end Tier 1 capital 

within a quarter. Institutions with less than $1 billion in 

average consolidated total assets could, however, choose 

to report end-of-quarter Tier 1 capital. Tier 1 capital, 

which excludes many intangible assets, avoids an increase 

in regulatory burden that a new definition of capital could 

cause and also provides a clearly understood capital buffer 

for the DIF in the event of an institution’s failure.

The following table compares the distribution by institution asset size of the current and estimated proposed 

assessment bases, using data as of September 30, 2010. 

The new assessment base will require some changes in 

reporting that will not take effect until the second quarter of next year, as explained in the footnotes to the 

table. The table therefore provides only an estimate of 

what the proposed assessment base would be if it were 

in effect as of September 30, 2010.

3

 For the custodial bank adjustment, Dodd-Frank directed the FDIC to 

define a custodial bank based on factors including the percentage of 

total revenues generated by custodial businesses and the level of 

assets under custody. The proposal therefore would define a custodial 

bank as an institution whose previous calendar year-end custody and 

safekeeping assets were at least $50 billion or an institution that 

derived more than 50 percent of its revenue from custody and safekeeping activities during the previous calendar year. A custodial bank’s 

assessment base would exclude the bank’s daily average amount of 

safe, highly liquid, short-term assets, not to exceed the daily average 

value of those deposits held in a custody and safekeeping account.

proposed increasing the designated reserve ratio to 2 

percent of estimated insured deposits. The FDIC would 

view this target as a long-term minimum goal for the 

fund. An analysis conducted by FDIC staff found that a 

2 percent target would significantly improve the 

chances that the FDIC could maintain stable, moderate 

insurance assessment rates through economic or banking cycles while also maintaining a positive DIF balance 

even during a serious economic or banking downturn. 

The FDIC also proposed suspending dividends permanently when the reserve ratio reaches 1.5 percent. In 

lieu of paying dividends, the FDIC proposed future 

premium rate reductions, first when the reserve ratio 

exceeds 1.15 percent and again when the ratio exceeds 

2.0 percent and 2.5 percent. The FDIC expects to finalize a rule on the designated reserve ratio this year and 

on the remaining features in first quarter 2011.

Change in the Assessment Base

Dodd-Frank requires the FDIC to amend its regulations 

to define the assessment base as average consolidated 

total assets minus average tangible equity, rather than 

total domestic deposits (which, with minor adjustments, 

it has been since 1935). Dodd-Frank allows the FDIC 

to modify the assessment base for banker’s banks2 and 

2

 Dodd-Frank defines a “banker’s bank” as set forth in 12 U.S.C. 24. 

Under the proposal, the FDIC would exclude from a banker’s bank’s 

assessment base the sum of its average daily balances due from 

Federal Reserve Banks (reserve balances) plus its average daily federal 

funds sold, limited to the sum of the bank’s average daily deposit 

liabilities from its member banks plus its average daily federal funds 

purchased. The proposal would make a banker’s bank that was chartered to provide services only to its parent holding company or entities 

that are directly or indirectly controlled by its parent holding company 

ineligible for the exclusion.

Distribution of the Assessment Base for FDIC-Insured Commercial Banks and Savings Institutions

by Asset Size ($ Billions)*

Data as of September 30, 2010

Asset Size

Number of 

Institutions

Percent of 

Total 

Institutions

Current 

Assessment 

Base**

Percent of 

Current Base

Estimated 

Proposed 

Assessment Base***

Percent of 

Estimated 

Proposed Base

Less than $1 Billion 7,095 91.4% 1,209 15.7% 1,319 10

$1 - $10 Billion 556 7.2% 1,066 13.8% 1,262 10

$10 - $50 Billion 72 0.9% 880 11.4% 1,219 10

$50 - $100 Billion 18 0.2% 758 9.8% 1,082 9

Over $100 Billion 19 0.2% 3,811 49.3% 7,196 59

Total 7,760 100.0% 7,724 100.0% 12,077 100

* Excludes 10 insured U.S. branches of foreign ban

** The current assessment base is derived from domestic deposits

*** The estimates are derived from average quarterly assets as reported on the Call Report or TFR for September 30, 2010. Some institutions currently report their quarterly

average assets as an average of weekly amounts; the proposal requires all insured institutions to calculate their assessment base from quarterly average assets based on 

average daily amounts. The estimates also rely on quarter-end Tier 1 capital as reported for September 30. However, the proposal will require institutions with asset

greater than $1 billion to calculate their assessment base using average month-end Tier 1 capital within the quarter; this average is not yet reported. In addition, the estimated amounts do not account for the proposed adjustments permitted under Dodd-Frank for banker’s banks or “custodial banks,” which will also require new reportin
FDIC Quarterly 16 2010, Volume 4, No. 4

good, and to improve the way the pricing rules account 

for the losses that the FDIC may incur if such an institution fails.

The proposal would eliminate risk categories for large 

institutions. As required by Dodd-Frank, the proposed 

rule would no longer use long-term debt issuer ratings 

to calculate assessment rates for large institutions. The 

FDIC would combine CAMELS ratings and certain 

financial measures into two scorecards—one for most 

large institutions and another for the remaining very 

large institutions that are structurally and operationally 

complex or that pose unique challenges and risks in 

case of failure (highly complex institutions). In general, 

a highly complex institution would be an institution 

(other than a credit card bank) with more than $50 

billion in total assets that is controlled by a parent or 

intermediate parent company with more than $500 

billion in total assets or a processing bank or trust 

company with at least $10 billion in total assets. Like 

the assessment base proposal, the proposed rule for large 

bank pricing would take effect in second quarter 2011.

The following table shows the initial base assessment 

rates, range of possible rate adjustments, and minimum 

and maximum total base rates proposed to take effect in 

second quarter 2011.

Proposed Initial and Total Base Assessment Rates*

Risk

Category 

I

Risk

Category 

II

Risk

Category 

III

Risk

Category 

IV

Large and 

Highly

Complex 

Institutions

Initial base 

assessment rate 5–9 14 23 35 5–35

Unsecured debt 

adjustment** -4.5–0 -5–0 -5–0 -5–0 -5–

Brokered deposit 

adjustment — 0–10 0–10 0–10 0–10

Total base 

assessment rate 2.5–9 9-24 18-33 30-45 2.5–

* Total base assessment rates do not include the proposed depository institution 

debt adjustment. As under current rules, the FDIC would be able to adjust rates

uniformly by up to 3 basis points above or below the base assessment rates 

without seeking public notice and comment

** The unsecured debt adjustment could not exceed the lesser of 5 basis points 

or 50 percent of an institution’s initial base assessment rate (IBAR); thus for 

example, an institution with an IBAR of 5 basis points would have a maximum 

unsecured debt adjustment 2.5 basis points and could not have a total base

assessment rate lower than 2.5 basis point

Author: Kevin Brown, Sr. Financial Analyst

Division of Insurance and Research

(202) 898-6817

Dodd-Frank also required that, for at least five years, 

the FDIC must make available to the public the reserve 

ratio and the DRR using both estimated insured deposits and the new assessment base. As explained in the 

footnotes to the table above, the new assessment base 

will require some changes in reporting, so only an estimate is available at this time. As of September 30, 

2010, the FDIC estimates that the reserve ratio would 

have been -0.07 percent using the new assessment base 

(compared to -0.15 percent using estimated insured 

deposits) and that the proposed 2 percent DRR using 

estimated insured deposits would have been 0.9 percent 

using the estimated new assessment base.

Changes in Assessment Rates

The changes to the assessment base required by DoddFrank necessitate certain changes to assessment rates. 

Because the new assessment base will be larger than the 

current base, the assessment base proposal includes 

proposed new rates that would result in collecting 

approximately the same amount of assessment revenue 

as under the current rate schedule using the existing 

(domestic deposit) base.

In addition, the current risk-based premium rules 

include adjustments to rates for types of funding that 

either pose heightened risk to the DIF or that help to 

offset risk to the DIF. To conform to the new assessment 

base definition, the assessment base proposal would 

recalibrate the rate adjustments for unsecured debt and 

brokered deposits and eliminate the secured liability 

adjustment. The FDIC also proposes to increase the 

assessment rate of an institution that holds unsecured 

debt issued by another insured depository institution (for 

which the issuing institution receives a rate reduction). 

The issuance of unsecured debt by an insured depository 

institution lessens the potential loss to the DIF in the 

event of the institution’s failure. However, when the 

debt is held by another insured depository institution, 

the overall risk to the DIF is not reduced.

At the same time that the FDIC issued its proposed rule 

on the assessment base, it also approved for publication 

a proposed rule amending the risk-based pricing rules 

for large insured depository institutions. The objectives 

of the proposal are to better account for risk at the time 

a large institution assumes the risk, to better differentiate risk among large institutions when conditions are 
FDIC Quarterly 17 2010, Volume 4, No. 4

Quarterly Banking Profile

DIF Reserve Ratios

Percent of Insured Deposits

1.22 1.22 1.19

1.01

0.76

0.36

0.27 0.22

-0.16 -0.39 -0.38 -0.28 -0.15

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

Table I-B. Insurance Fund Balances and Selected Indicators

(dollar figures in millions)

Deposit Insurance Fund*

3rd 

Quarter 

2010

2nd 

Quarter 

2010

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

Beginning Fund Balance ..... -$15,247 -$20,717 -$20,862 -$8,243 $10,368 $13,007 $17,276 $34,588 $45,217 $52,843 $52,413 $51,754 $51,227

Changes in Fund Balance:

Assessments earned .............. 3,592 3,242 3,278 3,042 2,965 9,095 2,615 996 881 640 448 239 170

Interest earned on 

investment securities ...... 40 64 62 76 176 240 212 277 526 651 618 585 640

Realized Gain on Sale of

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

Operating expenses ............... 414 382 345 379 328 298 266 290 249 256 238 262 243

Provision for insurance 

losses ............................... -3,763 -2,552 3,021 17,766 21,694 11,615 6,637 19,163 11,930 10,221 525 39 132

All other income, 

net of expenses ............... 94 55 22 2,721 308 375 2 15 16 1 0 -2 24

Unrealized gain/(loss) on 

available-for-sale 

securities ......................... 163 -61 149 -313 -770 -957 -331 551 -346 1,559 127 138 68

Total fund balance change ..... 7,238 5,470 145 -12,619 -18,611 -2,639 -4,269 -17,312 -10,629 -7,626 430 659 527

Ending Fund Balance ........... -8,009 -15,247 -20,717 -20,862 -8,243 10,368 13,007 17,276 34,588 45,217 52,843 52,413 51,754

Percent change from 

four quarters earlier ......... NM NM NM NM NM -77.07 -75.39 -67.04 -33.17 -11.73 4.13 4

Reserve Ratio (%) ................. -0.15 -0.28 -0.38 -0.39 -0.16 0.22 0.27 0.36 0.76 1.01

Estimated Insured 

Deposits** .............................. 5,423,482 5,438,508 5,473,098 5,406,672 5,316,023 4,817,782 4,831,728 4,750,780 4,545,194 4,468,086 4,438,255 4,292,211 4,242,607

Percent change from 

four quarters earlier ......... 2.02 12.88 13.27 13.81 16.96 7.83 8.87 10.68 7.13 5.50 4

Domestic Deposits ............... 7,753,335 7,681,265 7,702,422 7,705,329 7,561,309 7,561,998 7,546,999 7,505,409 7,230,328 7,036,267 7,076,719 6,921,678 6,747,998

Percent change from 

four quarters earlier ......... 2.54 1.58 2.06 2.66 4.58 7.47 6.65 8.43 7.15 5.04 5

Number of institutions 

reporting ......................... 7,770 7,840 7,944 8,022 8,109 8,205 8,257 8,315 8,394 8,462 8,505 8,545 8,570

Deposit Insurance Fund Balance 

and Insured Deposits

($ Millions)

DIF 

Balance

DIF-Insured 

Deposits

9/07 $51,754 $4,242,607

12/07 52,413 4,292,211

3/08 52,843 4,438,255

6/08 45,217 4,468,086

9/08 34,588 4,545,194

12/08 17,276 4,750,780

3/09 13,007 4,831,728

6/09 10,368 4,817,782

9/09 -8,243 5,316,023

12/09 -20,862 5,406,672

3/10 -20,717 5,473,098

6/10 -15,247 5,438,508

9/10 -8,009 5,423,482

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

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

Problem Institutions

Number of institutions ��������������������������������������������������������������� 860 552 702 252 76 50 52

Total assets�������������������������������������������������������������������������������� $379,230 $345,931 $402,782 $159,405 $22,189 $8,265 $6,607

Failed Institutions

Number of institutions ��������������������������������������������������������������� 127 95 140 25 3 0 0

Total assets�������������������������������������������������������������������������������� $83,282 $104,665 $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

* Quarterly financial statement results are unaudited. NM - Not meaningf

** Beginning in the third quarter of 2009, estimated insured deposits reflected the temporary coverage increase to $250,000, which was made permanent by the Dodd Frank Act in 2010

*** 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 September 30
FDIC Quarterly 18 2010, Volume 4, No. 4

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

(dollar figures in millions) 

September 30, 2010

Number of 

Institutions

Total 

Assets

Domestic 

Deposits*

Est. Insured 

Deposits

Commercial Banks and Savings Institutions

FDIC-Insured Commercial Banks ����������������������������������������������� 6,622 $12,130,344 $6,837,464 $4,613,124

 FDIC-Supervised ������������������������������������������������������������������� 4,381 1,947,075 1,474,340 1,168,071

 OCC-Supervised�������������������������������������������������������������������� 1,415 8,464,632 4,355,932 2,797,825

 Federal Reserve-Supervised������������������������������������������������� 826 1,718,637 1,007,191 647,228

FDIC-Insured Savings Institutions ���������������������������������������������� 1,138 1,252,946 900,571 797,360

 OTS-Supervised Savings Institutions������������������������������������ 740 929,047 662,421 590,973

 FDIC-Supervised State Savings Banks��������������������������������� 398 323,899 238,150 206,387

Total Commercial Banks and Savings Institutions ���������������������� 7,760 13,383,291 7,738,035 5,410,484

Other FDIC-Insured Institutions

U.S. Branches of Foreign Banks ������������������������������������������������� 10 28,704 15,300 12,9

Total FDIC-Insured Institutions������������������������������������������������������ 7,770 13,411,994 7,753,335 5,423,482

* Excludes $1.5 trillion in foreign office deposits, which are uninsure

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

Quarter Ending June 30, 2010

(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 1,746 22.27 $543 

12.01–14.00 1,560 19.90 1,655 2

14.01–15.99 1,890 24.11 2,053 2

16.00–24.00 387 4.94 422 

Risk Category II

17.00–22.00 1,140 14.54 1,963 2

22.01–43.00 268 3.42 722 

Risk Category III

27.00–32.00 488 6.22 160 

32.01–58.00 166 2.12 89 

Risk Category IV 40.00–45.00 128 1.63 47 

45.01–77.50 67 0.85 29 

Note: Institutions are categorized based on supervisory ratings, debt ratings and financial data as of June 30, 2010
FDIC Quarterly 19 2010, Volume 4, No. 4

Quarterly Banking Profile

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 to participate 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 beginning 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

1

 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. 2

 See http://www.fdic.gov/news/board/Mar1709rule.pdf. 3

 See http://www.fdic.gov/regulations/laws/federal/2009/09finalAD37

Oct23.pdf. 

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 remained in the extended program were subject 

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

On June 22, 2010, the FDIC adopted a final rule 

extending the TAGP for another six months, through 

December 31, 2010. The final rule is almost identical to 

an interim rule adopted on April 13. Under the rule, 

the FDIC could extend the program for an additional 

12 months without further rulemaking.5

Noninterest-Bearing Transaction Accounts 

Fully Insured under Dodd-Frank Reform Bill

According to an amendment to the Dodd-Frank 

Wall Street Reform and Consumer Protection Act, 

noninterest-bearing transaction accounts at all FDICinsured institutions will be fully insured for two years. 

This amendment takes effect on December 31, 2010. 

Coverage of noninterest-bearing transaction accounts is 

separate from the regular insurance limit of $250,000. 

Assessments for noninterest-bearing transaction 

accounts will be included in the regular assessments 

for insured institutions.6

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, were based on the 

4

 See http://www.fdic.gov/news/board/aug26no3.pdf. The final rule 

requires that interest rates on qualifying NOW accounts offered by 

banks participating in the program be reduced to 0.25 percent from 

0.50 percent. The rule also requires TAG assessment reporting to be 

based on average daily balances but makes no changes to the assessment rates for participating institutions. 

5

 See http://www.fdic.gov/news/news/press/2010/pr10139.html. 6

 See http://www.fdic.gov/regulations/reform/summary.html. 

■ Debt Guarantee Program Ended October 31, 2009

■ Transaction Account Guarantee Program Extended to December 31, 2010

■ $107 Billion Guaranteed in Transaction Accounts over $250,000

■ $287 Billion Outstanding in Debt Guarantee Program

TEMPORARY LIQUIDITY GUARANTEE PROGRAM
FDIC Quarterly 20 2010, Volume 4, No. 4

Table I-C. Participation in Temporary Liquidity Guarantee Program

September 30, 2010 Total 

Eligible Entities

Number 

Opting In

Percent 

Opting In

Transaction Account Guarantee Program Extension to December 31, 2010

Depository Institutions with Assets <= $10 Billion�������������������������������������������������� 7,659 5,696 74.4

Depository Institutions with Assets > $10 Billion ���������������������������������������������������� 110 35 31.8

 Total Depository Institutions*���������������������������������������������������������������������������� 7,769 5,731 73.8

Debt Guarantee Program

Depository Institutions with Assets <= $10 Billion�������������������������������������������������� 7,659 4,029 52.6

Depository Institutions with Assets > $10 Billion ���������������������������������������������������� 110 97 88.2

 Total Depository Institutions*���������������������������������������������������������������������������� 7,769 4,126 53.1

Bank and Thrift Holding Companies and Non-Insured Affiliates ��������������������������� 5,992 3,363 56.1

 All Entities���������������������������������������������������������������������������������������������������������� 13,761 7,489 54.4

* Depository institutions include insured branches of foreign banks (IBAs)

$250,000, fewer than one-third the number of accounts 

reported at year-end 2009. These deposit accounts 

totaled $155 billion, of which $107 billion was guaranteed under the TAGP. More than 5,100 FDIC-insured 

institutions reported noninterest-bearing transaction 

accounts over $250,000 in value.

$287 Billion in FDIC-Guaranteed Debt Was 

Outstanding at September 30, 2010

Sixty-eight financial entities—40 insured depository 

institutions and 28 bank and thrift holding companies 

and nonbank affiliates—had $287 billion in guaranteed 

debt outstanding at the end of third 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 

84 percent of FDIC-guaranteed debt outstanding at 

September 30, 2010.

Debt outstanding at September 30, 2010, had longer 

terms at issuance, compared to debt outstanding at yearend 2008. Less than 1 percent of debt outstanding 

matures in one year or less, compared to 52 percent at 

year-end 2008; and 85 percent matures more than two 

years after issuance, compared to 39 percent at December 31, 2008. Among types of debt instruments, 92 

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 0.01 percent from 

43 percent at year-end 2008.

Author: Katherine Wyatt

Chief, Financial Analysis Section

Division of Insurance and Research

(202) 898-6755

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 extension, 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

About 74 percent of FDIC-insured institutions opted in 

to the TAGP extension through December 31, 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. 

$107 Billion in Transaction Accounts over 

$250,000 Guaranteed

According to third quarter 2010 Call and Thrift Financial Reports, insured institutions reported 190,817 

noninterest-bearing transaction accounts over 
FDIC Quarterly 21 2010, Volume 4, No. 4

Quarterly Banking Profile

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�������������������������������������������������������������� $3,437 $3,437

First Quarter 2009 ����������������������������������������������������������������� 3,433 3,433 90

Second Quarter 2009 ������������������������������������������������������������ 1,413 385 1,797 179

Third Quarter 2009 ���������������������������������������������������������������� 691 280 971 182

Fourth Quarter 2009�������������������������������������������������������������� 503 207 709 188

First Quarter 2010** 14 14 207

Second Quarter 2010 ������������������������������������������������������������ 115

Third Quarter 2010����������������������������������������������������������������� 111

Total��������������������������������������������������������������������������������� $9,491 $872 $10,363 $961

* 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

September 30, 2010

(dollar figures in millions)

Commercial 

Paper

Interbank

Eurodollar

Deposits

Medium 

Term Notes

Other 

Interbank 

Deposits

Other 

Senior 

Unsecured

Debt

Other 

Term Note All Debt

Share 

by Term

Term at Issuance

90 days or less�������������������������������������� $0 $0 $0 $0 $0 $0 $0 0.0%

91-180 days������������������������������������������� 0 0 0 0 0 0 0 0.0%

181-364 days����������������������������������������� 0 0 0 9 0 0 9 0.0%

1-2 years ����������������������������������������������� 0 0 43,376 2 0 771 44,148 15.4%

Over 2-3 years �������������������������������������� 0 0 80,447 0 3,352 6,003 89,801 31.3%

Over 3 years������������������������������������������ 1 0 139,981 4 3,713 9,151 152,849 53.3%

Total������������������������������������������������ 1 0 263,803 14 7,064 15,925 286,808

Share of Total���������������������������������������� 0.0% 0.0% 92.0% 0.0% 2.5% 5.6%

Table IV-C. Debt Outstanding in Guarantee Program 

September 30, 2010

(dollar figures in millions) Number Debt Outstanding Cap* for Group

Debt Outstanding 

Share of Cap

Insured Depository Institutions

Assets <= $10 Billion ������������������������������������������������������� 27 $1,586 $1,665 95.3

Assets > $10 Billion ��������������������������������������������������������� 13 44,826 112,817 39.7

Bank and Thrift Holding Companies,

Noninsured Affiliates�������������������������������������������������������������� 28 240,395 387,479 62.0

All Issuers����������������������������������������������������������������������� 68 286,808 501,961 57.1

* 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 liabilitie

See http://www2.fdic.gov/qbp/2008dec/tlgp2c.html for more informat

Table III-C. Transaction Account Guarantee Program

(dollar figures in millions) Sep. 30, 

2009

Dec. 31, 

2009

Mar. 31, 

2010

June 30, 

2010

Sep. 30, 

2010

% Change 

10Q2-10Q3

Number of Noninterest-Bearing Transaction Accounts 

over $250,000�������������������������������������������������������������� 646,955 687,430 308,843 320,029 190,817 -40.4

Amount in Noninterest-Bearing Transaction Accounts 

over $250,000�������������������������������������������������������������� $927,511 $1,008,508 $355,395 $344,576 $155,269 -54.9

Amount Guaranteed ���������������������������������������������������������� $765,772 $836,651 $278,184 $264,569 $107,565 -59.3

Table II-C. Cap on FDIC-Guaranteed Debt for Opt-In Entities

September 30, 2010

(dollar figures in millions)

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

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*������������������������������������ 110 $3,416 $4,270 3,919 $29,285 4,029 $33,555

Depository Institutions with Assets 

> $10 Billion*�������������������������������������� 39 269,228 336,535 58 23,578 97 360,113

Bank and Thrift Holding Companies, 

Noninsured Affiliates�������������������������������� 81 397,714 497,143 3,282 N/A 3,363 497,143

Total��������������������������������������������������������� 230 670,358 837,948 7,259 52,863 7,489 890,811

* Depository institutions include insured branches of foreign banks (IBAs). N/A - Not applicab
FDIC Quarterly 22 2010, Volume 4, No. 4

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.

Troubled Debt Restructurings – Many institutions are restructuring or modifying the terms of loans to provide payment relief 

for those borrowers who have suffered deterioration in their 

financial condition. Such loan restructurings may include, but 

are not limited to, reductions in principal or accrued interest, 

reductions in interest rates, and extensions of the maturity 

date. Modifications may be executed at the original contractuNotes 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 
FDIC Quarterly 23 2010, Volume 4, No. 4

Quarterly Banking Profile

Financial Assets (formerly 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 ASC Topic 320, if 

an institution intends to sell a debt security or it is more likely 

than not that it will be required to sell the debt security before 

recovery of its amortized cost basis, an other-than-temporary 

impairment has occurred and the entire difference between 

the security’s amortized cost basis and its fair value at the balance sheet date must be recognized in earnings. In these cases, 

the fair value of the debt security would become its new amortized cost basis. In addition, under ASC Topic 320, 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 current-period 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.

ASC Topic 805 (formerly 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.

ASC Topic 820 (formerly FASB Statement No. 157 Fair Value 

Measurements issued in September 2006) and ASC Topic 825 (formerly 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 

al interest rate on the loan, a current market interest rate, or a 

below-market interest rate. Many of these loan modifications 

meet the definition of a troubled debt restructuring (TDR).

The TDR accounting and reporting standards are set forth in 

ASC Subtopic 310-40, Receivables–Troubled Debt 

Restructurings by Creditors (formerly FASB Statement No. 

15, “Accounting by Debtors and Creditors for Troubled Debt 

Restructurings,” as amended). This guidance specifies that a 

restructuring of a debt constitutes a TDR if, at the date of 

restructuring, the creditor for economic or legal reasons related to a debtor’s financial difficulties grants a concession to 

the debtor that it would not otherwise consider.

In the Call Report, until a loan that is a TDR is paid in full or 

otherwise settled, sold, or charged off, it must be reported in 

the appropriate loan category, as well as identified as a performing TDR loan, if it is in compliance with its modified 

terms. If a TDR is not in compliance with its modified terms, 

it is reported as a past due and nonaccrual loan in the appropriate loan category, as well as distinguished from other past 

due and nonaccrual loans. To be considered in compliance 

with its modified terms, a loan that is a TDR must not be in 

nonaccrual status and must be current or less than 30 days past 

due on its contractual principal and interest payments under 

the modified repayment terms. A loan restructured in a TDR is 

an impaired loan. Thus, all TDRs must be measured for impairment in accordance with ASC Subtopic 310-10, Receivables – 

Overall (formerly FASB Statement No. 114, “Accounting by 

Creditors for Impairment of a Loan,” as amended), and the 

Call report Glossary entry for “Loan Impairment.”

Accounting for Loan Participations – Amended ASC Topic 860 

(formerly FAS 166) 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 amended ASC Topic 860 (discussed above), 

including advances under lines of credit that are transferred on 

or after the effective date of amended ASC Topic 860 even if 

the line of credit agreements were entered into before this 

effective date. Therefore, banks with a calendar year fiscal year 

must account for transfers of loan participations on or after 

January 1, 2010, in accordance with amended ASC Topic 

860. In general, loan participations transferred before the 

effective date of amended ASC Topic 860 (January 1, 2010, 

for calendar year banks) are not affected by this new accounting standard. Therefore, loan participations transferred before 

the effective date of amended ASC Topic 860 that were properly accounted for as sales under former FASB Statement No. 

140 will continue to be reported as having been sold.

Under amended ASC Topic 860, if a transfer of a portion of 

an entire financial asset meets the definition of a “participating interest,” then the transferor (normally the lead lender) 

must evaluate whether the transfer meets all of the conditions 

in this accounting standard to qualify for sale accounting.

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-than-temporary. To determine whether the impairment is other-thantemporary, an institution must apply other pertinent guidance 

in ASC Topic 320 , Investments-Debt and Equity Securities–

Overall; ASC Subtopic 325-20, Investments-Other–Cost 

Method Investments; and ASC Subtopic 325-40, 

Investments-Other–Beneficial Interests in Securitized 
FDIC Quarterly 24 2010, Volume 4, No. 4

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, 

ASC Topic 860 (formerly FASB Statement No. 140) requires 

that loans with this buy-back 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.

ASC Topics 860 & 810 (formerly 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 

revised FASB Statement No. 140, Accounting for Transfers 

and Servicing of Financial Assets and Extinguishments of 

Liabilities, by eliminating the concept of a “qualifying specialpurpose entity,” creating the concept of a “participating interest,” changing the requirements for derecognizing financial 

assets, and requiring additional disclosures. FAS 167 revised 

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.

ASC Topic 740 (formerly FASB Interpretation No. 48 on Uncertain 

Tax Positions) – FASB Interpretation No. 48, Accounting for 

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-for-sale 

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.

ASC Topic 715 (formerly 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 in subsequent periods as net 

periodic benefit costs are recognized in earnings.

ASC Topic 860 (formerly 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.

ASC Topic 815 (formerly 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 principal-only strips are not subject to FAS 133.

Purchased Impaired Loans and Debt Securities – ASC Topic 310 

(formerly 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 
FDIC Quarterly 25 2010, Volume 4, No. 4

Quarterly Banking Profile

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 

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.

ASC Topic 718 (formerly 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

ASC Topic 815 (formerly 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

Accounting Standards Codification – In June 2009, the FASB 

issued Statement No. 168, The FASB Accounting Standards 

CodificationTM and the Hierarchy of Generally Accepted 

Accounting Principles (FAS 168), to establish the FASB 

Codification as the single source of authoritative nongovernmental U.S. generally accepted accounting principles (U.S. 

GAAP). The FASB Codification reorganizes existing U.S. 

accounting and reporting standards issued by the FASB and 

other related private-sector standard setters, and all guidance 

contained in the FASB Codification carries an equal level of 

authority. All previously existing accounting standards documents are superseded as described in FAS 168. All other 

accounting literature not included in the FASB Codification 

is nonauthoritative. The FASB Codification can be accessed 

at http://asc.fasb.org/. The FASB Codification is effective for 

interim and annual periods ending after September 15, 2009. 

This an FFIEC reference guide at http://www.ffiec.gov/pdf/

ffiec_forms/CodificationIntroduction_201006.pdf.

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.
FDIC Quarterly 26 2010, Volume 4, No. 4

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 

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 foreclosed assets—involves the use of fair values. During periods 

of market stress, the fair values of some financial instruments 

and nonfinancial assets may decline.

FHLB advances – all borrowings by FDIC insured institutions 

from the Federal Home Loan Bank System (FHLB), as reported by Call Report filers and by TFR filers.

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.
FDIC Quarterly 27 2010, Volume 4, No. 4

Quarterly Banking Profile

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 

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:

(Percent)

Total 

Risk-Based 

Capital*

Tier 1

Risk-Based 

Capital*

Tier 1 

Leverage

Tangible

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.

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 risk-based 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
FDIC Quarterly 28 2010, Volume 4, No. 4

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.

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 was collected September 30, 

2009, at the same time that the risk-based assessment for the 

second quarter of 2009 was 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 riskbased assessment.

Prepaid Deposit Insurance Assessments – In November 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 riskbased 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 off-balance-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.

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 
FDIC Quarterly 29 2010, Volume 4, No. 4

from becoming negative during the crises. However, the 

fund’s reserve ratio would have had to have exceeded 

2 percent before the crises began. 

A Brief History of the Deposit Insurance Fund

An examination of historical trends in the deposit 

insurance fund since 1935 helps illustrate the reasons 

for the FDIC’s development of a new long-term policy 

for managing the fund. Twice since 1991, the fund’s 

resources have been insufficient to handle the costs 

associated with large numbers of bank failures without a 

dramatic increase in assessment rates.3 During both 

crises, and indeed ever since 1950, assessment rates 

have been pro-cyclical; that is, insured institutions have 

paid lower premiums during prosperous times and high 

premiums during times of industry distress, when they 

were least able to afford them. Assessment rates since 

the late 1980s have been volatile, rather than steady 

and predictable. As context for the analysis that 

follows, this section will review changes in the fund 

balance, the reserve ratio, the effective assessment rate, 

and the ratio of industry earnings to total assessments 

from 1935 to 2010.4

The banking industry remained highly regulated and 

few banks failed during the FDIC’s first four decades, 

allowing the fund balance to increase steadily from 

1935 through the mid-1980s (see Chart 1).5 By 1946 

the fund had reached $1 billion, and by the early1970s 

it had climbed to about $5 billion. Although losses from 

3

 For 1935 to 1988, the term “fund” refers to the FDIC’s deposit insurance fund; from 1989 to 2005, the term combines the Bank Insurance 

Fund (BIF) and the Savings Association Insurance Fund (SAIF); from 

2006 onward, the term refers to the DIF. (From 1989 to 2005, the 

FDIC managed two deposit insurance funds—the FDIC’s deposit insurance fund, which was renamed the BIF, and the SAIF, which was 

created to insure thrift institutions following the savings and loan 

crisis. The BIF and the SAIF were merged in 2006 to form the DIF.)

4

 Although the FDIC began operations in 1934, it did so under a 

temporary insurance plan that used insured deposits (rather than 

adjusted total domestic deposits) as an assessment base until the 

passage of the Banking Act of 1935. For consistency, all historical data 

presented begin with year-end 1935. 

5

 About 400 mostly small banks failed during the late 1930s and early 

1940s, but very few failed until the 1980s. 

Introduction

In response to the recent financial crisis and passage of 

the Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank), the Federal Deposit Insurance Corporation (FDIC) has developed a comprehensive, long-range management plan for the Deposit 

Insurance Fund (DIF).1 The plan is designed to reduce 

pro-cyclicality; keep assessment rates moderate, steady, 

and predictable throughout economic and credit cycles; 

and maintain a positive fund balance even during a 

period of large fund losses. It achieves these goals by 

setting an appropriate target fund size and a strategy for 

assessment rates and dividends. The plan covers the near 

term, governed by the statutory requirement that the 

fund reserve ratio reach 1.35 percent by 2020; the 

medium term, when the reserve ratio has recovered to 

precrisis levels; and the long term, when the reserve ratio 

is large enough that the fund would be able to withstand 

a period of fund losses similar in magnitude to that of the 

late 1980s and early 1990s or the current crisis.2

This article presents the FDIC analysis that informed 

the medium- and long-term elements of the plan. The 

first section describes historical changes in DIF 

balances, reserve ratios, and assessment rates. The 

second section uses historical fund loss and simulated 

income data from 1950 to the present to determine how 

high the reserve ratio would have had to have been 

before this period’s two banking crises to have maintained both a positive fund balance and stable assessment rates throughout. The analysis demonstrates that 

a moderate, long-term average industry assessment rate, 

combined with an appropriate dividend or assessment 

rate reduction policy, would have prevented the fund 

1

 See Notice of Proposed Rulemaking on Assessment Dividends, 

Assessment Rates and Designated Reserve Ratio, Federal Register 75 

(October 27, 2010), 66272, http://www.fdic.gov/regulations/laws/

federal/2010/10proposeoct27.pdf; and FDIC Restoration Plan, Federal 

Register 75 (October 27, 2010), 66293, http://www.fdic.gov/regulations/

laws/federal/2010/10noticeoct27.pdf. 2

 Ibid. The FDIC proposes to set the designated reserve ratio (DRR) at 

2 percent; maintain current assessment rates until the reserve ratio 

reaches 1.15 percent; and, in lieu of dividends, adopt progressively 

lower assessment rates when the reserve ratio reaches 1.15 percent, 

2 percent, and 2.5 percent. 

Feature Article:

Toward a Long-Term Strategy for 

Deposit Insurance Fund Management
FDIC Quarterly 30 2010, Volume 4, No. 4

failures increased somewhat in the 1970s, the fund had 

grown to almost $10 billion just before the banking 

crisis of the 1980s and early 1990s. The fund balance 

actually rose during the first half of the crisis, peaking at 

slightly more than $18 billion in 1987. Increasing losses 

from hundreds of bank failures finally caused the fund 

balance to decline rapidly, to negative $6.9 billion in 

1991.6 The fund rebounded swiftly, however, and the 

combination of dwindling failures and high assessment 

rates pushed it to a new high of almost $24 billion in 

1994. A one-time special assessment in 1996 further 

bolstered the fund’s resources.7 Extremely low losses 

for the next decade allowed the fund to grow unimpeded, despite relatively low average assessment rates, 

and at year-end 2007—on the eve of the current 

crisis—it had risen to more than $52 billion. The 

current crisis, however, and the resulting large losses 

from 2008 onward, pushed the fund balance to a record 

low of negative $20.9 billion at year-end 2009. As of 

June 30, 2010, the fund had recovered somewhat but 

was still a negative $15.3 billion. 

The reserve ratio, which compares the fund to estimated insured deposits, is both a measure of the FDIC’s 

exposure and of fund adequacy (see Chart 2). The ratio 

stood at just under 2 percent as the nation entered 

World War II. An increase in insured deposits because 

of record savings rates during the war pushed down the 

6

 More than 1,600 FDIC-insured institutions failed between 1980 

and 1994.

7

 In 1996, to capitalize the SAIF, a special assessment mandated by 

the Deposit Insurance Funds Act of 1996 (DIFA) was levied on SAIFinsured deposits. See FDIC, History of the Eighties: Lessons for the 

Future: An Examination of the Banking Crises of the 1980s and Early 

1990s (1997), 132–35.

ratio, as did the increase in the FDIC’s insurance coverage level from $5,000 to $10,000 in 1950. From 1950 to 

1980, the average ratio was 1.33 percent. Growth in 

insured deposits, particularly after 1966 (resulting partly 

from a series of increases in the coverage level from 

$10,000 to $100,000), contributed to a gradual decrease 

in the ratio, which by 1980 had dropped to 1.16 

percent.8 As losses from failures mounted, the reserve 

ratio dipped below zero, reaching negative 0.25 percent 

in 1991. Starting in 1989 and continuing through 2005, 

the governing statute mandated a hard-target designated reserve ratio (DRR) of 1.25 percent as a measure 

of fund adequacy.9 The reserve ratio reached this level 

by 1996 following rapid recovery in the fund balance 

during the 1990s. During the next decade, the reserve 

ratio declined gradually because fund income was 

limited by the assessment rate policy mandated by the 

Deposit Insurance Funds Act of 1996 (DIFA) (see 

discussion below). The reserve ratio fell to 1.22 percent 

in 2007. The heavy losses associated with the current 

crisis pushed the ratio to an all-time low of negative 

0.39 percent in 2009. These historical shifts in the 

fund’s condition reflect changes in FDIC income and 

expenses. Two of the most important policies affecting 

8

 Congress increased the deposit insurance coverage level five times 

from 1950 to 1980: to $10,000 in 1950, to $15,000 in 1966, to 

$20,000 in 1969, to $40,000 in 1974, and to $100,000 in 1980.

9

 The hard target was statutorily imposed by the Financial Institutions 

Reform, Recovery, and Enforcement Act of 1989 (FIRREA). See FDIC, 

History of the Eighties, 101. Under FIRREA the FDIC could, if circumstances warranted, set the DRR as high as 1.5 percent, but this provision was removed by the FDIC Assessment Rate Act of 1990. In 2006, 

after the passage of the Deposit Insurance Reform Act of 2005 (DIRA), 

the fund no longer had a hard-target DRR, but instead the DRR was 

allowed to range from 1.15 percent to 1.50 percent. The recent 

passage of Dodd-Frank established a minimum DRR of 1.35 percent.

Chart 1

The Fund Balance Has Been Negative Twice since 1991

Deposit Insurance Fund

Billions of Dollars

-30

-20

-10

0

10

20

30

40

50

60

1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Source: FDIC, data through June 30, 2010.

Note: Shaded areas denote periods of crisis and associated high assessment rates.

Chart 2

The Reserve Ratio Peaked at the Same Level

before Both Crises 

Deposit Insurance Fund as a Percentage of Estimated Insured Deposits

Source: FDIC, data through June 30, 2010.

Note: Shaded areas denote periods of crisis and associated high assessment rates.

1.24% 1.22%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
FDIC Quarterly 31 2010, Volume 4, No. 4

Fund Management

income were those on assessment rates and those on 

assessment credits and dividends. 

Both the assessment rate charged and whether (and 

how much) assessment income is refunded or credited 

to insured institutions have affected the FDIC’s fund 

management significantly. From 1935 until 1950, the 

FDIC by law charged a flat assessment rate of 8.33 basis 

points against an assessment base of total adjusted 

domestic deposits—in other words, insured institutions 

paid 8.33 cents for every $100 of deposits they held 

(see Chart 3).10

The banking industry began calling for decreases in this 

rate almost immediately, and such calls became more 

frequent as the fund balance increased and failures 

declined. In 1936, banks reportedly sought assessment 

rate cuts because the FDIC appeared to be accumulating reserves too quickly. In 1940, a prominent banker 

proposed lowering the rate to 6.25 basis points, saying 

that the fund was large enough (at year-end 1940, it 

stood at $496 million) to deal with demands “even of 

crisis proportions.” By 1946, the New Jersey Bankers 

Association called for assessments to be ended altogether so long as the fund exceeded $1 billion. The 

FDIC resisted any decrease, first by citing the uncertainty of the industry’s post-Depression condition, then 

by emphasizing the dangers of converting to a postwar 

economy, and finally by arguing that such change could 

be contemplated only after the FDIC succeeded in 

repaying its initial capital (approximately $289 million) 

and achieved a fund balance of $1 billion.11

With this last condition met, Congress and the FDIC 

agreed to an adjustment in rates. However, the FDIC 

recommended against a permanent change because it 

had neither faced a serious economic downturn nor 

determined an exact level of fund adequacy.12 Therefore, the Federal Deposit Insurance Act of 1950 (FDI 

Act) instead provided a 60 percent credit to insured 

institutions after FDIC expenses when assessment 

10 The initial rate was based on the FDIC’s analysis of losses in 

suspended commercial banks from 1865 to 1934. See FDIC, Annual 

Report of the Federal Deposit Insurance Corporation for the Year 

Ending December 31, 1934 (1935), 73–113. 11 See “Capital Expects Banks to Demand FDIC Rate Cut,” Wall Street 

Journal, August 4, 1936; “Banker Proposes FDIC Cut Its Rate,” New 

York Times, May 23, 1940; and “Bankers Ask End to FDIC Charges,” 

New York Times, May 12, 1946. The fund first reached $1 billion in 

1946, and the FDIC repaid its initial capital by 1948. The FDIC also 

paid the interest foregone on the initial capital during 1950 and 1951.

12 FDIC, Annual Report for the Year Ended December 31, 1950 (1951), 5.

income exceeded expenses.13 The effective assessment 

rate was then approximately halved; however, since the 

nominal rate remained unchanged, the credit could 

decrease if FDIC expenses rose. This policy was inherently pro-cyclical; it resulted in the FDIC’s collecting 

lower assessments when failure levels were low and 

higher assessments when failures increased. Congress 

slightly increased the assessment credit to 66.66 percent 

in 1960, but lowered it to 60 percent in 1980 when the 

credit was linked to the reserve ratio.14 As losses from 

failures mounted during the early 1980s, credits grew 

gradually smaller until they ceased altogether in 1985, 

and the effective assessment rate returned to approximately 8.33 basis points.15

13 Expenses included operating costs, additions to loss reserves, and 

insurance losses sustained plus losses from preceding years in excess 

of reserves.

14 For the change in 1960, see Public Law No. 86–171. Provisions of 

this statute simplified the assessment process but resulted in many 

banks paying somewhat higher assessments. The FDIC therefore 

supported the small increase in the credit. Under the provisions of the 

Depository Institutions Deregulation and Monetary Control Act of 

1980, if the reserve ratio was less than 1.10 percent the FDIC had to 

decrease the assessment credit to an amount that would restore the 

reserve ratio to at least 1.10 percent (although in so doing, the FDIC 

could not retain more than 50 percent of net assessment income). If 

the reserve ratio exceeded 1.25 percent, the FDIC could increase the 

assessment credit, but only in such a way that the reserve ratio 

remained at least 1.25 percent. If the reserve ratio exceeded 1.40 

percent, the FDIC had to increase the assessment credit so that the 

reserve ratio did not exceed 1.40 percent. 

15 Although no institution received credits after 1984, statute provided 

for the possibility of credits until 1994. Later statutes changed the 

terminology over time (to “refunds” in 1996 and to “dividends” in 

2005), but the purpose of these provisions was always the return, 

when deemed appropriate, of some portion of assessments paid by 

insured institutions. 

Chart 3

Effective Assessment Rates Have Been

Volatile and Pro-Cyclical Assessment Rates

Basis Points

Source: FDIC, data through June 30, 2010.

Note: Shaded areas denote periods of crisis and associated high assessment rates.

0

5

10

15

20

25

1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
FDIC Quarterly 32 2010, Volume 4, No. 4

In response to the deepening banking crisis in the late 

1980s, assessment rates rose considerably during the 

early 1990s. Both Congress and the FDIC sought to 

replenish the Bank Insurance Fund (BIF) and capitalize 

the Savings Association Insurance Fund (SAIF) 

through a series of rate increases, and by July 1991, the 

nominal assessment rate for each fund was 23 basis 

points.16 Institutions were charged these high rates at 

the height of the crisis, when they could least afford 

them. The swift recovery from the crisis meant that 

elevated rates lasted only through 1996. It was during 

this period of high rates that the risk-related premiums 

mandated by the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) were introduced (in 1993) so that the FDIC could appropriately 

price for risk-taking.17

The Deposit Insurance Funds Act of 1996 (DIFA) 

included a one-time special assessment on SAIF-assessable deposits to fully capitalize the SAIF and expanded 

the Financing Company’s (FICO) assessment authority 

16 In 1989, FIRREA set BIF rates at 12 basis points for 1990 and 15 

basis points for 1991 and thereafter. SAIF rates were set at 20.8 basis 

points for 1990; 23 basis points for 1991 through 1993; 18 basis 

points for 1994 through 1997; and 15 basis points for 1998 and thereafter. The FDIC was given the authority to impose higher rates if 

appropriate to restore the fund to the DRR within a reasonable period, 

but rates could not exceed 32.5 basis points or be raised by more than 

7.5 basis points in a year (SAIF rates, however, were fixed through 

1994). See FIRREA, §208. The FDIC Assessment Rate Act of 1990 set 

the BIF rate at 15 basis points (or a higher rate at the FDIC’s discretion—FIRREA’s rate limits were removed) to enable the fund to reach 

the DRR within a reasonable period. However, the new law maintained 

the SAIF rates set by FIRREA through 1997 as minimum rates that 

could be increased at the FDIC’s discretion. See Title 2 of the Omnibus 

Budget Reconciliation Act of 1990, §2002. SAIF rates were therefore 

23 basis points for all of 1991. By statute, BIF rates would have been 

15 basis points in 1991, but the FDIC twice used its statutory authority 

to raise them—first to 19.5 basis points in 1990 (for 1991) and then 

to 23 basis points at midyear 1991 (effective July 1, 1991). See FDIC, 

1990 Annual Report (1991), 17, and 1991 Annual Report (1992), 13. 

In the short term, the FDIC’s reasons for raising rates included 

projected decreases in the reserve ratio and the need to pay interest 

on an anticipated $10 billion in borrowing for working capital from the 

Federal Financing Bank. In the longer term, the increases were seen as 

necessary for the recapitalization of the BIF. See Federal Register 56 

(May 7, 1991), 21064.

17 FDICIA required that the FDIC change the flat-rate assessment 

system to one based on an institution’s risk to the deposit insurance 

fund, taking into account a variety of risk measurements, the likelihood 

of loss to the fund, and the fund’s revenue needs. FDICIA also required 

that the design of the required risk-based premium system incorporate 

average effective assessment rates at least at the level they had been 

at on July 15, 1991 (if the fund either had outstanding borrowings or 

was below the DRR). See FDICIA, §302.

to all FDIC-insured institutions.18 In addition, DIFA 

barred the FDIC from charging well-capitalized, highly 

rated institutions for deposit insurance once the DRR of 

1.25 percent was achieved. This provision, backed by 

segments of the banking industry, led to pro-cyclical 

consequences that lasted a decade.19 Because the banking industry recovered much more quickly than anticipated, more than 90 percent of the industry rapidly fell 

into the well-capitalized, highly rated category and paid 

no deposit insurance assessments at all from 1996 to 

2006. The effective assessment rate therefore 

approached zero for about ten years.20 By giving the 

FDIC authority to require all insured institutions to pay 

at least a minimum assessment, the Deposit Insurance 

Reform Act of 2005 (DIRA) corrected the moral hazard 

inherent to this system. However, the low premium 

income from 1996 to 2006 limited both the fund’s 

growth and its ability to withstand the current crisis, 

just as the credit policy in effect from 1950 to 1984 had 

resulted in the FDIC’s having fewer resources during 

the prior crisis. To meet the costs of the current crisis, 

effective assessment rates had to increase significantly 

beginning in 2008. 

In general, the FDIC has charged the lowest assessment rates during prosperous periods and the highest 

rates during and in the wake of crisis periods. These 

policies affected the degree to which insured institutions were burdened by assessment rates over time 

(see Chart 4). From 1987 to 1992, assessments were 

on average 22 percent of industry net income. During 

2009, assessments (including the one-time special 

assessment) were more than 140 percent of industry 

net income.21

18 The FICO was created by the Competitive Equality Banking Act in 

1987 as a vehicle to recapitalize the FSLIC. The expansion of FICO 

assessments to BIF-insured institutions was contentious during the 

legislative debate. See History of the Eighties, 133–35. 19 For example, the American Bankers Association notes that it 

promoted the provision. See http://www.aba.com/Industry+Issues/

FDIC_RBP.htm (accessed November 15, 2010). See Public Law 

104–208, §2708.

20 The annual industry-wide effective assessment rate in 1996 was 

high because of the imposition of the one-time SAIF special assessment mandated by DIFA; without the special assessment, the effective 

rate was approximately 2.4 basis points. In 2007 and 2008 (particularly in 2007), effective assessment rates were decreased by the effect 

of a one-time assessment credit provided for in DIRA. 

21 In 2009, the FDIC imposed a 5 basis point special assessment on 

each insured depository institution’s assets minus Tier 1 capital as of 

June 30, 2009. 
FDIC Quarterly 33 2010, Volume 4, No. 4

Fund Management

Changes under Dodd-Frank

The additional flexibility provided by Dodd-Frank was 

integral to the FDIC’s comprehensive fund management plan and to the approach taken in the simulated 

fund analysis presented in this article. It is therefore 

helpful to briefly summarize the important changes 

made by the law that affect the FDIC’s ability to 

manage the fund. 

Dodd-Frank raised the minimum DRR, which the 

FDIC must set each year, from 1.15 percent to 1.35 

percent and removed the upper limit on the DRR and 

therefore on the size of the fund.22 It also required that 

the fund reserve ratio reach 1.35 percent by September 

30, 2020, instead of 1.15 percent by the end of 2016.23

The statute also significantly changed dividend policy: 

the FDIC is no longer required to provide dividends 

from the fund when the reserve ratio is between 1.35 

percent and 1.5 percent. Moreover, although the law 

continues the FDIC’s authority to declare dividends 

when the reserve ratio at the end of a calendar year is 

at least 1.5 percent, it grants the FDIC sole discretion 

to suspend or limit the declaration or payment of 

dividends.24

22 See footnote 9.

23 Dodd-Frank requires that the FDIC offset the effect on small institutions (those with less than $10 billion in assets) of the statutory 

requirement that the fund reserve ratio increase from 1.15 percent to 

1.35 percent by September 30, 2020. This will entail imposing additional assessments on large institutions (those with at least $10 billion 

in assets). The FDIC plans to determine the mechanism and manner of 

the offset through rulemaking expected to begin in 2011.

24 See Public Law No. 111–203, §§332 and 334.

Analysis of Loss, Income, and Reserve Ratios

The FDIC sought to develop a long-term fund management strategy to reduce pro-cyclicality; keep assessment 

rates moderate, steady, and predictable throughout 

economic and credit cycles; and maintain a positive 

fund balance even during a banking crisis. To explore 

the potential policy options, the FDIC analyzed the 

trade-offs between assessment rates and policies that 

either award dividends or reduce assessment rates by 

creating a simulated deposit insurance fund covering 

the years 1950 to 2010. 

The simulated fund uses FDIC historical data on the 

assessment base (total adjusted domestic deposits) and 

FDIC losses. Fund income is modeled by combining 

assessment base data with an investment portfolio of 

Treasury securities based on FDIC historical experience. 

The simulated fund’s portfolio of securities changes in 

response to the FDIC’s provision for losses, reflecting 

higher and lower anticipated losses over time.25

The analysis varied assessment rates and dividends to 

determine what would have happened to the simulated 

fund’s balance and reserve ratio from 1950 to 2010. 

Below are the results of four of these options in detail. 

Each achieves the goal of maintaining a positive fund 

balance throughout the 60-year period. The first two 

options are on opposite ends of the policy spectrum. 

The first assumes that the FDIC grants no dividends, 

while the second assumes that the FDIC dividends the 

maximum allowable under the law. The third and 

fourth options compare limited dividend and assessment 

rate reduction policies that successfully meet the FDIC’s 

objectives for sound fund management. 

Four Policy Options 

To determine the appropriate level of dividends and 

assessment rates, our analysis first tried to answer a 

straightforward question: What constant average nominal assessment rate during the entire 60-year period 

would have maintained a positive fund balance during 

both crisis periods, assuming a policy that provided no 

dividends? 26 The result is a moderate rate of 7.44 basis 

points, which would have allowed the fund’s reserve ratio 

to reach 2.48 percent (in 1981) before the crisis of the 

1980s and early 1990s, and 2.03 percent (in 2006) before 

the current crisis (see Charts 5 and 6). Failure to reach 

these reserve ratios would have resulted in a negative 

25 See the appendix for a detailed discussion of the methodology and 

assumptions used in the simulations.

26 All assessment rates represent an industry-wide average.

Chart 4

The Burden of Assessments Has Been

Greatest during Crises 

Assessments as a Percentage of Industry Net Income

Source: FDIC, data through June 30, 2010.

Note: Shaded areas denote periods of crisis and associated high assessment rates.

0%

20%

40%

60%

80%

100%

120%

140%

160%

1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
FDIC Quarterly 34 2010, Volume 4, No. 4

balance. Assessment rate volatility was by design 

completely eliminated. This policy is in many ways 

successful, but it eliminates the possibility of dividends 

or rate reductions and potentially allows the fund to 

grow without limit. Although the fund must have sufficient resources to handle a period of large fund losses, 

the fund need not grow larger than necessary to do so.

Moreover, during most years since 1950, federal statutes 

have provided for either a credit or dividend policy 

(although since 1985 no recurring credits or dividends 

have been awarded). Having first examined the consequences of granting no dividends, the analysis sought to 

evaluate the consequences had the full amount of dividends possible under current law been granted from 

1950 to 2010. As amended by Dodd-Frank, the FDI Act 

provides that the FDIC dividend 100 percent of the 

amount in the fund in excess of the amount required to 

maintain the reserve ratio at 1.5 percent, but gives the 

FDIC sole discretion to suspend or limit these dividends. Granting the maximum allowable dividends 

would have resulted in substantial premium volatility 

and pro-cyclical average effective assessment rates 

(see Charts 7 and 8).27 Indeed, granting full dividends 

requires a constant average nominal assessment rate of 

21.96 basis points to maintain a positive fund balance 

during both periods of crisis. Such a rate is historically 

very high and corresponds most closely to the rates 

charged to recapitalize the fund after a crisis. In some 

years, the effective assessment rate would have been 

negative in order to maintain the reserve ratio at 

1.5 percent.

27 Average effective assessment rates are calculated by subtracting 

dividends paid from assessments received.

Chart 5

Zero Dividends Allows the Reserve Ratio to

Reach Adequate Levels

Fund Balance as a Percentage of Estimated Insured Deposits

Source: FDIC, data through June 30, 2010.

Note: No dividends, with 7.44 basis point average nominal assessment rate. 

Shaded areas denote periods of crisis and associated high assessment rates.

2.03%

2.48%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Simulated

Actual

Chart 7

Maximum Dividends Cap Fund Size

Fund Balance as a Percentage of Estimated Insured Deposits

Source: FDIC, data through June 30, 2010.

Note: Dividends equal to 100 percent of the amount in the fund in excess of the amount

required to maintain the reserve ratio at 1.5 percent, with 21.96 basis point average nominal 

assessment rate. Shaded areas denote periods of crisis and associated high assessment rates.

Simulated

Actual

1.50% 1.50%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Chart 6

Rates Are Moderate and Steady

(Nominal Rate = 7.44 basis points)

Assessment Rates

Basis Points

Source: FDIC, data through June 30, 2010.

Note: No dividends, with 7.44 basis point average nominal assessment rate. 

Shaded areas denote periods of crisis and associated high assessment rates.

Simulated

Actual

0

5

10

15

20

25

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Chart 8

Rates Are High, Volatile, and Pro-Cyclical

(Nominal Rate = 21.96 basis points)

Assessment Rates

Basis Points

Source: FDIC, data through June 30, 2010.

Note: Dividends equal to 100 percent of the amount in the fund in excess of the amount 

required to maintain the reserve ratio at 1.5 percent, with 21.96 basis point average nominal 

assessment rate. Shaded areas denote periods of crisis and associated high assessment rates.

Simulated

Actual

-10

-5

0

5

10

15

20

25

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
FDIC Quarterly 35 2010, Volume 4, No. 4

Fund Management

Given the limitations of awarding either no dividends 

or the maximum allowable dividends, the analysis 

examined a third and fourth option. Option three 

limited dividends, while option four reduced assessment 

rates in lieu of dividends; both were consistent with the 

broad set of goals for fund management. The analysis 

showed that these options would achieve the FDIC’s 

goals of maintaining both a positive fund balance and 

moderate, steady assessment rates throughout economic 

and credit cycles. 

The third option awards dividends as a percentage of 

the amount in the fund in excess of the amount 

required to maintain the reserve ratio at a specified 

level. The analysis has already shown that granting 

maximum allowable dividends would have required 

a high constant average nominal assessment rate. 

However, granting limited dividends when the reserve 

ratio reaches 2 percent and somewhat greater dividends 

if the reserve ratio reaches 2.5 percent permits a significantly lower constant average nominal assessment rate 

from 1950 to 2010 to keep the fund balance positive.28

Increasing dividends when the reserve ratio exceeds 

2.5 percent would prevent the fund from growing 

larger than necessary to remain positive during periods 

of high losses.

This option results in a moderate constant nominal 

assessment rate of 8.45 basis points across the entire 

60-year period (see Charts 9 and 10). The reserve ratios 

necessary to maintain a positive fund balance are 2.24 

percent before the crisis of the 1980s and early 1990s, 

and 1.98 percent before the current crisis. These ratios 

are, of course, significantly higher than the level of the 

DRR historically but should be sufficient to withstand a 

future period of large fund losses similar to those the 

FDIC has experienced during the past 30 years. Procyclicality is limited, but this option generates moderate 

premium volatility.

The last option achieves the FDIC’s fund management 

goals of maintaining both a positive fund balance and 

28 Specifically, under this option, dividends would be equal to 25 

percent of the amount in the fund in excess of the amount required to 

maintain the reserve ratio at 2 percent and 50 percent of the amount in 

the fund in excess of the amount required to maintain the reserve ratio 

at 2.5 percent. The nearer a dividend comes to 100 percent of an institution’s assessment, however, the more it introduces moral hazard 

and reduces or eliminates the FDIC’s ability to control and price for 

risk-taking. To avoid the possibility that an insured institution could 

receive a dividend that approaches 100 percent of its assessment, this 

option limits dividends such that no institution can receive a dividend 

greater than 50 percent of its annual assessment.

moderate, steady assessment rates throughout economic 

and credit cycles by reducing the average assessment 

rates in lieu of dividends.29 Rates are reduced by 25 

percent when the reserve ratio reaches 2 percent and by 

50 percent when the reserve ratio reaches 2.5 percent. 

Again, an increased rate reduction would prevent the 

fund from growing larger than necessary to remain positive during periods of high losses.

This option results in a moderate constant nominal 

assessment rate of 8.47 basis points during the entire 

60-year period (except when reduced as a result of the 

29 This method is not without precedent. Under FDICIA (§302(e)(3)), 

the use of assessment credits was eliminated in 1994 and replaced 

with assessment rate reductions. As the fund reserve ratio was under 

the DRR, no rate reductions took place before DIFA replaced rate 

reductions with refunds in 1996.

Chart 9

Limiting Dividends Allows the Reserve Ratio

to Reach Adequate Levels

Fund Balance as a Percentage of Estimated Insured Deposits

Source: FDIC, data through June 30, 2010.

Note: Dividends equal to 25 percent of the amount in the fund in excess of the amount 

required to maintain the reserve ratio at 2.0 percent or 50 percent of the amount in the 

fund in excess of the amount required to maintain the reserve ratio at 2.5 percent, with 

8.45 basis point average nominal assessment rate. Shaded areas denote periods of crisis 

and associated high assessment rates.

Simulated

Actual

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

2.24% 1.98%

Chart 10

Rates Are Moderate and Fairly Steady 

(Nominal Rate = 8.45 basis points)

Assessment Rates

Basis Points

Source: FDIC, data through June 30, 2010.

Note: Dividends equal to 25 percent of the amount in the fund in excess of the amount 

required to maintain the reserve ratio at 2.0 percent or 50 percent of the amount in the 

fund in excess of the amount required to maintain the reserve ratio at 2.5 percent, with 

8.45 basis point average nominal assessment rate. Shaded areas denote periods of crisis 

and associated high assessment rates. 

Simulated

Actual

0

5

10

15

20

25

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
FDIC Quarterly 36 2010, Volume 4, No. 4

fund exceeding the 2 percent threshold), almost identical to the rate required under the third option, which 

limited dividends (see Charts 11 and 12). The reserve 

ratios necessary to maintain a positive fund balance are 

2.31 percent before the crisis of the 1980s and early 

1990s, and 2.01 percent before the current crisis—

similar to the ratios required under the third option. 

Premium volatility and pro-cyclicality are both successfully minimized, but premium volatility is significantly 

lower than under the third option.30 Interestingly, both 

the third and fourth options generate nominal assess30 Additional comparative examples of simulations using varying levels 

of assessment rate reduction and reserve ratios at which rates are first 

reduced are presented in the appendix.

ment rates almost identical to the rate the FDIC 

supported in 1935.31

Since 1935, the assessment base calculation has been 

derived from total domestic deposits. Dodd-Frank, 

however, has significantly altered this calculation to 

one derived from average consolidated total assets 

minus average tangible equity. For purposes of comparison, the analysis for the fourth option was repeated, but 

with the assumption that the new assessment base had 

been in place from 1950 to 2010. This analysis allows 

for an approximation of the long-term moderate rate 

required using the new assessment base.32

This simulation results in peak reserve ratios similar to 

those using the current base (see Chart 13). The simulated fund successfully limits both rate volatility and 

pro-cyclicality. The one significant change—due to the 

alteration in the composition of the assessment base—

is that the constant nominal assessment rate required to 

maintain a positive fund balance from 1950 to 2010 

drops from 8.47 to 5.29 basis points (see Chart 14). The 

rate is lower because for much of the period the assessment base calculated using the new definition is significantly larger than under the old definition.

A final concern is whether the fund will recover 

quickly enough after a period of high fund losses. This is 

of particular importance given the current statutory 

requirement that once the fund drops below a reserve 

ratio of 1.35 percent (or is expected to), the FDIC must 

adopt a restoration plan that provides that the reserve 

ratio will return to 1.35 percent within eight years 

(although the period can be extended under extraordinary circumstances). The speed with which the reserve 

ratio returns to 1.35 percent can be explored by looking 

at the behavior of the simulated fund using the fourth 

option during and after the high losses of the 1980s and 

31 In 1935, FDIC officials believed that the 8.33 basis point rate would 

likely be insufficient to build up the deposit insurance fund but 

endorsed it (and indeed the 8.33 basis point rate was a legislative 

compromise—the House bill included a higher rate) because it would 

allow banks to build up capital. See Banking Act of 1935: Hearings 

on H.R. 5357, February 21, Before the House Committee on Banking 

and Currency, 74th Cong., 48 (1935) (statement of Leo T. Crowley, 

Chairman of the Federal Deposit Insurance Corporation).

32 The Dodd-Frank Act provides that the assessment base be changed 

to average total consolidated assets minus average tangible equity. 

See Public Law No. 111–203, §331. For this simulation, from 1990 to 

2010, the assessment base equals year-end total industry assets 

minus Tier 1 capital. For earlier years (before the Tier 1 capital 

measure existed) it equals year-end total industry assets minus 

total equity. 

Chart 11

Rate Reductions Also Allow the Reserve Ratio to

Reach Adequate Levels 

Fund Balance as a Percentage of Estimated Insured Deposits

Source: FDIC, data through June 30, 2010.

Note: Effective assessment rate reduced by 25 percent when reserve ratio reaches 2 percent

and 50 percent when reserve ratio reaches 2.5 percent, with 8.47 basis point average nominal 

assessment rate. Shaded areas denote periods of crisis and associated high assessment rates.

Simulated

Actual

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

2.31% 2.01%

Chart 12

Rates Are Moderate and Steady

(Nominal Rate = 8.47 basis points)

Assessment Rates

Basis Points

Source: FDIC, data through June 30, 2010.

Note: Effective assessment rate reduced by 25 percent when reserve ratio reaches 2 percent

and 50 percent when reserve ratio reaches 2.5 percent, with 8.47 basis point average nominal 

assessment rate. Shaded areas denote periods of crisis and associated high assessment rates.

Simulated

Actual

0

5

10

15

20

25

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
FDIC Quarterly 37 2010, Volume 4, No. 4

Fund Management

early 1990s. The simulation that charges 8.47 basis 

points (using an assessment base of adjusted total 

domestic deposits) first drops below a reserve ratio of 

1.35 percent in 1989 and recovers to that level in eight 

years (in 1997). The simulation that charges 5.29 basis 

points (using an estimated assessment base of total 

assets minus tangible equity) also first drops below 1.35 

percent in 1989, but takes one additional year to return 

to that level (in 1998). Both versions of the simulation 

demonstrate that the constant nominal rate charged 

would fit the statutory requirements for the restoration 

of the fund from a period of losses similar to that during 

the 1980s and early 1990s. 

Conclusion

The simulated fund analysis has clear implications. 

Historically, a reserve ratio of more than 2 percent 

would have been necessary for the fund to withstand 

crisis periods while maintaining a positive balance. 

Limiting the simulated fund’s growth, either by capping 

the reserve ratio at levels previously thought to be 

appropriate or by granting dividends or rate reductions 

at those levels, led to high nominal assessment rates 

that were both highly pro-cyclical and volatile. 

However, either suspending dividends until the reserve 

ratio reaches 2 percent and then awarding only limited 

dividends or, in lieu of dividends, lowering assessment 

rates when the reserve ratio reaches 2 percent, allows 

the fund to reach a level sufficient to withstand crises of 

the magnitude already experienced with rates that are 

significantly less pro-cyclical. A policy that lowers rates 

in lieu of dividends results in rates that are less volatile. 

Authors: Lee K. Davison, Historian

Division of Insurance and Research

Ashley M. Carreon, Economic Research Assistant

Division of Insurance and Research 

The authors wish to thank Diane Ellis, Paul Kupiec, Marc 

Steckel, Jack Reidhill, Munsell St. Clair, Christine Blair, 

David Lee, and Ahmad Sarsour, all from the FDIC’s 

Division of Insurance and Research, for their advice and 

assistance in developing the simulation analysis and for their 

helpful comments on this article. 

Chart 13

Using the New Assessment Base Results in

Similar Reserve Ratios

Fund Balance as a Percentage of Estimated Insured Deposits

Source: FDIC, data through June 30, 2010.

Note: Effective assessment rate reduced by 25 percent when reserve ratio reaches 2 percent

and 50 percent when reserve ratio reaches 2.5 percent, with 5.29 basis point average nominal 

assessment rate using new assessment base. Shaded areas denote periods of crisis and 

associated high assessment rates.

2.27% 1.95%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Simulated

Actual

Chart 14

Rates Remain Steady Using the New Assessment Base

Assessment Rates

Basis Points

Source: FDIC, data through June 30, 2010.

Note: Effective assessment rate reduced by 25 percent when reserve ratio reaches 2 percent 

and 50 percent when reserve ratio reaches 2.5 percent, with 5.29 basis point average nominal 

assessment rate using new assessment base. Shaded areas denote periods of crisis and 

associated high assessment rates.

Simulated

Actual

0

5

10

15

20

25

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
FDIC Quarterly 38 2010, Volume 4, No. 4

Appendix

This appendix provides supplementary details on the 

method used to generate fund simulations in the FDIC’s 

analysis. It also presents additional comparative examples of simulations using a variety of assessment rate 

policies that combine different constant nominal assessment rates with different levels of assessment rate 

reduction awarded at different reserve ratio thresholds. 

Methodology and Assumptions

Data

Except as specifically noted in the text, the simulated 

fund’s assessment base and fund expenses are actual 

FDIC historical data.33 For the years 1950 to 1988, data 

are from the FDIC insurance fund; from 1989 to 2005, 

data combine the BIF and the SAIF; from 2006 onward, 

DIF data are used. FDIC historical data are altered in 

only one respect: because all depositors in failed banks 

during the current crisis were covered up to $250,000, 

the FDIC deposit insurance coverage level for 2007 is 

assumed to be $250,000 even though the coverage limit 

in effect at the time was $100,000. (The Dodd-Frank 

Act extended the $250,000 coverage limit retroactively 

to depositors in any insured depository institutions for 

which the FDIC was appointed receiver or conservator 

on or after January 1, 2008.) Historical interest rate 

data are from the Board of Governors of the Federal 

Reserve System. 

Treatment of Historical Assessment Credits, 

Special Assessments, and FSLIC/RTC Costs

The simulated fund implements neither the assessment 

credit policies in effect from 1950 to 1984 nor the onetime assessment credit provided under DIRA. In addition, the simulated fund’s income includes neither the 

one-time special assessment to recapitalize the SAIF in 

1996 nor the one-time special assessment imposed in 

2009. The simulated fund does not include as expenses 

the costs of the savings and loan crisis, which were 

borne by the Federal Savings and Loan Corporation 

(FSLIC) and Resolution Trust Corporation (RTC) for 

savings and loan failures during the 1980s and early 

1990s. The inclusion of these costs would require a 

much higher reserve ratio to keep the fund balance 

positive during the late 1980s and early 1990s.

33 The assessment base used in this analysis is adjusted total domestic 

deposits. The Dodd-Frank Act provides that the assessment base be 

changed to average total consolidated assets minus average tangible 

equity.

Investment Strategy

No consistent historical data are available describing 

the FDIC’s investment portfolio over time. Moreover, 

as a simulated fund diverges from the actual fund, the 

FDIC’s actual investment choices become increasingly 

irrelevant to the simulated fund’s likely choices. After 

reviewing available FDIC data, the method chosen for 

the analysis was a modeled investment portfolio with 

the following investment strategy and set of rules for 

the simulated fund. The fund assumes a “default” portfolio mix of Treasury securities to be maintained under 

most conditions: 35 percent in six-month securities; 25 

percent in one-year securities; 25 percent in three-year 

securities; and 15 percent in five-year securities. This 

portfolio mix remains fixed unless the FDIC’s provision 

for losses increases for two consecutive years. In that 

event, all income (proceeds from maturing securities, as 

well as net assessment and interest income) is invested 

in six-month Treasury securities. The simulated fund 

therefore has an increasingly shorter-term bias as anticipated losses from failures rise. When the fund’s income 

exceeds expenses for two years, the fund’s investments 

return to the 35-25-25-15 mix. 

Assessment Rate, Dividend, and 

Reserve Ratio Variables 

Constant nominal industry average assessment rates in 

the analysis range from 7.44 to 25.88 basis points. The 

analysis examines two sets of options: percentage reductions in assessment rates and dividends as a percentage 

of the amount in the fund over a specified reserve ratio. 

Rate reductions and dividend amounts range from zero 

to 100 percent. Reserve ratios at which assessment 

reductions or dividends are first awarded range from 

1.5 percent to 2.5 percent. 

Additional Comparative Examples 

This section provides further detail and examples of the 

trade-offs the FDIC examined in seeking an appropriate 

long-term fund management policy that takes into 

account the goals of maintaining both a positive fund 

balance and moderate, steady assessment rates throughout economic and credit cycles.34 The examples below 

34 Specifically, the analysis sought to implement an assessment rate 

policy (a constant nominal rate in combination with assessment rate 

reductions) that would result in the fund falling to zero in 2009 (the 

fund’s trough during the current crisis). Using assessment rates 

greater than those identified would cause the simulated fund to grow 

higher during periods of benign economic conditions and give the 

fund a capital buffer above zero in 2009.
FDIC Quarterly 39 2010, Volume 4, No. 4

Fund Management

vary assessment rate reductions and the reserve ratio at 

which reductions are first awarded.

Maintaining Relatively Low Assessment Rates

Table A.1 shows the constant nominal assessment rates 

that need to be applied to keep the fund from becoming 

negative during both crises using various levels of assessment rate reduction and reserve ratios at which rates 

are first reduced. 

In general, policies with low reserve ratios at which 

assessment rate reductions are first awarded and high 

rate reductions require relatively high nominal assessment rates, and so fail to keep assessment rates relatively low and steady. Policy options with high reserve 

ratios at which assessment rate reductions are awarded 

and low rate reductions require the lowest nominal 

assessment rates. 

Reducing Pro-cyclical Assessments

In its analysis, the FDIC sought policies that reduced 

pro-cyclical assessments, which are lower during prosperous times but higher when both insured institutions 

and the fund are stressed by significant losses. Table A.2 

compares average effective assessment rates during crisis 

years with average effective assessment rates during 

noncrisis years as a measure of how pro-cyclical effective assessment rates are throughout time.35

Again, policies that reduce rates at lower reserve ratios 

and by higher amounts are less desirable and produce 

greater pro-cyclicality. As a point of reference, the 

average assessment rates of the actual fund (which has 

historically had to implement pro-cyclical assessment 

policies during times of crisis to cover losses and rebuild 

the fund) more than quadrupled during crisis periods. 

An appropriate assessment reduction policy should seek 

relatively small changes in effective assessment rates 

across both crisis and noncrisis periods.

35 Crisis years are defined as 1981 to 1996 (although in terms of bank 

failures this crisis ended by 1994, the industry had to pay high premiums for an additional two years in order to recapitalize the fund) and 

2008 to 2010, while all other years in the sample are noncrisis years: 

1950 to 1980 and 1997 to 2007.

Table A.1

Nominal Assessment Rates Needed to 

Maintain Positive Fund Balance

Percentage 

Reduction 

in Rates

Reserve Ratio at Which Rates 

Are First Reduced

1.50 1.75 2.00 2.25 2.50

100 25.88 14.94 9.23 8.03 7.53 

75 17.84 14.15 8.90 7.98 7.49 

50 12.32 11.70 8.73 7.99 7.46 

25 9.22 9.04 8.47 7.75 7.43 

10 8.03 7.97 7.78 7.54 7.41 

Source: FDIC.

Table A.2

Assessment Rate Multiplier from 

Noncrisis to Crisis Years

Percentage 

Reduction 

in Rates

Reserve Ratio at Which Rates 

Are First Reduced

1.50 1.75 2.00 2.25 2.50

100 4.9 2.4 1.2 1.0 0.9

75 2.6 2.1 1.1 1.0 1.0

50 1.4 1.3 1.1 1.0 1.0

25 1.1 1.1 1.0 0.9 1.0

10 1.0 1.0 1.0 1.0 1.0

Source: FDIC.

FDIC Quarterly 41 2010, Volume 4, No. 4

The decrease in the number of offices comes at a time 

when bank failures and problem banks are at their 

highest levels since the banking crisis of the 1980s and 

early 1990s. The number of FDIC-insured institutions 

declined by 365 during the year ending June 30, 2010, 

compared with a decline of 256 the prior year. Failures 

and mergers each accounted for roughly half of the 

decrease. 

Branch network contraction may also reflect the industry’s continued efforts to reduce expenses in light of the 

recent recession and protracted recovery. From first 

quarter 2002 through fourth quarter 2007—roughly the 

period of the previous expansion—the average noninterest expense to average asset ratio was 3.12 percent, 

compared with 2.95 percent during the recent recessionary period from first quarter 2008 through second 

quarter 2009. Since then, the average noninterest 

expense to average asset ratio has trended slightly 

lower, to 2.91 percent, indicating that banks and thrifts 

continue to monitor overhead costs closely. The effects 

of office contraction and industry cost reduction efforts 

have particularly affected staffing. The number of 

employees at FDIC-insured institutions declined 8.1 

percent to 2 million between first quarter 2008 and 

June 30, 2010. 

Each year as of June 30, the Federal Deposit Insurance 

Corporation (FDIC) and the Office of Thrift Supervision (OTS) survey each FDIC-insured institution to 

collect information on bank and thrift deposits and 

operating branches and offices. The resulting Summary 

of Deposits (SOD) is a valuable resource for analyzing 

deposit and office trends as well as domestic deposit 

market share. 

SOD data were publicly released on October 7, 2010, 

and are available through the FDIC’s Web site at 

http://www2.fdic.gov/sod/index.asp. Available SOD 

data include information on the deposits and branching 

activities of individual FDIC-insured institutions, 

market share information, and various summary charts 

and tables. This article highlights findings from the 

2010 SOD, focusing on national trends in domestic 

deposits and banking offices, and presents some information by state, metropolitan area, and institution.1

The Number of Offices Declined and 

Deposit Growth Slowed 

The number of FDIC-insured institution offices fell by 

1.0 percent to 97,950 during the year ending June 30, 

2010, a net decrease of 993 offices and the first decline 

since 1995.2 Meanwhile, commercial banks and thrifts 

reported weak deposit growth during the year. The 

volume of deposits at FDIC-insured institutions 

increased only 1.7 percent, the lowest growth rate in 

15 years and well below the 7.7 percent rate reported a 

year ago (see Chart 1).3

1

 This analysis reflects updates in SOD data as of October 7, 2010. 

All FDIC-insured institutions that operate branch offices beyond their 

home office and that are required to file a financial report with one of 

the Federal Financial Institutions Examination Council agencies must 

submit responses to SOD surveys to the FDIC or the OTS. Automated 

teller machines are not considered offices for the purposes of the 

survey. Call Report information on unit banks (banks with a single 

headquarters office) has been combined with branch office data to 

form the SOD database. 

2

 SOD data prior to 1994 are not available electronically and therefore 

are not shown in this article. 

3

 Offices include those in the 50 states and the District of Columbia but 

not those in U.S. territories. The SOD data include domestic deposits 

only, referred to in this report as “deposits.” 

Feature Article:

Highlights from the 2010 Summary of Deposits

Chart 1

Number of Offices Domestic Deposits (Trillions of Dollars)

Source: FDIC Summary of Deposits and OTS Branch Office Survey.

The Number of FDIC-Insured Institution Offices Decreased,

while Deposit Growth Slowed

1994 1998 2002 2006 2010

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Number of Offices

Domestic Deposits

60,000

65,000

70,000

75,000

80,000

85,000

90,000

95,000

100,000

105,000

110,000
FDIC Quarterly 42 2010, Volume 4, No. 4

Given the contraction in the number of offices, the ratio 

of offices per million people decreased 1.8 percent from 

2009 to 2010, the second consecutive decrease in this 

ratio (see Chart 2). The number of offices per million 

people as of June 30, 2010—317—almost equaled the 

June 30, 2006, level of 316. The decrease in the number 

of bank and thrift offices boosted the amount of domestic deposits per office this year, although the rate of 

growth was below that of prior years, given overall lower 

deposit growth. Domestic deposits per office increased 

2.7 percent in 2010, less than half the 7.3 percent 

reported in 2009 and also below the five-year compound 

annual growth rate (CAGR) of 3.9 percent.4

4

 The CAGR is the nth root of the percentage change, where n is the 

number of years in the period.

Small Cities and Towns Reported the Fastest 

Deposit Growth 

Deposits and offices continue to be concentrated in 

metropolitan areas. As of June 30, 2010, about 77 

percent of offices and 89 percent of domestic deposits 

were located in metropolitan areas, a level unchanged 

from 2009 (see Table 1).5 However, this is the first 

year since 1995 that the number of offices in metropolitan areas decreased and the number of offices 

decreased simultaneously in all three community size 

categories: metropolitan, micropolitan, and “other” 

areas.6

Micropolitan areas—smaller cities and towns—had 

both the highest deposit growth rate and the lowest 

percentage of office contraction during the year. Office 

contraction rates for metropolitan areas and “other” 

less populated areas were both less than 1.0 percent; 

however, metropolitan areas had a higher rate of 

deposit growth. Metropolitan areas had higher five-year 

CAGRs for both deposit and office growth than either 

micropolitan or “other” areas.

“Other” Office Types Grew Fastest during the 

Past Year

Traditional brick-and-mortar offices make up 90 

percent of all commercial banking offices; however, 

the SOD surveys all banking offices, including retail 

(e.g., offices in supermarkets or other stores), drive5

 Metropolitan statistical areas have urban clusters of greater than 

50,000 inhabitants. 

6

 Micropolitan statistical areas have urban clusters of between 10,000 

and 50,000 inhabitants. “Other” areas have populations of 10,000 or 

fewer inhabitants.

Chart 2

Offices Per Million People

Domestic Deposits Per Office

(Millions of Dollars)

Sources: FDIC Summary of Deposits and OTS Branch Office Survey. 

Population data from the U.S. Census Bureau (Haver Analytics).

Bank Offices Per Million People Have Declined,

and Deposits Per Office Have Climbed 

250

260

270

280

290

300

310

320

330

1994 1998 2002 2006 2010

0

10

20

30

40

50

60

70

80

90

100

Offices per million people

Domestic deposits per office

Table 1

Micropolitan Areas Reported the Highest One-Year Deposit Growth Rate

Metropolitan Areas Micropolitan Areas Other Areas 

Number 

of Offices

Domestic 

Deposits 

($ billions)

Number 

of Offices

Domestic 

Deposits 

($ billions)

Number 

of Offices

Domestic 

Deposits 

($ billions)

June 2005 69,157 5,178 11,792 431 9,730 267

June 2009 75,950 6,681 12,160 493 9,831 318

June 2010 75,349 6,793 12,147 507 9,746 321

1-Year Growth Rate -0.8% 1.7% -0.1% 2.7% -0.9% 1.0%

5-Year Compound Growth Rate 1.7% 5.6% 0.6% 3.3% 0.0% 3.7%

Source: FDIC Summary of Deposits and OTS Branch Office Survey. 

Notes: Deposit-taking offices only. Metropolitan statistical areas have urban clusters of greater than 50,000 or more inhabitants. Each micropolitan statistical area has an urban cluster of 

between 10,000 and 50,000 inhabitants. Other areas have less population. See U.S. Census Bureau definitions for greater detail.
FDIC Quarterly 43 2010, Volume 4, No. 4

Summary of Deposits

through offices, and “other” office types. The “other” 

category, which comprises primarily mobile or seasonal 

offices and those that provide back-office support for 

Internet deposit operations, posted the highest growth 

rate during the past year, followed by drive-through 

facilities (see Table 2).7 This is the second consecutive 

year that the “other” office category posted the highest 

growth rate. 

Large Organizations Reported the Strongest 

Deposit Growth 

Large organizations (those with more than $10 billion 

in total deposits) continue to report the largest share of 

banking offices and domestic deposits among insured 

banks and thrifts. Large organizations grew deposits 

during the year ending June 30, 2010 (see Table 3). 

Deposits at midsized organizations (those with between 

7

 Office type information is not provided for OTS-supervised 

institutions.

$1 billion and $10 billion in total deposits) and at small 

organizations (those with less than $1 billion in total 

deposits) decreased. Reflective of overall deposit 

growth, the 2010 deposit growth rate for organizations 

in each of the three size groups was significantly below 

its corresponding five-year CAGR. 

Office growth for organizations in each of the three size 

groups was also below its corresponding five-year 

CAGR during the year. Large organizations posted the 

only increase (2.5 percent) in the number of offices. 

The number of offices operated by both midsized and 

small organizations declined. 

Industry office and deposit growth is affected not only 

by the organic growth of individual institutions and the 

growth achieved through mergers and acquisitions, but 

also by the number of institutions that fail. Small and 

Table 2

Other Banking Offices Increased at the Fastest Rate

Brick and Mortar 

Offices Retail Offices

Drive-Through 

Facilities

Other Office 

Types Total

June 2005 68,769 4,576 2,762 592 76,699

June 2009 78,163 5,337 2,329 655 86,484

June 2010 77,991 5,259 2,480 760 86,490

1-Year Growth Rate -0.2% -1.5% 6.5% 16.0% 0.0%

5-Year Compounded Growth Rate 2.5% 2.8% -2.1% 5.1% 2.4%

Source: FDIC Summary of Deposits and OTS Branch Office Survey.

Note: Deposit-taking offices of commercial banks only.

Table 3

Large Organizations Reported Deposit and Office Growth

Large Organizations Midsized Organizations Small Organizations

Number of 

Institutions

Number of 

Offices

Domestic 

Deposits 

($ billions)

Number of 

Institutions

Number of 

Offices

Domestic 

Deposits 

($ billions)

Number of 

Institutions

Number of 

Offices

Domestic 

Deposits 

($ billions)

June 2005 68 39,019 3,552 376 17,011 1,071 8,382 34,636 1,247

June 2009 69 44,773 4,864 462 19,678 1,274 7,628 33,480 1,347

June 2010 69 45,890 5,075 447 18,982 1,203 7,283 32,360 1,329

1-Year Growth Rate 0.0% 2.5% 4.3% -3.2% -3.5% -5.6% -4.5% -3.3% -1.4%

5-Year Compounded 

Growth Rate 0.3% 3.3% 7.4% 3.5% 2.2% 2.4% -2.8% -1.4% 1.3%

Source: FDIC Summary of Deposits and OTS Branch Office Survey.

Notes: Deposit-taking offices only. Small organizations are those with consolidated deposits less than $1 billion. Midsized organizations are those with consolidated deposits of $1 billion to 

$10 billion. Large organizations are those with consolidated deposits greater than $10 billion.
FDIC Quarterly 44 2010, Volume 4, No. 4

midsized institutions have been more likely to fail or 

be acquired, depressing growth for these size categories 

while boosting growth rates for large institutions, which 

are more likely to be net acquirers of failed and merged 

institutions. For example, of the 184 institutions that 

were acquired through merger transactions in the year 

ending June 30, 2010, 165 were small organizations 

and 13 were midsized. Of the 181 institutions that 

failed last year, 145 were small organizations and 34 

were midsized. 

The Number of Banking Organizations with 

Operations in Multiple States Increased 

Although no banking organization, even the largest or 

most geographically diverse, operates in all 50 states 

and the District of Columbia, the number that operate 

in at least 15 states increased from 14 to 15 during the 

year (see Table 4). As of June 30, 2010, only one banking organization—Bank of America Corporation—

reported holding more than 10 percent of aggregate 

domestic deposits. As banking organizations grow 

larger, they may encounter nationwide deposit concentration limits.8

States with the Highest Population Growth Rates 

Generally Reported Higher Office Growth Rates 

Studies have shown that office growth is related to 

demographic factors such as population, employment, 

and per capita income growth.9 In general, states with a 

faster growing population have experienced greater 

8

 Concentration limits are set forth in the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, as codified by the FDIC in 

Section 44 of the Federal Deposit Insurance Act. The Act states in part 

that bank regulatory agencies cannot approve an interstate merger 

transaction if the resulting bank (including all insured depository institutions that are affiliates of the resulting bank), upon consummation of 

the transaction, would control more than 10 percent of the total 

amount of deposits of insured depository institutions in the United 

States, with certain exceptions. The Dodd-Frank Wall Street Reform 

and Consumer Protection Act, Pub. L. No. 111-203 (Dodd-Frank) 

creates an additional cap based on the total liabilities of banking and 

thrift organizations and nonbank firms identified as posing systemic 

risk. Dodd-Frank prohibits mergers or acquisitions by such firms if the 

total consolidated liabilities of the resulting company would exceed 10 

percent of the aggregate total consolidated liabilities of such firms. 

9

 See Ron Spieker, “Bank Branch Growth Has Been Steady—

Will It Continue?” FDIC Future of Banking Study, August 2004, 

http://www.fdic.gov/bank/analytical/future/fob_08.pdf. 

Table 4

More Banking Organizations Are Operating in 15 or More States

Company

Number of States 

with Deposit Offices

Reported Number of 

Deposit Offices

Domestic Deposits 

($ billions)

Share of Total 

Domestic Deposits 

(%)

Wells Fargo & Company 40 6,586 750.4 9.8%

Bank of America Corporation 36 6,041 916.1 11.9%

U.S. Bancorp 26 3,056 169.2 2.2%

JPMorgan Chase & Co. 24 5,227 652.7 8.5%

Beal Bank SSB 21 33 2.6 0.0%

BNP Paribas 20 716 45.0 0.6%

First Citizens Bancshares, Inc. 17 442 17.8 0.2%

Woodforest Financial Group, Inc. 17 736 2.9 0.0%

Northern Trust Corporation 17 88 23.3 0.3%

Dickinson Financial Corporation 17 207 5.0 0.1%

PNC Financial Services Group 16 2,572 177.3 2.3%

Capitol Bancorp Ltd. 16 69 4.2 0.1%

Regions Financial Corporation 16 1,774 95.8 1.2%

KeyCorp 15 1,027 61.8 0.8%

Citigroup Inc. 15 1,023 307.3 4.0%

Sources: FDIC Summary of Deposits and OTS Branch Office Survey.

Note: Deposit-taking offices only. 
FDIC Quarterly 45 2010, Volume 4, No. 4

Summary of Deposits

office growth over the past five years.10 For example, six 

of the ten states with the fastest population growth also 

ranked among the top ten states for office growth 

during the past five years. However, the relationship 

was not as strong among states with slow population 

growth. Of the ten states with the slowest population 

growth, only four ranked among the bottom ten for 

office growth.

Deposit volumes are not as strongly correlated with 

population growth and are driven by other factors, such 

as state law. Institutions also may follow different procedures when assigning deposits to branches, such as the 

proximity to the account holder’s address, the office 

where the deposit account is most active, the office 

where the account originated, or the office assignment 

used when determining employee compensation. The 

factors affecting office and deposit growth have contributed to divergent office and deposit growth rates across 

the nation (see Maps 1 and 2). 

10 The five-year compound growth rate in the number of offices by 

state has a correlation coefficient of 0.51 to the five-year compound 

growth rate in population by state. In contrast, the five-year compound 

growth rate in the amount of deposits by state has a correlation coefficient of 0.32 to the five-year compound growth rate in population by 

state. The correlation coefficient is a statistic that measures the degree 

to which two or more data series move together. 

Three-Fourths of the Nation’s 25 Largest Markets 

Are “Highly Concentrated” or “Moderately 

Concentrated”

By law, bank regulatory agencies and the Department of 

Justice must consider market concentration in their 

analysis of proposed mergers and acquisitions. The 

Herfindahl-Hirschman Index (HHI) is a commonly 

used measure of market concentration.11 The HHI 

measures increases in market concentration as banking 

organizations increase their deposit market share in a 

particular trade area. As of June 30, 2010, 4 of the 25 

largest metropolitan areas had an HHI in the “highly 

concentrated” range, and another 15 metropolitan areas 

had an HHI in the “moderately concentrated” range 

(see Table 5). 

Individual trends in market concentration in the 

nation’s 25 largest metropolitan areas were mixed in 

2010. The number of metropolitan areas with HHI 

scores in the “highly concentrated” or “moderately 

concentrated” range decreased by a net of one when 

11 Under the Department of Justice (DOJ) guidelines, markets with an 

HHI of less than 1,000 are considered “unconcentrated,” those with an 

HHI between 1,000 and 1,800 are considered “moderately concentrated,” and those with an HHI greater than 1,800 are considered 

“highly concentrated.” For more details, see the joint Federal Trade 

Commission and DOJ Web site on “Horizontal Merger Guidelines” at 

http://www.usdoj.gov/atr/public/guidelines/horiz_book/hmg1.html. 

Percentage Change in

Number of Branches Reported by

Insured Institutions, 2005–2010

< 0.00%

0.0-1.00%

1.01-2.00%

Source: FDIC. > 2.00%

Office Growth Was Weakest in the Midwest and Northeast

(Number of Branches Reported as of June 30, 2010)

HI: 284

AK: 133

WY: 235

WA: 1,891

OR: 1,124

NV: 550

CA: 

7,177 MO:

2,436

IA: 1,621

MN:

1,841

ND: 444

SD: 487

NE: 1,092

KS: 1,561

TX: 6,965

CO: 1,662

TN: 2,296

LA:

1,650

MS:

1,209

AR:

1,483

FL: 5,666

IL:

4,942 IN:

2,400

OH:

4,014

PA: 4,719

NY:

5,480

ME:

MT: 392 511

NM: 514 OK: 1,411

GA: 2,758

AZ: 1,381

UT: 602

ID: 541

VT: 266

NH: 433

MA: 2,217

RI: 259

CT: 1,296

NJ: 3,337

DE: 274

MD: 1,804

DC: 243

WV: 664

KY: 1,829

WI:

2,351 MI:

3,008

AL:

1,578

SC:

1,458

NC: 2,779

VA:

2,682

Map 1

Percentage Change in

Amount of Deposits Reported by

Insured Institutions in Each State, 2005–2010

< 0.00%

0.01-4.00%

4.01-6.00%

6.01-8.00%

Source: FDIC. > 8.00%

Deposit Growth Was Strong in the Midwest and Southwest, but the Way Deposits Are Assigned by Large Institutions May Skew Changes in Deposits

HI

AK

WY

WA

OR

NV

CA

MO

IA

MN

ND

SD

NE

KS

TX

CO

TN

LA

MS

AR

FL

IL IN OH

NH

PA

NY

ME MT

NM OK

GA

AZ

UT

ID

KY

WI

MI

AL

SC

NC

VA

VT

WV

MA

RI CT

NJ

DE

MD

DC

Map 2
FDIC Quarterly 46 2010, Volume 4, No. 4

compared with last year’s HHI scores.12 However, HHI 

scores for 15 of the 25 largest metropolitan areas 

increased during the year ending June 30, 2010, up from 

ten during the prior year. 

Within particular markets, some large institutions 

continue to exert significant local market power. In 11 

of the nation’s 25 largest metropolitan areas, one institution reports a market share of at least one-fourth of 

domestic deposits. Overall, the three banking organizations with the largest branch networks have 18 percent 

12 Both the Tampa and Washington, DC, metropolitan areas reported 

HHI scores below 1,000 in 2010; the Boston metropolitan area’s HHI 

score increased to above 1,000. 

of the nation’s deposit offices but hold 30 percent of 

domestic deposits. 

Conclusion

The number of banking offices decreased for the first 

time in 15 years, and deposit growth slowed during the 

year ending June 30, 2010. The number of offices 

declined in communities of all sizes as a result of institution failures and merger and acquisition activity as 

well as the industry’s continued efforts to reduce 

overhead in response to lingering challenges in the 

operating environment. Large institutions reported 

higher-than-average deposit growth and slightly positive office growth, and hold significant levels of deposits 

Table 5

Four of the Largest Metro Areas Are Characterized as “Highly Concentrated” Markets 

According to the Department of Justice’s Herfindahl-Hirschman Index Measurement 

(Top 25 metropolitan areas by population as of June 30, 2010)

Metropolitan Area

HerfindahlHirschman 

Index 

Population 

Estimate 

(millions)

5-Year 

Compounded 

Growth Rate 

in Offices 

5-Year 

Compounded 

Growth Rate 

in Deposits 

Pittsburgh, PA 2,466 2.4 0.2 5.9

San Francisco-Oakland-Fremont, CA 2,323 4.4 1.3 6.1

Minneapolis-St. Paul-Bloomington, MN-WI 2,259 3.3 1.2 10.0

Cincinnati-Middletown, OH-KY-IN 2,028 2.2 0.7 8.9

Phoenix-Mesa-Scottsdale, AZ 1,674 4.4 4.6 3.9

Houston-Sugar Land-Baytown, TX 1,551 6.0 4.1 6.6

Dallas-Fort Worth-Arlington, TX 1,513 6.6 3.7 6.2

Sacramento--Arden-Arcade--Roseville, CA 1,306 2.2 2.3 2.4

Portland-Vancouver-Beaverton, OR-WA 1,293 2.3 1.7 5.7

Baltimore-Towson, MD 1,281 2.7 0.4 5.7

Detroit-Warren-Livonia, MI 1,281 4.4 -0.1 2.3

New York-Northern New Jersey-Long Island, NY-NJ-PA 1,276 19.2 2.1 3.9

San Diego-Carlsbad-San Marcos, CA 1,270 3.1 1.7 2.8

Atlanta-Sandy Springs-Marietta, GA 1,248 5.6 0.8 3.2

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 1,224 6.0 0.3 11.4

Seattle-Tacoma-Bellevue, WA 1,151 3.5 0.9 3.6

Riverside-San Bernardino-Ontario, CA 1,116 4.2 3.4 0.8

Boston-Cambridge-Quincy, MA-NH 1,071 4.6 1.0 3.8

Denver-Aurora, CO 1,016 2.6 3.1 6.1

Los Angeles-Long Beach-Santa Ana, CA 962 13.0 1.7 3.2

Washington-Arlington-Alexandria, DC-VA-MD-WV 959 5.5 2.9 4.9

Tampa-St. Petersburg-Clearwater, FL 958 2.8 1.4 5.6

Miami-Fort Lauderdale-Pompano Beach, FL 719 5.5 1.7 2.6

Chicago-Naperville-Joliet, IL-IN-WI 635 9.7 1.5 3.4

St. Louis, MO-IL 632 2.9 2.9 8.2

Sources: FDIC Summary of Deposits and OTS Branch Office Survey, and Moody’s Economy.com.

Note: The Herfindahl-Hirschman Index (HHI), a commonly accepted measure of market concentration, is calculated by squaring the market share of each firm competing in the market and 

then summing the resulting numbers. Markets in which the HHI is between 1,000 and 1,800 points are considered to be “moderately concentrated,” and those in which the HHI is in 

excess of 1,800 points are considered to be “highly concentrated.” For more information, please refer to the joint U.S. Department of Justice and Federal Trade Commission Web site at 

http://www.usdoj.gov/atr/public/testimony/hhi.htm. Population estimates for 2008 are from Moody’s Economy.com.
FDIC Quarterly 47 2010, Volume 4, No. 4

Summary of Deposits

in a number of markets across the country. Going 

forward, expectations for future office growth are 

modest as the industry continues to work through high 

levels of problem assets and related earnings weaknesses 

(see accompanying Quarterly Banking Profile).

Author: Robert E. Basinger, Senior Financial Analyst

Division of Insurance and Research

The author would like to thank Tom Leonard and Benjamin 

Tikvina of the Division of Insurance and Research for their 

contributions to this article.
Federal Deposit Insurance Corporation

Washington, DC 20429-9990

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