The FDIC Quarterly provides a comprehensive summary of the most current financial results for the banking industry, along with feature articles. These articles 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. The FDIC Quarterly brings together data and analysis that were previously available through three retired publications -- the FDIC Outlook, the FDIC Banking Review, and the FYI: An Update on Emerging Issues in Banking. Past issues of these publications are archived under their original publication names.
FDIC-insured institutions reported net income of $7.6 billion in the first quarter of 2009, a decline of $11.7 billion (60.8 percent) from the $19.3 billion that the industry earned in the first quarter of 2008. Higher loan-loss provisions, increased goodwill write-downs, and reduced income from securitization activities all contributed to the year-over-year earnings decline. Three out of five insured institutions reported lower net income in the first quarter and one in five was unprofitable.
Insurance Fund Indicators
Estimated insured deposits (based on the basic FDIC insurance limit of $100,000) increased by 1.7 percent in the first quarter of 2009. The Deposit Insurance Fund reserve ratio fell to 0.27 percent, and 21 FDIC-insured institutions failed during the quarter.
Temporary Liquidity Guarantee Program
The FDIC Board approved the Temporary Liquidity Guarantee Program (TLGP) in response to major disruptions in credit markets. The TLGP improves access to liquidity for participating institutions by fully guaranteeing non-interest-bearing transaction deposit accounts and by guaranteeing eligible senior unsecured debt. As of March 31, 2009, more than 86 percent of FDIC-insured institutions have opted in to the Transaction Account Guarantee Program, and 8,102 eligible entities have elected the option to participate in the Debt Guarantee Program. Approximately $700 billion in non-interest-bearing transaction accounts was guaranteed as of March 31, 2009, and $336 billion in guaranteed senior unsecured debt, issued by 97 entities, was outstanding at the end of the first quarter.
The FDICs Small-Dollar Loan Pilot Program is a two-year case study designed to identify best practices in affordable small-dollar loan programs that can be replicated by other financial institutions. This article summarizes results from the first four quarters of the pilot, highlights factors that have contributed to the success of participating banks programs, and presents the most common small-dollar loan business models.
This article summarizes key findings of the FDIC Survey of Bank Efforts to Serve the Unbanked and Underbanked. It is intended to inform bankers, policymakers, and researchers of the survey results and to outline steps for improving access to the mainstream financial system.