Quarterly Banking Profile – Second Quarter 2008

Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation reported net income of $5.0 billion in the second quarter of 2008, a decline of $31.8 billion from the $36.8 billion that the industry earned in the second quarter of 2007. Higher loan-loss provisions were the most significant factor in the earnings decline. Loss provisions totaled $50.2 billion, more than four times the $11.4 billion quarterly total of a year ago. The average return on assets (ROA) in the second quarter was 0.15 percent, falling from 1.21 percent in the second quarter of 2007.

Insurance Fund Indicators
Insured deposits increased 0.5 percent during the second quarter, and the Deposit Insurance Fund reserve ratio fell to 1.01 percent. Two institutions failed during the quarter.

Feature Article:

On February 5, 2008, the FDIC selected 31 banks to participate in its Small-Dollar Loan Pilot Program. The goal of the two-year pilot is to help the FDIC identify best practices in affordable small-dollar loan programs that can be replicated by other financial institutions. This article summarizes the key parameters of the pilot, the small-dollar loan program proposals that participating banks described in their applications, and the first quarter 2008 results. Banks in the pilot originated more than 3,100 small-dollar loans, with a principal balance of about $3.7 million in the first quarter.
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Past Issues

FDIC Quarterly 2008 Volume 2, Number 2
FDIC Quarterly 2008 Volume 2, Number 1
FDIC Quarterly 2007 Volume 1, Number 3
FDIC Quarterly 2007 Volume 1, Number 2
FDIC Quarterly 2007 Volume 1, Number 1

Archived Issues

FDIC Outlook – 1997 thru 2006
FDIC Banking Review – 1995 thru 2006