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Letter to Stakeholders
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Printable Version
4th Quarter - 2007
This edition of our Letter
to Stakeholders highlights the FDIC’s activities and year-end financial
statistics for 2007. As we begin the new year, the FDIC -- along with fellow
regulators and the banking industry-- continues the urgent search for workable
solutions to the serious subprime mortgage market problem that our country
faces. The FDIC supports a systematic and streamlined loan modification
process that will help the scores of subprime borrowers who are current
on their loans, but who cannot refinance or afford the higher payments
when interest rates reset, in order to avert foreclosure and stay in their
homes. For more information about the FDIC, please visit our Web site at www.fdic.gov.
Our Priorities
Depositor Protection
- FDIC-insured commercial banks and savings institutions reported
net income of $28.7 billion in the third quarter of 2007, a
decline of $9.4 billion (24.7 percent) from the third quarter
of 2006. The year-over-year
decline is primarily attributable to increases in provisions
for loan losses and a decline in non-interest income.
- Estimated
insured deposits increased by $9.7 billion in
the third quarter of 2007. The Deposit Insurance Fund (DIF)
balance increased by $527 million to $51.8 billion.
The ratio of the DIF to estimated insured deposits increased
by one
basis point, ending the third quarter of 2007 at
1.22
percent.
- The
DIF earned assessment income of $170 million in the third quarter
of 2007. The FDIC estimates that assessment
income earned will increase to $239 million
in the fourth quarter of 2007.
- The
FDIC was appointed receiver of Miami Valley Bank, Lakeview, Ohio
on October 4, 2007. Miami Valley was the third FDIC-insured institution
to fail in 2007.
Mission Support
- The FDIC issued a proposed rule to improve the process for making
an accurate determination
of insured deposits at larger institutions in the event of a failure.
The measure will enhance the FDIC’s ability
to make funds available to insured depositors in the unlikely event
that a large financial institution is closed .
- The
FDIC, along with the other banking regulators, approved the final
rule implementing
the Advanced Approaches of the Basel II Capital Accord.
The new rules require some large banks to calculate capital requirements
using their own internal model-driven estimates – a significant
change in regulatory practice.
- Based
upon a detailed review of the overall examination program, the FDIC announced
the abolition
of the MERIT examination guidance
and eliminated the term “Refocus” in discussions of compliance
examinations. Examiners will determine the scope of examinations based
on the risk profile of each specific institution.
- The
FDIC and the Korea Deposit Insurance Corporation (KDIC) signed a
Memorandum
of Understanding (MOU) which
provides the framework for KDIC employees
to gain an overview of FDIC’s operations. The MOU is a continuation
of the FDIC’s efforts to forge international working relationships
with deposit insurers around the globe.
- The
FDIC’s Advisory Committee on Economic Inclusion met to
discuss money services businesses and the opportunities and challenges
for
banks and consumers.
Resource Management
- The
FDIC Board of Directors approved a $1.14 billion Corporate Operating
Budget for 2008, an increase of approximately 3.1% from 2007. The Board
also
approved an increase in authorized staffing, primarily for additional
bank examiner positions, from 4,716 in 2007 to 4,810 for 2008.
- An
outside consultant completed a comprehensive FDIC employee survey.
The FDIC will focus on addressing identified issues as a major 2008
corporate
priority.
- FDIC Vice Chairman
Martin Gruenberg was elected by the International Association of Deposit
Insurers to serve as President of the Association
and Chairman of its Executive Council.
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Our Key Indices
Most Current Data1
| Insurance |
| Updated Quarterly ($ Billions) |
| |
| 9,433 |
9,252 |
9,038 |
8,870 |
8,755 |
8,571 |
| $8,284 |
$8,953 |
$9,887 |
$10,713 |
$11,771 |
$12,727 |
| $3,344 |
$3,414 |
$3,559 |
$3,831 |
$4,098 |
$4,241 |
| $43.0 |
$45.6 |
$47.0 |
$48.4 |
$50.0 |
$51.8 |
| 1.29% |
1.34% |
1.32% |
1.26% |
1.22% |
1.22% |
| 146 |
116 |
95 |
68 |
47 |
65 |
| $42.1 |
$30.3 |
$25.1 |
$20.9 |
$4.0 |
$18.5 |
| YTD |
| Total Number of FDIC Supervised Institutions |
5,229 |
5,257 |
| Bank Examinations: |
| Safety and Soundness |
2,388 |
2,258 |
| Compliance and CRA |
1,959 |
1,773 |
| Insurance & Other Applications Approved |
3,168 |
3,006 |
| Formal & Informal Enforcement Actions |
445 |
367 |
| Receiverships |
| YTD ($ Millions) |
| Deposit Insurance Fund |
| |
| 26 |
25 |
-4% |
25 |
22 |
-14% |
| $345 |
$2,085 |
504% |
$317 |
$875 |
176% |
| $74 |
$56 |
-24% |
$146 |
$1,207 |
727% |
| $116 |
$252 |
117% |
$154 |
$1,647 |
969% |
| Deposit Insurance Fund |
| |
| $22 |
$404 |
1736% |
$32 |
$643 |
1909% |
| $1,765 |
$1,955 |
11% |
$2,241 |
$2,540 |
13% |
| $1,395 |
$1,589 |
14% |
$1,568 |
$2,248 |
43% |
| |
| |
| $1,122 |
$1,032 |
$75 |
$15 |
4,532 |
4,725 |
| $1,013 |
$982 |
$19 |
$12 |
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