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1st Quarter - 2007

Our Priorities

Depositor Protection

• FDIC will make deposit insurance assessment invoices for the first quarter 2007 available by June 15, 2007. Assessment rates for most institutions will vary between 5 and 7 basis points annually. Many institutions will have enough assessment credits to offset all of their deposit insurance bills for 2007. More information is available at http://www.fdic.gov/deposit/insurance/
  initiative/index.html.
  
  
• FDIC issued, along with other federal banking agencies, a proposed Statement on Subprime Lending to clarify the agencies' expectations on underwriting and marketing subprime mortgage products, especially subprime hybrid ARMS. FDIC testified before Congress twice about problems in the subprime mortgage market, our regulatory response, and possible solutions.
  
  
• The Board extended a moratorium on deposit insurance applications and change-in-control notices for industrial banks that would be controlled by non-financial companies. The Board issued a proposed rule to enhance transparency and controls for industrial banks that become subsidiaries of financial companies that are not subject to consolidated federal bank supervision. The Board's goal is to better enable the FDIC to assess a parent company's ongoing ability to serve as a source of strength for the industrial bank and to respond to any developing risks.
  
  
• FDIC issued a special edition of FDIC Consumer News -"Be Prepared, Be Informed, Be in Charge" - with simple strategies for managing money, to coincide with National Consumer Protection Week, observed February 4-10, 2007.
  
  
• The FDIC's Quarterly Banking Profile  stated that the industry reported net income of $145.7 billion in 2006, eclipsing the 2005 net income of $133.9 billion. This is the sixth consecutive year of record earnings.
  
  
• FDIC was appointed receiver of Metropolitan Savings Bank, Pittsburgh, Pennsylvania, on February 2, 2007. Metropolitan Savings is the first FDIC- insured institution failure since June 25, 2004.

Mission Support

• FDIC announced, along with other federal banking agencies, the launch of an improved website to access banks' quarterly Call Report data. The data are available faster and in multiple formats through the Central Data Repository (CDR) at https://cdr.ffiec.gov/public.
  
  
• FDIC announced, along with other federal banking agencies, proposed supervisory guidance documents related to the September 2006 proposed rule on new risk-based capital requirements in the United States for large internationally active banking organizations. The agencies are seeking public comment on the proposal.
  
  
• FDIC outlined a proposal before the FDIC Advisory Committee on Economic Inclusion to create a two-year pilot project for banks to establish Affordable Small-Dollar Lending programs to serve the unbanked and underserved population.

Resource Management

• FDIC issued its 2006 Annual Report on February 15, 2007. The Government Accountability Office completed a financial statement audit of the Deposit Insurance Fund and the FSLIC Resolution Fund, and issued its 15th consecutive unqualified opinion.
  
  
• FDIC Vice Chairman Martin Gruenberg was selected to chair the International Association of Deposit Insurers Training and Conference Committee.
  
  
• Sara A. Kelsey was appointed as FDIC's General Counsel in January. She was formerly Deputy Superintendent and General Counsel of the New York State Banking Department.

Our Key Indices Most Current Data1 Insurance Updated Quarterly YTD ($ Billions)   Q4 '01 Q4 '02 Q4 '03 Q4 '04 Q4 '05 Q4 '06 #-Insured Inst. 9,631 9,372 9,196 8,988 8,845 8,693 $–Insured Inst. $7,878 $8,446 $9,086 $10,115 $10,888 $11,877 Insured Deposits $3,211 $3,384 $3,453 $3,622 $3,891 $4,153 Fund Balances $41.4 $43.8 $46.0 $47.5 $48.6 $50.2 Reserve Ratios 1.29% 1.29% 1.33% 1.31% 1.25% 1.21% # Problem Inst. 114 136 116 80 52 50 $–Problem Inst. $39.8 $38.9 $29.9 $28.3 $6.6 $8.3 Supervision YTD 3/31/2006 3/31/2007 Total Number of FDIC Supervised Institutions 5,243 5,226 Bank Examinations: Safety and Soundness 616 594 Compliance and CRA 537 464 Insurance & Other Applications Approved 788 719 Formal & Informal Enforcement Actions 93 81 Receiverships YTD ($ Millions) Deposit Insurance Fund   Q4 '05 Q4 '06 % change Q1 '06 Q1 '07 % change Total Receiverships 27 25 -7% 26 24 -8% Assets in Liquidation $386 $317 -18% $378 $331 -12% Collections $325 $146 -55% $18 $27 50% Dividends Paid $369 $144 -61% $89 $126 42% Income YTD ($ Millions) Deposit Insurance Fund   Q4 '05 Q4 '06 % change Q1 '06 Q1 '07 % change Assessment Income $61 $32 -48% $5 $94 1780% Interest $2,342 $2,241 -4% $478 $567 19% Comprehensive Income $1,090 $1,569 44% $596 $580 -3% Resources ($ Millions)   Budget/Expenditures On Board Staff   TOTAL Ongoing Operations Receivership Funding Major Investment Funding Q1 2007 Target Y/E 2007 Annual Budget $1,127 $1,033 $75 $19 4,457 4,723 YTD Expended $233 $227 $2 $4   1 Financial data is unaudited. Request Hard Copy Previous Letters to Stakeholders

Last Updated 05/03/2007

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