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 commercial banks and savings institutions reported net income of $105.5 billion in 2007, a decline of $39.8 billion (27.4 percent) from the record $145.2 billion that the industry earned in 2006. Fourth-quarter earnings declined to $5.8 billion, a 16-year low. Insured institutions set aside a record $31.3 billion in loan-loss provisions in the fourth quarter, as troubled loans continued to rise. The noncurrent loan rate rose to 1.39 percent at year end, the highest level in more than five years.
Insurance Fund Indicators
Insured deposits increased 1.2 percent, and the Deposit Insurance Fund reserve ratio remained at 1.22 percent at year-end. One institution failed during the quarter.
Building Assets, Building Relationships: Bank Strategies for Encouraging Lower-Income Households to Save
By Rae-Ann Miller, Susan Burhouse, and Luke Reynolds
Saving enables individual households to meet unforeseen expenses and to plan for their financial futures. Not surprisingly, low- and moderate-income (LMI) households have the most difficulty saving. There is a common perception that banks do not view LMI households as potential profitable customers, but banks already have a relationship with a large number of these customers. This article explains the challenges LMI households face in building assets and examines the incentives banks have for encouraging these customers to save. The article also describes some strategies banks have used to build profitable relationships that also benefit lower-income consumers.
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Increasing Deposit Insurance Coverage for Municipalities and Other Units of General Government: Results of the 2006 FDIC Study
By Christine M. Bradley and Valentine V. Craig
The Federal Deposit Insurance Reform Conforming Amendments Act of 2005 required the FDIC to study the feasibility of increasing the limit on deposit insurance coverage for municipalities and other units of general government. The study results were delivered to Congress in February 2007. This article examines the arguments for and against additional coverage for municipal deposits, and considers whether private sector options provide a viable alternative to traditional public deposit collateralization programs.
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