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.
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.
An Introduction to the FDIC's Small-Dollar Loan Pilot Program
By Susan Burhouse, Rae-Ann Miller, and Aileen G. Sampson
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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