Exhibit 1-7

The exhibit illustrates the predictive power of four models that the FRC has used as inputs to the two-year failed asset projection for the period 1997 to 2001. For each of the four models, a graph is used to compare predicted failed assets with actual failed assets. For each quarter, a model's projected loss is plotted against the actual loss for the quarter, resulting in a "scatter pattern" around a diagonal line that represents the ideal: projected equal to actual. For three of the models - Pro Forma Pessimistic, Proportional Hazard Pessimistic, and the DSC Eight-quarter Projection - the graphs illustrate that the models generally predict a lower level of failed assets than actually occurred. In the case of the SAM Mild Stress model, the graph illustrates that the model generally predicted more failed assets than actually occurred. The source for this exhibit is FDIC and McKinsey analysis.