Archives

Historical Archive of the Quarterly Banking Profile

2019 Summary of Deposits Highlights
In the 2019 Summary of Deposits (SOD) Survey, the banking industry reported an increase in deposits and a decrease in the number of branch offices, continuing recent trends. This article describes deposit gathering and office closures shown in the 2019 SOD, which reports data as of June 30, 2019. For selected topics, comparative information about credit unions is included. This article also examines characteristics of the offices of operating banks that close versus those that are sold or leased, and of offices that close versus those that remain open following bank acquisitions.

Merger Adjusting Bank Data: A Primer
Analysis of banking trends often focuses on specific industry subgroups. The analyst tracks the performance or characteristics of an industry subgroup over time, and the results, if compelling, can serve as input to policy decisions. An important component of analyzing industry subgroups is a procedure called merger adjustment. This article describes how and when FDIC analysts use merger adjustment when analyzing the banking industry. It discusses when to merger adjust and when not to merger adjust, and offers guidance for interpreting the results.

Deposit Growth Slows and Office Decline Continues
The 2018 Summary of Deposits Survey showed that FDIC-insured institutions reported an increase in deposits and a decrease in offices over the past year. During the year ended June 2018, deposits increased at both noncommunity banks and at community banks, but at slower rates than in recent years. The decrease in the number of offices is a decade-long trend in both community banks and noncommunity banks, although the office opening and closing patterns of these two types of institutions has differed markedly. This article will describe these trends in detail and will look at the association between office closures and changes in bank profitability and efficiency. Analysis of Call Report data indicates that banks that closed offices at higher rates between 2013 and 2018 reported improved efficiency ratios and stronger profitability.

Factors Shaping Recent Trends in Banking Office Structure for Community and Noncommunity Banks
Total industry deposits grew once again in 2017, and the rate of deposit growth was higher at community banks than at noncommunity banks, according to the 2017 Summary of Deposits (SOD) survey.

Community Bank Mergers Since the Financial Crisis: How Acquired Community Banks Compared With Their Peers
An increase in mergers and a dearth of new charters in the post-crisis period have renewed the interest of researchers in banking industry consolidation.

Banks Attract More Deposits While Operating Fewer Offices
Deposits across the banking industry grew while the number of offices shrank among noncommunity banks and increased among community banks from the previous year, according to the 2016 Summary of Deposits survey. Meanwhile, offices in energy-dependent counties reported almost no deposit growth as natural gas, oil, and coal prices fell.

Core Profitability of Community Banks, 1985–2015
The relatively low profitability reported by community banks since the 2008 financial crisis has sparked concerns about the core profitability of the community banking model. This paper constructs an econometric model using 31 years of data to estimate the impact of macroeconomic shocks on industry average pretax return on assets (ROA). After accounting for macroeconomic factors, the remaining unexplained variation is considered to be the core component of profitability. Core ROA is found to have been relatively stable between 1985 and 2015. It trended downward over the 1990s, but the effect of the financial crisis on industry composition has led to a reversal and a modest increase in core profitability. More than 80 percent of the post-crisis decline in profitability can be explained by negative macroeconomic shocks.

Mutual Institutions: Owned by the Communities They Serve
Mutual institutions—savings banks and savings and loans owned by their depositors—are a unique type of community bank. This paper provides an overview of mutual institutions and their place in the U.S. financial system. They generally earn lower returns on assets than stock community banks, but have higher-quality assets. Mutuals also failed less often between 2008 and 2014 than did stock community banks. From their 19th-century origins as providers of small-denomination savings accounts and the means of pooling funds to finance homeownership, to their dominance of U.S. mortgage finance for much of the 20th century, and to their strong performance during the recent financial crisis, mutuals remain an important segment of the community banking sector.

Financial Performance and Management Structure of Small, Closely Held Banks
Closely held banks may face operational challenges in raising external capital and recruiting future managers, especially in rural areas. At the same time, closely held banks may have certain operational advantages, including the ability to focus on long-term goals and to minimize principal-agent problems that may arise from the separation of ownership and operational control. This paper compares the performance of closely and widely held banks as identified in a survey of FDIC bank examiners and finds that closely held banks do not appear, on net, to be underperforming widely held banks in recent years. Closely held banks where the day-to-day manager is a member of the ownership group seem to outperform banks with a hired manager. The survey of bank examiners in three FDIC supervisory Regions was used to identify the ownership and management structure of more than 1,350 community banks. The survey results suggest that almost 75 percent of community banks in these Regions can be regarded as closely held, typically on the basis of family or community ties.

Brick-and-Mortar Banking Remains Prevalent in an Increasingly Virtual World
This paper chronicles long-term trends in the number and density of U.S. banking offices from 1935 to 2014. The study examines the effects that population trends, bank crises, changes in banking laws, and online and mobile banking have had on the number and density of banking offices, and explores the relationship between technology and brick-and-mortar bank offices.

Community Banks Remain Resilient Amid Industry Consolidation

Long-Term Trends in Rural Depopulation and Their Implications for Community Banks

Community Bank Developments in 2012

Highlights From the 2012 Summary of Deposits

Community Banking in the 21st Century: Research and Policy Conference
Federal Reserve System | Conference of State Bank Supervisors (CSBS) | Federal Deposit Insurance Corporation (FDIC)

Collaborative Relationships with Minority Depository Institutions
A resource guide describing ways that financial institutions, including community banks, can partner with MDIs to the benefit of all institutions involved as well as the communities they serve.

De Novo Outreach Meetings

Community Bank Webinar: Implementation Examples for the Current Expected Credit Losses Methodology (CECL) FDIC Community Banking Reference Data
Third quarter 2016 community banking reference data is now available. New variables have been added to the Current and Historical Community Banking Reference data files. See the revised Notes to Users for more information.

FDIC Community Banking Conference
Strategies for Long–Term Success
Photo Essay

Minority Depository Institutions: Structure, Performance, and Social Impact
This study updates the FDIC’s 2014 minority depository institution (MDI) research study and explores changes in FDIC-insured MDIs, their role in the financial services industry, and their impact on the communities they serve. The study period covers 2001 to 2018 and looks at the demographics, structural change, geography, financial performance, and social impact of MDIs. The study found that MDIs continue to consolidate, but the surviving MDIs are performing significantly better than they were five years ago. It also found that MDIs are effectively serving their communities.

Small Business Lending Survey
The Small Business Lending Survey is a nationally-representative survey of U.S. banks and their small business lending practices. The report of survey findings offers new information for both small and large banks on many aspects of their small business lending. The results provide context for the implications of current bank consolidation trends on U.S. small businesses.

Applications for Deposit Insurance
Information and resources important to the application process including the draft Applying for Deposit Insurance – A Handbook for Organizers of De Novo Institutions

Ability-to-Repay & Qualified Mortgages
The updated videos covering the Ability-to-Repay and Qualified Mortgages Rule reflect changes in federal laws and regulations since the videos were originally released by the FDIC in 2014.

Flood Insurance Videos
The updated videos include information about the changes to federal flood insurance compliance requirements brought about by the Biggert-Waters Flood Insurance Reform Act, the Homeowner Flood Insurance Affordability Act, and the agency’s final rules on flood insurance at Part 339 of Title 12 of the Code of Federal Regulations.

Cyber Challenge Videos
The FDIC created “Cyber Challenge: A Community Bank Cyber Exercise” to encourage community financial institutions to discuss operational risk issues and the potential impact of information technology disruptions on common banking functions.