All FDIC-INSURED INSTITUTIONS
SECOND QUARTER 2002

Notes to Users

Insured Deposit Growth Slows in Second Quarter to 0.1 Percent BIF Reserve Ratio Rises To 1.26 Percent SAIF Reserve Ratio increases to 1.38 Percent Two Insured Institutions Fail During Quarter

Total assets of the nation’s 9,480 FDIC-insured depository institutions increased by $215 billion from March 31 to June 30, 2002. Deposits, which increased $81.5 billion during the period, funded about 38 percent of this growth. Deposits from domestic offices grew by $44.1 billion (1 percent) while deposits from foreign offices increased by $37.3 billion (6.2 percent). Domestic deposits in accounts greater than $100 thousand grew by $45.2 billion while domestic deposits in accounts less than $100 thousand shrank by $1.1 billion. Quarterly growth was strongest for money market deposit accounts, which grew by $29.5 billion (2 percent), and other savings deposits which increased by $17.2 billion (2.7 percent).

Insured deposits increased by 0.1 percent during the second quarter, the slowest rate of growth since the second quarter of 1999. Insured deposits increased at 5,050 institutions, remained unchanged at 60 institutions, and declined at 4,328 institutions. Deposits insured by the Bank Insurance Fund (BIF) decreased by 0.1 percent during the quarter, after increasing in the first quarter by 3.2 percent.¹ Deposits insured by the Savings Association Insurance Fund (SAIF) rose by 1.0 percent, following a first quarter increase of 1.3 percent.

The Bank Insurance Fund (BIF) grew by 1.6 percent ($490 million) during the second quarter of 2002, ending the quarter with a balance of $31.19 billion (unaudited). The BIF’s second quarter growth was $232 million greater than the previous quarter’s. The second quarter’s faster growth was attributable to a greater amount of interest income from investments and a larger amount of unrealized gains on securities. The increase to the Bank Insurance Fund plus the decrease in BIF-insured deposits caused the BIF reserve ratio to rise from 1.23 percent on March 31 to 1.26 percent on June 30.

The Savings Association Insurance Fund (SAIF) increased during the second quarter of 2002 by 2.5 percent to $11.32 billion (unaudited). Increased income from investments, unrealized gains on securities, and a negative provision for insurance losses made the second quarter growth for the SAIF the largest since it was recapitalized in the third quarter of 1996. The growth of SAIF more than offset the quarterly increase in SAIF insured deposits, and the reserve ratio rose from 1.36 on March 31 to 1.38 percent on June 30. This was the largest increase in the SAIF reserve ratio since the third quarter of 2000.

Sweeps of brokerage-originated cash management funds to FDIC-insured accounts of affiliate banks lost momentum during the quarter. Among insured institutions whose brokerage affiliates sweep cash management accounts into FDIC-insured accounts, insured brokered deposits decreased by $2.1 billion during the second quarter of 2002. At these institutions, BIF-insured brokered deposits fell by $1.2 billion and SAIF-insured brokered deposits dropped by $900 million. During the same period, fully insured brokered deposits increased by 2.3 percent at all other BIF-insured institutions and decreased at all other SAIF-insured institutions by .6 percent.

Two FDIC insured institutions failed during the second quarter of 2002, one BIF member commercial bank and one SAIF member savings bank. At the time of failure the BIF-member commercial bank had $379 million in assets, and the SAIF-member savings bank had $50 million in assets. For the first six months of 2002 seven BIF member institutions have failed with combined assets of $2,403 million at an estimated cost of $611 million. During the same period one SAIF-member institutions failed with assets of $50 million and an estimated cost of $11 million.

Quarterly Percentage Change In Insurance Fund Balances, 1999-2002

TABLE I-C. Selected Indicators, FDIC-Insured Institutions

TABLE II-C. Aggregate Condition and Income Data, All FDIC-Insured Institutions

TABLE III-C. Selected Insurance Fund Indicators

Insurance Fund Reserve Ratios, Percent of Insured Deposits

Fund Balances and Insured Deposits

TABLE IV-C. Closed/Assisted Institutions

TABLE V-C. Selected Indicators, By Fund Membership

TABLE VI-C. Estimated FDIC-Insured Deposits by Fund Membership and Type of Institution

TABLE VII-C. Assessment Base Distribution and Rate Schedules

Number of FDIC-Insured 'Problem' Institutions

Assets of FDIC-Insured 'Problem' Institutions

FOOTNOTE

¹ About two-thirds of the first quarter’s deposit growth was due to a reporting change for institutions filing Call reports. Starting in March 2002 all institutions filing the Call Report are required to report estimated uninsured deposits. Prior to March 2002 reporting estimated uninsured deposits was voluntary for these institutions. If uninsured deposits were not reported then they were estimated using a simple formula ((Amount of domestic deposits>$100K) less (number of deposit accounts>$100K times $100K)). An institution’s insured deposits are estimated by subtracting estimated uninsured deposits from total domestic deposits.