All FDIC-INSURED INSTITUTIONS
FIRST QUARTER 2002

Notes to Users

Reporting Change Boosts Growth in Estimated Insured Deposits BIF Reserve Ratio Falls Below 1.25 Percent, For the First Time Since 1995 Statement by FDIC Chairman Don Powell SAIF Reserve Ratio Remains Unchanged Six BIF Member Institutions Fail During Quarter

Total assets and deposits of the nation's 9,538 insured institutions shrank slightly in the first three months of 2002. During this period, deposits insured by the FDIC increased by 2.6 percent ($82.9 billion) to $3.3 trillion. This was the largest quarterly rise since the first quarter of 2001, when total insured deposits increased by 2.8 percent. The combined balances of the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) increased by 0.3 percent during the quarter, ending at $41.75 billion (unaudited). The joint BIF and SAIF reserve ratio (fund balances as a percent of insured deposits) for all insured institutions equaled 1.27 percent on March 31.

In the first quarter of 2002 deposits insured by the BIF grew by 3.1 percent ($75 billion), reaching $2.48 trillion. Nearly two-thirds of the first quarter's deposit growth was due to a reporting change for institutions filing Call reports¹. Institutions that file the Call report are predominantly BIF-member institutions, so the impact of this change was concentrated in the growth of BIF insured deposits.

The Bank Insurance Fund (BIF) grew by 0.9 percent ($258 million) during the first three months of 2002, ending the quarter with a balance of $30.7 billion (unaudited). Because the BIF growth did not keep pace with the growth of BIF-insured deposits, the reserve ratio fell from 1.26 percent to 1.24 percent on March 31. This is the first time that the BIF reserve ratio has fallen below the Statutory "Designated Reserve Ratio" (DRR) of 1.25 percent since the BIF was recapitalized in 1995. The FDIC is required to maintain a BIF balance of at least 1.25 percent of BIF-insured deposits (the DRR). If the BIF falls below the DRR, the FDIC must collect premiums sufficient to restore the shortfall within a year after the higher premiums are set, or it must collect premiums of at least 23 basis points. The FDIC Board of Directors has the option to increase insurance premiums by as much as 5 basis points at any one time. Larger increases require the Board to solicit public comment. Deposit insurance premiums are only changed on June 30 (July 1) and December 31 (January 1) assessment dates and insured institutions must be notified 45 days in advance of an assessment increase. As a result, deposit insurance premiums would not be increased for a DRR shortfall prior to December 31, 2002 (January 1 - June 30, 2003 assessment period). The FDIC has until the middle of November 2002 to notify institutions of an assessment increase for the first semiannual assessment period of 2003. If the DRR for BIF climbs above 1.25 percent during the second quarter of 2002 (June 30, 2002 financials) then increased assessment rates for BIF would not be necessary.

Deposits insured by the SAIF grew 1.0 percent in the first quarter of 2002, following a 3.0 percent rise in the fourth quarter. The reserve ratio of the Savings Association Insurance Fund (SAIF) was 1.36 at the end of first quarter 2002, unchanged from three months earlier. The balance of the SAIF was $11.05 billion (unaudited) on March 31, up $114 million during the quarter. Six BIF insured institutions failed during the first quarter 2002, the largest number since the third quarter of 1994, when eight BIF institutions and one SAIF-insured institution failed. The six institutions that failed in the first quarter of 2002 were all commercial banks, with combined assets of $2.1 billion. All of the insured deposits in these six institutions were insured by the BIF. Losses to the BIF were estimated at $644 million when these institutions failed. During the same period no SAIF member institution failed.

Among insured institutions whose brokerage affiliates sweep cash management accounts into FDIC-insured accounts, insured brokered deposits increased by $1.3 billion during the quarter. All of the increase was at BIF member institutions. During the same period, fully-insured brokered deposits declined by 2.6 percent for all BIF member institutions, and increased by 6.7 percent at SAIF member institutions.

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 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 >$100 times $100K)). An institution's insured deposits are estimated by subtracting estimated uninsured deposits from total domestic deposits