Each depositor insured to at least $250,000 per insured bank

DEPOSIT INSURANCE FUND TRENDS
FOURTH QUARTER 2008

Notes to Users

The DIF Balance Declines by $16 Billion, and Insured Deposits Grow by 4.6 Percent in the Fourth Quarter DIF Reserve Ratio Declines to 0.40 Percent Twenty-five Insured Institutions Fail During the Year; Another Five Insured Institutions under the Same Holding Company Receive Assistance

During the fourth quarter of 2008, total assets of the nation's 8,305 FDIC-insured commercial banks and savings institutions increased by $274.2 billion (2.0 percent). Total deposits increased by $307.9 billion, more than the increase in assets. Total domestic deposits grew by 3.8 percent, higher than any quarterly growth rate observed since the fourth quarter of 2000. Brokered deposits increased by 15.3 percent ($101.4 billion), the largest quarterly percentage increase since the third quarter of 2000 when brokered deposits increased by 15.6 percent. Ten institutions accounted for more than two-thirds of this growth. Domestic time deposits increased by 1.8 percent, while other domestic interest-bearing deposits increased by 6.4 percent and domestic non-interest-bearing deposits increased by 2.2 percent.

For all of 2008, total domestic deposits increased by 8.4 percent, with domestic interest-bearing deposits rising by 6.2 percent and domestic non-interest-bearing deposits increasing by 19.4 percent. Foreign office deposits increased by 2.4 percent ($36.7 billion), and Federal Home Loan Bank (FHLB) advances decreased by 2.6 percent ($21.4 billion). The share of assets funded by domestic deposits increased from 53.0 percent to 54.1 percent. By contrast, foreign deposits as a percent of total assets declined during the year from 11.5 percent to 11.1 percent, and the share of asset funding attributable to FHLB advances decreased from 6.2 percent to 5.7 percent.

Estimated insured deposits (including U.S. branches of foreign banks) increased by 4.6 percent during the fourth quarter of 2008, up from a 1.8 percent increase in the previous quarter. For all of 2008, insured deposits increased by 10.8 percent, up from a 3.3 percent increase in 2007. For institutions reporting as of December 31, 2008, and September 30, 2008, insured deposits increased during the fourth quarter at 5,332 institutions (64 percent), decreased at 2,922 institutions (35 percent), and remained unchanged at 36 institutions.

The Deposit Insurance Fund (DIF) decreased by $15.7 billion during the fourth quarter to $18,889 million (unaudited). Accrued assessment income added $996 million to the DIF during the fourth quarter. Interest earned, combined with realized and unrealized gains (losses) on securities added $1.13 billion to the insurance fund. Operating and other expenses, net of other revenue, reduced the fund by $275 million. The reduction in the DIF during the quarter was primarily due to $17.6 billion in loss provisions for actual and anticipated insured institution failures. For all of 2008, the DIF balance fell by $33.5 billion (64 percent), primarily because of $40.2 billion in loss provisions.

The DIF's reserve ratio equaled 0.40 percent on December 31, 2008, which was 36 basis points lower than the previous quarter. During 2008, the reserve ratio decreased by 82 basis points, from 1.22 percent at year-end 2007. The December figure is the lowest reserve ratio for a combined bank and thrift insurance fund since June 30, 1993, when the reserve ratio was 0.28 percent.

Twelve FDIC-insured institutions with combined assets of $24.4 billion failed during the fourth quarter of 2008, at an estimated cost to the DIF of $4.5 billion. For all of 2008, 25 FDIC-insured institutions with assets of $372 billion failed, the largest number of failures since 1993 when 41 institutions with combined assets of $3.8 billion failed (excluding thrifts resolved by the RTC). In 2008, five banks owned by Citigroup with assets of $1.3 trillion received assistance under a systemic risk determination.