Fdic 2nd Quarter Slides
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Quarterly Banking Profile Second Quarter 2009
Second Quarter 2009 Report
August 27, 2009
The Industry Posted Its Second Quarterly Loss in the Past 18 Years $ Billions
60 50 40
34.0 33.2 34.7 32.6
36.9 38.0 38.0 35.3 35.6 36.8 28.7
30
19.3
20 10
4.7
0.9
5.5
0.5
0 -3.7
-10 -20
Securities and Other Gains/Losses, Net Net Operating Income
-30 -37.3
-40 1
2 3 2005
4
1
2 3 2006
4
1
2 3 2007
4
1
2
3 2008
4
1
2 2009
Higher Loss Provisions Still Weigh Heavily on Industry Earnings 2nd Quarter 2009 vs. 2nd Quarter 2008 ($ Billions)
18
16.5 16 14 12
Negative Factors
Positive Factors
10 8
6.5 6 4
3.4
3.3 1.7
1.5
2 0 Increase in Net Interest Income
Increase in Noninterest Income
Decline in Realized Losses on Securities
Increase in Loan Loss Provisions
Increase in Extraordinary Losses
Increase in Noninterest Expense
Troubled Loans Increased at a Slower Rate in the Second Quarter $ Billions
110
90 Quarterly Change in Noncurrent Loans Quarterly Net Charge-Offs
70
50
30
10
-10 1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Noncurrent Loan Growth Is Outpacing Growth in Reserves Coverage Ratio (Percent)
$ Billions
180
350
Coverage Ratio (Percent) 160 300 140 250 120 200
100
150
80
Loan-Loss Reserves ($ Billions)
60
100 40 50 20
Noncurrent Loans ($ Billions) 0
0 1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Troubled Loans Increased at a Slower Rate in the Second Quarter $ Billions
110
90 Quarterly Change in Noncurrent Loans Quarterly Net Charge-Offs
70
50
30
10
-10 1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Margins Improved Slightly in the Second Quarter Quarterly Net Interest Margin (Percent)
4.5
Assets < $1 Billion 4.0
3.60% 3.5
3.47%
3.0
Assets > $1 Billion
2.5 1
2 3 2005
4
1
2 3 2006
4
1
2 3 2007
4
1
2 3 2008
4
1
2 2009
The Number of "Problem" Institutions Is at a 15-Year High Number of Insured Institutions on the FDIC's "Problem List"
450 416
400 350 305
300 252
250 200 171
150 117 90
100 50
48
50
47
50
53
1
2
3
4
1
61
65
2
3
76
0
2006
2007
4
1
2
3
2008
4
1
2 2009
The Contingent Loss Reserve Represents a Growing Share of Total Reserves $ Billions $60.0
$55.8
DIF Balance Contingent Loss Reserve
$50.0
$46.3 $39.6
$41.5
$42.4
$40.0 $13.0
$45.2 $30.0
$34.6
$10.4
$17.3
$20.0 $28.5
$32.0
$22.4
$10.0 $10.6
$11.7
Jun 08
Sep 08
$0.0 Dec 08
Mar 09
Jun 09
Quarterly Banking Profile Second Quarter 2009
Second Quarter 2009 Report
August 27, 2009
Quarterly Loan-Loss Provisions and Net Operating Revenue* $ Billions
180 Loan-Loss Provisions
160 140 120 100 80 60
Net Operating Revenue
40 20 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2001
2002
2003
2004
2005
2006
* Quarterly net operating revenue = net interest income plus total noninterest income
2007
2008
2009
Quarterly Banking Profile Second Quarter 2009
Second Quarter 2009 Report
August 27, 2009
Quarterly Banking Profile Second Quarter 2009
Second Quarter 2009 Report
August 27, 2009
Credit Card and HELOC Loss Rates Continue to Increase Noncurrent Rate (Percent)
Net Charge-Off Rate (Percent, Quarter Annualized)
10
10
Noncurrent: Credit Cards, (L) Noncurrent: HELOC, (L)
8
8
Net Charge-Offs: Credit Cards, (R) Net Charge-offs: HELOC, (R) 6
6
4
4
2
2
0
0 2
3
2004
4
1
2
3
2005
4
1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Asset Quality Deterioration is Accelerating in Commercial & Industrial Portfolios Noncurrent Rate (Percent)
Net Charge-Off Rate (Percent, Quarter Annualized)
3
3
2
2
Noncurrent: C&I, (L) Net Charge-Offs: C&I, (R)
1
1
0
0 2
3
2004
4
1
2
3
2005
4
1
2
3
2006
4
1
2
3
2007
4
1
2
2008
3
4
1
2
2009
Net Charge-Offs Spiked in 2Q-09; ALLL Coverage Continues to Decline Percent of Average Assets (Percent, Quarter Annualized)
Reserve Coverage Ratio (Percent)
250
3.0
ALLL to Noncurrent Loans, (L) Provision Exp. to Avg. Assets, (R) Net Charge-Offs to Avg. Assets, (R)
200
2.5
2.0 150 1.5 100 1.0
50 0.5
0
0.0 2
3
2004
4
1
2
3
2005
4
1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Quarterly Banking Profile Second Quarter 2009
Second Quarter 2009 Report
August 27, 2009
The Contingent Loss Reserve Represents a Growing Share of Total Reserves $ Billions $60.0
$55.8
DIF Balance Contingent Loss Reserve
$50.0
$46.3 $39.6
$41.5
$42.4
$40.0 $13.0
$45.2 $30.0
$34.6
$10.4
$17.3
$20.0 $28.5
$32.0
$22.4
$10.0 $10.6
$11.7
Jun 08
Sep 08
$0.0 Dec 08
Mar 09
Jun 09
Second Quarter 2009 Report
August 27, 2009
The Industry Posted Its Second Quarterly Loss in the Past 18 Years $ Billions
60 50 40
34.0 33.2 34.7 32.6
36.9 38.0 38.0 35.3 35.6 36.8 28.7
30
19.3
20 10
4.7
0.9
5.5
0.5
0 -3.7
-10 -20
Securities and Other Gains/Losses, Net Net Operating Income
-30 -37.3
-40 1
2 3 2005
4
1
2 3 2006
4
1
2 3 2007
4
1
2
3 2008
4
1
2 2009
Higher Loss Provisions Still Weigh Heavily on Industry Earnings 2nd Quarter 2009 vs. 2nd Quarter 2008 ($ Billions)
18
16.5 16 14 12
Negative Factors
Positive Factors
10 8
6.5 6 4
3.4
3.3 1.7
1.5
2 0 Increase in Net Interest Income
Increase in Noninterest Income
Decline in Realized Losses on Securities
Increase in Loan Loss Provisions
Increase in Extraordinary Losses
Increase in Noninterest Expense
Troubled Loans Increased at a Slower Rate in the Second Quarter $ Billions
110
90 Quarterly Change in Noncurrent Loans Quarterly Net Charge-Offs
70
50
30
10
-10 1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Noncurrent Loan Growth Is Outpacing Growth in Reserves Coverage Ratio (Percent)
$ Billions
180
350
Coverage Ratio (Percent) 160 300 140 250 120 200
100
150
80
Loan-Loss Reserves ($ Billions)
60
100 40 50 20
Noncurrent Loans ($ Billions) 0
0 1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Troubled Loans Increased at a Slower Rate in the Second Quarter $ Billions
110
90 Quarterly Change in Noncurrent Loans Quarterly Net Charge-Offs
70
50
30
10
-10 1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Margins Improved Slightly in the Second Quarter Quarterly Net Interest Margin (Percent)
4.5
Assets < $1 Billion 4.0
3.60% 3.5
3.47%
3.0
Assets > $1 Billion
2.5 1
2 3 2005
4
1
2 3 2006
4
1
2 3 2007
4
1
2 3 2008
4
1
2 2009
The Number of "Problem" Institutions Is at a 15-Year High Number of Insured Institutions on the FDIC's "Problem List"
450 416
400 350 305
300 252
250 200 171
150 117 90
100 50
48
50
47
50
53
1
2
3
4
1
61
65
2
3
76
0
2006
2007
4
1
2
3
2008
4
1
2 2009
The Contingent Loss Reserve Represents a Growing Share of Total Reserves $ Billions $60.0
$55.8
DIF Balance Contingent Loss Reserve
$50.0
$46.3 $39.6
$41.5
$42.4
$40.0 $13.0
$45.2 $30.0
$34.6
$10.4
$17.3
$20.0 $28.5
$32.0
$22.4
$10.0 $10.6
$11.7
Jun 08
Sep 08
$0.0 Dec 08
Mar 09
Jun 09
Quarterly Banking Profile Second Quarter 2009
Second Quarter 2009 Report
August 27, 2009
Quarterly Loan-Loss Provisions and Net Operating Revenue* $ Billions
180 Loan-Loss Provisions
160 140 120 100 80 60
Net Operating Revenue
40 20 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2001
2002
2003
2004
2005
2006
* Quarterly net operating revenue = net interest income plus total noninterest income
2007
2008
2009
Quarterly Banking Profile Second Quarter 2009
Second Quarter 2009 Report
August 27, 2009
Quarterly Banking Profile Second Quarter 2009
Second Quarter 2009 Report
August 27, 2009
Credit Card and HELOC Loss Rates Continue to Increase Noncurrent Rate (Percent)
Net Charge-Off Rate (Percent, Quarter Annualized)
10
10
Noncurrent: Credit Cards, (L) Noncurrent: HELOC, (L)
8
8
Net Charge-Offs: Credit Cards, (R) Net Charge-offs: HELOC, (R) 6
6
4
4
2
2
0
0 2
3
2004
4
1
2
3
2005
4
1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Asset Quality Deterioration is Accelerating in Commercial & Industrial Portfolios Noncurrent Rate (Percent)
Net Charge-Off Rate (Percent, Quarter Annualized)
3
3
2
2
Noncurrent: C&I, (L) Net Charge-Offs: C&I, (R)
1
1
0
0 2
3
2004
4
1
2
3
2005
4
1
2
3
2006
4
1
2
3
2007
4
1
2
2008
3
4
1
2
2009
Net Charge-Offs Spiked in 2Q-09; ALLL Coverage Continues to Decline Percent of Average Assets (Percent, Quarter Annualized)
Reserve Coverage Ratio (Percent)
250
3.0
ALLL to Noncurrent Loans, (L) Provision Exp. to Avg. Assets, (R) Net Charge-Offs to Avg. Assets, (R)
200
2.5
2.0 150 1.5 100 1.0
50 0.5
0
0.0 2
3
2004
4
1
2
3
2005
4
1
2
3
2006
4
1
2
3
2007
4
1
2
3
2008
4
1
2
2009
Quarterly Banking Profile Second Quarter 2009
Second Quarter 2009 Report
August 27, 2009
The Contingent Loss Reserve Represents a Growing Share of Total Reserves $ Billions $60.0
$55.8
DIF Balance Contingent Loss Reserve
$50.0
$46.3 $39.6
$41.5
$42.4
$40.0 $13.0
$45.2 $30.0
$34.6
$10.4
$17.3
$20.0 $28.5
$32.0
$22.4
$10.0 $10.6
$11.7
Jun 08
Sep 08
$0.0 Dec 08
Mar 09
Jun 09
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