Letter to Stakeholders 3rd quarter
2005
Don Powell
Chairman
Welcome to our three new FDIC Board of Director members:
Martin Gruenberg, as Vice Chairman of the FDIC;
John Dugan, as Comptroller of the Currency; and
John Reich, as Director of the Office of Thrift Supervision.
Stability
l While financial institutions affected by the hurricanes are facing challenging
conditions, all banks are operating using established sites or temporary facilities.
FDIC provided early assistance to consumers and bankers by opening a 24-hour
hotline (1-877-ASK-FDIC) and a dedicated web page (www.FDIC.gov/hurricane),
which includes up-to-date banking information and answers to questions. The
Call Center has responded to over 10,000 calls to-date.
l Conducted jointly, with the Board of Governors of the Federal Reserve System (FRB),
the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision,
and the Financial Crimes Enforcement Network, a series of outreach events for the
banking industry on the Bank Secrecy Ac t/Anti-Money Laundering (BSA/AML)
Examination Manual released on June 30, 2005. Each outreach event provides
guidance on compliance issues under the BSA/AML Manual, which emphasizes
the banking industry’s responsibility to both establish risk-based policies/procedures
and safeguard operations from money laundering/terrorist financing.
l Reported that insured commercial banks and savings institutions had net income
of $33.1 billion for the second quarter of 2005, the second highest total ever .
l Announced that the BIF increased during the second quarter of 2005 by $270 million
(0.8%) to $35.1 billion while the SAIF increased by $136 million (1.1%) to $12.9
billion. However, insured deposits grew faster than the fund balances, resulting in
a decline in the BIF reserve ratio to 1.26%. The SAIF reserve ratio stood at 1.32%.
l Implemented jointly, with the FRB and the OCC, the Central Data Repository (CDR),
a web-based system to collect, validate, and manage quarterly Call Report data.
Beginning October 1, all financial institutions are required to file their third
quarter 2005 Call Report using the system. The CDR employs a new, flexible data
standard –XBRL–which will enable Call Report data to be shared more easily
and compared more readily with other financial data.
Sound Policy
l Issued jointly, with the FRB and the OCC, the final Community Reinvestment Act
(CRA) rules intended to reduce regulatory burden while making CRA evaluations
more effective in encouraging banks to meet community development needs.
l Proposed an amendment to Part 363 of the FDIC regulations that would relieve
institutions with total assets between $500 million and $1 billion from requirements
for annual internal control assessments and for audit committee members, who
must be outside directors, to be independent of management.
l Launched a summer-long media campaign to raise awareness of the importance
of financial education in Hispanic communities across the nation using the FDIC’ s
free Money Smart financial education program.
l Hosted the 5th Annual Banking Research Conference, focusing on deposit insurance,
international banking, credit and identity theft, and developments in loan pricing
and performance.
Stewardship
l Completed restructuring of the Corporation’s resolutions/receivership management
workforce. A reduction in staff levels was accomplished, in part, by implementation
of a cross training program that will enhance employee readiness and organiza-
tional experience. Additional reductions were realized with the reassignment of
skilled employees into the supervision area.
Our Priorities
Design: FDIC/DOA/CSB/Design and Printing Unit
Our nation has a crisis to respond to and, once again, we will overcome it . . . together.
Hurricanes Katrina and Rita tore through the Gulf Coast swiftly wreaking havoc on life, property,
and the Gulf Coast economy. The FDIC response to these disasters was also swift, as we
worked around the clock with fellow regulators, financial institutions, and the public to make
sure we were doing everything possible to ensure that there was stability and public confi-
dence in the banking system. I remain proud of our outstanding and continuous efforts, both
individually and collectively, in response to this crisis. For more information on FDIC-related
activities, please go to www.FDIC.gov.
Our Key Indices Most Current Datat
t Financial data is unaudited
Q2 2004
7,926
$ 8,387
$ 2,606
$ 34.1
% 1.31
Q2 2005
7,765
$ 9,038
$ 2,777
$ 35.1
% 1.26
Q2 2004
1,166
$ 1,273
$ 927
$ 12.4
% 1.34
Q2 2005
1,116
$ 1,447
$ 980
$ 12.9
% 1.32
Q2 2004
9,092
$ 9,660
$ 3,533
$ 46.5
% 1.32
Q2 2005
8,881
$ 10,485
$ 3,757
$ 48.0
% 1.28
BIF SAIF Both Funds
Updated quarterly
($ billions)
# Insured Inst.
$ Insured Inst.
Insured Deposits
Fund Balances
Reserve Ratios
Insurance
9/30/2004
5,284
1,985
1,629
2,299
467
9/30/2005
5,257
1,871
1,544
2,270
427
YTD
Total Number of FDIC Supervised Institutions
Bank Examinations:
Safety and Soundness
Compliance and CRA
Insurance and Other Applications Approved
Formal and Informal Enforcement Actions
Supervision
Q3 2004
32
$ 276
$ 185
$ 318
Q3 2005
25
$ 180
$ 200
$ 219
Q3 2004
3
$ 327
$ 21
$ 5
Q3 2005
3
$ 295
$ 64
$ 142
Q3 2004
35
$ 603
$ 206
$ 323
Q3 2005
28
$ 475
$ 264
$ 361
BIF SAIF Both Funds
YTD
($ millions)
Total
Receiverships
Assets in
Liquidation
Collections
Dividends Paid
Receiverships
Q2 2005
$ 25
$ 829
$ 307
Q3 2005
$ 42
$ 1,220
$ 547
Q2 2005
$ 3
$ 302
$ 209
Q3 2005
$ 6
$ 447
$ 319
Q2 2005
$ 28
$ 1,131
$ 516
Q3 2005
$ 48
$ 1,667
$ 866
BIF SAIF Both Funds
YTD
($ millions)
Assessment
Income
Interest
Comprehensive
Income
Income
Total
$ 1,179
$ 772
Budget/Expenditures On Board Staff
Ongoing
Operations
$ 1,026
$ 716
($ millions)
Annual Budget
YTD Expended
Recvrship
Funding
$ 75
$ 8
Major
Investment
Funding
$ 78
$ 48
Q3 2005
4,545
Target Y/E
2005
4,751
Resources
2005
Don Powell
Chairman
Welcome to our three new FDIC Board of Director members:
Martin Gruenberg, as Vice Chairman of the FDIC;
John Dugan, as Comptroller of the Currency; and
John Reich, as Director of the Office of Thrift Supervision.
Stability
l While financial institutions affected by the hurricanes are facing challenging
conditions, all banks are operating using established sites or temporary facilities.
FDIC provided early assistance to consumers and bankers by opening a 24-hour
hotline (1-877-ASK-FDIC) and a dedicated web page (www.FDIC.gov/hurricane),
which includes up-to-date banking information and answers to questions. The
Call Center has responded to over 10,000 calls to-date.
l Conducted jointly, with the Board of Governors of the Federal Reserve System (FRB),
the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision,
and the Financial Crimes Enforcement Network, a series of outreach events for the
banking industry on the Bank Secrecy Ac t/Anti-Money Laundering (BSA/AML)
Examination Manual released on June 30, 2005. Each outreach event provides
guidance on compliance issues under the BSA/AML Manual, which emphasizes
the banking industry’s responsibility to both establish risk-based policies/procedures
and safeguard operations from money laundering/terrorist financing.
l Reported that insured commercial banks and savings institutions had net income
of $33.1 billion for the second quarter of 2005, the second highest total ever .
l Announced that the BIF increased during the second quarter of 2005 by $270 million
(0.8%) to $35.1 billion while the SAIF increased by $136 million (1.1%) to $12.9
billion. However, insured deposits grew faster than the fund balances, resulting in
a decline in the BIF reserve ratio to 1.26%. The SAIF reserve ratio stood at 1.32%.
l Implemented jointly, with the FRB and the OCC, the Central Data Repository (CDR),
a web-based system to collect, validate, and manage quarterly Call Report data.
Beginning October 1, all financial institutions are required to file their third
quarter 2005 Call Report using the system. The CDR employs a new, flexible data
standard –XBRL–which will enable Call Report data to be shared more easily
and compared more readily with other financial data.
Sound Policy
l Issued jointly, with the FRB and the OCC, the final Community Reinvestment Act
(CRA) rules intended to reduce regulatory burden while making CRA evaluations
more effective in encouraging banks to meet community development needs.
l Proposed an amendment to Part 363 of the FDIC regulations that would relieve
institutions with total assets between $500 million and $1 billion from requirements
for annual internal control assessments and for audit committee members, who
must be outside directors, to be independent of management.
l Launched a summer-long media campaign to raise awareness of the importance
of financial education in Hispanic communities across the nation using the FDIC’ s
free Money Smart financial education program.
l Hosted the 5th Annual Banking Research Conference, focusing on deposit insurance,
international banking, credit and identity theft, and developments in loan pricing
and performance.
Stewardship
l Completed restructuring of the Corporation’s resolutions/receivership management
workforce. A reduction in staff levels was accomplished, in part, by implementation
of a cross training program that will enhance employee readiness and organiza-
tional experience. Additional reductions were realized with the reassignment of
skilled employees into the supervision area.
Our Priorities
Design: FDIC/DOA/CSB/Design and Printing Unit
Our nation has a crisis to respond to and, once again, we will overcome it . . . together.
Hurricanes Katrina and Rita tore through the Gulf Coast swiftly wreaking havoc on life, property,
and the Gulf Coast economy. The FDIC response to these disasters was also swift, as we
worked around the clock with fellow regulators, financial institutions, and the public to make
sure we were doing everything possible to ensure that there was stability and public confi-
dence in the banking system. I remain proud of our outstanding and continuous efforts, both
individually and collectively, in response to this crisis. For more information on FDIC-related
activities, please go to www.FDIC.gov.
Our Key Indices Most Current Datat
t Financial data is unaudited
Q2 2004
7,926
$ 8,387
$ 2,606
$ 34.1
% 1.31
Q2 2005
7,765
$ 9,038
$ 2,777
$ 35.1
% 1.26
Q2 2004
1,166
$ 1,273
$ 927
$ 12.4
% 1.34
Q2 2005
1,116
$ 1,447
$ 980
$ 12.9
% 1.32
Q2 2004
9,092
$ 9,660
$ 3,533
$ 46.5
% 1.32
Q2 2005
8,881
$ 10,485
$ 3,757
$ 48.0
% 1.28
BIF SAIF Both Funds
Updated quarterly
($ billions)
# Insured Inst.
$ Insured Inst.
Insured Deposits
Fund Balances
Reserve Ratios
Insurance
9/30/2004
5,284
1,985
1,629
2,299
467
9/30/2005
5,257
1,871
1,544
2,270
427
YTD
Total Number of FDIC Supervised Institutions
Bank Examinations:
Safety and Soundness
Compliance and CRA
Insurance and Other Applications Approved
Formal and Informal Enforcement Actions
Supervision
Q3 2004
32
$ 276
$ 185
$ 318
Q3 2005
25
$ 180
$ 200
$ 219
Q3 2004
3
$ 327
$ 21
$ 5
Q3 2005
3
$ 295
$ 64
$ 142
Q3 2004
35
$ 603
$ 206
$ 323
Q3 2005
28
$ 475
$ 264
$ 361
BIF SAIF Both Funds
YTD
($ millions)
Total
Receiverships
Assets in
Liquidation
Collections
Dividends Paid
Receiverships
Q2 2005
$ 25
$ 829
$ 307
Q3 2005
$ 42
$ 1,220
$ 547
Q2 2005
$ 3
$ 302
$ 209
Q3 2005
$ 6
$ 447
$ 319
Q2 2005
$ 28
$ 1,131
$ 516
Q3 2005
$ 48
$ 1,667
$ 866
BIF SAIF Both Funds
YTD
($ millions)
Assessment
Income
Interest
Comprehensive
Income
Income
Total
$ 1,179
$ 772
Budget/Expenditures On Board Staff
Ongoing
Operations
$ 1,026
$ 716
($ millions)
Annual Budget
YTD Expended
Recvrship
Funding
$ 75
$ 8
Major
Investment
Funding
$ 78
$ 48
Q3 2005
4,545
Target Y/E
2005
4,751
Resources