FDIC 2008 Fourth Quarter Report

On April 22, 2009, the FDIC released their Quarterly Banking Profile for the Fourth Quarter of 2008.

  • Banks insured by the FDIC reported $32.1 billion in net losses for the fourth quarter 2008.  This was the first time since 1990 that the banks had a quarterly loss.  In the fourth quarter of 2007 the banking industry earned $575 million.
  • The banking industry’s losses were the result of much larger loan loss provision, trading account losses and write downs of goodwill and other assets
  • The majority of the industry’s losses for the quarter occurred at the largest banks.  Two thirds of all insured banks, representing smaller regional and community banks,  had a profitable fourth quarter.
  • Based on credit market disruptions, the FDIC instituted the Temporary Liquidity Guarantee Program (TLGP) which issues an FDIC guarantee to non-interest bearing deposit accounts and bank senior unsecured debt.  There were 64 banks taking advantage of the TLGP to issue senior unsecured debt totalling $224 billion as of December 31, 2008.
  • 12 banks insured by the FDIC failed in the quarter ending December 31, 2008.
  • Total assets on the problem bank list increased from $115 to $159 billion.
  • The FDIC presently insures over 8,300 banks and thrifts.  The FDIC Deposit Insurance Fund (DIF) decreased during the quarter to $18.8 billion.   The FDIC insures deposits of over $4.7 trillion, resulting in a DIF reserve ratio of .40%.  The DIF ratio is now at its lowest point since mid 1993 when the reserve ratio hit .28%.

In Washington, White House press secretary Robert Gibbs, stated that there was no need to request more funds to rescue the banking industry at the present time, noting that “everyone involved will be looking for banks to raise this through either private means or the selling of some assets that they have or that they control.”

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