Federal Reserve

BULLETIN

Figure 1. Bank profitability, 1985–2009

Series: Return on equity and return on assets
Horizon: 1985 to 2009
Description: Data are plotted as curves. Units are percent.

The return on equity begins at about 11 percent in 1985, dropping to nearly 1 percent by the middle of 1987, then rebounding to about 11.6 percent by 1988. The return on equity drops again to about 7.3 percent in 1989, remaining at that level for about a year. The return on equity then rises every year and reaches about 15.3 percent in 1993. Afterward, the return on equity varies between about 13.5 and 15.5 percent through 2004, falls to about 13 percent in 2005, and then rises to about 13.7 percent in 2006. It then falls to about 9.5 percent in 2007, and continued to fall to about 0.5 percent in 2008, remaining little changed in 2009.

The return on assets begins in 1985 at about 0.7 percent, drops to about less than 0.1 percent by the middle of 1987, and rebounds to about 0.7 percent by 1988. The return on assets then drops to about 0.5 percent in 1989 and remains at that level for about a year. The return on assets rises from about 0.5 percent in 1990 to about 1.2 percent in 1993. The return on assets varies between about 1.2 and 1.4 percent up to 2006, drops to about 1 percent in 2007, falls to less than 0.1 percent in 2008, and remains little changed in 2009.

The curves intersect in 1987 and follow the same path in 2005 through 2009.

NOTE: The data are annual.

SOURCE: Here and in subsequent figures and tables except as noted, Federal Financial Institutions Examination Council, Consolidated Reports of Condition and Income (Call Report).

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Figure 2. Target federal funds rate and usage of Federal Reserve lending facilities, 2002–10

Series: Target federal funds rate and usage of Federal Reserve lending facilities
Horizon: 2002 to 2010
Description: Data are plotted as curves. For target federal funds rate, units are percent; for usage of Federal Reserve lending facilities, units are billions of dollars.

The target federal funds rate starts at 1.75 percent at the beginning of 2002, steps down to reach 1.25 percent at the end of 2002, and then falls to 1 percent at the end of 2003. It stays at that rate until July 2004, when it begins to rise steadily to reach 5.25 percent in July 2006, where it remains through August 2007. The target federal funds rate then trends downward to about 2.25 percent in April 2008 and remains at 2 percent from May 2008 to September 2008. On December 16, 2008, the Federal Open Market Committee established a target range for the federal funds rate of 0 to ¼ percent. This range is represented by a small black rectangle on the chart that begins in December 2008 and extends through April 2010.

The usage of Federal Reserve lending facilities is zero until late 2007. It rises through 2008 and peaks in early 2009 at about $1.5 billion. The usage of Federal Reserve lending facilities falls thereafter and is less than $100 billion in mid-April 2010.

The curves intersect in 2008 and 2010.

NOTE: The data are daily and extend through April 14, 2010. On December 16, 2008, the Federal Open Market Committee established a target range for the federal funds rate of 0 to ¼ percent. The black rectangle represents this range. Usage data are the sum of usage amounts for primary, secondary, and seasonal credit; Term Auction Facility; dollar liquidity swaps; Primary Dealer Credit Facility; Commercial Paper Funding Facility; Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility; and Term Asset-Backed Securities Loan Facility.

SOURCE: For federal funds rate, Federal Reserve Board (www.federalreserve.gov/fomc/fundsrate.htm); for usage of lending facilities, Federal Reserve Board, Statistical Release H.4.1, "Factors Affecting Reserve Balances" (www.federalreserve.gov/releases/h41).

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Figure 3. Indicators for the banking industry, 2001–10 (this figure consists of two panels)

Series: In the top panel, Dow Jones bank index and S&P 500; in the bottom panel, premium on credit default swaps on subordinated debt at selected banking institutions
Horizon: 2001 to 2010
Discussion: Data are plotted as curves. There are two panels. In the top panel, stock price index data, March 2009 = 100. In the bottom panel, units are basis points.

In the top panel, the price for the Dow Jones bank index begins in 2001 at about 335 and moves between about 290 and 350 through September 2003, when it begins a steady climb to about 430 by the end of 2004, fluctuates between 390 and about 430 until about March 2006, and increases steadily to about 480 by May 2007. Then the price for the Dow Jones bank index decreases steadily to reach a low of 100 in March 2009, and rebounds to about 200 by March 2010.

Also, in the top panel, the price for the S&P 500 begins in 2001 at about 180, declines, on balance, to drop to about 110 by February 2003. The price for the S&P 500 then rises, on balance, to a high of more than 200 in about mid-2007, falls to a low of about 100 by about March 2009, and rebounds to about 150 a year later.

The curves intersect in 2009.

In the bottom panel, the premium on credit default swaps on subordinated debt at selected banking institutions starts in the beginning of 2001 at about 75 basis points, drifts down about 15 basis points in the next two months but stays within the range of 30 to 60 basis points through 2002. Over the next five years, it drifts down, on balance, to below 15 basis points mid-2007. The premium then rises steeply, to about 120 basis points by early 2008. In May 2008, it falls to about 70 basis points during one week, but spikes to about 165 basis points in certain weeks in October and November 2008. After reaching a peak of about 250 basis points in April 2009 amidst significant volatility, the premium falls to about 80 basis points by mid-April 2010.

NOTE: The stock price index data are monthly and extend through March 2010. The credit default swap (CDS) data are weekly and extend through April 14, 2010; median spread of all available quotes.

SOURCE: For stock price indexes, Standard & Poor's and Dow Jones; for premium on CDS, Markit.

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Figure 4: Composition of assets at commercial banks, 2006–09

Series: There are four bars stacked for each time period, representing the share of assets held in securities, loans, cash and equivalents, and other assets (which consist of loans to banks, trading assets (excluding securities), and other assets not elsewhere classified). As a result, each set of stacked bars adds up to 100. The curve represents total assets.
Horizon: 2006 to 2009:Q4
Description: Data are plotted as bars and curves. For the bars, units are percent; for the curve, units are billions of dollars. The data are plotted annually in 2006 and 2007, semiannually in 2008, and quarterly in 2009.

In all periods, loans comprise the majority of assets, but the loan share declines from 59 percent in 2006 to 55 percent at the end of 2009. The share of assets in cash rises from 4 percent in 2006 to 8 percent by the end of 2009. The share of assets in securities begins at 21 percent in 2006 and 2007, declines a bit to 19 percent in the second half of 2008 and the first quarter of 2009, and then rises to 22 percent by the second half of 2009. Finally, the share of assets in other assets besides cash, loans, or securities begins at 16 percent in 2006 and 2007; rises to 18 percent in 2009; but then falls to 15 percent by the second half of 2009.

The curve for total assets begins at about $9.2 trillion in the first quarter of 2006, rises steadily to about $11.4 trillion in the first quarter of 2008, dips to about $11.3 trillion in the second quarter of 2008, and then rises to a peak of about $12.2 trillion in the fourth quarter of 2008. Assets then decline over 2009, equaling about $11.8 trillion at year-end.

NOTE: Other assets consist of loans to banks, trading assets (excluding securities), and other assets not elsewhere classified.

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Figure 5. Change in commercial and industrial loans, 1986–2009

Series: Change in commercial and industrial loans
Horizon: 1986 to 2009
Description: The data are plotted as a curve.

From 1986 to 1990, growth of commercial and industrial loans outstanding mostly fluctuates in a narrow band between about negative 2 percent and positive 4 percent. The growth rate falls to about negative 9 percent in late 1991 and early 1992, and then increases steadily until reaching a range of about 8 to 13 percent until the end of 2000. The growth rate then falls beginning in the first quarter of 2001, reaching about negative 9 percent in the second and third quarters of 2002. The growth rate then rises again and stays within a range of about 11 to 13 percent from the second quarter of 2005 to the second quarter of 2007. In the last two quarters of 2007 and the first quarter of 2009, the growth rate jumps to a range of about 18 to 20 percent, then falls steeply and continuously until reaching about negative 18 percent in the fourth quarter of 2009.

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Figure 6. Financing gap and net equity retirement at nonfarm nonfinancial corporations, 1990–2009

Series: Financing gap and net equity retirement
Horizon: 1990 to 2009
Description: Data are plotted as curves. Units are billions of dollars.

The financing gap curve ranges between about $20 billion and about $80 billion from 1990 to 1996 and then rises until reaching a peak of about $310 billion in 2000. It then falls to about negative $20 billion in mid-2004, rebounds to about positive $40 billion in 2005, then falls to about negative $170 billion by early 2006. The financing gap then begins to trend higher, reaching a peak of about $232 billion before declining to about $170 billion by year-end 2008.

The net equity retirement curve roughly follows the financing gap curve between the years 1990 to 1998, with the exception of falling below zero in the 1992 to 1995 period. However, by 1999 it reaches about $260 billion before falling to about $35 billion in 2000. Net equity retirement then rises to about $150 billion in 2001 to 2002 before dropping to the $30 billion to $65 billion range between 2002 and 2005. Beginning in 2005, net equity retirement has a steady but steep increase until reaching more than $750 billion in mid-2007, followed by a steep decline to about $65 billion by the end of 2009.

The curves generally follow the same path until mid-2004.

NOTE: The data are four-quarter moving averages. The financing gap is the difference between capital expenditures and internally generated funds. Net equity retirement consists of funds used to repurchase equity less funds raised in equity markets.

SOURCE: Federal Reserve Board, Statistical Release Z.1, "Flow of Funds Accounts of the United States," table F.102 (www.federalreserve.gov/releases/z1).

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Figure 7. Selected components of net financing for nonfinancial businesses, 2005–09

Series: Four bars are stacked for each time period, representing the components of financing held in commercial paper, bonds, commercial and industrial loans, and commercial mortgages. Total net financing for nonfinancial businesses is plotted as a curve.
Horizon: 2005 to 2009
Description: The data are plotted as a curve and as bars. Units are billions of dollars, monthly rate. The data for the components except bonds are seasonally adjusted.

In 2005, net financing began at about $34 billion, rose to about $67 billion in 2007, and fell to negative $7 billion in 2009.

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Figure 8. Changes in demand and supply conditions at selected banks for commercial and industrial loans to large and middle-market firms, 1990–2009 (this figure consists of two panels)

Series: Net percentage of bank reporting stronger demand (series begins with the November 1991 survey) and net percentage of banks reporting tighter standards (series begins with the May 1990 survey)
Horizon: 1990 to 2009
Description: Data are plotted as curves. There are two panels. Units are percent.

In the top panel, the net percentage of banks reporting stronger demand begins in late 1991 at about negative 30 percent. The generally volatile series then moves up, on balance, to about 40 percent in 1994, moves down to about negative 3 percent in 1995, then moves in a range of between about negative 9 percent to about 29 percent through the end of 1999, when it registers about zero percent. It falls, on balance, to a low of about negative 70 percent in 2001, rises to about 45 percent in 2005, and drops to about 16 percent in early 2006. The series remains negative or zero for 2007 and early 2008, drops to about negative 60 percent at the end of 2008, and rises through 2009 but remains below about negative 20 percent at year-end.

In the bottom panel, the net percentage of banks reporting tighter standards begins at almost 60 percent in mid-1990, drops to reach about negative 20 percent in mid-1993, and generally remains negative, but a little less so, through mid-1998. It spikes at the end of 1998 to about 36 percent, then drops back to about 7 percent in 1999, and generally holds there for several quarters. In early 2000, it begins climbing to reach nearly 60 percent in early 2001, then starts dropping to reach about negative 25 percent in mid-2005. It then rises to about zero percent by the end of 2006, and continues to steadily rise in 2007 and 2008, with a value of about 83 percent in the third quarter of 2008. The series then begins dropping in the fourth quarter of 2008 and reaches just below zero in the fourth quarter of 2009.

NOTE: The data are drawn from a survey generally conducted four times per year; the last observation is from the January 2010 survey, which covers 2009:Q4. Net percentage is the percentage of banks reporting an increase in demand or a tightening of standards less, in each case, the percentage reporting the opposite. The definition for firm size suggested for, and generally used by, survey respondents is that large and middle-market firms have annual sales of $50 million or more.

1. 1. Series begins with the November 1991 survey.
2. 2. Series begins with the May 1990 survey.

SOURCE: Federal Reserve Board, Senior Loan Officer Opinion Survey on Bank Lending Practices (www.federalreserve.gov/boarddocs/snloansurvey).

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Figure 9. Delinquency and charge-off rates for loans to businesses, by type of loan, 1990–2009 (this figure consists of two panels)

Series: In the top panel, delinquencies, commercial real estate and commercial and industrial (C&I) and in the bottom panel, net charge-offs, commercial real estate and C&I.
Horizon: 1990 to 2009
Description: Data are plotted as curves. Units are percent. There are two panels.

In the top panel, the delinquency rate for commercial real estate loans starts in 1991 at about 12 percent, steadily declines to about 2 percent in 1998, and recedes further between 2002 and 2006, reaching a low of about 1 percent in early 2006. Beginning in the second half of 2006, it rises consistently to reach nearly 9 percent at the end of 2009.

The delinquency rate for commercial and industrial loans starts in 1990 at about 5 percent, edges up to about 6 percent in 1991, and then declines smoothly to about 2 percent in 1994. It remains around 2 percent or a little less through early 2000 but begins to rise in mid-2000, reaching about 4 percent in 2002. The rate declines between 2003 and early 2007, reaching about 1.2 percent toward the end of that period, and it then turns up and ends 2009 at about 4.5 percent.

The curves intersect in early 1999 and late 2006.

In the bottom panel, the net charge-off rate on commercial real estate loans starts in 1991 and fluctuates between about 1.8 percent and 2.7 percent until year-end 1992; it then shrinks steadily to about zero percent in 1997 and remains within a band of zero to about 0.2 percent until mid-2007. It starts to climb steeply and ends 2009 just more than 3 percent. The net charge-off rate on C&I loans starts in 1990 at about 1.3 percent, rises to about 2 percent by year-end 1991, and falls generally to about 0.2 percent in late 1994, where it roughly stays until late 1997. It trends up between 1998 and mid-2001, then jumps to about 2.2 percent in late 2001, and remains more than 1.5 percent until early 2003. It generally falls to about 0.25 percent in late 2005 and early 2006 and then rises steadily to about 2.6 percent in the third quarter of 2009. The series dips slightly in the last quarter of 2009 to a bit less than 2.5 percent.

The curves intersect in late 1995 and early 2008; the curves generally follow the same path through 2009.

NOTE: The data are quarterly and seasonally adjusted; the data for commercial real estate begin in 1991. Delinquent loans are loans that are not accruing interest and those that are accruing interest but are more than 30 days past due. The delinquency rate is the end-of-period level of delinquent loans divided by the end-of-period level of outstanding loans. The net charge-off rate is the annualized amount of charge-offs over the period, net of recoveries, divided by the average level of outstanding loans over the period. For the computation of these rates, commercial real estate loans exclude loans not secured by real estate (see table 1, note 2). C&I is commercial and industrial.

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Figure 10. Gross issuance of selected mortgage- and asset-backed securities, 2003–09

Series: Commercial mortgage-backed securities (CMBS) and consumer asset-backed securities (ABS) Horizon: 2003 to 2009
Description: Data are plotted as bars. Units are billions of dollars, annual rate.

The issuance of CMBS is about $78 billion in 2003, rises to a peak in 2007 of $230 billion, and then drops to about $12 billion in 2008 and $1.3 billion in 2009. The issuance of consumer ABS is about $213 billion in 2003, drops slightly in 2004, and then moves within a range of about $232 billion to $234 billion in 2005 through 2007. It falls to about $128 billion in both 2008 and 2009.

NOTE: CMBS are commercial mortgage-backed securities; consumer ABS (asset-backed securities) are securities backed by credit card loans, nonrevolving consumer loans, and auto loans.

SOURCE: For CMBS, Commercial Mortgage Alert; for ABS, Inside MBS & ABS and Merrill Lynch.

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Figure 11: Changes in demand and supply conditions at selected banks for commercial real estate loans, 1996–2009 (this figure consists of two panels)

Series: In the top panel, net percentage of banks reporting stronger demand and in the bottom panel, net percentage of banks reporting tighter standards.
Horizon: 1996 to 2009
Description: Data are plotted as curves. There are two panels. Units are percent.

In the top panel, the net percentage of banks reporting stronger demand begins in 1996 at about negative 2 percent, then, on balance, it rises to about 48 percent by mid-1998, falls to about negative 50 percent by the end of 2001, rises to about 25 percent by mid-2004, and stays at about that level through late 2005. It falls to about 4 percent by early 2006, fluctuates around negative 40 percent in 2007 and the first half of 2008, and then falls until reaching about negative 65 percent in the first quarter of 2009. It rebounds thereafter to reach about negative 25 percent in the last quarter of 2009.

In the bottom panel, the net percentage of banks reporting tighter standards begins in 1996 at about 13 percent, dropping to about negative 10 percent by late 1997, spiking to about 46 percent at the end of 1998, and falling to about 5 percent in mid-1999. It rises fairly steadily to about 45 percent in early 2001, remaining at about that level through early 2002, declining steadily to a low of negative 25 percent in early 2005, moving within a range of about 25 to 35 percent through mid-2007, and rising to about 50 percent in the third quarter of 2007. For the next several quarters, the series fluctuates between about 79 and 87 percent, before dropping over 2009 to reach about 25 percent in the fourth quarter.

NOTE: See figure 8, general note and source note.

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Figure 12: Delinquency and charge-off rates for construction and land development loans, by type of loan, 2007–09 (this figure consists of two panels)

Series: In the top panel, delinquencies, residential and other (other consists of other construction loans and all other land development and other land loans) and in the bottom panel, net charge-offs, residential and other.
Horizon: 2007 to 2009
Description: Data are plotted as curves. There are two panels. Units are percent.

In the top panel, delinquencies on residential construction and land development loans begin in the first quarter of 2007 at about 2.6 percent. They rise steadily to about 7.4 percent in the fourth quarter of 2007, surpass about 17 percent by the end of the fourth quarter in 2008, and end 2009 at about 28.5 percent. Delinquencies on other types of construction and land development loans begin in the first quarter of 2007 at about 1.7 percent, and rise steadily, to a little more than 10 percent in the fourth quarter of 2008 and about 15.5 percent at the end of 2009.

In the bottom panel, residential net charge-offs start at about 0.1 percent in the first quarter of 2007, rise to about 1.2 percent in the fourth quarter of 2007, to 7.7 percent in the fourth quarter of 2008. After dipping in the first quarter of 2009, the series ends at 10.3 percent in the fourth quarter of 2009. Other net charge-offs rise from about 0.05 percent in the first quarter of 2007, to about 0.75 percent in the fourth quarter of 2007 and first quarter of 2008. The curve moves up to nearly 4.8 percent in the fourth quarter of 2008, dips in the first quarter of 2009, but then rises and ends the year at about 7.6 percent.

The curves follow the same path until mid-2007.

NOTE: The data are quarterly and are available since the series began in 2007:Q1. For definitions of delinquencies and net charge-offs, see the note for figure 9. Other consists of other construction loans and all other land development and other land loans.

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Figure 13: Change in commercial real estate loans, by major components, 1990–2009

Series: Multifamily residential, construction and land development, and nonfarm development
Horizon: 1990 to 2009
Description: Data are plotted as curves. Units are percent.

The annual change in construction and land development loans is about negative 7 percent in 1990; the change drops to about negative 25 percent in 1992, rises steadily to reach about 25 percent in 1999, and then is at about 20 percent over the next two years. It drops to about 6 percent by 2002 and then rises steadily to about 35 percent in 2005; it then decreases to about 27 percent in 2006, to about 12 percent in 2007, and then drops to about negative 6 percent in 2008 and negative 22 percent in 2009.

The annual change in multifamily residential loans is about 5 percent in 1990 and then moves in a range between about 5 and 15 percent through 1998. In 1999, it spikes to about 22 percent, falling to about 6 percent in 2001, holding at around 10 percent through 2005, and dropping to about 4 percent in 2007, and continuing to trend downward to a final value of about 6 percent in 2008 and 4.5 percent in 2009.

The annual change in nonfarm nonresidential loans is about 10 percent in 1990; it falls to about 5 percent in 1991, rises gradually, on balance, to about 12 percent in 1999, slips lower to about 10 percent for the period from 2001 to 2006, and then reaches values of about 6.5 percent in 2007, about 10 percent in 2008, and finally drops to about 3 percent in 2009.

The multifamily residential and nonfarm nonresidential curves generally follow the same path. The construction and land development curve intersects with the multifamily curve in 1995, 2002, 2003, and 2007. The construction curve intersects with the nonfarm curve in 1994, late 2001, 2002, and 2007.

NOTE: The data are annual and adjusted for major structure events.

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Figure 14: Indicators of household financial stress, 1993–2009 (this figure consists of two panels)

Series: In the top panel, financial obligations ratio and in the bottom panel, household bankruptcy panels.
Horizon: 1993 to 2009
Description: Data are plotted as curves. There are two panels. Units are percent in the top panel and per 100,000 persons in the bottom column.

In the top panel, the financial obligations ratio for households starts in 1993 at about 16.3 percent, generally rises to more than 17 percent in 1997, remains at about that level through 2000, and then increases to more than 18 percent in late 2001. It edges down to about 18 percent by late 2004, rises fairly steadily to about 18.8 percent at year-end 2007, then drops fairly steadily to reach about 17.5 percent in the fourth quarter of 2009.

In the bottom panel, the number of bankruptcy filings per 100,000 persons starts in 1995 at about 300, generally rises to about 500 by early 1998, trends down to about 400 through the end of 2000, moves up to about 520 in early 2001, and stays at around that level through early 2005. The ratio jumps in the first half of 2005 to about 650 and then spikes to about 900 at year-end 2005. It tumbles to about 150 in early 2006 and then begins a steady climb to almost 500 before leveling off in the second half of 2009 at about 450.

NOTE: The data are quarterly. The financial obligations ratio is an estimate of debt payments and recurring obligations as a percentage of disposable personal income; debt payments and recurring obligations consist of required payments on outstanding mortgage debt, consumer debt, auto leases, rent, homeowner's insurance, and property taxes. The series shown for bankruptcy filings begins in 1995:Q1 and is seasonally adjusted.

SOURCE: For financial obligations ratio, Federal Reserve Board (www.federalreserve.gov/releases/housedebt); for bankruptcy filings, staff calculations based on data from Lundquist Consulting.

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Figure 15: Change in prices of existing single-family homes, 1990–2009

Series: LoanPerformance (LP) price index and Federal Housing Finance Agency (FHFA)
Horizon: 1990 to 2009
Description: Data are plotted as curves. Units are percent.

The LP price index begins in 1990 with a value of about 4 percent, and moves within a range of zero to 5 percent until the third quarter of 1998. The series rises to a peak of nearly 16 percent in the third quarter of 2005, then drops sharply to a low of about negative 19.5 percent in the first quarter of 2009. The series then rebounds to about negative 5 percent by the fourth quarter of 2009.

The FHFA index begins in 1990 with a value of about 5 percent, dropping at the end of the year to about 1 percent, then rising, on balance, to a peak of about 10 percent in 2005, and falling, on balance, to about negative 8 percent by year-end 2008. The series then rebounds over 2009 and reaches negative 1.3 percent in the fourth quarter.

The curves generally follow the same path until 1997, then separate except for intersecting in 2006.

NOTE: The data are quarterly and extend through 2009:Q4; changes are from one year earlier. The LP price index includes purchase transactions only. For 1990, the FHFA index (formerly calculated by the Office of Federal Housing Enterprise Oversight) includes appraisals associated with mortgage refinancings; beginning in 1991, it includes purchase transactions only.

SOURCE: For LP, LoanPerformance, a division of First American CoreLogic; for FHFA, Federal Housing Finance Agency.

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Figure 16. Delinquency and charge-off rates for residential real estate loans at commercial banks, by type of loan, 1991–2009 (this figure consists of two panels)

Series: In the top panel, delinquencies, revolving home equity and closed-end mortgages and in the bottom panel, net charge-offs, revolving home equity and closed-end mortgages
Horizon: 1991 to 2009
Description: Data are plotted as curves. There are two panels. Units are percent.

In the top panel, the delinquency rate on revolving home equity loans starts in 1991 just below 2 percent, moves down fairly consistently (interrupted only by slight increases in 1995-96 and 2000-01) to about 0.5 percent in 2004, and then rises steadily to about 1.7 percent by the end of 2007 and to about 3.3 percent in the second quarter of 2009, and then declines slightly to about 3 percent at the end of 2009.

Also in the top panel, the delinquency rate on closed-end mortgages begins in 1991 at about 3.5 percent, falls on balance to about 2.1 percent in 1995, and remains near that level until 2001, when it rises on balance to about 2.5 percent by the end of the year. It declines over the next several years to around 1.8 percent in late 2004, rises some through 2006, and then begins to rise rapidly in 2007 and throughout 2008. It ended 2008 at about 7.5 percent and 2009 at about 13 percent.

In the bottom panel, the net charge-off rate for revolving home equity loans starts in 1991 at about 0.15 percent, rises on balance to about 0.20 percent in mid-1993, and spikes to 0.45 percent in late 1993. The rate drops to about 0.3 percent in early 1994 and ends that year around 0.2 percent. It moves a little higher, on balance, through mid-1996 before declining to about 0.15 percent in 1997, a level around which the rate fluctuates through mid-2000. The rate moves up to about 0.35 percent in late 2001, falls to about 0.08 percent in late 2004, and then rises over 2005 and 2006 to more than 0.2 percent before surging to almost 0.7 percent in the fourth quarter of 2007 and to nearly 2 percent by the fourth quarter of 2008. In 2009, the series stabilized at a little more than 3 percent.

The net charge-off rate for closed-end mortgages begins in 1991 at about 0.2 percent, rises in 1992 to about 0.3 percent, falls on balance to about 0.08 percent in 1998, rises in 2001 to about 0.15, and then spikes in the fourth quarter of 2001 to 0.57 percent. The spike mostly reverses early in 2002, and the rate falls in 2003 to about 0.11 percent. It rises in late 2003 to about 0.35 percent but falls by 2005 to about 0.04 percent; it edges higher in 2006 and climbs in 2007 to about 0.37 percent, in 2008 to about 1.5 percent, and in 2009 to about 2.5 percent.

In the bottom panel, the curves generally follow the same path but separate after 2007.

NOTE: The data are quarterly and seasonally adjusted. For definitions of delinquencies and net charge-offs, see the note for figure 9.

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Figure 17. Rate of serious delinquency on residential mortgages, by type of mortgage and type of interest rate, 2000–10

The rate of serious delinquency on variable-rate subprime residential mortgages starts in October 2000 at about 8.5 percent and increases on balance to about 10.5 percent in early 2002 before declining on balance to about 5.5 percent in early 2005. The rate moves up significantly over the next two years to about 12 percent in early 2007. It levels off briefly, and then begins a steep, steady climb, to about 22 percent by year-end 2007, 36 percent by the end of January 2009, and 47 percent at the end of January 2010.

The rate of serious delinquency on fixed-rate subprime residential mortgages starts in October 2000 at about 6.0 percent, rises on balance to about 8.7 percent in early 2002, declines on balance to about 5.5 percent by mid-2004, and remains generally at that level through March 2007; it then climbs to about 8 percent by year-end 2007, to about 12.6 percent at year-end 2008, and to nearly 21 percent by the end of January 2010.

The rate of serious delinquency on variable-rate prime residential mortgages starts at about 1.5 percent in October 2000, remains within a range of about 0.5 percent to 2 percent until the beginning of 2007 when it begins to climb appreciably to about 16 percent by the end of January 2010.

The rate of serious delinquency on fixed-rate prime residential mortgages starts at just under 1 percent in October 2000, and remains within the range of 0.8 percent to 1.2 percent until the beginning of 2008, at which point it begins to climb slowly to about 3 percent by the end of January 2009 and 5.5 percent by the end of January 2010.

The curves generally follow the same path except after mid-2005 for the subprime curves and late 2006 for the prime curves.

NOTE: The data are monthly and extend through January 2010. Seriously delinquent loans are 90 days or more past due or in foreclosure. The prime mortgage data are representative of all residential mortgages, not just those held by commercial banks. The subprime mortgage data cover only securitized loans.

SOURCE: For prime mortgages, McDash Analytics; for subprime mortgages, LoanPerformance, a division of First American CoreLogic.

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Figure 18. Delinquency and charge-off rates for loans to households, by type of loan, 1990–2009 (this figure consists of two panels)

Series: In the top panel, delinquencies, credit card and other consumer and in the bottom panel, net charge offs, credit card and other consumer
Horizon: 1990 to 2009
Description: Data are plotted as curves. There are two panels. Units are percent.

In the top panel, the delinquency rate on credit card loans starts in 1991 at about 5.2 percent, falls steadily to about 3.2 percent in mid-1994, rises continuously to about 4.7 percent by early 1997, stays at about that level through early 2003, falls on balance to about 3.5 percent by the end of 2005, and then rises on balance over the next two years to about 4.6 percent by year-end 2007 and just more than 5.5 percent by year-end 2008. The series leveled off at about 6.5 percent in 2009.

Also in the top panel, the delinquency rate on other consumer loans starts in 1991 at about 3.5 percent, falls to about 2.4 percent by mid-1994, rises to about 3 percent by mid-1996, holds at about that level through the end of 2001, generally declines to about 2.1 percent in mid-2005, holds at about that level through mid-2006, then edges up to about 2.7 percent by the end of 2007 and about 3.2 percent by the end of 2008. The series leveled off at about 3.5 percent in 2009.

In the bottom panel, the net charge-off rate on credit card loans begins in 1990 at about 3.2 percent, rises to about 5 percent in mid-1992, generally falls to about 3 percent by mid-1994, generally holds there until about mid-1995, rises almost continuously to about 5.5 percent in late 1997, generally declines to about 4.2 percent in mid-2000, moves up moderately in 2001, spikes to about 7.7 percent by early 2002, fluctuates between 5 and 6 percent for the rest of 2002 and 2003, falls to about 4.2 percent in mid-2005, spikes to about 5.9 percent at the end of 2005, drops to around 3 percent in early 2006, and then rises on balance to about 4.2 percent in the fourth quarter of 2007 and just more than 6 percent in the fourth quarter of 2008. The series reached a peak of about 10.2 percent in 2009 before dropping to about 9.5 percent in the fourth quarter.

The net charge-off rate on other consumer loans begins in 1990 at about 1 percent, declines to about 0.5 percent by mid-1994, rises to about 1 percent by about mid-1997, holds at about that level through mid-2000, generally rises to about 1.5 percent by late 2001, holds at about that level through late 2004, spikes to 2 percent in the second half of 2005, falls to around 1 percent by the end of 2005, and rises steadily over the next three years to about 2.8 percent in the fourth quarter of 2008. The series reached a peak of 3.2 percent at the end of the second quarter of 2009 and then fell a bit to about 2.7 percent at the end of the fourth quarter.

NOTE: The data are quarterly and seasonally adjusted; data for delinquencies begin in 1991. For definitions of delinquencies and net charge-offs, see the note for figure 9.

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Figure 19. Changes in supply conditions at selected banks for consumer lending and for consumer installment loans, 1996–2009 (this figure consists of two panels)

Series: In the top panel, net percentage of banks reporting higher standards for consumer lending, credit card loans and other consumer loans and in the bottom panel, net percentage of banks reporting increased willingness to make consumer installment loans
Horizon: 1996 to 2009
Description: Data are plotted as curves. There are two panels. Units are percent.

In the top panel, the curve for credit card loans begins in 1996 at about 25 percent, rises to reach about 50 percent in late 1996, and declines, on balance, to reach about negative 3 percent in late 2000. It rises to reach 20 percent by 2001 and then moves in a range of between 10 and 20 percent through mid-2003. It declines, on balance, to about negative 8 percent in mid-2005 and then fluctuates between positive and negative 5 percent through early 2007, when it drops to negative 11 percent, reverses, and begins to trend sharply up. It peaks at nearly 67 percent in the second quarter of 2008, is flat for the next three quarters at about 58 percent, and then drops over 2009 to reach 3 percent in the fourth quarter.

The curve for other consumer loans begins in the first quarter of 1996 at about 15 percent, rises to a peak of about 25 percent in late 1996, then declines, on balance, to about zero in the third quarter of 1999. It rises to reach about 19 percent in early 2001, then moves in a range of between about 10 and 20 percent through mid-2003, when it declines to about 2 percent. Continuing this downward trend, it declines, on balance, to reach negative 10 percent in mid-2005; it rises to zero in early 2006, moving in a range between zero and negative 5 percent through early 2007 and rising steeply, to peak at about 67 percent in mid-2008, and then falls until reaching 2 percent in the fourth quarter of 2009.

The curves in the upper panel generally follow the same path from mid-2009 to 2010.

In the bottom panel, the net percentage of banks reporting increased willingness to make consumer installment loans begins below zero in 1996 with a minimum of negative 6 percent in the second quarter of 1996, remains positive from 1997 to 1999 with a peak of 15 percent in the first quarter of 1999, fluctuates around zero in 2000 and 2001, and finally returns to positive values from 2002 to 2006, with a peak of 21 percent in the second quarter of 2005. The series then declines steeply over 2007 and reaches a minimum of negative 47 percent in the third quarter of 2008. The series climbs very sharply in late 2008 and 2009, to about negative 6 percent over the first half of 2009, and finally ends the fourth quarter of 2009 at about 10 percent.

NOTE: See figure 8, general note and source note.

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Figure 20. Change in unused bank loan commitments to businesses and households, 1990–2009

Series: Total (consisting of unused commitments relating to credit card lines; revolving, open-end lines secured by one- to four-family residential properties; commercial real estate, construction, and land development loans; securities underwriting; and "other") and commercial, real estate, construction, and land development loans
Horizon: 1990 to 2009
Description: Data are plotted as curves. Units are percent, annual rate.

The change in total unused bank loan commitments begins in 1990 at about 20 percent, drops to about negative 2 percent in the third quarter of 1990, then rebounds to just more than 1 percent by the end of the year. From 1991 through 1993, the change in total unused commitments trends up, on balance, reaching a peak of almost 27 percent in the first quarter of 1995. It trends down, falling to about negative 3 percent in the second quarter of 1999, moves up to about 18 percent by the third quarter of 2000, down to about 1 percent by the first quarter of 2002, moves within a range of about 3 to 9 percent, and then drops to about negative 8 percent by year-end 2003. From that point, the series moves within a range of about 2 to 12 percent in 2004, then drops to about negative 5 percent in the first quarter of 2005. The change in total unused bank loan commitments then moves in a range of about 9 to 16 percent until year-end 2007, when it drops to near zero, continues to fall to about negative 3 percent in the first quarter of 2008, and then falls sharply to about negative 32 percent by year-end 2008. The series rebounds somewhat over 2009, reaching about 10 percent at the end of the fourth quarter.

The change in unused bank loan commitments for commercial real estate, construction, and land development loans begins in 1990 at about negative 66 percent, trends mostly upward, but remains negative, with the exception of the first quarter of 1991 and the third quarter of 1992 until the beginning of 1993. It peaks in the first quarter of 1994 at about 39 percent, then begins to move downward again, bottoming at about negative 4 percent in the first quarter of 1995. It then moves within a range of about 7 to 27 percent until falling below zero in the middle of 1999. The change in unused bank loan commitments for commercial real estate, construction, and land development loans moves within a broad range of about negative 13 percent to positive 22 percent until the beginning of 2004, then it moves sharply up to a peak of about 43 percent at the end of 2004, falls to about 18 percent by the beginning of 2005, increases to about 37 percent in the second quarter of 2005. The series then begins to trend downward, becoming negative in the third quarter of 2007, reaching a local minimum in the first quarter of 2009 at about negative 56 percent, and then rebounds somewhat to about negative 43 percent by the fourth quarter of 2009.

The curves generally follow the same path, separating after early 2006.

NOTE: The data, which are quarterly, begin in 1990:Q2 and are not seasonally adjusted. The total consists of unused commitments relating to credit card lines; revolving, open-end lines secured by one- to four-family residential properties; commercial real estate, construction, and land development loans; securities underwriting; and "other."

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Figure 21. Notional amounts of credit derivatives for which banks were beneficiaries or guarantors, 2000–09

Series: Beneficiary and guarantor
Horizon: 2000 to 2009
Description: Data are plotted as curves. Units are trillions of dollars.

The amount for which banks were beneficiaries begins in 2000 at about $0.2 trillion and rises gradually through the end of 2003 to reach about $0.5 trillion. It then increases rapidly over the next three years to reach about $4.5 trillion in 2006, with a dip of about $0.5 trillion after the end of 2005; it reaches $8 trillion by the end of 2007. The series then fluctuates between $8.0 and $8.4 trillion over 2008 and 2009 before rising to $10.4 in the fourth quarter of 2009.

The amount for which banks were guarantors begins in 2000 at about $0.15 trillion and rises gradually through the end of 2003 to reach about $0.5 trillion. It then increases rapidly to reach about $4.5 trillion by the end of 2006 and nearly $8 trillion by the end of 2007. The data levels off between $7.0 and $8.0 trillion over 2008 and 2009 before rising to $10.1 trillion in the fourth quarter of 2009.

The curves generally follow the same path throughout the horizon.

NOTE: The data are quarterly.

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Figure 22: Selected domestic liabilities at banks as a proportion of their total domestic liabilities, 1990–2009

Series: Savings deposits, small time deposits, and transaction deposits
Horizon: 1990 to 2009
Description: Data are plotted as curves. Units are percent.

Savings deposits as a proportion of total domestic liabilities starts in 1990 at about 21 percent, increases to about 29 percent by the beginning of 1993, declines to about 25 percent by the beginning of 1995, increases, on balance, to about 40 percent in 2004, declines to about 34 percent by year-end 2008, and then rises to reach about 41 percent by year-end 2009.

Small time deposits in 1990 start at about 27 percent of banks' total domestic liabilities. They increase to about 29 percent in 1991, and then trend downward, on balance, to about 11 percent by the end of 2004. They rise slightly to a local peak of about 13.6 percent in the first quarter of 2009, and then fall to about 12 percent at year end 2009.

Banks' transaction deposits as a proportion of their total domestic liabilities are about 8 percent in 1990. They rise, on balance, to a peak of about 11 percent by the end of 1993, begin to decline, to a low of about 2.1 percent in the fourth quarter of 2008, and then rise slightly, to end 2009 at about 2.8 percent.

The curves for savings deposits and small time deposits intersect in 1992.

NOTE: The data are quarterly. Savings deposits include money market deposit accounts.

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Figure 23: Net flows into money market mutual funds and deposits at commercial banks, 2007–09

Series: Money market mutual funds and deposits
Horizon: 2007 to 2009
Description: Data are plotted as bars. Units are billions of dollars.

The net flows to money market mutual funds are positive and below about $100 billion in first two quarters of 2007, rise to more than about $250 billion over the next three quarters. This series then dips below zero in the second quarter of 2008 before spiking in the fourth quarter of 2008 to about $400 billion. The series then falls to about $10 billion in the first quarter of 2009, reaches a minimum of about negative $177 billion in the third quarter of 2009, and then rises to about $90 billion in the fourth quarter of 2009.

The net flows of deposits to commercial banks ranges between about $100 and $200 billion in 2007 and the first quarter of 2008; the series then falls to about $40 billion in the second quarter of 2008, jumps to about $282 billion in the third quarter, and then falls to about negative $93 billion in the fourth quarter. In 2009, the net flows are positive, with about $68 billion in the first quarter, $182 billion in the second, and about $30 billion in each of the third and fourth quarters.

NOTE: The data are aggregated from weekly to quarterly frequency.

SOURCE: For money market mutual funds, iMoneyNet; for deposits, Federal Reserve Board, Statistical Release H.8, "Assets and Liabilities of Commercial Banks in the United States" (www.federalreserve.gov/releases/h8).

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Figure 24. Capital transfers to commercial banks from parent bank holding companies, 1990–2009

Series: Capital transfers to commercial banks from parent bank holding companies
Horizon: 1990 to 2009
Description: Data are plotted as a curve. Units are billions of dollars.

Capital transfers to commercial bank holding companies from parent bank holding companies begin in the first quarter of 1990 at about $2 billion, and move within a narrow range of about negative $3 billion to $8 billion until the second quarter of 2005, when they surpass $10 billion. Capital transfers move back down to a range of about $2 to $8 billion until the first half of 2007,then surpass $14 billion for each of the last two quarters of 2007. They drop to about $3 billion in the first quarter of 2008, then rise steeply, reaching about $12 billion in the second quarter, about $20 billion in the third quarter, and more than $65 billion in the fourth quarter of 2008. Capital transfers then decline from about $52 billion in the first quarter of 2009 to about $17 billion in the fourth quarter of 2009.

NOTE: The data are quarterly.

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Figure 25. Regulatory capital ratios, 1990–2009

Series: Total (sum of tier 1, tier 2, and tier 3 capital), tier 1 (consists primarily of common equity (excluding intangible assets such as goodwill and excluding net unrealized gains on investment account securities classified as available for sale) and certain perpetual preferred stock, and leverage (ratio of tier 1 capital to average tangible assets)
Horizon: 1990 to 2009
Description: Data are plotted as a curve. Units are percent.

The total capital ratio begins at the end of the first quarter of 1990 at about 9.5 percent, steadily increasing to about 13.2 percent by the end of 1993. The total capital ratio remains little changed for three quarters before decreasing, on balance, to about 12.1 percent by the end of 2000. Then the total capital ratio increases steadily again to about 13 percent by the end of the first quarter of 2002, falling, on balance, to about 12.2 percent by the end of the third quarter of 2007. The total capital ratio rebounds at a rapid pace afterward to reach a high of about 14.2 percent by the end of 2009.

The tier 1 ratio begins at the end of the first quarter of 1990 at about 7.7 percent, steadily increasing to about 10.7 percent by the end of 1993. The tier 1 ratio remains little changed for three quarters before decreasing, on balance, to about 9.3 percent by the end of 1998. Then the tier 1 ratio remains between about 9.4 percent and 9.6 percent until the end of the third quarter of 2001, after which it increases, on balance, to about 10.2 percent by the end of the third quarter of 2003. The tier 1 capital ratio generally decreases to about 9.4 percent by the end of the first quarter of 2008, increasing rapidly afterward to reach a high of about 11.4 percent by the end of 2009.

The leverage ratio begins at the end of the first quarter of 1990 at about 6.3 percent and steadily increases to about 7.8 percent by the end of 1993, after which it remains between about 7.5 percent and 7.9 percent until the end of the third quarter of 2008. After a sudden drop to about 7.4 percent at the end of 2008, the leverage ratio increases rapidly to reach about 8.6 percent by the end of 2009.

NOTE: The data are quarterly. For the components of the ratios, see text notes 20 and 21.

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Figure 26. Distribution of return on assets at commercial banks, by size of bank and by percentage of assets at all banks in each size category, 2008–09 (this figure consists of two panels)

Series: Distribution of return on assets (ROA) at commercial banks, by size of bank and by percentage of assets at all banks in each size category
Horizon: 2008 to 2009
Description: Data are plotted as histograms. There are two panels. The top panel shows the distribution of ROA for the 100 largest banks. The bottom panel shows the distribution of ROA for small and medium-sized banks. Units are percentage of assets at top 100 banks.

In the top panel, the distribution of ROA of the 100 largest commercial banks in 2008 is bimodal, with the first mode centered between 0.5 and 1 percent and the second centered between negative 1 percent and negative 0.5 percent, with negative returns accounting for about 37 percent of assets in the 100 largest commercial banks. The distribution of ROA becomes more centered in 2009 with the highest proportion of banks weighted by assets between ROA of zero and 0.5 percent, with negative returns accounting for about 35 percent of assets in the 100 largest banks.

In the bottom panel, the distribution of ROA of the small and medium-sized banks in 2008 is centered between 0.5 and 1 percent, with negative returns accounting for about 27 percent of assets in the small and medium-sized banks. The distribution of ROA shifts slightly to the left in 2009. Though the highest proportion of small and medium-sized banks weighted by assets continue to be between ROA of zero and 0.5 percent in 2009, negative returns account for about 36 percent of assets in such banks.

NOTE: Assets are deflated by a gross domestic price deflator. For the definition of bank size, see the general note on the first page of the main text.

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Figure 27. Net interest margin and core deposits as a percentage of total assets, by size of bank, 1990–2009 (this figure consists of two panels)

Series: In the top panel, net interest margin, small and medium-sized, 100 largest, and banks in the top 5 bank holding companies (BHCs) and in the bottom panel, core deposits as a percentage of total assets, small and medium-sized, 100 largest, and banks in the top 5 BHCs
Horizon: 1990 to 2009
Description: Data are plotted as curves. There are two panels. Units are percent.

In the top panel, the net interest margin for small and medium-sized banks begins in 1990 at about 4.35 percent, rises to about 4.7 percent in 1992, and remains little changed until 1998 when it falls to about 4.6 percent. The margin continues to decline, on balance, to a low of about 3.6 percent in 2009.

The net interest margin for the 100 largest banks begins in 1990 at about 3.4 percent, rises to about 4 percent in 1992, and remains little changed until 1995 when it begins to fall, on balance, until it reaches about 3.7 percent in 2000. The margin briefly climbs to about 3.9 percent by 2002, but resumes its decline to a low of about 3.2 percent in 2007. From that point, the margin for the 100 largest banks increases for two consecutive years to reach 3.4 percent in 2009.

The net interest margin for banks in the top 5 BHCs begins in 1990 at about 3.55 percent, rises to about 4.05 percent in 1992, and falls, on balance, to 3.4 percent by 1997. The margin briefly climbs to 3.75 percent in 1999, before dropping to 3.5 percent in 2000 and rebounding again to 3.9 percent in 2002. However, it declines steadily afterward to a low of about 3.15 percent by 2007. From that point, the margin for the banks in the top 5 BHCs increases for two consecutive years to about 3.55 percent by 2009.

The curves for the 100 largest and banks in the top five BHCs generally follow the same path throughout the horizon.

In the bottom panel, core deposits as a fraction of total assets at small and medium-sized banks begins in 1990 at about 70 percent and rises to 74 percent by 1992. Afterward core deposits as a percentage of assets steadily decrease to about 61 percent by 2006. The fraction briefly increases by less than a percentage point in 2007, only to fall back to about 61 percent in 2008 before rebounding to 62 percent in 2009.

Core deposits as a fraction of total assets at the 100 largest banks begins in 1990 at about 42 percent and rises to about 48 percent by 1992. Afterward core deposits as a percentage of assets steadily decrease to about 39 percent by 2000. Though the fraction increases to about 44 percent by 2004, it falls back to about 38 percent by 2008, before sharply rebounding to about 43 percent in 2009.

Core deposits as a fraction of total assets at banks in the top five BHCs begins in 1990 at about 33 percent and rises to about 44 percent in 1992. Then the fraction generally falls until reaching about 29 percent in 1997. Afterward, the fraction rises to about 37 percent in 1999, falls a little to about 33 percent in 2000, and remains generally at that level until rising to about 37 percent in 2002. From that point, the fraction generally rises until reaching about 38 percent in 2005, falls to about 33 percent in 2007, and remains at that level until it rises to about 43 percent in 2009.

NOTE: The data are annual. Net interest margin is net interest income divided by average interest-earning assets. Core deposits consist of transaction deposits, savings deposits, and small time deposits. For the definition of bank size, see the general note on the first page of the main text; for the definition of the top five bank holding companies (BHCs), see text note 19.

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Figure 28. Noninterest income, and selected components, as a proportion of total assets, by size of bank, 2002–09 (this figure consists of three panels)

Series: In the top panel, noninterest income, 100 largest and small and medium-sized; in the middle panel, all banks, deposit fees and fiduciary income; and in the bottom panel, 100 largest banks, net securitization income, net servicing fees, and trading income
Horizon: 2002 to 2009
Description: Data are plotted as curves. There are three panels. Units are percent.

In the top panel, noninterest income as a percentage of assets for the 100 largest banks begins in 2002 at about 2.75 percent and remains generally at that level for another year, falls to about 2.55 percent in 2004. Afterward, noninterest income remains little changed for two years, before falling sharply in 2007 and 2008 when it eventually reaches about 1.9 percent. In 2009, however, noninterest income rebounds to about 2.25 percent of assets.

Noninterest income as a percentage of assets for the small and medium-sized banks begins in 2002 at about 1.95 percent and generally declines to about 1.35 percent by 2009, with an especially sharp decline of about 0.3 percent occurring in 2008.

In the middle panel, deposit fees as a percentage of assets for all banks begins in 2002 at about 0.45 percent and steadily falls to about 0.35 percent by 2009. Fiduciary income as a fraction of assets begins in 2002 at about 0.32 percent and generally decreases until it falls to about 0.23 percent in 2009.

In the bottom panel, net securitization income as a percentage of assets at the 100 largest banks begins in 2002 at about 0.35 percent and generally declines until 2007 when it reaches 0.25 percent. For the next two years, the fraction declines much more rapidly to end up at a low of less than 0.05 percent of assets for the 100 largest banks in 2009.

Net servicing fees as a fraction of assets in the 100 largest banks begins in 2002 at about 0.2 percent, which remains little changed until 2005. Then net servicing fees gradually decrease to reach a low of about 0.15 percent in 2008 before sharply rebounding to about 0.3 percent in 2009.

Trading revenue as a percentage of assets in the 100 largest banks begins in 2002 at just more than 0.2 percent, which is little changed for the following year. Then trading revenue drops to just more than 0.15 percent in 2004 and rises steadily to about 0.25 percent in 2006. It then drops sharply to about 0.05 percent in 2007 and reaches about a little less than zero in 2008. Trading revenue then rebounds sharply to about 0.25 of assets in 2009.

The curves for net servicing fees and trading income intersect in 2003 and late 2004. All three curves intersect in 2008.

NOTE: The data are annual. For the definition of bank size, see the general note on the first page of the main text.

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Figure 29. Noninterest expense and selected components, and other selected components of noninterest expense, as a proportion of total assets, 2002–09 (this figure consists of two panels)

Series: In the top panel, noninterest expense and selected components, noninterest expense, salaries and benefits, and occupancy and in the bottom panel, other selected components of noninterest expense, advertising and data processing, goodwill impairment losses, and Federal Deposit Insurance Corporation (FDIC) assessments
Horizon: 2002 to 2009
Description: Data are plotted as curves. There are two panels. Units are percent.

The top panel shows total noninterest expense as a fraction of assets for all commercial banks. Noninterest expense begins in 2002 at about 3.5 percent of assets and gradually declines to reach a low of about 3 percent in 2009.

Salaries and benefits as a percentage of assets begins in 2002 at about 1.5 percent and declines steadily until it drops from about 1.4 percent in 2007 to about 1.25 percent in 2008. Salaries and benefits remains little changed in 2009.

Occupancy expenses as a percentage of assets begins in 2002 at about 0.45 percent, after which it declines steadily to about 0.35 percent by 2008, remaining unchanged in 2009.

The bottom panel shows advertising and data processing expenses as a fraction of total assets, which begins in 2002 at 0.2 percent and remains between 0.15 percent and 0.2 percent until 2009.

Goodwill impairment losses as a percentage of assets begins in 2002 at zero and remains at zero or near zero until 2007. Goodwill impairments then shoot up to about 0.25 percent in 2008, before falling back to about 0.1 percent in 2009.

FDIC assessments as a fraction of assets begin in 2002 at zero and remains essentially zero until 2009, when it shoots up to be nearly 0.15 percent.

The curves for Advertising and data processing and goodwill impairment losses intersect in 2008. The curves for goodwill impairment losses and FDIC assessments intersect in 2009.

NOTE: The data are annual. For the definition of goodwill impairment losses, see text note 26. FDIC is the Federal Deposit Insurance Corporation.

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Figure A: Assets at failed commercial banks, 2008–10

Series: Assets at failed commercial banks
Horizon: 2008 to 2010
Description: The data are plotted as bars. Units are billions of dollars.

Over the months of 2008, the assets at failed commercial banks rise, but the series does not exceed $4 billion in any month of 2008. The series rises more in 2009, with a peak in August 2009 of $30 billion in assets. The series remains above $13 billion in the next few months, and then above $6 billion in the remaining months up to March 2010 with the exception of February 2010.

NOTE: The data are monthly and extend through March 2010. Assets are as of the fail date.

SOURCE: Federal Deposit Insurance Corporation via SNL Financial.

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Figure B: Number of banks, and share of assets at the largest banks, 1990–2009

Series: In the top panel, number and in the bottom panel, share of assets, 100 largest and 10 largest
Horizon: 1990 to 2009
Description: Data are plotted as curves. There are two panels. In the top panel, units are thousands and in the bottom panel, units are percent.

In the top panel, the number of banks declines steadily from about 12,500 to 6,900 between 1990 and 2009.

In the bottom panel, the share of bank assets held by the 100 largest banks rises steadily from about 50 percent in 1990 to a peak of about 81.9 percent in 2008, before dipping to about 81.4 percent in 2009. The share of bank assets held by the 10 largest banks rises from about 20 percent in 1990 to about 54.1 percent in 2008, and then increases slightly to about 54.4 percent in 2009.

NOTE: The data are as of year-end. For the definition of bank size, see the general note on the first page of the main text.

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Figure C. Outstanding balance in the Capital Purchase Program, and cumulative gross secondary equity issuance, October 2008–February 2010

Series: In the top panel, outstanding Capital Purchase Program (CPP) balance, total and Supervisory Capital Assessment Program (SCAP) banks and in the bottom panel, cumulative gross secondary equity issuance, financial companies and SCAP banks
Horizon: October 2008 to February 2010
Description: Data are plotted as curves. There are two panels. Units are billions of dollars.

The top panel shows total outstanding CPP balance which begins on October 28, 2008, at about $115 billion. The total balance shoots up to about $150 billion in mid-November of 2008 and steadily increases to about $200 billion by March 2009, remaining at that level until mid-June 2009 when the outstanding balance drops to about $130 billion. The balance increases to about $135 billion in late June and remains at that level until early December 2009 when it drops to about $110 billion. In late December, it drops again to about $85 billion where it remains until early February of 2010. Then it decreases to about $75 billion and remains little changed until late February 2010.

The CPP balance at SCAP banks begins on October 29, 2008 at about $115 billion, increasing to about $140 billion in mid-November. It remains at that level until the last day of 2008, when the balance shoots up to about $150 billion. Then it increases shortly afterward to about $165 billion in early January, remaining at that level until mid-June 2009 when it falls to about $95 billion. The CPP balance at SCAP banks remains the same at that level until early December 2009 when it falls again to about $70 billion, then to about $45 billion about two weeks after. After maintaining that level until early February 2010, the balance decreases to about $40 billion.

The curves in the top panel intersect in October 2008 and June 2009.

The bottom panel shows the cumulative gross secondary equity issuance at financial companies since October 28, 2008. Secondary equity issuance begins at zero, jumping up to about $10 billion in early November 2008, then rising to about $15 billion in late December. It remains little changed until mid-April 2009, when it rises to about $20 billion. It rises again to about $45 billion in early May, after which it continues to steadily rise to about $85 billion by late November 2009. Secondary equity issuance then shoots up to about $105 billion in early December, remaining relatively unchanged until it increases sharply to about $140 billion in mid-December. Then it continues to rise to more than $145 billion by late February 2010.

Cumulative gross secondary issuance for SCAP banks begins on October 28, 2008, at zero and remains at that level until early November 2008 when it increases to about $10 billion. After remaining little changed, the issuance increases to about $15 billion in mid-April 2009. Then in early May, issuance shoots up to about $40 billion, slowly increasing to about $65 billion by early June 2009. It remains stable at that level until early December 2009, when it shoots up to about $85 billion. In mid-December 2009, the gross issuance increases to about $115 billion and remains at that level until early February 2010, after which it slightly increases to about $118 billion in late February.

The curves generally follow the same path.

NOTE: The data are daily and extend from October 28, 2008, to February 24, 2010. CPP is the Capital Purchase Program; SCAP is the Supervisory Capital Assessment Program.

SOURCE: Four outstanding CPP balance, Department of the Treasury; for cumulative gross secondary equity issuance, Securities Data Corporation New Issues Database.

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