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Fast Facts: FORTRESS BALANCE SHEETS

Week 1 of 3: Health of the Financial Services Industry Our banks are on a much stronger basis than they were at the time of the last economic crisis, and they have built their capital base and their equity base and worked through a lot of their toxic assets. Presidential Candidate Mitt Romney, CBS Face the Nation, June 17, 2012.
FACT: Bank capital is at its highest levels in history, according to new FDIC data. Banks currently hold nearly $1.6 trillion in capital, and the average Tier 1 capital ratio set a new record of 13.28 percent in the first quarter of 2012. New rules such as Basel III and capital surcharges for systemically important financial firms will increase capital requirements further. FACT: Insurance firms capital and surplus are at all-time highs despite an increase in unexpected expenses from natural disasters in 2011. Moreover, insurance companies had record payments to individuals who suffered from these disasters. FACT: Large banks have increased their business lending, according to FDIC data. Net loans and leases grew by $40 billion during the first quarter for banks with over $10 billion in assets. FACT: Loan quality has improved across all loan categories and all bank sizes. Loan losses declined for a seventh consecutive quarter, and noncurrent loans reached a three-year low, according to the FDIC Quarterly Banking Profile for Q1 2012. FACT: Banks have tripled on-hand liquidity since 2008 to meet unexpected funding needs, according to SNL Financial. In the first quarter of 2012, the on-hand liquidity ratio rose to an all-time high of 23 percent. FACT: Bank failures are at their lowest level in three years, and the number of problem institutions is now at its lowest level since 2008, according to the FDIC. FACT: Net income has returned to pre-crisis levels. FDIC-insured commercial banks and savings institutions reported $35.3 billion in net income for first quarter 2012. This represents a $6.6 billion (22.9 percent) improvement over first quarter 2011 results.

Financial Services HOTLINE: If you have questions about this topic or any other issue facing financial services, please reach out to Abby McCloskey, Director of Research at the Financial Services Roundtable, at 202-589-2531 or Scott Talbott, Senior Vice President of Government Affairs, at 202-2894322. Learn more about the Financial Services Industry at www.OurFinancialFuture.com. OurFinancialFuture.com is continuously updated to bring you the most useful information about the industry in real-time.