• Investments – Investments have ranged from overnight to term. Credit unions have for the last several years held about 60% of their cash and equivalents in corporate credit unions. Although the vast bulk of credit union deposits in corporate credit unions have been very short-term, they have often been invested by corporate credit unions in longer maturity assets. Historically, corporate credit unions engaged in maturity mismatching and concentrated in private label mortgage-backed and other asset backed securities that resulted in high dividend rates paid by them.
• Credit Services – Credit services include both liquidity services (lines of credit and short term loans) and term credit services (long term lending). Credit services include both actual loans from corporate credit unions to credit unions and also lines of credit for potential credit union borrowing needs. Perhaps the most valued of the liquidity services provided by corporate credit unions is the form of lines of credit to cover short-term needs. According to the Credit Union National Association, a trade association, the aggregate amount of lines of credit from corporate credit unions is substantial, approximately $30 billion.
• Settlement, Payment, and other Correspondent Services – Corporate credit unions offer a variety of services related to payments. Chief among these is the maintenance of a credit union’s core settlement account, and the provision of settlement to that account of all in-coming and out-going transactions caused by the member.

Bad bets on mortgage-backed securities have caused the NCUA to seize five of the 26 corporate credit unions since March 2009.  These five credit unions had approximately $76 billion in assets.

In late 2010, the federal government swooped in to stabilize a crucial part of the credit union sector battered by losses on subprime mortgages, two years after the peak of the financial crises.  In September 2010, the NCUA announced a rescue and revamping plan of the nation’s corporate credit union system, underpinned by a federal guarantee valued at $30 billion or more.  The NCUA also announced a plan to manage $50 billion of troubled assets inherited from failed institutions.  To help fund the plan, the NCUA announced plans to issue approximately $35 billion in government guaranteed bonds, backed by the seized mortgage related assets.  According to the chairman of the NCUA, the new regulations will make oversight of corporate credit unions much tougher.

To address the impaired assets and resolve the troubled intuitions involves several steps:

• Isolating the impaired securities (legacy assets) held by these five corporate credit unions;
• Repackaging the legacy assets into new securities with an NCUA guarantee backed by the U.S. government;
• Issuing the new securities to investors on the open market;
• Transferring the corporates’ still-valuable assets to newly created “bridge banks” that will allow for continued operations; and
• Transitioning operations now under NCUA conservatorship over a target of 24 months to other service providers.

Since October 2010, the NCUA completed three offerings and raised proceeds totaling $17.7 billion.

NCUA adopted a new set of regulatory reforms aimed at strengthening the corporate credit union system. The new corporate regulation:

• Implements stronger capital requirements and establishes prompt corrective action measures for corporate credit unions;
• Establishes clear concentration limits on investments that will require corporate credit unions to better diversify their portfolios;
• Improves asset/liability management requirements to avoid liquidity and interest-rate risks; and
• Raises governance standards to improve levels of experience and expertise on corporate boards.

Due to the reform a lending dilemma was created:

• CUSO (Credit Union Service Organization)—these are organizations formed by a number of credit unions to offer products and services typically outside of the not-for-profit structure of a credit union or it is a way for a group of credit unions to collaborate together to create scale or to share in operating cost. In this area a number of CUSOs were/are formed to provide lending alternatives to consumers/members and businesses, typically in the area or mortgages and business lending. Corporate Credit Unions have historically provided; warehouse lines and both short and long tem lending. Due to the reform they will no longer be able to provide this funding at levels sought after in the past
• Credit Union—in the past Corporate Credit Unions have provided lines-of-credit (LOCs) to their member credit unions that have allowed credit unions to meet the required liquidity requirements of their regulation. Due to the changes in the regulation governing Corporate Credit Unions many of these lines will be offered at a reduced amount compared to the past.

These reforms will impact corporate credit unions ability to provide sources of liquidity and financing to credit unions and CUSOs.  Who will fill this void, commercial banks, investment banks, private equity firms, and other credit unions?  How much will costs of financing increase?  Time will tell. Though the economy has gotten better, we are still in challenging times.

Over the past year, we’ve noticed an increase number of calls from credit unions that are looking to get independent third party valuations for their commercial estate exposure as their regulators are starting to require them. Not a surprise considering cap rates have widened out over the past few years and performance of the underlying collateral have steadily declined as the number of businesses closing have increased. In this quarter of 2010, the number of calls have picked up as credit unions are gearing up for their 2011 regulatory reviews, which they anticipate an independent third party review will be required of them. Though this can be a stressful process for many credit unions and banks, we created the Stoplight Solution to make things easy for them. The good news is it appears the economy and commercial real estate fundamentals are starting to recover.

Also for 4Q2010, the number of commercial real estate investors calling us to assist them in refinancing their existing holdings or obtain acquisition financing has increased. We’ve closed a deal in late 2010 and have already circled another deal to be closed in late January 2011. The commercial real estate financing market has thawed, albeit not at the levels seen several years back. Various lending intuitions are aggressively looking for deals. With billions of capital sitting on the sidelines for the past several years, it seems they are now ready to put it to use. Even CMBS shops are back with rumors of several old players coming back to the market in 2011. With the increase number of lenders coming back to the market, 2011 should be a good year for investors looking for financing. The trick is going to be finding the right lender for you.

Although the economy is showing signs of a gradual recovery with the larger financial institutions stabilizing, tumbling home prices, soaring loan defaults in residential and commercial real estate and rising unemployment continue to take their toll on small banks. In the fourth quarter of 2009, the number of banks on the FDIC’s list of problem institutions grew to 702 from 552 in the third quarter of 2009. This is the highest number of problem institutions since the savings and loan crisis in the early 1990′s. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates bank failures to cost over $100 billion over the next three years.

The THREE failed banks are:

• Security Savings Bank, F.S.B. – Olathe, Kansas, was closed by the Office of Thrift Supervision, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Simmons First National Bank, Pine Bluff, Arkansas, to assume all of the deposits of Security Savings Bank, F.S.B. As of June 30, 2010, Security Savings Bank, F.S.B. had approximately $508.4 million in total assets and $397.0 million in total deposits. Simmons First National Bank did not pay the FDIC a premium for the deposits of Security Savings Bank, F.S.B. In addition to assuming all of the deposits of the failed bank, Simmons First National Bank agreed to purchase essentially all of the assets. The FDIC and Simmons First National Bank entered into a loss-share transaction on $334.2 million of Security Savings Bank, F.S.B.’s assets. Simmons First National Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF will be $82.2 million. Security Savings Bank, F.S.B. is the 130th FDIC-insured institution to fail in the nation this year, and the second in Kansas. The last FDIC-insured institution closed in the state was Thunder Bank, Sylvan Grove, on July 23, 2010.

• WestBridge Bank and Trust Company – Chesterfield, Missouri, was closed by the Missouri Division of Finance, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Midland States Bank – Effingham, Illinois, to assume all of the deposits of WestBridge Bank and Trust Company. As of June 30, 2010, WestBridge Bank and Trust Company had approximately $91.5 million in total assets and $72.5 million in total deposits. Midland States Bank did not pay the FDIC a premium for the deposits of WestBridge Bank and Trust Company. In addition to assuming all of the deposits of the failed bank, Midland States Bank agreed to purchase essentially all of the assets. The FDIC and Midland States Bank entered into a loss-share transaction on $72.6 million of WestBridge Bank and Trust Company’s assets. Midland States Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF will be $18.7 million. WestBridge Bank and Trust Company is the 131st FDIC-insured institution to fail in the nation this year, and the fifth in Missouri. The last FDIC-insured institution closed in the state was Southwest Community Bank, Springfield, on May 14, 2010.

• Premier Bank – Jefferson City, Missouri was closed by the Missouri Division of Finance, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Providence Bank – Columbia, Missouri, to assume all of the deposits of Premier Bank, except certain brokered deposits. As of June 30, 2010, Premier Bank had approximately $1.18 billion in total assets and $1.03 billion in total deposits. Providence Bank did not pay the FDIC a premium for the deposits of Premier Bank. In addition to assuming all of the deposits of the failed bank, Providence Bank agreed to purchase approximately $657.9 million of the failed bank’s assets. The FDIC will retain the balance of the assets for later disposition. The FDIC and Providence Bank entered into a loss-share transaction on $408.7 million of Premier Bank’s assets. Providence Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF will be $406.9 million. Premier Bank is the 132nd FDIC-insured institution to fail in the nation this year, and the sixth in Missouri. The last FDIC-insured institution closed in the state was WestBridge Bank and Trust, Chesterfield on October 15, 2010.

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 7,830 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

(Source: Federal Deposit Insurance Corporation.)

• delinquencies in real estate and business member loans are increasing,
• loan modifications continue to rise; now totaling $10 billion,
• interest rate risk growing; the industry continues to hold significant amount of long-term fixed rate loans, while shares are primarily in rate sensitive or short-term accounts,
• greater loan losses persist in many parts of the country, and
• credit union members filings for bankruptcy rise.

For the past few years, our clients have been and continue to experience these issues as they have sizable exposure to member business loans with heavy concentrations in commercial real estate. We have seen the delinquencies, modifications and foreclosures spike dramatically within a short period of time. Modifications of interest rates to 2.5% for 12 -24 month periods are not unheard of as our clients cope with the mounting number of problem loans.

As a result of these trends, the industry can expect heightened review by the NCUA and other regulatory bodies, especially in those regions struggling with high unemployment, declining real estate values and failing business. Regulators will examine and further scrutinize credit unions’ exposure to member business loans, especially those heavily concentrated in commercial real estate, and interest rate risk.

Credit unions must continue to be vigilant and prudent in their risk management practices to control these risks. They need to be more proactive than ever before and identify problematic loans 12 -24 months before they become serious issues by increasing the number of asset reviews to more than once a year, as things move quickly in this market. In addition, they need to get a better understanding of their borrower/guarantor’s financial picture. Though the loan might appear fine, there might be issues with the sponsor. Some Issues to vet out are:

• does the borrower/guarantor have significant exposure to real estate,
• how will his liquidity and net worth be impacted if real estate values decline another 10%,
• how much debt does he have and how much matures in the next two years,
• are any of his assets under foreclosure,
• is he still employed,
• is he involved in any litigation, and
• what’s his current FICO score?

Not all the news coming from the NCUA is negative. The aggregate net worth ratio is holding steadily at 9.9% and over 94% of federally insured credit unions still exceed the statutory definition of “well capitalized”. For 2Q2010, credit unions lowered their cost of funds at a faster rate than their decline in loan yields and reduced their provision for loan losses by 31 bps, which contributed to an increase in earnings by 23 bps.

At Lighthouse Advisory Services, we are helping our clients tackle these negative trends. We created the Stoplight Solution to help our clients identify and address these issues for their internal and regulatory review. The Stoplight Solution categorizes the portfolio into “GREEN, YELLOW and RED” buckets. By triaging the portfolio in this manner we can identify and address those problematic loans by either quantifying the impairment value or highlighting those issues that management needs to address quickly. Our clients have used our work to supplement their analysis for regulatory review. Go to Testimonials and see what they are saying about us and our work. Want to learn more? Give us a call at 212-398-8316.

Although the economy is showing signs of a gradual recovery with the larger financial institutions stabilizing, tumbling home prices, soaring loan defaults in residential and commercial real estate and rising unemployment continue to take their toll on small banks. In the fourth quarter of 2009, the number of banks on the FDIC’s list of problem institutions grew to 702 from 552 in the third quarter of 2009. This is the highest number of problem institutions since the savings and loan crisis in the early 1990′s. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates bank failures to cost over $100 billion over the next three years.

The TWO failed banks are:

• Wakulla Bank – Crawfordville, Florida was closed by the Florida Office of Financial Regulation, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Centennial Bank – Conway, Arkansas, to assume all of the deposits of Wakulla Bank.  As of June 30, 2010, Wakulla Bank had approximately $424.1 million in total assets and $386.3 million in total deposits. Centennial Bank did not pay the FDIC a premium for the deposits of Wakulla Bank. In addition to assuming all of the deposits of the failed bank, Centennial Bank agreed to purchase essentially all of the assets. The FDIC and Centennial Bank entered into a loss-share transaction on $212.7 million of Wakulla Bank’s assets. Centennial Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF will be $113.4 million. Wakulla Bank is the 128th FDIC-insured institution to fail in the nation this year, and the twenty-fifth in Florida. The last FDIC-insured institution closed in the state was Haven Trust Bank Florida, Ponte Vedra, on September 24, 2010.

• Shoreline Bank – Shoreline, Washington, was closed by the Washington Department of Financial Institutions, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with GBC International Bank, Los Angeles, California, to assume all of the deposits of Shoreline Bank. As of June 30, 2010, Shoreline Bank had approximately $104.2 million in total assets and $100.2 million in total deposits. GBC International Bank will pay the FDIC a premium of 0.25% to assume all of the deposits of Shoreline Bank. In addition to assuming all of the deposits of the failed bank, GBC International Bank agreed to purchase approximately $65.7 million of the failed bank’s assets. The FDIC will retain the balance of the assets for later disposition. The FDIC and GBC International Bank entered into a loss-share transaction on $49.2 million of Shoreline Bank’s assets. GBC International Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF will be $41.4 million. Shoreline Bank is the 129th FDIC-insured institution to fail in the nation this year, and the tenth in Washington. The last FDIC-insured institution closed in the state was North County Bank, Arlington, on September 24, 2010.

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 7,830 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

(Source: Federal Deposit Insurance Corporation.)

Although the economy is showing signs of a gradual recovery with the larger financial institutions stabilizing, tumbling home prices, soaring loan defaults in residential and commercial real estate and rising unemployment continue to take their toll on small banks. In the fourth quarter of 2009, the number of banks on the FDIC’s list of problem institutions grew to 702 from 552 in the third quarter of 2009. This is the highest number of problem institutions since the savings and loan crisis in the early 1990′s. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates bank failures to cost over $100 billion over the next three years.

The TWO failed banks are:

• Haven Trust Bank Florida – Ponte Vedra Beach, Florida, was closed by the Florida Office of Financial Regulation, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with First Southern Bank – Boca Raton, Florida, to assume all of the deposits of Haven Trust Bank Florida. As of June 30, 2010, Haven Trust Bank Florida had approximately $148.6 million in total assets and $133.6 million in total deposits. First Southern Bank did not pay the FDIC a premium for the deposits of Haven Trust Bank Florida. In addition to assuming all of the deposits of the failed bank, First Southern Bank agreed to purchase essentially all of the assets. The FDIC and First Southern Bank entered into a loss-share transaction on $127.3 million of Haven Trust Bank Florida’s assets. First Southern Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF will be $31.9 million. Haven Trust Bank Florida is the 126th FDIC-insured institution to fail in the nation this year, and the twenty-fourth in Florida. The last FDIC-insured institution closed in the state was Horizon Bank, Bradenton, on September 10, 2010.

• North County Bank – Arlington, Washington was closed by the Washington Department of Financial Institutions, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Whidbey Island Bank – Coupeville, Washington, to assume all of the deposits of North County Bank. As of June 30, 2010, North County Bank had approximately $288.8 million in total assets and $276.1 million in total deposits. Whidbey Island Bank will pay the FDIC a premium of 2.0% to assume all of the deposits of North County Bank. In addition to assuming all of the deposits of the failed bank, Whidbey Island Bank agreed to purchase essentially all of the assets. The FDIC and Whidbey Island Bank entered into a loss-share transaction on $221.9 million of North County Bank’s assets. The FDIC estimates that the cost to the DIF will be $72.8 million. North County Bank is the 127th FDIC-insured institution to fail in the nation this year, and the ninth in Washington. The last FDIC-insured institution closed in the state was The Cowlitz Bank, Longview, on July 30, 2010.

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 7,830 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

(Source: Federal Deposit Insurance Corporation.)

Although the economy is showing signs of a gradual recovery with the larger financial institutions stabilizing, tumbling home prices, soaring loan defaults in residential and commercial real estate and rising unemployment continue to take their toll on small banks. In the fourth quarter of 2009, the number of banks on the FDIC’s list of problem institutions grew to 702 from 552 in the third quarter of 2009. This is the highest number of problem institutions since the savings and loan crisis in the early 1990′s. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates bank failures to cost over $100 billion over the next three years.

The SIX failed banks are:

• ISN Bank – Cherry Hill, New Jerseywas closed by the New Jersey Department of Banking and Insurance, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with New Century Bank (doing business as Customers Bank) – Phoenixville, Pennsylvania, to assume all of the deposits of ISN Bank. As of June 30, 2010, ISN Bank had approximately $81.6 million in total assets and $79.7 million in total deposits. New Century Bank did not pay the FDIC a premium to assume all of the deposits of ISN Bank. In addition to assuming all of the deposits of the failed bank, New Century Bank agreed to purchase essentially all of the failed bank’s assets. The FDIC and New Century Bank entered into a loss-share transaction on approximately $64.8 million of ISN Bank’s assets. New Century Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF will be approximately $23.9 million. ISN Bank is the 120th FDIC-insured institution to fail in the nation this year, and the first in New Jersey. The last FDIC-insured institution closed in the state was First BankAmericano – Elizabeth, on July 31, 2009.

• Community & Southern Bank – Carrollton, Georgia acquired the banking operations, including all the deposits, of three Georgia-based institutions. The Bank of Ellijay – Ellijay, First Commerce Community Bank – Douglasville, and The Peoples Bank – Winder, were closed by the Georgia Department of Banking and Finance, and the FDIC was named receiver for each institution. The failed institutions were not affiliated with one another. The FDIC entered into a purchase and assumption agreement with Community & Southern Bank. As of June 30, 2010, Bank of Ellijay had total assets of $168.8 million and total deposits of $160.7 million; First Commerce Community Bank had total assets of $248.2 million and total deposits of $242.8 million; and The Peoples Bank had total assets of $447.2 million and total deposits of $398.2 million. Community & Southern Bank will pay the FDIC a premium of 1.0% to acquire all of the deposits of the Bank of Ellijay and First Commerce Community Bank. They also will pay the FDIC a premium of 1.25% to acquire all of the deposits of The Peoples Bank. Besides assuming all the deposits from the three Georgia institutions, Community & Southern Bank will purchase virtually all the failed banks’ assets. The FDIC and Community & Southern Bank entered into a loss-share transaction on approximately $602.5 million of the failed institutions’ assets. Community & Southern Bank and the FDIC will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF for Bank of Ellijay will be $55.2 million; for First Commerce Community Bank, $71.4 million; and for The Peoples Bank, $98.9 million. These failures bring the total number of failures to 123 for the nation and to 14 for Georgia. Prior to these failures, the last bank closed in the state was Northwest Bank & Trust – Acworth, on July 31, 2010.

• Bramble Savings Bank – Milford, Ohio, was closed by the Ohio Division of Financial Institutions, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Foundation Bank – Cincinnati, Ohio, to assume all of the deposits of Bramble Savings Bank. As of June 30, 2010, Bramble Savings Bank had approximately $47.5 million in total assets and $41.6 million in total deposits. Foundation Bank did not pay the FDIC a premium to assume all of the deposits of Bramble Savings Bank. In addition to assuming all of the deposits of the failed bank, Foundation Bank agreed to purchase essentially all of the failed bank’s assets. The FDIC estimates that the cost to the DIF will be $14.6 million. Bramble Savings Bank is the 124th FDIC-insured institution to fail in the nation this year, and the second in Ohio. The last FDIC-insured institution closed in the state was American National Bank – Parma, on March 19, 2010.

• Maritime Savings Bank – West Allis, Wisconsin, was closed by Office of Thrift Supervision, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with North Shore Bank, FSB –  Brookfield, Wisconsin, to assume all of the deposits of Maritime Savings Bank. As of June 30, 2010, Maritime Savings Bank had approximately $350.5 million in total assets and $248.1 million in total deposits. North Shore Bank, FSB did not pay the FDIC a premium to assume all of the deposits of Maritime Savings Bank. In addition to assuming all of the deposits of the failed bank, North Shore Bank, FSB agreed to purchase approximately $177.6 million of the failed bank’s assets. The FDIC estimates that the cost to the DIF will be $83.6 million. Maritime Savings Bank is the 125th FDIC-insured institution to fail in the nation this year, and the first in Wisconsin. The last FDIC-insured institution closed in the state was Bank of Elmwood – Racine, on October 23, 2009.

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 7,830 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

 (Source: Federal Deposit Insurance Corporation.)

Horizon Bank – Bradenton, Florida, was closed by the Florida Office of Financial Regulation, which appointed the FDIC as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of the Ozarks, Little Rock, Arkansas, to assume all of the deposits of Horizon Bank. As of June 30, 2010, Horizon Bank had approximately $187.8 million in total assets and $164.6 million in total deposits. Bank of the Ozarks did not pay the FDIC a premium for the deposits of Horizon Bank. In addition to assuming all of the deposits of the failed bank, Bank of the Ozarks agreed to purchase essentially all of the assets. The FDIC and Bank of the Ozarks entered into a loss-share transaction on $150.4 million of Horizon Bank’s assets. Bank of the Ozarks will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $58.9 million. Horizon Bank is the 119th FDIC-insured institution to fail in the nation this year, and the twenty-third in Florida. The last FDIC-insured institution closed in the state was Community National Bank at Bartow, Bartow, on August 20, 2010.

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 7,830 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

(Source: Federal Deposit Insurance Corporation.)