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Important Notices

March 11, 2008

DFI Quarterly Report - Fourth Quarter 2008

Quarterly Report (Excel) Third Quarter 2007

Introduction

Each quarter, the Quarterly Report pesents summary statistics for commercial banks, industrial banks, credit unions, offices of foreign banks and trust companies with a one-year comparison. The intention of the Quarterly Report is to show at a glance significant changes on the balance sheets and reports of income of DFI licensees. We invite interested readers to review the Financial Statistics page on our website, and the financial data published by the Federal Reserve Bank, Federal Deposit Insurance Corporation and the National Credit Union Administration.

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Commercial Banks

For the year ending December 31, 2007, the number of state-chartered banks increased by 8.1% to 214 at the yearend 2007, compared to198 at yearend 2006. Assets were up from $209.0 billion to $224.1 billion, an increase of $15.1 billion, or 7.2% over the same period, while loans were up 8.9%, from $147.0 billion to $160.1 billion, Total equity capital trailed asset and loan growth, increasing 4.5%, from $26.8 billion to $28.0 billion at the end of the year.

Deposit growth did not keep pace with loans, increasing just 1.2% to $154.9 billion, which caused the loan to deposit ratio to increase to 103.32% from 95.99% at the close of the third quarter 2006, while net income for the year was $2.2 billion, off $475.9 million or 17.6% compared to one year ago. The net interest margin was down from 3.74 to 3.50%, constricted by the tightening credit market and increased cost of funds. Return on assets, return on equity and reserve coverage of noncurrent loans decreased, while noncurrent loans and other real estate owned more than doubled, the former going from $710.8 million to $1.5 billion while the latter increased from $54 million to $113 million.

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Industrial Banks

Financial statistics for industrial banks continue to be significantly impacted by the results of a single subprime lender. Total loans, total assets, total deposits and total capital experienced double-digit declines from December 31 one year ago. Assets were down 30% from $17.3 billion to $12.2 billion while loans declined by over half, going from $15.4 billion to $7.3 billion. Total equity capital was also down by over half, going from $2.1 billion to $973.8 million, while the number of industrial banks decreased by one, from 14 to thirteen.

Deposits were down 22.6% from $13.5 billion to $10.4 billion which caused the loan-to-deposit ratio to decrease from 114.29% to 70.19%. Net income went from $148.0 million one year ago to a net loss of $879.6 million, while noncurrent loans decreased from $214.0 million to $46.1 million, a reduction of $167.9 million or 78.5%. The net interest margin declined from 5.31% to 4.36%. Other real estate owned increased by 175.3%, going from $13.3 million to $36.5 million over the same period.

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Credit Unions

Credit unions experienced very slight growth in total assets, total loans, total shares and total capital over the year ended December 31. Assets, at $71.4 billion were up 3.4% from the $69.0 billion reported as of December 31, 2007. Loans were up 3.5% from $50.1 billion to $51.8 billion while shares were up 2.4% from $58.3 billion to $59.7 billion. Capital was up 3.8%, from $7.3 billion to $7.6 billion. The allowance for loan losses was up 50.7% from $299.1 million to $450.7 million. The number of credit unions decreased by seven, from 203 to 196 a decrease of 2.5%.

Net margin to average assets narrowed from 4.06% at the end of 2006 to 4.02% at the end of 2007; while the provision for loan losses more than doubled, going from $201.8 million in at yearend 2006 to $483.0 million at the close of 2007. During the period, net income went from $524.8 million to $218.0 million, a decrease of $306.8 million or 58.4%. Delinquent loans almost doubled, going from $244.9 million to $475.5 million an increase of $230.6 million, an increase of 94.1%.

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Foreign Banks

State-chartered offices of foreign banking organizations experienced growth in total assets, total loans and total deposits during the year ended December 31, 2007. Total assets were up 16.6% from $19.0 billion to $22.1 billion while loans at $15.8 billion were up 17.0% from $13.5 billion at the end of 2006. Deposits were $12.1 billion as of December 31, 2007, an increase of 20.9% from the $10.0 billion reported as of December 31, 2006. The number of foreign banking organizations with state-chartered offices in California remained constant at thirty-six.

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Trust Companies and Departments

Total corporate assets of trust companies at yearend 2007 at $761.3 million were up $54.8 million or 7.8% from the $706.6 million a year previous. While total income from fiduciary activities was up 1.7% from $830.7 million to $845.1 million over the same period, net income was off 27.1%, from $133.5 million at yearend 2006 to $97.2 million, caused in part by a decrease of 93.9% in other income from the same period one year ago. Total fiduciary assets at state-chartered banks and trust companies increased 12.3% from $312.7 billion to $356.5 billion. The number of trust companies remained at ten and the number of state-chartered banks with trust powers remained at 19 during the period.