ABA staff experts estimate that the FDIC’s insurance fund likely reached 1.15% of insured deposits by the end of June. While the agency will not know for sure until it receives all data from second-quarter Call Reports in mid-August, reaching the 1.15% level would trigger changes to the FDIC’s deposit insurance assessments as required by Dodd-Frank beginning this quarter.
Once the 1.15% threshold is reached, the assessment schedule for banks with less than $10 billion in assets will decline by at least 2 basis points, and up to 5 basis points for banks with high risk ratings. Banks that experience growth in excess of 10% over a one-year period or are heavily funded by brokered deposits will see increased assessments. Banks with loan portfolios concentrated in construction and development or, to a lesser extent, commercial and industrial or consumer loans will also see increases, while banks with concentrations in agricultural finance will pay less. Additionally, the weighting of tier 1 capital in the assessment rate formula will significantly increase.
For the 107 banks with more than $10 billion in assets, crossing the 1.15% threshold will trigger “surcharge assessments” of 4.5 basis points. The surcharge assessments are expected to remain in place for 8 quarters or until the fund reaches at least 1.35%.