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Minority Depository Institutions Program

Introducing the MDI Program Newslink

Office of Minority and Community Development Banking - MDI Program Quarterly Newslink

Inside This Issue

 

Third Quarter Message from the Office of Minority and Community Development Banking Team

Greetings Bankers!

Office of Minority and Community Development Banking Team Photo

The Office of Minority and Community Development Banking (OMCDB) is thrilled to introduce our new quarterly newsletter! In this publication, we strive to share timely and effective updates on MDI Program resources, regulatory guidance, news, and events. 

While we operate as small team at FDIC Headquarters in Washington, D.C., our reach is expansive given the resources available through the various FDIC Divisions and Offices and our partners in the six regional offices. We look forward to enhancing our communication efforts through this newsletter by sharing pertinent information and highlighting MDI activity. 

We welcome your feedback as well.  If you have any suggestions, please feel free to reach out to our office at MDIProgram@fdic.gov.

MDI Overview

Chart - FDIC-insured MDIs by Minority Status as of 6/30/2024

As of June 30, 2024, the total number of MDIs decreased by one to 149. MDI asset totals for the quarter have increased by $3.66 billion (approximately 1 percent) to over $355 billion.  Total assets increased $11.2 billion (3.3 percent) from a year earlier due to increases in total loans of $13.8 billion (6.0 percent) and increases in securities of $4.4 billion (6.8 percent). Total liabilities increased $8.3 billion (2.7 percent) over the previous 12 months, including a $12.6 billion (4.3 percent) increase in deposits. Within total deposits, interest-bearing deposits increased $17.1 billion (8.3 percent), while noninterest bearing deposits decreased $5.2 billion (6.6 percent). Brokered deposits decreased $1.3 billion (8.9 percent) and listing service deposits increased $789 million (34.6 percent) from the previous year.

Second quarter 2024 MDI net income was $1.13 billion, a decrease of $35.3 million (3.0 percent) from second quarter 2023. Declining net interest income and an increase in noninterest expense drove the lower net income. Growth in noninterest income helped offset the annual net income decline. The pretax return on assets (pretax ROA) ratio of 1.64 percent was down 9 basis points from the year-ago quarter but increased from the 1.57 percent reported during first quarter 2024. This ratio is 50 basis points higher than the community bank pretax ROA ratio of 1.14 percent.

Total equity capital increased $3.0 billion (8.8 percent) from the previous year to $36.7 billion, and increased $641.2 million (1.8 percent) from first quarter 2024. Positive retained earnings was the primary contributor to the year-over-year increase in equity capital which increased $1.7 billion (8.7 percent) in the year. Unrealized losses on available-for-sale securities decreased $43.1 million in the quarter and decreased $679.7 million in the year. The majority of MDIs (87.9 percent) reported an increase in equity capital from a year earlier.

Additional information on the financial condition of the U.S. banking system can be found in the FDIC’s Quarterly Banking Profile. 

MDI Program Resources

The FDIC offers a variety of resources to MDIs in an effort to provide for continual engagement through ongoing interaction with the Washington, Regional, and Field Office staff. Below is a recap of activities that occurred during the quarter. 

Technical Assistance

At any time, you may request technical assistance on areas of interest to your institution, such as bank regulations, FDIC policies, examination procedures, applications processes, and more. Technical assistance requests can be submitted to your Regional MDI Coordinator, Case Manager, Review Examiner, or any member of field office staff. An FDIC representative will provide the technical assistance within 90-120 days (often sooner) of the request. Below are examples of technical assistance provided to MDIs during the quarter: 

  • Regional and field office staff provided guidance on Third Party Risk Management programs and processes addressing issues related to Special Categories for Third Parties; onsite visits; business arrangements; financial assessment; background checks; Fourth Parties; Artificial Intelligence; Second Line Review Challenge; and the Bank Service Company Act.
  • Regional office staff provided a review of an institution’s expanded CRA assessment area.
  • Examiners conducted a review of an MDI’s CECL methodology and policy and provided feedback on the model and offered further assistance and guidance to help ensure the effective management in the future. 
  • Regional office staff provided technical assistance related to the FDIC official sign guidance. 
  • Examiners conducted a review of a newly expanded AML/CFT Risk Assessment and provided feedback on the content and potential areas of enhancement.

Please contact your regional office if you would like to request technical assistance or schedule a meeting with regional management to discuss any areas of interest for your institution. 

Outreach

The FDIC welcomes opportunities to build relationships, promote open communication and provide information and resources. Below are a few external outreach activities in which representatives of the MDI Program were able to participate:

  • The Atlanta region hosted its annual MDI Program roundtable on August 14th at the Atlanta regional office. The roundtable provided opportunities for bankers to network with each other and meet with regional management. The agenda included updates on the MDI Program, regional economic performance, AML/CFT hot topics, capital market news, and FDIC Community Affairs activities. 
  • Director of the OMCDB Betty Rudolph met with numerous MDI bankers and organizers, trade associations, and other entities to discuss banker concerns, the MDI designation request process, and opportunities to promote the work of MDIs.

Building Successful Partnerships 

The FDIC has long recognized the important role partnerships play in helping the MDI and CDFI sectors achieve scale and capacity. These partnerships take form in many ways such as forging relationships with larger financial institutions, philanthropic organizations, private-sector companies, and state and local governments to ultimately help better serve communities in need. Sharing successful stories of partnerships can be a catalyst to spur additional partnerships that help facilitate the continued growth of the industry. OMCDB would like to learn more about the successful partnerships you’ve established and we invite you to share with us examples of any partnerships that have helped you achieve your mission. In addition, we would like to learn more about any community projects that you’ve been involved in that have been especially beneficial to the communities you serve.

If you would like to share this information with us, please email a brief description of the partnership or project to MDIProgram@fdic.gov. We look forward to hearing from you. 

Supervisory Updates

The FDIC and other federal regulatory agencies publish regular updates on agency activities and banking developments in the banking system, the latest research and analysis, and educational information for consumers. Below you’ll find interesting supervisory information that may impact your institution. Visit FDIC.gov for information on other developments.

MDIs in the News

Learn about recent activities at MDIs or their communities that are featured in recent articles and interviews:

Upcoming Events

Below are upcoming events that may be of interest to your organization. These events are FDIC-sponsored, events the FDIC will participate in as panelists and/or guest speakers, events where the FDIC will have an exhibit booth, or events that may be of general interest to you. 

 

For more information on the resources available to MDIs, visit the FDIC MDI Program homepage.

To receive updates on future MDI Program Newslink publications, please click HERE to subscribe.

Last Updated: October 9, 2024