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Among the significant activities reported in the Letter to Stakeholders for the second quarter of 2007 are the following:

• �౦��Ϸ����-insured commercial banks and savings institutions reported net income of $36.0 billion in the first quarter of 2007, slightly below the $36.9 billion earned in the first quarter of 2006.
• Estimated insured deposits increased by $84.4 billion in the first quarter, the second largest quarterly increase in the past five years.
• The Deposit Insurance Fund (DIF) balance increased by $580 million (1.2%), bringing the fund balance to $50.7 billion at the end of the first quarter.
• The DIF earned assessment income of $94 million in the first quarter of 2007. The �౦��Ϸ���� anticipates the DIF will reach its designated reserve ratio of 1.25% in 2009.
• The federal bank, thrift and credit union regulatory agencies issued the Statement on Subprime Mortgage Lending to address issues relating to certain adjustable-rate mortgage products that may result in payment shock.
• The �౦��Ϸ���� released a new publication, �౦��Ϸ���� Quarterly , which provides a single source for industry data, analysis and research.

Your feedback to the Letter to Stakeholders is encouraged, as are suggestions for improvement. For more information, visit the �౦��Ϸ����'s Web site at .

Distribution:
�౦��Ϸ����-Insured Institutions

Suggested Routing:
Chief Executive Officer

Note:
�౦��Ϸ���� financial institution letters (FILs) may be accessed from the �౦��Ϸ����'s Web site at www.fdic.gov/news/financial-institution-letters/2007/index.html .

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html .

Paper copies of �౦��Ϸ���� financial institution letters may be obtained through the �౦��Ϸ����'s Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).