Federal Deposit Insurance Corporation
550 17th Street, N.W., Washington, D.C. 20429-9990 Deputy to the Chairman and CFO
August 23, 2013
MEMORANDUM TO: The Board of Directors
FROM: Steven O. App
Deputy to the Chairman and
Chief Financial Officer
Craig R. Jarvill
Director, Division of Finance
SUBJECT: Second Quarter 2013 CFO Report to the Board
The attached report highlights the Corporation’s financial activities and results for the quarter ended
June 30, 2013.
Executive Summary
During the second quarter of 2013, the Deposit Insurance Fund (DIF) balance increased by
$2.2 billion, from $35.7 billion to $37.9 billion. This quarterly increase was primarily due to
$2.5 billion of assessment revenue and a decrease in the provision for insurance losses of $33
million, partially offset by $439 million of operating expenses.
On June 28, 2013, the DIF refunded $5.9 billion in prepaid assessments to the 5,625 insured
depository institutions that had remaining prepaid assessment balances. This final repayment
marked the end of the prepaid assessment initiative, which began with the collection of $45.7
billion in prepaid assessments on December 30, 2009.
During the second quarter of 2013, the FDIC was named receiver for 12 failed institutions.
The combined assets at inception for these institutions totaled approximately $1.4 billion with a
total estimated loss of $270 million. The corporate cash outlay during the second quarter for
these failures was approximately $296 million.
Through June 30, 2013, overall Corporate Operating Budget expenditures were below budget
by 15 percent ($189 million). Approximately half of this variance was the result of lower-than-
budgeted spending for contractual services and operations at the site of failed financial
institutions in the Receivership Funding budget component. Vacancies in budgeted positions
in both the Ongoing Operations and Receivership Funding budget components were also a
major contributor to the variance.
550 17th Street, N.W., Washington, D.C. 20429-9990 Deputy to the Chairman and CFO
August 23, 2013
MEMORANDUM TO: The Board of Directors
FROM: Steven O. App
Deputy to the Chairman and
Chief Financial Officer
Craig R. Jarvill
Director, Division of Finance
SUBJECT: Second Quarter 2013 CFO Report to the Board
The attached report highlights the Corporation’s financial activities and results for the quarter ended
June 30, 2013.
Executive Summary
During the second quarter of 2013, the Deposit Insurance Fund (DIF) balance increased by
$2.2 billion, from $35.7 billion to $37.9 billion. This quarterly increase was primarily due to
$2.5 billion of assessment revenue and a decrease in the provision for insurance losses of $33
million, partially offset by $439 million of operating expenses.
On June 28, 2013, the DIF refunded $5.9 billion in prepaid assessments to the 5,625 insured
depository institutions that had remaining prepaid assessment balances. This final repayment
marked the end of the prepaid assessment initiative, which began with the collection of $45.7
billion in prepaid assessments on December 30, 2009.
During the second quarter of 2013, the FDIC was named receiver for 12 failed institutions.
The combined assets at inception for these institutions totaled approximately $1.4 billion with a
total estimated loss of $270 million. The corporate cash outlay during the second quarter for
these failures was approximately $296 million.
Through June 30, 2013, overall Corporate Operating Budget expenditures were below budget
by 15 percent ($189 million). Approximately half of this variance was the result of lower-than-
budgeted spending for contractual services and operations at the site of failed financial
institutions in the Receivership Funding budget component. Vacancies in budgeted positions
in both the Ongoing Operations and Receivership Funding budget components were also a
major contributor to the variance.
2
I. Corporate Fund Financial Results (See pages 8 - 9 for detailed data and charts.)
Deposit Insurance Fund
For the six months ending June 30, 2013, the DIF’s comprehensive income totaled $4.9 billion
compared to comprehensive income of $10.9 billion for the same period last year. This $6.0
billion decrease was mostly due to a decrease in other revenue of $4.1 billion, a $1.5 billion
decrease in assessment revenue, and an increase in provision for insurance losses of $263
million.
The year-over-year decrease of $4.1 billion in other revenue was primarily due to the
recognition of $4.0 billion in revenue in June 2012 for the Debt Guarantee Program fees that
were previously held as systemic risk deferred revenue.
The year-over-year decrease of $1.5 billion in assessment revenue was attributable to lower
effective assessment rates. For the first six months of 2013, the average effective assessment
rate was 8.978 basis points compared to the same period in 2012 where it was 10.782 basis
points.
The provision for insurance losses was negative $532 million for the first half of 2013. The
negative provision primarily resulted from a $470 million decrease in the contingent loss
reserve due to lower estimated losses from anticipated future failures and a $54 million
reduction in the estimated losses for institutions that have failed in the current and prior years.
Assessments
During the second quarter of 2013, the DIF recognized a total of $2.5 billion in assessment
revenue. The estimate for second quarter 2013 insurance coverage totaled $2.6 billion.
Additionally, the DIF recognized a net adjustment of $67 million that reduced assessment
revenue. This adjustment consisted of $1 million in prior period amendments and a $68 million
decrease to the estimate for first quarter 2013 insurance coverage recorded at March 31,
2013. The latter adjustment was due to lower than estimated growth in the assessment base
and lower average assessment rates.
On June 28, 2013, the FDIC collected $1.2 billion in DIF assessments for first quarter 2013
insurance coverage. On the same date, the FDIC refunded $5.9 billion of prepaid
assessments to 5,625 financial institutions, bringing the “Refunds of prepaid assessments” line
item to a zero balance at June 30, 2013.
I. Corporate Fund Financial Results (See pages 8 - 9 for detailed data and charts.)
Deposit Insurance Fund
For the six months ending June 30, 2013, the DIF’s comprehensive income totaled $4.9 billion
compared to comprehensive income of $10.9 billion for the same period last year. This $6.0
billion decrease was mostly due to a decrease in other revenue of $4.1 billion, a $1.5 billion
decrease in assessment revenue, and an increase in provision for insurance losses of $263
million.
The year-over-year decrease of $4.1 billion in other revenue was primarily due to the
recognition of $4.0 billion in revenue in June 2012 for the Debt Guarantee Program fees that
were previously held as systemic risk deferred revenue.
The year-over-year decrease of $1.5 billion in assessment revenue was attributable to lower
effective assessment rates. For the first six months of 2013, the average effective assessment
rate was 8.978 basis points compared to the same period in 2012 where it was 10.782 basis
points.
The provision for insurance losses was negative $532 million for the first half of 2013. The
negative provision primarily resulted from a $470 million decrease in the contingent loss
reserve due to lower estimated losses from anticipated future failures and a $54 million
reduction in the estimated losses for institutions that have failed in the current and prior years.
Assessments
During the second quarter of 2013, the DIF recognized a total of $2.5 billion in assessment
revenue. The estimate for second quarter 2013 insurance coverage totaled $2.6 billion.
Additionally, the DIF recognized a net adjustment of $67 million that reduced assessment
revenue. This adjustment consisted of $1 million in prior period amendments and a $68 million
decrease to the estimate for first quarter 2013 insurance coverage recorded at March 31,
2013. The latter adjustment was due to lower than estimated growth in the assessment base
and lower average assessment rates.
On June 28, 2013, the FDIC collected $1.2 billion in DIF assessments for first quarter 2013
insurance coverage. On the same date, the FDIC refunded $5.9 billion of prepaid
assessments to 5,625 financial institutions, bringing the “Refunds of prepaid assessments” line
item to a zero balance at June 30, 2013.