Federal Deposit Insurance Corporation
55017th Street, N.W., Washington, D.C. 20429-9990 Deputy to the Chairman and CFO
March 14, 2014
MEMORANDUM TO: The Board of Directors
FROM: Steven O. Appi6~
De ut to the Chairman and C/p Y
Chief Financial Officer
Craig R. JarvillL~'~~
Director, Division of Finance
SUBJECT: Fourth Quarter 2013 CFO Report to the Board
The attached report highlights the Corporation's financial activities and results for the quarter ended
December 31, 2013.
Executive Summary
• During the fourth quarter of 2013, the DIF balance increased by $6.4 billion, from $40.8 billion
to $47.2 billion (audited). This quarterly increase was primarily due to $2.2 billion of
assessment revenue and a $4.6 billion decrease in the provision for insurance losses, partially
offset by $436 million of operating expenses.
• During 2013,the FDIC continued to make significant progress in rebuilding the DIF. Since
year-end 2009 when the fund balance fell to a low point of negative $20.9 billion, the DIF
balance has increased by $68.1 billion to $47.2 billion as of year-end 2013. This increase in
the DIF balance was primarily due to cumulative assessment revenue of $49.2 billion and a
decrease of $15.1 billion in the estimated losses for actual and anticipated bank failures.
• During the fourth quarter of 2013,the FDIC was named receiver for 2failed institutions. The
combined assets at inception for these institutions totaled approximately $159 million with a
total estimated loss of $16 million. The corporate cash outlay during the fourth quarter for
these failures was approximately $21 million.
• Overall Corporate Operating Budget expenditures through December 31, 2013, were 15
percent($396 million) below budget, largely due to substantial under spending in the
Receivership Funding budget component. Spending in that component was $227 million, or
25 percent, under budget, primarily due to lower-than-budgeted spending for contractual
services and operations at the site offailed financial institutions. Spending in the Ongoing
Operations component was $169 million, or 9 percent, under budget, largely due to under
spending for salaries and compensation, contractual services, and travel.
55017th Street, N.W., Washington, D.C. 20429-9990 Deputy to the Chairman and CFO
March 14, 2014
MEMORANDUM TO: The Board of Directors
FROM: Steven O. Appi6~
De ut to the Chairman and C/p Y
Chief Financial Officer
Craig R. JarvillL~'~~
Director, Division of Finance
SUBJECT: Fourth Quarter 2013 CFO Report to the Board
The attached report highlights the Corporation's financial activities and results for the quarter ended
December 31, 2013.
Executive Summary
• During the fourth quarter of 2013, the DIF balance increased by $6.4 billion, from $40.8 billion
to $47.2 billion (audited). This quarterly increase was primarily due to $2.2 billion of
assessment revenue and a $4.6 billion decrease in the provision for insurance losses, partially
offset by $436 million of operating expenses.
• During 2013,the FDIC continued to make significant progress in rebuilding the DIF. Since
year-end 2009 when the fund balance fell to a low point of negative $20.9 billion, the DIF
balance has increased by $68.1 billion to $47.2 billion as of year-end 2013. This increase in
the DIF balance was primarily due to cumulative assessment revenue of $49.2 billion and a
decrease of $15.1 billion in the estimated losses for actual and anticipated bank failures.
• During the fourth quarter of 2013,the FDIC was named receiver for 2failed institutions. The
combined assets at inception for these institutions totaled approximately $159 million with a
total estimated loss of $16 million. The corporate cash outlay during the fourth quarter for
these failures was approximately $21 million.
• Overall Corporate Operating Budget expenditures through December 31, 2013, were 15
percent($396 million) below budget, largely due to substantial under spending in the
Receivership Funding budget component. Spending in that component was $227 million, or
25 percent, under budget, primarily due to lower-than-budgeted spending for contractual
services and operations at the site offailed financial institutions. Spending in the Ongoing
Operations component was $169 million, or 9 percent, under budget, largely due to under
spending for salaries and compensation, contractual services, and travel.
I. Corporate Fund Financial Results(See pages 8 - 9for detailed data and charts.)
Deposit Insurance Fund
• For 2013, the DIF's comprehensive income totaled $14.2 billion compared to comprehensive
income of $21.1 billion during 2012. This $6.9 billion year-over-year decrease was primarily
due to a $6.0 billion decrease in other revenue and a $2.7 billion decrease in assessments,
partially offset by a $1.4 billion decrease in provision for insurance losses.
• The year-over-year decrease of $6.0 billion in other revenue primarily resulted from the
recognition of $5.9 billion in revenue in 2012 for the Debt Guarantee Program fees that were
previously held as systemic risk deferred revenue.
• The provision for insurance losses was negative $5.7 billion for 2013, compared to negative
$4.2 billion for 2012. The negative provision primarily resulted from a $1.0 billion decrease in
the contingent liability for anticipated failures due to the improvement in the financial condition
of troubled institutions and a $4.8 billion decrease in the estimated losses for institutions that
have failed in prior years.
Assessments
• During the fourth quarter of 2013, the DIF recognized $2.2 billion in assessment revenue for
the estimated fourth quarter 2013 insurance coverage. On December 30, 2013, the FDIC
collected $2.4 billion in DIF assessments for third quarter 2013 insurance coverage.
• Continued improvements in banks' CAMELS ratings and financial condition have reduced
banks' risk-based assessment rates, resulting in a decline in DIF assessment revenue.
3.5
3
2.5
'm Z
c
to 1.5
1
0.5
0
Quarterly DIF Assessment Revenue
Mar'12 Jun'12 Sep'12 Dec'12 Mar'13 Jun'13 Sep'13 Dec'13
2
Deposit Insurance Fund
• For 2013, the DIF's comprehensive income totaled $14.2 billion compared to comprehensive
income of $21.1 billion during 2012. This $6.9 billion year-over-year decrease was primarily
due to a $6.0 billion decrease in other revenue and a $2.7 billion decrease in assessments,
partially offset by a $1.4 billion decrease in provision for insurance losses.
• The year-over-year decrease of $6.0 billion in other revenue primarily resulted from the
recognition of $5.9 billion in revenue in 2012 for the Debt Guarantee Program fees that were
previously held as systemic risk deferred revenue.
• The provision for insurance losses was negative $5.7 billion for 2013, compared to negative
$4.2 billion for 2012. The negative provision primarily resulted from a $1.0 billion decrease in
the contingent liability for anticipated failures due to the improvement in the financial condition
of troubled institutions and a $4.8 billion decrease in the estimated losses for institutions that
have failed in prior years.
Assessments
• During the fourth quarter of 2013, the DIF recognized $2.2 billion in assessment revenue for
the estimated fourth quarter 2013 insurance coverage. On December 30, 2013, the FDIC
collected $2.4 billion in DIF assessments for third quarter 2013 insurance coverage.
• Continued improvements in banks' CAMELS ratings and financial condition have reduced
banks' risk-based assessment rates, resulting in a decline in DIF assessment revenue.
3.5
3
2.5
'm Z
c
to 1.5
1
0.5
0
Quarterly DIF Assessment Revenue
Mar'12 Jun'12 Sep'12 Dec'12 Mar'13 Jun'13 Sep'13 Dec'13
2