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I.
Corporate Fund Financial Statement Results -
Second Quarter 2008
DIF
- For the six months ending June 30, 2008, DIF reported a comprehensive
loss of $7.196 billion compared with comprehensive income of $1.062 billion
for the same period last year. This $8.258 billion year-over-year decrease
was primarily due to a $10.822 billion increase in the provision for
insurance losses, partially offset by a $1.767 billion increase in the
unrealized gain on available-for-sale investments and an $854 million
increase in assessment revenue.
- The provision for insurance losses was $10.746 billion at
June 30, 2008, compared with a negative $76 million for the comparable
period in 2007. Approximately 82% of this change, ($8.9 billion of the
$10.822 billion) resulted from the contingent loss reserve estimate recorded
in the second quarter for IndyMac Bank.
- The unrealized gain on AFS securities was $1.686 billion
as of June 30, 2008, compared with an unrealized loss of $81 million
at June 30, 2007. The major reason for this increase was a $1.630 billion
cumulative adjustment made in June 2008 to mark all previously designated
HTM securities to market. Management determined that the FDIC could no
longer assert that it had the positive intent and ability to hold these
securities to maturity as they might be sold in response to a liquidity
need. All DIF investments are now shown on the financial statements at
fair market value.
- Assessment revenue
was $1.088 billion as of June 30, 2008, compared with $234 million
for the same period last year. The continuing
increase in assessment revenue reflects the declining balance of
one-time assessment credits available. DIF collected $455 million in
assessments
for first quarter 2008 insurance coverage which was $13 million
higher than the estimate recorded at the end of the first quarter 2008.
DIF
also recorded a $627 million receivable for estimated net assessments
due from insured institutions for second quarter 2008 insurance
coverage.
FRF
- FRF’s net income
was $14 million for the second quarter of 2008 compared to a $55
million loss incurred during the first quarter.
The additional income resulted primarily from an increase of
$16 million in interest on U.S. Treasury obligations and a recovery
of $10 million
in tax benefits, offset by a $14 million increase in the provision
for losses.
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