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Executive Summary -
Third Quarter 2004
This report summarizes the
Corporation's financial activities and results for the first nine months
of 2004.
- Overall, the insurance funds remained financially healthy and exhibited moderate to strong earnings during the first nine months of 2004. Additionally, the level of exposure to
probable and reasonably estimable failure activity remained relatively low during this period.
- The push to expedite the liquidation of the remaining non-cash assets of
the FSLIC Resolution Fund (FRF) has yielded tangible results thanks to the
concerted efforts of the Division of Resolutions and Receiverships and the
Legal Division working in concert with the FRF Dissolution Task Force.
- Both operating- and capital investment-related expenses are currently running below budget by 11
percent and 17 percent, respectively. The variance with respect to the
investment-related expenses is primarily the result of unanticipated delays
in several large-scale information systems development projects.
- Staff believes that the Treasury yield environment over the next six months will continue to reflect greater-than-normal economic uncertainties. Assuming that the nascent economy recovery would continue to gather steam, the attendant rise in yields will result in lower unrealized gains for BIF's and SAIF's current holdings of available-for-sale (AFS) securities. However, new investments could be made at these anticipated higher yields that would increase portfolio yields.
On the pages following is an assessment of each the three major finance areas: financial statements,
investments, and budget.
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