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Executive
Summary -
Third Quarter 2005
This report highlights the
Corporation's financial activities and results for the nine-month
period ending September 30, 2005.
- Overall,
the deposit insurance funds remained financially sound and
exhibited healthy earnings during the first three quarters
of 2005. Additionally,
estimated losses from probable failures at the end of the third
quarter remain at or near historically low levels for both
deposit insurance
funds. As of June 30, 2005, BIF’s and SAIF’s reserve
ratios were 1.26 percent and 1.32 percent, respectively. (Estimated
insured deposits data as of September 30, 2005, are not yet available.)
- There remains substantial
uncertainty about the effects of Hurricane Katrina on the deposit insurance
fund balances. The economic
dislocations as well as the adverse effects on collateral
values and the repayment capacity of borrowers resulting from the hurricane
may
stress the balance sheets of several institutions in the
region. Staff continues to evaluate a range of possible outcomes for
economic damage,
insurance proceeds, and government assistance. At this
point, the FDIC cannot reasonably assess the impact of the additional
risk to the insurance
funds.
- The BIF and SAIF portfolios’ combined book values increased
$1.329 billion, or 2.94 percent, for the year-to-date. Moreover, through
September 30, 2005, the BIF portfolio’s yield increased by 10
basis points, rising to 4.76 percent, while the SAIF portfolio’s
yield increased by 16 basis points, rising to 4.85 percent.
- For the nine months ending September 30, 2005, operating-
and investment-related expenses ran below budget
by 10 percent and 13 percent, respectively. The variance with respect
to the
operating
budget expenses was primarily the result of limited
resolutions
and
receivership activities in the Receivership Funding
component of the operating budget through the third quarter.
On
the pages following is an assessment of each of the three major finance
areas:
financial statements, investments, and budget.
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