The attached report highlights the Corporation’s financial activities and results for the quarter ending March 31, 2011.

• For the first quarter of 2011, the Deposit Insurance Fund (DIF) balance increased by $6.3 billion to negative $1.0 billion.  This increase was primarily due to $3.5 billion in assessments earned and a negative $3.1 billion provision for insurance losses, offset by $395 million in operating expenses.  The fund balance has increased in each of the last five consecutive quarters and has risen by a total of $19.8 billion during that time.

• During the first quarter of 2011, the FDIC was named receiver for 26 failed institutions.  The combined assets at inception for these institutions totaled approximately $10.3 billion with a total estimated loss of $1.9 billion. The corporate cash outlay during the first quarter for these failures was approximately $2.6 billion.

• Through March 31, 2011, overall Corporate Operating Budget expenditures were below budget by 22 percent ($199 million).  This variance was primarily the result of lower spending for contractual services and shorter than expected operations at receivership locations in the Receivership Funding component.

On the pages following is an assessment of each of the three major finance areas: financial statements, investments, and budget.