Chief Financial Officer's (CFO) Report to the Board
I. Financial Results - First Quarter 2018
Deposit Insurance Fund (DIF)
- For the first quarter of 2018, the DIF’s comprehensive income totaled $2.3 billion, compared to comprehensive income of $1.8 billion for the same period last year. This $559 million increase was primarily the result of an $830 million decrease in provision for insurance losses and a $113 million increase in assessment revenue, partially offset by a $503 million reduction to comprehensive income from unrealized losses on U.S. Treasury securities (year-to-date 2018 unrealized loss of $496 million versus year-to-date 2017 unrealized gain of $7 million).
- The provision for insurance losses was a negative $65 million for the first quarter of 2018, compared to a positive $765 million for the same period last year. The 2017 provision was primarily attributable to an increase in estimated losses for anticipated failures.
- During the first quarter 2018, DIF incurred a $496 million unrealized loss on its portfolio of U.S. Treasury securities as a result of yields rising dramatically across all maturity sectors of the Treasury yield curve. This rise resulted in declines in the securities’ market values relative to their book values.
- During March, the DIF recognized assessment revenue of $2.9 billion. Of this amount, $1.5 billion represented the estimate for the first quarter 2018 insurance coverage and $1.3 billion represented estimated assessment surcharges on banks with $10 billion or more in assets. Additionally, the DIF recognized a $100 million adjustment for higher-than-estimated collections for the fourth quarter 2017 insurance coverage (regular assessments: $91 million and surcharges: $9 million), which increased assessment revenue. This adjustment was primarily due to higher-than-estimated assessment rates for many large banks.
- On March 30, 2018, the FDIC collected $1.5 billion in DIF regular assessments and $1.3 billion in surcharge assessments for fourth quarter 2017 insurance coverage.