Chief Financial Officer's (CFO) Report to the Board
I. Financial Results - Second Quarter 2020
Deposit Insurance Fund (DIF)
- For the six months ending June 30, 2020, the DIF’s comprehensive income totaled $4.3 billion, compared to comprehensive income of $4.8 billion for the same period last year, a decrease of $533 million. While assessment revenue increased year-over-year by $606 million, this was more than offset by the year-over-year change in negative provision for insurance losses of $971 million. The provision balance for 2020 is a negative $35 million, reflecting minor adjustments to loss estimates for prior year failures. In contrast, the provision balance for 2019, a negative $1 billion, reflected large decreases in loss estimates for prior year bank failures, primarily arising from shared-loss liability reductions and unanticipated recoveries from litigation settlements and professional liability claims by receiverships.
- The $1.1 billion unrealized gain on U.S. Treasury securities for the first half of 2020 was a result of yields declining considerably across most maturity sectors of the Treasury yield curve, resulting in increases in the securities’ market values relative to their book values.
- During June, the DIF recognized assessment revenue of $1.6 billion for the estimate of second quarter 2020 insurance coverage. The last application of small bank assessment credits occurred in the first quarter 2020 and this quarter there was no reduction made for credits. Additionally, the DIF recognized a $158 million adjustment for higher-than-estimated collections for the first quarter 2020 insurance coverage, which increased assessment revenue.
- On June 30, 2020, the FDIC collected $1.5 billion in DIF assessments for first quarter 2020 insurance coverage.