Chief Financial Officer's (CFO) Report to the Board
I. Financial Results - Third Quarter 2018
Deposit Insurance Fund (DIF)
- During the nine months ending September 30, 2018, the DIF’s comprehensive income totaled $7.5 billion compared to comprehensive income of $7.3 billion for the same period last year. The slight increase was largely the result of a $400 million increase in interest on U.S. Treasury securities, a $347 million decrease in provision for insurance losses, and a $237 million increase in assessment revenue. The increases were almost fully offset by an $854 million increase in unrealized losses on U.S. Treasury securities.
- The provision for insurance losses was a negative $327 million for the first nine months of 2018, compared to positive $20 million for the same period last year. The negative provision for 2018 primarily resulted from a $333 million decrease to the estimated losses for prior year failures. This adjustment was attributable to two primary components: a $181 million reduction to receivership shared-loss liability cost estimates resulting from lower-than-anticipated losses on covered assets, reductions in shared-loss cost estimates from the early termination of shared-loss agreements (SLAs) during the year, and unanticipated recoveries from SLAs where the commercial loss coverage has expired but the recovery period remains active; and $115 million of unanticipated recoveries from tax refunds, litigation settlements, and professional liability claims received by receiverships.
- During September, the DIF recognized assessment revenue of $2.7 billion. Of this amount, $1.4 billion represented the estimate for the third quarter 2018 insurance coverage and $1.3 billion represented estimated surcharges on banks with $10 billion or more in assets. Additionally, the DIF recognized a $19 million adjustment, which increased assessment revenue.
- On September 28, 2018, the FDIC collected $1.4 billion in DIF regular assessments and $1.3 billion in surcharge assessments for second quarter 2018 insurance coverage.