Chief Financial Officer's (CFO) Report to the Board
I. Executive Summary - Third Quarter 2020
The attached report highlights the FDIC’s financial activities and results for the quarter ended September 30, 2020.
- During the third quarter of 2020, the Deposit Insurance Fund (DIF) balance rose to $116.4 billion, up $1.8 billion from the June 30, 2020 balance. The quarterly increase was primarily due to $2.0 billion in assessment revenue partially offset by a $284 million unrealized loss on U.S. Treasury securities.
- The reserve ratio, which is the ratio of the DIF balance to estimated insured deposits, was 1.30 percent at September 30, 2020, unchanged from the previous quarter.
- With a fund balance of $116.4 billion as of September 30, 2020, the DIF is currently well-positioned to cover possible short and mid-term risks that may occur. However, there remains uncertainty about the effects of the COVID-19 health crisis on the economy and the banking industry over the long-term. Effects from a weakened economic outlook, elevated unemployment levels, and diminished repayment capacity of borrowers may stress the balance sheets of several institutions across the United States. The FDIC continues to evaluate a range of possible outcomes for economic stress, the risks those outcomes pose to insured financial institutions, and the extent to which such risks may draw on the resources of the DIF.
- There were no financial institution failures during the third quarter of 2020; the last failure occurred on April 3, 2020.
- Through September 30, 2020, overall FDIC Operating Budget expenditures were below the year-to-date budget by about $109.8 million, or seven percent. This variance was primarily the result of underspending of $93 million in the Ongoing Operations budget component. The largest variances were in the Travel expense category ($37.4 million, or 64 percent) due to travel restrictions during the COVID-19 pandemic and the Salaries and Compensation expense category ($24.8 million, or 3 percent) due to unfilled vacancies in authorized positions.