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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

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Chief Financial Officer's (CFO) Report to the Board

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Executive Summary - Fourth Quarter 2008

This report highlights the Corporation’s financial activities and results for the period ending December 31, 2008.

  • The Deposit Insurance Fund (DIF) balance (unaudited) decreased by 45.4 percent ($15.699 billion) to $18.889 billion during the fourth quarter of 2008. The fourth quarter 2008 decrease was primarily due to the $17.550 billion increase in the provision for insurance losses mainly related to anticipated failures, offset by a $996 million increase in assessment revenue, a $551 million increase in the unrealized gain on available-for-sale securities, a $302 million increase in the realized gain on sale of securities, and a $277 million increase in interest earned on investment securities.
  • The DIF reserve ratio is 0.40 percent as of December 31, 2008, which is 82 basis points lower than the 1.22 percent reserve ratio at year-end 2007. This is the lowest reserve ratio for the combined bank and thrift insurance fund since June 30, 1993, when the reserve ratio was 0.28 percent.
  • During the fourth quarter of 2008, the FDIC was named receiver for 12 failed institutions: Main Street Bank of Northville, Michigan; Meridian Bank of Eldred, Illinois; Alpha Bank & Trust of Alpharetta, Georgia; Freedom Bank of Bradenton, Florida; Security Pacific Bank of Los Angeles, California; Franklin Bank, SSB of Houston, Texas; The Community Bank of Loganville, Georgia; Downey Savings & Loan, FA, of Newport Beach, California; PFF Bank & Trust of Pomona, California; First Georgia Community Bank of Jackson, Georgia; Sanderson State Bank of Sanderson, Texas; and Haven Trust Bank of Duluth, Georgia. The combined assets at inception for these institutions totaled approximately $25 billion with an estimated loss totaling $4 billion. The corporate cash outlay during the fourth quarter for these failures was $7 billion. Additionally, the FDIC and the acquirer of both Downey Savings and PFF Bank entered into a loss share agreement.
  • For the year ending December 31, 2008, Corporate Operating and Investment related expenditures ran below budget by 1 percent ($12 million) and 13 percent ($4 million), respectively. The variance with respect to the Corporate Operating Budget was primarily the result of lower spending for contractual services in the Ongoing Operations component of the budget.
  • Spending in the Ongoing Operations component was 1 percent ($12 million) under the approved budget, while spending in the Receivership Funding component exceeded the approved budget by approximately 0.3 percent ($464,000). Receivership Funding spending during December substantially exceeded prior month spending levels largely due to increased expenses associated with failures that occurred during the first nine months of the year.

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

Last Updated 03/17/2009

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