Chief Financial Officer's (CFO) Report to the Board
I. Financial Results - Fourth Quarter 2017
Deposit Insurance Fund (DIF)
- The DIF’s comprehensive income totaled $9.6 billion for 2017, compared to comprehensive income of $10.6 billion during 2016, a $977 million year-over-year decrease. Although assessment revenue in 2017 of $10.6 billion was $608 million higher than 2016 assessment revenue of $10.0 billion, the lower negative provision for insurance losses of $1.4 billion year-over-year (negative $183 million in 2017 as compared to negative $1.6 billion in 2016) more than offset the effect of the revenue increase.
- The provision for insurance losses was a negative $183 million for 2017, compared to negative $1.6 billion for 2016. The negative provision for 2017 primarily resulted from a $969 million decrease to the estimated losses for prior year failures offset by a $718 million increase for higher-than-anticipated estimated losses for current year failures. The 2016 negative provision was almost fully attributable to reductions in estimated losses for prior year failures. The $969 million decrease in the estimated losses for prior year failures was primarily attributable to (1) a decrease in receivership shared-loss liability cost estimates of $420 million primarily due to 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; (2) $383 million of unanticipated recoveries received, or expected to be received, by receiverships from tax refunds, litigation settlements, and professional liability claims; and (3) a $124 million decrease in receivership contingent legal and representation and warranty liabilities, as well as projected future receivership expenses.
- During December, the DIF recognized assessment revenue of $2.7 billion. Of this amount, $1.4 billion represented the estimate for the fourth quarter 2017 insurance coverage and $1.3 billion represented estimated surcharges on banks with $10 billion or more in assets.
- On December 29, 2017, the FDIC collected $1.4 billion in DIF assessments and $1.2 billion in surcharge assessments for third quarter 2017 insurance coverage.