Chief Financial Officer's (CFO) Report to the Board
I. Executive Summary - Fourth Quarter 2018
The attached report highlights the Corporation's financial activities and results for the quarter ended December 31, 2018.
- During the fourth quarter of 2018, the Deposit Insurance Fund (DIF) balance increased by $2.4 billion, from $100.2 billion at September 30, 2018, to $102.6 billion at December 31, 2018. The quarterly increase was primarily due to $1.4 billion in assessment revenue and a $756 million reduction in unrealized losses on U.S. Treasury securities.
- The reserve ratio, which is the ratio of the DIF balance to estimated insured deposits, was 1.36 percent as of December 31, 2018. The reserve ratio was unchanged from September 30, 2018, and increased by 6 basis points during 2018.
- There were no financial institution failures during the fourth quarter of 2018; the last failure occurred on December 15, 2017.
- Through December 31, 2018, overall FDIC Operating Budget expenditures were below budget by 9 percent ($195 million). About $80 million was attributable to underspending in the Receivership Funding budget component due to lower-than-projected resolutions and receivership management workload because there were no bank closings during the year. Most of the remainder of the underspending was in the Ongoing Operations budget component ($112 million). About half of this variance was in the Salaries and Compensation major expenses category and was the result of higher-than-expected vacancies in budgeted positions throughout the year. In addition, lower-than-anticipated expenses for facilities and the deferral of construction projects to 2019 and lower-than-budgeted expenses for outside counsel, security services (including background checks), and other outside services were the primary factors contributing to the Ongoing Operations variance.