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

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

   •  Summary Trends and Results
I. Corporate Fund Financial Statement Results

   •  DIF Balance Sheet
   •  DIF Income Statement
   •  DIF Statements of Cash Flows
   •  FRF Statements of Cash Flows
II. Investments Results & Prospective Strategies

   •  Deposit Insurance Fund Portfolio Summary
   •  Approved Investment Strategy
III. Budget Results

   •  Budget & Expenditures by Major Expense Categories
   •  Budget & Expenditures by Budget Component, Division & Office
Printable Version

I. Corporate Fund Financial Statement Results - First Quarter 2007


  • For the three months ending March 31, 2007, DIF’s comprehensive income totaled $580 million compared to $596 million last year, a decrease of 2.7 percent. Excluding the recognition of exit fees earned of $346 million (a one-time adjustment), comprehensive income actually rose by $330 million from a year ago. This year-over-year increase is primarily due to increases in the following line items: $89 million increase in assessments earned, $89 million increase in interest earned on investment securities, and a $138 million higher contribution to year-to-date comprehensive income from unrealized gain/(loss) on AFS securities, net.
  • DIF reported an 18.6 percent ($89 million) increase in interest income during the first quarter of 2007 compared to a year ago, primarily stemming from higher inflation compensation related to the DIF’s holdings of Treasury Inflation-Protected Securities (TIPS). In addition, the DIF reported an unrealized gain on AFS securities of $81 million during the first quarter of 2007, compared to an unrealized loss of $57 million during the first quarter of 2006. The first quarter 2007 unrealized gain stemmed from a decline in market yields, despite the lower duration for the AFS securities held in the DIF ’s investment portfolio.
  • DIF recorded a $94 million receivable for estimated net deposit insurance assessments due from insured institutions for first quarter 2007 insurance coverage. Starting this quarter, the FDIC must estimate assessment revenue, and establish a corresponding receivable, because assessment premiums are now collected a quarter after the insurance coverage period (a change from the previous 'payment in advance' requirement). The FDIC has developed an estimation methodology based on institution assessment base and rate results, and available assessment credits, for the prior quarter, adjusted for significant changes in the current quarter and a modest deposit growth factor. The first quarter 2007 receivable of $94 million was the result of netting $820 million in assessment credits estimated to be used by financial institutions against estimated gross assessment revenue of $914 million. However, this estimate may differ from the amount collected in June 2007 since the invoice amount will be based on actual first quarter 2007 assessment base, rate, and credit results.


  • FRF reported a net loss of $19 million for the first quarter of 2007 as a result of several offsetting factors. The FRF incurred $107.3 million in Goodwill litigation expenses due to the payment of a $32.8 million Goodwill judgment and the accrual of a $74.5 million estimated loss for a second Goodwill case. These Goodwill litigation expenses were partially offset by 1) $41 million in interest earned on U.S. Treasury overnight securities, 2) $20 million in criminal restitution income, 3) $13 million in FSLIC assistance agreement tax benefits, and 4) the net effect of a $22.5 million payment for a Guarini litigation settlement and the reversal of a $27.1 million loss reserve for this same case. This Guarini settlement concludes the last of the eight Guarini cases originally filed against the government seeking damages.

Last Updated 05/14/2007

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