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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

301 Moved Permanently

301 Moved Permanently


I. Corporate Fund Financial Results - Second Quarter 2009

Deposit Insurance Fund (DIF)

  • For the six months ending June 30, 2009, DIF’s comprehensive loss totaled $6.9 billion compared with a comprehensive loss of $7.2 billion for the same period last year. This $288.0 million reduction in the year-over-year loss was primarily due to a $10.6 billion increase in assessment revenue partially offset by a $7.5 billion increase in the provision for insurance losses and a $3.0 billion decrease in the unrealized gain on available-for-sale securities (AFS). The continued sale of U.S. Treasury investments to fund resolution activity also contributed to the change in the comprehensive loss as the realized gain from investment sales rose by $657.5 million while the interest income earned from investments declined by $817.5 million. Other revenue also increased by $374.5 million, largely attributable to the collection of debt issuance surcharges under the TLGP.
  • Assessment revenue was $11.7 billion as of June 30, 2009 compared with $1.1 billion for the comparable period in 2008. A major reason for this $10.6 billion increase was the recognition of a $5.6 billion receivable for the special assessment to be collected on September 30, 2009. In regular assessment activity, DIF collected approximately $2.6 billion for first quarter 2009 insurance coverage on June 30, 2009 and recognized a $3.4 billion receivable for second quarter insurance coverage to be collected on September 30, 2009. Year-to-date regular assessment revenue totaled approximately $6.0 billion compared with approximately $1.1 billion for the same period in 2008. Major factors contributing to this increase in regular assessment revenue year-over-year include changes to the risk-based assessment regulations, ratings downgrade of many institutions (which pushed them into higher assessment rate categories), the decline of the one-time credit available for use, and a larger assessment base.
  • The provision for insurance losses was $18.3 billion as of June 30, 2009 compared with $10.7 billion for the same period in 2008. The total provision consists mainly of the provision for future failures (approximately $8.0 billion) and the losses estimated at resolution for the 45 failures occurring in 2009 (approximately $10.3 billion).
  • The year-to-date unrealized losses on AFS securities were $1.3 billion as of June 30, 2009 compared with unrealized gains of $1.7 billion for the comparable period in 2008. Most of the year-to-date unrealized gain reported in June 2008 resulted from a one-time adjustment of $1.6 billion for the transfer of the held-to-maturity securities to the AFS category. For year-to-date 2009, the unrealized losses reflect a combination of: 1) increasing market yields (which lower the securities’ unrealized gains, thus resulting in an income statement unrealized loss for the period); and 2) the sale of a significant number of AFS securities (the latter of which were offset by the year-to-date 2009 realized gains of $657.5 million).
  • Liabilities due to resolutions were $11.1 billion at June 30, 2009 – an increase of $5.7 billion during the second quarter. This liability represents the amount due to the receiver for assets transferred to the acquirer or bridge bank for use in funding deposits. Two resolutions during the quarter resulted in most of this increase – Bank United, FSB ($3.1 billion) and Silverton Bank ($1.3 billion).


Last Updated 09/02/2009

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