2016 Annual Report

III. Financial Highlights

In its role as deposit insurer of financial institutions, the FDIC promotes the safety and soundness of IDIs. The following financial highlights address the performance of the Deposit Insurance Fund.

DEPOSIT INSURANCE FUND PERFORMANCE

The DIF balance was $83.2 billion at year-end 2016, an increase of $10.6 billion from $72.6 billion at year- end 2015. The DIF’s comprehensive income totaled$10.6 billion for 2016 compared to comprehensive income of $9.8 billion during 2015. The $741 million year-over-year increase was primarily due to a $1.2 billion increase in assessment revenue and a $248 million increase in interest revenue, partially offset by a $683 million lower negative provision for insurance losses.

Assessment revenue was $10.0 billion for 2016, as compared to $8.8 billion for 2015. The combination of assessment surcharges on larger institutions and lower regular assessment rates for all IDIs resulted in the net increase in assessment revenue of $1.2 billion.

The DIF’s interest revenue on U.S. Treasury securities for 2016 was $671 million compared to interest revenue of $423 million in 2015. The $248 million year-over-year increase reflects not only a larger investment portfolio balance, but also new, higher- yielding investments. The DIF’s cash and U.S. Treasury investment portfolio balance was $74.8 billion at year-end 2016, an increase of $11.4 billion from the year-end 2015 balance of $63.4 billion that was primarily due to assessment collections of $9.5 billion and recoveries from resolutions of $3.6 billion, less operating expenses paid of $1.7 billion and resolution disbursements of $503 million.

The provision for insurance losses was negative $1.6 billion for 2016, compared to negative $2.3 billion for 2015. The negative provision for 2016 primarily resulted from a decrease of $1.7 billion in the estimated losses for institutions that failed in current and prior years, partially offset by an increase of $97 million in the contingent liability for anticipated failures. The $1.7 billion decrease in the estimated losses from failures was primarily attributable to (1) unanticipated recoveries of $545 million in litigation settlements, professional liability claims, and tax refunds by the receiverships; (2) a $584 million decrease in the receiverships’ shared-loss liability; (3) a $406 million decrease in projected future receivership expenses and receivership legal and representation and warranty liabilities; and (4) a $231 million decrease resulting from greater-than-anticipated collections from receiverships’ asset sales and updated estimated recovery rates applied to the remaining assets in liquidation. For the receiverships’ shared-loss liability, the decrease in 2016 was primarily due to both the early termination of numerous shared-loss agreements (SLAs) during the period, which resulted in lower-than-anticipated losses on covered assets, and the unanticipated recoveries from SLAs where the commercial loss coverage has expired but the recovery period remains active.

ESTIMATED DIF INSURED DEPOSITS

SOURCE: Commercial Bank Call and Thrift Financial Reports Note: Beginning in fourth quarter 2010 through fourth quarter 2012, estimated insured deposits include the entire balance of noninterest-bearing transaction accounts.

DEPOSIT INSURANCE FUND RESERVE RATIOS

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