Chief Financial Officer's (CFO) Report to the Board
I. Executive Summary - Second Quarter 2017
The attached report highlights the Corporation’s financial activities and results for the quarter ended June 30, 2017.
- During the second quarter of 2017, the Deposit Insurance Fund (DIF) balance increased by $2.7 billion, from $84.9 billion at March 31, 2017 to $87.6 billion at June 30, 2017. The quarterly increase was primarily due to $2.6 billion of assessment revenue, $251 million of interest on U.S. Treasury securities, and a $233 million decrease in provision for insurance losses, partially offset by $450 million of operating expenses.
- The reserve ratio, which is the ratio of the DIF balance to estimated insured deposits, was 1.24 percent for the second quarter 2017, compared to the first quarter 2017 reserve ratio of 1.20 percent.
- During the second quarter of 2017, the FDIC was named receiver for three failed institutions. The combined assets at inception for these failed institutions were $4.6 billion with estimated losses of $1.0 billion. The corporate cash outlay during the second quarter for these failures was approximately $2.6 billion.
- Through June 30, 2017, overall FDIC Operating Budget expenditures were below budget by 5 percent ($53 million). This variance was primarily the result of vacancies in budgeted positions in the Ongoing Operations budget. In the Receivership Funding budget component, the variance was attributable to lower-than-anticipated expenses for outside legal services and facility-related expenses.
On the pages following is an assessment of each of the three major finance areas: financial statements, investments, and budget.