Chief Financial Officer's (CFO) Report to the Board
I. Executive Summary - Fourth Quarter 2017
The attached report highlights the Corporation’s financial activities and results for the quarter ended December 31, 2017.
- During the fourth quarter of 2017, the Deposit Insurance Fund (DIF) balance increased by $2.2 billion, from $90.5 billion at September 30, 2017 to $92.7 billion at December 31, 2017. The quarterly increase was primarily due to $2.7 billion of assessment revenue, partially offset by $444 million of operating expenses.
- The reserve ratio, which is the ratio of the DIF balance to estimated insured deposits, was 1.30 percent for the fourth quarter 2017, compared to the third quarter 2017 reserve ratio of 1.28 percent.
- During the fourth quarter of 2017, the FDIC was named receiver for two failed institutions. The combined assets at inception for these failed institutions were $150 million with estimated losses of $63 million. The corporate cash outlay during the fourth quarter for these failures was approximately $117 million.
- Through December 31, 2017, overall FDIC Operating Budget expenditures were below budget by 11 percent ($227 million). About a third of this variance ($78.5 million) was attributable to underspending in the Receivership Funding budget component due to lower-than-budgeted resolutions and receivership management workload. Most of the remainder of the underspending was in the Ongoing Operations budget component ($147 million) and was primarily the result of higher-than-expected vacancies in budgeted positions during the year. In addition, lower-than-anticipated expenses for facilities, outside counsel, security services (including background checks), and other outside services contributed to the Ongoing Operations variance.
On the pages following is an assessment of each of the three major finance areas: financial statements, investments, and budget.