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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 Results

   •  BIF & SAIF Balance Sheet
   •  BIF & SAIF Income Statement
   •  BIF & SAIF 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 

Summary Trends and Results - First Quarter 2007

Financial Results Comments
I. Financial Statements
  • During the first quarter of 2007, DIF’s net receivables from resolutions declined by $108 million, or 20 percent, to $431 million. This reduction is primarily due to collections from receiverships totaling $112 million to repay payments made by the DIF to cover the obligations to insured depositors ($56 million from Superior Bank, $33 million from Hamilton Bank, and $23 million from Southern Pacific Bank) that was partially offset by the recordation of a $15 million net receivable from the failure of Metropolitan Savings Bank. By year-end 2007, absent any new, substantial failure activity, DIF’s net receivables from resolutions is expected to further decline by approximately $142 million, or 33 percent, to $289 million, assuming favorable resolution of various receivership asset dispositions, litigation efforts, and payment of dividends.
II. Investments
  • The DIF portfolio’s par value increased by 1.22 percent during the first quarter of 2007, and totaled $47.051 billion on March 31, 2007. Moreover, while the securities that were purchased during this period had slightly lower yields than maturing securities, this factor was more than offset by higher yielding overnight investments. Consequently, the DIF portfolio’s yield increased by three basis points during the first quarter of 2007, rising to 4.92 percent as of March 31, 2007, from 4.89 percent as of December 31, 2006.
  • Expectations are for Treasury market yields to continue to trade generally within the range exhibited during the first quarter of 2007, but with the potential for a modest rise from quarter-end levels. This, coupled with a growing DIF portfolio balance, should lead to increased interest revenue over the long run. Over the short run, any increase in yields will accelerate the erosion of existing net unrealized gains on available-for-sale (AFS) securities. Moreover, regardless of changes in yields, existing net unrealized gains will be reduced due to the passage of time (that is, any unrealized gains or losses vanish as AFS securities approach their maturity dates).
III. Budget
  • Approximately $227 million was spent in the Ongoing Operations component of the 2007 Corporate Operating Budget, which was $16 million (7 percent) below the budget for the three months ending March 31, 2007. The Outside Services - Personnel expense category was $7 million below its year-to-date budget, and represents 42 percent of the total Ongoing Operations variance.
  • Approximately $2 million was spent in the Receivership Funding component of the 2007 Corporate Operating Budget, which was $17 million (89 percent) below the budget for the three months ending March 31, 2007. The Outside Services - Personnel expense category was $14 million below its year-to-date budget, and represents 85 percent of the total Receivership Funding variance.


Last Updated 11/27/2007 dofbusinesscenter@fdic.gov