The attached report highlights the Corporation's financial activities
and results for the period ending September 30, 2007.
Insurance Fund (DIF) remained financially sound and exhibited healthy
earnings during the first three quarters of 2007. The fund balance
grew by one percent to $51.754 billion during the third quarter of 2007.
comprehensive income grew by $527 million during the third quarter of
2007, increasing the year-to-date (YTD) comprehensive income to $1.589
billion. Comprehensive income for the third quarter 2007 is primarily
composed of interest earned on investment securities of $640 million,
assessment revenue of $170 million, an increase in the unrealized gain
on available-for-sale securities (AFS) of $68 million, which was offset
by $243 million incurred in operating expenses and a $132 million change
in the provision for insurance losses largely due to the failure of NetBank
of Alpharetta, Georgia.
On September 28, 2007, the Office of Thrift Supervision closed
NetBank of Alpharetta, Georgia and named the FDIC as receiver. In September,
DIF recorded a liability for the estimated pending depositor claims and
an offsetting receivable from the receivership for the estimated subrogated
claim (reflecting the estimated insured deposits including brokered deposits)
of $1.834 billion. In addition, an allowance for loss of $108 million
was recorded against the resolution receivable.
For the nine months ending September 30, 2007, Corporate Operating
and Investment Budget related expenditures ran below budget by 13 percent
and 15 percent, respectively. The variance with respect to the Corporate
Operating Budget expenditures was primarily the result of limited resolutions
and receivership activity in the Receivership Funding component of the
budget through the third quarter of 2007. Detailed quarterly reports
are provided separately to the Board by the Capital Investment Review
Committee for those information technology projects that are included
in the Investment Budget.
the pages following is an assessment of each of the three major finance
financial statements, investments, and budget.