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Executive
Summary - Fourth Quarter 2008
This
report highlights the Corporation’s financial activities
and results for the period ending December 31, 2008.
- The
Deposit Insurance Fund (DIF) balance (unaudited) decreased by
45.4 percent ($15.699 billion) to $18.889 billion during the
fourth quarter of 2008. The fourth quarter 2008 decrease was
primarily due to the $17.550 billion increase in the provision
for insurance losses mainly related to anticipated failures,
offset by a $996 million increase in assessment revenue, a $551
million increase in the unrealized gain on available-for-sale
securities, a $302 million increase in the realized gain on sale
of securities, and a $277 million increase in interest earned
on investment securities.
- The
DIF reserve ratio is 0.40 percent as of December 31, 2008, which
is 82 basis points lower than the 1.22 percent reserve ratio
at year-end 2007. This is the lowest reserve ratio for the combined
bank and thrift insurance fund since June 30, 1993, when the
reserve ratio was 0.28 percent.
- During
the fourth quarter of 2008, the FDIC was named receiver for
12 failed institutions:
Main Street Bank of Northville, Michigan; Meridian Bank of Eldred,
Illinois; Alpha Bank & Trust of Alpharetta, Georgia; Freedom
Bank of Bradenton, Florida; Security Pacific Bank of Los Angeles,
California; Franklin Bank, SSB of Houston, Texas; The Community
Bank of Loganville, Georgia; Downey Savings & Loan, FA, of
Newport Beach, California; PFF Bank & Trust of Pomona, California;
First Georgia Community Bank of Jackson, Georgia; Sanderson State
Bank of Sanderson, Texas; and Haven Trust Bank of Duluth, Georgia.
The combined assets at inception for these institutions totaled
approximately $25 billion with an estimated loss totaling $4
billion. The corporate cash outlay during the fourth quarter
for these failures was $7 billion. Additionally, the FDIC and
the acquirer of both Downey Savings and PFF Bank entered into
a loss share agreement.
- For the
year ending December 31, 2008, Corporate Operating and Investment
related expenditures ran below budget by 1 percent ($12 million)
and 13 percent
($4 million), respectively. The variance with respect to the
Corporate Operating Budget was primarily the result of lower
spending for contractual
services in the Ongoing Operations component of the budget.
- Spending
in the Ongoing Operations component was 1 percent ($12 million)
under the approved budget, while spending in the Receivership
Funding component exceeded the approved budget by approximately
0.3 percent ($464,000). Receivership Funding spending during
December substantially exceeded prior month spending levels largely
due to increased expenses associated with failures that occurred
during the first nine months of the year.
On
the pages following is an assessment of each of the three major finance
areas: financial statements, investments, and budget.
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