FDIC Quarterly Banking Profile
DEPOSIT INSURANCE FUND TRENDS
THIRD QUARTER 2018
- Deposit Insurance Fund Increases by $2.6 Billion
- DIF Reserve Ratio Rises 3 Basis Points to 1.36 Percent
- Reserve Ratio Reaches Minimum Required by Dodd-Frank—Large Bank Surcharge Ends
The Deposit Insurance Fund (DIF) balance increased by $2.6 billion, to $100.2 billion, during the third quarter. Assessment income of $2.7 billion, which includes temporary assessment surcharges on large banks, drove the fund balance increase. Interest on investments of $433 million, a negative provision for insurance losses of $121 million, and other miscellaneous income of $2 million also added to the fund balance. Operating expenses of $434 million and unrealized losses on available-for-sale securities of $234 million partly offset the increase in the fund balance.
The deposit insurance assessment base—average consolidated total assets minus average tangible equity—increased by 0.8 percent in the third quarter and by 2.6 percent over 12 months.1 2 Total estimated insured deposits increased by 0.3 percent in the third quarter of 2018 and by 3.8 percent year-over-year. The DIF’s reserve ratio (the fund balance as a percent of estimated insured deposits) was 1.36 percent on September 30, up from 1.33 percent at June 30, 2018, and 1.27 percent on September 30 of last year. The September 30, 2018, reserve ratio of 1.36 percent is the highest since December 31, 2000, when the reserve ratio was at 1.37 percent.3
As of September 30, 2018, the reserve ratio exceeded the required minimum of 1.35 percent set by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Per the Final Rule adopted by the FDIC Board of Directors on March 15, 2016, to increase the DIF to the statutory required minimum of 1.35 percent by December 31, 2018, the temporary surcharge imposed on large banks will end effective October 1, 2018.4 5
Small banks will receive credits to offset the portion of their assessments that helped to raise the reserve ratio from 1.15 percent to 1.35 percent.6 (See the Final Rule for a detailed explanation of small bank credits.7)
The total amount of small bank credits is estimated to be approximately $750 million. When the reserve ratio is at or above 1.38 percent, the FDIC will automatically apply a small bank’s credits to reduce its regular assessment up to the entire amount of the assessment.
TABLE II-C. Problem Institutions and Failed Institutions