2011

A N N U A L R E P O R T

F E D E R A L D E P O S I T I N S U R A N C E C O R P O R A T I O N
Mission

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public 

confidence in the nation’s financial system by:

★ insuring deposits,

★ examining and supervising financial institutions for safety and soundness and consumer protection, and 

★ managing receiverships.

Vision

The FDIC is a recognized leader in promoting sound public policies, addressing risks in the nation’s financial system, and carrying out its 

insurance, supervisory, consumer protection, and receivership management responsibilities.

Values

The FDIC and its employees have a tradition of distinguished public service. Six core values guide us in accomplishing our mission:

1. Integrit

We adhere to the highest ethical and professional standards.

2. Competenc

We are a highly skilled, dedicated, and diverse workforce that is empowered to achieve outstanding results.

3. Teamwor

We communicate and collaborate effectively with one another and with other regulatory agencies.

4. Effectiven

We respond quickly and successfully to risks in insured depository institutions and the financial system.

5. Accounta

We are accountable to each other and to our stakeholders to operate in a financially responsible and operationally effective manner.

6. Fairne

We respect individual viewpoints and treat one another and our stakeholders with impartiality, dignity, and trust.
2011 ANNUAL REPORT
office of the act

April 30, 2012

Dear Sir,

In accordance with:

★ the provisions of section 17(a) of the Federal Deposit Insurance Act,

★ the Chief Financial Officers Act of 1990, Public Law 101-576, 

★ the Government Performance and Results Act of 1993 (as amended) and the GPRA Modernization Act of 2010,

★ the provisions of Section 5 (as amended) of the Inspector General Act of 1978, and

★ the Reports Consolidation Act of 2000,

The Federal Deposit Insurance Corporation (FDIC) is pleased to submit its 2011 Annual Report (also referred to as the 

Performance and Accountability Report), which includes the audited financial statements of the Deposit Insurance Fund (DIF) 

and the Federal Savings and Loan Insurance Corporation (FSLIC) Resolution Fund (FRF). 

In accordance with the Reports Consolidation Act of 2000, the FDIC assessed the reliability of the performance data 

contained in this report. No material inadequacies were found, and the data are considered to be complete and reliable. 

Based on internal management evaluations, and in conjunction with the results of independent financial statement audits, 

the FDIC can provide reasonable assurance that the objectives of Section 2 (internal controls) and Section 4 (financial 

management systems) of the Federal Managers’ Financial Integrity Act of 1982 have been achieved, and that the FDIC has 

no material weaknesses. However, the U.S. Government Accountability Office did identify a significant control deficiency 

in the loss-share area. The FDIC has efforts underway to address the deficiency. We are committed to maintaining effective 

internal controls corporate-wide in 2012. 

Sincerely,

Martin J. Gruenberg

Acting Chairman

The President of the United States

The President of the United States Senate

The Speaker of the United States House of Representatives

Federal Deposit Insurance Corporat

550 17th Street NW, Washington, DC 20429 Office of the Acting C

2
2011

A N N U A L R E P O R T

table 

3

Message from the Acting Chairman 5

Message from the Chief Financial Officer 9

1. Management’s Discussion and Analysi  

The Year in Review . 

Insurance  .

Supervision and Consumer Protection  .

Resolutions and Receiverships  

Effective Management of Strategic Resources   

2. Financial Highlight .

Deposit Insurance Fund Performance . 

Corporate Operating Budget  .

Investment Spending . 

3. Performance Results Summar  

Summary of 2011 Performance Results by Program . 

2011 Budget and Expenditures by Program  .

Performance Results by Program and Strategic Goal . 

Prior Years’ Performance Results . 

4. Financial Statements and Note  

Deposit Insurance Fund (DIF)  

FSLIC Resolution Fund (FRF) . 

Government Accountability Office’s Audit Opinion  . 

Management’s Response . 

Overview of the Industry . 

5.Corporate Management Control 12

Management Report on Final Actions . 

6. Appendice  1

A. Key Statistics .  

B. More About the FDIC . 

C. Office of Inspector General’s Assessment of the Management and 

Performance Challenges Facing the FDIC . 

table 
FDIC by th

INSURING DEPOSITS. EXAMININ

MANAGING RECEIVERSHIPS. EDUCATING CONSUMERS. In its unique role as deposit insurer of banks and savings associations, and in cooperatio

state and federal regulatory agencies, the FDIC promotes the safety and soundness of the U.S. financia

system and insured depository institutions by identifying, monitoring, and addressing risks to the Deposit 

Insurance Fund (DIF)

The FDIC promotes public understanding and the development of sound public policy by providing timely 

and accurate financial and economic information and analyses. It minimizes disruptive effects from the

failure of financial institutions. It assures fairness in the sale of financial products and the provision of

financial services

The FDIC’s long and continuing tradition of excellence in public service is supported and sustained by a 

highly skilled and diverse workforce that continuously monitors and responds rapidly and successfully 

to changes in the financial environment

At the FDIC, we are working together to be the be

FDIC by the

DEPOSIT INSURANCE LIMIT

$250,000

ELECTRONIC DEPOSIT INSURANCE 

ESTIMATOR USER SESSIONS

277,000

FAILED BANKS 

RESOLVED

92 INSURED 

DEPOSIT 

DOLLARS 

LOST 0

INSURED DEPOSITORY INSTITUTIONS

7,357 DEPOSIT INSURANCE 

COVERAGE INQUIRIES 

ANSWERED

121,800

LANGUAGES FOR 

MONEY SMART

CURRICULUM 9

CONSUMER COMPLAINTS 

AND INQUIRIES ANSWERED

21,684

NEW BANK ACCOUNTS OPENED THROUGH 

THE ALLIANCE FOR ECONOMIC INCLUSION

171,591

BANKS PARTICIPATING IN THE MODEL 9SAFE ACCOUNT PILOT PROGRAM

FDIC AUTHORIZED FULL-TIMEEQUIVALENT EMPLOYEES

9,269

106INTERNATIONAL VISITS 

TO THE FDIC

825 WITH OVER VISITORS

48 REPRESENTING JURISDICTIONS

FDIC by th
2011

A N N U A L R E P O R T

5

MESSAGE FROM THE a

I am pleased 

to present 

the Federal 

Deposit Insurance 

Corporation’s (FDIC) 

2011 Annual Report. I 

assumed my duties as 

Acting Chairman on 

July 9, 2011, upon the 

departure of Chairman 

Sheila C. Bair at the 

end of her term. 

During 2011, our nation’s banking system continued 

to make gradual but steady progress in recovering from 

the financial market turmoil and severe recession that 

unfolded from 2007 through 2009. Over the past two 

years, the banking industry has undergone a difficult 

process of balance sheet strengthening. Capital has been 

increased, asset quality has improved, and banks have 

bolstered their liquidity. The industry is now in a much 

better position to support the economy through expanded 

lending. However, levels of troubled assets and problem 

banks are still high. And while the economy is showing 

signs of improvement, downside risks remain a concern.

Despite these challenges, bank performance indicators 

did improve during 2011, particularly in terms of industry 

earnings and improved credit quality of loans on the 

books of FDIC-insured institutions. The number of 

institutions on the FDIC’s problem bank list declined for 

three consecutive quarters, the Deposit Insurance Fund 

(DIF) moved into positive territory, and significantly 

fewer banks failed in 2011 compared to 2010. However, 

most of the improvement in earnings over the last two 

years has been the result of lower loan-loss provisions 

reflecting improved credit quality. Sustainable bank 

industry earnings gains will depend on increased lending, 

consistent with sound underwriting. Prudent loan growth 

is a necessary condition for a stronger economy. 

Although challenges related to the recovery remain, the 

FDIC is well positioned to carry out its primary mission 

of upholding public confidence in the nation’s financial 

system by protecting insured depositors. During 2011, the 

FDIC insured a record $7.0 trillion of deposits in over half 

a billion accounts at more than 7,000 institutions, with 

no losses of insured funds. Other notable achievements 

during 2011, discussed in further detail below, include 

returning the DIF to a positive balance, largely completing 

the core rulemaking necessary to carry out the FDIC’s 

responsibilities under the Dodd-Frank Wall Street 

Reform and Consumer Protection Act (Dodd-Frank) 

and implementing the FDIC’s new authorities related to 

systemic resolutions, launching a series of initiatives to 

deepen our understanding of the unique role community 

banks perform in our nation’s economy, and continuing 

our work to expand access to mainstream financial 

services to all Americans.

A great strength of the agency is its highly dedicated and 

motivated workforce. The FDIC’s employees understand 

the agency’s mission and how it relates to what they do. In 

2011 the FDIC was ranked number one on the Best Places 

to Work in the Federal Government list of 33 large agencies, 

moving up two positions from 2010. This recognition 

is a tribute to the commitment and dedication of the 

FDIC workforce and to the leadership of former FDIC 

Chairman Sheila Bair. 

Strengthening th

and Resolv

The FDIC has made significant progress in rebuilding the 

Deposit Insurance Fund (DIF) and achieving the goals 

set by Dodd-Frank reforms. In 2010, the FDIC Board 

approved a comprehensive, long-term plan for fund 

Message from the
MESSAGE FROM THE a

6

management based on the new law and an FDIC historical 

analysis of DIF losses. Additionally, the DIF balance—the 

net worth of the fund—rose to $11.8 billion at the end of 

2011 compared with negative $7.4 billion a year earlier. 

Assessment revenue and fewer bank failures drove growth 

in the fund balance. 

While 2010 was the peak year for problem and failed 

institutions, substantial work remained in 2011, with an 

additional 92 failures, continuing post-failure receivership 

management, more examination hours because of the 

elevated number of problem institutions, and staffing up 

for new responsibilities under Dodd-Frank.

Accordingly, the FDIC’s authorized workforce for 2011 

stood at 9,269 full-time equivalent positions compared 

with 9,029 the year before. The FDIC Board approved 

a 2011 Corporate Operating Budget of just under $3.9 

billion, a slight decrease from 2010.

For 2012, the Board reduced the budget by 15.4 percent 

to $3.3 billion and reduced authorized staffing by 6 

percent to 8,704 positions in anticipation of a substantial 

drop in failure activity in the years ahead. The FDIC also 

announced plans to close two of three temporary satellite 

offices, which had been established to address crisisrelated workload. The Irvine, California, office closed 

in January 2012 and the Schaumburg, Illinois, office is 

set to close in September 2012. Contingent resources 

are included in the budget to ensure readiness should 

economic conditions unexpectedly deteriorate.

During 2011, the FDIC continued using strategies 

instituted in 2009, including the use of loss-share 

agreements, to protect the depositors and customers 

of failed institutions at the least cost to the DIF. The 

FDIC actively marketed failing institutions, and the vast 

majority were sold to healthier entities. These strategies 

preserved banking relationships in many communities 

while providing depositors and customers with 

uninterrupted access to essential banking services. 

Progrss on

of Systemi

Financia

The Dodd-Frank Act included far-reaching changes to 

make financial regulation more effective in addressing 

systemic risks. The law greatly expanded the FDIC’s 

authority to resolve systemically important financial 

institutions (SIFIs).

One of the FDIC’s top priorities has been preparing for a 

resolution of a large SIFI. The FDIC was given significant 

new responsibilities under the Dodd-Frank Act to resolve 

SIFIs. Specifically, these include an Orderly Liquidation 

Authority to resolve the largest and most complex bank 

holding companies and non-bank financial institutions, 

if necessary, and a requirement for resolution plans for 

covered financial companies that will give regulators 

additional tools with which to manage the failure of large, 

complex enterprises. 

In late 2010, the FDIC established the Office of 

Complex Financial Institutions (OCFI), to carry out 

three core functions:

★Monitor risk within and across these large, complex 

firms from the standpoint of resolution; 

★ Conduct resolution planning and the development of 

strategies to respond to potential crisis situations; and 

★ Coordinate with regulators overseas regarding 

the significant challenges associated with crossborder resolution. 

During 2011, OCFI began developing its own resolution 

plans in order to be ready to resolve a failing systemic 

financial company. These internal FDIC resolution plans, 

developed pursuant to the Orderly Liquidation Authority, 

provided under Title II of Dodd-Frank, apply many of 

the same powers that the FDIC has long used to manage 

failed-bank receiverships to a failing SIFI.

If the FDIC is appointed as receiver of such an institution, 

it will be required to carry out an orderly liquidation in a 
2011

A N N U A L R E P O R T

MESSAGE FROM THE a

7

manner that maximizes the value of the company’s assets 

and ensures that creditors and shareholders appropriately 

bear any losses. The goal will be to close the institution 

without putting the financial system at risk.

This internal resolution planning work is the foundation 

of the FDIC’s implementation of its new responsibilities 

under the Dodd-Frank Act.

Developing a credible capacity to place a SIFI into an 

orderly resolution process is essential to subjecting these 

companies to meaningful market discipline. Without this 

capability, these institutions—which by definition pose 

a risk to the financial system—create an expectation of 

public support to avert failure. That distorts the financial 

marketplace, giving these institutions a competitive 

advantage that allows them to take on even greater risk 

and creating an unlevel playing field for other financial 

institutions that are not perceived as benefiting from 

potential public support. There is a very strong public 

interest in the FDIC developing the capability to carry out 

its new systemic resolution responsibilities in a credible 

and effective way. 

Community Banking

In late 2011, the FDIC established a series of initiatives 

focusing on the future of community banking in the 

United States. The FDIC is the lead federal regulator for 

the majority of community banks in the United States and 

the insurer of all. As such, the FDIC has a responsibility 

to use its resources to gain a better understanding of the 

challenges facing community banks and to share that 

understanding with the banks as well as the general public. 

Community banks play a crucial role in the financial 

system of the United States. Community banks with 

assets of less than $1 billion account for a little more 

than ten percent of the banking assets in our country, 

but provide nearly forty percent of all the small loans 

that insured financial institutions make to businesses 

and farms. Given the labor intensive, highly customized 

nature of many small business loans, it is not clear that 

large institutions would easily fill that critical credit need 

if community banks were not there. Community banks 

also play a crucial role in extending credit and providing 

financial services in rural communities, small towns, and 

inner-city neighborhoods. In many of those localities, if 

not for the community bank there would be no easy access 

to an insured financial institution. There is a clear public 

interest in maintaining a strong community bank sector 

in the U.S. financial system.

The first of the FDIC’s initiatives in this area was a 

national conference in early 2012 on the Future of 

Community Banking. Following on the conference, the 

FDIC plans to hold a series of roundtables with groups 

of community bankers in each of the FDIC’s six regions 

around the country during 2012. The FDIC’s most senior 

executives and I will attend each roundtable to hear first 

hand about the concerns of bankers and what the FDIC 

can do to respond to those concerns. 

As part of the initiatives, the FDIC’s Division of Insurance 

and Research is undertaking a comprehensive review 

of the evolution of community banking in the United 

States over the past twenty-five years, to identify the key 

challenges facing community banks as well as stories of 

successful community bank business models, and draw 

conclusions from that analysis that may be useful for 

community banks going forward. The agency is also 

undertaking a review of the bank examination process 

for both risk management and compliance supervision, 

and the process for promulgating and releasing 

rulemakings and guidance, to identify potential process 

and communication improvements while maintaining 

supervisory standards. 

Protectin Con

Accessto Bank

Deposit insurance is essentially about making people 

feel secure about putting their money into financial 

institutions. However, accessing insured financial 

institutions has proven elusive for millions of people in 

our country. 
MESSAGE FROM THE a

8

In 2009, pursuant to a statutory provision, the FDIC 

partnered with the Census Bureau to conduct the first 

national survey ever undertaken of who is unbanked and 

underbanked in the United States. It found that 7 percent 

of U.S. households do not have bank accounts, and 

another nearly 18 percent who may have an account still 

utilize non-bank financial services such as check cashers 

and payday lenders, which are frequently more expensive. 

Taken together, this means that nearly a quarter of 

American households are underserved by the mainstream 

banking system, and the proportions are significantly 

higher for low-income and minority households. The 

Census Bureau will now conduct this survey on behalf 

of the FDIC every two years. The second survey was 

conducted in mid-2011, and the findings will be released 

during 2012.

In response to this issue, the FDIC has undertaken 

initiatives at both the local and national level.

At the local level, the FDIC’s Alliance for Economic 

Inclusion (AEI) has organized coalitions of financial 

institutions, community organizations, local government 

officials, and other partners in communities across the 

country to bring unbanked and underserved households 

into the financial mainstream by expanding access to 

basic retail financial services, including savings accounts, 

affordable remittance products, small-dollar loan 

programs, targeted financial education programs, and 

asset-building programs. These partnerships are currently 

operating in 14 communities nationwide, and the FDIC 

plans to expand the program further during 2012.

At the national policy level, the FDIC’s Advisory 

Committee on Economic Inclusion—composed of 

bankers, community and consumer organizations, and 

academics—also explores ways to bring the unbanked into 

the financial mainstream. The Committee has pursued 

a number of initiatives since it was formed in 2007. One 

of the initial projects it recommended—the Small-Dollar 

Loan Pilot Program—demonstrated that banks can offer 

safe, affordable small-dollar loans as an alternative to 

high-priced sources of emergency credit, such as payday 

loans or fee-based overdrafts.

The Advisory Committee is now nearing completion of a 

pilot program called Model Safe Accounts to evaluate how 

banks can offer safe, low-cost transactional and savings 

accounts that are responsive to the needs of underserved 

consumers. Participating banks are in the process of 

testing the model accounts, which feature electronic debitcard based accounts with low fees and low minimum 

balance requirements. The intention of the pilot program 

is to help banks better understand the benefits and 

feasibility of offering such products.

The Advisory Committee will continue to meet during 

2012 and a focus of the Committee and the FDIC going 

forward will be the potential role that technology and 

innovation, particularly mobile banking, can play in 

expanding access to mainstream financial services.

The F An Enduring Sym

The year 2011 marked a turning point for American 

banking, as the number of bank failures declined, industry 

earnings grew, and balance sheets improved. There 

appear to be reasonable prospects for continued recovery 

in 2012, although this is dependent on the pace of the 

U.S. economic growth and financial conditions in global 

markets, notably developments in Europe.

These are still challenging times for our nation and for 

the FDIC. Our workforce remains committed to carrying 

out our mission. I am very grateful to the hard-working, 

dedicated men and women of the FDIC for all they have 

done during the financial crisis to maintain the stability of 

the U.S. financial system and put it on the road to recovery.

Sincerely,

Martin J. Gruenberg
2011

A N N U A L R E P O R T

9

MESSAGE FROM THE chief f

Message from the chief 

I am pleased to 

present the Federal 

Deposit Insurance 

Corporation’s (FDIC) 2011 

Annual Report (also referred 

to as the Performance and 

Accountability Report). The 

report covers financial 

and program performance 

information, and 

summarizes our successes 

for the year. The FDIC takes pride in providing timely, 

reliable, and meaningful information to its 

many stakeholders. 

For the twentieth consecutive year, the U.S. Government 

Accountability Office (GAO) issued unqualified audit 

opinions for the two funds administered by the FDIC: the 

Deposit Insurance Fund (DIF) and the Federal Savings 

and Loan Insurance Corporation (FSLIC) Resolution 

Fund (FRF). These unqualified audit opinions validate our 

efforts to ensure that the financial statements of the funds 

for which we are stewards are fairly presented. I applaud 

the hard work and dedication of the FDIC staff.

The year 2011 marked a turning point for the DIF, as the 

balance increased from negative $7.4 billion at the end 

of 2010, to positive $11.8 billion at the end of 2011. The 

turnaround in the DIF was due to the decrease in the 

number of bank failures, from 157 in 2010 to 92 in 2011. 

While the decrease in bank failures is a positive trend, 92 

bank failures is still more than the total number of bank 

failures that occurred between 1995 and 2008.

Financial Resu

For 2011, the DIF’s comprehensive income totaled $19.2 

billion compared to comprehensive income of $13.5 

billion during 2010. This $5.7 billion year-over-year 

increase was primarily due to a $3.6 billion decrease in the 

provision for insurance losses and $2.6 billion in revenue 

from DGP fees previously held as systemic risk deferred 

revenue, partially offset by a year-to-date net change in the 

fair value of available-for-sale securities of $284 million 

(U.S. Treasury obligations and trust preferred securities) 

and a $112 million decrease in assessments earned.

The provision for insurance losses was negative $4.4 

billion for 2011, compared to negative $848 million for 

2010. The negative provision for 2011 primarily resulted 

from a reduction in the contingent loss reserve due to the 

improvement in the financial condition of institutions 

that were previously identified to fail, and a reduction in 

the estimated losses for institutions that have failed in 

prior years.

The DIF’s total liquidity declined by $3.8 billion, or 8 

percent, to $42.4 billion during 2011. The decrease was 

primarily the result of disbursing $11.9 billion to fund 

both current and prior years’ bank failures during 2011.

However, it should be noted that 58 of the 92 current 

year failures were resolved as cash-conserving sharedloss transactions requiring substantially lower initial 

resolution payments thus helping to mitigate the decline 

in DIF’s liquidity balance. Moreover, during 2011, the 

DIF received $8.9 billion in dividends and other payments 

from its receiverships, which helped to mitigate the DIF 

liquidity’s decline.

Under the requirements of the Federal Managers’ 

Financial Integrity Act of 1982, the FDIC’s management 

conducted its annual assessment and concluded that the 

system of internal controls, taken as a whole, complies 

with internal control standards prescribed by GAO and 

provides reasonable assurance that the related objectives 

are being met. 

In 2012, our focus will be on maintaining strong 

corporate management controls, effective cost and risk 

management, and continued implementation of DoddFrank. The FDIC will continue its important role of 

identifying and addressing risks to the insurance fund, 

and providing Congress, other regulatory agencies, 

insured depository institutions, and the public with 

critical and timely information and analyses on the 

financial condition of both the banking industry and 

FDIC-managed funds.

Sincerely,

Steven O. App
10

FDIC S

Seated (left to right): Acting Chairman Martin Gruenberg, Former Chairman Shelia Bair, Director Thomas Curry. First Row (left to right): Arleas Upton Kea, 

James Angel, Jr., Mark Pearce, Thom Terwilliger, Craig Jarvill. Second Row (left to right): James Wigand, Fred Carns, Jon Rymer, Russell Pittman, Sandra 

Thompson, Alice Goodman. Third Row (left to right): Jesse Villarreal, Bret Edwards, Steven App, Andrew Gray, Cottrell Webster, Paul Nash.

Not pictured: Michael Krimminger, D. Michael Collins, Stephen Quick.
2011

A N N U A L R E P O R T

11

management’s iscu

1. Management’s discussion and analysi

TheYear 

During 2011, the FDIC continued to 

pursue an ambitious agenda in meeting 

its responsibilities. The FDIC continued 

implementation of Dodd-Frank, issued guidance, and 

piloted programs designed to help consumers. The 

FDIC also enhanced risk management procedures and 

created a branch to manage risks of mid tier insured 

depository institutions (IDIs), which further strengthened 

supervisory and consumer protection programs. 

Highlighted in this section are the FDIC’s 2011 

accomplishments in each of its major business lines—

Insurance, Supervision, Consumer Protection, and 

Receivership Management—as well as its program 

support areas. 

In

The FDIC insures bank and savings association deposits. As 

insurer, the FDIC must continually evaluate and effectively 

manage how changes in the economy, the financial markets, 

and the banking system affect the adequacy and the 

viability of the Deposit Insurance Fund (DIF).

State of the Deposit Insurance Fu

Estimated losses to the DIF were $7.9 billion from failures 

occurring in 2011 and were lower than losses from failures 

in each of the previous three years. The fund balance 

became positive in the second quarter of 2011 following 

seven quarters of negative balances. Assessment revenue 

and fewer anticipated bank failures drove the increase in 

the fund balance. The fund reserve ratio rose to positive 

0.17 percent at December 31, 2011 from negative 0.12 

percent at the beginning of the year. 

Long-Term Comprehensive Fun

Management Plan

As a result of the Dodd-Frank Act revisions to its 

fund management authority, the FDIC developed a 

comprehensive, long-term management plan for the 

DIF designed to reduce pro-cyclicality and achieve 

moderate, steady assessment rates throughout economic 

and credit cycles while also maintaining a positive fund 

balance even during a banking crisis. The plan was 

finalized in rulemakings adopted in December 2010 

and February 2011.

Setting the Designated Reserve Ratio

Using historical fund loss and simulated income data 

from 1950 to the present, the FDIC analyzed how high 

the reserve ratio would have had to have been before 

the onset of the two crises that occurred since the late 

1980s to have maintained both a positive fund balance 

and stable assessment rates throughout the period. The 

analysis concluded that a moderate, long-term average 

industry assessment rate would have been sufficient to 

have prevented the fund from becoming negative during 

the crises, though the fund reserve ratio would have had 

to exceed 2.0 percent before the onset of the crises. 

Therefore, under provisions in the Federal Deposit 

Insurance Act that require the FDIC Board to set the 

Designated Reserve Ratio (DRR) for the DIF annually, 

the FDIC Board adopted in December 2010 a DRR of 

2.0 percent for 2011 and voted in December 2011 to 

maintain a 2.0 percent DRR for 2012. The FDIC views the 

2.0 percent DRR as a long-term goal and as the minimum 

level needed to withstand future crises of the magnitude 

of past crises. The 2.0 percent DRR should not be viewed 

as a cap on the fund. The FDIC’s analysis shows that a 

reserve ratio higher than 2.0 percent would increase the 
management’s iscu

12

chance that the fund will remain positive during a future 

economic and banking downturn similar to or more 

severe than past crises. 

Long-Term Assessment Rate Schedules and 

Dividend Policies

Once the reserve ratio reaches 1.15 percent, assessment 

rates can be reduced to a moderate level. Therefore, under 

its statutory authority to set assessments, in February 

2011, the FDIC Board adopted a lower assessment rate 

schedule to take effect when the fund reserve ratio exceeds 

1.15 percent. To increase the probability that the fund 

reserve ratio will reach a level sufficient to withstand 

a future crisis, the FDIC also suspended dividends 

indefinitely when the fund reserve ratio exceeds 1.5 

percent. In lieu of dividends, the FDIC Board adopted 

progressively lower assessment rate schedules when the 

reserve ratio exceeds 2.0 percent and 2.5 percent. These 

lower assessment rate schedules serve much the same 

function as dividends, but provide more stable and 

predictable effective assessment rates. 

Restoration Plan 

In October 2010, under the comprehensive plan, the FDIC 

adopted a Restoration Plan to ensure that the reserve ratio 

reaches 1.35 percent by September 30, 2020, as required by 

the Dodd-Frank Act. The Act also requires that the FDIC 

offset the effect on institutions with less than $10 billion 

in assets of increasing the reserve ratio from 1.15 percent 

to 1.35 percent. The FDIC will promulgate a rulemaking 

that implements this requirement at a later date to better 

take into account prevailing industry conditions at the 

time of the offset.

Change in the Deposit Insurance Assessment Rul

The Dodd-Frank Act also required the FDIC to adopt 

a rule revising the deposit insurance assessment base. 

The final rule implementing the requirement, adopted 

in February 2011, also made conforming changes to the 

deposit insurance assessment system. In addition, the rule 

substantially revised the assessment system applicable to 

large IDIs.

New Assessment Base

Dodd-Frank requires the FDIC to amend its regulations 

to define the assessment base as average consolidated total 

assets minus average tangible equity, rather than total 

domestic deposits (which, with minor adjustments, it has 

been since 1935). The Act allows the FDIC to modify the 

assessment base for banker’s banks and custodial banks. 

The FDIC finalized these changes to the assessment base 

in February 2011, and they became effective April 1, 2011. 

Dodd-Frank also requires that, for at least five years, the 

FDIC must make available to the public the reserve ratio 

and the DRR using both estimated insured deposits and 

the new assessment base. As of December 31, 2011, the 

FDIC estimates that the reserve ratio would have been 0.10

percent using the new assessment base (compared to 0.17

percent using estimated insured deposits) and that the 2.0 

percent DRR using estimated insured deposits would have 

been 1.2 percent using the new assessment base.

Conforming Changes to Risk-Based Premium 

Rate Adjustments

The changes to the assessment base necessitated changes 

to existing risk-based assessment rate adjustments. 

The previous assessment rate schedule incorporated 

adjustments for types of funding that either pose 

heightened risk to the DIF or that help to offset risk to the 

DIF. Because the magnitude of these adjustments and the 

cap on the adjustments had been calibrated to a domestic 

deposit assessment base, the rule changing the assessment 

base also recalibrated the unsecured debt and brokered 

deposit adjustments. Since secured liabilities are now 

included in the assessment base, the rule eliminated the 

secured liability adjustment.

The assessment rate of an institution is also adjusted 

upwards if it holds unsecured debt issued by other 

IDIs. The issuance of unsecured debt by an IDI usually 

lessens the potential loss to the DIF if an institution fails; 

however, when the debt is held by other IDIs, the overall 

risk in the system is not reduced. 
2011

A N N U A L R E P O R T

13

management’s iscu

Conforming Changes to Assessment Rates

The new assessment base under Dodd-Frank, defined as 

average consolidated total assets minus average tangible 

equity, is larger than the previous assessment base, defined 

as total domestic deposits (with minor adjustments). 

Applying the current rate schedule to the new assessment 

base would have resulted in larger total assessments 

than had been previously collected. Accordingly, the rule 

changing the assessment base also established new rates 

that took effect in the second quarter of 2011. These 

rates resulted in collecting nearly the same amount of 

assessment revenue under the new base as under the 

previous rate schedule using the domestic deposit base. 

The new rate schedule also incorporates the changes from 

the proposed large bank pricing rule that was finalized in 

February 2011 (discussed below) along with the change 

in the assessment base. The initial base rates for all 

institutions range from 5 to 35 basis points. 

The initial base assessment rates, range of possible rate 

adjustments, and minimum and maximum total base 

rates are shown in the table below.

Changes to the assessment base, assessment rate 

adjustments, and assessment rates took effect April 1, 

2011. As explained above, the rate schedule will decrease 

when the reserve ratio reaches 1.15, 2.0, and 2.5 percent. 

Current Initial and Total Base Assessment Rates1

Ris

Categor

Ris

Category

Ris

Category 

Ris

Category

Large and

Complex

Ins

Initial base 

assessment rate 5–9 14 23 35 5–35

Unsecured debt 

adjustment2 (4.5)–0 (5)–0 (5)–0 (5)–0 (5)–0

Brokered deposit 

adjustment ...... 0–10 0–10 0–10 0–10

Total Base 

Assessment Rate 2.5–9 9–24 18–33 30–45 2.5–45

1 Total base assessment rates do not include the depository institution debt adjustment.

2 The unsecured debt adjustment cannot exceed the lesser of 5 basis points or 50 percent of an IDI’s initial base assessment rate; thus, for example, an 

IDI with an initial base assessment rate of 5 basis points would have a maximum unsecured debt adjustment of 2.5 basis points and could not have a 

total base assessment rate lower than 2.5 basis points.
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Changes to the Large Bank Assessment System 

The FDIC continued its efforts to improve risk 

differentiation and reduce pro-cyclicality in the deposit 

insurance assessment system by issuing a final rule in 

February 2011. The rule revises the assessment system 

applicable to large IDIs to better reflect risk at the time a 

large institution assumes the risk, to better differentiate 

large institutions during periods of good economic 

conditions, and to better take into account the losses that 

the FDIC may incur if such an institution fails. The rule 

became effective April 1, 2011.

The rule eliminates risk categories for large institutions. 

As required by Dodd-Frank, the FDIC no longer uses longterm debt issuer ratings to calculate assessment rates for 

large institutions. The rule combines CAMELS1 ratings 

and financial measures into two scorecards—one for most 

large institutions and another for the remaining very 

large institutions that are structurally and operationally 

complex or that pose unique challenges and risks in case 

of failure (highly complex institutions). In general, a 

highly complex institution is an institution (other than 

a credit card bank) with more than $50 billion in total 

assets that is controlled by a parent or intermediate parent 

company with more than $500 billion in total assets, or a 

processing bank or trust company with at least $10 billion 

in total assets. 

Both scorecards use quantitative measures that are readily 

available and useful in predicting an institution’s longterm performance to produce two scores—a performance 

score and a loss severity score—that are combined into 

a total score and converted to an initial assessment 

rate. The performance score measures an institution’s 

financial performance and its ability to withstand stress. 

The loss severity score quantifies the relative magnitude 

of potential losses to the FDIC in the event of the 

institution’s failure. 

The rule also authorizes the FDIC to adjust an 

institution’s total score by as much as 15 points, up or 

down. The FDIC proposed in April 2011 and adopted 

in September 2011 guidelines that describe the process 

the FDIC follows to determine whether to make an 

adjustment, to determine the size of any adjustment, and 

to notify an institution of an adjustment and how large it 

will be. 

Effect of Implementing Changes to Assessment 

Base, Assessment Rates, and Large Bank 

Assessment System

Consistent with the intent of Congress, the change to 

the assessment base resulted in an increase in the share 

of overall assessments paid by large institutions, which 

rely less on domestic deposits for their funding than do 

smaller banks. For the second quarter of 2011, when the 

changes to the assessment base and other assessment 

system changes described above became effective, banks 

with more than $10 billion in assets accounted for 

approximately 80 percent of assessments, up from 70 

percent in the first quarter and commensurate with the 

increase in their share of the assessment base. Second 

quarter assessments for banks with less than $10 billion 

in assets were 33 percent lower in aggregate than first 

quarter assessments. 

Temporary Liquidity Guarantee Progra

On October 14, 2008, the FDIC announced and 

implemented the Temporary Liquidity Guarantee 

Program (TLGP). The TLGP consisted of two 

components: (1) the Transaction Account Guarantee 

Program (TAGP), an FDIC guarantee in full of 

noninterest-bearing transaction accounts; and (2) the 

Debt Guarantee Program (DGP), an FDIC guarantee of 

certain newly issued senior unsecured debt. 

1 The CAMELS composite rating represents the adequacy of Capital, the quality of Assets, the capability of Management, the quality and level of Earnings

the adequacy of Liquidity, and the Sensitivity to market risk, and ranges from “1” (strongest) to “5” (weakest).
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The TAGP initially guaranteed in full all domestic 

noninterest-bearing transaction deposits held at 

participating banks and thrifts through December 31, 

2009. The deadline was extended twice and expired on 

December 31, 2010. 

Under the DGP, the FDIC initially guaranteed in full, 

through maturity or June 30, 2012, whichever came first, 

the senior unsecured debt issued by a participating entity 

between October 14, 2008, and June 30, 2009. In 2009 the 

issuance period was extended through October 31, 2009. 

The FDIC’s guarantee on each debt instrument also was 

extended in 2009 to the earlier of the stated maturity date 

of the debt or December 31, 2012. 

Program Statistics

Over the course of the DGP’s existence, 122 entities issued 

TLGP debt. At its peak, the DGP guaranteed almost 

$345.8 billion of debt outstanding (see chart below). As of 

December 31, 2011, the total amount of remaining FDICguaranteed debt outstanding was $167.4 billion.

The FDIC collected $10.4 billion in fees and surcharges 

under the DGP. As of December 31, 2011, the FDIC paid 

or accrued $152 million in estimated losses resulting 

from six participating entities defaulting on debt issued 

under the DGP. The majority of these estimated losses 

($112 million) arose from banks with outstanding DGP 

notes that failed in 2011 and were placed into receivership. 

The FDIC expects to pay an additional $682 thousand in 

interest payments on defaulting notes in 2012. 

The FDIC collected $1.2 billion in fees under the TAGP. 

Cumulative estimated TAGP losses on failures as of 

December 31, 2011, totaled $2.2 billion. 

Overall, TLGP fees are expected to exceed the losses from 

the program. From inception of the TLGP, it has been 

FDIC’s policy to recognize revenue to the DIF for any 

deferred revenue not absorbed by losses upon expiration 

of the TLGP guarantee period (December 31, 2012) or 

earlier for any portion of guarantee fees determined in 

excess of amounts needed to cover potential losses. As 

of December 31, 2011, $2.6 billion in TLGP assets were 

transferred to the DIF. If fees are insufficient to cover 

the costs of the program, the difference will be made up 

through a systemic risk special assessment. 

Outstanding TLGP Debt by 
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Temporary Unlimited Coverage for NoninterestBearing Transaction Accounts Under th

Dodd-Frank Act

Dodd-Frank provides temporary unlimited deposit 

insurance coverage for noninterest-bearing transaction 

accounts from December 31, 2010, through December 

31, 2012, regardless of the balance in the account and the 

ownership capacity of the funds. This coverage essentially 

replaced the TAGP, which expired on December 31, 2010, 

and is available to all depositors, including consumers, 

businesses, and government entities. The coverage is 

separate from, and in addition to, the standard insurance 

coverage provided for a depositor’s other accounts held at 

an FDIC-insured bank. 

A noninterest-bearing transaction account is a deposit 

account in which interest is neither accrued nor 

paid, depositors are permitted to make transfers and 

withdrawals, and the bank does not reserve the right to 

require advance notice of an intended withdrawal. 

Similar to the TAGP, the temporary unlimited coverage 

also includes trust accounts established by an attorney 

or law firm on behalf of clients, commonly known as 

IOLTAs, or functionally equivalent accounts. Money 

market deposit accounts (MMDAs) and NOW accounts 

are not eligible for this temporary unlimited insurance 

coverage, regardless of the interest rate and even if no 

interest is paid. 

As of December 31, 2011, insured institutions had $1.4

trillion in domestic noninterest-bearing transaction 

accounts above the basic coverage limit of $250,000 per 

account. This amount is fully insured until the end of 2012 

under Dodd-Frank.

Large Bank Program

The FDIC’s responsibilities for IDIs include deposit 

insurance, primary supervision of state nonmember 

(FDIC-supervised) IDIs, back-up supervision of nonFDIC-supervised IDIs, and resolution planning. For 

large IDIs, these responsibilities often present unique 

and complex challenges. The FDIC’s ability to analyze 

and respond to risks in these institutions is of particular 

importance, as they make up a significant share of the 

banking industry’s assets. The Large Bank Program’s 

objectives are achieved through two primary centralized 

groups that work extensively with the FDIC and the other 

bank and thrift regulators.

Office of Complex Financial Institutions

The Office of Complex Financial Institutions (OCFI) 

was created in 2010 to focus on the expanded 

responsibilities of the FDIC by Dodd-Frank. The OCFI 

is responsible for oversight and monitoring of large, 

systemically important financial institutions (SIFIs) 

and for resolution strategy development and planning. 

During 2011, OCFI began to carry out its new statutory 

responsibilities to monitor risks in these large SIFIs, 

conduct resolution planning to respond to potential crisis 

situations, and coordinate with foreign regulators on 

significant cross-border resolution issues.

In 2011, OCFI established its complex financial institution 

monitoring program and engaged in continuous review, 

analysis, examination and assessment of key risks and 

control issues at institutions with assets over $100 billion. 

This work is being accomplished both off- and on-site at 

designated complex financial institutions throughout the 

United States. The FDIC is working with other federal 

regulators to analyze and gain a solid understanding 

of the risk measurement and management practices of 

these institutions and assessing the potential risks these 

companies pose to financial stability. In addition, off-site 

financial analysts complete the monitoring function by 

providing subject matter expertise in analyzing complex 

financial institution’s key business lines and potential 
2011

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critical areas of risk. These efforts ensure that the FDIC 

has established advance in-depth institutional knowledge 

required to identify and evaluate risks in financial 

institutions that are designated as systemically important. 

Substantial progress has been made in developing 

resolution planning and implementation capabilities 

within OCFI to meet the expanded responsibilities and 

authorities under Dodd-Frank, including completing 

regulations governing these responsibilities. In July 2011, 

the FDIC approved a final rule implementing the Orderly 

Liquidation Authority that provides the authority to 

resolve SIFIs. During 2011 OCFI established its internal 

frameworks for SIFI resolution under Title II of DoddFrank, and began developing the capabilities necessary to 

implement such resolutions. Additionally, OCFI revised 

and built out specific resolution plans for the largest 

domestic SIFIs. In 2011, the FDIC adopted two rules 

regarding resolution plans (living wills) that covered 

financial institutions will be required to prepare. The first 

rule, which implements requirements of the Dodd-Frank 

Act, became final and was published jointly with the Federal 

Reserve Board in the Federal Register on November 1, 2011, 

and was effective on November 30, 2011. It requires bank 

holding companies with total consolidated assets of $50 

billion or more and certain nonbank financial companies 

designated by the Financial Stability Oversight Council 

for supervision by the Federal Reserve Board to develop, 

maintain, and periodically submit plans for their rapid 

and orderly resolution under the Bankruptcy Code, in the 

event they experience material financial distress. Under the 

rule, covered companies with nonbank U.S. assets greater 

than $250 billion are required to submit initial plans by 

July 1, 2012. A second rule, (issued as an Interim Final 

Rule on September 14, 2011, and adopted in final form on 

January 17, 2012) requires IDIs with assets greater than $50 

billion to submit plans for resolution under the Federal 

Deposit Insurance Act. OCFI, working in partnership with 

the Federal Reserve, has been developing structure and 

guidance for the initial Dodd-Frank rule submissions, so 

that these submissions may be more effectively evaluated 

for completeness and compliance with rule requirements.

The overall focus will be on the covered company’s strategy 

for orderly resolution, including an assessment of its 

resolvability and its analysis of potential impediments to 

implementing a resolution in an orderly manner.

Also in 2011, OCFI commenced activities to manage its 

global outreach, communication and coordination with 

appropriate domestic and foreign financial supervisory, 

regulatory and resolution authorities and representatives 

of financial institutions for the purpose of planning and 

executing the resolution of globally active SIFIs. The 

International Coordination Group of OCFI maintains close, 

collaborative relations with key international stakeholders 

to facilitate effective domestic and global cooperation on 

matters relating to cross-border resolution for all covered 

institutions. OCFI actively participates in the Financial 

Stability Board’s (FSB) Cross-Border Crisis Management 

Working Groups and supports related policy development 

initiatives by the FSB’s Resolution Steering Group.

Mid Tier Bank Branch

The FDIC established a Mid Tier Bank Branch (MTB) 

within its Division of Risk Management and Supervision 

in January 2011. MTB is responsible for monitoring 

the risk management supervision of IDIs with total 

assets of $10 billion to $100 billion. For large FDICsupervised institutions, the supervision programs are 

staffed and administered at the regional office level. 

MTB provides oversight and examination and analytical 

support to ensure consistency in FDIC’s large bank 

supervisory programs. MTB examination specialists 

also provide examination support when the FDIC 

exercises its backup authority at these large institutions. 

MTB is also responsible for managing nationwide risk 

management programs including the Large Insured 

Depository Institution (LIDI) Program, the interagency 

Shared National Credit Program, and certain initiatives 

established under the Dodd-Frank Act such as resolution 

planning for banking companies with total assets from 

$50 billion to $100 billion. 
management’s iscu

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The LIDI Program remains the primary instrument for 

off-site monitoring of IDIs with $10 billion or more in 

total assets. The LIDI Program provides a comprehensive 

process to standardize data capture and reporting through 

nationwide quantitative and qualitative risk analysis of 

large and complex institutions. The LIDI Program was 

refined in 2011 to better quantify risk, to provide a more 

prospective assessment of large institutions’ vulnerability 

to both asset and funding stress, and to more closely align 

with the large bank deposit insurance pricing program. 

The comprehensive LIDI Program is essential to effective 

large bank supervision by capturing information on 

risks, determining the need for supervisory action, and 

supporting large bank insurance assessment decisions and 

resolution planning efforts. As of December 31, 2011, the 

LIDI Program encompassed 112 institutions with total 

assets of $11.0 trillion. 

Center for Financial Resear

The Center for Financial Research (CFR) is responsible for 

encouraging and supporting innovative research on topics 

that are important to the FDIC’s role as deposit insurer 

and bank supervisor. During 2011, the CFR co-sponsored 

two major research conferences.

The CFR organized and sponsored the 21st Annual 

Derivatives Securities and Risk Management Conference 

jointly with Cornell University’s Johnson Graduate 

School of Management and the University of Houston’s 

Bauer College of Business. The conference was held in 

March 2011 at the Seidman Center and attracted over 

100 researchers from around the world. Conference 

presentations were on topics including options markets, 

derivatives pricing, fixed income markets, volatility risk 

premiums, sovereign risk and commodity markets. 

The CFR also organized and sponsored the 11th Annual 

Bank Research Conference jointly with The Journal for 

Financial Services Research (JFSR) in September 2011. The 

conference theme, Lessons from the Crisis, focused on the 

recent financial crisis included 13 paper presentations and 

was attended by over 120 participants. Experts discussed 

a range of topics including government support and bank 

behavior, measuring risk, bank performance and lending, 

and CEO compensation. 

In addition to conferences, workshops and symposia, 

eight CFR working papers were completed and made 

public on topics including global retail lending, 

foreclosure trends, systemic risk, and the use of credit 

default swaps. 

International Outreach

Throughout 2011, the FDIC played a leading role among 

international standard-setting, regulatory, supervisory, 

and multi-lateral organizations by contributing to the 

development of policies with respect to reducing the 

moral hazard and other risks posed by SIFIs. Among the 

institutions the FDIC collaborated with, were the Basel 

Committee on Banking Supervision (BCBS), the FSB, and 

the International Association of Deposit Insurers (IADI). 

Key to the international collaboration was the ongoing 

dialogue among the FDIC Chairman, Acting Chairman, 

other senior FDIC leaders and a number of senior 

financial regulators from the United Kingdom (UK) 

about the implementation of Dodd-Frank, Basel III, 

compensation policies, and how changes in the US 

financial regulations compare to regulatory developments 

in the UK and Europe. In light of the large crossborder operations, the primary areas of discussion 

and collaboration were development of recovery and 

resolution plans for SIFIs, the FDIC’s plans for executing 

a SIFI resolution, and the importance of cross-border 

coordination in the event a SIFI becomes distressed.

The FDIC participated in Governors and Heads of 

Supervision and BCBS meetings and the supporting 

work streams, task forces, and Policy Development Group 

meetings to address the BCBS’s work to calibrate and 

finalize the implementation of Basel III, monitor the 

new leverage ratio and liquidity standards, and complete 

work on the treatment of counterparty credit risk and 
2011

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determination of surcharges on globally systemically 

important banks (G-SIBs). In addition to Basel III capital 

and liquidity reforms, the FDIC also participated in 

the BCBS initiatives related to surveillance standards, 

remuneration, supervisory colleges, operational risk, 

accounting issues, corporate governance, the fundamental 

review of the trading book, and credit ratings and 

securitization. Other major issues in these work streams 

include the recalibration of risk weights for securitization 

exposures, the comprehensive review of capital charges for 

trading positions, and the imposition of a capital charge 

for exposures to central counterparties.

Under the leadership of the FDIC Vice Chairman, who 

also serves as the President of IADI and the Chairman 

of its Executive Council, IADI made significant progress 

in advancing the 2009 IADI and the BCBS Core Principles 

for Effective Deposit Insurance Systems (Core Principles). The 

IADI and the BCBS released a Methodology for assessing 

compliance with the Core Principles in December 2010. 

The development of the Methodology was a collaborative 

effort led by IADI in partnership with the BCBS, the 

International Monetary Fund (IMF), the World Bank, 

the European Forum of Deposit Insurers (EFDI), and 

the European Commission (EC). Early in 2011, the Core 

Principles and Methodology were officially recognized by 

the IMF and the World Bank to assess the effectiveness 

of deposit insurance systems in the Financial Sector 

Assessment Program (FSAP), where the IMF and World 

Bank undertake comprehensive analyses of countries’ 

financial sectors. Subsequently, in February 2011, the 

FSB approved the Core Principles and Methodology for 

inclusion in their Compendium of Key Standards for 

Sound Financial Systems. The official recognition of the 

Core Principles and Methodology by the IMF, the World 

Bank, and the FSB represent an important milestone in 

the acceptance of the role of effective systems of deposit 

insurance in maintaining financial stability. 

The FSB Standing Committee on Standards 

Implementation (SCSI) agreed in late 2010 to conduct a 

thematic peer review of G20 deposit insurance systems. 

The key objectives of the review are threefold: to take 

stock of members’ deposit insurance systems using, as a 

benchmark, the Core Principles; to identify any planned 

changes in national systems in response to the crisis; and 

to identify lessons on implementing deposit insurance 

reforms. In May 2011, the SCSI appointed a review team 

headed by the Deputy Chief Executive of the Hong 

Kong Monetary Authority, which included the FDIC’s 

Director of Division of Insurance and Research. The FDIC 

completed the questionnaire addressing key features 

of the U.S. deposit insurance system, reforms recently 

undertaken, and the status of implementing the Core 

Principles. The SCSI discussed the preliminary FSB report 

on December 13–14, 2011, and presented the report to the 

FSB in early 2012. 

Senior FDIC officials participated in meetings of the FSB 

Resolution Steering Group (ReSG), and on September 

26, 2011, the FDIC hosted a meeting of the ReSG at the 

Seidman Center. With input from the various working 

groups, the ReSG prepared a number of documents 

for consideration by the FSB and G20 Leaders. These 

documents covered a range of subjects relating to 

cross-border resolutions including the Key Attributes of 

Effective Resolution Regimes for Financial Institutions, which 

covered such areas as cross-border cooperation agreements, 

resolvability assessments, recovery and resolution plans, 

and temporary stays on early termination rights. The 

Key Attributes document was released as a consultative 

document for public comment in July, and in November 

2011, was presented to the G20 Leaders Summit in 

Cannes, France, as part of the overall recommendations to 

address threats to global financial stability. 

In continuing support of the Association of Supervisors 

of Banks of the Americas (ASBA) mission and strategic 

development, the FDIC participated in ASBA’s Board and 

technical committee meetings throughout 2011, led three 

technical assistance training missions in 2011, hosted 

the XIV ASBA Annual Assembly and Conference, and 

established a secondment program for ASBA members. 

Under the newly created secondment program, up to four 
management’s iscu

20

ASBA members per year will be selected to participate in 

a ten-week developmental program at the FDIC wherein 

the selected officials will get an “insider’s view” of key 

Division of Risk Management Supervision (RMS) policy 

and operational systems. In recognition of the FDIC’s 

leadership in the Association, the General Assembly 

elected FDIC’s Director of RMS to serve a two-year term as 

Vice Chairman. 

The FDIC continued to provide technical assistance 

through training, consultations, and briefings to foreign 

bank supervisors, deposit insurance authorities, and other 

governmental officials, including the following: 

★ The FDIC, on behalf of IADI, provided the content and 

technical subject matter expertise in the development 

of a tutorial on the Core Principles, which was released 

through the Financial Stability Institute’s (FSI) 

Connect online system. The FDIC led the development 

of the IADI training seminar on “Deposit Insurance 

Assessments and Fund Management” and hosted the 

IADI executive training seminar. Working with the IADI 

Core Principles Working Group, the FDIC designed 

and led workshops on conducting assessments of the 

Core Principles. The design included development of 

a Handbook for Conducting an Assessment, applying the 

methodology approved by the IADI and BCBS. The 

training seminars were held in Washington, DC; Tirana, 

Albania; Basel, Switzerland; and Abuja, Nigeria.

★ The FDIC provided speakers to ASBA for several 

technical seminars including Credit Risk Analysis, 

Supervision of Operational Risk, and Financial 

Institution Analysis Training.

★ The FDIC hosted 106 visits with over 825 visitors 

from approximately 48 jurisdictions in 2011. In 

addition to several meetings with UK officials, the 

FDIC met with representatives from the Bank of 

Canada, Canada Department of Finance, the Office 

of the Superintendent of Financial Institutions, and 

the Canada Deposit Insurance Corporation. The 

purpose of the meeting with the Canadians was to 

discuss living wills and the resolution process for 

large complex financial institutions. The heads of the 

Indonesia Deposit Insurance Corporation, the Fondo 

Interbancario di Tutela dei Depositi (FITD) from Italy, 

the Instituto para la Protección de Ahorro Bancario 

(IPAB) from Mexico, and other senior staff from their 

respective agencies visited the FDIC for multi-day 

study tours. The delegations met with senior FDIC 

management and staff to learn about FDIC policies and 

procedures in a range of areas, including public affairs, 

bank resolutions, and fund management. 

★ June 1, 2011, marked the four-year anniversary of the 

secondment program agreed upon by the Financial 

Services Volunteer Corps (FSVC) and the FDIC to 

place one or more FDIC employees full-time in FSVC’s 

Washington, DC, office. In 2011, the FDIC provided 

support to several projects supporting the Central 

Bank of Iraq’s (CBI) bank supervision program. The 

support included multiple training sessions, as well as 

a commentary addressing strategic recommendations 

and an overview of the effectiveness of the current bank 

supervisory program. Under the FDIC’s guidance, the 

CBI has begun to build the technical skills needed for 

effective regulation of Iraq’s banks. In addition, the 

FDIC welcomed two examiners from the Central Bank 

of Russia to shadow FDIC examiners during the onsite examination of a commercial bank in Texas. This 

A delegation from Ukraine visits the FDIC’s Dallas Regional Office to learn 

about franchise and asset marketing and other bank resolution topics. 

Delegation members with FDIC staff, from left: Sergii Naboka, Roman 

Rym, Andrii Olenchyk, Nataliia Lapaieva, and Liudmyla Lashchuk, all of the 

Deposit Guarantee Fund, Ukraine; George Fitz, DRR; Oleksii Tkachenko, 

National Bank of Ukraine; Jim Gallager, DRR; and Bob Carpenter, Legal.
2011

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shadowing assignment provided the Russians a unique 

opportunity to observe a U.S. bank examination and to 

develop new skills in their risk analysis toolkit. 

★ As an additional element of its leadership role in 

promoting effective bank supervision practices, the 

FDIC provides technical assistance, training, and 

consultations to international governmental banking 

regulators in the area of Information Technology (IT) 

examinations. The FDIC sent two IT examiners to Serbia 

on December 5–9, 2011. The IT examiners participated 

in an assessment of the National Bank of Serbia’s IT 

Supervision Program. The assessment included banking 

practices, applicable regulations, and staff skill levels.

This assessment will be used to identify and prioritize 

measures needed to strengthen and improve the IT 

supervision program in Serbia. The engagement was 

organized by the World Bank as part of a larger program 

to strengthen independent banking in Serbia.

★ In 2011, the FDIC hosted the China Banking Regulatory 

Commission (CRBC) to provide an overview of the IT 

examination process and the roles and responsibilities 

of the FDIC in the US bank regulatory environment.

★ As part of IPAB’s visit in September 13, 2011, Acting 

Chairman Gruenberg and IPAB Executive Secretary 

Mr. José Luis Ochoa signed a technical assistance 

memorandum of understanding (MOU) that formally 

establishes a collaborative and cooperative relationship 

between the FDIC and IPAB. An MOU for technical 

assistance was also established with the Deposit 

Guarantee Fund (DGF) of Ukraine that provides for 

ongoing communication with the DGF as they await 

the passage of a new law granting the DGF expanded 

powers to resolve problem banks and serve as receiver of 

the failed bank estates. 

★ During 2011, the FDIC provided subject matter experts 

to participate in 17 FSI seminars around the world. The 

topics included implementation of an international 

leverage ratio, effective macro prudential tools, 

stress testing, supervising credit risk, SIFI and bank 

resolutions, governance, accounting, deposit insurance, 

and risk-based supervision. 

Supevision

Supervision and consumer protection are cornerstones 

of the FDIC’s efforts to ensure the stability of and public 

confidence in the nation’s financial system. The FDIC’s 

supervision program promotes the safety and soundness 

of FDIC-supervised IDIs, protects consumers’ rights, and 

promotes community investment initiatives. 

Examination Program 

The FDIC’s strong bank examination program is the core 

of its supervisory program. As of December 31, 2011, 

the FDIC was the primary federal regulator for 4,626 

FDIC-insured, state-chartered institutions that were 

not members of the Federal Reserve System (generally 

referred to as “state nonmember” institutions). Through 

risk management (safety and soundness), consumer 

compliance and Community Reinvestment Act (CRA), 

and other specialty examinations, the FDIC assesses an 

institution’s operating condition, management practices 

and policies, and compliance with applicable laws 

and regulations. The FDIC also educates bankers and 

consumers on matters of interest and addresses consumer 

questions and concerns.

As of December 31, 2011, the FDIC conducted 2,712 

statutorily required risk management (safety and 

soundness) examinations, including a review of Bank 

Secrecy Act (BSA) compliance, and all required follow-up 

examinations for FDIC-supervised problem institutions 

within prescribed time frames. The FDIC also conducted 

1,757 statutorily required CRA/compliance examinations 

(825 joint CRA/compliance examinations, 921 complianceonly examinations, and 11 CRA-only examinations) and 
management’s iscu

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6,002 specialty examinations. As of December 31, 2011, 

all CRA/compliance examinations were conducted within 

the time frame established by policy. The following table 

compares the number of examinations, by type, conducted 

from 2009 through 2011. 

FDIC Examinations 2009 – 20

2011 2010 2009

Risk Management (Safety and Soundness): 

 State Nonmember Banks 2,477 2,488 2,398

 Savings Banks 227 225 203

 Savings Associations 3 0 1

 National Banks 1 3 0

 State Member Banks 4 4 2

Subtotal—Risk 

Management Examinations 2,712 2,720 2,604

CRA/Compliance Examinations:

Compliance/Community 

Reinvestment Act 825 914 1,435

 Compliance-only 921 854 539

 CRA-only 11 12 7

Subtotal—CRA/Compliance 

Examinations 1,757 1,780 1,981

Specialty Examinations:

 Trust Departments 466 465 493

 Data Processing Facilities 2,802 2,811 2,780

 Bank Secrecy Act 2,734 2,813 2,698

Subtotal—Specialty 

Examinations 6,002 6,089 5,971

Total 10,471 10,589 10,556

Risk Management

As of December 31, 2011, there were 813 insured 

institutions with total assets of $319.4 billion designated 

as problem institutions for safety and soundness purposes 

(defined as those institutions having a composite 

CAMELS rating of “4” or “5”), compared to the 884 

problem institutions with total assets of $390.0 billion 

on December 31, 2010. This constituted a 5 percent 

decline in the number of problem institutions, and a 13 

percent decrease in problem institution assets. In 2011, 

196 institutions with aggregate assets of $83.2 billion were 

removed from the list of problem financial institutions, 

while 156 institutions with aggregate assets of $77 billion 

were added to the list. Superior Bank, Birmingham, 

Alabama, was the largest failure in 2011, with $3.0 billion 

in assets. The FDIC is the primary federal regulator for 533 

of the 813 problem institutions, with total assets of $175.4 

billion and $319.4 billion, respectively. 

During 2011, the FDIC issued the following formal 

and informal corrective actions to address safety and 

soundness concerns: 146 Consent Orders, and 297 MOUs. 

Of these actions, 15 Consent Orders and 17 MOUs were 

issued based, in part, on apparent violations of the Bank 

Secrecy Act.

The FDIC is required to conduct follow-up examinations 

of all state nonmember institutions designated as problem 

institutions within 12 months of the last examination. 

As of October 31, 2011, all follow-up examinations for 

problem institutions were performed on schedule. 
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Compliance

As of December 31, 2011, 51 insured state nonmember 

institutions, about 1 percent of all supervised institutions, 

having total assets of $37.0 billion were rated “4” or “5” for 

consumer compliance purposes. As of December 31, 2011, 

all follow-up examinations for problem institutions were 

performed on schedule. 

Overall, banks demonstrated strong consumer compliance 

programs. The most significant consumer protection issue 

that emerged from the 2011 compliance examinations 

involved banks’ failure to adequately monitor thirdparty vendors. As a result, we found violations involving 

unfair or deceptive acts or practices, resulting in 

consumer restitution and civil money penalties. The 

violations involved a variety of issues including failure to 

disclose material information about new products being 

offered, deceptive marketing and sales practices, and 

misrepresentations about the costs of products. In many 

instances, the violations were the result of banks entering 

into new product markets through third-parties without 

maintaining sufficient oversight of vendors’ activities.

During 2011, the FDIC issued the following formal 

and informal corrective actions to address compliance 

concerns: 38 Consent Orders, 111 MOUs, and 163 Civil 

Money Penalties (CMPs). In certain cases, the Consent 

Orders issued by the FDIC contain requirements for 

institutions to pay restitution in the form of refunds 

to consumers for different violations of laws. During 

2011, over $11 million was refunded to consumers by 

institutions subject to Consent Orders. These refunds 

primarily related to unfair or deceptive practices by 

institutions, mainly related to different credit card 

programs, as discussed above. 

In the case of CMPs, institutions pay penalties to the U.S. 

Treasury. Approximately 90 percent of the CMPs involved 

repeated errors in the submission of required data under 

the Home Mortgage Disclosure Act (HMDA) or statutorily 

mandated penalties for violations of the regulations 

entitled Loans in Areas Having Special Flood Hazards. The 

average CMP for HMDA and Flood Insurance violations 

was $8,400. 

Bank Secrecy Act/Anti-Money Launderi

The FDIC pursued a number of BSA, Counter-Terrorist 

Financing (CFT), and Anti-Money Laundering (AML) 

initiatives in 2011. 

The FDIC conducted an Advanced International AML and 

CFT training session in 2011 for twenty-seven financial 

sector supervisors and regulatory staff from Ethiopia, 

Ghana, Kenya, Nigeria, and Tanzania. The training 

focused on AML/CFT controls, the AML examination 

process, customer due diligence, suspicious activity 

monitoring, and foreign correspondent banking. The 

session also included presentations from the Federal 

Bureau of Investigation (FBI), the Financial Crimes 

Enforcement Network (FinCEN), the Drug Enforcement 

Administration (DEA), and U.S. Immigration and 

Customs Enforcement (ICE). Topics addressed by invited 

speakers included combating terrorist financing, tradebased money laundering, bulk cash smuggling and 

investigations, law enforcement use of BSA information, 

and the role of financial intelligence units in detecting and 

investigating illegal activities.

Additionally, the FDIC met with several foreign officials 

from Pakistan, at the request of the FinCEN, to provide 

an overview of the FDIC and the AML examination 

process used in the United States. The FDIC also met 

with eleven foreign officials from United Arab Emirates 

as a part of the U.S. Department of State’s International 

Visitor Leadership Program to discuss the FDIC’s AML 

Supervisory Program. 

Minority Depository Institution Activiti

The preservation of Minority Depository Institutions 

(MDIs) remains a high priority for the FDIC. In 2011, the 

FDIC continued to seek ways to improve communication 

and interaction with MDIs and to respond to the concerns 

of minority bankers. Many of the MDIs took advantage of 

the technical assistance offered by the FDIC, requesting 
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technical assistance on a number of bank supervision 

issues, including but not limited to, the following: 

★MDI Policy Statement and Program

★ Small Business Lending Fund 

★ Deposit insurance assessments

★ FDIC Overdraft Guidance

★ Guidance on prepaid cards

★ Application process for change of control and 

shelf-charter applications

★ Filing branch and merger applications

★Monitoring commercial real estate 

(CRE) concentrations

★ Reducing adversely classified assets

★Maintaining adequate liquidity

★ Compliance issues 

★ Community Reinvestment Act (CRA)

The FDIC continued to offer the benefit of having an 

examiner or a member of regional office management 

return to FDIC-supervised MDIs from 90 to 120 days 

after an examination to help management understand 

and implementing examination recommendations, or 

to discuss other issues of interest. Several MDIs took 

advantage of this initiative in 2011. Also, the FDIC 

regional offices held outreach training efforts and 

educational programs for MDIs.

A major highlight in 2011 was the biannual Interagency 

MDI Conference. The 2011 conference was held on 

June 14–16, 2011 in New York City. The conference 

theme was Preserving the Future of Minority Depository 

Institutions, and the activities included a session where 

potential investors in financial institutions had an 

opportunity to meet with senior managers and directors 

of MDIs attending the conference. 

The FDIC held conference calls and banker roundtables 

with MDIs in the geographic regions. Topics of 

discussion for the calls included both compliance and 

risk management, and additional discussions included 

the economy, overall banking conditions, deposit 

insurance assessments, accounting, and other bank 

examination issues. 

Capital and Liquidity Rulemaking and Guidanc

OTC Derivatives Margin and Capital NPR

In April 2011, the FDIC, along with the other federal banking 

agencies, the Farm Credit Administration, and the Federal 

Housing Finance Agency (FHFA), published a proposed 

rule intended to enhance the stability of the financial 

system by preventing certain large financial firms from 

entering into uncollateralized derivatives exposures with 

each other. This proposed rule would implement certain 

requirements contained in Sections 731 and 764 of the 

Dodd-Frank Act, which provides that the largest and most 

active participants in the over-the-counter (OTC) derivatives 

market, that is, those designated as swaps dealers or major 

swaps participants by the Commodity Futures Trading 

Commission (CFTC) or the Securities Exchange Commission 

(SEC), to collect initial margin and variation margin. Final 

rulemaking is expected to be completed in 2012.

Retail Foreign Exchange Transactions

In May 2011, the FDIC Board of Directors approved the 

publication of a Notice of Proposed Rulemaking (NPR) 

that proposed disclosure, recordkeeping, capital and 

margin, reporting, business conduct, and documentation 

requirements on certain retail foreign currency 

transactions entered into between FDIC-supervised 

institutions and retail customers. The FDIC proposed 

these requirements in response to Section 742 of DoddFrank. In July 2011, the FDIC issued final regulations.
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Advanced Approaches Floor Final Rule

In June 2011, the FDIC, along with the other federal 

banking agencies, approved a final rule to implement 

certain requirements of Section 171 of Dodd-Frank. 

Section 171 requires that the agencies’ generally applicable 

capital requirements serve as a floor for other capital 

requirements the agencies may establish and, specifically, 

as a permanent floor for the advanced approaches riskbased capital rule. 

Stress Testing Guidance

In June 2011, the FDIC along with the other federal 

banking agencies, issued proposed guidance on stress 

testing by banking organizations with more than $10 

billion in total consolidated assets. The proposed 

guidance highlights the importance of stress testing as 

an ongoing risk management practice that supports a 

banking organization’s forward-looking assessment of its 

risks, and provides principles that a banking organization 

should follow to develop, implement, and maintain an 

effective stress testing framework.

Counterparty Credit Risk Guidance

In July 2011, the FDIC, along with the other federal 

banking agencies, issued guidance to clarify supervisory 

expectations and sound practices for an effective 

counterparty credit risk management framework. The 

guidance was issued primarily for banks with significant 

derivatives portfolios and emphasizes that such banks 

should use appropriate reporting metrics and limits 

systems, have well-developed and comprehensive stress 

testing, and maintain systems that facilitate measurement 

and aggregation of counterparty credit risk throughout 

the organization. The agencies believe this guidance will 

address deficiencies exposed during the financial crisis by 

reinforcing sound practices related to the management 

and ongoing monitoring of counterparty exposure limits 

and concentration risks.

Volcker Rule NPR

In October 2011, the FDIC, along with the other federal 

banking agencies, and the SEC, published a joint NPR to 

implement the provisions of Section 619 of Dodd-Frank, 

which restricts the ability of banking entities to engage in 

proprietary trading and limits investments in hedge funds 

and private equity funds. Final rulemaking is expected to 

be completed in 2012.

Depositor and Consumer Protection Rulemaking

and Guidanc

SAFE Act

In January 2011, the FDIC along with the other federal 

banking agencies, issued an update related to the 

requirements of the Secure and Fair Enforcement for 

Mortgage Licensing Act of 2008 (SAFE Act). The update 

reminded mortgage loan originators of the requirement to 

register with the Nationwide Mortgage Licensing System 

and Registry within 180 days of the date the Registry 

began accepting federal registrations. 

Overdraft Guidance

In March 2011, the FDIC hosted a teleconference to 

discuss the 2010 Overdraft Payment Program Supervisor 

Guidance (Guidance) that was issued in November 

2010. The Guidance encouraged institutions to monitor 

and oversee usage of overdraft payment programs to 

address the risks related to excessive and inappropriate 

use of automated overdraft programs as forms of highcost, short-term credit. The teleconference was held to 

address many examination and implementation issues 

based on discussions with, and questions received from, 

FDIC-supervised institutions. The FDIC also published 

written answers to a series of Frequently Asked Questions 

concurrently with the teleconference. Examiners began 

monitoring banks’ efforts to address the risks identified 

in the Guidance in July 2011. The FDIC will continue 

to monitor banks’ efforts to manage risks of automated 

programs and assess the efficacy of the Guidance.
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Examination Procedures

In August 2011, the FDIC issued revised examination 

procedures incorporating the model privacy notice. The 

Gramm-Leach-Bliley Act requires financial institutions 

to provide initial and annual notices to consumers with 

whom they have ongoing customer relationships to 

explain how nonpublic personal information is collected 

and shared. Financial institutions may use a model privacy 

notice issued by the federal banking agencies and the 

National Credit Union Administration, the Federal Trade 

Commission, the CFTC, and the SEC to comply with 

this requirement. 

In December 2011, the FDIC, along with the other 

federal banking agencies, issued revised examination 

procedures for the regulations that implement the Truth 

in Lending Act (TILA). TILA requires various disclosures 

relating to the cost of consumer credit as well as several 

other requirements relating to credit for individual, 

consumer, or household purposes including residential 

real estate loans.

Other Guidance Issu

During 2011, the FDIC issued and participated in 

the issuance of other guidance in several areas as 

described below.

Incentive-Based Compensation

On April 14, 2011, the FDIC joined the other federal 

banking agencies, and the SEC and FHFA in issuing a 

joint NPR that would implement section 956 of DoddFrank (Enhanced Compensation Structure Reporting). 

Section 956 requires the participating agencies, as defined, 

to jointly: (a) prescribe regulatory reporting standards 

for incentive-based compensation and (b) prohibit 

incentive-based compensation that is “excessive” or “could 

lead to material financial loss” at a covered institution. 

Implementing this proposed rule would address a key 

safety and soundness issue that contributed to the recent 

financial crisis─that poorly designed compensation 

structures can misalign incentives and induce excessive 

risk-taking at financial organizations. Importantly, this 

interagency proposal will apply across all types of financial 

institutions, limiting the opportunity for regulatory 

arbitrage. Per section 956, financial institutions with 

total assets less than $1.0 billion are exempt from this 

provision. Final rulemaking is expected to be completed 

in 2012.

Regulatory Actions Related to Foreclosure Activities 

by Large Servicers and Practical Implications for 

Community Banks

In May 2011, the FDIC published a special foreclosure 

edition of Supervisory Insights. This edition describes 

lessons learned from an interagency review of foreclosure 

practices at the 14 largest residential mortgage servicers, 

and includes examples of effective mortgage servicing 

practices derived from these lessons.

Regulatory Relief

During 2011, the FDIC issued 31 Financial Institutions 

Letters (FILs) that provided guidance to help financial 

institutions and facilitate recovery in areas damaged 

by hurricanes, wildfires, tornadoes, flooding, and other 

natural disasters. In addition, FIL-60-2001 dated August 

26, 2011, reminded institutions how to prepare for 

business continuity during significant storms.

Other Policy Matter

Study on Core Deposits and Brokered Deposits

As required by Section 1506 of Dodd-Frank, the FDIC 

completed a study on the use of core and brokered 

deposits and provided a written report to Congress on its 

findings on July 8, 2011. The FDIC solicited comments 

from the banking industry and the public in preparing 

this study. The FDIC received approximately 75 written 

comments and organized a roundtable discussion with 

representatives from bank trade groups, bank regulators, 

deposit brokers, banks that use brokered deposits, and the 

academic community. Discussions on the issues were also 
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held with the FDIC Advisory Committee on Community 

Banking and in several separate meetings with banks, 

trade groups, and other interested parties. In addition, the 

FDIC undertook a statistical analysis of core and brokered 

deposits and conducted a literature review of academic 

studies on core and brokered deposits. The study 

evaluated the definitions of core and brokered deposits 

and recommended that Congress not amend or repeal the 

brokered deposit statute, which defines brokered deposits 

and prevents failing banks from increasing their brokered 

deposits and taking on more risk in an effort to grow out 

of their troubles. 

Small Business Lending Forum

On January 13, 2011, the FDIC hosted a forum on 

“Overcoming Obstacles to Small Business Lending.” The 

forum fostered communication among policymakers, 

regulators, small business owners, lenders, and other 

stakeholders regarding ways in which credit can be made 

more accessible to the small business sector. In addition to 

identifying common obstacles small businesses currently 

face, forum participants also assessed existing efforts and 

suggested additional policies to ensure that creditworthy 

small businesses have access to the credit they need to 

grow, create jobs, and help fuel the economic recovery. 

The FDIC addressed the key issues raised at the forum, 

including small businesses’ demand for credit, banks’ 

supply of credit, and bank regulators’ approaches to 

evaluating small business loans. 

Promoting Economic Inclusio

The FDIC has a strong commitment to promoting 

consumer access to a broad array of banking products 

to meet consumer financial needs. To promote financial 

access to responsible and sustainable products offered by 

IDIs, the FDIC: 

★ conducts research into the unbanked and underbanked

★ engages in research and development on models of 

products meeting needs of lower-income consumers

★ supports partnerships to promote consumer access and 

use of banking services 

★ advances financial education and literacy

★ facilitates partnerships to support community and 

small business development.

FDIC Survey of Banks’ Efforts to Serve the Unbanked 

and Underbanked

The FDIC is committed to ensuring that consumers have 

access to basic banking and other financial services, and 

to developing more and better data about unbanked 

and underbanked households, including factors that 

hinder them from fully utilizing the mainstream financial 

system. In line with this commitment, Congress mandated 

in Section 7 of the Federal Deposit Insurance Reform 

Conforming Amendments Act of 2005 (Reform Act), 

that the FDIC conduct periodic surveys of banks’ efforts 

to bring individuals and families into the conventional 

finance system.

Consequently, during 2011 and part of 2012, the FDIC 

will conduct a second set of nationwide surveys of 

households and FDIC-IDIs (banks survey) to assess efforts 

to serve unbanked and underbanked individuals and 

families. The first phase of the bank survey will gather 

information from a sample of bank headquarters and 

a second phase will collect data at the branch level. The 

2011 survey focused on banks’ basic transaction and 

savings account programs, auxiliary product and service 

offerings, and financial education and outreach efforts. 

The results will complement the previously collected data 

and will help banks improve their abilities to meet the 

diverse financial needs of U.S. households. The survey also 

helps to inform the public about the FDIC’s continuing 

economic inclusion efforts.
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Model Safe Account Pilot 

The FDIC began a one-year pilot program in January 

2011 to determine the feasibility of IDIs offering safe, 

low-cost transactional and savings accounts to help meet 

the needs of the 25 percent of U.S. households that are 

unbanked and underbanked. These accounts are FDIC 

insured and are covered under consumer protection laws 

and regulations, such as Regulation E (Electronic Funds 

Transfer), in the same way as traditional deposit accounts. 

Through the pilot, nine participating institutions are 

offering electronic deposit accounts with product features 

identified in the FDIC Model Safe Accounts Template. 

These accounts do not allow for overdraft or nonsufficient 

funds fees. At the completion of the pilot, in early 2012, 

the FDIC will report on the findings and lessons learned.

Affordable Small-Dollar Loan Guidelines and 

Pilot Program

The FDIC continued to promote the results of the FDIC 

Small-Dollar Loan Pilot. In May 2011, the FDIC hosted 

a meeting of the FFIEC CRA subcommittee to examine 

opportunities to enhance understanding of small-dollar 

lending among regulated institutions and to promote 

consistent emphasis in CRA examinations. The meeting, 

attended by senior staff from the banking regulatory 

agencies, CSBS, the New York State Banking Department, 

and the National Credit Union Administration, reviewed 

the findings from the FDIC research and pilot, and related 

outreach and education work. On September 22, 2011, 

FDIC offered testimony on the FDIC’s Small-Dollar 

Loan Pilot at a hearing of the House Financial Services 

Committee Subcommittee on Financial Institutions 

and Consumer Credit entitled “An Examination of the 

Availability of Credit for Consumers.” In addition, results 

from the pilot were discussed at several conferences 

throughout the year, including the Microfinance USA 

Conference in New York at the Association of Military 

Bankers of America, and in media interviews.

Safe Mortgage Lending in Low- and 

Moderate-Income (LMI) Communities

In early 2011, the FDIC Chairman’s Advisory Committee 

on Economic Inclusion held a public meeting at 

headquarters and discussed principles for responsible 

low- and moderate-income (LMI) mortgage lending, 

the impact of the housing crisis on LMI families, and 

potential future market structures to safely serve LMI 

borrowers. In addition, FDIC researchers presented two 

papers at widely attended conferences, analyzing some 

of the outcomes of the mortgage crisis on housing 

mobility, and trends in mortgage refinancing among 

low-income households. 

Partnerships to Promote Consumer Access: Alliance for 

Economic Inclusion 

The goal of the FDIC’s Alliance for Economic Inclusion 

(AEI) initiative is to collaborate with financial institutions; 

community organizations; local, state, and federal 

agencies; and other partners in select markets, to 

launch broad-based coalitions to bring unbanked and 

underserved consumers into the financial mainstream. 

The FDIC expanded its AEI efforts during 2011 to 

increase measurable results in the areas of new bank 

accounts, small-dollar loan products, and the delivery 

of financial education to underserved consumers. 

Specifically, during 2011:

★More than 494 banks and organizations joined AEI 

nationwide, bringing the total number of AEI members 

to 1,613. The 2011 figure represents a 44 percent growth 

over the AEI membership base at the end of 2010.

★ At least 171,591 consumers opened a bank account 

as a result of AEI efforts, an increase of 138 percent 

over the number of new accounts opened during 2010. 

Combined, more than 404,591 bank accounts have been 

opened through the AEI program. 

★ Approximately 87,476 consumers received financial 

education through the AEI, bringing the total number 

of consumers educated to 270,476. The 2011 figure is a 

56 percent improvement over the 2010 figure.
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Also, twenty-four banks were in the process of offering or 

developing small-dollar loans, and seventeen AEI banks 

were providing deposit accounts consistent with the FDIC 

Model Safe Account Template through the AEI at the end 

of 2011. To facilitate broader economic inclusion, FDIC 

leads AEI members in other work appropriate to the needs 

of the local market. For example, the 4th Annual AEI Small 

Business Conference in New Orleans reached more than 

200 entrepreneurs, bankers, and small business resource 

providers, while the Los Angeles AEI promoted small 

business development through two guides (one to help 

small businesses save money by “greening” their business 

and the other to help gain access to the export market). 

During 2011, FDIC also expanded the geographic reach of 

the AEI program. Initially in fourteen markets, the FDIC 

began the formation of AEI initiatives in three additional 

markets: Milwaukee, Wisconsin; the Appalachian region 

of West Virginia; and the Metro Detroit/Southeast 

Michigan area. These markets were selected because 

of their sizable concentrations of unbanked and 

underbanked households. In collaboration with the 

Wisconsin Women's Business Initiative Corporation, 

FDIC launched the Milwaukee AEI initiative on January 

19, 2011, consisting of twenty-one financial institutions 

and community-based partners. And on December 

19, 2011, the FDIC and the United Way of Southeast 

Michigan launched the Southeast Michigan AEI coalition. 

The launch was attended by forty-eight financial 

institutions and community-based organizations, 

including the Consulate of Mexico and Bank On Detroit 

representatives. The FDIC collaborated with the West 

Virginia Development Office and Appalachian Regional 

Commission on the AEI proposal for launch in West 

Virginia during 2012. 

Additionally, the FDIC provided program guidance and 

technical assistance in the development, launch, and the 

expansion of 26 Bank On programs. In AEI markets where 

there is a Bank On initiative, FDIC and its AEI partners 

generally collaborate with representatives from the 

Bank On initiative towards shared objectives. For example, 

FDIC provided technical assistance on recruitment from 

the financial services industry for Bank On/Save Up Kansas 

City, Missouri, which is a local effort to market savings 

and checking accounts to the unbanked and underbanked 

that was launched on June 4, 2011, conducted in 

collaboration with the Kansas City AEI. FDIC staff also 

provided technical, marketing, and financial education 

product support for the new Bank On Chicago initiative, 

and the Bank On Los Angeles initiative conducted under 

the FDIC AEI umbrella.

Advancing Financial Education 

The FDIC’s award-winning Money Smart curriculum has 

reached more than 2.75 million consumers in the ten years 

since its launch in 2001. During 2011, the FDIC reached 

approximately 265,000 consumers with Money Smart. The 

curriculum is currently available in instructor-led versions 

to teach adults and young adults, as well as in self-paced 

computer-based and audio versions. 

The FDIC expanded its financial education efforts 

during 2011 through a multi-part strategy that included 

making available timely, high-quality financial education 

products, sharing best practices, and working through 

partnerships to reach consumers. 

Recognizing the growing role of entrepreneurs in the 

economy, the Money Smart program started its second 

decade by expanding the reach of the curriculum to small 

businesses. During 2011, the FDIC collaborated with the 

Small Business Administration on the development of 

a new instructor-led financial education curriculum for 

small businesses. It consists of ten modules that introduce 

prospective or current small businesses to basic strategies 

to manage a small business effectively from a financial 

standpoint. The pilot curriculum is being refined in 

advance of an early 2012 launch.
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On February 10, 2011, the FDIC released an enhanced 

version of its instructor-led Money Smart for Young Adults 

financial education curriculum. The updated curriculum 

reflects changes to the financial landscape such as 

amendments to the rules pertaining to credit cards, the 

overdraft opt-in rule, and information on financing 

higher education and instructional best practices since the 

curriculum’s release in 2008. 

On November 7, 2011, the FDIC released the Money 

Smart curriculum for the first time in Haitian-Creole 

and Hindi, making the instructor-led curriculum available 

in nine languages, in addition to the large-print and 

Braille versions. Also, on this date, updated versions of 

the Chinese, English, Haitian-Creole, Hindi, Hmong, 

Korean, Russian, Spanish, and Vietnamese language 

versions of Money Smart were released. These updated 

curriculums reflect the enhancements made to the English 

language version of Money Smart released in November 

of 2010, which include the addition of a new module on 

financial recovery.

Improvements were also made to the self-paced versions 

of Money Smart. The Money Smart Computer-Based 

Instructions (CBI) was rewritten and significantly 

enhanced. For example, the new CBI includes ageappropriate tracks for adults and young adults aligned 

with the respective updated instructor-led curriculums. 

Originally launched in 2004, the new CBI also 

incorporates new technological enhancements and best 

practices in instructional design, such as a game-based 

design and new tools for users to retrieve previously 

earned certificates of completion of modules. The new CBI 

was piloted during 2011 with key partners in advance of a 

first quarter 2012 launch.

Partnerships to Support Community and Small 

Business Development

Through training and technical assistance to diverse 

organizations that use the Money Smart program, the 

FDIC emphasizes the importance of pairing education 

with access to appropriate banking products and services. 

Approximately 1,200 organizations are members of 

the FDIC’s Money Smart Alliance, 1,205 practitioners 

attended the 61 train-the-trainer workshops conducted 

during 2011, and the FDIC worked with many additional 

organizations to promote financial education. 

During 2011, the FDIC expanded on its new2

 partnership 

with the National Credit Union Administration and 

the U.S. Department of Education to promote financial 

education and access for low- and moderate-income 

students. The FDIC focused its work through this 

partnership by promoting financial education and 

access resources to the U.S. Department of Education’s 

grantees by participating in both national and four 

regional/state conferences to conduct workshops to 

reach managers of Federal TRIO Programs3

 and Gear-UP 

programs that reach low- and moderate-income students 

and their families.

2 This partnership began on November 15, 2010.

3 The Federal TRIO Programs (TRIO) are federal outreach and student services programs designed to identify and provide services for individuals from 

disadvantaged backgrounds.
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Leading Community Developmen

The FDIC hosted its sixth Community Bank Advisory 

Committee meeting in May 2011. Fourteen members, 

most of them heads of community banks throughout the 

nation, discussed trends and issues involving community 

banking and the future of this sector.

FDIC community affairs staff is located in each of the 

FDIC’s regions nationwide and lead a range of community 

development activities. In 2011, the FDIC undertook 

over 676 community development, technical assistance, 

financial education, and outreach activities and events. 

These activities were designed to promote awareness 

of investment opportunities to financial institutions, 

access to capital within communities, knowledge-sharing 

among the public and private sector, and wealth-building 

opportunities for families. 

The FDIC collaborated with the Office of Comptroller 

of the Currency and Federal Reserve Banks to conduct 

35 CRA/Community Development roundtables to help 

financial institutions learn how to more effectively meet 

community credit needs and promote compliance with 

CRA regulations.

Recognizing the importance of small business growth 

and job creation as an essential component in America’s 

economic recovery, the FDIC continued its emphasis on 

facilitating small-business development, expansion, and 

recovery. In 2011, the FDIC and the SBA co-sponsored 

28 small-business information, resource, and capacitybuilding seminars. The events provided information 

and resources to over 2,276 small business owners, 

entrepreneurs, banking professionals, and others.

The FDIC also continued to help consumers and the 

banking industry avoid unnecessary foreclosures and 

stop foreclosure “rescue” scams that promise false hope 

to consumers at risk of losing their homes. The FDIC 

focused its foreclosure mitigation efforts in three areas:

★ Direct outreach to consumers with information, 

education, counseling, and referrals. During 2011, in 

collaboration with NeighborWorks®America, the FDIC 

sponsored eight events at which 7,392 homeowners 

attended, 68 counseling organizations provided direct 

services and 18 loan servicers participated.

★ Industry outreach and education targeted to 

lenders, loan servicers, local governmental agencies, 

housing counselors, and first responders (faithbased organizations, advocacy organizations, social 

service organizations, etc.). During 2011, the FDIC 

co-hosted one major loan modification scam outreach 

event in collaboration with NeighborWorks®America 

and supported several ongoing loan modification scam 

campaigns. These outreach activities are targeted to local 

agencies and nonprofits that have the capacity to educate 

stakeholders. These activities resulted in more than 

35,372 scam complaint calls since the campaign began.

Vice Chairman Martin J. Gruenberg makes a point during the sixth 

Community Bank Advisory Committee meeting.
management’s iscu

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★ Support for capacity-building initiatives 

to help expand the quantity and quality of 

foreclosure counseling assistance that is 

available within the industry. Working closely 

with NeighborWorks®America and other national 

and local counselors and intermediaries, the FDIC 

supported industry efforts to build the capacity of 

housing counseling agencies. The FDIC facilitated 

the development of a new course, Marketing Your 

Neighborhood for Stabilization and Revitalization that was 

offered at two NeighborWorks training institutes 

to approximately twenty-one homeownership 

professionals. Also, more than 1,680 participants 

from 1,071 organizations completed six community 

stabilization e-learning courses offered through 

NeighborWorks®America sponsored by FDIC. These 

e-learning courses include the new Introduction to 

Affordable Housing launched on October 10, 2011.

Information Technology, Cyber Fraud, a

Financial Crime

The FDIC, jointly with the U.S. Department of Justice, 

sponsored a Financial Crimes Conference in May 2011 

that focused on all types of financial fraud, and how the 

law enforcement community and regulators can respond 

effectively to fraud. Other major accomplishments during 

2011 in promoting information technology (IT) security 

and combating cyber fraud and other financial crimes 

included the following: 

★ Issued, in conjunction with the FFIEC, the Supplement 

to Authentication in an Internet Banking Environment 

guidance, which strengthens the controls banks use to 

protect online banking transactions. 

★ Issued revised guidance describing potential risks 

associated with relationships with third-party entities 

that process payments for telemarketers, online 

businesses, and other merchants.

★ Issued a risk advisory to examiners describing the risks 

of mobile banking.

★ Held an Emerging Technology Risk Analysis Center 

Event on January 12, 2011, with five industry experts 

who discussed emerging technologies and associated 

risks that may affect the banking industry. 

★ Established an intra-divisional FDIC Payments Risk 

Working Group to strengthen awareness of current 

and emerging payments-related supervisory issues. 

Representatives from all examination disciplines are 

participating in the Working Group.

★ Assisted financial institutions in identifying 

and shutting down “phishing” websites. The 

term “phishing”—as in “fishing” for confidential 

information—refers to a scam that encompasses 

fraudulently obtaining and using an individual’s 

personal or financial information. 

★ Issued 28 Special Alerts to FDIC-supervised 

institutions on reported cases of counterfeit or 

fraudulent bank checks. 

★ Issued 4 Consumer Alerts pertaining to e-mails 

and telephone calls fraudulently claiming to be from 

the FDIC.

The FDIC conducts IT examinations of financial 

institutions and technology service providers (TSP). These 

examinations ensure that institutions and TSPs have 

implemented adequate risk management practices for 

the confidentiality, integrity, and availability of sensitive, 

material, and critical information assets. The result of 

the examination is a FFIEC Uniform Rating System for 

Information Technology (URSIT) rating. In 2011, the 

FDIC conducted 2,802 IT examinations at financial 

institutions and TSPs. Further, as part of its ongoing 

supervision process, the FDIC monitors significant events, 

such as data breaches and natural disasters that may affect 

financial institution operations or customers.
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Consumer Complaints and Inquiri

The FDIC investigates consumer complaints concerning 

FDIC-supervised institutions and answers inquiries from 

the public about consumer protection laws and banking 

practices. As of December 31, 2011, the FDIC received 

12,942 written complaints, of which 5,997 involved 

complaints against state nonmember institutions. The 

FDIC responded to over 98 percent of these complaints 

within time frames established by corporate policy, and 

acknowledged 100 percent of all consumer complaints 

and inquiries within fourteen days. The FDIC also 

responded to 2,608 written inquiries, of which 484 

involved state nonmember institutions. In addition, the 

FDIC responded to 6,134 telephone calls from the public 

and members of the banking community, of which 4,293 

concerned state nonmember institutions.

Coordination with the Consumer Financi

Protection Burea

Under the Dodd-Frank Act, the Consumer Financial 

Protection Bureau (CFPB) began operations on July 

21, 2011. The CFPB was given primary supervisory 

responsibility for certain enumerated consumer 

protection laws and regulations for institutions with 

assets over $10 billion, and their affiliates. The FDIC 

coordinated with the CFPB throughout 2011 to ensure 

an orderly transfer of forty-one institutions to the CFPB’s 

consumer protection jurisdiction. The FDIC continues 

to work with the CFPB to implement other requirements, 

including simultaneous examinations for other laws, 

such as the CRA, for which the FDIC retains primary 

responsibility for all state chartered, nonmember banks, 

including those with assets over $10 billion.

Between July 21 and December 31, 2011, the FDIC 

received 935 complaints involving FDIC-supervised banks 

under the jurisdiction of the CFPB. Under the agreement 

between the FDIC and the CFPB, the FDIC investigated 

576 of the 935 complaints and referred the remaining 359 

to the CFPB. 

The FDIC provided substantial resources to the CFPB 

during 2011 on a temporary basis. The FDIC helped 

the CFPB develop its consumer complaint processing 

functions, enforcement program, and community affairs 

program. Under a cooperative agreement between the 

FDIC and the CFPB, FDIC employees were also offered 

voluntary transfer opportunities to become permanent 

CFPB employees. A total of forty-one FDIC employees 

transferred to the CFPB as of July 2011.

Public Awareness of Deposit Insurance Covera

The FDIC provides a significant amount of education 

for consumers and the banking industry on the rules for 

deposit insurance coverage. An important part of the 

FDIC’s deposit insurance mission is ensuring that bankers 

and consumers have access to accurate information about 

the FDIC’s rules for deposit insurance coverage. The FDIC 

has an extensive deposit insurance education program 

consisting of seminars for bankers, electronic tools 

for estimating deposit insurance coverage, and written 

and electronic information targeted for both bankers 

and consumers. 

In 2011, the FDIC continued its efforts to educate 

bankers and consumers about the rules and requirements 

for FDIC insurance coverage. The FDIC conducted 

seventeen telephone seminars for bankers on deposit 

insurance coverage, reaching an estimated 57,000 bankers 

participating at over 16,000 bank locations throughout 

the country. The FDIC also updated its deposit insurance 

coverage publications and educational tools for 

consumers and bankers, including brochures, resource 

guides, videos, and the Electronic Deposit Insurance 

Estimator (EDIE). 
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During 2011, the FDIC received and answered 

approximately 119,300 telephone deposit insurancerelated inquiries from consumers and bankers. The FDIC 

Call Center addressed 86,700 of these inquiries, and 

deposit insurance coverage subject matter experts handled 

the other 32,600. In addition to telephone inquiries about 

deposit insurance coverage, the FDIC received 2,500 

written inquiries from consumers and bankers. Of these 

inquiries, 99 percent received responses within two weeks, 

as required by corporate policy.

Resoltions an

The FDIC has the unique mission of protecting depositors 

of insured banks and savings associations. No depositor 

has ever experienced a loss on the insured amount of 

his or her deposit in an FDIC-insured institution due 

to a failure. Upon closure of an institution typically by 

its chartering authority—the state for state-chartered 

institutions, and the Office of the Comptroller of the 

Currency (OCC) for national banks, and federal savings 

associations4—the FDIC is appointed receiver, and the 

FDIC is responsible for resolving the failed bank or 

savings association. 

The FDIC employs a variety of business practices to 

resolve a failed institution. These business practices are 

typically associated with either the resolution process or 

the receivership process. Depending on the characteristics 

of the institution, the FDIC may recommend several of 

these practices to ensure the prompt and smooth payment 

of deposit insurance to insured depositors, to minimize 

the impact on the DIF, and to speed dividend payments to 

creditors of the failed institution. 

The resolution process involves valuing a failing 

institution, marketing it, soliciting and accepting bids 

for the sale of the institution, determining which bid is 

least costly to the insurance fund, and working with the 

acquiring institution through the closing process.

To minimize disruption to the local community, the 

resolution process must be performed quickly and as 

smoothly as possible. There are three basic resolution 

methods: purchase and assumption transactions, 

deposit payoffs, and Deposit Insurance National Bank 

(DINB) assumptions. 

The purchase and assumption (P&A) transaction is 

the most common resolution method used for failing 

institutions. In a P&A transaction, a healthy institution 

purchases certain assets and assumes certain liabilities of 

the failed institution. A variety of P&A transactions can be 

used. Since each failing bank situation is different, P&A 

transactions provide flexibility to structure deals that 

result in the highest value for the failed institution. For 

each possible P&A transaction, the acquirer may either 

acquire all or only the insured portion of the deposits. 

Loss sharing may be offered by the receiver in connection 

with a P&A transaction. In a loss-share transaction, the 

FDIC as receiver agrees to share losses on certain assets 

with the acquirer. The FDIC usually agrees to absorb a 

significant portion (for example, 80 percent) of future 

losses on assets that have been designated as “shared loss 

assets” for a specific period of time (for example, five to 

ten years). The economic rationale for these transactions 

is that keeping shared loss assets in the banking sector 

can produce a better net recovery than would the FDIC’s 

immediate liquidation of these assets.

Deposit payoffs are only executed if a bid for a P&A 

transaction does not meet the least-cost test or if no bids 

are received, in which case the FDIC, in its corporate 

capacity as deposit insurer, makes sure that the customers 

of the failed institution receive the full amount of their 

insured deposits. 

4 OCC assumed this responsibility from the Office of Thrift Supervision (OTS) on July 21, 2011.
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The Banking Act of 1933 authorizes the FDIC to establish 

a DINB to assume the insured deposits of a failed bank. 

A DINB is a new national bank with limited life and 

powers that allows failed bank customers a brief period 

of time to move their deposit account(s) to other insured 

institutions. Though relatively seldom used, a DINB 

allows for a failed bank to be liquidated in an orderly 

fashion, minimizing disruption to local communities and 

financial markets. 

The receivership process involves performing the closing 

functions at the failed institution, liquidating any 

remaining failed institution assets, and distributing 

any proceeds of the liquidation to the FDIC and other 

creditors of the receivership. In its role as receiver, the 

FDIC has used a wide variety of strategies and tools to 

manage and sell retained assets. These include, but are 

not limited to asset sale and/or management agreements, 

structured transactions, and securitizations. 

Financial Institution Failur

During 2011, there were 92 institution failures, compared 

to 157 failures in 2010. For the institutions that failed, 

the FDIC successfully contacted all known qualified and 

interested bidders to market these institutions. The FDIC 

also made insured funds available to all depositors within 

one business day of the failure if it occurred on a Friday 

and within two business days if the failure occurred on 

any other day of the week. There were no losses on insured 

deposits, and no appropriated funds were required to pay 

insured deposits.

The following chart provides a comparison of failure 

activity over the last three years. 

Failure Activity 2009–2011

Dola

2011 2010 2009

Total Institutions 92 157 140

Total Assets of Failed 

Institutions* $34.9 $92.1 $169.7

Total Deposits of 

Failed Institutions* $31.1 $79.5 $137.1

Estimated Loss to the DIF $7.9 $22.3 $37.1

*Total assets and total deposits data are based on the last Call Report 

filed by the institution prior to failure.

Asset Management and Sal

As part of its resolution process, the FDIC makes every 

effort to sell as many assets as possible to an assuming 

institution. Assets that are retained by the receivership 

are evaluated; for 95 percent of the failed institutions, at 

least 90 percent of the book value of marketable assets are 

marketed for sale within 90 days of an institution’s failure 

for cash sales and 120 days for structured sales. 

Structured sales for 2011 totaled $2.8 billion in unpaid 

principal balances from commercial real estate and 

residential loans acquired from various receiverships. 

These transactions often involved FDIC-guaranteed and 

nonguaranteed purchase money debt and equity in a 

limited liability company shared between the respective 

receivership that contributed the assets to the sale and 

the successful purchaser. Cash sales of assets for the 

year totaled $1.1 billion in book value. In addition to 

structured and cash sales, FDIC also use securitizations to 

dispose of bank assets. In 2011, securitization sales totaled 

$1.1 billion.
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As a result of our marketing and collection efforts, 

the book value of assets in inventory decreased by $6.1 

billion (23 percent) in 2011. The following chart shows the 

beginning and ending balances of these assets by 

asset type.

Assets in Inventory by Asset Type

Dol

Asset T

Ass

Inve

01/01/11

Ass

Inve

12/31/11

Securities $2,376 $1,225

Consumer Loans 56 31

Commercial Loans 1,029 585

Real Estate Mortgages 5,683 2,208

Other Assets/Judgments 2,103 1,396

Owned Assets 2,086 1,007

Net Investments in 

Subsidiaries 881 290

Structured and 

Securitized Assets 12,784 14,171

Total $26,998 $20,913

The FDIC uses contractors extensively to manage and sell 

the assets of failed institutions. Multiple improvements 

were made to controls over contractor costs and the 

quality of their deliverables, including the development 

of invoice review checklists, a standard contractor 

performance evaluation review process, and a series of 

peer-to-peer reviews.

Receivership Management Activitie

The FDIC, as receiver, manages failed banks and their 

subsidiaries with the goal of expeditiously winding up 

their affairs. The oversight and prompt termination of 

receiverships help to preserve value for the uninsured 

depositors and other creditors by reducing overhead and 

other holding costs. Once the assets of a failed institution 

have been sold and the final distribution of any proceeds 

is made, the FDIC terminates the receivership. In 2011, 

the number of receiverships under management increased 

by 27 percent, due to the increase in failure activity. The 

following chart shows overall receivership activity for the 

FDIC in 2011. 

Receivership Activity

Active Receiverships as of 01/01/11* 344

New Receiverships 92

Receiverships Terminated 5

Active Receiverships as of 12/31/11* 431

 *Includes five FSLIC Resolution Fund receiverships.

Minority and Women Outrea

In 2011, the FDIC awarded 1,936 contracts. Of these, 558 

contracts (29 percent) were awarded to Minority- and 

Women-Owned Businesses (MWOBs). The total dollar 

value of contracts awarded was $1.4 billion, of which $417 

million (29 percent) was awarded to MWOBs, compared 

to 24 percent for all of 2010. In addition, engagements 

of Minority- and Women-Owned Law Firms (MWOLFs) 

were 30 percent of all engagements; total payments of $23 

million to MWOLFs were 17 percent of all payments to 

outside counsel, compared to 10 percent for all of 2010. 

Policy modifications and contracting procedures have also 

resulted in the following changes and/or new initiatives:

★ The Office of Minority and Women Inclusion (OMWI) 

participates on contracting Technical Evaluation Panels 

as a voting member.

★ The FDIC entered into an MOU with the U.S. Small 

Business Administration to participate in their 8(a) 

Program in May 2011.

★ The FDIC issues some contracts on a regional basis, 

or allows contractors to bid on a subset of a contract, 

rather than requiring them to bid on the entire contract, 

in order to allow MWOBs and small businesses to be 

more competitive.
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In 2011, the FDIC exhibited at 18 procurement-specific 

trade shows to provide participants with the FDIC’s 

general contracting procedures, prime contractors’ 

contact information, and possible upcoming solicitations. 

Prime contractors are reminded of the FDIC’s emphasis 

on MWOB participation and are encouraged to 

subcontract or partner with MWOBs. The FDIC also 

exhibited at seven non-procurement events where 

contracting information was provided. In addition, the 

FDIC’s Legal Division was represented at trade shows 

where information was provided to MWOLFs about 

outside counsel opportunities and how to enter into cocounsel arrangements with majority firms.

FDIC personnel frequently met with MWOBs and 

MWOLFs in one-on-one meetings to discuss contracting 

opportunities at the FDIC. MWOBs are encouraged to 

register in the FDIC’s Contractor Resource List, which 

is an online self registration system that can be accessed 

through the FDIC’s website by any firm interested in 

doing business with the FDIC. FDIC personnel use the 

Contractor Resource List to develop source lists 

for solicitations. 

As a result of the Asset Purchaser, Investor, and Minority 

Depository Institutions Outreach seminars conducted 

in 2010, the FDIC developed an Investor Match Program 

(IMP). The IMP was launched in September 2011 to 

encourage and facilitate interaction between small 

investors, asset managers and large investors to bring 

sources of capital together with the expertise needed 

to participate in structured sales transactions. Two 

structured transactions workshops for Minority- and 

Women-Owned Investors and Asset Managers were held 

in New York, New York and Irvine, California. 

Information was presented on how structured 

transactions are planned and conducted, including an 

introduction and overview on the structured transactions 

process and bidder qualification procedures. In addition, 

speakers highlighted some key features of transaction 

documents, their experience in dealing with tax-related 

issues, as well as post-bid management oversight and the 

document reporting process. 

The FDIC piloted a Small Investor Program (SIP) in 2011 

to increase MWOB participation in accordance with 

Section 342 of Dodd-Frank. The SIP is geared towards 

marketing distressed loans under the structured sales 

program to smaller investors, many of whom are MWOBs. 

The SIP offers smaller-sized asset pools than a typical 

multi-bank structured loan sale. For this program, a 

pool of loans would typically be drawn from a single 

receivership resulting in the loan pool being secured by 

collateral in a more concentrated geographical area than 

would be found in a traditional, nationwide or regional 

multibank structured sale. The FDIC also adjusted the 

structure of the SIP to make offerings more accessible 

to smaller investors and to increase participation while 

maintaining a level playing field for all investors. 

In 2012, as the FDIC winds down the operations of failed 

institutions and liquidates residual assets, the FDIC 

will continue to encourage and foster diversity and the 

inclusion of MWOBs in its procurement activities, outside 

counsel engagements, and asset sales programs. 

Protecting Insured Depositors

The FDIC’s ability to attract healthy institutions to 

assume deposits and purchase assets of failed banks and 

savings associations at the time of failure minimizes the 

disruption to customers and allows assets to be returned 

to the private sector immediately. Assets remaining 

after resolution are liquidated by the FDIC in an orderly 

manner, and the proceeds are used to pay creditors, 

including depositors whose accounts exceeded the 

insurance limit. During 2011, the FDIC paid dividends of 

$12 million to depositors whose accounts exceeded the 

insured limit(s). 
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Professional Liability and Financial

Crimes Recoverie

FDIC staff works to identify potential claims against 

directors, officers, fidelity bond insurance carriers, 

appraisers, attorneys, accountants, mortgage loan brokers, 

title insurance companies, securities underwriters, 

securities issuers, and other professionals who may 

have contributed to the failure of an IDI. Once a claim 

is deemed meritorious and cost-effective to pursue, 

the FDIC initiates legal action against the appropriate 

parties. During 2011, the FDIC recovered $240.4 million 

from professional liability claims/settlements. The FDIC 

also authorized lawsuits related to 30 failed institutions 

against 264 individuals for director and officer liability 

with damage claims of $5.1 billion. The FDIC also 

authorized 19 other lawsuits for fidelity bond, liability 

insurance, attorney malpractice, appraiser malpractice, 

and RMBS claims. There also were 189 residential 

mortgage malpractice and fraud lawsuits pending as of 

year-end. At the end of 2011, the FDIC’s caseload included 

52 professional liability lawsuits (up from 27 at year-end 

2010) and 1,811 open investigations (down from 2,750) at 

year-end 2010.

In addition, as part of the sentencing process for those 

convicted of criminal wrongdoing against institutions 

that later failed, a court may order a defendant to 

pay restitution or to forfeit funds or property to the 

receivership. The FDIC, working in conjunction with the 

U.S. Department of Justice, collected $3,633,426 from 

criminal restitutions and forfeitures during the year. At 

year-end, there were 5,192 active restitution and forfeiture 

orders (up from 4,895 at year-end 2010). This includes 

294 FSLIC Resolution Fund orders, i.e., orders inherited 

from the Federal Savings and Loan Insurance Corporation 

on August 10, 1989, and orders inherited from the 

Resolution Trust Corporation on January 1, 1996.

Effective M

Strategi

The FDIC recognizes that it must effectively manage 

its human, financial, and technological resources 

to successfully carry out its mission and meet the 

performance goals and targets set forth in its annual 

performance plan. The FDIC must align these strategic 

resources with its mission and goals and deploy them 

where they are most needed to enhance its operational 

effectiveness and minimize potential financial risks to 

the DIF. Major accomplishments in improving the 

FDIC’s operational efficiency and effectiveness during 

2011 follow. 

Human Capital Managem

The FDIC’s human capital management programs are 

designed to recruit, develop, reward, and retain a highly 

skilled, cross-trained, diverse, and results-oriented 

workforce. In 2011, the FDIC stepped up workforce 

planning and development initiatives that emphasized 

hiring the additional skill sets needed to address 

requirements of Dodd-Frank, especially as it related to 

the oversight of systemically important financial 

institutions. Workforce planning also addressed the 

need to start winding down bank closure activities in 

the next few years, based on the decrease in the number of 

financial institution failures and institutions in atrisk categories. The FDIC also deployed a number of 

strategies to more fully engage all employees in advancing 

its mission.

Succession Management

In 2011, the FDIC expanded its education and training 

curriculum for employees in the business lines and 

support functions, and for leadership development. 

Additionally, classroom learning and development 

opportunities were supplemented and supported with 

the expansion of e-learning, simulations, electronic 

performance support systems, job aids, and tool kits to 

quickly facilitate work processes and overall efficiencies. 

The FDIC also engaged in a number of knowledge 
2011

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management initiatives to capture lessons learned and 

best practices during the financial crisis, in support of 

future corporate readiness.

The FDIC continues to expand leadership development 

opportunities to all employees, including newly hired 

employees. This curriculum takes a holistic approach, 

aligning leadership development with critical corporate 

goals and objectives, and promotes the desired corporate 

culture. By developing employees across the span of 

their careers, the FDIC builds a culture of leadership and 

further promotes a leadership succession strategy. The 

final course of the new leadership curriculum, which 

consists of five core courses, was launched in November 

2011. Four new electives were also delivered in 2011. 

Additionally, the FDIC formalized its Master’s of Business 

Administration (MBA) program for Corporate Managers 

and Executive Managers, in conjunction with the 

University of Massachusetts. Two candidates were selected 

for the 2011–2014 class.

Strategic Workforce Planning and Readiness

The FDIC used various employment strategies in 2011 to 

meet the need for additional human resources resulting 

from the number of failed financial institutions and 

the volume of additional examinations. Among these 

strategies, the FDIC reemployed over 200 retired FDIC 

examiners, attorneys, resolutions and receiverships 

specialists, and support personnel, and hired employees 

of failed institutions in temporary and term positions. 

The FDIC also recruited mid-career examiners who had 

developed their skills in other organizations, recruited 

loan review specialists and compliance analysts from the 

private sector, and redeployed current FDIC employees 

with the requisite skills from other parts of the agency. 

In response to the requirements of Dodd-Frank, the FDIC 

worked with the Office of the Comptroller of the Currency 

(OCC), the Office of Thrift Supervision (OTS), and the 

Consumer Financial Protection Bureau (CFPB) to close 

the OTS and transfer the OTS employees to the other 

agencies. In addition, certain employees from the Federal 

banking agencies were transferred to the CFPB. When the 

OTS closed on July 21, 2011, the FDIC received ninetyfive of its employees. Also, as part of the transfer under 

Dodd-Frank, the FDIC became the primary regulator for 

61 state-chartered thrifts. 

As the numbers of failed financial institutions increased 

during 2009 and 2010, the FDIC fully staffed two 

temporary satellite offices on both the West Coast and the 

East Coast to bring resources to bear in especially hard-hit 

areas. The West Coast Temporary Satellite Office opened 

in Irvine, California, in early spring of 2009 and as of yearend 2011 had 308 employees. The East Coast Temporary 

Satellite Office opened in Jacksonville, Florida, in the fall 

of 2009 and as of the end of 2011, had 383 employees. 

In January 2010, the FDIC Board authorized opening 

a third satellite office for the Midwest in Schaumburg, 

Illinois. During 2010, the office was established and, as 

of the end of 2011, had 255 employees. The FDIC also 

increased resolutions and receiverships staff in the Dallas 

regional office. Almost all of the employees in these new 

offices were hired on a nonpermanent basis to handle the 

temporary increase in bank-closing and asset management 

activities expected over the two to four years, beginning 

in 2009. The use of term appointments will allow the 

FDIC staff to return to an adjusted normal size once the 

crisis is over without the disruptions that reductions in 

permanent staff would cause.
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During 2011, plans were formulated, based on projections 

of a drop in the numbers of bank failures in 2012 and 

beyond, to begin the orderly closing of the temporary 

satellite offices, beginning with the Irvine office in 

January 2012. The Midwest Office is scheduled to close 

in September 2012, and the East Coast Office will close 

no earlier than the fourth quarter of 2013. The FDIC will 

provide transition services to the departing temporary and 

term employees. In addition, a number of these employees 

may be hired as permanent staff to complete the FDIC’s 

adjusted core staffing requirements. 

The FDIC continued to build workforce flexibility and 

readiness by increasing its entry-level hiring into the 

Corporate Employee Program (CEP). The CEP is a multiyear development program designed to cross-train new 

employees in FDIC major business lines. In 2011, 130 

new business line employees (1,012 hired since program 

inception in 2005) entered this multi-discipline program. 

The CEP continued to provide a foundation across the 

full spectrum of the FDIC’s business lines, allowing for 

greater flexibility to respond to changes in the financial 

services industry and in meeting the FDIC’s human 

capital needs. As in years past, the program continued 

to provide FDIC flexibility as program participants were 

called upon to assist with both bank examination and 

bank closing activities based on the skills they obtained 

through their program requirements and experiences. 

As anticipated, participants are also successfully earning 

their commissioned bank examiner and resolutions and 

receiverships credentials, having completed their three to 

four years of specialized training in field offices across the 

country. The FDIC had approximately 240 commissioned 

participants by the end of 2011. These individuals are 

well-prepared to lead examination and resolutions and 

receiverships activities on behalf of the FDIC.

Corporate Risk Management

In January of 2011, the FDIC Board authorized the 

creation of an Office of Corporate Risk Management 

and the recruitment of a Chief Risk Officer (CRO). That 

position was filled in August of 2011, and the new CRO 

took a proposal to the Board in December related to the 

organizational structure of the new Office. The Board 

subsequently approved this proposal for a small (15 staff) 

organization that would work with other Divisions and 

Offices to assess, manage and mitigate risks to the FDIC 

in the following major areas:

★ Open bank risks associated with the FDIC’s role as 

principal regulator of certain financial institutions 

and the provider of deposit insurance to all insured 

depository institutions. 

★ Closed bank risks associated with the FDIC 

management of risks associated with assets in 

receivership, including loss share arrangements and 

limited liability corporations. 

★ Economic and financial risks which are created for the 

FDIC and its insured institutions by changes in the 

macroeconomic and financial environment. 

★ Policy and regulatory risks arising in the legislative arena 

and those created by FDIC’s own policy initiatives. 

★ Internal structure and process risks associated with 

carrying out ongoing FDIC operations, including 

human resource management, internal controls, and 

audit work carried out by both OIG and GAO. 

★ Reputational risk associated with all of the 

activities of the FDIC as they are perceived by a range 

of external factors.

The Board also approved the creation of an Enterprise 

Risk Committee, chaired by the CRO, to replace the 

existing National Risk Committee and to broaden the 

mandate of this high level management committee to 

include both external and internal risks facing the FDIC. 

This Committee will help enhance senior management’s 

focus on risk, and support the preparation of quarterly 

reports to the Board on the risk profile of 

the institution.
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Employee Engagement

The FDIC continually evaluates its human capital 

programs and strategies to ensure that it remains an 

employer of choice and that all of its employees are 

fully engaged and aligned with the mission. The FDIC 

uses the Federal Employee Viewpoint Survey mandated 

by Congress to solicit information from employees. A 

corporate Culture Change Initiative was instituted in 2008 

to address issues resulting from the 2007 survey.

The Culture Change Initiative has continued to gain 

momentum, and significant progress is being made 

toward completing the goals identified in the Culture 

Change Strategic Plan. As evidenced of the progress 

made under the Culture Change Initiative, the FDIC was 

recognized in the 2011 “Best Places to Work” rankings as 

being the most improved federal agency and the overall 

number one best place to work in the Federal government, 

based on the results of the 2010 Federal Employee 

Viewpoint Survey. 

Employee Learning and Development 

The FDIC has a strong commitment to the learning 

and development of all employees that is embedded in 

its core values. Through its learning and development 

programs, the FDIC creates opportunity, enriches career 

development, and grows employees and future leaders. 

New employees can more quickly and thoroughly 

assume their job functions and assist with examination 

and resolution activities through the use of innovative 

learning solutions. To prepare new and existing employees 

for the challenges ahead, the FDIC has streamlined 

existing courses, promoted blended learning, and created 

online, just-in-time toolkits and job aids.

In support of business requirements, the FDIC provided 

its examiners with several new learning and development 

opportunities. “High Stakes Communication: 

Communicating with Resilience in Tough Situations,” 

was created to provide examiners with strategies and 

examples to enhance their skills in communicating with 

bank management during board and exit meetings. The 

video-based course was delivered to all examiners in 2011. 

The FDIC also increased the length of two of its core 

Acting Chairman Martin J. Gruenberg, shown here accepting the awards for the first-place ranking and most improved agency on the list of Best Places 

to Work in the Federal Government®, with (from left) Arleas Upton Kea, Ira Kitmacher, Pamela Mergen, and Nancy Hughes.
management’s iscu

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examiner schools, Loan Analysis School and Compliance 

Management School, to provide more content, instructor 

feedback, and practice time for application. In addition 

to developing new training, the FDIC anticipates a 20 

percent increase in organic growth for examiner training 

in 2012.

In support of knowledge and succession management, 

the FDIC is focused on capturing, maintaining, and 

documenting best practices and lessons learned from 

bank closing activity over the past two years. Capturing 

this information now is strategically important to ensure 

corporate readiness, while at the same time maintaining 

effectiveness as experienced employees retire and the 

temporary positions created to support the closing activity 

expire. The FDIC maintains its commitment to establish 

and maintain an effective solution to capture, maintain, 

and document best practices to help identify and develop 

future training and learning opportunities. 

In 2011, the FDIC provided its employees with 

approximately 170 instructor-led courses and 1,100 webbased courses to support various mission requirements. 

Approximately 12,000 instructor-led courses and 17,200 

web-based courses were completed.

In 2011, the FDIC received two prestigious awards 

for its learning and development programs. The 

Leadership Development Award from the Training 

Officers Consortium recognized the FDIC’s 

comprehensive leadership development curriculum, 

which includes learning opportunities for employees at 

all levels. The Learning Team received the Gold Award 

from Human Capital Media, recognizing the FDIC’s 

excellence in the design and delivery of employee 

development programs, including both technical 

training and leadership development.

Information Technology Manageme

In today’s rapidly changing business environment, 

technology is frequently the foundation for achieving 

many FDIC business goals, especially those addressing 

efficiency and effectiveness in an industry where timely 

and accurate communication and data are paramount for 

supervising institutions, resolving institution failures, and 

monitoring associated risks in the marketplace. 

Strengthening the FDIC’s Privacy Program

The FDIC has a well-established Privacy Program 

that works to maintain privacy awareness and 

promote transparency and public trust. Privacy and 

the protection of Sensitive Information (SI), such as 

personally identifiable information (PII), are integral 

to accomplishing the mission of the FDIC in both the 

banking industry and among U.S. consumers. The 

Privacy Program is a critical part of the FDIC’s 

business operations. 

In response to the surge in bank closings associated with 

the crisis, the FDIC completed the third of three in-depth 

assessments of the bank closing process to identify and 

address risks to the privacy and security of bank-customer 

SI. The recommended action items stemming from 

the third assessment will be incorporated into FDIC’s 

strategic objectives for 2012. In addition, during 2011, the 

FDIC improved the agency’s monitoring of the enterprise 

network to identify at-risk privacy data and prevent the 

loss of that information, particularly Social Security 

numbers. The FDIC proactively conducted unannounced 

privacy assessments of headquarter offices to assess any 

potentially unsecured SI. These walk-throughs were 

instrumental in improving employee and management 

awareness regarding proper privacy safeguards in the 

workplace. Further, the FDIC initiated an annual review 

of the agency’s digital library to identify, monitor, reduce, 

and secure documents containing sensitive data.
2011

A N N U A L R E P O R T

43

management’s iscu

As with information security, the banking crisis has 

resulted in an increased reliance on third-party vendors 

that process significant amounts of SI in support of bank 

closings. To ensure this PII is protected in accord with 

the FDIC’s privacy requirements, the agency performed 

vendor assessments of their controls over this sensitive 

information. In addition, the FDIC held its annual Privacy 

Clean-up Day for employees and contractors to reduce 

the volume of sensitive information held by the agency 

and therefore reduce the risk to internal and external 

individuals, and the FDIC. The FDIC also conducted 

an in-depth review of the FDIC’s thirty-two Privacy Act 

System of Record Notices (SORNs) and provided the 

results to the FDIC Board of Directors. 

IT Support for Regulatory Reform

The FDIC established a program designed to identify 

IT-related tasks needed to support the implementation 

of the requirements of Dodd-Frank. As of October 20, 

2011, twenty IT-related initiatives supporting Dodd-Frank 

requirements had been approved by the related IT Steering 

Committee. Of the approved projects, thirteen have been 

completed and two are in progress. Additional projects 

have been identified for 2012 and are being considered 

under the normal budgeting process.

Establishing a Business Intelligence Service Center 

The recent financial crisis has magnified the FDIC’s need 

to collect, validate, aggregate, and analyze data from 

internal and external sources, and to securely share this 

information via reports and dashboards with authorized 

cross-organizational decision makers. As a result, the 

FDIC established a Business Intelligence Service Center 

(BISC) to provide expert technical advice and assistance to 

line of business users in the acquisition, management, and 

analysis of data from internal and external sources; deliver 

Business Intelligence (BI) technical solutions, contribute 

to the enterprise data architecture, and facilitate corporate 

information sharing and management strategy. Since the 

BISC group was established in early 2011, the demand for 

BI project support has increased. Projects being conducted 

by the FDIC include Strategic Workforce Planning, Large 

Complex Financial Institutions Liquidity Monitoring 

and Reporting, Qualified Financial Contracts Analysis, 

Limited Liability Corporation Data Management, and 

Risk Share Assessment Management (the Chairman’s 

Dashboard). The BISC team also provides primary 

technical support for multiple corporate BI tools that 

support the Executive Resource Information Portal and 

the Office of Complex Financial Institution’s Liquidity 

Monitoring and Reporting.
2011

A N N U A L R E P O R T

45

financial hig

2. financial highlights

DepositInsu

The FDIC administers the Deposit Insurance 

Fund (DIF) and the FSLIC Resolution Fund 

(FRF), which fulfills the obligations of the 

former Federal Savings and Loan Insurance Corporation 

(FSLIC) and the former Resolution Trust Corporation 

(RTC). The following summarizes the condition of the 

DIF. (See the accompanying graphs on FDIC-Insured 

Deposits and Insurance Fund Reserve Ratios on the 

following page.)

For 2011, the DIF’s comprehensive income totaled $19.2 

billion compared to comprehensive income of $13.5 

billion during 2010. This $5.7 billion year-over-year 

increase was primarily due to a $3.6 billion decrease in the 

provision for insurance losses and $2.6 billion in revenue 

from DGP fees previously held as systemic risk deferred 

revenue, partially offset by a year-to-date net change in the 

fair value of available-for-sale securities of $284 million 

(U.S. Treasury obligations and trust preferred securities) 

and a $112 million decrease in assessments earned.

The provision for insurance losses was negative $4.4 

billion for 2011, compared to negative $848 million for 

2010. The negative provision for 2011 primarily resulted 

from a reduction in the contingent loss reserve due to the 

improvement in the financial condition of institutions 

that were previously identified to fail, and a reduction in 

the estimated losses for institutions that have failed in 

prior years. 

The DIF’s total liquidity declined by $3.8 billion, or 8 

percent, to $42.4 billion during 2011. The decrease was 

primarily the result of disbursing $11.9 billion to fund 

both current and prior years’ bank failures during 2011. 

However, it should be noted that 58 of the 92 current 

year failures were resolved as cash-conserving sharedloss transactions requiring substantially lower initial 

resolution payments thus helping to mitigate the decline 

in DIF’s liquidity balance. Moreover, during 2011, the 

DIF received $8.9 billion in dividends and other payments 

from its receiverships, which helped to mitigate the DIF 

liquidity’s decline.
financial hig

46

SOURCE: Commercial Bank Call and Thrift Financial Reports

Note: Beginning in the fourth quarter of 2010, estimated insured deposits include the entire balance 

noninterest-bearing transaction accounts.

Dollars in Billions

0

1,000

2,000

3,000

4,000

5,000

6,000

$7,000

SEP-08 DEC-08 MAR-09 JUN-09 SEP-09 DEC-09 MAR-10 JUN-10 SEP-10 DEC-10 MAR-11 JUN-11 SEP-11 DEC-11

Estimated DIF Insured Depos

Deposit Insurance Fund Reserve Ratio

0.0

0.3

0.6

0.9

1.2

-0.6

-0.3

Fund Balances as a Percent of Insured Deposits

SEP-08 DEC-08 MAR-09 JUN-09 SEP-09 DEC-09 MAR-10 JUN-10 SEP-10 DEC-10 MAR-11 JUN-11 SEP-11 DEC-11
2011

47

financial hig

Deposit Insurance Fund Selected Statistics

Dol

For the years ended 

2011 2010  2009 

Financial Results

Revenue $16,342 $13,380 $24,706 

Operating Expenses 1,625 1,593 1,271 

Insurance and Other Expenses (includes provision for loss) (4,541) (1,518) 59,438 

Net Income (Loss) 19,257 13,305 (36,003)

Comprehensive Income (Loss) 19,179 13,510 (38,138)

Insurance Fund Balance $11,827 $(7,352) $(20,862) 

Fund as a Percentage of Insured Deposits (reserve ratio) 0.17 % (0.12) % (0.39) %

Selected Statistics

Total DIF-Member Institutions1 7,357 7,657 8,012 

Problem Institutions 813 884 702 

Total Assets of Problem Institutions $319,432 $390,017 $402,782 

Institution Failures 92 157 140 

Total Assets of Failed Institutions in Year2 $34,923 $92,085 $169,709 

Number of Active Failed Institution Receiverships 426 336 179 

1 Commercial banks and savings institutions. Does not include U.S. insured branches of foreign banks.

2

 Total Assets data are based upon the last call report filed by the institution prior to failure.

Corpor

The FDIC segregates its corporate operating budget 

and expenses into two discrete components: ongoing 

operations and receivership funding. The receivership 

funding component represents expenses resulting from 

financial institution failures and is, therefore, largely 

driven by external forces, while the ongoing operations 

component accounts for all other operating expenses 

and tends to be more controllable and estimable. 

Corporate Operating expenses totaled $2.82 billion in 

2011, including $1.55 billion in ongoing operations and 

$1.27 billion in receivership funding. This represented 

approximately 93 percent of the approved budget for 

ongoing operations and 58 percent of the approved 

budget for receivership funding for the year. (The numbers 

above in this paragraph will not agree with the DIF and 

FRF financial statements due to differences in how items 

are classified.)

The Board of Directors approved a 2012 Corporate 

Operating Budget of approximately $3.28 billion, 

consisting of $1.78 billion for ongoing operations and 

$1.50 billion for receivership funding. The level of 2012 

ongoing operations budget is approximately $106 million 

(6.3 percent) higher than the 2011 ongoing operations 

budget, while the 2012 receivership funding budget is 

roughly $702 million (31.9 percent) lower than the 2011 

receivership funding budget. Although savings in this area 

are being realized, the 2012 receivership funding budget 
financial hig

48

allows for resources for contractor support as well as nonpermanent staffing for DRR, the Legal Division, and other 

organizations should workload in these areas require an 

immediate response.

Inves

The FDIC instituted a separate Investment Budget in 

2003. It has a disciplined process for reviewing proposed 

new investment projects and managing the construction 

and implementation of approved projects. Proposed IT 

projects are carefully reviewed to ensure that they are 

consistent with the FDIC’s enterprise architecture. The 

project approval and monitoring processes also enable the 

FDIC to be aware of risks to the major capital investment 

projects and facilitate appropriate, timely intervention to 

address these risks throughout the development process. 

An investment portfolio performance review is provided 

to the FDIC’s Board of Directors quarterly.

The FDIC undertook significant capital investments 

during the 2003–2011 period, the largest of which was 

the expansion of its Virginia Square office facility. Other 

projects involved the development and implementation 

of major IT systems. Investment spending totaled $274 

million during this period, peaking at $108 million in 

2004. Spending for investment projects in 2011 totaled 

approximately $8 million. In 2012, investment spending is 

estimated at $12 million. 

Investment Spending 2003–2011

Dollars in Millio

2003 2004 2005 2006 2007 2008 2009 2010 2011

0

20

40

60

80

100

$120
2011

A N N U A L R E P O R T

49

performance

3. performance results summ

Summary of 2011 Performanc

Program Area Performance Resul

Insurance ★ Updated the FDIC Board of Directors on loss, income, and reserve ratio projections for the 

Deposit Insurance Fund at the April and October meetings. 

★ Briefed the FDIC Board of Directors in April and October on progress in meeting the goals 

of the Restoration Plan. Based upon current fund projections, no changes to assessment 

rate schedules were necessary. 

★ Completed reviews of the recent accuracy of the contingent loss reserves. 

★ Hosted a risk management symposium, “Don’t Bet the Farm: Assessing the Boom in U.S. 

Farmland Prices” for agricultural lenders and other experts in agricultural finance to 

discuss risks associated with the escalating price of U.S. farmland during the past decade.

★ Researched and analyzed emerging risks and trends in the banking sector, financial 

markets, and the overall economy to identify issues affecting the banking industry and the 

deposit insurance fund. 

★ Provided policy research and analysis to FDIC leadership in support of the implementation 

of financial industry regulation, as well as support for testimony and speeches. 

★ Published economic and banking information and analyses through the FDIC Quarterly, 

FDIC Quarterly Banking Profile (QBP), FDIC State Profiles, and the Center for Financial 

Research Working Papers.

The FDIC successfully achieved 38 of the 43 

annual performance targets established in its 

2011 Annual Performance Plan. Five targets 

were deferred to a future date. There were no instances in 

which 2011 performance had a material adverse effect on 

the successful achievement of the FDIC’s mission or 

its strategic goals and objectives regarding its major 

program responsibilities.

Additional key accomplishments are noted below.
performance

50

Program Area Performance Resul

Insurance

(continued)

★ Answered 99 percent of written inquiries from consumers and bankers about FDIC deposit 

insurance coverage within 14 days.

★ Operated the Electronic Deposit Insurance Estimator (EDIE), which had 277,000 user 

sessions in 2011.

★ Amended FDIC’s deposit insurance resource materials for consumers and bankers to 

reflect the changes implemented by Section 627 of Dodd-Frank repealing Federal Reserve 

Regulation Q by updating:

X FDIC’s EDIE to reflect the Dodd-Frank Act changes and updated the English and 

Spanish tutorial for EDIE,

X FDIC Overview Video on Deposit Insurance Coverage for consumers and new 

bank employees, and 

X FDIC’s consumer and banker brochures on deposit insurance coverage.

These resources are available on the FDIC’s website with the video also available on the 

FDIC’s YouTube channel and downloadable for multimedia applications. 
2011

A N N U A L R E P O R T

51

performance

Program Area Performance Resul

Supervision and 

Consumer Protection

★ Conducted 2,734 Bank Secrecy Act examinations, including required follow-up 

examinations and visitations.

★Worked with other federal banking regulators and the Basel Committee on Banking 

Supervision to develop proposals to strengthen capital and liquidity requirements.

★ Published the Supervisory Insights journal to contribute to and promote sound principles 

and best practices for bank supervision; including a Special Foreclosure Edition that 

discussed lessons learned from the review of foreclosure practices. 

★ Among other releases, issued Financial Institution Letters (FILs) on (1) registering as a 

municipal advisor under the Securities and Exchange Commission’s new rule. In addition, 

23 disaster relief FILs were issued; (2) supervisory guidance on the Advanced Measurement 

Approach; and (3) proposed guidance on stress testing for banking organizations with 

more than $10 billion in total consolidated assets.

★ Issued an Interim Final Rule regarding resolution plans required for IDIs with $50 billion 

or more in total assets.

★ Adopted a final rule on resolution plan requirements per section 165 of Dodd-Frank. 

★ Began formulating resource plans for resolution of large insured depository institutions in 

conjunction with the other banking regulatory agencies. 

★ Revised the HMDA fair lending screening procedures to provide a broader set of 

information in support of efforts to identify institutions with significant compliance risks.

★ Developed an award that recognized financial institutions that were instrumental in 

the development of bank products that provide financial services to low- and moderateincome individuals.

★ Among other releases, issued FILs providing guidance on (1) registration of residential 

mortgage loan originators; (2) the FDIC’s new address for filing consumer complaints; and 

(3) retail foreign exchange transactions.

★ Conducted a teleconference call for the industry to review and discuss the FDIC’s 2010 

Overdraft Payment Program Supervisory Guidance, and participated in several industry 

outreach events to discuss the guidance.

★ Completed the transfer of supervisory responsibility for state-chartered thrifts on 

July 21, 2011.

★ Transferred ninety-five OTS employees to FDIC on July 21, 2011.

★ Issued the revised Circular 1431.1, “Preparing and Issuing Financial Institution Letters”, on 

March 31, 2011.

★ Completed a review of all recurring questionnaires and information requests to the 

industry and delivered a written report to the Office of the Chairman on June 30, 2011. 

Reorganized the external website so that bankers can locate Application, Notices & Filings 

more easily on the website as well as identify which forms can be completed through 

FDICconnect. The Notification of Performance of Bank Services form is scheduled to be 

released on FDICconnect on December 30, 2011.
performance

52

Program Area Performance Resul

Receivership 

Management

★ Completed on-site field work for reviews of 100 percent of the loss share and LLC 

agreements active as of December 31, 2010, to ensure full compliance with the terms and 

conditions of the agreements. Reviewed the final review reports and implemented an action 

plan to address the reports’ findings and recommendations for 75 percent of the loss-share 

reviews and 50 percent of the LLC reviews, including all reviews of agreements totaling 

more than $1.0 billion (gross book value).

★ Terminated at least 75 percent of new receiverships that are not subject to loss-share 

agreements, structured sales, or other legal impediments within three years of the date 

of failure.

★Made final decisions for 82 percent of all investigated claim areas that were within 18 

months of the institution’s failure date.

2011 Buget and Exp

(Excluding Investments)

$3,000

2,500

2,000

1,500

1,000

500

0

INSURANCE PROGRAM SUPERVISION AND

CONSUMER PROTECTION

PROGRAM

RECEIVERSHIP

MANAGMENT PROGRAM

GENERAL AND

ADMINISTRATIVE

BUDGET EXPENDITURES

The FDIC budget for 2011 totaled $3.88 billion. Excluding 

$213 million, or 6 percent, for Corporate General 

and Administrative expenditures, budget amounts 

were allocated to corporate programs as follows: $262 

million, or 7 percent, to the Insurance program; $984 

million, or 25 percent, to the Supervision and Consumer 

Protection program; and $2.4 billion, or 62 percent, to the 

Receivership Management program. 

Actual expenditures for the year totaled $2.8 billion. 

Excluding $167 million, or 6 percent, for Corporate 

General and Administrative expenditures, actual 

expenditures were allocated to programs as follows: $234 

million, or 8 percent, to the Insurance program; $875 

million, or 31 percent, to the Supervision and Consumer 

Protection program; and $1.5 billion, or 55 percent, to the 

Receivership Management program. 

2011 Budget and Expenditures (Support Allocated

Dollars in Millio
2011

A N N U A L R E P O R T

53

performance

Performance Resuts b

2011 Insurance Program Result

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.

#

An

Performance Goal 

1 Respond promptly to 

all financial institution 

closings and related 

emerging issues.

Number of business 

days after an 

institution failure 

that depositors have 

access to insured 

funds either through 

transfer of deposits to 

the successor insured 

depository institution 

or depositor payout.

Insured depositor 

losses resulting from 

a financial institution 

failure.

Depositors have access to insured funds 

within one business day if the failure occurs 

on a Friday.

Depositors have access to insured funds 

within two business days if the failure occurs 

on any other day of the week.

There are no depositor losses on 

insured deposits.

No appropriated funds are required to pay 

insured depositors.

Achieved.

See pg. 35.

2 Disseminate data and 

analyses on issues 

and risks affecting 

the financial services 

industry to bankers, 

supervisors, the public, 

and other stakeholders 

on an ongoing basis.

Scope and timeliness 

of information 

dissemination on 

identified or potential 

issues and risks.

Disseminate results of research and analyses in 

a timely manner through regular publications, 

ad hoc reports, and other means.

Undertake industry outreach activities to 

inform bankers and other stakeholders about 

current trends, concerns, and other available 

FDIC resources.

Achieved.

See pg. 49.

Achieved.

See pg. 49.

3 Set assessment rates to 

restore the insurance 

fund reserve ratio 

to the statutory 

minimum of 1.35 

percent of estimated 

insured deposits by 

September 30, 2020.

Update assessment 

projections and 

recommended 

changes.

Demonstrated 

progress in achieving 

the goals of the 

Restoration Plan.

Provide updated fund projections to the FDIC 

Board of Directors by June 30, 2011, and 

December 31, 2011.

Recommend changes to deposit insurance 

assessment rates for the DIF to the FDIC 

Board as necessary.

Provide updates to the FDIC Board by June 

30, 2011, and December 31, 2011.

Achieved.

See pg. 49.

Achieved.

See pg. 49.

Achieved.

See pg. 49.

Achieved.

See pg. 35.

Achieved.

See pg. 35.

Achieved.

See pg. 35.
performance

54

2011 Insurance Program Result

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.

#

An

Performance Goal 

4 Expand and 

strengthen the FDIC’s 

participation and 

leadership role in 

supporting robust 

international deposit 

insurance and banking 

systems.

Scope of information 

sharing and 

assistance available 

to international 

governmental bank 

regulatory and deposit 

insurance entities.

Undertake outreach activities to inform and 

train foreign bank regulators and deposit 

insurers.

Foster strong relationships with international 

banking regulators and associations that 

promote sound banking supervision and 

regulation, failure resolutions, and deposit 

insurance practices.

Lead the International Association of Deposit 

Insurers training on the methodology for 

assessing compliance with implementation 

of the Core Principles for Effective Deposit 

Insurance Systems.

Achieved.

See pgs. 18-21.

Achieved.

See pgs. 18-21.

Achieved.

See pg. 19.

5 Provide educational 

information to insured 

depository institutions 

and their customers 

to help them 

understand the rules 

for determining the 

amount of insurance 

coverage on deposit 

accounts.

Timeliness of 

responses to deposit 

insurance coverage 

inquiries.

Initiatives to increase 

public awareness of 

deposit insurance 

coverage changes.

Respond within two weeks to 95 percent of 

written inquires from consumers and bankers 

about FDIC deposit insurance coverage.

Conduct at least 12 telephone or inperson seminars for bankers on deposit 

insurance coverage.

Achieved.

See pg. 33.

Achieved.

See pg. 33.
2011

A N N U A L R E P O R T

55

performance

2011 Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-insured institutions are safe and sound. 

#

An

Performance Goal I

1 Conduct on-site 

risk management 

examinations to 

assess the overall 

financial condition, 

management practices 

and policies, and 

compliance with 

applicable laws and 

regulations of FDICsupervised depository 

institutions.

Percentage of required 

examinations 

conducted in 

accordance with 

statutory requirements 

and FDIC policy.

Conduct 100 percent of required risk 

management examinations within the time 

frames prescribed by statue and FDIC policy.

Achieved.

See pg. 21.

2 For all institutions 

that are assigned a 

composite Uniform 

Financial Institutions 

Rating of 3, 4, or 5, 

conduct on-site visits 

within six months 

after implementation 

of a corrective 

program. Ensure 

during these visits 

and subsequent 

examinations that the 

institution is fulfilling 

the requirements 

of the corrective 

program that has 

been implemented 

and that the actions 

taken are effectively 

addressing the 

underlying concerns 

identified during the 

examination.

Percentage of followup examinations and 

on-site visits of 3-, 4-, 

or 5-rated institutions 

conducted within 

required time frames.

Conduct 100 percent of required on-site visits 

within six months after implementation of a 

corrective program.

Achieved.

See pg. 22.
performance

56

2011 Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-insured institutions are safe and sound. 

#

An

Performance Goal I

3 Complete the 

transfer of personnel 

and supervisory 

responsibility for statechartered thrifts from 

the Office of Thrift 

Supervision to the 

FDIC in accordance 

with approved 

plans and statutory 

requirements.

Transfer of personnel 

and supervisory 

responsibility for statechartered thrifts from 

OTS to the FDIC.

Complete the transfer of supervisory 

responsibility for state-chartered thrifts by 

July 21, 2011.

Identify the OTS employees to be transferred 

and complete the transfer of those employees 

to the FDIC no later than 90 days after July 

21, 2011.

Achieved.

See pg. 51.

Achieved.

See pg. 51.

4 Assist in protecting the 

infrastructure of the 

U.S. banking system 

against terrorist 

financing, money 

laundering and other 

financial crimes.

Percentage of required 

examinations 

conducted in 

accordance with 

statutory requirements 

and FDIC policy. 

Conduct 100 percent of required Bank 

Secrecy Act examinations within the time 

frames prescribed by statute and FDIC policy.

Achieved.

See pg. 21.
2011

A N N U A L R E P O R T

57

performance

2011 Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-insured institutions are safe and sound. 

#

An

Performance Goal I

5 More closely align 

regulatory capital with 

risk and ensure that 

capital is maintained 

at prudential levels.

Implementation by 

the federal banking 

agencies of capital 

floors for banking 

organizations in 

accordance with 

the requirements of 

Section 171 of DFA.

Issuance by the federal 

banking agencies of 

proposed rules to 

implement Basel III 

regulatory capital 

enhancements.

Complete by June 30, 2011, the final rule 

addressing capital floors for banking 

organizations.

Complete by September 30, 2011, the Basel 

III Notice of Proposed Rulemaking (NPR) 

for the new definition of capital, the July 

2009 enhancements to resecuritizations risk 

weights, and securitization disclosures.

Complete by September 30, 2011, the Basel 

NPR for the new leverage ratio.

Complete by September 30, 2011, the Basel 

NPR for the new liquidity requirements.

Complete by December 31, 2011, the final 

rule on the Market Risk Amendment 

(includes finalizing alternatives to the use 

of credit ratings in accordance with 

DFA requirements).

Complete by September 30, 2011, the NPR for 

the Standardized Framework.

Achieved.

See pg. 25.

Deferred.

Deferred.

Deferred.

Deferred.

Deferred.

6 Identify and address 

risks in financial 

institutions designated 

as systemically 

important.

Establishment of 

institution monitoring 

and resolution 

planning programs for 

systemically important 

institutions.

Establish an ongoing FDIC monitoring 

program for all covered financial institutions.

Complete rulemaking to establish (with 

the Board of Governors of the Federal Reserve 

System) criteria for resolution 

plans to be submitted by systemically 

important institutions.

Achieved.

See pgs. 16-17.

Achieved.

See pg. 17.
performance

58

2011 Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-insured institutions are safe and sound. 

#

An

Performance Goal I

7 Facilitate more 

effective regulatory 

compliance so as to 

reduce regulatory 

burden on the 

banking industry, 

where appropriate, 

while maintaining 

the independence and 

integrity of the FDIC’s 

risk management and 

consumer compliance 

supervisory programs.

Issuance of revised 

corporate directive.

Completion of 

review of recurring 

questionnaires and 

information requests.

Issue by March 31, 2011, a revised corporate 

directive on the issuance of Financial 

Institution Letters (FILs) that includes 

a requirement that all FILs contain an 

informative section as to their applicability to 

smaller institutions (total assets under 

$1 billion).

Complete by June 30, 2011, a review of all 

recurring questionnaires and information 

requests to the industry and submit a report 

to FDIC management with recommendations 

on improving efficiency and ease of use, 

including a scheduled plan for implementing 

these revisions. Carry out approved 

recommendations in accordance with the plan.

Achieved.

See pg. 51.

Achieved.

See pg. 51.

Strategic Goal: Consumers’ rights are protected and FDIC-supervised institutions invest in their communities.

8 Conduct on-site 

CRA and compliance 

examinations to assess 

compliance with 

applicable laws and 

regulations by FDICsupervised depository 

institutions.

Percentage of 

examinations 

conducted in 

accordance with the 

time frames prescribed 

by FDIC policy.

Conduct 100 percent of required 

examinations within the time frames 

established by FDIC policy.

Achieved.

See pgs. 21-22.
2011

A N N U A L R E P O R T

59

performance

2011 Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-insured institutions are safe and sound. 

#

An

Performance Goal I

9 Take prompt and 

effective supervisory 

action to monitor 

and address 

problems identified 

during compliance 

examinations of FDICsupervised institutions 

that receive an overall 

3, 4, or 5 rating for 

compliance with 

consumer protection 

and fair lending laws.

Percentage of followup examinations 

or on-site visits of 

3-, 4-, and 5-rated 

institutions conducted 

within required time 

frames.

For all institutions that are assigned a 

compliance rating of 3, 4, or 5, conduct 

follow-up examinations or on-site visits 

within 12 months to ensure that each 

institution is fulfilling the requirements 

of any corrective programs that have been 

implemented and that the actions taken are 

effectively addressing the underlying concerns 

identified during the examination.

Achieved.

See pg. 22.

10 Complete the 

transfer of personnel 

and supervisory 

responsibility 

for compliance 

examinations of FDIC 

supervised institutions 

with more than $10 

billion in assets and 

their affiliates from 

the FDIC to the new 

Consumer Financial 

Protection Bureau 

(CFPB) in accordance 

with statutory 

requirements.

Transfer from 

the FDIC to the 

CFPB of personnel 

and supervisory 

responsibility for 

FDIC-supervised 

institutions with 

more than $10 billion 

in assets and their 

affiliates.

Complete by July 21, 2011, the transfer of 

supervisory responsibility from the FDIC to 

the CFPB.

Identify the FDIC employees to be transferred 

to the CFPB and transfer them in accordance 

with established time frames.

Achieved.

See pg. 33.

Achieved.

See pg. 33.

11 Effectively investigate 

and respond to written 

consumer complaints 

and inquiries about 

FDIC-supervised 

financial institutions.

Timely responses to 

written consumer 

complaints and 

inquiries.

Respond to 95 percent of written consumer 

complaints and inquiries within time frames 

established by policy, with all complaints 

and inquiries receiving at least an initial 

acknowledgement within two weeks.

Achieved.

See pg. 33.

Strategic Goal: Consumers’ rights are protected and FDIC-supervised institutions invest in their communities. 
performance

60

2011 Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-insured institutions are safe and sound. 

#

An

Performance Goal I

12 Establish, in 

consultation 

with the FDIC’s 

Advisory Committee 

on Economic 

Inclusion and other 

regulatory agencies, 

national objectives 

and methods for 

reducing the number 

of unbanked and 

underbanked 

individuals.

Completion of 

initiatives to facilitate 

progress in improving 

the engagement of 

low- and moderateincome individuals 

with mainstream 

financial institutions.

Launch the FDIC Model Safe Accounts 

Pilot, begin data collection on the accounts 

from banks, and start reporting on results of 

the pilot.

Continue to promote the results of the 

FDIC Small-Dollar Loan Pilot, and research 

opportunities for bringing small-dollar 

lending programs to scale, including 

exploring a test of employer-based lending 

using the federal workforce.

Engage in efforts to support safe 

mortgage lending in low- and moderateincome communities.

Achieved.

See pg. 28.

Achieved.

See pg. 28.

Achieved.

See pg. 28.

Strategic Goal: Consumers’ rights are protected and FDIC-supervised institutions invest in their communities.
2011

A N N U A L R E P O R T

61

performance

2011 Receivership Management Program Resul

Strategic Goal: Resolutions are orderly and receiverships are managed effectively.

#

An

Performance Goal I

1 Market failing 

institutions to all 

known qualified 

and interested 

potential bidders.

Scope of qualified 

and interested bidders 

solicited.

Contact all known qualified and 

interested bidders.

Achieved.

See pg. 35.

2 Value, manage, and 

market assets of failed 

institutions and their 

subsidiaries in a timely 

manner to maximize 

net return.

Percentage of the 

assets marketed for 

each failed institution.

For at least 95 percent of insured institution 

failures, market at least 90 percent of the 

book value of the institution’s marketable 

assets within 90 days of the failure date (for 

cash sales) or 120 days of the failure date (for 

structured sales).

Achieved.

See pg. 35.

3 Manage the 

receivership estate and 

its subsidiaries toward 

an orderly termination.

Timely termination of 

new receiverships.

Terminate at least 75 percent of new 

receiverships that are not subject to loss share 

agreements, structured sales, or other legal 

impediments within three years of the date 

of failure.

Achieved.

See pg. 52.

4 Complete reviews of 

all loss share and 

Limited Liability 

Corporation (LLC) 

agreements to ensure 

full compliance 

with the terms and 

conditions of 

the agreements.

Percentage of reviews 

of loss share and LLC 

agreements completed 

and action plans 

implemented.

Complete on-site field work for reviews of 100 

percent of the loss share and LLC agreements 

active as of December 31, 2010, to ensure full 

compliance with the terms and conditions of 

the agreements.

Review the final report and implement an 

action plan to address the report’s finding 

and recommendations for 75 percent of the 

loss share reviews and 50 percent of the LLC 

reviews, including all reviews of agreements 

totaling more than $1.0 billion (gross 

book value).

Achieved.

See pg. 52.

Achieved.

See pg. 52.
performance

62

2011 Receivership Management Program Resul

Strategic Goal: Resolutions are orderly and receiverships are managed effectively.

#

An

Performance Goal I

5 Conduct investigations 

into all potential 

professional 

liability claim 

areas for all failed 

insured depository 

institutions, and 

decide as promptly 

as possible to close 

or pursue each claim, 

considering the size 

and complexity of the 

institution.

Percentage of 

investigated claim 

areas for which a 

decision has been 

made to close or 

pursue the claim.

For 80 percent of all claim areas, make a 

decision to close or pursue professional 

liability claims within 18 months of the 

failure of an insured depository institution.

Achieved.

See pg. 52.
2011

A N N U A L R E P O R T

63

performance

Prior Years’ P

Refer to the respective full Annual Report of prior years for more information on performance results for those years. 

Minor wording changes may have been made to reflect current goals and targets. (Shaded areas indicate no such target 

existed for that respective year.)

Insurance Program Result

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.

Annual Performance Goals and T

1. Respond promptly to all financial institution closings and related emerging issue

Depositors have access to insured funds within one business day if the failure occurs 

on a Friday.

Achieved. Achieved. Achieved.

Depositors have access to insured funds within two business days if the failure occurs 

on any other day of the week.

Achieved. Achieved. Achieved.

Complete rulemaking/review comments received in response to the Advance 

Notice of Proposed Rulemaking on Large-Bank Deposit Insurance Determination 

Modernization.

Achieved.

There are no depositor losses on insured deposits. Achieved. Achieved. Achieved.

No appropriated funds are required to pay insured depositors. Achieved. Achieved. Achieved.

2. Identify and address risks to the Deposit Insurance Fund (DIF

Assess the insurance risks in large (all for 2008-2009) insured depository institutions 

and adopt appropriate strategies.

Achieved. Achieved.

Identify and follow up on all material issues raised through off-site review 

and analysis.

Achieved. Achieved.

Identify and analyze existing and emerging areas of risk, including non-traditional 

and subprime mortgage lending, declines in housing market values, mortgagerelated derivatives/collateralized debt obligations (CDOs), hedge fund ownership 

of insured institutions, commercial real estate lending, international risk, and other 

financial innovations.

Achieved. Achieved.

Address potential risks from cross-border banking instability through 

coordinated review of critical issues and, where appropriate, negotiate agreements 

with key authorities.

Achieved.

3. Disseminate data and analyses on issues and risks affecting the financial services industry to bankers, supervisors, the public,

and other stakeholders

Disseminate results of research and analyses in a timely manner through regular 

publications, ad hoc reports, and other means.

Achieved. Achieved. Achieved.

Industry outreach activities are undertaken to inform bankers and other stakeholders 

about current trends, concerns, and other available FDIC resources.

Achieved. Achieved. Achieved.
performance

64

Insurance Program Result

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.

Annual Performance Goals and T

4. Effectively administer temporary financial stability program

Provide liquidity to the banking system by guaranteeing noninterest-bearing 

transaction deposit account and new senior unsecured debt issued by eligible 

institutions under the TLGP.

Achieved.

Implement an orderly phase-out of new guarantees under the program when the 

period for issuance of new debt expires.

Achieved.

Substantially complete by September 30, 2009, the review of and recommendations to 

the Department of Treasury on CPP applications from FDIC-supervised institutions.

Achieved.

Expeditiously implement procedures for the LLP, including the guarantee to be 

provided for debt issued by Public Private Investment Funds, and provide information 

to financial institutions and private investors potentially interested in participating.

Achieved.

Expeditiously implement procedures to review the use of CPP funds, TLGP 

guarantees, and other resources made available under financial stability programs 

during examinations of participating FDIC-supervised institutions.

Achieved.

5. Set assessment rates to restore the insurance fund reserve ratio to the statutory minimum of at least 1.15% of estimated insure

deposits by year-end 2016, in accordance with the Amended Restoration Plan

Provide updated fund projections to the FDIC Board of Directors by June 30, 2010, 

and December 31, 2010.

Achieved.

Recommend deposit insurance assessment rates for the DIF to the FDIC Board 

as necessary.

Achieved.

Provide updates to the FDIC Board by June 30, 2010, and December 31, 2010. Achieved.

6. Maintain and improve the deposit insurance syste

Adopt and implement revisions to the pricing regulations that provide for greater risk 

differentiation among insured depository institutions reflecting both the probability 

of default and loss in the event of default.

Achieved.

Revise the guidelines and enhance the additional risk measures used to adjust 

assessment rates for large institutions.

Achieved.

Review the effectiveness of the new pricing regulations that were adopted to 

implement the reform legislation.

Achieved.

Enhance the additional risk measures used to adjust assessment rates for 

large institutions.

Achieved.

Develop a final rule on a permanent dividend system. Achieved.
2011

A N N U A L R E P O R T

65

performance

Insurance Program Result

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.

Annual Performance Goals and T

Ensure/enhance the effectiveness of the reserving methodology by applying 

sophisticated analytical techniques to review variances between projected losses and 

actual losses, and by adjusting the methodology accordingly.

Achieved. Achieved.

Set assessment rates to maintain the insurance fund reserve ratio between 1.15 and 

1.50 percent of estimated insured deposits. Restore to 1.15 percent by year-end 2015.

Achieved. Not 

Achieved.

Monitor progress in achieving the restoration plan. Achieved.

7. Provide educational information to insured depository institutions and their customers to help them understand the rules for

determining the amount of insurance coverage on deposit accounts

Conduct at least three sets of Deposit Insurance Seminar/teleconferences (per quarter 

in 2009) for bankers.

Achieved. Achieved.

Conduct outreach events and activities to support a deposit insurance education 

program that features the FDIC 75th anniversary theme.

Achieved.

Assess the feasibility of (and if feasible, define the requirements for) a consolidated 

Electronic Deposit Insurance Estimator (EDIE) application for bankers and 

consumers (to be developed in 2009).

Achieved.

Respond to 90 percent of inquiries from consumers and bankers about FDIC deposit 

insurance coverage within time frames established by policy.

Achieved.

Respond to 90 percent of written inquiries from consumers and bankers about FDIC 

deposit insurance coverage within two weeks.

Achieved.

Enter into deposit insurance education partnerships with consumer organizations to 

educate consumers.

Achieved.

Expand avenues for publicizing deposits insurance rules and resources to consumers 

through a variety of media.

Achieved.

8. Expand and strengthen the FDIC’s participation and leadership role in providing technical guidance, training, consulting

services, and information to international governmental banking and deposit insurance organizations; and in supporting robust 

international deposit insurance systems

Undertake outreach activities to inform and train foreign bank regulators and 

deposit insurers. 

Achieved. Achieved. Achieved.

Foster strong relationships with international banking regulators and associations 

that promote sound banking supervision and regulation, failure resolutions and 

deposit insurance practices. 

Achieved. Achieved. Achieved.

Develop methodology for assessing compliance with implementation of the Core 

Principles for Effective Deposit Insurance Systems.

Achieved.
performance

66

Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-supervised institutions are safe and sound.

Annual Performance Goals and T

1. Conduct on-site risk management examinations to assess the overall financial condition, management practices and policies, and

compliance with applicable laws and regulations of FDIC-supervised depository institutions

One hundred percent of required risk management examinations are conducted 

on schedule.

Achieved. Achieved. Achieved.

2. Take prompt and effective supervisory action to address unresolved problems identified during the FDIC examination of FDICsupervised institutions that receive a composite Uniform Financial Institutions Rating of “3”, “4”, or “5” (problem institution

Monitor FDIC-supervised insured depository institutions’ compliance with formal and informal enforcement actions

One hundred percent of required on-site visits are conducted within six months of 

completion of the prior examination to confirm that the institution is fulfilling the 

requirements of the corrective program.

Achieved.

One hundred percent of follow-up examinations are conducted within 12 months 

of completion of the prior examination to confirm that identified problems have 

been corrected.

Achieved. Achieved. Achieved.

3. Assist in protecting the infrastructure of the U.S. banking system against terrorist financing, money laundering and oth

financial crimes

One hundred percent of required Bank Secrecy Act (BSA) examinations are conducted 

on schedule.

Achieved Achieved. Achieved.

4. More closely align regulatory capital with risk in large or multinational banks while maintaining capital at prudential level

Develop options for refining Basel II that are responsive to lessons learned from the 

2007-2008 market turmoil.

Achieved.

Conduct analyses of early results of the performance of new capital rules in light of 

recent financial turmoil as information becomes available.

Achieved. Achieved.

Working domestically and internationally, develop improvements to regulatory capital 

requirements based on the experience of the recent financial market turmoil.

Achieved.

5. More closely align regulatory capital with risk and ensure that capital is maintained at prudential level

Complete by December 31, 2010, the rulemaking for implementing the Standardized 

Approach for an appropriate subset of U.S. banks.

Deferred.

Complete by December 31, 2010, the rulemaking for amending the floors for banks 

that calculate their risk-based capital requirements under the Advanced Approaches 

Capital rule to ensure capital requirements meet safety-and-soundness objectives.

Not 

Achieved.

Complete by December 31, 2010, the rulemaking for implementing revisions to the 

Market Risk Amendment of 1996.

Deferred.
2011

A N N U A L R E P O R T

67

performance

Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-supervised institutions are safe and sound.

Annual Performance Goals and T

Complete by December 31, 2010, the rulemaking for implementing revisions to 

regulatory capital charges for resecuritizations and asset-backed commercial paper 

liquidity facilities.

Deferred.

6. More closely align regulatory capital with risk in banks not subject to Basel II capital rules while maintaining capital at

prudential levels

Finalize a regulatory capital framework based on the Basel II “Standardized 

Approach” as an option for U.S. banks not required to use the new 

advanced approaches.

Achieved.

7. Ensure that FDIC-supervised institutions that plan to operate under the new Basel II Capital Accord are well positioned to respond

to the new capital requirements

Performed on-site examinations or off-site analyses of all FDIC-supervised banks that 

have indicated a possible intention to operate under Basel II to ensure that they are 

effectively working toward meeting required qualification standards.

Not 

Applicable.

8. Reduce regulatory burden on the banking industry while maintaining appropriate consumer protection and safety and

soundness safeguards

Complete and evaluate options for refining the current risk-focused approach used in 

the conduct of BSA/AML examinations to reduce the burden they impose on FDICsupervised institutions.

Achieved.

Strategic Goal: Consumers’ rights are protected and FDIC-supervised institutions invest in their communities.

Annual Performance Goals and T

1. Conduct on-site CRA and compliance examinations to assess compliance with applicable laws and regulations by FDIC-supervised

depository institutions and in accordance with the FDIC’s examination frequency policy

One hundred percent of required examinations are conducted on schedule. Achieved. Achieved. Achieved.

2. Take prompt and effective supervisory action to monitor and address problems identified during compliance examinations of

FDIC-supervised institutions that received an overall “3”, “4”, or “5” rating for compliance with consumer protection and fair 

lending laws

One hundred percent of follow-up examinations or visitations are conducted within 

12 months from the date of a formal enforcement action to confirm compliance with 

the prescribed enforcement action.

Achieved. Not 

Achieved.

Achieved.
performance

68

Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-supervised institutions are safe and sound.

Annual Performance Goals and T

3. Determine the need for changes in current FDIC practices for following up on significant violations of consumer compliance laws

and regulations identified during examinations of banks for compliance with consumer protection and fair lending laws

Complete a review of the effectiveness of the 2007 instructions issued on the 

handling of repeat instances of significant violations identified during compliance 

examinations.

Achieved.

4. Scrutinize evolving consumer products, analyze their current or potential impact on consumers and identify potentially harmful

or illegal practices. Promptly institute a supervisory response program across FDIC-supervised institutions when such practices

are identified

Proactively identify and respond to harmful or illegal practices associated with 

evolving consumer products.

Achieved. Achieved.

Develop and implement new supervisory response programs across all FDICsupervised institutions to address potential risks posed by new consumer products.Achieved.

5. Provide effective outreach related to the CRA, fair lending, and community developmen

Conduct 50 in 2009 (125 in prior years) technical assistance (examination support) 

efforts or banker/community outreach activities related to CRA, fair lending, and 

community development.

Achieved. Achieved.

Evaluate the Money Smart initiative and curricula for necessary updates and 

enhancements, such as games for young people, information on elder financial abuse, 

and additional language versions, if needed.

Achieved.

Initiate the longitudinal survey project to measure the effectiveness of the Money Smart

for Young Adults curriculum.

Achieved.

Release a “Young Adult” version of the Money Smart curriculum. Achieved.

Distribute at least 10,000 copies of the “Young Adult” version of Money Smart. Achieved.

Analysis of survey results is disseminated within six months of completion of the 

survey through regular publications, ad hoc reports, and other means.

Achieved.

Provide technical assistance, support, and consumer outreach activities in all six 

FDIC regions to at least eight local NeighborWorks® America affiliates or local 

coalitions that are providing foreclosure mitigation counseling in high need areas. 

Achieved. Achieved.
2011

A N N U A L R E P O R T

69

performance

Supervision and Consumer Protection Program Resul

Strategic Goal: FDIC-supervised institutions are safe and sound.

Annual Performance Goals and T

6. Continue to expand the FDIC’s national leadership role in development and implementation of programs and strategies to

encourage and promote broader economic inclusion within the nation’s banking system

Expand the number of AEI coalitions by two. Achieved.

Analyze quarterly data submitted by participating institutions to identify early trends 

and potential best practices.

Achieved. Achieved.

Open 27,000 new bank accounts. Achieved.

Initiate new small-dollar loan products in 32 financial institutions. Achieved.

Initiate remittance products in 32 financial institutions. Achieved.

Reach 18,000 consumers through financial education initiatives. Achieved.

7. Educate consumers about their rights and responsibilities under consumer protection laws and regulation

Expand the use of media, such as the Internet, videos, and MP3 downloads, 

to disseminate information to the public on their rights and responsibilities 

as consumers.

Achieved.

8. Effectively investigate and respond to written consumer complaints and inquiries about FDIC-supervised financial institution

Responses are provided to 95 percent (90 percent for 2008) of written complaints and 

inquiries within time frames established by policy, with all complaints and inquiries 

receiving at least an initial acknowledgment within two weeks.

Achieved. Achieved. Achieved.

9. Establish, in consultation with the FDIC’s Advisory Committee on Economic Inclusion and other regulatory agencies, national

objectives and methods for reducing the number of unbanked and underbanked individuals

Facilitate completion of final recommendation on the initiatives identified in the 

Advisory Committee’s strategic plan.

Achieved.

Implement, or establish plans to implement, Advisory Committee recommendations 

approved by the FDIC for further action, including new research, demonstration and 

pilot projects, and new and revised supervisory and public policies.

Achieved.
performance

70

Receivership Management Program Resul

Strategic Goal: Recovery to creditors of receiverships is achieved.

Annual Performance Goals and T

 1. Market failing institutions to all known qualified and interested potential bidder

Contact all known qualified and interested bidders. Achieved. Achieved. Achieved.

2. Value, manage, and market assets of failed institutions and their subsidiaries in a timely manner to maximize net retur

Ninety percent of the book value of a failed institution’s marketable assets is 

marketed within 90 days of failure.

Achieved. Achieved.

For at least 95 percent of insured institution failures, market at least 90 percent of 

the book value of the institution’s marketable assets within 90 days of the failure 

date (for cash sales) or 120 days of the failure date (for structured sales).

Achieved.

Implement enhanced reporting capabilities from the Automated 

Procurement System.

Achieved.

Ensure that all newly designated oversight managers and technical monitors receive 

training in advance of performing contract administration responsibilities.

Achieved.

Optimize the effectiveness of oversight managers and technical monitors by 

restructuring work assignments, providing enhanced technical support, and 

improving supervision.

Achieved.

Identify and implement program improvements to ensure efficient and 

effective management of the contract resources used to perform receivership 

management functions.

Achieved.

3. Manage the receivership estate and its subsidiaries toward an orderly terminatio

Terminate all receiverships within 90 days of the resolution of all impediments. Achieved.

Terminate within three years of the date of failure, at least 75 percent of new 

receiverships that are not subject to loss-share agreements, structured sales, or other 

legal impediments.

Achieved. Achieved.

4. Conduct investigations into all potential professional liability claim areas for all failed insured depository institutions and decide

as promptly as possible to close or pursue each claim, considering the size and complexity of the institution

For 80 percent of all claim areas, a decision is made to close or pursue claims within 

18 months of the failure date.

Achieved. Achieved. Achieved.
2011

A N N U A L R E P O R T

71

financials

4. financial statements and note
Financia 

72

DepositInsu

Federal Deposit Insurance Corporation

Deposit Insurance Fund Balance Sheet at December 

Dolars

2011 2010

Assets

Cash and cash equivalents $3,277,839 $27,076,606 

Cash and investments - restricted - systemic risk (Note 16)

(Includes cash/cash equivalents of $1,627,073 at December 31, 2011 

and $5,030,369 at December 31, 2010)

4,827,319 6,646,968 

 Investment in U.S. Treasury obligations, net (Note 3) 33,863,245 12,371,268 

 Trust preferred securities (Note 5) 2,213,231 2,297,818 

 Assessments receivable, net (Note 9) 282,247 217,893 

 Receivables and other assets - systemic risk (Note 16) 1,948,151 2,269,422 

 Interest receivable on investments and other assets, net 488,179 259,683 

 Receivables from resolutions, net (Note 4) 28,548,396 29,532,545 

 Property and equipment, net (Note 6) 401,915 416,065 

Total Assets $75,850,522 $81,088,268 

Liabilities 

 Accounts payable and other liabilities $374,164 $514,287 

 Unearned revenue - prepaid assessments (Note 9) 17,399,828 30,057,033 

 Liabilities due to resolutions (Note 7) 32,790,512 30,511,877 

 Debt Guarantee Program liabilities - systemic risk (Note 16) 117,027 29,334 

 Deferred revenue - systemic risk (Note 16) 6,639,954 9,054,541 

 Postretirement benefit liability (Note 13) 187,968 165,874 

Contingent liabilities for: 

 Anticipated failure of insured institutions (Note 8) 6,511,321 17,687,569 

 Systemic risk (Note 16) 2,216 119,993 

 Litigation losses (Note 8) 1,000 300,000 

Total Liabilities 64,023,990 88,440,508 

Commitments and off-balance-sheet exposure (Note 14)

Fund Balance

 Accumulated Net Income (Loss) 11,560,990 (7,696,428)

Accumulated Other Comprehensive Income

 Unrealized gain on U.S. Treasury investments, net (Note 3) 47,697 26,698 

 Unrealized postretirement benefit loss (Note 13) (33,562) (18,503)

 Unrealized gain on trust preferred securities (Note 5) 251,407 335,993 

Total Accumulated Other Comprehensive Income 265,542 344,188

Total Fund Balance 11,826,532 (7,352,240)

Total Liabilities and Fund Balance $75,850,522 $81,088,268 

The accompanying notes are an integral part of these financial statements.
2011

A N N U A L R E P O R T

73

financials

Federal Deposit Insurance Corporatio

Deposit Insurance Fund Statement of Income and Fund Balance for the Years Ended Decembe

Dolars

2011 2010

Revenue

 Assessments (Note 9) $13,498,587 $13,610,436 

 Interest on U.S. Treasury obligations 127,621 204,871 

 Systemic risk revenue (Note 16) (131,141) (672,818)

 Other revenue (Note 10) 2,846,929 237,425 

Total Revenue 16,341,996 13,379,914 

Expenses and Losses

 Operating expenses (Note 11) 1,625,351 1,592,641 

 Systemic risk expenses (Note 16) (131,141) (672,818)

 Provision for insurance losses (Note 12) (4,413,629) (847,843)

 Insurance and other expenses 3,996 3,050 

Total Expenses and Losses (2,915,423) 75,030

Net Income 19,257,419 13,304,884 

Other Comprehensive Income

 Unrealized gain (loss) on U.S. Treasury investments, net 20,999 (115,429)

 Unrealized postretirement benefit loss (Note 13) (15,059) (15,891)

 Unrealized (loss) gain on trust preferred securities (Note 5) (84,587) 335,993 

Total Other Comprehensive (Loss) Income (78,647) 204,673

Comprehensive Income 19,178,772 13,509,557 

Fund Balance - Beginning (7,352,240) (20,861,797)

Fund Balance - Ending $11,826,532 $(7,352,240

The accompanying notes are an integral part of these financial statements.

DepositInsu
Financia 

74

Federal Deposit Insurance Corporatio

Deposit Insurance Fund Statement of Cash Flows for the Years Ended Decembe

Dolars

2011 2010

Operating Activities

Net Income: $19,257,419 $13,304,884 

Adjustments to reconcile net income to net cash (used by) operating activities:

Amortization of U.S. Treasury obligations 388,895 (5,149)

Treasury Inflation-Protected Securities inflation adjustment (25,307) (23,051)

Depreciation on property and equipment 77,720 68,790 

Loss on retirement of property and equipment 1,326 620 

Provision for insurance losses (4,413,629) (847,843)

Unrealized Loss on postretirement benefits (15,059) (15,891)

Change in Operating Assets and Liabilities:

(Increase) Decrease in assessments receivable, net (64,354) 62,617 

(Increase) in interest receivable and other assets (227,962) (34,194)

(Increase) in receivables from resolutions (5,802,003) (16,607,671)

Decrease in receivables - systemic risk 321,271 1,029,397 

(Decrease) Increase in accounts payable and other liabilities (140,123) 240,949 

Increase in postretirement benefit liability 22,094 20,922 

(Decrease) in contingent liabilities - systemic risk (117,777) (1,289,957)

(Decrease) in contingent liabilities - litigation losses (276,000) 0 

Increase (Decrease) in liabilities due to resolutions 2,278,635 (4,199,849)

Increase in Debt Guarantee Program liabilities - systemic risk 87,693 27,318 

(Decrease) in unearned revenue - prepaid assessments (12,657,206) (12,670,068)

(Decrease) Increase in deferred revenue - systemic risk (2,399,644) 1,203,936 

Net Cash (Used by) Operating Activities (3,704,011) (19,734,24

Investing Activities

Provided by:

Maturity of U.S. Treasury obligations 12,976,273 21,558,000 

Used by:

Purchase of property and equipment (64,896) (96,659)

Purchase of U.S. Treasury obligations (36,409,429) (30,143,138)

Net Cash (Used by) Investing Activities (23,498,052) (8,681,797

Net (Decrease) in Cash and Cash Equivalents (27,202,063) (28,416,03

Cash and Cash Equivalents - Beginning 32,106,975 60,523,012

Unrestricted Cash and Cash Equivalents - Ending 3,277,839 27,076,6

Restricted Cash and Cash Equivalents - Ending 1,627,073 5,030,36

Cash and Cash Equivalents - Ending $4,904,912 $32,106,97

DepositInsu

The accompanying notes are an integral part of these financial statements.
2011

A N N U A L R E P O R T

75

financials

1. Legislation and Operations of the 

Deposit Insurance Fu

Ove

The Federal Deposit Insurance Corporation (FDIC) 

is the independent deposit insurance agency created 

by Congress in 1933 to maintain stability and public 

confidence in the nation’s banking system. Provisions that 

govern the operations of the FDIC are generally found 

in the Federal Deposit Insurance (FDI) Act, as amended 

(12 U.S.C. 1811, et seq). In carrying out the purposes of 

the FDI Act, the FDIC, as administrator of the Deposit 

Insurance Fund (DIF), insures the deposits of banks and 

savings associations (insured depository institutions). 

In cooperation with other federal and state agencies, 

the FDIC promotes the safety and soundness of insured 

depository institutions by identifying, monitoring and 

addressing risks to the DIF. Commercial banks, savings 

banks and savings associations (known as “thrifts”) 

are supervised by either the FDIC, the Office of the 

Comptroller of the Currency, or the Federal Reserve Board. 

The FDIC, through administration of the DIF, is 

responsible for protecting insured bank and thrift 

depositors from loss due to institution failures. The 

FDIC is required by section 13 of the FDI Act to resolve 

troubled institutions in a manner that will result in the 

least possible cost to the DIF. This section permits an 

exception if a systemic risk determination demonstrates 

that compliance with the least-cost test would have 

serious adverse effects on economic conditions or 

financial stability and that any action or assistance 

pursued under the systemic risk determination would 

avoid or mitigate such adverse effects. A systemic risk 

determination under this statutory provision can only be 

triggered by the Secretary of the Treasury, in consultation 

with the President, and upon the written recommendation 

of two-thirds of both the FDIC Board of Directors and 

the Board of Governors of the Federal Reserve System. 

Until passage of the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank Act) on July 21, 

2010 (see “Recent Legislation” below), a systemic risk 

determination would have permitted open bank assistance 

to an individual insured depository institution (IDI). As 

explained below, such open bank assistance is no longer 

available. The systemic risk provision requires the FDIC 

to recover any related losses to the DIF through one or 

more special assessments from all IDIs and, with the 

concurrence of the Secretary of the Treasury, depository 

institution holding companies (see Note 16).

The FDIC is also the administrator of the FSLIC 

Resolution Fund (FRF). The FRF is a resolution 

fund responsible for the sale of remaining assets and 

satisfaction of liabilities associated with the former 

Federal Savings and Loan Insurance Corporation (FSLIC) 

and the former Resolution Trust Corporation. The DIF 

and the FRF are maintained separately by the FDIC to 

support their respective functions.

Pursuant to the enactment of the Dodd-Frank Act, the 

FDIC is the manager of the Orderly Liquidation Fund 

(OLF). Established as a separate fund in the U.S. Treasury 

(Treasury), the OLF is inactive and unfunded until the 

FDIC is appointed as receiver for a covered financial 

company (a failing financial company, such as a bank 

holding company or nonbank financial company for 

which a systemic risk determination has been made as 

set forth in section 203 of the Dodd-Frank Act). At the 

commencement of an orderly liquidation of a covered 

Nots to the

Deposit

December 31, 2011 and 2010
Financia 

76

financial company, the FDIC may borrow funds required 

by the receivership from the Treasury, up to the Maximum 

Obligation Limitation for each covered financial 

company and in accordance with an Orderly Liquidation 

and Repayment Plan. Borrowings will be repaid to the 

Treasury with the proceeds of asset sales. If such proceeds 

are insufficient, any remaining shortfall must be recovered 

from assessments imposed on financial companies as 

specified in the Dodd-Frank Act.

Recent L

The Dodd-Frank Act (Public Law 111-203) provides 

comprehensive reform of the supervision and regulation 

of the financial services industry. Under this legislation, 

the FDIC’s responsibilities include 1) liquidating failing 

systemically important financial firms in an orderly 

manner as manager of the newly created OLF; 2) issuing 

regulations, jointly with the Federal Reserve Board (FRB), 

requiring that nonbank financial companies supervised 

by the FRB and bank holding companies with assets equal 

to or exceeding $50 billion provide the FRB, the FDIC, 

and the Financial Stability Oversight Council (FSOC) a 

plan for their rapid and orderly resolution in the event of 

material financial distress or failure; 3) serving as a voting 

member of the FSOC; 4) undertaking backup examination 

authority for nonbank financial companies supervised by 

the FRB and bank holding companies with at least $50 

billion in assets; 5) bringing backup enforcement actions 

against depository institution holding companies if their 

conduct or threatened conduct poses a risk of loss to the 

DIF; and 6) providing federal oversight of state-chartered 

thrifts, beginning upon the transfer of such authority 

from the Office of Thrift Supervision (which occurred on 

July 21, 2011). 

The Dodd-Frank Act limits the systemic risk 

determination authority under section 13 of the FDI Act 

to IDIs for which the FDIC has been appointed receiver. 

As amended by the Dodd-Frank Act, the FDI Act now 

requires that any action taken or assistance provided 

pursuant to a systemic risk determination must be for 

the purpose of winding up the IDI in receivership. Under 

Title XI of the Dodd-Frank Act, the FDIC is granted 

new authority to establish a widely available program 

to guarantee obligations of solvent IDIs or solvent 

depository institution holding companies (including 

affiliates) upon the systemic determination of a liquidity 

event during times of severe economic distress. This 

program would not be funded by the DIF but rather 

by fees and assessments paid by all participants in 

the program. If fees are insufficient to cover losses or 

expenses, the FDIC must impose a special assessment on 

participants as necessary to cover the shortfall. Any excess 

funds at the end of the liquidity event program would be 

deposited in the General Fund of the Treasury. 

The Dodd-Frank Act also made changes related to the 

FDIC’s deposit insurance mandate. These changes include 

a permanent increase in the standard deposit insurance 

amount to $250,000 (retroactive to January 1, 2008) and 

unlimited deposit insurance coverage for noninterestbearing transaction accounts for two years, from 

December 31, 2010, to the end of 2012. Additionally, the 

legislation changed the assessment base from a depositsbased formula to one based on assets and established new 

reserve ratio requirements (see Note 9). 

Operations

The primary purposes of the DIF are to 1) insure the 

deposits and protect the depositors of IDIs and 2) resolve 

failed IDIs upon appointment of the FDIC as receiver, in 

a manner that will result in the least possible cost to the 

DIF (unless a systemic risk determination is made). 

The DIF is primarily funded from deposit insurance 

assessments. Other available funding sources, if necessary, 

are borrowings from the Treasury, the Federal Financing 

Bank (FFB), Federal Home Loan Banks, and IDIs. The 

FDIC has borrowing authority of $100 billion from the 

Treasury and a Note Purchase Agreement with the FFB, 

not to exceed $100 billion, to enhance the DIF’s ability 

to fund both deposit insurance and Temporary Liquidity 

Guarantee Program (TLGP) obligations. 
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financials

A statutory formula, known as the Maximum Obligation 

Limitation (MOL), limits the amount of obligations the 

DIF can incur to the sum of its cash, 90 percent of the fair 

market value of other assets, and the amount authorized 

to be borrowed from the Treasury. The MOL for the DIF 

was $114.4 billion and $106.3 billion as of December 31, 

2011 and 2010, respectively. 

Operations of

The FDIC is responsible for managing and disposing of 

the assets of failed institutions in an orderly and efficient 

manner. The assets held by receiverships, pass-through 

conservatorships, and bridge institutions (collectively, 

resolution entities), and the claims against them, are 

accounted for separately from DIF assets and liabilities to 

ensure that proceeds from these entities are distributed 

in accordance with applicable laws and regulations. 

Accordingly, income and expenses attributable to 

resolution entities are accounted for as transactions of 

those entities. Resolution entities are billed by the FDIC 

for services provided on their behalf.

2. Summary of Significant Accounting Polic

Ge

These financial statements pertain to the financial 

position, results of operations, and cash flows of the 

DIF and are presented in conformity with U.S. generally 

accepted accounting principles (GAAP). As permitted 

by the Federal Accounting Standards Advisory Board’s 

Statement of Federal Financial Accounting Standards 

34, The Hierarchy of Generally Accepted Accounting Principles, 

Including the Application of Standards Issued by the Financial 

Accounting Standards Board, the FDIC prepares financial 

statements in conformity with standards promulgated 

by the Financial Accounting Standards Board (FASB). 

These statements do not include reporting for assets and 

liabilities of resolution entities because these entities 

are legally separate and distinct, and the DIF does not 

have any ownership interests in them. Periodic and final 

accountability reports of resolution entities are 

furnished to courts, supervisory authorities, and others 

upon request.

Use of

Management makes estimates and assumptions that 

affect the amounts reported in the financial statements 

and accompanying notes. Actual results could differ 

from these estimates. Where it is reasonably possible 

that changes in estimates will cause a material change 

in the financial statements in the near term, the nature 

and extent of such potential changes in estimates have 

been disclosed. The more significant estimates include 

the assessments receivable and associated revenue; 

the allowance for loss on receivables from resolutions 

(including shared-loss agreements); liabilities due to 

resolutions; the estimated losses for anticipated failures, 

litigation, and representations and warranties; guarantee 

obligations for the TLGP and structured transactions; 

the valuation of trust preferred securities; and the 

postretirement benefit obligation. 

Cash 

Cash equivalents are short-term, highly liquid investments 

consisting primarily of U.S. Treasury Overnight Certificates.

Invesment in U.S

DIF funds are required to be invested in obligations of the 

United States or in obligations guaranteed as to principal 

and interest by the United States. The Secretary of the 

Treasury must approve all such investments in excess of 

$100,000 and has granted the FDIC approval to invest 

DIF funds only in U.S. Treasury obligations that are 

purchased or sold exclusively through the Bureau of the 

Public Debt’s Government Account Series program.

The DIF’s investments in U.S. Treasury obligations are 

classified as available-for-sale. Securities designated as 

available-for-sale are shown at fair value. Unrealized gains 

and losses are reported as other comprehensive income. 

Realized gains and losses are included in the Statement of 
Financia 

78

Income and Fund Balance as components of net income. 

Income on securities is calculated and recorded on a daily 

basis using the effective interest or straight-line method 

depending on the maturity of the security. 

Revenue Recognitio

Assessment revenue is recognized for the quarterly period 

of insurance coverage based on an estimate. The estimate 

is derived from an institution’s risk-based assessment rate 

and assessment base for the prior quarter adjusted for 

the current quarter’s available assessment credits, certain 

changes in supervisory examination ratings for larger 

institutions, and a modest assessment base growth factor. 

At the subsequent quarter-end, the estimated revenue 

amounts are adjusted when actual assessments for the 

covered period are determined for each institution 

(see Note 9). 

Capital Asse

The FDIC buildings are depreciated on a straight-line 

basis over a 35- to 50-year estimated life. Leasehold 

improvements are capitalized and depreciated over the 

lesser of the remaining life of the lease or the estimated 

useful life of the improvements, if determined to be 

material. Capital assets depreciated on a straight-line basis 

over a five-year estimated useful life include mainframe 

equipment; furniture, fixtures, and general equipment; 

and internal-use software. Personal computer equipment 

is depreciated on a straight-line basis over a three-year 

estimated useful life.

Reporting on Var

FDIC receiverships engaged in structured transactions, 

some of which resulted in the issuance of note obligations 

that were guaranteed by the FDIC in its corporate capacity 

(see Note 8, Contingent Liabilities for: FDIC Guaranteed 

Debt of Structured Transactions). As the guarantor of 

note obligations for several structured transactions, 

the FDIC in its corporate capacity is the holder of a 

variable interest in a number of variable interest entities 

(VIEs). The FDIC conducts a qualitative assessment of 

its relationship with each VIE as required by Accounting 

Standards Codification (ASC) Topic 810, Consolidation, 

modified by Accounting Standards Update (ASU) No. 

2009-17, Improvements to Financial Reporting by Enterprises 

Involved with Variable Interest Entities. These assessments 

are conducted to determine if the FDIC in its corporate 

capacity has 1) power to direct the activities that most 

significantly impact the economic performance of the 

VIE and 2) an obligation to absorb losses of the VIE or 

the right to receive benefits from the VIE that could 

potentially be significant to the VIE. When a variable 

interest holder has met both of these characteristics, 

the enterprise is considered the primary beneficiary 

and must consolidate the VIE. In accordance with the 

provisions of ASC 810, an assessment of the terms of the 

legal agreement for each VIE was conducted to determine 

whether any of the terms had been activated or modified 

in a manner which would cause the FDIC in its corporate 

capacity to be characterized as a primary beneficiary. In 

making that determination, consideration was given to 

which, if any, activities were significant to each VIE. Often, 

the right to service collateral, to liquidate collateral, or to 

unilaterally dissolve the limited liability company (LLC) 

or trust was determined to be the most significant activity. 

In other cases, it was determined that the structured 

transactions did not include such significant activities 

and that the design of the entity was the best indicator of 

which party was the primary beneficiary. The results of 

each analysis identified a party other than the FDIC in its 

corporate capacity as the primary beneficiary. 

The conclusion of these analyses was that the FDIC in 

its corporate capacity has not engaged in any activity 

that would cause the FDIC in its corporate capacity to 

be characterized as a primary beneficiary to any VIE with 

which it was involved at December 31, 2011 and 2010. 

Therefore, consolidation is not required for the 2011 and 

2010 DIF financial statements. In the future, the FDIC in 

its corporate capacity may become the primary beneficiary 

upon the activation of provisional contract rights that 
2011

A N N U A L R E P O R T

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financials

extend to the Corporation if payments are made on 

guarantee claims. Ongoing analyses will be required in 

order to monitor consolidation implications under 

ASC 810.

The FDIC’s involvement with VIEs, in its corporate 

capacity, is fully described in Note 8.

Relate

The nature of related parties and a description of relatedparty transactions are discussed in Note 1 and disclosed 

throughout the financial statements and footnotes.

Disclosure abo

Accounting 

Recent accounting pronouncements have been deemed 

to be not applicable or material to the financial statements 

as presented.

Rec

Reclassifications have been made in 2010 financial 

statements to conform to the presentation used in 2011.

3. Investment in U.S. Treasury Obligations, 

As of December 31, 2011 and 2010, investments in U.S. 

Treasury obligations, net, were $33.9 billion and $12.4 

billion, respectively. As of December 31, 2011 and 2010, 

the DIF held $5.0 billion and $2.0 billion, respectively, of 

Treasury Inflation-Protected Securities (TIPS), which are 

indexed to increases or decreases in the Consumer Price 

Index for All Urban Consumers (CPI-U).
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80

(a) For TIPS, the yields in the above table are stated at their real yields at purchase, not their effective yields. Effective yields on TIPS include a long-term annual 

inflation assumption as measured by the CPI-U. The long-term CPI-U consensus forecast is 1.8 percent, based on figures issued by the Congressional Budget 

Office and Blue Chip Economic Indicators in early 2011. 

(b) Includes one Treasury note totaling $1.8 billion which matured on Saturday, December 31, 2011. Settlement occurred on the next business day, 

January 3, 2012. 

(c) All unrealized losses occurred as a result of temporary changes in market interest rates. These unrealized losses occurred over a period of less than a year. 

Unrealized losses related to the TIPS have converted to unrealized gains by January 31, 2012, and unrealized losses related to the U.S. Treasury notes and 

bonds existed on just one security that matured with no unrealized loss on January 31, 2012, and thus the FDIC does not consider these securities to be other 

than temporarily impaired at December 31, 2011.

Total Investment in U.S. Treasury Obligations, Net at December 31, 20

Dolars

Ma

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purchasea

Ne

Car

Amou

unrea

hol

g

unrea

hol

loses

U.S. Treasury notes and bon

Within 1 year 0.27% $24,500,000b $24,889,547 $17,842 $(93) $24,907,296

After 1 year 

through 5 years 0.93% 3,900,000 3,923,428 38,778 0 3,962,206

U.S. Treasury Inflation-Protected Securiti

Within 1 year 0.51% 1,200,000 1,537,664 659 (8) 1,538,315

After 1 year 

through 5 years -0.92% 3,050,000 3,464,909 0 (9,481) 3,455,428

Total $32,650,000 $33,815,548 $57,279 $(9,582)c $33,863,245

Total Investment in U.S. Treasury Obligations, Net at December 31, 2

Dolars

Mat

yiel

purchasea

Ne

Car

Amou

unrea

hol

g

unrea

hol

loses 

U.S. Treasury notes and bon

Within 1 year 0.73% $3,000,000 $3,052,503 $2,048 $(31) $3,054,520 

U.S. Treasury Inflation-Protected Securiti

Within 1 year 3.47% 1,375,955 1,375,967 1,391 0 1,377,358 

After 1 year 

through 5 years 2.41% 615,840 621,412 22,381 0 643,793 

U.S. Treasury bil

Within 1 year 0.19% 7,300,000 7,294,688 909 0 7,295,597 

Total $12,291,795 $12,344,570 $26,729 $(31)b $12,371,268 

(a) For TIPS, the yields in the above table are stated at their real yields at purchase, not their effective yields. Effective yields on TIPS include a long-term annual 

inflation assumption as measured by the CPI-U. The long-term CPI-U consensus forecast is 1.8 percent, based on figures issued by the Congressional 

Budget Office and Blue Chip Economic Indicators in early 2010. 

(b) All unrealized losses occurred as a result of temporary changes in market interest rates. The unrealized loss on one security occurred over a period of 

less than a year and converted to an unrealized gain by January 31, 2011, and thus the FDIC does not consider the security to be other than temporarily 

impaired at December 31, 2010.
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A N N U A L R E P O R T

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financials

4. Receivables from Resolutions, Net

The receivables from resolutions include payments made 

by the DIF to cover obligations to insured depositors 

(subrogated claims), advances to resolution entities for 

working capital, and administrative expenses paid on 

behalf of resolution entities. Any related allowance for 

loss represents the difference between the funds advanced 

and/or obligations incurred and the expected repayment. 

Estimated future payments on losses incurred on assets 

sold to an acquiring institution under a shared-loss 

agreement (SLA) are factored into the computation of 

the expected repayment. Assets held by DIF resolution 

entities (including structured transaction-related assets; 

see Note 8) are the main source of repayment of the DIF’s 

receivables from resolutions. 

As of December 31, 2011, there were 426 active 

receiverships, including 92 established in 2011. As of 

December 31, 2011 and 2010, DIF resolution entities 

held assets with a book value of $71.4 billion and $80.4 

billion, respectively (including $50.5 billion and $53.4 

billion, respectively of cash, investments, receivables due 

from the DIF, and other receivables). Ninety-nine percent 

of the current asset book value of $71.4 billion is held by 

resolution entities established since 2008.

Estimated cash recoveries from the management and 

disposition of assets that are used to determine the 

allowance for losses are based on asset recovery rates from 

several sources including actual or pending institutionspecific asset disposition data, failed institution-specific 

asset valuation data, aggregate asset valuation data on 

several recently failed or troubled institutions, sampled 

asset valuation data, and empirical asset recovery data 

based on failures as far back as 1990. Methodologies 

for determining the asset recovery rates incorporate 

estimating future cash recoveries, net of applicable 

liquidation cost estimates, and discounting based on 

market-based risk factors applicable to a given asset’s 

type and quality. The resulting estimated cash recoveries 

are then used to derive the allowance for loss on the 

receivables from these resolutions.

For failed institutions resolved using a whole bank 

purchase and assumption transaction with an 

accompanying SLA, the projected future shared-loss 

payments, recoveries, and monitoring costs on the 

covered assets sold to the acquiring institution under the 

agreement are considered in determining the allowance 

for loss on the receivables from these resolutions. The 

shared-loss cost projections are based on the covered 

assets’ intrinsic value which is determined using financial 

models that consider the quality, condition and type of 

covered assets, current and future market conditions, 

risk factors and estimated asset holding periods. For 

year-end 2011 financial reporting, the shared-loss cost 

estimates were updated for the majority (85% or 235) of 

the 278 active shared-loss agreements; the remaining 43 

were already based on recent loss estimates. The updated 

shared-loss cost projections for the larger agreements were 

primarily based on new third-party valuations estimating 

the cumulative loss of covered assets. The remaining 

agreements were stratified by receivership age. A random 

sample of banks within each age stratum was selected for 

new third-party loss estimations, and valuation results 

from the sample banks were aggregated and extrapolated 

to banks within the like age stratum based on asset type 

and performance status. 

Receivables from Resolutions, 

Net at December 3

Dolars

2011 2010

Receivables from 

closed banks $121,369,428 $115,896,763 

Allowance for losses (92,821,032) (86,364,218)

Total $28,548,396 $29,532,545
Financia 

82

Note that estimated asset recoveries are regularly 

evaluated during the year, but remain subject to 

uncertainties because of potential changes in economic 

and market conditions. Continuing economic 

uncertainties could cause the DIF’s actual recoveries to 

vary significantly from current estimates. 

Whole Bank Purch

Transactions with 

Since the beginning of 2008, the FDIC resolved 281 

failures using whole bank purchase and assumption 

resolution transactions with accompanying SLAs on 

assets purchased by the financial institution acquirer. 

The acquirer typically assumes all of the deposits 

and purchases essentially all of the assets of a failed 

institution. The majority of the commercial and 

residential loan assets are purchased under an SLA, 

where the FDIC agrees to share in future losses and 

recoveries experienced by the acquirer on those assets 

covered under the agreement. SLAs are used by the FDIC 

to keep assets in the private sector and to minimize 

disruptions to loan customers.

Losses on the covered assets are shared between the 

acquirer and the FDIC in its receivership capacity of the 

failed institution when losses occur through the sale, 

foreclosure, loan modification, or write-down of loans 

in accordance with the terms of the SLA. The majority 

of the agreements cover a five- to 10-year period with the 

receiver covering 80 percent of the losses incurred by the 

acquirer and the acquiring bank covering 20 percent. 

Prior to March 26, 2010, most SLAs included a threshold 

amount, above which the receiver covered 95 percent of 

the losses incurred by the acquirer. As mentioned above, 

the estimated shared-loss liability is accounted for by 

the receiver and is included in the calculation of the 

DIF’s allowance for loss against the corporate receivable 

from the resolution. As shared-loss claims are asserted 

and proven, DIF receiverships satisfy these shared-loss 

payments using available liquidation funds and/or by 

drawing on amounts due from the DIF for funding the 

deposits assumed by the acquirer (see Note 7). 

As of December 31, 2011, 249 receiverships have made 

shared-loss payments totaling $16.2 billion. In addition, 

DIF receiverships are estimated to pay an additional 

amount of $26.6 billion over the duration of these SLAs 

on $135.0 billion in total remaining covered assets.

Concentration

Financial instruments that potentially subject the DIF 

to concentrations of credit risk are receivables from 

resolutions. The repayment of the DIF’s receivables 

from resolutions is primarily influenced by recoveries 

on assets held by DIF receiverships and payments on the 

covered assets under SLAs. The majority of the $155.9 

billion in remaining assets in liquidation ($20.9 billion) 

and current shared-loss covered assets ($135.0 billion) 

are concentrated in commercial loans ($83.1 billion), 

residential loans ($52.5 billion), securities ($3.4 billion), 

and structured transaction-related assets as described 

in Note 8 ($14.2 billion). Most of the assets in these 

asset types originated from failed institutions located in 

California ($43.7 billion), Florida ($18.1 billion), Illinois 

($13.2 billion), Puerto Rico ($13.1 billion), Georgia ($12.8 

billion) and Alabama ($12.7 billion).

5. Trust Preferred Securitie

Pursuant to a systemic risk determination, the Treasury, 

the FDIC, and the Federal Reserve Bank of New York 

executed terms of a guarantee agreement on January 15, 

2009 with Citigroup to provide loss protection on a pool 

of approximately $301.0 billion of assets that remained 

on the balance sheet of Citigroup. In consideration for 

its portion of the shared-loss guarantee at inception, the 

FDIC received $3.025 billion of Citigroup’s preferred 

stock. All shares of the preferred stock were subsequently 

converted to Citigroup Capital XXXIII trust preferred 

securities (TruPs) with a liquidation amount of $1,000 per 

security and a distribution rate of 8 percent per annum 

payable quarterly. The principal amount is due in 2039. 
2011

A N N U A L R E P O R T

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financials

On December 23, 2009, Citigroup terminated the 

guarantee agreement, citing improvements in its financial 

condition. The FDIC incurred no loss from the guarantee 

prior to the termination of the agreement. In connection 

with the early termination of the agreement, the FDIC 

agreed to reduce its portion of the $3.025 billion in TruPs 

by $800 million. However, pursuant to an agreement 

between the Treasury and the FDIC, the Treasury agreed 

to return $800 million in TruPs on behalf of the FDIC 

from its portion of Citigroup TruPs holdings received 

as a result of the shared-loss agreement. The FDIC has 

retained the $800 million of Citigroup TruPs as security 

in the event payments are required to be made by the DIF 

for guaranteed debt instruments issued by Citigroup and 

its affiliates under the TLGP (see Note 16). The FDIC will 

transfer an aggregate liquidation amount of $800 million 

in TruPs to the Treasury, plus any related interest, less any 

payments made or required to be made under the TLGP 

within five days of the date on which no Citigroup debt 

remains outstanding under the TLGP. The fair value of 

these TruPs and related interest are recorded as systemic 

risk assets (see Note 16).

The remaining $2.225 billion (liquidation amount) of 

TruPs held by the FDIC is classified as available-for-sale 

debt securities in accordance with FASB ASC Topic 320, 

Investments – Debt and Equity Securities. At December 31, 

2011, the fair value of the TruPs was $2.213 billion (see 

Note 15). An unrealized holding gain of $251 million is 

included in accumulated other comprehensive income. 

6. Property and Equipment, Net

Property and Equipment, Net at December

Dolars

2011 2010

Land $37,352 $37,352 

Buildings 

(including leasehold 

improvements) 316,129 312,173

Application software 

(includes work-inprocess) 130,718 122,736

Furniture, fixtures, 

and equipment 159,120 144,661

Accumulated 

depreciation (241,404) (200,857)

Total $401,915 $416,065

The depreciation expense was $78 million and $69 million 

for 2011 and 2010, respectively.

7. Liabilities Due to Resolutions

As of December 31, 2011 and 2010, the DIF recorded 

liabilities totaling $32.7 billion and $30.4 billion to 

resolution entities representing the agreed-upon value 

of assets transferred from the receiverships, at the time 

of failure, to the acquirers/bridge institutions for use in 

funding the deposits assumed by the acquirers/bridge 

institutions. Ninety-one percent of these liabilities are 

due to failures resolved under whole-bank purchase and 

assumption transactions, most with an accompanying 

SLA. The DIF satisfies these liabilities either by directly 

sending cash to the receivership to fund shared-loss 

and other expenses or by offsetting receivables from 

resolutions when the receivership declares a dividend. 

In addition, there was $80 million in unpaid deposit 

claims related to multiple receiverships as of December 

31, 2011 and 2010. The DIF pays these liabilities when the 

claims are approved. 
Financia 

84

8. Contingent Liabilities fo

Anticipated Failure

The DIF records a contingent liability and a loss provision 

for DIF-insured institutions that are likely to fail, absent 

some favorable event such as obtaining additional capital 

or merging, when the liability is probable and reasonably 

estimable. The contingent liability is derived by applying 

expected failure rates and loss rates to institutions based 

on supervisory ratings, balance sheet characteristics, and 

projected capital levels. 

The banking industry continued recovering in 2011. The 

industry recorded total net income of $119.5 billion for 

all of 2011, an increase of nearly 40 percent from 2010 net 

income. The improvement in industry earnings continued 

to be driven by declining loan loss provisions, with fullyear provisions at their lowest level in four years. At the 

same time, the pace of U.S. economic growth slowed, 

unemployment remained at historically high levels, and 

real estate markets exhibited ongoing weaknesses in 

many parts of the country. These factors have slowed the 

improvement in asset quality and contributed to keeping 

the number of problem institutions and failures well 

above historic norms. Notwithstanding these challenges, 

the losses to the DIF from failures that occurred in 2011 

fell short of the amount reserved at the end of 2010, as the 

aggregate number and size of institution failures in 2011 

were less than anticipated. The removal from the reserve of 

banks that did fail in 2011, as well as projected favorable 

trends in bank supervisory downgrade and failure rates 

and the smaller size of institutions that remain troubled, 

all contributed to a decline by $11.2 billion to $6.5 billion 

in the contingent liability for anticipated failures of 

insured institutions at the end of 2011.

In addition to these recorded contingent liabilities, the 

FDIC has identified risk in the financial services industry 

that could result in additional losses to the DIF should 

potentially vulnerable insured institutions ultimately 

fail. As a result of these risks, the FDIC believes that it is 

reasonably possible that the DIF could incur additional 

estimated losses of up to $10.2 billion for year-end 2011 

as compared to $24.5 billion for year-end 2010. The 

actual losses, if any, will largely depend on future 

economic and market conditions and could differ 

materially from this estimate.

During 2011, 92 banks failed with combined assets at the 

date of failure of $36.6 billion. Supervisory and market data 

suggest that while the financial performance of the banking 

industry should continue to improve over the coming year, 

ongoing asset quality problems and limited opportunities 

for earnings growth will continue to result in an elevated 

level of stress for the industry. The FDIC continues to 

evaluate the ongoing risks to affected institutions in light 

of the existing economic and financial conditions, and the 

extent to which such risks will continue to put stress on the 

resources of the insurance fund.

Litigat

The DIF records an estimated loss for unresolved legal 

cases to the extent that those losses are considered 

probable and reasonably estimable. During 2011, the 

contingent liability declined by $299 million to $1 

million due primarily to a payment of $276 million for 

a judgment of one legal case for which an allowance was 

previously recorded. As of December 31, 2011 and 2010, 

the FDIC has determined that there are no reasonably 

possible losses from unresolved cases.

Other C

IndyMac Federal Bank Representation and Indemnification Contingent Liability

On March 19, 2009, the FDIC as receiver of IndyMac 

Federal Bank (IMFB) and certain subsidiaries (collectively, 

sellers) sold substantially all of the assets of IMFB and 

the respective subsidiaries, including mortgage loans 

and mortgage loan servicing rights, to OneWest Bank 

and its affiliates. To maximize sale returns, the sellers 
2011

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made certain representations customarily made by 

commercial parties regarding the assets and agreed to 

indemnify the acquirers for losses incurred as a result 

of breaches of such representations, losses incurred as a 

result of the failure to obtain contractual counterparty 

consents to the sale, and third party claims arising from 

pre-sale acts and omissions of the sellers or the failed 

bank. Although the representations and indemnifications 

were made by or are obligations of the sellers, the FDIC, 

in its corporate capacity, guaranteed the receivership’s 

indemnification obligations under the sale agreements. 

The representations relate generally to ownership of and 

right to sell the assets; compliance with applicable law 

in the origination of the loans; accuracy of the servicing 

records; validity of loan documents; and servicing of the 

loans serviced for others. Until the periods for asserting 

claims under these arrangements have expired and all 

indemnification claims quantified and paid, losses could 

continue to be incurred by the receivership and, in turn, 

the DIF, either directly, as a result of the FDIC corporate 

guaranty of the receivership’s indemnification obligations, 

or indirectly, as a result of a reduction in the receivership’s 

assets available to pay the DIF’s claims as subrogee for 

insured accountholders. The acquirers’ rights to assert 

claims to recover losses incurred as a result of breaches of 

loan seller representations extend out to March 19, 2019 

for the Fannie Mae and Ginnie Mae reverse mortgage 

servicing portfolios (unpaid principal balance of $16.7 

billion at December 31, 2011 compared to $21.7 billion 

at December 31, 2010), and March 19, 2014 for the 

Fannie Mae, Freddie Mac and Ginnie Mae mortgage 

servicing portfolios (unpaid principal balance of $38.5 

billion at December 31, 2011 compared to $45.3 billion 

at December 31, 2010). The acquirers’ rights to assert 

claims to recover losses incurred as a result of other third 

party claims (including due to pre-March 19, 2009 acts 

or omissions) and breaches of servicer representations, 

including liability with respect to the Fannie Mae, Ginnie 

Mae and Freddie Mac portfolios as well as the private 

mortgage servicing portfolio and whole loans (unpaid 

principal balance of $62.0 billion at December 31, 2011 

compared to $74.2 billion at December 31, 2010) expired 

on March 19, 2011. As of the expiration date of this claim 

period, notices relating to potential defects were received, 

but they require review to determine whether a valid defect 

exists and, if so, the identification and costing of possible 

cure actions. It is highly unlikely that all of these potential 

defects will result in losses.

As of December 31, 2011, the IndyMac receivership has 

paid $5 million in approved claims and has accrued an 

additional $2 million liability for claims asserted but 

unpaid. Alleged breaches of origination and servicing 

representations exist, and review and evaluation is in 

process for approximately $275 to $345 million in 

reasonably possible liabilities. In addition, potential losses 

relating to origination and servicing representations, 

which currently cannot be determined, may be incurred 

under other agreements with investors. 

The FDIC believes it is likely that additional losses 

will be incurred, however quantifying the contingent 

liability associated with the representations and the 

indemnification obligations is subject to a number of 

uncertainties, including (1) borrower prepayment speeds; 

(2) the occurrence of borrower defaults and resulting 

foreclosures and losses; (3) the assertion by third party 

investors of claims with respect to loans serviced for them; 

(4) the existence and timing of discovery of breaches 

and the assertion of claims for indemnification for 

losses by the acquirer; (5) the compliance by the acquirer 

with certain loss mitigation and other conditions to 

indemnification; (6) third party sources of loss recovery 

(such as title companies and insurers); (7) the ability of the 

acquirer to refute claims from investors without incurring 

reimbursable losses; and (8) the cost to cure breaches and 

respond to third party claims. Because of these and other 

uncertainties that surround the liability associated with 

indemnifications and the quantification of possible losses, 

the FDIC has determined that, while additional losses are 

probable, the amount is not estimable. 
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Purchase and Assumption Indemnification

In connection with purchase and assumption 

agreements for resolutions, the FDIC in its receivership 

capacity generally indemnifies the purchaser of a failed 

institution’s assets and liabilities in the event a third 

party asserts a claim against the purchaser unrelated to 

the explicit assets purchased or liabilities assumed at the 

time of failure. The FDIC in its corporate capacity is a 

secondary guarantor if a receivership is unable to pay. 

These indemnifications generally extend for a term of 

six years after the date of institution failure. The FDIC is 

unable to estimate the maximum potential liability for 

these types of guarantees as the agreements do not specify 

a maximum amount and any payments are dependent 

upon the outcome of future contingent events, the nature 

and likelihood of which cannot be determined at this 

time. During 2011 and 2010, the FDIC in its corporate 

capacity made no indemnification payments under such 

agreements, and no amount has been accrued in the 

accompanying financial statements with respect to these 

indemnification guarantees.

FDIC Guaranteed Debt of 

Structured Transactions

The FDIC as receiver uses three types of structured 

transactions to dispose of certain performing and nonperforming residential mortgage loans, commercial loans, 

construction loans, and mortgage-backed securities 

held by the receiverships. The three types of structured 

transactions are 1) limited liability companies (LLCs), 2) 

securitizations, and 3) structured sale of guaranteed 

notes (SSGNs). 

LLCs

Under the LLC structure, the FDIC in its receivership 

capacity contributes a pool of assets to a newly-formed 

LLC and offers for sale, through a competitive bid 

process, some of the equity in the LLC. The day-to-day 

management of the LLC is transferred to the highest 

bidder along with the purchased equity interest. In many 

instances, the FDIC in its corporate capacity guarantees 

notes issued by the LLCs. In exchange for a guarantee, 

the DIF receives a guarantee fee in either 1) a lump-sum, 

up-front payment based on the estimated duration of the 

note or 2) a monthly payment based on a fixed percentage 

multiplied by the outstanding note balance. The terms 

of these guarantee agreements generally stipulate that 

all cash flows received from the entity’s collateral be used 

to pay, in the following order, 1) operational expenses 

of the entity, 2) the FDIC’s contractual guarantee fee, 3) 

the guaranteed notes (or, if applicable, fund the related 

defeasance account for payoff of the notes at maturity), 

and 4) the equity investors. If the FDIC is required to 

perform under these guarantees, it acquires an interest 

in the cash flows of the LLC equal to the amount of 

guarantee payments made plus accrued interest thereon. 

Once all expenses have been paid, the guaranteed notes 

have been satisfied, and the FDIC has been reimbursed for 

any guarantee payments, the equity holders receive any 

remaining cash flows. 

Since 2009, private investors purchased a 40- to 50-percent 

ownership interest in the LLC structures for $1.6 billion 

in cash and the LLCs issued notes of $4.4 billion to the 

receiverships to partially fund the purchase of the assets. 

The receiverships hold the remaining 50- to 60-percent 

equity interest in the LLCs and, in most cases, the 

guaranteed notes. The FDIC in its corporate capacity 

guarantees the timely payment of principal and interest 

due on the notes. The terms of the note guarantees extend 

until the earlier of 1) payment in full of the notes or 2) 

two years following the maturity date of the notes. The 

note with the longest term matures in 2020. In the event 

of note payment default, the FDIC as guarantor is entitled 

to exercise or cause the exercise of certain rights and 

remedies including: 1) accelerating the payment of the 

unpaid principal amount of the notes; 2) selling the assets 

held as collateral; or 3) foreclosing on the equity interests 

of the debtor.
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Securitizations and SSGNs

Securitizations and SSGNs (collectively, “trusts”) are 

transactions in which certain assets or securities from 

failed institutions are pooled and transferred into a trust 

structure. The trusts issue 1) senior and/or subordinated 

debt instruments and 2) owner trust or residual 

certificates collateralized by the underlying mortgagebacked securities or loans. 

Since 2010, private investors purchased the senior 

notes issued by the trusts for $5.3 billion in cash. The 

receiverships hold 100 percent of the subordinated debt 

instruments and owner trust or residual certificates. The 

FDIC in its corporate capacity guarantees the timely 

payment of principal and interest due on the senior notes, 

the latest maturity of which is 2050. In exchange for the 

guarantee, the DIF receives a monthly payment based on 

a fixed percentage multiplied by the outstanding note 

balance. These guarantee agreements generally stipulate 

that all cash flows received from the entity’s collateral 

be used to pay, in the following order, 1) operational 

expenses of the entity, 2) the FDIC’s contractual guarantee 

fee, 3) interest on the guaranteed notes, 4) principal of the 

guaranteed notes, and 5) the holders of the subordinated 

notes and owner trust or residual certificates. If the FDIC 

is required to perform under its guarantees, it acquires an 

interest in the cash flows of the trust equal to the amount 

of guarantee payments made plus accrued interest 

thereon. Once all expenses have been paid, the guaranteed 

notes have been satisfied, and the FDIC has been 

reimbursed for any guarantee payments, the subordinated 

note holders and owner trust or residual certificates 

holders receive the remaining cash flows. 

All Structured Transactions with FDIC 

Guaranteed Debt

Through December 31, 2011, the receiverships have 

transferred a portfolio of loans with an unpaid principal 

balance of $16.4 billion and mortgage-backed securities 

with a book value of $7.7 billion to 14 LLCs and 8 

trusts. The LLCs and trusts subsequently issued notes 

guaranteed by the FDIC in an original principal amount 

of $9.7 billion. To date, the DIF has collected guarantee 

fees totaling $203 million and recorded a receivable for 

additional guarantee fees of $106 million, included in 

the “Interest receivable on investments and other assets, 

net” line item on the Balance Sheet. All guarantee fees are 

recorded as deferred revenue, included in the “Accounts 

payable and other liabilities” line item, and recognized as 

revenue primarily on a straight-line basis over the term of 

the notes. At December 31, 2011, the amount of deferred 

revenue recorded was $134 million. The DIF records no 

other structured-transaction-related assets or liabilities on 

its balance sheet.

The estimated loss to the DIF from the guarantees is 

derived from an analysis of the discounted present 

value of the expected guarantee payments by the FDIC, 

reimbursements to the FDIC for guarantee payments, and 

guarantee fee collections. Under both a base case and a 

more stressful modeling scenario, the cash flows from the 

LLC or trust assets provide sufficient coverage to fully pay 

the debts. Therefore, the estimated loss to the DIF from 

these guarantees is zero. To date, the FDIC in its corporate 

capacity has not provided, and does not intend to provide, 

any form of financial or other type of support to a trust 

or LLC that it was not previously contractually required 

to provide.

As of December 31, 2011, the maximum loss exposure 

is $3.7 billion for LLCs and $3.9 billion for trusts, 

representing the sum of all outstanding debt guaranteed 

by the FDIC in its corporate capacity. Some transactions 

have established defeasance accounts to pay off the notes 

at maturity. A total of $2.2 billion has been deposited into 

these accounts.

9. Assessments 

The Dodd-Frank Act, enacted on July 21, 2010, provides 

for significant assessment and capitalization reforms 

for the DIF. In response, the FDIC implemented several 

changes to the assessment system and developed a 

comprehensive, long-term fund management plan. The 
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88

plan is designed to restore and maintain a positive fund 

balance for the DIF even during a banking crisis and 

achieve moderate, steady assessment rates throughout any 

economic cycle. Summarized below are actions taken to 

implement assessment system changes and provisions of 

the comprehensive plan.

New Resto

In October 2010, the FDIC adopted a new Restoration 

Plan to ensure that the ratio of the DIF fund balance to 

estimated insured deposits (reserve ratio) reaches 1.35 

percent by September 30, 2020. The new Plan provides 

for the following: 1) the period of the Restoration Plan 

is extended from the end of 2016 to September 30, 2020; 

2) institutions may continue to use assessment credits 

without additional restriction during the term of the 

Restoration Plan; 3) the FDIC will pursue rulemaking 

regarding the method that will be used to offset the effect 

on small institutions (less than $10 billion in assets) 

of requiring that the reserve ratio reach 1.35 percent 

by September 30, 2020, rather than 1.15 percent by the 

end of 2016; and 4) at least semiannually, the FDIC will 

update its loss and income projections for the fund and, 

if needed, increase or decrease assessment rates, following 

notice-and-comment rulemaking, if required.

Designated R

In December 2011, the FDIC adopted a final rule 

maintaining the designated reserve ratio (DRR) at 2 

percent, effective January 1, 2012. The FDIC views the 2 

percent DRR as maintaining the DIF at a level that can 

withstand substantial losses, consistent with the FDIC’s 

comprehensive, long-term fund management plan.

Calculatio

In February 2011, the FDIC adopted a final rule, 

effective on April 1, 2011, amending part 327 of title 12 

of the Code of Federal Regulations to 1) redefine the 

assessment base used for calculating deposit insurance 

assessments from adjusted domestic deposits to average 

consolidated total assets minus average tangible equity 

(measured as Tier 1 capital); 2) change the assessment 

rate adjustments; 3) lower the initial base rate schedule 

and the total base rate schedule for all IDIs to collect 

approximately the same revenue for the DIF as would 

have been collected under the old assessment base; 4) 

suspend dividends indefinitely, and, in lieu of dividends, 

adopt lower assessment rate schedules when the reserve 

ratio reaches 1.15 percent, 2 percent, and 2.5 percent; and 

5) change the risk-based assessment system for large IDIs 

(generally, those institutions with at least $10 billion in 

total assets). Specifically, the final rule eliminates risk 

categories and the use of long-term debt issuer ratings 

for large institutions and combines CAMELS ratings 

and certain forward-looking financial measures into two 

scorecards: one for most large institutions and another for 

large institutions that are structurally and operationally 

complex or that pose unique challenges and risks in case 

of failure (highly complex institutions).

Assessment

Annual assessment rates averaged approximately 

17.6 cents per $100 and 17.7 cents per $100 of the 

assessment base for the first quarter of 2011 and all 

of 2010, respectively. Beginning in the second quarter 

of 2011, the assessment base changed to average total 

consolidated assets less average tangible equity (with 

certain adjustments for banker’s banks and custodial 

banks), as required by the Dodd-Frank Act. The FDIC 

implemented a new assessment rate schedule at the same 

time to conform to the larger assessment base. The annual 

assessment rate averaged approximately 11.1 cents per 

$100 of the assessment base for the last three quarters 

of 2011.

In December 2009, a majority of IDIs prepaid $45.7 billion 

of estimated quarterly risk-based assessments to address 

the DIF’s liquidity need to pay for projected near-term 

failures and to ensure that the deposit insurance system 

remained industry-funded. The prepaid assessments 

cover the insurance period from October 2009 through 
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financials

December 2012. An institution’s quarterly risk-based 

deposit insurance assessment thereafter is offset by the 

amount prepaid until the amount is exhausted or until 

June 30, 2013, when any amount remaining is to be 

returned to the institution. At December 31, 2011, the 

remaining prepaid amount of $17.4 billion is included in 

the “Unearned revenue - prepaid assessments” line item on 

the Balance Sheet.

Prepaid assessments were mandatory for all institutions, 

but the FDIC exercised its discretion as supervisor and 

insurer to exempt an institution from the prepayment 

requirement if the FDIC determined that the prepayment 

would adversely affect the safety and soundness of 

the institution.

Reserve

As of December 31, 2011, the DIF reserve ratio was 0.17 

percent of estimated insured deposits.

Assessments Rel

Assessments continue to be levied on institutions for 

payments of the interest on obligations issued by the 

Financing Corporation (FICO). The FICO was established 

as a mixed-ownership government corporation to 

function solely as a financing vehicle for the former FSLIC. 

The annual FICO interest obligation of approximately 

$790 million is paid on a pro rata basis using the same 

rate for banks and thrifts. The FICO assessment has no 

financial impact on the DIF and is separate from deposit 

insurance assessments. The FDIC, as administrator of the 

DIF, acts solely as a collection agent for the FICO. During 

2011 and 2010, approximately $795 million and $796 

million, respectively, was collected and remitted to 

the FICO.

10. Other Revenue

Other Revenue for the Years Ended Decembe

Dolars

2011 2010

Temporary Liquidity 

Guarantee Program 

revenue (Note 16) $2,569,579 $0

Dividends and 

interest on 

Citigroup trust 

preferred securities 178,000 177,675 

Guarantee fees 

for structured 

transactions 92,229 44,557 

Other 7,121 15,193 

Total $2,846,929 $237,425

Temporary Liquidi

Program R

Pursuant to a systemic risk determination in October 

2008, the FDIC established the TLGP (see Note 16). In 

exchange for guarantees issued under the TLGP, the 

FDIC received fees that were set aside, as deferred revenue, 

for potential TLGP losses. As losses occur, the FDIC 

recognizes the loss as a systemic risk expense and offsets 

the loss by recognizing an equivalent portion of the 

deferred revenue as systemic risk revenue. This accounting 

practice isolates systemic risk activities from the normal 

operating activities of the DIF.

From inception of the TLGP, it has been FDIC’s policy 

to recognize revenue to the DIF for any deferred revenue 

not absorbed by losses upon expiration of the TLGP 

guarantee period (December 31, 2012) or earlier for any 

portion of guarantee fees determined in excess of amounts 

needed to cover potential losses. During 2011, the DIF 

recognized revenue of $2.6 billion for fees held as deferred 

revenue (see Note 16). In the unforeseen event a debt 

default occurs greater than the remaining amount held 

as deferred revenue, to the extent needed, any amount 
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90

previously recognized as revenue to the DIF will be 

returned to the TLGP.

11. Operating Expenses

Operating expenses were $1.6 billion for both 2011 and 

2010. The chart below lists the major components of 

operating expenses.

Operating Expenses for the Years En

December 3

Dolars

2011 2010

Salaries and benefits $1,320,991 $1,184,523 

Outside services 342,502 360,880 

Travel 115,135 111,110 

Buildings and 

leased space 93,630 85,137 

Software/Hardware 

maintenance 58,981 50,575 

Depreciation 

of property and 

equipment 77,720 68,790 

Other 46,652 35,142 

Subtotal 2,055,611 1,896,157 

Services billed to 

resolution entities (430,260) (303,516)

Total $1,625,351 $1,592,641

12. Provision for Insurance Losse

Provision for insurance losses was negative $4.4 billion 

for 2011, compared to negative $848 million for 2010. 

The negative provision for 2011 primarily resulted from 

a reduction in the contingent loss reserve due to the 

improvement in the financial condition of institutions 

that were previously identified to fail and a reduction 

in the estimated losses for institutions that have failed 

in prior years. The following chart lists the major 

components of the provision for insurance losses.

Provision for Insurance Losses for the Year

Ended December 

Dolars

2011 2010

Valuation Adjustments

Closed banks 

and thrifts $6,786,643 $25,483,252 

Other assets (1,024) (4,406)

Total Valuation 

Adjustments 6,785,619 25,478,846 

Contingent Liabilities Adjustments

Anticipated failure of 

insured institutions (11,176,248) (26,326,689)

Litigation (23,000) 0 

Total Contingent 

Liabilities Adjustments (11,199,248) (26,326,689)

Total $(4,413,629) $(847,843)
2011

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13. Employee Benefit

Pension Bene

Eligible FDIC employees (permanent and term employees 

with appointments exceeding one year) are covered by 

the federal government retirement plans, either the 

Civil Service Retirement System (CSRS) or the Federal 

Employees Retirement System (FERS). Although the 

DIF contributes a portion of pension benefits for eligible 

employees, it does not account for the assets of either 

retirement system. The DIF also does not have actuarial 

data for accumulated plan benefits or the unfunded 

liability relative to eligible employees. These amounts 

are reported on and accounted for by the U.S. Office of 

Personnel Management (OPM).

Eligible FDIC employees also may participate in a FDICsponsored tax-deferred 401(k) savings plan with matching 

contributions up to 5 percent. Under the Federal Thrift 

Savings Plan (TSP), the FDIC provides FERS employees 

with an automatic contribution of 1 percent of pay and an 

additional matching contribution up to 4 percent of pay. 

CSRS employees also can contribute to the TSP, but they 

do not receive agency matching contributions.

Pension Benefits and Savings Plans Expenses f

the Years Ended December

Dolars

2011 2010

Civil Service 

Retirement System $6,140 $6,387 

Federal Employees 

Retirement System 

(Basic Benefit) 95,846 78,666 

FDIC Savings Plan 36,645 30,825 

Federal Thrift 

Savings Plan 33,910 28,679 

Total $172,541 $144,557

Postretirem

Than

The DIF has no postretirement health insurance liability 

since all eligible retirees are covered by the Federal 

Employees Health Benefits (FEHB) program. The FEHB is 

administered and accounted for by the OPM. In addition, 

OPM pays the employer share of the retiree’s health 

insurance premiums.

The FDIC provides certain life and dental insurance 

coverage for its eligible retirees, the retirees’ beneficiaries, 

and covered dependents. Retirees eligible for life and 

dental insurance coverage are those who have qualified 

due to 1) immediate enrollment upon appointment or 

five years of participation in the plan and 2) eligibility 

for an immediate annuity. The life insurance program 

provides basic coverage at no cost to retirees and allows 

converting optional coverage to direct-pay plans. For the 

dental coverage, retirees are responsible for a portion of 

the dental premium.

The FDIC has elected not to fund the postretirement 

life and dental benefit liabilities. As a result, the DIF 

recognized the underfunded status (the difference 

between the accumulated postretirement benefit 

obligation and the plan assets at fair value) as a liability. 

Since there are no plan assets, the plan’s benefit liability 

is equal to the accumulated postretirement benefit 

obligation. At December 31, 2011 and 2010, the liability 

was $188 million and $166 million, respectively, which is 

recognized in the “Postretirement benefit liability” line 

item on the Balance Sheet. The cumulative actuarial losses 

(changes in assumptions and plan experience) and prior 

service costs (changes to plan provisions that increase 

benefits) were $34 million and $19 million at December 

31, 2011 and 2010, respectively. These amounts are 

reported as accumulated other comprehensive income in 

the “Unrealized postretirement benefit loss” line item on 

the Balance Sheet. 
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The DIF’s expenses for postretirement benefits for 2011 

and 2010 were $12 million and $9 million, respectively, 

which are included in the current and prior year’s 

operating expenses on the Statement of Income and Fund 

Balance. The changes in the actuarial losses and prior 

service costs for 2011 and 2010 of $15 million and $16 

million, respectively, are reported as other comprehensive 

income in the “Unrealized postretirement benefit 

loss” line item. Key actuarial assumptions used in the 

accounting for the plan include the discount rate of 4.5 

percent, the rate of compensation increase of 4.1 percent, 

and the dental coverage trend rate of 6.0 percent. 

The discount rate of 4.5 percent is based upon rates of 

return on high-quality fixed income investments whose 

cash flows match the timing and amount of expected 

benefit payments. 

14. Commitments an

Off-Balance-Sheet Exposu

Commitm

Leased Space

The FDIC’s lease commitments total $199 million for 

future years. The lease agreements contain escalation 

clauses resulting in adjustments, usually on an annual 

basis. The DIF recognized leased space expense of $56 

million and $45 million for the years ended December 31, 

2011 and 2010, respectively.

Leased Space Commitments

Dolars

2012 2013 2014 2015 2016

2017/

Ther

$52,773 $44,950 $32,294 $25,807 $22,679 $20,918 

Off-Balance-Sh

Deposit Insurance

As of December 31, 2011, estimated insured deposits 

for the DIF were $7.0 trillion. This estimate is derived 

primarily from quarterly financial data submitted by IDIs 

to the FDIC. This estimate represents the accounting 

loss that would be realized if all IDIs were to fail and the 

acquired assets provided no recoveries. Included in this 

estimate was approximately $1.4 trillion of noninterestbearing transaction deposits that exceeded the basic 

coverage limit of $250,000 per account, which received 

coverage under the Dodd-Frank Act beginning on 

December 31, 2010 to the end of 2012.
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financials

15. Disclosures About the Fair Value of

Financial Instrumen

Financial assets recognized and measured at fair value 

on a recurring basis at each reporting date include cash 

equivalents (Note 2), the investment in U.S. Treasury 

obligations (Note 3) and trust preferred securities (Note 

5). The following tables present the DIF’s financial assets 

measured at fair value as of December 31, 2011 and 2010.

Assets Measured at Fair Value at December 31, 20

Dolars

Fair Value Measurements Using

Quoted

in A

Mark

Identi

(Level 

Si

Other

Inp

(Level 

Si

Unob

Inp

 (Level 

Total

at Fai

Assets

Cash equivalents1 $3,266,631 $3,266,631

Available-for-Sale Debt Securities

Investment in U.S. 

Treasury obligations2 33,863,245 33,863,245 

Trust preferred securities $2,213,231 2,213,231

Trust preferred securities held for 

UST (Note 16) 795,769 795,769

Total Assets $37,129,876 $3,009,000 $0 $40,138,876 

(1) Cash equivalents are Special U.S. Treasury Certificates with overnight maturities valued at prevailing interest rates established by the U.S. Bureau 

of Public Debt.

(2) The investment in U.S. Treasury obligations is measured based on prevailing market yields for federal government entities.
Financia 

94

In exchange for prior shared-loss guarantee coverage 

provided to Citigroup, the FDIC and the Treasury received 

TruPs (see Note 5). At December 31, 2011, the fair value 

of the securities in the amount of $3.009 billion was 

classified as a Level 2 measurement based on an FDICdeveloped model using observable market data for traded 

Citigroup securities to determine the expected present 

value of future cash flows. Key inputs include market 

yields on U.S. dollar interest rate swaps and discount 

rates for default, call, and liquidity risks that are derived 

from traded Citigroup securities and modeled 

pricing relationships. 

(1) Cash equivalents are Special U.S. Treasury Certificates with overnight maturities valued at prevailing interest rates established by the U.S. Bureau 

of Public Debt.

(2) The investment in U.S. Treasury obligations is measured based on prevailing market yields for federal government entities.

Assets Measured at Fair Value at December 31, 20

Dolars

Fair Value Measurements Using

Quoted

in A

Mark

Identi

(Level 

Si

Other

Inp

(Level 

Si

Unob

Inp

 (Level 

Total

at Fai

Assets

Cash equivalents1 $27,083,918 $27,083,918

Available-for-Sale Debt Securities

Investment in U.S. 

Treasury obligations2 12,371,268 12,371,268

Trust preferred securities $2,297,818 2,297,818

Trust preferred securities held for 

UST (Note 16) 826,182 826,182

Total Assets $39,455,186 $3,124,000 $0 $42,579,186 
2011

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financials

Some of the DIF’s financial assets and liabilities are not 

recognized at fair value but are recorded at amounts that 

approximate fair value due to their short maturities and/

or comparability with current interest rates. Such items 

include interest receivable on investments, assessments 

receivable, other short-term receivables, accounts payable, 

and other liabilities. 

The net receivables from resolutions primarily include 

the DIF’s subrogated claim arising from obligations to 

insured depositors. The resolution entity assets that will 

ultimately be used to pay the corporate subrogated claim 

are valued using discount rates that include consideration 

of market risk. These discounts ultimately affect the DIF’s 

allowance for loss against the receivables from resolutions. 

Therefore, the corporate subrogated claim indirectly 

includes the effect of discounting and should not be 

viewed as being stated in terms of nominal cash flows.

Although the value of the corporate subrogated claim is 

influenced by valuation of resolution entity assets (see 

Note 4), such valuation is not equivalent to the valuation 

of the corporate claim. Since the corporate claim is 

unique, not intended for sale to the private sector, and has 

no established market, it is not practicable to estimate a 

fair value.

The FDIC believes that a sale to the private sector of 

the corporate claim would require indeterminate, but 

substantial, discounts for an interested party to profit 

from these assets because of credit and other risks. In 

addition, the timing of resolution entity payments to 

the DIF on the subrogated claim does not necessarily 

correspond with the timing of collections on resolution 

entity assets. Therefore, the effect of discounting used 

by resolution entities should not necessarily be viewed as 

producing an estimate of fair value for the net receivables 

from resolutions.

There is no readily available market for guarantees 

associated with systemic risk (see Note 16).

16. Systemic Risk Transaction

Pursuant to a systemic risk determination, the FDIC 

established the TLGP for IDIs, designated affiliates and 

certain holding companies on October 14, 2008, in an 

effort to counter the system-wide crisis in the nation’s 

financial sector. The program is codified in part 370 of 

title 12 of the Code of Federal Regulations.

The FDIC received fees in exchange for guarantees issued 

under the TLGP and set aside, as deferred revenue, all fees 

for potential TLGP losses. At inception of the guarantees, 

the DIF recognized a liability for the non-contingent fair 

value of the obligation the FDIC assumed over the term 

of the guarantees. In accordance with FASB ASC 460, 

Guarantees, this non-contingent liability was measured 

at the amount of consideration received in exchange 

for issuing the guarantee. As systemic risk expenses 

are incurred, the DIF will reduce deferred revenue and 

recognize an offsetting amount as systemic risk revenue. 

Not later than the end of the guarantee period (December 

31, 2012), any deferred revenue not absorbed by losses 

during the guarantee period will be recognized as revenue 

to the DIF.

At its inception, the TLGP consisted of two components: 

1) the Transaction Account Guarantee Program (TAG) 

and 2) the Debt Guarantee Program (DGP). The TAG 

provided unlimited coverage for noninterest-bearing 

transaction accounts held by IDIs on all deposit amounts 

exceeding the fully insured limit of $250,000 through 

December 31, 2010. During its existence, the FDIC 

collected TAG fees of $1.2 billion. Total subrogated claims 

arising from obligations to depositors with noninterestbearing transaction accounts were $8.8 billion, with 

estimated losses of $2.2 billion.

The DGP permitted participating entities to issue FDICguaranteed senior unsecured debt through October 31, 

2009. The FDIC’s guarantee for all such debt expires 

on the earliest of the conversion date for mandatory 

convertible debt, the stated date of maturity, or December 

31, 2012. Through the end of the debt issuance period, 
Financia 

96

the DIF collected $8.3 billion of guarantee fees and fees 

of $1.2 billion from participating entities that elected to 

issue senior unsecured non-guaranteed debt. The fees 

are included in the “Cash and investments - restricted 

- systemic risk” line item and recognized as “Deferred 

revenue - systemic risk” on the Balance Sheet. 

Additionally, the FDIC holds $800 million (liquidation 

amount) of Citigroup TruPs on behalf of the Treasury 

(and any related interest) as security in the event payments 

are required to be made by the DIF for guaranteed debt 

instruments issued by Citigroup or any of its affiliates 

under the TLGP (see Note 5). At December 31, 2011, the 

fair value of these securities totaled $796 million, and was 

determined using the valuation methodology described in 

Note 15 for other Citigroup TruPs held by the DIF. There 

is an offsetting liability in the “Deferred revenue -systemic 

risk” line item, representing amounts to be transferred 

to the Treasury or, if necessary, paid for guaranteed debt 

instruments issued by Citigroup or its affiliates under 

the TLGP. Consequently, there is no impact on the fund 

balance of the DIF. 

The FDIC’s payment obligation under the DGP is triggered 

by a payment default. In the event of default, the FDIC 

will continue to make scheduled principal and interest 

payments under the terms of the debt instrument through 

its maturity, or in the case of mandatory convertible debt, 

through the mandatory conversion date. The debtholder 

or representative must assign to the FDIC the right to 

receive any and all distributions on the guaranteed debt 

from any insolvency proceeding, including the proceeds 

of any receivership or bankruptcy estate, to the extent of 

payments made under the guarantee. 

Since inception of the program, $618.0 billion in total 

guaranteed debt has been issued. Through December 

31, 2011, the FDIC has paid $35 million in claims for 

principal and/or interest arising from the default of 

guaranteed debt obligations of six debt issuers. Fiftynine financial entities (33 IDIs and 26 affiliates and 

holding companies) had $167.4 billion in guaranteed 

debt outstanding at December 31, 2011. This compares 

to $267.1 billion in guaranteed debt outstanding at 

December 31, 2010. Reported outstanding debt is derived 

from data submitted by debt issuers. 

At December 31, 2011, the DIF recognized a liability of 

$117 million for debt guarantee obligations that were 

paid in early 2012 as scheduled under the terms of the 

debt instruments. This liability is presented in the “Debt 

Guarantee Program liabilities – systemic risk” line item. 

The DIF has also recorded a contingent liability of $2 

million in the “Contingent liability for systemic risk” line 

item for probable additional guaranteed debt obligations. 

The FDIC believes that it is also reasonably possible that 

additional estimated losses of approximately $93 million 

could be incurred under the DGP. 

The DIF may recognize revenue before the end of the 

guarantee period for the portion of guarantee fees that 

was determined to exceed amounts needed to cover 

potential losses. During 2011, the DIF recognized revenue 

of $2.6 billion for a portion of DGP guarantee fees 

previously held as systemic risk deferred revenue (see Note 

10). The $2.6 billion relates to fees on debt guarantees that 

have expired. In addition, the DIF transferred an equal 

amount of “Cash and investments - restricted - systemic 

risk” to the DIF’s cash and investments. In the unforeseen 

event a debt default occurs greater than the remaining 

amount held as deferred revenue, to the extent needed, 

any amount previously recognized as revenue to the DIF 

will be returned to the TLGP.

Because of uncertainties surrounding the outlook for the 

economy and financial markets, there remains a possibility 

that the TLGP could incur a loss that would absorb some 

or all of the remaining guarantee fees. Therefore, it is 

appropriate to continue the practice of deferring revenue 

recognition for the remaining $5.7 billion of “Deferred 

revenue - systemic risk” (which excludes the liability of 

$925 million to Treasury for the fair value and related 

interest of the Citigroup TruPs). 
2011

A N N U A L R E P O R T

financials

Systemic Risk Activity at December 31, 201

Dolars

Cash

inv

- restri

system

Rece

and 

asse

syste

Defer

revenue

syste

Debt G

Prog

liab

syste

Cont

liab

syste

Revenu

Expense

syste

Balance at 01-01-11 $6,646,968 $2,269,422 $(9,054,541) $(29,334) $(119,993)

TAG fees collected 41,419 (50,235) 8,816 

DGP assessments collected 3 (3)

Receivable for TAG fees

Receivable for TAG 

accounts at failed 

institutions (424,628)

Dividends and overnight 

interest on TruPs held 

for UST 64,029 (64,029)

Fair value adjustment on 

TruPs held for UST (30,413) 30,413

Estimated losses for 

TAG accounts at failed 

institutions 119,976 (119,976) $(119,976)

Realized losses not yet paid 117,027 (87,693) 87,693 

Provision for DGP losses (147,111) 117,777 (117,777)

Guaranteed debt 

obligations paid (27,433) 27,433 27,433 

Transfer of excess TLGP 

funds to the DIF (2,569,579) 2,569,579

U.S. investment 

interest collected 66,640 (66,640)

Interest receivable on U.S. 

Treasury obligations 55,880 (55,880)

Amortization of U.S. 

Treasury obligations (71,262) 71,262

Accrued interest purchased (43,983) 43,983

Unrealized gain on U.S. 

Treasury obligations 439 (439)

TLGP operating expenses 152 (8,514)

Receipts of 

receivership's dividends 728,227

Totals $4,827,319 $1,948,151 $(6,639,954) $(117,027) $(2,216) $(131,141)

(1) As of December 31, 2011, the fair value of investments in U.S. Treasury obligations held by TLGP was $3.1 billion. An unrealized gain of $439 thousand is 

reported in the “Deferred revenue - systemic risk” line item. 97
Financia 

98

17. Subsequent Event

Subsequent events have been evaluated through 

April 11, 2012, the date the financial statements are 

available to be issued.

2012 Failures through Apr

Through April 11, 2012, 16 insured institutions 

failed in 2012 with total losses to the DIF estimated to 

be $1.3 billion. 
2011

A N N U A L R E P O R T

99

financials

FSLIC eso

Federal Deposit Insurance Corporatio

FSLIC Resolution Fund Balance Sheet at December 3

Dolars

2011 2010

Assets

Cash and cash equivalents $3,533,410 $3,547,907

Receivables from thrift resolutions and other 

assets, net (Note 3) 65,163 23,408 

Receivables from U.S. Treasury for goodwill 

litigation (Note 4) 356,455 323,495 

Total Assets $3,955,028 $3,894,810 

Liabilities

Accounts payable and other liabilities $3,544 $2,990 

Contingent liabilities for goodwill 

litigation (Note 4) 356,455 323,495 

Total Liabilities 359,999 326,485 

Resolution Equity (Note 5)

Contributed capital 127,875,656 127,792,696 

Accumulated deficit (124,280,627) (124,224,371)

Total Resolution Equity 3,595,029 3,568,325

Total Liabilities and Resolution Equity $3,955,028 $3,894,810

The accompanying notes are an integral part of these financial statements.
Financia 

100

Federal Deposit Insurance Corporatio

FSLIC Resolution Fund Statement of Income and Accumulated Deficit for the Years Ended Decembe

Dolars

2011 2010

Revenue

 Interest on U.S. Treasury obligations $1,361 $3,876 

 Other revenue 3,257 9,393 

Total Revenue 4,618 13,269 

Expenses and Losses

 Operating expenses 4,660 3,832 

 Provision for losses (8,578) (945)

 Goodwill litigation expenses (Note 4) 82,960 (53,266)

 Recovery of tax benefits (18,373) (63,256)

 Other expenses 205 3,070 

Total Expenses and Losses 60,874 (110,565

Net (Loss) Income (56,256) 123,834 

Accumulated Deficit - Beginning (124,224,371) (124,348,205

Accumulated Deficit - Ending $(124,280,627) $(124,224,37

The accompanying notes are an integral part of these financial statements.

FSLIC esol
2011

A N N U A L R E P O R T

101

financials

FSLIC esol

Federal Deposit Insurance Corporatio

FSLIC Resolution Fund Statement of Cash Flows for the Years Ended December

Dolars

2011 2010

Operating Activities

Net (Loss) Income $(56,256) $123,834 

Adjustments to reconcile net income (loss) to net cash (used) provided by operating activities:

Provision for losses (8,578) (945)

 Change in Operating Assets and Liabilities: 

(Increase) Decrease in receivables from thrift 

resolutions and other assets (33,177) 9,875 

Increase in accounts payable and other liabilities 554 18 

Increase (Decrease) in contingent liabilities for 

goodwill litigation 32,960 (81,917)

Net Cash (Used) Provided by Operating Activities (64,497) 50,8

Financing Activities

 Provided by:

U.S. Treasury payments for goodwill 

litigation (Note 4) 50,000 26,917 

Net Cash Provided by Financing Activities 50,000 26,917

Net (Decrease) Increase in Cash and

Cash Equivalents (14,497) 77,782

Cash and Cash Equivalents - Beginning 3,547,907 3,470,125

Cash and Cash Equivalents - Ending $3,533,410 $3,547,90

The accompanying notes are an integral part of these financial statements.
Financia 

102

Nots to the

FSLIC 

December 31, 2011 and 2010 

1. Legislative History and Operations/Dissolution

of the FSLIC Resolution

Legislat

The Federal Deposit Insurance Corporation (FDIC) 

is the independent deposit insurance agency created 

by Congress in 1933 to maintain stability and public 

confidence in the nation’s banking system. Provisions that 

govern the operations of the FDIC are generally found 

in the Federal Deposit Insurance (FDI) Act, as amended 

(12 U.S.C. 1811, et seq). In carrying out the purposes of 

the FDI Act, the FDIC, as administrator of the Deposit 

Insurance Fund (DIF), insures the deposits of banks and 

savings associations (insured depository institutions). 

In cooperation with other federal and state agencies, 

the FDIC promotes the safety and soundness of insured 

depository institutions by identifying, monitoring and 

addressing risks to the DIF. Commercial banks, savings 

banks and savings associations (known as “thrifts”) 

are supervised by either the FDIC, the Office of the 

Comptroller of the Currency, or the Federal Reserve 

Board. In addition, the FDIC, through administration 

of the FSLIC Resolution Fund (FRF), is responsible 

for the sale of remaining assets and satisfaction of 

liabilities associated with the former Federal Savings and 

Loan Insurance Corporation (FSLIC) and the former 

Resolution Trust Corporation (RTC). The DIF and the 

FRF are maintained separately by the FDIC to support 

their respective mandates.

The U.S. Congress created the FSLIC through the 

enactment of the National Housing Act of 1934. The 

Financial Institutions Reform, Recovery, and Enforcement 

Act of 1989 (FIRREA) abolished the insolvent FSLIC, 

created the FRF, and transferred the assets and liabilities 

of the FSLIC to the FRF-except those assets and liabilities 

transferred to the RTC-effective on August 9, 1989. 

Further, the FIRREA established the Resolution Funding 

Corporation (REFCORP) to provide part of the initial 

funds used by the RTC for thrift resolutions.

The RTC Completion Act of 1993 (RTC Completion 

Act) terminated the RTC as of December 31, 1995. 

All remaining assets and liabilities of the RTC were 

transferred to the FRF on January 1, 1996. Today, the 

FRF consists of two distinct pools of assets and liabilities: 

one composed of the assets and liabilities of the FSLIC 

transferred to the FRF upon the dissolution of the FSLIC 

(FRF-FSLIC), and the other composed of the RTC assets 

and liabilities (FRF-RTC). The assets of one pool are not 

available to satisfy obligations of the other.

Operations/Diss

The FRF will continue operations until all of its assets 

are sold or otherwise liquidated and all of its liabilities 

are satisfied. Any funds remaining in the FRF-FSLIC will 

be paid to the U.S. Treasury. Any remaining funds of the 

FRF-RTC will be distributed to the REFCORP to pay 

the interest on the REFCORP bonds. In addition, the 

FRF-FSLIC has available until expended $602 million in 

appropriations to facilitate, if required, efforts to wind up 

the resolution activity of the FRF-FSLIC. 

The FDIC has conducted an extensive review and 

cataloging of FRF’s remaining assets and liabilities. 

Some of the issues and items that remain open in FRF 

are 1) criminal restitution orders (generally have from 

1 to 12 years remaining to enforce); 2) collections of 

settlements and judgments obtained against officers 

and directors and other professionals responsible for 
2011

A N N U A L R E P O R T

103

financials

causing or contributing to thrift losses (generally have 

from 2 months to 7 years remaining to enforce, unless the 

judgments are renewed, which will result in significantly 

longer periods for collection for some judgments); 3) a few 

assistance agreements entered into by the former FSLIC 

(FRF could continue to receive or refund overpayments of 

tax benefits sharing through 2014); 4) goodwill litigation 

(no final date for resolution has been established; see 

Note 4); and 5) affordable housing program monitoring 

(requirements can exceed 25 years). The FRF could 

potentially realize recoveries from tax benefits sharing of 

up to approximately $36 million; however, any associated 

recoveries are not reflected in FRF’s financial statements 

given the significant uncertainties surrounding the 

ultimate outcome.

Receivers

The FDIC is responsible for managing and disposing of 

the assets of failed institutions in an orderly and efficient 

manner. The assets held by receivership entities, and the 

claims against them, are accounted for separately from 

FRF assets and liabilities to ensure that receivership 

proceeds are distributed in accordance with applicable 

laws and regulations. Also, the income and expenses 

attributable to receiverships are accounted for as 

transactions of those receiverships. Receiverships are billed 

by the FDIC for services provided on their behalf.

2. Summary of Significant Accounting Polic

Ge

These financial statements pertain to the financial 

position, results of operations, and cash flows of the 

FRF and are presented in accordance with U.S. generally 

accepted accounting principles (GAAP). As permitted 

by the Federal Accounting Standards Advisory Board’s 

Statement of Federal Financial Accounting Standards 

34, The Hierarchy of Generally Accepted Accounting Principles, 

Including the Application of Standards Issued by the Financial 

Accounting Standards Board, the FDIC prepares financial 

statements in conformity with standards promulgated 

by the Financial Accounting Standards Board (FASB). 

These statements do not include reporting for assets and 

liabilities of receivership entities because these entities 

are legally separate and distinct, and the FRF does not 

have any ownership interests in them. Periodic and 

final accountability reports of receivership entities are 

furnished to courts, supervisory authorities, and others 

upon request.

Use of

Management makes estimates and assumptions that 

affect the amounts reported in the financial statements 

and accompanying notes. Actual results could differ 

from these estimates. Where it is reasonably possible that 

changes in estimates will cause a material change in the 

financial statements in the near term, the nature and 

extent of such changes in estimates have been disclosed. 

The more significant estimates include the allowance 

for losses on receivables from thrift resolutions and the 

estimated losses for litigation.

Cash 

Cash equivalents are short-term, highly liquid investments 

consisting primarily of U.S. Treasury Overnight 

Certificates.

Provisio

The provision for losses represents the change in the 

estimation of the allowance for losses related to the 

receivables from thrift resolutions and other assets.

Relate

The nature of related parties and a description of related 

party transactions are discussed in Note 1 and disclosed 

throughout the financial statements and footnotes.
Financia 

104

Disclosure abo

Accounting 

Recent accounting pronouncements have been deemed to 

be not applicable or material to the financial statements as 

presented.

3. Receivables From Thrift Resolutions and Other

Assets, Net

Receivables From

The receivables from thrift resolutions include payments 

made by the FRF to cover obligations to insured 

depositors, advances to receiverships for working 

capital, and administrative expenses paid on behalf of 

receiverships. Any related allowance for loss represents the 

difference between the funds advanced and/or obligations 

incurred and the expected repayment. Assets held by the 

FDIC in its receivership capacity for the former RTC are 

a significant source of repayment of the FRF’s receivables 

from thrift resolutions. As of December 31, 2011, five 

of the 850 FRF receiverships remain active until their 

goodwill litigation or liability-related impediments are 

resolved. During 2011, the receivables from closed thrifts 

and related allowance for losses decreased by $4.0 billion 

due to three receiverships that were terminated during 

the year. 

The FRF receiverships held assets with a book value of 

$15 million and $18 million as of December 31, 2011 

and 2010, respectively (which primarily consist of cash, 

investments, and miscellaneous receivables). At December 

31, 2011, $12 million of the $15 million in assets in the 

FRF receiverships was cash held for non-FRF, third 

party creditors. 

Othe

Other assets include credit enhancement reserves valued 

at $14 million and $17 million as of December 31, 2011 

and 2010, respectively. The credit enhancement reserves 

resulted from swap transactions where the former RTC 

received mortgage-backed securities in exchange for 

single-family mortgage loans. The RTC supplied credit 

enhancement reserves for the mortgage loans in the form 

of cash collateral to cover future credit losses over the 

remaining life of the loans. These cash reserves, which 

may cover future credit losses through 2020, are valued by 

estimating credit losses on the underlying loan portfolio 

and then discounting cash flow projections using marketbased rates.

Most of the remaining amount in other assets is a 

receivable of $44 million for recoveries from tax benefit 

sharing as of December 31, 2011. Recoveries from tax 

benefit sharing represents receipts based on the realization 

of tax savings from entities that either entered into 

assistance agreements with the former FSLIC, or have 

subsequently purchased financial institutions that had 

prior agreements with the FSLIC. In 2011, the FRF 

refunded $26 million in tax benefit sharing recoveries that 

were received in a prior year.

Receivables From Thrift Resolutions and Other

Assets, Net at December 3

Dolars

2011 2010

Receivables from 

closed thrifts $1,800,417 $5,763,949 

Allowance for losses (1,797,154) (5,762,186)

Receivables from Thrift 

Resolutions, Net 3,263 1,763 

Other assets 61,900 21,645 

Total $65,163 $23,408
2011

A N N U A L R E P O R T

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financials

4. Contingent Liabilities fo

Goodwill

In United States v. Winstar Corp., 518 U.S. 839 (1996), the 

Supreme Court held that when it became impossible 

following the enactment of FIRREA in 1989 for the federal 

government to perform certain agreements to count 

goodwill toward regulatory capital, the plaintiffs were 

entitled to recover damages from the United States. 

On July 22, 1998, the Department of Justice’s (DOJ’s) 

Office of Legal Counsel (OLC) concluded that the FRF is 

legally available to satisfy all judgments and settlements 

in the goodwill litigation involving supervisory action 

or assistance agreements. OLC determined that 

nonperformance of these agreements was a contingent 

liability that was transferred to the FRF on August 9, 1989, 

upon the dissolution of the FSLIC. On July 23, 1998, the 

U.S. Treasury determined, based on OLC’s opinion, that 

the FRF is the appropriate source of funds for payments 

of any such judgments and settlements. The FDIC 

General Counsel concluded that, as liabilities transferred 

on August 9, 1989, these contingent liabilities for future 

nonperformance of prior agreements with respect to 

supervisory goodwill were transferred to the FRF-FSLIC, 

which is that portion of the FRF encompassing the 

obligations of the former FSLIC. The FRF-RTC, which 

encompasses the obligations of the former RTC and was 

created upon the termination of the RTC on December 31, 

1995, is not available to pay any settlements or judgments 

arising out of the goodwill litigation. 

The FRF can draw from an appropriation provided by 

Section 110 of the Department of Justice Appropriations 

Act, 2000 (Public Law 106-113, Appendix A, Title I, 

113 Stat. 1501A-3, 1501A-20) such sums as may be 

necessary for the payment of judgments and compromise 

settlements in the goodwill litigation. This appropriation 

is to remain available until expended. Because an 

appropriation is available to pay such judgments and 

settlements, any estimated liability for goodwill litigation 

should have a corresponding receivable from the U.S. 

Treasury and therefore have no net impact on the financial 

condition of the FRF-FSLIC. 

For the year ended December 31, 2011, the FRF paid $50 

million as a result of a settlement in one goodwill case 

compared to $27 million for four goodwill cases in 2010. 

The FRF received appropriations from the U.S. Treasury 

to fund these payments.

As of December 31, 2011, five remaining cases are pending 

against the United States based on alleged breaches 

of the agreements stated above. Of the five remaining 

cases, a contingent liability and an offsetting receivable 

of $356 million and $323 million was recorded for one 

case as of December 31, 2011 and 2010, respectively. This 

case is currently before the lower court pending remand 

following appeal and is still considered active.

The FDIC believes that it is reasonably possible that the 

FRF could incur additional estimated losses for two of the 

five remaining cases of up to $268 million. The plaintiff 

in one case was awarded $205 million by the Court of 

Federal Claims, and this case is currently on appeal. The 

remaining $63 million is additional damages contended 

by the plaintiff to the $356 million contingent liability for 

the one case mentioned in the previous paragraph. For 

the three remaining active cases, the FDIC is unable to 

estimate a range of loss to the FRF-FSLIC. No awards were 

given to the plaintiffs in these three cases by the appellate 

courts. Two cases are currently on appeal, and the other 

case is fully adjudicated but the Court of Federal Claims is 

considering awarding litigation costs to the United States.

In addition, the FRF-FSLIC pays the goodwill litigation 

expenses incurred by the DOJ, the entity that defends 

these lawsuits against the United States, based on a 

Memorandum of Understanding (MOU) dated October 

2, 1998, between the FDIC and the DOJ. FRF-FSLIC pays 

in advance the estimated goodwill litigation expenses. 

Any unused funds are carried over and applied toward 

the next fiscal year (FY) charges. In 2011, FRF-FSLIC did 
Financia 

106

not provide any additional funding to the DOJ because 

the unused funds from FY 2011 were sufficient to cover 

estimated FY 2012 expenses of $2.6 million. 

Guari

Paralleling the goodwill cases were similar cases alleging 

that the government breached agreements regarding 

tax benefits associated with certain FSLIC-assisted 

acquisitions. These agreements allegedly contained the 

promise of tax deductions for losses incurred on the sale 

of certain thrift assets purchased by plaintiffs from the 

FSLIC, even though the FSLIC provided the plaintiffs with 

tax-exempt reimbursement. A provision in the Omnibus 

Budget Reconciliation Act of 1993 (popularly referred to 

as the “Guarini legislation”) eliminated the tax deductions 

for these losses.

All eight of the original Guarini cases have been settled. 

However, a case settled in 2006 further obligates the FRFFSLIC as a guarantor for all tax liabilities in the event the 

settlement amount is determined by tax authorities to 

be taxable. The maximum potential exposure under this 

guarantee is approximately $81 million. However, the 

FDIC believes that it is very unlikely the settlement will be 

subject to taxation. More definitive information may be 

available during 2012, after the Internal Revenue Service 

(IRS) completes its Large Case Program audit on the 

affected entity’s 2006 returns; this audit remains ongoing. 

As of December 31, 2011, no liability has been recorded. 

The FRF does not expect to fund any payment under 

this guarantee. 

Representa

As part of the RTC’s efforts to maximize the return from 

the sale of assets from thrift resolutions, representations 

and warranties, and guarantees were offered on certain 

loan sales. The majority of loans subject to these 

agreements have been paid off, refinanced, or the period 

for filing claims has expired. The FDIC’s estimate of 

maximum potential exposure to the FRF is zero. No 

claims in connection with representations and warranties 

have been asserted since 1998 on the remaining open 

agreements. Because of the age of the remaining portfolio 

and lack of claim activity, the FDIC does not expect new 

claims to be asserted in the future. Consequently, the 

financial statements at December 31, 2011 and 2010, do 

not include a liability for these agreements.

5. Resolution Equity

As stated in the Legislative History section of Note 1, the 

FRF is comprised of two distinct pools: the FRF-FSLIC 

and the FRF-RTC. The FRF-FSLIC consists of the assets 

and liabilities of the former FSLIC. The FRF-RTC consists 

of the assets and liabilities of the former RTC. Pursuant to 

legal restrictions, the two pools are maintained separately 

and the assets of one pool are not available to satisfy 

obligations of the other.

The following table shows the contributed capital, 

accumulated deficit, and resulting resolution equity for 

each pool.

Resolution Equity at December 31, 20

Dolars

FRF-FSLIC FRF-RTC

FRF

Consol

Contributed 

capital - 

beginning $46,043,359 $81,749,337 $127,792,696 

Add: U.S. 

Treasury 

payments/

receivable 

for goodwill 

litigation 82,960 0 82,960 

Contributed 

capital - 

ending 46,126,319 81,749,337 127,875,656 

Accumulated 

deficit (42,702,916) (81,577,711) (124,280,627)

Total $3,423,403 $171,626 $3,595,029
2011

A N N U A L R E P O R T

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financials

Contribu

The FRF-FSLIC and the former RTC received $43.5 billion 

and $60.1 billion from the U.S. Treasury, respectively, 

to fund losses from thrift resolutions prior to July 1, 

1995. Additionally, the FRF-FSLIC issued $670 million 

in capital certificates to the Financing Corporation (a 

mixed-ownership government corporation established to 

function solely as a financing vehicle for the FSLIC) and 

the RTC issued $31.3 billion of these instruments to the 

REFCORP. FIRREA prohibited the payment of dividends 

on any of these capital certificates.

Through December 31, 2011, the FRF-RTC has returned 

$4.6 billion to the U.S. Treasury and made payments 

of $5.0 billion to the REFCORP. These actions serve to 

reduce contributed capital. The most recent payment to 

the REFCORP was in January of 2008 for $225 million. 

FRF-FSLIC received $50 million in U.S. Treasury 

payments for goodwill litigation in 2011. Furthermore, 

$356 million and $323 million were accrued for as 

receivables at year-end 2011 and 2010, respectively. The 

effect of this activity was an increase in contributed capital 

of $83 million in 2011.

Accumula

The accumulated deficit represents the cumulative excess 

of expenses and losses over revenue for activity related to 

the FRF-FSLIC and the FRF-RTC. Approximately $29.8 

billion and $87.9 billion were brought forward from the 

former FSLIC and the former RTC on August 9, 1989, and 

January 1, 1996, respectively. The FRF-FSLIC accumulated 

deficit has increased by $12.9 billion, whereas the FRFRTC accumulated deficit has decreased by $6.3 billion, 

since their dissolution dates.

6. Disclosures About the Fair Value of

Financial Instrument

The financial assets recognized and measured at fair 

value on a recurring basis at each reporting date are 

cash equivalents and credit enhancement reserves. 

The following table presents the FRF’s financial assets 

measured at fair value as of December 31, 2011 and 2010.

Assets Measured at Fair Value at December 31, 20

Dolars

Fair Value Measurements Using

Quoted 

acti

for Iden

(Level 

Sign

Observ

(Level 

Si

Unob

Inp

(Level 

Total

at Fai

Assets

Cash equivalents1 $3,377,203 $3,377,203 

Credit enhancement 

reserves2 $14,431 14,431 

Total Assets $3,377,203 $14,431 $0 $3,391,634 

(1) Cash equivalents are Special U.S. Treasury Certificates with overnight maturities valued at prevailing interest rates established by the U.S. Bureau of 

Public Debt. Cash equivalents are included in the “Cash and cash equivalents” line item.

(2) Credit enhancement reserves are valued by performing projected cash flow analyses using market-based assumptions (see Note 3).
Financia 

108

Assets Measured at Fair Value at December 31, 20

Dolars

Fair Value Measurements Using

Quoted 

acti

for Iden

(Level 

Sign

Observ

(Level 

Si

Unob

Inp

(Level 

Total

at Fai

Assets

Cash equivalents1 $3,397,440 $3,397,440 

Credit enhancement 

reserves2 $17,378 17,378 

Total Assets $3,397,440 $17,378 $0 $3,414,818 

(1) Cash equivalents are Special U.S. Treasury Certificates with overnight maturities valued at prevailing interest rates established by the U.S. Bureau of 

Public Debt. Cash equivalents are included in the “Cash and cash equivalents” line item.

(2) Credit enhancement reserves are valued by performing projected cash flow analyses using market-based assumptions (see Note 3).

Some of the FRF’s financial assets and liabilities are not 

recognized at fair value but are recorded at amounts that 

approximate fair value due to their short maturities and/

or comparability with current interest rates. Such items 

include other short-term receivables and accounts payable 

and other liabilities.

The net receivable from thrift resolutions is influenced 

by the underlying valuation of receivership assets. This 

corporate receivable is unique and the estimate presented 

is not necessarily indicative of the amount that could be 

realized in a sale to the private sector. Such a sale would 

require indeterminate, but substantial, discounts for an 

interested party to profit from these assets because of 

credit and other risks. Consequently, it is not practicable 

to estimate its fair value.
2011

A N N U A L R E P O R T

109

financials

Government Accountabilit
Financia 

110

Government Accountability Office’s A
2011

A N N U A L R E P O R T

111

financials
Financia 

112

Government Accountability Office’s A
2011

A N N U A L R E P O R T

113

financials
Financia 

114

Government Accountability Office’s A
2011

A N N U A L R E P O R T

115

financials
Financia 

116

Government Accountability Office’s A
2011

A N N U A L R E P O R T

117

financials
Financia 

118

app

manageme
2011

A N N U A L R E P O R T

119

financials

management’s respons
Financia 

120

Overview o

The 7,357 FDIC-insured commercial banks and savings 

institutions that filed financial results at year-end 2011 

reported net income of $119.5 billion for the year, an 

increase of $34.0 billion compared with full year 2010.

This is the highest annual earnings total since 2006, when 

insured institutions reported $145.2 billion in net income.

The year-over-year improvement was made possible by 

large reductions in provisions for loan and lease losses, 

reflecting an improving trend in credit quality. The 

improvement in earnings was fairly widespread; more than 

two out of every three insured institutions – 66.9 percent – 

reported higher net income than in 2010. Fewer than one 

in seven institutions – 15.5 percent – reported a net loss for 

the year, the lowest proportion since 2007. Reduced loss 

provisioning expenses made up for a year-over-year decline 

in the industry’s revenues. Net operating revenue (the sum 

of net interest income and total noninterest income) was 

$12.8 billion lower than in 2010.

The average return on assets (ROA) rose to 0.88 percent 

from 0.65 percent a year earlier. This is the highest full 

year ROA for the industry since 2006. More than 59 

percent of insured institutions had higher ROAs in 2011 

than in 2010. Insured institutions set aside $76.9 billion 

in provisions for loan and lease losses during 2011, a 

reduction of $81.1 billion (51.3 percent) compared to 2010.

The industry’s total noninterest income declined by $5.3 

billion (2.3 percent), as income from asset servicing fell 

by $8.0 billion (48.6 percent), gains on loan sales dropped 

by $4.8 billion (43.0 percent), and income from service 

charges on deposit accounts declined by $2.2 billion 

(5.9 percent). These declines were partially offset by a 

$2.2 billion (9.5 percent) increase in trading income. Net 

interest income was $7.5 billion (1.7 percent) lower than 

in 2010. Total noninterest expenses were $19.8 billion (5.1 

percent) higher.

A problematic interest-rate environment characterized 

by historically low short-term interest rates contributed 

to a decline in the industry’s net interest margin. The 

average margin fell from 3.76 percent in 2010 to 3.60 

percent in 2011. Narrower spreads between the yields on 

interest-earning assets and the costs of funding those 

assets combined with weak growth in earning assets to 

produce the year-over-year decline in net interest income.

The greatest margin declines occurred at the largest banks, 

where much of the growth in interest-earning assets 

consisted of low-yield investments, such as balances with 

Federal Reserve banks.

An improving trend in asset quality indicators that began 

in the second half of 2010 continued through the end of 

2011. For the twelve months ended December 31, total 

noncurrent loans and leases – those that were 90 days 

or more past due or in nonaccrual status – fell by $53.5 

billion (14.9 percent). All major loan categories registered 

improvements, with loans secured by real estate properties 

accounting for more than two-thirds (68 percent) of the 

total decline in noncurrent loan balances. Noncurrent 

real estate construction and development loans declined 

by $19.3 billion, while balances of loans to commercial 

and industrial (C&I) borrowers that were noncurrent fell 

by $11.7 billion. Noncurrent real estate loans secured by 

nonfarm nonresidential properties declined by $6.1 billion, 

and noncurrent residential mortgage balances dropped by 

$5.6 billion. Net charge-offs of loans and leases (NCOs) 

totaled $113.0 billion in 2011, a $74.7 billion decline from 

2010. This is the fourth consecutive year that industry 

charge-offs exceeded $100 billion. Credit card loan NCOs 

had the largest year-over-year decline, falling by $27.9 

billion. NCOs of real estate construction loans were $11.8 

billion lower, C&I NCOs were down by $9.8 billion, and 

residential mortgage NCOs fell by $8.3 billion. At the 

end of 2011, there were 813 institutions on the FDIC’s 

“Problem List,” down from 884 “problem” institutions at 

the beginning of the year.
2011

A N N U A L R E P O R T

121

financials

Asset growth picked up in 2011, funded by strong deposit 

inflows. During the 12 months ended December 31, total 

assets of insured institutions increased by $564.4 billion 

(4.2 percent). Cash and balances due from depository 

institutions (including balances with Federal Reserve 

banks) accounted for $298.4 billion (52.9 percent) of 

the growth in assets. Securities portfolios rose by $182.6 

billion (6.8 percent). Net loans and leases increased 

by $130.8 billion, as C&I loan balances rose by $160.9 

billion (13.6 percent). Balances fell in most other major 

loan categories in 2011. The largest declines occurred in 

real estate construction and development loans, where 

balances fell by $81.4 billion (25.3 percent), and in home 

equity lines of credit, which declined by $33.5 billion (5.3 

percent). Banks reduced their reserves for loan losses by 

$40.5 billion (17.5 percent) during 2011, while increasing 

their equity capital by $68.0 billion (4.6 percent). 

Growth in deposits outpaced the increase in total assets in 

2011. Deposits in domestic offices of insured institutions 

increased by $881.9 billion (11.2 percent), while deposits 

in foreign offices fell by $121.4 billion (7.8 percent). A 

large portion of the increase in domestic deposits occurred 

in noninterest-bearing transaction accounts with balances 

greater than $250,000 that are fully insured until the end 

of 2012. Balances in these accounts increased by $569.1 

billion (56 percent) during the year. Nondeposit liabilities 

fell by $255.6 billion (10.7 percent), as banks reduced 

their Federal Home Loan Bank advances by $59.1 billion 

(15.3 percent), Fed funds purchased declined by $72.5 

billion (60.9 percent), securities sold under repurchase 

agreements dropped by $30.3 billion (6.6 percent), 

and other secured borrowings fell by $76.4 billion 

(19.6 percent).
2011

A N N U A L R E P O R T

123

corpora

5. Corporate management cont

The FDIC uses several means to maintain 

comprehensive internal controls, ensure the 

overall effectiveness and efficiency of operations 

and otherwise comply as necessary with the following 

federal standards, among others:

★ Chief Financial Officers’ Act (CFO Act)

★ Federal Managers’ Financial Integrity Act (FMFIA)

★ Federal Financial Management Improvement 

Act (FFMIA)

★ Government Performance and Results Act (GPRA)

★ Federal Information Security Management Act (FISMA)

★ OMB Circular A-123

★ GAO’s Standards for Internal Control in the 

Federal Government

As a foundation for these efforts, the Corporate 

Management Control Branch in DOF [formerly the Office 

of Enterprise Risk Management (OERM)] traditionally 

has overseen a corporate-wide program of relevant 

activities by establishing policies and coordinating on 

an ongoing basis with parallel management control 

units in each Division and Office in the FDIC. Broadly 

speaking, a coordinated effort has been made to 

ensure that operational risks have been identified, with 

corresponding control needs being incorporated into 

day-to-day operations. The program also imposes the 

need for comprehensive procedures to be documented, 

employees to be thoroughly trained and supervisors 

to be held accountable for performance and results. 

Compliance monitoring is carried out through periodic 

management reviews and by the distribution of various 

activity reports to all levels of management. Conscientious 

attention is also paid to the implementation of audit 

recommendations made by the FDIC Office of the 

Inspector General, the GAO, the Treasury Department’s 

Special Inspector General for the TARP program and 

other providers of external/audit scrutiny. The FDIC 

has received unqualified (clean) opinions on its financial 

statement audits for twenty consecutive years, and these 

and other positive results are reflective of the effectiveness 

of the overall management control program.

Significantly, since the beginning of the financial crisis, 

the FDIC has expanded the range of issues receiving 

close management scrutiny to encompass crisis-related 

challenges. Several Program Management Organizations 

(PMOs) were created to oversee such issues as shared-loss 

agreements, legacy loans, systemic resolution authority, 

the Temporary Liquidity Guarantee Program, contract 

management oversight, and resource management. For 

each area, key issues and risks were identified, action plans 

and performance metrics were developed as necessary, and 

the Chairman was briefed at least monthly. In many cases, 

enhancements in operating procedures and automated 

systems of support were made as a direct result of this 

heightened management attention. Particular attention 

also was given to the training needs of the FDIC’s 

expanded staff, to include training in supervisory skills, 

to help ensure the continuation of effective operations 

and results. 

Similar plans for 2012 and beyond have been developed 

to ensure a smooth transition of operations as we move 

toward a post-crisis operating environment. Among other 

things, program evaluation activities in the coming year 

will focus not only on new responsibilities associated 
corpora

124

with the Dodd-Frank legislation and other internal 

organizational changes, but on the closing of temporary 

satellite offices and the downsizing of staffing in general. 

Continued emphasis and management scrutiny also will 

be applied to contracting oversight, the accuracy and 

integrity of transactions, and systems development efforts 

in general. 

Managment R

As required under amended Section 5 of the Inspector 

General Act of 1978, the FDIC must report information 

on final action taken by management on certain audit 

reports. The tables on the following pages provide 

information on final action taken by management on 

audit reports for the federal fiscal year period October 1, 

2010, through September 30, 2011.

Table 1: Management Report on Final Action on Audits with Disallowed Costs for Fiscal Year 2

Dolars

Audit Re

Number

Reports Disa

A. Management decisions – final action not taken at beginning of period 2 $25,148

B. Management decisions made during the period 4 $42,801

C. Total reports pending final action during the period (A and B) 6 $67,949

D.

Final action taken during the period:

1. Recoveries: 

(a) Collections & offsets 5 $37,605

(b) Other 0 $0

2. Write-offs 3 $3,987

3. Total of 1(a), 1(b), & 2 51 $41,592

E. Audit reports needing final action at the end of the period 2 $31,4752

1 Three reports have both collections and write-offs, thus the total of 1(a), 1(b), and 2 is five.

2 Amount collected in D3 included excess recoveries of $2.6 million not reflected in line E. 
2011

A N N U A L R E P O R T

125

corpora

Table 2: Management Report on Final Action on Audits with Recommendations to Put Fund

to Better Use for Fiscal Year 20

Dolars

Audit Re

Number

Reports Funds Put T

A. Management decisions – final action not taken at beginning of period 0 $0 

B. Management decisions made during the period 1 $2,509 

C. Total reports pending final action during the period (A and B) 1 $2,509 

D.

Final action taken during the period:

1. Value of recommendations implemented (completed) 1 $43

2. Value of recommendations that management concluded should not 

or could not be implemented or completed

1 $2,466

3. Total of 1 and 2 13 $2,509

E. Audit reports needing final action at the end of the period 0 $0

Table 3: Audit Reports Without Final Actions But With Management Decisions Over One Y

for Fiscal Year 2011 Management Action in Proc

Report No. 

Issue Date OIG Audit Fi

Disal

Co

AUD-11-001

11/30/2010

KPMG recommends that the 

FDIC should complete the design 

and implementation of an agencywide continuous monitoring 

program that addresses continuous 

monitoring strategies for FDIC 

information systems.

During 2011, the FDIC completed the design 

of the agency-wide continuous monitoring 

program and made significant progress in 

implementing that program. The Office of 

Inspector General’s Federal Information 

Security Management Act (FISMA) results 

confirmed that, “the FDIC made meaningful 

progress in developing an agency-wide 

continuous monitoring program.” 

In addition, the OIG 2011 FISMA report 

further stated that the OIG was not issuing 

any new recommendations in the area 

of continuous monitoring management 

because, “the FDIC was working to fully 

implement a multi-year effort to address a 

recommendation in our prior-year security 

evaluation report required by FISMA.” 

The OIG will re-evaluate progress on the 

implementation of this program during the 

2012 FISMA evaluation.

Expected completion date: December 2012

$0 

3 One report had both implemented and unimplemented values.
2011

A N N U A L R E P O R T

127

app

6. Appendice

A. Key Sta

The FDICs Strategic Plan and Annual Performance 

Plan provide the basis for annual planning and budgeting 

for needed resources. The 2011 aggregate budget 

(for corporate, receivership, and investment spending) 

was $3.88 billion, while actual expenditures for the 

year were $2.83 billion, about $590 million less than 

2010 expenditures.

Over the past decade the FDIC’s expenditures have 

varied in response to workload. After peaking in 2010, 

expenditure levels subsided in 2011, largely due to 

decreasing resolution and receivership activity. 

$3,500

3,000

2,500

2,000

1,500

1,000

500

0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FDIC Expenditures 2002-20

Dollars in Millio
app

128

FDIC Actions on Financial Institutions Applications 2009–201

2011 2010 2009

Deposit Insurance 10 16 19

Approved1 10 16 19

Denied 0 0 0

New Branches 442 461 521

Approved 442 459 521

Denied 0 2 0

Mergers 206 182 190

Approved 206 182 190

Denied 0 0 0

Requests for Consent to Serve2 876 839 503

Approved 875 839 503

Section 19 24 10 20

Section 32 851 829 483

Denied 1 0 0

Section 19 0 0 0

Section 32 1 0 0

Notices of Change in Control 21 33 18

Letters of Intent Not to Disapprove 21 33 18

Disapproved 0 0 0

Brokered Deposit Waivers 84 66 35

Approved 83 65 34

Denied 1 1 1

Savings Association Activities3 30 31 39

Approved 30 31 39

Denied 0 0 0

State Bank Activities/Investments4 9 3 2

Approved 9 3 2

Denied 0 0 0

Conversion of Mutual Institutions 6 2 6

Non-Objection 6 2 6

Objection 0 0 0

1 Includes deposit insurance application filed on behalf of: (1) newly organized institutions, (2) existing uninsured financial services companies seeking 

establishment as an insured institution, and (3) interim institutions established to facilitate merger or conversion transactions, and applications to 

facilitate the establishment of thrift holding companies.

2 Under Section 19 of the Federal Deposit Insurance (FDI) Act, an insured institution must receive FDIC approval before employing a person convicted of 

dishonesty or breach of trust. Under Section 32, the FDIC must approve any change of directors or senior executive officers at a state nonmember bank 

that is not in compliance with capital requirements or is otherwise in troubled condition. 

3 Amendments to Part 303 of the FDIC Rules and Regulations changed FDIC oversight responsibility in October 1998. In 1998, Part 303 changed the 

Delegations of Authority to act upon applications. 

4 Section 24 of the FDI Act, in general, precludes a federally insured state bank from engaging in an activity not permissible for a national bank and 

requires notices to be filed with the FDIC.
2011

A N N U A L R E P O R T

129

Appe

Compliance, Enforcement, and Other Related Legal Actions 2009–20

2011 2010 2009

Total Number of Actions Initiated by the FDIC 550 758 551

Termination of Insurance

Involuntary Termination

Sec. 8a For Violations, Unsafe/Unsound Practices or Conditions 0 0 0

 Voluntary Termination

Sec. 8a By Order Upon Request 0 0 0

Sec. 8p No Deposits 7 4 4

Sec. 8q Deposits Assumed 2 1 2

Sec. 8b Cease-and-Desist Action

Notices of Charges Issued* 7 1 3

Consent Orders 183 372 302

Sec. 8e Removal/Prohibition of Director or Office

Notices of Intention to Remove/Prohibit 11 10 2

Consent Orders 100 111 64

Sec. 8g Suspension/Removal When Charged With Crime 1 0 

Civil Money Penalties Issued

Sec. 7a Call Report Penalties 0 0 1

Sec. 8i Civil Money Penalties 193 212 154

Sec. 8i Civil Money Penalty Notices of Assessment 5 8 0

Sec. 10c Orders of Investigation 29 15 1

Sec. 19 Waiver Order

Approved Section 19 Waiver Orders 10 24 12

Denied Section 19 Waiver Orders 1 0 0

Sec. 32 Notices Disapproving Officer/Director’s Request for Review 0 0 

Truth-in-Lending Act Reimbursement Actions

Denials of Requests for Relief 0 0 0

Grants of Relief 0 0 0

Banks Making Reimbursement* 84 64 94

Suspicious Activity Reports (Open and closed institutions)* 125,460 126,098 128,973

Other Actions Not Listed 8 1 0

*These actions do not constitute the initiation of a formal enforcement action and, therefore, are not included in the total number of actions initiated.
app

130

Estimated Insured Deposits and the Deposit Insurance Fund, December 31, 19

through December 31, 201

Dolars in Millions (except Insu

Depo

Insured 

Insuran

a a Per

Y

Ins

Covera

Total 

Dep

Est. I

Depo

Percen

Insur

Dep

Dep

Insu

Fun

To

Dom

Dep

Est. I

Dep

2011 $250,000 $8,779,282 $6,979,126 79.5 $11,826.5 0.13 0.17

2010 250,000 7,887,732 6,315,302 80.1 (7,352.2) (0.09) (0.12)

2009 250,000 7,705,353 5,407,757 70.2 (20,861.8) (0.27) (0.39)

2008 100,000 7,505,409 4,750,783 63.3 17,276.3 0.23 0.36 

2007 100,000 6,921,678 4,292,211 62.0 52,413.0 0.76 1.22 

2006 100,000 6,640,097 4,153,808 62.6 50,165.3 0.76 1.21 

2005 100,000 6,229,823 3,891,000 62.5 48,596.6 0.78 1.25 

2004 100,000 5,724,775 3,622,213 63.3 47,506.8 0.83 1.31 

2003 100,000 5,224,030 3,452,606 66.1 46,022.3 0.88 1.33 

2002 100,000 4,916,200 3,383,720 68.8 43,797.0 0.89 1.29 

2001 100,000 4,565,068 3,216,585 70.5 41,373.8 0.91 1.29 

2000 100,000 4,211,895 3,055,108 72.5 41,733.8 0.99 1.37 

1999 100,000 3,885,826 2,869,208 73.8 39,694.9 1.02 1.38 

1998 100,000 3,817,150 2,850,452 74.7 39,452.1 1.03 1.38 

1997 100,000 3,602,189 2,746,477 76.2 37,660.8 1.05 1.37 

1996 100,000 3,454,556 2,690,439 77.9 35,742.8 1.03 1.33 

1995 100,000 3,318,595 2,663,873 80.3 28,811.5 0.87 1.08 

1994 100,000 3,184,410 2,588,619 81.3 23,784.5 0.75 0.92 

1993 100,000 3,220,302 2,602,781 80.8 14,277.3 0.44 0.55 

1992 100,000 3,275,530 2,677,709 81.7 178.4 0.01 0.01 

1991 100,000 3,331,312 2,733,387 82.1 (6,934.0) (0.21) (0.25)

1990 100,000 3,415,464 2,784,838 81.5 4,062.7 0.12 0.15 

1989 100,000 3,412,503 2,755,471 80.7 13,209.5 0.39 0.48 

1988 100,000 2,337,080 1,756,771 75.2 14,061.1 0.60 0.80 

1987 100,000 2,198,648 1,657,291 75.4 18,301.8 0.83 1.10 

1986 100,000 2,162,687 1,636,915 75.7 18,253.3 0.84 1.12 

1985 100,000 1,975,030 1,510,496 76.5 17,956.9 0.91 1.19 

1984 100,000 1,805,334 1,393,421 77.2 16,529.4 0.92 1.19 
2011

A N N U A L R E P O R T

131

Appe

Estimated Insured Deposits and the Deposit Insurance Fund, December 31, 19

through December 31, 201

Dolars in Millions (except Insu

Depo

Insured 

Insuran

a a Per

Y

Ins

Covera

Total 

Dep

Est. I

Depo

Percen

Insur

Dep

Dep

Insu

Fun

To

Dom

Dep

Est. I

Dep

1983 100,000 1,690,576 1,268,332 75.0 15,429.1 0.91 1.22 

1982 100,000 1,544,697 1,134,221 73.4 13,770.9 0.89 1.21 

1981 100,000 1,409,322 988,898 70.2 12,246.1 0.87 1.24 

1980 100,000 1,324,463 948,717 71.6 11,019.5 0.83 1.16 

1979 40,000 1,226,943 808,555 65.9 9,792.7 0.80 1.21 

1978 40,000 1,145,835 760,706 66.4 8,796.0 0.77 1.16 

1977 40,000 1,050,435 692,533 65.9 7,992.8 0.76 1.15 

1976 40,000 941,923 628,263 66.7 7,268.8 0.77 1.16 

1975 40,000 875,985 569,101 65.0 6,716.0 0.77 1.18 

1974 40,000 833,277 520,309 62.4 6,124.2 0.73 1.18 

1973 20,000 766,509 465,600 60.7 5,615.3 0.73 1.21 

1972 20,000 697,480 419,756 60.2 5,158.7 0.74 1.23 

1971 20,000 610,685 374,568 61.3 4,739.9 0.78 1.27 

1970 20,000 545,198 349,581 64.1 4,379.6 0.80 1.25 

1969 20,000 495,858 313,085 63.1 4,051.1 0.82 1.29 

1968 15,000 491,513 296,701 60.4 3,749.2 0.76 1.26 

1967 15,000 448,709 261,149 58.2 3,485.5 0.78 1.33 

1966 15,000 401,096 234,150 58.4 3,252.0 0.81 1.39 

1965 10,000 377,400 209,690 55.6 3,036.3 0.80 1.45 

1964 10,000 348,981 191,787 55.0 2,844.7 0.82 1.48 

1963 10,000 313,304 177,381 56.6 2,667.9 0.85 1.50 

1962 10,000 297,548 170,210 57.2 2,502.0 0.84 1.47 

1961 10,000 281,304 160,309 57.0 2,353.8 0.84 1.47 

1960 10,000 260,495 149,684 57.5 2,222.2 0.85 1.48 

1959 10,000 247,589 142,131 57.4 2,089.8 0.84 1.47 

1958 10,000 242,445 137,698 56.8 1,965.4 0.81 1.43 

1957 10,000 225,507 127,055 56.3 1,850.5 0.82 1.46 

1956 10,000 219,393 121,008 55.2 1,742.1 0.79 1.44 

CONTI
app

132

Estimated Insured Deposits and the Deposit Insurance Fund, December 31, 19

through December 31, 201

Dolars in Millions (except Insu

Depo

Insured 

Insuran

a a Per

Y

Ins

Covera

Total 

Dep

Est. I

Depo

Percen

Insur

Dep

Dep

Insu

Fun

To

Dom

Dep

Est. I

Dep

1955 10,000 212,226 116,380 54.8 1,639.6 0.77 1.41 

1954 10,000 203,195 110,973 54.6 1,542.7 0.76 1.39 

1953 10,000 193,466 105,610 54.6 1,450.7 0.75 1.37 

1952 10,000 188,142 101,841 54.1 1,363.5 0.72 1.34 

1951 10,000 178,540 96,713 54.2 1,282.2 0.72 1.33 

1950 10,000 167,818 91,359 54.4 1,243.9 0.74 1.36 

1949 5,000 156,786 76,589 48.8 1,203.9 0.77 1.57 

1948 5,000 153,454 75,320 49.1 1,065.9 0.69 1.42 

1947 5,000 154,096 76,254 49.5 1,006.1 0.65 1.32 

1946 5,000 148,458 73,759 49.7 1,058.5 0.71 1.44 

1945 5,000 157,174 67,021 42.6 929.2 0.59 1.39 

1944 5,000 134,662 56,398 41.9 804.3 0.60 1.43 

1943 5,000 111,650 48,440 43.4 703.1 0.63 1.45 

1942 5,000 89,869 32,837 36.5 616.9 0.69 1.88 

1941 5,000 71,209 28,249 39.7 553.5 0.78 1.96 

1940 5,000 65,288 26,638 40.8 496.0 0.76 1.86 

1939 5,000 57,485 24,650 42.9 452.7 0.79 1.84 

1938 5,000 50,791 23,121 45.5 420.5 0.83 1.82 

1937 5,000 48,228 22,557 46.8 383.1 0.79 1.70 

1936 5,000 50,281 22,330 44.4 343.4 0.68 1.54 

1935 5,000 45,125 20,158 44.7 306.0 0.68 1.52 

1934 5,000 40,060 18,075 45.1 291.7 0.73 1.61 

1 The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) temporarily provides unlimited coverage for non-interest 

bearing transaction accounts for two years beginning December 31, 2010. Coverage limits do not reflect temporary increases authorized by the 

Emergency Economic Stabilization Act of 2008. Coverage for certain retirement accounts increased to $250,000 in 2006. Initial coverage limit was 

$2,500 from January 1 to June 30, 1934.

2 Beginning in the fourth quarter 2010, estimates of insured deposits include the Dodd-Frank Act temporary unlimited coverage for non-interest 

bearing transaction accounts. Prior to 1989, figures are for the Bank Insurance Fund (BIF) only and exclude insured branches of foreign banks. 

For 1989 to 2005, figures represent sum of the BIF and Savings Association Insurance Fund (SAIF) amounts; for 2006 to 2011, figures are for DIF. 

Amounts for 1989 - 2011 include insured branches of foreign banks. Prior to year-end 1991, insured deposits were estimated using percentages 

determined from June Call and Thrift Financial Reports.

CONTI
2011

A N N U A L R E P O R T

133

Appe

Income and Expenses, Deposit Insurance Fund, from Beginning of Operations, September 11, 193

through December 31, 201

Dol

Income Expenses

Year

Asse

Inco

Asse

Cre

Inve

and

Ef

Asse

Rate1 

Pr

f

Ins. L

Admi

an

Ope

Expen

Int

& O

 In

Expe

Fundi

Tr

from 

FSLIC 

Resol

Fun

Ne

Incom

(Los

Total $172,116.7 $115,379.3 $11,392.7 $68,718.9 $161,430.1 $130,481.0 $21,356.9 $9,592.2 $139.5 $10,826

2011 $16,342.0 13,499.5 0.9 2,843.4 0.1110% (2,915.4) (4,413.6) 1,625.4 (127.2) 0 19,257.4 

2010 13,379.9 13,611.2 0.8 (230.5) 0.1772% 75.0 (847.8) 1,592.6 (669.8) 0 13,304.9 

2009 24,706.4 17,865.4 148.0 6,989.0 0.2330% 60,709.0 57,711.8 1,271.1 1,726.1 0 (36,002.6)

2008 7,306.3 4,410.4 1,445.9 4,341.8 0.0418% 44,339.5 41,838.8 1,033.5 1,467.2 0 (37,033.2)

2007 3,196.2 3,730.9 3,088.0 2,553.3 0.0093% 1,090.9 95.0 992.6 3.3 0 2,105.3 

2006 2,643.5 31.9 0.0 2,611.6 0.0005% 904.3 (52.1) 950.6 5.8 0 1,739.2 

2005 2,420.5 60.9 0.0 2,359.6 0.0010% 809.3 (160.2) 965.7 3.8 0 1,611.2 

2004 2,240.3 104.2 0.0 2,136.1 0.0019% 607.6 (353.4) 941.3 19.7 0 1,632.7 

2003 2,173.6 94.8 0.0 2,078.8 0.0019% (67.7) (1,010.5) 935.5 7.3 0 2,241.3 

2002 1,795.9 107.8 0.0 2,276.9 0.0023% 719.6 (243.0) 945.1 17.5 0 1,076.3 

2001 2,730.1 83.2 0.0 2,646.9 0.0019% 3,123.4 2,199.3 887.9 36.2 0 (393.3)

2000 2,570.1 64.3 0.0 2,505.8 0.0016% 945.2 28.0 883.9 33.3 0 1,624.9 

1999 2,416.7 48.4 0.0 2,368.3 0.0013% 2,047.0 1,199.7 823.4 23.9 0 369.7 

1998 2,584.6 37.0 0.0 2,547.6 0.0010% 817.5 (5.7) 782.6 40.6 0 1,767.1 

1997 2,165.5 38.6 0.0 2,126.9 0.0011% 247.3 (505.7) 677.2 75.8 0 1,918.2 

1996 7,156.8 5,294.2 0.0 1,862.6 0.1622% 353.6 (417.2) 568.3 202.5 0 6,803.2 

1995 5,229.2 3,877.0 0.0 1,352.2 0.1238% 202.2 (354.2) 510.6 45.8 0 5,027.0 

1994 7,682.1 6,722.7 0.0 959.4 0.2192% (1,825.1) (2,459.4) 443.2 191.1 0 9,507.2 

1993 7,354.5 6,682.0 0.0 672.5 0.2157% (6,744.4) (7,660.4) 418.5 497.5 0 14,098.9 

1992 6,479.3 5,758.6 0.0 720.7 0.1815% (596.8) (2,274.7) 614.83 1,063.1 35.4 7,111.5 

1991 5,886.5 5,254.0 0.0 632.5 0.1613% 16,925.3 15,496.2 326.1 1,103.0 42.4 (10,996.4)

1990 3,855.3 2,872.3 0.0 983.0 0.0868% 13,059.3 12,133.1 275.6 650.6 56.1 (9,147.9)

1989 3,494.8 1,885.0 0.0 1,609.8 0.0816% 4,352.2 3,811.3 219.9 321.0 5.6 (851.8)

1988 3,347.7 1,773.0 0.0 1,574.7 0.0825% 7,588.4 6,298.3 223.9 1,066.2 0 (4,240.7)
app

134

Income and Expenses, Deposit Insurance Fund, from Beginning of Operations, September 11, 193

through December 31, 201

Dol

Income Expenses

Year

Asse

Inco

Asse

Cre

Inve

and

Ef

Asse

Rate1 

Pr

f

Ins. L

Admi

an

Ope

Expen

Int

& O

 In

Expe

Fundi

Tr

from 

FSLIC 

Resol

Fun

Ne

Incom

(Los

1987 3,319.4 1,696.0 0.0 1,623.4 0.0833% 3,270.9 2,996.9 204.9 69.1 0 48.5 

1986 3,260.1 1,516.9 0.0 1,743.2 0.0787% 2,963.7 2,827.7 180.3 (44.3) 0 296.4 

1985 3,385.5 1,433.5 0.0 1,952.0 0.0815% 1,957.9 1,569.0 179.2 209.7 0 1,427.6 

1984 3,099.5 1,321.5 0.0 1,778.0 0.0800% 1,999.2 1,633.4 151.2 214.6 0 1,100.3 

1983 2,628.1 1,214.9 164.0 1,577.2 0.0714% 969.9 675.1 135.7 159.1 0 1,658.2 

1982 2,524.6 1,108.9 96.2 1,511.9 0.0769% 999.8 126.4 129.9 743.5 0 1,524.8 

1981 2,074.7 1,039.0 117.1 1,152.8 0.0714% 848.1 320.4 127.2 400.5 0 1,226.6 

1980 1,310.4 951.9 521.1 879.6 0.0370% 83.6 (38.1) 118.2 3.5 0 1,226.8 

1979 1,090.4 881.0 524.6 734.0 0.0333% 93.7 (17.2) 106.8 4.1 0 996.7 

1978 952.1 810.1 443.1 585.1 0.0385% 148.9 36.5 103.3 9.1 0 803.2 

1977 837.8 731.3 411.9 518.4 0.0370% 113.6 20.8 89.3 3.5 0 724.2 

1976 764.9 676.1 379.6 468.4 0.0370% 212.3 28.0 180.44 3.9 0 552.6 

1975 689.3 641.3 362.4 410.4 0.0357% 97.5 27.6 67.7 2.2 0 591.8 

1974 668.1 587.4 285.4 366.1 0.0435% 159.2 97.9 59.2 2.1 0 508.9 

1973 561.0 529.4 283.4 315.0 0.0385% 108.2 52.5 54.4 1.3 0 452.8 

1972 467.0 468.8 280.3 278.5 0.0333% 65.7 10.1 49.6 6.05 0 401.3 

1971 415.3 417.2 241.4 239.5 0.0345% 60.3 13.4 46.9 0.0 0 355.0 

1970 382.7 369.3 210.0 223.4 0.0357% 46.0 3.8 42.2 0.0 0 336.7 

1969 335.8 364.2 220.2 191.8 0.0333% 34.5 1.0 33.5 0.0 0 301.3 

1968 295.0 334.5 202.1 162.6 0.0333% 29.1 0.1 29.0 0.0 0 265.9 

1967 263.0 303.1 182.4 142.3 0.0333% 27.3 2.9 24.4 0.0 0 235.7 

1966 241.0 284.3 172.6 129.3 0.0323% 19.9 0.1 19.8 0.0 0 221.1 

1965 214.6 260.5 158.3 112.4 0.0323% 22.9 5.2 17.7 0.0 0 191.7 

1964 197.1 238.2 145.2 104.1 0.0323% 18.4 2.9 15.5 0.0 0 178.7 

1963 181.9 220.6 136.4 97.7 0.0313% 15.1 0.7 14.4 0.0 0 166.8 

CONTI
2011

A N N U A L R E P O R T

135

Appe

Income and Expenses, Deposit Insurance Fund, from Beginning of Operations, September 11, 193

through December 31, 201

Dol

Income Expenses

Year

Asse

Inco

Asse

Cre

Inve

and

Ef

Asse

Rate1 

Pr

f

Ins. L

Admi

an

Ope

Expen

Int

& O

 In

Expe

Fundi

Tr

from 

FSLIC 

Resol

Fun

Ne

Incom

(Los

1962 161.1 203.4 126.9 84.6 0.0313% 13.8 0.1 13.7 0.0 0 147.3 

1961 147.3 188.9 115.5 73.9 0.0323% 14.8 1.6 13.2 0.0 0 132.5 

1960 144.6 180.4 100.8 65.0 0.0370% 12.5 0.1 12.4 0.0 0 132.1 

1959 136.5 178.2 99.6 57.9 0.0370% 12.1 0.2 11.9 0.0 0 124.4 

1958 126.8 166.8 93.0 53.0 0.0370% 11.6 0.0 11.6 0.0 0 115.2 

1957 117.3 159.3 90.2 48.2 0.0357% 9.7 0.1 9.6 0.0 0 107.6 

1956 111.9 155.5 87.3 43.7 0.0370% 9.4 0.3 9.1 0.0 0 102.5 

1955 105.8 151.5 85.4 39.7 0.0370% 9.0 0.3 8.7 0.0 0 96.8 

1954 99.7 144.2 81.8 37.3 0.0357% 7.8 0.1 7.7 0.0 0 91.9 

1953 94.2 138.7 78.5 34.0 0.0357% 7.3 0.1 7.2 0.0 0 86.9 

1952 88.6 131.0 73.7 31.3 0.0370% 7.8 0.8 7.0 0.0 0 80.8 

1951 83.5 124.3 70.0 29.2 0.0370% 6.6 0.0 6.6 0.0 0 76.9 

1950 84.8 122.9 68.7 30.6 0.0370% 7.8 1.4 6.4 0.0 0 77.0 

1949 151.1 122.7 0.0 28.4 0.0833% 6.4 0.3 6.1 0.0 0 144.7 

1948 145.6 119.3 0.0 26.3 0.0833% 7.0 0.7 6.36 0.0 0 138.6 

1947 157.5 114.4 0.0 43.1 0.0833% 9.9 0.1 9.8 0.0 0 147.6 

1946 130.7 107.0 0.0 23.7 0.0833% 10.0 0.1 9.9 0.0 0 120.7 

1945 121.0 93.7 0.0 27.3 0.0833% 9.4 0.1 9.3 0.0 0 111.6 

1944 99.3 80.9 0.0 18.4 0.0833% 9.3 0.1 9.2 0.0 0 90.0 

1943 86.6 70.0 0.0 16.6 0.0833% 9.8 0.2 9.6 0.0 0 76.8 

1942 69.1 56.5 0.0 12.6 0.0833% 10.1 0.5 9.6 0.0 0 59.0 

1941 62.0 51.4 0.0 10.6 0.0833% 10.1 0.6 9.5 0.0 0 51.9 

1940 55.9 46.2 0.0 9.7 0.0833% 12.9 3.5 9.4 0.0 0 43.0 

1939 51.2 40.7 0.0 10.5 0.0833% 16.4 7.2 9.2 0.0 0 34.8 

1938 47.7 38.3 0.0 9.4 0.0833% 11.3 2.5 8.8 0.0 0 36.4 

CONTI
app

136

Income and Expenses, Deposit Insurance Fund, from Beginning of Operations, September 11, 193

through December 31, 201

Dol

Income Expenses

Year

Asse

Inco

Asse

Cre

Inve

and

Ef

Asse

Rate1 

Pr

f

Ins. L

Admi

an

Ope

Expen

Int

& O

 In

Expe

Fundi

Tr

from 

FSLIC 

Resol

Fun

Ne

Incom

(Los

1937 48.2 38.8 0.0 9.4 0.0833% 12.2 3.7 8.5 0.0 0 36.0 

1936 43.8 35.6 0.0 8.2 0.0833% 10.9 2.6 8.3 0.0 0 32.9 

1935 20.8 11.5 0.0 9.3 0.0833% 11.3 2.8 8.5 0.0 0 9.5 

1933-34 7.0 0.0 0.0 7.0 N/A 10.0 0.2 9.8 0.0 0 (3.0)

1

 Figures represent only BIF-insured institutions prior to 1990, BIF- and SAIF-insured institutions from 1990 through 2005, and DIF-insured institutions beginning 

in 2006. After 1995, all thrift closings became the reponsibility of the FDIC and amounts are reflected in the SAIF. The effective assessment rate is calculated 

from annual assessment income (net of assessment credits), excluding transfers to the Financing Corporation (FICO), Resolution Funding Corporation (REFCORP) 

and FSLIC Resolution Fund, divided by the four quarter average assessment base. The effective rates from 1950 through 1984 varied from the statutory rate of 

0.0833 percent due to assessment credits provided in those years. The statutory rate increased to 0.12 percent in 1990 and to a minimum of 0.15 percent in 

1991. The effective rates in 1991 and 1992 varied because the FDIC exercised new authority to increase assessments above the statutory minimum rate when 

needed. Beginning in 1993, the effective rate was based on a risk-related premium system under which institutions paid assessments in the range of 0.23 

percent to 0.31 percent. In May 1995, the BIF reached the mandatory recapitalization level of 1.25 percent. As a result, BIF assessment rates were reduced to 

a range of 0.04 percent to 0.31 percent of assessable deposits, effective June 1995, and assessments totaling $1.5 billion were refunded in September 1995. 

Assessment rates for the BIF were lowered again to a range of 0 to 0.27 percent of assessable deposits, effective the start of 1996. In 1996, the SAIF collected 

a one-time special assessment of $4.5 billion. Subsequently, assessment rates for the SAIF were lowered to the same range as the BIF, effective October 

1996. This range of rates remained unchanged for both funds through 2006. As part of the implementation of the Federal Deposit Insurance Reform Act of 

2005, assessment rates were increased to a range of 0.05 percent to 0.43 percent of assessable deposits effective at the start of 2007, but many institutions 

received a one-time assessment credit ($4.7 billion in total) to offset the new assessments. On December 16, 2008, the FDIC Board of Directors (the “Board”) 

adopted a final rule to temporarily increase assessment rates for the first quarter of 2009 to a range of 0.12 percent to 0.50 percent of assessable deposits. 

On February 27, 2009, the Board adopted a final rule effective April 1, 2009, setting initial base assessment rates to a range of 0.12 percent to 0.45 percent of 

assessable deposits. On June 30, 2009, a special assessment was imposed on all insured banks and thrifts, which amounted in aggregate to approximately 

$5.4 billion. For 8,106 institutions, with $9.3 trillion in assets, the special assessment was 5 basis points of each institution’s assets minus tier one capital; 89 

other institutions, with assets of $4.0 trillion, had their special asssessment capped at 10 basis points of their second quarter assessment base.

2

 These expenses, which are presented as operating expenses in the Statement of Income and Fund Balance, pertain to the FDIC in its corporate capacity only 

and do not include costs that are charged to the failed bank receiverships that are managed by the FDIC. The receivership expenses are presented as part of 

the “Receivables from Resolutions, net” line on the Balance Sheet. The narrative and graph presented in the “Corporate Planning and Budget” section of this 

report (page 127) show the aggregate (corporate and receivership) expenditures of the FDIC.

3

 Includes $210 million for the cumulative effect of an accounting change for certain postretirement benefits.

4

 Includes a $106 million net loss on government securities.

5

 This amount represents interest and other insurance expenses from 1933 to 1972.

6

 Includes the aggregate amount of $81 million of interest paid on capital stock between 1933 and 1948.

CONTI
2011

A N N U A L R E P O R T

137

Appe

Number, Assets, Deposits, Losses, and Loss to Funds of Insured Thrifts Taken Over 

Closed Because of Financial Difficulties, 1989 through 1995

Dolars

Yer  Total 

Est

Recei

Los

Loss

Fund

Total 748 $393,986,574 $317,501,978 $75,979,051 $81,577,711 

1995 2 423,819 414,692 28,192 27,750 

1994 2 136,815 127,508 11,472 14,599 

1993 10 6,147,962 4,881,461 267,595 65,212 

1992 59 44,196,946 34,773,224 3,287,038 3,832,275 

1991 144 78,898,904 65,173,122 9,235,975 9,734,271 

1990 213 129,662,498 98,963,962 16,063,752 19,258,646 

19894 318 134,519,630 113,168,009 47,085,027 48,644,958 

1

 Beginning in 1989 through July 1, 1995, all thrift closings were the responsibility of the Resolution Trust Corporation (RTC). Since the RTC was 

terminated on December 31, 1995, and all assets and liabilities transferred to the FSLIC Resolution Fund (FRF), all the results of the thrift closing 

activity from 1989 through 1995 are now reflected on FRF’s books. Year is the year of failure, not the year of resolution.

2 The estimated losses represent the projected loss at the fund level from receiverships for unreimbursed subrogated claims of the FRF and unpaid 

advances to receiverships from the FRF.

3

 The Loss to Funds represents the total resolution cost of the failed thrifts in the FRF-RTC fund, which includes corporate revenue and expense items 

such as interest expense on Federal Financing Bank debt, interest expense on escrowed funds, and interest revenue on advances to receiverships, 

in addition to the estimated losses for receiverships.

4

 Total for 1989 excludes nine failures of the former FSLIC.
app

138

FDIC-Insured Institutions Closed During 20

Dolars

Codes for Ba

NM = State-chartered bank that is not a member of the 

Federal Reserve System 

N = National Bank

SB = Savings Bank

SI = Stock and Mutual 

Savings Bank

SM = State-chartered bank that is a member 

of the Federal Reserve System

SA = Savings Association

Name and 

Ba

C

Numb

o

Dep

Acc

To

Ass

To

Depo

Insur

Deposit F

and

Disb

Esti

Loss 

the D

Dat

Clo

 o

Acqu

Receiver/A

Bank and

Purchase and Assumption – All Deposits

The First National Bank 

of Davis

Davis, OK

N 2,334 $90,183 $68,331 $117,515 $25,925 03/11/11 The Pauls Valley 

National Bank

Pauls Valley, OK

Whole Bank Purchase and Assumption – All Deposits

First Commercial Bank 

of Florida 

Orlando, FL

SM 14,657 $578,638 $537,223 $532,370 $113,687 01/07/11 First Southern Bank

Boca Raton, FL

Legacy Bank

Scottsdale, AZ

NM 1,262 $136,446 $119,685 $115,300 $39,529 01/07/11 Enterprise Bank and Trust

St. Louis, MO

Oglethorpe Bank

Brunswick, GA

NM 8,414 $211,149 $201,369 $199,988 $77,875 01/14/11 Bank of the Ozarks

Little Rock, AR

Community South Bank 

and Trust

Easley, SC

NM 13,832 $340,986 $314,250 $321,432 $65,732 01/21/11 CertusBank, 

National Association

Easley, SC

The Bank of Asheville

Asheville, NC

NM 10,489 $204,925 $199,394 $194,360 $58,361 01/21/11 First Bank

Troy, NC

United Western Bank

Denver, CO

SA 6,388 $2,153,690 $1,535,194 $1,628,067 $372,785 01/21/11 First-Citizens Bank and 

Trust Company

Raleigh, NC

Evergreen State Bank

Stoughton, WI

NM 7,084 $240,949 $193,694 $193,625 $37,690 01/28/11 MacFarland State Bank

McFarland, WI

First Community Bank

Taos, NM

SM 81,640 $2,188,154 $1,847,851 $1,815,138 $299,150 01/28/11 U.S. Bank, National 

Association

Minneapolis, MN

First State Bank

Camargo, OK

NM 1,528 $44,546 $41,204 $43,105 $35,122 01/28/11 Bank 7

Oklahoma City, OK

American Trust Bank

Roswell, GA

NM 4,260 $238,205 $222,161 $225,382 $79,591 02/04/11 Renasant Bank

Tupelo, MS

Community First Bank

Chicago, IL

SM 1,404 $51,083 $49,504 $50,032 $17,456 02/04/11 Northbrook Bank and 

Trust Company

Northbrook, IL
2011

A N N U A L R E P O R T

139

Appe

FDIC-Insured Institutions Closed During 20

Dolars

Codes for Ba

NM = State-chartered bank that is not a member of the 

Federal Reserve System 

N = National Bank

SB = Savings Bank

SI = Stock and Mutual 

Savings Bank

SM = State-chartered bank that is a member 

of the Federal Reserve System

SA = Savings Association

Name and 

Ba

C

Numb

o

Dep

Acc

To

Ass

To

Depo

Insur

Deposit F

and

Disb

Esti

Loss 

the D

Dat

Clo

 o

Acqu

Receiver/A

Bank and

North Georgia Bank

Watkinsville, GA

NM 3,833 $153,172 $139,672 $137,002 $54,619 02/04/11 BankSouth

Greensboro, GA

Badger State Bank

Cassville, WI

NM 5,386 $83,828 $78,549 $77,786 $20,798 02/11/11 Royal Bank

Elroy, WI

Canyon National Bank

Palm Springs, CA

N 9,588 $210,859 $205,285 $205,839 $19,065 02/11/11 Pacific Premier Bank

Costa Mesa, CA

Peoples State Bank

Hamtramck, MI

NM 21,775 $390,524 $389,868 $388,437 $134,570 02/11/11 First Michigan Bank

Troy, MI

Sunshine State 

Community Bank

Port Orange, FL

NM 8,387 $125,531 $116,715 $111,658 $34,884 02/11/11 Premier American 

Bank, N.A.

Miami, FL

Charter Oak Bank

Napa, CA

NM 2,416 $120,833 $105,309 $100,297 $25,905 02/18/11 Bank of Marin

Novato, CA

Citizens Bank of Effingham

Springfield, GA

NM 11,329 $214,275 $206,490 $208,501 $55,387 02/18/11 HeritageBank of the South

Albany, GA

Habersham Bank

Clarkesville, GA

NM 21,586 $387,681 $339,934 $342,242 $121,456 02/18/11 SCBT National Association

Orangeburg, SC

San Luis Trust Bank, FSB

San Luis Obispo, CA

SA 3,993 $332,596 $272,216 $272,049 $96,403 02/18/11 First California Bank

Westlake Village, CA

Valley Community Bank

St. Charles, IL

NM 6,176 $123,774 $124,179 $123,022 $30,277 02/25/11 First State Bank

Mendota, IL

Legacy Bank

Milwaukee, WI

SM 4,761 $190,418 $183,309 $199,694 $53,309 03/11/11 Seaway Bank and 

Trust Company

Chicago, IL

The Bank of Commerce

Wood Dale, IL

NM 3,139 $163,074 $161,379 $165,795 $47,322 03/25/11 Advantage National 

Bank Group

Elk Grove Village, IL

Nevada Commerce Bank

Las Vegas, NV NM 1,601 $135,064 $128,573 $130,778 $39,818 04/08/11

City National Bank

Los Angeles, CA

Western Springs National 

Bank and Trust

Western Springs, IL

N 6,870 $186,677 $182,441 $185,555 $32,523 04/08/11 Heartland Bank and 

Trust Company

Bloomington, IL

CONTI
app

140

FDIC-Insured Institutions Closed During 20

Dolars

Codes for Ba

NM = State-chartered bank that is not a member of the 

Federal Reserve System 

N = National Bank

SB = Savings Bank

SI = Stock and Mutual 

Savings Bank

SM = State-chartered bank that is a member 

of the Federal Reserve System

SA = Savings Association

Name and 

Ba

C

Numb

o

Dep

Acc

To

Ass

To

Depo

Insur

Deposit F

and

Disb

Esti

Loss 

the D

Dat

Clo

 o

Acqu

Receiver/A

Bank and

Bartow County Bank

Cartersville, GA

NM 20,216 $314,019 $290,005 $290,241 $78,302 04/15/11 Hamilton State Bank

Hoschton, GA

Heritage Banking Group

Carthage, MS

NM 11,820 $228,328 $205,035 $205,753 $57,429 04/15/11 Trustmark National Bank

Jackson, MS

New Horizons Bank

East Ellijay, GA

NM 3,251 $103,055 $99,022 $99,562 $37,622 04/15/11 Citizens South Bank

Gastonia, NC

Nexity Bank

Birmingham, AL

NM 11,141 $757,574 $611,681 $609,677 $196,204 04/15/11 Alostar Bank of Commerce

Birmingham, AL

Rosemount National Bank

Rosemount, MN

N 2,887 $21,454 $20,980 $22,899 $8,986 04/15/11 Central Bank

Stillwater, MN

Superior Bank

Birmingham, AL

SA 110,217 $2,977,290 $2,736,201 $2,752,261 $276,107 04/15/11 Superior Bank, N.A.

Birmingham, AL

Community Central Bank

Mount Clemens, MI

NM 9,558 $451,683 $371,494 $359,734 $191,415 04/29/11 Talmer Bank & Trust

Troy, MI

Cortez Community Bank

Brooksville, FL

NM 2,751 $66,282 $65,439 $66,587 $26,709 04/29/11 Premier American 

Bank, N.A.

Miami, FL

First Choice Community Bank

Dallas, GA

NM 11,419 $291,196 $294,769 $295,306 $100,197 04/29/11 Bank of the Ozarks

Little Rock, AR

First National Bank of 

Central Florida

Winter Park, FL

N 7,247 $342,079 $308,784 $306,179 $53,519 04/29/11 Premier American 

Bank, N.A.

Miami, FL

The Park Avenue Bank

Valdosta, GA

SM 38,484 $849,409 $724,483 $694,752 $326,980 04/29/11 Bank of the Ozarks

Little Rock, AR

Coastal Bank

Cocoa Beach, FL

SA 3,880 $129,429 $123,950 $124,171 $20,561 05/06/11 Premier American 

Bank, N.A.

Miami, FL

Atlantic Southern Bank

Macon, GA

NM 22,000 $741,855 $707,643 $680,442 $279,539 05/20/11 CertusBank, N.A.

Easley, SC

First Georgia Banking Co.

Franklin, GA

NM 27,959 $730,981 $702,231 $672,275 $177,408 05/20/11 CertusBank, N.A.

Easley, SC

CONTI
2011

A N N U A L R E P O R T

141

Appe

FDIC-Insured Institutions Closed During 20

Dolars

Codes for Ba

NM = State-chartered bank that is not a member of the 

Federal Reserve System 

N = National Bank

SB = Savings Bank

SI = Stock and Mutual 

Savings Bank

SM = State-chartered bank that is a member 

of the Federal Reserve System

SA = Savings Association

Name and 

Ba

C

Numb

o

Dep

Acc

To

Ass

To

Depo

Insur

Deposit F

and

Disb

Esti

Loss 

the D

Dat

Clo

 o

Acqu

Receiver/A

Bank and

Summit Bank

Burlington, WA

NM 4,495 $142,729 $131,631 $127,373 $21,969 05/20/11 Columbia State Bank

Tacoma, WA

First Heritage Bank

Snohomish, WA

NM 9,427 $173,478 $163,303 $161,772 $41,368 05/27/11 Columbia State Bank

Tacoma, WA

Atlantic Bank and Trust

Charleston, SC

SA 3,996 $208,204 $191,614 $185,844 $44,145 06/03/11 First Citizens Bank and 

Trust Company, Inc.

Columbia, SC

First Commercial Bank of 

Tampa Bay

Tampa, FL

NM 2,163 $98,624 $92,641 $92,400 $34,940 06/17/11 Stonegate Bank

Fort Lauderdale, FL

McIntosh State Bank

Jackson, GA

NM 20,633 $339,929 $324,403 $312,588 $87,540 06/17/11 Hamilton State Bank

Hoschton, GA

Mountain Heritage Bank

Clayton, GA

NM 2,779 $103,716 $89,554 $91,032 $45,738 06/24/11 First American Bank and 

Trust Company

Athens, GA

Colorado Capital Bank

Castle Rock, CO

NM 7,078 $665,806 $635,202 $628,260 $287,099 07/08/11 First-Citizens Bank & 

Trust Company

Raleigh, NC

First Chicago Bank 

and Trust

Chicago, IL

SM 17,859 $896,864 $830,530 $834,519 $275,894 07/08/11 Northbrook Bank & 

Trust Company

Northbrook, IL

Signature Bank

Windsor, CO

NM 2,723 $62,518 $60,349 $61,752 $26,373 07/08/11 Points West 

Community Bank

Julesburg, CO

First Peoples Bank

Port Saint Lucie, FL

NM 8,323 $225,035 $207,621 $214,077 $12,387 07/15/11 Florida Community 

Bank, N.A.

Miami, FL

High Trust Bank

Stockbridge, GA

NM 2,440 $180,340 $177,221 $177,388 $70,381 07/15/11 Ameris Bank

Moultrie, GA

One Georgia Bank

Atlanta, GA

NM 1,861 $177,715 $158,123 $157,917 $48,939 07/15/11 Ameris Bank

Moultrie, GA

Summit Bank

Prescott, AZ

NM 2,455 $73,066 $67,471 $68,365 $15,428 07/15/11 The Foothills Bank

Yuma, AZ

CONTI
app

142

FDIC-Insured Institutions Closed During 20

Dolars

Codes for Ba

NM = State-chartered bank that is not a member of the 

Federal Reserve System 

N = National Bank

SB = Savings Bank

SI = Stock and Mutual 

Savings Bank

SM = State-chartered bank that is a member 

of the Federal Reserve System

SA = Savings Association

Name and 

Ba

C

Numb

o

Dep

Acc

To

Ass

To

Depo

Insur

Deposit F

and

Disb

Esti

Loss 

the D

Dat

Clo

 o

Acqu

Receiver/A

Bank and

Bank of Choice

Greeley, CO

NM 33,194 $954,106 $818,670 $812,887 $216,810 07/22/11 Bank Midwest, N.A.

Kansas City, MO

Landmark Bank of Florida

Sarasota, FL

SM 7,972 $266,482 $244,362 $238,884 $38,542 07/22/11 American Momentum Bank

Tampa, FL

Southshore Community Bank

Apollo Beach, FL

NM 1,337 $41,252 $41,434 $42,091 $12,515 07/22/11 American Momentum Bank

Tampa, FL

BankMeridian, N.A.

Columbia, SC

N 3,650 $232,648 $209,737 $206,959 $69,114 07/29/11 SCBT National Association

Orangeburg, SC

Integra Bank, N.A.

Evansville, IN

N 140,008 $1,994,430 $1,693,592 $2,219,143 $205,874 07/29/11 Old National Bank

Evansville, IN

Virginia Business Bank

Richmond, VA

SM 581 $83,493 $72,955 $78,785 $21,523 07/29/11 Xenith Ban

Richmond, VA

Bank of Shorewood

Shorewood, IL

NM 6,681 $110,723 $104,021 $106,460 $29,692 08/05/11 Heartland Bank & 

Trust Company

Bloomington, IL

Bank of Whitman

Colfax, WA

SM 23,299 $548,570 $515,732 $498,979 $135,323 08/05/11 Columbia State Bank

Tacoma, WA

First National Bank of Olathe

Olathe, KS

N 27,367 $538,091 $524,290 $511,819 $119,472 08/12/11 Enterprise Bank & Trust

Clayton, MO

Public Savings Bank

Huntingdon Valley, PA

SB 904 $46,818 $45,770 $48,185 $14,982 08/18/11 Capital Bank, N.A.

Rockville, MD

First Choice Bank

Geneva, IL

NM 3,221 $141,016 $137,215 $131,111 $35,184 08/19/11 Inland Bank & Trust

Oak Brook, IL

First Southern National Bank

Stateboro, GA

N 8,873 $164,599 $159,673 $147,285 $43,901 08/19/11 Heritage Bank of the South

Albany, GA

Lydian Private Bank

Palm Beach, FL

SA 26,875 $1,700,117 $1,253,835 $1,277,109 $292,057 08/19/11 Sabadell United Bank, N.A.

Miami, FL

Creekside Bank

Woodstock, GA

NM 2,204 $102,338 $96,583 $98,591 $32,227 09/02/11 Georgia Commerce Bank

Atlanta, GA

Patriot Bank of Georgia

Cumming, GA

NM 2,468 $150,751 $140,612 $136,077 $48,986 09/02/11 Georgia Commerce Bank

Atlanta, GA

CONTI
2011

A N N U A L R E P O R T

143

Appe

FDIC-Insured Institutions Closed During 20

Dolars

Codes for Ba

NM = State-chartered bank that is not a member of the 

Federal Reserve System 

N = National Bank

SB = Savings Bank

SI = Stock and Mutual 

Savings Bank

SM = State-chartered bank that is a member 

of the Federal Reserve System

SA = Savings Association

Name and 

Ba

C

Numb

o

Dep

Acc

To

Ass

To

Depo

Insur

Deposit F

and

Disb

Esti

Loss 

the D

Dat

Clo

 o

Acqu

Receiver/A

Bank and

The First National Bank 

of Florida

Milton, FL

N 12,096 $296,841 $280,095 $248,052 $50,203 09/09/11 CharterBank

West Point, GA

Bank of the Commonwealth

Norfolk, VA

SM 20,383 $985,096 $901,845 $864,974 $268,111 09/23/11 Southern Bank & 

Trust Company

Mount Olive, NC

Citizens Bank of 

Northern California

Nevada City, CA

NM 16,248 $288,765 $253,079 $241,383 $41,053 09/23/11 Tri Counties Bank

Chico, CA

First International Bank

Plano, T

NM 9,148 $239,916 $208,775 $205,505 $57,644 09/30/11 American First 

National Bank

Houston, T

The RiverBank

Wyoming, MN

NM 31,327 $419,723 $384,120 $385,166 $74,971 10/07/11 Central Bank

Stillwater, MN

Sun Security Bank

Ellington, MO

NM 19,213 $351,492 $280,649 $282,436 $121,734 10/07/11 Great Southern Bank

Springfield, MO

Blue Ridge Savings 

Bank, Inc.

Asheville, NC

SB 5,503 $161,430 $159,628 $161,760 $41,985 10/14/11 Bank of North Carolina

Thomasville, NC

Country Bank

Aledo, IL

NM 6,476 $195,034 $180,835 $180,555 $67,225 10/14/11 Blackhawk Bank & Trust

Milan, IL

First State Bank

Cranford, NJ

NM 3,883 $191,852 $188,099 $190,497 $49,650 10/14/11 Northfield Bank

Staten Island, NY

Piedmont Community Bank

Gray, GA

NM 5,022 $198,993 $178,773 $177,419 $75,872 10/14/11 State Bank & 

Trust Company

Macon, GA

Community Banks 

of Colorado

Greenwood Village, CO

SM 52,119 $1,280,964 $1,239,630 $1,217,323 $227,340 10/21/11 Bank Midwest, N.A.

Kansas City, MO

Community Capital Bank

Jonesboro, GA

NM 4,032 $165,291 $157,808 $157,578 $66,293 10/21/11 State Bank & 

Trust Company

Macon, GA

Decatur First Bank

Decatur, GA

NM 8,213 $184,750 $172,042 $171,399 $36,898 10/21/11 Fidelity Bank

Atlanta, GA

CONTI
app

144

FDIC-Insured Institutions Closed During 20

Dolars

Codes for Ba

NM = State-chartered bank that is not a member of the 

Federal Reserve System 

N = National Bank

SB = Savings Bank

SI = Stock and Mutual 

Savings Bank

SM = State-chartered bank that is a member 

of the Federal Reserve System

SA = Savings Association

Name and 

Ba

C

Numb

o

Dep

Acc

To

Ass

To

Depo

Insur

Deposit F

and

Disb

Esti

Loss 

the D

Dat

Clo

 o

Acqu

Receiver/A

Bank and

Old Harbor Bank

Clearwater, FL

NM 7,506 $209,048 $212,184 $211,246 $43,507 10/21/11 1st United Bank

Boca Raton, FL

All American Bank

Des Plaines, IL

NM 1,341 $34,800 $30,542 $32,075 $11,594 10/28/11 International Bank 

of Chicago

Chicago, IL

Mid City Bank, Inc.

Omaha, NE

NM 6,638 $106,075 $105,461 $102,662 $17,390 11/04/11 Premier Bank

Purdum, NE

SunFirst Bank

Saint George, UT

NM 4,862 $198,081 $169,135 $150,980 $53,230 11/04/11 Cache Valley Bank

Logan, UT

Community Bank 

of Rockmart

Rockmart, GA

NM 2,567 $62,383 $55,906 $57,481 $18,898 11/11/11 Century Bank of Georgia

Cartersville, GA

Central Progressive Bank

Lacombe, LA

NM 26,761 $383,132 $347,720 $346,598 $61,919 11/18/11 First NBC Bank

New Orleans, LA

Polk County Bank

Johnston, IA

NM 7,112 $91,580 $81,967 $82,181 $17,339 11/18/11 Grinnell State Bank

Grinnell, IA

Premier Community Bank 

of the Emerald Coast

Crestview, FL

NM 2,782 $125,976 $112,050 $111,322 $35,512 12/16/11 Summit Bank, N.A.

Panama City, FL

Western National Bank

Phoenix, AZ

N 2,678 $162,872 $144,491 $145,903 $42,869 12/16/11 Washington Federal

Seattle, WA

Insured Deposit Transfer/Purchase & Assumption

Enterprise Banking Co.

McDonough, GA

NM 2,173 $99,461 $94,591 $106,020 $44,600 01/21/11 Federal Deposit 

Insurance Corporation

FirsTier Bank

Louisville, CO

NM 10,399 $764,090 $718,797 $768,384 $270,815 01/28/11 Federal Deposit 

Insurance Corporation

1

 Total Assets and Total Deposits data is based upon the last Call Report filed by the institution prior to failure.

2

 Estimated losses are as of 12/31/11. Estimated losses are routinely adjusted with updated information from new appraisals and asset sales, which ultimately 

affect the asset values and projected recoveries. Represents the estimated loss to the DIF from deposit insurance obligations. This amount does not include 

the estimated loss allocable to the Transaction Account Guarantee and Debt Guarantee Program claims.

CONTI
2011

A N N U A L R E P O R T

145

Appe

Recoveries and Losses by the Deposit Insurance Fund on Disbursements for the Protection of Deposito

1934 - 2011 

Dolars 

Bank and Thrift Failures1

Yea

Number

Bank

T

To

Ass

To

Depo

Insured 

Funding

O

Disburseme

Est

Addi

Recov

Est

Los

2,509 $914,003,552 $685,069,066 $561,016,616 $390,577,746 $48,373,749 $122,065,121 

2011 92 34,922,997 31,071,862 31,531,359 910,708 22,675,379 7,945,272 

20104 157 92,084,987 79,548,141 82,172,287 49,268,600 9,999,848 22,903,839 

20094 140 169,709,160 137,067,132 135,863,380 85,330,857 11,800,273 38,732,250 

20084 25 371,945,480 234,321,715 205,431,491 182,605,479 2,651,137 20,174,875 

2007 3 2,614,928 2,424,187 1,917,408 1,368,679 343,954 204,775 

2006 0 0 0 0 0 0 0 

2005 0 0 0 0 0 0 0 

2004 4 170,099 156,733 138,912 134,978 17 3,917 

2003 3 947,317 901,978 883,772 812,933 8,192 62,647 

2002 11 2,872,720 2,512,834 2,126,922 1,689,034 68,928 368,960 

2001 4 1,821,760 1,661,214 1,605,191 1,128,577 180,378 296,236 

2000 7 410,160 342,584 297,313 265,175 0 32,138 

1999 8 1,592,189 1,320,573 1,307,226 711,758 4,584 590,884 

1998 3 290,238 260,675 292,686 58,248 11,608 222,830 

1997 1 27,923 27,511 25,546 20,520 0 5,026 

1996 6 232,634 230,390 201,533 140,918 0 60,615 

1995 6 802,124 776,387 609,043 524,571 0 84,472 

1994 13 1,463,874 1,397,018 1,224,769 1,045,718 0 179,051 

1993 41 3,828,939 3,509,341 3,841,658 3,209,012 0 632,646 

1992 120 45,357,237 39,921,310 14,540,882 10,866,745 110 3,674,027 

1991 124 64,556,512 52,972,034 21,499,236 15,656,282 629,341 5,213,613 

1990 168 16,923,462 15,124,454 10,812,484 8,040,995 0 2,771,489 

1989 206 28,930,572 24,152,468 11,443,281 5,247,995 0 6,195,286 

1988 200 38,402,475 26,524,014 10,432,655 5,055,158 0 5,377,497 

1987 184 6,928,889 6,599,180 4,876,994 3,014,502 0 1,862,492 

1986 138 7,356,544 6,638,903 4,632,121 2,949,583 0 1,682,538 

1985 116 3,090,897 2,889,801 2,154,955 1,506,776 0 648,179 
app

146

Recoveries and Losses by the Deposit Insurance Fund on Disbursements for the Protection of Deposito

1934 - 2011 

Dolars 

Bank and Thrift Failures1

Yea

Number

Bank

T

To

Ass

To

Depo

Insured 

Funding

O

Disburseme

Est

Addi

Recov

Est

Los

1984 78 2,962,179 2,665,797 2,165,036 1,641,157 0 523,879 

1983 44 3,580,132 2,832,184 3,042,392 1,973,037 0 1,069,355 

1982 32 1,213,316 1,056,483 545,612 419,825 0 125,787 

1981 7 108,749 100,154 114,944 105,956 0 8,988 

1980 10 239,316 219,890 152,355 121,675 0 30,680 

1934 – 1979 558 8,615,743 5,842,119 5,133,173 4,752,295 0 380,878

CONTI
2011

A N N U A L R E P O R T

147

Appe

Recoveries and Losses by the Deposit Insurance Fund on Disbursements for the Protection of Deposito

1934 - 2011 

Dolars 

Bank and Thrift Failures1

Yea

Number

Bank

T

To

Ass

To

Depo

Insured 

Funding

O

Disburseme

Est

Addi

Recov

Est

Los

154 $3,317,099,253 $1,442,173,417 $11,630,356 $6,199,875 $0 $5,430,481 

20115 0 0 0 0 0 0 0

20105 0 0 0 0 0 0 0 

20095 8 1,917,482,183 1,090,318,282 0 0 0 0 

20085 5 1,306,041,994 280,806,966 0 0 0 0 

2007 0 0 0 0 0 0 0 

2006 0 0 0 0 0 0 0 

2005 0 0 0 0 0 0 0 

2004 0 0 0 0 0 0 0 

2003 0 0 0 0 0 0 0 

2002 0 0 0 0 0 0 0 

2001 0 0 0 0 0 0 0 

2000 0 0 0 0 0 0 0 

1999 0 0 0 0 0 0 0 

1998 0 0 0 0 0 0 0 

1997 0 0 0 0 0 0 0 

1996 0 0 0 0 0 0 0 

1995 0 0 0 0 0 0 0 

1994 0 0 0 0 0 0 0 

1993 0 0 0 0 0 0 0 

1992 2 33,831 33,117 1,486 1,236 0 250 

1991 3 78,524 75,720 6,117 3,093 0 3,024 

1990 1 14,206 14,628 4,935 2,597 0 2,338 

1989 1 4,438 6,396 2,548 252 0 2,296 

1988 80 15,493,939 11,793,702 1,730,351 189,709 0 1,540,642 

1987 19 2,478,124 2,275,642 160,877 713 0 160,164 

1986 7 712,558 585,248 158,848 65,669 0 93,179 

Assistance Transactions

CONTI
app

148

Recoveries and Losses by the Deposit Insurance Fund on Disbursements for the Protection of Deposito

1934 - 2011 

Dolars 

Bank and Thrift Failures1

Yea

Number

Bank

T

To

Ass

To

Depo

Insured 

Funding

O

Disburseme

Est

Addi

Recov

Est

Los

1985 4 5,886,381 5,580,359 765,732 406,676 0 359,056 

1984 2 40,470,332 29,088,247 5,531,179 4,414,904 0 1,116,275 

1983 4 3,611,549 3,011,406 764,690 427,007 0 337,683 

1982 10 10,509,286 9,118,382 1,729,538 686,754 0 1,042,784 

1981 3 4,838,612 3,914,268 774,055 1,265 0 772,790 

1980 1 7,953,042 5,001,755 0 0 0 0 

1934 – 1979 4 1,490,254 549,299 0 0 0 0 

1 Institutions closed by the FDIC, including deposit payoff, insured deposit transfer, and deposit assumption cases.

2 For 1990 through 2005, amounts represent the sum of BIF and SAIF failures (excluding those handled by the RTC); prior to1990, figures are only for the 

BIF. After 1995, all thrift closings became the responsibility of the FDIC and amounts are reflected in the SAIF. For 2006 to 2011, figures are for the DIF.

3 Assets and deposit data are based on the last Call Report or TFR filed before failure.

4 Includes amounts related to transaction account coverage under the Transaction Account Guarantee Program (TAG). The estimated losses as of 12/31/10 

for TAG accounts in 2010, 2009, and 2008 are $571 million, $1,639 million, and $19 million, respectively.

5 Includes institutions where assistance was provided under a systemic risk determination. Any costs that exceed the amounts estimated under the least 

cost resolution requirement would be recovered through a special assessment on all FDIC-insured institutions.

Assistance Transactions

CONTI
2011

A N N U A L R E P O R T

149

Appe

Martin J. Gruenber

Martin J. Gruenberg became the Acting Chairman of 

the FDIC upon the resignation of Chairman Sheila C. 

Bair on July 8, 2011. Mr. Gruenberg was sworn in as Vice 

Chairman of the FDIC Board of Directors on August 

22, 2005. Upon the resignation of Chairman Donald 

Powell, he also served as Acting Chairman from November 

15, 2005, to June 26, 2006. On November 2, 2007, Mr. 

Gruenberg was named Chairman of the Executive Council 

and President of the International Association of Deposit 

Insurers (IADI). 

Mr. Gruenberg joined the FDIC Board after broad 

congressional experience in the financial services and 

regulatory areas. He served as Senior Counsel to Senator 

Paul S. Sarbanes (D-MD) on the staff of the Senate 

Committee on Banking, Housing, and Urban Affairs from 

1993 to 2005. Mr. Gruenberg advised the Senator on 

issues of domestic and international financial regulation, 

monetary policy and trade. He also served as Staff 

Director of the Banking Committee’s Subcommittee 

on International Finance and Monetary Policy from 

1987 to 1992. Major legislation in which Mr. Gruenberg 

played an active role during his service on the Committee 

includes the Financial Institutions Reform, Recovery, 

and Enforcement Act of 1989 (FIRREA), the Federal 

Deposit Insurance Corporation Improvement Act of 1991 

(FDICIA), the Gramm-Leach-Bliley Act, and the SarbanesOxley Act of 2002. 

Mr. Gruenberg holds a J.D. from Case Western 

Reserve Law School and an A.B. from Princeton 

University, Woodrow Wilson School of Public and 

International Affairs. 

B. More 

FDIC Board of Directors

Seated (left to right): John Walsh, Martin J. Gruenberg, Thomas J. Curry
app

150

Thomas J. Curry

Thomas J. Curry took office on January 12, 2004, as a 

member of the Board of Directors of the Federal Deposit 

Insurance Corporation. Mr. Curry served as Chairman 

of the FDIC’s Assessment Appeals Committee and Case 

Review Committee. He also served as Chairman of the 

Audit Committee and the Supervision Appeals Review 

Committee for the latter half of 2011 and into 2012. 

Mr. Curry also serves as the Chairman of the 

NeighborWorks®America Board of Directors. 

NeighborWorks®America is a national nonprofit 

organization chartered by Congress to provide 

financial support, technical assistance, and training for 

community-based neighborhood revitalization efforts. 

Prior to joining the FDIC’s Board of Directors, Mr. 

Curry served five Massachusetts Governors as the 

Commonwealth’s Commissioner of Banks from 1990 

to 1991 and from 1995 to 2003. He served as Acting 

Commissioner from February 1994 to June 1995. He 

previously served as First Deputy Commissioner and 

Assistant General Counsel within the Massachusetts 

Division of Banks. He entered state government in 1982 

as an attorney with the Massachusetts’ Secretary of 

State’s Office.

Director Curry served as the Chairman of the Conference 

of State Bank Supervisors from 2000 to 2001. He served 

two terms on the State Liaison Committee of the Federal 

Financial Institutions Examination Council, including a 

term as Committee chairman. 

He is a graduate of Manhattan College (summa cum 

laude), where he was elected to Phi Beta Kappa. He received 

his law degree from the New England School of Law. 

John Walsh

John Walsh became Acting Comptroller of the Office of 

the Comptroller of the Currency (OCC) on August 15, 

2010. He also served on the FDIC Board of Directors 

and as a board member of NeighborWorks®America. Mr. 

Walsh joined the OCC in October 2005 and previously 

served as Chief of Staff and Public Affairs.

Prior to joining the OCC, Mr. Walsh was the Executive 

Director of the Group of Thirty, a consultative group that 

focuses on international economic and monetary affairs. 

He joined the Group in 1992, and became Executive 

Director in 1995. Mr. Walsh served on the Senate Banking 

Committee from 1986 to 1992, and as an international 

economist for the U.S. Department of the Treasury from 

1984 to 1986. Mr. Walsh also served with the Office of 

Management and Budget as an international program 

analyst, with the Mutual Broadcasting System, and in the 

U.S. Peace Corps in Ghana. 

Mr. Walsh holds a masters’ degree in public policy from 

the Kennedy School of Government, Harvard University 

(1978), and graduated magna cum laude from the 

University of Notre Dame in 1973. He lives in Catonsville, 

Maryland, and is married with four children. 

Subsequent Events Affecting the 

FDIC Board of Directors

The following events occurred after year-end 2011. On 

January 4, 2012, Richard Cordray was sworn in as the first 

Director of the Consumer Financial Protection Bureau, 

and joined the FDIC Board of Directors. On April 9, 2012, 

Thomas Curry was sworn in as the 30th Comptroller 

of the Currency, succeeding John Walsh, and remains a 

Board member. On April 16, 2012, Thomas Hoenig and 

Jeremiah Norton were sworn in as internal members of 

the Board. 
2011

A N N U A L R E P O R T

151

Appe

FDIC Organization

As of December 31,

Division of Financ

cr

Director

Division of Informatio

Technology

r

Director

Office of Enterprise 

Risk Managemen

james

Director

Division of Administration

al

Director

Office of Legislative Affairs

Director

Legal Division

mc

General Counsel

Corporate Universit

t

Chief Learning Officer 

& Director

Office of the Ombudsman

c

Ombudsman

Chief Risk Office

Stph

Office of Inspector Gener

jon

Inspector General

Office of Public Affairs

an

Director

Deputy to the Chairma

kymb

(Acting)

Office of Minority an

Women Inclusi

d

Director

Special Adviso

jesse

Deputy to the Chairman an

Chief Financial Offic

Steve

Office of Comple

Financial Institutio

ja

Director

Division of Depositor

and Consumer Protectio

ma

Director

Division of Risk

Management Supervisi

s

Director

Division of Insurance

and Research

ar

Director

Division of Resolutions 

and Receiverships

b

Director

Office of 

International Affair

f

Director

General Couns

mc

Deputy to the Chairman for

External Affairs

p

Board of Director

ma

tho

jo

Office of the Chairma

ma

Acting Chairman

Vice Chairma

ma

Deputy to the Chairman for

Resolution and Legal Policy

Chief of Sta

ba

Internal Ombudsma

joa

(Detail)

Senior Adviso

el

Chief Information Office

Chief Privacy Office

r
app

152

9,000

6,000

3,000

0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FDIC Year End Staffing 5,430 5,311 5,078 4,514 4,476 4,532 4,988 6,557 8,150 7,973

Corporate Staffing

Staffing Trends 2002-2011

Note: 2008-2011 staffing totals reflect year-end full time equivalent staff. Prior to 2008, staffing totals reflect total employees on board.
2011

A N N U A L R E P O R T

153

Appe

Number of Employees by Division/Office 2010 and 2011 (Year-

Divis

Total Washingt

2011 2010 2011 2010 2011 2010

Division of Supervision and Consumer Protection 0 3,648 0 378 0 3,270

Division of Risk Management Supervision 2,900 0 168 0 2,732 0

Division of Depositor and 

Consumer Protection

819 1 95 1 724 0

Subtotal Supervision and Consumer 

Protection Divisio

3,719 3,649 263 379 3,456 3,270

Division of Resolutions and Receiverships 1,811 2,109 139 154 1,672 1,955

Legal Division 774 805 354 352 420 453

Division of Administration 431 430 243 265 188 165

Division of Information Technology 354 328 271 245 83 83

Corporate University 176 207 163 199 13 8

Division of Insurance and Research 185 203 134 173 51 30

Division of Finance 163 165 158 165 5 0

Office of Inspector General 117 128 77 92 40 36

Office of Complex Financial Institutions 115 1 64 1 51 0

Executive Offices2 55 55 55 55 0 0

Office of the Ombudsman 29 31 12 12 17 19

Office of Minority and Women Inclusion3 30 26 30 26 0 0

Office of Enterprise Risk Management 14 13 14 13 0 0

Total 7,973 8,150 1,977 2,131 5,996 6,019

1

 The FDIC reports staffing totals using a full-time equivalent (FTE) methodology, which is based on an employee’s scheduled work hours. Division/Office 

staffing has been rounded to the nearest whole FTE.

2

 Includes the Offices of the Chairman, Vice Chairman, Director (Appointive), Chief Operating Officer, Chief Financial Officer, Chief Information Officer, 

Legislative Affairs, Public Affairs, International Affairs, Corporate Risk Management and External Affairs.

3 Previously the Office of Diversity and Economic Opportunity. 

 

 
app

154

FDIC 

www.fdic.gov

A wide range of banking, consumer and financial 

information is available on the FDIC’s website. This 

includes the FDIC’s Electronic Deposit Insurance 

Estimator (EDIE), which estimates an individual's deposit 

insurance coverage; the Institution Directory, which 

contains financial profiles of FDIC-insured institutions; 

Community Reinvestment Act evaluations and ratings for 

institutions supervised by the FDIC; Call Reports, which 

are banks’ reports of condition and income; and Money 

Smart, a training program to help individuals outside the 

financial mainstream enhance their money management 

skills and create positive banking relationships. Readers 

also can access a variety of consumer pamphlets, FDIC 

press releases, speeches, and other updates on the agency’s 

activities, as well as corporate databases and customized 

reports of FDIC and banking industry information. 

FD

Phone: 877-275-3342 (877-ASK-FD

703-562-2222 

Hearing Impaired: 

 703-562-2289 

The FDIC Call Center in Washington, DC, is the primary 

telephone point of contact for general questions from the 

banking community, the public, and FDIC employees. The 

Call Center directly, or in concert with other FDIC subjectmatter experts, responds to questions about deposit 

insurance and other consumer issues and concerns, as 

well as questions about FDIC programs and activities. The 

Call Center also refers callers to other federal and state 

agencies as needed. Hours of operation are 8:00 a.m. to 

8:00 p.m., Eastern Time, Monday – Friday, and 9:00 a.m. 

to 5:00 p.m., Saturday – Sunday. Recorded information 

about deposit insurance and other topics is available 

twenty-four hours a day at the same telephone number.

As a customer service, the FDIC Call Center has 

many bilingual Spanish agents on staff and has access 

to a translation service able to assist with over forty 

different languages.

Public In

3501 Fairfax Drive

Room E-1021

Arlington, VA 22226

Phone: 877-275-3342 (877-ASK-F

703-562-2200

Fax: 703-562-229

FDIC Onli

https://vcart.velocitypayment.com/fdic/

E-mail: publicinfo@fdic

Publications such as FDIC Quarterly, Consumer News, and a 

variety of deposit insurance and consumer pamphlets are 

available at www.fdic.gov or may be ordered in hard copy 

through the FDIC online catalog. Other information, 

press releases, speeches and congressional testimony, 

directives to financial institutions, policy manuals, and 

FDIC documents are available on request through the 

Public Information Center. Hours of operation are 9:00 

a.m. to 4:00 p.m., Eastern Time, Monday – Friday.

Office of the O

3501 Fairfax Drive

Room E-2022

Arlington, VA 22226

Phone: 877-275-3342 (877-ASK-FD

Fax: 703-562-605

E-mail: ombudsman@fdic

The Office of the Ombudsman (OO) is an independent, 

neutral, and confidential resource and liaison for the 

banking industry and the general public. The OO 

responds to inquiries about the FDIC in a fair, impartial, 

and timely manner. It researches questions and fields 

complaints from bankers and bank customers. OO 

representatives are present at all bank closings to 

provide accurate information to bank customers, the 

media, bank employees, and the general public. The OO 

also recommends ways to improve FDIC operations, 

regulations, and customer service.

Sources 
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n Atlanta Reg

10 Tenth Street, NE

Suite 800 

Atlanta, Georgia 30309

(678) 916-2200

Alabama

Florida

Georgia

North Carolina

South Carolina

Virginia

West Virginia

n Chicago Region

300 South Riverside Plaza

Suite 1700

Chicago, Illinois 60606

(312) 382-6000

Illinois 

Indiana

Kentucky

Michigan

Ohio

Wisconsin

n Dallas Regio

1601 Bryan Street

Dallas, Texas 75201

(214) 754-0098

Colorado

New Mexico

Oklahoma

Texas

n Memphis Area

5100 Poplar Avenue

Suite 1900

Memphis, Tennessee 38137

(901) 685-1603

Arkansas

Louisiana

Mississippi

Tennessee

n Kansas City Reg

1100 Walnut Street

Suite 2100

Kansas City, Missouri 64106

(816) 234-8000

Iowa

Kansas

Minnesota

Missouri

Nebraska

North Dakota

South Dakota 

Reginal and 
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n New York Regio

350 Fifth Avenue

Suite 1200

New York, New York 10118

(917) 320-2500

Delaware

District of Columbia

Maryland

New Jersey

New York

Pennsylvania

Puerto Rico

Virgin Islands

n Boston Are

15 Braintree Hill Office Park 

Suite 100

Braintree, Massachusetts 02184

(781) 794-5500

Connecticut

Maine

Massachusetts

New Hampshire

Rhode Island

Vermont

n an FrancisCo 

25 Jessie Street at Ecker Square

Suite 2300

San Francisco, California 94105

(415) 546-0160

Alaska

Arizona

California

Guam

Hawaii

Idaho

Montana

Nevada

Oregon

Utah

Washington

Wyoming
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C. Office of Ins

Assessment of 

Performance Chal

Under the Reports Consolidation Act of 2000, the 

Office of Inspector General (OIG) is required to identify 

the most significant management and performance 

challenges facing the Corporation and provide its 

assessment to the Corporation for inclusion in the FDIC’s 

annual performance and accountability report. The 

OIG conducts this assessment annually and identifies 

specific areas of challenge facing the Corporation 

at the time. In identifying the challenges, the OIG 

keeps in mind the Corporation’s overall program and 

operational responsibilities; financial industry, economic, 

and technological conditions and trends; areas of 

congressional interest and concern; relevant laws and 

regulations; the Chairman’s priorities and corresponding 

corporate goals; and the ongoing activities to address the 

issues involved. 

In looking at the recent past and the current environment 

and anticipating—to the extent possible—what the future 

holds, the OIG believes that the FDIC faces challenges 

in the areas listed below. While the Corporation will 

sustain its efforts to maintain public confidence and 

stability, particularly as it continues to implement key 

provisions and authorities of the Wall Street Reform 

and Consumer Protection Act (Dodd-Frank Act), 

challenges will persist in other areas as well. We note in 

particular that the Corporation is continuing to carry 

out a massive resolution and receivership workload and 

at the same time is assuming a new resolution authority. 

Concurrently, the FDIC faces challenges in meeting its 

deposit insurance responsibilities, supervising financial 

institutions, protecting consumers, and managing its 

workforce and other corporate resources. It is conducting 

all of these activities in a corporate environment that has 

substantially changed over the past year and one that 

remains in constant flux. 

As the FDIC and the banking industry emerge from 

the most severe crisis since the 1930s, the Corporation 

can take pride in having helped restore stability and 

confidence in the nation’s banking system. It has 

completed or sustained a number of new initiatives, 

responded to new demands, and played a key part in 

shaping bank regulation for the post-crisis period. Passage 

of the Dodd-Frank Act has presented new opportunities 

and challenges for the FDIC in its efforts to restore the 

vitality and stability of the financial system, and the 

Corporation has met these head-on. Perhaps the biggest 

uncertainty, and the backdrop against which the FDIC 

will operate going forward, is whether the U.S. economy 

can sustain current economic growth and what impact the 

outlook in Europe will have on the banking and financial 

services industry in the months ahead.

CARRYING OUT NEW RESOLUTION

Reforms under the Dodd-Frank Act involve far-reaching 

changes designed to restore market discipline, internalize 

the costs of risk-taking, protect consumers, and make 

the regulatory process more attuned to systemic risks. 

The Dodd-Frank Act created the Financial Stability 

Oversight Council (FSOC), of which the FDIC is a voting 

member. The FSOC monitors sources of systemic risk and 

promulgates rules that will be implemented by the various 

financial regulators represented on the FSOC. The DoddFrank Act also established an independent Consumer 

Financial Protection Bureau (CFPB) within the Federal 

Reserve System; abolished the Office of Thrift Supervision 

(OTS) and transferred its supervisory responsibilities for 

federal and state-chartered thrift institutions and thrift 

holding companies to the Office of the Comptroller of 

the Currency (OCC), the FDIC, and the Federal Reserve 

System, respectively; and has given the FDIC significant 

new authorities to help address the risks in systemically 

important financial companies or institutions (SIFIs). 

To carry out its most critical responsibilities under the 

Dodd-Frank Act in an effective and credible manner, 

the FDIC established its Office of Complex Financial 

Institutions (OCFI). This office continues to establish 
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itself and will face challenges during the upcoming year 

as it continues to evolve. New responsibilities for OCFI 

in connection with SIFIs include an Orderly Liquidation 

Authority to resolve bank holding companies and nonbank financial institutions, if necessary, and a requirement 

for resolution plans that will give regulators additional 

tools with which to manage the failure of large, complex 

enterprises. The FDIC’s OCFI has taken steps in three key 

areas over the past year to carry out these responsibilities—

monitoring risk within and across these large, complex 

firms from the standpoint of resolution; conducting 

resolution planning and developing strategies to respond 

to potential crisis situations; and coordinating with 

regulators overseas regarding the significant challenges 

associated with cross-border resolution. 

OCFI has also been developing its own resolution 

plans in order to be ready to resolve a failing systemic 

financial company. These internal FDIC resolution plans—

developed pursuant to the Orderly Liquidation Authority, 

provided under Title II of the Dodd-Frank Act—apply 

many of the same powers that the FDIC has long used 

to manage failed-bank receiverships to a failing SIFI. If 

the FDIC is appointed as receiver of such an institution, 

it will be required to carry out an orderly liquidation in a 

manner that maximizes the value of the company’s assets 

and ensures that creditors and shareholders appropriately 

bear any losses. The goal is to close the institution without 

putting the financial system at risk. 

According to the Acting Chairman of the FDIC, this 

internal resolution planning work is the foundation of the 

FDIC’s implementation of its new responsibilities under 

the Dodd-Frank Act. In addition, the FDIC has largely 

completed the extensive related rulemaking necessary 

to carry out its responsibilities under Dodd-Frank. 

Notwithstanding such progress, the coming months will 

be challenging for the FDIC and all of the regulatory 

agencies as they work collaboratively to reposition 

themselves to carry out the mandates of the DoddFrank Act, continuing to develop rules to implement key 

sections, and undertaking their new responsibilities as 

members of the FSOC. 

RESOLVING FAILED INSTITU

MANAGING REC

In addition to the future challenges associated with 

exercising this new resolution authority, the Corporation 

is currently dealing with a daunting resolution and 

receivership workload. As of December 31, 2011, 

approximately 415 institutions had failed during the 

crisis, with total assets at inception of $664.3 billion. 

Estimated losses resulting from the failures total 

approximately $86.3 billion. As of year-end 2011, the 

number of institutions on the FDIC’s “Problem List” was 

813, with $319.4 billion in assets, indicating the potential 

of more failures to come and corresponding challenges 

with regard to management and disposition of failed 

bank assets. 

Franchise marketing activities are at the heart of the 

FDIC’s resolution and receivership work, and as failures 

persist, continue to challenge the Corporation. The FDIC 

must determine and pursue the least costly resolution 

to the Deposit Insurance Fund (DIF) for each failing 

institution. Each failing institution is subject to the 

FDIC’s franchise marketing process, which includes 

valuation, marketing, bidding and bid evaluation, and 

sale components. The FDIC is often able to market 

institutions such that all deposits, not just insured 

deposits, are purchased by acquiring institutions, thus 

avoiding losses to uninsured depositors.

Of special note, through purchase and assumption (P&A) 

agreements with acquiring institutions, the Corporation 

has entered into 272 shared-loss agreements (SLA) 

involving about $209.4 billion in initial covered assets. 

Under these agreements, the FDIC agrees to absorb a 

portion of the loss—generally 80-95 percent—which may 

be experienced by the acquiring institution with regard to 

those assets, for a period of up to 10 years. In addition, the 

FDIC has entered into 31 structured asset sales to dispose 

of about $25.4 billion in assets. Under these arrangements, 
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the FDIC retains a participation interest in future net 

positive cash flows derived from third-party management 

of these assets. 

Other post-closing asset management activities will 

continue to require much FDIC attention. FDIC 

receiverships manage assets from failed institutions, 

mostly those that are not purchased by acquiring 

institutions through P&A agreements or involved in 

structured sales. As of year-end 2011, the FDIC was 

managing 426 receiverships holding about $28.5 billion 

in assets, mostly securities, delinquent commercial realestate and single-family loans, and participation loans. 

Post-closing asset managers are responsible for managing 

many of these assets and rely on receivership assistance 

contractors to perform day-to-day asset management 

functions. Since these loans are often sub-performing 

or nonperforming, workout and asset disposition efforts 

are intensive.

The FDIC increased its permanent resolution and 

receivership staffing and significantly increased its reliance 

on contractor and term employees to fulfill the critical 

resolution and receivership responsibilities associated 

with the ongoing FDIC interest in the assets of failed 

financial institutions. At the end of 2008, on-board 

resolution and receivership staff totaled 491, while onboard staffing as of November 30, 2011 was 1,858. As 

of year-end 2010, the dollar value of contracts awarded 

in the resolution and receivership functions accounted 

for approximately $2.4 billion of the total value of $2.6 

billion. As of December 31, 2011, the dollar value of such 

contracts awarded for 2011 totaled $1.2 billion of a total 

$1.4 billion for all contracts. 

The significant surge in failed-bank assets and associated 

contracting activities will continue to require effective and 

efficient contractor oversight management and technical 

monitoring functions. Bringing on so many contractors 

and new employees in a short period of time can strain 

existing controls and administrative resources in such 

areas as employee background checks, for example, which, 

if not timely and properly executed, can compromise the 

integrity of FDIC programs and operations. 

ENSURING AND MAINTAINING THE V

DEPOSIT INSURANCE

Federal deposit insurance remains at the heart of the 

FDIC’s commitment to maintain stability and public 

confidence in the nation’s financial system. With 

enactment of the Emergency Economic Stabilization Act 

of 2008, the limit of the basic FDIC deposit insurance 

coverage was raised temporarily from $100,000 to 

$250,000 per depositor, through December 31, 2009. 

Such coverage was subsequently extended through 

December 31, 2013, and the Dodd-Frank Act made 

permanent the increase in the coverage limit to $250,000. 

It also provided deposit insurance coverage on the entire 

balance of non-interest bearing transaction accounts at 

all insured depository institutions until December 31, 

2012. A priority and ongoing challenge for the FDIC is to 

ensure that the DIF remains viable to protect all insured 

depositors. To maintain sufficient DIF balances, the FDIC 

collects risk-based insurance premiums from insured 

institutions and invests deposit insurance funds. 

Since year-end 2007, the failure of FDIC-insured 

institutions has imposed total estimated losses of more 

than $86 billion on the DIF. The sharp increase in bank 

failures over the past several years caused the fund 

balance to become negative. The DIF balance turned 

negative in the third quarter of 2009 and hit a low of 

negative $20.9 billion in the following quarter. As the DIF 

balance declined, the FDIC adopted a statutorily required 

Restoration Plan and increased assessments to handle the 

high volume of failures and begin replenishing the fund. 

The FDIC increased assessment rates at the beginning 

of 2009. In June 2009, the FDIC imposed a special 

assessment that brought in additional funding from the 

banking industry. Further, in December 2009, to increase 

the FDIC’s liquidity, the FDIC required that the industry 

prepay almost $46 billion in assessments, representing 

over 3 years of estimated assessments. 
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160

Since the FDIC imposed these measures, the DIF balance 

has steadily improved. It increased throughout 2010 

and stood at negative $1.0 billion as of March 31, 2011. 

During the second quarter of 2011, the fund rose to a 

positive $3.9 billion. Under the Restoration Plan for the 

DIF, the FDIC has put in place assessment rates necessary 

to achieve a reserve ratio (the ratio of the fund balance to 

estimated insured deposits) of 1.35 percent by September 

30, 2020, as the Dodd-Frank Act requires. FDIC analysis 

of the past two banking crises has shown that the DIF 

reserve ratio must be 2 percent or higher in advance of a 

banking crisis to avoid high deposit insurance assessment 

rates when banking institutions are strained and least able 

to pay. Consequently, the FDIC established a 2-percent 

reserve ratio target as a critical component of its long-term 

fund management strategy.

The FDIC has also implemented the Dodd-Frank 

Act requirement to redefine the base used for deposit 

insurance assessments as average consolidated total assets 

minus average tangible equity rather than an assessment 

based on domestic deposits. The FDIC does not expect 

this change to materially affect the overall amount of 

assessment revenue that otherwise would have been 

collected. However, as Congress intended, the change in 

the assessment base will generally shift some of the overall 

assessment burden from community banks to the largest 

institutions, which rely less on domestic deposits for their 

funding than do smaller institutions. The result will be 

a sharing of the assessment burden that better reflects 

each group’s share of industry assets. The FDIC estimates 

that aggregate premiums paid by institutions with less 

than $10 billion in assets will decline by approximately 30 

percent, primarily due to the assessment base change. 

The FDIC, in cooperation with the other primary federal 

regulators, proactively identifies and evaluates the risk and 

financial condition of every insured depository institution. 

The FDIC also identifies broader economic and financial 

risk factors that affect all insured institutions. The FDIC 

is committed to providing accurate and timely bank data 

related to the financial condition of the banking industry. 

Industry-wide trends and risks are communicated to 

the financial industry, its supervisors, and policymakers 

through a variety of regularly produced publications 

and ad hoc reports. Risk-management activities include 

approving the entry of new institutions into the deposit 

insurance system, off-site risk analysis, assessment of riskbased premiums, and special insurance examinations and 

enforcement actions. In light of increasing globalization 

and the interdependence of financial and economic 

systems, the FDIC also supports the development and 

maintenance of effective deposit insurance and banking 

systems world-wide. 

Primary responsibility for identifying and managing risks 

to the DIF lies with the FDIC’s Division of Insurance and 

Research (DIR), Division of Risk Management Supervision 

(RMS), Division of Resolutions and Receiverships, and 

now OCFI. The FDIC’s new Chief Risk Officer will also 

play a key role in identifying risks, and his office will have a 

greater role to play in the months ahead. To help integrate 

the risk management process, the Board authorized the 

creation of an Enterprise Risk Committee, as a crossdivisional body to coordinate risk assessment and response 

across the Corporation. Also, a Risk Analysis Center 

monitors emerging risks and recommends responses to 

the National Risk Committee. In addition, a Financial 

Risk Committee focuses on how risks impact the DIF and 

financial reporting. Challenges going forward will include 

efficiently and effectively leveraging the risk insights of all 

involved in corporate risk management activities.

Over recent years, the consolidation of the banking 

industry resulted in fewer and fewer financial institutions 

controlling an ever-expanding percentage of the nation’s 

financial assets. The FDIC has taken a number of 

measures to strengthen its oversight of the risks to the 

insurance fund posed by the largest institutions, and 

its key programs have included the Large Insured 

Depository Institution Program, Dedicated Examiner 

Program, Shared National Credit Program, and off-site 

monitoring systems.
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Importantly, with respect to the largest institutions, and 

their risk to the DIF, Title II of the Dodd-Frank Act will 

help address the notion of “Too Big to Fail.” The largest 

institutions will be subjected to the same type of market 

discipline facing smaller institutions. Title II provides the 

FDIC authority to wind down systemically important 

bank holding companies and non-bank financial 

companies as a companion to the FDIC’s authority 

to resolve insured depository institutions. As noted 

earlier, the FDIC’s new OCFI is now playing a key role in 

overseeing these activities. 

ENSURING INSTITUTION SAFETY 

THROUGH AN EFFECTIVE EXAMIN

SUPERVISION P

The Corporation’s supervision program promotes 

the safety and soundness of FDIC-supervised insured 

depository institutions. As of year-end 2011, the FDIC 

was the primary federal regulator for approximately 4,625 

FDIC-insured, state-chartered institutions that are not 

members of the Federal Reserve Board (FRB)—generally 

referred to as “state non-member” institutions. As such, 

the FDIC is the lead federal regulator for the majority 

of community banks. The Acting Chairman has made it 

clear that one of the FDIC’s most important priorities is 

the future of community banks and the critical role they 

play in the financial system and the U.S. economy as a 

whole. The Corporation plans a number of upcoming 

initiatives to further its understanding of the challenges 

and opportunities facing community banks, including 

a conference, a study by DIR, and an assessment of both 

risk-management and compliance supervision practices to 

see if there are ways to make processes more efficient.

Historically, the Department of the Treasury (the OCC 

and the OTS) and the FRB have supervised other banks 

and thrifts, depending on the institution’s charter. The 

recent winding down of the OTS under the Dodd-Frank 

Act resulted in the transfer of supervisory responsibility 

for about 60 state-chartered savings associations to the 

FDIC, all of which are considered small and that will be 

absorbed into the FDIC’s existing supervisory program. 

About 670 federally chartered savings associations were 

transferred to the OCC. As insurer, the Corporation also 

has back-up examination authority to protect the interests 

of the DIF for about 2,800 national banks, state-chartered 

banks that are members of the FRB, and those savings 

associations now regulated by the OCC.

The examination of the institutions that it regulates is a 

critical FDIC function. Through this process, the FDIC 

assesses the adequacy of management and internal control 

systems to identify, measure, monitor, and control risks; 

and bank examiners judge the safety and soundness 

of a bank’s operations. The examination program 

employs risk-focused supervision for banks. According 

to examination policy, the objective of a risk-focused 

examination is to effectively evaluate the safety and 

soundness of the bank, including the assessment of 

risk management systems, financial condition, and 

compliance with applicable laws and regulations, while 

focusing resources on the bank’s highest risks. Part of the 

FDIC’s overall responsibility and authority to examine 

banks for safety and soundness relates to compliance 

with the Bank Secrecy Act (BSA), which requires financial 

institutions to develop and implement a BSA compliance 

program to monitor for suspicious activity and mitigate 

associated money laundering risks within the financial 

institution. This includes keeping records and filing 

reports on certain financial transactions. An institution’s 

level of risk for potential terrorist financing and money 

laundering determines the necessary scope of a Bank 

Secrecy Act examination. 

As noted earlier, the passage of the Dodd-Frank Act 

brought about significant organizational changes to 

the FDIC’s supervision program in the FDIC’s former 

Division of Supervision and Consumer Protection 

(DSC). That is, the FDIC Board of Directors approved 

the establishment of OCFI and a Division of Depositor 

and Consumer Protection. In that connection, DSC was 

renamed RMS. OCFI began its operations and is focusing 

on overseeing bank holding companies with more than 

$100 billion in assets and their corresponding insured 
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162

depository institutions. OCFI is also responsible for 

non-bank financial companies designated as systemically 

important by FSOC. OCFI and RMS will coordinate 

closely on all supervisory activities for insured state nonmember institutions that exceed $100 billion in assets, 

and RMS is responsible for the overall Large Insured 

Depository Institution program. 

As noted earlier, with the number of institutions on 

the FDIC’s “Problem List” as of December 31, 2011 at 

813, there is a potential of more failures to come and an 

additional asset disposition workload. The FDIC is the 

primary federal regulator for 533 of the 813 problem 

institutions, with total assets of $175.4 billion and $319.4 

billion, respectively. Importantly, however, during the 

second quarter of 2011, the number of institutions on the 

Problem List fell for the first time in 19 quarters—from 

888 to 865—and total assets of problem institutions 

declined during the second quarter from $397 billion to 

$372 billion. Maintaining vigilant supervisory activities 

of all institutions, including problem institutions, and 

applying lessons learned in light of the recent crisis will be 

critical to ensuring stability and continued confidence in 

the financial system going forward.

PROTECTING AND EDUCATING CONS

ENSURING AN EFFECTIVE COMPL

The FDIC serves a number of key roles in the financial 

system and among the most important is its work 

in ensuring that banks serve their communities and 

treat consumers fairly. The FDIC carries out its role 

by providing consumers with access to information 

about their rights and disclosures that are required by 

federal laws and regulations and examining the banks 

where the FDIC is the primary federal regulator to 

determine the institutions’ compliance with laws and 

regulations governing consumer protection, fair lending, 

and community investment. As a means of remaining 

responsive to consumers, the FDIC’s Consumer Response 

Center investigates consumer complaints about FDICsupervised institutions and responds to consumer 

inquiries about consumer laws and regulations and 

banking practices. 

Currently and going forward, the FDIC will be 

experiencing and implementing changes related to the 

Dodd-Frank Act that have direct bearing on consumer 

protections. As noted earlier, the Dodd-Frank Act 

established the new Consumer Financial Protection 

Bureau within the FRB and transferred to this bureau 

the FDIC’s examination and enforcement responsibilities 

over most federal consumer financial laws for insured 

depository institutions with over $10 billion in assets and 

their insured depository institution affiliates. Also during 

early 2011, the FDIC established its new Division of 

Depositor and Consumer Protection, responsible for the 

Corporation’s compliance examination and enforcement 

program as well as the depositor protection and consumer 

and community affairs activities supporting that 

program. These entities will face mutual challenges, and 

coordination will be critical. 

Historically, turmoil in the credit and mortgage markets 

has presented regulators, policymakers, and the financial 

services industry with serious challenges. Many of these 

challenges persist, even as the economy shows signs of 

improvement. The FDIC has been committed to working 

with the Congress and others to ensure that the banking 

system remains sound and that the broader financial 

system is positioned to meet the credit needs of the 

economy, especially the needs of creditworthy households 

that may experience distress. Another important focus 

is financial literacy. The FDIC has promoted expanded 

opportunities for the underserved banking population 

in the United States to enter and better understand the 

financial mainstream. Economic inclusion continues 

to be a priority for the FDIC. A challenge articulated 

by the Acting Chairman as he looks to the future is to 

increase access to financial services for the unbanked and 

underbanked in the United States. 

Consumers today are also concerned about data security 

and financial privacy. Banks are increasingly using third-
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party servicers to provide support for core information 

and transaction processing functions. The FDIC must 

continue to ensure that financial institutions protect 

the privacy and security of information about customers 

under applicable U.S. laws and regulations. 

EFFECTIVELY MANAGING THE FD

OTHER CORPORATE RESO

The FDIC must effectively and economically manage 

and utilize a number of critical strategic resources 

and implement effective controls in order to carry 

out its mission successfully, particularly with respect 

to its human, financial, information technology (IT), 

and physical resources. These resources have been 

stretched during the past years of the recent crisis, and 

the Corporation will continue to face challenges as it 

seeks to return to a steadier state of operations. New 

responsibilities, reorganizations, and changes in senior 

leadership and in the makeup of the FDIC Board will 

continue to impact the FDIC workforce in the months 

ahead. Promoting sound governance and effective 

stewardship of its core business processes and human and 

physical resources will be key to the Corporation’s success. 

Of particular note, in response to the crisis, FDIC staffing 

levels increased dramatically. The Board approved an 

authorized 2011 staffing level of 9,252 employees, up 

about 2.5 percent from the 2010 authorization of 9,029. 

On a net basis, all of the new positions were temporary, 

as were 39 percent of the total 9,252 authorized positions 

for 2011. Temporary employees were hired by the FDIC 

to assist with bank closings, management and sale of 

failed bank assets, and other activities that were expected 

to diminish substantially as the industry returns to more 

stable conditions. To that end, the FDIC opened three 

temporary satellite offices (East Coast, West Coast, and 

Midwest) for resolving failed financial institutions and 

managing the resulting receiverships. The FDIC closed the 

West Coast Office in January 2012 and plans to close the 

Midwest Office in September 2012.

The Corporation’s contracting level has also grown 

significantly, especially with respect to resolution and 

receivership work. Contract awards in DRR totaled $2.4 

billion during 2010 and as of December 2011 totaled 

$1.2 billion. To support the increases in FDIC staff and 

contractor resources, the Board of Directors approved a 

$4.0 billion Corporate Operating Budget for 2011, down 

slightly from the 2010 budget the Board approved in 

December 2009. For 2012, the approved corporate budget 

was further reduced to $3.28 billion to support 8,704 

staff. The FDIC’s operating expenses are paid from the 

DIF, and consistent with sound corporate governance 

principles, the Corporation’s financial management 

efforts must continuously seek to be efficient and costconscious, particularly in a government-wide environment 

that is facing severe budgetary constraints. 

Opening new offices, rapidly hiring and training many 

new employees, expanding contracting activity, and 

training those with contract oversight responsibilities 

placed heavy demands on the Corporation’s personnel 

and administrative staff and operations. Now, as 

conditions seem a bit improved throughout the industry 

and the economy, a number of employees will be 

released—as is the case in the two temporary satellite 

offices referenced earlier─ and staffing levels will move 

closer to a pre-crisis level, which may cause additional 

disruption to ongoing operations and introduce new risks 

to current workplaces and working environments. Among 

other challenges, pre- and post-employment checks for 

employees and contractors will need to ensure the highest 

standards of ethical conduct, and for all employees, 

in light of a transitioning workplace, the Corporation 

will seek to sustain its emphasis on fostering employee 

engagement and morale. 

From an IT perspective, amidst the heightened activity 

in the industry and economy, the FDIC is engaging in 

massive amounts of information sharing, both internally 

and with external partners. This is also true with respect 

to sharing of highly sensitive information with other 

members of the newly formed FSOC and with the Council 
app

164

itself. FDIC systems contain voluminous amounts 

of critical data. The Corporation needs to ensure the 

integrity, availability, and appropriate confidentiality 

of bank data, personally identifiable information (PII), 

and other sensitive information in an environment of 

increasingly sophisticated security threats and global 

connectivity. Continued attention to ensuring the physical 

security of all FDIC resources is also a priority. The FDIC 

needs to be sure that its emergency response plans provide 

for the safety and physical security of its personnel and 

ensure that its business continuity planning and disaster 

recovery capability keep critical business functions 

operational during any emergency. 

The FDIC is led by a five-member Board of Directors, all of 

whom are to be appointed by the President and confirmed 

by the Senate, with no more than three being from the 

same political party. For much of the past year, the FDIC 

had in place three internal directors—the Chairman, Vice 

Chairman, and one independent Director—and two ex 

officio directors, the Comptroller of the Currency and the 

Director of OTS. With the passage of the Dodd-Frank Act, 

the OTS no longer exists, and the Director of OTS has 

been replaced on the FDIC Board by the Director of the 

Consumer Financial Protection Bureau, Richard Cordray. 

Former FDIC Chairman Sheila Bair left the Corporation 

when her term expired—in early July 2011. Vice Chairman 

Martin Gruenberg was serving as Acting Chairman as of 

the end of 2011, and had been nominated by the President 

to serve as Chairman. In March 2012, the Senate extended 

the Board term for Acting Chairman Gruenberg but did 

not vote on his nomination to be Chairman. The internal 

Director, Thomas Curry, nominated by the President to 

serve as Comptroller of the Currency, was confirmed as 

Comptroller in late March 2012 and currently occupies 

that position. Thomas Hoenig, nominated by the 

President to serve as Vice Chairman of the FDIC, was 

confirmed as a Board member in March 2012 and was 

sworn in, though not as Vice Chairman, in April 2012. 

Finally, Jeremiah Norton was confirmed by the Senate in 

March 2012 and sworn in as Board Member in April 2012. 

The Board is now at its full five-member capacity for the 

first time since July 2011. Given the relatively frequent 

turnover on the Board and the new configuration of the 

current Board, it is essential that strong and sustainable 

governance and communication processes be in place 

throughout the FDIC. Board members, in particular, need 

to possess and share the information needed at all times 

to understand existing and emerging risks and to make 

sound policy and management decisions. 

Beyond the Board level, enterprise risk management is a 

key component of governance at the FDIC. The FDIC’s 

numerous enterprise risk management activities need to 

consistently identify, analyze, and mitigate operational 

risks on an integrated, corporate-wide basis. Additionally, 

such risks need to be communicated throughout the 

Corporation, and the relationship between internal and 

external risks and related risk mitigation activities should 

be understood by all involved. In that context, the new 

Office of Corporate Risk Management led by the FDIC’s 

first Chief Risk Officer will assess external and internal 

risks faced by the FDIC and will report to the FDIC 

Chairman and periodically report back to the FDIC Board 

an important organizational change that should serve the 

best interests of the Corporation. 
2011

Federal Deposit Insurance Corporation

This Annual Report was produced by talented and 

dedicated staff. To these individuals, we would 

like to offer our sincere thanks and appreciation. 

Special recognition is given to the following 

individuals for their contributions.

★ Jannie F. Eaddy

★ Barbara Glasby

★ Robert Nolan

★ Patricia Hughes

★ Financial Reporting Unit
F E D E R A L D E P O S I T I N S U R A N C E C O R P O R A T I O N

550 17th Street, NW

Washington, DC 20429-9990

FDIC-003-2012

www.FDIC.GOV