Federal Deposit Insurance Corporation 

550 17th Street, N.W., Washington, D.C. 20429-9990 Deputy to the Chairman and CFO

 

 November 3, 2011 

MEMORANDUM TO: The Board of Directors 

FROM: Steven O. App 

Deputy to the Chairman and 

Chief Financial Officer 

Craig Jarvill 

Director, Division of Finance 

SUBJECT: Third Quarter 2011 CFO Report to the Board 

The attached report highlights the Corporation’s financial activities and results for the quarter ended 

September 30, 2011. 

Executive Summary

 During the third quarter of 2011, the Deposit Insurance Fund (DIF) balance increased by $3.9 

billion, from $3.9 billion to $7.8 billion. This quarterly increase was primarily due to $3.6 billion 

in assessment revenue and a $763 million decrease in the provision for insurance losses, 

partially offset by $433 million in operating expenses. Since the beginning of 2010, the fund 

balance has increased for seven consecutive quarters a total of $28.7 billion. 

 During the third quarter of 2011, the FDIC was named receiver for 26 failed institutions. The 

combined assets at inception for these institutions totaled approximately $12.0 billion with a 

total estimated loss of $2.5 billion. The corporate cash outlay during the third quarter for these 

failures was approximately $2.1 billion. 

 

 Through September 30, 2011, overall Corporate Operating Budget expenditures were below 

budget by 24 percent ($659 million). This variance was primarily the result of lower-thanbudgeted spending in the Receivership Funding component for contractual services and 

operations at the site of failed financial institutions. 

 
2

I. Corporate Fund Financial Results (See pages 8-9 for detailed data and charts.) 

Deposit Insurance Fund (DIF) 

 For the nine months ended September 30, 2011, the DIF’s comprehensive income totaled 

$15.2 billion compared to comprehensive income of $12.9 billion for the same period last year. 

This $2.3 billion year-over-year increase was primarily due to a $2.7 billion decrease in the 

provision for insurance losses and a $177 million increase in assessments earned, partially 

offset by a $471 million unrealized loss on trust preferred securities, and a $150 million 

increase in operating expenses. 

 The provision for insurance losses was negative $5.9 billion for the nine months ended 

September 30, 2011. The negative provision 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 prior year failures 

where recent liquidation activity yielded recoveries higher than previously estimated. 

Assessments 

 During the third quarter 2011, the DIF recognized $3.6 billion in assessment revenue. For 

third quarter 2011 insurance coverage, $3.2 billion was recognized for those institutions that 

prepaid assessments, and $231 million was recorded as a receivable from those institutions 

that did not prepay assessments. An additional $226 million in assessment revenue was 

recognized for the difference between the actual amount of assessments for second quarter 

2011 coverage versus the estimated amount that was recognized at June 30, 2011. 

 

Quarterly Assessments Premiums

(based on insurance coverage period)

$3,262 $3,302$3,461 $3,397 $3,432 $3,450 $3,404 $3,411

$8,622

$2,593

$1,087

$3,196

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

$ in Millions

 On September 30, 2011, the FDIC collected $198 million in DIF assessments for second 

quarter 2011 insurance coverage. Through the third quarter 2011, the DIF has recognized 

$10.3 billion in assessment revenue. DIF Unearned Revenue (remaining prepaid 

assessments) totals $20.4 billion at September 30, 2011. 

 Effective April 1, 2011, the FDIC redefined the assessment base used for calculating deposit 

insurance assessments from estimated insured deposits (adjusted domestic deposits) to 

average consolidated total assets minus average tangible equity (measured as Tier 1 capital). 

Estimated

Includes $5.5 billion 

Special Assessment 
3

The assessment collection made on September 30, 2011, was based on the revised 

calculation. 

II. Investment Results (See pages 10-11 for detailed data and charts.)

DIF Investment Portfolio 

 The total liquidity (total market value including accrued interest) of all DIF-related investment 

portfolios stood at $42.9 billion on September 30, 2011, down from $46.2 billion on December 

31, 2010, led by the decline in the DIF investment portfolio as discussed below. 

 

Total DIF - Related Investment Portfolio Liquidity (End-of-Quarter)

$31.7 $29.7

$53.1 $55.1 $53.2

$33.9 $33.0

$66.1 $63.3

$23.4

$44.0 $43.7

$46.2 $45.5

$43.0 $45.0

$0

$10

$20

$30

$40

$50

$60

$70

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

$ in Billions

 The DIF investment portfolio’s total market value decreased by $4.0 billion during the first nine 

months of 2011, and totaled $35.6 billion on September 30, 2011. The decrease was primarily 

the result of having to fund 74 bank failures during the first nine months of 2011. However, it 

should be noted that 48 of these failures were resolved as cash-conserving shared-loss 

transactions, requiring substantially lower initial resolution payments, thus helping to mitigate 

the decline in the DIF portfolio’s balance. Moreover, during the first nine months of 2011, the 

DIF received $7.4 billion in dividends and other payments from its receiverships, thus 

mitigating the DIF portfolio’s decline. 

 On September 30, 2011, the DIF investment portfolio’s yield was 0.38 percent, down 2 basis 

points from its December 31, 2011, yield of 0.40 percent. The DIF investment portfolio’s total 

return for the year-to-date period was 29 basis points, about 569 basis points less than the 

5.97 percent total return of its benchmark, the Merrill Lynch 1–10 Year Treasury Index (Index). 

Given that most longer-maturity Treasury yields decreased (that is, Treasury security prices 

rose) during the first nine months of the year, the DIF portfolio’s large balances of 

comparatively low yielding overnight investments and short-term Treasury bills and notes 

could not keep pace with the rise in Treasury prices, hence the underperformance compared 

to the Index (on average, the Index has longer-duration conventional Treasury securities).

Other Corporate Investment Portfolios 

 On September 30, 2011, the Debt Guarantee Program (DGP) investment portfolio stood at 

about $7.4 billion (total market value), up from its December 31, 2010, balance of $6.6 billion. 
4

This increase was principally due to the net transfer of just over $700 million from the DIF 

portfolio to the DGP portfolio (year-to-date), reversing payments made by the DGP to the DIF 

for Transaction Account Guarantee Program claims. At quarter end, the DGP portfolio had a 

yield to maturity of 0.21 percent and a weighted average maturity (WAM) of 0.37 years. In 

accordance with the approved third quarter 2011 investment strategy for the DGP portfolio, 

staff purchased two short-maturity Treasury securities during the third quarter of 2011. The 

securities had a total par value of $600 million, a weighted average yield of 0.20 percent, and 

a WAM of 0.75 years. 

 

III. Budget Results (See pages 12-14 for detailed data.) 

Approved Budget Modifications 

The 2011 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other 

officials the authority to make certain modifications to the 2011 Corporate Operating Budget. 

In accordance with the authority delegated by the Board of Directors, the CFO in July 2011 

approved the reallocation of existing budget authority within the Ongoing Operations and 

Receivership Funding components of the 2011 Corporate Operating Budget following the midyear reassessment of actual and projected spending and the second quarter analysis of 

spending for salaries, bonuses, and fringe benefits. The budgets for all major expense 

categories and most divisions and offices were adjusted. As a result of these adjustments, the 

Corporate Unassigned contingency reserve was reduced by $15 million, to $2 million, in the 

Ongoing Operations component and increased by $94 million, to $111 million in the 

Receivership Funding component. None of these modifications changed the total 2011 

Corporate Operating Budget as approved by the Board in December 2010 (and amended by 

the Board in January 2011). 

Approved Staffing Modifications 

The 2011 Budget Resolution delegated to the CFO the authority to modify approved 2011 

staffing authorizations for divisions and offices, as long as those modifications did not increase 

the total approved 2011 Corporate Operating Budget. Changes approved by the CFO in 

accordance with the authority delegated to him by the Board of Directors are shown on page 

12. 

Spending Variances 

Significant spending variances by major expense category and division/office are discussed 

below. Significant spending variances for the nine months ending September 30, 2011, are 

defined as those that either (1) exceed the YTD budget by $1 million and represent more than 

2 percent of a major expense category or total division/office budget; or (2) are under the YTD 

budget for a major expense category or division/office by an amount that exceeds $2 million 

and represents more than 4 percent of the major expense category or total division/office 

budget. 

Significant Spending Variances by Major Expense Category 

Ongoing Operations

There were significant spending variances in four of the seven major expense categories in 

the Ongoing Operations component of the 2011 Corporate Operating Budget through the third 

quarter. 
5

 Outside Services – Personnel expenditures were $33 million, or 17 percent, less than 

budgeted. The Office of Complex Financial Institutions (CFI) spent $8 million less than 

budgeted, which was largely due to delays in defining contract requirements while CFI 

focused on filling its authorized FDIC positions. The Division of Resolutions and 

Receiverships (DRR) spent $6 million less than budgeted which was due to lower than 

anticipated expenses for business process improvements, financial advisory services for a 

recovery and resolution project, and miscellaneous web, IT, and data management 

projects. In addition, funds originally anticipated for an internal review will not be used. 

Also, $5 million budgeted in September for reimbursement to the Department of Justice 

(DOJ) for goodwill litigation expenses was not used; DOJ has determined that it will not 

require additional funding in FY 2011. The Division of Information Technology (DIT) spent 

$4 million less than budgeted, which was largely due to contractor staff not being brought 

on-board as quickly as anticipated. 

 Equipment expenditures were approximately $6 million, or 9 percent, less than budgeted. 

DIT spent $4 less than budgeted primarily due to delays in software procurements. The 

variance will diminish once invoices for these contracts are received and paid. In addition, 

the Division of Administration (DOA) spent $2 million less than budgeted which was due to 

lower-than-anticipated online library information services; postponement of equipment 

purchases for the disaster recovery site in Richmond; and delays in purchasing furniture, 

fixture and equipment (FF&E) until later in the year. 

 Outside Services – Other expenditures were approximately $6 million, or 33 percent, less 

than budgeted. The Office of Public Affairs (OPA) spent $3 million less than budgeted, 

which was largely due to a decision to redirect the office’s attention from the overdraft 

awareness campaign to newer initiatives such as the unbanked/underbanked survey and 

resolution authority for systemically important financial institutions. DOA spent $3 million 

less than budgeted because of lower than expected mail-related services, significant 

savings from extending the performance period for the express mail services contract, and 

lower negotiated insurance rates. 

 Other Expenses were $4 million, or 27 percent, less than budgeted. The variance was 

mostly due to significant underutilization of the Professional Learning Accounts by 

employees in order to focus on meeting their ongoing workload priorities. 

Receivership Funding

The Receivership Funding component of the 2011 Corporate Operating Budget includes 

funding for expenses that are incurred in conjunction with institution failures and the 

management and disposition of the assets and liabilities of the ensuing receiverships, except 

for salary and benefits and related expenses for permanent employees assigned to the 

receivership management function. 

There were significant spending variances in all major expense categories through the third 

quarter in the Receivership Funding component of the 2011 Corporate Operating Budget: 

 Salaries and Compensation ($20 million, or 8 percent, less than budgeted). 

 Outside Services-Personnel ($358 million, or 37 percent, less than budgeted). 

 Travel ($13 million, or 34 percent, less than budgeted). 

 Buildings ($101 million, or 59 percent, less than budgeted). 
6

 Equipment ($5 million, or 36 percent, less than budgeted). 

 Outside Services-Other ($11 million, or 55 percent, less than budgeted). 

 Other Expenses ($79 million, or 64 percent, less than budgeted). 

All of these variances were attributable to the fact that there were fewer insured institution 

failures during the first nine months of the year than anticipated when the 2011 Receivership 

Funding budget was developed. 

Significant Spending Variances by Division/Office1

Ten organizations had significant spending variances through the end of the third quarter: 

 DRR spent $571 million, or 40 percent, less than budgeted, which was mostly due to lessthan-budgeted spending for resolution and receivership activities, as explained above. 

 DOA spent $17 million, or 8 percent, less than budgeted. This variance was largely 

attributable to fewer-than-expected bank closings and the smaller average size of the 

failing banks; a decrease in background investigations resulting from reduced on-site 

contract staff; a decrease in records management services; reduced mail costs which was 

due to lower than expected mail related services; significant savings from extending the 

performance period for the express mail services; significant savings from lower negotiated 

insurance rates; and lower than budgeted expenses for online library information services. 

 DIT spent $16 million, or 8 percent, less than budgeted. This variance was largely 

attributable to lower support for failed financial institutions and delays in planned software 

procurements by DIT. 

 The Legal Division spent $12, or 5 percent, less than budgeted. This variance included 

approximately $8 million in under spending for Salaries & Compensation ($3 million in 

Ongoing Operations and $5 million in Receivership Funding) due to attrition and slowerthan-projected hiring to fill budgeted positions. 

 CFI spent $9 million, or 36 percent, less than budgeted. This variance was attributable to 

lower-than-budgeted spending for contract services, as explained above. 

 

 The Corporation’s Executive Support Offices spent approximately $7 million, or 25 percent, 

less than budgeted. This variance was mostly attributable to lower-than-budgeted 

expenses in OPA for the overdraft awareness campaign, as explained above. 

 The OIG spent $63 million, or 22 percent, less than budgeted, because it has been 

operating under a continuing resolution since the fourth quarter of last year, which 

precluded the OIG from filling vacant positions and executing certain procurement actions 

as originally planned. 

 None of the $5 million budgeted for Government litigation was spent, because DOJ 

determined that it had sufficient FDIC funds remaining from FY 2011 to pay for all 

projected FY 2012 expenses associated with defensive goodwill litigation. 

 

1

 Information on division/office variances reflects variances in both the Corporate Operating and Investment Budgets. 
7

 The Executive Offices spent $3 million, or 44 percent, less than budgeted. This variance 

included approximately $2 million in under spending for Outside Services-Personnel due to 

the fact that we had not yet been billed by GAO for 2010 audit work. 

 The Division of Finance (DOF) spent $3 million, or 11 percent, less than budgeted. This 

variance was attributable to lower than expected requirements for contractor services for 

temporary DOF accounting and auditing work. 
Primary Contributors to the Change in the Fund Balance

$3,163 $3,642

$3,592 $3,498 $3,484

$763

$2,095

$3,763

($2,446)

$3,089

$7,238

$6,329

$4,939

$3,897

$657

($4,000)

($2,000)

$0

$2,000

$4,000

$6,000

$8,000

3Q10 4Q10 1Q11 2Q11 3Q11

$ in Millions

Assessments Provision for Losses Change in Fund Balance

FDIC CFO REPORT TO THE BOARD – Third Quarter 2011

Fund Financial Results ($ in Millions) 

8

Actual Fund Balance $(8,009) $(7,352) $(1,023) $3,916 $7,813

Balance Sheet

Quarterly Year-Over-Year

Sep-11 Jun-11 Change Sep-10 Change

Cash and cash equivalents 9,929 $ 16,631 $ (6,702) $ 22,701 $ (12,772) $ 

Cash and investments - restricted - systemic risk 7,393 7,363 30 6,158 1,235 

Investment in U.S. Treasury obligations, net 25,370 20,820 4,550 14,727 10,643 

Trust preferred securities 2,179 2,346 (167) 2,315 (136) 

Assessments receivable, net 231 205 26 248 (17) 

Receivables and other assets - systemic risk 1,834 1,901 (67) 3,007 (1,173) 

Interest receivable on investments and other assets, net 320 279 41 163 157 

Receivables from resolutions, net 29,316 29,126 190 49,684 (20,368) 

Property and equipment, net 401 405 (4) 386 15 

Total Assets $ 79,076 76,973 $ (2,103) $ 99,389 $ (22,416) $ 

Accounts payable and other liabilities 369 382 (13) 369 - 

Unearned revenue - prepaid assessments 20,360 23,787 (3,427) 33,370 (13,010) 

Liabilities due to resolutions 31,492 30,912 580 42,796 (11,304) 

Deferred revenue - systemic risk 9,101 9,131 (30) 8,729 372 

Postretirement benefit liability 166 166 - 145 21 

Contingent liability for anticipated failures 7,247 10,349 (3,102) 21,267 (14,020) 

Contingent and actual liability for systemic risk 125 133 (8) 422 (297) 

Contingent liability for litigation losses 300 300 - 300 - 

Total Liabilities $ 75,160 69,160 $ (6,000) $ 107,398 $ (38,238) $ 

FYI: Unrealized gain (loss) on U.S. Treasury investments, net 41 62 (21) 40 1 

FYI: Unrealized gain (loss) on trust preferred securities 218 385 (167) 353 (135) 

FYI: Unrealized postretirement benefit (loss) gain (19) (19) - (3) (16) 

Fund Balance $ 3,916 7,813 $ 3,897 $ (8,009) $ 15,822 $ 

Deposit Insurance Fund
9

Fund Financial Results - continued ($ in Millions) 

• For the past five quarters, 

the DIF's liquidity decreased by 

$0.9 B (cash inflows of $18.2 B

less cash outflows of $19.1 B). 

• Cash inflows consist of gross

dividends, interest revenue,

and assessments. Cash

outflows consist of resolution

related outlays and operating

expenses.

• On average resolution related

outlays comprised 89% of all

DIF cash outflows. These

outlays include initial wires to

acquirers, initial wire payments

to receiverships, payoffs of

brokered deposits, shared loss 

payments to receiverships, and 

deposit payouts.

Quarterly DIF Cash Flows 

($2,727)

($4,221)

($2,914)

($4,133)

$5,282 $4,726

$3,574

$2,477 $2,093

($5,069) -$6,000

-$4,000

-$2,000

$0

$2,000

$4,000

$6,000

$8,000

3Q10 4Q10 1Q11 2Q11 3Q11

$ in Millions

Cash Inflow s Cash Outflow s Net Cash Flow

Income Statement (year-to-date)

Quarterly Year-Over-Year

Sep-11 Jun-11 Change Sep-10 Change

Assessments earned 10,289 $ 6,647 $ 3,642 $ 10,112 $ 177 $ 

Systemic risk revenue (35) (25) (10) (418) 383 

Interest on U.S. Treasury obligations 95 65 30 166 (71) 

Other revenue 232 147 85 173 59 

Total Revenue $ 6,834 10,581 $ 3,747 $ 10,033 $ 548 $ 

Operating expenses 1,291 858 433 1,141 150 

Systemic risk expenses (35) (25) (10) (418) 383 

Provision for insurance losses (5,947) (5,184) (763) (3,294) (2,653) 

Insurance and other expenses 3 1 2 2 1 

Total Expenses and Losses $ (4,350) (4,688) $ (338) $ (2,569) $ (2,119) $ 

Net Income (Loss) 11,184 15,269 4,085 12,602 2,667 

Unrealized gain (loss) on U.S. Treasury investments, net 14 35 (21) (102) 116 

Unrealized gain (loss) on trust preferred securities (118) 49 (167) 353 (471) 

Unrealized postretirement benefit gain (loss) - - - - - 

Comprehensive Income (Loss) $ 11,268 15,165 $ 3,897 $ 12,853 $ 2,312 $ 

Deposit Insurance Fund

Selected Financial Data

Quarterly Year-Over-Year

Sep-11 Jun-11 Change Sep-10 Change

Cash and cash equivalents 3,528 $ 3,525 $ 3 $ 3,541 $ (13) $ 

Accumulated deficit (124,275) (124,278) 3 (124,288) 13 

Total resolution equity 3,551 3,548 3 3,560 (9) 

Total revenue 6 3 3 11 (5) 

Operating expenses 3 2 1 3 - 

Goodwill litigation expenses 33 33 - 2 31 

Payment/Recovery of tax benefits 26 26 - (58) 84 

Net Income (Loss) gain (51) $ (54) $ 3 $ 60 $ (111) $ 

FSLIC Resolution Fund

 Receivership Selected Statistics September 2011 vs. September 2010

Sep-11 Sep-10 Change Sep-11 Sep-10 Change Sep-11 Sep-10 Change

Total Receiverships 409 306 103 7 8 (1) 416 314 102 

Assets in Liquidation 22,379 $ 34,882 $ (12,503) $ 22 $ 28 $ (6) $ 22,401 $ 34,910 $ (12,509) $ 

YTD Collections 9,869 $ 15,821 $ (5,952) $ 8 $ 13 $ (5) $ 9,877 $ 15,834 $ (5,957) $ 

YTD Dividend/Other Pymts - Cash 7,389 $ 8,597 $ (1,208) $ - $ - $ - $ 7,389 $ 8,597 $ (1,208) $ 

DIF FRF ALL FUNDS
10

9/30/11 12/31/10 Change

Par Value $34,925 $39,430 ($4,505)

Amortized Cost $35,356 $39,483 ($4,127)

Total Market Value (including accrued interest) $35,554 $39,550 ($3,996)

Primary Reserve 1 $35,554 $39,550 ($3,996)

Primary Reserve % of Total Portfolio 100.0% 100.0% 0.0%

Year-to-Date Total Return (Portfolio) 0.286% 0.196% not applicable

Year-to-Date Total Return (Benchmark) 2 5.972% 5.219% not applicable

Total Return Variance (in basis points) (568.6) (502.3) not applicable

Yield-to-Maturity 3 0.38% 0.40% (0.02%)

Weighted Average Maturity (in years) 0.58 0.16 0.42

Effective Duration (in years) 4 

 Total Portfolio 0.55 0.15 0.40

 Available-for-Sale Securities 0.77 0.46 0.31

 Held-to-Maturity Securities 5 not applicable not applicable not applicable

9/30/11 12/31/10 Change

Debt Guarantee Program

 Par Value $7,301 $6,630 $671

 Book Value $7,359 $6,646 $713

 Total Market Value (including accrued interest) $7,393 $6,647 $746

 Yield-to-Maturity 0.21% 0.10% 0.11%

 Weighted Average Maturity (in years) 0.37 0.14 0.23

FRF-FSLIC

 Book Value 6 $3,374 $3,397 ($23)

 Yield-to-Maturity 0.00% 0.05% (0.05%)

 Weighted Average Maturity overnight overnight no change

9/30/11 12/31/10 Change

Book Value 7 $17,214 $17,506 (292)

Effective Annual Yield 0.10% 0.13% (0.03%)

Weighted Average Maturity (in days) 18 6 12

3

 The Yield-to-Maturity includes the potential yield of Treasury Inflation-Protected Securities (TIPS), which presently 

assumes an average 1.8% annual increase in the CPI over the remaining life of each TIPS. 4

 For each TIPS, an estimated 80 percent "yield beta" factor is applied to its real yield duration to arrive at an estimated 

effective duration.

Deposit Insurance Fund Portfolio Summary

(Dollar Values in Millions)

1

 Primary Reserve is the total market value (including accrued interest) of overnight investments, available-for-sale 

securities, and held-to-maturity securities maturing within three months. 2

 The benchmark is the total return of the Merrill Lynch 1-10 Year U.S. Treasury Index.

National Liquidation Fund (NLF) Investment Portfolio Summary

(Dollar Values in Millions)

5

 In early August 2008, management reclassified all of the DIF portfolio's HTM securities as AFS securities effective as 

of June 30, 2008, because the FDIC could no longer assert it had the positive intent and ability to hold its HTM securities 

until their maturity dates.

7

 Due to the short-term nature of the NLF, the portfolio's book and market values are identical for reporting purposes.

Summary of Other Corporate Investment Portfolios

(Dollar Values in Millions)

6

 Due to the current short-term nature of this portfolio, its respective par, book, and market values are identical for 

reporting purposes.
11

Deposit Insurance Fund

Purchase up to $15 billion (par value) of available-for-sale (AFS) securities with maturity dates 

between December 31, 2011, and June 30, 2014, subject to the following additional 

restrictions: no more than $10 billion (par value) of such securities shall have maturity dates 

beyond June 30, 2012; and no more than $5 billion (par value) of such securities shall have 

maturity dates beyond June 30, 2013; and no more than $5 billion of such securities shall 

consist of Treasury Inflation-Protected Securities.

Purchase up to $12 billion (par value) of available-for-sale (AFS) securities with maturity dates 

between March 31, 2012, and September 30, 2014, subject to the following additional 

restrictions: no more than $8 billion (par value) of such securities shall have maturity dates 

beyond September 30, 2012; and no more than $4 billion (par value) of such securities shall 

have maturity dates beyond September 30, 2013; and no more than $6 billion of such 

securities shall consist of Treasury Inflation-Protected Securities.

Debt Guarantee Program

Purchase up to $2 billion (par value) of AFS securities with maturity dates between December 

31, 2011, and June 30, 2014.

Purchase up to $3 billion (par value) of AFS securities with maturity dates between March 31, 

2012, and September 30, 2014.

National Liquidation Fund

Maintain an overnight deposit target floor balance within a range of $100 million to $300 

million. Strategically invest the remaining funds in the zero- to 12-month maturity sector.

No strategy changes for the fourth quarter of 2011

Strategy Changes for 4th Quarter 2011

Investment Strategies

Strategy for 3rd Quarter 2011

Strategy for the 3rd Quarter 2011

Strategy Changes for 4th Quarter 2011

Strategy for 3rd Quarter 2011

Strategy Changes for 4th Quarter 2011
12

Division/Office Permanent Non- Total

Permanent

Authorized Staffing @ 7/1/11 5,772 3,592 9,364

Depositor and Consumer Protection 13 (5) 8

Risk Management Supervision (7) (108) (115)

Insurance and Research 718

Information Technology 202

Legal 202

Subtotal of changes 17 (112) (95)

Authorized Staffing @ 9/30/11 5,789 3,480 9,269

Description

 Approved Staffing Modifications

by Division/Office

July 1 through September 30, 2011

The CFO approved an increase of two positions in 

conjunction with the transfer from the OTS to the FDIC of 

interagency Administrative Law Judge (ALJ) functions 

transferred in accordance with provisions of the Dodd-Frank 

Act.

The CFO approved the transfer of seven permanent 

positions from RMS to DCP and the transfer of five nonpermanent positions from DCP to RMS. In addition, three 

positions in the Compliance and the CRA Examinations 

branch; two positions in the Consumer Research and 

Examination Support branch; and one position in the DCP's 

Policy branch were authorized by the CFO. 

In addition to the transfer of positions to/from DCP indicated 

above, the CFO approved an increase of three non-perm 

positions for the ETS project. In addition, 106 nonpermanent examiners and ten non-permanent supervisory 

examiners positions were eliminated as workload conditions 

moderated.

The CFO approved an increase of seven permanent and 

one non-perm positions in conjunction with the transfer from 

the OTS to the FDIC of the Thrift Financial Report (TFR) 

functions and staff.

The CFO approved an increase of two IT security positions 

to support enhancements to the IT security program. 
13

1) Budgets for investment projects are approved on a multi-year basis; the year-to-date budget amount reflects the 2011 spending estimates 

for approved projects. 

Annual YTD YTD % of YTD YTD

Major Expense Category Budget Budget Expenditures Budget Used Variance

Corporate Operating Budget 

Ongoing Operations

Salaries & Compensation $1,091,454 $783,176 $762,178 97% ($20,999)

Outside Services - Personnel 262,110 188,974 156,279 83% (32,695)

Travel 104,988 75,613 73,094 97% (2,519)

Buildings 80,693 59,273 57,798 98% (1,475)

Equipment 89,160 64,941 58,842 91% (6,099)

Outside Services - Other 24,609 18,239 12,216 67% (6,023)

Other Expenses 21,665 14,355 10,481 73% (3,872)

Total Ongoing Operations $1,674,679 $1,204,571 $1,130,888 94% ($73,683)

Receivership Funding

Salaries & Compensation $330,679 $240,767 $221,270 92% ($19,497)

Outside Services - Personnel 1,402,772 978,158 620,152 63% (358,006)

Travel 48,727 36,567 24,004 66% (12,563)

Buildings 217,994 170,740 70,156 41% (100,585)

Equipment 20,224 13,240 8,444 64% (4,796)

Outside Services - Other 26,516 19,654 8,928 45% (10,727)

Other Expenses 155,517 123,507 44,491 36% (79,016)

Total Receivership Funding $2,202,429 $1,582,633 $997,445 63% ($585,188)

Total Corporate Operating Budget $3,877,108 $2,787,203 $2,128,333 76% ($658,870)

Investment Budget 1 $8,151 $5,366 $4,840 90% ($526)

Grand Total $3,885,259 $2,792,569 $2,133,173 76% ($659,396)

(Dollars in Thousands)

Executive Summary of 2011 Budget and Expenditures

by Major Expense Category

Through September 30, 2011
14

1) Executive Support includes the Offices of Minority and Women Inclusion, Public Affairs, Ombudsman, Legislative Affairs, Enterprise 

Risk Management, and International Affairs.

2) Executive Offices include the offices of the Chairman, Vice Chairman, Independent Director, Deputy to the Chairman and Chief

Operating Officer, Deputy to the Chairman and Chief Financial Officer, and Deputy to the Chairman for External Affairs.

3) Budgets for investment projects are approved on a multi-year basis; the year-to-date budget amount reflects the 2011 spending estimates 

for approved projects. 

Annual YTD YTD % of YTD YTD

Division/Office Budget Budget Expenditures Budget Used Variance

 Corporate Operating Budget 

 Risk Management Supervision $528,363 $380,475 $375,878 99% ($4,597)

 Depositor & Consumer Protection 148,190 105,701 105,198 100% (503)

 Information Technology 267,390 189,128 173,723 92% (15,405)

 Administration 285,289 211,501 194,436 92% (17,065)

 Resolutions & Receiverships 1,894,658 1,436,752 865,965 60% (570,786)

 Legal 313,954 229,749 217,751 95% (11,998)

 Insurance & Research 41,390 29,293 27,331 93% (1,963)

 Finance 38,434 28,071 24,882 89% (3,189)

 Inspector General 40,200 28,415 22,078 78% (6,337)

 Corporate University - CEP 22,598 16,577 14,852 90% (1,725)

 Corporate University - Corporate 22,759 16,179 15,407 95% (772)

 Executive Support 1 37,155 26,979 20,364 75% (6,615)

 Executive Offices 2 9,669 7,701 4,350 56% (3,351)

 Complex Financial Institutions 38,790 25,935 16,659 64% (9,276)

 Government Litigation 4,796 4,796 9 0% (4,787)

 CIO Council 70,562 49,951 49,450 99% (501)

 Corporate Unassigned 112,912 0 0 N/A 0

 Total, Corporate Operating Budget $3,877,108 $2,787,203 $2,128,333 76% ($658,870)

 Investment Budget 3

 Information Technology $8,151 $5,366 $4,840 90% ($526)

 Total, Investment Budget 3 $8,151 $5,366 $4,840 90% ($526)

 Combined Division/Office Budgets

 Risk Management Supervision $528,363 $380,475 $375,878 99% ($4,597)

 Depositor & Consumer Protection 148,190 105,701 105,198 100% (503)

 Information Technology 275,541 194,494 178,563 92% (15,931)

 Administration 285,289 211,501 194,436 92% (17,065)

 Resolutions & Receiverships 1,894,657 1,436,752 865,965 60% (570,786)

 Legal 313,954 229,749 217,751 95% (11,998)

 Insurance & Research 41,390 29,293 27,331 93% (1,963)

 Finance 38,434 28,071 24,882 89% (3,189)

 Inspector General 40,200 28,415 22,078 78% (6,337)

 Corporate University - CEP 22,598 16,577 14,852 90% (1,725)

 Corporate University - Corporate 22,759 16,179 15,407 95% (772)

 Executive Support 1 37,155 26,979 20,364 75% (6,615)

 Executive Offices 2 9,669 7,701 4,350 56% (3,351)

 Complex Financial Institutions 38,790 25,935 16,659 64% (9,276)

 Government Litigation 4,796 4,796 9 0% (4,787)

 CIO Council 70,562 49,951 49,450 99% (501)

 Corporate Unassigned 112,912 0 0 N/A 0

 Grand Total $3,885,259 $2,792,569 $2,133,173 76% ($659,396)

Executive Summary of 2011 Budget and Expenditures

by Budget Component and Division/Office

Through September 30, 2011

(Dollars in Thousands)