2009

ANNUAL

REPORT
2 FDIC 2009 Annual Report

Federal Deposit Insurance Corporation 

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

June 30, 2010

Dear Sir/Madam,

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,

•	 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 2009 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

Resolution Fund.

In accordance with the Reports Consolidation Act of 2000, the FDIC completed an assessment of 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, except for a material weakness in internal controls related to estimating

losses to the DIF from resolution transactions involving loss-share agreements, which was identified

by the U.S. Government Accountability Office (GAO). GAO also identified information technology

issues that aggregated to a significant deficiency. During the fourth quarter of 2009 and in early 2010,

we increased resources in these areas and instituted improvements in our control environment which,

in conjunction with additional control enhancements to be completed in the second quarter of 2010, will

significantly reduce the risks outlined in GAO’s audit report. We are committed to maintaining effective

internal controls corporate-wide in 2010.

Sincerely,

Sheila C. Bair

Chairman

The President of the United States

The President of the United States Senate

The Speaker of the United States House of Representatives
Table of Contents 3

Message from the Chairman • Sheila C. Bair. 

Message from the Chief Financial Officer • Steven O. App. 

In Memoriam • L. William Seidman  .

I. Management’s Discussion and Analysis . 

The Year in Review. 

Insurance. 

Supervision and Consumer Protection. .

Resolutions and Receiverships  .

Effective Management of Strategic Resources. .

II. Financial Highlights. .

Deposit Insurance Fund Performance  .

Investment Spending. .

III. Performance Results Summary. .

Summary of 2009 Performance Results by Program. .

2009 Budget and Expenditures by Program  .

Performance Results by Program and Strategic Goal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Prior Years’ Performance Results. .

Program Evaluation. .

IV. Financial Statements and Notes. 

Deposit Insurance Fund (DIF) . 

FSLIC Resolution Fund (FRF). . 

Government Accountability Office’s Audit Opinion. .

Management’s Response. .

Overview of the Industry . .

V. Management Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140

Enterprise Risk Management. .

Material Weaknesses. .

Management Report on Final Actions . .

VI. Appendices . .

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 of Contents