Summary of 2006 Performance Results by Program

The FDIC successfully achieved 27 of the 32 annual performance targets 

established in its 2006 Annual Performance Plan. Five performance targets 

related to the resolution of failed institutions were not applicable, because there 

were no insured institution failures in 2006. There were no instances in which 

2006 performance had a material adverse effect on successful achievement 

of the FDIC’s mission or its strategic goals and objectives regarding its major 

program responsibilities.

Key accomplishments by program are highlighted in the table on the following 

page.

36

2006 Annual Report

III. Performance Results Summary
Program Area Performance Results

Insurance • Successfully implemented deposit insurance reform legislation.

• Established new deposit insurance assessment rates, effective January 1, 2007, and a target 

 Designated Reserve Ratio of 1.25, in accordance with the provisions of deposit insurance reform 

 legislation.

• Implemented new assessment credit and dividend systems, in accordance with the provisions 

 of deposit insurance reform legislation.

• Disseminated updated educational information and tools to consumers and bankers on changes 

 in deposit insurance coverage limits.

• Completed risk assessments for all large insured depository institutions and followed up on all 

 identified concerns through off-site review and analysis.

• Conducted and published analysis on the effects of Hurricanes Katrina and Rita.

• Published numerous economic and banking information and analyses, through FDIC Outlook, 

 FYI electronic bulletins, and Center for Financial Research Working Papers.

• Completed reviews of the effectiveness of the reserving methodology.

• No financial institution failures occurred during 2006. 

Supervision and • Conducted 2,388 safety and soundness examinations, including required follow-up examinations 

Consumer Protection of problem institutions, within prescribed time frames.

• Conducted 1,959 compliance and Community Reinvestment Act examinations, including 

 prescribed follow-up examination of problem institutions, within prescribed time frames.

• Performed off-site reviews of 925 institutions.

• Published Notices of Proposed Rulemaking for Basel II and IA, and continued other analytical 

 and preparatory activities related to the implementation of these new capital regulations.

• Completed advanced certification requirements for more than 10 percent of BSA/AML subject- 

 matter experts.

• Conducted 370 outreach and technical assistance events for bankers and community groups 

 to promote awareness of community investment opportunities, access to capital, knowledge-

 sharing between the public and private sectors, and wealth building opportunities for families.

• Continued to disseminate the award-winning Money Smart financial education curriculum in 

 multiple languages, adding 157 Money Smart Alliance members; distributing an additional 

 121,768 copies of the curriculum; and training approximately 207,000 more individuals with 

 the curriculum.

Receivership • Terminated 10 of the 65 (15.4 percent) failed financial institution receiverships existing at the 

Management beginning of the year.

• Secured approval for and began work on a new Claims Administration System (to be implemented 

 in 2008).

• No institution reached the 18-month milestone for professional liability claim investigation in 2006.

37
2006 Budget and Expenditures by Program 

(Excluding Investments)

The FDIC budget for 2006 totaled $1.050 billion. Excluding $146 million for 

Corporate General and Administrative expenditures, budget amounts were 

allocated to corporate programs and related goals as follows: $158 million, 

or 15 percent, to the Insurance program; $557 million, or 53 percent, to the 

Supervision and Consumer Protection program; and $189 million, or 18 percent, 

to the Receivership Management program. 

Actual expenditures for the year totaled $973 million. Excluding $147 million for 

Corporate General and Administrative expenditures, actual expenditures were 

allocated to programs as follows: $166 million, or 17 percent, to the Insurance 

program; $548 million, or 56 percent, to the Supervision and Consumer 

Protection program; and $112 million, or 12 percent, to the Receivership 

Management program. 

 

 Budget

 Expenditures

$ 600

 500

 400

 300

 200

 100

 0

 Insurance Supervision and Receivership General 

 Program Consumer Protection Management and

 Program Program Administrative 

 2006 Budget and Expenditures (Support Allocated) 

Dollars in Millions

38
Performance Results by Program and Strategic Goal

2006 Insurance Program Results

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

 Annual Performance Goal Indicator Target Results

1. Respond promptly to all financial Number of business days after If the failure occurs on Not

 institution closings and emerging institution failure that depositors a Friday, the target is one Applicable.

 issues. have access to insured funds business day. No failures

 either through transfer of in 2006.

 deposits to successor insured See pg. 25. 

 depository institution or 

 depositor payout. If a failure occurs on any Not

 other day of the week, the Applicable.

 target is two business days. No failures

 in 2006.

 See pg. 25.

 Enhancement of FDIC capabilities Review comments received Achieved.

 to make a deposit insurance from the advance notice of See pgs.

 determination for a large-bank proposed rulemaking on 25-26.

 failure. Large-Bank Deposit Insurance 

 Determination Modernization, 

 consult with stakeholders, 

 and make a determination 

 on how to proceed.

2. Identify and address risks to the Insurance risks posed by large Assess the insurance risks in Achieved.

 insurance funds. insured depository institutions. 100 percent of large insured See pg. 37.

 depository institutions and

 adopt appropriate strategies.

 

 Concerns referred for Identify and follow up on Achieved.

 examination or other action. 100 percent of issues raised See pg. 37. 

 through off-site review and

 analysis.

3. Disseminate data and analyses Scope and timeliness of Results of research and Achieved.

 on issues and risks affecting the information dissemination on analyses are disseminated See pgs. 

 financial services industry to bankers, identified or potential issues in a timely manner through 15-16.

 supervisors, the public and other and risks. regular publications, ad hoc

 stakeholders. reports and other means.

 Industry outreach activities Achieved.

 are undertaken to inform See pgs.

 bankers and other stakeholders 15-16, 19.

 about current trends, concerns 

 and other available FDIC 

 resources.

39
2006 Insurance Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

4. Maintain and improve the deposit Implementation of deposit Develop and implement an Achieved.

 insurance system. insurance reform. assessment credit and See pg. 13. 

 dividends system and a new 

 deposit insurance pricing 

 system.

 

 Implement deposit insurance Achieved.

 reform legislation in accordance See pgs. 

 with statutorily prescribed 12-13.

 time frames.

 Loss reserves. Enhance the effectiveness Achieved.

 of the reserving methodology See pg. 37.

 by applying sophisticated 

 analytical techniques to review 

 variances between projected 

 losses and actual losses, and

 by adjusting the methodology

 accordingly.

 Fund adequacy. Set assessment rates to Achieved.

 maintain the insurance fund See pg. 13.

 reserve ratio between 1.15 

 and 1.50 percent of estimated 

 insured deposits.

40
2006 Insurance Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

5. Provide educational information Utility of educational tools Update Insuring Your Deposits Achieved.

 to insured depository institutions available to bankers and (basic deposit insurance See pg. 24.

 and their customers to help them consumers. brochure for consumers), 

 understand the rules for determining Your Insured Deposit 

 the amount of insurance coverage (comprehensive deposit

 on deposit accounts. insurance brochure), and EDIE

 (Electronic Deposit Insurance 

 Estimator) on the FDIC Web 

 site to reflect changes resulting 

 from enactment of deposit 

 insurance reform legislation.

 Develop and make available to Achieved. 

 the public an updated Spanish See pg. 24.

 language version of EDIE 

 reflecting deposit insurance 

 reform.

 Develop and make available to Achieved.

 the public a Spanish language See pg. 24.

 version of the FDIC’s 30-minute 

 video on deposit insurance 

 coverage.

 Respond to 90 percent of Achieved.

 inquiries from consumers See pg. 23.

 and bankers about FDIC 

 deposit insurance coverage 

 within time frames established 

 by policy.

 Respond to 90 percent of Achieved. 

 written inquiries within time See pg. 23.

 frames established by policy.

41
2006 Supervision and Consumer Protection Program Results 

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

 Annual Performance Goal Indicator Target Results

1. Conduct on-site risk management Percentage of required One hundred percent of Achieved.

 examinations to assess the overall examinations conducted in required risk management See pg. 17.

 financial condition, management accordance with statutory examinations (including a 

 practices and policies, and compliance requirements and FDIC policy. review for Bank Secrecy Act

 with applicable laws and regulations (BSA) compliance) are 

 of FDIC-supervised depository conducted on schedule.

 institutions.

2. Take prompt and effective supervisory Percentage of follow-up One hundred percent of Achieved.

 action to address issues identified examinations of problem follow-up examinations are See pg. 17.

 during the FDIC examination of FDIC- institutions conducted within conducted within 12 months 

 supervised institutions that receive required time frames. of completion of the prior

 a composite Uniform Financial examination.

 Institutions Rating of "4" or "5" (problem

 institutions.) Monitor FDIC-supervised

 insured depository institutions’

 compliance with formal and informal

 enforcement actions.

3. Increase regulatory knowledge to Certification of BSA/AML At least 10 percent of BSA/AML Achieved.

 keep abreast of current issues related subject-matter experts. subject-matter experts See pg. 23.

 to money laundering and terrorist nationwide are certified under

 financing. the Association of Certified

 Anti-Money Laundering 

 Specialists certification 

 program. 

4. More closely align regulatory capital Continuation of preparatory Publish a Notice of Proposed Achieved.

 with risk in large or multinational activities related to the Rulemaking (NPR). See pg. 14. 

 banks. implementation of the new 

 Basel Capital Accord (Basel II). Participate in the continuing Achieved.

 analysis of the projected results See pg. 14.

 of the new capital regime. 

5. More closely align regulatory capital Development of a revised Develop a Notice of Proposed Achieved.

 with risk in banks not subject to capital framework proposal Rulemaking (NPR) for public See pg. 14. 

 Basel II capital rules. for institutions not subject issuance. 

 to Basel II.

6. Ensure that FDIC-supervised Percentage of on-site On-site examinations or off- Achieved.

 institutions that plan to operate under examinations or off-site site analyses are performed See pg. 14. 

 the new Basel Capital Accord are analyses performed. for all FDIC-supervised banks 

 making satisfactory progress toward that intend to operate under

 meeting required qualification Basel II to ensure that they

 standards. are effectively working toward

 meeting required qualification

 standards.

42
2006 Supervision and Consumer Protection Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

7. Conduct CRA and compliance Percentage of examinations One hundred percent of Achieved.

 examinations in accordance with conducted in accordance with required examinations are See pg. 17. 

 the FDIC’s examination frequency required time frames. conducted within time frames 

 policy. established by FDIC policy.

8. Take prompt and effective supervisory Percentage of follow-up One hundred percent of Achieved.

 action to monitor and address examinations or related follow-up examinations See pg. 17.

 problems identified during compliance activities conducted within or related activities are

 examinations of FDIC-supervised required time frames. conducted within 12 months

 institutions that receive a “4” or “5” from the date of a formal 

 rating for compliance with consumer enforcement action to 

 protection and fair lending laws. confirm that the institution 

 is in compliance with the

 enforcement action.

9. Provide effective outreach and Number of individuals taking 200,000 additional individuals Achieved.

 technical assistance on topics a Money Smart class or using are taught using the See pg. 24. 

 related to the CRA, fair lending, the self-paced curriculum. Money Smart curriculum. 

 and community development. 

 Number of outreach activities 125 technical assistance Achieved.

 conducted, including technical (examination support) efforts See pg. 24.

 assistance activities. or banker/community outreach

 activities are conducted 

 related to CRA, fair lending, 

 or community development.

10. Effectively meet the statutory Timely responses to written Responses are provided Achieved.

 mandate to investigate and respond complaints. to 90 percent of written See pg. 23.

 to consumer complaints about FDIC- complaints within time frame 

 supervised financial institutions. established by policy.

43
2006 Receivership Management Program Results 

Strategic Goal: Recovery to creditors of receivership is achieved.

 Annual Performance Goal Indicator Target Results

1. Market failing institutions to all known List of qualified and interested Contact all known qualified Not

 qualified and interested potential bidders. and interested bidders. Applicable.

 bidders. No failures

 in 2006.

 See pg. 25.

2. Value, manage, and market assets of Percentage of failed institution’s Ninety percent of the book Not

 failed institutions and their subsidiaries assets marketed. value of a failed institution’s Applicable.

 in a timely manner to maximize net marketable assets are No failures

 return. marketed within 90 days in 2006.

 of failure. See pg. 26.

3. Manage the receivership estate and Timely termination of new Terminate all receiverships Achieved. 

 its subsidiaries toward an orderly receiverships. within 90 days of the See pg. 26.

 termination. resolution of all impediments. 

 

 

4. Conduct investigations into all Percentage of investigated For 80 percent of all claim Not

 potential professional liability claim claim areas for which a decision areas, a decision is made Applicable.

 areas in all failed insured depository has been made to close or to close or pursue claims No failures

 institutions and decide as promptly pursue the claim. within 18 months of the in 2006.

 as possible to close or pursue each failure date. See pg. 26.

 claim, considering the size and 

 complexity of the institution.

44
Depositor Payouts in Instance of Failure

Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results 

The FDIC responds promptly Timely payments made Timely payments made Timely payments made There were no failures 

to financial institution closings to all depositors of the to all depositors of the to all depositors of the in 2005. 

and emerging issues. 11 insured depository three insured depository four insured depository 

 institutions that failed institutions that failed institutions that failed 

 in 2002. in 2003. in 2004.

Risk Classifications

Maintain and improve the Bank Insurance Fund (BIF) BIF and SAIF reserve The FDIC completed Through September 30, 

deposit insurance system. and Savings Association ratios maintained at implementation of 2005, BIF and SAIF 

 Insurance Fund (SAIF) or above the statutory enhancements to the reserve ratios were 

 reserve ratios maintained ratio of 1.25 percent. reserving process and maintained at or above

 at or above the statutory Chairman testified before methodology in the statutory ratio of

 ratio of 1.25 percent. the Senate Committee March 2004. BIF and 1.25 percent. 

 Chairman testified before in support of deposit SAIF reserve ratios 

 the Senate Committee insurance reform. were maintained at 

 in support of deposit or above the statutory 

 insurance reform. ratio of 1.25 percent. 

 

Legislation on deposit Legislation on deposit Deposit insurance reform Congress included

insurance reform was insurance reform was remained under deposit insurance 

introduced in the House passed in the House consideration in the reform legislation in 

and the Senate. and was pending in the Senate, but no action was budget reconciliation

 Senate when Congress taken prior to the end legislation, S. 1932. 

 recessed for the year. of the 108th Congress. The measure was

 adopted by the Senate 

 in December and was 

 passed by the House 

 on February 1, 2006. 

 The President signed

 the bill enacting 

 deposit insurance 

 reform legislation 

 on February 8, 2006. 

Risk Management, Safety and Soundness

Conduct on-site risk Conducted 2,534 or Conducted 2,421 Conducted 2,515 Conducted 2,399

management examinations 98 percent of required required safety and required safety and required safety and

Prior Years Performance Results

(excerpted from the 2005 Annual Report) Page numbers refer to the 2005 report

45

2005 Insurance Program Results 

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

 Annual Performance Goal Indicator Target Results

1. Respond promptly to all financial Number of business days after If the failure occurs on a Not

 institution closings and emerging institution failure by which Friday the target is one Applicable.

 issues. depositors will have access to business day. No failures

 insured funds either through in 2005.

 transfer of deposits to successor

 insured depository institution If the failure occurs on any Not

 or depositor payout. other day of the week, the Applicable.

 target is two business days. No failures

 in 2005.

2. Identify and address risks to the Insurance risks posed by large Assess the insurance risks in Achieved.

 insurance funds. insured depository institutions. 100 percent of large insured See pg. 29.

 depository institutions and 

 adopt appropriate strategies. 

 

 Concerns referred for Identify and follow up on Achieved.

 examination or other action. 100 percent of referrals. See pg. 29.

 

 Dissemination of data and Results of research and Achieved.

 analyses on issues and risks analyses are disseminated See pg. 29.

 affecting the banking industry in a timely manner through

 to bankers, supervisors, the regular publications, ad hoc

 public, and other stakeholders. reports and other means. 

 

 Industry outreach activities Achieved.

 are undertaken to inform See pgs.

 bankers and other 10-11.

 stakeholders about current

 trends and concerns and

 available FDIC resources. 

3. Maintain sufficient and reliable Quality and timeliness of bank Implement a modernized Not 

 information on insured depository data. Call Reporting process Achieved.

 institutions. during the second Call See pg. 11.

 Reporting period in 2005. 

4. Maintain and improve the deposit Deposit Insurance Reform. Provide information and Achieved.

 insurance system. analysis to Congressional See pgs.

 committees in support of 8-9.

 deposit insurance reform

 legislation.

 

 Obtain legislative support Achieved.

 for a proposed assessment See pgs.

 credit and rebate system 8-9.

 and a new deposit insurance

 pricing system. 
2005 Insurance Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

4. Maintain and improve the deposit When deposit insurance Not

 insurance system. (continued) reform is enacted, implement Applicable.

 legislation in accordance Legislation

 with statutorily prescribed enacted 

 time frames. Feb. 8, 2006.

 

 Loss Reserves. Enhance the effectiveness Achieved.

 of the reserving methodology See pg. 29.

 by applying sophisticated

 analytical techniques to

 review variances between

 projected losses and actual

 losses, and by adjusting the

 methodology accordingly.

 

 Fund adequacy. Set assessment rates to Achieved.

 maintain the insurance funds See pg. 37.

 at the designated reserve ratio

 (DRR), or return them to the 

 DRR if they fall below it, 

 as required by statute.

 

 When deposit insurance Not

 reform legislation is enacted, Applicable.

 promulgate rules and Legislation

 regulations establishing enacted

 criteria for replenishing the Feb. 8, 2006.

 Deposit Insurance Fund when

 it falls below the low end of 

 the range.

 

 Enhance the working prototype Achieved.

 of the integrated fund model See pg. 29.

 for financial risk management. 

5. Provide educational information to Utility of educational tools Update the consumer version Achieved.

 insured depository institutions and developed for bankers and of the EDIE (Electronic See pg. 18.

 their customers to help them consumers. Deposit Insurance Estimator) 

 understand the rules for determining located on the FDIC’s

 the amount of insurance coverage Web site.

 on deposit accounts.

46
47

2005 Supervision and Consumer Protection Program Results 

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

 Annual Performance Goal Indicator Target Results

1. Conduct on-site risk management Percentage of required One hundred percent of Achieved.

 examinations to assess an FDIC- examinations conducted in required safety and soundness See pg. 13.

 supervised insured depository accordance with statutory examinations (including a 

 institution’s overall financial condition, requirements and FDIC policy. review for BSA compliance) 

 management practices and policies, are conducted on schedule.

 and compliance with applicable laws 

 and regulations.

2. Take prompt and effective supervisory Percentage of follow-up One hundred percent of Achieved.

 actions to address problems found examinations conducted follow-up examinations are See pg. 13.

 during the FDIC examination of FDIC- within required time frames. conducted within 12 months 

 supervised institutions that receive of completion of the prior 

 a composite Uniform Financial examination.

 Institutions Rating of "4" or "5" 

 (problem institutions). Monitor 

 FDIC-supervised insured depository

 institutions’ compliance with formal

 and informal enforcement actions.

3. Increase industry and regulatory Number of trained BSA/AML The number of trained Achieved.

 awareness of emerging/high-risk subject-matter experts. BSA/AML subject-matter See pg. 15.

 areas. experts increased to 300.

 Advanced training is Achieved.

 completed for all BSA/AML See pg. 39.

 subject-matter experts.

 

 Number of industry outreach At least one outreach session Achieved. 

 sessions on BSA/AML/Counter per region. See pg. 15.

 Financing of Terrorism (CFT) 

 issues. 

 

4. More closely align regulatory capital Completion of preparatory Notice of Proposed Rule- Achieved.

 with risk in large or multinational activities for implementation of making (NPR) and associated See pg. 10.

 banks. the new Basel Capital Accord. examination guidance for

 implementing the new Basel

 Capital Accord are published

 for comment.

 

 Quantitative Impact Study 4 Achieved.

 is completed. See pg. 9.
48

2005 Supervision and Consumer Protection Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

5. Ensure that FDIC-supervised Percentage of on-site On-site examinations or off- Achieved.

 institutions that plan to operate examinations or off-site site analyses are performed See pg. 9.

 under the new Basel Capital Accord analyses performed. for all FDIC-supervised banks 

 are making satisfactory progress that intend to operate under

 toward meeting required qualification Basel II to ensure that they

 standards. are effectively working toward

 meeting required qualification 

 standards.

6. Provide effective outreach and Number of Money Smart 200 additional members Achieved.

 technical assistance on topics Alliance members. are added to the See pg. 38.

 related to the CRA, fair lending, Money Smart Alliance. 

 and community development.

 Number of Money Smart 20,000 additional copies of Achieved.

 curricula distributed. the Money Smart curricula See pg. 38.

 are distributed.

 

 200,000 additional individuals Achieved.

 are taught using the See pg. 38.

 Money Smart curricula.

 Number of outreach activities 125 technical assistance Achieved.

 conducted with technical (examination support) efforts See pg. 38.

 assistance. or banker/community outreach

 activities are conducted 

 related to CRA, fair lending, 

 or community development.

7. Effectively meet the statutory Timely responses to Responses are provided Achieved.

 mandate to investigate and respond written complaints. to 90 percent of written See pg. 17. 

 to consumer complaints about FDIC- complaints within time

 supervised financial institutions. frames established by policy.

8. Conduct CRA and compliance Percentage of examinations One hundred percent of Achieved.

 examinations in accordance with conducted within required required examinations are See pg. 13.

 the FDIC’s examination frequency time frames. conducted within time frames

 policy. established by FDIC policy.

9. Take prompt and effective Percentage of follow-up One hundred percent of Achieved.

 supervisory action to monitor examinations or related follow-up examinations or See pg. 39.

 and address problems identified activities conducted within related activities are conducted 

 during compliance examinations required time frames. within 12 months from the

 of FDIC-supervised institutions date of a formal enforcement 

 that receive a “4” or “5” rating action to confirm that the 

 for compliance with consumer institution is in compliance

 protection and fair lending laws. with the enforcement action.
2005 Receivership Management Program Results 

Strategic Goal: Recovery to creditors of receiverships is achieved.

 Annual Performance Goal Indicator Target Results

1. Market failing institutions to all List of qualified and interested Contact all known qualified Not

 known qualified and interested bidders. and interested bidders. Applicable. 

 potential bidders. No failures

 in 2005.

2. Value, manage, and market assets Percentage of failed institution’s Ninety percent of book Not

 of failed institutions and their assets marketed. value of a failed institution’s Applicable.

 subsidiaries in a timely manner marketable assets are No failures

 to maximize net return. marketed within 90 days in 2005.

 of failure. 

3. Manage the receivership estate Timely termination of new Inactivate 75 percent of Not

 and its subsidiaries toward an orderly receiverships. receiverships managed Achieved. 

 termination. through the Receivership See pg. 40.

 Oversight Program within

 three years of the failure

 date. 

 

4. Conduct investigations into all Percentage of investigated For 80 percent of all claim Achieved.

 potential professional liability claim areas for which a areas, a decision is made See pg. 40.

 claim areas in all failed insured decision has been made to close or pursue the claim

 depository institutions and decide to close or pursue the claim. within 18 months after the

 as promptly as possible to close failure date.

 or pursue each claim, considering

 the size and complexity of the

 institution.

49
2004 Insurance Program Results 

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

 Annual Performance Goal Indicator Target Results

1. Respond promptly to all financial Number of business days after If the failure occurs on a Friday Achieved.

 institution closings and emerging institution failure by which the target is one business day. See pg. 19.

 issues. depositors will have access 

 to insured funds either through If the failure occurs on any Not

 transfer of deposits to successor other day of the week, the Applicable.

 insured depository institution target is two business days. All failures

 or depositor payout. occured on

 a Friday.

2. Identify and address risks to Assess risks posed by large Assess risks in 100 percent Achieved.

 the insurance funds. insured depository institutions. of large insured depository See pg. 11.

 institutions and adopt 

 appropriate strategies. 

 Identify and follow up on Identify and follow up on Achieved.

 concerns referred for examination 100 percent of referrals. See pg. 12.

 or other action (i.e., contact the 

 insured institution or primary 

 supervisor). 

 

 Disseminate data and analyses Analyses are included in Achieved.

 on current issues and risks regular publications or as ad See pg. 11.

 affecting the banking industry hoc reports on a timely basis.

 to bankers, supervisors, 

 stakeholders, and the public. Conduct industry outreach Achieved.

 activities aimed at the banking See pg. 11.

 community and industry trade

 groups to discuss current

 trends and concerns and to

 inform bankers about available

 FDIC resources.

3. Maintain sufficient and reliable Maintain quality and timeliness Implement a modernized Not

 information on insured depository of bank data. Call Reporting process Achieved. 

 institutions. by December 31, 2004. See pg. 11.

50

Prior Years Performance Results

(excerpted from the 2004 Annual Report) Page numbers refer to the 2004 report
2004 Insurance Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

4. Maintain and improve the Pursuit of changes to the Provide information and Achieved.

 deposit insurance system. deposit insurance system analysis to Congressional See pgs.

 is in accordance with proposals committees in support of 8-9.

 submitted to the Congress. deposit insurance reform 

 legislation. 

 

 Develop and obtain the Achieved.

 necessary support for a See pgs.

 proposed assessment credit 8-9.

 and rebate system and a 

 new deposit insurance pricing 

 system. 

 When deposit insurance Not

 reform is enacted, implement Applicable.

 legislation in accordance with Legislation

 statutorily prescribed time not enacted

 frames. in 2004.

 

 Make appropriate changes Review discrepancies between Achieved.

 to the current methodology projected failed assets and See pgs.

 for projecting losses in actual failed assets by applying 8-9.

 failing financial institutions sophisticated analytical 

 and establishing related loss techniques to examine the 

 reserves for the deposit effectiveness of the loss 

 insurance funds. projection model and adjust 

 the methodology for projecting 

 losses accordingly. 

 Implement enhancements to Achieved.

 the reserving process and See pgs.

 methodology in accordance 8-9.

 with recommendations from 

 a comprehensive 2003 review.

 

 Maintain fund adequacy. Set assessment rates to Achieved.

 maintain the insurance funds See pgs.

 at the designated reserve ratio, 8-9.

 or return them to the 

 designated reserve ratio if 

 they fall below it, as required 

 by statute. 

 If deposit insurance reform Not

 legislation becomes law in Applicable.

 2004, promulgate rules and Legislation

 regulations establishing not enacted

 criteria for replenishing the in 2004.

 deposit insurance fund when 

 it falls below the low end of 

 the range.

51
52

2004 Insurance Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

4. Maintain and improve the Develop a working prototype Achieved.

 deposit insurance system. of a new, integrated fund See pgs.

 (continued) model for financial risk 8-9.

 management.

 Conduct a conference Host conference, present Not

 on the “Future of Banking.” findings from the study and Achieved.

 obtain feedback from scholars See pg. 28.

 and industry representatives 

 and other interested parties.

 

 Maintain quality and visibility Implement an FDIC Center Achieved.

 of the Corporation’s banking for Financial Research See pg. 10.

 research activities. with enhanced ties to the 

 academic community.

5. Provide educational information to Utility of educational tools Develop a CD-ROM and Achieved.

 insured depository institutions and developed for bankers and Internet-based resource for See pg. 18.

 their customers to help them consumers. bankers on the deposit 

 understand the rules for determining insurance rules.

 the amount of insurance coverage 

 on deposit accounts.

2004 Supervision and Consumer Protection Program Results 

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

 Annual Performance Goal Indicator Target Results

 1. Conduct on-site risk management Percentage of required One hundred percent of Achieved.

 examinations to assess an FDIC- examinations in accordance required examinations are See pg. 12.

 supervised insured depository with statutory requirements conducted on time. 

 institution’s overall financial condition, and FDIC policy. 

 management practices and policies, 

 and compliance with applicable laws 

 and regulations.

2. Take prompt supervisory actions to Follow-up examination Follow-up examination is Achieved.

 address problems found during the of problem banks. conducted within 12 months See pg. 12.

 FDIC examination of FDIC-supervised of completion of the prior 

 institutions identified as problem examination. 

 insured depository institutions. Monitor

 FDIC-supervised insured depository

 institutions’ compliance with formal

 and informal enforcement actions.
2004 Supervision and Consumer Protection Program Results (continued) 

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

 Annual Performance Goal Indicator Target Results

 1. Provide effective outreach and Additions to the Money Smart Add an additional 200 Achieved.

 technical assistance on topics related Alliance and the number Money Smart Alliance See pg. 15.

 to CRA, fair lending, and community of Money Smart curriculum Members. 

 development. provided. 

 Provide an additional 20,000 Achieved.

 copies of Money Smart See pg. 15.

 curriculum.

 

 Reach an additional 200,000 Achieved.

 individuals. See pg. 15.

 Outreach activities and Conduct or participate in 125 Achieved.

 technical assistance. technical assistance efforts See pg. 15.

 (examination support) or

 banker/community outreach

 activities related to CRA,

 fair lending, or community

 development.

2. Effectively meet the statutory Timely responses to Ninety percent of written Achieved.

 mandate to investigate and respond written complaints. complaints are responded to See pg. 17.

 to consumer complaints about within time frames established 

 FDIC-supervised financial institutions. by policy. 

3. Conduct comprehensive and Conduct required examinations One hundred percent of Achieved.

 compliance-only examinations in in accordance with FDIC policy. required examinations are See pg. 12.

 accordance with FDIC examination conducted within time frames 

 frequency policy. established by FDIC policy. 

4. Take prompt supervisory actions Timely follow-up examinations Follow-up examination or Achieved.

 and monitor institutions rated and related activity. related activity is conducted See pg. 12.

 “4” or “5” for compliance to within 12 months from the 

 address problems identified date of a formal enforcement

 during compliance examinations. action to confirm that the

 institution is in compliance 

 with the enforcement action. 

53
2004 Receivership Management Program Results 

Strategic Goal: Recovery to creditors of receiverships is achieved.

 Annual Performance Goal Indicator Target Results

 1. Market failing institutions to all List of qualified and Contact all known qualified Achieved.

 known qualified and interested interested bidders. and interested bidders. See pg. 19.

 potential bidders. 

2. Value, manage, and market assets Percentage of failed institution's Eighty-five percent of book Achieved.

 of failed institutions and their assets marketed. value of a failed institution’s See pg. 19.

 subsidiaries in a timely manner marketable assets are 

 to maximize net return. marketed within 90 days 

 of failure.

3. Manage the receivership estate Timely termination of Terminate 75 percent of Achieved.

 and its subsidiaries toward an new receiverships. receiverships managed See pg. 20.

 orderly termination. through the Receivership 

 Oversight Program within

 three years of the failure date. 

4. Conduct investigations into all Percentage of investigated For 80 percent of all claim Achieved.

 potential professional liability claim claim areas for which a decision areas, a decision is made See pg. 19.

 areas in all failed insured depository has been made to close or to close or pursue the claim 

 institutions and decide as promptly as pursue the claim. within 18 months after the

 possible to close or pursue each claim, failure date. 

 considering the size and complexity 

 of the institution. 

54
2003 Insurance Program Results 

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

 Annual Performance Goal Indicator Target Results

 1. Respond promptly to financial Number of business days If the failure occurs on a Achieved.

 institution closings and emerging after institution failure by Friday, the target is one 

 issues. which depositors will have business day.

 access to insured funds

 either through transfer of If the failure occurs on any Achieved.

 deposits to successor insured other day of the week, the

 depository institution or target is two business days.

 depositor payout. 

2. Identify and address risks to the Assess risks posed by large Assess risks in 100 percent Achieved.

 insurance funds. insured depository institutions. of large insured depository 

 institutions and adopt 

 appropriate strategies. 

 

 Identify and follow up Identify and follow up on Achieved.

 on concerns referred for 100 percent of referrals.

 examination or other action 

 (i.e., contact the insured 

 institutions or primary 

 supervisor).

 Disseminate data and analyses Analyses are included in Achieved.

 on current issues and risks regular publications or as ad 

 affecting the banking industry hoc reports on a timely basis.

 to bankers, supervisors, 

 stakeholders, and the public. Conduct industry outreach Achieved.

 aimed at the banking 

 community and industry trade 

 groups to discuss current 

 trends and concerns and to 

 inform bankers about available 

 FDIC resources. 

55

Prior Years Performance Results

(excerpted from the 2003 Annual Report) Page numbers refer to the 2003 report
2003 Insurance Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

3. Maintain sufficient and reliable Maintain and improve the Update and expand data Achieved.

 information on insured depository Research Information System availability in RIS. 

 institutions. (RIS), which serves as the 

 foundation of most analysis 

 and statistical reporting for 

 the FDIC.

 Develop a more efficient Determine Call Report Achieved.

 approach to bank data collection Modernization system

 and management. development approach; 

 prepare migration plan for the

 implementation of data editing,

 storage and distribution facility

 for Call Report data; complete 

 reconciliation of bank structure 

 databases; and implement 

 standard business rules and 

 data definitions for Call Report 

 information.

4. Maintain and improve the Continue to pursue changes Work with Congress to Not

 deposit insurance system. in the deposit insurance develop and pass a reform Achieved.

 system in accordance with package. See pgs.

 proposals submitted to 12-13.

 Congress in 2002. Develop final pricing Achieved.

 recommendations and

 implementation plans for

 inclusion in a notice-and-

 comment rulemaking during 

 2003.

 

 If deposit insurance reform is Not

 passed, implement legislation Applicable.

 in a timely manner.

 Develop and analyze baseline Achieved.

 data of implemented 

 modification results. 

 Continue to identify and review Assess improvements Achieved.

 possible modifications to the to the objective screens for 

 Risk-Related Premium System the RRPS that identify financial

 (RRPS). institutions engaging in

 excessive risk taking, such 

 as certain types of credit, 

 market, and operational risks.

56
57

2003 Insurance Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

4. Maintain and improve the Make appropriate changes Review discrepancies between Achieved.

 deposit insurance system. to the current methodology projected failed assets and 

 (continued) for projecting losses in actual failed assets by applying 

 failing financial institutions sophisticated analytical 

 and establishing related techniques to examine the 

 loss reserves for the effectiveness of the loss

 deposit insurance funds. projection model and adjust

 the methodology or projecting

 losses accordingly. 

 

 Perform comprehensive review Achieved.

 of all aspects of the reserving 

 process and methodology and 

 implement enhancements as 

 necessary.

 Maintain fund adequacy. Set assessment rates to Achieved.

 maintain the insurance funds 

 at or above the designated 

 reserve ratio, or to return them 

 to the designated reserve ratio 

 if they fall below it, as required 

 by statute. If deposit insurance 

 reform legislation becomes law 

 in 2003, promulgate rules and 

 regulations establishing criteria 

 for replenishing the deposit 

 insurance fund when it falls 

 below the low end of the range.

 Conduct a study on the Determine the implications of Achieved.

 “Future of Banking.” major trends for the evolution 

 of the industry, development 

 of regulatory policy and 

 management of the deposit 

 insurance funds.

 Enhance FDIC’s ties to the Establish an FDIC Center Achieved.

 academic community and for Financial Research.

 upgrade and provide greater

 visibility to the Corporation’s 

 research activities.

 

5. Provide educational information Enhance the existing Issue a new version of the Achieved.

 to insured depository institutions Electronic Deposit EDIE (Banker version) that

 and their customers to help them Insurance Estimator (EDIE) accommodates corporate and

 understand the rules for determining Banker version. organization accounts as well

 the amount of insurance coverage as any changes to the deposit

 on deposit accounts. insurance rules that may be

 adopted.
2003 Supervision and Consumer Protection Program Results

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

 Annual Performance Goal Indicator Target Results

1. Conduct on-site safety and soundness Conduct required examinations One hundred percent Achieved.

 examinations to assess an FDIC-super- in accordance with statute of required examinations 

 vised insured depository institution’s and FDIC policy. are conducted on time.

 overall financial condition, management 

 practices and policies, and compliance 

 with applicable regulations.

2. Take prompt supervisory actions The number of months Follow-up examination Achieved.

 to address problems found during between last examination conducted within 12 months 

 the FDIC examination of FDIC- of a problem bank and of completing the prior 

 supervised institutions identified follow-up examination. examination. 

 as problem insured depository 

 institutions. Monitor FDIC- 

 supervised insured depository 

 institution’s compliance with formal 

 and informal enforcement actions.

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

 Annual Performance Goal Indicator Target Results

1. Provide effective outreach and Additions to the Money Smart By December 31, 2003, Achieved.

 technical assistance on topics Alliance and the number of cumulative totals of 400 

 related to CRA, fair lending, and Money Smart curricula provided. Money Smart Alliance

 community development. members and 40,000 Money

 Smart curricula provided.

 

 Outreach activities and Conduct or participate in 125 Achieved.

 technical assistance. Money Smart events, technical

 assistance efforts (examination 

 support), or banker/community 

 outreach activities related 

 to CRA, fair lending, or 

 community development.

2. Effectively meet the statutory Timely responses to written Ninety percent of written Achieved.

 mandate to investigate and respond complaints. complaints are responded to

 to consumer complaints about FDIC- within time frames established

 supervised financial institutions. by policy.

3. Conduct comprehensive and Conduct required examinations One hundred percent of Achieved.

 compliance-only examinations in accordance with FDIC policy. required examinations are

 in accordance with FDIC examination conducted within time frames

 frequency policy. established by FDIC policy.

58
2003 Supervision and Consumer Protection Program Results (continued)

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

 Annual Performance Goal Indicator Target Results

4. Take prompt supervisory actions Timely follow-up examination A follow-up examination Achieved.

 and monitor all institutions rated and related activity confirm or related activity is 

 “4” or “5” for compliance to whether the institution conducted within 12 months 

 address problems identified is in compliance with the from the date of a formal 

 during compliance examinations. enforcement action. enforcement action.

2003 Receivership Management Program Results

Strategic Goal: Recovery to creditors of receiverships is achieved.

 Annual Performance Goal Indicator Target Results

1. Market failing institutions to all List of qualified and interested Contact all known qualified Achieved.

 known qualified and interested bidders. and interested bidders. 

 potential bidders.

 

2. Value, manage, and market assets Failed institutions’ assets Eighty-five percent of book Achieved.

 of failed institutions and their marketed. value of a failed institution’s

 subsidiaries in a timely manner marketable assets are 

 to maximize net return. marketed within 90 days

 of failure.

 

3. Manage the receivership estate and Timely termination of new Terminate 75 percent of Not

 its subsidiaries toward an orderly receiverships. receiverships managed Achieved.

 termination. through the Receivership See pg. 19.

 Oversight Program within

 three years of the failure

 date.

4. Conduct investigations into all Percentage of investigated claim For 80 percent of all claim Achieved.

 potential professional liability claim areas for which a decision has areas, a decision is made

 areas in all failed insured depository been made to close or pursue to close or pursue the

 institutions, and decide to close or the claim within 18 months claim.

 pursue each claim as promptly as after the failure date. 

 possible, considering the size and 

 complexity of the institution. 

59
Program Evaluation

The Corporation’s 2006 Annual Performance Plan indicated that the FDIC would 

pursue the following Program Evaluation agenda in 2006:

 During 2006, considerable corporate resources will be devoted 

 to implementing both program changes necessitated by 

 Deposit Insurance Reform and the several changes in the 

 automated systems supporting related activities. In addition, 

 OERM (the Office of Enterprise Risk Management) will lead 

 or participate in program evaluation activities in such areas as: 

 risk management oversight on the development of new 

 automated systems supporting our major programs; 

 determining the continuing effectiveness of program areas 

 that experienced significant downsizing in 2005; continuing 

 implementation of balanced scorecards throughout the 

 Corporation; and continuing our participation in performance 

 management and monitoring efforts at the division/office level.

As expected, the implementation of deposit insurance reform became the 

central focus of OERM’s program evaluation efforts throughout 2006. In order 

to comply with the requirements of the Federal Deposit Insurance Reform 

Act of 2005 and the related Federal Deposit Insurance Reform Conforming 

Amendments Act of 2005, the FDIC had to analyze current business processes 

and operations in several program areas and to implement major changes in 

these programs by the end of the year. OERM program evaluation staff provided 

significant support in the documentation and analysis of current business 

processes.

In conjunction with the implementation of these program changes, the legislation

also required the FDIC and the Government Accountability Office (GAO) to conduct

a series of specific studies and targeted reviews/audits. Most significantly, 

the GAO was required to conduct an evaluation of the FDIC’s overall structure 

and mission, with particular emphasis on the Corporation’s frameworks for 

corporate governance, human capital management and risk management. 

This comprehensive, nine-month review encompassed all major FDIC programs 

and included operations at headquarters, regional and field offices. The review 

resulted in only two relatively minor recommendations, thus providing FDIC 

management with additional independent affirmation of the effectiveness of its 

existing corporate programs. The FDIC will complete its three studies in early 

2007, covering “Accounting for Loss Contingencies: The FDIC's Policies and 

Practices 1992-2004,” “An Evaluation of Further Possible Changes to the Deposit 

Insurance System,” and “An Evaluation of the Denominator of the Reserve Ratio.” 

The studies are scheduled to be delivered to Congress by February 15, 2007.

60
Independent internal control staff in key divisions also continued to carry 

out traditional program and operational evaluations in 2006. These included 

continuing reviews of the Division of Supervision and Consumer Protection’s 

regional and field office operations to ensure consistency and integrity of the 

FDIC’s examination programs; and a review of payment and other controls 

in the Division of Resolutions and Receiverships to ensure the continued 

effectiveness and control of operations in the wake of the significant staff 

reductions made in 2005. OERM also continued its review of the Office of 

Diversity and Economic Opportunity to identify ways to improve the accuracy 

and timeliness of reporting.

61