Federal Deposit 

Insurance Corporation

 

Deputy to the Chairman and Chief Financial Officer

 February 22, 2023 

MEMORANDUM TO: The Board of Directors

FROM: Bret D. Edwards

Deputy to the Chairman

 and Chief Financial Officer

SUBJECT: Fourth Quarter 2022 CFO Report to the Board 

The attached report highlights the FDIC’s financial activities and results for the quarter ended December 31, 2022. 

Executive Summary

• During the fourth quarter of 2022, the Deposit Insurance Fund (DIF) balance rose to a record $128.2 billion as 

of December 31, 2022, up $2.7 billion from the September 30, 2022 balance of $125.5 billion. The quarterly 

increase was primarily due to a $2.1 billion increase in assessment revenue. 

• The reserve ratio increased by one basis point to 1.27 percent, as insured deposits increased 1.4 percent.

• There were no FDIC-insured financial institution failures during the fourth quarter of 2022; the last failure 

occurred on October 23, 2020.

• Through December 31, 2022, overall FDIC Operating Budget expenditures were below the full-year 

budget by 15 percent ($339.4 million). This was primarily the result of underspending of $284.2 million 

(13 percent) in every major expense category in the Ongoing Operations budget component. 

Expenditures in the Receivership Funding budget component were also below budget by $50.5 million 

(67 percent) due largely to the absence of failure activity in 2022.

• During the fourth quarter of 2022, the CFO approved one budget adjustment. There were no 

adjustments to authorized 2022 staffing.
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I. Financial Results (See pages 7 – 8 for detailed data and charts.)

Deposit Insurance Fund 

• The DIF’s comprehensive income remained stable year-over-year; $5.1 billion in 2022 compared to $5.2 billion 

in 2021. The year-over-year decrease in comprehensive income of $0.1 billion was primarily driven by a $1.2 

billion increase in assessment revenue and a $0.3 billion increase in interest on U.S. Treasury (UST) securities, 

which was fully offset by a $1.6 billion increase in unrealized losses on UST securities.

• Assessment revenue was $8.3 billion in 2022, up $1.2 billion from $7.1 billion in 2021 due to higher assessment 

base and rates. 

• During 2022, the DIF incurred an unrealized loss on UST securities of $2.8 billion, up from a $1.2 billion 

unrealized loss in 2021 due to yields rising across all investable maturity sectors of the Treasury yield curve. 

Assessments 

• During December, the DIF recognized assessment revenue of $2.2 billion for the estimate of fourth quarter 

2022 insurance coverage. Additionally, the DIF recognized a $17 million adjustment for lower-than-estimated 

collections for the third quarter 2022 insurance coverage, which decreased assessment revenue.

• On December 30, 2022, the FDIC collected $2.1 billion in DIF assessments for third quarter 2022 insurance 

coverage.

II. Investment Results (See pages 9 – 10 for detailed data and charts.)

DIF Investment Portfolio

• On December 31, 2022, the total liquidity (also total market value) of the DIF investment portfolio stood at 

$125.7 billion, up $2.7 billion from its September 30, 2022, balance of $123.0 billion. During the quarter, 

interest revenue, receivership dividends, and deposit insurance assessment collections exceeded resolutionrelated outlays and operating expenses. 

• On December 31, 2022, the DIF investment portfolio’s yield was 1.865 percent, up 51 basis points from its 

1.351 percent yield on September 30, 2022. The new Treasury securities purchased during the fourth quarter 

of the year had higher yields than securities purchased in the previous quarter.

• In accordance with the approved fourth quarter 2022 DIF portfolio investment strategy, staff purchased 16 

conventional Treasury securities with a total par value of $17.5 billion, a weighted average yield of 4.311 

percent, and a weighted average maturity of 2.55 years.
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III. Budget Results (See pages 11 – 12 for detailed data.) 

Approved Budget Modifications

The 2022 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other officials the 

authority to make certain modifications to the 2022 FDIC Operating Budget. The CFO approved one budget 

reallocation during the fourth quarter, in accordance with the authority delegated by the Board of Directors:

• In October, the CFO approved increases to the 2022 Ongoing Operations Salaries and Compensation 

budgets of the Offices of the Chief Information Security Officer (OCISO), the Ombudsman (OO), and 

Financial Institution Adjudication (OFIA) to cover higher-than-projected benefits costs and to two 

Executive Offices to cover the salary and benefits costs of detailees. These increases were offset by 

reductions to the budgets of the Deputy to the Chairman for Policy and the Division of Risk 

Management Supervision (RMS), both of which had projected budget surpluses. 

Following these fourth quarter budget adjustments, the balances in the Corporate Unassigned contingency 

reserve remained unchanged at $36.7 million for the Ongoing Operations budget component and $21.2 

million for the Receivership Funding budget component.

Approved Staffing Modifications

The 2022 Budget Resolution delegated to the CFO the authority to modify approved 2022 staffing 

authorizations for divisions and offices, as long as those modifications did not increase the total approved 

2022 FDIC Operating Budget. The CFO did not approve any modification to staffing authorizations during the 

fourth quarter. 

At the end of the year, the FDIC’s authorized 2022 staffing remained unchanged from the third quarter at 

6,090 positions (5,932 permanent and 158 non-permanent). 

Spending Variances

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

spending variances for the quarter ending December 31, 2022, are defined as those that either (1) exceeded the 

annual budget for a major expense category or division/office; or (2) were under the annual budget for a major 

expense category or division/office by more than $5 million and represented more than five percent of the major 

expense category or total division/office budget.

Significant Spending Variances by Major Expense Category

Ongoing Operations

The overall spending variance for Ongoing Operations totaled $284.2 million, or 13 percent, below budget for 

2022. There were significant spending variances in six of seven major expense categories: 

• Salaries and Compensation spending was under budget by $79.3 million, or six percent, due to the high 

number of vacancies in budgeted positions across the FDIC throughout the year. 
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• Outside Services - Personnel spending was under budget by $97.0 million, or 26 percent. The variance was 

largely attributable to unused contingency reserves of $36.7 million and underspending in the following six 

divisions:

o The Division of Information Technology (DIT) underspent its budget by $24.6 million, including $11.6 

million in underspending due to delays in starting planned new initiatives; as well as $13 million in 

underspending for recurring operations as a result of cost reductions and delays in contractor 

onboarding.

o The Division of Administration (DOA) underspent its budget by $10.6 million, largely due to reductions in 

on-site service levels in conjunction with expanded telework, lower-than-budgeted contract spending for 

human resources functions and initiatives, and delays in planned contract spending to support crisis 

readiness planning and facilities modernization.

o The Legal Division (Legal) underspent its budget by $4.8 million, mostly attributable to lower-thanprojected litigation expenses due to COVID pandemic-related delays, handling litigated cases in-house, 

and project deferral to 2023. 

o The Division of Complex Institution Supervision and Resolution (CISR) underspent its 2022 budget by $4.8 

million, largely due to delays in awarding contracts for human resources management, franchise 

marketing support, and communications advisory services.

o OCISO underspent its budget by $4.5 million, largely due to lower than anticipated costs for security 

reviews, lower-than-budgeted expenses for contract transitions, and project delays.

o The Division of Resolutions and Receiverships (DRR) underspent its budget by $3.6 million, largely due to 

delays in awarding contracts for advisory services, IT security and privacy support, an asset and portfolio 

management platform, crypto asset assistance, an ORE oil and gas auctioneering platform, and imaging 

and indexing vendors.

• Travel spending was under budget by $44.5 million, or 69 percent, due to underspending in all organizations 

as the result of pandemic-related travel restrictions that extended through the first nine months of 2022. 

• Buildings and Leased Space spending was under budget by $33.7 million, or 23 percent, primarily due to 

delays or slower-than-anticipated progress in Headquarters and Regional Office capital improvement 

projects, Field Office Modernization projects, and Headquarters space consolidation projects. Major factors 

causing delays included lengthy negotiations with NTEU on space plans, delays in building permitting and 

labor contracting, and supply chain issues.

• Equipment spending was under budget by $19.9 million, or 14 percent, primarily attributable to reduced 

furniture and equipment purchases for the F Street Modernization and other Headquarters space 

modernization projects in DOA; delays in the development of Virtual Onboarding Platform modules in DOA; 

delays in Field Office Modernization projects due to supply chain issues in both DOA and DIT; and cost 

optimization of hardware maintenance agreements and lower-than-projected wide area network transition 

costs in DIT. 

• Outside Services - Other spending was under budget by $5.5 million, or 30 percent, mostly due to delays in 

the transition of voice communications to new technology in DIT and cost savings on cell phones in DIT. 
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Receivership Funding

The Receivership Funding component of the 2022 FDIC 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 expenses for permanent employees assigned to the 

receivership management function and other expenses required to ensure readiness without regard to whether 

failures occur. 

Overall spending for the Receivership Funding budget component in 2022 totaled $24.5 million, or 67 percent 

below budget. Almost all of the variance occurred in the Outside Services – Personnel major expense category, 

for which spending was under budget by $47.9 million, or 68 percent. This included $21.2 million in unused 

contingency reserves; $12.1 million in underspending in the Legal Division as a result of lower-than-projected 

litigation expenses; and $14.6 million in underspending in DRR, DIT and DOA due to lower-than-budgeted bank 

failure activity. 

Office of the Inspector General

There were no significant spending variances in the 2022 Office of Inspector General (OIG) budget component. 

Significant Spending Variances by Division/Office1

Ten organizations had significant spending variances for 2022: 

• DOA underspent its budget by $65.4 million, or 18 percent, primarily in the Ongoing Operations budget 

component, including $33.5 million in its Buildings and Leased Space budget, $11.5 million in its Equipment 

budget, $10.6 million in its Outside Services-Personnel budget, and $6.9 million in its Salaries and 

Compensation budget for the reasons stated above.

• The Division of Risk Management Supervision (RMS) underspent its budget by $52.3 million, or nine percent, 

in the Ongoing Operations budget component, primarily attributable to underspending of $29.7 million in its 

Travel budget and $20.9 million in its Salaries and Compensation budget for the reasons stated above. In 

addition, RMS underspent $1.3 million in its Other Expenses budget due to underuse of Personal Learning 

Account (PLA) funding as a result of travel restrictions and workload issues. 

• DIT underspent its budget by $47.0 million, or 12 percent, primarily attributable to underspending in the 

Ongoing Operations budget component. This included underspending of $24.6 million in its Outside Services 

- Personnel budget, $7.6 million in its Equipment budget, $5.0 million in its Salaries and Compensation 

budget, and $4.3 million in the Outside Services – Other budget for the reasons stated above. In addition, DIT 

underspent its Outside Services-Personnel budget in the Receivership Funding budget component by $4.4 

million due to lower-than-projected bank failure activity. 

• The Legal Division underspent its budget by $24.3 million, or 15 percent, including $12.1 million in its Ongoing 

Operations budget and $12.2 million in its Receivership Funding budget. The underspending in the Ongoing 

Operations budget component included $6.1 million in its Salaries and Compensation budget and $4.8 

million in the Outside Services-Personnel budget for the reasons stated above. The underspending in the 

 

1

Information on division/office variances reflects variances in the FDIC Operating Budget and does not include variances related to 

approved multi-year investment projects. 
6

Receivership Funding budget was mostly in its Outside Services-Personnel budget ($12.1 million) because of

the absence of bank failures, pandemic-related and other court-imposed delays in litigation, and the 

handling of a significant number of cases in-house. 

• DRR underspent its budget by $21.0 million, or 16 percent, including $9.5 million in its Ongoing Operations 

budget and $11.5 million in its Receivership Funding budget. The underspending in the Ongoing Operations 

budget included $4.9 million in its Salaries and Compensation budget, $3.6 million in its Outside ServicesPersonnel budget and $841,000 in its Travel budget for the reasons stated above. The underspending in the 

Receivership Funding budget included $9.5 million in its Outside Services-Personnel budget, $1.0 million in 

its Other Expenses budget, and $270,000 in its Travel budget, all due to lower–than-projected bank failure 

activity.

• The Division of Depositor and Consumer Protection (DCP) underspent its budget by $17.5 million, or nine 

percent, in the Ongoing Operations budget component. This was primarily attributable to underspending of 

$8.0 million in the Salaries and Compensation budget and $7.3 million in the Travel budget for the reasons 

stated above.

• CISR underspent its budget by $16.0 million, or 15 percent, in the Ongoing Operations budget component, 

primarily due to underspending of $9.3 million in its Salaries and Compensation budget, $4.8 million in the 

Outside Services-Personnel budget, and $1.7 million in the Travel budget for the reasons stated above.

• The Division of Insurance and Research (DIR) underspent its budget by $7.8 million, or 12 percent, in the 

Ongoing Operations budget component, primarily attributable to underspending of $5.9 million in its Salaries 

and Compensation budget and $830,000 in its Travel budget for the reasons stated above. 

• The Executive Support Offices (EXS) underspent their budgets by $6.8 million, or 18 percent, in the Ongoing 

Operations budget component. This was primarily due to underspending of $3.4 million in its Salaries and 

Compensation budget for the reason stated above and $2.1 million in its Outside Services-Personnel budget 

due to a delay in the start of the Web Content Management System (CMS) pilot project and lower-thananticipated expenses for DEIA Training, Consulting and Outreach events. 

• OCISO underspent its budget by $5.3 million, or 11 percent, primarily in the Ongoing Operations budget 

component, largely attributable to underspending of $4.5 million in its Outside Services - Personnel budget 

for the reasons stated above. 
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The FDIC provides certain 

life and dental insurance 

coverage for its eligible 

retirees, the retirees’ 

beneficiaries, and covered 

dependents. During 2022, 

the postretirement 

benefit liability decreased 

by $100 million primarily 

due to an increase in the 

discount rate that is used 

to present value expected 

benefit payments. The 

discount rate increased 

from 2.82 percent to 5.27 

percent at year-end 2022.
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Assessment 

revenue was 

$8.3 billion for 

2022, 

compared to 

$7.1 billion for 

2021. The $1.2 

billion year-

over-year 

increase was 

primarily due 

to higher 

assessment 

base and rates. 
9

12/31/22 9/30/22 Change

Par Value $129,036 $125,471 $3,565

Amortized Cost $128,188 $125,777 $2,411

Total Market Value (including accrued interest) $125,706 $123,054 $2,652

Primary Reserve 1$125,706 $123,054 $2,652

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

Yield-to-Maturity 1.865% 1.351% 0.514%

Weighted Average Maturity (in years) 1.21 1.14 0.07

Effective Duration (in years)

 Total Portfolio 1.16 1.09 0.07

 Available-for-Sale Securities 21.22 1.15 0.07

2

 Excludes any overnight investments.

12/31/22 9/30/22 Change

FRF-FSLIC

 Book Value 4 $897 $888 $9

 Yield-to-Maturity 3.95% 2.72% 1.23%

 Weighted Average Maturity overnight overnight no change

12/31/22 9/30/22 Change

Book Value 5 $924 $1,013 ($89)

Effective Annual Yield 3.73% 2.51% 1.22%

Weighted Average Maturity (in days) 55 45 10

5

 Due to the short-term nature of the NLF portfolio, its Book and Market Values are identical for reporting purposes.

Summary of Other Corporate Investment Portfolios

(Dollar Values in Millions)

4

 Due to the current short-term nature of this portfolio, its respective Par, Book, and Market Values are identical for reporting purposes.

Deposit Insurance Fund Portfolio Summary

(Dollar Values in Millions)

1

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

held-to-maturity securities maturing within three months.

National Liquidation Fund (NLF) Investment Portfolio Summary

(Dollar Values in Millions)
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DEPOSIT INSURANCE FUND

Invest up to $23 billion (par value) in AFS securities with maturities between March 31, 

2023 and October 1, 2027. 

Invest up to $21 billion (par value) in AFS securities with maturities between June 30, 

2023 and January 1, 2028. 

NATIONAL LIQUIDATION FUND

Maintain a minimum of $200 million in the Government Money Market Mutual Funds and a 

maximum of $600 million in Agency Discount Notes.

No strategy changes for the first quarter of 2023.

Investment Strategies

Strategy Changes for the 1st Quarter 2023

Strategy for the 4th Quarter 2022

Strategy for the 4th Quarter 2022

Strategy Changes for the 1st Quarter 2023
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* Totals may not foot due to rounding.

Annual YTD YTD % of YTD YTD

Major Expense Category Budget Budget Expenditures Budget Used Variance

FDIC Operating Budget 

Ongoing Operations

Salaries & Compensation $1,382,125 $1,382,125 $1,302,777 94% ($79,347)

Outside Services - Personnel 371,563 371,563 274,541 74% (97,022)

Travel 64,101 64,101 19,596 31% (44,506)

Buildings 147,412 147,412 113,754 77% (33,658)

Equipment 142,392 142,392 122,446 86% (19,946)

Outside Services - Other 18,135 18,135 12,684 70% (5,451)

Other Expenses 14,636 14,636 10,333 71% (4,303)

 Total Ongoing Operations * $2,140,363 $2,140,363 $1,856,131 87% ($284,232)

Receivership Funding

Salaries & Compensation 543 543 7 1% (535)

Outside Services - Personnel 70,419 70,419 22,489 32% (47,930)

Travel 448 448 97 22% (351)

Buildings 177 177 66 37% (111)

Equipment 2,174 2,174 1,744 80% (430)

Outside Services - Other 181 181 93 52% (88)

Other Expenses 1,057 1,057 36 3% (1,021)

 Total Receivership Funding * $75,000 $75,000 $24,533 33% ($50,467)

Office of Inspector General

Salaries & Compensation 38,447 38,447 37,416 97% (1,031)

Outside Services - Personnel 3,541 3,541 1,165 33% (2,375)

Travel 1,420 1,420 860 61% (559)

Buildings 0 0 0 0% 0

Equipment 2,807 2,807 2,224 79% (584)

Outside Services - Other 5 5 1 10% (5)

Other Expenses 757 757 567 75% (191)

 Total Office of Inspector General * $46,976 $46,976 $42,232 90% ($4,744)

Total FDIC Operating Budget * $2,262,339 $2,262,339 $1,922,896 85% ($339,443)

Executive Summary of 2022 Budget and Expenditures

by Budget Component and Major Expense Category

Through December 31, 2022

(Dollars in Thousands)
12

1) Executive Support includes the Offices of Minority and Women Inclusion, Communications, Ombudsman, Legislative Affairs, and Financial Institution 

Adjudication. Note: FDITECH was included as an Executive Support Office before being aligned under the Division of Information Technology in July 2022.

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, Deputy to the Chairman for Policy, Deputy to the Chairman for External Affairs, Deputy to the Chairman for 

Financial Stability, and Chief Information Officer/Chief Privacy Officer.

3) This includes a $36.7 million contingency reserve in the Ongoing Operations budget component and a $21.2 million contingency reserve in the 

Receivership Funding budget component to meet unanticipated budget requirements that may arise during the year.

4) Totals may not foot due to rounding.

Annual YTD YTD % of YTD YTD

Division/Office Budget Budget Expenditures Budget Used Variance

 FDIC Operating Budget 

 Risk Management Supervision $ 583,950 $ 583,950 $ 531,698 91% $ (52,252)

 Information Technology 388,614 388,614 341,647 88% (46,967)

 Administration 360,601 360,601 295,191 82% (65,410)

 Depositor & Consumer Protection 187,339 187,339 169,802 91% (17,537)

 Legal 163,765 163,765 139,478 85% (24,287)

 Resolutions & Receiverships 132,310 132,310 111,308 84% (21,002)

 Complex Institution Supervision & Resolution 104,849 104,849 88,822 85% (16,027)

 Insurance & Research 64,615 64,615 56,828 88% (7,787)

 Inspector General 46,976 46,976 42,232 90% (4,744)

 Chief Information Security Officer 49,112 49,112 43,767 89% (5,345)

 Executive Support 1

 37,342 37,342 30,519 82% (6,823)

 Finance 38,266 38,266 34,435 90% (3,831)

 Corporate University - Corporate 25,283 25,283 21,576 85% (3,707)

 Executive Offices 2

 12,940 12,940 9,028 70% (3,912)

 Risk Management & Internal Control 8,447 8,447 6,565 78% (1,882)

 Corporate Unassigned 3

 57,930 57,930 0 0% (57,930)

 Total FDIC Operating Budget 4

$ 2,262,339 $ 2,262,339 $ 1,922,896 85% $ (339,443)

Executive Summary of 2022 Budget and Expenditures

by Division/Office

Through December 31, 2022

(Dollars in Thousands)