Federal Deposit Insurance Corporation 

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

 

 November 8, 2013 

MEMORANDUM TO: The Board of Directors 

FROM: Steven O. App 

Deputy to the Chairman and 

Chief Financial Officer 

Craig R. Jarvill 

Director, Division of Finance 

SUBJECT: Third Quarter 2013 CFO Report to the Board 

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

September 30, 2013. 

Executive Summary 

 During the third quarter of 2013, the Deposit Insurance Fund (DIF) balance increased by $2.9 

billion, from $37.9 billion to $40.8 billion. This quarterly increase was primarily due to $2.3 

billion of assessment revenue, a $539 million decrease in the provision for insurance losses, 

and a $156 million net realized gain on sale of trust preferred securities (TruPs), partially offset 

by $298 million of operating expenses. 

 

 During the third quarter of 2013, the FDIC was named receiver for 6 failed institutions. The 

combined assets at inception for these institutions totaled approximately $3.8 billion with a 

total estimated loss of $775 million. The corporate cash outlay during the third quarter for 

these failures was approximately $1.1 billion. 

 Through September 30, 2013, overall Corporate Operating Budget expenditures were below 

budget by 15 percent ($296 million), largely due to substantial under-spending in the 

Receivership Funding budget component. Spending in that component was $176 million, or 

27 percent, less-than-budgeted, while spending in the Ongoing Operations component was 

$121 million, or 9 percent, under budget. The variance in the Receivership Funding 

component was primarily due to less costly resolutions and lower-than-anticipated asset 

management and marketing and contract support costs for failed bank resolutions. 
2

I. Corporate Fund Financial Results (See pages 9 - 10 for detailed data and charts.) 

Deposit Insurance Fund 

 For the nine months ending September 30, 2013, the DIF’s comprehensive income totaled 

$7.8 billion compared to comprehensive income of $13.4 billion for the same period last year. 

This $5.6 billion decrease was mostly due to a decrease in other revenue of $4.1 billion, and a 

$2.0 billion decrease in assessment revenue, partially offset by a decrease in provision for 

insurance losses of $192 million and a $136 million decrease in operating expenses. 

 

 The year-over-year decrease of $4.1 billion in other revenue was primarily due to the 

recognition of $4.0 billion in revenue in June 2012 for the Debt Guarantee Program fees that 

were previously held as systemic risk deferred revenue. 

 The provision for insurance losses was negative $539 million for the third quarter of 2013. The 

negative provision primarily resulted from a $440 million decrease in the contingent loss 

reserve due to lower estimated losses from anticipated future failures. 

 On September 9, 2013, the FDIC exchanged the Citigroup TruPs with a par value of $2.225 

billion held by the Corporation for subordinated notes with a par value of $2.420 billion from 

Citigroup. The carrying book value of the TruPs was $1.962 billion resulting in a gain on the 

exchange of $458 million, which was offset by a reclassification of accumulated unrealized 

gain of $302 million. Thus, the effect to the DIF fund balance was a net realized gain of $156 

million. Subsequently, on September 10, 2013, the subordinated notes were sold at par to the 

institutional fixed income market for $2.420 billion. 

FSLIC Resolution Fund (FRF) 

 After evaluating FRF’s remaining assets and liabilities, the FDIC returned $2.6 billion to the 

U.S. Treasury on behalf of the FRF- FSLIC and paid $125 million to REFCORP on behalf of 

FRF-RTC in the third quarter 2013. 

 During September, FRF paid $501 thousand to a plaintiff in a goodwill case, representing 

reimbursement for a tax liability incurred on a $181 million settlement that occurred in 2012. 

Assessments

 During the third quarter of 2013, the DIF recognized a total of $2.3 billion in assessment 

revenue. The estimate for third quarter 2013 insurance coverage totaled $2.4 billion. 

Additionally, the DIF recognized a net adjustment of $56 million that reduced assessment 

revenue. This adjustment consisted of $7 million in prior period amendments and a $49 million 

decrease to the estimate for second quarter 2013 insurance coverage recorded at June 30, 

2013. The latter adjustment was due to lower average assessment rates for large banks.

 On September 30, 2013, the FDIC collected $2.5 billion in DIF assessments for second 

quarter 2013 insurance coverage. For the first time since the collection date of March 30, 

2010, there were no prepaid assessments reducing the quarterly collection amount.

 
3

II. Investment Results (See pages 11 - 12 for detailed data and charts.)

DIF Investment Portfolio 

 

 On September 30, 2013, the total liquidity (also total market value) of the DIF investment 

portfolio stood at $38.4 billion, slightly higher than its December 31, 2012, balance of $38.2 

billion. 

 

 On September 30, 2013, the DIF investment portfolio’s yield was 0.42 percent, up six basis 

points from its December 31, 2012, yield of 0.36 percent. During the first nine months of the 

year, newly purchased Treasury securities generally had somewhat higher yields than maturing 

securities, primarily contributing to the increase in portfolio yield. 

 In accordance with the approved third quarter 2013 DIF portfolio investment strategy, staff 

purchased a total of eighteen short-maturity conventional Treasury securities and one Treasury 

Inflation-Protected Security (TIPS). The nineteen securities had a total par value of $8.9 billion, 

a weighted average yield of 0.72 percent, and a weighted average maturity (WAM) of 2.70 

years. 

 

III. Budget Results (See pages 13 - 14 for detailed data.) 

Approved Budget Modifications 

The 2013 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other 

officials the authority to make certain modifications to the 2013 Corporate Operating Budget. The 

following budget reallocations were approved during the third quarter in accordance with the 

authority delegated by the Board of Directors. None of these modifications changed the total 

2013 Corporate Operating Budget as approved by the Board in December 2012.

 In August, the CFO approved the reallocation of $133,000 within the Ongoing Operations 

budget component from the Corporate Unassigned budget to the Salaries and 

Compensation budget of the Executive Offices to provide funding for expenses associated 

with the new Chief Information Officer (CIO) position. 

 In September, in conjunction with the establishment of the Information Security and 

Privacy Staff (ISPS) as an independent organizational entity, separate from the Division of 

Information Technology (DIT), the CFO approved the reallocation of $11,009,229 within 

the Ongoing Operations and Receivership Funding budget components from the DIT 

budget to the ISPS budget to support the transfer of information security and privacy 

functions and staff, including 35 authorized positions, from DIT to ISPS. This adjustment 

realigned budget authority within the Salaries and Compensation, Outside ServicesPersonnel, Travel, Outside Services – Other, and Other Expenses categories in the 

Ongoing Operations budget and the Salaries and Compensation category in the 

Receivership Funding budget component. 

 In September, the CFO approved the reallocation of $1,517,156 in budget authority within 

the Ongoing Operations component of the 2013 Corporate Operating Budget from the 

Office of International Affairs (OIA) budget to the Division of Insurance and Research (DIR) 

Ongoing Operations budget in conjunction with the integration of OIA functions and staff 

(including 13 authorized positions) into the DIR. 
4

Following these reallocations, the amounts remaining available within the Corporate 

Unassigned budgets for the Ongoing Operations and Receivership Funding budget 

components were $ 25,706,393 and $ 14,343,746, respectively. 

Approved Staffing Modifications 

The 2013 Budget Resolution delegated to the CFO the authority to modify approved 2013 

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

the total approved 2013 Corporate Operating Budget. The following staffing adjustments were 

approved during the third quarter in accordance with the authority delegated by the Board of 

Directors. None of these modifications changed the total 2013 Corporate Operating Budget 

approved by the Board in December 2012. 

 In July, the CFO approved a total increase of 21 authorized positions (5 permanent, 16 

non-permanent). Fourteen positions (1 permanent, 13 non-permanent) were added to the 

Division of Risk Management Supervision’s (RMS) 2013 staffing authorization, including an 

additional permanent Executive Manager position in the Large Bank Supervision Branch to 

alleviate supervisory span of control concerns, 3 non-permanent positions to provide 

administrative support for the Complex Financial Institutions (CFI) Branch, 4 nonpermanent research assistant positions to enhance horizontal analysis capabilities in CFI’s 

Risk Analytics Section, 3 non-permanent policy analysts in the Capital Markets Branch to 

support current rulemaking workload associated with Basel III and Dodd-Frank Act 

implementation, 1 non-permanent Supervisory Examination specialist in the Internal 

Controls and Review Section, 1 non-permanent Program Analyst to assist the community 

banking initiative in the Risk Management Policy Branch, and 1 non-permanent Financial 

Analyst position in the Atlanta Regional Office. Four permanent positions were added to 

DOA’s 2013 staffing authorization, three to provide expanded staff support for Corporate 

Employee Program recruiting and hiring and one to support DOA’s expanded internal and 

interagency responsibilities for cyber security. Three non-permanent positions were added 

to the Division of Depositor and Consumer Protection’s (DCP) 2013 staffing authorizations 

to support temporary workload associated with the FDIC’s Alliance for Economic Inclusion 

Initiatives, enhanced data management and reporting for the examination function, and 

expanded statistical analysis capabilities in the Consumer Research and Examination 

Analytics Section. 

 In August, following the Chairman’s decision to separate the positions of CIO and DIT 

Director, the CFO approved an increase of one authorized permanent position in the 

Executive Offices for the new CIO. 

 

 In September, as noted above, the CFO approved the transfer of 35 previously-authorized 

positions (30 permanent, 5 non-permanent) from DIT to the newly established ISPS. In 

addition, following the organizational realignment that merged OIA into DIR, the CFO 

approved the transfer of 13 previously authorized positions (11 permanent, 2 nonpermanent) from OIA to DIR. 

 In September, the CFO approved an increase of 5 non-permanent positions in RMS’s 2013 

staffing authorization to provide additional resources in the Large Bank Supervision Branch 

to carry out the FDIC’s expanded responsibilities under the Dodd Frank Act for oversight 

and resolution planning for more than 100 foreign banking organizations. 
5

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, 2013, are 

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

two 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 four 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 six of the seven major expense categories in the 

Ongoing Operations component of the 2013 Corporate Operating Budget through the third 

quarter. 

 Salaries and Compensation ($45 million, or 5 percent, less than budgeted). The most 

significant variances in this expense category were in RMS ($14 million), the Legal Division 

($8 million), DCP ($5 million), DIT ($4 million), the Division of Resolutions and 

Receivership (DRR) ($3 million), and DIR ($3 million). Under spending in this expense 

category was largely attributable to vacancies in budgeted positions. 

 Outside Services – Personnel ($31 million, or 16 percent, less than budgeted). The CIO 

Council spent $7 million less than budgeted, largely due to lower-than-planned spending 

on discretionary systems development projects and the Information Management and 

Compliance (IMAC) project. The Division of Administration (DOA) spent $7 million less 

than budgeted, largely due to lower-than-anticipated contract expenses for services 

associated with the Student Residence Center, security, and human resources and career 

counseling; cancellation of pre-retirement seminars due to low enrollment; a decline in 

administrative support requirements performed by contractors; reduced contractor billings 

because of delays in completing security clearances prior to bringing replacement contract 

personnel on board; and significant savings from using FDIC staff rather than contractors 

to prepare pre-retirement estimates and update the FDIC’s Human Capital Plan. DRR 

spent $4 million less than budgeted due to lower than anticipated expenses for business 

process improvements, IT security, web business support services, and data contracts, 

and delays in starting work on budgeted advisory services contracts in support of 

enhanced large bank resolutions procedures. OCFI spent $3 million less than budgeted 

due to a project cancellation and the successful renegotiation of an existing contract to 

provide for lower monthly payment terms. 

 Travel expenditures ($12 million, or 16 percent, less than budgeted). This variance was 

largely due to vacancies in non-permanent field examination positions in RMS and DCP 

and vacancies in DCP’s Washington office that led to lower-than-projected regular duty 

and relocation travel expenses. Travel expenses were also lower-than-budgeted for 

Financial Institution Specialists in the Corporate Employee Program (CEP) in the 

Corporate University (CU). DRR spending in this expense category was also $1 million 

lower-than-anticipated for regular duty travel and relocation costs. 

 Building expenditures ($7 million, or 10 percent, less than budgeted). This variance was 

largely due to delays in the Student Residence Center pipe replacement project, a design 

change in the Headquarters HVAC replacement project; delays in awarding a contract for 
6

the Building Management System (BMS) project in the San Francisco Regional Office, and 

lower-than-projected utilities consumption. 

 Equipment expenditures ($19 million, or 32 percent, less than budgeted). DIT spent $14 

million less than budgeted primarily because of delays in planned purchases of hardware 

and software, including hardware/software for the technical refresh project. Those 

purchases are now expected to occur in the fourth quarter. In addition, DOA spent $5 

million less than budgeted due to intentional deferral of furniture purchases until later in the 

year and reduced lease costs due to the conversion of a large number of copiers from 

lease to ownership. 

 Other Expenses ($4 million, or 30 percent, less than budgeted). The variance was mostly 

due to substantial underutilization of the Professional Learning Accounts by employees 

and lower-than-projected corporate office supply purchases by DOA. 

Receivership Funding 

The Receivership Funding component of the 2013 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 six of the seven major expense categories 

through the third quarter in the Receivership Funding component of the 2013 Corporate 

Operating Budget: 

 Salaries and Compensation ($13 million, or 9 percent, less than budgeted). This 

variance was attributable to vacancies in budgeted non-permanent positions, primarily 

in the temporary satellite offices. 

 Outside Services-Personnel ($130 million, or 30 percent, less than budgeted). This 

variance was attributable to less costly resolutions expenses and lower-thananticipated asset management and marketing costs incurred under contracts for 

receivership assistance, due diligence, owned real estate (ORE), loan servicing, review 

of loss share agreements, and securitizations. 

 Travel ($9 million, or 54 percent, less than budgeted). This variance was attributable to 

lower-than-budgeted failed bank activity. 

 Buildings ($6 million, or 21 percent, less than budgeted). This variance was 

attributable to lower-than-budgeted failed bank activity. 

 Equipment ($3 million, or 36 percent, less than budgeted). This variance resulted from 

earlier-than-expected termination of operations at the site of failed banks. 

 Other Expenses ($14 million, or 46 percent, less than budgeted). This variance also 

reflected reduced operational costs at failed bank sites due to the earlier-thananticipated transfer of failed bank operations to the Dallas office and the quicker 

disposition of failed bank assets. 
7

Significant Spending Variances by Division/Office1

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

 DRR ($181 million, or 31 percent, less than budgeted). Approximately $172 million of this 

under spending was in the Receivership Funding Budget component due to lower-thananticipated resolutions and receivership expenses and workload, as explained above. 

 DOA ($25 million, or 12 percent, less than budgeted). This variance was largely 

attributable to lower-than-anticipated costs in the Outside Services-Personnel, Buildings, 

and Equipment expense categories, as explained above, and lower-than-expected 

expenses to support bank closings in the Receivership Funding budget component, due in 

part to fewer-than-projected bank closings and the smaller average size of bank failures. 

 DIT ($23 million, or 12 percent, less than budgeted). This variance was largely 

attributable to delays in hardware and software purchases, lower-than-budgeted support 

costs for failed financial institutions, and vacancies in budgeted positions. 

 RMS ($21 million, or 5 percent, less than budgeted). This variance was largely attributable 

to vacancies in budgeted non-permanent examination positions and lower-than-budgeted 

examination travel expenses associated with those vacancies. 

 DCP ($8 million or 6 percent less than budgeted). This variance was primarily attributable 

to vacancies in budgeted field examination and Washington office positions and lowerthan-budgeted spending for regular duty and relocation travel associated with those 

vacancies. 

 CIO Council ($6 million, or 12 percent, less than budgeted). This variance was largely due 

to lower-than-planned spending on discretionary systems development projects and the 

Information Management and Compliance (IMAC) project. 

 OCFI ($6 million, or 21 percent, less than budgeted). This variance was largely 

attributable to vacancies in budgeted positions and lower-than-budgeted spending for 

contractual services and relocation travel. 

 DIR ($4 million, or 12 percent, less than budgeted). This variance was primarily 

attributable to vacancies in budgeted positions due to slower-than-projected hiring to fill 

those vacancies. 

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

attributable to vacancies in budgeted positions due to slower-than-expected hiring to fill 

those vacancies. 

 CU-CEP ($3 million, or 21 percent, less than budgeted). This variance was primarily due 

to lower than budgeted expenses for Salaries and Compensation and Travel for Financial 

Institution Specialists due to the cancellation of one budgeted class. 

 

1

 Information on division/office variances reflects variances in both the Ongoing Operations and Receivership 

Funding components of the 2013 Corporate Operating Budget. 
8

 Office of Inspector General ($3 million, or 11 percent, less than budgeted). This variance 

was attributable to vacancies in budgeted positions and lower-than-projected travel 

expenses. 

 The combined Executive Support Offices ($4 million, or 16 percent, less than budgeted). 

This variance was mostly attributable to lower-than-budgeted spending for contract 

services by the Office of Corporate Risk Management and the Office of Minority and 

Women Inclusion and slower-than-projected hiring to fill budgeted positions. 
FDIC CFO REPORT TO THE BOARD – Third Quarter 2013 

Fund Financial Results ($ in Millions) 

9

The decline in both the 

gross revenue and the 

effective assessment rate 

was primarily attributed to 

the overall improving 

health of the banking 

industry.

Estimated

Balance Sheet

Unaudited Unaudited Quarterly Unaudited Year-Over-Year

Sep-13 Jun-13 Change Sep-12 Change

Cash and cash equivalents 5,330 $ 531 $ 4,799 $ 1,587 $ 3,743 $ 

Cash and investments - restricted - systemic risk - - - 1,115 (1,115) 

Investment in U.S. Treasury obligations, net 32,729 33,286 (557) 35,460 (2,731) 

Trust preferred securities - 2,240 (2,240) 2,255 (2,255) 

Assessments receivable, net 2,391 2,594 (203) 660 1,731 

Receivables and other assets - systemic risk - - - 1,568 (1,568) 

Interest receivable on investments and other assets, net 409 533 (124) 462 (53) 

Receivables from resolutions, net 16,938 18,442 (1,504) 18,948 (2,010) 

Property and equipment, net 373 376 (3) 379 (6) 

Total Assets $ 58,002 58,170 $ 168 $ 62,434 $ (4,264) $ 

Accounts payable and other liabilities 265 296 (31) 346 (81) 

Unearned revenue - prepaid assessments - - - 9,219 (9,219) 

Refunds of prepaid assessments - - - - - 

Liabilities due to resolutions 15,754 17,179 (1,425) 21,215 (5,461) 

Deferred revenue - systemic risk - - - 2,682 (2,682) 

Postretirement benefit liability 224 224 - 188 36 

Contingent liability for anticipated failures 1,164 2,426 (1,262) 3,556 (2,392) 

Contingent liability for litigation losses 5 6 (1) 4 1 

Total Liabilities $ 20,131 17,412 $ (2,719) $ 37,210 $ (19,798) $ 

FYI: Unrealized gain (loss) on U.S. Treasury investments, net 39 (8) 47 65 (26) 

FYI: Unrealized gain (loss) on trust preferred securities - 278 (278) 293 (293) 

FYI: Unrealized postretirement benefit (loss) gain (61) (61) - (34) (27) 

Fund Balance $ 37,871 40,758 $ 2,887 $ 25,224 $ 15,534 $ 

Deposit Insurance Fund
10

Fund Financial Results - continued ($ in Millions) 

• The DIF has recognized total 

revenue of $3.310 billion 

($2.420 billion exchange and 

$890 million in interest 

revenue) for the TruPs

acquired as part of the 2009 

Citigroup loss protection 

guarantee. 

• The FDIC disposed of the 

TruPs on September 9, 2013, 

by transferring to Citigroup the 

TruPs with a par value of 

$2.225 billion in exchange for 

subordinated notes with a par 

value of $2.420 billion. The 

subordinated notes were 

subsequently sold by the FDIC 

to institutional investors on 

September 13, 2013.

Income Statement (year-to-date)

Unaudited Unaudited Quarterly Unaudited Year-Over-Year

Sep-13 Jun-13 Change Sep-12 Change

Assessments 7,510 $ 5,171 $ 2,339 9,460 $ (1,950) $ 

Systemic risk revenue - - - (4) 4 

Interest on U.S. Treasury obligations 79 45 34 93 (14) 

Realized gain on sale of TruPs (includes a $302 million 

reclassification of accumulated unrealized gain) 156 - 156 - 156 

Other revenue 156 110 46 4,218 (4,062) 

Total Revenue $ 5,326 7,901 $ 2,575 13,767 $ (5,866) $ 

Operating expenses 1,173 875 298 1,309 (136) 

Systemic risk expenses - - - (4) 4 

Provision for insurance losses (1,071) (532) (539) (879) (192) 

Insurance and other expenses 4 4 - 3 1 

Total Expenses and Losses $ 347 106 $ (241) 429 $ (323) $ 

Net Income (Loss) 4,979 7,795 2,816 13,338 (5,543) 

Unrealized gain (loss) on U.S. Treasury investments, net 5 (42) 47 17 (12) 

Unrealized gain (loss) on trust preferred securities - (24) 24 42 (42) 

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

Comprehensive Income (Loss) $ 4,913 7,800 $ 2,887 13,397 $ (5,597) $ 

Deposit Insurance Fund

Selected Financial Data

Unaudited Unaudited Quarterly Unaudited Year-Over-Year

Sep-13 Jun-13 Change Sep-12 Change

Cash and cash equivalents 871 $ 3,596 $ (2,725) $ 3,594 $ (2,723) $ 

Accumulated deficit (124,459) (124,459) - (124,460) 1 

Total resolution equity 874 3,598 (2,724) 3,596 (2,722) 

Total revenue 2 2 - 4 (2) 

Operating expenses 1 1 - 4 (3) 

Goodwill litigation expenses 1 1 - 181 (180) 

Recovery of tax benefits - - - - - 

Net Income (Loss) 1 $ 1 $ - $ (180) $ 181 $ 

FSLIC Resolution Fund

Receivership Selected Statistics September 2013 vs. September 2012

 ($ in millions) Sep-13 Sep-12 Change Sep-13 Sep-12 Change Sep-13 Sep-12 Change

Total Receiverships 482 462 20 2 4 (2) 484 466 18

Assets in Liquidation 13,783 $ 18,158 $ (4,375) $ 6 $ 7 $ (1) $ 13,789 $ 18,165 $ (4,376) $ 

YTD Collections 5,483 $ 6,337 $ (854) $ 3 $ 18 $ (15) $ 5,486 $ 6,355 $ (869) $ 

YTD Dividend/Other Pmts - Cash 3,173 $ 3,917 $ (744) $ - $ - $ - $ 3,173 $ 3,917 $ (744) $ 

DIF FRF ALL FUNDS
11

9/30/13 12/31/12 Change

Par Value $36,864 $37,086 ($222)

Amortized Cost $38,007 $37,927 $80

Total Market Value (including accrued interest) $38,351 $38,249 $102

Primary Reserve 1 $38,351 $38,249 $102

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

Yield-to-Maturity 2 0.42% 0.36% 0.06%

Weighted Average Maturity (in years) 1.16 0.68 0.48

Effective Duration (in years)

 Total Portfolio 1.13 0.66 0.47

 Available-for-Sale Securities 1.31 0.72 0.59

 Held-to-Maturity Securities 3 not applicable not applicable not applicable

9/30/13 12/31/12 Change

FRF-FSLIC

 Book Value 4 $825 $3,425 ($2,600) 5

 Yield-to-Maturity 0.02% 0.00% 0.02%

 Weighted Average Maturity overnight overnight no change

9/30/13 12/31/12 Change

Book Value 6 $14,291 $14,702 ($411)

Effective Annual Yield 0.09% 0.12% (0.03%)

Weighted Average Maturity (in days) 39 20 19

6 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)

4

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

purposes.

2

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

an average 2.0% annual increase in the CPI over the remaining life of each TIPS.

5

 As mentioned on page 2, FDIC returned $2.6 billion to the U.S. Treasury.

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)

3

 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.
12

DEPOSIT INSURANCE FUND

Purchase up to $12 billion (par value) of Treasury securities with maturity dates between 

December 31, 2013, and June 30, 2018, subject to the following additional provisions: all 

newly purchased securities will be designated as available-for-sale (AFS); and no more than 

$3 billion (adjusted par value) of such securities shall consist of Treasury Inflation-Protected 

Securities (TIPS).

Purchase up to $14 billion (par value) of Treasury securities with maturity dates between 

March 31, 2014, and December 31, 2018, subject to the following additional provisions: all 

newly purchased securities will be designated as available-for-sale (AFS); and no more than 

$3 billion (adjusted par value) of such securities shall consist of Treasury Inflation-Protected 

Securities (TIPS).

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 third quarter of 2013.

Strategy Changes for 4th Quarter 2013

Investment Strategies

Strategy for 3rd Quarter 2013

Strategy for the 3rd Quarter 2013

Strategy Changes for 4th Quarter 2013
13

1) Budgets for investment projects are approved on a multi-year basis; the year-to-date budget amount reflects the 2013 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 $1,184,356 $880,258 $835,227 95% ($45,031)

Outside Services - Personnel 279,238 191,773 160,322 84% (31,451)

Travel 109,248 80,366 67,889 84% (12,477)

Buildings 91,634 67,469 60,612 90% (6,857)

Equipment 83,490 59,807 40,739 68% (19,068)

Outside Services - Other 18,029 13,444 11,466 85% (1,978)

Other Expenses 16,644 12,099 8,410 70% (3,689)

Total Ongoing Operations $1,782,639 $1,305,215 $1,184,665 91% ($120,550)

Receivership Funding

Salaries & Compensation $188,858 $141,299 $128,445 91% ($12,854)

Outside Services - Personnel 592,500 431,521 301,600 70% (129,922)

Travel 22,079 16,563 7,621 46% (8,942)

Buildings 37,418 28,273 22,242 79% (6,031)

Equipment 10,687 7,030 4,527 64% (2,503)

Outside Services - Other 6,386 4,787 3,724 78% (1,063)

Other Expenses 42,072 31,550 17,077 54% (14,473)

Total Receivership Funding $900,000 $661,024 $485,236 73% ($175,788)

Total Corporate Operating Budget $2,682,639 $1,966,239 $1,669,901 85% ($296,338)

Investment Budget 1 $22,031 $15,357 $16,214 106% $857

Grand Total $2,704,670 $1,981,596 $1,686,115 85% ($295,481)

Executive Summary of 2013 Budget and Expenditures

by Major Expense Category

Through September 30, 2013

(Dollars in Thousands)
14

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

Corporate Risk Management, and Information Security and Privacy Staff.

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, Chief Information 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 2013 spending estimates 

for approved projects. 

Annual YTD YTD % of YTD YTD

Division/Office Budget Budget Expenditures Budget Used Variance

 Corporate Operating Budget 

 Resolutions & Receiverships $779,124 $584,940 $403,956 69% ($180,984)

 Risk Management Supervision 548,331 409,116 388,119 95% (20,997)

 Legal 297,921 222,148 216,478 97% (5,670)

 Administration 266,890 200,260 175,441 88% (24,819)

 Information Technology 258,506 187,021 164,140 88% (22,881)

 Depositor & Consumer Protection 167,398 125,734 117,864 94% (7,870)

 CIO Council 72,236 52,697 46,275 88% (6,422)

 Insurance & Research 45,414 32,552 28,516 88% (4,036)

 Finance 41,581 30,831 27,471 89% (3,361)

 Complex Financial Institutions 35,639 29,326 23,250 79% (6,076)

 Inspector General 33,722 25,114 22,241 89% (2,873)

 Executive Support 1 40,766 25,428 21,391 84% (4,037)

 Corporate University - Corporate 23,506 17,595 15,607 89% (1,988)

 Corporate University - CEP 19,173 13,952 10,971 79% (2,981)

 Executive Offices 2 11,380 8,525 8,182 96% (343)

 Government Litigation 1,000 1,000 0 0% (1,000)

 Corporate Unassigned 40,050 0 0 N/A 0

 Total, Corporate Operating Budget $2,682,639 $1,966,239 $1,669,901 85% ($296,338)

 Investment Budget 3

 Information Technology $12,289 $9,698 $10,525 109% $827

 Administration 8,723 4,914 5,225 106% 311

 Corporate University - Corporate 605 352 298 85% (54)

 Risk Management Supervision 373 361 128 35% (233)

 Resolutions & Receiverships 32 32 22 69% (10)

 Depositor & Consumer Protection 10 0 16 N/A 16

 Total, Investment Budget 3 $22,031 $15,357 $16,214 106% $857

 Combined Division/Office Budgets

 Resolutions & Receiverships $779,156 $584,972 $403,978 69% ($180,994)

 Risk Management Supervision 548,704 409,477 388,247 95% (21,230)

 Legal 297,921 222,148 216,478 97% (5,670)

 Administration 275,613 205,174 180,666 88% (24,508)

 Information Technology 270,795 196,719 174,665 89% (22,054)

 Depositor & Consumer Protection 167,408 125,734 117,880 94% (7,854)

 CIO Council 72,236 52,697 46,275 88% (6,422)

 Insurance & Research 45,414 32,552 28,516 88% (4,036)

 Finance 41,581 30,831 27,471 89% (3,361)

 Complex Financial Institutions 35,639 29,326 23,250 79% (6,076)

 Inspector General 33,722 25,114 22,241 89% (2,873)

 Executive Support 1 40,766 25,428 21,391 84% (4,037)

 Corporate University - Corporate 24,111 17,947 15,905 89% (2,042)

 Corporate University - CEP 19,173 13,952 10,971 79% (2,981)

 Executive Offices 2 11,380 8,525 8,182 96% (343)

 Government Litigation 1,000 1,000 0 0% (1,000)

 Corporate Unassigned 40,050 0 0 N/A 0

 Grand Total $2,704,670 $1,981,596 $1,686,115 85% ($295,481)

Executive Summary of 2013 Budget and Expenditures

by Budget Component and Division/Office

Through September 30, 2013

(Dollars in Thousands)