V.

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FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 122 

Federal Deposit Insurance Corporation

Deposit Insurance Fund Balance Sheet 

As of December 31

(Dollars in Thousands)

ASSETS

 Cash and cash equivalents $ 2,599,206 $ 5,562,941

 Investment in U.S. Treasury securities (Note 3) 122,442,357 114,551,240

 Assessments receivable (Note 9) 2,159,249 1,710,549

 Interest receivable on investments and other assets, net 688,061 718,428

 Receivables from resolutions, net (Note 4) 520,555 885,354

 Property and equipment, net (Note 5) 360,141 327,127

 Operating lease right-of-use assets (Note 6) 92,406 85,238

Total Assets $ 128,861,975 $ 123,840,877

LIABILITIES

 Accounts payable and other liabilities $ 269,062 $ 256,205

 Operating lease liabilities (Note 6) 111,205 90,957

 Postretirement benefit liability (Note 13) 231,781 331,599

 Contingent liabilities:

 Anticipated failure of insured institutions (Note 7) 31,233 20,876

 Litigation losses (Note 7) 800 200

Total Liabilities 644,081 699,837

 Off-balance-sheet exposure (Note 14)

FUND BALANCE

 Accumulated Net Income 131,176,093 123,372,878

ACCUMULATED OTHER COMPREHENSIVE INCOME

Unrealized (loss) on U.S. Treasury securities, net (Note 3) (2,985,415) (149,115)

Unrealized postretirement benefit gain (loss) (Note 13) 27,216 (82,723)

Total Accumulated Other Comprehensive (Loss) (2,958,199) (231,838)

Total Fund Balance 128,217,894 123,141,040

Total Liabilities and Fund Balance $ 128,861,975 $ 123,840,877

The accompanying notes are an integral part of these financial statements.

2022 2021
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 123 

Federal Deposit Insurance Corporation

Deposit Insurance Fund Statement of Income and Fund Balance 

For the Years Ended December 31

(Dollars in Thousands)

REVENUE

 Assessments (Note 9) $ 8,310,816 $ 7,080,232

 Interest on U.S. Treasury securities 1,246,302 953,152

 Return of unclaimed insured deposits (Note 10) 37,913 103,439

 Other revenue 11,635 16,665

Total Revenue 9,606,666 8,153,488

EXPENSES AND LOSSES

 Operating expenses (Note 11) 1,882,884 1,842,723

 Provision for insurance losses (Note 12) (82,964) (143,681)

 Insurance and other expenses 3,531 6,306

Total Expenses and Losses 1,803,451 1,705,348

Net Income 7,803,215 6,448,140

OTHER COMPREHENSIVE INCOME

 Unrealized (loss) on U.S. Treasury securities, net (2,836,300) (1,219,064)

 Unrealized postretirement benefit gain (Note 13) 109,939 15,199

Total Other Comprehensive (Loss) (2,726,361) (1,203,865)

Comprehensive Income 5,076,854 5,244,275

Fund Balance - Beginning 123,141,040 117,896,765

Fund Balance - Ending $ 128,217,894 $ 123,141,040

The accompanying notes are an integral part of these financial statements.

2022 2021
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 124 

Federal Deposit Insurance Corporation

Deposit Insurance Fund Statement of Cash Flows

For the Years Ended December 31

(Dollars in Thousands)

OPERATING ACTIVITIES

Provided by:

 Assessments $ 7,862,116 $ 7,318,198

 Interest on U.S. Treasury securities 3,127,123 3,938,901

 Recoveries from financial institution resolutions 470,381 594,356

 Return of unclaimed insured deposits 37,913 103,439

 Miscellaneous receipts 1,833 2,284

Used by:

 Operating expenses (1,806,647) (1,775,301)

 Disbursements for financial institution resolutions (3,568) (7,515)

 Miscellaneous disbursements (802) (14,803)

Net Cash Provided by Operating Activities 9,688,349 10,159,559

INVESTING ACTIVITIES

Provided by:

 Maturity of U.S. Treasury securities 48,400,000 61,350,000

Used by:

 Purchase of U.S. Treasury securities (60,978,672) (69,203,406)

 Purchase of property and equipment (73,412) (53,739)

Net Cash (Used) in Investing Activities (12,652,084) (7,907,145)

Net (Decrease) Increase in Cash and Cash Equivalents (2,963,735) 2,252,414

Cash and Cash Equivalents - Beginning 5,562,941 3,310,527

Cash and Cash Equivalents - Ending $ 2,599,206 $ 5,562,941

The accompanying notes are an integral part of these financial statements.

2022 2021
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 125 

DEPOSIT INSURANCE FUND 

NOTES TO THE FINANCIAL STATEMENTS 

December 31, 2022 and 2021 

1 

1. Operations of the Deposit Insurance Fund 

OVERVIEW 

The Federal Deposit Insurance Corporation (FDIC) is the 

independent deposit insurance agency created by Congress 

in 1933 to maintain stability and public confidence in the 

nation’s banking system. Provisions that govern the FDIC’s 

operations are generally found in the Federal Deposit 

Insurance (FDI) Act, as amended (12 U.S.C. 1811, et seq). In 

accordance with the FDI Act, the FDIC, as administrator of the 

Deposit Insurance Fund (DIF), insures the deposits of banks 

and savings associations (insured depository institutions). In 

cooperation with other federal and state agencies, the FDIC 

promotes the safety and soundness of insured depository 

institutions (IDIs) by identifying, monitoring, and addressing 

risks to the DIF. Federally chartered IDIs are supervised by the 

Office of the Comptroller of the Currency; state chartered IDIs 

that are members of the Federal Reserve are supervised by 

the Federal Reserve and their state supervisors; and state 

chartered IDIs that are not members of the Federal Reserve 

are supervised by the FDIC and their state supervisors. 

In addition to being the administrator of the DIF, the FDIC is 

the administrator of the Federal Savings and Loan Insurance 

Corporation (FSLIC) Resolution Fund (FRF). The FRF is a 

resolution fund responsible for the sale of the remaining 

assets and the satisfaction of the liabilities associated with 

the former FSLIC and the former Resolution Trust 

Corporation. The FDIC maintains the DIF and the FRF 

separately to support their respective functions. 

Pursuant to the Dodd-Frank Wall Street Reform and 

Consumer Protection Act of 2010 (Dodd-Frank Act), the FDIC 

also manages the Orderly Liquidation Fund (OLF). 

Established as a separate fund in the U.S. Treasury (Treasury), 

the OLF is inactive and unfunded until the FDIC is appointed 

as receiver for a covered financial company. A covered 

financial company is a failing financial company (for example, 

a bank holding company or nonbank financial company) for 

which a systemic risk determination has been made as set 

forth in section 203 of the Dodd-Frank Act. 

The Dodd-Frank Act (Public Law 111-203) granted the FDIC 

authority to establish a widely available program to 

guarantee obligations of solvent IDIs or solvent depository 

institution holding companies (including affiliates) upon a 

liquidity event determination during times of severe 

economic distress. The program would not be funded by the 

DIF but rather by fees and assessments paid by all 

participants in the program. If fees are insufficient to cover 

losses or expenses, the FDIC must impose a special 

assessment on participants as necessary to cover the 

shortfall. Any excess funds at the end of the liquidity event 

program would be deposited in the General Fund of the 

Treasury. 

The Dodd-Frank Act also created the Financial Stability 

Oversight Council of which the Chairman of the FDIC is a 

member and expanded the FDIC’s responsibilities to include 

supervisory review of resolution plans (known as living wills) 

and backup examination authority for systemically important 

bank holding companies and nonbank financial companies 

supervised by the Federal Reserve Board. The living wills 

provide for an entity’s rapid and orderly resolution in the 

event of material financial distress or failure. 

OPERATIONS OF THE DIF 

The FDIC, as administrator of the DIF, insures the deposits of 

IDIs and resolves failed IDIs upon appointment of the FDIC as 

receiver in a manner that will result in the least possible cost 

to the DIF. 

The DIF is primarily funded from deposit insurance 

assessments and interest earned on investments in U.S. 

Treasury securities. Other available funding sources, if 

necessary, are borrowings from the Treasury, the Federal 

Financing Bank (FFB), Federal Home Loan Banks, and IDIs. 

The FDIC has borrowing authority of $100 billion from the 

Treasury and a Note Purchase Agreement with the FFB, not to 

exceed $100 billion, to enhance the DIF’s ability to fund 

deposit insurance. 

A statutory formula, known as the Maximum Obligation 

Limitation (MOL), limits the amount of obligations the DIF can 

incur to the sum of its cash, 90 percent of the fair market value 

of other assets, and the amount authorized to be borrowed 

from the Treasury. The MOL for the DIF was $227.5 billion and 

$222.5 billion as of December 31, 2022 and 2021, respectively. 

OPERATIONS OF RESOLUTION ENTITIES 

The FDIC, as receiver, is responsible for managing and 

disposing of the assets of failed institutions in an orderly and 

efficient manner. The assets held by receiverships, 

conservatorships, and bridge institutions (collectively, 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 126 

DEPOSIT INSURANCE FUND 

2 

resolution entities), and the claims against them, are 

accounted for separately from the DIF assets and liabilities to 

ensure that proceeds from these entities are distributed 

according to applicable laws and regulations. Therefore, 

income and expenses attributable to resolution entities are 

accounted for as transactions of those entities. The FDIC, as 

administrator of the DIF, bills resolution entities for services 

provided on their behalf. 

2. Summary of Significant Accounting Policies 

GENERAL 

The financial statements include the financial position, 

results of operations, and cash flows of the DIF and are 

presented in accordance with U.S. generally accepted 

accounting principles (GAAP). These statements do not 

include reporting for assets and liabilities of resolution 

entities because these entities are legally separate and 

distinct, and the DIF does not have any ownership or 

beneficial interests in them. Periodic and final accounting 

reports of resolution entities are furnished to courts, 

supervisory authorities, and others upon request. 

USE OF ESTIMATES 

The preparation of the financial statements in conformity 

with GAAP requires management to make estimates and 

assumptions that affect the reported amounts of assets and 

liabilities, revenue and expenses, and disclosure of 

contingent liabilities. Actual results could differ from these 

estimates. Where it is reasonably possible that changes in 

estimates will cause a material change in the financial 

statements in the near term, the nature and extent of such 

potential changes in estimates have been disclosed. The 

more significant estimates include the assessments 

receivable and associated revenue; the allowance for loss on 

receivables from resolutions; the postretirement benefit 

obligation; and the estimated losses for anticipated failures.

CASH EQUIVALENTS 

Cash equivalents are short-term, highly liquid investments 

consisting primarily of U.S. Treasury Overnight Certificates. 

INVESTMENT IN U.S. TREASURY SECURITIES 

The FDI Act requires that the DIF funds be invested in 

obligations of the United States or in obligations guaranteed 

as to principal and interest by the United States. The 

Secretary of the Treasury must approve all such investments 

in excess of $100,000 and has granted the FDIC approval to 

invest the DIF funds only in U.S. Treasury obligations that are 

purchased or sold exclusively through the Treasury’s Bureau 

of the Fiscal Service’s Government Account Series program. 

The DIF’s investments in U.S. Treasury securities are classified 

as available-for-sale (AFS). Securities designated as AFS are 

shown at fair value. Unrealized gains and losses are reported 

as other comprehensive income. Any realized gains and 

losses are included in the Statement of Income and Fund 

Balance as components of net income. Income on securities 

is calculated and recorded daily using the straight-line 

method (see Note 3). 

REVENUE RECOGNITION FOR ASSESSMENTS 

Assessment revenue is recognized for the quarterly period of 

insurance coverage based on an estimate. The estimate is 

derived from an institution’s regular risk-based assessment 

rate and assessment base for the prior quarter adjusted for 

certain changes in supervisory examination ratings for larger 

institutions, modest assessment base growth and average 

assessment rate adjustment factors. At the subsequent 

quarter-end, the estimated revenue amounts are adjusted 

when actual assessments for the covered period are 

determined for each institution (see Note 9). 

CAPITAL ASSETS AND DEPRECIATION 

The FDIC buildings are depreciated on a straight-line basis 

over a 35- to 50-year estimated life. Building improvements 

are capitalized and depreciated over the estimated useful life 

of the improvements. Leasehold improvements are 

capitalized and depreciated over the lesser of the remaining 

life of the lease or the estimated useful life of the 

improvements, if determined to be material. Capital assets 

depreciated on a straight-line basis over a five-year estimated 

useful life include mainframe equipment; furniture, fixtures, 

and general equipment; and internal-use software. 

Computer equipment is depreciated on a straight-line basis 

over a three-year estimated useful life (see Note 5). 

LEASES 

The Balance Sheet presents operating leases in the 

“Operating lease right-of-use assets” and “Operating lease 

liabilities” line items. Operating lease liabilities and right-ofuse (ROU) assets are recognized based on the present value of 

the future minimum lease payments over the lease term at 

the commencement date. The FDIC has elected to use its riskfree rate at the commencement date in determining the 

present value of future payments for all classes of underlying 

assets, unless the rate implicit in the lease is readily 

determinable. 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 127 

 

 

NOTES TO THE FINANCIAL STATEMENTS 

 

3 

The operating lease ROU asset also includes lease 

prepayments and excludes lease incentives received. The 

lease term includes options to extend or terminate the lease 

when it is reasonably certain that the FDIC will exercise that 

option. For the DIF, the FDIC recognizes lease expense on a 

straight-line basis over the lease term. For lease 

arrangements that contain both lease and nonlease 

components, the FDIC has elected to account for them as a 

single lease component for all classes of underlying assets. 

PROVISION FOR INSURANCE LOSSES 

The provision for insurance losses primarily represents 

changes in the allowance for losses on receivables from 

resolutions and the contingent liability for anticipated failure 

of insured institutions (see Note 12). 

RELATED PARTIES 

The nature of related parties and a description of related 

party transactions are discussed in Note 1 and disclosed 

throughout the financial statements and notes. 

APPLICATION OF RECENT ACCOUNTING STANDARDS

Recent accounting standards have been deemed not 

applicable or material to the financial statements as 

presented. 

RECLASSIFICATION

In 2022, the FDIC reclassified the “Liabilities due to 

resolutions” line item to the “Accounts payable and other 

liabilities” line item on the Balance Sheet. Additionally, the 

FDIC reclassified certain salaries and benefits expenses in 

Note 11, “Operating Expenses,” from the “Expenses billed to 

resolution entities and others” line to the “Salaries and 

benefits” line. For comparative purposes, the FDIC 

conformed 2021 to the new presentation. 

3. Investment in U.S. Treasury Securities 

The “Investment in U.S. Treasury securities” line item on the Balance Sheet consisted of the following components by maturity 

(dollars in thousands). 

December 31, 2022

Yield at

Maturity Purchase

Within 1 year 0.67% $ 62,125,000 (a) $ 62,596,907 $ 0 $ (1,214,092) $ 61,382,815

After 1 - 5 years 2.81% 64,150,000 62,830,865 16,308 (1,787,631) 61,059,542

Total $ 126,275,000 $ 125,427,772 $ 16,308 $ (3,001,723) (b) $ 122,442,357

U.S. Treasury notes and bonds

Fair

Value

Unrealized

Holding

Losses

Carrying

Amount

Net Unrealized

Holding

Value Gains

Face

(a) Includes three securities totaling $3.0 billion, which matured on Saturday, December 31, 2022. Settlements occurred the next business day, January 3, 2023. 

(b) These unrealized losses occurred as a result of changes in market interest rates. The FDIC does not intend to sell the securities and is not likely to be required to sell them before 

their maturity date, thus, the FDIC does not consider these securities to be other than temporarily impaired at December 31, 2022. However, $2.2 billion of the $3.0 billion reported as 

total unrealized losses occurred over a period of 12 months or longer, with an aggregate related fair value of $62.8 billion applied to the affected securities. The aggregate related fair 

value of all securities with unrealized losses was $112.9 billion as of December 31, 2022. 

December 31, 2021

Yield at

Maturity Purchase

Within 1 year 0.92% $ 47,400,000 $ 48,252,075 $ 169,305 $ (26,501) $ 48,394,879

After 1 - 5 years 0.47% 64,775,000 66,448,280 106,617 (398,536) 66,156,361

Total $ 112,175,000 $ 114,700,355 $ 275,922 $ (425,037) (a) $ 114,551,240

Face

Value

U.S. Treasury notes and bonds

Fair

Value

Unrealized

Holding

Gains

Net

Carrying

Amount

Unrealized

Holding

Losses

(a) These unrealized losses occurred as a result of changes in market interest rates. The FDIC does not intend to sell the securities and is not likely to be required to sell them before 

their maturity date, thus, the FDIC does not consider these securities to be other than temporarily impaired at December 31, 2021. However, $18 million of the $425 million reported as 

total unrealized losses occurred over a period of 12 months or longer, with a fair value of $1.6 billion applied to the affected security. The aggregate related fair value of all securities 

with unrealized losses was $86.9 billion as of December 31, 2021. 

 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 128 

DEPOSIT INSURANCE FUND 

4 

4. Receivables from Resolutions, Net 

The receivables from resolutions result from DIF payments to 

cover obligations to insured depositors (subrogated claims), 

advances to resolution entities for working capital, and 

administrative expenses paid on behalf of resolution entities. 

Any related allowance for loss represents the difference 

between the funds advanced and/or obligations incurred and 

the expected repayment. Assets held by resolution entities 

are the main source of repayment of the DIF’s receivables 

from resolutions. The “Receivables from resolutions, net” line 

item on the Balance Sheet consisted of the following 

components (dollars in thousands). 

Receivables from resolutions $ 40,567,779 $ 56,228,805

Allowance for losses (40,047,224) (55,343,451)

Total $ 520,555 $ 885,354

December 31

2022

December 31

2021

As of December 31, 2022, the FDIC, as receiver, managed 132 

active receiverships; no new receiverships were established in 

2022. The resolution entities held assets with a total book 

value of $943 million as of December 31, 2022 and $1.5 billion 

as of December 31, 2021. The majority of these assets are 

cash, investments, and other receivables, totaling $909 

million and $1.4 billion, respectively. The remaining assets 

held by resolution entities are assets in liquidation of $34 

million as of December 31, 2022 and $87 million as of 

December 31, 2021. 

Estimated cash recoveries from the management and 

disposition of assets in liquidation that are used to determine 

the allowance for losses are based on asset recovery rates 

from several sources, which may include the following: actual 

or pending institution-specific asset disposition data, failed 

institution-specific asset valuation data, aggregate asset 

valuation data on several recently failed or troubled 

institutions, sampled asset valuation data, and empirical 

asset recovery data based on failures since 2007. 

Methodologies for determining the asset recovery rates 

incorporate estimating future cash recoveries, net of 

applicable liquidation cost estimates, and discounting based 

on market-based risk factors applicable to a given asset’s type 

and quality. The resulting estimated asset recoveries are then 

used to derive the allowance for loss on the receivables from 

these resolutions. 

Note that estimated asset recoveries on assets in liquidation 

are regularly evaluated during the year, but remain subject to 

uncertainties because of potential changes in economic and 

market conditions, which may cause the DIF’s actual 

recoveries to vary significantly from current estimates.

5. Property and Equipment, Net 

Depreciation expense was $39 million and $44 million for 2022 

and 2021, respectively. The “Property and equipment, net” 

line item on the Balance Sheet consisted of the following 

components (dollars in thousands). 

Land $ 37,352 $ 37,352

Buildings (including building and

leasehold improvements) 385,151 349,066

Application software (includes work-inprocess) 111,172 101,362

Furniture, fixtures, & equipment 33,108 45,221

Accumulated depreciation (206,642) (205,874)

Total $ 360,141 $ 327,127

December 31

2022

December 31

2021

6. Leases 

The FDIC has operating leases for office space, a data center, 

and certain equipment. The lease agreements generally 

contain escalation clauses resulting in adjustments, usually 

on an annual basis. Many leases contain one or more options 

to extend, with renewal terms that can extend the lease term 

from one to five years, and some leases may include options 

to terminate. The following table provides relevant 

information regarding FDIC operating leases for the years 

ended December 31, 2022 and 2021 (dollars in thousands). 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 129 

 

 

NOTES TO THE FINANCIAL STATEMENTS 

 

5 

Operating lease cost $ 39,782 $ 39,466

Cash paid for amounts included in the 

measurement of operating leases $ 36,099 48,400

ROU assets obtained in exchange for new 

operating lease liabilities $ 40,046 1,656

Weighted Average

 Remaining lease term (in years) 5.15 2.75

 Discount rate 2.05% 1.24%

December 31

2022

December 31

2021

The following table provides a maturity analysis of the FDIC’s 

operating lease liabilities as of December 31, 2022 (dollars in 

thousands). 

2023 $ 35,132

2024 30,320

2025 13,174

2026 8,380

2027 6,569

2028/Thereafter 26,052

Total future minimum lease payments $ 119,627

Less: Imputed interest (8,422)

Total operating lease liabilities $ 111,205

2022

December 31

As of December 31, 2022, the FDIC has additional operating 

leases with future payments totaling $5 million for office 

space, which commence after December 31, 2022, and are not 

included in the amounts presented above. 

7. Contingent Liabilities 

ANTICIPATED FAILURE OF INSURED INSTITUTIONS 

The DIF records a contingent liability and a loss provision for 

DIF-insured institutions that are likely to fail when the liability 

is probable and reasonably estimable, absent some favorable 

event such as obtaining additional capital or merging. The 

contingent liability is derived by applying expected failure 

rates and loss rates to the institutions based on supervisory 

ratings, balance sheet characteristics, and projected capital 

levels. 

The banking industry’s financial condition and performance 

remained stable in 2022 amidst economic uncertainty. 

During 2022, no institutions failed. According to the third 

quarter 2022 financial data submitted by DIF-insured 

institutions, the banking industry reported net income for the 

first nine months of $196 billion, a decrease of 9.4 percent 

from the same period a year ago. The decrease in net income 

was the result of a return to positive provision expenses and 

higher noninterest expenses which offset gains in net interest 

income as described below. 

Provisions for credit losses for the first nine months of 2022 

were a positive $30.9 billion, versus the negative $30.4 billion 

reported for the same time period a year ago. This change 

reflects loan growth as well as new economic uncertainties. 

Despite these uncertainties, credit quality metrics continued 

to improve. The total noncurrent loan rate was 0.72 percent 

as of September 30, 2022, down 22 basis points from the same 

quarter in 2021 and well below the most recent high of 5.46 

percent in March 31, 2010. Noninterest expenses for the first 

nine months of 2022 were up $28.7 billion from the same time 

period a year ago driven by higher advertising and marketing 

expenses, consulting and advisory expenses, and data 

processing expenses. 

Although net income declined, the rising interest-rate 

environment has improved bank margins. During third 

quarter 2022, the average quarterly net interest margin (NIM) 

for the banking industry rose 35 basis points to 3.14 percent, 

with the average yield on earning assets rising 73 basis points. 

Growth in interest income outpaced growth in interest 

expense, pushing net interest income for the first nine months 

of 2022 up $64.8 billion from the same period a year ago. 

Due to the decline in net income and growth in higher-risk 

assets, risk-based capital ratios declined in third quarter 2022 

from the same quarter in 2021. Total risk-based capital 

declined 77 basis points to 14.84 percent. Despite this 

decrease, the level remains above pre-pandemic levels. 

The contingent liability increased as of December 31, 2022, 

compared to December 31, 2021. The DIF recorded 

contingent liabilities totaling $31 million and $21 million as of 

December 31, 2022 and 2021, respectively. The increase 

reflects deterioration in financial conditions at a small 

number of troubled institutions. 

In addition to the recorded contingent liabilities, the FDIC has 

identified risks in the financial services industry that could 

result in additional losses to the DIF, should potentially 

vulnerable insured institutions ultimately fail. As a result of 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 130 

DEPOSIT INSURANCE FUND 

6 

these risks, the FDIC believes that it is reasonably possible 

that the DIF could incur additional estimated losses of 

approximately $273 million as of December 31, 2022, 

compared to $68 million at year-end 2021. The actual losses, 

if any, will largely depend on future economic and market 

conditions and could differ materially from this estimate. 

Inflation, rising interest rates, and geopolitical uncertainties 

will continue to challenge bank profitability, credit quality, 

and loan growth. The FDIC continues to evaluate ongoing 

risks to affected institutions in light of existing economic and 

financial conditions, and the extent to which such risks may 

put stress on the resources of the insurance fund. 

LITIGATION LOSSES 

The DIF records an estimated loss for unresolved legal cases 

to the extent that those losses are considered probable and 

reasonably estimable. The FDIC recorded probable litigation 

losses of $800 thousand and $200 thousand for the DIF as of 

December 31, 2022 and 2021, respectively. In addition, the 

FDIC has identified no reasonably possible losses from 

unresolved cases as of December 31, 2022 and $1 million as of 

December 31, 2021. 

8. Purchase and Assumption Indemnification 

In connection with purchase and assumption agreements for 

resolutions, the FDIC, in its receivership capacity, generally 

indemnifies the purchaser of a failed institution’s assets and 

liabilities in the event a third party asserts a claim against the 

purchaser unrelated to the explicit assets purchased or 

liabilities assumed at the time of failure. The FDIC, in its 

corporate capacity, is a secondary guarantor if a receivership 

is unable to pay. These indemnifications generally extend for 

a term of six years after the date of institution failure. The 

FDIC is unable to estimate the maximum potential liability for 

these types of guarantees as the agreements do not specify a 

maximum amount and any payments are dependent upon 

the outcome of future contingent events, the nature and 

likelihood of which cannot be determined at this time. During 

2022 and 2021, the FDIC, in its corporate capacity, made no 

indemnification payments under such agreements, and no 

amount has been accrued in the accompanying financial 

statements with respect to these indemnification guarantees. 

9. Assessments

The FDIC deposit insurance assessment system is mandated 

by section 7 of the FDI Act and governed by part 327 of title 12 

of the Code of Federal Regulations (12 CFR Part 327). The riskbased system requires the payment of quarterly assessments 

by all IDIs. 

In response to the Dodd-Frank Act, the FDIC implemented 

several changes to the assessment system and developed a 

comprehensive, long-term fund management plan. The longterm fund management plan is designed to restore and 

maintain a positive fund balance for the DIF even during a 

banking crisis and achieve moderate, steady assessment 

rates throughout any economic cycle. The DIF reserve ratio, 

which is the ratio of the DIF balance to estimated insured 

deposits, is a key measure of fund adequacy. Summarized 

below are key longer-term provisions of the plan. 

 The FDIC Board of Directors designates a reserve ratio 

for the DIF and publishes the designated reserve ratio 

(DRR) before the beginning of each calendar year, as 

required by the FDI Act. Accordingly, in October 2022, 

the FDIC published a notice maintaining the DRR at 2 

percent for 2023. The DRR is an integral part of the 

FDIC’s comprehensive, long-term management plan 

for the DIF and is viewed as a long-range, minimum 

goal for the reserve ratio. 

 The FDIC suspended dividends indefinitely, and, in lieu 

of dividends, prescribes progressively lower 

assessment rates when the reserve ratio exceeds 2 

percent and 2.5 percent. 

The Dodd-Frank Act increased the minimum reserve ratio for 

the DIF to 1.35 percent, up from the previous statutory 

minimum of 1.15 percent. If the reserve ratio falls below 1.35 

percent, or the FDIC projects that it will within six months, the 

FDIC generally must implement a Restoration Plan that will 

return the DIF to 1.35 percent within eight years. In 

September 2020, the FDIC established a Restoration Plan, 

maintaining the assessment rate schedules in place at the 

time, when the reserve ratio fell below 1.35 percent, to 1.30 

percent as of June 30, 2020, due to extraordinary insured 

deposit growth in the first and second quarters of 2020. 

However, based on the June 2022 Semiannual Restoration 

Plan Update to the Board, the reserve ratio was at risk of not 

reaching the statutory minimum of 1.35 percent by the 

statutory deadline of September 30, 2028, absent an increase 

in assessment rates. As a result, in June 2022, the FDIC Board 

adopted an Amended Restoration Plan that would increase 

assessment rates so that the DIF reserve ratio would reach at 

least 1.35 percent by the required deadline. 
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 131 

 

 

NOTES TO THE FINANCIAL STATEMENTS 

 

7 

In October 2022, the FDIC Board issued a final rule related to 

increasing assessment rates. Under the rule, the FDIC will 

increase the initial base deposit insurance assessment rates 

for all IDIs by 2 basis points, beginning with the first quarterly 

assessment period of 2023. The increase in the assessment 

rates will remain in effect unless and until the reserve ratio 

meets or exceeds 2 percent in order to support progress 

towards the 2 percent DRR. 

ASSESSMENT REVENUE 

Annual assessment rates averaged approximately 4.0 cents 

and 3.6 cents per $100 of the assessment base in 2022 and 

2021, respectively. The assessment base is generally defined 

as average consolidated total assets minus average tangible 

equity (measured as Tier 1 capital) of an IDI during the 

assessment period. 

The “Assessments receivable” line item on the Balance Sheet 

of $2.2 billion and $1.7 billion represents the estimated 

premiums due from IDIs for the fourth quarter of 2022 and 

2021, respectively. The actual deposit insurance assessments 

for the fourth quarter of 2022 will be billed and collected at 

the end of the first quarter of 2023. The DIF recognized $8.3 

billion and $7.1 billion as assessment revenue from 

institutions during 2022 and 2021, respectively. 

PENDING LITIGATION FOR UNDERPAID ASSESSMENTS 

On January 9, 2017, the FDIC filed suit in the United States 

District Court for the District of Columbia (and amended this 

complaint on April 7, 2017), alleging that Bank of America, 

N.A. (BoA) underpaid its insurance assessments for multiple 

quarters based on the underreporting of counterparty 

exposures. In total, the FDIC alleges that BoA underpaid 

insurance assessments by $1.12 billion, including interest for 

the quarters ending March 2012 through December 2014. The 

FDIC invoiced BoA for $542 million and $583 million 

representing claims in the initial suit and the amended 

complaint, respectively. BoA has failed to pay these past due 

amounts. Pending resolution of this matter, BoA has fully 

pledged security with a third-party custodian pursuant to a 

security agreement with the FDIC. As of December 31, 2022, 

the total amount of unpaid assessments (including accrued 

interest) was $1.20 billion. For the years ending December 31, 

2022 and 2021, the impact of this litigation is not reflected in 

the financial statements of the DIF. 

RESERVE RATIO 

As of September 30, 2022 and December 31, 2021, the DIF 

reserve ratio was 1.26 percent. 

10. Return of Unclaimed Insured Deposits

The Unclaimed Deposits Amendments Act of 1993 (UDAA), 

Public Law 103-44, amended the FDI Act effective June 28, 

1993 (codified as 12 U.S.C. § 1822 (e)). In accordance with the 

UDAA, the FDIC delivers to the appropriate states insured 

bank deposits not claimed within 18 months of the date when 

the FDIC initiates payment of insured deposits as a part of a 

bank failure, unless the appropriate state declines to accept 

custody. After receipt, states have custody of the deposits for 

10 years, during which time a state treats deposits as 

unclaimed property. At the end of the 10 years, states are 

required to transfer any remaining unclaimed deposits to the 

FDIC and those deposits become the FDIC’s property. As of 

December 31, 2022 and 2021, states have returned $38 million 

and $103 million, respectively, of unclaimed insured deposits 

to the FDIC, which the DIF recognized as revenue. 

11. Operating Expenses 

The “Operating expenses” line item on the Statement of 

Income and Fund Balance consisted of the following 

components (dollars in thousands). 

Salaries and benefits $ 1,343,042 $ 1,320,194

Outside services 269,741 267,279

Travel 20,528 9,548

Buildings and leased space 75,649 84,496

Software/Hardware maintenance 119,780 107,265

Depreciation of property and equipment 38,858 43,764

Other 22,993 24,569

Subtotal 1,890,591 1,857,115

Less: Expenses billed to resolution entities 

and others (7,707) (14,392)

Total $ 1,882,884 $ 1,842,723

December 31

2022

December 31

2021
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 132 

DEPOSIT INSURANCE FUND 

8 

12. Provision for Insurance Losses 

The “Provision for insurance losses” line item on the Statement of Income and Fund Balance is impacted by the Balance Sheet 

line item activity depicted in the table below. The table primarily analyzes the changes in estimated losses for actual and 

anticipated failures (dollars in millions). 

December 31, 2022

Balance at January 1, 2022 $ 0 $ 56,228 $ (55,343) $ (21) $ 0

 Change in contingent liability for anticipated failures, net 1 10 (10)

 Adjustments to estimated losses for prior year failures (87) 87

 Disbursements for prior year failures 10

 Recoveries from resolutions (459)

 Write-offs for inactivated receiverships (3) (13,719) 13,722

 Other (3) (1,492) 1,487 (1)

Balance at December 31, 2022 $ (83) $ 40,568 $ (40,047) $ (31) $ (1)

Provision for 

Insurance Losses

Receivables

from Resolutions

Allowance

for Losses

Anticipated 

 Failures 

Contingent Liabilities for:

Litigation 

Losses

1

Represents institutions that were added or removed from the contingent liability, as well as the change in the contingent liability for institutions that remained in the liability year-overyear. 

December 31, 2021

Balance at January 1, 2021 $ 0 $ 61,341 $ (59,974) $ (79) $ 0

 Change in contingent liability for anticipated failures, net 1 (58) 58

 Adjustments to estimated losses for prior year failures (85) 85

 Disbursements for prior year failures 12

 Recoveries from resolutions (574)

 Write-offs for inactivated receiverships (1) (4,424) 4,425

 Other 0 (127) 121

Balance at December 31, 2021 $ (144) $ 56,228 $ (55,343) $ (21) $ 0

Provision for Receivables Allowance Anticipated Litigation 

Insurance Losses from Resolutions for Losses Failures Losses

Contingent Liabilities for:

1

Represents institutions that were added or removed from the contingent liability, as well as the change in the contingent liability for institutions that remained in the liability year-overyear. 

13. Employee Benefits 

PENSION BENEFITS AND SAVINGS PLANS 

Eligible FDIC employees (permanent and term employees 

with appointments exceeding one year) are covered by the 

federal government retirement plans, either the Civil Service 

Retirement System (CSRS) or the Federal Employees 

Retirement System (FERS). Although the DIF contributes a 

portion of pension benefits for eligible employees, it does not 

account for the assets of either retirement system. The DIF 

also does not have actuarial data for accumulated plan 

benefits or the unfunded liability relative to eligible 

employees. These amounts are reported on and accounted 

for by the U.S. Office of Personnel Management (OPM). 

Under the Federal Thrift Savings Plan (TSP), the FDIC 

provides FERS employees with an automatic contribution of 

1 percent of pay and an additional matching contribution up 
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 133 

 

 

NOTES TO THE FINANCIAL STATEMENTS 

 

9 

to 4 percent of pay. CSRS employees also can contribute to 

the TSP, but they do not receive agency matching 

contributions. Eligible FDIC employees may also participate 

in an FDIC-sponsored tax-deferred 401(k) savings plan with 

an automatic contribution of 1 percent of pay and an 

additional matching contribution up to 4 percent of pay. The 

expenses for these plans are presented in the table below 

(dollars in thousands). 

Civil Service Retirement System $ 286 $ 912

Federal Employees Retirement System (Basic Benefit) 159,473 151,797

Federal Thrift Savings Plan 39,851 39,266

FDIC Savings Plan 40,259 39,978

Total $ 239,869 $ 231,953

December 31

2022

December 31

2021

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

The DIF has no postretirement health insurance liability since 

all eligible retirees are covered by the Federal Employees 

Health Benefits (FEHB) program. The FEHB is administered 

and accounted for by OPM. In addition, OPM pays the 

employer share of the retiree’s health insurance premiums. 

The FDIC provides certain life and dental insurance coverage 

for its eligible retirees, the retirees’ beneficiaries, and covered 

dependents. Retirees eligible for life and dental insurance 

coverage are those who have qualified due to (1) immediate 

enrollment upon appointment or five years of participation in 

the plan and (2) eligibility for an immediate annuity. The life 

insurance program provides basic coverage at no cost to 

retirees and allows for converting optional coverage to directpay plans. For the dental coverage, retirees are responsible 

for a portion of the premium. 

The FDIC has elected not to fund the postretirement life and 

dental benefit liabilities. As a result, the DIF recognized the 

underfunded status (the difference between the accumulated 

postretirement benefit obligation and the plan assets at fair 

value) as a liability. Since there are no plan assets, the plan’s 

benefit liability is equal to the accumulated postretirement 

benefit obligation. 

Postretirement benefit obligation, gain and loss, and expense 

information included in the Balance Sheet and Statement of 

Income and Fund Balance are summarized as follows (dollars 

in thousands). 

Accumulated postretirement benefit obligation 

recognized in Postretirement benefit liability $ 231,781 $ 331,599 

Cumulative net actuarial gain (loss) recognized in 

accumulated other comprehensive income: Unrealized 

postretirement benefit gain (loss) $ 27,216 $ (82,723) 

Amounts recognized in other comprehensive income: 

Unrealized postretirement benefit gain

Actuarial gain $ 109,939 $ 15,199 

Prior service credit 0 0

 Total $ 109,939 $ 15,199

Net periodic benefit costs recognized in Operating 

expenses

 Service cost $ 6,208 $ 6,365

 Interest cost 8,122 7,128

 Net amortization out of other comprehensive

 income 3,521 4,712 

 Total $ 17,851 $ 18,205

December 31

2021

December 31

2022

The year-over-year decrease in the accumulated 

postretirement benefit obligation of $100 million is primarily 

attributable to an increase in the discount rate used to 

present value expected benefit payments. The discount rate 

increased from 2.82 percent to 5.27 percent at year-end 2022 

to reflect changes in the economic environment. 

The annual postretirement contributions and benefits paid 

are included in the table below (dollars in thousands). 

Employer contributions $ 7,731 $ 7,384

Plan participants' contributions $ 1,197 $ 1,148 

Benefits paid $ (8,928) $ (8,532) 

December 31

2021

December 31

2022

The expected contributions for the year ending December 31, 

2023, are $11 million. Expected future benefit payments for 

each of the next 10 years are presented in the following table 

(dollars in thousands). 

2023 2024 2025 2026 2027 2028-2032

$9,627 $10,203 $10,726 $11,282 $11,782 $64,834
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 134 

DEPOSIT INSURANCE FUND 

10 

Assumptions used to determine the amount of the 

accumulated postretirement benefit obligation and the net 

periodic benefit costs are summarized as follows. 

December 31 December 31

2022 2021

Discount rate for future benefits (benefit obligation) 5.27% 2.82%

Rate of compensation increase 7.79% 2.22%

Discount rate (benefit cost) 2.82% 2.65%

Dental health care cost-trend rate

 Assumed for next year 3.50% 3.50%

 Ultimate 3.50% 3.50%

 Year rate will reach ultimate 2023 2022

14. Off-Balance-Sheet Exposure

DEPOSIT INSURANCE 

Estimates of insured deposits are derived primarily from 

quarterly financial data submitted by IDIs to the FDIC and 

represent the accounting loss that would be realized if all IDIs 

were to fail and the acquired assets provided no recoveries. 

As of September 30, 2022 and December 31, 2021, estimated 

insured deposits for the DIF were $9.9 trillion and $9.7 trillion, 

respectively. 

15. Fair Value of Financial Instruments

As of December 31, 2022 and 2021, financial assets recognized 

and measured at fair value on a recurring basis include cash 

equivalents (see Note 2) of $2.6 billion and $4 billion, 

respectively, and the investment in U.S. Treasury securities 

(see Note 3) of $122.4 billion and $114.6 billion, respectively. 

The valuation is considered a Level 1 measurement in the fair 

value hierarchy, representing quoted prices in active markets 

for identical assets. Other financial assets and liabilities, 

measured at amortized cost, are the receivables from 

resolutions, assessments receivable, interest receivable on 

investments, other short-term receivables, and accounts 

payable and other liabilities. 

16. Information Relating to the Statement of Cash Flows

The following table presents a reconciliation of net income to 

net cash from operating activities (dollars in thousands). 

Operating Activities

Net Income: $ 7,803,215 $ 6,448,140

Adjustments to reconcile net income to net cash 

 provided by operating activities:

Amortization of U.S. Treasury securities 1,851,255 2,547,445

Depreciation on property and equipment 38,858 43,764

Retirement of property and equipment 1,540 3,929

Provision for insurance losses (82,964) (143,681)

Unrealized gain on postretirement benefits 109,939 15,199

Change in Assets and Liabilities:

(Increase) Decrease in assessments receivable, net (448,700) 237,967

Decrease in interest receivable and other assets 30,667 441,041

Decrease in receivables from resolutions 458,420 566,646

(Increase) Decrease in operating lease right-of-use assets (7,168) 27,215

Increase in accounts payable and other liabilities 12,857 4,774

Increase (Decrease) in operating lease liabilities 20,248 (28,502)

(Decrease) in postretirement benefit liability (99,818) (4,378)

Net Cash Provided by Operating Activities $ 9,688,349 $ 10,159,559

December 31

2022

December 31

2021

17. Subsequent Events

Subsequent events have been evaluated through February 9, 

2023, the date the financial statements are available to be 

issued. Based on management’s evaluation, there were no 

subsequent events requiring disclosure. 
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 135 

Federal Deposit Insurance Corporation

FSLIC Resolution Fund Balance Sheet 

As of December 31

(Dollars in Thousands)

ASSETS

 Cash and cash equivalents $ 922,224 $ 907,625

 Other assets, net 161 201

Total Assets $ 922,385 $ 907,826

LIABILITIES

 Accounts payable and other liabilities $ 6 $ 8

Total Liabilities 6 8

RESOLUTION EQUITY (NOTE 5)

 Contributed capital 125,469,317 125,469,317

 Accumulated deficit (124,546,938) (124,561,499)

Total Resolution Equity 922,379 907,818

Total Liabilities and Resolution Equity $ 922,385 $ 907,826

The accompanying notes are an integral part of these financial statements.

2022 2021
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 136 

Federal Deposit Insurance Corporation

FSLIC Resolution Fund Statement of Income and Accumulated Deficit

For the Years Ended December 31

(Dollars in Thousands)

REVENUE

 Interest on U.S. Treasury securities $ 14,524 $ 374

 Other revenue 352 214

Total Revenue 14,876 588

EXPENSES AND LOSSES

 Operating expenses 250 227

 Losses related to thrift resolutions 65 (27)

Total Expenses and Losses 315 200

Net Income 14,561 388

Accumulated Deficit - Beginning (124,561,499) (124,561,887)

Accumulated Deficit - Ending $ (124,546,938) $ (124,561,499)

 

The accompanying notes are an integral part of these financial statements.

2022 2021
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 137 

Federal Deposit Insurance Corporation

FSLIC Resolution Fund Statement of Cash Flows

For the Years Ended December 31

(Dollars in Thousands)

OPERATING ACTIVITIES

Provided by:

Interest on U.S. Treasury securities $ 14,524 $ 374

Recoveries from thrift resolutions 351 670

Used by:

Operating expenses (276) (254)

Net Cash Provided by Operating Activities 14,599 790

Net Increase in Cash and Cash Equivalents 14,599 790

Cash and Cash Equivalents - Beginning 907,625 906,835

Cash and Cash Equivalents - Ending $ 922,224 $ 907,625

The accompanying notes are an integral part of these financial statements.

2022 2021
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 138 

FSLIC RESOLUTION FUND

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2022 and 2021

1

1. Operations/Dissolution of the FSLIC Resolution Fund

OVERVIEW

The Federal Deposit Insurance Corporation (FDIC) is the 

independent deposit insurance agency created by Congress 

in 1933 to maintain stability and public confidence in the 

nation’s banking system. Provisions that govern the FDIC’s 

operations are generally found in the Federal Deposit 

Insurance (FDI) Act, as amended (12 U.S.C. 1811, et seq). In 

accordance with the FDI Act, the FDIC, as administrator of the 

Deposit Insurance Fund (DIF), insures the deposits of banks 

and savings associations (insured depository institutions). In 

cooperation with other federal and state agencies, the FDIC

promotes the safety and soundness of insured depository 

institutions by identifying, monitoring, and addressing risks 

to the DIF. 

In addition to being the administrator of the DIF, the FDIC is 

the administrator of the Federal Savings and Loan Insurance 

Corporation (FSLIC) Resolution Fund (FRF). As such, the FDIC

is responsible for the sale of remaining assets and 

satisfaction of liabilities associated with the former FSLIC 

and the former Resolution Trust Corporation (RTC). The FDIC 

maintains the DIF and the FRF separately to support their 

respective functions.

The FSLIC was created through the enactment of the 

National Housing Act of 1934. The Financial Institutions 

Reform, Recovery, and Enforcement Act of 1989 (FIRREA) 

abolished the insolvent FSLIC and created the FRF. At that 

time, the assets and liabilities of the FSLIC were transferred 

to the FRF – except those assets and liabilities transferred to 

the newly created RTC – effective on August 9, 1989. Further, 

the FIRREA established the Resolution Funding Corporation 

(REFCORP) to provide part of the initial funds used by the RTC 

for thrift resolutions by authorizing REFCORP to issue debt 

obligations. The REFCORP issued debt obligations in the 

form of long-term bonds ranging in maturity from 2019 to 

2030.

The RTC Completion Act of 1993 terminated the RTC as of 

December 31, 1995. All remaining assets and liabilities of the 

RTC were transferred to the FRF on January 1, 1996. The FRF 

consists of two distinct pools of assets and liabilities: one 

composed of the assets and liabilities of the FSLIC 

transferred to the FRF upon the dissolution of the FSLIC (FRFFSLIC), and the other composed of the RTC assets and 

liabilities (FRF-RTC). The assets of one pool are not available 

to satisfy obligations of the other.

OPERATIONS/DISSOLUTION OF THE FRF

The FRF will continue operations until all of its assets are sold 

or otherwise liquidated and all of its liabilities are satisfied. 

Any funds remaining in the FRF-FSLIC will be paid to the U.S. 

Treasury. Any remaining funds of the FRF-RTC will be 

distributed to the REFCORP to pay interest on the REFCORP 

bonds. In addition, the FRF-FSLIC has available until 

expended $602 million in appropriations to facilitate, if 

required, efforts to wind up the resolution activity of the FRFFSLIC. 

The FDIC has extensively reviewed and cataloged the FRF's 

remaining assets and liabilities. Some of the unresolved 

issues are:

• criminal restitution orders (generally have from 1 to 

17 years remaining to enforce);

• collections of judgments obtained against officers 

and directors and other professionals responsible 

for causing or contributing to thrift losses (generally 

have up to 10 years remaining to enforce, unless the 

judgments are renewed or are covered by the 

Federal Debt Collections Procedures Act, which will 

result in significantly longer periods for collection of

some judgments);

• liquidation/disposition of residual assets purchased 

by the FRF from terminated receiverships; and

• Affordable Housing Disposition Program monitoring 

(the last agreement expires no later than 2045; see 

Note 4). 

The FRF could realize recoveries from criminal restitution

orders and professional liability claims. However, any 

potential recoveries are not reflected in the FRF’s financial 

statements, given the significant uncertainties surrounding 

the ultimate outcome.

On April 1, 2014, the FDIC concluded its role as receiver, on 

behalf of the FRF, when the last active receivership was 
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 139 

NOTES TO THE FINANCIAL STATEMENTS

2

terminated. In total, 850 receiverships were liquidated by the 

FRF and the RTC. To facilitate receivership terminations, the 

FRF, in its corporate capacity, acquired the remaining 

receivership assets that could not be liquidated during the 

life of the receiverships due to restrictive clauses and other 

impediments. These assets are included in the “Other assets, 

net” line item on the Balance Sheet.

During the years of receivership activity, the assets held by 

receivership entities, and the claims against them, were 

accounted for separately from the FRF’s assets and liabilities 

to ensure that receivership proceeds were distributed in 

accordance with applicable laws and regulations. Also, the 

income and expenses attributable to receiverships were 

accounted for as transactions of those receiverships. The 

FDIC, as administrator of the FRF, billed receiverships for 

services provided on their behalf.

2. Summary of Significant Accounting Policies

GENERAL

The financial statements include the financial position, 

results of operations, and cash flows of the FRF and are 

presented in accordance with U.S. generally accepted 

accounting principles (GAAP). During the years of 

receivership activity, these statements did not include 

reporting for assets and liabilities of receivership entities 

because these entities were legally separate and distinct, and 

the FRF did not have any ownership or beneficial interest in 

them.

The FRF is a limited-life entity, however, it does not meet the 

requirements for presenting financial statements using the 

liquidation basis of accounting. According to Accounting 

Standards Codification Topic 205, Presentation of Financial 

Statements, a limited-life entity should apply the liquidation 

basis of accounting only if a change in the entity’s governing 

plan has occurred since its inception. By statute, the FRF is a 

limited-life entity whose dissolution will occur upon the 

satisfaction of all liabilities and the disposition of all assets.

No changes to this statutory plan have occurred since 

inception of the FRF.

USE OF ESTIMATES

The preparation of the financial statements in conformity 

with GAAP requires management to make estimates and 

assumptions that affect the reported amounts of assets and 

liabilities, revenue and expenses, and disclosure of 

contingent liabilities. Actual results could differ from these 

estimates. Where it is reasonably possible that changes in 

estimates will cause a material change in the financial 

statements in the near term, the nature and extent of such 

potential changes in estimates have been disclosed. The 

estimate for the Affordable Housing Disposition Program 

indemnifications is considered significant (see Note 4).

CASH EQUIVALENTS

Cash equivalents are short-term, highly liquid investments 

consisting primarily of U.S. Treasury Overnight Certificates.

RELATED PARTIES

The nature of related parties and a description of related 

party transactions are discussed in Note 1 and disclosed 

throughout the financial statements and notes.

APPLICATION OF RECENT ACCOUNTING STANDARDS

Recent accounting standards have been deemed not 

applicable or material to the financial statements as 

presented.

3. Goodwill Litigation

In United States v. Winstar Corp., 518 U.S. 839 (1996), the 

Supreme Court held that when it became impossible 

following the enactment of FIRREA in 1989 for the federal 

government to perform certain agreements to count 

goodwill toward regulatory capital, the plaintiffs were 

entitled to recover damages from the United States. The

contingent liability associated with the nonperformance of 

these agreements was transferred to the FRF on August 9, 

1989, upon the dissolution of the FSLIC.

The FRF can draw from an appropriation provided by Section 

110 of the Department of Justice Appropriations Act, 2000 

(Public Law 106-113, Appendix A, Title I, 113 Stat. 1501A-3, 

1501A-20), such sums as may be necessary for the payment 

of judgments and compromise settlements in the goodwill 

litigation. This appropriation is to remain available until 

expended.

All known goodwill cases have been litigated, including the 

last remaining goodwill case that was resolved in 2015. 

However, a determination regarding the continued need for 

the appropriation will be made as the FRF winds up its 

operations.

4. Affordable Housing Disposition Program

Required by FIRREA under section 501, the Affordable 

Housing Disposition Program (AHDP) was established in 1989 

to ensure the preservation of affordable housing for low-
FINANCIAL SECTION

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 140 

FSLIC RESOLUTION FUND

3

income households. The FDIC, in its capacity as 

administrator of the FRF-RTC, assumed responsibility for 

monitoring property owner compliance with land use 

restriction agreements (LURAs). To enforce the property 

owners’ LURA obligation, the RTC, prior to its dissolution, 

entered into Memoranda of Understanding with 34

monitoring agencies to oversee these LURAs. As of December 

31, 2022, 21 monitoring agencies oversee these LURAs. The 

FDIC, through the FRF, has agreed to indemnify the 

monitoring agencies for all losses related to LURA legal 

enforcement proceedings.

From 2006 through 2018, two lawsuits against property 

owners resulted in $23 thousand in legal expenses, which 

were fully reimbursed due to successful litigation. In 2019, 

new litigation against two property owners has thus far 

resulted in legal expenses of $12 thousand. In 2022, one of 

the litigation cases was settled and the FDIC was reimbursed 

$7 thousand. The maximum potential exposure to the FRF 

cannot be estimated as it is contingent upon future legal 

proceedings. However, loss mitigation factors include: (1) 

the indemnification may become void if the FDIC is not 

immediately informed upon receiving notice of any legal 

proceedings and (2) the FDIC is entitled to reimbursement of 

any legal expenses incurred for successful litigation against a 

property owner. AHDP guarantees will continue until the 

termination of the last LURA, or 2045 (whichever occurs first). 

As of December 31, 2022 and 2021, no contingent liability for 

this indemnification has been recorded. 

5. Resolution Equity

As stated in the Overview section of Note 1, the FRF is 

composed of two distinct pools: the FRF-FSLIC and the FRFRTC. The FRF-FSLIC consists of the assets and liabilities of 

the former FSLIC. The FRF-RTC consists of the assets and 

liabilities of the former RTC. Pursuant to legal restrictions, 

the two pools are maintained separately and the assets of 

one pool are not available to satisfy obligations of the other.

Contributed capital, accumulated deficit, and resolution 

equity consisted of the following components by each pool 

(dollars in thousands).

December 31, 2022

Contributed capital $ 43,864,980 $ 81,604,337 $ 125,469,317

Accumulated deficit (42,968,050) (81,578,888) (124,546,938)

Total Resolution Equity $ 896,930 $ 25,449 $ 922,379

FRF 

FRF-FSLIC FRF-RTC Consolidated

December 31, 2021

Contributed capital $ 43,864,980 $ 81,604,337 $ 125,469,317

Accumulated deficit (42,982,564) (81,578,935) (124,561,499)

Total Resolution Equity $ 882,416 $ 25,402 $ 907,818

FRF 

FRF-FSLIC FRF-RTC Consolidated

CONTRIBUTED CAPITAL

The FRF-FSLIC and the former RTC received $43.5 billion and 

$60.1 billion from the U.S. Treasury, respectively, to fund 

losses from thrift resolutions prior to July 1, 1995. 

Additionally, the FRF-FSLIC issued $670 million in capital 

certificates to the Financing Corporation (a mixed-ownership 

government corporation established to function solely as a 

financing vehicle for the FSLIC) and the RTC issued $31.3

billion of these instruments to the REFCORP. FIRREA 

prohibited the payment of dividends on any of these capital 

certificates. Through December 31, 2022, the FRF-FSLIC

received a total of $2.3 billion in goodwill appropriations, the 

effect of which increased contributed capital.

Through December 31, 2022, the FRF-RTC had returned $4.6

billion to the U.S. Treasury and made payments of $5.2 billion 

to the REFCORP. The most recent payment to the REFCORP 

was in July of 2020 for $20 million. In addition, the FDIC 

returned $2.6 billion to the U.S. Treasury on behalf of the FRFFSLIC in 2013. These actions reduced contributed capital. 

ACCUMULATED DEFICIT

The accumulated deficit represents the cumulative excess of 

expenses and losses over revenue for activity related to the 

FRF-FSLIC and the FRF-RTC. Approximately $29.8 billion and 

$87.9 billion were brought forward from the former FSLIC 

and the former RTC on August 9, 1989, and January 1, 1996, 

respectively. Since the dissolution dates, the FRF-FSLIC 

accumulated deficit increased by $13.2 billion, whereas the 

FRF-RTC accumulated deficit decreased by $6.3 billion.

6. Fair Value of Financial Instruments

At December 31, 2022 and 2021, the FRF’s financial assets 

measured at fair value on a recurring basis are cash 

equivalents (see Note 2) of $897 million and $882 million, 

respectively. Cash equivalents are Special U.S. Treasury 

Certificates with overnight maturities valued at prevailing 

interest rates established by the U.S. Treasury’s Bureau of the 

Fiscal Service. The valuation is considered a Level 1 

measurement in the fair value hierarchy, representing 

quoted prices in active markets for identical assets.
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 141 

NOTES TO THE FINANCIAL STATEMENTS

4

7. Information Relating to the Statement of Cash Flows

The following table presents a reconciliation of net income to 

net cash from operating activities (dollars in thousands).

Operating Activities

Net Income: $ 14,561 $ 388

Change in Assets and Liabilities:

Decrease in other assets, net 40 411

(Decrease) in accounts payable 

and other liabilities (2) (9)

Net Cash Provided by Operating 

Activities $ 14,599 $ 790

2022

December 31

2021

December 31

8. Subsequent Events

Subsequent events have been evaluated through February 9,

2023, the date the financial statements are available to be 

issued. Based on management’s evaluation, there were no 

subsequent events requiring disclosure. 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 142 

441 G St. N.W. 

Washington, DC 20548 

Independent Auditor’s Report 

To the Board of Directors of the Federal Deposit Insurance Corporation 

In our audits of the 2022 and 2021 financial statements of the Deposit Insurance Fund (DIF) and 

of the Federal Savings and Loan Insurance Corporation (FSLIC) Resolution Fund (FRF), both of 

which the Federal Deposit Insurance Corporation (FDIC) administers,1 we found 

• the financial statements of the DIF and of the FRF as of and for the years ended 

December 31, 2022, and 2021, are presented fairly, in all material respects, in accordance 

with U.S. generally accepted accounting principles; 

• although internal controls could be improved, FDIC maintained, in all material respects, 

effective internal control over financial reporting relevant to the DIF and to the FRF as of 

December 31, 2022; and 

• with respect to the DIF and to the FRF, no reportable noncompliance for 2022 with 

provisions of applicable laws, regulations, contracts, and grant agreements we tested. 

The following sections discuss in more detail (1) our report on the financial statements and on 

internal control over financial reporting and other information included with the financial 

statements;2 (2) our report on compliance with laws, regulations, contracts, and grant 

agreements; and (3) agency comments. 

Report on the Financial Statements and on Internal Control over Financial Reporting 

Opinions on the Financial Statements 

In accordance with Section 17 of the Federal Deposit Insurance Act, as amended,3 and the 

Government Corporation Control Act,4 we have audited the financial statements of the DIF and 

of the FRF, both of which FDIC administers. The financial statements of the DIF comprise the 

balance sheets as of December 31, 2022, and 2021; the related statements of income and fund 

balance and of cash flows for the years then ended; and the related notes to the financial 

statements. The financial statements of the FRF comprise the balance sheets as of 

December 31, 2022, and 2021; the related statements of income and accumulated deficit and of 

 

1A third fund managed by FDIC, the Orderly Liquidation Fund, established by Section 210(n) of the Dodd-Frank Wall 

Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376, 1506 (2010), is unfunded and did 

not have any transactions from its inception in 2010 through 2022. 

2Other information consists of information included with the financial statements, other than the auditor’s report. 

3Act of September 21, 1950, Pub. L. No. 797, § 2[17], 64 Stat. 873, 890, classified as amended at 12 U.S.C. § 1827. 

431 U.S.C. §§ 9101-9110. 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 143 

cash flows for the years then ended; and the related notes to the financial statements. In our 

opinion, 

• the DIF’s financial statements present fairly, in all material respects, the DIF’s financial 

position as of December 31, 2022, and 2021, and the results of its operations and its cash 

flows for the years then ended, in accordance with U.S. generally accepted accounting 

principles, and 

• the FRF’s financial statements present fairly, in all material respects, the FRF’s financial 

position as of December 31, 2022, and 2021, and the results of its operations and its cash 

flows for the years then ended, in accordance with U.S. generally accepted accounting 

principles. 

Opinions on Internal Control over Financial Reporting 

We also have audited FDIC’s internal control over financial reporting relevant to the DIF and to 

the FRF as of December 31, 2022, based on criteria established under 31 U.S.C. § 3512(c), (d), 

commonly known as the Federal Managers’ Financial Integrity Act of 1982 (FMFIA). 

In our opinion, although certain internal controls could be improved, 

• FDIC maintained, in all material respects, effective internal control over financial reporting 

relevant to the DIF as of December 31, 2022, based on criteria established under FMFIA, 

and 

• FDIC maintained, in all material respects, effective internal control over financial reporting 

relevant to the FRF as of December 31, 2022, based on criteria established under FMFIA. 

As discussed below in more detail, our 2022 audit continued to identify deficiencies in FDIC’s 

controls over contract documentation and payment review processes that collectively represent 

a significant deficiency in FDIC’s internal control over financial reporting.5 We considered this 

significant deficiency in determining the nature, timing, and extent of our audit procedures on 

the DIF’s and the FRF’s 2022 financial statements. 

Although the significant deficiency in internal control did not affect our opinions on the 2022 and 

2021 financial statements of the DIF and of the FRF, misstatements may occur in unaudited 

financial information reported internally and externally by FDIC because of this significant 

deficiency. 

In addition to the significant deficiency in internal control over contract documentation and 

payment review processes, we also identified other deficiencies in FDIC’s internal control over 

financial reporting that we do not consider to be material weaknesses or significant deficiencies. 

 

5A deficiency in internal control exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, 

misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal 

control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity’s 

financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a 

deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material 

weakness, yet important enough to merit the attention by those charged with governance. 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 144 

Nonetheless, these deficiencies warrant FDIC management’s attention. We have communicated 

these matters to FDIC management and, where appropriate, will report on them separately. 

Significant Deficiency in Internal Control over Contract Documentation and Payment Review 

Processes 

During our 2022 audit, we continued to identify deficiencies in contract documentation and 

payment review processes that collectively represent a significant deficiency in FDIC’s internal 

control over financial reporting. Specifically, as in prior years,6 FDIC did not consistently 

implement controls over contract documentation and payment review processes. 

FDIC oversight managers are responsible for verifying that contractors deliver purchased goods 

or services and perform their work according to contract terms and delivery schedules. 

Oversight managers also monitor the expenditures of funds in relation to contract dollar ceilings 

and approve invoices for payment. FDIC contracting officers, acting within the scope of their 

authority to contract on behalf of FDIC, are responsible for entering into, administering, and 

terminating contracts; making related decisions; managing and maintaining contract 

documentation; and executing contract modifications. 

We identified deficiencies in FDIC’s implementation of these internal controls that increased the 

risks that improper payments could occur and operating expenses and accounts payable could 

be misstated. For example: 

• We found two instances where an oversight manager approved a contractor invoice that did 

not agree to the terms of the contract pricing schedule, resulting in an improper payment 

and a misallocated payment. 

• We found one instance where an oversight manager approved a miscalculated contract 

payment adjustment, resulting in a potential improper payment. 

• We found three instances where contract documentation was not properly maintained in 

FDIC’s Contract Electronic File (CEFile) and documents were not signed by a contracting 

officer, as required by FDIC’s Acquisition Policy Manual. Further, these documents were 

stored on and inadvertently deleted from a contracting officer’s computer hard drive, and 

backup copies of the documents were not maintained. 

• We found two additional instances in which contract documentation was stored on 

employees’ computer hard drives, increasing the risk of loss of contract documentation that 

could lead to inappropriate procurement decisions and improper payments. Due to 

validation requirements while transitioning procurement systems, FDIC instructed 

employees to store contract documentation on employees’ individual computer hard drives

during the 3-month transition period. 

 

6GAO, Financial Audit: Federal Deposit Insurance Corporation Funds’ 2021 and 2020 Financial Statements, GAO-22-

104601 (Washington, D.C.: Feb. 17, 2022). 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 145 

According to GAO’s Standards for Internal Control in the Federal Government,7 agency 

management is responsible for establishing and maintaining effective internal control to serve 

as the first line of defense in safeguarding assets and preventing and detecting errors and fraud. 

Further, GAO’s Framework for Assessing the Acquisition Function for Federal Agencies,8 states 

that when financial data are not useful, relevant, timely, or reliable, the acquisition function is at 

risk of inefficient or wasteful business practices. Without adequate contract documentation and 

payment review processes, FDIC cannot reasonably assure that internal controls over contract 

payments are operating effectively, which increases the risks of improper payments and 

misstatements in the financial statements. 

While these deficiencies do not individually or collectively constitute a material weakness, 

FDIC’s deficiencies related to contract documentation and payment review processes are 

important enough to merit the attention of those charged with governance of FDIC. Thus, these 

deficiencies continue to represent a significant deficiency in FDIC’s internal control over 

financial reporting as of December 31, 2022. Management commitment and attention will be 

essential to continue addressing these deficiencies and improving FDIC’s controls over contract 

documentation and payment review processes. 

As in the prior year,9 we plan to report additional details concerning this significant deficiency 

separately to FDIC management, along with recommendations for corrective actions. 

Basis for Opinions 

We conducted our audits in accordance with U.S. generally accepted government auditing 

standards. Our responsibilities under those standards are further described in the Auditor’s 

Responsibilities for the Audits of the Financial Statements and Internal Control over Financial 

Reporting section of our report. We are required to be independent of FDIC and to meet our 

other ethical responsibilities, in accordance with the relevant ethical requirements relating to our 

audits. We believe that the audit evidence we have obtained is sufficient and appropriate to 

provide a basis for our audit opinions. 

Responsibilities of Management for the Financial Statements and Internal Control over Financial 

Reporting 

FDIC management is responsible for (1) the preparation and fair presentation of these financial 

statements in accordance with U.S. generally accepted accounting principles; (2) preparing and 

presenting other information included in FDIC’s annual report, and ensuring the consistency of 

that information with the audited financial statements; (3) designing, implementing, and 

maintaining effective internal control over financial reporting relevant to the preparation and fair 

presentation of financial statements that are free from material misstatement, whether due to 

fraud or error; (4) assessing the effectiveness of internal control over financial reporting based 

on the criteria established under FMFIA; and (5) its assessment about the effectiveness of 

 

7GAO, Standards for Internal Control in the Federal Government, GAO-14-704G (Washington, D.C.: September 

2014). 

8GAO, Framework for Assessing the Acquisition Function at Federal Agencies, GAO-05-218G (Washington, D.C.: 

September 2005). 

9GAO, Management Report: Improvements Needed in FDIC’s Internal Control over Contract Documentation and 

Payment-Review Processes, GAO-22-105824 (Washington, D.C.: May 19, 2022). 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 146 

internal control over financial reporting as of December 31, 2022, included in the accompanying 

Management’s Report on Internal Control over Financial Reporting in appendix I. 

In preparing the financial statements, management is required to evaluate whether there are 

conditions or events, considered in the aggregate, that raise substantial doubt about the DIF’s 

and the FRF’s ability to continue as going concerns for a reasonable period of time. 

Auditor’s Responsibilities for the Audits of the Financial Statements and Internal Control over 

Financial Reporting 

Our objectives are to obtain reasonable assurance about whether the financial statements as a 

whole are free from material misstatement, whether due to fraud or error, and about whether 

effective internal control over financial reporting was maintained in all material respects, and to 

issue an auditor’s report that includes our opinions. 

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore 

is not a guarantee that an audit of the financial statements or an audit of internal control over 

financial reporting conducted in accordance with U.S. generally accepted government auditing 

standards will always detect a material misstatement or a material weakness when it exists. The 

risk of not detecting a material misstatement resulting from fraud is higher than for one resulting 

from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or 

the override of internal control. Misstatements, including omissions, are considered to be 

material if there is a substantial likelihood that, individually or in the aggregate, they would 

influence the judgment made by a reasonable user based on the financial statements. 

In performing an audit of financial statements and an audit of internal control over financial 

reporting in accordance with U.S. generally accepted government auditing standards, we: 

• Exercise professional judgment and maintain professional skepticism throughout the audits. 

• Identify and assess the risks of material misstatement of the financial statements, whether 

due to fraud or error, and design and perform audit procedures responsive to those risks. 

Such procedures include examining, on a test basis, evidence regarding the amounts and 

disclosures in the financial statements in order to obtain audit evidence that is sufficient and 

appropriate to provide a basis for our opinion. 

• Obtain an understanding of internal control relevant to our audit of the financial statements 

in order to design audit procedures that are appropriate in the circumstances. 

• Obtain an understanding of internal control relevant to our audit of internal control over 

financial reporting, assess the risks that a material weakness exists, and test and evaluate 

the design and operating effectiveness of internal control over financial reporting based on 

the assessed risk. Our audit of internal control also considered FDIC’s process for 

evaluating and reporting on internal control over financial reporting based on criteria 

established under FMFIA. We did not evaluate all internal controls relevant to operating 

objectives as broadly established under FMFIA, such as those controls relevant to preparing 

performance information and ensuring efficient operations. We limited our internal control 

testing to testing controls over financial reporting. Our internal control testing was for the 

purpose of expressing an opinion on whether effective internal control over financial 

reporting was maintained, in all material respects. Consequently, our audit may not identify 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 147 

all deficiencies in internal control over financial reporting that are less severe than a material 

weakness. 

• Evaluate the appropriateness of accounting policies used and the reasonableness of 

significant accounting estimates made by management, as well as evaluate the overall 

presentation of the financial statements. 

• Perform other procedures we consider necessary in the circumstances. 

• Conclude whether, in our judgment, there are conditions or events, considered in the 

aggregate, that raise substantial doubt about the DIF’s and the FRF’s ability to continue as 

going concerns for a reasonable period of time. 

We are required to communicate with those charged with governance regarding, among other 

matters, the planned scope and timing of the audit, significant audit findings, and certain internal 

control-related matters that we identified during the financial statement audit. 

Definition and Inherent Limitations of Internal Control over Financial Reporting 

An entity’s internal control over financial reporting is a process effected by those charged with 

governance, management, and other personnel, the objectives of which are to provide 

reasonable assurance that (1) transactions are properly recorded, processed, and summarized 

to permit the preparation of financial statements in accordance with U.S. generally accepted 

accounting principles, and assets are safeguarded against loss from unauthorized acquisition, 

use, or disposition, and (2) transactions are executed in accordance with provisions of 

applicable laws, regulations, contracts, and grant agreements, noncompliance with which could 

have a material effect on the financial statements. 

Because of its inherent limitations, internal control over financial reporting may not prevent, or 

detect and correct, misstatements due to fraud or error. We also caution that projecting any 

evaluation of effectiveness to future periods is subject to the risk that controls may become 

inadequate because of changes in conditions, or that the degree of compliance with the policies 

or procedures may deteriorate. 

Other Information 

FDIC’s other information contains a wide range of information, some of which is not directly 

related to the financial statements. This information is presented for purposes of additional 

analysis and is not a required part of the financial statements. Management is responsible for 

the other information included in FDIC’s annual report. The other information comprises the 

information included in the annual report, but does not include the financial statements and our 

auditor’s report thereon. Our opinion on the DIF’s and the FRF’s financial statements does not 

cover the other information, and we do not express an opinion or any form of assurance 

thereon. 

In connection with our audit of the financial statements, our responsibility is to read the other 

information and consider whether a material inconsistency exists between the other information 

and the financial statements, or the other information otherwise appears to be materially 

misstated. If, based on the work performed, we conclude that an uncorrected material 

misstatement of the other information exists, we are required to describe it in our report. 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 148 

Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements 

In connection with our audits of the financial statements of the DIF and of the FRF, we tested 

compliance with selected provisions of applicable laws, regulations, contracts, and grant 

agreements consistent with our auditor’s responsibilities discussed below. 

Results of Our Tests for Compliance with Laws, Regulations, Contracts, and Grant Agreements 

Our tests for compliance with selected provisions of applicable laws, regulations, contracts, and 

grant agreements disclosed no instances of noncompliance for 2022 that would be reportable, 

with respect to the DIF and to the FRF, under U.S. generally accepted government auditing 

standards. However, the objective of our tests was not to provide an opinion on compliance with 

applicable laws, regulations, contracts, and grant agreements. Accordingly, we do not express 

such an opinion. 

Basis for Results of Our Tests for Compliance with Laws, Regulations, Contracts, and Grant 

Agreements 

We performed our tests of compliance in accordance with U.S. generally accepted government 

auditing standards. Our responsibilities under those standards are further described in the 

Auditor’s Responsibilities for Tests of Compliance section below. 

Responsibilities of Management for Compliance with Laws, Regulations, Contracts, and Grant 

Agreements 

FDIC management is responsible for complying with applicable laws, regulations, contracts, and 

grant agreements. 

Auditor’s Responsibilities for Tests of Compliance with Laws, Regulations, Contracts, and Grant 

Agreements 

Our responsibility is to test compliance with selected provisions of applicable laws, regulations, 

contracts, and grant agreements that have a direct effect on the determination of material 

amounts and disclosures in the financial statements of the DIF and of the FRF, and perform 

certain other limited procedures. Accordingly, we did not test compliance with all applicable 

laws, regulations, contracts, and grant agreements. We caution that noncompliance may occur 

and not be detected by these tests. 

Intended Purpose of Report on Compliance with Laws, Regulations, Contracts, and Grant 

Agreements 

The purpose of this report is solely to describe the scope of our testing of compliance with 

selected provisions of applicable laws, regulations, contracts, and grant agreements, and the 

results of that testing, and not to provide an opinion on compliance. This report is an integral 

part of an audit performed in accordance with U.S. generally accepted government auditing 

standards in considering compliance. Accordingly, this report on compliance with laws, 

regulations, contracts, and grant agreements is not suitable for any other purpose. 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 149 

Agency Comments 

In commenting on a draft of this report, FDIC stated that it was pleased to receive unmodified 

opinions for the 31st consecutive year on the DIF’s and the FRF’s financial statements. In 

regard to the significant deficiency in internal control over contract documentation and payment 

review processes, FDIC stated that while it took significant measures during 2022 to resolve the 

significant deficiency, controls were inconsistently applied. Further, FDIC stated that it would be 

performing additional risk-based control activities and enhancing monitoring capabilities related 

to this area. FDIC reiterated its commitment to sound financial management and assurance that 

this remains a top priority. The complete text of FDIC’s response is reprinted in appendix II. 

M. Hannah Padilla 

Director 

Financial Management and Assurance 

February 9, 2023 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 150 

APPENDIX I
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2022 151 

APPENDIX II