2

FINANCIAL HIGHLIGHTS 51

Deposit Insurance 

Fund Performance

The FDIC administers the Deposit Insurance 

Fund (DIF) and the FSLIC Resolution Fund 

(FRF), which fulfills the obligations of the former 

Federal Savings and Loan Insurance Corporation 

(FSLIC) and the former Resolution Trust 

Corporation (RTC). The following summarizes 

the condition of the DIF. (See the accompanying 

graphs on FDIC-Insured Deposits and Insurance 

Fund Reserve Ratios on the following page.)

For 2010, the DIF’s comprehensive income was 

$13.5 billion compared to a comprehensive loss 

of $38.1 billion during 2009. This year-overyear change of $51.6 billion was primarily due 

to a $58.6 billion decline in the provision for 

insurance losses, partially offset by a $4.1 billion 

decrease in assessments earned (largely attributable 

to the 2009 special assessment). 

The provision for insurance losses was negative 

$848 million for 2010, compared to positive 

$57.7 billion for 2009. The 2009 provision 

reflected the significant losses estimated to be 

incurred by the DIF from the 2009 and future 

failures. In contrast, the 2010 negative provision 

is primarily impacted by a reduction in the 

contingent loss reserve due to the improvement 

in the financial condition of institutions that were 

previously identified to fail and adjustments to the 

estimated losses for banks that have failed.

The DIF’s total liquidity declined by $19.9 

billion, or 30 percent, to $46.2 billion during 

2010. The decrease was primarily the result 

of disbursing $28.8 billion to fund 157 bank 

failures during 2010, although it should be noted 

that 130 of these failures were resolved as cashconserving loss-share transactions (in which the 

acquirers purchased substantially all of the failed 

institutions’ assets and the FDIC and the acquirers 

entered into loss-share agreements) requiring 

lower initial resolution funding. Moreover, during 

2010, the DIF received $13.6 billion in dividends 

and other payments from its receiverships, which 

helped to mitigate the DIF liquidity’s decline.

Financial

Highlights
52 FINANCIAL HIGHLIGHTS

SEP-07 DEC-07 MAR-08 JUN-08 SEP-08 DEC-08 MAR-09 JUN-09 SEP-09 DEC-09 MAR-10 JUN-10 SEP-10

Dollars in Billions

ESTIMATED DIF INSURED DEPOSITS

0

1,000

2,000

3,000

4,000

5,000

6,000

SOURCE: Commercial Bank Call and Thrift Financial Reports

Note: Beginning in the fourth quarter of 2010, estimated insured deposits include the entire balance of noninterest-bearing transaction accounts.

$7,000

DEC-10

Fund Balances as a Percent of Insured Deposits

DEPOSIT INSURANCE FUND RESERVE RATIOS 1.5

1.2

0.9

0.6

0.3

0.0

–0.3

–0.6

SEP-07 DEC-07 MAR-08 JUN-08 SEP-08 DEC-08 MAR-09 JUN-09 SEP-09 DEC-09 MAR-10 JUN-10 SEP-10 DEC-10
FINANCIAL HIGHLIGHTS 53

Corporate Operating Budget

The FDIC segregates its corporate operating 

budget and expenses into two discrete 

components: ongoing operations and receivership 

funding. The receivership funding component 

represents expenses resulting from financial 

institution failures and is, therefore, largely driven 

by external forces, while the ongoing operations 

component accounts for all other operating 

expenses and tends to be more controllable 

and estimable. Corporate Operating expenses 

totaled $3.4 billion in 2010, including $1.4 

billion in ongoing operations and $2.0 billion 

in receivership funding. This represented 

approximately 96 percent of the approved budget 

for ongoing operations and 80 percent of the 

approved budget for receivership funding for 

the year. (The numbers above in this paragraph 

will not agree with the DIF and FRF financial 

statements due to differences in how items 

are classified.)

The Board of Directors approved a 2011 

Corporate Operating Budget of approximately 

$3.9 billion, consisting of $1.7 billion for 

ongoing operations and $2.2 billion for 

receivership funding. The level of approved 

ongoing operations budget is approximately 

$251 million (18 percent) higher than actual 

2010 ongoing operations expenses, while the 

approved receivership funding budget is roughly 

$205 million (10 percent) higher than actual 

2010 receivership funding expenses.

As in prior years, the 2011 budget was formulated 

primarily on the basis of an analysis of projected 

workload for each of the Corporation’s three 

major business lines and its major program 

support functions. The most significant factors 

contributing to the proposed increase in the 

ongoing operations component of the budget are 

further staffing increases for the Corporation’s risk 

management and consumer protection supervisory 

programs in 2011; the implementation of a larger 

Deposit Insurance Fund Selected Statistics 

For the years ended December 31

Dollars in Millions

2010 2009 2008

Financial Results

Revenue $13,380 $24,706 $7,306 

Operating Expenses 1,593 1,271 1,033 

Insurance and Other Expenses (includes provision for loss) (1,518) 59,438 43,306 

Net Income (Loss) 13,305 (36,003) (37,033)

Comprehensive Income (Loss) 13,510 (38,138) (35,137)

Fund Balance $(7,352) $(20,862) $17,276 

Reserve Ratio (0.12) % (0.39) % 0.36 %

Selected Statistics

Total DIF-Member Institutions1 7,657 8,012 8,305 

Problem Institutions 884 702 252 

Total Assets of Problem Institutions $390,017 $402,782 $159,405 

Institution Failures 157 140 25 

Total Assets of Failed Institutions in Year2 $92,085 $169,709 $371,945 

Number of Active Failed Institution Receiverships 336 179 41 

1 Commercial banks and savings institutions. Does not include U.S. insured branches of foreign banks.

2 Based upon the last Call Report filed by the institution prior to failure.
54 FINANCIAL HIGHLIGHTS

permanent staffing platform in the Division of 

Resolutions and Receiverships (DRR) to ensure 

the Corporation’s future readiness to resolve 

failed banks; and the addition of a number of 

new positions to fulfill the Corporation’s new 

responsibilities under the Dodd-Frank Act. In 

addition, the 2011 receivership funding budget 

allows for resources for contractor support as well 

as non-permanent staffing for DRR, the Legal 

Division, and other organizations should workload 

in these areas require an immediate response.

Investment Spending

The FDIC instituted a separate Investment 

Budget in 2003. It has a disciplined process for 

reviewing proposed new investment projects and 

managing the construction and implementation 

of approved projects. All of the projects in the 

current investment portfolio are major IT system 

initiatives. Proposed IT projects are carefully 

reviewed to ensure that they are consistent with 

the Corporation’s enterprise architecture. The 

project approval and monitoring processes also 

enable the FDIC to be aware of risks to the 

major capital investment projects and facilitate 

appropriate, timely intervention to address 

these risks throughout the development 

process. An investment portfolio performance 

review is provided to the FDIC’s Board of 

Directors quarterly.

The Corporation undertook significant capital 

investments during the 2003-2010 period, the 

largest of which was the expansion of its Virginia 

Square office facility. Other projects involved 

the development and implementation of major 

IT systems. Investment spending totaled $266.4 

million during this period, peaking at $108.2 

million in 2004. Spending for investment projects 

in 2010 totaled approximately $0.4 million.

In 2011, investment spending is estimated at

$7 million.

Dollars in Millions

INVESTMENT SPENDING 2003 – 2010

$120

100

80

60

40

20

0

2003 2004 2005 2006 2007 2008 2009 2010