Federal Deposit Insurance Corporation 

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

 

 May 17, 2011 

MEMORANDUM TO: The Board of Directors 

FROM: Steven O. App 

Deputy to the Chairman and 

 Chief Financial Officer 

Craig Jarvill 

Acting Director, Division of Finance 

SUBJECT: First Quarter 2011 CFO Report to the Board 

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

March 31, 2011. 

Executive Summary

 For the first quarter of 2011, the Deposit Insurance Fund (DIF) balance increased by $6.3 

billion to negative $1.0 billion. This increase was primarily due to $3.5 billion in assessments 

earned and a negative $3.1 billion provision for insurance losses, offset by $395 million in 

operating expenses. The fund balance has increased in each of the last five consecutive 

quarters and has risen by a total of $19.8 billion during that time. 

 During the first quarter of 2011, the FDIC was named receiver for 26 failed institutions. The 

combined assets at inception for these institutions totaled approximately $10.3 billion with a 

total estimated loss of $1.9 billion. The corporate cash outlay during the first quarter for these 

failures was approximately $2.6 billion. 

 Through March 31, 2011, overall Corporate Operating Budget expenditures were below budget 

by 22 percent ($199 million). This variance was primarily the result of lower spending for 

contractual services and shorter than expected operations at receivership locations in the 

Receivership Funding component. 
2

I. Corporate Fund Financial Results (See pages 7 - 8 for detailed data and charts.) 

Deposit Insurance Fund (DIF) 

 For the three months ending March 31, 2011, the DIF’s comprehensive income totaled $6.3 

billion compared to comprehensive income of $145 million for the same period last year. This 

$6.2 billion increase was mostly due to a $6.1 billion decrease in the provision for insurance 

losses and a $206 million increase in assessment revenue, partially offset by a $50 million 

increase in operating expenses and a $131 million decrease in unrealized gains on trust 

preferred securities. 

 During the first quarter 2011, the DIF recognized $3.5 billion in estimated assessment revenue 

for first quarter 2011 insurance coverage, which includes non-interest bearing transaction 

accounts that received coverage under the Dodd-Frank Act for two years beginning December 

31, 2010. 

 Additionally, on March 30, the FDIC collected $206 million in deposit insurance DIF 

assessments and $52 million in Transaction Account Guarantee (TAG) Program fees for fourth 

quarter 2010 insurance coverage (fees are collected one quarter in arrears). This quarter is the 

last time that the FDIC will collect fees under the TAG Program, which expired on December 

31, 2010. Since the inception of the TAG Program, the FDIC collected TAG fees totaling $1.2 

billion. 

 The provision for insurance losses was negative $3.1 billion for the first quarter of 2011. The 

negative provision resulted from: a $1.4 billion reduction in the contingent loss reserve due to 

the improvement in the financial condition of institutions that were previously identified to fail; 

a $1.0 billion reduction in the estimated losses for banks that failed in 2010 where recent 

liquidation activity yielded recoveries higher than previously estimated; and a $600 million 

adjustment for lower-than-anticipated loss estimates at time of failure for banks that failed in 

the current quarter. 

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

DIF Investment Portfolio 

 The total liquidity (total market value including accrued interest) of all DIF-related investment 

portfolios stood at $45.5 billion on March 31, 2011, down from $46.2 billion on December 31, 

2010, led by the decline in the DIF investment portfolio as discussed below. 

 The DIF investment portfolio’s total market value decreased by $1.0 billion during the first 

quarter of 2011, and totaled $38.5 billion on March 31, 2011. The decrease was primarily the 

result of funding 26 bank failures during the first quarter of 2011. Moreover, during the first 

quarter of 2011, the DIF received $3.3 billion in dividends and other payments from its 

receiverships, thus mitigating the DIF portfolio’s decline. 

 On March 31, 2011, the DIF investment portfolio’s yield was 0.28 percent, down 12 basis 

points from its December 31, 2010, yield of 0.40 percent. A primary factor in this decline was 

that $1.4 billion in relatively high-yielding Treasury Inflation-Protected Securities with a 
3

weighted average yield of 4.17 percent matured during the period. The DIF investment 

portfolio’s total return for the first quarter of 2011 was about 0.10 percent, 11 basis points 

higher than the -0.01 percent total return of its benchmark, the Merrill Lynch 1-10 Year 

Treasury Index (Index). Given that most longer-maturity Treasury yields increased (that is, 

Treasury security prices fell) over the first quarter, the DIF portfolio’s large balances of 

comparatively low yielding overnight investments did not experience a price decline, hence the 

outperformance compared to the Index (the Index has longer-duration conventional Treasury 

securities). 

 In accordance with the approved first quarter 2011 investment strategy, staff purchased a total 

of seven short-maturity Treasury securities on two occasions during the first quarter of 2011. 

The seven securities had a total par value of $8.1 billion, a weighted average yield-to-maturity 

of 0.68 percent, and a weighted average maturity (WAM) of 1.68 years. 

Other Corporate Investment Portfolios 

 On March 31, 2011, the Debt Guarantee Program (DGP) investment portfolio stood at $7.0 

billion (total market value), up about 5 percent from its December 31, 2010 balance of $6.6 

billion. This increase was principally due to the net transfer of a little over $300 million from 

the DIF portfolio to the DGP portfolio, reversing payments made by the DGP to the DIF for 

TAG claims. At quarter end, the DGP portfolio had a yield to maturity of 0.20 percent and a 

WAM of 0.38 years. In accordance with the approved first quarter 2011 investment strategy 

for the DGP portfolio, staff purchased four short-maturity Treasury securities during the first 

quarter of 2011. The securities had a total par value of $1.2 billion, a weighted average yieldto-maturity of 0.75 percent, and a WAM of 1.79 years. 

III. Budget Results (See pages 11 - 12 for detailed data.) 

Approved Budget Modifications 

The 2011 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other 

officials the authority to make certain modifications to the 2011 Corporate Operating Budget. The 

following budget reallocations were made during the first quarter in accordance with the authority 

delegated by the Board of Directors. None of these modifications changed the total 2011 

Corporate Operating Budget as approved by the Board in December 2010 (and amended by the 

Board in January 2011): 

 In January 2011, the Division of Risk Management Supervision (RMS), the Division of 

Depositor and Consumer Protection (DCP), the Division of Resolutions and Receiverships 

(DRR), the Division of Insurance and Research (DIR), and the Division of Administration 

(DOA) reallocated budget authority among major expense categories within their approved 

Ongoing Operations budgets. RMS and DCP realigned $1.0 million and $0.2 million, 

respectively, from the Travel expense category to various other expense categories. 

 In February 2011, the CFO approved a $3 million increase in the Outside Services – Other 

expense category of the Ongoing Operations budget for the Office of Public Affairs (OPA), 

with a corresponding decrease in the Corporate Unassigned budget to fund a public awareness 

campaign on bank overdraft programs. 
4

 In February 2011, in conjunction with the recently revised Home Mortgage Disclosure Act 

(HMDA) validation procedures, the CFO approved the reallocation of $3,562,986 in budget 

authority from the Corporate Unassigned budget to DCP’s Ongoing Operations budget 

component. This adjustment increased DCP’s budget authority in the Salaries and 

Compensation (+$3,043,878), Travel (+$507,169), and Other Expenses (+$11,939) categories. 

 In March 2011, the CFO approved the reallocation of $137,593 within the Ongoing Operations 

component of the 2011 Corporate Operating Budget from the Other Expenses category of the 

DCP budget to RMS to provide additional budget authority in the Travel (+$12,573) and Other 

Expenses (+$125,020) categories to support the National Minority Depository Institutions 

conference, which will be conducted by RMS. 

 In March 2011, the CFO approved the reallocation of $616,067 within the Ongoing Operations 

component from the Corporate Unassigned budget to the Salary and Compensation 

(+$613,192) and Other Expenses (+$2,875) categories in the Division of Information 

Technology (DIT) to provide funding for an increase of five positions in DIT’s authorized 2011 

staffing. 

 In March 2011, the CFO approved the reallocation of $1,265,600 within the Ongoing 

Operations budget component from the Corporate Unassigned and Executive Office budgets to 

DCP to fund ten newly authorized positions and transfer one staff member. This adjustment 

included funding for Salaries and Compensation (+$1,167,286), Travel (+$92,770), and Other 

Expenses (+$5,544). 

Following these budget reallocations, the amounts remaining available within the Corporate 

Unassigned budgets for the Ongoing Operations and Receivership Funding budget components 

were $16,141,960 and $16,350,002, respectively. 

Approved Staffing Modifications 

The 2011 Budget Resolution delegated to the CFO the authority to modify approved 2011 staffing 

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

approved in the 2011 Corporate Operating Budget. The CFO approved the following changes in 

accordance with the authority delegated to him by the Board of Directors: 

 In February 2011, the CFO approved an increase of 54 authorized positions in DCP to add 17 

non-permanent HMDA validation specialists and 37 permanent compliance examiners. This 

increase brings the total authorized field examiners up to the full requirements estimated by the 

examiner staffing model for 2011. 

 In March 2011, the CFO approved an increase of ten authorized positions (eight permanent, 

two non-permanent) in DCP’s regional offices. The approved increase included six Assistant 

Regional Directors (ARDs) to address the increased workload of the current ARDs; two Fair 

Lending Examination Specialist (FLEX) positions, and two non-permanent Unfair and 

Deceptive Acts and Practices (UDAP) Specialist positions. 

 In March 2011, the CFO approved an increase of five authorized positions (four permanent, 

one non-permanent) in DIT in conjunction with a reorganization within its Infrastructure 

Services Branch (ISB). 
5

 In March 2011, one position was transferred from the Executive Offices to DCP. This 

authorized position will assist with duties that have been transferred to DCP. 

Spending Variances 

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

Significant spending variances for the three months ending March 31, 2011, are defined as those 

that either (1) exceed the YTD budget by $3 million and represent more than 5 percent for a major 

expense category or total division/office budget; or (2) are under the YTD budget for a major 

expense category or division/office by an amount that exceeds $5 million and represents more than 

10 percent of the major expense category or total division/office budget. 

Significant Spending Variances by Major Expense Category 

Ongoing Operations

There were no major expense categories in which a significant spending variance occurred during 

the first quarter in the Ongoing Operations component of the Corporate Operating Budget. 

Receivership Funding

The Receivership Funding component of the 2011 Corporate Operating Budget includes funding 

for expenses in conjunction with institution failures and the management and disposition of the 

assets and liabilities of the ensuing receiverships, except for salary and benefits expenses for 

permanent employees assigned to the receivership management function. 

There were significant spending variances in three of the seven major expense categories during 

the first quarter in the Receivership Funding component of the 2011 Corporate Operating Budget: 

 Outside Services-Personnel ($103 million or 31 percent, less than budgeted) 

 Buildings ($35 million or 57 percent, less than budgeted) 

 Other Expenses ($24 million or 53 percent, less than budgeted) 

The variance in the Outside Services – Personnel expense category was attributable to lower-thanbudgeted costs during the first quarter of 2011 due to less costly resolutions and lower than 

anticipated asset management and marketing costs through March, including Receivership 

Assistance Contracts, loan servicing, loss share, and investigations. Lower spending occurred in 

the Buildings category as a result of shorter than expected operations at receivership locations and 

the lower number of field sites in operation. The variance in the Other Expenses category was 

attributable to lower-than-anticipated time required to facilitate the transfer of banking operations 

and the disposition of failed banks’ assets. 
6

Significant Spending Variances by Division/Office1

Three organizations had significant spending variances through the end of the first quarter: 

 DRR spent $167 million, or 34 percent, less than budgeted, mostly due to less-than-budgeted 

spending for resolution and receivership workload activities for the reasons mentioned above. 

 DIT spent $8 million, or 16 percent, less than budgeted. This variance was largely the result of 

equipment expenses that were $6 million lower than budget due to timing associated with 

laptop purchases. The variance will decrease substantially once the laptops have been received 

and invoiced. 

 The CIO Council spent $4 million, or 41 percent, more than budgeted. This variance reflects a 

decision by the Corporation to fund projects for 2011 that have a total estimated cost in excess 

of the CIO Council budget, because unexpected project delays have consistently caused underspending of the CIO Council budget in prior years. If it appears later in the year that full-year 

CIO Council expenses will exceed the budget, additional funding will be allocated from the 

Corporate Unassigned reserve. Additionally, unbudgeted IT support for the implementation of 

Dodd-Frank contributed to the variance. The CIO Council expects to reallocate its existing 

funds or request additional funding at mid-year to cover any shortfall.

 

1

 Information on division/office variances reflects variances in both the Corporate Operating and Investment Budgets. 
Balance Sheet

Unaudited Audited Quarterly Unaudited Year-Over-Year

Mar-11 Dec-10 Change Mar-10 Change

Cash and cash equivalents 23,496 $ 27,077 $ (3,581) $ 41,094 $ (17,598) $ 

Cash and investments - restricted - systemic risk 6,996 6,647 349 6,077 919 

Investment in U.S. Treasury obligations, net 14,894 12,371 2,523 15,792 (898) 

Trust preferred securities 2,345 2,298 47 2,140 205 

Assessments receivable, net 206 218 (12) 268 (62) 

Receivables and other assets - systemic risk 2,243 2,269 (26) 3,165 (922) 

Interest receivable on investments and other assets, net 264 260 4 134 130 

Receivables from resolutions, net 29,748 29,533 215 39,091 (9,343) 

Property and equipment, net 407 416 (9) 386 21 

Total Assets $ 81,089 80,599 $ (490) $ 108,147 $ (27,548) $ 

Accounts payable and other liabilities 480 514 (34) 351 129

Unearned revenue - prepaid assessments 26,766 30,057 (3,291) 39,718 (12,952)

Liabilities due to resolutions 30,883 30,512 371 38,362 (7,479)

Deferred revenue - systemic risk 9,088 9,055 33 7,999 1,089

Postretirement benefit liability 166 166 - 145 21

Contingent liability for anticipated failures 13,788 17,688 (3,900) 40,720 (26,932)

Contingent liabillty for systemic risk 151 149 2 1,269 (1,118)

Contingent liability for litigation losses 300 300 - 300 - 

Total Liabilities $ 88,441 81,622 $ (6,819) $ 128,864 $ (47,242) $ 

FYI: Unrealized gain (loss) on U.S. Treasury investments, net 27 37 10 113 (76) 

FYI: Unrealized gain (loss) on trust preferred securities 336 383 47 (178) 561 

FYI: Unrealized postretirement benefit gain (loss) (19) (19) - (3) (16) 

Fund Balance $ (7,352) (1,023) $ 6,329 $ (20,717) $ 19,694 $ 

Income Statement (year-to-date) 

Unaudited Audited Unaudited Year-Over-Year

Mar-11 Dec-10 Mar-10 Change

Assessments earned 3,484 $ 13,610 $ 3,278 $ 206 $ 

Systemic risk revenue 5 (673) 49 (44) 

Interest on U.S. Treasury obligations 28 205 62 (34) 

Other revenue 66 238 23 43 

Total Revenue $ 13,380 3,583 $ 3,412 $ 171 $ 

Operating expenses 395 1,593 345 50 

Systemic risk expenses 5 (673) 49 (44) 

Provision for insurance losses (3,089) (848) 3,021 (6,110) 

Insurance and other expenses - 3 1 (1) 

Total Expenses and Losses $ 75 (2,689) $ 3,416 $ (6,105) $ 

Net Income (Loss) 13,305 6,272 (4) 6,276 

Unrealized gain (loss) on U.S. Treasury investments, net (115) 10 (29) 39 

Unrealized gain (loss) on trust preferred securities 47 336 178 (131) 

Unrealized postretirement benefit gain (loss) - (16) - - 

Comprehensive Income (Loss) $ 13,510 6,329 $ 145 $ 6,184 $ 

 

Deposit Insurance Fund

Deposit Insurance Fund

Quarterly Assessments Premiums

(based on insurance coverage period) 

0000

3,196 2,982 3,037

1,087

2,593

8,622

280 265 244 216 206 206

3,217 3,181 3,226 3,267

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

$ in Millions

Cash Collections Prepaid Assessments Estimated

DIF Fund Balance and Estimated Insured Deposits

(8.2)

(20.9)

10.4

13.0 17.3

(20.7)

(15.2)

(8.0) (7.4)

(1.0)

5.3 5.4 4.8 4.8 4.8 5.5 5.4 5.4 6.3 6.4

-$25

-$20

-$15

-$10

-$5

$0

$5

$10

$15

$20

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Fund Balance 

($ in Biliions)

-$25

-$20

-$15

-$10

-$5

$0

$5

$10

$15

$20

Estimated Insured Deposits 

($ in Trillions)

Fund Balance Estimated Insured Deposits

FDIC CFO REPORT TO THE BOARD – First Quarter 2011

Fund Financial Results ($ in Millions) 

7

Reserve ratio: 0.36% 0.27% 0.22% -0.16% -0.39% -0.38% -0.28% -0.15% -0.12% -0.02

•Cash collections in 2010 and 

2011 are from institutions that 

did not prepay assessments at 

year-end 2009.

•Third quarter 2009 assessment 

collections include a $5.5 billion 

special assessment. 

•DIF collected $45.7 billion in 

prepaid assessments on 

12/30/09, which was recorded 

as a liability and is recognized 

as quarterly revenue as it is 

earned. 
8

Fund Financial Results - continued ($ in Millions) 

Statement of Cash Flows (year-to-date) 

Unaudited Audited Unaudited Year-Over-Year

Mar-11 Dec-10 Mar-10 Change

Net Income (Loss) $ 6,272 $ 13,305 $ (4) $ 6,276 

Amortization of U.S. Treasury obligations 14 (5) 3 11 

Treasury inflation-protected securities inflation adjustment (5) (23) (4) (1)

Depreciation on property and equipment 18 69 18 - 

Loss on retirement of property and equipment - 1 - - 

Provision for insurance losses (3,089) (848) 3,021 (6,110)

Unrealized (loss) gain on postretirement benefits - (16) - - 

Change in Operating Assets and Liabilities (3,919) (32,217) (4,656) 737 

Net Cash Provided by (Used by) Operating Activities $ (709) $ (19,734) $ (1,622) $ 913 

Maturity of U.S. Treasury obligations 6,276 21,558 1,355 4,921 

Purchase of property and equipment (8) (97) - (8)

Purchase of U.S. Treasury obligations (9,416) (30,143) (13,085) 3,669 

Net Cash Provided by (Used by) Investing Activities $ (3,148) $ (8,682) $ (11,730) $ 8,582 

Net Increase (Decrease) in Cash and Cash Equivalents (3,857) (28,416) (13,352) 9,495 

Cash and Cash Equivalents - Beginning 32,107 60,523 60,523 (28,416)

 Unrestricted Cash and Cash Equivalents - Ending 23,496 27,077 41,094 (17,598)

 Restricted Cash and Cash Equivalents - Ending 4,754 5,030 6,077 (1,323)

Cash and Cash Equivalents - Ending $ 28,250 $ 32,107 $ 47,171 $ (18,921)

Selected Financial Data

Unaudited Audited Quarterly Unaudited Year-Over-Year

Mar-11 Dec-10 Change Mar-10 Change

Cash and cash equivalents $ 3,548 3,548 $ - $ 3,476 $ 72 $ 

Accumulated deficit (124,224) (124,224) - (124,328) 104 

Total resolution equity 3,568 3,568 - 3,520 48 

Total revenue 13 2 6 (4) 

Operating expenses 2 4 1 1 

Goodwill litigation expenses - (53) - - 

Recovery of tax benefits - (63) (15) 15 

Net Income (Loss) $ 124 - $ 20 $ (20) $ 

Deposit Insurance Fund

FSLIC Resolution Fund

 Receivership Selected Statistics March 2011 vs. March 2010

Mar-11 Mar-10 Change Mar-11 Mar-10 Change Mar-11 Mar-10 Change

Total Receiverships 362 220 142 8 8 - 370 228 142 

Assets in Liquidation 26,476 $ 36,843 $ (10,367) $ 25 $ 29 $ (4) $ 26,501 $ 36,872 $ (10,371) $ 

YTD Collections 2,276 $ 7,285 $ (5,009) $ 1 $ 8 $ (7) $ 2,277 $ 7,293 $ (5,016) $ 

YTD Dividend/Other Pymts - Cash $ 3,494 3,279 $ (215) $ - $ - $ - $ 3,279 $ 3,494 $ (215) $ 

DIF FRF ALL FUNDS

4,380

4,960

3,279

723

3,494

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

1Q10 2Q10 3Q10 4Q10 1Q11

$ in Millions

Since the first quarter of 2010, receiverships have paid $16.8 billion in cash dividends and other payments to the DIF.
9

3/31/11 12/31/10 Change

Par Value $38,291 $39,430 ($1,139)

Amortized Cost $38,428 $39,483 ($1,055)

 Total Market Value (including accrued interest) $38,518 $39,550 ($1,032)

Primary Reserve 1 $38,518 $39,550 ($1,032)

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

Year-to-Date Total Return (Portfolio) 0.102% 0.196% not applicable

Year-to-Date Total Return (Benchmark) 2 (0.008%) 5.219% not applicable

Total Return Variance (in basis points) 11.0 (502.3) not applicable

Yield-to-Maturity 3 0.28% 0.40% (0.12%)

Weighted Average Maturity (in years) 0.44 0.16 0.28

Effective Duration (in years) 4 

 Total Portfolio 0.43 0.15 0.28

 Available-for-Sale Securities 1.11 0.46 0.65

 Held-to-Maturity Securities 5 not applicable not applicable not applicable

3/31/11 12/31/10 Change

Debt Guarantee Program

 Par Value $6,954 $6,630 $324

 Book Value $6,984 $6,646 $338

 Total Market Value (including accrued interest) $6,996 $6,647 $349

 Yield-to-Maturity 0.20% 0.10% 0.10%

 Weighted Average Maturity 0.38 0.14 0.24

FRF-FSLIC

 Book Value 6 $3,398 $3,397 $1

 Yield-to-Maturity 0.03% 0.05% (0.02%)

 Weighted Average Maturity overnight overnight no change

3/31/11 12/31/10 Change

Book Value 7 $15,496 $17,506 ($2,010)

Effective Annual Yield 0.12% 0.13% (0.01%)

Weighted Average Maturity (in days) 23 6 17

3

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

average 1.8 percent annual increase in the CPI over the remaining life of each TIPS.

4

 For each TIPS, an estimated 80 percent "yield beta" factor is applied to its real yield duration to arrive at an estimated effective 

duration.

Deposit Insurance Fund Portfolio Summary

(Dollar Values in Millions)

1

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

held-to-maturity securities maturing within three months.

2

 The benchmark is the total return of the Merrill Lynch 1-10 Year U.S. Treasury Index.

National Liquidation Fund (NLF) Investment Portfolio Summary

(Dollar Values in Millions)

5

 In early August 2008, management reclassified all of the DIF portfolio's HTM securities as AFS securities effective as of June 30, 

2008, because the FDIC could no longer assert it had the positive intent and ability to hold its HTM securities until their maturity 

dates.

7

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

Summary of Other Corporate Investment Portfolios

(Dollar Values in Millions)

6

 Due to the current short-term nature of these portfolios, each of their respective Par, Book, and Market Values are identical for 

reporting purposes.
10

DEPOSIT INSURANCE FUND

Purchase up to $20 billion (par value) of available-for-sale (AFS) securities with maturity dates 

between April 1, 2011, and December 31, 2013, subject to the following additional restrictions: no 

more than $15 billion (par value) of such securities shall have maturity dates beyond September 30, 

2011; and no more than $10 billion (par value) of such securities shall have maturity dates beyond 

March 31, 2012.

Purchase up to $20 billion (par value) of available-for-sale (AFS) securities with maturity dates 

between September 30, 2011, and March 31, 2014, subject to the following additional restrictions: no 

more than $15 billion (par value) of such securities shall have maturity dates beyond March 31, 2012; 

and no more than $10 billion (par value) of such securities shall have maturity dates beyond March 

31, 2013.

DEBT GUARANTEE PROGRAM

Purchase up to $3 billion (par value) of AFS securities with maturity dates between April 1, 2011, and 

December 31, 2013. 

Purchase up to $3 billion (par value) of AFS securities with maturity dates between September 30, 

2011, and March 31, 2014. 

NATIONAL LIQUIDATION FUND

Maintain an overnight deposit target floor balance within a range of $100 million to $300 million.

Strategically invest the remaining funds in the zero- to 12-month maturity sector.

Maintain an overnight deposit target floor balance within a range of $100 million to $300 million.

Strategically invest the remaining funds in the zero- to 12-month maturity sector.

Strategy Changes for 2nd Quarter 2011

Investment Strategies

1st Quarter 2011 Strategy

1st Quarter 2011 Strategy

Strategy Changes for 2nd Quarter 2011

1st Quarter 2011 Strategy

Strategy Changes for 2nd Quarter 2011
11

1) Budgets for investment projects are approved on a multi-year basis; the year-to-date budget amount reflects the 2011 spending estimates 

for approved projects. 

YTD YTD % of 

Major Expense Category Budget Expenditures Budget Used Variance

Corporate Operating Budget 

Ongoing Operations

Salaries & Compensation $248,433 $234,899 95% ($13,534)

Outside Services - Personnel 52,583 48,354 92% (4,229)

Travel 22,593 22,148 98% (445)

Buildings 17,756 16,896 95% (860)

Equipment 17,032 12,875 76% (4,157)

Outside Services - Other 4,886 3,182 65% (1,704)

Other Expenses 3,852 3,065 80% (787)

Total Ongoing Operations $367,135 $341,419 93% ($25,716)

Receivership Funding

Salaries & Compensation $77,892 $73,687 95% ($4,205)

Outside Services - Personnel 332,138 229,020 69% (103,118)

Travel 12,156 9,236 76% (2,920)

Buildings 61,720 26,806 43% (34,914)

Equipment 1,890 1,184 63% (706)

Outside Services - Other 6,396 3,163 49% (3,233)

Other Expenses 45,815 21,538 47% (24,277)

Total Receivership Funding $538,007 $364,634 68% ($173,373)

Total Corporate Operating Budget $905,142 $706,053 78% ($199,089)

Investment Budget 1 $1,601 $1,520 95% ($81)

Grand Total $906,743 $707,573 78% ($199,170)

(Dollars in Thousands)

Executive Summary of 2011 Budget and Expenditures

by Major Expense Category

Through March 31, 2011
12

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

Risk Management, and International Affairs.

2) Executive Offices include the offices of the Chairman, Vice Chairman, Independent Director, Deputy to the Chairman and Chief

Operating Officer, Deputy to the Chairman and Chief Financial Officer, and Deputy to the Chairman for External Affairs.

3) Budgets for investment projects are approved on a multi-year basis; the year-to-date budget amount reflects the 2011 spending estimates 

for approved projects. 

YTD YTD % of 

Division/Office Budget Expenditures Budget Used Variance

 Corporate Operating Budget 

 Risk Management Supervision $122,661 $117,303 96% ($5,358)

 Depositor & Consumer Protection 34,201 32,870 96% (1,331)

 Information Technology 52,535 44,223 84% (8,312)

 Administration 64,979 61,462 95% (3,517)

 Resolutions & Receiverships 491,189 323,758 66% (167,431)

 Legal 74,308 69,461 93% (4,847)

 Insurance & Research 9,530 8,139 85% (1,391)

 Finance 9,480 7,631 80% (1,849)

 Inspector General 11,138 7,257 65% (3,881)

 Corporate University - CEP 4,462 4,755 107% 293

 Corporate University - Corporate 3,988 4,332 109% 344

 Executive Support 1 7,701 6,571 85% (1,130)

 Executive Offices 2 1,723 1,553 90% (170)

 Complex Financial Institutions 6,734 1,962 29% (4,772)

 CIO Council 10,513 14,776 141% 4,263

 Total, Corporate Operating Budget $905,142 $706,053 78% ($199,089)

 Investment Budget 3

 Information Technology $1,601 $1,520 95% ($81)

 Total, Investment Budget 3 $1,601 $1,520 95% ($81)

 Combined Division/Office Budgets

 Risk Management Supervision $122,661 $117,303 96% ($5,358)

 Depositor & Consumer Protection 34,201 32,870 96% (1,331)

 Information Technology 54,136 45,743 84% (8,393)

 Administration 64,979 61,462 95% (3,517)

 Resolutions & Receiverships 491,189 323,758 66% (167,431)

 Legal 74,308 69,461 93% (4,847)

 Insurance & Research 9,530 8,139 85% (1,391)

 Finance 9,480 7,631 80% (1,849)

 Inspector General 11,138 7,257 65% (3,881)

 Corporate University - CEP 4,462 4,755 107% 293

 Corporate University - Corporate 3,988 4,332 109% 344

 Executive Support 1 7,701 6,571 85% (1,130)

 Executive Offices 2 1,723 1,553 90% (170)

 Complex Financial Institutions 6,734 1,962 29% (4,772)

 CIO Council 10,513 14,776 141% 4,263

 Grand Total $906,743 $707,573 78% ($199,170)

Executive Summary of 2011 Budget and Expenditures

by Budget Component and Division/Office

Through March 31, 2011

(Dollars in Thousands)