2011

A N N U A L R E P O R T

9

MESSAGE FROM THE chief f

Message from the chief 

I am pleased to 

present the Federal 

Deposit Insurance 

Corporation’s (FDIC) 2011 

Annual Report (also referred 

to as the Performance and 

Accountability Report). The 

report covers financial 

and program performance 

information, and 

summarizes our successes 

for the year. The FDIC takes pride in providing timely, 

reliable, and meaningful information to its 

many stakeholders. 

For the twentieth consecutive year, the U.S. Government 

Accountability Office (GAO) issued unqualified audit 

opinions for the two funds administered by the FDIC: the 

Deposit Insurance Fund (DIF) and the Federal Savings 

and Loan Insurance Corporation (FSLIC) Resolution 

Fund (FRF). These unqualified audit opinions validate our 

efforts to ensure that the financial statements of the funds 

for which we are stewards are fairly presented. I applaud 

the hard work and dedication of the FDIC staff.

The year 2011 marked a turning point for the DIF, as the 

balance increased from negative $7.4 billion at the end 

of 2010, to positive $11.8 billion at the end of 2011. The 

turnaround in the DIF was due to the decrease in the 

number of bank failures, from 157 in 2010 to 92 in 2011. 

While the decrease in bank failures is a positive trend, 92 

bank failures is still more than the total number of bank 

failures that occurred between 1995 and 2008.

Financial Resu

For 2011, the DIF’s comprehensive income totaled $19.2 

billion compared to comprehensive income of $13.5 

billion during 2010. This $5.7 billion year-over-year 

increase was primarily due to a $3.6 billion decrease in the 

provision for insurance losses and $2.6 billion in revenue 

from DGP fees previously held as systemic risk deferred 

revenue, partially offset by a year-to-date net change in the 

fair value of available-for-sale securities of $284 million 

(U.S. Treasury obligations and trust preferred securities) 

and a $112 million decrease in assessments earned.

The provision for insurance losses was negative $4.4 

billion for 2011, compared to negative $848 million for 

2010. The negative provision for 2011 primarily resulted 

from a reduction in the contingent loss reserve due to the 

improvement in the financial condition of institutions 

that were previously identified to fail, and a reduction in 

the estimated losses for institutions that have failed in 

prior years.

The DIF’s total liquidity declined by $3.8 billion, or 8 

percent, to $42.4 billion during 2011. The decrease was 

primarily the result of disbursing $11.9 billion to fund 

both current and prior years’ bank failures during 2011.

However, it should be noted that 58 of the 92 current 

year failures were resolved as cash-conserving sharedloss transactions requiring substantially lower initial 

resolution payments thus helping to mitigate the decline 

in DIF’s liquidity balance. Moreover, during 2011, the 

DIF received $8.9 billion in dividends and other payments 

from its receiverships, which helped to mitigate the DIF 

liquidity’s decline.

Under the requirements of the Federal Managers’ 

Financial Integrity Act of 1982, the FDIC’s management 

conducted its annual assessment and concluded that the 

system of internal controls, taken as a whole, complies 

with internal control standards prescribed by GAO and 

provides reasonable assurance that the related objectives 

are being met. 

In 2012, our focus will be on maintaining strong 

corporate management controls, effective cost and risk 

management, and continued implementation of DoddFrank. The FDIC will continue its important role of 

identifying and addressing risks to the insurance fund, 

and providing Congress, other regulatory agencies, 

insured depository institutions, and the public with 

critical and timely information and analyses on the 

financial condition of both the banking industry and 

FDIC-managed funds.

Sincerely,

Steven O. App