Federal Deposit Insurance Corporation 

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

 

 February 18, 2013 

MEMORANDUM TO: The Board of Directors 

FROM: Steven O. App 

Deputy to the Chairman and 

Chief Financial Officer 

Craig R. Jarvill 

Director, Division of Finance 

SUBJECT: Fourth Quarter 2012 CFO Report to the Board 

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

December 31, 2012. 

Executive Summary 

 During the fourth quarter of 2012, the Deposit Insurance Fund (DIF) balance increased by $7.8 

billion, from $25.2 billion to $33.0 billion (audited). This quarterly increase was primarily due to 

a decrease in the provision for insurance losses of $3.3 billion, assessment revenue of $2.9 

billion, and $1.8 billion in revenue from excess Debt Guarantee Program (DGP) fees 

previously held as systemic risk deferred revenue, partially offset by $469 million in operating 

expenses. The DIF balance has increased by $29.0 billion since the fund became positive on 

June 30, 2011 after seven consecutive quarters of negative balances. 

 During the fourth quarter of 2012, the FDIC was named receiver for 8 failed institutions. The 

combined assets at inception for these institutions totaled approximately $2.1 billion with a 

total estimated loss of $354 million. The corporate cash outlay during the fourth quarter for 

these failures was approximately $568 million. 

 Overall Corporate Operating Budget expenditures through December 31, 2012, were 24 

percent ($796 million) below budget, largely due to substantial under spending in the 

Receivership Funding budget component. Spending in that component was $648 million, or 

43 percent, under budget, primarily due to lower-than-budgeted spending for contractual 

services and operations at the site of failed financial institutions. Spending in the Ongoing 

Operations component was $148 million, or 8 percent, under budget. 

 
2

I. Corporate Fund Financial Results (See pages 10 - 11 for detailed data and charts.) 

Deposit Insurance Fund 

 For 2012, the DIF’s comprehensive income totaled $21.1 billion compared to comprehensive 

income of $19.2 billion during 2011. This $1.9 billion year-over-year increase was primarily 

due to a $3.3 billion increase in revenue from excess DGP fees previously held as systemic 

risk deferred revenue, partially offset by a $1.1 billion decrease in assessments and a $191 

million increase in the provision for insurance losses. 

 

 In October 2008, in an effort to counter the system-wide crisis in the nation’s financial sector, 

the FDIC established the Temporary Liquidity Guarantee Program (TLGP). The TLGP 

consisted of two components: the Transaction Account Guarantee Program (TAG) and the 

DGP. The TLGP TAG program expired on 12/31/2010; however, the provisions from the 

Dodd-Frank Act extended coverage for non-interest bearing transaction accounts through 

year-end 2012. The DGP, which at its peak guaranteed $345.8 billion in outstanding debt, 

expired on December 31, 2012. In 2012, the DIF recognized revenue of $5.9 billion, 

representing the remaining deferred revenue not absorbed by the TLGP for program losses. 

In total, the DIF increased by $9.3 billion as a result of funds received from the TLGP from 

guarantee fees and surcharges, net of losses. 

 The provision for insurance losses was negative $4.2 billion for 2012, compared to negative 

$4.4 billion for 2011. The negative provision for 2012 primarily resulted from a reduction of 

$1.4 billion in the contingent loss reserve due to the improvement in the financial condition of 

institutions that were previously identified to fail and a decrease of $2.8 billion in the estimated 

losses for institutions that have failed in the current and prior years. 

Assessments

 During the fourth quarter of 2012, the DIF recognized a total of $2.9 billion in assessment 

revenue. The estimate for fourth quarter 2012 insurance coverage totaled $3.0 billion—$2.0 

billion was recognized for those institutions that prepaid assessments and $1.0 billion was 

recorded as a receivable from those institutions that did not have prepaid assessments 

available for offset. Additionally, the DIF recognized a net adjustment of $59 million that 

reduced assessment revenue. This adjustment consisted of $1 million in prior period 

amendments and a $60 million decrease to the estimate for third quarter 2012 insurance 

coverage recorded at September 30, 2012. The latter adjustment was due to lower average 

assessment rates.

 On December 28, 2012, the FDIC collected $623 million in DIF assessments for third quarter 

2012 insurance coverage. Unearned revenue (prepaid assessments) totaled $1.6 billion on 

December 31, 2012; this amount excludes the projected June 2013 refund to institutions of 

$5.7 billion. By regulation, any remaining prepaid assessments must be refunded to the 

institutions after collection of the amount due on June 30, 2013. The final prepaid offset will 

occur in June 2013 for the assessment period ending March 31, 2013. Therefore, at 

December 31, 2012, the “Unearned revenue – prepaid assessments” line item on the Balance 

Sheet represents the final estimated prepaid offset and the “Refunds of prepaid assessments” 

line item reflects the estimate that will be returned to the institutions in June 2013. Though the 

combined total for both the prepaid offset and refunds will remain unchanged, the estimated 

amount for each component may vary considerably because of the uncertainty inherent in 

projecting the assessment rate and base for insured depository institutions beyond the 

customary 90-day period. 
3

 

 

II. Investment Results (See pages 12 - 13 for detailed data and charts.)

Total DIF Portfolio Liquidity 

 The total liquidity available to the DIF stood at $38.2 billion on December 31, 2012, down $4.2 

billion from $42.4 billion on December 31, 2011. (Until all remaining funds from the DGP 

investment portfolio were transferred to the DIF investment portfolio at year-end 2012, the total 

liquidity available to the DIF was the sum of the DIF investment portfolio and the DGP 

investment portfolio.) 

DIF Investment Portfolio 

 December 31, 2012, the DIF investment portfolio stood at $38.2 billion (total market value), 

higher than its December 31, 2011, balance of $37.6 billion. Over the course of the year, 

receivership dividends, net transfers from the DGP investment portfolio, assessments, and 

other inflows were slightly greater than outflows for funding initial resolution payments, 

operating expenses, and other payments related to receivership activities. 

 On December 31, 2012, the DIF investment portfolio’s yield was 0.36 percent, down five basis 

points from its December 31, 2011, yield of 0.41 percent. During 2012, newly purchased 

Treasury securities generally had lower yields than maturing securities, hence the decline in 

portfolio yield. 

*Dec‐12 amount excludes the projected June 2013 refund to institutions of $5.7 billion.
4

 

 In accordance with the approved fourth quarter 2012 DIF portfolio investment strategy, staff 

purchased a total of 11 short-maturity conventional Treasury securities on four occasions. The 

11 securities had a total par value of $10.0 billion, a weighted average yield of 0.23 percent, 

and a weighted average maturity (WAM) of 0.92 years. 

DGP Investment Portfolio 

 On December 31, 2012, all remaining funds in the DGP investment portfolio were transferred 

to the DIF investment portfolio, coincident with the expiration of the DGP. Accordingly, the 

DGP investment portfolio balance dropped from $4.8 billion on December 31, 2011, to $0 at 

year-end 2012. Throughout 2012 DGP funds were transferred into the DIF investment 

portfolio. The final transfer of $1.2 billion occurred on December 31, 2012. 

 

 In accordance with the approved fourth quarter 2012 DGP portfolio investment strategy, staff 

purchased two Treasury bills on separate occasions with a total par value of $650 million, a 

weighted average yield of 0.10 percent, and a WAM of 0.07 year. 

III. Budget Results (See pages 14 - 15 for detailed data.) 

Approved Budget Modifications 

The 2012 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other 

officials the authority to reallocate funds within the 2012 Corporate Operating Budget, provided 

that such reallocations did not increase the total amount approved for either the Ongoing 

Operations or Receivership Funding budget components. The following budget reallocations 

were approved during the fourth quarter in accordance with the authority delegated by the 

Board of Directors. None of these modifications changed the 2012 Ongoing Operations or 

Receivership Funding budgets or the total 2012 Corporate Operating Budget approved by the 

Board. 

 In December 2012, the CFO approved a reallocation of $836,500 in budget authority within 

the Ongoing Operations budget component from the Corporate Unassigned contingency 

reserve to the Executive Offices budget. This reallocation increased the Outside Services 

Year-end
5

– Personnel budget to provide funding for higher-than-projected expenses of the annual 

financial audit conducted by the Government Accountability Office and added $11,500 to 

the Travel budget to provide sufficient funding for the remainder of the year. In addition, 

the CFO approved the reallocation of $70,000 in budget authority within the Ongoing 

Operations component from the Corporate Unassigned contingency reserve to the Salary 

and Compensation budgets of the Office of Communications (+$50,000) and the Office of 

International Affairs (+$20,000) for salary and fringe benefit costs that were greater than 

previously projected. In addition, the Director of the Office of Minority and Women 

Inclusion (OMWI) approved the realignment of funds within the OMWI budget between 

expense categories for an account coding correction. 

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

Unassigned contingency reserves for the Ongoing Operations and the Receivership Funding 

budget components were $19,416,710, and $115,612,907, respectively. 

Spending Variances 

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

below. Significant spending variances for the year ending December 31, 2012, are defined as 

those that either (a) exceed the annual budget for a major expense category or total 

division/office budget by any amount, or (b) are under the annual budget for a major expense 

category or division/office by an amount that exceeds $1 million and represents more than 

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

Significant Spending Variances by Major Expense Category 

Ongoing Operations 

There were significant spending variances in all major expense categories in the Ongoing 

Operations component of the 2012 Corporate Operating Budget. 

 Salaries and Compensation expenditures were approximately $50 million, or 4 percent, 

less than budgeted. The Division of Risk Management Supervision (RMS) ($20 million), 

the Legal Division ($5 million), the Office of Complex Financial Institutions (CFI) ($4 

million), the Division of Resolutions and Receivership (DRR) ($3 million), the Division of 

Insurance and Research (DIR) ($3 million), the Office of Inspector General (OIG) ($3 

million), and the Division of Consumer Protection (DCP) ($3 million) all spent less than 

budgeted in this expense category, primarily due to vacancies in budgeted positions. Most 

of the variances caused by vacancies were related to authorized non-permanent positions. 

 Outside Services – Personnel expenditures were approximately $55 million, or 18 percent, 

less than budgeted. Approximately $15 million of this variance was attributable to unused 

budget authority in the Corporate Unassigned contingency reserve. The CIO Council 

spent $9 million less than budgeted, largely due to a shift of certain CIO Council projects to 

the Corporation’s Investment Budget because their projected cost exceeded the 

Investment Budget threshold and delays in beginning a number of other planned projects. 

CFI spent $6 million less than budgeted as it continued to refine its contracting 

requirements. The Division of Administration (DOA) spent $5 million less than budgeted, 

primarily due to lower-than-anticipated use of contractors for procurement activities, 

background investigations, human resources support, guards, and mail room services in 

the regional offices. The Division of Information Technology (DIT) spent $4 million less 

than budgeted, primarily due to lower-than-projected spending on internal initiatives 

including Windows 7 and platform upgrade projects. The Legal Division spent almost none 
6

of the nearly $3 million budgeted to reimburse the Department of Justice for the ongoing 

goodwill litigation. 

 Travel expenditures were approximately $17 million, or 16 percent, less than budgeted. 

RMS spent $8 million less than budgeted, primarily due to the large number of vacant nonpermanent examination positions for which budgeted travel funds were not used. The 

Corporate Employee Program in Corporate University (CU-CEP) spent $3 million less than 

budgeted due to lower average travel costs for CEP participant travel and the cancellation 

of one scheduled CEP class originally planned for 30 participants.

 Building expenditures were approximately $5 million, or 6 percent, less than budgeted, 

largely due to scheduling delays in the upgrade of the electric system for the National Data 

Center at Virginia Square; reduced utilities consumption; fewer-than-anticipated office 

moves; a change in the design/build strategy for the 550 HVAC project that delayed a 

significant portion of the design costs until the general contractor is brought on board in 

2013; lower-than-projected expenses for the Memphis Area Office build-out; cancellation of 

the redesign of one floor at the San Francisco Regional Office (SFRO); delays in awarding 

the SFRO boiler replacement contract; and a reduction in the Atlanta Regional Office’s 

monthly lease payments. 

 

 Equipment expenditures were approximately $8 million, or 9 percent, less than budgeted. 

DIT spent $5 million less than budgeted primarily due to contract protests that impacted 

purchasing cycles. In addition, the DOA spent $3 million less than budgeted for furniture, 

fixture and equipment (FF&E) purchases from tenant improvement allowances and for 

copiers due to the conversion of a number of copiers to “maintenance only” contract terms. 

 Outside Services – Other expenditures were approximately $4 million, or 21 percent, less 

than budgeted. DOA spent $3 million less than budgeted because of lower-than-expected 

mail-related services; a reduction in catering expenses at meetings and conferences; and 

reduced printing of deposit insurance materials pending clarification of the need for 

possible changes in the content of those materials.

 Other Expenses were approximately $8 million, or 40 percent, less than budgeted. 

Approximately $3 million of this variance was attributable to unused budget authority in the 

Corporate Unassigned contingency reserve. In addition, the variance reflected substantial 

underutilization by employees of the funds budgeted for Professional Learning Accounts 

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

Receivership Funding 

The Receivership Funding component of the 2012 Corporate Operating Budget includes 

funding for expenses that are incurred in conjunction with institution failures and the 

management and disposition of the assets and liabilities of the ensuing receiverships, except 

for salary and benefits and related expenses for permanent employees assigned to the 

receivership management function. 

There were significant spending variances in all the major expense categories through the 

fourth quarter in the Receivership Funding component of the 2012 Corporate Operating 

Budget: 

 Salaries and Compensation ($51 million, or 20 percent, less than budgeted). 

 Outside Services-Personnel ($494 million, or 48 percent, less than budgeted). 
7

 Travel ($15 million, or 44 percent, less than budgeted). 

 Buildings ($49 million, or 53 percent, less than budgeted). 

 Equipment ($1 million, or 9 percent, less than budgeted). 

 Outside Services-Other ($4 million, or 35 percent, less than budgeted). 

 Other Expenses ($34 million, or 52 percent, less than budgeted). 

The variance in the Salaries and Compensation category was attributable to vacancies in 

budgeted non-permanent positions, primarily in the temporary satellite offices. The variance in 

the Outside Services-Personnel expense category was due to less costly resolutions and 

lower-than-anticipated asset management and marketing costs and contract support costs for 

failed bank resolutions. The variance in the Travel category was due to lower-than-budgeted 

failed bank activity. The variance in the Buildings expense category occurred as a result of 

shorter-than-expected operations at the site of failed banks. The variance in the Equipment 

category was due to lower-than-anticipated costs for online information services, software 

purchases, and maintenance costs. The variance in the Outside Service – Other category 

was due to lower-than-anticipated costs for advertising, insurance, mail, and bank service 

fees. The variance in the Other Expenses category was attributable to the disposition of failed 

bank assets and the transfer of banking operations to the Dallas office faster than expected at 

many failed bank sites. 

Significant Spending Variances by Division/Office1

Fourteen organizations had significant spending variances through the end of the fourth 

quarter 2012: 

 DRR spent $497 million, or 40 percent, less than budgeted. Approximately $490 million of 

this under spending was in the Receivership Funding Budget component due to lowerthan-anticipated resolutions and receivership workload, as explained above. 

 The Legal Division spent $32 million, or 11 percent, less than budgeted. This variance 

was due to under spending of approximately $16 million in the Salaries and Compensation 

expense category ($5 million in the Ongoing Operations budget component and $11 million 

in the Receivership Funding budget component), mostly due to vacancies in budgeted 

non-permanent positions and slower-than-projected hiring to fill those vacancies, and $15 

million for outside legal services in the Outside Services – Personnel expense category in 

the Receivership Funding budget component. 

 RMS spent $31 million, or 6 percent, less than budgeted. This variance was largely 

attributable to vacancies in budgeted non-permanent examination positions and lowerthan-budgeted examination travel expenses resulting from those vacancies. 

 DOA spent $24 million, or 9 percent, less than budgeted. This variance was largely 

attributable to lower-than-budgeted spending for contractor support ($5 million), facilitiesrelated expenses ($5 million), equipment expenses ($3 million), and other expenses ($3 

million) from its Ongoing Operations budget, as explained above, and lower-than-projected 

 

1

 Information on division/office variances reflects variances in both the Corporate Operating and Investment 

Budgets. 
8

expenses ($5 million) to support bank closings and related activities from its Receivership 

Funding budget. 

 DIT spent $15 million, or 5 percent, less than budgeted. This variance was largely 

attributable to lower-than-projected expenses to support failed bank closings and delays in 

planned software procurements. 

 The CIO Council spent $12 million, or 14 percent, less than budgeted. This variance was 

largely due to delays in beginning a number of planned projects and a shift in funding 

certain projects to the Corporation’s Investment Budget, as explained above. In addition, a 

planned $3 million document management software purchase to support the IMAC project 

was delayed until 2013. 

 

 CFI spent $11 million, or 17 percent, less than budgeted. This variance was attributable to 

lower-than-budgeted spending for contractor services. 

 DCP spent $7 million, or 4 percent, less than budgeted. This variance was primarily 

attributable to a $3 million variance in Salaries and Compensation resulting from vacancies 

in budgeted non-permanent examination positions; a $1 million variance in examination 

travel expenses resulting from those vacancies; and a $2 million variance in contracting 

expenses due to delays in starting community affairs outreach projects and the biennial 

banker and unbanked/underbanked surveys. 

 The OIG spent $6 million, or 17 percent, less than budgeted, because of vacancies in 

budgeted positions and lower-than-projected travel expenses. 

 DIR spent $6 million, or 13 percent, less than budgeted, primarily attributable to vacancies 

in budgeted positions and slower-than-projected hiring to fill those vacancies ($3 million); 

and reduced spending for contractual services ($2 million) due to a revised strategy that 

will rely less on contractors for the failed bank Insight project. 

 The Executive Support Offices spent approximately $5 million, or 17 percent, less than 

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

contract services and slower-than-projected hiring by the Office of Minority and Women 

Inclusion and the Office of Corporate Risk Management.

 The Division of Finance (DOF) spent $5 million, or 12 percent, less than budgeted. This 

variance was attributable to vacancies in budgeted positions and slower-than-expected 

hiring to fill those vacancies. 

 Corporate University spent $7 million, or 16 percent, less than budgeted, including under 

spending of $5 million in its CU-CEP budget and $2 million in its regular organizational CUCorporate budget. The CU-CEP variance was primarily due to lower-than-budgeted travel 

expenses for CEP participants and the cancellation of one scheduled CEP class that 

reduced spending for both Salaries and Compensation (including overtime) and Travel. 

The CU-Corporate variance was primarily due to lower-than-projected expenditures for 

certain budgeted projects in the Schools of Supervision, Insurance, Corporate Operations, 

and the Dallas Learning Center. 

 The Legal Division spent almost none of the $3 million budgeted in the Government 

Litigation budget because an existing prior-year credit balance with DOJ was sufficient to 

cover projected FY 2013 expenses for defensive goodwill litigation. 
9

 The Executive Offices spent $2 million, or 13 percent, less than budgeted. This variance 

was primarily attributable to lower-than-projected hiring to fill vacant authorized positions. 

 The Corporate Unassigned contingency reserve had $135 million in unused budget 

authority remaining at the end of the year. That unused budget authority lapsed on 

December 31, 2012. 
FDIC CFO REPORT TO THE BOARD – Fourth Quarter 2012 

Fund Financial Results ($ in Millions) 

10

Balance Sheet

Audited Quarterly Audited Year-Over-Year

Dec-12 Sep-12 Change Dec-11 Change

Cash and cash equivalents 3,100 $ 1,587 $ 1,513 $ 3,278 $ (178) $ 

Cash and investments - restricted - systemic risk - 1,115 (1,115) 4,828 (4,828) 

Investment in U.S. Treasury obligations, net 34,869 35,460 (591) 33,863 1,006 

Trust preferred securities 2,264 2,255 9 2,213 51 

Assessments receivable, net 1,007 660 347 282 725 

Receivables and other assets - systemic risk - 1,568 (1,568) 1,948 (1,948) 

Interest receivable on investments and other assets, net 433 462 (29) 488 (55) 

Receivables from resolutions, net 23,120 18,948 4,172 28,549 (5,429) 

Property and equipment, net 393 379 14 402 (9) 

Total Assets $ 62,434 65,186 $ 2,752 $ 75,851 $ (10,665) $ 

Accounts payable and other liabilities 350 346 4 374 (24) 

Unearned revenue - prepaid assessments 1,576 9,219 (7,643) 17,400 (15,824) 

Refunds of prepaid assessments 5,675 - 5,675 - 5,675 

Liabilities due to resolutions 21,174 21,215 (41) 32,791 (11,617) 

Debt Guarantee Program liabilities - systemic risk - - - 117 (117) 

Deferred revenue - systemic risk - 2,682 (2,682) 6,640 (6,640) 

Postretirement benefit liability 224 188 36 188 36 

Contingent liability for anticipated failures 3,221 3,556 (335) 6,511 (3,290) 

Contingent liability for systemic risk - - - 2 (2) 

Contingent liability for litigation losses 8 4 4 1 7 

Total Liabilities $ 37,210 32,228 $ (4,982) $ 64,024 $ (31,796) $ 

FYI: Unrealized gain (loss) on U.S. Treasury investments, net 34 65 (31) 48 (14) 

FYI: Unrealized gain (loss) on trust preferred securities 302 293 9 251 51 

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

Fund Balance $ 25,224 32,958 $ 7,734 $ 11,827 $ 21,131 $ 

Deposit Insurance Fund
$1.0B

17%

11 institutions

$2.1B

38%

61 institutions

$2.6B

45%

5,818 institutions

Institutions over $100B Institutions between $10‐$100B Institutions under $10B

June 2013 Prepaid Assessment Refund to Institutions

Projected as of 12/31/2012

(Distributed by Assessment Base Size)

11

Fund Financial Results - continued ($ in Millions) 

Total Projected Refund = $5.7B

Income Statement (year-to-date)

Audited Quarterly Audited Year-Over-Year

Dec-12 Sep-12 Change Dec-11 Change

Assessments earned 12,397 $ 9,460 $ 2,937 $ 13,498 $ (1,101) $ 

Systemic risk revenue (161) (4) (157) (131) (30) 

Interest on U.S. Treasury obligations 159 93 66 128 31 

Other revenue 6,127 4,218 1,909 2,847 3,280 

Total Revenue $ 13,767 18,522 $ 4,755 $ 16,342 $ 2,180 $ 

Operating expenses 1,778 1,309 469 1,625 153 

Systemic risk expenses (161) (4) (157) (131) (30) 

Provision for insurance losses (4,223) (879) (3,344) (4,414) 191 

Insurance and other expenses 7 3 4 4 3 

Total Expenses and Losses $ 429 (2,599) $ (3,028) $ (2,916) $ 317 $ 

Net Income (Loss) 13,338 21,121 7,783 19,258 1,863 

Unrealized gain (loss) on U.S. Treasury investments, net (14) 17 (31) 21 (35) 

Unrealized gain (loss) on trust preferred securities 51 42 9 (85) 136 

Unrealized postretirement benefit gain (loss) (27) - (27) (15) (12) 

Comprehensive Income (Loss) $ 13,397 21,131 $ 7,734 $ 19,179 $ 1,952 $ 

Deposit Insurance Fund

Selected Financial Data

Audited Quarterly Audited Year-Over-Year

Dec-12 Sep-12 Change Dec-11 Change

Cash and cash equivalents 3,594 $ 3,594 $ - $ 3,533 $ 61 $ 

Accumulated deficit (124,460) (124,460) - (124,281) (179) 

Total resolution equity 3,597 3,596 1 3,595 2 

Total revenue 5 4 1 5 - 

Operating expenses 4 4 - 5 (1) 

Goodwill litigation expenses 181 181 - 83 98 

Recovery of tax benefits - - - (18) 18 

Net Income (Loss) (179) $ (180) $ 1 $ (56) $ (123) $ 

FSLIC Resolution Fund

Receivership Selected Statistics December 2012 vs. December 2011

$ in millions

Dec-12 Dec-11 Change Dec-12 Dec-11 Change Dec-12 Dec-11 Change

Total Receiverships 463 426 37 3 5 (2) 466 431 35 

Assets in Liquidation 16,989 $ 20,891 $ (3,902) $ 7 $ 22 $ (15) $ 16,996 $ 20,913 $ (3,917) $ 

YTD Collections 8,381 $ 12,352 $ (3,971) $ 18 $ 10 $ 8 $ 8,399 $ 12,362 $ (3,963) $ 

YTD Dividend/Other Pymts - Cash 4,978 $ 8,876 $ (3,898) $ - $ - $ - $ 4,978 $ 8,876 $ (3,898) $ 

DIF FRF ALL FUNDS
12

12/31/12 12/31/11 Change

Par Value $37,086 $36,784 $302

Amortized Cost $37,927 $37,337 $590

Total Market Value (including accrued interest) $38,249 $37,580 $669

Primary Reserve 1 $38,249 $37,580 $669

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

Yield-to-Maturity 2 0.36% 0.41% (0.05%)

Weighted Average Maturity (in years) 0.68 0.66 0.02

Effective Duration (in years) 3 

 Total Portfolio 0.64 0.62 0.02

 Available-for-Sale Securities 0.70 0.73 (0.03%)

 Held-to-Maturity Securities 4 not applicable not applicable not applicable

12/31/12 12/31/11 Change

Debt Guarantee Program

 Par Value $0 $4,764 ($4,764)

 Book Value $0 $4,807 ($4,807)

 Total Market Value (including accrued interest) $0 $4,827 ($4,827)

 Yield-to-Maturity not applicable 0.11% not applicable

 Weighted Average Maturity (in years) not applicable 0.21 not applicable

FRF-FSLIC

 Book Value 5 $3,425 $3,377 $48

 Yield-to-Maturity 0.00% 0.00% 0.00%

 Weighted Average Maturity overnight overnight no change

12/31/12 12/31/11 Change

Book Value 6 $14,702 $17,052 ($2,350)

Effective Annual Yield 0.12% 0.10% 0.02%

Weighted Average Maturity (in days) 20 9 11

2

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

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

3

 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.

National Liquidation Fund (NLF) Investment Portfolio Summary

(Dollar Values in Millions)

4

 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.

6

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

Summary of Other Corporate Investment Portfolios

(Dollar Values in Millions)

5

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

purposes.
13

Deposit Insurance Fund

Purchase up to $10 billion (par value) of available-for-sale (AFS) securities with maturity 

dates between March 31, 2013, and March 31, 2016, subject to the following additional 

restrictions: no more than $7 billion (par value) of such securities shall have maturity dates 

beyond March 31, 2014; no more than $4 billion (par value) of such securities shall have 

maturity dates beyond March 31, 2015; and no more than $4 billion (adjusted par value) of 

such securities shall consist of Treasury Inflation-Protected Securities.

Purchase up to $4 billion (par value) of available-for-sale (AFS) securities with maturity 

dates between June 30, 2013, and June 30, 2016, subject to the following additional 

restrictions: no more than $3 billion (par value) of such securities shall have maturity dates 

beyond June 30, 2014; no more than $2 billion (par value) of such securities shall have 

maturity dates beyond June 30, 2015; and no more than $2 billion (adjusted par value) of 

such securities shall consist of Treasury Inflation-Protected Securities.

Debt Guarantee Program

Invest all available funds in overnight investments and/or in short-maturity AFS Treasury 

bills with maturities not exceeding December 27, 2012.

No investment strategy for the first quarter of 2013, as the portfolio was terminated at yearend 2012.

National Liquidation Fund

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

million.

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

No strategy changes for the first quarter of 2013.

Strategy Changes for 1st Quarter 2013

Investment Strategies

Strategy for 4th Quarter 2012

Strategy for the 4th Quarter 2012

Strategy Changes for 1st Quarter 2013

Strategy for 4th Quarter 2012

Strategy Changes for 1st Quarter 2013
14

1) Budgets for investment projects are approved on a multi-year basis; the year-to-date budget amount reflects the 2012 spending estimates 

for approved projects. 

Annual YTD YTD % of YTD YTD

Major Expense Category Budget Budget Expenditures Budget Used Variance

Corporate Operating Budget 

Ongoing Operations

Salaries & Compensation $1,146,344 $1,146,344 $1,096,103 96% ($50,241)

Outside Services - Personnel 301,587 301,587 246,726 82% (54,861)

Travel 110,791 110,791 93,618 84% (17,173)

Buildings 91,594 91,594 86,157 94% (5,437)

Equipment 91,325 91,325 82,994 91% (8,331)

Outside Services - Other 19,726 19,726 15,608 79% (4,118)

Other Expenses 19,411 19,411 11,627 60% (7,784)

Total Ongoing Operations $1,780,779 $1,780,779 $1,632,833 92% ($147,946)

Receivership Funding

Salaries & Compensation $248,759 $248,759 $197,840 80% ($50,919)

Outside Services - Personnel 1,035,101 1,035,101 541,270 52% (493,831)

Travel 34,601 34,601 19,272 56% (15,329)

Buildings 93,326 93,326 43,835 47% (49,491)

Equipment 13,019 13,019 11,871 91% (1,148)

Outside Services - Other 10,640 10,640 6,928 65% (3,712)

Other Expenses 64,554 64,554 30,714 48% (33,840)

Total Receivership Funding $1,500,000 $1,500,000 $851,730 57% ($648,270)

Total Corporate Operating Budget $3,280,779 $3,280,779 $2,484,563 76% ($796,216)

Investment Budget 1 $14,356 $14,356 $13,950 97% ($406)

Grand Total $3,295,135 $3,295,135 $2,498,513 76% ($796,622)

(Dollars in Thousands)

Executive Summary of 2012 Budget and Expenditures

by Major Expense Category

Through December 31, 2012
15

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

Legislative Affairs, Corporate 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 2012 spending estimates 

for approved projects. 

Annual YTD YTD % of YTD YTD

Division/Office Budget Budget Expenditures Budget Used Variance

 Corporate Operating Budget 

 Resolutions & Receiverships $1,231,672 $1,231,672 $734,550 60% ($497,122)

 Risk Management Supervision 535,067 535,067 504,454 94% (30,613)

 Legal 304,470 304,470 272,136 89% (32,334)

 Information Technology 285,997 285,997 271,799 95% (14,198)

 Administration 272,750 272,750 248,395 91% (24,355)

 Depositor & Consumer Protection 159,841 159,841 152,768 96% (7,073)

 CIO Council 84,521 84,521 72,517 86% (12,004)

 Complex Financial Institutions 61,207 61,207 50,603 83% (10,604)

 Insurance & Research 43,604 43,604 38,100 87% (5,504)

 Finance 41,636 41,636 36,783 88% (4,853)

 Inspector General 35,743 35,743 29,690 83% (6,053)

 Executive Support 1 31,152 31,152 25,928 83% (5,224)

 Corporate University - Corporate 23,408 23,408 21,172 90% (2,236)

 Corporate University - CEP 19,468 19,468 14,736 76% (4,732)

 Executive Offices 2 12,513 12,513 10,923 87% (1,590)

 Government Litigation 2,700 2,700 9 0% (2,691)

 Corporate Unassigned 135,030 135,030 0 0% (135,030)

 Total, Corporate Operating Budget $3,280,779 $3,280,779 $2,484,563 76% ($796,216)

 Investment Budget 3

 Information Technology $13,213 $13,213 $12,865 97% ($348)

 Risk Management Supervision 531 531 584 110% 53

 Corporate University - Corporate 345 345 310 90% (35)

 Administration 250 250 164 66% (86)

 Resolutions and Receivership 10 10 20 200% 10

 Depositor & Consumer Protection 7 7 7 100% 0

 Total, Investment Budget 3 $14,356 $14,356 $13,950 97% ($406)

 Combined Division/Office Budgets

 Resolutions & Receiverships $1,231,682 $1,231,682 $734,570 60% ($497,112)

 Risk Management Supervision 535,598 535,598 505,038 94% (30,560)

 Information Technology 299,210 299,210 284,664 95% (14,546)

 Legal 304,470 304,470 272,136 89% (32,334)

 Administration 273,000 273,000 248,559 91% (24,441)

 Depositor & Consumer Protection 159,848 159,848 152,775 96% (7,073)

 CIO Council 84,521 84,521 72,517 86% (12,004)

 Complex Financial Institutions 61,207 61,207 50,603 83% (10,604)

 Insurance & Research 43,604 43,604 38,100 87% (5,504)

 Finance 41,636 41,636 36,783 88% (4,853)

 Inspector General 35,743 35,743 29,690 83% (6,053)

 Executive Support 1 31,152 31,152 25,928 83% (5,224)

 Corporate University - Corporate 23,753 23,753 21,482 90% (2,271)

 Corporate University - CEP 19,468 19,468 14,736 76% (4,732)

 Executive Offices 2 12,513 12,513 10,923 87% (1,590)

 Government Litigation 2,700 2,700 9 0% (2,691)

 Corporate Unassigned 135,030 135,030 0 0% (135,030)

 Grand Total $3,295,135 $3,295,135 $2,498,513 76% ($796,622)

Executive Summary of 2012 Budget and Expenditures

by Budget Component and Division/Office

Through December 31, 2012

(Dollars in Thousands)