2016

MESSAGE FROM THE CHIEF FINANCIAL OFFICER 15

I am pleased to present 

the FDIC’s 2016 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 25 consecutive years, the U.S. Government 

Accountability Office (GAO) has issued unmodified 

(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). We take pride in our responsibility and 

demonstrate discipline and accountability as stewards 

of these funds. We remain proactive in the execution 

of sound financial management and in providing 

reliable financial data.

The DIF balance (the net worth of the Fund) rose 

to a record $83.2 billion as of December 31, 2016, 

an increase of $10.6 billion over the year-end 2015 

balance of $72.6 billion.  The Fund balance increase 

was primarily due to assessment revenue, interest on 

U.S. Treasury securities, and reductions in estimated 

losses for current and prior year bank failures. 

FINANCIAL AND PROGRAM 

RESULTS FOR 2016

For 2016, DIF comprehensive income totaled $10.6 

billion compared to comprehensive income of $9.8 

billion during 2015.  The $741 million year-over-year 

increase was primarily due to a $1.2 billion increase 

in assessment revenue ($10.0 billion in 2016 as 

compared to $8.8 billion in 2015) and a $248 million 

increase in interest revenue ($671 million in 2016 as 

compared to $423 million in 2015).  These amounts 

were partially offset by a $683 million lower negative 

provision for insurance losses (negative $1.6 billion in 

2016 as compared to negative $2.3 billion in 2015).

In 2016, the FDIC continued its efforts to reduce 

operating costs and prudently manage the funds 

that it administers. The FDIC Operating Budget 

for 2016 totaled approximately $2.21 billion, 

which represented a decrease of $108 million (5 

percent) from 2015. Actual 2016 spending totaled 

approximately $1.95 billion. On December 13, 

2016, the FDIC Board of Directors approved a 2017 

FDIC Operating Budget totaling $2.16 billion, 

down $53 million (2 percent) from the 2016 budget. 

Including 2017, the annual operating budget has 

declined for seven consecutive years, consistent with a 

steadily declining workload.

The FDIC continues to reduce staffing levels, as 

conditions in the banking industry improve and 

the FDIC requires fewer resources. The FDIC’s 

authorized full-time equivalent staffing dropped in 

2016 from 6,886 to 6,533, a 5 percent reduction. 

In 2017, we project further reductions in the overall 

MESSAGE FROM 

THE CHIEF FINANCIAL OFFICER
ANNUAL REPORT

16

workforce. However, we will maintain a workforce 

capable of handling our supervision, insurance, and 

bank failure functions.

In 2016, five banks failed, down from eight in 2015. 

Even though the number of bank failures is relatively 

low, we will continue to prudently manage the risks 

to the DIF, including interest rate, fiscal, and global 

economic risks. We will remain focused on sound 

financial management techniques, and maintain our 

enterprise-wide risk management and internal control 

program.

Sincerely,

Steven O. App