Message from the Chief Financial Officer

I am pleased to present the Federal Deposit 

Insurance Corporation’s (FDIC) 2012 

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 21 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 execution of sound financial 

management and in providing reliable 

financial data. 

During 2012, the DIF continued to recover 

from the recent crisis. The DIF balance 

increased from $11.8 billion at the end of 

2011, to $33.0 billion at the end of 2012. 

The increase in the DIF balance was due in 

part to the decrease in the number of bank 

failures, from 92 in 2011 to 51 in 2012. Other 

factors contributing to the increase include 

assessment income and net fees transferred 

from the Temporary Liquidity Guarantee 

Program (TLGP). The FDIC expects that 

the rate at which troubled banks fail will 

continue to decline and the DIF balance will 

continue to grow.

Financi al Resu lts

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-overyear increase was primarily due to a 

$3.3 billion increase in revenue from 

excess Debt Guarantee Program (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.

As the TLGP expired at year-end, the 

DIF recognized revenue of $5.9 billion 

in 2012, representing the remaining 

deferred revenue not absorbed by the 

TLGP for losses. Through the end of 

the debt issuance period, the FDIC collected 

$10.4 billion in fees and surcharges under 

the DGP. In addition, the FDIC collected 

Transaction Account Guarantee Program 

(TAG) fees of $1.2 billion for unlimited 

coverage for noninterest-bearing transaction 

accounts held by insured depository 

institutions (IDIs) on all deposit amounts 

exceeding the fully insured limit of $250,000. 

Since inception of the program, the TLGP 

incurred estimated losses of $153 million 

and $2.1 billion on DGP and TAG Program 

claims, respectively. Over the duration of 

the TLGP, $8.5 billion in TLGP assets were 

transferred to the DIF. In addition, during 

2009, surcharges of $872 million were 

collected and deposited into the DIF.

Assessment revenue was $12.4 billion for 

2012. The decrease of $1.1 billion, from 

$13.5 billion in 2011, was primarily due to 

lower average assessment rates in 2012, 

resulting from improvement in the financial 

condition of the banking industry.

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 in the contingent loss reserve due 

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ANNUAL REPORT 2012

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 the 

current and prior years.

While the number of bank failures 

over the last two years, 143, was 

fewer than at the height of the recent 

banking crisis, with 157 failures in 

2010, we will maintain our focus 

on risks to the insurance fund 

going forward. In addition, we will 

continue to employ sound financial 

management techniques, emphasize 

the importance of a strong enterprisewide risk management and internal 

control program, and continue to 

implement the changes under the 

Dodd-Frank Act.

Sincerely,

Steven O. App

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