2011

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

45

financial hig

2. financial highlights

DepositInsu

The FDIC administers the Deposit Insurance 

Fund (DIF) and the FSLIC Resolution Fund 

(FRF), which fulfills the obligations of the 

former Federal Savings and Loan Insurance Corporation 

(FSLIC) and the former Resolution Trust Corporation 

(RTC). The following summarizes the condition of the 

DIF. (See the accompanying graphs on FDIC-Insured 

Deposits and Insurance Fund Reserve Ratios on the 

following page.)

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.
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SOURCE: Commercial Bank Call and Thrift Financial Reports

Note: Beginning in the fourth quarter of 2010, estimated insured deposits include the entire balance 

noninterest-bearing transaction accounts.

Dollars in Billions

0

1,000

2,000

3,000

4,000

5,000

6,000

$7,000

SEP-08 DEC-08 MAR-09 JUN-09 SEP-09 DEC-09 MAR-10 JUN-10 SEP-10 DEC-10 MAR-11 JUN-11 SEP-11 DEC-11

Estimated DIF Insured Depos

Deposit Insurance Fund Reserve Ratio

0.0

0.3

0.6

0.9

1.2

-0.6

-0.3

Fund Balances as a Percent of Insured Deposits

SEP-08 DEC-08 MAR-09 JUN-09 SEP-09 DEC-09 MAR-10 JUN-10 SEP-10 DEC-10 MAR-11 JUN-11 SEP-11 DEC-11
2011

47

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Deposit Insurance Fund Selected Statistics

Dol

For the years ended 

2011 2010  2009 

Financial Results

Revenue $16,342 $13,380 $24,706 

Operating Expenses 1,625 1,593 1,271 

Insurance and Other Expenses (includes provision for loss) (4,541) (1,518) 59,438 

Net Income (Loss) 19,257 13,305 (36,003)

Comprehensive Income (Loss) 19,179 13,510 (38,138)

Insurance Fund Balance $11,827 $(7,352) $(20,862) 

Fund as a Percentage of Insured Deposits (reserve ratio) 0.17 % (0.12) % (0.39) %

Selected Statistics

Total DIF-Member Institutions1 7,357 7,657 8,012 

Problem Institutions 813 884 702 

Total Assets of Problem Institutions $319,432 $390,017 $402,782 

Institution Failures 92 157 140 

Total Assets of Failed Institutions in Year2 $34,923 $92,085 $169,709 

Number of Active Failed Institution Receiverships 426 336 179 

1 Commercial banks and savings institutions. Does not include U.S. insured branches of foreign banks.

2

 Total Assets data are based upon the last call report filed by the institution prior to failure.

Corpor

The FDIC segregates its corporate operating budget 

and expenses into two discrete components: ongoing 

operations and receivership funding. The receivership 

funding component represents expenses resulting from 

financial institution failures and is, therefore, largely 

driven by external forces, while the ongoing operations 

component accounts for all other operating expenses 

and tends to be more controllable and estimable. 

Corporate Operating expenses totaled $2.82 billion in 

2011, including $1.55 billion in ongoing operations and 

$1.27 billion in receivership funding. This represented 

approximately 93 percent of the approved budget for 

ongoing operations and 58 percent of the approved 

budget for receivership funding for the year. (The numbers 

above in this paragraph will not agree with the DIF and 

FRF financial statements due to differences in how items 

are classified.)

The Board of Directors approved a 2012 Corporate 

Operating Budget of approximately $3.28 billion, 

consisting of $1.78 billion for ongoing operations and 

$1.50 billion for receivership funding. The level of 2012 

ongoing operations budget is approximately $106 million 

(6.3 percent) higher than the 2011 ongoing operations 

budget, while the 2012 receivership funding budget is 

roughly $702 million (31.9 percent) lower than the 2011 

receivership funding budget. Although savings in this area 

are being realized, the 2012 receivership funding budget 
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allows for resources for contractor support as well as nonpermanent staffing for DRR, the Legal Division, and other 

organizations should workload in these areas require an 

immediate response.

Inves

The FDIC instituted a separate Investment Budget in 

2003. It has a disciplined process for reviewing proposed 

new investment projects and managing the construction 

and implementation of approved projects. Proposed IT 

projects are carefully reviewed to ensure that they are 

consistent with the FDIC’s enterprise architecture. The 

project approval and monitoring processes also enable the 

FDIC to be aware of risks to the major capital investment 

projects and facilitate appropriate, timely intervention to 

address these risks throughout the development process. 

An investment portfolio performance review is provided 

to the FDIC’s Board of Directors quarterly.

The FDIC undertook significant capital investments 

during the 2003–2011 period, the largest of which was 

the expansion of its Virginia Square office facility. Other 

projects involved the development and implementation 

of major IT systems. Investment spending totaled $274 

million during this period, peaking at $108 million in 

2004. Spending for investment projects in 2011 totaled 

approximately $8 million. In 2012, investment spending is 

estimated at $12 million. 

Investment Spending 2003–2011

Dollars in Millio

2003 2004 2005 2006 2007 2008 2009 2010 2011

0

20

40

60

80

100

$120