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Chief Financial Officer's (CFO) Report to the Board

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Executive Summary

   •  Summary Trends and Results
I. Corporate Fund Financial Results

   •  DIF Balance Sheet
   •  DIF Income Statement
   •  DIF Statements of Cash Flows
   •  FRF Selected Financial Data
II. Investments Results & Prospective Strategies

   •  Deposit Insurance Fund Portfolio Summary
   •  Approved Investment Strategies
III. Budget Results

   •  Budget & Expenditures by Major Expense Categories
   •  Budget & Expenditures by Budget Component, Division & Office
Printable Version

Executive Summary - Second Quarter 2008

The attached report highlights the Corporation's financial activities and results for the period ending June 30, 2008.

  • The Deposit Insurance Fund (DIF) balance decreased by 14 percent ($7.626 billion) to $45.217 billion during the second quarter of 2008. The second quarter 2008 decrease was primarily due to the $10.0 billion increase in the contingent liability for anticipated failures, the majority of this amount pertained to the projected loss for IndyMac Bank.
  • All of the DIF investment portfolio’s held-to-maturity (HTM) securities were reclassified as available-for-sale (AFS) securities effective as of June 30, 2008, as it was determined that in light of significant actual and potential resolution-related outlays, the FDIC could no longer assert that it had the positive intent and ability to hold its HTM securities until their maturity dates, as required by generally accepted accounting principles. The reclassification resulted in an increase in unrealized gains on AFS securities of $1.630 billion.
  • On May 9, 2008, ANB Financial, National Association, Bentonville, Arkansas, was closed by the Office of the Comptroller of the Currency and the FDIC was named receiver. Of the $2.011 billion in total assets at inception, Pulaski Bank and Trust Company, Little Rock, Arkansas, purchased $229 million, while the FDIC retained $1.782 billion in assets, comprised primarily of commercial real estate loans. DIF recorded a $1.546 billion net receivable from the ANB Financial receivership, representing an estimated $1.760 billion in subrogated claims, less an allowance for loss of $214 million.
  • On May 30, 2008, the Office of the Comptroller of the Currency closed First Integrity Bank, National Association, Staples, Minnesota, and named the FDIC as receiver. First International Bank and Trust, Watford City, North Dakota, assumed all of the $49.7 million in deposits of the failed institution and purchased $34.9 million of the $51.8 million in assets. DIF recorded a $47.4 million net receivable from the First Integrity Bank receivership, representing $49.7 million in subrogated claims, less an allowance for loss of $2.3 million.
  • For the six months ending June 30, 2008, expenditures related to the Corporate Operating and Investment Budgets ran below budget 5 percent and 2 percent, respectively. The variance with respect to the Corporate Operating Budget expenditures was primarily the result of lower spending for contractual services in both the Ongoing Operations and Receivership Funding components of the budget through the second quarter. Detailed quarterly reports are provided separately to the Board by the Capital Investment Review Committee (CIRC).

On the pages following is an assessment of each of the three major finance areas: financial statements, investments, and budget.



Last Updated 09/16/2008 dofbusinesscenter@fdic.gov