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ANNUAL
REPORT

2015

THIS PAGE INTENTIONALLY LEFT BLANK

ANNUAL
REPORT

2015

FEDERAL DEPOSIT INSURANCE CORPORATION
550 17th Street NW, Washington, DC 20429 	

OFFICE OF THE CHAIRMAN

February 18, 2016
Dear Sir,
In accordance with:
•	 the provisions of Section 17(a) of the Federal Deposit Insurance Act,
•	 the Chief Financial Officers Act of 1990, Public Law 101-576,
•	 the Government Performance and Results Act of 1993 (as amended) and the GPRA
Modernization Act of 2010,
•	 the provisions of Section 5 (as amended) of the Inspector General Act of 1978, and
•	 the Reports Consolidation Act of 2000,
the Federal Deposit Insurance Corporation (FDIC) is pleased to submit its 2015 Annual Report
(also referred to as the Performance and Accountability Report), which includes the audited financial statements
of the Deposit Insurance Fund (DIF) and the Federal Savings and Loan Insurance Corporation (FSLIC)
Resolution Fund (FRF).
In accordance with the Reports Consolidation Act of 2000, the FDIC assessed the reliability of the performance
data contained in this report. No material inadequacies were found, and the data are considered to be complete
and reliable.
Based on internal management evaluations, and in conjunction with the results of independent financial
statement audits, the FDIC can provide reasonable assurance that the objectives of Section 2 (internal
controls) and Section 4 (financial management systems) of the Federal Managers’ Financial Integrity Act of
1982 have been achieved, and that the FDIC has no material weaknesses. In addition, the U.S. Government
Accountability Office did not identify any significant deficiencies in the FDIC’s internal controls for 2015.
We are committed to maintaining effective internal controls corporate-wide in 2016.
	Sincerely,

	
Martin J. Gruenberg
	Chairman
The President of the United States
The President of the United States Senate
The Speaker of the United States House of Representatives

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FEDERAL DEPOSIT INSURANCE CORPORATION

TA B L E O F C O N T E N T S
Message from the Chairman......................................................................................................... 5
Message from the Chief Financial Officer.................................................................................. 11
	 I.	 Management’s Discussion and Analysis............................................................................ 13
The Year in Review.............................................................................................................. 15
Overview......................................................................................................................................15
Implementation of Key Regulations ............................................................................................15
Deposit Insurance.........................................................................................................................19
Activities Related to Systemically Important Financial Institutions...............................................21
Supervision ..................................................................................................................................26
Receivership Management............................................................................................................44
International Outreach ................................................................................................................47
Minority and Women Inclusion...................................................................................................50
Effective Management of Strategic Resources................................................................................52
	 II.	 Performance Results Summary.......................................................................................... 57
Summary of 2015 Performance Results by Program.....................................................................59
Performance Results by Program and Strategic Goal.....................................................................61
Prior Years’ Performance Results...................................................................................................68
	 III.	 Financial Highlights............................................................................................................. 77
Deposit Insurance Fund Performance ..........................................................................................79
	 IV.	 FDIC Budget and Spending................................................................................................. 83
Corporate Operating Budget........................................................................................................85
2015 Budget and Expenditures by Program..................................................................................86
Investment Spending....................................................................................................................87
	 V.	 Financial Section.................................................................................................................. 89
Deposit Insurance Fund (DIF).....................................................................................................90
FSLIC Resolution Fund (FRF)...................................................................................................111
Government Accountability Office Auditor’s Report...................................................................120
Management’s Report on Internal Control over Financial Reporting..........................................127
Management’s Response to the Auditor’s Report.........................................................................128
	 VI.	 Corporate Management Control...................................................................................... 129
Management Report on Final Actions........................................................................................131
	VII.	 Appendices......................................................................................................................... 135
A.	 Key Statistics.........................................................................................................................137
B.	 More About the FDIC..........................................................................................................150
C. 	Office of Inspector General’s Assessment of the Management and Performance
Challenges Facing the FDIC ................................................................................................159
D.	Acronyms..............................................................................................................................166

ANNUAL REPORT 2015

3

INSURING DEPOSITS • EXAMINING AND SUPERVISING
INSTITUTIONS •
MANAGING RECEIVERSHIPS • EDUCATING CONSUMERS
In its unique role as deposit insurer of banks and savings associations, and in cooperation
with the other state and federal regulatory agencies, the FDIC promotes the safety and
soundness of the U.S. financial system and insured depository institutions by identifying,
monitoring, and addressing risks to the Deposit Insurance Fund (DIF).
The FDIC promotes public understanding and the development of sound public policy
by providing timely and accurate financial and economic information and analyses. It
minimizes disruptive effects from the failure of financial institutions and assures fairness
in the sale of financial products and the provision of financial services.
The FDIC’s long and continuing tradition of excellence in public service is supported
and sustained by a highly skilled and diverse workforce that continuously monitors and
responds rapidly and successfully to changes in the financial environment.

At the FDIC, we are working together to be the best.

M E S S A G E F RO M T H E C H A I R M A N
For 82 years, the FDIC has carried out its mission
of maintaining public confidence and stability in
the nation’s
financial system.
The FDIC does
this by insuring
deposits;
supervising
and examining
financial
institutions
for safety,
soundness,
and consumer
protection;
and managing
receiverships
when banks fail.
At the end of September 2015, the FDIC insured
deposits of $6.4 trillion in more than half a billion
accounts at almost 6,300 institutions, supervised
3,995 institutions, and managed 470 active
receiverships having total assets of $23.9 billion.
The U.S. economy and the banking industry
continued to improve in 2015. After experiencing the
most severe financial crisis and economic downturn
since the 1930s, the United States is now well into the
recovery. The economy is expanding, although the
pace of economic growth has been weaker than the
long-term trend and bank profitability remains lower
than pre-crisis levels. Still, the industry has been
strengthening balance sheets, building capital, and
enhancing liquidity.
Stronger balance sheets indicate ample capacity for
FDIC-insured institutions to continue to support the
economic recovery. During the 12 months ended
September 30, loan balances at banks increased by
$482 billion, the largest 12-month dollar gain since
the year ending June 2008. Moreover, that growth
was broad-based, with all major loan categories
posting increases, and more than three-quarters of

all institutions reporting larger loan balances. Loan
growth was strongest at community banks, which
posted an 8.5 percent gain versus 5.9 percent for the
industry overall. Rising loan demand and a recent
pickup in the pace of economic activity are creating
favorable conditions for FDIC-insured institutions,
although the global economic outlook remains
uncertain and poses a potential downside risk for the
U.S. economy and financial system.
The number of both failed and problem institutions
declined again in 2015, and the Deposit Insurance
Fund (DIF) balance, which was almost $21 billion in
the red during the financial crisis, was $72.6 billion in
the black at year-end.
The FDIC is working to wind down the receiverships
of failed institutions and to address the emerging
supervisory challenges of interest-rate risk, credit risk,
and cybersecurity threats. This shift is indicative of
the move from a post-crisis recovery environment
to one of expanding economic growth and financial
activity. Following is an overview of the key strategic
challenges facing the FDIC.

REBUILDING THE DIF,
RESOLVING FAILED BANKS,
AND FDIC RESOURCES
Under a restoration plan that reflects Dodd-Frank Act
requirements to rebuild the DIF, the FDIC has had
a steady increase in the year-end fund balance from
2011 through 2015. Recently, lower than estimated
losses for past bank failures, together with assessment
income, have contributed to the increase in the fund
balance to $72.6 billion as of December 31, 2015.
The reserve ratio was 1.09 percent as of September 30,
2015.
The Dodd-Frank Act raised the minimum reserve
ratio of the DIF from 1.15 percent to 1.35 percent
and requires that the reserve ratio reach that level by
September 30, 2020. Further, the Dodd-Frank Act

MESSAGE FROM THE CHAIRMAN

5

also makes banks with $10 billion or more in total
assets responsible for the increase from 1.15 percent
to 1.35 percent. Under a rule adopted by the FDIC
in 2011, regular assessment rates for all banks will
decline when the reserve ratio reaches 1.15 percent.
Banks with total assets of less than $10 billion will
have substantially lower assessment rates then. To
ensure that the reserve ratio reaches 1.35 percent by
the statutory deadline, the FDIC proposed a rule
in 2015 that would impose on banks with at least
$10 billion in assets a surcharge of 4.5 cents per
$100 of their assessment base, after making certain
adjustments. The FDIC expects the reserve ratio
– the ratio of the DIF balance to estimated insured
deposits - would likely reach 1.35 percent after
approximately two years of payments of the proposed
surcharges.
Bank failures in 2015 totaled eight, down dramatically
from a peak of 157 in 2010, while the number of
banks on the problem bank list (banks rated 4 or 5
on the CAMELS rating scale) fell to 203 at the end of
September 2015 from a high of 888 in March 2011.
The United States is now approaching pre-crisis levels
for failed banks and problem banks.
As the banking industry continues to recover,
the FDIC requires fewer resources. The agency’s
authorized workforce for 2015 was 6,886 full-time
equivalent positions compared with 7,200 the year
before. The 2015 Corporate Operating Budget was
$2.3 billion, a decrease of 3.0 percent from 2014.
The FDIC reduced its budget for 2016 from the
prior year by 4.7 percent to $2.2 billion and reduced
authorized staffing by approximately 4.6 percent to
6,569 positions, in anticipation of a further drop in
bank failure activity in the years ahead. However,
contingent resources are included in the budget
to ensure readiness should economic conditions
unexpectedly deteriorate.
During 2015, the FDIC successfully used various
resolution strategies to protect insured depositors of
failed institutions at the least cost to the DIF. The
FDIC actively marketed failing institutions and sold
them to other financial institutions. These strategies
protected insured depositors and preserved banking

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FEDERAL DEPOSIT INSURANCE CORPORATION

relationships in many communities, providing
depositors and customers with uninterrupted access
to essential banking services.

IMPLEMENTING THE FDIC’S
AUTHORITIES UNDER THE
DODD-FRANK ACT
The FDIC continues to make progress in developing a
framework under the Dodd-Frank Act for the orderly
failure of a large, complex, systemically important
financial institution while avoiding the taxpayer
bailouts and the market breakdowns that took place
during the recent financial crisis.
Under the Dodd-Frank Act, bankruptcy is the
statutory first option for the failure of a Systemically
Important Financial Institution (SIFI). The largest
bank holding companies, as well as non-bank financial
companies designated by the Financial Stability
Oversight Council for supervision by the Federal
Reserve Board, are required to prepare resolution
plans, also referred to as “living wills,” under Title
I of the Dodd-Frank Act. These living wills must
demonstrate that the firm could be resolved under
bankruptcy without severe adverse consequences
for the financial system or the U.S. economy. As
a backstop, for circumstances in which an orderly
bankruptcy might not be possible, Title II of the
Dodd-Frank Act provides the Orderly Liquidation
Authority. This public resolution authority allows the
FDIC to manage the orderly failure of the firm.

The Living Wills Process
The FDIC and the Board of Governors of the
Federal Reserve System are charged with reviewing
and assessing each firm’s plan. If a plan does not
demonstrate the firm’s resolvability, the FDIC and the
Federal Reserve may jointly determine that it is not
credible or would not facilitate an orderly resolution
of the company under the Bankruptcy Code and issue
a notice of deficiencies.
In August 2014, the FDIC and the Federal Reserve
Board delivered individual letters to the largest

financial firms that identified common shortcomings
of the plans. These shortcomings included
assumptions that the agencies regard as unrealistic
or inadequately supported, and the failure to make,
or even to identify, the kinds of changes in firm
structure and practices that would be necessary to
enhance the prospects for orderly resolution. The
firms were directed to address these shortcomings and
improve their resolvability including by simplifying
and rationalizing their organizations, ensuring the
continuity of critical services in resolution, and
demonstrating operational capabilities for resolution
preparedness. The 2015 plans were submitted on July
1 and were under review by the FDIC and the Federal
Reserve at year-end.
The living wills submitted by firms also include
public portions. Public and market understanding
of the process for improving the resolvability of
Global Systemically Important Financial Institutions
(G-SIFIs) is important for a number of reasons,
including allowing for the development of realistic
market expectations about how the resolution of a
G-SIFI might proceed. In the past year the agencies
provided guidance to the firms requiring that the
public portions of the plans include more detailed
information in a number of areas. As a result,
this year’s public plans provide substantially more
information.

The Orderly Liquidation Authority
Given the challenges and the uncertainty surrounding
any particular failure scenario, Title II of the DoddFrank Act provides the Orderly Liquidation Authority,
which is effectively a public-sector bankruptcy process
for institutions whose resolution under the U.S.
Bankruptcy Code would pose systemic concerns.
The Orderly Liquidation Authority is the mechanism
for ensuring that policymakers will not be faced with
the same poor choices they faced in 2008. Its tools are
intended to enable the FDIC to carry out the process
of winding down and liquidating the firm, while
ensuring that shareholders, creditors, and culpable
management are held accountable and taxpayers do
not bear losses. In the years since enactment of Dodd-

Frank, the FDIC has made significant progress in
developing the operational capabilities to carry out a
resolution if needed.
Further, since passage of the Dodd-Frank Act, other
major jurisdictions have followed the United States
in enacting systemic resolution authorities that are
comparable to those provided in the Dodd-Frank Act.
Pursuant to provisions of the Orderly Liquidation
Authority, the FDIC has worked closely with all the
major foreign jurisdictions, including the United
Kingdom, Germany, France, Switzerland, and Japan,
as well as European entities including the new Single
Resolution Board and Single Supervisory Mechanism.
This cooperation is essential to identifying issues and
to addressing obstacles to cross-border resolution.
In 2014, the European Parliament established a Single
Resolution Mechanism (SRM) for the resolution of
financial institutions in Europe. The FDIC is actively
engaging with the new Single Resolution Board, which
oversees the SRM, to be of assistance in its set up
and to discuss cooperation and resolution planning
for G-SIFIs with assets and operations in the United
States and the Eurozone. The FDIC and the European
Commission have established a joint Working Group
to focus on both resolution and deposit insurance
issues. In addition, the FDIC participates in the Crisis
Management Groups for G-SIFIs with significant
assets and operations in the United States. Deepening
our cross-border relationships with the key foreign
jurisdictions will be an ongoing priority for the FDIC’s
work on systemic resolution.

Large Bank Deposit Insurance Determinations
In April, the FDIC issued an Advance Notice of
Proposed Rulemaking (ANPR) that sought comment
on some approaches aimed at improving the way
deposit insurance determinations could be done at
banks with a large number of deposit accounts—
not just banks that are part of SIFIs, but any bank
with a large number of deposit accounts. Providing
depositors with prompt access to their funds is
essential for preserving public confidence and
maintaining financial system stability. For the typical
bank resolved by the FDIC, insured deposits are
MESSAGE FROM THE CHAIRMAN

7

available the next business day. The questions and
alternatives in the ANPR were aimed at bolstering the
FDIC’s capability to make equally prompt deposit
insurance determinations at banks with a large
number of deposit accounts, such as two million
accounts.

Interest-Rate Risk and Credit Risk
While there were a number of positive trends in the
banking industry, there are signs of growing interestrate risk and credit risk that warrant attention. In
order to mitigate the impact of low rates on net
interest margins, banks have been going out further
on the yield curve and increasing the mismatch
between asset and liability maturities. Lending in
higher-risk loan categories has been growing. The
recent Shared National Credits review of large
syndicated loans noted that “credit risk in the
portfolio remains high, despite a relatively favorable
economic environment.” And loan portfolios in
regions that depend on oil and gas revenue are
increasingly at risk due to the significant decline in
energy prices.
At the same time risk profiles have been rising,
banks have not seen corresponding growth in
overall revenue.
These signs of growing interest-rate risk and credit
risk are important because – as history tells us – it
is during this phase of the credit cycle when lending
decisions are made that could lead to future losses.
Timely attention by banks to address these growing
risks will benefit banks and contribute to the
sustainability of the current economic expansion.
These risks will continue to be a focus of supervisory
attention.

REGULATORY REVIEW
The Economic Growth and Regulatory Paperwork
Reduction Act of 1996 (EGRPRA) requires that
regulations adopted by the federal banking agencies,
including the FDIC, be reviewed by the agencies at
least once every 10 years. The current cycle began in

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FEDERAL DEPOSIT INSURANCE CORPORATION

late 2014 and will end in 2016 when a final report
is sent to Congress. The purpose of this review is
to identify outdated or unnecessary regulations and
consider how to reduce regulatory burden on insured
depository institutions while, at the same time,
ensuring that safety and soundness and consumer
compliance standards are maintained. The FDIC
in 2015 hosted and participated in public outreach
meetings nationwide to hear firsthand from bankers
and consumer groups.
The regulatory review process is one we take very
seriously. A particular interest to the FDIC is the
impact of our regulations on community and rural
banks. As the EGRPRA process unfolded in 2015,
we worked with the other agencies through the
Federal Financial Institutions Examination Council
(FFIEC) on a multi-step process to review Call Report
burden and the real estate appraisal standards. The
agencies anticipate taking further actions prior to the
issuance of the final report.

COMMUNITY BANKING
INITIATIVE
Community banks are critically important to our
economy and banking system. Community banks
account for 13 percent of the banking assets in the
United States, but also account for 44 percent of
the small loans to businesses and farms made by all
banks, making them key partners in supporting local
economic development and job creation. Since the
FDIC is the primary federal supervisor of the majority
of community banks in the United States, community
banking will continue to be an important focus of
FDIC supervision, technical assistance, and research.
In late 2012, the FDIC published a comprehensive
study on community banking. The study confirmed
that the traditional community bank business model
– careful relationship lending, funding from stable
core deposits, and local market expertise – performed
comparatively well during the recent banking crisis.
Of the more than 500 banks that failed since 2007,
the highest failure rates were among non-community
banks and community banks that departed from this

traditional model by investing in risky assets funded
by non-core deposits.
In 2015, FDIC analysts published a new study on the
challenges and opportunities facing small, closely held
community banks.
Apart from research, the community bank initiative
includes a robust technical assistance program for
bank directors, officers, and employees. The FDIC’s
latest innovation is a series of more than 20 online
videos that are helping community bankers to
understand better their management responsibilities.
During 2015, new videos were released on interestrate risk, corporate governance, cybersecurity, vendor
management, the loan originator compensation rule,
and mortgage servicing rules.
Finally, the FDIC’s Advisory Committee on
Community Banking is an ongoing forum for
discussing current issues and receiving valuable
feedback from the industry. The committee, which
met three times during 2015, is composed of 15
community bank CEOs from around the country. It
is a valuable resource for input on a wide variety of
topics, including examination policies and procedures,
capital and other supervisory issues, credit and
lending practices, deposit insurance assessments and
coverage, and regulatory compliance issues.

CYBERSECURITY
The rapidly evolving nature of cybersecurity
risks reinforces the need for regulators, financial
institutions, and critical technology service providers
to have appropriate procedures to effectively respond
to cybersecurity risk. The FDIC works with other
bank regulators to analyze and respond to emerging
cyber threats, bank security breaches, and other
harmful or disruptive technology-related incidents.
The federal banking agencies are currently reviewing
security readiness at banks and technology service
providers. We are also evaluating our supervisory
policies for potential improvements.
The FDIC has taken a number of actions to raise
awareness of cyber risks and to encourage practices

to protect the banks we supervise, particularly
community banks. For example, in 2015 the FDIC
distributed to all FDIC-supervised banks three
new videos that are part of our Cyber Challenge:
a Community Bank Cyber Exercise series; added
a cyber-awareness video to the Directors’ Resource
Center; and hosted a cybersecurity teleconference for
the industry. Cyber Challenge provides operational
risk-related scenarios and challenge questions designed
to facilitate discussion and allow community bankers
to assess their preparedness for and response to
cyber-related events. The FDIC, in coordination
with other members of the FFIEC, also published a
Cybersecurity Assessment Tool to help institutions
identify risks and determine their preparedness.
The voluntary tool includes a process for measuring
cybersecurity preparedness over time.
The FDIC monitors cybersecurity issues on a
regular basis through on-site bank examinations and
regulatory and intelligence reports. The FDIC also
works with other federal agencies, law enforcement
and a number of government groups and industry
coordinating councils to facilitate collaboration and
information sharing across the financial services
sector.

PROTECTING CONSUMERS
AND EXPANDING ACCESS
TO BANKING SERVICES
Expanding access to mainstream banking services
is part of the FDIC’s core mission. The FDIC’s
National Survey of Unbanked and Underbanked
Households, conducted every two years with the
U.S. Census Bureau, has documented that a large
number of households in our country do not have a
relationship with an insured depository institution or
rely on high cost alternative financial service providers
to meet some of their financial services needs. The
survey, which was last released in October 2014, is
widely used by the industry, academics, government,
consumer and community organizations, the media,
and many others to better understand who lacks
access to mainstream banking services in the United

MESSAGE FROM THE CHAIRMAN

9

States and to gain insights into opportunities to
expand participation.
During 2015, the FDIC continued its efforts to
protect consumers and expand access to mainstream
banking services. A new national effort, for example,
was launched to promote local outreach and awareness
of safe accounts. These safe accounts, which are
offered by banks with branches in counties where
nearly 80 percent of Americans live, provide secure,
affordable transaction services. The accounts follow
the standards for a Model SAFE account developed
by the FDIC’s Advisory Committee on Economic
Inclusion. The advisory committee, composed of
bankers, community and consumer organizations
and academics, also began the process of determining
how mobile banking technologies could help expand
economic inclusion in the banking system and
explored opportunities to address the financial services
needs of individuals with disabilities.
The FDIC has a longstanding commitment to
financial education. In 2015, we added a new Money
Smart for Young People curriculum series to the
recently enhanced Teacher Online Resource Center.
This age-appropriate resource involves educators,
parents/caregivers, and young people in the learning
process, including through the use of Parent/Caregiver
Guides that are available in English and Spanish.
Since financial education can be enhanced through
hands-on learning approaches, we expanded a pilot
to 21 participating banks that combine the offer of a
savings account with financial education programs for
young people. And along with the Financial Literacy

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FEDERAL DEPOSIT INSURANCE CORPORATION

and Education Commission and other regulatory
agencies, the FDIC issued guidance that encourages
banks to offer youth savings programs and answers
related frequently asked questions. Entrepreneurs can
also benefit from an enhanced Money Smart for Small
Business curriculum, which is now also available in
Spanish.

CONCLUSION
During 2015, the U.S. banking industry continued its
recovery from the recent financial crisis. The industry
benefited from stronger balance sheets, fewer problem
banks and bank closings, increased lending activity,
and a larger balance in the DIF. At the same time,
it remains important for bankers and supervisors to
heed the lessons of the recent crisis by maintaining a
steady focus on risk management.
In 2016, the FDIC will continue to work to fulfill its
mission of maintaining public confidence and stability
in the nation’s financial system. The workforce
of the FDIC remains committed to the agency’s
core mission. I am very grateful to the dedicated
professionals of the FDIC for their commitment to
public service and for the high level at which they
carry out their important responsibilities.
Sincerely,

Martin J. Gruenberg

M E S S A G E F RO M
THE CHIEF FINANCIAL OFFICER
I am pleased to present
the FDIC’s 2015 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 24 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 $72.6 billion as of December 31,
2015, an increase of $9.8 billion over the year-end
2014 balance of $62.8 billion. The Fund balance
increase was primarily due to assessment revenue and
reductions in estimated losses for current and prior
year bank failures.

FINANCIAL AND PROGRAM
RESULTS FOR 2015
For 2015, DIF comprehensive income totaled $9.8
billion, a decrease of $5.8 billion over the 2014
comprehensive income of $15.6 billion. This decrease
was primarily due to a $6.0 billion difference in the
provision for insurance losses -- a negative $2.3 billion
in 2015 compared to a negative $8.3 billion in 2014.

Assessment revenue was $8.8 billion in 2015 and $8.7
billion in 2014. Interest on U.S. Treasury obligations
totaled $423 million as compared to $282 million in
2014; at the end of 2015, the yield to maturity on the
DIF portfolio was 0.94 percent.
In 2015, the FDIC continued its efforts to reduce
operating costs and prudently manage the funds that
it administers. The FDIC Operating Budget for 2015
totaled approximately $2.3 billion, which represented
a decrease of $73 million (3 percent) from 2014.
Actual 2015 spending totaled approximately $2.1
billion. On December 15, 2015, the FDIC Board
of Directors approved a 2016 Corporate Operating
Budget totaling $2.2 billion, down $108 million
(5 percent) from the 2015 budget. Including 2016,
the annual operating budget has declined for six
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
2015 from 7,200 to 6,886, a 4 percent reduction.
In 2016, we project further reductions in the overall
workforce. However, we will maintain a workforce
capable of handling our supervision, insurance, and
resolution functions.
In 2015, eight banks failed, down from 18 in 2014.
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

MESSAGE FROM THE CHIEF FINANCIAL OFFICER

11

FDIC SENIOR LEADERS

Seated (left to right): Vice Chairman Thomas M. Hoenig and Chairman Martin J. Gruenberg.
Standing 1st Row (left to right): Barbara Hagenbaugh, Segundo Pereira, Doreen R. Eberley, Arleas Upton Kea, and Craig R. Jarvill.
2nd Row (left to right): Barbara A. Ryan, Arthur J. Murton, Stephen A. Quick, Cottrell L. Webster, Mark E. Pearce, and Martin D.
Henning. 3rd Row (left to right): Diane Ellis, Steven O. App, Eric J. Spitler, Bret D. Edwards, Russell G. Pittman and Charles Yi.
Not pictured: Kymberly K. Copa, Lawrence Gross, Suzannah L. Susser, Robert D. Harris, Fred W. Gibson, Christopher J. Farrow, and
Andy Jiminez.

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FEDERAL DEPOSIT INSURANCE CORPORATION

I .	

MANAGEMENT ’S DISCUSSION
A N D A N A LY S I S

I.

Management’s
Discussion
and Analysis

13

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THE YEAR IN REVIEW
OVERVIEW
The FDIC continued to fulfill its mission-critical
responsibilities during 2015. The agency adopted and
issued final rules on key regulations under the DoddFrank Wall Street Reform and Consumer Protection
Act (Dodd-Frank Act) and engaged in several
community banking and community development
initiatives. Cybersecurity remained a high priority for
the FDIC in 2015; the agency worked to strengthen
cybersecurity oversight, help financial institutions
mitigate increasing risks, and respond to cyber threats.
The sections below highlight these and some of our
other accomplishments during the year.

became effective for community banks on January 1,
2015. The FDIC and other federal banking agencies
continued efforts to implement the revised capital
rules, including finalizing regulatory reporting,
making technical corrections to the rule, and issuing
guidance throughout 2015. In February 2015, the
FDIC adopted another aspect of Basel III regarding
certain regulatory reporting under the final capital
rule. In June 2015, the FDIC adopted as final its
amendments to the advanced approaches risk-based
capital rule. The rule addresses certain technical
adjustments to the advanced approaches risk-based
capital rule to enhance consistency of the U.S. capital
rules with international standards for the use of
the advanced approaches framework. The agencies
also provided capital guidance to banks by issuing
a calculation tool that helps certain institutions
determine risk-weighted assets and by releasing
frequently asked questions (FAQs) on the revised
rules. Finally, the agencies issued joint supervisory
guidance in November 2015 concerning the capital
treatment for certain covered funds under the final
rule implementing Section 13 of the Bank Holding
Company Act (Volcker Rule).
Regulatory Reporting Under the Final Capital Rule

Photo credit: Courtesy ABA Banking Journal

An Interview with the FDIC’s Chairman Martin J. Gruenberg
American Bankers Association President and CEO Frank Keating
asks for the FDIC Chairman’s views on the future of community
banking, cybersecurity threats, regulatory burden, too-big-to-fail,
and more.

IMPLEMENTATION OF
KEY REGULATIONS
Capital Rulemaking and Guidance
The revised capital rules, which generally
implemented Basel III international capital standards
and addressed the removal of references to external
credit ratings as standards of creditworthiness,

In February 2015, the FDIC, the Federal Reserve
Board (FRB), and the Office of the Comptroller
of the Currency (OCC), under the auspices of the
Federal Financial Institutions Examination Council
(FFIEC), announced changes to regulatory capital
reporting on the Consolidated Reports of Condition
and Income (Call Report). The changes update
the risk-weighted assets portion of the regulatory
capital schedule to reflect the standardized approach
to risk weighting in the revised capital rules. These
regulatory capital reporting changes were effective as
of the March 31, 2015 report date for all institutions.
As of the same report date, the revisions to the
regulatory capital components and ratios portion
of the Call Report regulatory capital schedule that
were effective as of March 31, 2014, for advanced

MANAGEMENT'S DISCUSSION AND ANALYSIS

15

approaches institutions became applicable to all
other institutions.
In February and December 2015, the FDIC and the
other banking agencies, under the auspices of the
FFIEC, held national teleconferences for depository
institutions to help them better understand the
revisions to the regulatory capital schedule. More
than 2,600 people participated in the February call,
and 1,200 took part in the December event.
In March 2015, the FDIC and the other federal
banking agencies also implemented the new FFIEC
102 market risk regulatory report. This quarterly
report collects key information from the limited
number of institutions subject to the Basel III market
risk capital rules on how they measure and calculate
market risk under these rules. The report was
approved by the Office of Management and Budget
(OMB) and took effect as of the March 31, 2015,
report date.
Regulatory Capital — Revisions Applicable to
Banking Organizations Subject to the Advanced
Approaches Risk-Based Capital Rule
In June 2015, the FDIC Board approved a joint final
rule that made technical corrections to the advanced
approaches risk-based capital rules and rectified
certain missing internal ratings-based requirements
that were identified as part of the Regulatory
Consistency Assessment Program. The final rule was
published in the Federal Register on July 15, 2015.
Regulatory Capital Guidance
The FDIC led the development of a calculation
tool to help institutions that have securitization
exposures calculate their risk-weighted assets under
the Simplified Supervisory Formula Approach. The
FDIC released the calculator in February 2015,
through a Financial Institution Letter (FIL), and the
tool is available on the FDIC’s website as well as the
websites of the other federal banking agencies.
In addition, in April 2015, the federal banking
agencies released an initial set of FAQs on the
revised capital rules, many of which are focused on

16

community bank issues. The capital FAQs are posted
on the FDIC website and are expanded as additional
questions are raised.
Capital Deduction Guidance for Non-Legacy
Covered Funds Under the Volcker Rule
In November 2015, the FDIC, jointly with the
FRB and OCC, issued guidance that clarifies the
interaction between the regulatory capital rule and the
Volcker Rule with respect to the appropriate capital
treatment for investments in certain private equity
funds and hedge funds (covered funds). The FDIC
issued FIL 50-2015 titled Supervisory Guidance on the
Capital Treatment of Certain Investments in Covered
Transactions to notify FDIC-supervised institutions of
the calculations. The Volcker Rule prohibits banking
organizations from holding ownership interests in
covered funds after the relevant conformance period,
unless such ownership interests are covered under
certain exceptions/exemptions in the final rule.
An exception is permitted for ownership interests
arising from sponsoring covered funds totaling
less than 3 percent of Tier 1 capital and subject to
certain seeding period provisions. Under the rule,
investments in covered funds purchased or acquired
after December 31, 2013, must be deducted from
Tier 1 capital after an initial conformance period that
ended on July 21, 2015. The conformance period
for legacy covered funds will end in July 2017. The
guidance and instructions regarding legacy covered
funds will be available at a later time. The November
supervisory guidance describes the mechanics for
making capital deductions under the Volcker Rule
and how these relate to deductions required under the
regulatory capital rule for investments in the capital
instruments of unconsolidated financial institutions.
These mechanics are intended to ensure no “double
deductions” from Tier 1 capital.

Other Rulemaking and Guidance
Under the Dodd-Frank Act
The Dodd-Frank Act requires various agencies
to publish regulations in a number of areas. The
following is a summary of significant rulemaking

FEDERAL DEPOSIT INSURANCE CORPORATION

activity relating to the Dodd-Frank Act and other
accomplishments during the year.
Minimum Requirements for Appraisal
Management Companies
In April 2015, the FDIC, jointly with the OCC,
FRB, National Credit Union Administration
(NCUA), Consumer Financial Protection Bureau
(CFPB), and the Federal Housing Finance
Agency (FHFA), issued a final rule to implement
the minimum requirements for registration and
supervision of appraisal management companies
(AMCs) under the Dodd-Frank Act. The final rule
establishes the minimum requirements set forth in
Section 1473 of the Act (Section 1473) for state
registration and supervision of AMCs; outlines the
minimum requirements for AMCs that register with a
state under Section 1473; requires federally regulated
AMCs to meet the minimum requirements of Section
1473 (other than registering with a state); and requires
the reporting of certain AMC information to the
Appraisal Subcommittee of the FFIEC. The final rule
was published in the Federal Register on June 9, 2015,
and the effective date was August 10, 2015.
The Volcker Rule
The Volcker Rule (Rule) contains restrictions and
prohibitions on the ability of banks and their
affiliates to engage in proprietary trading and have
interests in, or relationships with, a hedge fund or
a private equity fund. The Rule was adopted on
December 10, 2013, and became effective on April 1,
2014. The Volcker Rule was subject to an extended
conformance period that expired on July 21, 2015.
In April and December of 2014, the FRB issued
Orders announcing that it planned to extend the
conformance period for certain covered funds for two
additional one-year periods, so that the conformance
period for these “legacy” covered funds would end
July 21, 2017.
In January 2014, the Volcker Rule agencies
[FDIC, OCC, FRB, Commodity Futures Trading
Commission (CFTC), and Securities and Exchange
Commission (SEC)] adopted a joint interim final

rule that permits banking entities subject to the
Rule to retain investments in certain collateralized
debt obligations backed primarily by trust preferred
securities.
To help ensure consistent implementation of the
Volcker Rule, the agencies established an interagency
working group that meets regularly to discuss issues
and the application and enforcement of the Rule.
During 2015, the interagency Volcker Rule working
group posted 11 joint FAQs on their websites to
address certain implementation issues presented by
banking entities subject to the Rule. The questions
addressed such matters as:
•	 Chief Executive Officer Certification for Prime
Brokerage Transactions
•	 Compliance for Market Making and the
Identification of Covered Funds
•	 Termination of Market-Making Activity: Treatment
of Residual Positions
•	 Conformance Period
•	 Seeding Period Treatment of Registered Investment
Companies and Foreign Public Funds
•	 Foreign Public Funds Sponsored by a Banking
Entity
•	 Joint Venture Exclusion for Covered Funds
•	 Solely Outside the United States Covered Fund
Exemption: Marketing Restriction
•	 Applicability of the Restrictions in Section 13(f ) of
the Bank Holding Company Act (Super 23A)
•	 30-Day Metrics Reporting During the
Conformance Period
•	 Treasury Separate Trading of Registered Interest and
Principal Securities (STRIPS)
Margin and Capital Requirements
for Covered Swaps Entities
In October 2015, the FDIC approved a final rule to
establish margin requirements for swaps that are not
cleared through a clearinghouse. The final rule takes
into account the risk posed by a swaps dealer’s

MANAGEMENT'S DISCUSSION AND ANALYSIS

17

counterparties in establishing the minimum amount
of initial and variation margin that the covered swaps
entity must exchange with such counterparties.
The final rule was issued jointly with the OCC, the
FRB, the Farm Credit Administration (FCA), and the
FHFA. The rule will apply to entities supervised by
these agencies that register with the CFTC or SEC as
a dealer or major participant in swaps. The joint final
rule was developed in consultation with the CFTC
and the SEC, as required by the Dodd-Frank Act.
The final rule implements certain requirements
contained in Sections 731 and 764 of the DoddFrank Act, which requires the prudential regulators
to establish initial and variation margin requirements
for the largest and most active participants in the
over-the-counter (OTC) derivatives market. The
Dodd-Frank Act required the agencies to impose
margin requirements to help ensure the safety and
soundness of swaps dealers in light of the risk to
the financial system associated with non-cleared
swaps activity. The rule is also consistent with the
international framework on margin requirements
published in September 2013 by the Basel Committee
on Banking Supervision (BCBS) and the International
Organization of Securities Commissions.
The final rule requires insured depository institutions
(IDIs) that are covered swaps entities— the large
dealers subject to the rule—to collect and post initial
margin on non-cleared swaps entered into with
other dealers, and with financial end users that have
at least $8 billion, notional, in non-cleared swaps.
The final rule also requires covered swaps entities
to post and collect daily variation margin for swaps
with other swaps entities or with financial enduser counterparties, regardless of the level of swaps
exposure if the required amount of variation margin
and initial margin exceeds $500,000. For noncleared swaps with financial affiliates, an IDI swaps
dealer would be required to post and collect daily
variation margin, but only collect initial margin
from the affiliate. The final margin rule will be
phased in beginning September 2016 and applies

18

only to new swaps entered into after the applicable
compliance dates.
Also in October 2015, the agencies approved an
interim final rule, as required by Title III of the
Terrorism Risk Insurance Program Reauthorization
Act of 2015, so that the margin requirements do
not apply to non-cleared swaps that a covered swaps
entity enters into with a commercial end user, a small
financial institution with total assets of $10 billion
or less, or certain cooperatives if the counterparty
uses the swaps for hedging purposes. This exemption
parallels an exemption from a mandate in the DoddFrank Act to clear standardized swaps. The interim
final rule is effective April 1, 2016.
Capital requirements under Sections 731 and 764
have been previously incorporated in the agencies’
capital rules, with the exception of the FCA.

Liquidity and Funds Management
Rulemaking
Net Stable Funding Ratio
The net stable funding ratio (NSFR) is designed
to complement the liquidity coverage ratio (LCR),
which took effect January 1, 2015. While the LCR
focuses on having sufficient liquid asset holdings to
weather a short-term severe stress, the goal of the
NSFR is to stabilize funding over a longer horizon.
Specifically, the NSFR would require the largest banks
to maintain a stable funding profile in relation to
their on- and off-balance sheet activities, comparing
an entity’s available stable funding sources over a
one-year horizon against asset and off-balance sheet
obligations. In October 2014, the BCBS published a
final standard to implement the NSFR. Throughout
2015, the FDIC, the OCC, and the FRB devoted
substantial resources to develop an interagency notice
of proposed rulemaking (NPR) to implement the
NSFR rule, with a target of issuing the NPR by
year-end 2015. However, the agencies decided in
late 2015 to delay issuance of the NPR until 2016 to
allow additional analysis.

FEDERAL DEPOSIT INSURANCE CORPORATION

Financial Sector Assessment Program
The FDIC participated in the International Monetary
Fund’s (IMF) Financial Sector Assessment Program
(FSAP). The goal of FSAP assessments is twofold:
(1) to gauge the stability of the financial sector and
(2) to assess its potential contribution to growth and
development. To assess the stability of the financial
sector, FSAP teams examine the soundness and
resilience of the banking and other financial sectors;
conduct stress tests and analyze linkages among
financial institutions, including across borders; rate
the quality of bank, insurance, and financial market
supervision against accepted international standards;
and evaluate the ability of supervisors. In addition,
FSAPs examine the quality of the legal framework
and of financial infrastructure, such as the payments
and settlements system; identify obstacles to the
competitiveness and efficiency of the sector; and
examine its contribution to economic growth and
development. FDIC staff provided expertise and
comprehensive feedback to the IMF to support the
FSAP as it related to the FDIC’s Banking, Insurance,
and Resolution business lines. The FDIC worked
collaboratively with other U.S. financial institution
regulatory authorities throughout this review to
provide data. The results of the FSAP review were
detailed in a report published on July 7, 2015. The
report states that the banking agencies have improved
effectiveness since the 2010 FSAP assessment and
have achieved a high degree of compliance with
international banking standards, although some
recommendations for improvement were noted. The
FDIC worked with other federal banking regulators
to provide a consolidated response to IMF findings.

DEPOSIT INSURANCE
As insurer of bank and savings association deposits,
the FDIC must continually evaluate and effectively
manage how changes in the economy, the financial
markets, and the banking system affect the adequacy
and the viability of the Deposit Insurance Fund
(DIF).

Long-Term Comprehensive Fund
Management Plan
In 2010 and 2011, the FDIC developed a
comprehensive, long-term DIF management plan
designed to reduce the effects of cyclicality and
achieve moderate, steady assessment rates throughout
economic and credit cycles, while also maintaining
a positive fund balance, even during a banking
crisis. That plan complements the Restoration
Plan, originally adopted in 2008 and subsequently
revised, which is designed to ensure that the reserve
ratio (the ratio of the fund balance to estimated
insured deposits) reaches 1.35 percent by September
30, 2020, as required by the Dodd-Frank Act. (As
discussed in the Minimum Reserve Ratio section below,
the Act also requires that the FDIC offset the effect
on institutions with less than $10 billion in assets
of increasing the reserve ratio from 1.15 percent to
1.35 percent.) These plans include a reduction in
assessment rates that the FDIC Board of Directors
(FDIC Board) adopted to become effective once the
reserve ratio reaches 1.15 percent.
Under the long-term DIF management plan, to
increase the probability that the fund reserve ratio will
reach a level sufficient to withstand a future crisis, the
FDIC Board has set the Designated Reserve Ratio
(DRR) of the DIF at 2.0 percent. The FDIC views
the 2.0 percent DRR as a long-term goal and the
minimum level needed to withstand future crises of
the magnitude of past crises. Under provisions of the
Federal Deposit Insurance Act (FDI Act) that require
the FDIC Board to set the DRR for the DIF annually,
the FDIC Board voted in October 2015 to maintain
the 2.0 percent DRR for 2016—the ratio that has
been in effect every year since 2011.
Also as part of the long-term DIF management plan,
the FDIC has suspended dividends indefinitely when
the fund reserve ratio exceeds 1.5 percent. Instead,
the plan prescribes progressively lower assessment
rates that will become effective when the reserve ratio
exceeds 2.0 percent and 2.5 percent. These lower
assessment rates serve much the same function as
dividends, but provide more stable and predictable
effective assessment rates over time.

MANAGEMENT'S DISCUSSION AND ANALYSIS

19

State of the Deposit Insurance Fund
Estimated losses to the DIF from bank failures that
occurred in 2015 totaled $829 million.  The fund
balance continued to grow through 2015, as it has
every quarter after the end of 2009, for a total of 24
consecutive quarters. Lower than estimated losses
for bank failures together with assessment revenue
contributed to the increase in the fund balance in
2015. The fund reserve ratio rose to 1.09 percent at
September 30, 2015, from 0.88 percent a year earlier.
Minimum Reserve Ratio
In October 2015, the FDIC approved an NPR that
would implement section 334 of the Dodd-Frank Act,
which increases the minimum reserve ratio from 1.15
percent to 1.35 percent, requires that the reserve ratio
reach that level by September 30, 2020, and mandates
that the FDIC “offset the effect of (the increase in
the minimum reserve ratio from 1.15 percent to 1.35
percent) on IDIs with total consolidated assets of less
than $10 billion.”
To implement these requirements, the proposed rule
would impose surcharges on the quarterly assessments
of IDIs with total consolidated assets of $10 billion
or more. The surcharges would begin the calendar
quarter after the reserve ratio of the DIF first reaches
or exceeds 1.15 percent—the same time that lower
regular quarterly deposit insurance assessment
(regular assessment) rates take effect under current
regulations—or the quarter in which a final rule takes
effect, whichever occurs later, and would continue
through the quarter that the reserve ratio first reaches
or exceeds 1.35 percent. In general, the surcharge
would equal an annual rate of 4.5 basis points applied
to the institution’s regular quarterly deposit insurance
assessment base, after making certain adjustments
specifically for the surcharge. The FDIC expects that
eight quarterly surcharges would be needed for the
reserve ratio to reach 1.35 percent.
If, contrary to the FDIC’s expectations, the reserve
ratio does not reach 1.35 percent by December 31,

20

2018 (but has reached at least 1.15 percent), the NPR
would impose a shortfall assessment on IDIs with
total consolidated assets of $10 billion or more on
March 31, 2019.
Because the Dodd-Frank Act requires that the FDIC
offset the effect of the increase in the reserve ratio
from 1.15 percent to 1.35 percent on IDIs with total
consolidated assets of less than $10 billion, the NPR
would provide assessment credits to these institutions
for the portion of their regular assessments that
contribute to growth in the reserve ratio between
1.15 percent and 1.35 percent.
Deposit Insurance Assessment System
In June 2015, the FDIC approved an NPR to
refine the deposit insurance assessment system for
established small banks (generally, those with less than
$10 billion in total assets that have been federally
insured for at least five years). In January 2016, the
FDIC approved a second NPR that would revise
parts of the proposal adopted by the FDIC in June
2015. The primary purpose of these NPRs is to
improve the risk-based deposit insurance assessment
system applicable to established small banks to more
accurately reflect risk. The NPRs would incorporate
newer data from the recent financial crisis and base
assessment rates for all established small banks on a
statistical model that estimates a bank’s probability
of failure within three years. The NPRs propose that
the revisions would go into effect the quarter after the
reserve ratio of the DIF reaches 1.15 percent (or the
first quarter after a final rule is adopted and the rule
can take effect, whichever is later). The NPRs would
maintain the range of assessment rates that will apply
once the DIF reserve ratio reaches 1.15 percent, 2
percent, and 2.5 percent, and would be implemented
in a manner such that aggregate assessment revenue
collected from established small banks under the
NPRs would be approximately the same as would
be collected under the current small bank pricing
method for calculating assessments after the reserve
ratio reaches 1.15 percent.

FEDERAL DEPOSIT INSURANCE CORPORATION

ACTIVITIES RELATED TO
SYSTEMICALLY IMPORTANT
FINANCIAL INSTITUTIONS
Complex Financial Institutions Program
The FDIC is committed to addressing the unique
challenges associated with the supervision, insurance,
and potential resolution of large and complex financial
institutions. The FDIC’s ability to analyze and
respond to risks in these institutions is particularly
important, as they comprise a significant share of
banking industry assets and deposits. The FDIC’s
programs related to complex financial institutions
provide for a consistent approach to large bank
supervision nationwide, allow for the identification
and analysis of industry-wide and institution-specific
risks and emerging issues, and enable a quick response
to these risks. Given the concentration of risk in these
institutions, the FDIC has expanded its activities at
the nation’s largest and most complex institutions
through additional and enhanced on-site and offsite monitoring and supervision as well as close
coordination with other federal agencies.
The Dodd-Frank Act expanded the FDIC’s
responsibilities pertaining to systemically important
financial institutions (SIFIs) and non-bank financial
companies designated by the Financial Stability
Oversight Council (FSOC). With regard to the
largest, most complex SIFIs, the FDIC’s Complex
Financial Institutions (CFI) program activities include
ongoing risk monitoring, backup supervision of their
related IDIs, and evaluation of required resolution
plans. CFI program activities related to FSOCdesignated non-bank companies also include ongoing
risk monitoring and evaluation of required resolution
plans. In addition, the CFI program performs other
analyses that support the FDIC’s role as an FSOC
member.

Risk Monitoring Activities for Systemically
Important Financial Institutions
The FDIC monitors risks related to SIFIs at both
the individual company level and industry wide to
inform supervisory attention and response, policy
and guidance considerations, and resolution planning
efforts. To do this, the FDIC analyzes each company’s
risk profile, governance and risk management
capabilities, structure and interdependencies, business
operation and activities, management information
system capabilities, and recovery and resolution
capabilities.
The FDIC continues to work closely with other
federal regulators to analyze institution-specific and
industry-wide conditions and trends, emerging risks
and outliers, risk management and the potential
risk posed to financial stability by SIFIs and nonbank financial companies. In 2015, FDIC staff
participated in 70 examinations with the FRB and
OCC, including, but not limited to, engagement
in Comprehensive Capital Analysis and Reviews
(CCAR)/Dodd-Frank Act Stress Testing (DFAST),
Comprehensive Liquidity Analysis and Reviews
(CLAR), and the Shared National Credit (SNC)
Reviews. Additionally, the FDIC added resources
with quantitative modeling expertise, which
supported many of the aforementioned efforts and
additional activities that included Basel qualification
reviews, quantitative model reviews, model validation
reviews, and internal training. Also, in 2015,
the FDIC participated in the FRB’s Supervisory
Assessment of Recovery and Resolution Preparedness
program in an effort to assess firms’ management
information system capabilities related to recovery
and resolution. Lastly, the FDIC collaborated
with the FRB on Dodd-Frank Act Title I resolution
plan assessments.
To support risk monitoring that informs supervisory
and resolution planning efforts, the FDIC developed
systems and reports that make extensive use of

MANAGEMENT'S DISCUSSION AND ANALYSIS

21

structured and unstructured data. SIFI monitoring
reports are prepared on a routine and ad-hoc basis and
cover a variety of aspects that include risk component,
business line and activity, market trends, and product
analysis. Additionally, the FDIC has implemented
and continues to expand upon various systems,
including the Systemic Monitoring System (SMS).
The SMS provides an individual risk profile and
assessment for each SIFI by evaluating the level and
change in metrics that serve as important barometers
of overall risk. The SMS supports the identification
of emerging risks within individual firms and the
prioritization of supervisory and monitoring activities.
The SMS also serves as an early warning system of
financial vulnerability by gauging a firm’s proximity
and speed to resolution event. Information from
FDIC-prepared reports and systems are used to
prioritize activities relating to SIFIs and coordinate
and communicate with the FRB and OCC.
The FDIC also conducted semi-annual “Day of Risk”
meetings to present, discuss, and prioritize the review
of emerging risks. For each major risk, executive
management discussed the nature of the risk,
exposures of SIFIs, and planned supervisory efforts.

Backup Supervision Activities for IDIs of
Systemically Important Financial Institutions
Risk monitoring is enhanced by the FDIC’s backup
supervision activities. In the FDIC’s backup
supervisory role, as outlined in Sections 8 and 10 of
the FDI Act, the FDIC has expanded resources and
developed and implemented policies and procedures
to guide backup supervisory activities. These activities
include performing analyses of industry conditions
and trends, insurance pricing support, participating
in supervisory activities with other regulatory
agencies, and exercising examination and enforcement
authorities when necessary. At institutions where
the FDIC is not the primary federal regulator (PFR),
staff works closely with other financial institution
regulatory authorities to identify emerging risk and
assess the overall risk profile of large and complex
institutions. The FDIC, the FRB, and the OCC
operate under a Memorandum of Understanding

22

(MOU) that establishes guidelines for coordination
and cooperation to carry out their respective
responsibilities, including the FDIC’s role as insurer
and supervisor. Under this agreement, the FDIC has
assigned dedicated staff to systemically important
and large, complex regional banking organizations to
enhance risk identification capabilities and facilitate
the communication of supervisory information.
These individuals work closely with PFR staff in
the ongoing monitoring of risk at their assigned
institutions.

Title I Resolution Plans
The Dodd-Frank Act requires that certain large
banking organizations and nonbank financial
companies designated by the FSOC for supervision
by the FRB periodically submit resolution plans to
the FRB and the FDIC. Each Title I resolution plan,
commonly known as a living will, must describe the
company’s strategy for rapid and orderly resolution
in the event of material financial distress or failure
of the company. Twelve large and complex banking
organizations must file resolution plans in July and
the remaining firms file plans in December.
July Filers
The 12 firms filing in July are Bank of America
Corporation, Bank of New York Mellon Corporation,
Barclays PLC, Citigroup Inc., Credit Suisse Group
AG, Deutsche Bank AG, Goldman Sachs Group, Inc.,
JPMorgan Chase & Co., Morgan Stanley, State Street
Corporation, UBS AG, and Wells Fargo & Company.
As a follow-up to the specific feedback the FRB
and the FDIC provided to these firms in August
2014, the agencies initiated measures to improve
communication with the firms regarding expectations
for the July 1, 2015, resolution plan submissions.
In fourth quarter 2014, the agencies provided the
12 firms with the opportunity to submit a preview
of the key aspects of their planned July 2015 Title I
resolution plan submissions.
Almost all firms submitted preview documents to
the agencies by year-end 2014, and the agencies

FEDERAL DEPOSIT INSURANCE CORPORATION

provided written feedback on the documents to the
firms in February. In addition, the agencies held a
joint meeting with the firms on February 25, 2015,
to answer questions and communicate industrywide issues regarding resolution plans. The agencies’
staff also met with the firms individually, on several
occasions, during the first and second quarters of
2015 to discuss their upcoming submissions. The
FDIC and the FRB are now reviewing the 2015 plan
submissions from the 12 firms.

Nonbank Firms

By December 31, 2014, the December filers had
submitted their second resolution plans. In July
2015, after reviewing those plans, the FDIC and
the FRB provided the 119 firms with guidance,
clarification, and direction for their 2015 submissions
based on the relative size and scope of each firm’s
U.S. operations. Plan requirements were tiered, with
less complex firms filing more streamlined plans as
follows:

On July 28, 2015, the FRB and the FDIC provided
feedback by joint letter to American International
Group, Inc. (AIG), General Electric Capital
Corporation, Inc. (GECC), and Prudential, Inc.,
regarding their initial resolution plans and guidance
for their year-end 2015 filings. The agencies tailored
their feedback to account for each company’s unique
business, structure, and operations. In addition to the
specific guidance given to each company, the letters
included some common themes that the firms should
address. Those areas included the need for more
detailed information on, and analysis of, obstacles
to resolvability, including global cooperation,
interconnectedness, and adequate funding and
liquidity. Further, the agencies instructed the firms
to describe in their resolution plans the progress they
are making, and the steps remaining, to be more
resolvable. Finally, the agencies directed the firms
to strengthen the public portions of the firms’ 2015
resolution plans.

•	 Twenty-nine of the more complex firms were
required to file either full or tailored resolution
plans that take into account guidance identified by
the agencies.

The three nonbank firms submitted the second
version of their annual resolution plans in December
2015. The FRB and the FDIC are currently
reviewing those plans.

December Filers

•	 Ninety firms with limited U.S. operations were
allowed to file plans that focus on material changes
to their 2014 resolution plans; actions taken to
strengthen the effectiveness of those plans; and,
where applicable, actions to ensure any subsidiary
insured depository institution is adequately
protected from the risk arising from the activities of
nonbank affiliates of the firm.
In July 2015, the agencies also released an updated
tailored resolution plan template for the December
filers’ plans. The optional template, which is intended
to facilitate the preparation of tailored resolution
plans, focuses on the nonbanking operations of
the company and on the interconnections and
interdependencies between its nonbanking and
banking operations.
By December 31, 2015, 122 December filers had
submitted plans to the agencies. The FDIC and the
FRB are reviewing those plans.

On March 26, 2015, the agencies permanently
adjusted the annual resolution plan filing deadline
for nonbank financial companies—AIG, GECC,
MetLife, Inc., and Prudential, Inc.—from July 1
to December 31, beginning in 2016. The agencies
had temporarily extended the 2015 resolution plan
deadlines for the nonbank firms to December 31st.
In addition, MetLife was designated as systemically
important on December 18, 2014, and will submit its
first resolution plan by December 31, 2016.

Insured Depository Institution
Resolution Plans
Section 360.10 of the FDIC Rules and Regulations
requires all IDIs with assets greater than $50 billion
to submit resolution plans to the FDIC (IDI Rule).
The IDI Rule requires each IDI meeting the criteria to
provide a resolution plan that should allow the FDIC

MANAGEMENT'S DISCUSSION AND ANALYSIS

23

as receiver to resolve the IDI in an orderly manner
that enables prompt access of insured deposits,
maximizes the return from the failed IDI’s assets, and
minimizes losses realized by creditors and the DIF.
Based upon a review of IDI plans submitted before
and during 2014, the FDIC issued guidance in
December 2014 for resolution plans required by the
IDI Rule. Under the guidance, a covered IDI must
provide a fully developed discussion and analysis of a
range of realistic resolution strategies. To assist IDIs
in writing their plans, the guidance includes direction
regarding the elements that should be discussed in
a fully developed resolution strategy and the cost
analysis, clarification regarding assumptions made
in the plan, and a list of significant obstacles to an
orderly and least costly resolution that IDIs should
address. The guidance applies to the resolution
plans of 36 IDIs covered by the IDI Rule, as well as
any new IDI meeting the threshold, commencing
with the 2015 resolution plan submissions. The
FDIC is reviewing the 10 IDI resolution plans that
were submitted by September 1, 2015, and the 26
remaining IDI resolution plans that were submitted
by December 31, 2015. The FDIC is conducting a
review focused on the insolvency scenario, strategy
and funding, readiness, and corporate governance.

Title II Resolution Strategy Development
Under the Dodd-Frank Act, failed or failing financial
companies are expected to file for reorganization or
liquidation under the U.S. Bankruptcy Code, just as
any failed or failing nonfinancial company would file.
If resolution under the Bankruptcy Code would result
in serious adverse effects to U.S. financial stability, the
Orderly Liquidation Authority (OLA) set out in Title
II of the Dodd-Frank Act provides a backup authority
to the bankruptcy process. There are strict parameters
on its use, however, and it can only be invoked
under a statutorily prescribed recommendation and
determination process, coupled with an expedited
judicial review process.

24

The FDIC has been developing strategies, including
an approach referred to as “Single Point of Entry,” to
carry out its orderly liquidation authorities. Firmspecific resolution strategies for each SIFI continue to
be developed and refined. In addition, preliminary
work has begun with respect to developing resolution
strategies for the nonbank firms and systemically
important financial market utilities, particularly
central counterparties (CCP).
To evaluate the requirements for carrying out a
Title II resolution, and to identify areas of further
development, the FDIC conducted an operational
exercise in 2015. This exercise included senior FDIC
managers and staff representing areas within the
organization that would be responsible for executing
a resolution under Title II of the Dodd-Frank Act.
Participants discussed the primary actions that would
occur during the initial appointment of the FDIC
as receiver of a SIFI and the stabilization phase
immediately following appointment. The exercise
validated the current Title II planning efforts and
enhanced organizational cooperation and awareness,
in addition to identifying areas for further work.

Cross-Border Efforts
Advance planning and cross-border coordination
for the resolution of global-SIFIs (G-SIFIs) will be
essential to minimizing disruptions to global financial
markets. Recognizing that G-SIFIs create complex
international legal and operational concerns, the
FDIC continues to work with foreign regulators
to establish frameworks for effective cross-border
cooperation.
During 2015, the FDIC continued to coordinate with
representatives from European authorities to discuss
issues of mutual interest, including the resolution of
European G-SIFIs and harmonization of receivership
actions. The FDIC and the European Commission
(EC) continued their engagement through the
joint Working Group, which is composed of
FDIC and EC senior executives who meet to
focus on both resolution and deposit insurance issues.

FEDERAL DEPOSIT INSURANCE CORPORATION

The Working Group meets twice a year with other
interim interchanges, including the exchanging of staff
members. Discussions were held in 2015 concerning
cross-border bank resolution and CCP resolution,
among other topics. The FDIC also continued its
deep cooperation with the Single Resolution Board
on technical aspects of resolution, including through
staff level exchanges.
The FDIC continued its relationships with other
jurisdictions that regulate G-SIFIs, including the
United Kingdom (U.K.), Switzerland, Germany,
France, and Japan. In 2015, the FDIC had significant
principal and staff-level engagements with these
countries to discuss cross-border issues and potential
impediments that would affect the resolution of a
G-SIFI. This included hosting a delegation from
Japan in February to discuss cross-border issues related
to resolution in both respective jurisdictions. Similar
staff-level engagements took place with the U.K.
and Switzerland, such as the U.K.-U.S. Financial
Market Infrastructure working group, which meets
to discuss resolvability considerations and develop
common approaches concerning financial market
infrastructures in the United Kingdom and the
United States. This work will continue in 2016 with
plans to host tabletop exercises with regulatory staff
from certain of these jurisdictions.

Systemic Resolution Advisory Committee
In 2011, the FDIC Board approved the creation
of the Systemic Resolution Advisory Committee
(SRAC). The SRAC provides important advice to the
FDIC regarding systemic resolutions and advises the
FDIC on a variety of issues, including the following:
•	 The effects on financial stability and economic
conditions resulting from the failure of a SIFI.
•	 The ways in which specific resolution strategies
would affect stakeholders and their customers.
•	 The tools available to the FDIC to wind down the
operations of a failed organization.
•	 The tools needed to assist in cross-border relations
with foreign regulators and governments when a
systemic company has international operations.

SRAC members (from left) Paul Volcker, Simon Johnson, and
Anat Admati confer with Chairman Gruenberg during a break
between panel discussions at the December 2014 meeting.

Members of the SRAC have a wide range of
experience, including managing complex firms;
administering bankruptcies; and working in the legal
system, accounting field, and academia. The last
meeting of the SRAC was held in December 2014.
The SRAC discussed, among other topics, resolution
plans and bankruptcy, resolution plan transparency,
international developments, International Swaps
and Derivatives Association protocol, and orderly
liquidation updates. In 2015, the charter of the
SRAC was renewed. The next meeting is scheduled to
be held in 2016.

Financial Stability Oversight Council
The FSOC was created by the Dodd-Frank Act in
July 2010 to promote the financial stability of the
United States. It is composed of ten voting members,
including the Chairperson of the FDIC, and five nonvoting members.
The FSOC’s responsibilities include the following:
•	 Identifying risks to financial stability, responding
to emerging threats in the financial system, and
promoting market discipline.
•	 Identifying and assessing threats that institutions
may pose to financial stability and, if appropriate,
designating a nonbank financial company for
supervision by the FRB subject to heightened
prudential standards.
•	 Designating financial market utilities and payment,
clearing, or settlement activities that are, or are
likely to become, systemically important.

MANAGEMENT'S DISCUSSION AND ANALYSIS

25

•	 Facilitating regulatory coordination and
information-sharing regarding policy development,
rulemaking, supervisory information, and reporting
requirements.
•	 Monitoring domestic and international financial
regulatory proposals and advising Congress and
making recommendations to enhance the integrity,
efficiency, competitiveness, and stability of U.S.
financial markets.
•	 Producing annual reports describing, among
other things, the Council’s activities and potential
emerging threats to financial stability.
In 2015, the FSOC issued its fifth annual report.
Generally, at each of its meetings, the FSOC discusses
various risk issues. In 2015, the FSOC meetings
addressed, among other topics, U.S. fiscal issues,
interest rate risk, credit risk, cybersecurity, and
nonbank financial company designations.

SUPERVISION
Supervision and consumer protection are cornerstones
of the FDIC’s efforts to ensure the stability of, and
public confidence in, the nation’s financial system.
The FDIC’s supervision program promotes the
safety and soundness of FDIC-supervised IDIs,
protects consumers’ rights, and promotes community
investment initiatives.

Examination Program
The FDIC’s strong bank examination program is the
core of its supervisory program. As of December 31,
2015, the FDIC was the primary federal regulator
(PFR) for 4,008 FDIC-insured, state-chartered
institutions that were not members of the Federal
Reserve System [generally referred to as “state
nonmember” (SNM) institutions]. Through risk
management (safety and soundness), consumer
compliance and the Community Reinvestment
Act (CRA), and other specialty examinations, the
FDIC assesses an institution’s operating condition,

management practices and policies, and compliance
with applicable laws and regulations.
As of December 31, 2015, the FDIC conducted
1,871 statutorily required risk management
examinations, including a review of Bank Secrecy
Act (BSA) compliance, and all required followup examinations for FDIC-supervised problem
institutions, within prescribed time frames. The
FDIC also conducted 1,347 statutorily required CRA/
compliance examinations (859 joint CRA/compliance
examinations, 478 compliance-only examinations, and
10 CRA-only examinations). In addition, the FDIC
performed 4,157 specialty examinations.
The table on page 27 compares the number of
examinations, by type, conducted from 2013
through 2015.
Risk Management
All risk management examinations have been
conducted in accordance with statutorily established
timeframes. As of September 30, 2015, 203 insured
institutions with total assets of $51.1 billion were
designated as problem institutions for safety and
soundness purposes (defined as those institutions
having a composite CAMELS1 rating of 4 or 5),
compared to the 329 problem institutions with total
assets of $102.3 billion on September 30, 2014. This
is a 38 percent decline in the number of problem
institutions and a 50 percent decrease in problem
institution assets. For the twelve months ending
September 30, 2015, 142 institutions with aggregate
assets of $51.8 billion were removed from the list of
problem financial institutions, while 16 institutions
with aggregate assets of $3.0 billion were added to the
list. The FDIC is the PFR for 133 of the 203 problem
institutions, with total assets of $24.5 billion.
In 2015, the FDIC’s Division of Risk Management
Supervision initiated 233 formal enforcement actions
and 165 informal enforcement actions. Enforcement
actions against institutions included, but were not
limited to, 28 actions under Section 8(b) of the FDI

The CAMELS composite rating represents the adequacy of Capital, the quality of Assets, the capability of Management, the quality
and level of Earnings, the adequacy of Liquidity, and the Sensitivity to market risk, and ranges from “1” (strongest) to “5” (weakest).

1

26

FEDERAL DEPOSIT INSURANCE CORPORATION

F D I C E X A M I N AT I O N S 2013 - 2015
2015

Act (27 consent orders and 1 notice of charges), 3
civil money penalty (CMP) actions, and 165 MOUs.
Of these enforcement actions against institutions, 17
consent orders, 2 CMPs, and 22 MOUs were based,
in whole or in part, on apparent violations of BSA and
anti-money laundering (AML) laws and regulations.
In addition, enforcement actions were also initiated
against individuals. These actions included, but were
not limited to, 88 removal and prohibition actions
under Section 8(e) of the FDI Act (84 consent orders
and 4 notices of intention to remove/prohibit),
4 actions under Section 8(b) of the FDI Act (2
restitution orders and 2 notices of charges), and 24
CMPs (15 orders to pay and 9 notices of assessment).
The FDIC has heightened its focus on forward-looking
supervision aimed at ensuring that risks are mitigated
before they lead to financial deterioration. In 2015,
the FDIC concluded a two-year effort to train risk
management supervision staff on forward-looking
approaches to supervising institutions.

2013

1,665

1,881

2,077

206

206

203

0

0

4

0

0

0

0

0

0

1,871

2,087

2,284

859

1,019

1,201

478

376

371

10

11

4

1,347

1,406

1,576

365

428

406

1,886

2,113

2,323

1,906

2,126

2,328

4,157

4,667

5,057

7,375

Risk Management (Safety and Soundness):
State Nonmember Banks
Savings Banks
State Member Banks
Savings Association
National Banks
Subtotal–Risk Management Examinations
CRA/Compliance Examinations:
Compliance/Community Reinvestment Act
Compliance-only
CRA-only
Subtotal–CRA/Compliance Examinations
Specialty Examinations:
Trust Departments
Information Technology and Operations
Bank Secrecy Act
Subtotal–Specialty Examinations
Total

2014

8,160

8,917

Compliance
As of December 31, 2015, 51 insured SNM
institutions, about 1 percent of all supervised
institutions, with total assets of $61 billion, were
problem institutions for compliance, CRA, or
both. All of the problem institutions for compliance
were rated “4” for compliance purposes, with none
rated “5.” For CRA purposes, the majority were
rated “Needs to Improve,” and only five were rated
“Substantial Noncompliance.” As of December
31, 2015, all follow-up examinations for problem
institutions were performed on schedule.
During 2015, the FDIC conducted all required
compliance and CRA examinations and, when
violations were identified, completed follow-up visits
and implemented appropriate enforcement actions in
accordance with FDIC policy. In completing these
activities, the FDIC substantially met its internally
established time standards for the issuance of final
examination reports and enforcement actions.

MANAGEMENT'S DISCUSSION AND ANALYSIS

27

Overall, banks demonstrated strong consumer
compliance programs. The most significant consumer
protection issue that emerged from the 2015
compliance examinations involved banks’ failure
to adequately monitor third-party vendors. For
example, the FDIC found violations involving unfair
or deceptive acts or practices, relating to issues such
as failure to disclose material information about
product features and limitations, deceptive marketing
and sales practices, and misrepresentations about the
costs of products. As a result, the FDIC issued orders
requiring consumer restitution and the payment of
civil money penalties (CMPs).
During 2015, the FDIC initiated 35 formal
enforcement actions and 28 informal enforcement
actions to address compliance concerns (see chart
on page 138). This included 10 consent orders
(including one that also addressed safety and
soundness concerns), 7 restitution orders, 18 CMPs,
and 28 MOUs. Restitution orders are formal actions
that require institutions to pay restitution in the form
of consumer refunds for different violations of law. In
2015, these restitution orders required institutions
to refund approximately $99.6 million to consumers,
primarily related to unfair and deceptive practices
by the institutions. The CMPs totaled just over
$12.8 million.

Large and Complex Financial Institutions
The FDIC established the Large Bank Supervision
Branch within the Division of Risk Management
Supervision in response to the growing complexity
of large banking organizations. This branch is
responsible for both supervisory oversight and
ongoing monitoring, and it supports the insurance
and resolutions business lines. For SNM banks over
$10 billion, the FDIC generally applies a continuous
examination program, whereby dedicated staff
conduct ongoing onsite supervisory examinations
and institution monitoring. At institutions where the
FDIC is not the PFR, staff works closely with other
financial institution regulatory authorities to identify
emerging risks and assess the overall risk profile of
large and complex institutions.

28

The Large Insured Depository Institution (LIDI)
Program remains the primary instrument for off-site
monitoring of IDIs with $10 billion or more in total
assets. The LIDI Program provides a comprehensive
process to standardize data capture and reporting
through nationwide quantitative and qualitative risk
analysis of large and complex institutions. In 2015,
the LIDI Program covered 108 institutions with total
assets of $12.8 trillion.  The comprehensive LIDI
Program is essential to effective large bank supervision
because it captures information on the risks and uses
that information to best deploy resources to highrisk areas, determine the need for supervisory action,
and support insurance assessments and resolution
planning.
The Shared National Credit (SNC) Program is an
interagency initiative administered jointly by the
FDIC, the FRB, and the OCC to ensure consistency
in the regulatory review of large, syndicated credits, as
well as identify risk in this market, which comprises
a large volume of domestic commercial lending. In
2015, outstanding credit commitments identified in
the SNC Program totaled $3.9 trillion. The FDIC,
the FRB, and the OCC issued a joint press release
detailing the results of the review in November 2015.
The interagency SNC review indicated credit risk
in the portfolio remains high, despite a relatively
favorable economic environment. The agencies noted
a significant increase in leveraged lending volumes and
continued loose underwriting, as evidenced by weak
capital structures and provisions that limit the lender’s
ability to manage risk. While some improvement in
underwriting practices was evident in the second half
of the year, weakness in leveraged lending transactions
drove an increase in classified commitments. Also,
in 2015 the agencies agreed to change the program
timing from an annual review to a semi-annual
review. A pilot was conducted in September 2015,
and the 2016 reviews will be completed in February
and August.
In 2015, the FDIC continued with various initiatives
to expand knowledge and expertise related to large
bank supervisory matters. For example, a long-term
program established in 2014 to expand on-the-

FEDERAL DEPOSIT INSURANCE CORPORATION

job training and provide mentoring of select staff
regarding examination processes and risk analysis
at large banks continues as a mechanism to develop
expertise. The FDIC is also focused on hiring and
developing additional staff with quantitative skill sets
to facilitate the evaluation of complex modeling used
by the largest banks. In addition, several training
initiatives were developed and implemented in
2015 that focused on large bank supervisory risks,
structures, vulnerabilities, and processes.

Bank Secrecy Act/Anti-Money Laundering
The FDIC, with support from the FRB, OCC, and
NCUA, facilitated the Spanish translation of the
FFIEC BSA/AML Examination Manual (BSA/AML
Manual). The Spanish version of the BSA/AML
Manual was made public on the FFIEC InfoBase
in October 2015. The BSA/AML Manual provides
current guidance on risk-based policies, procedures,
and processes for banking organizations to comply
with the BSA and safeguard operations from money
laundering and terrorist financing.
In July 2015, the FDIC hosted an Office of Foreign
Assets Control (OFAC) representative who provided
training to 30 examiners on recent changes to existing
U.S. economic sanctions programs, as well as OFAC
compliance expectations and enforcement case
studies. The FDIC also participated in the Financial
Action Task Force’s mutual evaluation of the United
States’ system for preventing money laundering abuse
of the financial system.

Information Technology, Cyber Fraud,
and Financial Crimes
To highlight the importance and rapidly evolving
nature of cybersecurity and information technologyrelated risks, a new Operational Risk Branch was
created within the Division of Risk Management
Supervision. The new branch has responsibility for
information technology policy and examinations
as well as cybersecurity and critical infrastructure
protection initiatives.

To address the specialized nature of technologyand operations-related supervision, cyber risks, and
controls in the banking industry, the FDIC routinely
conducts information technology (IT) and operations
examinations at FDIC-supervised institutions. The
FDIC and other banking agencies also conduct IT
and operations examinations of technology service
providers (TSPs), which support financial institutions.
The result of an IT and operations examination is
a rating under the FFIEC Uniform Rating System
for Information Technology, which is incorporated
into the Management component of the Safety and
Soundness rating and the Safety and Soundness
Report of Examination.
In 2015, the FDIC conducted 1,886 IT and
operations examinations at financial institutions and
TSPs. Further, as part of its ongoing supervision
process, the FDIC monitors significant events, such
as data breaches and natural disasters that may affect
financial institution operations or customers.
In addition to the FDIC’s operations and technology
examination program, the FDIC regularly monitors
cybersecurity issues in the banking industry through
on-site examinations, regulatory reports, and
intelligence reports. The FDIC works with the
Financial and Banking Information Infrastructure
Committee, the Financial Services Sector
Coordinating Council for Critical Infrastructure
Protection, Homeland Security, the Financial Services
Information Sharing and Analysis Center (FSISAC), other regulatory agencies, law enforcement,
and others to share information regarding emerging
issues and coordinate responses. Further, the FDIC
actively participates in the FFIEC’s Cybersecurity and
Critical Infrastructure Working Group (CCIWG).
The CCIWG serves as a forum to address policy
related to cybersecurity and critical infrastructure,
enables members to communicate and collaborate
on activities to support and strengthen the resilience
of the financial services sector, and provides input to
FFIEC principal members regarding cybersecurity
matters.

MANAGEMENT'S DISCUSSION AND ANALYSIS

29

The FDIC’s major accomplishments during 2015 to
promote IT security, assess risk management practices,
and combat cyber fraud and other financial crimes
included the following:
•	 Provided nationwide cybersecurity awareness
training for financial institution management
and all risk management examination staff at
all six FDIC regional office locations and by
teleconference. The training focused on the need
for banks to establish a culture of managerial and
directorate collaboration to address cybersecurity
risks, particularly given the increasing volume and
sophistication of cyber attacks.
•	 Produced a video on cybersecurity awareness as part
of the FDIC’s Community Banking Initiative. The
video provides useful information to bank directors,
officers, and employees on cybersecurity.
•	 Hosted a nationwide teleconference to discuss
the FDIC’s regulatory expectations regarding
cybersecurity preparedness. During the
teleconference, industry participants submitted and
asked questions. The call was held in October 2015
in support of National Cybersecurity Awareness
Month.
•	 Added three new scenarios to the FDIC’s
Cyber Challenge simulation exercise.  The
exercise encourages community banks to discuss
operational risk issues and the potential impact of
information technology disruptions.  The exercise
now contains seven videos that depict various
operational disruptions and materials to facilitate
discussion about how the bank would respond to
the disruptions.  Lists of reference materials where
banks can obtain additional information are also
included.
•	 Published three FDIC Consumer News articles:
“Computer Security Tips for Bank Customers: A
Basic Checklist,” “Mobile Banking and Payments:
New Uses for Phones...and Even Watches,” and
“Beware of Thieves Who Target Loan and Credit
Card Shoppers.”
•	 Conducted training for all FDIC IT Examiners that
addressed technology and operational issues facing
the federal financial regulatory agencies.

30

•	 Assisted financial institutions in identifying and
shutting down “phishing” websites that attempt
to fraudulently obtain and use an individual’s
confidential personal or financial information.
•	 Hired 30 additional IT Examination Analysts
to enhance the technical expertise of the IT
supervisory workforce in areas of forensic analysis,
network systems, payment systems, applications
development, and business continuity planning/
disaster recovery.
Major interagency accomplishments as a member of
the FFIEC included the following:
•	 Published a Cybersecurity Assessment Tool to help
financial institutions identify risks and determine
their cybersecurity preparedness. The Assessment
Tool provides a repeatable and measurable
process for financial institutions to measure their
cybersecurity preparedness over time.
•	 Collaborated with the FRB and OCC to develop
a Cybersecurity Evaluation Tool to be used during
TSP examinations.
•	 Published FFIEC statements on Cyber Attacks
Compromising Credentials and Destructive
Malware.
•	 Issued an appendix to the Business Continuity
Planning (BCP) booklet of the FFIEC Information
Technology Examination Handbook entitled
“Strengthening the Resilience of Outsourced
Technology Services.” The booklet is part of the
IT Examination Handbook series. The appendix
highlights and strengthens the BCP Booklet in four
specific areas: Third-Party Management, Third-Party
Capacity, Testing with Technology Service Providers,
and Cyber Resilience.
•	 Revised the Management booklet of the FFIEC IT
Examination Handbook to incorporate cybersecurity
and cyber resiliency concepts as part of information
security.
•	 Improved information sharing on identified
technology risks among the IT examination
workforces of the FFIEC member agencies through
discussions at the March 2015 annual Supervisory
Strategy meeting.

FEDERAL DEPOSIT INSURANCE CORPORATION

Minority Depository Institution Activities
The preservation of minority depository institutions
(MDIs) remains a high priority for the FDIC.
In 2015, the FDIC continued to advocate for
MDI and Community Development Financial
Institution (CDFI) industry-led strategies for
success. The institutions were encouraged to build
on the results of the 2013 Interagency MDI and
CDFI Bank Conference and the FDIC’s 2014 study
on MDIs entitled Minority Depository Institutions:
Structure, Performance and Social Impact. These
strategies include industry-led solutions; MDI and
CDFI bankers working together to tell their story;
collaborative approaches to partnerships to share
costs, raise capital, or pool loans; technical assistance;
and innovative use of federal programs.
In June 2015, the FDIC sponsored a roundtable
in Salt Lake City, Utah, with three trade groups
representing nearly 100 MDIs and CDFIs and
approximately 20 representatives of potential bank
partners to discuss CRA partnerships. The FDIC
provided an overview of five CRA community
development activities related to minority and
women-owned financial institutions. The trade
groups outlined the community development needs
of their members that might be opportunities for the
banks to invest in or develop partnerships. The banks
had the opportunity to engage in dialog with the
MDI representatives. The trade groups and the banks
will continue to build upon these initial discussions
following the roundtable.
The FDIC co-sponsored with the OCC and the
FRB the 2015 Interagency MDI and CDFI Bank
Conference, held in July. Nearly 110 bankers from
72 banks attended the Celebrate 150 Years of Minority
Depository Institutions: Changes, Challenges and
Opportunities conference. The conference featured
an interactive panel with FDIC Chairman Martin
J. Gruenberg, Federal Reserve Board Governor Lael
Brainard, and Comptroller of the Currency Thomas
J. Curry. The conference encouraged interactive
discussion among those who believe MDIs and

CDFIs are uniquely positioned to create positive
change in their communities. In addition, senior
officials from federal agencies provided updates on
programs and policies that can help MDIs and CDFIs
achieve goals.
The FDIC also continues to pursue ways to improve
communication and interaction with MDIs and to
respond to the concerns of minority bankers. In
addition to active outreach with MDI trade groups,
the FDIC annually offers to arrange meetings between
regional management and each MDI’s board of
directors to discuss issues of interest. In addition, the
FDIC routinely contacts MDIs to offer return visits
and technical assistance following the conclusion of
FDIC safety and soundness, compliance, CRA, and
specialty examinations to assist bank management
in understanding and implementing examination
recommendations. These return visits, normally
conducted 90 to 120 days after the examination,
are to provide recommendations or feedback for
improving operations, not to identify new issues.
MDIs also may initiate contact with the FDIC to
request technical assistance at any time. In 2015, the
FDIC provided 101 individual technical assistance
sessions on approximately 50 risk management and
compliance topics, including the following:
•	 Accounting
•	 Bank Secrecy Act and Anti-Money Laundering
•	 Basel III Capital Rules
•	 Brokered Deposits/Waivers
•	 Capital Planning
•	 Commercial Real Estate Concentrations
•	 Community Reinvestment Act
•	 Funding and Liquidity
•	 Global Cash Flow
•	 High Volatility Commercial Real Estate
•	 Information Technology Risk Management and
Security
•	 Interest Rate Risk
•	 Loan Underwriting and Administration

MANAGEMENT'S DISCUSSION AND ANALYSIS

31

•	 Qualified Mortgage Rules
•	 Strategic Planning
•	 Third-Party Risk Management
The FDIC regional offices also held outreach,
training, and educational programs for MDIs through
conference calls and banker roundtables. In 2015,
topics of discussion for these sessions included many
of those listed above, as well as cybersecurity, vendor
management, and the FDIC’s Community Banking
Initiative, including the Technical Assistance Videos.

Economic Growth and Regulatory Paperwork
Reduction Act
The FDIC, along with the other banking regulatory
agencies, launched a cooperative, three-year effort to
review all of their regulations. This review started in
2014 and continued throughout 2015. The purpose
of the review, which is mandated by the Economic
Growth and Regulatory Paperwork Reduction Act
of 1996 (EGRPRA), is to identify and eliminate
any regulatory requirements that are outdated or
otherwise unnecessary.
To facilitate the review, the agencies categorized
their regulations into 12 separate groups. Over the
course of two years, the groups of regulations are
being published for comment, providing industry
participants, consumer and community groups, and
other interested parties an opportunity to identify
regulatory requirements they believe are no longer
needed or should be modified. The agencies are
analyzing the comments received and considering
amendments to their regulations where appropriate.
On May 14, 2015, the public comment period
closed for the regulations in the categories of
Banking Operations, Capital, and the Community
Reinvestment Act; approximately 23 comment letters
were received.
On September 3, 2015, the comment period closed
for rules relating to Consumer Protection; Directors,
Officers and Employees; and Anti-Money Laundering.
Approximately 16 comment letters were received.

32

On December 23, 2015, the agencies published the
fourth Federal Register notice requesting comment
on regulations regarding Securities, Safety and
Soundness, and Rules of Procedure as well as all
regulations the agencies have recently finalized,
including those rules that the agencies have yet to
fully implement. The comment period closes on
March 22, 2016.
As a part of the regulatory burden reduction effort,
the agencies hosted five nationwide outreach meetings
during 2015 to facilitate awareness of the EGRPRA
project and to listen to stakeholder comments and
suggestions. Each meeting featured three banker
panels covering the 12 categories of regulations and
a consumer/community group panel. The outreach
meetings were held at the Federal Reserve Banks in
Dallas, Texas; Boston, Massachusetts; Kansas City,
Missouri; and Chicago, Illinois; and at the FDIC in
Arlington, Virginia. More than 1,030 individuals
participated in the meetings in-person, by telephone,
or via webcast. The Kansas City meeting focused on
rural bank issues.
Several themes have emerged through the EGRPRA
process that could affect community banks. One
consistent item has been the discussion of whether
laws and regulations based on long-standing
thresholds should be changed.
In addition, due in part to feedback received as part
of the EGRPRA review, the FDIC and the other
FFIEC member entities are undertaking a community
bank Call Report burden-reduction initiative. The
objective of this initiative, which comprises actions
in five areas, is to streamline and simplify regulatory
reporting requirements for community banks. As
an initial step, the banking agencies, under the
auspices of the FFIEC, published proposed Call
Report revisions, including a first set of proposed
burden-reducing changes, on September 18, 2015.
The agencies are evaluating the comments on the
proposal and would begin to implement the revisions
in the third quarter of 2016. As a second action,
the banking agencies have accelerated the start of
a statutorily mandated review of the existing Call

FEDERAL DEPOSIT INSURANCE CORPORATION

Report data items, which otherwise would have
commenced in 2017. Third, the FFIEC member
entities are considering the feasibility and merits of
creating a less burdensome version of the Call Report
for small institutions. A fourth action for the FFIEC
member entities is to better understand, through
industry, the aspects of community banks’ Call Report
preparation processes that are significant sources
of reporting burden. This outreach effort included
on-site visits to nine community banks during third
quarter 2015 to learn about their reporting processes.
Finally, the FFIEC and the agencies will offer periodic
banker training by teleconferences and webinars to
explain upcoming reporting changes and provide
guidance on Call Report requirements that bankers
find challenging.
Under Section 316(b) of the Dodd-Frank Act, rules
transferred from the Office of Thrift Supervision
(OTS) to the FDIC and other successor agencies
remain in effect ‘‘until modified, terminated, set
aside, or superseded in accordance with applicable
law’’ by the relevant successor agency, by a court
of competent jurisdiction, or by operation of law.
When the FDIC republished the transferred OTS
regulations as new FDIC regulations applicable to
state savings associations, the FDIC stated in the
Federal Register notice that its staff would evaluate the
transferred OTS rules and might later recommend
incorporating the transferred OTS regulations into
other FDIC rules, amending them, or rescinding
them. This process began in 2013 and continues,
involving publication in the Federal Register of a
series of NPRs and rulemakings. In 2015, the FDIC
removed ten transferred OTS rules while making
technical amendments to related FDIC rules for
applicability to state savings associations. In addition,
the FDIC repealed two transferred OTS rules that
did not have corresponding FDIC rules and were
deemed unnecessary to retain. The rules repealed
were Possession by Conservators and Receivers for
Federal and State Savings Associations, and Electronic
Operations.

Other Rulemaking and Guidance Issued
During 2015, the FDIC issued and participated in the
issuance of other rulemaking and guidance in several
areas as described below.
Brokered Deposit Guidance
In January 2015, the FDIC issued FIL-2-2015 titled
Guidance on Identifying, Accepting, and Reporting
Brokered Deposits due to numerous questions regarding
brokered deposit determinations. This FIL provided
a series of FAQs regarding identifying, accepting, and
reporting brokered deposits. The FAQs are based on
Section 29 of the FDI Act and Section 337.6 of the
FDIC Rules and Regulations, as well as on advisory
opinions and the Study on Core Deposits and Brokered
Deposits, which the FDIC issued in July 2011. The
FDIC issued the FAQs in a plain language summary of
previously issued guidance that is conveniently located
in one place. In response to follow-up inquiries, the
FDIC hosted an industry call on April 22, 2015,
to further discuss the FIL and FAQs. Further, on
November 13, 2015, the FDIC issued an update to
the FAQs document in response to additional inquiries
and requested public comments on those FAQs. The
comment period on the updated document closed on
December 28, 2015.
Statement on Providing Banking Services
In January 2015, the FDIC issued the Statement on
Providing Banking Services (FIL-5-2015) to encourage
institutions to take a risk-based approach in assessing
individual customer relationships rather than declining
to provide banking services to entire categories of
customers, without regard to the risks presented by an
individual customer or the financial institution’s ability
to manage the risk.
Guidance on Private Student Loans with Graduated
Repayment Terms at Loan Origination
In February 2015, the FDIC, jointly with the FRB,
CFPB, NCUA, and the OCC and in conjunction with
the State Liaison Committee (SLC), issued student

MANAGEMENT'S DISCUSSION AND ANALYSIS

33

loan guidance, which provides principles that financial
institutions should consider in their policies and
procedures for originating private student loans with
graduated repayment terms. The guidance recognizes
that students leaving a higher education program
may prefer more flexibility with their payments as
they transition into the labor market. It also reminds
financial institutions that originate private student
loans with graduated repayment terms to prudently
underwrite the loans and provide disclosures that
clearly communicate the timing and the amount of
payments to facilitate a borrower’s understanding of
the loan’s terms and features.
Filing Requirements and Processing Procedures for
Changes in Control
In October 2015, the FDIC approved a final rule that
amends Part 303 of the FDIC Rules and Regulations
for filing requirements and processing procedures
for notices filed under the Change in Bank Control
Act (Notices). The final rule consolidated into one
subpart the requirements and procedures for Notices
filed with respect to state nonmember banks and state
savings associations and eliminated Part 391, subpart
E. The final rule also adopted certain practices of
related regulations of the OCC and the FRB. The
final rule clarifies the FDIC’s requirements and
procedures based on its experience interpreting and
implementing the existing regulation and is part of
the FDIC’s continuing review of its regulations under
EGRPRA.
Rescission of the Temporary Liquidity
Guarantee Program
In October 2015, the FDIC rescinded Part 370 of the
FDIC Rules and Regulations, which implemented
the Temporary Liquidity Guarantee Program
(TLGP). The TLGP was composed of two distinct
components, the Debt Guarantee Program (DGP)
and the Transaction Account Guarantee Program
(TAGP). The DGP provided a temporary FDIC
guarantee for all newly issued senior unsecured debt
issued by participating entities up to prescribed

34

limits, and the TAGP provided for the extension of
unlimited deposit insurance for noninterest-bearing
transaction accounts. Both programs had previously
expired.
Clarifying Approach to Banks Offering Products
and Services, such as Deposit Accounts and
Extensions of Credit, to Nonbank Payday Lenders
In November 2015, the FDIC issued FIL-52-2015
clarifying its approach to banks offering products and
services to nonbank payday lenders. The FIL reissued
and updated FIL-14-2005, Payday Lending Programs:
Revised Examination Guidance, and its attachment,
Revised Guidelines for Payday Lending. The guidance
was revised to make clear that it applies only to
banks making payday loans. It does not apply to
banks offering products and services, such as deposit
accounts and extensions of credit, to nonbank payday
lenders.
In addition, the aforementioned FILs reiterate the
FDIC’s longstanding policy that financial institutions
that properly manage customer relationships and
effectively mitigate risks are neither prohibited nor
discouraged from providing services to any category of
customer accounts or individual customer operating
in compliance with applicable state and federal law.
Advisory on Effective Risk Management
Practices for Purchased Loans and Purchased
Loan Participations
In November 2015, the FDIC issued FIL-49-2015 to
update and replace the FDIC Advisory on
Effective Credit Risk Management Practices for
Purchased Loan Participations (FIL-38-2012, issued
in September 2012). The updated Advisory reminds
FDIC-supervised institutions of the importance of
underwriting and administering purchased loans and
loan participations in the same diligent manner as if
they were being directly originated by the purchasing
institution. It also outlines areas that should be
considered before purchasing a loan or participation
or entering into a third-party arrangement to purchase
or participate in loans. More specifically, FDIC-

FEDERAL DEPOSIT INSURANCE CORPORATION

supervised institutions should: (1) ensure that loan
policies address the purchases; (2) understand the
terms and limitations of agreements; (3) perform
appropriate due diligence; and (4) obtain necessary
board or committee approvals. Finally, the Advisory
reminds institutions that third-party arrangements
to facilitate loan and loan participation purchases
should be managed by an effective third-party risk
management process. The Advisory is based on
existing guidance, including Guidance for Managing
Third-Party Risk and Interagency Guidelines
Establishing Standards for Safety and Soundness
(Appendix A to Part 364 of the FDIC Rules and
Regulations).
Statement on Prudent Risk Management for
Commercial Real Estate Lending
In December 2015, the FDIC, FRB, and OCC
jointly issued a statement to remind financial
institutions of existing regulatory guidance on
prudent risk management practices for commercial
real estate (CRE) lending activity through economic
cycles.
The guidance reminds financial institutions that they
should maintain underwriting discipline and exercise
prudent risk management practices that identify,
manage, monitor, and control the risks arising from
their CRE lending activity.
Regulatory Relief
During 2015, the FDIC issued ten FILs that provide
guidance to help financial institutions and to facilitate
recovery in areas affected by tornadoes, flooding, wild
fires, landslides, mudslides, and other severe events.
In these FILs, the FDIC encouraged banks to work
constructively with borrowers experiencing financial
difficulties as a result of natural disasters. The FILs
also clarified that prudent extensions or modifications
of loan terms in such circumstances can contribute
to the health of communities and serve the long-term
interests of lending institutions.

Depositor and Consumer Protection
Rulemaking and Guidance
Joint Final Rule on Loans in Areas Having Special
Flood Hazards
In June 2015, the FDIC issued a final rule,
jointly with the OCC, FRB, NCUA, and FCA,
amending the FDIC’s flood insurance regulation
and implementing certain provisions in the BiggertWaters Flood Insurance Reform Act of 2012 and the
Homeowner Flood Insurance Affordability Act of
2014. Specifically, the final rule addressed detached
structures, force placement of flood insurance,
escrowing flood insurance premiums and fees, and
notice of special flood hazards.
Interagency Examination Procedures for
the Truth in Lending Act (Regulation Z) and Real
Estate Settlement Procedures
Act (Regulation X) Mortgage Rules
In June 2015, the FDIC released revised interagency
examination procedures for the new Truth in Lending
Act (TILA) - Real Estate Settlement Procedures
Act (RESPA) Integrated Disclosure Rule (TRID
Rule), as well as amendments to other provisions of
TILA Regulation Z and RESPA Regulation X. The
procedures were developed in coordination with
member agencies of the FFIEC. The examination
procedures should help financial institutions better
understand the areas on which the FDIC will focus as
part of the examination process.
Financial Institution Letter Regarding Military
Lending Act Final Rule
In September 2015, the FDIC issued FIL-37-2015
to notify FDIC-supervised institutions that the
Department of Defense (DOD) promulgated a
final rule amending the implementing regulations
of the Military Lending Act of 2006 (MLA). The
final rule expands specific protections provided to
service members and their families under the MLA
and addresses a wider range of credit products than
the DOD’s previous regulation. FDIC-supervised

MANAGEMENT'S DISCUSSION AND ANALYSIS

35

institutions and other creditors must comply with the
rule for new covered transactions beginning October
3, 2016. For credit extended in a new credit card
account under an open-end consumer credit plan,
compliance is required beginning October 3, 2017.
Guidance on Supervisory Expectations for
Financial Institutions Implementing the Truth
in Lending Act (Regulation Z) and Real Estate
Settlement Procedures Act (Regulation X)
Integrated Disclosure Rule
In October 2015, the FDIC issued FIL-43-2015
providing guidance on initial supervisory expectations
in connection with examinations of financial
institutions for compliance with the TRID Rule,
which became effective on October 3, 2015. During
initial examinations for compliance with the TRID
Rule, FDIC examiners will evaluate an institution’s
compliance management system and overall efforts to
come into compliance, recognizing the scope and scale
of changes necessary for each supervised institution to
achieve effective compliance. The FDIC’s supervisory
approach regarding the TRID Rule is similar to the
approach the FDIC took in initial examinations
for compliance with the Ability-to-Repay/Qualified
Mortgage rules that became effective in January 2014.

Advisory Committee on Economic Inclusion
The Advisory Committee on Economic Inclusion
(ComE-IN) provides the FDIC with advice and
recommendations on important initiatives focused on
expanding access to mainstream banking services to
underserved populations. This may include reviewing
basic retail financial services such as low-cost, safe
transaction accounts, affordable small-dollar loans,
savings accounts, and other services that promote
individual asset accumulation and financial stability.
During 2015, the ComE-IN met in May and October
to discuss approaches to expanding access to Safe
accounts, the economic inclusion potential of mobile
financial services, financial education opportunities
for young people, qualitative research into economic
inclusion strategies for individuals with disabilities,
and Money Smart for Small Business.

Promoting Economic Inclusion
The FDIC is strongly committed to promoting
consumer access to a broad array of banking products
to meet consumer financial needs. To promote
financial access to responsible and sustainable
products offered by IDIs, the FDIC:
•	 Conducts research on the unbanked and
underbanked.
•	 Engages in research and development on models
of products meeting the needs of lower-income
consumers.
•	 Supports partnerships to promote consumer access
and use of banking services.
•	 Advances financial education and literacy.
•	 Facilitates partnerships to support community and
small business development.

36

Progress was noted on several fronts by the Economic Inclusion
Committee. FDIC Chairman Martin J. Gruenberg presided over
the meeting.

FDIC National Survey of Unbanked and
Underbanked Households and Related Research
As part of its ongoing commitment to expanding
economic inclusion in the United States, the FDIC
works to fill the research and data gap regarding
household participation in mainstream banking and
the use of nonbank financial services. In addition,
Section 7 of the Federal Deposit Insurance Reform
Conforming Amendments Act of 2005 (Reform
Act) mandates that the FDIC regularly report on
underserved populations and bank efforts to bring

FEDERAL DEPOSIT INSURANCE CORPORATION

individuals and families into the conventional finance
system. In response, the FDIC regularly conducts and
reports on surveys of households and banks to inform
the efforts of financial institutions, policymakers,
regulators, researchers, academics, and others.
During 2015, the FDIC revised, tested, and
administered the 2015 FDIC National Survey
of Unbanked and Underbanked Households, in
partnership with the U.S. Census Bureau. The
survey focuses on basic checking and savings account
ownership, but it also explores household use of
alternative financial services to better understand the
extent to which families are meeting their financial
needs outside of mainstream financial institutions. In
addition, the survey incorporated questions designed
to assess the typical monthly financial services
consumption patterns and to better understand
household use of bank and nonbank consumer credit
instruments. A full report is expected in 2016.
In 2015, the FDIC also launched two qualitative
research projects to further develop insights in this
area. In the first, the FDIC conducted consumer
research to better understand the economic inclusion
potential of mobile financial services. Initial findings
confirmed and provided more detailed insights
into the opportunity of mobile financial services to
improve the sustainability of banking relationships.
In the second, the FDIC initiated interviews with
bankers and other stakeholders to better understand
the programs, products, and strategies that banks are
finding useful for attracting and retaining unbanked
households as customers.
Partnerships for Access to Mainstream Banking
The FDIC supports broadening consumer access to
mainstream banking through work with the Alliances
for Economic Inclusion (AEI), Bank On initiatives,
local and state government, and in collaboration
with federal partners and many local and national
organizations. The FDIC also collaborates with other
financial regulatory agencies to provide information
and technical assistance on community development. 

Local collaborations are many and diverse. The FDIC
sponsored or co-sponsored more than 98 events
during 2015 that provided opportunities for partners
to collaborate on increasing access to bank accounts
and credit services, opportunities to build savings and
improve credit histories, and initiatives to significantly
strengthen financial capability of community service
providers who directly serve low- and moderateincome consumers.
During 2015, the FDIC helped convene financial
institutions, community organizations, local, state,
and federal agencies, and other partners to support
coalitions that bring unbanked and underbanked
consumers and owners of small businesses into the
financial mainstream through the FDIC’s 14 area
AEIs. AEI committees and working groups addressed
specific challenges and financial services needs in their
communities including education on the specific
needs of unbanked and underbanked consumers,
credit building training and seminars for community
service providers and asset building organizations,
workshops for financial coaches and counselors,
promotion of savings opportunities for low- and
moderate-income people and communities, outreach
to bring larger numbers of people to expanded tax
preparation assistance sites, and education for business
owners to help them become bankable.
The FDIC also provided information and technical
assistance in the development of safe and affordable
transaction and savings accounts. In over 30 markets,
the FDIC provided technical assistance to local Bank
On initiatives and asset building coalition activities
designed to reduce barriers to banking and increase
access to the financial mainstream. For example,
the FDIC collaborated with the Cities for Financial
Empowerment Fund to support its national efforts
to work with local government and other partners to
increase the access of low- or moderate-income (LMI)
consumers to safe and affordable financial products
and services. In October 2015, FDIC Chairman
Martin J. Gruenberg addressed the national launch of
Bank On’s national account standards in San Francisco
to advance strategies to expand access to products that
are consistent with the FDIC’s Safe Account model.

MANAGEMENT'S DISCUSSION AND ANALYSIS

37

The FDIC also supported efforts to link consumers
to financial education and savings through activities
organized for designated Money Smart or “financial
fitness” weeks or months, involving hundreds of
consumer outreach events. Moreover, working
with the national, local, state, and targeted (youth,
military, and minority consumer-focused) America
Saves campaigns, the FDIC continued to link banking
companies to active efforts for engaging consumers
with setting savings goals at tax time and year round.

Advancing Financial Education
Financial education helps consumers understand and
use bank products effectively and sustain a banking
relationship over time. The FDIC continued to be
a leader in developing high-quality, free financial
education resources and pursuing collaborations to
use those tools to educate the public. The FDIC’s
work during 2015 dealt primarily with young people,
consistent with the Financial Literacy and Education
Commission’s focus on Starting Early for Financial
Success.
In April 2015, the FDIC and the CFPB launched new
educational tools for parents, students, and teachers.
The new Money Smart for Young People series consists
of four new age-appropriate curricula that are aligned
with key academic standards. Unlike previous Money
Smart products, these new tools involve educators,
parents/caregivers, and young people in the
learning process.

Chairman Gruenberg unveils the Money Smart for Young People
education curriculum at a Jump$tart® Coalition meeting.

38

Strategic collaborations continue to be a critical
component of the FDIC’s financial education
efforts. The FDIC emphasizes the importance of
pairing education with access to appropriate banking
products and services through outreach. Working
through coalitions, the FDIC participated as a
speaker or exhibitor at 28 conferences and events that
reached an estimated 10,000 people. As part of a
small pilot project, the FDIC also provided training
to 60 teachers in three jurisdictions on Money Smart
for Young People as part of an initiative to better
understand how the curriculum can be used and
supported.
During 2015, the FDIC launched the second
phase of the Youth Savings Pilot Program, aimed at
identifying and highlighting promising approaches
to offering financial education tied to the opening
of safe, low-cost savings accounts for school-aged
children. In the second phase, the FDIC selected
12 banks to join with the 9 banks selected in 2014
for the first phase. The FDIC facilitated discussions
and knowledge sharing among the Pilot participants
to talk about program design and structure, such as
approaches to program evaluation, offering incentives,
and opening accounts. The FDIC also responded to
a range of inquiries from banks on technical issues
to support their youth savings initiatives. The Pilot
will culminate with a report in the fall of 2016 that
will communicate lessons learned and offer promising
practices for banks to work with schools or other
organizations to combine financial education with
access to savings accounts.
To support these types of collaborations, the FDIC,
the FRB, the NCUA, the OCC, and the U.S.
Department of the Treasury’s Financial Crimes
Enforcement Network (FinCEN) issued Interagency
Guidance to Encourage Financial Institution Youth
Savings Programs and Address Related Frequently Asked
Questions in February 2015. The guidance is intended
to encourage financial institutions to develop
and implement programs to expand the financial
capability of youth and build opportunities for
financial inclusion for more families. It also addresses
frequently asked questions that may arise as financial

FEDERAL DEPOSIT INSURANCE CORPORATION

institutions collaborate with schools, local and state
governments, nonprofit organizations, or corporate
entities to facilitate youth savings and financial
education programs.
While youth materials were the strategic focus
during 2015, the FDIC also enhanced Money Smart
program products for other audiences. For example,
the instructor-led Money Smart materials for adults
were updated to reflect the new mortgage disclosure
rules. In addition, three new modules were added to
the Money Smart for Small Business curriculum, using
feedback from the small business technical assistance
organizations that are also Money Smart Alliance
members. The three new modules, developed jointly
with the Small Business Administration (SBA), were
added to help aspiring entrepreneurs learn about
business ownership, gain a realistic perspective on
costs of starting a business, and understand the
purpose of cash flow management. In addition, the
entire small business curriculum was made available in
Spanish during 2015.
The FDIC continues to strengthen collaboration
with the SBA and other small business resources
beyond training. In 2015, each of the six FDIC
regional Community Affairs teams sponsored 25
regional events for banks and the SBA and its SBA
Resource Partner Network (SCORE, Small Business
Development Centers and Women’s Business Centers,
and Veteran’s Business Outreach Centers) to convene
and discuss collaborations or provide technical
assistance to small business leaders.

underserved markets and improve the banking
connections of small businesses. In addition, the
FDIC sponsored sessions with interagency partners
covering basic and advanced CRA training for banks.
The agencies also offered CRA basics for communitybased organizations as well as seminars on establishing
effective bank-community collaborations for
community development.
During 2015, the FDIC, other federal regulators,
and federal and state housing agencies hosted two
housing roundtable discussions and two housing
workshops to offer technical assistance to help expand
access to mortgage credit for LMI households.
During these events, banks and program managers
shared experiences with federal mortgage guarantee
and secondary market programs and state and local
down payment assistance and counseling programs.
They offered details of their work so that audiences
could gain a better understanding of how to address
challenges and identify opportunities for expanding
participation in these programs.

Community Banking Initiatives

In 2015, the FDIC provided technical assistance to
banks and community organizations through 111
outreach events designed to foster understanding and
practical relationships between financial institutions
and other community development resources and
stakeholders and to improve knowledge about the
CRA.

Community banks provide traditional, relationshipbased banking services in their local communities.
These banks accounted for 13 percent of banking
industry assets; however, this measure vastly
understates the importance of these institutions to
the U.S. economy and local communities across the
nation. For example, community banks hold 44
percent of the industry’s small loans to farms and
businesses, making them the lifeline to entrepreneurs
and small enterprises of all types. Community banks
also hold the majority of bank deposits in U.S. rural
counties and micropolitan counties with populations
up to 50,000. In fact, as of June 2015, community
banks held more than 75 percent of deposits in
more than 1,200 U.S. counties. In over 600 of
these counties, the only banking offices available to
consumers were those operated by community banks.

The FDIC’s work particularly emphasized sharing
information to support bank efforts to provide
prudent access to responsible mortgage credit in

The FDIC is the lead federal supervisor for the
majority of community banks and the insurer of all
IDIs. The FDIC has a particular responsibility for

Community Development

MANAGEMENT'S DISCUSSION AND ANALYSIS

39

the safety and soundness of community banks and
for understanding and communicating the role they
play in the banking system. Accordingly, the FDIC
in 2012 launched a Community Banking Initiative
focused on publishing new research on issues of
importance to community banks and providing
resources that will be useful to their efforts to manage
risks, enhance the expertise of their staff, and better
understand changes in the regulatory environment.
The FDIC continues to pursue an ambitious research
agenda on community banks. Since the 2012
publication of the FDIC Community Banking Study,
FDIC researchers have published ten additional
studies on topics ranging from small business
financing to the factors that have driven industry
consolidation over the past 30 years. During 2015,
the FDIC published studies on recent trends in
branch banking; the challenges and opportunities
facing small, closely held community banks; and an
updated model of economies of scale at community
banks. The Community Bank Performance section
of the FDIC Quarterly Banking Profile (QBP), first
introduced in 2014, continues to provide a detailed
statistical picture of the community banking sector
that can be accessed by analysts, other regulators, and
bankers themselves. The most recent report shows
that net income at community banks continued to
grow at double-digit annual rates in 2015, while total
loans and leases at these institutions grew at a rate that
was substantially faster than the industry as a whole.

Community Banking Research
Highlights from 2015
In 2015, FDIC economists published important
research analyzing branch banking and the
management and closely held ownership among
community banks.
Branch Banking
During the historic period of charter consolidation in
U.S. banking since 1985, the number of banks and
thrifts has declined by almost two-thirds. Yet, FDICinsured institutions continue to operate about 93,000

40

banking offices—only 6 percent fewer than the
all-time high reached in 2009. Even after the waves
of new banking technologies introduced in recent
decades, the density of U.S. banking offices per capita
stands higher today than at any time before 1977.
This relative stability in brick-and-mortar offices
suggests that they remain useful in providing banking
services even in the era of mobile banking. This is
especially the case for community banks, which were
shown to open new banking offices more frequently
and to close existing banking offices less frequently
than larger noncommunity banks (see chart on
page 41). Even as technology marches forward,
branch offices appear to remain an integral channel
through which banks serve their customers and earn
their trust.
Closely Held Ownership
Small, closely held banks are often thought to
experience certain disadvantages compared to their
larger competitors. They seldom have ready access to
the capital markets, and may find it hard to recruit
management talent from outside the bank. Yet a new
FDIC study shows that small, closely held community
banks have consistently outperformed widely held
institutions in recent years in terms of return on assets
(see chart on page 42) and operational efficiency.
What is the secret of their success? In a sample of
nearly 1,400 community banks in three supervisory
regions, nearly 75 percent were deemed by FDIC
examiners to be “closely held” by an ownership
group that was almost always based on family or
community ties, or both. In almost 60 percent
of these institutions, the key officer that managed
the bank was either part of or affiliated with the
ownership group. Moreover, this set of institutions—
where ownership and management overlap—has
reported the highest financial performance since
2009, suggesting that bank profitability may improve
if ownership and management share the same goals.
The real challenge for small, closely held banks may
be to find equally qualified successors to manage the
institution over the long run.

FEDERAL DEPOSIT INSURANCE CORPORATION

COMMUNITY BANKS HAVE TENDED TO OPEN MORE
NEW OFFICES AND CLOSE FEWER EXISTING OFFICES
THAN NONCOMMUNITY BANKS
Community Banks

Noncommunity Banks
Net Change
-1.9%

Net Change
-8.8%

Source of Change:

+11.5%

Gross Office Openings

+9.5%
-13.0%

Gross Office Closings

-17.3%
-8.6%

Net Transfer Between Groups

+5.1%
+1.3%

Net Offices Added to Survey

+0.8%
-20

-15

-10

-5

0

5

10

15

Percent Change in Number of Offices, 2008-2014
Source: Breitenstein, Eric C. and John M. McGee, “Brick-and-Mortar Banking Remains Prevalent in an Increasingly
Virtual World,” FDIC Quarterly, Vol. 9, No. 1, 2015. FDIC calculations based on Summary of Deposits (SOD) data.

Apart from research, the Community Bank Initiative
includes a robust technical assistance program for
bank directors, officers, and employees. The technical
assistance program includes Directors’ College events
held across the country, industry teleconferences, and
a video program.
In 2015, the FDIC hosted 47 Directors’ College
events. These events were typically conducted jointly
with state trade associations and addressed issues
such as corporate governance, regulatory capital,
community banking, concentrations management,
consumer protection, the Bank Secrecy Act, and
interest rate risk, among others. In addition, the
FDIC hosted five industry teleconferences on a
range of topics of interest to community bankers,
including brokered deposits, cybersecurity awareness,
the implementation of CFPB’s mortgage rules, the
interagency rule on loans in areas with special flood

hazards, and youth savings programs. The FDIC also
participated in two FFIEC industry teleconferences
regarding regulatory capital reporting changes. In
addition, the FDIC offered four deposit insurance
coverage seminars for bank officers and employees
in 2015. These free seminars, which were offered
nationwide, particularly benefitted smaller institutions
that have limited training resources. The FDIC also
released three deposit insurance seminar training
videos on the FDIC’s website and YouTube channel.
Among other FDIC technical assistance initiatives
is the Directors’ Resource Center, a special section of
the FDIC’s website that provides useful information
to bank directors, officers, and employees on areas
of supervisory focus and regulatory changes. One
key element of this resource center is a Technical
Assistance Video Program that offers in-depth,
technical training for bankers to view at their

MANAGEMENT'S DISCUSSION AND ANALYSIS

41

CLOSELY HELD COMMUNITY BANKS WHERE OWNERSHIP
AND MANAGERIAL CONTROL OVERLAP HAVE CONSISTENTLY
REPORTED HIGHER PROFITABILITY
Pretax Return on Assets
Percentage
1.4%

Widely Held

1.4%

1.2%

Closely Held

1.2%

1.0%

1.0%

0.8%

0.8%

0.6%

0.6%

0.4%

0.4%

0.2%

0.2%

0.0%

0.0%

2009 2010 2011 2012 2013 2014

Widely Held
Closely Held - Overlap
Closely Held - No Overlap
2009 2010 2011 2012 2013 2014

Source: Anderlik, John, M., Richard A. Brown, and Kathryn L. Fritzdixon. “Financial Performance and Management Structure of
Small, Closely Held Banks,” FDIC Quarterly, Vol. 10, No. 1, 2016.
Closely held community banks are owned by an identifiable primary owner or ownership group. Closely held banks where there is
overlap are run by a key officer that is part of or affiliated with that ownership group.

convenience. During 2015, the FDIC released three
technical assistance videos on cybersecurity awareness,
the Loan Originator Compensation Rule, and the
Servicing Rule. In addition, the FDIC expanded an
existing resource—the FDIC’s Cyber Challenge: A
Community Bank Cyber Exercise—to include three
additional exercises. In 2015, the FDIC surveyed
almost 800 financial institutions to obtain feedback
on the Technical Assistance Video Program. The
survey requested comments on the program as a
whole and on individual videos within the program
and asked for suggestions for the program, including
topics for new videos. The FDIC is evaluating the
feedback received.
Finally, the FDIC’s Advisory Committee on
Community Banking is an ongoing forum for
discussing current issues and receiving valuable
feedback from the industry. The committee, which

42

met three times during 2015, is composed of 15
community bank CEOs from around the country. It
is a valuable resource for input on a wide variety of
topics, including examination policies and procedures,
capital and other supervisory issues, credit and
lending practices, deposit insurance assessments and
coverage, and regulatory compliance issues.
The FDIC continues to promote open
communication with industry members during
these meetings, including feedback on the preexamination planning process. The FDIC’s electronic
pre-examination planning package, launched in
2013, has enabled examiners to tailor examination
information requests to the particular characteristics
and risk profile of the institution, thereby reducing
the amount of the information requested. The FDIC
continues to monitor industry feedback on this
process from outreach events and through the Post

FEDERAL DEPOSIT INSURANCE CORPORATION

Examination Survey, and communicate best practices
to examination staff regarding information requests
and use of the information received.

Consumer Complaints and Inquiries
The FDIC helps consumers by receiving,
investigating, and responding to consumer complaints
about FDIC-supervised institutions and answering
inquiries about banking laws and regulations, FDIC
operations, and other related topics. In addition, the
FDIC provides analytical reports and information
on complaint data for internal and external use, and
conducts outreach activities to educate consumers.
The FDIC recognizes that consumer complaints and
inquiries play an important role in the development
of strong public and supervisory policy. Assessing
and resolving these matters helps the agency identify
trends or problems affecting consumer rights,
understand the public perception of consumer
protection issues, formulate policy that aids
consumers, and foster confidence in the banking
system by educating consumers about the protection
they receive under certain consumer protection laws
and regulations.
Consumer Complaints by Product and Issue
The FDIC receives complaints and inquiries by
telephone, fax, U.S. mail, email, and online through
the FDIC’s website. In 2015, the FDIC handled
18,118 written and telephone complaints and
inquiries. Of this total, 9,042 related to FDICsupervised institutions. The FDIC responded
to nearly 98 percent of these complaints within
time frames established by corporate policy, and
acknowledged 100 percent of all consumer complaints
and inquiries within 14 days. As part of the
complaint and inquiry handling process, the FDIC
works with the other federal financial regulatory
agencies to ensure that complaints and inquiries are
forwarded to the appropriate agencies for response.
The FDIC carefully analyzes the products and issues
involved in complaints about FDIC-supervised

institutions. The number of complaints received
about a specific bank product and issue can serve as a
red flag to prompt further review of practices that may
raise consumer protection or supervisory concerns.
In 2015, the five most frequently identified consumer
product complaints and inquiries about FDICsupervised institutions concerned credit cards (22
percent), consumer loans (15 percent), checking
accounts (13 percent), residential real estate loans (11
percent), and prepaid cards (6 percent). Credit card
complaints and inquiries most frequently described
issues with billing disputes and error resolution, while
the issues most commonly cited in correspondence
about consumer loans were concerns with the
reporting of erroneous information. Complaints and
inquiries on checking accounts related to discrepancies
or transaction errors on the account. The largest share
of correspondence about residential real estate loans
cited loan modifications and foreclosures as the main
concern. Lastly, consumers most often identified
issues with the release of funds in relation to prepaid
cards.
The FDIC also investigated 89 complaints alleging
discrimination during 2015. The number of
discrimination complaints investigated has fluctuated
over the past several years but averaged approximately
117 complaints per year between 2008 and 2015.
Over this period, nearly 37 percent of the complaints
investigated alleged discrimination based on the race,
color, national origin, or ethnicity of the applicant
or borrower; 22 percent related to discrimination
allegations based on age; 8 percent involved the sex
of the borrower or applicant; and roughly 5 percent
concerned marital status.
Consumer refunds generally involve the financial
institution offering a voluntary credit to the
consumer’s account, often as a direct result of
complaint investigations and identification of a
banking error or violation of law. In 2015, consumers
received more than $636,792 in refunds from
financial institutions as a result of the assistance
provided by the FDIC’s Consumer Affairs Program.

MANAGEMENT'S DISCUSSION AND ANALYSIS

43

Public Awareness of Deposit
Insurance Coverage

universities. CFR researchers also produced a number
of new working papers in 2015.

An important part of the FDIC’s deposit insurance
mission is to ensure that bankers and consumers have
access to accurate information about the FDIC’s
rules for deposit insurance coverage. The FDIC has
an extensive deposit insurance education program
consisting of seminars for bankers, electronic tools for
estimating deposit insurance coverage, and written
and electronic information targeted to both bankers
and consumers.

In addition, the CFR organized and sponsored the
15th Annual Bank Research Conference jointly with
the Journal for Financial Services Research. More
than 120 participants attended the conference, which
was held in September 2015 and included more than
15 presentations on topics related to bank capital,
liquidity, lending, dividend policy, systemic risk, and
macroprudential regulation.

The FDIC continued its efforts to educate bankers
and consumers about the rules and requirements
for FDIC insurance coverage during 2015. For
example, the FDIC conducted four telephone
seminars for bankers on deposit insurance coverage,
reaching an estimated 4,449 bankers participating
at approximately 1,271 bank sites throughout the
country. The FDIC also created deposit insurance
training videos that are available on the FDIC’s
website and YouTube channel.
During 2015, the FDIC received and answered
approximately 90,429 telephone deposit insurancerelated inquiries from consumers and bankers.
The FDIC Call Center addressed 38,662 of these
inquiries, and deposit insurance coverage subjectmatter experts handled the other 51,767. In addition
to telephone inquiries about deposit insurance
coverage, the FDIC received 1,859 written inquiries
from consumers and bankers. Of these inquiries,
99 percent received responses within two weeks, as
required by corporate policy.

Center for Financial Research
The FDIC’s Center for Financial Research (CFR)
encourages and supports innovative research on topics
that are important to the FDIC’s roles as deposit
insurer and bank supervisor. Research from CFR
staff was accepted during the year for publication in
leading banking, finance, and economics journals,
and was presented at banking and finance seminars at
major conferences, regulatory institutions, and

44

RECEIVERSHIP MANAGEMENT
The FDIC has the unique mission of protecting
depositors of insured banks and savings associations.
No depositor has ever experienced a loss on the
insured amount of his or her deposits in an FDICinsured institution due to a failure. Upon closure of
an institution, typically by its chartering authority—
the state for state-chartered institutions and the OCC
for national banks and federal savings associations—
the FDIC is appointed receiver and is responsible for
resolving the failed institution.
The FDIC uses a variety of business practices to
resolve a failed institution. These practices are
typically associated with either the resolution process
or the receivership process. Depending on the
characteristics of the institution, the FDIC may
recommend several of these methods to ensure the
prompt and smooth payment of deposit insurance
to insured depositors, to minimize the impact on the
DIF, and to speed dividend payments to uninsured
depositors and other creditors of the failed institution.
The resolution process involves evaluating and
marketing a failing institution, soliciting and
accepting bids for the sale of the institution,
determining which bid is least costly to the DIF, and
working with the acquiring institution through the
closing process.
To minimize disruption to the local community,
the resolution process must be performed as quickly
and smoothly as possible. The FDIC uses two
basic resolution methods: purchase and assumption
transactions and deposit payoffs.

FEDERAL DEPOSIT INSURANCE CORPORATION

The purchase and assumption (P&A) transaction is
the most commonly used resolution method. In
a P&A transaction, a healthy institution purchases
certain assets and assumes certain liabilities of the
failed institution. A variety of P&A transactions can
be used. Since each failing bank situation is different,
P&A transactions provide flexibility to structure
deals that result in the highest value for the failed
institution. For each possible P&A transaction, the
acquirer may either acquire all or only the insured
portion of the deposits. From 2008 through 2013,
loss sharing was offered by the FDIC in connection
with P&A transactions. In a loss-share transaction,
the FDIC as receiver agrees to share losses on certain
assets with the acquirer, absorbing a significant
portion (typically 80 percent) of future losses on
assets that have been designated as “shared-loss assets”
for a specific period of time (five to ten years). The
economic rationale for these transactions is that
keeping assets in the banking sector can produce
a better net recovery than the FDIC’s immediate
liquidation of these assets. As the markets improve
and function more normally with capital and liquidity
returning, acquirers become more comfortable with
bidding without the loss sharing protection.
The FDIC continues to monitor compliance
with shared-loss agreements by validating the
appropriateness of loss-share claims; reviewing
efforts to maximize recoveries; ensuring consistent
application of policies and procedures across both
shared-loss and legacy portfolios; and confirming that
the acquirer has sufficient internal controls, including
adequate staff, reporting, and recordkeeping systems.
At year-end 2015, there were 215 receiverships with
active shared-loss agreements with $31.5 billion in
total covered assets.
Deposit payoffs are only executed if all bids received
for a P&A transaction are more costly to the DIF than
liquidation or if no bids are received, in which case
the FDIC, in its corporate capacity, makes sure that
the customers of the failed institution receive the full
amount of their insured deposits.
The receivership process involves performing
the closing functions at the failed institution;

liquidating any remaining failed institution assets;
and distributing any proceeds of the liquidation to
the FDIC, uninsured depositors, and other creditors
of the receivership. In its role as receiver, the FDIC
has used a wide variety of strategies and tools to
manage and sell retained assets. These include asset
sale and/or management agreements and structured
transactions.

Financial Institution Failures
During 2015, eight institutions failed, including
one large institution (greater than $5 billion in total
assets), compared to 18 failures in 2014. The large
failure in 2015 was unique because the majority of the
institution’s assets and liabilities were sold to multiple
buyers through an alliance partnership arrangement.
The FDIC executed one P&A agreement with a
lead buyer who then simultaneously sold portions of
what they acquired to their alliance members. Asset
buyers were also given an opportunity to bid on the
institution’s assets prior to the institution failing.
In all FDIC transactions, the FDIC successfully
contacted all known qualified and interested bidders
to market these institutions and also made insured
funds available to all depositors within one business
day of the failure. No losses were incurred on insured
deposits, and no appropriated funds were required to
pay insured deposits.
The following chart provides a comparison of failure
activity over the past three years.

FA I LU R E A C T I V I T Y 2 0 1 3 – 2015
Do l l a r s i n Bi l l i o n s
2015

Total Institutions
Total Assets of
Failed Institutions*
Total Deposits of
Failed Institutions*
Estimated Loss to
the DIF

2014

2013

8

18

24

$6.7

$2.9

$6.0

$4.9

$2.7

$5.1

$0.8

$0.4

$1.3

*Total assets and total deposits data are based on the last Call Report or
Thrift Financial Report (TFR) filed by the institution prior to failure.

MANAGEMENT'S DISCUSSION AND ANALYSIS

45

Asset Management and Sales
As part of its resolution process, the FDIC tries to sell
as many assets as possible to an assuming institution.
Assets that are retained by the receivership are
evaluated. For 95 percent of the failed institutions,
at least 90 percent of the book value of marketable
assets is marketed for sale within 90 days of an
institution’s failure for cash sales and within 120 days
for structured sales.
Cash sales of assets for the year totaled $1.7 billion
in book value. In addition to structured and cash
sales, the FDIC also uses securitizations to dispose
of bank assets.
As a result of the FDIC’s marketing and collection
efforts, the book value of assets in inventory decreased
by $2.9 billion (37.4 percent) in 2015. The following
chart shows the beginning and ending balances of
these assets by asset type.

A S S E T S I N I N V E N TO RY
BY ASSET TYPE
Doll ar s in Million s
Asset Type

Securities
Consumer Loans
Commercial Loans
Real Estate Mortgages
Other Assets/Judgments
Owned Assets
Net Investments in Subsidiaries
Structured and Securitized Assets
Total

12/31/15 12/31/14
$393

$470

22

123

173

697

398

957

113

120

122

123

3,524

5,150

$4,807

$7,676

Receivership Management Activities
The FDIC, as receiver, manages failed banks and their
subsidiaries with the goal of expeditiously winding up
their affairs. The oversight and prompt termination of
receiverships help to preserve value for the uninsured
depositors and other creditors by reducing overhead
and other holding costs. Once the assets of a failed
institution have been sold and the final distribution

46

RECEIVERSHIP ACTIVITY
Active Receiverships as of 12/31/14
New Receiverships
Receiverships Terminated
Active Receiverships as of 12/31/15

481
8
43
446

Protecting Insured Depositors
The FDIC’s ability to attract healthy institutions
to assume deposits and purchase assets of failed
banks and savings associations at the time of failure
minimizes the disruption to customers and allows
assets to be returned to the private sector immediately.
Assets remaining after resolution are liquidated by
the FDIC in an orderly manner, and the proceeds
are used to pay creditors, including depositors whose
accounts exceeded the insurance limit. During 2015,
the FDIC paid dividends of $5.7 million to depositors
whose accounts exceeded the insurance limit.

36

62

of any proceeds is made, the FDIC terminates the
receivership. In 2015, the number of receiverships
under management decreased by 7.3 percent, due to
receiverships being terminated. The following chart
shows overall receivership activity for the FDIC
in 2015.

Professional Liability and
Financial Crimes Recoveries
The FDIC works to identify potential claims against
directors, officers, securities underwriters and
issuers, fidelity bond insurance carriers, appraisers,
attorneys, accountants, mortgage loan brokers, title
insurance companies, and other professionals who
may have caused losses to an IDI. Once a claim
is determined to be meritorious and is expected
to be cost-effective to pursue, the FDIC initiates
legal action against the appropriate parties. During
2015, the FDIC recovered $450.3 million from
professional liability claims and settlements. The
FDIC also authorized lawsuits related to two failed
institutions against 26 individuals for director and
officer liability, and authorized nine other lawsuits for
fidelity bond, liability insurance, attorney malpractice,

FEDERAL DEPOSIT INSURANCE CORPORATION

appraiser malpractice, and securities law violations
for residential mortgage-backed securities. As of
December 31, 2015, the FDIC’s caseload included
50 professional liability lawsuits (down from 102 at
year-end 2014), 87 residential mortgage malpractice
and fraud lawsuits (up from 75), and 264 open
investigations (down from 511). The FDIC seeks
to complete professional liability investigations and
make decisions expeditiously on whether to pursue
potential professional liability claims.  During 2015,
it completed investigations and made decisions on
over 80 percent of the investigations related to failures
that reached the 18-month point after the institution’s
failure date, exceeding its annual performance target.
As part of the sentencing process for those convicted
of criminal wrongdoing against an institution that
later failed, a court may order a defendant to pay
restitution or to forfeit funds or property to the
receivership. The FDIC, working with the U.S.
Department of Justice, collected $7.8 million from
criminal restitution and forfeiture orders through
the end of December 31, 2015. Also as of that
same date, there were 3,831 active restitution and
forfeiture orders (down from 3,954 at year-end
2014). This includes 126 orders held by the Federal
Savings and Loan Insurance Corporation (FSLIC)
Resolution Fund, (i.e., orders arising out of failed
financial institutions that were in receivership or
conservatorship by the FSLIC or the Resolution Trust
Corporation).

INTERNATIONAL OUTREACH
In 2015, the FDIC continued to play a leading role
in supporting and promoting the global development
of effective deposit insurance, bank supervision,
and resolution regimes as integral components of
the financial safety net. The FDIC worked with
several standard-setting, regulatory, supervisory, and
multi-lateral organizations such as the Association
of Supervisors of Banks of the Americas (ASBA),
the BCBS, the Financial Services Volunteer Corps
(FSVC), the Financial Stability Board (FSB), the
International Association of Deposit Insurers (IADI),
the International Monetary Fund (IMF), and the

World Bank. FDIC staff also: facilitated training
for several hundred participants from counterpart
agencies around the world; participated in technical
assistance missions to several countries; and conducted
secondment programs to further the international
community’s understanding and implementation of
best practices in deposit insurance, bank supervision,
and failure resolutions.
International Association of Deposit Insurers
The IADI contributes to global financial stability by
promoting international cooperation in the field of
deposit insurance; providing guidance for establishing
new, and enhancing existing, deposit insurance
systems; and encouraging wide international contact
among deposit insurers and other interested parties.
IADI is now recognized as the standard-setting body
for deposit insurance by major international financial
institutions, including the FSB, the BCBS, the IMF,
the World Bank, and the European Community.
Since its founding in 2002, IADI has grown from 26
members to 80 deposit insurers from 77 jurisdictions.
FDIC Chairman Martin J. Gruenberg served as the
President of IADI and Chair of its Executive Council
from November 2007 to October 2012. In October
2015, FDIC Vice Chairman Thomas M. Hoenig was
elected to a two-year term to serve as President of
IADI and Chair of its Executive Council.
IADI and the BCBS jointly issued the Core Principles
for Effective Deposit Insurance Systems in 2009 and
completed the accompanying Compliance Assessment
Methodology for the Core Principles in 2010 (together,
the Core Principles). The FSB later included the Core
Principles as part of its Compendium of Key Standards
for Sound Financial Systems. During the fall of 2014,
IADI’s Executive Council and the FSB approved a
revised set of Core Principles that replaced the original
(2009) version.
Subsequently, an IADI drafting team, led by FDIC
staff, began revising the Handbook for the Assessment
of Compliance with the Core Principles (Handbook).
The Handbook is being designed as a “how-to” guide,
which will provide additional guidance on assessing a
jurisdiction’s compliance with the Core Principles and

MANAGEMENT'S DISCUSSION AND ANALYSIS

47

will include lessons learned from collaboration with
IMF and World Bank Financial Sector Assessment
Program (FSAP) review teams, IADI Core Principles
Regional Workshops, and IADI Self-Assessment
Technical Assistance Program (SATAP) reviews.
The IMF and World Bank use the Core Principles
in the context of the FSAP reviews, to assess the
effectiveness of jurisdictions’ deposit insurance
systems and practices. This represents an important
milestone in the growing global acceptance of the role
of effective deposit insurance systems in maintaining
financial stability. IADI, under FDIC leadership
of the Training and Conference Committee, has
trained more than 300 staff members from over
74 jurisdictions in conducting self-assessments for
compliance with the Core Principles. In collaboration
with the Deposit Insurance Fund of Kosovo, the
FDIC led a Regional Workshop in Pristina, Kosovo,
during May 2015 on Assessment of Compliance with
the Revised Core Principles. In June 2015, the FDIC
led a team of experts on an IADI SATAP review
of the Korea Deposit Insurance Corporation in
Seoul, Korea.
FDIC executives and subject-matter experts partnered
with IADI in helping to develop and deliver several
international programs in 2015. In September
2015, for example, Vice Chairman Thomas M.
Hoenig joined global bank resolution and deposit
insurance leaders at a conference hosted jointly by
IADI and the Financial Stability Institute Conference.
The conference, which was held at the Bank for
International Settlements in Basel, Switzerland,
explored key issues related to resolution and crisis
management. The FDIC also led the organizing
committee for IADI’s Biennial Research Conference
held in June 2015, in Basel, Switzerland. Vice
Chairman Hoenig presented at the conference, along
with several FDIC subject-matter experts. Finally,
in addition to the Vice Chairman’s new role as IADI
President and Chair of its Executive Council, FDIC
staff provides strategic guidance and leadership to
multiple IADI standing committees, subcommittees,
and working groups.

48

Association of Supervisors of Banks
of the Americas
The FDIC has been a member of ASBA since its
founding in 1999 and supports ASBA’s mission of
promoting sound bank supervision and regulation
throughout the Western Hemisphere. ASBA
represents bank supervisors from 36 jurisdictions.
The FDIC strives to lead the development of strong
supervisory policies in this hemisphere through
actively engaging with the Board, chairing ASBA’s
Training and Technical Committee, and providing
leadership in many of the Association’s research and
guidance working groups.
In 2015, senior FDIC staff chaired the ASBA Training
and Technical Committee, which is responsible
for designing and implementing ASBA’s training
strategy that advances the adoption of sound bank
supervision policies and practices among members.
ASBA’s training program reaches more than 600
members annually, with FDIC support, both as
chair and training provider. In support of ASBA’s
training program, the FDIC led a technical assistance
training mission in Guatemala City, Guatemala,
titled Banking Crisis and Resolutions in 2015. During
the year, the FDIC also partnered with the U.S.
Treasury Department and ASBA to promote stronger
cooperation and information sharing between deposit
insurers and bank supervisors in Latin America and
the Caribbean.
Basel Committee on Banking Supervision
The FDIC supported the development of sound
regulatory policy through effective participation in the
BCBS and its relevant groups, subgroups, and task
forces. Major work areas for the BCBS include those
conducted by the:
•	 Policy Development Group (PDG) and its:
––Coherence and Calibration Task Force
––Working Group on Capital
––Trading Book Group
––Leverage Ratio Group

FEDERAL DEPOSIT INSURANCE CORPORATION

––Working Group on Liquidity
––Risk Measurement Group
––Ratings and Securitization Work Stream
––Task Force on Standardized Approaches
––Task Force on Interest Rate Risk in the
Banking Book
––Task Force on Scope of Regulatory Consolidation
––Research Task Force
––Quantitative Impact Study Working Group
•	 Supervision and Implementation Group and its:
––Working Group on Operational Risk
––Standards Implementation Group –
Banking Book
––Standards Implementation Group – Trading Book
––Task Force on Supervisory Colleges
––Task Force on Pillar 2
•	 Macroprudential Supervision Group
•	 Accounting Experts Group and its:
––Audit Subgroup
•	 Anti-Money Laundering Expert Group
•	 Task Force on Simplicity and Comparability
•	 Task Force on Sovereign Exposures
•	 Working Group on Margining Requirements
•	 OTC Derivatives Regulators’ Forum
•	 OTC Derivatives Supervisor Group
•	 OTC Derivatives Assessment Team
•	 Joint Central Counterparties Task Force
•	 Task Force on Securitization Markets
International Derivatives Work
For many years, the FDIC has been actively engaged
in cooperation with market, prudential, and financial
stability authorities in policy development and
regulatory activities in the derivatives markets. The
FDIC also participates in the work of Derivatives
Regulators’ Forum and the OTC Derivatives
Supervisors Group.

International Capacity Building
The FDIC’s international efforts supporting the
development of effective deposit insurance systems,
bank supervisory practices, and bank resolution
regimes continued to grow in 2015. FDIC staff
contributed to international capacity building by
providing study tours, secondments, and technical
assistance to foreign counterparts. These engagements
resulted in an enhanced dialogue between the FDIC
and foreign counterparts in significant areas such as
bank supervision and regulatory developments post
crisis, the legal framework and operations for bank
resolutions, and optimal funding strategies for
deposit insurers.
FDIC management and staff hosted study tours
for 214 people representing 31 jurisdictions during
the year. In addition, the FDIC’s Corporate
University provided training in bank supervision and
information technology to 173 foreign delegates from
20 jurisdictions. In 2015, the FDIC also launched a
new training program for foreign regulatory officials,
FDIC 101: An Introduction to Deposit Insurance, Bank
Supervision, and Resolutions (FDIC 101), designed to
provide a structured and comprehensive view of how
the FDIC executes its key business functions. FDIC
101 incorporates technical expertise from across the
Corporation into a semi-annual, five-day intensive
course.
The FDIC contributes to global and domestic
bank supervision, deposit insurance, and resolution
initiatives by providing staff to support long-term
projects and technical assistance missions led by the
IMF, U.S. Treasury Department, the FSVC, and
the World Bank. The FDIC also continued longestablished programs for staffing multiple details
with the U.S. Treasury Department’s Office of
International Banking and Securities Markets and
with the FSVC to work on a variety of technical
assistance programs. The FSVC’s long-term
assignments included on-site project work on lending
to small-to-medium-sized enterprises and anti-money
laundering in Indonesia, Angola, Tanzania, Jordan,
and Egypt.

MANAGEMENT'S DISCUSSION AND ANALYSIS

49

The FDIC also completed short-term technical
assistance missions to Egypt to promote access
to credit, and to Poland to assist with the deposit
insurer’s organizational development. The FDIC
partnered with the World Bank to provide technical
assistance to the Nigeria Deposit Insurance
Corporation and the Zimbabwe Deposit Protection
Corporation on the development of quantitative
models to estimate appropriate target fund ratios
for their deposit insurance funds. The FDIC also
partnered with the World Bank to provide technical
assistance to Mexico’s bank supervisor, Comisión
Nacional Bancaria y de Valores, on off-site risk-based
supervision.

annual CBRC-U.S. Supervisors’ Bilateral Conference
to discuss supervisory issues of mutual interest.

The FDIC expands and strengthens international
engagement by providing secondment opportunities
to foreign officials to engage in long-term consultation
with FDIC subject-matter experts in areas related to
bank supervision, deposit insurance, and resolutions.
In 2015, two officials from the Deposit Insurance
Corporation of Japan and the Korea Deposit
Insurance Corporation concluded their secondments
to the FDIC, and two new secondees from these
agencies joined the FDIC, each for one-year
assignments.

The 7th U.S.-China Strategic and Economic
Dialogue was held in Washington D.C. in June
2015. FDIC Chairman Martin J. Gruenberg
participated, alongside other leaders from U.S. and
Chinese government agencies, giving remarks during
the session on financial sector reform. Chairman
Gruenberg commended China on the adoption
of a deposit insurance system and emphasized the
importance of strong bilateral cooperation and robust
resolution regimes for global financial stability.

Key International Engagements
The FDIC continued to advance policy making
priorities and strengthen its relationships with key
jurisdictions worldwide through its participation in
interagency dialogues in 2015.
In January 2015, FDIC executives traveled to
Beijing to participate in the 11th U.S.-China Joint
Economic Committee Meeting to discuss with
their Chinese counterparts issues related to deposit
insurance and the U.S. bank resolution regime.
FDIC representatives, alongside representatives
from the other U.S. financial regulatory authorities,
also participated in the annual U.S.-India Financial
Regulatory Dialogue in January to discuss issues
related to bank resolution and financial inclusion. In
April 2015, representatives from the FDIC, FRB, and
OCC met with delegates from the China Banking
Regulatory Commission (CBRC) for the eighth

50

In May 2015, the FDIC joined other U.S., Canadian,
and Mexican financial sector regulators in Ottawa for
the 20th meeting of the North American Free Trade
Agreement (NAFTA) Financial Services Committee
(FSC). The participants discussed financial sector
regulation, key policy issues, current cross-border
financial sector issues, and recent developments
in financial service regulations. The FDIC led the
discussion on cross-border resolution, which included
a discussion of resolution planning, resolution plans,
and cross-border coordination efforts.

MINORITY AND
WOMEN INCLUSION
The FDIC relies on contractors to help meet its
mission. In 2015, the FDIC awarded 346 (29.9
percent) contracts to minority- and women-owned
businesses (MWOBs) out of a total of 1,159 issued.
The FDIC awarded contracts with a combined value
of $858.4 million in 2015, of which, $211.6 million,
or 24.7 percent, were awarded to MWOBs, compared
to 34.9 percent for all of 2014. The FDIC paid
$142.5 million of its total contract payments (28.1
percent) to MWOBs, under 591 active contracts.
Referrals to minority- and women-owned law firms
(MWOLFs) accounted for 40 percent of all legal
referrals in 2015, with total payments of $12 million
going to MWOLFs, 12 percent of all payments to
outside counsel, compared to 13 percent for all
of 2014.

FEDERAL DEPOSIT INSURANCE CORPORATION

Representatives of the eight OMWI agencies gather at the first interagency OMWI technical assistance event.

In 2015, the FDIC participated in a combined total
of 34 business expos, one-on-one matchmaking
sessions, and panel presentations. At these events,
FDIC staff provided information and responded to
inquiries regarding FDIC business opportunities
for minorities and women. In addition to targeting
MWOBs and MWOLFs, these efforts also targeted
veteran-owned and small disadvantaged businesses.
Vendors were provided with the FDIC’s general
contracting procedures, prime contractors’ contact
information, and forecasts of possible upcoming
solicitations. Also, vendors were encouraged to
register through the FDIC’s Contractor Resource List
(a principal database for vendors interested in doing
business with the FDIC).
In August 2015, the FDIC, along with seven other
agencies, co-hosted “Collaborating for Success,” a
technical assistance event, in conjunction with the
Northern Virginia Procurement Technical Assistance
Program (PTAP). The purpose of the event was to
network with MWOBs that are interested in federal
contracting activities, and to provide meaningful
information to help them build and grow their federal
contracting opportunities. This event supports one
of the key provisions of Section 342 of the DoddFrank Act requiring the Office of Minority and
Women Inclusion (OMWI) agencies to increase and
ensure the fair participation of MWOBs, and ensure
MWOBs receive technical assistance and guidance
about the procurement process within those agencies.
This was the first Interagency Procurement Technical
Assistance Event, with joint participation of eight
OMWI agencies. A total of 344 vendors attended.
During 2015, OMWI and the Division of Resolutions
and Receiverships (DRR) collaborated to present two

FDIC-sponsored asset purchaser workshops that were
marketed extensively to minority- and women-owned
investors and companies interested in learning about
DRR’s sales processes.  DRR speakers with strong
backgrounds in their respective programs provided
details on the various tools used by DRR to market
assets and presented information to attendees on how
to participate in the transactions and bid on assets
offered for sale.
Following the Doral Bank failure in Puerto Rico
in February 2015 and highlighting interdivisional
collaboration, the Division of Depositor and
Consumer Protection (DCP) joined with DRR and
OMWI to sponsor workshops for both investors
and homeowners. More than 160 people attended
these events, which included presentations by: DRR,
OMWI, and DCP staff; Puerto Rico’s Commissioner
Blanco-Latorre from the Office of the Commissioner
of Financial Institutions; and representatives from
both the Department of Housing and Urban
Development and the Commonwealth of Puerto Rico
Housing Finance Authority.
Another asset purchaser workshop held in Atlanta,
Georgia, was attended by 42 prospective investors.
This event included a special focus on Owned Real
Estate (ORE) investment opportunities to support
a DRR auction of real estate properties scheduled
two weeks after the outreach workshop. A segment
regarding contracting services was also part of
the event.
In August, through OMWI’s logistical support and
funding, DRR participated in a Mortgage Housing
Fair in Puerto Rico. The Housing Fair was organized
by a small group of business professionals from the

MANAGEMENT'S DISCUSSION AND ANALYSIS

51

banking and insurance community on the island, and
drew an audience of over one thousand attendees.
Representatives from DRR educated participants
on the process of purchasing ORE properties from
the FDIC, provided a general overview on deposit
insurance, and publicized the scheduled ORE auction
in October. The FDIC team also included members
from RMS Examinations (Puerto Rico). Over the
course of the event, the FDIC directly engaged over
500 attendees, and indirectly informed many more
through 30-minute presentations on the main stage
each day. Presentations focused on deposit insurance
and how to buy ORE from the FDIC. Information
regarding the Minority and Women Outreach
Program can be found on the FDIC’s website at
www.fdic.gov/mwop.
In addition, the FDIC worked to further implement
Section 342(b)(2)(C) of the Dodd-Frank Act in
2015, which requires the OMWI Director of each
covered agency to develop standards for assessing the
diversity policies and practices of entities regulated
by such agency. To implement that requirement and
develop those standards, the FDIC continued to work
closely with the OMWI Directors of the OCC, the
NCUA, the FRB, the CFPB, and the SEC. On June
10, 2015, the Final Interagency Policy Statement
Establishing Joint Standards for Assessing the
Diversity Policies and Practices of Entities Regulated
by the Agencies became effective.

EFFECTIVE MANAGEMENT OF
STRATEGIC RESOURCES
The FDIC recognizes that it must effectively manage
its human, financial, and technological resources
to successfully carry out its mission and meet the
performance goals and targets set forth in its annual
performance plan. The FDIC must align these
strategic resources with its mission and goals and
deploy them where they are most needed to enhance
its operational effectiveness and minimize potential
financial risks to the DIF. Following are the FDIC’s
major accomplishments in improving operational
efficiency and effectiveness during 2015.

52

Human Capital Management
The FDIC’s human capital management programs
are designed to attract, train and develop, reward,
and retain a highly skilled, diverse, and resultsoriented workforce. In 2015, the FDIC workforce
planning initiatives emphasized the need to plan for
employees to fulfill current and future capabilities
and leadership needs. This focus ensures that the
FDIC has a workforce positioned to meet today’s core
responsibilities while preparing to fulfill its mission in
the years ahead.
Strategic Workforce Planning and Readiness
During 2015, the FDIC continued to develop and
implement the Workforce Development Initiative,
an integrated strategy to address workforce challenges
and opportunities. The effort is focused on four
broad objectives: (1) attract and develop talented
employees across the agency; (2) enhance the
capabilities of employees through training and diverse
work experiences; (3) encourage employees to engage
in active career development planning and seek
leadership roles in the FDIC; and (4) build on and
strengthen the FDIC’s operations to support these
efforts.
In 2015, the FDIC continued to develop the
infrastructure, governance, programs, and processes
to help meet its long-term workforce and leadership
needs. The FDIC is committed to building and
expanding its talent pipeline to ensure succession
challenges are met. To that end, the agency
conducted a cross-divisional succession planning
review and talent strategy development process.
Senior FDIC leaders convened to discuss emerging
talent needs and strategies to address them, including
efforts to develop the pipeline of the FDIC’s
aspiring leadership pool. Several programs were
launched in 2015 focused on enhancing leadership
capabilities, including the Leadership Mentoring and
Onboarding Programs, expanded external educational
opportunities through Harvard’s Kennedy School of
Government, and enriched management training.

FEDERAL DEPOSIT INSURANCE CORPORATION

The FDIC continued to focus on ensuring the
availability of a workforce equipped to meet today’s
responsibilities, while simultaneously preparing for
future capability needs. The FDIC established a
Career Paths initiative, targeted at nonsupervisory
employees at all levels, to promote the acquisition of
cross-organizational skills and knowledge. Additional
support is provided to employees seeking professional
development opportunities through expanded career
management services. Following up on a pilot
program launched in 2014, the FDIC evaluated
its first-year experience with an effort to increase
FDIC employees’ exposure to large bank operations
across the agency. Based on initial feedback, the
pilot program will be expanded to add six detail
opportunities to the ten offered in 2014 to support
the growth of the FDIC’s capabilities related to the
oversight of SIFIs required under the Dodd-Frank
Act.
The FDIC’s strategic workforce planning initiatives
require a long-term and sustained focus to identify
future workforce and leadership needs, assess current
capabilities, support aspiration to management and
leadership roles, and develop and source the talent
to meet emerging workforce needs. Through further
development of its human capital strategies, the FDIC
will work to ensure that the future FDIC workforce is
as prepared, capable, and dedicated as the one it has
today.
Corporate Employee Program
The FDIC’s Corporate Employee Program (CEP)
sponsors the development of newly hired Financial
Institution Specialists (FISs) in entry-level positions.
The CEP encompasses major FDIC divisions where
FISs are trained to become part of a highly effective
workforce. During the first-year rotation within the
program, FISs gain experience and knowledge in the
core business of the FDIC, including the Division
of Depositor and Consumer Protection (DCP), the
Division of Risk Management Supervision (RMS),
the Division of Resolutions and Receiverships
(DRR), and the Division of Insurance (DIR). At
the conclusion of the rotation period, FISs are placed

within RMS, DCP, or DRR, where they continue
their career path to become commissioned examiners
or resolutions and receiverships specialists.
The CEP, which celebrated its 10th anniversary in
2015, is an essential part of the FDIC’s ability to
provide continual cross-divisional staff mobility.
Since the CEP’s inception in 2005, 1,516 individuals
have joined the FDIC through this multi-discipline
program and more than 700 have become
commissioned examiners after successfully completing
the program’s requirements.
The FDIC continues to sponsor the Financial
Management Scholars Program (FMSP), an
additional hiring source for the CEP. Participants in
the FMSP complete an internship with the FDIC the
summer following the conclusion of their junior year.
As a result, the FDIC is able to recruit and hire highly
talented and well-qualified students into the CEP
ahead of other prospective employers. The program
serves as an additional venue to recruit talent.
Employee Learning and Development
The FDIC is committed to the learning and
development of its employees throughout their
careers to enrich technical proficiency and leadership
capacity, supporting career progression and succession
management. In 2015, the FDIC focused on
developing and implementing comprehensive
curricula for its business lines to incorporate lessons
learned from the financial crises and preparing
employees to meet new challenges. Such training,
which includes both classroom and online instruction
for maximum flexibility, is a critical part of workforce
and succession planning as more experienced
employees become eligible for retirement.
The FDIC also offers a comprehensive leadership
development program that combines core courses,
electives, and other enrichment opportunities to
develop employees at all levels. From new employees
to new managers, the FDIC provides employees
with targeted leadership development opportunities
that align with key leadership competencies. In
addition to a broad array of internally developed

MANAGEMENT'S DISCUSSION AND ANALYSIS

53

and administered courses, the FDIC also provides its
employees with funds and/or time to participate in
external training to support their career development.
Corporate Risk Management
During 2015, the Office of Corporate Risk
Management (OCRM) worked with divisions and
offices to advance common agency-wide processes
for identifying, managing, and mitigating risks to
the FDIC. OCRM assisted the Enterprise Risk
Committee, Executive Management Committee,
External Risk Forum, and Management Risk
Roundtable in reviewing risks across the agency.
OCRM monitors material risks and mitigation
activities, including the following:
•	 Risks to the agency’s ability to conduct its mission
essential functions under all threats and conditions,
as described in its Continuity of Operations Plan
and Business Continuity Plan.
•	 Risks to the financial system posed by the extended
current low level of interest rates.
•	 Risks posed by the analytical models used by the
FDIC in identifying and managing risk. During
2015, the FDIC enhanced policies and controls
to govern internal decision support models. The
comprehensive, corporate-wide model validation
program will ensure that FDIC models are sound
through routine testing and evaluation carried out
according to tailored model validation programs.
•	 Risks associated with governance and development
of large-scale IT projects.
•	 Risks posed to the agency and to the financial
services industry by concerted attempts to penetrate,
compromise, and disrupt the information systems
that are essential to their effective operation.
Employee Engagement
The FDIC continually evaluates its human capital
programs and strategies to ensure that it remains an
employer of choice and that all of its employees are
fully engaged and aligned with the mission. The
FDIC uses the Federal Employee Viewpoint Survey
mandated by Congress to solicit information from

54

employees and takes an agency-wide approach
to address key issues identified in the survey. In
December 2015, the FDIC received an award from
the Partnership for Public Service for being ranked
number one among mid-sized federal agencies on
the Best Places to Work in the Federal Government®
list. Effective leadership is the primary factor driving
employee satisfaction and commitment in the federal
workplace, according to a report by the Partnership
for Public Service. 

Photo credit: Aaron Clamage/Clamagephoto.com

Director of the Division of Administration Arleas Upton Kea and
Deputy to the Chairman and Chief Operating Officer Barbara
A. Ryan accept the award from Max Stier, President and CEO of
Partnership for Public Service.

The FDIC’s Workplace Excellence (WE) program
plays an important role in helping the FDIC engage
employees. The WE program is composed of a
national-level WE Steering Committee and Division/
Office WE Councils that are focused on maintaining,
enhancing, and institutionalizing a positive workplace
environment throughout the agency. In addition
to the WE program, the FDIC-National Treasury
Employees Union Labor Management Forum serves
as a mechanism for the union and employees to have
pre-decisional input on workplace matters. The WE
program and Labor Management Forum enhance
communication, provide additional opportunities
for employee input and engagement, and improve
employee empowerment.

FEDERAL DEPOSIT INSURANCE CORPORATION

Information Technology Management
The FDIC recognizes that secure information
technology (IT) solutions are a critical and
transformative resource for the successful
accomplishment of the agency’s business objectives.
The FDIC relies on the efficient, innovative, and
secure business capabilities that IT provides to ensure
and enhance mission achievement.
Information Technology –
Innovative Mission Support
In 2015, the FDIC developed and implemented
innovative software that enabled our examination
stakeholders at the FDIC, FRB, and state banking
agencies to better address current and future business
challenges. The new Examination Tools Suite (ETS)
provides the Corporation with cost and time savings
in administration and deployment efforts; ETS
also reduces maintenance expenses by centralizing
functionality and reducing the overall number of
systems supporting the program. ETS introduces
wireless on-site networks that enhance the security
and accuracy of shared examination data while
reducing data redundancy. ETS addresses the risk
of technological obsolescence by using technology
consistent with the FDIC’s current Enterprise
Architecture standards and industry best practices.
The Claims Administration System (CAS) is a system
that FDIC personnel use to identify depositors’
insured and uninsured funds in failing and failed
financial institutions. For every failing institution,
CAS is used before the failure to estimate the amount
of uninsured deposits for the least-cost test. When
an insured deposit transaction is the least-cost
resolution, CAS is used to determine the amount of
the depositors’ funds that are insured and that can
be transferred to the acquiring institution or paid
out directly to the depositor. For all failures, CAS
is the system of record for the deposits of the failed
institution. During 2015, the FDIC enhanced CAS
capabilities in order to “future-proof ” the FDIC’s
ability to efficiently and effectively manage the

increased data requirements for SIFIs that the agency
may need to address during the resolution process as
required by Dodd-Frank Act regulations.
During 2015, the FDIC strengthened access
controls of one of its primary systems for exchanging
information with financial institutions, examiners,
and other regulators by implementing MultiFactor Authentication (MFA). MFA is a method
to authenticate users by requiring the presentation
of two or all of the three following authentication
factors: (1) a knowledge factor (something the user
knows, such as a password); (2) a possession factor
(something the user has, such as a token); or (3) an
inherence factor (something the user is, such as a
fingerprint). To improve remote access security for
these FDIC customers, approximately 18,000 external
users were provided MFA technology during the year.

Keeping the FDIC Secure –
Cybersecurity (Internal)
Like all citizens in our increasingly connected world,
the FDIC continues to face serious, wide-ranging
threats to our operations, data, and reputation.
During 2015, the FDIC continued to improve and
evolve a strong and proactive IT security program to
effectively mitigate these risks in our cybersecurity
landscape.
Phishing and other email scams continue to rise at a
steady rate. The FDIC will likely see continued and
heightened levels of malicious attacks through email.
To strengthen email-related cybersecurity, the FDIC
implemented improved data loss prevention controls
and products that protect not only the FDIC’s
reputation and data assets but also provide protection
to the public by helping to ensure only the legitimate
use of FDIC credentials.
Finally, the FDIC enhanced its capabilities for
quantifying risks posed by IT-related cybersecurity
events. To provide management with up-to-date
metrics and reporting mechanisms for monitoring
their risk and the remediation of that risk, the FDIC

MANAGEMENT'S DISCUSSION AND ANALYSIS

55

implemented changes to its monitoring system to
display the numeric Common Vulnerability Scoring
System2 (CVSS) scores for all open findings. These
scores provide management with a clear numerical

2

representation of their finding’s risk level so that they
can better prioritize agency resources for remediating
those risks.

The CVSS provides an open framework for communicating the characteristics and impacts of IT vulnerabilities.

56

FEDERAL DEPOSIT INSURANCE CORPORATION

I I .	

P E R F O R M A N C E R E S U LT S
S U M M A RY

II.

Performance
Results
Summary

57

THIS PAGE INTENTIONALLY LEFT BLANK

SUMMARY OF 2015 PERFORMANCE RESULTS BY PROGRAM
The FDIC successfully achieved 39 of the 40 annual
performance targets established in its 2015 Annual
Performance Plan. One target was not achieved: the
issuance of a Notice of Proposed Rulemaking (NPR)
on the implementation of the Net Stable Funding
Ratio, which continues to be developed on an
interagency basis. There were no instances in which

2015 performance had a material adverse effect on
the successful achievement of the FDIC’s mission or
its strategic goals and objectives regarding its major
program responsibilities.
Additional key accomplishments are noted below.

Program Area

Performance Results

Insurance

•	 Updated the FDIC Board of Directors on loss, income, and reserve ratio
projections for the Deposit Insurance Fund (DIF) at the April and October
meetings.
•	 Briefed the FDIC Board of Directors in April and October on progress in meeting
the goals of the Restoration Plan. Based upon current fund projections, no changes
to assessment rate schedules were necessary.
•	 Presented an NPR to the FDIC Board of Directors in June that would refine the
deposit insurance assessment system for established small banks to incorporate
newer data from the recent financial crisis and revise the methodology to directly
estimate the probability of failure within three years.
•	 Presented an NPR to the FDIC Board of Directors in October that would
implement provisions of the Dodd-Frank Act to raise the minimum reserve ratio
of the DIF to 1.35 percent by September 30, 2020, and offset the effect of the
increase in the minimum reserve ratio from 1.15 percent to 1.35 percent on IDIs
with total consolidated assets of less than $10 billion.
•	 Completed reviews of the recent accuracy of the contingent loss reserves.
•	 Researched and analyzed emerging risks and trends in the banking sector, financial
markets, and the overall economy to identify issues affecting the banking industry
and the DIF.
•	 Provided policy research and analysis to FDIC leadership in support of the
implementation of financial industry regulation, as well as support for testimony
and speeches.
•	 Published economic and banking information and analyses through the FDIC
Quarterly, FDIC Quarterly Banking Profile (QBP), FDIC State Profiles, and the
Center for Financial Research Working Papers.
•	 Operated the Electronic Deposit Insurance Estimator (EDIE), which had 336,703
user sessions in 2015.

PERFORMANCE RESULTS SUMMARY

59

Program Area

Performance Results

Supervision and
Consumer Protection

•	 A total of 521 institutions were assigned a composite CAMELS rating of 2 and
had Matters Requiring Board Attention (MRBAs) identified in the examination
reports. To ensure that MRBAs are being appropriately addressed at these
institutions, the FDIC timely reviews progress reports and follows up with bank
management as needed. More specifically, within six months of issuing the
examination reports, the FDIC conducted appropriate follow up and review of
these MRBAs at 501 (96.2 percent) of these institutions. Follow up and review of
the MRBAs at the remaining 20 institutions (3.8 percent) occurred more than six
months after issuing the examination reports primarily due to delayed responses
from some banks as well as the need for additional information in order to
complete a full review.
•	 Participated on the examinations of selected financial institutions, for which the
FDIC is not the primary federal regulator, to assess risk to the DIF.
•	 Implemented the strategy outlined in the work plan approved by the Advisory
Committee on Economic Inclusion to support the expanded availability of
Safe accounts and the responsible use of technology, to expand banking services to
the underbanked.

Receivership Management

60

•	 Published an edition of Supervisory Insights that included information on strategic
planning in an evolving earnings environment, new requirements related to
investments in securitizations as a result of the Dodd-Frank Act, and recently
released regulations and supervisory guidance.
•	 Terminated at least 75 percent of new receiverships that are not subject to lossshare agreements, structured sales, or other legal impediments, within three years of
the date of failure.

FEDERAL DEPOSIT INSURANCE CORPORATION

PERFORMANCE RESULTS BY PROGRAM AND STRATEGIC GOAL
2015 I N S U R A N C E P RO G R A M R E S U LT S
Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.
#

ANNUAL
PERFORMANCE GOAL

TARGET

RESULTS

2

3

Number of business days
after an institution failure
that depositors have access
to insured funds.

Depositors have access to insured funds
within one business day if the failure
occurs on a Friday.

ACHIEVED.
SEE PG. 45.

Depositors have access to insured funds
within two business days if the failure
occurs on any other day of the week.

ACHIEVED.
SEE PG. 45.

Insured depositor losses
resulting from a financial
institution failure.

1

Respond promptly to all
insured financial institution
closings and related emerging
issues.

INDICATOR

Depositors do not incur any losses on
insured deposits.

ACHIEVED.
SEE PG. 45.

No appropriated funds are required to pay
insured depositors.

ACHIEVED.
SEE PG. 45.

Disseminate data and analyses
on issues and risks affecting the
financial services industry to
bankers, supervisors, the public,
and other stakeholders on an
ongoing basis.

Scope and timeliness of
information dissemination
on identified or potential
issues and risks.

Disseminate results of research and
analyses in a timely manner through
regular publications, ad hoc reports, and
other means.

ACHIEVED.
SEE PGS. 59-60.

Undertake industry outreach activities to
inform bankers and other stakeholders
about current trends, concerns, and other
available FDIC resources.

ACHIEVED.
SEE PGS. 39-40,
47-52.

Adjust assessment rates, as
necessary, to achieve a DIF
reserve ratio of at least 1.35
percent of estimated insured
deposits by September 30,
2020.

Updated fund balance
projections and
recommended changes to
assessment rates.

Provide updated fund balance projections
to the FDIC Board of Directors by June
30, 2015, and December 31, 2015.

ACHIEVED.
SEE PG. 59.

Demonstrated progress in
achieving the goals of the
Restoration Plan.

Recommend changes to deposit insurance
assessment rates to the FDIC Board of
Directors as necessary.

ACHIEVED.
SEE PG. 59.

Provide progress reports to the FDIC
Board of Directors by June 30, 2015, and
December 31, 2015.

ACHIEVED.
SEE PG. 59.

PERFORMANCE RESULTS SUMMARY

61

2 0 1 5 I NS U RANC E PROGR AM R ESULTS (co ntinue d )
Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.
#

ANNUAL
PERFORMANCE GOAL

Provision of technical
assistance to foreign
counterparts.

62

Maintain open dialogue with counterparts
in strategically important jurisdictions,
international financial organizations and
institutions, and partner U.S. agencies;
and actively participate in bilateral
interagency regulatory dialogues.

ACHIEVED.
SEE PGS. 49-50.

Maintain a leadership position in the
International Association of Deposit
Insurers (IADI) by conducting
workshops and performing assessments
of deposit insurance systems based on
the methodology for assessment of
compliance with the IADI Core Principles
for Effective Deposit Insurance Systems (Core
Principles), developing and conducting
training on priority topics identified by
IADI members, and actively participating
in IADI’s Executive Council and Standing
Committees.

Activities to expand and
strengthen engagement
with foreign jurisdictions
and advance the FDIC’s
global leadership and
participation.

RESULTS

ACHIEVED.
SEE PGS. 47-48.

ACHIEVED.
SEE PG. 48.

Engage with authorities responsible for
resolutions and resolutions planning
in priority foreign jurisdictions and
contribute to the resolution-related
agenda of the Financial Stability Board
(FSB) through active participation in the
FSB’s Resolution Steering Group (ReSG).

Expand and strengthen the
FDIC’s participation and
leadership role in supporting
robust and effective deposit
insurance programs, resolution
strategies, and banking systems
worldwide.

TARGET

Maintain open dialogue with the
Association of Supervisors of Banks of the
Americas (ASBA) to develop and foster
relationships with bank supervisors in
the region by providing assistance when
necessary.

4

INDICATOR

ACHIEVED.
SEE PG. 47.

Support visits, study tours, secondments,
and longer-term technical assistance and
training programs for representatives for
foreign jurisdictions to strengthen their
deposit insurance organizations, central
banks, bank supervisors, and resolution
authorities.

ACHIEVED.
SEE PGS. 49-50.

FEDERAL DEPOSIT INSURANCE CORPORATION

2 0 15 INS U RANC E PROGR AM R ESULTS (co ntinued)
Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.
#

ANNUAL
PERFORMANCE GOAL

INDICATOR

TARGET

RESULTS

5

Market failing institutions to all Scope of qualified
known qualified and interested and interested bidders
potential bidders.
solicited.

Contact all known qualified and
interested bidders.

ACHIEVED.
SEE PG. 45.

6

Provide educational
information to insured
depository institutions and
their customers to help them
understand the rules for
determining the amount of
insurance coverage on deposit
accounts.

Timeliness of responses to
deposit insurance coverage
inquiries.

Respond within two weeks to 95 percent
of written inquiries from consumers and
bankers about FDIC deposit insurance
coverage.

ACHIEVED.
SEE PG. 44.

Initiatives to increase
public awareness of
deposit insurance coverage
changes.

Conduct at least 4 telephone or in-person
seminars for bankers on deposit insurance
coverage.

ACHIEVED.
SEE PG. 44.

Complete and post on the FDIC website
videos for bankers and consumers on
deposit insurance coverage.

ACHIEVED.
SEE PG. 44.

PERFORMANCE RESULTS SUMMARY

63

2015 S U P E RV I S I O N A N D C O N S U M E R
P ROT E C T I O N P RO G R A M R E S U LT S
Strategic Goal: FDIC-insured institutions are safe and sound.
#

ANNUAL
PERFORMANCE GOAL

INDICATOR

TARGET

RESULTS

Conduct on-site risk
management examinations
to assess the overall financial
condition, management
practices and policies, and
compliance with applicable
laws and regulations of
FDIC-supervised depository
institutions. When problems
are identified, promptly
implement appropriate
corrective programs, and follow
up to ensure that identified
problems are corrected.

Percentage of required
examinations conducted in
accordance with statutory
requirements and FDIC
policy.

Conduct all required risk management
examinations within the time frames
prescribed by statute and FDIC policy.

Follow-up actions on
identified problems.

For at least 90 percent of institutions that
are assigned a composite CAMELS rating
of 2 and for which the examination
report identifies “Matters Requiring
Board Attention” (MRBAs), review
progress reports and follow up with
the institution within six months of
the issuance of the examination report
to ensure that all MRBAs are being
addressed.

2

Assist in protecting the
infrastructure of the U.S.
banking system against terrorist
financing, money laundering,
and other financial crimes.

Percentage of required
examinations conducted in
accordance with statutory
requirements and FDIC
policy.

Conduct all Bank Secrecy Act
examinations within the time frames
prescribed by statute and FDIC policy.

ACHIEVED.
SEE PGS. 26-27.

3

More closely align regulatory
capital standards with risk
and ensure that capital is
maintained at prudential levels.

U.S. implementation of
internationally agreed
regulatory standards.

Publish by December 31, 2015,
an interagency Notice of Proposed
Rulemaking on implementation of the
Basel III Net Stable Funding Ratio.

NOT ACHIEVED.
SEE PG. 18.

4

Implement strategies to
promote enhanced information
security, cybersecurity, and
business continuity within the
banking industry.

Enhancements to IT
supervision program.

Enhance the technical expertise of the IT
supervisory workforce.

ACHIEVED.
SEE PGS. 29-30.

Working with FFIEC counterparts,
update and strengthen IT guidance to the
industry on cybersecurity preparedness.

ACHIEVED.
SEE PG. 30.

Working with the FFIEC counterparts,
update and strengthen IT examination
work programs for institutions and
technology service providers (TSPs) to
evaluate cybersecurity preparedness and
cyber resiliency.

ACHIEVED.
SEE PG. 30.

Improve information sharing on
identified technology risks among the
IT examination workforces of FFIEC
member agencies.

ACHIEVED.
SEE PG. 30.

1

64

FEDERAL DEPOSIT INSURANCE CORPORATION

ACHIEVED.
SEE PGS. 26-27.

ACHIEVED.
SEE PG. 60.

2015 S U PERVI SI ON AN D CON SUMER
P ROTEC TION PROGR AM R ESULTS (co ntinue d )
Strategic Goal: Consumers’ rights are protected and FDIC-supervised
institutions invest in their communities.
#

ANNUAL
PERFORMANCE GOAL

INDICATOR

TARGET

RESULTS

Conduct on-site CRA
and consumer compliance
examinations to assess
compliance with applicable
laws and regulations by
FDIC-supervised depository
institutions. When violations
are identified, promptly
implement appropriate
corrective programs and follow
up to ensure that identified
problems are corrected.

Percentage of examinations Conduct all required examinations within
conducted in accordance
the time frames established by FDIC
with the time frames
policy.
prescribed by FDIC
policy.
Implementation of
corrective programs.

Conduct visits and/or followup examinations in accordance
with established FDIC policies to
ensure that the requirements of any
required corrective program have
been implemented and are effectively
addressing identified violations.

2

Effectively investigate and
respond to written consumer
complaints and inquiries about
FDIC-supervised financial
institutions.

Timely responses to
written consumer
complaints and inquiries.

Respond to 95 percent of written
consumer complaints and inquiries within
time frames established by policy, with all
complaints and inquiries receiving at least
an initial acknowledgement within two
weeks.

3

Promote economic inclusion
and access to responsible
financial services through
supervisory, research, policy,
and consumer/community
affairs initiatives.

Completion of planned
initiatives.

Revise, test, and administer the 2015
FDIC National Survey of Unbanked and
Underbanked Households.

ACHIEVED.
SEE PGS. 36-37.

Support the Advisory Committee on
Economic Inclusion in expanding the
availability and awareness of low-cost
transaction accounts, consistent with the
FDIC’s SAFE account template.

ACHIEVED.
SEE PG. 36.

In partnership with the Consumer
Financial Protection Bureau, enhance
financial capability among school-age
children through (1) development and
delivery of tailored financial education
materials; (2) resources and outreach
targeted to youth, parents, and teachers;
and (3) implementation of a pilot youth
savings program.

ACHIEVED.
SEE PGS. 38-39.

1

ACHIEVED.
SEE PG. 27.

ACHIEVED.
SEE PGS. 26-28.

ACHIEVED.
SEE PG. 43.

PERFORMANCE RESULTS SUMMARY

65

2015 S U PERV ISI ON AN D CON SUMER
P ROTEC TIO N P ROGR AM R ESULTS (co ntinue d )
Strategic Goal: Large and complex financial institutions are resolvable
in an orderly manner under bankruptcy.
#

Annual
Performance Goal

66

Identify and address risks
in large, complex financial
institutions.

TARGET

RESULTS

Risk monitoring of
large, complex financial
institutions, bank holding
companies and designated
nonbanking firms.

Conduct ongoing risk analysis and
monitoring of large, complex financial
institutions to understand and assess their
structure, business activities, risk profiles,
and resolution and recovery plans.

ACHIEVED.
SEE PGS. 21-24.

Completion of
statutory and regulatory
requirements under Title I
of DFA.

1

INDICATOR

Complete, in collaboration with the
FRB and in accordance with statutory
and regulatory time frames, a review of
resolution plans submitted by individual
financial companies subject to the
requirements of section 165 (d) of DFA
and Part 360.10 of the FDIC Rules and
Regulations.

FEDERAL DEPOSIT INSURANCE CORPORATION

ACHIEVED.
SEE PGS. 22-23.

2015 R E C E I V E R S H I P M A N A G E M E N T
P RO G R A M R E S U LT S
Strategic Goal: Resolutions are orderly and receiverships are managed effectively.
#

Annual
Performance Goal

INDICATOR

TARGET
For at least 95 percent of insured
institution failures, market at least
90 percent of the book value of the
institution’s marketable assets within 90
days of the failure date (for cash sales) or
120 days of failure date (for structured
sales).

RESULTS

1

Value, manage, and market
Percentage of the assets
assets of failed institutions and marketed for each failed
their subsidiaries in a timely
institution.
manner to maximize net return.

2

Manage the receivership estate
and its subsidiaries toward an
orderly termination.

Timely termination of new Terminate at least 75 percent of new
receiverships.
receiverships that are not subject to
loss-share agreements, structured sales,
or other legal impediments, within three
years of the date of failure.

ACHIEVED.
SEE PG. 60.

3

Conduct investigations into all
potential professional liability
claim areas for all failed insured
depository institutions, and
decide as promptly as possible,
to close or pursue each claim,
considering the size and
complexity of the institution.

Percentage of investigated
claim areas for which a
decision has been made to
close or pursue the claim.

For 80 percent of all claim areas, make a
decision to close or pursue professional
liability claims within 18 months of
the failure of an insured depository
institution.

ACHIEVED.
SEE PG. 47.

4

Ensure the FDIC’s operational
readiness to resolve a large,
complex financial institution
using the orderly liquidation
authority in Title II of the
DFA.

Establishment of
resolution plans and
strategies.

Update and refine firm-specific
resolutions plans and strategies and
develop operational procedures for the
administration of a Title II receivership.

ACHIEVED.
SEE PG. 24.

Meetings of the Systemic
Resolution Advisory
Committee (SRAC).

Prepare for an early 2016 meeting of the
Systemic Resolution Advisory Committee
to obtain feedback on resolving SIFIs.

ACHIEVED.
SEE PG. 25.

Enhanced cross-border
coordination and
cooperation in resolution
planning.

Continue to deepen and strengthen
bilateral working relationships with key
foreign jurisdictions.

ACHIEVED.
SEE PGS. 45-46.

ACHIEVED.
SEE PGS. 24-25.

PERFORMANCE RESULTS SUMMARY

67

PRIOR YEARS’ PERFORMANCE RESULTS
Refer to the respective full Annual Report of prior years, located on FDIC’s website for more information on
performance results for those years. Minor wording changes may have been made to reflect current goals and
targets. (Shaded areas indicate no such target existed for that respective year.)

I N S U R A N C E P RO G R A M R E S U LT S
Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.
Annual Performance Goals and Targets

1.	Respond promptly to all financial institution closings and related
emerging issues.
•	Depositors have access to insured funds within one
business day if the failure occurs on a Friday.
•	Depositors have access to insured funds within two business days if the
failure occurs on any other day of the week.
•	Depositors do not incur any losses on insured deposits.
•	No appropriated funds are required to pay insured depositors.
2.	Deepen the FDIC’s understanding of the future of
community banking.
•	Conduct a nationwide conference on the future of
community banking during the first quarter of 2012.
•	Publish by December 31, 2012, a research study on the future of
community banks, focusing on their evolution, characteristics,
performance, challenges, and role in supporting local communities.
3.	Disseminate data and analyses on issues and risks affecting the
financial services industry to bankers, supervisors, the public, and
other stakeholders on an ongoing basis.
•	Disseminate results of research and analyses in a timely manner through
regular publications, ad hoc reports, and other means.
•	Undertake industry outreach activities to inform bankers and other
stakeholders about current trends, concerns, and other available FDIC
resources.
4.	Adjust assessment rates, as necessary, to achieve a DIF reserve
ratio of at least 1.35 percent of estimated insured deposits by
September 30, 2020.
•	Provide updated fund balance projections to the FDIC Board of
Directors by June 30, 2014, and December 31, 2014.
•	Provide updated fund balance projections to the FDIC Board of
Directors by June 30, 2013, and December 31, 2013.
•	Provide updated fund balance projections to the FDIC Board of
Directors by June 30, 2012, and December 31, 2012.

68

FEDERAL DEPOSIT INSURANCE CORPORATION

2014

2013

2012

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.
ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.
ACHIEVED.
ACHIEVED.

I NS U RANC E P ROGR AM R ESULTS (co ntinue d )
Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.
Annual Performance Goals and Targets

2014

•	Provide progress reports to the FDIC Board of Directors by June 30,
2014, and December 31, 2014.
•	Provide progress reports to the FDIC Board of Directors by June 30,
2013, and December 31, 2013.
•	Provide progress reports to the FDIC Board of Directors by June 30,
2012, and December 31, 2012.
•	Recommend changes to deposit insurance assessment rates to the FDIC
Board of Directors as necessary.
•	Provide to the Chairman by September 1, 2012, an analysis, with
recommendations where appropriate, of refinements to the deposit
insurance pricing methodology for banks with assets under $10 billion.
5.	Provide educational information to insured depository institutions
and their customers to help them understand the rules for
determining the amount of insurance coverage on deposit accounts.
•	Respond within two weeks to 95 percent of written inquiries from
consumers and bankers about FDIC deposit insurance coverage.
•	Conduct at least 15 telephone or in-person seminars for bankers on
deposit insurance coverage.
•	Conduct at least 12 telephone or in-person seminars for bankers on
deposit insurance coverage.
6.	Expand and strengthen the FDIC’s participation and leadership
role in supporting robust international deposit insurance and
banking systems.
•	Maintain open dialogue with counterparts in strategically important
countries as well as international financial institutions and partner U.S.
agencies.
•	Conduct workshops and assessments of deposit insurance systems
based on the methodology for assessment of compliance with the
Basel Committee on Bank Supervision (BCBS) and the International
Association of Depositor Insurers (IADI) Core Principles for Effective
Deposit Insurance Systems.
•	Support visits, study tours, and longer-term technical assistance and
training programs for foreign jurisdictions to strengthen their deposit
insurance organizations, central banks, and bank supervisors.
•	Support visits, study tours, and longer-term technical assistance and
training programs for foreign jurisdictions to strengthen their deposit
insurance organizations, central banks, bank supervisors, and resolution
authorities.
•	Foster strong relationships with international banking regulators and
associations that promote sound banking supervision and regulation,
failure resolutions, and deposit insurance practices.

2013

2012

ACHIEVED.
ACHIEVED.
ACHIEVED.
ACHIEVED.

ACHIEVED.

ACHIEVED.
ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.
ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

PERFORMANCE RESULTS SUMMARY

69

I N S U RANC E P ROGR AM R ESULTS (co ntinue d )
Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding.
Annual Performance Goals and Targets

•	Target capacity building based on the assessment methodology of the
BCBS and IADI Core Principles for an Effective Deposit Insurance System.
•	Lead and support the Association of Supervisors of Banks of the
Americas’ efforts to promote sound banking principles throughout the
Western Hemisphere.
7.	Expand and strengthen the FDIC’s participation and leadership role
in supporting robust and effective deposit insurance programs,
resolution strategies, and banking systems worldwide.
•	Maintain open dialogue with counterparts in strategically important
countries as well as international financial institutions and partner U.S.
agencies.
•	Maintain a leadership position in the International Association of
Deposit Insurers (IADI) by conducting workshops and performing
assessments of deposit insurance systems based on the methodology for
assessment of compliance with the IADI Core Principles for Effective
Deposit Insurance Systems (Core Principals), developing and conducting
training on priority topics identified by IADI members, and actively
participating in IADI’s Executive Council and Standing Committees.
•	Support visits, study tours, and longer-term technical assistance and
training programs for foreign jurisdictions to strengthen their deposit
insurance organizations, central banks, bank supervisors, and resolution
authorities.
•	Engage with authorities responsible for resolutions and resolutions
planning in priority foreign jurisdictions.
•	Contribute to the resolution-related agenda of the Financial Stability
Board (FSB) through active participation in the FSB’s Resolution
Steering Group and its working groups.
•	Actively participate in bilateral interagency regulatory dialogues.

70

FEDERAL DEPOSIT INSURANCE CORPORATION

2014

2013

2012

ACHIEVED.
ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.
ACHIEVED.
ACHIEVED.

S U P E RV I S I O N A N D C O N S U M E R
P ROT E C T I O N P RO G R A M R E S U LT S
Strategic Goal: FDIC-supervised institutions are safe and sound.
Annual Performance Goals and Targets

2014

1.	Conduct on-site risk management examinations to assess the
overall financial condition, management practices and policies, and
compliance with applicable laws and regulations of FDIC-supervised
depository institutions.
•	Conduct all required risk management examinations within the time
frames prescribed by statute and FDIC policy.
2.	Conduct on-site risk management examinations to assess the
overall financial condition, management practices and policies, and
compliance with applicable laws and regulations of FDIC-supervised
depository institutions. When problems are identified, promptly
implement appropriate corrective programs, and follow up to
ensure that identified problems are corrected.
•	Conduct all required risk management examinations within the time
frames prescribed by statute and FDIC policy.
•	Implement formal or informal enforcement actions within 60 days for
at least 90 percent of all institutions that are newly downgraded to a
composite Uniform Financial Institutions Rating of 3, 4, or 5.
3.	For all institutions that are assigned a composite Uniform Financial
Institutions Rating of 3, 4, or 5, conduct on-site visits within six
months after implementation of a corrective program. Ensure
during these visits and subsequent examinations that the institution
is fulfilling the requirements of the corrective program that has
been implemented and that the actions taken are effectively
addressing the underlying concerns identified during the
examination.
•	Conduct 100 percent of required on-site visits within six months after
implementation of a corrective program.
4.	Assist in protecting the infrastructure of the U.S. banking system
against terrorist financing, money laundering, and other financial
crimes.
•	Conduct all Bank Secrecy Act examinations within the time frames
prescribed by statute and FDIC policy.

3

2013

2012

ACHIEVED.

ACHIEVED.

ACHIEVED.

SUBSTANTIALLY
ACHIEVED.

SUBSTANTIALLY
ACHIEVED.3

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

Erroneously reported as “Achieved” in the 2013 Annual Report.

PERFORMANCE RESULTS SUMMARY

71

S U PERV IS ION AN D CON SUMER
P ROTEC TIO N P ROGR AM R ESULTS (co ntinue d )
Strategic Goal: FDIC-supervised institutions are safe and sound.
Annual Performance Goals and Targets

5.	More closely align regulatory capital standards with risk and ensure
that capital is maintained at prudential levels.
•	Finalize Basel III reporting instructions in time to ensure that
institutions that are using the advanced approaches can implement Basel
III in the first quarter of 2014 and that all IDIs
can implement the standardized approach in the first quarter
of 2015.
•	Publish a final Basel Liquidity Coverage Rule, in collaboration with
other regulators by December 31, 2014.
•	Publish a final rule implementing the Basel III capital accord in
collaboration with other regulators, by December 31, 2014.
•	Finalize, in collaboration with other regulators, an enhanced U.S.
supplementary leverage ratio standard by December 31, 2014.
•	Complete by June 30, 2013, the review of comments and impact
analysis of June 2012 proposed interagency changes to regulatory capital
rules.
•	Issue by December 31, 2013, final regulatory capital rules.
•	Complete by December 31, 2012, final rules addressing alternative
standards of creditworthiness for credit ratings in the risk-based capital
rules.
•	Complete by December 31, 2012, a final rule for the Basel III capital
standards.
•	Complete by July 31, 2012, a final rule on the Market Risk
Amendment, including finalizing alternatives to the use of credit ratings
in accordance with Dodd-Frank Act (DFA) requirements.
6.	Identify and address risks in financial institutions designated as
systemically important.
•	Conduct ongoing risk analysis and monitoring of SIFIs to understand
their structure, business activities and risk profiles, and their resolution
and recovery capabilities.
•	Complete, in collaboration with the Federal Reserve Board and in
accordance with statutory and regulatory time frames, all required
actions associated with the review of Section 165(d) resolution plans
submitted under Title 1 of DFA.
•	Complete, in collaboration with the Federal Reserve Board and in
accordance with statutory and regulatory time frames, all required
actions associated with the review of resolution plans submitted by
financial companies subject to the requirements of Section 165(d) of
the Dodd-Frank Act.

72

FEDERAL DEPOSIT INSURANCE CORPORATION

2014

2013

2012

ACHIEVED.

ACHIEVED.
ACHIEVED.
ACHIEVED.
ACHIEVED.
ACHIEVED.
NOT
ACHIEVED.
NOT
ACHIEVED.
ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

S U PERV ISI ON AN D CON SUMER
P ROTEC TIO N PROGR AM R ESULTS (co ntinue d )
Strategic Goal: FDIC-supervised institutions are safe and sound.
Annual Performance Goals and Targets

2014

•	Hold at least one meeting of the Systemic Resolution Advisory
Committee to obtain feedback on resolving systemically important
financial companies.
•	Take all steps necessary to facilitate timely issuance of implementing
regulations and related policy guidance on proprietary trading and other
investment restrictions (also known as the Volcker Rule).
•	Take all steps necessary to facilitate timely issuance of implementing
regulations and related policy guidance on restrictions on federal
assistance to swaps entities.
•	Take all steps necessary to facilitate timely issuance of implementing
regulations and related policy guidance on capital and margin and other
requirements for over-the-counter derivatives.
•	Take all steps necessary to facilitate timely issuance of implementing
regulations and related policy guidance on credit risk retention
requirements for securitizations.
•	Take all steps necessary to facilitate timely issuance of implementing
regulations and related policy guidance on enhanced compensation
structure and incentive compensation requirements.
•	Monitor risk within and across large, complex firms to assess the
potential need for, and obtain the information that would be required to
carry out, if necessary, an FDIC resolution of the institution.
•	Establish by June 30, 2012, with the Board of Governors of the Federal
Reserve System (FRB), policies and procedures for collecting, processing,
and reviewing for completeness and sufficiency holding company and
insured depository institution (IDI) resolution plans submitted under
Section 165(d) of DFA.
•	Complete, with the FRB and in accordance with prescribed time frames,
the review of holding company and IDI resolution plans submitted
under Section 165(d) of DFA.
7.	Implement strategies to promote enhanced cybersecurity within the
banking industry.
•	In coordination with the FFIEC, implement recommendations to
enhance the FDIC’s supervision of the IT risks at insured depository
institutions and their technology service providers.

2013

ACHIEVED.

2012

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

PERFORMANCE RESULTS SUMMARY

73

S U P E RV I S I O N A N D C O N S U M E R
P ROT E C T I O N P RO G R A M R E S U LT S

Strategic Goal: Consumers’ rights are protected and FDIC-supervised
institutions invest in their communities.
Annual Performance Goals and Targets

1.	Conduct on-site CRA and compliance examinations to assess
compliance with applicable laws and regulations by FDICsupervised depository institutions.
•	Conduct 100 percent of required examinations within the time frames
established by FDIC policy.
2.	Conduct on-site CRA and compliance examinations to assess
compliance with applicable laws and regulations by FDIC-supervised
depository institutions. When violations are identified, promptly
implement appropriate corrective programs and follow up to ensure
that identified problems are corrected.
•	Conduct 100 percent of required examinations within the time frames
established by FDIC policy.
•	Conduct visits and/or follow-up examinations in accordance with
established FDIC policies to ensure that the requirements of any
required corrective program have been implemented and are effectively
addressing identified violations.
•	Conduct visits and/or follow-up examinations in accordance with
established FDIC policies and ensure that the requirements of any
required corrective program have been implemented and are effectively
addressing identified violations.
3.	Take prompt and effective supervisory action to monitor and
address problems identified during compliance examinations of
FDIC-supervised institutions that received an overall 3, 4, or 5 rating
for compliance with consumer protection and fair lending laws.
Ensure that each institution is fulfilling the requirements of any
corrective program that has been implemented and that the actions
taken are effectively addressing the underlying concerns identified
during the examination.
•	Conduct follow-up examinations or on-site visits for any unfavorably
rated (3, 4, or 5) institution within 12 months of completion of the
prior examination.
4.	Establish an effective working relationship with the new Consumer
Financial Protection Bureau (CFPB).
•	Complete the transfer of consumer complaint processing responsibilities
within the purview of the CFPB within approved time frames.

74

FEDERAL DEPOSIT INSURANCE CORPORATION

2014

2013

2012

ACHIEVED.

SUBSTANTIALLY
ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

S U PERV ISI ON AN D CON SUMER
P ROTEC TIO N PROGR AM R ESULTS (co ntinue d )
Strategic Goal: Consumers’ rights are protected and FDIC-supervised
institutions invest in their communities.

Annual Performance Goals and Targets

2014

5.	Effectively investigate and respond to written consumer complaints
and inquiries about FDIC-supervised financial institutions.
•	Respond to 95 percent of written consumer complaints and inquiries
within time frames established by policy, with all complaints and
inquiries receiving at least an initial acknowledgment within two weeks.
6.	Promote economic inclusion and access to responsible financial
services through supervisory, research, policy, and consumer/
community affairs initiatives.
•	Publish the results of the 2013 FDIC National Survey of Unbanked
and Underbanked Households (conducted jointly with the U.S. Census
Bureau).
•	Implement the strategy outlined in the work plan approved by the
Advisory Committee on Economic Inclusion to support the responsible
use of technology to expand banking services to the unbanked.
•	Implement the strategy outlined in the work plan approved by the
Advisory Committee on Economic Inclusion to support the expanded
availability of Safe accounts and the responsible use of technology, to
expand banking services to the underbanked.
•	Facilitate opportunities for banks and community stakeholders to
address issues concerning access to financial services, community
development, and financial education.
•	Conduct the third biennial FDIC National Survey of Unbanked and
Underbanked Households (conducted jointly with the U.S. Census
Bureau).
•	Initiate work on the Survey of Banks’ Efforts to Serve the Unbanked and
Underbanked.
•	Complete and publish results of the second biennial National Survey of
Unbanked and Underbanked Households and Banks’ Efforts to Serve the
Unbanked and Underbanked.
•	Plan and hold meetings of the Advisory Committee on Economic
Inclusion to gain feedback and advice on FDIC efforts to promote
inclusion.
•	Coordinate 25 CRA community forums nationwide to facilitate
community development opportunities for financial institutions.

2013

2012

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.
DEFERRED.
ACHIEVED.

ACHIEVED.
ACHIEVED.

PERFORMANCE RESULTS SUMMARY

75

R E C E I V E R S H I P M A N AG E M E N T
P RO G R A M R E S U LT S
Strategic Goal: Resolutions are orderly and receiverships are managed effectively.
Annual Performance Goals and Targets

2014

2013

2012

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

ACHIEVED.

1.	 Market failing institutions to all known qualified and interested
potential bidders.
•	Contact all known qualified and interested bidders.
2.	Value, manage, and market assets of failed institutions and their
subsidiaries in a timely manner to maximize net return.
•	For at least 95 percent of insured institution failures, market at least 90
percent of the book value of the institution’s marketable assets within 90
days of the failure date (for cash sales) or 120 days of the failure date (for
structured sales).
3.	Manage the receivership estate and its subsidiaries toward an
orderly termination.
•	Terminate at least 75 percent of new receiverships that are not subject
to loss-share agreements, structured sales, or other legal impediments,
within three years of the date of failure.
4.	Conduct investigations into all potential professional liability claim
areas for all failed insured depository institutions, and decide as
promptly as possible to close or pursue each claim, considering the
size and complexity of the institution.
•	For 80 percent of all claim areas, a decision is made to close or pursue
professional liability claims within 18 months of the failure date of an
insured depository institution.
5.	Complete reviews of all loss-share and Limited Liability Corporation
(LLC) agreements to ensure full compliance with the terms and
conditions of the agreements.
•	Complete reviews of 100 percent of the loss-share and LLC agreements
active as of December 31, 2011, to ensure full compliance with the
terms and conditions of the agreements.
•	Review the final report and implement an action plan to address the
report’s finding and recommendations for 80 percent of the loss-share
reviews and 70 percent of the LLC reviews.

76

FEDERAL DEPOSIT INSURANCE CORPORATION

ACHIEVED.

ACHIEVED.

I I I .	

FINANCIAL HIGHLIGHTS

III.

Financial
Highlights

77

THIS PAGE INTENTIONALLY LEFT BLANK

In its role as deposit insurer of financial institutions,
the FDIC promotes the safety and soundness of
IDIs. The following financial highlights address the
performance of the Deposit Insurance Fund.

DEPOSIT INSURANCE
FUND PERFORMANCE
The DIF balance ended the year at $72.6 billion, an
increase of $9.8 billion from $62.8 billion at yearend 2014. The DIF’s comprehensive income totaled
$9.8 billion for 2015 compared to comprehensive
income of $15.6 billion during 2014.  This $5.8
billion year-over-year decrease was primarily due to
a $6.0 billion lower negative provision for insurance
losses, partially offset by a $191 million increase in
assessment revenue and a $141 million increase in
interest revenue.
The provision for insurance losses was negative
$2.3 billion for 2015, compared to negative $8.3
billion for 2014. The negative provision for 2015
primarily resulted from a decrease of $2.2 billion
in the estimated losses for institutions that failed
in current and prior years, which was primarily
attributable to (1) unanticipated recoveries of $1.0
billion in litigation settlements, professional liability
claims, and tax refunds by the receiverships; (2) a
$1.4 billion decrease in the receiverships’ sharedloss liability; (3) an adjustment of $501 million for
lower-than-anticipated loss estimates at time of failure
for all current year failures; and (4) a $715 million
increase in receivership legal and representation and

warranty liabilities and projected future receivership
expenses.  For the receiverships’ shared-loss liability,
in 2015, covered asset balances decreased by $23.1
billion as a result of loan amortizations and paydowns, as well as the expiration of 113 commercial
shared-loss agreements and the early termination of 66
shared-loss agreements.  Actual losses on this portion
of covered assets were less than estimated at year-end
2014.  The composition of the remaining covered
asset portfolio primarily consists of performing single
family assets, which have historically experienced
significantly lower losses than commercial assets. 
Assessment revenue was $8.8 billion for 2015, as
compared to $8.7 billion for 2014. The combination
of declining assessment rates and increasing
assessment base resulted in the modest increase in
assessment revenue of $191 million.
The DIF’s interest revenue on U.S. Treasury
investments for 2015 was $423 million compared
to interest revenue of $282 million in 2014.  This
$141 million year-over-year increase reflects not only
a larger investment portfolio balance, but also new,
higher-yielding investments.  The DIF’s cash and
U.S. Treasury investment portfolio balance was $63.4
billion at year-end 2015, an increase of $11.7 billion
from the year-end 2014 balance of $51.7 billion that
was primarily due to assessment collections of $8.7
billion and recoveries from resolutions of $6.3 billion,
less resolution disbursements of $2.3 billion and
operating expenses paid of $1.6 billion.

FINANCIAL HIGHLIGHTS

79

ESTIMATED DIF INSURED DEPOSITS
8,000
7,000

Dollars in Billions

6,000
5,000
4,000
3,000
2,000
1,000
0

3-10 6-10 9-10 12-10 3-11 6-11 9-11 12-11 3-12 6-12 9-12 12-12 3-13 6-13 9-13 12-13 3-14 6-14 9-14 12-14 3-15 6-15 9-15

SOURCE: Commercial Bank Call and Thrift Financial Reports
Note: Beginning in fourth quarter 2010 through fourth quarter 2012, estimated insured deposits include the entire balance of
noninterest-bearing transaction accounts.

DEPOSIT INSURANCE FUND RESERVE RATIOS

Fund Balance as a Percent of Insured Deposits

1.2
1.0
0.8
0.6
0.4
0.2
0.0
-0.2
-0.4

80

3-10 6-10 9-10 12-10 3-11 6-11 9-11 12-11 3-12 6-12 9-12 12-12 3-13 6-13 9-13 12-13 3-14 6-14 9-14 12-14 3-15 6-15 9-15

FEDERAL DEPOSIT INSURANCE CORPORATION

D E P O S I T I N S U R A N C E F U N D S E L E C T E D S TAT I S T I C S
Do l l a r s i n Mi l l i o n s
For the years ended December 31

 

2015
$9,304

Selected Statistics
Total DIF-Member Institutions1
Problem Institutions
Total Assets of Problem Institutions
Institution Failures
Total Assets of Failed Institutions in Year2
Number of Active Failed Institution Receiverships

$8,965

$10,459

1,687

1,664

1,609

(2,240)

(8,299)

(5,655)

9,857

15,600

14,505

9,820

Financial Results
Revenue
Operating Expenses
Insurance and Other Expenses (includes provision for losses)
Net Income
Comprehensive Income
Insurance Fund Balance
Fund as a Percentage of Insured Deposits (reserve ratio)

2014

15,589

14,233

$62,780

$47,191

$72,600
1.09%

3

2013

1.01%

0.79%

6,270³

6,509

6,812

203³

291

467

$51,068³

$86,712

$152,687

8

18

24

$6,706

$2,914

$6,044

446

481

479

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.

3

	As of September 30, 2015.

FINANCIAL HIGHLIGHTS

81

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I V.	

FDIC BUDGET AND
SPENDING

IV.

FDIC Budget
and Spending

83

THIS PAGE INTENTIONALLY LEFT BLANK

CORPORATE
OPERATING BUDGET
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
$2.1 billion in 2015, including $1.7 billion in
ongoing operations and $0.4 billion in receivership
funding. This represented approximately 93 percent
of the approved budget for ongoing operations and
78 percent of the approved budget for receivership
funding for the year.4
The Board of Directors approved a 2016 Corporate
Operating Budget of approximately $2.2 billion,
consisting of $1.8 billion for ongoing operations and

$0.4 billion for receivership funding. The level of
the approved ongoing operations budget for 2016
is approximately $17 million (0.9 percent) higher
than the 2015 ongoing operations budget, while
the approved receivership funding budget is roughly
$125 million (23.8 percent) lower than the 2015
receivership funding budget.
As in prior years, the 2016 budget was formulated
primarily on the basis of an analysis of projected
workload for each of the Corporation’s three major
business lines and its program support functions. The
most significant factor contributing to the decrease
in the Corporate Operating Budget is the improving
health of the industry and the subsequent reduction
in failure-related workload. Although savings in this
area are being realized, the 2016 receivership funding
budget provides 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.

FDIC EXPENDITURES 2006–2015
Dollars in Millions
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

The numbers in this paragraph will not agree with the DIF and FRF financial statements because of differences in how
items are classified.

4

FDIC BUDGET AND SPENDING

85

2015 BUDGET AND EXPENDITURES BY PROGRAM

(including Allocated Support)
Dollars in Millions

$1,200
$900
$600
$300
$0

Supervision
and Consumer
Protection
Program
Budget

Receivership
Management
Program

General and
Administrative

Expenditures

2015 BUDGET AND
EXPENDITURES BY PROGRAM
(Excluding Investments)
The FDIC budget for 2015 totaled $2.3 billion.
Budget amounts were allocated as follows: $1.023
billion or 44.1 percent, to the Supervision and
Consumer Protection program; $749 million, or 32.3
percent, to the Receivership Management program;
$322 million, or 13.9 percent, to the Insurance

86

Insurance
Program

program; and $225 million, or 9.7 percent, to
Corporate General and Administrative expenditures.
Actual expenditures for the year totaled $2.1
billion. Actual expenditures amounts were allocated
as follows: $964 million, or 46.3 percent, to the
Supervision and Consumer Protection program;
$629 million, or 30.2 percent, to the Receivership
Management program; $297 million, or 14.3 percent,
to the Insurance program; and $194 million, or 9.3
percent, to Corporate General and Administrative
expenditures.

FEDERAL DEPOSIT INSURANCE CORPORATION

INVESTMENT SPENDING
The FDIC instituted a separate Investment Budget in
2003 to provide enhanced governance of major multiyear development efforts. 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 Corporation’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 on a quarterly basis.
From 2006–2015 investment spending totaled $149
million, and is estimated at $9 million for 2016.

INVESTMENT SPENDING 2006 - 2015
Dollars in Millions
$30
$25
$20
$15
$10
$5
$0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

FDIC BUDGET AND SPENDING

87

THIS PAGE INTENTIONALLY LEFT BLANK

V. 	

FINANCIAL SECTION

V.

Financial
Section

89

DEPOSIT INSURANCE FUND (DIF)
F E D E R A L D E P O S I T I N S U R A N C E C O R P O R AT I O N
D E P O S I T I N S U R A N C E F U N D B A L A N C E S H E E T AT D E C E M B E R 31
Doll a r s i n T h o u s a n ds
2015

Assets
Cash and cash equivalents
Investment in U.S. Treasury obligations (Note 3)
Assessments receivable, net (Note 9)
Interest receivable on investments and other assets, net
Receivables from resolutions, net (Note 4)
Property and equipment, net (Note 5)
Total Assets
Liabilities
Accounts payable and other liabilities
Liabilities due to resolutions (Note 6)
Postretirement benefit liability (Note 12)
Contingent liabilities:
	 Anticipated failure of insured institutions (Note 7)
	 Litigation losses (Note 7)
Total Liabilities
Commitments and off-balance-sheet exposure (Note 13)
Fund Balance
Accumulated Net Income

2014

$876,344

$1,914,520

62,496,959

49,805,846

2,172,472

2,003,424

417,871

651,894

11,578,079

18,181,498

378,250

372,419

$77,919,975

$72,929,601

$272,571

$291,006

4,419,195

7,799,279

233,000

243,419

394,588

1,814,770

386

950

5,319,740

10,149,424

72,643,474

62,786,786

Accumulated Other Comprehensive Income
Unrealized (loss) gain on U.S. Treasury investments, net (Note 3)
Unrealized postretirement benefit loss (Note 12)

(9,191)

51,142

(34,048)

(57,751)

Total Accumulated Other Comprehensive Income (Loss)

(43,239)

(6,609)

72,600,235

62,780,177

$77,919,975

$72,929,601

Total Fund Balance
Total Liabilities and Fund Balance
The accompanying notes are an integral part of these financial statements.

90

FEDERAL DEPOSIT INSURANCE CORPORATION

DEPOSIT INSURANCE FUND (DIF)
F E D E R A L D E P O S I T I N S U R A N C E C O R P O R AT I O N
D E P O S I T I N S U R A N C E F U N D S TAT E M E N T O F I N C O M E A N D
FUND BALANCE FOR THE YEARS ENDED DECEMBER 31
Do l l a r s i n T h o u s a n ds
2015

Revenue
Assessments (Note 9)
Interest on U.S. Treasury obligations
Other revenue
Total Revenue
Expenses and Losses
Operating expenses (Note 10)
Provision for insurance losses (Note 11)
Insurance and other expenses
Total Expenses and Losses
Net Income
Other Comprehensive Income
Unrealized (loss) gain on U.S. Treasury investments, net
Unrealized postretirement benefit gain (loss) (Note 12)
Total Other Comprehensive Income (Loss)
Comprehensive Income
Fund Balance - Beginning
Fund Balance - Ending

2014

$8,846,843

$8,656,082

422,782

281,924

33,913

27,059

9,303,538

8,965,065

1,687,234

1,664,344

(2,251,320)

(8,305,577)

10,936

6,486

(553,150)

(6,634,747)

9,856,688

15,599,812

(60,333)

30,927

23,703

(41,401)

(36,630)

(10,474)

9,820,058

15,589,338

62,780,177

47,190,839

$72,600,235

$62,780,177

The accompanying notes are an integral part of these financial statements.

FINANCIAL SECTION

91

DEPOSIT INSURANCE FUND (DIF)
F E D E R A L D E P O S I T I N S U R A N C E C O R P O R AT I O N
D E P O S I T I N S U R A N C E F U N D S TAT E M E N T O F C A S H F L OW S
FOR THE YEARS ENDED DECEMBER 31
Doll a r s i n T h o u s a n ds
2015

Operating Activities
Provided by:
Assessments
Interest on U.S. Treasury obligations
Recoveries from financial institution resolutions
Miscellaneous receipts
Used by:
Operating expenses
Disbursements for financial institution resolutions
Miscellaneous disbursements
Net Cash Provided by Operating Activities
Investing Activities
Provided by:
Maturity of U.S. Treasury obligations
Used by:
Purchase of U.S. Treasury obligations
Purchase of property and equipment
Net Cash (Used) by Investing Activities
Net (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents - Beginning
Cash and Cash Equivalents - Ending
The accompanying notes are an integral part of these financial statements.

92

FEDERAL DEPOSIT INSURANCE CORPORATION

2014

$8,677,795

$8,873,123

2,064,836

1,450,939

6,329,454

4,099,804

147,001

78,558

(1,631,297)

(1,586,858)

(2,282,721)

(1,860,014)

(107,478)

(15,385)

13,197,590

11,040,167

19,590,780

17,158,275

(33,766,067)

(29,771,897)

(60,479)

(55,295)

(14,235,766)

(12,668,917)

(1,038,176)

(1,628,750)

1,914,520

3,543,270

$876,344

$1,914,520

N OT E S TO T H E
F I N A N C I A L S TAT E M E N T S
DEPOSIT INSURANCE FUND
December 31, 2015 and 2014
1.	OPERATIONS OF THE
DEPOSIT INSURANCE FUND
OVERVIEW
The Federal Deposit Insurance Corporation (FDIC)
is the independent deposit insurance agency created
by Congress in 1933 to maintain stability and public
confidence in the nation’s banking system. Provisions
that govern the FDIC’s operations are generally
found in the Federal Deposit Insurance (FDI) Act,
as amended (12 U.S.C. 1811, et seq). In accordance
with the FDI Act, the FDIC, as administrator of the
Deposit Insurance Fund (DIF), insures the deposits
of banks and savings associations (insured depository
institutions). In cooperation with other federal and
state agencies, the FDIC promotes the safety and
soundness of insured depository institutions (IDIs) by
identifying, monitoring, and addressing risks to the
DIF. Commercial banks, savings banks and savings
associations (known as “thrifts”) are supervised by
either the FDIC, the Office of the Comptroller of the
Currency, or the Federal Reserve Board.
In addition to being the administrator of the
DIF, the FDIC is the administrator of the FSLIC
Resolution Fund (FRF). The FRF is a resolution
fund responsible for the sale of the remaining assets
and the satisfaction of the liabilities associated with
the former Federal Savings and Loan Insurance
Corporation (FSLIC) and the former Resolution Trust
Corporation. The FDIC maintains the DIF and the
FRF separately to support their respective functions.
Pursuant to the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010 (Dodd-Frank
Act), the FDIC also manages the Orderly Liquidation
Fund (OLF). Established as a separate fund in the

U.S. Treasury (Treasury), the OLF is inactive and
unfunded until the FDIC is appointed as receiver
for a covered financial company. A covered financial
company is a failing financial company (for example,
a bank holding company or nonbank financial
company) for which a systemic risk determination
has been made as set forth in section 203 of the
Dodd-Frank Act.
The Dodd-Frank Act (Public Law 111-203) granted
the FDIC authority to establish a widely available
program to guarantee obligations of solvent IDIs or
solvent depository institution holding companies
(including affiliates) upon the systemic risk
determination of a liquidity event during times of
severe economic distress. The program would not be
funded by the DIF but rather by fees and assessments
paid by all participants in the program. If fees are
insufficient to cover losses or expenses, the FDIC
must impose a special assessment on participants as
necessary to cover the shortfall. Any excess funds
at the end of the liquidity event program would be
deposited in the General Fund of the Treasury.
The Dodd-Frank Act also created the Financial
Stability Oversight Council (FSOC) of which the
Chairman of the FDIC is a member and expanded
the FDIC’s responsibilities to include supervisory
review of resolution plans (known as living wills)
and backup examination authority for systemically
important bank holding companies and nonbank
financial companies. The living wills provide for an
entity’s rapid and orderly resolution in the event of
material financial distress or failure.

OPERATIONS OF THE DIF
The primary purposes of the DIF are to (1) insure the
deposits and protect the depositors of IDIs and (2)
resolve failed IDIs upon appointment of the FDIC
as receiver in a manner that will result in the least
possible cost to the DIF.

FINANCIAL SECTION

93

The DIF is primarily funded from deposit insurance
assessments. Other available funding sources, if
necessary, are borrowings from the Treasury, the
Federal Financing Bank (FFB), Federal Home Loan
Banks, and IDIs. The FDIC has borrowing authority
of $100 billion from the Treasury and a Note
Purchase Agreement with the FFB, not to exceed
$100 billion, to enhance the DIF’s ability to fund
deposit insurance.
A statutory formula, known as the Maximum
Obligation Limitation (MOL), limits the amount of
obligations the DIF can incur to the sum of its cash,
90 percent of the fair market value of other assets,
and the amount authorized to be borrowed from the
Treasury. The MOL for the DIF was $171.0 billion
and $162.0 billion as of December 31, 2015 and
2014, respectively.

OPERATIONS OF RESOLUTION ENTITIES
The FDIC is responsible for managing and disposing
of the assets of failed institutions in an orderly and
efficient manner. The assets held by receiverships,
pass-through conservatorships, and bridge institutions
(collectively, resolution entities), and the claims
against them, are accounted for separately from the
DIF assets and liabilities to ensure that proceeds from
these entities are distributed according to applicable
laws and regulations. Therefore, income and expenses
attributable to resolution entities are accounted
for as transactions of those entities. The FDIC
bills resolution entities for services provided on
their behalf.

2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
GENERAL
The financial statements include the financial
position, results of operations, and cash flows of
the DIF and are presented in accordance with U.S.
generally accepted accounting principles (GAAP).
These statements do not include reporting for assets
and liabilities of resolution entities because these

94

entities are legally separate and distinct, and the DIF
does not have any ownership or beneficial interests
in them. Periodic and final accounting reports of
resolution entities are furnished to courts, supervisory
authorities, and others upon request.

USE OF ESTIMATES
The preparation of the financial statements in
conformity with GAAP requires management to make
estimates and assumptions that affect the reported
amounts of assets and liabilities, revenue and expenses,
and disclosure of contingent liabilities. Actual
results could differ from these estimates. Where it
is reasonably possible that changes in estimates will
cause a material change in the financial statements
in the near term, the nature and extent of such
potential changes in estimates have been disclosed.
The more significant estimates include the assessments
receivable and associated revenue; the allowance
for loss on receivables from resolutions (which
considers the impact of shared-loss agreements); the
guarantee obligations for structured transactions; the
postretirement benefit obligation; and the estimated
losses for anticipated failures and representations and
indemnifications.

CASH EQUIVALENTS
Cash equivalents are short-term, highly liquid
investments consisting primarily of U.S. Treasury
Overnight Certificates.

INVESTMENT IN U.S. TREASURY
OBLIGATIONS
The FDI Act requires that the DIF funds be invested
in obligations of the United States or in obligations
guaranteed as to principal and interest by the United
States. The Secretary of the Treasury must approve
all such investments in excess of $100,000 and has
granted the FDIC approval to invest the DIF funds
only in U.S. Treasury obligations that are purchased
or sold exclusively through the Bureau of the Fiscal
Service’s Government Account Series program.

FEDERAL DEPOSIT INSURANCE CORPORATION

The DIF’s investments in U.S. Treasury obligations are
classified as available-for-sale. Securities designated as
available-for-sale are shown at fair value. Unrealized
gains and losses are reported as other comprehensive
income. Realized gains and losses are included
in the Statement of Income and Fund Balance as
components of net income. Income on securities
is calculated and recorded daily using the effective
interest or straight-line method depending on the
maturity of the security (see Note 3).

REVENUE RECOGNITION
FOR ASSESSMENTS
Assessment revenue is recognized for the quarterly
period of insurance coverage based on an estimate.
The estimate is derived from an institution’s risk-based
assessment rate and assessment base for the prior
quarter adjusted for the current quarter’s available
assessment credits, certain changes in supervisory
examination ratings for larger institutions, as well
as modest assessment base growth and average
assessment rate adjustment factors. At the subsequent
quarter-end, the estimated revenue amounts are
adjusted when actual assessments for the covered
period are determined for each institution
(see Note 9).

CAPITAL ASSETS AND DEPRECIATION
The FDIC buildings are depreciated on a straight-line
basis over a 35- to 50-year estimated life. Building
improvements are capitalized and depreciated over the
estimated useful life of the improvements. Leasehold
improvements are capitalized and depreciated
over the lesser of the remaining life of the lease or
the estimated useful life of the improvements, if
determined to be material. Capital assets depreciated
on a straight-line basis over a five-year estimated
useful life include mainframe equipment; furniture,
fixtures, and general equipment; and internal-use
software. Computer equipment is depreciated on a
straight-line basis over a three-year estimated useful
life (see Note 5).

PROVISION FOR INSURANCE LOSSES
The provision for insurance losses primarily represents
changes in the allowance for losses on receivables
from closed banks and the contingent liability
for anticipated failures of insured institutions
(see Note 11).

REPORTING ON VARIABLE
INTEREST ENTITIES
The FDIC receiverships engaged in structured
transactions, some of which resulted in the issuance
of note obligations that were guaranteed by the
FDIC, in its corporate capacity. As the guarantor of
note obligations for several structured transactions,
the FDIC, in its corporate capacity, holds an
interest in many variable interest entities (VIEs).
The FDIC conducts a qualitative assessment of
its relationship with each VIE as required by the
Financial Accounting Standards Board (FASB)
Accounting Standards Codification (ASC) Topic
810, Consolidation. These assessments are conducted
to determine if the FDIC, in its corporate capacity,
has (1) power to direct the activities that most
significantly affect the economic performance of the
VIE and (2) an obligation to absorb losses of the
VIE or the right to receive benefits from the VIE
that could potentially be significant to the VIE.
When a variable interest holder has met both of
these characteristics, the enterprise is considered the
primary beneficiary and must consolidate the VIE.
In accordance with the provisions of FASB ASC Topic
810, an assessment of the terms of the legal agreement
for each VIE was conducted to determine whether
any of the terms had been activated or modified in a
manner that would cause the FDIC, in its corporate
capacity, to be characterized as a primary beneficiary.
In making that determination, consideration was
given to which, if any, activities were significant to
each VIE. Often, the right to service collateral, to
liquidate collateral, or to unilaterally dissolve the VIE
was determined to be the most significant activity.
In other cases, it was determined that the structured

FINANCIAL SECTION

95

transactions did not include such significant activities
and that the design of the entity was the best indicator
of which party was the primary beneficiary.
The conclusion of these analyses was that the
FDIC, in its corporate capacity, has not engaged
in any activity that would cause the FDIC to be
characterized as a primary beneficiary to any VIE
with which it was involved as of December 31, 2015
and 2014. Therefore, consolidation is not required
for the 2015 and 2014 DIF financial statements. In
the future, the FDIC, in its corporate capacity, may
become the primary beneficiary upon the activation
of provisional contract rights that extend to the FDIC
if payments are made on guarantee claims. Ongoing
analyses will be required to monitor consolidation
implications under FASB ASC Topic 810.
The FDIC’s involvement with VIEs is fully described
in Note 8 under FDIC Guaranteed Debt of
Structured Transactions.

RELATED PARTIES
The nature of related parties and a description of
related party transactions are discussed in Note 1
and disclosed throughout the financial statements
and footnotes.

DISCLOSURE ABOUT RECENT RELEVANT
ACCOUNTING PRONOUNCEMENTS
In February 2015, the FASB issued Accounting
Standards Update (ASU) No. 2015-02, Amendments
to the Consolidation Analysis. Effective for periods
beginning after December 15, 2016, the ASU amends
an entity’s consolidation analysis for determining
whether it should consolidate a legal entity. The
FDIC, in its corporate capacity, has determined that

96

the ASU does not impact its consolidation analysis of
structured transactions.
In April 2015, the FASB issued ASU 2015-05,
Intangibles – Goodwill and Other – Internal-Use
Software (Subtopic 350-40): Customer’s Accounting for
Fees Paid in a Cloud Computing Arrangement. The
guidance clarifies circumstances under which a cloud
computing arrangement would be considered a license
of internal-use software or a service contract. The
ASU, which is effective for the DIF beginning on
January 1, 2016, is not expected to have a material
effect on the DIF’s financial condition or results of
operations.
In May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers (Topic 606).
The ASU will require an entity to recognize revenue
based on the amount it expects to be entitled for the
transfer of promised goods or services. In August
2015, the FASB issued ASU No. 2015-14, Revenue
from Contracts with Customers (Topic 606): Deferral of
Effective Date, deferring the original effective date of
the new revenue standard by one year. For the DIF,
the deferral results in the new revenue standard being
effective for annual periods beginning after December
15, 2018. The FDIC does not expect the new ASU to
have a material effect on the DIF.
Other recent accounting pronouncements have been
deemed not applicable or material to the financial
statements as presented.

3. INVESTMENT IN U.S.
TREASURY OBLIGATIONS
The “Investment in U.S. Treasury obligations” line
item on the Balance Sheet consisted of the following
components by maturity (in thousands).

FEDERAL DEPOSIT INSURANCE CORPORATION

December 31, 2015

Maturity

Yield at
Purchase1

Face
Value

U.S. Treasury notes and bonds
Within 1 year
0.54%
$21,495,000
After 1 year
through 5 years
1.19%
39,881,209
	Subtotal
$61,376,209
U.S. Treasury Inflation-Protected Securities
Within 1 year
-0.80%
$300,000
After 1 year
through 5 years
-0.14%
400,000
	Subtotal
$700,000
Total
$62,076,209

Net
Carrying
Amount

Unrealized
Holding
Gains

Unrealized
Holding
Losses

Fair
Value

$21,816,062

$2,518

$(17,526)

$21,801,054

39,951,893

55,159

(43,912)

39,963,140

$61,767,955

$57,677

$(61,438)

$61,764,194

$324,100

$0

$(2,101)

$321,999

414,095

0

(3,329)

410,766

$738,195

$0

$(5,430)

$732,765

$62,506,150

$57,677

$(66,868)

2

$62,496,959

1
The Treasury Inflation-Protected Securities (TIPS) are indexed to increases or decreases in the Consumer Price Index for All Urban Consumers (CPI-U).
For TIPs, the yields in the above table are stated at their real yields at purchase, not their effective yields. Effective yields on TIPS include a long-term
annual inflation assumption as measured by the CPI-U. The long-term CPI-U consensus forecast is 1.8 percent, based on figures issued by
the Congressional Budget Office and Blue Chip Economic Indicators in early 2015.
2
These unrealized losses occurred over a period of less than a year as a result of temporary changes in market interest rates. The FDIC does not
intend to sell the securities and is not likely to be required to sell them before their maturity date, thus, the FDIC does not consider these securities
to be other than temporarily impaired at December 31, 2015. The aggregate related fair value of securities with unrealized losses was $38.7 billion
as of December 31, 2015.

December 31, 2014

Maturity

Yield at
Purchase1

Face
Value

U.S. Treasury notes and bonds
Within 1 year
0.28%
$12,450,000
After 1 year
through 5 years
0.91%
33,901,209
	Subtotal
$46,351,209
U.S. Treasury Inflation-Protected Securities
-1.03%
$1,500,000
Within 1 year
After 1 year
through 5 years
-0.43%
700,000
$2,200,000
	Subtotal
$48,551,209
Total

Net
Carrying
Amount

Unrealized
Holding
Gains

Unrealized
Holding
Losses

Fair
Value

$12,861,127

$2,291

$(4,516)

$12,858,902

34,393,283

86,212

(5,759)

34,473,736

$47,254,410

$88,503

$(10,275)

$47,332,638

$1,759,237

$0

$(17,120)

$1,742,117

741,057

0

(9,966)

731,091

$2,500,294

$0

$(27,086)

$2,473,208

$ 49,754,704

$88,503

$(37,361)

$49,805,846

2

1
The Treasury Inflation-Protected Securities (TIPS) are indexed to increases or decreases in the Consumer Price Index for All Urban Consumers (CPI-U).
For TIPs, the yields in the above table are stated at their real yields at purchase, not their effective yields. Effective yields on TIPS include a longterm annual inflation assumption as measured by the CPI-U. The long-term CPI-U consensus forecast is 2.0 percent, based on figures issued by the
Congressional Budget Office and Blue Chip Economic Indicators in early 2014.
2
These unrealized losses occurred over a period of less than a year as a result of temporary changes in market interest rates. The FDIC does not
intend to sell the securities and is not likely to be required to sell them before their maturity date, thus, the FDIC does not consider these securities to
be other than temporarily impaired at December 31, 2014. The aggregate related fair value of securities with unrealized losses was $19.0 billion as of
December 31, 2014.

FINANCIAL SECTION

97

4.	RECEIVABLES FROM
RESOLUTIONS, NET
The receivables from resolutions result from DIF
payments to cover obligations to insured depositors
(subrogated claims), advances to resolution entities
for working capital, and administrative expenses
paid on behalf of resolution entities. Any related
allowance for loss represents the difference between
the funds advanced and/or obligations incurred and
the expected repayment. Estimated future payments
on losses incurred on assets sold to an acquiring
institution under a shared-loss agreement (SLA)
are factored into the computation of the expected
repayment. Assets held by DIF resolution entities
(including structured transaction-related assets; see
Note 8) are the main source of repayment of the
DIF’s receivables from resolutions. The “Receivables
from resolutions, net” line item on the Balance Sheet
consisted of the following components (in thousands).
December 31
2015

Receivables from
closed banks
Allowance for losses
Total

December 31
2014

$88,858,877

$98,360,904

(77,280,798)

(80,179,406)

$11,578,079

$18,181,498

As of December 31, 2015, the FDIC had 446 active
receiverships, including eight established in 2015.
The DIF resolution entities held assets with a book
value of $20.8 billion as of December 31, 2015, and
$29.7 billion as of December 31, 2014 (including
$16.0 billion and $22.0 billion, respectively, of cash,
investments, receivables due from the DIF, and other
receivables). Ninety-nine percent of the current asset
book value of $20.8 billion is held by resolution
entities established since the beginning of 2008.
Estimated cash recoveries from the management and
disposition of assets that are used to determine the
allowance for losses are based on asset recovery rates
from several sources, including actual or pending
institution-specific asset disposition data, failed
institution-specific asset valuation data, aggregate
asset valuation data on several recently failed or
troubled institutions, sampled asset valuation data,

98

and empirical asset recovery data based on failures
since 1990. Methodologies for determining the asset
recovery rates incorporate estimating future cash
recoveries, net of applicable liquidation cost estimates,
and discounting based on market-based risk factors
applicable to a given asset’s type and quality. The
resulting estimated cash recoveries are then used to
derive the allowance for loss on the receivables from
these resolutions.
For failed institutions resolved using a whole bank
purchase and assumption transaction with an
accompanying SLA, the projected future shared-loss
payments on the covered residential and commercial
loan assets sold to the acquiring institution under
the agreement are considered in determining the
allowance for loss on the receivables from these
resolutions. The shared-loss cost projections are
based on the covered assets’ intrinsic value, which
is determined using financial models that consider
the quality, condition and type of covered assets,
current and future market conditions, risk factors,
and estimated asset holding periods. For year-end
2015, the shared-loss cost estimates were updated for
all 215 receiverships with active SLAs. The updated
shared-loss cost projections for the larger residential
shared-loss agreements were primarily based on new
third-party valuations estimating the cumulative
loss of covered assets. The updated shared-loss cost
projections on the remaining residential sharedloss agreements were based on a stratified random
sample of institutions selected for new third-party
loss estimations, and valuation results from the
sampled institutions were aggregated and extrapolated
to the non-sampled institutions by asset type and
performance status.
In 2015, the FDIC eliminated the use of third-party
valuations for the remaining commercial covered
assets. Instead, loss rates were based on the FDIC’s
historical loss experience that also factors in the
time period based on the life of the agreement. In
addition, for all shared-loss agreements, the rate used
for discounting the cash flows was changed in 2015
to the Treasury spot rate curve instead of the 3-year
Constant Maturity Treasury rate. These changes were

FEDERAL DEPOSIT INSURANCE CORPORATION

made to address the shift to a predominantly singlefamily asset mix and did not have a material impact
on the shared-loss liability.
Also reflected in the allowance for loss calculation are
end-of-agreement SLA “true-up” recoveries. True-up
recoveries are projected to be received at expiration in
accordance with the terms of the SLA, if actual losses
at expiration are lower than originally estimated.
Note that estimated asset recoveries are regularly
evaluated during the year, but remain subject
to uncertainties because of potential changes in
economic and market conditions, which may cause
the DIF’s actual recoveries to vary significantly from
current estimates.

WHOLE BANK PURCHASE AND
ASSUMPTION TRANSACTIONS
WITH SHARED-LOSS AGREEMENTS
Since the beginning of 2008 through 2013, the
FDIC resolved 304 failures using whole bank
purchase and assumption resolution transactions with
accompanying SLAs on total assets of $216.5 billion
purchased by the financial institution acquirers.
The acquirer typically assumed all of the deposits
and purchased essentially all of the assets of a failed
institution. The majority of the commercial and
residential loan assets were purchased under an SLA,
where the FDIC agreed to share in future losses and
recoveries experienced by the acquirer on those assets
covered under the agreement.
Losses on the covered assets of failed institutions are
shared between the acquirer and the FDIC, in its
receivership capacity, when losses occur through the
sale, foreclosure, loan modification, or charge-off of
loans under the terms of the SLA. The majority of the
agreements cover commercial and single-family loans
over a five- to ten-year shared-loss period, respectively,
with the receiver covering 80 percent of the losses
incurred by the acquirer and the acquiring institution
covering 20 percent. Prior to March 26, 2010, most
SLAs included a threshold amount, above which the
receiver covered 95 percent of the losses incurred by
the acquirer. Recoveries by the acquirer on covered

commercial and single-family SLA losses are also
shared over an eight- to ten-year period, respectively.
Note that future recoveries on SLA losses are not
factored into the DIF allowance for loss calculation
because the amount and timing of such receipts are
not determinable.
The estimated shared-loss liability is accounted for
by the receiver and is included in the calculation of
the DIF’s allowance for loss against the corporate
receivable from the resolution. As shared-loss claims
are asserted and proven, DIF receiverships satisfy these
shared-loss payments using available liquidation funds
and/or by drawing on amounts due from the DIF
for funding the deposits assumed by the acquirer
(see Note 6).
Shared-loss transactions are summarized as follows
(in thousands).
December 31
2015

Payments for shared-loss
$33,475,276
agreements to date
Recoveries from
shared-loss agreements
to date
(4,468,296)
Net shared-loss payments
made to date
$29,006,980
Projected shared-loss
payments, net of
“true-up” recoveries

December 31
2014
$31,790,385

(3,620,038)
$28,170,347

$1,560,124

Total remaining sharedloss covered assets

$3,942,689

$31,478,451

$54,589,505

The $23.1 billion reduction in the remaining sharedloss covered assets from 2014 to 2015 is primarily due
to the liquidation of covered assets from active SLAs,
expiration of loss coverage for 113 commercial loan
SLAs, and early termination of 66 SLAs during 2015.

CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the DIF
to concentrations of credit risk are receivables from
resolutions. The repayment of these receivables is
primarily influenced by recoveries on assets held by
DIF receiverships and payments on the covered assets

FINANCIAL SECTION

99

under SLAs. The majority of the remaining assets
in liquidation ($4.8 billion) and current shared-loss
covered assets ($31.5 billion), which together total
$36.3 billion, are concentrated in commercial loans
($5.8 billion), residential loans ($25.7 billion), and
structured transaction-related assets ($3.5 billion) as
described in Note 8. Most of the assets originated
from failed institutions located in California ($13.8
billion), Puerto Rico ($5.2 billion), Florida ($4.2
billion), Ohio ($2.8 billion), Texas ($1.9 billion), and
Alabama ($1.7 billion).

5.	PROPERTY AND
EQUIPMENT, NET
Depreciation expense was $52 million and $60
million for 2015 and 2014, respectively. The
“Property and equipment, net” line item on the
Balance Sheet consisted of the following components
(in thousands).
December 31
2015

Land
Buildings (including
building and leasehold
improvements)
Application software
(includes work-in-process)
Furniture, fixtures, and
equipment
Accumulated depreciation
Total

December 31
2014

$37,352

$37,352

342,267

326,067

132,280

142,907

73,432

104,761

(207,081)

(238,668)

$378,250

$372,419

6.	LIABILITIES DUE
TO RESOLUTIONS
As of December 31, 2015 and 2014, the DIF
recorded liabilities totaling $4.4 billion and $7.8
billion, respectively, to resolution entities representing
the agreed-upon value of assets transferred from the
receiverships, at the time of failure, to the acquirers/
bridge institutions for use in funding the deposits
assumed by the acquirers/bridge institutions. Eighty-

100

seven percent of these liabilities are due to failures
resolved under whole-bank purchase and assumption
transactions, most with an accompanying SLA. The
DIF satisfies these liabilities either by sending cash
directly to a receivership to fund shared-loss and other
expenses or by offsetting receivables from resolutions
when a receivership declares a dividend.

7.	CONTINGENT LIABILITIES
ANTICIPATED FAILURE OF
INSURED INSTITUTIONS
The DIF records a contingent liability and a loss
provision for DIF-insured institutions that are
likely to fail when the liability is probable and
reasonably estimable, absent some favorable event
such as obtaining additional capital or merging. The
contingent liability is derived by applying expected
failure rates and loss rates to the institutions based on
supervisory ratings, balance sheet characteristics, and
projected capital levels.
The banking industry’s financial condition and
performance continued to improve in 2015.
According to the quarterly financial data submitted
by DIF-insured institutions, the industry reported
total net income of $123.4 billion for the first nine
months of 2015, an increase of 6.2 percent over
the comparable period one year ago. The industry’s
capital levels also continued to improve, and
noncurrent loans declined, as the industry’s ratio of
noncurrent loans-to-total loans fell to its lowest level
since year-end 2007.
Losses to the DIF from failures that occurred in 2015
were lower than the contingent liability at the end of
2014, as the aggregate number and cost of institution
failures were less than anticipated. The removal of the
liability from institutions that failed in 2015, as well
as favorable trends in bank supervisory downgrade
and failure rates, all contributed to a decline in the
contingent liability from $1.8 billion at December 31,
2014 to $395 million at December 31, 2015.

FEDERAL DEPOSIT INSURANCE CORPORATION

In addition to the recorded contingent liabilities, the
FDIC has identified risks in the financial services
industry that could result in additional losses to
the DIF, should potentially vulnerable insured
institutions ultimately fail. As a result of these risks,
the FDIC believes that it is reasonably possible that
the DIF could incur additional estimated losses of
approximately $800 million as of December 31,
2015, as compared to $1.7 billion as of year-end
2014. The actual losses, if any, will largely depend
on future economic and market conditions and could
differ materially from this estimate.
During 2015, eight institutions failed with combined
assets of $5.7 billion at the date of failure. Recent
trends in supervisory ratings and market data suggest
that the financial performance and condition of the
banking industry should continue to improve over the
coming year. However, exposure to interest rate risk,
credit risk, reliance on short-term sources of funding,
and limited opportunities for revenue growth will
continue to stress the industry. Additionally, key
risks continue to weigh on the economic outlook as
well, including the impact of rising interest rates as
they return to more normal levels; fiscal challenges at
federal, state, and local levels; and global economic
risks. The FDIC continues to evaluate ongoing risks
to affected institutions in light of existing economic
and financial conditions, and the extent to which
such risks may put stress on the resources of the
insurance fund.

LITIGATION LOSSES
The DIF records an estimated loss for unresolved legal
cases to the extent that those losses are considered
probable and reasonably estimable. The FDIC
recorded probable litigation losses of $386 thousand
and $950 thousand for the DIF as of December 31,
2015 and 2014, respectively. In addition, the FDIC
has determined that there are $555 thousand of
reasonably possible losses from unresolved cases
as of December 31, 2015, compared to none at
year-end 2014.

8.	OTHER CONTINGENCIES
INDYMAC FEDERAL BANK
REPRESENTATION AND
INDEMNIFICATION
CONTINGENT LIABILITY
On March 19, 2009, the FDIC as receiver for
IndyMac Federal Bank (IMFB) and certain
subsidiaries (collectively, Sellers) sold substantially
all of the assets, which included mortgage loans
and servicing rights, to OneWest Bank (following a
merger is now known as CIT Bank) and its affiliates
(collectively, Acquirers). The Sellers made certain
representations customarily made by commercial
parties in similar transactions. Under the sale
agreements, the Acquirers have rights to assert
claims to recover losses incurred as a result of thirdparty claims and breaches of representations. The
FDIC, in its corporate capacity, guaranteed the
Sellers’ indemnification obligations under the sale
agreements. Until all indemnification claims are
asserted, quantified and paid, losses could continue to
be incurred by the receivership and in turn, the DIF.
The unpaid principal balances of loans in the servicing
portfolios sold subject to representation and warranty
indemnification totaled $171.6 billion at the time of
sale. The IndyMac receivership has paid cumulative
claims totaling $21 million through December 31,
2015 and 2014. Quantified claims asserted and
under review have been accrued in the amount of
$1 million and $6 million as of December 31, 2015
and 2014, respectively.
Fannie Mae has demanded the repurchase of $87
million of conventional and reverse mortgage loans.
However, the Sellers do not anticipate repurchasing
any mortgage loans from Fannie Mae. Instead,
the Sellers and the Acquirers are negotiating the
terms of a financial settlement for the Fannie Mae
portfolio. It is anticipated this settlement would
resolve indemnification obligations of the Sellers
to the Acquirers and Fannie Mae. As a result, it is
probable the Sellers will incur losses. The impact

FINANCIAL SECTION

101

of this receivership estimated loss is reflected in the
“Receivables from resolutions, net” line item on the
Balance Sheet.
The FDIC is evaluating the likelihood of additional
losses that may arise as a result of indemnification
claims based upon breaches or third party claims.
As the Acquirers or Government Sponsored Entities
(GSEs) – Fannie Mae, Freddie Mac and Ginnie Mae
incur or expect to incur losses, they will assert claims.
These claims will be reviewed to determine whether
there is a basis for indemnification or reimbursement
and, if so, whether any Acquirer may have liability for
any portion of the claimed loss as a result of its acts or
omissions. While many loans are subject to notices of
alleged breaches and a number of third party claims
have been asserted, not all breach allegations or third
party claims will result in a loss and certain losses may
be allocable to the Acquirers. As a result, potential
losses, and the Sellers’ share of such losses, cannot be
estimated. However, it is probable that future losses
will be incurred given the following:
•	 The Acquirers’ ability to submit breach notices was
subject to contractual bar dates that have passed.
In addition, their entitlement to reimbursement
for certain third party claims is dependent upon
those claims having been submitted prior to other
contractual dates, some of which have also passed.
However, the Acquirers retain the right to assert
indemnification claims for losses over the life of
those loans for which breach notices were timely
submitted.
•	 The Acquirers’ retain the right to seek
reimbursement for losses incurred as a result
of claims alleging breaches of loan seller
representations asserted by Fannie Mae or Ginnie
Mae on or prior to March 19, 2019, for their
reverse mortgage servicing portfolios (unpaid
principal balance of $12.9 billion at December 31,
2015, compared to $14.2 billion at December 31,
2014).

102

•	 The GSEs have the right to assert certain claims
directly against the Sellers for the mortgage servicing
portfolios without regard to any contractual claims
bar date.
•	 Potential losses could be incurred for failures by
the Sellers to initiate and pursue foreclosure within
prescribed timeframes for certain government
guaranteed loans, resulting in the refusal of the
guarantor to pay interest owed to the investors.
Fannie Mae has asserted a claim for $64 million
of interest curtailments with respect to reverse
loans. Any amounts paid to Fannie Mae will be
allocated between the Sellers and the Acquirers. A
review of the causes of this claimed loss as well as
an allocation of this loss between the Sellers and the
Acquirers is in the initial stages.
For all these reasons, the FDIC believes it is likely
that additional losses will be incurred. However,
quantifying the contingent liability associated with
the liabilities to investors and the Acquirers is subject
to a number of uncertainties, including market
conditions, the occurrence of borrower defaults and
resulting foreclosures and losses, and the allocation
of liability between the Sellers and the Acquirers.
Because of the uncertainties the FDIC has determined
that, while additional losses are probable, the amount
is not currently estimable.

PURCHASE AND ASSUMPTION
INDEMNIFICATION
In connection with purchase and assumption
agreements for resolutions, the FDIC, in its
receivership capacity, generally indemnifies the
purchaser of a failed institution’s assets and liabilities
in the event a third party asserts a claim against the
purchaser unrelated to the explicit assets purchased or
liabilities assumed at the time of failure. The FDIC,
in its corporate capacity, is a secondary guarantor if a
receivership is unable to pay. These indemnifications
generally extend for a term of six years after the

FEDERAL DEPOSIT INSURANCE CORPORATION

date of institution failure. The FDIC is unable to
estimate the maximum potential liability for these
types of guarantees as the agreements do not specify a
maximum amount and any payments are dependent
upon the outcome of future contingent events, the
nature and likelihood of which cannot be determined
at this time. During 2015 and 2014, the FDIC,
in its corporate capacity, made no indemnification
payments under such agreements, and no amount
has been accrued in the accompanying financial
statements with respect to these indemnification
guarantees.

FDIC GUARANTEED DEBT OF
STRUCTURED TRANSACTIONS
The FDIC, as receiver, uses three types of structured
transactions to dispose of certain performing and
non-performing residential mortgage loans,
commercial loans, construction loans, and mortgagebacked securities held by the receiverships. The three
types of structured transactions are limited liability
companies (LLCs), securitizations, and structured sale
of guaranteed notes (SSGNs).
Under the LLC structure, the FDIC, in its
receivership capacity, contributed a pool of assets to
a newly formed LLC and offered for sale, through
a competitive bid process, some of the equity in the
LLC. Since 2009, private investors purchased a 40- to
50-percent ownership interest in the LLC structures
for $1.6 billion in cash. The LLCs issued notes of
$4.4 billion to the receiverships to partially fund the
purchase of the assets; these notes were guaranteed by
the FDIC, in its corporate capacity. As of December
31, 2015, no guaranteed LLC notes remain. The $10
million outstanding guaranteed LLC note balance as
of December 31, 2014 was fully paid during 2015.
Securitizations and SSGNs (collectively, trusts) are
transactions in which certain assets or securities
from failed institutions are pooled and transferred
into a trust structure. The trusts issue senior and/
or subordinated debt instruments and owner trust or
residual certificates collateralized by the underlying
mortgage-backed securities or loans.

Since 2010, private investors purchased the senior
notes issued by the trusts for $6.2 billion in cash
and the receiverships hold the subordinated debt
instruments and owner trust or residual certificates.
In exchange for a fee, the FDIC, in its corporate
capacity, guarantees the timely payment of principal
and interest due on the senior notes, the latest
maturity of which is 2050. If the FDIC is required to
perform under its guarantees, it acquires an interest
in the cash flows of the trust equal to the amount of
guarantee payments made plus accrued interest. The
subordinated note holders and owner trust or residual
certificate holders receive cash flows from the entity
only after all expenses have been paid, the guaranteed
notes have been satisfied, and the FDIC has been
reimbursed for any guarantee payments.
All Structured Transactions with
FDIC Guaranteed Debt
Through December 31, 2015, the receiverships
have transferred a portfolio of loans with an unpaid
principal balance of $16.4 billion and mortgagebacked securities with a book value of $8.8 billion
to 14 LLCs and 11 trusts. The LLCs and trusts
subsequently issued notes guaranteed by the FDIC
in an original principal amount of $10.6 billion.
Since March 2013, there have been no new guarantee
transactions. As of December 31, 2015 and 2014,
the DIF collected guarantee fees totaling $265
million and $250 million, respectively, and recorded
a receivable for additional guarantee fees of $26
million and $42 million, respectively, included in the
“Interest receivable on investments and other assets,
net” line item on the Balance Sheet. All guarantee
fees are recorded as deferred revenue, included in
the “Accounts payable and other liabilities” line item
on the Balance Sheet, and recognized as revenue
primarily on a straight-line basis over the term of
the notes. As of December 31, 2015 and 2014, the
amount of deferred revenue recorded was $26 million
and $42 million, respectively. The DIF records no
other structured transaction-related assets or liabilities
on its balance sheet.

FINANCIAL SECTION

103

The estimated loss to the DIF from the guarantees
is derived from an analysis of the net present value
(using a discount rate of 3.7 percent) of the expected
guarantee payments by the FDIC, reimbursements
to the FDIC for guarantee payments, and guarantee
fee collections. As of December 31, 2015, it is
reasonably possible that the DIF could be required
to make guarantee payments totaling $25 million
for an SSGN transaction beginning in November
2019 through note maturity in December 2020,
compared to $29 million estimated as of December
31, 2014. Any guarantee payment made would be
fully reimbursed from the proceeds of the liquidation
of the SSGN’s underlying collateral. For all of the
remaining transactions, the estimated cash flows from
the trust assets provide sufficient coverage to fully
pay the debts. To date, the FDIC, in its corporate
capacity, has not provided, and does not intend to
provide, any form of financial or other type of support
for structured transactions that it was not previously
contractually required to provide.
As of December 31, 2015 and 2014, the maximum
loss exposure was zero and $10 million for LLCs and
$1.6 billion and $2.1 billion for trusts, respectively,
representing the sum of all outstanding debt
guaranteed by the FDIC.

9. ASSESSMENTS
The FDIC deposit insurance assessment system is
mandated by section 7 of the FDI Act and governed
by part 327 of title 12 of the Code of Federal
Regulations. The risk-based system requires the
payment of quarterly assessments by all IDIs.
In response to the Dodd-Frank Act, the FDIC
implemented several changes to the assessment system
and developed a comprehensive, long-term fund
management plan. The plan is designed to restore
and maintain a positive fund balance for the DIF even
during a banking crisis and achieve moderate, steady
assessment rates throughout any economic cycle.
Summarized below are actions taken to implement
reforms of the assessment system and provisions of the
comprehensive plan.

104

•	 The FDIC adopted a Restoration Plan to ensure
that the ratio of the DIF fund balance to estimated
insured deposits (reserve ratio) reaches 1.35 percent
by September 30, 2020, in lieu of the previous
target of 1.15 percent by the end of 2016. The
FDIC updates, at least semiannually, its loss and
income projections for the fund and, if needed,
increases or decreases assessment rates, following
notice-and-comment rulemaking, if required.
•	 The FDIC Board of Directors designates a reserve
ratio for the DIF and publishes the designated
reserve ratio (DRR) before the beginning of
each calendar year, as required by the FDI Act.
Accordingly, in October 2015, the FDIC adopted
a final rule maintaining the DRR at 2 percent for
2016. The DRR is an integral part of the FDIC’s
comprehensive, long-term management plan for the
DIF and is viewed as a long-range, minimum target
for the reserve ratio.
•	 The FDIC adopted a final rule that suspends
dividends indefinitely, and, in lieu of dividends,
adopts lower assessment rate schedules when the
reserve ratio reaches 1.15 percent, 2 percent, and
2.5 percent.
When the reserve ratio reaches 1.15 percent, lower
regular assessment rates for all IDIs will go into effect.
Additionally, upon reaching 1.15 percent, the DoddFrank Act requires that the FDIC offset the effect
of increasing the minimum reserve ratio from 1.15
percent to 1.35 percent on IDIs with less than $10
billion in total consolidated assets. To implement the
requirement, the FDIC issued a proposed rulemaking
on October 22, 2015, to add a surcharge to the
regular quarterly assessments of IDIs with $10 billion
or more in assets. Under the proposed rule:
•	 The surcharge would generally equal an annual rate
of 4.5 basis points applied to the assessment base
(with certain adjustments), begin in the quarter
after the reserve ratio first reaches or exceeds
1.15 percent, and continue for an estimated
eight quarters.
•	 The FDIC would provide assessment credits to
IDIs with total assets of less than $10 billion for

FEDERAL DEPOSIT INSURANCE CORPORATION

the portion of their assessments that contributed
to the growth in the reserve ratio between 1.15
percent and 1.35 percent to ensure that the effect
of reaching 1.35 percent is fully borne by the
larger institutions. Assessment credits would be
available as an offset to an institution’s future regular
assessment premiums.
•	 The FDIC would impose a shortfall assessment
on the larger institutions in order to achieve the
minimum reserve ratio of 1.35 percent by the
September 30, 2020 statutory deadline, in the event
the reserve ratio is greater than 1.15 percent but has
not reached 1.35 percent by the end of 2018.

ASSESSMENT REVENUE
Annual assessment rates averaged approximately 6.6
cents per $100 of the assessment base for 2015 and
2014, respectively. The assessment base is generally
defined as the average consolidated total assets minus
the average tangible equity (measured as Tier 1
capital) of the IDI during the assessment period.
The “Assessments receivable, net” line item on
the Balance Sheet of $2.2 billion and $2.0 billion
represents the estimated premiums due from IDIs for
the fourth quarter of 2015 and 2014, respectively.
The actual deposit insurance assessments for the
fourth quarter of 2015 will be billed and collected at
the end of the first quarter of 2016. During 2015 and
2014, $8.8 billion and $8.7 billion, respectively, were
recognized as assessment revenue from institutions.

RESERVE RATIO
As of September 30, 2015 and December 31, 2014,
the DIF reserve ratio was 1.09 percent and 1.01
percent, respectively, of estimated insured deposits.

ASSESSMENTS RELATED TO FICO
Assessments continue to be levied on institutions
for payments of the interest on obligations issued
by the Financing Corporation (FICO). The FICO
was established as a mixed-ownership government

corporation to function solely as a financing vehicle
for the former FSLIC. The annual FICO interest
obligation of approximately $790 million is paid on
a pro rata basis using the same rate for banks and
thrifts. The FICO assessment has no financial impact
on the DIF and is separate from deposit insurance
assessments. The FDIC, as administrator of the DIF,
acts solely as a collection agent for the FICO. As of
December 31, 2015 and 2014, approximately $798
million and $793 million, respectively, was collected
and remitted to the FICO.

10.	 OPERATING EXPENSES
The “Operating expenses” line item on the Statement
of Income and Fund Balance consisted of the
following components (in thousands).
December 31
2015

Salaries and benefits
Outside services
Travel
Buildings and leased space
Software/Hardware
maintenance
Depreciation of property
and equipment
Other
Subtotal
Less: Expenses billed to
resolution entities
Total

December 31
2014

$1,248,146

$1,252,167

280,050

263,649

97,819

93,720

90,945

96,596

62,604

58,844

52,233

59,634

28,314

28,999

1,860,111

1,853,609

(172,877)

(189,265)

$1,687,234

$1,664,344

11.	 PROVISION FOR
INSURANCE LOSSES
The provision for insurance losses was a negative $2.3
billion for 2015, compared to negative $8.3 billion
for 2014. The negative provision for 2015 primarily
resulted from a decrease of $2.2 billion in the
estimated losses for institutions that failed in current
and prior years.

FINANCIAL SECTION

105

As described in Note 4, the estimated recoveries
from assets held by receiverships and estimated
payments related to assets sold by receiverships to
acquiring institutions under shared-loss agreements
(SLAs) are used to derive the loss allowance on
the receivables from resolutions. The $2.2 billion
decrease in the estimated losses from failures was
primarily attributable to four components. The first
component was unanticipated recoveries of $1.0
billion in litigation settlements, professional liability
claims, and tax refunds by the receiverships. These are
typically not recognized until the cash is received since
significant uncertainties surround their recovery.
The second component of the reduction in the
estimated losses from failures was a $1.4 billion
decrease in the receiverships’ shared-loss liability.
In 2015, covered asset balances decreased by $23.1
billion as a result of loan amortizations and paydowns, as well as the expiration of 113 commercial
shared-loss agreements and the early termination of 66
shared-loss agreements. Actual losses on this portion
of covered assets were less than estimated at year-end
2014. The composition of the remaining covered
asset portfolio primarily consists of performing single
family assets, which have historically experienced
significantly lower losses than commercial assets.
The remaining components consisted of an increase
in the estimated losses from failures of $715 million
that resulted from an increase in receivership legal and
representation and warranty liabilities and projected
future receivership expenses, as well as an adjustment
of $501 million for lower-than-anticipated loss
estimates at time of failure for all current year
failures. The net effect of these two components was
an increase of $214 million to estimated losses from
failures.

12.	 EMPLOYEE BENEFITS
PENSION BENEFITS AND SAVINGS PLANS
Eligible FDIC employees (permanent and term
employees with appointments exceeding one year) are

106

covered by the federal government retirement plans,
either the Civil Service Retirement System (CSRS) or
the Federal Employees Retirement System (FERS).
Although the DIF contributes a portion of pension
benefits for eligible employees, it does not account
for the assets of either retirement system. The DIF
also does not have actuarial data for accumulated
plan benefits or the unfunded liability relative to
eligible employees. These amounts are reported on
and accounted for by the U.S. Office of Personnel
Management (OPM).
Under the Federal Thrift Savings Plan (TSP), the
FDIC provides FERS employees with an automatic
contribution of 1 percent of pay and an additional
matching contribution up to 4 percent of pay. CSRS
employees also can contribute to the TSP, but they
do not receive agency matching contributions.
Eligible FDIC employees may also participate in an
FDIC-sponsored tax-deferred 401(k) savings plan
with matching contributions up to 5 percent. The
expenses for these plans are presented in the table
below (in thousands).
December 31
2015

Civil Service
Retirement System
Federal Employees
Retirement System
(Basic Benefit)
Federal Thrift Savings
Plan
FDIC Savings Plan
Total

December 31
2014

$3,949

$4,698

108,056

99,954

35,140

35,144

39,767

37,304

$186,912

$177,100

POSTRETIREMENT BENEFITS
OTHER THAN PENSIONS
The DIF has no postretirement health insurance
liability since all eligible retirees are covered by the
Federal Employees Health Benefits (FEHB) program.
The FEHB is administered and accounted for by the
OPM. In addition, OPM pays the employer share of
the retiree’s health insurance premiums.

FEDERAL DEPOSIT INSURANCE CORPORATION

The FDIC provides certain life and dental insurance
coverage for its eligible retirees, the retirees’
beneficiaries, and covered dependents. Retirees
eligible for life and dental insurance coverage are those
who have qualified due to (1) immediate enrollment
upon appointment or five years of participation in
the plan and (2) eligibility for an immediate annuity.
The life insurance program provides basic coverage
at no cost to retirees and allows converting optional
coverage to direct-pay plans. For the dental coverage,
retirees are responsible for a portion of the premium.

The FDIC has elected not to fund the postretirement
life and dental benefit liabilities. As a result,
the DIF recognized the underfunded status (the
difference between the accumulated postretirement
benefit obligation and the plan assets at fair value)
as a liability. Since there are no plan assets, the
plan’s benefit liability is equal to the accumulated
postretirement benefit obligation.
Postretirement benefit obligation, gain and loss, and
expense information included in the Balance Sheet
and Statement of Income and Fund Balance are
summarized as follows (in thousands).
December 31
2015

Accumulated postretirement benefit obligation recognized in
Postretirement benefit liability
Amounts recognized in accumulated other comprehensive income:
Unrealized postretirement benefit loss
Cumulative net actuarial loss
Prior service cost
Total

December 31
2014

$233,000

$243,419

$(31,938)

$(55,131)

(2,110)

(2,620)

$(34,048)

$(57,751)

$23,193

$(41,527)

Amounts recognized in other comprehensive income:
Unrealized postretirement benefit gain (loss)
Actuarial gain (loss)
Prior service credit
Total

510

126

$23,703

$(41,401)

Net amortization out of other comprehensive income
included in net periodic benefit cost

$3,842

$126

FINANCIAL SECTION

107

Expected amortization of accumulated other
comprehensive income into net periodic benefit
cost is summarized as follows (in thousands).

COMMITMENTS:

December 31, 2016

Prior service costs
Net actuarial loss
Total

$575
992
$1,567

The annual postretirement contributions and benefits
paid are included in the table below (in thousands).
December 31
2015

Employer contributions
Plan participants’
contributions
Benefits paid

December 31
2014

$6,064

$5,579

$728
$(6,792)

The DIF leased space expense totaled $47 million and
$56 million for 2015 and 2014, respectively. The
FDIC’s lease commitments total $206 million for
future years. The lease agreements contain escalation
clauses resulting in adjustments, usually on an annual
basis. Future minimum lease commitments are as
follows (in thousands).

$(6,234)

2016

2017

2018

2019

2020

20212025

$6,388

$6,954

$7,488

$8,006

$8,563

$51,276

Assumptions used to determine the amount of the
accumulated postretirement benefit obligation and the
net periodic benefit costs are summarized as follows
(in thousands).
December 31 December 31
2015
2014

Discount rate for
future benefits
(benefit obligation)
Rate of compensation
increase
Discount rate
(benefit cost)
Dental health care
cost-trend rate
Assumed for next year
Ultimate
Year rate will
reach ultimate

Leased Space

$655

The expected contributions for the period ending
December 31, 2016, are $7.1 million. Expected
future benefit payments for each of the next 10 years
are presented in the following table (in thousands).

108

13.	 COMMITMENTS AND OFFBALANCE-SHEET EXPOSURE

4.29%

4.00%

3.70%

3.80%

4.00%

4.75%

4.70%

4.90%

4.50%

$50,097

2017

2018

$45,510 $32,196

2021/

2019

2020

Thereafter

$27,558

$14,151

$36,245

OFF-BALANCE-SHEET EXPOSURE:
Deposit Insurance
Estimates of insured deposits are derived primarily
from quarterly financial data submitted by IDIs to the
FDIC and represent the accounting loss that would be
realized if all IDIs were to fail and the acquired assets
provided no recoveries. As of September 30, 2015
and December 31, 2014, estimated insured deposits
for the DIF were $6.4 trillion and $6.2 trillion,
respectively.

14.	 DISCLOSURES ABOUT THE
FAIR VALUE OF FINANCIAL
INSTRUMENTS

4.50%

2017

2016

2016

Financial assets recognized and measured at
fair value on a recurring basis at each reporting date
include cash equivalents (see Note 2) and
the investment in U.S. Treasury obligations
(see Note 3). The DIF’s financial assets measured
at fair value consisted of the following components
(in thousands).

FEDERAL DEPOSIT INSURANCE CORPORATION

December 31, 2015
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)

Assets
Cash equivalents1
Available-for-Sale Debt Securities
Investment in U.S. Treasury Obligations2
Total Assets

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
Assets
at Fair
Value

$ 861,712

$ 861,712

62,496,959

62,496,959

$63,358,671

$0

$0

$63,358,671

1
Cash equivalents are Special U.S. Treasury Certificates with overnight maturities valued at prevailing interest rates established by the Bureau of
the Fiscal Service.
2

The investment in U.S. Treasury obligations is measured based on prevailing market yields for federal government entities.

December 31, 2014
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)

Assets
Cash equivalents1
Available-for-Sale Debt Securities
Investment in U.S. Treasury Obligations2
Total Assets

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
Assets
at Fair
Value

$ 1,900,105

$1,900,105

49,805,846

49,805,846

$51,705,951

$0

$0

$51,705,951

1
Cash equivalents are Special U.S. Treasury Certificates with overnight maturities valued at prevailing interest rates established by the Bureau of
the Fiscal Service.
2

The investment in U.S. Treasury obligations is measured based on prevailing market yields for federal government entities.

Some of the DIF’s financial assets and liabilities
are not recognized at fair value but are recorded at
amounts that approximate fair value due to their short
maturities and/or comparability with current interest
rates. Such items include assessments receivable,
interest receivable on investments, other short-term
receivables, and accounts payable and other liabilities.
The net receivables from resolutions primarily include
the DIF’s subrogated claim arising from obligations
to insured depositors. The resolution entity assets
that will ultimately be used to pay the corporate
subrogated claim are valued using discount rates that
include consideration of market risk. These discounts
ultimately affect the DIF’s allowance for loss against

the receivables from resolutions. Therefore, the
corporate subrogated claim indirectly includes the
effect of discounting and should not be viewed as
being stated in terms of nominal cash flows.
Although the value of the corporate subrogated claim
is influenced by the valuation of resolution entity
assets (see Note 4), such valuation is not equivalent
to the valuation of the corporate claim. Since the
corporate claim is unique, not intended for sale to the
private sector, and has no established market, it is not
practicable to estimate a fair value.
The FDIC believes that a sale to the private sector of
the corporate claim would require indeterminate, but

FINANCIAL SECTION

109

substantial, discounts for an interested party to profit
from these assets because of credit and other risks. In
addition, the timing of resolution entity payments
to the DIF on the subrogated claim does not
necessarily correspond with the timing of collections
on resolution entity assets. Therefore, the effect of
discounting used by resolution entities should not
necessarily be viewed as producing an estimate of fair
value for the net receivables from resolutions.

16. SUBSEQUENT EVENTS
Subsequent events have been evaluated through
February 4, 2016, the date the financial statements are
available to be issued, and management determined
that there are no items to disclose.

15.	 INFORMATION RELATING
TO THE STATEMENT OF
CASH FLOWS
The following table presents a reconciliation of
net income to net cash from operating activities
(in thousands).
December 31
2015

December 31
2014

$9,856,688

$15,599,812

1,411,376

1,387,067

12,465

(37,865)

52,233

59,634

2,415

465

(2,251,320)

(8,305,577)

23,703

(41,401)

(169,048)

224,311

242,128

(137,462)

7,425,888

7,077,627

(18,435)

(9,569)

(10,419)

49,828

(3,380,084)

(4,826,703)

$13,197,590

$11,040,167

Operating Activities
Net Income:
Adjustments to reconcile net income to net cash provided
by operating activities:
Amortization of U.S. Treasury obligations
Treasury Inflation-Protected Securities inflation adjustment
Depreciation on property and equipment
Loss on retirement of property and equipment
Provision for insurance losses
Unrealized gain (loss) on postretirement benefits
Change in Assets and Liabilities:
(Increase) Decrease in assessments receivable, net
Decrease (Increase) in interest receivable and other assets
Decrease in receivables from resolutions
(Decrease) in accounts payable and other liabilities
(Decrease) Increase in postretirement benefit liability
(Decrease) in liabilities due to resolutions
Net Cash Provided by Operating Activities

110

FEDERAL DEPOSIT INSURANCE CORPORATION

FSLIC RESOLUTION FUND (FRF)
F E D E R A L D E P O S I T I N S U R A N C E C O R P O R AT I O N
F S L I C R E S O LU T I O N F U N D B A L A N C E S H E E T AT D E C E M B E R 31
Do l l a r s i n T h o u s a n ds
2015

2014

$871,037

$870,943

0

356,455

760

904

$871,797

$1,228,302

$624

$370

0

356,455

624

356,825

125,489,317

125,332,156

(124,618,144)

(124,460,679)

871,173

871,477

$871,797

$1,228,302

Assets
Cash and cash equivalents
Receivables from U.S. Treasury for goodwill litigation (Note 3)
Other assets, net
Total Assets
Liabilities
Accounts payable and other liabilities
Contingent liabilities for goodwill litigation (Note 3)
Total Liabilities
Resolution Equity (Note 4)
Contributed capital
Accumulated deficit
Total Resolution Equity
Total Liabilities and Resolution Equity
The accompanying notes are an integral part of these financial statements.

FINANCIAL SECTION

111

FSLIC RESOLUTION FUND (FRF)
F E D E R A L D E P O S I T I N S U R A N C E C O R P O R AT I O N
F S L I C R E S O LU T I O N F U N D S TAT E M E N T O F I N C O M E A N D
A C C U M U L AT E D D E F I C I T F O R T H E Y E A R S E N D E D D E C E M B E R 31
Doll a r s i n T h o u s a n ds
2015

2014

Revenue

Interest on U.S. Treasury obligations
Other revenue
Total Revenue

Net Loss
Accumulated Deficit - Beginning
Accumulated Deficit - Ending
The accompanying notes are an integral part of these financial statements.

112

FEDERAL DEPOSIT INSURANCE CORPORATION

$229

2,309

948

2,607

1,177

3,064

2,326

(260)

(792)

157,161

0

107

171

160,072

1,705

(157,465)

Expenses and Losses
Operating expenses
Provision for losses
Goodwill litigation expenses (Note 3)
Other expenses
Total Expenses and Losses

$298

(528)

(124,460,679)

(124,460,151)

$(124,618,144)

$(124,460,679)

FSLIC RESOLUTION FUND (FRF)
F E D E R A L D E P O S I T I N S U R A N C E C O R P O R AT I O N
F S L I C R E S O LU T I O N F U N D S TAT E M E N T O F C A S H F L OW S
FOR THE YEARS ENDED DECEMBER 31
Do l l a r s i n T h o u s a n ds
2015

2014

Operating Activities
Provided by:
Interest on U.S. Treasury obligations
Recoveries from financial institution resolutions
Miscellaneous receipts
Used by:
Operating expenses
Payments for goodwill litigation (Note 3)
Net Cash (Used) by Operating Activities
Financing Activities
Provided by:
U.S. Treasury payments for goodwill litigation (Note 3)
Net Cash Provided by Financing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents - Beginning
Cash and Cash Equivalents - Ending

$298

$229

2,555

1,886

24

197

(2,783)

(2,981)

(513,616)

0

(513,522)

(669)

513,616

0

513,616

0

94

(669)

870,943

871,612

$871,037

$870,943

The accompanying notes are an integral part of these financial statements.

FINANCIAL SECTION

113

N OT E S TO T H E
F I N A N C I A L S TAT E M E N T S
FSLIC RESOLUTION FUND
December 31, 2015 and 2014
1.	OPERATIONS/DISSOLUTION OF
THE FSLIC RESOLUTION FUND
OVERVIEW
The Federal Deposit Insurance Corporation (FDIC)
is the independent deposit insurance agency created
by Congress in 1933 to maintain stability and public
confidence in the nation’s banking system. Provisions
that govern the FDIC’s operations are generally
found in the Federal Deposit Insurance (FDI) Act,
as amended (12 U.S.C. 1811, et seq). In accordance
with the FDI Act, the FDIC, as administrator of the
Deposit Insurance Fund (DIF), insures the deposits
of banks and savings associations (insured depository
institutions). In cooperation with other federal and
state agencies, the FDIC promotes the safety and
soundness of insured depository institutions (IDIs)
by identifying, monitoring, and addressing risks to
the DIF.
In addition to being the administrator of the DIF, the
FDIC is the administrator of the FSLIC Resolution
Fund (FRF). As such, the FDIC is responsible for the
sale of remaining assets and satisfaction of liabilities
associated with the former Federal Savings and Loan
Insurance Corporation (FSLIC) and the former
Resolution Trust Corporation (RTC). The FDIC
maintains the DIF and the FRF separately to support
their respective functions.
The FSLIC was created through the enactment of
the National Housing Act of 1934. The Financial
Institutions Reform, Recovery, and Enforcement Act
of 1989 (FIRREA) abolished the insolvent FSLIC and
created the FRF. At that time, the assets and liabilities

114

of the FSLIC were transferred to the FRF – except
those assets and liabilities transferred to the newly
created RTC – effective on August 9, 1989. Further,
the FIRREA established the Resolution Funding
Corporation (REFCORP) to provide part of the
initial funds used by the RTC for thrift resolutions.
The RTC Completion Act of 1993 terminated the
RTC as of December 31, 1995. All remaining assets
and liabilities of the RTC were transferred to the FRF
on January 1, 1996. Today, the FRF consists of two
distinct pools of assets and liabilities: one composed
of the assets and liabilities of the FSLIC transferred
to the FRF upon the dissolution of the FSLIC (FRFFSLIC), and the other composed of the RTC assets
and liabilities (FRF-RTC). The assets of one pool are
not available to satisfy obligations of the other.

OPERATIONS/DISSOLUTION OF THE FRF
The FRF will continue operations until all of its assets
are sold or otherwise liquidated and all of its liabilities
are satisfied. Any funds remaining in the FRF-FSLIC
will be paid to the U.S. Treasury. Any remaining
funds of the FRF-RTC will be distributed to the
REFCORP to pay the interest on the REFCORP
bonds. In addition, the FRF-FSLIC has available
until expended $602 million in appropriations to
facilitate, if required, efforts to wind up the resolution
activity of the FRF-FSLIC.
The FDIC has extensively reviewed and cataloged
the FRF’s remaining assets and liabilities. Some of
the unresolved issues are:
•	 criminal restitution orders (generally have from 1 to
17 years remaining to enforce);
•	 collections of settlements and judgments obtained
against officers and directors and other professionals
responsible for causing or contributing to thrift

FEDERAL DEPOSIT INSURANCE CORPORATION

losses (generally have up to 7 years remaining to
enforce, unless the judgments are renewed or are
covered by the Federal Debt Collections Procedures
Act, which will result in significantly longer periods
for collection of some judgments);
•	 liquidation/disposition of residual assets purchased
by the FRF from terminated receiverships;
•	 three remaining issues related to assistance
agreements entered into by the former FSLIC (FRF
could continue to receive or refund overpayments of
tax benefits sharing in future years);
•	 goodwill litigation (reimbursement of a potential tax
liability; see Note 3); and
•	 affordable housing disposition program monitoring
(the last agreement expires no later than 2045; see
Note 3).
The FRF could realize recoveries from tax benefits
sharing, criminal restitution orders, and professional
liability claims. However, any potential recoveries are
not reflected in the FRF’s financial statements, given
the significant uncertainties surrounding the ultimate
outcome.
On April 1, 2014, the FDIC concluded its role
as receiver of FRF receiverships when the last
active receivership was terminated. In total, 850
receiverships were liquidated by the FRF and the
RTC. To facilitate receivership terminations, the
FRF, in its corporate capacity, acquired the remaining
receivership assets. These assets are included in the
“Other assets, net” line item on the Balance Sheet.
During the years of receivership activity, the assets
held by receivership entities, and the claims against
them, were accounted for separately from the FRF’s
assets and liabilities to ensure that receivership
proceeds were distributed in accordance with
applicable laws and regulations. Also, the income and
expenses attributable to receiverships were accounted
for as transactions of those receiverships. The FDIC
billed receiverships for services provided on their
behalf.

2.	SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
GENERAL
The financial statements include the financial
position, results of operations, and cash flows of
the FRF and are presented in accordance with U.S.
generally accepted accounting principles (GAAP).
During the years of receivership activity, these
statements did not include reporting for assets and
liabilities of receivership entities because these entities
were legally separate and distinct, and the FRF did
not have any ownership or beneficial interest in them.
The FRF is a limited-life entity, however, it does
not meet the requirements for presenting financial
statements using the liquidation basis of accounting.
According to Accounting Standards Codification
Topic 205, Presentation of Financial Statements, a
limited-life entity should apply the liquidation basis of
accounting only if a change in the entity’s governing
plan has occurred since its inception. By statute, the
FRF is a limited-life entity whose dissolution will
occur upon the satisfaction of all liabilities and the
disposition of all assets. No changes to this statutory
plan have occurred since inception of the FRF.

USE OF ESTIMATES
The preparation of the financial statements in
conformity with GAAP requires management to make
estimates and assumptions that affect the reported
amounts of assets and liabilities, revenue and expenses,
and disclosure of contingent liabilities. Actual
results could differ from these estimates. Where it
is reasonably possible that changes in estimates will
cause a material change in the financial statements in
the near term, the nature and extent of such potential
changes in estimates have been disclosed. The more
significant estimates include the valuation of other
assets and the estimated losses for litigation.

FINANCIAL SECTION

115

CASH EQUIVALENTS
Cash equivalents are short-term, highly liquid
investments consisting primarily of U.S. Treasury
Overnight Certificates.

PROVISION FOR LOSSES
The provision for losses represents the change in the
estimated losses related to other assets.

RELATED PARTIES
The nature of related parties and a description of
related party transactions are discussed in Note 1
and disclosed throughout the financial statements
and footnotes.

DISCLOSURE ABOUT RECENT RELEVANT
ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements have been
deemed not applicable or material to the financial
statements as presented.

3.	CONTINGENT LIABILITIES
GOODWILL LITIGATION
In United States v. Winstar Corp., 518 U.S. 839
(1996), the Supreme Court held that when it became
impossible following the enactment of FIRREA in
1989 for the federal government to perform certain
agreements to count goodwill toward regulatory
capital, the plaintiffs were entitled to recover
damages from the United States. The contingent
liability associated with the nonperformance of these
agreements was transferred to the FRF on August 9,
1989, upon the dissolution of the FSLIC.
The FRF can draw from an appropriation provided
by Section 110 of the Department of Justice
Appropriations Act, 2000 (Public Law 106-113,
Appendix A, Title I, 113 Stat. 1501A-3, 1501A20) such sums as may be necessary for the payment
of judgments and compromise settlements in the
goodwill litigation. This appropriation is to remain
available until expended.

116

Because an appropriation is available to pay such
judgments and settlements, any estimated liability
for goodwill litigation will have a corresponding
receivable from the U.S. Treasury and therefore have
no net impact on the financial condition of the FRF.
In December 2015, the FRF paid $513.6 million
to resolve the remaining active goodwill case using
appropriations received from the U.S. Treasury.
During 2015, the United States Court of Federal
Claims awarded the plaintiff additional mitigation
damages and estimated tax liabilities. These awards
were in addition to the previous award of $356.4
million, for which the FRF had recorded a contingent
liability and offsetting receivable as of December 31,
2014. For another case fully adjudicated in 2012,
an estimated loss of $8 million for the court-ordered
reimbursement of potential tax liabilities to the
plaintiff is reasonably possible.
In addition, the FRF-FSLIC pays the goodwill
litigation expenses incurred by the Department of
Justice (DOJ), the entity that defends these lawsuits
against the United States, based on a Memorandum
of Understanding (MOU) dated October 2, 1998,
between the FDIC and the DOJ. The FRF-FSLIC
pays in advance the estimated goodwill litigation
expenses. Any unused funds are carried over and
applied toward the next fiscal year (FY) charges. The
FRF-FSLIC did not provide any additional funding to
the DOJ in either 2015 or 2014 because the unused
funds from prior fiscal years were sufficient to cover
estimated expenses.

OTHER CONTINGENCIES
Paralleling the goodwill cases were similar cases
alleging that the government breached agreements
regarding tax benefits associated with certain FSLICassisted acquisitions. All eight of those cases have
been settled. However, a case settled in 2006 further
obligates the FRF-FSLIC as a guarantor for all tax
liabilities in the event the settlement amount is
determined by tax authorities to be taxable. The
maximum potential exposure under this guarantee
is approximately $100 million. However, the FDIC
believes that it is very unlikely the settlement will be

FEDERAL DEPOSIT INSURANCE CORPORATION

subject to taxation. The entity’s federal income tax
return for the 2006 taxable year has been amended
and remains subject to examination by the Internal
Revenue Service (IRS). To date, there has been no
assertion by the IRS of taxation for an issue covered
by the guarantee. As of December 31, 2015 and
2014, no contingent liability has been recorded, and
the FRF does not expect to fund any payment under
this guarantee.

FANNIE MAE GUARANTEE
On May 21, 2012, the FDIC, in its capacity as
administrator of the FRF, entered into an agreement
with Fannie Mae for the release of $13 million of
credit enhancement reserves to the FRF in exchange
for indemnifying Fannie Mae from all future losses
incurred on 76 multi-family mortgage loans. The
former RTC supplied Fannie Mae with the credit
enhancement reserves in the form of cash collateral to
cover future losses on these mortgage loans through
2020. Based on the most current data available, as
of September 30, 2015, the maximum exposure on
this indemnification is the current unpaid principal
balance of the remaining 45 multi-family loans
totaling $3.7 million. Based on a contingent liability
assessment of this portfolio as of September 30,
2015, the majority of the loans are at least 81 percent
amortized, and all are scheduled to mature within one
to five years. Since all of the loans are performing and
no losses have occurred since 2001, future payments
on this indemnification are not expected. No
contingent liability for this indemnification has been
recorded as of December 31, 2015 and 2014.

AFFORDABLE HOUSING
DISPOSITION PROGRAM
Required by FIRREA under section 501, the
Affordable Housing Disposition Program (AHDP)
was established in 1989 to ensure the preservation
of affordable housing for low-income households.

The FDIC, in its capacity as administrator of the
FRF-RTC, assumed responsibility for monitoring
property owner compliance with land use restriction
agreements (LURAs). To enforce the property owners’
LURA obligation, the RTC, prior to its dissolution,
entered into Memoranda of Understanding with 28
monitoring agencies to oversee these LURAs. The
FDIC, through the FRF, has agreed to indemnify the
monitoring agencies for all losses related to LURA
legal enforcement proceedings.
Since 2006, the FDIC entered into two litigations
against property owners and paid $23 thousand
in legal expenses, which was fully reimbursed due
to successful litigation. The maximum potential
exposure to the FRF cannot be estimated as it
is contingent upon future legal proceedings.
However, loss mitigation factors include: (1) the
indemnification may become void if the FDIC is
not immediately informed upon receiving notice of
any legal proceedings and (2) the FDIC is entitled
to reimbursement of any legal expenses incurred for
successful litigation against a property owner. AHDP
guarantees will continue until the termination of the
last LURA, or 2045 (whichever occurs first). As of
December 31, 2015 and 2014, no contingent liability
for this indemnification has been recorded.

4.	RESOLUTION EQUITY
As stated in the Overview section of Note 1, the FRF
is composed of two distinct pools: the FRF-FSLIC
and the FRF-RTC. The FRF-FSLIC consists of the
assets and liabilities of the former FSLIC. The FRFRTC consists of the assets and liabilities of the former
RTC. Pursuant to legal restrictions, the two pools are
maintained separately and the assets of one pool are
not available to satisfy obligations of the other.
Contributed capital, accumulated deficit, and
resolution equity consisted of the following
components by each pool (in thousands).

FINANCIAL SECTION

117

December 31, 2015
FRF-FSLIC

FRF
Consolidated

$43,707,819

$81,624,337

$125,332,156

157,161

0

157,161

43,864,980

81,624,337

125,489,317

(43,036,684)

(81,581,460)

(124,618,144)

$828,296

Contributed capital - beginning
Add: U.S.Treasury payment in excess of prior year receivable
Contributed capital - ending
Accumulated deficit
Total Resolution Equity

FRF-RTC

$42,877

$871,173

December 31, 2014
FRF
Consolidated

FRF-FSLIC
$43,707,819

CONTRIBUTED CAPITAL
The FRF-FSLIC and the former RTC received $43.5
billion and $60.1 billion from the U.S. Treasury,
respectively, to fund losses from thrift resolutions
prior to July 1, 1995. Additionally, the FRFFSLIC issued $670 million in capital certificates
to the Financing Corporation (a mixed-ownership
government corporation established to function
solely as a financing vehicle for the FSLIC) and the
RTC issued $31.3 billion of these instruments to
the REFCORP. FIRREA prohibited the payment of
dividends on any of these capital certificates.
The FRF-FSLIC received $513.6 million in U.S.
Treasury payments for goodwill litigation in 2015,
of which $356.4 million was accrued as a receivable
at year-end 2014. The $157.2 million difference
increased contributed capital in 2015. Through
December 31, 2015, the FRF received a total of $2.3
billion in goodwill appropriations, the effect of which
increased contributed capital.
Through December 31, 2015, the FRF-RTC had
returned $4.6 billion to the U.S. Treasury and made
payments of $5.1 billion to the REFCORP. The
most recent payment to the REFCORP was in July
of 2013 for $125 million. In addition, the FDIC

118

$81,624,337

$125,332,156

43,707,819

81,624,337

125,332,156

(42,879,590)

(81,581,089)

(124,460,679)

$828,229

Contributed capital - beginning
Contributed capital - ending
Accumulated deficit
Total Resolution Equity

FRF-RTC

$43,248

$871,477

returned $2.6 billion to the U.S. Treasury on behalf
of the FRF-FSLIC in 2013. These actions reduced
contributed capital.

ACCUMULATED DEFICIT
The accumulated deficit represents the cumulative
excess of expenses and losses over revenue for activity
related to the FRF-FSLIC and the FRF-RTC.
Approximately $29.8 billion and $87.9 billion were
brought forward from the former FSLIC and the
former RTC on August 9, 1989, and January 1, 1996,
respectively. Since the dissolution dates, the FRFFSLIC accumulated deficit increased by $13.3 billion,
whereas the FRF-RTC accumulated deficit decreased
by $6.3 billion.

5.	DISCLOSURES ABOUT THE
FAIR VALUE OF FINANCIAL
INSTRUMENTS
At December 31, 2015 and 2014, the FRF’s financial
assets measured at fair value on a recurring basis are
cash equivalents of $828 million and $827 million,
respectively. Cash equivalents are Special U.S.
Treasury Certificates with overnight maturities valued
at prevailing interest rates established by the Bureau

FEDERAL DEPOSIT INSURANCE CORPORATION

of the Fiscal Service. The valuation is considered
a Level 1 measurement in the fair value hierarchy,
representing quoted prices in active markets for
identical assets.
Some of the FRF’s financial assets and liabilities
are not recognized at fair value but are recorded at
amounts that approximate fair value due to their short
maturities and/or comparability with current interest
rates. Such items include receivables from the U.S.
Treasury for goodwill litigation and accounts payable
and other liabilities.

7. SUBSEQUENT EVENTS
Subsequent events have been evaluated through
February 4, 2016, the date the financial statements are
available to be issued, and management determined
that there are no items to disclose.

Assets purchased by the FRF from terminated
receiverships (see Note 1) and included in the
“Other assets, net” line item on the Balance Sheet are
primarily valued using projected cash flow analyses;
however, these valuations do not represent an estimate
of fair value. These assets (ranging in age between 21
to 26 years), could not be liquidated during the life of
the receiverships due to restrictive clauses and other
impediments. Because these impediments remain,
there is no market for these assets. Consequently, it is
not practicable to provide an estimate of fair value.

6.	INFORMATION RELATING
TO THE STATEMENT OF
CASH FLOWS
The following table presents a reconciliation of
net loss to net cash from operating activities
(in thousands)
December 31
2015

Operating Activities
Net Loss:
Adjustments to reconcile net loss to net cash (used)
by operating activities:
Provision for losses
Change in Assets and Liabilities:
Decrease in other assets
Increase (Decrease) in accounts payable and other liabilities
(Decrease) in contingent liabilities for goodwill litigation
Net Cash (Used) by Operating Activities

December 31
2014

$(157,465)

$(528)

(260)

(792)

404

1,071

254

(420)

(356,455)

0

$(513,522)

$(669)

FINANCIAL SECTION

119

GOVERNMENT ACCOUNTABILITY OFFICE AUDITOR’S REPORT

120

FEDERAL DEPOSIT INSURANCE CORPORATION

GOVERNMENT ACCOUNTABILITY OFFICE AUDITOR’S REPORT
(continued)

FINANCIAL SECTION

121

GOVERNMENT ACCOUNTABILITY OFFICE AUDITOR’S REPORT
(continued)

122

FEDERAL DEPOSIT INSURANCE CORPORATION

GOVERNMENT ACCOUNTABILITY OFFICE AUDITOR’S REPORT
(continued)

FINANCIAL SECTION

123

GOVERNMENT ACCOUNTABILITY OFFICE AUDITOR’S REPORT
(continued)

124

FEDERAL DEPOSIT INSURANCE CORPORATION

GOVERNMENT ACCOUNTABILITY OFFICE AUDITOR’S REPORT
(continued)

FINANCIAL SECTION

125

GOVERNMENT ACCOUNTABILITY OFFICE AUDITOR’S REPORT
(continued)

126

FEDERAL DEPOSIT INSURANCE CORPORATION

Appendix I

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING

FINANCIAL SECTION

127

Appendix II

MANAGEMENT’S RESPONSE TO THE AUDITOR’S REPORT

128

FEDERAL DEPOSIT INSURANCE CORPORATION

V I .	

C O R P O R AT E M A N A G E M E N T
C O N T RO L

VI.

Corporate
Management
Control

129

THIS PAGE INTENTIONALLY LEFT BLANK

The FDIC uses several means to maintain
comprehensive internal controls, ensure the overall
effectiveness and efficiency of operations, and
otherwise comply as necessary with the following
federal standards, among others:

The FDIC has received unmodified/unqualified
opinions on its financial statement audits for 24
consecutive years, and these and other positive results
reflect the effectiveness of the overall management
control program.

•	 Chief Financial Officers’ Act (CFO Act)
•	 Federal Managers’ Financial Integrity Act (FMFIA)
•	 Federal Financial Management Improvement Act
(FFMIA)
•	 Government Performance and Results Act (GPRA)
•	 Federal Information Security Management Act
(FISMA)

In 2015, efforts were focused on human resources,
process mapping, continuation of activities associated
with the Dodd-Frank Act, and contract oversight.
Considerable energy was devoted to ensuring that the
FDIC’s processes and systems of control have kept
pace with the workload, and that the foundation of
controls throughout the FDIC remained strong.

•	 OMB Circular A-123
•	 GAO’s Standards for Internal Control in the Federal
Government
As a foundation for these efforts, the Division of
Finance Corporate Management Control Branch
oversees a corporate-wide program of relevant
activities by establishing policies and working with
management in each division and office in the FDIC.
The FDIC has made a concerted effort to ensure that
financial, reputational, and operational risks have been
identified and that corresponding control needs are
being incorporated into day-to-day operations. The
program also requires that comprehensive procedures
be documented, employees be thoroughly trained,
and supervisors be held accountable for performance
and results. Compliance monitoring is carried out
through periodic management reviews and by the
distribution of various activity reports to all levels of
management. Conscientious attention is also paid to
the implementation of audit recommendations made
by the FDIC Office of the Inspector General, the
GAO, and other providers of external/audit scrutiny.

During 2016, among other things, program
evaluation activities will focus on failed bank data;
the Identity, Credential and Access Control Program;
systems development associated with the Capital
Investment Review Committee; the Workforce
Development Initiative; and systems security.
Continued emphasis and management scrutiny
also will be applied to the accuracy and integrity of
transactions and oversight of systems development
efforts in general.

MANAGEMENT REPORT
ON FINAL ACTIONS
As required under amended Section 5 of the
Inspector General Act of 1978, the FDIC must report
information on final action taken by management
on certain audit reports. The tables on the following
pages provide information on final action taken by
management on audit reports for the federal fiscal
year period October 1, 2014, through September 30,
2015.

CORPORATE MANAGEMENT CONTROL

131

TA B L E 1 :
M A N A G E M E N T R E P O RT O N F I N A L A C T I O N O N AU D I T S
W I T H D I S A L L OW E D C O S T S F O R F I S C A L Y E A R 2 0 1 5
Doll a r s i n T h o u s a n ds

(There were no audit reports in this category.)
TA B L E 2 :
M A N A G E M E N T R E P O RT O N F I N A L A C T I O N O N AU D I T S
W I T H R E C O M M E N D AT I O N S TO P U T F U N D S TO B E T T E R U S E
FOR FISCAL YEAR 2015
Doll a r s i n T h o u s a n ds
Audit Reports

A.
B.
C.
D

E.

132

Management decisions – final action not taken at beginning of period
Management decisions made during the period
Total reports pending final action during the period (A and B)
Final action taken during the period:
1.	Value of recommendations implemented (completed)
2.	Value of recommendations that management concluded should not or
could not be implemented or completed
3.	Total of 1 and 2
Audit reports needing final action at the end of the period

FEDERAL DEPOSIT INSURANCE CORPORATION

Number of
Reports

Funds Put To
Better Use

0

$0

1

$4,586

1

$4,586

0

$0

0

$0

0

$0

1

$4,586

TA B L E 3 :
AU D I T R E P O RT S W I T H O U T F I N A L A C T I O N S B U T
W I T H M A N A G E M E N T D E C I S I O N S OV E R O N E Y E A R O L D
FOR FISCAL YEAR 2015
Report No.
and Issue Date

AUD-14-002
11/21/2013

OIG Audit Finding

Management Action

The Director, Division of Administration
(DOA), should coordinate with the
Division of Information Technology
(DIT) and FDIC division and office
officials, as appropriate, to address
potential gaps that may exist between the
12-hour time frame required to restore
mission essential functions following
an emergency and the 72-hour recovery
time objective for restoring missioncritical applications.

Disallowed
Costs

In addition to other steps that it has
already taken, DOA, in partnership with
the Office of Corporate Risk Management
and DIT, has convened a working group
to advance a risk management framework
that will enhance the FDIC’s business
continuity plans. The framework will
define a method for addressing potential
gaps that may exist between the 12-hour
requirement to restore mission essential
functions and the 72-hour recovery time
objective for restoring mission-critical
applications. A set of options and
recommendations will be presented to
executive management to either accept
identified risks or authorize resources to
close identified gaps.

$0

Due Date: 12/31/2016
EVAL-14-002
07/25/2014

The FDIC, FRB, and OCC should
consider the need to (1) increase their
level of written enforcement action
coordination to meet the requirements
of Federal Register policy statement 62
Fed. Reg. 7782, or (2) revise the policy
statement to reflect the regulators’
current level of coordination.

The Legal Division and the Division
of Risk Management Supervision will
revise the memo and devise a new policy
statement.

$0

Due Date: 4/30/2016

CORPORATE MANAGEMENT CONTROL

133

THIS PAGE INTENTIONALLY LEFT BLANK

V I I .	

APPENDICES

VII.

Appendices

135

THIS PAGE INTENTIONALLY LEFT BLANK

A. KEY STATISTICS
F D I C A C T I O N S O N F I N A N C I A L I N S T I T U T I O N S A P P L I C AT I O N S
2013–2015
2015

Deposit Insurance
Approved1
Denied
New Branches
Approved
Denied
Mergers
Approved
Denied
Requests for Consent to Serve2
Approved
	
Section 19
	
Section 32
Denied
	
Section 19
	
Section 32
Notices of Change in Control
Letters of Intent Not to Disapprove
Disapproved
Brokered Deposit Waivers
Approved
Denied
Savings Association Activities
Approved
Denied
State Bank Activities/Investments3
Approved
Denied
Conversion of Mutual Institutions
Non-Objection
Objection

2014

2013

5

2

10

5

2

10

0
548

0
520

0
499

548

520

499

0
270

0
251

0
256

270

251

256

0
240

0
327

0
474

239

327

474

7

7

4

232

320

470

1

0

0

0

0

0

1
20

0
15

0
22

20

15

22

0
20

0
46

0
81

20

46

81

0
1

0
4

0
8

1

4

8

0
10

0
14

0
10

10

14

10

0
4

0
4

0
7

4

4

7

0

0

0

Includes deposit insurance application filed on behalf of (1) newly organized institutions, (2) existing uninsured financial services companies seeking
establishment as an insured institution, and (3) interim institutions established to facilitate merger or conversion transactions, and applications to
facilitate the establishment of thrift holding companies.
1

Under Section 19 of the Federal Deposit Insurance (FDI) Act, an insured institution must receive FDIC approval before employing a person convicted of
dishonesty or breach of trust. Under Section 32, the FDIC must approve any change of directors or senior executive officers at a state nonmember bank
that is not in compliance with capital requirements or is otherwise in troubled condition.
2

3
Section 24 of the FDI Act, in general, prohibits a federally-insured state bank from engaging in an activity not permissible for a national bank and
requires notices to be filed with the FDIC.

APPENDICES

137

C O M B I N E D R I S K A N D C O N S U M E R E N F O RC E M E N T A C T I O N S
2013–2015
2015

Total Number of Actions Initiated by the FDIC

2014

2013

268

320

414

11

3

11

0

0

0

0

0

0

11

3

11

0

0

0

6

3

7

5

0

4

48

57

83

Notices of Charges Issued

3

1

2

Orders to Pay Restitution

9

7

11

36

48

70

0

1

0

88

101

113

4

4

14

84

97

99

0

2

0

45

66

94

0

0

0

36

62

81

9

4

13

19

16

16

51

69

88

51

68

86

0

1

2

0

0

0

64

69

98

0

0

0

0

0

0

64

69

98

189,505

164,777

123,134

6

6

9

Termination of Insurance
Involuntary Termination
	 Sec. 8a For Violations, Unsafe/Unsound Practices
	 or Conditions
Voluntary Termination
	 Sec. 8a By Order Upon Request
	 Sec. 8p No Deposits
	 Sec. 8q Deposits Assumed
Sec. 8b Cease-and-Desist Actions

Consent Orders
Personal Cease and Desist Orders

Sec. 8e Removal/Prohibition of Director or Officer
Notices of Intention to Remove/Prohibit
Consent Orders

Sec. 8g Suspension/Removal When Charged With Crime
Civil Money Penalties Issued
	 Sec. 7a Call Report Penalties
	 Sec. 8i Civil Money Penalties
	 Sec. 8i Civil Money Penalty Notices of Assessment
Sec. 10c Orders of Investigation
Sec. 19 Waiver Orders
	 Approved Section 19 Waiver Orders
	 Denied Section 19 Waiver Orders
Sec. 32 Notices Disapproving Officer/Director’s Request for Review
Truth-in-Lending Act Reimbursement Actions
	 Denials of Requests for Relief
	 Grants of Relief
	 Banks Making Reimbursement*
Suspicious Activity Reports (Open and closed institutions)*

Other Actions Not Listed

* These actions do not constitute the initiation of a formal enforcement action and, therefore, are not included in the total number of actions initiated.

138

FEDERAL DEPOSIT INSURANCE CORPORATION

E S T I M AT E D I N S U R E D D E P O S I T S A N D
THE DEPOSIT INSURANCE FUND,
D E C E M B E R 3 1 , 1 9 34 , T H RO U G H S E P T E M B E R 3 0 , 2 0 1 5 1
Dol l a rs in Mil lio n s (e xce pt In su r a n ce C ove r a g e )

Year
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987

Insurance
Coverage2
$250,000
250,000
250,000
250,000
250,000
250,000
250,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000

Total
Domestic
Deposits
$10,695,512
10,408,065
9,825,399
9,474,585
8,782,134
7,887,733
7,705,353
7,505,408
6,921,678
6,640,097
6,229,823
5,724,775
5,224,030
4,916,200
4,565,068
4,211,895
3,885,826
3,817,150
3,602,189
3,454,556
3,318,595
3,184,410
3,220,302
3,275,530
3,331,312
3,415,464
3,412,503
2,337,080
2,198,648

Deposits in Insured
Institutions2
Percentage
Est. Insured
of Domestic
Deposits
Deposits
$6,420,010
60.0
6,211,168
59.7
6,010,853
61.2
7,405,043
78.2
6,973,468
79.4
6,301,528
79.9
5,407,773
70.2
4,750,783
63.3
4,292,211
62.0
4,153,808
62.6
3,891,000
62.5
3,622,213
63.3
3,452,606
66.1
3,383,720
68.8
3,216,585
70.5
3,055,108
72.5
2,869,208
73.8
2,850,452
74.7
2,746,477
76.2
2,690,439
77.9
2,663,873
80.3
2,588,619
81.3
2,602,781
80.8
2,677,709
81.7
2,733,387
82.1
2,784,838
81.5
2,755,471
80.7
1,756,771
75.2
1,657,291
75.4

Deposit
Insurance
Fund
$70,115.2
62,780.2
47,190.8
32,957.8
11,826.5
(7,352.2)
(20,861.8)
17,276.3
52,413.0
50,165.3
48,596.6
47,506.8
46,022.3
43,797.0
41,373.8
41,733.8
39,694.9
39,452.1
37,660.8
35,742.8
28,811.5
23,784.5
14,277.3
178.4
(6,934.0)
4,062.7
13,209.5
14,061.1
18,301.8

Insurance Fund as
a Percentage of
Total
Domestic
Est. Insured
Deposits
Deposits
0.66
1.09
0.60
1.01
0.48
0.79
0.35
0.45
0.13
0.17
(0.09)
(0.12)
(0.27)
(0.39)
0.23
0.36
0.76
1.22
0.76
1.21
0.78
1.25
0.83
1.31
0.88
1.33
0.89
1.29
0.91
1.29
0.99
1.37
1.02
1.38
1.03
1.38
1.05
1.37
1.03
1.33
0.87
1.08
0.75
0.92
0.44
0.55
0.01
0.01
(0.21)
(0.25)
0.12
0.15
0.39
0.48
0.60
0.80
0.83
1.10

APPENDICES

139

E S T I M AT E D I N S U R E D D E P O S I TS A N D
T HE D E PO S I T I N S U R A N C E F U N D ,
D E C EMBE R 31, 1934, T H RO U G H S E P T E M B E R 3 0, 2 0 1 5 1 (c o n t i n u ed )
Dollar s in Million s (exc ep t In s u r a n c e C over a g e)
Deposits in Insured
Institutions2

Year

Insurance
Coverage2

Total Domestic
Deposits

1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
1972
1971
1970
1969
1968
1967
1966
1965
1964
1963
1962
1961
1960
1959
1958
1957
1956
1955
1954

100,000
100,000
100,000
100,000
100,000
100,000
100,000
40,000
40,000
40,000
40,000
40,000
40,000
20,000
20,000
20,000
20,000
20,000
15,000
15,000
15,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000

2,162,687
1,975,030
1,805,334
1,690,576
1,544,697
1,409,322
1,324,463
1,226,943
1,145,835
1,050,435
941,923
875,985
833,277
766,509
697,480
610,685
545,198
495,858
491,513
448,709
401,096
377,400
348,981
313,304
297,548
281,304
260,495
247,589
242,445
225,507
219,393
212,226
203,195

140

Est. Insured
Deposits

1,636,915
1,510,496
1,393,421
1,268,332
1,134,221
988,898
948,717
808,555
760,706
692,533
628,263
569,101
520,309
465,600
419,756
374,568
349,581
313,085
296,701
261,149
234,150
209,690
191,787
177,381
170,210
160,309
149,684
142,131
137,698
127,055
121,008
116,380
110,973

Insurance Fund as
a Percentage of

Percentage of
Insured Deposits

75.7
76.5
77.2
75.0
73.4
70.2
71.6
65.9
66.4
65.9
66.7
65.0
62.4
60.7
60.2
61.3
64.1
63.1
60.4
58.2
58.4
55.6
55.0
56.6
57.2
57.0
57.5
57.4
56.8
56.3
55.2
54.8
54.6

FEDERAL DEPOSIT INSURANCE CORPORATION

Deposit
Insurance
Fund

18,253.3
17,956.9
16,529.4
15,429.1
13,770.9
12,246.1
11,019.5
9,792.7
8,796.0
7,992.8
7,268.8
6,716.0
6,124.2
5,615.3
5,158.7
4,739.9
4,379.6
4,051.1
3,749.2
3,485.5
3,252.0
3,036.3
2,844.7
2,667.9
2,502.0
2,353.8
2,222.2
2,089.8
1,965.4
1,850.5
1,742.1
1,639.6
1,542.7

Total
Domestic
Deposits

0.84
0.91
0.92
0.91
0.89
0.87
0.83
0.80
0.77
0.76
0.77
0.77
0.73
0.73
0.74
0.78
0.80
0.82
0.76
0.78
0.81
0.80
0.82
0.85
0.84
0.84
0.85
0.84
0.81
0.82
0.79
0.77
0.76

Est. Insured
Deposits

1.12
1.19
1.19
1.22
1.21
1.24
1.16
1.21
1.16
1.15
1.16
1.18
1.18
1.21
1.23
1.27
1.25
1.29
1.26
1.33
1.39
1.45
1.48
1.50
1.47
1.47
1.48
1.47
1.43
1.46
1.44
1.41
1.39

E S T I M AT E D I N S U R E D D E P O S I TS A N D
T HE D E PO S I T I N S U R A N C E F U N D ,
D E C EM B E R 31, 1934, T H RO U G H S E P T E M B E R 3 0, 2 0 1 5 1 (c o n t inu ed )
Dollar s in Mill i o n s (exc ep t In s u r a n c e C over a g e)
Deposits in Insured
Institutions2

Year

Insurance
Coverage2

Total Domestic
Deposits

1953
1952
1951
1950
1949
1948
1947
1946
1945
1944
1943
1942
1941
1940
1939
1938
1937
1936
1935
1934

10,000
10,000
10,000
10,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000

193,466
188,142
178,540
167,818
156,786
153,454
154,096
148,458
157,174
134,662
111,650
89,869
71,209
65,288
57,485
50,791
48,228
50,281
45,125
40,060

Est. Insured
Deposits

105,610
101,841
96,713
91,359
76,589
75,320
76,254
73,759
67,021
56,398
48,440
32,837
28,249
26,638
24,650
23,121
22,557
22,330
20,158
18,075

Insurance Fund as
a Percentage of

Percentage of
Insured Deposits

54.6
54.1
54.2
54.4
48.8
49.1
49.5
49.7
42.6
41.9
43.4
36.5
39.7
40.8
42.9
45.5
46.8
44.4
44.7
45.1

Deposit
Insurance
Fund

1,450.7
1,363.5
1,282.2
1,243.9
1,203.9
1,065.9
1,006.1
1,058.5
929.2
804.3
703.1
616.9
553.5
496.0
452.7
420.5
383.1
343.4
306.0
291.7

Total
Domestic
Deposits

Est. Insured
Deposits

0.75
0.72
0.72
0.74
0.77
0.69
0.65
0.71
0.59
0.60
0.63
0.69
0.78
0.76
0.79
0.83
0.79
0.68
0.68
0.73

1.37
1.34
1.33
1.36
1.57
1.42
1.32
1.44
1.39
1.43
1.45
1.88
1.96
1.86
1.84
1.82
1.70
1.54
1.52
1.61

1
For 2015, figures are as of September 30; all other prior years are as of December 31. Prior to 1989, figures are for the Bank Insurance Fund (BIF) only
and exclude insured branches of foreign banks. For 1989 to 2005, figures represent the sum of the BIF and Savings Association Insurance Fund (SAIF)
amounts; for 2006 to 2015, figures are for DIF. Amounts for 1989-2015 include insured branches of foreign banks. Prior to year-end 1991, insured
deposits were estimated using percentages determined from June Call and Thrift Financial Reports.
2
The year-end 2008 coverage limit and estimated insured deposits do not reflect the temporary increase to $250,000 then in effect under the
Emergency Economic Stabilization Act of 2008. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) Act made this coverage
limit permanent. The year-end 2009 coverage limit and estimated insured deposits reflect the $250,000 coverage limit. The Dodd-Frank Act also
temporarily provided unlimited coverage for non-interest bearing transaction accounts for two years beginning December 31, 2010. Coverage for
certain retirement accounts increased to $250,000 in 2006. Initial coverage limit was $2,500 from January 1 to June 30, 1934.

APPENDICES

141

INCOME AND EXPENSES, DEPOSIT INSURANCE FUND,
F RO M B E G I N N I N G O F O P E R AT I O N S , S E P T E M B E R 1 1 , 1 9 3 3 ,
T H RO U G H D E C E M B E R 3 1 , 2 0 1 5
Do l l a r s i n Mi l l i o n s
Income

Year

Total

Total $219,955.3

Expenses and Losses

Assessment
Income

Assessment
Credits

Investment
and Other

Provision
for
Ins. Losses

Admin.
and
Operating
Expenses2

Interest
& Other
Ins.
Expenses

$147,597.3 $110,042.2

Effective
Assessment
Rate1

$155,013.6

$11,392.9

$76,334.6

2015

9,303.5

8,846.8

0.0

456.7

0.0656%

2014

8,965.1

8,656.1

0.0

309.0

2013

10,458.9

9,734.2

0.0

2012

18,522.3

12,397.2

0.2

2011

16,342.0

13,499.5

0.9

2010

13,379.9

13,611.2

0.8

2009

24,706.4

17,865.4

2008

7,306.3

2007

3,196.2

2006

2,643.5

2005
2004

Total

Funding
Transfer
from the
FSLIC
Resolution
Fund

Net
Income/
(Loss)

$28,094.6

$9,460.5

(553.2)

(2,251.3)

1,687.2

10.9

$139.5 $72,497.5
0

9,856.7

0.0664

(6,634.7)

(8,305.5)

1,664.3

6.5

0

15,599.8

724.7

0.0776

(4,045.9)

(5,659.4)

1,608.7

4.8

0

14,504.8

6,125.3

0.1012

(2,599.0)

(4,222.6)

1,777.5

(153.9)

0

21,121.3

2,843.4

0.1115

(2,915.4)

(4,413.6)

1,625.4

(127.2)

0

19,257.4

(230.5)

0.1772

75.0

(847.8)

1,592.6

(669.8)

0

13,304.9

148.0

6,989.0

0.2330

60,709.0

57,711.8

1,271.1

1,726.1

0 (36,002.6)

4,410.4

1,445.9

4,341.8

0.0418

44,339.5

41,838.8

1,033.5

1,467.2

0 (37,033.2)

3,730.9

3,088.0

2,553.3

0.0093

1,090.9

95.0

992.6

3.3

0

2,105.3

31.9

0.0

2,611.6

0.0005

904.3

(52.1)

950.6

5.8

0

1,739.2

2,420.5

60.9

0.0

2,359.6

0.0010

809.3

(160.2)

965.7

3.8

0

1,611.2

2,240.3

104.2

0.0

2,136.1

0.0019

607.6

(353.4)

941.3

19.7

0

1,632.7

2003

2,173.6

94.8

0.0

2,078.8

0.0019

(67.7)

(1,010.5)

935.5

7.3

0

2,241.3

2002

2,384.7

107.8

0.0

2,276.9

0.0023

719.6

(243.0)

945.1

17.5

0

1,665.1

2001

2,730.1

83.2

0.0

2,646.9

0.0019

3,123.4

2,199.3

887.9

36.2

0

(393.3)

2000

2,570.1

64.3

0.0

2,505.8

0.0016

945.2

28.0

883.9

33.3

0

1,624.9

1999

2,416.7

48.4

0.0

2,368.3

0.0013

2,047.0

1,199.7

823.4

23.9

0

369.7

1998

2,584.6

37.0

0.0

2,547.6

0.0010

817.5

(5.7)

782.6

40.6

0

1,767.1

1997

2,165.5

38.6

0.0

2,126.9

0.0011

247.3

(505.7)

677.2

75.8

0

1,918.2

1996

7,156.8

5,294.2

0.0

1,862.6

0.1622

353.6

(417.2)

568.3

202.5

0

6,803.2

1995

5,229.2

3,877.0

0.0

1,352.2

0.1238

202.2

(354.2)

510.6

45.8

0

5,027.0

1994

7,682.1

6,722.7

0.0

959.4

0.2192

(1,825.1)

(2,459.4)

443.2

191.1

0

9,507.2

1993

7,354.5

6,682.0

0.0

672.5

0.2157

(6,744.4)

(7,660.4)

418.5

497.5

0

14,098.9
7,111.5

1992

6,479.3

5,758.6

0.0

720.7

0.1815

(596.8)

(2,274.7)

614.83

1,063.1

35.4

1991

5,886.5

5,254.0

0.0

632.5

0.1613

16,925.3

15,496.2

326.1

1,103.0

42.4 (10,996.4)

1990

3,855.3

2,872.3

0.0

983.0

0.0868

13,059.3

12,133.1

275.6

650.6

56.1

1989

3,494.8

1,885.0

0.0

1,609.8

0.0816

4,352.2

3,811.3

219.9

321.0

5.6

(851.8)

1988

3,347.7

1,773.0

0.0

1,574.7

0.0825

7,588.4

6,298.3

223.9

1,066.2

0

(4,240.7)

(9,147.9)

1987

3,319.4

1,696.0

0.0

1,623.4

0.0833

3,270.9

2,996.9

204.9

69.1

0

48.5

1986

3,260.1

1,516.9

0.0

1,743.2

0.0787

2,963.7

2,827.7

180.3

(44.3)

0

296.4

1985

3,385.5

1,433.5

0.0

1,952.0

0.0815

1,957.9

1,569.0

179.2

209.7

0

1,427.6

1984

3,099.5

1,321.5

0.0

1,778.0

0.0800

1,999.2

1,633.4

151.2

214.6

0

1,100.3

1983

2,628.1

1,214.9

164.0

1,577.2

0.0714

969.9

675.1

135.7

159.1

0

1,658.2

1982

2,524.6

1,108.9

96.2

1,511.9

0.0769

999.8

126.4

129.9

743.5

0

1,524.8

1981

2,074.7

1,039.0

117.1

1,152.8

0.0714

848.1

320.4

127.2

400.5

0

1,226.6

1980

1,310.4

951.9

521.1

879.6

0.0370

83.6

(38.1)

118.2

3.5

0

1,226.8

1979

1,090.4

881.0

524.6

734.0

0.0333

93.7

(17.2)

106.8

4.1

0

996.7

1978

952.1

810.1

443.1

585.1

0.0385

148.9

36.5

103.3

9.1

0

803.2

142

FEDERAL DEPOSIT INSURANCE CORPORATION

IN C OM E A ND EXPE N SE S, D E P O SI T I N SU R A N C E FU N D ,
FRO M BEGINNIN G O F O PE R AT I O N S, SE P T E M B E R 1 1 , 1 9 3 3,
THROUG H D E C E M B E R 3 1 , 2 0 1 5 (c o n t i n u ed)
Do l l a r s i n Mi l l i o n s
Income

Year

Total

Expenses and Losses

Assessment
Income

Assessment
Credits

Investment
and Other

Effective
Assessment
Rate1

Provision
for
Ins. Losses

Total

Admin.
and
Operating
Expenses2

Interest
& Other
Ins.
Expenses

Funding
Transfer
from the
FSLIC
Resolution
Fund

Net
Income/
(Loss)

1977

837.8

731.3

411.9

518.4

0.0370

113.6

20.8

89.3

3.5

0

724.2

1976

764.9

676.1

379.6

468.4

0.0370

212.3

28.0

180.44

3.9

0

552.6

1975

689.3

641.3

362.4

410.4

0.0357

97.5

27.6

67.7

2.2

0

591.8

1974

668.1

587.4

285.4

366.1

0.0435

159.2

97.9

59.2

2.1

0

508.9

1973

561.0

529.4

283.4

315.0

0.0385

108.2

52.5

54.4

1.3

0

452.8
401.3

1972

467.0

468.8

280.3

278.5

0.0333

65.7

10.1

49.6

6.0

0

1971

415.3

417.2

241.4

239.5

0.0345

60.3

13.4

46.9

0.0

0

355.0

1970

382.7

369.3

210.0

223.4

0.0357

46.0

3.8

42.2

0.0

0

336.7

1969

335.8

364.2

220.2

191.8

0.0333

34.5

1.0

33.5

0.0

0

301.3

1968

295.0

334.5

202.1

162.6

0.0333

29.1

0.1

29.0

0.0

0

265.9

1967

263.0

303.1

182.4

142.3

0.0333

27.3

2.9

24.4

0.0

0

235.7

1966

241.0

284.3

172.6

129.3

0.0323

19.9

0.1

19.8

0.0

0

221.1

1965

214.6

260.5

158.3

112.4

0.0323

22.9

5.2

17.7

0.0

0

191.7

1964

197.1

238.2

145.2

104.1

0.0323

18.4

2.9

15.5

0.0

0

178.7

1963

181.9

220.6

136.4

97.7

0.0313

15.1

0.7

14.4

0.0

0

166.8

1962

161.1

203.4

126.9

84.6

0.0313

13.8

0.1

13.7

0.0

0

147.3

1961

147.3

188.9

115.5

73.9

0.0323

14.8

1.6

13.2

0.0

0

132.5

1960

144.6

180.4

100.8

65.0

0.0370

12.5

0.1

12.4

0.0

0

132.1

1959

136.5

178.2

99.6

57.9

0.0370

12.1

0.2

11.9

0.0

0

124.4

1958

126.8

166.8

93.0

53.0

0.0370

11.6

0.0

11.6

0.0

0

115.2

1957

117.3

159.3

90.2

48.2

0.0357

9.7

0.1

9.6

0.0

0

107.6

1956

111.9

155.5

87.3

43.7

0.0370

9.4

0.3

9.1

0.0

0

102.5

1955

105.8

151.5

85.4

39.7

0.0370

9.0

0.3

8.7

0.0

0

96.8

1954

99.7

144.2

81.8

37.3

0.0357

7.8

0.1

7.7

0.0

0

91.9

1953

94.2

138.7

78.5

34.0

0.0357

7.3

0.1

7.2

0.0

0

86.9

1952

88.6

131.0

73.7

31.3

0.0370

7.8

0.8

7.0

0.0

0

80.8

1951

83.5

124.3

70.0

29.2

0.0370

6.6

0.0

6.6

0.0

0

76.9

1950

84.8

122.9

68.7

30.6

0.0370

7.8

1.4

6.4

0.0

0

77.0

1949

151.1

122.7

0.0

28.4

0.0833

6.4

0.3

6.1

0.0

0

144.7

5

1948

145.6

119.3

0.0

26.3

0.0833

7.0

0.7

6.36

0.0

0

138.6

1947

157.5

114.4

0.0

43.1

0.0833

9.9

0.1

9.8

0.0

0

147.6

1946

130.7

107.0

0.0

23.7

0.0833

10.0

0.1

9.9

0.0

0

120.7

1945

121.0

93.7

0.0

27.3

0.0833

9.4

0.1

9.3

0.0

0

111.6

1944

99.3

80.9

0.0

18.4

0.0833

9.3

0.1

9.2

0.0

0

90.0

1943

86.6

70.0

0.0

16.6

0.0833

9.8

0.2

9.6

0.0

0

76.8

1942

69.1

56.5

0.0

12.6

0.0833

10.1

0.5

9.6

0.0

0

59.0

1941

62.0

51.4

0.0

10.6

0.0833

10.1

0.6

9.5

0.0

0

51.9

1940

55.9

46.2

0.0

9.7

0.0833

12.9

3.5

9.4

0.0

0

43.0

1939

51.2

40.7

0.0

10.5

0.0833

16.4

7.2

9.2

0.0

0

34.8

APPENDICES

143

INC OM E A N D EXPENSE S, D E P O SI T I N SU R A N C E FU N D ,
FRO M BEGINNIN G OF O PE R AT I O N S, SE P T E M B E R 1 1 , 1 9 3 3 ,
THROUG H D EC E M B E R 3 1 , 2 0 1 5 (c o n t i n u ed)
Do l l a r s i n Mi l l i o n s
Income

Year

Expenses and Losses

Assessment
Income

Total

Assessment
Credits

Investment
and Other

Effective
Assessment
Rate1

Total

Provision
for
Ins. Losses

Admin.
and
Operating
Expenses2

Interest
& Other
Ins.
Expenses

Funding
Transfer
from the
FSLIC
Resolution
Fund

Net
Income/
(Loss)

1938

47.7

38.3

0.0

9.4

0.0833

11.3

2.5

8.8

0.0

0

36.4

1937

48.2

38.8

0.0

9.4

0.0833

12.2

3.7

8.5

0.0

0

36.0

1936

43.8

35.6

0.0

8.2

0.0833

10.9

2.6

8.3

0.0

0

32.9

1935

20.8

11.5

0.0

9.3

0.0833

11.3

2.8

8.5

0.0

0

9.5

1933-34

7.0

0.0

0.0

7.0

N/A

10.0

0.2

9.8

0.0

0

(3.0)

1
Figures represent only BIF-insured institutions prior to 1990, BIF- and SAIF-insured institutions from 1990 through 2005, and DIF-insured institutions
beginning in 2006. After 1995, all thrift closings became the responsibility of the FDIC and amounts are reflected in the SAIF. The effective assessment
rate is calculated from annual assessment income (net of assessment credits), excluding transfers to the Financing Corporation (FICO), Resolution
Funding Corporation (REFCORP) and FSLIC Resolution Fund, divided by the four quarter average assessment base. The effective rates from 1950 through
1984 varied from the statutory rate of 0.0833 percent due to assessment credits provided in those years. The statutory rate increased to 0.12 percent
in 1990 and to a minimum of 0.15 percent in 1991. The effective rates in 1991 and 1992 varied because the FDIC exercised new authority to increase
assessments above the statutory minimum rate when needed. Beginning in 1993, the effective rate was based on a risk-related premium system under
which institutions paid assessments in the range of 0.23 percent to 0.31 percent. In May 1995, the BIF reached the mandatory recapitalization level of
1.25 percent. As a result, BIF assessment rates were reduced to a range of 0.04 percent to 0.31 percent of assessable deposits, effective June 1995, and
assessments totaling $1.5 billion were refunded in September 1995. Assessment rates for the BIF were lowered again to a range of 0 to 0.27 percent
of assessable deposits, effective the start of 1996. In 1996, the SAIF collected a one-time special assessment of $4.5 billion. Subsequently, assessment
rates for the SAIF were lowered to the same range as the BIF, effective October 1996. This range of rates remained unchanged for both funds through
2006. As part of the implementation of the Federal Deposit Insurance Reform Act of 2005, assessment rates were increased to a range of 0.05 percent
to 0.43 percent of assessable deposits effective at the start of 2007, but many institutions received a one-time assessment credit ($4.7 billion in total) to
offset the new assessments. For the first quarter of 2009, assessment rates were increased to a range of 0.12 to 0.50 percent of assessable deposits.
On June 30, 2009, a special assessment was imposed on all insured banks and thrifts, which amounted in aggregate to approximately $5.4 billion.
For 8,106 institutions, with $9.3 trillion in assets, the special assessment was 5 basis points of each institution’s assets minus tier one capital; 89 other
institutions, with assets of $4.0 trillion, had their special assessment capped at 10 basis points of their second quarter assessment base. From the second
quarter of 2009 through the first quarter of 2011, initial assessment rates ranged between 0.12 and 0.45 percent of assessable deposits. Initial rates are
subject to further adjustments. Beginning in the second quarter of 2011, the assessment base changed to average total consolidated assets less average
tangible equity (with certain adjustments for banker’s banks and custodial banks), as required by the Dodd-Frank Act. The FDIC implemented a new
assessment rate schedule at the same time to conform to the larger assessment base. Initial assessment rates were lowered to a range of 0.05 to 0.35
percent of the new base. The annualized assessment rates averaged approximately 17.6 cents per $100 of assessable deposits for the first quarter of
2011 and 11.1 cents per $100 of the new base for the last three quarters of 2011 (which is the figure shown in the table). The effective assessment rate
for 2015 is based on year-to-date assessment income through September 30, 2015, divided by a three quarter average of the quarterly assessment base;
the quotient is annualized.
2
These expenses, which are presented as operating expenses in the Statement of Income and Fund Balance, pertain to the FDIC in its corporate capacity
only and do not include costs that are charged to the failed bank receiverships that are managed by the FDIC. The receivership expenses are presented
as part of the “Receivables from Resolutions, net” line on the Balance Sheet. The narrative and graph presented on page 85 of this report shows the
aggregate (corporate and receivership) expenditures of the FDIC.
3

Includes $210 million for the cumulative effect of an accounting change for certain postretirement benefits (1992).

4

Includes a $106 million net loss on government securities (1976).

5

This amount represents interest and other insurance expenses from 1933 to 1972.

6

Includes the aggregate amount of $81 million of interest paid on capital stock between 1933 and 1948.

144

FEDERAL DEPOSIT INSURANCE CORPORATION

F D I C I N S U R E D I N S T I T U T I O N S C L O S E D D U R I N G 2 0 15
Do l l a r s i n T h o u s a n ds
Codes for Bank Class:
NM	 =	 State-chartered bank that is not a member
SB	 =	 Savings Bank
SI	 =	 Stock and Mutual
of the Federal Reserve System
N	 =	 National Bank
Savings Bank

Name and Location

Bank
Class

Number
of
Deposit
Accounts

Total
Assets1

Total
Deposits1

Insured
Deposit Funding
and Other
Disbursements

SM	 =	 State-chartered bank that is a
member of the Federal Reserve
System
SA	 =	 Savings Association
Estimated
Loss to
the DIF2

Date of
Closing
or
Acquisition

Receiver/Assuming
Bank and Location

Purchase and Assumption - All Deposits
First National Bank
of Crestview
Crestview, FL

4,701

$73,804

$73,199

$73,338

$5,971

01/16/15 First NBC Bank
New Orleans, LA

Highland
Community Bank
Chicago, IL

NM

2,807

$54,727

$53,453

$49,333

$5,573

01/23/15 United Fidelity Bank,
FSB
Evansville, IN

Capitol City Bank
and Trust Company
Atlanta, GA

NM

14,296

$272,311

$262,652

$269,980

$101,770

02/13/15 First-Citizens Bank
and Trust Company
Raleigh, NC

Doral Bank
San Juan, PR

NM

207,722

$5,898,515

$4,097,734

$3,776,774

$669,343

02/27/15 Banco Popular de
Puerto Rico
Hato Rey, PR

Edgebrook Bank
Chicago, IL

NM

1,614

$90,034

$90,007

$90,434

$16,782

05/08/15 Republic Bank of
Chicago
Oak Brook, IL

Premier Bank
Denver, CO

SM

1,215

$26,760

$25,480

$25,665

$4,394

The Bank of Georgia
Peachtree City, GA

NM

13,204

$286,102

$264,234

$266,869

$23,155

Hometown
National Bank
Longview, WA
1

N

N

297

$3,785

$3,705

$3,910

$1,614

07/10/15 United Fidelity Bank,
FSB
Evansville, IN
10/02/15 Fidelity Bank
Atlanta, GA
10/02/15 Twin City Bank
Longview, WA

Total Assets and Total Deposits data are based upon the last Call Report filed by the institution prior to failure.

Estimated losses are as of December 31, 2015. Estimated losses are routinely adjusted with updated information from new appraisals and asset sales,
which ultimately affect the asset values and projected recoveries. Represents the estimated loss to the DIF from deposit insurance obligations.
2

APPENDICES

145

R E C OV E R I E S A N D L O S S E S B Y T H E
DEPOSIT INSURANCE FUND ON DISBURSEMENTS
F O R T H E P ROT E C T I O N O F D E P O S I TO R S , 1934 - 2015
Doll a r s i n T h o u s a n d s
Bank and Thrift Failures1
Number
of Banks/
Thrifts

Year2

Total
Deposits3

Total
Assets3

Recoveries5

Funding4

Estimated
Additional
Recoveries

Final and
Estimated
Losses6

Total

2,610

$941,284,493

$708,282,924

$574,389,053

$408,846,768

$56,802,281

$108,740,004

2015

8

6,706,038

4,870,464

4,556,304

560,000

3,167,702

828,602

2014

18

2,913,503

2,691,485

2,677,550

320,142

1,949,750

407,658

2013

24

6,044,051

5,132,246

4,812,554

168,935

3,328,535

1,315,084

2012

51

11,617,348

11,009,630

10,141,109

1,633,237

5,926,222

2,581,650

2011

92

34,922,997

31,071,862

29,829,649

2,782,790

20,169,924

6,764,024

20107

157

92,084,988

78,290,185

80,238,225

54,190,861

9,317,868

16,729,496

20097

140

169,709,160

137,835,121

133,847,404

92,526,431

12,777,858

28,543,115

2008

7

25

371,945,480

234,321,715

205,453,181

184,246,546

2,781,758

18,424,877

2007

3

2,614,928

2,424,187

1,920,444

1,451,701

302,160

166,583

2006

0

0

0

0

0

0

0

2005

0

0

0

0

0

0

0

2004

4

170,099

156,733

139,121

134,978

226

3,917

2003

3

947,317

901,978

883,772

812,933

8,192

62,647

2002

11

2,872,720

2,512,834

520,543

1,711,173

(1,540,947)

350,317

2001

4

1,821,760

1,661,214

21,131

1,138,677

(1,410,011)

292,465

2000

7

410,160

342,584

297,313

265,175

0

32,138

1999

8

1,592,189

1,320,573

1,307,876

711,758

5,801

590,317

1998

3

290,238

260,675

292,839

58,248

11,541

223,050

1997

1

27,923

27,511

25,546

20,520

0

5,026

1996

6

232,634

230,390

201,533

140,918

0

60,615

1995

6

802,124

776,387

609,043

524,571

0

84,472

1994

13

1,463,874

1,397,018

1,224,769

1,045,718

0

179,051

1993

41

3,828,939

3,509,341

3,841,658

3,209,012

0

632,646

1992

120

45,357,237

39,921,310

14,541,477

10,866,760

704

3,674,013

1991

124

64,556,512

52,972,034

21,500,010

15,496,730

4,998

5,998,282

1990

168

16,923,462

15,124,454

10,812,484

8,040,995

0

2,771,489

1989

206

28,930,572

24,152,468

11,443,281

5,247,995

0

6,195,286

1988

200

38,402,475

26,524,014

10,432,655

5,055,158

0

5,377,497

1987

184

6,928,889

6,599,180

4,876,994

3,014,502

0

1,862,492

1986

138

7,356,544

6,638,903

4,632,121

2,949,583

0

1,682,538

1985

116

3,090,897

2,889,801

2,154,955

1,506,776

0

648,179

1984

78

2,962,179

2,665,797

2,165,036

1,641,157

0

523,879

1983

44

3,580,132

2,832,184

3,042,392

1,973,037

0

1,069,355

1982

32

1,213,316

1,056,483

545,612

419,825

0

125,787

1981

7

108,749

100,154

114,944

105,956

0

8,988

1980

10

239,316

219,890

152,355

121,675

0

30,680

1934 - 1979

558

8,615,743

5,842,119

5,133,173

4,752,295

0

380,878

146

FEDERAL DEPOSIT INSURANCE CORPORATION

R E C OV E R I E S A N D L O S S E S B Y T H E
DEPOSIT INSURANCE FUND ON DISBURSEMENTS
F O R T H E P ROT E C T I O N O F D E P O S I TO R S , 1 9 3 4 - 20 1 5
Do l l a r s i n T h o u s a n d s
Assistance Transactions1

Year2

Number
of Banks/
Thrifts

Total
Assets3

Total
Deposits3

Total

154

2015

0

0

2014

0

0

2013

0

2012

0

Funding4

$3,317,099,253 $1,442,173,417

Estimated
Additional
Recoveries

Recoveries5

Final and
Estimated
Losses6

$11,630,356

$6,199,875

$0

$5,430,481

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

2011

0

0

0

0

0

0

0

2010

0

0

0

0

0

0

0

8

2009

8

1,917,482,183

1,090,318,282

0

0

0

0

20088

5

1,306,041,994

280,806,966

0

0

0

0

2007

0

0

0

0

0

0

0

2006

0

0

0

0

0

0

0

2005

0

0

0

0

0

0

0

2004

0

0

0

0

0

0

0

2003

0

0

0

0

0

0

0

2002

0

0

0

0

0

0

0

2001

0

0

0

0

0

0

0

2000

0

0

0

0

0

0

0

1999

0

0

0

0

0

0

0

1998

0

0

0

0

0

0

0

1997

0

0

0

0

0

0

0

1996

0

0

0

0

0

0

0

1995

0

0

0

0

0

0

0

1994

0

0

0

0

0

0

0

1993

0

0

0

0

0

0

0

1992

2

33,831

33,117

1,486

1,236

0

250

1991

3

78,524

75,720

6,117

3,093

0

3,024

1990

1

14,206

14,628

4,935

2,597

0

2,338

1989

1

4,438

6,396

2,548

252

0

2,296

1988

80

15,493,939

11,793,702

1,730,351

189,709

0

1,540,642

1987

19

2,478,124

2,275,642

160,877

713

0

160,164

1986

7

712,558

585,248

158,848

65,669

0

93,179

1985

4

5,886,381

5,580,359

765,732

406,676

0

359,056

1984

2

40,470,332

29,088,247

5,531,179

4,414,904

0

1,116,275

APPENDICES

147

R EC OVER IE S A N D LO SSE S B Y T H E
D EP OS IT INS UR A N C E FU N D O N D I SBU R SE M E N TS
FO R THE P ROTEC TION OF D E P O SI TO R S, 1 9 3 4 - 2 0 1 5 (c o n t i n u ed )
Doll a r s i n T h o u s a n d s
Assistance Transactions1

Year2
1983
1982
1981
1980
1934 - 1979
1

Number
of Banks/
Thrifts
4
10
3
1
4

Total
Assets3
3,611,549
10,509,286
4,838,612
7,953,042
1,490,254

Total
Deposits3
3,011,406
9,118,382
3,914,268
5,001,755
549,299

Funding4
764,690
1,729,538
774,055
0
0

Recoveries5
427,007
686,754
1,265
0
0

Estimated
Additional
Recoveries
0
0
0
0
0

Final and
Estimated
Losses6
337,683
1,042,784
772,790
0
0

Institutions for which the FDIC is appointed receiver, including deposit payoff, insured deposit transfer, and deposit assumption cases.

For 1990 through 2005, amounts represent the sum of BIF and SAIF failures (excluding those handled by the RTC); prior to 1990, figures are only
for the BIF. After 1995, all thrift closings became the responsibility of the FDIC and amounts are reflected in the SAIF. For 2006 to 2015, figures
are for the DIF.
2

3

Assets and deposit data are based on the last Call Report or TFR filed before failure.

Funding represents the amounts provided by the DIF to receiverships for subrogated claims, advances for working capital, and administrative
expenses paid on their behalf. Beginning in 2008, the DIF resolves failures using whole-bank purchase and assumption transactions, most with an
accompanying shared-loss agreement (SLA). The DIF satifies any resulting liabilities by offsetting receivables from resolutions when receiverships
declare a dividend and/or sending cash directly to receiverships to fund an SLA and other expenses.
4

5

Recoveries represent cash received and dividends (cash and non-cash) declared by receiverships.

Final losses represent actual losses for unreimbursed subrogated claims of inactivated receiverships. Estimated losses represent the difference
between the amount paid by the DIF to cover obligations to insured depositors and the estimated recoveries from the liquidation of receivership
assets.
6

7
Includes amounts related to transaction account coverage under the Transaction Account Guarantee Program (TAG). The estimated losses as of
December 31, 2015, for TAG accounts in 2010, 2009, and 2008 are $388 million, $1.186 million, and $13 million, respectively.
8

Includes institutions where assistance was provided under a systemic risk determination.

148

FEDERAL DEPOSIT INSURANCE CORPORATION

N U M B E R , A S S E T S , D E P O S I T S , L O S S E S , A N D L O S S TO F U N D S
O F I N S U R E D T H R I F T S TA K E N OV E R O R C L O S E D B E C AU S E O F
F I N A N C I A L D I F F I C U LT I E S , 1 9 8 9 T H RO U G H 1 9 9 5 1
Do l l a r s i n T h o u s a n d s
Year

Total

748

Assets
$393,986,574

1995

2
2
10
59
144
213
318

423,819
136,815
6,147,962
44,196,946
78,898,904
129,662,498
134,519,630

1994
1993
1992
1991
1990
19894

Total

Deposits
$318,328,770

Estimated
Receivership
Loss2
$75,977,846

414,692
127,508
5,708,253
34,773,224
65,173,122
98,963,962
113,168,009

28,192
11,472
267,595
3,286,908
9,235,967
16,062,685
47,085,027

Loss to
Fund3
$81,581,460
27,750
14,599
65,212
3,832,145
9,734,263
19,257,578
48,649,913

1
Beginning in 1989 through July 1, 1995, all thrift closings were the responsibility of the Resolution Trust Corporation (RTC). Since the RTC
was terminated on December 31, 1995, and all assets and liabilities transferred to the FSLIC Resolution Fund (FRF), all the results of the thrift
closing activity from 1989 through 1995 are now reflected on the FRF’s books. Year is the year of failure, not the year of resolution.

The Estimated Receivership Loss represents the projected loss at the fund level from receiverships for unreimbursed subrogated claims of the
FRF and unpaid advances to receiverships from the FRF.
2

The Loss to Fund represents the total resolution cost of the failed thrifts in the FRF-RTC fund. In addition to the estimated losses for
receiverships, the loss includes corporate revenue and expense items, such as interest expense on Federal Financing Bank debt, interest expense
on escrowed funds, and interest revenue on advances to receiverships.
3

4

Total for 1989 excludes nine failures of the former FSLIC.

APPENDICES

149

B. MORE ABOUT THE FDIC
FDIC BOARD OF DIRECTORS

Seated (left to right): Thomas M. Hoenig and Martin J. Gruenberg.
Standing (left to right): Thomas J. Curry and Richard Cordray.

Martin J. Gruenberg
Martin J. Gruenberg is the 20th Chairman of the
FDIC, receiving Senate confirmation on November
15, 2012, for a five-year term. Mr. Gruenberg
served as Vice Chairman and Member of the FDIC
Board of Directors from August 22, 2005, until his
confirmation as Chairman. He served as Acting
Chairman from July 9, 2011, to November 15, 2012,
and also from November 16, 2005, to June 26, 2006.
Mr. Gruenberg joined the FDIC Board after broad
congressional experience in the financial services and
regulatory areas. He served as Senior Counsel to

150

Senator Paul S. Sarbanes (D-MD) on the staff of the
Senate Committee on Banking, Housing, and Urban
Affairs from 1993 to 2005. Mr. Gruenberg advised
the Senator on issues of domestic and international
financial regulation, monetary policy, and trade.
He also served as Staff Director of the Banking
Committee’s Subcommittee on International Finance
and Monetary Policy from 1987 to 1992. Major
legislation in which Mr. Gruenberg played an active
role during his service on the Committee includes
the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA); the Federal
Deposit Insurance Corporation Improvement Act of

FEDERAL DEPOSIT INSURANCE CORPORATION

1991 (FDICIA); the Gramm-Leach-Bliley Act; and
the Sarbanes-Oxley Act of 2002.
Mr. Gruenberg served as Chairman of the Executive
Council and President of the International Association
of Deposit Insurers (IADI) from November 2007 to
November 2012.
Mr. Gruenberg holds a J.D. from Case Western
Reserve Law School and an A.B. from Princeton
University, Woodrow Wilson School of Public and
International Affairs.

Thomas M. Hoenig
Thomas M. Hoenig was confirmed by the Senate as
Vice Chairman of the FDIC on November 15, 2012.
He joined the FDIC on April 16, 2012, as a member
of the Board of Directors of the FDIC for a six-year
term. He is also a member of the Executive Board of
the International Association of Deposit Insurers.
Prior to serving on the FDIC Board, Mr. Hoenig was
the President of the Federal Reserve Bank of Kansas
City and a member of the Federal Reserve System’s
Federal Open Market Committee from 1991 to 2011.
Mr. Hoenig was with the Federal Reserve for 38
years, beginning as an economist, and then as a
senior officer in banking supervision during the U.S.
banking crisis of the 1980s. In 1986, he led the
Kansas City Federal Reserve Bank’s Division of Bank
Supervision and Structure, directing the oversight of
more than 1,000 banks and bank holding companies
with assets ranging from less than $100 million to
$20 billion. He became President of the Kansas City
Federal Reserve Bank on October 1, 1991.
Mr. Hoenig is a native of Fort Madison, Iowa, and
received a doctorate in economics from Iowa State
University.

Thomas J. Curry
Thomas J. Curry was sworn in as the 30th
Comptroller of the Currency on April 9, 2012. The
Comptroller of the Currency is the administrator
of national banks and federal savings associations,

and chief officer of the Office of the Comptroller
of the Currency (OCC). The OCC supervises
approximately 1,700 national banks and federal
savings associations and about 50 federal branches and
agencies of foreign banks in the United States. These
institutions comprise nearly two-thirds of the assets
of the commercial banking system. The Comptroller
is a Director of NeighborWorks® America and also
a member of the Federal Financial Institutions
Examination Council (FFIEC) where he served as
Chairman for a two-year term from April 2013 until
April 2015.
Prior to becoming Comptroller of the Currency,
Mr. Curry served as a Director of the FDIC Board
since January 2004, and as the Chairman of the
NeighborWorks® America Board of Directors.
Prior to joining the FDIC’s Board of Directors,
Mr. Curry served five Massachusetts Governors as the
Commonwealth’s Commissioner of Banks from 1990
to 1991 and from 1995 to 2003. He served as Acting
Commissioner from February 1994 to June 1995. He
previously served as First Deputy Commissioner and
Assistant General Counsel within the Massachusetts
Division of Banks. He entered state government in
1982 as an attorney with the Massachusetts’ Secretary
of State’s Office.
Mr. Curry served as the Chairman of the Conference
of State Bank Supervisors from 2000 to 2001, and
served two terms on the State Liaison Committee
of the Federal Financial Institutions Examination
Council, including a term as Committee Chairman.
He is a graduate of Manhattan College (summa cum
laude), where he was elected to Phi Beta Kappa. He
received his law degree from the New England School
of Law.

Richard Cordray
Richard Cordray serves as the first Director of
the Consumer Financial Protection Bureau. He
previously led the Bureau’s Enforcement Division.
Prior to joining the Bureau, Mr. Cordray served
on the front lines of consumer protection as Ohio’s

APPENDICES

151

Attorney General. Mr. Cordray recovered more than
$2 billion for Ohio’s retirees, investors, and business
owners, and took major steps to help protect its
consumers from fraudulent foreclosures and financial
predators. In 2010, his office responded to a record
number of consumer complaints, but Mr. Cordray
went further and opened that process for the first
time to small businesses and nonprofit organizations
to ensure protections for even more Ohioans. To
recognize his work on behalf of consumers as Attorney
General, the Better Business Bureau presented Mr.
Cordray with an award for promoting an ethical
marketplace.
Mr. Cordray also served as Ohio Treasurer and
Franklin County Treasurer, two elected positions in
which he led state and county banking, investment,
debt, and financing activities. As Ohio Treasurer, he
resurrected a defunct economic development program
that provides low-interest loan assistance to small
businesses to create jobs, re-launched the original
concept as GrowNOW, and pumped hundreds of
millions of dollars into access for credit to small
businesses. Mr. Cordray simultaneously created a
Bankers Advisory Council to share ideas about the
program with community bankers across Ohio.

152

Earlier in his career, Mr. Cordray was an adjunct
professor at the Ohio State University College of
Law, served as a State Representative for the 33rd
Ohio House District, was the first Solicitor General
in Ohio’s history, and was a sole practitioner and
Counsel to Kirkland & Ellis. Mr. Cordray has
argued seven cases before the United States Supreme
Court, by special appointment of both the Clinton
and Bush Justice Departments. He is a graduate of
Michigan State University, Oxford University, and
the University of Chicago Law School. Mr. Cordray
was Editor-in-Chief of the University of Chicago Law
Review and later clerked for U.S. Supreme Court
Justices Byron White and Anthony Kennedy.
Mr. Cordray lives in Grove City, Ohio, with his wife
Peggy—a Professor at Capital University Law School
in Columbus—and twin children Danny and Holly.

Jeremiah O. Norton
Jeremiah O. Norton resigned from the FDIC Board
of Directors as of June 5, 2015. Mr. Norton had been
a Board member since April 16, 2012.

FEDERAL DEPOSIT INSURANCE CORPORATION

APPENDICES

153

DIVISION OF DEPOSITOR
AND CONSUMER PROTECTION

OFFICE OF
COMMUNICATIONS

Director

Mark E. Pearce

Director

Doreen R. Eberley

DEPUTY TO THE CHAIRMAN

Kymberly K. Copa

DEPUTY TO THE CHAIRMAN
FOR COMMUNICATIONS

Barbara Hagenbaugh

CHIEF RISK OFFICER

Barbara A. Ryan

Steven O. App

SPECIAL ADVISOR FOR
SUPERVISORY MATTERS

David S. Hoelscher

Robert D. Harris

DIVISION OF RESOLUTION
AND RECEIVERSHIPS

Lawrence Gross

Director

Bret D. Edwards

Arthur J. Murton
Director

OFFICE OF COMPLEX
FINANCIAL INSTITUTIONS

Michele A. Heller

WRITER-EDITOR

Acting Inspector General

Fred W. Gibson

CHIEF INFORMATION OFFICER
AND PRIVACY OFFICER

Jason C. Cave

INTERNAL OMBUDSMAN

Stephen A. Quick

SENIOR ADVISOR
INTERNATIONAL
RESOLUTION POLICY

DEPUTY TO THE CHAIRMAN
AND CHIEF OPERATING OFFICER,
CHIEF OF STAFF

DEPUTY TO THE CHAIRMAN
AND CHIEF FINANCIAL OFFICER

Martin J. Gruenberg
FDIC
Chairman

OFFICE OF INSPECTOR GENERAL

Vacant
FDIC
Board Member

DIVISION OF RISK
MANAGEMENT SUPERVISION

Director

Suzannah L. Susser

CORPORATE UNIVERSITY

Director

Arleas Upton Kea

DIVISION OF
ADMINISTRATION

Director

Craig R. Jarvill

DIVISION OF FINANCE

Thomas M. Hoenig
FDIC
Vice Chairman, Board Member

BOARD OF DIRECTORS

Charles Yi

General Counsel

LEGAL DIVISION

Chief Information
Security Officer

Christopher J. Farrow

INFORMATION SECURITY
AND PRIVACY STAFF

Director

Russell G. Pittman

DIVISION OF INFORMATION
TECHOLOGY

Thomas J. Curry
OCC
Board Member

FDIC ORGANIZATION CHART/OFFICIALS

Director

Diane Ellis

DIVISION OF INSURANCE
AND RESEARCH

Ombudsman

Cottrell L. Webster

OFFICE OF
THE OMBUDSMAN

Director

Andy Jiminez

OFFICE OF
LEGISLATIVE AFFAIRS

Director

Segundo Pereira

OFFICE OF MINORITY AND
WOMEN INCLUSION

Richard Cordray
CFPB
Board Member

CORPORATE STAFFING
STAFFING TRENDS 2006–2015
9000

6000

3000

0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

4,476

4,532

4,988

6,557

8,150

7,973

7,476

7,254

6,631

6,385

FDIC Year–End On-Board Staffing
Note: 2008–2015 staffing totals reflect year-end full time equivalent staff. Before 2008, staffing totals reflect total employees on-board.

154

FEDERAL DEPOSIT INSURANCE CORPORATION

N U M B E R O F E M P L OY E E S B Y D I V I S I O N / O F F I C E 2 0 1 4 – 2 0 15 1
Total
Division or Office:

Division of Risk Management Supervision
Division of Depositor and Consumer Protection
Division of Resolutions and Receiverships
Legal Division
Division of Administration
Division of Information Technology
Corporate University
Division of Insurance and Research
Division of Finance
Information Security and Privacy Staff
Office of Inspector General
Office of Complex Financial Institutions
Executive Offices2
Executive Support Offices 3
Total

Washington

Regional/Field

2015

2014

2015

2014

2015

2014

2,683

2,704

208

205

2,475

2,500

841

853

122

128

719

725

719

884

149

159

570

725

564

601

356

375

208

226

367

372

251

245

116

127

319

324

252

254

67

70

194

205

187

196

7

9

205

196

163

154

42

42

171

170

169

168

2

2

36

33

36

33

0

0

119

115

74

73

46

42

62

68

52

59

10

9

22

23

22

23

0

0

84

85

76

76

8

9

6,385

6,631

2,115

2,147

4,270

4,485

1
The FDIC reports staffing totals using a full-time equivalent methodology, which is based on an employee’s scheduled work hours. Division/Office
staffing has been rounded to the nearest whole FTE. Totals may not foot due to rounding.
2
Includes the Offices of the Chairman, Vice Chairman, Director (Appointive), Chief Operating Officer, Chief Financial Officer, and Chief Information
Officer.
3

Includes the Offices of Legislative Affairs, Communications, Ombudsman, Minority and Women Inclusion, and Corporate Risk Management.

APPENDICES

155

SOURCES OF INFORMATION

Public Information Center

FDIC Website
www.fdic.gov

3501 Fairfax Drive
Room E-1021
Arlington, VA 22226

A wide range of banking, consumer, and financial
information is available on the FDIC’s website. This
includes the FDIC’s Electronic Deposit Insurance
Estimator (EDIE), which estimates an individual’s
deposit insurance coverage; the Institution Directory,
which contains financial profiles of FDIC-insured
institutions; Community Reinvestment Act evaluations
and ratings for institutions supervised by the FDIC;
Call Reports, which are bank reports of condition and
income; and Money Smart, a training program to help
individuals outside the financial mainstream enhance
their money management skills and create positive
banking relationships. Readers also can access a variety
of consumer pamphlets, FDIC press releases, speeches,
and other updates on the agency’s activities, as well as
corporate databases and customized reports of FDIC
and banking industry information.

FDIC Call Center
Phone:	 877-275-3342 (877-ASK-FDIC)
	703-562-2222
Hearing Impaired:	 800-925-4618
	
703-562-2289 	
The FDIC Call Center in Washington, DC, is the
primary telephone point of contact for general questions
from the banking community, the public, and FDIC
employees. The Call Center directly, or with other
FDIC subject-matter experts, responds to questions
about deposit insurance and other consumer issues and
concerns, as well as questions about FDIC programs and
activities. The Call Center also refers callers to other
federal and state agencies as needed. Hours of operation
are 8:00 a.m. to 8:00 p.m., Eastern Time, Monday –
Friday, and 9:00 a.m. to 5:00 p.m., Saturday – Sunday.
Recorded information about deposit insurance and
other topics is available 24 hours a day at the same
telephone number.

Phone: 877-275-3342 (877-ASK-FDIC),
	703-562-2200
Fax:	703-562-2296
FDIC Online Catalog: https://catalog.fdic.gov
E-mail:	publicinfo@fdic.gov
Publications such as FDIC Quarterly and Consumer
News and a variety of deposit insurance and consumer
pamphlets are available at www.fdic.gov or may
be ordered in hard copy through the FDIC online
catalog. Other information, press releases, speeches
and congressional testimony, directives to financial
institutions, policy manuals, and FDIC documents are
available on request through the Public Information
Center. Hours of operation are 9:00 a.m. to 4:00 p.m.,
Eastern Time,
Monday – Friday.

Office of the Ombudsman
3501 Fairfax Drive
Room E-2022
Arlington, VA 22226
Phone:	 877-275-3342 (877-ASK-FDIC)
Fax:	703-562-6057
E-mail:	ombudsman@fdic.gov
The Office of the Ombudsman (OO) is an independent,
neutral, and confidential resource and liaison for
the banking industry and the general public. The
OO responds to inquiries about the FDIC in a fair,
impartial, and timely manner. It researches questions
and fields complaints from bankers and bank customers.
OO representatives are present at all bank closings
to provide accurate information to bank customers,
the media, bank employees, and the general public.
The OO also recommends ways to improve FDIC
operations, regulations, and customer service.

As a customer service, the FDIC Call Center has many
bilingual Spanish agents on staff and has access to a
translation service, which is able to assist with over 40
different languages.

156

FEDERAL DEPOSIT INSURANCE CORPORATION

REGIONAL AND AREA OFFICES
Atlanta Regional Office

Chicago Regional Office

Michael J. Dean, Regional Director
10 Tenth Street, NE
Suite 800
Atlanta, Georgia 30309
(678) 916-2200

M. Anthony Lowe, Regional Director
300 South Riverside Plaza
Suite 1700
Chicago, Illinois 60606
(312) 382-6000

Alabama
Florida
Georgia
North Carolina
South Carolina
Virginia
West Virginia

Illinois
Indiana
Kentucky
Michigan
Ohio
Wisconsin

Dallas Regional Office

Memphis Area Office

Kristie K. Elmquist, Regional Director
1601 Bryan Street
Dallas, Texas 75201
(214) 754-0098

Kristie K. Elmquist, Director
6060 Primacy Parkway
Suite 300
Memphis, Tennessee 38119
(901) 685-1603

Colorado
New Mexico
Oklahoma
Texas

Arkansas
Louisiana
Mississippi
Tennessee

Kansas City Regional Office

New York Regional Office

James D. LaPierre, Regional Director
1100 Walnut Street
Suite 2100
Kansas City, Missouri 64106
(816) 234-8000

John F. Vogel, Regional Director
350 Fifth Avenue
Suite 1200
New York, New York 10118
(917) 320-2500

Iowa
Kansas
Minnesota
Missouri
Nebraska
North Dakota
South Dakota

Delaware
District of Columbia
Maryland
New Jersey
New York
Pennsylvania
Puerto Rico
Virgin Islands

APPENDICES

157

Boston Area Office

San Francisco Regional Office

John F. Vogel, Director	
15 Braintree Hill Office Park
Suite 100
Braintree, Massachusetts 02184
(781) 794-5500

Stanley R. Ivie, Regional Director
25 Jessie Street at Ecker Square
Suite 2300
San Francisco, California 94105
(415) 546-0160

Connecticut
Maine
Massachusetts
New Hampshire
Rhode Island
Vermont

Alaska
American Samoa
Arizona
California
Federated States of Micronesia
Guam
Hawaii
Idaho
Montana
Nevada
Oregon
Utah
Washington
Wyoming

158

FEDERAL DEPOSIT INSURANCE CORPORATION

C. OFFICE OF INSPECTOR
GENERAL’S ASSESSMENT
OF THE MANAGEMENT AND
PERFORMANCE CHALLENGES
FACING THE FDIC
Under the Reports Consolidation Act of 2000,
the Office of Inspector General (OIG) identifies
the management and performance challenges
facing the FDIC and provides its assessment to the
Corporation for inclusion in the FDIC’s annual
performance and accountability report. In doing
so, we keep in mind the FDIC’s overall program
and operational responsibilities; financial industry,
economic, and technological conditions and trends;
areas of congressional interest and concern; relevant
laws and regulations; the Chairman’s priorities and
corresponding corporate goals; and ongoing activities
to address the issues involved. The OIG believes that
the FDIC faces challenges in the critical areas listed
below, a number of which carry over from last year.
These challenges will continue to occupy much of the
Corporation’s attention and require its sustained focus
for the foreseeable future.

Carrying Out Dodd-Frank Act
Responsibilities
The Dodd-Frank Wall Street Reform and Consumer
Protection Act (the Dodd-Frank Act) created a
comprehensive new regulatory and resolution
framework designed to avoid the severe consequences
of financial instability. Title I of the Dodd-Frank
Act provides tools for regulators to impose enhanced
supervision and prudential standards on systemically
important financial institutions (SIFI). Title II
provides the FDIC with a new orderly liquidation
authority for SIFIs, subject to a systemic risk
determination by statutorily designated regulators.
The FDIC has made progress toward implementing
its systemic resolution authorities under the DoddFrank Act, in large part due to the efforts of an
active cross-divisional working group composed of

senior FDIC officials, but challenges remain. These
challenges involve the FDIC fulfilling its insurance,
supervisory, receivership management, and resolution
responsibilities as it meets the requirements of the
Dodd-Frank Act. These responsibilities are crosscutting and are carried out by staff throughout the
Corporation’s headquarters and regional divisions
and offices, including in the Office of Complex
Financial Institutions (OCFI), an office established
in response to the Dodd-Frank Act. That office has
taken steps to realign organizational responsibilities
for Title I and Title II tasks in the interest of ensuring
the most efficient and complementary efforts of staff
involved in both. Staff members from the FDIC’s
Division of Risk Management Supervision, Division
of Resolutions and Receiverships (DRR), and Legal
Division join OCFI in collaborative efforts and play
key roles in implementing Titles I and II.
Those involved in Dodd-Frank Act activities will
continue to evaluate the resolution plans submitted
by the largest bank holding companies and other
SIFIs under Title I, develop strategies for resolving
SIFIs under Title II, work to promote cross-border
cooperation for the orderly resolution of a global SIFI,
and coordinate with the other regulators in developing
policy to implement the provisions of the Act.
In a related vein, the FDIC will carry out risk
assessments to identify supervisory, resolution,
and insurance pricing-related risks in all insured
depository institutions (IDIs) with more than $10
billion in assets, including those for which the FDIC
is not the PFR, in addition to systemically important
bank holding companies and nonbank financial
companies subject to Title I of the Dodd-Frank Act.

Maintaining Strong Information Technology
Security and Governance Practices
Essential to achieving the FDIC’s mission of
maintaining stability and public confidence in the
nation’s financial system is safeguarding sensitive
information, including personally identifiable
information that the FDIC collects and manages
in its role as federal deposit insurer and regulator of

APPENDICES

159

state nonmember financial institutions. Further, as
an employer, an acquirer of services, and a receiver
for failed institutions, the FDIC obtains considerable
amounts of sensitive information from its employees,
contractors, and failed institutions. Increasingly
sophisticated security risks and global connectivity
have resulted in both internal and external risks
to that sensitive information. Internal risks at the
FDIC include errors and fraudulent or malevolent
acts by employees or contractors working within the
organization who may, for example, exfiltrate sensitive
data from the workplace—so called “insider threats.”
External threats include a growing number of cyberbased attacks that can come from a variety of sources,
such as hackers, criminals, foreign nations, terrorists,
and other adversarial groups. Such threats underscore
the importance of a strong, enterprise-wide program
that implements strategies to enhance cybersecurity
within both the FDIC and the banking industry.
Going forward, a challenging priority for the FDIC
will be to maintain effective communication and
collaboration among all parties involved in ensuring a
robust, secure information technology (IT) operating
environment that meets the day-to-day and longerterm needs of the FDIC employees who depend on it.
In that regard, as we pointed out in recent work under
the Federal Information Security Modernization Act
of 2014, the Corporation will need to ensure that
the skills, training, oversight, and resource allocations
pertaining to division and office information security
managers enable them to successfully carry out their
responsibilities. The FDIC has also relied heavily
on its infrastructure services contract to support IT
operations and implement security controls. If not
properly managed, problems that affect the FDIC’s
IT operations could ensue. In addition, given the
substantial financial investment in FDIC systems
and related human resources, the Corporation needs
to consider the cost-effectiveness and measurable
business value outcomes in its decisions to fund major
IT projects to ensure effective stewardship of millions
of dollars in IT investments.
The Corporation will also need to ensure that its
continuity of operations and disaster recovery plans

160

are effective in addressing the negative impacts of
natural disasters or other catastrophic events that
disrupt its business processes and activities and
other government activities. In this regard, in
2014, the FDIC placed into operation a Sensitive
Compartmented Information Facility (SCIF) to meet
continuity of operations requirements for a Level 2
agency. The SCIF was constructed to standards of
Intelligence Community Directive 705, Sensitive
Compartmented Information Facilities. The FDIC
reported that the SCIF received physical security
accreditation in August 2014 and that equipment
was purchased to enable communications testing and
assessments planned in the future. Such a facility
can help ensure the security of the FDIC’s systems
and infrastructure and facilitate communications
with other federal agencies if a widespread emergency
occurs.

Maintaining Effective Supervision and
Preserving Community Banking
The FDIC’s supervision program promotes the safety
and soundness of FDIC-supervised IDIs. The FDIC
is the PFR for 4,037 FDIC-insured, state-chartered
institutions that are not members of the Board of
Governors of the Federal Reserve System. As such,
the FDIC is the lead federal regulator for the majority
of community banks. We have pointed out in our
past work that a key lesson from the crisis is the need
for earlier regulatory response when risks are building.
Even now, for example, as they operate in a postcrisis environment, banks may be tempted to take
additional risks, engage in imprudent concentrations,
or loosen underwriting standards. Some banks are
also introducing new products or lines of business
or seeking new sources for non-interest income, all
of which can lead to interest rate risk, credit risk,
operational risk, and reputational risk. Such risks
need to be managed and addressed early-on during
the “good times” before a period of downturn. FDIC
examiners need to identify problems, bring them to
bank management’s attention, follow up on problems,
bring enforcement actions as needed, and be alert
to such risks as Bank Secrecy Act and anti-money-

FEDERAL DEPOSIT INSURANCE CORPORATION

laundering issues. In doing so, the Corporation
needs to execute its supervisory authority in a fair,
consistent manner. With respect to important
international concerns, the FDIC also needs to
support development of sound global regulatory
policy through participation on the Basel Committee
on Bank Supervision and other related sub-groups.
In light of technological changes, increased use of
technology service providers (TSP), new delivery
channels, and cyber threats, the FDIC’s IT
examination program needs to be proactive and
bankers and Boards of Directors need to ensure
a strong control environment and sound risk
management and governance practices in their
institutions. Importantly, with respect to TSPs,
one TSP can service hundreds or even thousands of
financial institutions, so that the impact of security
incidents in one TSP can have devastating ripple
effects on those institutions. Controls need to be
designed not only to protect sensitive customer
information at banks and TSPs, but also to guard
against intrusions that can compromise the integrity
and availability of operations, information and
transaction processing systems, and data. Given
the complexities of the range of cyber threats, the
FDIC needs to ensure its examination workforce has
the needed expertise to effectively carry out its IT
examination responsibilities.
The FDIC has tried over the past year to enhance
the Corporation’s IT supervision program for
FDIC-supervised institutions and TSPs to focus
on information security, cybersecurity, and
business continuity. In the coming months, the
Corporation needs to continue efforts, along with
the other regulators, to address these risks and use all
available supervisory and legal authorities to ensure
the continued safety and soundness of financial
institutions and affiliated third-party entities. It also
needs to ensure effective information-sharing about
security incidents with regulatory parties and other
federal groups established to combat cyber threats, in
an increasingly interconnected world.
The FDIC Chairman continues to emphasize that one
of the FDIC’s most important priorities is the future

of community banks and the critical role they play in
the financial system and the U.S. economy as a whole.
Local communities and small businesses rely heavily
on community banks for credit and other essential
financial services. These banks foster economic
growth and help to ensure that the financial resources
of the local community are put to work on its behalf.
Consolidations and other far-reaching changes in
the U.S. financial sector in recent decades have
made community banks a smaller part of the U.S.
financial system. The FDIC has sought to identify
and implement changes to improve the efficiency and
effectiveness of the community bank risk management
and compliance examination processes, while still
maintaining supervisory standards. To ensure the
continued strength of the community banks, the
Corporation will also need to sustain initiatives such
as ongoing research, technical assistance to the banks
by way of training videos on key risk management
and consumer compliance matters, and continuous
dialogue with community banking groups.
Maintaining a strong examination program,
conducting vigilant supervisory activities for both
small and large banks, applying lessons learned,
being attuned to harmful cyber threats in financial
institutions and technology service providers, and
preserving community banking will be critical to
ensuring stability and continued confidence in the
financial system going forward.

Carrying Out Current and Future Resolution
and Receivership Responsibilities
One of the FDIC’s most important roles is acting
as the receiver or liquidating agent for failed FDICinsured institutions. The FDIC’s responsibilities
include planning and efficiently handling the
resolutions of failing FDIC-insured institutions
and providing prompt, responsive, and efficient
administration of failing and failed financial
institutions in order to maintain confidence and
stability in our financial system.
As part of the resolution process, the FDIC values
a failing federally insured depository institution,

APPENDICES

161

markets it, solicits and accepts bids for the sale of
the institution, considers the least costly resolution
method, determines which bid to accept, and works
with the acquiring institution through the closing
process. The receivership process involves performing
the closing function at the failed bank; liquidating
any remaining assets; and distributing any proceeds to
the FDIC, the bank customers, general creditors, and
those with approved claims.
The FDIC places great emphasis on promptly
marketing and selling the assets of failed institutions
and terminating the receivership quickly. Although
the number of institution failures has fallen
dramatically since the crisis, these activities still pose
challenges to the Corporation. As of December 31,
2015, DRR was managing 446 active receiverships
with assets in liquidation totaling about $4.8 billion.
In addition, through purchase and assumption
agreements with acquiring institutions, the
Corporation has entered into shared-loss agreements
(SLA). Since loss sharing began during the most
recent crisis in November 2008, the Corporation
has resolved 304 failures with accompanying SLAs.
Under these agreements, the FDIC agrees to absorb
a portion of the loss—generally 80 to 95 percent—
which may be experienced by the acquiring institution
with regard to those assets, for a period of up to ten
years. The initial asset balance of the covered assets in
these SLAs was $216.5 billion. As of December 31,
2015, 215 receiverships still had active SLAs, with a
covered asset balance at that time of $31.5 billion.
As another resolution strategy, the FDIC entered
into 35 structured sales transactions involving
43,315 assets with a total unpaid principal balance
of $26.2 billion. Under these arrangements, the
FDIC receiverships retain a participation interest
in future net positive cash flows derived from thirdparty management of these assets. As of December
31, 2015, the unpaid principal balance in 34 active
arrangements was $3.3 billion. The FDIC will
continue to evaluate termination offers from limited
liability company (LLC) managing members in
deciding whether to pursue dissolution of the LLCs if
in the best economic interest of the receiverships.

162

As time passes and recovery from the crisis continues,
these risk sharing agreements will continue to
wind down and certain active receiverships will be
terminated. Given the substantial dollar value and
risks associated with the risk-sharing activities and
other receivership operations, the FDIC needs to
ensure continuous monitoring and effective oversight
to protect the FDIC’s financial interests.
Given improving conditions in the economy and
financial system, the Corporation has reshaped its
workforce and adjusted its budget and resources
accordingly. Notably, in the case of the FDIC’s
resolutions and receiverships workforce, authorized
staffing fell from a peak of 2,460 in 2010 to
authorized staffing of 756 for 2015. DRR will
continue to substantially reduce its nonpermanent
staff each year, based on declining workload.
These staff reductions bring with them a loss of
specialized experience and expertise. As discussed in
connection with the Dodd-Frank Act responsibilities,
the Corporation must continue to review the
resolution plans of large bank holding companies and
designated nonbank holding companies to ensure
their resolvability under the Bankruptcy Code, if
necessary, and in cases where their failure would
threaten financial stability, administer their orderly
liquidation. Carrying out such activities could pose
significant challenges to those remaining staff in DRR
who could be called upon to lead critical resolution
activities.

Ensuring the Continued Strength of
the Deposit Insurance Fund
Insuring deposits remains at the heart of the FDIC’s
commitment to maintain stability and public
confidence in the nation’s financial system. To
maintain sufficient Deposit Insurance Fund (DIF)
balances, the FDIC collects risk-based insurance
premiums from insured institutions and invests
deposit insurance funds. In response to the DoddFrank Act and in the interest of protecting and
insuring depositors, the Corporation has designed
a long-term DIF management plan. This plan

FEDERAL DEPOSIT INSURANCE CORPORATION

complements the Restoration Plan, which is designed
to ensure that the DIF reserve ratio will reach 1.35
percent by September 30, 2020. As of September 30,
2015, the reserve ratio had reached 1.09 percent.
In the aftermath of the financial crisis, FDIC-insured
institutions continue to make gradual but steady
progress. Continuing to replenish the DIF in a
post-crisis environment is a critical activity for the
FDIC. The DIF balance had dropped below negative
$20 billion during the worst time of the crisis. As
of December 31, 2015, the DIF balance was $72.6
billion, an increase of $9.8 billion over the year-end
2014 balance of $62.8 billion.
While the fund is considerably stronger than it
has been, the FDIC must continue to monitor the
emerging risks that can threaten fund solvency in
the interest of continuing to provide the insurance
coverage that depositors have come to rely upon.
In that regard, the FDIC will need to continue to
regularly disseminate data and analysis on issues
and risks affecting the financial services industry
to bankers, supervisors, the public, and other
stakeholders.
Given the volatility of the global markets and financial
systems, new risks can emerge without warning and
threaten the safety and soundness of U.S. financial
institutions and the viability of the DIF. The FDIC
must be prepared for such a possibility. As part of
its efforts, the FDIC needs to continue collaborating
with others involved in helping to ensure financial
stability and protect the DIF. One important means
of doing so is through participation on the Financial
Stability Oversight Council, created under the DoddFrank Act. This Council was established to provide
comprehensive monitoring of stability in the U.S.
financial system by identifying and responding to
emerging risks to U.S. financial stability and by
promoting market discipline.
The FDIC will also be challenged to contribute to
global financial stability by continuing its engagement
with strategically important foreign jurisdictions and
playing a leadership role in international organizations

that support robust, effective deposit insurance
systems, resolution programs, and bank supervision
practices around the globe.

Promoting Consumer Protections
and Economic Inclusion
The FDIC carries out its consumer protection role
by providing consumers with access to information
about their rights and disclosures that are required
by federal laws and regulations. Importantly, it also
examines the banks where the FDIC is the PFR to
determine the institutions’ compliance with laws
and regulations governing consumer protection, fair
lending, and community investment. These activities
require regular collaboration with other regulatory
agencies. In particular, the FDIC coordinates with
the Consumer Financial Protection Bureau, created
under the Dodd-Frank Act, on consumer issues of
mutual interest and to meet statutory requirements
for consultation relating to rulemakings in mortgage
lending and other types of consumer financial
services and products. The FDIC will need to
continue to assess the impact of such rulemakings on
supervised institutions, communicate key changes to
stakeholders, and train examination staff accordingly.
The FDIC continues to work with the Congress and
others to ensure that the banking system remains
sound and that the broader financial system is
positioned to meet the credit needs of consumers and
the economy, especially the needs of creditworthy
households that may experience distress. One of
the challenges articulated by the FDIC Chairman
is to continue to increase access to financial services
for the unbanked and underbanked in the United
States. The Corporation will continue to develop
and implement targeted strategies to expand access
to mainstream financial institutions by populations
that are disproportionately likely to be unbanked or
underbanked. Input from the FDIC’s 2015 National
Survey of Unbanked and Underbanked Households
will inform those strategies. In addition, the FDIC’s
Advisory Committee on Economic Inclusion,
composed of bankers, community and consumer

APPENDICES

163

organizations, and academics, will continue to explore
ways of bringing the unbanked into the financial
mainstream. The FDIC’s Alliance for Economic
Inclusion initiative seeks to collaborate with financial
institutions; community organizations; local, state,
and federal agencies; and other partners to form
broad-based coalitions to bring unbanked and
underbanked consumers and small businesses into the
financial mainstream.
The FDIC will need to sustain ongoing efforts to
carry out required compliance and community
reinvestment examinations, coordinate with the
other financial regulators and CFPB on regulatory
matters involving financial products and services, and
pursue and measure the success of economic inclusion
initiatives to the benefit of the American public.

Implementing Workforce Changes
and Budget Reductions
During the 2015 planning and budget process, the
Corporation reassessed its current and projected
workload along with trends within the banking
industry and the broader economy.  Based on that
review, the FDIC expects a continuation of steady
improvements in the global economy, a small number
of insured institution failures, gradual reductions in
post-failure receivership management workload, and
significant further reductions in the number of 3-,
4-, and 5-rated institutions.  While the FDIC will
continue to need some temporary and term employees
over the next several years to complete the residual
workload from the financial crisis, industry trends
confirm that there will be a steadily decreasing
need for nonpermanent employees over the next
several years.
Given those circumstances, the FDIC Board of
Directors approved a $2.32 billion Corporate
Operating Budget for 2015, 3.0 percent lower than
the 2014 budget. In conjunction with its approval
of the 2015 budget, the Board also approved an
authorized 2015 staffing level of 6,886 positions,
down from 7,200 previously authorized, a net

164

reduction of 314 positions. This was the fifth
consecutive reduction in the FDIC’s annual
operating budget.
As conditions improve throughout the industry and
the economy, the FDIC will continue its efforts to
achieve the appropriate level of resources; at the
same time, however, it needs to remain mindful
of ever-present risks and other uncertainties in the
economy that may prompt the need for additional
resources and new skill sets and expertise that may
be challenging to obtain. The need for these new
skill sets comes at a time when the Corporation is
focusing on succession management, in light of a
substantial number of FDIC staff who are retiring. In
that regard, the FDIC is continuing to work toward
integrated workforce development processes as it
seeks to bring on the best people to meet its changing
needs and priorities, and do so in a timely manner.
Most recently, the Corporation has emphasized its
Workforce Development Initiative as a means of
fulfilling the FDIC’s future leadership and workforce
capability needs.
The FDIC has long promoted diversity and
inclusion initiatives in the workplace. Section 342
of the Dodd-Frank Act reiterates the importance
of standards for assessing diversity policies and
practices and developing procedures to ensure the fair
inclusion and utilization of women and minorities
in the FDIC’s contractor workforce. The DoddFrank Act also points to the Office of Minority and
Women Inclusion as being instrumental in diversity
and inclusion initiatives within the FDIC working
environment. This office needs to ensure that it has
the proper staff, expertise, and organizational structure
to successfully carry out its advisory responsibilities
to ensure diversity and inclusion throughout the
Corporation.
The FDIC needs to sustain its emphasis on
fostering employee engagement and morale on
the part of all staff in headquarters, regions, and
field locations. Its diversity and inclusion goals
and initiatives, Workplace Excellence Program,
and Workforce Development Initiative are positive

FEDERAL DEPOSIT INSURANCE CORPORATION

steps in that direction and should continue to help
create a workplace that promotes diversity and equal
opportunity.

Ensuring Effective Enterprise
Risk Management Practices
Enterprise risk management is a critical aspect of
governance at the FDIC. Notwithstanding a stronger
economy and financial services industry, the FDIC’s
enterprise risk management framework and related
activities need to be attuned to emerging risks, both
internal and external to the FDIC that can threaten
key business processes and corporate success. As
evidenced in the challenges discussed above, certain
difficult issues may fall within the purview of a single
division or office, while others are cross-cutting within
the FDIC, and others involve coordination with the
other financial regulators and other external parties.
The Corporation needs to maintain effective controls,
mechanisms, and risk models that can address a wide

range of concerns—from specific, everyday risks such
as those posed by personnel security practices and
records management activities, for example, to the far
broader concerns of the ramifications of an unwanted
and harmful cyber attack or the failure of a large bank
or systemically important financial institution.
The Corporation’s stakeholders—including the
Congress, American people, media, and others—
expect effective governance, sound risk management
practices, and vigilant regulatory oversight of the
financial services industry. The Corporation needs to
maintain the trust and confidence that it has instilled
over the years. The FDIC Board of Directors, senior
management, and individuals at every working level
throughout the FDIC need to understand current
and emerging risks to the FDIC mission and be
prepared to take necessary steps to mitigate those risks
as changes occur and challenging scenarios that can
undermine the FDIC’s short- and long-term success
present themselves.

APPENDICES

165

D. ACRONYMS
AEI	

Alliance for Economic Inclusion

FAQ	

Frequently Asked Questions

AMC	

Appraisal management company

FDI ACT	

Federal Deposit Insurance Act

AML	

Anti-Money Laundering

FDIC	

Federal Deposit Insurance Corporation

ANPR	

Advanced Notice of Proposed Rulemaking

FFIEC	

ASBA	

Association of Supervisors of Banks of the
Americas

Federal Financial Institutions Examination
Council

FFMIA	

BCBS	

Basel Committee on Banking Supervision

Federal Financial Management Improvement
Act

BCP	

Business Continuity Planning

FHFA	

Federal Housing Finance Agency

BSA	

Bank Secrecy Act

FIL	

Financial Institution Letter

Call Report	

Consolidated Reports of Condition and
Income

FIS	

Financial Institution Specialist

FISMA	

Federal Information Security Management Act

FMFIA	

Federal Managers’ Financial Integrity Act

FMSP	

Financial Management Scholars Program

FRB	

Board of Governors of the Federal Reserve
System

FRF	

FSLIC Resolution Fund

FSAP	

Financial Sector Assessment Program

FSB	

Financial Stability Board

FS-ISAC	

Financial Services Information Sharing and
Analysis Center

FSLIC	

Federal Savings and Loan Insurance
Corporation

FSOC	

Financial Stability Oversight Council

FSVC	

Financial Services Volunteer Corps

GAAP	

Generally accepted accounting principles

GAO	

U.S. Government Accountability Office

GPRA	

Government Performance and Results Act

G-SIFIs	

Global Systemically Important Financial
Institutions

IADI	

International Association of Deposit Insurers

IDI	

Insured depository institution

IMF	

International Monetary Fund

IMFB	

IndyMac Federal Bank

IT	

Information technology

LCR	

Liquidity coverage ratio

LIDI	

Large Insured Depository Institution

LLC	

Limited Liability Company

LMI	

Low- or moderate-income

LURA	

Land use restriction agreements

MDI	

Minority depository institutions

MFA	

Multi-Factor Authentication

CAMELS
rating scale	

Capital adequacy; Asset quality; Management
quality; Earnings; Liquidity; Sensitivity to
market risks

CAS	

Claims Administration System

CCIWG	

Cybersecurity and Critical Infrastructure
Working Group

CCP	

Central counterparties

CDFI	

Community Development Financial
Institution

CEO	

Chief Executive Officer

CEP	

Corporate Employee Program

CFI	

Complex Financial Institution

CFO Act	

Chief Financial Officers’ Act

CFPB	

Consumer Financial Protection Bureau

CFR	

Center for Financial Research

CFTC	

Commodity Futures Trading Commission

CMP	

Civil Money Penalty

ComE-IN	

Advisory Committee on Economic Inclusion

CRA	

Community Reinvestment Act

CRE	

Commercial real estate

CVSS	

Common Vulnerability Scoring System

DFA	

Dodd-Frank Act

DGP	

Debt guarantee program

DIF	

Deposit Insurance Fund

DRR	

Designated Reserve Ratio

EC	

European Commission

EDIE	

Electronic Deposit Insurance Estimator

EGRPRA	

Economic Growth and Regulatory Paperwork
Reduction Act of 1996

ETS	

Examination Tools Suite

166

FEDERAL DEPOSIT INSURANCE CORPORATION

MOL	

Maximum Obligation Limitation

RESPA	

Real Estate Settlement Procedures Act

MOU	

Memoranda of Understanding

RTC	

Resolution Trust Corporation

MRBA	

Matters Requiring Board Attention

SBA	

Small Business Administration

MWOB	

Minority- and women-owned business

SCIF	

Sensitive Compartment Information Facility

MWOLF	

Minority- and women-owned law firms

SEC	

Securities and Exchange Commission

NCUA	

National Credit Union Administration

SIFI	

Systemically Important Financial Institution

NPR	

Notice of proposed rulemaking

SRM	

Single Resolution Mechanism

NSFR	

Net Stable Funding Ratio

SLA	

Shared-loss agreement

OCC	

Office of the Comptroller of the Currency

SMS	

Systemic Monitoring System

OFAC	

Office of Foreign Assets Control

SNC Program	

Shared National Credit Program

OLA	

Orderly Liquidation Authority

SNM	

State Nonmember

OLF	

Orderly Liquidation Fund

SRAC	

Systemic Resolution Advisory Committee

OMB	

U.S. Office of Management and Budget

SRB	

Single Resolution Board

OPM	

U.S. Office of Personnel Management

SRM	

Single Resolution Mechanism

OTC	Over-the-counter

SSGN	

Structured sale of guaranteed note

OTS	

Office of Thrift Supervision

TLGP	

Temporary Liquidity Guarantee Program

P&A	

Purchase and assumption

TSP	

Federal Thrift Savings Plan

PFR	

Primary federal regulator

TSP (IT-related)	 Technology service providers

QBP	

Quarterly Banking Profile

VIE	

Variable interest entity

ReSG	

FSB’s Resolution Steering Group

WE	

Workplace Excellence

APPENDICES

167

N OT E S

2015

Federal Deposit
Insurance Corporation
This Annual Report was produced by talented and dedicated staff.
To these individuals, we would like to offer our sincere thanks and
appreciation. Special recognition is given to the following for their
contributions:
♦	 Jannie F. Eaddy
♦	 Brian D. Aaron
♦	 Barbara A. Glasby
♦	 Financial Reporting Section Staff
♦	 Division and Office Points-of-Contact

H H H

550 17th Street, N.W.
Washington, DC 20429-9990
www.fdic.gov
FDIC-003-2016

H H H


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102