Large banks' special assessment fees climb as deposit insurance losses mount

The Federal Deposit Insurance Corp.'s estimated loss to the Deposit Insurance Fund after the failures of Silicon Valley Bank and Signature Bank is climbing, according to PNC Financial Services Group Inc.

The federal regulator in late February estimated the loss to the Deposit Insurance Fund (DIF) now stands at $20.4 billion, according to a Form 8-K filing from PNC, up from $16.3 billion when the special assessment rule was finalized in November 2023 and $15.8 billion when the rule was proposed in May 2023.

PNC now expects to pay $645 million toward the special assessment, up from its previous estimate of $515 million.

Citigroup Inc. also noted that it likely faces changes associated with the special assessment.

"We don't know what it is," CEO Jane Fraser said during a March 5 conference presentation. "We don't expect it to be huge."

Excluding the FDIC special assessment, the company reaffirmed its 2024 expense guidance of between $53.5 billion to $53.8 billion.

Under the final rule, banks with more than $5 billion in uninsured deposits at Dec. 31, 2022, will be subject to an eight-quarter payment at a rate of 3.36 basis points per quarter, or about 13.4 basis points annually. The FDIC noted in both the proposal and final rule that the estimated loss to the DIF will fluctuate as assets are sold, liabilities are satisfied and receivership expenses are incurred.