The U.S. Federal Deposit Insurance Corp. fund guaranteeing customer deposits in U.S. banks is rebuilding more quickly as bank failures continue to slow from their 2010 peak, the agency said in a report Monday.

The federal backstop, funded by assessments on banks, was at $11.8 billion at the end of 2011, up from a deficit of $20.9 billion at the end of 2009 as the credit crisis drove up the number of collapsing banks. The FDIC predicted it will spend $12 billion to cover bank shutdowns through 2016, according to a report updating the fund’s health. That five-year cost is $7 billion less than the FDIC’s last five-year projection in October.