Bank Insurance Fund (BIF):
- Revenue totaled $406 million for the three months
ending March 31, 2002. The fund earned $384 million in interest on investments in U.S.
Treasury obligations and $17 million in deposit insurance assessments.
- Comprehensive income (net income plus current
period unrealized gains/losses on available-for-sale securities) was $258 million for the
three months ending March 31, 2002, increasing the fund balance to $30.7 billion.
- The reserve ratio at December 31, 2001, was 1.26
percent. If this reserve ratio falls below the designated reserve ratio (DRR) of 1.25
percent, the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA)
authorizes and mandates BIF assessments if needed to maintain the fund at the DRR or to
return the fund to the DRR if it falls below the DRR. The FDIC is required to set
semiannual assessment rates that are sufficient to increase the reserve ratio to the DRR
not later than one year after such rates are set, or in accordance with recapitalization
schedule of fifteen years or less.
- Receivables from bank resolutions increased by
$920 million to $999 million during the first quarter of 2002. This net increase was due
to the failure of six BIF-insured institutions during the first three months of 2002.
Total assets at failure were $2 billion, and the BIF made payments of $1.5 billion to
cover obligations to insured depositors.
- Assets in liquidation increased by $1.5 billion
to $1.7 billion during the first quarter of 2002.
Savings
Association Insurance Fund (SAIF):
- Revenue totaled $129 million for the three months
ending March 31, 2002. The fund earned $122 million in interest on U.S. Treasury
obligations and $6 million in deposit insurance assessments.
- Comprehensive income was $114 million for the
three months ending March 31, 2002, increasing the fund balance to $11 billion.
- Receivables from thrift resolutions decreased by
$667 million to $618 million during the first quarter of 2002. This decrease was primarily
due to recoveries totaling $502 million of payments made to cover obligations to insured
depositors for the Superior Bank, FSB receivership.
FSLIC
Resolution Fund (FRF):
~FRF-FSLIC~
- The U.S. Department of Treasury (U.S. Treasury)
has determined that the FRF is responsible for the payment of judgments and settlements in
most supervisory goodwill litigation cases against the U.S. Government.
Future goodwill
litigation payments cannot be reasonably estimated at this time. This uncertainty arises,
in part, from the existence of significant unresolved issues pending at the appellate or
trial court level, as well as the unique circumstances of each case.
Funds to cover goodwill judgments and settlements are provided by an open-ended
appropriation as provided by section 110 of the Department of Justice Appropriations Act,
2000. Because of this, any liabilities for goodwill litigation should have no material
impact on the financial condition of the FRF-FSLIC.
In addition to payments for
goodwill settlements, the FRF is responsible for reimbursing the U.S. Department of
Justice for its goodwill litigation expenses.
On March 21, 2002, FRF-FSLIC
received an appropriation of $21.5 million from the Department of Treasury for the
goodwill judgment in Landmark Land Company v. United States. Payment to
Landmark was made on March 28, 2002.
On March 21, 2002, the trial
court in Bluebonnet Savings Bank v. United States issued an opinion
directing the clerk of the court to enter judgement in favor of plaintiff James Fail for
$132,398,200. The decision cited what the court believed was controlling language in the
prior Court of Appeals for the Federal Circuit's decision in the matter and felt
constrained to award the full amount claimed by plaintiff Fail based on the appellate
court's directions on remand.
Paralleling the goodwill
litigation cases are eight similar cases alleging that the government breached agreements
regarding tax benefits associated with certain FSLIC-assisted acquisitions. These
agreements contained the promise of tax deductions for losses incurred on the sale of
certain thrift assets purchased by plaintiffs, from the FSLIC, even though the FSLIC
provided them with tax-exempt reimbursement. A provision in the Omnibus Budget
Reconciliation Act of 1993 (popularly referred to as the "Guarini legislation")
eliminated the tax deductions for these losses. To date, there have been liability
determinations in three of the "Guarini cases." Decisions on liability have not
yet been made in the other five.
The FDIC believes that it is
possible that substantial amounts may be paid from the FRF-FSLIC as a result of the
judgments and settlements from the "Guarini litigation." However, because of the
uncertainty surrounding the method of computing damages, the amount of the damages is not
estimable at this time.
- Assets in liquidation totaled $14 million as of
March 31, 2002.
~FRF-RTC~
- The RTC Completion Act (Act) requires the
FDIC to return to the U.S. Treasury any funds that were transferred to the RTC pursuant to
the Act but not needed by the RTC. The Act made available approximately $18 billion worth
of additional funding, of which $4.556 billion was used. In addition, the FDIC must
transfer to the Resolution Funding Corporation (REFCORP) the net proceeds from the sale of
FRF-RTC assets (once all liabilities of the FRF-RTC have been provided for) to pay the
interest on REFCORP bonds. Any such payments benefit the U.S. Treasury, which would
otherwise be obligated to pay the interest on the bonds.
With the last payment of $271 million on March 3, 2000,
the FRF-RTC has fully repaid the $4.556 billion to the U.S. Treasury. Beginning in April
2000, the FRF-RTC has made eight payments totaling $3.347 billion to REFCORP. The last
payment to REFCORP of $492 million was made on January 11, 2002. The FRF-RTC cash balance
is $753 million at March 31, 2002.
- Assets in liquidation totaled $219 million as of
March 31, 2002.
|
