Bank Insurance Fund (BIF):
- Comprehensive income was $1.4 billion
for the nine months ending September 30, 2003, compared to $944
million for the same period last year. Over the year-to-date period,
estimated losses for future and actual failures, as well as litigation,
decreased by $1.1 billion and operating expenses decreased by $32 million.
However, these increases to income were partially offset by lower
unrealized gains on available-for-sale securities of $542 million and
lower interest revenue on U.S. Treasury obligations of $119 million.
- BIF's Reserve Ratio increased
from 1.28% at 03/31/03 to 1.29% at 06/31/03 because the growth of the BIF
more than outweighed the growth of BIF-insured deposits. The fund balance
increased by $418 million, or 1.3%, while the estimated insured deposits
increased by $8.7 billion, or .3%.
- Receivables from bank resolutions increased by
$118 million to $623 million during the first nine months of 2003, but
remained unchanged from second to third quarter of 2003 because of
offsetting activity. Recoveries of payments made to cover obligations to
insured depositors of failed banks reduced the net receivable by $169
million. This was offset by a $173 million decrease in the allowance for
loss which resulted from higher estimated asset recoveries due to the
resolution of litigation and tax benefit uncertainties.
- BIF's contingent liability for
anticipated failures declined by $592 million, or 59%, to $416 million for
the year and declined by $369 million, or 47%, for the third quarter. This
overall decline in the reserves is due to implemented improvements to the
loss reserve methodology, improvement in the financial condition of a few
large banks, and the actual failure of two BIF-insured banks in 2003.
-
Assets in liquidation decreased by $213 million to $444
million since year-end 2002. This is primarily due to the fact that 93% of
the $1.05 billion in assets retained from the failure of Southern Pacific
Bank in February 2003 have already been disposed of. Also, 46% of the $438
million in assets remaining as of December 31, 2002, from the three
largest failures of 2002 have been liquidated. These three large failures
were Hamilton Bank, NextBank and Connecticut Bank of Commerce.
Savings
Association Insurance Fund (SAIF):
-
SAIF’s comprehensive income was $439 million for the nine
months ending September 30, 2003, compared to $651 million for the same
period last year. This difference was primarily due to a decrease in
unrealized gains on available-for-sale securities of $188 million and a
slight reduction in interest revenue of $21 million.
- SAIF's contingent
liability for anticipated failures decreased by $88 million, or 98%, to $2
million for the year and decreased by $24 million, or 92%, for the third
quarter. The overall decline is attributable to implemented improvements
to the loss reserve methodology and the improved financial condition of a
few large institutions.
- SAIF's Reserve Ratio increased
slightly from 1.37% at 03/31/03 to 1.38% at 06/30/03. The fund balance
increased by $177 million, or 1.5%, while the estimated insured deposits
increased by $7.9 billion, or 1.0%.
FSLIC
Resolution Fund (FRF):
~FRF-FSLIC~
- As of September 30, 2003, future Goodwill and Guarini litigation
judgments and/or settlements cannot be reasonably estimated.
Goodwill
Litigation
For the year, the trial court entered orders dismissing 15 goodwill litigation cases, and
two goodwill cases were settled for a total of $30 thousand. The
FRF-FSLIC paid both goodwill settlements and received appropriated funds
for the same amounts from the U.S. Treasury. In addition, the FRF-FSLIC
paid $954 thousand for stipulated attorneys fees and costs in one goodwill
case during June 2003. In July 2003, the Circuit Court of Appeals
reversed a decision in Comfed v. United States and sent the case
back to the Court of Claims for additional evidence on the issue of
whether a contract existed between the government and the thrift.
In addition to payments for goodwill judgments and settlements, the FRF is
responsible for reimbursing the U.S. Department of Justice (DOJ) for its
goodwill litigation expenses. On October 1, 2003, FRF paid $33.3
million to DOJ to cover fiscal year 2004 estimated expenses.
Guarini Litigation
To date, there have liability determinations in six of the "Guarini"
cases, a decision on liability has not been made in the seventh case, and
the eighth case was settled during 2002 for $20 thousand. In two of the
six cases, damages of approximately $28 million and $70 million were
awarded in February and April 2003, respectively, by the United States
Court of Federal Claims. Both cases have been appealed by the DOJ. In a
third case decided in August 2003, the Court awarded damages of
approximately $48.7 million; DOJ's time for filing an appeal has not yet
run.
- Through September 30, 2003, the FRF-RTC has fully repaid $4.556
billion in appropriations to the U.S. Treasury and made payments of $4.572
billion to the Resolution Funding Corporation (REFCORP) to pay interest on
REFCORP bonds.
-
One FRF-RTC securitization deal remains
active as of September 30, 2003, and is expected to terminate in 2004.
|
