Bank Insurance Fund (BIF):
-
BIF’s
comprehensive income was $1.7 billion for the year ending December 31,
2003, compared to $1.6 billion for the same period last year. While
estimated losses for both future and actual failures, as well as
litigation, decreased by $832 million, this increase to income was
partially offset by lower unrealized gains on available-for-sale
securities of $576 million and lower interest income on US Treasury
obligations of $162 million.
-
Receivables
from bank resolutions increased by $6 million to $511 million during 2003,
and decreased by $112 million during the fourth quarter of 2003. During
the fourth quarter, Pulaski Savings Bank of Philadelphia failed with total
assets at failure of $9 million. BIF recorded a receivable when disbursing
$9.5 million to cover obligations to insured depositors, and an estimated
loss of $1.1 million was then recorded against this receivable. This was
offset by recoveries of payments made to cover obligations to insured
depositors of failed banks, during the quarter, which reduced the net
receivable by $125 million.
-
BIF’s
contingent liability for anticipated failures declined by $830 million, or
82 percent, to $178 million for the year and declined by $238 million, or 57
percent,
for the fourth quarter. BIF reserves have declined steadily over the past
year as a result of overall favorable trends in the banking industry and
improvement in the financial condition of a few large institutions.
-
BIF’s assets in liquidation decreased during the year by
$310 million, or 47 percent, to $347 million. This is primarily due to the fact
that 95 percent of the $1.1 billion in assets retained from the failure of
Southern Pacific Bank in February 2003 have already been disposed of.
Also, 56 percent of the $438 million in assets remaining as of December 31, 2002,
from the three largest failures of 2002, have been liquidated.
Savings
Association Insurance Fund (SAIF):
-
SAIF’s
comprehensive income was $493 million for the year ending December 31,
2003, compared to $812 million for the same period last year. The
difference of $318 million was primarily due to a decrease in unrealized
gains on available-for-sale securities of $198 million, a slight reduction
in interest revenue of $32 million, and a smaller reduction in the
estimated losses for future failures of $55 million.
-
SAIF’s assets
in liquidation decreased by $63 million to $334 million for the year and
decreased by $47 million for the fourth quarter. Most of this decrease was
due to collections from the Superior Bank receivership, including the
receipt of the $24 million annual payment from a promissory note arising
from a settlement with the former owners of Superior Bank.
FSLIC
Resolution Fund (FRF):
~FRF-FSLIC~
As
of December 31, 2003, the liability associated with 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. From August through December 2003, the United
States Court of Appeals for the Federal Circuit affirmed the claims court’s
dismissals of five cases. In these cases (Centrust, D&N,
Karnes County, Security Bailey, and Cain), the lower court had
awarded no damages and dismissed the plaintiffs’ claims. The appeals court
affirmed these rulings. It also reduced the amount of damages from $8.8
million to approximately $5 million in Bank United, rejecting some of
the plaintiff’s damages theories. Finally, the United States Supreme Court
declined to hear the appeal of a goodwill
plaintiff whose claim had been dismissed by both the claims court and the
appeals court (Gravee & Maher), so that case is now finally
resolved.
Guarini Litigation
To date, there have been liability
determinations in six of the eight “Guarini” cases. The United States Court
of Federal Claims has entered an award for the plaintiffs in three of these
cases and appeals have been
filed by DOJ. A decision on liability has not been made in the seventh
case, and the eighth case was settled during 2002 for $20 thousand.
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