Bank Insurance Fund (BIF):
- Comprehensive income (net income
plus current period unrealized gains/losses on available-for-sale securities) was $366
million for the six months ending June 30, 2000, increasing the fund balance to $29.8
billion.
- Revenue totaled $941 million for
the six months ending June 30, 2000. The fund earned $899 million in interest on
investments in U.S. Treasury obligations and $24 million in deposit insurance assessments.
- Receivables from bank resolutions
are $425 million at June 30, 2000. This receivable peaked at $27.8 billion in 1992 due to
the large number of bank failures occurring at that time.
- The contingent liability for
anticipated failures increased by $267 million to $581 million during the second quarter
of 2000. While the number of problem banks continues to remain relatively constant, the
financial condition of a small number of banks has deteriorated significantly. The reserve
reflects a relatively low level of risk to the fund; as of June 30, the contingent
liability represents 1.95% of the fund balance.
- Two BIF-insured institutions
failed during the first six months of 2000. Total assets at failure were $124
million.
Savings Association Insurance Fund (SAIF):
- Comprehensive income was $257
million for the six months ending June 30, 2000, increasing the fund balance to $10.5
billion.
- Revenue totaled $324 million for
the six months ending June 30, 2000. The fund earned $315 million in interest on U.S.
Treasury obligations and $9 million in deposit insurance assessments.
- The contingent liability for
anticipated failures increased by $40 million to $97 million during the second quarter of
2000. While the number of problem thrifts continues to remain relatively constant, the
financial condition of a small number of thrifts has deteriorated significantly. The
reserve reflects a relatively low level of risk to the fund; as of June 30, the contingent
liability represents 0.92% of the fund balance.
- One SAIF-insured thrift failed
during the first six months of 2000. Total assets at failure were $30 million.
Future goodwill litigation
payments cannot be reasonably estimated at this time.
- 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. If an appropriation to the FRF-FSLIC was not available to pay the goodwill
litigation judgments and compromise settlements, these liabilities would be material and
could adversely affect the financial condition of the fund.
On March 3,
2000, the United States Court of Federal Claims ruled that the federal government must pay
$21.5 million to Landmark Land Company and $17.7 million to the FDIC, as manager of the
FSLIC Resolution Fund, for breach of contract in the supervisory goodwill litigation. All
parties to the litigation have filed appeals.
On July 6, 2000,
the United States Court of Federal Claims issued a decision awarding zero damages to the
plaintiffs in the goodwill case, Bluebonnet Savings Bank versus United States. The
plaintiffs sought $175.9 million in damages and may appeal the decision.
Other goodwill litigation cases
are currently on appeal, the final outcome of which is uncertain.
- In addition to payments for
goodwill settlements, the FRF is responsible for reimbursing the U.S. Department of
Justice for its goodwill litigation expenses.
- Assets in liquidation totaled $36
million as of June 30, 2000, down by $5 million over the last 12 months.
~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. The Act
mandates that 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.
On July 27,
1999, the FDIC Board of Directors granted authority to the Director of the Division of
Finance, or his designee, to: 1) repay the U. S. Treasury $4.556 billion in appropriations
made to the RTC pursuant to the Act; and 2) after the U. S. Treasury has been paid, to pay
the REFCORP any additional excess cash until such time as the FRF-RTC is dissolved upon
satisfaction of all debts and liabilities and sale of all assets.
With the last
payment of $271 million on February 3, 2000, the FRF-RTC has fully repaid the $4.556
billion to the U.S. Treasury. As a result, the FRF-RTC made its first payment to the
REFCORP of $533 million on April 11, 2000. The FRF-RTC cash balance is $1.2 billion at
June 30, 2000.
- Assets in liquidation totaled
$376 million as of June 30, 2000, down by $297 million over the last 12 months.
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