Skip Header

Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Home > About FDIC > Financial Reports > 1996 Annual Report

1996 Annual Report


Selected Statistics

Dollars in millions For the year ended December 31
1996 1995 1994

Bank Insurance Fund
Financial Results
$ 1,655
$ 4,089
$ 6,467
Operating Expenses 505 471 423
Insurance Losses and Expenses (251) 12 (2,682)
Net Income 1,401 3,606 8,726
Insurance Fund Balance
$ 26,854
$ 25,454
$ 21,848
Fund as a Percentage of Insured Deposits 1.34% 1.30% 1.15%
Selected Statistics
Total BIF-Member Institutionsl 9,822 10,242 10,759
Problem Institutions 86 151 264
Total Assets of Problem Institutions
$ 7,000
$ 20,160
$ 42,213
Institution Failures 5 6 13
Total Assets of Failed Institutions
$ 183
$ 753
$ 1,392
Number of Active Failed Institution Receiverships 408 590 802
Savings Association Insurance Fund
Financial Results
$ 5,502
$ 1,140
$ 1,215
Operating Expenses 63 40 20
Insurance Losses and Expenses (92) (321) 414
Net Income 5,531 1,421 781
Insurance Fund Balance
$ 8,888
$ 3,358
$ 1,937
Fund as a Percentage of Insured Deposits 1.30% 0.47% 0.28%
Selected Statistics
Total SAIF-Member Institutionsn 1,630 1,728 1,844
Problem Institutions 31 42 54
Total Assets of Problem Institutions
$ 6,000
$ 10,862
$ 30,630


Institution Failures 1 2 % 2%
Total Assets of Failed Institutions
$ 35
$ 456
$ 137
Number of Active Failed Institution Receiverships 2 1 & 1 &

l Commercial banks and savings institutions. Does not include U.S. branches of foreign banks.

n Savings institutions and commercial banks. Does not include Resolution Trust Corporation (RTC) conservatorships.

% No SAIF-insured institutions that failed in 1995 or prior were the financial responsibility of the SAIF. The RTC was responsible for the resolution and related costs of SAIF-insured institutions that failed before July 1,1995. The SAIF became responsible for resolutions thereafter.

& This represents the receivership for Heartland Federal Savings and Loan Association, Ponca City, Oklahoma, which was closed on October 8, 1993. Although this is a SAIF receivership, any financial burden will be borne by the FSLIC Resolution Fund (FRF). The number of active failed thrift receiverships for the FRF was: 33 in 1996 (excluding 435 former RTC receiverships); 62 in 1995; and 76 in 1994.

January 29

Joseph H. Neely, former Mississippi banking commissioner, was sworn in as a member of the FDIC Board of Directors. His appointment brought the Board to its full membership of five directors for the first time since August 1992 (click here and here).

February 6

The FDIC Board streamlined and simplified audit and reporting requirements for certain sound, well-managed banks. These amendments implemented provisions of a 1994 law promoting regulatory relief as well as the FDIC’s own recommendations to eliminate unnecessary requirements (click here).

February 9

At an FDIC symposium on derivatives, Chairman Helfer announced new efforts to monitor and assess risk at insured institutions. The efforts are designed to enhance the FDIC’s traditional approach to risk assessment allowing the agency to respond more quickly and efficiently to emerging risks. As part of those efforts, the FDIC developed specific guidelines for examiners on how to factor relevant economic and other data into their risk evaluations of specific institutions (click here).

March 14

The FDIC reported that commercial banks earned $48.8 billion in 1995, surpassing by 9.4 percent the previous record of $44.6 billion in 1994, according to preliminary data. The jump in earnings resulted primarily from increased interest and fee income. In 1996, bank earnings reached a new record of $52.4 billion (click here and here).

April 8

The first results of a new examiner reporting system showed that loan underwriting standards remained stable at a group of 2,001 FDIC-supervised institutions that were examined during the 12-month period ending in February. However, in just over 10 percent of the institutions reviewed, FDIC examiners reported that underwriting standards were characterized by higher-than-normal risk. The FDIC plans to release its evaluation of loan underwriting trends semiannually (click here).

May 13

Chairman Helfer announced the agency is taking a series of steps to improve bank and thrift compliance with disclosure guidelines for mutual funds and other uninsured investment products. The action followed a year-long study on the sale of investment products at banks that found a gap exists between regulatory guidelines and actual employee performance for a number of banks (click here).

June 17

Continuing its efforts to reduce burdensome regulations for banks and the public, the FDIC took steps to streamline rules and policies in areas such as capital standards and securities registration requirements (click here).

July 16

The FDIC’s Legal Division issued guidance to help banks and thrifts decide whether the stored-value cards they issue qualify for federal deposit insurance. In a General Counsel opinion letter, the FDIC concluded that in most cases stored-value cards are not protected by deposit insurance. The FDIC separately asked for comment on whether the agency should, by future regulation, determine that stored-value cards are entitled to deposit insurance depending on their general usage (click here).

August 9

The first institution insured by the Savings Association Insurance Fund (SAIF) failed since the FDIC assumed responsibility from the Resolution Trust Corporation for these institutions on July 1, 1995. No other SAIF-member institution was closed during the year although an “Oakar” institution, one where deposits are insured by both the Bank Insurance Fund (BIF) and the SAIF, was closed on June 14 (click here and here).

September 12

The FDIC held a public hearing on stored-value cards, Internet banking and other electronic payment systems. Issues discussed included whether stored-value cards should be entitled to federal deposit insurance as they become more widely used; what types of disclosures an institution should provide to consumers; and safety and soundness concerns (click here).

September 30

Congress approved legislation supported by the FDIC to put the SAIF on sound footing. The President signed the legislation into law the same day. Under the new law, the thrift industry paid a one-time special assessment of $4.5 billion to capitalize the SAIF, while banks will bear part of the payments on the Financing Corporation (FICO) bonds sold from 1987 to 1989 to shore up the former Federal Savings and Loan Insurance Corporation. BIF-member institutions will pay one-fifth the rate paid by SAIF members for the first three years or until the funds are merged. After January 1, 2000, BIF and SAIF members will share the FICO payments on a pro-rata basis (click here and here and here).

October 8

Implementing the new SAIF law, the FDIC Board set a special assessment of 65.7 basis points on institutions that pay assessments to the SAIF in order to capitalize the fund at its Designated Reserve Ratio of 1.25 percent of insured deposits effective October 1, 1996. The special assessment was collected electronically on November 27. With the SAIF now capitalized, the Board also proposed to reduce SAIF assessment rates, retroactive to October 1, 1996 (click here).

October 29

Responding to the FDIC’s declining workload, Deputy to the Chairman and Chief Operating Officer Dennis F. Geer outlined for employees the Corporation’s plans for downsizing in 1997 and subsequent years. He also announced a number of measures intended to cushion the impact of staff reductions, such as a new buyout program and expanded outplacement assistance. During the first buyout program—offered to FDIC and Resolution Trust Corporation employees from November 1995 through January 1996—over 900 employees took buyouts (click here and here).

December 8

To handle the reduced levels of resolutions and liquidation work projected over the next several years more effectively, the FDIC created the new Division of Resolutions and Receiverships (DRR). The new division represents a merger of the Division of Depositor and Asset Services and the Division of Resolutions (click here and here and here).

December 10

The FDIC unveiled a new service called “Institution Directory,” which enables the public to obtain information about individual banks and savings institutions via the Internet. The service is available on the FDIC’s home page at (click here and click here).

December 11

The Board lowered SAIF assessment rates and widened the rate spread in order to avoid collecting more than is needed to maintain the SAIF’s capitalization at 1.25 percent of insured deposits and to improve the effectiveness of the risk-based assessment system. SAIF-insured institutions will pay the same rate for deposit insurance as BIF-insured institutions (click here).

The Board also approved the Corporation’s 1997 budget of $1.62 billion, down $221 million or 13.6 percent from the $1.84 billion authorized in 1996. The budget reduction reflected the continued impact of the Corporation’s downsizing efforts.

December 20

The FDIC Board adopted the interagency Federal Financial Institutions Examination Council’s revised “CAMELS” rating system for assessing the soundness of financial institutions on a uniform basis. A sixth component was added to the previous “CAMEL” rating system—“S” for sensitivity to market risk. Also, the FDIC in October became the first federal banking agency to disclose individual component ratings to banks (click here and here).



Last Updated 07/09/99

Skip Footer back to content