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2005 Annual Report

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III. Performance Results Summary - Multi-Year Performance Trend

Multi-Year Performance Trend
Depositor Payouts in Instance of Failure
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
The FDIC responds promptly to financial institution closings and emerging issues. Timely payments made to all depositors of the 11 insured depository institutions that failed in 2002. Timely payments made to all depositors of the three insured depository institutions that failed in 2003. Timely payments made to all depositors of the four insured depository institutions that failed in 2004. There were no failures in 2005.
Risk Classifications
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Maintain and improve the deposit insurance system. BIF and SAIF reserve ratios maintained at or above the statutory ratio of 1.25 percent. Chairman testified before the Senate Committee in support of deposit insurance reform. BIF and SAIF reserve ratios maintained at or above the statutory ratio of 1.25 percent. Chairman testified before the Senate Committee in support of deposit insurance reform. The FDIC completed implementation of enhancements to the reserving process and methodology in March 2004. During 2004, reserve ratios were maintained at or above the designated reserve ratio as required by statute. Through September 30, 2005, BIF and SAIF reserve ratios were maintained at or above the statutory ratio of 1.25 percent.
  Legislation on deposit insurance reform was introduced in the House and the Senate. Legislation on deposit insurance reform was passed in the House and was pending in the Senate when Congress recessed for the year. Deposit insurance reform remained under consideration in the Senate, but no action was taken prior to the end of the 108th Congress. Congress included deposit insurance reform legislation in the conference report to reconciliation legislation, S. 1932. The measure was adopted by the Senate in December and was passed by the House February 1, 2006. The President signed the bill enacting deposit insurance reform legislation on February 8, 2006.
Risk Management, Safety and Soundness
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Conduct on-site risk management examinations to assess an FDIC-supervised insured depository institution's overall financial condition, management practices and policies, and compliance with applicable laws and regulations. Conducted 2,534 or 98 percent of required safety and soundness examinations. Conducted 2,421 required safety and soundness examinations in accordance with FDIC policy. Conducted 2,515 required safety and soundness examinations in accordance with FDIC policy. Conducted 2,399 required safety and soundness examinations in accordance with FDIC policy.
Safety and Soundness Enforcements Actions
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Take prompt and effective supervisory action to address issues identified during the FDIC examination of FDIC-supervised institutions that receive a composite Uniform Financial Institutions Rating of 4 or 5 (problem institution). Monitor FDIC-supervised insured depository institutions' compliance with formal and informal enforcement actions. (Revised 2005) Eighty-four institutions designated as problem (composite 4 or 5 rated). Forty-eight were removed from problem status and 63 were added. Seventy-three institutions designated as problem (composite 4 or 5 rated). Fifty-eight with total assets of $6.98 billion were removed from problem status and 47 with total assets of $4.99 billion were added. Additionally, the FDIC issued the following formal and informal enforcement actions: 40 (5 contained BSA provisions) Cease and Desist Orders and 157 (6 contained BSA provisions) Memoranda of Understanding. Forty-four institutions designated as problem (composite 4 or 5 rated). Fifty-seven with total assets of $6.3 billion were removed from problem status and 28 institutions with total assets of $4.8 billion were added. Additionally, FDIC issued the following formal and informal actions: 38 (11 contained BSA provisions) Cease and Desist Orders and 145 (31 contained BSA provisions) Memoranda of Understanding. Twenty-nine institutions designated as problem (composite 4 or 5 rated). Thirty-six with total assets of $2.8 billion were removed from problem status and 19 institutions with total assets of $802 million were added. Additionally, FDIC issued the following formal and informal actions: 15 (8 contained BSA provisions) Cease and Desist Orders and 152 (69 contained BSA provisions) Memoranda of Understanding.
Compliance Examinations
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Conduct CRA and compliance examinations in accordance with FDIC examination frequency policy. (Revised -2005) Conducted 1,840 comprehensive compliance-only and CRA examinations in accordance with FDIC policy. There were no delinquencies in 2002. Conducted 1,919 comprehensive compliance-only and CRA examinations in accordance with FDIC policy. There were no delinquencies in 2003. Conducted 2,136 comprehensive compliance-only and CRA examinations in accordance with FDIC policy. There were no delinquencies in 2004. Conducted 2,020 comprehensive compliance-only and CRA examinations in accordance with FDIC policy. A small number of exams were postponed to early 2006 to give financial institutions time to recover from the effects of the Gulf Coast hurricanes.
CRA Outreach
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Provide effective outreach and technical assistance on topics related to CRA, fair lending and community development. Money Smart classes attended by approximately 2,800 participants. The FDIC supplied more than 111,000 copies of Money Smart curricula to organizations. FDIC sponsored 65 public outreach initiatives, 111 community development activities, and 67 technical assistance activities. Targets for the following were met: added 200 new Money Smart Alliance members; distributed 20,000 copies of Money Smart curriculum; additional 294,000 members reached; and conducted 125 outreach and technical assistance activities. Targets for the following were met: added 306 new Money Smart Alliance members; distributed 95,283 copies of Money Smart curriculum; additional 195,000 members reached; and conducted 163 outreach and technical assistance activities.
Compliance Enforcement Actions
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Take prompt and effective supervisory action to monitor and address problems identified during compliance examinations of FDIC-supervised institutions that receive a 4 or 5 rating for compliance with consumer protection and fair lending laws. (Revised - 2005) Eight of nine institutions entered into a Memorandum of Understanding (MOU) with the FDIC; the ninth was in the process of reviewing the recommended MOU at year-end. The only 4 rated institution entered into a MOU with the FDIC. Of the five institutions rated 4 as of December 31, 2004, two entered into Memoranda of Understanding with the FDIC; and two were subject to outstanding Cease and Desist Orders. A Cease and Desist Order for the fifth institution was issued during the second quarter of 2005. Of the three institutions rated 4 as of December 31, 2005, one entered into a Memorandum of Understanding with the FDIC; and two are subject to outstanding Cease and Desist Orders. There are no institutions currently rated a 5.
Risk Management Safety and Soundness
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Increase industry and regulatory awareness of emerging/high-risk areas. (Added - 2005)       The Anti-Money Laundering (AML) goal has met targets and the advanced training for all BSA/AML subject matter experts has been accomplished.
More closely align regulatory capital with risk in large or multinational banks. (Added 2005)       Final results of the 4th Quantitative Impact Study (QIS- 4) show a 15.5 percent decline in minimum regulatory capital from current levels, with a wide dispersion in results that was primarily due to banks' assessment of risk, rather than actual risk.
Basel Capital Accord
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Ensure that FDIC-supervised institutions that plan to operate under the new Basel Capital Accord are making satisfactory progress toward meeting required qualification standards. (Added -2005)       Initial Basel II outreach efforts or baseline reviews continue at FDIC-supervised institutions that have indicated their possible intent to opt-in for treatment under the new rules. FDIC is integrally involved in domestic and international policy and implementation processes to help ensure a smooth transition to Basel II.
Consumer Complaints and Inquiries
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Meet the statutory mandate to investigate and respond to consumer complaints about FDIC-supervised financial institutions. FDIC received 8,368 consumer complaints and closed 95 percent of them. Of the complaints closed, 94 percent were closed within policy time frames. FDIC received 8,010 consumer complaints and closed 99 percent of them. Of the complaints closed, 94 percent were closed within policy time frames. FDIC received 8,742 consumer complaints, closing 95 percent of them. Of the closed complaints, 95 percent were closed within policy time frames. FDIC received 8,851 consumer complaints, closing 96 percent of them. Of the closed complaints, 97 percent were closed within policy time frames.
Asset Management
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Value, manage and market assets of the failed institutions and their subsidiaries in a timely manner to maximize net return. For all 11 institutions that failed, at least 87 percent of all marketable assets were marketed within the 90-day time frame, thus exceeding the target of 85 percent. For all three institutions that failed, at least 98 percent of all marketable assets were marketed within the 90-day time frame, thus exceeding the target of 85 percent. Five financial institutions reached their 90-day threshold during 2004. One hundred percent of all marketable assets were marketed within the 90-day time frame. No financial institutions reached their 90-day threshold during 2005.
Least-Cost Resolution
Annual Goal 2002 Results 2003 Results 2004 Results 2005 Results
Market failing institutions to all known qualified and interested potential bidders. There were 11 failures in 2002. One hundred percent of the qualified potential bidders were contacted. There were three failures in 2003. One hundred percent of the qualified bidders were contacted. There were four failures in 2004. One hundred percent of the qualified bidders were contacted for the sale of three failed institutions. One failed institution was not offered for sale. There were no failures in 2005.
Conduct investigations into all potential professional liability claim areas in all failed insured depository institutions and decide as promptly as possible to close or pursue each claim considering the size and complexity of the institution. (Revised -2005) Two of six institutions that reached the 18-month milestone during 2002 had 100 percent of professional liability investigations completed. The other four institutions had at least 80 percent of professional liability investigations completed, meeting the goal of 80 percent. Four of ten institutions that reached the 18-month milestone during 2003 had 100 percent of professional liability investigations completed. The other six institutions had at least 80 percent of professional liability investigations completed, meeting the goal of 80 percent. All five institutions that reached the 18-month milestone during 2004 had 100 percent of professional liability investigations completed, meeting the goal of 80 percent. All four institutions that reached the 18-month milestone during 2005 had 100 percent of professional liability investigations completed, meeting the goal of 80 percent.
Manage the receivership estate and its subsidiaries toward an orderly termination. For the eight failures from 1999 that matured in 2002, the FDIC terminated six receiverships, meeting the target to terminate 75 percent within three years of failure. For the seven failures that occurred during 2000 that matured in 2003, the FDIC terminated four receiverships, below the target to terminate 75 percent within three years of failure. For the four failures that occurred during 2001 that matured in 2004, the FDIC terminated three receiverships, meeting the target to terminate 75 percent within three years of failure. For the eleven failures that occurred during 2002 that matured in 2005, the FDIC terminated four receiverships. This did not meet the target to terminate 75 percent within three years of failure date due to various impediments to terminations.



Last Updated 04/10/2006 communications@fdic.gov