FDIC Federal Register Citations

[Federal Register: May 18, 1999 (Volume 64, Number 95)]

[Notices]

[Page 26962-26966]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr18my99-68]

=======================================================================

-----------------------------------------------------------------------

FEDERAL DEPOSIT INSURANCE CORPORATION

Differences in Capital and Accounting Standards Among the Federal

Banking and Thrift Agencies; Report to Congressional Committees

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Report to the Committee on Banking and Financial Services of

the U.S. House of Representatives and to the Committee on Banking,

Housing, and Urban Affairs of the United States Senate Regarding

Differences in Capital and Accounting Standards Among the Federal

Banking and Thrift Agencies.

-----------------------------------------------------------------------

SUMMARY: This report has been prepared by the FDIC pursuant to section

37(c) of the Federal Deposit Insurance Act (12 U.S.C. 1831n(c)).

Section 37(c) requires each federal banking agency to report to the

Committee on Banking and Financial Services of the House of

Representatives and to the Committee on Banking, Housing, and Urban

Affairs of the Senate any differences between any accounting or capital

standard used by such agency and any accounting or capital standard

used by any other such agency. The report must also contain an

explanation of the reasons for any discrepancy in such accounting and

capital standards and must be published in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Robert F. Storch, Chief, Accounting

Section, Division of Supervision, Federal Deposit Insurance

Corporation, 550 17th Street, NW, Washington, D.C. 20429, telephone

(202) 898-8906.

SUPPLEMENTARY INFORMATION: The text of the report follows:

Report to the Committee on Banking and Financial Services of the

U.S. House of Representatives and to the Committee on Banking,

Housing, and Urban Affairs of the United States Senate Regarding

Differences in Capital and Accounting Standards Among the Federal

Banking and Thrift Agencies

A. Introduction

The Federal Deposit Insurance Corporation (FDIC) has prepared this

report pursuant to section 37(c) of the Federal Deposit Insurance Act.

Section 37(c) requires the agency to submit a report to specified

Congressional Committees describing any differences in regulatory

capital and accounting standards among the federal banking and thrift

agencies, including an explanation of the reasons for these

differences. Section 37(c) also requires the FDIC to publish this

report in the Federal Register. This report covers differences existing

during 1998 and developments affecting these differences.

The FDIC, the Board of Governors of the Federal Reserve System

(FRB), and the Office of the Comptroller of the Currency (OCC)

(hereafter, the banking agencies) have substantially similar leverage

and risk-based capital standards. While the Office of Thrift

Supervision (OTS) employs a regulatory capital framework that also

includes leverage and risk-based capital requirements, it differs in

some respects from that of the banking agencies. Nevertheless, the

agencies view the leverage and risk-based capital requirements as

minimum standards and most institutions are expected to operate with

capital levels well above the minimums, particularly those institutions

that are expanding or experiencing unusual or high levels of risk.

The banking agencies, under the auspices of the Federal Financial

Institutions Examination Council (FFIEC), have developed uniform

Reports of Condition and Income (Call Reports) for all insured

commercial banks and FDIC-supervised savings banks. The OTS requires

each savings association to file the Thrift Financial Report (TFR). The

reporting standards

[[Page 26963]]

for recognition and measurement in both the Call Report and the TFR are

consistent with generally accepted accounting principles (GAAP). Thus,

there are no significant differences in reporting standards among the

agencies. However, two minor differences remain between the standards

of the banking agencies and those of the OTS.

Section 303 of the Riegle Community Development and Regulatory

Improvement Act of 1994 (12 U.S.C. 4803) requires the banking agencies

and the OTS to conduct a systematic review of their regulations and

written policies in order to improve efficiency, reduce unnecessary

costs, and eliminate inconsistencies. It also directs the four agencies

to work jointly to make uniform all regulations and guidelines

implementing common statutory or supervisory policies. The results of

these efforts must be ``consistent with the principles of safety and

soundness, statutory law and policy, and the public interest.'' The

four agencies' ongoing efforts to eliminate existing differences among

their regulatory capital standards as part of the Section 303 review

are discussed in the following section.

B. Differences in Capital Standards Among the Federal Banking and

Thrift Agencies

B.1. Minimum Leverage Capital

The banking agencies have established leverage capital standards

based upon the definition of Tier 1 (or core) capital contained in

their risk-based capital standards. These standards require the most

highly-rated banks (i.e., those with a composite rating of ``1'' under

the Uniform Financial Institutions Rating System (UFIRS)) to maintain a

minimum leverage capital ratio of at least 3 percent if they are not

anticipating or experiencing any significant growth and meet certain

other conditions. All other banks must maintain a minimum leverage

capital ratio that is at least 100 to 200 basis points above this

minimum (i.e., an absolute minimum leverage ratio of not less than 4

percent).

The OTS has a 3 percent core capital and a 1.5 percent tangible

capital leverage requirement for savings associations. However, the

OTS' Prompt Corrective Action rule requires a savings association to

have a 4 percent leverage capital ratio (or a 3 percent leverage

capital ratio if it is rated a composite ``1'' under the UFIRS) in

order for the association to be considered ``adequately capitalized.''

Consequently, the 4 percent leverage capital ratio is, in effect, the

controlling leverage capital standard for savings associations other

than those rated a composite ``1.''

As a result of the agencies' section 303 review of their regulatory

capital standards, the agencies issued a proposal for public comment on

October 27, 1997, which, among other provisions, would establish a

uniform leverage requirement. As proposed, institutions rated a

composite 1 under the Uniform Financial Institutions Rating System

would be subject to a minimum 3 percent leverage ratio and all other

institutions would be subject to a minimum 4 percent leverage ratio.

This change would simplify and streamline the agencies' leverage rules

and make them uniform. On December 18, 1998, the FDIC Board of

Directors approved a final rule adopting the uniform leverage

requirement as proposed. After all four of the agencies approved this

final rule, it was published on March 2, 1999 (64 Federal Register

10194), and took effect on April 1, 1999.

B.2. Interest Rate Risk

Section 305 of the FDIC Improvement Act of 1991 mandates that the

agencies' risk-based capital standards take adequate account of

interest rate risk. In August 1995, each of the banking agencies

amended its capital standards to specifically include an assessment of

a bank's interest rate risk, as measured by its exposure to declines in

the economic value of its capital due to changes in interest rates, in

the evaluation of bank capital adequacy. In June 1996, the banking

agencies issued a Joint Agency Policy Statement on Interest Rate Risk

that provides guidance on sound practices for managing interest rate

risk. This policy statement does not establish a standardized measure

of interest rate risk nor does it create an explicit capital charge for

interest rate risk. Instead, the policy statement identifies the

standards that the banking agencies will use to evaluate the adequacy

and effectiveness of a bank's interest rate risk management.

In 1993, the OTS adopted a final rule that adds an interest rate

risk component to its risk-based capital standards. Under this rule,

savings associations with a greater than normal interest rate exposure

must take a deduction from the total capital available to meet their

risk-based capital requirement. The deduction is equal to one half of

the difference between the institution's actual measured exposure and

the normal level of exposure. The OTS has partially implemented this

rule by formalizing the review of interest rate risk; however, no

deductions from capital are being made. Thus, the regulatory capital

approach to interest rate risk adopted by the OTS differs from that of

the banking agencies.

B.3. Subsidiaries

The banking agencies generally consolidate all significant

majority-owned subsidiaries of the parent bank for regulatory capital

purposes. The purpose of this practice is to assure that capital

requirements are related to all of the risks to which the bank is

exposed. For subsidiaries that are not consolidated on a line-for-line

basis, their balance sheets may be consolidated on a pro-rata basis,

bank investments in such subsidiaries may be deducted entirely from

capital, or the investments may be risk-weighted at 100 percent,

depending upon the circumstances. These options for handling

subsidiaries for purposes of determining the capital adequacy of the

parent bank provide the banking agencies with the flexibility necessary

to ensure that institutions maintain capital levels that are

commensurate with the actual risks involved.

Under the OTS' capital guidelines, a statutorily mandated

distinction is drawn between subsidiaries engaged in activities that

are permissible for national banks and subsidiaries engaged in

``impermissible'' activities for national banks. For regulatory capital

purposes, subsidiaries of savings associations that engage only in

permissible activities are consolidated on a line-for-line basis, if

majority-owned, and on a pro rata basis, if ownership is between 5

percent and 50 percent. For subsidiaries that engage in impermissible

activities, investments in, and loans to, such subsidiaries are

deducted from assets and capital when determining the capital adequacy

of the parent.

B.4. Servicing Assets and Intangible Assets

On August 10, 1998, the four agencies jointly published a final

rule (63 FR 42667) revising the treatment of servicing assets for

regulatory capital purposes. As amended, the agencies' rules permit

servicing assets and purchased credit card relationships to count

toward capital requirements, subject to certain limits. The final rule

increased the aggregate regulatory capital limit on these two

categories of assets from 50 percent to 100 percent of Tier 1 capital.

In addition, for the first time, servicing assets on financial assets

other than mortgages were recognized (rather than deducted) for

regulatory capital purposes. However, these nonmortgage servicing

assets are

[[Page 26964]]

combined with purchased credit card relationships and this combined

amount is limited to no more than 25 percent of an institution's Tier 1

capital. Before applying these Tier 1 capital limits, mortgage

servicing assets, nonmortgage servicing assets, and purchased credit

card relationships are each first limited to the lesser of 90 percent

of their fair value or 100 percent of their book value (net of any

valuation allowances). Any servicing assets and purchased credit card

relationships that exceed the relevant limits, as well as all other

intangible assets such as goodwill and core deposit intangibles, are

deducted from capital and assets in calculating an institution's Tier 1

capital.

The OTS' capital rules governing servicing assets and intangible

assets contain two differences from the banking agencies' rules that,

with the passage of time, have become relatively insignificant. Under

its rules, the OTS has grandfathered, i.e., does not deduct from

regulatory capital, core deposit intangibles acquired before February

1994 up to 25 percent of Tier 1 capital and all purchased mortgage

servicing rights acquired before February 1990.

B.5. Capital Requirements for Recourse Arrangements

B.5.a. Senior-Subordinated Structures--Some asset securitization

structures involve the creation of senior and subordinated classes of

securities or other financial instruments. When a bank originates such

a transaction and retains a subordinated interest, the banking agencies

generally require that the bank maintain risk-based capital against its

subordinated interest plus all more senior interests unless the low-

level recourse rule applies.\1\ However, when a bank acquires a

subordinated interest in a pool of assets that it did not own, the

banking agencies assign the investment in the subordinated interest to

the 100 percent risk weight category.

---------------------------------------------------------------------------

\1\ When assets are sold with limited recourse, the banking and

thrift agencies' risk-based capital standards limit the amount of

capital that must be maintained against this exposure to the lesser

of the amount of the recourse retained (e.g., through the retention

of a subordinated interest) or the amount of risk-based capital that

would otherwise be required to be held against the assets that were

sold, i.e., the full effective risk-based capital charge. This is

known as the ``low-level recourse'' rule.

---------------------------------------------------------------------------

In general, unless the low-level recourse rule applies, the OTS

requires a thrift that holds the subordinated interest in a senior-

subordinated structure to maintain capital against the subordinated

interest plus all more senior interests regardless of whether the

subordinated interest has been retained or has been purchased.

On November 5, 1997, the banking and thrift agencies issued a

proposal that, among other provisions, generally would treat both

retained and purchased subordinated interests similarly for risk-based

capital purposes, i.e., banks and thrifts would be required to hold

capital against the subordinated interest plus all more senior

interests unless the low-level recourse rule applies. The proposal also

includes a multi-level approach to capital requirements for asset

securitizations. The multi-level approach would vary the risk-based

capital requirements for positions in securitizations, including

subordinated interests, according to their relative risk exposure. The

comment period for the proposal ended on February 3, 1998. The agencies

have evaluated the comments received and, based on guidance received

from the FFIEC, are working jointly to develop a revised proposal.

B.5.b. Recourse Servicing--The right to service loans and other

financial assets may be retained when the assets are sold. This right

also may be acquired from another entity. Regardless of whether

servicing rights are retained or acquired, recourse is present whenever

the servicer must absorb credit losses on the assets being serviced.

The banking agencies and the OTS require an institution to maintain

risk-based capital against the full amount of assets sold by the

institution if the institution, as servicer, must absorb credit losses

on those assets. Additionally, the OTS applies a capital charge to the

full amount of assets being serviced by a thrift that has purchased the

servicing from another party if the thrift is required to absorb credit

losses on the assets being serviced.

The agencies' November 1997 risk-based capital proposal would

require banking organizations that purchase loan servicing rights which

provide loss protection to the owners of the serviced loans to begin to

hold capital against those loans, thereby making the risk-based capital

treatment of these servicing rights uniform for banks and savings

associations. As mentioned above, after evaluating the comments

received on the proposal and receiving guidance from the FFIEC, the

agencies are developing a revised recourse proposal.

B.6. Collateralized Transactions

The FRB and the OCC assign a zero percent risk weight to claims

collateralized by cash on deposit in the institution or by securities

issued or guaranteed by the U.S. Government or the central governments

of countries that are members of the Organization of Economic

Cooperation and Development (OECD), provided a positive margin of

collateral protection is maintained daily.

The FDIC and the OTS assign a 20 percent risk weight to claims

collateralized by cash on deposit in the institution or by securities

issued or guaranteed by the U.S. Government or OECD central

governments.

As part of the Section 303 review of their capital standards, the

banking and thrift agencies issued a joint proposal in August 1996 that

would permit collateralized claims that meet criteria that are uniform

among all four agencies to be eligible for a zero percent risk weight.

In general, this proposal would allow institutions supervised by the

FDIC and the OTS to hold less capital for transactions collateralized

by cash or U.S. or OECD government securities. The proposal would

eliminate the differences among the agencies regarding the capital

treatment of collateralized transactions. The agencies are continuing

to work together to complete a uniform final rule for collateralized

transactions.

B.7. Presold Residential Construction Loans

The four agencies assign a 50 percent risk weight to qualifying

loans that a builder has obtained to finance the construction of one-

to-four family residential properties. These properties must be

presold, and the lending relationship must meet certain other criteria.

The OTS and the OCC rules indicate that the property must be presold

before the construction loan is made in order for the loan to qualify

for the 50 percent risk weight. The FDIC and FRB permit loans to

builders for residential construction to qualify for the 50 percent

risk weight once the property is presold, even if that event occurs

after the construction loan has been made. Until the property is

presold, the construction loan normally would be assigned to the 100

percent risk weight category.

As a result of their Section 303 review, the agencies' previously

mentioned October 27, 1997, regulatory capital proposal includes a

provision under which the OTS and the OCC would adopt the treatment of

presold residential construction loans followed by the FDIC and the

FRB. This would make the agencies' rules in this area uniform. On

December 18, 1998, the FDIC Board of Directors approved a final rule

that, as proposed, retains the existing FDIC-FRB treatment of presold

residential construction loans. After all four of the agencies approved

this final

[[Page 26965]]

rule, it was published on March 2, 1999, and took effect on April 1,

1999.

B.8. Junior Liens on One-to-Four Family Residential Properties

In some cases, a bank may make two loans on a single residential

property, one secured by a first lien, the other by a junior lien. When

there are no intervening liens, the FRB and the OTS view both loans as

a single extension of credit secured by a first lien and assign the

combined loan amount a 50 percent risk weight if the combined loans

satisfy prudent underwriting standards, including a prudent loan-to-

value ratio, and are performing adequately. If these conditions are not

met, e.g., if the combined loan amount exceeds a prudent loan-to-value

ratio, the combined loans are assigned to the 100 percent risk weight

category. The FDIC also combines the first and junior liens to

determine the appropriateness of the loan-to-value ratio, but it

applies the risk weights differently than the FRB and the OTS. If the

combined loans satisfy prudent underwriting standards and are

performing adequately, the FDIC risk weights the first lien at 50

percent and the junior lien at 100 percent; otherwise, both liens are

risk-weighted at 100 percent. This combining of first and junior liens

is intended to avoid possible circumvention of the capital requirement

and to capture the risks associated with the combined loans.

The OCC treats all first and junior liens separately. It assigns

the loan secured by the first lien, if it has been prudently

underwritten, to the 50 percent risk weight category; otherwise, it

assigns the loan to the 100 percent risk weight category. In all cases,

the OCC assigns the loan secured by the junior lien to the 100 percent

risk weight category.

As a result of the Section 303 review of their capital standards,

the agencies proposed on October 27, 1997, to extend the OCC's

treatment of junior liens on one-to-four family residential properties

to all four agencies and thereby eliminate this difference among the

agencies. However, after considering the comments received on the

proposal, the agencies concluded that it would be more appropriate to

adopt the treatment of junior liens followed by the FRB and the OTS. On

December 18, 1998, the FDIC Board of Directors approved a final rule

that takes this FRB-OTS approach. After all four of the agencies

approved this final rule, it was published on March 2, 1999, and took

effect on April 1, 1999.

B.9. Mutual Funds

The banking agencies assign the entire amount of a bank's holdings

in a mutual fund to the risk category appropriate to the highest risk

asset that a particular mutual fund is permitted to hold under its

operating rules. Thus, the banking agencies take into account the

maximum degree of risk to which a bank may be exposed when investing in

a mutual fund because the composition and risk characteristics of the

fund's future holdings cannot be known in advance. In no case, however,

may a risk-weight of less than 20 percent be assigned to an investment

in a mutual fund.

The OTS applies a capital charge appropriate to the riskiest asset

that a mutual fund is actually holding at a particular time, but not

less than 20 percent. In addition, both the OTS and the OCC guidelines

also permit, on a case-by-case basis, investments in mutual funds to be

allocated on a pro rata basis. However, the OTS and the OCC apply the

pro rata allocation differently. While the OTS applies the allocation

based on the actual holdings of the mutual fund, the OCC applies it

based on the highest amount of holdings the fund is permitted to hold

as set forth in its prospectus.

As part of the agencies' Section 303 review of their regulatory

capital standards, one provision of their October 27, 1997, proposal

would apply the banking agencies' treatment of mutual funds to all

institutions. However, the proposal also would permit institutions, at

their option, to adopt the OCC's pro rata allocation alternative for

risk weighting investments in mutual funds. This proposal would make

the agencies' risk-based capital rules in this area uniform, thereby

eliminating this capital difference. On December 18, 1998, the FDIC

Board of Directors approved a final rule that adopts the mutual fund

treatment that had been proposed. After all four of the agencies

approved this final rule, it was published on March 2, 1999, and took

effect on April 1, 1999.

B.10. Noncumulative Perpetual Preferred Stock

Under the banking and thrift agencies' capital standards,

noncumulative perpetual preferred stock is a component of Tier 1

capital. The FDIC's capital standards define noncumulative perpetual

preferred stock as perpetual preferred stock where the issuer has the

option to waive the payment of dividends and where the dividends so

waived do not accumulate to future periods and do not represent a

contingent claim on the issuer. Under the FRB's capital standards,

perpetual preferred stock is noncumulative if the issuer has the

ability and legal right to defer or eliminate preferred dividends. For

these two agencies, for a perpetual preferred stock issue to be

considered noncumulative, the issue may not permit the accruing or

payment of unpaid dividends in any form, including the form of

dividends payable in common stock. Thus, if the issuer of perpetual

preferred stock is required to pay dividends in a form other than cash

when cash dividends are not or cannot be paid, the issuer does not have

the option to waive or eliminate dividends and the stock would not

qualify as noncumulative. The OCC's capital standards do not explicitly

define noncumulative perpetual preferred stock, but the OCC normally

has not considered perpetual preferred stock issues with this type of

dividend requirement to be noncumulative.

The OTS defines as noncumulative those issues of perpetual

preferred stock where the unpaid dividends are not carried over to

subsequent dividend periods. This definition does not address the

issuer's ability to waive dividends. As a result, the OTS has permitted

perpetual preferred stock issues that require the payment of dividends

in the form of stock in the issuer when cash dividends are not paid to

qualify as noncumulative.

B.11. Limitation on Subordinated Debt and Limited-Life Preferred Stock

Consistent with the Basle Accord, the internationally agreed-upon

risk-based capital framework which the banking agencies' risk-based

capital standards implement, the banking agencies limit the amount of

subordinated debt and intermediate-term preferred stock that may be

treated as part of Tier 2 capital to an amount not to exceed 50 percent

of Tier 1 capital. In addition, all maturing capital instruments must

be discounted by 20 percent in each of the last five years before

maturity. The banking agencies adopted this approach in order to

emphasize equity versus debt in the assessment of capital adequacy.

The OTS has no limitation on the ratio of maturing capital

instruments as part of Tier 2 capital. Furthermore, for all maturing

instruments issued after November 7, 1989, thrifts have the option of

using either (a) the discounting approach used by the banking

regulators, or (b) an approach which allows for the full inclusion of

all such instruments provided that the amount maturing in any one year

does not exceed 20 percent of the thrift's total capital. As for

maturing capital

[[Page 26966]]

instruments issued on or before November 7, 1989, the OTS has

grandfathered them with respect to the discounting requirement.

B.12. Privately-Issued Mortgage-Backed Securities

The banking agencies, in general, place privately-issued mortgage-

backed securities in either the 50 percent or 100 percent risk-weight

category, depending upon the appropriate risk category of the

underlying assets. However, privately-issued mortgage-backed

securities, if collateralized by government agency or government-

sponsored agency securities, are generally assigned to the 20 percent

risk weight category.

The OTS assigns privately-issued high-quality mortgage-related

securities to the 20 percent risk weight category. In general, these

are privately-issued mortgage-backed securities that are rated in one

of the two highest rating categories, e.g., AA or better, by at least

one nationally recognized statistical rating organization.

B.13. Nonresidential Construction and Land Loans

The banking agencies assign loans for nonresidential real estate

development and construction purposes to the 100 percent risk weight

category. The OTS generally assigns these loans to the same 100 percent

risk category. However, if the amount of the loan exceeds 80 percent of

the fair value of the property, the OTS deducts the excess portion from

assets and total capital.

B.14. ``Covered Assets''

The banking agencies generally place assets subject to guarantee

arrangements by the FDIC or the former Federal Savings and Loan

Insurance Corporation in the 20 percent risk weight category. The OTS

places these ``covered assets'' in the zero percent risk-weight

category.

B.15. Pledged Deposits and Nonwithdrawable Accounts

The OTS' capital standards permit savings associations to include

pledged deposits and nonwithdrawable accounts that meet OTS' criteria,

Income Capital Certificates, and Mutual Capital Certificates in

regulatory capital.

Instruments such as pledged deposits, nonwithdrawable accounts,

Income Capital Certificates, and Mutual Capital Certificates do not

exist in the banking industry and are not addressed in the banking

agencies' capital standards.

B.16. Agricultural Loan Loss Amortization

In the computation of regulatory capital, those banks that were

accepted into the agricultural loan loss amortization program pursuant

to Title VIII of the Competitive Equality Banking Act of 1987 were

permitted to defer and amortize certain losses related to agricultural

lending that were incurred on or before December 31, 1991. These losses

had to be amortized over seven years. The unamortized portion of these

losses was included as an element of Tier 2 capital under the banking

agencies' risk-based capital standards.

Thrifts were not eligible to participate in the agricultural loan

loss amortization program established by this statute.

Because the banking agencies' agricultural loan loss amortization

program ended on December 31, 1998, this difference has now been

eliminated.

C. Differences in Accounting Standards Among the Federal Banking and

Thrift Agencies

C.1. Push Down Accounting

Push down accounting is the establishment of a new accounting basis

for a depository institution in its separate financial statements as a

result of a substantive change in control. Under push down accounting,

when a depository institution is acquired in a purchase (but not in a

pooling of interests), yet retains its separate corporate existence,

the assets and liabilities of the acquired institution are restated to

their fair values as of the acquisition date. These values, including

any goodwill, are reflected in the separate financial statements of the

acquired institution as well as in any consolidated financial

statements of the institution's parent.

The banking agencies require push down accounting when there is at

least a 95 percent change in ownership. This approach is generally

consistent with accounting interpretations issued by the staff of the

Securities and Exchange Commission.

The OTS requires push down accounting when there is at least a 90

percent change in ownership.

C.2. Negative Goodwill

Under Accounting Principles Board Opinion No. 16, ``Business

Combinations,'' negative goodwill arises when the fair value of the net

assets acquired in a purchase business combination exceeds the cost of

the acquisition and a portion of this excess remains after the values

otherwise assignable to the acquired noncurrent assets have been

reduced to zero.

The banking agencies require negative goodwill to be reported as a

liability on the balance sheet and do not permit it to be netted

against goodwill that is included as an asset. This ensures that all

goodwill assets are deducted in regulatory capital calculations

consistent with the Basle Accord.

The OTS permits negative goodwill to offset goodwill assets on the

balance sheet.

Dated at Washington, DC, this 12th day of May, 1999.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

[FR Doc. 99-12421 Filed 5-17-99; 8:45 am]

BILLING CODE 6714-01-P