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Financial Institution Letters

Deposit Insurance Assessment Rate Schedules and Financing Corporation (FICO) Assessments

June 6, 1997


SUBJECT: Assessment Rates for the Second Semiannual Assessment Period of 1997

On May 6, 1997, the FDIC Board of Directors voted to retain the existing Bank Insurance Fund (BIF) and Savings Association Insurance Fund (SAIF) assessment schedules of 0 to 27 basis points (annual rates) for the second semiannual period of 1997. On May 20, 1997, the Board voted to collect on behalf of the FICO assessments sufficient to meet the funding requirements of the FICO for the remainder of 1997. The FICO rate on BIF-assessable deposits will be 1.26 basis points, on an annual basis, and the rate on SAIF-assessable deposits will be 6.30 basis points.

Deposit Insurance Assessment Rates

The assessment rate schedule for the second semiannual period of 1997 for BIF-insured and SAIF-insured institutions follows:

---------------------------------Supervisory Subgroups-------------------------------

Capital Group A B C
1. Well 0 bp 3 bp 17 bp
2. Adequate 3 bp 10 bp 24 bp
3. Under 10 bp 24 bp 27 bp

Approximately 95 percent of all BIF-insured institutions are expected to be listed in the lowest risk category and to continue to pay no assessments. The average annual BIF assessment rate is projected to be approximately one-tenth of a cent per $100 of assessable deposits (0.09 basis points). The BIF reserve ratio (fund balance to insured deposits) was 1.34 percent as of December 31, 1996.

Nearly 90 percent of SAIF-insured institutions are expected to pay no assessments. The average annual SAIF assessment rate is projected to be approximately one-half cent per $100 of SAIF-assessable deposits (0.44 basis points). The SAIF reserve ratio stood at 1.30 percent of as December 31, 1996.

FICO Assessment Rates

The Deposit Insurance Funds Act of 1996 (Funds Act) authorized the FICO to levy assessments on BIF- and SAIF-assessable deposits, and stipulated that the BIF rate must equal one-fifth the SAIF rate through year-end 1999, or until the insurance funds are merged, whichever occurs first. Thereafter, BIF and SAIF payers will be assessed pro rata for FICO. The BIF rate of 1.26 basis points and the SAIF rate of 6.30 basis points are based on deposit balances of March 31, 1997, taken from insured institutions' Call Reports and Thrift Financial Reports. Collection for the FICO will take place via direct debit on the collection date established for BIF and SAIF assessments, June 30, 1997.

The FICO assessment will continue to be adjusted quarterly to reflect changes in the assessment bases of the respective funds based on quarterly Call Report and Thrift Financial Report submissions. FICO rates will be adjusted for the September 30, 1997, assessment collection date based on June 30, 1997, deposit data.

Questions about the assessment rates should be directed to the FDIC's toll-free Assessment Hotline at 1-800-759-6596 (202-898-7090 in the Washington, D.C., area) between 8:30 a.m. and 4:30 p.m., Eastern Time.

Arthur J. Murton

Distribution: Insured Banks and Savings Associations

NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 ((703) 562-2200). For the web version of FDIC FILs, go to: News, Events & FOIA

Last Updated 07/16/1999

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