PREPARERS OF FFIEC REPORTS OF CONDITION AND INCOME
Proper Use of New Schedule RC-O Line Items 8(a)1, 8(a)2, and 8(b)
The FDIC believes there may be confusion regarding three new line
items on Schedule RC-O of the quarterly Call Report, namely Lines
8(a)1, 8(a)2, and 8(b). The new line items were added to Schedule
RC-O effective with the March 31, 1997, Call Report. These line items
are to be completed by so-called "Oakar" banks-that is, banks that pay
a portion of their quarterly deposit insurance assessment to both
Line items 8(a)1, 8(a)2, and 8(b) were added to help the FDIC
calculate an Oakar bank's adjusted attributable deposit amount (AADA).
The AADA serves as the base on which an Oakar bank's payment to the
other ("secondary") fund is computed.
An "Oakar" bank is a bank that belongs to one insurance fund,
generally the Bank Insurance Fund (BIF), and has acquired deposits
insured by the secondary insurance fund, generally the Savings
Association Insurance Fund (SAIF), by means of a so-called "Oakar
transaction." The most common Oakar transaction occurs when a BIF-
member bank acquires deposits from a SAIF-member thrift, either by
means of a whole-institution acquisition (merger/combination/consolidation)
or through a branch acquisition.
Other examples of Oakar transactions include:
a BIF member bank acquiring deposits from a bank-chartered
institution that is a SAIF member--a "Sasser" bank;
a Sasser bank acquiring deposits from a BIF-member bank; or
a Sasser bank acquiring deposits from a thrift-chartered
institution that is a BIF member (a "BIF HOLA" thrift).
Acquisition of an Oakar Institution
In another common Oakar transaction, a BIF-member bank can become an
Oakar bank by simply acquiring another BIF-member Oakar bank or a BIF
HOLA Oakar thrift. (In addition, a Sasser bank can become a Sasser
Oakar bank by acquiring another Sasser Oakar bank or a SAIF-member
Oakar thrift.) In such cases, the acquired Oakar institution's AADA
becomes the AADA of the resultant bank.
Please Note: If an Oakar bank acquires an Oakar institution that is a
member of the other insurance fund (for example, a BIF-member bank
acquiring a SAIF Oakar thrift or a Sasser Oakar bank), the bank should
contact the FDIC to request a special AADA worksheet. The worksheet
will assist the reporting bank in determining the correct amount to
include in Line Item 8(a)2 of Schedule RC-O.
The following instructions for each line item are intended to
supplement information found in the Call Report instructions and to
clarify the reporting requirements for each item.
Schedule RC-O, Line Item 8(a)1
This line item is used to report all deposits acquired by the
reporting institution from any insured depository institution
(regardless of insurance fund membership) in the quarter ending with
the filing of the Call Report. For example, all deposits acquired
between July 1, 1997, and September 30, 1997, will be reported on this
line item of the September 30, 1997, Call Report.
The amount reported in this line item should be equal to the deposit
amount acquired on the date of the transaction, and should include all
deposits as defined by Section 3(l) of the Federal Deposit Insurance
Act (FDI Act), including escrows and interest accrued and unpaid.
The amount reported in this line item will always be greater than, or
equal to, the amount that is reported on Line Item 8(a)2.
Schedule RC-O, Line Item 8(a)2
This line item is used to report all deposits acquired during the
quarter by the reporting institution from any insured depository
institution that was insured by the insurance fund of which the
resultant bank is not a member, the secondary insurance fund. In
other words, this item is used to report "Oakar" deposits (AADA)
acquired in the quarter. This amount should also be included as part
of the amount reported in Line Item 8(a)1.
Please note: This line item is also to be used to report the AADA of
an Oakar institution that has been acquired by the reporting bank. If
the acquired Oakar institution is a member of the same insurance fund
as the resultant bank, the resultant bank (the "reporting" bank)
should include in this line item the AADA shown on Line 46 of the
acquired Oakar institution's last assessment invoice.
As mentioned previously, if the reporting bank has acquired an Oakar
institution that is a member of the other insurance fund, the bank
should contact the FDIC at the telephone number listed at the end of
this FIL to request a special AADA worksheet. The worksheet will
assist the reporting bank in determining the correct amount to include
in this line item.
Again, the amount that is reported in this line item should be equal
to the deposits that were acquired from the other insurance fund on
the date of the transaction. In addition, the amount reported in this
line item will always be less than, or equal to, the amount that is
reported on Line Item 8(a)1.
Schedule RC-O, Line Item 8(b)
This line item is used to report all deposits sold by the reporting
institution in the quarter. The amount that is reported on this line
item should be equal to the deposits that were sold on the date of the
In the third quarter of the year, Bank A (a BIF-member):
acquires four branches of Thrift Z (a SAIF-member). This
acquisition is an Oakar transaction. On the date of
transaction, the deposits acquired equal $143,500,000;
acquires Bank B (a BIF-member Oakar bank) through a merger.
On the date of transaction, the deposits acquired equal
$750,000,000. Bank B's AADA as of its last invoice (June 30)
was $350,000,000; and
sells a branch to Bank C (a BIF-member bank). On the date of
transaction, the deposits sold equal $50,000,000.
Bank A will complete its September 30 Call Report, Schedule RC-O, as
Line Item 8(a)1 . . . $893,500,000 ($143,500,000 + $750,000,000)
Line Item 8(a)2 . . . $493,500,000 ($143,500,000 + $350,000,000)
Line Item 8(b) . . . $50,000,000
The FDIC uses the information reported in these three line items when
calculating an Oakar bank's AADA each quarter for assessment purposes.
A "Quarterly Growth Adjustment Statement," showing the AADA
calculation, is prepared by the FDIC for every Oakar bank and is
included with the bank's quarterly assessment invoice.
If you have any questions regarding these line items, please contact
the FDIC's Assessment Management Section at (800) 477-9557. In the
Washington, D.C., area, please call (202) 416-7400.
Paul L. Sachtleben
Director and Chief Financial Officer
Distribution: All Insured Banks
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 (800) 276-6003 or
(703) 562-2200). Electronic versions are available at the FDIC web site: