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1982 Annual Report Federal Deposit Insurance Corporation □□□□□□□□□□a □ □ □ □ □ □ □ □ □ □□□anaaaaoa □ . □ □ J r.*. □ □ □ □ *-4 -• H □ a T i .........~ • TB b I- □ __ T i H ] Letter of Transmittal Federal Deposit Insurance Corporation W ashington, D.C. June 1,1983 SIRS: In accordance with the provisions of Section 17(a) of the Federal Deposit Insurance Act, the Federal Deposit Insurance C orporation is pleased to subm it its Annual Report fo r the calendar year 1982. William M. Isaac Chairm an The President of the Senate The Speaker of the House of Representatives iii Board of Directors T h e F D 1 C B o a rd o f D ire c to rs ( fro m left): D ir e c to r Irv in e H. S p r a g u e , C h a ir m a n W illia m M Isa a c , a n d C o m p tr o lle r o f th e C u r r e n c y C . T . C o n o v e r. Federal Deposit Insurance Corporation FDIC Officials Deputy to the Chairman (Administration) Jack E. Edgington Deputy to the Chairman (Public Affairs) Margaret L. Egginton Assistant to the Deputy to the Chairman (Administration) Deputy to the Director Edward T. Lutz John R. Curtis Special Assistant to the Director Kenneth Fulton Assistant to the Director (Comptroller of the Currency) Alan Herlands Special Assistant to the Director (Comptroller of the Currency) Director, Division of Bank Supervision Laura L. McAuliffe James L. Sexton General Counsel Thomas Brooks Director, Division of Liquidation James A. Davis Director, Division of Accounting and Corporate Services Robert V. Shumway Director, Division of Research and Strategic Planning Stanley C. Silverberg Executive Secretary Director, Office of Congressional Relations and Public Information Hoyle L. Robinson Graham T. Northup Special Assistant for Public Information Alan J. Whitney Director, Office of Corporate Audits Robert D. Hoffman Director, Office of Personnel Management Jack C. Pleasant Director, Office of Equal Employment Opportunity Joe S. Arnold vi Regions and Directors ATLANTA DALLAS MINNEAPOLIS Edwin B. Burr 233 Peachtree Street, N.E., Suite 2400 Atlanta, Georgia 30043 Roy E. Jackson 350 North St. Paul Street, Suite 2000 Dallas, Texas 75201 Billy C. Mullican 730 Second Avenue South, Suite 266 Minneapolis, Minnesota 55402 BOSTON KANSAS NEW YORK Anthony S. Scalzi 60 State Street, 17th Floor Boston, Massachusetts 02109 Joseph V. Prohaska 2345 Grand Avenue, Suite 1500 Kansas City, Missouri 64108 Bernard J. McKeon 345 Park Avenue, 21st Floor New York, New York 10154 MADISON OMAHA CHICAGO Paul G. Fritts 233 S. Wacker Drive, Suite 6116 Chicago, Illinois 60606 James E. Halvorson 1 South Pinckney Street, Room 813 Madison, Wisconsin 53703 Charles E. Thacker 1700 Farnam Street, Suite 1200 Omaha, Nebraska 68102 COLUMBUS MEMPHIS PHILADELPHIA Sandra A. Waldrop 1 Nationwide Plaza, Suite 2600 Columbus, Ohio 43215 A. David Meadows 1 Commerce Square, Suite 1800 Memphis, Tennessee 38103 Robert A. Dorbad 1900 Market Street, Suite 616 Philadelphia, Pennsylvania 19103 SAN FRANCISCO Charles E. Doster 25 Ecker Street, Suite 2300 San Francisco, California 94105 vii Table of Contents FDIC Board of Directors_____________________________ iii FDIC Organization Chart_____________________________ iv FDIC Officials_______________________________________ v FDIC Regions and Directors__________________________ vi Chairman’s Statem ent________________________________ viii Operations of the Corporation________________________ 2 Financial Statem ents_________________________________ 12 Legislation and Regulations___________________________ 26 Legislation - 1982___________________________________ 26 Regulations - 1982 __________________________________27 Statistics of Closed Banks and Deposit Insurance________ 30 Banks Closed Because of Financial Difficulties, FDIC Income, Disbursements, and Losses Index________________________________________________ 43 viii Chairman’s Statement The past year, 1982, was a signal year for the FDIC in many ways, and it may one day be viewed as a year whose events gave impetus to important changes in banking, bank regulation and deposit insurance. Forty-two banks failed, creating greater challenges for the deposit insurance system than in any year since the Depression. Those failures included the largest deposit payoff in FDIC history, the first financially assisted mergers of mutual savings banks into commercial banks, and the granting of financial assistance to facilitate “open bank” mergers. The stability and soundness of the banking system were maintained by the administration of a strong insurance fund and the orderly protection of depositors in each insolvency. Public confidence in the safety of bank deposits continued at a high level. Another internal change calls for upgraded training for examiners to include teaching the new techniques and analytical skills that will be required to keep pace with banking in a deregulated environment. The Liquidation Division has in the past primarily utilized on-the-job training, but it is now implementing a more structured program. Building on organizational changes begun in 1981, we have established a regional office system in the Division of Liquidation similar to the system in the Division of Bank Supervision. This structure will strengthen our management controls and lower our costs. We are also engaged in a farreaching effort to employ the latest technologies to permit the most efficient and effective use of our personnel. We have created an internal task force to study our word processing, data processing and telecommunications systems and develop a five-year plan for Despite the large expenses associated with so many failures, the deposit insurance fund grew to a new year-end high of $13.8 billion. In addition, the Corporation was able to hold its administrative expenses to an increase of only 2.2 percent over 1981, a rate of increase well below both the rate of inflation and the increased cost of the federal government as a whole. In internal programs, the FDIC is improving several areas of its operations. We have instituted a team approach to management and have implemented a formal planning process. Our management approach is designed to foster more open communications and to focus attention on long-range objectives. F D I C C h a irm a n W illia m M . Isaac upgrading them. Outside experts are assisting in this project. The Corporation is moving on a number of external fronts to help the banks it supervises cope with deregulation, volatile interest rates and increased competitive pressures. Regulatory reform and simplification is of great concern, and we have been reviewing every regulation under which we operate to determine whether any can be eliminated or simplified. This has resulted in the elimination of several regulations and the simplification of others. Another part of this reform effort involves our applications procedures. We have substantially shortened all of our application forms, and encouraged the states to join us in adopting common forms. In addition, we have delegated to our regional offices substantial additional authority to approve various applications. In the examination area, we are faced with two challenges. In a ix deregulated, rapidly changing environment, the traditional on site examination once every 18 months is no longer sufficient. Moreover, our personnel resources are focused disproportionately on the smaller banks where our exposure is limited. We are addressing these problems in several ways. The divided examination program has permitted us to space out our examinations of smaller, non problem banks. New Call Report information will permit us to improve our off-site monitoring. Directed-scope examinations will be used more extensively. We believe these measures will result in more effective supervision, save millions of dollars annually, and reduce the overall burden on the banks we regulate. In the second half of 1982, the logjam was finally broken on deregulation of deposit interest rate ceilings. By the end of 1983, the ceilings are expected to be gone. We are enthusiastic about deregulation of the banking industry. We believe it has the potential to bring enormous benefits to the American public through more and better financial services at competitive prices, while strengthening the banking system. The problem is that deregulation of banks and thrifts on the liability side is outpacing deregulation of their investment and service powers. We have urged Congress to remedy this inequitable and dangerous situation by overriding unreasonable state usury laws and broadening the powers of banks and thrifts to engage in financial activities such as securities, insurance, real estate, travel agency and data processing services. Moreover, major reforms in our systems of regulation and deposit insurance are urgently needed. The FDIC’s report to Congress entitled “ Deposit Insurance in a Changing Environment” proposes a number of measures to promote marketplace discipline and reform a regulatory system that is increasingly inefficient, inequitable and ineffective. For discipline to exist, there must be risk of loss. Although insurance coverage is limited to $100,000, in practice we have for years been providing implicit 100 percent protection for depositors and other creditors at most banks, particularly the larger ones. This resulted from our preference for handling bank failures through mergers. This approach is usually less expensive and less disruptive than paying the claims of insured depositors; however, the side effect has been to erode marketplace discipline and provide larger banks a substantial competitive advantage. Discipline can be restored by exposing the largest creditors to some risk of loss. One way this could be done would be to provide 100 percent coverage for the first $100,000 in deposits and a smaller percentage — perhaps 75 percent — for all deposits over $100,000. This revised coverage would apply whether we paid off depositors or arranged a merger. Customers would have a strong incentive to select the soundest institutions, not just the largest ones or the ones paying the highest interest rates. The FDIC report also recommends that the regulatory functions of the FDIC, the Federal Home Loan Bank Board, the Federal Reserve Board, and the Comptroller of the Currency be consolidated into an independent agency headed by a board. That agency would license and regulate all federally chartered banks and S&Ls and their holding companies. State-chartered institutions would be licensed and regulated by their respective state authorities, preserving our dual banking system. The FDIC’s insurance function and the Federal Savings and Loan Insurance Corporation would be merged into a single independent agency with insurance responsibilities for all state and federally chartered banks and S&Ls. It would have the right to examine, require reports from and take enforcement actions against any insured institution or its affiliates, although it would focus its attention on problem and near problem institutions. Finally, securities regulation with respect to banks, S&Ls and holding companies would reside exclusively in the Securities and Exchange Commission. Antitrust enforcement would reside solely in the Justice Department, and consumer compliance matters would be the exclusive province of the Federal Trade Commission. Reorganization along functional lines would bring reason and coherent form to our regulatory structure, and would enable it to effectively monitor and promote a strong, profitable and responsive financial system under private ownership and control. The decisions we make on these subjects over the months and years ahead are likely to have profound effects on the financial system for decades to come. William M. Isaac Chairman Operations of the Corporation i 2 1982— A Watershed Year for FDIC The year 1982 brought the Federal Deposit Insurance Corporation to the forefront of the American public’s attention. Not since the Depression has the FDIC played such a discernible role in the business life of the nation. In general, the Corporation had been little known and its operations little understood by most Americans. However, the FDIC’s handling of 42 insured bank failures during the year, and its involvement in major issues surrounding the banking industry have made the Corporation a more evident influence on the nation’s economic health. The FDIC, insured banks and other financial institutions operated in a highly unpredictable economy during 1982. Because of excessive growth in the money supply, the Federal Reserve maintained tight monetary policies, and interest rates remained high until late summer when the Fed began to relax its grip. Over the course of the year, the prime interest rate dropped from 15.75 percent to 11 percent. Moreover, the discount rate, which more directly affects consumer interest rates, was 12 percent in January of 1982 and then slid to 8.5 percent by year-end. In the midst of this volatility, 42 FDIC-insured banks failed, topping all previous years since 1940 when 43 failures occurred. To place last year’s 42 failures in perspective, the largest number of insured bank failures in any recent year was 16 in 1976, and the number of failed banks was 10 per year from 1979 through 1981. Compared to past years, 1982 was an extremely busy year for the Corporation. Bank failures and mutual savings bank problems required considerable time and energy to resolve. Around-the-clock and weekend work sessions were commonplace, but the problems associated with 42 bank failures were contained. The deposit insurance system functioned according to design, providing stability and maintaining public confidence in the nation’s banks as they struggled through a period of economic upheaval and intense competitive pressures. Income and Expenses Despite the expense to the Corporation resulting from the high bank failure rate, revenues and the deposit insurance fund continued to increase. Gross revenues for 1982 amounted to $2.5 billion, an increase of $400 million over 1981. Of total revenues, $1.4 billion represented income derived from investments in U.S. Treasury obligations and $1.1 billion came from assessments on insured banks, interest on notes receivable and other sources. The deposit insurance fund grew during 1982 DEPO SITS A N D LOSSES IN ALL IN SU R ED BANKS REQUIRING DISBURSEM ENTS BY FDIC, 1934-1982 Total Deposits ‘ Includes collection s and disbursem ents by liquidators in the field ($1.5 billio n ) which were previously excluded from this chart. 3 to a new year-end high of $13.8 billion, an increase of $1.5 billion or 12.4 percent over 1981. The average maturity of the Corporation’s investment portfolio during 1982 was maintained at approximately two years and nine months. As of December 31, 1982, 43 percent of the portfolio had maturities of ur.der two years. The portfolio’s par value increased from $12.1 billion at the end of 1981 to $13.2 billion at year-end 1982. The portfolio’s market value during the same period expanded from $10.9 billion to $13.3 billion. Gross expenses and losses for 1982 amounted to $1 billion. Of this amount, $870 million represented the total expenses and losses incurred by the FDIC in closed banks and merger activities. The FDIC’s administrative expenses in 1982 came to $130 million, an increase of only 2.2 percent over 1981. That rise compares favorably with an increase of 10.8 percent for overall federal outlays and an estimated increase of 3.9 percent in the Consumer Price Index during 1982. This was the fourth consecutive year in which the Corporation, using tight controls and a rigorous budgeting process, held its expenditure rate increase below both the rate of inflation and the increased cost of the federal government as a whole. Depending on the FDIC’s losses and expenses each year, banks generally receive a credit against their next year’s assessments for insurance coverage. The losses and expenses sustained by FDIC in 1982 resulted in an assessment credit of $96 million, compared to $117 million in 1981. The 1982 credit represents an effective assessment rate to banks of 1/13 of one percent of assessable deposits, compared to 1/14 of one percent in 1981. The 1982 assessment credit represents 8.68 percent of total assessments compared to 11.29 percent in 1981. (The FDIC’s complete 1982 financial statements with footnotes begin on page 12. The U.S. Comptroller General’s audit opinion of the FDIC’s financial statements is on page 23.) Payments to Depositors In the 620 banks that have failed since the FDIC’s inception, 99.8 percent of their depositors, both insured and uninsured, had received or were assured of payment of their deposits in full at the end of 1982, and 98.9 percent of the total deposits had been paid or made available for payment. Although recovery of uninsured portions of deposits varies from case to case, in the aggregate, 79.6 percent had been paid or made available by December 31, 1982. In contrast, 97.2 percent of uninsured deposits had been paid or made available to depositors by the end of 1981. The marked decrease in the recovery rate for uninsured deposits is due almost entirely to the failure of the Penn Square Bank in Oklahoma City in July 1982. The bank had an unusually high volume of deposits exceeding the insurance limit. T h e F D I C M u tu a l S a v in g s B a n k T e a m w o rk e d h u n d r e d s o f h o u r s d u r in g 1982 h a n d lin g th e a ssiste d m e rg e rs o f e ig h t fa ilin g m u tu a l s a v in g s b a n k s w ith h e a lth y in sti tu tio n s . T h e m e m b e rs a r e ( fro m left): W illia m R . W a ts o n , R o g e r A . H o o d ; D e n n is A . O ls o n ; D o u g la s H. J o n e s ; B a r b a ra I. G e rs te n ; R o b e r t P. G o u g h , T e a m L e a d e r; M a ry R . W a rh o l; L o u is E. W rig h t; K a th y A. J o h n s o n ; W illia m J . V ia, J r ., a n d W illia m H . R o elle. Because of the complexity of the receivership and the existence of numerous problems, no payment from the proceeds of liquidated assets could be made to Penn Square creditors, including uninsured depositors, in 1982. There were 6.5 million depositors in the 620 banks that were closed between January 1,1934, and December 31,1982, and deposits totalled nearly $20 billion. In meeting its responsibilities, the FDIC as insurer disbursed $8.6 billion and as liquidator recovered $6.7 billion, for a net loss to the Corporation of $1.9 billion since it began operations. Mutual Savings Bank Mergers A major claim on FDIC’s capabilities and resources in 1982 involved troubled mutual savings banks. The FDIC assisted the mergers of eight failing mutual savings banks with healthy financial institutions, two of which are commercial banks. The FDIC-assisted mergers of two thrift institutions into commercial banks in 1982 were the first such transactions arranged by the Corporation. One transaction involved the merger of Farmers and Mechanics Savings Bank (FS M), Minneapolis, Minnesota, into 4 Marquette National Bank of Minneapolis. As a result of the merger, Marquette National became the fourth largest commercial bank in Minnesota. The acquisition followed a competitive bidding process which included both in-state and out-of-state potential acquirers. The bidding process was facilitated by the passage of state legislation to allow the acquisition of F & M as a commercial bank by an out-ofstate bank holding company. The merger demonstrated clearly that interstate bidding enhances competition and results in lower cost to the FDIC. A deposit payoff would have cost the FDIC an estimated $250 million. Instead, the merger will result in a cost of about $95 million. The second thrift-commercial bank transaction merged Fidelity Mutual Savings Bank of Spokane, Washington, into First Interstate Bank of Washington, N.A., Seattle. Accomplishment of this merger also involved both in state and out-of-state bidders. The transaction resulted in an approximate cost of $47 million, compared to the estimated $165 million cost of a deposit payoff. The savings resulting from inclusion of out-of-state bidders is estimated at $20 million. The FDIC had two objectives in addressing the problems of the savings bank industry. The first was to resolve the problems at a reasonable cost to the insurance fund without raising public concern about a large bank failure. Second, the Corporation had to insure that any financial institution resulting from a merger with a failing savings bank would be financially sound, with the ability to compete effectively in its market, and would continue to serve the credit needs of its community free of excessive government control. The assisted mergers that the Corporation carried out during 1982 accomplished these objectives, and protected all depositors and other general creditors against any loss or inconvenience. The transactions also maintained public confidence in these banks and Insured Banks Closed During 1982 Requiring Disbursements By The Federal Deposit Insurance Corporation A m ount of deposits (in m illons of dollars) Date of deposit payout or assum ption Num ber of depositors or accounts 1. Western Savings Bank Buffalo, New York January 15, 1982 233,000 890.2 2. The First National Bank and Trust Com pany of Tuscola Tuscola, Illinois February 6, 1982 3,905 15.2 3. M etropolitan Bank and Trust Com pany Tampa, Florida February 12, 1982 28,000 171.7 4. Farmers and Mechanics Savings Bank of Minneapolis Minneapolis, Minnesota February 20, 1982 180,935 789.4 5. Bank o f Yorkville Yorkvilie, Tennessee February 20, 1982 1,808 6.6 6. The Bank of Woodson W oodson, Texas March 1, 1982 795 3.4 7. Fidelity Mutual Savings Bank Spokane, Washington March 11, 1982 139,300 550.5 8. United States Savings Bank of Newark, New Jersey Newark, New Jersey March 11, 1982 81,528 578.4 9. The New York Bank of Savings New York, New York Name and Location March 26, 1982 491,057 2,779.7 10. Western Saving Fund Society of Philadelphia Haverford, Pennsylvania April 2, 1982 420,000 1,956.8 11. The First National Bank in Humboldt Humboldt, Iowa April 2, 1982 11,031 48.7 12. Aquia Bank and Trust Company Stafford, Virginia April 3, 1982 4,769 12.7 13. National Security Bank Tyler, Texas April 16, 1982 5,354 9.0 14. Pacific Coast Bank San Diego, California April 29, 1982 3,097 10.1 15. Carroll County Bank Huntingdon, Tennessee April 30, 1982 2,314 8.1 16. Coles County National Bank of Charleston Charleston, Illinois May 1, 1982 6,910 18.6 17. Com m unity Bank of Washtenaw Ypsilanti, Michigan May 15, 1982 7,825 16.8 18. Banco Regional Bayamon, Puerto Rico June 12,1982 2,000 15.1 19. Citizens Bank Tillar, Arkansas June 23, 1982 1,164 6.3 20. Farmers State Bank of Lewistown Lewistown, Illinois June 25, 1982 6,600 27.3 21. The Belle Bland Bank Bland, Missouri July 2, 1982 1,835 3.9 5 strengthened the surviving institutions. The FDIC expended $1,013 billion in facilitating these mergers. This amount contrasts with the estimated $2.86 billion cost of deposit payoffs if all eight institutions had been allowed to fail. Under the FDIC’s insurance assessment system, about 60 percent of the Corporation’s cost, or about $607 million, will be recovered through reduced (Continued) Name and Location Date of deposit payout o r assumption Num ber of depositors or accounts Am ount of deposits (in m illons of dollars) 22. Penn Square Bank, National Association Oklahoma City, Oklahoma July 5, 1982 24,534 470.4 23. The Bowie County State Bank Hooks, Texas July 27, 1982 5,357 13.7 24. Guaranty Bond State Bank Redwater, Texas July 27, 1982 5,088 12.9 25. Unity Bank and Trust Company Boston, Massachusetts July 30, 1982 7,200 10.5 26. Mt. Pleasant Bank and Trust Company Mt. Pleasant, Iowa August 6, 1982 7,900 25.8 27. Abilene National Bank Abilene, Texas August 6, 1982 28,132 310.1 28. First Security Bank of North Arkansas Horseshoe Bend, Arkansas August 27, 1982 3,800 11.9 29. Security Bank and Trust Company Cairo, Illinois August 27, 1982 4,408 11.0 30. Western National Bank Santa Ana, California August 27, 1982 1,949 20.7 31. Hohenwald Bank and Trust Company Hohenwald, Tennessee September 3, 1982 4,468 26.9 32. United M utual Savings Bank New York, New York September 24, 1982 157,142 777.9 33. O klahom a National Bank and Trust Company O klahom a City, O klahom a O ctober 3, 1982 23,103 133.6 34. Tri-State Bank Markham, Illinois O ctober 8, 1982 5,831 16.0 35. M echanics Savings Bank Elmira, New York O ctober 15, 1982 20,778 50.6 36. Cedar B luff Bank Cedar Bluff, Alabama November 2, 1982 4,300 13.1 37. The First National Bank of South Charleston South Charleston, West Virginia November 5, 1982 10,016 26.9 38. Texas Bank of Am arillo Am arillo, Texas November 5, 1982 3,900 9.2 39. Bank of Quitm an Q uitm an, Arkansas November 12, 1982 6,126 16.8 40. Ranchlander National Bank Melvin, Texas November 19, 1982 499 3.6 41. The B allinger C ounty Bank Lutesville, Missouri December 10, 1982 4,400 14.5 42. The Security State Bank M ooreland, Oklahoma December 16, 1982 2.300 9.9 assessment credits that otherwise would have been refunded to insured banks. The result is a net cost to the insurance fund of $406 million. Commercial Bank Failures In addition to handling eight mutual savings bank failures, the FDIC handled 34 commercial bank failures in 1982 — ten national banks, 23 state banks and one commercial bank in Puerto Rico. FDIC resolved these cases by arranging 27 deposit assumptions and seven deposit payoffs. Some unusual situations arose involving several of the year’s commercial bank failures, prompting the FDIC to take unusual measures. For example, in two cases, the FDIC Board of Directors agreed to provide assistance to two distressed banks on an open bank basis. The Corporation granted financial assistance to facilitate the acquisition of Abilene National Bank of Abilene, Texas, by the Mercantile Texas Corporation, a Dallas-based bank holding company. The FDIC granted similar assistance to accomplish the acquisition of Oklahoma National Bank and Trust Company by the First National Bank and Trust of Oklahoma City. The cost to the FDIC of the financial assistance in both transactions was substantially lower than the estimated cost of either a deposit assumption or a deposit payoff. In addition, the FDIC avoided exposure to any contingent liabilities and the substantial administrative costs of a failed bank receivership. In another insolvency, the deposit liabilities of the Mt. Pleasant Bank and Trust Company, in Mount Pleasant, Iowa, were assumed on August 5, 6 1982, by Hawkeye Bank and Trust, a new state bank subsidi ary of Hawkeye Bancorporation, Des Moines, Iowa. The FDIC was named receiver. Subsequent to the acquisition, the FDIC determined that claims by repurchase agreement (repo) customers of Mt. Pleasant Bank and Trust could not take priority over claims by depositors or by other general creditors of the bank. Therefore, the claims of repo holders, along with other general creditors, will be entitled to payment from the receivership only on a pro rata basis. The FDIC’s determination regarding the status of Mt. Pleasant repo holders was based on the particular circumstances of that bank, and did not, therefore, reflect general FDIC policy on the status of repurchase agreements. However, the case attracted widespread attention and served to enhance consumer awareness of the uninsured nature of this type of investment. The most unusual insured bank failure of 1982 involved the Penn Square Bank, N.A., a one-office bank in a shopping mall on Oklahoma C ity’s north side. The bank was declared insolvent by the Comptroller of the Currency on July 5. The failure quickly attracted nationwide publicity because it was the largest deposit payoff in FDIC history and more than half the bank’s $465 million in deposits exceeded the insurance limit of $100,000 per depositor. The bank failed because it had made an inordinate number of high-risk energy-related loans that went into default. Compounding the seriousness of the situation was the fact that the bank had sold participations in many of the risky energy loans, amounting to $2.1 billion, to major upstream banks, which lost millions as a result of Penn Square’s unsafe loan practices. After the bank was closed, the FDIC established a Deposit Insurance National Bank (DINB) pursuant to Section 11 of the FDI Act to serve as a vehicle for paying depositors. The DINB assumed the insured deposits of Penn Square, and it opened for business in the offices of the failed bank the morning of July 6. Penn Square had 24,538 deposit accounts at the time of its failure totalling about $465 million. All the assets that FDIC acquired for liquidation totalled $511.3 million, plus $8.2 million in assets charged off by the bank prior to its closing. The FDIC determined that deposits in excess of the insurance limit would constitute claims against the Penn Square receivership, for which Receiver’s Certificates were issued, each in an amount equal to the uninsured portion of the deposit. These claims have general creditor status and will share in liquidating dividends with the FDIC and other general creditors from the collection of the bank’s assets. In addition to DINB operations, the FDIC is involved in numerous other activities resulting from the Penn Square failure. The Corporation, as both receiver and IN S U R E D B A N K F A IL U R E S , 1934— 1982 Number of banks 80---------------------- Deposit Assumption ! Deposit Payoff 60- 50- 40i 30- 20 7 10 T '34 ’38 ’42 '46 '50 '54 '58 '62 66 '70 '74 '78 '82 7 creditor of Penn Square, is involved in extensive litigation. FDIC personnel have conducted thorough examinations of Penn Square’s records preparatory to presenting substantial claims under Penn Square’s banker’s blanket bond, as well as claims against former officers and directors of the bank and the bank’s accounting firm. The FDIC also has discovered a number of matters that may constitute criminal offenses under federal law and has referred these matters to the Justice Department. Regulatory and Administrative Initiatives During 1982, the FDIC addressed a number of issues and events in banking, taking initiatives affecting its internal operations as well as bank activities. The FDIC issued proposed regulations to streamline the processing of applications for deposit insurance, branches and office relocations by substantially reducing the paperwork requirements and greatly accelerating the review process. The Board of Directors also proposed to delegate its approval authority in routine commercial bank mergers to the FDIC’s Division of Bank Supervision and to the agency’s regional directors. The delegation of authority is expected to save ten days or more in the approval process for such appliactions. This proposed delegation and the streamlined processing of routine applications by sound banks are both part of the FDIC’s continuing efforts to reduce the time and cost of processing applications and reduce the burden of regulation to the maximum extent practicable. In another internal matter, the Corporation approved a reorganization of its Division of C h a ir m a n Isa a c d isc u sse s p o lic y m a tte r s w ith J a c k E d g in g to n (left), D e p u ty to th e C h a irm a n ( A d m in is tr a tio n ), E d w a rd T . L u tz (sta n d in g ) . A s s ista n t t o th e D e p u ty to th e C h a irm a n , a n d M a rg a r e t L. E g g in to n , D e p u ty t o th e C h a ir m a n ( P u b lic A ffa irs). Liquidation that will establish Area Liquidation offices in five cities. The first office, located in New York City, opened in November. By June 1983, offices are expected to be operating in Atlanta, Chicago, Dallas and San Francisco. Each office will be headed by a director who will be assisted by several senior liquidation specialists. The reorganization is intended to improve efficiency and management of an expanding liquidation workload by moving supervision of bank liquidations to several centralized locations. The Division is accelerating the consolidation of a number of existing liquidation sites and reducing the length of time an office will be maintained at each failed bank site. The restructuring is expected to permit the FDIC to cope with a growing and fluctuating workload without increasing the number of field liquidator positions. In external matters, the FDIC took some important positions during 1982. The Corporation issued a policy statement on the applicability of the Glass-Steagall Act to securities activities of subsidiaries of insured nonmember banks. The heart of the policy statement asserted the FDIC Board of Directors’ opinion that the Banking Act of 1933 does not prohibit an insured nonmember bank from affiliating with, organizing or acquiring a bona fide subsidiary corporation that issues, underwrites or sells many kinds of securities. In issuing the statement, the FDIC reaffirmed its ongoing responsibility to ensure the safe and sound operation of insured nonmember banks, and indicated it would closely monitor the potential risks inherent in a bank subsidiary’s involvement in certain securities activities. Next, the FDIC, in joint action with the Federal Reserve Board and the Office of the Comptroller of the Currency, required that all insured commercial banks begin reporting data on past-due and other nonperforming loans by December 31, 1982. For national banks, the report replaced a pastdue loan schedule that has been submitted to the Comptroller’s office for a number of years. Similar information has been collected from registered bank holding companies under the securities laws. The new information will help the FDIC and its partner regulators upgrade off-site computerized monitoring systems and reduce the burden placed on banks in on-site examinations. In addition the information will benefit the 8 depositing public and other bank creditors and investors. Public disclosure of this type is consistent with the FDIC’s desire for greater marketplace discipline in conjunction with bank deregulation. Also in 1982, the Board issued, but later withdrew, a proposal to require banks to maintain their financial records on an accrual basis. Still in effect, however, is the requirement that, beginning with the March 31, 1983, Reports of Condition and Income, all banks that had assets of $10 million or more at the end of 1981 must report their financial position and results of operations on an accrual basis. Banks that had assets of less than $10 million at the end of 1981 will become subject to the revised reporting rule effective with the March 31, 1985, reports. Finally, the FDIC implemented the net worth certificate program authorized by the Garn-St Germain Depository Institutions Act of 1982, to provide financial aid to qualified mutual savings banks. In December the FDIC purchased $175 million in certificates from 15 savings banks. The Corporation supplemented the certificate program with a voluntary merger plan to facilitate additional C a lv in T . W e tk lo w , C o n tr o lle r o f C itiz e n s ' B a n k a n d T r u s t C o m p a n y in R iv e rd a le , M a ry l a n d , a n d D ia n e G e n tile , se cre t a r y in A c c o u n ts P a y a b le a t th e b a n k , u se a n F D I C c o m p u te r t e r m in a l in th e ir o ffice to ele c tro n ic a lly file re q u ir e d fin a n c ia l d a ta w ith th e C o r p o r a tio n . D u r in g 19 8 2 , th e F D I C e x p e ri m e n te d w ith s u c h te r m in a ls in s e v era l b a n k s to im p ro v e th e tim e lin e s s a n d a c c u r a c y o f C a ll R e p o r ts . T h e e x p e rim e n t is p a rt o f a lo n g -te rm p la n to u p g r a d e F D I C s d a ta p ro c e s s in g c a p a b ili tie s a n d o ff-site m o n ito rin g . mergers of seriously weakened mutual savings banks. The Corporation’s plan provides tangible financial assistance to encourage mergers involving savings banks where one of the participants is eligible for aid under the net worth certificate program. Merger assistance is in the form of interest-bearing notes, income maintenance payments, cash or any other acceptable form proposed. The Garn-St Germain Depository Institutions Act itself was farranging legislation that changed many aspects of banking and bank supervision. Greater powers were given to the FDIC, the Federal Savings and Loan Insurance Corporation and the National Credit Union Administration to assist troubled institutions. Federal thrift institutions were granted authority to accept demand accounts and make commercial loans. The Act preempted state due-on-sale prohibitions in certain circumstances, and made numerous other technical changes to existing banking laws and regulations. Other Operations During 1982, the FDIC continued to pursue bank examinations, litigation and other activities to accomplish its agency mission. In the examination area, the Corporation completed 17,886 bank examinations including 5,625 safety and soundness examinations, 5,761 consumer and civil rights compliance examinations and visitations, 1,232 examinations of trust departments, 1,247 examinations of data processing facilities, 1,261 investigations and 2,760 application reviews. These examinations were augmented by the Corporation’s Integrated Monitoring System (IMS), which tracks bank activities between examinations, giving FDIC a current picture of condition and any developing problems. The Corporation also prepares the new Uniform Bank Performance Report (UBPR) on an interagency basis with the Federal Reserve and the Comptroller of the Currency. This report shows quarterly bank information on both a current and trend basis, and also presents peer group data for each insured bank. Each insured bank gets a copy of its own UBPR, and copies of UBPRs for every insured bank are available to the public. The FDIC supervises as well as examines bank trust departments. At year-end 1982, the Corporation supervised 2,623 commercial bank trust departments and 25 trust departments in mutual savings banks. In total, these departments controlled more than $74 billion in trust account assets. The FDIC further approved fiduciary powers for 118 banks during the year. In addition to trust department supervision, the FDIC last year supervised 389 banks that are registered securities transfer agents. Under the Securities Exchange Act of 1934, a bank 9 must register with the Corporation as a transfer agent or registrar whenever it acts in this capacity for any corporation having $1 million in assets and 500 or more shareholders. During the year, the FDIC also supervised 340 banks that are registered with the Corporation under the Securities Exchange Act as having more than $1 million in assets and 500 or more shareholders of any class of equity security. The FDIC devotes considerable attention to various types of applications and requests from banks, including applications for: deposit insurance: consent to establish new branches or facilities or relocate existing offices, and permission to merge. In addition, persons who have been convicted of a criminal offense involving dishonesty or breach of trust must obtain FDIC’s consent before serving as a director, officer or employee in an insured bank. In another category of applications, those who are acquiring control of a bank must give the FDIC 60 days prior written notice and include personal and financial data, and the terms of the proposed acquisition. The following statistics reflect FDIC actions on applications it received during 1982. FD IC Applications 1982 1981 75 73 2 98 98 0 New Branches - total 1,174 approved 1,171 branch 610 lim ited branch 87 remote service fa cility 474 denied 3 1,324 1,321 704 151 466 3 Deposit Insurance - total approved denied Mergers - total approved denied Requests fo r consent to serve - total approved denied Notices of changes in control 110 108 2 75 74 1 48 48 0 56 54 2 182 200 F D I C E x a m in e r s ( fr o m left) R a y m o n d G o la ta , K e ith N o th ste in a n d D a v is S t a tt o n rev iew n o te s a n d c o m p ile th e ir r e p o rt a f te r e x a m in in g a b a n k ’s tru s t r e c o rd s . In the international banking area, the FDIC reviews applications of foreign banks for deposit insurance in their U.S. branches, examines these branches and supervises U.S. banks owned by foreign banks, bank holding companies or foreign individuals. The Corporation also must review applications by FDICsupervised U.S. banks to engage in foreign activities. During 1982, the Corporation received two applications for deposit insurance of domestic branches of foreign banks. As a part of its bank monitoring effort, the FDIC maintains a current list of banks under the Uniform Financial Institutions Rating System as having unsafe or unsound conditions and a relatively high possibility of failure. At year-end 1982, there were 369 banks on the so-called problem bank list. The FDIC imposes specific corrective measures on such banks and in most cases the banks’ problems are corrected over a period of time and the institutions are removed from the list. In the legal area, the Corporation as receiver of closed banks is involved in litigation connected with bank liquidation activities. The FDIC must also act to correct improper banking practices through issuing cease- and-desist orders (Sections 8(b) and 8(c) of the FDI Act), levying fines, and terminating deposit insurance (Section 8(a) of the Act). The following is a summary of these actions. The FDIC levied eleven civil money penalties in 1982. The FDIC first used its authority to issue cease-and-desist orders to correct weaknesses or compliance violations of banks in 1971, and from 1971 through 1975 issued 37 orders. In the last seven years, it has issued 293 orders. In 1982, three were to correct violations of consumer protection laws and regulations and 66 were primarily to correct unsatisfactory financial conditions or management practices. Under the FDI Act, a bank may seek judicial review of a final FDIC order to cease-and-desist. One such appeal was filed in 1981. It is still pending before the court. The FDIC also is authorized under Section 8(a) of the FDI Act to initiate termination-ofinsurance proceedings if it finds that a bank is in an unsafe or unsound financial condition. If a bank does not correct its condition within a prescribed period, an administrative hearing is held during which the bank 10 proceeding initiated in 1982. At year-end, six proceedings were still pending. A narrative summary of FDIC’s 1982 enforcement actions, case by case but without banks' names, may be obtained from the FDIC Office of Public Information, 550 17th Street, N.W., Washington, DC 20429. Summaries of enforcement actions for years previous to 1982 are included in the Corporation’s annual report for each year, also available from the Office of Public Information. may respond to the charges. If the charges are upheld, the FDIC may terminate the bank’s insurance. The depositors are then required to be notified of the termination, but deposits (less subsequent withdrawals) continue to be insured for two years. The FDIC in 1982 initiated 18 termination-of-insu ranee proceedings, ten of which were still pending at the end of the year. Eight became moot by the failure of the banks involved. From 1934 through 1982, the FDIC has taken action under Section 8(a) against 281 banks, and 271 cases were closed at the end of 1982. In slightly less than half of the closed cases, the banks involved made the necessary correction. In most of the remaining cases, the banks were absorbed by other banks or ceased operations after a date was fixed to terminate its insurance. Under Section 8(e) of the FDI Act, the FDIC may remove an officer, director or other person participating in the management of an FDIC-supervised bank if the person has (1) violated a law, rule, regulation or final ceaseand-desist order, (2) engaged in unsafe or unsound banking practices, or (3) breached his or her fiduciary duty. The individual’s action must involve personal dishonesty or a willful or continued disregard for the safety and soundness of the bank. Also, the action must entail substantial financial damage to the bank, seriously prejudice the interests of its depositors or result in financial gain to the individual. During 1982 eight Section 8(e) proceedings were initiated of which two resulted in final removal orders. In addition one final order was issued which resulted from a removal The FDIC accomplished all of its activities during 1982 with a (year-end) total of 3,504 employees. This included 623 nonpermanent employees primarily temporary, field employees engaged in liquidation activities, as well as work-study program participants and clerical workers employed on a short-term or as-needed basis. About 61 percent of the Corporation’s employees are assigned to the Division of Bank Supervision; 82 percent of those are field examiners. During the year, the number of C ease-and-D esist Orders and A ctions to Correct Specific Unsafe or Unsound Practices or Violations o f Law or Regulations: 1979, 1980, 1981 and 1982 1982 1981 1980 1979 Actions authorized by Board of D ire c to rs ............................... 74 37 36 59 Actions in negotiation at end of y e a r ....................................... 15 8 11 16 Cease-and-desist orders outstanding at beginning of year-total.................................................................................... Section 8 ( b ) .............................................................................. Section 8(c) .............................................................................. 78 78 0 90 88 2 88 88 0 70 67 3 Cease-and-desist orders initiated and issued during year . . . Section 8 ( b ) .............................................................................. Section 8(c) .............................................................................. 61 55 6 29 28 1 28 25 3 42 37 6 Cease-and-desist orders issued in actions authorized in prior y e a r .............................................................................. Section 8 ( b ) .............................................................................. 8 8 9 9 13 13 15 15 Cease-and-desist orders issued during y e a r-to ta l.................. 69 38 41 57 Cease-and-desist orders term inated-total............................... Section 8 ( b ) .............................................................................. Section 8(c) .............................................................................. 41 36 5 50 47 3 39 38 1 40 31 9 Cease-and-desist orders in force at end of yea r-to tal............ Section 8 ( b ) .............................................................................. Section 8(c) .............................................................................. 106 105 1 78 78 0 90 88 2 88 88 0 11 commissioned examiners decreased from 1,340 to 1,332. The 1982 turnover rate for field examiners was 7.0 percent, compared to 8.0 percent for 1981. For all employees, exclusive of temporary field personnel, college students in the FDIC’s cooperative workstudy program and temporary summer personnel, the turnover rate was 7.8 percent, compared to 12.8 percent in 1981. Position vacancy announcements issued in 1982 totalled 247. Number o f Officials and Employees o f the Federal Deposit Insurance Corporation — December 31, 1981 and 1982 TO TAL 1982 TO TAL ....................................................... . . . 3504 47 Executive O ffic e s ................................. 105 Legal D iv is io n ........................................ Division of Research and Strategic P la n n in g ...................... 28 778 Division of L iq u id a tio n ........................ . . . 2129 Division o f Bank S up ervision ............. Division of A ccounting and 347 C orporate S e rv ic e s .................... . . . 29 O ffice of C orporate Audits ............... 6 O ffice o f Equal O p p o r tu n ity ............. 35 O ffice of Personnel M anagement . .. WASHINGTON OFFICE REGIONAL & FIELD OFFICE 1981 1982 1981 1982 1981 3394 43 106 933 47 105 963 43 106 2571 0 0 2431 0 0 30 429 2359 28 185 151 30 199 158 0 593 1978 0 230 2201 351 31 7 38 347 29 6 35 351 31 7 38 0 0 0 0 0 0 0 0 12 Comparative Statement of Financial Position <in thousands) D ecem ber 3 1 , 1982 A sse ts $ Cash Investm ent in U.S. Treasury o bligatio ns: S ecurities at amortized cost (Note 1) Interest receivable T otal Assistance to insured banks: Notes receivable (Note 2) Interest receivable T otal O ther receivables and prepaid ite m s (Note 3) Total C u rre n t Assets Long-term in v e s tm e n t in U.S. Treasury notes and bonds (Note 1) Long-term assistance to insured banks: Notes receivable (Note 2) Net w orth certificates (Note 4) Special assistance (Note 5) Less: A llow ance for losses (Note 5) T otal E quity in assets acquired from insured banks: D epositors' claim s paid Depositors' claim s unpaid Loans and assets purchased Assets purchased outrigh t Less: A llow ance for losses (Note 6) Total Land and o ffice b uild in g s, less accum ulated d e p re cia tio n on b u ild in g s T ota l Assets 1,335 Decem ber 31, 1981 $ 382 4,133,122 307,116 4,119,401 231,406 4,440,238 4,350,807 50,619 32,314 21,969 1,836 82,933 23,805 9,793 4,542 4,534,299 4,379,536 9,119,243 7,885,591 654,643 174,529 7,816 3,227 406.512 0 0 0 833,761 406.512 320,216 9,547 609,148 401,563 628,405 64,336 1,410 463,483 528,230 510,245 712,069 547,214 34,153 22,932 $15,233,525 $13,241,785 The accom panying sum m ary of sig n ifica n t accounting policies and notes to financial statem ents are an integral part of these statem ents. 13 Liabilities and the D eposit Insurance Fund A c c o u n ts payable and accrued lia b ilitie s Decem ber 31, 19 82 $ 56,762 D ecem ber 31, 1981 $ 13,458 C olle ctio n s held fo r others 2,453 3,299 A ccrue d annual leave o f em ployees 6,935 6,533 0 96.181 0 117,135 0 11,737 96.181 128,872 201,205 155,269 99,963 75,417 463,499 382,848 11,224 174,529 12,282 0 185,753 12,282 147,666 476,484 176,632 9,547 285,333 9,647 304,125 1,410 8 1 0 ,3 2 9 600,515 3,000 0 1,462,581 995,645 13,770,944 12,246,140 $15,233,525 $13,241,785 Due insured banks: Net assessm ent income credits: Available July 1, 1982 (Note 7) Available July 1, 1983 (Note 7) Available excess credits (Note 8) Total C u rre n t notes payable plus accrued in te re s t (Notes 9 and 10) C u rre n t estim a te d paym ents due on inco m e m aintenan ce agreem ents (Note 11) Total C u rre n t Liabilities Long -term notes payable: F Street property notes (Note 9) Promissory (exchange) notes (Note 4) Total Long-term lia b ilitie s incurred in fa ilures o f insured banks: FRB & FHLB indebtedness (Note 10) Notes payable (Note 10) Income m aintenance agreem ents (Note 11) Depositors' claim s unpaid Total Estim ated losses fro m C orporation litiga tion (Note 12) T ota l L iab ilitie s D e po sit Insurance Fund T o ta l L iab ilitie s and th e D e p o sit Insurance Fund The accom panying sum m ary of sig nifica nt accounting policies and notes to financial statem ents are an integral part of these statem ents. 14 Comparative Statement of Income and the Deposit Insurance Fund (In thousands) For the twelve m onths ended Decem ber 31. 1982 Incom e: Gross assessments earned Less: Provision fo r assessment credits $ 1,109,288 96,553 Decem ber 31, 1981 $ 1,040,940 119,024 1,012,735 921,916 1,116,216 253,750 985,417 130,043 1.369,966 1,115,460 Interest earned on notes receivable 79,178 31,924 Interest received on assets in liquidation 53,888 647 8,869 4,743 2,524,636 2,074,690 129,927 681,129 126,436 54,178 8,162 127,185 387,712 320,412 9,386 3,396 999,832 848,091 1,524,804 1,226,599 12,246,140 11,019,541 $13,770,944 $12,246,140 Total Interest on U.S. Treasury obligations Am ortization of prem ium s and discounts (net) Total Other income Total Incom e Expenses and Losses: A dm inistrative operating expenses (net) M erger assistance losses and expenses (net) Provision for insurance losses (net) Interest expense on FRB indebtedness Nonrecoverable insurance expenses T otal Expenses and Losses N et Incom e D e p o sit Insurance Fund—Jan u a ry 1 D eposit Insurance Fund— D ecem ber 31 The accom panying sum m ary of sig n ifica n t accounting policies and notes to financial statem ents are an integral part of these statem ents. Comparative Statement of Changes in Financial Position (In thousands) For th e tw e lv e m o n th s e n d e d D ecem ber 31, 19 82 D ecem ber 31, 1981 $ 1 ,5 2 4 ,8 0 4 493 1 1 2 ,4 0 3 1 2 6 ,4 3 6 (4 3 6 ,8 5 5 ) $ 1 ,2 2 6 ,5 9 9 438 2 5 ,9 0 7 2 7 1 ,5 0 7 0 1 ,3 2 7 ,2 8 1 1 ,5 2 4 ,4 5 1 1 ,6 0 7 ,4 4 6 5 0 ,6 1 9 296 1 ,6 0 8 ,9 3 8 2 1 ,9 1 9 0 2 6 ,1 1 8 4 3 2 ,1 3 8 1 1 ,8 7 3 2 4 3 ,7 3 5 1 7 4 ,5 2 9 0 2 9 ,8 0 0 4 9 4 ,0 8 8 4 9 2 ,4 4 2 4 2 8 ,0 0 0 0 3 8 2 ,7 2 9 4 ,6 3 4 ,7 5 7 4 ,2 2 1 ,6 4 5 Purchase of U.S.T. notes and bonds 2 ,8 5 9 ,7 5 0 Increase in assistance to insured banks: Net w orth certificates 1 7 4 ,5 2 9 Special assistance 8 ,1 1 2 Notes receivable 2 9 8 ,7 5 0 Assets acquired from insured banks: Receivership and payoff cases 2 8 2 ,3 5 3 Deposit assumption transactions 4 5 3 ,5 3 0 Purchase of San Francisco condom inium offices 1 1 ,7 1 4 Portion of notes payable transferred as currently due 1 8 1 ,8 4 2 Payments made on notes payable 2 5 ,5 8 7 Portion of income maintenance agreements transferred as currently due 9 9 ,9 6 3 Payments made on income maintenance agreements 1 6 4 ,5 1 5 5 0 0 ,3 7 7 Sources o f W orking Capital From operations: Net income Add: Depreciation expense Am ortization not effecting working capital A llowance for loss adjustments Income m aintenance agreements adjustm ents _ Total From other sources: Portion of long-term investments in U.S.T. notes & bonds at amortized cost transferred as currently due Portion of assistance to insured banks transferred as currently due Collections on assistance to insured banks Collections on assets acquired from insured banks: Receivership and payoff cases Deposit assumption transactions Increase in notes payable: Prom issory (exchange) notes Increase in liabilities incurred in failures of insured banks: FRB and FHLB indebtedness Notes Payable Income maintenance agreements Total sources o f w o rkin g capital Uses o f W orking Capital Total uses o f w orkin g capital N et increase in w o rk in g capital 4 ,5 6 0 ,6 4 5 $ 3 4 ,8 5 5 6 2 9 ,8 2 4 0 1 4 5 ,2 9 3 0 7 5 ,4 1 7 8 ,6 9 9 1 ,3 9 4 ,4 6 5 $ 2 ,8 2 7 ,1 8 0 W o rk in g C a p ita l (In c re a s e — (D e cre a se )) $ (1 ,6 0 4 ) $ 953 2 ,6 3 9 ,9 6 8 13 ,7 2 1 4 ,4 8 5 7 5 ,7 1 0 (2 1 ,2 5 0 ) 2 8 ,6 5 0 (1 ,1 8 2 ) 3 0 ,4 7 8 (4 5 5 ) 5,2 5 1 (5 ,5 4 6 ) (4 3 ,3 0 4 ) 870 846 (3 5 9 ) (4 0 2 ) 4 3 9 ,8 4 5 3 2 ,6 9 1 (1 4 2 ,6 7 2 ) (3 6 ,5 4 9 ) (9 ,5 0 3 ) (9 ,3 8 7 ) (2 4 ,5 4 6 ) (7 5 ,4 1 7 ) Changes in W orking Capital A ccounts Cash Investment in U.S.T. securities at amortized cost Interest receivable on U.S.T. securities ® Payments due on assistance to insured banks Interest receivable on assistance to insured banks Other receivables and prepaid items Accounts payable and accrued liabilities Collections held for others Accrued annual leave of employees Net assessment income credits due insured banks Current notes payable Interest on notes payable Current estimated payments on income maintenance agreements Net increase in w o rking capital 7 4 ,1 1 2 0 0 0 $ 7 4 ,1 1 2 $ 2 ,8 2 7 ,1 8 0 The accom panying sum m ary of sig n ifica n t accounting policies and notes to financial statem ents are an integral part of these statements. 16 Summary of Significant Accounting Policies General These statem ents do not include accountability for assets and liabilities of closed insured banks for w hich the Corporation acts as receiver or liquidating agent. Periodic and final accountability reports of its a ctivi ties as receiver or liquidating agent are furnished by the Corporation to courts, supervisory authorities, and others as required. U.S. Treasury O b liga tion s Securities are show n at amortized cost w hich is the purchase price of the securities less the amortized prem ium or plus the accreted discount. Such am ortizations and accretions are computed on a daily straight-line basis from the date of acquisition to the date of m aturity. D eposit Insurance A ssessm ents The Corporation assesses insured banks at the rate of 1 / 1 2 of one percent per year on the bank's average deposit lia bility less certain exclusions and deductions. Assessments are due in advance for each sixm onth period and credited to income each month. The Depository Institutions Deregulation and Monetary Control Act of 1980 changed the percentage of net assessment income to be transferred to insured banks each July 1 of the follo w in g calendar year from 66 2 /3 percent to 60 percent and authorized the FDIC Board of Directors to make adjustm ents to this percentage w ith in certain lim its in order to m aintain the Deposit Insurance Fund between 1.25 and 1.40 percent of estimated insured deposits. If this ratio falls below 1.10 percent or above 1.40 percent, the FDIC is mandated to make fu rth e r reductions, up to 50 per cent, or increases to the percentage distribution of net assessment income. A llo w a n c e fo r Losses The Corporation establishes an estim ated allowance for loss at the tim e a bank fails. These allowances are reviewed every six m onths and adjusted as required, based on financial developments w hich accrue d u r ing each six-m onth period. The Corporation does not state its estimated contingent liability for unknown future bank closings because such estim ates are impossible to make. The Corporation's contingent liability for eventual net losses depends upon factors w hich cannot be assessed until or after a bank has actually failed. The Corporation's entire Deposit Insurance Fund and borrowing authority are available, however, for such contingencies. D epreciation The Washington Office Buildings are depreciated on a straight-line basis over a 50-year estimated life. The San Francisco Condominium Offices are depreciated on a straight-line basis over a 35-year estimated life. The cost of furniture, fixtures, and equipment is expensed at tim e of acquisition. R e tirem e n t Plan All perm anent, fu ll-tim e and part-tim e employees of the FDIC are covered by the contributory Civil Service Retirem ent Plan. The Corporation makes bi-w eekly contributions to the plan equal to the employees' b i weekly contributions. The retirem ent plan expenses paid for calendar years 1982 and 1981 were $6,377,000 and $5,992,000, respectively. A ccru ed Inte re st Accrued interest, w hen classified in the current portions of the Comparative Statem ent of Financial Posi tion, represents the entire am ount of interest due to or due from the Corporation w ith in one year, in clu d ing interest accrued on those principal am ounts classified as long-term. Incom e M aintenance Agreem ents The Corporation records its liability under an Income Maintenance Agreement at the present value of each estimated cash outlay at the tim e the agreement is accepted. Estimated cash outlays are anticipated future payments the Corporation w ill provide to offset the difference between the annualized cost of funds and the annualized return on the declining volume of earning assets acquired in a merger transaction, plus an amount to cover overhead costs. The charge is recorded to insurance loss. The present value of the liability is then accreted daily and recorded monthly over the term of the agreement. Any differences between the estimated and actual cash outlays are recorded as payment adjustments. The present value of remaining estimated cash outlays are also reviewed and adjusted each year when interest rate changes occurring in the marketplace appear material or permanent in nature. The originally recorded loss, plus or minus any payment and present value adjustments, w ill then be prorated between insured banks and the Deposit Insurance Fund as provided in Section 7(d) of the Federal Deposit Insurance Act. R eclassification s Reclassifications have been made in the 1981 Financial Statements to conform to the presentation used in 1982. 18 Notes to Financial Statements — December 31, 1982 and 1981 1. U.S. Treasury O b lig a tio n s All cash received by the Corporation w hich is not used to defray operating expenses or for outlays related to assistance to banks and liquidation activities, is invested in U.S. Treasury securities. As of December 31, 1982 and 1 981, the Corporation's investm ent portfolio consisted of the follow ing: December 31, 1982 (In thousands) M a tu rity D escription 1 Day Special Treasury Certificates Less than 1 Year U.S.T. Bills U.S.T Notes & Bonds Total C urrent 1 -5 Years 5-10 Years U.S.T. Notes & Bonds U.S.T. Notes & Bonds Over 10 Years U.S.T. Bonds Total Long-Term Total Investm ent Par Value $ 649,376 Book Value $ 649,376 C ost M arket Value $ 649,376 $ 649,376 1,975,000 1,606,200 1,876,300 1,607,446 1,895,998 1,616,458 1,765,458 1,613,593 4 ,2 3 0 .5 7 6 4 ,1 3 3 ,1 2 2 4 ,1 6 1 ,8 3 2 4 ,0 2 8 .4 2 7 7,106,126 1,820,000 7,232,759 1,812,924 7,363,982 1,732,709 7,274,441 1,807,740 75,546 73,560 62,255 71,806 9 ,0 0 1 ,6 7 2 9 ,1 1 9 ,2 4 3 9 ,1 5 8 ,9 4 6 9 ,1 5 3 .9 8 7 $ 1 3 ,2 3 2 ,2 4 8 $ 1 3 ,2 5 2 ,3 6 5 $ 1 3 ,3 2 0 ,7 7 8 $ 1 3 ,1 8 2 ,4 1 4 December 31,1981 (In thousands) M a tu rity D escription 1 Day Special Treasury Certificates Less than 1 Year U.S.T. Bills U.S.T Notes & Bonds Total C urrent 1 -5 Years 5-10 Years Over 10 Years U.S.T. Notes & Bonds U.S.T. Notes & Bonds U.S.T. Bonds Total Long-Term Total Inve stm e nt Par Value S 822,578 Book Value $ 822,578 Cost M arket Value $ 822,578 $ 822,578 1,809,000 1,609,896 1,687,886 1,608,937 1,692,733 1,581,749 1,601,298 1,619,254 4 ,2 4 1 ,4 7 4 4 ,1 1 9 ,4 0 1 4 ,0 9 7 ,0 6 0 4 ,0 4 3 ,1 3 0 4,842.326 2,940,000 4,881,567 2,930,651 4,401,699 2,362,069 75,546 73,373 48,821 4,909,898 2,926,126 71,806 7 ,8 5 7 ,8 7 2 7 ,8 8 5 ,5 9 1 6 ,8 1 2 ,5 8 9 7 ,9 0 7 ,8 3 0 $ 1 2 ,0 9 9 ,3 4 6 $ 1 2 ,0 0 4 ,9 9 2 $ 1 0 ,9 0 9 ,6 4 9 $ 1 1 ,9 5 0 ,9 6 0 19 4. N et W o rth C e rtifica te s The Garn-St. Germain Depository Institutions Act of 1982 authorized the FDIC to establish a net w orth certificate program. Under the program, the FDIC w ill purchase from qualified institutions capital instrum ents know n as Net W orth Certificates up through October 15, 1985. Each certificate issued w ill generally rem ain outstanding for up to seven years from the date of issuance. As consideration for the purchase of a qualified in stitu tio n 's Net W orth Certificates, the Corporation w ill issue its non-negotiable, floating-rate prom issory notes of equal principal value. Both the FDIC's prom issory notes and the qualified in stitu tio n 's Net W orth Certificates w ill pay interest quarterly at a rate tied to the average equivalent coupon-issue yield on the U.S. Treasury's 52-W eek Bill auction held im m ediately prior to the beginning of a calendar quarter plus one-half of one percent. As of December 3 1 ,1 9 8 2 , the follow ing qualified institutio ns have assistance am ounting to $174,529,000 under the FDIC's net w orth certificate program: The Lincoln Savings Bank Emigrant Savings Bank Roosevelt Savings Bank East River Savings Bank The Bowery Savings Bank Inter-County Savings Bank Auburn Savings Bank The Seamen's Bank For Savings Orange Savings Bank Dry Dock Savings Bank The Dime Savings Bank of New York The W illiamsburgh Savings Bank Elizabeth Savings Bank Colonial M utual Savings Bank Beneficial Mutual Savings Bank Total $ 14,933,000 28.294.000 3.416.000 9.408.000 58.700.000 487.000 913.000 12.980.000 2.426.000 17.478.000 5,000,000 18.377.000 181.000 476,000 1.460.000 $ 1 7 4 ,5 2 9 ,0 0 0 20 5. Allowance for Losses - Special Assistance In accordance w ith an Assistance Agreem ent dated October 4, 1982, between the FDIC, the Oklahoma National Bank and Trust Company, N .A , Oklahoma City, Oklahoma, and the First National Bank and Trust Company of Oklahoma City, N.A., Oklahoma City, Oklahoma, the FDIC agreed to indem nify Oklahoma National Bank and Trust Company, N A ., against any losses on existing loans and certain other claims recognized over the next 1 2 m onths to the extent that such losses exceed $19.25 m illion. If losses are recognized in excess of that level, the FDIC w ill be entitled to 100 percent of any recoveries on the charged-off loans until the FDIC's outlays are fu lly recovered. As of December 3 1 ,1 9 8 2 , the FDIC had recorded $3,227 ,000 of estim ated losses on $7,816,000 of unrecovered outlays. 6. Allowance for Losses - Assets in Liquidation An analysis of the changes in the estim ated allowance for losses on assets in liquidation are described below by account groups for the years ended December 3 1 ,1 9 8 2 and 1981. The provision of $48,009,000 charged to expense under depositors' claim s paid includes $46,000,000 of estimated losses from the closing of Penn Square Bank, N.A., Oklahoma City, Oklahoma, Although all estimates are subject to increases and decreases over tim e, the original reserve of $46,000,000, equal to approxim ately 20 percent of the FDIC's total outlay, w ill in all likelihood be substantially increased as assets and claim s are appraised or evaluated. This process is expected to be completed by mid-1 983. Depositors' claims paid: Balance, beginning of period Add (Subtract). Provision charged to expense Net adjustment to prior years W rite-off at term ination Balance; end of period Loans and assets purchased: Balance, beginning of period Add (Subtract): Provision charged to expense Net adjustment to prior years W rite-off at term ination Balance, end of period Assets purchased outright: Balance, beginning of period Add (Subtract): Provision charged to expense Net adjustment to prior years W rite-off at termination Balance, end of period Total 1982 1981 $ 11,285,000 S 18,346,000 48,009,000 (592,000* (350,000) 325,000 (7,386,000) 0 58,352,000 11,285,000 154,114,000 183,962,000 61,958,000 (5,106.000) ____ (657,000) 210,309,000 7,422,000 (37,270,000) 0 154,114,000 344,846,000 36,734,000 21,464,000 (6,566,000) 0 359,744,000 364,105,000 (7,088,000) (48,905,000) 344,846,000 8628,405,000 $510,245,000 21 7. A ssessm ent C redits Due Insured Banks Contingent upon a legislatively specified ratio of the Corporation's Deposit Insurance Fund to estimated insured bank deposits, the FDIC credits a legislatively authorized percentage (currently 60 percent) of its net assessment income to insured banks. This credit is distributed, pro-rata, to each insured bank as a reduction of the following year's assessments. Net assessment income is determined by gross assessments less adm inis trative operating expenses and expenses and losses related to insurance operations. The Garn-St. Germain Depository Institutions Act of 1982 amended Section 7(dX1) of the Federal Deposit Insurance Act and authorized the FDIC to include certain opportunity lending costs in the computation of the net assessment income. The opportunity lending costs are the amounts by w hich the amount of interest earned on each loan made by the Corporation under Section 13 of the Federal Deposit Insurance Act after January 1, 1982, is less than the amount of interest the Corporation would have earned for the calendar year if interest had been paid on the loans at a rate equal to the average current value of funds to the United States Treasury for the calendar year. The computation and distribution of net assessment income credits for calendar year 1982 and 1981 are as follows: 1 9 82 Net Assessment Income Credits Due Insured Banks - July 1, 1983 Computation: Gross Assessment Income - C.Y. 1982 $1,108,254,000 Less: Administrative Operating Expenses (Net) $129,927,000 Merger Assistance Losses and Expenses less Amortization and Accretion (Net) 628,562,000 Provision for Insurance Losses (Net) 126,436,000 Nonrecoverable Insurance Expenses (Net) 61,881,000 Opportunity Lending Costs (Net) JJ)60 ,0 00 948,366,000 Net Assessment Income $ 159,888.000 Distribution: 40% to the Deposit Insurance Fund 60% to Insured Banks $ 63,955,000 95,933,000 $ 159,888,000 Assessment Credit Due Insured Banks: Assessment Credit - C.Y. 1982 Assessment Credits - Prior Years Total Credits Due, July 1, 1983 $ 95,933,000 _____ 248,000 S 96,181,000 Effective Rate of Assessment for C.Y 1982: 1/ 1 3 of 1% of Total Assessable Deposits 1981 Net Assessment Income Credits Due Insured Banks - J u l y l , 1982 Computation: Gross Assessment Income - C.Y. 1981 Less: Administrative Operating Expenses (Net) Merger Assistance Losses and Expenses less Amortization and Accretion (Net) Provision for Insurance Losses (Net) Nonrecoverable Insurance Expenses (Net) Net Assessment Income Distribution: 40% to the Deposit Insurance Fund 60% to Insured Banks $1,037,621,000 $127,185,000 382.200.000 320.412.000 12,771,000 $ 78,021,000 117,032,000 Assessment Credit Due Insured Banks: Assessment Credit - C.Y. 1981 Assessment Credits - Prior Years Total Credits Due, July 1, 1982 842,568,000 $ 195,053,000 $ 195,053,000 $ 117,032,000 103,000 $ 117,135,000 Effective Rate of Assessment for C.Y. 1981 1/ 1 4 of 1% of Total Assessable Deposits 8. A vaila b le Excess C redits As of December 31, 1981, assessments receivable from insured banks reflected credit balances representing excesses of incom e credits made available to insured banks on July 1, 1981, over assessments due for the last six m onths of the calendar year. These excess credits continue to be available to insured banks at the beginning of the next assessment period in the follow ing calendar year. 9. N otes Payable - F S tre e t P roperty On June 30, 1980, the Corporation purchased property located at 1776 F Street, N.W., W ashington, D.C. for a purchase price of $17,406,308, plus closing costs. The purchase price of the land was $2,378,880, and the building purchase price am ounted to $1 5,130,221. This purchase was financed by cash outlays am ounting to $3,102,793, the assum ption of the existing mortgage on the property am ounting to $6,406,308, and the issuance of a prom issory note, m aturing over seven years, am ounting to $8,000,000. As of December 31, 1982 and 1981, the current portions of the mortgage and of the promissory note am ounted to $1,058,000 and $1,053,000, respectively. 22 10. L ia bilities Incurred in Failures o f Insured Banks The Corporation's outstanding principal balances on liabilities incurred in failures of insured banks as of December 3 1 ,1 9 8 2 and 1981 are as follow s: A. Current Notes: Federal Reserve Bank of New York Federal Home Loan Bank of New York Franklin Buildings, Inc. First Interstate Bank of Washington, N.A. Hudson City Savings Bank Buffalo Savings Bank Philadelphia Saving Fund Society Total Current B. Long-Term Notes: Federal Reserve Bank of New York Federal Home Loan Bank of New York Franklin Buildings, Inc. First Interstate Bank of Washington, N.A Hudson City Savings Bank Buffalo Savings Bank Philadelphia Saving Fund Society American Savings Bank Total Long-Term Total 1982 $142,667,000 3,000,000 1981 $142,667,000 0 1,053,000 1,340,000 4,000,000 12,724,000 16,000,000 1 8 0 ,7 8 4 ,0 0 0 1,573,000 0 0 0 i 0 1 4 4 ,2 4 0 ,0 0 0 142,666,000 5,000,000 285,333,000 0 5,103,000 21,024,000 24,000,000 192,232,000 204,125,000 30,000,000 6 2 4 ,1 5 0 ,0 0 0 9,647,000 0 0 0 0 0 2 9 4 ,9 8 0 ,0 0 0 $ 8 0 4 ,9 3 4 ,0 0 0 $ 4 3 9 ,2 2 0 ,0 0 0 11. Incom e M aintenan ce A greem ents The income m aintenance agreements, including am ounts to cover overhead costs, are classified and pres ented on the financial statem ents at the present value of anticipated future payments. The present value of current estimated payments includes that portion expected to be amortized to future value and paid w ithin the next twelve months. The Corporation's liability balances at present value w ith operating insured banks as of December 3 1 ,1 9 8 2 and 1981 are as follows: A. Current Metropolitan Savings Bank Harlem Savings Bank Union Dime Savings Bank Marquette National Bank First Interstate Bank of Washington, N.A Buffalo Savings Bank Philadelphia Saving Fund Society Total Current 1982 $ 15,025,000 6,460,000 0 9,489,000 254,000 60,743,000 7,992,000 9 9 ,9 6 3 .0 0 0 1981 $ 31,483,000 13,144,000 30,790,000 0 0 0 0 7 5 ,4 1 7 .0 0 0 B. Long-Term Metropolitan Savings Bank Harlem Savings Bank Union Dime Savings Bank Marquette National Bank First Interstate Bank of Washington, N.A. Buffalo Savings Bank Philadelphia Saving Fund Society Total Long-Term Total 58,333,000 17,183,000 0 (6,411,000) 2,720,000 67,280,000 37,527,000 1 7 6 ,6 3 2 ,0 0 0 160,391,000 56,831,000 86,903,000 0 0 0 ' . ih , o 3 0 4 .1 2 5 .0 0 0 $ 2 7 6 ,5 9 5 ,0 0 0 $ 3 7 9 ,5 4 2 ,0 0 0 12. Estim ated Losses From C orporation Litigation Estimated losses from Corporation litigation of $3,000,000 represents estimates for potential losses in three out of ten legal actions involving a total of approximately $44,835,000 of claims, counterclaim s, and possible indem nity exposures against the FDIC in its corporate capacity as of December 31, 1982. 13. Lease C o m m itm e n ts Rent for office prem ises charged to expense was $5,695,000 (1982) and $5,771,000 (1981). M inim um rentals for each of the next five years and foF subsequent years thereafter are as follows: 1983 55,921,000 1984 $5,247,000 1985 $4,548,000 1986 $4,474,000 1987 $4,331,000 1988/thereafter $4,391,000 Most office premise lease agreem ents provide for increase in basic rentals resulting from increased prop erty taxes and m aintenance expense. 23 COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON D.C. 20548 B-211215 A pril 28, 1983 To the C h a i r m a n , B o a r d of D i r e c t o r s Federal Deposit Insurance Corporation We have e x a m i n e d the s t a t e m e n t of f i n a n c i a l p o s i t i o n of the Fe d e r a l D e p o s i t I n s u r a n c e C o r p o r a t i o n as of D e c e m b e r 31, 1982, and the r e l a t e d s t a t e m e n t s of income and the d e p o s i t i nsurance fund and c h a n g e s in f i n a n c i a l p o s i t i o n for the year then ended. Our e x a m i n a t i o n w a s m a d e in a c c o r d a n c e w i t h g e n e r a l l y a c c e p t e d g o v e r n m e n t a u d i t i n g s t a n d a r d s and, a c c o r d i n g l y , included such tests of the a c c o u n t i n g r e c o r d s and such o t h e r a u d i t i n g p r o c e d u r e s as we c o n s i d e r e d n e c e s s a r y in the c i r c u m s t a n c e s . As a r e s u l t of the w o r k p e r f o r m e d d u r i n g o u r e x a m i n a t i o n of the fina n c i a l s t a tements, we have also is sued s e p a r a t e r e p o r t s , d a t e d A p ril 28, 1983, on c o m p l i a n c e w i t h laws and r e g u l a t i o n s , and i n t ernal a c c o u n t i n g c ontrols. In o u r o p i n i o n , the f i n a n c i a l s t a t e m e n t s r e f e r r e d to above p r e sent f a i r l y the f i n a n c i a l p o s i t i o n of the Fede r a l D e p o s i t I nsurance C o r p o r a t i o n as of D e c e m b e r 31, 1982, and the r e s u l t s of its o p e r a ti o n s and the c h a n g e s in its fina n c i a l p o s i t i o n for the y e a r then ended, in c o n f o r m i t y w i t h g e n e r a l l y a c c e p t e d a c c o u n t i n g p r i n c i p l e s a p p l i e d on a b a s i s c o n s i s t e n t w i t h that of the p r e c e d i n g year. The f i n a n c i a l s t a t e m e n t s of the F e d e r a l D e p o s i t I n s u r a n c e C o r p o r a t i o n for the y e a r e n d e d D e c e m b e r 31, 1981, were not a u d i t e d and, a c c o r d ingly, no o p i n i o n has b e e n e x p r e s s e d on them. Comptroller General of the U n i t e d S t ates Legislation and Regulations 26 Legislation — 1982 Garn-St Germain Depository Institutions Act o f 1982 Public Law 97-320, approved October 15, 1982, is comprehensive legislation making a number of major changes in federal laws affecting financial institutions. It is an essential first step toward an ultimate objective of a stronger, more rational financial system. Following is a brief summary of provisions in the Act. Title I: Deposit Insurance Flexibility Act—expands FDIC’s power to assist troubled banks, authorizes certain acquisitions on an interstate or cross-industry basis, allows the Federal Home Loan Bank Board to charter savings banks that retain their FDIC insurance, and permits the FDIC to convert a state mutual savings bank into a federal stock savings bank under certain circumstances. Title II: Net Worth Certificate Act—authorizes the Federal Savings and Loan Insurance Corporation and the FDIC to administer a program for qualified institutions to issue their own capital instruments to the federal insurance agencies, and determines the treatment of net worth certificates and common stock under certain circumstances. Title III: Thrift Institutions Restructuring—increases powers for federally chartered savings and loan associations and savings banks, directs the Depository Institutions Deregulation Committee to create an account competitive with money market mutual funds, sets January 1,1984 as the end of the time period for phasing out the interest rate differential, and federally preempts state laws and judicial decisions that restrict enforcement of due-on-sale clauses in real property loans except those in force during a specified window period. Title IV: Provisions Relating to National and Member Banks— increases the national bank lending limits for unsecured loans to one borrower and for loans fully secured by marketable collateral, completely revises Section 23A of the Federal Reserve Act, exempts all depository institutions with deposits below a threshold amount from Federal Reserve required reserves, authorizes the bank supervisory agencies to set a new threshold figure above which loans to officers, directors and 10 percent shareholds must be approved by a bank’s board of directors, gives the bank supervisory agencies the power to remove certain management officials who violate the Management Interlocks Act, extends the ban on granting preferential loans to insiders of banks that maintain correspondent balances with the lending bank, and allows federal banking agencies to issue regulations on reporting and public disclosure of information on loans to a bank’s insiders. Title VI: Insurance Activities of Bank Holding Companies— prohibits certain bank holding companies from providing insurance as a principal agent or broker. Title V: Amendments to the Federal Credit Union Act—makes a large number of credit union amendments to give credit unions greater flexibility and authority in daily operations, changes and clarifies certain real estate provisions of the Federal Credit Union Act, and grants credit unions power to invest in state and local government obligations and to issue mortgage-backed securities. Title VII: Miscellaneous Amendments—allows financial institutions to offer NOW accounts and share draft accounts to state and local governments, and directs the FDIC, the FSLIC and the National Credit Union Administration to study the feasibility of providing excess deposit insurance coverage and the possibility of allowing private insurance or reinsurance of such coverage. 27 Rules and Regulations —1982 Delegations o f Authority (Part 303) Effective March 8, 1982, FDIC delegated to its Board of Review the authority to act on requests for relief from reimbursement for certain violations of the Truth in Lending Act, as amended, eliminating the need for Board action in each case, and creating a uniform procedure for handling such requests. Effective March 26, 1982, FDIC’s Board of Directors under Part 303 delegated to the Director of its Division of Bank Supervision and to its regional directors, when delineated criteria are met, increased authority to approve, but not to deny, deposit insurance applications. Effective July 2, 1982, delegation of authority to approve the issuance of subordinated debt pursuant to § 303.11(a)(3) was eliminated in light of the removal of §329.10(b)(3)(vi). Effective November 30, 1982, FDIC delegated authority to its Board of Review, the Director of the Division of Bank Supervision and the Deputy General Counsel for Open Bank Regulation and Supervision, and where confirmed in writing, to the appropriate regional director or regional counsel or both, to act on certain enforcement matters. Rules o f Practice and Procedure (Part 308) Effective November 30, 1982, in accordance with changes made to § 303.13, the delegation of authority to act on certain enforcement matters, Part 308 was amended to correctly reflect the delegation. Authority was also delegated to the Executive Secretary to act on certain procedural motions regarding the conduct of hearings. In addition, minor corrective amendments were also made to Part 308. Disclosure of Information (Part 309) FDIC amended its regulation on the disclosure of information, effective June 23, 1982, to permit insured nonmember banks to directly disclose copies of FDIC examination reports to their parent holding companies and individual majority shareholders without prior approval by FDIC if certain specific conditions are met. This amendment eliminates the FDIC’s role in processing disclosure requests. Effective October 7, 1982, FDIC amended its regulation on the disclosure of information under the Freedom of Information Act to revise the fee schedule and to delegate authority to the Executive Secretary to decide on requests for a waiver or reduction of fees. Authority also was delegated to the General Counsel to decide appeals of denials of initial information. Assessments (Part 327) Effective January 4, 1982, FDIC amended Part 327 of its regulations pertaining to insurance assessments on deposits of insured banks to require insured banks to pay interest on delinquent assessment payments if delinquencies are not caused by FDIC, and to require FDIC to pay interest on assessment overpayments by insured banks. The amendment insures that appropriate compensation is provided to insured banks and to the FDIC for loss of the immediate use of their funds when delinquent payments or overpayments occur in the assessment process. Interest on Deposits (Part 329) Effective July 29, 1982, three sets of amendments were made to Part 329. The first was necessary to conform Part 329 to the International Banking Facility Deposit Insurance Act. Changes relating to IBF's consisted of the following: (1) amend § 329.1 (a) to remove “ international banking facility time deposit” from the list of what is not a demand deposit, as Congress has legislated “ IBF time deposits” not to be deposits under the Federal Deposit Insurance Act; (2) amend § 329.1(b) to remove “ IBF time deposits” from the definition of time deposit; (3) amend § 329.1 (i) to give “ IBF time deposits” the same definition given the term by the Board of Governors of the Federal Reserve System in §204.8(a)(2) of its Regulation D, that they are not deposits despite their inconsistent nomenclature; (4) amend § 329.10(a) to include “ IBF time deposits” in the definition of “obligations other than deposits” which renders “ IBF time deposits” subject to the provisions of Part 329 except where otherwise noted. The second amendment was necessary to eliminate an inconsistency between provisions of Part 329 providing for approval of certain nondeposit obligations as additions to a bank’s capital and a policy statement on capital adequacy issued by the Corporation, which provides that nondeposit obligations are not to be considered part of the bank’s capital account. This second amendment reflects the tenor of the policy statement. The third set was necessary to correct a discrepancy within Part 329 so that it will be inapplicable to obligations other than deposits, as well as to deposits, payable only at an office of an 28 insured nonmember bank located outside of the states of the United States and the District of Columbia. On July 29, 1982, FDIC amended the grandfather provision of § 329.10(b)(2) to allow insured State nonmember banks to continue to offer repurchase agreements in denominations of less than $100,000 with maturities of 90 days or more. On August 16, 1982, FDIC amended § 329.10(b)(2) eliminating the prohibition against automatic renewal of retail repurchase agreements (“ repos” or “ RPs”) to encourage competitive fairness to banks. On September 1, 1982, FDIC amended § 329.1 to conform with the Depository Institutions Deregulation Committee’s (“ DIDC’s”) regulation allowing seven to thirty-one day deposit instruments, thus creating an exception to the requirement that time deposits have a minimum maturity of fourteen days. On September 8, 1982, § 329.10(b) (3) (ii) was amended by FDIC to eliminate the seven-year weighted average maturity provision for mandatory convertible instruments and obligations of state nonmember banks from the weighted average and minimum maturity requirements to relieve mandatory interest rate ceilings in Part 329. Unsafe or Unsound Banking Practices (Part 337) Management Official Interlocks (Part 348) Effective October 22, 1982, an amendment responsive to a provision of the Garn-St Germain Depository Institutions Act of 1982 was made to Part 337. This amendment reestablished a threshold amount of $25,000 on an interim basis for extensions of credit to bank insiders that would require prior approval by the bank’s board of directors. It also clarifies the extent to which nonmember banks are subject to Federal Reserve Board Regulation O (12 C.F.R. Part 215). FDIC amended Part 348 of its regulation on management official interlocks on May 24, 1982, to clearly provide an exception for interlocks between two depository institutions when one of the institutions faces conditions that endanger its safety or soundness and if one of the institutions is state chartered and state supervised. Registration of Securities Transfer Agents (Part 341) On September 30, 1982, FDIC amended Part 341, its securities transfer agent registration rule, to add a section concerning deregistration of transfer agents and a section containing definitions of terms which may not be familiar to registrants and the public. The amendment increases to 60 days the time allowed to amend registration after a change in circumstances and adopts a revised format for the part. These changes integrate the regulations with a simplified form TA-1 for initial registration of transfer agents and for amendments to transfer agent registration. Effective October 26, 1982, FDIC amended its regulations under Part 348 implementing the Depository Institution Management Interlocks Act to reflect recent changes in the law. Section 348.6 was amended to delete any reference to changes in circumstances that will cause early termination of a grandfathered interlock. Section 348.5 was amended to permit a management official whose service in an interlocking relationship is grandfathered under the Act to continue such service for the ten-year grandfather period provided in the Act, notwithstanding an earlier change in circumstances. Another change in § 348.4 permits a management official of a depository organization and a non-depository organization to continue said service, despite the prohibitions of the Act, after the non-depository organization becomes a diversified savings and loan holding company. 30 Banks Closed Because of Financial Difficulties: FDIC Income, Disburse ments, and Losses Table 122 — Number and depos its of banks closed because of financial difficulties, 1934-1982 Table 123 — Insured banks requiring disbursements by the Federal Deposit Insurance Cor poration during 1982 Table 124 — Depositors, depos its, and disbursements in failed banks requiring disbursements by the Federal Deposit Insurance Corporation, 1934-1982 Banks grouped by class of bank, year of deposit payoff or deposit assumption, amount of deposits, and State. Table 125 — Recoveries and losses by the Federal Deposit Insurance Corporation on princi pal disbursements for protection of depositors, 1934-1982 Table 126 — Analysis of disburse ments, recoveries, and losses in deposit insurance transactions, January 1, 1934-December 31, 1982 Table 127 — Income and expenses, Federal Deposit Insur ance Corporation, by year, from beginning of operations, Sep tember 11,1933, to December 31, 1982 Table 128 — Protectioon of de positors of failed banks requiring disbursements by the Federal Deposit Insurance Corporation, 1934-1982 Table 129 — Insured deposits and the deposit insurance fund, 1934-1982 Deposit insurance disbursements Disbursements by the Federal Deposit Insurance Corporation to protect depositors are made when the insured deposits of banks in financial difficulties are paid off, or when the deposits of a failing bank are assumed by another insured bank with the financial aid of the Corporation. In deposit payoff cases, the dis bursement is the amount paid by the Corporation on insured dep osits. In deposit assumption cases, the principal disbursement is the amount loaned to failing banks, or the price paid for assets purchased from them; additional disbursements are made in those cases as advances for protection of assets in pro cess of liquidation and for liqui dation expenses. In deposit assumption cases, the Corpora tion also may purchase assets or guarantee an insured bank against loss by reason of its assuming the liabilities and pur chasing the assets of an open or closed insured bank. Under its section 13(c) authority, the Corporation has made dis bursements to five operating banks. The amounts of these disbursements are included in table 126, but are not included in tables 124 and 125. Noninsured bank failures Statistics in this report on failures of noninsured banks are com piled from information obtained from State banking departments, field supervisory officials, and other sources. The Corporation received no reports of non in sured bank closures due to financial difficulties in 1982. For detailed data regarding non insured banks that suspended in the years 1934-1962, see the Annual Report for 1963, pp. 2741. For 1963-1981, see table 122 of this report, and previous reports for respective years. Sources of data Insured banks: books of bank at date of closing; and books of FDIC, December 31, 1982. 31 Table 122. NUMBER AND DEPOSITS OF BANKS CLOSED BECAUSE OF FINANCIAL DIFFICULTIES, 1934-1982 Number Deposits (in thousands of dollars) Insured Year Total Non insured1 Total ................. 764 136 628 1934 .................... 1935 .................... 1936 .................... 1937 .................... 1938 ................... 1939 .................... 1940 ................... 1 9 4 1 ................... 1942 .................... 1943 ................... 1944 .................... 1945 .................... 1946 .................... 1947 .................... 1948 .................... 1949 .................... 1950 .................... 1 9 5 1 .................... 1952 .................... 1953 .................... 1954 .................... 1955 .................... 1956 ................... 1957 ................... 1958 ................... 1959 .................... 1960 ................... 1 9 6 1 ................... 1962 .................... 1963 .................... 1964 .................... 1965 ................... 1966 ................... 1967 ................... 1968 .................... 1969 ................... 1970 .................... 1 9 7 1 .................... 1972 ................... 1973 ................... 1974 ................... 1975 ................... 1976 ................... 1977 .................... 1978 ................... 1979 ................... 1980 ................... 1 9 8 1 ................... 1982 ................... 61 32 72 84 81 72 48 17 23 5 2 1 2 6 3 9 5 5 4 5 4 5 3 3 9 3 2 9 3 2 8 9 8 4 3 9 8 6 3 6 4 14 17 6 7 10 10 10 42 52 6 3 7 7 12 5 2 3 9 26 69 77 74 60 43 15 20 5 2 1 1 5 3 5 4 2 3 4 2 5 2 2 4 3 1 5 1 2 7 5 7 4 3 9 7 6 1 6 4 13 16 6 7 10 10 10 42 Total 1 1 4 1 3 1 1 2 1 1 5 1 4 2 1 4 1 1 2 1 1 Without disbursements by FDIC2 8 Insured With disbursements by FDIC3 Total 620 20,143,213 143.500 19,999,713 9 25 69 75 74 60 43 15 20 5 2 1 1 5 3 4 4 2 3 2 2 5 2 1 4 3 1 5 37,332 13,988 28,100 34,205 60,722 160,211 142,788 29,796 19,540 12,525 1,915 5,695 494 7,207 10,674 9,217 5,555 6,464 3,313 45,101 2,948 11,953 11,690 12,502 10,413 2,593 7,965 10,611 4,231 23,444 23,867 45,256 106,171 10,878 22,524 40,134 55,229 132,058 99,784 971,296 1,575,832 340,574 865,659 205,208 854,154 110,696 216,300 3.826,022 9,908,379 35,365 583 592 528 1.038 2,439 358 79 355 1,968 13,405 27,508 33,677 59,684 157,772 142,430 29,717 19,185 12,525 1,915 5,695 347 7,040 10,674 6,665 5,513 3,408 3,170 44,711 998 11,953 11,330 11,247 8,240 2,593 6,930 8,936 3,011 23,444 23,438 43,861 103,523 10,878 22,524 40,134 54,806 132,058 20,480 971,296 1,575,832 339,574 864,859 205,208 854,154 110,696 216,300 3,826,022 9,908,379 2 7 5 7 4 3 9 7 6 1 6 4 13 16 6 7 10 10 10 42 Non insured1 147 167 2,552 42 3,056 143 390 1,950 360 1,255 2,173 1,035 1,675 1,220 429 1,395 2,648 423 79,304 1,000 800 Total Without disbursements by FDIC2 41,147 85 328 1,190 26,449 10,084 With disbursement by FDIC3 19,958.566 1,968 13,320 27,508 33,349 59,684 157,772 142,430 29,717 19,185 12,525 1,915 5,695 347 7,040 10,674 5,475 5,513 3,408 3,170 18,262 998 11,953 11,330 1,163 8,240 2,593 6,930 8,936 3,011 23,444 23,438 43,861 103,523 10,878 22,524 40,134 54,806 132,058 20,480 971,296 1,575,832 339,574 864,859 205,208 854,154 110,696 216,300 3,826,022 9,908,379 'For information regarding each of these banks, see table 22 in the 1963 Annual Report (1963 and prior years), and explanatory notes to tables regarding banks closed because of financial difficulties in subsequent annual reports. One noninsured bank placed in receivership in 1934, with no deposits at time of closing, is omitted (see table 22, note 9). Deposits are unavailable for seven banks. 2For information regarding these cases, see table 23 of the Annual Report for 1963. 3For information regarding each bank, see the Annual Report for 1958, pp. 48-83 and pp. 98-127, and tables regarding deposit insurance disbursements in subsequent annual reports. Deposits are adjusted as of December 31, 1982. Case Number Name and location Deposit payoff 319 Class | of bank Number of depositors or accounts Date of closing or deposit assumption March 1, 1982 March 2, 1982 2,819,040 | Federal Deposit Insurance Corporation April 30, 1982 May 3, 1982 6,779,531 | Federal Deposit Insurance Corporation June 23, 1982 June 26, 1982 6,126,921 | Federal Deposit Insurance Corporation July 5, 1982 July 6, 1982 September 3, 1982 September 7, 1982 23,304,869 | Federal Deposit Insurance Corporation October 8, 1982 October 12, 1982 12,669,400 | Federal Deposit Insurance Corporation November 19, 1982 November 22, 1982 The Bank of Woodson Woodson, Texas Carroll County Bank Huntingdon, Tennessee Citizens Bank Tillar, Arkansas Penn Square Bank, N.A. Oklahoma City, Oklahoma Hohenwald National Bank Hohenwald, Tennessee Tri-State Bank Markham, Illinois Ranchlander National Bank Melvin, Texas Deposit assump tion I Western New York Savings Bank* 267 Buffalo, New York The First National Bank and Trust Company of Tuscola | Tuscola, Illinois S 233,000 January 15, 1982 3,905 February 6, 1982 227,990,539 j Federal Deposit Insurance Corporation 2,526,728 | Federal Deposit Insurance Corporation 30 500,000 Buffalo Savings Bank Buffalo, New York 7,210,000 First National Bank of Douglas County Tuscola, Illinois Great American Bank of Tampa Tampa, Florida February 12, 1982 Metropolitan Bank and Trust Company Tampa, Florida Farmers and Mechanics Savings Bank of Minneapolis Minneapolis, Minnesota February 20, 1982 I Marquette National Bank of Minneapolis Minneapolis, Minnesota February 20, 1982 | First-Citizens National Bank of Dyersburg Dyersburg, Tennessee Bank of Yorkville Yorkville, Tennessee March 11, 1982 First Interstate Bank of Washington, N.A. Seattle, Washington March 11, 1982 Hudson City Savings Bank Jersey City, New Jersey Fidelity Mutual Savings Bank* | Spokane, Washington I United States Savings Bank of Newark, New I NM Jersey* Newark, New Jersey 276 The New York Bank for Savings* New York, New York I NM Western Saving Fund Society of Philadelphia* Haverford, Pennsylvania I NM 491,057 March 26, 1982 420,000 April 2, 1982 11,031 April 2, 1982 The First National Bank in Humboldt Humboldt, Iowa N Aquia Bank and Trust Company Stafford, Virginia SM 4,769 April 3, 1982 N 5,354 April 16, 1982 NM 3,097 April 29, 1982 Coles County National Bank of Charleston Charleston, Illinois N 6,910 May 1, T982 Community Bank of Washtenaw Ypsilanti, Michigan MN 7,825 May 15, 1982 NM 2,000 June 12, 1982 SM 6,600 June 25, 1982 National Security Bank Tyler, Texas Pacific Coast Bank San Diego, Calitomia 282 Banco Regional Bayamon, Puerto Rico 283 Farmers State Bank of Lewistown Lewistown, Illinois •Merged with financial assistance from FDIC into operating banks to prevent probable failure. 461,907,077 Buffalo Savings Bank Buffalo, New York 425,536,947 Philadelphia Saving Fund Society Horsham Township, Pennsylvania 10,616,748 Hawkeye Bank and Trust Company Humboldt, Iowa 9,770,100 Peoples Bank of Danville Danville, Virginia 4,660,251 Bank of Tyler, N.A. Tyler, Texas 7,030,000 Commonwealth Bank Hawthorne, California 11,596,428 Eagle Bank of Charleston Charleston, Illinois 11,122,587 Michigan National Bank-Ann Arbor Ann Arbor, Michigan 17,381,694 Citibank N.A. New York, New York 21,246,268 Farmers State Bank of Fulton County Lewistown, Illinois Table 123. bythe federaldepos|t|Nsurance _________ Name and location Class of bank I The Belle-Bland Bank' Bland, Missouri Date of closing or deposit assumption 1,835 July 27, 1982 Guaranty Bond State Bank Redwater, Texas NM 5,088 July 27, 1982 Unity Bank and Trust Company Boston, Massachusetts NM Mount Pleasant Bank and Trust Company Mount Pleasant, Iowa NM 7,200 July 30, 1982 First Security Bank of North Arkansas Horseshoe Bend, Arkansas 7,900 August 6, 1982 28,132 August 6, 1982 NM 3,800 August 27, 1982 Security Bank and Trust Company Cairo, Illinois NM 4,408 August 27, 1982 Western National Bank Santa Ana, California N 1,949 August 27, 1982 United Mutual Savings Bank* New York, New York NM Oklahoma National Bank and Trust Company* Oklahoma City, Oklahoma N NM Cedar Bluff Bank Cedar Bluff, Alabama NM The First National Bank of South Charleston South Charleston, West Virginia N Texas Bank of Amarillo Amarillo, Texas NM Bank of Quitman Quitman, Arkansas NM NM NM Other securities 30,394 254,839 505,136 33,057,744 2,188,378 1 , 100,000 47,138 Loans, dis counts, and overdrafts 2,086,086 5,813,980 4,493,213 414,875,683 23,519,609 8,615,480 2,616,435 179,028,477 771,237,976 5,501,631 9,135,244 48,786,042 145,075,046 179,700,126 765.968,104 37,231 5,416,528 202,728,317 416,977,666 79,713,000 420,321,000 623,611,000 2,355,531,000 157.142 September 24, 1982 23,103 October 3, 1982 20,778 October 15, 1982 4,300 November 2, 1982 10,016 6,126 November 12, 1982 4,400 December 10, 1982 2,300 Banking house, furni ture, and fixtures 42,447 240,126 76,220 5,283,339 601,228 439,946 142,894 December 16, 1982 Other real estate 21,656 483,755 399,290 198,467 141,812 67,319 247,163 103,537 7,591,842 573,787 11,882,484 110,514 10,671 14,602,467 3,650.271 4,275,000 5.615.000 20,317,000 1.838.000 'Merged with financial assistance from FDIC into operating banks to prevent probable failure. Other assets Total Deposits 11,494 69,235 34,350 23,236,959 1,014,004 327,533 540,713 3,168,192 8,235,912 6,722,599 516,799.497 30,379,581 16,281,082 3,830,804 3,439,985 8,108,342 6,264,397 470,445,835 26,919,093 16,034,328 3,645,040 The Boston Bank of Commerce Boston, Massachusetts 50,000,000 Mercantile Texas Corporation Dallas, Texas 10,167,300 The Bank of Melbourne Melbourne, Arkansas First Bank and Trust Company Cairo, Illinois 16,232,018 | Commonwealth Bank Hawthorne, California 30,906,156 ! American Savings Bank New York, New York 8,185,815 The First National Bank and Trust Company of Oklahoma City Oklahoma City. Oklahoma 2,500,000 Syracuse Savings Bank Syracuse, New York 12,500,000 November 5, 1982 First Bank and Trust Company Redwater, Texas Hawkeye Bank and Trust Company Mount Pleasant, Iowa 7,462,864 November 5, 1982 3,900 Eagle Bank of Gasconade County Bland, Missouri 14,285,271 7,410,406 Mechanics Savings Bank* Elmira, New York 25,675,962 2,175,241 30,888,039 7,711,223 690,180 27,975,167 108.732.000 302.775.000 Receiver or liquidating agent or assuming bank 11,498,400 I First Bank and Trust Company I Hooks, Texas 6,700,000 N 11,403,968 851,815 16,952,276 2,464,463 278,687 9,331,532 29.955.000 20.895.000 FDIC disburse ments 11,640,300 Abilene National Bank* Abilene, Texas 740,361 971,940 917,606 15,366,980 1,151,095 3,905,176 ig g 2 1,754,147 5,357 235,754 402,037 296,784 24,780,325 1,763,455 1.825,628 483,624 First payment to depositors or disbursements by FDIC July 2, 1982 NM U.S. Govern ment obligations d u r | n g -CONTINUED Number of depositors or accounts The Bowie County State Bank Hooks, Texas Cash and due from banks c o r p o r a t i o n Union State Bank [ Cedar Bluff, Alabama Charleston National Bank Charleston, West Virginia 5,765,441 First Bank of Amarillo Amarillo, Texas 5,998,964 First National Bank of Cleburne County Quitman, Arkansas 8,955,359 Security Bank of Bollinger County Lutesviile, Missouri 6,278,823 First State Bank of Mooreland Mooreland, Oklahoma Other liabilities 30,104 194,746 100,000 11,929.353 1,336,665 6,576 41,870 34,617,708 1,021,964,091 890,159,730 101,532,156 443,398 18,458,029 15,207,374 3,561,142 11,547,821 261,414,853 171,660,989 83,033,065 12,634,433 980,360.833 789,387.775 155,804,041 13,193 6,557,004 6,621,157 499 13,791,175 689,056,595 550,485,712 116,402,499 26.115.000 674,726.000 578,366,000 8 8 , 201,000 77.992.000 3,402,959,000 2,779,664.000 585,970,000 Capital stock 300.000 286,990 120,625 10 , 000,000 210.000 686,275 85.600 220,000 9,440,000 63,110 Other capital accounts (601,897) (354,166) 237,577 24,424,309 1,913,823 (446,097) 58,294 30,272,205 (530,487) (2,719,201) 35,169,017 (127,762) 22,168,384 8,159,000 37,325,000 34 Table 123. INSURED BANKS REQUIRING DISBURSEMENTS BY THE FEDERAL DEPOSIT INSURANCE CORPORATION DURING 1982-CONTINUED Case Num ber Cash and due from banks 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 24.955.000 3,182,912 1,282,921 992,611 1,462,019 1,119,714 1,540,410 2,036,523 882,266 236,659 1,287,883 957,812 550,917 2,741,127 21.871.000 290,823 946,372 1,934,505 48.582.000 9.853.000 3.439.000 1,230,431 1,123,928 926,104 3,273,435 679,253 733,371 U.S. Govern ment obliga tions 79.304.000 18,239,472 1,153,446 2,443,718 227,340 1,796,188 1,399,798 1,144,251 728,605 442,703 3,208,355 4,191,651 3,872,000 474,135 1,199,880 200,000 48.925.000 11.447.000 10.750.000 1,109,104 1,349,563 1,014,428 200,223 1,217,058 1,919,664 Other securi ties Loans, dis counts, and overdrafts Banking house, furni ture, and fix tures 14,935,000 560,642,000 1,399,616,000 2,971,771 27,085,064 1,162,873 602,486 9,230,971 17,750 566,017 3,391,803 1,600,000 7,611,774 374,772 15,578,915 3,452,212 688,364 14,898,257 768,277 431,678 14,114,899 1,445,123 316.490 21,267,866 1,830,585 22,570 2,387,809 68,705 136,863 10,803,272 1,242,132 248,435 11,716,666 962,865 177,873 6,032,307 1,138,081 259,140 20,074,684 7,875 3.357.000 354.325.000 42.456.000 413,240 10,819,024 705,451 142.490 8,032,332 325.000 1,097,562 17,322,310 77,600 8.363.000 591.213.000 113,329,000 3.036.000 104.157.000 15.850.000 804,000 34,272,000 4,769,000 377,030 9,467,455 1,194,891 1,327,185 8,353,235 10,893,886 160,088 7,587,702 200.000 139,331 8,644,804 5,013,604 285,347 9,616,343 2,959,718 182,386 6,889,886 45,000 . Other real estate Other liabili ties Deposits Total Other assets 130,696 33.248.000 2,112,801,000 1,956,772,000 101,000 1,460,637 48,666,481 54,409,786 1,433,869 333,825 496,778 12,743,781 13,596,883 49,706 1,259,603 120,145 8,958,980 9,292,915 162,500 136,266 355,894 10,063,687 10,997,599 1,632,547 63,919 3.870.000 18,569,130 22,812,982 391,725 99,456 2,553,553 16,769,296 19,641,942 1,189,078 557,556 2,227,250 15,122,704 18,861,465 338,594 494,648 391,207 27,291,025 28,849,031 2,923,115 228,911 149,573 3,933,896 4,272,275 351,021 61,260 13,663,598 14,629,439 311,283 119,401 539,476 12,900,749 14,793,665 390,960 74,224 1,041,740 10,488,147 11,245,222 79,353 58,336 373,484 25,777,449 28,322,134 1,019,203 28.454 310.105.000 107,976,000 446.042.000 18.749.000 1,412,000 866,297 11,874,966 13,375,425 606,297 66.455 11,014,592 11,705,896 457,475 602,347 91,941 20,681,823 22,698,876 1,902,535 164,364 41.411.000 777.890.000 832.858.000 121,000 22.325.000 7.277.000 133.586.000 149.949.000 5,169,000 437.000 4.222.000 50,608,000 55,254,000 989,000 231.000 212,755 13,053,224 14,002,242 343,740 279,591 26,934,894 26,811,147 2,447,677 1,315,673 255,503 9,187,855 10,548,558 660,236 2,500 16,798,386 17,565,228 126,788 167,043 406,672 14,536,095 15,308,572 343,393 207,460 344,346 9,917,247 10,855,237 1,084,930 Capital stock 1.340.000 250.000 770.000 847,177 350.000 916,500 1,511,511 400.000 50,000 200.000 200,000 2.180.000 340.000 2,620,000 280.000 300.000 2,585,310 1,500,000 597.000 1,000,000 300.000 100.000 200,000 250,000 Other capital ac counts 2,942,668 106,324 (556,210) (269,159) 23,852 (597,407) 766.799 138,806 765,841 1,153,440 (2,464,665) 1,831,201 25.341.000 354,162 391,304 (660,198) 13.557.000 7,586,000 424,000 139,263 (1,123,747) 805,200 664,342 165,805 343,644 35 DEPOSITORS DEPOSITS. .N O DISBURSEMENTS IN FAILED BANKS R E D W IN G DISBURSEMENTS B , THE rn n p n R A T IO N . 1934-1982 PAYOFF OB _______ _ ASSUMPTION, ll( n T ir ,M AMOUNT a m o i 1NT OF DEPOSIT DEPOSIT DEPOSITS, AND STATE Number of depositors1 Number of banks Disbursements by FDIC1 (in thousands of dollars) Deposits1 (in thousands of dollars) Advances and expenses2 Principal disbursements Assump tion cases | Payoff Total cases Classification 620 All banks Class of bank N a tio n a l.................... State member F.R.S. Nonmember F.R.S. 319 40 117 39 464 12 267 9 25 69 75 74 60 43 15 Payoff cases 30110 689,206 5,853,635 I 19,958,566 77 27 19710 1,675,669 482,001 4,385,071 141.229 91,650 456,327 1,534,440 390,451 3,928,744 20 5 2 1 1 5 3 4 4 2 3 2 2 5 2 1 4 3 1 5 2 7 5 7 4 3 9 7 6 1 6 4 13 16 7 10 10 10 42 I. S ■ a s s 's . in s s — i. u ““ I . X 3,784,288 645,734 14,443,620 1,968 9,091 11,241 14,960 10,296 32.738 5,657 14,730 1,816 6,637 456 6,503 4,702 1,163 4,156 2,593 6,930 8,936 23,444 23,438 42,889 774 10,878 9,012 | 33,474 74,511 ! 20,480 I 25,795 39,902 18,859 108 1,286 12,631 16,454 47,499 538,917 S K 7,649,628 II 675,648 973,980 13,412 435,245 | 332,846 34,028 1308,774 183,804 451,280 338,896 5,346 1,696 6,370 213,794 31,224 190,227 3,516,650 485,308 3,647,670 941 8,891 14,460 19,481 30,479 67,770 74,134 23,880 10,825 7.172 1,503 1,768 265 1,724 2,990 2,552 3,986 1,885 1,369 5,017 913 6,784 3,458 1,031 3,026 I,835 4,765 4,229 16,267 18,389 49,388 125,034 136,773 14,987 17,369 I 5,8 1,4591 5,695 347 7,040 10,674 5,475 5,513 3,408 3,170 18,262 998 5,450 6,628 4,084 972 102,749 22,524 31,122 21,3321 57,547 945,501 1,575,832 299,672 846,000 205,100 852,868 98,065 199,846 3,778,523 9,369,462 - - | Assump tion cases6 « ' — 941 6,026 7,735 12,365 9,092 26,196 4,895 12,278 1,612 5,500 404 4,438 2.795 1,031 2.796 I,835 4,765 6,201 6,201 19.172 13,744 II,4 3 1 8,732 8,097 5,586 37,617 49,334 162,163 16,255 432,654 2,261,804* 302,976 559,269 21,825 498,276 79,973 133,868 871,994 1,845,755 19,172 13,744 10,958 735 8,097 11 200 87 ' 5,586 30,021 I 20,005 I 108,373 818 9,959 13,882 35,516 290,659 166 524 127 195 428 145 665 51 106 473 7,997 25,992 II,4 6 2 272 934 905 4,902 17,603 17,237 1,479 1,076 72 37 96 393 23() ’ 7,596 29,329 53,790 16,255 16,782 “ “ 43 108 67 103 93 162 89 50 38 53 9 2,865 6,725 7,116 21,387 41,574 69,239 11,602 9,213 1,672 1,099 1,768 265 1,724 2,990 2,552 3,986 1,885 1,369 5,017 913 2,346 66C 20 38 51 I 82 I 154 349 599 640 35 242 31 123 I,61 3 ' 1,114 4,481 1,988 II,5 7 8 301 702 I 811 398 1,677 1,158 415,872 171,532 2,261,804 28,308 276,984 ' 1,4471 1,415 | 38,996 547,807 3,637 21,825 33,194 "5 0 497,458 6,458 299 70,015 8,647 480 119,986 67,670 438 836,478 7,197 2,176 1,555,096 “ " “ “ « ^ prjce a( termination of liquidation. « tZ Z H — merged - financial Note: Due to rounding differences, components may not add to totals. Total Payoff cases5 » < *« . - « • inclu d es estimated additional disbursements m actwe ? 629,253 44,023 411,648 6' 6 ,o December 31. » » 2 . W 4,413,541 689,757 14,855,268 Assump tion cases4 Payoff 1,084,924 I 18,873,642 1,968 15,767 15,767 13,320 12,324 32,331 44,655 1 27,508 45,793 43,225 89,018 27 33,349 56,239 74,148 130,387 25 59,684 159,673 44,288 203,961 24 157,772 302,549 90,169 392,718 28 142,430 235,694 20,667 256,361 24 29,717 34,411 I 38,594 73,005 7 19,185 54,971 I 5,717 60,688 14 12,525 10,454 16,917 27,371 1 I,915 4,588 899 5,487 1 5,695 12,483 12,483 1 347 1,383 I,383 1 7,040 10,637 10,637 5 10,674 18,540 18,540 3 5,475 5,671 I 5,671 4 5,513 6,366 I 6,366 4 3,408 5,276 5,276 2 3,170 6,752 5,752 3 18,262 24,469 24,469 2 998 1,811 I 1,811 2 II,9 5 3 9,710 | 8,080 17,790 1 11,330 9,732 5,465 15,197 1,163 2,338 2,338 8,240 5,207 4,380 9,587 2,593 3,073 3,073 6,930 11,171 II,1 7 1 8,936 8,301 8,301 23,444 36,433 36,433 23,438 19,934 19,934 43,861 I,454 14,363 15,817 2 103,523 94,412 1,012 95,424 6 10,878 4,729 4,729 22,524 12,850 12,850 3 40,134 20,830 I 6,544 I 27,374 5 54,806 II,0 3 0 20,402 31,432 3 132,058 40,100 | 31,850 71,950 1 20,480 23,655 23,655 971,296 341,317 8,382 349,699 3 1,575,832 704,283 704,283 4 339,574 88,442 21,925 110,367 10 864,859 332,485 8,246 I 340,731 13 205,208 95,524 24 95,548 854,154 363,868 516 364,384 6 110,696 38,288 3,740 I 42,028 7 216,300 72,888 5,376 78,264 7 3,826,022 676,368 16,940 ! 693,308 810 9,908,379 39,605 I 1,924,763 1,964,368 3510 24 42 50 50 32 19 Assump tion cases Payoff cases Total 6,542,841 Year7 1934 1935 1936 1937 1938 1939 1940 194 1 1942 1943 1944 1945 1946 1947 1948 1949 1950 195 1 1952 1953 1954 1955 1956 1957 1958 1959 1960 196 1 1963 1964 1965 1966 1967 1968 1969 1970 197 1 1972 1973 1974 1975 1976 1977 1978 1979 1980 198 1 1982 Assump tion cases — — < - M — » P— * * « — - * » — - — i aj P— » < « "' T_hi„ 124 DEPOSITORS DEPOSITS, AND DISBURSEMENTS IN FAILED BANKS REQUIRING DISBURSEMENTS BY THE a a M^fi^R^UPR^EtY'cLASS^F^BANH^YEAI^Q’F ^DEt^SI^ PAYOFF Number of banks ASSUMPTION, AMOUNT OF DEPOSITS, AND STATE Disbursements by FDIC1 (in thousands of dollars) Deposits1 (in thousands of dollars) Number of depositors1 Advances and expenses2 Principal disbursements Assump tion cases Classification Payoff cases Assump tion cases4 Assump tion cases Assump tion cases Assump tion cases6 Banks with deposits ol: Less than $100,000 107 S100,000 to $250,000 109 $250,000 to $500,000 I 62 $500,000 to $1,000,000...............| 72 $1,000,000 to $2,000,000...............| 60 $2 ,000,000 to $5,000,000...............| 68 $5 ,000,000 to $10,000,000 ............ | 48 $10,000,000 to $25,000,000 ............ 1 45 $25,000,000 to $50,000,000 ............ 1 17 $5 0 ,000,000 to $100,000,000 .......... 1 8 $100,000,000 to $500,000,000 ..........1 11 $500,000,000 to $1,000,000,000. $1,000,000,000 or m o r e ................. State Alabama......................... Arizona........................... Arkansas ...................... C alifo rnia...................... C o lo ra d o ...................... Connecticut, Florida . G e o rg ia ......................... j Idaho .................... Illin o is ................. Indiana........................... Io w a ............................. Kansas........................... K e n tu cky...................... | Louisiana............ 154 173 611 2,352 4,089 11,543 19,203 26,220 35,457 34,303 62,255 16,392 222,490 4,512 603 589 5,985 3,221 10 2 H 8 10 887 2,500 5,428 14 24,524 20 384 1,562 4,735 640 15 26 8,374 665 371 3,293 15,312 63 Maine . . Maryland Massachusetts M ic h ig a n ...................... | Minnesota Mississippi M issouri.........................| Montana. Nebraska New Hampshire............ New Jersey.................... New Y o rk ...................... I 1,917 1,420 21 54 8 24,772 233,709 1 44 35 ------------------- ---------------------- - — S S S “ in , * 2 w i r e d » ifsrsiiK s? “ « * >» - ,< * » ! « - « » * «• ow— «• « • * » • « > - . — * •• “ i°'“ Assumpt!on cases" includes banks merged with financial assistance from FDIC to prevent probable failure. Note: Due to rounding differences, components may not add to totals. - * * — ■“ 126n"“ — - — * i”a ™ “ 37 REQUIRING D,SBURSEMENTS BYTHE BANKS GROUPED BY CLASS OF BANK, YEAR OF DEPOSIT PAYOFF OR DEPOSIT ASSUMPTION, AMOUNT OF DEPOSITS, AND STATE Number of banks Number of depositors1 Deposits’ (in thousands of dollars) Disbursements by FDIC1 (in thousands of dollars) Advances and expenses2 Principal disbursements Classification North Carolina. . . . North Dakota O h io ............ Total Payoff cases 2 5 19 11 7 Oklahoma............ Oregon................. Pennsylvania.. . . South Carolina . . South Dakota . .. Tennessee .......... Texas.................... U ta h .................... Vermont............... Virginia ............... Assump tion cases 2 3 9 710 1 3 8 2410 1 2 22 1 11 35 1910 7 2 1 1 4 6 210 W ash in g to n......... West Virginia 3 2 Wisconsin.......... 20 13 W yo m ing ............... 1 Other areas Virgin Islands Puerto R ic o .......... Total Payoff cases Assump tion cases Payoff cases Total Assump tion cases Total Payoff cases3 Assump tion cases4 Payoff cases- Assump tion cases6 10,408 17,016 21,251 3,677 9,673 7,585 6,731 7,343 13,666 3,266 14,258 102,838 1,421 11,980 2,345 1,845 2,278 100,493 2,387 11,757 90,621 1,156 10,498 1,610 1,231 1,259 89,011 23 160 7 179 203 6,746 78,609 6,919 602,590 68,080 12,515 44,683 1,230 43,828 403 11,412 33,926 5,689 558,762 67,677 1,103 638.565 9,921 2,053,679 113,553 2,988 485,395 1,368 14,340 136 2,862 153,170 8,553 2,039,339 113,417 126 254,121 7,965 493,348 60,650 2,411 235,927 986 10,133 136 2,388 18,194 6,979 483,215 60,514 23 1,913 973 648 11,689 12,242 9 150,515 180,234 3,254 11,057 40,484 17,734 82,280 132,781 97,954 3,254 2,370 27,846 418,634 582,702 5,992 3,725 30,523 40,160 149,324 378,474 433,378 5,992 350 22,871 191,049 229,742 3,538 3,445 18,033 37,448 103,556 317 1,939 3,259 3,867 153,601 126,186 3,538 186 14,166 143,479 22,216 43,508 3,212 552,024 50,422 112,627 2,033 552,024 48,416 106,661 2,033 82,464 34,213 117,992 1,458 5,096 82,464 32,755 112,896 371,840 14,229 804.565 143,479 30,562 62,247 3,212 11,073 371,840 8,687 12,638 8,346 18,739 11,073 3,375 7,652 2,006 5,966 14,229 804,565 202 8,712 370,3198 202 8,712 11 75 26 16,644 6,943 300 21 22 305 816 166 54 536 402 13,875 19 988 370,319 17,503 ’ Adjusted to December 31, 1982. In assumption cases, number of depositors refers to number of deposit accounts ,s- “ °uum * ■ — « *» « ■ *-* * — inclu d es estimated additional disbursements in active cases. ^Excludes excess collections turned over to banks as additional purchase price at termination of liquidation. These disbursements are not recoverable by the Corporation; they consist almost wholly of field payoff expenses exepenseesadVanCeS t0 ^ 3SSetS liqUida,i° n eXpenSeS ° f $347' 6° 2 th° USand' a" ° f WhiCh have been ,ully recovered ,he CorP°ratio" S87.643 thousand of nonrecoverable ,0r eaCh year relate 10 Cases 0CCUmn9 durin9 that year' including dist)ursements made in subsequent years. I n tWs teble.aSSetS ° ' BanC° EC° n0miaS Were Purchases outri9ht by the Corporation. Disbursements in the case are included in table 126 under “ Other disbursements” and are not included ' “ "Assumption cases” includes banks merged with financial assistance from FDIC to prevent probable failure. Note: Due to rounding differences, components may not add to totals. 38 Table 125 RECOVERIES AND LOSSES BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ON PRINCIPAL DISBURSEMENTS FOR PROTECTION OF DEPOSITORS, 1934-1982 (Amounts in thousands of dollars) Liquidation status and year of payoff or deposit assumption Number of banks 7,649,628 T o t a l.......... Number of Losses1 | banks Estimated additional recoveries Recoveries to Dec. 31, 1982 Principal disburse ments Status Active.......... Terminated . 319 1,775,520 32,956 288 .... .... .... .... .... 1939 1940 .... 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 7,048 2 1 1 5 3 1,503 1,768 265 1,724 2,990 1,462 1,768 265 1,666 2,349 4 4 2 2,552 3,986 1,885 1,369 5,017 2,183 2,601 1,885 577 5,017 913 6,784 3,458 1,031 3,026 654 6,554 3,245 1,031 2,998 7 1,835 4,765 6,201 19,172 13,741 1,738 4,765 4,699 18,886 12,171 5 7 4 3 9 11,431 8,732 8,097 5,586 37,617 7,339 8,255 7,087 5,575 37,526 2 2 5 . . . 1954 1955 1956 1957 1958 . . . 1959 1960 1961 1963 1964 . .. 1965 1966 1967 1968 1969 .. . 1970 1971 1972 1973 1974 . .. ... 2 1 ... ... 4 3 . .. 1980 1981 1982 7,172 3 . . . 1975 1976 1977 1978 1979 5 1 5 ... ... 2 ... .. . . .. ... .. . .. .. .. .. .. 13 16 6 7 10 .. .. .. .. .. 10 10 42 .. .. . . ' * 50 50 941 6,026 7,735 12,365 9,092 7,152 3,796 591 688 123 32 19 8 6 4 26,196 4,895 12,278 1,612 5,500 40 1 404 8 64 57 1,155 ! 54,798 51,577 288 193 1,226 67,597 I 328 13,425 42,815 3,329 62,475 7,081 18,695 22,514 1,160 5,885 7,833 133,86?! 871,99-!I 1,845,75!> 79,461 269,878 94,918 33,447 45,419 681,707 20,960 556,698 1,069,130 r s r r * ...— Note: Due to rounding differences, components may not add to totals. Estimated additional recoveries Estimated additional recoveries fRecoveries Number Principal disburse- t o Dec. 31, of 1982 Losses1 1 banks | ments3 | 271,411 77,868 301 I 6,973,980 4,516,581 726.791 | 1,730,608 271,411 58,352 19,516 97 204 6,686,583 287,397 4,242,624 273,957 726.791 11,717,168 13,440 2,865 6,725 7,116 21,387 1,932 5,730 6,090 20,147 41,574 69,239 11,602 9,213 1,672 40,219 66,025 11,225 8,816 I 1,672 326,369 1 I 27 25 24 28 24 7 14 1 3,903 479 1,010 12 82 188 270,856 493,940 17,336 429,916 65,060 s 9 24 42 302,976 j 559,269 21,825 498.276i 79,974I " 496,592 179,056 207 2,685 2,333 3,672 2.425 ’ Includes estimated losses in active cases. Not adjusted for interest or al s 31 Recoveries to Dec. 31, 1982 1 1 1 5 3 1,099 1,768 265 1,724 I 2,990 1,099 1,768 265 1,666 2,349 4 4 2 3 2 2,552 3,986 1,885 1,369 5,017 2,183 2,601 1,885 577 5,017 2 1 1 913 2,346 663 654 2,346 663 1 230 230 2 6 473 7,997 326 7,520 3 5 ’ 5,586 30,021 I 5,575 30,013 Losses1 1,502 286 911 659 48,982 49,334 161,914 162,163 13,874 16,255 i 432,654 | 310,259 2,261,804 2,209,899 7 6 1 6 4 Principal disburse ments2 675,648 1,808,476 Year4 1934 1935 1936 1937 1938 Deposit assumption cases Deposit payoff cases All cases 64 45 1,155 11 272 193 1,226 3 1 3 4 ! 20,005 108,373 19,989 108,361 12 293,488 415,872 i 2,261,804 2,209,899 54,787 51,577 67,597 328 129 739 10 13 6 6 7 276,984 547,807 | 21,825 497,458 j 70,015 245,510 484,810 17,336 429,343 57,127 12,861 42,383 3,329 62,359 5,794 18,613 20,614 1,160 5,756 7,094 1.810 1,217 48,009 7 8 35 119,986 836.4781s 1,555,096 s 72,040 255,167 94,918 28,796 25,830 439,057 19,150 555,481 1,021,121 564 432 82 1,900 116 1,287 4,651 19,589 242,650 lowable return, which was collected in some cases in which the disbursement was fully recovered. «...— * '»»»» * » F»c *».— — . 39 Table 126. ANALYSIS OF DISBURSEMENTS, RECOVERIES, AND LOSSES IN DEPOSIT INSURANCE TRANSACTIONS, JANUARY 1, 1934-DECEMBER 31, 1982 (In thousands) Type of disbursement Disbursements Recoveries1 Losses $8,611,803 $6,667,979 $1,943,824 All disbursements— total Principal disbursements in mergers, deposit assumption and payoff cases— total 7,649,628 5,841,152 1,808,476 Loans and assets purchased in liquidations (301 mergers and deposit assumption cases):3 To December 31. 1982........................................................................................................................................................... 5,420,896 4,334,042 480,070 606,784 Transactions to facilitate deposit assumptions, mergers, or consolidations:4 To December 31, 1982........................................................................................................................................................... 1,553,084 182,538 246 722 1,123,824 666,101 9,547 326,369 271 411 77,868 448.657 347,602 101,055 347,602 87,643 13,412 347,602 513,518 479,225 34,293 10,552 6,257 192 4,103 54,964 21,014 6,562 27,388 Deposits paid (319 deposit payoff cases):5 To December 31, 1982........................................................................................................................................................... Advances and expenses in deposit assumption and payoff cases— t o t a l ............................................................................. Expenses in liquidating assets: Field payoff and other insurance expenses in 319 deposit payoff cases6 ............................................................................. Other disbursements— total Corporation purchases: To facilitate termination of liquidations: To December 31, 1982........................................................................................................................................................ Estimated additional............................................................................................................................................................. To purchase assets from operating insured banks: To December 31, 1982........................................................................................................................................................ Estimated additional............................................................................................................................................................. Unallocated insurance expenses6 .............................................................................................................................................. Assistance to operating insured banks: To December 31. 1982 .......................................................................................................................................................... Estimated additional.................................................................................................................................................................. 'Excludes amounts returned to closed bank equity holders and $302.2 million of interest and allowable return received by FDIC. inclu d es collections and disbursements by the liquidators in the field, (1.5 billion), inclu d es $289.2 million of recorded liabilities at book value payable over future years. 4lncludes $681.9 million of recorded liabilities at present value expected to be payable over future years, inclu d es estimated amounts for pending and unpaid claims on active cases. 6Not recoverable. 87 643 13,412 2,802 445,200 2,802 90,200 355,000 40 Table 127. INCOME AND EXPENSES, FEDERAL DEPOSIT INSURANCE CORPORATION, BY YEAR, FROM BEGINNING OF OPERATIONS, SEPTEMBER 11, 1933 TO DECEMBER 31, 1982 (In millions) Income Year Total T o t a l................. $17,266.2 1982 ................. 1981 ................. 1980 ................. 1979 ................. 1978 ................. 1977 ................. 1976 ................. 1975 ................. 1974 ................. 1973 ................. 1972 ................. 1971 ................. 1970 ................. 1969 ................. 1968 ................. 1967 ................. 1966 ................. 1965 ................. 1964 ................. 1963 ................. 1962 ................. 1961 ................. 1960 ................. 1959 ................. 1958 ................. 1957 ................. 1956 ................. 1955 ................. 1954 ................. 1953 ................. 1952 ................. 1951 ................. 1950 ................. 1949 ................. 1948 ................. 1947 ................. 1946 ................. 1945 ................. 1944 ................. 1943 ................. 1942 ................. 1941 ................. 1940 ................. 1939 ................. 1938 ................. 1937 ................. 1936 ................. 1935 ................. 1933-34 2,524.6 2,074.7 1,310.4 1,090.4 952.1 837.8 764.9 689.3 668.1 561.0 467.0 415.3 382.7 335.8 295.0 263.0 241.0 214.6 197.1 181.9 161.1 147.3 144.6 136.5 126.8 117.3 111.9 105.7 99.7 94.2 88.6 83.5 84.8 151.1 145.6 157.5 130.7 121.0 99.3 86.6 69.1 62.0 55.9 51.2 47.7 48.2 43.8 20.8 7.0 Deposit insurance assessments1 $7,744.1 1,012.7 921.9 430 8 356.4 367.0 319.4 296.5 278.9 302.0 246.0 188.5 175.8 159.3 144.0 132.4 120,7 111.7 102.2 93.0 84.2 76.5 73.4 79.6 78.6 73.8 69,1 68.2 66.1 62.4 60.2 57.3 54.3 54.2 122.7 119.3 114.4 107.0 93.7 80.9 70.0 56.5 51.4 46.2 40.7 38.3 38.8 35,6 11.5 (4) Expenses and losses Investment and other sources2 $9,522.1 1,511.9 1,152.8 879.6 734.0 585.1 518.4 468.4 410.4 366.1 315.0 278.5 239.5 223.4 191.8 162.6 142.3 129.3 112.4 104.1 97.7 84.6 73.9 65,0 57.9 53.0 48.2 43.7 39.6 37.3 34.0 31.3 29,2 30.6 28.4 26.3 43.1 23.7 27.3 18.4 16.6 12.6 10.6 9.7 10.5 9.4 9.4 8.2 9.3 7.0 Total Deposit insurance losses and expenses Interest on capital stock3 Administrative and operating expenses Net income added to deposit insurance fund4 $3,495.3 $1,899.0 $80.6 $1,515.7 $13,770.9 999.8 848.1 83.6 93.7 148.9s 113.6 212.35 97.5 159.2 108.2 59,7 60.3 46.0 34.5 29.1 27.3 19.9 22.9 18.4 15.1 13.8 14.8 12.5 12.1 11.6 9.7 9.4 9.0 7.8 7.3 7.8 6.6 7.8 6.4 7.0 9.9 10.0 9.4 9.3 9.8 10.1 10.1 12.9 16.4 11.3 12.2 10.9 11.3 10.0 869.9 720.9 (34.6) (13.1) 45.6 24.3 31.9 29.8 100.0 53.8 10.1 13.4 3.8 1.0 0.1 2.9 0.1 5.2 2.9 0.7 0.1 1.6 0.1 0.2 0.1 0.3 0.3 0.1 0.1 0.8 1.4 0.3 0.7 0.1 0.1 0.1 0.1 0.2 0.5 0.6 3.5 7,2 2.5 3.7 2.6 2.8 0.2 0.6 4.8 5.8 5.8 5.8 5.8 5.8 5.8 5.8 5.8 5.8 5.8 5.8 5.8 5.6 129.9 127.2 118.2 106.8 103,3 89.3 180.4s 67.7 59.2 54.4 49.6 46.9 42.2 33.5 29.0 24.4 19.8 17.7 15.5 14.4 13.7 13.2 12.4 11.9 11.6 9.6 9.1 8.7 7.7 7.2 7.0 6.6 6.4 6.1 5.7 5.0 4.1 3.5 3.4 3.8 3.8 3.7 3.6 3.4 3.0 2.7 2.5 2.7 4.26 1,524.8 1,226 6 1,226.8 996.7 803.2 724.2 552.6 591 8 508.9 452.8 407.3 355.0 336.7 301.3 265.9 235.7 221.1 191.7 178.7 166.8 147.3 132.5 132.1 124.4 115.2 107.6 102.5 96.7 91.9 86.9 80.8 76.9 77.0 144.7 138.6 147.6 120.7 111.6 90.0 76.8 59.0 51.9 43.0 34.8 36.4 36.0 32.9 9.5 -3 .0 1For the period from 1950 to 1982 inclusive, figures are net after deducting the portion of net assessment income credited to insured banks pursuant to provisions of the Federal Deposit Insurance Act of 1950, as amended. Assessment credits to insured banks these years amount to $6,554 million. in c lu d e s S93.2 million of interest and allowable return received on funds advanced to receivership and deposit assumption cases and S209 million of interest on capital notes advanced to facilitate deposit assumption transactions and assistance to open banks. 3Paid in 1950 and 1951, but allocated among years to which it applied. Initial capital of $289 million was retired by payments to the U.S. Treasury in 1947 and 1948. 4Assessments collected from members of the temporary insurance funds which became insured under the permanent plan were credited to their accounts at the termination of the temporary funds and were applied toward payment of subsequent assessments becoming due under the permanent insurance fund, resulting in no income to the Corporation from assessments during the existence of the temporary insurance funds. in c lu d e s net loss on sales of U.S. Government securities of $105.6 million in 1976 and $3.6 million in 1978. 6Net after deducting the portion of expenses and losses charged to banks withdrawing from the temporary insurance funds on June 30, 1934. 41 Table 128. PROTECTION OF DEPOSITORS OF FAILED BANKS REQUIRING DISBURSEMENTS BY THE FEDERAL DEPOSIT INSURANCE CORPORATION 1934-1982 Item All cases (620 banks) Number of amount Deposit payoff cases (319 banks) Deposit assumption cases (301 banks) Percent Number of amount Percent 6,542,841 100.0 689,206 100.0 5,853,635 100.0 6,531,478 99.8 677,843 98.4 5,853,635 100.0 FDIC2 .............................................................................. offset4.............................................................................. security or preference5 ................................................ asset liquidation6 .......................................................... 6,483,007 41,703 3,361 3,407 99.1 6 .1 1 629,3723 41 703 3,361 3 407 91.3 6 1 5 5 5,853,635 100.0 Full recovery not received as of December 31, 1982 .......... 11,363 .2 11,363 1.6 Terminated ca ses.................................................................... Active cases.............................................................................. 3,842 7,521 .1 1 3,842 7 521 6 1 1 Number of depositors or accounts— to ta l' ............................... Full recovery received or available From From From From Amount of deposits (in thousands)— total Paid or made a v a ila b le ............................................................. By By By By FDIC7 ................................................................................... offset8................................................................................... security or preference9 ..................................................... asset liquidation1 0 ............................................................. Not paid as of December 31, 1982 Terminated ca s e s .................................................................... Active cases" ......................................................................... Number of amount Percent 19,958,566 100.0 1,084,924 100.0 18,873,642 100.0 19,737,546 98.9 863,904 79.6 18,873,642 100.0 19,527,219 69,437 86,989 53,901 97.8 .3 .4 3 653,5777 69 437 86 989 53 901 60.2 64 8 0 5 0 18,873,642 100.0 221,020 1.1 221,020 20.4 3,245 217,775 .0 1.1 3,245 217,775 3 20 1 'Number of depositors in deposit payoff cases; number of accounts in deposit assumption cases. 2Through direct payments to depositors in deposit payoff cases; through assumption of deposits by other insured banks facilitated by FDIC disbursements of 36,010,412 thousand, in mergers and deposit assumption cases. inclu d es 64,672 depositors, in terminated cases, who failed to claim their insured deposits (see note 7). ■•Includes only depositors with claims offset in full; most of these would have been fully protected by insurance in the absense of offsets. Excludes depositors, paid in part by the FDIC; whose deposit balances were less than the insurance maximum. 6The insured portions of these depositor claims were paid by the Corporation. 'Includes $583 thousand unclaimed insured deposits in terminated cases (see note 3). inclu d es all amounts paid by offset. inclu d es all secured and preferred claims paid from asset liquidation; excludes secured and preferred claims paid by the corporation. ' “ Includes unclaimed deposits paid to authorized public custodians. "Includes $169,766 thousand representing deposits available, expected through offset, or expected from proceeds of liquidation. 42 Table 129. INSURED DEPOSITS AND THE DEPOSIT INSURANCE FUND, 1934-1982 (In millions) Deposits in insured banks Year (December 31) Insured' 1,544,697 1,409,322 1,324,463 1,226,943 1,145,835 1,050,435 941,923 875,985 1,134,221 988,898 948,717 808,555 760,706 692,533 628,263 569,101 Deposit insurance fund Ratio of deposit insurance fund to— Total deposits Insured deposits .89 .87 .83 .80 .77 76 .77 .77 1,21% 1,24 1.16 1.21 1.16 1.15 1.16 1.18 62.5 60.7 60.2 61.34 64.1 6,124.2 5,615.3 5,158,7 4,739.9 4,379.6 .73 .73 .74 .78 .80 1.18 1.21 1,23 1.274 1.25 313,085 296,701 261,149 234,150 209,690 63.1 60.2 58.2 58.4 55.6 4,051.1 3,749.2 3,485.5 3,252.0 3,036.3 .82 .76 .78 .81 .80 1.29 1,26 1.33 1.39 1.45 348,981 313.3042 297,5483 281,304 260,495 191,787 177,381 170,2104 160.3094 149,684 55.0 56.6 57.2" 57.04 57.5 2,844.7 2,667.9 2,502.0 2,353.8 2,222.2 .82 .85 .84 .84 .85 1.48 1.50 1.47 1.474 1.48 10,000 10,000 10,000 10,000 10,000 247,589 242,445 225,507 219,393 212,226 142,131 137,698 127,055 121,008 116,380 57.4 56.8 56.3 55.2 54.8 2,089.8 1,965,4 1,850.5 1,742.1 1,639.6 .84 .81 .82 .79 .77 1.47 1.43 1.46 1.44 1.41 ................................ ................................ ................................ ................................ ................................ 10,000 10,000 10,000 10,000 10,000 203,195 193,466 188,142 178,540 167,818 110,973 105,610 101,841 96,713 91,359 54.6 54.6 54.1 54.2 54.4 1,542.7 1,450.7 1,363.5 1,282.2 1,243.9 ,76 .75 .72 .72 .74 1.39 1.37 1.34 1.33 1.36 1949 1948 1947 1946 1945 ................................ ................................ ................................ ................................ ................................ 5,000 5,000 5,000 5,000 5,000 156,786 153,454 154,096 148,458 157,174 76,589 75,320 76,254 73,759 67,021 48.8 49.1 49.5 49.7 42.4 1,203.9 1,065,9 1,006.1 1,058.5 929 2 .77 69 .65 .71 59 1.57 1.42 1.32 1.44 1,39 1944 1943 1942 1941 1940 ................................ ................................ ................................ ................................ ................................ 5,000 5,000 5,000 5,000 5,000 134,662 111,650 89,869 71,209 65,288 56,398 48,440 32,837 28.249 26,638 41.9 43.4 36.5 39.7 40.8 804.3 703.1 616.9 553.5 496.0 60 63 69 .78 .76 1.43 1.45 1.88 1.96 1.86 1939 1938 1937 1936 1935 1934 ................................ ................................ ................................ ................................ ................................ ................................ 5,000 5,000 5,000 5,000 5,000 5,000s 57,485 50,791 48,228 50,281 45,125 40,060 24,650 23,121 22,557 22,330 20,158 18,075 42.9 45.5 46.8 44.4 44.7 45.1 452.7 420.5 383.1 343.4 306.0 291.7 .79 .83 .79 .68 68 .73 1.84 1.82 1.70 1.54 1.52 1.61 $100,000 100,000 100,000 40,000 40.0007 40.0006 40,000 40,000 Total' Percentage of insured deposits $13,770.9 12,246.1 11,019.5 9,792.7 8,796.0 7,992.8 7,268.8 6,716.0 coverage 1982 1981 1980 1979 1978 1977 1976 1975 ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ 1974 1973 1972 1971 1970 ................................ ................................ ................................ ................................ ................................ 40,000 20,000 20,000 20,000 20,000 833,277 766,509 697,480 610,685 545,198 520,309 465.600 419,756 374,5684 349,581 1969 1968 1967 1966 1965 ................................ ................................ ................................ ................................ ................................ 20,000 15,000 15,000 15,000 10,000 495,858 491,513 448,709 401,096 377,400 1964 1963 1962 1961 1960 ................................ ................................ ................................ ................................ ................................ 10,000 10,000 10,000 10,000 10,000 1959 1958 1957 1956 1955 ................................ ................................ ................................ ................................ ................................ 1954 1953 1952 1951 1950 73.4 70.2 71.6 65.9 66.4 65.9 66.7 65.0 'Deposits in foreign branches are omitted from totals because they are not insured. Insured deposits are estimated by applying to the deposits in the various types of accounts at the regular Call dates, the percentages insured as determined from the Summary of Deposits survey submitted by insured banks. December 20, 1963. 3December28, 1962. ■•Revised. 5lnitial coverage was $2,500 from January 1 to June 30, 1934. 6$100,000 for time and savings deposits of in-state governmental units provided in 1974. 7$100,000 for Individual Retirement accounts and Keogh accounts provided in 1978. 43 Index Accrual A ccou ntin g Current requirem ents 8 Applications Statistics on 1982 applications by type Table of: Deposit insurance applications Mergers New Branches 9 Assessment Credits Credits 1982 com pared to 1981 Effect of savings bank m ergers Effective assessment rate 1981-1982 3 5 3 2 2 2 2 5 6 Mutual savings bank failures, 1982 3-5 Cease and Desist Orders Cease and desist orders and actions to correct specific unsafe or unsound practices or violations of law 1978-1982 10 Sum mary of actions 1981, 1982 10 Com m ercial Banks Failures during 1982 Open bank assistance during 1982 5 5 Deposit Insurance National Bank Established to replace Penn Square Bank, O klahom a City, O klahom a Discount Rate Changes in 1982 Employees of FDIC Total em ployees Employees by Division Employees in W ashington O ffice Employees in Regional O ffices Employees in Field O ffices Employees assigned to Division of Bank Supervision Number of examiners Num ber of officia ls and employees December 1981 and 1982 6 15 14 13 18 G arn-St Germ ain D epository Institutions Act Im pact on regulatory agencies Provisions 8 8 Glass-Steagall Act FDIC policy statement on applica b ility to securities activities of subsidiaries of insured banks 7 Gross Expenses and Losses In adm inistrative expenses In closed banks and mergers 3 3 Insurance Fund G rowth during 1982 Income deposit insurance fund Liabilities deposit insurance fund 13 Interest Rates Changes in prim e during 1982 2 International Banking Applications received, 1982 Role of the FDIC 3 14 9 9 2 11 11 11 11 11 10 11 11 Investment P ortfolio Average m aturity Increase in market value Increase in par value Legislation and Regulations Legislation, 1982 Rules and regulations, 1982 Liquidation Reorganization of Division of Liquidation 3 3 3 26 27 7 Payments to Depositors Payment record, 1934-1982 Percentage of recovery throu gh 1982 Recovery by FDIC since 1934 Recovery rate fo r uninsured deposits, total and reasons fo r decrease in 1982 Penn Square Bank C ircum stances leading to closing Deposit Insurance National Bank established Largest deposit payoff in FDIC history Litigation Receiver’s certificates Status of creditors Sum m ary of assets CO 4-5 23 CD List of insured banks closed during 1982 requiring disbursem ents by Federal Deposit Insurance C orporation 12 CO Graph of failures 1934-1982 Financial Statements Assets of the FDIC A ud it opinion of General A ccounting O ffice Com parative statement of changes in financial position 1981-1982 Income and the deposit insurance fund Liabilities and the deposit insurance fund Notes to financial statements Decem ber 31, 1981 and Decem ber 31, 1982 4 O klahom a National Bank and Trust Com pany Assistance provided to facilitate acquisition by the First National Bank and T rust of O klahom a City, O klahom a CD 2 Fidelity M utual Savings Bank Merger of Fidelity Mutual Savings Bank, Spokane, W ashington into First Interstate of W ashington Net W orth Certificates Authorized by G arn-St Germain Use by FDIC 3-4 CD Deposits and losses in all insured banks requiring disbursem ents by Federal Deposit Insurance C orpora tion 1934-1982 (Chart) viii v iv vi 3-5 3-5 CD Com m ercial bank failures, 1982 Federal Deposit Insurance C orporation C hairm an’s statement Key personnel, W ashington O ffice O rganization chart Regions, map and key personnel M utual Savings Bank Failures during 1982 Mergers during 1982 Mergers w ith com m ercial banks, 1982 CO Bank Failures During 1982 Compared w ith 1940 Com pared w ith 1976 Com pared w ith 1979-1981 3 COCOCO 8 8 Farmers and M echanics Savings Bank Merger of Farmers and Mechanics Savings Bank, Minneapolis, M inne sota, in to M arquette National Bank, M inneapolis lO Bank Exam inations Augm ented by Integrated M onitor ing System Summary by types during 1982 8 CO 5 Mt. Pleasant Bank and Trust Com pany, M ount Pleasant, Iowa Deposits assumed by Hawkeye Bank and Trust, subsidiary o f Hawkeye Bancorporation, Des Moines, Iowa 5-6 Ruling on status of repurchase agreements 6 CO Abilene National Bank, Abilene, Texas Assistance provided to facilitate acquisition by M ercantile Texas C orporation, Dallas, Texas Due-on-Sale P rohibitions State provisions preempted by G arnSt Germain Act Problem Banks Num ber of banks on problem list, 1982 U niform Financial Institutions rating system 9 Receiver’s C ertificates Issued in Penn Square closing 6 Regulatory and A dm inistrative Initiatives Accrual accounting, current status Changes in processing applications fo r insurance, branches, and office relocations Delegation of approval au thority in routine mergers Increased reporting requirem ent on nonperform ing loans Net w orth certifica te program im plem ented Policy statem ent on Glass-Steagall Act Reorganization of Division of Liquidation Repurchase Agreem ents (REPOS) Determ ination by FDIC of status of Repos in Mt. Pleasant, Iowa bank Savings Bank Industry Cost of 1982 assisted mergers com pared with payoff costs Effect of mergers on assessment credits FDIC approach to savings bank problem s 9 8 7 7 7 8 7 7 6 5 5 4-5 44 Securities Transfer Agents Banks registered under Securities Exchange Act Num ber of transfer agents supervised 9 8 Statistical Tables Table 122 - Number and deposits of banks closed because of financial d ifficu ltie s, 1934-1982 Table 123 - Insured banks requir ing disbursem ents by the Federal Deposit Insurance Corporation during 1982 31 32--34 Table 124 - Depositors, deposits and disbursem ents in failed banks requiring disbursem ent by the FDIC 1934-1982 (banks grouped by class of bank, year of deposit payoff or deposit assum ption, am ount of deposits, and state) 35--37 Table 125 - Recoveries and losses by the FDIC on principal disbursem ents fo r protection o f depositors, 1934-1982 38 Table 126 - Analysis of disbursements, recoveries, and losses in deposit insurance transactions, January 31, 39 1934 -D ecem ber 31, 1982 Table 127 - Income and expenses, FDIC, by year, Septem ber 11, 1933 to December 31, 1982 40 Table 128 - Protection of depositors of failed banks requiring dis bursem ents by the FDIC 1934-1982 41 Table 129 - Insured deposits and the deposit insurance fund, 1934-1982 42 T rust Departm ents Fiduciary powers approved, 1982 Num ber supervised and assets 8 8 U niform Bank Perform ance Report Contents and distribution 8 I GDDDGI1IHHI1 □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ 7 □ □ □ □ □ □ □ □ D D i E
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