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R e s o tv in g T h e C ris is
R e s to rin g T h e C b n H d e n c e







/?fso/.</r/G"v n?i/sr co/?po/?^r/o/v^
Reso)vingTheCrists
RestoringTheConfMtnce

October 29,1993

Resolution Trust Corporation
Washington, D.C.
Sirs:
In accordance with the provisions of section 501 o f the Financial
Institutions Reform, Recovery, and Enforcement Act o f 1989, the
Resolution Trust Corporation is pleased to submit its Annual
Report for 1992. Financial operating plans and forecasts have
been provided separately.
Very truly yours,

Roger C. Altman
Chief Executive Officer

The President o f the U.S. Senate
The Speaker of the U.S. House o f Representatives

19 9 2

A N N U A L

R E P O R T

Chief Executive Officer's Statement
Resolution Trust Corporation (R T C )

ing the m om entum established in the R T C 's first

H

has confronted a host o f difficult challenges

tw o years o f operation. U ntil 1 9 9 2 , the R T C

H

since its creation in August o f 1989. Th e

focused on closing hundreds o f insolvent savings

H

challenge o f 1993 is to implement the

and loans. In 1 9 9 2 , however, with the bulk o f this

H

ambitious m anagement reform agenda

task com pleted, the R T C shifted m ore o f its atten­

*

outlined by Treasury Secretary Lloyd

tion to marketing its remaining inventory o f

Bentsen at his M arch appearances before the

assets—three-fourths o f which were such hard-to-

H ouse and Senate Banking Com m ittees.

sell assets as land and non-perfbrm ing loans. T h e

T he management reform plan includes the
following nine goals:

R T C also needed to streamline its operations.
Early in 1 9 9 2 , R T C m anagem ent to o k action

# Strengthening internal controls;
# Providing an audit follow-up system;

to confront the necessary changes—a process which
involved removing layers o f bureaucracy, consoli­
dating offices and delegating more decision-making

# Preparing a comprehensive business plan;

authority to a new hands-on executive com m ittee.

# Expanding opportunities for minorities

Th e R T C also unveiled tw o pioneering programs
designed to sell hard-to-sell distressed assets, the

and w om en;
# Improving the Professional Liability Section;
# Im proving the management information
systems;

National Land Fund and the M ultiple Investor
Fund. B o th received positive attention from other
governm ent agencies and private sector firms
involved in managing distressed assets.

# Strengthening contractor oversight;
# Appointing a C h ief Financial O fficer; and
# Appointing an Audit C om m ittee.

Even as this shift in priorities was gaining
m om entum , R T C 's resolution activities suffered a
severe setback. T h e R T C 's funding expired in April
o f 1 9 92, and the R T C had to suspend its resolu­

This ambitious program should place the R T C
on a sound management footing and give renewed

T h e R T C is now waiting for Congress to authorize

emphasis to one o f the R T C 's

the last installment o f funds needed to com plete

central objectives: maximizing

its jo b.

savings to the taxpayers.
We also must plan to wind
down the R T C as soon as possi­

T h e R T C has had one o f the toughest govern­
m ent missions in U .S. history, and has made
substantial progress toward carrying out that m is­

ble w ithout impairing its opera

sion—despite funding delays and the controversy

tions, and ensure an orderly

surrounding such a large and com plex undertaking.

transition o f personnel and sys­

M uch o f the credit for these achievements rests

tems to the F D IC . Accordingly,

with the dedication and professionalism o f the

Secretary Bentsen asked the

R T C 's employees, both career and temporary.

F D IC and the R T C to establish a

Roger C. Attman
Chief Executive Officer

tions o f failed thrifts for the remainder o f the year.

Finally, I extend the R T C 's recently nominated

joint task force to sm ooth the

C E O the very best wishes for a speedy confirm a­

transition process. This task force

tion and a successful com pletion o f the final chap­

tias been established and is
beginning its work.

ter o f this m ost im portant and challenging task.

This management reform

agenda builds on the R T C 's primary focus in
1 9 9 2 —managing a shift in priorities while maintain R E S O L U T t O N


T R U S T

C O R P O R A T t O N

August 5, 1993

19 9 2

A N N U A L

R E P O R T

TaMe of Contents
Transmitta! Letter

1

Chief Executive Officer's Statement

2

introduction

4

Division of Lega! Services

7

Department of Corporate Affairs
Department of Asset Disposition
Department of Conservatorships and Receiverships
Department of Litigation
Division of Administration and Corporate Relations

8
9
9
10
11

Department of Administration

12

Department of Contracts, Oversight, and Evaluation

13

Department of Minority and Women's Programs

14

Office of the Secretary

16

Office of Ethics

16

Office of Governmental Relations
Office of Corporate Communications

16
16

Division of institution Operations and Saies

19

Department of FSLIC Resolution Fund Restructuring

20

Department of Corporate Finance

20

Department of Operations

22

Department of Resolutions
Department of Planning and Analysis

28
31

Division of Asset Management and Saies

33

Department of Asset Management
Department of Field Activities and Sales
Department of Capital Markets
Department of Affordable Housing

34
35
37
37

Regutations

41

Financia! Statements and intemai Controis

45

Statistics

75

index

80




1 9 9 2

A N N U A L

R E P O R T

! N T R O D U C T ! O N

!ntroduction
^

With Congress' passage o f the Financial

funds through the m anagem ent and sale o f the

g Institutions Reform , Recovery, and

institutions' assets. These thrifts are ones that had

^

H

g Enforcem ent A ct o f 1989 (F IR R E A ),
^ g
*

^ g

been insured by F S L IC for which a conservator or

the Resolution Trust Corporation

receiver was appointed during the period January 1,

(R T C ) was established on August 9 ,

19 89, through Septem ber 3 0 , 1993.

^

1989. Its jo b is to resolve the crisis in

F IR R E A also mandates the R T C to maximize

the savings and loan industry created during the

the net present value return from the sale or other

1980s by, in many cases, risky investments, fraud,

disposition o f failed thrifts and their assets, m ini­

and mismanagement at the thrifts.

mize the im pact o f such transactions on local real

Six m onths prior to F IR R E A 's enactm ent, the

estate and financial markets, minimize the am ount

Federal D eposit Insurance Corporation (F D IC ) led

o f any loss realized in the resolution o f the insol­

an interagency effort to evaluate and oversee the

vent thrifts, and maximize the availability and

operations o f the nation's insolvent thrifts, which

affordability o f residential real property for low- and

had been rapidly increasing in num bers. Joining the

m oderate-incom e individuals.

F D IC in this task were the Federal Savings and

T o ensure that as many S & L violators as possi­

Loan Insurance C orporation (F S L IC ), the Federal

ble are punished, and to recover m oney for taxpay­

H o m e Loan Bank Board, the Federal Reserve

ers from wrongdoers, the R T C also has the

Board, and the O ffice o f the Com ptroller o f the

authority to investigate, initiate civil litigation, and

Currency. T h e F D IC to o k control o f 2 6 2 ailing

make criminal referrals in cases involving form er

thrifts during this period (each o f which was placed

officers, directors, and other professionals who

in conservatorship or receivership), which the R T C

contributed to the downfMl o f the thrifts.

inherited upon its establishment in August 1989.
T h e R T C 's mission is to contain, manage, and
sell failed savings institutions and recover taxpayer

RTC Executive Com m ittee
L-R (seated): Wittiam H. Roe!!e, Chairman
(Senior Vice President and Chief Financia!
Officer, Division of institution Operations
and Sates); Lamar C. Ketty, Jr. (Senior Vice
President, Division of Asset Management
and Sa!es); Richard T. Aboussie (Acting
Senior Vice President and Genera!
Counse!, Division of Legat Services).
L-R (standing): Barry S. Kotatch (Vice
President, Department of Ptanning and
Anatysis); Thomas P. Horton (Vice
President, Department of Fietd Activities
and Sates).

 H L S !) L U


I !0 \

! Mt S t

C 0 H !' 0 H \ t I () \

O n N ovem ber 2 7 , 1991, Congress passed the
Resolution Trust C orporation Refinancing,
Restructuring, and Im provem ent A ct o f 1991

] 9 9 2

A N N U A L

R E P O R T

WASHtNGTOM HFFtCE STRUCTURE

President and
Chief
Officer

- - - - *- - - - - D iv i^ o n o f
A d m in is tr a tio n s ^ ^ L
C o rp o ra te R e ia tio n s j
.

M v is iw o f
L eg a!
S e r v ic e s

;

D<;partment of

Asset

Restructuring

Department of

Department of Contracts,

D<:[)nrtment of

Asset

Oversight, and'

Corporate

Disposition

Evaluation

Finance

Departmentof

Department of

Conservatorships

Minority and

and Receiverships

Women's Programs




Department of

Resolution

Administration

Affairs

D iv i^ m o f A s s H !
M anagenw nt
an d S a !es

Department of FSMC

Department of'

Corporate

D ivisio n o f
O p e ra tio n s
an d S ates

^

Oflit'C of thH
Scrrnlitrs.

Mmugcnmnt

Department w !
Operations

Department of

Department w !

Affordable

Resolutions

Housing

Department of
Planning and
Analysis
j

Office of

i

Govemment.il Rdtttiotn-

____j
i

Office of
(lommuntcations

1HH2

A N N U A L

R E P O R T

(H.R.3435), which provided the RTC with $25
billion more in funding through April 1,1992;
extended the RTC's ability to accept appointment
as conservator or receiver from August 9,1992, set
forth in FIRREA, to September 30,1993; redesig­
nated the RTC Oversight Board as the Thrift
Depositor Protection Oversight Board and restruc­
tured its membership; abolished the RTC Board of
Directors and removed the FDIC as exclusive man­
ager of the RTC; and created the office of Chief
Executive Officer of the RTC, requiring appoint­
ment to that office by the President with the advice
and consent of the Senate.
After April 1,1992, the RTC was left without
additional funding to resolve failed savings and loan
institutions. Despite Congress' failure to provide
more funds, during the year the RTC took control of
50 savings and loans determined to be insolvent by
the Office of Thrift Supervision (OTS). In 1992,
the RTC also closed or sold 69 insolvent savings
institutions and achieved asset sales and collections of
approximately $77 billion (net of putbacks). From
inception through 1992, the RTC closed or sold 653
thrifts; total sales and collections amounted to $305
billion (net of putbacks).
The RTC operates from its headquarters in
Washington, D.C., and Held offices and sales cen­
ters throughout the country. In 1992, at the direc­
tion of the President and CEO, the RTC began to
downsize the agency—consolidating its 19 field
and regional offices, and eliminating duplicative
efforts throughout the organization—as it moved
closer to its sunset date of December 31, 1996. At
yearend, the RTC had 13 6eld ofRces and 14 sales

R E S O L U T I O N




T R U S T

C O R P O R A T i O N

centers nationwide, including the National Sales
Center in Washington, D.C.
During 1992 and through March 15,1993,
Albert V Casey, RTC President and CEO, directed
the daily executive and administrative functions of
the agency. The Executive Committee, which
replaced the RTC Board of Directors in 1992, con
sists of three senior vice presidents and two vice
presidents. In 1992, the committee members were
Richard T. Aboussie, Acting Senior Vice President
and General Counsel, Division of Legal Services;
William H. Roelle, Senior Vice President and Chief
Financial Officer, Division of Institution
Operations and Sales; Lamar C. Kelly, Jr., Senior
Vice President, Division of Asset Management and
Sales; Barry S. Kolatch, Vice President,
Department of Planning and Analysis; and Thomas
P. Horton, Vice President, Department of Field
Activities and Sales. The committee serves as the
policy-setting entity of the RTC and addresses
major operational matters.
The Thrift Depositor Protection Oversight
Board reviews the RTC's overall strategies, policies,
and goals, including those deemed likely to impact
significantly on the RTC's financial condition, its
operations, or its cash Hows; or those it deems to
involve substantial public policy issues. The Board's
membership includes the Secretary of the Treasury,
who chairs the Board; the Chairman of the FDIC
Board of Directors; the RTC CEO; the Director of
the OTS; the Chairman of the Board of Governors
of the Federal Reserve System; and two indepen­
dent members appointed by the President, with the
advice and consent of the Senate.




L E G A L

S E R V ! C E S

Services provides co m ­

Office o f Corporate
Issues

prehensive legal services

During the year, the O ffice o f

unit oversees the resolution o f

to the R T C . T he divi

Corporate Issues provided legal

disputes with, and claims

sion advises the

analysis o f legislation im pacting

against, the R T C , the F D IC ,

W ashington and held

on the R T C , including several

other federal and state govern­

staffs on such issues as resolu­

funding bills and the Resolution

m ent agencies, and outside par­

tions, conservatorship and

Trust C orporation Refinancing,

ties through negotiation,

receivership operations, and liti­

Restructuring, and

m ediation, and arbitration.

gation, as well as special issues,

Improvem ent Act o f 1991. T h e

These disputes and claims were

including the R T C 's statutory

office drafted a proposal to

inherited by the R T C when it

authority and responsibilities,

restructure the R T C in confbr-

becam e conservator o r receiver

and environmental matters. In

mity with the new law, and co o r­

o f the failed thrifts, and dealt

1992, the division restructured

dinated the drafting o f all

with mostly failed loans or taxes

and consolidated its staff into six

delegations o f authority for the

owed to the Internal Revenue

field sites as part o f the

Corporation.

Service.

he Division o f Legal

C orporation's reorganization.

the resolution o f $ 5 billion in
claims against the R T C . T h e

Th e office also prepared an

T h e office established and

opinion on the applicability o f

oversaw a legal review process

the division and serves as the

the Americans with Disabilities

for all environmental site assess­

principal legal advisor to the

Act to the R T C , and led a w ork­

m ents performed on all R T C real

R T C 's President and C E O . T h e

ing group that produced a draft

estate owned properties. T h e

division is organized into four

policy on the applicability o f the

office also initiated litigation

departments: C orporate Affairs,

act to public spaces at R T C

against the Financial Institutions

Asset D isposition,

receiverships and conservator­

Retirem ent Fund (F IR F ) to

Conservatorships and

ships. T h e office administered

recover surplus funds in retire­

Receiverships, and Litigation.

the Settlem ent/W orkout Asset

m ent plan accounts that F IR F

T h e General Counsel heads

Department of
Corporate Affairs

Team Program , which uses

refused to distribute to R T C

teams o f attorneys and asset spe­

receiverships.

cialists to expedite the resolution
o f problem assets.

Office o f Employment
and Labor Law

Office o f Special
Projects

In 1 9 9 2 , the O ffice o f

C orporation's internal corporate

T h e O ffice o f Special Projects

was established, which devel­

T T h e D epartm ent o f Corporate
] Affairs oversees any legal
H matters pertaining to the

Em ploym ent and L abor Law

structure, governance, and pro­

provided legal support on tax

oped procedures to coordinate

cedure, as well as legislative and

and environmental law, and

personnel and em ploym ent m at­

policy matters.

implemented the com puterized

ters with the O ffices o f H um an

tracking system fbr legal m at­

Resources M anagem ent,

all personnel, labor-relations,

ters—the R T C Legal

Inspector General, and Ethics.

and general em ployment matters

Inform ation System (R L IS ).

D uring the year, the office repre­

Th e department also handles

involving the R T C as a federal

During 1992, R L IS was fully

sented the R T C in 3 9 em ploy

employer. T h e department is

operational in every R T C office,

m ent actions brought before the

comprised o f the Offices o f

providing an on-line, integrated

Federal L abor Relations

C orporate Issues, Special

tracking and payment database

Authority, the Equal

Projects, and Em ploym ent and

for all legal matters referred to

Em ploym ent O pportunity

L abor Law.

outside counsel. In addition, the

Com m ission, the M erit Systems

office's Alternative Dispute

Protection Board, and the

Resolution U nit helped to settle

D epartm ent o f Justice in federal

164 legal disputes, resulting in

district court.


R E S O L U T t O N


T R U S T

C O R P O R A T t O N

1 9 9 2

Department of Asset
Disposition
"T h e Department of Asset
H Disposition reviews the legal
H aspects of RTC asset sales,
including the disposition of
high-yield and other securities,
and performing and non-performing loans through securi­
tized transactions. The
department is comprised of the
Offices of Real Estate, and
Securities and Finance.

OfRce o f Real Estate
In 1992, the OfRce of Real Estate
assisted the OfRce of National
Sales in closing more than $7 bil­
lion (book value) in sales of real
estate and loans secured by real
estate through sealed-bid offer­
ings, portfolio sales, and open-cry
auctions.
The office also assisted in
structuring the National Land
Fund, a limited partnership
arrangement designed to sell
$2 billion in undeveloped land
and loans secured by land. Private
sector firms acting as the general
partner for the fund will manage
and market its assets in 1993.

OfEce o f Securities
and Finance
In 1992, the Office of Securities
and Finance assisted with
34 mortgage-backed securities
transactions, resulting in the sale
of more than $23 billion (book
value) of single-family, multifam­
ily, commercial, manufactured
housing, and home equity loans.
In addition, the office assisted in
the development of programs
for the disposition of consumer
loans, subordinate securities, and
reserve funds.



The office also participated
in the structuring and implemen­
tation of the RTC's Multiple
Investor Fund program, in
which the RTC is expected to
sell between $2 billion and
$6 billion in non-performing and
sub-perfbrming loans in 1993.
In addition, the ofRce assisted in
disposing of a variety of highyield and other securities
through the Securities Sales
Program. The RTC sold over
$1 billion (face value) in junk
bonds and equity securities
through the program during
1992. The ofRce also assisted in
disposing of portfolios of broad­
ly syndicated corporate loans
through the Highly Leveraged
Transactions Sales Program and
in implementing the Cash
Management Program for the
investments of receivership cash
balances.

Department of
Conservatorships
and Receiverships
he Department of
Conservatorships and
Receiverships provides legal
advice and support to conserva­
torship and receivership opera­
tions, legal counsel and
documentation for sales of sub­
sidiaries, and all documentation
required when the RTC takes
over and resolves failed thrifts.
The department consists of the
Offices of Conservatorships,
Receiverships, and Resolutions;
and Contracting.

A N N U A L

R E P O R T

OfRce o f
Conservatorships,
Receiverships, and
Resolutions
The OfRce of Conservatorships,
Receiverships, and Resolutions
provided legal support for 16
major thrift resolutions (resolu­
tions of thrifts with liabilities
exceeding $500 million as of the
date of conservatorship) in 1992,
representing an aggregate of
more than $16 billion in
deposits. In addition, the ofRce
assisted with the termination of
34 receiverships, which was
accomplished through the
RTC's purchase of the remaining
receivership assets and its pay­
ment of final dividends to credi­
tors of the former institutions.

OfRce o f Contracting
The OfRce of Contracting
helped to revamp the RTC's
entire contracting process and
issued a revised Contracting
Policy and Procedures Manual.
These changes were made to
reflect new policies and adminis­
trative changes, including the
revision of the Contractor
Complaint Resolution process,
clariRcation of the non-competitive provision for awards under
$5,000, and redefinition of the
ownership requirements for
minority- and women-owned
businesses. The ofRce also han­
dled 72 ethics matters, assisted
in the resolution of contractor
conflicts of interest, and
reviewed investigative findings of
the OfRce of Inspector General
relating to enforcement cases.

1 9 9 2

A N N U A L

R E P O R T

L E G A L

S E R V ! C E S

Department of
L!t!gat!on
"T h e Department of Litigation
H oversees and coordinates ail of
H the litigation affecting the
RTC, including trial and appellate
Rtigation in all federal and state
courts; claims against directors,
officers, accountants, and attor­
neys of Ailed financial institutions;
and claims and proceedings in
bankruptcy. The department con­
sists of the Offices of Complex
Litigation, Litigation, and
Professional Liability.

OfHce o f Complex
Litigation

OfHce o f Litigation

The Office of Complex Litigation
is responsible for all bankruptcy
cases and litigation involving junk
bond investments.
The ofHce handled junk bond
claims against Drexel Burnham
Lambert, Michael Milken, and
other former employees of
Drexel. The office negotiated a
number of settlements in 1992
involving junk bond claims,
including a settlement in the
Drexel bankruptcy case and a
"global settlement" with Milken,
his associates, and affiliates. Total
recoveries from junk-bond-related
cases should ultimately reach
$1 billion, including $503 million
from the global settlement with
Milken.
The office's Bankruptcy
Section handled over 11,000
bankruptcy cases in 1992. A per­
sistent issue for the RTC in some
bankruptcy cases has been the
relationship between the RTC's
powers to dispose of assets of

e

R E S O L U T i O N




T R U S T

Ailed thrift institutions and the
powers of the bankruptcy courts
to control such assets. In 1992,
the RTC won a significant victory
on this issue when it obtained an
appellate court decision that a
bankruptcy court could not
restrain the RTC from exercising
control over the subsidiaries of
the Ailed Oak Tree Savings Bank,
New Orleans, Louisiana. The
Office of Complex Litigation
closely monitors cases involving
the RTC's powers and regularly
assigns them to in-house attor­
neys who argue the RTC's posi­
tion in court.

The Office of Litigation is com­
posed of two Trial Litigation Units
and an Appellate Litigation Unit.
Trial unit attorneys, along
with the RTC's field office litiga­
tors, oversaw more than 34,000
cases in state and federal trial
courts in 1992. The trial units
were directly involved in more
than 1,000 "significant issue"
cases, which involve the interpre­
tation of RTC policy or may set a
precedent for future RTC cases.
During 1992, the appellate
unit directly supervised the prepa­
ration of briefs on more than 400
matters pending in state appellate
courts and in the 11 United States
Circuit Courts of Appeal. Many
of these cases were argued by
members of the appellate unit.
In addition to its litigationmanagement duties, the office
advised senior management on
matters relating to litigation poli­
cy; acted as a liaison with other
federal agencies, such as the

C O R P O R A T i O N

Department of Justice, on litiga­
tion-related issues of mutual inter­
est; participated in training
activities and acted as a resource
for the RTC's held office litiga­
tors; and prepared and published
the comprehensive two-volume
RTC Litigation Deskbook,
which, at yearend, was in the
process of being updated.

OfHce o f Professional
Liability
By yearend 1992, the Office of
Professional Liability was in the
process of prosecuting 233 civil
actions, including 194 RTC-initiated lawsuits and 39 other RTC
related lawsuits, for improper
conduct by directors, officers,
attorneys, appraisers, accountants,
and other professionals who pro­
vided services to 167 failed thrifts.
At yearend, investigations were
underway on one or more claims
in 381 thrifts.
By yearend, $328 million had
been collected in settlements and
judgments in professional liability
cases. Setdement negotiations
with defendants in the RTC's case
against professionals, insiders, and
borrowers at Lincoln Savings and
Loan Association, Irvine,
California, have resulted in
agreed-to settlements totaling
over $115.8 million, of which the
RTC had recovered $95.4 million
by yearend. In addition, the RTC,
along with the FDIC and the
Office of Thrift Supervision,
entered into a global settlement
with the accounting firm of Ernst
& Young, New York, New York.
The RTC's share of this settle­
ment is over $128 million.




A D M ! N ! S T R A T ! O N

AND

*^ ^ ^ *h e Division of
H Administration and
H
Corporate Relations
H
provides administrative
H
and related services to
the RTC in a wide range
of areas, including personnel,
contracting, information ser­
vices, and minority and women's
programs. During 1992, the
division also helped to imple­
ment the reorganization plan of
the Corporation as the RTC
began to downsize its opera­
tions.
The division is comprised of
three departments and four
offices that report directly to the
division vice president.

Department of
Administration
"T h e Department of
] Administration is the main
H provider of corporate ser­
vices, and is the central point for
analyzing and proposing changes
to the Corporation's organiza­
tional structure. The department
consists of the Offices of
Corporate Information, Human
Resources Management,
Administrative Services, and
Organization and Resource
Management.

OfEce o f Corporate
Information
The Office of Corporate
Information provides informa­
tion systems and voice and data
telecommunications services;
formulates policies and guidance
on information management,
security, and related areas; and
develops the RTC's Information
Resources Management (IRM)
plans and budget.
 R E S 0 L U T ! 0 N


T R U S T

C O R P O R A T E

R E L A T i O N S

The office maintains and
operates a corporate-wide infor­
mation network consisting of
over 11,000 work stations, 330
servers, 1,600 printers, and 1,100
lap top computers. The ofRce
completed the RTC Wide Area
Network (WAN), which was
fully integrated to support all
network and mainframe systems
for more efficient exchanges of
business information. The new
RTC WAN enabled the RTC to
establish video-teleconferencing
capabilities at headquarters and
in the field offices.
To minimize risk to sensitive
RTC data, the office improved
corporate access-control policies
for information systems. In
addition, virus protection soft­
ware was distributed throughout
the Corporation to protect sys­
tems against computer virus
contamination.
The office completed the
second of three phases of the
Corporate Information System,
which collects and integrates
data from key RTC information
systems for inclusion in a corpo­
rate-wide database. In addition,
the Corporate Data Repository
was implemented, which tracks
and safeguards critical data with­
in major corporate information
systems.
The office supported the
field office restructuring by coor­
dinating the efforts of the "clos­
ing teams." These teams work
with both the closing and receiv­
ing field offices in the areas of
computer hardware, software,
security, telecommunications,
and national application systems
to ensure timely, efficient field
office closings.

C 0 R P 0 R A T ! 0 N

OfRce o f Human
Resources
Management
The Office of Human Resources
Management administers per­
sonnel and management adviso­
ry services in the areas of staffing,
position classification, employee
relations, training, personnel
management evaluation, and
personnel information systems
and processing.
The office was created on
May 4,1992, and immediately
began assisting in the field reor­
ganization and downsizing
effort, including establishing a
nationwide outplacement train­
ing program. The office helped
coordinate the return of 376
permanent employees from the
RTC to the FDIC. It also devel­
oped and produced the Field
Restructuring Handbook, the
Managers' Guide to
Restructuring, and the
Separating Employee's Guide to
Benefits; and established a hot­
line for employees' questions on
the reorganization.
The RTC's training pro­
grams were coordinated by this
office during the year. The office
also streamlined the incentive
awards process, and implement­
ed a labor-management relations
program at headquarters in 1992.

OfHce o f
Administrative Services
The Office of Administrative
Services develops and manages
the RTC's corporate services,
maintains the RTC's facilities,
and establishes policies, proce­
dures, and guidelines for a wide
variety of both real property
management and administrative
service functions. The office pro-

1 9 9 2

vides direct operational support
to all RTC headquarters activi­
ties and technical assistance to
Held ofHces in these areas.
In 1992, the ofHce devel­
oped and implemented a hous­
ing plan for the Washington
headquarters ofHces that accom­
modated staff increases and site
consolidation (from six to four
locations), while allowing opera­
tions to continue uninterrupted.
The ofHce also relocated approx­
imately 65 percent of the head­
quarters staff (more than 1,100
employees) over a nine-month
period.
The office established inhouse graphic design capabilities
to provide improved-quality
graphic support and to save on
design costs. In addition, the
office implemented the Records
Management Tracking System,
providing a consolidated database
of all institutional records to track
the RTC asset inventory and
sales, as well as the completion of
investigations and litigation.

OfHce o f Organization
and Resource
Management
The OfHce of Organization and
Resource Management provides
organization- and managementanalysis services to the
Corporation. The office is the
focal point for all budget formu­
lation, execution, analysis, and
reporting for the Division of
Administration and Corporate
Relations.
In 1992, the office recom­
mended the restructuring of and
developed mission and function
statements for ofHces in the
Divisions of Administration and
Corporate Relations, Legal



Services, and Asset Management
and Sales, as well as the Held
ofHces. The ofHce also revised
the Corporation's administrative
delegations of authority to
reHect new organizational struc­
tures and policies, and developed
new functional and expenditure
authorities.
The ofHce developed a
"management-by-objectives"
process for key initiatives in the
division, in which projects and
goals are developed and tracked.
Policies, procedures, and report­
ing requirements for the
Administrative Initiatives
Management System (AIMS),
which prioritizes RTC manage­
ment's program initiatives, were
also established during the year.

Department of
Contracts,
Oversight, and
Evaluation
"T h e Department of Contracts,
H Oversight, and Evaluation
* oversees all RTC contracts
through the OfHces of
Contracts; Contractor Oversight
and Surveillance; and
Administrative Evaluation.

OfHce o f Contracts
The OfHce of Contracts provides
corporate-wide contracting poli­
cies, procedures, and direction
on the management and disposi­
tion of assets acquired from failed
thrifts. Additionally, the ofHce
directs, manages, and controls
the contracting process and activ­
ity at the headquarters level and
administers existing contracts.
In 1992, the ofHce devel­
oped a comprehensive contract
policies and procedures manual

A N N U A L

R E P O

and training program for the
RTC, standardized many widely
used contracting documents,
and implemented a Contracting
OfHcer Warrant Program, which
established guidelines for con­
tracting ofHcials in approving
contracts.
The following chart shows RTC contract
ing activity nationwide from inception in
August 1989 through 1992:

RTC CONTRACTING ACT!V!IY
1989 through 1992
Year

Number of
Awards

1989

216

1990

10,719

443,670,516

1991

48,830

1,375,497,279

1992

44,301

1,121,200,267

1 M ,M 6

$ 2,943,223,146

n m

Fees Paid
to Contractors

$

2,855,084

OfHce o f Contractor
Oversight and
Surveillance
The OfHce of Contractor
Oversight and Surveillance
monitors and evaluates the per­
formance of major asset-management and sales contractors;
reviews and investigates contrac­
tor performance and contracting
irregularities; coordinates major
RTC contract terminations; ini­
tiates suspension and exclusion
actions of contractors for viola­
tions of Htness and integrity,
fraud, and non-performance;
and administers the RTC
Competition Advocacy
Program, designed to ensure
that all competitive-bid stan1 9 9 2

A N N U A L

R E P O R T

A D M ! N ! S T R A T ! 0 N

A N D

dar& have been met through a
review of all contracts.
In 1992, the ofRce closed
over 150 contractor fitness and
integrity investigations resulting
in 35 suspension and exclusion
actions. The ofRce also reviewed
the internal control structure and
operations of 140 contractors
responsible for asset manage­
ment and disposition activity. O f
those reviews, 60 cases were
closed and final reports issued.
In addition, the ofRce issued a
report concluding that the pre­
qualification and buyer-eligibility
procedures employed during the
November 1991 Lone Star
Affordable Housing Auctions,
held throughout Texas, were
ineffective in ensuring that buy­
ers were in compliance with the
RTC's Affordable Housing
Disposition Program eligibility
and residency guidelines.
The office published and dis­
tributed to contractor oversight
staff in the field a fraud training
manual that outlines contractor
fitness and integrity require­
ments, and a guide to the AntiKickback Act, which prohibits
RTC contractors from taking
kickbacks from sub contractors.

OfHce o f
Administrative
Evaluation
The OfHce of Administrative
Evaluation develops and admin­
isters the Corporation's overall
internal controls program, and
monitors its compliance with the
Chief Financial Officers Act of
1990 and associated policies of
the RTC Thrift Depositor
Protection Oversight Board. The
office also conducts corporatewide evaluations of the Division
 R E S O L U T I O N


T R U S T

C O R P O R A T E

R E L A T ! 0 N S

of Administration and Corporate
Relations' programs to ensure
that the programs are in compli­
ance with statutory and RTC
corporate policy, and are meet­
ing their objectives. In addition,
the office coordinates the pro­
gram offices' responses to audits
and investigations conducted by
the General Accounting OfRce
(GAO) and the RTC OfHce of
Inspector General (OIG).
In 1992, the ofRce coordi­
nated the Corporation's
responses to 36 GAO and 105
OIG audits and investigations,
and 94 cases resulting from calls
to the OIG Hotline, which
receives complaints of waste,
fraud, and abuse at the agency.
The ofRce also completed
administrative reviews of 10 Held
ofRces, and developed an audit
program to review the internal
control structure within receiver­
ships. Five receivership audits
were completed during the year.

Department of
Minority and
Women's Programs
"T h e Department of Minority
H and Women's Programs
H manages and develops policy
for minority- and women-owned
business (MWOB) participation
in all RTC activities, including
contracting, investment, and
securitization programs; and
equal employment opportunity
activities. The department is
comprised of the OfRces of
Minority- and Women-Owned
Business; Policy, Evaluation, and
Field Management; Equal
Employment Opportunity and
Affirmative Action; and Legal
Programs.

C 0 R P 0 R A T ! 0 N

OfRce o f M inority- and
W om en-Owned
Business
The OfRce of Minority- and
Women-Owned Business
ensures that firms owned and
operated by minorities and
women have the maximum
opportunity to participate in all
contracting activities of the
Corporation, as well as at con­
servatorships and receiverships.
In 1992, the ofRce devel­
oped, published, and imple­
mented RTC policies and
procedures for the MWOB con­
tracting program. This included
establishing an annual goal of 30
percent MWOB participation in
all RTC contracts, applying
bonus points to MWOB con­
tract proposals, and creating
joint-venture and subcontracting
policies and guidelines for
MWOBs.

O fEce o f Polity,
Evaluation, and Field
Management
The OfHce of Policy, Evaluation,
and Field Management develops
nationwide program standards,
policies, and procedures for the
RTC's minority and women's
programs to ensure that they are
in compliance with FIRREA; the
RTC Funding Act of 1991; and
the RTC Refinancing,
Restructuring, and
Improvement Act of 1991.
In 1992, the ofRce devel
oped standards and criteria for
the oversight and review of
minority and women's programs
in the Reid to determine the pro­
grams' effectiveness, and com­
pleted Program Compliance
Reviews in four Reid ofRces
(Kansas City, Valley Forge,

1 9 9 2

A N N U A L

OfHce o f Equal
Employment
Opportunity and
Affirmative Action

o f minority and women-ow ned
law Hrms (M W O L F s) and

ly C ontracting Activity and

T he Office o f Equal

tracting with the R T C .

Performance Reports for the

Em ploym ent Opportunity and

R T C President and C E O in

Affirmative A ction provides lead­

oped and issued a policy state­

Dallas, and Atlanta) to deter­
mine the programs' adherence to
policies and requirements.
T he ofHce produced m onth ­

minority and w om en attorneys
in n on -M W O L Fs in legal co n ­
In 1 9 9 2 , the ofHce devel

1992. T h e office also produced

ership and guidance to the

m ent concerning the

quarterly Field Office

C orporation in all areas o f the

requirements o f the R T C 's

C ontracting Activity and

equal em ploym ent opportunity

minority and w om en's pro­

Performance Analyses o f all co n ­

program.

grams, including the M inority

tract awards and fees for each

In 1 992, the office devel­

R E P O R T

and W om en Partners Program,

ethnic minority and non-m inori­

oped a new affirmative action

which encourages majority-

ty group by gender in each R T C

plan for managers based on the

owned Hrms to prom ote m inori­

office, receivership, and conser­

field restructuring and downsiz­

ties and w omen as partners. It

vatorship.

ing, and monitored the return o f

also established M inority and

R T C employees to the F D IC to

W omen Outreach Coordinators

pared 12 reports and/or

ensure E E O guidelines were

to provide support to regional

Congressional testimonies on the

being followed.

and Held outreach efforts.

During 1992, the office pre­

R T C 's efforts in minority and

T he office sponsored pro­

T h e ofHce and the National

w om en's programs. T h e staff

grams for the observance o f

M inority and W om en Bar

also assisted in developing pre­

Asian, Hispanic, and Disability

Associations co-sponsored a

sentations for the R T C President

Awareness M onths. It also initi­

national symposium for

and C E O and the department's

ated the R T C 's first Summer

M W O L F s in Dallas, Texas, in

Assistant Vice President, who

Employment Program for People

January 1992. In addition, the

participated in several workshops

with Disabilities, which included

ofHce created

held in conjunction with the

hiring six disabled students from

quarterly newsletter distributed

Congressional Black Caucus

universities across the country to

to Congress and R T C legal staff

Foundation Legislative Weekend

work in various R T C offices.

to prom ote minority and women

in Washington, D .C ., in
Septem ber 1992.
T he office also improved the

T he office coordinated with

O 2# , a

outreach activities nationwide.

the OfHce o f Corporate

T h e ofHce also established a join t

Inform ation and the OfHce o f

venture task force to ensure uni­

department's advertising efforts
by targeting specific w omen and

Administrative Services to
acquire a variety o f adaptive

form im plementation o f the
join t venture program and to

ethnic minority markets, and

equipment for the disabled.

encourage and m onitor join t
venture referrals.

strengthening coordination

Telephone amplifiers, telecom ­

between the held offices. In

m unication devices for the deaf,

addition, the staff developed and

orthopedic chairs, air puriHca-

implemented a management

tion systems, and vision aids

compiled a national directory o f

program for the department's

were am ong the adaptive equip­

M W O L F s that are on the R T C 's

field personnel on new minority

m ent requested and procured for

List o f Counsel. T h e A W O Z F

and w om en outreach and co n ­

disabled R T C employees.

tracting policies.




T h e staff developed the Join t
Venture Tracking System, and

contains inform ation
about each RTC-registered

OfHce o f Legal
Program s

includes Hrm expertise, size, co n ­

The OfHce o f Legal Programs

tacts, as well as other pertinent

establishes and oversees policies,

data.

M W O LF. T he information

procedures, and programs
designed to ensure the inclusion

1 9 9 2

A N N U A L

R E P O R T

A D M ! N ! S T R A T ! O N

AND

^

q/"

O^c^y o/' ^ &c7Yf%r%
Gop^yww^^/
Corpom^ CcwwMM^^OMy.

OfEce o f the Secretary
The OfRce of the Secretary man­
ages the decision-making process
for the RTC's senior executives,
including record-keeping and
infbrmation-dissemination. In
addition, the ofRce administers
three nationwide programs that
provide the public with
compiaint-resolution services
and access to RTC information.
In 1992, the ofRce processed
more than 850 decisions
approved by the RTC President
and CEO, the Executive
Committee, the senior vice presi­
dents and headquarters vice pres­
idents, and the newly established
Information Resources Manage­
ment Steering Committee, which
screens all software and hardware
proposals presented to the
Executive Committee.
The ofRce responded to
more than 1,200 requests for
information about actions taken
by the former RTC Board of
Directors, the President and
CEO, and other senior ofRcials.
The ofRce also processed 1,600
litigation Rlings.
The ofRce handled nearly
2,000 complaints through the
RTC Client Responsiveness
Program, created in June 1992,
which established corporatewide responsiveness standards.
Processing techniques in the
Public Reading Room in
Washington, D.C., and in
Regional Public Service Centers
 R E S O L U T I O N


T R U S T

C O R P O R A T E

R E L A T i O N S

were streamlined by the ofRce,
enabling it to handle a record
225,000 requests for docu­
ments. During the year, public
reading room and FOIA pro­
grams in the Valley Forge,
Pennsylvania, and Costa Mesa,
California, Reid ofRces were
established. The ofRce also
developed and published a
FOIA procedures manual, and
issued regulations regarding
FOIA and the Privacy Act. In
1992, the ofRce processed 1,795
FOIA requests.

OfHce o f Ethics
The OfRce of Ethics administers
regulations governing the Rtness
and integrity of independent
contractors that do business with
the RTC, and suspends and
excludes contractors that violate
these regulations. The ofRce also
administers the RTC's compli­
ance with employee ethics and
standards of conduct laws, regu­
lations, and related directives and
executive orders; and grants or
denies waivers for conflicts of
interest under RTC contracts.
In 1992, the ofRce utilized
national data communications
systems, such as the Contractor
Conflicts Database and the
Document Management System,
to track contractor ethics compli­
ance. The ofRce also established a
national network of Reid ethics
ofRcers and staff in each RTC
Reid ofRce and established an
RTC employee ethics program in
the spring of 1992.

O ffice o f
G overnm ental
R elations
The OfRce of Governmental
Relations serves as the RTC's

C O R P O R A T i O N

liaison with Congressional ofR­
cials. It maintains communica­
tions with House and Senate
members and their staffs, and
supplies them with information
about RTC policy concerns.
The ofRce also responds to
member inquiries on behalf of
constituents.
In 1992, the ofRce worked
with, but failed to convince,
Congress to extend the April 1,
1992, deadline for the RTC to
spend its authorized funds, or to
authorize the RTC's funding
request of $25 billion. The ofRce
also worked with Congress for
the defeat of various amendments
opposed by the RTC, including a
provision treating receiverships
and conservatorships as federal
government agencies for environ­
mental purposes.
In 1992, the ofRce partici­
pated in over 450 meetings with
members of Congress or their
staffs, and responded to over
10,000 telephone and written
inquiries R*om Congressional
ofRces concerning RTC opera­
tions. From inception through
1992, the ofRce coordinated 57
appearances by RTC ofRcials at
Congressional hearings, includ­
ing 16 in 1992.

OfRce o f Corporate
Communications
The OfRce of Corporate
Communications is the gateway
to information for news organi­
zations and the public about
RTC activities. The ofRce Reids
numerous daily telephone
inquiries from the press and the
public throughout the country
and abroad.
The ofRce advises and assists
the President and CEO and

1 9 9 2

other senior R T C executives in

releases (nearly 3 0 0 in 1 9 9 2 );

developing and executing the

writes and edits opinion editori­

A N N U A L

R E P O R T

m onthly employee newsletter.
T h e office keeps R T C

R T C 's public affairs programs.

als, letters to the editor, and

In addition, the office briefs

speeches for the President and

coverage o f the agency's activi­

R T C managers prior to media

C E O and other key R T C offi­

ties through a daily summary o f

interviews and provides m an­

cials, as well as copy lo r various

em erging news stories, a daily

employees informed o f media

agers with material and policy

publications; and produces pub­

clipsheet o f articles, and a weekly

interpretations in advance o f

lications such as the R T C 's

wrap-up o f news stories. T he

speaking engagements.

Annual Report. In 1 9 92, the

office also distributes through­

office began production o f

out the Corporation a weekly

T h e office headquarters staff
issues all national and field press




JVfMv, a

scorecard o f the R T C 's activities.

1 9 9 2

A N N U A L

R E P O R T




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! N S T ! T U T ! O N

O P E R A T I O N S

^ ^ ^ h e Division of
H Institution Operations
H and Sales oversees the
H management and operaH tion of insolvent thrifts
H while they are in the
RTC's conservatorship program,
and the negotiation and execu­
tion of the most cost-effective
resolutions of these thrifts as well
as those in the Accelerated
Resolutions Program (ARP). At
the beginning of 1992, the RTC
was managing 91 conservator­
ships. During the year, 50 more
thrifts entered the program. A
total of 69 thrifts were resolved
in 1992: 60 conservatorships
plus nine thrifts resolved through
ARP, which bypassed a conserva­
torship action. Resolution activi­
ty came to a virtual standstill
after April 1,1992, because
Congress declined to act on
RTC funding.
The division investigates
fraud and other abuses at failed
thrifts. In addition, the division
develops and operates the
Corporation's funding programs
and capital markets activities,
and coordinates the operations
of the Corporation's financial
departments. It also provides
research and analytical support of
RTC activities to ensure the
RTC's effective operation.
The division consists of the
Departments of FSLIC
Resolution Fund Restructuring,
Corporate Finance, Operations,
Resolutions, and Planning and
Analysis.

 R E S O L U T t O N


T R U S T

AND

S A L E S

Department of FSUC
Resotution Fund
Restructuring
"T h e Department of FSLIC
H Resolution Fund
H Restructuring renegotiates
and restructures the 96 1988-89
FSLIC assistance agreements
entered into by the former
Federal Savings and Loan
Insurance Corporation (FSLIC)
with 91 acquirers to facilitate the
acquisition of over 200 failed or
failing thrifts between January 1,
1988, and August 9,1989. All
funds expended by the depart­
ment to amend the assistance
agreements in order to reduce
the associated costs, which
Congress mandated, are drawn
from the FSLIC Resolution
Fund (FRF), a separate appro­
priated fund managed by the
FDIC. Management of this fund
reverted to the FDIC in October
1992.
During 1992, the RTC rene­
gotiated and amended 18 FSLIC
assistance agreements and exer­
cised its cost-savings options in
19 other agreements. In the
aggregate, the renegotiations
and the exercise of cost-savings
options resulted in cash outlays
from the FRF of $8.9 billion to
privately owned thrifts. The
RTC estimates that the cash out­
lays will save taxpayers, in pre­
sent value terms, between $450
million and $1.3 billion.
Minimum savings were calculat­
ed without regard to tax-sharing
provisions; the maximum savings
incorporate the tax-sharing pro­
visions assuming the assisted
institutions will fully utilize such
benefits.

C 0 R P 0 R A T ! 0 N

During 1992, an additional
$2.4 billion from the FRF was
expended to settle the FRF's
assistance obligations to FSLIC
assisted thrifts that subsequently
failed and were placed under
RTC conservatorship or
receivership.
From RTC inception on
August 9, 1989, through
December 31,1992, more than
$20.8 billion was expended by
the FRF to modify, renegotiate,
or restructure these agreements.
The RTC estimates that the cost
savings from these actions—in
present value terms—will range
from $1.3 billion to $3 billion.

Department of
Corporate Finance
*T*he Department of Corporate
] Finance maintains all
H accounting records for the
RTC. The department consists
of the Offices of Accounting
Services, and Field Accounting
and Asset Operations.

OfHce o f Accounting
Services
The OfHce of Accounting
Services performs the corporate
accounting function for the RTC.
The ofHce produces and main­
tains the RTC corporate account­
ing records and systems, the
corporate funding/cash manage­
ment operations, and the ofHcial
corporate financial statements
and reports that reHect the finan­
cial performance of the RTC in
its corporate, conservatorship,
and receivership capacities.
In 1992, the ofHce imple­
mented the RTC Financial
Management System (FMS).
The FMS integrates the General

] 9 9 2

A N N U A L

R E P O R T

cial accounting system o f the

development o f the R T C

R T C , and numerous other sub­

Accounts Payable System (APS)

O fH ce o f F ield
A cco u n tin g and A sset
O p eratio n s

systems into a comprehensive

to enable the office to assume all

T he Office o f Field Accounting

financial management system.

corporate processing responsibil­

and Asset Operations directs and

Th e F M S has enhanced data

ities, including all corporate dis­

manages all asset and Held

integrity and strengthened R T C

bursements by check or wire

accounting operations for R T C

reporting abilities to manage­

transfer.

Ledger System, which is the olfi

m ent, government entities, and
other interested parties.
The office expanded its m an­

T he office also initiated the

asset sales, management, and
disposition activities. As such,

In 1992, the ofHce renegoti­
ated the R T C 's annua! Federal

the office acts as a liaison

Financing Bank (F F B ) lending

between the Held ofHces and

agement reporting role in the

agreement, and oversaw the net

headquarters' corporate Hnance

areas o f loan securitizations,

paydown o f F F B borrowings by

and asset management depart­

receivership terminations, and

$ 1 9 .8 billion in principal and

ments. T he ofHce develops pro­

corporate purchases. New quar­

$2.1 billion in interest. T he R T C

cedures for the R T C 's Hnancial

terly reports for Congress,

borrows funds from the F F B ,

service centers to ensure their

required by the 1991 funding

which provides loans to federal

compliance with R T C proce­

legislation, provided information

agencies ibr working capital pur­

dures relating to asset and

on asset sales activity, working

poses.

accounting functions, and the

capita! needs, auction sates, and

integrity o f accounting and

R T C seUer financing.

Hnancial information ibr
receiverships.

1 9 9 2 RTC CONSERVATORSH!P & RESOLUTION ACI!V !IY

' VI' A
^

"/I

B/l / A / l
B/l " '
R/l

R/l*

8/3 * ? ^
^

B/3' t B /l'^
R/l
A/3

M
M 4

' *" M

R/2*

R/3

B/3
A/1
R/3

B/3
A/4

B/2 - ^
R/3*
A/1 B/l R/l

A/2
^

V d _ B /l

.

, B/2
' R/l

R/l

B/l

B/S ^ 3

^
.

§ v

Legend

R/4

B / Beginning Conservatorships
at 12/31/91
91

' ^8/10

A / Conservatorships Added
in 1992

50

R / Cases Resoived in 1992

69

*These figures inctude 9 associations never ptaced into conservatorship.




1 9 9 2

A N N U A L

R E P O R T

)

! N S T ) T U T i O N

O P E R A T I O N S

The following chart shows the number of
thrifts placed in the RTC conservatorship
program and the number o f resolutions:

CONSERVATORSH!P !NST!TUT!ONS 1 9 8 9 - 1 9 9 2
Conservatorships
Estabiished
Pre-F!RREA
Post-FtRREA 1989
(8/9-12/31)

Conservatorships
Tota!
Resotved
Resoiutions

262
56

37

37

1990

207

309

315*

1991

123

211

232**

1992

50

60

698

617

Iota! 1989-92

69***
653

inciudes six non-conservatorship institutions resotved, four of which were resolved
through the Accelerated Resoiutions Program.
**)nc!udes 21 institutions resolved through the Acceierated Resoiutions Program.
***)nciudes nine institutions resoived through the Acceierated Resoiutions Program.

The ofHce also directs a
nationwide cash-management
program for receiverships, moni­
tors a national internal Hnanciai
controls program, and develops
accounting policies. In 1992, the
number of receiverships
increased by 69 to 653, resulting
in $29 billion (net of putbacks)
in new receivership assets
retained by the Corporation.
During 1992, over $39 bil­
lion in cash receipts were
processed by the ofHce from
asset sales. By yearend, the RTC
managed approximately $63 bil­
lion in liquidation assets. The
ofHce also assisted in processing
more than $20 billion in mort­
gage-backed securities transac­
tions, over $1.5 billion in
seller-Hnanced sales, approxi­
mately $7 billion in structured
transactions, and approximately
$210 million in corporate pur­
chase transactions.
The ofHce implemented a
comprehensive cash-manage R E S O L U T I O N


T R U S T

AND

S A L E S

ment system providing all Held
ofHces with depository and other
banking services, developed a
formal investment program
designed to enhance yields on
receivership cash balances held
prior to the payment of divi­
dends, conducted tax beneHt
reviews of FSLIC assistance
agreements, and provided tax
assistance for the renegotiation
of the 1988 FSLIC transactions.

Department of
Operations
^ *h e Department of
] Operations manages and
H oversees conservatorship and
receivership operations, the pay­
ment of insured deposits, the
administration of resolution
agreements and the representa­
tions (reps) and warranties provi­
sions of asset sales agreements,
the processing of creditor claims,
and the termination of receiver­
ships. In addition, the depart­
ment investigates fraud and
other abuses at conservatorships
and receiverships, and develops
customized computer resources
to aid in program activities. The
department is composed of the
OfHces of Operations,
Investigations, and Systems
Development.

OfHce o f Operations
The OfHce of Operations devel­
ops policies and procedures for
the conservatorship program
that ensure compliance with
applicable laws and the RTC's
goal of minimizing the costs and
risks to the general public. The
ofHce provides day-to-day guid­
ance to individual conservator­
ships in implementing these

C 0 R P 0 R A T ! 0 N

policies and procedures.
The ofHce monitors the per­
formance of conservatorships,
supports Held efforts related to
the closing of insolvent institu­
tions and subsequent payment of
creditor and insurance claims,
monitors settlement activities,
reviews and reconciles sales
agreements, analyzes and pays
claims resulting from asset sales,
manages the termination of
receiverships, and issues reports
on program activities.
Institutions and Assets in
Conservatorship
From the RTC's inception in
August 1989 to yearend 1992,
the RTC managed a total of 698
institutions in the conservator­
ship program. When the RTC
was established, the ofHce imme­
diately assumed responsibility for
262 conservatorships from the
FDIC. From inception through
December 31,1992, 617 conser­
vatorships were resolved, leaving
81 in the program at yearend.
At the beginning of 1992, the
RTC was managing 91 conserva­
torships. During the year, 50
additional thrifts entered the pro­
gram, and 60 conservatorships
were resolved. Nine other institu­
tions were resolved through the
Accelerated Resolutions Program
(ARP), bypassing a conservator­
ship action.
The RTC prepares a conser­
vatorship for resolution by
downsizing the institution pri­
marily through asset sales. This
accelerates the payment of liabili­
ties of the failed institution and
reduces dependency on the
Treasury Department to fund
future operations. Gross conser­
vatorship assets in January 1992

1 9 9 2 RTC CONSERVAIORSHiP ANO RESOLUHO^ ACUVMY
(doiiars in mi!!ions)
State

Conservatorships
Beginning

Deposits

Aiabama

2

Arizona

1

129

Arkansas

1

135

Cattfomia

10
3

Connecticut

$ 1,607

Deposits

Added
2

Baiance
Resoived

161

1

0
0

12,978

5

323

1

$

Deposits
$

Ending

Deposits

485

3

$ 1,283

0

1

129

0

0

0

1

135

0

0

10,287

5

4,775

10

18,490

223

3

323

1

223

Ftorida

10

6,638

4

345

4

3,685

10

3,299

Georgia

5

376

2

247

4

294

3

330

!!!inois

3

731

3

695

4

993

2

432

indiana

1

10

0

0

1

10

0

0

!owa

3

862

0

0

2

150

1

712

Kansas

1

4,657

1

95

0

0

2

4,751

Louisiana

2

2,514

1

32

0

0

3

2,546

Maine

0

0

1

76

0

0

1

76

Maryiand

3

814

4

2,123

2

157

5

2,780

Massachusetts

1

138

1

118

0

0

2

255

Michigan

2

581

0

0

1

34

1

547

Mississippi

0

0

1

247

0

0

1

247

Missouri

2

2,615

0

0

2

2,615

0

0

New Hampshire

1

192

0

0

0

0

1

192

New Jersey

6

1,267

5

4,308

3

620

8

4,955

New Mexico

1

193

0

0

1

193

0

0

New York

3

1,376

1

1,073

3

1,376

1

1,073

North Carotina

2

586

1

639

1

424

2

802
2,419

Ohio

1

18

2

2,419

1

18

2

OMahoma

4

1,386

0

0

3

676

1

710

Oregon

1

1,273

0

0

0

0

1

1,273

Pennsyivania

5

1,200

4

838

2

812

7

1,226

Rhode !s!and

1

62

0

0

1

62

0

0

South Carotina

1

278

3

287

0

0

4

564

Tennessee

1

807

1

124

1

807

1

124

Texas

7

5,363

0

0

7

5,363

0

0

Utah

1

10

0

0

1

10

0

0

Virginia

4

2,491

6

852

4

2,491

6

852

West Virginia

1

35

1

68

0

0

2

103

Wisconsin

1

136

0

0

1

136

0

0

$51,780

50

$25,257

81

$50,266

Totai [35]

91

6 0 **

$26,771

* Deposits at quarter prior to date of conservatorship.
* * Does not include 9 thrifts resoived in 1992 through the Acceierated Resoiutions Program.
Note: Detai! may not add to totats due to rounding.




1 9 9 2

A N N U A L

R E P O R T

! N S T ! T U T ! O N

O P E R A T I O N S

AND

S A L E S

The following chart details asset sales, collections, and other conservatorship activities during 1992:

1 9 9 2 CONSERVAIORSHiP ASSET SALES AND OTHER ACT!V!T!ES
(doiiars in mi!!ions)
1/1/92
Batance

New
institutions

91 institutions

50 institutions

Cash and Securities

Activities*
Saies

Cotiections

Adjustm ents*

Resoiutions

12/31/92
Baiance

60 institutions

81 institutions

$12,166

$ 7,963

$ 8,263

$ 6,112

$12,345

$ 4,018

$14,081

1-4 Famity Mortgages

10,949

12,641

7,164

2,836

116

4,489

9,217

Other Mortgages

12,505

7,297

4,019

1,459

(118)

6,512

7,694

2,874

2,198

982

962

122

1,188

2,062

Other Loans
Owned Assets

5,128

2,503

1,302

0

(243)

3,115

2,971

Other Assets

3,709

2,875

790

745

969

1,841

4,177

$47,331

$35,477

$22,520

$ 12 ,114

$13,191

$21,163

$40,202

Totais

* inctudes activities from a)) institutions in conservatorship at any time during December 1992.
**tnctudes new asset purchases, vatuation revisions, and other transactions affecting vaiue.
Note: "Securities" indude investment-grade securities and mortgage-poo! securities. "Other toans" inctude commercia), consumer, and student toans. "Owned assets" consist of repossessed residentiai and non-residentiat rea) estate, iand, and other repossessed assets. "Other assets" inctude a wide array of assets, some types of mortgage servicing rights, office equipment, and subsidiary companies of controtied institutions.

The following chart summarizes RTC
advance activity during 1992:

Conservatorship Operations
Activities

1992 RTC NNSERtNORSHiP & RECEiVERSHiP AMANCE ACHViTY
Principa) Amount 0n!y
(doiiars in biiiions)
Advances Outstanding at 12/31/91

$18.3

Totai Advances Made in 1992

11.7

Totai Advances Paid in 1992

-16.8*

Advances Outstanding at 12/31/92

$ 1 3 .2 **

* Advances Paid batance inctudes $3.6 bittion in non-cash payments, but does not
inciude $804 miiiion in interest cottections during 1992.
* * Advances are generaiiy made to conservatorships, l i e Advances Outstanding batance at 12/31/92 inctudes $6.4 bittion in advances to conservatorships which have
been resotved and wi!t be repaid by the receiverships.

totaled $47.3 billion; they were
reduced to an estimated $40.2
billion by yearend. During the
year, 50 institutions with assets
of approximately $35.5 billion
were added to the conservator­
ship program; 60 conservator­
ships were resolved, removing
$21.2 billion in assets from the
program. Book value sales and
collections during 1992 totaled
$34.6 billion.
 R E S O L U T I O N


T R U S T

Liability Management—As a
conservatorship is prepared for
resolution, the overall liability
expenses are reduced by elimi­
nating wholesale (high-cost)
deposits, Federal Home Loan
Bank advances, and short-term
collateralized borrowings.
Funding is raised for this pur­
pose through asset sales supple­
mented with borrowings from
the RTC, as necessary. From
August 9,1989, through
December 31,1992, the RTC
advanced a total of $56 billion to
conservatorships for working
capital purposes.
Claims and Settlem ent
Activities
Insurance Payments—During
1992, more than 3.1 million
insured deposit accounts at
insolvent thrifts were protected.
More than 1.4 million of these

C 0 R P 0 R A T ! 0 N

deposit accounts were protected
through the purchase and
assumption of failing thrifts by
other institutions; the remaining
1.7 million deposit accounts
were paid off by RTC check in a
payoff (PO) transaction or trans­
ferred to other financial institu­
tions through insured deposit
transfers (IDTs). O f the $6.86
billion in deposits that were
involved in IDTs or POs, only
$16.5 million, or less than one
percent, were uninsured.
Liquidating Dividends—To
expedite the return of funds to
the Corporation and to credi­
tors, the Accelerated Dividend
Program was implemented in
October 1992, authorizing field
office vice presidents to approve
dividend cases. In 1992, cash
dividends to the Corporation
totaled $28.8 billion and non­
cash dividends totaled $21.6 bil­
lion, an increase of 25 percent

1 9 9 2

over 1991 in dividend returns to
the Corporation. From incep­
tion of the dividend process in
September 1990 through
yearend 1992, 1,144 dividend
cases were paid for a total recov
ery to the Corporation of $47.8
billion in cash and $43.6 billion
in non-cash dividends.
Creditor Claims—Essential
goods or services provided to the
RTC's managing agents for con­
servatorships are paid as adminis­
trative expenses. General trade
creditor claims of former associa­
tions, however, are considered to
be unsecured claims. Pass­
through receivership data from
RTC inception in August 1989
through yearend 1992 show that
$408 million in claims from
5,159 creditors were allowed,
$3 billion in claims from 4,584
creditors were disallowed, and
$5 billion in claims from 2,255
creditors were still pending at
yearend. In liquidating receiver­
ships, $73 million in non-RTC
unsecured creditor claims were
allowed while $1.5 billion in
claims of 5,767 creditors were
disallowed; $13 billion from
4,029 creditors were still pend­
ing at yearend.

Repurchase of Assets—During
1992, only $6.3 billion in assets
were transferred to acquirers
through the resolution process,
due to the lack of significant reso=
lution activity in the second half
of the year. O f that total, approm=
mately $2.5 billion in assets were
transferred subject to short term
putba& options. A putback
option g^ves an acquirer the right
to require the RTC to repurchase
the assets if the acquirer exerdses



the option by its expiration date.
At the beginning of 1992, assets
sold at resolution that had unex­
pired repurchase options totaled
$864 million (down from an alltime high of $12 billion in 1991).
These assets, combined with
assets transferred in 1992 subject
to putback options, brought the
total amount of assets with repur­
chase options in 1992 to almost
$3.4 billion. Of this amount,
nearly $1.9 billion in assets were
repurchased by the RTC. By
yearend, all remaining repurchase
options had expired, leaving the
RTC with no obligation to repur­
chase assets subject to putback.
Settlements—The RTC took
advantage of the slower resolu­
tion activity to focus on receiver­
ship settlement activity with
acquirers under resolution agree­
ments. During 1992, settlement
activity was concluded on 170
receiverships, leaving 46 settle­
ments to be completed at
yearend. In addition, the ofRce
issued the RTC
establishing compre­
hensive policies and procedures
for the administration of resolu­
tion agreements between the
RTC and acquirers; enhanced
the Settlement Status Tracking
System, which tracks the status
of the RTC's settlements with
acquirers under resolution agree­
ments; and conducted annual
Reid o f f i c e Program Compliance
Reviews to assess adherence with
established settlement policies
and procedures of the ofRce. In
1992,12 Reid o f f i c e reviews were
conducted in the claims, closing,
and settlement areas.

A N N U A L

R E P O R T

Asset Claims
In 1992, reps and warranties
provisions were extended to the
RTC's structured transactions
(sales of large mixed pools of
non-performing or sub-perfbrm
ing loans and real estate assets,
packaged either by collateral type
or investor requirements) and
auctions following the use of
these provisions to signiRcantly
enhance recoveries from loan
sales, securitizations, and servic­
ing rights sales in 1991. At
yearend, 3.4 million loans valued
at approximately $182 billion
with reps and warranties were
being administered by the ofRce.
From inception through yearend
1992, the RTC received a total
o f9,344 claims under reps and
warranties provisions of asset
sales agreements, involving
92,000 loans with balances total­
ing $610 million. At yearend, the
RTC had paid $304 million on
these claims.
The ofRce also manages the
establishment and maintenance of
reserves by sellers (conservator­
ships, receiverships, or wholly
owned subsidiaries) to cover the
cost of reps and warranties claims.
Reserves are established and
monitored to minimize any con­
tingent liability that may accrue
to the seller or to the RTC in its
corporate capacity. At yearend
1992, the cash reserve balance for
all asset sales totaled $1.01 billion.
Terminations o f
Receiverships
In early 1992, the RTC began
terminating receiverships that
were at least one year old and
had no legal or other compelling
reasons for remaining open.
Receivership assets that remained
1 9 9 2

A N N U A L

R E P O R T

! N S T ! T U T ! O N

O P E R A T I O N S

The following chart shows RTC detection
o f criminal activity by savings and loan
directors, officers, and other professionals,
and legal action undertaken by the
Department o f Justice, as o f December 31,
1992. Thrifts referred to are now under
RTC supervision.

REST!TUT!ON ANO CR!M!NAL ACI!V!TY

Cases where fraud and abuse contributed to faiiure
Number of defendants charged

determinations to be made. Such

substantial investigative

determinations will help the

resources to assist the Justice

R T C better project its future

D epartm ent in pursuing crim i­

funding needs.

nal cases.

OfHce o f Investigations
T h e R T C O ffice o f

OfHce o f Systems
Development

Investigations exam ines the

T h e O ffice o f Systems
D evelopm ent provides the R T C

531

th rou gh fraud and o th er abuses

tems that support R T C opera­

257

by thrift officials.

tions and management

In 1992, the R T C received

inform ation needs. T o ensure

$ 2 8 3 million in cash from direc­

that these application systems are

888

tor, officer, and other professional

im plem ented effectively, the

780

liability claims. From inception in

office works closely with the

Number awaiting sentencing

108

Tota) prison time sentenced*

843 years, 4 months

Number of restitution orders

500

Tota) restitution paid***

failed thrifts. T h e R T C allocates

with national inform ation sys­

Number sentenced

Tota! restitution ordered**

ing expenses and allows final loss

helps to recover funds lost

1,093

Number of convictions

S A L E S

causes o f thrift failures and

(from inception in August 1989 through 1992)
Thrifts with suspected criminai conduct

AND

$126,901,968
$10,272,042

* Based on information provided by the Department of Justice and does not inciude
state and !oca! cases.

August 1989 through yearend

O ffice o f Corporate

1992, the R T C collected approxi

Inform ation, which is responsi­

mately $ 3 2 8 million in profes­

ble for technical hardware and

sional liability claims, $ 1 5 6 .7

software acquisition, database

million o f which was from litiga­

managem ent and administration,

tion involving Drexel Burnham

and operational management.

Lambert. In addition, $ 1 0 .2 mil­

Th e office has tw o branches:

lion o f criminal restitution was

Software M anagem ent and

collected, bringing total cash

Business Applications Analysis.

* * This figure inciudes orders both initiated and inherited by the RTC. Some orders may
inciude muttipie payees. These statistics refiect oniy the RTC portion of such orders.

recoveries to approximately $ 3 3 8

***Ttiis figure is a cumuiative statistic, rejecting ait known RTC coiiections.

million.

Note: Uniess otherwise indicated, statistics given inciude federai, state, and iocai prose­
cutions.

to be liquidated were purchased

Th e Software M anagem ent
Branch plans, develops, im ple­
m ents, and maintains m ajor

Interagency Coordination

R T C information systems, and

T h e D epartm ent o f Justice is

provides user training, docum en­

by the R T C in its corporate

responsible for prosecuting

tation, and other required sup­

capacity, with proceeds used by

criminal cond u ct com m itted by

port for them . In 1 9 92, the

the receivership for payment o f

insiders and parties associated

branch provided support in the

priority claims, establishment o f

with RTC-supervised thrifts.

asset, resolution, finance, and

reserves for liabilities assumed by

R T C investigators and attorneys

administration areas using the

the C orporation, and distribu­

work closely w ith the Federal

inform ation systems listed below.

tion o f final dividends to credi­

Bureau o f Investigation ( F B I) ,

tors according to established

U .S . A ttorneys' offices, the

Applications Analysis Branch was

priority. In 1992, the R T C ter­

Internal Revenue Service (IR S ),

established to resolve issues

minated 3 4 receiverships, which

the Securities and Exchange

involving the R T C 's m ost visible

In 1 9 9 2 , the Business

was accomplished through the

Com m ission (S E C ), the O ffice

and m ission-critical systems, par­

R T C 's repurchase o f the remain­

o f T h rift Supervision (O T S ),

ticularly the Real Estate Owned

ing receivership assets and its

and the Secret Service to pro­

M anagem ent System and the

payment o f final dividends to

vide the necessary docum ents,
w ork papers, and, in some

Asset M anager System, whose

creditors o f the form er institu­
tions. Tim ely termination o f

cases, expert testim ony needed

and have differing and often co n ­

receiverships reduces costs by

to prosecute individuals sus­

flicting needs and perspectives.

eliminating unnecessary operat­

pected o f criminal con d u ct in

R E S O L U T I O N


T R U S T

C O R P O R A T i O N

users cross organizational lines

1 9 9 2

Major Systems
Reassessment
In 1992, the ofRce reassessed sev­
eral major RTC information sys­
tems in an effort to reduce costs
and produce better quality sys­
tems. The reassessments estab­
lished firm implementation dates
for the development of new sys­
tems as well as enhancements for
existing systems. In addition, the
ofRce established the require­
ment that cost/beneRt analyses
must be conducted prior to
authorization for systems devel­
opment or enhancement.
The Information Resource
Management Steering
Committee, whose membership
consists of Corporation vice
presidents, was created in late
1992 to direct the allocation of
resources for the RTC's infor­
mation systems. The RTC's
Executive Committee approves
more substantial expenditures
and strategic plans that have a
corporate-wide impact.
In 1992, the ofRce actively
developed or enhanced the
RTC's corporate information sys­
tems. They include the following:
Financial Systems
H Financial Management
System General Ledger
(FM S-G L) The FMS-GL sys
tem was implemented in
September 1992. This system
allows the RTC to capture and
report RTC-speciRc financial
information and to respond to
the RTC's changing Rnancial
requirements. It is also designed
to work in concert with the new
Control Totals Module.
H Control Totals Module
(CTM ) CTM processes Rnan­



cial information provided by the
RTC's loan servicers, interfaces
with the RTC's General Ledger,
and supports Rnancial reconcilia­
tion requirements for receiver­
ship assets. In 1992, CTM was
implemented at all RTC sites.
Enhancements to CTM were
also made to support the corporate-purchase and split-banking
(the transfer of the management
of an asset from one location to
another) strategies for complet­
ing the resolution of institutions.
H Asset Manager System
(AMS) AMS is a cash-management system that tracks receipts
and disbursements for Asset
Management and Disposition
Agreement (AMDA) contractors.
Automating the transfer of funds
between the RTC and AMDA
contractors through AMS was
initiated in September 1992.
H Automated Grouping
System/Automated Payoff
System (AG S/A PS)
AGS/APS is used to support the
closing of failed institutions by
computing insurance determina­
tions and indicating the level of
uninsured funds. The system was
enhanced to support resolutions
requiring that the deposit base be
split among multiple acquirers.
Asset Systems
H Real Estate Owned
Management System
(REO M S) REOMS is the cor­
porate-wide repository for infor­
mation on the RTC's real estate
assets. Major enhancements
were implemented in 1992, such
as increased reporting capabilities
for the Affordable Housing
Disposition Program and the

A N N U A L

R E P O R T

ability to set up and track sales
initiatives. Increased Hexibility in
selecting and scheduling locally
produced standard reports was
also provided during the year.
The system's response time was
improved by almost 50 percent
from 1991.
H Subsidiary Inform ation
Management Network
System (SIMAN) SIMAN was
developed in 1992 for the OfRce
of Subsidiary Management to
enable the staff to track Rnancial,
management, and sales data for
RTC-controlled subsidiary com­
panies.
H W arranties and
Representations Accounts
Processing System
(WRAPS) WRAPS is used to
track contractual obligations
between the RTC and the pur­
chasers of RTC assets, reserve
account balances required to fulRll potential obligations, and
associated claims activities. An
automated interface between
WRAPS and the Mortgage
Guarantee Insurance
Corporation, which administers
these claims activities for the
RTC, was created to streamline
management and administrative
tasks fbr the WRAPS users.
H National Loan Exception
Tracking System (N LETS)
NLETS was implemented in
November 1992 fbr the OfRce
of Securities Transactions.
NLETS is a personal computerbased application used to track
and reconcile discrepancies
between scheduled and servicer
information fbr RTC securitized
loans. Reconciling these loan
1 9 9 2

A N N U A L

R E P O R T

[ N S T ) T U T ) 0 N
;

O P E R A T I O N S

exceptions helps ensure a viable
secondary market for RTC
mortgage-backed securities.
Investigative and Legal
Systems
H RTC Legal Inform ation
System (R LIS) An enhanced
version of RLIS was implement
ed nationwide to provide auto­
mated assistance to the Division
of Legal Services to track matters
referred to outside law firms, cre­
ate and maintain budgets at the
case level, and process thousands
of invoices received monthly.
H Asset Tracing and
Reporting System (ATAR)
ATARwas developed to facilitate
investigations of the personal
assets of individuals whose sus­
pected criminal activities con­
tributed to the collapse of
savings and loan institutions.
H Thrift Investigation
Management System
(TIM S) TIMS provides the
OfHce of Investigations data
relating to investigations of indi­
viduals and organizations sus­
pected of fraud and/or civil or
criminal violations in managing
deposit accounts at failed thrifts.
The system is also used to moni­
tor the status of legal claims,
potential litigation, ongoing
cases, and financial recoveries.
H Financial Institutions
Regulatory Criminal
Enforcem ent System
(FIRA CR ES) FIRACRES is a
criminal referral database system
consisting of shared data from
the RTC and five other federal
financial regulatory agencies.
This data is accessed through the
 R E S 0 L U T ! 0 N


T R U S T

AN

-i.'.

Financial Crimes Enforcement
Network.
Internal Reference System
H Document Management
System (DM S) DMS is an on
line text retrieval system that
enables RTC users across the
country to view directives, policy
manuals, and other important
references rapidly. In 1992, the
system was enhanced to provide
graphics capability and improved
text-search features.

Department of
Reso)ut!ons
TThe Department of
] Resolutions markets and exeH cutes the most cost-effective
resolutions for insolvent thrifts
placed in the RTC's conservator­
ship program by the OTS. The
department is composed of the
Offices of Major Resolutions
and Field Resolutions.
The lack of Congressional
funding after April 1,1992, sig­
nificantly limited resolution
activity. Sixty-nine thrifts were
resolved in 1992, compared to
232 in 1991, and 315 in 1990.
O f the $25 billion in loss funds
allocated in the Resolution Trust
Corporation Refinancing,
Restructuring, and
Improvement Act of 1991, $6.7
billion was utilized before the
April 1 deadline.
The December 1991 appro­
priation was used in 64 of the 69
resolutions in 1992. Four resolu­
tions were "no-cost" transac­
tions in which the acquirers
assumed all of the liabilities and
purchased virtually all of the
assets for total premiums of
$11.1 million, exceeding all losses

C O R P O R A T I O N

in the institutions. The last reso­
lution in 1992, the July sale of
the deposit franchise of Investors
Federal Savings Bank,
Richmond, Virginia, to Central
Fidelity Bank, Richmond, uti­
lized resolution funds that had
been appropriated prior to the
December 1991 legislation.
In 1992, insured deposits
accounted for 99.6 percent of all
deposits at institutions. The total
cost of the 69 resolutions was
estimated at $7.2 billion. (The
cost is estimated until all assets
associated with the institutions
are sold.) This total is $660 mil­
lion less than the projected cost
taxpayers would have borne if a
liquidation or payoff of insured
deposits had been required in all
cases. The gross RTC funding
for these 69 institutions was
$24.4 billion, including conser­
vatorship advances of $2.5 bil­
lion, for a net RTC funding cost
of $21.9 billion.

OfHce o f Major
Resolutions
The Office of Major Resolutions
managed the disposition of larg­
er conservatorships, generally
those with over $500 million in
total liabilities (as of the date of
conservatorship). During 1992,
the ofHce completed 16 resolu­
tions (compared to 45 in 1991
and 39 in 1990) involving $17
billion in deposits (compared to
$56 billion in 1991 and $60 bil­
lion in 1990). The $308 million
in premiums paid to the RTC in
these resolutions represented
about 2.6 percent of the $12 bil­
lion of resolved core deposits
(deposit accounts with balances
of $80,Q0Q or less) . Eight of the
major resolutions involved mul-

19 9 2

tiple purchasers, with 68 finan­

involving the payoff o f $ 9 0 0 mil­

cial institutions acquiring one or

lion o f deposits in one Arkansas

A N N U A L

R E P O R T

1 9 9 2 RESOLUHONS BY T R A N S A C T S TYPE

more branches (or the deposits

office, three Kansas offices, and

thereof). N one o f the thrifts was

11 M issouri offices. T he remain­

resolved as a total payoff; howev­

ing 51 offices and $ 1 .3 billion in

insured Deposit

er, four o f the resolutions

deposits were sold to 33 financial

Transfer-2

involved paying o ff deposits in

institutions located in 2 9 mid-

one or more individual branches

western towns and cities. T he

for a total o f $1.2 billion.

franchise premiums paid to the

Num ber of Resolutions — 69

3%

R T C by the acquirers totaled

Size of Resolved
Conservatorships

$11.9 million.

T he largest conservatorship reso­

torship resolution was

lution o f 1992 was Sunbelt

AmeriFirst Federal Savings Bank,

Federal Savings, F SB , Irving,

M iami, Florida, whose $ 2 .0 bil­

T he third largest conserva­

Texas, with $ 3 .4 billion in

lion in deposits and 5 4 offices

deposits and 112 offices. In

were acquired by Great Western

August 1988, the institution was

Bank, a Federal Savings Bank

created through the "Southw est

(Great W estern), Beverly Hills,

Plan" merger, which com bined

California. T he franchise premi­

the previously existing $ 2 .2 bil­

um paid to the R T C by Great

lion Sunbelt Savings Association

Western totaled $ 2 7 .5 million or

o f Texas, Dallas; the $1 billion

1.7 percent o f core deposits.

Western Federal Savings and

Far West Savings and Loan

Loan Association, Dallas; and six

Association, FA (Far W est),

other ailing institutions to form

Newport Beach, California, with

a "super-thrift" with com bined

$ 2 .0 billion in total deposits, was

assets o f nearly $5 billion and a

the fourth largest conservator­

cross-Texas franchise. T he thrift,

ship resolution. Only 4 6 percent

which had grown to over $ 6 bil­

o f the deposits were core

lion in assets during two-and-

deposits, garnering a premium

one-half years, was declared

o f $ 3 .8 million or .4 percent o f

insolvent and placed in R T C
conservatorship in April 1991. It

the core deposits. Three o f the
institution's offices, with a total
o f $ 120 million in deposits, were

was resolved by the R T C in Apri)

COST OF RES0LUT!0N AS A PERCENT OF L!AB!HT!ES AT
CONSERVATORSH!P*

Transfer

* Cost of resolution is the estimated doilar amount to be spent by the RTC to cover
differences between cash outtays and future net asset recoveries from the resotution
of insotvent S & Ls , the shortfa!) representing a !oss to the RTC. This toss consists prtmarity of the negative net worth of the insotvent institution pius tosses from asset
sates, reduced by acquirer premiums.
* * P & A transactions inctude 7 resotutions with a partiat payoff of branches.

1992. Acquiring all deposits and

paid o ff by the R T C . O f the

thrift's assets and liabilities are

a small amount o f the thrift's

three acquirers o f Far West

marketed simultaneously, but

assets was Bank o f America

deposits, American Savings

packaged so that potential

Texas, N .A ., H ouston, with a

Bank, F.A., Stockton, California,

"asset-only" acquirers can place

$ 103 million premium, or

assumed the largest amount o f

bids exclusively for certain asset

4 .2 percent o f core deposits.

deposits, $ 1 .0 2 billion in

packages, while financial institu­

deposits in 2 0 offices.

tions interested primarily in the

T h e second largest conserva­
torship resolution was H om e
Federal Savings Association o f
Kansas City (H o m e Federal),

Cooperative Institution
Marketing Program

Assumption**

deposit franchise can place "liability-only" bids. In addition,
franchise bidders can link their

Kansas City, Missouri, with $ 2 .2

In 1992, the department imple­

franchise bid to a bid on the

billion in deposits. H om e

mented the Cooperative

asset pools. W hole-thrift bids are

Federal was the most complex

Institution M arketing (C IM )

also encouraged. Investors

resolution o f the year, ultimately

program. Under the program, a

Federal Savings Bank (Investors




1 9 9 2

A N N U A L

R E P O R T

i N S T ! T U T ! O N

0 P E R A T ! 0 N S

1 9 9 2 RESOLUTION COST AND SAViNGS BY STATE
(dottars in miHions)
State

Resotved
institutions

Resoiution
Cost**

Estimated
Savings

Catifornia*

1
1
1
6

Connecticut

3

62

6

Aiabama
Arizona
Arkansas

$

70
15

$

9

0

22

3

1,254

49

F!orida*

7

1,428

226

Georgia

4

79

3

Minois

4

115

26

indiana

1

1

0

!owa

2

12

5

Louisiana*

1

446

15

Maryland

2

15

1

Michigan

1

2

2

Missouri*

3

608

16

New Jersey

3

148

5

New Mexico

1

34

0

New York

3

477

15

North Carotina

1

82

5

Ohio*

2

3

5

Oktahoma

3

128

8

Pennsytvania

2

189

11

Rhode !s!and

1

10

0

South Dakota*

1

49

9

Tennessee

1

170

17

Texas

7

355

106

Utah

1

3

0

Virginia*

5

1,399

115

Wisconsin

1

15

3

Tota! [28]

69

$7,190

$660

* These states contain 9 thrifts resolved under the Accelerated Resoiutions Program.

AND

S A L E S

OfHce o f Field
Resolutions
In 1992, the OfRce of Field
Resolutions resolved 44 conser­
vatorships with a total of $4.5
billion in deposits. Two thrifts—
Springfield Federal Savings
Association, Springfield,
Pennsylvania; and Republic
Federal Savings Bank, Matteson,
Illinois—were resolved without
cost to the RTC. Both were
acquired by thrifts in their respec­
tive states. Field resolutions also
included four insured deposit
payoffs (two in Texas, and one
each in Rhode Island and
Virginia, all single-ofRce opera­
tions) with a combined total of
$169 million in insured deposits.
Two others involved partial pay­
offs of $46 million in insured
deposits serviced by six unsalable
branches. The 44 transactions
generated $73 million in premi­
um income, or approximately 2
percent of resolved core deposits.
Field resolutions in 1992 includ­
ed 14 transactions involving two
or more acquirers. A total of 59
financial institutions, many of
them community banks with less
than $100 million in assets, were
acquirers in these field resolutions.
A ccelerated Resolutions
Program

**Resotution cost estimated at time of resolution.
Note: Detaii may not add to totais due to rounding.

Federal), Richmond, Virginia,
was the only thrift resolved
under the CIM program in
1992. Central Fidelity Bank,
Richmond, Virginia, assumed
Investors Federal*'s $.9 billion in
deposits in 47 Virginia ofRces;
16 different investors acquired
$1.06 billion (book value) in
Investors FederaTs assets.
 R E S O L U T i O N


T R U S T

The Accelerated Resolutions
Program (ARP) was created in
1990 on the premise that early
intervention in a failing thrift
could create significant taxpayer
savings. Unlike other thrifts
resolved by the RTC, those
resolved through ARP are not
placed in conservatorship prior
to resolution. Thrifts placed in
ARP are those that the Director
of the OTS has determined are

C 0 R P 0 R A T ! 0 N

in danger of failing and whose
financial condition would cause
them to be placed into RTC
conservatorship within one year.
The thrifts are not necessarily
insolvent, but generally fail to
meet minimum capital require­
ments and have agreed to partici­
pate in the program. To be
placed in ARP, there must be
identified investor interest in the
thrift's entire franchise, and its
management must be stable.
In 1992, nine thrifts were
resolved through ARP, com­
pared to 21 in 1991 and four in
1990. These nine thrifts had
total deposits of $8.5 billion,
compared to $7.4 billion in 1991
and $3.7 billion in 1990, as of
date of resolution. ARP resolu­
tions generated deposit premi­
ums of $131 million, or about
1.8 percent of the transferred
core deposits. In addition, pre­
miums totaling $170 million
were paid for "Schedule B"
assets (one- to four-family mort­
gages), which under ARP are
offered simultaneously with the
franchise to both franchise and
mortgage buyers.
The estimated cost of resolv­
ing thrifts through ARP in 1992,
as a percentage of total deposits
of resolved thrifts, was 16 per­
cent, compared to 19 percent for
the thrifts resolved by the OfRce
of Field Resolutions, and 30 per­
cent for those resolved by the
OfRce of Major Resolutions.
OTS and RTC personnel
coordinate the marketing of
ARP thrifts. OTS is responsible
for overseeing the management
of the institution pending its
sale, and the RTC is responsible
for managing the transaction.
The two agencies also work

1 9 9 2

together to And other alterna­
tives to conservatorship for weak
thrifts, such as no-cost mergers
and open assistance, in which the
government provides funds to
the thrift to maintain its fran­
chise value until it is sold.
Two ARP resolutions were
completed in 1992 without cost
to the RTC. First Ohio Savings
Bank, FSB, Saint Bernard,
Ohio, with $32 million in
deposits, was acquired by the
Indiana-based MBT Bancorp;
and First State Savings
Association, Sedalia, Missouri,
with $166 million in deposits,
was acquired by Mercantile
Bank of Sedalia, Sedalia.
The largest ARP resolution
in 1992 was Perpetual Savings
Bank, F.S.B. (Perpetual),
Vienna, Virginia. The thrift's
$2.6 billion in deposits were
transferred to subsidiaries of
Crestar Financial Corporation,
Richmond, Virginia, which paid
an $8 million deposit premium,
or 0.3 percent of core deposits.
Perpetual was one of five $1 billion-plus institutions resolved
through the ARP in 1992.
HomeFed Bank (HomeFed),
San Diego, California, with
$10.2 billion in deposits and
$13.9 billion in assets, was placed
in the ARP in April 1992 and was
to be marketed under the CIM
program. Because Congress did
not provide funding for the RTC
after March 31,1992, HomeFed
was placed into RTC conserva­
torship on July 6,1992.
M inority Participation
The National Marketing List
includes more than 300 individ­
uals, investor groups, and finan­
cial institutions that have



indicated that they are minorityor women-owned, or are a
minority member or a woman.
Included in the list are 64 Asian
American, 95 Black American,
75 Hispanic American, and 47
Native American groups or indi­
viduals, and 28 women.
In 1992, two minorityowned thrifts were resolved. No
like minority institution present­
ed an acceptable offer for either
of these franchises. Service was
continued to the minority com­
munities, however, as the $8 mil­
lion in deposits of New Age
Federal Savings Association, St.
Louis, Missouri, were acquired
by Commerce Bank of St. Louis,
N.A., St. Louis; and the $6 mil­
lion in deposits of Connecticut
Federal Savings and Loan
Association, Hartford,
Connecticut, were acquired by
Bank of Boston-Connecticut,
Waterbury, Connecticut. In the
latter resolution, the Black
American-owned Boston Bank
of Commerce acquired $15 mil­
lion (virtually the entirety) of the
failed thrift's assets.

Department of
Manning and
Ana)ys!s
*V*he Department of Planning
] and Analysis was established
H in February 1992 by consoli­
dating the OfHces of Research
and Statistics, and Budget and
Planning to provide research and
analytical services to support
RTC operations, and to facilitate
the use of corporate resources
through resource management.

A N N U A L

R E P O R T

OfHce o f Research and
Statistics
The OfHce of Research and
Statistics provides economic,
financial, and statistical data and
analysis to other ofHces and divi­
sions, and provides information
on RTC activities to Congress
and the public. The ofHce con­
sists of three sections: Financial
Modeling and Statistics,
Financial Markets and
Institutions, and Cost Analysis.
The Financial Modeling and
Statistics Section regularly pre­
pares data on the RTC's opera­
tions and performance for
dissemination within the
Corporation and to the Thrift
Depositor Protection Oversight
Board, Congress, and the public.
The monthly RTC
pro­
vides much of this information.
The section projects the
RTC's future loss fund and
working capital needs for use in
funding requests made to
Congress, the RTC's operating
plan, and its financial statements.
In addition, the section prepares
public information packages for
distribution to potential bidders
of insolvent thrifts, and prepares
estimates of future asset sales and
collections for use in the prepa­
ration of RTC sales goals.
During 1992, the staff pro­
vided analytical support for
receivership operations through
the calculation of payments due
to general creditors left behind
in pass-through receiverships,
assisted in the preparation and
operation of the flexible budget
model, and served as Raison
between users of the Corporate
Information System, which inte­
grates data from a number of key
RTC data systems into one data1 9 9 2

A N N U A L

R E P O R T

! N S T ) T U T ! O N

O P E R A T I O N S

base, and the OfRce of
Corporate Information.
The Financial Markets and
Institutions Section addresses the
policy- and economics-oriented
issues of asset management and
disposition. The section publishes
the bi-monthly R^pon%/
R#y$w , which provides
valuable indicators of red estate
market conditions, and participates in the esdmated cash recovery (ECR) process fbr quarterly
valuation of receivership assets.
The section designed the analytical and statistical methodology fbr
the ECR process. In addition, the
section also coordinates and prepares most RTC testimony presented be^re Congress.
The section provided analytical assistance fbr the 1988 FSLIC
assistance agreement renegotia=
tions, and prepared a number of
studies on specific aspects of
RTC operations, including a
model predicting future thriA
institution losses; bidding activity
on National Sales Center portfblio sales; indirect expenses associated with different types of
assets; open bank assistance;
redesign of the SAM DA pro­
gram; and estimates of net
returns on sales of real estate and

 R E S O L U T t O N


TRUST

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AND

S A L E S

OfHce o f Budget and
Planning

non-performing loans through
National Sales Center portfolio
transactions, SAMDA contrac­
tors, and open-cry and sealed-bid
auctions.
The Cost Analysis Section
supplies analytical support,
financial forecasting, and infor­
mation management in the
R TC's resolutions and ECR
processes. The section produces
the RTC's "cost test" fbr all
major resolutions and fbr accel­
erated resolutions, and provides
technical assistance to Held ofRce
personnel on Reid resolutions.
The section provides the resolu­
tion database, and provides reso­
lution reports to BTC senior
management, the ThriA
Depositor Protection Oversight
Board, Congress, and the GAO.
The section is also responsible
fbr conducting the quarterly
ECR process in which the mar­
ket value of receivership assets is
estimated.

j
i

CORPORATt ON

:
::

!!
::

The OfRce of Budget and
Planning coordinates and over­
sees the RTC's budget process,
and facilitates the use of corpo­
rate resources in business plan­
ning, resource estimation,
performance measurement, and
progress monitoring.
The ofRce initiated major
changes in 1992 to accommo­
date the RTC's maturing opera­
tions. With the assistance of the
OfRce of Research and Statistics,
the ofRce developed a Rnancial
model to aid in forecasting, flexi­
ble budgeting, and Rnancial
reporting. During the year, the
ofRce contributed to the design
and implementation of the new
Financial Management System
and General Ledger, which
require periodic review.
In the RTC's 1992 budget,
operating expenses totaled $3.5
billion. O f this amount, outside
services accounted fbr 60 per­
cent, receivership real estate
accounted fbr 17 percent, and
employee compensation
accounted fbr 14 percent. In
1992, the RTC staff decreased
by 1,125 employees, a 14 percent
reduction from 1991.


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Federal Reserve Bank of St. Louis

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A S S E T

M A N A G E M E N T

AND

^ ^ ^ ^ h e Division o f Asset
H

M anagem ent and Sales

H

manages and disposes o f

H

assets acquired from

H

failed thrifts. T h e divi-

H!

sion accomplishes this

S A L E S

Department of Asset
Management
" T h e D epartm ent o f Asset

contractors were managing
assets with a total book value o f
approximately $ 2 3 billion.
From August 1990 through

H M anagem ent develops and

D ecem ber 1 9 9 2 , SA M D A con

H implements all policies and

tractors managed assets with a

through the Departm ents o f

procedures governing the m an­

total book value o f $ 3 6 .4 billion,

Asset M anagem ent, Field

agement and disposition o f

and disposed o f one-third, or

Activities and Sales, and Capital

assets, except fbr securitization

$ 1 2 .6 6 billion, o f those assets.

M arkets, and through the

transactions. T h e department

Affordable H ousing Disposition

consists o f the Offices o f

downsize the SA M D A program

Program.

SAM DA Program M anagem ent,

because the am ount o f R T C
assets had been reduced through

In 1 9 92, the R T C began to

During 1992, R T C asset

Asset and Subsidiary

sales and collections totaled $ 7 7

M anagem ent, Case

sales. M anagem ent o f SAM DAs

billion (net o f putbacks); from

M anagem ent and Program

was consolidated into six field

inception through 1992, asset

Com pliance, Settlem ent

offices in Valley Forge,

sales and collections amounted

W orkout, and Systems

Pennsylvania; Atlanta, Georgia;

to $ 3 0 5 billion (net o f putbacks).

M anagem ent.

Kansas City, M issouri; Dallas,

B ook value reductions fbr the fis­

Texas; Denver, C olorado; and
Newport Beach, California.

1992, totaled $101 billion, or 101

OfRce o f SA M D A
Program Management

percent o f the R T C 's goal, with

Th e O ffice o f SAM D A

cal year ended Septem ber 30,

the R T C realizing an 8 7 percent

(Standard Asset M anagem ent

return o f the book value o f dis­

and Disposition Agreem ent)

OfHce o f Asset and
Subsidiary
Management

posed assets. From inception

Program M anagem ent issues

T h e O ffice o f Asset and

through the end o f 1992, book

and m onitors all SAM DAs,

Subsidiary M anagem ent devel­

value reductions totaled $ 3 3 0
billion. T h e asset inventory

which totaled 188 from incep­

ops the R T C 's policies and pro­

tion o f the SA M D A program in

cedures on asset valuation, seller

remaining at yearend 1992

August 1990 through yearend

financing, subsidiary m anage­

totaled $ 1 0 4 billion.

1992. At yearend, 9 2 SAM D A

ment and disposition, and gen­
eral real estate and loan credit

CONSERVATORSH!P AND RECE!VERSH!P ASSETS UNDER RTC
MANAGEMENT AS OF DECEMBER 3 1 , 1 9 9 2
(percentage of gross assets)

Other Loans 4%

m anagement.
In 1 9 9 2 , the R T C developed
procedures fbr originating sellerfinancing loans fbr com mercial
R E O and servicing notes, and
equity interests acquired from

Lows 18%

multiple asset sales and multiple

8ther Mortgages 18%

investor funds. A commercial
seller-financing staff was created
in each field office to manage

Cash & Securities 13%

Mortgages
<j

REO12%

<.

Assets 17%
Mortgage

and shipping to loan servicers.
By yearend, the R T C had closed
approximately $1.41 billion in
comm ercial seller-financed trans­

Securities 4%

 R E S O L U T i O N


loan origination, loan approval,

actions.
D uring 1992, the office

lota) Assets: SIM Ritiinn
T R U S T

C O R P O R A T i O N

established a policy on lead-

1 9 9 2

based paint in RTC-occupied
and non-occupied residential
properties. The policy calls for
the RTC to assess the potential
health and financial risks before
it sells, leases, or forecloses on
properties with lead-based paint.
The ofRce also accelerated the
use of private sector contractors
and various environmental
groups to improve the RTC's
ability to identify environmental
resources on REO property and
property held as collateral for
loans. In addition, the ofRce
coordinated the marketing of
hazardous properties to Rrms
interested in purchase, remedia­
tion, and resale with the
National Sales Center.

OfEce o f Case
Management and
Program Compliance
The OfRce of Case Management
and Program Compliance ana­
lyzes all proposed asset-related
actions (i.e., sales and financing)
that require headquarters
approval, monitors the perfor­
mance of asset sales contractors,
coordinates the assessment of
each Reid ofRce's compliance
with internal controls related to
division program areas, and
coordinates the development
and implementation of asset
management and sales policy
training programs with the
RTC's OfHce of Human
Resources Management.
In 1992, the RTC imple­
mented a collection policy to
ensure that contractors and thrift
or asset purchasers are not in
default to an RTC/FDIC-controlled institution. In addition,
the ofRce conducted annual
Program Compliance Reviews at



seven Reid ofRces, and revised
appraisal policies to enhance the
asset sales process.

OfRce o f Settlement
W orkout
The OfRce of Settlement
Workout restructures problem
loans and negotiates settlements
with defaulted borrowers. Assets
assigned to the ofRce generally
have a high book value; may have
the potential for substantial legal
costs; may be involved in, or
have the threat of, complex litiga­
tion; or may not have sold after a
prolonged period according to
their proposed disposition plans.
In 1992, two Settlement
Workout Assistance Teams
(SWATs) were assigned to each
Reid ofRce to evaluate problem
assets and execute necessary
workout negotiations or collec­
tion strategies with defaulted
borrowers. SWATs were autho­
rized to work out credit prob­
lems of up to $100 million,
allowing for a more timely
approval process. By yearend,
SWATs—with the assistance of 18
SWAT contractors—had restruc­
tured, sold, or worked out
$2.7 billion in SWAT assets;
another $4.7 billion in assets
were under review at the end of
1992. In addition, 19,000 prob­
lem assets, with a total book
value of $42 billion, were
involved in litigation in 1992.
Litigation Review Committees
in each permanent Reid ofRce
evaluated major litigation,
including expenses.

OfEce o f Systems
Management
The OfHce of Systems
Management coordinates the

A N N U A L

R E P O R T

development, implementation,
and maintenance of the divi­
sion's information systems; man­
ages related contracts, such as
the Data Integrity Support and
the Policy and Procedure
Support contracts; and monitors
the performance of major oper­
ating systems such as the Real
Estate Owned Management
System (REOMS) and the Asset
Manager System (AMS).
During 1992, the data
integrity of REOMS and AMS
was improved by correcting
existing information and
decreasing the number of data
elements in the systems. In addi­
tion, REOMS Data Upload
Facilities were developed to min­
imize the need for duplicate data
entry by SAMDA and RTC sys­
tems.

Department of Retd
Activities and Sates
^The Department of Field
] Activities and Sales coordi* nates national sales efforts,
and oversees Held ofRce sales and
operations. The department
consists of the OfRces of Field
Liaison, National Sales, and
National Marketing.

OfRce o f Field Liaison
The OfHce of Field Liaison over­
sees the asset management and
sales operations in the six major
Held ofRces, which manage assets
primarily through SAMDA con­
tracts. The ofRce also manages
and disposes of the institutions'
subsidiaries, and oversees the
Held responsibilities of the RTC
self-insurance program. In 1992,
the RTC reduced insurance
administration and premium
1 9 9 2

A N N U A L

R E P O R T

A S S E T

M A N A G E M E N T

AND

S A L E S

In August, Daiwa Finance

1 9 9 2 ASSET SALES AND COLLECT!ONSCONSERVAIORSH!PS, R E S 0 L U T ! 0 N S AND RECE!VERSH !PS

C orporation o f New York pur­
chased a portfblio o f 6 9 per­
form ing congregate care and
nursing hom e loans for approxi­
mately $ 2 0 5 m illion, or 91 per­
cent o f its book value. Also in
August, Com m ercial Properties
Funding C orporation, Stam ford,
C onnecticu t, purchased a port­

REQ$3

fblio o f 4 7 shopping centers,
with a book value o f $218 mil­
lion, for $71 million in an all­
cash transaction. In September,
the office conducted the R T C s
largest auction since its incep­
tio n —nearly $ 5 0 0 million (b oo k
value) in non-perform ing loans

lata) Sates ant! hilliidiiins: ^77 itillimi (Met nf I'atliacks)'

were auctioned in Los Angeles,
California, for a total o f

*Puthacks M a te d $ 1.9 hillion in 1992. Puthacks include some assets returned from pre 1992 resolution sales.

$ 2 4 7 .9 million.

costs by $ 3 2 .7 million by switch­

new sales strategies to dispose o f

T h e office developed several
g-related data, develops and

ing from existing policies on

elements new sales strategies

the remaining asset inventory. To

assets to self-insurance.

dispose o f assets, and conducts

dispose o f hard-to-sel! land

tionwide auctions o f real estate

assets, the National Land Fund

T h e office also oversees all
field ofBce staff support activities
such as facilities operations, bud­
geting, information services, res­
olutions, claims and settlements,
asset operations, and financial
reporting.

OfHce o f National Sales
T he OfHce o f National Sales
plans, coordinates, and executes
m ajor asset sales. T he office dis­

loans. T he office is the primacontact for investors needing
ormation about R T C sales
)i*ocedures and opportunities.
In 1 9 92, the ofBce was

and financing source would serve
as general partner and the R T C
would be a passive limited part­

olved in a num ber o f notable

ner. T h e M ultiple Investor Fund

es transactions. For example,

program and the N-series trans­

le R T C signed a contract with

actions were also developed to

lequers Investm ent Associates,
)allas, Texas, for the $ 1 3 0 .5 mil-

sell non-perform ing and sub-

ion sale o f the R T C 's first large

structures with private investors.

poses o f illiquid assets such as

uctured portfolio o f hotel

real estate and non-perform ing

)roperties, performing loans,

loans, and conducts portfolio

was designed as a partnership in
which a m ajor land developer

non-perform ing loans collat-

performing loans in partnership

OfHce o f National
Marketing

and structured sales (sales o f

lized by hotel assets, with a

T h e Office o f National Marketing

pools o f assets chosen by the

al book value o f $ 2 3 7 million,

coordinates asset marketing pro­

R T C and a purchaser) o f more

le office also conducted a

than $ 1 0 0 million in assets in a

m ber o f portfolio sales o f

asset sales support through adver­

single transaction. T h e latter

lque assets such as mini-ware-

tising, industry relations, market­

offerings are com posed primarily

grams nationwide, and provides

louse facilities and shopping

ing systems, and customer

o f commercial real estate and

iters, and loans secured by

services and telemarketing.

non-perform ing mortgages.

usual or specialized collateral

T he office develops market
 R E S O L U T I O N


T R U S T

ch as congregate care facilities.

C O R P O R A T t O N

In 1 9 92, the office estab­
lished an in-house advertising

1 9 9 2

facility with graphic-design and
media-buying capabilities, saving
$1.5 million annually. The ofHce
also produced a new RTC logo
to project a progressive image of
the Corporation, promote more
consistent identification, and
reduce reproduction costs.
The ofHce also designed and
produced a series of 12 informa­
tional and sales brochures for use
by all field and national sales staff
in promoting RTC sales pro­
grams. In addition, the ofHce
increased the number of investors
listed on the National Asset
Marketing Application (also
known as the Investor Database)
to over 10,000—a 200 percent
increase from 1991. The list serves
as the primary marketing source
for Held and national sales cam­
paigns and event nodHcations.
In 1992, the National 1-800
Telemarketing Program, devel­
oped by the ofHce, became the
central point for the general
public to obtain RTC informa­
tion. Almost one million calls
were received on the Affordable
Housing Hotline, the Broker
Hotline, and the Information
Center Line Horn the program's
March 15,1991, inception to
yearend 1992. Callers can access
all services of the telemarketing
program through a single call.

Department of
Capita! Markets
*T*he Department of Capital
] Markets plans, coordinates,
H and directs RTC capital mar­
kets transactions. This includes
the creation and sale of securi­
tized loan products, and the sale
of debt and equity acquired
through RTC interventions. The



department consists of the
OfHces of Securities Transactions
and Securitization.

OfHce o f Securities
Transactions
The OfHce of Securities
Transactions sells securities
acquired through RTC interven­
tions. The types of securities
offered include junk bonds,
equity securities, U.S. Treasury
obligations, and federal agency
and mortgage-backed securities.
In 1992, the RTC registered
with the Securities and Exchange
Commission (SEC) a total of
$15 billion in residendal, multifamily, and manufactured hous­
ing mortgage pass-through
securities; $14.45 billion was
taken down from the shelf.
From inception of the secu­
rities sales program in March
1990 through yearend 1992, the
RTC sold over $61 billion of
securities and $9 billion of interest-rate swaps, and disposed of
over $8 billion in junk bonds,
recovering approximately 65
cents on the dollar for the tax­
payers. At yearend, only $211
million in junk bonds remained
in the RTC inventory.
The ofHce used several pro­
grams to sell highly illiquid secu­
rities, including limited
partnership interests, highly
leveraged transactions, and com­
mercial loan participations.

OfHce o f Securitization
The OfHce of Securitization
develops, manages, and imple­
ments a program to securitize
financial assets taken over by the
RTC, including performing
mortgage and other loans, and
non-perfbrming commercial

A N N U A L

R E P O R T

mortgage loans.
In 1992, the ofHce used the
Multiple Investor Fund and Nseries transactions to dispose of
non-performing and sub-performing loans. These transac­
tions involve establishing
partnerships between the RTC
and private investors who pur­
chase, manage, and then sell
portfolios of non-perfbrming
and sub-performing loan assets,
and share in the proHts with the
RTC. The structure provides
incentives for equity partners to
work out portfolios with the
highest returns to the partners
and the RTC.
In 1992, the ofHce developed
the RTC securitizadon program
for non conforming single-family
mortgages, multifamily loans,
and commercial real estate loans.
The RTC also Hied a separate
registradon with the SEC for one
home equity loan securities issue
totaling $311 million.
From incepdon of the securi­
tization program in June 1991 to
yearend 1992, over $32.8 billion
in assets were securitized, includ­
ing single-family, multifamily,
and commercial mortgages, and
commercial and consumer loans.

Department of
Affordable Housing
he Department of Affordable
H Housing identiHes real estate
H assets suitable for sale to lowto moderate-income families and
individuals, as well as non-proHt
housing organizadons, through
its Affordable Housing
Disposidon Program.

1 9 9 2

A N N U A L

R E P O R T

A S S E T

M A N A G E M E N T

AND

In 1992, the RTC sold the following properties
to state and local housing authorities through
its Affordable Housing Disposition Program:

P R O P E R H E S SOLO TO STATE ANO LOCAL
HOUSING AUTHOR!T!ES
Property

Sates Pnce

Panam a City H A

Northgate

$

Panam a City, F L

Terrace ii Apts.

Housing Authority [HA]

425,865

Panam a City, F L
Pierce County H A

Eagies W atch Ap ts.

Tacom a, W A

Puyaiiup, W A

Futton County H A

Provence North Apts.
Atianta, G A

$2,40 0 ,0 0 0

Attanta, G A
Reno H A

7th S t. Apts.

$ 200,000

R en o, N V

R en o, N V

Ciark County H A

W ainut G rove Apts.

Las V egas, N V

Las V egas, N V

N e w M exico M ortgage

Partt Terrace Apts.

Finance

Aibuquerque, N M

$2,500,000

$3 ,500,000

$

7 8 1 ,0 0 0

$

7,0 0 0

$

11,200

$

5,000

$

75 ,0 0 0

Aibuquerque, N M
City of Lakeiand

508 N . Gitm ore R d .

Lakeiand, F L

Lakeiand, F L

Housing Redevetopm ent

536 Edm und A ve .

Authority

S t. Paui, M N

S t. Pau!, M N
H A of San Antonio

5 1 2 W . M agnoiia Apts.

San Antonio, I X

San Antonio, I X

City of Aibuquerque

5405/5401 Tucson R d .

Aibuquerque, N M

Aibuquerque, N M

City of Enid

140 5 N . Centra)

$

Enid, O K

1 3 1 8 N . Centra)
1 3 1 0 N . 19th

$

12,6 5 5

$

15,0 0 0

9 15 W ashington

$

10,000

Norfoik Redevetopm ent

109 W . 3rd S t.

$

4 ,0 0 0

and Housing Authority

829 W . 3 7th S t.

$

9 ,000

N orfoik, V A

802 34th S t.
9 632-3 G rove A v e .

$
$

5 ,000
52,500

12 Properties:

$ 1,4 0 0 ,0 0 0

Coiorado Housing and
Finance Authority
D enver, C O

FranMin Apts.
D enver, C O
Hudson Apts.
C oiorado Springs, C O
S a xo n y Apts.
D enver, C O
The Rectory Apts.
C oiorado Springs, C O
Courtyard Com m ons
D en ver, C O
M urray Pa rk Apts.
C oiorado Springs, C O
2029 W . 36th S t. Apts.
D enver, C O
H udson i! Apts.
C oiorado Springs, C O
ivy Hiii Apts.
Aurora , C O
6 15 N . Corona S t. Apts.
Coiorado Springs, C O
7 2 2 /2 4 N . N evada Apts.
Coiorado Springs, C O
Gib Lane Apts.
C oiorado Springs, C O

 R E S O L U T t O N


T R U S T

1 1 ,5 0 0

S A L E S

Affordable Housing
Disposition Program
The Affordable Housing
Disposition Program oilers
income-eligible purchasers and
non-profit housing organizations
an exclusive 97-day marketing
period and option to purchase
these properties. Non-profit
housing organizations include
consumer and public interest
groups, as well as state and local
housing agencies.
In 1992, 5,942 single-family
properties were sold through the
affordable housing program fbr a
total of $156 million. From the
program's inception in August
1990 to yearend 1992,13,645
single-family properties were
sold fbr a total of $384 million,
with sales averaging 63 percent
of book value. These properties
were offered primarily through
auctions and sealed bids.
During the year, over 200
affordable housing sales events
were held in 31 states. Sixty-nine
percent of the purchasers were
from lower-income families—
those with incomes of less than
80 percent of the national medi­
an income—with an average
income of $22,864. The average
sales price of a single-family
home in the program was
$28,151; single-family sales aver­
aged 70 percent of book value.
The RTC provided seller
financing fbr 1,443 single-family
homes sold under the affordable
housing program in 1992. From
the program's inception through
yearend 1992, the RTC provided
seller financing fbr 2,342 single­
family homes, or 17 percent of
the total sold. Purchasers utilized
$52 million of RTC-sponsored
mortgage revenue bonds.

C O R P O R A T t O N

In 1992, 183 multifamily
affordable housing properties
were sold fbr a total of $164 mil­
lion; the RTC provided seller
financing fbr six of the proper­
ties. From inception through
1992, the RTC sold 309 multifamily affordable housing prop­
erties, containing 27,000 units,
fbr a total of $306 million.
From inception of the
affordable housing program
through yearend 1992, approxi­
mately 820 properties with no
reasonable recovery value had
been made available fbr con­
veyance to non-profit organiza­
tions and public agencies. O f
those, 736 were conveyed by
yearend, 175 of which were con­
veyed in 1992 alone.
On May 6,1992, an interim
final rule was published in the
amending some
parts of the affordable housing
program. In addition, the RTC
issued two directives on the
rule's amendments.
Changes in the single-family
housing sales program included
the following:

H Purchasers of single-family
properties under the affordable
housing program must reside in
the property fbr at least
12 months. If the property is
sold before then, the RTC may
take 75 percent of any profits
from the sale.
H The RTC may sell a single­
family affordable housing prop­
erty to a family earning above
115 percent of the area median
income (the maximum income
allowed fbr purchasers of afford-

1 9 9 2

able housing properties) if that
family is renting the property
when it is placed into the afford­
able housing program.

public agencies, or for-profit
entities that agree to the lowerincome occupancy requirements
for condominiums.

Changes in the condominium
housing sales program included
the following:

H One hundred percent of the
properties purchased by non­
profit organizations, public
agencies, and for-profit entities
must be made available for occu­
pancy and maintained as afford­
able for lower-income families.

H Individual properties may only
be sold to persons who qualify
under affordable housing
income guidelines. Properties
listed in portfolios may be sold
to non-profit organizations,




Changes in the multifamily
sales program included the

A N N U A L

R E P O R T

following:
H In a portfolio sale of multifam­
ily properties, purchasers must
commit at least 15 percent of the
units per property for very lowincome or lower-income families
(this rule affects properties whose
marketing period commenced on
or after June 2,1992).
H The RTC will give discounts
to purchasers who commit to
setting aside more than 35 per­
cent of the units for very lowand lower-income occupancy.

1 9 9 2

A N N U A L

R E P O R T




.j
/_,




* '< *

'*

.'.A'

/'

-.f ^ *

-

^

"-A :

^

-l-i

^

','.'-'.y;:

-r-'

"

;7,-

/-W./'

^

^

R E G U L A T I O N S

Real Estate Appraisals

Fina! Ru!es
Restrictions on the
Sale of Assets by the
Resolution Trust
Corporation
Published July 21, 1992;
Effective August 20, 1992
The RTC adopted a regulation
requiring that assets held by the
RTC in the course of liquidating
federally insured savings associa­
tions not be sold to persons
who, in ways specified in the
Comprehensive Thrift and Bank
Fraud Prosecution and Taxpayer
Recovery Act of 1990, con
tributed to the demise of the
savings associations. The rule is
intended to accomplish the
Congressional directive by
implementing a self-certification
process that is a prerequisite to
the sale of assets by the RTC.
The regulation provides defini­
tions that clarify the intent of
Congress regarding the scope of
the statutory prohibitions.

Disclosure o f
Information
October 29, 1992
The RTC adopted a regulation
for the processing of requests for
access to RTC records, other
than the records of the RTC
Inspector General, pursuant to
the Freedom of Information Act
(FOIA). This regulation estab­
lishes the procedures to be used
by the public to request records
from the RTC, the procedures
to be used to appeal a decision
to deny access to records, and
the fees for access to records.

R E S O L U T I O N



T R U S T

C O R P O

Published November 2,
1992; E lectiv e December 2,
1992
The RTC amended its real estate
appraisal regulations, identifying
additional transactions for which
the services of an appraiser are
not required. This regulation
eliminates the requirement for
regulated institutions (i.e.,
depository institutions under
RTC conservatorship or
receivership) to obtain appraisals
by certified or licensed appraisers
for real estate-related financial
transactions having a value, as
defined in the regulation, of
$100,000 or less; permits regu­
lated institutions to use
appraisals prepared for loans
insured or guaranteed by an
agency of the federal govern­
ment if the appraisal conforms to
regulations or other require­
ments of the federal insurer or
guarantor; exempts appraisals
involving one- to four-family res­
idential properties from certain
minimum appraisal standards
under specified conditions; and
adds a definition of "real estate"
and "real property" to clarify
that the appraisal regulation does
not apply to transactions involv­
ing mineral rights, timber rights,
growing crops, or water rights.
The regulation also incorpo­
rates three technical amend­
ments. The first technical
amendment clarifies that the
requirements of the appraisal
regulation must be met for all
real estate-related financial trans­
actions except those in which the
services of an appraiser are not
required under the regulation.
The second technical amend­
ment confirms that in accor­
R A T ! 0 N

dance with the Federal Deposit
Insurance Corporation
Improvement Act of 1991, the
RTC delayed until December 31,
1992, the date by which statecertified and licensed appraisers
must be used for all federally
related transactions. The third
technical amendment clarifies
that the appraisal regulation does
not apply to loans not secured
by real property.

OfHce o f Inspector
General: Privacy Act
Regulations
December 2, 1992
The RTC Office of Inspector
General (OIG) adopted a regu­
lation for the processing of
requests for access to or amend­
ment of records pursuant to the
Privacy Act of 1974. This regula­
tion establishes the procedures
to be used in requesting records
from the RTC OIG, the proce­
dures for contesting the content
of records, and the identification
of records systems that are
exempt from the access, amend­
ment, and disclosure accounting
provisions of the Privacy Act.
One records system exempt from
certain provisions of the Privacy
Act, entitled "Office of
Inspector General Investigative
Files," contains investigatory
material compiled for law
enforcement purposes and for
determining suitability, eligibili­
ty, or qualifications for federal
civilian employment, federal
contracts, or access to classified
information.

1 9 9 2

interim Fina! Ruies
Affordable Housing
Disposition Program
May 6,1992
The RTC adopted an interim
final rule amending the existing
regulations governing its
Affordable Housing Disposition
Program because the Resolution
Trust Corporation Refinancing,
Restructuring, and
Improvement Act of 1991
changed the manner in which
the RTC is to identify, market,
and sell certain affordable hous­
ing properties. This interim final
rule also clarifies certain policies
of the RTC regarding the dispo­
sition of assets in the affordable
housing program, thereby
enhancing the availability and
affordability of residential real
property fbr very low income,
lower-income, and moderateincome families and individuals.

Minority and W omen
Outreach Contracting
Program
August 10,1992
The RTC adopted an interim
final rule fbr the RTC to identify,
promote, and certify eligible
firms fbr inclusion in its con­
tracting activities, while assuring
that the RTC's use of privatesector services is accomplished
practicably and efficiently. The
RTC deemed it appropriate to




design a program that will
aggressively reach out to minori­
ties and women, and firms
owned by minorities and
women, enabling them to partic­
ipate more fully in RTC con­
tracting activities through joint
venture agreements and other
devices. The RTC also will pro­
vide incentives (i.e., cost and
technical bonuses) to firms
owned by minorities and women
when evaluating competitive
offers to contract. The rule also
governs the identification, pro­
motion, and certification of eligi­
ble law firms fbr inclusion in the
RTC legal services contracting
process.

interim Ruies
Privacy Act
Regulations
September 22, 1992
The RTC adopted an interim
rule fbr the processing of
requests fbr access to or amend­
ment of records, other than the
records of the RTC Inspector
General, pursuant to the Privacy
Act of 1974. The rule also estab­
lishes administrative appeals pro­
cedures and conditions fbr
disclosure of information from a
records system outside the
Corporation. In addition, the
rule exempts certain records sys­
tems from certain sections of the
Privacy Act.

A N N U A L

R E P O R T

Proposed
Reguiations
Procedures Applicable
to RTC Investigations
July 27, 1992
The RTC proposed regulations
fbr procedures to be used in
RTC investigations that involve
the exercise of powers, including
subpoena powers, contained in
section 8(n) of the Federal
Deposit Insurance Act, as
amended. The RTC is autho­
rized under FIRREA to exercise
such investigatory powers in car­
rying out its statutory obliga­
tions to resolve failed savings
associations.

Program Fraud Civil
Remedies and
Procedures
November 18, 1992
The RTC proposed rules to
implement the Program Fraud
Civil Remedies Act of 1986. The
proposed rules would establish
administrative procedures fbr
determining whether to impose
the statutorily authorized civil
penalties against any person who
makes, submits, or presents a
false, fictitious, or fraudulent
claim or written statement to the
Corporation.

9 92

A N N U A L

R E P O R T

H







RESOLUTION TRUST C O R P O R A T E STATEMENTS OF F!NANC!AL P O S !T !O N
(dottars in thousands)

December 31,1992

December 31,1991

ASSETS
Cash (Note 3)

$ 3,048,320

$ 9,034,326

9 ,3 3 1,3 48

15 ,9 2 7,9 6 7

32,490,003

3 7 ,5 1 6 ,1 4 4

Net advances (Note 4 ,6 ,1 5 and 18)
Net subrogated ctaims (Note 5 ,6 ,1 5 and 18)
Net assets purchased by the Corporation (Note 6 ,7 and 15)

0

82,305

13,398

Other assets

13 ,3 19

TOTALASSETS(Note 14)

$44,965,295

$62,491,835

L!AB!L!T!ES
Accounts payabte, accrued tiabitities, and other (Note 16 and 1 7 )

$

224,558

$

275 ,636

2 9 ,1 1 1

1,6 3 4 ,19 9

Notes payabte and accrued interest (Note 9)

3 7 ,4 7 4 ,3 7 1

5 7,5 18 ,5 6 1

Estimated cost of unresotved cases (Note 6 ,1 0 and 15)

16,858,857

25,492,652

3 75 ,3 75

197,5 9 9

Due to receiverships (Note 8)

Estimated tosses from corporate litigation (Note 6 and 1 1 )

54,962,272

85,118,647

Contributed capita) (Note 3)

55 ,5 22,0 19

4 8 ,8 2 7,5 5 1

Capita) certificates

3 1,28 6 ,32 5

3 1,2 8 6 ,12 2

TOTALL!AB)L!T!ES
EQU!IY

Accumutated deficit

TOTALEQUMY(Note 12)
TOTALL!AB!L!T!ESANDEQU!TY(Note 14)
See accompanying notes

R E S O L U T I O N




T R U S T

C O R P O R A T i O N

(9 6 ,8 0 5 ,3 2 1)

(10 2 ,7 4 0 ,4 8 5 )

(9,996,977)

(22,626,812)

$44,965,295

$62,491,835

1 9 9 2

A N N U A L

R E P O R T

R E S0 L UT !0 N TRUST C O R P O R A T E STATEMENTS OF REVENUES, EXPENSES ANO ACCUMULATED OEF!C!T
(dollars in thousands)

Year Ended
December 31,1992

Year Ended
December 31,1991

REVENUES
Interest on advances and subrogated ctaims

532,183

$

1 ,4 7 3 ,1 7 4

Other interest income

10 ,087

14,300

Other revenue (Note 3)

33,288

19,085

575,558

1,506,559

TOTALREVENUES
EXPENSES
Interest expense on notes issued by the Corporation
Interest expense on amounts due receiverships
Reduction in loss allowances (Note 6)
Administrative operating and other expenses (Note 2 ,1 4 and 17)

TOTALEXPENSES
NETREVENUE(LOSS)

1,928,623

3 ,4 72 ,2 8 8

774 ,3 2 0

1,9 03 ,837

(8 ,1 1 6 ,7 6 2 )

(1 ,4 4 9 ,1 9 1 )

5 4 ,2 13

29,957

(5,359,606)

3,956,891

5 ,9 3 5 ,16 4

(2,45 0 ,33 2)

ACCUMULATEDDEF!C!T, BEG!NN)NG

(10 2 ,74 0 ,4 8 5 )

(10 0 ,2 9 0 ,15 3 )

ACCUMULATEDDEF!C!T, END!NG(Note 12)

($96,805,321)

($102,740,485)

See accompanying notes




1 9 9 2

A N N U A L

R E P O R T

H

F ! \

\ \ ( i \ i

S T A T E M E N T S

AND

! N T E R N A L

C O N T R O L S

RESOLUTiON TRUST CORPORATiON STATEMENTS OF CASH FLOWS
(dotiars in thousands)

Year Ended
December 31,1992

Year Ended
December 31,1991

CASHFLOWSFROMOPERAUNGACT!V!T!ES
Cash inftowsfrom:
$29,655,899

$ 17,6 6 5 ,4 8 8

1 4 ,7 7 2 ,7 0 1

2 3 ,0 6 4 ,17 4

Receipts of interest on advances

75 4,48 0

1,595,363

Receipts from asset tiquidations

53,089

Receipts from other operations

3 2 ,14 0

Receipts from subrogated ctaims
Repayments of advances and reimbursabte expenditures

0
2 7,6 5 7

Cash outftows for:
Disbursements for subrogated ctaims

(2 2 ,6 6 8 ,74 7 )

(5 6 ,19 9 ,0 15 )

Disbursem ents for advances

( 1 1 ,7 3 5 ,5 5 7 )

(18 ,4 2 7 ,9 9 6 )

(1,5 5 4 ,5 8 8 )

(1 ,0 2 2 ,1 4 9 )

(4 1,5 5 5 )

(3 1,0 8 1)

(1,6 0 5 ,8 0 7 )

(9 0 7,8 3 1)

Disbursem ents for reimbursabie expenditures
Adm inistrative operating and other expenditures
interest paid on notes payabte

Net Cash Provided (Used) byOperatingActivities (Note 13):

7,662,055

(34,235,390)

CASHFLOWSFROMF!NANC!NGACT!V!T!ES
Cash inftows from:
Contributed capita)
Notes payabte
Capita) certificates

25 ,03 3,510

30,030,328

7,50 0,0 00

12 ,15 0 ,0 0 0

203

7,03 8,2 68

Cash outfiows for:
Contributed capita) returned to the Treasury (Note 1)

( 1 8 ,3 1 4 ,7 6 7 )

0

Repaym ent of notes payabte, principat

(2 7 ,8 6 7 ,0 0 7 )

( 1 1 ,1 2 5 ,6 7 4 )

(13,648,061)

38,092,922

(5,986,006)

3,857,532

9,034,326

5,176,794

$3,048,320

$9,034,326

Net Cash Provided (Used) byFinancingActivities
Net increase (decrease) inCash
CASH-BEG!NN!NG
CASH-END!NG________________________
See accompanying notes

 R E S O L U T i O N


T R U S T

C O R P O R A T i O N

1 9 9 2

A N N U A L

R E P O R T

Resotution Trust Corporation
Motes to Fmancia! Statements
December 31,1992 and 1991
1. Impact o f Legislation
The RTC, a Government Corporation, was created by the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA) to manage and resolve ail troubled savings institutions that were previ­
ously insured by the Federal Savings and Loan Insurance Corporation (FSLIC) and for which a conservator
or receiver was appointed during the period January 1, 1989 through August 8, 1992. In December 1991,
this period was extended to September 30,1993 by the Resolution Trust Corporation Refinancing, Restructuring,
and Improvement Act of 1991.
The activities of the RTC are subject to the general oversight of the Oversight Board, which was redesignat­
ed the Thrift Depositor Protection (TDP) Oversight Board and increased in size by the December 1991 leg­
islation. The TDP Oversight Board monitors the operations of the RTC, provides the RTC with general
policy direction, and reviews the RTC's performance. The seven members on the TDP Oversight Board
include: the Secretary of the Treasury; the Chairperson of the Board of Governors of the Federal Reserve
System; the Director of the OfHce of Thrift Supervision (OTS); the Chairperson of the Board of Directors
of the Federal Deposit Insurance Corporation (FDIC); the Chief Executive Officer of the RTC; and two
independent members appointed by the President, with the advice and consent of the Senate.
Under current law, the RTC will terminate on or before December 31,1996. All remaining assets and liabil­
ities will be transferred to the FSLIC Resolution Fund which is managed by the FDIC. Proceeds from the
sale of such assets will be transferred to the Resolution Funding Corporation (REFCORP) for interest pay­
ments after satisfaction of any outstanding liabilities.
&M4TV2 o f
The RTC is funded from the following sources: 1) U.S. Treasury appropriations and borrowings; 2) a con­
tribution from the Federal Home Loan Banks through REFCORP; 3) amounts borrowed by REFCORP
which is authorized to issue long term debt securities; 4) the issuance of debt obligations and guarantees as
permitted by the TDP Oversight Board; and 5) income earned on the assets of the RTC, proceeds from the
sale of assets, and collections made on claims received by the RTC from receiverships.
The Secretary of the Treasury has contributed capital of $55.5 billion to the RTC as of December 31, 1992,
$18.8 billion of which was authorized by FIRREA, $30 billion of which was authorized by the Resolution
Trust Corporation Funding Act of 1991 and $6.7 billion of which related to the December 1991 legislation
(See Note 12). The December 1991 legislation authorized the Secretary of the Treasury to provide an addi­
tional $25 billion in capital to the RTC for its operations through March 31,1992. These funds were received
in January 1992. In April 1992, the RTC returned $18.3 billion to the Treasury which represented funds not
committed by the March 31, 1992 deadline. No additional capital has been contributed since that date.
The RTC has also issued capital certificates of $31.3 billion to REFCORP as of December 31,1992, includ­
ing $203 thousand of certificates during 1992 and $7.0 billion issued in 1991 (see Note 12). FIRREA pro­
hibits the payment of dividends on any of these capital certificates. The RTC is also authorized to borrow
directly from the Treasury an amount not to exceed in the aggregate $5.0 billion. There have been no draws
against these authorized borrowings through the end of 1992.




1 9 9 2

A N N U A L

R E P O R T

F I N A N C I A L

S T A T E M E N T S

AND

I N T E R N A L

C O N T R O L S

2. Summary o f Significant Accounting Policies
These statements do not include accountability fbr assets and liabilities of closed thrifts for which the
RTC acts as receiver/liquidating agent or of thrifts in conservatorship fbr which the RTC acts as managing agent.
/or ZoRKf
The RTC recognizes an estimated loss on advances. The allowance fbr losses
represents the difference between amounts advanced to conservatorships or receiverships and expected repayments.
/or Lawfy
C/m'wy. The RTC records as assets the amounts disbursed fbr assisting
and closing thrifts, primarily the amounts fbr insured deposit liabilities. An allowance fbr losses is established
against subrogated claims representing the difference between the amounts disbursed and the expected repay­
ments. The allowance is based on the estimated cash recoveries from the assets of the assisted or failed thrifts,
net of estimated asset liquidation and overhead expenses, including interest costs.
Cast o/'
The RTC has recorded the estimated losses related to thrifts in conser­
vatorship and those identified in the regulatory process as probable to fail on or before the statutory date of
September 30, 1993.
ZaHKf. The RTC recognizes an estimated loss fbr litigation against it in its Corporate, conservator­
ship and receivership capacities. The RTC Legal Division recommends these estimated losses on a case-by-case
basis.
a?
SoM. The RTC establishes a contra asset account to record the amount payable
to receiverships fbr the purchase price of receivership assets sold to acquiring institutions in resolution trans­
actions. This is done in lieu of the receivership receiving the cash proceeds from the sale of its assets. This
contra account offsets the balance due from the receiverships fbr subrogated claims. The amounts that exceed
the expected recovery of subrogated claims due from the receiverships are recorded as a liability entitled "Due
to receiverships." The RTC accrues interest on the total of the contra asset and liability accounts.
ylV/w%f3(77%
The RTC shares certain administrative operating expenses with several funds
of the FDIC including the Bank Insurance Fund, the FSLIC Resolution Fund, and the Savings Association
Insurance Fund. The administrative operating expenses include allocated personnel, administrative, and other
overhead expenses.
o/'
The RTC recovers costs incurred by the Corporation in support of liqui­
dation/receivership activities, including a portion of administrative expenses. These costs are billed to indi­
vidual receiverships with the offsetting credits reducing the Corporation's 'Administrative operating and other
expenses."
The cost of furniture, fixtures, equipment and other hxed assets is expensed at the time of acqui­
sition and is reported as 'Administrative operating and other expenses." This policy is a departure from gener­
ally accepted accounting principles, however, the financial impact is not material to the RTC's financial statements.
The RTC considers cash equivalents to be short-term, highly liquid investments with orig­
inal maturities of three months or less. As o f December 31,1992 and 1991, the RTC did not have any cash
equivalents.
Aw
o/'
The balances of Rnancial instruments included in the RTC's Statement
of Financial Position approximate their estimated fair values. The values of "Net advances" and "Net subro­
gated claims" are based on the discounted net cash flows expected to be received from those instruments.
The frequent repricing of the balances of "Due to receiverships" and the short-term nature of "Notes Payable"
result in face amounts of such instruments which approximate their fair values.
Certain balances in the 1991 financial statements have been reclassified fbr comparative pur­
poses.

R E S O L U T t O N


T R U S T

C O R P O R A T i O N

1 9 9 2

A N N U A L

R E P O R T

3. OfHce o f Inspector General
FIRREA established an Inspector General of the Corporation and authorized to be appropriated such sums
as may be necessary for the operation of the OfHce of Inspector General (OIG). All financial transactions
related to the OIG are included in the Corporation's financial statements.
The OIG has received $74.6 million of appropriated funds from the U.S. Treasury since it was established of
which $33.5 million relate to the Government's Fiscal Year (FY) 1993 and $30.3 million relate to FY 1992.
These funds are used to finance the activities of the OIG. Restricted amounts of $6,845,045 for FY 1992 and
$32,414 for FY 1991 are included in "Cash." These funds were unobligated at year end.
Reductions to the OIG appropriated funds resulting from obligations are recorded as "Other revenue."
Accordingly, the OIG appropriated funds were reduced by $24,274,873 and $12,867,302 during 1992 and
1991, respectively, and recorded as "Other revenue."
Disbursements of the OIG appropriated funds for expenditures are recorded as "Administrative operating
and other expenses." These disbursements totalled $20,955,917 during 1992 and $11,622,049 during 1991.
As of December 31, 1992 and 1991, the unobligated OIG appropriation balances included in "Contributed
capital" were $36.8 million and $27.5 million, respectively.

4. Net Advances (in thousands)
The RTC makes advances to receiverships and conservatorships. Advances are made to conservatorships to
provide funds for liquidity needs and to reduce the cost of funds, and to receiverships to provide working
capital. The advances generally are either secured by the assets of the conscrvatorship or receivership at the
time the advances were made or have the highest priority of unsecured claims. The Corporation accrues inter­
est on these advances which is included in the Statements of Revenues, Expenses and Accumulated Deficit.
The Corporation expects repayment of these advances, including interest, before any subrogated claims are
paid by receiverships. The advances carry a floating rate of interest based upon the 13-week Treasury Bill rate.
Interest rates charged during 1992 ranged between 2.98% and 4.44%, and between 4.10% and 6.97% in 1991.
At December 31, 1992 and 1991, the interest rates on advances were 3.54% and 4.26%, respectively.

Advances to conservatorships
Advances to receiverships

December 31,
1992

December 31,
1991

$ 6 ,7 7 7 ,0 6 6

$ 4 ,9 3 1 ,0 2 1

6,3 79,43 6

13,402,648

4 1 9 ,6 1 1

750,398

38,921

326,789

Reimbursements due from receiverships
andconservatorships
Accrued interest
Write-offs attermination-advances
(Note 6 and 7)

(3,575)

0

(3 ,9 0 7,0 79 )

(3,482,889)

(373,032)

0

$9,331,348

$15,927,967

Atlowance for tosses on receivership
advances (Note 6)
Attowance for tosses on conservatorship
advances (Note 6)




1 9 9 2

A N N U A L

R E P O R T

F ! N A N C ! A L

S T A T E M E N T S

AND

! N T E R N A L

C O N T R O L S

Reimbursements due from receiverships and conservatorships represent operating expenses paid by the RTC
on behalf of the receiverships and conservatorships for which repayment is expected in full. Interest is not
accrued on these reimbursements.

5. Net Subrogated Claims (in thousands)
Subrogated claims represent disbursements made by the RTC primarily for deposit liabilities. The Corporation
recognizes an estimated loss on these subrogated claims. These estimates are based in part on a statistical sam­
pling of receivership assets subject to a sampling error of plus or minus $1.8 billion with a 95 percent confi­
dence interval.
The value of assets under RTC management could be lower (or higher) than projected because general eco­
nomic conditions, interest rates and real estate markets could change. Because of these uncertainties, it is rea­
sonably possible that the actual losses may be higher (or lower) than the current "Allowance for losses on
subrogated claims."
Receiverships frequently sell a portion of their assets to institutions acquiring their deposit liabilities. In lieu
of the receiverships receiving cash fbr the sale, the purchase price of the assets sold is recorded by the receiver­
ship as a receivable and by the RTC in a contra asset account entitled "Due to receiverships - assets sold."
This account is offset against subrogated claims expected to be collected from the receivership. The portion
of the contra asset account, if any, in excess of expected subrogated claim recoveries is recorded as a liability
entitled "Due to receiverships" (see Note 8). The RTC accrues interest payable to the receiverships on the
total of the contra asset and liability accounts. The rates used by the RTC to accrue interest are based upon
the Chicago FHLB Daily Investment Deposit Rates. Interest rates paid during 1992 ranged between 2.59%
and 4.74%, and between 3.83% and 7.68% in 1991. At December 31, 1992 and 1991, the interest rates paid
on these accounts were 2.63% and 4.70%, respectively.

Subrogated claims
Recovery of subrogated claims
Claims of depositors pending and unpaid
Due to receiverships-assets sold
Write-offs at termination-subrogated claims
(Note 6 and 7)
Allowance for losses on subrogated claims (Note 6)

R E S O L U T i O N


T R U S T

C O R P O R A T i O N

December 31,
1992

December 31,
1991

$200,461,308

$ 172 ,6 2 5 ,2 0 5

(92,855,555)
19 ,9 74

(4 1,5 6 8 ,75 5 )
50,990

(7,5 2 0 ,3 78 )

(25,503,185)

(3 5 2 ,712 )

0

(67,26 2,63 4)

(6 8 ,0 8 8 ,111)

$32,490,003

$ 37,516,144

1 9 9 2

A N N U A L

R E P O R T

6. Changes in Allowance for Losses (in thousands)
Attowance for

Attowance for

Attowance for

Estimated cost

Estimated tosses

losses on

tosses on

tosses on

of unresotved

from corporate

subrogated ctaims

advances

corp assets

cases

titigation

$ 41,208,071

$1,402 ,742

Batance, Dec 3 1 ,1 9 9 0

$

0

TOTAL

$ 55,94 1,445

$158,1 84

$98,71 0,442

Provision (reductions)

(6,779,500)

2,080,147

-

3,210,747

39,415

(1,449,191)

Reclassifications

33,65 9 ,5 4 0

-

-

(33 ,659,540)

-

0

Batance, Dec 3 1 ,1 9 9 1

68,088,111

3,482,889

0

25,492 ,652

197,599

97,261 ,251

Provision (reductions)

(7,663,264)

800,79 7

11,225

(1,443,296)

177,776

(8,116,762)

(352,712)

(3,575)

-

-

-

(356,287)

7,190,499

-

-

(7,190,499)

-

0

$67,262,634

$4,280,111

$11,225

$16,858,857

$375,375

Write-offs at termination
(Note 7)
Rectassitications
Batance, Dec 3 1,19 9 2

$88,788,202

The "Allowance for losses on subrogated claims" includes future interest costs and overhead expenses. Total
"reductions" in loss allowances contain the offset of net interest costs incurred in the current period that were
previously included in provisions. "Reclassifications" represent amounts transferred from "Estimated cost of
unresolved cases" to "Allowance for losses on subrogated claims" as a result of case resolutions.

7. Net Assets Purchased by the Corporation (in thousands)
During 1992, the RTC initiated a program to purchase the remaining assets of selected receiverships in order
to pay a final dividend to the receiverships'* creditors and to begin the process of legally terminating the receiver­
ship entities.
As of December 31, 1992, the RTC had purchased assets for $142 million from 36 receiverships and is com­
pleting the necessary procedures to terminate the receivership entities. Assets purchased include mortgage
loans backed by 1-4 family homes, multi-family dwellings or commercial real estate; consumer loans; real
estate; and other assets including receivership interests in credit enhancement reserve funds created when
receiverships participated in RTC loan securitizations. Upon termination, the RTC may realize a loss on
advances and subrogated claims that was previously included in the respective allowances and recognized in
the provision for losses in a prior year.

December 31,
1992
Assets purchased

December 31,
1991

$ 1 4 1 ,7 9 5

$0

Sales, collections and adjustments

(48,265)

0

Allowance for tosses on corporate assets (Note 6)

(1 1 ,2 2 5 )

(0)

$82,305

$0




1 9 9 2

A N N U A L

R E P O R T

F I N A N C ! A L

S T A T E M E N T S

AND

) N T E R N A L

C O N T R O L S

8. Due to Receiverships
Receiverships frequently sell some of their assets to institutions acquiring their deposit liabilities. In lieu of
the receiverships receiving cash fbr the sale, the RTC establishes a contra asset account equal to the purchase
price of the assets sold and the receiverships record a receivable. This account is offset against the subrogat­
ed claims due from the receivership to the extent that the RTC expects full repayment of such claims. If a
receivership's contra account exceeds the expected repayment of its subrogated claims to the RTC, the excess
is recorded as "Due to receiverships." The balance of "Due to receiverships" was $29.1 million and $1.6 bil­
lion at December 31, 1992 and 1991, respectively.

9. Notes Payable and Accrued Interest
Working capital has been made available to the RTC under an agreement between the RTC and the Federal
Financing Bank. The working capital is available to fund the resolution of thrifts and fbr use in the RTC's
high-cost funds replacement and emergency liquidity programs. The outstanding notes mature at the end of
each calendar quarter, at which time they are generally refinanced at similar terms. Payments on the note bal­
ance may also be made during each calendar quarter. The notes payable carry a floating rate of interest estab­
lished by the Federal Financing Bank and ranged between 2.82% and 5.09% during 1992 and between 5.09%
and 6.76% in 1991. As of December 31, 1992 and 1991, the RTC had $37.5 billion and $57.5 billion, respec­
tively, in borrowings and accrued interest outstanding from the Federal Financing Bank. These borrowings,
approved by the Oversight Board, are within the limitations imposed under FIRREA.

10. Estimated Cost of Unresolved Cases
The RTC has established a liability of $16.9 billion at December 31, 1992 fbr the anticipated costs of resolv­
ing an additional 120 troubled institutions. Of the 120 institutions, 81 were in conservatorship as of that date.
The other 39 associations were identified by the OTS as institutions fbr which it is probable that government
assistance may be required by September 30, 1993, the last date by which the RTC may be appointed con­
servator.
The 1992 "Estimated cost of unresolved cases" has declined from the December 31,1991 and 1990 estimates
of $25.5 billion and $55.9 billion, respectively. The primary reason fbr this decline was the resolution of 69
cases during 1992 and 232 cases during 1991, leaving fewer unresolved cases at the end of each year.
The OTS has also identified 52 savings associations fbr which it is reasonably possible that government assis­
tance may be required by September 30, 1993. The estimated cost to resolve these 52 institutions could total
an additional $2 billion.
Furthermore, the value of assets anticipated to come to the RTC could be lower (or higher) than projected
because general economic conditions, interest rates, and real estate markets could change. Because of these
uncertainties, it is reasonably possible that the cost of unresolved cases will be higher (or lower) than what
has been estimated.

 R E S O L U T i O N


T R U S T

C O R P O R A T i O N

1 9 9 2

A N N U A L

R E P O R T

11. Estimated Losses from Corporate Litigation
As of December 31,1992, the RTC has been named in several thousand lawsuits while serving in its Corporate,
conservatorship or receivership capacities. Currently, it is not possible to predict the outcome for all of the
various actions. An allowance for loss totalling $375.4 million has been established as of December 31, 1992
for the 71 actions that management feels are probable to result in a significant loss ($197.6 million at December
31, 1991 fbr 77 actions). Additionally, the Corporation could possibly incur further losses from other pend­
ing lawsuits and other yet unasserted claims.

12. Changes in Equity (in thousands)
Contributed
Capita!
Batance, Dec 3 1 ,1 9 9 0

18 ,8 10 ,0 9 0

Capitai
Certificates

Accumuiated
Deficit

$ 2 4 ,2 4 7 ,8 5 4

$ (10 0 ,2 9 0 ,15 3 )

$ (5 7,2 3 2 ,2 0 9 )

(2,45 0 ,3 3 2)

(2,45 0 ,33 2)

19 9 1 Net toss

Tota!
Equity

Resotution Trust Corporation
Funding Act of 19 9 1
FY 92 OtG appropriation
19 9 1 Obtigated OtG funds

30,000,000
30,328

30,328

(12 ,8 6 7 )

(12 ,8 6 7 )

tssuance of capita! certificates:
01/23/91
Batance, Dec 3 1 ,1 9 9 1

30,000,000

7,0 3 8 ,2 6 8
4 8 ,8 2 7 ,5 5 1

3 1 ,2 8 6 ,1 2 2

7,0 3 8 ,2 6 8
(10 2 ,7 4 0 ,4 8 5 )
5 ,9 3 5 ,16 4

1992 Net revenue

(2 2 ,6 2 6 ,8 12 )
5 ,9 3 5 ,16 4

Resotution Trust Corporation
Refinancing, Restructuring and
6,685,233

6,685,233

FY 93 OtG appropriation

3 3 ,5 10

3 3 ,5 10

1992 Obtigated OtG funds

(2 4 ,2 75 )

(2 4 ,2 75 )

tmprovement Act of 199 1

tssuance of capita) certificates:
01/30/92

Baiance, Dec 31,1992




203

$55,522,019

$31,286,325

203

$(96,805,321)

1 9 9 2

$(9,996,977)

A N N U A L

R E P O R T

0

F ! N A N C ! A L

S T A T E M E N T S

AND

! N T E R N A L

C O N T R O L S

13. Supplementary Information Relating to the Statement o f Cash Flows
(in thousands)
Reconciliation of net revenue (loss) to net cash provided (used) by operating activities:

For the Years Ended
December 31,
December 31,
1991
1992
$

Net Revenue (Loss)

Reduction in toss attowances
interest expense financed as additionat notes payabte

5 ,9 3 5 ,16 4

(8 ,1 1 6 ,7 6 2 )
5 4 5 ,2 15

$

(2,45 0 ,3 3 2)

(1 ,4 4 9 ,1 9 1 )
3 ,0 0 1 ,6 7 2

(222,3 98)

(4 3 7 ,2 15 )

tncrease in accrued interest on amounts due to receiverships

7 7 4 ,3 2 0

1,9 0 3 ,8 3 7

Decrease in accrued interest due from advances

2 3 8 ,1 1 5

12 2 ,3 5 1

Receipts from subrogated ctaims

29 ,655,899

1 7 ,6 6 5 ,4 8 8

Repaym ents of advances and reimbursabte expenditures

1 4 ,7 7 2 ,7 0 1

2 3 ,0 6 4 ,1 7 4

Decrease in accrued interest on notes payabte

0

Receipts from asset tiquidations

53,089

tncrease (decrease) in accounts payabte, accrued tiabitities and other

(7,4 0 0 )

1 2 7 ,8 1 4

(tncrease) decrease in reimbursabte portion of tiabitities above

39,045

(12 0 ,0 1 6 )

Disbursem ents for advances

( 1 1 ,7 3 5 ,5 5 7 )

(18 ,4 2 7 ,9 9 6 )

Disbursem ents for subrogated ctaims

(2 2 ,6 6 8 ,74 7 )

(5 6 ,19 9 ,0 15 )

(1,5 5 4 ,5 8 8 )

(1 ,0 2 2 ,1 4 9 )

OtG income recognized

(2 4 ,2 75 )

(1 2 ,8 6 7 )

Other non-cash income and expenses (net)

(22,56 4)

0

Disbursements for reimbursabte expenditures

Decrease (increase) in other assets

Net cash provided (used) byoperatingactivities

__________ 7 9 8 _

$ 7,662,055

(1,9 4 5 )

$(34,235,390)

Noncash transactions incurred from thrift assistance and failures (in thousands):
H $7,190,499 and $33,659,540 were reclassified from "Estimated cost of unresolved cases" to "Allowance
for losses on subrogated claims" during 1992 and 1991, respectively, due to the resolution of 69 cases dur­
ing 1992 and 232 cases in 1991.
H "Due to receiverships - assets sold" decreased by $3,661,299 and $0 in 1992 and 1991, respectively, with
offsetting decreases of $3,611,547 and $0 to 'Advances to receiverships" and of $49,752 and $0 to 'Accrued
interest" to repay receivership advances and related interest.
H $545,215 and $3,001,672 of interest expense was financed through increases in notes payable in 1992 and
1991, respectively.
H "Recovery of subrogated claims" increased by $21,630,902 and $20,873,976 during 1992 and 1991, respec­
tively, with an offsetting decrease in "Due to receiverships - assets sold", to record liquidating dividends
declared by receiverships.
H "Subrogated claims" increased by $5,190,331 and $14,852,406 in 1992 and 1991, respectively, resulting
from resolution activity with an offsetting increase in "Due to receiverships - assets sold."

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H "Due to receiverships" decreased by $1,605,088 and increased by $443,526 in 1992 and 1991, respectively,
with the offset to "Due to receiverships - assets sold" (a component of "Net subrogated claims") fbr amounts
exceeding the expected recovery of subrogated claims due from the receiverships.
H "Reimbursements due from receiverships and conservatorships" decreased by $389,551 and $388,500 dur­
ing 1992 and 1991, respectively, with an offsetting decrease to "Due to receiverships - assets sold."
H "Due to receiverships - assets sold" increased by $141,795 and $0 in 1992 and 1991, respectively, with an
offsetting increase to "Net assets purchased by the Corporation" relating to the purchase of receivership assets
by the Corporation.

14. Related Party Transactions
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 established the RTC to manage
and resolve failed savings institutions that were formerly insured by the FSLIC and fbr which a receiver or con­
servator was appointed after January 1, 1989. At December 31, 1992, there were 734 institutions with $124.0
billion of assets fbr which the RTC was appointed conservator or receiver. This compares to 675 institutions
with $164.5 billion of assets at December 31, 1991.
In its fiduciary capacity as receiver or conservator, the RTC has substantial control over the operations of the
institutions placed in receivership or conservatorship by the OTS. The RTC, as receiver or conservator, has ulti­
mate authority in the day-to-day operations, including the timing and methods of the disposal of the institu­
tions' assets in an effort to maximize returns on such assets.
The RTC does not include the assets and liabilities of the receiverships and conservatorships in its financial state­
ments. However, certain transactions with these institutions, including advances to and receivables from the
institutions, as well as interest paid or received on such items, are included in the RTC's financial records. At
December 31, 1992, the net balances of advances and subrogated claims were $9.3 billion and $32.5 billion
(net of "Due to receiverships - assets sold" of $7.5 billion), respectively. The RTC owed $7.5 billion to receiver­
ships, including the liability account of $29 million, at December 31, 1992 resulting from resolution transac­
tions (see notes 5 and 8). Interest income earned on advances and subrogated claims was $0.5 billion during
the year ended December 31, 1992 and interest expense on amounts due receiverships was $0.8 billion.
At December 31, 1991, the net balances of advances and subrogated claims were $15.9 billion and $37.5 bil­
lion (net of "Due to receiverships - assets sold" of $25.5 billion), respectively. Total amounts due receiverships
were $27.1 billion, including the liability account of $1.6 billion. Interest income on advances and subrogated
claims was $1.5 billion during the year ended December 31,1991 and interest expense on amounts due receiver­
ships was $1.9 billion.
The RTC funds the activities of the TDP Oversight Board based on its fiscal year budgets. The amounts fund­
ed in 1992 and 1991 were $5.0 million and $6.1 million, respectively. These amounts are subject to the
Corporation's policy of allocating corporate expenses to the receiverships.
'Administrative operating and other expenses" fbr the Corporation were $54.2 million and $30.0 million fbr
the years ended December 31, 1992 and 1991, respectively (total costs of $970.9 million and $734.3 million
less $916.7 million and $704.3 million billed back to receiverships during 1992 and 1991, respectively).




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15. Commitments and Guarantees
Securitization Credit Reserves:

In 1992, the RTC sold through its securitization program $22.6 billion of receivership, conservatorship and
Corporate loans ($10.2 billion during 1991). The loans sold were secured by various types of real estate includ­
ing 1-4 family homes, multi-family dwellings and commercial real estate. Each securitization transaction is
accomplished through the creation of a trust, which purchases the loans to be securitized from one or more
institutions for which the Corporation acts as a receiver or conservator or purchases loans owned by the
Corporation. The loans in each trust are pooled and stratified and the resulting cash Row is directed into a
number of diHerent classes of pass-through certificates. The regular pass-through certificates are sold to the
public through licensed brokerage houses. RTC and its receiverships and conservatorships retain residual pass­
through certificates which are entitled to any remaining cash flows from the trust after obligations to regular
pass-through holders have been met.
To increase the likelihood of full and timely distributions of interest and principal to the holders of the regu­
lar pass-through certificates, and thus the marketability of such certificates, a portion of the proceeds from
the sale of the certificates is placed in credit enhancement reserve funds (reserve funds) to cover future cred­
it losses with respect to the loans underlying the certificates. The reserve funds' structure limits the receiver­
ships', conservatorships' or Corporation's exposure from credit losses on loans sold through the RTC
securitization program to the balance of the reserve funds. The initial balances of the reserve funds are deter­
mined by independent rating agencies and are subsequently reduced for claims paid. Through December
1992, the amount of claims paid is less than 1% of the reserve balances. At December 31, 1992 and 1991,
reserve funds related to the RTC securitization program totalled $6.2 billion and $2.0 billion, respectively.
O f the total reserve funds, $4.5 billion relate to receivership reserves ($1.5 billion for 1991), $1.6 billion relate
to conservatorship reserves ($0.5 billion for 1991), and $20 million relate to Corporate reserves ($0 for 1991).
RTC management expects to recover a substantial portion of the reserve funds over time. The RTC estimates
Corporate losses related to the receiverships' reserve funds as part of the RTC's allowances for losses. Additionally,
the RTC estimates Corporate losses related to conservatorships' reserve funds as part of the RTC's "Estimated
cost of unresolved cases." As of December 31, 1992, the RTC included $1.3 billion in these provisions to
cover estimated losses on the reserve funds ($0.3 billion as of December 31, 1991).
Representations and Warranties:

The RTC provides certain representations and warranties on loans sold through the securitization program.
Funds have been placed in escrow by the receiverships and conservatorships participating in the securitiza­
tion transactions to honor obligations that may arise from the representations and warranties. The Corporation
has also established a liability for the estimate of representation and warranty claims associated with the secu­
ritization transactions that involved corporate purchased assets.
The RTC has provided guarantees, representations and warranties on approximately $39 billion in unpaid
principal of loans sold for cash or exchanged for mortgaged-backed securities. The RTC also has provided
guarantees, representations and warranties on approximately $129 billion of loans under servicing right con­
tracts which have been sold. The representations and warranties made in connection with the sale of servic­
ing rights are limited to the responsibilities of acting as a servicer of loans. Where there are corporate guarantees,
institutions have established escrow fund accounts containing a portion of the sales proceeds to honor any
obligations that might arise from the guarantees, representations and warranties.
The RTC estimates Corporate losses related to the receiverships' representation and warranty claims as part
of the RTC's allowances for losses. Additionally, the RTC estimates Corporate losses related to the conser­
vatorships' representation and warranty claims as part of the RTC's "Estimated cost of unresolved cases." As
of December 31,1992, the RTC included $1.5 billion in these provisions to cover the estimated costs of rep­
resentation and warranty claims ($0.2 billion as of December 31, 1991).

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Letters of Credit:

The RTC has adopted special policies for outstanding RTC conservatorship and receivership collateralized
letters of credit. These policies enable the RTC to minimize the impact of its actions on capital markets. In
most cases, these letters of credit are used to guarantee tax exempt bonds issued by state and local housing
authorities or other public agencies to finance housing projects for low and moderate income individuals or
families. As of December 31, 1992, the RTC has issued a commitment to honor approximately $4.6 billion
of these letters of credit. The total amount that will ultimately be paid, the fair value of such letters of cred­
it, and the losses resulting from these letters of credit are not reasonably estimable at December 31, 1992.
Affordabte Housing Program:

As part of its Affordable Housing Program, RTC management has committed to expend up to $6 million to
pay reasonable and customary commitment fees to various state and local housing authorities who will, in
turn, assist in providing financing to low and moderate income families. Under this program, the RTC works
with state and local housing finance agencies to secure commitments of Mortgage Revenue Bond and Mortgage
Credit Certificate funds which will be lent to qualifying families to enable them to purchase properties from
the RTC. At December 31, 1992, $2.1 million remains unexpended. No substantial recoveries are anticipat­
ed from the program.
Renta! Expense:

The RTC is currently leasing office space at several locations to accommodate its staff. As of December 31,
1992, these offices include: (1) the Washington, D.C., Headquarter offices, (2) the six megasite offices, and
(3) the seven satellite offices located throughout the country. Two additional satellite offices have closed as
of December 1992 and the RTC remains obligated for the remainder of their lease terms pending negotia­
tions for lease buyouts or subleases. These obligations total $5.2 million. In addition, the Tampa, Baton
Rouge, Phoenix, and San Antonio offices have closed during the beginning of 1993 and their collective oblig­
ations for leases total $8.5 million. The RTC's rental expense for 1992 and 1991 totalled $44.8 million and
$41.1 million, respectively. The RTC's total contractual obligations under lease agreements for office space
are approximately $170.5 million. These agreements often contain escalation clauses which can result in adjust­
ments to rental fees for future years. The minimum yearly rental expense for all locations is as follows (in thou­
sands):
1993

1994

1995

1996

19 9 7

1998/Thereafter

$ 4 4 ,2 5 4

$ 3 6 ,7 7 1

$ 3 1,5 9 6

$ 18 ,2 7 5

$ 6 ,6 1 6

$ 3 2 ,9 8 9

Lease obligations for 1997 and beyond are exclusively fbr the RTC headquarters building in Washington,
D.C. This lease was entered into by the now defunct FSLIC in 1987. At the date of RTC's termination, which
under current law shall not be later than December 31, 1996, all of the RTC's debts, obligations and assets,
including the above lease obligations, shall be transferred to the FSLIC Resolution Fund which is managed
by the FDIC.

16. Pension Plan and Accrued Annual Leave
The FDIC eligible employees assigned to the RTC are covered by the Civil Service Retirement System and
the Federal Employees Retirement System. Employer contributions provided by the RTC fbr all eligible
employees fbr the years ended December 31, 1992 and 1991 were approximately $16.9 million and $12.4
million, respectively.
Although the RTC contributes a portion of pension benefits fbr eligible employees and makes the necessary
payroll withholdings from them, the RTC does not account fbr the assets of either of these retirement funds
and does not have actuarial data with respect to accumulated plan benefits or the unfunded liability relative
to its eligible employees. These amounts are reported by the U.S. OfHce of Personnel Management (OPM)



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and are not allocated to the individual employers. OPM also accounts fbr Federal health and life insurance
programs fbr those RTC retired eligible employees who had selected Federal government sponsored plans.
The RTC's liability to employees fbr accrued annual leave was approximately $20.0 million at December 31,
1992, and $17.0 million at December 31, 1991.

17. Health, Dental and Life Insurance Plans fbr Retirees
The RTC, through its association with the FDIC, provides certain health, dental and life insurance coverage
fbr its eligible retirees, the retirees' beneficiaries and covered dependents. Eligible retirees are those who have
elected the FDIC's health and/or life insurance programs and are entitled to an immediate annuity (dental
coverage is automatic at retirement). The health insurance coverage is a comprehensive fee-for-service pro­
gram, with hospital coverage and a major medical wraparound.
Corporate contributions fbr retirees are the same as those fbr active employees. Premiums are paid to the
FDIC, where they are held until plan fixed costs and expenses are paid. The life insurance program provides
fbr basic coverage at no cost and allows converting optional coverages to direct-pay plans. The cost of pro­
viding this benefit is not separable from the cost of providing benefits fbr active employees, as the charge fbr
retirees is built into rates fbr active employees.
The RTC adopted Financial Accounting Standard No. 106 (FAS 106), Employer's Accounting fbr Postretirement
Benefits Other than Pensions, as of January 1, 1992. FAS 106 requires the accrual method of accounting fbr
postretirement health and life insurance costs. These costs are generally recognized over the period from the
date of hire to the full eligibility date of employees who are expected to qualify fbr such benefits. This is a sig­
nificant change from the RTC's previous policy of recognizing these costs in the year in which the benefits
are provided.
The RTC elected to immediately recognize the accumulated postretirement benefit liability measured as of
January 1, 1992. The accumulated liability, known as the transition obligation, represents that portion of
future retiree benefit costs related to service rendered by both active and retired employees prior to the date
of adoption. During 1992, the RTC recorded charges of $18.1 million fbr the transition liability and $11 mil­
lion fbr the current periodic cost, which have been reflected in the 'Administrative operating and other
expense" line of the Statements of Revenues, Expenses and Accumulated Deficit.
The net periodic postretirement benefit cost fbr 1992 included the following components (in millions):
Service cost, benefits attributed to emptoyee service during the year
interest cost on accumutated postretirement benefit obtigations

Net periodic postretirement benefit cost

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The RTC, as a government corporation scheduled under current law to terminate on or before December 31,
1996, decided, in conjunction with the FDIC, that the liability for postretirement benefits for eligible employ­
ees assigned to the RTC will be recorded on the books of the FDIC. The RTC will pay the FDIC an amount
equal to the RTC's transition obligation plus the RTC's 1992 net periodic postretirement cost. In return, the
FDIC agrees to pay the costs associated with postretirement benefits due to eligible employees assigned to the
RTC upon their retirement. As of December 31,1992, the RTC has included as a current liability on its Statement
of Financial Position an amount equal to the RTC's transition obligation plus the RTC's net periodic postre­
tirement cost. The RTC expects to pay this liability to the FDIC during 1993.
The discount rate used in the calculation of the postretirement benefit obligation was 7.0%. The assumed med­
ical inflation trend in 1992 was 16.5%, decreasing to an ultimate rate of 9.0% in 1998 and remaining at that level
thereafter. The dental cost trend rate in 1992 and thereafter was 8.0%. Both the assumed discount rate and health
care cost trend rates have a significant effect on the amount of the obligation and periodic cost reported.
If the health care cost trend rate was increased one percent, the accumulated postretirement benefit obliga­
tion as of December 31, 1992 would have increased $6.6 million, or 22.8%. The effect of this change would
have increased aggregate 1992 service and interest costs by $2.9 million, or 26.1%.

18. Concentration o f Credit Risk
The RTC has receivables from conservatorships and receiverships located throughout the United States which
are experiencing problems with both loans and real estate. Their ability to make repayments to the RTC is
largely influenced by the economy of the area in which they are located. The gross balance of these receiv­
ables at December 31, 1992 is $121.2 billion (against which $79.4 billion of reserves and contra assets have
been recorded). Of this total, $31.1 billion is attributable to institutions located in Texas, $15.3 billion is attrib­
utable to institutions located in California, $9.5 billion is attributable to institutions located in Florida and
$7.6 billion is attributable to institutions located in Arizona.




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United States
Genera! Accounting Office
Washington, D C. 20548
Comptroller General
of the United States

B-240108

June 30, 1993
To the Thrift Depositor Protection Oversight Board
Resolution Trust Corporation

In our audits of the Resolution Trust Corporation for the
years ended December 31, 1992 and 1991, we found
-- The Corporation's statements of financial position as of
December 31, 1992 and 1991, the statements of cash flows
for the years then ended, and the statement of revenues,
expenses and accumulated deficit for the year ended
December 31, 1992, to be reliable in all material respects.
We do not express an opinion on the statement of revenues,
expenses and accumulated deficit for the year ended
December 31, 1991.
-- Internal controls as of December 31, 1992, to be effective
in protecting assets and in assuring that transactions are
executed in accordance with management's authority and
materially comply with significant provisions of selected
laws and regulations but not effective in assuring that
there were no material misstatements in the financial
statements.
-- No material noncompliance with laws and regulations we
tested.
Discussed in the following section are significant matters
considered in performing our audits and forming our opinions.
This report also outlines each of our conclusions in more
detail and discusses the scope of our audits.
SIGNIFICANT MATTERS
The following information is provided to highlight
uncertainties that could affect the Corporation's loss
estimates, to discuss the effect that recent higher-thanexpected recoveries from asset sales have had on future
funding needs, and to explain other matters.

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Uncertainties Affect Estimated
Recoveries From Receiverships
and Costs of Future Resolutions
Although the Corporation has produced its estimates of the
recovery value of receivership assets from the best available
information, significant uncertainties still exist regarding
general economic conditions, interest rates, and real estate
markets that could affect the value of assets in resolved and
unresolved institutions.
As of March 31, 1993, the
Corporation's receiverships and conservatorships held
$91 billion in assets of which more than 40 percent were
delinquent loans, real estate owned, and investments in the
subsidiaries of failed institutions.
Because these assets are
considered among its hard-to-sell assets, it is difficult for
the Corporation to predict the recovery value and timing of
sales.
If assets sell later or for less than predicted, the
Corporation's costs will be higher than estimated.
Conversely, higher or earlier recoveries will lower the
Corporation's final costs.
As discussed in footnote 15, the Corporation has established
reserve funds for securitization transactions to cover future
credit losses on the underlying loans.* The Corporation and
its receiverships also provide representations and warranties
on the unpaid principal balance of certain loans sold for
cash, sold as part of securitization transactions, exchanged
for mortgage-backed securities, or sold under servicing right
contracts.^ As of December 31, 1992, the Corporation's loss
allowances for resolved and unresolved institutions included
$1.3 billion for the expected cost of future securitization
credit losses and $1.5 billion for claims arising from the
representations and warranties. We found these reserve
amounts to be reasonable, based on the best available
information.

^Securitization refers to the practice of grouping assets
(usually performing mortgage loans) and selling securities
backed by the underlying future cash flows of those assets.
Purchasers of the securities demand some protection against
credit losses which may occur due to defaults and
delinquencies on the underlying loans.
^These contracts convey the right to service mortgages, which
includes collecting loan payments and controlling mortgage
escrow funds.



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However, we caution that the Corporation's claims experience
to date has been very limited and cannot be relied upon to
predict the nature or amount of future losses. These future
losses will be affected by the behavior of the economy,
interest rates, and real estate markets as well as the
performance of the collateral underlying the transactions.
Changes in these factors, which are beyond the Corporation's
control, could result in either higher or lower credit and
claims losses than currently estimated.
Higher Asset Sales Recoveries
Could Reduce Future Funding Needs
The Corporation provided us with draft financial statements on
March 31, 1993, showing that $84.4 billion of loss funds had
been used to resolve the 653 institutions closed as of
December 31, 1992.
Those statements also showed that an
additional $17 billion in loss funds would be needed to
complete the resolution of 81 institutions in conservatorship,
39 institutions considered probable failures on or before
September 30, 1993, and 52 institutions considered possible
failures before the Corporation's resolution responsibility
ends on September 30, 1993.
However, the Corporation's cost
estimates were not based on its most recent sales experience.
Due to improved economic conditions, the Corporation's
receiverships have realized higher rates of recovery on their
asset sales than previously estimated.
The Corporation was
accounting for these higher recoveries in an unallocated
reserve of $7 billion to cover unanticipated future losses or
estimation errors . We agreed with the Corporation that a
minimum of $2 billion should remain in unallocated reserves
for unforeseen problems or errors until the audit was
completed.
The Corporation and its Oversight Board decided in
April 1993, to release $3 billion of the $7 billion in
unallocated reserves and make the funds available to resolve
selected institutions in conservatorship.
The Corporation's final financial statements no longer contain
any unallocated reserves; instead, reserve and loss accounts
have been adjusted to reflect the best current estimates of
probable future losses resulting from its resolution
activities.
The Corporation's audited financial statements
report the cost of closed institutions at $79.5 billion, which
could allow another $1.9 billion to be used for future

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resolutions, subject to appropriation restrictions,^ and could
decrease its estimated future funding needs to $12 billion.
This decrease of $5 billion in expected future funding needs
is the result of improved economic conditions, particularly
lower interest rates, over the past 2 years; however, if
conditions should worsen, the Corporation may need to increase
its loss estimates.
If conditions continue to improve, the
need for additional loss funds could be less than presently
estimated.
Weaknesses in Contractor Oversight
Could Result in Reduced Recoveries
The Corporation's statements of cash flows report the cash
that the Corporation has actually received and disbursed.
However, due to weaknesses in its oversight of certain loan
servicers and other contractors, the Corporation cannot be
sure that it is recovering all it should from its
receiverships.
In April 1992, we reported that the
Corporation cannot ensure that all of its loan servicers are
accurately accounting for and remitting loan payments.* In
October 1992, we identified weaknesses in the cash management
practices of property management subcontractors that could
make the Corporation's funds vulnerable to loss from
unauthorized use.^ We also identified a policy that has
resulted in forgone interest income of hundreds of thousands
of dollars annually.
Lost revenues to receiverships mean
lower recoveries for the Corporation.
In response to reported weaknesses, the Corporation's
Oversight Board has pledged to strengthen contracting systems
and contractor oversight as part of its 10 point reform

^The $25 billion in loss funds provided in the Resolution
Trust Corporation Refinancing, Restructuring, and Improvement
Act of 1991, in contrast to loss funds provided by prior Acts,
was available for obligation only until April 1, 1992.
Thus,
any amount previously obligated against this appropriation
that becomes available due to a reduced loss may only be used
if the Corporation identifies an increased loss for another
resolution properly chargeable against this appropriation.
^Resolution Trust Corporation:
Oversight of Certain Loan
Servicers Needs Improvement (GAO/GGD-92-76, April 24, 1992).
^Resolution Trust Corporation:
Subcontractor Cash Management
Practices Violate Policy and Reduce Income (GAO/GGD-93-7,
October 20, 1992).



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agenda.^ The Oversight Board's specific objectives are to
require adequate planning of contracts, ensure adherence to
contracting policies and procedures, increase contractor
oversight, and ensure that management's span of control over
contractors is adequate to protect the Corporation's
interests.
In conjunction with these initiatives, the
Corporation recently announced that it will increase the size
of its contract surveillance unit by an additional
150 accountants, investigators, and other staff.
Disclaimer Given on the 1991 Statement of
Revenues, Expenses and Accumulated Deficit
Because we did not express an opinion on the Corporation's
statement of financial position as of December 31, 1990, we
cannot express an opinion on the Corporation's statement of
revenues, expenses and accumulated deficit for the year ended
December 31, 1991.
MATERIAL INTERNAL CONTROL WEAKNESS
During our 1992 audit, we identified a material weakness^ in
the Corporation's internal control structure related to the
Corporation's calculation of its allowance for loss.
Through
substantive test procedures, we were able to satisfy ourselves
that audit adjustments corrected the effect of this weakness
on the Corporation's 1992 financial statements.
Lack of Control Procedures
Resulted in Undetected Error
In its draft financial statements, the Corporation understated
a component of its loss allowance calculation for subrogated
claims (paid claims of the depositors of failed institutions)

^On March 16, 1993, the Chairman of the Thrift Depositor
Protection Oversight Board announced a program of
10 administrative initiatives to strengthen the Corporation's
management in the areas of planning, financial management and
controls, operations, and public policy.
^A material weakness is a reportable condition in which the
design or operation of the internal controls does not reduce
to a relatively low level the risk that losses, noncompliance,
or misstatements in amounts that would be material in relation
to the financial statements may occur and not be detected
within a timely period by employees in the normal course of
their assigned duties.

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B-240108
by $1.5 billion.
Although the Corporation's management
reviewed the overall calculation for the loss allowance
estimates, no procedures were in place to review certain
computer-generated data used in the calculation and, as a
result, an error in the data went undetected.
The Corporation
made the proposed audit adjustment to its final December 31,
1992, allowance for loss on subrogated claims and has acted to
prevent such data errors from occurring in future
calculations.
Our internal control report, which we expect to
issue soon, provides more detail on this weakness and other
reportable conditions briefly discussed in a later section.
OPINION ON FINANCIAL STATEMENTS

The financial statements and accompanying notes present
fairly, in accordance with generally accepted accounting
principles, the Corporation's
—

assets, liabilities and equity as of December 31, 1992 and
1991,

-- revenues, expenses and accumulated deficit for the year
ending December 31, 1992, and
-- cash flows for the years ending December 31, 1992 and 1991.
As discussed in the Significant Matters section, we do not
express an opinion on the statement of revenues, expenses and
accumulated deficit for the year ending December 31, 1991.
Misstatements may have occurred in other financial information
reported by the Corporation as a result of the material
internal control weakness described above.
In addition,
significant uncertainties discussed earlier in this report and
in footnotes 5 and 10 to the financial statements, may
ultimately result in higher or lower resolution costs than
projected in these statements.
Also, factors beyond the
Corporation's control could result in higher or lower credit
and claims losses than currently estimated for certain sales
transactions.
OPINION ON INTERNAL CONTROLS
The internal controls we evaluated were those designed to
-- safeguard assets against loss from unauthorized use or
disposition;




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-- assure the execution of transactions in accordance with
management's authority and with laws and regulations; and
-- properly record, process, and summarize transactions to
permit the preparation of financial statements in
accordance with generally accepted accounting principles
and to maintain accountability for assets.
Because of the material weakness in internal controls
described previously, internal controls did not provide
reasonable assurance that the Corporation properly recorded,
processed, and summarized transactions.
However, controls in
effect on December 31, 1992, provided reasonable assurance
that assets are safeguarded against loss from unauthorized use
or disposition and that transactions are executed in
accordance with management's authority and with significant
provisions of selected laws and regulations.
REPORTABLE CONDITIONS
We also identified the following reportable conditions which,
although not considered to be material, represent significant
deficiencies in the design or operation of the Corporation's
internal controls and should be corrected.
1.

The Corporation used information from the wrong data base
system to calculate its loss accrual for claims arising
from representations and warranties that are offered with
the sale of loans and servicing rights.
As a result, the
Corporation needed to make an adjustment of nearly
$500 million to reflect the correct reserve amount for
representations and warranties losses.
By using the data
base that tracks the funding status of reserves rather
than the required amount of reserves, the Corporation
ignores the fact that reserves can be, and often are,
under- or overfunded.

2.

The Corporation's contractor estimated recovery values for
receivership assets without adequate supporting file
documentation.
(The most common missing item was a recent
appraisal.)
Based on our test results, we found it likely
that 13 percent of the Corporation's assets do not have
the key file documents necessary to support a particular
recovery value.
Missing data increases the risk that the
Corporation's estimated recovery rates will be materially
under- or overstated.

 R E S O L U T i O N


T R U S T

C 0 R P 0 R A T ! 0 N

B-240108
3.

The Corporation's contractor did not consider all
available file documentation or information in estimating
receivership asset recoveries and made errors in recording
valuation information.
Based on the results of our
testing, we found it likely that 20 percent of contractor
valued assets had these problems.
As a result, assigned
recovery rates could be lower or higher than if all
available information is considered or all data
transcribed correctly.

4.

During 1992, 9 of the Corporation's 13 field offices did
not perform the required reconciliation of checks received
and processed.
In addition, most of these 9 field offices
could not provide sufficient documentation to enable us to
complete the needed reconciliations.
Without adequate
controls over check receipts, the Corporation may not
detect checks withheld from deposit, lost, stolen, or
improperly released to third parties.

5.

The Corporation's field offices did not post wire
disbursements to the correct general ledger accounts.
Based on the results of our tests, we estimate that
approximately 11 percent of all wire disbursements to
third parties contained at least one account posting
error.
If such a high error rate continues in its field
offices, the Corporation faces the risk that future
financial reports could be inaccurate.

6.

The Corporation did not identify the material weakness or
all of the reportable conditions described above in its
1992 statement on the effectiveness of its internal
accounting and administrative controls prepared under the
Chief Financial Officers Act of 1990.
This occurred
because the Corporation's assessment focused more on
operating controls than on financial reporting controls.
However, without more emphasis on reporting controls, the
Corporation may fail to identify serious weaknesses in the
future.

7.

The Corporation processed its financial information on the
Federal Deposit Insurance Corporation's (FDIC) general
ledger system during the first 8 months of 1992.
FDIC's
inadequate controls over access to its electronic data
processing center and systems software were reported as a
significant deficiency in our report on FDIC's 1992
financial statements (GAO/AIMD-93-5, June 30, 1993).
The
lack of adequate security controls exposed the data center
to unauthorized entry and exposed software and data to use
by unauthorized personnel.




1 9 9 2

A N N U A L

R E P O R T




B-240108
We also noted other less significant matters involving the
system of internal accounting control and its operation for
which we will be submitting a separate report to Corporation
management.
COMPLIANCE WITH LAWS AND REGULATIONS
Our tests for compliance with significant provisions of
selected laws and regulations disclosed no material instances
of noncompliance.
Also, nothing came to our attention in the
course of our other work to indicate that material
noncompliance with such provisions occurred.
OBJECTIVES, SCOPE, AND METHODOLOGY
The Corporation's management is responsible for
—

preparing annual financial statements in conformity with
generally accepted accounting principles;

—

establishing and maintaining internal controls and systems
to provide reasonable assurance that the internal control
objectives previously mentioned are met; and

—

complying with applicable laws and regulations.

We are responsible for obtaining reasonable assurance about
whether (1) the financial statements are reliable (free of
material misstatement and presented fairly in conformity with
generally accepted accounting principles) and (2) relevant
internal controls are in place and operating effectively.
We
are also responsible for testing compliance with significant
provisions of selected laws and regulations.
In order to fulfill these responsibilities, we
-- examined, on a test basis, evidence supporting the amounts
and disclosures in the financial statements;
-- assessed the accounting principles used and significant
estimates made by management;
-- evaluated the overall presentation of the financial
statements;
—

evaluated and tested relevant internal controls over the
following significant cycles, classes of transactions, and
account balances:

B-240108
—

resolved institutions, consisting of policies and
procedures related to (1) resolution activities,
(2) receipts and disbursements in receiverships, and
(3) valuation of the Corporation's net receivables from
resolution transactions and assistance;

-- unresolved institutions, consisting of policies and
procedures related to identifying and estimating the
cost of future resolutions and of providing advances to
institutions in conservatorship;
-- Federal Financing Bank borrowings, consisting of
policies and procedures related to the borrowing, use,
and repayment of working capital;
—

treasury, consisting of policies and procedures related
to Corporate cash receipts and disbursement; and

-- financial reporting, consisting of policies and
procedures related to the processing of journal entries
into the general ledger and the preparation of financial
statements; and
-- tested compliance with selected provisions of the following
laws and regulations:
-- Section 21A of the Federal Home Loan Bank Act
(12 U.S.C. 1441a).
—

Chief Financial Officers Act of 1990 (Public Law 101576) .

We limited our work to accounting and other controls necessary
to achieve the objectives outlined in our opinion on internal
controls.
Because of inherent limitations in any system of
internal control, losses, noncompliance or misstatements may
nevertheless occur and not be detected.
We also caution that
projecting to future periods our favorable evaluation of
controls related to the safeguarding of assets and the
execution of transactions in accordance with management's
authority and in compliance with laws and regulations is
subject to the risk that controls may become inadequate
because of changes in conditions or that the degree of
compliance with controls may deteriorate.




1 9 9 2

A N N U A L

R E P O R T

F ! N A N C ! A L

S T A T E M E N T S

AND

! N T E R N A L

C O N T R O L S

B-240108

We conducted our audits in accordance with generally accepted
government auditing standards.
We believe that our audits
provide a reasonable basis for our opinions.

Charles A. Bowsher
Comptroller General
of the United States
June 8, 1993

 R E S O L U T i O N


T R U S T

C O R P O R A T i O N

1 9 9 2

A N N U A L

R E P O R T

1992 Management Report

On !nterna! Controls

Since its inception, the Corporation has made significant progress in developing and implementing a sound
internal control system designed to ensure accountability and to reduce the potential fbr loss, waste, or mis­
appropriation. In 1992, the RTC took several steps to strengthen controls throughout the agency and to
implement initiatives that had been developed in 1991.
The Corporation's management has made the establishment and maintenance of a sound system of internal
controls a high priority. The nature of much of the RTC's work is inherently risky and complex, and there
fore requires a workable and comprehensive internal control system that includes annual reviews of both field
and headquarters operations. The RTC has responded to this need by developing an agency-wide system,
and by clearly assigning responsibility fbr maintaining controls along organizational lines.

There are risks associated with the management and sale of the large volume and wide variety of assets under
RTC control. Other factors —such as the timeliness and availability of funding required to resolve failed insti­
tutions, the state of the overall economy, interest rate fluctuations, and regulatory and legislative policies —
greatly influence operations and affect the length of time an asset remains under the RTC's control, there­
fore contributing to the potential fbr loss, waste, or misappropriation. Three of the Corporation's particu­
larly high-risk areas are: real estate disposition planning and execution; asset disposition-related contract
planning, and contractor management and oversight; and, information systems that support asset manage­
ment and sales activity.
Proff&y
In 1992, the Corporation implemented the management control and review process designed to evaluate the
Corporation's internal controls and, where necessary, improve their effectiveness. During the year, the RTC
issued the corporate policy directive on the internal control and review process. The Corporation also restruc­
tured its inventory of assessable units to better reflect program operations; vulnerability assessments were
completed and risk levels were established fbr each of the units.
An early warning reporting system was put into effect to alert senior management to emerging problems asso­
ciated with internal controls. A management information system was created to catalogue, monitor, and report
on the implementation of corrective actions taken by the Corporation to resolve internal control deficiencies.
Formal internal reviews and audits were also scheduled and conducted throughout the year.




1 9 9 2

A N N U A L

R E P O R T

F I N A N C t A L

S T A T E M E N T S

AND

t N T E R N A L

C O N T R O L S

In 1992, RTC program managers conducted 87 reviews covering most aspects of Held office operations.
These internal reviews were effective in evaluating the adequacy of internal controls for the administrative and
accounting functions, as well as compliance with RTC policies and procedures, and for uncovering opera­
tional weaknesses. The reviews also helped measure the effectiveness of corrective actions already taken to
strengthen controls. In response to these reviews, corrective action plans were developed to rectify deficien­
cies; many of the plans were implemented by yearend.
The Genera! Accounting Office (GAO) and the RTC's Office of Inspector General performed a total of 79
audits and reviews during the year. The audits were performed, in part, to evaluate the effectiveness and ade­
quacy of internal administrative and accounting controls over the Corporation's activities and business oper­
ations. The GAO, in its "Resolution Trust Corporation Management Report," dated June 30,1992, concluded
that the RTC's financial statements presented fairly, in all material respects, the financial position of the RTC
as of December 31, 1991. The GAO also reported favorably on the RTC's internal control structure and on
its compliance with laws and regulations.

In 1992, the RTC identified the program areas considered most vulnerable to risk. A new management con­
trol plan was developed to ensure that all program areas are reviewed regularly, with a particular emphasis on
high-risk areas. During the year, the Corporation also established the appropriate management infrastruc­
ture, including assignment of responsibilities, for maintaining a strong internal control system. The numer­
ous reviews conducted during the year were successful in identifying weaknesses, and specific corrective actions
have been initiated, and in many cases, completed, by the affected managers. As a result of its efforts in 1992,
the Corporation has substantially improved the effectiveness of its internal control systems and procedures.

 R E S O L U T I O N


T R U S T

C 0 R P 0 R A T ! 0 N

. * A-''

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S T A T ! S T ! C S

RTC Conservatorships
January 1,1992 through December 31,1992

ASSOCtATtONS
PLACED tNTO

STATE

ASSOCtATtONS )N

CONSERVATORSHtP

CONSERVATORSHtP

JANUARY 1 ,1 9 9 2 -

DECEMBER 3 1,19 9 1

DECEMBER 31,1992

P&A

2

1

2

ALABAMA
ARIZONA

1

ARKANSAS

1

CALIFORNIA

10

CONSERVATORSHtP RESOLUTtONS

ASSOCtATtONS tN

JANUARY 1 ,1 9 9 2 -D E C E M B E R 31,1992

CONSERVATORSHtP

!DT

PAYOFF

1

TOTAL

DECEMBER 31,1992

1

3

1

0

1

1

0

5

5

5

10

3

1

3

3

1

FLORIDA

10

4

4

4

10

GEORGIA

5

2

4

4

3

4

4

2
0

CONNECTICUT

ILLINOIS

3

3

INDIANA

1

1

1

IOWA

3

2

2

1

KANSAS

1

1

0

2

LOUISIANA

2

1

0

3

MAINE

0

1

0

1

MARYLAND

3

4

2

5

MASSACHUSETTS

1

1

0

2

MICHIGAN

2

1

1

MISSISSIPPI

0

MISSOURI

2

1
1
2

NEW HAMPSHIRE

1

NEW JERSEY

6

NEW MEXICO
NEW YORK

1
3

1

NORTH CAROLINA

2

1

OHIO

1

2

OKLAHOMA

4

OREGON
PENNSYLVANIA

1
5

RHODE ISLAND

1

SOUTH CAROLINA

1

3

TENNESSEE

1

1

TEXAS

7

UTAH

1

VIRGINIA

4

6

WEST VIRGINIA

1

1

WISCONSIN

1

TOTAL

91

2

5

4

T R U S T

1

3

8

1
3

1
3

0
1

1

1

2

1

1

2

3

3

1

0

1

2

1
2

5
1

1

3
1

C O R P O R A T t O N

0

0

54

* Does not include 9 institutions resolved under the Accelerated Resolutions Program in 1992.

 R E S O L U T i O N


1

2

3

1

50

0

2

4

2

7

1

0

0

4

1

1

7

0

1

0

4

6

0

2

1

0

60*

81

1 9 9 2

A N N U A L

R E P O R T

New RTC Conservatorships

January 1,1992 through December 31,1992
(doHars in thousands)
Date of
Conservatorship

Nameoftnstitution
and Location

Gross
Assets

Totat
Liabitities

52,843
581,550
23,353
108,931
200,874
46,212
7,651
117,052
82,870
36,864
74,378
32,648
57,988
98,220
86,987
700,343
295,696
817,607
52,114
233,201
223,452
1,373,649
145,175
36,920
242,929
134,461
160,504
12,760,385
166,639
3,415,412
233,412
141,270
95,466
90,429
39,693
92,612
74,600
470,966
292,407
1,732,719
1,344,197
111,406
212,577
273,621
465,171
31,186
1,636,037
4,920,683
1,226,646
60,449

$

10-Jan
10-Jan
24-Jan
31-Jan
28-Feb
28-Feb
28-Feb
28-Feb
12-Mar
13-Mar
03-Apr
10-Apr
24-Apr
08-May
21-May
04-Jun
05-Jun
05-Jun
05-Jun
05-Jun
12-Jun
12-Jun
12-Jun
19-Jun
19-Jun
19-Jun
26-Jun
06-Jul
10-Jui
10-Jul
10-Jul
17-Ju!
17-Jul
24-Jul
07-Aug
21-Aug
28-Aug
0 9-0ct
16-0ct
21-0ct
30-0ct
06-Nov
13-Nov
20-Nov
20-Nov
20-Nov
04-Dec
04-Dec
04-Dec
08-Dec

Hansen FSB, Paim Beach Gardens, FL
Hansen FSA, Hammonton, NJ
Advanced FSB, Northridge, CA
Security FSA, Panama City, FL
Lemont FSA, Lemont, IL
Irvington FSB, Baltimore, MD
Alpha Indian Rock FS&LA, Philadelphia, PA
Vista FSA, Reston, VA
Ukrainian FS&LA, Philadelphia, PA
Carrollton Homestead Assn, FA, New Orleans, LA
Commonwealth FSB, Manassas, VA
Federal SA of Virginia, Falls Church, VA
First South FSB, Columbia, SC
Shenandoah FSA, Martinsburg, WV
First FSA, Lewiston, ME
Home Unity FS&LA, Lafayette Hill, PA
Republic FSB, Matteson, IL
First American FSB, Greensboro, NC
Volunteer FSA, Little Ferry, NJ
Cooper River FSA, North Charleston, SC
San Clemente FSB, San Clemente, CA
Columbia Banking FSA, Rochester, NY
Cherokee Valley FSA, Cleveland, IN
First Newport FSB, Newport Beach, CA
Coastal FSB, New London, CT
First Home FSA, Pittsburgh, PA
Jacksonville FSA, Jacksonville, FL
HomeFed Bank, FA, San Diego, CA
Southern FSA of Georgia, Atlanta, GA
Transohio FSB, Cleveland, OH
Home FSB, Norfolk, VA
New England FSA, Wellesley, MA
Liberty FSB, Warrenton, VA
First FS&LA of Russell County, FA, Phenix City, AL
Citadel FS&LA, Charleston, SC
Birmingham FSB, Birmingham, AL
Potomac FSB, Silver Spring, MD
Piedmont FSA, Manassas, VA
Security FS&LA, Jackson, MS
Standard FSA, Gaithersburg, MD
Homestead FSA, San Francisco, CA
First FSB of Georgia, FA, Winder, GA
The Overland Park FS&LA, Overland Park, KS
Irving FB for Savings, FSB, Chicago, IL
Polifly FS&LA, New Milford, NJ
Crestline FS&LA, Crestline, OH
Second National FSA, Salisbury, MD
Carteret FSB, Newark, NJ
Security FSB, Vineland, NJ
Palm Beach FSA, Palm Beach Gardens, FL

$

Iota)

50 Institutions

$35,912,455

50,408
547,888
24,106
104,288
194,560
43,434
7,806
117,286
75,109
35,535
76,453
31,743
56,203
95,174
83,455
701,780
273,076
812,735
50,979
228,115
215,092
1,313,715
140,171
35,075
234,989
130,130
147,802
12,344,563
159,645
3,386,001
224,884
136,014
93,319
85,695
38,698
91,277
71,830
443,996
276,646
1,716,343
1,265,017
108,266
210,198
246,890
447,794
29,027
1,561,702
4,771,219
1,146,205
55,521

$34,737,857

Totat
Deposits

$

Number of
Deposit Accounts

43,441
426,571
23,557
100,444
187,057
42,661
7,615
108,439
72,106
32,260
64,211
29,564
48,459
68,074
76,093
630,305
262,826
639,074
49,370
200,550
205,745
1,073,441
123,807
34,355
222,671
127,527
146,896
8,798,172
150,349
2,392,364
194,315
117,816
86,107
79,449
37,571
81,717
67,678
369,774
247,242
857,655
1,225,317
96,930
94,525
245,014
371,061
26,643
1,155,484
2,618,686
841,819
54,303

2,574
46,685
1,572
9,275
12,940
7,435
996
8,023
7,880
1,907
7,803
1,207
2,920
13,481
10,124
98,754
28,656
93,532
6,822
29,308
9,857
167,209
24,005
911
35,364
20,570
10,496
775,670
11,048
403,868
12,857
3,959
11,878
14,873
1,672
8,454
4,124
34,342
27,841
153,120
260,254
13,644
6,946
33,434
38,945
4,596
100,460
277,975
134,086
2,193

$25,257,110

2,996,545

Note: Data based on TFR data for the quarter prior to date of conservatorship.




1 9 9 2

A N N U A L

R E P O R T

S T A T ! S T ! C S

RTC Resolutions

January 1, 1992 through December 31,1992
(dottars in thousands)
Number of
Date of
Resolution

Name of institution and Location

Type

10-Jan
31-Jan
31-Jan
31-Jan
31-Jan
07-Feb
07-Feb
07-Feb
07-Feb
07-Feb
07-Feb
21-Feb
21-Feb
28-Feb
28-Feb
28-Feb
28-Feb
28-Feb
06-Mar
06-Mar
06-Mar
13-Mar
13-Mar
13-Mar
13-Mar
13-Mar
13-Mar
13-Mar
13-Mar
13-Mar
13 Mar
13-Mar
19-Mar
20-Mar
20-Mar
20-Mar
20-M ar
20-Mar
20-M ar
20-M ar
20-Mar
20-Mar
20-M ar
20-M ar
20-M ar
20-M ar
27-Mar
27-M ar
27-M ar
27-M ar
27-M ar
27-M ar
27-Mar
27-Mar
27-Mar
27-M ar
03-Apr
03-Apr
03-Apr
03-Apr
10-Apr
10-Apr
10-Apr
10-Apr
10-Apr
24-Apr
24-Apr
10-Jul
06-Nov

Perpetual SB, Vienna, VA *
Home FS&LA, FA, Atgona, IA
Century FSB, Chicago, IL
Pelican Homestead SA, Metairie, LA *
Liberty SB, FSB, Marietta, OH
Connecticut FS&LA, Hartford, CT
United Savings of America, Melbourne, FL *
First Commerce SB, FSB, Lowell, IN
Ludington FSB, Ludington, Ml
First FSA of Chickasha, Chickasha, OK
Fidelity FS&LA, Austin, IX
Irving FS&LA, Paterson, NJ
Centre SA, FA, Arlington, TX
Executive SB, FSB, Marina del Rey, CA
New Metropolitan FSB, Hialeah, FL
Republic SB, FSB, Rockville, MD
Burleson Co. FSA, Caldwell, TX
Home SB, FSB, Salt Lake City, UT
First FSA of Raleigh, Raleigh, NC
Davy Crockett FSA, Crockett, TX
CorEast FSB, Richmond, VA
Jefferson FS&LA, Birmingham, AL
United FS&LA, Jonesboro, AR
Progressive SB, FSB, Pasadena, CA
Danbury FS&LA, Danbury, CT
Professional FSB, Coral Gables, FL
Guaranty FSA, Warner Robins, GA
Security FS&LA, Albuquerque, NM
Central FSB, Mineola, NY
First Ohio SB, St. Bernard, OH *
Colonial FSB, Cranston, Rl
Monycor FSB, Barron, Wl
New Age FSA, St. Louis, MO
Far West S&LA, FA, Newport Beach, CA
Security FS&LA, Waterbury, CT
Amerifirst FSB, Miami, FL
Peoples FSA, Ottumwa, IA
Western FS&LA, Glenview, IL
Augusta FSA, Baltimore, MD
Newton SB, FSB, Fairfield, NJ
Chisholm FSA, Kingfisher, OK
Bell FSB, Upper Darby, PA
Springfield FSA, Springfield, PA
First FSA, Lubbock, TX
Sentry FSA, Norfolk, VA
TrustBank FSB, Tysons Corner, VA
County Bank, FSB, Santa Barbara, CA
Flagler FS&LA, Miami, F L *
United FSB, Smyrna, GA
Federal SB, FSB, Swainsboro, GA
Olympic FSA, Berwyn, IL
Home FSA of Kansas City, Kansas City, MO
Westerleigh FS&LA, Staten Island, NY
State Savings FSB, Jackson Heights, NY
Red River FS&LA, Lawton, OK
Metropolitan FS&LA, Nashville, IN
First FS&LA of Seminole Co, FA, Sanford, FL
First FSB, FSB, Ashburn, GA
First State SA, Sedalia, MO *
New Merabank Texas, FSB, El Paso, TX
Atlantic Financial FSB, San Francisco, CA
Valley FS&LA, Van Nuys, CA *
Security 1st FS&LA, Daytona Beach, FL *
Metrobank FS&LA, Palisades Park, NJ
Sunbelt Federal Savings, FSB, Irving, D(
First American FSB, Tucson, AZ
First FSB of South Dakota, Rapid City, SD *
Investors FSB, Richmond, VA
Republic FSB, Matteson, IL

PA
PA
PA
PA
PA
PA
PA
PA
PA
PA
PO
PA
PA
PA
PA
PA
PA
IDT
PA/PO
PO
PA/PO
PA
PA
PA
PA
PA
PA
PA/PO
PA
PA
PO
PA
PA
PA/PO
PA
PA
PA
PA
PA/PO
PA
PA
PA
PA
PA
PO
PA/PO
PA
PA
PA
PA
PA
PA/PO
PA
PA
PA
PA
PA
PA
PA
PA
PA
PA
PA
PA
PA
IDT
PA
PA
PA

Total

69 institutions

Notes:

Gross
Assets

Iota!
Liabilities

Totat
Deposits

Deposit
Accounts

Estimated
Cost of
Resotution

Acquiring institution and Location

Crestar Bank, Richmond, VA
Branch Sale
Metropolitan B&TC, Chicago, IL
First Commerce Corp., New Orleans, LA
People's B&TC, Marietta, OH
Bank of Boston Connecticut/BBOC, Waterbury, CT
Barnett Bank of Central FL, Orlando, FL
Centier Bank, Whiting, IN
Northwestern SB&T, Traverse City, Ml
Branch Sale
None
Hudson United Bank, Union City, NJ
American FB, FSB, Dallas, TX
Century FS, Pasadena, CA
Desjardins FSB, Hallandale, FL
First FSB of Delaware, Wilmington, DE
Citizens State Bank, Somerville, TX
Zions First NB, Salt Lake City, UT
Branch Sate
None
Branch Sate
Branch Sale
Branch Sale
Branch Sale
Bristol FSB, Bristol, CT
Branch Sale
Crossroads Bank of GA, Perry, GA
Branch Sale
Chemical Bank, New York, NY
MBT Bancorp, W. Harrison, IN
None
Branch Sale
Commerce Bank of St. Louis, St. Louis, MO
Branch Sale
American Bank of CT, Waterbury, CT
Great Western Bank, FSB, Beverty Hills, CA
South Ottumwa SB, Ottumwa, IA
Devon Bank, Chicago, IL
Branch Sale
Sussex County State Bank, Franklin, NJ
Branch Sale
Meridian Bank, Reading, PA
Germantown SB, Bala Cynwyd, PA
First NB of Lubbock, Lubbock, TX
None
Branch Sale
Home Savings of America FSB, Irwindale, CA
First Union NB of FL, Jacksonville, FL
Branch Sale
Branch Sale
Branch Sale
Branch Sale
Branch Sale
Branch Sale
Branch Sale
Union Planters NB, Memphis, TN
Federal Trust Bank, FSB, Winter Park, FL
Branch Sale
Mercantile Bank of Sedalia, Sedalia, MO
Branch Sale
Branch Sale
American SB, Irvine, CA
First Union NB of FL, Jacksonville, FL
First FSB (of Delaware), Wilmington, DE
Bank of America, Dallas, TX
State SB, FSB, Tucson, AZ
Metropolitan FB, FSB, Fargo, ND
Central Fidelity Bank, Richmond, VA
Regency SB, FSB, Naperville, IL

$ 2,973,410
119,598
18,858
1,349,410
15,353
16,202
328,955
6,899
26,446
121,912
64,130
150,428
9,297
41,885
8,563
20,528
23,900
6,003
342,502
41,112
701,776
456,996
140,060
290,014
219,971
302,451
18,879
118,889
687,695
41,689
51,648
116,962
8,233
1,804,478
124,372
2,516,196
32,432
38,001
88,241
38,138
143,797
723,074
82,063
191,038
29,209
1,120,512
753,854
1,644,065
103,368
90,070
588,007
2,498,504
122,747
427,594
448,418
619,650
107,634
17,690
166,927
635,941
335,130
2,026,697
1,027,784
426,769
3,148,035
109,780
168,861
1,307,488
218,023

$ 2 ,889,32 9
116,717
19,902
1,497,873
15,383
16,335
334,905
6,969
27,124
121,851
62,369
167,084
9,282
41,212
34,772
22,789
24,357
8,021
327,701
38,009
715,730
447,775
133,372
281,906
218,612
450,223
21,669
133,316
794,013
40,247
51,014
115,406
8,678
2,043,985
121,809
2,746,780
31,968
33,869
100,527
37,661
132,669
708,217
78,387
188,615
34,652
1,109,734
714,070
1,603,659
105,592
104,374
685,652
2,473,315
120,442
428,938
330,808
631,344
120,725
19,828
164,899
584,820
347,279
1,992,057
995,383
443,630
3,524,788
97,905
189,500
1,286,720
205,362

$ 2 ,440,63 8
96,786
19,838
1,483,718
11,163
5,468
292,379
6,919
27,004
119,077
41,924
165,332
9,198
40,782
32,005
15,388
23,883
7,956
175,221
33,211
623,185
352,556
123,631
278,565
139,069
444,080
12,000
131,230
526,285
31,640
39,972
103,373
8,595
1,961,058
93,915
1,973,561
31,697
25,922
99,651
27,391
131,556
480,364
75,917
187,339
30,743
896,608
638,950
1,488,065
81,736
82,024
468,821
2,218,928
117,531
343,425
328,232
614,603
119,450
19,729
163,210
575,740
339,850
1,549,633
893,246
232,421
3,394,552
89,542
168,500
893,105
203,028

326,164
18,606
3,414
174,910
1,165
1,382
45,102
1,781
4,587
10,224
820
32,195
954
1,466
2,623
487
3,061
519
34,016
3,746
65,532
65,080
27,786
20,179
17,112
41,207
1,223
7,713
84,935
3,735
3,959
24,274
2,502
73,210
16,662
212,801
4,508
3,299
14,711
6,793
11,975
68,771
13,963
22,189
1,952
100,234
32,355
150,000
10,140
5,910
42,970
230,611
19,273
51,721
36,021
47,820
21,438
1,233
23,093
43,585
36,579
113,097
131,108
26,827
300,279
6,529
26,042
118,354
22,189

$ 418,910
11,156
1,419
445,947
3,067
2,767
25,628
694
1,668
25,337
8,203
34,721
3,053
5,595
27,303
7,091
5,925
3,133
81,627
4,548
254,624
69,580
21,557
26,921
21,146
268,609
8,569
34,273
338,415
0
10,475
14,514
1,048
831,018
38,183
806,665
483
2,258
8,244
3,878
11,962
189,104
0
16,595
11,288
227,154
176,760
224,610
21,389
44,957
111,577
607,208
10,045
128,547
90,421
170,305
16,616
4,579
0
20,229
23,968
189,503
58,280
108,908
296,558
15,426
49,286
486,972
0

$32,765,241

$33,733,908

$28,902,114

3,080,701

$7,190,499

1) Data based on TFR data tor the quarter prior to the date of resolution.
2) IDT— insured Deposit Transfer; PO— Deposit Payoff, PA— Purchase & Assumption
3) "Estimated Cost of Resolution" as of date of resolution.
* Institution was resolved under the Accelerated Resolutions Program (ARP). There were 9 ARP resolutions in 1992.

R E S O L U T I O N



T R U S T

C O R P O R A T t O N

19 9 2

A N N U A L

R E P O R T

RTC Resotved Conservatorships
August 9 ,1 9 8 9 to December 31,1992
(dottars in thousands)

Number

tn Conservatorship as of 8/9/89

Assets

Liabilities

Deposits

Number of
Accounts

262

$114,322,627

$120,788,239

$91,721,957

8,787,092

Added in 1989

56

25,872,928

25,774,115

19,774,644

2,230,425

Resotved in 1989

37

13,730,737

14,459,356

11,308,281

1,159,387

tn Conservatorship as of 12/31/89

281

$126,464,818

$132,102,998

$100,188,320

9,858,130

Added in 1990

207

129,778,490

128,889,934

94,826,424

9,218,763

Resotved in 1990

309

134,521,901

138,580,070

105,329,383

11,168,506

tn Conservatorship as of 12/31/90

179

$121,721,407

$122,412,862

$89,685,361

7,908,387

Added in 1991

123

71,089,358

70,256,474

55,992,835

4,979,963

Resotved in 1991

211

122,399,634

123,758,665

93,898,247

8,337,015

tn Conservatorship as of 12/31/91

91

$70,411,131

$68,910,671

$51,779,949

4,551,335

Added in 1992

50

35,912,456

34,737,857

25,257,110

2,996,545

Resotved in 1992

60

34,452,261

33,863,275

26,771,438

2,559,752

tn Conservatorship as of 12/31/92

81

$71,871,326

$69,785,253

$50,265,621

4,988,128

6

$4,000,207

$4,421,669

$3,724,296

560,411

tnstitutions resotved under
the Acceterated Resotutions
Program in 1991

21

$8,828,559

$8,571,564

$7,394,198

1,053,701

tnstitutions resotved under
the Acceterated Resotutions
Program in 1992

9

$9,727,798

$9,707,852

$8,511,029

993,251

tnstitutions never
placed in conservatorship
prior to resotution in 1990

Note: Data at quarter prior to date of conservatorship (date of resotution for non-conservatorship resotutions).




1 9 9 2

A N N U A L

R E P O R T

!

N

D

E

X

A

Accelerated Resolutions Program 2 0 ,
2 2 , 30 31
Accounting Services, OfHce of 20-21
Administration, Department of 12
Administration and Corporate
Rdations, Division 11-17
Administrative Evaluation,
OfHce of 14
Administrative Services,
OfHce of 12-13
Affordable Housing,
Department of 37-39
Affordable Housing Disposition
Program 4 , 14, 27, 3 7 -3 9 ,4 3 ,5 9
Asset and Subsidiary Management,
OfHce of 34-35
Asset Disposition, Department of 9
Asset Management,
Department of 34-35
Asset Management and Sales,
Division of 33-39

B
Budget and Planning, OfHce of 32
C

Capita! Markets, Department of 37
Case Management and Program
Compliance, OfHce o f 35
Casey, Albert V. 6
Complex Litigation, OfHce of 10
Conservatorships 4 , 8 , 9 , 14, 2 0 ,
21, 2 2 , 2 3 , 2 4 , 31, 3 4 , 36,
51, 5 2 , 5 4 , 57, 5 8 , 61, 76,
77, 79
Conservatorships and Receiverships,
Department of 9
Conservatorships, Receiverships, and
Resolutions, OfHce of 9
Contracting, OfHce of 9
Contractor Oversight and
Surveillance, OfHce of 13-14
Contracts, OfHce of 13
Contracts, Oversight, and Evaluation,
Department of 13-14
Cooperative Institution Marketing
Program 2 9 -3 0 , 31
Corporate Affairs, Department of 8
Corporate Communications,
OfHce of 16-17
Corporate Finance, Department
of 20-22
Corporate Information,
OfHce of 12, 15
Corporate Issues, OlHce of 8
E

Employment and Labor Law,
OfHce of 8


R E S O L U T I O N


T R U S T

Equal Employment Opportunity and
AfHrmative Action, OfHce of 15
Ethics, OfHce of 8 , 16
Executive Committee 4 , 6 , 16

F
Federal Deposit Insurance
Corporation 2 , 4 , 6 , 8 , 10, 12,
20, 22, 35, 49, 50, 59, 60,
61
Federal Savings and Loan Insurance
Corporation 4 , 2 0 ,2 2 , 4 9 ,5 7 , 5 9
Field Accounting and Asset
Operations, OfHce of 21-22
Field Activities and Sales,
Department of 35 -3 7
Field Liaison, OfHce of 35 -3 6
Field Resolutions, OfHce of 30
Financial Institutions Reform,
Recovery, and Enforcement
Act of 1989 1, 4 , 6 , 14, 4 3 , 4 9 ,
51, 54, 57
FSLIC Resolution Fund
Restructuring, Department of 20
G

Governmental Relations, OfHce of 16

H
Human Resources Management,
OfHce of 8 , 12, 35

!
Institution Operations and Sales,
Division of 19-32
Internal Controls 2 , 14, 3 5 , 7 3 -7 4
Investigations, OfHce of 2 6 , 28

J
Justice, Department of 8 , 10, 2 6

L
Legal Programs, OfHce of 15
Legal Services, Division of 7-10, 28
Litigation, Department of 10
Litigation, OfHce of 10

M
Major Resolutions, OfHce of 2 8 -3 0
Minority- and Women-Owned
Business, OfHce of 14
Minority and Women's Programs,
Department of 14-15
Minority Participation 31

N
National Marketing, OfHce o f 3 6 -3 7
National Sales, OfHce o f 9 , 36

0
OfHce of Thrift Supervision 6 , 10,
2 6 ,2 8 , 3 0 , 5 4 , 57
Operations, Department of 2 2 -2 8
Operations, OfHce of 2 2 -2 6

C 0 R P 0 R A T ! 0 N

Organization and Resource
Management, OfHce of 13

P
Planning and Analysis, Department
of 31-32
Policy, Evaluation, and Field
Management, OfHce of 14-15
Professional Liability, OfHce of 10

R
Real Estate, OfHce o f 9
Receiverships 4 , 8 , 9 , 14, 21, 2 2 ,
2 4 , 2 6 , 3 2 , 3 4 , 3 6 , 51, 5 2 ,
5 3 , 57, 5 8 , 61
Regulations 41-43
Research and Statistics,
OHice of 31-32
Resoludon Trust Corporation
Financial Statements 45-61
Organization Chart 5
Resolution Trust Corporation
ReHnancing, Restructuring, and
Improvement Act of 1991 4 -6 , 8 ,
14, 2 8 , 4 3 , 4 9 , 55
Resolutions 2 , 6 , 8 , 9 , 2 0 , 2 2 ,
2 3 , 2 8 31, 3 2 , 3 6 , 5 4 , 78
Resolutions, Department of 28-31
S

SAMDA Program Management,
OfHce of 34
Secretary, OfHce of the 16
Securities and Finance, OfHce of 9
Securities Transactions, OfHce of 37
Securitization, OfHce o f 37
Seller Financing 3 4 , 38
Settlement Workout, OfHce of 35
Special Projects, OfHce of 8
Standard Asset Management and
Disposition Agreements 34
Statistics
RTC Conservatorships,
January 1 , 1992-December 31,
1992 76
New RTC Conservatorships,
January 1 ,1992-December 31,
1992 77
RTC Resolutions,
January 1 , 1992-December 31,
1992 78
RTC Resolved Conservatorships,
August 9 , 1989-December 31,
1992 79
Systems Development,
OfHce of 2 6 -2 8
Systems Management, OfHce of 35
T

Thrift Depositor Protection Oversight
Board 6 , 14, 31, 32 , 4 9 , 54, 57




The 1992 RTC Annua! Report
PuMished by:
The Resotution Trust Corporation
Office of Corporate Communications
SOI 17th Street, MW
Washington, DC 2 0 4 3 4 -0 0 0 1

Director
Stephen J . Katsanos

Deputy Director
Eiizabeth R. Ford

Chief
Reports and Anatysis Branch
Majorie C. Bradshaw

Office of Administrative Services
Chief
Printing and Graphics
Thomas A. Serio