Full text of RTC Review : March 1990, Vol. 1 No. 3

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RTC REVIEW
RESOLUTION TRUST CORPORATION

VOL. I NO. 3

Marchl990

David C. Cooke, Executive Director

L. William Seidman, Chairman

RTC Adds 20 Institutions To Conservatorship Program And
Resolves 3 Cases In March

RTC Announces Plans to Resolve 141 Institutions In Second
Quarter, 94 Sold From Inception Through May 14 As Resolution
Pace Quickens

* Proceeds of Asset Sales Total $3.2 Billion In March

MARCH CONSERVATORSHIP
CASELOAD

During March, 20 institutions were taken into
conservatorship by the RTC. In the same
month, resolution transactions reduced the
caseload by three institutions. As a result, the
total number of institutions in the conservatorship program rose to 350 at the end of
March, compared with 333 a month earlier.
All three resolutions were purchase and assumption transactions in which all deposits,
certain other liabilities and a significant portion of assets were sold to another party.
March resolution activity was slower than in
previous months largely because of uncertainties stemming from legal challenges to the
authority of the Office of Thrift Supervision
to take action against institutions under its
jurisdiction. From the inception of the RTC
in August 1989 to the end of March, the aggregate number of cases resolved totalled 52.

More recently, however, the pace has quickened, as 42 cases were resolved in April and
early May, raising to 94 the total number of
resolutions accomplished through May 14.
Continuation of this uptrend is anticipated,
and the current goal is 141 resolutions from the
end of March to the end of June.

In dollar terms, the 20 conservatorships established in March held a total of $6.8 billion
in assets, while the three March resolutions

RTC March Caseload
($ in billions)

End of February
New Conseivatorships
Resolved Cases
End of March

333
20
3
350

.AsSlli I,ialliliti1:s ~
5155.2
6.8
2.3
$159.8

$ 181.3
7.0
2.8
$185.5

Assets based on preliminary 3/31/90 financial reports.
Liabilities and Deposits based on 1/31/90 financial reports.

$ 133.6
5.6
2.1
$ 137.1

CONSERVATORSHIP, RECEIVERSHIP ASSETS
UNDER ATC MANAGEMENT
As of March 31, 1990

CONSERVATORSHIPS

RECEIVERSHIPS

As of March 31 , 1990

As of March 31, 1990

Del.

Loans
20.6%

Securities

26.1%

(Percentage Of Gross Assets)

RECEIVERSHIP INSTITUTIONS
(dollars in billions)

CONSERVATORSHIP INSTITUTIONS
(dollars In bllllon11)

Cash & lnvst. Sec.
Mtg. Backed Sec.

Amount
21 .4
20.2

Percent
Gross Assets
13.39%
12.66

Cash & lnvst. Sec.
0th. Sec.

Amount
1.1
0.6

Percent
Gross Assets
7.96%
4.40

Pert. Lns. - Total
1-4 Family Mtgs.
Other Mtgs.
0th. Loans.

82.0
47.6
22.8
11 .6

51 .31
29.79
14.24
7.28

Pert. Lns. - Total
1-4 Family Mtgs.
Other Mtgs.
0th. Loans.

5.3
2.6
2.2
0.5

40.06
19.94
16.32
3.81

Del. Lns. - Total
1-4 Family Mtgs.
Other Mtgs.
0th . Loans.

11 .6
1.3
8.6
1.6

7.24
.84
5.39
1.00

Del. Lns. - Total
1-4 Family Mtgs.
Other Mtgs.
0th. Loans.

2.7
0.4
2.0
0.4

20.63
2.74
14.89
2.99

Real Estate Owned
Other Assets

13.7
10.9

8.59
6.81

Real Estate Owned
Other Assets

2.3
1.3

16.98
9.97

159.8

100.00

13.3

100.00

Gross Assets

Data based on preliminary 3/31/90 information
Number of institutions: 52

Data based on preliminary 3/31/90 information
Number of Institutions: 350

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represented $2.3 billion in assets. At the end
of March, the 350 conservatorship institutions
held$ 159.8 billion in assets.

loans and $ 1.8 billion in real estate.
Maturities and other payments totalled $16.0
billion.

Of the total amount of assets held in institutions in conservatorships, 26.1 % was in cash,
mortgage-backed securities and other investments; 29.8 % was in performing 1-4 family
mortgages; 21.5% was in other performing
loans; 7.2% was in loans delinquent over 90
days; and 8.6% was in real estate.

RESOLUTION TRANSACTIONS AND
RECEIVERSHIP COLLECTIONS

As might be expected, the asset composition
of institutions in receivership differed from
that of conservatorship institutions in a number of important respects. For receiverships,
cash and securities, performing 1-4 family
mortgages and other total performing loans
represented smaller proportions of total assets than in the case of conservatorships. On
the other hand, delinquent loans (20.6%) and
real estate (17.0%) were considerably higher
relative to total assets in receiverships.
Including both conservatorships and
receiverships, the total inventory of assets
under RTC management at the end of March
amounted to $173.1 billion, according to
preliminary data. This included $43.3 billion
in cash and securities, $50.2 billion in performing 1-4 family mortgages loans, $3 7.1 billion in other performing loans, $14.3 billion
in delinquent loans and $16.0 billion in real
estate.

In the three March resolutions, the RTC sold
$1.2 billion in assets to acquirers, which represented about one-half of the total assets held
by the institutions involved in these transactions. Assets sold included $637 million in
mortgages and $446 million in other loans.
From August to March, the RTC sold $6.3
billion in assets as part of resolution transactions. Sales included $3.8 billion in
mortgages, $905 million in other loans, $ 1.0
billion in securities and $635 million in other
assets.
With respect to receivership proceeds, in
March, the RTC received $107 million in
sales and principal payments and collected
$18 million in interest. Receivership sales and
principal collections included $82 million
from loans and $19 million from real estate.
From August to March, receiverships
generated $512 million in sales and principal
payments -- including $75 million from
securities, $344 million from loans, $60 million from real estate and $33 million from
other assets -- and $140 million in interest.
Combining conservatorships, resolutions and
receiverships, the proceeds of asset sales of all
types amounted to $3.2 billion in March and
$26.3 billion for the entire August-March
period. ·

ASSET SALES AND COLLECTIONS
FROM CONSERVATORSHIPS

RTC conservatorships registered asset sales
of $2.1 billion in March. These sales included $1.3 billion in securities, $417 million
in loans and $264 million in real estate.
Maturities and other payments brought in
another $3.0 billion.

RTC's MAJOR REAL ESTATE SALES

The proceeds of sales of real estate from conservatorships and receiverships totalled $283
million in March. The book value of the
properties sold amounted to an estimated
$403 million. Some of the highlights of the

From August to March, conservatorships collected $19.9 billion from asset sales -- including $14.8 billion in securities, $2.7 billion in
-3-

ASSET COLLECTIONS
CONSERVATORSHIPS, RESOLUTIONS, AND RECEIVERSHIPS
SALES AND COLLECTIONS

MARCH 1990

INCEPTION 1989 THROUGH MARCH 1990
($ in millions)

($ in millions)

Rec.

Interest $140
Other Assets $1,580

t-"sc"-<-'.L-J

Interest $18
Other Assets S98

$2,008

Securities

I
I

CONSERVATORSHIPS SALES PROCEEDS
($ in millions)
Inception through March 1990

Mortgages
Other Loans
Securities
Owned Assets
Other Assets
TOTALS

Total

$2,331

$494

f
$573

CONSERVATORSHIPS SALES PROCEEDS
($ in millions)
March 1990

':!!..

$654

$610

378

123

109

14,781

3 ,125

2,444

2,728

6,483

1,828

271

258

683

616

597

148

.1J1

167

170

$19 ,916

$4,161

$3,435

$4,332

$7,988

Mortgages
Other Loans
Securities
Owned Assets
Other Assets
TOTALS

Total

$7 ,237

$2 ,096

f
$834

':!!..

$1,271

$3 ,036

2 ,292

925

320

534

514

6 ,024

1, 175

1,268

1,546

2 ,034

115

319

158

$15 ,988

$4 ,281

$2,596

$3,486

$5,624

Mortgages
Other Loans
Securities
Owned Assets
Other Assets
TOTALS

RESOLUTIONS AND RECEIVERSHIPS

Securities
Owned Assets
Other Assets
Interest
TOTALS

Total

$3 ,996

$862

':!!..

$144

$61

$22

$176

443

510

143

248

264

116

$2 ,062

$624

$620

$240

$578

Total
$955
463
1,559

':!!..

$377

$111

$104

$363

239

145

506

352

656

2.£

$2,993

$1 ,129

$508

$190

$1,167

RESOLUTIONS AND RECEIVERSHIPS
SALES AND COLLECTIONS
($ in millions)
March 1990

SALES AND COLLECTIONS
($ in millions)
Inception through March 1990

Mortgages
Other Loans

Total
$403
14
1,345

CONSERVATORSHIPS: OTHER COLLECTIONS
($ in millions)
March 1990

Inception through March 1990

CONSERVATORSHIP: OTHER COLLECTIONS
($ in millions)

$2,932

':!!..

$478

$1,791

$865

1,018

137

815

1,118

245

622

183

664

219

333

140

£!

$7 ,000

$1 ,547

$611

$3 ,638

$1 ,204

Mortgages
Other Loans
Securities
Owned Assets
Other Assets
Interest
TOTALS

• By RTC Reg ion ,

-4-

Total

$655

$13

510
28

':!!..

$639

506

9
45

!!.

$1 ,280

$32

$1 ,232

Savings Association, which has been operating
under government conservatorship since
February 7, 1989.

RTC's March real estate sales activity include
the following:
*

Five parcels of land located in the Hastings
Green area of Houston. The land was a real estate asset owned by Ameriway Savings Association, Houston, Texas, which has been operating
under government supervision since March 9,
1989. The purchaser paid $2.7 million for the
land, which is 101 % of its appraised value.
The Hyatt Grand Champions Hotel, a 316-room
and 20-villa luxury hotel on 34.5 acres in the Palm
Springs area of California, was sold to Maruko,
Inc. The hotel was a real estate asset owned by
Gibraltar Savings, FA., Simi Valley, California,
which has been operating under government supervision since March 31, 1989. Maruko paid
$66.5 million for the property, which was 104% of
its appraised market value.
A 2.88-acre estate lot on Meadowood Drive in
Dallas, which boasts tennis courts and a swimming pool. The residential-zoned lot, which sold
for $1.4 million, was a real estate asset of
Metropolitan Financial Federal Savings and
Loan Association, Dallas, Texas, which has been
in government conservatorship since March 10,
1989. The purchaser plans to build a residence on
the lot.
A 224-unit apartment complex, on 8.3 acres of
land, located in Houston, Texas. The complex
was one of the assets retained by the R TC following the sale of University Federal Savings Association, Houston, Texas, to NCNB Texas
National Bank on October 13, 1989. The purchaser paid $1.6 million for the complex.

SOURCES AND USES OF FUNDS

The RTC obtained funds from four sources
between August 9, 1989 and March 31, 1990:
$18.8 billion in Treasury appropriations, $1.2
billion in Federal Home Loan Bank contributions, $9.5 billion in Resolution Funding Corporation borrowings, and $2.6 billion in in
Federal Financing Bank borrowings.
The 52 resolutions consummated through the
end of March required approximately $16.2
billion in outlays from the RTC. The RTC
also advanced $12.7 billion to conservatorship institutions as part of its high cost funds
replacement program and emergency liquidity loans. These advances provided conserva torships with a source of funds for
replacing high cost deposits as they matured.
200 institutions were participating in the
funds replacement program as of March 31.
The RTC carried approximately $3.2 billion
into April to fund resolutions.
SOURCES AND USES OF FUNDS
($ in billions)
Inception through March 1990

SOURCES:
Treasury Appropriation
FHLB Contribution
REFCORP Borrowings
FFB Borrowings
TOTAL SOURCES
USES:
Resolutions
Advances
TOTAL USES
NET FUNDS AVAILABLE'

11.3 acres of residential land in a suburb of Dallas, Texas which sold for $2.6 million. This land
was also among the assets the R TC retained following the sale of University Federal.
Eastchase Apartments, a 272-unit apartment
complex located in Fort Worth, Texas and Oak
Hills Apartments, a 244-unit apartment complex
located in Irving, Texas, were sold to DMC-Dallas Apartments, a Dallas-area management company, for $6.5 million and $7.9 million,
respectively. Oak Run Apartments, a 160-unit
apartment complex located in Pasadena, Texas,
was sold to Oak Run Manor, a Texas investment
group, for $3.3 million. All of these sales were
completed through direct sales by the RTC. The
complexes were real estate assets owned by Gill

• lndudes Funds For Corporate Administrative Expenses.

-5-

$ 18.8

1.2

9.5.

2..6.
$.Jll
$ 16.2

12.1
$ .28..2.
$

3.2

MARCH NEWS NOTES
RTC ANNOUNCES SEMINARS

The RTC announced that it will hold ten
seminars to inform the public about how the
RTC works and how to take part in the many
opportunities that the RTC has to offer.
These one-day conferences, titled "How to
Work with the RTC," were scheduled to take
place between April 17 and July 11, 1990, in a
number of cities around the country.
The cost for the event is $220, which includes
two meals and the conference materials. Interested individuals can contact 1-800-4310600 to register or to receive more
information on the seminar.
RTC ESTABLISHES 14 CONSOLIDATED
OFFICES

The RTC announced that it has established 14
regional service centers for the RTC's asset
sales and real estate management activities.
RTC Executive Director David C. Cooke explained that the purpose for establishing
these consolidated offices is "to be in touch
with and accessible to the local markets where
our assets exist."
These consolidated offices will operate under
the jurisdiction of the RTC's four regional
offices. Specific information on the consolidated offices including their addresses
and phone numbers is available from the RTC
Reading Room at (202) 416-6940.
RTC TO RESOLVE 141 INSTITUTIONS
BY END OF JUNE

Washington, D.C. Saying that "sales is the
name of the game," the Chairman announced
that the RTCwould sell or liquidate 141 conservatorship institutions by June 30, 1990--including at least 50 institutions that would be
liquidated without any sales attempts. He
called these liquidations "Operation Clean
Sweep". Each of the 141 institutions slated
for resolution by June 30, including the
Operation Clean Sweep S&L's, have been
advertised in the Wall Street Journal. As of
May 14, 42 of the 141 institutions had been
resolved.
During his speech the Chairman also announced that:
*

The R TC would make a new computerized real
estate asset inventory available to the public in
the spring.

The agency will hold a major auction of "opportunity" real estate assets by summer's end.

The RTC expects to sell about 1,000 low income
properties within the next six months.

Copies of Chairman Seidman's speech and
the RTC's advertisements are available from
the RTC Reading Room.
KEY POLICY ACTION IN MARCH

The RTC Board agreed that institutions that
completed FSLIC-assisted transactions will
not be precluded from buying thrifts from the
RTC.
This and all other RTC policy statements are
available from the RTC Reading Room at
(202)416-6940. Written requests should be
mailed to RTC Reading Room, 550 17th
Street, N.W., Washington, D.C. 20429.

On March 21, RTC Chairman L. William
Seidman spoke to the National Press Club in

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