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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
Federal Deposit Insurance Corporation

Washington, D.C.

May 15, 1985

SIRS: In accordance with the provisions of section 17(a) of the 

Federal Deposit Insurance Act, the Federal Deposit Insurance 

Corporation is pleased to submit its Annual Report for the 

calendar year 1984.

Very truly yours,

William M. Isaac

Chairman

The President of the U.S. Senate

The Speaker of the U.S. House of Representatives

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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
BOARD OF DIRECTORS

W illiam M. Isaac

William M. Isaac has been 

Chairman of the Federal Deposit 

Insurance Corporation since 

August 3, 1981. He was 

appointed to a six-year term on 

the FDIC’s Board of Directors in 

March 1978. From 1974 to 1978 

he was vice president, general 

counsel and secretary of First 

Kentucky National Corporation 

and its subsidiaries, First 

National Bank of Louisville and 

First Kentucky Trust Company. 

From 1969 to 1974 he practiced 

law with Foley & Lardner, 

Milwaukee, Wisconsin. A native 

of Bryan, Ohio, Mr. Isaac 

received his undergraduate 

degree from Miami University, 

Oxford, Ohio, and his law degree 

(summa cum laude) from The 

Ohio State University, Columbus, 

Ohio.

Irvine H. Sprague

Irvine H. Sprague, a member of 

the Federal Deposit Insurance 

Corporation Board of Directors 

from 1969 to 1972, and from 

1979 to date, served as FDIC 

Chairman from February 1979 to 

August 1981. He has held a 

number of other government 

positions, including Special 

Assistant to President Lyndon 

Johnson in the White House, 

Deputy Director of Finance for 

the State of California, and 

Executive Director of the 

Steering and Policy Committee in 

the U.S. House of 

Representatives. Mr. Sprague, a 

native of San Francisco, 

California, is a graduate of the 

College of the Pacific and the 

Advanced Management Program 

at Harvard and also attended 

George Washington University 

and Indiana University. Mr. 

Sprague entered the Army in 

World War II as a private and 

retired from the Army Reserve 

as a lieutenant colonel. He 

earned the Combat Infantry 

Badge, Purple Heart, California 

Medal of Merit and two Bronze 

Stars.

C.T. Conover

C.T. Conover became 

Comptroller of the Currency in 

December 1981. Mr. Conover, a 

native of Bronxville, New York, 

who holds a BA from Yale 

University and an MBA from the 

University of California at 

Berkeley, started in banking as a 

management trainee with 

Seattle-First National Bank. He 

came to the Comptroller’s post 

from Edgar, Dunn & Conover, 

Inc., a general management 

consulting firm he helped found 

in San Francisco. Earlier he was 

part of the management 

consulting group of Touche Ross 

& Co., San Francisco, serving as 

a principal and national services 

director from 1974 to 1978. Prior 

to that, Mr. Conover was vice 

president of U.S. Bancorp, 

Portland, Oregon. He was a 

management consultant with 

McKinsey and Company from 

1965 to 1972.

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Federal Reserve Bank of St. Louis
BOARD OF 

DIRECTORS

Chairman 

Director 

C om ptroller of 

the Currency

Chairman

Deputy 

to the 

Chairman

O ffice of 

Executive 

Secretary

O ffice of 

Personnel 

M anagement

O ffice of 

Congressional 

Relations 

and Corporate 

Comm unication:

O ffice of 

Corporate 

Audits and 

Internal

O ffice of 

Equal 

Employment 

O pportunity

Legal

Division Division of Division of

Division of of Bank Research and Accounting and

Division Liquidation Supervision Strategic Planning Corporate Services

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Federal Reserve Bank of St. Louis
The FDIC Senior Management Group: (from left) Robert V. Shumway, Director, Division of Bank Supervision; James A. Davis, Director, 

Division of Liquidation; Margaret L. Egginton, Deputy to the Chairman; Stanley C. Silverberg, Director, Division of Research and Strategic 

Planning; Chairman William M. Isaac; John C. Murphy, Jr., General Counsel, Legal Division, and Stanley J. Poling, Director, Division of 

Accounting and Corporate Services.

FDIC OFFICIALS

Deputy to the Chairman 

Margaret L. Egginton

Director, Division of Bank Supervision 

Robert V. Shumway

General Counsel 

John C. Murphy

Director, Division of Liquidation 

James A. Davis

Director, Division of Accounting and 

Corporate Services 

Stanley J. Poling

Director, Division of Research and 

Strategic Planning 

Stanley C. Silverberg

Assistant to the Deputy to the Chairman 

Christie A. Sciacca

Deputy to the Appointive Director 

John R. Curtis

Special Assistant to the Appointive 

Director

Kenneth Fulton

Deputy to the Director (Comptroller of the 

Currency)

Dixon L. Mitchell

Executive Secretary 

Hoyle L. Robinson

Director, Office of Congressional Relations 

and Corporate Communications 

Graham T. Northup

Corporate Communications Officer 

Alan J. Whitney

Director, Office of Corporate Audits and 

Internal Investigations 

Robert D. Hoffman

Director, Office of Personnel Management 

Jack C. Pleasant

Director, Office of Equal Employment 

Opportunity 

Mae Culp

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Federal Reserve Bank of St. Louis
REGIONAL DIRECTORS

DALLAS

Division of Liquidation g Michael Newton

1910 Pacific Avenue, Suite 1600 

Dallas, Texas 75201

ATLANTA

William M. Dudley

233 Peachtree Street, N.E., Suite 2000

Atlanta, Georgia 30043

NEW YORK

Michael J. Martinelli

452 5th Avenue

New York, New York 10018

CHICAGO

Thomas A. Beshara

30 South Wacker Drive, Suite 3200

Chicago, Illinois 60606

SAN FRANCISCO

Lamar C. Kelly, Jr.

25 Ecker Street, Suite 1900 

San Francisco, California 94105

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Federal Reserve Bank of St. Louis
REGIONAL DIRECTORS

Division of Bank Supervision CHICAGO

Paul G. Fritts

233 S. Wacker Drive, Suite 6116 

Chicago, Illinois 60606

ATLANTA

Edwin B. Burr

233 Peachtree Street, N.E., Suite 2400 

Atlanta, Georgia 30043

COLUMBUS

Jerald L. Adams 

1 Nationwide Plaza, Suite 2600 

Columbus, Ohio 43215

BOSTON

Jesse G. Snyder 

60 State Street, 17th Floor 

Boston, Massachusetts 02109

DALLAS

Roy E. Jackson

350 North St. Paul Street, Suite 2000 

Dallas, Texas 75201

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Federal Reserve Bank of St. Louis
KANSAS CITY

Joseph V. Prohaska

2345 Grand Avenue, Suite 1500

Kansas City, Missouri 64108

m '1>

ti i

MEMPHIS

James E. Halvorson 

1 Commerce Square, Suite 1800 

Memphis, Tennessee 38103

MINNEAPOLIS

Milos Konjevich

730 Second Avenue South, Suite 266 

Minneapolis, Minnesota 55402

NEW YORK

Edward T. Lutz 

452 5th Avenue 

New York, New York 10018

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Federal Reserve Bank of St. Louis
OMAHA

Paul M. Rooney

1700 Farnam Street, Suite 1200 

Omaha, Nebraska 68102

SAN FRANCISCO

Anthony Scalzi

25 Ecker Street, Suite 2300

San Francisco, California 94105

PHILADELPHIA

Kenneth Walker

1900 Market Street, Suite 616

Philadelphia, Pennsylvania 19103

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Federal Reserve Bank of St. Louis
The 1984 Annual Report of the 

Federal Deposit Insurance Corporation 

is published by the FDIC.

Corporate Communications Office, 

Room 6061-B, 550 17th Street, N.W., 

Washington, DC 20429.

Alan J. Whitney, Corporate 

Communications Officer.

Writer-Editor: Juliette E. Amberson 

Art Director: Geoffrey L. Wade 

Designer: Geri Pavey 

Photography:

Kevin Horan — pages iv, vii, xiv, 

3, 7, 8, 9 (upper), 15, 16, 

17 (left), 18, 19 (left), 20, 

21 (upper)

Geoffrey L. Wade — pages 5,

9 (lower), 12, 17 (right),

19 (right), 21 (lower)

Ken Heinen — page 2

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Federal Reserve Bank of St. Louis
TABLE OF CONTENTS

FDIC Board of D irectors_____________________________________ iv

FDIC Organization Chart_____________________________________ vi

FDIC O fficials________________________________________________ vii

FDIC Regions and D irecto rs_________________________________ viii

Chairman’s S tatem en t_______________________________________ xiv

Operations of the C orporation_______________________________ 2

Financial Statem ents _______________________________________ 22

Legislation and R egulations_________________________________ 36

Legislation - 1984___________________________________ 36

Regulations - 1984___________________________________ 37

Statistics of Closed Banks and Deposit In su ran ce_________ 44

Banks Closed Because of Financial Difficulties, FDIC Income, 

Disbursements, and Losses

Index ________________________________________________________ 53

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Federal Reserve Bank of St. Louis
The FDIC opened 1984 by marking its 

fiftieth year since beginning operations on 

January 1, 1934. The U.S. Postal Service 

issued a stamp commemorating the 

occasion, and the Postmaster General joined 

us for first day ceremonies in our 

Washington Office lobby. We reflected with 

pride on the FDIC’s record of service to the 

nation and renewed our commitment to 

maintaining strength and stability in the U.S. 

banking system. The celebration began a 

year that turned out to be the most 

challenging and eventful in the FDIC's 

history.

The headline-grabbing event of the year 

concerned a bank that did not fail, but came 

close — Continental Illinois National Bank. 

Working with other regulators and major 

banks, the FDIC provided the bank with 

interim financial assistance and then 

fashioned a permanent assistance package,

CHAIRMAN’S STATEMENT

including the appointment of new leadership 

in the bank. These measures put Continental 

back on course, and its profitability and 

funding are being restored more quickly than 

anticipated. Never before have financial 

regulators and leading banks responded so 

swiftly and harmoniously to a crisis of this 

magnitude. The FDIC’s actions demonstrated 

both our commitment and our capacity to 

maintain stability in a volatile financial 

environment.

Insured bank failures in 1984 climbed to a 

new post-Depression record of 79, yet the 

FDIC insurance fund emerged stronger and 

more liquid than ever despite increased bank 

failures in recent years. During the first 47 

years of the FDIC’s operations, the agency 

handled 568 bank failures involving $9 billion 

in assets. From the beginning of 1981 

through 1984, the FDIC handled 179 failures 

with over $27 billion in assets, excluding 

Continental. Our losses since the beginning 

of 1981 have been about $1 billion each 

year, compared with less than $500 million 

during the first 47 years combined. 

Nevertheless, our insurance fund has grown 

dramatically from $11 billion at the beginning 

of 1981 to over $17 billion at year-end 1984. 

Our annual gross income now exceeds $3 

billion and our annual net cash flow exceeds 

$5 billion.

Profound changes have occurred in the 

banking system in the last few years.

Banking has become a more complex, 

faster-paced business. The economic

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environment has been volatile and 

unforgiving of mistakes. The competitive 

environment has become ever more intense. 

Banking also has become a much more 

difficult business to properly supervise. There 

are many more ways for a bank to 

encounter problems, and they can develop 

virtually overnight.

The FDIC initiated or continued a number 

of activities in 1984 as part of its long-term 

efforts to stay abreast of change. We 

undertook major efforts to improve our 

training programs, examination procedures, 

technological capabilities and organizational 

structure to cope with a rapidly evolving 

industry.

For example, we are currently spending 

over $7 million per year on training to 

assure that our personnel will be able to 

cope with the complexities of the industry. 

We have made a major commitment to 

upgrading the quality of our off-site 

monitoring and analysis of banks to spot 

developing problems at an earlier stage. We 

are targeting both on-site and off-site 

supervisory efforts in those areas where our 

exposure is greatest: larger institutions and 

troubled banks, irrespective of their charter.

Under agreements with the Comptroller of 

the Currency and the Federal Home Loan 

Bank Board, the FDIC participates in 

cooperative examinations to obtain a more 

comprehensive view of national banks and 

federally chartered savings banks. We are 

hopeful that a similar arrangement will be 

worked out with the Federal Reserve Board 

for state member banks.

As more banks have failed, we have 

stepped up our investment in technology to 

handle the larger number of liquidations and 

failed bank assets. The FDIC has committed 

over $13 million in a three-year project to 

automate our burgeoning liquidation 

activities.

In another action to improve our 

supervisory activities and our efficiency, we 

moved to consolidate our field operations. 

Finally, we completely overhauled our 

applications procedures to eliminate most of 

the paperwork and greatly speed the 

processing.

The FDIC took events in stride during 

1984 and positioned itself to be as effective 

and efficient as possible in the face of

dramatic changes in banking. However, no 

amount of internal maneuvering by the FDIC 

or other regulators can mitigate certain 

issues that threaten to undermine all that 

has been done to create and support a 

healthy financial system.

First, severe limitations have been placed 

on the ability of banks to compete, prosper 

and serve the financial needs of the 

American public. Congress has not rectified 

inequities in federal law that allow 

nonbanking businesses to engage in banking, 

but prohibit reciprocal investment by banks 

in such fields as real estate, insurance and 

securities. It is essential that steps be taken 

swiftly to expand the range of financial 

services banks are permitted to offer. 

Proposed federal legislation would modernize 

the outmoded, 50-year-old barriers that 

separate the banking, securities, insurance 

and real estate industries. If enacted, these 

reforms will afford the public a broader 

range of convenient financial services at 

more competitive prices and will greatly 

strengthen our financial system.

Second, the financial regulatory system is 

fundamentally flawed, with no fewer than 

five federal agencies regulating and insuring 

banks and thrifts. We can no longer 

rationalize a system in which bank holding 

companies are supervised by one agency 

while the banks controlled by them are 

supervised by one or more different 

agencies. Nor can we justify a system in 

which savings and loan associations, which 

are in direct competition with banks for 

deposits and many loans, operate under 

vastly more lenient capital, disclosure and 

accounting standards. Nor can we continue 

to accept a system in which a tangled web 

of state and federal agencies is responsible 

for supervising the various segments of 

related banking enterprises.

The Vice President’s Task Group on 

Regulation of Financial Services met for the 

last time early this year and approved a 

sweeping set of recommendations for 

regulatory reform, including realignment of 

the financial regulatory agencies to reduce 

their overlapping responsibilities and better 

target their resources. As a member of the 

Task Group, the FDIC supported the 

recommendations as a much needed 

improvement over the status quo, although

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Federal Reserve Bank of St. Louis
we believe even more far-reaching measures 

are justified.

The recommendations would give the 

FDIC the tools it needs to perform as a 

strong, independent insurer and would 

eliminate the day-to-day regulatory activities 

we consider unnecessary to our insurance 

function. It is difficult to predict when or if 

the proposed plan will be adopted by the 

Congress or the precise form it may take. It 

is our hope that the Congress will move 

swiftly to implement these recommendations, 

together with new powers legislation so 

essential to the vitality of the banking and 

thrift industries and to the American public.

In the absence of legislation, we will 

continue our efforts to move in the direction 

envisioned in the proposed plan, 

emphasizing our role as insurer of bank 

deposits and de-emphasizing our involvement 

in routine supervision of non-problem banks.

Third and most critical of all the issues 

facing the banking system is the operation 

of the deposit insurance system itself. 

Conceived during the banking collapse of 

the 1930s, the federal deposit insurance 

system was intended to restore confidence 

and stability by protecting small depositors, 

and this it has accomplished. However, the 

operation of the deposit insurance system 

has encouraged excessive risk-taking and 

has subsidized the growth of poorly 

managed banks at the expense of sound 

institutions. As a growing number of bank 

failures over the years have been handled 

through mergers and, in some cases, 

through direct financial assistance from the 

FDIC, depositors and other creditors — 

particularly in larger banks — have become 

accustomed to and expect 100 percent 

insurance protection.

The danger in this kind of system 

becomes acute in a deregulated interest rate 

environment. With banks free to pay as they 

wish for deposits, how do we ensure that 

deposits flow to the vast majority of banks 

that are well-managed rather than to the 

high-risk banks that tend to pay the highest 

rates?

We must enlist the support of the 

marketplace in our efforts to create a 

stronger, more disciplined banking system. 

Public disclosure of the financial condition 

and practices of banks has been enhanced

in recent years and these efforts will 

continue.

The FDIC has taken other initiatives to 

eliminate excessive risk-taking. Bank capital 

ratios have been raised substantially in the 

past few years and even higher ratios are in 

the offing. The use of formal enforcement 

actions against problem banks and their 

officers and directors has increased 

manyfold over the past several years and 

this trend will continue. We have undertaken 

a number of measures to control the 

massive abuses of the deposit insurance 

system by money brokers.

Finally, legislative proposals are pending 

to reform the operations of the deposit 

insurance system. One of the many reforms 

the FDIC has proposed is to charge 

individual banks a premium for insurance 

based on an objective evaluation of risk 

rather than the current flat-rate assessment.

I believe we will make substantial 

progress in these areas in the months and 

years ahead. I am convinced that the result 

will be a more competitive and responsive 

and far stronger financial system than 

America has ever known.

I would like to close my message with a 

few words about this year's annual report. 

Though I hope no cause-and-effect 

relationship exists, my term as Chairman has 

coincided with the most tumultuous period in 

FDIC history. Throughout this time, I have 

been bolstered and inspired by the expertise 

and extreme dedication of our employees. 

They carry out their jobs with high 

professionalism even in all-too-frequent 

circumstances of personal sacrifice and 

hardship. Individually and as a group, they 

have set a standard of excellence to which 

all government employees should aspire. In 

tribute to them, we have selected as the 

theme for this report “ The Faces of the 

FDIC.” We have included as many 

photographs of FDIC employees as space 

permits.

We offer this cheerful pictorial gallery as 

a sample of the employees who make the 

FDIC so fine a place in which to serve the 

nation. It has been an immense privilege and 

honor for me to have served with them 

during this period of challenge and triumph.

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Federal Reserve Bank of St. Louis
Federal Deposit

Insurance

Corporation

Postmaster General William F. Bolger (left) and FDIC Chairman 

William M. Isaac admire an exhibit of the postage stamp 

commemorating the FDIC’s 50th anniversary. The stamp was 

designed by Michael David Brown, a Maryland-based graphic 

designer.

THE YEAR’S ACTIVITIES

The near collapse of Continental Illinois 

National Bank and Trust Company, a 

monumental emergency with potentially 

global consequences, and the historymaking efforts of the FDIC and the other 

financial regulators in developing a plan to 

restore Continental’s viability dominated the 

Corporation’s activities in 1984. Yet the 

year was significant in other respects, too.

The FDIC handled a record 79 insured 

bank failures in 1984, the highest number of 

insured bank failures in the agency’s 

history. At the same time, despite increased 

costs, the deposit insurance fund climbed to 

a new high of over $17 billion.

During the year, the FDIC issued 

significant proposed or final rules in a 

number of areas including bank securities 

activities and non-banking financial services, 

minimum capital requirements, limitations 

on deposit insurance for brokered deposits 

and reporting requirements on such 

deposits.

Finally, the Corporation made many 

internal changes in 1984 that will enable it 

to more efficiently and effectively meet its 

future responsibilities in the dramatically 

changing financial institutions and regulatory 

environment. One major action was the 

consolidation of the FDIC’s 12 regions into 

six regions with the Bank Supervision, 

Liquidation, Legal, and Accounting and 

Corporate Services Divisions represented in 

each consolidated office. The regional office 

restructuring reflects the trend toward 

consolidation of banking units and the 

Corporation’s determination to be 

geographically and organizationally in step 

with the evolving industry.

FDIC Chairman Isaac autographs a first-day cover of the FDIC 

commemorative stamp. Hundreds of FDIC employees and stamp 

collectors attended the Washington Office observance of the FDIC's 

50th year of operations.

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Federal Reserve Bank of St. Louis
Continental Illinois National Bank 

Chicago, Illinois

THE CONTINENTAL RESCUE

The difficulties of Continental Illinois 

National Bank became public in 1982 when 

it experienced large losses resulting from 

loans purchased from the failed Penn 

Square Bank in Oklahoma City. Continental 

had purchased hundreds of millions of 

dollars of energy loans from Penn Square. 

Severe financial difficulties continued at 

Continental during 1983.

By early 1984, in excess of 8 percent of 

the bank’s total loans were not performing 

as agreed, more than twice the average 

percentage of nonperforming loans at the 

nation’s banks. The bank had been relying 

heavily on large foreign deposits and Fed 

funds, and was vulnerable to a run. First 

quarter 1984 financial statements revealed 

that Continental was able to report a profit 

only because of the sale of its credit card 

business during the quarter and that the 

regular quarterly dividend was paid from the 

proceeds of that sale.

Early in May, a massive run by 

Continental’s depositors began when 

European and Japanese depositors, reacting 

to rumors of the bank’s impending collapse, 

quickly withdrew several billion dollars. 

Moreover, the funding problem at 

Continental was beginning to affect financial 

markets generally. On May 11, the bank 

borrowed almost $4 billion from the Federal 

Reserve Bank of Chicago, partially offsetting 

the run on deposits.

During this time, the FDIC, the Office of 

the Comptroller of the Currency, and the

Federal Reserve began to consider possible 

solutions, including government intervention, 

to Continental’s funding problems.

In the meantime, Continental officials had 

been putting together a private funding line 

and on May 14, they announced that 16 of 

the nation’s largest banks, led by Morgan 

Guaranty Trust Company of New York, 

would extend almost $5 billion in credit to 

the troubled bank. However, the 

announcement did not halt the outflow of 

deposits.

On May 17, Continental received an 

interim capital infusion, in the form of a 

subordinated note purchase, of $2.0 billion 

from the FDIC, $500 million dollars of which 

the FDIC participated to several major 

banks. The FDIC took this action to stabilize 

both the bank’s condition and the banking 

system, and to provide sufficient time to 

resolve the bank’s difficulties in the most 

orderly manner possible and at the lowest 

cost to the FDIC. The FDIC also gave 

assurance that all depositors and other 

general creditors of the bank would be 

protected in any subsequent resolution of 

Continental’s problems. The Federal 

Reserve promised liquidity support to the 

bank.

The interim funding program stemmed 

the run on the bank and worked well as a 

temporary solution, particularly through 

most of June. In late June and throughout 

July, the situation deteriorated as adverse 

press stories and speculation appeared 

almost daily and as funds suppliers became 

anxious about the nature of the permanent 

solution.

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Federal Reserve Bank of St. Louis
Permitting Continental to fail and paying 

off insured depositors was never a feasible 

option for the regulators. Insured accounts 

totalled only slightly more than $3 billion. 

This meant that uninsured depositors and 

other private creditors with over $30 billion 

in claims would have had their funds tied 

up for years in a bankruptcy proceeding 

awaiting the liquidation of assets and the 

settlement of litigation. Hundreds of small 

banks would have been particularly hard hit. 

Almost 2,300 small banks had nearly $6 

billion at risk in Continental; 66 of them had 

more than their capital on the line and 

another 113 had between 50 and 100 

percent.

The decision to structure a permanent 

assistance plan for Continental Illinois was 

arrived at after attempts to arrange an 

assisted acquisition by private investors or 

other banking organizations proved 

unsuccessful.

In addition to its funding problems, 

Continental had billions of dollars of 

troubled loans and many outstanding 

lawsuits. These were drawbacks in trying to 

attract a merger partner for Continental. It 

became increasingly clear that more 

government assistance would have to be 

the final solution. Between July 13 and July 

26 in a nearly round-the-clock schedule, 

Chairman Isaac and a team of FDIC 

negotiators worked out the final plan with 

officials of the bank, Treasury Secretary 

Regan, Comptroller of the Currency Conover 

and Fed Chairman Volcker.

Provisions of the permanent assistance 

package required approval of the plan by 

shareholders of the bank’s parent holding 

company. At a special meeting in 

September, shareholders overwhelmingly 

agreed, thus avoiding an immediate loss of 

ownership.

The permanent assistance program had 

two main components— top management 

changes and substantial financial 

assistance. Two new, well-known executive 

officers were named. John E. Swearingen 

was named Chairman of the Board and 

Chief Executive Officer of Continental Illinois 

Corporation. Swearingen was retired as 

Chairman of the Board of Directors of 

Standard Oil Company (Indiana) and was a 

former director of The Chase Manhattan 

Bank. William S. Ogden was named 

Chairman of the Board and Chief Executive 

Officer of Continental Illinois National Bank. 

Ogden had retired in 1983 from his position 

as Vice Chairman of the Board of Directors 

and Chief Financial Officer of The Chase 

Manhattan Bank.

The financial assistance program included 

the sale of $4.5 billion in problem loans, 

with a face value of $5.1 billion, to the 

FDIC in return for assumptions by the FDIC 

of $3.5 billion of the bank’s borrowings from 

the Federal Reserve Bank of Chicago, with 

interest at a money market rate. The FDIC 

will repay the Federal Reserve borrowing by 

making quarterly remittances of its 

collections, less expenses, on the troubled 

loans. If there is a shortfall at the end of 

five years, the FDIC will make up the 

deficiency from its own funds.

A second part of the financial assistance 

involved a capital infusion from the FDIC of 

$1 billion in return for two permanent, 

nonvoting preferred stock issues. One issue, 

in the amount of $280 million, was an 

adjustable-rate, cumulative preferred stock 

of Continental Illinois Corporation, callable 

at the option of that Corporation. The other 

was a $720 million preferred issue which 

can be converted into approximately 80 

percent of the ownership of Continental 

Illinois Corporation. The FDIC would have 

preferred placing the new capital directly in 

the bank rather than using the holding 

company as a conduit, but the holding 

company had outstanding indenture 

agreements which precluded this option.

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Federal Reserve Bank of St. Louis
FDIC Chairman William M. Isaac 

announces the details of the historymaking financial assistance package 

for Continental Illinois Bank and Trust 

Company before a packed press 

conference in the FDIC Washington 

Office.

The interest in Continental Illinois 

Corporation owned by the shareholders at 

the time of the assistance package was 

transferred to a newly-formed corporation 

owned entirely by the current shareholders. 

If the FDIC’s preferred stock were 

converted, the new holding company’s 

interest in Continental Illinois Corporation 

would be reduced to 20 percent. At the end 

of five years, an estimate will be made of 

the losses, if any, incurred by the FDIC in 

connection with its purchase of loans and 

assumption of Federal Reserve debt. If the 

FDIC suffers any loss under the loan 

purchase arrangement, including carrying 

costs and expenses of collection, the FDIC 

will have the right to acquire part or all 

(depending on the amount of the loss) of 

these shares at a nominal price. If the FDIC 

does not suffer any losses under the loan 

purchase arrangement, all remaining loans 

and other assets acquired under the loan 

purchase arrangement will be returned to 

the bank.

The assistance plan gives the FDIC 

certain basic protections as a major 

investor, such as the right to object to the 

service of any board member, safeguards 

against dilution of the FDIC’s shares and 

the right to veto any merger or 

reorganization. However, the FDIC will not 

control the hiring or compensation of 

officers, lending or investment policies or 

other normal business decisions. The FDIC 

noted that it intended to dispose of its stock 

interest in Continental Illinois as soon as 

practicable.

After approval by the shareholders of the 

permanent aid package, the interim 

subordinated loan to the bank from the 

FDIC and a group of banks was terminated. 

However, the special liquidity support 

provided under the interim aid program by 

the Federal Reserve and the $5.5 billion in 

funding provided by a group of major U.S. 

banks were continued under the permanent 

program.

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Federal Reserve Bank of St. Louis
The FDIC’s total cash outlay after 

consummation of the permanent financial 

assistance program was $1 billion, $500 

million less than under the interim aid 

program. The ultimate gain or loss to the 

FDIC of the permanent assistance package 

depends on the price it receives when it 

sells its stock interest in Continental Illinois 

Corporation and on any losses it incurs 

under the loan purchase arrangement.

All claims against present and former 

officers, directors, employees and agents of 

the bank, as well as bonding companies, 

accounting firms and the like, arising out of 

any act or omission that occurred prior to 

consummation of the permanent aid 

transaction were assigned to the FDIC. Any 

recoveries on these claims will be credited 

to the collections made under the loan 

purchase arrangement.

The FDIC handles most bank failures by 

merging the closed institution into a healthy 

one. The rehabilitation program for 

Continental was purposely designed to 

approximate as nearly as possible the 

effects that result from such mergers. Thus, 

depositors were protected against loss, 

board members and top management were 

replaced, shareholders suffered a 

substantial diminution of their equity, and 

the FDIC retained the right to sue officers, 

directors and others whose actions may 

have been responsible for the bank’s near 

failure.

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Federal Reserve Bank of St. Louis
The FDIC Board of Directors 

discuss banking issues in open 

meeting.

SUPERVISORY OPERATIONS

During 1984 the FDIC Board of Directors 

approved a realignment of the regional 

office structure to achieve economies and 

efficiencies consistent with emerging trends 

in the banking industry. The Corporation set 

a schedule for consolidating its twelve 

regional bank supervision offices into six 

between June 1985 and February 1988.

Two regional offices will be closed in 1985. 

The Omaha Regional Office is expected to 

close in June, and supervisory responsibility 

for the states of Iowa and Nebraska will 

shift to the Kansas City Office. In 

September, the Philadelphia Office is 

scheduled to close. Supervision of insured 

banks in Pennsylvania, Maryland, Delaware 

and the District of Columbia will transfer to 

the New York Office. Insured banks in 

Virginia will be supervised by the Atlanta 

Office.

Closing of the Minneapolis Regional 

Office is planned for June 1986, and 

responsibility for insured bank supervision in 

North Dakota, South Dakota and Minnesota 

will move to the Kansas City Office, while 

supervision in Montana and Wyoming will 

be assigned to the San Francisco Office.

Two regional offices will close in 1987. It 

is anticipated that the Memphis Office will 

close in June and will pass its work in

Tennessee and Mississippi to the Atlanta 

Office. Supervision in Arkansas and 

Louisiana will shift to the Dallas Office, and 

the work of the Dallas Office in Colorado 

will move to the San Francisco Office. The 

Boston Office is scheduled to close in 

August 1987, and its activities in Maine, 

New Hampshire, Massachusetts, Rhode 

Island, Vermont and Connecticut will move 

to the New York Office.

Finally, the Columbus Office is expected 

to close in February 1988. The Chicago 

Region will take over supervisory 

responsibility for Michigan, and the Atlanta 

Regional Office will begin supervising banks 

in West Virginia.

As part of the restructuring, a sixth 

regional liquidation office was established in 

Kansas City, Missouri, and the Legal 

Division and Division of Accounting and 

Corporate Services will establish or 

complete the formation of regional 

headquarters units in the new regional 

offices of Atlanta, Chicago, Dallas, Kansas 

City, New York and San Francisco. This will 

result in the four FDIC divisions having 

regional operations in the same six 

locations.

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Federal Reserve Bank of St. Louis
Having joined the FDIC in June 1940, Jack A. Pinion has worked for 

the FDIC longer than any other employee. He began his career as a 

bookkeeping machine operator in the old Fiscal and Accounting 

Section and presently is an information analyst in the Data 

Administration Unit of the Division of Accounting and Corporate 

Services. He responds to inquiries regarding bank call report data. 

Mr. Pinion also has been associated with the FDIC Credit Union for 

a dozen years, serving as its treasurer for ten years. A man of wideranging interests and knowledge, his current hobbies include 

"tinkering” on classic cars and on his 70-year-old home in Maryland.

Considerable savings are anticipated from 

locating all four divisions in the same cities 

and housing them on the same premises. 

The centralization of divisional resources is 

expected to improve coordination and 

communication among the divisions and 

enhance the ability of the Division of Bank 

Supervision (DBS) to deal with the 

examination of problem and large banks 

within the regions.

In other matters, DBS acted in 1984 to 

position itself to cope with anticipated 

challenges as the task of supervising and 

regulating the rapidly evolving banking 

industry becomes more complex. These 

actions, which were part of the Division’s 

strategic plan for the year, focused on 

identifying new kinds of risks to the banking 

system and the insurance fund, and 

controlling those risks through better 

supervisory methods and better allocation of 

resources.

The Division continued to shift more of its 

resources and emphasis, as it had in 1983, 

from examining well-operated banks to 

examining problem institutions. DBS 

conducted a total of 9,751 examinations 

compared with 12,977 examinations in 1983 

and 17,886 in 1982, underscoring the trend 

toward limiting examinations of sound 

institutions and concentrating on the small 

percentage of troubled banks. At year-end, 

there were 848 banks on the Corporation’s 

problem bank list, compared with 642 on 

the list at the end of 1983.

The Division also continued to devote 

more of its resources to assisting the 

Division of Liquidation in handling the

record 79 bank failures during 1984. 

Examiners detailed to perform liquidation 

tasks gave a total of 352,000 hours to this 

effort, or 11 percent of total staff time, 

compared with 210,000 hours in 1983 and 

70,000 hours in 1982.

Included in the FDIC’s examination 

activities in 1984 were 3,339 safety and 

soundness examinations, 2,138 consumer 

and civil rights compliance examinations,

397 trust department examinations, 726 

examinations of data processing facilities, 

462 investigations and 2,689 applications 

reviews.

Throughout its examination efforts, the 

FDIC sought to promote better supervisory 

cooperation with other financial regulators.

A 1983 agreement between the FDIC and 

the Comptroller of the Currency to perform 

simultaneous examinations resulted in 392 

such examinations of national banks in 

1984. The emphasis was on problem banks, 

although well-run banks were checked on a 

spot basis. The joint effort gives the FDIC a 

first-hand appraisal of the status of national 

banks it insures.

Further pursuing cooperation with other 

regulators, the FDIC in 1984 agreed with 

the Federal Home Loan Bank Board to 

conduct concurrent examinations of savings 

banks chartered by the Bank Board and 

insured by the FDIC. The program went into 

effect on July 1, 1984.

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Federal Reserve Bank of St. Louis
Employees in the Bank Statistics Section 

of the Division of Accounting and 

Corporate Services log in bank call 

reports. Handling the reports are 

(clockwise, from left) Massoumeh Nyman, 

Deborah Jones, Jacqueline Alston-Barnes, 

Alice Leazer and John Machen. The 

20-page reports are submitted quarterly by 

each of the over 14,000 FDIC-insured 

banks. Section employees sort the reports 

into batches and send them to the FDIC 

Computer Center for data entry, or for 

editing if a report is submitted on magnetic 

tape. Analysts in the Section then reveiw 

each report for accuracy and 

completeness.

Margaret M. Olsen came to the FDIC in 1976 and has enjoyed a 

variety of professional experiences as an attorney. She first 

served in the Bank Operations Section of the Legal Division. In 

1982 she became Assistant Executive Secretary in the Office of 

the Executive Secretary, and this year was promoted to Deputy 

Executive Secretary of the FDIC.

*

In the past year, the Division has 

progressed in computerizing its supervisory 

efforts. First, a review of the Integrated 

Monitoring System (IMS) was undertaken in 

compliance with the Division’s strategic 

Plan. As a result of this review, a more 

sophisticated surveillance vehicle, the 

Extended Monitoring System (EMS), was 

formulated. Its goals are to provide the 

examiner analyst with better analytical tools 

and greater ability to schedule small and 

medium-sized state nonmember banks for 

off-site review. Upon its completion in 1985, 

EMS will consist of:

— a model that generates component-bycomponent off-site ratings for a given bank 

and compares these ratings to those 

assigned at its most recent examination;

— a subsystem that compares changes 

in key ratios of a given bank against those 

of its peers, and

— upgraded on-line support screens that 

include peer percentile ranks. When 

completed, EMS will complement the 

individual bank analytical program 

implemented during 1984 for large banks.

Second, DBS arranged for its examiners 

in the Columbus and San Francisco regions 

to test the use of personal computers in 

examining banks. Employees used the 

computers to prepare and transmit 

examination reports to FDIC regional 

offices. They also were able to extract bank 

data from the Corporation’s main data base.

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Federal Reserve Bank of St. Louis
FDIC APPLICATIONS

1984 1983

Deposit Insurance 114 104

Approved 113 101

Denied 1 3

New Branches 950 1,018

Approved 938 1,009

Branches 600 630

Ltd. Branches 79 89

Remote Services Facilities 259 290

Denied 12 9

Mergers 197 153

Approved 193 148

Denied 4 5

Requests for Consent to Serve 42 48

Approved 37 42

Denied 5 6

Notices of Changes in Control 137 215

Approved 137 212

Denied 0 3

Results of this testing indicated the 

computers will become an increasingly 

important tool in examinations.

DBS sought to equip examiners in other 

ways for their complex tasks by expanding 

and changing the focus of training programs 

to reflect the rapidly changing banking 

environment. Training courses for examiners 

in 1984 began to review, for example, what 

changes would be required if financial 

institutions could expand into new types of 

businesses and new ways to analyze the 

financial standing of large banks.

The FDIC continued to fulfill its 

supervisory responsibilities in other areas 

during the year including bank trust 

department supervision, oversight of bank 

securities activities and applications review. 

In 1984, the Corporation supervised 2,605 

trust departments in commercial banks and 

30 in mutual savings banks, including 100 

departments approved for operation during 

the year. The dollar volume of trust account 

assets in these banks totalled almost $82.5 

billion. The FDIC supervised the securities 

activities of 250 banks that had more than 

$1 million in assets and 500 or more 

shareholders of any class of equity security, 

and 337 banks that were registered 

securities transfer agents.

Banks must apply to the FDIC for deposit 

insurance, and this includes foreign banks 

seeking insurance for U.S. branches. During 

1984, the FDIC received seven applications 

for deposit insurance in domestic branches 

of foreign banks, compared with six in

1983. State non-member banks also must 

obtain FDIC permission to merge with 

another bank, relocate a branch or establish 

new offices. The FDIC also has authority 

over change of control of banks and, in 

certain circumstances, over who may serve 

as a director, officer or other employee of 

an insured bank. The data in the table 

above reflect FDIC actions on applications it 

received during the year.

During 1984, the FDIC proposed a 

number of regulations affecting the 

applications process. The Corporation 

proposed to shorten the time period for 

public comment on merger applications 

from 45 days to 30 days to expedite the 

processing yet still give the public ample 

time to comment. The Corporation also 

proposed a revised notification system to 

expedite processing of applications to 

establish additional remote service facilities 

or relocate them. The plan would give 

authority to act on such applications to the 

DBS Director and to the Division’s regional 

directors. These proposals advanced the 

work done in 1983 when the FDIC amended 

certain of its procedures for processing 

applications to establish or relocate 

branches, establish remote service facilities 

or merge with another bank.

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Federal Reserve Bank of St. Louis
RULES AND REGULATIONS

While 1983 saw the deregulation of bank 

liabilities, 1984 was a year in which the 

Corporation focused on improving banks’ 

abilities to diversify their assets. The FDIC 

in 1984 reaffirmed that the Glass-Steagall 

Act does not prohibit insured nonmember 

banks from conducting securities activities, 

and it set forth standards to govern such 

activities. It also proposed guidelines for 

bank involvement in a wide range of 

nonbanking financial services such as 

underwriting insurance and developing real 

estate.

During the year, the Corporation also 

issued rules jointly with other financial 

regulators in two areas directly affecting 

bank safety and soundness. The FDIC and 

the Office of the Comptroller of the 

Currency proposed minimum capital 

requirements for the banks each regulates. 

The FDIC and the Federal Home Loan Bank 

Board adopted final regulations limiting 

insurance coverage on deposits placed by 

deposit brokers. The regulation was to take 

effect on October 1, 1984, but court action 

prevented this. The FDIC promulgated the 

regulation because it deems the 

indiscriminate placement of billions of 

dollars of fully-insured brokered deposits to 

be a misuse of the federal deposit 

insurance system and a significant threat to 

the federal deposit insurance fund. The 

FDIC has observed that brokered deposits 

frequently are placed in institutions offering 

the highest rates, without regard for the 

safety and soundness of the institutions. 

When such institutions fail, the existence of 

large amounts of such deposits may 

increase the cost to the deposit insurance 

fund.

The FDIC has found that a significant 

proportion of poorly-rated institutions use 

brokered deposits. The 77 commercial 

banks that failed in 1982 and 1983 had 

substantial brokered deposits, constituting 

on the average 16 percent of total deposits. 

Thirty-one banks that failed in 1984 had 

deposits in accounts placed by deposit 

brokers ranging as high as 64 percent of 

their total deposits.

In addition to concern about the effects 

of deposit brokerage on already troubled 

institutions, a potential exists for the abuse 

of brokered funds by insured institutions 

generally. The need to offer a high rate of 

return to attract brokered funds may require 

institutions to take greater investment risks, 

a factor often aggravated if the broker or 

associated parties suggest or stipulate 

particular uses for the funds.

On the same day the FDIC issued the 

brokered deposits regulation, court action 

was brought to nullify the regulations. On 

June 20, 1984, the Federal District Court for 

the District of Columbia ruled that the 

regulation was illegal, concluding that the 

FDIC (and the Federal Home Loan Bank 

Board) had exceeded statutory boundaries 

in imposing insurance limitations on 

brokered deposits. The FDIC has appealed 

the Court’s decision, and was waiting for a 

resolution of its appeal at year-end.

A discussion of all of the FDIC’s 

proposed and final regulations appears in 

the Legislation and Regulations section 

beginning on page 36.

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Federal Reserve Bank of St. Louis
Attorneys Christine Tullio and Peter Kravitz work 

together on a compliance and enforcement matter 

in connection with Truth-in-Lending regulations. Ms. 

Tullio is a senior attorney in the Compliance and 

Enforcement Section of the Legal Division, where 

she works on enforcement actions against problem 

banks. She joined the FDIC in 1981 under the 

Honors Program in Banking Law. Mr. Kravitz also is 

a senior attorney, serving in the Bank Operations 

and Regulations Section of the Legal Division. He 

joined the FDIC in 1976, and for the last three 

years has worked primarily on assisted mergers of 

mutual savings banks and temporary assistance 

transactions for commercial banks.

LEGAL ACTIVITIES

The Legal Division was reorganized in 

1984 to improve the Corporation’s ability to 

oversee a burgeoning legal workload, 

particularly in connection with the liquidation 

of failed bank assets. The new structure of 

the Division includes three branches: the 

Open Bank Regulation, Litigation and 

Legislation Branch, which is concerned with 

bank operations, regulation, legislation and 

litigation unrelated to bank liquidations; the 

Closed Bank Investigations and Litigation 

Branch, which supervises all legal matters 

relating to directors’ liability, bond claims 

and auditors’ liability, bankruptcy and 

complex litigation; and a new Regional and 

Corporate Affairs Branch, which is 

responsible for legal operations at all FDIC 

area and regional offices and field sites as 

well as compliance and enforcement 

activities and divisional administrative 

matters. The reorganization strengthened 

the Division’s management structure and 

provided needed management support for 

FDIC’s rapidly expanding legal field 

operations.

Through the Division of Bank Supervision 

and the Legal Division, the FDIC pursued

extensive enforcement activities during 

1984. The FDIC acts to correct improper 

banking practices by issuing cease-anddesist orders (Sections 8(b) and 8(c) of the 

FDI Act), assessing civil money penalties 

(Sections 7(a), 7(j)(15), 8(i)(2) and 18(j)(3) of 

the Act), and terminating deposit insurance 

(Sections 8(a) and 8(p) of the Act). The 

FDIC issued a total of 138 cease-and-desist 

orders during the year. The Corporation first 

used such orders to correct banks’ 

weaknesses or compliance violations in 

1971, issuing 37 orders through 1975, and 

483 orders between 1976 and 1983.

The FDIC levied 13 civil money penalties 

in 1984 against 62 individuals. In addition, 

FDIC assessed money penalities against 55 

banks for late filing of reports of condition 

and income for the first three quarters of 

1984.

Under Section 8(e) of the FDI Act, the 

FDIC may remove an officer, director or 

other participant in the affairs of an FDICinsured bank if the person violates a law, 

rule, regulation or final cease-and-desist 

order, engages in unsafe or unsound 

banking practices or breaches his or her 

fiduciary duty. The individual’s action must 

involve personal dishonesty or a willful 

disregard for the safety or soundness of the 

bank. Also the action must entail substantial 

financial loss or other damage to the bank,

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Federal Reserve Bank of St. Louis
Cease-and-Desist Orders and Actions to Correct

Specific Unsafe or Unsound Practices or

Violations of Law or Regulations:

1981, 1982, 1983, and 1984

1984 1983 1982 1981

Cease-and-desist 

orders outstanding 

at beginning of 

year-total 249 106 78 90

Section 8(b) 244 105 78 88

Section 8(c) 5 1 0 2

Cease-and-desist 

orders issued during 

year 138 223 69 38

Section 8(b) 125 188 63 37

Section 8(c) 13 35 6 1

Cease-and-desist 

orders terminatedtotal 89 80 41 50

Section 8(b) 84 49 36 47

Section 8(c) 5 31 5 3

Cease-and-desist 

orders in force at 

end of year-total 293 249 106 78

Section 8(b) 284 244 105 78

Section 8(c) 9 5 1 0

seriously prejudice the interests of its 

depositors or result in financial gain to the 

individual. During 1984, 13 Section 8(e) 

proceedings were formalized, compared 

with nine such proceedings initiated in

1983.

Finally, the FDIC may initiate terminationof-insurance proceedings against any bank 

in an unsafe or unsound financial condition. 

The bank’s customers must be notified 

when insurance is terminated, but deposits 

(less subsequent withdrawals) continue to 

be insured for two years. In 1984, the FDIC 

initiated 32 termination-of-insurance 

proceedings, bringing to 339 the number of 

times it has taken such action since 1933. 

In 28 of these cases, the banks involved 

corrected their problems, were absorbed by 

other banks or ceased operations before 

insurance was actually discontinued. Last 

year, the Corporation began 26 such 

proceedings.

A case-by-case summary of FDIC’s 1984 

enforcement actions without banks’ names 

may be obtained from the FDIC Corporate 

Communications Office, 550 17th Street, 

N.W., Washington, D.C. 20429. Summaries 

of enforcement actions for prior years are 

included in the FDIC’s annual reports, also 

available from the Corporate 

Communications Office.

COMMERCIAL BANK

FAILURES

In 1984, 78 commercial banks failed, and 

the FDIC provided financial assistance in a 

merger of one failing mutual savings bank. 

This was the greatest number of insured 

bank failures in any year since the founding 

of the FDIC. Most were relatively small 

institutions. The total deposits in the 79 

failed banks in 1984 were less than the 

total deposits in failed banks in each of the 

three previous years— $2.9 billion (1984) 

compared with about $5.5 billion in 1983, 

$9.9 billion in 1982 and $3.8 billion in 1981. 

Approximately 75 percent of the failed 

banks in 1984 had deposits of $30 million 

or less. In 1983, about 60 percent of the 

failed banks had deposits of $30 million or 

less. The largest commercial bank to fail in 

1984 by deposit size was Girod Trust 

Company, San Juan, Puerto Rico, which had 

deposits of $258 million.

The causes for the high number of bank 

failures during the year were varied. Poor 

management was the cause of many of the 

failures. In some cases bad energy loans 

and real estate loans brought banks down.

In the last quarter of 1984, defaulted 

agriculture loans began to rise as a major 

factor in a number of the failures, as 

farmers felt increasing pressures from high 

interest rates, low commodity prices and 

declining land values.

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Federal Reserve Bank of St. Louis
Agricultural banks, defined as the 30 

percent of commercial banks in which 

agricultural loans account for 25 percent or 

more of total loans, have experienced 

rapidly mounting difficulties. In the 12-month 

period between the end of 1982 and the 

end of 1983, agricultural banks constituted 

up to 24 percent of the total number of 

problem banks. By the end of 1984, 

however, these banks represented 37 

percent of the FDIG’s list of 848 problem 

banks. A similar situation is found in failed 

bank statistics. In the last four months of 

1984, agricultural banks accounted for 71 

percent of the banks that failed during the 

period. However, in each such case, 

mismanagement or other factors^ 

distinguished the failed bank from other 

nearby banks that did not fail.

Tennessee, with eleven bank failures, had 

the most failures of any state, and three of 

these were connected with the group of 

failed banks controlled by Jake and C. H. 

Butcher. Beginning with the failure of the 

United American Bank in Knoxville, 

Tennessee, on February 14, 1983, ten 

banks controlled by the Butchers had failed 

by year-end 1984.

The majority of the failed banks, 62, were 

handled through purchase and assumption 

transactions, in which a healthy institution 

assumes the deposits and other liabilities 

and purchases some of the assets of a 

failed bank. The FDIC saved more than $59 

million by using the “ P and A” method 

instead of other methods of liquidating 

these banks. This savings represents the 

lower cost of handling these failures 

realized due to the purchase premiums paid 

the FDIC by the assuming banks.

The FDIC handled 12 of the failed banks 

during the year with the deposit transfer 

method, an approach first used in two 

failures in 1983. In this procedure, the FDIC 

makes insured deposits in a failed bank 

available to their owners by transferring 

their accounts to a healthy institution 

instead of directly paying depositors up to 

the insured limit. The method is useful when 

a failed bank has a substantial amount of 

potential and contingent claims, making a 

purchase and assumption transaction 

infeasible.

Payment of insured deposits through the 

transfer of accounts to another insured 

bank minimizes disruption to the closed

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Federal Reserve Bank of St. Louis
Keith Nothstein is a senior examiner who joined the FDIC in 

1962 in the old Richmond, Virginia, Regional Office. He is 

currently assigned to the Philadelphia Region. He has been an 

instructor in the DBS Training Center in Rosslyn, Virginia, and is 

scheduled to serve as a course administrator at the Center in 

the Spring of 1985. He has carried out several assignments 

working on large liquidations, such as Franklin National Bank, 

and in 1985 will be detailed to the United American Bank, 

Knoxville, Tennessee, for 15 weeks.

bank's customers and to the affected 

communities. The procedure also reduces 

the FDIC’s costs in handling such failures 

compared with the cost of a direct payoff, 

because a payoff is more labor-intensive 

and time-consuming and because the 

transfer agent bank typically pays the FDIC 

a premium.

A new feature of the deposit transfer 

method in 1984 was an advance of funds to 

uninsured depositors and other creditors of 

failed banks. The Corporation made such 

advance payments in eight of the 12 bank 

failures handled by transferring insured 

deposits to another institution. The 

payments ranged from 40 to 75 percent of 

uninsured claims. The percentage in each 

bank was based on the estimated present 

value of assets to be liquidated. If the 

FDIC’s actual collections on the assets of 

these failed banks exceed the advance 

payments and expenses of administration, 

uninsured creditors ultimately will receive 

additional payments on their claims. But if 

the present value of collections turns out to 

be less than the advance payments and 

administrative expenses, the FDIC insurance 

fund will absorb the shortfall.

Depositors in four bank failures in 1984 

received their insured funds via the payoff 

method, in which the FDIC directly pays 

depositors their insured deposits. In three of 

the four payoffs, the FDIC made advance 

payments to uninsured depositors and other 

creditors of the failed banks.

MUTUAL SAVINGS BANKS

In 1984, the FDIC assisted the merger of 

Orange Savings Bank, Livingston, New 

Jersey, into Hudson City Savings Bank of 

Paramus, New Jersey. The transaction 

occurred under the FDIC’s Voluntary 

Assisted Merger Program, which establishes 

criteria for granting assistance in a 

voluntarily arranged merger involving an 

FDIC-insured savings bank that is in a 

weakened financial condition.

To facilitate the merger, the FDIC 

advanced $26 million to Hudson City 

Savings. The assistance agreement provided 

that $16 million of the assistance will be 

contingently repayable out of a portion of 

the resultant bank’s future income. A 

deposit payoff of Orange Savings Bank 

would have cost the FDIC an estimated $72 

million compared to the merger’s $26 

million cost to the FDIC, for a savings of 

$46 million.

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Federal Reserve Bank of St. Louis
Roberta Alexander is an examiner in the 

Philadelphia Region. She joined the FDIC in 

1977 and has worked in the Philadelphia 

Region throughout her FDIC career. She has 

completed several liquidation details involving 

closed banks in Knoxville, Tennessee and in 

Puerto Rico. She also completed a detail 

working on Shared National Credits with 

Federal Reserve examiners in New York City. 

In the background is examiner Raymond 

Golata.

The FDIC’s net worth certificate program, 

available to depository institutions that have 

suffered earnings and capital losses 

primarily as a result of mortgage lending 

activities, has been useful in assisting 

mutual savings banks. The Garn-St Germain 

Depository Institutions Act of 1982 

authorized the FDIC to assist any qualified 

institution by making periodic purchases of 

capital instruments in the form of net worth 

certificates.

At the time that net worth certificates are 

purchased, the FDIC issues its promissory 

note in exchange for the institution’s net 

worth certificate. For purposes of regulatory 

reporting, the FDIC’s note is reflected as an 

’’other asset” of the institution and its 

liability under the net worth certificate is 

reflected as a segregation of capital. At 

year end 1984, 23 depository institutions 

had net worth certificates outstanding 

totaling $578.8 million. At the end of 1983, 

there were 23 depository institutions with 

such certificates totaling $376.9 million. The 

net worth certificate program will expire 

October 15, 1985, unless the Congress 

extends the legislation.

In 1984, the FDIC for the first time used 

its authority under Section 5(o)(2)(F) of the 

Home Owner’s Loan Act of 1933 to find 

that severe financial conditions exist which 

threaten the stability of a bank, thereby 

facilitating the conversion of the Home 

Savings Bank, FSB, Boston, Massachusetts, 

from mutual to stock form of ownership and 

allowing the acquisition of ownership by 

Yankee Oil and Gas Inc., Boston, 

Massachusetts.

LIQUIDATION ACTIVITIES

Of the 747 banks that failed since the 

FDIC’s inception in 1934, 403 were deposit 

assumption cases and 344 were deposit 

payoffs, including 14 failures in which 

insured deposits were transferred to 

operating banks for payment or credit to 

depositors. Deposits in the failed banks 

totalled $28.3 billion. All the accounts in the 

deposit assumption cases, with insured and 

noninsured deposits aggregating $26.3 

billion, were fully protected. Total deposits 

in the payoffs amounted to $2.0 billion.

There were 7.2 million accounts in the 

deposit assumption cases and .8 million 

depositors in the payoff cases since 

January 1, 1934.

Total disbursements by the FDIC since 

January 1, 1934, amounted to $13.3 billion. 

Of that amount, the FDIC recovered $6.9 

billion and lost $3.5 billion.

United American Bank

United American Bank, Knoxville, 

Tennessee, formerly owned by Jake 

Butcher, failed on February 15, 1983, at 

which time First Tennessee Bank purchased 

all assets of United American. This 

agreement was terminated on August 18,

1984, and the FDIC assumed the remaining 

assets of the bank.

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Federal Reserve Bank of St. Louis
The FDIC’s liquidation team and security personnel at the First 

National Bank, Snyder, Texas, gather together. The bank was closed 

on May 4, 1984, and the FDIC approved the transfer of the bank's 

insured and secured deposits to American State Bank of Snyder.

Susie Able joined the FDIC in 

1969 as a clerk typist and 

went on to become a bank 

examiner in the Atlanta 

Region for approximately ten 

years. Presently, she is a 

program analyst in the 

Division of Liquidation and 

works on special projects 

connected with the Division’s 

operating plan. A native of 

Virginia, Ms. Able has taught 

oil painting and has sold 

several of her own works.

At the end of 1984, FDIC held assets 

totalling $447.0 million. Collections received 

by the FDIC and First Tennessee, 

cumulatively totalled $68.6 million at year 

end, while expenses (exclusive of interest 

on FDIC indebtedness) totalled $27.9 

million. The FDIC estimates that it will lose 

$395.5 million from the liquidation of this 

bank. This loss is based on estimated future 

collections of $118.0 million, future 

expenses of $18.3 million, and anticipated 

litigation losses of $14.8 million.

This liquidation is still in the early stages 

and clear trends are not yet discernible. 

There are outstanding claims totalling 

several hundred million dollars that may 

take a number of years to resolve. Two 

major areas of litigation concerning the 

United American liquidation involve letters 

of credit and participation agreements. The 

local United States District Court has held 

that a standby letter of credit is a deposit 

under the Deposit Insurance Act. The FDIC 

has appealed this decision to the Sixth 

Circuit Court of Appeals.

First National Bank, Midland, Texas

On October 14, 1983, one of the largest 

commercial bank failures in FDIC history 

occurred when the deposit liabilities of First

National Bank of Midland, Midland, Texas, 

were assumed by RepublicBank First 

National Midland, a newly-chartered 

subsidiary of RepublicBank Corporation, 

Dallas, Texas. At year end 1984, the 

liquidation of First National held $859.4 

million in assets, including approximately 

$608 million of energy loans. These loans 

are extremely complex and, due to the 

current condition of the energy market, their 

collectibility is highly uncertain.

Principal and interest collections in the 

First National liquidation cumulatively 

totalled $552.6 million during 1984 while 

expenses (exclusive of interest on FDIC 

indebtedness) totalled $23.1 million. The 

FDIC estimates that it will lose $245.2 

million from the liquidation of this bank. This 

loss is based on estimated future 

collections of $554.0 million, estimated 

future expenses of $68.9 million, and 

anticipated litigation losses of $28.5 million.

Penn Square Bank

The liquidation of Penn Square Bank was 

still continuing during 1984. It failed on July 

5, 1982, resulting in the largest deposit 

payoff in FDIC history. The FDIC 

established a Deposit Insurance National 

Bank (DINB) for the purpose of paying

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Federal Reserve Bank of St. Louis
Gary Holloway is Regional Manager (Other Assets) 

in the Division of Liquidation Midwest Regional 

Office. He joined the FDIC in 1975 as a field 

liquidator assigned to the Franklin National Bank 

liquidation. During his service with the FDIC, he 

has enjoyed a working on liquidations in a variety 

of geographic locations across the country and in 

the Virgin Islands. The sportsmen in the 

background of the picture are using the facilities of 

the Oak Lawn Racquet Club, an asset the FDIC 

acquired in the liquidation of the First National 

Bank of Oak Lawn, Oak Lawn, Illinois.

insured deposits. On August 18, 1983, the 

FDIC signed an agreement with Charter 

National Bank, N.A., a newly-chartered 

bank, under which Charter National 

purchased the remaining $458,400 in 

deposits from the DINB and began 

operating from Penn Square’s former motor 

bank.

At the end of 1984, the FDIC had 

collected $619.5 million in principal and 

interest on loans, securities and other 

assets. Out of the total, $294.6 million was 

paid to the holders of loan participations 

sold by Penn Square, $5.7 million repaid 

accrued advances from the Federal 

Reserve to Penn Square, $16.9 million was 

paid to the owners of pledged deposits and 

approximately $153.6 million was paid to 

uninsured depositors and other creditors 

holding Receiver’s Certificates for proven 

claims. At the end of 1984, the FDIC had 

invested $108.3 million in Treasury Bills.

The remaining amount due on proven 

claims totalled about $437.1 million. There 

also existed approximately $744.5 million in 

claims rejected by the receiver. Remaining 

assets to be liquidated as of December 26,

1984, amounted to about $250.6 million 

exclusive of the $108.3 million invested in 

Treasury Bills. Liquidation expenses since 

inception totalled $23.8 million as of 

December 31, 1984. The FDIC estimates 

that depositors in Penn Square may recover 

up to 65 percent of deposits that exceeded 

the insurance limit. This estimate is subject 

to revision depending on future collections

from liquidation of Penn Square’s assets 

and the outcome of a large number of legal 

actions.

O th er Liquidation A ctivities

In 1984 the Division of Liquidation 

continued to build on its accomplishments 

in 1983 that had enabled the Division to 

handle its large and growing workload of 

assets for liquidation that year, and meet 

the challenge of record level bank failures 

in 1984. The Division’s inventory of assets 

for liquidation in 1984, exclusive of the 

assets of Continental Illinois Bank, climbed 

to 121,000 assets with a book value of 

$5.23 billion. The Division held 

approximately 800 assets of Continental 

Illinois at year end with a book value of $5.1 

billion.

The Division’s strategic plan for the year 

included further increases in staffing, 

expanded training, and greater use of 

automation to keep track of assets and 

resources. Of major importance during the 

year was the Division’s installation of the 

Decimus System in all five Area Liquidation 

offices. Before the Decimus system, all of 

the Division’s financial operations were 

done manually except for a few liquidation 

sites where automated systems were 

acquired from failed banks. The new 

automated asset management system 

increased the speed and efficiency of the 

Division in processing data on assets 

acquired by the FDIC from failed banks. 

Decimus is an interim system that will

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Federal Reserve Bank of St. Louis
Jane Mendoza is a word processing supervisor with the 

Division of Accounting and Corporate Services. She 

joined the FDIC in 1983 after working in a simitar position 

with the Fort Bend, Texas, Independent School District.

At the FDIC, she and the operators she supervises 

produce about 200 pages of documents in an average 

day. On her own time, Ms. Mendoza is a Petty Officer 3rd 

Class with the U.S. Naval Reserves.

convert to the Liquidation Asset 

Management Information System (LAMIS) 

when the latter becomes operational.

During the year, work progressed on the 

development of LAMIS, which is an 

integrated set of automated systems being 

developed to support the operation and 

management of the Liquidation Division. 

LAMIS will be made up of five 

interdependent systems that will support 

collection activity, servicing of loans, loan 

delinquency analysis, and loan market 

analysis. LAMIS will be located in the 

FDIC’s main computer in Washington, and 

all bank liquidation sites, regions, and subregional offices will have access to it 

through a telecommunications network. A 

LAMIS prototype will be installed in the 

FDIC New York Regional Office in April

1985. By the end of 1986, the FDIC expects 

that LAMIS will be operating in all regional 

offices.

John Bovenzi (left) is Chief of the Economic Conditions Section of the Division of Research and Strategic 

Planning, and has been with the FDIC for four years. Previously he was Assistant Professor of Economics 

at Holy Cross College in Worcester, Massachusetts. He earned a BA in Economics at the University of 

Massachusetts, and holds both a Masters degree and PhD in the same subject from Clark University, 

Worcester, Massachusetts. Eric Hirschhorn (right) is a financial economist in the Economic Conditions 

Section. Mr. Hirschhorn tracks economic conditions and studies issues in banking such as, for example, 

the results of auctions of assets acquired in bank liquidations and the bidding levels that occur. Before 

coming to the FDIC in 1983, Mr. Hirschhorn taught in the Economics Department of Virginia Polytechnic 

Institute, Blacksburg, Virginia.

INCOME AND EXPENSES

Revenues and the deposit insurance fund 

continued to increase during 1984 although 

the record high rate of insured bank failures 

created large expenses for the FDIC. The 

fund attained a new year-end high of $17.2 

billion, an increase of $1.8 billion or 12.0 

percent over 1983. Gross revenues for the 

year amounted to $3.03 billion, including 

$1.5 billion from investments in U.S. 

Treasury obligations and $1.3 billion from 

assessments on insured banks.

The average maturity of the Corporation’s 

investment portfolio at year-end I984 stood 

at two years and four months compared to 

two years and nine months at the end of

1983. The par value of the portfolio 

increased from $13.8 billion on December 

31, 1983 to $14.2 billion at year-end 1984. 

Its market value grew from $13.7 billion to 

$14.4 billion during the same period.

The FDIC’s total expenses and losses in 

closed banks and merger activities during 

1984 were $1.1 billion. Administrative 

expenses were $151 million, an increase of

11 percent over 1983. The total gross 

expenses and losses for the year were $1.3 

billion.

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Federal Reserve Bank of St. Louis
The FDIC gives insured banks a credit 

against their next year’s assessments for 

insurance coverage, depending on the 

FDIC’s losses and expenses for the year. 

The losses and expenses sustained by FDIC 

in 1984 resulted in an assessment credit of 

$67.5 million, compared to $164 million in

1983. The 1984 credit represents an 

effective assessment rate to banks of 1/12.5 

of one percent of assessable deposits, 

compared to 1/14 of one percent in 1983. 

The 1984 assessment credit represents 5.12 

percent of total assessments compared to 

13.54 percent in 1983.

(The FDIC’s complete 1984 financial 

statements with footnotes begin on 

page 22.)

Personnel

The FDIC ended 1984 with 5,076 

employees, or 1,230 more employees than 

at the end of 1983. Most of this gain 

involved temporary employees in the 

Liquidation Division hired to cope with the 

increased number of bank closings during

1984. For all employees, exclusive of 

temporary field personnel and temporary 

summer personnel, the turnover rate 

remained at 7.0 percent for the second 

year.

Ashland O. Harris is a maintenance worker leader in the Corporate 

Services Branch of the Division of Accounting and Corporate Services. 

In twelve years with the FDIC, Mr. Harris has become widely known 

throughout the Washington Office and has earned a reputation as a 

dedicated, loyal and competent employee. He has received the 1984 

Chairman's Award, which is presented annually to a non-examiner 

career employee with at least ten years service who has a record of 

outstanding performance.

Number of Officials and Employees of the Federal Deposit

Insurance Corporation December 31, 1983 and 1984

TOTAL

WASHINGTON

OFFICE

REGIONAL & 

FIELD OFFICES

1984 1983 1984 1983 1984 1983

TOTAL 5076 3846 933 968 4143 2878

Executive Office 54 46 52 46 2 \ 0

Legal Division 296 103 148 103 148 0

Division of Research 

and Strategic 

Planning 28 29 28 29 0 0

Division of 

Liquidation* 2158 1153 2 8 ** 170 2130 983

Division of Bank 

Supervision 1800 2053 160 158 1640 1895

Division of Accounting 

and Corporate Services 644 379 421 379 223 0

O ffice of Corporate 

Audits 40 38 40 38 0 0

O ffice of Equal 

O pportunity 6 6 6 6 0 0

O ffice of Personnel 

Management 50 39 50 39 0 0

'D ivision of Liquidation totals include temporary employees, most of whom were employed 

by failed banks, assigned to field liquidations.

* *The decrease in the number of Liquidation Division employees in the W ashington Office 

during 1984 was due to the official reassignment of field liquidators to the regional offices.

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Federal Reserve Bank of St. Louis
Marty Kerns was the first female computer operator to work at 

the FDIC. She joined the FDIC in 1970 and today is the Chief of 

the Computer Center Unit of the Division of Accounting and 

Corporate Services. She is responsible for all FDIC computer 

operations, production control and data conversion. She 

describes herself as a voracious reader and "som etim es" a 

gourmet cook.

Amelia Laguilles is a senior auditor in the Office of Corporate 

Audits and Internal Investigations. She came to the FDIC in 1983 

after working for eight years in the Treasury Department, most 

recently as an auditor in the Office of the Inspector General. Ms

Laguilles also is a Certified Public Accountant. William Williams has served with the FDIC for 15 years, the last twelve

in the Division of Liquidation. He is currently Office Services 

Supervisor in the Division’s Administrative Branch. Mr. Williams 

services the Division’s 70 microcomputers and printers and sends 

them to liquidation sites. His job sometimes involves sending 

computers to several different sites at the same time, and requires 

some muscle to lift an 80-pound crate containing a computer and 

printer.

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Federal Reserve Bank of St. Louis
STATEMENTS OF FINANCIAL POSITION (in th o u s a n d s )

Assets December 31,

1984

December 31,

1983

Cash $ 4,158 $ 88,785

Investment in U.S. Treasury obligations

(Note 2) 14,436,286 13,992,059

Other assets, principally accrued interest receivable

on investments 393,944 393,080

Certificates and notes receivable from insured banks

(Note 3) 560,883 423,641

Assets acquired in assistance to an insured bank (Note 4) 4,457,429 0

Assets acquired from failures of insured banks (Note 5) 2,143,540 1,992,029

Property and buildings (Note 6) 41,701 36,969

Total Assets $22,037,941 $16,926,563

The accompanying summary of significant accounting policies and notes to financial statements are an 

integral part of these statements.

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Federal Reserve Bank of St. Louis
Liabilities and the

Deposit Insurance Fund

December 31,

1984

December 31,

1983

Accounts payable, accrued liabilities and escrow funds $ 100,478 $ 79,581

Net assessment income credits due to

insured banks (Note 7):

Available July 1, 1985 

Available July 1, 1984

67,548

0

0

164,039

Liabilities incurred in assistance

to insured banks (Note 8) 3,848,342 0

Liabilities incurred from failures of

insured banks (Note 9) 859,641 1,253,763

Total Liabilities 4,876,009 1,497,383

Deposit Insurance Fund 17,161,932 15,429,180

Total Liabilities and the Deposit Insurance Fund $22,037,941 $16,926,563

The accompanying summary of significant accounting policies and notes to financial statements are an 

integral part of these statements.

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Federal Reserve Bank of St. Louis
STATEMENTS OF INCOME

AND THE DEPOSIT INSURANCE FUND (In thousands)

For the year ended

December 31, December 31,

1984 1983

Income:

Gross assessments earned $ 1,322,587 $ 1,215,817

Provision for assessment credits 68,548 164,903

Net Assessments Earned 1,254,039 1,050,914

Interest on U.S. Treasury obligations 1,495,378 1,404,325

Interest on notes receivable 111,730 65,065

Interest on assets in liquidation 168,580 90,462

Other income 2,243 17,161

Total Income 3,031,970 2,627,927

Expenses and Losses:

Administrative operating expenses 151,201 135,660

Merger assistance losses and expenses 197,559 127,486

Provision for insurance losses

(Notes 3, 5, and 10) 933,374 675,119

Nonrecoverable insurance expenses

(Note 11) 17,084 31,426

Total Expenses and Losses 1,299,218 969,691

Net Income 1,732,752 1,658,236

Deposit Insurance Fund— January 1 15,429,180 13,770,944

Deposit Insurance Fund— December 31 $17,161,932 $15,429,180

The accompanying summary of significant accounting policies and notes to financial statements are an 

integral part of these statements.

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Federal Reserve Bank of St. Louis
STATEMENTS OF CHANGES IN FINANCIAL POSITION (in thousands)

For the year ended

December 31, December 31,

1984 1983

Financial Resources Were Provided From:

Operations:

Net income $ 1,732,752 $1,658,236

Add (deduct) items not involving cash

in the period:

Amortization of U.S. Treasury obligations 18,104 (59,961)

Loss on sale of U.S. Treasury obligations 982 0

Depreciation on buildings 977 897

Income maintenance agreement adjustments 80,753 1,418

Amortization of merger assistance agreements 40,131 51,315

Provision for insurance losses 933,374 675,119

Resources provided from operations 2,807,073 2,327,024

Other resources provided from:

Maturity and sale of U.S. Treasury obligations 3,755,184 4,346,245

Collections on notes receivable 2,528,119 375,619

Collections on assets acquired from failures

of insured banks 1,701,734 611,849

Liabilities incurred in assistance to

insured banks 3,848,342 0

Liabilities incurred from failures of insured banks 0 698,565

Decrease (increase) in cash 84,627 (87,450)

Other decreases (increases) 20,033 (61,013)

Total financial resources provided $14,745,112 $8,210,839

Financial Resources Were Applied To:

Purchase of U.S. Treasury obligations $ 4,218,497 $5,025,978

Acquisition of notes receivable 2,848,342 218,998

Assets acquired in assistance to an insured bank 4,457,429 0

Assets acquired from failures of insured banks 2,603,638 2,442,851

Additions to property and buildings 5,709 3,713

Decrease (increase) in net assessment income credits

due to insured banks 96,491 (67,858)

Payments on liabilities incurred in

failures of insured banks 515,006 587,157

Total financial resources applied $14,745,112 $8,210,839

The accompanying summary of significant accounting policies and notes to financial statements are an 

integral part of these statements.

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Federal Reserve Bank of St. Louis
NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1984 AND 1983

1. Summary of Significant Accounting Policies:

General

These statements do not include accountability for assets and liabilities of closed insured banks for which 

the Corporation acts as receiver or liquidating agent. Periodic and final accountability reports of its activities as receiver or liquidating agent are furnished by the Corporation to courts, supervisory authorities, 

and others as required.

U.S. Treasury Obligations

Securities are shown at amortized cost which is the purchase price of the securities less the amortized 

premium or plus the accreted discount. Such amortizations and accretions are computed on a daily 

basis from the date of acquisition to the date of maturity. For the year ended December 31, 1984, the 

Corporation changed from the straight-line method to the constant-yield method. This change did not 

have a material effect on net income.

Deposit Insurance Assessments

The Corporation assesses insured banks at the rate of 1/12 of one percent per year on the bank’s average deposit liability less certain exclusions and deductions. Assessments are due in advance for each 

six-month period and credited to income each month. The Depository Institutions Deregulation and Monetary Control Act of 1980 authorized a percentage of net assessment income to be transferred to insured 

banks each July 1 of the following calendar year to 60 percent. Additionally, the Act authorized the FDIC 

Board of Directors to make adjustments to this percentage within certain limits in order to maintain the 

Deposit Insurance Fund between 1.25 and 1.40 percent of estimated insured deposits. If this ratio falls 

below 1.10 percent, the FDIC is mandated to reduce the percentage of net assessment income distributed to a limit of 50 percent. If this ratio exceeds 1.40 percent, the FDIC is mandated to increase the 

percentage of net assessment income distributed by such an amount as it determines will result in maintaining that ratio at not more than 1.40 percent.

Allowance for Losses

The Corporation establishes an estimated allowance for loss at the time a bank fails. These allowances 

are reviewed every six months and adjusted as required, based on financial developments which occur 

during each six-month period. The Corporation does not state its estimated contingent liability for unknown future bank closings because such estimates are impossible to make. The Corporation’s contingent liability for eventual net losses depends upon factors which cannot be assessed until or after a 

bank has actually failed. The Corporation’s entire Deposit Insurance Fund and borrowing authority are 

available, however, for such contingencies.

Depreciation

The Washington Office Buildings are depreciated on a straight-line basis over a 50-year estimated life.

The San Francisco Condominium Offices are depreciated on a straight-line basis over a 35-year estimated life. The cost of furniture, fixtures, and equipment is expensed at time of acquisition.

Income Maintenance Agreements

The Corporation records its liability under an income maintenance agreement at the present value of 

each estimated cash outlay at the time the agreement is accepted. Estimated cash outlays are anticipated future payments the Corporation will provide to offset the difference between the annualized cost 

of funds and the annualized return on the declining volume of earning assets acquired in a merger transaction, plus an amount to cover overhead costs. The charge is recorded to insurance loss. The present 

value of the liability is then accreted daily and recorded monthly over the term of the agreement. Any 

differences between the estimated and actual cash outlays are recorded as payment adjustments. The

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Federal Reserve Bank of St. Louis
1. Summary of Significant Accounting Policies (Continued):

present value of remaining estimated cash outlays is also reviewed and adjusted each year when interest rate changes occurring in the marketplace appear material or permanent in nature. The originally 

recorded loss, plus or minus any payment and present value adjustments, will then be prorated between 

insured banks and the Deposit Insurance Fund as provided in Section 7(d) of the Federal Deposit Insurance Act.

Reclassifications

Reclassifications have been made in the 1983 Financial Statements to conform to the presentation used 

in 1984.

2. U.S. Treasury Obligations:

All cash received by the Corporation which is not used to defray operating expenses or for outlays related to assistance to banks and liquidation activities, is invested in U.S. Treasury securities. The Corporation’s investment portfolio consists of the following (in thousands):

December 31, 1984 December 31, 1983

Maturity Description Book Value

Market

Value Book Value

Market

Value

One Day Special Treasury 

Certificates $ 759,127 $ 759,127 $ 484,331 $ 484,331

Less than U.S.T. Bills,

1 Year Notes and Bonds 2,209,252 2,226,362 1,886,210 1,884,915

1-3 Years U.S.T. Notes and Bonds 6,186,261 6,239,531 4,985,240 4,975,485

3 -5 Years U.S.T. Notes and Bonds 

5-10 Years U.S.T. Notes and Bonds

5,281,646

0

5,216,021

0

5,781,924

854,354

5,621,113

779,366

$14,436,286 $14,441,041 $13,992,059 $13,745,210

3. Certificates and Notes Receivable from Insured Banks:

The Corporation's outstanding principal balances on certificates and notes receivable from insured banks 

are as follows (in thousands):

1984

December 31

1983

Certificates:

Net worth certificates 

Allowance for losses

$348,342

(182,981)

165,361

$ 0 

0

0

Notes receivable to:

Assist operating banks 

Facilitate deposit assumptions 

Facilitate merger agreements

27,000

93,374

275,148

27,000

120,993

275,648

$560,883 $423,641

The net worth certificate program was established at the FDIC by authorization of the Garn-St Germain 

Depository Institutions Act of 1982. Under this program, the Corporation would purchase a qualified institution’s net worth certificate and, in a non-cash exchange, the Corporation would issue its non-negotiable 

promissory note of equal value. The total assistance outstanding to qualified institutions as of December 31, 

1984 and 1983 is $578,791,000 and $376,866,000 respectively. As of December 31,1984, the Corporation has 

recorded $348,342,000 of net worth certificates for which an allowance for losses of $182,981,000 is 

estimated. The financial statements exclude $230,449,000 of net worth certificates for which no losses are 

expected because of the non-cash exchange nature of the transactions.

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Federal Reserve Bank of St. Louis
4. Assets Acquired in Assistance to an Insured Bank:

On July 26, 1984, the FDIC, the Federal Reserve Board, the Comptroller of the Currency and a group of 

major U.S. banks agreed to provide a “permanent assistance program” to the Continental Illinois National 

Bank and Trust Company of Chicago (“CINB”) and its parent, Continental Illinois Corporation. This program, which became effective on September 26, 1984, after Continental Illinois Corporation shareholder 

approval, replaced a temporary, emergency assistance package among the same parties that had been 

in effect since May 1984. Major elements of the new package included a financial assistance plan to 

remove problem loans from CINB and infuse new capital resources into CINB, the continuation of ongoing lines of credit from the Federal Reserve Board and a group of major U.S. banks to alleviate liquidity pressures and the installation of a new management team. Additionally, the FDIC agreed to commit 

more capital or other forms of assistance if the permanent assistance program proves to be insufficient 

for any reason.

The key aspects of the permanent assistance program applicable to the FDIC are embodied in an Implementation Agreement and an Assistance Agreement between the FDIC and CINB, Continental Illinois 

Corporation, and Continental Illinois Holding Corporation, a new holding company formed to own all Continental Illinois Corporation stock as of the effective date for the purpose of implementing the FDIC Option 

(described below). Discussed below are the major aspects of the FDIC’s participation in the permanent 

assistance program and their effect on the FDIC financial statements.

The assets acquired by the FDIC in assistance to CINB on the commencement date and as of year end 

are as follows (in thousands):

Loans and related assets purchased 

Promissory note 

Preferred stock investment

(Commencement Date)

September 26, 1984

$2,000,000 

1,500,000 

1,000,000

December 31, 1984

$2,010,313

1,447,116

1,000,000

$4,500,000 $4,457,429

Loans acquired were selected by CINB with the restrictions that such loans were nonperforming, classified or otherwise of poor quality (i.e., “troubled loans”). Certain foreign loans were excluded from selection. On September 26, 1984, after consummation of the permanent assistance program, CINB transferred $2.0 billion of troubled loans to the FDIC. The unpaid legal principal value of these loans was 

approximately $3.7 billion.

Also, on September 26, 1984, the FDIC received a promissory note from CINB for $1.5 billion. At CINB’s 

option, the promissory note can be paid anytime within three years by transfer of additional troubled 

loans (subject to the above restrictions) at CINB’s book value as of the date of transfer. Until such time as 

the promissory note is paid, interest will be charged. As of December 31, 1984, CINB transferred 

$52,844,000 of additional troubled loans to the FDIC as partial repayment on the original promissory note. 

As a result, the remaining unpaid principal balance on the note is $1,447,116,000.

The purchase of these assets was, in part, funded by the assumption of $3.5 billion of indebtedness to 

the Federal Reserve Bank of Chicago (FRB) on behalf of CINB. These borrowings will bear interest at 

specified rates established by the FRB and the U.S. Treasury. The FDIC will repay these borrowings by 

making quarterly remittances of its collections, less expenses, on the troubled loans. If there is a shortfall 

at September 26, 1989, the FDIC will make up such deficiency with its own funds.

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Federal Reserve Bank of St. Louis
4. Assets Acquired in Assistance to an Insured Bank (continued):

The Implementation Agreement provides for the FDIC to be reimbursed each quarter for its expenses 

related to administering the transferred loan portfolio and for interest paid on the indebtedness to the 

FRB which it assumed. Thus, such costs are recorded as assets. The FDIC and CINB have entered into 

a service agreement whereby CINB will administer the transferred loan portfolio on behalf of the FDIC.

The FDIC is also permitted to establish a special reserve account from troubled loan collections. The 

balance in this account, if any, reverts to the FDIC in those quarters when loan collections have been 

insufficient to cover interest owing on the indebtedness which it assumed. For financial accounting purposes, cash collections received on the transferred loan portfolio (plus certain other amounts) are applied 

quarterly in accordance with the Implementation Agreement terms, as follows: 1) to the administrative 

expenses paid by the FDIC; 2) to the interest owing on the assumed indebtedness; 3) to fund the special 

reserve account such that this account plus accrued interest thereon is at least $75 million; and 4) to 

principal owing under the FRB Agreement. The FDIC is entitled to receive interest on the cumulative 

deficiencies between cash collections and the costs incurred in administering the troubled loans and the 

interest on the assumed debt. Further, CINB has assigned to the FDIC all its existing and future claims 

against any party which may be related to any loss incurred in connection with any transferred loan.

Total cash flow consists of the above collections of principal and interest on the transferred loan portfolio, 

interest payments on the CINB promissory note and interest earned on daily collections. As of 

December 31, 1984, the FDIC received cash flow totaling $147,044,000. Cash flow was applied to 

administrative costs and interest expense of $3,224,000 and $94,564,000 respectively, and to establish a 

special reserve account balance of $49,256,000. Accordingly, total FDIC obligations for purposes of 

exercising the FDIC option (discussed below) are $3,457 billion. The collection results during this period 

should not necessarily be considered indicative of the ultimate loan portfolio collectibility.

Ultimate collection results on the transferred loan portfolio are subject to significant uncertainties because 

of the financially troubled nature of the borrowers and the effects of general economic conditions on their 

industries. Due to the number and complexity of the loans within the transferred loan portfolio, an estimate of the ultimate collectibility has not been completed by the FDIC. Accordingly, no determination has 

been made as to whether or not any allowance for loss related to the CINB permanent assistance program is necessary. Consequently, none has been recorded in the financial statements for the year ended 

December 31, 1984. The Corporation expects to complete its initial determination of the estimated net 

realization on the transferred loan portfolio during 1985.

The FDIC holds an option to acquire up to 40.3 million shares of Continental Illinois Corporation common 

stock. The shares subject to the option are owned by Continental Illinois Holding Corporation, which is 

owned by the former stockholders of Continental Illinois Corporation. The option cannot be exercised 

prior to the fifth anniversary of the commencement date, September 26, 1989. Further, the option is 

exercisable only if the FDIC suffers a loss (disregarding any profit or loss from the FDIC’s interest in 

Continental Illinois Corporation preferred or common stock) on the transferred loan portfolio, including 

unrecovered administrative costs and interest expense. If the FDIC suffers a loss, the FDIC will be entitled to retain any remaining transferred loans and to exercise the FDIC Option for one share of Continental Illinois Corporation common stock for every $20 of loss, at the exercise price of $0.00001 per 

share of common stock. No value has been assigned to the FDIC’s right to exercise this option as of 

December 31, 1984. If the FDIC does not suffer any loss under the permanent assistance program, all 

remaining loans and other assets acquired will be returned to CINB and the option would not be 

exercisable.

The FDIC also purchased $1 billion of two non-voting, Continental Illinois Corporation, preferred stock 

issues. The proceeds of these issues were transferred to CINB in the form of a capital contribution. The 

Junior Perpetual Convertible Preference Stock, in the amount of $720 million, is convertible into 160 million shares of Continental Illinois Corporation common stock upon sale or transfer by the FDIC. Dividends 

are to be received on this preferred stock only to the extent that dividends are paid on the Continental 

Illinois Corporation common stock and are equivalent to that which would be paid on 160 million shares 

of common stock. The Adjustable Rate Preferred Stock, Class A, in the amount of $280 million, is a 

cumulative issue that is callable at the option of Continental Illinois Corporation. The issuer also has the 

option to pay dividends on this issue in the form of additional shares of this issue or cash until the third 

anniversary of their original issue date.

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Federal Reserve Bank of St. Louis
5. Assets Acquired from Failures of Insured Banks:

Assets acquired from failures of insured banks are as follows (in thousands):

1984

December 31

1983

Depositors’ claim s paid 

Depositors' claims unpaid

Loans and assets purchased in a fiduciary capacity 

Assets purchased in a corporate capacity

$ 731,288 

6,815 

3,088,354 

377,219

$ 413,748 

7,048 

2,494,059 

386,917

Allowance for losses

4,203,676

(2,060,136)

$2,143,540

3,301,772

(1,309,743)

$1,992,029

An analysis of the changes in the allowance for losses by account groups is as follows (in thousands):

Depositors’

claims

paid

Loans and assets

purchased in a:

Fiduciary Corporate

capacity capacity Total

1984

Balance, January 1 

Provision for insurance losses 

Write-off at termination

$175,832

(17,775)

0

$ 727,362 

810,036 

0

$406,549 

(41,868) 

0

$1,309,743

750,393

0

Balance, December 31 $158,057 $1,537,398 $364,681 $2,060,136

1983

Balance, January 1 

Provision for insurance losses 

W rite-off at termination

$ 58,352 

117,480 

0

$ 213,536 

513,826 

0

$362,744

43,805

0

$ 634,632 

675,111 

0

Balance, December 31 $175,832 $ 727,362 $406,549 $1,309,743

6. Property and Buildings:

Property and buildings consist of (in thousands):

1984

December 31

1983

Land

Office buildings 

Accum ulated depreciation

$ 4,014 

43,025 

(5,338)

$41,701

$ 4,014 

37,316 

(4,361)

$36,969

The Corporation’s 1776 F Street property is subject to notes payable totaling $10,926,000 and 

$11,224,000 at December 31, 1984 and 1983, respectively.

7. Assessment Credits Due Insured Banks

Contingent upon a legislatively specified ratio of the Corporation's Deposit Insurance Fund to estimated 

insured bank deposits, the Corporation credits a legislatively authorized percentage (currently 60 percent) of its net assessment income to insured banks. This credit is distributed, pro-rata, to each insured 

bank as a reduction of the following year’s assessment. Net assessment income is determined by gross 

assessments less administrative operating expenses and expenses and losses related to insurance 

operations.

The Garn-St Germain Depository Institutions Act of 1982, amended Section 7(d)(1) of the Federal Deposit 

Insurance Act and authorized the Corporation to include certain lending costs in the computation of the 

net assessment income. The lending costs are the amounts by which the amount of interest earned on 

each loan made by the Corporation under Section 13 of the Federal Deposit Insurance Act after January

1, 1982, is less than the amount of interest the Corporation would have earned for the calendar year if 

interest had been paid on the loans at a rate equal to the average current value of funds to the U.S. 

Treasury for the calendar year.

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Federal Reserve Bank of St. Louis
7. Assessment Credits Due Insured Banks (continued):

The computation and distribution of net assessment income credits for calendar year 1984 and 1983 are 

as follows (in thousands):

1984 Net Assessment Income Credits Due Insured Banks - July 1, 1985

Computation:

Gross Assessment Income - C.Y. 1984 $1,319,170

Less: Administrative Operating Expenses $151,201 

Merger Assistance Losses and Expenses

less Amortization and Accretion 135,383

Provision for Insurance Losses 933,374

Nonrecoverable Insurance Expenses 17,084

Lending Costs ________0 1,237,042

Net Assessment Income $ 82,128

Distribution:

40% to the Deposit Insurance Fund 

60% to Insured Banks

Assessment Credit Due Insured Banks: 

Assessment Credit - C.Y. 1984 

Assessment Credits - Prior Years 

Total Credits Due, July 1, 1985

$ 32,851

49,277 $ 82,128

$ 49,277 

18,271

$ 67,548

Effective rate of assessment for C.Y. 1984: 1/12.5 of 1% of total assessable deposits 

Percent of total credits due insured banks: 5.12048% of gross assessments

1983 Net Assessment Income Credits Due Insured Banks - July 1, 1984

Computation:

Gross Assessment Income - C.Y. 1983 $1,211,440

Less: Administrative Operating Expenses $135,660

Merger Assistance Losses and Expenses

less Amortization and Accretion 90,123

Provision for Insurance Losses 675,119

Nonrecoverable Insurance Expenses 31,426

Lending costs 8,640 940,968

Net Assessment Income $ 270,472

Distribution:

40% to the Deposit Insurance Fund $108,189

60% to Insured Banks 162,283 $ 270,472

Assessment credit Due Insured Banks:

Assessment credit - C.Y. 1983 $ 162,283

Assessment credits - Prior Years 1,756

Total Credits Due, July 1, 1984 $ 164,039

Effective rate of assessment for C.Y. 1983: 1/14 of 1% of total assessable deposits 

Percent of total credits due insured banks: 13.54086% of gross assessments

8. Liabilities Incurred in Assistance to Insured Banks:

The Corporation's outstanding principal balances on liabilities incurred in assistance to insured banks are 

as follows (in thousands):

December 31

1984 1983

Federal indebtedness $3,500,000 $ 0

Promissory (exchange) notes 348,342 0

$3,848,342 $ 0

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Federal Reserve Bank of St. Louis
9. Liabilities Incurred from Failures of Insured Banks:

The Corporation’s outstanding principal balances on liabilities incurred from failures of insured banks are 

as follows (in thousands):

December 31

Federal indebtedness 

Notes payable

Income maintenance agreements 

Depositors' claims unpaid

1984

$442,667

222,813

187,346

6,815

1983

811,666

242,293

192,756

7,048

$859,641 $1,253,763

10. Provision for Insurance Losses:

An analysis of the provision for insurance losses is as follows (in thousands):

December 31

Provision for insurance losses:

Net worth certificates 

Current year provision

Assets acquired from failures of insured banks 

Current year provision 

Prior year adjustments 

Termination adjustments

1984

$182,981

283,219 

467,174 

________ 0

750,393

1983

122,450

552,661

675,119

$933,374 $675,119

11. Nonrecoverable Insurance Expenses:

The Corporation’s nonrecoverable insurance expenses primarily represent costs associated with (1) preparing and executing the activity in payoff cases and (2) administering and liquidating the assets purchased in a corporate capacity. As of December 31, 1984 and 1983, nonrecoverable insurance expenses included $13,136,000 and $25,211,000, respectively, of interest expense incurred on the Federal 

Reserve Bank of New York indebtedness related to the administering and liquidating of assets purchased 

in a corporate capacity.

12. Lease Commitments:

Rent for office premises charged to administrative operating and liquidation overhead expenses were 

$11,947,000 (1984) and $7,393,000 (1983). Minimum rentals for each of the next five years and for subsequent years thereafter are as follows (in thousands):

1985 1986 1987 1988 1989 1990/Thereafter

$15,870 $12,385 $11,189 $9,696 $6,763 $42,278

Most office premise lease agreements provide for increase in basic rentals resulting from increased property 

taxes and maintenance expense.

13. Retirement Plan:

All permanent, full-time and part-time employees of the FDIC are covered by the contributory Civil Service Retirement Plan. The Corporation makes bi-weekly contributions to the plan equal to the employee’s 

bi-weekly contributions. The retirement plan expenses incurred for calendar years 1984 and 1983 were 

$7,634,000 and $7,073,000 respectively.

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Federal Reserve Bank of St. Louis
LEGISLATION

AND

REGULATIONS

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Federal Reserve Bank of St. Louis
LEGISLATION 1 984

The following is a summary of public laws 

enacted in 1984 that are pertinent to the 

activities of the FDIC.

Bankruptcy

Public Law 98-353, the bankruptcy 

amendments to the Federal Judgeship Act 

of 1984 amended the definition of “ person” , 

11 U.S.C. section 101, to provide that any 

governmental unit that acquires an asset 

from a person as a result of operation of a 

loan guarantee agreement, or as receiver or 

liquidating agent of a person, will be 

considered a person for purposes of 

Section 1102 of this title. As a result, the 

FDIC may be a member of an unsecured 

creditor’s committee in Chapter 11 

bankruptcy cases, in its capacity as 

receiver or liquidator of banks failing after 

October 9, 1984.

Criminal Statutes

The Comprehensive Crime Control Act, 

Public Law 98-473, amends Section 2113 of 

Title 18 to impose criminal sanctions for 

receipt of property stolen from a bank. It 

also amends section 215 of Title 18 to 

provide criminal sanctions for giving or 

receipt of a bribe of an officer, director, 

employee, agent or attorney of any financial 

institution including any bank insured by the 

FDIC. Finally, the Act amends section 

1105(a) of Title 18 relating to counterfeiting 

of State and corporate securities to define 

“ security” to include certain bank related 

obligations such as certificates of deposit, 

travelers’ checks and letters of credit. 

Passage of the Comprehensive Crime 

Control Act represents the first statute 

containing sanctions against bank fraud.

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Federal Reserve Bank of St. Louis
RULES AND REGULATIONS

1984

Delegations of Authority

(Part 303)

Effective March 8, 1984, the FDIC 

amended Part 303 of its regulations to 

delegate authority to its Board of Review to 

withdraw any notice of assessment of civil 

money penalty issued by it under section 

7(j)(15) or 8(i) or 18(j) of the Federal Deposit 

Insurance Act or section 106(b)(2) of the 

Bank Holding Company Act, and any notice 

of charges issued by it under section 8(b) of 

the FDI Act. The Board of Review also may 

delegate authority to both the Director of 

the Division of Bank Supervision and to the 

Deputy General Counsel for Open Bank 

Regulation and Supervision to issue a 

section 8(b) order where a proposed order 

to cease and desist, as approved by the 

Board of Directors, is agreed to without 

change by the respondent.

Effective May 18, 1984, the FDIC 

amended its regulations to expand the 

delegated authority of the Director of the 

Division of Bank Supervision and the 

regional directors to act on branch, main 

office or branch relocations, and remote 

service facility applications.

Effective July 13, 1984, the FDIC 

amended its regulations to expand the 

delegated authority of the Director of the 

Division of Bank Supervision and the

appropriate regional director to act on 

certain merger applications. The FDIC also 

amended its regulations to authorize the 

Board of Review to deny as well as approve 

applications made pursuant to section 19 of 

the FDI Act seeking approval of the FDIC 

for an individual who has been convicted of 

a criminal offense involving dishonesty or a 

breach of trust to serve as a director, 

officer or employee of an insured bank. The 

FDIC also acted to authorize the Director 

and regional directors to approve, but not 

deny, any such section 19 applications. This 

set of amendments also delegates to the 

Board of Review the authority to approve, 

but not deny, any such section 19 

applications, and to approve or deny 

requests seeking exemptions from FDIC’s 

regulation prohibiting certain management 

official interlocks. Lastly, the FDIC adopted 

an amendment that clarifies the language of 

the existing delegation to act on branch and 

relocation applications, and permits the 

Director’s delegate to act on all applications 

the Director may act on pursuant to section 

303.11(a). These amendments are expected 

to reduce the time necessary to process 

such applications and requests and thus 

benefit insured banks.

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Federal Reserve Bank of St. Louis
Forms, Instructions and Reports

(Parts 304, 303, and 308)

The FDIC adopted a final regulation in

1984, to become effective January 16,

1985, requiring each FDIC-insured bank with 

combined fully insured brokered deposits 

and fully insured deposits placed directly by 

depository institutions in excess of either 

the bank’s total capital and reserves or five 

percent of the bank’s total deposits to 

report holding of such deposits to the FDIC 

for every month in which such excess 

exists. The purpose of this regulation is to 

provide the FDIC with more frequent 

information on which banks are using 

brokered funds and how those banks are 

using the funds. With this monthly 

information the FDIC hopes to mitigate on a 

more timely basis the harms caused by 

such deposits.

Effective November 9, 1984, the FDIC 

amended its regulations to permit 

establishment of additional Remote Service 

Facilities (RSF) and relocation of existing 

RSFs after approval by the appropriate 

FDIC regional director, to allow the Director 

of the Division of Bank Supervision and 

regional directors to act on additional RSF 

applications and RSF relocation 

applications, and to specify the content of 

petitions for reconsideration and who within 

the FDIC will reconsider denied 

applications, petitions or requests. The FDIC 

shortened the time period over which 

comments on merger applications may be 

filed from 45 days to 30 days. In addition, 

the FDIC clarified procedures for section 19 

(applications to serve as a bank officer) 

reconsiderations, and shortened the 

maximum waiting time for a hearing on a 

section 19 denial from 60 to 30 days, 

allowing a bank to choose another suitable 

candidate more quickly.

Disclosure of Information

(Part 309)

Section 309.4(e) of FDIC regulations 

provides that certain FDIC bank reports are 

located in the Data Base Section, 

Management Information Services Branch, 

Division of Accounting and Corporate 

Services (DACS). Because of a recent 

reorganization in DACS, these materials 

have been transferred to another unit of 

DACS. Therefore, section 309.4(e) was 

amended accordingly, effective May 25,

1984.

Brokered Deposits; Limitations

on Deposit Insurance

(Part 330)

The FDIC and the Federal Home Loan 

Bank Board jointly adopted final regulations, 

to be effective October 1, 1984, limiting 

insurance coverage on deposits placed by 

or through brokers to $100,000 per broker 

per institution. The regulations addressed 

the agencies' concerns about problems 

arising from brokered funds, particularly in 

view of decontrol of interest rates paid on 

deposits. The regulation was adopted on 

March 26, 1984, and court action was 

brought to nullify the regulations on the 

same day. On June 20, 1984, the U.S. 

District Court for the District of Columbia 

entered an Order declaring the final rule to 

be unlawful, enjoining the rule's 

implementation and directing that the 

Court’s Order be published. The FDIC 

published the Order, at 49 FR 27294 (July

3, 1984). The FDIC appealed the Court’s 

decision.

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Federal Reserve Bank of St. Louis
Employee Responsibilities

and Conduct

(Part 336)

Effective May 14, 1984, the FDIC revised 

Part 336 to increase the categories of 

employees subject to credit restrictions; 

ease existing restrictions on credit from 

affiliates of prohibited creditors; ease 

existing restrictions on ownership of bank 

securities; report family member 

employment by insured banks; increase the 

categories of employees reporting 

indebtedness; and report the acceptance of 

private sector employment upon resignation. 

The rule lifts financial hardships on certain 

employees and monitors potential conflict of 

interest situations involving a greater 

number of employees.

Unsafe and Unsound Banking

Practices; Securities Activities

(Part 337)

The FDIC has determined that it is not 

unlawful under the Glass-Steagall Act for an 

insured nonmember bank to establish or 

acquire a bona fide subsidiary that engages 

in securities activities nor for an insured 

nonmember bank to become affiliated with 

a company engaged in securities activities 

if authorized under state law. At the same 

time, however, the FDIC has found that 

some risk may be associated with those 

activities. In order to address that risk the 

FDIC amended its regulations, effective 

December 28, 1984, to define bona fide 

subsidiary, require notice of intent to invest 

in a securities subsidiary, limit the 

permissible securities activities of insured 

nonmember bank subsidiaries, and place 

certain other restrictions on loans, 

extensions of credit, and other transactions 

between insured nonmember banks and 

their subsidiaries or affiliates that engage in 

securities activities.

Fair Housing

(Part 338)

Effective October 12, 1984, the FDIC 

amended section 338.4 of its regulations to 

eliminate the requirement that insured State 

nonmember banks collect and record in a 

log-sheet certain data concerning home 

loan inquiries, while retaining the 

requirement that information on all such 

applications be recorded and held for 25 

months. This amendment was made 

because log-sheet entries about inquiries 

have not been effective in identifying those 

banks needing special attention in the fair 

housing lending monitoring program.

Foreign Banks; Asset Pledge and

Asset Maintenance Requirements, and

Limitations for Concentrations of

Transfer Risk.

(12 CFR 346)

The FDIC amended its International 

Banking Act regulations, with an effective 

date of January 22, 1985, concerning 

primarily asset pledge and asset 

maintenance requirements and included a 

new section dealing with concentrations of 

transfer risk. In addition to the changes 

concerning acceptable assets, the asset 

pledge provision was changed in regard to 

the amount required, and the allowance of 

a credit for any other pledge-like transaction 

to a state or the Comptroller of the 

Currency was eliminated. A minimum 

capital equivalency ledger account 

evidencing funding of the branch by the 

parent bank replaced the former asset 

maintenance rule. The new rule emphasizes 

the FDIC’s intent that there be an 

equivalent for capital in insured branches. 

Certificates of deposit without a valid waiver 

of offset agreement now require 

adjustments to the capital equivalency 

ledger account and may not be included in 

the asset pledge. Regulatory limitations for 

concentrations of transfer risk to the home 

country and to any other single country, 

respectively, by an insured branch were 

added to the regulation.

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Federal Reserve Bank of St. Louis
Management Official Interlocks

(12 CFR 348)

The FDIC, the Office of the Comptroller 

of the Currency, the Board of Governors of 

the Federal Reserve System, the Federal 

Home Loan Bank Board, and the National 

Credit Union Administration amended their 

respective regulations implementing the 

Depository Institution Management 

Interlocks Act that generally prohibit certain 

management official interlocks between 

unaffiliated depository institutions and 

depository holding companies depending 

upon their asset size and location. The 

amendments will conform the regulations to 

a change in the Act that deleted all 

references to “ Standard Metropolitan 

Statistical Areas” and substituted the new 

classifications for metropolitan statistical 

areas adopted by the Office of Management 

and Budget. The FDIC action was effective 

July 10, 1984.

International Operations; Reporting and

Disclosure of International Assets

(12 CFR 351)

To implement section 907 of the 

International Lending Supervision Act of

1983, this rule, effective February 13, 1984, 

requires banking institutions to submit, at 

least quarterly, a report on the amounts and 

composition of their international assets.

The report also would include information to 

be made available to the public concerning 

foreign country exposure. The format, 

contents, and reporting and filing dates of 

the reports would be prescribed jointly by 

the FDIC, the Board of Governors of the 

Federal Reserve System, and the Office of 

the Comptroller of the Currency.

International Operations; Allocated

Transfer Risk Reserve

(12 CFR 351)

This regulation, effective February 13,

1984, requires banking institutions to 

establish special reserves against the risks 

presented in certain international assets 

when the federal banking agencies (the 

FDIC, the Comptroller and the Board of 

Governors of the Federal Reserve System) 

determine that such reserves are 

necessary. In particular, it is intended to 

require banks to recognize uniformly the 

risk and diminished value of international 

assets that have not been serviced over a 

protracted period of time. This regulation 

implements one aspect of the joint program 

of the Federal banking agencies to 

strengthen the supervisory and regulatory 

framework relating to foreign lending by 

U.S. banks, incorporated in section 905(a) of 

the International Lending Supervision Act of

1983.

International Operations; Accounting

for International Loan Fees

(12 CFR 351)

This regulation, effective March 29, 1984, 

establishes uniform requirements for the 

accounting for fees associated with the 

restructuring of international lending 

arrangements and nonrefundable fees 

charged by banking institutions in 

connection with other international loans. 

This rule implements one aspect of the joint 

program of the federal banking agencies to 

strengthen the supervisory and regulatory 

framework relating to foreign lending by 

U.S. banking institutions incorporated in 

section 906 of the International Lending 

Supervision Act of 1983.

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Federal Reserve Bank of St. Louis
PROPOSED RULEMAKING

Capital Maintenance

(12 CFR 325)

The FDIC is required by statute to 

evaluate the capital position of a bank 

before approving various bank applications. 

Also, it is necessary for the FDIC to 

evaluate capital in determining the safety 

and soundness of banks it supervises and 

insures. A proposed rule was issued in 1984 

by the FDIC that defines capital, establishes 

minimum standards for adequate capital, 

sets standards to determine when an 

insured bank is operating in an unsafe and 

unsound condition by reason of the amount 

of its capital, and establishes procedures for 

issuing a Directive to require an insured 

state nonmember bank to achieve and 

maintain minimum capital. The proposal was 

issued for comment on July 20, 1984, and 

the FDIC was in the process of considering 

public comments on the proposal at yearend 1984.

Powers Inconsistent with the Purposes

of Federal Deposit Insurance Law; Real

Estate, Insurance, Data Processing,

Travel Agency, and other Financially

Related Activities

(12 CFR 332)

The FDIC proposed amending Part 332 of 

its regulations to prohibit any insured bank 

from directly engaging in underwriting 

insurance, underwriting or developing real 

estate, insuring, guaranteeing, or certifying 

title to real estate, guaranteeing or 

becoming surety upon the obligations of 

others, insuring the fidelity of others or 

engaging in a surety business. The FDIC 

also proposed to require any subsidiary of 

an insured bank that conducts any of these 

activities to meet the criteria for a bona fide

subsidiary set out in the regulation, to 

require notice to the FDIC of intent to 

invest in any such subsidiary, and to place 

certain restrictions on the affiliation of an 

insured bank with a company that engages 

in any of the subject activities. Further 

provisions of the proposed rule restrict 

extensions of credit and other transactions 

between insured banks and their 

subsidiaries that engage in any of the 

subject activities, and place limitations on 

insured banks that provide electronic data 

processing services to persons or 

companies other than banks, or act as 

agent or broker for insurance, real estate, 

securities, or travel services. The date of 

adoption of the proposal was September 12,

1984, and the FDIC was considering public 

comments on the proposal at the end of

1984.

Credit Card Agreements and Check

Guarantees

(12 CFR 332; 12 CFR 337)

On June 12, 1981, the FDIC issued 

proposed amendments to its regulations 

that prohibit an insured nonmember bank 

from guaranteeing the obligations of third 

parties. These proposed amendments were 

withdrawn on March 30, 1984. The FDIC, 

on August 23, 1984, issued a revised 

proposed amendment in the form of an 

exemption designed to allow all banks to 

issue check guaranty cards, and to sponsor 

customers in credit card agreements with 

other banks. The proposed amendments 

would allow banks to enter into such 

undertakings as long as they meet certain 

criteria pertaining to safety and soundness. 

The FDIC is reviewing public comment on 

the proposal.

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Federal Reserve Bank of St. Louis
Banks Closed Because of Financial

Difficulties: FDIC Income,

Disbursements and Losses

The following tables are included in the 

1984 FDIC Annual Report:

— Table 122, Number and Deposits of 

Banks Closed Because of Financial 

Difficulties, 1934-1984;

— Table 123, Insured Banks Requiring 

Disbursements by the Federal Deposit 

Insurance Corporation During 1984;

— Table 125, Recoveries and Losses by 

the Federal Deposit Insurance Corporation 

on Principal Disbursements for Protection of 

Depositors, 1934-1984;

— Table 127, Income and Expenses, 

Federal Deposit Insurance Corporation, by 

Year, from Beginning of Operations, 

September 11, 1933, to December 31,

1984;

— Table 129, Insured Deposits and the 

Deposit Insurance Fund, 1934-1984.

Deposit Insurance Disbursements

Disbursements by the Federal Deposit 

Insurance Corporation to protect depositors 

are made when the insured deposits of 

banks in financial difficulties are paid off, or 

when the deposits of a failing bank are 

assumed by another insured bank with the 

financial aid of the FDIC. In deposit payoff 

cases, the disbursement is the amount paid 

by the FDIC on insured deposits. In the 

modified deposit payoff, an alternative 

method, the FDIC transfers the failed bank’s 

insured and secured deposits to another 

bank in the community while uninsured 

depositors must share with the FDIC and 

other general creditors of the bank in any 

proceeds realized from liquidation of the 

failed bank’s assets. In certain modified 

payoffs, the FDIC may determine that an 

advance of funds to uninsured depositors

and other creditors of a failed bank is 

warranted. In deposit assumption cases, the 

principal disbursement is the amount loaned 

to failing banks, or the price paid for assets 

purchased from them. Additional 

disbursements are made in those cases as 

advances for protection of assets in 

process of liquidation and for liquidation 

expenses. In deposit assumption cases, the 

Corporation also may purchase assets or 

guarantee an insured bank against loss by 

reason of its assuming the liabilities and 

purchasing the assets of an open or closed 

insured bank. Under its section 13(c) 

authority, the FDIC made a disbursement in 

1984 to one operating bank.

Noninsured Bank Failures

Statistics in this report on failures of 

noninsured banks are compiled from 

information obtained from State banking 

departments, field supervisory officials, and 

other sources. The FDIC received no official 

reports of noninsured bank closings due to 

financial difficulties in 1984. For detailed 

data regarding noninsured banks that were 

suspended in the years 1934-1962, see the 

FDIC Annual Report for 1963, pages 27-41. 

For 1963-1984, see Table 122 of this report, 

and previous reports for respective years.

Sources of Data

Insured banks: books of specific banks at 

date of closing, and books of the FDIC, 

December 31, 1984.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 122. NUMBER AND DEPOSITS OF BANKS CLOSED BECAUSE OF FINANCIAL DIFFICULTIES, 1934-1984.

Year

Num ber Deposits (in thousands o f dollars)

Assets4

(in

Thousands

o f

Total D ollars)

N onInsured'

Insured

Total

NonInsured'

Insured

Total

W ithout 

disbursements 

by FDIC2

W ith 

disbursements 

by FDIC3 Total

W ithout 

disbursements 

by FDIC2

With 

disbursements 

by FDIC3

Total 891 136 755 8 747 28,467,984 143,501 28,324,483 41,147 28,283,336 36,266,760

1934 61 52 9 9 37,333 35,365 1,968 1,968 2,661

1935 32 6 26 25 13,988 583 13,405 85 13,320 17,242

1936 72 3 69 69 28,100 592 27,508 27,508 31,941

1937 84 7 77 " 2 75 34,205 528 33,677 328 33,349 40,370

1938 81 7 74 74 60,722 1,038 59,684 59,684 69,513

1939 72 12 60 60 160,211 2,439 157,772 157,772 181,514

1940 48 5 43 43 142,788 358 142,430 142,430 161,898

1941 17 2 15 15 29,796 79 29,717 29,717 34,804

1942 23 3 20 20 19,540 355 19,185 19,185 22,254

1943 5 5 5 12,525 12,525 12,525 14,058

1944 2 2 2 1,915 1,915 1,915 2,098

1945 1 1 1 5,695 5,695 5,695 6,392

1946 2 " l 1 1 494 147 347 347 351

1947 6 1 5 5 7,207 167 7,040 7,040 6,798

1948 3 3 3 10,674 10,674 10,674 10,360

1949 9 5 4 9,217 2,552 6,665 1,190 5,475 4,886

1950 5 1 4 4 5,555 42 5,513 5,513 4,005

1951 5 3 2 2 6,464 3,056 3,408 3,408 3,050

1952 4 1 3 3 3,313 143 3,170 3,170 2,388

1953 5 1 4 " 2 2 45,101 390 44,711 26,449 18,262 18,811

1954 4 2 2 2 2,948 1,950 998 998 1,138

1955 5 5 5 11,953 11,953 11,953 11,985

1956 3 " 1 2 2 11,690 360 11,330 11,330 12,914

1957 3 1 2 1 12,502 1,255 11,247 10,084 1,163 1,253

1958 9 5 4 4 10,413 2,173 8,240 8,240 8,905

1959 3 3 3 2,593 2,593 2,593 2,858

1960 2 ' 1 1 1 7,965 1,035 6,930 6,930 7,506

1961 9 4 5 5 10,611 1,675 8,936 8,936 9,820

1962 3 2 1 4,231 1,220 3,011 3,011 5

1963 2 2 2 23,444 23,444 23,444 26,179

1964 8 " l 7 7 23,867 429 23,438 23,438 25,849

1965 9 4 5 5 45,256 1,395 43,861 43,861 58,750

1966 8 1 7 7 106,171 2,648 103,523 103,523 120,647

1967 4 4 4 10,878 10,878 10,878 11,993

1968 3 3 3 22,524 22,524 22,524 25,154

1969 9 9 9 40,134 40,134 40,134 43,572

1970 8 " l 7 7 55,229 423 54,806 54,806 62,147

1971 6 6 6 132,058 132,058 132,058 196,520

1972 3 " 2 1 1 99,784 79,304 20,480 20,480 22,054

1973 6 6 6 971,296 971,296 971,296 1,309,675

1974 4 4 4 1,575,832 1,575,832 1,575,832 3,822,596

1975 14 j 13 13 340,574 1,000 339,574 339,574 419,950

1976 17 1 16 16 865,659 800 864,859 864,859 1,039,293

1977 6 6 6 205,208 205,208 205,208 232,612

1978 7 7 7 854,154 854,154 854,154 994,035

1979 10 10 10 110,696 110,696 110,696 132,988

1980 10 10 10 216,300 216,300 216,300 236,164

1981 10 10 10 3,826,022 3,826,022 3,826,022 4,859,060

1982 42 42 42 9,908,379 9,908,379 9,908,379 11,632,415

1983 48 48 48 5,441,608 5,441,608 5,441,608 7,026,923

1984 79 79 79 2,883,162 2,883,162 2,883,162 3,276,411

'For inform ation regarding each o f these banks, see table 22 in the 1963 Annual Report (1963 and p rio r years), and explanatory notes to tables regarding banks closed because of 

financial difficulties in subsequent annual reports. O ne noninsured bank placed in receivership in 1934, w ith no deposits at time or closing, is om itted (see table 22 note 9). Deposits are 

unavailable fo r seven banks.

2For inform ation regarding these cases, see table 23 o f the Annual Report fo r 1963.

3For inform ation regarding each bank, see the Annual Report fo r 1958, pp. 48-83 and pp. 98-127, and tables regarding deposit insurance disbursements in subsequent annual reports. 

Deposits ore adjusted as o f Decem ber 31,1982.

In sure d banks only.

5Not available.

45

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
TABLE 123. INSURED BANKS REQUIRING DISBURSEMENTS BY THE FEDERAL DEPOSIT INSURANCE CORPORATION DURING 1984

Nam e and Location

Class 

o f Bank

N um ber of 

Depositors 

o r Accounts

Total

Assets

(000's)

Total

Deposits

(000's)

FDIC

Disbursements

(000's)

Date o f Closing, 

Deposit Assumption, o r M erger

Receiver, Assuming Bank, 

Transferee Bank, or 

M e rging Bank

Deposit Payoffs

’ Heritage Bank 

Anaheim , C aliforn ia

SM 14,966 157,970 155,444 154,364 M arch 16,1984 Federal Deposit InsuranceC orporation

*West Coast Bank 

Los Angeles, C aliforn ia

N M 7,645 190,183 155,849 171,465 A p ril 2 7 ,19 84 Federal D epositlnsuranceC orporation

‘ Stewardship Bank o f O regon 

Portland, O regon

N M 1,927 5,232 5,565 4,883 June 8,1984 Federal D epositlnsuranceC orporation

Hereford State Bank 

H ereford, C olorad o

N M 658 2,666 2,444 2,375 August 24,1984 Federal D epositlnsuranceC orporation

Deposit Transfers to

Operating Banks

Indian Springs State Bank 

Kansas City, Kansas

N M 4,240 26,846 25,460 24,652 January 2 7 ,19 84 The Brotherhood Bank and Trust Co. 

Kansas City, Kansas

'S em inole State N ation al Bank 

Seminole, Texas

N 5,791 47,432 46,428 34,456 M arch 16,1984 Seminole N ation al Bank 

Seminole, Texas

‘ Security N ation al Bank o f Lubbock 

Lubbock, Texas

N 12,277 46,110 45,292 45,512 A p ril 13,1984 City Bank, N.A. 

Lubbock, Texas

'G a m a lie l Bank 

G am aliel, Kentucky

N M 5,663 22,588 21,657 22,388 A p ril 19,1984 Deposit Bank o f M o nro e County 

Tom pkinsville, Kentucky

•U nited O f A m erica Bank 

C hicago, Illinois

SM 8,000 33,398 34,173 29,226 A p ril 26 ,19 84 M id-C ity N ation al Bank o f C hicago 

C hicago, Illinois

‘ First N ation al Bank 

Snyder, Texas

N 3,100 15,844 14,712 15,887 M ay 4 ,198 4 A m erican State Bank o f Snyder 

Snyder, Texas

'The N ational Bank o f Carm el 

C arm el-by-the-Sea, C aliforn ia

N 4,775 76,118 73,919 81,638 M ay 8 ,198 4 County Bank and Trust 

Santa Cruz, C aliforn ia

‘ First Continental Bank & 

Trust Com pany o f Del City 

Del City, O klahom a

N M 16,016 103,347 92,930 89,702 M ay 11,1984 United O klaho m a Bank o f Del City 

Del City, O klahom a

Republic Bank o f Kansas City 

Kansas City, M issouri

N M 4,970 40,535 30,201 33,189 June 18,1984 Landm ark Bank o f Kansas City 

Kansas City, M issouri

A m erican Bank 

Saint Joseph, Tennessee

N M 2,646 34,445 30,692 27,254 June 27,1984 C om m ercial and Industrial Bank 

M em phis, Tennessee

•The Dayton Bank & Trust Com pany 

Dayton, Tennessee

N M 14,000 48,632 46,120 44,527 Novem ber 30 ,19 84 First N ation al Bank & Trust Com pany 

Rockwood, Tennessee

Uehling State Bank 

Uehling, N ebraska

N M 942 4,222 3,711 2,602 Decem ber 18,1984 Uehling State Bank 

Uehling, N ebraska

Deposit Assumptions, Loans, and

Financially Assisted Mergers

Farmers Bank & Trust Com pany 

W inchester, Tennessee

N M 10,705 46,457 46,990 26,441 January 6 ,198 4 M id-South Bank and Trust Com pany 

M urfreesboro, Tennessee

City and County Bank 

o f Jefferson County 

W hite Pine, Tennessee

N M 5,600 20,888 22,025 11,729 January 20 ,19 84 M erchants and Planters Bank o f 

N ew port

N ew port, Tennessee

Emerald Empire Banking 

Company

Springfield, O regon

SM 3,223 19,595 19,825 17,578 February 3,198 4 Citizens Valley Bank 

A lbany, O regon

The Tucker County Bank 

Parsons, W est V irg inia

SM 4,865 16,171 15,480 8,595 February 3,198 4 Citizens N ational Bank o f Elkins 

Elkins, West V irg inia

Heritage Bank o f 

Bureau County 

Depue, Illinois

N M 2,285 8,467 7,865 3,877 February 8,198 4 The C olonial Trust 8. Savings Bank 

o f Bureau County 

Depue, Illinois

W est O lym pia Bank 

Los Angeles, C alifornia

SM 6,130 20,663 19,741 12,100 February 10,1984 W ilshire State Bank 

Los Angeles, C aliforn ia

B row nfield State Bank 

and Trust Com pany 

Brow nfield, Texas

N M 2,860 34,451 36,582 17,221 February 17,1984 B row nfield State Bank 

B row nfield, Texas

* Dividend advanced by FDIC.

46

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
TABLE 123. INSURED BANKS REQUIRING DISBURSEMENTS BY THE FEDERAL DEPOSIT INSURANCE CORPORATION DURING 1984

Nam e and Location

Class 

o f Bank

Num ber of 

Depositors 

o r Accounts

Total

Assets

(000's)

Total

Deposits

(000's)

FDIC

Disbursements

(000's)

Date o f Closing, 

Deposit Assumption, o r M erger

Receiver, Assuming Bank, 

Transferee Bank, or 

M e rging Bank

United Bank o f O regon 

M ilw aukie, O regon

N M 5,322 14,699 14,350 12,342 M arch 2,1984 United States N ation al B an ko f O regon 

P ortland, O regon

A ll Am erican N ational Bank 

o f V irg inia Gardens 

M iam i, Florida

N 2,118 12,942 11,062 7,265 M arch 2,198 4 C apital Bank

N orth Bay V illa g e , Florida

N ational Bank and Trust 

Com pany o f Traverse City 

Traverse City, M ichigan

N 19,250 74,228 68,210 56,776 M arch 9,198 4 NBD Northw est Bank, N.A. 

Traverse City, M ichigan

First Security Bank 

Erwin, Tennessee

N M 5,584 24,004 21,777 13,767 A p ril 6 ,198 4 Bank o f Tennessee 

Kingsport, Tennessee

W atauga V alley Bank 

Elizabethton, Tennessee

N M 3,620 12,545 13,256 9,585 A p ril 6,198 4 Carter County Bank 

Elizabethton, Tennessee

The Shelby N ational Bank 

of Shelbyville 

Shelbyville, Indiana

SM 15,088 66,936 61,041 26,895 A p ril 19,1984 Am erican Fletcher N ational Bank 

and Trust Co.

Indianapolis, Indiana

Citizens Bank o f 

M onroe County 

Tellico Plains, Tennessee

N M 5,873 20,029 20,108 11,130 A p ril 27,1984 Bank o f O a k Ridge 

O a k Ridge, Tennessee

Western N ational Bank 

o f Casper 

Casper, W yom ing

N 5,132 21,450 22,626 13,293 M a y 4,198 4 W yom ing N ation al B ankofW est Casper 

Casper, W yoming

State Bank o f M ills 

M ills, W yom ing

SM 2,127 5,601 6,123 3,485 M a y 4,1 9 8 4 M ountain Plaza N ation al Bank 

Casper, W yom ing

The First N ational Bank 

o f Rushford 

R ushford,M innesota

N 5,257 21,799 20,382 15,238 M ay 4 ,198 4 G oodhue County N ation al Bank 

Red W ing, M innesota

The M ississippi Bank 

Jackson, M ississippi

N M 49,107 227,163 152,983 103,937 M a y 11,1984 G renada Bank 

G renada, M ississippi

Bledsoe County Bank 

Pikeville, Tennessee

N M 1,225 4,814 4,796 2,524 M ay 18,1984 Citizens Bank o f Dunlap 

Dunlap, Tennessee

Planters Trust & Savings 

Bank o f Opelousas 

O pelousas, Louisiana

N M 5,372 64,012 56,223 36,992 M a y 18,1984 First N ational Bank o f 

St. Landry Parish 

O pelousas, Louisiana

Bank o f Irvine 

Irvine, C aliforn ia

N M 12,609 27,445 24,623 13,409 M ay 18,1984 Security Pacific State Bank 

Irvine, C aliforn ia

W ashington N ational 

Bank o fC h ic a g o 

Chicago, Illinois

N 4,842 13,373 13,352 7,901 M ay 18,1984 Banco Popular de Puerto Rico 

San Juan, Puerto Rico

First N ational Bank 

o f Prior Lake 

Prior Lake, Minnesota

N 2,490 14,248 13,460 9,391 M ay 24,1984 First N ation al Bank o f Shakopee 

Shakopee, Minnesota

G arden G rove Com munity Bank 

G arden G rove, C aliforn ia

N M 5,206 39,398 34,062 30,044 June 1,1984 C apital Bank 

Downey, C aliforn ia

Cherokee County Bank 

Centre, Alabam a

N M 10,840 38,365 36,803 19,137 June 5,198 4 First A la ba m a Bank, N.A. 

Anniston, Alabam a

Farmers Stale Bank 

Lyons, South Dakota

N M 450 3,017 2,846 1,504 June 15,1984 D akota State Bank 

Coleman, South Dakota

The Lawrence County Bank 

Lawrenceburg, Tennessee

SM 6,800 24,093 23,400 9,417 June 15,1984 Farmers Bank o f Lawrence County 

Lawrenceburg, Tennessee

The Corning Bank 

Corning, Arkansas

N M 9,275 34,079 31,158 27,064 June 15,1984 The Corning Bank 

C orning, Arkansas

The Farmers N ational Bank 

o f A urelia 

A urelia, Iowa

N 1,324 18,899 18,316 8,126 June 21,1984 H eritage Bank, N.A. 

A ure lia , Iowa

East Texas Bank 

and Trust Com pany 

Longview, Texas

N M 19,643 90,059 77,302 58,105 June 29 ,19 84 Texas N ation al Bank 

Longview, Texas

The Coffeen N ation al Bank 

Coffeen, Illinois

N 2,714 9,372 9,571 2,590 July 12,1984 Coffeen State Bank 

Coffeen, Illinois

* Dividend advanced by FDIC.

47

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
TABLE 123. INSURED BANKS REQUIRING DISBURSEMENTS BY THE FEDERAL DEPOSIT INSURANCE CORPORATION DURING 1984

Nam e and Location

Class 

o f Bank

N um ber o f 

Depositors 

o r Accounts

Total

Assets

(000's)

Total

Deposits

(000's)

FDIC

Disbursements

(000's)

Date o f Closing, 

Deposit Assum ption, o r M erger

Receiver, Assuming Bank, 

Transferee Bank, or 

M e rging Bank

The G uaranty Bank o f

Saint Paul

St. Paul, M innesota

N M 4,890 25,718 24,744 16,071 July 19,1984 Shelard N ation al Bank 

St. Louis Park, Minnesota

C oalm ont Savings Bank 

C oalm ont, Tennessee

N M 7,716 24,439 22,947 13,178 July 24,1984 First Bank o f M a rio n County 

South Pittsburg, Tennessee

Jackson County N ation al Bank 

Tuckerman, Arkansas

N 4,192 13,318 12,988 8,489 August 9,198 4 First State Bank o f N ew port 

N ew port, Arkansas

Peoples State Bank 

o f C lav County 

Poland, Indiana

N M 4,259 11,840 12,228 8,970 August 10,1984 First State Bank 

Poland, Indiana

The Tingley State Savings 

Bank

M ount A yr, Iowa

N M 1,624 18,805 17,970 13,169 August 10,1984 H awkeye Bank and Trust 

Mount Ayr, Iowa

Am erican N ation al Bank 

in McLean 

McLean, Texas

N 2,486 14,098 13,159 8,708 August 16,1984 McLean Bank o f Commerce 

McLean, Texas

G iro d Trust Company 

San Juan, Puerto Rico

N M 6,266 398,666 263,144 177,692 August 16,1984 C itibank, N.A.

New York, N ew York

The First State Bank 

Thayer, Kansas

N M 2,585 12,025 11,085 6,820 August 22,1984 First State Bank 

Thayer Kansas

Bank o f the N orthwest 

Eugene, O regon

N M 5,761 19,212 15,384 14,054 August 31,1984 First Interstate Bank o f O rego n, N.A. 

Portland, O regon

David City Bank 

David City, N ebraska

N M 4,019 21,185 17,611 10,712 Septem ber 6,198 4 The First N ation al Bank o f O m a ha 

O m aha, N ebraska

O a kla n d Savings Bank 

O a kla n d , Iowa

N M 1,670 21,048 19,483 15,075 September 7,198 4 O akla n d State Bank 

O a kla n d , Iowa

Com m unity Bank & 

Trust Com pany 

Enid, O klaho m a

N M 4,049 28,528 22,846 19,224 Septem ber 14,1984 The First N ation al Bank and Trust 

Com pany o f Enid 

Enid, O klaho m a

Bank o f V erd ig re & 

Trust Com pany 

Verdigre, N ebraska

N M 3,496 12,957 12,587 8,955 September 19,1984 The N ation al Bank o f N eligh 

N eligh, N ebraska

Century N ational Bank 

Jacksonville, Florida

N 4,498 15,176 15,220 2,735 September 20 ,19 84 Barnett Bank o f Jacksonville, N.A. 

Jacksonville, Florida

Security State Bank 

W eatherford, O klaho m a

SM 5,321 52,236 40,876 34,972 September 21 ,19 84 United Com munity Bank 

W eatherford, O klaho m a

O rang e Savings Bank 

Livingston, N ew Jersey

N M 90,128 514,919 494,642 26,000 September 28 ,19 84 Hudson City, Savings Bank 

Paramus, N ew Jersey

The Farmers & Merchants Bank 

Tecumseh, O klahom a

N M 5,542 27,741 27,577 15,992 O cto be r 5 ,198 4 Republic Bank o f Tecumseh 

Tecumseh, O klahom a

The Rexford State Bank 

Rexford, Kansas

N M 636 5,657 5,244 3,745 O cto be r 10,1984 Peoples State Bank o f Rexford 

Rexford, Kansas

O neida Bank 

& Trust Com pany 

O neida, Tennessee

N M 2,318 5,729 4,728 4,264 O cto be r 12,1984 The Energy Bank 

O a k Ridge, Tennessee

Bucklin State Bank 

o f Bucklin 

Bucklin, M issouri

N M 4,265 13,457 13,853 9,712 O cto be r 12,1984 United M issouri Bank o f B rookfield 

B rookfield, M issouri

A m erican State Bank 

Thomas, O klahom a

N M 2,740 22,279 20,424 11,763 O cto be r 19,1984 The Bank o f Thomas 

Thomas, O klaho m a

The Bank o f Cody 

Cody, N ebraska

N M 747 10,598 9,531 10,354 O cto be r 24 ,19 84 The G uardian State Bank 

A lliance, N ebraska

Farmers State Bank 

K ilgore, N ebraska

N M 736 5,810 5,212 4,788 O cto be r 24 ,19 84 The First N ation al Bank o f Valentine 

V alentine, N ebraska

State Bank o f Boyd 

Boyd, M innesota

N M 2,213 6,837 5,783 4,297 O cto be r 24,1984 State Bank o f M adison 

M adison, M innesota

The First N ational 

Bank o f G aylord 

G aylord , Kansas

N 1,284 6,517 6,002 4,138 O cto be r 25,1984 Farmers N ation al Bank o f G aylord 

G a ylo rd , Kansas

* Dividend advanced by FDIC.

48

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
TABLE 123. INSURED BANKS REQUIRING DISBURSEMENTS BY THE FEDERAL DEPOSIT INSURANCE CORPORATION DURING 1984

Nam e and Location

Class 

o f Bank

N um ber of 

Depositors 

o r Accounts

Total

Assets

(OOO's)

Total

Deposits

(OOO's)

FDIC

Disbursements

(OOO's)

Date o f Closing, 

Deposit Assum ption, o r M erger

Receiver, Assuming Bank, 

Transferee Bank, or 

M e rging Bank

First Am erican 

Banking Com pany 

Pendleton, O regon

N M 4,574 17,873 13,503 7,018 Novem ber 16,1984 Inland Empire Bank 

Herm iston, O regon

The Strong City State Bank 

Strong City, Kansas

N M 1,017 4,394 4,320 2,798 Novem ber 29 ,19 84 Chase County Bank 

Strong City, Kansas

G olden Spike State Bank 

Tremonton, Utah

SM 1,595 7,229 6,681 3,464 Decem ber 4,1984 G olden Spike State Bank 

Trem onton, Utah

Farmers State Bank 

o f Holyoke 

Holyoke, C olorad o

N M 1,100 3,498 3,455 2,060 Decem ber 7,1984 Security N ational Bank 

Holyoke, C olorado

University Bank o f W ichita 

W ichita, Kansas

N M 2,224 5,089 4,696 1,820 Decem ber 11,1984 C harter Bank, N.A. 

W ichita, Kansas

The Farmers State Bank 

Selden, Kansas

N M 1,641 15,003 14,186 10,992 Decem ber 20,1984 Selden State Bank 

Selden, Kansas

First Security Bank 

Sandwich, Illinois

N M 2,304 9,700 10,118 2,592 Decem ber 22,1984 First N ation al Bank o f Sandwich 

Sandwich, Illinois

* Dividend advanced by FDIC.

49

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
TABLE 125. RECOVERIES AND LOSSES BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ON DISBURSEMENTS 

FOR PROTECTION OF DEPOSITORS, 1934-1984 (Amounts in Thousands of Dollars)

Liquidation 

status and 

year o f 

deposit 

pa yo ff or 

deposit 

assumption

A ll cases Deposit pa yo ff cases5 Deposit assumption cases6

N um ber

o f

banks

Disbursements

Recoveries 

to Dec. 

31,1984

Estimated

ad dition al

recoveries Losses'

N um ber

o f

banks

Disbursements2

Recoveries 

to Dec. 

31,1984

Estimated

additional

recoveries Losses'

Num ber

o f

banks

Disbursements3

Recoveries 

to Dec. 

31 ,19 84

Estimated

ad dition al

recoveries Losses'

Total . .. 747 13,330,776 6,983,704 2,804,879 3,542,193 344 1,593,947 821,875 594,499 177,573 403 11,736,829 6,161,829 2,210,380 3,364,620

Year4

1 9 3 4 .... 9 941 734 207 9 941 734 207

1 9 3 5 .... 25 9,108 6,423 2,685 24 6,026 4,274 1,752 " i 3,082 2,149 933

1 9 3 6 .... 69 15,206 12,873 2,333 42 7,735 6,397 1,338 27 7,471 6,476 995

1 9 3 7 .... 75 20,204 16,532 3,672 50 12,365 9,718 2,647 25 7,839 6,814 1,025

1 9 3 8 .... 74 34,394 31,969 2,425 50 9,092 7,908 1,184 24 25,302 24,061 1,241

1 9 3 9 .... 60 81,828 74,676 7,152 32 26,196 20,399 5,797 28 55,632 54,277 1,355

1 9 4 0 .... 43 87,899 84,103 3,796 19 4,895 4,313 582 24 83,004 79,790 3,214

1 9 4 1 .... 15 25,061 24,470 591 8 12,278 12,065 213 7 12,783 12,405 378

1 9 4 2 .... 20 11,684 10,996 688 6 1,612 1,320 292 14 10,072 9,676 396

1 9 4 3 .... 5 7,230 7,107 123 4 5,500 5,377 123 1 1,730 1,730

1 9 4 4 .... 2 1,532 1,492 40 1 404 364 40 1 1,128 1,128

1 9 4 5 .... 1 1,845 1,845 1 1,845 1,845

1 9 4 6 .... 1 274 274 1 274 274

1 9 4 7 .... 5 2,038 1,979 59 5 2,038 1,979 59

1 9 4 8 .... 3 3,150 2,509 641 3 3,150 2,509 641

1 9 4 9 .... 4 2,685 2,316 369 4 2,685 2,316 369

1 9 5 0 .... 4 4,404 3,019 1,385 4 4,404 3,019 1,385

1 9 5 1 .... 2 1,986 1,986 2 1,986 1,986

1 9 5 2 .... 3 1,525 733 792 3 1,525 733 792

1 9 5 3 .... 2 5,359 5,359 2 5,359 5,359

1 9 5 4 .... 2 1,029 771 258 2 1,029 771 258

1 9 5 5 .... 5 7,315 7,085 230 " 4 4,438 4,208 230 1 2,877 2,877

1 9 5 6 .... 2 3,499 3,286 213 1 2,795 2,582 213 1 704 704

1 9 5 7 .... 1 1,031 1,031 1 1,031 1,031

1 9 5 8 .... 4 3,051 3,023 28 3 2,796 2,768 28 " i 255 255

1 9 5 9 .... 3 1,835 1,738 97 3 1,835 1,738 97

I 9 6 0 . ... 1 4,765 4,765 1 4,765 4,765

1 9 6 1 .... 5 6,201 4,699 1,502 5 6,201 4,699 1,502

1 9 6 3 .... 2 19,172 18,886 286 2 19,172 18,886 286

1 9 6 4 .... 7 13,741 12,171 659 911 7 13,741 12,171 659 911

1 9 6 5 .... 5 11,529 7,438 198 3,893 3 10,958 7,013 198 3,747 " 2 571' 425 146

1 9 6 6 .... 7 10,020 9,541 234 245 1 735 735 6 9,285 8,806 234 245

1 9 6 7 .... 4 8,097 7,087 1,010 4 8,097 7,087 1,010

1 9 6 8 .... 3 6,476 6,464 12 3 6,476 6,464 '12

1 9 6 9 .... 9 42,053 41,892 79 82 4 7,596 7,514 82 5 34,457 34,378 79

1 9 7 0 .... 7 51,040 50,690 78 272 4 29,277 28,993 12 272 3 21,763 21,697 66

1 9 7 1 .... 6 171,431 171,207 31 193 5 53,790 53,574 23 193 1 117,641 117,633 8

1 9 7 2 .... 1 16,255 13,874 661 1,720 1 16,255 13,874 661 1,720

1 9 7 3 .... 6 434,071 352,160 16,997 64,914 3 16,782 16,771 11 " 3 417,289 335,389 16,986 64,914

1 9 7 4 .... 4 2,401,019 2,256,481 144,264 274 4 2,401,019 2,256,481 144,264 274

1 9 7 5 .... 13 327,001 282,910 25,662 18,429 " 3 25,992 25,346 622 24 10 301,009 257,564 25,040 18,405

1 9 7 6 .... 16 594,157 520,328 53,935 19,894 3 11,462 9,130 675 1,657 13 582,695 511,198 53,260 18,237

1 9 7 7 .... 6 25,388 18,705 3,843 2,840 6 25,388 18,705 3,843 2,840

1 9 7 8 .... 7 532,159 465,773 59,428 6,958 " f 818 572 88 158 6 531,341 465,201 59,340 6,800

1 9 7 9 .... 10 87,460 69,873 8,099 9,488 3 9,959 8,438 947 574 7 77,501 61,435 7,152 8,914

1 9 8 0 .... 10 145,039 96,791 19,526 28,772 3 13,868 8,299 3,333 2,236 7 131,171 88,492 16,193 26,486

1 9 8 1 .... 10 1,004,582 342,418 65,121 597,043 2 35,779 22,335 11,857 1,587 8 968,803 320,083 53,264 595,456

1 9 8 2 .... 42 2,125,077 334,753 501,694 1,288,630 7 276,725 108,347 81,848 86,530 35 1,848,352 226,406 419,846 1,202,100

1 9 8 3 .... 48 3,091,705 907,404 1,026,455 1,157,846 9 147,915 31,850 91,959 24,106 39 2,943,790 875,554 934,496 1,133,740

1 9 8 4 .... 79 1,866,225 679,065 877,915 309,245 16 784,120 346,279 401,606 36,235 63 1,082,105 332,786 476,309 273,010

'Includes estimated losses in active cases. N ot adjusted fo r interest or a llo w a b le return, which was collected in some cases in which the disbursem ent was fu lly recovered, 

in clu d e s estimated a d dition al disbursements in active cases.

E xcludes excess collections turned over to banks as ad d itio n a l purchase price at term ination o f liquidation.

4N o case in 1962 required disbursements.

s"D eposit Payoff Cases" include deposit transfers to operating banks.

‘ "D ep osit Assum ption Cases" include: a) Banks m erged w ith finan cial assistance from FDIC to prevent pro ba ble failure.

bj 1452.8 m illion o f recorded liabilities at book value payable over future years.

cl $406.2 m illion o f recorded liabilities at present value expected to be payable over future years.

a) $347.6 m illion o f disbursements fo r advances to protect assets and liquida tion expenses which had been excluded in p rio r years.

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Table 127. INCOME AND EXPENSES, FEDERAL DEPOSIT INSURANCE CORPORATION, BY YEAR, FROM BEGINNING OF OPERATIONS, SEPTEMBER 11,1933 

TO DECEMBER 1984 (in millions)

Year

Income Expenses and losses

Total

Assessment

Income

Assessment

Credits

Investment and 

other sources' Total

Deposit insurance 

losses and 

expenses

Interest on 

capital stock2

Adm inistrative 

and operating 

expenses

N et income 

added to deposit 

insurance fund3

T o ta l..................... $22,926,2 $16,825.6 $4,776.6 $12,877.2 $5,764.3 $3,881.1 $8 0.6 $1,802.6 $17,161.9

1984 ................ 3,031.9 1,321.5 67.5 1,777.9 1,299.1 1,147.9 151.2 1,732.8

1983 ................ 2,628.1 1,214.9 164.0 1,577.2 969.9 834.2 135.7 1,658.2

1982 ................ 2,524.6 1,108.9 96.2 1,511.9 999.8 869.9 129.9 1,524.8

1981 ............... 2,074.7 1,039.0 117.1 1,152.8 848.1 720.9 127.2 1,226.6

1980 ................ 1,310.4 951.9 521.1 879.6 83.6 (34.6) 118.2 1,226.8

1979 ................ 1,090.4 881.0 524.6 734.0 93.7 (13.1) 106.8 996.7

1978 ................ 952.1 810.1 443.1 585.1 148.94 45.6 103.3 803.2

1977 ................ 837.8 731.3 411.9 518.4 113.6 24.3 89.3 724.2

1976 ................ 764.9 676.1 379.6 468.4 212.3“ 31.9 180.4s 552.6

1975 ................ 689.3 641.3 362.4 410.4 97.5 29.8 67.7 591.8

1974 ................ 668.1 587.4 285.4 366.1 159.2 100.0 59.2 508.9

1973 ................ 561.0 529.4 283.4 315.0 108.2 53.8 54.4 452.8

1972 ................ 467.0 468.8 280.3 278.5 59.7 10.1 49.6 407.3

1971 ................ 415.3 417.2 241.4 239.5 60.3 13.4 46.9 355.0

1970 ................ 382.7 369.3 210.0 223.4 46.0 3.8 42.2 336.7

1969 ............... 335.8 364.2 220.2 191.8 34.5 1.0 33.5 301.3

1968 ............... 295.0 334.5 202.1 162.6 29.1 0.1 29.0 265.9

1967 ................ 263.0 303.1 182.4 142.3 27.3 2.9 24.4 235.7

1966 ................ 241.0 284.3 172.6 129.3 19.9 0.1 19.8 221.1

1965 ................ 214.6 260.5 158.3 112.4 22.9 5.2 17.7 191.7

1964 ................ 197.1 238.2 145.2 104.1 18.4 2.9 15.5 178.7

1963 ................ 181.9 220.6 136.4 97.7 15.1 0.7 14.4 166.8

1962 ................ 161.1 203.4 126.9 84.6 13.8 0.1 13.7 147.3

1961 ........... 147.3 188.9 115.5 73.9 14.8 1.6 13.2 132.5

I9 6 0 ............... 144.6 180.4 100.8 65.0 12.5 0.1 12.4 132.1

1959 ............... 136.5 178.2 99.6 57.9 12.1 0.2 11.9 124.4

1958 ................ 126.8 166.8 93.0 53.0 11.6 11.6 115.2

1957 ................ 117.3 159.3 90.2 48.2 9.7 0.1 9.6 107.6

1956 ................ 111.9 155.5 87.3 43.7 9.4 0.3 9.1 102.5

1955 ................ 105.7 151.5 85.4 39.6 9.0 0.3 8.7 96.7

1954 ................ 99.7 144.2 81.8 37.3 7.8 0.1 7.7 91.9

1953 ................ 94.2 138.7 78.5 34.0 7.3 0.1 7.2 86.9

1952 ................ 88.6 131.0 73.7 31.3 7.8 0.8 7.0 80.8

1951 ................ 83.5 124.3 70.0 29.2 6.6 6.6 76.9

1950 ............... 84.8 122.9 68.7 30.6 7.8 1.4 6.4 77.0

1949 ............... 151.1 122.7 28.4 6.4 0.3 6.1 144.7

1948 ................ 145.6 119.3 26.3 7.0 0.7 0.6 5.7 138.6

1947 ................ 157.5 114.4 43.1 9.9 0.1 4.8 5.0 147.6

1946 ................ 130.7 107.0 23.7 10.0 0.1 5.8 4.1 120.7

1945 ................ 121.0 93.7 27.3 9.4 0.1 5.8 3.5 111.6

1944 ................ 99.3 80.9 18.4 9.3 0.1 5.8 3.4 90.0

1943 ................ 86.6 70.0 16.6 9.8 0.2 5.8 3.8 76.8

1942 ................ 69.1 56.5 12.6 10.1 0.5 5.8 3.8 59.0

1941 ........... 62.0 51.4 10.6 10.1 0.6 5.8 3.7 51.9

1940 ................ 55.9 46.2 9.7 12.9 3.5 5.8 3.6 43.0

1939 ................ 51.2 40.7 10.5 16.4 7.2 5.8 3.4 34.8

1938 ................ 47.7 38.3 9.4 11.3 2.5 5.8 3.0 36.4

1937 ................ 48.2 38.8 9.4 12.2 3.7 5.8 2.7 36.0

1936 ................ 43.8 35.6 8.2 10.9 2.6 5.8 2.5 32.9

1935 ................ 20.8 11.5 9.3 11.3 2.8 5.8 2.7 9.5

1933-34 ......... 7.0 (4) 7.0 10.0 0.2 5.6 4.25 - 3 .0

1 Includes $352.3 m illion o f interest and a llo w a b le return received on funds advanced to receivership and deposit assumption cases and $398.7 m illion o f interest on capital notes advanced 

to fa cilita te deposit assumption transactions and assistance to open banks.

2Paid in 1950 and 1951, but allocated am ong years to which it applied. Initial capital o f $289 m illion was retired by payments to the U.S. Treasury in 1947 and 1948.

Assessm ents collected from members o f the tem porary insurance funds which became insured under the permanent plan were credited to their accounts at the term ination o f the 

tem porary funds and were ap plied toward payment of subsequent assessments becom ing due under the perm anent insurance funding, resulting in no income to the C orporation from 

assessments during the existence o f the tem porary insurance funds.

'Includes net loss on sales o f U.S. Governm ent securities of $105.6 m illion in 1976 and $3.6 m illion in 1978.

5N et after deducting the portion o f expenses and losses charged to banks w ithdraw ing from the tem porary insurance funds on June 30,1934.

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Federal Reserve Bank of St. Louis
Table 129. INSURED DEPOSITS AND THE DEPOSIT INSURANCE FUND. 1934-1984 (in millions)

Year 

(Decem ber 31)

Insurance

Coverage

Deposits in insured banks' Percentage of 

insured deposits

D eposit insurance 

fund

Ratio o f deposit insurance fund to —

Total Insured Total deposits Insured deposits

1984 ........................... $100,000 1,806,520 1,389,874 76.9 $17,161.9 .95 1.23

19837 .................... 5100,000 1,690,576 1,268,332 75.0 15,429.1 .91 1.22

1982 .................... $100,000 1,544,697 1,134,221 73.4 13,770.9 .89 1.21

1981 .................... 100,000 1,409,322 988,898 70.2 12,246.1 .87 1.24

1980 .................... 100,000 1,324,463 948,717 71.6 11,019.5 .83 1.16

1979 .................... 40,000 1,226,943 808,555 65.9 9,792.7 .80 1.21

1978 .................... 40,000* 1,145,835 760,706 66.4 8,796.0 .77 1.16

1977 .................... 40,0005 1,050,435 692,533 65.9 7,992.8 .76 1.15

1976 .................... 40,000 941,923 628,263 66.7 7,268.8 .77 1.16

1975 .................... 40,000 875,985 569,101 65.0 6,716.0 .77 1.18

1974 .................... 40,000 833,277 520,309 62.5 6,124.2 .73 1.18

1973 .................... 20,000 766,509 465,600 60.7 5,615.3 .73 1.21

1972 .................... 20,000 697,480 419,756 60.2 5,158.7 .74 1.23

1971 .................... 20,000 610,685 374,568 61.3 4,739.9 .78 1.27

1970 .................... 20,000 545,198 349,581 64.1 4,379.6 .80 1.25

1969 .................... 20,000 495,858 313,085 63.1 4,051.1 .82 1.29

1968 .................... 15,000 491,513 296,701 60.2 3,749.2 .76 1.26

1967 .................... 15,000 448,709 261,149 58.2 3,485.5 .78 1.33

1966 .................... 15,000 401,096 234,150 58.4 3,252.0 .81 1.39

1965 .................... 10,000 377,400 209,690 55.6 3,036.3 .80 1.45

1964 .................... 10,000 348,981 191,787 55.0 2,844.7 .82 1.48

1963 .................... 10,000 313,3042 177,381 56.6 2,667.9 .85 1.50

1962 .................... 10,000 297,5483 170,210 57.2 2,502.0 .84 1.47

1961 .................... 10,000 281,304 160,309 57.0 2,353.8 .84 1.47

1960 .................... 10,000 260,495 149,684 57.5 2,222.2 .85 1.48

1959 .................... 10,000 247,589 142,131 57.4 2,089.8 .84 1.47

1958 .................... 10,000 242,445 137,698 56.8 1,965.4 .81 1.43

1957 .................... 10,000 225,507 127,055 56.3 1,850.5 .82 1.46

1956 .................... 10,000 219,393 121,008 55.2 1,742.1 .79 1.44

1955 .................... 10,000 212,226 116,380 54.8 1,639.6 .77 1.41

1954 .................... 10,000 203,195 110,973 54.6 1,542.7 .76 1.39

1953 .................... 10,000 193,466 105,610 54.6 1,450.7 .75 1.37

1952 .................... 10,000 188,142 101,841 54.1 1,363.5 .72 1.34

1951 .................... 10,000 178,540 96,713 54.2 1,282.2 .72 1.33

1950 .................... 10,000 167,818 91,359 54.4 1,243.9 .74 1.36

1949 .................... 5,000 156,786 76,589 48.8 1,203.9 .77 1.57

1948 .................... 5,000 153,454 75,320 49.1 1,065.9 .69 1.42

1947 .................... 5,000 154,096 76,254 49.5 1,006.1 .65 1.32

1946 .................... 5,000 148,458 73,759 49.7 1,058.5 .71 1.44

1945 .................... 5,000 157,174 67,021 42.4 929.2 .59 1.39

1944 .................... 5,000 134,662 56,398 41.9 804.3 .60 1.43

1943 .................... 5,000 111,650 48,440 43.4 703.1 .63 1.45

1942 .................... 5,000 89,869 32,837 36.5 616.9 .69 1.88

1941 .................... 5,000 71,209 28,249 39.7 553.5 .78 1.96

1940 .................... 5,000 65,288 26,638 40.8 496.0 .76 1.86

1939 .................... 5,000 57,485 24,650 42.9 452.7 .79 1.84

1938 .................... 5,000 50,791 23,121 45.5 420.5 .83 1.82

1937 .................... 5,000 48,228 22,557 46.8 383.1 .79 1.70

1936 .................... 5,000 50,281 22,330 44.4 343.4 .68 1.54

1935 .................... 5,000 45,125 20,158 44.7 306.0 .68 1.52

1934 .................... 5,0004 40,060 18,075 45.1 291.7 .73 1.61

'D eposits in foreign branches are om itted from totals because they are not insured. Insured deposits are estimated by ap plying to the deposits in the various types o f accounts at the 

regular C all dates, the percentages insured as determ ined from tne Summary o f Deposits survey submitted by insured banks.

D e ce m b e r 20, 1963.

3Decem ber 28,1962.

“ Initial coverage was $2,500 from January 1 to June 30,1934.

5$100,000 fo r time and savings deposits o f in-state governm ental units provided in 1974.

6$100,000 fo r Individual Retirement accounts and Keogh accounts provided in 1978.

'Revised.

52

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INDEX

Agricultural Banks 14

Applications to the FDIC

Mergers 38

Number and types of 10

Procedures xv

Regulations governing 10

Remote Service Facilities 10, 38

Assessment Credit, 1983 and 1984 20

Automation

Bank examinations 9-10 

Liquidation activities xv, 18-19

Bank Securities Activities

Board action 2

Regulation governing 39

Supervision of 10, 11

Bankruptcy Amendments (PL 98-353) 36

Brokered Deposits

Board action 2

Failed banks 11

Limitation on deposit insurance 38

Reporting of 38

Butcher Banks 14

Capitol Ratio xvi, 2, 11, 41

Cease-and-Desist Orders 12

Chairman’s Statement xiv

Check Guarantees 41

Civil Money Penalties 12

Commemorative Stamp xiv

Commercial Bank Failures 13-15

Comprehensive Crime Control Act (PL 98-473) 36

Consolidation of Regional Offices xv, 2, 7-8

Continental Illinois National Bank

Major event of 1984 xiv

Borrowings from Federal Reserve 3

Credit line from banks 3

Permanent assistance 4-6

Run on deposits 3

Temporary FDIC assistance 3

Total insured and uninsured accounts 4

Credit Card Agreements 41

Decimus 18

Delegations of Authority 37

Deposit Brokers

Controls on xvi

Deposit insurance 11

Deposit Insurance Fund, 1983 and 1984 xiv, 19

Deposit Payoffs

During 1984 15

Number of accounts involved since 1934 16

Number of transactions since 1934 16

Deposit Transfers

Advance payments in 15

During 1984 14

Number of transfers since 1934 14

Employee Responsibilities and Conduct

Amendments to FDIC regulations 39

Enforcement Actions 12-13

Examinations

Number and types of 8

Cooperative examinations xv, 8

Examiners Detailed to Liquidation Division 8

Expenses and Losses in Closed Banks

and Mergers 19

Faces of the FDIC xvi

Fair Housing Lending Information 39

FDIC Board of Directors iv-v

FDIC Officials vii

FDIC Postage Stamp xiv

FDIC Regions and Directors viii-xi

Fiftieth Anniversary of FDIC xiv

Financial Statements of FDIC 22-32

Glass-Steagall Act 11, 39

Home Owner’s Loan Act of 1933 16

Income and Expenses of FDIC During 1984 19-20

Insured Commercial Bank Failures

Advance payments to uninsured depositors 15

Causes for failures 13-14

Deposit payoffs, 1984 15

Deposit transfers, 1984 14-15

Purchase and assumption transactions, 1984 14

Record number in 1984 13

Total assets, 1934-84 xiv

Total assets of closed banks, 1984 46

Total deposits, 1981-84 13

Total deposits since 1934 16

Total deposits of failed banks, 1984 46

International Banking Act Regulations 39

International Operations

Accounting for international loan fees 40

Allocated transfer risk reserve 40

Reporting and disclosure of international assets 40

LAMIS 18-19

Legal Division Activities

Enforcement actions, 1984 12-13

Reorganization of division 12

Legislation and Regulations, 1984 11, 36-41

Liquidation Activities, 1984 16-19

Management Official Interlocks 40

53

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Mutual Savings Bank Merger, 1984 15

Net Worth Certificates 16

Non-banking Financial Services 2, 41

Operations of FDIC, 1984 2-21

Organization Chart vi

Penn Square Bank 3, 17-18

Personnel Information 20

Problem Bank List 8

Purchase and Assumption Transactions

During 1984 14

Number of depositors involved since 1934 16

Number of transactions since 1934 16

Removals of Bank Officers 12

Risk-based Deposit Insurance Premiums xvi

Rules and Regulations 11,37-41

Statistics of Closed Banks and

Deposit Insurance 44-52

Supervisory Operations 7-10

Task Group on Regulation of financial

services xv

Termination of Insurance 13

Training xv, 10

Trust Department Supervision 10

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Federal Reserve Bank of St. Louis