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UNDERWRITING DIVISION

INSURANCE SETTLEMENT & REHABILITATION DIVISION

Insurance Settlement

Supervises the payment and settlement of insurance to insured shareholders of institutions in receivership.

Develops programs for insurance of accounts; passes upon all applications for insurance of accounts, and proposals relating to mergers, consolidations, purchases of assets, changes in capital structure, etcetera, which involve the question of insurance risk; coordinates underwriting activities with officials of Federal Home Loan Banks and State Supervisory authorities.

Rehabilitation

Responsible for taking necessary steps as provided by
law to prevent a default in an insured institution or restore
an insured institution in default to normal operation. Su-
pervises recoveries and conversion into cash of assets in
institutions for which the Corporation has been appointed
receiver.

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Provides analyses of financial and other operating information pertaining to the administrative and supervisory problems of the Corporation and the Federal Home Loan Bank System; compiles and analyzes statistical series in thrift, home mortgage, housing and real estate activities; provides economic background and other data bearing upon problem cases of the Corporation.

Plans, organizes and directs accounting and fiscal ac• tivities of the Corporation. Controls all accounting operations including liquidation of assets and insurance settlement and prepares financial statements, reports and analyses. Controls all operations pertaining to the receipt and disbursement of funds of the Corporation. Responsible for preparation of annual budget submission and control of administrative expenses.

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May borrow from the Treasury up to $750 million for insurance purposes if such funds are required in the judgment of the Federal Home Loan Bank Board.

May assess additional premiums against insured institutions to cover all losses and expenses of the Corporation.

Determines admission fees to be charged to newly insured associations.

Prescribes manner in which regular insurance premiums shall be paid.

Regulates areas in which insured institutions may make loans.

Approves issuance by insured associations of securities having a definite return or maturity period.

Regulates sales plans and development of reserves of insured associations.

To prevent default, the Corporation may make loans or contributions to, or purchase the assets of an insured association.

Acts as conservator or receiver of any Federal savings and loan association in default upon appointment by the Federal Home Loan Bank Board.

May serve as conservator or receiver of any other insured institution in default if requested to do so by the authority with the power of appointment.

As conservator or receiver, the Corporation may operate the insured association in default, take action to put it in a sound condition, merge it with another institution, or organize a new association.

Statement of condition, June 30, 1955

ASSETS
Cash.--
Accounts receivable..
Investments
Accrued interest on investments...
Insured accounts, pending and unclaimed.
Deferred charges -
Other assets.

$1, 365, 578

5, 625, 785 240, 647, 091

695, 512 6, 445

851 157

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2

Insured associations:

Number

Assets
Federal

1, 656

2 18, 500, 000, 000 State -

1, 816

2 13, 000, 000, 000 Total.

3, 472

2 31, 500, 000, 000 Insured share liability.

26, 100, 000, 000 Number of private investors

2 14, 800, 000 Reserves and undivided profits of insured institutions.

2 2,050, 000, 000 Average size insured institution -

29, 073, 000 1 Capital stock outstanding $66,779,000 less provision for retirement of $11,932,000. 2 Preliminary estimates. NOTE.-The value of unused annual leave to the credit of employees amounts to $81,935.52.

Income and expense statement, 12 months ending June 30, 1955

INCOME

Insurance premiums.
Admission fees.
Interest on investments -
Profit, sale of securities_
Miscellaneous

$19, 020, 899

54, 234 5, 376, 830 200, 000

842

Total.

24, 652, 805

EXPENSES

Administrative
Liquidation and other
Services rendered by HLBB.
Depreciation.-

459, 454

358 323, 056

6, 905

Total..

789, 773

Net income before payment of return on capital stock.
Return on capital stock in lieu of dividends.-

23, 863, 032

757, 241

Net income

23, 105, 791

Percent of total 77. 4 22. 6

Source of income:

Premiums and fees..

Interest and miscellaneous.-
Application of income:

Expenses -
Return on capital stock.
Legal reserve--

3. 2 3. 1 93. 7

Cumulative income and expense, June 27, 1934, to June 30, 1955

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210, 523, 805

595

Net income before adjustment..
Adjustment provision for losses -

Net income before payment of return on capital..
Return on capital stock.-

Legal reserve.

210, 523, 210 39, 797, 110

170, 726, 100

Percent to total 61. 5 36. 6

1.9

Source of income:

Premiums and fees..
Interest.

Other.
Application of income:

Expenses.
Insurance losses (net).
Return on capital stock.

Legal reserve
1 Classified as administrative expenses prior to June 30, 1951.

4. 2 2. 3 17. 7 75. 8

Insurance loss record to June 30, 1955
Associations referred to Corporation.
Associations not needing assistance.

43 6

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Number investors protected by

Contributions..
Receiverships.
Purchase of assets.

55, 037
7, 705
2, 685

Total...

65, 427

Associations' assets at date of trouble:

Contribution cases.-
Receivership cases.
Purchase of assets.

$57, 216, 079

9, 209, 815 4, 683, 635

Total..

71, 109, 529

Insurance losses:

Contributions disbursed.
Provision for contributions.
Recoveries...

5, 374, 125

16, 500 496, 064

Net contributions..
Losses on subrogated accounts.

4, 894, 561

309, 547

Total..
Less gains on assets purchased.

5, 204, 108

43, 334

Net insurance losses.

5, 160, 774

Percent of losses to associations' assets: 1

Contribution cases.
Receivership cases..

Purchase of assets.
I Not including cost of money.

8. 6
3.4
0

Trends June 30, 1946, to June 30, 1955

June 30

Adminis

trative
personnel

Insured
institu-
tions

Potential
liability
(billions)

June 30

Adminis

trative
personnel

Insured
institu-
tions

Potential
liability
(billions)

1946 1947 1948. 1949. 1950.

96 83 63 79 71

2, 490 2, 529 2, 566 2, 691 2, 799

5.7 6.7 7.8 8.9 10.5

1951 1952. 1953 1954. 1955.

69 68 68 67 68

2, 944 3,097 3, 230 3, 370 3, 472

13.1 15.6 18.9 22. 7 27.0

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