FDIC: Goldome to Cost Bank Fund $930 Million
The Federal Deposit Insurance Corp. estimated Friday that its takeover of Goldome will ultimately cost the Bank Insurance Fund $930 million, an amount the agency said has already been reflected in its 1990 budgets.
It added that the cost may rise another 10% after buyers of Goldome's assets and deposits return unwanted assets to the FDIC over a period of three years.
The FDIC was named receiver for the $11.4 billion-asset Buffalo-based thrift on Friday. It simultaneously awarded most of Goldome's New York State branches to subsidiaries of Albany-based KeyCorp and Buffalo-based First Empire State Corp.
Mortgage Subsidiary to KeyCorp
KeyCorp subsidiaries purchased $7.6 billion of loans and other assets, including Goldome Realty Credit Corp., a mortgage banking subsidiary with about $3 billion of assets and $14 billion in servicing rights. At the time of its seizure by New York State banking authorities, Goldome had $5.4 billion of deposits.
Goldome's $1.4 billion-asset Florida subsidiary was not part of the transaction. The St. Petersburg-based Goldome Savings Bank was placed in conservatorship by the Office of Thrift Supervision under the control of the Resolution Trust Corp.
The FDIC estimated that its initial outlay in its biggest thrift seizure to date will be $2.3 billion. The total represents the $500 million excess of liabilities over assets, the $1.4 billion book value of certain Goldome lending subsidiaries, and $400 million of classified loans that are not being purchased by KeyCorp or First Empire.
Most of the New York branches were to reopen Saturday under control of their new owners.