WASHINGTON - Saving the industry $4.4 billion in annual expenses, the government on Tuesday cut the rate most banks pay for deposit insurance by 83%.

Nearly 9,800 banks holding 95% of the industry's assets will pay a new, lower rate of 4 cents for every $100 of domestic deposits.

BankAmerica Corp. is expected to benefit most from the reduction, shaving its annual deposit insurance bill by $208 million, according to Ely & Co., a consulting firm in Alexandria, Va.

Savings will top $100 million a year at three other banking companies: NationsBank Corp., Chemical Banking Corp., and Banc One Corp., according to Ely.

At the other end of the spectrum, the rate cut should add $150,000 to the bottom line of a $100 million bank.

The average bank premium will be 4.4 cents. Rates range will range from 4 cents up to 31 cents, for the riskiest banks. Only 26 banks will pay the top rate.

The new rates will kick in Sept. 30, when the Federal Deposit Insurance Corp. collects payments for fourth-quarter coverage. Because banks have been paying more than necessary since spring, the FDIC also announced plans to refund nearly $2.5 billion in premiums.

Thrifts, however, will continue paying 23 cents for every $100 of domestic deposits, the FDIC said.

Banks and thrifts will pay different rates for the government's backing because the Bank Insurance Fund reached its congressionally mandated reserve target early in the second quarter but the Savings Association Insurance Fund is years away from building up adequate reserves.

The bankers who lead the industry trade groups were elated by the news - but said the FDIC could have lowered rates even further.

"Lower premiums will enhance the competitiveness of the industry and give a boost to the economy," said Richard L. Mount, president of the Independent Bankers Association of America.

"It's been a long train ride, and the ticket wasn't cheap," said American Bankers Association president Howard L. McMillan, referring to the nearly $22 billion banks have paid into their insurance fund since 1991, when rates were jacked up to 23 cents.

Mr. McMillan noted, however, that in January, when the FDIC proposed the 4-cent premium, it was predicting twice as many bank failures.

"If expected losses are cut in half, clearly there is less need for premium income," he said.

The FDIC concedes that on June 30 the Bank Insurance Fund's reserves topped the 1.25% reserve ratio required by Congress. In fact, the agency is predicting that by yearend the fund could hold $1.36 for every $100 of insured deposits.

The difference - 11 basis points - amounts to $1.6 billion in extra premiums.

"Frankly, that $1.6 billion could do a lot more good if, rather than sitting in a government fund in Washington, it were put to work in banks' communities," said Mr. McMillan, who is president of Deposit Guaranty National Bank in Jackson, Miss.

Industry experts speculated Tuesday that the FDIC is padding insurance premiums in case Congress requires banks to pay most of the interest due each year on bonds sold to begin the thrift industry bailout in 1987.

The FDIC is backing legislation that would require banks to pay about $600 million annually through the year 2019 on the Financing Corp. bonds. A premium of 2.5 cents would cover the annual payments.

"I do think Fico is built in," said Kenneth A. Guenther, IBAA's executive vice president. "Without the Fico it could have been 2 cents."

During the agency's open meeting Tuesday, FDIC Director Andrew C. Hove Jr. tried to persuade his colleagues to reduce the premium below 4 cents.

Comptroller of the Currency Eugene A. Ludwig sympathized with Mr. Hove, noting that "After all it's somebody else's money." But he voted for the 4- cent rate, noting the FDIC has the power to change rates every six months.

Echoing the agency staff's justification for 4 cents, FDIC Chairman Ricki Helfer said the rate must reflect the agency's historical losses.

The FDIC will meet in mid-October to decide what rate banks will be charged for the first half of 1996. "As circumstances change, the board will make further adjustments - to raise or lower premiums - as appropriate," Ms. Helfer said.

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