Strategic Objective 4.1
Receiverships are managed to maximize net return and terminated in an orderly and timely manner.

Annual Performance Goal 4.1-1
Value, manage and market assets of failed institutions and their subsidiaries in a timely manner to maximize net return.

Indicator and Target

1. Percentage of failed institution’s assets marketed
• 90 percent of the book value of a failed institution’s marketable assets is marketed within 90 days of the failure date.

2. Enhancements to contract management program
   • Identify and implement program improvements to ensure efficient and effective management of the contract resources used to perform receivership management functions.

Means and Strategies

Operational Processes (initiatives and strategies):
By quickly returning private assets to the private sector, the FDIC maximizes net recoveries and minimizes disruption to the local community. The FDIC expedites the return of the assets of the failed institution to the private sector by marketing most assets soon after an insured institution fails. Given adequate time, the FDIC prepares an information package and an asset valuation review for each failing insured depository institution to assist in the solicitation of bidders, analysis of bids received for the assumption of deposits and sale of assets at resolution or shortly thereafter. For asset sales, the failed institution’s assets are grouped into pools that will be most appealing to acquirers and are then marketed via the Internet. Potential asset purchasers are allowed the opportunity to view all sales information electronically prior to electronic bid submission. The FDIC also complements electronic due diligence with hard-copy due diligence by allowing potential bidders to view all hard-copy sale information at the actual sales site.

After the resolution of the failed institution, the FDIC collects and manages the remaining assets in a cost-effective manner to maximize recoveries and preserve value until the assets can be marketed. The FDIC will continue to update and refine its marketing strategies in order to market assets as quickly and efficiently as possible.

Where appropriate, the FDIC will manage and dispose of most of the remaining assets from the failed bank location. The FDIC uses the Standard Asset Valuation Estimation (SAVE) methodology to value and make marketing and disposition decisions regarding most of the assets of the failed institution. The SAVE methodology uses standard assumptions and market information to ensure consistency in valuing assets. The valuation process, methodology and assumptions used to value assets are continually reviewed and, where necessary, updated.

The FDIC makes extensive use of contractors in managing and selling the assets of failed institutions. It has in place broad policies and procedures related to contracting and the use of contractors to provide services. These policies include every phase of the contracting process. Individual FDIC divisions and offices must apply these guidelines and establish controls and internal processes to ensure that these policies and procedures are being strictly followed.

Human Resources (staffing and training):
The FDIC maintains a permanent staffing platform to carry out its receivership management functions. When workload increases, these resources are adjusted by the adding of non-permanent staff and the use of contractor resources. On an interim basis, these resources may also be expanded by the deployment of cross-trained employees from elsewhere within the receivership management workload. Current and projected workload is continually assessed to ensure that adequate staff and contractor resources are available to fulfill the FDIC’s receivership management responsibilities.

Authorized staffing for the FDIC’s Division of Resolutions and Receiverships has been increased dramatically to address the recent increase in workload, from 223 at the beginning of 2008 to 847 currently. Additional staff has also been authorized in other FDIC organizations to support this work.

There has also been a significant increase in the deployment of contractor resources to support the receivership management function. In order to ensure that these resources are effectively managed, the FDIC has added a substantial number of dedicated contract oversight and management positions to its workforce. These additional staff will oversee the development and implementation of internal operational procedures to ensure the contracting function is being managed properly. Training is being provided, as necessary, to ensure that FDIC staff is educated about contracting policies and procedures and their oversight management responsibilities.

Information Technology:
The FDIC will continue to use new and refined technology to make its asset management/servicing, sale strategies and other business processes more efficient and to keep pace with changing market and business practices. The Corporation will continue to use the Internet to deliver asset marketing information to potential investors and to auction/sell assets received from failed institutions. The FDIC will also use its 4-C system for asset management reporting and data reconciliation.

Verification and Validation
Asset-marketing information is compiled from the actual sale initiatives that are offered by the FDIC to bidders prior to and/or within 90 days of failure.

The offerings are compared to the beginning inventory of marketable assets prepared by the FDIC at the time of the institution’s failure.

In addition, new requirements for contract reporting on a monthly and quarterly basis will be established to ensure that the Corporation is managing its contracts effectively.

2008 Performance Results
This annual performance goal and performance indicator and target #1 are unchanged from 2008. Performance indicator and target #2 are new for 2009, reflecting the planned expansion in the use of contractor resources for receivership management. The FDIC successfully met the 2008 performance target for this goal.

Annual Performance Goal 4.1-2
Manage the receivership estate and its subsidiaries toward an orderly termination.

Indicator and Target

1. Timely termination of new receiverships
• Terminate at least 75 percent of new receiverships within three years of the date of failure.

Means and Strategies

Operational Processes (initiatives and strategies):
The oversight and prompt termination of a receivership preserves value for the uninsured depositors and other receivership claimants by reducing overhead and other holding costs. When the FDIC is appointed as receiver, a unique action plan is established for each receivership. That plan is executed by various asset, liability, finance, and legal staff assigned to the receivership. Receivership staff oversee and monitor the execution of each action plan, including goals and milestones. In addition, an oversight committee, consisting of senior FDIC managers, meets periodically to review and evaluate the quarterly progress on each receivership action plan.

To be eligible for termination, a receivership must be free of impediments that represent material financial or legal risks to the FDIC. These impediments may include outstanding contractual liabilities, outstanding offensive or defensive litigation, potential representation and warranty asset sale claims, open employee benefit plans, open subsidiary corporations where articles of dissolution have not yet been approved, and known or potential environmental contamination liabilities. Once the FDIC has disposed of all of the assets of the receivership, resolved all liabilities, and ensured that no material financial or legal risks to the FDIC remain, a final distribution is made to the creditors of the receivership and the receivership entity is terminated. To the extent that significant, unresolved impediments remain for a substantial number of receiverships, the FDIC may be unable to achieve this goal.

The FDIC continues to work on the resolution of impediments to the termination of its remaining open receiverships. During 2008, 25 new receiverships were added to the FDIC’s inventory of receiverships and 11 were inactivated, leaving a total of 49 active receiverships at the end of 2008.

Human Resources (staffing and training):
The FDIC has substantially increased its authorized staffing for the receivership management function over the past year. Workload and staffing requirements are assessed on an ongoing basis to ensure that the FDIC has enough staff to successfully carry out its receivership management responsibilities. As noted earlier, the FDIC utilizes contractor resources and engages in temporary hiring initiatives to supplement resolutions and receivership management staff as workload increases.

Information Technology:
Existing technology will be used to accomplish this goal. No new technology or automated tools will be developed in support of this goal in 2009.

Verification and Validation
The process of inactivating a receivership is tracked in FDIC systems. Monthly reports of deactivations are reviewed for accuracy. System users validate the data, and any discrepancies are reconciled. Results are reported through established management processes.

2008 Performance Results
This annual performance goal and its associated performance indicator are unchanged from 2008. The performance target has been revised to be consistent with the performance target used in prior years, when the FDIC was managing a large number of receiverships. The FDIC successfully met the 2008 performance targets for this goal.

Strategic Objective 4.2
Potential recoveries, including claims against professionals, are investigated and resolved in a fair and cost-effective manner.

Annual Performance Goal 4.2-1
Conduct investigations into all potential professional liability claim areas for all failed insured depository institutions, and decide as promptly as possible to close or pursue each claim, considering the size and complexity of the institution.

Indicator and Target

1. Percentage of investigated claim areas for which a decision has been made to close or pursue the claim
• For 80 percent of all claim areas, a decision is made to close or pursue claims within 18 months of the failure date.

Means and Strategies

Operational Processes (initiatives and strategies):
The FDIC investigates potential claims against professionals (e.g., directors, officers, attorneys and others) whose actions may have contributed to losses at the failed institution and assesses the viability of insurance policies and the carriers that provide fidelity insurance to the failed institution. Once the investigation is complete, the FDIC determines whether it has viable, cost-effective claims and whether it should pursue such claims. Most professional liability investigations must be completed and viable claims filed within a three-year statute of limitations period.

The FDIC's attorneys and investigators work together to ensure that valid claims arising from the failure of an insured institution are fully evaluated within the prescribed time period. The team conducts a factual investigation of the events that contributed to losses at the institution as well as legal research and analysis of potential claims. The team prepares additional analysis to determine the likelihood of a recovery exceeding the estimated cost of pursuing each claim. The team then prepares a memorandum, reviewed and approved by senior FDIC management, recommending that a claim be pursued or that an investigation be closed.

Human Resources (staffing and training):
Dedicated staff in the Division of Resolutions and Receiverships and the Legal Division are responsible for the investigations and pursuit of professional liability claims. Workload requirements are regularly reassessed to ensure that staffing is sufficient to fulfill these responsibilities. The FDIC utilizes contractor resources (including outside legal counsel) and engages in temporary hiring initiatives to supplement staff, as needed.

Information Technology:
Data necessary to track failure dates of insured institutions, potential statutes of limitation expiration dates and other pertinent dates are routinely collected and stored in FDIC systems. Status information and decision events are also tracked.

Verification and Validation
Periodic data scrubs and audits are conducted to ensure accuracy and currency of information from FDIC systems. Consistent maintenance of these systems ensures that accurate data needed to measure compliance with the annual goal are readily available. Progress in meeting this goal is reported through established management processes.

2008 Performance Results
This annual performance goal and its associated performance indicator and target are unchanged from 2008. The FDIC successfully met this performance target for this goal for the one receivership that reached the 18-month mark during 2008.