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GOLDEN STATE BANK PUT UNDER FEDERAL CONTROL

 WASHINGTON, Aug. 13 /PRNewswire/ -- The Office of Thrift Supervision (OTS) today placed Golden State Bank, F.S.B., Irvine, Calif., in receivership and chartered a new federal mutual institution to take its place.
 The new institution, Golden State Federal Savings Bank, will assume certain assets and liabilities of the old thrift and will operate in conservatorship under the management of the Resolution Trust Corporation.
 The receivership did not result in any interruption of Golden State's day-to-day operations. The institution and its one branch will remain open for business as usual. Holders of insured accounts are not affected by the action, which was taken by OTS to protect insured depositors and the interests of the thrift insurance fund. Deposits remain insured to the $100,000 legal limit.
 OTS initiated the action because Golden State Bank was significantly undercapitalized, with no prospect of replenishment without federal assistance. The institution has failed its core and risk-based capital requirements during the fourth quarter of 1992 and has posted losses in each year since 1988 and for the first six months of 1993.
 Golden State's condition is due to excessive general and administrative expenses, an inadequate net interest margin, high levels of classified assets, inadequate capitalization and excessive interest rate risk.
 On June 30, 1993, the institution reported classified assets totaling $4 million, or 7.9 percent of total assets. Over 30 percent of Golden State's assets are in non-residential and multi-family mortgage loans. The high risk component of the loan portfolio, combined with poor local economic conditions, contributed significantly to the thrift's asset difficulties.
 Golden State Bank was a federally chartered stock institution. Shareholders will retain no interest in the new thrift.
 As of June 30, 1993, Golden State Bank reported assets of $50.6 million, liabilities of $48.8 million and tangible capital of $1.1 million, for a tangible capital-to-assets ratio of 2.9 percent.
 -0- 8/13/93
 /CONTACT: Laurie Lavaroni, 415-616-1556, or Thomas P. Mason, 202-906-6688, both of the Office of Thrift Supervision/


CO: Office of Thrift Supervision; Golden State Bank, F.S.B. ST: California, District of Columbia IN: FIN SU:

DC-TW -- DC026 -- 2761 08/13/93 18:16 EDT
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Publication:PR Newswire
Date:Aug 13, 1993
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