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OTS PLACES WARRENTON, VA., THRIFT IN RECEIVERSHIP; DEPOSITS ARE PROTECTED

 OTS PLACES WARRENTON, VA., THRIFT IN RECEIVERSHIP;
 DEPOSITS ARE PROTECTED
 WASHINGTON, July 17 /PRNewswire/ -- The Office of Thrift Supervision (OTS) today placed Liberty Savings Bank, Warrenton, Va., in receivership and chartered a new federal mutual institution to take its place.
 The new institution, Liberty 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 Liberty's day-to-day operations. The institution and its branch office 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 Liberty was operating in an unsafe and unsound condition in that it had insufficient capital, with no prospect of replenishment without federal assistance.
 Liberty's condition is due primarily to a high level of poor- quality assets and severe loan losses resulting from speculative lending practices. The thrift had an overcontention of poorly underwritten, high-risk construction and land loans, many of which were originated in over-built areas.
 As of March 31, 1992, Liberty reported delinquent loans and repossessed assets of $24.3 million, or 24 percent of total assets. Deterioration of the real estate market in the Washington metropolitan area also contributed to the poor performance of Liberty's loan portfolio.
 Liberty Savings Bank reported net losses of $5.6 million for 1991, and a net loss of $1.9 million for the first quarter of 1992. Liberty is insolvent in that its assets exceed its liabilities.
 Liberty Savings Bank was a state-chartered stock institution. Shareholders will retain no interest in the new thrift.
 As of March 31, 1992, Liberty Savings Bank reported assets of $103.3 million, liabilities of $104.1 million and negative tangible capital of $1.34 million, for a tangible capital-to-tangible assets ratio of negative 1.31 percent.
 -0- 7/17/92
 /CONTACT: Paulette Odum, 404-888-8549, or Janis Smith, 202-906-6677, both of the Office of Thrift Supervision/ CO: Office of Thrift Supervision; Liberty Savings Bank ST: District of Columbia, Virginia IN: FIN SU:


TW -- DC018 -- 0272 07/17/92 13:13 EDT
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Publication:PR Newswire
Date:Jul 17, 1992
Words:380
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