REGULATORS TAKE CONTROL OF SECURITY FEDERAL, FLA.
REGULATORS TAKE CONTROL OF SECURITY FEDERAL, FLA. WASHINGTON, Jan. 31 /PRNewswire/ -- The Office of Thrift
Supervision (OTS) today placed Security Federal Savings Bank of Florida, Panama City, Fla., in receivership and chartered a new federal mutual institution to take its place.
The new institution, Security Federal Savings Association, will assume certain assets and liabilities of the old thrift, and will operate in conservatorship under the management of the Resolution Trust Corporation. The takeover did not result in any interruption of Security's day-to-day operations. The institutions and its seven branches 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 Security was operating in an unsafe and unsound condition in that it had insufficient capital, with no prospect of replenishment without federal assistance. Security's condition is due primarily to a high level of non-earning assets, deficient underwriting and the poor economy. The institution has a substantial amount of repossessed real estate and problem loans. In July 1990, Security filed suit in federal court against OTS contending the agency breached a 1987 agreement that allowed the thrift to count deferred loan losses as part of regulatory capital. A subsequent court order prohibited the agency from enforcing any regulatory capital requirements inconsistent with the 1987 agreement. When given credit for the deferred loan losses, the institution still falls short of its tangible, core and risk-based capital requirements. When goodwill is credited as well, the institution fails its core and risk-based capital requirements. Asset deterioration and the build-up of loss reserves have contributed to Security's lack of profitability. Net losses were $1.5 million in 1990 and $2.2 million in 1991. Security Federal Savings Bank of Florida was a federally chartered stock institution. Shareholders will retain no interest in the new thrift. As of Dec. 31, 1991, Security Federal Savings Bank of Florida reported assets of $107.1 million, liabilities of $104.3 million and tangible capital, including deferred loan losses, of $987,000, for a tangible capital-to-assets ratio of 0.92 percent. -0- 1/31/92 /CONTACT: Paulette Odum, 404-888-8549, or Marc Adams, 202-906-6677, both of Office of Thrift Supervision/ CO: Office of Thrift Supervision; Security Federal Savings Bank of Florida ST: Florida IN: FIN SU:
MK-TW -- DC028 -- 5754 01/31/92 16:06 EST
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|Date:||Jan 31, 1992|
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