!C O R R E C T I O N -- OTS and PIONEER SAVINGS!
In NY078 -- Office of Thrift Supervision places Pioneer Savings in receivership -- moved on Friday, April 2, the eighth graf should begin "The Pioneer Savings & Loan Association was a state-chartered stock institution wholly owned by Pioneer Financial Corp. (PFC), a unitary holding company" sted of "...wholly owned by Pioneer Financial Corp. (NASDAQ-NMS: PION) (PFC), a unitary holding company" as originally transmitted. The Pioneer Financial Corp. referred to in the release is privately held and the company name should not be followed by a stock symbol. The complete corrected release is repeated below. REGULATORS TAKE CONTROL OF PIONEER SAVINGS, KANSAS WASHINGTON, April 2 /PRNewswire/ -- The Office of Thrift Supervision (OTS) today placed The Pioneer Savings & Loan Association, Prairie Village, Kan., in receivership and chartered a new federal mutual institution to take its place. The new institution, The Pioneer Federal Savings and Loan 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 receivership did not result in any interruption of Pioneer's day-to-day operations. The institution and its three branches, located in Lawrence, Junction City and McPherson, Kan., 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 Pioneer was critically undercapitalized, having tangible equity of less than 2 percent of assets, with no reasonable prospect of becoming adequately capitalized without federal assistance. Pioneer's condition is due primarily to an over-concentration of high-risk, poorly underwritten land, multifamily and commercial real estate loans, comprising 96 percent of the institution's portfolio. As of Dec. 31, 1992, assets of $48.7 million, or 36.5 percent of total assets, were classified as substandard, doubtful or loss. The large volume of non-performing assets left the institution over- exposed to credit and interest rate risk, while the establishment of loss reserves against bad assets diminished the thrift's ability to generate earnings. Operations also were impaired by poor internal controls. Pioneer reported net losses of $10.6 million for the fourth quarter of 1992 and $9.05 million for the calendar year. The institution had been operating under regulatory growth and lending restrictions. In September 1992, federal bank and thrift regulators announced that Kansas banker Leopold Greif agreed to resign as chairman of Pioneer and four Kansas commercial banks in response to allegations of improper lending practices. Greif was banned from the thrift and banking industries for life, and agreed to reimburse Pioneer and the commercial banks nearly $3 million. Greif entered the settlement without admitting or denying the allegations. The payments have been made. The Pioneer Savings & Loan Association was a state-chartered stock institution wholly owned by Pioneer Financial Corp. (PFC), a unitary holding company. PFC is wholly owned by Greif, who will retain no financial interest in the new thrift. As of Dec. 31, 1992, The Pioneer Savings & Loan Association reported assets of $133.6 million, liabilities of $131 million and tangible equity of $2.5 million, for a tangible equity-to-tangible assets ratio of 1.9 percent. -0- 4/5/93 /CONTACT: Cindy Williams, 913-339-5009, or Marc Adams, 202-906-7362, both of the Office of Thrift Supervision/
CO: Office of Thrift Supervision ST: District of Columbia IN: FIN SU:
GK -- NY001B -- 2947 04/05/93 10:37 EDT
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|Date:||Apr 5, 1993|
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