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FEDERAL REGULATORS ORDER RECEIVERSHIP FOR VIRGINIA THRIFT; DEPOSITS INSURED

 FEDERAL REGULATORS ORDER RECEIVERSHIP FOR VIRGINIA THRIFT;
 DEPOSITS INSURED
 WASHINGTON, April 10 /PRNewswire/ -- The Office of Thrift Supervision (OTS) today placed Federal Savings Bank of Virginia, Falls Church, Va., in receivership and chartered a new federal mutual institution to take its place.
 The new institution, Federal Savings Association of Virginia, 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 Federal Savings' day-to-day operations. The institution 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 Federal Savings has incurred, and was likely to continue to incur, losses that will deplete its capital, with no reasonable prospect of replenishment without federal assistance.
 Federal Savings' condition is due primarily to losses on speculative, poorly underwritten mortgage loans, commercial and consumer lines of credit and consumer loans originated by prior management, generating a high level of non-performing assets. As of Dec. 31, 1991, assets of $4.3 million, or 14.2 percent of total assets, were classified as substandard, doubtful or loss.
 High operating expenses and the establishment of loss reserves against bad assets have eroded capital consistently since 1990. Moreover, the institution is unable to generate operating income.
 Federal Savings recorded a net loss of $1.6 million in 1991. The institution had been operating under regulatory restrictions.
 Federal Savings Bank of Virginia was a federally chartered stock institution. Shareholders will retain no interest in the new thrift.
 As of Dec. 31, 1991, Federal Savings Bank of Virginia reported assets of $30.22 million, liabilities of $30.1 million and tangible capital of $127,604, for a tangible capital-to-assets ratio of 0.2 percent.
 -0- 4/10/92
 /CONTACT: Paulette Odum, 404-888-8549, or Marc Adams, 202-906-6677, both of the Office of Thrift Supervision/ CO: Office of Thrift Supervision; Federal Savings Bank of Virginia ST: Virginia IN: FIN SU:


SB -- DC024 -- 7263 04/10/92 13:28 EDT
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Publication:PR Newswire
Date:Apr 10, 1992
Words:366
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