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FEDERAL REGULATORS TAKE CONTROL OF FIRST HOME SAVINGS, PITTSBURGH

FEDERAL REGULATORS TAKE CONTROL OF FIRST HOME SAVINGS, PITTSBURGH
 WASHINGTON, June 19 /PRNewswire/ -- The Office of Thrift Supervision (OTS) today placed First Home Savings Association, Pittsburgh, in receivership and chartered a new federal mutual institution to take its place.
 The new institution, First Home Federal Savings Association, will assume certain assets and liabilities of the old thrift and operate in conservatorship under the management of the Resolution Trust Corporation.
 The takeover did not result in any interruption of First Home's day-to-day operations. The institution and its nine 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.
 First Home was being marketed through the government's Accelerated Resolution Program (ARP), designed to sell certain troubled or insolvent thrifts without subjecting them to a lengthy and more costly federal conservatorship. However, lack of congressional funding for RTC resolutions forced regulators to take control of the institution.
 OTS initiated the action because First Home was operating in an unsafe and unsound condition in that it had insufficient capital, with no known prospect of replenishment without federal assistance.
 First Home's condition is due primarily to losses on poorly underwritten commercial real estate and business loans originated by former management. As or March 31, 1992, assets of $5.56 million, or 4.2 percent of total assets, were classified as substandard, doubtful or loss.
 The institution had net losses of $759,000 in 1990 and $1.3 million in 1991. A gain on the sale of assets produced net income of $90,000 for the first three months of 1992. However, asset deterioration has steadily eroded capital. The thrift is unable to generate enough earnings to meet all of its regulatory capital requirements. First Home had been operating under regulatory restrictions since 1990.
 Despite its condition, First Home was eligible for the ARP because current management had brought operations under control and because several investors had expressed interest in purchasing the institution. Due to lack of congressional funding, no acquisition could take place.
 As of March 31, 1992, First Home Savings Association reported assets of $131.7 million, liabilities of $130.1 million and tangible capital of $1.6 million, for a tangible capital-to-tangible assets ratio of 1.18 percent.
 -0- 6/19/92
 /CONTACT: William Eayre, 412-338-2578, or Marc Adams, 202-906-6677, both of the Office of Thrift Supervision/ CO: Office of Thrift Supervision; First Home Savings Association ST: Pennsylvania IN: FIN SU:


MH -- DC026 -- 2059 06/19/92 16:26 EDT
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Publication:PR Newswire
Date:Jun 19, 1992
Words:441
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