Printer Friendly

GOVERNMENT TAKES CONTROL OF PIEDMONT FEDERAL SAVINGS

 GOVERNMENT TAKES CONTROL OF PIEDMONT FEDERAL SAVINGS
 WASHINGTON, Oct. 9 /PRNewswire/ -- The Office of Thrift


Supervision (OTS) today placed Piedmont Federal Savings Bank, Manassas, Va., in receivership and chartered a new federal mutual institution to take its place.
 The new institution, Piedmont 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 receivership did not result in any interruption of Piedmont's day-to-day operations. The institution and its six branches, located in Manassas, Woodbridge and Drumfries, Va., 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 Piedmont was operating in an unsafe and unsound condition in that it had insufficient capital, with no reasonable prospect of replenishment without federal assistance.
 Piedmont's condition is due primarily to an excessive level of non-performing assets. As of June 30, 1992, assets of $95 million, or 19.4 percent of total assets, consisted of delinquent loans and repossessed real estate.
 Asset deterioration at Piedmont is the consequence of a concentration of high-risk land and commercial real estate loans originated under former senior management in the late 1980s. Losses on the loans, which were funded largely by high-cost brokered deposits, required the establishment substantial loss reserves.
 Net losses were $11.4 million in 1990 and $13.8 million in 1991. Piedmont posted earnings of $1.2 million for the first six months of 1990, reflecting one-time gains from loan sales. The institution had been operating under regulatory lending restrictions since February 1991. Piedmont failed its core and risk-based capital requirements and consented to the appointment of a receiver.
 Piedmont Federal Savings Bank was a federally chartered stock institution. Shareholders will retain no interest in the new thrift.
 As of June 30, 1992, Piedmont Federal Savings Bank reported assets of $491.1 million and liabilities of $480.5 million. After recording additional loss reserves directed by OTS, Piedmont's tangible and core capital levels are less than 1 percent of assets.
 -0- 10/9/92
 /CONTACT: Paulette Odum, 404-888-8549, or Marc Adams, 202-906-6677, both of the Office of Thrift Supervision/ CO: Office of Thrift Supervision; Piedmont Federal Savings
 Association ST: Virginia, District of Columbia IN: FIN SU:


IH -- DC008 -- 8324 10/09/92 11:47 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 9, 1992
Words:414
Previous Article:HOUSEHOLD BANK, FSB $200 MILLION SUBORDINATED DEBT SHELF RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --
Next Article:SCRIPT SYSTEMS, INC. SIGNS MAJOR COMMUNITY CLINIC CONTRACT
Topics:


Related Articles
F. CROWDER FALLS ELECTED TO BOARD OF CK FEDERAL SAVINGS BANK
CK FEDERAL SAVINGS BANK REPORTS EARNINGS
REPUBLIC NATIONAL BANK ANNOUNCES OPENING OF BANKING OFFICE IN BENNETTSVILLE AND DIVESTITURE OF PIEDMONT, S.C. OFFICE TO CAROLINA FIRST
/C O R R E C T I O N -- OFFICE OF THRIFT SUPERVISION/
CHARTER FEDERAL ANNOUNCES RIGHTS OFFERING
CHARTER FEDERAL ANNOUNCES EFFECTIVENESS AND RECORD DATE FOR RIGHTS OFFERING
CRESTAR ACQUIRES DEPOSITS FROM RTC AS RECEIVER FOR PIEDMONT FEDERAL SAVINGS ASSOCIATION

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters