GREAT LAKES BANCORP ENTERS AGREEMENT WITH OTS
GREAT LAKES BANCORP ENTERS AGREEMENT WITH OTS ANN ARBOR, Mich., Nov. 1 /PRNewswire/ -- Great Lakes Bancorp
(NASDAQ-NMS: GLBC) announced that it has signed an agreement with the Office of Thrift Supervision (OTS) confirming certain parts of the bank's business plan and setting goals for capital levels and classified assets.
Great Lakes said it would: increase its level of tangible capital beyond existing regulatory requirements; set targets for the reduction of classified assets; limit commercial business and commercial real estate lending; and continue retaining as capital the cash that would normally be paid as dividends to common and preferred shareholders. Great Lakes intends to increase its tangible capital, in accordance with the agreement, to 4.0 percent of tangible assets by 1993, 4.5 percent by 1994, and 5.0 percent by 1995. Great Lakes currently has a 3.30 percent tangible-capital ratio, exceeding regulatory requirements which call for 3.0 percent by 1995. "Our internal goal has been to maintain capital in excess of the minimum requirements," said Robert J. Delonis, Great Lakes Bancorp's president and chief operating officer. "These requirements have been and are being increased over time in tandem with the increasing need within the industry for stronger capital positions." Great Lakes also said that it would reduce its classified-asset level by 1993 to less than the total of its tangible capital and loan- loss reserves. Classified assets include nonperforming loans and other loans which have some potential for increased risk in the future. Currently, classified assets amount to approximately 136 percent of tangible capital and loan-loss reserves. "Classified assets have increased over the past year or so," Delonis said, "as we have become more aggressive in identifying potential problems, and as the economy has weakened and pushed more loans into the nonperforming status. The management of credit risk is vital, and we recognize the need to maintain high standards for asset quality that ensure the continued strength of the bank." Lending for commercial real estate will be limited by Great Lakes so that the portfolio does not grow beyond current levels. Commercial business lending will be curtailed for the present time. "In developing the bank's strategic plan over the past several years, it became clear that we needed to more clearly define the company in terms of our role as a community bank," said Delonis. "As a result, we will focus our efforts on our four primary markets, and thus reduce our lending for commercial business and commercial real estate, in effect shrinking those higher-risk portfolios. Our agreement with the OTS reaffirms this direction." Cash dividends will continue to be suspended as Great Lakes continues to build tangible capital and reduce classified assets. Great Lakes has paid common stock dividends to common and preferred shareholders in place of cash for the past three quarters. The agreement culminates Great Lakes' normal annual examination by the OTS and is the result of an analysis by both parties of Great Lakes' portfolios, its strategic operating plan, and general economic conditions. With $3.1 billion in assets, Great Lakes Bancorp is Michigan's second-largest savings bank. Great Lakes has branches throughout Michigan, with primary concentrations in Ann Arbor, Battle Creek, and Saginaw. In addition, a division of Great Lakes, Dollar Federal Savings Bank, has a significant presence in Hamilton, Ohio. Great Lakes also operates Great Lakes Mortgage Co., a mortgage banking subsidiary. -0- 11/1/91 /CONTACT: James S. Patterson of Great Lakes Bancorp, 313-769-8300, Ext. 4116/ (GLBC) CO: Great Lakes Bancorp ST: Michigan IN: FIN SU: JG -- DE016 -- 0369 11/01/91 16:19 EST
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|Date:||Nov 1, 1991|
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