OTS DISAPPROVES PIONEER SAVINGS BANK'S CAPITAL PLAN
OTS DISAPPROVES PIONEER SAVINGS BANK'S CAPITAL PLAN ROCKY MOUNT, N.C., June 12 /PRNewswire/ -- Pioneer Bancorp, Inc.
(NASDAQ: PSBN), headquartered in Rocky Mount, N.C., reported today that the Office of Thrift Supervision ("OTS") has disapproved Pioneer Savings Bank's capital plan. As previously announced, the Bank filed an updated capital plan in November 1991 which set forth the Bank's plans to achieve full capital compliance not later than December 31, 1994 as required by 1989 federal legislation.
Denial of the capital plan appears to be attributable to the results of a just completed examination of the Bank by federal and state regulators. Examiners have requested that the Bank establish additional loan loss reserves, writedowns and other adjustments which would reduce the Bank's capital levels, previously reported as $11.5 million at March 31, 1992, to $7.2 million, representing a regulatory capital to assets ratio of approximately 1.7 percent. Pioneer President Ed Roughton stated, "We fundamentally disagree with the conclusions reached by the examiners relating to the need for additional loan loss reserves and writedowns, which in many respects are directly contrary to their findings in an examination conducted only six months ago. It is our view that the exceptional progress realized by the Bank over the past year in restructuring troubled debt and reducing nonearning assets, as well as increasing the Bank's capital ratios, warranted approval of the capital plan. We recognize that as a result of the examiners' conclusions and OTS denial of the capital plan, present governmental policy authorizes seizure of the Bank by the regulators even though the Bank has a positive capital position. Notwithstanding the difficult circumstances facing the Bank, its Board of Directors intends to explore all available options, including a possible appeal of the examination findings or a possible merger or sale of the Company." The OTS has further requested that the Bank execute a consent agreement. Under the consent agreement proposed by the OTS, Pioneer Savings Bank would be subject to extensive operating restrictions. In addition, the agreement would authorize the OTS to negotiate a plan of merger, consolidation, transfer of assets or acquisition of, or capital infusion for the Bank and the Bank would consent to the appointment of a conservator or receiver. The Bank cannot at this time predict the exact from that the agreement will take or whether a conservator or receiver would be appointed. In the event of an appointment of a receiver, any remaining equity interest of current stockholders would likely be eliminated. Pioneer Savings Bank currently operates through 19 retail banking offices throughout eastern North Carolina. Deposits in the Bank are insured by the Federal Deposit Insurance Corporation up to the applicable $100,000 limit. -0- 6/12/92 /CONTACT: Ed Roughton or Bill Wall, both of Pioneer Savings Bank, 919-446-0611/ (PSNB) CO: Pioneer Bancorp, Inc. ST: North Carolina IN: FIN SU: RCN
DF -- CH003 -- 9568 06/12/92 09:37 EDT
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|Date:||Jun 12, 1992|
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