Printer Friendly

STANDARD FEDERAL SAVINGS UNDER GOVERNMENT CONTROL

 STANDARD FEDERAL SAVINGS UNDER GOVERNMENT CONTROL
 WASHINGTON, Oct. 21 /PRNewswire/ -- The Office of Thrift


Supervision (OTS) today placed Standard Federal Savings Bank, Gaithersburg, Md., in receivership and chartered a new federal mutual institution, to take its place.
 The new institution, Standard 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 Standard Federal's day-to-day operations. The institution and its 18 branches, located in Montgomery, Prince George's, Anne Arundel and Baltimore counties, Md., 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 Standard Federal was operating in an unsafe and unsound condition in that it had insufficient capital.
 Standard Federal's condition is due primarily to a consistent inability to generate enough earnings to meet all of its regulatory capital requirements and, more recently, to a sharp decline in the value of its purchased mortgage servicing portfolio. The institution announced today that it has consented to the appointment of a receiver.
 The effect of lackluster earnings was compounded in 1989 by a federal law that substantially reduced the amount of purchased mortgage servicing rights that could be included in the calculation of regulatory capital. Mortgage servicing -- collecting mortgage payments and servicing mortgage loans for other lenders for a fee -- had been a core business for Standard Federal, the nation's largest thrift mortgage servicer with $36 billion in mortgage loans as of June 30, 1992.
 Falling market interest rates did further damage as homeowners rapidly refinanced mortgages to take advantage of lower rates, eroding the value of the thrift's servicing rights. The institution has failed its core and risk-based capital requirements for the past two years despite earnings of $5.6 million in 1990 and $12.4 million in 1991. The thrift reported a net loss of $3 million for the first six months of 1992. As of June 30, criticized assets were $459.1 million, or 25.2 percent of total assets. Standard Federal had been operating under regulatory growth restrictions since 1989.
 Standard Federal Savings Bank was a federally chartered stock institution. Shareholders will retain no interest in the new thrift.
 As of June 30, 1992, Standard Federal Savings Bank reported assets of $1.83 billion and liabilities of $1.78 billion. As of the same date, Standard Federal expects to report tangible capital of $22.6 million, for a tangible capital-to-tangible assets ratio of 1.24 percent.
 Further, Standard Federal has disclosed that it expects that material declines in the fair market value of its purchased mortgage servicing rights have occurred since June 30 and may result in a regulatory capital deficit as of Sept. 30, 1992.
 -0- 10/21/92
 /CONTACT: Paulette Odum, 404-888-8549, or Marc Adams, 202-906-6677, both of the Office of Thrift Supervision/ CO: Office of Thrift Supervision; Standard Federal Savings Bank ST: District of Columbia, Maryland IN: FIN SU:


DC -- DC026 -- 3061 10/21/92 15:55 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 21, 1992
Words:536
Previous Article:AMETEK ACHIEVES INCREASED THIRD QUARTER SALES AND EARNINGS
Next Article:NEW HANOVER COUNTY TEACHER'S COURT BATTLE SETTLED


Related Articles
STANDARD FEDERAL'S RICKETTS ELECTED TO U.S. LEAGUE BOARD
STATEMENT BY WESTFED HOLDINGS OVER THE SEIZURE OF WESTERN FEDERAL SAVINGS AND LOAN
Gore announces progress toward changing the culture of government.
S&P Rates BFL Funding I, LLC $53M Notes 'A'.
LAUNCHES DEPARTMENT OF DEFENSE-SPONSORED MARKETPLACE FEATURING DEEPLY DISCOUNTED ELECTRONIC INSTRUMENTS.
S&P Rates BFL Funding Trust Certificates 'A'.
United States Department of Energy Recognizes VendingMiser(R) Benefits.
Trane Invited to Help Reduce Energy Consumption by $90M at U.S. Department of Energy Sites around the Country.
U.S. Navy to Save $33 Million in Energy Costs While Increasing Use of Renewable Energy Sources at Dam Neck Annex.

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