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VOLUNTEER SAVINGS BANK UNDER FEDERAL CONTROL

 VOLUNTEER SAVINGS BANK UNDER FEDERAL CONTROL
 WASHINGTON, June 5 /PRNewswire/ -- The Office of Thrift


Supervision (OTS) today placed Volunteer Savings Bank, SLA, Little Ferry, N.J., in receivership and chartered a new federal mutual institution to take its place.
 The new institution, Volunteer Federal Savings Association, will assume certain assets and liabilities under 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 Volunteer Savings' day-to-day operations. The institution 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.
 Volunteer Savings Bank 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 the ARP forced regulators to take control of the institution.
 OTS initiated the action because Volunteer was operating in an unsafe and unsound condition in that it failed to meet all three of its capital requirements, had failed to comply with the provisions of its capital plan, and has suffered losses that have depleted nearly all of its capital with no prospect of replenishment without federal assistance.
 Volunteer's condition is due primarily to former management's deficient underwriting practices, which resulted in a high level of classified loans, mainly those secured by one-to-four-family homes. Assets classified as substandard, doubtful or loss totaled $6.3 million or 12.3 percent of assets as of March 31, 1992.
 The institution had net losses of $162,000 for 1990, $297,000 for 1991 and $135,000 for the first three months of 1992.
 Despite its condition, Volunteer Savings Bank was eligible for the ARP because there was significant investor interest to acquire the institution with limited federal assistance.
 "It is with great reluctance that we seize institutions like Volunteer, which could have attracted a buyer and been resolved at less cost to the taxpayer," said OTS Director Timothy Ryan. "But lack of congressional funding for thrift resolutions has left us no choice. Unsafe and unsound institutions cannot continue to operate without some resolution plan under way."
 Volunteer Savings Bank, SLA, was a state-chartered mutual institution with a single office.
 As of March 31, 1992, Volunteer Savings Bank, SLA, reported assets of $51.2 million, liabilities of $51 million and tangible capital of $261,000, for a tangible capital-to-assets ratio of 0.51 percent.
 -0- 6/5/92
 /CONTACT: Roy Jensen, 201-413-7501, or Thomas P. Mason, 202-906-6677, both of the Office of Thrift Supervision/ CO: Volunteer Savings Bank; Office of Thrift Supervision ST: New Jersey IN: FIN SU:


KD -- DC012 -- 7460 06/05/92 12:34 EDT
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Publication:PR Newswire
Date:Jun 5, 1992
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