Sun S&L; May Recoup $4-Million Write-Off : Thrift Might Be Repaid Part of $17-Million Commercial Loan Made to San Francisco Firm
Sun Savings & Loan Assn. might be repaid $4 million it wrote off as a bad loan last summer, Sun officials said Friday.
Sun’s $4-million write-off was part of a $17.75-million commercial loan made in 1983 to Investment Mortgage International Inc. of San Francisco. The lead lender was Valley Federal Savings & Loan Assn. of Van Nuys.
J. William Oldenburg, president of Investment Mortgage Internation, told Valley Federal officials that he now intends to make payments on the loan, according to Larry J. Wiest, Sun’s chief financial officer.
No payments have yet been made, however, and Sun officials would not say how much of the amount they might recapture.
Valley Federal managing officer Robert Gibson could not be reached for comment Friday.
Sun is now “examining and evaluating our financial statements” as part of the year-end audit, expected to be completed by month’s end, said Wiest.
Sun’s third-quarter write-off of the loan resulted in a first-ever quarterly loss of $1.6 million and a 93% drop in income, to $151,000, or 13 cents per share, for the nine months ended Sept. 30.
Acting Sun Chairman William McElroy called the announcement “encouraging news” and said that, under the best possible scenario, Sun could “recover all of our investment over two or three years.”
Net Worth $12 Million
Meanwhile, Sun officials now are trying to “work out” several problem loans worth as much as $24 million that might be in default. Sun’s net worth is $12.2 million.
Sun reported $12.1 million in delinquent loans--those that are 90 days behind in payments--as of Sept. 30, 1984. But published reports have indicated that there are an additional $12 million in delinquent loans, although Wiest would not discuss the issue.
McElroy said Sun is now “trying to process the bad loans,” although he, too, would not offer exact amounts.
“I have to look at it optimistically,” McElroy said. “There is a good possibility we’ll recover most of the loans that aren’t being repaid now.”
