Chase Manhattan Asks for an OK to Buy 2 Ohio S

Chase Manhattan Corp. said Wednesday that it has asked for permission to buy two Ohio savings and loans in what it said it hoped would be a first step toward operating commercial banks in the state.

Chase Manhattan, the nation’s third-largest bank holding company, said that it intended to acquire Mentor Savings Bank in Mentor and Federated Savings Bank in Cincinnati for $7.4 million. Chase Manhattan has assets of $86.9 billion, and the two thrifts have combined assets of about $167 million.

The two institutions are among 69 privately insured Ohio thrifts temporarily closed by Gov. Richard F. Celeste on March 15.

All of the closed S&Ls;, except Home State Savings Bank in Cincinnati, have since reopened, although 30 may offer only limited withdrawals. Citicorp has agreed to acquire Home State Savings.

Mentor reopened for full service last week, but Federated still is open only for limited withdrawals.

Arthur Ryan, executive vice president of Chase Manhattan, said applications had been filed with the Federal Reserve Board and the Federal Savings and Loan Insurance Corp. for approval to acquire the institutions.

Ryan said the Ohio superintendent of savings and loans had already certified that the proposed acquisitions qualify under state law.

Purchase agreements have been reached with the management and board of both institutions, Ryan said.

The Mentor thrift has assets of $114 million and 25,000 accounts, and Federated has assets of $53 million and about 7,300 accounts.

Ryan said Chase Manhattan intends to seek additional acquisitions in hopes that it will be allowed to combine them and operate them as a commercial bank.

Before Chase Manhattan could operate a commercial bank in Ohio, legislation would have to be enacted in that state permitting it. But Ryan said no legislation would be needed for Chase Manhattan to operate the thrifts as thrifts.

“We’re not here talking about simply two acquisitions. We believe we can help further in the state by additional acquisitions, and so we want to continue to work with the governor . . . and the Legislature in terms of getting legislation allowing us to form a commercial bank, in which case we would then combine these two institutions as well as others with a commercial banking license,” Ryan said.

Word of Chase Manhattan’s plans drew a cool response from James W. Everson, incoming vice president of the Ohio Bankers Assn.

Everson, who is president and chief executive at Citizens Savings Bank in Martins Ferry, cautioned against moving too quickly.

“In times of crisis, we (often) see wolves appearing in sheep’s clothing, and I certainly hope this is not the case,” he said. “Obviously, the New York banks are looking at this crisis as a way of reaching their objectives.”

Joseph Rusnak, president of Mentor Savings, called the acquisition an opportunity for depositors and shareholders.

“We feel that, because we will become part of the Chase organization, it will allow us to become more competitive, not only as a thrift but in a number of the commercial areas. So all in all, we feel it will be just a very, very fine marriage,” Rusnak said.

Ryan said Chase Manhattan executives and the state is continuing to discuss a package deal for acquisition of institutions with total assets of up to $700 million.

“It is within that context that we are still talking, because that was the size of the acquisition we were talking about in conjunction with a commercial banking license,” he said.