New Board at Southern California S&L; : U.S. Regulators Seize Beverly Hills Thrift
Federal savings and loan regulators took control of Beverly Hills-based Southern California Savings & Loan Assn. late Friday, saying that it is “insolvent.”
Regulators said the savings and loan will remain open for business with a new five-person board of directors and a new management team from Great American First Savings Bank of San Diego.
Southern California Savings has nearly $1.5 billion in assets, making it among the 35 largest in California, and 31 branch offices statewide.
Fourteen of those offices are usually open for business on Saturdays and will be this morning, according to a spokeswoman for the Federal Home Loan Bank Board, the nation’s principal regulatory agency for S&Ls.;
At the end of last year, Southern California Savings had $1.26 billion in savings accounts, according to figures from the Federal Home Loan Bank of San Francisco.
Series of Problems
All accounts are insured up to $100,000.
Southern California Savings has been buffeted by a series of problems in recent years, including a move last year by the Federal Home Loan Bank Board to put the S&L;'s stock in escrow because of $13.2 million in questionable asset swaps.
The S&L;'s stock was controlled by New York financier Charles Atkins.
Securities Groups, a series of tax shelter and investment partnerships owned by Atkins, acquired Southern California Savings in December, 1982, for $27 million from New York-based City Investing Co.
According to the Home Loan Bank Board spokeswoman, Southern California Savings’ problems were caused by “poor loan underwriting policies and procedures that have resulted in substantial losses over the past year.”
More Aggressive Stance
The S&L;'s new board of directors is headed by George H. Haley, a real estate developer from Orange County who is a former chief lending officer for the Bank of America.
The seizure is another sign that savings and loan regulators are taking a more aggressive stance toward financially insolvent S&Ls.;
The bank board seized Beverly Hills Savings in April and last month installed a new board of directors and management team at Central Savings & Loan Assn. in San Diego.
Both of those institutions were insolvent, meaning that their libilities exceeded their assets.
The bank board Friday also closed two small S&Ls; in Tennessee--one in Knoxville and one in Nashville.
Southern California Savings had a regulatory net worth of 0.25% at the end of 1984, but it fell into insolvency this year, regulators said.
The bank board said it has issued promissory notes to give the S&L; a positive net worth.