Corona del Mar Businessman Hears Enticing Words About Buying S&Ls; : BANKING/FINANCE
Corona del Mar businessman Ernest George heard encouraging words at a government-sponsored conference to entice investors to buy troubled savings and loans.
George, who owns a thrift and loan in Newport Beach and a controlling interest in a bank in Laguna Beach, is starting to negotiate with the Federal Home Loan Bank Board about the possible purchase of a small, insolvent savings institution in Los Angeles County.
The bank board, which oversees S&Ls;, told more than 350 potential investors at a meeting in San Francisco last week that troubled S&Ls; can be good investments. Agency officials explained how they could help to sweeten a deal with funds and notes from the bank board’s insurance unit, the Federal Savings and Loan Insurance Corp.
George said the session gave him more insight into what regulators look for in negotiations with new investors. The information will help him, he said, with a bid he made recently to buy an S&L; in Los Angeles County, which he wouldn’t identify.
The only insolvent S&Ls; operated by regulators in Los Angeles County are Unified Savings Bank in Northridge, Westwood Savings in Los Angeles and Manhattan Beach Savings.
George said he wants to merge his North American Thrift & Loan in Newport Beach into the insolvent S&La; and get out of the thrift business.
His thrift is one of the few in the state that still insure their deposits with the Thrift Guaranty Fund. State law requires that by July 1, 1990, all thrifts must insure their deposits through the Federal Deposit Insurance Corp.
George, who calls the requirement “a travesty,” said he wants out of the thrift business before the 1990 deadline because FDIC examiners are holding thrifts to the same standards that banks must meet. Those standards would halt the thrifts’ traditional activity of making riskier loans to those who can’t get bank loans.
George also has a 53% stake in First American Capital Bank in Laguna Beach, which has lost ore than $3 million since it opened in 1981. Though it has yet to post an annual profit, it did report a a modest profit of $36,000 for the first quarter.
