Escondido-Based Carver Closed at Cost of $58 Million

The Federal Home Loan Bank Board on Friday closed insolvent Carver Savings & Loan, an Escondido-based institution that reported a negative net worth of nearly $10 million Sept. 30.

Federal regulators, who transferred Carver’s insured deposits to two other California institutions, estimated Friday that the transaction would cost the FHLBB about $58 million. Regulators did not known how many deposits exceeded limits of the Federal Savings & Loan Insurance Corp., which covers accounts of up to $100,000.

Los Angeles-based California Federal Savings & Loan Assn. has acquired deposits originated through Carver’s Escondido office. The branch will be open for business under the California Federal name Monday morning, according to Dave Barr, a spokesman for the FSLIC.

Irvine-based New West Federal Savings & Loan Assn. has acquired deposits originated by Carver’s San Diego-based money desk operation, which “sold brokered jumbo certificates of deposit by telephone,” Barr said.

Carver had assets of $276 million and liabilities of $292 million Nov. 30, Barr said. The failed institution’s regulatory capital fell to a negative $16.2 million. Carver reported total deposits of $281.2 million Nov. 30.

Carver, formerly Escondido Savings, was purchased by Leroy Carver, a Newport Beach businessman, in 1985. However, federal and state regulators pressured him to leave the S&L; during 1988. He since has filed suit in Orange County against two former executives at the S&L.;

The S&L;’s recent losses were in part generated by an imbalance between interest rates Carver was paying to depositors and interest rates it charged on loans to customers.

“On Sept. 30, 56% of its deposits were paying interest rates of 8.31%, but (most of) its adjustable-rate loans carried interest rates of 8.13%,” Barr said.

Carver is the third troubled thrift to be resolved by the FSLIC this year. Last year, regulators handled 205 troubled thrifts through liquidation, merger or acquisition, and 18 others were stabilized.