What’s in Name? Unwarranted Woes, If You Ask Lincoln Bancorp
Being confused with his near-namesake, Charles H. Keating Jr., has only paid off once for John J. Keating.
That was about five years ago when John Keating, president and chief executive officer of Lincoln Bancorp, the Encino-based holding company for Lincoln National Bank, was visiting Scottsdale, Ariz., home territory of the other Keating, chairman of the parent company of Irvine-based Lincoln Savings & Loan.
At a restaurant, John Keating was mistaken for a relative of the Arizona businessman. “My wife and I were treated incredibly well,” Keating recalled. Then the restaurant staff discovered its mistake and service returned to normal.
Recently, however, public confusion of the executives and their institutions has been a problem, especially since April 14, when federal regulators seized the S&L.;
The Federal Home Loan Bank Board alleged that the S&L; had been run in an unsafe manner and that its assets had been “substantially dissipated.” Regulators said the S&L; “has repeatedly violated regulations relating to transactions with affiliates, used poor underwriting and has refused to follow supervisory directives.”
Lincoln National’s John Keating said that since the seizure of the S&L;, his bank has received 10 to 15 calls from shareholders who thought that the Lincoln S&L; scandal involved the company in which they had invested.
John Keating said the geographical distribution of investors in Lincoln Bancorp was probably saving the company from more troublesome confusion. “The fortunate thing is that most of our shareholders are out of state and obviously they’re not reading the local press,” he said.
In contrast to the S&L;, 7-year-old Lincoln National Bank has been enjoying good times recently.
About a week before the S&L; was seized, Lincoln National Bank’s holding company reported record earnings for the first quarter of 1989. The bank said it earned $1.4 million for the quarter that ended March 31, up from $616,500 for the first quarter of 1988.
The bank also reported that its net worth, or total assets minus total liabilities, equaled a healthy 6.58% of its total assets.
Meanwhile, the coincidence of similar names has even caused John Keating’s family some difficulties. His daughter, who recently graduated from Chaminade College Preparatory, “went into school one day and some girl came up and said, ‘My grandfather is suing your father.’ “It hasn’t been fun, that’s for sure,” John Keating said.
Since Charles Keating’s Phoenix-based American Continental Corp. acquired Lincoln Savings & Loan in early 1984, he involved the S&L;, which had previously focused on home loans, in risky real estate investments.
After federal regulators had been examining the S&L;’s operations for three years, American Continental filed for bankruptcy protection. Several regulators said they thought that the filing was intended to prevent federal officials from seizing some American Continental assets.
The Times reported last week that Charles Keating, his companies and about 75 relatives, associates and employees contributed more than $700,000 to the campaigns of three dozen state and federal politicians over six years in what critics described as an effort to influence officials.
