Thrift Regulators Seize Huntington S

Huntington Savings & Loan, apparently unable to recover adequately from losses in the mid-1980s, was seized by federal thrift regulators late Friday afternoon.

The Huntington Beach-based thrift was put into receivership by the Office of Thrift Supervision, and its assets were transferred to a newly chartered mutual thrift called Huntington Federal Savings.

Huntington Federal will reopen Monday for business as usual in a conservatorship managed by the Resolution Trust Corp., a federal agency created in August to operate failed banks and thrifts.

Huntington Savings is the first Orange County thrift to be seized by regulators this year and the 15th county-based thrift taken over since 1985.

According to the the Office of Thrift Supervision, the S&L; was operating in an unsound manner, had nearly run out of capital by the end of November, had no prospects for getting new capital and had a very high-risk portfolio of assets.

In a press release announcing the takeover, the Resolution Trust Corp. said the S&L; had about $125.9 million in assets at the end of September and $124.7 million in 7,170 deposit accounts. Deposits at two branches in the city also continue to be federally insured up to $100,000 per account.

Although the thrift has long been low on capital, it has posted modest earnings for the last five years. At the end of September, it had only $109,000 in basic capital, its final insurance against losses. Under a federal law enacted in August, though, regulators can seize an institution before its capital runs out.

Huntington Savings is not affiliated with Huntington National Bank, which is also in Huntington Beach, said Kirk Bashore, Huntington National’s president.

Huntington Savings opened in July, 1981, with $2 million in capital. Its growth was rapid and it prospered until June, 1984, when it reported a loss of $600,000.

In an effort to recoup the loss, Huntington began aggressively trading futures contracts, a risky business that led to additional losses of about $3.2 million.

The thrift also ran into problems with a routine securities investment portfolio it created in January, 1984.

Although the securities portfolio was supposed to be limited to $32 million, a former controller exceeded his authority and quickly invested $72 million and failed to keep proper records. The portfolio lost $852,000 that year.

The takeover ends the S&L;’s long search for capital.

Robert C. Terry, the S&L;’s chairman who has tried to find a buyer or investor for several years, could not be reached for comment.

At least five prospective suitors in the last seven years took Huntington Savings down the aisle but failed to go through with the marriage. Terry said last year that the S&L; would no longer seek a merger partner but would instead try to raise the $3 million to $6 million it needed to regain its health.

HUNTINGTON SAVINGS & LOAN AT A GLANCE

Huntington Savings & Loan opened in July, 1981, in Huntington Beach. It has two branches, both in the city. It has about 500 shareholders.

1989 1988 1987 1986 (9 mos.) Assets (millions) $125.9 118.9 101.9 110.6 Net Income (thousands) 268 283 407 483 Capital/Asset Ratio 0.43% 0.45% 0.25% 0.27% Repossessed Assets/ 6.4% 2.89% 4.46% 4.59%

Assets Ratio

Sources: Federal Home Loan Bank Board, Washington, and Sheshunoff Information Services Inc., Austin, Tex.