U.S. Regulators Seize ‘Unsafe’ Guardian S

Federal thrift regulators seized the once fast-growing Guardian Savings & Loan on Friday, saying that its remaining $6.8 million in capital was inadequate and that it left the S&L; in an “unsafe and unsound” condition.

The Office of Thrift Supervision, the federal agency that ordered the takeover, placed the Huntington Beach thrift in conservatorship and appointed the Resolution Trust Corp., the agency that manages and liquidates failed thrifts, as conservator.

The institution, its 18 lending offices and four branches will continue to operate as usual, and its $565 million in deposits will continue to be insured up to $100,000 per account holder.

Guardian is the fourth Orange County thrift to be seized this year and the 23rd county S&L; to be taken over since the horde of industry failures began in the early 1980s.

The action against the still-solvent but troubled thrift came as a mild surprise.

The state’s most recent top S&L; regulators--William J. Crawford and William D. Davis--took over Guardian’s management earlier this year and had high hopes of returning it to financial health.

The S&L; posted a $3.1-million profit for the first quarter, which followed last year’s $3-million loss and the regulators’ ouster in January of Russell M. Jedinak as chairman, president and chief executive. Jedinak is also the thrift’s sole owner.

The Office of Thrift Supervision, though, said that Guardian lost $690,000 in April. The takeover was based primarily on a $12.6-million devaluation that the agency ordered on Guardian’s headquarters, a 14-story office building at Beach Boulevard and Warner Avenue.

The writedown was taken out of the thrift’s $19.4 million in capital, reducing its final reserve against losses to only 1% of its $682 million in assets. That ratio is well below the 3% level that all thrifts must have on July 1. The Office of Thrift Supervision said Guardian had no prospect of acquiring more capital.

Regulators said it also took action because Guardian had substantial losses on commercial real estate lending, substantial non-performing assets, an ineffective board of directors, excessive executive compensation and unsafe and unsound underwriting, policies and procedures.

Kevin Shields, a Resolution Trust Corp. spokesman, said the Office of Thrift Supervision claims were aimed at the seven-year regime of Jedinak and his wife, Rebecca, and “absolutely not” at Crawford and Davis.