Two S&Ls; Sold at Cost to Taxpayers of $30.4 Million

Federal regulators have sold two small Orange County savings and loans in separate actions that will cost taxpayers a combined $30.4 million.

The Resolution Trust Corp., which manages and liquidates failed thrifts, said it sold Malibu Savings Bank in Costa Mesa and Beach Savings Bank in Fountain Valley. It had been operating both since regulators seized them a week apart in January.

Malibu’s three offices opened Monday as branches of Los Angeles-based Brentwood Bank, while Beach’s two branches opened as offices of Long Beach-based Queen City Bank. Deposits remain federally insured up to $100,000 per account-holder.

Brentwood paid $500,000 late Friday for Malibu and its $118.1 million in deposits. Only $30 million of those deposits is considered stable, core accounts--money put in by local residents who aren’t likely to remove their deposits quickly. The rest consists of large accounts that are expected to be moved to financial institutions elsewhere in the nation paying higher interest.

Brentwood’s was one of only three bids for Malibu. The bank also purchased $112.4 million of Malibu’s $128.3 million in assets, but the RTC said the bank has “liberal” options to return most of those assets to the agency without penalty.

Malibu’s bailout is expected to cost taxpayers $25.2 million.

At the same time Friday, Queen City Bank paid $135,000 for Beach and its $73 million in deposits, of which $39.7 million is considered core deposits. Queen City was the only bidder for Beach.

The bank also purchased $24.9 million of Beach’s $74.2 million in assets, with liberal options to return $7.8 million of those assets. Beach’s failure is expected to cost taxpayers $5.2 million.

Regulators declared Malibu insolvent and seized it Jan. 11.