S&L; Office OKs Capital Reforms at Union Federal : Thrift: Proposal is designed to bring savings bank into compliance with federal requirements during 1994.
UnionFed Financial Corp., parent of ailing Union Federal Savings Bank, said Tuesday that the Office of Thrift Supervision has approved a revised plan to bring the S&L; into compliance with federal capital requirements during 1994.
A UnionFed spokesman said the plan calls for the thrift, with $2.2 billion in assets, to limit its lending activities to mortgage loans on one- to four-unit residential properties and to curtail commercial and construction lending.
UnionFed also agreed to reduce its assets until the ratio of capital to assets meets federal requirements.
The thrift has also agreed to meet interim capital targets during the life of the plan. The UnionFed spokesman did not provide examples, and an OTS spokeswoman declined to comment on the agreement.
UnionFed in August reported a $64.7-million loss, equal to $8.68 a share, for its fiscal year ended June 30. The 27-branch thrift said continued weakness in the nation’s real estate markets forced it to set aside huge reserves to cover actual and potential losses on its real estate investments, particularly in Southern California, Maine and Florida.
The UnionFed spokesman said the new capital plan does not require any changes in the management of the thrift or the holding company and does not require the sale of any of the thrift’s branch offices. UnionFed has 530 employees, most of whom work for its thrift subsidiary.
UnionFed Financial Chairman David S. Engelman said the parent company and the thrift are speeding up the liquidation of real estate assets, particularly those held by the now-moribund Unical Financial Corp. home-building subsidiary.
Separately, UnionFed said Tuesday that John R. (Jack) Wise, chairman of Oakmont Mortgage Co., has been named a director of the holding company and the thrift.
Wise was president and chief executive of Weyerhaeuser Mortgage Co. until he left to form Oakmont. He was chairman, president and chief executive of Republic Federal Savings when it was acquired by Weyerhaeuser Mortgage in 1985.