Depositors Take Funds Out of Failed Thrift
The usually quiet home branch of Assured Thrift & Loan was busy Monday as a steady stream of depositors began collecting their money from the nation’s first banking institution to fail this year.
Federal regulators closed the small thrift and loan Friday evening, shortly after the expiration of a temporary court order that had blocked the seizure for more than two weeks.
More than 2,000 account holders with $51.5 million in deposits have until Friday to go to Assured’s San Juan Capistrano office or Rowland Heights branch for refunds from the Federal Deposit Insurance Corp. After this week, refunds will be handled through the mail.
The FDIC, which insures deposits up to $100,000 per account holder, will liquidate Assured.
At the start of the refund process Monday, the thrift and loan had 112 accounts containing a total of $1.15 million in deposits that exceeded the insured amount, said Carl Ryan, the FDIC executive managing the payout.
The amount of uninsured deposits could drop dramatically, he said, as depositors come in to explain why they are entitled to more than the insured amount. Those with uninsured deposits will share proportionately with the FDIC in proceeds from the liquidation.
The state Department of Corporations, which regulates thrift and loans, declared Assured insolvent on Friday. The thrift and loan had tried to block the takeover by obtaining an Orange County Superior Court order Dec. 13 that temporarily restrained regulators. But a Superior Court judge lifted the order at 4 p.m. Friday, and regulators moved in within the hour.
Assured was the only thrift and loan based in South County. A thrift and loan is a cross between a bank and a finance company, traditionally lending to those who can’t qualify for loans from banks. It is regulated by the state agency and inspected also by the FDIC.
Assured’s assets jumped from $40 million at the end of 1988 to $70.2 million at the end of 1990, when its problems became evident. It had been growing in part by buying automobile and equipment leases, which turned sour.
Assured’s loan-loss reserves leaped from $455,000 at the end of 1989 to $1.55 million at the end of 1990. The leasing portfolio had been a sore point among directors and officers and eventually led to the dismissal early last year of Assured’s president, Edward Latscha.
Since then, Ryan said, a consultant hired by directors had been managing the institution.
Continued Losses wiped out Assured’s capital. Assets fell to $56.1 million at the time of its seizure.
