Regulators Shutting Down Golden State Bank

Federal thrift regulators decided Friday to close Golden State Bank after unsuccessfully trying to sell the tiny savings and loan they seized last August.

The Resolution Trust Corp., the federal agency that liquidates failed thrifts, said it will begin today to refund the insured portions of $3.6 million that depositors have in 200 accounts at the Irvine thrift. Checks will be mailed directly to depositors.

About 35% of that amount is uninsured, which means that depositors will share over time in the proceeds from the sale of the thrift’s $46.7 million in loans and other assets.

The failure is expected to cost taxpayers $1.7 million.

When the thrift opened in Newport Beach in 1984, it was called Westmark Savings Bank. It became Sherman Oaks Savings Bank in late 1987, and its new owners eventually moved it there with ambitious plans for increasing the thrift’s size tenfold to at least $300 million in assets.

But the thrift never made an annual profit again.

It got caught up in financial woes and bankruptcy actions involving its primary shareholder, Stanley I. Glickman. After he left, the S&L; moved to Irvine in 1992 and changed its name again, but it never was able to reopen a branch in Orange County.