Avondale depositors tell OTS their views at hearing on merger.

The Office of Thrift Supervision listened to oral arguments late Thursday against the proposed merger-conversion of Chicago's Avondale Federal Savings Bank.

In the closed session, depositors in the $503 million-asset mutual thrift argued that they stood to earn bigger profits from an earlier conversion plan.

Executives of Avondale and proposed merger partner Central Resource Group, Des Moines, Iowa, Moines, argued that the new plan, a merger conversion, is in the depositors best interests.

OTS has up to 90 days after an application is deemed complete to render a decision, said William Fulwider a spokesman with the thrift agency. At the earliest, Avondale's application will be complete after the hearing and could require additional information at that time, he said.

Although OTS is "bending over backward" to hear depositors complaints, it's unlikely that the agency will derail Avondale's plans, said Timothy Matz, a senior partner with the Washington, D.C., law firm of Elias, Matz, Tiernen & Herrick.

"This company has followed all the rules and regulations of the law," Mr. Matz said. "I don't see how OTS could want to change that."

Regardless of the Avondale outcome, many healthy thrifts probably will avoid the controversy of merger-conversions, he said.

In August, Avondale said it was switching from a standard stock conversion it had announced in June to a merger-conversion with CRG, an insurance and financial-services company that owns $938 million-asset Midland Savings Bank, Iowa's largest thrift.

Depositors denounced the turnabout, saying they would have benefited from a run-up in the price of Avondale's stock had it gone public alone.

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