In an effort to dramatically cut its costs, a savings bank in the New York suburbs has slashed its work force by about 35%.
River Bank America, with $1.5 billion of assets, planned to take a $1.1 million charge for severance pay in the quarter ended Sept. 30.
The staffing cuts are part of an overall downsizing program at the New Rochelle-based bank, which has been struggling for six years under the weight of heavy losses and an extremely high level of nonperforming assets.
Officials said 140 people had left the bank - through attrition, voluntary resignations, and layoffs.
According to a press release, the staffing cuts affected all areas of the bank.
Officials expect to save more than $4 million per year in reduced salaries and benefits, not counting the one-time charge for severance, the release said.
Bank officials declined to comment.
River Bank has been the object of intense scrutiny by regulators for several years.
Nonperforming assets rose from $152.5 million at the end of 1989 to a high of $575.4 million, or 28.8% of all assets at the end of 1992.
And since 1989, the bank has sustained losses of $147 million. That includes an $11.8 million loss for the quarter ended June 30, 1995, when regulators forced the writedown of $9.8 million in foreclosed real estate despite bank officials' protests about the valuation of some properties.
The bank has been operating under a cease-and-desist order from the Federal Deposit Insurance Corp. and the state since 1991, requiring it to cut its nonperforming assets and raise its capital.
River Bank's Tier 1 leverage capital ratio was 6.04% at June 30, placing it in compliance with the regulatory order.
The bank had reduced bad assets to $286.1 million, or 19.5% of total assets, at June 30. But it has also reduced its total assets during the past few years as it seeks to get back into the black. Two years ago, it sold four Westchester County branches to National Westminster Bancorp for $18 million.
The bank still operates 11 branches, most of them in New York City and on Long Island.
