Bank Investors on Budget Turn to Thrift Charters

Despite uncertainty over the charter, a pair of federal thrifts are germinating in Baltimore as investors seek a cheaper way to start a financial institution.

Last month the Office of Thrift supervision approved a charter for AmericasBank in east Baltimore. Community First Federal Savings Bank, which is being formed in nearby Pikesville, is seeking the same.

Though there has been a boomlet of commercial bank formations in the last two years, thrift formations have been rare.

Some 85 commercial banks chartered last year alone, and 99 the year before. Twelve federal thrifts have been chartered since the start of 1995, including two this year; only six state savings banks were chartered in 1995-96.

"We see a tremendous number of community banks being started,"said Lee Burrows, managing director of Trident Securities in Atlanta. "Far, far fewer people" are starting thrifts, he said.

"The majority of people are going to choose to start with a commercial banking charter-particularly with the uncertainty that surrounds the thrift charter."

Frank C. Bonaventure Jr., an attorney who is handling the formation of both Maryland thrifts, said lower initial capital requirements for federal thrifts were incentives to local organizers.

Federal regulators require a commercial bank have at least $6 million in start-up capital, while federal thrifts have a $2 million minimum. In Maryland, prospective de novo state-chartered commercial banks must raise $5 million in capital.

But few organizers are ready to rush into a thrift charter. Congress agreed to merge the Bank Insurance Fund and the Savings Association Insurance Fund by Jan. 1, 1999, if the federal thrift charter is eliminated. When or even if that charter will disappear is still undecided.

Alex C. Hart, a bank analyst at Ferris, Baker Watts Inc., said some organizers might seek a thrift charter with hopes of Congress turning it into a more valuable commercial bank.

J. Clarence Jameson, chairman of the proposed AmericasBank, said the possibility of a legislatively forced charter switch is one reason to form a thrift.

"Commercial bank charters are more valuable," Mr. Jameson acknowledged.

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