Nearly a dozen savings and loans in Indiana may convert next year to state savings-bank charters, according to the state's top financial regulator.

Charles W. Phillips, director of the Indiana Department of Financial Institutions, said his office has had "informal conversations" with 10 thrifts about converting to such charters.

"It is going to be a terrific year for conversions," he said in a phone interview.

Following a Trend

In April, Indiana's legislature passed a law offering state savings bank charters to thrifts with federal or state charters. On March 31 there were 85 thrifts in Indiana, with $14.1 billion of assets.

Similar laws have been adopted in such states as North Carolina, Illinois, and Ohio. In North Carolina, thrifts have been converting by the dozens.

The savings bank charter under Indiana law allows thrifts to make small-business loans, and it reduces the amount of assets they have to hold in real estate.

It also allows them to dump the Office of Thrift Supervision as primary regulator and cut examination fees. State-chartered savings banks will be regulated by the state and the Federal Deposit Insurance Corp.

So far, two thrifts have applied to convert. First Federal Savings and Loan of Richmond is the furthest along in the process. It has received approval from the state and the OTS.

Robert F. Fix, president and chief executive of the $190 million-asset thrift, expects the conversion to be completed next month. He said First Federal is converting because it wants to make loans to businesses.

Business Lending Is the Lure

"Every hole in the ground has a mortgage banker," Mr. Fix said. "What we find in a community the size of Richmond [population 39,000] is that nobody wants to make loans to the local businessmen. "The big banks ... talk a good game, but they are not interested in making commercial loans unless they are big dollar."

After the conversion, First Federal's name will change to First Bank Richmond. It will remain a mutually owned thrift.

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