Oak Tree, Crossland Top List of Insolvent Thrifts

Oak Tree Savings Bank, Miami, and Crossland Savings, New York, retained their positions as the most insolvent thrifts in the nation and suffered additional capital erosion during the first quarter, according to a study released by K.H. Thomas Associates, a Miami consulting firm.

Each of the thrifts on the list faces possible government seizure if unsuccessful in recapitalization efforts, said Kenneth Thomas, president of the consulting firm.

The study predates an announcement that Crossland is seeking a buyer. Oak Tree continues to operate independently.

Talman Home Federal Savings of Chicago, fifth on the insolvency list, in July announced its acquisition and recapitalization by ABN Amro Holdings, the Dutch parent of LaSalle National Corp.

Mr. Thomas ranks the group by tangible capital at March 31, and each thrift on the list has a negative capital position of at least $25 million.

Mr. Thomas' tally ranks the nation's 2,400 thrifts based on their tangible capital. Tangible capital is equity capital minus goodwill and other intangible assets or nonqualifying equity instruments. Regulators currently require thrifts to have tangible capital of 1.5% of assets.

Most of the thrifts on the tally have plans to boost their capital positions. At least three are in the process of being acquired. But the recapitalization plans don't always bear fruit soon enough. Two of the thrifts on Mr. Thomas' yearend list - Far West Federal Savings, Portland, Ore., and Goldome Savings Association, St. Petersburg, Fla. - fell off the list because they were seized by regulators.

Some are more fortunate. Anchor Savings of New York moved off the list because it was recapitalized.

That is what the managements of the current list are working toward. Oak Tree is negotiating to sell real estate assets of about $740 million that it expects will recapitalize the thrift, according to vice president Barbara Motley.

Republic Shows Interest

Republic National Bank and others have expressed interest in Crossland. Before the announcement, Crossland had planned to swap debt for equity to boost tangible capital.

Several of the thrifts' capital crunch is due to problems with goodwill taken on the books when they acquired troubled institutions. Under new capital ruels, the goodwill is deducted from regulatory capital. That is the case with Security First Federal Savings and Loan, Datona Beach, Fla.; United Savings of America, Chicago; and Pelican Homestead Savings Association, Metairie, La.

Pelican, a mutual institution, has investor groups that are planning an acquisition and conversion of the company, according to Robert Shosstahl, president and chief executive. The investors are currently doing due diligence, and he expects the transaction to be completed by yearend. Pelican had done 11 supervisory mergers, which loaded the balance sheet with goodwill.

United is trying to find a merger partner or outside capital infusion, according to Victor Caputo, president and chief operating officer. George Boone, president and chief executive, said Security First is working on a recapitalization plan and expects his thrift to meet all the requirements.

Executives of the Long Island Savings Bank, Centereach, N.Y.; Mechanics and Farmers Savings Bank, Bridgeport, Conn.; First American Savings Bank, Greensboro, N.C.; and Flagler Federal Savings and Loan Association, Miami, could not be reached for comment.

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