WASHINGTON -- In a further sign that the savings and loan crisis is winding down, the only thrift to fail this year has been sold, and the cost to the government was minimal.

Stockton, Calif.-based American Savings Bank - a failed thrift itself back in 1988 - acquired $96 million-asset Encino Savings Bank last Friday. The cost to taxpayers, under a program designed to speed disposal of failed thrifts, was a rock-bottom $4.6 million.

Jonathan L. Fiechter, acting director of the Office of Thrift Supervision, said Encino's case is "a credit to the whole concept of early intervention and prompt corrective action."

Among Least Costly Bailouts

The failed thrift, based in Encino, Calif., was the 36th institution sold under the Accelerated Resolution Program. A spokesman for the Resolution Trust Corp. said that Encino is "among the 10 least costly of the ARP resolutions that we have done."

"A few years ago, an institution with 2.4% capital would have been allowed to continue to operate in a traditional style up until the time it became insolvent," Mr. Fiechter said.

But the Federal Deposit Insurance Corp. Improvement Act of 1991 changed that practice. Regulators are now required to intervene long before an institution's liabilities exceed its assets.

Last July, the Office of Thrift Supervision formally required Encino to raise capital. The institution explored its options, then agreed to work with regulators toward a sale under the Accelerated Resolution Program.

The program was set up in 1990 to allow the OTS and the RTC to dispose of failed thrifts before they had to be placed in RTC conservatorship. After a buyer is found, regulators simultaneously place the institution in RTC control and sell it off, usually offering some financial incentive for the buyer.

American Savings was paid $4.6 million to take over Encino. The transaction cost taxpayers 5.1% of Encino's liabilities, far under the average RTC conservatorship cost of 30% of a failed thrift's liabilities.

The year's only failure is "a credit to the FDICIA legislation, which clearly enables OTS...to intervene in cases of troubled institutions much more promptly," Mr. Fiechter said.

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