Skipper of Doomed Thrifts Finally Gets a Sturdy Ship

Lawrence Connell is known in some circles as one who goes around administering last rites to the thrifts he is asked to head.

He is hoping his new role at Society for Savings Bancorp in Connecticut will be different.

"The big difference is, Society has capital and earning power," Mr. Connell said on Thursday, his second day as chief executive of the $3.3 billion-asset company.

In his previous two chief executive posts, at troubled thrifts in New Hampshire and Texas, Mr. Connell, 55, was essentially a caretaker, awaiting regulatory resolution of those institutions.

Stronger than Others in Connecticut

Although Society for Savings has its share of problem loans, in many respects it is in better condition than its Connecticut peers, observes agreed.

"To assume he's just moving the deck chairs on the Titanic [is] not entirely fair or justified," said Henry Peltz, a financial adviser at the consulting and data processing firm Nationar Inc.

At Sept. 30, the Hartford-based thrift reported earnings for the quarter of $1.4 million and a capital-to-assets ratio of 6%. The ratio of nonperforming assets, at 5.58% of total assets, was somewhat lower than the Connecticut thrift average of more than 7%. Reserves stood at 3.56% of all loans, including loans held for sale.

"Larry's role at Society is as a leader going forward. Society has a valuable franchise," said Eric Hovde, executive vice president of Hovde Financial Inc., who has consulted with the thrift on loan workouts.

Mr. Connell was selected by the directors of the thrift to replace Elliott C. Miller, who retired last Dec. 31.

Mr. Connell was most recently chairman of New Hampshire Savings Bank, a $1 billion-asset thrift based in Manchester that was nearly brain-dead when he took the post in late 1990.

An FDIC plan to restructure the New Hampshire market by combining the good assets of New Hampshire Savings and two other thrifts and selling them to the highest bidder put Mr. Connell into the spotlight in his caretaker role.

Out of a Job, Again

When an investor group led by William Craig, a former Shawmut National Corp. vice chairman, won the bid for the three thrifts in September, Mr. Connell was out of a job for the second time in a year.

He was chief executive of San Jacinto Savings in Houston, a unit of Southmark Corp. that was put into a Resolution Trust Corp. conservatorship in November 1990.

Taking the Society for Savings job marks Mr. Connell's return to the state capital where he served as banking commissioner from 1975 to 1977. He went on to become national credit union administrator, appointed by President Carter. In 1985, Connell became a partner in the law firm of Prather, Seeger, Doolittle & Farmer, advising clients on banking, regulatory, and legislative matters. That role led to assignments to turn around some troubled institutions.

He said he favors a liquidation strategy over workouts as the best course for overcoming real estate problems.

"That's the key, if you can do it," said Mr. Peltz. "The question is, who's going to buy it. Remember, you're going head to head with the RTC and the FDIC."

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