Caroline Savings Bank could become the first thrift in Virginia to convert to a state chartered savings bank.

Shareholders of Caroline, which is one of smallest thrifts in the state, voted last month to give up its charter from the Office of Thrift Supervision and convert to a state-chartered savings bank.

"We are in the process now of applying for that charter change," said William R. Southworth, president of Caroline, Bowling Green, Va.

Making Application

Mr. Southworth said the thrift sent its application into the Virginia Bureau of Financial Institutions last week, and it will apply to the OTS shortly.

By giving up its federal charter, the thrift will save $12,000 to $15,000 a year in OTS examination fees, gain additional lending powers, and reduce the number of exams to two from three, Mr. Southworth said.

Mr. Southworth added that it will cost Caroline $5,700 to exit the federal system.

Officials at the OTS "want to know why we are leaving," he said.

Solid Footing

Caroline is a healthy institution, and a slow grower. It $36 million in assets at yearend, compared with $33.14 million in 1992 and $33.08 in 1991.

The 20-year-old thrift, which has two offices -- in Bowling Green and Fredericksburg -- has more than 80% of its loans in mortgages.

The rest of the portfolio is in installment, construction, and home improvement loans.

"They are in good shape because they stuck to their knitting," said J.T. Baxter, a banking and thrift consultant in Richmond. "They didn't get into risky areas of lending. They are still sitting there making money."

The Bottom Line

Last year, it earned $363,000, compared with $394,000 in 1992 and 267,200 in 1991.

The thrift has a tangible capital ratio of 8.3%.

"We intend to keep it [growth] steady," Mr. Southworth said. "We are not looking for anything fast."

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