Southern Financial, a Va. Thrift, Nears Conversion to National Bank
A Virginia thrift, Southern Financial Federal Savings Bank, said it has received approval from the Office of the Comptroller of the Currency and the Office of Thrift Supervision to convert to a national bank.
Georgia Derrico, president of the thrift, said it is the first on the East Coast to obtain permission for national-bank conversion since passage of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
Southern Financial, which is profitable and well-capitalized, wanted to disassociate itself "from the negative press of the savings and loans," Ms. Derrico said.
Cost of Conversion
The institution will change its name to Southern Financial National Bank when the charter change takes effect, which Ms. Derrico expects within two months.
The thrift has $63 million in assets but paid legal expenses and regulatory fees "in the six figures" to accomplish the maneuver, Ms. Derrico said.
As required by the reform law, Southern Financial sought approval for its conversion from the Comptroller's office in late 1989. Ms. Derrico said the application was held up until the Office of Thrift Supervision pushed the process forward.
"It was a long process," Ms. Derrico said. "Southern Financial and its attorneys have worked very closely with the OCC and the OTS to see this conversion through to fruition."
Ms. Derrico left her job in 1984 as head of corporate affairs at Chemical Bank in New York to organize Southern Financial. The thrift opened in 1986.
It is based in Warrenton, Va., and has offices in Herndon, Middleburg, and Winchester. Its stockholders equity of $7.1 million places it well in excess of minimum capital requirements.