Unable to find a buyer after it was ordered by its regulator to sell itself, Universal Savings Bank in Milwaukee will liquidate its assets and deposits voluntarily, the Milwaukee Journal-Sentinel reported Friday.
The $8 million-asset thrift is expected to close its doors this month and let its remaining employees go by the end of next month.
In an e-mail to shareholders Thursday, Universal Savings said they are unlikely to get any return on their investment, the paper reported.
Universal Savings, which specialized in credit card servicing and mortgage processing, had been winding down its retail operations in recent years.
The thrift, which had $222 million of assets three years ago, sold its wholesale and retail mortgage business to American Sterling Bank, a Sugar Creek, Mo., unit of American Sterling Corp. in Irvine, Calif., in 2006.
In a cease-and-desist order issued in July, the Office of Thrift Supervision said Universal Savings had been operating in an "unsafe and unsound" manner and ordered it to either to sell itself or liquidate. The thrift struck a deal to sell itself to Aqua Finance Inc. of Wausau, Wis., but the OTS blocked the deal last fall.
A call to Universal Savings was not immediately returned.
A spokesman for the OTS said it had signed off on a liquidation plan, though details about when the thrift would close are being finalized. "It's basically a going-out-of-business sale," he said. "They will have to give us a formal plan in the next several days."
The Federal Deposit Insurance Corp. was notified that Universal Savings is closing but is not involved in the liquidation, the spokesman said.
Universal Savings was founded in 1987. Fifth Third Bancorp bought it in 2001 for its merchant credit and debit card units and sold it a year later to its previous management team, led by David C. Beck, for $6 million, according to the Business Journal of Milwaukee. Mr. Beck is the chairman of the thrift's holding company, Universal Banc Holdings Inc.
According to FDIC data, Universal Savings lost more than $24 million between Jan. 1, 2003, and Dec. 31, 2007. The only year it made money in that time was 2005.
Last year its net chargeoff rate more than tripled, to 17.87% of total loans. At yearend noncurrent loans made up 41% of its loan total, versus 2.43% at the end of 2006 and 1.04% at the end of 2005. In two years Universal Savings' equity shrank 73.4%, to $5 million at the end of last year.
