DALLAS -- Federal regulators took control Thursday of four insolvent Texas savings and loan associations with combined assets of $4.25 billion and combined liabillities of $4.96 billion.
The four thrifts -- Benjamin Franklin Savings Association of Houston, Alamo Savings Association and First State Savings Association of San Antonio and Victoria Savings Association of Victoria -- were rechartered under a joint plan through the Federal Savings and Loan Insurance Corp. and Federal Deposit Insurance Corp. to deal with insolvent savings and loans.
M. Danny Wall, chairman of the Federal Home Loan Bank Board, said all four thrifts were reopened as federal mutual associations and that depositors will not be affected. The transaction wiped out shareholders' equity in all four institutions, however.
Ben Franklin Savings and the two San Antonio thrifts had been involved in the FDIC-FSLIC joint conservatorship program since early March. The FDIC will manage all four institutions.
Ben Franklin Savings, rechartered as Benjamin Franklin Federal Savings Association, had $2.65 billion in assets and $2.79 billion in liabilities as of March 31. The Houston thrift's net capital was a negative $79.7 million.
Ben Franklin officials said earlier this month they would not make a $2.5 million interest payment, which analysts said at the time could push it into receivership. The thrift was placed under FSLIC-FDIC conservatorship along with 21 other Houston savings and loans in March.
There was speculation at that time that the FDIC was working on a plan to get the thrift's parent company, New York-based Security Capital Corp., to pick up some or all of the debt.
Analysts said they did not expect the FDIC to shut down Ben Franklin, noting, 'That would take cash and the FDIC doesn't have that.'
Alamo Savings, now known as Alamo Federal Savings, had $580.9 million in assets, $844.3 million in debts and negative capital of $263.3 million as of March 31. First State Savings, to be known as First State Federal Savings, had $209.3 million in assets, $378.2 million in liabilities and negative regulatory capital of $164.9 million.
Victoria Savings, to be known as Victoria Savings Association F.S.A., had $816.3 million in assets, $950.6 million in liabilities and negative capital of $123.1 million as of April 30.
The FDIC-FSLIC action Thursday wiped out the subordinated debt of First State Savings and Ben Franklin Savings.
