WASHINGTON — The Office of Thrift Supervision has placed Augusta Federal Savings Bank of Baltimore, which has a branch in Carroll County, in receivership and chartered a new federal mutual institution to take its place.
The new institution, Augusta Federal Savings Association, will assume certain assets and liabilities of the old thrift and will operate in conservatorship under the management of the Resolution Trust Corp.
The receivership did not result in any interruption of Augusta Federal's day-to-day operations. The institution and its eight Baltimore-area branches -- including one in the Westminster Shopping Center, will remain open for business as usual.
Holders of insured accounts are not affected by the action, which was taken by OTS to protect insured depositors and the interests of the thrift insurance fund. Deposits remain insured to the $100,000 legal limit.
OTS initiated the action because Augusta Federal was operating in an unsafe and unsound condition and has suffered losses that have depleted all of its capital, with no prospect of replenishment without federal assistance. The institution is insolvent in that it has negative tangible, core and risk-based capital.
Augusta Federal's condition is due primarily to large losses in consumer loans, primarily for automobiles and boats. The institution's consumer loans grew rapidly from $19.2 millionat the end of 1987 to $38.6 million two years later. As of March 31,1990, consumer delinquencies had reached $6.8 million. In May 1990, Augusta Federal agreed to an OTS order restricting new lending to residential real estate. As of Dec. 31, 1990, Augusta Federal had non-accrual loans and repossessed assets of $4.6 million, or 3 percent of assets. In addition, Augusta Federal reported $8.2 million in past dueloans, or 5.3 percent of assets.
As of Dec. 31, 1990, Augusta Federal Savings Bank reported assets of $156 million, liabilities of $160.6 million and tangible capital of negative $4.6 million, for a tangible capital-to-assets ratio of negative 2.98 percent.