Most of the deposits of failed First Annapolis Savings Bank were sold to other banks and thrifts yesterday by federal regulators, and the federal agency that manages failed banks and S&Ls said First Annapolis' failure will cost taxpayers more than $252 million.
Andrea Plater, a spokeswoman for the Resolution Trust Corp., said that the deposits of 15 of First Annapolis' 21 branches were sold yesterday to eight thrifts. The other six branches will be closed, and the government will pay off depositors whose accounts were at those six branches, accounting for almost $150 million of the cost of bailing out First Annapolis, Ms. Plater said.
"The RTC will put the checks in the mail this weekend," she said. The rest of First Annapolis' deposits are now the responsibility of the banks that took over the branches where the accounts were based.
The only exception is that all the deposits in Individual Retirement Accounts and Keough accounts at any First Annapolis branch were sold in a separate transaction to Loyola Capital Corp., the parent of Loyola Federal Savings and Loan, according to a news release put out late yesterday afternoon by the RTC.
The U.S. Office of Thrift Supervision took over the Annapolis thrift last June and turned it over to the RTC, which managed First Annapolis while it looked for a buyer. The RTC reorganized the thrift, technically closing it down and transferring its assets to a new institution it named First Federal Savings Bank of Annapolis.
At the time, OTS officials said that First Annapolis had dangerously low levels of liquid assets, partly because it had counted goodwill, or the value of its reputation and customer relationships, as an asset on its balance sheet.
"First Annapolis' insolvency resulted from consistent operating losses, a high level of delinquent and other non-earning assets, and service-corporation losses," an OTS spokeswoman, Patricia Forsyth, told The Sun last June 1, the day the thrift was seized.
Ever since the seizure, the RTC has been busily shrinking the bank. It has only $581 million in assets, compared with $732 million when it was taken over. It now has liabilities of more than $651 million, Ms. Plater said.
The decision to break up First Annapolis comes as something of a surprise, because analysts had expected the RTC to be able to find a buyer for the entire institution. But the RTC said no acceptable bids for the company as a whole were received.
James McAveney, chief financial officer of Loyola, said First Annapolis' branch system was too big for most Maryland institutions. "It was too big, but the real problem was the quality of their assets," he said.
Indeed, First Annapolis' assets were not sold. Assets are mostly loans and other money that is due to a bank or thrift, as well as property it owns. The deposits that were sold yesterday, while valuable, are actually liabilities in accounting terms.
Ms. Plater said that the RTC will continue to manage First Annapolis' assets until it can either collect or sell off loans, or sell off collateral backing the loans.
Loyola bought five branches, the most of any buyer. Mr. McAveney said Loyola bid successfully on branches in Rockville xTC in Montgomery County and Prince Frederick in Calvert County because it wanted to expand into those areas. It also bought branches in Greenbelt and Bowie in Prince George's County and Severna Park in Anne Arundel County.
He said Loyola would keep open the three branches in communities where there is already a Loyola branch but will eventually study whether it should merge the offices..
The other branches were divided up as follows:
* Atlantic Federal Savings Bank bought deposits from branches in Towson and Edgewater.
* Maryland Federal Savings and Loan Association bought deposits from First Annapolis' Deale branch and a second Bowie branch.
* Suburban Federal Savings Bank of Landover Hills bought deposits from branches in Crofton and Arnold Station.
* Laurel-based Citizens' Bank of Maryland bought the deposits of First Annapolis' Waldorf branch.
* The deposits of the Olde Mill branch went to Carrollton Bank of Baltimore.
* The Randallstown branch's deposits went to Farmers Bank, Baltimore.
* Tri-County Federal Savings Bank of Waldorf took over the deposits of First Annapolis' old Dunkirk branch.
All of those deposits continue to be federally insured up to $100,000 per account.
The RTC will close branches in Easton, Forestville and Lexington Park, as well as three branches in Annapolis. Depositors whose accounts were at those branches will be paid off by the government up to $100,000, Ms. Plater said.