Potomac Savings Bank taken over by U.S. regulators

August 29, 1992|By David Conn | David Conn,Staff Writer

Potomac Savings Bank F.S.B., a small thrift in Silver Spring, was taken over yesterday by federal regulators for failure to meet several financial safety measures.

The Office of Thrift Supervision, the federal agency in charge of overseeing the nation's savings and loan industry, appointed the federal Resolution Trust Corp. as receiver for the failed institution.

Potomac, with three locations and $72.3 million in assets, will continue to maintain normal operations while the RTC works to improve the financial condition of the troubled thrift in hopes of finding a buyer.

Regulators created a new association called Potomac Federal Savings Bank to assume all the assets and deposits of the previous thrift. As of yesterday's action, Potomac had $67.7 million in deposits among 4,121 accounts.

"We try to get the institution in a manner that it's attractive for sale," said James Gomez, the RTC's intervention manager for Potomac Savings.

It's unclear when that might happen, because Congress has not provided the funding that the RTC says it needs to attract buyers and pay offdepositors.

Mr. Gomez said the reason for the receivership was Potomac's inadequate capital-to-asset ratios, a measure of the financial cushion available to protect the federal insurance fund that would pay off the thrift's depositors.

Mr. Gomez said three top officials at the savings bank have not been retained by the RTC to run the newly created institution.

They include the father and son team of Charles D'Arco and Gregory D'Arco, the chairman and president, respectively.

Sharon Riggins, senior vice president for portfolio lending, also waslet go, according to Mr. Gomez.

In the fourth quarter of last year and the first three months of 1992, the company reported an average annualized return on equity of minus 30.5 percent, according to IDC Financial Publishing Inc., a Wisconsin financial rating firm.

That means the thrift lost nearly one-third of its net worth in those two quarters.

Since August 1989, when it was created, the Resolution Trust Corp. has closed or sold 652 savings institutions and collected or sold $267.3 billion in assets.

The cost to taxpayers has been $84.5 billion.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.