Wheaton-based Equitable Federal Savings finds prospective buyer Thrift would join Federal Trust of Fla.

December 09, 1992|By David Conn | David Conn,Staff Writer

Equitable Federal Savings Bank, a Wheaton-based thrift, announced yesterday that it had tentatively found a prospective buyer.

The Wheaton company, a mutual thrift with six branches and just over $200 million in assets, would become a wholly owned subsidiary of Federal Trust Corp. of Orlando, Fla.

Federal Trust, parent of Federal Trust Bank FSB, has only two branches -- in Orlando and Jacksonville -- and had $163 million in assets as of Sept. 30.

But the 4-year-old thrift reported $1.05 million in earnings for the first nine months of the year, compared with $353,000 in the same period last year, according to its chairman, James T. Bell. ++ And its return on assets last year was 1.21 percent, among the highest of all Florida thrifts, Mr. Bell said.

By contrast, Equitable Federal has struggled to meet federal capital requirements since the 1989 banking law went into effect, said President Gordon Luckett. It does not meet two of the three capital ratios, he said.

Mr. Luckett declined to reveal further financial information except to say the company lost money in the quarter that ended Sept. 30 but was profitable in October and November.

The proposed merger has been approved by the two companies' boards of directors but awaits final approval from federal regulators.

Under the agreement, Federal Trust would sell enough stock to Equitable depositors to meet the Maryland company's capital requirements.

The 113-year-old Equitable would convert from a mutual savings bank to a stock savings bank and would operate as an independent unit of Federal, with current management intact. Neither company would disclose the amount of stock expected to be sold.

"We think it's very important for our stockholders to diversify," Mr.Bell said. "We like the Washington market, we understand the Washington market."

"We've been trying to find an investor, and we found one," Mr. Luckett said.

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