Dutch insurer Aegon NV is exploring a bid to buy the troubled Suburban Federal Savings Bank in Crofton as a way of becoming eligible for money from the federal bank bailout plan.
The insurance giant, with North American headquarters in Baltimore, was among four insurance companies that applied Friday to the federal Office of Thrift Supervision to become owners of a savings institution as a way to get funding from the Treasury's Troubled Asset Relief Program. OTS officials confirmed Aegon's interest in Suburban.
Suburban Federal, a half-century-old family-owned bank, has been looking for capital as it tries to rebound from a spate of soured loans. At the end of the third quarter, the bank had $29.2 million in bad loans on its books and $8.3 million in capital, according to a financial statement filed with the Federal Deposit Insurance Corp.
The Office of Thrift Supervision issued a cease-and-desist order in March to stop the bank from writing land, development and construction loans without the agency's approval.
Suburban has seven branches and about $354 million in assets.
An Aegon spokesman said the insurance company, which operates the Transamerica and Monumental life insurance companies in the United States, is not looking to become heavily involved in the banking business. Instead, owning a thrift is a way for the company to shore up its access to cash during the continuing worldwide economic crisis. Insurance companies that own thrifts are eligible for a piece of the $250 billion the federal government is using to help cash-strapped financial institutions.
"We're not interested in going around and buying thrifts all over the United States," Aegon spokesman Gregory W. Tucker said. "This is part of our overall strategy to ensure we have the strongest capital position we can in this environment."
The company took an investment worth $3.7 billion from the Dutch government last month as it suffered losses because of the financial meltdown.
Robert L. Morrison Jr., president of Suburban Federal, didn't return calls yesterday, but in a Nov. 7 interview, he said the bank was looking at strategic alternatives to raise capital. He did not provide details.
"Like all banks across the country, everybody is looking at options to increase our capital," Morrison said. "And we are engaged in that."
The Office of Thrift Supervision said in the spring that Suburban Federal had engaged in unsafe and unsound banking practices that resulted in excessive risk to its finances.
