Magazine article American Banker

Three Months of Denial Ends for Depositors of Home State

Magazine article American Banker

Three Months of Denial Ends for Depositors of Home State

Article excerpt

NEW YORK -- The nightmare has ended for 75,000 depositors of the failed Home State Savings Bank who had been denied access to their funds since March 9, the day after the Cincinnati thrift was closed.

At 9 a.m. on Friday, 33 Home State branches reopened as offices of three separate banking companies: Hunter Savings Association, a Cincinnati thrift indirectly owned by Ohio tycoon Carl Lindner; AmeriTrust Corp. of Cleveland; and First National Cincinnati Corp.

Several Ohio banking observers had expected a chaotic, "circus-like" atmosphere, but at many branches the atmosphere was more like a party, with cookies and fruit punch given out to waiting depositors.

Lines were long at some branches, and computers were swamped -- but basically all was calm on the Home State front.

"It's about what you'd expect considering that people have been denied their money for 14 weeks," said Mark Stachler, one of the organizers of the Home State Depositors Association, a group formed to represent depositor interests.

"It's been a long time since I've seen my money," said Eldon Ryle, a Cincinnati depositor. "I just wanted to see what it looked like."

Wilma Lee of Brighton, Ohio, said she had to borrow money from neighbors in order to get by in the last two months. "Today, I'm going to pay them back," she said.

Home State, which as of March 31 had $524.9 million in deposits, collapsed as a result of massive losses suffered in connection with its investments with the failed E.S.M. Government Securities Inc. of Fort Lauderdale, Fla.

The Home State failure exhausted the resources of the Ohio Deposit Guarantee Fund and led to the temporary closing of other thrifts insured by that private deposit insurance fund.

Chemical New York Corp. agreed to buy Home State in early April, but the thrift's reopening was delayed by legislative wrangling over how much state assistance should go to Chemical. …

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