Newspaper article THE JOURNAL RECORD

State's Largest S&l Declared Insolvent

Newspaper article THE JOURNAL RECORD

State's Largest S&l Declared Insolvent

Article excerpt

TULSA - Sooner Federal Savings and Loan Association of Tulsa was declared insolvent Thursday by the Office of Thrift Supervision.

The federal Resolution Trust Corp. was named receiver of Sooner, the state's largest thrift. Its $1.7 billion in assets and $1.2 billion in 171,292 deposit accounts were transferred to a newly chartered federal mutual institution named Sooner Federal Savings Association.

The new thrift was immediately placed in the Resolution Trust Corp. conservatorship program, joining seven other Oklahoma thrifts and more than 250 thrifts nationwide.

Resolution Trust Corp. was created by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, the landmark thrift bailout bill passed in August. The conservatorship program is intended to shore up thrifts' balance sheets by resolving problem loans and selling foreclosed assets.

Sooner Federal has 26 branches in Oklahoma, including eight offices in metropolitan Oklahoma City, and has a subsidiary thrift in Texas called Texas Western Federal Savings and Loan Association.

Although operating under troubled conditions for several years, Sooner Federal's fortunes took a nosedive in January when the thrift warned it might have to raise capital from outside investors or sign an agreement with federal regulators. The cause: additional loan loss reserves and continued losses from real estate operations had pushed its capital position below that required by law as of Dec. 31.

Sooner Federal stock immediately plunged from $17 to $4 a share, and grumpy investors began talk of a lawsuit.

In February, as President George Bush pressed Congress for a bill to rescue the savings and loan industry, Sooner Federal requested capital forbearance from the Federal Home Loan Bank Board. The bank board was scrapped by the thrift legislation passed in August and replaced by the Office of Thrift Supervision, the new S&L supervisor. …

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