Newspaper article THE JOURNAL RECORD

Bailout of Midwest Branches Estimets to Cost $1.2 Billion

Newspaper article THE JOURNAL RECORD

Bailout of Midwest Branches Estimets to Cost $1.2 Billion

Article excerpt

ST. PAUL, Minn. (AP) - As Midwest Savings' 49 branches reopened under new ownership in Oklahoma and three other states Tuesday, a federal official said the cost of bailing out the failed thrift may be $330 million higher than expected.

Jack Allman, resolution manager of Midwest for the Resolution Trust Corp., said the bailout would cost taxpayers about $1.2 billion.

Estimates had been about $870 million to bail out the thrift, whose Minnesota, California, Iowa and Oklahoma branches were sold in pieces to a variety of financial institutions late last week.

The insured deposits of the seven Oklahoma branches were acquired by neighboring financial institutions.

The El Reno and Oklahoma City branches with approximately $43 million of insured deposits were acquired by Continental Federal Savings and Loan in Oklahoma City for a $1 premium, the Resolution Trust said.

The Madil, Hugo and Durant branches with approximately $62 million in insured deposits were acquired by Durant Bank and Trust Co. The Durant bank paid a $533,000 premium, the Resolution Trust said.

The branch in Shattuck with approximately $9 million of insured deposits was acquired by Shattuck National Bank for a $1,000 premium, the Resolution Trust said.

The Anadarko branch with approximately $9 million of insured deposits was acquired by First National Bank in Hobart, the Resolution Trust said. The bank paid a $137,750 premium.

The Atoka branch with approximately $10 million in insured deposits was acquired by the First National Bank of Antlers for a $356,000 premium.

Midwest had purchased the insured deposits of the insolvent Investors Savings and Loan Association of El Reno and United Savings of Durant in 1988. …

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