Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 21, 1991 TAG: 9102210094
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
SOURCE: MAG POFF BUSINESS WRITER
DATELINE: LENGTH: Medium
Charter, which earlier had declined to release the figures, last week reported the capital ratios for the period ended Dec. 31 to the U.S. Office of Thrift Supervision.
Douglas Deppen, chief financial officer for the Bristol-based thrift, said the figures reflect "a shortfall from government requirements."
But, he said, Charter would have a positive capital position if government regulators allowed it to count goodwill that previously was granted to thrifts such as Charter that took over failed savings-and-loan associations.
Exclusion of the value of goodwill is a key point likely to be argued next Thursday in a lawsuit filed by Charter to prevent government takeover.
The new report shows:
Charter's risk-based capital ratio was a negative 4.2 percent at the end of last year, compared to the government standard of a positive 7.2 percent. The ratio is based on the degree of risk associated with a thrift's assets. Government securities, for instance, are considered less risky than home-mortgage loans and therefore require lower reserves.
Charter reported a negative 3.4 percent for both its core capital ratio and its tangible assets ratio, compared to government standards of 3 percent and 1.5 percent respectively. Those ratios are measures after discounting goodwill and refer to hard assets such as cash.
Charter's lawsuit claims the government breached the contract it made when Charter took over the failed thrifts in return for goodwill credits. Charter said in its suit papers that the OTS has rejected the thrift's plan for recovery.
The hearing will be held at U.S. District Court in Abingdon.
by CNB