THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, October 1, 1994 TAG: 9410010271
SECTION: BUSINESS PAGE: D01 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 64 lines
The federal agency responsible for disposing of failed thrifts said Friday it sold Home Federal Savings Bank in Norfolk to a minority-controlled investment group.
The chairman of the newly chartered Home Savings Bank F.S.B. is Charles B. Whitehurst Sr., the former treasurer of the city of Portsmouth and a former officer with Central Fidelity Bank.
The board of the new institution also includes William E. Ward, the mayor of Chesapeake.
The transaction provided Hampton Roads with a locally based, minority-controlled financial institution, something the region has lacked since the collapse of New Atlantic Savings Bank in Norfolk in August 1993.
In announcing the sale, Resolution Trust said it offered certain preferences to minority bidders because three of Home's six offices were located in predominantly minority neighborhoods.
Slightly more than 1,100 potential purchasers were invited to bid for the institution, and the winning bid ``was determined to be the least costly of the 38 proposals submitted to the agency,'' the RTC said.
The transaction was one of the few instances in Virginia when the RTC was able to sell a failed thrift intact rather than liquidating it or selling its branches and deposits to an established financial institution.
The new Home Savings will assume $56.8 million of insured deposits from the failed thrift and will purchase $5.1 million of assets, including cash and certain loans, the RTC said.
Deposits at Home Savings will remain insured up to $100,000 per account, and checks drawn on Home accounts will continue to be honored, the RTC said. However, the agency advised depositors to visit the institution within the next several weeks to affirm their accounts and discuss the continuation of specific services.
Home will reopen its six offices Monday, said Roger E. Early, president and chief executive officer of the new institution. However, certain details about services have to be defined, he said.
Early had been a vice president of Home Savings when it was seized by federal regulators two years ago. He continued to work at the institution while it was in the RTC's hands until earlier this week.
The new Home Savings, he said, is a unit of a new thrift holding company, Home Bancorp Inc., based in Norfolk.
In addition to Whitehurst, Ward and Early, the board of the new Home Savings includes Melvin L. Bradley of Washington and Harry F. Radcliffe of Pittsburgh.
Organized in 1886, the original Home Savings Bank had once ranked among the financially strongest savings and loan associations in the region. But federal thrift regulators took control in July 1992 after Home suffered heavy losses from its real estate lending and lost much of its capital.
During the 1980s, Home's management had tried unsuccessfully to merge the thrift and then to raise badly needed capital by converting from a mutual association to a stock company.
The RTC said it will advance $46.3 million to the new institution and will retain about $66.4 million of assets from the failed thrift. The ultimate cost of disposing of the old Home Savings will total about $47 million, the agency estimated. by CNB