Depositors Closer To Getting Money
COLUMBUS, Ohio (AP) _ Depositors at Ohio’s privately insured savings and loans are closer to getting all their money now that there’s a potential buyer for Home State Savings Bank and the Legislature has passed a bill to help 35 of the thrifts reopen for full service.
Gov. Richard Celeste described as a ″first step″ Friday an announcement by Chemical Bank of New York that it will attempt to buy Cincinnati-based Home State, which has 33 branches in Ohio.
He said it could be mid-April before legislation is ready to allow the sale that would give Home State’s 49,000 depositors access to their money.
The Legislature on Friday night approved a compromise bill to appropriate $60 million in non-tax state revenues - $35 million in excess liquor profits and $25 million in unclaimed bank deposits - to help the 35 smaller thrifts still operating under withdrawal limits to qualify for federal insurance.
The bill creates a Savings and Loan Assurance Corp. which would allocate the money to the S&Ls to meet capitalization requirements of the Federal Savings and Loan Insurance Corp.
The bill says people may withdraw up to $1,000 a month from their accounts, up from the $750 limit imposed by another emergency bill March 20.
Brian Usher, Celeste’s press secretary, said the governor would sign the bill as soon as it reaches his desk, probably Monday.
Home State closed March 8 after a three-day run on deposits prompted by the collapse of ESM Government Securities Inc., a Florida securities firm in which Home State had invested heavily. Runs began at other privately insured Ohio thrifts a few days later, and Celeste ordered all 69 state-chartered S&Ls closed March 15.
As of Friday, 34 were allowed to reopen for full service because they had federal insurance or would soon qualify for it.
Chemical Bank sent a letter of intent Friday to Robert B. McAlister, state superintendent of savings and loans.
McAlister has refused to provide details of the deal.
Senate President Paul E. Gillmor said it calls for $90 million remaining from the private Ohio Deposit Guarantee Fund and $80 million in tax funds and that Chemical Bank would put in a $21 million premium for entering Ohio’s markets.
Raymond Sawyer, Celeste’s chief of staff, said Chemical Bank will have to recapitalize Home State, which has liabilities in excess of $500 million and that the deal could require a buyer to repay at least some of the tax funds from future profits.
Meanwhile, some smaller S&Ls that have been unable to reopen because of new state insurance requirements say they’re being pressured to sell out.
″The superintendent is playing hard push,″ said Robert L. Masters, president of Savings One of Dresden, referring to McAlister.″I think they’re trying to create some fire sales.″
Masters said he was contacted by Chase Manhattan and that he was told Chase was putting together a list of institutions to acquire.