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REGULATORS PUT EMPIRE BANK ON THE BLOCK

Empire Federal Savings is being put up for sale by the federal Resolution Trust Corp., which has been operating Empire since January.

An advertisement soliciting bids for the bank is expected to appear Thursday in the Wall Street Journal, said John Feil, the RTC's managing agent at Empire.

The RTC hopes to find a buyer for Empire by Sept. 28.

The bank will continue to do business as usual while bids are solicited and deposits will continue to be covered by federal insurance both before and after any sale.

The RTC is offering Empire's 122-branch office network in five states, along with $7 billion in deposits and $2.5 billion in home mortgages and consumer loans.

Although bids can be placed for portions of Empire, "the preference would be to sell the package as a whole," Feil said.

An undisclosed number of potential buyers have expressed interest in Empire over the last year, said Kent Dixon, Empire's president and chief executive officer.

"It doesn't mean they will bid after looking at us, but I've had a number of calls since I've been here," said Dixon, who was named Empire's president in May 1989.

One positive development that may help the RTC sell Empire is that its financial condition continues to improve, Dixon said.

Operating losses have declined substantially each month this year as the bank has slimmed down and reduced expenses, he said.

The bank lost a record $1.07 billion in 1989, although more than two-thirds of that loss involved a paper transaction where the bank wrote off the value of the goodwill it took on when it acquired several failing savings banks earlier in the decade.

Another encouraging sign is that the RTC has liberalized guarantees it gives to buyers, he said.

Buyers who take over home mortgages when acquiring an institution now have up to 18 months to hand them back to the RTC if they turn out to be of poor quality, he said.

Two of Empire's subsidiaries will be sold separately: its mortgage origination and servicing company, Empire of America Realty Credit Corp., which is based in Buffalo, and Empire of America Relocation Services Inc., a small company based in Orlando, Fla.

The mortgage company currently services about $7 billion in mortgages for Empire and other banks, meaning that it collects payments and maintains accounts on mortgages held by banks. It has 500 employees.

The RTC also continues to look for buyers for the bank's $650 million credit card portfolio and its $1 billion servicing portfolio of auto loans, Feil said.

Although the RTC announces its intent tomorrow to sell Empire, finishing touches still are being placed on packages of information that will be given to qualified bidders, Feil said.

Interested parties who receive the packages will be allowed to go to Empire to examine its records before makn the block
ing bids, he added.

Because Empire has more than $500 million in assets, bids for the institution will be evaluated by staffers at the RTC's headquarters in Washington, D.C., Dixon said.

Dixon said he is pleased that there has been a relatively short period of time between the federal takeover of Empire and its sale.

Other large institutions seized by the government have been held for much longer periods of time before being put up for sale, Feil said.

Since the takeover, the RTC has been able to identify easily all of the bank's assets, he said: "This has been an easy institution to work with; management has stayed intact."

The RTC sent a team of investigators to the bank for two weeks -- something it does to every bank it takes over -- and those investigators found no evidence of any fraud on the part of the bank's directors or officers, he said.

"They have reported zero fraud to us," he said. "Fraud is just not an issue at Empire."

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