SAN DIEGO — Central Savings & Loan Assn.'s net worth has plummeted to a negative $22.5 million because of the firm's $35.3-million loss in the nine months ended Sept. 30, according to reports filed with the Federal Home Loan Bank Board.
Despite the negative position, which reportedly worsened in the year's final quarter, the S&L has been operating for nearly a year under an agreement with the Federal Savings and Loan Insurance Corp., which insures customer deposits to $100,000 per individual.
According to the government report, Central's losses accelerated through 1984, with quarterly deficits growing from $1.2 million in the first quarter to $11.6 million in the second and $22.5 million in the third period, finally eliminating the last of the S&L's capital.
Fourth-quarter and year-end results are not yet available, but one regulator said Central's negative net worth, or the excess of liabilities over assets, at the end of 1984 was more than $50 million.
Central Chairman Fred Stalder said Monday that the losses have been compounded by write-downs on "loans and investments" as well as restrictions imposed on its operations by the government, including limits on its lending volume.
"Some of the things you could do to earn a profit, we just can't do" under the government-imposed operating agreement, Stalder said.
Last fall, the FSLIC solicited bids from other financial institutions willing to acquire the thrift, which has $2.5 billion in assets and 48 offices in Southern California.
The agency received only one bid--from First Global Investors Inc.--but lost the sale when it attempted to force the Miami firm into also taking over a failing thrift in an Eastern state as part of the deal.
"The FSLIC blew it," said one regulator familiar with the transaction. "Now, Central is losing the government's money."
Central is working with the FSLIC and New York investment bankers in an effort to raise capital, although retaining deposits is a first priority, Stalder said.
"Having an adequate cash flow is more important than the level of capital," he said. "Central hasn't lost the public's confidence" and is meeting its liquidity, or cash, requirements, he said. In the last 90 days, deposits have increased by $70 million.