WASHINGTON — Maryland state officials and savings and loan executives Friday tried to find someone to buy Old Court Savings & Loan Assn. as a last-ditch alternative to appointing a state conservator to take over the beleaguered Baltimore thrift institution.
As meetings continued Friday night, Ejner J. Johnson, chief of staff for Maryland Gov. Harry Hughes, said: "We're extremely optimistic. Mergers are on the table. They're under discussion, but it would be premature to discuss them" publicly.
The run for deposits by Old Court savers that began Thursday morning worsened after Atty. Gen. Stephen Sachs revealed that he had begun a criminal investigation of possible conflicts of interest and other possible wrongdoing.
Sources said there appeared to have been millions of dollars in insider loans at the association, which has assets of $840 million.
Old Court's depositors began lining up at 4 a.m. Friday for their money at the Randallstown branch, where the run began, and there were long lines all day outside all but one of Old Court's seven branches in the Baltimore and Eastern Shore areas.
Officials refused to say how much money was withdrawn Friday, but a source said that Old Court lost about $15 million in deposits the day before.
Old Court offices stayed open late Friday night and were scheduled to be open today as officials tried to halt the run by assuring depositors that they could have their money if they wanted it.
State officials moved quickly to intervene in Old Court's difficulties Friday in an effort to halt the depositors' panic before it spread to other savings associations insured by the private Maryland Savings Share Insurance Corp. (MSSIC).
Pressuring MSSIC and savings industry leaders to find a healthy partner to take over Old Court, state officials warned that, if necessary, the state Savings and Loan Division would name a conservator to run Old Court.
Savings and loan executives reportedly feared that appointment of a conservator would raise rather than lower the anxieties of depositors.
Hughes, who is traveling in Israel, was briefed by telephone several times about the situation but has no plans to cancel his trip, press secretary Lou Panos said.
"If he were to come back, it could be a signal, an unwarranted signal and an exaggeration of the true situation," Panos said.
Hughes' top aides met with officials of MSSIC and industry leaders in a closed-door meeting in Baltimore late Friday to try to work out a solution to the Old Court crisis.
Sources familiar with the talks said the governor's staff warned that if MSSIC could not deal with the situation quickly, Hughes might call a special session of the legislature and require all Maryland savings associations to apply for insurance from the Federal Savings and Loan Insurance Corp.