SAN DIEGO — The Arizona bank that has managed troubled Central Savings & Loan Assn. since May 31 has not yet received a response from federal regulators to its nearly two-month-old proposal to operate Central for the next five years.
"We want (the regulators) to make up their minds quickly so we can start moving," George Leonard, Central president and chief executive, said Wednesday.
Leonard--who is also executive vice president of First Federal Savings Bank of Arizona, which was given a 90-day contract by regulators to manage Central May 31--said that he has not heard from authorities about his three-inch-thick report and proposal, which was submitted in mid-August.
"We've told them it doesn't make sense to drag out the decision-making process over the long term," he said.
The report details Leonard's analysis of Central's operation and also outlines three alternatives for the San Diego-based thrift's financial future.
The options call for Central, with about $2.2 billion in assets, to continue as a "going concern without regulatory constraints" and for First Federal to manage Central for the next five years, according to Leonard. The three alternatives include operating Central "the same as now--but the numbers don't look real good," said Leonard. The other options are for Central to be run either conservatively or "really aggressively."
"We'd like to operate it somewhere between conservative and aggressive," Leonard said.
A spokesman for the Federal Home Loan Bank Board declined to comment on the proposal, describing it as a "supervisory matter (that) is considered confidential."
Thrift Suffered Losses
The bank board forced the resignation of Central's board in May following $117 million in losses from 1981 to 1984 and a nearly $12-million loss in this year's first quarter. First Federal's 90-day management contract was automatically extended for 30 days on Sept. 1 and Oct. 1.
Central operated for 18 months under "supervisory review," during which time it was unable to make any new loans or dispose of any holdings without federal approval. The company recently revived its equity lending, or second mortgage, programs, and it plans to resume a complete real estate lending program by year's end.
Central's second-quarter performance is expected to be released this week, and Leonard acknowledged that the company is still in the red.
Central officials have declined to disclose the company's exact net worth, although, because of an infusion of more than $100 million in "net-worth certificates" by regulators, Central has had a positive net worth since June.
First Federal's proposal means that the Arizona bank's executives "don't want anyone coming and buying" Central, Leonard said. Several would-be suitors have expressed interest in acquiring Central; ironically, it was the inability of Central's directors to find a willing buyer that led regulators to oust the prior management in May.
Central has 48 branches in Southern and Central California, including 19 in San Diego County, 12 in Los Angeles County and three in Orange County.