North America Savings & Loan Assn., seized in January by regulators who uncovered what they said was the biggest fraud in state S&L history, reported a $23.2-million loss for the first quarter, according to the Federal Home Loan Bank Board.
The huge loss raised the Santa Ana institution's total losses in the last five quarters to $33.4 million, the federal agency's statistics show.
The bank board declared the institution insolvent Jan. 23 and replaced it with a new federally chartered S&L of the same name. The agency appointed its insurance arm, the Federal Savings and Loan Insurance Corp., as receiver and hired outside managers to run North America Savings.
Janice K. Ramocinski, president of North America Savings, could not be reached for comment Monday. She said June 29 as she was about to take over that she was not sure whether the S&L could survive its mounting losses and the alleged fraud that cost the S&L an estimated $40 million to $80 million. It reportedly involved forged signatures and altered documents.
Impact of Real Estate Loans
The S&L's first-quarter standing contrasts sharply with the previous year's figures for that period, which show the additional impact of 1986 regulatory orders that forced major write-downs in real estate loans.
The value of all real estate the S&L had to repossess through foreclosures, for instance, was $721,000 at the end of the first quarter last year. It rose to $40.5 million by the end of 1986 and hit $46.9 million at the end of March.
In economically depressed Alaska, where the S&L sunk 26.9% of its assets, about $27 million in mortgages are delinquent or in default, the FSLIC said.
The regulatory orders also increasingly limited the activities of the S&L's sole owner, the late Duayne D. Christensen of Newport Beach, who died in a single-car crash Jan. 16, hours before state regulators seized his S&L and a week before it was turned over to federal regulators.
Christensen had a noon deadline the day he died to obtain $6 million in capital to save North America Savings. The S&L's net worth, which included $3.6 million in loan loss reserves, had plummeted by the end of the year to a negative $1.6 million from a positive $6.7 million March 31, 1986.
By the end of the first quarter of 1987, the S&L's net worth, excluding loan loss reserves, was a negative $24.8 million.
Trying to Offset Losses
Federal regulators have been selling North America's assets to offset losses and had lowered the S&L's total assets at the end of the quarter to $199.5 million from $212.7 million a year earlier. The latest figure is 9.7% lower than the $221 million in assets reported Dec. 31.
In their shrinking of North America Savings, regulators have managed to maintain a large depositor base. Total deposits at the end of the quarter rose slightly to $205.1 million from $201 million a year earlier.
Regulatory orders curtailing lending activities also helped reduce the S&L's loan portfolio by 27.3% at the end of the quarter to $120.6 million from $165.8 million a year earlier. On Dec. 31, the S&L reported total loans of $135 million.
In February, the FSLIC filed a complaint in U.S. District Court in Los Angeles, alleging that Christensen masterminded a plot to defraud the S&L and that his business associate and confidante, Janet K. McKinzie, aided him.
McKinzie was the sole beneficiary in Christensen's will, trust and $10-million life insurance policy. The FSLIC legally froze the assets of McKinzie and of Christensen's estate, but it found few assets.