SAN DIEGO — Flagship Federal Savings & Loan, created by federal regulators after Sun Savings & Loan's failure in July, 1986, reported a $1.02-million net loss for the first fiscal quarter ended Sept. 30, a company spokesman said Tuesday.
The thrift's continued string of quarterly losses has generated a negative net worth of $6 million.
During recent months, Flagship has continued to trim back its assets. It reported $136.1 million in assets on Sept. 30, down from $154 million on June 30. Flagship reported $136.5 million in deposits on Sept. 30.
The institution has "only two small condominium loans left that are non-performing," according Ralph Rivet. "The total of those loans is less than $200,000." Sun was saddled with $55 million in non-performing loans when it failed.
Flagship's loan portfolio "is in good shape," according to Rivet. However, the S&L has remained unprofitable because many of its deposits demand high interest rates. Flagship's interest income "doesn't begin to match" what Flagship must pay out in interest on accounts, Rivet said.
Flagship, which is being operated by a management team from Great Western S & L, "should have a bid package ready for the Federal Home Loan Bank Board by the end of this month," Rivet said. The bid package is a kind of financial statement prepared for potential buyers.
Interest From Buyers
In June, Ralph C. McNitt, a Great Western executive vice president who serves as Flagship's chief operating officer, said there is a "great deal of interest in buying Flagship."
"Individuals and institutions" have expressed interest in acquiring the S & L that federal regulators created in the wake of Sun Savings & Loan's failure. Much of that interest has come from out-of-state parties, McNitt said.
At a June press conference, McNitt played down Flagship's continued string of quarterly losses, claiming that the S & L was "programmed to lose money" during its first few months.
Consequently, the first-quarter loss "was no surprise to anyone," McNitt said.