Long-struggling Mercury Savings & Loan, out of capital and unable to attract buyers, succumbed today to federal regulators, who seized the S&L and installed a new manager.
The U.S. Office of Thrift Supervision put the Huntington Beach thrift in conservatorship, an unusual move in federal takeovers, and appointed another federal agency, the Resolution Trust Corp., as conservator to operate it.
All of Mercury's 24 branches continue to operate as usual, and $1.8 billion in deposits continue to be federally insured, said Janis Smith, a spokeswoman for the Office of Thrift Supervision.
The agency seized the S&L because it failed to meet minimum capital requirements under a strict federal law enacted last fall to rescue the industry's deposit insurance system. Smith said Mercury also had suffered serious losses and that the losses were likely to continue.
But Mercury was not put into receivership, which is the typical route for takeovers. Under a receivership, an S&L would be liquidated. But under a conservatorship, regulators will try to conserve Mercury's assets and its marketability while searching for a buyer, Smith said.