Holding Companies for Handouts

After the September 25th failure of Washington Mutual, the nation’s largest thrift company, many speculated that the future of the thrift charter and its regulator, the Office of Thrift Supervision (OTS), was in jeopardy. But after the events of the last couple of weeks, we tend to believe that the rumors of their demise may have been a bit premature.

While GMAC Financial Services just applied to become a bank holding company, a number of other financial and insurance companies have filed for thrift holding company status while simultaneously acquiring thrift institutions. They include:

TRT Financial Holdings, LLC which seeks to acquire **Guaranty Bank, Dallas, TX;

First American Title Insurance Company wants to acquire ***First American Trust, fsb—Santa Ana, CA;

Imperial Community Financial Corp. has applied to acquire zero-star Imperial S&LA, Martinsville, VA;

Lincoln National Corporation seeks to acquire **Newton County Loan & Savings, FSB—Goodland, IN;

AEGON N.V., of the Netherlands, applied to acquire zero-star Suburban FSB—Crofton, MD;

Hartford Financial Services Group, Inc. is attempting to buy zero-star Federal Trust Bank—Sanford, FL;

Rock Holding Inc. wants to form a holding company and a new thrift to operate under the name of Rock Bank, Livonia, MI; and

Genworth Financial Inc. is seeking H.C. status to acquire **Inter Savings Bank, FSB, Edina, MN.

Any of these new holding companies, if approved, would be eligible to apply for a share of the Treasury’s $250 billion giveaway ...i.e. capital injection. The funny thing is that none of the troubled thrifts that are being acquired could qualify for the Treasury money on their own (JRN 25:41). The result of these unions may just breathe new life into the flagging thrift industry. Like they say ...when one door closes, another opens.