Regulators Close 2 State Thrifts, Transfer Deposits

Federal regulators late Friday closed two problem-plagued savings and loans in California and transferred their deposits to healthy institutions.

Closed were Mt. Whitney Savings & Loan Assn., located in the town of Exeter in the Central Valley near Visalia, and Ramona Federal Savings & Loan Assn. in the town of Fillmore in Ventura County.

Mt. Whitney will be merged into Guardian Savings & Loan Assn. of Huntington Beach. The Ramona thrift will become part of Midwest Federal Savings & Loan Assn. of Minneapolis. The changes become effective Monday.

According to the Federal Home Loan Bank, both the Mt. Whitney and Ramona institutions had large percentages of high-interest deposits and failed because they had become insolvent. The liquidations, which were ordered by the Federal Home Loan Bank Board, are expected to cost the Federal Savings and Loan Insurance Corp. $46.4 million for Mt. Whitney and $76.3 million for Ramona Federal.

Mt. Whitney and Ramona Federal are the fourth and fifth S&L; failures requiring federal insurance assistance in 1988.

Mt. Whitney’s financial difficulties began in 1982, when its previous management began soliciting high-cost jumbo certificates of deposit that were invested in lower paying government securities and questionable loans, according to the government.

Ramona’s failure resulted from a significant level of non-earning assets and high operating costs, according to the bank board. The board also said the association violated numerous regulations, including those governing transactions with affiliated parties.

The FSLIC has filed suit against former Ramona officers for breach of fiduciary duty.