Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 8, 1991 TAG: 9102080078
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: MAG POFF BUSINESS WRITER
DATELINE: LENGTH: Short
Bob Frazier, assistant managing agent for the Resolution Trust Corp., the government agency that took over operation of CorEast a week ago, said nothing unusual happened after the city removed its money Wednesday.
Few other customers, however, have deposits that exceed the $100,000 limit on federal deposit insurance, the institution said.
Frazier said RTC is "in the process of downsizing" since CorEast went into federal receivership.
He said the move to reduce assets is the reason CorEast no longer is making new loans. Although they are liabilities for everyone else, loans are assets for banks because they produce income. Reducing loans strengthens a bank's financial position because its basic capital or equity becomes a larger part of its total assets.
Money that might otherwise be available for lending, Frazier explained, is being used to pay off high-cost deposits such as those placed by brokers and so-called jumbo certificates worth $100,000 or more.
Retiring those deposits will have no impact on the average customer, Frazier said. CorEast is continuing to deal as usual with traditional consumer deposits and certificates.
Frazier said no employees have been terminated except in top management. He said the RTC is analyzing the loan department to determine the staffing it needs and where employees might be needed in other departments of the bank.
by CNB