THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, November 4, 1994 TAG: 9411040690
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Short : 46 lines
The parent of Life Savings Bank in Norfolk said Thursday it sold three foreclosed hotels in Williamsburg for $9.5 million and stands to make $1.2 million on the transaction.
Life Savings took back the hotels - George Washington Inn, Travelodge in Williamsburg, and Econolodge Historic District - in late 1991 and early 1992 in an effort to recover $8.59 million of loans to Peninsula real estate companies controlled by Angelo H. Mageras.
Life's parent, Life Bancorp Inc., said it recently sold the hotels to certain principals of the Newport Hospitality Group Inc., a Newport News concern that has managed the facilities for Life for the past three years.
The purchasers ``are very knowledgeable about the market,'' said Tollie W. Rich Jr., executive vice president and chief operations officer of Life Bancorp. ``We are confident that we've put these hotels in the hands of people who will do an excellent job with them. We have watched them for three years, and they have given us excellent advice.''
As part of the transaction, Life provided $8.5 million of financing. In addition, the purchasers agreedto put $1.5 million of additional collateral in escrow and under joint control for capital improvements to the hotels, Life said.
Life's $1.2 million net gain on the transaction will be spread over several years as required by generally accepted accounting principles, the thrift holding company said.
By removing the hotels from its books, Life reduced its nonperforming assets by 71 percent - from $8.97 million to $2.6 million. As a percent of total assets, its nonperforming assets have dropped to 0.28 percent from 0.95 percent, the company said.
In a June 27 filing with federal thrift regulators, Life reported that the three Williamsburg hotels generated a combined operating profit of $955,000 last year and a $454,000 profit in 1992.
Last month, Life converted from a depositor-owned mutual thrift to a stock institution with a holding company, Life Bancorp Inc.
The price of its shares closed Thursday at $9, unchanged for the day. by CNB