U.S. Seizes Control of Gibraltar Savings : Chief Executive Dismissed; Regulators Cite ‘Unsafe’ Operation

Federal regulators today seized control of the 10-largest savings and loan association in the nation, Gibraltar Savings in Beverly Hills, and dismissed its chief executive.

Although the S&L;, with assets of $13.4 billion, was not insolvent, regulators were taking it over because its officers “were found to be operating in an unsafe and unsound manner and dissipating their assets,” said William Fulwider, a spokesman for the Federal Home Loan Bank Board in Washington.

Also placed under government control in a legal arrangement called a conservatorship was an affiliated institution of the same name with $1.7 billion in assets in Bellevue, Wash. Both thrifts are subsidiaries of Gibraltar Financial Corp.

James N. Thayer was dismissed as president and chief executive of Gibraltar Financial, Fulwider said.

Manager Appointed

Regulators appointed John Carr, vice chairman of First Nationwide Bank of San Francisco, a large thrift owned by Ford Motor Co., to run Gibraltar. He will be assisted by a three-member advisory board of financial industry executives and by supervisory agents of the Federal Deposit Insurance Corp., a commercial bank agency directed by President Bush to take control of the most troubled S&Ls.;

Fulwider said Gibraltar recently had been suffering from deposit outflows, but he declined to say how much had been withdrawn.

He said the institutions had been “pursuing riskier ventures such as commercial lending, out-of-state lending and securities transactions and were relying on high-rate funds to fuel their growth.”

Gibraltar operates 83 branches and has capital of $428 million remaining, and the Washington state institution has six branches in Washington and 18 in Florida and capital of $98 million.

It is not known how much it will eventually cost to restore Gibraltar to health, but the price tag could be minimized by the decision to take control before the institution became insolvent.

Regulators have halted most rescue deals pending congressional passage of the President’s plan for the S&L; crisis, which would provide $50 billion over the next three years to close or sell ailing institutions.