Central S & L Lists New Loss of $12.6 Million

SAN DIEGO —  Central Savings & Loan, still suffering from an ill-fated real estate development diversification five years ago, lost nearly $12.6 million in the second quarter ended June 30, according to figures released Wednesday by the Federal Home Loan Bank Board.

For the first six months of 1985, the financially troubled S&L; has lost about $25.5 million.

Central’s net worth, according to the bank board’s second-quarter report, was $15.1 million as of June 30, or 0.65% of its $2.3 billion in assets. Included in that net worth, however, is $122 million in “income capital certificates” issued by regulators in June to bring Central’s net worth into the black. Without that infusion, Central’s net worth would have been a negative $106.9 million as of June 30.

The certificates, which are sometimes called net worth certificates, are carried on the balance sheet as subordinated debentures. Used by the government since 1982 to bail out dozens of troubled S&Ls;, the certificates represent only paper transactions because no currency is actually invested.

Regulators forced the ouster of Central’s board and its chief executive on May 31 and appointed First Federal Savings Bank of Arizona to manage the company.

Central President George Leonard, who is also executive vice president of First Federal, said Wednesday said that the company is “starting to witness a turnaround.”

Two months ago Leonard asked regulators for a five-year management contract. He has yet to hear from them. “We’re anxious for (the regulators) to come to some long-term resolution,” he said Wednesday.