How to find a savings-and-loan you can feel secure about

Even some people who don't remember the bank failures of the 1930s are starting to wonder. Almost every week, it seems, there's more bad news from the United States savings-and-loan industry. Failing S&Ls are merged into healthy ones. S&Ls with poor management are taken over by federal regulators. The Federal Savings and Loan Insurance Corporation (FSLIC) shells out $1.35 billion to cover deposits at just two California thrifts.

And underneath these more spectacular reports is a continuing drumbeat of losses by the S&L industry as a whole. The latest of these reports came this week when the Federal Home Loan Bank Board announced that the industry lost a record $3.8 billion in the first quarter of this year, on top of a $3.2 billion loss in the last quarter of 1987, another record, despite a rise in the percentage of profitable institutions from 65 to 69 percent.

While the industry blames the economy, particularly the economies of Texas, Louisiana, Oklahoma, and other oil patch states ($3 billion of the $3.8 billion loss came from 20 S&Ls, most of them in Texas), the comptroller of the currency puts most of the blame on mismanagement at the thrifts.

But people who put their savings in these institutions aren't as interested in blame as they are in knowing that their money is safe. While federal deposit insurance has greatly increased confidence in the banks and S&Ls, many savers want more protection.

A few of them have asked us if they can find an S&L that won't go under, that won't have to be taken over by federal regulators for fraud or mismanagement. Even though their savings are well under the $100,000 limit for deposit insurance, they don't want to have to wait even a few days to get at their money.

``You can try to look at the financial statements'' of an S&L, says Glen King Parker, publisher of Income and Safety, a newsletter. But not many people will understand these reports. A fairly detailed quarterly report is available from the Federal Home Loan Bank Board, the parent agency of the FSLIC, but it may not be helpful, either.

``A thrift can be sound one day and under water the next,'' Mr. Parker says, if it has to write off a large amount of bad loans. The moment those loans are written off, he explained, they're no longer an asset, but a liability.

Interestingly, some of the newer S&Ls are safer than the old ones, Parker says. ``They have to have adequate capital, and they have to get licensed and chartered.''

FSLIC, of course, has its own standards for measuring the quality of a thrift. Not all are publicized as they relate to any particular institution. One, says Paul Olkovsky, an FSLIC spokesman, is a ``quality thrift test,'' which says that 60 percent of a thrift's business has to be in real estate-related enterprises. The test is being phased in as a regulation, Mr. Olkovsky says, although some thrifts are grandfathered at less than 60 percent.

Another standard is the institution's net worth-to-asset ratio. This is a way of making sure it is sound enough to take a round of loan failures. The ratio should be about 3 percent, Parker says.

But the most important standard is still the little sticker on the door which says ``FSLIC.''

``The main thing is to make sure you're insured,'' Olkovsky says. ``If you are insured and a thrift closes, you'll get a check within a few days or a week.''

Up to $100,000 of insurance is provided on a variety of account types, including individual accounts, joint accounts for a couple or parents and their children, and trust accounts. On joint accounts, note that no group of joint accounts with identical ownership at one institution can total more than $100,000, and no individual's portion in all joint accounts can be more than $100,000.

If safety is more important to you than the highest yield, Parker says, you're better off doing business with a local thrift. That doesn't mean it won't ever close, but if it does, you're more apt to know about it. In most cases, a thrift will reopen for a few days after a closing, so depositors can get out their money, plus all current interest. If you miss that period - perhaps because the thrift was hundreds of miles away - you will still get all your principal from federal insurance, but the interest may have stopped as of the final closing.

If the thrift is simply sold or merged into another institution, there won't be any change at all, except for a new sign on the building the next morning.

There's a booklet that talks about deposit insurance and some ways to examine the soundness of a thrift. ``How safe is Your Money?'' can be obtained by sending $2.50 to 100 Highest Yields, PO Box 088888, North Palm Beach, FL 33408.