LOCAL S&L HISTORY FILLED WITH SUCCESS, SOME FAILURE; NATIONAL S&L CRISIS TOUCHES HOME

When federal regulators assumed control of Colonial Federal Savings and Loan Association in January 1990, the action ended a more-than-100-year-old local operation in Cape Girardeau.

Founded in 1882, Colonial became the second local savings-and-loan operation to come under federal control; First Federal Savings and Loan, a 60-year-old firm headquartered here, was taken over by federal regulations in April 1989.

In early November 1990, the Resolution Trust Corporation approved the sale of Colonial deposits and assets.

Colonial and First Federal were two of many savings-and-loan groups that failed financially in the late 1980s and early 1990s, when a fourth of the nation's 3,200 S&Ls were considered insolvent or close to it.

But beneath the savings-and-loan debacle are some S&L success stories, including two with Cape Girardeau connections: Farm and Home Savings, 211 Silver Springs Road, and Savings of America, 3168 William.

Farm and Home Savings survived both the Great Depression of the 1930s and the recent recession.

"Farm and Home's biggest business is doing the things that savings-and-loans do best first-mortgage home loans," said Karen Ridgon, manager of the local branch of Farm and Home Savings. "The company is conservative, and especially with its investments."

Farm and Home, headquartered at Nevada, Mo., was established a century ago in 1893. The Cape Girardeau branch is a full-service operation, offering real-estate loans, savings, checking, certificates of deposit, tax-deferred annuities and discount stock-brokerage services. The thrift institution has 66 offices throughout Missouri and Texas.

Savings of America is a division of Home Savings of America, the nation's largest savings-and-loan and the largest home-mortgage lender in the nation. Home Savings has about 300 savings-and-loan locations in seven states. The Cape Girardeau facility opened in 1986.

During the mid-1980s the associations held about half of the mortgages on homes in the U.S. Those mortgages totaled more than $500 billion.

The first savings-and-loan opened in the U.S. in 1831. The S&Ls were originally founded to provide home and, or, commercial buildings loans; now, S&Ls provide many of the same services as banks, including checking accounts, money markets, NOW and IRAs.

Savings-and-loans also fall under federal and state rules and regulations, with individual savings accounts protected up to $100,000.

The outlook is improving for healthy S&Ls, according to the Government Accounting Office and Congressional Budget Office. But spokesmen of both offices warned that about 25 percent of the savings-and-loan industry must still be considered troubled or likely to fail.

The director of the Congressional Budget Office, Robert D. Reischauer, said in a recent prepared statement that profits by both banks and S&Ls "provide room for guarded optimism." But he warned that a shift in interest rates could reduce that profitability.

Congress is being urged to provide the government money to shut down insolvent thrifts. The S&L bailout agency, the Resolution Trust Corp., has been without funding authority since April.

More than $88 billion has been provided for the savings-and-loan bailout and cleanup, but Reischauer and Charles A. Bowsher, head of the General Accounting Office, said another $50 billion may be needed to finish the cleanup and provide an $8 billion insurance fund to guard against future failures.

When the two savings-and-loan offices in Cape Girardeau closed, their assets and buildings were purchased by local banking institutions.

Mercantile Bank of Cape Girardeau acquired deposits of about $81.6 million from the Cape Girardeau operation of Colonial Federal Savings, and First National Bank of Sikeston acquired deposits of approximately $36.7 million from branches at Chaffee and Caruthersville. First National Bank later acquired the Colonial building at 2027 Broadway.

In May 1990, 13 months after being under federal supervision, First Federal Savings and Loan was sold to Cape County Bank. The headquarters building on Broadway and all 11 First Federal locations were absorbed into the Cape County Bancorporation, which later became Capital Bancorporation.

Colonial was founded as Cape Girardeau Building and Loan Association 17 years after the end of the Civil War, on Nov. 18, 1882, by 18 Cape Girardeau residents. Dr. J.H. Rider, a local physician, was its first president.

The first real-estate loan was made on Feb. 19, 1883, to R.H. Smith. The new company was opened only two hours twice a week, and was situated in a rented room at Cape Girardeau County Courthouse.

Eventually, a permanent office was established at 102 N. Main, where it remained until January 1970, when the new building was constructed at 2027 Broadway. Four years later the association changed its name to Colonial Federal Savings and Loan, and had branches at Chaffee, Perryville and Caruthersville.

First Federal Savings came into being in 1927 under the name Surety Savings and Loan Association. Its first office was at 111 N. Main. The company was founded by Lindsey W. Simmons, who had started a general fire-insurance agency in 1926.

The loan company moved to 320 Broadway in 1929. In 1951, the name was changed to First Federal Savings and Loan of Cape Girardeau. The firm moved into new quarters at 325 Broadway in 1964, eventually changing its name to First Federal Savings and Loan of Southeast Missouri, with branches at Poplar Bluff, Ste. Genevieve, Sikeston, Perryville and Jackson.