The downtown Salt Lake office of Arizona's Western Savings and Loan Association is one of the S&L's most profitable branches, and its credit card operations in Murray have proved productive.

But that hasn't been enough to save the entire institution from the ravages of Phoenix's depressed economy and invasion of federal regulators.Last week regulators converged on Western's headquarters in Phoenix, declaring Arizona's second largest thrift insolvent and placing it under conservatorship of the Federal Deposit Insurance Corp.

The Salt Lake branch remains open, and individual deposits are insured up to $100,000 by the Federal Savings and Loan Insurance Corp. Western's credit card office in Murray, which employs about 80 people, also remains in operation.

"I have been led to believe nothing will change locally, so it's business as usual," said Stephen Coltrin, manager of Western's Salt Lake branch.

While many of Utah's savings and loan's experience excessive withdrawals as Congress deliberates on how to deal with the nation's insolvent thrifts, Western's Salt Lake branch added $2 million in new deposits last month to its $20 million deposit base, Coltrin said.

"This branch is one of the best performing branches we've got," he said.

The entire Western institution hasn't been so lucky. As of April 30, Western had $5.78 billion in assets and $5.99 billion in liabilities. On May 31, the institution was $85.8 million below the federally required capital level.

FDIC spokesman Alan J. Whitney blamed Western's woes on the Phoenix area's depressed real estate economy, according to Associated Press. Western was a big player in Arizona's now overbuilt commercial real estate market.

Whitney said 35 percent of Arizona's banks lost money last year, the highest percentage in the nation.

Utah went through a similar economic slump two years ago, and the state's financial institutions suffered. Among the victims were American Savings, Deseret Federal Savings and MountainWest Savings, all now operating under FDIC conservatorship as part of a nationwide program to resolve the savings and loan industry's problems.

Another S&L with offices in Utah but based out-of-state and under regulatory management is Sandia Federal Savings.

FDIC officials said legislation to fund a bailout of S&L depositors should be in place by summer's end.