FCA Wants to Reduce Its Assets by Nearly 20% in ’85

Financial Corp. of America wants to shrink its assets nearly 20% to $24.5 billion by the end of 1985, the Los Angeles-based firm announced Tuesday.

The goal is a marked contrast to the past track record of FCA, which until recently was the nation’s fastest-growing S&L; holding company. FCA is the parent firm of Stockton-based American Savings & Loan Assn., the largest S&L; in the country.

FCA’s assets ballooned 43% to $32.4 billion in the first nine months of 1984 but then shrank to slightly below $30 billion by year-end due to an aggressive asset-sale program initiated by the company’s new chairman, William J. Popejoy.

But company officials cautioned that reducing assets to $24.5 billion by Dec. 31 will be achieved only if interest rates keep dropping in 1985. Falling rates allow FCA to sell its high-yielding fixed-rate mortgage loans at a profit in the secondary market.

Popejoy also said that the Federal Home Loan Bank Board, the nation’s primary S&L; regulatory agency, has “responded favorably” to a new business plan that FCA has authored.

That means, the company said, that regulators will not penalize FCA because its net worth was not equal to about 4% of its liabilities at the end of 1984. (Most of the S&L; industry must maintain a 3% net-worth ratio.) But FCA said it intends to meet a 4% minimum by the end of 1985.

The company said its additional goals include reducing problem loans, cutting operating expenses by at least $35 million and making more adjustable-rate mortgage loans to lessen its vulnerability to fluctuating interest rates.

FCA also said its 1984 earnings would not be released until late February--after a company task force has had a chance to complete a problem-loan review.