Tucson Thrift Sees ’86 Merger With S.D. S
Great American First Savings Bank and Home Federal Savings & Loan Assn. of Tucson, Ariz., hope to reach a definitive agreement by early September and complete their merger during the first quarter of 1986, Home Federal Chairman and Chief Executive Thomas Wier said Tuesday.
Although Wier acknowledged that the two thrifts’ timetable will be affected by federal regulators whose approval is needed for a merger, he added that “we would not go to all the trouble involved in this transaction if we did not think it could be done.”
Although savings and loan industry analysts and attorneys reported that there are no laws or regulations prohibiting mergers or acquisitions involving healthy thrifts from different states, the Federal Home Loan Bank Board has generally barred such deals. The board has generally approved pairings of healthy, out-of-state institution with weaker, in-state institutions.
Consequently, the proposed merger, which would create a San Diego-based institution with assets of $9.4 billion, will likely set the rules for future S&L; industry growth, suggested Robert Shafton, an attorney with the Los Angeles firm of Stroock & Stroock & Lavan. “I think (Great American President) James Schmidt and (Chairman and Chief Executive) Gordon Luce are two bright people on cutting edge of an interesting new development.
Question Pending in Congress
“My hunch is that they will succeed,” Shafton said. “But the question (of healthy S&Ls; crossing state lines through mergers and acquisitions) may have to be solved on a long-term basis by Congress.”
“The question has been pending both in Congress and in (regulatory bodies) for some time, and it has not been squared away and etched in stone,” he said.
“There does not seem to be any question that it is legally doable,” said Tom Klingenstein, an analyst with Wertheim & Co. in San Francisco. The question, Klingenstein said, is “when (the FHLBB) will approve it. The board has a lot of authority but it doesn’t always move quickly.”
That was the case in late 1983 when Home Savings of America, an S&L; owned by Los Angeles-based H. F. Ahmanson & Co., announced its intention to acquire Sooner Federal Savings & Loan Assn., of Tulsa, Okla.
The Federal Home Loan Bank Board did not act on the request until December, 1984, a Home Savings spokeswoman said Tuesday. At that time, the S&L; reported that “the Federal Home Loan Bank Board denied the merger . . . because of current policy considerations against an interstate combination of savings institutions” that did not involve a healthy, out-of-state institution rescuing an ailing institution.
Great American and Home Federal spokesmen, however, have said that the Home Savings-Sooner proposal has no bearing on their planned merger.
