Weyerhaeuser Unit Acquires Altadena Thrift : Republic Federal Will Get Capital Infusion

Weyerhaeuser Real Estate, a Woodland Hills-based subsidiary of the forest products giant, said Tuesday that it had acquired Republic Federal Savings & Loan Assn. in a move that will help the troubled Altadena-based thrift avoid insolvency.

The deal, which has received approval from the Federal Home Loan Bank Board, requires Weyerhaeuser to invest $22 million in the thrift to meet regulatory capital requirements. Republic Federal, which had $638.9 million in assets as of June 30, has suffered losses of nearly $10 million over the past 18 months and its net worth had shrunk to zero.

Republic Federal had been under regulatory orders to improve its capital position or find a buyer who would, said Ernest Leff, a prominent S&L; attorney in Beverly Hills. Otherwise, the bank board may have been forced to seize the thrift and inject new capital from the Federal Savings and Loan Insurance Corp., Leff said.

With the acquisition, Weyerhaeuser strengthens its move into housing and financial services. The Tacoma, Wash.-based company, a major lumber producer, has subsidiaries in home building, mortgage financing and real estate.

John Wise, president of Weyerhaeuser Mortgage, a unit of Weyerhaeuser Real Estate, said, “The acquisition of the savings and loan was seen as a good complement to our other activities.” Wise was named chairman of Republic Federal as part of the acquisition.

But one analyst noted that, with this deal, Weyerhaeuser was increasing its exposure to economic downturns. All of its businesses--building materials, mortgages, real estate and now banking--are highly cyclical and likely to suffer at the same time in a recession.

“They’re already one of the country’s largest mortgage bankers, and I’m not sure it’s a good fit,” said thrift industry analyst Allan Bortel of Shearson Lehman Bros.

Republic Federal, the state’s 48th-largest S&L;, has 15 branches in Southern California, all of which will remain open, Wise said. The thrift’s current chairman, Walter M. Drake, will stay on as vice chairman.