Wants Authorization for 100 Million New Shares : FCA Seeks to Raise Stock Ceiling
Financial Corp. of America wants authorization to issue another 100 million shares of common stock in preparation for a possible public offering that would help the savings and loan company raise much-needed capital.
FCA, in its latest annual proxy statement, said it wants to increase its maximum allowable shares of common stock to 200 million from 100 million shares. The Irvine-based financial institution presently has less than 36 million shares outstanding.
“A higher number of authorized shares . . . is advisable to allow the company continued flexibility to raise capital in the private or public markets,” the proxy said. Shareholders will be asked to approve the measure at the company’s annual meeting next month in Orange County.
Though FCA officials have discussed a possible stock offer before, this announcement is the strongest indication yet of how serious the proposal is. FCA is the parent company of American Savings & Loan, the nation’s largest S&L.;
“We have said before that our goal is to raise capital through a merger or through a new issue of stock,” an FCA spokesman said. “Both are realistic possibilities.”
FCA needs nearly $1 billion in capital to bring it into compliance with minimum requirements set by the Federal Home Loan Bank Board. Its regulatory net worth stood at $453 million at the end of 1985--$971 million below the federal regulatory minimum.
Regulators in Washington have imposed a tougher net-worth minimum on FCA than for most other other savings and loans. The requirement--included as part of a merger approval several years ago when FCA acquired another savings and loan company--means that FCA’s net worth should be about 4% of liabilities. The industry standard is 3%.
FCA’s stock, which has been rising steadily in recent months as interest rates have fallen, closed Tuesday at $15.12 1/2 a share, down 50 cents. At that price, FCA would need to sell nearly 65 million new shares to the public to raise the capital that it needs.
