First Nationwide Takes Over 2 S&Ls; in Ohio, Slates Expansion

First Nationwide Savings & Loan of San Francisco has taken over two ailing S&Ls; in Ohio and in return has received regulatory permission to extend its retail branch operations to Colorado and Pennsylvania, it was announced Friday.

First Nationwide Savings paid no money for State Savings & Loan and Citizens Home Savings, but it expects to spend “several tens of millions of dollars” to clean up the two institutions’ problem loans, company Chairman Anthony Frank said in a telephone interview.

“We didn’t give any money and we didn’t get any money” from the Federal Savings and Loan Insurance Corp., which handles forced mergers and liquidations in the savings and loan industry, Frank said.

State Savings of South Euclid has $392 million in assets and nine offices, while Citizens Home in Lorain has $165 million in assets and six offices. First Nationwide has another 180 retail offices in California, New York, Florida and Hawaii.

This is only the second time that regulators have used a rule that gives healthy S&Ls; more freedom to expand across state lines. S&Ls; traditionally have been able to open branch offices in other states by buying failing associations there.

According to the latest rule, adopted earlier this year, healthy S&Ls; willing to rescue thrifts in other states may now negotiate to expand into other states as well.

As a result of this process, First Nationwide won the right to go into Colorado and Pennsylvania--by starting from scratch or by acquiring healthy associations, Frank said.

Regulators are using this kind of incentive to attract more bidders for the hundreds of savings and loan firms that are in financial trouble across the country.

Earlier this month, Carteret Savings & Loan of New Jersey was given permission to open offices in Maryland and the District of Columbia after agreeing to take over two troubled thrifts in Virginia.

Meanwhile, First Nationwide also announced that it has changed its name to “First Nationwide Bank, a Federal Savings Bank.” The move highlights the company’s desire to be regarded more as a retail consumer bank and financial services company than as a savings and loan association.