Butterfield Acts to Draw Suitors for Acquisition

Acting to boost its prospects for being acquired, Butterfield Savings & Loan Assn. has sold its Santa Ana headquarters building and 5.5 acres of adjacent property for $22.8 million to PacTel Properties, an Irvine real estate subsidiary of Pacific Telesis.

Butterfield also is close to selling its Wendy’s restaurant franchise and is negotiating with three separate parties for the possible sale of its chain of Love’s barbecue restaurants, said Anne Bacon, the S&L;’s executive vice president and chief executive officer.

A sale of Wendy’s could come as early as next month, she said. She did not name the prospective buyer.

State and federal regulators declared Butterfield insolvent last Aug. 7 and took it over, appointing the Federal Savings and Loan Insurance Corp. as receiver. FSLIC hired Downey S&L; in Costa Mesa to manage Butterfield. Bacon is a senior vice president at Downey.

The sale of the headquarters property--a key move toward restructuring Butterfield--netted the S&L; $22.4 million, $20 million of it in a one-year note, Bacon said. The S&L; leased back two floors in the building, one floor for two years and the main floor for five years with renewable options on each floor.

The acreage next to the building is a parking lot consisting of three lots, one of which can be built upon, Bacon said.

While some of the proceeds will go into the S&L;’s depleted capital base, much of it will be used primarily for loans, and, secondarily, to reduce some $4 million in jumbo certificates of deposit brought in under former owners through brokers, Bacon said.

“Once Wendy’s and Love’s is sold and once the real estate syndication situation is settled down--and we’re three-quarters through that--FSLIC will be able to sell Butterfield,” she said. She expects the S&L; to be “salable” by the end of the year. Downey already has indicated it will not make any bid for Butterfield.

As of March 31, Butterfield had $803.9 million in deposits. Its net worth was $15.4 million, giving it a 1.9% ratio of net worth to assets. Regulators require the ratio to be 3% and aim to have all S&Ls; double their ratios in six years. Last year, Butterfield reported a net loss of $32.9 million.