Irvine Group Gets OK to Acquire 25% of Large Tulsa S

A limited partnership in Irvine has received approval from the Federal Home Loan Bank Board to purchase up to 25% of Sooner Federal Savings & Loan Assn., Oklahoma’s largest S&L.; The deal is valued at between $7.2 million and $7.6 million.

Aikendale Associates will pay an average of $17 to $18 a share by Aug. 1 for 424,000 shares held under option agreements with two of the S&L;’s larger shareholders, said W.R. Hagstrom, the Tulsa S&L;’s president and chief executive.

The purchase will give Aikendale and its general managing partner, Richard A. Mager, a total of 475,200 shares, or 23.24% of Sooner’s common stock.

Earlier this year, Aikendale bought 10,000 shares and Mager purchased 41,200 shares. Mager joined Sooner’s board of directors in February.

Mager said that eventually Aikendale will own about 23% of the S&L;’s 2.05 million shares outstanding and that he will own about 2% in his own name.

The approval for the stock purchases came after Mager and Aikendale told the bank board that their purchase would be a “passive” investment. In other words, they will not seek to control or influence the operations of Sooner Federal, Hagstrom said.

“This is purely a stock position, an investment,” said Mager, president of First Equities Group, an Irvine real estate investment and development company. “This is nothing more than acquiring stock in General Motors or Ford, except that we need regulatory approval.”

Mager said he and four friends who make up Aikendale had been looking in Oklahoma since last November for a “counter-cyclical investment,” a long-term position taken when the economy is down on the expectation that it will revive. He would not identify the other investors.

“Oklahoma is in a severe depression, mainly because of the oil industry,” he said. “This (investment) was done on the assumption that oil prices will go back up and the value of the institution will go back up.”

With $1.5 billion in assets as of March 31, Sooner Federal is among the 150 largest S&Ls; in the nation. It operates 28 branches in Oklahoma and 10 in Texas through a wholly owned subsidiary, Texas Western Federal Savings & Loan Assn.

Like most other financial institutions in Oklahoma and Texas, it has run into problems with loans, mainly because of the severe depression in the oil industry.

Hagstrom said Sooner’s problem loans have come mostly from average homeowners who were laid off from oil industry jobs and are unable to make even interest payments.

In the quarter ended March 31, Sooner Federal made “nominal profits--less than $50,000,” Hagstrom said. He said that profits still were very low but that the S&L; remained in the black for the quarter ended June 30.

“We’re in the black largely because of asset sales,” he said. “We’re not quite break-even on (operations), largely because of non-performing loans. But there’s no question we’ll be a survivor. We’re a strong company, and we don’t have a lot of credit exposure.”

The S&L;’s stockholder equity, or primary capital, was 5% of its assets at the end of March, and its ratio of net worth to assets was even higher. Regulators require a 3% net worth ratio.

Under bank board regulations, anyone buying more than 10% of an S&L;’s stock is assumed to be seeking control and must file a bank holding company application. By making a passive investment, Hagstrom said, Aikendale and Mager cut down the paper work and won quicker approval.

Expressing pleasure with the bank board’s action, Hagstrom said directors and officers already have established “a very strong working relationship” with Mager.

“We do not anticipate any significant changes in the company as a result of Aikendale’s increased ownership position,” he said.