Pacific Savings in Acquisition Talks : HF Holdings Reviewing Mortgage, Real Estate Portfolios

Pacific Savings Bank, under regulatory pressure to shore up its finances, is negotiating a possible merger with an aggressive new company headed by former Treasury Secretary William E. Simon and former Federal Reserve Board Vice Chairman Preston Martin.

Officers at HF Holdings Inc. in San Francisco have been talking extensively with Pacific Savings’ managers and with federal regulators since last September, Gerald Parsky, an HF partner and spokesman, said Thursday.

“We’re not yet at the stage of a definitive agreement,” Parsky said. “But their management has been receptive to our group,” and HF employees are already examining the Costa Mesa S&L;’s real estate and mortgage portfolios, he added.

Simon is known for buying troubled companies in ailing industries at depressed prices--and then making millions of dollars by turning them around and selling out.

He turned to the S&L; business last summer to build what he called a “mosaic of financial institutions” to capitalize on the burgeoning growth of financial services and Far East trade.

Last fall, the company bought controlling interest in World Trade Bancorp, a 3-year-old Beverly Hills bank holding company. It also purchased ailing Honolulu Federal S&L--Hawaii;’s largest S&L.;

And last month the group disclosed that it was negotiating with federal regulators to buy two insolvent savings associations--Bell S&L; of San Mateo with $1.4 billion in assets and Southern California S&L; of Beverly Hills with $1.1 billion in assets.

Pacific Savings, with $1.7 billion in assets, is the 29th-largest S&L; in the state and the seventh largest in Orange County.

Simon was in Australia on Thursday and referred calls to Parsky. Martin was en route from Hawaii and was not available from comment. The chairman and the president of Pacific Savings could not be reached.

Pacific Savings, which traces its history to 1890, has had problems for at least three years. Its net worth dwindled to $37.3 million at the end of September from $57.4 million at the end of 1984, according to Federal Home Loan Bank Board figures.

The company lost $6.8 million in 1984, posted $4.6-million net income the following year but lost $12.3 million in the first nine months last year, according to bank board figures.