Pacific Bank Tells of Talks on Selling to HF Holdings

Pacific Savings Bank officials acknowledged Friday that they are negotiating to sell the Costa Mesa institution to HF Holdings Inc., the aggressive San Francisco company headed by former Treasury Secretary William E. Simon and former Federal Reserve Board Vice Chairman Preston Martin.

But the S&L;’s top officials, Chairman Joe G. Baker and President Verne F. Potter, said in a prepared statement that they were not at liberty to comment further because of constraints involving the continuing negotiations.

HF Holdings is expected to decide within two months if it can afford to buy Pacific Savings, which had $1.7 billion in assets on Sept. 30, along with Bell Savings in San Mateo and Southern California Savings in Beverly Hills. Bell and Southern California Savings are government run S&Ls; that the holding company already had been negotiating to purchase. Last fall, HF bought Honolulu Federal S&L; and World Trade Bancorp in Beverly Hills.

Pacific Savings lost $12.3 million in the first nine months of 1986, and its net worth fell to $37.3 million at the end of September from $51.4 million at the end of 1985.

Among the troubles plaguing the S&L; are loans that turned sour in Texas and Oklahoma, where the oil glut has shaken the economy and forced numerous financial institutions out of business.

The real estate that Pacific Savings took in through foreclosure by the end of September--a figure incorrectly reported in Friday’s story about the negotiations--was $11.9 million, or about 1.2% of the S&L;’s total mortgage loans.