Newport-Based S&L; in Red When Seized by Regulators
South Bay Savings & Loan was $2.2 million in the red when seized by federal regulators Friday night and sold to Standard Pacific L.P., a Costa Mesa home-building company.
The Newport Beach-based savings and loan--which originally opened for business in Gardena in 1983--was renamed Standard Pacific Savings. Its two offices, one in each city, opened for business under that name Monday morning.
Federal Home Loan Bank Board officials refused to disclose how long South Bay S&L; had been in financial trouble.
But South Bay’s troubles date back at least two years, to the April, 1985, ouster of San Diego developer Frank Domingues as chairman of the S&L.;
Domingues was removed by regulators after the Federal Savings and Loan Insurance Corp. named him as a defendant in a $50-million fraud suit the agency filed against a number of investors in the now-defunct San Marino S&L.;
Under an agreement with the FSLIC, Domingues placed his 80% of South Bay’s stock in a blind trust and agreed to sell the shares over a three-year period beginning in 1985. Shares that remained in that trust Friday were invalidated by the bank board’s seizure of South Bay.
A Standard Pacific official said Monday that the company would not reveal the financial terms of the acquisition until it files its required reports with the Securities and Exchange Commission.
The building company’s chief financial officer, Robert St. Lawrence, said Standard Pacific had been negotiating with the Federal Home Loan Bank Board for several months to acquire South Bay.
Under the acquisition agreement, Standard Pacific L.P. will provide an undisclosed capital contribution to the new institution in exchange for all the common stock of the now-defunct South Bay S&L.;
The acquisition of the savings and loan association is not a significant event for Standard Pacific, said Robert Curran, a securities analyst with Merrill Lynch in New York. But it does give the builder one more means of providing financial assistance to its customers.
“The company is thinking about expanding ways to make it easier for customers to buy homes,” Curran said. Standard Pacific already operates a mortgage banking subsidiary, he said, and the S&L; is simply another means of making loans available to home buyers.
Standard Pacific specializes in homes that sell for about $130,000. The company reported 1986 net earnings of $25.7 million, up 33% from $19.4 million in 1985. Revenues for 1986 were $310.6 million, up 17% from $265.8 million.
