Coast Savings Negotiates With FSLIC to Buy Financially Ailing Central S

Coast Savings & Loan is negotiating with the Federal Savings & Loan Insurance Corp. to acquire financially troubled Central Savings & Loan, Coast said Wednesday.

San Diego-based Central was placed under federal supervisory control on May 31, 1985, after regulators determined that the S&L; had a negative net worth of $56.3 million. The Federal Home Loan Bank Board subsequently contracted with Arizona-based MeraBank to operate Central.

Received Some Bids

Federal regulators have been actively seeking a buyer for Central and a handful of other ailing California S&Ls; that are operating under a federal government “management consignment program.”

At least three companies are believed to have made bids for Central during the past year, but, so far, no buyer has surfaced.

Acquiring Central would be “extremely beneficial to our shareholders as well as Central’s customers,” according to Coast Chairman and Chief Executive Ray Martin.

Coast officials, however, declined to comment on how close they are to concluding negotiations with FSLIC. Martin said Coast is “still heavily engaged” in negotiations with FSLIC.

Central, with $1.9 billion in assets as of June, 1986, operates 46 branches in San Diego, Los Angeles and Orange counties as well as in the San Joaquin Valley. Los Angeles-based Coast, now the state’s 11th largest S&L;, has $8.8 billion in assets and operates 93 branch offices and 13 regional offices throughout California.

Invited Potential Bidders

Last June, federal regulators invited representatives from banks, S&Ls; and other financial institutions around the country to a private meeting where the potential bidders were given detailed financial information about Central and other financially troubled thrifts.

Regulators also made the S&L; more attractive to would-be buyers by issuing “net worth certificates” that wiped out the S&L;’s negative net worth.