Financially Troubled Central S&L; of San Diego Acquired by Coast Savings

Coast Savings & Loan of Los Angeles on Friday acquired financially troubled Central Savings & Loan Assn. from federal regulators, who have been operating the San Diego-based S&L; for nearly two years.

As part of the deal, the Federal Savings and Loan Insurance Corp. has agreed to make an undisclosed capital contribution to Coast, provide capital loss protection and indemnify Coast against “undisclosed liabilities and litigation,” according to a spokeswoman for the Federal Home Loan Bank Board, which approved the deal on Friday.

Central had a negative net worth of $56.3 million in May, 1985, when the FHLBB placed the ailing institution in a “management consignment program,” which keeps a troubled S&L; operating. The FHLBB then contracted with Arizona-based MeraBank to operate Central.

Central reported $1.8 billion in assets and a regulatory net worth of negative $74.8 million on Sept. 30. Central reported a $74-million net loss for 1985 and has lost more than $200 million during the past five years.

Federal regulators and Coast executives on Friday declined to describe how much of Central’s negative net worth would be absorbed by the FSLIC as part of the acquisition deal.

Coast, the state’s 11th-largest S&L; with $9.2 billion in assets and 93 offices, will acquire Central’s 46 offices. Coast officials said the acquisition will make it the state’s 10th-largest S&L.;