Bent on becoming a $1-billion institution by February, Guardian Savings & Loan in Huntington Beach has reached a tentative agreement to purchase Universal Savings Bank in Orange.
Although the purchase price is not being disclosed yet, it is expected to be a little more than $11 million. That is the approximate value of the institution to its Australian owner, Unity Corp. Ltd.
The purchase is subject to completion of a final agreement and to approvals from state and federal regulators.
The deal would give Guardian more than $800 million in assets. The S & L expects to continue expanding to about $1 billion through internal growth, said Guy Garner, Guardian’s director of marketing.
Garner would not comment on possible layoffs at Universal, which has 130 employees, but he said Guardian intends to keep all nine Universal branches open.
Guardian, which opened five years ago today, has six branches and will open a seventh in January, when it expects to move into the 15-story building it bought earlier this year from Charter Savings Bank for $55 million, Garner said.
The S & L is owned by former real estate developer Russell M. Jedinak and his wife, Rebecca M. Jedinak. He is chairman, president and chief executive; she is senior executive vice president. They could not be reached for comment Wednesday.
The purchase of Universal by Guardian would combine two very different organizations.
Guardian is a traditional S & L with no banking products such as credit cards, automated teller machines or checking accounts. It offers only savings accounts and home loans, and its branches are mainly near retirement communities.
It has 350 employees, most of whom originate home loans or service them.
Universal has ATMs and checking accounts and sells tax-deferred annuities. About half of its assets are in residential construction loans.
Both operations have enjoyed financial success.
Universal, with about $280 million in assets, expects to post nine-month earnings of more than $1 million when it releases financial results later this month. Guardian, with about $525 million in assets, earned $5.8 million in the first six months of the year. It also plans to release its results later this month.
The sale would be a setback for Unity Corp. and its chairman, Garry Carter of Sydney. The Australian firm bought the 34-year-old savings institution from its original owners for $10.2 million in December, 1986.
The purchase was to be the first step in Unity’s plans for extensive investments in the United States, one of its directors, Christopher Blaxland, said at the time. Blaxland took over as chairman of Universal.
But the company’s dream soured barely six months later. Unity, which had about $400 million in assets and investments in financial services, real estate and manufacturing, reportedly was strapped for cash at the time.
Suddenly, state regulators walked in and seized the S & L, putting it into a conservatorship. Regulators claimed that the S & L was about to send $10 million in loans to Carter in Australia.
The regulatory action was unprecedented because the S & L was a healthy institution. But the move fell apart in July, 1987, less than a month after the seizure, when a U.S. District Court judge in Los Angeles ended the conservatorship and returned the S & L to Unity.
Blaxland later stepped down as chairman in favor of a U.S. resident. Blaxland could not be reached for comment Wednesday.
In February, Guardian picked up $75 million in deposits at the failed Mt. Whitney Savings & Loan in Exeter when regulators decided to close the Central California thrift and transfer most of its assets to Guardian.
HOW THE COMPANIES COMPARE
Guardian Savings Universal & Loan Savings Bank Headquarters: Huntington Beach Orange Opened: Oct. 13, 1983 May, 1954 Offices: 6 9 Assets (June 30): $485.9 million $278.7 million Regulatory capital $18.1 million $10.15 million (June 30): Net income $5.8 million $798,000 (6 months ended June 30): Employees: 350 180 Owners: Russell and Rebecca In late 1986, acquired by Jedinak APA Holdings, an arm of Unity Corp. Ltd., Sydney, Australia.