Guardian Savings’ Deal to Acquire S&L; Hits Snags, Collapses

A tentative agreement calling for Guardian Savings & Loan in Huntington Beach to acquire foreign-owned Universal Savings Bank in Orange has collapsed, barely a month after Guardian announced the deal.

Executives for both S&Ls; said Friday that snags in the final agreement caused the collapse, but they would not specify what those snags were.

Termination of the deal sets back Guardian’s previously announced timetable for becoming a $1-billion institution by February. The S&L; had $538.8 million in assets at the end of September, said Guy Garner, director of marketing.

“There are other options,” he said. Those options include the possibility of acquiring other S&Ls; or branches of other S&Ls;, he said.

Guardian also expects to achieve a good bit of its growth itself, he said, pointing out that its net income for the first 9 months was $22.7 million.

Universal, meantime, is still looking for someone to acquire it, said Christopher Blaxland, head of the S&L;’s parent firm, APA Holdings. APA is an arm of Unity Corp. Ltd. in Sydney, Australia.

“We had several people who had contacted us before we reached the agreement with Guardian,” Blaxland said. “We have resumed talks with them.”

Universal’s assets dropped 6% to $262 million at the end of September from $278.7 million at the end of June. Its net income for the first 9 months was $1.3 million.

In explaining why Unity wanted to sell the S&L;, Blaxland would say only, “We wish to invest in areas other than the S&L; industry.”

Through APA, Unity bought Universal for $10.2 million in December, 1986, as the first step in extensive U.S. investments it planned to make. But Unity’s brush with state and federal regulators 6 months later apparently soured it on the industry.

In an unprecedented action, state regulators seized the healthy S&L; in June, 1987, and put it in a conservatorship, claiming Universal was about to send $10 million in loans improperly to the Australian chairman of Unity. A month later, in another unprecedented action, a federal court in Los Angeles ended the conservatorship and returned the S&L; to Unity’s control.