Pacific Savings Bank Put Up for Sale by Regulators
Federal regulators on Friday put “For Sale” signs on insolvent Pacific Savings Bank and four other large savings and loans nationwide that regulators want to move as quickly as possible into new hands.
Pacific Savings in Costa Mesa, thought to be a “best buy” among failed S&Ls; in California last year, is one of 10 insolvent thrifts that have been put up for sale in the last three weeks.
David C. Cooke, executive director of the federal Resolution Trust Corp., said the institutions have attracted “considerable investor interest” and are likely to be sold quickly.
The federal agency was created last month to dispose of failed S&Ls.; It controls more than 260 thrifts and, so far, has closed 11 small S&Ls;, including Perpetual Savings Assn. in Santa Ana.
On Aug. 30, the RTC put on the block five large institutions, each with more than $1 billion in assets. In addition to Pacific Savings, this week’s batch of big thrifts includes Freedom Savings & Loan in Florida, Hill Financial Savings in Pennsylvania, Peoples Heritage Savings in Kansas and University Federal Savings in Texas.
Pacific Savings, with more than $1 billion in assets and nearly $1.3 billion in liabilities at the end of June, is the only California S&L; among the 10 institutions put up for sale. About 20 California thrifts are under RTC’s control.
Cooke said the “structure” of the sales would not require lengthy negotiations. He declined to elaborate.
Pacific Savings lost more than $262 million in the last six years and $10 million more in the first six months of this year. The losses mounted after the S&L; adopted a business strategy that nearly killed off a thriving network of more than 60 branches in favor of commercial lending in California and speculative investments in Texas and other Southwest states.
Managers installed by the bank board in June, 1987, revived its moribund network of 11 branches, resumed home-lending operations and introduced several new products, such as insurance, to try to plug the red ink flowing from the earlier losses.
