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THRIFTS : U.S. Puts 14 Large S&Ls; Up for Sale : Bailout: Government hopes to get top-dollar for Gibraltar Savings were set back as three potential buyers dropped out.

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The government put 14 of its largest savings and loans, including Mercury Savings in Huntington Beach, up for sale on Wednesday as part of its ongoing effort to speed up the disposition of large problem thrifts it has seized.

Separately, the government’s attempt to fetch a premium price for another of its largest thrifts, Gibraltar Savings in Simi Valley, is running into trouble because three parties that at one time were among the most interested potential acquirers chose not to bid. Sources identified the three as Citicorp, BankAmerica and Toronto-based Royal Trustco, which owns Pacific First Bank in Costa Mesa.

The list of prospective buyers for Gibraltar is now believed to be limited to three parties, Wells Fargo & Co., Security Pacific and Great Western Financial. Golden West Financial, the Oakland-based parent of World Savings, looked at Gibraltar, but thrift executives said they would be surprised if it bid.

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The sale of Gibraltar, which was seized 15 months ago, could be an indicator of how well the government will do in selling its largest troubled thrifts. Thrift bidders are enjoying a buyer’s market, which does not bode well for the government’s efforts to get healthy prices. Bids for Gibraltar--which has $7.2 billion in assets, $5.7 billion in deposits and 83 branches--were due Tuesday, with an announcement of a winner expected by June 29.

The 14 thrifts put up for sale Wednesday by the federal Resolution Trust Corp., the agency charged with selling failed thrifts, have a total of $39.8 billion in assets and $31.3 billion in deposits. Eight have assets of more than $1 billion, including such large institutions as City Savings Bank in Bedminster, N.J.; Empire of America in Buffalo, N.Y.; Merabank in Phoenix, and Benjamin Franklin Savings in Portland, Ore.

The RTC is under increased pressure to speed the sale of large thrifts it controls. It is also under criticism that it has let some large thrifts, such as Gibraltar, deteriorate in value by running them under government supervision for too long.

“They have got to start getting rid of them,” said Alexandria, Va., thrift consultant Bert Ely.

An RTC spokeswoman said the agency hopes to sell the thrifts by year-end. Mercury is the only California thrift of the 14 for sale, although Empire of America has a California operation based in Woodland Hills known for ads that once featured Dodgers manager Tommy Lasorda.

Some institutions, including Mercury and Ben Franklin, were taken over only this year. Regulators, who have taken years to sell thrifts, are moving quickly on these S&Ls; because “there is real good franchise value, and the quicker we sell them, the higher value we’ll realize,” said Kevin Shields, an RTC spokesman in Denver.

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Regulators seized Mercury, which has $2.2 billion in assets and $1.8 billion in deposits, Feb. 23 after it ran out of capital under the tough standards imposed by last year’s thrift rescue law. The federal law, designed to bail out the industry’s deposit insurance system, put several hundred marginal thrifts under water with its new rules.

Mercury had been reeling for more than a year from accounting errors and adjustments it had to take. It lost $53.6 million in the last two years and started this year by announcing that two major commercial loans went sour, wiping out the institution’s already weakened capital. It’s now in receivership.

Industry analysts speculated that Mercury, as well as a few other multibillion-dollar thrifts up for sale, has strong sale prospects because of its good branch network with solid deposits from loyal customers who live near the branches.

Those deposits generally cost less--a lower interest rate is offered--than large certificates of deposit brought in from money brokers or from thrifts’ own money-gathering desks. And healthy financial institutions are looking more for low-cost deposits than anything else.

“The main draw is deposits,” said James F. Wilson, an analyst with Montgomery Securities in San Francisco. “There’s no deposit growth out there in most markets, as far as internal generation of deposits goes. You have to buy it.”

Mercury’s co-founder and chairman, Leonard Shane, used novel approaches to round up local deposit customers and never relied on higher-cost brokered funds. That should make the institution’s 24 branches appealing, the analysts said.

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SAVINGS ASSOCIATIONS FOR SALE

The Resolution Trust Corp. has put 14 thrifts up for sale, including Mercury Savings & Loan Assn. of Huntington Beach.

Assets are in millions.

Total Institution Location Assets City Savings Bank Bedminster, N.J. $8,500.0 Empire of America FSB Buffalo, N.Y. 8,174.0 Merabank Phoenix, Ariz. 6,382.0 Benjamin Franklin FS&LA; Portland, Ore. 4,968.0 Homeowners Savings Bank Boston 3,625.0 Mercury S&LA; Huntington Beach 2,159.0 Sooner FSA Tulsa, Okla. 1,430.0 Great American FS&LA; Oak Park, Ill. 1,013.0 Midwest FSB Minot, N.D. 960.0 North Carolina FS&LA; Charlotte, N.C. 628.0 Yorkridge-Calvert FSB Baltimore 540.0 Arlington Heights SA Arlington Heights, Ill. 510.0 City FS&LA; Birmingham, Ala. 493.0 Capitol City FSA Austin, Tex. 409.0

Source: Resolution Trust Corp.

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