Agency Puts Another 59 S&Ls; on Block

Federal regulators hung out “for sale” signs Wednesday on 59 more failed thrifts, including four in Southern California.

The four are First Network Federal Savings Bank and Westwood Savings, both in Los Angeles; Western Empire Federal Savings & Loan in Yorba Linda, and Investment Federal Savings & Loan in Woodland Hills.

The aggregate amount of deposits held by the latest batch of thrifts for sale is $8.2 billion, though none of them has more than $500 million in deposits.

A week earlier, regulators put 14 large institutions with combined assets of $39.8 billion on the block. Those thrifts included Mercury Savings & Loan in Huntington Beach.

By the end of this week, the Resolution Trust Corp., the federal agency managing and selling failed thrifts, hopes to sell three more failed institutions. If it does so, it will reach its goal of 141 sales for the third quarter of the government’s fiscal year, which will end Saturday, said Kate Spears, an agency spokeswoman. Since it was created last August, RTC has sold 190 failed thrifts with total assets of $50.7 billion, she said.

One other California S&L; is among the thrifts put up for sale Wednesday. It is Westport Federal Savings in Hanford, Kings County.

Western Empire, which now has total deposits of $317.8 million, was a failing thrift that was rescued from the regulatory death knell in late 1988 when the New York investment firm of Castle Harlan Inc. bought it without federal assistance and based its revival on trading in high-risk, high-yield corporate securities known as junk bonds.

Last August, Congress ruled that thrifts would have to divest their junk bonds within five years as part of its massive thrift industry restructuring law. The junk bond market fell, sinking Western Empire. Regulators seized the thrift Feb. 16.

First Network, which now has $412.6 million in deposits, was seized April 20. Regulators promptly asked the FBI to investigate possible criminal wrongdoing at the thrift. The S&L; was headed by Carl M. Rheuban, a Westside businessman with close ties to Democratic politicians.

Westwood Savings, which has been in the hands of federal regulators for more than a year, was seized Feb. 17, 1989. The thrift now has $357 million in deposits.