Security Pacific Wins Bidding for Mercury : Thrifts: Regulators are expected to announce the sale of the insolvent S&L;’s 24 branches and $2 billion in assets today.
Federal regulators are expected to announce today the government sale of insolvent Mercury Savings & Loan Assn. to Los Angeles-based Security Pacific Corp., which outbid several other institutions for the Orange County thrift.
Industry sources said Thursday that the holding company for Security Pacific National Bank earlier this week won the bidding to acquire Huntington Beach-based Mercury’s 24 branches and most of its $2 billion in assets.
The branches are expected to be reopened Monday as offices of Security Pacific. Deposits will continue to be insured by the federal government up to $100,000.
Mercury, headquartered in Huntington Beach, was declared insolvent and seized by federal regulators in February. It has been operated since then under auspices of the Resolution Trust Corp., the federal agency charged with selling or liquidating government-run S&Ls.;
If the sale is completed today, it would mark one of the quickest sales ever of a thrift under RTC supervision. The agency is overseeing several hundred S&Ls; nationally, including 18 that have been offered for sale in California since June.
Edward Carpenter, a banking consultant with Southport/Carpenter Group in Santa Ana, said that several of his firm’s clients were active bidders for Mercury and valued the thrift for what is widely considered one of the industry’s better branch networks and customer bases.
Other bidders reportedly included Great Western Financial Corp. of Beverly Hills, American Savings Bank of Irvine and Santa Monica-based First Federal Savings Bank of California.
Officials at Security Pacific confirmed Thursday that the company, with nearly $95 billion in assets, had submitted a bid for Mercury. They declined further comment.
Security Pacific has been shopping for troubled thrifts this year. In June, the company acquired 83 branches of Gibraltar S&L.;
At RTC regional headquarters in Denver, spokesman Kevin Shields would not identify the winning bidder but confirmed that Mercury would be sold this month.
In a typical government sale of an insolvent thrift, the government keeps the S&L;’s bad loans, repossessed real estate and other “bad” assets while the acquiring institution gets the offices, equipment, deposits, and the “good” loans, real estate and other investments.
Mercury, founded in 1964, had grown to nearly $5 billion in assets by the mid-1980s and was considered a fairly conservative S&L; that eschewed some of the more unusual investments possible under California’s liberal thrift investment laws at the time and stuck with single-family mortgage lending.
Mercury began reducing its assets in the late 1980s to help it meet tightening government controls on capital. By the time it was seized in February, the S&L; had $2.2 billion in assets and $1.8 billion in deposits.
The losses that led to its insolvency didn’t come from the insider dealing and speculative investing that caused the ruin of many of the nation’s S&Ls.; Mercury was hurt by new federal accounting rules that required it to reduce the value of a number of investments on its books and set aside capital-depleting reserves to cover the difference.
