BANKING / FINANCE : Moody’s Raises American Savings’ Grade--to an A3

Image is a sought-after commodity in the savings and loan industry, and American Savings Bank just got its image shined a little bit.

The Irvine thrift, one of the nation’s largest with $16.6 billion in assets, won an increase in its rating from Moody’s Investors Service for long-term certificates of deposit, typically those with terms of more than one year.

Moody’s gave American its A3 rating--an upper-medium grade--from Baa1.

In improving the rating, Moody’s praised American’s quality of assets and management and noted that the thrift exceeds federal capital regulations.

The rating has little actual import for most depositors with insured accounts. But for creditors and depositors with $1.6 billion in uninsured amounts--or about 11.9% of total deposits--the rating shows that the company’s likelihood of staying around for a long time has improved.

“The real importance to us is the overall impact it has on retail customers,” said Robert Barnum, American’s chief financial officer. “We have an independent third party making a determination of the company’s strength. Usually, the rating companies like to see five years of good operations before they upgrade ratings. But this one came after only two years, and that’s impressive.”

American Savings Bank was created in the sale of the failed American Savings & Loan to the Robert M. Bass Group in Fort Worth in the closing days of 1988. The good assets were transferred to the new bank and the bad loans and investments were put in New West Federal Savings & Loan, a self-liquidating S&L; operated by another Bass subsidiary.

Moody’s pointed out that American Savings Bank still “faces the challenge” of profitably replacing the $7.4-billion note it received from federal regulators to capitalize New West. But Barnum isn’t too worried.

The government is paying up to $1.5 billion a year to retire the debt, Barnum said, and American has been able to use the money well. Last year, the thrift funded about $4 billion in single-family housing loans, contrasted with about $2.5 billion for the previous year. That increase gave American the sixth-largest share of the home loan market in the state.