Regulators Expected to Sell Imperial Branches Today
U.S. banking regulators hope to complete the sale of Imperial Savings & Loan’s 78 branch offices in California today to a pair of out-of-town financial institutions, according to sources familiar with the planned sale.
If completed, the sale would split San Diego-based Imperial’s 78 branches between San Francisco-based Bank of the West and Household Bank, a subsidiary of Prospect Heights, Ill.-based Household International, according to the sources, who asked not to be identified.
Federal regulators declined Thursday to comment on the planned sale. Bank of the West did not return telephone calls and a Household spokesman declined to comment on the supposed sale.
But informed sources said that the federal Resolution Trust Corp. hopes to sell Imperial’s Southern California branches to one institution--evidently, Household Bank, a federally chartered savings bank--and its northern branches to Bank of the West.
The Imperial branch sale, if completed, would bolster the market presence of both institutions, S&L; industry analysts said.
Bank of the West, a community bank in the Bay Area with about $2 billion in assets, has about 80 branches in Northern California. Household Bank has 150 branches around the country and $8 billion in assets. However, just 12 of Household Bank’s branches are in California. The remainder are spread throughout Indiana, Kansas, Maryland, Ohio and Virginia.
Both Bank of the West and Household Bank have the financial backing needed to buy Imperial’s branches because they both have “parent corporations with deep pockets,” said Campell Chaney, a San Francisco-based banking industry analyst with Sutro & Co.
Bank of the West is owned by Banque Nationale de Paris, and Household Bank is a subsidiary of Household International, which also owns Household Finance, a nationwide consumer loan firm.
The price that each institution would pay for certain Imperial branches was unknown on Thursday. However, Chaney questioned whether regulators would be able to charge a premium for Imperial’s aging branch system. “While it’s got an extensive branch system throughout the state, (Imperial) is not in the best locations,” he said.
Imperial, with about $4.3 billion in deposits and $7 billion in assets, was seized by federal regulators in February, 1990. The thrift, which now has about 1,200 employees, was the largest financial institution in San Diego County ever to be seized by regulators.
The thrift’s financial problems were generated in part by a heavy dependence upon junk bonds. At one point, Imperial’s $1-billion junk bond portfolio made it the second-largest holder of junk bonds among the nation’s S&Ls.; Imperial also ran into trouble with car and mobile home loans.
The Resolution Trust Corp., which disposes of failed banks and S&Ls;, has been operating Imperial since it was seized.
Times staff writer James Granelli in Orange County contributed to this story.
