HomeFed Moves to Shore Up Capital Base

The parent of troubled HomeFed Bank said Friday that it has retained an investment banker to help it explore ways of meeting capital requirements, including the possible sale of assets and branches.

HomeFed Corp., which operates the nation’s seventh-largest thrift, said it had retained Kidder, Peabody & Co. to help shore up its capital base. Buffeted by $535 million in losses over the past 18 months, HomeFed is short two of three minimum capital requirements.

Analysts have speculated that the thrift could soon be seized by regulators. One Wall Street analyst, who asked not to be named, said Friday that the S&L; has been in a “de facto conservatorship” since Thomas Wageman was named chief executive last month.

Analysts compared HomeFed’s Friday announcement to a similar action by Great American Bank in March, 1990. Four months later, Great American announced the sale of its California branch system to Wells Fargo Bank for $491 million. However, the sale did not save Great American; regulators seized the San Diego-based thrift earlier this month.

HomeFed’s prime assets are considered its San Diego County deposit base, its 208-office statewide branch network and about 9,500 net acres of developable land and home sites in California.

HomeFed has been trying for months to raise capital. Last March, former HomeFed Chief Executive Robert Adelizzi said the S&L; might spin off a portion of its S&L;’s real estate holdings to the public or to shareholders to raise cash. Adelizzi, who was forced to resign by federal regulators in May, was unsuccessful in the spinoff.

Robert Nichol, HomeFed’s chief financial officer, said Kidder Peabody had been charged with finding a way to raise the S&L;’s deficient capital ratios while somehow keeping the S&L;’s branch system intact.