Golden State Shareholders OK Merger With CalFed

Golden State Bancorp shareholders approved the thrift’s $1.8-billion merger with the parent company of California Federal Bank on Monday, a transaction that would create the second-largest U.S. savings and loan.

Glendale-based Golden State, the parent of Glendale Federal Bank, received proxies representing about two-thirds of outstanding common shares, with about 98.4% voting in favor of the merger. The transaction is expected to close in mid-September.

The combined institution would have about $52 billion in assets, $28 billion in deposits and 370 branches in California. It would rank as the state’s fourth-largest deposit holder. Among U.S. thrifts, only Seattle-based Washington Mutual Inc. would be larger.

Current shareholders would hold 58% of the combined thrift. San Francisco-based CalFed’s owners, financier Ronald Perelman and Texas banker Gerald Ford, would have a 42% stake. CalFed’s management would run the institution, and Golden State Chief Executive Stephen Trafton would supervise pending breach-of-contract lawsuits against the U.S. government.

Golden State shares fell 56 cents to close at $21.75.

Golden State has sued the federal government for breaking a promise to let part of the premiums from acquisitions carried out in the 1980s be counted as capital.

Congress prohibited the use of such capital, known as “supervisory goodwill,” in the 1989 savings and loan bailout law. That forced some thrifts out of business and made Golden State and other thrifts shrink or raise new capital.

Federal courts found the government liable in Golden State’s case. A trial in the U.S. Court of Claims is considering the amount of damages, if any, to award the thrift. Golden State is asking for $2 billion. Trafton said he expects the court to rule on damages in about November.