S & L Merger to Close 21 O.C. Branches

Washington Mutual Inc., the nation’s largest savings and loan, said it will close 161 branches in California next year, including 21 in Orange County, to combine outlets too close to one another after its purchase of Home Savings of America.

The closures and other consolidations are expected to cost up to 3,500 bank employees their jobs and displace thousands of customers, although many are being moved to branches a few blocks away.

The largest number of closings will be in Los Angeles County, where 40 branches will be shuttered, followed by San Diego County with 22.

The consolidation continues the trend of a shrinking banking and thrift industry that has lost thousands of jobs as branches have been mothballed to cut costs.

In Orange County, banking industry employment has declined 22% to an average of about 17,400 so far this year from 22,300 in 1990, according to the state Employment Development Department. At the same time, the number of branch offices has been slashed by about a third to about 225, said Gary Findley, editor of Anaheim-based Findley Reports, a banking industry newsletter.

The toll has included nine branches closed in the county late last year after Washington Mutual acquired Great Western Bank and American Savings Bank.

Bank of America closed 11 county-based branches in the previous year, and Wells Fargo shuttered 25 branches in 1996 after it bought First Interstate Bank. In 1992, the merger of Bank of America and Security Pacific resulted in the closure of 40 branches in Orange County.

“There are a lot of unemployed bankers out there,” said Findley, who expects the head count to continue dropping. “Brick and mortar isn’t as important as it used to be,” he said. “The days when we had a bank on every corner will no longer be the case.”

Major banks like Washington Mutual continue to cultivate customers who bank by mail, computer and automated teller machines, which tend to be the most profitable accounts, Findley said.

Yet as the banking behemoths continue to slash away at the enormous overhead inherent in a branch-based system, opportunities are being created for smaller, community-oriented institutions, said industry consultant Kenneth Slezak of Vista Marketing in Irvine.

“Convenience is still the primary reason for choosing a bank,” he said. Washington Mutual will save money by closing branches, but Slezak believes it is risking the loss of valuable business as local banks arise and seize the chance to market themselves as more customer-friendly.

Several landmark Home Savings branches with their signature mosaics, murals and sculptures are among the bank offices that will be closed. They include six of Home Savings’ signature white-marble monuments in Santa Monica, Riverside, Grossmont, Woodland Hills and Chula Vista as well as its downtown Los Angeles headquarters. The buildings feature murals or external mosaics that depict scenes from Southern California life, such as farmers toiling in the fields and Spanish missionaries encountering Indians.

Customers at the Santa Monica bank Tuesday bemoaned the loss of their 29-year-old branch, which features a mosaic, stained-glass window and sculpture fountain of families cavorting at the beach.

“It’s stupid,” grumbled lifelong resident Tom Daspit, who said he enjoys gazing at the stained-glass beach scene while waiting for a teller. “It’s a gorgeous building.”

The branch’s customers will be moved less than a block away to a Washington Mutual office. In fact, 42% of the closing branches are being moved into other offices less than a quarter mile away, the bank said. The Santa Monica branch is being closed because of its lack of safe-deposit facilities and its limited number of teller windows--10 compared to the Washington Mutual branch’s 20.

But some customers had more aesthetic purposes for banking there.

“One of the reasons I came to Home Savings when I opened my account several years ago was because I was attracted to their buildings,” said Santa Monica customer Mark Senstad.

Washington Mutual says that customer amenities, visibility and parking determined which branches would stay and which would go. The buildings’ style and artwork were not a factor, said Washington Mutual spokesman Tim McGarry.

McGarry said the bank would try to find local community venues for the movable artwork, including sculptures and paintings that adorn most of the Home Savings branches, while searching for buyers who will preserve rather than raze the buildings.

“We’re making it a priority to find buyers that will keep the art intact,” he said.

Many of the buildings and mosaics were designed by Millard Sheets, an architect, muralist and teacher who is considered the father of the California Watercolor School. H.F. Ahmanson commissioned Sheets and his Scripps College colleagues in the 1960s to create buildings and artwork, which, in some critics’ eyes, became anachronistic as soon as they were built.

While other banks at the time aimed for a sleek, modernistic look, Sheets designed monuments to grandeur and stability.

Aaron Betsky, architecture curator at the San Francisco Museum of Modern Art, who once wrote that the Santa Monica building “looked like the tomb of Silent Majority,” nevertheless believes the branches had cultural and architectural significance in communities that were often devoid of other landmarks.

“They created an architecture that was grand, but in a populist way,” with marble to connote stability and gilt edges to denote wealth, Betsky said. “No one would argue that [the artwork] was the greatest quality. . . . It’s the kind of artwork and architecture that told you something about your community.”

The branches’ size has condemned them in an era when banks increasingly opt for efficiency and technology over architectural statements. Before the merger, Home Savings had leased space in the Santa Monica branch to a coffee shop in an attempt to increase foot traffic at the cavernous branch.

Still, there should be no shortage of potential buyers for the buildings. Brent F. Howell, a retail leasing broker for CB Richard Ellis, said he expects that many of the closed bank branches will be sold or leased relatively quickly, thanks to their locations at busy intersections and their large parking lots--two important criteria for retail tenants. The branches could be popular with expanding drugstore chains that offer drive-in pharmacies, he said.

“There always seems to be a new player that wants to come into the market,” said Howell of potential new tenants. “They are well-located properties and they continue to be in demand.”

Analysts generally expect a smooth transition for Home Savings customers, citing Washington Mutual’s relatively trouble-free combinations with Great Western Bank and American Savings Bank. Those mergers were notably free of the kind of technical glitches and customer defections that marred the Wells Fargo & Co. takeover of First Interstate Bank two years ago.

“Things have gone very smoothly in the conversion process,” said Joseph Morford, a bank analyst with Van Kasper & Co. in San Francisco. “I think that bodes well for customers of Home Savings.”

But because of Washington Mutual’s previous mergers, the overlap with Home Savings is high and about 15% of the combined companies’ 22,000 employees are expected to lose their jobs. Most of the cutbacks will be in administrative and back-office positions.

The layoffs are in addition to the 8,000 cutbacks expected as a result of BankAmerica Corp.’s merger with NationsBank Corp. and the 2,100 jobs to be lost to Wells Fargo’s pending combination with Norwest Corp.

Times staff writer Jesus Sanchez and special correspondent Stephen Gregory contributed to this report.

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Money Mergers

Banking mergers have reduced the number of employees in the industry in Orange County since the start of the decade. The trend:

1990: 22,341

1991: 20,875

1992: 20,791

1993: 20,566

1994: 19,008

1995: 17,116

1996: 17,016

1997: 17,033

1998: 17,388-

-Monthly average through August.

Source: Employment Development Department

Changing Accounts

Washington Mutual Inc. will close 21 branches in Orange County next year, combining branches too close to one another after its acquisition of Home Savings of America. The average distance between the offices to be closed and those into which they will be consolidated is a little more than half a mile. Here are the closures, which branches will replace them and the distance between:

ANAHEIM HILLS

Office Closing: Home Savings, 5731 Santa Ana Canyon

Consolidating Into: Washington Mutual, 5791 E. Santa Ana Canyon Road

Distance (miles): 0.02

BREA

Office Closing: Home Savings, 299 S. Randolph St.

Consolidating Into: Washington Mutual, 270 S. State College Blvd.

Distance (miles): 0.28

BUENA PARK

Office Closing: Washington Mutual, 8020 Stanton Ave.

Consolidating Into: Home Savings, 7964 Beach Blvd.

Distance (miles): 0.26

COSTA MESA

Office Closing: Washington Mutual, 234 E. 27th St.

Consolidating Into: Home Savings, 196 E. 17th St.

Distance (miles): 0.10

DANA POINT

Office Closing: Home Savings, 32595 Golden Lantern St.

Consolidating Into: Home Savings, 30202 Crown Valley Parkway

Distance (miles): 2.81

FOUNTAIN VALLEY

Office Closing: Washington Mutual, 18517 Brookhurst St.

Consolidating Into: Home Savings, 18975 Brookhurst St.

Distance (miles): 0.45

FULLERTON

Office Closing: Washington Mutual, 170 Laguna Road

Consolidating Into: Home Savings, 1235 N. Harbor Blvd.

Distance (miles): 0.60

*

Office Closing: Washington Mutual, 444 N. Harbor Blvd.

Consolidating Into: Home Savings, 1235 N. Harbor

Distance (miles): 0.60

IRVINE

Office Closing: Home Savings, 14477 Culver Drive

Consolidating Into: Washington Mutual, 5392 Walnut Ave.

Distance (miles): 1.44

LA HABRA

Office Closing: Home Savings, 100 E. La Habra Blvd.

Consolidating Into: Home Savings, 1300 W. Imperial Highway

Distance (miles): 1.25

*

Office Closing: Washington Mutual, 1201 W. Imperial Highway

Consolidating Into: Home Savings, 1300 W. Imperial Highway

Distance (miles): 0.06

LAGUNA HILLS

Office Closing: Home Savings, 24033 El Toro Road

Consolidating Into: Washington Mutual, 24085 El Toro Road

Distance (miles): 0.10

MISSION VIEJO

Office Closing: Home Savings, 24041 Marguerite Parkway

Consolidating Into: Washington Mutual, 27752 Vista del Lago

Distance (miles): 1.52

NEWPORT BEACH

Office Closing: Home Savings, 16 Corporate Plaza Drive

Consolidating Into: Washington Mutual, 551 Newport Center Drive

Distance (miles): 0.69

ORANGE

Office Closing: Washington Mutual, 2000 N. Tustin St.

Consolidating Into: Home Savings, 2233 N. Tustin St.

Distance (miles): 0.10

SAN CLEMENTE

Office Closing: Washington Mutual, 390 Camino de Estrella

Consolidating Into: Home Savings, 638 Camino de los Mares F140

Distance (miles): 0.57

SAN JUAN CAPISTRANO

Office Closing: Home Savings, 31888 Del Obispo St.

Consolidating Into: Washington Mutual, 31972 Camino Capistrano

Distance (miles): 0.24

SANTA ANA

Office Closing: Washington Mutual, 3929 S. Bristol St.

Consolidating Into: Home Savings, 3600 S. Bristol St.

Distance (miles): 0.36

Office Closing: Washington Mutual, 1701 N. Main St.

Consolidating Into: Home Savings, 1300 No. Main St.

Distance (miles): 0.31

SEAL BEACH

Office Closing: Washington Mutual, 2999 Westminster Blvd.

Consolidating Into: Home Savings, 13900 Seal Beach Blvd.

Distance (miles): 0.11

TUSTIN

Office Closing: Home Savings, 18356 Irvine Blvd.

Consolidating Into: Washington Mutual, 615 E. First St.

Distance (miles): 0.26

Source: Washington Mutual Inc.