Auction Seen for Ailing Coast Thrift: Bids Being Solicited for Central Savings & Loan, San Diego's Last Mutual
Hooper, Molly, American Banker
SAN FRANCISCO -- The financially troubled Central Saving & Loan Association of San Diego is expected to go on the auction block in a government-arranged sale to the highest bidder.
Although Central Savings officials would not comment on the plan, two other San Diego-based savings and loans said this week they have been invited to bid by the Federal Home Loan Bank of San Francisco. A secret bidders' conference is scheduled to be held within two weeks to provide confidential information on the thrift.
"The Bank Board has asked that the location and date not be given," said Melissa Keleher, a spokeswoman for Home Federal Savings & Loan Association, who said her thrift would have a representative at the meeting.
A spokesman for Great American First Savings Bank said it also would have a representative at the meeting, but declined to speculate whether the thrift would be interested in making a bid. The Federal Home Loan Bank Board has refused to comment on the matter.
Center Savings is California's 17th largest savings and loan, with assets of $2.4 billion and 48 offices, mostly in central and southern California.
Last May, Central disclosed that its net worth had dropped to just $14.3 million as of Dec. 31, 1983 -- less than a third of the 3% required by federal regulators. Rene Gentry, Central Savings' director of public affairs, said in a telephone interview this week that the thrift began suffering financial problems as early as 1981, with reserves dropping at a time of inflation and high interest rates. Stock Offering Failed
In an effort to strengthen its financial footing. Central last November tried to sell $51 million in stock to the public, but withdrew the offer after raising only $8.3 million from investors. Central is San Diego's last mutually operated savings institution. While its depositors and borrowers are the technical owners, in practice they exert little control.
In January, Central's board of directors fired president Daniel McSweeney, who had changed Central from a traditional home-mortgage lender to a company active in real estate development at a time of slow sales. …