WASHINGTON - Great Western Bank successfully bid for the lion's share of San Diego's failed Homefed Bank, which is being sold this week by the Resolution Trust Corp., sources said.
The Los Angeles Times reported Wednesday that Great Western, the nation's second-largest thrift, would pay about $155 million for 119 branches with more than $4 billion of deposits. An industry source said Great Western will pay $160 million.
The RTC, which took control of Homefed in July 1992, would not comment.
Announcement Due Friday
The agency is expected to wait until late Friday to announce the winning bid for the big thrift, which has $5.1 billion in deposits in 136 branches located primarily in Southern California.
James F. Montgomery, Great Western's chairman and chief executive officer, also declined to comment.
Great Western press spokesman Ian D. Campbell said, "We made it publicly known that we were interested in the whole Homefed franchise," more than a year ago.
Great Western wanted Homefed because, "One of our principal objectives as a business is to build our retail branch franchise in California and Florida, because we think that a more concentrated market presence is the way to run a retail branch system most profitably," Mr. Campbell said.
Homefed is "the largest remaining franchise available for purchase in California," Mr. Campbell said. "We have a relatively modest presence in San Diego currently."
Great Western has 19 branches in San Diego county now.
Other Bidders
Sources said Homefed's 17 other branches would go to several other bidders: Household Bank parent Household International, First Interstate Bank, and Home Savings of America parent H.F. Ahmanson & Co.
A spokeswoman for Home Savings confirmed that the thrift bid for Homefed. But she refused to comment further. Household and First Interstate could not be reached for comment.
Chatsworth, Calif.-based Great Western - with 395 branches - has $36 billion in assets and $28.7 billion deposits, according to William C. Ferguson, president of Ferguson & Co., a Dallas-based consulting firm.
|Filling Out Their Franchise'
If it acquired $4 billion of Homefed's deposits, it would remain the second-largest thrift in deposits. Home Savings has $39 billion in total deposits and $49.5 billion in assets, Mr. Ferguson said.
Alexandria, Va.-based consultant Bert Ely said Great Western wanted the Homefed branches because, "They are filling out their franchise."
He said that deposits fled Homefed after it failed, and that Great Western is "betting that they are going to be able to get back the customers that were lost."
Homefed had $12.4 billion in assets and $8.8 billion in deposits when it failed. The RTC hat already sold some of Homefed's Northern California branches.
Homefed has $11.2 million in uninsured deposits, according to the RTC. It has another $350 million in deposits over $100,000, the limit for federal deposit insurance.
Risk of Loss
But the RTC said those deposits its are insured, perhaps because they are individuals' deposits that are grouped in large chunks by brokers, secured deposits, or joint, trust, or custodial accounts.
The RTC is selling only the insured deposits. It has not notified uninsured depositors that they could lose money in the deal.
Great Western would add Homefed's 58 San Diego branches to its network, for a total of 77 branches there. The other 61 Homefed branches Great Western will gain are in five different Southern California counties, the L.A. Times reported.
Several large California banks and thrifts submitted bids for Homefed before the Nov. 19 deadline, sources said.
Keen Interest in San Diego
The most intense interest was in San Diego, Homefed's headquarters, where there are 57 branches with $2.1 billion in deposits.
The RTC accepted bids on Homefed in its entirety as well as on 18 clusters of its branches.
Other bidders were said to be Wells Fargo Bank, Bank of America, and several smaller institutions that bid for other California branch clusters near them. Home Savings was extremely disappointed that Great Western had apparently won the bidding for most of Homefed, a California source said.
The nation's largest thrift wanted many more branches than it got. "They were very interested," the source said.
