WASHINGTON -- American Savings Bank, the nation's fifth-largest thrift, is up for sale, Wall Street and Washington sources said Wednesday.

Texas billionaire Robert M. Bass is quietly exploring ways to cash in his investment in the Stockton, Calif.-based institution, the sources said.

Citicorp, the largest U.S. banking company, was approached by investment bankers about buying American but decided not to pursue a deal, several sources said.

Investment Banks Assigned

Citicorp refused to comment on the matter.

Keystone Holdings-Partners, the Fort Worth, Tex., investment group that owns American Savings, assigned two investment banking firms to explore sales options for the $17.1 billion-asset thrift about a month ago, the sources said. Mr. Bass leads Keystone.

Owen Blicksilver, a spokesman for Keystone, said, "The assignment that the investment bankers share is to evaluate the prospects for the institution and help Keystone determine an appropriate course of action."

Goldman, Sachs & Co. has joined longtime Keystone adviser Lehman Brothers Inc. to peddle the investment group's stake in American, sources said, Keystone reportedly prefers an outright sale but may consider an initial public offering if a sale cannot be arranged, they said.

'Exploring the Options'

Mr. Blicksilver, however, insisted: "There hasn't been any strategy decided on going into this exploration process. Exploring the options is just. that that it does not mean there is a decision to sell."

One of Keystone's options is to hold onto the thrift, Mr. Blicksilver stressed. "Routinely, the Bass interests look at the appropriate strategies for their investments," he said.

Keystone contributed $400 million to acquire the California thrift in 1988 when it was insolvent; the deal gave the government a share in the institution's proceeds. American got the equivalent of a 25% break from the taxes it would otherwise have to pay. American's chairman and chief executive officer, Mario J. Antoci, who joined the thrift in December 1988, has led its recovery. At the end of 1993, 3.72% of American's tangible assets were nonperforming, and the thrift had a core capital ratio of 5.3%. It had $112 million in net income last year and earned $30.4 million in the first quarter.

Antoci Led Turnaround

Several people familiar with the market for thrifts predicted Mr. Bass would have trouble selling the S&L outright. The difficulty would arise, they said, because American's size makes it too big for any but the largest thrifts to swallow.

And so far, commercial banks have shown no willingness to plunge into the California thrift market, they said. There's no evidence banks would start by gobbling up American Savings, and Citicorp's lack of interest highlighted that, the sources said.

A sale is further complicated because of American's unusual ownership structure, California sources said. If American were sold, the government would get a cash payment for the warrant it holds in American, Mr. Blicksilver said.

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