Cenfed Financial Corp., Pasadena, Calif., continued on the merger path last month, agreeing to acquire $458 million-asset United California Savings Bank.

Cenfed is one of a small number Of healthy thrifts taking advantage of the depressed market in Southern California to grow through acquisition. The deal is its second in six months.

Cenfed, however, is primarily interested in increasing its core deposit base. Its management said the United deal is contingent upon the ability to sell substantially all of United's $321 million mortgage loan portfolio.

The deal will push Cenfed's asset size to about $1.75 billion, as much of the acquired deposits will be used to pay down existing short-term debt.

Cenfed will pay United's shareholders $1 million in cash and $6 million in new stock, which is roughly equal to 1.7% af United's total deposits.

The deal will add eight branches, all in suburban Riverside and Orange counties, giving Cenfed a total of 26. Until now, it has focused its branching in the Pasadena area. The acquisition marks its entry into sprawling Riverside County, one of Southern California's fastest growing areas in the 1980s.

"This acquisition in in line with our business strategy of enlarging our lending territories ... and increasing our retail deposit base," said D. Tad Lowrery, chief executive of Cenfed.

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