Golden West Financial Corp. on Friday said its board has authorized the company's repurchase of up to 3.2 million shares, or 5% of its outstanding common stock.

The move marks the first time a major thrift has taken such a step.

Golden West is one of the industry's largest thrifts, with $27.5 billion of assets.

It has the largest market value among thrifts, at $2.7 billion.

The Oakland, Calif.-based company had about 64 million common shares outstanding al Sept. 30. Company officials could not be reached for comment by press time.

Golden West can undertake the repurchase program because it is very well capitalized, has strong earnings, and is very picky about purchases it might choose to make, according to Campbell Chaney, analyst with Dakin Securities Corp. of San Francisco.

But the company is unable to generate enough profitable balance sheet growth to prevent the further buildup of capital.

The thrift has been outbid by banks for a number of possible acquisition targets, which has prevented it from buying a stream of earnings to bolster the balance sheet.

Golden West had a 6.4% tangible equity to asset ratio at Sept. 30, and a 16.36% total capital ratio at June 30, the most recent date that information was reported.

The thrift earned $205.8 million in the first nine months of the year.

Golden West shares were trading at $42.75 Friday afternoon, up 37 cents. If the shares were all bought at that price, the thrift would spend $137 million on the buyback plan.

Some healthy midwestern regional thrifts are believed to be weighing whether to start their own repurchase programs.

A flock of commercial banks already have stock repurchase plans in place to slow the growth of capital levels amid strong earnings prospects.

A stock repurchase is preferable to other methods of preventing an excess of capital from building up, according to Joseph Jolson, an analyst with Montgomery Securities in San Francisco.

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