Frustrated by their failure to block Glendale Federal Bank's proposed acquisition of a small bank, community groups say they will protest if Glendale itself goes up for sale.

In spite of their vocal criticism of Glendale's lending record in low- income neighborhoods, the Office of Thrift Supervision recently signed off on Glendale's purchase of Transworld Bancorp, Sherman Oaks, Calif.

The $63 million deal is scheduled to close in mid-May.

"The OTS decision may not be the same when Glendale is sold to a large bank," said Robert Gnaizda, general counsel of the Greenlining Institute, one of the groups.

"It's true that this acquisition (of Transworld) will not affect the marketplace, but with a big one there will be a different level of scrutiny. There always is."

Glendale Federal, based in the rebounding Southern California market, is viewed by many analysts as a prime acquisition candidate once its goodwill litigation with the federal government is resolved.

The Glendale-based thrift is expecting to receive between $1 billion and $2 billion from the government suit, which is slated to be resolved by the end of the summer.

Few would-be acquirers would likely make a move before then because of the difficulty of factoring the expected award money into an offer, analysts said.

But Mr. Gnaizda said he believes that a financial institution looking to acquire the $15 billion-asset Glendale might think twice because of the potential Community Reinvestment Act protests that would ensue.

"The CRA issues will look like a poison pill to any acquirers," Mr. Gnaizda said.

Glendale's chief executive officer, Stephen J. Trafton, said the company was not positioning itself for a sale.

However, Glendale Federal is moving forward with a variety of initiatives to continue its evolution from a traditional thrift into a commercial bank.

The acquisitions of Transworld and others like it in the past year have built the company's lower-cost demand deposits to 12.2% of total current deposits, from 8.6% in March 1996, Mr. Trafton said.

"We are very excited about our prospects, and the Great Western takeover isn't hurting us either," Mr. Trafton said.

He said that since nearby Great Western Financial Corp. became the target of a hostile takeover attempt three months ago, it has been a top source for both new customers and job applicants.

Glendale's goodwill litigation began in the early 1990s, after federal regulations caused accounting changes that led to substantial losses at many of the nation's thrifts, including Glendale.

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