SAN DIEGO — Determining that it was a "marriage made in heaven," directors of Los Angeles Federal Savings Bank have agreed to merge with San Diego-based Great American First Savings Bank.
Los Angeles Federal, with $664 million in assets, will become the Los Angeles Federal Savings Bank division of Great American, which has assets of $7.6 billion.
Los Angeles Federal officials have searched for the past three months for a potential merger partner, deciding on Great American because of its strong presence in Orange County and because of L.A. Federal's presence in Los Angeles.
Regulatory pressure played no role in the merger agreement, both companies said.
"It was a marriage made in heaven," said Los Angeles Federal President Charles B. Shryock, who will become a first vice president of Great American. "The small guys and the big guys will always make it, but the medium-size firms (such as ours) will have trouble."
Great American Chairman and Chief Executive Gordon C. Luce said that Los Angeles Federal's branch network "fits very well" with his bank's.
Combined, the two institutions will have 137 offices--56 in San Diego, 21 in Los Angeles and 20 in Orange County.
Los Angeles Federal Chairman Jack Baillie will join Great American's board, and director Richard Terkel will become a director emeritus of the San Diego firm.
Los Angeles Federal's real estate portfolio was caught in the high-interest-rate pinch of the early 1980s. As a result, Los Angeles Federal hasn't had a profitable year since 1981.
Time to Strike
The year-to-date loss this year is about $150,000, Shryock said, although the third quarter produced $880,000 in earnings, and officials decided that "now was the time to strike" regarding a merger.
State and federal regulators must approve the merger. Los Angeles Federal, a mutual association owned by its depositors, will technically become a public company just before the merger. It will then offer its depositors Great American stock valued at about $7 million to finalize the merger.
Great American is awaiting approval on another, unrelated merger, with Home Federal Savings & Assn. of Tucson, which has $2 billion in assets.
Both mergers are expected to be completed in the first quarter or early in the second quarter of 1986, Great American officials said.