Ford Motor Co. has emerged as a serious contender to acquire Financial Corp. of America, parent company of American Savings & Loan Assn., industry sources confirmed Friday.
Now the nation's most profitable auto maker, Ford has become a financial services giant in recent years as well. Its car-finance arm has more than $40 billion in assets and its San Francisco-based savings and loan, First Nationwide Financial, has assets of more than $15 billion.
The news about Ford was first revealed by National Thrift News, an industry trade paper, in its edition due out on Monday. A source close to Ford confirmed the report.
Both Ford and a group of investors headed by former U.S. Treasury Secretary William E. Simon are believed to have developed plans for acquiring FCA. The Irvine-based financial institution needs more than $1 billion to bring it into compliance with regulatory standards of the savings and loan industry.
There was no official confirmation of the story. Officials at Ford, First Nationwide, and the Federal Home Loan Bank Board either declined comment or could not be reached.
The Simon group has confirmed its interest in FCA. Other interested parties are believed to be two large California financial institutions, one a savings and loan and the other a commercial bank.
American Savings, based in Stockton, is the nation's largest savings and loan, with $34 billion in assets. Its parent company has confirmed holding talks with several possible buyers, but has never disclosed their identities. A spokesman for American Savings continued to characterize all talks as "preliminary" and tentative.
"There are five major parties who are showing a high level of interest, even though the talks are still in the preliminary stage," FCA Chairman William J. Popejoy said in a phone interview on Friday.
It's unclear what a sale would mean for Popejoy, who has always said he would welcome outside capital but hopes that the savings and loan could survive as an independent financial institution. Popejoy was hired in the summer of 1984, when American Savings was on the brink of failure due to a deposit run.
Sees Little Conflict
Though deposits have stabilized, problems in American Savings' loan portfolio proved far worse than expected and have led to heavy losses. But American Savings does have some major attractions, the primary one being its retail branch network of 178 offices throughout the state.
Though Popejoy would not confirm the Ford report, he said he "didn't see that much conflict" between the American Savings branches and the 133 retail offices that First Nationwide has in California.
Should a deal for FCA be consummated by the end of June, it would be a major achievement for Federal Home Loan Bank Board Chairman Edwin J. Gray, the nation's top federal savings and loan regulator. Gray has made a top priority of finding a buyer for FCA before he leaves office on June 30.
Popejoy said, however, that it would "highly optimistic" to assume that even a preliminary agreement could be reached before Gray leaves.