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Glendale Federal to Acquire TransWorld for $63 Million

Banking: The move is an attempt to increase its Small Business Administration loan portfolio.

November 05, 1996|BARRY STAVRO | TIMES STAFF WRITER

As part of a drive to boost its presence in the small-business market, Glendale Federal Bank said Monday that it will pay $63 million to buy TransWorld Bancorp of Sherman Oaks, which specializes in Small Business Administration loans.

Glendale Federal will pay $18.25 per share for TransWorld's stock, which climbed $1.625 per share on news of the deal Monday to close at $17.375 on Nasdaq.

Founded in 1953, TransWorld operates 12 branches in the San Fernando and Santa Clarita valleys and in Ventura County, with total assets of $375.3 million. Glendale Federal expects to keep open most of the TransWorld offices.

TransWorld has a $136.4-million loan portfolio, with 79% of the loans made to local businesses, said Ken Preston, a Glendale Federal spokesman. Most of TransWorld's customers are businesses with less than $10 million a year in sales, he said.

Glendale Federal also wanted TransWorld because it's one of the bigger generators of SBA loans in California, a market Glendale Federal is not active in. TransWorld's current SBA loan portfolio is $19.5 million.

The acquisition, subject to regulatory approval, is expected to close by the second quarter of next year.

In recent months, Glendale Federal has run an aggressive ad campaign to win over checking account customers from Wells Fargo, and has pushed to lure medium-sized businesses to transfer their loans to Glendale Federal.

Retail banking is "one of the areas we want to expand our business," Preston said.

Glendale Federal's stock closed Monday at $18.375 per share, up 25 cents, on the New York Stock Exchange.

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