Office of Thrift Supervision
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Press Releases NEWS

 

FOR RELEASE at 4:30 p.m. EDT For further information
Tuesday, September 15, 1998 Contact: William Fulwider
OTS 98-71 202/906-6913

Washington Mutual Approved to Acquire Home Savings; OTS Grants Three New Charters

WASHINGTON, D.C., Sept. 15, 1998 - The Office of Thrift Supervision (OTS) today approved Washington Mutual's acquisition of Home Savings of America, combining the two largest thrifts into the seventh largest banking organization in the U.S. with combined assets of more than $150 billion. OTS also approved two new thrift charters and the conversion of a national credit union to a thrift. Approved were:

In addition to these actions, the agency's Northeast Region, under delegated authority, approved on September 14 Astoria Financial Corporation's acquisition and merger of Long Island Bancorp, Inc., and its Long Island Saving Bank.

Home Savings, Irwindale, Calif., will merge into Washington Mutual Bank, Stockton, Calif., and Home's parent company, H.F. Ahmanson & Co., will merge into Washington Mutual, Inc., a thrift holding company based in Seattle and regulated by OTS. Washington Mutual also owns a federally chartered thrift in Salt Lake City and a state-chartered savings bank in Seattle.

Washington Mutual, the holding company, has nearly $97 billion in assets, and Ahmanson has about $56 billion. Together, they have more than 21,000 employees. The Stockton-based Washington Mutual Bank has more than $70 billion in assets, $39 billion in deposits and operates in 21 states, although the bulk of its business is conducted through 568 consumer financial centers located throughout California and Florida. Home has nearly $53 billion in assets, $37.6 billion in deposits and operates through 370 branch offices in California and Texas, plus 126 loan production offices in nine other states.

In approving the acquisition, OTS said it took into consideration anti-competitive and fairness issues, as well as CRA protests that were mounted after the merger plan was announced. OTS said that a Department of Justice antitrust/anti-competitive review found the transaction to be acceptable, subject to conditions relating to the subsequent use of branches by other FDIC-insured institutions and to not entering into any new non-compete agreements with loan officers or branch managers. OTS said its own analysis determined the acquisition to be fair to all concerned, including account holders, borrowers, creditors and stockholders.

In reaching its decision on the application, the agency placed substantial weight on the institution's past record of CRA performance, its expected future performance, and a commitment that addresses a concern raised by several commenters and OTS. The institution will notify OTS at least 120 days prior to closing or moving branches in low-income, moderate-income, or predominantly minority census tracts. The notification will include the results of the institution's discussions with community groups about the impact of any branch closures.

Washington Mutual must adhere to all terms, deadlines, requirements and conditions pertaining to Year 2000 conversion guidance issued by OTS and the Federal Financial Institutions Examination Council (FFIEC).

A condition covering Year 2000 compliance also is included in approval orders for the new charters granted to New Republic, Nittany and Beacon and for Astoria's acquisition of Long Island Savings. The Y2K condition has become one of the standard conditions of OTS approval. Additional specific conditions are imposed on a case-by-case basis, depending largely on the operating plan of the institution.

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The Office of Thrift Supervision (OTS), a bureau of the U.S. Treasury, regulates and supervises the nation's thrift industry. OTS' mission is to ensure the safety and soundness of thrift institutions and to support their role as home mortgage lenders and providers of other community credit and financial services.For copies of news releases or other documents call PubliFax at 202/906-5660, or visit the OTS web page at www.ots.treas.gov.


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OFFICE OF THRIFT SUPERVISION

 

APPROVAL OF APPLICATIONS FOR PERMISSION TO ACQUIRE A FEDERAL SAVINGS BANK

Order No.98-101

Date:September 15, 1998

Washington Mutual, Inc., Seattle, Washington ("WMI"), and New American Capital, Inc., Seattle, Washington ("NACI") have applied to the Office of Thrift Supervision (the "OTS") pursuant to 12 U.S.C. Sections1467a(e) and 1828(c), Section 10(e) of the Home Owners' Loan Act ("HOLA"), 12 C.F.R. Sections 574.3(a), 574.6(a)(4) and 563.22(a) to acquire Home Savings of America, FSB, Irwindale, California ("Home"); and to merge Home with and into NACI's wholly owned subsidiary, Washington Mutual Bank, FA, Stockton, California ("WMBFA"), with WMBFA as the surviving entity (the "Application"). Home is currently a subsidiary of H. F. Ahmanson & Company ("Ahmanson"). As part of the aforementioned transaction, Ahmanson will be merged with and into WMI, with WMI as the surviving entity.

The OTS has considered the Application under the standards set forth at 12 U.S.C. Sections 1467a(e)(2) and 1828(c), Section 10(e) of HOLA and 12 C.F.R. Sections 574.7(c) and 563.22(d), and under the Community Reinvestment Act, 12 U.S.C. Section 2901 et. seq., and the OTS regulations thereunder, 12 C. F. R. Part 563e. In addition, the OTS has considered a digest from the West Regional Office, an analysis prepared by Corporate Activities, an analysis from Compliance Policy, a legal opinion from the Business Transactions Division and a letter dated September 11, 1998, from WMI making certain commitments on behalf of WMI and WMBFA.

Based on the foregoing statutes, regulations, the digest, analyses, legal opinion and the September 11 letter, the OTS finds that the Application satisfies the applicable approval standards, provided that the conditions set forth below are satisfied in a manner satisfactory to the West Regional Director or his designee ("Regional Director"). Accordingly, the Application is hereby approved, subject to the following conditions:

  1. The proposed transaction shall be consummated between 15 days and 120 days from the date of this approval, unless an extension is granted for good cause by the Regional Director;
  2. Prior to consummation of the proposed transaction, WMI, NACI, Ahmanson, WMBFA and Home as applicable, must receive all other required regulatory approvals or non-objection or no action letters for other aspects of the acquisition over which OTS does not have primary jurisdiction;
  3. On the business day immediately prior to the acquisition of Home, the chief financial officers of WMI, NACI, Ahmanson, WMBFA and Home shall certify, in writing, to the Regional Director that no material adverse events or material adverse changes have occurred with respect to the financial condition or operations of their respective companies subsequent to the date of the financial statements submitted as part of the application;
  4. No later than 5 days from the date of consummation of the Holding Company Merger, WMI shall file with the Assistant Regional Director a certification by legal counsel stating the effective date of the acquisition, the exact number of shares of Ahmanson stock acquired and the number of WMI shares issued in exchange, the amount paid in cash for fractional shares and that the transaction was consummated in accordance with all applicable laws, regulations and approval conditions. In addition, a similar certification stating the Merger was consummated consistent with all applicable laws, regulations and approval conditions shall be submitted within 5 days following completion of the merger of Home into WMBFA;
  5. No later than 30 days following consummation of the Merger, WMBFA shall advise accountholders whose withdrawable accounts in WMBFA would exceed $100,000 as a result of the merger of the effect of the transaction on their insurance coverage;
  6. Within 30 days from the date of consummation, WMI shall submit an independent accountant's opinion verifying the accounting method utilized for the transaction and opining that the acquisition was accounted for in accordance with generally accepted accounting principles;
  7. Within 30 days following completion of the Merger, WMBFA shall submit a statement of financial condition showing the institution immediately prior to the merger and a similar statement reflecting the combined thrift immediately following the merger;
  8. With regard to the existing California offices of WMBFA, and those California Offices to be acquired in the subject transaction, WMBFA may not impose any conditions, other than currently exist in deed or lease agreements, that would preclude the future use by an FDIC-insured institution of any branch offices that are closed and leased or sold by WMBFA. Such restrictions shall remain in effect for three years following consummation of the acquisition;
  9. WMI and WMBFA shall suspend the operation of any existing non-compete agreements and not enter into any new non-compete agreements with any current loan officer or branch manager of Ahmanson or Home in California who would become an employee of WMBFA as a result of the acquisition. This condition shall remain in effect for 180 days following consummation of the acquisition; and
  10. WMBFA's Year 2000 Project Management Program must adhere to the terms, deadlines, requirements and conditions contained in the Year 2000 guidance issued by the OTS and/or the Federal Financial Institutions Examination Council ("FFIEC") including the May 5, 1997 FFIEC Year 2000 Project Management Awareness statement, the December 17, 1997 FFIEC Safety and Soundness Guidelines Concerning the Year 2000 Business Risk, the March 17, 1998 FFIEC Guidance Concerning Institution Due Diligence in Connection with Service Provider and Software Vendor Year 2000 Readiness, the March 17, 1998 FFIEC Guidance Concerning the year 2000 Impact on Customers, the April 10, 1998 Guidance Concerning Testing for Year 2000 Readiness, the May 13, 1998 Guidance Concerning Contingency Planning in Connection with Year 2000 Readiness, the May 13, 1998 Guidance on Year 2000 Customer Awareness Programs and any subsequent OTS or FFIEC Year 2000 guidance, regulations or other requirements.

Any time period specified herein may be extended by the Regional Director, for good cause, for up to 120 calendar days.

By order of the Director of the Office of Thrift Supervision, or her designee, effective

                              Richard M. Riccobono

                              Deputy Director

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