Anderson moves to shore up Topa units.

Savings bank, thrift post losses thus far this year

Troubled Topa Savings Bank and Topa Thrift & Loan Association "have made the turn" toward recovery, according to the owner, beverage/finance tycoon John E. Anderson.

Century City-based Topa Savings slashed bad assets - delinquent loans and repossessed real estate - by 56 percent in the last year, said an official of that institution.

And Anderson said he pumped $11 million in fresh capital into the Beverly Hills-based thrift and loan.

"Over the past two or three years, I've invested about $15 million or $20 million in the savings bank and I've invested at least that or more in the thrift and loan," he said.

Anderson said in the last several months it appears that the Los Angeles County economy "has bottomed out" and the pace of new bad loans has slowed. He said, too, he was hopeful about the companies' future because both are making money on an operating basis.

He said he has "never" considered allowing the thrift and loan ($266 million in assets) or the savings and loan ($483 million in assets) to fail and be seized by regulators.

"We are not the kind of people who just walk away from our problems and throw in the towel," Anderson said. "We put in the money and face up to our responsibilities and we think we have made the turn."

Losses continue

On the downside, however, both institutions reported massive losses for the first six months of 1995 (third-quarter figures were not yet available). And both are operating under strict orders from their respective regulators.

Topa Thrift & Loan posted a second-quarter net loss of $891,000 compared to a year-earlier net loss of $316,00. It posted a first-half loss of $2.52 million vs. a loss of $535,000 the year before.

Topa Thrift & Loan has a very high level of non-performing assets (bad loans and repossessed real estate), according to the Bauer Reports. As of June 30, non-performers comprised $39 million, or about 14 percent of the company's $266 million, in assets.

A ratio of 2 percent or less of non-performing assets to total assets is considered healthy.

At Topa Savings Bank, the level of non-performing assets was a lot lower. As of June 30, about $18 million of its $483 million in assets were non-performing, a level of 3.7 percent.

Karen Dorway, director of research for the Bauer Reports, said both institutions have been flagged by the rating service as troubled since 1990.

Toss-up judgment

She added that, based on the latest information, it was hard to say which institution was in better financial shape. "The (thrift and loan) having the capital investment is a plus, but its delinquent loans are worse." she said.

Officials from the two institutions also said the companies are expected to post net profits in 1996.

They said their institutions are complying with regulatory orders. Topa Savings is under orders from the federal Office of Thrift Supervision to reduce problem assets and Topa Thrift & Loan is under an order from the Federal Deposit Insurance Corp. to inject $11 million in capital, which Anderson did.

The OTS order states that the company must hire an investment banker to sell it if it does not meet requirements to reduce problem assets.

But Anderson indicated he is not looking to sell either institution. "I'm not a seller," he said. "Anybody who knows me knows I'm a holder."

Anderson, 78, with a net worth of more than $550 million, is one of the wealthiest men in America and is ranked 13th on the Business Journal's List of wealthiest Angelenos.

He made his fortune distributing beverages, especially Budweiser beer, starting in the 1950s, according to a Forbes magazine report. He owns banks, including financially strong, downtown L.A.-based 1st Business Bank, insurance companies and real estate.

He is the namesake of UCLA's John E. Anderson School of Management, to which he gave $15 million in 1987, according to Forbes.

Anderson bristled at descriptions of Topa Thift & Loan and Topa Savings as "troubled." He noted that in the 1980s, Topa Thrift & Loan was one of the state's most profitable thrift and loans.

Anderson also pointed out "any bank which made loans in 1989, 1990 and 1991" on the Westside of L.A. has had financial troubles. He noted these institutions have either failed or got better and Topa Savings and Topa Thrift & Loan are recovering.

"We had some very wonderful years and we're going through some difficult years, and we're going to see this thing through," Anderson said.