GLENFED TO BUY TRANSWORLD : BANK SEEKING TO BOLSTER BUSINESS LENDING.

Byline: Deborah Adamson Daily News Staff Writer

Glendale Federal Bank is buying TransWorld Bancorp, parent of TransWorld Bank, for $63 million, officials said Monday.

TransWorld branches will be converted to GlenFed offices after the deal closes by the second quarter of 1997, pending shareholder and regulatory approvals.

Officials said there might be a few branch closings and layoffs at TransWorld. But they said TransWorld's Pacoima branch, the only bank in that community, will not be closed.

GlenFed sought the purchase because of TransWorld's strength in business lending, an area that it is trying to develop.

``They have a very nice base of business customers, and it's a very complementary operation to what we are trying to achieve in our business banking development,'' said Richard Fink, chief credit officer of GlenFed.

``In particular, they are a pretty well-established (Small Business Administration) lender, and we have not yet started our SBA program. They will provide us with the expertise and personnel necessary to get started in SBA lending.''

Dan Carter, a banking analyst for International Trading Group in Naples, Fla., said the purchase is part of GlenFed's strategy to stay competitive.

``You want to have growth,'' he said. ``You can't stay stagnant.''

GlenFed, one of the nation's biggest thrifts and known for its aggressive ads against its competitors, is continuing to look at acquisition opportunities, Fink said.

Eighteen months ago, GlenFed began its conversion from a savings and loan to a community bank, which allows it to boost its commercial lending.

``Basically, we believe that the old traditional thrift business is not an economically viable business to be in,'' Fink said.

GlenFed has most of its assets in home mortgages financed by deposit accounts. Competition in the housing market has made it difficult to raise interest rates. And the S&L must pay higher rates on savings accounts to be competitive with other investments.

The result is a smaller net-interest margin, or spread, officials said.

TransWorld, by contrast, is a commercial bank with a specialty in small-business lending.

David Hender, vice chairman and chief executive officer, said the bank accepted GlenFed's offer because the price was right.

``It's a benefit to shareholders,'' he said. ``It's a very good price.''

GlenFed will pay $18.25 per share for outstanding TransWorld shares.

Customers of TransWorld - with branches in the San Fernando and Santa Clarita valleys and Ventura County - will benefit from GlenFed's larger network and capital base, Hender said.

The acquisition will wipe out the 43-year-old TransWorld name.

After the purchase, TransWorld Chairman Louis Galen will retire. Hender will stay on for a year as a consultant. It is not yet clear what role, if any, Hender will play after that.

GlenFed's stock inched up -1/4 to close at 18-3/8 Monday. TransWorld shares rose 1-5/8 to close at 17-3/8.

THE FACTS

Glendale Federal Bank

Headquarters: Glendale

Branches: 152

Employees: 2,400

Assets: $15 billion

TransWorld Bancorp

Headquarters: Sherman Oaks

Branches: 12

Employees: 240

Assets: $375 million

CAPTION(S):

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Box: (Color) THE FACTS (See text)