Investors Put Up $3.5 Million to Buy Thrift : Westmark Savings to Move if Buy-Out OKd

A group of Los Angeles-area investors plans to buy fledgling Westmark Savings Bank of Newport Beach for $3.5 million in cash.

The buyers, organized as Sherman Oaks Financial Corp., plan to move the thrift’s headquarters to the San Fernando Valley and change its name to Sherman Oaks Savings Bank.

The group decided to buy Westmark when it seemed likely that its own application to form a new S&L; would be denied by the Federal Home Loan Bank Board, said Benjamin Loveless, president of Sherman Oaks Financial.

Before the proposed acquisition, which requires federal and state approval, Westmark had total assets of $35.8 million and a net worth (assets minus liabilities) of $2.1 million, according to June 30 figures, the latest available, from the FHLBB.

Westmark operates like a mortgage broker, reselling most of its loans. The California-chartered institution was founded in June, 1984, by its current owner, Primark Financial Corp. of McLean, Va., a unit of Primark Corp., a gas utility holding company. Westmark has just one office and gets more than 80% of its deposits from “jumbo” certificates of deposit, Loveless said.

But he said that the bank has a strong spread of 3.5 percentage points between its cost of funds and its yield on assets and that the purchase was not in any way the result of regulatory pressure.

Sherman Oaks Financial is a private company comprising fewer than 20 investors, Loveless said. If all goes according to plan, he added, the acquisition should be completed in less than nine months.