Primark Financial Services Inc. said yesterday that it has agreed to sell its savings and loan institution in Newport Beach, Calif., because new operating regulations have impeded the growth of the thrift.
McLean-based Primark would not disclose the terms of its sale of Westmark Savings Bank to Sherman Oaks Financial Corp., an organization formed by investors primarily to purchase Westmark Savings.
"Due to the imposition of many new operating regulations within the savings and loan industry, the growth potential of Westmark Savings Bank is less than we had anticipated," said Paul Naughton, Primark's chief executive officer.
Primark Financial Services, which lost $1.2 million last year, operates insurance companies, mortgage lenders and Westmark Savings. It is a subsidiary of publicly traded Primark Corp., a diversified energy and financial services holding company.
Steven L. Schneider, spokesman for Primark Corp., said that the year-old savings and loan had $2.5 million in equity but its growth was impeded by the increased regulation of thrifts during the past year in light of the savings and loan crises in Ohio and Maryland.
"When we first started, there was a trend toward deregulating [the savings and loan industry]," said Schneider. "Now there's sort of a re-regulation of how fast [thrifts] can grow, and the net worth and actual reserve requirements are increasing."
The Federal Trade Commission last month approved Primark Corp.'s offer to acquire the Aviation Group Inc., a Raleigh, N.C.-based air cargo and aircraft operations firm with about $18 million in annual revenue.
The purchase further diversifies the company's holdings in the nation's service industry. Some of the company's current properties include Michigan Consolidated Gas Co., a natural-gas distribution company serving about 1 million residential and commercial customers in Michigan; Primark Leasing Corp., which leases gas storage facilities; Hospital Satellite Network Inc., a telecommunications and information service for the health-care industry and Primark Financial Services.