Superthrifts
   
  With more sellers than buyers, thrifts are going cheap. Some larger thrifts and some conventional banks are exploiting this as an opportunity to enlarge their asset and customer base. These "superthrifts" are busy acquiring weaker thrifts and small community banks in an effort to grow to a size that can compete head-on with commercial banks.

One such superthrift is AH Ahmanson & Co, previously the country’s largest thrift, based in Irwindale, California. Assets: $50 billion. 15% return on equity.

Another superthrift is Seattle’s Washington Mutual. Assets: $45 billion. 18% return on equity.
   
  Recently, these two titans clashed in an attempt to acquire Los Angeles thrift Great Western Finance. Assets: $41 billion.

AH Ahmanson launched a hostile takeover bid, but in the end Great Western agreed to be bought out by Washington Mutual. The new conglomerate has an asset base of $87 billion, large enough to compete in the market with commercial banks. AH Ahmanson lagged in offering new, innovative banking products and simply could not stay the course throughout such a giant hostile acquisition.

To compete, AH Ahmanson’s best bet would be to acquire Golden West Financial, the country’s third largest thrift.

Of course, size alone is no guarantee of success. AH Ahmanson and Washington Mutual, along with other superthrifts like Charter One, TCF, and People’s Heritage, have transformed their customer bases and services options so radically that many new customers may be unaware that they are banking with a thrift.