Newport Beach-based savings and loan operator Downey Financial Corp. said Monday that it appointed Charles R. Rinehart as its new chief executive.
Rinehart, 61, is the former chief executive of H.F. Ahmanson & Co.’s Home Savings, which was sold to Seattle-based Washington Mutual Inc. in 1998.
He takes over from Thomas E. Prince, who had been serving as its interim chief executive since July, and who will stay on as a senior executive vice president.
Downey’s management shuffling last July saw the exit of long time chairman and cofounder Maurice L. McAlister, who owns 20% of its stock, and chief executive Daniel Rosenthal.
Michael D. Bozarth was appointed its new chairman.
Downey has been under pressure from bad mortgages caused by adjustable rates that became unaffordable for its borrowers when the mortgages reset at higher rates.
For August, the company said that 14.68% of its assets, which are mostly loans, were bad. This is down from 15.08% in July, and is its second consecutive monthly decline.
Downey experienced an outflow of deposits from nervous customers in July, which had tapered off the following month.
For the second quarter the company lost nearly $220 million as bad loans caused it to set aside money to handle future losses. A year earlier it had earned nearly $33 million.
Downey’s shares are down about 90% for the year, giving it a market value of $87 million.
