NEWPORT BEACH, Calif., July 25 (UPI) -- Downey Financial Corp., a Southern California thrift, has ousted two top executives and indicated it might be looking for a buyer, the Los Angeles Times said.
The lender, based in Newport Beach, with more than 170 branches in the region, said Thursday it was holding $1.9 billion in delinquent loans as of June 30. That represents 15 percent of its assets, and is about twice as much as Downey had reported six months earlier, the newspaper said.
Citing sources, the newspaper said Downey's board initiated the ouster of co-founder and Chairman Maurice L. McAlister, who had run the company for 50 years. Chief Executive Daniel D. Rosenthal, McAlister's former son-in-law, is also out.
The board may be using the management changes to signal an attempt to raise fresh capital or find a buyer, but Paul Miller, an analyst with FBR Capital Markets, told the Times it will be hard to find a buyer.
"I do think they are going to try to sell this thing, but I don't think they can sell it because of the lack of insight anyone has into how deep and severe this housing market is going to be, especially in the geographic locations Downey is in," Miller said.
The company reported a loss of $218.9 million, $7.86 a share, for the second quarter -- well over analysts' expectations of about $130 million.
