Meet the new boss
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For employees and customers of Downey Financial Corp. and PFF Bancorp, the waiting may have been the hardest part.
Stories about the lenders’ struggles with housing-related losses have made headlines for months, but it wasn’t until Thursday that the Federal Deposit Insurance Corp. notified U.S. Bancorp in confidence that it had won the bidding for the companies’ operating units, Downey Savings & Loan and PFF Bank & Trust.
On Friday, the parent of U.S. Bank sent 213 representatives to the L.A. and Ontario airports, along with some points in Northern California and Arizona, to ensure one would be on hand at each Downey and PFF branch Saturday, the first day of the new regime. The aim, bank Vice Chairman Joseph Otting said today, was to reassure customers and employees that stability had returned.
At a series of meetings with bank staffers Sunday, U.S. Bank officials explained to Downey and PFF employees that it was a good thing to be taken over by a solid bank about 20 times the size of Downey and more than 60 times the size of PFF. Because there is little overlap in the banks’ operations, U.S. Bank plans no branch closures, Otting said. And U.S Bank was acquiring all the companies’ loans and deposits, so there would be no losses to depositors at all.
‘At a meeting at the Convention Center in Ontario, the employees actually stood up and applauded,’ Otting said.
On a day when the federal bailout of Citigroup buoyed investors in financial stocks, U.S. Bancorp shares got a particularly hefty boost, rising $2.57, or 11. 41%, to $25.10.
The stock of the taken-over banks’ parents all but disappeared. Downey Financial, which said it would file for bankruptcy protection, tumbled 12 cents to close at 5 cents, while PFF Bancorp dropped 35 cents to become, literally, a penny stock at 1 cent.
-- E. Scott Reckard
