Lorna Mills : Laguna Federal's Longtime Chief Takes Chances on People, and Wins

Times Staff Writer

The Saddleback Inn takes pride in its historic artifacts and western art. But the old, ornate doors leading to the Santa Ana inn's banquet room are more than just another part of the collection.

A plaque on the doors explains they had been the entry to a savings and loan office, built in 1938. What the plaque doesn't say is that without that S&L--and; its president--the successful hotel might never have opened its own doors.

Bruce Gelker, who built the Saddleback in 1964 and sold it last year, said the doors and a collection of carved Spanish-style chairs in the hotel lobby were his way of paying homage to Lorna Mills and Laguna Federal Savings & Loan Assn. Gelker said that Mills loaned him the money to build when everyone else thought he was nuts for choosing a hotel site in what was then the boonies.

"If there is any one person I can point to as being responsible for the success I've enjoyed in this business," he said, "it is Lorna Mills. I'll never stop being grateful to her. She bet on me."

"She bet on me" is how many people in Orange County finish conversations about Mills. This December, the 69-year-old Mills will mark her 49th year in the savings and loan business--all of it spent at Laguna Federal, now a division of Great American Savings Bank of San Diego.

"Lorna and Laguna Fed have been very helpful to Realtors, merchants, businessman and personal borrowers all over Laguna Beach," said Norman Wilks, president of the Laguna Beach Board of Realtors. "When land values here got so high in the 1970s," Wilks said, "no one else would loan on homes in Laguna. But she did."

Mills not only bet on land values in Laguna, she helped a large number of home builders in other parts of the county get started, making construction and mortgage loans on developments in Huntington Beach, Irvine, Garden Grove and Westminster when the county's construction industry began booming in the late 1950s.

She also was one of the first S&L; presidents to grasp the complexities of making mortgage loans on homes built on leased land; loaned money to finance construction of churches when most lenders wouldn't, and lured customers from other S&Ls; by paying bonus dividends to Laguna Federal's depositors from 1960 until 1965 when federal regulations prohibited the practice.

Mills also took chances on people. In 1958, she authorized a loan to a group of novice entrepreneurs who had been laughed out of other lenders' offices for suggesting that the still-rural area around Disneyland could support a large motel. Gelker, then in the insurance business, was one of the partners. He said that the construction loan for the Saga Motor Hotel, near Disneyland's main entrance, marked his start as a successful hotelier.

Financial industry consultant Edward Carpenter said Mills "was the first woman chief executive to take an S&L; into a significant position in the industry in California. She is the prototype of the successful S&L; president and was ahead of her time in market planning."

Mills started in the business in 1936 as a 20-year-old clerk fresh out of Johnston's Business Institute in Santa Ana. She became the first woman in the state to head an S&L; when she was named president and general manager of Laguna Federal in April, 1957.

Engineered Merger

Although other women have become presidents of S&Ls; in the state since then, they have been few and far between--currently there are only three. And Mills was the state's longest-tenured woman president when she engineered her association's 1982 merger with San Diego Federal S&L;, now called Great American Savings Bank. She now is vice chairman of the savings bank, which has assets of nearly $6 billion, and is head of its Laguna Federal division.

In the nearly 28 years since she first became its president, Mills and Laguna Fed have become inextricably intertwined. But while she is Laguna Federal most hours of most days, and says the demands of her job are a major reason she has remained single, there also is a private Lorna Mills.

She has been an avid horsewoman since her father bought her a pony when she was 2. Five years ago she purchased a 20-acre ranch in the Riverside County community of Murrieta and began a small Arabian horse-breeding farm. She said she is thinking about retiring "in two or three years" so she can spend time traveling and enjoying her horses.

Although she is a major figure in Laguna Beach, Mills never has lived there, residing since the early 1930s in Newport Beach--in part, she said, because it enables her to get away from her working environment each evening. She also is active as a fund-raiser and booster for a number of performing and visual arts activities in the county, and says she does so because she enjoys it rather than for any business benefits that might accrue.

'Industrywide Figure'

Still, few people--including Mills herself--seem able to talk about Lorna Mills without talking about Laguna Fed, or to discuss the S&L; without bringing Mills into the conversation.

Leonard Shane, the president of Mercury Savings & Loan Assn. of Huntington Beach, gushed uncharacteristically as he reeled off her attributes. "She's cultured, soft, a very warm . . . and particularly fine person (who) is a top-notch professional . . . an industrywide figure." Mills the executive, he said, also "is probably softer and more humanistic than one would expect. She has always been slower than others to foreclose on loans. Her great joy is helping people solve their problems."

Mills blushed at hearing Shane's description but agreed that she has never been able to separate business from personal feelings. She is grounded in a community-based approach to the lending business, going back to the days when Laguna Federal was the only S&L; south of Santa Ana in Orange County and was the major source of home loans for south Orange County residents.

"Lorna is a conservative operator," said Gerry Findley, a Brea-based bank consultant. "She didn't go out and jump all over California; she stayed in her own backyard."

Gordon Luce, Great American's chairman, said there was no thought of replacing Mills as head of Laguna Federal when the two companies merged. As head of the Laguna Federal division, he said, Mills "continues with a strong involvement in her community, which is invaluable to us." Great American, he said, needs Mills' contacts and personal reputation to make it an accepted part of Orange County's financial services industry.

Luce said Mills' management style is marked by a strong belief in customer service and staying in communication with customers. "People could learn from her strategy. She asks what's best for the customer rather than what's best for the industry or for our company."

Never a Money-Losing Year

Laguna Federal, which opened its doors as a mutually owned S&L; in 1935, has never had a money-losing year. It had two offices and about $30 million in assets when Mills replaced founder Andrew S. Hall as president. When it merged with Great American, Laguna Fed had 11 offices, more than $400 million in assets and $24 million in reserves and surpluses (a mutual's way of reporting accumulated and annual profits).

As a mutually owned S&L; until the merger, Laguna paid dividends rather than interest to its depositors--whose accounts represented ownership of a piece of the institution. By 1980, when it converted to a stock company, the accrued dividends paid to depositors--including bonuses--totaled $253.8 million.

Laguna Federal no longer reports its assets and earnings separately, but Mills said that the association has continued to grow and profit as part of Great American.

"Laguna Federal was considered a plum acquisition," said Great American's Luce. "It was a premier company in our industry because of its history, its management and its markets." Awarding Mills the highest praise one executive can give another, Luce said that by picking San Diego Federal from a large slate of suitors when she decided it was time to merge, Mills "sent a signal to the rest of the industry that San Diego Federal was a fine institution. We took the merger as a compliment to us."

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