Rancho Bernardo Savings Chief Executive Resigns

Under pressure from directors clamoring for a more aggressive lending policy, and in the wake of a minuscule fourth-quarter profit, the president and chief executive officer of Rancho Bernardo Savings Bank has resigned, the company confirmed Tuesday.

David DeVol will remain a director of the 2-year-old, $40-million-in-assets savings and loan, and will continue as president until next month.

Vice Chairman Donald R. McArthur will replace DeVol.

McArthur, a founding director of Rancho Bernardo Savings Bank, is president of Provident Capital Corp., a subsidiary of Provident Institution for Savings in Boston, which was merged with Hartford National Corp. in Connecticut last October.

The company will take a “more aggressive posture” in 1986, McArthur said in an interview Tuesday. “I want to capitalize on the fact that we’re in a fast-growing area of San Diego County (and) be aggressive in pricing our products to attract local savings and to provide the best service for the communities we serve.”

McArthur said his goal is to generate $36 million in new loans in 1986, 44% more than the new loans issued last year. Three-fourths of the new loans will be for real estate, McArthur said.

The business plan is “not based on changing the past but on moving ahead,” he pointed out.

That reference was to DeVol, who has been quietly making the rounds of area banks looking for a job for at least the last month, according to banking industry sources.

The board “had a disagreement with DeVol over the way the savings and loan should be managed,” said one banking executive. “DeVol is a conservative individual and was running the institution conservatively. And the board would like the company to get involved in more aggressive savings banking.”

DeVol could not be reached for comment.

In McArthur, Rancho Bernardo Savings Bank will be led by a veteran in the real estate development-lending industry. Provident Capital Corp. specialized in joint-venture real estate projects but, with the company now under the Hartford umbrella, real estate will become a second priority.

As a result, Provident Capital is phasing out its projects, McArthur said Tuesday. Because some of the developments will continue for up to two years, however, Rancho Bernardo Savings Bank will manage Provident’s activities, McArthur said.

That agreement was a condition of McArthur’s hiring. “I had an obligation I couldn’t ignore,” he said. “From a practical measure, it works out well (and the) fee to Rancho Bernardo Savings will provide a nice revenue stream.”

Both McArthur and DeVol are former executives of Great American First Savings Bank.

The company on Tuesday said its earnings for the year ended Dec. 31 reached $318,000, compared to a loss in 1984 of $83,000.

However, earnings in the fourth quarter reached only $6,300, following a $17,000 increase in loan loss reserves, to $57,000. Second- and third-quarter profits were boosted by the sale of securities and loans.

Assets were $40.3 million, compared to $26.8 million in 1984, and company officials predict that assets could grow to $60 million by the end of this year.

Net worth at the end of 1985 was $2.06 million, or 5.1% of total assets, above regulatory minimums.

Deposits increased 55% to $36.9 million and total loans increased 70.6% to $33.1 million.