Persistent Losses at Bank of San Diego Cited : Rift on Board Leads to Reshuffling at BSD

BSD Bancorp, which has been unable to stem the flow of red ink at its Bank of San Diego subsidiary, has elected a new board of directors following a “disagreement” over the bank’s future, company officials said Friday.

BSD Bancorp’s board members pledged to “move quickly to make whatever additional changes are necessary to get this bank on a solid and profitable footing once again.”

Bank of San Diego, the largest of BSD Bancorp’s six subsidiaries, reported a $985,000 net loss during 1986. Losses have continued into early 1987, according to BSD and Bank of San Diego Chairman James E. Brown. The BSD board said it would “take whatever actions are necessary to . . . bring the Bank of San Diego back to a position of profitability and financial strength.”

That push for profitability prompted the Tuesday board election that turned out all but Brown and San Diego real estate investor Thomas E. Hom. Bank of San Diego President E. Lynn Caswell and Executive Vice President Alan Lord were not reelected; both retained their operating roles.

Six outside directors also were not reelected. BSD Bancorp, the bank’s sole stockholder, did elect four new Bank of San Diego board members, all of whom serve on the board of BSD Bancorp or one of its subsidiaries. Architect Ward Deems, who resigned from the board last December, agreed to return to the board.

“We wanted to return to the concept where the majority of the board are founding directors,” said BSD Chief Operating Officer Vito Guarino Jr. “Now, four of the seven are founders.”

BSD Bancorp, which reported year-end assets of $371.9 million, includes Bank of San Diego, American Valley Bank, Coast Bank, Bank of La Costa, Borrego Springs Bank, and BSD Datacorp.