President Blames His Outspokenness : Hammond Bid to Buy S&L; Rejected

Federal regulators late Tuesday rejected the Hammond Co.’s application to buy a Riverside savings and loan.

The Federal Home Loan Bank Board gave no public explanation for the decision. Thomas T. Hammond, the Cypress-based firm’s president, figures it was his outspokenness that cost him Mission Savings & Loan.

Hammond, the firm’s president, had been expecting the denial of his application after publicly expressing his frustration and anger with the length of the regulatory review process, which took 14 months.

“It’s all subjective reasons--there are no objective ones that I see,” he said. “It’s not financial, it’s not structural. It’s because Tom Hammond is not liked by the regulators” at the Federal Home Loan Bank of San Francisco.

“Needless to say, I’m mad about it,” he said in an interview from Honolulu, where he was attending the annual convention of the U.S. League of Savings Institutions.

The mortgage banking company will “probably challenge” the denial of the application, he said. His Washington lawyers received notice of the decision late Tuesday.

“We deny that there is any element of personal animus, and we don’t wish to inflame the situation by saying anything further,” said William K. Black, senior vice president and general counsel at the San Francisco bank.

Black did say, however, that he was surprised at Hammond’s comments because regulators and the firm’s lawyers are still talking “to see what potentially could be done” to revive the application. He would not say why the application was denied.

Two months ago, Hammond publicly expressed “outrage” over delays in processing his application. In a year, little had been done by regulators to approve his application, yet his firm had spent up to $500,000 on legal and other fees, he said.

“Rational businessmen cannot go into these situations with this kind of treatment,” he said at the time. “Regulators can’t expect people like us to put money into S & Ls when we’re treated this way.”

Such outspokenness, he said Tuesday, apparently angered regulators.

Regulators have said previously that the firm’s application presented novel issues or policy concerns that had to be resolved by officials at the Federal Home Loan Bank Board in Washington.

Neither regulators nor Hammond have said what those issues are.

Hammond, who believes his mortgage banking firm fits with regulatory intent to keep S & Ls in the home mortgage business, had wanted to fold his operations into Mission Savings as part of the nearly $3-million transaction.

Assuming that regulators reject Hammond’s application, executives at Mission Savings, the state’s smallest S & L, will “be operating on our own,” said Andrew C. Herrity, the S & L’s president.

Though the S & L has lost money, he said, it still has more than three times the capital required by regulators.