She Made Own Room at the Top : After Operating Insolvent S&L;, a Former Secretary Seeks Full Control

The last time Anne Bacon interviewed for a job, it was for the position of secretary to the chief executive of a Southern California savings & loan.

Seventeen years later, she has just finished running one S&L; and is looking for another.

Bacon recently completed 3 years of operating insolvent Butterfield Savings & Loan in Santa Ana for federal regulators. She has grown accustomed to the executive suite.

“I knew this was what I wanted to do,” she said.

At the end of September, Butterfield was bought by Downey Savings & Loan, the thrift where Bacon got her start as a secretary in 1971. Bacon will be a consultant at the Newport Beach headquarters of her alma mater until she can find another S&L; to run.

“She wants to be president and can’t figure out how to get me out of here,” said Maurice L. McAlister, 63, Downey’s president.

Downey chief executive Gerald H. McQuarrie, 67, said Bacon was “in line” to eventually take over the reins at the institution, but “she knew it would be a long time to get to the top here because we’re still too active.”

Other Executives Can Take Over

Bacon, 44, noted that Downey has capable executives ready to take over when its two co-founders retire.

She also acknowledged that she faces a lot of competition within a shrinking and traumatized industry. The number of thrifts has been reduced by mergers and acquisitions; the eventual bill to repair the hundreds of failed institutions could reach $100 billion.

“It’s probably not a good time to look for a job as a savings and loan president,” she said. “But I’m a survivor. I’d go back to word processing or whatever I need to do to put bread on the table.”

Rising through the ranks in the financial world without a university degree is rare today. Bacon’s path to the top is a tribute to her abilities and perseverance, said McAlister and McQuarrie, her friends and mentors.

At Downey, she gradually rose from secretary to senior vice president and operations manager and was one of three members on an executive committee that reported to the president and the chief executive.

Then she and McQuarrie headed the Downey team hired by federal regulators to manage Butterfield Savings in August, 1985.

Regulators thought so highly of Bacon’s work at Butterfield that they are recommending her for openings at other S&Ls;, according to industry sources. The regulators would not comment.

Current and former executives at Butterfield credited Bacon with fostering high morale and good working relationships among employees, some of whom despaired as Butterfield’s losses and deficit grew larger.

Butterfield’s financial health was revived when it was bought by Downey, which operates it as a subsidiary.

Bacon’s management style at Butterfield, they said, was to involve all executives in decision making and to keep all employees well informed about talks between regulators and Downey.

“Anne Bacon knows every facet of the business,” Nancy Gardner, a former senior vice president at Butterfield, said on the day the S&L; was sold. “It was nice to have a real sense of respect for the person at the top.”

Bacon can be “very abrupt” and tough, McQuarrie said, but she is a leader who is “very caring about her people and will fight for them to the last.

“If I were ever going to start another association, I’d hire her to run it.”

As a child in her native England, Bacon had little idea what she might achieve, but she knew it was something more than what English school system had in store for her.

When she was just 11, she was told that she would not be put on England’s academic fast track because her score on a special examination was not high enough to get her into the crowded college preparatory schools.

‘Class Is Everything in England’

“Besides,” Bacon said in a distinctive accent that is not quite American but is no longer wholly British, “I was brought up on the wrong side of the tracks, and class is everything in England.”

So she went to technical school, then went to work as a secretary while attending night school for 2 years to earn an associate’s degree. At 17, she was “dating, dancing and working.” She soon married a U.S. airman stationed in England and returned with him to his home town, Downey.

As a legal secretary at a savings and loan, she said, the thought of becoming a lawyer crossed her mind. Out of sheer boredom, she started reading S&L; regulations.

“I had to file these things, so I figured I might as well read what I was filing,” she said. “Also, I was in a new country and wanted to know more about how it worked.”

Blessed with an excellent memory, that habit propelled her career at Downey, where she was hired in 1971 as McQuarrie’s secretary. At the time, the S&L; still had headquarters in Downey.

“I was dealing with a lot of loan agents, and she got to know them as well as I did,” McQuarrie said. “Soon she was taking files and handling calls herself. She learned by osmosis.”

Bacon said her on-the-job training was a gradual process, born of her own restlessness with the slow work pace and ambition for advancement.

Read the Regulations

She continued reading regulations as if they were so many engrossing novels. The knowledge she gained helped the S&L; put together the industry’s first portfolio of loans to support securities sold through the Government National Mortgage Assn., then a quasi-governmental agency.

When she took 6 weeks off for the birth of her second daughter in 1975, she said, she thought about how to channel her ambition and decided that “it was time to break out of the secretary-assistant mold and move up.”

“I looked at the savings side of the business and the possibility of becoming a branch manager, but I felt there was more opportunity in the lending area. At that time, I saw myself running a loan department, not running an S&L.; I was 31 and my marriage was shaky. I decided to go ahead.”

After returning from her leave in 1975, she was promoted to the post of regional loan manager, supervising about 30 mortgage brokers, and soon was promoted to loan operations manager, supervising all underwriters in the field.

By 1980, her understanding of industry changes helped Downey cope with the era of deregulation, which opened up new areas for competition. In a small office with a secretary, she analyzed such new ventures for S&Ls; as automated teller machines, automobile loans, personal lines of credit, credit cards, interest checking accounts and money market accounts.

Tiered-Rate Deposit Account

Bacon said she is most proud of her effort “to put into play” a tiered-rate deposit account, which earns interest at higher rates as more money is put into the account.

She also took on roles in advertising, marketing, branch operations and sales training. She had had her fingers in almost all of Downey’s operations, except accounting, McQuarrie said.

“I didn’t start thinking about running an S&L; until 1983 or 1984,” Bacon said. “I was getting bored with what I was doing; the challenges were not as great, and suddenly I was in a routine. I began thinking of becoming president for a start-up (new) S&L.;”

Then came Butterfield--an insolvent institution that, by all accounts, should have been closed when federal regulators seized it in August, 1985. Instead, regulators put it in an operating receivership and hired Downey to provide a management team to retool Butterfield while regulators could figure out what to do with it.

Within 6 months, Bacon, as executive vice president and chief operating officer of Butterfield, was running the show.

Took Over Butterfield

McQuarrie and McAlister realized that she would never return to Downey unless she could be president, they said recently.

Midway through the receivership, Downey withdrew from the management contract and, with regulatory approval, Bacon quit Downey to take over as president at Butterfield.

“I was willing to take the challenge, and I’m not sorry one iota,” she said. “I had to prove to myself as much as anybody else that I could run an S&L.;”

She learned an odd assortment of businesses, from restaurants to cattle breeding, as the Downey team unraveled the complex Butterfield organization, which included 11 subsidiaries.

It was an enervating time as Bacon and remaining Butterfield executives clung to the belief that they could fix the S&L.; The challenge of coming up with new ways to handle extraordinary problems was exhilarating, they said.

“Many new department heads were young, but they rose to the challenge,” Bacon said. “My philosophy was to say, ‘This is your responsibility, your job. Figure out how to do it and let me know what you’re doing.’ It was a way to make sure that the younger people especially thought things through.”

Tried to Keep S&L; Afloat

Eventually, the crew at Butterfield realized that the huge deficit at the institution rendered it unsalvageable. They tried to keep it afloat while Downey and regulators labored for a year to reach a sale agreement.

While Bacon does not regret leaving Downey, she praised its managers for giving her the chance to prove herself: “I couldn’t do all that at a more structured institution.”

And she doesn’t think she could have done it all in her native country.

“This is really a great country,” she said. “You can do any damn thing if you want to do it, if you’re willing to work for it. The opportunity is here. There is no way I could have done all this in England.”