Great American Bank May Name Regulator as Chief

Great American Bank has offered its chief executive job to James M. Cirona, president of the Federal Home Loan Bank of San Francisco since 1983, sources close to the troubled savings and loan said Thursday.

Cirona, 58, who formerly was the Western region’s top S&L; regulator, appeals to Great American’s board because of his credibility with regulators, an important asset as the thrift remains under intense federal scrutiny amid massive losses. Great American will soon report its first-quarter financial results, and some analysts expect the S&L; to report additional deficits. Cirona also has experience running a troubled thrift.

If Cirona takes the job, as expected, he will replace Great American’s long-time Chief Executive Gordon C. Luce, who is expected to announce his retirement soon, possibly at Great American’s annual shareholders meeting on May 24, sources said. Luce turns 65 in November.

Cirona, the sources said, has indicated that he will take the job on the condition that an acceptable employment contract can be drawn up. “He wants the job and is excited about it,” one source said. Cirona, who has made trips to San Diego to interview for the job, was unavailable for comment Thursday. He is expected to be named to the post next week.

As president of the Federal Home Loan Bank’s 11th District, which includes Arizona, California and Nevada, Cirona heads an operation whose chief function is to supply credit to the region’s S&Ls.; The 11th District is the largest of the Federal Home Loan Bank’s 12 regional districts, with its $48 billion in assets.

But until last August, when the federal S&L; rescue bill created the Office of Thrift Supervision, Cirona was also the region’s top regulator. As such, Cirona oversaw the seizure of dozens of failed S&Ls.; Now, S&L; regulatory functions have largely been vested within the OTS.

Cirona kept a fairly low profile until details emerged of his jousting with Charles H. Keating Jr. and the failed Lincoln Savings & Loan of Irvine. Cirona was present in the room on April 9, 1987, when five U.S. senators, on Keating’s behalf, lobbied regulators who were then cracking down on Lincoln.

Word of possible management changes at Great American comes three weeks after the thrift reported a $263.4-million loss for fiscal 1989, a loss that severely weakened the capital position of the thrift, which has $15.9 billion in assets. Great American must sell itself, shrink assets drastically or raise $350 million in outside capital by the end of 1990 to avoid a possible seizure, according to a capital plan accepted by the OTS.

Cirona, a New York native, also has experience operating troubled thrifts. Before being named president of the Federal Home Loan Bank in San Francisco, Cirona was chief executive of the $2.6-billion First Federal Savings & Loan Assn. of Rochester, N.Y. The thrift was created through the consolidation of several troubled thrifts and received financial aid from the now-defunct Federal Savings & Loan Insurance Corp.

Luce, who is also Great American’s chairman, was unavailable for comment. The issue of whether Luce would vacate the chairman’s post along with the chief executive’s job was unclear Thursday.

Cirona was selected by Great American board members over Great American general counsel Marc W. Sandstrom and Great American board member Thomas F. Carter, sources said. Until he resigned in December, Carter was a senior vice president at Great American.