Top HomeFed Exec to Leave Troubled Bank : * Banking: Chief financial officer Nichol says he is leaving for another job and his decision has nothing to do with the deadline facing the failing thrift.
HomeFed Bank Chief Financial Officer William D. Nichol on Thursday announced his resignation from the ailing thrift effective March 20 to take a non-banking job outside California.
The timing of the resignation was somewhat unusual in that HomeFed is in the midst of completing its audit of its 1991 financial results, a report that Nichol is in charge of. His resignation also comes as capital-deficient HomeFed approaches a March 31 deadline set by regulators to achieve compliance with minimum capital standards, a deadline few in the industry expect HomeFed to meet.
Nichol, 48, who declined in an interview to identify his new employer or its location, is leaving HomeFed after nine years there. He said his new employer made the initial contact and presented him with an opportunity he chose not to turn down.
The timing of his resignation was not due to any conflict with Thomas Wageman, HomeFed’s chief executive, Nichol said, nor was it connected to the March 31 deadline and speculation that the thrift could soon be seized.
“The timing (of the resignation) is only a function of when the opportunities come and, if it would have been a different time, I would have still considered it,” Nichol said. “Tom and his team are doing the best they can to do what’s right for HomeFed. I wouldn’t say anything other than positive about the team.”
Nichol added that he didn’t “know that it’s important” that he remain for the completion of the 1991 financial audit before leaving the S&L.; “I just don’t have a response for that,” he said.
HomeFed is expected to report its fourth quarter and full year 1991 results by March 31. The thrift posted losses totaling $772.1 million for the first nine months of 1991, including a $485-million third-quarter loss. HomeFed’s non-performing assets--past due loans and foreclosures--represented a staggering 11.9% of its $15.2 billion in total assets as of Sept. 31.
The losses left HomeFed insolvent and with negative balances in all three capital adequacy measures used by regulators to assess a thrift’s health. The Office of Thrift Supervision gave the thrift until March 31 to raise hundreds of millions of dollars in outside capital to regain compliance, find a buyer or face a possible seizure.
Sutro & Co. bank analyst Campbell Chaney gives HomeFed little chance of raising enough capital to survive as an independent entity. “The results we get at the end of the month may be the last we ever get from HomeFed,” Chaney said.
Despite such gloomy prognoses, stock in HomeFed’s parent HomeFed Corp. closed at $1.625 in New York Stock Exchange trading Thursday, off $.125 for the day. But Chaney cautioned that shares in Great American Bank, a San Diego-based thrift that was seized last summer, also traded at over $1 shortly before the seizure.
“My feeling is HomeFed won’t survive as an independent institution,” Chaney said.
