Downey S&L; Hires Prough as President
Downey Savings & Loan, ending its long and sometimes turbulent search for a young and respected leader, said Tuesday that it has hired industry veteran Stephen W. Prough as its president and chief executive.
Prough, 49, who has held similar positions at Western Financial Savings Bank for 11 years, will take the reins at Downey on Monday. He fills posts vacated in April by Robert L. Kemper, who retired.
“It’s exciting,” Prough said Tuesday about the new job. He said he was ready for a change, and “Downey is well positioned with its branch network and excellent capital to take advantage of the market.”
At Western Financial in Irvine, Chairman Ernest S. Rady, a founder and majority owner, will take over Prough’s positions. Prough said he is leaving on friendly terms.
“I was always curious about who Downey was going to get,” said Campbell K. Chaney, an industry analyst at Daiken Securities in San Francisco. “But I would never have guessed that it would be Steve Prough.”
He pointed out that Prough owns a 1% stake in Western Financial’s parent company, helped the thrift get through some troubled times and has helped to boost its profits.
“What made me realize it was the right time to leave was when I read (basketball coach) Pat Riley’s book three weeks ago,” Prough said. “He talked about the reasons he left the Lakers and joined the New York Knicks.
“My reasons for changing jobs are the same. It’s appropriate periodically to review where you are and to do something different.”
Downey’s search for a new president began last fall after directors considered selling the Newport Beach thrift but decided instead to launch a new era of growth. Downey’s real search, however, began five years ago when regulators pressured its aging co-founders, Maurice L. McAlister and Gerald H. McQuarrie, to find a successor.
The first heir apparent, David L. Boyles, lasted barely nine months before quitting in late 1990. A year later, the thrift hired Kemper and F. Anthony Kurtz, and industry analysts figured that the well-regarded Kemper would retire soon and the younger Kurtz would take over. But Kurtz, working in Kemper’s shadow, left last summer, and Kemper retired two months early as reports surfaced that he and McAlister never got along.
Some shareholders, meantime, have pushed for a sale of the thrift, raising the issue at Downey’s annual meeting three weeks ago. While the majority supports the board’s decision to keep the thrift independent, Chaney said that the sale issue won’t go away soon. He figures that the thrift could fetch $35 a share in a sale, well above its recent trading price of $20.
The hiring of Prough, a friend of McAlister’s, is one of the last major steps that Downey is taking as it begins to make more loans and increase its size and market share, said Donald E. Royer and Thomas E. Prince, Downey’s general counsel and chief financial officer, respectively. They said the thrift will hire a new director in the next week or so for its retail banking operations. The position has been vacant since August.
Downey, which has 52 full-service branches statewide, earned $43.7 million last year and has $3.5 billion in loans and other assets. Western Financial, which operates 26 full-service branches as well as eight auto financing centers, earned $12.9 million last year and has $2.2 billion in assets.
Profile:
Stephen W. Prough
President/CEO: Downey Savings & Loan
Age: 49
Education: B.A., Colorado College, 1966
Military service: U.S. Navy; two tours of duty in Vietnam, 1966-69
Professional background: Project engineer for Foothill Property Management in Corona, 1970-71; vice president and real estate loan originations manager, San Diego Federal Savings, 1971-80; president, Corona-Foothill Co., 1980-81; first vice president and loan group manager, Great American Savings, 1981-1983; president/CEO, Western Financial Savings Bank in Irvine, 1983-1994.
Honors: Chairman, California League of Savings Institutions, 1991-92. Serves on Thrift Institution Advisory Council for the Federal Reserve and on the Savings and Community Bankers of America board of directors.
Personal: Lives in Corona del Mar with his wife and two children.
Source: Times reports
