Downey S&L; OKs Holding Company to Pursue Acquisitions, Investments

At a specially called meeting Wednesday, shareholders of Downey Savings & Loan approved the formation of a holding company to provide more flexibility in acquiring other operations and pursuing new investment opportunities.

The vote for creating Downey Financial Corp. was a major step in Downey’s previously announced growth strategy, which also includes the cost-saving measure of switching from a state charter to a federal one.

Downey, based in Newport Beach, needs regulatory approvals, which it hopes to win in the next few months, before completing the restructuring. Under the reorganization, shareholders will exchange each share of S&L; stock for a share of Downey Financial stock.

Downey Financial stock will be traded on the New York Stock Exchange under the same symbol that the S&L; is now trading under, said Stephen W. Prough, Downey’s president.