PEOPLE : Great Western Gives Reins to a New CEO

Great Western Financial Corp. has officially handed over its reins to a new chief executive, but the new boss sees little change in basic direction for the parent of Great Western Bank.

On Monday, the CEO job officially passed from James F. Montgomery, a savvy thrift industry fixture who personified the Chatsworth-based company’s Old West image, to John F. Maher, an investment banker who helped design the firm’s push into banking services.

The succession, first announced at Great Western’s annual meeting last April, comes a few years early for the 61-year-old Montgomery, who retains the title of chairman. But Montgomery has said the change represents his confidence in Maher, 52, who has been a Great Western director since 1976 and president since 1986.

“Jim and I have worked closely for more than 20 years,” Maher said. “Our stockholders, customers and our employees will see a continuation of the company’s basic strategic direction as we pursue Great Western’s evolution as a leading consumer bank and national mortgage lender.”

What that means, Maher said, is that Great Western--the nation’s second-largest savings and loan--will continue to look more like a bank and less like a traditional thrift institution. That move began in the late 1980s and will intensify in the coming years, Maher said.

“We want to have a stronger and deeper relationship with our customers,” he said, providing not only the traditional certificates of deposit and making the usual mortgage loans that are the bread and butter of thrift institutions, but also offering checking accounts and mutual funds, as well as making consumer loans.

Great Western Financial was forced into aggressive cost cutting along with the rest of the banking industry in the last several months. The company has eliminated more than 2,000 jobs since January 1994, now employing about 14,900 people. Assets totaled $44.7 billion on Sept. 30.

Cost-cutting measures will be a continuing focus, “but nothing of the magnitude that we saw before,” Maher said.

Maher wants to achieve a 55% operating expense to revenue ratio, which means the thrift would spend 55 cents to generate each dollar of revenue. In 1994, Great Western’s ratio was 63.7%.

Banking analyst E. Gareth Plank of the Rodman & Renshaw investment firm said he expects little change in Great Western’s operations.

“They have carved out a niche for themselves as being a little bit more than a thrift,” Plank said. “John Maher has been a very active member of the management team . . . [and] a lot of the current architecture that you see there involved John Maher as an investment banker.”

Maher began his business career on Wall Street in 1967, working for Eastman Dillon, Union Securities & Co. He joined Great Western in 1973 as chief financial officer.

Maher left Great Western in 1976 and served as a managing director of Lehman Bros. Kuhn Loeb Inc. from 1979 to 1986. He returned to Great Western as president and chief operating officer in 1986.

Montgomery will spend much of his time on “several major national policy issues that are important to the company’s future,” Great Western said in a statement.

He was recently elected chairman of America’s Community Bankers, the national trade association for 2,000 savings and community financial institutions and related business firms.