Home Savings President Forster Resigns
The No. 2 executive at Home Savings of America, the nation’s largest thrift, abruptly resigned Monday, a move that surprised industry experts and reflects the turmoil within the venerable institution as it tries to redefine itself as a commercial bank.
Fredric J. Forster, chief operating officer and president of both the Irwindale-based thrift and its parent H.F. Ahmanson & Co., said in an interview that he was leaving because of “tactical differences” with Chairman Charles R. Rinehart, declining to be more specific.
Rinehart was unavailable for comment.
Forster, 51, joined Ahmanson only three years ago. Neither the thrift--nor Forster in his interview--would say whether he quit or was fired, simply saying that they had decided mutually and amicably to part ways.
The decision was made known to other employees Monday, the same day Forster left. Forster said that his departure “had been decided about a week ago.”
“The company currently faces the challenge of executing many new strategies,” Rinehart said in a statement. “Fred and I felt that without complete alignment, our energy and attention could be diverted from the implementation challenge.”
Ahmanson, with $50 billion in assets, has said in recent months that it would turn away from its traditional home loan business and enter into more commercial banking activities, including consumer and business loans. Like other thrifts that survived the S&L; shake-out and scandals of the 1980s, Home finds itself at an increasing disadvantage against highly automated, full-service banks.
Home recently announced it plans to buy 61 bank branches from Wells Fargo & Co., part of the surplus created from Wells’ acquisition of First Interstate Bancorp. The thrift saw the move as crucial in reducing its reliance on certificates of deposit--the traditional source for home loan funding--and attracting cheaper sources of funds such as checking and passbook savings accounts.
Forster said the Wells Fargo branch acquisition has nothing to do with his resignation. Nor should his departure be interpreted to mean that there is an impending announcement of a dramatic decline in profits or layoffs. He and Rinehart agreed on the strategic goal of Home Savings’ becoming more bank-like.
Forster said only that the decision to leave Home Savings became necessary as his relations with Rinehart, 49, became “increasingly uncomfortable” over tactical differences. “But we never had a harsh word,” Forster said.
Thomas F. Theurkauf, a thrift analyst with Keefe Bruyette & Woods of New York, said: “Clearly, Ahmanson has set out on an agenda here that certainly does entail dramatic cultural changes within the company and I’m sure that there is always going to be conflicts as a result.”
Forster was hired in 1993 by former Ahmanson Chairman Richard Deihl after Rinehart had already been named to succeed Deihl. Forster founded Newport Balboa Savings & Loan of Newport Beach in 1979 and later sold it to ITT Corp. He also worked at American Savings and is a past vice chairman of the Federal Home Loan Bank Board.
That Forster in all probability had a long wait to succeed the younger Rinehart as Home’s chief executive was “not a factor” in his decision to resign. “But it’s a fact,” he added.
