Downey Financial Loses Its 2nd CEO in Nearly 2 Years

The chief executive of Downey Financial Corp., the parent company of Orange County’s largest thrift, resigned unexpectedly on Friday, marking the second top-level departure in less than two years.

James Lokey stepped down after about 21 months as CEO. Lokey had been named to succeed Stephen W. Prough, who also quit with little notice. Lokey could not be reached for comment.

Daniel D. Rosenthal was named to succeed Lokey as chief executive and president of Downey Financial and its thrift institution, Downey Savings & Loan. Rosenthal has been with Downey more than 20 years.

The chief executive’s office has seen a number of occupants since Chairman Maurice McAlister stepped down as CEO in 1991. No successor has held the position more than three years.

Analysts said most of the top executives came from large institutions and have had a difficult time adjusting to Downey’s culture, which reflects McAlister’s entrepreneurial, hands-on style.

“McAlister’s a smart guy, and Downey has done well. But he runs the company like it’s his company,” said Dennis Aigner, a UC Irvine professor who resigned from the board in a dispute with McAlister. McAlister was unavailable for comment.

Lokey, who joined Downey after 23 years at First Interstate Bank, departed before his contract expired. In a statement, he gave no reason for his departure, saying merely that he looked forward to “new challenges.” He could not be reached for comment.

Rosenthal, 45, has been chief operating officer. With an insider taking over, analysts said, Downey is expected to stay focused on its core business of consumer lending and mortgage loans.

The management changes were announced after the market closed. The stock ended up 38 cents at $23.69 on the New York Stock Exchange.