Beleaguered regional bank Downey Financial Corp. said Thursday that Chief Executive Daniel Rosenthal has retired and that Thomas E. Prince will replace him on an interim basis.
Prince, 61, is executive vice president and chief operating officer.
Additionally, Downey said that Chairman Maurice "Mac" McAlister, the company's 83-year-old founder and largest shareholder, has retired from the board. Two independent directors, Michael Bozarth, 46, and Gary Brummett, 50, have been named chairman and vice chairman, respectively. Rosenthal, 55, was the former vice chairman.
The company, which is conducting a search for a permanent chief executive, also said it has formed a special board committee to explore a broad range of strategic alternatives.
"Our board is committed to moving forward as promptly and aggressively as possible to take all appropriate and necessary action to keep the company on a firm and solid footing, fully able to meet the challenges of current market conditions," Bozarth said in a statement.
By examining banks' ratios of defaulting loans to total outstanding loans and to reserves and stock _ two measures of a bank's health _ Downey appears to be in jeopardy, according to bank analyst Richard Bove of Ladenburg Thalmann.
Following the failure of IndyMac Corp., a fellow California bank seized by the government earlier this month, Downey said it believed its current source of funds would continue to enable it to meet its obligations, while maintaining appropriate liquidity levels. As of July 14, the bank had unused sources of liquidity exceeding $3.4 billion. From a funding perspective, about $9.9 billion, or 78 percent, of assets are funded by its retail deposit franchise, the company said last week.
Separately, the bank said Thursday it swung to a loss in the second quarter, as results were weighed down by $258.9 million provision for credit losses, up $249.4 million from a year ago.
Downey Financial operates 169 branches in California and five in Arizona.
Shares plummeted 73 cents, or 27 percent, to $2 in morning trading. Shares are down about 92 percent this year.
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