In a move that should improve its strained relations with regulators, Lincoln Savings & Loan said Wednesday that it has hired a new chairman and chief executive officer and will begin restructuring itself as a more traditional savings institution.
William D. Hinz, 49, who left high-ranking positions six weeks ago at Great American First Savings Bank in San Diego, will take the reins at Lincoln Savings beginning Monday. Hinz replaces Robin S. Symes, 35.
Symes, a finance and computer specialist who had been promoted to chairman only last July, will become a senior vice president with the thrift's holding company, American Continental Corp. in Phoenix. He will stay in Irvine, however, as an executive vice president with Lincoln Savings. Hinz will be based in Phoenix.
Hinz's hiring and the movement toward a traditional approach would also help put the Irvine-based S&L in a better position to be sold should industry changes or regulatory restrictions deflate its earnings or stock value, said a spokesman for its holding company, American Continental Corp. of Phoenix.
With $4.9 billion in assets, Lincoln Savings is the 18th-largest S&L in the state and the second-largest savings institution in Orange County. It has 27 branches in Southern California.
'Change Is Coming'
"A lot of change is coming, and we have to sit back and see where the industry is going," said Robert J. Kielty, a senior vice president at American Continental. "We're not trying to sell the S&L now, but we're constantly looking at the direction regulators are taking."
American Continental Chairman Charles H. Keating Jr. has long been a proponent of deregulation and expanded investment powers for thrifts--a stance that brought him and his institution into conflict with the Federal Home Loan Bank Board.
Industry sources said they believe that Keating has become frustrated with the restrictions regulators have imposed on thrifts.
"Frankly, I think Keating is at a point right now where he would like to get out of this thing," said William Davis, chief deputy commissioner of the California Department of Savings and Loan. "It didn't turn out to be what he thought he bought, and perhaps he would be open to some kind of offer."
Keating could not be reached for comment.
Pressure From Regulators
Lincoln has been under pressure by state and federal regulators, particularly from the bank board, to make more home loans and engage in more mortgage banking and other traditional thrift activities and to cut back on the unconventional direct investments in real estate development, high-yield securities and stock purchases.
"There has been a lot of dialogue with Lincoln about its role in the traditional sense," Davis said. "They've made a number of internal moves toward that role. I see that direction as a positive move on Lincoln's part."
Kielty of American Continental denied that federal regulators pressured Lincoln into hiring a leader who could take it down a more traditional path. But company executives had been talking since July about bringing in someone with more industry experience, he said. Symes acknowledged that he had expected his stewardship to be temporary.
Audits Nearing Completion
Hinz is a 25-year veteran of the S&L business who was an executive vice president at Great American and president of Home Federal Savings & Loan, its subsidiary, in Phoenix. He also was in charge of Great American's units in Washington, Colorado and Montana.
Hinz's hiring comes as federal regulators reportedly are nearing completion of a 20-month-long regulatory audit. State regulators have finished their review of Lincoln, Davis said.
The unusual length of the audit, which five U.S. senators tried in April to expedite, has been seen by some industry observers partly as retribution by regulators working for Edwin J. Gray Jr., whose term as chairman of the federal bank board ended in June. Keating had been a major critic of Gray's administration and what many in the industry saw as its efforts to re-regulate it. The two carried on a feud during much of Gray's four years in office.
Lincoln's executives, as well as industry leaders in general, have welcomed the new style of the bank board Chairman M. Danny Wall, whose administration is seen as more accepting of the broader investment powers given S&Ls under 1982 deregulation laws.
Ironically, Lincoln not only plans to start doing more of what Gray had wanted it to do, it also has hired an executive from Gray's former employer--Great American.
Change Will Take Some Time
"The plan for Lincoln Savings is to make it a more traditional thrift," Hinz said. "It will take every bit of three years, maybe five, to convert this thrift to a traditional savings and loan."