Moving to shore up management at Security Federal Savings & Loan, federal regulators installed a new president and board of directors at the Garden Grove thrift.
The departing board appointed five new directors, at least four of whom have worked with troubled S&Ls elsewhere for the Federal Home Loan Bank Board. The new directors then hired William Verant as Security Federal's new president.
Roger Sullivan, who had been named president just two weeks ago, returned to his position as vice president in charge of lending.
The S&L, which has lost money for several years, is operating with "marginal" capital of just over $1 million for its $78 million in assets, Verant said Friday after two days on the job. Regulations require it to have more than $2.5 million in capital, its final reserve against losses.
But the thrift has earned more than $280,000 in the first five months this year and has a loyal core of depositors, many of whom have been with the S&L almost since it opened in 1957, Verant said.
"It can be turned around," he said. "It just needs more capital and a good business plan."
Security Federal, hurt by a small profit margin, has few of the problems that have plagued many S&Ls. Verant said loan delinquencies--slow-paying loans--constitute only 1% of its loan portfolio, a figure well within acceptable thrift standards. It also has few properties in foreclosure. Such foreclosures can be an indication of financial problems.
Security's only major problem, Verant said, is that it has more than $2 million in loan losses from the early 1980s that it has been deferring. It needs profits against which it can write off those losses.
Verant, 47, of Laguna Hills said he has high hopes of rebuilding Security Federal. He said it was a "refreshing" opportunity after managing the insolvent Unified Savings Bank in Northridge, which has been liquidating its assets since the bank board seized that institution in October, 1986.
He said he and the new and old directors met Wednesday at a board meeting, where regulators introduced everyone.
Security Federal's new chairman is McKenzie Moss of Carmel. Its directors are real estate syndicator Janice Ramocinski of Orange, consultant Paul Hogan of San Francisco and Dale Welton and Dallis Widick of Lenders Technology Inc. in Santa Ana.
Ramocinski managed North America Savings & Loan in Santa Ana for regulators before it was closed last June. Moss, Welton and Widick have served for regulators on the boards of troubled thrifts.
Richard Miller, Security Federal's president since it opened, retired from that position two weeks ago but remained as the S&L's chairman. He and two other board members retired Wednesday, and two other directors resigned.