PBOC Holdings Inc. has come a long way in five years.

In 1994, when it was still called Southern California Federal Savings and Loan Association, the thrift lost $57.4 million and was on the verge of being seized by regulators.

Since then, the thrift has changed its name, expanded into commercial, consumer, and small-business lending, completed a public offering, and more than doubled its assets, to $3.5 billion.

The result: Last quarter PBOC the parent of People's Bank of California profited nearly $7 million and announced its first acquisition this decade.

"We could not expect to be a plain-vanilla thrift and expect to survive," said Rudolf P. Guenzel, PBOC's chief executive officer and the architect of its dramatic turnaround.

"It was the only way to go."

PBOC is not stopping with the deal for $138 million-asset Bank of Hollywood. Over the next two years, the company plans to more than double its 23-branch network in Southern California by targeting banks with up to $1 billion of assets.

"We just don't know how to stop growing," Mr. Guenzel said.

Observers characterize PBOC's revival as one of the decade's great turnaround stories.

The credit, they say, belongs to Mr. Guenzel, 58, a longtime banker who had famously resuscitated a failing Naples, Fla., thrift, BancFlorida Financial Corp., that was later sold to First Union Corp. for $181 million.

"The company is in a great position,'' said Beth Ruckwardt, a bank analyst at Pacific Crest Securities in Portland, Ore. "At this point, they can't see back around the corner."

But will PBOC's comeback story be short-lived?

Most analysts and investors fully expect that Mr. Guenzel and his faithful management team will eventually prepare PBOC for a sale, a la BancFlorida, an observation Mr. Guenzel does not dispute.

"All of us feel that's very nice to work yourself out of a job," he said a recent interview here.

Before Mr. Guenzel came aboard, Southern California Federal Savings and Loan had already been shut down once, in the mid-1980s.

It was revived in 1987 by an investor group led by former U.S. Treasury Secretary William E. Simon, but by 1994 the thrift was back on the ropes, a victim of Southern California's real estate recession and mismanagement.

At that time, Mr. Guenzel, then working as a consultant, was called by the thrift's major shareholders to see if the situation was salvageable.

What Mr. Guenzel says he saw was a one-product outfit the thrift specialized in residential mortgages that had lost a whopping $80 million in three years.

So he drew up a quick plan: clean out management, control expenses, diversify the assets, and change the thrift's funding base.

He then returned to his Fort Myers, Fla., home to enjoy the Christmas holidays.

Soon thereafter, while relaxing on the beach, his cellular phone rang. The thrift's shareholders told him they were ready to put up $60 million to recapitalize the institution -- if he ran the show.

"I thought it was a heck of a vote of confidence," Mr. Guenzel said.

"Then I realized I would have to make the plan work."

He knew he could not do it alone.

His first task was to fire the senior managers and replace them with his former BancFlorida deputies J. Michael Holmes and William W. Flader.

Mr. Holmes took over as chief financial officer, a position he held for nine years at BancFlorida, and Mr. Flader became executive vice president in charge of retail banking.

Mr. Flader was in charge of BancFlorida's 46 branches for five years during the turnaround. Combined, the trio has more than 75 years of banking experience.

The next task was to change the thrift's name to reflect its bank-like transformation more accurately.

Mr. Guenzel hired a marketing firm to conduct studies at malls and intersections throughout Los Angeles.

What they found was that Southern California Federal Savings and Loan -- which dates back to 1887 -- had a name-recognition rate of just 3%.

"People's Bank of California had a 15% recognition rate, and it didn't even exist," Mr. Guenzel said. "There was no further discussion after that . . . even though it wasn't our first choice."

Mr. Guenzel said he and his cohorts had hoped to draw on their past glory and switch the moniker to BancCalifornia just like BancFlorida.

Like BancFlorida, PBOC had many of the same problems: heavy losses, a loan portfolio predominately consisting of single-family and multi-family mortgage loans, nonperforming assets above 2% of total assets, and a deposit base heavily weighted in CDs.

Its solution was to aggressively seek out more commercial loans and cheaper sources of deposits, such as checking and savings accounts.

Loan originations soared by 278%, to $607.5 million, in 1998 36% of it in commercial and consumer loans. Its nonperforming assets decreased to 0.34%, from 1.05% in 1997.

The result: PBOC earned $10.9 million last year and reported profits of $13.3 million through the first half of 1999.

Despite the company's rising performance and a more stable position in one the country's hottest markets, PBOC's stock has attracted little attention this year.

The shares have been trading at around $9 for much of the year, well below its debut price of $13.75 in May 1998.

Shares were trading at $10 at mid-afternoon on Friday.

Still, PBOC has its admirers. Pacific Crest rates it a "strong buy," and Sandler O'Neill & Partners LP -- the investment firm that took PBOC public rates it a "buy," noting that the stock is cheap, compared with its peers.

Sandler O'Neill analyst John M. Kline said he thinks "patient investors will be rewarded for holding and purchasing PBOC at current price levels," according to a June 30 research report.

Mr. Guenzel concedes that senior managers, many of whom are significant shareholders, are are disappointed with the company's stock price.

"We think what we do is dull and boring in many respects, but at the end of the day, that is what creates value," he said.

Not that the turnaround is complete.

Pacific Crest's Ms. Ruckwardt said the company needs to boost net interest margins up from the current 1.9% and continue building its commercial loan portfolio.

"They still have a ways to go, at least 18 months,'' she said.

But PBOC's management team seems to have faith in its abilities.

After all, Mr. Holmes said, they've all done this before.

"History will tell," he said with a smile.

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