SAN FRANCISCO -- Downey Savings and Loan ASsociation plans to form a holding company and switch to a federal thrift charter, the institution said Thursday.

Downey, one of the last of Califomia's midsize thrifts operating under a state savings and loan charter, said the parent company will be called Downey Financial Corp. and will be listed on the New York Stock Exchange, The thrift said it expects to complete the changeS, which must receive regulatory approval, early in 1995.

Newport Beach-based Downey, with $3,9 billion in assets, is one of California's healthier and bettercapitalized thrifts; The latest moves reflect a strategy of independent growth adopted last year.

In mid-1993, Downey hired Lehman Brothers to review strategic options; m.|uding a possible sale of the inititutibn. Following the review, the thrift said it intended to remain independent and explore creation of a holding com, pany "to provide structuring flexibility in connection with possible future corporate transactions,"

Switching to a federal charter will trim costs by reducing the number of regulatory agencies with jurisdiction over Downey.

Analysts speculated that Downey might be creating its holding company to book commercial real estate, freeing up capital for acquisitions and asset growth by the thrift subsidiary.

In an interview, Downey's chief executive, Stephen W. Prough, said a holding company structure will allow the thrift to expand business lines, including commercial real estate.

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