The chief executive of Downey Financial Corp. announced that he is stepping down from his post at the California thrift.

Stephen W. Prough said that he is resigning from the $5.2 billion-asset thrift effective this Friday. He will be succeeded by James W. Lokey, 49, a 23-year veteran of First Interstate Bancorp before it was acquired by Wells Fargo & Co. last year.

Mr. Lokey's first day will be next Tuesday. Most recently, he was an executive vice president at Wells.

"I like to build things, grow things, and change things," said Mr. Prough, 52. "I think my job is pretty well done."

Industry observers contend that in his less than three years at the helm, Mr. Prough did not live up to the expectations of Maurice L. McAlister, the company's founder, longtime former CEO, and current chairman.

"Maurice McAlister runs the bank, period," said a Los Angeles bank consultant. "When you have an owner-founder controlling interest, you are subject to the genius and the whims of that kind of structure."

Since Mr. McAlister, 71, retired as CEO in 1991, the company has had four chief executives, none of which lasted as long as Mr. Prough did-about 32 months.

Mr. McAlister's family holds about 20% of the company's stock, more than any other shareholder. "I know Mac (McAlister) was looking to change for some time," said an investment banker who requested anonymity. "He's trying to become much more banklike, like a lot of other thrifts, and this was seen as a way for Mac to make some changes at the senior level and put in a seasoned executive at the helm."

Mr. Prough, who grew up down the street from Downey's headquarters in Newport Beach, said he was aware that the search process was going on for as long as six months. Mr. Lokey's name first surfaced about 30 days ago, he said.

The move, nevertheless, surprised most observers, who said Mr. Prough is generally well regarded.

Among other initiatives, he brought the company into supermarkets, with about 40 new branches scheduled to open by the spring.

Though the company's assets grew by more than 44% during his tenure, it's possible that the thrift was not as profitable as Mr. McAlister thought possible, observers said. It's return on equity at yearend 1996 was 9.02%, consistent with its peers. The thrift's stock has risen by 70% since Mr. Prough took over less than three years ago.

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