Downey Financial Corp., which has posted four straight quarterly losses under the weight of bad mortgages, has a new chief executive officer.
The Newport Beach, Calif., thrift company said late Monday that it had hired Charles Rinehart, the chairman of VeriFone Holdings Inc., to spearhead a recovery. What form that recovery will take remains unknown.
Mr. Rinehart, 61, was the CFO of H.F. Ahmanson & Co. for five years before Washington Mutual Inc. bought it in 1998. He declined an interview request Tuesday.
Downey said last month that it was pursuing strategic alternatives. Analysts interpreted the announcement as a signal that it would seek a buyer or a capital infusion to offset its lofty loan losses. But bankers and analysts said in interviews this week that buyers are likely on the sidelines as the Treasury Department pursues a $700 billion bailout of troubled banks and thrifts, waiting to see if federal assistance might sweeten deals involving the likes of Downey.
In a regulatory filing, Downey said Mr. Rinehart succeeded Thomas Prince, who will stay with Downey as a senior executive vice president. Mr. Prince took the CEO spot in July, when Daniel Rosenthal resigned under pressure from investors.
Downey was a major player in the option adjustable-rate mortgages that borrowers in California's weak housing market are struggling to pay off. It has lost about $600 million over the past four quarters, including $219 million in the second quarter. Its shares have dropped about 90% this year.
"We will focus on making the changes necessary to generate value for our shareholders," Mr. Rinehart, a director of Safeco Corp., said in a press release.
