A high-flying Oregon holding company is reassessing its plans after its two California thrift subsidiaries were slapped with regulatory restrictions because of their rapid growth.

The Office of Thrift Supervision has imposed cease-and-desist orders on First Bank of Beverly Hills and Girard Savings Bank, San Diego. Both are subsidiaries of Portland-based Wilshire Financial Services Group, a booming nine-year-old finance company that primarily buys and services secondary- market loans from banks and federal agencies.

Regulators are demanding that the two thrifts strengthen their internal controls, implement new policies governing asset review, loan purchasing, and loan losses, and bring in more experienced management.

Most importantly, the two institutions are barred from growing beyond their current sizes. Girard has $400 million in assets, while Calabasas- based First Bank has $143 million.

While not an indictment of Wilshire's overall growth strategy, the OTS orders point up the problems inherent in expanding too much too fast. Regulators were concerned about thrift officials' ability to manage their rapid growth and new size, given the inadequate controls in place at the two institutions.

From December 1995 to March 1996, the two thrifts had grown to about $550 million in combined assets from just $180 million, primarily through the acquisition of residential mortgage portfolios and wholesale deposits from around the country.

Wilshire officials said they are complying with the regulatory orders, but downplayed the impact. Neither Wilshire itself nor any other subsidiaries were cited in the orders.

"This is just a growth issue and we're addressing it with all our attention," said Andrew A. Wiederhorn, founder and chief executive of Wilshire. "We're certainly disappointed that we were unable to satisfy regulatory concerns at the time of our last examination."

The nearly identical orders state the thrifts completed significant transactions without proper analysis, failed to maintain adequate records or key procedures, miscalculated risk-weighted capital, and didn't have an effective asset-review system. In addition, First Bank is charged with violating a June 1995 supervisory agreement with the OTS that also barred further growth.

The restrictions will delay Wilshire's plan to increase the subsidiaries' profitability by boosting total assets to $1 billion. Company officials said in early 1995 they believe the two thrifts can't be profitable enough at their current size.

First Bank hasn't made money since 1993 and has lost $3.4 million since the beginning of 1994. Girard has lost $2 million since the beginning of 1993, but did earn some money in 1995. Both also have nonperforming loans that equal more than 8.5% of total loans.

The orders couldn't have come at a worse time for the $1.5 billion-asset Wilshire. The company is in the middle of an initial public offering, scheduled to be priced shortly. And its previously announced plans to merge the two thrift subsidiaries have been put on temporary hold because of the OTS actions.

The thrifts' next regulatory exam is about four months away, Mr. Wiederhorn said. "We hope to demonstrate that we've resolved all the issues in the next 120 days, but we can't be certain that we'll be able to," he said.

Wilshire began its expansion into thrift ownership in 1993, buying First Bank when the troubled institution was in imminent danger of being seized. The company bought Girard a year later.

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