Directors Seek Successor Who Can Restore Confidence

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Directors Seek Successor Who Can Restore Confidence

The resignation of Charles W. Knapp as chairman of the Financial Corporation of America does little to solve the company's long-term problems, leading thrift executives and analysts say.

Still needed, some say, is a government guarantee of all deposits at the American Savings & Loan Association, Financial's primary unit and the nation's largest thrift, to stop the drain on the thrift's deposits.

Regulators at least need to express confidence in the strength of American Savings to reassure depositors, said Ernest Leff, an attorney will Leff and Mason, a Beverly Hills law firm.

But a West Coast thrift executive commented: "I don't see how the government could've provided assistance without first getting Knapp to resign.'

Mr. Knapp's resignation itself--and the naming of a successor--could help stem the outflow of deposits that has hit American Savings, said Jerry Baron, an analyst with First Boston Corp.

"Charlie's resignation was probably aimed 90% toward restoring confidence,' Mr. Baron said. "It may impress upon depositors that an aggressive manager is no longer at the helm, as well as removing a point of friction with regulators. And it ought to quiet all those unnamed critics' quoted in recent press reports.

The big question Tuesday was whether Financial's board of directors would select a replacement from current management, or regulators would force the board to choose a successor from outside.

Regulators had applied pressure for Mr. Knapp's resignation, though the thrift executive said the decision was voluntary.

"Charlie's not the type to be forced out, he must have felt even greater pressure from institutional investors who were withdrawing their funds,' said a former thrift regulator.

Whether insider or outsider, Mr. Knapp's successor must have a reputation that will further strengthen depositor confidence, said Anthony Frank, chairman of First Nationwide Savings & Loan Association, San Francisco.

"I guess [Mr. Knapp] and I agree the issue is depositors' confidence,' he said.

Once in place, the new chairman should personally call and talk to large depositors, Mr. Frank said, while also developing a strategy to rebuild their confidence in American Savings.

Mr. Frank denied press reports that he was approached as a possible replacement for Mr. Knapp, adding that he is happy in his present job at First Nationwide.

Speculation about a replacement Tuesday favored William Popejoy, who was president of the former Financial Federation Inc., Los Angeles, when it merged with Great Western Savings, Beverly Hills. Mr. Popejoy also is a former president of the Federal Home Loan Mortgage Corp. and was president of American Savings before its merger with Financial Corporation.

"He has a lot of significant experience with the thrift industry,' Mr. Barron said.

Other names mentioned as possible successors include Jay Janis of Los Angeles, a former chairman of the Federal Home Loan Bank Board and currently a director of the Federal Home Loan Bank Board of San Francisco; Maurice Mann of A.G. Becker in San Francisco; Richard Pratt, president of Merrill Lynch Mortgage Capital Inc. …