Magazine article American Banker

Old Stone's CEO Resigns as Big Loss Is Announced

Magazine article American Banker

Old Stone's CEO Resigns as Big Loss Is Announced

Article excerpt

Old Stone's CEO Resigns As Big Loss Is Announced

The top executive of Old Stone Corp. resigned Monday as the Rhode Island thrift announced it will report a "significant loss" for the third quarter and full year.

Theodore W. Barnes, who joined as a clerk in 1948, left as president and chief executive -- apparently under pressure from the Office of Thrift Supervision, analysts said.

Rosati Succeeds Barnes

The company said that James V. Rosati, president and chief executive of Old Stone's flagship bank, will assume Mr. Barnes' titles. Mr. Barnes, 60, could not be reached for comment.

Winfield Major, a spokesman for Old Stone, denied that regulators had pushed out Mr. Barnes. "It was totally separate and apart from the examination and everything else," he said.

But observers said the ouster fits a pattern. Regulators have initiated a slew of senior-executive departures in the past two years at ailing banks and thrifts.

Old Stone, with $3.4 billion in assets, is Rhode Island's largest thrift and its second-biggest financial institution. The company did not estimate its quarterly loss, which is expected to be reported within two weeks.

However, it announced a special $68 million addition to its reserve for loan losses and foreclosed real estate in the third quarter. The reserve, which stood at 19% of nonperforming assets just three months earlier, totaled 58% of nonperformers at Sept. 30, the company said.

Dividends Suspended

Old Stone's nonperforming assets at Sept. 30 totaled $304 million, or 16% of loans and foreclosed real estate. …

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