Magazine article American Banker

New President under the Gun at Battered Calif. Bank

Magazine article American Banker

New President under the Gun at Battered Calif. Bank

Article excerpt

James E. Stutz, the new president of Fidelity Federal Bank, is no stranger to the firing line.

Shortly after getting a job as a teller at the Glendale, Calif.-based company in 1964, Mr. Stutz became its first teller to hand over cash to robbers - and wound up doing so three times in 14 months.

The experience included being bound and gagged and having a .44-caliber Magnum aimed at his head. But Mr. Stutz, 53, says that in some ways fighting through the financial woes of $3.3 billion-asset Fidelity Federal in the past three years has been worse.

"The terror of going through a holdup is one thing, but it's over quickly," Mr. Stutz said. "Dealing with the issues of this company was probably more draining."

Mr. Stutz, who was promoted June 1 from executive vice president of retail banking, said he thinks the difficult days are behind him. "We hope our profits are much greener in the future," he said.

Mr. Stutz takes the president's title from Richard M. Greenwood, who is staying on as chairman and chief executive.

Fidelity's problems have been serious. A previous management team made the thrift one of the most multifamily-focused of all Southern California lenders just before the bottom fell out of the market in the early 1990s.

Loan-losses soared, and to stay out of trouble with regulators, Fidelity was forced to raise capital three times in as many years, which substantially diluted the stock of existing shareholders. These shareholders included such notables as Michael Price's Heine Securities, J.P. Morgan & Co., and Keefe Partners. Some of these investors have privately and publicly carped at Fidelity's handling of the offerings, and bailed out of their holdings at substantial losses.

What's more, management turmoil has led one former executive to sue, alleging the thrift misled investors in a recent offering. …

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