BANKING : Downey Branches Out With a Buy-Sell Expansion Strategy

With a new president and a mandate to increase its size, Downey Savings & Loan wants to do the same thing that one of its neighbors has been doing with great success.

The Newport Beach thrift, with extra cash to spend, is looking to acquire branches that are located near its own 52-branch network so it can move the deposits to its own offices, then close the branches it acquires.

That would give Downey a more efficient network with a greater volume of deposits and no new office buildings to maintain or lease. The thrift also would likely take on many of the employees from the branches it buys.

American Savings Bank in Irvine has used that strategy well, especially in assuming the deposits from failed thrifts.

So it was only natural for Downey to raid American’s talent pool to find William Bridges to help it launch its strategy. Bridges was senior vice president for retail banking at American Savings, in charge of 114 branches and involved in branch acquisitions.

Bridges joined Downey two weeks ago as its director of retail banking, a position vacant since last August.

“Our goal is to build our franchise quickly and effectively,” said Stephen W. Prough, who started work last week as Downey’s new president and chief executive.

Besides buying existing branches, he said, the thrift will generate more deposits from its market, buy branches from failed thrifts and even build new branches, though most financial institutions shy away from new construction because of the cost.