Downey Reaches Consent Orders With OTS

Downey Financial Corp., Newport Beach, Calif., has announced that the company and its subsidiary, Downey Savings and Loan Association, have agreed to consent orders with the Office of Thrift Supervision relating to regulatory capital and real estate disposition, among other things. Downey said the orders "to a large extent, formalize certain measures previously announced by the company to enhance the bank's financial strength." As a result of the orders, Downey also announced the sale of certain noncore real estate assets that produced aggregate cash proceeds of $110 million, adding that it expects to report a net pretax gain of approximately $68 million from the sale. The gain, combined with a dividend to the bank from a wholly owned subsidiary, will result in an increase of approximately $109 million in the bank's regulatory capital, Downey said. Downey chairman Michael Bozarth said the orders "reflect a number of measures that Downey has already taken and, in some cases, is close to completing." The company can be found online at http://www.downeysavings.com.