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Thursday, October 16, 2008

Downey Savings To Close Wholesale Loan Department

Sue Chang

MarketWatch Pulse

SAN FRANCISCO -- Downey Savings and Loan Association, a subsidiary of Downey Financial Corp. , said Thursday it will close its wholesale loan department and loan processing centers supporting the unit immediately. Downey Savings will also downsize its retail loan department. The moves will affect about 200 employees. "The Downey Savings' Board and management team have been evaluating, and will continue to evaluate, our long-term business plan in light of the challenges facing the company, the banking sector and the entire economy," said Charles Rinehart, chief executive of Downey Savings. "We have determined that a wholesale lending channel is no longer a necessary component of the plan. In addition, while we will continue to originate loans through our retail lending channel, we are scaling back our Retail Loan Department to better reflect the industry-wide contraction in retail lending."

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Word of the Day

Same-Store Sales

Most folks judge the health of a business by the revenue that comes in through sales. But not all revenue is equal. Companies can grow their sales by buying other companies, which means you don't get a clear view of how the real sales trends are moving.

So, many analysts, particularly those who look at retail, try to gauge what¿s known as "organic" growth, by looking at same-store sales. These are sales only at outlets open more than a year, so the metric can exclude any sales jump that comes from opening new locations. Retailers release same-store sales (which are frequently called "comps" since they're a true comparison from the previous period) every month.

Retail, incidentally, isn't the only industry to look at same-store sales. Hospital companies, also use the metric, to gauge how existing hospitals are performing compared to ones they just built or acquired.