NEWPORT BEACH, Calif., Oct. 16 /PRNewswire-FirstCall/ -- Downey Savings and Loan Association, F.A. today announced that it will close its Wholesale Loan Department and the loan processing centers supporting that Department, effective immediately. Downey Savings will also contract its Retail Loan Department. These changes will affect approximately 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 R. Rinehart, Chief Executive Officer 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.'

'We thank all the employees of our Wholesale Loan Department, and the other employees impacted by this action, for their hard work and dedication. Today's announcement is in no way a reflection on their performance, but rather a recognition of the Company's capital requirements and the changed dynamics in our industry, particularly the decreased ability of borrowers to qualify for loans,' added Mr. Rinehart.

Downey Savings and Loan Association, F.A., the primary subsidiary of Downey Financial Corp. (NYSE: DSL), is headquartered in Newport Beach, California, and has helped customers with their banking and borrowing needs since 1957. With assets of $13.9 billion, Downey Savings has 170 branches throughout California and five in Arizona. More company information is available at downeysavings.com.

Certain statements in this release may constitute 'forward-looking statements' under the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. Forward-looking statements do not relate strictly to historical information or current facts. Some forward-looking statements may be identified by use of terms such as 'expects,' 'plans,' 'believes,' 'continues,' or words of similar meaning, or future or conditional verbs such as 'will,' 'would,' 'should,' 'could' or 'may.' Downey's actual results or outcomes may differ significantly from the results discussed in such forward-looking statements. Factors that could cause such a difference are discussed under the heading 'Risk Factors' and in other sections of Downey's filings with the SEC, and in Downey's other current and periodic reports filed from time to time with the SEC. All forward-looking statements in this press release are made as of the date hereof, based on information available to Downey as of the date hereof, and Downey does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made, except as required by law.

SOURCE Downey Savings and Loan Association, F.A.