Regulators expected to put some restraints on Calif. United Bank.

Officers of California United Bank expect to accept an order from the U.S. Office of the Comptroller of the Currency by the first week in July which may restrict the bank's ability to lend, invest or declare dividends, said Jon P. Goodman, vice chairman of the board of the bank.

The expected OCC order would arrive in the wake of the resignation of John J. Keating, president, chief executive officer and one of the founders of the Encino-based bank, who left on June 2. A key guiding force in the bank's growth, Keating was replaced June 3 by Stephen G. Carpenter, who was vice chairman of middle market banking for Security Pacific Corp.

However, Keating did not resign as a result of the pending OCC order, Goodman said. Keating could not be reached for comment.

"It is, at the very least, a cordial parting," Goodman said of Keating's departure. He is still on the board of directors and "is working very closely with Steve Carpenter," Goodman added.

Since August, when California United Bank received a report of examination criticizing bank policies and procedures from the OCC, details of which have not been disclosed, bank officials have been negotiating with federal regulators regarding what type of written agreement the bank would enter into with the federal agency which regulates nationally chartered banks, Goodman said.

The bank's problems revolve around policy and procedure problems, and not soundness and safety issues, said Goodman, who declined to discuss specific problems upon which regulators are focusing. The bank has seen an increase in nonperforming loans, including unsecured nonperforming loans, in the last year, according to bank statements.

"We're still in negotiations" with federal regulators, Goodman said. "If the bank were capitally impaired, we would not still be negotiating," said Goodman, who is director of the entrepreneurial studies program at USC.

"What's wrong with California United is what is wrong with the economy," she added. Federal regulators are concerned that bank failures may spread from New England through the Southwest and into California, and "California is now under the OCC microscope," Goodman said.

She said OCC officials have told her that numerous banks in the state are under some sort of orders from the OCC.

The agreement could take the form of one of three written documents -- a "consent order," a "memorandum of understanding" or a "formal agreement" -- each of which has different legal implications for the bank, Goodman said.

The OCC issues such written documents to make banks "commit to specific corrective action," said Richard Silver, an attorney with the OCC Western Regional Office in San Francisco. Typically, such documents specify the corrective action regulators want the bank to take, with deadlines to make the changes, he said.

* A memorandum of understanding is the most informal of the three written documents and is not a public document, Silver said.

* A formal agreement is a public document on the "first rung" of the enforcement action ladder, Silver said.

* A consent order is more "severe" than a formal agreement and can be enforced in federal district court, Silver said. In order to enforce the other two documents, regulators would need to "escalate to a higher enforcement document," Silver said.

In the 1991 annual report of CU Bancorp, the holding company for California United Bank, it was noted that the bank may in the future enter into an agreement with the OCC in which restrictions could be placed temporarily on the bank's growth, lending, investments and dividends. The report also noted that the OCC could require California United Bank to inject capital to bring it to standards above federal minimums.

California United Bank currently exceeds all federal capital ratios, said Edmund Belak, spokesman for the bank. As of March 31, the bank's capital ratio was at 7.31 percent, above the current federal minimum of 3.0 percent and the minimum of 3.625 percent which banks will be required to meet by the end of 1992, Belak noted.

For first quarter 1992, California United Bank reported net income of $595,000, compared with $987,000 a year earlier. For the full year 1991, the bank posted a loss of $3.4 million, compared to net income of $6.2 million in 1990 and $6.5 million in 1989.

Non-performing loans were at $20.6 million, or 8 percent of total loans, at March 31, 1992, compared with $14.9 million, or 5.4 percent of the total, at year-end 1991.

In CU Bancorp's 1991 annual report, it was noted that the bank's non-performing loans, which were "substantially unsecured," increased "in excess of tenfold" in 1991 over 1990.

Non-performing loans rose from $4 million at the end of December 1990 to $14.9 million at the end of 1991, according to bank figures.

The number of unsecured loans rose from $800,000 to $10.8 million in the same time period, and the company provided $14.3 million for loan losses during 1991, according to the report.

The bank was the center of much press coverage in recent years because its former name was Lincoln National Bank and its chief was named Keating -- at a time when scandal swirled about Lincoln Savings and its chief, Charles Keating. The firm changed its name, and its Keating is not related to Lincoln Savings' Charles Keating.