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Trading jobs: former S&L executives take on new callings in the outdoors, consulting, prison.

Trading Jobs

For 12 years, Tommy Trantham, a former Razorback and All-Southwest Conference defensive back, worked in the savings and loan business. His was the world of dark suits, disappointing loan figures and meeting after meeting in rooms sealed from the elements.

From 1987-1989, he was president of Madison Guaranty Savings & Loan at Little Rock. Before that he spent nine years with S&Ls or the Federal Home Loan Bank Board, which regulated the institutions.

Trantham, 44, a Little Rock native, left the boardroom like other S&L executives who now pursue careers quite unrelated to the financial world they knew. Most of the high flyers, who gambled on speculative real estate projects that sent their institutions spiraling into insolvency, are gone with a new slate of caretakers or the Resolution Trust Corp. struggling to gain control of a bad situation.

Of the state's 34 savings institutions, 13 are in federal conservatorship and up for sale. Total losses at 17 far outweighted mostly small profits at the remaining 17 in the state. The state's S&Ls had a combined negative net worth of $1.5 billion, as of Dec. 31, according to Sheshunoff Information Services Inc. at Austin, Texas.

Arkansas Business takes a look at where several former top officials at Madison Guaranty, Savers, FirstSouth, Independence Federal and First Federal savings and loans are now.

Two are in prison. One is heading for trial, and one has been acquitted of bank fraud charges. Four are now financial consultants, and one is retired. And Trantham is using sweat equity to build a profitable resort venture in Garland County.

Tough Job At Madison

Trantham was president, Bedford S&L, Bedford, Texas, 1984-1987; marketing director, Federal Home Loan Bank Board, 1982-1984, and president of Northwest S&L, Rogers, 1978-1982.

At Madison Guaranty, Trantham drew a difficult assignment from the board of directors which selected him. James B. McDougal, a former Madison president, acquitted in federal court June 7 of bank fraud charges, had been gone about a year when Trantham arrived.

Trantham's responsibilities were to staunch the hemorrhaging of deposits, while collecting as much as possible on bad loans.

After leaving Madison when his employment contract expired, Trantham probably will never again attend another savings and loan board meeting.

With a $200,000 loan through the U.S. Small Business Administration and help from his large family of brothers and sisters and inlaws, he is trying to push another operation into the black.

He has a 25-year lease with the U.S. Corps of Engineers for Crystal Springs Resort on Lake Ouachita (about 20 miles west of Hot Springs off U.S. Highway 270) and it's keeping him busy.

His days last 16-17 hours - building boat docks, repairing cabins, cutting grass with a tractor, cooking short order at the Kin Fokes restaurant and doing whatever it takes to polish the image of Crystal Springs and attract a steady stream of resort-goers.

Heat And Humidity Exchange

The cool of the evening is welcome following a 90-degree day. As the sky dims into a dull gray, lightning flashes and a thunderhead sounds off in the distance above the plush green carpeted hills and the deep blue water of Lake Ouachita. A small flotilla of pleasure boats heads for the protective cove at the Crystal Springs marina, and maybe a bite to eat at the restaurant.

Exchanging the daytime heat and humidity of the outdoors for a sweltering place behind the restaurant's stove, Trantham - president and majority owner of the corporation that operates the resort - talks about his work.

By the time he came to Madison, the FHLBB had already dealt with McDougal. "I tried to see if there was anything salvageable," Trantham says. "It was a terminal situation, like other places in Arkansas."

Through December 31, 1989, Madison Guaranty's net worth stood at a negative $26.7 million with net losses for calendar 1989 at $8.5 million, according to Sheshunoff.

Before he came, Madison funneled millions of dollars through its wholly owned service corporation into speculative land developments across Arkansas. When deals went bust with collapse of the oil-and-gas business, developers went into default and the institution, like others in variations on the same theme, saw its net worth quickly sink into the red.

Today, Trantham hurries to keep up with a steady stream of orders for ribeye, country fried steak, fried chicken and french fries.

An athlete and outdoor lover, he admits he never thought he would be caught one day cooking in a restaurant for a crowd of hungry tourists.

Trantham and his wife, Nancy, bought a 54 percent share in the corporation operating the resort while he was still at Madison. Richard Bonner of Orlando, Fla., holds the other 46 percent.

From February 1989, when the deal closed, until December 1989, he pored over balance sheets at Madison weekdays and on weekends became a resort maintenance man.

He enjoyed boating and fishing as a child, but a frustrating thing about running a resort - He's only been out fishing twice since becoming a resort operator.

Trantham enjoyed working as an S&L executive, but he's made a dramatic transition from the tension of the boardroom to the heat of the outdoors and a restaurant kitchen.

After building three large docks [to fit a convoy of houseboats], outfitting a new marina store, remodeling 16 cabins and a 60-bed lodge, and cleaning up a 45-unit trailer park, he has lost 20 pounds.

M.R. Godwin First Federal S&L, Little Rock Chairman 1985-1989 President 1982-1987

Godwin & Associates Inc. Mortgage Broker 1989-Present

After 13 years at First Federal, the state's largest savings and loan, Godwin, 58, and his son, Mark, began a commercial mortgage brokering operation at Little Rock in January 1989.

Their company works on any size projects and helps match investors and developers. Its focus has been central Arkansas. The former S&L executive says his current business is slow, and consists mainly of refinancing current projects.

First Federal was placed into receivership and renamed First Savings of Arkansas in September 1989. The institution had a negative net worth of more than $471 million, when it was taken over by federal regulatory officials.

Gerald R. Marshall Savers Federal S&L, Little Rock President/CEO 1987-1989

Marshall, 56, a native of Oklahoma City, took over Savers in July 1987, when its net worth through five straight quarters of losses was nearly $131 million. His more than 30 years of financial training were not enough to rescue Arkansas' then second-largest S&L from insolvency.

He resigned in September 1989, one month before Savers was placed into receivership. When it was taken over by the Resolution Trust Corp., its negative net worth had grown to more than $500 million.

He is now back in his hometown working as a financial consultant at a company he was associated with before coming to Savers.

W.P. Gulley Jr. Savers Federal S&L, Little Rock Chairman 1983-1988

Gulley, 66, retired, has been traveling a lot lately. He uses an office at Rhodes & Associates Inc., an insurance company his father founded in 1935 and he ran for 11 years until he became president of Savers Federal. The insurance company is now owned by Martin Rhodes, who purchased it from the Savers holding company in 1988. Gulley remains a consultant.

John Freeman Independence Federal S&L President/CEO 1987-1988

Freeman, 42, a Blytheville native, spent a total of 11 years at financial institutions in Batesville, four at Independence Federal and seven at the First National Bank there.

After leaving Independence Federal, Freeman returned to First National as an executive vice president. He then decided to go into business for himself, consulting and investing in real estate.

The institution's net worth through Dec. 31 was $249 million, according to Sheshunoff.

F.W. "Rick" Cobb Jr. Savers Federal S&L, Little Rock President 1983-1986

Self-employed Consultant Hot Springs 1989-Present

In 1986, Cobb, 45, became president of Bell Equities Corp., a company owned by Melvyn Bell. He left Bell Equities in 1989 and is now working in his own financial consultant business at Hot Springs.

Stephens Inc. sued Cobb in February 1988 for $1.34 million he allegedly owed for the purchase of 192,000 shares of Savers stock.

He borrowed $1.7 million from Stephens to buy the stock, and when he completed his purchase in 1976, it was selling for $13 a share. But the stock price fell to $6.50 a share in 1983. Cobb could not meet a Stephens' demand for more collateral and later filed bankruptcy and avoided paying the debt, a Stephens spokesman says.

Howard J. Wiechern Jr. FirstSouth Federal S&L, Pine Bluff Chairman 1984-1986 President 1980-1984

Wiechern, 51, was indicted in 1989 with Roderick D. Reed III, a former FirstSouth president, by a federal grand jury on bank fraud charges. The charges were later changed to concealing material matters from auditors and regulators.

His trial is scheduled to be held in Pine Bluff in October.

Federal regulators closed FirstSouth in December 1986, citing insider lending abuses as a major cause of its failure.

Investigators determined that 13 stockholders received more than $612 million in insider loans.

FirstSouth, which was the state's second-largest S&L, finished its last fiscal year, June 30, 1986, with $172 million in delinquent loans and foreclosed property.

Roderick D. Reed III FirstSouth Federal S&L President 1985-1986

Reed, 42, who moved up from SVP and EVP to become president of FirstSouth, was indicted in 1989 by a federal grand jury with Howard J. Wiechern Jr., former FirstSouth chairman, on charges of conspiracy and misapplication of the institution's money.

He pleaded guilty to conspiracy and was sentenced to pay a fine of $10,000 and serve 30 months in prison at a medium-security facility at Memphis.

He agreed to testify at Wiechern's trial, which is set for October in Pine Bluff.

O.B. "Buddy" Chandler Savers Federal S&L, Little Rock Sr. Commercial Loan Officer 1983-1984

Chandler, 50, is serving time at Camp Texarkana federal correctional institution. He was convicted in May 1989 of five counts of bank fraud, including one count of making a false entry on the books at Savers Federal and four charges of misapplication of funds.

He was sentenced to four years in prison and fined $15,000.

His attorney, David Smith of Benton, is appealing Chandler's case to the 8th U.S. Circuit in St. Louis.

During his trial he testified that F.W. "Rick" Cobb, former Savers president, and W.P. Gulley Jr., former Savers chairman, also approved the loans.

Gulley and Cobb denied the charges.

After leaving Savers, Chandler managed a convenience store at Texarkana.

James B. McDougal Madison Guaranty S&L, Little Rock Chairman/President 1982-1984

McDougal was acquitted June 7 in federal court at Little Rock of misapplication of Madison Guaranty money, conspiracy and submitting false documents.

PHOTO : MOWING DOWN THE ROAD: Tommy Trantham, a former Madison Guaranty S&L executive, mows the grass at Crystal Springs Resort, which he and his wife Nancy operate on the shore of Lake Ouachita. Photo by David F. Kern
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Author:Kern, David F.
Publication:Arkansas Business
Date:Jun 18, 1990
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