For Rinehart, It Boiled Down to a Matter of Scale

Charles Rinehart moved to H.F. Ahmanson & Co. as an outsider from the consumer finance industry, and he quickly set out remodeling its venerable Home Savings of America thrift to better compete in financial services by looking more like a bank. That same intense competition in the California market pushed Rinehart into putting Ahmanson up for sale.

“Scale is critical to a company” in consumer banking, Rinehart said at a news conference. “We realized that rather than being a consolidator, we’d be a consolidatee, and we concluded it would be in the best interest of shareholders to do it proactively.”

The 51-year-old former paratrooper with a mathematics degree will leave Ahmanson and Home Savings--he is chairman and chief executive of both--after the merger with Washington Mutual Inc.

Since replacing longtime Home Savings leader Richard H. Deihl in 1993, Rinehart has been working to make Home Savings less like a traditional thrift, now offering such bank-like services as small-business banking, cash management services and consumer loans.

The parent company, Irwindale-based Ahmanson, reported record income for 1997 as well as improved asset quality.

“Rinehart has been doing a fantastic job for the shareholders,” said Jonathan Gray of Sanford C. Bernstein & Co. “But I don’t believe that he really liked the mortgage business, and his heart wasn’t in it. I think his heart was still in the consumer finance business.”

A native of San Francisco, Rinehart started his career with Fireman’s Fund Insurance Co. in 1969 as an actuary. He became executive vice president there in 1982 and, the next year, joined Avco Financial Services as president. Rinehart became chief executive of Avco in 1985. Deihl persuaded Rinehart in December 1989 to join Ahmanson to be his heir apparent.