Irvine Thrift Adds 2 Seats to Its Board : S&Ls;: Western Financial Savings Bank’s action is prompted by federal regulators. One of the new directors is state’s former top regulator.

IRVINE — Prodded by federal thrift regulators, Western Financial Savings Bank added two new seats to its board of directors and named California’s former top regulator, William J. Crawford, to one of the positions.

Western Financial filled the other position with San Diego retailing executive Stanley E. Foster, who has been a director on the board of the Irvine thrift’s parent company, Westcorp Inc., since 1986.

Crawford, commissioner of the state Department of Savings and Loan from 1985 to 1990, has worked with federal regulators on failed thrifts since retiring from the public office.

The addition of two outside directors on the board of the savings and loan are among several actions that the Office of Thrift Supervision wanted Western Financial to take, said Stephen W. Prough, president of the thrift and of Westcorp.

Prough said the thrift, though healthy, may sign an agreement soon with the OTS that would require the savings and loan to review and improve internal systems, policies and procedures; to correct problems cited in the recent OTS financial examination of the thrift; to reduce its level of bad assets, and to maintain a 4.5% ratio of capital to assets.

The thrift’s core capital ratio at the end of March was 5.5%, and it has not had any problems meeting capital requirements. Its delinquent loans had increased to 2.29% at the end of March, from 1.49% a year earlier, but that ratio is still less than the 3% level that triggers regulatory scrutiny.

Western Financial also added $2 million to its reserve for loan losses to boost the total to $35.9 million, which regulators have said is adequate, Prough said. The agreement with the OTS would remain in effect until the agency ends it.

Prough, who is chairman this year of the California League of Savings Institutions, a statewide trade group, said he is not sure yet what form the agreement would take, especially because most of the requirements have been met or were never a problem to begin with.

He said he is not concerned about the proposed agreement because it simply represents promises the thrift has previously made to regulators. But such agreements were anathema to healthy thrifts just a few years ago.

Western Financial, created in 1982 by the merger of a thrift and loan active in auto loans and a small S&L;, has relied equally on its twin lines of business--auto loans and home loans--to help build a profitable concern, with $2.6 billion in assets and record income of nearly $19 million last year.

Among large, publicly owned financial institutions, Westcorp was ranked seventh in the state by the recent Times 100 annual listing of the state’s top companies.

But despite its success, auto lending is considered riskier than mortgage lending. Prough said he recognizes that thrifts should have more capital than required if they are going to make such consumer loans.