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LISA STEEN PROCTOR

Staff Reporter

San Francisco’s dominance in the financial world is evident in the numbers.

The 22 banks headquartered in San Francisco boast $311 billion in assets. By comparison, the 103 banks headquartered in Los Angeles County have just $33 billion in assets, according to the California Bankers Association.

Moreover, any hopes by Los Angeles to close that gap suffered enormous setbacks with the acquisition of Security Pacific Bank by BankAmerica Corp. and the hostile takeover of First Interstate Bancorp by Wells Fargo & Co.

Both BofA and Wells Fargo, of course, are based in San Francisco.

Los Angeles remains the major center for savings institutions. But even here, L.A.’s position is under attack. Seattle is making waves as a financial center primarily due to the aggressiveness of Washington Mutual Inc.

The Seattle-based thrift has grown from $7 billion in assets in 1993 to $44 billion in assets today, largely through an aggressive acquisition strategy. It now stands to add significantly to its growth if it is successful in its bid to acquire Great Western Financial Corp.

So, what’s going on in these cities that’s not going on in L.A.?

Management, management, management, say analysts.

“It’s no different than why the (San Francisco) ’49ers are so good they have better coaches,” says Thomas Carley, an analyst at Jensen Securities Co. “It’s a management business. What drives this is that the management in San Francisco is motivated and talented. They are the ones doing the deals.”

For example, says Carley, Wells Fargo had no choice but to grow given their less-than-stellar earnings and the only way for Wells Fargo to grow was through acquisitions. “When you’re that big, you’ve got to do a deal,” said Carley.

Carley also points to Washington Mutual Chairman and CEO Kerry Killinger as responsible for shaping that institution.

“If it weren’t for Killinger, it would still be a sleepy $7 billion thrift,” said Carley. “He wanted to do deals and he’s done it and done it successfully.”

Could it be that Seattle and San Francisco breed more aggressive management teams?

Not necessarily, say experts.

“It’s almost like there’s an element of luck,” says James Bradshaw, an analyst with Pacific Crest Securities. “There’s management that knows how to win and they happen to be in San Francisco or Seattle.”

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