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Checking In
Grandpoint CEO Don Griffith at his downtown L.A. office.

Don Griffith’s downtown L.A. office is within walking distance of the hospital where he was born, but it was a long journey to get where he is today. He studied in Italy, volunteered for the Peace Corps in Panama and worked in Mexico before making his way back home to Los Angeles. After trying his hand in the family wholesaling business, Griffith found his true calling in banking – more precisely, in buying and building banks. He cashed in during the 1990s with a series of acquisitions after the savings and loan debacle, and now he’s trying to do it again by sifting through the ruins of the 2008 financial crisis. Despite the turmoil in the banking industry, Griffith raised a cool $350 million that he used last year to help launch Grandpoint Bank, which is now one of the nation’s fastest growing banks. The 68-year-old recently sat down with the Business Journal in his office overlooking downtown’s Grand Avenue to discuss his extensive travels, the opportunities he sees in the current market and how a new grandfather finds time to go heliskiing.

Question: As a kid, did you always know you wanted to get into finance?

Answer: I had no concept, no clue. Not a clue. I had no particular desire to go into finance or banking.

Then how did you end up here?

I went to Stanford and then I went to Berkeley and got a master’s in political science. I was curious about the world. When I was at Stanford I went to Italy and I loved it. I loved the experience, I loved the language and I loved traveling, seeing the world from a different lens, a different point of view. After college I went into the Peace Corps in Panama.

What did you do for them?

I was in urban community development, which was forming teams to solve problems. Everything from building wells to teaching.

Then you came back to the United States?

I went to Harvard Business School. After business school I wanted to go back to Latin America and do something entrepreneurial. I went to Citibank and they sent me to Mexico.

You traveled all over the place.

I didn’t start my first job until I was 28, so I traveled a lot. I’ve just been very lucky. I had a sense of adventure.

What did you do for Citibank?

They hired me and said they would send me overseas within three months, which they did. I was a lending officer calling on middle-market companies. I had sales targets – loans and deposits – but I had to do it in Spanish.

That sounds like an exciting opportunity for someone fresh out of school.

Citibank in the early ’70s was an exciting place. The U.S. banking system was beginning to go international for the first time and they were hiring a lot of people.

Where are you from?

I was born in Good Samaritan Hospital, right across the street. And my mother was born there.

A true Angeleno. What brought you back to Los Angeles?

I realized I didn’t want to move around the world every three years, and I came back to Los Angeles and went into a small family company in Long Beach that was in the meat business. It was a family company my grandfather had started back in the teens – wholesaling of meat.

Meat is quite a different business from banking.

It didn’t work out. I needed a job and the only thing I knew was banking, so Bank of America hired me. I was a lending officer for them. I spent about five years and was last in charge of the energy lending unit.

Where did you go from there?

I left BofA and went to First Interstate and spent 10 years and was CFO of the holding company. I left there in ’89 and spent about four-and-a-half years with KKR.

Kohlberg Kravis Roberts & Co. is considered a pioneer of leveraged buyouts. Was it tough as a banker to make the transition to private equity?

Not at all. My task was to help them when the thrifts and the banks were failing, and the (Resolution Trust Corp.) and the (Federal Deposit Insurance Corp.) were taking over banks. I just continued doing there what I had done at First Interstate as CFO, which was looking at problem banks. They needed a specialist in that area, so I was an adviser to them.

There were some good opportunities to buy banks on the cheap from the RTC. Did you do well?

We invested $284 million in Fleet and Fleet bought the Bank of New England from the FDIC. That investment increased almost tenfold.

Why didn’t you stay with KKR for long?

I struck out on my own and bought a little bank from the FDIC in Palos Verdes, where I live, in 1993. I bought another little bank, called Bay Cities National Bank, and we merged the two banks together. I had one investor who was just a very difficult individual. He bought the bank from us, and ultimately the bank almost failed under him and he had to sell it under duress just last year.

That bank has since been renamed Opus and under new management has become a major buyer of failed banks. Are they a competitor of yours?

No comment on Opus.

OK, but what did you do after selling Bay Cities?

I teamed up with Debbie Marsten, who’s been my business partner since ’96, and we bought three more little banks – one in ’96, one in ’97, one in ’99 – and built them into First Coastal Bank. We sold in the summer of ’07 to Citizens Business Bank.

Why have you spent so much of your career buying banks?

The one thing about banking I realized at some point was it was a fragmented business that would have consolidation and you could put something together.

You’ve got a pretty solid track record when it comes to bank acquisitions.

Yeah, but that’s yesterday. Tomorrow could be very different. You never know. I guess it was Andrew Grove of Intel who said if you’re not paranoid, you’re getting knocked off.

You’re paranoid?

Yeah. You always have to be nervous when you get up if you’re in this business.

You may be nervous, but you had some pretty good timing when you sold First Coastal in 2007.

That was perhaps luck, but we sold before things collapsed. I don’t think anybody predicted the magnitude of the collapse that occurred.

How did you start Grandpoint in such a tumultuous period?

We were fortunate and raised close to $350 million. I had some investors that had invested with us back in ’96 who felt that we had done a very good job for them and they helped us raise it. It was a group of individuals who had left Goldman. Over the years I have met and been very fortunate to have worked with a lot of people on Wall Street, so I knew a lot of people.

Are you satisfied with the progress Grandpoint has made?

I consider ourselves lucky. I scratch my head that we are where we are.

Do you think this period will prove as fruitful as the post-S&L crisis?

I have no clue. I don’t think anybody knows with bad assets. I think there’s an enormous opportunity if you can put together good people.

Do you think Grandpoint will be the bank where you finish your career?

At my age, yes. You only have so much time. Who knows? Only the good Lord knows that. It takes a long time to build a bank. It’s not fast.

Do you get to travel as much as you used to?

Right now, no. I’m working hard right now.

What was your last big trip?

My wife and I went to Quebec, Montreal, New York and Boston. I know I need to go to China, to mainland China, and I have not done that. I’ll do that.

How long have you been married?

Forty years. We met right after college, through my best friend.

Kids?

Two. They’re in their mid-30s. My daughter is a Broadway actress. She was in “South Pacific” and “Oklahoma.” My son is in real estate, got an MBA. His wife is an extraordinary person. They have little twin girls that are 1 year old, and a three-year-old boy. Grandma and grandpa are doing a lot of babysitting.

So you’re fairly new at this grandparent stuff?

Three years. It’s wonderful. I’m smitten.

What do you do when you’re not working or babysitting?

I like surfing and skiing. I went heliskiing the last two years.

Heliskiing?

A helicopter takes you up, drops you off at the top of the mountain, you ski down and the helicopter picks you up, takes you up and you do this all day long for a week.

You must be pretty athletic.

I played soccer in college and I played on a team that ultimately went to the quarterfinals of the NCAAs, lost to the national champions.

Very impressive. Anything else?

I play golf – not very well.

Don Griffith

TITLE: Chief Executive

ORGANIZATION: Grandpoint Capital Inc.

BORN: 1943; Los Angeles.

EDUCATION: Bachelor’s degree, Stanford University; master’s in political science, UC Berkeley; M.B.A., Harvard Business School.

CAREER TURNING POINT: Studying abroad in Italy as a junior in college: “It just opened me up.”

MOST INFLUENTIAL PEOPLE: His sixth-grade teacher at Third Street Grammar School, a math teacher he had in high school, his soccer coach as a college freshman, the head of the Peace Corps in Panama. “They were all strong individuals.”

PERSONAL: Lives in Palos Verdes with his wife; has two adult children.

ACTIVITIES: Skiing, surfing, golfing, reading.

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