Two Institutions Seek to Expand Without Compromising Mission

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Two Institutions Seek to Expand Without Compromising Mission

The business world has gone through its unrelenting period of homogenization, and banking is an obvious part of it. A Washington Mutual branch is just as likely to be in Miami Beach as in its home base of Seattle. Old timers might still remember Bank of America as a San Francisco institution, but these days it’s based in Charlotte, N.C.

Here in L.A., the largest financial institution has $12 billion in assets big, to be sure, but hardly in the same league as a Wells Fargo (more than three times that size), and certainly not a J.P. Morgan Chase.

But if anything has been learned in the past 10 years about L.A.’s economy, it’s that size doesn’t always matter. In fact, it’s often times better to be a smaller, more tightly focused business than one looking to be all things to all depositors. Consider the longevity of Los Angeles financial institutions like Farmers & Merchants Bank of Long Beach (1907), Cathay Bank (1962), Community Bank of Pasadena (1945) and Manufacturers Bank (1962).

In their own very different ways, both City National Corp., the Beverly Hills-based parent of City National Bank, and Operation Hope, the L.A.-based non-profit financial hybrid that provides banking services to under-served urban communities, have held their ground during a period of economic and financial uncertainty.

City National, founded in 1954, has steadily focused on a higher-end customer base (it’s often called the “banker to the stars”), and despite being wooed by countless acquisition-minded banks, the management, led by CEO Russell Goldsmith, has shown little interest in selling out.

Operation Hope, now in its 11th year, is largely the vision of publicity savvy John Bryant, who has created what is described in press materials as “America’s first non-profit social investment banking organization.”

In this week’s Banking and Finance special report, the Business Journal profiles these two quite distinct financial institutions to see how they’ve grown up until now and what challenges they face in the months and years to come.

Mark Lacter, Editor

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