But while the county has historically been “under banked,” the endeavor is anything but simple. Just consider California National Bank.
The Los Angeles institution prefers to open a new, or de novo, branch when it determines that existing customers have to drive more than 20 minutes to the nearest branch and demographic studies indicate there is more business to be had.
The decision trips off a process that involves a hunt for a freestanding building but not just anyone will do. It has to be easily accessible by car, visible from a major thoroughfare and the location shouldn’t be too close to a competitor.
And then there’s the need for attracting new customers that will support the new branch, not a trivial worry given that new, or de novo, branches often run in the red for up to five years.
“We like to hire bankers from the local community, because they are out there at church events, schools, chamber of commerce and they can bring in new business,” said Gaylin Anderson, senior vice president of retail sales at California National Bank. “If you don’t have a real thought-out plan, you can be in the water very quickly.”
California National has some other tricks it employs to get branches off the ground successfully. The interior design tries to reflect surrounding demographics. For example, its Santa Monica branch commands more of a business tone, while the Rancho Cucamonga branch exudes a homey aura.
The efforts appear to have paid off, with the bank opening a dozen new branches in Los Angeles, Orange and Ventura counties since 2003. But there are other strategies that also can be successful.
Wells Fargo, which has opened 37 branches in L.A. over the past four years, likes to place branches in the hottest spot in town. Its Compton branch, which just opened this month, is at the Compton Gateway Town Center, already a popular destination. But like California National and many other banks, a key metric in deciding whether to open a branch is a thriving growing residential real estate market.
“Look at the expansion in the Santa Clarita Valley over the last several years. We’ve opened store after store there,” said Shelley Freeman, Wells Fargo’s L.A. regional president.
For Promerica Bank, the first locally-owned Latino bank to start in California in more than 30 years, the decision about where to open its headquarters was a matter more of symbolism than demographics.
“Some people said we should consider a Latino enclave, such as East Los Angeles, Santa Ana and Huntington Park,” said Maria Contreras-Sweet, the bank’s founder and chairwoman. “But considering the enormity and the reach of the Latino community here, we wanted to show that Promerica belongs in the heart of the Los Angeles.”
The bank is in the planning stages of launching branches in Los Angeles neighborhoods with the highest concentration of Latinos. Most branches, as with the main office, have glass interior to symbolize transparency.
But in an effort to make its Hispanic clientele feel more at home, customers will be offered refreshment when they arrive and some branches will even have their versions of the main branch’s La Cocina, where snacks and drinks are available.
“One time, a couple had come from quite a distance to our bank and was overwhelmed on how to complete an SBA application. After a few hours, I noticed that they were still there, right into lunch time,” said Contreras-Sweet. “We brought down turkey sandwiches for them from the kitchen, and they were just so touched. They said they would never go back to any other bank. It was a small thing, but a very important detail in making them feel comfortable.”
