Sung Won Sohn
Title:
Chief executive
Company:
Hanmi Bank
Born:
Seoul, 1944
Education:
B.A., economics, University of Florida; M.A., economics, Wayne State University; Ph.D., economics, University of Pittsburgh
Career Turning Point:
While teaching at a campus of the Pennsylvania State System of Higher Education, being recruited to serve on the economic advisory team of President Richard Nixon
Most Influential People:
Father, who ran a bank in Seoul; Hazen Nutter, University of Florida professor who became “surrogate father;” Marina Whitman, faculty advisor at University of Pittsburgh who recruited him to serve in Nixon White House; Phillip Harris, former president, Norwest Bank
Personal:
Lives in Los Angeles with wife, Yoon and 12-year-old son
Hobbies:
Reading, sailing, golf
Sung Won Sohn, chief executive of Los Angeles-based Hanmi Bank is used to forging his own path. Growing up in Korea, he bucked his family’s wishes and left to study economics in the U.S. Then, instead of settling into academia, he took the bold step of joining the Nixon White House as an economic advisor. When given an opportunity to join a prestigious banking firm in New York, he turned that down to go to Norwest Bank, a relatively unknown institution in the Midwest. After more than three decades at Norwest which bought Wells Fargo Bank in 1998 and assumed the Wells Fargo name Sohn took the helm of the nation’s largest Korean bank in 2005 and is trying to lead it through a transition from a community bank to a regional financial powerhouse. Through it all, Sohn has used his talent for making complex economic issues understandable, and in the process he has become a prominent economist and one of the most pre-eminent Korean-American businessmen in Los Angeles.
Question: After 31 years at Norwest/Wells Fargo, what prompted you to leave?
Answer:
Ever since I was a teenager growing up in Seoul where my father was a bank executive, I had wanted to run my own bank someday. It took me 31 years to figure out that they weren’t going to let me run Wells Fargo.
Q: Why did you leave Minneapolis and come to Los Angeles?
A:
By 2004, I had a real desire to reconnect with Korean society. I had spent almost all my adult life immersed in mainstream American society. Here was a chance to experience Korean society, and a thriving one at that.
Q: Since coming to L.A., how have you been able to integrate into the Korean community?
A:
I think the integration is going quite well. Clearly after 31 years, I can’t be like everyone else who’s been here all along. But I do go to various events, like with the Korean Chamber of Commerce or fundraisers. But it’s more than just attending events. It’s a whole way of living. Most of the time now, I speak Korean. Most of the people I interact with are Koreans. In fact, one of the reasons I’ve decided to join non-Korean boards is to keep in touch with the non-Korean community.
Q: What about your son?
A:
My son has adjusted quite well. He’s adjusted better than my wife and I. He’s young and flexible and adaptable. His best friends are Korean. In fact, he’s spending so much time with his Korean friends that we’re encouraging him to spend more time with non-Korean friends.
Q: Speaking of your son, you had him late in life. What’s that been like?
A:
Having a son gives me more reason to work harder. Life would be much less interesting without him.
Q: When do you find time to spend with him?
A:
I try to carve out Sundays for time with family going to church, spending quiet time with them, etc. On Saturdays, I often play golf with customers to build customer relations. It’s something I have to do, but I also enjoy it.
Q: So you must be pretty busy these days.
A:
My typical day has lots of meetings. Loan committee meetings, board meetings. Many employees want to see me on various matters, ranging from mergers and acquisitions to salary increases. A lot of people in Korean community also want to see me. Some want me to speak to them; others want to meet me because they think I’m some sort of celebrity. There’s a great deal of demands on my time from customers and civic groups and charitable organizations and that usually means a lot of evening activities.
Q: What were your goals for Hanmi Bank when you took over as president and chief executive?
A:
When I came on board, Hanmi Bank was in between being a community bank and a regional bank. My primary goal has been to lead the bank while completing the transition to a regional bank, much like Wells Fargo. A regional bank should have more and better services than a community bank and a wider geographic footprint. I also want this bank to be a great place to work.
Q: Has it been difficult to make this transition?
A:
Yes, it has been difficult to change attitudes. The Korean community had long been quite insular, with its own culture, and somewhat resistant to change from the outside. Part of that comes from the fact that the Korean community has done very well on its own. People felt they didn’t want to mess with a formula that had been successful.
Q: They do have a point there. If the formula had been so successful, then why change?
A:
Because we must. There are now 14 or 15 banks serving the Korean American community, depending on how you count them. Most of these are based right down the street. With that many banks, we can’t just stay focused on the Korean community.
Q: So how do you become a regional bank?
A:
For starters, we have to offer more services. We’ve already launched cash management and wealth management services. Also, we’re planning to expand geographically. We’ve already got a couple of branches in the Bay Area and our plan calls for branches in New York, Atlanta, Seattle, all of which have sizable Korean populations. Eventually, we’ll be opening branches in places were there are very few Koreans.
Q: Has the real estate slowdown impacted Hanmi?
A:
We’re not in the residential real estate market and the commercial real estate market is holding up quite well. But we are feeling some of the impact: there are fewer overall real estate transactions and we also do business with clients who themselves have residential real estate holdings.
Q: What about the credit crunch?
A:
Actually, the credit crunch has helped us a bit. We used to get competition from banks bidding for the same business we were. But many of these banks got their funding from collateralized debt obligations; that’s now dried up, so they could be dropping out of the picture.
Q: Your father was a successful banker in Korea and your family seemed to be doing well. So why did you come to the United States?
A:
When I was growing up, it was right after the Korean war and Korea was a poor country. When I was finishing high school, I realized there was much more opportunity in places like the United States or the United Kingdom. My plan was to come to the U.S., learn economics, go back to Korea and help straighten out the economy. I also had a long-time dream of following in my father’s footsteps and running a bank of my own someday.
Q: What did your father think of your plan?
A:
He thought I was out of my mind. He wanted me to stay in Korea and become a lawyer or a doctor, which were regarded as very successful careers at that time. He kept telling me that banking was too difficult a business to be in. He also thought Korea would recover. He was right of course: the Korean economy straightened itself out without my help. In the end, though, he reluctantly agreed to let me go.
Q: Why the University of Florida?
A:
Growing up in Korea, I had never seen a palm tree. When I saw pictures of the University of Florida campus, with all those palm trees and the lush greenery, my mind was made up. I knew I wanted to go to a subtropical climate. Of course, another factor was that they offered me a substantial scholarship that covered most of my tuition.
Q: How did you cope as a young foreigner in the U.S.?
A:
The best piece of advice came from Professor Hazen Nutter while I was at the University of Florida. When I was here all alone and struggling a bit, he really became a surrogate father for me. He said, “It’s not so much what you do, but how you do things that’s important.”
Q: Shortly after you received your Ph.D. in economics, you became an economic advisor in the Nixon White House. How did that come about?
A:
I was teaching economics at the Pennsylvania State System for Higher Education and was probably headed for a career as a college professor. But my doctoral dissertation advisor, Marina Whitman, became an advisor to the Nixon White House. About six months later, I finished my dissertation and sent her a copy. She read it and the next thing I knew she asked me if I would like to join her working in the White House. At that point (in late 1972), I put away any thoughts I had of returning to Korea.
Q: Why did your dissertation get such a glowing review by Marina Whitman?
A:
My dissertation gets quite technical, but boiling it down, I found a way to take portfolio management theory the quantifying and managing of risks versus returns and apply it to something concrete, namely banking. The theory itself wasn’t new, but applying it practically was. Marina Whitman was impressed by this application of the general theory to a practical situation.
Q: What did you do in the Nixon White House?
A:
I was put in charge of monetary policy and housing. Part of my job was summarizing the performance of the financial markets once a week. I was also a liaison to the Federal Reserve Board, which was then chaired by Arthur Burns. That’s when I got to know Alan Greenspan, as he was then working as an outside economic consultant.
Q: What was your impression of Alan Greenspan?
A:
At the time, I was impressed with him; he had command of a great deal of information and data. I’d never met someone who had so many numbers in his head. Back then, we didn’t have PCs. He was a walking computer. But I was wondering whether he was also looking at the big picture as well as details. That’s what impressed me about his tenure as chairman of the Federal Reserve Board. He also had good political antennae and was a good diplomat.
Q: Has any revelation in his new memoir surprised you?
A:
I’m going to read it on the plane later this month when I go to Korea. In fact, I’m going to be moderating a panel on which former chairman Greenspan will be speaking. But from what I’ve heard, I think he’s right to criticize the Bush Administration’s economic policies. The budget deficit has been too high. The administration should have done a better job of managing the deficit, especially a Republican administration.
Q: What were your impressions of President Nixon?
A:
I did meet with him several times always as part of a group. But he wasn’t really much of a finance person. At that time, the prime rate was in double-digits and the mortgage market was on the verge of shutting down. Nixon would come into our meetings and say something like, “I want to make sure every American can buy a home.” Then he would get up and leave.
Q: You were at the White House during one of the most chaotic times in presidential history, as the Watergate crisis was unfolding. What was that like?
A:
It was a very unsettling time to be there. I really wasn’t much involved with all that Watergate stuff. But all the higher-ups were preoccupied with the crisis, so that meant I was given far more responsibility than someone else with my age and experience normally would have. I was actually making recommendations directly to the president on positions he should take on economic and financial legislation coming out of Congress. I also became one of the principal messengers between the White House and Wall Street. So Watergate was more of an opportunity for me than anything else.
Q: Do you think you achieved anything?
A:
One piece of legislation that I had significant input in was deregulating brokerage commissions. At that time, brokers charged fixed fees set by the government. I felt that the market should set the fees, not the government. I rounded up support for the proposal in Washington and made many trips to Wall Street to try to build support there. But the brokers all liked their guaranteed fixed commissions. In the end, we got the support we needed and the commissions were deregulated. That really opened up a lot of opportunities for investors and it’s the achievement while at the White House that I’m most proud of.
