Question: Did your experience at the U.S. Office of Thrift Supervision inform how you approached leading a bank?
Answer: I was at the office during the dark days of the S & L; crisis. I was part of the management consignment program, one of the guys who, literally, seized brain-dead banks on the weekends. I learned a lot of lessons from that experience.
Q: Such as?
A: Not to engage in things I don't understand. Not to get into areas where the potential dangers outstripped the rewards.
Q: Why did you switch from investment banking to commercial banking?
A: I made good money as an investment banker, but I sort of reached a position in life where I concluded I wanted more to make a difference than to make a lot of money. At Cal National, I saw there was an opportunity to do well by doing good.
Q: How were you able to do that at Cal National?
A: Cal National is an opportunistic, entrepreneurial bank that has what I would characterize as a very strong management team and a very supportive holding company. I thought they shared my vision of community banking as a means to make the lives of communities and businesses better.
Q: While the number of loans 90 days past due has increased at Cal National, its finances are relatively strong. How did you avoid many of the pitfalls that got other banks?
A: We didn't participate in the subprime frenzy. We maintained high credit underwriting standards. We did not engage in any form of subprime lending and have zero nonperforming consumer loans. We elected to maintain high levels of liquidity rather than make commercial loans that are supported by relatively low cap rates or debt coverage ratios.
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