Jesse Torres heads the only bank headquartered in East Los Angeles. After graduating from UCLA in 1992, Torres became a bank examiner for the comptroller of the currency in the U.S. Department of Treasury, based in its Glendale office. Later he worked for Western Federal Savings & Loan, California Federal Bank, KPMG, Fidelity Federal, Cal National Bank and Security Savings in Las Vegas. Since May, he has served as chief executive of Pan American, a bank founded in 1964 by Ramona Acosta Bañuelos who later served as treasurer of the United States under President Nixon. She started the bank to help Latinos establish credit after she ran into difficulty securing loans for her business, Ramona’s Mexican Food Products in Gardena. Pan American is the oldest Latino-owned bank in California. It has three branches in heavily Latino neighborhoods of East Los Angeles and Santa Ana. Financially, the bank has $36 million in deposits and $40 million in assets. Torres met with the Business Journal at Pan American’ East L.A. headquarters, a vintage 1970s brick building.

Question: How did you land at Pan American Bank?

Answer: I was working at a bank in Las Vegas that had been severely hit by the real estate crisis, when a recruiter called. He told me about the bank. He didn’t tell me the name, but having grown up around here, I knew exactly which bank he was talking about. I thought: What a great opportunity!

So you have roots in the neighborhood?

I was born at White Memorial Hospital up the street. I grew up in East Los Angeles. My parents still live here. This bank was my first introduction to banking.

What motivated you to take this job?

Like so many who go to college, I felt the need to come back and help the community. A lot of us struggle with how to do that. After college, I joined the Treasury Department and worked everywhere but here – Colorado, D.C., Northern California, downtown Los Angeles. In this job, my goal has been to bring the bank back to its roots and revive awareness in the community. This job, while challenging, has been the most fun I’ve had in 20 years as a banker.

What are the challenges?

The bank has maintained too small a size. Even 15 years ago, you could afford to run a three-branch bank with $40 million in assets. In the current environment, it’s no longer feasible.

Why?

More Federal Deposit Insurance Corp. fees, increased regulatory demands and increased competition for customers have driven up the costs of banking.

What is your goal?

To grow the bank from $40 million in assets now to $100 million in three to five years, but do it prudently.

Since the financial crisis, a lot of people have criticized the Community Reinvestment Act, saying that minorities caused the meltdown because banks lowered lending standards. What’s your reaction?

This bank is a perfect example how full of it those statements are. One hundred percent of the loans we have made here are CRA loans. In 2009, we had zero foreclosures; in 2008, we had one. So if someone is trying to tell me that CRA is the reason behind the sub-prime issue, they need to look at our model. We did not originate a single subprime loan. What caused the subprime crisis was not CRA; it was greed, plain and simple.

What do you like about this community?

My parents came from Mexico with nothing. They are citizens now, but when they got here they didn’t speak or write English. My dad was a janitor; my mom worked in a sweatshop. Yet they managed to keep food on the table and put three kids through college. That’s powerful – everyday people doing everyday things, but not realizing what they’re doing is extraordinary. This community has thousands of those stories. That’s what is so powerful. It’s one of the reasons I came back.

How has your heritage affected your banking career?

In 2005, I had written research on marketing banks to Latinos. That’s what I wanted to focus on because of my upbringing. This job gives me the chance to put into practice what I been preaching for years in speeches to banking associations.

What practices are you referring to?

We are 100 percent bilingual. Also, our location. We are the only bank headquartered in East Los Angeles. Not downtown, not the Westside – we are located where our customers are. Serving the Latino niche, particularly those lower on the acculturation scale, requires more hand-holding. We are here to hand-hold customers through their financial experiences, from opening their first bank account to obtaining a business loan. We don’t put them through an 800 number; we don’t send them to a Web page. We actually sit here face to face and walk them through the process.

Isn’t that expensive?

Yes, but we bake that into our business model. We will never compete on price with the big banks. Very few organizations exist today where you can walk in and talk to the CEO. We are one of those organizations.

Is it true Latinos don’t put their money in banks?

Forty percent of Latino households in Los Angeles and Orange counties are either underbanked or unbanked. They either have no relationship with a bank or they have one but never use it.

Why not?

They think banks are too expensive – yet they will pay twice the amount of a monthly maintenance fee to cash a check. They use alternatives – check cashers, payday loans. Also, they think they can’t trust banks, either from experience in their home country or it’s a belief that’s been passed down in the family. It’s a tremendous challenge, but one we will overcome because we’re a community bank.

What is your strategy?

Education. We have a pilot program: For every child in school, the bank will fund a savings account. Once we are communicating with them, we will implement a financial literacy program for them and their parents. The idea is to show why being part of the financial mainstream is critical.

How does the community angle fit into your strategy?

If our community does not thrive, we will have to shut our doors. We have to do anything we can to ensure the community thrives – political involvement, business issues or using technology to attract the next generation of Latino customers. We can’t sit here and expect the fact that we’ve been around 45 years will carry us through the next year.

What is your stance on city status for East Los Angeles?

This is the fourth time in the last 40 years that residents in the unincorporated East Los Angeles have attempted to incorporate. Currently, an initiative is being sponsored by the East Los Angeles Residents Association. The issue is: Can the unincorporated area of East L.A. generate the revenue to run its own affairs? If it’s feasible, great, because self-governance is great for the community. But if it’s not feasible, people can shift resources to improving the community within the existing political framework. My support is to get it resolved, once and for all. The sooner the association conducts a fiscal analysis, the sooner we’ll know.

What was the turning point in your career?

Fidelity Federal hired me as a risk manager. They had launched a subprime credit card program and had lost control. Other companies were selling their cards on late-night TV and by mail, and the Department of Justice was about to shut down the bank for a number of regulatory violations.

How did you turn it around?

They asked me to lead a litigation support team. They asked me because everyone else was quitting – they saw this assignment as professional suicide. But I saw an opportunity to learn. During the next 18 months, my confidence as a banker and manager blossomed. We worked 16-hour days for six months straight. It was a stressful time.

What was the result?

The Department of Justice wanted $18 million as a settlement. At the end, we settled for $1.5 million largely due to the analyses conducted by my team. That showed that I could have a real impact on an organization.

How did it change your career?

It defined me as a professional. I no longer wanted the easy jobs. I want the jobs that are stressful, demanding, but that have potential for personal and professional satisfaction. Since then, I have made myself a turnaround manager.

What was the most difficult decision of your career?

There were two: first, leaving the Treasury Department. There’s a lot to be said for government jobs. I worked 40-hour weeks with every other Friday off. I could have milked it for 35 years. Making the decision to leave that and work 60-hour workweeks and embrace uncertainty was hard.

The other decision?

Leaving KPMG. I love variety. Working for a global company like KPMG gave me wide latitude. But I wanted to run my own shop. That’s a thread that runs through me.

What do you like best about your job?

One reason I love community banking is that you wear so many hats. You have to be the outreach guy, you have to be the loan analyst. I think I have the best job in the world. I never get bored – and I just love banking.

What was your first job?

Newspaper boy. I delivered the East L.A. Tribune, a weekly, when I was 14.

What do you do when you’re not at work?

I am a die-hard soccer fan. Not just a fan – I’m a soccer player. My dad actually played professionally before he came to the U.S., so he made sure I have been playing since I was a kid.

Where do you play now?

In some of the more competitive leagues and tournaments around Los Angeles. When it comes to relief, I find nothing is better than 90 minutes of soccer.

Other sports?

I have an exercise bike at home. I try to work out with it three or four times a week. Actually. I put my laptop across the handlebars and return e-mails or do my social marketing stuff. Also, one evening a week I play at an indoor soccer league.

When do you work out?

I get up about 5 o’clock and ride the bike for an hour. Then I get my 5-year-old daughter ready for school. I leave home at 7:30, get to the office about 8:30.

What is the rest of your day like?

Typically I have four hours of meetings – business development, committees, local organizations. I wrap up work about 6:30, get home at 7:15. After dinner I help my wife bathe my daughters and put them to bed. Then I work on the computer, maybe watch a forensic crime TV show, and by 11:30 to 12:30 call it a night.

You’re one of East L.A.’s biggest boosters, but you live in Redondo Beach. Why?

When I worked for the Treasury Department, I traveled extensively so I choose to live near the airport. It made life simple. I moved to Hermosa Beach in 1992 and then to Redondo in 1998. Even when I worked in Las Vegas last year, I would fly home every weekend. It was so convenient. My life, fortunately or unfortunately, has involved a lot of airplane flights.