An era came to an end last week when Imperial Bancorp agreed to be acquired by Detroit’s Comerica Inc. in a stock deal valued at $1.23 billion. And in the process, L.A.’s already thin base of financial institutions will be depleted by one.
For George L. Graziadio Jr. it was especially significant, as he founded Imperial with now-deceased partner George M. Eltinge in Inglewood in 1963. As part of the Comerica deal, Graziadio, 81, will relinquish his chief executive title but will become chairman of the combined California operations, which will do business as Comerica Bank.
Last week he talked with the Business Journal about giving up control of his creation.
Question: Why did you decide to sell the bank and how will your customers benefit?
Answer: We feel that this amalgamation of the two banks is particularly attractive because we have such a market opportunity. Comerica has been in California for almost 10 years, and they’ve been a very significant force in this state. They know the state pretty well, and we’re confident they’re people who will continue to support the endeavors that we do. They are in some of the businesses we are in and we are in some of the businesses they are in. We’re bringing together two organizations that will be stronger and in a better position to entertain a broader group of customers than we do at the present time. Those are all good reasons as to why now. We think it’s good timing.
Q: One of the things that has made Imperial Bank unique in L.A. is its aggressive approach in lending to emerging growth companies. Are you confident this will this continue under Comerica?
A: Yes, as a matter of fact, I am. First of all, Comerica is also in the emerging growth business. Now they’re not as large as we are in it, and we’re not quite as large as Silicon Valley Bank. But we go way back. We were the first bank to step in with Yahoo. We believe that this merged company will do even more and better in emerging growth. People say it’s speculative, but we never put money in unless it’s behind a venture capitalist. I think it’s going to be much, much better with our new affiliate.
Q: But a larger bank means a bigger infrastructure and bureaucracy. Do you think the merged bank can be as aggressive in spotting emerging growth opportunities?
A: I do for one reason. I have a sign over my office door that says “Our People Make a Difference.” We’re out there in the field working aggressively with companies. We have (emerging growth) offices now in Boston; New York; Reston, Virginia, where I was just last week; Durham, North Carolina; Dallas; Austin; Kirkland, Washington; Portland and Denver. It’s people who make the difference, and that’s not going to change in this particular instance. Our people are going to be very much involved in these emerging growth activities. And, of course, (Comerica) too understands this business because they’re in it.
Q: What about another strong point your entertainment industry business?
A: Well, Comerica isn’t quite as involved in the entertainment industry as we are. But we do very well in the entertainment business as a bank because we’re very, very careful. When we finance one of these films and we don’t do the blockbusters, we do the smaller films for cable and foreign distribution and video the average loan is somewhere in the neighborhood of $1.5 million to $2.5 million. When we do that, we get a completion bond the same way. So that can that’s got the film in it doesn’t go anywhere until we get paid, good or bad. If it’s a flop, it doesn’t make any difference. And that will continue (to be the way we do business).
Q: It may not be First Interstate, but another L.A. bank bites the dust. How will this reflect on local operations?
A: Well, first of all, I’m going to remain chairman of the California state operation, and my vice-chairman, Norm Creighton, who’s been with me for 25 years, is going to be vice-chairman of that operation. So the continuity is just fine. We don’t see a lot of attrition there. There are obviously some duplications that will occur, and there will probably be some shifting around of some people. But this will probably occur in areas like human resources, for example. Comerica has been so impressed with the operations side of our business that they told us that total operations is going to be under us, right here in L.A.
Q: So the state operations for the newly merged Comerica will be divided?
A: We are talking that way, but it’s entirely possible it might go entirely to L.A. as the center for the entire (California) bank. But we feel the bank hasn’t left California, it hasn’t left Los Angeles. Where I’m sitting right now, at the corner of the 405 freeway and Century Boulevard is a pretty central location for everybody.
Q: You said you plan on being part of the bank for a few years. Could you be more specific about your involvement?
A: My arrangement with Comerica is that I guaranteed them three years, and I intend to be very active. I’ll be right here doing the things we’ve been doing, and leading the effort as much as I can.
Q: What’s it like to sell something you’ve built from the ground up?
A: It is a sensitive point, this is like my baby. My partner, George Eltinge, and I started this bank almost 38 years ago. We were shopping center developers, and we felt that small-business people were not getting the right kind of treatment. That’s why we started it. We started with initial capital of $1.25 million, and today we have just under $600 million in capital. So there’s a lot of emotion.
Q: Are you going to be sad when the Imperial name is no longer around?
A: Yes. Yes. Yes, yes I am. It’s been a very important thing in my life. One of my daughters called me up from Texas and she said, “Oh Dad, but it’s your baby!” And I said, “Yeah, honey, it is my baby, but there’s something called mortality.”
