A veteran Los Angeles banker, David Rainer has been an executive at several large national banks and has overseen the growth of two independent banks. A Chicago native who was raised in the San Fernando Valley, Rainer left an executive position at Bank of America at age 34 to oversee operations at a small financial institution in Encino, the first California United Bank, with only two branch locations. From 1992 to 1998, Rainer and his team grew the business to 22 branches before selling the bank. Rainer then returned to the corporate banking world as the head of U.S. Bank’s western commercial banking division. But it was a difficult readjustment for Rainer, who had come to enjoy running his own company. In 2005, he and a group of shareholders founded the second California United Bank, known as “CUB” to its customers, after raising a record $35 million of capital for a new bank. For Rainer, the contrast between the corporate world and the entrepreneurial milieu of small independent banks is striking. Corporate banks are “rigid cultures” where policies are often formed in distant headquarter locations, while independent banks are more flexible, a place where customers can “call the person who makes the decisions regarding their banking needs.”
Question: How does your job as president of an independent bank compare with your career as an executive at a large national bank?
Answer: At the larger institutions I was in more of an administrative capacity responsible for running regional operations throughout the country, so the time I spent face to face with customers was very limited. Most of my time was spent dealing with internal matters and running from city to city just making sure that each regional office was running the way it was supposed to be run. In the independent banking world I am right in the middle of the decision-making process. Now I spend at least half my time with customers.
Q: What was it like to be on the road so much?
A: The time on the road for me had become so extensive that I literally woke up one morning in a hotel somewhere, and it took me what seemed like minutes to figure out where I was. I didn’t know if I was in Seattle, Denver, Portland or Las Vegas.
Q: So what qualities are needed to be a successful independent banker?
A: The characteristics of an independent banker are different from a big corporate banker. Independent bankers have to be entrepreneurial and think outside of the box. They really have to be dedicated and committed to supporting the local community they serve. That’s how they compete they develop involvement at a local level.
Q: Give us an example.
A: One example is the way they extend credit to businesses. In a large corporate bank you are dealing with policy, analysis and approvals that may be developed 3,000 miles away from the local market. It may not fit local needs. Supporting key organizations and events in the community is critical (too).
Q: How did you get involved in banking?
A: When I was in grad school at USC, I was experimenting with a lot of different career paths. The school had “brown bag” days where they would invite professionals from different business lines. One day I attended a brown bag discussion on commercial banking with a couple of senior people from Wells Fargo, one of whom was Steve Carpenter. Their profession really caught my interest. I went to work at Wells Fargo right out of graduate school. Steve Carpenter was my first boss, and later became my mentor. He is now chairman of our bank’s board.
Q: What’s the best advice Steve ever gave you?
A: When I first started my career in banking, Steve Carpenter told me to always shoot straight with people. If you look people in the eye and are honest with them, that will help you build credibility, earn respect, differentiating you from other people in the business world. I always try to create a culture where people are able to interface with a certain candor and honesty.
Q: What do you enjoy most about banking?
A: I enjoy the consultative relationship we have with business owners. The banking we do is really for middle market companies. We play a role that can really impact the business in terms of financing, cash management and general business problem-solving. Being an important part of the business owners’ group of consultants is the part I enjoy the most.
Q: What do you most dislike about your job?
A: We are in a highly regulated business and the financial cost and time can be frustrating. We are Sarbanes-Oxley compliant, which is unusual for a new business, and at the same time we are in the banking industry, so we operate under rigid guidelines all the time. That is part of being in the banking business today, and it is costly from a time and financial standpoint.
Q: Over your career, what surprised you most about commercial banking?
A: Even after more than 25 years, not a week goes by where I don’t see unique or different businesses. The variety of things we deal with every day, so many types of businesses in the greater Los Angeles area that’s a reflection of the diverse market we are in.
Q: What about the process of starting California United?
A: We did formal presentations and road shows to invite the business community to participate in the stock offering. Our
marketing plan was to put the stock in the hands of local businesspeople with the expectation and informal pledge that they would direct business into the bank. For the most part that has come to fruition and is the reason why the bank got off to such a quick start. We started out with 700 shareholders when we opened our doors. Most of the new banks in Southern California have nowhere close to that.
Q: Have there been any robberies or violent crimes while you were on job?
A: Not during my career in the banking industry. There was one incident that occurred while I was working as a clerk at a local drugstore while I was a freshman in college.
Q: What happened?
A: One night while I was sweeping the
floors the manager called me into the back room. Just like in the movies, there was a man with a stocking over his face, and all of a sudden there was a pistol up against my temple, pressed pretty hard. The other people who worked there were already face down on the floor. That was more than a little
Q: Did the robber get away?
A: I ended up catching the guy, actually. There were very few cars in the parking lot that night, and while I was getting the shopping carts, I saw a car parked next to mine and noticed the license plate. When the detectives came later, I said, “You know, there was a car out there all evening,” and gave them the license plate number. Sure enough, they caught a couple of guys down in the South Bay. A couple of days later I was noted in the local paper as the “alert stock boy” who helped catch them.
Q: You remembered the license plate number
A: Yeah, I thought they were going to steal the stereo out of my car, or something like that. That car was very important to me. It took me three or four years of working as a busboy and a store clerk to save up for that.
Q: How many hours a week do you work?
A: On average, probably 55 to 60 hours a week. I am usually in by 6 in the morning and out by 6 in the evening. I spend the majority of my time seeing clients and prospects, which I particularly enjoy. I am lucky to have very good people backing me up in the more operational aspects of the bank.
Q: How do you balance your career with your family?
A: Part of the motivation of starting this new bank was to rebalance my life so I could be closer to home and not miss out on any important family activities. Being able to be close to home has allowed me to cut about two to three hours a day commuting from the West Valley to downtown. Now I’m home every night for dinner and I’m very involved with my kids. I like to check in with them every day in person, and I couldn’t do that during my last five years in the world of big corporate banking, when I spent a lot of time in airports and on airplanes.
Q: What do you do for fun?
A: I love being around kids, my own and others. I am heavily involved with youth athletics. Currently I am president of Valencia Express Ice Hockey Club. It’s a blast, kind of like being president of Little League. I also spend a lot of time with the Boys and Girls Club of the West Valley. When I have a little time left over I play golf, but not a lot.
Q: Is your bank active in community service work with children?
A: Yes, earlier this year California United Bank sponsored a golf tournament that raised over $130,000 for the Boys and Girls Club of the West Valley. These organizations provide after-school programs to keep kids off the streets, which is especially important for kids who come from single-parent homes. From the end of the school day until their parents pick them up, they get personal attention and assistance with their homework and there are other activities like sports.
Q: If you were not a banker, what do you see yourself doing?
A: If I was not a banker I think I would be a teacher, or working with kids in some manner. After college I was part of the Big Brother program. I have always been part of doing things that I think are important in terms of helping disadvantaged children in our community.
Q: What do you plan to do when you retire?
A: I’m having too much fun to think about it. I wake up in the morning and I can’t wait to get to work. I am having more fun today than I have ever had in my professional career. I can’t see letting go entirely of business, but I can see carving out a lot more time to do some other things. The only thing I would like to do is travel a lot more worldwide. I really have not had any time to do international traveling, and my wife and I have a lot of places that we would like to see someday.
Title: Chief Executive
Company: California United Bank
Born: 1957; Chicago
Education: M.B.A., University of Southern California
Career Turning Point: Leaving a large national bank to work at independent bank
Most Influential Person: Steve Carpenter, first boss and mentor
Personal: Lives in Encino with wife Anne and sons Ben, 21; Danny, 20; and Jake, 11
Hobbies: Youth athletics, golf