Thursday, December 31, 2009

Oh No You Didn't!

Before I get hot and heavy in this post, let me make one thing clear - I have nothing but respect for Wells Fargo Bank. I admire its leadership and I have many friends within its ranks that I consider best in breed.

I was recently paging through an industry magazine that featured an interview with a top ranking officer at Wells Fargo. This article was essentially a profile of a very accomplished Wells Fargo banker. As I read the article I was feeling good about this person and Wells Fargo Bank. Then it happened...

"Leading the COMMUNITY BANK [emphasis added]...blah blah blah."  What?! Community bank?  Wells Fargo?  At that point I let out a loud "are you kidding me!?" (I figured it was loud because everyone outside my office was staring at me and wondering if I was upset with someone on the phone).  "Nothing to see here folks.  Get back to work."

Again, I have no problem with Wells Fargo. In fact, thoughout this whole mess I think they have managed their affairs better than most of the big guys. I love their marketing, their strategy and they seem to train well (two of my top performers are Wells Fargo alumni). I do, however, have a problem with a bank that calls itself a community bank that has total assets of $548 billion, $325 billion in deposits and 3,429 branches in 24 states (as of 9-30-09).

Unfortunately for me there is no clear cut definition of what "community bank" means. And as such, I can't call out Wells on it.  And I'm pretty sure they know that.  In a twisted way, I suppose I appreciate that.

Back in October 1997, Steve Cocheo tried nailing down a definition in his ABA Banking Journal article, "Musing toward a definition of community banking." According to Steve, "community banking" can include mega-banks as well as local home-grown institutions. It all depends on your point of view and interpretation.  As a small bank operator that is deeply vested in its community, I find that fact very disappointing.

In my perfect world community banks are not titles bestowed simply for doing good deeds in a community.  To me and many of my community banker friends (as defined by me of course), community banks are just that, banks that serve a particular community. In my opinion, if your footprint spans the western United States you are not a "community bank." I don't care how you divide the empire. You're not a community bank. Plain and simple.

Over the past year and a half the banking industry has taken it on the chin. Surveys conducted during this period have shown a steady reduction in consumer trust of banks. With billions in bailouts, foreclosures at record levels and the whole regulatory reform mess, it is clear why consumers are not happy. While I will agree that some bankers took a few liberties with consumers, for the most part bankers and their banks were also brought along for the ride. In particular, community banks, who generally stayed away from the practices that created the whole mess.

The media and others are starting to recognize the role that community banks played or did not play. Not only did community banks generally not play a role in creating the banking debacle, they have generally been the only group lending during all the chaos. So when some regional bank comes along and calls itself a "community bank," I'm sorry, but I take offense.  I respect you, but I take offense.

My problem is that community banking cannot be easily defined.  For me, community banking means a bank that is focused on a particular "community."  For example, I have three branches - two in East Los Angeles and one in Santa Ana.  Those two communities are my focus.  Nice and tight.  When I can call the entire state of California my community I think I've gone beyond community banking.  Perhaps a better guide is how much time your bank management spends on Wall Street versus Main Street. 

I will be the first to admit that I don't know the right definition of what makes a community bank.  But something I've learned as a banker is that your gut is usually right.  And on this one my gut tells me that if you run a bank with branches in nearly half of all U.S. states, you're not a community bank.

What do you think?  What does community bank mean?  Let me know.  I'm interested in hearing your opinion.  Maybe I'm all wrong on this.

Tuesday, December 22, 2009

Stop Acting Like A Bank. You're Embarrassing Me!

As I was paging through the November 2009 issue of Bank Technology News I came across the following news blurb:

"A poll of 18 to 29 year olds in the U.S. funded by Microsoft found that about half feel the banking industry is in touch with their generation; and about 60 percent say their level of trust in financial services has decreased over the past year. When asked how banks can improve trust, 27 percent said blogs would be very important, while 42 percent said it would be somewhat important. And 75 percent were in favor of monthly email updates."

As you can imagine, I was pleasantly surprised to know that we were on the right track when we decided to launch this blog.

I have been a banker for most of my adult life. When I wasn't a banker I was a bank examiner or a bank consultant. As such, banking has been at the center of my professional life for nearly 20 years. During this time I have focused almost entirely on community banking.

Based on my experience, what I can tell you is that community bankers are Main Street, not Wall Street. We coach the local AYSO team, we shop at the local Walmart, we eat hot dogs at the local little league games, we hang out at the local pub and we drive our own cars. And most importantly, we do not single-handedly threaten the viability of the American banking system. Unforunately, the everyday bank customer does not know the difference between a community bank and a big bank

When I started this blog a couple months ago I wanted to share a little bit of the Bank in an informal setting. Along the way I hoped to give readers a glimpse into the "personal" side of the Bank. I hope I am doing that. But more importantly, I hope that readers are starting to see that community banks are more like the corner drugstore than the trillion dollar bank. We TRULY stand behind the community. But more importantly, we thrive only if the local community thrives. So we are fully vested and all in.

Through this blog, therefore, I hope to accomplish a couple things. First, I wish to reach out to the millenials who feel we have no clue. We get it. We know you demand more than what your dad's bank gave you. And community banks are here to let you know we get it. Some of us move faster than others, but we get it.

Second, I hope to show you that community banks make a REAL difference in the community. We may not have the budgets that big banks have but you can always count on us to support the community and its various efforts. We are built around the community, through good times and bad. We don't just close the doors and move to the next town when things get tough. We stay and struggle with everyone else to get things back on track.

So, the next time you need a loan or need to open a new deposit account, ask yourself if having a branch on every corner in every state is better than supporting the local bank that is a part of the local fabric.  And if you're a millenial, feel free to send out a tweet about it.

Monday, December 14, 2009

Take Credit Where Credit Is Due

The end of December 2009 (27th) marks my six month anniversary as the CEO of Pan American Bank. In my original draft to this post I used the term "leader" instead of CEO. But I have very specific criteria for what makes a "leader" and as such, I will hold off on calling myself this organization's leader...for now.

As the CEO of a community bank it is not only a "good idea" to get out into the community - it is ESSENTIAL for our survival. I need to be out there for reasons such as business development, needs assessment, etc. But I am learning that the most important reason for me to represent Pan American Bank is because we are so reflective of the Latino communities that that we serve.

It did not take me long to figure out how this 45 year-old organization assumed some of the traits of its Latino customers. We are a small, feisty and proud bank. We are loyal to our customers and our community. We are full of energy and the will to do great things. But unfortunately, we are the last to let others know about our accomplishments.

Back in November 2009, CNN ran a series of video essays called Latino in America. According to CNN, by 2050, the U.S. Latino population is expected to nearly triple. CNN explored how Latinos are reshaping U.S. communities and culture and forcing a nation of immigrants to rediscover what it means to be an American.

The research conducted by CNN highlighted some great achievements by Latinos. But despite the strides made by Latinos, we continue to struggle with tooting our horn. As a result, many great people and efforts go unrecognized. People and efforts that can significantly enrich the fabric of our incredible nation.

Over the weekend I was asked to sit on a panel for a California Assembly Town Hall meeting. The portion of the meeting I sat in on had to do with the housing crisis, foreclosures and loan modifications. I could tell from the onset that this meeting had the potential to sting, as the seats were filled with consumers, consumer advocates and others looking to let me know how horrible a person I am for being a banker.

The session was started by Speaker of the California Assembly Karen Bass. The Speaker then passed the floor to me for an introduction. As I began my introduction I could hear the clicking of bic lighters getting ready to ignite the torches. But within minutes the crowd quieted down and began nodding their head in support. At the end of the meeting, as I exited the stage, I was approached by many people - consumers, advocates, political representatives and others. All seemed amazed at what they had heard. Many almost could not believe their ears. And why would they, we have not tooted our horns to let anyone know.

So what was it that was so amazing? Well, without going into too much detail, here's a quick rundown. You tell me if this is something the world should know about.

1) Pan American Bank was founded in 1964, making it California's OLDEST Latino-owned Bank and the Country's second oldest. In 2010 the Bank will enter its 46th year of operation. We've been around longer than most California banks, period.

2) Pan American Bank was founded by Romana Acosta Banuelos, a woman born in Arizona in 1925, who was "invited" by the U.S. Government to relocate to Mexico in 1933 during the Great Depression, only to return in the 1940's to launch one of California's most successful food companies, Ramona's Mexican Food Products, Inc.

3) Mrs. Banuelos, founder of Pan American Bank and Ramona's Mexican Food Products, was appointed in 1971 to the post of U.S. Treasurer - the first Latina to hold that prestigious position. At the time, Mrs. Banuelos was the Country's highest ranking Latino.

4) Pan American Bank is headquartered in East Los Angeles - an example of the Bank's commitment to its mission of serving the Latino community. No other bank is headquartered in East Los Angeles.

5) Eighty-five (85) percent of Pan American Bank's loans are 1-4 family mortgages. Pan American Bank has foreclosed on only one (1) borrower during the past two years, showing the banking industry that minority lending can be done prudently. Pan American Bank has not originated a single subprime loan.

So there it is. My top five reasons why Pan American Bank is worthy of praise. It is my mission to ensure that Pan American Bank is no longer the Latino community's best kept secret. The secret is out! Let the world know. Hear me toot our horn! Let me hear you toot our horn!

Friday, December 4, 2009

How Well Do You Know East L.A.?

If you have been a reader of this blog you know a few things about Pan American Bank. You know that Pan American Bank is the only bank headquartered in East Los Angeles. You know that Pan American Bank has been in East Los Angeles since 1964. You know that Pan American Bank was founded by Romana Acosta Banuelos, the first Latino Treasurer of the United States. And you know that Pan American Bank's mission is to serve the Latino communities of East Los Angeles and Santa Ana. What you may not know is where East Los Angeles is located and what it is all about. So this post today is about sharing a little something about the East L.A. community.

East Los Angeles or East L.A. or East Los, is an unincorporated area of Los Angeles County, California that spans a total area of 7.4 square miles. East Los Angeles is bounded by the city of Los Angeles to the west, the unincorporated area of City Terrace to the northwest, the city of Monterey Park to the northeast, the city of Montebello to the east, and the city of Commerce to the south. The unincorporated area of East Los Angeles was once known as "Maravilla" and also "Belvedere Gardens".

According to the 2000 census, the area had a total population of 124,283 with 29,844 households, and 25,068 families residing in the community. There were 31,096 housing units and a whopping 96.8% of the population was Latino.

Of the 29,844 households, 51.7% had children under the age of 18 living with them, 53.1% were married couples living together, 21.7% had a female householder with no husband present, and 16.0% were non-families. Only 12.5% of all households were made up of individuals and 6.4% had someone living alone who was 65 years of age or older. The average household size was 4.15 and the average family size was 4.42.

The age distribution of the community was as follows: 34.6% under the age of 18, 12.6% from 18 to 24, 30.7% from 25 to 44, 14.2% from 45 to 64, and 7.9% who were 65 years of age or older. The median age was 26 years. For every 100 females there were 101.6 males. For every 100 females age 18 and over, there were 99.2 males.

According to the 2000 census, the median income for a household in the community was $28,544, and the median income for a family was $29,755. Males had a median income of $21,065 versus $18,475 for females. The per capita income for the community was $9,543. About 24.7% of families and 27.2% of the population were below the poverty line, including 35.0% of those under age 18 and 13.5% of those age 65 or over. East Los Angeles has a very large Latino population that consists of Mexicans, Guatemalans, Salvadorans, and Hondurans.

As East Los Angeles is an unincorporated community, it does not have a local government, and relies on the County of Los Angeles for local services. Despite multiple failed attempts in the past, residents are currently campaigning for cityhood for East Los Angeles.

The East Los Angeles Latino Walk of Fame was inaugurated in April 30, 1997 to honor outstanding leaders who have made historical and social contributions. East L.A. was both the origin and destination of Cheech Marin in both the song and the movie Born in East L.A.

Famous people born in East Los Angeles are many including Constance Marie, Edward Olmos, Lee Baca, Oscar De La Hoya, and Paul Renteria.

Over the course of the next couple months I will discuss initiatives that the Bank has undertaken. Many of the initiatives are driven by the 2000 census as well as current events such as the Cityhood for East Los Angeles.

I hope that this information gives you a better understanding of our community. It should also explain why our mission is so important. I am excited to share these developments with our readers and look forward to the feedback received as we continue on this journey together.

Thursday, December 3, 2009

Toy Drive Organizers Did What?! Are You Kidding Me!

I don't have to tell anyone that this year has been a tough year for everyone. The news on a daily basis goes on and on about unemployment rates, foreclosures, recession, depression, etc. What very few of these reports do is touch on how the current economic disaster has affected the lives of the children of those families.

Beginning in October of this year the Bank began to get approached by community groups asking for donations to cover the toy drives they were running for which they expected a record number of kids. Given our mission of assisting the local Latino community we serve, we signed up for several local toy drives. In one case we hosted an after-hours toy drive fundraiser that saw over 300 people come through with toy and financial donations. With others we made financial donations to ensure that kids in our communities of East Los Angeles and Santa Ana received at least a little cheer during a year that saw their family's finances decimated, their home lost or worse. All in we've supported around six toy drives that run in various segments of our community.

So I wake up this morning and see the following headline in my morning news update: "Some Toy Drives Check Immigration Status." To say I was sickened is an understatement.

Obviously I understand that there are two very distinct camps in this country regarding immigration and immigration status. This post is not about who is right or who is wrong. This post is about being humane.

What I am about to say is a generalization so please treat it as such. Toy drives are originated by people with warmth in their hearts and the desire to do what is humanely right. Toy drives are USUALLY not started by people with agendas. Sometimes, however, people with agendas do start toy drives or the warm people who started a toy drive are replaced over time by people who have been given the responsibility to keep a toy drive going. These people treat the toy drive as a task. They do it not for a particular mission but because they have to. To those people I say, please examine why you are doing what you are doing and consider if what you are doing is consistent with the Christmas (or holiday) Spirit.

As I noted above, there exists a major battle over immigration. But I remind everyone that even battles and wars have rules. Even in the heat of major wars we have rules such as the Geneva Convention which protect those providing aid to those in trouble. Our children, regardless of their origin or their parents origin, are victims of an economic war. To inflict pain and suffering upon them by not letting them participate in a toy drive is an inhumane act and should be a violation of some kind of law of political war.

Again, I'm not telling anyone who is right or wrong in this battle over immigration. What I am telling those who are in charge of toy drives this year is to invoke your own form of Geneva Convention and protect the children that are the victims in a war they played no part in.

So screen you families and make sure they are truly needy. But please, do not base your decision on immigration status. These kids have no choice. They are non-combatant prisoners of war, or more appropriately, innocent bystanders. Please treat them as such and let them feel the love and kindness that your toy drives are intended to deliver.