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Bank of Santa Clarita learns from ‘shaky’ start

Posted: October 18, 2010 10:36 p.m.
Updated: October 19, 2010 4:55 a.m.

Bank of Santa Clarita founding members and executive team, from left, James Hicken, Frank Di Tomaso and Kimberly Altobello worked in an office without air conditioning, while they labored through the painstaking process of becoming a bank.

 

In director Frank Capra’s fictional movie classic, “It’s a Wonderful Life,” community loan officer George Bailey, played by Jimmy Stewart, spends his life dedicated to the community he lived in.

Bailey’s building and loan business build affordable housing for the city’s working class after World War II and make loans to the working poor.

Despite dreams of being a world-class architect, Bailey stays at the business his father founded and devotes his efforts to preventing Mr. Potter, banker and slumlord, from taking over the entire town.

Coming up for air
Enter community bank Bank of Santa Clarita.

Founded in 2004, the executive management team of James  Hicken, Frank Di Tomaso and Kimberly Altobello say what sets their bank apart from most banks is its approach with customers.

The Bank of Santa Clarita executives each said that honesty and integrity are key values guiding their decisions and interactions with customers when doing business.

The trio, all former senior-level banking executives who built careers at major banks, launched Bank of Santa Clarita with a vision and donated office space on the second floor of a manufacturing building.

Initially, the team used computers on shaky tables in an office without air conditioning, while it labored through the painstaking process of becoming a bank. 

As a result, the bank executive officers say they understand the entrepreneur’s challenges when starting a business, because they’ve been in the same position.

Bank thrives
The Bank of Santa Clarita is a full-service community bank, which specializes in working with small- to mid-sized businesses, professionals, entrepreneurs and consumers. The bank provides the same services as the large banks. 

According to the Bank of Santa Clarita’s 2009 annual report, the bank experienced a 21-percent growth in deposits and improved earnings and did not need any Troubled Assets Relief Program aid.

The bank’s second-quarter 2010 financial report reflects continued gain in net earnings, and growth in deposits, over 2009.
Compare the Bank of Santa Clarita’s achievement with the general banking industry’s dismal track record since the stock market crashed in September 2008.

According to the FDIC, 281 banks have failed since the crash. To put these figures in perspective, previously, between Oct. 13, 2000, and December 2007, only 27 banks had failed.

The community bank’s business philosophy has been to grow its business carefully, by relying on solid, conservative investments.

The bank did not get into the residential mortgage business, staying away from the subprime lending mortgage crisis that led to the weakening or collapse of many of the nation’s banks.

Because most people shop for the best deal when buying or refinancing a home, home loans become a commodity driven by price and rates, which doesn’t always allow community banks to compete with mortgage lenders who have huge volumes. 

The Bank of Santa Clarita is also an approved lender for the Export-Import Bank of the United States. Ex-Im is an independent federal government agency that helps maintain U.S. jobs by financing the sales of U.S. exports, providing loan guarantees, credit insurance and direct loans.

Relationships are key
“People don’t bank with institutions,” said Hicken, president and CEO. “They bank with people.”

The Bank of Santa Clarita prides itself on relationships with the people it serves.

Community banks typically employ a lower-profile approach with customers, relying instead on building lasting customer relationships, knowing their customers and understanding what they need.

There is definitely a role and a need for large bank in today’s global economy.

However, chances are that if you do business with a large bank, even if your local banker personally knows you, his or her hands are tied by corporate edicts and standard operating guidelines that often prevent the banker from making loans.

Hicken refers to the loans his bank makes as “character loans” because they are based on the relationship the bank has established with the customer.

Di Tomaso, chairman of the board, said that at a big bank, when somebody comes in the door for a loan, the attitude is to figure out why a loan can’t be done, rather than how a loan can be made.

Large banks look for the easy deals with few complications; the low hanging fruit he said.

In many cases, the Bank of Santa Clarita makes loans that some bigger banks won’t touch, because it know the customer and, as entrepreneurs themselves, understand the vision of the local business owner.

Making loans to community businesses is of value to companies that have seen their credit limits lowered, or closed, and loans turned down by larger banks attempting to avoid taking risks during the recession.

Financial experts say that by having a more personal relationship with customers, community banks are in a better position to work with their clients in difficult times. The local banks can minimize loan defaults by working with their clients, whom they have a personal relationship with.

The bank’s executives are available to their clients and work to find solutions that meet the customer’s financing needs.

The bank will sometimes refer small-business owners to resources, such as the Small Business Development Center, which can help business owners organize their paperwork in order to qualify for a loan.

The Bank of Santa Clarita has preferred lender status with the Small Business Administration’s lending programs, allowing the bank to independently approve administration loan applications without sending them to the administration itself for review.

In other instances, the bank will even refer a client to another institution if it’s a better fit for the customer.

“The Bank of Santa Clarita’s expertise is in finding out how to make a loan happen,” Di Tomaso said.

Entrepreneurial empathy
Because the founders launched the bank as entrepreneurs, the officers feel they can relate to struggling business owners.

“Entrepreneurs are dreamers with a vision,” said Altobello, executive vice president. “And as entrepreneurs ourselves, we can appreciate all the heartaches and anxiety of trying to attract capital.” 

Hicken said his team went through the same challenges setting up the bank. Just opening the doors to the bank cost them 1 million dollars in the first year, he said.

Di Tomaso says the Bank of Santa Clarita practices traditional lending. He said unlike some larger banks that became attracted to the huge fees on loans, his bank can often make loans faster or take less of a fee because they make sturdier loans, operating with a more traditional banking philosophy.

All but two of the employees live in the Santa Clarita Valley, and the bank staff serves as volunteers at many of the community events.

Hicken said the bank’s customers are also its neighbors and as a result the bank and its staff is very invested in the community.

The Bank of Santa Clarita is located at 27441 Tourney Road  in Santa Clarita and has two additional branches at 21021 Soledad Canyon Road in Canyon Country and 19045 Golden Valley Road in Santa Clarita. Services offered by the bank are outlines at: http://www.bankofsantaclarita.com.

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