One of Three New Banks Opened This Year Sees Success in Pasadena
By Sameea Kamal
Published: Thursday, December 17th, 2009
In the third quarter of 2009, just three banks were approved nationally, and only two banks in the state of California.
One of those banks was the California General Bank in Pasadena, which was approved to open in March.
For two years prior to that, the bank has been in the process of filing applications, getting their charter approval and raising capital to meet their goal of $20 million.
“It was a very long and arduous process that we went through,” said CEO Bill Hawkins. “As it turns out, about the time we were in the process of getting the approvals and raising the money, the financial crisis hit in the United States and all across the United States.
As a result, regulators became much more cautious about granting charters, he said.
Community banks like California General also rely on local investors to put up the money to start the bank, but many were reluctant to lend money.
William A. Hawkins is President and Chief Executive Officer and a director of the California General Bank. He has lived in the San Gabriel Valley for the past 25 years.
“It was a very difficult time to start a bank, but on the other hand, it’s a great time to be in the business,” Hawkins said.
One of the reasons for the bank’s success is that the financial crisis, or “economic tsunami,” as Hawkins called it, is behind them.
“We don’t have any bad loans, we have lots of capitals and we’re very liquid,” he said. “We’re a willing lender, and we’re anxious to lend money to businesses particularly in the San Gabriel Valley.”
As a community bank, California General specializes in lending money and providing cash management services to small businesses and professionals.
They also have retail services such as checking accounts and online bankings for the retail customer, he said.
The bank is located on Foothill Boulevard and San Gabriel in East Pasadena.
“We deliberately decided to locate in east Pasadena because it’s an area that has a lot of small local commercial businesses in addition to retail business, and there are some residential areas over there as well,” Hawkins said. “We think that this whole market of San Gabriel Valley is an under served from a community bank standpoint – we saw it as a terrific market and a great opportunity.”
The board of directors for the bank are all local to the area, and are active members of the community, he said.
“We think we’re in a good position to serve the community because we understand it so well,” Hawkins said. “The other thing is, many of the large banks and financial institutions have other problems with assets and so forth so they’re reluctant to lend. In many instances they’re actually shedding customers instead of taking on new customers.”
Hawkins said that over the course of its nine months, the bank has developed a strong customer base.
“Of course we’d always like to have more business,” he said. “We are being very selective in terms of the types of business – we want to be sure they have the wherewithal to pay us back.”
The client base includes many professionals –doctors, accountants, manufacturing clients, nonprofit organizations and members of the technology industry.
The bank currently has assets of $40 million, the CEO reported.
“We are a willing lender anxious to lend,” Hawkins said. “”We’re out talking to people all the time, and we do a fair amount of advertising to let people know we’re here”
Hawkins said that many investors agreed to get involved for the same reason that the charter was approved: the bank has a strong management team with the experience and knowledge to make good decisions on behalf of the investors and depositors.
“We have a board of nine directors, and almost all, with the exception of two or three, have been either chief executive officers of community banks, have been on the board or have been consultants,” he said.
Hawkins said investors are also interested in where a bank will market its services.
“We just think that the San Gabriel Valley and in particular greater Pasadena is just a market that is underserved,” he said. “We think it’s a terrific enclave of businesses and families that are very diverse.”
The bank’s focus on small businesses can also be beneficial to the local economy, Hawkins said.
“That is a terrific social objective,” he said. “We’re in business to make a profit but if you’re in a region where u can contribute to the growth of the community and create employment, that’s a great thing.”
According to Paul Little, president and chief executive officer of the Pasadena Chamber of Commerce, the bank is a well-capitalized solid group.
“I think they have sort of a unique opportunity there and coming in after the crises of last year means that they sort of avoid the negatives that come with it,” he said. “They have capitalized at a time where the environment is much stronger because the oversight is much more rigorous.”
“From what I can tell, they are a strong financial institution and certainly welcome among the financial service providers in Pasadena,” Little said.
As for other banks opening in the area, Little said it was hard to tell.
There’s so much that they have to do,” he said. “I think we’ll see a resurgence of financial institutions in Pasadena because we are an office center and financial center for the San Gabriel Valley and through the area over there.”
“Whether there will be any news ones, I don’t know.”
Little said he expects there will be some expansions and shifts in the emphasis of banking institutions.
“I think some banks that may have been more traditionally known for one thing sort of shifting their emphasis to something else,” he said.
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