Ponderings and Predictions

David P. MalonePresident & CEOCommunity Bank Q: What do you think is the biggest threat to community banks? A: So much of the economy is consumer driven. I think what’s happening on Capital Hill and the deficit increased pessimism on the part of consumers. I also think that’s translating on to what’s happening on Wall Street. Q: Have community banks felt any of the negative press placed on banks because of the decline of the mortgage industry? A: In my case, no. We are a business bank so we are not involved in residential lending. The negative press is not really affecting me. C.G. KumPresidentFirst California Bank Q: Do you see any more community banks entering the San Fernando Valley that do not already have a presence here? A: No. There has not been a new bank startup in many years. That opportunity has come and gone. First Citizens Bank opened recently and we took over Western Commercial Bank. Other than that, I’m not familiar with any banks opening up in the area. Q: Is high employee turnover an issue with community banks? Why or Why not? A: No, I don’t think so. Employment is fairly stable. No one is really moving around because of the economy. People are usually content with existing positions. It’s different from five years ago. Banks are much more conservative. If they have a job, employees typically don’t look to move. The issue of job security is much more important. Adriana M. BoekaPresident & CEOAmericas United Bank Q: What role does a community bank play in supporting small business in the San Fernando Valley? A: The impact of increasing regulatory burdens such as the new Dodd-Frank Act and the creation of a new Consumer Protection Bureau generates a significant cost expense for community banks in order to comply with these new regulations. The additional expense increases the cost of capital and deposits as well as paralyzes the efforts of these banks to grow and serve their communities. The new regulations were developed to deal with the issues of the big banks, but are affecting community banks the most. Some legislators still paint all financial institutions with the same brush. Q: Do you expect community banks to grow their presence in the San Fernando Valley? A: Although the current economy is contributing to a consolidation in this segment of the banking community, given the community banks proven ability to adapt to change and their survival over the past century, we can be confident that community banks will remain a competitive force well into the future. James D. Hicken President & CEOBank of Santa Clarita Q: What role do community banks play in supporting small business in the San Fernando Valley? A: I think the community banks in this country are the backbone of mainstream America. When you think of employment, you think of the larger companies. In reality, the average business employs about six people. Large businesses get all the press. A community bank, because of the local staff, understands the smaller businesses. They work with them and do what they can to help them achieve. It’s much more than numbers. I believe the community banks will play role in helping bring (our) country out of recession. Q: Do you expect community banks to grow their presence in the San Fernando Valley? A: I think that’s true of all community banks. With all the regulations, the community banks will have to grow to prosper. As small businesses rebound from the recession, community banks will be there to support them. Tamara GurneyPresidentMission Valley Bank Q: What role do community banks play in supporting a small business in the San Fernando Valley? A: Statistical literature out there shows that community banks are the ones reaching out more so than some of the larger banks. We’re a better resource for small business lending. We offer more time and energy to support economic growth. Q: Do you expect community banks to grow their presence in the San Fernando Valley? A: I don’t expect to see more because of the difficult climate. Starting an organization is challenging. The economic crisis makes it difficult for community banks to survive. There will likely be some consolidation in community banking circuit. There haven’t been any new ones in several years. Ralph DeLeonInterim CEOSanta Clara Valley Bank Q: Do you see any more banks entering the San Fernando Valley that do not already have a presence here? A: I hope not. I don’t know of any small community banks entering into the community. The regulations done by Congress aimed at big banks are actually affecting smaller ones. Bigger banks have a whole battery of attorneys to help them. We have to get staff to comply with laws which take them away with daily practices. Q: Is high employee turnover an issue with community banks? Why or Why not? A: Absolutely not. We have the most loyal and trusted employees. I’m very proud of them. They stick with us so we stick with them. It really has to do with personal attention with customers. When customers stay with you employees stay with you. Personal relationships are very important to us. The same customers work with the same employees.