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With the number of financial institutions decreasing and the
population increasing since the mid-1980s, Alliance Bancshares California has
benefited from their focus on being an independent business bank
Regional Pacific Banks
Alliance Bancshares California
100 Corporate Pointe
Culver City, CA 90230
Curtis S. Reis
Chairman and CEO
Chief Financial Officer
Interview conducted by:
Lynn Fosse, Senior Editor
Published - March 29, 2007
Curtis S. Reis
Chairman and CEO
Alliance Bank, Culver City, California hired Curtis S. Reis to become President,
Chief Executive Officer, Chairman of the Board and a Director on August 1, 1986. On
November 1, 2005, he relinquished the title of President, remaining Chairman and Chief
Executive Officer. Mr. Reis has over 45 years of extensive commercial banking experience.
From 1956 1980, he worked for Bankers Trust Company in New York, and was a Vice
President there. His responsibilities included head of the Southwestern Division of
the Corporate Banking Department, he ran its Credit Department, its Commercial Banking
Training Program, its Consulting Division and served as Vice President and Chief of Staff
of Bankers Trust New York Corp. This covered the five affiliate banks with a total of over
100 offices throughout upstate New York. He served as a Director of two of the
banks. During 1957 1959, Mr. Reis served in the US Army at Fort Dix, N.J.
Mr. Reis joined Crocker National Bank in 1980 and was a Senior Vice President. His
responsibilities included managing the Main Office in Los Angeles, District and Region
In 1983, Mr. Reis was elected a Trustee of Cornell
University, Ithaca, New York, his alma mater and is now a lifetime Trustee Emeritus. He
was a member of the Audit and the Development Committees. He has served as Chairman of the
Domestic Lending Council of Robert Morris Associates, a national association of bank
lending and credit officers. He has been President and Director of the Jack Kramer Club in
Rolling Hills Estates. He serves on the Cornell University Council; Cornells College
of Arts and Sciences Council, the Board of the Cornell Alumni Association of Southern
California and was President of his Cornell class from 1959 1981. Mr. Reis was a
Director of the California Bankers Association for many years and served as Chairman from
2002 to 2003. He was chair of CBAs State Government Relations Committee. He has
chaired the Culver City Chamber of Commerce and served as a Director for nine years.
He has done extensive fund raising for the United Way as well as Cornell. He was
formerly the Chairman of the Fair Housing Council in Northern New Jersey. He was President
of the Upper Ridgewood (N.J.) Tennis Club and a Director for several years.
Mr. Reis is a graduate of the Stonier Graduate School
of Banking at Rutgers University in New Jersey and has done extensive post-graduate work
at New York University. He and his wife Pamela reside in Rolling Hills and he has three
grown children and six grandchildren. Pamela previously worked for First Interstate Bank
as an Executive Vice President.
Chief Financial Officer
Daniel L. Erickson joined Alliance Bank as executive vice president and chief
financial officer in 2002. Ericksons responsibilities include management of all
accounting, treasury, SEC reporting, asset/liability management, bank operations,
taxation, data processing, human resources, facilities and purchasing activities. He also
is a member of the banks management committee, ALCO committee and strategic planning
Prior to working at Alliance Bank, Mr. Erickson spent
four years with Pacific Mercantile Bank as executive vice president and chief financial
officer. He was also previously employed at Republic Bank and Marathon National Bank with
similar titles and responsibilities. Dan has over thirty-five years of banking and
accounting experience. During this time, he has managed financial, operational, audit and
technical aspects of banking entities in California and Colorado.
Mr. Erickson graduated from the Stonier Graduate
School of Banking at Rutgers University in 1985 and received his bachelor of science in
accounting from University of South Dakota in 1967. He is a certified public accountant in
both California and Colorado. Dan is on the stewardship committee of his local church and
a founding board member of the Tustin Public School Foundation. Mr. Erickson resides in Orange
County and is married with six children and three grandchildren. He enjoys running and
Alliance Bank is one of the leading independent business banks headquartered in Southern
California, offering a wide range of financial solutions tailored to businesses,
developers, executives and professionals. Serving small to mid-sized businesses, Alliance
Bank's strategy focuses on delivering progressive products and services including deposit
and cash management services as well as commercial, small business, asset-based,
construction and real estate financing. Founded in 1980, Alliance Bank is the principal
subsidiary of Alliance Bancshares California, with regional banking offices in Culver City,
Irvine, Woodland Hills, Burbank and in 2007 in West Los Angeles.
CEOCFO: Mr. Reis, what was your vision
when you became CEO, and where are you today?
Mr. Reis: My vision twenty years ago
was a lot different than it is today. It was a bank in great difficulty and in free fall
and one, that I was not sure was going to survive frankly. It was not until about ten to
twelve years ago that we could see that the world had changed and our opportunities had
changed. Then a real vision emerged to our becoming a true business bank with a wide range
of products and services pitched and geared to businesses.
What do you offer businesses?
Mr. Reis: We start with a philosophy
that says you run your business the way you want and we will put you in the right product
or service depending on how you want to run your business. In other words, if you are a
company with very little net-worth but good receivables, we would probably put you in our
asset-based lending group, which is run by a fellow that used to be with GE Capital. If
you are somebody that wants to buy a building to house your business, we will put you on
our SBA (Small Business Administration) department. If you are somebody who wants to
retain their earnings, have reviewed or audited financial statements, we will put you in
one of our regional offices where you get traditional lines of credit or term loans. That
is kind of our philosophy; to move people up and down the food chain depending on how they
want to manage their business and build their company or if they want to take most of the
earnings out of the company, but still be qualified to borrow from a bank.
What do you deliver that is a bit different?
Mr. Reis: We try to respond to or
emphasize areas that going to take off. One such area that is in the early stages right
now is remote image processing and we think that it is going to change the face of banking
over a period of years for business clients. Essentially, it is a device that is put on
the desk of the CFO or bookkeeper, where they can take the checks that have been sent to
them by their customers, run them through a machine, and then an image comes to the bank
so they can get immediate credit for their deposits. They do not have to go into the bank,
but can be served from almost any place. The caveat is that you need to know who your
customers are, if you can trust them, and if you are dealing with people with integrity,
because there are opportunities for fraud and misuse. However, that is true with any
banking relationship. In addition, we think that remote image processing will require less
money for brick and mortar for business banks. Banks that serve retail customers will
probably want to continue to have branch systems because there are enough customers that
still like to go into branches and use ATMs, but that is not where we are putting our
Will you give us a sense of the customer base that you serve?
Mr. Reis: There is no typical customer
and we like the diversity. We serve everything from real estate developers to
manufacturers to service providers to distributors to professionals, doctors, lawyers,
CPAs, etc. However, they have to have a business flavor to them in general. We do not look
for much in the way of walk-in traffic, because that is not our cup of tea; we want to
focus on small to mid-sized business and professional firms. Companies with sales under a
hundred million would be our sweet spot. We do not have a low-end number, but as we get
bigger, we are looking for relationships in the 7 to 8 figures, typically.
How do you reach new customers?
Mr. Reis: We have about 35
relationship managers whose primary job is to go out and call on businesses. We rely
greatly on word-of-mouth and we do not do a lot of advertising. We think of ourselves as
more like a good law firm or CPA firm for example, where the customers are very happy with
us and they refer us to their friends, clients and associates. The key to that is to have
relationship managers that are not only well-trained, but sort of acting as the unpaid CFO
for the small and mid-sized companies, so they can provide more banking services. They are
an advisor and a person to try ideas on. We want our people out there in front of the
customers, to really be the primary decision-makers, to structure, price and write up
loans. By the time they bring a loan request in for final approval, the banks loan
committee should say yes well over 90% of the time. We expect the loan officer to turn
down the deals that should be turned down right from the get-go and not to have the senior
people in the bank discuss deals very long or make changes. The customers like to deal
with the decision-makers and that is a real plus. The goal is to build some trust between
them so that if there is a problem, they will come to their relationship manager early on.
Our understanding typically is that we will not cut and run, but will try to work them
through their problem or whatever the issue may be.
Will you tell us about your SBA focus?
Mr. Reis: We are a preferred lender,
which means we can approve SBA loans any place in the United States. Obviously, our
emphasis is primarily in California, but we are doing more business in the adjacent states
and the occasional deal in the other parts of the country. Many of our referrals come in
through brokers or our regional offices, referred by our account officers who have a
client that wants to buy a building or piece of property to house their business. We have
business development officers that are also out there. It is a good, steady product.
Business has been a little slower recently for three reasons; one is that real estate
prices have ramped up so much in California that it is more difficult for smaller
businesses to justify paying top-dollar for facilities. They may be better off continuing
to rent until prices come down a little, or because they do not have enough of a down
payment on the deal. A second issue is that the real estate market has had a pretty good
run and I think a lot of businesses are taking a step back. A third point is that we are
not too interested in marginal deals. There may be others out there doing a start-up
restaurant without real estate, but that looks like a risky deal to us. Therefore, we
would probably pass on something like that.
Will you tell us about the private banking area?
Mr. Reis: We do not really have a
private banking area per se. We hope that our relationship managers in effect provide that
service to whomever they are dealing with including the CEOs and CFOs. That would be in
terms of providing full banking services to them, lines of credit, good rates on
money-market accounts, CDs and so on. It all ties into the relationship with the business.
We do not really go after a lot of small retail accounts except to the extent that they
may work for one of our customers. Excellent service is a crucial part of the
What is the economy like in your area?
Mr. Reis: The economy is fairly strong
here in California. The challenge in my opinion is bringing in deposits to fund the loan
demand. Our loan demand is still very strong as California continues to grow and not just
construction lending, but also a large quantity of small, newer companies. California is
not much of a Fortune 500 location anymore the way it was maybe 20 years ago with
aerospace, defense and some other companies that were headquartered here. Entertainment is
still obviously here. Therefore, the real strength of this economy is its entrepreneurial
nature. Something like 25% of the newer businesses are being formed by immigrants from
Asia, Latin America and other countries. You do not have to be a blueblood to get into
business; all you need is a good idea, a little capital and a willingness to work hard at
it. The labor force is here and our attitude toward businesses is that if you can do it
well, we would like to do business with you. However, with people putting their money to
work in different ways, it has been harder to grow the core deposit side as much as the
Do you work a lot with the immigrant population?
Mr. Reis: We like the immigrant
population. I would say that maybe 25% of our business is what I would call first or
second generation immigrants. I think that number is growing. Our own workforce here looks
in many ways like the United Nations and we are very proud of that fact. We probably have
20 different countries represented in our workforce from Latin America, Asia and Europe.
Therefore, our workforce mirrors our customer base. Los Angeles is a wonderful place to
live and work with a very enlightened attitude on that subject.
Will you tell us about the financial picture; you have certainly had a good year?
Mr. Erickson: We have been on pretty
steady growth pattern for the last five or six years. Our assets have increased almost 30%
in 2006, but before that 40% or more. It has been a function of opening up some successful
offices; one in Burbank and one is Woodland Hills over two years ago. Our 5th
office will be on the Westside close to the Santa Monica City border. We have a wonderful
culture, which helps us attract people from other financial institutions. We plan to stay
independent. Many of our new employees have been with institutions that have gone through
acquisition situations where they have had to acclimate their customers to the different
philosophies of the new owners. We have been able to attract some very good people over
the last 3 or 4 years and that has been instrumental in helping us grow.
What do you see 5 years down the line?
Mr. Reis: We expect the Bank to
continue to grow nicely as long as the economy remains reasonably healthy. We dont
believe we can match the percentage growth we experienced in the previous five years
because we are so much larger now than we were in 2001. I joined the bank in 1986 and
during that 20-year period, a couple things have changed. The number of financial
institutions headquartered in California was over 600 in the mid 1980s. Today it is
about 300, but there are 10 million more people and hundreds of thousands more businesses.
Everything has come our way in terms of our approach and philosophy. We have been very
fortunate with the strategy we have picked in this marketplace. I look for the growth in California
to continue to be tremendous, but too much of the growth is concentrated in too small an
area in my opinion. We would rather see new cities emerge, with the wealth spread out,
because we are putting tremendous pressure on transportation and housing costs. As a
result, part of our strategy is to have locations that are closer to home for some of our
people so they do not have to drive and spend four hours a day in a car. With the computer
era, more and more people can operate from home or a remote location. However, I do not
see that as a wave of the future entirely, because there are certain jobs where you have
to be present, such as a teller. If you are a relationship manager, you are judged based
on the business that you bring in and the service you provide and if you are just sitting
in the office all day long, you are probably not doing your job right. You can be out
there on calls and if you schedule your calls intelligently, you can concentrate on a
certain area and be more efficient that way.
Why should potential investors be interested?
Mr. Reis: The story and the numbers
speak for themselves. The bank was formed in 1980. If you had invested in this bank in
1987 when we were in our second round of raising capital, you would have paid $1.00 a
share for the stock. Today it is selling at about $17.00 a share. Obviously, it was not a
straight line up, but it is roughly a 15% per year-compounded return. I am not predicting
that we can continue to do 15% compounded returns, but I do think we can have an
above-average performance over that period. We are not looking for people that are making
quick investments to flip the stock over a short period of time. Most of our investors
have been with us for many years and have been rewarded for being here. A lot of people
say, Gee I missed the move, and I say, Well that depends on your point
of view. You could have even bought our stock at under $3.00 a share five years ago.
You may have missed from $1.00 to $3.00, but you would not have missed the move from $3.00
to $17.00. I think the same thing holds true today. I have no idea what the stock is going
to be five years from now, but I am quite bullish and optimistic. For investors that want
a good solid company, this is the place to go.
I would also add parenthetically that some of the people that invest in banks like
ours are people that love to invest in community banks in growth markets such as Florida, Texas,
Arizona and California. This has been a tremendous strategy for people that have stayed
the course, because over a period of time a few of them get sold, and most of the banks
have performed quite well, perhaps better than the market as a whole. We think that
strategy still holds true as a philosophy. We would like to be one of the banks they
In closing, what should people take away from this interview?
Mr. Reis: There are a couple of
things. One is that we are still an old-fashioned bank in many ways. We get offers to be
purchased and there are people that come and take a look at us all the time. However, one
of the things I am traditional about is that I really believe in the service that we
provide. The reality is that most of our clients and most of the businesses below $50
million in sales have almost no access to capital except from banks. I feel strongly that
we have a mission to serve those people and provide them with the capital, so they can
thrive. If our customers do well, we do well. I look at us as more than just a place where
you can invest money and make a quick profit. I think we provide a very valuable service
in this part of the world. I think people have to believe that what we are doing is
important, that they support that philosophy and that they are investing in that
philosophy too. If they are looking for a quick turn, I do not recommend Alliance Bank as
a place to put your money.
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