BRIAN CONLEY and Byron Lee make it sound like the most logical decision of their lives was to walk away from two shining, lucrative careers in the banking industry to start their own bank, Pan Pacific Bank.
Lee even laughs a little bit when he talks about how it all came together.
"We used to sit down after hours and just chat about all the possibilities, what it would take to make the whole thing work. It was really no more than that," he said, describing his late-night conversations with Conley when they both worked as high-level executives for two large national banks based in San Francisco. "And then, somewhere along the way you realize, 'This might actually happen.'"
Today, Conley, Pan Pacific's president, and Lee, the chief credit officer, can look back on a whirlwind 18 months of planning, raising startup capital and meandering through a regulatory approval process that is by definition invasive and rigid. Not to mention the actual opening in July of Pan Pacific Bank headquarters at 47065 Warm Springs Blvd. in Fremont. The bank will celebrate its grand opening from 4 to 7 p.m. Thursday.
"Starting a bank was a very natural evolution of my previous experiences," Conley said. "Sometimes things just happen for a reason and the doors simply open in front of you."
It couldn't have been as easy as it sounds, but they certainly did it with style and speed. Along with two other founding partners, Nancy Lee and Karen Miyahara, they were able to raise $15.8 million in roughly two months and open Fremont's only independently owned ethnic bank. Along with Fremont Bank, which opened in 1964, it's one of only two independent banks in the Bay Area's fourth-largest city, whose population is more than one-third Asian American.
Oddly, in a world seemingly dominated by national bank chains, it's independent banks that have proliferated more rapidly, according to the Independent Community Bank Association of America, which tracks more than 8,000 community banks with more than 43,000 branches.
"The experience at a community bank is very different than going to a big bank," Fremont Bank President Brad Anderson said. "When you need something creative or you have a timely investment opportunity, independent banks are right here, and that's what we do best."
Pan Pacific Bank targets a different audience than Fremont Bank, Conley said. For one thing, Pan Pacific looks to the business community as its primary market, while consumer banking plays a much bigger role at Fremont Bank.
Pan Pacific expects to grow its balance sheet to $160 million, mostly through small business loans, within the next few years, Conley said. Its lending limit for any single account tops out at $3 million, but it can partner with other banks on larger transactions.
"If you come in and want a car loan or to start a personal account, we're certainly not going to send you down the road," Conley said. "But it's not our main focus."
There are other subtleties that set Pan Pacific apart, perhaps most notably the new bank's Asian-Pacific flavor, evidenced by a management team with roots in almost all corners of the Pacific Rim and a tasteful feng shui decor.
"When you come in and look around, it really is who we are and reflects the community we're in," said Conley, an Irishman and the only founder not from Asia or a Pacific Island.
Ethnic banks emerged in the 1970s as an option for people being discriminated against because of race. Since then, the reasons for catering to minorities have changed as new laws were enacted to protect consumers of all backgrounds.
As long as the minority sector, especially the Latino population, continues to grow, ethnic banks are going to command a bigger chunk of the industry, said William Cunningham, president of Creative Investment Research, a firm that tracks the assets of small banks.
A CIR report last month showed assets at ethnic banks increased 13.8 percent last year, compared with 11.3 percent growth industrywide. It was the sixth straight year ethnic banks grew faster than their mainstream counterparts.
Still, ethnic banks have far fewer assets than most mainstream banks. At year end, they had $161 billion of property, cash and other tangibles while the assets of all U.S. banks and thrifts topped $10 trillion, the CIR report said. But, for many bank customers, smaller is better, Pan Pacific's Byron Lee said.
"The key is that there's a relationship," he said. "To understand the language, the culture and what they're about makes it easier to address their needs."
