schatz/dy/34″/mike1st/mark2nd By DOUGLAS YOUNG Staff Reporter At age 77, Carl Schatz is one of the San Fernando Valley’s most seasoned bankers. His banking career in the Valley dates back to 1950, when Schatz transferred from a Bank of America branch in the L.A. basin to work at BofA’s Tarzana office. He left BofA in the mid-1950s to work as one of the founding staff at Bank of Encino. After that bank was sold in 1957, Schatz left to help set up Independence Bank, which was also sold. He retired briefly in 1984, before returning to set up a reincarnation of Bank of Encino in 1986, which was subsequently sold and merged into Western Bank in 1995. Not one to call it quits, however, Schatz is now in the process of setting up a third incarnation of the Bank of Encino. The planned new bank has already been chartered by the State of California and is currently raising capital for a grand opening this summer. Question: What are your views on consolidation in the banking industry? Answer: I think it’s for the birds. I’ve never been the CEO of a $2 billion, $20 billion or $100 billion bank, so it’s hard for me to know what their plans are. I went to a meeting several months ago where someone from Wells Fargo spoke, and it seems their real objective is to eliminate as many people as possible and eliminate brick and mortar (branches) and be more computerized than personal. Q: Chatsworth-based Great Western Bank for several months has been the subject of a fierce takeover battle. Will the loss of Great Western as an independent institution represent a loss for the San Fernando Valley? A: Who the hell cares. Nobody cares. We couldn’t care less. Q: Have the attitudes of government officials towards banking consolidation and deregulation changed much in recent years? A: I attended a meeting of the FDIC with 40 or 50 other California bankers about five or six years ago. The chairman was very blunt when he told us, “We would like to see the total number of banks in the U.S. reduced to 150.” At that time we had about 14,000 banks in the U.S. Now I think we’re down to less than 9,000. The current regime is totally different. They’re so receptive to new banks. I think it could be a backlash (to the rapid rate of consolidation). I think they realize the small banks in the nation are the backbone that supports small business. Maybe they realized, “This is the right thing to be doing.” Q: What do you think of the computerization trend in banking? A: I don’t like it because I don’t know how to work a computer. But young people get so indoctrinated into computers these days. I have a daughter who’s 25, and she barely ever goes into a branch. There are certain banks now where you get charged just to talk with a teller. I don’t think there’s any question we’re getting into a checkless society. It’s the times. I’m from the old school, where I like to see people coming into the bank. I used to have to hire off-duty police officers to direct traffic (inside the branch office) in Encino in the 1950s. Q: But surely not having to wait in long lines as a result of computerization can’t be bad? A: I don’t think it’s bad. You just have to be careful. You can’t lose your personality. If everyone works on a computer, you don’t have a personality anymore. Q: How important is it for banks to have personalities in this day and age? A: I don’t know if it’s important to have a personality when you’re in the big stuff. But if you’re a small mom-and-pop shop that’s growing, you’d better darn well have a personality. Q: What will you do at the new Bank of Encino to ensure you have a distinct personality? A: We’ll have to have some kind of a niche. One of the most important niches we’ll have will be our courier service. We’ll have “X” number of customers that will do their deposit business through courier service to make it convenient for them. We’ll also do other things. For example, if a person banks with us and their factory is in Torrance, you can’t give them (payroll) checks from a bank in the San Fernando Valley (because those checks may take several days to clear for employees). So to get around that problem, we may have that customer, for example, establish a payroll account with one of the major banks. Then once a week we could hand carry a cashier’s check over for their payroll. We believe that little extra services if we go out and hustle will allow us to establish ourselves. Q: What was the Valley like when you first came out here? How many bank branches were there? A: There were very few. Even in 1950, when I first came out to work in the Valley, there was only one bank from Reseda Boulevard to Ventura (County), and that was a BofA. The next bank was a Security First National (Security Pacific), and that was at Sepulveda and Ventura (boulevards). There were no banks in between. Then, if you went farther into Sherman Oaks, there was a BofA in Sherman Oaks. There was also another Bank of America in Studio City. Q: What was banking like in California back then? A: It was great. In the banking business, you had to have all the answers for everything. It certainly isn’t like today. You go into a bank today, and chances are you can’t even see the manager. And if you do talk to the manager, he doesn’t know what the hell you’re talking about because 90 percent of managers are just salesmen now. In the olden days, banks put their employees on training programs. As long as I was with BofA, I was on a training program of some sort. They all believed in investing in their employees. Q: How did the first Bank of Encino come about? A: In Encino, there was a gentleman by the name of Dick Powers. He was the president of the chamber of commerce, but he was also a corporate officer at MGM. The chamber wanted a bank in Encino, and at that time Encino was loaded with top-notch actors Clark Gable, Spencer Tracy, Mary Astor, Al Jolson, John Wayne (who wanted to have a bank branch close to where they lived). Q: What do you think of your decision to leave BofA for the community banking industry? A: I think it was a good one, because if I were still at Bank of America, first of all, they probably would have forced me into retirement 20 years ago. Q: Have you ever considered retirement? A: I did retire on Dec. 31, 1984. Q: What happened? A: I was absolutely depressed and bored. I mean, how much golf can a guy play? I was sitting around the house, nothing to do, watching TV. I became absolutely depressed. You know, when you’ve been really active in your profession, no matter what it is, and suddenly you’re out, you’re out of the mainstream. You’re out. You’re nobody. Nobody needs you anymore. That’s the way I felt. I felt like I wasn’t needed. So one day another banker friend and I went to lunch, and he said, “Why don’t you start another bank?” In the meantime, a lot of my customers had been calling me, and they weren’t happy. And so I got together with a group of four or five people and said, “Here’s what we have to do.” And that’s how the Bank of Encino got started again.
