Former L.A. Mayor Villaraigosa becomes advisor to community bank
Former Los Angeles Mayor Antonio Villaraigosa is making his first foray into the private sector, taking a post as a strategic advisor at the Banc of California — an aggressively expanding community bank led by specialists in high finance.
Villaraigosa’s part-time position advising the bank’s chief executive, Steven Sugarman, as well as its board, will allow him to continue pursuing speaking engagements, an affiliation with a university or think tank, and a potential run for governor when Gov. Jerry Brown steps aside.
The former mayor declined to reveal his salary or how his compensation would be structured. He said his role is still being defined, and that it would not be “a day-to-day proposition.” But bank officials hope he will help shape their strategy for expanding their home and small business loan portfolios. Villaraigosa said the job fit well with his desire to help state residents achieve “the California dream” and his goal of improving financial literacy in a city and state “where there are so many people who don’t bank.”
Villaraigosa said he was intrigued by the opportunity to figure out how to provide greater access to home loans in communities hit hard by the recession.
“California jobs and home ownership in California are important to me,” he said. “As someone who has lived here his whole life, I thought the goals of the bank are goals that are similar to my own — there was a symmetry of interests.”
With the possibility of a future run for statewide office, Villaraigosa said he would guard against potential conflicts of interest but did not see any as he moved into his new role. Sugarman said he was not aware of any business that the bank has with the city or state.
The former mayor joins an institution that is rapidly expanding its footprint in California, with more than 20 branches. Reflecting the bank’s broader ambitions — and to coincide with the Villaraigosa announcement this week — the company changed its corporate name to Banc of California on Monday from First PacTrust Bancorp, the parent company of Pacific Trust Bank.
Earlier this month, the Irvine-based bank closed a deal that had been in the works for nearly a year to buy the Private Bank of California — which caters to wealthy people on the Westside, as well as businesses — and merge it with Beach Business Bank of Manhattan Beach, which focuses on commercial lending.
The moves were spearheaded by Sugarman, a former management consultant at McKinsey and Co. and investment advisor at Lehman Brothers.
In an interview, Sugarman said he hoped that the bank would be able to take its strong base of deposits and make loans to small businesses in the region. The prominence of the mayor and his community ties should help with both introducing the bank to the public and finding new opportunities, Sugarman said.
“We’ve seen a loss of community banks willing to lend in major areas of Southern California with the failure of a lot of mid-sized banks,” Sugarman said. “We’re trying to fill that void of financing small business and home ownership in those areas that really lack a free flow of credit,” he said.
A Southern California native, Sugarman ascended to the top position at Banc of California last August, when the deals to acquire the Private Bank of California and Beach Business Bank were announced.
Sugarman’s Santa Monica-based investment firm COR Capital LLC was a lead investor when the bank was recapitalized in 2010, and since then the company has grown from an institution with loans and other assets of $861 million to one with more than $3.2 billion.
Over that time, Sugarman said the company increased its number of employees from under 100 to more than 1,000. In 2010, the bank was extending less than 20 home loans a month. That figure is now more than 700. During the first half of 2013, the company saw nearly $150 million in new deposit growth per month, according to bank officials.
While the ex-mayor remains a polarizing figure in Los Angeles, according to a recent USC Price/Los Angeles Times poll, he is viewed favorably among younger voters and Latinos. Sugarman said Villaraigosa’s inroads into the Latino community were a plus but not a driving factor in the alliance.
“You can’t serve Southern California, or California in general, without serving the Latino community, and they are a core part of our market, but that is not the guiding principle with our relationship with Antonio,” Sugarman said. “The real spirit of the relationship is about the real value Antonio can provide in helping us to reach those communities we want to serve, and to invest and lend money to those areas that are most lacking it.”
Times staff writers David Zahniser, Kent Coloma and E. Scott Reckard contributed to this report.
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