His detractors say Gerry Findley is overbearing, stubborn and opinionated. Some say he's stuck in the past. But the banking consultant's fans say he's honest, open, extremely knowledgeable--and stubborn and opinionated.
To Findley, the portly, white-haired dean of California's growing corps of banking consultants, it makes little difference. He sees himself as a fiercely independent adviser and analyst who says what he thinks regardless of whether it makes enemies or friends.
He's been doing it that way for 28 years and, as even his loudest critics admit, has earned a reputation as one of the most influential forces in the state's independent banking industry.
Findley "brings a certain energy to the independent banking industry," said Jay Alexander, a Los Angeles broker whose firm is a major market maker in independent bank stocks. "He can look you in the eye and kick you in the pants if you are not doing what he thinks you should be doing, and bankers need to be kicked in the pants once in awhile."
Through his Brea-based consulting company, Gerry Findley Inc., the 64-year-old former Arkansas farm boy has helped start more than 200 independent banks and savings and loans, most of them in California. He regularly advises scores of bankers how to deal with regulators and structure their executive compensation programs, when to start new branches and whether to sell to acquisition-minded suitors.
"An awful lot of bankers in this state still think Gerry's word is gospel. They won't make a major move without checking to see what Findley has to say about it," said one prominent Los Angeles banking attorney who asked to remain anonymous.
And John Bednerick, executive director of the Western Independent Bankers trade organization, said the Findley companies are "highly regarded. He (Findley) covers the California banking scene in an exemplary manner and probably provides the most thorough and up-to-date source of information about California independent banks that you can lay your hands on."
The privately owned Findley operation began in a Temple City garage in 1956. It has four separate companies, each headed by a member of Findley's family. Although it has only six full-time employees, it grossed about $1.5 million in 1984. "That's plenty of money for us," Findley said.
The other companies in the Findley organization are his son's law firm, a publishing company and a management talent pool. Through the consulting and legal companies, the Findleys prepare bank and S&L; charter applications, advise bankers on setting up executive compensation programs, handle merger and acquisition activities and work with the institutions when they are in trouble with regulators. The publishing company, the Findleys' most visible operation, publishes monthly newsletters on banking issues and a series of annual manuals on California independent banks' financial data.
In recent issues of his monthly newsletter on California banks, Findley has charged various bank officers with "having their hands in the cookie jar," with "banking stupidity," "greed" and even, in the case of the failure earlier this year of West Coast Bank of Encino, of forcing growth too rapidly "for proper digestion . . . result(ing) in runs and upchucks."
Attacks like that have drawn sharp responses from Findley's foes, who usually shy away from public criticism because they respect Findley's power. They point out that several banks Findley once cited as among the best-performing institutions in the state--most notably Heritage Bank in Anaheim, National Bank of Carmel and Western National Bank in Santa Ana--later were declared insolvent and closed by regulators.
Although he admits to mistakes (he keeps framed copies of stock certificates of nearly a dozen failed banks in which he had purchased stock), Findley said he is not embarrassed by such situations, because a bank's financial condition can change rapidly.
And, he said, only three of the banks he has helped organize have ended up on the Federal Deposit Insurance Corp.'s list of problem institutions. "And we've never had a failure with a bank we started."
Findley believes his freedom to criticize and praise at will comes from having a business that is relatively small and family-oriented.
"I structured the company around my family," Findley said. "It allowed me to spend a great deal of time with them, and each summer when the kids were younger we'd travel, for a month to six weeks, camping all over the country."
That's why he turned down a lucrative job offer from Los Angeles financier Mark Taper in 1958. At the time, Taper was chairman and majority shareholder of American Savings & Loan Assn., (which he sold in 1983 to Stockton-based Financial Corp. of America).
In a recent interview, Taper said: "I believed that the coming years were going to be very important for the expansion of S&Ls; and his work was so excellent that I offered him a job. I wanted him to come with us and provide us with his information and knowledge. But he said no. He felt he wanted to be on his own."
Findley said Taper offered him "$60,000 a year, which was a lot of money in 1958," to head up an expansion program for American Savings. "But I told him I wouldn't take the job because I didn't think we'd last together for more than a week. I said that I liked to take off when I wanted to, to spend time with my family, and I just didn't want to have to answer to anyone for anything I was doing."
Findley radiates pride when he talks about his family and how all three of his children are now involved in the business. Findley's wife, Myrtle, 70, is chairman of The Findley Reports, a company that is owned jointly by all five family members.
Findley began grooming his son, Gary, at an early age. He wanted Gary to become a banking attorney, adding the legal dimension to the service the group provides its clients.
Now 30, Gary Findley said he remembers "going with dad to bank directors' meetings when I was seven or eight." He now has his own law firm, with three staff attorneys and about 70 regular clients, mainly banks. His law firm brings in at least half the Findley organization's total revenue.
The Findleys' daughters, Pam Findley-Flor and Mindy, both became teachers. But Pam, 28, quit in 1981 to become president of the Findley organization's 8-year-old publishing arm, The Findley Reports Inc. Mindy, 32, still teaches but works in a part-time capacity as president of FR Management Consulting Inc., the talent pool and management compensation research subsidiary of Findley Reports that was started in 1982.
But even as Gerry Findley has gathered his family around him in the past three decades, he has driven away former clients and made foes of competitors.
Findley frequently rejects work if he doesn't like a bank's business plans and they won't change to suit him. He remains conservative in his approach to banking and shuns the so-called new wave financial institutions that have aggressively pursued the real estate market and other non-traditional avenues of investment.
Of the clients he accepts for consulting work, most are small banks "out in the country," Findley said.
But despite his selectiveness, he has had run-ins with clients. Chief among his detractors is Henry Y. Hwang, chairman and president of Far East National Bank in Los Angeles, the only Findley critic who agreed to speak on the record.
Hwang contends that after Findley helped get Far East started in 1974, Findley allied himself with another of the bank's board members and turned against Hwang. The resulting in-fighting, said Hwang--who emerged victorious--was a major factor in the now-profitable bank's shaky start.
Hwang is so bitter about the episode that he calls Findley "unethical."
"He has a big ego and wants to boss everybody around." Hwang's anger with Findley has persisted: If asked, he tells fellow bankers to stay away from Findley and his organization.
But even Hwang acknowledges that Findley's work preparing Far East's national banking charter application was first-rate and that Findley "is one of the best in the business" at doing charter applications and economic studies.
Findley's version of the story is different. He, in turn, said Hwang and his backers were out of line in actions against a Findley-recruited board member who had been instrumental in obtaining the bank's charter. "They turned on her in an unethical manner. So we took the view that if we couldn't predict the behavior of the people who hired us, we would walk away."
He is pragmatic about Hwang's allegations. He's been asked about them dozens of times in the past 10 years, but has yet to lose a client because of them, he said. "You can't deal with as many people as we have dealt with over the years and not have disagreements," Findley said.
Findley dismissed his critics as either jealous of his success or unable to concede that he has proved them wrong. "I'm not going to lose any sleep worrying about what any client is doing or thinking," he said.
In addition to the one-man consulting company, The Findley Reports Inc. publishing company is the other arm of the Findley organization that has made it so influential in California's independent banking circles.
About 400 banks, banking analysts, investors and attorneys subscribe to the financial annuals. The three Findley newsletters, which deal with banking mergers and acquisitions, compensation matters and banking industry issues, have a combined circulation of about 2,600.
The bank books are a major source of information on how banks stack up against the competition, said Los Angeles banking attorney Ken Ziskin. And Thomas Phelps, partner in the Los Angeles law firm of Manatt Phelps Rothenberg & Tunney, said the Findley financial annuals "are a definite contribution to the literature of the industry. To a lot of people, they are the Bible."
But others challenge whether the information provided is useful. The Findleys interpret figures reported to regulatory agencies by the financial institutions. The numbers can vary significantly from those the banks report to their shareholders. Several critics who asked for anonymity said Findley is using "old-fashioned" or "discredited" ideas that do not accurately reflect a bank's real financial picture.
Gus Bonta, director of the California Bankers Assn., defended the Findley bank book as "one that at least looks at all apples, instead of comparing apples and oranges. Everyone realizes that here, at least, is someone who is trying to analyze banks."
Clarence C. Jones, president and chief executive of Valley National Bank in Glendale, said he has used Findley's annual California bank financial reports and newsletters since they first began coming out in 1968.
"He is powerful," Jones said, "because he is the primary source of information about California banks and what's going on in the California banking world."