After Humble Start, Bank Grew Into Key Player
The Bank of San Pedro--the only independent financial institution in this harbor-side town--was founded in 1975 on the site of what once was a takeout chicken restaurant.
From that inauspicious beginning, the bank has grown to become a significant financial institution in the Los Angeles Harbor area and the South Bay. At the end of 1988, it reported $159 million in assets and net earnings of $1.3 million.
The bank has branch offices in Long Beach, Torrance and Avalon. It owns a real estate development subsidiary that, among other things, has an 80% ownership interest in a 5.9-acre retail development in Redondo Beach. But the bank has been community-minded as well. In Wilmington, it stepped in when other banks refused to finance a 19-home, do-it-yourself development being built by people who could not otherwise afford to own homes.
Those who are familiar with the Bank of San Pedro say much of its expansion has occurred since 1981, when two local developers--Steven G. Podesta and Bill A. Moller--acted in concert to acquire a controlling interest in the bank’s stock. Together, Podesta and Moller currently own 32% of the bank.
Podesta declined to be interviewed, and Moller could not be reached. But bank officials point with pride to their accomplishments of the past eight years.
Said chairman of the board Peter Mandia: “We have served this community exceptionally well.”
But some former bank directors say that under Podesta’s and Moller’s direction, the Bank of San Pedro has lost sight of its primary mission as a consumer-oriented community bank.
“They’re into development; they make a lot of big loans,” complained one former director who helped found the bank. This director said he left the bank because he didn’t “see eye to eye” with Podesta and Moller, who he said wanted to make loans that were “too big for a little bank that was designed to be a hometown bank.”
Mandia, however, said the bank has loaned its money prudently and has “performed exceptionally well over the last seven or eight years.”
The bank was founded by a group of five men, several of whom said they were tired of big chain banks taking money from San Pedro depositors and not putting anything back into the community.
They felt San Pedro needed an independent bank, one that would lend to local residents and businesses. “It really did fill a need and it still does,” said Jim Hussey, a founder and the bank’s first chairman of the board.
Another former director said the founders chose the name Bank of San Pedro--even though an earlier bank by the same name went bust after the stock market crash of 1929--because they wanted people to think of it as their hometown bank.
But in 1981, the hometown bank underwent a behind-the-scenes shake-up.
Podesta and Moller, who were doing business together as Podesta-Moller & Associates, began quietly buying up shares of the bank’s stock. They ultimately became directors, and the board split into two factions. Within a year or so, most of the old-timers had sold their stock and resigned.
One former director, Paul Cohen, a San Pedro orthopedic surgeon, said he got out because he “didn’t like the way (Podesta and Moller) took over the board. . . . I just didn’t like their method of operation.”
Asked to elaborate, Cohen said Podesta and Moller secretly purchased the shares of one director while the bank was trying to buy the same director’s shares for its Employee Stock Ownership Plan.
Other former directors complained that Podesta and Moller arranged for the bank to move into a building they had built on 5th Street in downtown San Pedro. The building, at 250 W. 5th St., was erected in conjunction with the Los Angeles Community Redevelopment Agency, which had declared the area a redevelopment zone.
“They were absolutely insisting that we put that bank in that building down there,” said one former director. “The bank was put there against the wishes of those of us in the old group. . . . I was very uncomfortable with it.”
Bank officials say the rental arrangement, for which Podesta and Moller receive $196,000 a year, is more than fair to the bank and that the move was necessary because the bank needed more space. In addition, said bank President Lance Oak, the State Banking Department--which regulates the bank along with the Federal Deposit Insurance Corp.--gave prior approval to the move.
Since Podesta and Moller became directors, the bank has also become closely associated with the Port of Los Angeles. Mandia is executive assistant to the Los Angeles Board of Harbor Commissioners, and the bank has helped finance several business ventures in the harbor, including the former floating restaurant Princess Louise (which Podesta and Moller owned at one time) and two commercial ventures in the Cabrillo Marina complex.
The Cabrillo Marina developments have prompted an inquiry by the state Fair Political Practices Commission. The commission is looking into whether Mandia, who was project manager of the marina when the developments were approved by the harbor commission, faced a conflict of interest.
Mandia, who was advised by a city attorney that he faced no conflict, has denied wrongdoing. In an interview, he also defended the bank, saying that since he became a director in 1981, it has followed “good, sound banking practices.”
He also rebuffed the complaints of former directors, saying: “They left because they sold out to make a profit for themselves, and any criticism from them is, I think, subject to hard scrutiny.”
