Podesta Steps Down at Bank of San Pedro

Prominent San Pedro businessman Steven G. Podesta has retired from the Bank of San Pedro board of directors, two months after public disclosures that regulators had criticized the bank for issuing him more than $1 million in loans that they described as substandard.

In interviews Friday, bank President Lance Oak and board Chairman Pete Mandia said Podesta’s decision to step down had nothing to do with the regulatory criticism, which prompted the longtime director to repay some of the loans that had been questioned.

They said that, at age 75, Podesta, who is also a major shareholder in the bank, simply wanted a break.

“There’s nothing insidious about his retirement at this point in time,” Mandia said. “He’s a man who’s 75 years old. He wants to retire.”

Oak said: “The only reason that we have is that he wanted to spend more time with his family and his other business interests. . . . He just decided that after the first of the year he was going to take it easy.”

Podesta, whose retirement became effective Dec. 26, could not be reached for comment, and Oak declined to specify what business interests he intends to pursue.

Over the years Podesta has been involved in a variety of ventures, among them real estate development, a computer business, a helicopter service and a company that sells fuel additives.

For a time, Podesta and another bank director, Bill Moller, were co-owners of the Princess Louise, a cruise ship-turned-floating restaurant that was berthed in Los Angeles Harbor.

They later sold the ship, but the new owner went bankrupt and the vessel was repossessed by the Bank of San Pedro, which had financed its purchase. The ship capsized in October at a local shipyard, where it remains half-submerged as bank officials figure out what to do with it.

Podesta and Moller also undertook other joint ventures. The two owned Podesta-Moller Associates, a real estate development company. And, in 1981, they acted in concert to acquire a controlling interest in the Bank of San Pedro.

Podesta has served on the board since that time, and has been chairman of its loan committee since 1982. He owns 14.4% of the bank’s stock; together, he and Moller own 32% of the Bank of San Pedro.

In addition to his job as a bank director, Podesta also served as president of the bank’s real estate development subsidiary, BSP Development Corp., for which Moller serves as chairman. But bank officials said Friday that, with his retirement, Podesta has also given up that post.

The bank announced Podesta’s decision Thursday in an advertisement in the San Pedro News-Pilot. The ad, which took the form of a letter to bank shareholders, praised Podesta for “his many contributions in making the Bank of San Pedro the well-managed and profitable organization it is today.”

A state-chartered bank, the Bank of San Pedro is the only independent financial institution in the waterfront community.

It was founded in 1975, and bank officials say it has grown significantly during Podesta’s tenure, during which time its total assets increased from $32 million to nearly $180 million.

In an interview, bank president Oak said Podesta has encouraged the bank to improve customer service and also to lend money to local businesses. “He was very concerned about putting money back into the community,” Oak said.

In its annual report to shareholders in October, the bank was required to disclose that it had come under criticism from federal regulators for issuing $1.04 million in six unsecured loans to Podesta.

In interviews, bank officials said the loans were guaranteed by Podesta but issued to companies with which he is associated. For several months, four of the loans, totaling $479,000, were in default. Oak and Mandia have said that those loans have since been repaid and that the other two are current.

Federal bank examiners cited the loans as apparent violations because they were substandard--poor credit risks that could have deteriorated into losses.

In addition, the shareholders’ report noted that in July of last year, Podesta sold 29,996 of his bank shares to the bank’s Employee Stock Ownership Plan for a total of $314,558, or $10.50 per share. Bank officials have declined to say whether Podesta used the money to repay the loans that had been criticized.

Podesta’s retirement--coupled with the decision of former Director Thomas J. Jankovich not to seek reelection at the shareholders meeting this past October--leaves the bank with just four directors, one short of the number required under its bylaws.

Oak said the bank is now looking for another director--”somebody that will uphold the standards that we require as a bank director and someone that can contribute and someone that is well-known in the community.”