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Being the center point
for most of their employees and having a clear vision allows Commonwealth Business Bank to
generate a higher productivity than other banks
Commonwealth Business Bank
5055 Wilshire Boulevard, Suite 840
Los Angeles, CA 90036
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
August 17, 2006
President and CEO
Mr. Choi is an organizer, a director and the President and Chief Executive Officer of the
Bank. Mr. Choi has over 20 years of banking experience both in the United States and Korea.
Prior to founding the Bank, Mr. Choi was the Senior Vice President and Chief Credit
Officer for Hanmi Bank, a position he held since 1999 until early 2004. Mr. Choi
holds Masters Degree in Banking from Pacific Coast Banking School and Business
Administration from Pepperdine University.
Commonwealth Business Bank is a state-chartered commercial bank operating in Los Angeles, California
servicing primarily individuals, professionals, and small to medium-sized businesses in
the local market. The Bank accepts checking, savings, and time deposits, and makes
commercial, commercial real estate and consumer loans. The Bank also offers trade
financing, letters of credit, wire transfer, Internet banking and other customary banking
services to customers.
The Banks primary market
area is Los Angeles County with a particular emphasis on the multi-ethnic communities
located between downtown Los Angeles and Beverly Hills. The strategy of the Bank is to
focus on its primary market and to provide products and superior customer service in
special niches, and to utilize the contacts of our directors, officers and other employees
to the fullest extent possible. Commonwealth Business Bank promotes its presence, its
image, its involvement in the communities the Bank serves through participation in
community programs, professional associations and business organizations.
CEOCFO: Mr. Choi, Commonwealth is a young bank, what is the
vision and how is it developing so far?
Mr. Choi: The vision we started with was that we wanted
a bank that can generate and develop young talent for the next generation bank. I saw that
the development and growth of the ethnic bank in the Los Angeles area, sometimes is
bringing in more of the unprepared success of the young generation. Once the growth starts
to slow down, then all the banks have to work on the internal control and discipline the
organization. I think we have to be ready for the tough times after a relatively smooth
cruising era, which is the 2001-2005 easy money expansion of the economy. For the next
couple of years I think there is going to be many restructuring and sometimes
reengineering process that will go on in the banking industry. Therefore, we are prepared
for that, also we have to develop a new area of banking of which we have many challenges
from non-bank financing companies or even non-bank non-financing companies. We saw that
the Wal-Mart Stores Inc. (NYSE: WMT) and Microsoft Corporation (NASDAQ: MSFT) are all
trying to penetrate the financial industry. We have to be able to meet or exceed those
challenges. My vision was to set up an organization that can develop a young talent to
meet the challenges of the changing environment also the changing the competitive
structure of the banking industry. We started with talented people, but not junior or
entry level people. We started with seasoned and experienced senior level people in this
bank. We are 1½ years old and our plan has been executed as we have planned.
You have had your second profitable quarter!
Mr. Choi: Yes.
What accounts for that?
Mr. Choi: Our seasoned and experienced people have good
connections and networks and they can develop their relationships much earlier than are
the typical de novo bank. They brought in their relationships from the other banks and our
excellent service. Therefore, we grew fast and our growth brought in the profitability
sooner than the other banks.
Is there a typical customer for you?
Mr. Choi: Typical customers we define as anyone who
needs the highly sophisticated banking solutions, those are our target customers. We have
the knowledge, experience and the team so we can provide solutions that no other bank can
provide as easily. Our typical customer will be sophisticated, either an individual with a
high net worth or businesses that are growing in a developing area.
CEOCFO: Will you give us
an example of what a customer might get at Commonwealth that they may not get somewhere
Mr. Choi: Most lenders focus on the financial
components of the past. In our bank, we have industry expertise in our team and we can
read their competitiveness beyond their numbers. Even though they have the same
financials, we can tell the better management from the mediocre management. We can give
them more credit for the higher management skills and the dedication of the senior people
of the borrower. We can give them better structure so that they can thrive faster than
they can with regular lenders.
CEOCFO: Are there
services that you are not offering now that you would like to add in the future?
Mr. Choi: We do not have a big wide consumer banking
products like mortgages and credit cards. Instead, we have alliances with mortgages and
credit cards so that our customers will not have any chance that they will have to go to
another bank for those services. Our future focus is we will lead this bank to a complete
banking service organization so that our customers can have all kinds of access including
CEOCFO: You have a new
branch; will you tell us about your branching plans?
Mr. Choi: Our downtown area in Los Angeles is the
center for the garment and textile district; their growth is phenomenal. With the
introduction of China, India and Vietnam, their growth potential is larger. Some people
say that downtown is doomed because of those imports, but they have a better future
because those China, India and Viet Nam exporters need some connection point or hub in the
Los Angeles area. This is because they dont have the expertise in the local
knowledge and the U.S. operation. However, the downtown garment district wholesalers or
manufacturers have built that kind of foundation for more than two decades. Their
knowledge will work very well with those exporters in China, India and Vietnam. Therefore,
our focus is to entertain those shifts out there from manufacturers and wholesalers here
to the importer and distributor here. Further, we have the capability to understand and
address the need for the changing business models that is why we are entering the downtown
CEOCFO: Why should
potential investors be interested and what should they know that does not jump off the
page?Mr. Choi: We understand our borrowers beyond their
numbers. I would like to emphasis the potential of the bank, not from the numbers alone,
but the whole aspect including management and their vision and dedication as well as
numbers. I would like to talk about the dedication; many people think that they are just
hired for compensation or money, but our focus is that the workplace is more important
than before because we spend a lot more time than our former generations did. The
workforce should be the focal point of our life, so when we see our people here in the
bank, I give them a lot of advice and some incite on how their life should be centered
around the work environment. In that regard, the dedication is not coming from the
compensation itself, the dedication is coming from the community of the bank. I believe
our bank is the community and the social network. Our bank is the center point for most of
the people that work in the bank. With that environment and a clear vision of how to
manage and lead a bank, we generate a lot higher productivity than other banks can have.
When our shareholders read what we publish through our business wire or press releases, I
always emphasize that where we are not only encompasses numbers but also in the direction
of the bank and the communication with our people. Therefore, they can feel that they are
included and a very important part of the bank as well as the driver of the bank. Those
intangible values of the bank will bring in more productivity and creativity so that we
can excel in any changing environment. These days a change is almost instantaneous.
Therefore, any organization that is sticking to their previous business model, hoping to
have the same level of accountability will not have a long future. Dedication, strongly
founded on the community sense, can meet any of the changing needs of our customers.
Therefore, when our shareholders look at us, I ask them to look beyond numbers.
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