A quarter-century after its founding, the only commercial bank headquartered in the San Fernando Valley has a new leader.
Banking veteran Tamara Gurney, who founded and led Sun Valley-based Mission Valley Bank since 2001, stepped back from its helm in late August. She left the $800 million publicly traded bank in the hands of Brian Carlson, who has spent much of his career issuing loans through the federal Small Business Administration program.
The transition isn’t a final goodbye for Gurney. She’ll continue to guide the bank’s publicly traded holding company, Mission Valley Bancorp, as its chief executive and director, and will serve as an executive chair and director of the bank’s board of directors.
The longtime leader left big shoes for Carlson to fill. Under her watch, Mission Valley grew from a mere idea to $800 million in assets and more than 6,000 clients served across four locations in Sun Valley, Santa Clarita, Burbank and Arcadia.
Carlson has led the bank’s SBA lending since joining in 2021.
A month into the leadership shake-up, Gurney and Carlson sat down with the Business Journal to look back, take stock of the present and anticipate what’s to come.
TAMARA GURNEY
What niche did Mission Valley Bank set out to fill at its founding, and how have community banking needs evolved since then?
The impetus for starting the bank was the sale of American Pacific State Bank, which I had worked at for 20 years (to City National Bank). That was the last community bank in the San Fernando Valley at the time. There had been a number of them in the decade or two prior, but they were slowly acquired or went out of business – those kinds of things.
So, the idea was to bring back community banking to the Valley. Once that acquisition took place, within six months or so, many of my former clients who were now with City National were reaching out to me to say, “Hey, this is not what we’re used to. We want a small bank back again. What do we do?” It just seemed like (starting a new bank) was the logical next step. How do we bring back what we lost? Some of my former employees who were acquired in that transaction at City National reached out and let me know that if something was going to happen, they wanted to join.
Coming back with Mission Valley Bank to fill the void that was created was very well-received. Local businesses were our beginning shareholders and clients, and Sun Valley was the headquarters and remains the headquarters.
But the bank has grown. We have four locations now because we’re servicing Southern California. But our home is Sun Valley, and that’s where our heart is. The local businesses that want and are best suited to a community bank still reach out and want what differentiates us from a larger institution.
Has that backstory, the fact that you came out of this need for a smaller bank after that acquisition, made Mission Valley resistant to folding into a larger bank or operating at the largest possible scale?
I think yes, because again, with the board made up of business owners and leaders in the community – all 11 of us came from American Pacific to start Mission Valley – we are fiercely independent.
And fortunately, we’ve operated successfully for 25 years, which has allowed us to make that decision. There have been many polite conversations about merging and all of that. But my board, to this point, has felt like we have a mission, a vision to execute on, and that is to serve this community with the way we do business, and that’s what we want to continue to do for as long as it makes sense.
What would have to change for the status quo to no longer make sense?
We have to be relevant. Shareholders invested in us, and they expect the return, and so if we cannot live up to the standard and produce a reasonable return to shareholders and what’s accept- able to them, then they would probably be the ones who would be reaching out to say it might be time to partner up with a larger institution or maybe an institution of equal size.
Looking back over the last 25 years since you founded Mission Valley Bank, which decision or turning point had the greatest effect on what the bank became?
A lot has happened. We’ve gone through the Great Recession and we’ve gone through downturns multiple times throughout that period, and those things do have an impact on the communities that we serve.
Leading into that recession, we saw that a lot of our clients were struggling with cash flow, so we introduced a product that I was familiar with from my previous bank experience, which was called Business Manager. It’s an accounts receivable product. My understanding today is I think there’s only two true community banks in the state of California that offer this program, so that makes us a little bit unique, but it was something that was really necessary to help some of those folks through that tough time. People weren’t getting paid for 90 days, 120 days, so we purchased invoices in advance. That cash that gave them the liquidity they needed and the cash they needed to keep the lights on.
That was an important element that led us toward more specialty services. It’s always been my vision about the bank to serve our community, and so if the community is struggling, what do they need?
Mission Valley carved out a niche serving industries that most banks avoid, like cannabis and cardrooms. Was that always part of your vision or core strategy for the bank: distinguishing your offerings from those of your peers?
I don’t think that we verbalized it. We definitely didn’t put it down on a written strategic plan. But it was always meeting the needs of the community, and sometimes that meant going outside of what traditional banking might look like.
The (cannabis) industry has had a really rough ride since it became legal, at least here in California, both medically and recreationally. They need banking services, so without them, they’re pushed underground, and you’ve got a big black market. We decided that we could handle the compliance aspect of it, and we built that into our risk appetite, and we took on a book of business, helping some of those folks have a lifeline to where they weren’t having to carry cash around to go pay their taxes.
I’ve never followed a cookie-cutter (approach), and I’ve never been extremely conservative. I think I’ve been more of a risk-taker. That does make us a little different.
Has that risk-friendly approach paid off?
Absolutely. I think it’s what has created loyal customers. Several come to mind in the Great Recession that almost lost their businesses, and we helped them out with the cash flow needs through (accounts receivable) financing and other ways. Today, I have some of those clients come and tell me, “Thank you. Our business wouldn’t be here if you hadn’t stood with us during that time.” So, have we had some losses and had some bad experiences? Absolutely. I mean, never going to be perfect at it. We’ve taken some chances on businesses that unfortunately didn’t pay off, but we have huge success stories, businesses that are here and flourishing because we were their partner through the tough times.
When we last spoke, you mentioned that a leadership transition at the bank had been in the works for quite some time. When did that planning begin, what did those conversations look like, why was now the right time, and why was Brian was the right person to take over the reins?
I passed what has been the normal retirement age some years ago, and so leading up to that, the conversations begin. Whether it’s with your board or regulators who say, “Oh, you’ve hit this milestone. What’s your succession plan?” Some years back, we did hire a chief operating officer with the intention that that person had the skills to grow into the role over time, and that unfortunately didn’t work out.
He chose to go somewhere else, and that was a good mutual decision. So, we haven’t had the right players in the bank, and my preference and the board’s preference was to have someone internally that was groomed up, and so it’s taken time.
Brian has worked with me. I’ve known him for over 15 years. He’s been running my Total SBA affiliate business that’s owned by our holding company, and we work together very closely with that business. He has the temperament. We think alike. We’re aligned in terms of vision and direction of the company, and we have a young team now. Our CFO and our COO are younger executives who need some time in the chairs, so to speak, to be groomed, and so this gives me an opportunity to step away from the bank, the day to day, and move up to the holding company.
I will work on special projects there. There are things going on in the payments space that I think are and the board feels are critical for our future.
(Brian’s) leadership style will be different. But we will be collaborating together to make sure that we remain aligned and helping one another grow the bank.
We’ve built a bench for the future, and I’m still a part of guiding it, just at a higher level.
What about the payments space do you think is particularly interesting right now? What are some other projects that you’ll be devoting your time to?
We have a partnership with an (independent sales organization) that’s called Select Bank Card, and they have launched a merchant card credit card processing business in which we are partners with them. Probably by the end of the year, we will be ready to start actually doing processing that will impact the bank.
I will be looking to marshal that to the finish line and build the team. That will probably take up the majority of my time for the near term.
We’ve also not really had the opportunity or the expertise on staff to really explore opportunities in technology and innovation, and so we have made an investment in a business that is helping community banks around the country do that. It would be very difficult for me or any one person here to really dig into 800 fintechs around the country that offer services that we could use and really understand and evaluate which one is really the best solution. This partnership with Bank Tech Ventures is allowing us to do that at a much more efficient rate, and I want to keep my hands in that.
Innovation and creativity have always been where I perform best and my strength. I want to use my time in those areas and really come across some of the new technologies that I think will help us automate things, so that we are relevant and we can continue to maintain our independence and grow and evolve the bank into what the future is going to look like.
After 25 years at the helm, how do you hope your time leading Mission Valley will be remembered?
Leaving a legacy is foreign to me. It’s not something that drives me. What does drive me is looking back and acknowledging or remembering the lives that we touched, both employee and client. I shared a brief example with you earlier in this conversation about a client whose business literally almost did fold, and we hung in together. It was tough for us because, from a regulatory standpoint, we got some dings and some bad marks. But we held it together, and I think because of that kind of a commitment both ways, the trust that was built, that business is still here, and that the families that it services have jobs and livelihoods. That’s what I am most proud of. And employees that started with me when we opened the doors as a new accounts person and is now a senior VP running my back-office treasury management. These are people who all they needed was a chance, and they made something of it.
I’ve said my entire career that the entrepreneur that started the company – typically, there’s a point at which they’re not the person to continue to carry on. We need a fresh set of eyes, a different way of doing things. It needs to be another person, and I’m just proud and honored to still be here and be able to be a part of it in a smaller way and watch it flourish and grow differently.
BRIAN CARLSON
You’ve been in the bank’s top role since Aug. 26. How has your first month on the job gone?
The bank has been a very active member of the community here for 25 years, thanks to Tamara. As I took over, I didn’t want to make any dramatic changes.
The first few weeks here I’ve really just spent getting to know all the teams. I worked on one part of the bank but really didn’t have a chance to interact with the people on the other side of the bank. It’s important to get to know them, understand how things are going in their part of the world, if there’s anything I can do to make their life easier or make things work better.
What is your mandate as chief executive? What opportunities do you see that would take Mission Valley to its next stage of growth?
I ran the SBA department for the bank and have run SBA departments as a big part of my career, and so obviously I’m familiar with that, and it’s a great program. It provides kind of a key ingredient here to make this work for both borrowers and banks, and the program is good for banks, so, certainly, I’m going to look for ways to more effectively utilize SBA as part of the overall plan.
But the neat thing about banking, and I’ll use SBA as an example, is that you know you can make a loan to somebody, and it can have a very positive effect on their business, on the number of people that they are able to employ, and the number of mouths that are fed because you know they’ve grown their business and there- by increased employment. Banking, done right, can accomplish that, which I think you can feel good about.
Mission Valley reported increases in nonaccrual and past-due loans during the first half of the year. What is driving those increases, and how will you respond?
It was a few larger accounts that had almost fluke-ish things happen in their businesses, and so you know we’re working through those things, and I’m hopeful that we’ll get them resolved pretty quickly. I think because of the size of the loans we’re talking about, it kind of distorted those numbers. But the core of the business, our lending business, is fine.
What technology investments does the bank need, and how will you modernize its services without losing its relationship-based approach?
That’s the trick, isn’t it? It’s a great question because you can’t ignore technology. AI and everything is moving so fast that the world is changing rapidly, and we’re going to have to change with it. But I don’t think you can ever lose what I think is the key ingredient that makes us different: You can pick up the phone and talk to somebody. I find it somewhat frustrating when you call organizations and you get caught in this loop of an automated answering machine, and you’re trying to navigate your way through it. It’s not very efficient for the user, and really the value that we have is really personal relationships. If we can use automation to speed up our processes without impacting our clients, by all means, we’ll be doing that.
In what ways do you see automation like potentially playing a beneficial role? What parts of your process do you think can and should be automated, or already are automated?
Right now, we are implementing a system in our credit department to automate how we analyze financial information and put together our analysis for loans.
It streamlines the loan processing and documentation piece, and also loan boarding and servicing. A lot of that back-shop process, I think, can really benefit from the automation that now exists out there, or the AI solutions that exist.
How do you measure how far that automation can be pushed? How will you know when to stop?
What you want to do is you want to have real humans looking at the information, and humans making the decisions, but using AI or whatever to essentially collate and pull together the information in a much faster way than humans can do it, frankly.
If you’re a huge bank, maybe automating on a larger scale would be more critical. But I feel like the secret to being an effective community bank is to really be connected to your clients and the community.
You founded and ran Excel National Bank in L.A.’s South Bay from 2005 to 2012. What lessons did you learn from that experience that you’ll carry on to your work at Mission Valley? In what ways do you think the two experiences might be similar or different?
I think that’s one of the foundational pieces that the board saw (and) thought I would be a good person to step into this role now.
The one thing is that you have to diversify and make sure that you’re spreading risk across a broad area, so you’re not too concentrated in any one area. The biggest thing is just running a bank is a multifaceted education, and I was much younger and less experienced when I started that bank, and it was a steep learning curve. I feel like it was good prep certainly for stepping into this role today.
What elements of Tamara’s leadership and the culture she created will you preserve? What will you do differently?
Tamara, on one hand, she’s definitely a businesswoman, but she really had a connection with employees, and I think everyone liked and respected her and knew that she always had the right intention. I certainly want to emulate that in my own way, and what I want to do is to try to create an organization that has as good communication and collaboration as possible. I’m not a person that likes to have a ton of meetings, but if we are going to have meetings, I do want to get as many parties involved in those meetings where we’re getting a lot of different viewpoints, and maybe that gives everybody a little more insight on how to support each other.