As the subprime home mortgage market was expanding precipitously across America in 2006, 2007 and 2008, and home prices were climbing rapidly, bankers felt the pressure to compete by joining the fray. El Dorado Savings Bank, headquartered in Placerville, refused to play the game.
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El Dorado Savings Bank has 35 branches located in the Mother Lode from Grass Valley to Twain Harte, in Sacramento and east Sacramento County, in four Lake Tahoe communities and in Sparks, Carson City and Gardnerville, Nev.
“We have modernized, but we operate by the same principles as when the bank was started by local Placerville businessmen in 1957,” said Tom Meuser, chairman and chief executive officer. “We provide checking and savings services. We offer residential real estate loans to customers within our service areas. We don’t lend in outside areas and we don’t take deposits from outside.”
Meuser said that banks that depended on volume could afford to make loans that were riskier because if some loans failed the banks could still be profitable. They also bundled their loans, mixing the risk levels, and sold them to secondary buyers. Other banks went along because they thought they had to compete to stay profitable.
El Dorado Savings’ loan volumes were down in 2006 and 2007. By 2008 the bank’s managers knew there was a serious problem.
“The pressure was hard on the branch managers. They would call to say that customers were going to other banks because they could qualify for loans there. I had to tell them we weren’t lowering our standards,” he said.
“We keep all our own loans and service them ourselves. We do not sell to secondary markets. We don’t make a loan unless we believe it can be repaid.”
Servicing a loan includes working with customers who lose their jobs or need some other assistance. “When people come to the Service Department, we are responsive. We say, ‘Here’s what we can do.’”
Meuser and his team take pride in the bank’s record of completing 22 consecutive years with no foreclosures on the books. “That doesn’t mean we had no foreclosures at all,” he said. “We had a few, but we resolved them within a short time and got them off the books.”
As the home mortgage market continues to hobble along, El Dorado Savings Bank is reaping the rewards of maintaining financial discipline. “We are getting new customers. Our loan officers are busy writing loans and our new accounts are up,” Meuser said.
“People want a bank they can trust. They want someone they know to handle their financial transactions. We take the time to let people know how important they are. We are part of the communities we serve. We offer support to any nonprofit in the nine counties where we are located. We try to spread it around.
“Most of our managers have been in their branches for a long time. They provide a comfort level. For example, when we opened the Georgetown branch in February 1981, we sent Suzi Pierce, who was working in our Placerville bank, to manage the new branch. Suzi lived in Garden Valley and was able to welcome people she knew as customers to the bank. She has been there 30 years.”
The 35 branch managers have an average of 18 years of service. The 10 senior officers average 34 years each, making a total of 340 years with the bank.
El Dorado Savings Bank has 330 employees. “Our employees are loyal. They are connected to their communities and work hard to make the bank successful.” In a time of uncertainty, El Dorado Savings Bank is financially stable and a private company. “We are a closely held corporation,” said President George Cook Jr. “We are committed to remaining independent.”
The bank has not had to make any layoffs. It was able to give raises and bonuses this year, as well as profit sharing.
“A company’s culture is one of the most important qualities of business,” he said. “It’s a long-term process. We take care of our customers. We’re happy to see them. We thank them for coming.”
Every quarter Meuser sends copies of some of the many letters he receives from appreciative customers to his managers to let them know that their efforts make a difference in people’s lives.
One customer, who was a victim of fraud, wrote: “Experiencing the personal violation of someone unlawfully obtaining and using your ATM card number is overwhelming in itself. But, the teamwork of multiple departments within your organization made this as painless as possible.”
As chairman and chief executive officer, Meuser is conscious of setting an example. He started as a management trainee in 1969. George Cook Sr. and a group of investors had purchased the bank in 1960. Today Cook comes into the office twice a week and is chairman of the executive committee.
Meuser had graduated from St. Mary’s College in Moraga. He met his wife, Jane, on a blind date when she was a student at Dominican in San Rafael. Jane is the eldest daughter of George Cook Sr. They married after graduation, and moved to Daly City, where Jane got a job teaching first grade at St. Cecilia School. Tom studied English with the idea that he wanted to become a teacher. He was at San Francisco State as a graduate student during the campus riots there. “I kind of lost my idealism about teaching,” he said.
He applied for the bank management trainee position and was hired. “The bank was small then. I learned all the operations on the job,” he said. He worked his way up to chief appraiser, then chief loan officer. In 1984 he became president and in 1991 he was appointed chairman and chief executive officer.
“English turned out to be a great major for a bank manager,” he said. “So much of my job has to do with communication — verbally and in writing — with employees, managers, customers, the board — including six outside members — and not least, the regulators. The Dodd-Frank Wall Street Reform and Consumer Protection Act became law in July 2010. It requires an extensive annual review. Preparation, delegation of tasks and follow-up takes up a lot of time.
“Keeping up on all the new rules and regulations is a challenge. The business is changing, and it’s necessary to be able to recognize trends and adapt. The environment is challenging because of problems on Wall Street. Interest rates are low and we have to work hard to get an adequate return on investments.”
In June 2011 BauerFinancial Inc. honored El Dorado Savings Bank with its Exceptional Performance Award for earning a five-star Superior rating for 72 consecutive quarters, since December 1993. The third quarter of this year showed the strongest growth in eight years.
In the near future, Meuser said the bank will stay steady. “We will maintain our focus and not get impatient. We’ll stay at 35 branches with our current employee base. We’ll protect the quality of our assets.”
When Meuser gets free time, he enjoys spending it on his 11-1/2 acre farm in Placerville where he grows walnuts, pistachios, grapes, blueberries and strawberries, and raises llamas and goats. He and Jane have six children and 11 grandchildren, with another soon to join the family.
El Dorado Savings Bank Main Office is at 404 El Dorado Road, off Highway 50, in Placerville. For more information, visitwww.eldoradosavingsbank.com, or call 530-622-1492.