You don’t have to be young, like Rick Sanborn, age 37, to be a whippersnapper banker. You can be mature, like Bob McGill, 55, and still run a whippersnapper bank, the young Neighborhood National Bank, and therefore qualify as a whippersnapper banker. Whippersnapper bankers shall inherit the earth, or at least San Diego, not because they are meek, but because their elders finally tired out, sold out, were booted out or will be soon. It’s a logical progression, in some sense. But just how the transition unfolds depends, of course, on the individual players. In the past year and on into this year 2000, San Diego’s mostly profitable bankers continue to train their successors or create opportunities for new banks and new bankers to take over. The old guys — Pete Davis, Jim Gregg, John Rebelo, Larry Willette and Bill Ehlen among them — last year and this year turned over $1.7 billion of locally financed assets to the likes of U.S. Bank of Minneapolis, Wells Fargo of, well, Wells Fargo, is now controlled elsewhere in Minneapolis, too, and Community First National Bank of Fargo, N.D. Fargo, North Dakota? Just last month Al Severson completed his exit strategy, or Robert Sarver's exit strategy for him, following the recent transfer of $858 million of Grossmont assets and $353 million of Escondido-based First Pacific's assets to Sarver and Salt Lake City-based Zions bank boss Harris Simmons. There are whippersnapper bankers like San Diego National Bank's recently named CEO Robert Horsman, who reports to FBOP Inc. in Chicago, courtesy of Murray Galinson, who sold his shares a few years ago but remains as chairman. Horsman gets to lean on FBOP's liquidity if necessary, not a bad relationship for San Diego. And then there are obvious whippersnappers like former Scripps Bank executive Bruce Ives, 35, the new CEO of Santee-based Cuyamaca Bank, which is poised to do some growing now that longtime President Al Farias is gone, competitor Grossmont is gone and competitor Valle de Oro is gone. Cuyamaca even gets an old whippersnapper in a new chairman, Tom Page, 67, the former SDG&E chief. Thank goodness for guys like Bill Nelson, chairman, and Ron Carlson, president, of Scripps Bank; they're among the last of the old bankers still controlling a locally owned bank. But experience doesn’t guarantee perfect credit extension. Or, perhaps, the extension was perfect but the collection was not. Scripps took a $7.23 million provision for loan losses last year. Experience, however, did contribute to Scripps' ability to earn a small profit last year despite the big hit. Whippersnappers don’t get a free ride, just because competitors are disappearing, clearing the field for the remaining community banks and start-ups. First National Bank CEO Leon Reinhart, who qualifies as a whippersnapper because of his newness to San Diego, has had a rough time at the helm, taking a $1.8 million provision for losses last year, barely earning a profit, while spinning a revolving door of executives. The winners will be those who best deliver the service and the homegrown message that retail customers and business borrowers came to expect from their dearly departed local banks. "We have a five-year plan that concludes at the end of 2001, and our game plan is to be at approximately $2 billion in assets, earning 2 percent ROA," says Horsman, who counts SDNB among the beneficiaries of U.S. Bank's acquisitions. He doesn’t have too far to go. Last year SDNB earned 1.98 percent return on average assets — the best commercial bank performance in San Diego County — ending the year up 49 percent to $22.5 million in profit and up 21.4 percent to $1.23 billion in assets. (Assets stood at $1.35 billion by early May.) "You bet" he's happy Rebelo and Davis aren’t out there competing like they used to, says Horsman. "I have a lot of respect for those two fellows as bankers and I congratulate them on their success." How does one avoid undue risk while growing the bank at the speed SDNB prefers? "That's guided by good strong management," says Horsman, adding, "Fortunately, we’re in an expansive economy. With the deal size we can do, up to $70 million, we have the ability to grow our bank a little faster than what we did when we were the old San Diego National Bank." And with Bank of Commerce and Peninsula out of the marketing mix, and its successor virtually invisible, SDNB's heavy "We Know San Diego" marketing theme led by Padres announcer Jerry Coleman seems to be working. "There are great opportunities for those banks still around and still able to compete with the big banks," says Howard Levenson, a veteran San Diego bank investor, stock market maker and chairman of the recently formed Southwest Community Bank based in Encinitas. "There was a news item today, one of the members of the Federal Reserve Board stating that the merger activity that’s taken place in the last couple years has been, in fact, good for small banks because the small banks are able to offer the service to customers that they can’t get from their merged banks." And so you have Southwest Community Bank's assets up nearly 102 percent in 1999, Rancho Bernardo Community Bank up 42.6 percent, Asian-American-owned First United Bank up 36.1 percent, Fallbrook National Bank up 28.6 percent, even Borrego Springs Bank up more than 17 percent, most but not all setting growth paces greater than 1998 and 1997. "Many services and decision-making abilities have been centralized by the acquiring banks, which really means that they were taken out of the local area," says Rick Sanborn, the 37-year-old whippersnapper at Palomar Community Bank, which is a beneficiary of First Pacific's and Grossmont Bank's reorganization into Zions-owned California Bank & Trust and likely will benefit again as North County Bank branches are converted to Wells fargo. "Where lenders or management once had the ability to approve your loan locally, that now has to go to Los Angeles or Utah. It’s a shame. Customers really feel the loss of having a responsive banker. Most business owners do not want to wait the extra two to three weeks for a decision. It even affects the staff. Several of the prominent local players have left as a result, with two of them attempting to start their own community bank and get back to what we at Palomar are now doing. "North County Bank's sale is truly the loss of a great North County icon," says Sanborn. "Jim Gregg did a wonderful job of creating the type of institution we would all strive to be associated with: Excellent customer service, responsiveness, creative solutions when you needed them, good to their employees. They'll truly be missed. Wells fargo's culture is going to be tough for most of NCB's customers and employees to swallow, as evidenced by the response we’ve received after they were sold. Businesses like to work with the 'hometown team,' and fortunately, we are now Escondido's only 'hometown team.' I would like to thank NCB for making us Escondido's only remaining 'community bank.'" Which is exactly why Southwest Community Bank is about to convert a new loan production office into a full-service branch on West Valley Parkway within 60 days. The time of opportunity is now. "Ten years ago, you'd be quoting Tom Sefton, John Rebelo, Don Clague, Malin Burnham, Ed Peterson, Sid Fox, George Ellis, Dan Herde, and now they're all gone or leaving the stage," sighs Pete Davis. Says his son-in-law, Palomar's Sanborn, "I think this rash of community banks selling out to big banks will continue as the older bankers are looking to get out of the business, cash out of their stock options, and retire to the hills. I know that if I were in my late 50s or early 60s, I'd probably be planning my exit strategy, too." Whippersnapper.