Stu McFarland

As a teenager, Stu McFarland worked in his father’s car dealership, City Chevrolet. “I noticed the guys from Bank of America coming through with big smiles on their faces, nice suits; seemed like real friendly guys,” McFarland recalls. “I thought I wouldn’t mind doing something like that.”

These days, McFarland is the president and chief operating officer of $600 million-plus Southwest Community Bank, a business lender that doubled net income in the first nine months of the year to $7.7 million.

McFarland started his banking career as one of the BofA guys, working for a dozen years in the San Diego regional office, and as head of Upscale Banking Services in the North County region. In 1986, he joined North County Bank and was a moving force in its rise as a top SBA lender.

McFarland joined Southwest in 1999, when its assets totaled about $30 million. “(CEO) Frank (Mercardante) and I have very similar lending and business philosophies,” McFarland says. “We try like heck to find a way to approve loan requests, and work extra hard to find ways to do business with good business clients.”

Real estate is the vehicle driving Southwest’s success. “We had done quite a bit in construction and that generates good fee income,” says McFarland. “We were in the market on condo conversions pretty early.”

Southwest also is expanding its office network. In addition to opening a new branch in Rancho Cucamonga in October, the Carlsbad-headquartered bank opened new loan production offices in Fullerton, Chicago, Ashburn, Va. (D.C. metro) and Draper, Utah.

McFarland says Southwest decides to open distant offices based on SBA activity in the region and a relationship with a banker in the area.

“In Chicago, the lender heading up the office is the sister of a (Southwest) employee and is someone we knew we could trust to work on their own,” McFarland explains. “Chicago is a hotbed of SBA activity, so it’s a natural for us.”

Loan production offices differ from full-fledged branches in that they do not accept deposits. “Administratively, a loan production office is less costly and subject to fewer regulations,” he adds.

As he helps steer Southwest’s fortunes, McFarland says he doesn’t regret passing up the auto business. “I wanted to try something on my own.”