He has been the commercial banking services manager of City National Bank in San Diego for 10 years, and its senior vice president and market leader for the past six years, but Steve Cusato still considers himself the “new guy” on the job.
“I've got a relationship manager that has been here for 32 years and folks that are well into their twenties (in terms of their tenure at City National),” Cusato said. “A lot of clients value that kind of stability and it allows us to position ourselves as really a value-added partner because of the people and stability we deliver to the relationship.”
According to Cusato, a graduate of San Diego State University with degrees in marketing and finance, City National's people are one of its primary assets.
“I say that because if you look at who regulates commercial banks, it's the federal government and Congress, in concept, created us all to be relatively equal,” he said. “What constitutes an acceptable loan for our books would probably be the same for 'Brand X.' How we differentiate ourselves is through the type of people we have delivering the bank on a day-to-day basis.”
As the market leader, Cusato is the face of City National in San Diego, representing the institution at various events. The Los Angeles-based bank was founded nearly sixty years ago in Beverly Hills and is the largest bank headquartered in Southern California. Its 77 offices are primarily on the West Coast, but are also located in, Nevada, New York City, Nashville and Atlanta. Forbes recently ranked City National as the nation's 47th-largest and 26th-best bank -- ahead of No. 84 Wells Fargo (NYSE: WFC) and No. 86 Bank of America (NYSE: BAC) in the latter category.
“We're basically a private and business bank, exclusively. But within those business segments, we have a number of niches and specialties,” Cusato said. “We're a large entertainment (industry) bank. But, if you look at the general business climate in San Diego, which isn't entertainment driven, we really specialize in (complementing) good management.”
Cusato said City National likes to focus on management teams the bank considers A-plus, as opposed to merely taking as a client any company in a particular industry sector. Cusato said that the health care industry is one of City National's principal niches in San Diego County.
Prior to joining City National a decade ago, Cusato spent 10 years with Imperial Bank/Comerica. He began his banking career at about the time Congress passed The Depository Institutions Deregulation and Monetary Control (DIDMCA) Act of 1980.
“I saw that financial institutions would be in more of a marketing position than they had historically been in the past, so it allowed me to utilize my marketing degree as well as my finance degree,” Cusato said.
Cusato said that the banking industry has come a long way since the financial crisis of 2008.
“One of the things I see (in the aftermath) is a lot of companies definitely showing strong financial results; performance. On the other hand, the competitive landscape is as strong as it ever was. So, we have both of those factors in play, but it seems to be pretty stable.
According to Cusato, City National not only weathered the last recession, it succeeded in spite of it.
“One of the advantages (City National) had is that through the recession, we did not take a quarterly loss. We're in our 82nd consecutive profitable quarter and our 20th consecutive profitable year," he said. "So we were in a unique position that, while some institutions found themselves having to focus inwardly, we could continue to deliver to the client. So, we were able to actually grab market share.”
At press time, the U.S. Government is in shutdown mode and another financial crisis and recession is potentially looming. Both circumstances have the attention of Cusato and bankers worldwide.
“If they're going to furlough that many workers and disrupt that many businesses, sooner or later it's going to take its toll on the economy. And, as a financial services provider for San Diego County, we will feel that pinch,” Cusato said.
“I don't know what the worst eventuality is, but in the short-term, the medium-term, we (at City National) always look at our portfolio to see how much sensitivity we're going to have (relative) to that kind of interruption of payments.”
Cusato cited DoD contractors declared non-essential, defense-industry subcontractors and health care providers that rely on federal funding in some areas as those in San Diego that could be among the most vulnerable to an ongoing stalemate in Washington.
“We're constantly looking at that and if it doesn't last too long, we'll be OK from a portfolio perspective in San Diego, but everybody's got their limit,” Cusato said. “I'm optimistic. I think we'll get it sorted out.”