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Daily Journal Newswire Articles www.dailyjournal.com © 2009 The Daily Journal Corporation. All rights reserved. • select Print from the File menu above LARGE FIRMS • May. 10, 2004 Safe Deposit Alan Rothenberg has left his mark on the legal and sports scene. Now, investors say Rothenberg's big name will draw customers to his new bank, which caters to lawyers. By Amy K. Spees Law firms that decide to carry their bundles of cash over to 1st Century Bank aren't just getting a financial institution that caters to attorneys. They're putting their money into Los Angeles legal luminary Alan I. Rothenberg, the face behind the newly opened bank. Rothenberg, chairman of 1st Century, is the co-founder of Manatt, Phelps & Phillips, one of Los Angeles' prestigious law firms, and a creator of modern-day Major League Soccer. He's a former head of the State Bar and a past partner at megafirm Latham & Watkins. "There are very few people that could run a soccer league, run an Olympics, be a major player in a major law firm and then start a bank," says Thomas Girardi of Girardi & Keese. "Alan is an exceptional human being." Rothenberg is the force behind the new bank, which aims to fill a niche for lawyers and law firms that banking experts say is neglected. "He's got a huge base in the community of people who know and respect him," says Mike Hennigan of Hennigan, Bennett & Dorman, a bank investor. "If anyone will be able to build a bank out of this community, it's Alan Rothenberg." Rothenberg has been off to a good start. To get his bank off the ground, Rothenberg hit the pavement and personally solicited 450 investments, generally from friends, associates and colleagues. "Significant investments came from my friends and colleagues, so I have a huge sense of responsibility to do everything I can to make the bank a success," Rothenberg says. John Emerson, president of Capital Guardian Trust Co.'s personal investment management division, says Rothenberg's reputation enticed him to invest, and he hopes it will attract customers, as well. "He has a wealth of friendships and relationships to people who cut across the business world and the spectrum of L.A." says Emerson, touting Rothenberg's can-do attitude. "He's keenly aware of meeting clients' needs but obviously in a way that's responsible to the bank's shareholders." Hennigan says he's banking on Rothenberg's reputation for business success. As long as Rothenberg was going to be actively involved in the operations of 1st Century, Hennigan was willing to invest, he says. Rothenberg's $34 million fund-raising drive generated so much interest that the bank raised more money than federal regulators allowed - and had to give $7 million of it back. Among the legal notables on the bank's 108-member founders list are Randall C. Bassett and Paul Tosetti from Latham & Watkins, Kendall R. Bishop from O'Melveny & Myers, Alan Browne from Browne & Woods and Steven Burkow from Ziffren, Brittenham, Branca, Fischer, Gilbert-Lurie & Stiffelman. Additional founders include Scott M. Kalt of Jeffer, Mangels, Butler & Marmaro and Charles T. Mannatt from Mannatt, Phelps & Phillips. Rothenberg says he opened the community bank to promote personal service to midsize businesses generally neglected by large banks. 1st Century also will serve as a private bank for business professionals. "We're not targeting Fortune 500 companies. The megabanks take care of them," Rothenberg says. "But we're not looking for regular consumers either." Richard S. Cupp, 1st Century's president, declined to disclose names of specific clients, saying that divulging that information without the client's permission would be improper. Rothenberg's understated Century City office features photos of the attorney with George Bush Sr., Bill Clinton, Oprah Winfrey and even Pope John Paul II. The shelves behind his desk are filled with souvenirs from international travels and soccer memorabilia signed by sports legends like soccer star Pelé. Rothenberg grew up in Detroit, where he and his wife, Georgina Rothenberg, a sculptor and jewelry designer, met in junior high school. He says he's never lost his Midwestern sensibility. Personal relationships are a key to business success, according to Rothenberg. "When you ask people who their banker is, they stare at you and say, 'You know, I don't really know,'" Rothenberg says. Banking and investment specialist Jean Tardy-Vallernaud, managing director of JTV Financial Source, a private investment firm in Santa Monica, says 1st Century's goals set it apart from the pack. Lawyers as a specific industry can be hard to serve, Tardy-Vallernaud says, but profitable if a bank does it right. For five years, Tardy-Vallernaud was the managing director for the private banking division of Citibank in Los Angeles. At Citibank, which has marketed its services to the legal community for 30 years, Tardy-Vallernaud served the financial interests of 2,000 lawyers and 100 law firms. Tardy-Vallernaud says billable hours give the legal community more time constraints than other small businesses. Ideas like extended business hours, lunch meetings or bringing banking services to an attorney's office, so as not to interfere with billable time, are important when serving the legal community, he says. Rothenberg says 1st Century plans to offer all these services. The bank also will provide credit lines to firms and partners and fund capital to law firms. Rothenberg says serving the legal community is not necessarily difficult if a bank understands its clientele and is committed to their needs. He notes that the large banks that serve law firms target only larger "megafirms," the highest tier in the legal market. "Some large banks have active programs, but pretty much targeted primarily at the megafirms, not medium or small firms, local offices of out of town firms or sole practitioners. We will," Rothenberg says. "Our unique knowledge of the profession enables us to understand firm, individual partner and associate needs as well as clients." Larry Feldman, partner with the Century City office of Kaye Scholer, is not a 1st Century investor but says he thinks the bank is a great idea. "Other banks have tried it in the past and have had success," Feldman says. "Catering to law firms, lawyers and other business professionals is a real niche in the banking industry." According to its 2003 report to banking regulators, the bank's typical loan customer will be businesses with secured credit needs of less than $2 million - in other words, small businesses that don't need large loans. Rothenberg says he realized the idea to create a community bank struck a chord when the bank raised too much startup capital in just a month - over the holidays. "December 23 is not the best time to be asking people for money," Rothenberg says. But by late January, with $34 million, the bank was oversubscribed. 1st Century's goal was to raise between $19 million and $22 million, and the bank had to get special regulatory permission to increase its objective to $26.4 million. The Office of the Comptroller of the Currency, a regulatory body much like the Securities and Exchange Commission, allows for a 10 percent to 20 percent overallocation when a bank makes its initial public offering. Anything more than that amount would mean writing a new prospectus and refiling the application, so the bank returned $7.4 million in additional funds to investors. Tardy-Vallernaud says that, in the past, community banks with startup capital of $7 million to $12 million have been seen as a force to be reckoned with, so 1st Century is off to a good start. Rothenberg called on his old firm, Manatt, Phelps & Phillips, for legal work to help get the bank off the ground. Partners Mick Grasmick, Craig Miller, Jeff Mannistow, Marty Steere, and associate Renee Rayfield worked on the matter from Manatt. Paul Irving, managing partner for the Los Angeles office of Manatt Phelps, says that Rothenberg was integral to the development of the firm's litigation practice and that the firm is happy to have 1st Century as a client. "It's sort of a homecoming for Alan, and we were pleased to have the opportunity to do work for him," Irving says. Rothenberg isn't a newcomer to the world of finance. In 1973, he was an organizer and sat on the board of directors of First Los Angeles Bank, which was sold to an Italian bank, Istituto Bancario San Paolo di Torino, for $56.1 million in 1982. Rothenberg was also a board member for the Bank of Newport from 1974 to 1993. Rothenberg has created a diverse board of directors for 1st Century, something he's been known for in other business ventures. Richard S. Cupp is serving as the bank's chief executive officer. He has 40 years in commercial lending experience and has served as an executive at First Interstate Bancorp and California Federal Bank. The bank's board includes Christian Bement, president and CEO of Earl Scheib Inc., which has 126 auto paint shops in 25 states; Dave Brooks, president and CEO of Mara Escrow Co. of Beverly Hills; and Joanne Corday Kozberg, regent of the University of California and partner-in-charge of the Los Angeles office of California Strategies, a public affairs consulting firm. "1st Century Bank as a startup is very significant," Tardy-Vallernaud, who is not an investor, says. "It will have a competitive advantage if only from the strength of the people that have backed it up so far in terms of capital. It is already very well connected." Rothenberg retired from Latham & Watkins four years ago, but, at 65, his career hasn't slowed.

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