Luther Burbank Savings did more than just remain profitable during the most severe economic collapse since The Great Depression.
Sonoma County's largest financial institution has prospered and is now set for expansion. The Santa Rosa savings bank has more than doubled its asset size in the past five years, and is currently engaged in a significant expansion into affluent areas of Los Angeles.
This marks the second time in the bank's nearly 30-year history that it has continued growing at a time when other community lenders were plagued by major problems. The first was in the mid 1980s, when savings and loan banks collapsed during what is now commonly referred to as the S&L crisis.
Then in 2008, as global financial markets froze and the government pledged nearly $1 trillion to rescue the distressed industry, Luther Burbank Savings posted a record annual profit of $48 million.
It continued on that path last year, notching $44 million in profit and growing its assets 12 percent to $3.5 billion.
How did Luther Burbank avoid the pitfalls of this recession? By sticking to conservative growth and developing a niche approach to lending, executives and analysts say.
During the boom years, profits often lagged competitors who dabbled in riskier markets. But to Vic Trione, who co-founded the bank with his brother Mark in 1983, a steady approach has always been the goal.
"We are in the business to make loans and take savings," said Trione, who is chairman of the bank. "We can't lose sight of the fact that is our primary focus."
Savings and loan banks tend to focus more on holding people's money long-term than on helping clients manage their day-to-day cash flow with credit cards and checking accounts. Luther Burbank Savings does not have any ATM machines, and it only has six branches.
"They are the quiet financial giant of our area," said Fred Ptucha, who tracks local community banks and is an adviser at Financial West Group in Santa Rosa.