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Local News

Janet Garufis Keeps Her Bank and Herself On a Steady Course

Amid ups and downs of life and lending, the Montecito Bank & Trust CEO relishes community experience

Ralph Waldo Emerson once wrote, “The whole of what we know is a system of compensations. Each suffering is rewarded; each sacrifice is made up; every debt is paid.”

Janet Garufis, president and CEO of Montecito Bank & Trust, knows all about the dichotomy of suffering and reward.

In September 2006, Garufis was promoted to the bank’s top spot from executive vice president of sales. A few short months later, she lost her husband, Nick, who had battled Parkinson’s disease for several years.

Toward the end, her husband had developed dementia, which is seen in about 20 percent of Parkinson’s patients. Garufis remembers with a fond laugh the day she received her promotion, and her husband declared proudly, “I always knew you would be the president of the United States someday!”

While he may have been slightly off the mark, the accomplishments of both Garufis and Montecito Bank & Trust are no less impressive. Many banks these days are scrambling under TARP conditions, and attempting to absorb the blow of the recent economic downturn, but Montecito Bank & Trust is thriving, due in no small part to Garufis’ leadership. The humble CEO takes little credit for the community bank’s resiliency, however, attributing it mostly to owner and sole shareholder Michael Towbes.

“Our success mostly has to do with Mike Towbes’ business acumen and long-term investment point of view,” said Garufis, who has more than 30 years of experience in banking, and is very close to receiving her Ph.D. in education/composition from UCSB. “Because we’re privately owned, we don’t have to feel pressured to go to the Street (Wall Street) with 20 percent growth every quarter.”

According to Garufis, being a privately held bank with a single shareholder gives MB&T several advantages over larger, corporate banks, especially when it comes to lending.

“Lending at ‘big box’ banks has become further and further disconnected from the actual clients,” Garufis said. “In community banking, the character of the client plays a much more traditional role. We’re not just about the bottom line as much as, say, a Bank of America.”

She would certainly know, after having spent seven years in the 1990s as a senior vice president at Bank of America.

One pitfall that MB&T managed to avoid in the past several years is that it never leveraged itself for a big construction-lending portfolio. While a lot of banks were making huge construction investments during the boom years, MB&T kept a very balanced lending portfolio, with commercial real estate at its core, but also an expanding consumer and nonprofit lending edge. This well-balanced, conservative lending approach is one of the reasons that MB&T is still growing, while other banks are attempting to recapitalize.

“Sometimes banks push the edges of the envelope, and they end up taking too large a risk,” Garufis said. “We’re expanding, but we do it in a practical way. A slow and steady, disciplined approach is paramount to success.”

That success has allowed MB&T to be instrumental in supporting local nonprofit organizations over the years. This is the seventh year the bank has run its annual “community dividends program.’‘

Each November, more than 100 local nonprofit organizations are invited to the Four Seasons The Biltmore, where the bank sponsors a daylong event at which each of the nonprofits, chosen from an application pool of a couple of hundred, is awarded a bank-certified check. The forum serves as a reminder to local businesses of what makes the Santa Barbara community so special and unique.

“The energy is quite remarkable,” Garufis said. “Mike (Towbes) tries to set an example for the rest of the community.”

As Emerson would surely note, this sacrifice has clearly been made up to MB&T in the form of steady growth, even during the current recession, aided in large part by the very businesses that it supports each year. The bank opened its first branch in Montecito in 1975. Today, it boasts eight branches, from Ventura to Solvang, and as it nears its 35th anniversary next year, Garufis and the rest of her staff look toward the future, as a bank, a state and a country.

“I’m starting to see little points of light everywhere shining through the recession,” Garufis said. “People are starting to feel a little bit better — but we didn’t get here quickly, and it won’t end quickly. California’s financial and political struggles are going to take some hard work, and I don’t think anyone can really predict an end.”

While the most sagacious pundits may not know when the economy will turn around, one thing seems clear: Montecito Bank & Trust is doing its part to facilitate the recovery process.

“We’re highly liquid, we have a lot of money to lend, and we invite people to come see who we are,” Garufis said.

Considering the job Garufis has done with Montecito Bank & Trust, perhaps president of the United States isn’t such a stretch after all.

— Kevin McFadden is a Noozhawk contributor.

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