Tim Jorstad, principal of Jorstad Inc. in San Rafael, is a CPA who launched more than one bank, and worked as a receiver to turn around a large and struggling real estate company in San Francisco. Then there’s Jorstad’s little side career in the music industry, where he managed the Grateful Dead, Journey, the Doobie Brothers and many other artists, profiled in this week’s cover story.
You are chairman of AltaPacific Bank, based in Santa Rosa?
I’m happy to be headquartered in Santa Rosa. We’re a quiet bank, primarily a business bank. No car loans or consumer-related banking products.
Growth was primarily by word-of-mouth?
Yes. We established relationships with a group of builders. They have sustained us over a long time.
You co-founded AltaPacific?
Charlie (Hall, CEO) and I started the bank after we sold Business Bank of California in 2004 (to Union Bank). We had to be 15 miles as the crow flies from any branch. The Petaluma branch placed us in north Santa Rosa (as the closest place they could locate offices and compete in banking).
Assets of Business Bank of California were roughly $750 million when you sold?
They were. We got a very fortuitous offer from Union Bank.
What was the selling price?
We sold it for 3.25 times tangible book (value). The deal was over $100 million. Banks today aren’t getting those multiples and may never get them. They have to keep more capital on the books. But prices are finally normalizing, getting closer to the true value of a bank.
You already knew Charlie?
Charlie came to me. He was doing consulting for Focus (Business) Bank in San Jose before it started. (Focus, started in 2007, had about $390 million in assets in 2014, was acquired by Heritage Commerce Corp. for $54.8 million in 2015.) I didn’t think they had any intention of hiring him as CEO.
He was drifting there?
Yes. He was. I was providing help to him, thinking maybe I could get on the bank board. I wasn’t interested in starting another bank at that time, but banks were going huckleybuck in 2006. (“Hucklebuck” was a dance tune from Paul Williams, 1949, covered by many: “Everybody Huckle Bucking … jump back, jump up, jump back, jump up-up-up-up.”)
I watched Charlie spend all this time, wasting intellectual capital. I asked him if it was something he and I could do together (start a bank). He looked at me and slid a business plan over to me. He was just waiting. I had to figure out if I could raise the money, $15 million or $20 million. My role would be to recruit the board and raise the money. After one weekend, I had $15 million in pledges.
You went for it?
We needed four Santa Rosa directors. (Currently, the bank has Charles Hall, CEO, Petaluma; Randy DeCaminada, Cloverdale, former PG&E manager; Richard Dowd, Santa Rosa engineer and partner at Pinnacle Homes Land Development; Robin Goble, Windsor; and Joseph Zils, Santa Rosa, former JDSU executive.)
We hired Hedley Lawson (Aligned Growth Partners, former vice president, human resources, SOLA International, Petaluma). He brought Joe Zils and Dick Dowd. I was looking for directors who had the experience to be on a company that would grow to $1 billion. I limited the amount of money anybody could invest — $2 million.