It was for the love of politics, not money, that JP Gough started Orange County Business Bank in 2002.
After running an unsuccessful, uphill campaign in 2000 against Dianne Feinstein for a U.S. Senate seat,and wiping out much of his own wealth in the process,Gough tapped campaign supporters to help fund the then-startup bank during the recession of the early 2000s.
Since then, the bank has grown into a cornerstone of local business banks.
The chairman and chief executive of the Newport Beach-based bank was one of seven entrepreneurs honored at the Business Journal’s annual Excellence in Entrepreneurship award luncheon held March 18 at the Hyatt Regency Irvine.
Gough, a former bank consultant, said he used his knowledge of the business to raise money at a time when many said he would never make it. Orange County Business Bank went public in 2002.
Despite the recession and bear market of 2002 that made it harder to sell shares, he pushed on without the aid of an investment bank.
A large Rolodex of some 300 contacts built during his campaign came in handy for raising money, he said.
In all, he pooled together $40 million in 100 days from 18 handpicked investors. But regulators would only allow him to use $20 million of it.
The fundraising was the largest on record for a bank in the state at the time, Gough said.
“People believed in me,” he said. “It came down to having a good business plan and having my own skin in the game.”
Gough is the largest shareholder of the bank.
Since then, the bank has grown to $250 million in assets, lending mostly to local businesses.
Becoming an entrepreneur wasn’t a planned event, according to Gough.
Coming from a family of civil servants he says there’s nothing in his background that pushed him to start his own bank.
“My family has a negative perspective of business,” he said. “I had to fight a lot of those negative subliminal plants.”
Working at The World Bank out of college opened his eyes to business, Gough said.
After a two-decade career as a banking consultant for Deloitte & Touche LLP, Gough said he wanted to start a bank from a clean slate.
“I got tired of fixing problems for other banks,” Gough said. “It was also frustrating when people wouldn’t take my advice.”
So with fresh capital to build a loan portfolio the way he wanted, he set out to do things his own way, taking lessons learned from his previous career.
Gough likes to work only with business owners who are in control and efficient. He avoids those who have to run things through committees.
“That’s a common denominator for making good decisions,” he said. “Accountability is a major influence factor on a decision.”
Like many local bankers, Gough didn’t get caught in the backlash of bad home loans and a frozen secondary market that have crippled many larger national banks.
As of the end of last year, less than 1% of Orange County Business Bank’s assets were bad, according to government data.
“Simplicity is the best way to do banking,” he said.
Gough takes an active and somewhat unique role in the bank’s marketing by writing articles, speaking publically and networking.
“I’ve worked with 500 banks in my career and can tell you it’s uncommon for the chief executive to be active in marketing,” he said.
But Gough sees his involvement as a selling point for potential customers to take the bank more seriously.
He has also advised members of Congress on his industry.
Outside the office Gough has stayed busy by competing in amateur biking in the U.S. and Europe. He has since traded a bike in for a horse to compete in local polo matches.
