When he was a boy and his father would return home after another long day at the family's bank, Henry Walker would ask, "Did you make any loans today?"
After that topic was exhausted, Walker recalled, it might be time for a fatherly quiz on percentages.
Some, perhaps, are born bankers, while others have banking thrust upon them. For the descendants of C.J. Walker, a rancher who founded Farmers & Merchants Bank in 1907, it's hard to tell the difference.
The family-operated Long Beach bank this month named 42-year-old Henry, C.J.'s great-grandson, as its new chief executive. Henry's brother, Daniel, 54, who keeps an eye on the family's ranching interests, remains chairman of the bank.
In becoming CEO, Henry succeeded the brothers' 81-year-old father, Kenneth, who held the post for 29 years. Kenneth is staying on as president of Farmers & Merchants' main office on Pine Avenue in downtown Long Beach -- a fitting place, Henry said, for an entrepreneur who always has been close to his customers.
"My father is an amazing man, someone who would work 15 hours a day, seven days a week," Henry Walker said.
But now that Farmers & Merchants has 22 branches in Long Beach, the South Bay and Orange County, and $3 billion in assets, up from a few hundred million when his father started, Henry said, "It takes a deeper management team, a deeper structure."
Not that things ever really change much at Farmers & Merchants, which has the same brass doors and teller cages installed at the main office when it opened in 1922. A stuffed cougar looks down from a balcony perch.
Shot between the eyes in 1929 by Henry's grandfather, the mountain lion is a reminder of family history, as are Henry's horse-head cuff links, a gift from his father. The equestrian tradition is also reflected in an obsession with polo: Henry, his brother and his nephew Matthew compete in high-level matches in Santa Barbara and internationally.
The constancy at Farmers & Merchants is such that one rival, insisting on anonymity, said that some things many banks would consider boringly conventional were "a little out there" for the family-run financial institution.
Like most community banks, Farmers & Merchants is mainly a commercial real estate lender. But unlike many others, it won't lend money to a business based solely on its cash flow, no matter how strong. Unless you are an exceptional longtime customer, don't try borrowing more than 50% of the value of the commercial property you pledge as collateral.
"Most community banks are over-lent," Henry Walker said. "We lend money very efficiently, very cost effectively, and we wind up with what we think are the best borrowers in Southern California."
The bank makes some residential mortgages -- for no more than 65% of a home's value -- chiefly as an accommodation for commercial customers who simply would rather not deal with other lenders.
Farmers & Merchants also maintains the highest financial cushion against loss of any bank in the region -- more than three times the capital required, demonstrating a lesson learned in the 1930s. The Great Depression forced the family to sell much of its land, but the bank stayed strong enough to weather the storm, even while suspending foreclosure proceedings to support customers after the devastating Long Beach earthquake in 1933.
The bank's oversize reserves are a comfort factor, especially with the sluggish economy likely to stretch many community banks' resources.
"My brother and I were raised first and foremost with the rule: You safeguard customers' deposits," Henry Walker said.
Whether that institutional caution had been overdone became a sticking point four years ago when a family faction led by Marcus Walker, another C.J. Walker great-grandson, began rattling the old teller cages.
Marcus Walker suggested using some of Farmers & Merchants' treasure hoard to bankroll more loans and pay a higher dividend. He also lobbied for the bank to split its stock, then trading for about $4,800 a share, to make it easier for new investors to purchase. And he filed a lawsuit in Orange County Superior Court, accusing bank management of not acting in the best interests of all the stockholders.
The bank recently settled the lawsuit by buying all 5,827 Farmers & Merchants shares -- a nearly 4% stake -- owned by Marcus Walker, his immediate family "and certain of his related and affiliated parties" for $7,300 a share, or $42.5 million. Marcus Walker didn't respond to requests for comment.
Henry Walker dismissed the faction as "not really much of a branch of the family; more like a couple of leaves."