Orange County’s homegrown batch of commercial banks continued to gain assets during the past year,just at a slower pace than a year before.
The 14 OC-based banks posted asset growth of 26% to $2.4 billion in the 12-month period ended June 30, according to this week’s Business Journal list.
The list ranks all banks with OC headquarters by assets. Assets, which include cash, loans, real estate and securities held by the bank, are taken from Federal Deposit Insurance Corp. data.
“There’s a lot of money from Asia flowing into California banks,” said Ed Carpenter, chief executive of bank consulting firm Carpenter & Co. in Irvine.
Why California’s banks? “Because they’re closest to Asia,” he said.
While asset growth was solid in the past year, it didn’t keep pace with the 44% growth posted by last year’s crop of banks.
Growth is a product of several factors. For one, many of the county’s home banks have been formed in the past few years and are growing assets from a relatively small base. As they mature, it’s not surprising that asset growth slows.
OC banks also have seen a surge in deposit growth as investors and companies kept their cash safe from volatile stock markets and a sagging commercial real estate market. Banks lend money based on the size of their deposit base.
Meanwhile, OC banks’ non-performing assets,loans where banks can’t collect payment,remained undetectable for the most part.
“Banks here have some of the lowest non-performing asset ratios ever,” Carpenter said.
The consolidation that characterizes the national banking scene has played out here in the past year. Four banks were bought and dropped off this year’s list.
None of the 14 banks on the list saw a decline in assets in the past year. Nine banks saw a double-digit gain and one had a triple-digit gain. Two banks,No. 11 Uniti Bank in Buena Park and No. 12 Orange County Business Bank in Newport Beach,nearly doubled assets from a year ago. One,No. 10 Commercial Bank of California in Costa Mesa,nearly tripled assets.
Topping the list again was No. 1 Costa Mesa-based Pacific Mercantile Bank, which grew assets to $789.9 million, up 22% versus a year earlier.
The seven-branch bank has targeted downtown Ontario for expansion. The bank opened a branch in Long Beach in September.
“The Inland Empire is the fastest growing market place in Southern California,” said Ray Dellerba, chief executive of Pacific Mercantile.
There was quite a bit of upheaval among the top banks, thanks in part to the departure of Orange’s Bank of Orange County, which was bought by Placer Sierra Banshares in Sacramento.
Taking Bank of Orange County’s No. 2 spot was Tustin-based Sunwest Bank, which grew assets 6% to $303.4 million, versus a year ago. Sunwest saw some changes in top management with interim Chief Executive Irving Beimler taking over from Marshall Laitsch in August.
Buena Park-based Los Angeles National Bank moved up two spots to No. 3 with $197.8 million in assets, up 9% versus a year earlier.
No. 5 Anaheim-based Premier Commercial Bank grew assets 34% to $128 million.
“Management is pleased with these accomplishments during a period of historically low interest rates, which tend to depress the bank’s margins and net yields,” said Ash Patel, Premier’s chief operating officer. “As we appear to be in the initial stage of a general increase in rates, we anticipate that our margins and subsequent profitability will be positively impacted.”
Another big gainer was Commercial Bank of California, which grew assets 175% to $103.2 million. Commercial Bank moved up six spots to No. 10 and hit the $100 million mark in assets a little more than a year after it opened its doors.
Reaching that number was
a goal of bank founder
and Chief Executive Bala Balkrishna. Commercial Bank opened last year with some
big investors, including William Lyon, chief executive of Newport Beach-based William Lyon Homes Inc., and Paul Folino, who runs Costa Mesa-based Emulex Corp.
Uniti Bank, which targets North County’s large Korean American community, saw a 95% boost in assets to $102.7 million.
One notch below at No. 12 was Orange County Business Bank, which reported 97% growth in assets to $71.1 million this year.
Net income for the 14 banks grew to $8.4 million versus $6.8 million a year earlier. OC employees grew 5% to 519 workers.
Along with Bank of Orange County, others dropping off the list were Santa Ana’s PriVest Bank, which was bought by Newport, Minn.-based American Bancshares Inc.; Newport Beach’s Harbor National Bank, which was acquired by Rancho Santa Fe-based First Community Bancorp; and Fountain Valley’s Centennial Bank, which was bought by Richmond, Va.-based LandAmerica Financial Group.
