For three years, Tom Vertin made a long commute to his job at Costa Mesa-based Pacific Mercantile Bank.
San Jose to John Wayne Airport to be exact.
The commute was cutting into the personal life of the 65-year-old chief executive, who earlier this year married Bay Area resident, Sahba Shere.
“We want to live our daily lives together and bring an end to the commuting,” Vertin told the Business Journal.
Thus, Pacific Mercantile (Nasdaq: PMBC) last week named Brad Dinsmore as chief executive, effective Sept. 3, succeeding Vertin.
Dinsmore knows Orange County well, having served as the Orange County market president of Bank of America.
“Tom was instrumental in guiding our transition to a relationship-focused commercial bank and improving the composition of our loan and deposit portfolios,” Ed Carpenter, chairman of the board at Pacific Mercantile, said in a statement.
Silicon Valley Techniques
Vertin, who previously worked at Silicon Valley Bank, joined Pacific Mercantile in 2012 as president of commercial banking and then as chief executive beginning in 2016.
Vertin has changed the bank’s focus from funding transactional real estate to lending to operating companies, where he seeks the entire relationship of loans, deposits, and treasury management.
His secret sauce included a program developed in-house called Horizon Analytics. He employed former employees from Silicon Valley Bank to design the program to provide detailed financial information to companies with annual sales of $10 million to $70 million. The program uses a combination of publicly available information with financial analysis techniques that are typically available only to larger companies.
The program helped convince business clients that the pricing for loans and deposits was less important than the financial information provided by Pacific Mercantile.
Non-interest bearing checking accounts, which every bank is trying to obtain because it improves the profit margin, soared from $172 million in 2012 to $378 million as of June 30.
Certificates of deposits, often an expensive method for a bank to attract deposits, fell from $492.8 million in 2012 to $258.9 million as of June 30.
The bank’s overall assets have risen from $1.05 billion in 2012 when Vertin joined the bank to $1.42 billion as of June 30, the latest publicly available information. It ranked fifth among OC-based commercial banks by assets as of mid-2018.
Analysts approved of Vertin switching the bank from a reliance on mortgages to a focus on relationships with operating companies.
“Mr. Vertin is leaving in order to move to Northern California; we wish him well,” Keefe, Bruyette & Woods analyst Jacquelynne Bohlen wrote to investors.
During Vertin’s run as CEO, shares of the thinly traded company ranged from $7.14 when he started to higher than $10 a year ago. Its shares last September fell to below $8 after Carpenter, the bank’s biggest shareholder, was forced to sell s large stake in a block sale for $8.25 a share due to the closing of one of his funds.
Shares of Pacific Mercantile fell 5.1% to $7.30 and a $172 million market cap in the four trading sessions after the announced departure of Vertin.
The New Guy
Dinsmore has 32 years of banking experience, including time as a corporate executive vice president at SunTrust Bank and as head of retail banking at Citibank.
Dinsmore, who has lived in Coto de Caza, has worked with Southern California community organizations including University of California-Irvine’s Chief Executive Roundtable and United Way of Orange County.
“We believe Mr. Dinsmore’s history, specifically in the Orange County and Los Angeles markets, will help to smooth the transition period as he assumes his new role with PMBC,” Bohlen told investors.
Bank Notes
Other notable OC banking news:
• Jared Wolff, who began as Banc of California’s new CEO in March, named a longtime colleague, Robert Dyck, as incoming chief credit officer.
Dyck was chief credit officer of the community banking division at PacWest Corp., where he worked with Wolff for more than a decade. Dyck replaces Kris Gagnon, who is scheduled to retire early next year.
The Santa Ana-based bank (NYSE: BANC) also nabbed a couple veterans from Wells Fargo: John Sotoodeh was named chief of the community and business banking division, and Hamid Hussain was picked to lead the real estate and commercial division.
• Mechanics Bank, which has significant operations in Irvine, completed its $2.1 billion acquisition of Rabobank to make it the fifth largest based in California. The deal was originally announced last March.
John DeCero, who was chief executive at Mechanics Bank, will now share the title with Mark Borrecco, former CEO of Rabobank.
The new entity, which operates under the Mechanics Bank name, has more than $17 billion in total assets and 144 branches.
