Orange County-based commercial banks have notched the biggest year-over-year asset growth in the ongoing economic recovery and even since the few years prior to the recession.
The 23 banks featured on this week’s Business Journal list combined for a 35% increase in assets to $18.5 billion as of June 30. Nineteen banks’ asset bases increased, including 12 that logged triple-digit gains. Four banks reported decreases.
Banks on last year’s list had a combined asset growth rate of about 21%, following 4% and 26% in the two years prior. The 2007 and 2008 lists showed 11% and 12% increases, respectively.
This year’s entries also grew profits but at a slower pace. They combined for a 16% increase in net income to $77.4 million for the first half of the year. The list was split about evenly between those that posted profits and those that had losses. Banks on last year’s list had profit growth of more than 43%.
Local banks have added employees at a faster clip—8%—than the county’s year-over-year average of about 2%, to combine for a local workforce of about 2,332.
The list also includes various metrics to gauge banks’ condition, such as return-on-average assets, core-capital, and loans-to-deposit ratios. Those don’t affect the rankings but measure banks’ efficiency in using assets to generate profit and show their available equity capital.
Returns on assets for the first half of the year ranged from -2.48% to 1.46% and averaged 0.64%. The average for all U.S. banks was 1.01% for the same period, according to data from the Federal Reserve Bank of St. Louis.
All banks on the list had core-capital ratios above 5%, the threshold set by the Federal Deposit Insurance Corp. to be considered “well capitalized.” The average core-capital ratio on the list was 13.2%.
Seven banks had more loans than deposits, while the rest had loans amounting to between 48% and 99% of their deposits.
• Banc of California passed Opus Bank to become the biggest bank here by assets, with about $4.4 billion as of June 30, up about 109%, or $2.3 billion year-over-year.
The Irvine-based bank had about $16.1 million in net income for the first two quarters of the year, up about 46% from the same period in 2013.
Banc of California is the largest local employer on the list, with an OC workforce of about 645, up about 4% over the past year.
• Opus was No. 2 with about $4.3 billion in assets, up 36%. The Irvine-based bank had six-month net income of $23.5 million compared with $26.6 million a year
earlier.
Opus, headed by Chief Executive Stephen Gordon, has been growing various parts of its operations over the past year, including by expanding its healthcare banking unit and launching a correspondent banking division. It also recently opened a banking office in Portland,
Ore.
It has about 300 employees in Orange County, up about 7% year-over-year.
• Pacific Premier Bank was No. 3, with $1.9 billion in assets, a 23% increase.
Chief Executive Steven Gardner said the bank has been growing organically and through acquisitions.
“The existing businesses that bank with us, as they grow, we grow with them,” he said. “And we have a strategy of growing through acquiring other banks and lines of business throughout Southern California.”
Pacific Premier recently announced that it’s buying Newport Beach-based Independence Bank. The deal is not reflected on the list, and Independence is listed separately at No. 11 with $408 million in assets, up about 47%. Independence had about $1.8 million in net income for the first six months of the year, more than double its year-earlier total of $814,000.
n First Foundation Bank in Irvine moved up one spot to No. 4 with $1.2 billion in assets, up 30% year-over-year. It had about $4.6 million in net income, up 16%.
Chief Executive Scott Kavanaugh said the bank is getting more client requests for loan amounts, “which tells me that business is doing better. … At the end of the day, what I’ve seen overall is that business activity is picking up more across all sectors.”
Shares of First Foundation stock began trading on the Nasdaq exchange this month.
The company had a recent market capitalization of about $146 million.
• Some of the smaller banks that had double-digit asset growths included San Juan Capistrano-based Capital Bank, whose assets increased by nearly 33% to $208 million. U.S. Metro Bank in Garden Grove notched a 28% increase to $104 million.
• Orange-based First Security Business Bank was among the handful of entries with asset decreases. Its dropped by about 28% to $73.9 million, good for the No. 21 spot. First Security had $597,000 in profit in the first half of the year.
n Saigon National Bank in Westminster was No. 23, with $49 million in assets after a 5% decrease over the year. It had a net loss of $532,000.
