The tale of commercial banking in Orange County has become one of size.
At the top of the pecking order, the big national banks have settled into expanded or newly forged local empires.
The top tier of this week’s Business Journal list of the largest banks operating in the county showed only subtle change from last year, when it saw some dramatic shifts.
As a group, the 30 largest commercial banks had $63.9 billion in deposits for the 12 months through June, up 10% from a year earlier.
The list is based on data from the Federal Deposit Insurance Corp. with changes by the Business Journal to reflect any acquisitions.
The top 10 banks on the list make up about 85% of the deposits. The top five make up about 70%.
Last year’s horse race between Bank of America Corp. and Wells Fargo & Co. for the No. 1 spot was less of a photo finish this year with BofA handily regaining the top spot.
Last year at this time, San Francisco-based Wells Fargo displaced longtime No. 1 BofA with the late 2008 acquisition of Wachovia Corp. The deal gave Wells Fargo $14.06 billion in local deposits, just ahead of Charlotte, N.C.-based BofA at $14.03 billion.
This year, BofA tops the list with $16.2 billion in local deposits, an 18% gain from a year earlier.
Wells Fargo posted a sizable but more modest 5% gain to $14.8 billion in deposits.
BofA attributes its big gain to banking customers converted from its 2008 acquisition of Calabasas-based mortgage lender Countrywide Financial.
The bank also may have gained banking customers from its Merrill Lynch & Co. acquisition, which closed in early 2009.
“The bank has worked hard at identifying world-class opportunities to bring in,” said Greg Mech, OC market president and regional managing director for global wealth management at BofA. “We’ve built a pretty strong model here across all categories of financial services.”
Integration of Countrywide and what’s now Bank of America Merrill Lynch are ongoing, according to Mech. It could take until next year to get all of the bank’s employees completely synchronized, he said.
A year ago, commercial banks here added some $11 billion in deposits after taking over failed savings and loans.
The consolidation brought a big newcomer to local banking: No. 3 JPMorgan Chase & Co.’s Chase Bank, which took over failed thrift Washington Mutual Inc. in late 2008.
Chase saw a 23% drop in local deposits to $6.1 billion, likely the result of people withdrawing cash from struggling Washington Mutual before the Chase takeover.
Chase executives are bullish, saying they haven’t been in the market long enough to maximize all of their commercial banking services, which far outnumber what WaMu had offered.
U.S. Bank
Minneapolis, Minn.-based U.S. Bancorp’s U.S. Bank held the No. 4 spot with $4.3 billion in deposits, a gain of 31% from a year earlier.
Last year, U.S. Bank moved up from the No. 16 spot with its late 2008 takeover of Newport Beach-based Downey Financial Corp.’s failed savings and loan.
Also in 2008, U.S. Bank acquired Rancho Cucamonga-based PFF Bancorp Inc.’s PFF Bank & Trust and Los Angeles-based Mellon First Business Bank.
U.S. Bank’s deposit growth for the 12 months through June was helped by last year’s buy of Idaho’s First Bank, which had three banks in California and about $1.6 billion in OC deposits. (The No. 16 First Bank on our list is based in Clayton, Mo.)
“As the largest of the large banks couldn’t absorb more, we had the capital to make deals,” said Bill Cave, U.S. Bank’s regional president in Irvine. “Now we’re focused on building more organically, although we intend to remain opportunistic.”
No. 5 Union Bank also was among the big gainers with a 33% rise in local deposits to $3.9 billion.
“We’ve had a strong influx in deposits in the past 12 months as businesses in Orange County continue to look for safe banks to put their money into,” said Scott Connella, executive vice president for Southern California commercial banking at Union Bank.
The San Francisco-based bank, part of Japan’s Mitsubishi UFJ Financial Group Inc., received $2 billion from its parent company last year to pursue acquisitions and boost reserves.
Citigroup Inc.’s Citibank held the No. 6 spot with a 15% jump in deposits to $2.9 billion.
Next was No. 7 Los Angeles-based City National Corp.’s City National Bank with $2.7 billion in local deposits, up 58% with its late 2009 takeover of La Jolla’s Imperial Capital Bank.
Bank of the West
No. 8 San Francisco-based Bank of the West, part of France’s BNP Paribas, broke into the top 10 with a 35% deposit gain to $1.4 billion. Bank of the West ranked No. 12 a year ago.
No. 9 San Diego-based California Bank & Trust, part of Zions Bancorp of Salt Lake City, saw an 11% drop in deposits to $1.4 billion.
The drop cost California Bank & Trust a spot in the rankings from last year and came despite last year’s acquisitions of Culver City-based Alliance Bank and Rancho Cucamonga’s Vineyard Bank.
“We’re pausing right now to work through those acquisitions and merge those assets,” said David Blackford, California Bank & Trust’s Irvine-based chief executive.
Gaining ground was No. 10 Long Beach-based Farmers & Merchants Bank. Known for its conservative lending, the family run bank jumped up from No. 13 last year. It saw a 30% gain to $1.3 billion amid a rush to safety by depositors.
Perhaps the busiest bank on the list was a local: No. 17 Tustin-based Sunwest Bank.
It made three smaller purchases of failed banks, expanding its deposits to $506.4 million, a 128% gain from a year earlier.
That was good enough to move Sunwest from No. 29 a year ago.
The list’s highest ranking bank based in the county is No. 12 Pacific Mercantile Bank of Costa Mesa, which saw a 21% rise in deposits to $716 million.
