Orange County-based commercial banks have recorded the biggest year-over-year increase in assets in more than 10 years.
The 20 banks featured on this week’s Business Journal list combined to grow assets by nearly 38% to $24.2 billion over the 12 months ended June 30.
That increase is the highest since 2003, when a group of 18 OC-based banks’ assets jumped 44% to $2.9 billion.
Banks’ asset growth is connected primarily to loan portfolios, while a range of items, such as cash, intangible assets and real estate, round out the total.
The banks’ combined assets got a boost from mergers and acquisitions activity over the comparison period. Some deals took place after June 30 and will be reflected on the list next year.
Our list ranks the banks by asset size. It also includes other information—such as net income for the first six months of the year, the number of local employees, and key indicators of the institutions’ health—though those statistics don’t figure into the ranking.
The entries had $107.9 million in profit for the six months ended June 30, up 44% from the same time a year earlier. They account for 2,563 jobs in Orange County, up 13% year over year.
All but one entry saw assets grow, and 14 of them notched double-digit increases.
• Banc of California Inc. topped the list again with $6.4 billion in assets as of June 30, up by $2 billion, or 47%.
Banc of California’s acquisition of the California branch network of Popular Community Bank helped boost assets over the past year. The deal, completed in November, added about $1.1 billion in assets to Banc of California’s balance sheet.
“We’ve been really pleased with and excited by the integration of the Popular branches,” said Banc of California Chief Executive Steven Sugarman.
“We’ve fully integrated them, retaining about 90% of the deposits, and we’ve been growing those deposits. … We look forward to continuing to grow our relationship within the North Orange County and South L.A. County market, where Popular had its branches.”
The Irvine-based bank had $34.3 million in net income in the first six months of the year, more than double the $16 million earned in the same period last year.
Banc of California has about 850 employees in Orange County after adding about 120 over the year.
• Opus Bank in Irvine was No. 2 with $5.8 billion in assets, up by $1.5 billion, or 34%. Its six-month profit totaled $28.6 million, up 21% year-over-year. It has 325 employees in OC, up about 26%.
• No. 3, Pacific Premier Bank, had about $2.6 billion in assets, up 37%.
The Irvine-based bank made a couple of acquisitions in the past year or so, including one during the list’s asset comparison period. It completed its $79.6 million buy of Independence Bank in Newport Beach in January and announced last month that it’s buying Riverside-based Security Bank of California for about $119 million. The deal is expected to buoy assets by about $730 million based on numbers as of Aug. 31.
• First Foundation Bank kept its place at No. 4 with $1.9 billion in assets, up nearly 61%. The bank is part of Irvine-based financial services company First Foundation Inc., which in August raised $131 million in a public offering.
Chief Executive Scott Kavanaugh said the bank’s growth is attributable to “a disciplined focus on providing excellent client service” and to the bank’s launch of new products, such as property and casualty insurance and specialty deposits.
“We’ve also grown by expanding into new markets like Hawaii, Oakland and the South Bay in L.A.,” Kavanaugh said. “We see great opportunity in those markets and great synergies between First Foundation’s approach and these communities.
“In addition … our discussions are oftentimes around our community involvement. People see us at community events, and they engage with our team over shared community causes. They want to do business with like-minded people who share similar passions for investing in the community.”
• Irvine-based California Republic Bank moved up a notch to No. 5, passing Pacific Mercantile Bank after growing assets by 56% and past the billion-dollar mark to $1.5 billion.
California Republic has about 230 employees in OC, up by 64, or 38%, the highest percentage increase on the list.
• Costa Mesa-based Pacific Mercantile—the only bank among the top 12 that isn’t based in Irvine—increased assets about 4% to $1 billion. It earned $1 million over the six months through June, down 30% year-over-year.
Pacific Mercantile Chief Executive Steven Buster said the bank has been working to turn its lending focus from real estate to technology and niche businesses, putting an emphasis on building relationships over making transactions.
• Irvine-based Plaza Bank moved up two spots to No. 7 with $1 billion in assets after a 95% increase, the biggest percentage gain on the list.
It swung to a loss of $109,000 in the first six months, versus a $2.2 million profit in the same period a year ago.
Plaza recently wrapped up its buy of Bank of Manhattan for about $70 million.
• We expect No. 12, Irvine-based Commercial Bank of California—which had about $320 million in assets as of June 30—to have about doubled its assets on next year’s list.
It’s set to be the surviving entity after buying National Bank of California in Brentwood. Commercial Bank said it would keep the headquarters here after the deal.
• No. 15, Orange County Business Bank likely won’t return to the list of locally based banks next year. It agreed in September to be sold to Seattle-based HomeStreet Inc. for $55 million.
