Irvine’s Nano Banc, one of Orange County’s fastest-growing financial institutions since its founding in 2018, has overhauled its executive team and board following a period of heavy regulatory scrutiny.
The community-focused commercial bank, which has touted its tech-heavy software platform as way to do business more efficiently than its peers, in late July announced R. Scott Racusin as its new chief executive, Mary Lynn Lenz as chairman of the board, and Steven Buster as board vice chair.
The new hires count expertise in, among other things, “building private and national banks from the ground up to ensure regulatory obligations are met,” and “rebuilding financially and regulatory-troubled banks,” the institution said when announcing the execs.
“I believe in Nano Banc’s potential to deliver a premier community banking experience for customers and shareholders alike,” Racusin said in a statement.
“The past is behind us, and the future looks bright as the new board and I aggressively focus on forging a new future,” he said.
Rocky Period
That “past” includes censure letters from regulators for both the bank and its founding management.
Last January, the bank received an order from the Federal Reserve to hire a new chief executive, chief financial officer and chief credit officer.
It also required the bank to achieve the minimum number of directors required under applicable state law, with a majority being outside directors.
The bank received a similar order last December from the California Department of Financial Protection.
Regulators in the past year have criticized the bank’s governance, staffing, and lending practices, especially in commercial real estate.
Nano Banc ranked No. 6 on the Business Journal’s most recent list of banks headquartered in Orange County; it reported $1.3 billion in assets for the period ended June 30, 2021, up 13% from a year before.
Its current level of assets hadn’t been disclosed as of press time; LinkedIn pages of the bank’s new exec team indicate it now has about $1.2 billion in assets.
New Team
Racusin has more than 39 years of experience in risk management, regulatory relations and banking technologies. Most recently, he was a CEO and founding board member of Robinhood Bank, whose parent company is $8 billion-valued Robinhood Markets (Nasdaq: HOOD), which is known for commission free trading of Wall Street stocks.
He was also CEO and a board member of Carson-based Merchants Bank of California NA and CEO of Wedbush Bank.
New Chair Lenz’s resume includes four decades in financial services, most recently as CEO of Foothills Bank, an Arizona-based division of Glacier Bancorp (Nasdaq: GBCI). Her LinkedIn profile touts her expertise turning around troubled banks. She was CEO of Pasadena-based Professional Business Bank, which was a distressed, private equity owned $239 million commercial bank. She successfully recapitalized it, sold it to California General Bank and then merged it with Bank of Manhattan in 2012.
At Slades Bank in Massachusetts, she turned around a $420 million publicly traded bank that was under FDIC disciplinary status.
Vice Chair Buster brings a 35-year career in banking, including five years in London with First Interstate Bank’s international and capital markets group, and five years in Singapore with London-based Standard Chartered Bank.
He was also a former CEO at Pacific Mercantile Corp., which last year was acquired by Banc of California (Nasdaq: BANC).
The bank touted Buster’s “perspective in guiding high-growth companies,” among his key attributes.
The new bank executives weren’t ready to publicly discuss their plans, a spokeswoman told the Business Journal.
Board Additions
In addition, Nano Banc recently announced the following board members:
n Lynn McKenzie-Tallerico has over 40 years of experience in the banking industry. She served as national advisory partner for Regional and Community Banks for KPMG LLP, helping to coordinate all advisory services to one of the largest industry segments, such as strategy and finance.
n Jim Gray, who sold his car dealership in 1991, co-founded Harbor Bank, headquartered in Long Beach in 1974. He served as chairman of the board and CEO from 1976 until the sale of Harbor Bank to City National Bank in early 1998. Gray also founded Generations Trust Bank and served as chairman until its sale to Union Bank in 2002.
Three Bankers
Nano Banc was founded by Mark Rebal, who became chief executive; Mark Troncale, who became president; and Anthony Gressak, who became chief credit officer.
The trio had worked together at California Republic, which was founded in 2007 and acquired for $330 million by Mechanics Bank in 2016.
Nano’s chairman was Randy Rector, owner of Irvine’s Realty One Group West and HomeSmart Evergreen Realty, which offers real estate escrow services through its in-house company Escrow Options Group Inc.
In 2017, the three co-founders raised $71.7 million in equity capital to acquire commercial banks in Southern California. In May 2018, they bought Commerce Bank of Temecula Valley for $23.3 million and renamed it Nano Banc. At that time, the bank had $60 million in loans and deposits.
Troncale is the only remaining founder still working at the bank. Rebal, Gressak and Rector are no longer affiliated with it.
Cracks in the bank’s operations began to emerge last year.
Early in 2021, a state banking agency, as well as the Federal Reserve, told the startup to slow down and make sure all the proper checks and balances were in place. The agencies questioned whether the bank was adequately staffed, and if its board of directors was receiving the appropriate information.
Last December, the bank placed two executives on administrative paid leave, named a new chief executive and chairman and replaced six directors with five new ones, according to the California Department of Financial Protection.
The agency didn’t like the move and issued a “cease-and-desist order” regarding the changes, saying the bank allegedly violated a February 2021 order requiring it to provide 30 days advance notice before appointing any new directors or executives.
The state agency rarely issues such orders.
