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Tuesday, Oct 3, 2023

OC Banks See Assets Climb 10% to $38.2B

Genesis, US Metro, Others See Strong Asset Growth

Banks headquartered in Orange County reported a healthy 10% increase in their assets to $38.2 billion.

This year’s growth compares to 3% in 2021 and 31% in 2020. While their assets climbed for the period ended June 30, they are preparing for a possible recession in 2023 (see story, page 24).

Thirteen banks made the list, down from 15 on last year’s list. A decade ago, 26 banks made the list but, with far fewer assets of $10.6 billion.

The two largest banks on the list accounted for about 82% of the total assets.

Irvine-based Pacific Premier Bancorp (Nasdaq: PPBI) accounted for more than half of the assets, $22 billion, a 7.1% jump from a year ago.

Santa Ana’s Banc of California Inc. (NYSE: BANC) boosted its assets 18% to $9.5 billion, aided by its acquisition a year ago of Pacific Mercantile Bank.

That acquisition also made Banc of California the largest gainer in employees on the list, reporting a 27% increase to 420.

Overall, the local banks increased their headcount 3.5% to 1,425.

The two largest banks also accounted for 19 branches, more than half of the total in Orange County. The number of OC branches on the list has steadily fallen from 33 this year from 41 last year and 56 in 2011. Most of the other banks have only one branch.

One bank that’s done well by shedding its branches is No. 4 CommerceWest Bank ­owned by parent CW Bancorp (OTC: CWBK), which reported assets climbed 4.6% to $1.2 billion. A decade ago, the Irvine-based bank ranked No. 12 with $328 million in assets.

The fourfold increase in assets can be attributed to closure of its bank branches to focus on a digital banking platform, said Chief Executive Ivo Tjan, who founded the bank in 2001.

“We consolidated all our locations seven years ago and took the savings from that to invest in technology,” Tjan the Business Journal. “The environment of digital remote bodes really well. Most clients are comfortable banking online.”

Highest Grower

This year’s fastest grower was Newport Beach’s Genesis Bank, where assets more than doubled to $120.7 million over the last three quarters.

Stephen Gordon, who successfully started and sold two prior banks, opened Genesis Bank in 2021.

Demand “has been like drinking from a fire hose,” Gordon told the Business Journal. “We were having to turn away new business because as a new bank, we have limitations.”

Hence, the company won approval from regulators for a larger bank than initially planned, he said.

The list of banks headquartered in Orange County has notably changed in the past couple of years.

Several well-known banks have disappeared from the Business Journal’s annual lists in recent years, either through acquisitions like Pacific Mercantile and Opus Bank, or moves out of state like Sunwest Bank and First Foundation.

Nano Problems

The biggest asset decline on the list was Irvine-based Nano Banc, which fell 20% to $1 billion.

The online bank, which began in 2018, came under criticism for growing too fast from regulators, who forced the bank to make changes to its management and board of directors.

Nano Banc also saw the biggest decline in headcount, falling 22% to 47 workers.

Mission Viejo-based Partners Bank of California saw its assets rise 2.1% to $414 million, a turnaround from a year ago when assets fell 10%. Assets accelerated in the third quarter to $433 million.

Partners Bank CEO Chris Walsh said the past year has “been phenomenally good” as borrowers rushed to refinance before higher interest rates kicked in.

“2021 was our best core loan origination ever and this year we’re going to out do it,” he said.

Irvine’s Commercial Bank of California jumped one spot to No. 3 as its assets climbed 15% to $1.9 billion.

The growth can be attributed to “good quality” deposits, a new payments system, and new relationships forged by getting government loans for small businesses during the pandemic, Chief Executive Ash Patel said. CBC’s assets have steadily climbed from $200 million in 2013 when Patel took the CEO position.

Another bank reporting high growth was Garden Grove-based US Metro Bank, which jumped 24% to $1.1 billion; a year ago, its assets jumped 31%.

The bank, which caters to Korean Americans, is thinly traded on pink sheets (OTC Pink: USMT).


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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.

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