Costa Mesa-based PriVest Bank caters to an exclusive roster of some 300 wealthy clients with courier services at their disposal so they never have to leave their homes or offices to bank.
The two-year-old bank serves business owners and individual customers who maintain a minimum account balance of $10,000. PriVest has nearly $40 million in deposits and just one branch, near South Coast Plaza.
“We want to be all things to a select few,” said founder and Chief Executive J.B. “Ben” Crowell.
PriVest Bank is capitalized with $5.7 million from some prominent Orange County names. Shareholders include: Chapman University President Jim Doti and his wife, Lynne; First American Financial Corp. Chairman Donald P. Kennedy and his wife, Dorothy; Marian Knott, a former principal of Knott’s Berry Farm; and R. David Threshie, chairman of Freedom Communications Inc.
Along with deposits, PriVest’s clientele has been good for an additional $40 million in loans and other assets. And the bank counts another $40 million in assets under management, including wealth management and trust services.
The bank has been able to carve out a small slice of the high-net-worth banking sector amid competition from Bank of America, Wells Fargo and other more sizable players. Crowell said the bank is happy having a relatively small number of customers: “We can know them all,” he said.
But as PriVest seeks to nearly double assets, the bank is finding it has tapped out its current clientele. Deposits are no problem for PriVest customers, officials said. But when it comes to loans, the bank’s patrons don’t need many.
“Affluent clients don’t borrow money, because they don’t need to,” said Brian Riley, the bank’s president.
The bank’s assets grew to $37 million early last year but haven’t increased much since. PriVest is looking to add another 700 customers or so and to participate in loans with other banks.
“We want to level off at about $75 million in assets,” Crowell said.
The move marks a subtle shift for PriVest. Bank officials say they are adjusting their model because it didn’t generate as much in assets as first thought. PriVest has its share of fee income, but to grow, it needs to boost assets, officials said.
Most banks have been looking to increase their non-interest income, which is why many have started offering other financial services, such as bill payment, cash management, insurance and brokerage services.
Crowell started PriVest in 1998, just after Eldorado Bank was sold to The Dartmouth Group. Crowell was Eldorado’s chief executive for a number of years and felt the OC market was right for an independent private bank.
The bank became profitable last year, according to Riley. Through the third quarter, PriVest had revenue of $4.7 million and earnings of $193,000.
The bank has 14 employees, two of which were just hired. PriVest hired a private banker who brought on substantial new business, Crowell said.
Riley himself is a newcomer. He joined as president three months ago with a charge to grow assets.
“We have to think about succession, that’s why we brought Brian on,” Crowell said.
PriVest has what’s called a sub-chapter S charter, which works more like a partnership. The bank’s 57 shareholders receive a share of the profits and are required to pay income taxes. n
