California Republic Bank has made a big splash in a small pond.
The Newport Beach-based bank raised a record $52 million in startup money and hopes to tap its base of 300 area investors for staying power in Southern California.
"A lot of people build to be sold, but we build to hold," said Chief Executive Robert Bulseco.
California Republic Bank's founders and management have worked at smaller banks that eventually were bought by bigger ones. But this time around, they say they want to keep what they build.
Bulseco started and was president of Los Angeles-based Prime Bank, which had $110 million in assets when East West Bank bought it in 2001. He also headed up Los Angeles-based Metrobank, which was bought by Comerica Inc. in 1996.
California Republic Bank is targeting midsize businesses and says its initial loans will be no more than $12.5 million. But its main concern is building deposits so it can make loans.
Some bankers think the local bank market has grown too crowded. But Bulseco said he has an edge with his experienced managers and network of prominent investors.
California Republic Bank will compete with the traditional mix of big-name banks like Comerica, Bank of America Corp., Wells Fargo & Co. and City National Corp., Bulseco said.
And as the major banks tighten their lending standards, Bulseco said it's an opportunity to gain market share, which is what he did in the 1990s with Metrobank.
That doesn't mean California Republic Bank will be quick and free with money, he said.
"We're patient capital. We don't have a lot of pressure to take a lot of risk," Bulseco said.
The bank initially set out to raise a minimum of $30 million but decided it would do better with more.
Bulseco said he believes there is a void in the market for banks based in Southern California and wants to build California Republic Bank into a local presence here.
"We're anchored in the community, we know people here," Bulseco said.
California Republic Bank wants its first clients to be its own investors.
The 300 local entrepreneurs, business owners, professionals and investors that funded the bank also will be tapped as a network for leads, according to Bulseco.
Each investor is known by management or the board and is considered "strategic," he said.
The idea for California Republic Bank came after founders Jon Wilcox and John DeCero left Irvine-based Western Financial Bank after Wachovia Corp. bought its parent Westcorp last year in a $3.7 billion deal.