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.
Seeing all the turmoil that comes with bank consolidations, Wilcox and DeCero wanted to build something they could hold for a while.
Wilcox and DeCero recruited former Western Financial colleague Mark Rebal to their team.
Wilcox is the bank’s president. DeCero is its vice chairman. Rebal is its chief credit officer.
They then received the backing of Robert Barth, who is chief executive of Beverley Hills-based real estate investor Black Equities Group Ltd., which owns 18 million square feet of space in 36 states.
“I had a strong interest in starting a bank, but more important, I was looking for a strong management team,” Barth said, who serves as chairman of California Republic Bank.
The bank hopes to keep expenses down by having only two branches and using technology that allows customers to scan and deposit checks from their own offices.
California Republic Bank plans a West Los Angeles branch to open soon and ultimately plans for its business to be split between Los Angeles and Orange counties.
“We don’t feel like we need a lot of brick and mortar branches,” Bulseco said.
California Republic Bank’s Newport Beach office has 16 employees in 5,000 square feet. n
