The 30 largest banks operating in Orange County grew deposits at a slower rate this year amid stiff competition.
Deposits increased 3% to $42.8 billion for the 12 months ended June 30, according to this week’s Business Journal list.
It’s another year of growth in local deposits, though it’s down from the 12% growth rate banks saw a year earlier.
Commercial banks across California grew deposits by 3% to $530 billion as of June 30, according to the Federal Deposit Insurance Corp.
Nationally, banks posted 8.5% deposit growth during the same period, about the same rate as a year earlier, according to the FDIC.
Banks are in a tough market.
Customers are shopping around, chasing the best rates of return on their money. This has led banks to advertise aggressive rates that often put a squeeze on profit margins.
“The deposit market is definitely competitive right now,” said Jim Lasher, executive vice president at No. 14 Centennial Bank in Fountain Valley. “Depositors are much more savvy today than just four or five years ago. There’s not the loyalty that there used to be.”
Eighteen banks on the list reported a gain in deposits during the 12-month period, with 11 declining and one remaining flat.
As a whole, commercial banks grew their branches here by 8%, or 31 locations, while the number of workers here jumped 6% to 13,858.
No. 18 Banco Popular, owned by Puerto Rico-based Popular Inc., led the local worker gain by percentage.
Banco Popular moved its California headquarters to Anaheim from Santa Fe Springs in March and added three branches inside Wal-Mart stores.
The bank more than doubled its workers to about 230 after it opened 10 local branches a year ago.
Banco Popular saw local deposits fall 9% to $427 million.
The Anaheim site was a good move for the bank as it continues its OC push, said Vernon Aguirre, California regional executive for Banco Popular.
“As we looked to see where our customers were located, we found that Anaheim was in the center,” Aguirre said. “Anaheim is pro-growth and pro-business.”
Banks saw a pickup in commercial real estate lending and money management services, executives said.
The state’s top two banks held their spots on the list again,No. 1 Charlotte, N.C.-based Bank of America Corp. and No. 2 San Francisco-based Wells Fargo & Co.
Bank of America and Wells Fargo together account for nearly half of the local deposits and more than half of the county’s bank employment.
Bank of America saw its local deposits dip 1% to $12.9 billion, while the number of OC workers was flat at 4,500.
Wells Fargo saw a 6% rise in local deposits to $9.2 billion, and a 10% jump in workers to 2,924.
Last month Wells Fargo said it plans to pay about $645 million in stock to buy No. 28 Placer Sierra Bancshares, which runs Anaheim-based Bank of Orange County.
Wells Fargo plans to take over Bank of Orange County’s 18 local branches once the deal closes early this year.
Wells Fargo also opened a private banking office that specializes in wealth management services in Corona del Mar this year. The office is the first of its kind for Wells Fargo, said Kim Young, OC president for the bank.
No. 3 Fremont In-vestment & Loan held its spot with 6% deposit growth totaling $3.5 billion.
Fremont, a unit of Santa Monica-based Fremont General Corp., provides deposit accounts along with commercial and residential real estate loans through a national network of commercial and residential real estate offices.
The bulk of its lending is subprime to borrowers who have less-than-perfect credit.
Local acquisitions led to a handful of newcomers.
No. 6 Wachovia Bank was the biggest name to debut on the list. Parent Wachovia Corp. snatched up Irvine-based bank holding company Westcorp Inc. and its auto finance unit WFS Financial Inc. for $4 billion last year.
Wachovia, the nation’s fourth-largest bank, counted $1.3 billion in local deposits for the 12 months through June.
In March, Wachovia also bought a 72% stake in Newport Beach-based Metropolitan West Capital Management LLC for an undisclosed amount.
The Business Journal estimates that Wachovia now has about 900 local workers.
East West Bank debuted at No. 20 with $321 million in local deposits,more than triple its deposits a year prior.
In late 2005, East West Bank bought San Marino-based United National Bank for $178 million, which included a branch in Irvine.
East West also added a branch inside Asian supermarket 99 Ranch Market in Irvine.
“In terms of Orange County’s growth, the acquisition is just one part of it,” said Wellington Chen, executive vice president and director of corporate banking for East West. “The remaining half is the organic growth of our commercial banking.”
Chen is based in the Pasadena corporate office but oversees Orange County’s commercial banking.
East West’s Irvine Spectrum branch leads local branches with more than $100 million in deposits, Chen said.
Branch Plans
The bank plans to open another branch this year near John Wayne Airport. It’ll have a focus on commercial banking.
More companies wanting to trade in China has helped East West, according to Chen.
“When they want to expand overseas, to connect to some manufacturers, we can help bridge the gap,” he said.
Costa Mesa-based Commercial Bank of California debuted at No. 29.
Commercial Bank was founded in 2003. It’s racked up about $187 million in deposits and has 25 workers in OC.
Commercial Bank, which focuses on commercial and real estate lending, grew its loans 31% last year to about $150 million, said Carl Patsko, executive vice president.
“Commercial real estate is where the stability remains today,” Patsko said.
The bank is looking to expand its loan business this year by opening a small business loan group. It’s scouting sites for two loan offices in Brea and South Irvine, and expects to hire a dozen workers, according to Patsko.
The biggest decliner on the list was No. 11 U.S. Bank, which slipped two spots with local deposits falling 21% to $637 million. This is the third straight year local deposits have declined for U.S. Bank, a unit of Minneapolis-based U.S. Bancorp.
Decliners
Other decliners: Newport Beach-based Mellon 1st Business Bank, which saw deposits fall 19% and slid four places to No. 25.
Bank of New York Co. in December said it is buying Mellon Financial Corp., parent of Mellon 1st Business Bank, for an undisclosed amount.
The new company is set to be called Bank of New York Mellon Corp. and will have more than $16 trillion in global assets.
About 3,900 jobs are expected to be cut over three years as a result of the deal. The companies combined count 40,000 workers.
It’s uncertain as to how the cuts will play out with Mellon’s 17 local branches. The deal is set to close in July.
