Commercial Capital Raises $20M, Plans Rancho Branch
By RAJIV VYAS
Irvine-based Commercial Capital Bancorp raised $20 million in a debt offering to support a runup in assets at its fast-growing thrift.
The thrift holding company raised the money in two trust preferred security offerings and put the proceeds into Commercial Capital Bank, which saw assets go from $325 million at year’s end to $503 million in March.
“Our capital ratios far exceed well-capitalized status,” said Stephen Gordon, chief executive of Commercial Capital Bancorp.
Regulators require banks and thrifts to have a “capital-adequacy ratio,” or a minimum level of equity to assets to protect against loan losses.
The company raised the money through two new subsidiaries: CCB Capital Trust II and CCB Statutory Trust III. The money was shifted to Commercial Capital Bank as equity.
It was the third debt offering by Commercial Capital in the past seven months. In November, the company issued $15 million in a similar offering.
“I don’t think I am going to issue any more for quite some time,” Gordon said. “We’ll just keep growing for a while.”
Commercial Capital Bank was the fastest-growing thrift in Orange County last year, according to the Federal Deposit Insurance Corp. Gordon and his partner, David DePillo, the company’s president and chief operating officer, project hitting $1 billion in assets this year.
In July, Commercial Capital plans to open its third branch in the Plaza El Paseo center in Rancho Santa Margarita, where it has sole banking rights. Commercial Capital’s other branches are in Irvine and Riverside County.
“The location is phenomenal,” Gordon said of Plaza El Paseo, which is near Coto de Caza and Dove Canyon. “It’s in a high-end retail center that is like the hub of the wheel.”
The thrift aims to target some 70,000 people who live in a three-mile radius of the planned branch and count an average annual household income of around $130,000.
Commercial Capital also owns Financial Institutional Partners Mortgage Co., which makes loans to apartment buyers. The loans are sold to the thrift, which borrows to fund the loan buys. The loans sold to the thrift also give it an income stream, which boosts equity.
The result: big growth, but also big debt and vulnerability to a rise in loan delinquencies. Growth projections could be thrown off by a rise in interest rates and a fall in the rental market in California, which some analysts predict this year.
The thrift plans to keep growing in the next few years with more branches, Gordon said.
“We are going to carefully select high-growth areas, where the demographics are strong and where the areas are under-banked or where people are unhappy with their current banks,” he said.
Commercial Capital also is trying to lure customers with interest rates. Its Prime Money Market Account offers 3% on deposits of $10,000 to $50,000. Deposits of more than $50, 000 earn 3.25%.
Bank of America Corp. and other large banks offer less than 1.5% on money market accounts.
“We are averaging more than $1 million a day in new client deposits now,” Gordon said. “Some days it is well over that.”
