Deposits Up 5%, Employment Flat; BofA Still No. 1
Spurred by a continued strong economy and an increase in investor interest in OC, deposits of the top 25 banks in Orange County grew by 5% last year to almost $20 billion, while their number of employees remained flat, according to the Business Journal list.
The deposit growth for the 12 months ended June 30 amounts to almost $1 billion, which the banks attribute to the strong economy, and increases in venture-capital flow and acquisitions in Orange County.
It is solid growth, but is down from the 12% increase reported by the Business Journal last year for the prior 12-month period. Last year’s list included the same 25 banks.
Last year, the banks also reported employment growth of 6%, the first such job gain in a decade. Those additional employees were able to carry the banks through to this year, when the banks reported a total of 9,844 OC employees, essentially unchanged from last year’s 9,865.
No.1 on the list, Bank of America, grew its OC deposit base by 1% from $7.34 billion to $7.39 billion, but the president of the bank’s Southern California operations, Liam McGee, said BofA has grown by more than that.
The Business Journal’s list tracks only FDIC-insured deposits, which exclude money-market funds, CDs and other non-insured deposits. According to McGee, BofA’s Southern California region had an 8% growth in total deposits, “and Orange County was a large portion of that.”
That total increase is in line with the 8% growth of Bank of America’s OC employees, which the bank attributes to a relocation of personnel to its Brea facility, which houses a call center, collection department, and retail-loan and consumer-finance services.
“The small and medium-size business sector is strong and we’ve benefited from that,” McGee said.
The bank also is looking at new ways to grow, while retaining its traditional lines of business.
McGee said there have been several niche financial-services companies start up and “that is where our competition comes from.”
Wells Fargo is No. 2 on the list with $3.81 billion in OC deposits, a 6% increase, though its OC employee count dropped by 235. Kim Young, the president of the Orange County market for Wells Fargo, said that the bank did not see a large increase in the number of customers, but had an increase in the balances the customers are keeping.
The company reported losing 14% of its OC workforce and now has 1,419 employees in the county. Young said that the bank had increases in personnel in some of its stores, but the bank relocated part of its telephone banking division to Arizona.
Wells Fargo is also trying to grow its business by offering other financial services like mortgage lending, asset management, insurance, trusts and brokering of stocks. The bank is “focused on trying to handle all their finances, not just their banking,” Young said.
The San Francisco-based bank is also trying to increase its presence in OC. It recently acquired a new branch office in Santa Ana and two ATM locations, one in Buena Park and the other in Mission Viejo, according to CB Richard Ellis Retail Services.
“We’re still looking at our network and trying to fill it in. There is a lot of room in South County,” Young said.
Rounding out the billion-dollars-in-deposits club is No.3 Union Bank of California with $1.82 billion. The bank also had a drop-off in employees, from 675 last year to 650.
The biggest fall-off in OC deposits came at No. 8 Comerica Bank, whose single OC branch lost 25%. The Detroit-based bank’s regional president, David White, attributed the drop-off to declines in the balances of business clients in the real estate industry, which were affected by the drying up of the refinancing market following interest-rate increases.
“With interest rates picking up, it has basically dried up the market,” White said.
The bank is growing, though, adding 11 employees in OC, mostly loan-production positions, and opening new branches in Ontario and Los Angeles.
No. 9 Imperial Bank moved up three spots on the list, growing its deposits by 90% from $247.1 million to $469.2 million and adding two branches for a total of three. The bank’s regional vice president, Caroline Harkins, attributes most of the growth to the bank’s emerging-growth division, which is a venture-banking operation. It took advantage of the increase in venture capital distributed in Orange County, which went up to $537.9 million in 1999 from $272 million in 1998, according to PricewaterhouseCoopers’ most recent Money Tree Survey.
Harkins also attributes some of the growth to a strong economy.
“Our customers are enjoying this vibrant economy,” Harkins said.
Imperial Bank started the emerging growth division in the Irvine Spectrum last year and just opened an office in Orange in January. Imperial grew its staff by 22% to 28 employees since last year in order to handle the new offices and the increase in business.
No. 12 Citizen’s Business Bank also moved up two spots from last year. The Ontario, Calif.-based bank grew its OC deposits by 45% to $327.4 million, mostly as a result of the bank’s acquisition of Orange National Bank. The acquisition gives the bank eight branches in Orange County. Linn Wiley, the bank’s president, said the growth also was due to the strong economy, and he predicts that CNB’s deposits will continue to grow for at least two years.
No. 13 Silicon Valley Bank’s OC deposits outpaced its company-wide deposit growth. In Orange County, the bank’s deposits grew by 59% to $310.4 million, compared to a company-wide deposit increase of 25.7% to $4.1 billion.
For the year ending Dec. 31, the publicly traded bank reported an 80.9% increase in net income to $52.2 million. The bank had total assets grow by $1.1 billion to $4.6 billion and the bank’s stock shot up, trading in the teens a year ago and at more than $80 last week.
The bank has a large base of emerging growth companies and Richard Shuttleworth, the bank’s senior vice president, said that is where most of the bank’s growth has come from.
“A lot of our companies got venture funding. Public-company clients also had strong years,” Shuttleworth said.
Some of the bank’s OC clients are Broadcom Corp., QLogic Corp., Emulex Corp., PairGain Technologies Inc. and MTI Technology Corp., which all have market capitalizations of more than $1 billion.
“These guys had great years. Some had secondary offerings,” Shuttleworth said.
He warns though, that next year the bank’s deposits will go down since it needs to shore up its balance sheet and decrease liabilities: “We have too many deposits. In 2000, we are actively pushing them into investments.” n
