Person to Watch:
Scott McGregor
Chief executive,
Broadcom Corp.
The person to watch on the technology front was a no-brainer for 2005.
Late last year, Scott McGregor was readying to take over Orange County’s biggest company by market value, Irvine-based Broadcom Corp., in early January.
McGregor formerly headed Philips Semi-conductors, a unit of Netherlands-based Royal Philips Electronics NV.
His consumer electronics background was thought to serve Broadcom well. After 20 years of the chip industry being dominated by the personal computer market, consumer electronics are poised to be the sector’s big growth driver during the next five years, analysts say.
Broadcom is enjoying the party early on, with big growth in its wireless phones and digital entertainment businesses.
McGregor has been receiving generally positive reviews for his first year on the job. Broadcom shares are up 50% this year, and the company has been beating analysts’ quarterly sales and profit estimates.
Observers say McGregor has continued in the tradition of his predecessor, Alan “Lanny” Ross, who brought maturity to the aggressive company after the hard-driving Henry Nicholas stepped down in 2003.
McGregor didn’t make any radical changes in the past year, though Broadcom has inked some key deals. One example: a pact with Cupertino-based Apple Computer Inc.
Soon after McGregor arrived, Apple talked to Broadcom about providing chips for its iPod digital music devices that have video capabilities.
While it typically takes chip companies two years or more to develop their designs, Broadcom pushed hard to come up with the iPod chips in less than a year.
Meanwhile, the company has continued its tradition of acquiring chip designers under McGregor. Broadcom said in October it would pay $21.6 million for Fremont-based Athena Semiconductors Inc., which designs chips for mobile phones to receive TV signals.
In the summer, Broadcom announced its buy of Mountain View-based Siliquent Technologies Inc. for $76 million. Siliquent designs devices that boost the performance of networks and storage devices.
The chipmaker’s boldest move in the past year could turn out to be its high-profile patent lawsuits against wireless chip designer Qualcomm Inc.
Broadcom filed a patent infringement suit and unfair trade practices complaint against San Diego-based Qualcomm in the spring. Broadcom claimed Qualcomm’s devices infringe on 10 of its patents related to wired and wireless communications and multimedia chip technologies.
The legal affair could be drawn out and costly, pitting potential partners against each other. It also could make Broadcom an even bigger winner in the cell phone market.
,Brian Womack
Company to Watch:
Jazz Semiconductor Inc.
A year ago we projected that Newport Beach-based Jazz Semiconductor Inc. would finally pull the trigger on its planned initial public offering in 2005.
Well, we were wrong.
Instead, the contract chipmaker pulled the offering off the table in June. Jazz had filed to raise up to $150 million in a stock sale in January 2004.
The company is a spinoff of Newport Beach-based Conexant Systems Inc., which still owns a big chunk along with Washington, D.C.-based private equity investor Carlyle Group. Proceeds from a Jazz offering were set to help Conexant pay off some of its debt.
Dwight Decker, Conexant’s chief executive, said the offering isn’t dead. The stock sale was pulled, Decker said, because there was a looming deadline for updating the filing and the company didn’t want to go public during the slow summer months.
Decker said Jazz, which operates one of the county’s few remaining chipmaking plants, hopes to refile for the offering, perhaps next year.
It’s a wait-and-see game. Orange County saw just two initial public offerings in 2005: Irvine-based subprime lender ECC Capital Corp. and Costa Mesa-based apparel maker Volcom Inc.
The results were mixed, with Volcom, a maker of surf, skate and snowboard gear, seeing its shares spike. On the flip side was ECC, which went public amid rising interest rates and uncertainty in the mortgage industry. ECC shares are down more than 50% from their offering price.
Observers say the market for public offerings is sluggish for most companies, and they aren’t predicting a big turnaround anytime soon.
Lead underwriters on Jazz’s offering were Credit Suisse First Boston LLC and Lehman Brothers Holdings Inc.
,Brian Womack
Company to Watch:
Advanced Medical Optics Inc.
We predicted a big year for the Santa Ana-based maker of eye devices, thanks to a pair of large deals that were poised to push it into Orange County’s billion-dollar sales club.
Advanced Medical Optics Inc. is projected to end the year with about $930 million in sales and surpass $1 billion in 2006.
Through September, Advanced Medical had $668 million in sales and a recent market value of $2.9 billion.
The company, which was born as a 2002 spinoff from Irvine’s Allergan Inc., in May paid $1.3 billion for Visx Inc., a Santa Clara maker of lasers used in corrective vision surgery.
The buy was a big part of Advanced Medical’s bid to entrench itself in the eye surgery market, following 2004’s $450 million acquisition of Pfizer Inc.’s cataract surgery business.
Advanced Medical did smaller deals in 2005, such as May’s purchase of Quest Vision Technologies Inc., a development-stage company based in Northern California’s Tiburon.
Last month, Advanced Medical decided to push up plans to break off some of its older cataract surgery and eye care products in order to put resources into more profitable products with better growth prospects.
“It takes a bold move to walk away from $30 million to $40 million in revenue, when revenue is king these days,” said James Mazzo, Advanced Medical’s chief executive, in November. “But again, it also takes a bold move to say, ‘We can’t afford to continue supporting this many product lines when it’s not providing the benefit to the operating income or to the overall resources of the company.'”
Some of the products Advanced Medical got in the Pfizer deal “antiquated some of our existing designs” and were one of the triggers for the restructuring, Mazzo said.
The company boosted research and development spending as part of its focus on more profitable products. And it got another bit of good news back in May, when the Centers for Medicare and Medicaid Services said it would allow patients to choose replacement eye lenses to treat farsightedness for an additional fee.
Mazzo, meanwhile, emerged as one of the county’s higher-profile chief executives during the past year by making the rounds to industry, community and educational groups. His ties to the University of California, Irvine, deepened.
He was closely involved with the university’s efforts in selecting Dr. Michael Drake, an ophthalmologist and University of California system executive, as UC Irvine’s new chancellor. Drake replaced Ralph Cicerone, now head of the National Academy of Sciences.
,Vita Reed
Person to Watch:
Timothy Tyson
Chief executive,
Valeant Pharmaceuticals International
Timothy Tyson,just the third boss for the four-decades-old Costa Mesa drug maker,made progress in Valeant’s rebirth in 2005. But investors have cooled on the company of late, ahead of a key drug trial next year.
In January, Tyson replaced transitional Valeant chief Robert O’Leary, who’s now chairman.
One of the reasons we picked Tyson to watch was his charge to come up with products to replace fading cash cow ribavirin, a hepatitis C drug that’s felt heat from generic rivals.
“The future of this company is not ribavirin,” Tyson said in the past.
Shortly after Tyson took over Valeant’s top spot, he struck a $280 million deal to buy Xcel Pharmaceuticals Inc., a San Diego-based neurology drug developer.
Valeant gained drugs to treat epilepsy, a nasal spray to treat migraines and an epilepsy medication in third-phase clinical trials.
Valeant’s awaiting word on a couple of drugs: Cesamet, which fights nausea and vomiting in chemotherapy patients, and Zelapar, a treatment for Par-
kinson’s disease.
Tyson also wrapped up a big part of Valeant’s three-year restructuring this summer when the company sold off operations in Hungary to India’s Sun Pharmaceutical Industries Ltd.
On the dermatology front, Valeant signed Courteney Cox Arquette, the actress of “Friends” fame, to be the face of its Kinerase anti-aging product line. The company rolled out Kinerase in the upscale retail market through a deal with the Sephora fragrance and cosmetic chain.
Valeant also signed a deal with Irvine-based Allergan Inc. to distribute its Botox in Hungary and Poland.
For all the gains, investors are worried about Viramidine, Valeant’s next-generation treatment for the liver disease hepatitis C.
Third-phase clinical trial results are due next month, but some Wall Street analysts have pointed out that there is a bias toward Viramidine failing its clinical trials.
Tyson replies that he and Valeant are confident in Viramidine’s prospects and that doctors and researchers involved in treating liver disease are “still excited and have regard that this study will prove what all of the previous studies have showed,that Viramidine is equivalent to ribavirin in efficacy and superior in a reduction in incidence of anemia.”
Perhaps as a hedge, in November Tyson laid out plans to buy the rights to Infergen, a hepatitis C drug, from Brisbane-based InterMune Inc.
,Vita Reed
Person to Watch:
Seth Johnson
Chief executive,
Pacific Sunwear of California Inc.
Midwestern-bred Seth Johnson kept the sun shining at Pacific Sunwear of California Inc.
As predicted, slower growth played out at the Anaheim-based teen retailer. But Pacific Sunwear has held up better than other retailers.
In August, Johnson detailed a plan for a third chain of stores, One Thousand Steps. The chain will sell shoes and accessories with the first nine stores set to open in the first half of 2006.
Greg Weaver, executive chairman and Johnson’s predecessor, spearheaded the One Thousand Steps effort.
Johnson runs nearly 800 PacSun surfwear stores, 93 PacSun Outlet stores and some 200 d.e.m.o. stores, which sell hip-hop inspired clothes.
He ramped up his management staff in the past year, hiring Wendy Burden as chief operating officer, a position that had been vacant since he held it before becoming chief executive in April.
Johnson also added Thomas Kennedy as PacSun division president, Reenie Benziger as executive vice president of merchandising and Lou Ann Bett as president of d.e.m.o.
The old guard is gone: Tim Harmon, former president and head of merchandising, and Carl Womack, chief financial officer. Both left the company in the past year.
PacSun reported third-quarter net income of $40.5 million, a 20% rise from a year earlier. Same store sales were up 4.6%, not the double-digit gains the company saw in early 2005, but respectable.
,Sherri Cruz
Malls to Watch:
Village at Orange,
Buena Park Downtown
Two of Orange County’s oldest malls spent the year filling up space. Both newly remodeled shopping centers are on their way to full occupancy.
At this time last year, Village at Orange was about 80% full. Now it is slightly ahead of plan at 97%.
Deena Henry, general manager for the Village, said there are more shoppers, too. New tenants this past year include Lane Bryant and a slew of restaurants: Sbarro, Quiznos Subs, Chocolate Moose and Gloria Jean’s Coffees.
The Village even got a visit from skateboarder Tony Hawk with the opening of Active Ride, a board sports shop.
Irvine’s Passco Real Estate Enterprises Inc. and 30 other investors bought the Village for $90 million in fall 2004.
Buena Park Downtown hit a one-year mark under new management, Diversified Developers Realty Corp.
“We’re a lot better than we were last year,” said Michael De Leon, general manager for the Buena Park mall.
De Leon became general manager in January and hired Patricia Neill as marketing manager in March. Once a few key tenants open at the mall in the coming year, it should be about 85% filled, he said.
Chicago’s Pritzker family sold the 1.1 million-square-foot mall to Diversified and Coventry Real Estate Advisors LLC in late 2004 for $91 million.
Wildly successful was the recent opening of Portillo’s Hot Dogs, a Chicago-based restaurant. Business there has been nonstop, De Leon said.
,Sherri Cruz
Person to Watch:
Alan Fuerstman
Chief executive,
Montage Hotels & Resorts
Now entering the fourth year as head of his own hotel management company, Alan Fuerstman made strides and hit some bumps on the development front in the past year.
Fuerstman, chief executive of Montage Hotels & Resorts, had a good year with his key holding: the Montage Resort & Spa in Laguna Beach.
This year the resort’s Spa Montage earned the first,and only,five-star spa rating from Mobil Travel Guide. The resort again earned a four-star rating from Mobil Travel Guide for 2006.
Last November, readers of Cond & #233; Nast Traveler ranked the Montage Resort & Spa the No. 2 U.S. resort.
The Montage was featured in Spa Finder magazine, Gentry Magazine and House Beautiful, among others, in 2005.
Along with other coastal resorts, Montage this year joined an Orange County venture called the OCeanfront to market the county’s luxury coastal resorts.
“We’ve made good progress with The OCeanfront,” Fuerstman said. “We’re pleased with it.”
On the development front, Montage and its Phoenix-based development partner, the Athens Group, in March won approval from Beverly Hills voters to build a 214-room hotel.
The project, north of Wilshire Boulevard between Canon and Beverly drives, includes an acre of public gardens and a 1,100-car parking garage.
Fuerstman said site work and design are progressing and the company plans to break ground in the first quarter.
In OC, the company’s plans hit some rough spots over redevelopment of the Aliso Creek Inn and golf course, which it bought in 2004.
Early this year, some Laguna Beach residents were angered that the developers approached county supervisors about the possibility of expanding the golf course on public land.
Though executives with Athens and Montage insisted the talks were merely exploratory, the community outcry led to further studies and a new plan unveiled this fall.
The new plan doesn’t include an 18-hole golf course,a critical component of many upscale resorts.
Instead, it calls for a redesigned nine-hole golf course, a 90- to 95-room Craftsman-style hotel and up to 50 condominiums on the site of the Aliso Creek Inn. Another 11 residential lots on the parcel known as Driftwood Estates remain part of the plan.
The conceptual plan will be submitted for approval in early 2006, according to John Man-sour, Athens’ vice president of development.
The company doesn’t expect the hotel to open before 2010. The timing depends on how long it takes to get approval from several government agencies, including the California Coastal Commission.
Athens also plans to address several environmental issues in its plan, said Martyn Hoffmann, the company’s director of forward planning.
Other projects also are on the horizon for the company, including ones in Deer Valley near Park City, Utah, and a resort on 1,300 acres in Cabo San Lucas in Baja Mexico.
Fuerstman said the Cabo resort will include golf, homes and a beach club.
“It’s a great destination for us and a great market to complement Laguna Beach,” he said.
,Sandi Cain
Person to Watch:
Paul Marshall,
Opus West vice president
A year ago, we picked Paul Marshall to watch for his company’s ambitious plans to build high-rise housing, an office tower and apartments in Irvine.
Marshall, who heads the Irvine office of Phoenix-based Opus West Corp., made big strides on condominium towers along Jamboree Road. Progress was slower on a planned office building near John Wayne Airport.
And a plan for apartments was scrapped in favor of more condos.
Opus and partner Geoffrey H. Edmunds & Associates Inc. of Scottsdale broke ground on two 15-story condo towers at the Plaza Irvine in March. Ninety percent of the project’s 202 condos already are sold, at an average price of $1.2 million.
Now a third tower has been added, with another 105 homes starting at $700,000,about $200,000 more than the starting price for the first two.
The third tower is 15% sold and could be at the halfway mark by February, when construction is slated to begin, Marshall said.
The project should be done by late 2007.
In August, Opus said it was dropping plans for 341 apartments at Jamboree between Campus and Dupont drives in favor of 404 condos. The company is working with Red Bank, N.J.-based Hovnanian Enterprises Inc., known as K. Hovnanian, on the project.
Opus still has plans for a 13-story, 300,000-square-foot office building, Opus Center Irvine III.
The project was thought to break ground this year. May now is the likely start date. Opus doesn’t have tenants signed on yet and hasn’t decided whether to break ground on speculation of landing some later.
One factor that could play a part in the decision: rapidly rising construction and labor costs, which generally haven’t been matched by rent increases, Marshall said.
,Mark Mueller
Company to Watch:
Centra Realty Corp.
Irvine-based developer Centra Realty Corp. made a name for itself late last year when it acquired the iconic former Nabisco plant in Buena Park from Kraft Foods Inc.
Centra, led by ex-Koll Development executive Keith Ross, is set to redevelop the 40-year-old facility. Plans call for razing the plant, which stopped production a year ago.
In its place is set to be a 320,000-square-foot shopping center.
No visible change played out on the project this year, except for a “coming soon” sign going up. The plant hasn’t been torn down yet as Centra appears to be working on getting tenants.
The developer and partner Seligman & Associates of Los Angeles also need approvals, said May Hui, Buena Park’s economic development director.
There’s also talk that auto dealerships could be added to the project.
Centra also is building 152,000 square feet of office and research and development space in San Juan Capistrano.
,Mark Mueller
City to Watch:
The strength of Fox TV’s “The O.C.” helped keep Newport Beach on tourists’ minds as the city celebrates its 100th birthday.
The city’s Conference and Visitors Bureau continued to play on the show’s popularity by publishing a “Visit The OC” map that directs visitors to the program’s hot spots.
A few writers have panned the map, suggesting it features ‘look-alike’ sites rather than the actual ones. But, while the show is filmed mainly in Malibu, Newport Beach destinations such as Fashion Island and Crystal Cove have been featured and the cast has visited the city.
The map has been a hit. It’s the most requested download from the visitor bureau’s Web site, with almost a quarter of the 400,000 people who have visited the site in the past year ordering visitor guides.
“It’s an important part of our public relations,” said Nancy Shugg, bureau membership and sales coordinator.
The bureau itself is in a state of flux, having recently lost its executive director and communications director. Shugg said the bureau still has a staff of 11 people and is actively seeking a new director and sales staff.
In October, Newport Beach launched its yearlong celebration of its centennial that will culminate with a birthday bash next September, but that has yet to generate much of a splash beyond the city’s borders.
Newport Beach’s biggest news this year involved changes at several of the city’s signature hotels.
The Four Seasons name disappeared when The Irvine Company took over management on Nov. 1. The AAA five-diamond hotel now is called The Island Hotel Newport Beach.
The Island has drawn from other high-end hotels for its management team. General manager Hans Maissen is a 30-year hospitality veteran, as is Eric Prevette, executive vice president of resort properties. The new management team plans to make some changes to the lobby and restaurant next year. A renovation of the hotel’s suites also is in the works.
The Irvine Co. also announced details of its Resort at Pelican Hill in Newport Beach and began renovations to the golf course of the same name.
Near John Wayne Airport, Fairmont Hotels and Resorts took over management of the Sutton Place Hotel and began renovations in the fall that should be complete by early 2006.
The Newport Beach Marriott Hotel & Spa is putting the finishing touches on its yearlong $60 million makeover,the most expensive renovation in Marriott’s history,that includes the addition of a 14,000-square-foot spa, new restaurant, new luxury suites, as well as guestroom and meeting space upgrades.
The renovations had some impact on the city’s meetings business, Shugg said. Newport Beach ranks behind just Anaheim in OC for its total meeting space and hotel rooms.
It remains to be seen if The Island will lose any meetings business from loyal Four Seasons customers. But other hotel renovations, along with those already complete at the Hyatt Regency Newport Beach and the growing popularity of the Balboa Bay Club & Resort, bode well for Newport Beach’s future.
The Irvine Co.’s Fashion Island mall added more stores that attract destination shoppers. In November, the company said new retailers at Fashion Island next year include American Rag, Original Penguin, G-Star and Ligne Roset.
Newport Beach’s Greenlight initiative that limits construction in the city has stifled new growth, with a small boutique hotel defeated by voters last year. But other changes are afoot.
The funky, retro Fun Zone on Balboa Peninsula is set to become the new home for the Newport Harbor Nautical Museum, now on a riverboat anchored in the harbor.
Some Fun Zone buildings are likely to be remodeled for the museum and a few attractions may disappear, but the landmark Ferris wheel and merry-go-round are expected to remain.
Earlier this month, Newport Beach was considering a plan to take over management of the Upper Newport Bay wetlands. Meanwhile, challenges remain along the waterfront, where residents want to fend off sea lions that are part of the bayside charm visitors often seek.
,Sandi Cain
City to Watch:
Santa Ana
The county’s most populous city settled a big issue in 2005: the fate of a proposed 37-story office tower.
City voters in April approved developer Mike Harrah’s plans for what would be the county’s tallest office building between the Civic Center and downtown.
The fight over the tower pitted preservationists against those who saw the building as part of Santa Ana’s ongoing rebirth.
Harrah’s challenge now is leasing half of the building before starting construction, as required by the city.
Santa Ana’s evolution continued in 2005. The predominantly Hispanic city even was featured in a USA Today story about “Latino new urbanism.”
Redevelopment was at the heart of just about everything in Santa Ana in the past year. The city has become a mix of urban chic and traditional Mexican cultures. For the most part, the juxtaposition is working, though not without some tensions.
Now things are spreading from downtown. A few blocks away at the city’s train station, more lofts broke ground this year.
In May, construction on City Place,which includes townhouses, lofts, an amphitheater and shops across from Westfield MainPlace mall,got under way.
The City Council also approved high-rise condominium towers near the border with Costa Mesa.
Condo towers have been a push for Mayor Miguel Pulido, a Democrat who dominates Santa Ana politics.
Republican Carlos Bustamante emerged as a counterpoint to Pulido on the City Council after being elected in late 2004.
Bustamante was among those who backed a plan to regulate the vending trucks that dominate Santa Ana streets.
The trucks are a key source of fruits, vegetables and other products for the city’s Mexican immigrants. But other residents complain about them, with an estimated 300 trucks on city streets.
The city scrapped the proposed truck rules in October.
Pulido himself got caught up in state politics earlier this year.
Gov. Arnold Schwarzenegger pulled the mayor from the State Teachers’ Retirement System board after he voted to oppose key Schwarzenegger pension proposals.
Pulido was appointed to the board by former Gov. Gray Davis in 2003. Schwarzenegger reappointed Pulido last year.
A political ghost from Santa Ana’s past came back in 2005: Nativo Lopez.
Lopez was recalled from the city’s school board in 2003, in part because of his promotion of bilingual versus English immersion education.
In November, an appellate court ruled the recall was improper because petitions weren’t also in Spanish. Pulido supported the recall.
Lopez, a former Democrat now aligned with the Green Party, showed up at the California Republican Party Convention in Anaheim earlier this year, where he expressed support for some of Schwarzenegger’s failed ballot measures.
In April, Santa Ana won a victory in a battle with the University of California, Irvine, over where to put a new courthouse for the 4th District Court of Appeal. The win fended off a challenge to Santa Ana as the county’s civic hub, even as many judges supported UC Irvine’s bid.
,Michael Lyster
Person to Watch:
Curt Pringle
Mayor, Anaheim
2005 was a year of triumph and setback for Curt Pringle, Anaheim’s big-thinking mayor.
In October, Anaheim’s City Council approved plans for Lennar Corp.’s A-Town, a massive redevelopment around Angel Stadium of Anaheim that calls for nearly 3,000 condominiums, including high-rises, as well as shops and office space.
The project is the culmination of Pringle’s vision for turning the drab area around the stadium into an urban hub.
The year didn’t start off so hot for Pringle. In January, Arte Moreno, owner of the Los Angeles Angels of Anaheim, renamed the baseball team, sparking a costly legal fight with the city.
Moreno has spent about $5 million on lawyers. The city’s legal tab is at about $1 million.
Pringle has refused to back down, contending Anaheim has to be prominent in the team’s name as part of its 1996 lease at Angel Stadium of Anaheim. A trial is set for next month.
Meanwhile, Moreno has fired a salvo of his own,a threat to move the team from Anaheim if the case drags on in appeal.
Given Moreno’s bid to boost the profile of the team by aligning with a big market, it’s unclear where he’d move without going to a smaller market.
,Michael Lyster
Manufacturer to Watch:
Raj Manufacturing Inc.
Tustin-based swimsuit maker Raj Manufacturing Inc. didn’t bolt to tap cheaper foreign production in 2005.
Like others, Raj has said it’s been wrestling with the state’s costs of doing business, including workers’ compensation insurance costs, in the past few years. Meanwhile, with many apparel companies turning to low-cost labor in Mexico, Asia and South America, it seemed like a good bet that Raj would cut back here.
But the company stuck to Orange County.
Raj did explore other production options, but decided to stay in OC because it’s the “Mecca of the beach lifestyle,” said Alex Bhathal, the company’s executive vice president, in a recent interview.
“Our lives and our families are here, so we will try our best to keep the production here in the future,” Bhathal said.
The business climate in California still is “very tough” but it “doesn’t seem to be getting worse,” he said. Gov. Arnold Schwarzenegger’s workers’ comp reform has led to big rate cuts in the past year or so.
Another reason for staying: quality workers. Raj has said in the past that it hasn’t been able to find overseas workers who can produce the company’s high-quality swimwear.
Raj, which has been gradually adding staff in its design and sales operations, now counts about 400 workers in OC.
Perhaps the company’s biggest deal in the past year was with Hong Kong-based Tommy Hilfiger Corp.
Tommy Hilfiger’s swimwear license previously was handled by Jantzen Apparel LLC, which was bought by Miami-based Perry Ellis International. That 2001 agreement recently expired, with Raj stepping in to make and design the swimwear.
Raj also holds the license to make, sell and distribute swimsuits for Los Angeles-based Guess? Inc., Irvine-based O’Neill Clothing and Irvine-based St. John Knits International Inc. The company has its own lines: Athena Collection, Athena Pick Your Fit and Rajman.
Raj, which is family owned and run, also has been focused on expanding its international distribution and increasing penetration in premier retailers, Bhathal said.
Bhathal and his sister, Lisa Bhathal Vogel, who handles marketing, are both being groomed to eventually take the company reins from their parents, Raj Bhathal, who is chief executive, and Marta Bhathal, who is chief operating officer.
Plans include adding more mid-level managers so the Bhathal siblings can take on other duties.
,Jennifer Bellantonio
Company to Watch:
Sunwest Bank
We again could pick Sunwest Bank as a finance company to watch in 2006 as it tries to tidy up unfinished business from the past year.
Tustin-based Sunwest saw executive shuffling and spotty performance in the past year as other small banks gained deposits, loans and assets.
In the third quarter, Sunwest’s assets fell 2% from a year earlier to $290 million, after rising 7.3% in the second quarter.
Deposits fell 2% to $249 million in the third quarter after rising 8% the prior quarter. Loans were off nearly 8% to $165.9 million in the third quarter.
The declines came amid a yearlong trend in which the largest homegrown banks and thrifts saw a 7% gain in deposits in the third quarter.
To turn things around, Sunwest this month hired Glenn E. Gray as chief executive. He replaced interim chief Irving Beimler, who ran the bank since late 2004, when former boss Marshall Laitsch left.
Tara Balfour, former president of Bank of America Corp.’s Orange County operation and head of its statewide commercial banking unit, was recruited earlier this year to help run Sunwest as interim executive managing director.
Gray most recently was chief operating officer at Scottsdale-based Finova Group Inc., where he liquidated assets of the financial services business since late 2001.
Previously, Gray spent eight years with Wells Fargo & Co.
In February, the bank named John Michel chief financial officer. Michel replaced Frank E. Smith, who left Sunwest to pursue other interests.
The buzz of a takeover of Sunwest continued throughout the year. But Eric Hovde, chairman of Sunwest and an executive with Washington, D.C.-based Hovde Financial Inc.,owner of about 70% of Sunwest along with other partners,reiterated that he’s not selling.
“My strategy is to make it the premier community bank,” Hovde said.
,Pat Maio
Person to Watch:
Hieu T. Nguyen
Chief executive,
First Vietnamese American Bank
Hieu T. Nguyen got the first state-chartered commercial bank up and running for the Vietnamese-American community in Little Saigon in May, generating a lot of media buzz.
Now for the hard part.
Startup banks typically take about three years to reach profitability. Westminster-based First Vietnamese reported a loss of $1.2 million in the quarter ended Sept. 30. Assets were about $15.6 million, according to data reported to regulators.
“The Vietnamese community in Orange County is large and its demographics are very diverse in terms of businesses, age groups and financial needs,” Nguyen said. “It needs more banks who really understand its own culture and habits of doing business.”
Getting checking and savings business from consumers is part of the plan for Nguyen.
The big opportunity, he said, is providing global trade services, such as letters of credit for importing and exporting. Nguyen has the ability to make loans backed by the U.S. Export-Import Bank, which is the official U.S. export credit agency.
The bank helps companies line up loans to buy or sell goods internationally. Nguyen said the bank is contemplating financing foreign companies that sell products to the U.S.
As a boy, Nguyen fled his North Vietnam home in 1953 via a U.S. military transport for South Vietnam.
,Pat Maio
