Taking advantage of both the strong national economy and the even stronger local economy, Orange County’s 13 locally based banks grew their company-wide assets last year by 23% to $3.4 billion and their workforces 8% to 923 employees.
“We are in a county that is very exciting. There is a lot going on,a lot of business and a lot of growth,” said Robert Keller, chief executive at No.1 Eldorado Bank.
Orange County is maintaining a low unemployment rates and businesses are getting bigger while more new businesses are forming.
“I don’t see a slowdown on the horizon,” Keller said.
However, the list is shorter this year, as two local banks were acquired by out-of-county institutions. Southern California Bank was part of an up-the-food-chain acquisition, being acquired by Western Bancorp, which was in turn acquired by U.S. Bancorp. Southern California Bank was last year’s No.1 on the list with $1.1billion in assets. The county also lost Orange National Bank to Ontario, Calif.-based Citizen’s National Bank.
To take over as No. 1, Laguna Hills-based Eldorado grew its assets 9% to $1.1 billion for the 12 months ended March 31, though Keller said the growth probably has been more than that. The list is compiled from the Federal Deposit Insurance Corp. database and is ranked by company-wide assets of the banks with headquarters in the county.
Keller said his bank has been growing because of the economy and also because of its aggressive telemarketing campaign and “working with existing clients,” Keller said. The bank also has seen increased traffic on its Internet banking operations.
Keller said the past six months have been slower than usual, though, citing hesitation by the business community as a result of uncertainty in the stock market, high oil prices, inflation and high interest rates.
“There is a feeling among businesses to at least hesitate for a few minutes and stand on the sidelines to see what is going to happen,” Keller said.
No. 2 on the list is Huntington Beach-based First Bank & Trust, which moved up one spot from last year. The institution grew its assets by 27% to $969 million, though that is mostly attributed to the bank’s acquisitions.
The bank also saw its earnings grow substantially, though Jensen showed concern about the rate of growth.
“You really have to pace yourself in terms of the growth. If we can’t service what we have, it goes in the front door and goes out the back,” Jensen said.
Jensen said some of the growth is also due to fallout from consolidation among other banks, with his institution picking up disgruntled customers.
“These things all play into a bank like ours,” Jensen said.
First Bank & Trust has been involved in the acquisition game, though it hasn’t done much in Orange County lately. This month, the bank acquired Bank of Ventura, which had one branch and $70 million in assets. Before that, it acquired Century Bank in Beverly Hills and Republic Bank in the South Bay area.
No. 5 on this year’s list is Pacific Western National Bank, which moved its headquarters from Pico Rivera last year to Brea.
“Our loan demand has been excellent,” bank president Doug Faist said. Pacific Western grew its assets by 27% to $170 million and Faist said he doesn’t see a slowdown for a few years.
“We are very optimistic for the next year.”
The new location is a reason the bank has had strong growth, said Faist.
There are strong OC and Inland Empire economies and that bodes well for the bank,” Faist said.
Eight of the 13 banks on the list had double-digit growth, with No. 8 Pacific Mercantile Bank in Newport Beach taking the cake, growing its assets 464% in the past year, to $119.2 million. Pacific Mercantile had the high percentage growth because it started up early last year. But it is already bigger than five banks on the list, though three of those banks are startups.
“We are in a thriving economy,” said Raymond Dellerba, Pacific Mercantile’s chief executive. The growth has been due to a need for community banking in Orange County, Dellerba said. Acquisitions by bigger banks have picked off several of the local independent banks and left a gap to fill.
“There are only seven or eight (independent banks) left,” Dellerba said. Pacific Mercantile also prides itself on having some of the most recent technology in its employ. For its small-business customers it can offer payroll, tax and bill payment services through its online operations, something that Dellerba said has been a factor in the bank’s growth. The bank’s biggest problem right now is finding quality employees who know the banking business, but are also attuned to technology issues, Dellerba said. n
