SIZING UP
OC-based Commercial Banks Posted 44% Growth in Assets in Past Year
By ANDREW SIMONS
The asset bonanza continued for Orange County’s crop of homegrown commercial banks in the past year.
The 18 OC-based banks grew assets by 44% to $2.9 billion in the 12-month period ending June 30, according to this week’s Business Journal list, which ranks the biggest banks with headquarters in the county by assets.
Assets include cash, loans, real estate and securities held by the bank.
Still, there could be even more room for growth. “OC is very under-banked by national standards,” said Ed Carpenter, chief executive of Irvine-based Carpenter & Co., an investment bank that specializes in tracking and advising community banks.
In the past year, upstart local banks have continued to draw funding.
Witness the founding of No. 16 Costa Mesa-based Commercial Bank of California, which opened in May with $27 million in seed funding from investors such as Costa Mesa-based Emulex Corp.’s Paul Folino and Newport Beach-based William Lyon Homes’ William Lyon. It was the largest funding in history for a new California bank, according to Carpenter.
Then there’s Fullerton’s Commerce National Bank, which closed on $12 million in funding in August and will be on next year’s list. And the $6 million raised by No. 14 Buena Park-based Uniti Bank, which opened in 2001. Uniti targets North County’s large Korean American community.
Meanwhile, assets at OC banks have surged in the past few years as money flowed out of the stock market and into safer interest-bearing bank accounts and real estate. OC’s largest homegrown commercial banks grew assets by about 36% in 2002.
None of the 18 banks on the listed saw a decline in assets in the past year. Figures are obtained from the Federal Deposit Insurance Corp.
Ten banks saw a double-digit increase in assets, and one had a triple-digit gain. Two banks,Commercial Bank and No. 17 Orange County Business Bank,had no assets a year ago. The five biggest OC-based banks maintained their rankings from a year ago.
No. 1 Again
Topping the list was No. 1 Costa Mesa-based Pacific Mercantile Bank, which nearly doubled its assets to $646.9 million, versus $342.3 million a year ago.
“They have a very active online bank that lets their customers do a lot of things,” Carpenter said, in a past interview.
Real estate lending has helped the bank’s top line. In the third quarter, Pacific Mercantile’s mortgage lending business generated $1.4 million in revenue, up 45% from a year earlier but down from $1.9 million in the second quarter.
As interest rates have inched higher of late, mortgage lending volume at OC banks is expected to slow.
Pacific Mercantile has four branches in OC, with the latest opening in La Habra in September. The bank launched a securities business, PMB Securities Corp., last year.
Coming in at No. 2 was Orange-based Bank of Orange County, which grew assets 38% to $437.1 million, versus a year ago.
No. 3 Tustin-based Sunwest Bank grew assets a relatively slim 4% to $285.1 million compared to a year ago. Net income in the period grew 495% to $2.4 million.
The bank hired a new chief executive, Marshall Laitsch, earlier this year to help spark the Tustin bank’s tepid asset growth.
“It always really comes down to people,” Laitsch said in an earlier interview. “The bank simply wasn’t taking advantage of the growth opportunities in Orange County.”
No. 4 Fountain Valley-based Centennial Bank grew assets 22% to $255.8 million.
A big asset gainer was No. 6 Newport Beach-based Harbor National Bank, which reported a 73% increase in assets to $168 million. Harbor more than doubled its net income in the third quarter to $296,000, versus a year earlier. It had income of $500,000 for the entire 12 months through June 30.
“We are pleased to report another quarter of solid growth and increased income for the bank,” said Harbor’s chief executive, David Blankenhorn.
No. 9 Anaheim-based Premier Commercial Bank moved up three spots on the list with a 92% gain in assets to $95.6 million, versus a year ago.
“Loan activity remains robust, and we see it continuing to be strong,” said Premier’s chief executive, Ken Cosgrove. “We also see growth in deposits.”
Uniti Bank grew assets to $52.7 million, an 83% increase versus last year.
“We are exceeding our goals on total assets,” said Chief Executive William Bongkee Im. “What’s more important is that we broke even on a quarterly basis.”
Uniti recently got the green light to become a Small Business Administration lender. That lets the bank make small-business loans instead of going to a certified small-business lender.
Newcomers to the list were Uniti, Commercial Bank, Orange County Business Bank and No. 18 Tustin Community Bank, which posted a 7% gain in assets to $26.1 million.
