San Francisco-based Union Bank of California is eyeing California’s affluent.
The bank plans to make a push for its priority banking program,which targets people with $100,000 to $1 million in accounts at the bank.
The program offers prompt service and investment advice in more than 35 branches, including five in Orange County. Union Bank plans to expand the service to 35 more.
Union Bank has had an affluent banking program for almost 30 years but feels the market is ripe for growth.
It first thought about the expansion about a year ago, when it wanted to see if could grow with the everyday customers who have been among its best.
The bank later tested its priority banking services at two branches, including one near John Wayne Airport.
“We’ve never done an expansion like this in the history of the program,” said Kirk Van Atta, a senior vice president with the bank and manager of priority banking based in Irvine.
The deposit growth from its test branches,those that offered priority banking,showed double-digit growth compared to the typical 5% at other branches, according to Van Atta.
Priority banking customers get exclusive attention from special Union Bank employees, who work from designated corners in its branches.
Typical banking, as well as investment advice and insurance services, are available through Union Bank’s priority banking staff, Van Atta said.
The goal of priority banking is to compete better with community banks that have reputations for being more personable, Van Atta said.
Shorter lines and more personal attention in branches are perks, he said.
“Instead of being one of thousands they’re one of hundreds,” Van Atta said.
Union Bank is the primary business of San Francisco-based UnionBanCal Corp., a holding company with nearly $56 billion in assets and part of Bank of Tokyo-Mitsubishi Ltd.
The county’s two largest banks, Charlotte, N.C.-based Bank of America Corp. and San Francisco-based Wells Fargo & Co., have similar programs.
Union Bank already has nine branches in OC and expects to have priority banking services in an additional five by this year.
The 35 branches set to receive the services will add some 52 workers to Union Bank’s California headcount, with about half of them holding Series 6 licenses issued by the Financial Industry Regulatory Authority to sell investments.
In California, where nearly all of Union Bank’s 330 branches are, it already has 30 priority banking programs.
The majority of priority banking services will go into branches in metropolitan areas, with Los Angeles receiving 13, San Francisco 10 and San Diego seven.
Van Atta says one of his biggest challenges is to convert its existing business customers into personal customers and vice versa.
About half of Union Bank’s priority bankers are business customers, he said.
Customers are allowed to count both their business and personal balances toward the $100,000 minimum, which Van Atta hopes is attractive enough for people to convert.
“We don’t force the client to split the relationship,” he said.
New customers from outside the bank come mostly from referrals. Union Bank also uses direct mail and print ads, he said.
Customers with more than $1 million qualify for its private banking program, which handles wealth management.
As for competitors’ programs, Wells Fargo has licensed premier bankers in 65% of its branches, and has been targeting people with at least $100,000 for 17 years.
About a quarter of its OC customers are in the program, which specializes in financial planning and introduction to various specialists, according to the company.
By next year it plans to have the program in 75% of its branches.
Wells Fargo customers with more than $1 million qualify for its private banking program for wealth management.
Bank of America’s premier banking and investments program also accepts clients with a minimum of $100,000, and offers financial and specialized services such as insurance and loans.
Clients with more than $5 million are referred to U.S. Trust, which Bank of America bought in 2006 from San Francisco-based Charles Schwab for $3.3 billion.
