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Two New Banks File to Open in Irvine

Two new banks with long-time Orange County banking executives are planning to open later this year, with one institution targeting doctors as both investors and customers, while the other is focusing on the area’s growing Chinese-American community, the Business Journal has learned.

Beach Cities Commercial Bank and Bank Irvine are both planning to raise around $25 million to begin operations later this year.

Neither bank will have an investor with a larger than 10% ownership, according to regulatory filings.

If both receive approval from regulators, it will be another example of the banking industry seeking to expand in Orange County.

Notable new local institutions include Genesis Bank in Newport Beach, which was created by former Opus Bank Chairman and CEO Stephen Gordon. It got regulatory approval last year, and completed an initial capital raise of $57 million.

Several large banks based elsewhere last year also opened OC branches, including PNC Financial Services, the nation’s seventh largest bank, and Torrey Pines Bank, a unit of Western Alliance Bank.

Orange County’s growth stands in contrast to the industry at large. Countrywide, there have been fewer than 20 bank charter applications since the start of 2021, according to finance trade industry data.

Consolidation Key

Beach Cities and Bank Irvine said they see an opening because of the recent trend of consolidation among community banks.

The number of community banks in Orange County and Los Angeles County has fallen 43% to 56 in the past decade, according to Bank Irvine in its filing with regulators.

“The growth in the number of Chinese-American population and businesses, coupled with the contraction in number of local banks and a lack of locally based full-service banks that are focused on serving the Chinese-Americans from Mainland China, provides a favorable environment for the establishment of the bank,” Bank Irvine said.

Nationwide, nearly 3,000 bank branches closed last year, on net, according to data from S&P; Global Market Intelligence.

Better Care

Banks nowadays aren’t taking great care of customers, according to Beach Cities’ filing.  

“I believe there’s a huge need for small- and medium-size business owners to be able to contact their bankers and have direct communications with the decision makers” such as those who approve the loans, Beach Cities’ proposed President Jeffrey Redeker told the Business Journal.

Business owners may have questions about fees or other banking matters.

“They don’t want to get on a 1-800 number,” Redeker said. “When people don’t get back to them, it drives them up the wall.”

Medical Connections

Beach Cities has extensive ties to Orange County medical industry, as well as the finance industry.

One proposed director is Dr. James A. Heinrich, founder and member of the board of directors of San Juan Capistrano-based Capital Bank, which was acquired in 2017 by Seacoast Commerce Bank. In 1999, Heinrich founded Pacific Coast Cosmetic & Laser Medical Center in Mission Viejo.

“Through his several affiliations in the medical community in Orange County, Dr. Heinrich will provide access to many physicians as possible investors and customers for the proposed bank,” the bank charter application said.

Another proposed director expected to bring in doctors as investors and clients is Dr. Mark C. Burkhardt, an anesthesiologist who since 2017 has served as CEO of Mission Viejo Anesthesia Consultants. Since 1997, he’s worked at Mission Viejo facilities like Mission Hospital Regional Medical Center, Children’s Hospital of Orange County and Mission Ambulatory Surgicenter.

The bank also has ties to the OC legal industry. Proposed director Angela Bienert, who has over 31 years of banking experience and most recently was interim chief credit officer at Santa Ana-based Infinity Bank, is married to Thomas H. Bienert Jr., who was the past president of the Orange County Bar Association where she was involved with as well, according to the bank filing.

Other proposed directors include James Richard Bosemer, previously at Capital Bank and an owner of firms dealing in first trust deeds and reverse mortgages, and James Riskas, who founded Polaris Properties Inc., which provided advice to 400 high-income and high-net-worth individuals, including physicians and professional athletes.

“The directors are all great businesspeople,” Redeker said. “All of them are business owners and understand the challenges.”

Their proposed chief executive is Hollister Kent Falk, who worked at Capital Bank and was chief credit officer at Mission Viejo-based Partners Bank of California.

Their chief operating officer will be Nasrin Rostami, who was a founder of San Diego’s Endeavor Bank and was also chief risk officer in 2014 at Irvine’s Pacific Premier Bank, now the largest bank headquartered in Orange County.

Beach Cities plans to serve the banking needs of small- and medium-sized businesses, business professional, and business owners.

It predicts total assets will more than double to $284.7 million by the end of 2024 when it will have $221.9 million in loans. It’s aiming for $234.9 million in total deposits by 2024 end, including 26% in non-interest bearing deposits.

Beach Cities will be located in Irvine Co.’s Innovation Office Park off the 5 Freeway in Irvine. It will also have a second office in Encinitas.

Chinese-American Focus

Bank Irvine’s filing said it will focus on making loans to small businesses with revenue of less than $1 million in areas of low to moderate income.

The bank is requesting to be designated a Minority Depository Institution as a federally insured institution where 51% or more of the voting stock is owned by minority individuals.

“The bank’s directors have significant ties to the Chinese-American community,” its filing said.

Chief executive will be Jianyin “Paul” Peng, who’s been a banker for 26 years, including serving in lead executive management roles for U.S. operations of Chinese banks.

Chief credit officer is slated to be Charles Fenton, well known in OC banking circles as a CEO at prior banks like Blue Gate Bank in Costa Mesa and TomatoBank in Alhambra.

Its proposed directors include: Chairman Patrick Fields, who has 40 years of legal experience representing clients in financial services and international trade for offices of non-U.S.-based banks and other lenders in California; Ching “Lisa” Chen, who has 29 years of experience in business development and is a member of advisory council of USC Risk Management Program; Zhengyu “Helen” Liu, who has 20 years of banking experience, including credit risk management, in the U.S. and China; Stephen Lu, who has management expertise in a variety of business fields in Southern California; Stephen Sham, former mayor of Alhambra; and Kevin Shyu. 

Seeking Service Talent

Banking executives often say their businesses have become commoditized and their edge over the competition is service.

Beach Cities Commercial Bank, which is planning to open later this year, explained to regulators why it believes it can be different than the dozens of banks already operating in Orange County.

“It is our belief, based on the team’s experience, that there are only a few customer-oriented bankers in the business development arena, and we are targeting the acquisition of these individuals,” its filing said.  

“Many of the banks that our team has worked with allow the subpar salespersons/teams to remain too long in their jobs thereby burdening the P&L; and providing a hinderance for hiring strong business developer officers.

“The recent consolidation in the industry provides the proposed bank the opportunity to acquire quality talent from banks that have merged or been acquired since their employment began.

“Executive management is confident that the proposed bank will be able to hire strong business development officers who will be excited to work for our bank.”

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.
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