The largest 46 banks operating in Orange County reported an accelerating decline in local bank deposits, which slipped 3.9% to $162 billion as of June 30, 2024. A year ago, the deposits fell 0.3%.
During the prior three-year period, deposits climbed 15% in 2020, 23% in 2021 and 11% in 2022, driven by the federal government trying to stimulate the economy during the pandemic.
The decline was widespread, affecting eight of the 10 largest on the Business Journal’s annual list. Among them, the largest was at Irvine-based Pacific Premier Bank, where deposits dropped 18% to $7.4 billion.
Some bankers have said the deposits that fell generally went to other areas such as brokerages as depositors try to gain a higher return.
Three banks had significant decreases in their OC deposits.
New York-based Flagstar Bank, which has been trying to push into the OC market, reported a 46% drop in deposits to $166 million and it fell to No. 44 from No. 36 a year ago.
San Diego-based California Bank & Trust had a decrease of 58% in deposits to $988 million, and its ranking fell to No. 22 from No. 12 the year before.
Shinhan Bank America, which has headquarters in Seoul, reported a 37% drop in deposits to $217.8 million.
None of the three banks responded to Business Journal requests for comments on the declines.
The rankings are based on deposits provided by the Federal Deposit Insurance Corp. The other data is provided by the banks or are Business Journal estimates.
Biggest Jumpers
A large organic jump was at Newport Beach’s Genesis Bank, which increased deposits 40% to $133.7 million. Its deposits should increase much more on next year’s list as it’s acquiring Beverly Hills-based Excel Bank (see story, page 1).
The biggest increase occurred at Banc of California, 52% to $6.5 billion. In late 2023, it acquired Pacific Western Bank, which helped it leap three spots to No. 8. Its OC headcount declined the most on the list, falling 22% to 502. While the bank has officially moved its headquarters from Santa Ana to Los Angles, Chief Executive Jared Wolff has previously said he considers the Santa Ana location as a dual headquarters.
The number of OC employees was down slightly to 11,809 as of January compared to 11,849 a year ago, same month.
The trend towards fewer branches continued, falling 2.9% to 508.
M&A Rising
JPMorganChase held onto the No. 1 slot on the Business Journal list of largest banks in OC, even though its deposits slid 3% to $29.7 billion as of June 30, 2024.
Executives are bullish about the future, with confidence in the national economy soaring from 31% in 2024 to 65%, Rick Nogueira, market director for J.P. Morgan Commercial Bank in Orange County, told the Business Journal Nogueira also noted the J.P. Morgan internal reports show that 43% of business leaders nationwide and in California are planning for strategic partnerships and/or investments in 2025.
“A quarter (26%) of Californians are planning for M&A activity and 16% are looking toward PE investments (compared to 11% nationally),” he said in an email. “Additionally, 14% of California business leaders say they plan to sell their company this year, compared to only 9% nationally. This may coincide with the influx of business owners looking to transition their business as they entire retirement, a growing trend across the country.”
Bank of America, which is marking 100 years in Orange County, came in No. 2, as deposits fell 10% to $27.4 billion.
Nonetheless, the bank is having an “exceptionally busy year,” according to Jennifer Gallagher, global commercial banking executive for Southern California, Bank of America, told the Business Journal (see story, page 16).
Wells Fargo Bank’s deposits dipped 4%, coming in at $25.7 billion for the third slot, while US Bank was a distant fourth with deposits running flat at $9.6 billion.
Notables
• Dallas-based First Foundation Bank, which has significant operations in Orange County, ranked No. 6 as its OC deposits rose 1% to $8.8 billion.
• BMO, which ranked No. 12, saw its deposits decline 20% to $2.3 billion.
• Poppy Bank, based in Santa Rosa, climbed to the No. 36 slot as its OC deposits ticked up 1% to $271 million as of last June (see story page 20).
“As a privately owned business, we appreciate Orange County’s rich cultural history and vast variety of locally owned businesses,” CEO Khalid Acheckzai told the Business Journal.
“We love to support locally owned entities and the pivotal role they play within the community – and we understand that no two businesses are the same.”
Research Director Desmond Celo contributed to this report.
