Bank of America Corp. is back, taking the top ranking for the first time in seven years on the Business Journal’s list of the 40 biggest banks doing business in Orange County.
The bank grew its OC deposits 6.2% to $22.8 billion as of June 30, passing longtime leader Wells Fargo & Co., where deposits slipped 1.8% to $22.5 billion, according to the Business Journal’s annual list. The last time Bank of America topped the list was in 2011, when it reported $16.5 billion in deposits.
“Being on the top spot is rewarding; it’s another sign of our commitment,” Allen Staff, Bank of America’s top representative in Orange County, told the Business Journal. “It feels great, but we’re on this journey to get better.”
Bank of America has increased its OC deposits by at least $1 billion in each of the past six years.
Staff attributed the deposit growth to a number of factors. The bank is in the process of spending tens of millions of dollars to renovate its 86 OC branches, which Staff calls financial centers that provide services like investment advice. It’s training its employees to be more responsive to customers in areas like mortgages and small business loans. The bank is aiming to be more socially responsible and is encouraging employees to volunteer more. It’s also developing technology so customers can interact with the bank at any time, he said.
“We’re putting a lot of resources into Orange County, which is a growth story,” Staff said. “The cumulative effect is to grow our market share.”
The list ranks banks with headquarters or significant operations here and a minimum of $200 million in local deposits based on data from the Federal Deposit Insurance Corp. The banks supplied information on local employees and branches, statistics that don’t factor into the ranking.
Overall, deposit growth appears to be slowing in Orange County, as it increased 2.1% to $120.4 billion, compared with a 9% growth reported in the prior year.
Sixteen banks saw their deposits fall, a leap from a year ago when only five banks reported a drop.
Twelve banks reported deposits climbing more than 10%; a year ago, 22 banks reported increases higher than 10%.
One factor in the changes was the Federal Reserve increasing its benchmark rate, causing depositors to seek higher paying accounts.
“Banks are having to be more competitive,” First Foundation Inc. Chief Executive Scott Kavanaugh wrote in a report for our special banking supplement (see page, 20).
“The consumer definitely wins out in the current paradigm and banks that haven’t kept up with the market will see clients depart.”
Irvine-based First Foundation cracked the top 10, rising from No. 13 to No. 9 as its deposits jumped 30% to $3.1 billion, aided by acquisitions and organic growth.
The banks reported their employment increased 1.2% to 17,644 compared with a 2.8% decline in the prior year.
The number of branches continued dropping, falling by four to 602. In 2013, the 40 largest banks reported 719 branches in Orange County.
Among notable changes:
• No. 3 JPMorgan Chase & Co.’s deposits climbed 8% to $16.1 billion; in the prior year, the bank’s OC deposits had risen 17%.
Bank of America and JPMorgan accounted for a combined growth of $2.5 billion in deposits, just slightly ahead of the overall county growth of $2.5 billion.
• Twenty-four banks reported deposits increases, led by No. 30 Grandpoint Bank’s 77% increase to $334.9 million. That increase occurred before it was purchased by Pacific Premier Bancorp, which by itself climbed 36% to $2.8 billion.
No. 11 Pacific Premier may enter the top 10 in next year’s list with the addition of Grandpoint’s deposits. Pacific Premier is already the largest OC-based bank with $11.5 billion in assets.
• Other banks showing substantial rises included No. 30 Commercial Bank of California, which climbed 40% to $586.1 million and No. 25 Sunwest Bank, which was up 27% to $740.4 million.
“Our deposit generation is a result of continuing to grow the Sunwest customer base, as well as expand our relationships with existing clients,” Sunwest Chief Executive Carson Lappetito said. “We have achieved this through providing extraordinary service and unique products to our clients such as innovative business checking accounts and our boutique lockbox for check processing.
• The biggest employment increase by percentage was reported by Irvine-based Commercial Bank of California, which more than doubled its OC employee count to 157.
• The biggest percentage decline was No. 22 Mechanics Bank, which dropped 37% to $965 million. It also reduced its employee count by 6.4% to 264.
Mechanics Bank centralized its specialty deposits group, which handles funds such as escrows, from OC branches into the bank’s Walnut Creek headquarters.
“We still have the deposits. They are just not being shown as being in Orange County,” Chief Executive John DeCero said. “It’s just a re-categorization.”
Santa Ana-based No. 6 Banc of California Inc., which has been restructuring, saw its deposits fall 26% to $4 billion.
No. 28 Umpqua Bank and No. 39 The Northern Trust Co. reported 20% declines in deposits.
• Irvine-based California First National Bank, also known as CalFirst, fell off the list when its OC deposits dropped 65% to $174.3 million, below the $200 million threshold to make the list.
CalFirst stopped originating commercial loans in 2017 after its regulator, the Office of the Comptroller of the Currency, asked it to substantially reduce its concentration of leveraged loans. The company also cut employment 24% to 38.
