Orange County-based commercial banks’ asset growth slowed to 10% to $37.8 billion for the 12 months ended June 30.
It’s another indicator that banks aren’t growing as fast as in the previous three years, when their assets climbed 14%, 39% and 38%.
• The slowdown can be attributed to the two of the three biggest banks. Top-ranked Banc of California Inc. in Santa Ana reported assets were flat at $10.3 billion, followed by third-ranked Opus Bank in Irvine, whose assets dropped 6.3% to $7.2 billion.
Two years ago, Banc of California’s assets increased 58%, Opus Bank’s 28%. Growth has declined at both as they try to fix problematic loans, executive turmoil and lower-profit businesses.
• The fastest growth on the list came at two Irvine-based banks, No. 4, First Foundation Inc., up 53% to $6 billion, and No. 2, Pacific Premier Bancorp, up 27% to $8.2 billion. Both were also on the Business Journal’s recent list of the fastest-growing public companies based on revenue over a two-year period, the former growing sales 82%, the latter by 133%.
This week’s Business Journal list ranks 17 banks by assets. It also provides net income, local employment and branches, though those data don’t affect rankings.
The banks reported combined net income of $183 million for the six months ended June 30, up 28% and stronger than the 10% growth a year earlier. The biggest increases were at Pacific Premier, up 112% to $59.5 million, and Pacific Mercantile Bancorp in Costa Mesa, up 306% to $18.2 million.
• The biggest profit drops were at U.S. Metro Bank in Garden Grove, down 62% to $2.1 million, and Banc of California, off 21% to $33.9 million.
Banks are again growing their OC workforces, which increased 9.5% to 2,412, compared to the 12% drop reflected on last year’s list.
Twelve banks reported asset increases, four experienced declines, and one just opened for business this year.
Irvine continues to be OC’s banking center, hosting nine of the largest banks, followed by two in Santa Ana and one each in Costa Mesa, Garden Grove, Buena Park, Mission Viejo, Rancho Santa Margarita and Tustin.
Among notable changes:
• Pacific Premier should take the top spot on next year’s list. On July 1, a day after the close of this year’s list period, it completed the acquisition of Grandpoint Capital Inc., and now has $11.5 billion in assets. A year ago, Pacific Premier purchased Plaza Bank, which we ranked fifth last year with $1.3 billion in assets.
Pacific Premier, which has steadily grown since 2010, when it reported $826.8 million in assets, has aimed for the past several years to boost assets about $10 billion.
“It’s part of our strategy for both organic and acquisitive growth,” Chief Executive Steve Gardner said.
The bank’s OC employment climbed 49% to 409.
• Opus Bank, which has faced problematic loans and executive turnover, reported profit rose 9.5% to $28.4 million, compared to the previous period’s 23% decrease. Its OC employment climbed 9.8% to 359.
• First Foundation’s 53% growth has come about half through acquisitions and half organically. In the past year, it acquired PBB Bancorp, owner of Premier Bank, and Community 1st Bancorp.
Since its 2015 initial public offering, its assets have tripled from $1.9 billion. Its net income for the six months declined 6.9% to $15.5 million.
It employs 277 in OC, up 10% from a year earlier.
• Costa Mesa-based Pacific Mercantile’s profit soared to $18.3 million, mostly because it released an $11.1 million tax valuation allowance that flowed to its bottom line in the second quarter.
Its assets climbed 13% to $1.4 billion, and its OC employment fell 4.2% to 137.
• No. 7, Commercial Bank of California in Irvine increased assets 9.3% to $903.2 million, and its net income climbed 67% to $3.9 million.
“We’ve been able to attract good talent and good customers,” Chief Executive Ash Patel said (see separate article, page 28).
Its employment fell 18% to 63, which Patel said is a temporary change due to a transition in its leadership team.
• No. 10, U.S. Metro Bank reported a 32% increase in assets to $347.4 million after having a 72% increase in the prior year.
The bank, which was under regulatory consent orders from 2013 to 2015, raised $21 million in capital early last year to help finance expansion of branches and lending.
• No. 12, California First National Bancorp in Irvine, or CalFirst, reported a 56% assets decline to $298.7 million after its regulator advised it to cease originating syndicated commercial loans and cut its leveraged loans concentration.
• Blue Gate Bank made its first appearance on the list last year, reporting $93 million in assets, good for 17th. It dropped off the list this year after being acquired by large shareholder Big Poppy Holdings of Santa Rosa. Chris Walsh, director of banking, was named president of 13th-ranked Partners Bank of California in Mission Viejo.
Partners’ assets grew 14% to $213.9 million, and its profit tripled to $872,000.
• Santa Ana-based Infinity Bank, which launched in February, makes its first appearance at 17th with $43.3 million in assets.
Founder, President and Chief Executive Bala Balkrishna was previously chief executive of Commercial Bank of California. He serves on the bank’s board, along with Glenn Stearns, founder of Stearns Lending LLC, and Cal Pacific Homes Chief Executive Cary Bren.
