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Saturday, Jun 25, 2022
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The Future of Finance

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FRED THIEL
CEO
MARATHON DIGITAL
IRVINE

Exec in OC’s technology circles for almost 30 years, including as CEO of Irvine’s Lantronix. Thiel runs one of country’s leading public cryptocurrency firms out of Irvine Spectrum office.

He says he became interested in cryptocurrency about a decade ago.

“I grew up on a diet of corporate finance and the regulatory framework,” he said. “With my technology background, I understood that systems are all about becoming more efficient. Financial systems are very inefficient.”

THEN: A personal friend became CEO of Marathon’s predecessor, and Thiel joined the board to help it recapitalize. “In 2017, it had a negative net worth. We raised over $500 million in 2020 through public offerings,” Thiel said.

NOW: Thiel became CEO in 2021. “We went from being a tiny little miner to becoming one of the largest in the world.” The publicly traded company (Nasdaq: MARA) reported revenue soared 3,353% to $150.4 million in 2021. It projects almost a $1 billion run rate next year. Firm’s valuation hit a peak of $8 billion late last year. “We’re the fourth or fifth largest holder of bitcoin in the U.S.,” he said in May.

FUTURE: Expects OC’s base of influence in industry to expand. “In Orange County, you have a lot of entrepreneurs who have been successful in other businesses who see the opportunity in blockchain, bitcoin and crypto generally. They’ve started businesses or have been recruited to run businesses.”

IN THEIR WORDS: “The ability to use blockchain to have instantaneous settlement was very attractive,” he said. “Blockchain promised huge efficiency gains in the financial markets. That tickled my interest.”

DANIEL WALKER
CEO
FARMERS & MERCHANTS BANK OF LONG BEACH

W. HENRY WALKER
PRESIDENT
FARMERS & MERCHANTS BANK OF LONG BEACH

Brothers Henry and Dan Walker are the fourth generation of Walkers to work at the bank, which was opened in 1907 by their great-grandfather C.J. Walker. Financial institution, now with 13 branches in OC, reported its OC deposits rose 21% to $4.3 billion, ranking it No. 11 on the Business Journal’s February list of banks with operations here.

THEN: Dan Walker’s first job with the bank was at 14 when he ran the elevator at the institution’s headquarters in Long Beach. Henry Walker took his first job at the bank when he was 16, delivering gingerbread to the branches during the holidays, a family tradition. Both moved up the ranks, working in just about every job at the bank.

“When Henry and I were hired by our grandfather, he told us ‘I expect you to work a half day,’” Dan Walker quipped. “We didn’t realize that was 12 hours.”

NOW: Last year surpassed a major milestone in the banking world—going over $10 billion in assets. Now around $11.5 billion. It ranked near the top 100 in the nation and 15th largest in California as of February. The bank finished 2021 with record high total deposits and net loans, as well as total assets.

FUTURE: F&M continued to go against a banking trend—with three more branches in OC in the works as of earlier this year. “We’d love to expand in Orange County,” Henry Walker said. “We see it as a primary market growth. We have an enormous amount of success here.”

IN THEIR WORDS: At a time when other banks are cutting back their branches in favor of fintech, the Walker brothers believe that young tech savvy kids want to feel safe about their money. “At the end of the day, those same individuals are still stating that they want a relationship, that they be called by a name and that they can call someone by a name that they’re entrusting their funds to,” Dan Walker said. “Bricks-and-mortars are still a requirement for any age of clients. Relationships are the maximum key to our success.”

STEVEN GARDNER
CHAIRMAN, CEO, PRESIDENT
PACIFIC PREMIER BANCORP
IRVINE

Runs one of the largest banks headquartered in Southern California and the largest based in OC, with $21.6 billion in assets. Gardner in 2000 took over a failing Riverside-based bank and moved it to Irvine. He grew the bank organically and through acquisitions and avoided financial disasters such as the subprime mortgage meltdown of 2007-08. One of best-performing stocks of any OC company over past decade. The $1 billion buy of crosstown rival Opus Bank completed last June.

THEN: Said in February that the bank’s “strong 2021 financial performance is reflective of our commercially-focused and diversified business model, the impact of our technology-driven growth strategy, and the strength of our culture centered on continuous improvement.”

NOW: In late April, announcing first-quarter earnings, said Pacific Premier “took a number of actions to position the balance sheet for higher interest rates, including reducing the size and duration of the available-for-sale securities portfolio, increasing our liquidity position, and enhancing our asset sensitivity. The strength of the organization we have built and our proactive approach to risk management has enabled us to capitalize on opportunities that arise in stressed environments.”

FUTURE: “As we navigate the current environment, we are focused on driving new business development, strengthening and deepening our client relationships, continuing to support our dedicated employees, and actively engaging with the communities we serve.”

NOAH KERNER
CEO
ACORNS GROW
IRVINE

Head of OC’s best-known fintech startup. Micro-investing platform Acorns says it has grown into the largest subscription service in U.S. consumer finance, with more than 4.6 million paid subscribers who invest a few dollars regularly through its app. Acorns says it’s helped its customers save and invest over $12.5 billion. It now sports $6.1 billion in assets under management, according to filings with the Securities and Exchange Commission earlier this year.

THEN: Pulled back from a SPAC-led public listing in January, amid a down period for new listings and SPACs in general. At the time, Acorns said its “pre-market value” was $1.5 billion.

NOW: In March, announced it had raised $300 million from private investors. The oversubscribed Series F funding round, led by TPG, an alternatives asset manager, gives Acorns a “private valuation” of $1.9 billion, officials told the Business Journal. “Our ability to secure $300 million in choppy markets at a higher valuation speaks to the strength of Acorns business,” Kerner said at the time.

FUTURE: The total addressable market for Acorns’ services is $100 billion, as 222 million American adults live in household incomes below $100,000, the company said. In November, the company said its 2021 sales would climb 77% to $126 million. It predicts sales will reach $309 million in 2023. Acorns expects to expand its financial wellness system to include customizable portfolios, the ability to add crypto exposure to a diversified portfolio and family-specific offerings. A recently disclosed expansion for Acorns into direct investing should help the app rival other mobile platforms such as Robinhood Markets Inc., plus legacy services like E-Trade and Fidelity.

IN THEIR WORDS: “This capital helps us continue our commitments of building a generational company and putting the responsible tools of wealth-making in everyone’s hands,” Kerner said of the March fundraise.

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