Banks operating in Orange County are attracting more deposits with fewer employees and branches, based on the Business Journal’s annual list.
Deposits at the 44 biggest commercial banks rose 9% to $119.9 billion in the 12 months ended June 30, when banks reported employment declined 2.8% to 17,546 and the number of branches fell 1.3% to 614.
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.
• There were no changes in the top 10, though it’s notable how much faster No. 2, Bank of America Corp., and No. 3, JPMorgan Chase & Co., grew compared to troubled No. 1, Wells Fargo & Co.
Bank of America, based in Charlotte, N.C., increased deposits 10.6% to $21.5 billion while deposits at JPMorgan in New York rose 16.5% to $14.9 billion. Wells Fargo of San Francisco, meanwhile, grew deposits 2.2% to $22.9 billion.
“We don’t focus on Wells Fargo,” Mike Shihad, Bank of America’s region executive for greater Orange County and a managing director. “What we do every single day is what is right for the customer. When we work in the client’s best interests, they tend to bring their other businesses.”
He said Bank of America has a “high-tech, high-touch” strategy, encouraging customers to bank online and inviting them into its branches to discuss needs like mortgages, retirement planning or small-business loans.
The result has been a $1 billion annual increase in deposits for each of the past five years.
Though Wells Fargo has well-known retail problems, the bank managed to boost OC deposits by $492 million to retain the top spot in the county.
“We believe we have the best team in the financial services industry,” said Keith Kobata, the new Wells Fargo president in OC (see story, page 24).
Wells Fargo reported a 6.9% drop in OC employment to 3,565 as Bank of America maintained its 4,800 workforce and JPMorgan increased its 1.9% to 1,700.
The top three banks accounted for $4.66 billion, or 47%, of the $9.87 billion in deposit growth in OC.
Widespread Growth
Widespread growth in deposits continued as 22 banks reported increases higher than 10%, the same as last year.
• First Foundation Bank in Irvine moved up one spot to No. 13, reporting a 38% rise in deposits to $2.4 billion, the most growth among the top 35. Chief Executive Scott Kavanaugh told the Business Journal in October that most of its revenue growth was organic. It was also aided by acquisitions, such as when it bought two branches from Pacific Western Bank in 2016 that added $200 million in deposits.
• No. 16, Walnut Creek-based Mechanics Bank, increased deposits 22% to $1.53 billion. The bank, which climbed two spots, merged with Irvine-based California Republic Bancorp in 2016.
Employment Data
• The biggest employment increase was reported by No. 34, CommerceWest Bank, where staff climbed 23% to 80 as deposits rose 11% to $437.9 million.
• Other notable employee increases came at No. 10, Pacific Western Bank of Brea, up 21% to 238; No. 14, Pacific Premier Bank in Irvine, up 19% to 328, and No. 8, Opus Bank of Irvine, up 15% to 376.
Still, a dozen banks reported declines in employment.
• Staff at No. 4, MUFG Union, fell 13% to 1,225. Its deposits climbed at a more moderate pace than rivals, 2.8% to $6.6 billion.
• No. 7, U.S. Bank reported a 17% employment drop to 1,208, a misleading number because the bank has recategorized some branches and employees who were previously included in prior years, according to Market President Joseph Hensley.
“We’re investing more throughout Southern California,” including plans to hire more in OC.
• Los Angeles-based Bank of Hope debuts on the list at No. 23 with deposits climbing 4% to $954 million. It’s a combination of two former list members, BBCN Bancorp Inc. in Buena Park and Wilshire Bancorp Inc. in L.A. Its OC head count declined 12% to 68 as branches fell from seven to five.
• Three other banks also made their first appearances: No. 40, CTBC Bank Corp. of Taiwan, whose OC deposits climbed 45% to $277.2 million; No. 43, Pacific City Bank in L.A., up 14% to $212.6 million; and No. 44, Shinhan Bank America of Seoul, up 32% to $206.6 million.
CalFirst Plunge
• Only five banks reported declines in deposits, the most notable Irvine-based California First National Bank, also known as CalFirst, whose deposits plunged 27% to $499.2 million. It fell six spots on the list to No. 32.
CalFirst stopped originating commercial loans last year after its regulator, the Office of the Comptroller of the Currency, asked it to substantially reduce its concentration of leveraged loans. The restrictions remained in place as of Jan. 30, according to a quarterly earnings report. The company also cut employment 18% to 62.
• Santa Ana-based Banc of California Inc., which has been restructuring, trimmed its branch count, falling from 13 to 10.
Thirty-five banks maintained branch numbers, five closed some locations, and two reported increases.
