Orange County-based commercial banks boosted assets a normally admirable 14% to $36 billion in the 12 months ended June 30.
However, that growth rate pales in comparison to a 39% spurt last year and 38% the year before.
The slowdown in asset growth can be attributed to the two biggest banks. No. 1, Banc of California Inc. in Santa Ana, reported assets climbed 2% to $10.4 billion, followed by No. 2, Opus Bank in Irvine, where assets increased 2.8% to $7.7 billion.
A year ago, Banc of California’s assets increased 58% while Opus Bank’s assets climbed 28%. Growth has slowed at both banks due to problematic loans and turmoil in management.
This week’s Business Journal list ranks the 19 banks in OC by assets. It also provides net income, the number of local employees, and indicators of the institutions’ health for the first six months of the year, though that information doesn’t affect the rankings.
The banks reported combined net income of $150 million, up a respectable 10% but again meager when compared to 31% growth in the prior year. Their OC-based employee count declined 12% to 2,312.
Sixteen banks reported an increase in assets, while two declined, and a third didn’t have assets to report because it just opened for business this year.
Ten of the largest banks are headquartered in business center Irvine.
Mixed Results
• Banc of California reported that net income in the first half of this year declined 21% to $42.8 million. It employs 500 in OC, down 47% from a year earlier after shedding its home mortgage unit due to its lower-margin products.
• Opus Bank reported profit fell 23% to $25.9 million in the first half. Its OC employee count fell 13% to 327.
• Pacific Premier Bank is No. 3 with $6.4 billion in assets, boosted by the acquisition of Heritage Oaks Bancorp of Paso Robles (see separate story, page 1). Net income climbed 31% to $28 million. The bank increased OC staff 55% to 275.
“We really have a fantastic team at the bank,” Chief Executive Steve Gardner said. “We have this philosophy of continuous improvement in the organization.”
• Irvine-based First Foundation Inc. remained No. 4 as assets climbed 12% to $3.9 billion. The bank, which has a wealth-management unit, reported net income more than doubled to $16.7 million in the first half of the year. It employs 249 in OC, a 16% jump from a year earlier.
• Irvine-based Plaza Bank climbed to the fifth spot, reporting a 14% increase in assets to $1.3 billion and a 52% profit increase to $7.9 million. It employs 80.
The bank, which was majority owned by Carpenter & Co., won’t be on the list next year after being acquired last week by Pacific Premier.
More Changes
• No. 6, Costa Mesa-based Pacific Mercantile Bank, reported the biggest shift in profit with net income of $4.5 million, up from a $4 million loss in the same period a year earlier. Its assets also rose 11% to $1.2 billion. Tom Vertin, who was named chief executive early last year, said the bank now has a healthy pipeline that should result in more client acquisitions.
• No. 9, California First National Bancorp in Irvine, reported a 21% decline in assets to $673 million because it hasn’t originated commercial loans due to concerns of regulators (see separate article, page 4).
• No. 8, Commercial Bank of California in Irvine increased assets 6.2% to $826 million, and its net income climbed 80% to $2.3 million. The bank’s employee count increased 49% to 70. It acquired Brentwood-based National Bank of California early last year.
“We increased our footprint to include Los Angeles,” Chief Executive Ash Patel said in an interview. “The majority of our growth came from Los Angeles because of the acquisition.”
• No. 14, US Metro Bank of Garden Grove, reported a 72% increase in assets to $263.8 million, and its net income climbed fourfold from $1.1 million to $5.4 million.
“This year is much better,” said Chief Executive Dong Il Kim. He said the bank opened new branches, increased deposits and made more than $150 million in loans through the Small Business Administration.
The bank, which was under regulatory consent orders from 2013 to 2015, raised $21 million in capital this past spring to help finance expansion of branches and lending.
Newcomer
Blue Gate Bank started doing business in February for a first list appearance at No. 17 with $93 million in assets.
“There is some consolidation among banks within the past year, and that’s creating some space for the community banks,” said Chris Walsh, managing director of the Costa Mesa-based bank.
