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Thursday, Mar 28, 2024

Banks Clamor to Fill Local Financial Void

Something of a dogfight is underway in Santa Clarita as several newcomers vie to fill the void left since the sale of the area’s pre-eminent community bank. In a little more than a year, at least four banks have either started up or opened branches in the area, hoping to grab the hearts, savings and loans of residents and businesses, many of whom have preferred banking with local institutions. “We knew the marketplace, more than half my employees live in the area, so we felt a strong affinity to the community,” said Tamara Gurney, CEO at Mission Valley Bank, an independent bank in Sun Valley that opened a branch in Santa Clarita about a year ago. “We saw a strong opportunity when the only community bank there went away.” Bankers say that, while many residents are content to bank with the larger players, small- and mid-sized businesses prefer working with local banks. Because of their smaller size, these banks often know the local businesses well, and can provide products better suited to their needs. Business owners can work directly with decision makers and lending officers can authorize loans and other credit approvals onsite, saving time. As banks consolidated however, several independent banks that operated in Santa Clarita were swallowed up by larger players. And by the time Valencia Bank and Trust was sold to the parent company of Union Bank of California in 2002, no independents remained in the area. Seeing an opportunity, Community Bank of Pasadena opened a loan office in the area almost immediately after the sale of Valencia bank. That move was followed by the organization and launch of Bank of Santa Clarita and the addition of a Preferred Bank branch in 2004. Last year, Mission Valley Bank opened its branch and this month, Santa Clara Valley Bank will hold its grand opening. Meanwhile, California United Bank has indicated that it is interested in opening in Santa Clarita and Bank of Santa Clarita just announced its second branch will open in the area next year. “It’s a very difficult community for outsiders to come into and try to establish a base of new business,” said James D. Hicken, president and CEO of Bank of Santa Clarita. “People here want to do business with local people.” Although Bank of Santa Clarita is the only community bank so far with headquarters in the area, the other banks have sought to establish themselves in the community by recruiting local banking executives formerly with Valencia bank and the other independents. “Most of our staff is from the former Valencia Bank and Trust,” said Michael Hause, president and CEO of Santa Clara Valley Bank which operates in Santa Paula and Fillmore. ” We hire successful bankers who are known and have networks in the community and can get the word out about what we do.” It’s also not gone unnoticed by competitors that Santa Clara Valley Bank uses a logo that reads, “SCV Bank,” an abbreviation, competitors say, that may be interpreted as the Santa Clarita Valley. But Hause, who counters that Santa Clarita, after all, means little Santa Clara, said his intention is to capitalize on what he believes will be a growth in population along the so-called Highway 126 corridor that stretches west from Santa Clarita to Fillmore. “Our footprint is the Santa Clara River communities, and we consider Santa Clarita part of that,” said Hause. “In light of the Newhall Ranch development, Santa Clarita will move toward Ventura County. Our Fillmore branch is 18 miles from Valencia, so we have room for infill between those.” Preferred Bank, a commercial bank headquartered in Los Angeles, also moved into the Santa Clarita market by taking advantage of local bankers. “We go out and recruit qualified bankers,” said Li Yu, chairman and CEO of Preferred Bank. “One that came our way is a Valencia resident. He indicated the market is good, and he has a lot of relationships in the area. We decided the area is not only fast growing, but also presented some opportunities.” The question for all these players is whether they can truly find a welcome mat in the community. Several of the bankers said that they have become very active in community affairs in order to raise their profiles. Others are embarking on advertising campaigns to help establish an image in the community. And still others hope that aggressive expansion will help them to secure their positions. “We intend on opening multiple branches sooner rather than later,” said Hicken. “You will find us moving with additional branches across the Santa Clarita Valley. As we do that, it makes it more difficult for competitors to gain a foothold.”

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