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Friday, Mar 29, 2024

Closure Opened An Opportunity

The lone office of failed Western Commercial Bank in Woodland Hills is now operating as a branch of First California Bank, which seized the opportunity to acquire the institution and expand its presence in the West Valley. “The Woodland Hills office was a great strategic fit for us,” said C. G. Kum, president and chief executive officer of First California Financial Group. “We currently have an office in Encino but we always felt the need to have presence in the western part of the valley, so this was very attractive to us.” First California Financial Group, Inc. the holding company of First California Bank, assumed all of the deposits and substantially all of the assets of Western Commercial Bank after federal regulators closed the Woodland Hills small business lender earlier this month. Western Commercial Bank had been struggling with poor quality loans and inadequate capital and state and federal regulators had warned the bank to take actions to resolve its “unsafe or unsound banking practices”. A final warning was delivered in August and the bank was asked to find an investor or buyer to rescue the bank. On Nov. 5 Western Commercial Bank became the 141st FDIC-insured institution to fail in the nation this year, and the eleventh in California. In keeping with First California Bank’s growth strategy, the failure provided an opportunity to grow financially and expand geographically, increasing First California Bank’s market share in Southern California. “It allowed us to pick up some earning assets and some low cost core deposits,” Kum said. As a result of the acquisition First California assumed approximately $101.1 million in total deposits and $83.9 million in total loans, with little risk of losses. Loans covered All of the loans purchased from the FDIC are covered under loss-sharing agreements that afford First California Bank significant protection from losses, Kum said. Currently First California Bank has assets of $1.50 billion. The company specializes in serving the commercial market, particularly small- and middle-sized businesses, professional firms and commercial real estate development and construction companies through 17 full-service branch offices in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties. Western Commercial Bank’s 300-400 client base, mostly small to middle market business owners with credit needs similar to those of First California Bank, was also an attractive element of the acquisition. “From a client standpoint the bank [Western Commercial bank] did a good job of recruiting customers,” said Kum, who anticipates those clients will integrate well into the First California Bank culture. “Clients should actually feel better, we are very strongly capitalized, there’s no need to fear the bank failing, and we will be able to provide much broader services than Western Commercial Bank did,” he said. As an example, customers of Western Commercial Bank – which did not have any ATMs – will now be able to use First California Bank’s ATMs in all six counties. First California also offers a more sophisticated line of electronic banking products that are much broader in range, said Kum, including enhanced remote deposit capture capabilities that allow clients to forward deposits electronically without having to come to the bank. Overall, Kum said the integration of Western Commercial Bank into their system will be very smooth and should not impact customers. First California Bank has retained some key employees from Western Commercial Bank, according to Kum.

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