Expansion Causes Drop in Income for Bank

California United Bank surpassed $500 million in assets in its fifth year of operations but saw a drop in net income for the quarter ended June 30 due in part to the bank’s recent expansion efforts. For the second quarter, California United Bank reported net income of $214 thousand, or $0.04 per diluted share, on assets of $532.0 million. For the same period a year ago, the bank reported net income of $347 thousand or $0.07 per diluted share, on assets of $426.9 million. The decisions made earlier this year to expand the bank’s presence in markets such as Glendale, Santa Monica, and Orange County, required investments in highly talented and experienced bankers among other things, which had an impact on the bank’s income, President and Chief Executive Officer David I. Rainer said. “These decisions resulted in the concomitant increase in non-interest expense including salaries, benefits and office space,” Rainer said. “This was exacerbated by low loan demand by quality borrowers and the additional time required to underwrite and book loans versus deposits. We believe that the franchise building efforts more than justify the short term imbalances and will clearly pay off as our strong loan origination pipeline is realized in coming months.”