Given the recent downfall of several major banks and the chaotic state of the current banking market, local banks are celebrating the narrow gains they’ve made in the opening months of 2023.
“Another good quarter for us, but what a quarter it was,” said Robert Setrakian, chair of the Glendale-based Golden State Bank, in a recent statement to investors accompanying the bank’s first-quarter earnings release. “(There) are major challenges facing the financial industry today.”
Golden State’s total assets increased by $24.8 million, or 3.8%, to $673.6 million in the first quarter according to the bank’s May 3 earnings release. Deposits increased by $12.4 million, or 2.2%, to $573.6 million. As of March 31, the bank’s net income has risen to $2.1 million from $1.36 million at the same time last year.
Setrakian attributed the bank’s gains to its defensive strategy, which has grown increasingly conservative and risk-averse in light of continued turmoil in the banking sector. Mercedes N. Herrera, the bank’s president and chief executive, also contrasted the bank’s guarded approach to its risk-heavy competitors.Â
“As a former bank regulator, it is essential to have a bank that operates with a disciplined approach to protecting depositors’ money. Recent bank failures have highlighted the importance of a safe and sound approach to banking,” Herrera said in a statement to investors. “We are proud to say we kept things simple by deploying most of our community deposits back into our communities in the form of quality loans and keeping our reserves in cash at the Fed or short-term securities.”
Golden State wasn’t the only bank in the Valley to hold the position that no news was good news for investors in today’s environment. Mission Valley Bank lauded the results of its own slow-and-steady approach in light of the unsteady banking environment, according to the bank’s first-quarter earnings release published May 1.
The Sun Valley-based community bank, a subsidiary of Mission Valley Bancorp, reported a 1.4% decrease in total assets in the first quarter of 2023, from $553.3 million to $545.3 million. Total deposits were $447.2 million, a decrease of $20 million, or 4.29%.
But the bank reported net income of $1.7 million at the close of 2023’s first quarter, a 33% increase from last year’s first quarter net income. Tamara Gurney, chief executive and president of Mission Valley Bank, told investors the bank was “pleased to report strong operating results for the first quarter of 2023 despite the challenging headwinds faced by the banking industry from the recent bank failures.”
“We were able to achieve these results due to the strong foundation established over the past years, and because our business model is primarily focused on serving small businesses in our local communities, fundamentally different from the banks that failed recently,” Gurney said in a statement. “We continue to believe that we are well positioned to withstand the current and potential changes that the remainder of 2023 may bring based on our strong balance sheet, capital and liquidity positions, and the proactive measures that we have taken to bolster our liquidity and deposit funding sources.”