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Thursday, May 30, 2024

Assets Hold Steady at Local, Regional Banks

Regional and community banks saw their assets grow or stay flat for the first six months of the year when compared to the same period a year ago. Additionally, the consolidation expected to take place among those banks has not taken off as capitalization and other issues have slowed that pattern, according to banking industry experts. The San Fernando Valley Business Journal’s Largest Community and Regional Banks List this year features the same banks represented last year and there are only few differences in placement based on assets through the first six months of the year. CapitalSource Bank, with four branches in the greater Valley region, had an 11 percent increase in assets to $7 billion through the second quarter. The institution was No. 8 on the List this year and had been No. 9 the prior year. CapitalSource has branches throughout Southern and Central California, however it also has loan offices across the country, said President Jim Pieczynski. The benefit to the bank is that it becomes more than just a community bank, Pieczynski said. “You get wider network than if you did specialized lending in your local footprint,” Pieczynski said. CapitalSource does specialized lending in health care real estate, security lending and equipment financing. First Republic Bank, based in San Francisco, tops the List with $31 million in assets. It replaces OneWest Bank, FSB, which now ranks second with $24.9 million in assets through the second quarter. First Republic has shown an aggressive growth posture since it was sold off by Bank of America two years ago. In the Valley, the bank has a single location in Studio City. But early next year, the bank will open a second branch on Ventura Boulevard in Encino. Deposits, loans and wealth management accounts all showed growth in the second quarter, First Republic President and COO Katherine August-deWilde said in a July conference call with analysts to discuss earnings. The bank opened three new branches during the second quarter and 10 others are in the pipeline for the next year to 15 months, August-deWilde said. “Economic conditions in our carefully selected urban coastal markets remain solid,” August-DeWilde said.” Home sales activity continues to be strong, and supply is constrained in each of our markets. Apartment and commercial rents are increasing, and vacancies are decreasing.” First Republic is not the only bank expanding in the Valley region. San Diego-based California Bank & Trust in April opened a branch in Valencia. In February, Opus Bank, based in Irvine, opened a branch in Encino. Opus also recently announced that it was acquiring 10 banking offices from Pacific Western Bank, which includes a location in Encino. In August Plumas Bank, based in Northern California, extended its services into the Los Angeles area with an SBA lending office in Woodland Hills. California Bank & Trust placed No. 6 on the List with $10.8 billion in assets, the same position it occupied in the 2011 List. Pacific Western Bank was No. 10 on the List this year with $5.3 billion in assets for the first six months. First California Bank, however, is scaling back operations. The Westlake Village-based institution this year closed branches in June in Thousand Oaks and Woodland Hills. When the closures were announced, First California CEO C.G. Kum said they were done to keep the bank “efficient and productive.” First California was No. 15 on the List with nearly $2 billion in assets. It had the same position on the 2011 List when the bank reported $1.8 billion in assets. First California was the target of a takeover bid by Pacific Western Bank in May that was turned down despite pressures from some investors to complete the deal. In August, the bank confirmed hiring financial and legal advisors to assess the business and look into strategic alternatives, including a merger or a sale to another bank. With many community banks weakened by the poor economy there has been an expectation that some consolidation would occur in the market, but that has yet to materialize. The most recent move by a Valley bank was the merger valued at $38.2 million between California United Bank, headquartered in Encino, and Premier Commercial Bancorp that shareholders approved in August. Premier Commercial’s branches in Anaheim and Newport Beach/Irvine operate under the California United name. California United ranked No. 17 on the List with $908 million in assets. Barriers to merger and acquisition deals include the new capitalization standards going into effect in 2013 under Basel III and prices of banks having fallen, said Eliot Stark, of Headwaters MB, a Denver-based private investment bank working with financial institutions. Stark said he expects the economy will eventually force bank sales, although they’re likely to occur at a slow, evolving pace to establish an agreement on a market price. “No one wants to sell at book value when a year from now they could find out they could have sold at twice the price,” Stark said. Download the 2012 VALLEY’S LARGEST COMMUNITY & REGIONAL BANKS list (pdf) Download the 2012 VALLEY’S LARGEST NATIONAL BANKS list (pdf)

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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