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Friday, Mar 29, 2024

Community Bank Moves Into Santa Clarita Valley

Community Bank Moves Into Santa Clarita Valley By SHELLY GARCIA Senior Reporter Community Bank had been tossing around the idea of opening offices in the Santa Clarita Valley for several years, so when the area’s last local bank was swallowed up in an acquisition, officials made a move. Late in January, the Pasadena-based commercial bank opened its first office in the Santa Clarita Valley, in an effort to take advantage of what many say is a preference by small- and mid-sized companies to do business with smaller, local banks, not the large ones that have set up shop in Southern California in recent years. The move followed by just months the acquisition of Valencia Bank & Trust, the Santa Clarita Valley’s only community business bank, by San Francisco-based UnionBanCal, parent of Union Bank of California. “A customer of Valencia Bank called through a referral and said we’re not interested in being part of a big bank, so when we got that call that’s what got me going,” said V. Charles Jackson, president and chief executive of Community Bank. “I drove out there and it blew me away.” Community Bank, with 14 branches and assets of more than $1.4 billion, specializes in manufacturing, wholesaling and distribution companies with revenues of $5 million to $50 million. Expansion outside of those business areas is difficult for Community and other small banks, because of the expertise required to evaluate an industry in order to adequately assess the lending risks. Other sources of business But much manufacturing has moved overseas and the number of manufacturing companies has dwindled locally forcing Community Bank to explore other sources of revenue, including a wealth management advisory service that the bank launched at the end of March, while at the same time looking to expand its geographic reach. “I realized the amount of business located in the Santa Clarita area and the type of opportunity it presented,” said Cal Naulls, vice president and relationship manager at Community Bank, a Santa Clarita Valley resident who moved over to the new office from the bank’s Burbank branch. It also has a branch in Glendale. “There’s been a tremendous opportunity for an office like ours because of the changes that have taken place, that being Union Bank purchasing Valencia Bank and Trust. That’s changed a lot of the local feel that existed here for 10 years.” With the acquisition of Valencia Bank last August, small, commercial customers were left with no community bank alternatives. Valencia, which had assets of less than $300 million as an independent bank, now operates as Union Bank, with 260 branch offices and total assets of $37.6 billion. Other banks that operate branches in Santa Clarita and surrounding areas are City National Bank, with assets of almost $12 billion; Bank of the West, whose BancWest Corp. parent has assets of $34.7 billion; Comerica Inc., one of the 20 largest banks in the U.S., Washington Mutual Inc., with total assets of $268 billion and Wells Fargo & Co., with $334 billion in assets. Recruiting customers “A community bank can go in and pick off guys that don’t want to be part of a big bank,” said Jim Pulsipher, partner and head of the financial service practice at Grant Thornton’s Southern California offices. “The customers still want to deal with a smaller community bank and have that personal banking attention they’re not getting from the major money banks.” Pulsipher, who was part of a team that recently completed a survey on community banks for Grant Thornton, said the acquisition of Valencia Bank was still very recent, and he would not be surprised if other community banks tried to enter the market in coming months. The potential for increased competition from similar banks wasn’t lost on Jackson, who was brought into Community Bank less than a year ago to help identify opportunities for expansion and diversification. He chose to enter the Santa Clarita market with a loan production office because it would take less time than setting up a full-service office. “I wanted to move very quickly,” Jackson said. “When you open a full branch, you have to get (different) regulatory approvals. It makes sense for us to get some people in there, and within a year or year and a half we can build a portfolio, then we’ll go for a full branch.”

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