American Business Bank is expanding its Woodland Hills regional office two years after moving into the area. The bank will move to a 2,400-square-foot space in Warner Center and double its relationship managers to four. The expansion is the latest for the seven-year-old bank, which has also opened regional offices in Orange County and is moving into the South Bay and Ontario. The San Fernando Valley operation is the second after Orange County to reach the critical mass required to establish a permanent location in the area. “The reason to have an office in the San Fernando Valley is to find and house great bankers, because somebody who lives in Calabasas or Thousand Oaks or Valencia and is a quality relationship manager, we want that individual on our team,” said Don Johnson, president and CEO for American Business Bank. “And that office gives us an opportunity to find people who would not drive to downtown L.A.” The bank’s expansion strategy is to install executives in key strategic areas. Once the business in the area reaches a critical mass, typically $30 million or more in deposits, American Business Bank opens a permanent location and seeks additional staffing. But it is the executive, not the geography that drives the business. “In the old days, once you cornered a market you went north or south,” said Johnson. “Today, I could find a good banker in Phoenix or Las Vegas or Dallas, and with technology and conferencing I can put a beachhead in those cities. Our marketplace is not driven by advertising. It’s driven by good bankers who can generate and find and handle good accounts wherever they may be.” American Business Bank focuses on businesses with revenues between $5 million and $100 million annually, with the majority in the $5 million to $30 million range, said Gary A. Coleman, regional vice president for the San Fernando Valley area. “Our region currently has $20 million in loans outstanding, and naturally as we hire more people we would like to expand that,” Coleman said. The bankers see the Valley as a lucrative marketplace not only because of the number of businesses housed here, but also because the region includes a diverse cross-section of companies. “You can go to Vernon and find a lot of manufacturers, but no professionals. The Westside has professionals but no manufacturing,” Johnson said. “The San Fernando Valley has a tremendous mix of manufacturing, professionals, distribution and schools.” A rising prime rate has not seemed to dampen lending activity, particularly in the middle market. A study published by the American Bankers Association last year found that commercial lending activity in the middle market was up considerably despite rate increases. One reason is that, despite the increases, long term interest rates for commercial borrowers, which are based on a variety of factors and have not been rising with the short term prime rate, still remain well in tow. “On a year-over-year basis (credit demand) is growing at a rate in excess of 10 percent,” said Keith Leggett, senior economist with the ABA, “which is fairly strong when you consider that we went through a three -year period when there was virtually no business loan demand.” At the same time, the economic recovery is in full swing, and businesses, now running at capacity, are in need of funding to expand. On a national basis, the GDP has been growing in excess of 3 percent, a rate that matches what economists generally believe is the long-term increase required to sustain a healthy economy, and durable orders and plant and facility utilization are all showing strong performance, Leggett said. “The economy is humming along at full tilt,” he added. “So naturally, what is going to occur? Businesses are going to have to start to expand their investment in plants and equipment, and they’re going to borrow to finance that, so we’re going to see greater demand for credit.” .