L.A. County is a hot financial market.
Local deposits at the 50 largest banks and other financial institutions with county operations grew by 6.6 percent to nearly $400 billion as of June 30, according to data collected by the Business Journal.
That growth rate outpaced the 5.5 percent national growth rate for the 50 financial institutions on the publication’s annual list of financial institutions as ranked by deposits.
“This is a sign of the good financial health of businesses in Los Angeles,” said Wade Francis, president of Unicon Financial Services Inc., a Long Beach bank consultancy. “Most of these large financial institutions have a heavy focus on business deposits, and right now, with businesses doing well, they are putting more money in the bank.”
Francis said the rapid growth of businesses in Silicon Beach may be part of the reason the deposit growth rate in Los Angeles County is slightly outpacing the national level.
The top five financial institutions on the list remained largely unchanged in both rank and market share over the past year, led by Charlotte, N.C.-based Bank of America with $76.7 billion in L.A. County deposits for a 19 percent share.
The 7 percent growth of deposits at Bank of America over last year came despite the number of L.A. County branches holding steady at 246.
Armin Eshaghian, Bank of America’s regional executive for consumer banking in Los Angeles, attributed the deposit growth in part to a strategy of offering customers more digital and mobile phone services. For example, he said, a couple of years ago the bank launched a feature that allows customers to use apps on their mobile phones to set up appointments with bank specialists at their nearest branch.
“We are trying to make it easier for customers to deposit their funds and interact with Bank of America,” Eshaghian said.
Rankings and changes
San Francisco-based Wells Fargo was No. 2 with $57.4 billion in deposits for a 14.2 percent market share, though deposits rose less, at about 3.5 percent from last year. Francis said the slower growth rate may be due in part to the massive fraudulent account scandal at the bank, where bank employees opened accounts in customers’ names without their consent or knowledge.
Three New York-based banks followed on the list – JPMorganChase Bank at No. 3 with $48.1 billion in deposits for an 11.9 percent share, followed by No. 4 MUFG Union Bank with $38.2 billion in deposits, a 9.4 percent share, and No. 5 CIT Bank (formerly OneWest Bank) with $29.1 billion in deposits for a 7.2 percent share.
No. 6 City National Bank was the largest locally-based bank on the list; the downtown-based institution had $24.5 billion in deposits for a 6.1 percent market share.
Nos. 7 and 8 on this year’s list, Citibank of New York and Pasadena-based East West Bank, switched places from last year as Citibank’s L.A. County deposits grew slightly more to $17.8 billion. Minneapolis-based U.S. Bank and San Francisco-based Bank of the West rounded out the top 10, with $8.7 billion and $7.7 billion in L.A. County deposits, respectively.
The biggest mover on the list was Preferred Bank of downtown, which tied with Koreatown-based Hanmi Bank at No. 19, moving up from No. 22 last year as its L.A. County deposits grew to $2.6 billion.
The only new addition to the list was MidFirst Bank of Oklahoma City, which acquired First Century Bank in July 2016. With $800 million in deposits as of June 30, it tied with three others at No. 33.
Credit unions see growth
Locally-based credit unions were even more popular places for Angelenos to make deposits, as L.A. County deposits shot up 9.3 percent to $39.2 billion, according to the Business Journal’s list of the institutions ranked by assets as of June 30. Assets among the 50 credit unions on the list jumped 8.5 percent to $45.8 billion.
“Credit unions are more focused on individual depositors, and right now, it appears people are saving more in general and choosing to put some of that money in credit unions,” Francis said. “It also helps that credit unions tend to have lower fee structures than banks.”
Yet despite the huge increases in deposits and assets, the 50 credit unions on the list reported a cumulative net income drop of $7 million to $130.5 million.
Retaining the top spot was Burbank-based Logix Federal Credit Union, with $5.1 billion in assets and $4.1 billion in deposits.
Kinecta Federal Credit Union of Manhattan Beach and Wescom Credit Union of Pasadena retained their second- and third-place rankings, respectively, with Kinecta reporting $4 billion in assets and $3.6 billion in deposits and Wescom reporting $3.7 billion in assets and $2.9 billion in deposits.
California Credit Union of Glendale shot up to No. 4 from No. 6 as its assets doubled to $3 billion. As a result, Unity Financial Credit Union of Torrance fell to No. 5 with $2.7 billion.
