The banking industry may not be back to full strength, but bank M&A is becoming a booming business.
Encino’s California United Bank became the latest in a string of local banks to gobble up a rival after announcing plans last week to acquire California Oaks State Bank, a small Thousand Oaks institution, for $17.3 million.
The deal, which is expected to close in the fourth quarter, comes just a week after Grandpoint Capital Inc., a downtown L.A. holding company, announced the acquisition of two small banks in Arizona. Other recent deals include Grandpoint’s July 14 acquisition of First Commerce Bank in Encino, and the July 20 merger of California General Bank and Professional Business Bank, both in Pasadena.
“There is a significant pickup in activity,” said Richard Levenson, president of Western Financial Corp., a San Diego investment banking firm with a number of community bank clients. “We tend to do things in this industry in cycles and right now we’re moving into a cycle where there’s going to be continued merger and acquisition activity.”
Levenson cited several possible reasons for the activity, including regulatory changes that have encouraged industry consolidation. Additionally, failed-bank deals have become less attractive as more healthy institutions have begun bidding for assets, which has pushed up prices.
Perhaps most important is a growing sense, right or wrong, that the market is near the bottom. Levenson said that has convinced bank boards to use their capital and seize opportunities before a possible rebound.
“There’s a general sense that the opportunities are here, that now is the time to start doing something,” he said. “I could see another 12 to 24 months of activity.”
Indeed, California United may not be done making deals. Chief Executive David Rainer said the bank has plenty of capital and will continue to look for opportunities to expand into key markets around Los Angeles.
“We’re definitely in a growth phase,” he said.
Opened in 2005, California United has opened four loan production offices in the past two years, bringing its total footprint to seven locations prior to the acquisition.
The bank said it will pay for the California Oaks deal through a combination of cash and stock. The combined bank will have assets of nearly $670 million.
Higher Education
UCLA’s business school is gearing up for the inaugural run of its so-called Retirement Advisor University, which bills itself as the country’s “first retirement planning certification program offered by a nationally recognized institution of higher learning.”
The UCLA Anderson School of Management has partnered with consulting firm 401kExchange to offer the program, which will train working financial professionals in the intricacies of retirement planning.
The program, which will include a brief session at UCLA and months of online classes, has been in development since 2009. On Sept. 29, the program will open for students.
No Account
More than 1 million people in Los Angeles do not have an account at a bank or similar financial institution, according to a recent study by the Pew Charitable Trusts.
Of these so-called unbanked individuals, nearly two-thirds have never had a bank account.
In the study, which surveyed 2,000 low-income individuals in Los Angeles, many of the respondents cited frustration over bank fees, language barriers and inconvenient hours of operations as deterrents in getting or keeping a bank account.
“American families without a bank account live in a dangerous financial world,” Pew said in a statement. “Lacking access to government-insured savings or opportunities to build credit, they not only incur risks of theft, fraud and loss, but … they also become prey to expensive predatory products and services that make it harder for them to achieve financial security.”
C-Suite News
The California and Nevada Credit Union Leagues, a joint trade association headquartered in Ontario, announced that Diana Dykstra has been appointed chief executive, effective Oct. 18. … Chicago-based auditing firm Grant Thornton LLP has hired Shawn Stewart as an executive director in the business service practice in the firm’s downtown L.A. office. … Edward Biebrich Jr., chief financial officer of CVB Financial Corp., said he will postpone his retirement, which had been previously scheduled for the end of the year, in order to assist the company with a Securities and Exchange Commission inquiry. CVB, the Ontario parent of Citizens Business Bank, recently announced that regulators are reviewing the company’s methodology in accounting for loan losses.
Staff reporter Richard Clough can be reached at [email protected] or at (323) 549-5225, ext. 251.
