Rick Smith, chairman, president and CEO of Chico-based Tri-Counties Bank.

Rick Smith, chairman, president and CEO of Chico-based Tri-Counties Bank.

Chico-based TriCo Bancshares is pushing into Los Angeles County with the opening of a loan production center.

The loan production center is generally viewed as a first step before a bank makes an acquisition in a geographic region.

“Generally, what happens is we’ll open a loan production office and ultimately it becomes a branch, but it’s usually after we have a certain number of customers,” said Rick Smith, chairman, president and chief executive officer of Tri Counties, the bank operating unit of TriCo Bancshares.


Smith said the plans are to eventually build the production center into a major lending center for commercial real estate loans, then possibly acquire a commercial bank to complement its new foray. 


“It’s a little bit early (for an acquisition) because we want to make sure we can establish an identity down there. ... It’s about the trust relationship, and you can’t just buy that. But you can earn it. We’re in the earning phase right now, and assuming we are successful, that would certainly create another opportunity,” Smith said.


“There is going to be continued bank consolidation, and there’s generally a fall out of customers who may not fit the acquirer’s way of doing business. This could create some additional M&A down the road for us,” he added.


Tri Counties opened the lending center in August, along with other offices in Irvine and San Diego at the same, Smith said.

Tri Counties, an $8.1 billion-in-asset-institution, and among the largest of community banks in California, is an acquisitive bank. Earlier this summer it also announced plans to acquire Valley Republic Bancorp in Bakersfield.

The proposed acquisition of Valley Republic in L.A. County’s northern suburb in Kern County would represent Tri Counties' fifth in a decade. Smith said he expects his latest acquisition to close before the end of 2021.


Tri Counties has previously looked to buy banks outside of California in border states like Arizona, Nevada and Oregon, but finding one to fit the bank’s community banking profile has become challenging. 


“We do look, and we have been serious about it. But it’s getting more and more difficult to find one," Smith said.

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