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Thursday, Jun 8, 2023

Commercial Bank Looks To Visa Exec on Fintech

Commercial Bank of California recently named former Visa Inc. executive Shahzad Khan as its chief growth and strategy officer.

He will lead payment solutions and identify new opportunities, including investments in financial technology product development, incubating startups and possibly acquiring or partnering with technology companies.

“We are building a next-generation payment processing,” Khan said in an interview.

Commercial Bank has invested over the last year roughly $6 million into researching and developing fintech products – including partnering with Atlanta-based automated clearinghouse payment processing company VeriCheck Inc. – to build a new payments platform.

The automated clearing house, or ACH, platform is an electronic funds-transfer system utilized by banks and credit unions, and run by Herndon, Va.-based, not-for-profit National Automated Clearing House Association. This payment system handles payroll, direct deposit, tax refunds, consumer bills, tax payments and many more payment services.

Under Khan’s leadership, Commercial Bank plans to invest an additional $10 million in fintech product development in 2019.

“We are already developing our own software, incubating startups, and acquiring or partnering with tech companies to build proprietary niche industry apps to achieve this for our clients,” Khan said. “We are actively looking at certain organizations to complement our abilities to support bank needs.”

One startup that Commercial Bank helped incubate was downtown-based Camino Financial Inc., which aims to provide funding to small Latino-run businesses that find it difficult to borrow from a bank. Applications for microloans, ranging from $10,000 to $100,000, can typically get approved and funded within a day of application.

The Irvine-based bank, which entered the L.A. market and went public in 2016 through a reverse merger with Brentwood-based National Bank of California, was taken private in early 2018 by a group of investors that includes Alex Meruelo, a longtime L.A. investor and entrepreneur. It is now on an ambitious growth track, with expansion already underway in downtown headed by Claudia Bodan, who joined Commercial Bank as executive vice president and market president for Los Angeles County in September.

Commercial Bank Chief Executive Ash Patel has stated previously that the institution may make strategic acquisitions with values of as much as $50 million. One area of interest is so-called fintech businesses. The use of smartphones for mobile banking, investing services and cryptocurrency are examples of technologies aiming to make financial services more accessible to the public.

Possible acquisition could come in

the areas of merchant-card or payment


• • •

Transom Purchases SemiTorr Group

El Segundo-based private equity firm Transom Capital Group has acquired SemiTorr Group Inc., a Tualatin, Ore.-based distributor of energy and chemical products, from Riverlake Partners.

SemiTorr, which has eight distribution centers across the United States, distributes gas and fluid handling systems, and parts supporting the microelectronics, sanitary and industrial markets.

Terms of the transaction with Portland, Ore.-based private equity firm Riverlake were not disclosed.

The latest Transom acquisition comes on the heels of its October purchase of Gene Juarez Salons & Spas, a Seattle fashion and beauty brand, from private equity firm Evergreen Pacific Partners.

Transom also sold in October Eastern Acoustics Works, a unit of Loud Audio, to RCF Group, based in Italy. That was the third and final divestiture by Transom of a business line of Woodinville, Wash.-based Loud Audio since Transom acquired the company in October 2017. Transom said in October that the sale to RCF Group allows Loud Audio to develop and expand its Mackie brand of amplifiers, headphones, mixers, recording equipment, portable PA systems, speakers and studio monitoring equipment.

Have a deal tip? Pat Maio can be reached at pmaio@labusinessjournal.com or (323) 556-8329.

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