“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 of Tri Counties, the bank operating unit of TriCo Bancshares.
Smith said the plans are to 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 … 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 fallout 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, Smith said.
With $8.1 billion in assets, Tri Counties is among the largest community banks in California. Earlier this summer, it also announced plans to acquire Valley Republic Bancorp in Bakersfield.
The proposed acquisition of Valley Republic Bancorp in Kern County’s largest city, just north of L.A. 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.
