San Diego Business Journal

Seacoast Becomes Part of Federal Reserve System

By Mike Allen Friday, June 20, 2014

Seacoast Commerce Bank, based in Rancho Bernardo and with about $350 million in assets, said it’s joining the Federal Reserve System effective June 25, becoming one of 26 banks in California that belong to the system.

The nation’s central bank provides membership to commercial banks but they must meet certain criteria, including having strong capital reserves and a profitable track record.

Seacoast Commerce CEO Rick Sanborn said by being a member of the Fed, his bank is required to own stock in the San Francisco Federal Reserve Bank which covers nine western states including California, and will receive a 6 percent annual dividend from that stock ownership.

The bank may gain another advantage if it ever decides to form a holding company, which are all regulated by the Fed, doing so would be a much smoother transition, Sanborn said.

While no decision has been made to form a holding company for Seacoast Commerce, that structure can give a bank additional flexibility in terms of raising additional capital, he added.