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Friday, Jun 2, 2023

Despite Turmoil, Group Still Pushing for National City Bank

Believe it or not, some folks are still trying to start new banks despite the downturn.

Conditions are not like earlier in this decade when 15 banks opened in four years, but in this economy, any new business venture, particularly a bank, appears to be a big gamble.

Bob Adkins, president and CEO for Ventana National Bank in organization, says his group is still moving forward.

“Clearly this economy impacts everybody, but we feel that it’s still a good time to open the bank, and we have a committed group of founders,” said Adkins, who’s been working on the project since April 2007.

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Initially, his plan was to open in the fall, but then all hell broke loose in the economy, especially in the banking sector.

But the near-crash hasn’t deterred Adkins, a veteran banker who headed up Neighborhood National Bank in National City.

“There remains a strong need for a community bank because of current conditions and the potential for consolidations,” he said. “Once we get our capital raised ($23 million) we’ll be in a strong position with no bad loans on our balance sheet.”

He said Ventana National’s 55 founding investors are committed to raising 20 percent to 25 percent of the capital needed, which still leaves $17 million.

The bank has an office on La Jolla Village Drive in University Towne Center, though Adkins wouldn’t reveal terms of the lease.

The story at Gateway Pacific Bank is similar, with a group in National City looking to open that city’s first community bank.

After the departure of point man Garry Barnes, the bank hired Rick Mandelbaum to spearhead the effort. Mandelbaum is the former chief executive for Manchester Financial Bank in organization.

Gateway Pacific has approvals from both state and federal regulators, and is in the process of raising $15 million before opening its doors.

As for Manchester Financial, that effort may be on hold given the fact that primary investor Doug Manchester has taken some hard hits in his investments and is no longer shouldering $19 million of the promised $20 million in capital. A call to Manchester Financial was not returned by deadline.

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San Diego Trust Posts Lower Profits: Five-year-old San Diego Trust Bank reported net income of $112,000 for the fourth quarter, up 5 percent from the 2007 fourth quarter. For 2008, the bank reported net profit of $534,000, down from a net profit of $768,000 for 2007.

The bank said increased expenses, mostly associated with opening a branch in Encinitas, depressed net earnings for last year.

As of Dec. 31, the bank had a loan portfolio of $60.8 million, down by $10 million from the prior year. Total assets climbed to $112.2 million from the prior year when it was at $106.4 million.

The bank said it held zero nonperforming loans, nor has had one since it opened in 2003.

As of Dec. 31, the bank had some of the strongest capital ratios of any community bank, with leveraged capital at 14.6 percent and total risk based at 18.26 percent.

CEO Michael Perry said his strong capital base was a key reason for not applying to the U.S. Treasury’s Troubled Asset Relief Program, or TARP.

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Torrey Pines Bank Records Loss On Investments: Torrey Pines Bank, based in Carmel Valley with $860 million in assets, reported a net loss of $12.4 million for 2008, compared to a net profit of $3.7 million for 2007.

The bank wrote down $21 million in the value of preferred stock it’s holding in other banks due to the turmoil affecting the industry.

CEO Gary Cady said though many of the banks were still paying dividends, he took a conservative approach and wrote down the investment to pennies on the dollar.

In addition, Torrey Pines, a subsidiary of Las Vegas-based Western Alliance Bancorp, also incurred $6 million in losses resulting from its launch of PartnersFirst, an affinity credit card unit.

Loans at the bank grew 32 percent to $708 million, while deposits increased 51 percent to $707 million.

Nonperforming assets stood at about $4 million, or 0.48 percent of total assets, a negligible amount.

Capital isn’t a problem with total risk based at 10.7 percent, plus the bank received $10 million in funds from TARP.

The bank plans to open an office in downtown Los Angeles sometime this quarter, and has already hired 12 employees for the new branch, Cady said.

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Mission Oaks Inks Agreement: Mission Oaks National Bank signed a formal agreement with the Office of the Comptroller of the Currency to take certain corrective actions regarding operations.

CEO Gary Votapka said the focus of the order signed in December concerns the bank’s reliance on non-core deposits, such as brokered deposits coming from middlemen or advances from the Federal Home Loan Bank.

About 39 percent of the bank’s $180 million in deposits was non-core, which regulators deem too high, he said.

OCC regulators want the bank to formalize its processes covering its underwriting of loans.

Mission Oaks had $4.6 million in nonperforming assets, or about 2 percent of its total assets of $221 million, at the end of the third quarter.

The bank has five offices and a loan production office in Bonsall.

Send any news of local financial companies to Mike Allen via e-mail at mallen@sdbj.com. He can be reached at 858-277-6359.


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