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Ramona National Bank Searching for New CEO

Ramona National Bank said it is hiring a new chief executive following the recent departure of Roy Lewis, who was the 4-year-old bank’s only president and CEO.

Why and when Lewis left his job is unclear, as Chairman John Farkash declined to provide additional information beyond a press release in August announcing that Lewis left. The bank opened for business in December 2001.

“We certainly appreciate all of Roy Lewis’ efforts in getting the bank started and bringing us to the point where we are today,” Farkash said in the release.

Farkash said the bank has been searching for a new CEO for seven months, although Lewis was at the bank in late July when he signed a letter to shareholders.

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Until Ramona National finds a new leader, the bank is being run by Chief Financial Officer Shelly Hicks.

“We’re in a transition, and we’re actively searching for a new CEO. There are numerous individuals that we’ve identified, and we’re now negotiating with someone,” Farkash said.

Ramona National, one of about a dozen local community banks launched in San Diego since 2000, has struggled this year after posting a $61,000 net profit in 2004.

For the six months ended June 30, Ramona National reported a net loss $238,000, compared with a net loss for the same period of 2004 of $115,000.

Farkash said the loss was caused by added expenses associated with the opening of its first branch office in La Mesa in late 2004.

However, in the bank’s letter to its shareholders, other reasons listed for losses this year were increased personnel expenses involving loan administration due to higher loan volume and promotional costs associated with a certificate of deposit offering.

Ramona National nearly doubled in size this year from mid-2004, increasing its assets by 81 percent to $55.8 million. Loans jumped 89 percent to $39.3 million. Deposits increased 93 percent to $48.8 million.

The rapid growth of Ramona’s loan portfolio caused the bank to boost its loan loss reserves to $456,000 as of June 30. Judging from the bank’s latest financial report, some of that portfolio isn’t doing too well.

The bank listed $343,000 in non-accrual loans, which are loans that haven’t been current for more than 90 days. In addition, the bank listed an additional $439,000 in loans that are past due at least 30 days.

If Ramona National can’t work out new terms with borrowers on the non-accrual loans, the next step for the bank would be listing the loans as “charged off.”

As a percentage of the total loan portfolio, the non-accruals or problem loans make up about 1 percent, which is not exactly threatening, but not an insignificant number either.

Ramona National’s call report also contains notice that it extended a $558,000 loan to one of its executives , a director or shareholder. The bank does not have to reveal the name of the borrower. Providing loans to bank insiders is highly regulated and the terms of such loans cannot be better than what are offered to other bank customers.

Most community banks have written policies prohibiting loans to bank insiders, even though the practice is legal, said Dan Yates, the chief executive of Regents Bank in San Diego.

Lewis has been in banking for more than 36 years and has held senior management jobs for about half that time, including three years as CEO of Inland Empire Bank. Lewis was also president of two small community banks in Oregon.

Farkash declined to say when he would hire a new CEO, but asserted that Ramona National is in fine shape and would emerge from the changes stronger and better off than it was.

“This bank is going to be around a lot longer than you or I,” he said.

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Discovery Completes Celtic Purchase:

Discovery Bancorp, a San Marcos-based bank that formed a bank holding company in April, said it completed the acquisition of Celtic Capital Corp., a private commercial finance company, for $6.1 million. Celtic has a loan portfolio of $16 million. The purchase was funded through a $12 million stock offering slated to end this month.

Celtic, which will continue operating under the same name from its Santa Monica headquarters as a wholly owned subsidiary of Discovery Bancorp, provides financing to small and medium sized businesses from $500,000 to $5 million.

In other news, Discovery Bancorp reported net income for the six months ended June 30 was $209,413, compared with $94,975 for the like period of 2004.

Total assets, loans and deposits all reached record highs, with assets rising 47 percent from mid-2004 to $127.4 million; loans growing 37 percent to $102 million; and deposits up by 50 percent to $106.3 million.

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Another Bank Buy: First Community Bancorp, the Rancho Santa Fe-based parent firm to First National Bank, signed a definitive agreement Sept. 13 to acquire Cedars Bank, a Los Angeles-based bank with $486 million in assets, for $120 million in cash.

The purchase would be the third this year for First Community, which listed total assets as of June 30 of about $2.8 billion.

Last month, the banking company completed the purchase of First American Bank of Rosemead. Next month, it should complete the acquisition of Pacific Liberty Bank, based in Huntington Beach. With those two banks merged into the Pacific Western Bank division, First Community would have about $3.7 billion in total assets and 48 branches.

Pacific Western Bank would hold about $2.5 billion, while First National Bank holds about $1.2 billion in its 13 county branches.

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Seacoast Commerce Changes:

Seacoast Commerce Bank in Chula Vista confirmed that half of its four-person Small Business Administration lending unit, including manager Jocelyn Brown, is gone. Brown led a group of four bankers to Seacoast Commerce in April to start the SBA department. The four all formerly worked at San Diego Community Bank, also based in Chula Vista.

Acting Seacoast Commerce President Bruce Nunes, also the bank’s chairman, said he’s still evaluating what direction to take regarding this type of lending.

Nunes said he’s still searching for a president/CEO, a spot that’s been vacant since July.

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Branch Openings:

Neighborhood National Bank opened its third branch office in Spring Valley at 9774 Campo Road this month. The National City-based bank has offices in San Diego and National City.

San Diego County Credit Union opened a Poway branch at 14099 Stowe Drive, its 22nd office. The region’s largest credit union has total assets of more than $3 billion.

San Diego National Bank opened two offices in the county recently, bringing its total to 21. This month, it opened its first Oceanside branch at 165 Old Grove Road. It’s managed by Dean Andersen. Last month, it opened an office at 9400 Mira Mesa Blvd. in Mira Mesa. It’s SDNB’s 20th branch in the county and will be managed by Linda Goycochea.

Mission Oaks National Bank, based in Temecula, opened a branch near Ontario, its third branch and first outside Temecula.


Send any news about local banks or other lenders to Mike Allen via e-mail at mallen@sdbj.com. He can be reached at (858) 277-6359.

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