The deposit growth party has ended for the largest commercial banks operating in Orange County.
After three straight years of deposit growth ranging from 11% to 23%, the 47 banks on this week’s Business Journal list of largest commercial banks reported a collective 0.6% decline to $174.7 billion in OC deposits for the year ended June 30.
The declines were widespread—28 of the 47 banks on this year’s list reported drops.
Longtime list leader Bank of America, which had topped the list for five straight years, fell to No. 2 as its deposits dropped 10% to $30.3 billion.
“When there was a sudden increase in rates, our clients wanted to take advantage of alternative investments” rather than typical savings accounts with low interest rates, said Ashil Abhat, Bank of America’s market leader for mid-size companies in Orange County.
The deposits that left generally went to other parts of the bank, such as its brokerage, he said.
This year is starting “really fast,” Abhat added.
“Last year, there was a fair amount of uncertainty, a wait and see,” Abhat told the Business Journal. “There’s definitely renewed optimism. What we are seeing is mid-size companies wanting to jump and get ahead of the curve.”
M&A
The list ranks commercial banks with branches in Orange County and a minimum of $50 million in local deposits based on data from the Federal Deposit Insurance Corp. The FDIC lists several other banks with offices in Orange County that don’t meet the minimum for the Business Journal list.
Most banks on the list supplied information on local employees, statistics that don’t factor into rankings. The number of cumulative employees in OC for the 47 banks on the list grew 2.6% to 11,776.
New No. 1 JPMorgan Chase & Co. claimed the top spot not by growing but by deposits declining by less—0.5% to $30.7 billion.
The list includes JPMorgan’s acquisition last May of First Republic Bank; on last year’s list, First Republic ranked No. 12 with $4.6 billion in deposits in Orange County. Without those First Republic deposits, JPMorgan’s deposits would have fallen an estimated 15%.
The Federal Reserve’s expected rate cuts later this year will have an impact on Orange County consumers, said Ethan Morgan, managing director and market manager in Orange County for J.P. Morgan Private Bank.
“How consumers in Orange County anticipate new rates have the potential to further accelerate or diffuse headwinds across key regional industries like real estate, technology, healthcare and consumer retail,” he told the Business Journal (see Q&A, page 18).
Other acquisitions caused changes to the list as well.
• U.S. Bank in late 2022 acquired Union Bank, which a year ago ranked No. 6 with $7.8 billion in deposits.
On this year’s list, U.S. Bank’s deposits climbed 90% to $9.6 billion, helping it jump six spots to No. 4 on the list. It also boosted its local headcount by 11% to 1,100 and its branch count by 50 to 70.
• One of the largest mergers last year was Banc of California and Pacific Western Bank. Since the merger occurred in December, after the June 30 reporting date, they were left as separate entities. Combined, they have about $13.1 billion in OC deposits, which would rank No. 4.
• First Citizens Bank, which calls itself America’s largest family-controlled bank, climbed 4 spots to No. 19 even though its deposits fell 13% to $1.2 billion. In March, the bank acquired troubled Silicon Valley Bank, which didn’t appear on last year’s list. First Citizens Bank was a fast grower on last year’s list by increasing deposits 243%.
• Flagstar Bank appears on the list at No. 36 with $305.5 million in deposits. Flagstar operates as a subsidiary of New York Community Bancorp, which last March purchased the loans and assets of Signature Bank. On last year’s list, New York-based Signature Bank made its first appearance as the fastest-growing bank, increasing its deposits 436% to $570.9 million.
Noteworthy
• Genesis Bank, which began in 2021, doubled its OC deposits to $95.4 million for the year ended Dec. 31.
• The biggest decliner was Buena Park’s United Business Bank, where deposits dropped 42% to $198 million. On last year’s list, the bank’s deposits jumped 187%.
