First American Financial Enters the Banking Field in Santa Ana

First American Financial Corp. of Santa Ana, parent of the third largest title insurance company in the nation, is getting into the banking business.

State regulators confirmed Thursday that First American’s trust company subsidiary was licensed this week to open a state-chartered bank at the First American Trust Co. headquarters at 421 N. Main St. in Santa Ana.

The proposed bank originally was to have been established as a separate arm of First American Trust and was called Bank of Santa Ana when the charter application was filed in 1983. Now, however, it has been merged into the trust company and renamed First American Trust. It will take deposits and make consumer loans but will not make commercial loans.

“Essentially, they are upgrading what they were doing with First American Trust Co.,” said David Scott, deputy superintendent of banks in Los Angeles. “The only thing that is going to change is that they’re going to start accepting deposits in that same location.”

Scott said that Donald P. Kennedy, president of First American Financial, will also serve as president of the new bank and that Charles Potter, president of First American Trust Co. will be the bank’s chief operating officer.

Scott added that the bank planned to open with the standard $3 million in capital and that officers of the trust company will also serve as new officers of the bank.

Company officials refused to return calls.

Ernest Leff, a Los Angeles banking attorney, said that as a result of merging the trust company with the bank, First American will be one of the few independent banks in California offering trust services. A bank’s trust department specializes in investing funds for clients.

In 1984, First American Financial reported revenue of $232.2 million and net income of $13.4 million.