First Business Plans County Office : Official at Rival Bank Is Hired to Manage New Branch

After wooing and winning a prominent Orange County banker away from a potential competitor, Los Angeles-based First Business Bank says it will open an Orange County office by the end of next month to cater exclusively to medium-size businesses.

First Business hired veteran banker Lance C. Blue away from CommerceBank in Newport Beach to serve as senior vice president and general manager of its new Orange County division. Blue quit his job as CommerceBank’s vice chairman and chief executive last month to take the new post.

Blue had worked with Robert W. Kummer Jr., chairman and chief executive of First Business, while at a Union Bank branch in Orange County where Blue was manager of business development. Blue was a founding officer of CommerceBank in 1979, and Kummer formed First Business in April, 1981.

Both Kummer and Blue downplayed any suggestion that Blue would be competing against his old firm for business accounts. They pointed out that First Business, with $244 million in assets, was larger than the $107-million CommerceBank and able to devote itself entirely to medium-size companies throughout the county.

But First Business Bank’s target group of $5-million to $100-million businesses overlaps CommerceBank’s. “We used to go after companies that had sales of $500,000 to $20 million at CommerceBank,” Blue said.

First Business expects to sign a lease by the end of the month for a 4,000-square-foot branch in a high-rise office building either across from South Coast Plaza in Costa Mesa or across from John Wayne Airport, Kummer said.

“Outside of downtown Los Angeles, Orange County has the largest source of mid-size firms” in Southern California, Kummer said. “A lot of independent banks say they cater to business only, but in practice, very few have done that.”

The only personal accounts First Business handles are for owners and officers of its business customers, Kummer said. The bank has about 800 business accounts and 1,000 personal accounts, he said, while a similar-size bank would likely have 20,000 accounts, most of them small personal accounts.

“We transact 80% of our business in the customer’s office, and we provide daily courier service for deposits and deliveries of documents,” Kummer said. “That’s a big expense, but we can afford to do it with business accounts.”

First Business has been profitable since it opened, Kummer said. For the nine months ended Sept. 30, he said, the bank and its parent, First Business Corp., earned nearly $1.5 million, an increase of 25% over profits of almost $1.2 million for the same period in 1984. The holding company’s only asset is the bank.