BANKING / FINANCE : Once-Beleaguered Mission Viejo Bank Makes Solid Recovery

In 1985, Mission Viejo National Bank was at death’s door. It had posted a $1.9-million loss for the year and was within the grasp of federal regulators.

But the bank has turned its operations around and is making money again. Last year, it was one of the top-performing banks in the state and one of the best in Orange County, according to ratings released by Gerry Findley, a financial consultant in Brea.

The Mission Viejo bank excelled with a 4.28% return on assets and a 40.3% return on equity--two key measures of profitability. On average, banks are doing well if they can achieve a 1% return on assets and 10% return on equity capital.

Mission Viejo National and 23 other banks based in Orange County made Findley’s annual list of “premier-performing banks.” The two dozen banks represent nearly 62% of the county’s banks. Statewide, almost 59%, or 251 of California’s 426 banks, earned their way onto Findley’s list. It marked the first time in the 15 years he has been keeping score that more than half the state’s banks have been included on his list.

So many banks have been doing well that Findley developed a new list he calls “super-premier performers.”

Premier performers must show an 8% growth in assets or deposits, a 1.25% return on assets, a 12% return on equity and no more than a 0.8% level of bad loans to total loans. Super-premier performers must show returns of 2% on assets and 20% on equity.

Nine Orange County banks, including Mission Viejo National, were among 104 banks statewide that were named super performers.

The other eight super-premier banks in the county are National Bank of Southern California, Bank of Newport, CommerceBank, Pioneer Bank, El Camino Bank, Corporate Bank, Mariners Bank and Colonial Bank.

The other premier performers are: Eldorado Bank, Citizens Bank of Costa Mesa, Orange National Bank, Landmark Bank, Bank of San Clemente, American Commerce National Bank, Bank of Anaheim, Bank of Orange County, Liberty National Bank, Bank of Westminster, First American Capital Bank, Pacific National Bank, Founders National Bank, Commercial Center Bank and Marine National Bank.

In the early 1980s, Findley’s list wasn’t foolproof. A number of banks that were premier performers one year were soon out of capital and closed by regulators. Findley said he has taken steps to try to instill greater confidence in his list.