Orange National Forms Loan Branch

Orange National Bancorp is poised to take its operations beyond its geographic and business limits of the past.

The parent of Orange National Bank has formed a new subsidiary, ONB Mortgage Corp., that will operate as a sister company to the Orange-based bank.

And the bank is negotiating to acquire struggling Laguna Bank, which has offices in Laguna Beach and Laguna Hills.

ONB Mortgage will act as a broker for home loans, using money it will get from about 20 banks, savings and loans and other U.S. investors to provide mortgages to home buyers, said Wayne F. Miller, president and chief executive of the bank and the holding company.

ONB, which moved into new offices in the renovated Old Towne section of Orange this week, will eventually open escrow and mortgage service operations and may start a mortgage banking operation, in which it pays for its own loans before selling them to investors.

For now, however, the subsidiary earns its money by servicing the loans and collecting a percentage of the loan fees.

The new subsidiary is headed by John A. Munger, president and chief executive, and Frank C. Nordquest, vice president. It expects to have a staff of 10 by the end of June, Miller said.

The bank, meanwhile, hopes its proposed acquisition of Laguna Bank will give it its first branches outside of Orange, where it has four offices.

“The first decision for us wasn’t whether to buy the bank but whether to go into South County,” Miller said. “Our second decision was how to get there.”

With Bank of San Clemente sold to Eldorado Bank in Tustin and with the failures of Mission Viejo National Bank and Mission Valley Bank in San Clemente, Orange National hopes its style of banking will take hold in South County, Miller said.