Bank of Ventura Sees Its New Name, State Charter as Assets

People looking for First National Bank of Ventura were out of luck as of Monday, when the 10-year-old institution formally changed its name to Bank of Ventura.

Although the name change may be subtle, the implications are far-reaching. The change was required when bank officials received government approval to convert from a federally chartered lending institution to a California state bank.

“This is a real positive step for the bank,” said Joseph Kreutz, president and chief executive of the Bank of Ventura, which has assets of about $47 million. “The reason we are converting from a federally chartered bank to a state-chartered bank is we will have higher lending limits for real estate-secured loans.”

Under federal regulations, banks may lend up to 15% of their capital for secured loans and another 15% for unsecured loans. State-chartered banks may increase their secured loans to 25% of their capital, while still lending 15% for unsecured loans.

Kreutz said that is a big deal for an institution such as the Bank of Ventura, which does about 70% of its banking business with commercial customers in need of such financial assistance.

“We will be better positioned to serve our lending clients when they come to us with higher borrowing needs,” Kreutz said.

The conversion will provide other benefits in addition to expanded lending, particularly a savings to the bank of about $10,000 annually, Kreutz said. Annual fees paid to state regulators are about 40% less than those paid to national regulators.

As a state bank, the Bank of Ventura is regulated by both the state Department of Banking and the Federal Deposit Insurance Corp.

“We looked at all the points of state versus national, the positive points and negative points of each, and basically most of the points were identical,” Kreutz said. “But really there isn’t a downside to converting to a state-chartered bank.”

And the trend among banks, he said, is to do just that.

“Most of the institutions in California, about 90% of them, are forming as state-chartered banks,” he said. “There are numerous national banks that have converted over to state banks and only one in the last four years that has converted the other way in California. It’s the trend, and you’re going to see other local banks that will follow our lead.”

Kreutz said the state’s lending policies are generally more liberal, and thus more appealing, than national policies.

“The national banking system tends to be more rigid. Some things haven’t been changed since 1900,” he said. “The state is a little more proactive in serving the community.”

For the Bank of Ventura, the shift comes as the institution sets up shop at a new, expanded location.

About nine months ago, bank officials purchased the former Bank of A. Levy building at Telephone Road and Victoria Avenue in Ventura. They had the building remodeled and last week began operating out of the new facility.

At 13,000 square feet, the new bank building is significantly larger than the previous 8,600-square-foot structure on Telegraph Road.

“We have a lot of room to grow and also offer better services,” Kreutz said.

Growth, he said, will come in the form of a new mortgage program in which the bank will service loans, even if they are sold to other agencies, and an expansion of Small Business Administration loan services.

Kreutz said these services should enable the bank to employ more staff and should further establish an institution that already has community support. The bank’s stock has risen from $6.50 a share last September to about $10.25 currently.

“I think that’s because we are local, we still offer personal service and we’re focused on the local community by supporting social and nonprofit organizations,” Kreutz said. “But I think the most important reason for [the stock increase] is the sense of confidence the local community has with the direction of the bank.”