Number of Independents, Branches in Valley Is Decreasing

The departure of Great Western two years ago, coupled with the more recent purchase of Glendale Federal Bank by California Federal Bank, has reduced the number of Valley-based banks to about a dozen--many of them smaller, niche players.

The two largest Valley-based institutions--Fidelity Federal Bank and Imperial Thrift & Loan, both of Glendale--are both largely mortgage lenders left over from an era when savings and loans dominated the region.

The $400 million in assets held by American Pacific State Bank, one of the Valley’s largest commercial banks, wasn’t even enough to qualify the institution as one of Los Angeles County’s 25 largest banks last year.

“There are fewer independent banks,” said Frank Ures, president and chief executive of American Pacific, “and the ones that are around are very small, like Bank of Granada Hills and Verdugo Banking Co., and they only cater to a very small area within the community.”

In another trend that mirrors a nationwide movement, the number of bank branches in the San Fernando Valley also has dropped sharply in recent years, said Carl Schatz, chief executive of Encino State Bank, the Valley’s newest bank.

Since coming to the Valley to work at a Bank of America branch in the 1950s, Schatz has gone on to open or help open three more Valley banks, all of which were later acquired, before founding Encino State Bank two years ago.

“The height of banks in the San Fernando Valley was around 1986, 1987,” he said. “When we opened [one of the previous banks in 1986], we found there were 80 [bank branches] between Van Nuys Boulevard and Reseda Boulevard, and that’s only along Ventura Boulevard.

“I bet you there’s less than 60 there now. They’re there, but they’re disappearing,” he said.

Here is a look at the Valley’s remaining financial institutions. Information was provided by the banks and the Federal Deposit Insurance Corp.

Fidelity Federal Bank: Based in Glendale, this is the largest remaining Valley-based financial institution, with $3.7 billion in assets at the end of last year. But amid today’s highly competitive mortgage market, Fidelity saw its assets drop more than 10% in 1998.

Spokesman Neil Osborne said the drop was planned to improve Fidelity’s ratio of capital to assets. He said the publicly held thrift plans to further reduce its asset base this year to about the $3-billion range.

Founded in 1937, Fidelity Federal employs about 600 people.

Imperial Thrift & Loan: Based in Glendale, this is a mostly mortgage-based institution that engages in lending for business and residential properties. The company had just over $1 billion in assets at the end of last year, virtually unchanged from the year before. It employs about 100 people.

In 1996, Imperial completed a reorganization to a holding company structure and became a fully owned subsidiary of ITLA Capital Corp.

Also in that year, ITLA opened another subsidiary, Encino-based ITLA Funding, which makes commercial real estate and construction loans up to $50 million.

Pacific Crest Bank: With headquarters in Agoura Hills and $613 million in assets, Pacific Crest qualifies as the Valley’s third-biggest bank. But unlike most of its Valley-based counterparts, Pacific Crest is more the regional bank, with banking offices in Agoura and Beverly Hills, Encino and San Diego, and loan production offices as far afield as Oakland and Portland, Ore.

Its affiliated Pacific Crest Capital Inc. specializes mostly in commercial and industrial real estate loans.

Highland Bank: Founded 30 years ago in Burbank, Highland operates seven branches and had about $600 million in assets at the end of last year--up about 10% from the year before. As the market for home mortgages has grown more competitive, Highland, a savings and loan, has moved in recent years into more lending for commercial and industrial properties. The company employs about 100 people.

American Pacific State Bank: Founded in 1971, this Sherman Oaks institution is one of the Valley’s largest commercial banks, with eight Valley branches and about $400 million in assets at the end of last year--up 15.5% from 1997. The bank recently reported that loan volume had grown by an even stronger 32% in the past year compared with the year before.

Like most commercial banks in the Valley, American Pacific considers itself a community, niche-oriented business bank. Its areas of expertise include Small Business Administration loans, as well as business and commercial real estate loans. Based in Sherman Oaks, the bank employs about 160 people.

Pacific Thrift & Loan: Founded in 1988, this Woodland Hills-based thrift has $181 million in assets and employs about 240. It operates out of one traditional branch and 40 loan origination retail centers nationwide.

Valencia Bank & Trust: The only bank based in the Santa Clarita Valley, Valencia Bank & Trust was founded in 1988 and has three branches. The Santa Clarita-based company had $137 million in assets at the end of 1998--up 21% from a year before--and employs 53.

Western Security Bank: Founded in 1987, this bank operates out of a single office in Burbank. It has $136 million in assets and a staff of 51.

Verdugo Banking Co.: Glendale-based Verdugo Banking Co. was one of the fastest growing Valley-based banks last year, as its assets finished 1998 at $92 million--up 25% over a year before. Founded in 1991, Verdugo Bank is also one of the Valley’s youngest banks. It employs 25 at a single branch.

Charter Pacific Bank: Based in Agoura Hills, Charter Pacific has $91.5 million in assets and operates out of two branches. It employs 78. The bank was the subject of recent controversy over claims that it didn’t do enough to stop an individual who allegedly used a merchant account to run a major credit card fraud operation involving Internet service billings. The bank said it acted appropriately, and closed the account due to excessive charge backs.

Bank of Granada Hills: This bank has $70.8 million in assets and operates out of a single branch in Granada Hills. The bank was founded in 1983 and has a staff of 21.

Encino State Bank: Founded in 1997 by Valley banking veteran Carl Schatz, Encino State Bank is the Valley’s newest bank. In its brief lifetime, it had built up an asset base of $55.5 million by year-end 1998--more than double its total a year before. The bank is based in Encino, and employs a staff of 25.