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Community-based bank holds opening

First California Bank held a grand opening ceremony for a new Glendale location Wednesday, undeterred by a national mortgage meltdown that has paralyzed other lenders.

While many large banks have faltered under the weight of the sub-prime residential loan market, First California does not deal in residential loans and instead focuses on businesses, said C.G. Kum, the company’s president and chief executive.

The Westlake Village-based bank has been able to remain solvent and strong, even as other lenders have collapsed during the economic downturn, because of First California’s history of conservative lending practices and strong, personal connections with borrowers that large firms cannot duplicate, Kum said.

And with a focus on businesses, the community-based bank is betting that its ability to connect with borrowers will go far with Glendale’s business community, Kum said.


At least one city business leader feels the same way.

“I think it’ll be beneficial to the businesses in Glendale who might currently need loans and are unable to find them someplace else,” said Judee Kendall, executive director of the Glendale Chamber of Commerce.

First California and other medium- to large-sized lenders have opportunities for growth among businesses in the Los Angeles area because of declining confidence about banking juggernauts during the economic downturn, said Jack Kyser, founding economist of the Los Angeles County Economic Development Corporation.

Most companies rely on banks to help finance growth and many are looking for loans now to help move business forward, Kyser said.


“They are heavy users of banking services,” he said of medium- to large-sized businesses.

“They’re not like mega-corporations that can set up their own banking services.”

Community-based lending is also becoming more desirable among borrowers who are uncertain about the stability of large firms and want the reassurances that come with having a close relationship with bank representatives, said Caroline Kaba, associate professor of economics at Glendale Community College.

“In the midst of these foreclosures, you’re finding that a lot of community banks have more of an edge because they did not venture into the riskier loans,” said Kaba, later adding, “There’s now an increasing appeal for the smaller banks. It seems they have created a more market niche for themselves.”

First California’s staff has already developed connections in Glendale and found that there would be more opportunity for growth by expanding to a new location in the city, which will be the newest of the bank’s 15 Southern California locations, Kum said.

“It’s a well-thought-out strategic move for the bank,” said Concetta Smarius, the manager of the Glendale branch.

“We are looking to expand our footprint in the San Gabriel Valley, and this just gets us one step closer to doing that.”

Smarius had developed relationships with Glendale business owners over the last two years and noticed that the personal banking experience that she offered to clients was gaining ground, she said.


That personal connection, combined with the publicly traded bank’s record of financial strength, has helped keep it on track to grow during the recession, Kum said.

“People want to bank where it’s safe, and that’s a really important differentiator today, in that clients have come to realize that we are very strong,” Kum said.

The firm recently purchased the assets of failed Redlands-based 1st Centennial Bank, a move that helped to boost the fourth-quarter financial results the company reported Wednesday.

First California’s total assets are valued at $1.4 billion and its risk-based capital ratio, a federal measure that gauges a bank’s ability to cover losses, was 12.27%, well above the 10% standard for meeting the highest regulatory qualification of “well-capitalized,” Kum said.

“Our balance sheet, our capital position, our quality of loans are very outstanding, and because of those components, our clients are saying, ‘You know what, I want to bank with you because I know that you’re not going to fail tomorrow,’” Kum said.

First California Bank is at 505 N. Brand Blvd., Suite 110.