Pacific Commerce Bank opened in Little Tokyo in October of 2002, opening a second branch in West Los Angeles three years later. Originally focused on the Japanese-American business community, the bank initially relied on that community for the bulk of its initial shareholders and customers. In its early years led by its founder, Ken Kasamatsu, the bank established a strong foothold in the Japanese-American business community, servicing the needs of many local businesses and volunteering in numerous charitable and civic activities.
In early 2006, the Board of Directors decided to change the direction of the bank, broadening its focus outside of the Japanese-American community and strengthening its senior management team. Over the following 2 years, the bank raised an additional $9 million in new capital, launched its Commercial Lending Division, inaugurated a new S.B.A. Lending Division and more than doubled its assets and loan portfolio. By March 31, 2008, the bank had grown to assets of over $160 million, reporting its 6th consecutive profitable quarter.
At December 31, 2007, the Bank had a total of 2,440,255 common shares outstanding representing a capital position of $16,370,000. At March 31, 2008 the Bank’s loan loss reserve was approximately $1,540,000.
In August 2007, the Bank changed its charter from a national bank to a California State bank, and joined the Federal Reserve as a member bank. This last organizational step completed a repositioning strategy that had included the restructuring of the Board and Senior Management team, the raising of an additional $9 million in capital (completed through a private placement in June of 2006) and the repositioning of the bank’s loan mix and investment portfolio. As the bank has transitioned to become a successful business bank within the vibrant Los Angeles market, it has seen its loan portfolio make a dramatic shift from a residential/consumer focus to a commercial loan focus.
Central to the success of Pacific Commerce Bank is its ability to successfully serve its key customers. As a small bank, Pacific Commerce cannot be “all things to all people,” rather, it is focused and selective in its marketing approach. While we certainly have an expertise within the Japanese American business community, we do not consider ourselves an “ethnic” bank per se. Rather, we are a business bank that offers our clients outstanding business products and services. The core customers or constituencies of the bank can be summarized as follows:
Small Businesses: With its location in Little Tokyo and its access to the adjacent Artists Loft and Alameda corridor markets, Pacific Commerce is convenient to thousands of small business owners who operate in the immediate area in such diverse fields as produce distribution, toy distribution, garment manufacturing, jewelry wholesaling, furniture manufacturing, etc. Regardless of its ethnic focus, the Bank believes its success will be based on delivery superior products and services to the business community.
Professionals: Downtown Los Angeles is home to literally thousands of small professional firms made up of lawyers, accountants, physicians, financial planners, etc. Traditionally, large banks have not done an effective job of servicing the needs of those small professional firms. With its location in one of Downtown Los Angeles’ largest medical office buildings, Pacific Commerce has a natural constituency within the medical community. Likewise, our West L.A. office is surrounded by some of Los Angeles’ premier law firms, accounting practices and advisory groups.
Pan-Asian Expertise: With its roots in the Japanese American community, and its culturally diverse management team (at last count, our senior management team is fluent in six different languages), we have the ability to reach across various ethnic communities, understanding their needs and appreciating the commonality of purpose that has brought them to Los Angeles.
Pacific Commerce Bank offers a variety of loan products to meet the needs of its customers and shareholders, including commercial loans, revolving lines of credit, consumer installment, home equity lines and real estate secured loans, both commercial and residential, construction and term.
Commercial Loans: Unlike larger banks, who force customers to adhere to static loan structures and underwriting models, Pacific Commerce Bank has the independence to craft custom made products (or combination of those products) to better meet its customers’ needs.
- Short-term working capital loans (secured and unsecured) including confirmed lines of credit and internal guidance agreements
- Term loans and revolving credits (secured and unsecured) including credit extensions supported by formal credit agreements
- Single-purpose loans
- Commercial mortgage and constructions loans
- International Banking Services (offered through a correspondent bank)
- Accounts receivable financing
- Equipment Leasing
Professional Loans: We offer a number of credit products specifically designed to meet the needs of professionals (doctors, lawyers, accountants, etc.), including:
- Personal Credit Lines
- Term loans for Tenant Improvements and Equipment financing
- Special Purpose Loans
- Business (Practice) acquisition loans
Consumer Loans: Because Pacific Commerce’s primary focus is on meeting the needs of its small business owners and professionals, it does not aggressively pursue consumer loans, but may from time to time offer such loans primarily as an accommodation to its customers, including:
- Single-family permanent loans
- Personal credit lines (secured and unsecured)
- Over-draft lines of credit.
- Visa Credit Cards (primarily through 3rd-party correspondents).
- Automobile and fixture leasing (primarily through 3rd-party correspondents).
Home Equity Lines: Home Equity Lines of Credit are a popular financing vehicle for many of the small business owners, investors and professionals served by the Bank.
SBA Loans: We have an outstanding array of products from the Small Business Administration (S.B.A.), loans which are specifically designed for small business owners and guaranteed in part by the federal government. Our SBA Group is led by Brandon Day, a 15-year veteran and former officer with the SBA. Brandon and his team members have a thorough knowledge of all SBA products, including 7A loans (secured and unsecured), 504 loans and SBA Express.
Liability products will include personal and business checking, money market accounts, regular savings accounts, certificates of deposit, IRA/Keogh accounts and tiered (progressive) time deposit accounts. All of these products, as well as other services, have been incorporated into a comprehensive banking package and recorded on a universal statement. The following specialty liability products require additional comment:
Private Banking
Products: The bank has and will develop specialty deposit products for its private banking and small business customers. Recent innovative products include the following:
Premium Money Market. Designed to meet the needs of the bank’s small business owners, professionals and investors, the Premium account provides money market rates at a par with the investment houses, while giving customers the security of having insured deposits and the flexibility of maintaining their money market accounts where they bank.
Commercial Sweep Accounts. Business and Professional customers enjoy the convenience of a “sweep” between multiple accounts.
Personal Over-Draft Lines. Professionals, investors and small business owners benefit from having their personal accounts linked to their credit lines.
Consolidated Account Statements. By accessing the Bank’s Net Teller Internet Site, customers can see consolidated account information, between multiple accounts, on a single page. Money can be transferred between checking and saving and accounts, and drawn and applied from credit lines.
“Real Time” Account Access. Unlike large banks’ Internet banking sites, information on Pacific Commerce’s Net Teller is in “real time” with deposited and cleared checks being credited and available when posted.1
Check Imaging. Private and business customers enjoy immediate access to account information over the Net Teller and can view and download check images instantly.
Other Money Management Tools. PCB must offer a competitive array of money management tools (Bill Pay, ACH, etc.) to meet the needs of its business clients.
Remote Capture: The bank’s Merchant Remote Capture program, allows its business customers the convenience of making deposits remotely, providing the convenience of remote banking as well as speeding the deposit of your receipts. It is an ideal product for any business owner or professional who finds themselves making multiple trips to the bank.
Internet Banking: The Bank’s Internet Banking site, “Net Teller” provides 24/7 access to your account as well as state-of-the-art cash management tools including Electronic Bill Pay, Check Imaging, ACH transfer options, Electronic Account transfers and other convenient services.
Pacific Commerce Bank trades under the stock trading symbol of “PFCI” under the OTC Bulletin Board (also known as the “over the counter” trading desk) operated by NASDAQ.
The following securities dealers make a market in the Bank’s stock:
Richard S. Levenson
Western Financial Corporation
600 "B" Street, Suite 2204
San Diego, California 92101
(619) 544-0260
ricklevenson@pacbell.net
Henry C. Stockman
Howe Barnes Hoefer & Arnett
18th Floor
555 Market Street
San Francisco, California 94105
(415) 538-5748
hstockman@howebarnes.com
Dave Bonaccorso
Keefe, Bruyette & Woods
101 California Street
37th Floor
San Francisco, CA 94111
(415) 591-5063
dbonaccorso@kbw.com
Shareholders of Record. As of December 31, 2007 there were approximately 270 shareholders of the Common Stock.
Dividends. Shareholders are entitled to receive dividends only when and if Pacific Commerce Bank's Board of Directors declares dividends. As a fairly new bank we intend to retain earnings for the foreseeable future in order to strengthen our capital base and support continued growth in assets.
1. At large banks, such deposits are often credited to the account the next business day, or in many cases, only “batched” once a day.
