Santa Rosa's youngest bank primed for growth

<p>AltaPacific Bank in Santa Rosa might be the smallest, youngest financial institution on the block, but it is primed for growth at a time when other Sonoma County banks are still recovering from the financial collapse.</p><p>The four-year-old bank notched its seventh consecutive profitable quarter, ending the first three months of 2010 with its strongest performance to date, according to an income statement released Wednesday.</p><p>“We've continued to be profitable throughout all this stuff,” said Allen Christenson, the bank's chief financial officer. “We have been very disciplined in who we will lend to.”</p><p>The first quarter earnings report lists one nonperforming loan, a $1.2 million loan secured with real estate.</p><p>The bank earned $189,000 during the first quarter, an increase of 17 percent over the prior quarter and a 170 percent increase over the same period last year. Its assets increased about 4 percent during the first three months of 2010, to about $87 million.</p><p>Although relatively small, those earnings represent the maturation of Sonoma County's youngest local bank, said Fred Ptucha, who invests in and tracks local community bank stocks as an advisor at Financial West Group in Santa Rosa.</p><p>AltaPacific Bank executives took a conservative approach during its initial years, Ptucha said, and that has put it in the enviable position of having a stockpile of funds to help it grow.</p><p>“I think they are going to be very aggressive now,” he said.</p><p>AltaPacific Bank was founded by banking veterans from Marin County at the peak of the real estate bubble in the summer of 2006, a year before the first signs of stress appeared in the global financial markets.</p><p>“My guess is if they had started the bank 3 or 4 years earlier, they might have made some loans they regretted,” said Ptucha, who owns shares of the bank. “They dodged the bullet through good, conservative banking, and from just good timing.”</CW></p><p>Before starting AltaPacific Bank as its president, Charles Hall shepherded the growth of Business Bank as its chief executive officer, growing the San Rafael bank to about $600 million in assets. It was sold to Union Bank in 2004.</p><p>Hall joined other former Business Bank executives and board members to form AltaPacific Bank in Santa Rosa. Their focus is serving small and medium-sized businesses, many of them from Marin County, Christenson said. To that end, they invested heavily in technology that lets customers bank remotely. </p><p>AltaPacific Bank has 16 employees and specializes in real estate and construction loans to small builders. It remains one of the most well-capitalized banks in the state, and recently hired a mergers and acquisitions specialist to help it grow, Christenson said. </p><p>The bank is considering three primary <NO1>primarily looking at three <NO>avenues, he said.</p><p>It could work with federal bank regulators to purchase a financially-troubled bank that has been seized by the government. But since AltaPacific is relatively new and small, executives would have to convince regulators they are up to the task, Christenson said.</p><p>The bank also could purchase a non-troubled financial institution or perhaps just a bank branch, he said.</p><p>Whichever route they take, bank executives say they will maintain their conservative approach.</p><p>“Rapid growth for growth's sake is not the way to go,”Christenson said. “We need to be disciplined about how we do this.”</p>