Press Release

Bay Area community bank reaches agreement with regulators to get house in order 

March 4, 2019
By Mark Calvey  – Senior Reporter, San Francisco Business Times

Beacon Business Bank said it remains financially strong as it reached an agreement with regulators to address a range of issues, including compliance and risk management.

San Francisco-based Beacon Business Bank reached an agreement with the Office of the Comptroller of the Currency to address issues ranging from compliance to risk management.

“Beacon Business Bank has entered into an agreement with the OCC to improve its administrative, planning and reporting procedures,” the bank said in a statement to the San Francisco Business Times. “No loans or relationships with customers were at risk.”

The bank said it would “continue to pursue new business and to service current customers without interruption.”

In the regulatory order dated at the end of 2018, the OCC said it had “found unsafe or unsound practices, including those relating to enterprise governance, concentrations of credit, and credit risk management.”

Beacon Business Bank is one of the Bay Area’s smallest community banks with about $128 million in assets, down from $140 million in assets at the end of last year's third quarter.
Business depositors keep a close eye on the health of their banks since their deposits often exceed the FDIC’s insurance limit of $250,000.

In an interview with the Business Times, Beacon Chairman Denis Daly stressed that the bank remains financially strong. The bank said it continues to produce “strong earnings,” and maintains its regulatory rating as a “well capitalized bank.” The bank said its allowance for loan losses, at 2.7 percent, is nearly double that of its peers.

Still, the regulatory order meant the loss of its top rating of five stars from Bauer Financial. The bank had the top rating for more than two years. Bauer now assigns two stars to Beacon. Bauer defines two stars as “problematic.”

Beacon Business Bank also saw two C-suite executives leave in the final months of 2018. Gwen Wong, chief credit officer, left in October, Daly said. No reason was given for her departure. 

President and CEO Bob Lussier, who took the reins in March 2015, retired at the end of last year, citing personal reasons. He planned to return to Chicago, where he lived prior to joining Beacon Business Bank, formerly known as Trans Pacific National Bank. 

Daly said there was no requirement by regulators for any changes in management.
At the time of Lussier’s retirement, Beacon said it was conducting a search for his successor. In the interim, Chief Financial Officer Dennis Jang assumed Lussier’s leadership role.

Closely held Beacon Business Bank, which has been profitable for the past five years, operates offices in San Mateo and Alameda in addition to the San Francisco headquarters office.