Mechanics Bank of Richmond (MCHB)

[Enterprising Investor]

Mechanics Bank retools to court the not-so-wealthy (9/01/16)

Mechanics Bank boosted staffing in its wealth management division to reach out to affluent clients who don't meet the industry's more traditional $1 million threshold to qualify for money management services.

Of course when it comes to wealth, all things are relative.

In the case of Mechanics Bank, its new offering targets those with $250,000 to $1 million in cash, stocks, bonds and other so-called liquid assets for a range of trust, investment and estate and retirement planning services.

Once you hit the magic million-dollar mark, there's no shortage of providers eager to manage your money.

Banks are often the first to learn of customers coming into money, but often aren't the first choice when it comes to investment services.

"We're seeing increasing demand from our existing client base," says Deberah Kelley, executive vice president and director of wealth management at Mechanics Bank, (OTC: MCHB) with $3.6 billion in assets.

"This is one of the strongest economic regions in the country, and significant income growth and net worth is resulting in the need for broader financial services," Kelley said.

Mechanics Bank is creating a range of exchange-traded funds, from very conservative to aggressive investment objectives, that will allow the bank to provide investment services to the mass affluent.

Kelley says banks are often considered too conservative, which might be a holdover from yesteryear's regulations and practices.

Kelley, who came to Mechanics Bank after working at Santa Rosa-based Exchange Bank (OTC: EXSR) and Wells Fargo, said Mechanics' mass affluent outreach grew out of meetings with her team of 35 on what opportunities the bank might be missing.

Kelley estimates that 20 percent of Mechanics' retail customers qualify for the bank's investment services for the mass affluent.

"At heart, I like the financial planning aspect of helping clients prepare for retirement, transfer wealth or estate planning," Kelley said. "There's great satisfaction in that."

Mechanics Bank hopes that it can build stronger relationships with the under-$1 million set so that when they do cross the $1 million threshold, the bank has a better chance of holding on to them as clients.

Affluent investors are also being courted by a range of new investment vehicles to put their money to work in startups, small businesses and other investment alternatives beyond stocks and bonds.

Mechanics Bank is adding and promoting staff across its Bay Area franchise to better serve the so-called mass affluent.

Ester Babakhanov joined Mechanics as a vice president and wealth management strategist in the bank's office in San Francisco's Financial District. She previously worked at JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC).

James Hauer is moving from the bank's San Francisco office to the North Berkeley office to meet the growing demand for trust services in Berkeley.

In the Oakland office, Tina Papucci has been promoted to vice president and personal trust manager, and Michael Shea has joined the bank as a vice president and wealth strategist after working at independent wealth management firms.

The mass affluent initiative also includes Darren Peterie serving as a private banker in the Napa office after working in Mechanics' retail banking division and Ron Sparrow, who has been promoted to vice president in private banking in the Walnut Creek office.

http://www.bizjournals.com/sanfrancisco/news/2016/09/01/mechanics-bank-wealth-money-management-mchb.html