Holding Companies Banking on Rescue Funding

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Local bank holding companies Center Financial Corp. and First California Financial Group Inc. can now count themselves among the growing number of institutions to receive funds under the U.S. Treasury Department’s financial rescue program.

Center, the Los Angeles-based parent of Center Bank, said it has received preliminary approval for a $55 million infusion under the government’s Troubled Assets Relief Program. The institution, which caters primarily to the Korean-American community, has $2.04 billion in assets and 25 branch locations located mostly in Southern California.

Woodland Hills-based First California, the holding company for First California Bank, said it will receive $25 million from the government. The institution operates 12 branch locations and has $1.13 billion in assets.

Both Center and First California said they plan to use the funds to increase their lending activity.

“In this extraordinarily challenging environment, prudent lending by the healthy commercial banks will be critical to our country’s movement forward on the road to economic recovery,” said Center Chief Executive Jae Whan Yoo in a statement.

Eight local institutions have now received approval to participate in the program. The amounts range from City National Corp.’s $395 million to the modest $9 million investment in Broadway Financial Corp.

Meanwhile, Hanmi Financial Corp., the Los Angeles-based parent of Hanmi Bank, said it has applied for $105 million under the program but has not received a decision from the government.


SBA loan slowdown

Lending in the greater Los Angeles area through Small Business Administration programs dropped by almost one-third in the past year as banks cut back amid the ongoing credit crunch.

Fewer than 3,800 small business loans were made by 144 lenders in the Los Angeles district of the SBA which comprises Los Angeles, Ventura and Santa Barbara counties during the fiscal year ended Sept. 30. That’s down 30 percent compared with the prior fiscal year, while the value of those loans dipped 20 percent to $1.03 billion. That’s according to the Business Journal’s annual list of SBA lenders, which is on page 19 of this issue.

The loans are backed by the SBA, which assures the lending institution that the government will pay back at least some of the money upon defaults.

Bank of America Corp., the No. 1 lender last year, fell to second place in 2008 as its loan volume declined considerably. The bank, the largest in Los Angeles County by deposits, made 258 SBA loans in 2008, down from 1,010 last year. The total value of the loans dropped 72 percent to less than $11 million.

Bank of America’s decline paved the way for Oakland-based Innovative Bank to claim the top spot among local SBA lenders. The bank, which is focused on small business lending, saw a slight decline in its loans, but still made 777 loans in Los Angeles with a total value of $22.5 million.

The number of SBA loans could continue to decline next year as the country endures an economic recession. At the same time, at least a half-dozen banks on this year’s list are no longer around as a result of acquisitions, bankruptcies or failures, including No. 29 Wachovia Bank, which was acquired by Wells Fargo & Co. in October.

Not every bank is doing poorly, however. Excel National Bank in Beverly Hills jumped to No. 24 on the list from No. 29 last year as the value of its SBA loans increased 42 percent to $17.4 million. Chief Executive Brian Carlson said small businesses should look to SBA loans as a way to keep their companies alive in this difficult environment.


San Diego Acquisition

Los Angeles-based investment banking firm Wedbush Morgan Securities Inc. has continued an ambitious expansion initiative with the acquisition of First Wall Street Corp., a San Diego-based brokerage.

First Wall Street, founded in 1982, has offices in 11 states. Terms of the deal were not disclosed.

The transaction, expected to close by the end of the month, follows Wedbush Morgan’s September acquisition of Peacock Hislop Staley & Given Inc., a regional investment bank based in Phoenix.


C Suite News

Former California State Assembly Speaker Fabian N & #250; & #324;ez has been appointed to the board of Woodland Hills-based insurance provider Zenith National Insurance Corp. N & #250; & #324;ez, whose term as speaker ended last month, is currently a partner at Mercury Public Affairs LLC . Hanmi Financial Corp. announced that Paul Kim has been nominated to its board and current director Mark K. Mason has resigned. Burdened by its strained financial position, Hanmi recently entered into an agreement with federal regulators ordering the institution to make changes to its board . Union Bank of California, the Los Angeles division of Mitsubishi UFJ Financial Group Inc., announced that Adam Bester and Bryan LaCour have been hired as senior vice presidents of the bank’s specialized financial services unit.


Staff reporter Richard Clough can be reached at [email protected] or at (323) 549-5225, ext. 251.

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