L.A. Institution Has Big Hopes for Small Business

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At a time when many financial institutions are pulling back on their small business lending, one bank decided the time is right to jump in.

Wedbush Bank, an L.A. institution that opened just over a year ago, announced this month that it has opened a Small Business Administration division to make loans backed by the government agency.

“We’re taking advantage of a time when other banks are moving out of it,” said R. Scott Racusin, chief executive of the bank. “It’s a very viable form of lending going forward. Our desire is to make and hold these loans, not necessarily sell them into the secondary market.”

Indeed, the inability of banks to sell the loans into the secondary market has led many institutions to drastically reduce their small business lending. As of the end of February, SBA lending in Southern California had fallen 60 percent from the previous year.

The division will be headed by Justin Moon, who has managed SBA divisions for other banks. He and the four other members of the team came from Alliance Bank, the Culver City institution that in February was seized by federal regulators and sold to California Bank & Trust in San Diego.

Racusin and Moon said another impetus for the creation of the division was the recent action taken by the Obama administration to bolster the struggling sector. The government recently moved to increase the guarantee on SBA loans to as much as 90 percent and help eliminate fees related to the loans.

“Adding the additional guarantee will give the bank a better comfort level,” said Moon, who hopes to make at least 25 SBA loans during the remainder of 2009 for a total value of $15 million or more.

The bank is currently working with customers and ramping up its marketing efforts to stimulate interest in the new division. Ultimately, Moon said he hopes to turn the young bank into one of the area’s top SBA lenders.

“Coming from an SBA background, I think it is an excellent program,” he said.


Green Investing

Several business groups in the San Fernando Valley have teamed up to help promote investment in the area’s “green technology” industry at a time when investment in the sector is cooling along with the overall economy.

Through the Valley Green Agenda a coalition of the Valley Economic Alliance, Valley Economic Development Center and Valley Industry and Commerce Association business leaders plan to highlight new environmentally focused companies and help connect entrepreneurs in the field with investors. The coalition also hopes to make it easier for the businesses to get loans. Among the ventures the group expects to support are waste management and alternative energy companies.

“It is important that Valley business leaders are on the forefront of the green revolution,” said Stuart Waldman, president of VICA, in a statement.

The coalition said the region should adapt the existing manufacturing infrastructure from the once-vibrant aerospace industry to become a leading green technology manufacturing center.


Auditor Out

East West Bancorp Inc., the Pasadena parent of East West Bank, said last week that it has dismissed its auditor, Deloitte & Touche LLP.

The action was not a result of disagreements between the bank and the accounting firm, East West said in a regulatory filing, and the audited reports from the past two years did not contain a qualified opinion.

The bank also said it has hired KPMG LLP as its auditor.

The move comes at a somewhat contentious time for banks and their auditors. A number of bankers and industry experts interviewed recently by the Business Journal said accounting firms have become increasingly conservative in the down economy causing them to restate earnings.


Fresh Capital

The credit markets may be largely frozen, but that doesn’t mean businesses cannot raise fresh capital.

Bikestation, an alternative transportation company owned by Mobis Transportation Alternatives Inc. in Long Beach, announced this month that it has received a $500,000 investment by Tech Coast Angels, an angel investor group with offices across Southern California.

Bikestation develops bicycle transit centers in partnership with cities and transit agencies.


C-Suite News

Nara Bancorp Inc., the Koreatown-based parent of Nara Bank, said this month that Mark Lee has been hired as chief credit officer, effective May 1. Cliff Sung, who had served as chief credit officer, will become the senior credit administrator. Hanmi Financial Corp., the Koreatown holding company for Hanmi Bank, announced that William Stolte has been nominated to the boards of the company and the bank. Lloyd Gilbert has been promoted to managing director of Strategic Equity Group, a middle market investment bank in Los Angeles.


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

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