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Friday, Sep 30, 2022

Small-Business Loans Make a Big Comeback in L.A.

Several local banks are taking advantage of a rising demand for small-business loans to increase their national profiles.

According to data recently released by the U.S. Small Business Administration, nine L.A. banks ranked among the 100 largest SBA lenders nationwide in the first six months of the fiscal year, which began in October. That number is up from six the previous year.

In particular, Wilshire Bancorp Inc. and Center Financial Corp., a pair of community bank holding companies in Koreatown, both ranked among the top 25 SBA lenders in the country, ahead of such banking giants as Citigroup Inc. and Bank of America Corp. Wilshire ranked No. 21 with 168 loans, while Center Financial came in at No. 23 with 153 loans; neither cracked the top 25 last year.

By dollar value, both Center Financial at $145 million and Wilshire at $138 million ranked in the top 10 nationally.

Jason Kim, Center Financial’s chief credit officer, attributed the rise in lending to an increase in demand from potential borrowers.

“There appears to be more activity compared to a year ago with property purchase requests and business purchase requests,” he said.

City National Corp. also made a significant jump in the national rankings. The downtown L.A. institution was the 41st largest SBA lender in the country, originating 85 loans, after failing to rank in the top 100 in the same period last year.

Nationwide, SBA lending is up 47 percent this year to more than 29,000 loans, according to the data. In the L.A. district, the number of SBA loans made to local companies jumped 14 percent to 1,379, while the total dollar amount of the loans surged 65 percent to nearly $1 billion.

The role of community banks in SBA lending was expected to rise with the passage of recent legislation intended to free up capital for small-business lending. Among the measures, Congress established a $30 billion fund to encourage community banks to resume lending, and extended an earlier move to raise the SBA loan guarantee to 90 percent.

Patrick Rodriguez, a spokesman for the SBA’s L.A. office, said the legislation, combined with an improving economic landscape, has “provided tools to small-business owners through tax breaks and incentives, and also provided additional capital to small businesses through our loan programs.”

Not every local bank upped its SBA lending, however. Excel National Bank in Beverly Hills, which originated 197 such loans in the first half of last year, has made just 19 this year.

The bank said last week that it has raised $10 million “to expand its presence in the greater Los Angeles area as well as diversify its loan products, especially among the commercial and industrial markets.”

Bank executives did not return requests for comment.

Inland Merger

Credit Union of Southern California, a Whittier institution with $599 million in assets, announced plans last week to merge with a smaller credit union in Pomona.

CU SoCal, as it is known, will have $642 million in assets and eight branches after absorbing Inland Empire Credit Union, the institutions said. The transaction requires approval from state and federal regulators.

The credit union industry was upended by the financial crisis, with a number of local institutions being seized by regulators, but CU SoCal said the merger was not driven by financial concerns.

“While both credit unions are financially sound and doing well today, we know that together we can create a new organization that will be strategically positioned to grow and bring our members even more value and greater convenience over the long term,” said CU SoCal Chief Executive Dave Gunderson, who will hold the same position in the merged institution, in a statement.

The combined entity will retain the Credit Union of Southern California name.

C-Suite News

Trinity Capital LLC, a boutique investment bank in Brentwood, has hired Sharon Hatchell as senior vice president. … City National announced two hires in its capital finance unit: Martin Chin has joined as senior vice president and Brent Phillips was hired as vice president. … Union Bank, a subsidiary of San Francisco’s UnionBanCal Corp., has hired Joe Soto as community lending sales manager for the L.A. region.

Staff reporter Richard Clough can be reached at rclough@labusinessjournal.com or at (323) 549-5225, ext. 251.


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