There's not much good that came out of the 1992 Los Angeles riots, but they did give rise to some telling local banking lore.

For example, Ben Hong, then chief executive of the ethnic Korean Hanmi Bank, authorized his branch managers to offer generous terms to help those Korean-American merchants whose businesses had been damaged or destroyed so they could get back to business even if they had little left as collateral.

In a megalopolis like Los Angeles, that's an example of the crucial role ethnic banks play in the county's many ethnic centers.

Indeed, 22 of the 75 insured commercial banks in Los Angeles County 30 percent are ethnic banks, with combined assets of more than $38 billion. What's more, a dozen or so banks with headquarters in foreign lands have significant operations here.

And in a city of nearly 40 percent immigrants, ethnic banks, often organized by local civic and business leaders, have been crucial to immigrants working toward their America dream.

Most of the banks are predominately Chinese- or Korean-American focused, but there are also Japanese and one homegrown Hispanic bank, and a handful of de novo banks in the fund-raising stage. They target either a specific ethnic group or a multi-ethnic mix among Hispanic, Korean, Chinese, Cambodian, Indian and Middle-Eastern residents.

The driving force? It's the vast immigration that has transformed Los Angeles from a mostly Caucasian city into one of the world's most diverse metropolitan areas.

"The Korean and Chinese banks did, and continue to, benefit from a customer base that comes to the United States with a fair amount of wealth already," said Ed Carpenter, whose Irvine-based Carpenter & Co. has underwritten many banks in Los Angeles County. "These (other) communities also are densely concentrated, have a high preponderance toward savings and entrepreneurial activity (and) are very loyal to their local banks."

Seven of the largest ethnic banks all either Korean- or Chinese-American trade on the Nasdaq to generally positive reviews from Wall Street analysts. And the second largest homegrown bank in the county is East West Bancorp, a Chinese-American bank with more than $10 billion in assets.

But it's not as though ethnic banks don't face challenges both locally and from afar.

For one, the constant drumbeat from Wall Street for greater profits runs up against the Asian bankers cultural inclination to be cautious and conservative.

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