It turns out that the financial crisis and deep recession has been a shot in the arm lately for L.A. credit unions.
Customers are flocking to the non-profit institutions, which though they have not been immune to financial challenges, are perceived to be safer than many commercial banks.
Los Angeles County credit unions saw deposits jump by $1.2 billion, or 4 percent, in the first half of the year; assets and capital saw corresponding increases as well, according to data released last week by the California Credit Union League.
Daniel Penrod, an analyst for the league, said consumers also are trying to save more in this tough economy, which is benefiting depository institutions.
"Across the board, people are wanting to save," he said. "When the boom hit, savings wasn't a priority. As the economy turned, people have realized that they can't use their home as an ATM anymore."
Indeed, the personal saving rate rose to 5 percent in the second quarter, the highest level in more than a decade, according to figures from the U.S. Bureau of Economic Analysis.
That has been a boon for credit unions, which tend to be run conservatively and are viewed as particularly safe. The not-for-profit entities take deposits and make small loans, typically personal, automobile or prime home loans.
"We're seeing a flight to quality right now," Penrod said.
The capital ratio of local credit unions rose to 9.25 percent in the second quarter, outpacing the state average of 9.08 percent. For credit unions, anything above 7 percent is considered well-capitalized.
The numbers are promising for an industry that has experienced some unexpected turbulence. Many credit unions have endured losses during the recession and have had to resort to layoffs something practically unheard of in the past.
After a successful rights offering, Preferred Bank is no longer seeking funds under the government's financial assistance program.
The L.A. institution, which focuses on the Chinese-American community, announced Aug. 31 that it notified regulators it has withdrawn its application to the U.S. Treasury Department's Troubled Asset Relief Program. The bank originally submitted its application late last year.
"Our very successful common stock rights offering has supplied us with an additional level of capital that we feel will get us through this very difficult economic environment," said Chief Executive Li Yu in a statement.
The bank recently announced that it raised $17 million in gross proceeds from a rights offering, in which shareholders are given the opportunity to buy shares later at a given price. The bank originally expected to raise $10 million.
Evergreen Pacific Partners, the largest private equity firm in the state of Washington with two funds totaling $700 million, announced last week that it will open an L.A. office.
Firm co-founder T.J. McGill said in a statement that the expansion will bring the firm closer to the large number of companies headquartered in Southern California and take advantage of "the relative low level of investment activity by local and state-based private equity firms."
Evergreen Pacific currently has three portfolio companies located in California in Brea, Fresno and San Diego.
Hanmi Financial Corp. announced a $6.9 million investment last week from a South Korean securities broker-dealer, but the Hanmi Bank holding company isn't done raising capital.
Hanmi, the largest bank headquartered in Koreatown, expects to receive $4.1 million more from Seoul-based Leading Investment & Securities Co. Ltd, after regulatory approvals, according to a statement from Hanmi Chief Executive Jay S. Yoo.
Moreover, Hanmi is in negotiations with unnamed Korean investors for additional investment, Yoo said.
News of the funding sent Hanmi's stock up 30 percent last week, making it one of the LABJ 200's biggest gainers.
Lancaster Pollard, a boutique investment banking firm, announced the opening of an L.A. office, which will be headed by Anthony Taddey. Miracle Mile Advisors, a wealth advisory firm headquartered in Beverly Hills, announced the hiring of Joseph Schlater as managing director and Mary Thomas as executive administrator. Investment banking firm Financo Inc. announced that Philippe Faraut has been hired as a managing director and head of the firm's West Coast operations, based in Beverly Hills.
Staff reporter Richard Clough can be reached at firstname.lastname@example.org or at (323) 549-5225, ext. 251.
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