Institution’s Prospects Looking Up on Eve of Union

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Things are looking up for Nara Bank on the eve of its highly anticipated merger.

The Koreatown institution, a subsidiary of Nara Bancorp Inc., said last week that it successfully raised $55 million through a stock offering. The news came as the institution announced that its third quarter earnings beat Wall Street expectations.

Proceeds from the offering will be used to support its pending Center Financial Corp. merger, which is expected to close by the end of the quarter. The union will give Nara assets of roughly $5.5 billion, making it by far the nation’s largest Korean-American bank.

Nara sold 7.6 million shares at $7.25 apiece, and offered an additional 1.1 million shares to cover overallotments. Total proceeds would be $63 million. The offering was significantly less than originally planned: In a June 3 Securities and Exchange Commission filing, Nara said it was contemplating a $150 million capital raise.

In addition to supporting the merger, Nara said proceeds will support internal growth and be used to retire outstanding debt.

The offering came as the bank reported an improvement in its financial performance and lending activity. Nara reported net income of $8.7 million during the third quarter, the best single-quarter performance since 2007.

Encouraged by the recent developments, Julianna Balicka, an analyst with New York-based Keefe Bruyette & Woods Inc., increased both her earnings expectations for the bank and share price target, which now stands at $11. She said in a research note that Nara’s merger puts it in a stronger position than many rivals.

“Few banks right now have catalysts for growth; very few are at a transformational point in their franchise development, and fewer still are in a game-changing position for their markets,” she said. “Nara, with their pending merger of equals, is one such bank.”

Nara’s shares jumped by nearly 24 percent to $8.31 during the week ended Oct. 26, making it one of the top performing local stocks on the LABJ Index.

Fast Growth

Grandpoint Bank hasn’t even been around for two years, but it has already established quite a reputation.

The institution, owned by downtown L.A.’s Grandpoint Capital Inc., is one of the fastest-growing banks in the nation by deposits, according to a new report from Charlottesville, Va.-based industry research firm SNL Financial.

Grandpoint’s annual growth rate for deposits was 416 percent during the past few years. Its growth ranking is second among all banks and thrifts with less than $1 billion in assets, surpassed only by RomAsia Bank in Monmouth Junction, N.J., which had an annual growth rate of slightly more than 500 percent.

Grandpoint owes its eye-popping growth mostly to a series of acquisitions it completed after investor Don Griffith acquired Santa Ana Business Bank last year and used it to launch Grandpoint. Since then, the bank has bought a handful of institutions, including Orange Community Bancorp in August.

The deals have boosted Grandpoint’s assets to $804 million and deposits to $697 million.

Griffith acknowledged the fast growth, but he’s not going to take too much credit.

“It’s pretty easy if you buy a bunch of banks,” he said.

The one other Southern California bank to appear in SNL’s ranking was Opus Bank, which was the eighth fastest growing large community bank with a 76 percent growth rate. Opus, which recently moved its headquarters from Redondo Beach to Irvine, has also completed a series of acquisitions.

Transfer Campaign

Credit unions are eagerly anticipating this Saturday, when many bank customers are expected to close their accounts in favor of community institutions.

An online movement that has been gaining support over the past month, Bank Transfer Day, was started by a local art gallery owner. The movement has been encouraging people dissatisfied with big banks to switch to credit unions by Nov. 5.

While credit union groups have not officially endorsed the campaign, many institutions have expressed support for the idea behind it. Some local credit unions are even going a step further.

Wescom Credit Union, a large institution in Pasadena, made stickers that say “I Transferred My Money to Wescom” for new customers who switch as part of the movement.

C-Suite News

The L.A. office of the U.S. Small Business Administration announced last week that it has sworn in Victor Parker as its district director. Parker was previously division managing director at Myers Stevens Group. … Kinecta Federal Credit Union in Manhattan Beach said it has hired Sharon Moseley, a former Bank of America Corp. consultant, as chief information officer.

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

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