Formerly Struggling Bank Now Touted as Asset

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In less than two years, Pan American Bank has gone from teetering on the edge of closure to being touted as a prized acquisition.

The East L.A. bank announced last week that it will be bought by Oakland’s Beneficial State Bank, co-founded in 2007 by Democratic Party donor and environmental activist Tom Steyer and his wife, Kat Taylor.

The transaction will be an all-cash purchase, but further financial terms were not disclosed. The deal is expected to close in the middle of this year. The combined entity will operate as Beneficial State Bank.

Pan American has served the Latino community for more than five decades. It was bought last year by Porterville’s Finance and Thrift Co., which then assumed Pan American’s moniker and relocated its headquarters to East Los Angeles. That followed a $6.3 million recapitalization in 2014 from 16 western community banks, saving the then-unprofitable institution from being shuttered by regulators.

Beneficial State calls itself a social enterprise bank with a triple bottom-line focus on social justice, environmental resilience and economic sustainability.

Both banks are certified community development financial institutions serving moderate- to low-income consumers and businesses.

San Francisco billionaire Steyer left the hedge fund he founded in 1986, Farallon Capital Management, several years ago to focus on nonprofit and advocacy efforts. He and Taylor, Beneficial’s co-chief executive, are active in social justice and environmental causes.

Taylor said Pan American will give Beneficial State a foothold in Central Valley and Southern California markets, while also helping to flesh out the Oakland bank’s suite of commercial, consumer and nonprofit-focused products.

“We’ve never been in auto lending, and (Pan American) has a wonderful practice of responsible auto lending,” Taylor said. “They also do furniture lending, which has been another source of predatory practices in past.”

Aside from eventually getting Beneficial State’s expanded line of products and a new name, Taylor said little else will change at Pan American branches.

“(Customers) will keep their account numbers, and the same personnel will be staying in place. All branches will stay where they are,” she said, adding that the overall bank headquarters will be in Oakland.

Robert Hughes, who runs Pan American now, will be president of Beneficial State’s consumer bank and remain in Porterville.

Beneficial State will have assets of about $580 million and deposits of roughly $465 million after the acquisition. Pan American had $165 million in assets as of the third quarter, according to the Federal Deposit Insurance Corp. The combined institution will have a dozen branches from Sacramento to Los Angeles and in Oregon and Seattle as well.

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