The lingering financial crisis in Asia has opened the door for U.S. investors to buy large ownership stakes in California's Asian-owned banks.

Strapped for cash, the Indonesian owners of institutions such as East West Bank, San Marino, and United Commercial Bank, San Francisco, are selling their holdings in order to satisfy obligations abroad. As a result, U.S. investors are eagerly scooping up shares in banks once controlled by Asian families.

"We think it is a great sector," said Greg Mitchell, senior vice president at Hovde Financial Inc. in San Francisco, which owns stock in American International Bank, a Los Angeles-based Chinese-American bank. "We think it is an opportunity to make money and do business with that community."

Last month, $1.8 billion-asset East West Bank sold more than 23 million shares to such U.S. investors as J.P. Morgan & Co. and John Hancock Advisers. The private placement was seen as probably the first step in East West's going public.

"The response to our offering was overwhelming," said Dominic Ng, president and chief executive of East West Bank. "Big-fund managers see value, and I think that it is a clear signal that we'll be a major player in this market."

Another Wall Street hopeful serving the Chinese-American community is United Commercial Bank, with $1.9 billion of assets. In April, it completed a $120 million management-led buyout of its Indonesian owner, the Salim family.

United Commercial-a thrift rechartered this year as a commercial bank- filed plans with the Securities and Exchange Commission this month to raise $140 million in an offering at $15 a share.

Turning to U.S. investors for capital infusions is a marked change for these traditionally Asian-American banks, which typically grew by cash injections from home.

"But that's not the case these days," said Henry Fields, senior banking partner at Morrison & Foerster, a Los Angeles-based law firm. "The quickest way is the U.S. stock market."

Only three of California's Asian-owned community banks-General Bank, Nara Bank, and Cathay Bank, all in Los Angeles-are traded publicly. With more U.S. ownership, the direction of many tightly held, family-owned institutions seems sure to change. Specifically, executives at Asian-owned banks will find themselves under more intense Wall Street scrutiny and answering to fund managers with definite exit strategies.

That's fine with Mr. Ng of East West Bank.

He conceded that U.S. ownership of East West is a tremendous responsibility for the bank's management team, which will have to deliver bottom-line results. But under new ownership, he said, the bank is poised to grow, possibly to $5 billion of assets, both internally and through acquisitions.

More than before, U.S. investors are betting on the prospects of Asian- American banks, which are prospering from strong trade opportunities in the Pacific Rim and from California's growing Asian population, industry watchers said.

In addition, with more than 15 foreign-owned banks targeting the Korean, Taiwanese, and Chinese communities, consolidation seems likely.

"U.S. institutional investors recognize that these markets are large and profitable," said Wade Francis, president of Long Beach-based Unicon Financial Services, "and they want in."

How much U.S. investors are willing to pay for Asian-American bank stocks is unclear, however.

Preferred Bank, Los Angeles, which caters mainly to Chinese-Americans, pulled the plug Friday on a 1.1 million share public offering valued at $20 million. The bank's shareholders were prepared to sell one million shares at $18 to $20 per share. Sources familiar with the offering said it was overpriced.

The $385 million-asset bank plans to try again this fall, said James T. Hill, managing director at Sutro & Co., Los Angeles, the lead underwriter. He blamed a soft market for independent bank stocks and summertime doldrums.

Tom Killian, principal at Sandler O'Neill & Partners, New York, said U.S. institutions preparing to make Asian-American bank investments are also concerned about balance sheet risk.

Since these banks lend to businesses that derive revenue from exports to Asia, they take on non-U.S. credit risk and build up an offshore deposit base. These factors are heavily scrutinized by U.S. investors, Mr. Killian said.

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