- Key insight: California International, the nation's only Vietnamese-owned bank, has embarked on a turnaround following nearly a decade of losses that totaled more than $10 million.
- Forward Look: Thanh Pham, CEO of the $75 million-asset bank, has set a goal of reaching $1 billion of assets over the next five years.
- Expert quote: "If it's not impossible, it's not really a good goal," Pham said.
California International Bank in Orange County is having what may be its most profitable year ever. Through June 30, the $75 million-asset institution reported net income totaling $600,000.
A modest amount for most banks, perhaps, but California International, currently the nation's only Vietnamese-owned minority depository institution, has struggled mightily for most of its 20-year history. The company has reported just three annual profits, none bigger than $1.5 million.
Last month, the Office of the Comptroller of the Currency released California International from two long-running enforcement actions — one targeting operational deficiencies, the other for alleged Bank Secrecy Act violations.
CEO Thanh Pham is confident California International's turnaround has legs, and that its earnings will grow in the second half of the year and into 2026. Pham credits the change in fortunes — its nine-year string of annual losses, which totaled $10.5 million and ended in 2023 — to finding the right niche.
Pham described California International, which does business as Cali Bank, as primarily a small-business lender with an average loan size of about $1 million. By being slightly more accommodating on terms than its bigger competitors, California International has been able to grow its portfolio by nearly 50% since the end of 2022.
Put succinctly, "we do loans the big banks turn down," Pham said.
Bigger banks frequently reject bankable loans that don't fit into their credit "box," said Pham, who spent a decade at the $44 billion-asset Associated Banc-Corp before joining California International.
"They have a box and they say, 'Your [loan-to-value ratio] has to be 85%,'" Pham said. "Borrowers come to me, and they need 87%. I'm like, 'No big deal.'"
What seems like a lowering of standards has so far worked at California International. The bank reported zero charge-offs in 2023, 2024 and the first six months of 2025.
California International was founded in 2005 as Saigon National. It's located in Westminster, in the heart of Orange County's Little Saigon district, which is home to nearly 200,000 Vietnamese-Americans, along with tens of thousands of Vietnamese-owned small businesses.
So the bank would seem to have a ready-made customer base. Pham, however, said the Vietnamese community's conservatism on money matters inclines it to use bigger, more established financial institutions. Moreover, California International's rocky history has kept other potential customers away, Pham said.
Beyond its history of losing money, California International was among the last banks to repay government loans received as part of the financial crisis-era Troubled Asset Relief Program.
Still, those issues paled in comparison to the reputational damage the bank sustained when a former CEO, Bill Lu, was indicted on racketeering charges. The scandal led to the bank being rebranded as California International in 2016.
"I think that at some point, the community would like to support a more Vietnamese-focused institution, but the bank has a very bad reputation," Pham said. "It takes a long time to rebuild trust. … I don't think it's going to be a fast road."
It's unlikely that California International could have survived without the support of Vietnamese investor Do Quang Hien, who acquired the bank in 2015 and has supported it since then. "He wants the community to have a [Vietnamese-owned] bank," Pham said.
The potential for such a bank in Orange County is huge, said Anil Puri, director of the Woods Center for economic analysis at Cal State Fullerton.
"It's a very good fit," Puri told American Banker, adding that the local Vietnamese business sector is growing, and business owners are increasingly optimistic about the future.
"The Vietnamese community is very entrepreneurial," Puri said. "There are a lot of small businesses, not only in Little Saigon, but throughout Orange County. The whole community, they have had a tough past, they know they have to make it on their own, and they're doing it. … These aren't mom-and-pop stores. They're established businesses, some of them with hundreds of employees."
An ethnic bank with a connection to the community "can do very well," Puri said.
Indeed, entrepreneurs in other markets with large Vietnamese-American communities appear to be arriving at the same conclusion. In Houston, a group says it's raised more than $19 million in capital, and plans to acquire a small community bank. Their proposed USV Bancorp would be the second Vietnamese-owned minority depository institution.
"The fact that banks are forming is a sign of strength," Puri said. "[Organizers] think they can make money, that there's enough business to be done. It's a vote of confidence in the community."
For his part, Pham remains committed to leading California International and transitioning it gradually from a defensive, survival-oriented crouch into a growth mode. For starters, the termination of the OCC formal agreements should make hiring easier.
"I've had to be a pretty darn good salesperson sometimes to hire people," Pham said. "Any executive, they immediately asked about [the enforcement actions] and why they happened."
Upgrading California International's technology may be a more urgent task. Pham expects to channel some of the new earnings into improved software. He's concerned about studies indicating that upward of 40% of younger consumers are turning to nonbank fintechs to meet their financial needs.
"I've got to make my customer experience as good as the fintech customer experience," Pham said. "I have some good technology partners I'm talking to about it, but it's still a work in progress."
Pham, who grew up in Indiana and graduated from Notre Dame with an accounting degree, joined California International in 2017, shortly after it hit rock bottom. He was appointed CEO in 2021.
"I grew up in Indiana, so I never really got to live and work among Vietnamese people," Pham said. "There was always that longing. I don't speak Vietnamese well enough to go and work in Vietnam, so I thought the second-best thing would be Southern California."
Pham's goal now is for California International to reach $1 billion of assets within five years, which works out to a compound annual growth rate of 68%.
"If it's not impossible, it's not really a good goal," Pham said.
