Asians clearly are in. Just as GBC Bancorp takes the No. 1 spot among the first hundred largest community banks, and Hanmi Financial Corp. comes in second among the second hundred largest, Nara Bancorp of Los Angeles takes the lead among the third hundred largest community banks, those with assets ranging from $494 million to $671 million. Nara caters to the Korean-American community.
Only five years or so ago, Nara had been in trouble. It was a tiny bank with one branch and assets of less than $70 million. It was losing money and on the brink of failure.
But then Benjamin Hong was recruited from Hanmi, another Korean bank, and named president and CEO. (He was promoted to CEO of the parent Nara Bancorp, last November.)
Hong raised capital for the bank and succeeded in dramatically turning it around. At yearend 2000, its assets stood at more than $600 million. In addition to its Los Angeles branches, it has offices in Silicon Valley, New York, New Jersey, Seattle and Chicago.
"We specialize in commercial banking, small business lending, trade finance, and consumer lending and leasing everything related to small business," says Hong.
Northern Empire Bancshares is another California-based banking company that ranks among the 10 most profitable among the third 100 largest community banks. Its Sonoma National Bank is not ethnic-based, but like most other successful community banks, it carefully tends its niche.
Its specialties are small business lending and commercial real estate. Deborah Meekins, president and CEO, acknowledges that commercial real estate lending can be risky, but says, "the people who put the bank together 16 years ago have a lot of expertise in commercial real estate." She adds that, "we are very conservative and we’re lucky to be in a growing area of the country." Meekins, who started her career as a teller with Bank of America, joined Sonoma a year after it was founded.
She says deposit growth has been tougher than it had been, and for that reason the bank has opened a branch in each of the past three years.
The bank’s loan-deposit ratio stands at 95%. But Meekins says $67 million of the total $450 million of loans in its portfolio is insured by the Small Business Administration, which means the bank’s liquidity is greater than implied by the loan-deposit ratio.
Making SBA-guaranteed loans is relatively easy for Sonoma because it is a "preferred lender" under SBA rules. That means "we know what we’re doing," says Meekins, and the SBA Administration doesn’t have to approve each SBA loan.
Eighth-ranked CoBiz Inc. of Denver is another bank holding company that is thriving by feeding off the disarray caused by acquisitions of local banks by larger ones. Steven Bangert, chairman and CEO, is part of a group that purchased CoBiz in 1994. Bangert is more a financier than banker, and was deeply involved in restructuring troubled thrifts during the 1990s.
CoBiz banks focus on small businesses and professionals.
It has nine banks in Colorado, and one in Phoenix, with two locations. The banks usually are formed when former officers of merged banks come to Bangert to set up a competing bank. The presidents of most CoBiz banks have been in banking and commercial lending for 15-18 years.
Jon Lorenz, for example, president and vice-chairman, had been head of corporate banking for Colorado National Bank, which has been acquired by US Bancorp.
