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Two Remaining Local Thrift & Loans Deploy Different Strategies

Industrial banks, also called thrift and loans, are a holdover from a long past era when many banks shunned industrial or blue collar workers, who needed places to cash their checks and get an occasional loan.

In San Diego the area once supported a half-dozen such institutions, but today the number is down to two: Rancho Santa Fe Thrift & Loan in San Marcos, and Balboa Thrift & Loan in Chula Vista.

The latter has four offices, making money, and looking to expand. The former is clearly winding down and not making new loans, but still in business.

Calls to Rancho Santa Fe T&L weren’t returned, nor was a call to its owner, Firstrust Bank, a $2.5 billion lender based in Conshohocken, Penn., a suburb of Philadelphia.

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In an interview last year, CEO Mike Johns said RSFTL was exiting the car lending business and looking at a new model as he wound down the existing portfolio.

From nearly $100 million in assets held at the end of 2007, RSFTL was at $28.5 million at the end of June. It’s now the best capitalized lender in the county by far, with an equity base of $27.4 million, giving it a leverage ratio of 99.4 percent.

To be considered a well-capitalized bank, that ratio should be at least 5 percent.

While it’s not making much in new loans, those that are left are performing well. For the first six months of this year it reported net income of $598,000 compared with $2.5 million for the first half of 2011 when it held about $43 million in total assets.

Meanwhile over at Balboa T&L, CEO Ted Monzingo, who has been at the helm since 1990, is looking to beat last year’s record net earnings of $4.4 million.

Through June, net income was $2.3 million, so they’re on track.

The great bulk of BTL portfolio remains in auto loans it buys from a network of about 200 car dealers from Fresno to San Diego.

The past few years have seen a big increase in car buying, but also a heck of a lot more competitors in the field, which explains BTL’s tepid 5 percent growth in assets going back to December 2007. It’s at $200 million now.

About 20 percent of the portfolio is in commercial real estate. Monzingo says most of those loans are below $500,000.

Both RSFTL and BTL are among the oldest locally based lenders extant, with the former founded in 1978 and the latter in 1981. Told of that fact, Monzingo says, “I don’t know if that’s a good thing or a bad thing, but I guess it’s good because we’re still around.”

The lender now has three branches in Claremont, La Quinta and Fresno, and looking to expand into Orange County.

In 2010, BTL got hit with a consent order from the Federal Deposit Insurance Corp., which it refused to sign.

The regulator and BTL settled the issue the following year, without the lender agreeing to any sanctions.

Monzingo won’t say much about the outcome except that he’s glad it’s all behind him.

• • •

Accion gets another $600K: Accion San Diego, the nonprofit micro lender, said it received another $600,000 grant last month from the Treasury Department’s Community Development Financial Institutions Fund.

It’s the second consecutive year it got that amount, which will go toward funding more loans to fledging business entrepreneurs.

Loans range from $300 to $35,000, and generally carry higher interest rates than regular bank loans, but far less than what credit cards charge.

Not to mention the fact that in most cases, banks won’t extend credit to most Accion borrowers because the loans are too small.

Executive Director Elizabeth Schott said the grant couldn’t have come at a better time as the organization tries to keep pace with increasing demand from many business owners.

In addition to using the money to fund more loans, Accion will use some of the money to expand its staff to service the expanded clients, she said.

For the first half of this year, Accion said it extended 74 loans for about $913,000, compared with 43 loans for about $538,000 for the first half of 2011.

• • •

Small Change: California Bank & Trust upgraded its mobile banking app to include bill paying from mobile devices…First PacTrust Bancorp, parent of Pactrust Bank, declared a quarterly cash dividend of 12 cents per share payable Oct. 1 to shareholders of record as of Sept. 14…CUSO Financial Services, the broker dealer for credit unions, said it signed up Pentagon Federal Credit Union as a client again, after PenFed used another broker dealer for a year and a half.

Send any news about locally based financial institutions to Mike Allen via email at mallen@sdbj.com. He can be reached at 858-277-6359.

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