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Thursday, Sep 29, 2022
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Saigon National Looking to Join Ethnic Bank Rush

BY PAT MAIO

The buzz at the Brookhurst Town Center in the heart of Little Saigon in Orange County: Michael H. Mullarky and his startup bank.

Some sitting at the center’s outdoor cafe occasionally will take a break from their socializing and stroll past the cavernous storefront next door to see what Mullarky is doing.

He’ll wave, take a sip from his Squirt soda, then bury his head to edit board meeting minutes or draft credit policies on his laptop computer.

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Mullarky is chief credit officer for Saigon National Bank, which is set to join Westminster’s growing Vietnamese banking scene this fall.

“I’m in a fish bowl. Everybody walks by and looks in. I’ve been sitting here for three months,” said a sweating Mullarky, who keeps doors propped open in the front and back of the soon-to-be opened bank.

In late May, Saigon National rival First Vietnamese American Bank opened its doors to mark the first bank specifically targeting the Little Saigon community.

Little Saigon, whose main artery includes Brookhurst Avenue, runs through parts of Westminster and Garden Grove. Home to 300,000 people, the area is the largest Vietnamese ethnic community outside Vietnam.

The last major ethnic bank to serve the community failed in 1991. Tiny Delta Savings Bank was taken over by federal regulators after succumbing to the era’s banking crisis.

The thrift’s $3.5 million in deposits were bought by East West Bancorp Inc. of San Marino, a bank that focuses on Chinese and other Asian clients.

There should be plenty of business for Saigon National and First Vietnamese to coexist, said Ed Carpenter, the chief executive of Irvine-based Carpenter & Co., an investment bank that specializes in tracking and advising community banks.

“There was an entirely different marketplace at the time with Delta, when there was a significant downturn in the economy,” he said.

He forecasts a different outcome for today’s ethnic banks.

“Both management teams are sound,” said Carpenter of the ventures.

The banks are the latest in Orange County to cater to specific ethnic groups. A number of Chinese banks are centered in Irvine, with Uniti Bank and other Korean-focused banks based in the area.


Raising Up To $15M

Saigon National is looking to raise $13 million to $15 million in startup funds by the fall. The bank, which has its national bank charter, priced its shares at $10 each.

The bank is targeting Vietnamese-Americans in Westminster and Garden Grove as well as Hispanic businesses in western Santa Ana, according to Chief Executive John J. Kennedy.

“We are following the population and demographics of the area,” said Kennedy, pointing out that its market ranges from the Santa Ana River to the east and San Diego Freeway (Interstate 405) to the west, bounded by Trask Avenue to the north and Edinger Avenue to the south.

“Brookhurst is the main thoroughfare for Little Saigon, and the strip mall is the best central location we could find with plenty of out front parking,” Kennedy said.

Kennedy is a veteran banker who has started banks from scratch in Lompoc, Bakersfield and in Los Angeles’ Koreatown neighborhood.

Directors of Saigon National include Vietnamese-born businessmen Ban Duc Nguyen, a furniture seller and journalist, and Kiem Nguyen, owner of Nguoi Viet Supermarket in Little Saigon.

First Vietnamese American, a few blocks away at the corner of Westminster and Bolsa avenues, is angling for international banking business, such as providing letters of credit that facilitate the import-export market.

The bank raised $15 million in startup funding earlier this year. First Vietnamese American initially sought about $11 million in startup funds, but boosted its target after receiving commitments of more than $30 million from investors, the company said.

Paul Nguyen, the 58-year-old owner of Pacific Machine Co. in Garden Grove, said he closed his account with a big bank recently.

Nguyen said the bank would refer him to branch centers in Los Angeles and San Francisco to handle international financing services, or wouldn’t work with him on credit issues.

“At First Vietnamese, I can talk directly with the president. They treat me like they understand me,” said Nguyen, whose 45 factory workers produce aerospace parts for commercial jet makers Boeing Co. and Raytheon Co.

Tho Huynh, grocery owner of A-Dong, Saigon Supermarkets and DaLat Supermarket, imports seafood and frozen foods from Thailand, Taiwan, Vietnam and other Asian countries.

“Vietnamese people are not comfortable with the barrier of language and culture in other banks,” Huynh said. “Community banking is easier.”

First Vietnamese Chief Executive Hieu T. Nguyen said federal and state regulators planned to examine First Vietnamese’s policies and procedures this month. The bank opened in May.

“We’re doing very well , I’m not nervous,” Nguyen said.

While attracting checking and savings account business from consumers is important for the startup, Nguyen said the big opportunity is in providing international trade banking services.

“Trade between the U.S. and Asia is growing tremendously,” he said. “Trade finance is the name of the game.”

Nguyen has the ability to make loans backed by the U.S. Export-Import Bank, which is the official export credit agency of the United States.

The bank helps companies line up loans to buy or sell goods internationally.

Nguyen, 58, fled his original North Vietnam home in 1953 when he was 6 years old via a U.S. military transport. He and his family went to South Vietnam, afraid that they would be persecuted for their Catholic beliefs in the north.

His father, who helped run a large coal mining operation in South Vietnam, died in 1971. Nguyen’s mother died in Southern California six years ago.

Like many older Vietnamese-Americans, Nguyen’s mother carried a pouch of a few hundred dollars sewn into her dress.

“She used to tell me it was safer there because she could touch and smell her money,” he said. “There are a lot of un-banked people like my mother in the Vietnamese community.”


Pat Maio writes for the

Orange County Business Journal.

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