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Southwest Tops SBA’s Small-Biz Loan List

The latest numbers released by the U.S. Small Business Administration are generally cause for crowing by lenders that made the most loans during the last fiscal year.

Since lenders measure both by the number of individual loans and dollar amount, there’s more than one No. 1.

The No. 1 lender in the San Diego/Imperial counties SBA district in terms of dollar volume for the fifth year in a row was Southwest Community Bank, a nine-office bank based in Carlsbad. Southwest Community made 48 SBA guaranteed loans for $34.3 million during the fiscal year that ended Sept. 30.

When measuring by individual loans, Bank of America captured the top spot in the district with 182 loans for a gross dollar amount of $6.4 million.

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BofA, now with headquarters in Charlotte, N.C., and 25 branches in the county, was also the overall winner nationally, with 11,911 SBA loans. The dollar amount for those loans was $412.7 million.

To make matters a bit more complicated, the SBA has two primary types of loan programs, the 7(a), used for working capital and equipment; and the 504 loan, used for property acquisition.

As for 504 loans, CDC Small Business Finance Corp., a San Diego-based certified development company, is by far the biggest participating lender with 151 loans that had a gross dollar amount of $118 million.

As for SBA loans in California, U.S. Bank, based in Minneapolis and with 32 local branches in San Diego, took the No. 1 spot in dollar volume for the past fiscal year. The bank, which operates its SBA division in San Diego, reported making 465 loans for a total dollar value of $149.3 million.

As for the entire nation, the top SBA lender was CIT Small Business Lending Corp., a Livingston, N.J.-based subsidiary of CIT Group. CIT made 1,460 loans for more than $800 million.

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Banking On The Internet:

The single-office Bank of Internet USA saw continued rapid growth on both its earnings and total assets during the past year.

For its first quarter ended Sept. 30, BofI reported net income of $846,000 compared with net income of $661,000 for the like quarter in 2004.

Total assets at the end of September were at $654 million, up 44 percent from the previous year’s first quarter, while loans grew 42 percent to $503.5 million. Deposits increased 35 percent to $400 million.

Thanks to the bank’s parent company, BofI Holding Inc., conducting an initial public offering in March that added $31 million in capital, the bank had a healthy 9.31 percent core capital ratio, up from 7.6 percent for the like period of last year.

Traded on Nasdaq under BOFI, shares closed at $8.45 on Nov. 14, and ranged from $7.80 to $11.55 during the past 52 weeks.

In other news, BofI Holding Inc. said Michael Chipman and J. Gary Burke joined its board of directors.

Chipman is the founder of Chipsoft Inc., the developer of TurboTax, the income tax preparation software that was acquired by Intuit Inc. Burke is president of Truck World Inc., a wholesale and retail petroleum marketing firm.

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Comerica Gets Court Order:

Comerica Bank, based in Detroit, obtained a preliminary injunction against Irvine-based Commercial Capital Bancorp and the 24 employees the latter hired away from Comerica this past summer.

The injunction issued by San Francisco Superior Court on Nov. 7 prohibits Commercial Capital and the two dozen former Comerica employees from “using, destroying, concealing and/or disclosing” any of Comerica Bank’s confidential information and from soliciting Comerica’s customers, vendors and employees.

Commercial Capital appealed the decision on the same day, saying it believes Comerica’s suit is without merit and will defend itself.

The legal battle began in July when Commercial Capital hired James Daley, the former head of Comerica’s financial services division, to head up Commercial Capital’s newly established commercial banking division.

Soon after Daley was hired, he brought over 23 staffers from his old job.

Comerica cried foul and set out to stop what it believes is a wholescale raid on its customers. On Aug. 1, Comerica obtained a temporary restraining order against Commercial Capital, alleging Commercial Capital of fraud and malicious conduct in the misappropriation of trade secrets, unfair competition and conspiracy.

Commercial Capital Chief Executive Officer Stephen Gordon adamantly denies any wrongdoing and has said his firm doesn’t need any secrets from another company.

“In conducting our business, we do not need to use, nor want to use, another company’s confidential, proprietary or trade secret information regarding its customers, employees or vendors,” he said.

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Profits Rise:

Security Business Bank of San Diego grew its net income for the third quarter to $318,000, compared with net income of $47,000 for the same period of last year.

For the nine months, net income was $1.76 million, compared with a net loss of $151,000 for the same period in 2004.

Loans at the bank increased 44 percent to $85.4 million, while total assets rose to $116.6 million.

The bank that opened in September 2002 also reported $726,000 in non-accrual loans at Sept. 30 that amounted to 0.85 percent of its total loan portfolio. The two problem loans consisted of a participation loan with another borrower, and an SBA guaranteed loan, said CEO Paul Rodeno.

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Loan Delinquencies Drop:

A survey conducted by the California Mortgage Bankers Association of 17 mortgage banks in the state found a delinquency ratio for the quarter ended Sept. 30 to be 0.14 percent, a rate below that of the prior quarter, and 0.24 percent for the same quarter in 2004.

The survey found that 15 of the 17 companies reported no loans more than 30 days past due. The problem loans, which totaled about $100 million from an aggregate portfolio of $70.6 billion, consisted of 12 individual loans, and showed either one or two payments past due.

The largest dollar chunk of the problem loans , about $60 million , was on offices, according to the CMBA survey.

There were no delinquencies reported on loans for multifamily property, industrial property, hospitality, mobile homes, or research and development property.

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Record Results:

Four-year-old Regents Bank, which is based in La Jolla and has three offices, reported net income for the quarter of $427,000 compared with $323,000 for the same quarter of last year. The latter figure included $60,000 in tax credits.

For the nine months, Regents reported net income of $1,057,000, compared with $829,999 for the like period last year.

Total loans grew 31 percent over the prior year’s third quarter to $135 million, while total assets rose 27 percent to $202 million.

The bank’s deposits increased 27 percent to $186 million. The levels for assets, loans and deposits were all records for the bank.

Regents CEO Dan Yates said the bank will open a fourth branch early next year.

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Banking On The Bean Bar:

The city of San Diego made a second loan from its Metro Revolving Loan Fund to the Bean Bar Coffee House in the Midway area.

The $75,000 loan over five years will help the business owners construct a driveway to allow easier customer access and to pay down some of the company’s earlier debt.

The loan program, made possible by a grant from the U.S. Department of Commerce, targets businesses that are located in redevelopment areas and are unable to qualify for conventional bank loans, said Michael Lengyel, the city’s business finance officer.

While the 10 percent annual interest rate on the loan may seem high, compared with the 18 percent the business was paying on its credit cards, it was a big relief, Lengyel said.

San Diego’s Economic Development Department also operates two other loan programs: a $1 million Technology Fund and a $3 million Regional Revolving Loan Fund.

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Small Change:

Torrey Pines Bank, the San Diego subsidiary of Western Alliance Bancorporation of Las Vegas, opened its fourth office in the University Towne Centre area. Southwest Community Bank opened its ninth branch in Rancho Cucamonga. U.S. Bank won CIO magazine’s CIO Enterprise Value award in the banking and brokerage category. The Orange County Teachers Federal Credit Union mortgage subsidiary is offering a new type of home loan aimed at borrowers with median incomes below their market. Wells Fargo HSBC Trade Bank was named Service Provider of the Year at an annual awards gala hosted by the San Diego World Trade Center. San Diego County Credit Union will co-sponsor the 27th annual Chargers Blood Drive on Nov. 22.


Send any finance news to Mike Allen via e-mail at mallen@sdbj.com. He can be reached at (858) 277-6359.

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