San Diego Business Journal

There was nothing micro about Accion San Diego’s lending last year.

The local nonprofit that makes loans ranging from $300 to $35,000 turned in a record-breaking performance in 2012, lending more than $2 million to 166 borrowers.

In the fourth quarter alone, Accion made 60 loans for a total of $735,000.

Granted, most banks easily exceed these numbers and some likely did individual loans of $2 million and more, but in these times of super-tight credit, Accion’s record deserves kudos.

Elizabeth Schott, Accion’s executive director, said the organization saw its loan portfolio grow to about $3 million by year-end, the largest in its 18-year history. Accion makes loans mainly to startup business owners who usually have relatively little experience or track record.

In other words, not bankable.

“Accion’s success and growth demonstrates the immense demand for alternative financing opportunities, as more and more San Diegans turn to running their own businesses during this time of economic recovery,” Schott said.

While Schott said some banks have increased their lending to smaller businesses recently, many cannot do so for all sorts of reasons.

Entrepreneurs who have little or no track record in their chosen industry can’t qualify for a bank loan. Indeed, most banks won’t even consider such requests.

That leaves said prospective borrowers to either hit up family and friends or max out their credit cards. With Accion, borrowers must prove they can repay, but the barrier to approval isn’t as tough.

Qualified first-time borrowers can get as much as $35,000, but most receive much less. The borrowers generally have to prove themselves with an initial loan before receiving larger amounts. Interest rates on the loans are also higher than what most banks charge, and range from 10 percent to 18 percent.

Accion’s average credit last year was just above $12,000, but Schott said the agency launched a pilot program this year that pushes the maximum to $50,000.

Accion isn’t like a bank in that it gets its funding from contributions and grants (about a dozen banks are partners), but it’s serious about getting repaid.

The organization’s payoff record speaks for itself. Last year, it reported gross loan losses of 5.9 percent. Yet after subtracting recoveries, that’s really a 3.5 percent net loss, meaning the repayment rate is about 97 percent, Schott said.

Delinquencies on the portfolio run about 1 percent, another remarkable measure especially considering the riskiness of the credits.

Maybe the most impressive statistic that Accion provided in a recent report was 1,000. That’s the number of jobs its funding helped to maintain or create from its roughly 400 active borrowers.

This year, buoyed by another $600,000 grant from the U.S. Department of Treasury’s Community Development Financial Institutions Fund, Accion has more money to lend. That helped it to expand its staff recently by hiring an additional loan officer to bring the total staff to 15; the group plans to add another loan officer by June, Schott said.

Given these facts, look for Accion to have another record-breaking year in 2013, making more loans, creating more jobs, and contributing to the strength of the local economy, Schott said.

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First Republic Racks Up Robust Results: San Francisco-based First Republic Bank, with five local offices, reported annual, record net income of $402.5 million, up 14 percent from 2011. Loan originations were a record $15.5 billion, and total loans outstanding were $28.5 billion, up 23 percent from the prior year.

Total assets at year-end were $34.4 billion, with asset quality improved from a year ago. Tier 1 capital at Dec. 31 was 9.32 percent, up from 8.81 percent at Dec. 31, 2011.

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Hanmi Bank on Trading Block: Hamni Financial Corp. said it’s seeking a buyer for its subsidiary, Los Angeles-based Hanmi Bank, which has an office in San Diego. The bank recently had dual consent orders lifted by the state’s Department of Financial Institutions and the Federal Reserve Bank of San Francisco.

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Small Change: Regents Bank, now a subsidiary of Grandpoint Capital in Los Angeles, plans to convert back office systems for California Community Bank, as part of the merger of the banks, on Feb. 11 … Navy Federal Credit Union, with 22 branches locally, was named to the 100 Best Companies to Work For list by Fortune magazine. It’s the third time Navy Fed has made the list.

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