L.A.’s huge Latino population has long held the attention of banks large and small, but recent troubles at institutions targeting the market might create an opportunity for Glendale’s up-and-coming Americas United Bank. Two months ago, the minority-owned bank, led by industry veteran Adriana Boeka, purchased the Santa Fe Springs and Commerce branches of Irvine’s Banc of California Inc. The branches have firm roots in the Latino business communities there; they were owned by Banco Popular until last year, when the Puerto Rican holding company sold its 20 California locations to Banc of California. The price paid by Americas United was not disclosed. The purchase marks the second for Americas United since March 2014, when it bought the Lancaster branch of Silvergate Capital Corp. Americas United now has five locations, including its original branches in Glendale and Downey. The lender’s strategy is to focus on Latino businesses and their owners, and secondarily on retail bank customers. Latino business owners have huge footprints in both Commerce and Santa Fe Springs, Boeka observed. Plus, Americas United is inheriting valuable customer relationships by keeping the same employees, many of whom have been there since the branches were owned by Banco Popular. The deal must still be approved by regulators but is expected to close in the third quarter. “Does it make sense? Absolutely,” Boeka said. “We’re buying approximately $50 million deposits and $35 million that has been lent out. That’s enough deposits to put out in loans with a little bit extra in two very good markets we know about, and where our target market is. We know how to service them and once we get those customers, we won’t have customers that leave.” Troubled sector Americas United was co-founded by Manuel Remon and other Cuban-Americans in 2006 to serve business owners and professionals such as themselves. Remon was a career banker who previously worked at Banco Popular in the Santa Fe Springs and Commerce branches. He currently serves as chairman of Americas United. As a new bank, Americas United struggled through the recession along with other lenders, suffering loan losses and delinquencies. In 2011, the bank hired Boeka, a longtime executive with Bank of America Corp. and San Francisco’s Wells Fargo & Co. She most recently focused on managing community banks and turning around struggling smaller institutions. Boeka said that since she came aboard, the bank has returned to profitability and is now eyeing growth in southern Los Angeles. After the purchase of the Lancaster branch in March of last year, Americas United’s assets grew to $162 million, up from $120 million three months earlier. And it has continued to expand its balance sheet. As of June 30 of this year, the bank’s assets stood at $169 million, with $105 million in loans outstanding. Other banks focused on the Latino market haven’t fared as well. Banco Popular exited the market and L.A.’s Proamerica Bank which was also formed by Latino executives to serve small and medium-size businesses, lost $79,000 in the quarter ended March 31, the first time it’s lost money since the final quarter of 2011. Bruce Mills resigned as chief executive in March, leaving the leadership reins to interim Chief Executive Sal Varela. The bank was co-founded by Maria Contreras-Sweet, who left last year to head the federal Small Business Administration. Also last year, East L.A.’s Pan American Bank required a bailout and recapitalization by 17 community banks before being bought in August by Porterville’s Finance and Thrift Co. Both are Latino owned and focus on low- to moderate-income consumers and businesses. Finally, Citigroup Inc. said in July that it would close its Century City-based Banamex USA operation, which moved money between the United States and Mexico. Citigroup has agreed to pay $140 million to regulators for not taking steps to prevent money-laundering. While all those banks don’t necessarily serve the same market, and some had internal problems, the closures and troubles still create opportunities for Americas United, said Tim Chrisman, principal of downtown L.A.’s Chrisman & Co., an executive search firm that works with banks and other financial services companies. “We all want that Latino small-business market to be served more effectively, and if buying the two branches is going to give them more critical mass, then that’s super. It’s good for banking and for the market,” said Chrisman, who is also a former chairman of Banc of California. “You can’t ignore the demographics in Southern California. It doesn’t serve anybody well to not try and provide good banking services to every part of our economy.” ‘Consultancy’ banking What attracted Boeka to Commerce and Santa Fe Springs is the concentration of Latino-owned businesses in those cities. Statewide, about 16.5 percent of businesses are owned by Latinos. But in Commerce and Sante Fe Springs, Latinos own 32 percent and 22 percent, respectively, of businesses. “That’s pretty good territory to do what we do best,” she said. “This is really a geographic expansion that made a lot of sense for the footprint we had – to go into the southern Los Angeles market, and those branches that are already there and established in a market we already know.” What’s more, buying a few bank branches is easier – and requires less cash – than buying an entire bank, even a small one. An acquisition would involve many more components, such as joining shareholders together, combining capital, addressing duplications of services and personnel, and regulatory compliance, Boeka said. Roberto Barragan, chief executive of the nonprofit Valley Economic Development Centers in Sherman Oaks, which helps capitalize minority businesses, said the Latino entrepreneur market is underserved by many of the large national banks, providing a growth opportunity for Americas United. “You need an institution like Banco Popular that focused on the entrepreneurial, minority community – they saw the potential there and grew there,” Barragan said. “This is a great opportunity for Americas United to step in their place.” As for culture, Boeka said the bank is small and nimble enough to make quick decisions, plus it’s an active SBA lender, a large part of the loan market. In addition, the bank’s employees understand the personal touch that Latino clients demand. “They like to have a banker with whom they can pick up the phone and talk with on challenges to business, and they can also benefit from the challenges we see from other clients,” Boeka said. “It’s more of a consultancy.” Both Chrisman and Barragan said the declining number of banks since the recession has created opportunities for growing banks, especially as the economy has rebounded and small businesses need loans and other services. But despite the opportunity, Americas United still faces challenges. “It’s still going to be up to Americas United to manage itself, and make loans that are sound and prudent,” Barragan said. “The same basic rules apply.”
