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Plumas Enters Crowded Los Angeles Market

A Northern California bank has opened a branch in Woodland Hills — its first in the Los Angeles area — to serve business clients seeking Small Business Administration loans to make acquisitions or expand operations. Plumas Bank looks to generate at least $5 million in loans in the first year the Woodland Hills office is open. Starting in the second year, the bank wants to bring in $10 million in SBA loans, bank officials said. Neil Sokoler, a San Fernando Valley native with two decades experience in providing SBA loans, will head up the new office. Sokoler previously worked for Hana Small Business Lending, and the Woodland Hills office of Comerica Bank. “When I find out a loan has kept someone employed or created jobs it is a feeling of sincere satisfaction,” Sokoler said. Based in Quincy, Calif., located northeast of Sacramento, the bank primarily serves the rural Plumas, Lassen, Modoc and Shasta counties. It employs 134 workers in 11 branches and a real estate loan office in Reno, Nev. For the second quarter 2012, Plumas reported assets of $454.6 million, flat growth from the year-ago period when it reported assets of $453.6 million. The bank had net income of $462,000 compared to a net loss of $70,000 net loss in the second quarter 2011. Plumas already has been making loans in the Los Angeles area, so opening a local office made sense, Sokoler said. For the first three quarters of the 2012 fiscal year, Plumas made nine loans totaling $4.6 million that originated from the Los Angeles SBA district office. It enters a crowded a field of other SBA lenders in the greater Los Angeles area. For the total nine-month period, lenders deployed more than 1,700 loans totaling slightly more than $1 billion. JPMorgan Chase, Wells Fargo, and CDC Small Finance Corp. were the top three lenders. Plumas is looking to serve customers who want loans that do not require real estate assets to be listed as collateral. The market is underserved and seen as risky by other lenders, said Rodney Borges, manager of the Small Business Lending Group. “It is a potentially big market,” Borges said. “There are people buying and selling businesses all the time and the SBA is the most common way to finance a change in ownership.” By going after a niche market, even a small bank like Plumas will find a demand for its loans, said Patrick Rodriguez, economic development specialist and spokesman for the Los Angeles office of the SBA. He said while business owners may benefit from not having to list real estate as collateral, they should be prepared to face more scrutiny from the lender. “If you are qualified and have no collateral, it makes it a little bit harder,” to be approved, he added. Rather than requiring the customer to list real estate assets as collateral, Plumas is basing its lending decisions on the cash flow of the borrower. “When we analyze a business, there is going to be reliance on the repayment rather than on the liquidation of the capital,” Borges said. When reviewing a loan application, the bank will consider criteria such as the personal credit of the business owner, the cash flow of the acquisition target, future prospects for the business, and borrower’s previous lending experience. Borges said Plumas expanded its business operations to Los Angeles because it does not have a lot of growth potential serving the demographics of its primary geography. Still, the bank has no plans to open a full branch in Los Angeles and is content with the SBA lending operation, he said. “As things develop we will determine what’s needed in terms of adding people to the office,” Sokoler added. In addition to Sokoler’s Southern California ties, Borges worked at Bank of West and several Plumas underwriters had previously worked at Comerica and Community West Bank, which has offices in Los Angeles and Ventura counties.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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