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Santa Ana bank targets locals

The Santa Ana Business Bank is largely Latino-owned and will serve the Latino community.

December 03, 2007|Jennifer Delson | Times Staff Writer

A group of Santa Ana leaders, including a City Council member, a planning commissioner and a community college trustee, have opened the city's first locally owned bank in 40 years, with the hope of finding customers in the area's huge Latino business community.

The Santa Ana Business Bank, which opened in October, hopes to provide loans to small businesses that often are turned down by larger banks. "There are more Latino entrepreneurs and many, many banks do not understand what these businesses face culturally or financially," said Alfredo Amezcua, the bank's chairman.

The bank is one of the few Latino-owned banks in the country, and it's an industry in which Latino executives are rare. Santa Ana Business Bank, with 400 investors whose outlay totals $12.3 million, is 80% Latino owned.

The Santa Ana bank is the third aimed at the Latino community to open in Southern California in the last year. It opened downtown at Main and 16th streets in a city where 75% of the population is of Latino descent, 53% is foreign-born, and city leaders struggle to overcome negative stereotypes of the city to attract investment.

Large banks, such as Wells Fargo and Bank of America, have taken steps to attract Latinos, including offering Spanish-language services and accounts to holders of Mexican identification cards, the matricula consular, which the Santa Ana Business Bank will do as well.

Dan Hudson of Nubank, a company that helps banks open, said big banks often don't cater to small businesses or try to overcome the distrust Latino immigrants may have toward them.

"With the size of the Latino population, it is strange not to have more Latino community banks," said David Haithcock, executive director of the California Independent Bankers, a community bank trade association.

The bank's board of directors is led by Amezcua, an attorney and a Rancho Santiago Community College District trustee with close ties to City Hall. The others include Councilman Carlos Bustamante and his twin, Alfonso, a psychologist; Michael Metzler, chief executive of the Santa Ana Chamber of Commerce; Planning Commissioner Victoria Betancourt; and Manuel Ramirez, founder of the Hispanic 100, a prominent Orange County political organization. Three board members have banking experience: chief executive Larry Frampton, who was chairman and chief executive of First American Bank in Rosemead; George Pla a former director of the same bank; and David Scarborough, who was on the board of Pan American Bank in Los Angeles.

Board members recounted the times they unsuccessfully sought business loans from large banks and were forced to turn to friends for the funds.

"The fact that the loan committee and the entire board has a local basis . . . hopefully that will give them a distinct advantage," said Santa Ana Mayor Miguel Pulido, himself on the board of Fullerton Community Bank.

"Maybe they can respond better when they know an owner and the background. Will it rival Bank of America in five years? No, but all banks start small. Do I think they have a market here? Yes."

Many observers discounted the possibility that the bank board's political connections could lead to conflicts of interest when a customer needed help from the city, such as a zoning change.

"Small business is the backbone of our city," said Councilwoman Michele Martinez. "Sometimes business and politics don't mix, but it also can create a dynamic that is best for the community,"

Carlos Bustamante said the board's knowledge of the community, particularly of Latino businesspeople, would help the bank provide personalized service and solid loans.

He expects that many customers will be people he knew before he became a council member.

The bank will not offer mortgages.

Pla said the bank was "not a social experiment. It is about economic development in this community. We are here to make good loans and get good customers in."

Yet the project "presents a challenge, no doubt," Haithcock said, because of the large population in Santa Ana that has little experience with banks.

And then there is the state of the economy, when people are worried about an economic slowdown at least.

Frampton said the timing was perfect. "Warren Buffett says, 'Buy when no one wants it and sell when everyone does.' "

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