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Showing posts with the label Minority Banks

CBCF makes a $5 million deposit in Black banks

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According to news reports, "The Congressional Black Caucus Foundation, Inc. (CBCF)..(made a) $5 million (deposit) in African-American banking institutions as part of a broader effort to increase the availability of loans for businesses and individuals in African-American communities. In all, five banks will receive $1 million each" in deposits. The Foundation, "established in 1976, is a non-partisan, non-profit, public policy, research and educational institute intended to broaden and elevate the influence of African Americans in the political, legislative and public policy arenas."

The banks are:
Chicago-based Seaway Bank and Trust Co. New Orleans-based Liberty Bank and Trust Co. Washington, DC-based Industrial BankNewark, NJ-based City National BankDurham, NC-based M&F Bancorp 
This effort was spearheaded by Ron Busby, Sr., CEO, U.S. Black Chambers, Inc. (pictured right).

All in all, a good move. This is modeled on efforts we spearheaded over 20 years ago:
We …

Minority Banks Struggle To Offer Loans

"President Obama met with the nation's top bankers yesterday at the White House. The President urged the CEO's to bolster lending to consumers and small businesses to help jumpstart the economy. Largely absent from the meeting were community-based minority banks, which have struggled to stay afloat in recent years. Bill Cunningham, CEO of Creative Investment Research, discusses the historic role of minority lending and..its role in the current economic landscape."

Online at: http://www.npr.org/templates/story/story.php?storyId=121458912&ft=1&f=46

Minority Banks in trouble

On Friday, November 6, 2009, state and federal regulators closed several minority banks, reducing the total number of minority owned banks in the US to 236 from 239.

According to Marketwatch.com, "The failed institutions included (Asian-owned) United Commercial Bank of San Francisco, the main subsidiary of UCBH Holdings. The bank had $11.2 billion in total assets and was the seventh largest failure during the 2008-2009 crisis. The FDIC was appointed receiver and sold the failed bank's deposits and $10.2 billion of its assets to East West Bank of Pasadena, Calif., which also has operations in China and is a subsidiary of East West Bancorp.

The Office of Thrift Supervision shut down (Black-owned) Home Federal Savings Bank of Detroit and appointed the FDIC receiver. The FDIC arranged for Liberty Bank and Trust of New Orleans to assume the failed thrift's deposits and its $14.9 million in total assets.

The Missouri Division of Finance took over (Black-owned) Gateway Bank of St.…

Another minority bank fails - Mirae Bank, Los Angeles, CA

According to the FDIC, "On Friday, June 26, 2009, Mirae Bank (Asian), Los Angeles, CA was closed by the California Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. All deposit accounts have been transferred to Wilshire State Bank, Los Angeles, CA ("assuming institution") and will be available immediately. On Monday, June 29, 2009, the former Mirae Bank locations will reopen as branches of Wilshire State Bank."

Top Five Minority Financial Institutions for 2009

Creative Investment Research, Inc. released its listing of the top women and minority owned financial institutions (banks and thrifts). The listing, using 2009 financial, demographic, HMDA and CRA information from a database maintained by Creative Investment Research, was compiled using the firm's proprietary Fully Adjusted ReturntmIndex. The Fully Adjusted ReturntmIndex provides a full description of the economic condition and social responsiveness of a financial institution.Asian - Hawaii National Bank, Honolulu, HI. 808-528-7711; Black - Industrial Bank, Washington, DC. 202-722-2040; Hispanic - Interamerican Bank, FSB, Miami, FL. 305-223-1434; Native American - Peoples Bank, Adair, OK. 918-723-5453; Women - Central Bank of Kansas City, Kansas City, MO. 816- 483-1210; See: http://www.minoritybank.com/cirm3.htmlIf you contact any of these institutions, do us a favor....let them know you found them here!!

Creative Investment studies community development and minority-owned financial institutions for PG&E

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Washington, D.C. — Creative Investment Research, Inc. announced that it has provided to Pacific Gas & Electric Company current, up to date social and financial credit ratings covering community development banks serving areas of high social need within PG&E’s service territory. PG&E has made FDIC-insured deposits in fifteen minority and community based institutions. The Community Investment Program (CIP) positively reflects the company’s values and has been undertaken as part of PG&E’s continuing effort to be responsive to the needs in communities it serves. The portfolio has a 90 day maturity. Performance data for the portfolio, relative to investing alternatives, is outlined above.

TARP Capital to Minority Banks (Update)

Asian Banks $936 (0.48%)
Cathay General Bancorp $258
Center Financial Corp $55
East West Bancorp Inc $306
Pacific City Financial Corp. $16
Saigon National $2
UCBH Holdings Inc $299

Black Banks $40 (0.02%)
Broadway Financial Corp. $9
Carver Bancorp, Inc $19
OneUnited Bank $12

Hispanic Banks $1,551 (0.80%)
First Bancorp $400
International Bancshares Corp $216
Popular Inc $935

Grand Total $2,527 (1.30%)
Total to all banks $193,793

Amounts in millions US $
Percentage of total to all banks in parentheses
As of 1/23/09

Minority Banks See Clients Through Tough Times

"Tell Me More, December 16, 2008 · Although the federal government is pouring billions of dollars into the nation's banks, minority-owned financial institutions serving African-American and Latino communities face their own unique challenges, such as higher unemployment rates and less access to credit. Bill Cunningham, of Creative Investment Research and Luis Pastor, of the Latino Community Credit Union, discuss helping their clients through economic crisis.

See: http://www.npr.org/templates/story/story.php?storyId=98325149

Audio for this story will be available at approx. 12:00 p.m. ET today."

Minority Banks Receiving TARP Capital - Update

We have updated our listing of minority banks receiving TARP funding:

11/14/2008
UCBH Holdings, Inc. (Asian)
San Francisco CA
Purchase
Preferred Stock w/Warrants
$298,737,000
Par

11/14/2008
Broadway Financial Corporation (Black)
Los Angeles CA
Purchase
Preferred Stock w/Warrants
$9,000,000 Par

12/5/2008
East West Bancorp (Asian)
Pasadena CA
Purchase
Preferred Stock w/Warrants
$306,546,000 Par

12/5/2008
Cathay General Bancorp (Asian)
Los Angeles CA
Purchase
Preferred Stock w/Warrants
$258,000,000
Par

12/5/2008
Popular, Inc. (Hispanic)
San Juan PR
Purchase
Preferred Stock w/Warrants
$935,000,000
Par

Total to minority banks: $ 1,807,283,000
Total to all banks: $165,306,798,000
Percentage: 1%

Minority Banks participating in the U.S. government's capital purchase program

"Company: Broadway Financial Corp. (BYFC) (Black owned)
Participation: Broadway received a $9 million investment and issued warrants to buy 183,175 common shares at $7.37 each. Date of disclosure: Nov. 14. Notes: Broadway's risk-based capital ratio was 11% and its tangible capital ratio was 7.65% at Sept. 30."

"Company: East West Bancorp Inc. (EWBC) (Asian owned)
Participation: East West received preliminary approval for $316 million of additional capital Date of disclosure: Nov. 14. Notes: East West's total risk-based capital would increase to 16.20% from 13.12%, and tangible equity to tangible assets ratio would increase to 10.73% from 7.95% as of Sept. 30."
(See: http://www.creativeinvest.com/research/AsianBanks.html)

"Company: UCBH Holdings Inc. (UCBH) (Asian owned)
Participation: UCBH issued $298.7 million in preferred shares and warrants to buy up to 7.84 million common shares at an exercise price of $5.71 a share. Date of disclosure: Nov. 14. Notes:…

Top Ten minority owned banks in the US

Below, we feel, are the best minority owned banks in the US (as of 6/30/08):

LIBERTY BANK & TRUST CO, New Orleans, LA (Black)
INDUSTRIAL BANK, Washington, DC (Black)
MECHANICS & FARMERS BANK, Durham, NC (Black)
CITIZENS SECURITY BK GQ INC, Guam, GU (Asian)
CENTRAL BANK OF KANSAS CITY, Kansas City, MO (Women)
BROADWAY FEDERAL BANK F S B, Los Angeles, CA, (Black)
BANCO SANTANDER PUERTO RICO, San Juan, PR (Hispanic)
UNITED BANK OF PHILADELPHIA, Philadelphia, PA, (Black)
CARVER STATE BANK, Savannah, GA, (Black)
NORTH MILWAUKEE STATE BANK, Milwaukee, WI (Black)

Yes, we know there are a lot of Black-owned banks on the list. Here's why:
Black banks have always had relatively higher levels of nonperforming loans, so they know better (than, say WAMU) how to survive with these types of loans on the books. We think this skill will serve them well in the current credit cycle. Thus, they are rated a little higher than other minority banks.

We think smaller banks will do well over this part of t…

Minority Banking News

Global Stock Market Plunge and Minority Banks

According to the Washington Post, "Stock markets around the world plummeted today, as a financial crisis that began in the market for U.S. home mortgages spread to almost all corners of the global economy."

This challenges both theories concerning global equity market independence and equity portfolio risk management techniques that rely on global diversification to control risk. This is particularly troubling: there may be no safe haven for equity investors.

In 2006 and 2007, global economic activity was very strong. This was due, in part, to $458 billion dollars spent by the US, between 2003 and 2007, on the Iraq war. In an earlier age, stimulus of this magnitude would have all but guaranteed that the US would not fall into recession in 2008. To date, several factors have intervened:
The US has outsourced the Quartermaster function. Thus, critically important military support functions, including meal preparation and service, are now handled by foreign nationals. Economic st…

Minority Bank Regulation (From the Viewpoints section of the American Banker Newspaper, 12/28/07)

On October 30, 2007, the Subcommittee on Oversight and Investigations of the House Committee on Financial Services held a hearing to review “the role of minority-owned financial institutions.” My organization has been researching women- and minority-owned banks and thrifts since 1989. We feel minority banks, specifically African-American banks, need one thing and one thing only: Capital.That regulators do not recognize this is indicative of their decidedly lax approach to the sector. It also suggests that they may not be meeting their responsibilities under the Financial Institutions Reform, Recovery and Enforcement Act, which requires regulators to take steps to preserve minority banks. Banking is a field that depends upon precise numerical data, but federal banking regulators do not have a valid estimate of the number of minority banks in the U.S. According to our data, by June, 2007, there were 225 minority owned banks and thrifts in the U.S., up from 190 at the end of 2005. The …

Urban Trust Bank links success to business lenders

In a November 2, 2007 article in the Tampa Bay Business Journal, Senior writer Margie Manning writes that "Urban Trust Bank expects to provide an alternative business lending option with its two new offices in the Tampa Bay area."

We were quoted in the article stating that " Minority owned banks in general have struggled with business lending,"

Urban Trust "opened branches in the Wal-Mart SuperCenters in Gibsonton and Palmetto Oct. 29."

High Growth, Low Returns Found at Minority Banks

From: American Banker Newspaper
Wednesday, September 19, 2007
By Katie Kuehner-Hebert

Banks that target minority groups, particularly Hispanics and Asian-Americans, are reporting asset growth well above the industry average, largely because of an influx of immigrants.

However, on average these banks are less profitable and less efficient than mainstream ones, according to a report published last week by Creative Investment Research Inc., a Washington consulting firm that focuses on minority banking.

Assets at minority-owned banks are on pace to increase by an average of 17.43% this year, compared with the overall industry average of 6.38%, according to the report, which cited data from the Federal Deposit Insurance Corp. and other sources.

William Michael Cunningham, the consulting firm's president and chief executive, said the trend reflects both the increased number of start-ups targeting Hispanics — about a dozen have opened since the end of 2005 — and the continued asset g…