53.7 F
San Diego
Thursday, Mar 28, 2024
-Advertisement-

Despite Stimulus Package, SBA-Backed Loans Declining Locally

The U.S. Small Business Administration churned out a press announcement this month noting the big turnaround in lending activity as a result of the American Recovery and Reinvestment Act, also known as the $787 billion stimulus program.

Since the program launched in February, the SBA said it guaranteed $11.3 billion in loans nationally made by its partner banks. The average weekly volume after the stimulus program increased to $275 million compared with $165 million weekly before the stimulus took effect.

The San Diego District office, which encompasses San Diego and Imperial counties, said a similar increase in lending was evident following the stimulus.

However, local SBA officials readily admit that this year is the lowest in terms of both number of loans approved and the dollar amount of the loans.

For the fiscal year that ended Sept. 30, the local office reported 520 SBA-backed loans, down 46 percent from 961 loans for the 2008 fiscal year.

The breakdown for the 2009 fiscal year was 392 loans in the 7(a) program for $96.6 million, and 128 loans in the 504 loan program for $80.8 million.

Loans in the 7(a) program can be used for working capital or real estate purchases, while 504 loans can be used only for buying buildings the business is occupying.

In FY 2008, the local district approved 777 loans in the 7(a) program for $206.7 million, and 184 loans in the 504 program for $125 million.

The SBA also said that its micro-loan program was in such high demand, the $40 million allocated in stimulus funds was exhausted. In August, the SBA expanded the program with an additional $74 million, including $50 million for loans.

The micro-loans max out at $35,000 and are aimed at fledgling, home-based businesses. They can be used for working capital, supplies and office furniture.

• • •

Imperial Capital Replaces CEO: Troubled Imperial Capital Bancorp fired George Haligowski as president and CEO effective Oct. 31, it said Oct. 1.

Haligowski, 54, had been on medical leave since February, just about the same time the $4.2 billion institution was hit with a cease and desist order from both federal and state regulatory agencies that required the bank to increase its capital, among other things.

ICB replaced Haligowski on Oct. 1 with Joseph Kiley III, 53, who had been working at the bank as a consultant. Kiley is a former president and CEO of First Bank of Beverly Hills in Calabasas, and worked as chief financial officer at National Mercantile Bank in Los Angeles.

Kiley will earn a base salary of $683,328, which is larger than Haligowski’s annual base of $590,000. Yet, Haligowski’s compensation in 2008 was about $1 million, including all the perks. Among these were $6,500 monthly to maintain his La Jolla estate and a $3,500 monthly housing allowance.

Both Kiley’s package and Haligowski’s severance package (yet to be revealed) were approved by federal and state regulators, which have been overseeing the bank’s operations closely for most of this year. ICB failed to meet an Aug. 11 deadline to raise additional capital and comply with the February orders.

According to its call report filed with the Federal Deposit Insurance Corp., for the first six months of the year, ICB had a net loss of $70.8 million, compared with a net profit of $6.7 million for the first half of 2008.

For the same period, ICB reported nonperforming loans of $267 million, which required heavy additions to its loan loss reserves. Its nonperforming loans as of June 30, 2008, totaled $116.7 million.

As of the halfway point, ICB had a risk-based capital ratio of 6.78 percent, below the 8 percent minimum ratio to be adequately capitalized.

• • •

Sorrento Pacific Buys Brokerage: Sorrento Pacific Financial, a San Diego brokerage serving commercial banks, said Sept. 29 that it acquired Partnervest Securities, a Santa Barbara-based network of about 70 independent brokers, for an undisclosed sum.

“We anticipate this acquisition to double our revenue over the next 12 months,” Rick Dahl, Sorrento Pacific’s senior vice president, said of the deal completed in July. For 2008, Sorrento Pacific generated $4.2 million in revenue.

Sorrento Pacific intends to operate Partnervest as a separate division. Launched about three years ago, Sorrento Pacific shares the same founders and owners as Cuso Financial Services, Valerie Seyfert and Amy Beattie.

Sorrento Pacific has about 120 independent brokers under its umbrella, and five full-time employees. Cuso has 350 investment advisers and 120 employees.

• • •

Small Change: Since its founding last year, Huntington Capital Fund II said it has received $78 million in capital commitments and made 10 investments, including a recent combination of mezzanine debt and equity in Advanced Structural Alloys of Oxnard … Wells Fargo Bank eliminated paper envelopes from its 3,104 deposit automated teller machines throughout Southern California, saying the move will reduce waste and save trees. Last month, Wells Fargo ranked 13th on a list compiled by Newsweek magazine of the nation’s greenest companies.

Send any local financial news to Mike Allen via e-mail at mallen@sdbj.com. He can be reached at 858-277-6359.

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-
-Advertisement-