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Wells Fargo Still Leading the Way in Number of SBA Loans

Wells Fargo Bank continues to maintain a lead on a list of loans guaranteed by the Small Business Administration in the San Diego region, according to the most recent report released by the SBA.

For the first nine months of the SBA’s fiscal 2011 year, ended June 30, Wells had made 78 loans for $39 million within the local district that includes San Diego and Imperial counties. In just the past month, Wells made nine loans under the SBA’s 7 (a) program for nearly $5 million.

In terms of dollars, CDC Small Business Finance Corp., the San Diego nonprofit entity that only makes loans through the SBA’s 504 program used to purchase property, was highest with $43.6 million on 77 loans.

After Wells and CDCSBF, there was a big drop off in the number of loans made in the local district for the period, with JP Morgan Chase Bank at 57, Borrego Springs Bank at 42 loans, and California Bank & Trust at 40.

Overall, the San Diego district office said a total of 514 SBA loans were made for a total dollar value of $243.8 million. That compared with the like nine-month period of the prior year when the SBA lenders in the local district advanced a total of 458 loans for a total value of $188.2 million.

The volume represented an increase of 12 percent, while the dollar amount was 29.5 percent higher than the like period of 2010.

• • •

The Ups-and-Downs of Banking: The two megabanks that dominate the San Diego market released dramatically different second quarter reports.

Wells, based in San Francisco and with 23 percent of the local market’s deposits, reported net income of $3.73 million, up 30 percent from $2.88 million in net income for the like quarter of 2010.

Bank of America, based in Charlotte, N.C. and with 19 percent share of the market based on data from last year, had its worst quarter in its history with a net loss of $8.8 billion compared with a net profit for the like quarter of 2010 of $3.1 billion.

BofA, which is the nation’s largest bank with $2.2 trillion in assets, took the heavy loss due mainly to a $8.5 billion legal settlement with investors in mortgage backed securities that contained mortgages made by Countrywide Financial, the Calabasas mortgage lender that BofA acquired in 2008 for $4 billion. Investors sued the bank in an attempt to force it to repurchase the tainted, subprime home loans that Countrywide made and contributed to the housing bubble and its collapse starting in 2006.

The fallout from the billions of defaulting subprime mortgages is still being felt today, and some analysts predict it will be several years before the housing market recovers to some normalcy.

• • •

PacWest’s Profit Picture: PacWest Bancorp, based in Los Angeles and with 19 branches in San Diego County, reported net income of $12.8 million for the second quarter, up from the prior year’s second quarter when it had $2.7 million in net income.

The banking parent firm to Pacific Western Bank said the increase was due to an increase in its net interest margin or the basic spread it makes between what it charges for loans and what it pays for deposits, and reduced loan loss provisions for its problem loans.

For the six months ended June 30, PacWest reported net income of $23.5 million compared with a net loss $57.8 million in the first half of 2010.

The bank, which has grown by about $800 million after acquiring Los Padres Bank based in Solvang in August 2010, has reduced its size. As of the end of June, PacWest held about $5.4 billion in assets, down from about $6 billion in assets right after the acquisition of the failed Los Padres. PacWest’s total loans were $3.6 billion, compared with nearly $4 billion at the end of December.

PacWest said it was holding $117.5 million in problem assets including $65.3 million in nonaccrual loans at the halfway point. That compared with $132.8 million in problem assets for the like period of 2010.

As a ratio of total loans, the nonperforming assets made up nearly 4 percent. However, the bank revealed that it’s also holding $215 million in classified loans, or loans that it regards as substandard or doubtful to repay the full amount owed. At the end of December, the bank said it held just about the same amount of classified loans, or $214 million.

• • •

Small Change: Coronado First Bank scheduled a special shareholders meeting to approve its sale to Embarcadero Bank Aug. 23 at the Coronado Library… Bank of Internet USA introduced depositing checks through using a variety of mobile devices called MyDeposit…North American Development Bank agreed to advance a $77.4 million loan to the Imperial Valley Solar Co. 1 LLC for the construction of a 23-megawatt solar plant in Niland near the Salton Sea.

Send any news about local banks to Mike Allen via email at mallen@sdbj.com. He can be reached at 858-277-6359.

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