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Credit Union Finds Time Is Right for Pursuing Big Banks’ Customers

Credit unions continue to expand and gain market share mainly from larger lenders.

For example, California Coast Credit Union, San Diego’s third largest with $1.8 billion in assets, said it added about 7,000 new members this year, bringing its total to about 121,000.

CEO Marla Shepard said her credit union is finding plenty of new customers who are coming from the nation’s largest banks as more news floods media channels on the role of the largest banks in the financial crisis.

“As all the press continues about the ongoing concerns with the largest banks involved in the mishandling of the mortgages. … People are more open to change,” Shepard said.

The gains were more pronounced two years ago when some bigger banks inflicted higher banking fees on customers, but it’s been a fairly steady stream in the past year, she said.

The new customers are also the result of lots of new loans the credit union is making this year. CCCU reported total loans of $923 million as of June 30, up 2 percent from the same period in 2012.

The increase is a direct result of more customers feeling confident about their financial situations, historically low loan rates and aggressive marketing, Shepard said.

“In the first half of this year, the refinancing activity was very strong, but that was true for all credit unions,” she said. “But in the last couple of months, that has dropped off significantly.”

Increased auto borrowing this year is also evident at CCCU and most other credit unions, which often focus on this type of lending. CCCU is offering a low fixed rate of 1.98 percent on new and used cars. Some credit unions, for example Pacific Marine CU in Oceanside, are beating that with a low of 1.5 percent fixed for a five-year term.

As Cal Coast’s assets increased by 4 percent over the year, so has its net income. It reported net profit of $11.9 million for the first six months of the year, compared with net profit of $7.1 million in the like period of 2012.

Shepard said Cal Coast will likely add a new branch early next year, but declined to divulge where it will be. That would bring its number of branches to 23.

• • •

Upstart mortgage bank moves to No. 2: You may not have heard of imortgage, a private mortgage bank based in Scottsdale, Ariz., but folks in the mortgage industry sure have.

The business with three offices in the county, recently noted that it was second in California for new mortgages for the first half of this year with 5,129. Wells Fargo Bank was the biggest mortgage lender this year in the state by far with 18,054 units, according to data provided by CoreLogic.

“We really stayed focused on the purchase business, which makes up about 85 percent of the total,” said Michael Stowers, who manages the La Mesa office of imortgage. “We stayed committed and connected to our referral sources and the folks who were buying homes.”

Most of imortgage’s lending is done in California, where it has 22 of its 56 offices. The rest are in Arizona, Colorado, Nevada, Oregon, Texas and Florida.

That footprint is going to get larger once the business completes a merger later this year with loanDepot of Texas, which has a presence in all 50 states.

Combined, the companies represent more than $15 billion in annualized origination volume, they said.

By itself, imortgage is on track to do about $5 billion in originations this year, up from $3.5 billion in 2012, Stowers said.

• • •

Local SBA lending continues to rise: As they have for much of this year, the number and dollar volume for business loans guaranteed by the Small Business Administration keep rising this year in San Diego.

From Oct. 1 — the start of the 2013 fiscal year — through Aug. 31, there were 576 SBA loans made in the San Diego district, which includes Imperial County. In gross dollars, those loans totaled $292.7 million. That compares with the same nine months of the 2012 fiscal year when there were 556 SBA loans for $275.4 million in the district.

U.S. Bank made the most SBA loans with 75. In terms of dollars, the biggest lender was CDC Small Business Finance Corp., which provided part of the $69.5 million in 504 loans in the San Diego district.

CDCSBF is by the far the largest lender in the nation of 504 loans, used to buy real estate, with some $839 million in financing dispersed. Commercial lenders provide about 50 percent of a 504 loan, while CDCs provide 40 percent, and the borrower puts down 10 percent. For the nine-month period ended Aug. 31, CDCSBF said the SBA guaranteed portion of that total was about $355 million.

Small Change: Opus Bank, which acquired three local branches from Pacific Western Bank last year, said its Opus Community Foundation approved 25 grants to nonprofit groups in the state, including Junior Achievement of San Diego County.

Send news of locally based financial institutions to Mike Allen via email at mallen@sdbj.com. He can be reached at 858-277-6359.

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