Wednesday, May 20, 2009

Plaza Bank in the NEWS

See the story in the June Seattle Business magazine:

"Fiscally prudent, and the results bear testimony," reads the headline.

I just received our office copy of Seattle Business magazine, and on p14 is a story on Plaza Bank. Get your copy and take a read!

In the meantime...some fun facts about the Bank we love:

Plaza Bank launched in 2006 with a commercial lending office in downtown Seattle and a retail branch at Kent Station; today it stands strong with $89 million in total assets. In a climate that has witnessed most banks’ assets fall, this bank has even seen a small increase. While other banks are conserving capital by stopping loan growth and reducing their existing portfolio, Plaza Bank is still in growth mode and is continuing to lend. It shows a 17 percent capital ratio—twice the level of an adequately capitalized bank at 8 percent.

What’s its secret? To start, the bank never took on mortgage lending nor did it invest in mortgage interests. Additionally, Plaza Bank was founded on reaching out to Latinos and other minorities in a way that is meaningful.

In fact, its total loans to women and minorities were over 40 percent of total loan balances outstanding at the end of 2008. Approximately 70 percent of its consumer loans are to Hispanics. Its consumer loans generally pay much better than their commercial counterparts based on a lower default rate; the difference may be due to customers choosing to consolidate higher-interest debt into more palatable payments, or because the loan is a home equity or auto loan. Says President and CEO Carlos Guangorena, “People don’t want to default because they need their cars and homes. They’re a part of your everyday life, and the last two things you want to lose.” Though the sheer number of consumer loans is larger than the number of commercial loans, approximately 90% of its lending is on the commercial side. About 23 percent of its commercial loans are to Latinos; a total of 40 percent to combined minorities and women. Examples of the types of commercial lending Plaza Bank sees include loans for a business secured by commercial real estate, or a revolving line of credit to help with cash flow.

Guangorena sees the future growth of Plaza Bank coming mostly from the business side but also from the consumer group, as the bank matures and increases its consumer product offerings. Commercial lending will grow as well in the short run. “We have capital, so we want to lend. Of course, we’ll be wary of real estate construction and residential development, but we’ll be looking at deals the other banks can’t or don’t want to be involved in right now.”

Poised to weather the storm and rebound with the economy, this is one bank whose future could be described as brillante.

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