New ‘Premier Performing Bank’ Caters to an Immigrant Clientele in Little Saigon

Horton Sherwood isn’t sure whether he should be honored or worried.

The tiny institution he runs, United American Bank in Westminster, was picked as a “premier performing bank” by the Findley Reports, a Brea-based publication that collects and evaluates regulatory statistics and ranks the state’s banks.

Being a premier performer, Sherwood said, is like being on the cover of Time or Sports Illustrated magazines--sometimes your luck turns bad.

“I told (publisher) Gerry Findley that every bank he puts on that list gets into trouble,” Sherwood said, only half jokingly.

Indeed, the premier performing list has included in past years such institutions as Heritage Bank in Anaheim, Capistrano National Bank in San Juan Capistrano, South Coast Bank in Costa Mesa and Valencia Bank in Santa Ana--all of which were later declared insolvent and closed by regulators.

But the annual list regularly includes a quarter to a third of the state’s 444 banks, and many are well-regarded institutions with a long history of profitability, such as Eldorado Bank in Tustin and Citizens Bank of Costa Mesa.

The criteria are strictly mathematical. To make the list, a bank’s assets or deposits must grow by at least 8%, its net operating income before loan losses and taxes must be at least 1.25% of total average assets and 12% of equity capital, and its net loan losses must be no more than 0.80% of total loans.

The 1987 premier performers, recently announced by the Findley Reports, include 10 banks in Orange County. They are Eldorado, Citizens, Orange National, Pioneer, Mariners, National Bank of Southern California, American Commerce National, Bank of Anaheim, Mission Viejo National and--for the first time in its five-year existence--United American.

“We did pretty well last year,” Sherwood said. The bank, with $23.4 million in assets, posted net income of $265,000.

Located in the heart of Little Saigon on Bolsa Avenue, United American caters to the Vietnamese and Chinese communities. Its deposits and loans are mainly with the nearby mom-and-pop stores that constitute the biggest Vietnamese shopping district in the nation.

“This whole area is cash oriented. Nobody takes credit cards or checks,” Sherwood said. “Many people will come down from the north (Los Angeles County, in particular) and open accounts with us just so they can cash checks here and have money to spend on the weekends.”

The bank, owned by Chinese-Americans, recognizes that most of its customers are immigrants unfamiliar with U.S. ways. Many Asian customers, for instance, will make twice as many bank visits as native customers just to get a car loan. Sherwood said.

“Here, people come in, and you have to explain how to fill out the loan application,” he said. “Then they have to think about it. Then they bring in the whole family to talk about the rate. They come in six or seven times.

“But they’re in a new culture, and we’re training them.”

The bank has an application pending with state regulators to open a branch in Monterey Park to tap the huge Asian-American deposit base there, Sherwood said.