Small-Business Loans Are Key to Bank’s Success

First National Bank of Ventura, a one-office institution that opened in February, 1988, is prospering by making loans to small businesses in Ventura and Santa Barbara counties. And, President Mel Sheeler reports, the young bank is gearing up to start a mortgage loan division that he hopes will benefit from a post-recession comeback in real estate.

First National booked its first Small Business Administration-backed loan in June, 1991. By last January, the bank had moved up to 35th in dollar amount of SBA loans funded among the 66 banks in the agency’s Los Angeles district. By March, the bank ranked 21st in the district.

“Under the SBA program, we’ve made loans at favorable rates to doctors, manufacturers, consulting groups, veterinarians, nurseries and retailers,” Sheeler said.

He said many of the borrowers used the loans to buy real estate at depressed prices. Others used the proceeds for working capital, to buy new equipment or to finance expansion.

First National’s small-business lending volume reached $2.5 million in the quarter ended June 30, Sheeler said.

Sheeler, who is also president of the Greater Ventura Chamber of Commerce, expects to open the mortgage lending unit by fall.

“There seems to be a pent-up demand for both new construction and used housing. As soon as the economy stabilizes and people’s confidence returns, I expect real estate to come back.” The unit also will seek to enter the burgeoning refinancing market, Sheeler said.

In the first six months of 1992, First National had net income of $90,000, up 48% from $61,000 in the same period last year. Assets in the latest six months were $33.2 million, down slightly from last year’s $34.7 million.