Also: Earnings improve for Exchange, Bank of Marin, Bank of Napa
Sonoma County Economic Development Board is advancing in its effort to assist very small “micro-enterprise” companies in their access to capital, with plans to begin rolling out a targeted technical assistance program before the end of this year.
With a $30,000 community development block grant provided this year to help develop the initiative — and the potential for $50,000 in additional grant funding authorized by the Sonoma County Board of Supervisors — the program seeks to establish a hub for seminars and one-on-one consultation for those borrowers in Sonoma County.
It would be among the latest efforts to help a group of aspiring or current business owners that typically faces steeper hurdles when seeking a commercial loan, providing mentorship to those borrowers while connecting them with lenders that have specialized in serving owners of so-called “microbusinesses.”
“In some instances, an individual will go through some kind of small business program — they are given some tools, but not always the ‘light at the end of the tunnel’ of financing,” said Al Lerma, program manager at the EDB and former manager of the Small Business Loan Fund in San Francisco.
Lenders and economic development organizations alike acknowledge the outsize role that microbusinesses play in the broader economy. Yet those ventures, which the EDB approximates as five employees or less, also present a higher risk profile and smaller return for lenders compared to larger or more established businesses.
Non-depository lenders — generally nonprofits focused on supporting entrepreneurship in economically distressed communities — have been among the most active in seeking to fill that vacuum, with loans that frequently include a significant requirement for business education. The EDB had also considered launching its own loan fund, but ultimately found partnerships in microbusiness lenders that have already grown their push in the North Bay.
Among those partners is San Francisco-based Working Solutions, which now operates an office in San Rafael’s Renaissance Entrepreneurship Center. Yet the effort could produce referrals to others as well, including Oakland-based Bay Area Small Business Finance, Santa-Rosa’s SAFE-BIDCO and a recently announced program between Community Action Partnership Sonoma and Redwood Credit Union, Mr. Lerma said.
The effort is expected to dovetail with existing programs at the EDB, which include free access to extensive market data for Sonoma County and advising for launching or relocating a business. The organization’s roomier new headquarters at 141 Stony Circle in Santa Rosa will be able to better accommodate workshops related to the program, and the EDB has begun its outreach to regional chambers of commerce and Hispanic business groups to generate interest as offerings accelerate in the coming months, Mr. Lerma said.
While the EDB has already helped microbusiness owners to obtain financing on a case-by-case basis, its larger-scale targeted program could launch as soon as November or December, he said.
Improving loan quality has helped Santa Rosa’s Exchange Bank to realize a profit of $11.43 million for the first nine months of 2013 — up 27 percent compared to the same period last year, the bank announced.
The bank had an after-tax profit of $4.41 million for the three-month period ended Sept. 30, up from $3.21 million in the third quarter of 2012. Deposits have increased by $114 million, to $1.53 billion, and loans have risen by $37 million, to $1.05 billion.
“We’re very steady in our progress. We have very strong liquidity and improved asset quality,” said William Schrader, president and CEO.
Exchange Bank had $1.73 billion in total assets at the end of the quarter, up from $1.63 billion as of Sept. 30 last year. The bank earned $6.23 per diluted share for the first nine months of the year, an increase from $4.22 last year.
The U.S. Department of the Treasury last July sold the $45 million in special shares that it purchased of Exchange Bank through the Troubled Asset Relief Program, freeing the bank to restore its shareholder dividend. Exchange Bank purchased $30 million of those shares at the time, and plans to purchase an additional $6 million from investors before the end of the year, Mr. Schrader said.
Exchange Bank paid a quarterly cash dividend of 30 cents per share to its common shareholders on Sept. 20. The bank had increased its dividend by 20 percent in August, and those quarterly payments now provide around $262,294 to the trust funding the Doyle Scholarship at Santa Rosa Junior College.
Bank of Marin Bancorp, parent company of Bank of Marin, announced a 25 percent increase in third-quarter earnings compared to the same three-month period in 2012.
The Novato-based institution announced $4 million in net income for the quarter, and that it would increase its quarterly shareholder dividend from the prior quarter by 1 cent. The bank will pay 19 cents on Nov. 8 to shareholders of record as of Nov. 1.
The acquisition of East Bay-based Bank of Alameda’s parent company, NorCal Community Bancorp, could be completed by the end of November, said Russell Colombo, president and CEO.
Deposits reached $1.3 billion for the quarter, with 41.6 percent of those deposits being non-interest bearing. Bank of Marin had $1.4 billion in net assets as of Sept. 30.
The bank earned 72 cents per share for the quarter, compared to 55 cents in the prior quarter and 59 cents one year ago.
Amid the activity surrounding the acquisition, Bank of Marin has also launched a new mobile banking platform spearheaded under its newly appointed chief information officer, Jim Burke. The bank selected a scalable platform by FIS, its existing processor of financial data, which provides services like remote check deposit to both commercial and retail customers, Mr. Colombo said.
While currently available, the bank plans to make a bigger push in the coming months to market the new platform, he said.
After a profitable third quarter including growth in its loan portfolio, Bank of Napa N.A. has exceeded $150 million in assets for the first time in its seven-year history.
Total assets were $157.8 million at the end of the three-month period ended Sept. 30, an increase of 17.4 percent from the same period last year, according to the bank’s quarterly financial announcement.
“The financial performance of the bank has been very steady over the years,” said Tom LeMasters, president and CEO. “With a young bank like ours, we expect to be breaking some sort of record every quarter.”
The Napa-based bank saw net income rise 5 percent for the first nine months of the year compared to 2012, with $1.5 million in income for the period. Deposits increased by $22 million between the two quarters, now at $135.9 million.
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