Showing posts with label FRB. Show all posts
Showing posts with label FRB. Show all posts

Thursday, July 26, 2018

Asian Banks....again...

We have been tracking Asian Banks for some time. See: Bullish on Asian Banks Originally posted on the Street Insight section of thestreet.com 2/28/2006 4:35 PM EST and Still Bullish on Asian Banks

Recently, there has been renewed interest in this sector. We commented for an article by S&P analysts Kelsey Bartlett and Carolyn Duren posted Monday, 02 July 2018 11:52 AM ET, some of which is reproduced below:

Deals are heating up among Asian-American designated banks, with two of the nation’s prominent institutions announcing deals since April.

In its second deal since 2013, Hanmi Financial Corp. is acquiring Houston-based SWNB Bancorp Inc. Meanwhile, RBB Bancorp is making a play for Brooklyn, N.Y.-based First American International Corp. — its third deal since 2013. The two Los Angeles-based banks remain interested in diving into new markets with high populations of Asian Americans, management said.

Hanmi expects the combined entity to have $5.7 billion in total assets, while RBB anticipates it will have $2.6 billion in total assets after closing.


On a May 21 call to discuss the deal, Hanmi President and CEO C.G. Kum said the transaction advances the bank's long-term objective of expanding its existing footprint outside of Southern California. The bank will continue to search for "strategic entry points" in attractive markets, he said.
RBB Bancorp President and CEO Alan Thian shared similar sentiments, and said on an April 23 call its First American International acquisition will provide "improved scale, efficiencies and profitability."

(We noted some time ago that Asian-American banks merge with other Asian-American banks).


In 2014, Kum told S&P Global Market Intelligence that Hanmi, a traditionally Korean bank, hoped to diversify its customer base to include more Chinese-Americans, south Asians and customers without any Asian background. Kum will retire in 2019, but Tenner does not expect his departure to vastly change the bank's business model.

William Michael Cunningham, an economist, impact-investing specialist, and an adjunct faculty member at Georgetown University, said Asian-American banks could grow by expanding their footprints in the broader American market, but doing so could "potentially" cause a bank to lose its status with the Federal Deposit Insurance Corp. as a minority depository institution, or MDI, he said.

"You've got to be a big bank these days in order to survive," Cunningham said in an interview. "... But it is something you have to think about, and you have to plan in order to be successful at." 

In an emailed statement, an FDIC spokesman said whether a bank loses its designation "all depends on the ultimate structure" of the resulting merger.

One of the goals of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 is to preserve minority character in cases of merger or acquisition. The FDIC provides technical assistance, training and educational assistance to the banks. The number of banks and thrifts with an MDI designation has dwindled in recent years.


More than 51% of an MDI's voting stock must be owned by one or more "socially and economically disadvantaged individuals," or the majority of the board and the community the institution serves must be predominantly minority, according to FDIC's definition.

Cunningham said there is a "varying degree of value" to being an MDI, noting that regulators have at times tended to "over-help minority banks."

"They're kind of all up in their business," he said. "That reduces management's flexibility. It's a regulatory burden that other banks don't have."

Cunningham also pointed to financial technology and large banks as challenges for MDIs, noting banks like Wells Fargo & Co. are free to conduct business in other languages.

"The big banks have sharpened their skills in the marketplace that MDIs frequent," he added. "That's one of the additional competitive pressures that these institutions face."

Wednesday, April 4, 2012

Minority Business Contracting at the Fed

The BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM released its Report to the Congress on the Office of Minority and Women Inclusion. March 2012.

We note that "During 2011, the Board’s procurement contracts for goods and services totaled $125,070,569. Of this total, $15,414,147, or 12.3 percent, was awarded to minority-owned or women-owned businesses.

Specific awards by contractor classification are as follows
• minority-owned businesses (excludes women owned businesses) = $9,028,526 (7.2 percent of total);
• women-owned businesses (excludes minority women) = $4,237,038 (3.4 percent of total); and
• minority women-owned businesses = $2,148,583 (1.7 percent of total)."

http://federalreserve.gov/publications/other-reports/files/omwi-report-20120402.pdf

Sunday, July 17, 2011

Why Does the Fed Have So Little Supplier Diversity?

Interview on DiversityInc.com website by Barbara Frankel on Jul 12, 2011 concerning our FOIA request:

We submitted a FOIA to the Fed, a Freedom of Information Act request, a formal request of a federal government agency for information. We asked for information on "minority" business contracting. How much money did the Fed spend with women firms (WBEs), minority firms (MBEs) and others? We were really looking for information on their spending patterns or their support of minority-owned banks. We were basically trying to (expand and) complete the data set concerning their support for foreign banks, foreign corporations, domestic corporations..related to the financial crisis.

What we found was that the Fed has not spent a lot of money with women- and minority-owned firms. In response to our Freedom of Information Act request, the Federal Reserve Board provided data on contract awards for the year 2010, broken out by ethnic and by gender designations. We found that, for example, in 2010, the Fed only spent 1.73 percent of their contracting dollars with minority-owned firms and 6.31 percent with women-owned firms. The total amount of money spent was reported to be $113,109,000. This only covers the Board of Governors in Washington, D.C. This does not cover the entire Federal Reserve System.

We are trying to determine how much support was given to minority firms. We sought to compare that to the level of support provided to Goldman Sachs, Merrill Lynch and other financial institutions and corporations as a result of the financial crisis.

http://diversityinc.com/article/8456/Why-Does-the-Fed-Have-So-Little-Supplier-Diversity/