Part 2 of Northwest Asian Weekly’s local banks coverage
By Ryan Pangilinan
Northwest Asian Weekly
As the world recovers from the global economic crisis, many people have looked to banks and financial service centers as the source for blame, questions, and answers. Along with the public unease, many banks have come under fire from the Federal Deposit Insurance Corporation (FDIC). It released a list of financial institutions that were under investigation.
Seattle-based Washington First International Bank (WFIB) was one of numerous banks that were named.
“Right now, more than 30 percent of banks in Washington state are on that list,” explained Elizabeth Huang, the president and CEO of WFIB. “When you’re on that list, they have that standard, boiler plate-type of language criticizing you, like you have bad management and so on. But that’s [the] standard language they use.”
The report provided by the governing agency of financial institutions states that WFIB was consistently one of the best performing banks up until the third quarter of 2008, when the economic crisis began to spread.
Unmentioned in the report is the fact that WFIB is a community bank and for many Asian and Pacific Islander (API) immigrants, it’s been a place where they can realize their dreams of owning a home in the United States.
“[We are] recognized as the premiere bank for new Asian immigrants and investors,” Huang said.
Like many other banks, Huang has found that the minor pitfalls of Washington First are tied to the construction and real estate industry.
“Most Chinese American banks focus on real estate lending. During this economic downturn, banks with real estate concentration (like WFIB) get hurt the most,” she said. “It is because of the high foreclosure rates, lack of buying, and lack of financing available.”
Unlike its large-scale counterparts, such as Bank of America, Washington First only has four locations in Western Washington and its clientele is made up of mostly Asian Americans, thus giving WFIB a unique niche. This makes both the economic downturn and the FDIC list hurtful for the small bank.
Currently, WFIB has stopped construction and land development, but they continue to help people with smaller loans “We’ve had no loss in house loans,” said Huang.
Despite these factors, however, Huang is positive that WFIB will rebound quickly. In regards to their dealings with the FDIC list, WFIB completed a management assessment report, complying with the group’s request.
Huang and WFIB are now looking to the future to get the company back on track as being on one of the top-performing community banks in the Seattle area.
“Our liquidity is strong,” Huang said. “WFIB continues to make loans to its long-term clients, while most banks have stopped making loans.”
Another opportunity that long-term customers can look forward to is the stocks that Washington First is offering until March 10.
“This is the first time in our bank’s 19 [year] history [that we are offering] an opportunity for new investors to acquire our bank stock through issuing additional shares,” Huang said. At $15 a share, the additional capital raised, alongside $13 million recently raised by current shareholders, will allow WFIB to dispose of the problem assets. The bank’s overall goal is to gain another $10 to $30 million. Its assets total $600 million.
“I feel very lucky,” said Huang. “We have very supportive shareholders.” She is also encouraging people to apply for accounts at the bank to help continued growth.
“We would like to grow our core customers,” explained Huang. “We are not a retail bank. We are just not here for everybody. … Our core customers are Asian [communities] and foreign companies [that have] operations here.” ♦
Ryan Pangilinan can be reached at email@example.com.