Originally created 07/04/99

Ethnicity pays off for banks



ATLANTA -- A sudden spurt of Georgia banks chartered by immigrants to the United States and targeted toward ethnic customers is showing the American dream of riches and security includes newcomers.

Banks chartered by immigrants or first-generation Americans include Quantum National in Suwanee, sponsored by natives of India; First Continental, being organized by Koreans in Atlanta; Global Commerce in Doraville, run by Chinese; and United Americas in Atlanta, launched by Hispanics.

The first Georgia bank chartered for immigrants, The Summit National Bank, began in 1988 with $11 million in assets. Today, it has blossomed into a $250-million institution that recently bought a California bank catering to Latinos.

With tellers and officers fluent in Chinese, Vietnamese, Spanish, German and Korean, Summit never limited itself to the immigrants of a single ethnic group or country of origin.

Chairman David Yu, who has been active in Atlanta's Chinese community for 25 years, recruited initial Investors with birthplaces as far apart as Germany and South Africa.

They brought to the bank their contacts in various segments of Georgia's immigrant communities as well as financial connections in their countries back home.

The overseas relationships have been important to facilitate commercial trade between immigrant business owners here and their home countries.

Those ties also help customers transfer money to family members they left behind, a popular service with immigrants.

Immigrants are both a tough market and a loyal one.

"They are more entrepreneurs, enterprising, so they like to own their own business, and they are good savers," Mr. Yu observes.

But immigrants often have a strained view of banking. Many come from countries where banks were less stable and less reliable than those in the United States, so skepticism was a healthy protection.

Their experience with some American banks left many feeling unwelcome when institutions refused to extend credit or even open checking accounts to noncitizens.

"A lot of those customers, they have nowhere to go for credit or other banking purposes," Mr. Yu notes.

"We feel they like the way that we respond, and we know the culture, and we have the language advantage," said Kuoliang Joe Huang, president of 4-year-old Global Commerce Bank. "When they immigrate here, it is so easy to get information from their community ... The oldcomers are going to teach the newcomers."

The relaxed operations of a smaller bank also appeal to other customers, said Mr. Huang.

Because there is no critical mass of Asians in Georgia, non-Asian customers are vital to keeping up profits and strength needed to pre-empt larger out-of-state immigrant banks from coming into the state, he said.

The number of immigrant banks in Georgia surprises even regulators.

One reason may be that Federal Deposit Insurance Corp. regulations, for instance, don't require bank directors or organizers to report their nationality.

Bank records must be kept in English, as are all communications with government examiners, regardless of where the directors were born.

Another reason is that the federal Community Reinvestment Act requires banks to play an active role in their entire community's economic development, not just one ethnic group.

"We would look for a diversification of the balance sheet, just as we would other banks," said David Sorrell, deputy commissioner of the Georgia Banking Commission. And, he adds, diversification spreads financial risks for a more secure bottom line.

"If we didn't get out of the immigrant market, we wouldn't be as big," said Mr. Yu, who estimates half of Summit's business is with native-born Americans. "But the immigrant market provides us with a stable earnings base that we have been able to grow on."

Georgia's immigrant population is expanding rapidly. During the 1990s, Census Bureau figures show Georgia has had the fifth-fastest growth in Hispanic population, increasing 95 percent over that period compared to 19 percent for the state's population as a whole.

Hispanic annual buying power in Georgia has grown an estimated 170 percent to $3.7 billion, according to the Selig Center for Economic Growth at the University of Georgia.

"The impact of the Hispanic community in this region economically is tremendous," said Gov. Roy Barnes this week when he announced a voter-registration campaign aimed at Latinos. "There are over 10,000 Hispanic businesses in the Atlanta region alone, and some of them are very large."

The Selig Center figures Asian-American buying power in the state isn't far behind. It has soared 179 percent to $3 billion since 1990.

Internet banking, automated teller machines and interstate highways mean immigrant banks based in Atlanta draw customers from smaller communities of immigrants across the state in places like Augusta, Savannah and Gainesville.

They're community banks in the truest sense of the term, according to Julian Hester, president of the Community Bankers Association of Georgia.

He compared them to the handful of black-owned banks in the state that define the community they serve in terms of what their customers have in common rather than where they live.

"All community banks are generally targeted to a community that they serve, but they are not aligned along language lines," Mr. Hester said. "This is a trend that each of the communities wants to have their own banks that speak their own language and facilitate trade with their home countries."

Walter Jones is based in Atlanta and can be reached at (404) 589-8424 or mnews@mindspring.com.