Mission Valley starting new lending unit.

Hoping to step up its lending to small businesses, five-year-old Mission Valley Bank has established a special lending division.

Vladimir Victorio, formerly director of lending for the Valley Economic Development Center, will join the bank next week as senior vice president, manager of the special lending division.

His role will include building the size and scope of the business loans the bank makes, including a focus on lending to the Hispanic community.

"The VEDC provided me with the ability to do more of the tougher transactions in the market," said Victorio. "I'm taking that to the bank. We had a good track record of being able to do tough transactions but keep the losses low."

The division will start out with a dedicated underwriter but it will share the banks other resources. Officials said they expect to expand staffing in line with the direction the business takes.

"We're a young bank and it's a new organization," said Tamara Gurney, president and CEO of the Sun Valley-based bank. "And my philosophy is whatever you want to make of it, you can make of it."

Since it opened in 2001, Mission Valley Bank has grown to assets of $139 million and deposits of $120 million as of Sept. 30, 2005.

The bank broke even after its first nine months of operation and it turned its first profit just short of two years into operation. But its business lending, which currently stands at $102 million, has so far been limited to the smaller state-guaranteed small business loans.

With the addition of Victorio, Mission Valley hopes to move into the larger, federal SBA arena, eventually becoming a preferred SBA lender.

Preferred status allows a bank to approve SBA loans without the six-to eight-week lead time the SBA takes to grant approvals.

Victorio, who ran the VEDC's lending program for about three-and-a-half years, specialized in helping those who don't meet traditional banking criteria to secure loans.

That type of focus is especially beneficial in the Hispanic market, where many businesses operate on a cash basis.

"Conventional loan writing usually does not allow for lending to that market," said Victorio. "You have to have flexibility to lend to that market."

The demographic growth in the Hispanic sector, coupled with the location of Mission Valley Bank in the heart of the Northeast Valley with its high concentration of Latinos, makes the market an especially promising one for the bank.

"Mission Valley, if you look at where they're located, they're in a fairly large Hispanic area, and so it would make a lot of sense," said Jim Hicken, president and CEO of Bank of Santa Clarita. "I think it's a great decision on Tamara's part to do that."

In addition to his lending experience, Victorio also garnered a number of contacts and relationships within the Hispanic community, which bank officials expect will be equally beneficial to the new marketing effort.

Victorio was well known to the bank through his role at the VEDC, which funded loans through Mission Valley, and as bank officials began to think about strategies for growth, they turned to the former business partner.

"We're lending to the Hispanic community already, but we really don't know how to penetrate that market, and the level of trust is already there with him," said Gurney.

So far, the bank's focus has been on meeting the compliance requirements set by regulators and on building returns on assets. Now, with the fundamentals established, the bank is turning from that focus to achieving returns on equity, and to do that, it needs to expand its business base.

By adding a special lending division Gurney hopes to build those returns, but the specific strategy will evolve as the bank proceeds.

Ultimately, Gurney said, the bank could branch out into packaging and reselling loans and partnering with other lending brokers.

"If he captures the SBA market, he may end up hiring an SBA lending specialist," said Gurney. "Or he may have a Hispanic division and hire a person who manages that division. This gives him the opportunity to grow his own business."