HispanicBusiness

They point to the growth in Hispanic-owned businesses, not only in numbers but in size, the types of businesses being opened, such as medical centers and high-tech firms, and the level of acculturation among Hispanic entrepreneurs.

"In the Latino community, banking and opening banks is a fairly new phenomenon," Mr. Pla says. "We haven't been exposed to the process of opening a bank. The lay person would think it takes $100 million to open a bank but it doesn't – we raised $12 million."

Santa Ana Business Bank is slated to open this month with startup capital drawn from 400 shareholders. Nearly 80 percent of the bank's backers are both Hispanic and very successful business owners such as Mr. Pla, who in 1983 started Cordoba Corp., a civil engineering and construction management firm that ranks No. 168 on the Hispanic Business 500 list.

"The response has been overwhelming. We could've raised more but the minimum opened the doors," Mr. Pla explains. "It's a great time to open a new bank because the need is so great and you can't ignore it."

All three Southern California banks tout themselves as being built by and for Hispanics, which they say gives them a competitive edge over the bigger and more established financial institutions.

Understanding the needs, the culture, and, in some cases, their customers' Hispanic consumers, allows these homegrown banks to provide the type of personal service bigger banks often lack.

"As corny as it sounds, it really is about personal service," Mr. Pla says.

Each bank offers financing through the U.S. Small Business Administration programs and revolving credit lines. But it is personal service, not products, that is setting them apart from competitors.

Many of the three banks' organizers and investors have deep roots in Southern California's banking and business communities.

Among Santa Ana Business bank's board members is a local councilman and chamber president. Promerica Bank's lead organizer is Maria Contreras-Sweet, California's former secretary of Business, Transportation and Housing, while Americas United Bank was started by two of Southern California's leading Hispanic bankers.

"All banks provide capital, it boils down to the management, as well as in our case our founders and shareholders," says Mr. Dalmau, a 25-year banking veteran.

"It's those relationships that really make the difference because all of us banks have similar products and services, and we may say we're commercial banks going after the business market, but, at the end of the day, it's your staff and the relationships."

Americas United Bank, which opened in November 2006, raised $28.8 million in startup capital from 350 shareholders. As of June 30, the bank had $57 million in assets.

The new banks face tough competition from more established national and regional banks for bigger accounts, and the challenge of making money from smaller ones.

There remains room for smaller financial institutions, organizers say.

"No. 1, it's a local bank in a community that's underserved, regardless of ethnicity," Mr. Pla says. "No. 2, Latinos are the fastest-growing market so it simply represents a good business opportunity; this happens to be a niche that should not be ignored."

The banks are targeting the small- to medium-size business owner with annual revenues of $500,000 to $20 million. While there are an estimated 188,470 Hispanic-owned firms in Los Angeles County, the majority of them are very small. About 90 percent of them have no employees.

"If I would have to live off Hispanic banking, I would starve," says Dan Hudson, CEO of Bankmark, a bank-consulting firm that helps start new banks. "It's not a bad comment toward Hispanic [companies], but no bank can live off a single product line."

In addition, many of the big banks have begun to aggressively pursue Hispanics, including small-business owners, many of whom they count as customers.

"Strict ethnic banks are really hard to make work," Mr. Hudson says. "You really need to be a community bank."

Organizers counter that while their main focus will be Hispanic-owned businesses, they will reach out to other consumers as well. The banks also plan to lean heavily on executives, board members, and shareholders to bring in new business from friends, family, and their own customers.

"That's actually how this pipeline of business will grow for us because we're not only going to generate business from our founders and our shareholders," Mr. Dalmau says. "Even after they've given us some or all of their business, they are then introducing us to their customers, who in many cases are also Hispanic business owners and suppliers. Right now, with the market being the way it is and being very, very competitive, the No. 1 thing is sticking to our business model and using the relationships we have to help us grow."

This business model was one of the key drivers in ramping up business for Miami's U.S. Century Bank.

"We told our shareholders, 'We don't want your investment dollars, we want your commitment,'" says Ramon Rasco, chairman of U.S. Century Bank. "We want you to bring your accounts, refer loans, tell friends and relatives and help us grow the bank."

Still, challenges loom, such as the dearth in top banking talent.

"There just haven't been that many Hispanics that have gotten to that level. The same thing goes for board of directors," Mr. Dalmau says. "Very few Hispanics have served on bank boards, or any boards for that matter."