Mezzanine lender Huntington Capital eyes Nevada market


Huntington Capital is a boutique private equity firm with a successful track record of funding small and midsized businesses in the Southwest, including Nevada.

That’s what originally brought the firm to the attention of Hamilton Lane, manager of the $50 million Silver State Opportunities Fund LLC.

“We actually started here in our first fund with an investment in a company ... through a merger it’s now Protect Plus,” Huntington Capital managing partner Tim Bubnack said in a phone interview.

Bubnack described Huntington Capital as a mezzanine debt investor for companies “stuck with a gap between traditional equity investments and bank financing.” He said the San Diego-based firm “serves an underserved need.”

Hamilton Lane was an investor in Huntington Capital’s Fund II, which was formed in May 2008 and raised $78 million. The fund has invested in 21 companies.

Bubnack said Hamilton Lane made the original investment on behalf of CalPERS, the Sacramento, Calif.-based public pension fund. Hamilton Lane announced June 6 it would invest $5 million from the Silver State Opportunities Fund in Huntington Capital’s Fund III.

“We developed a relationship with Hamilton Lane over the last five years and our investments have performed well,” Bubnack said.

This is the first fund commitment by the Silver State Opportunities Fund, Nevada’s first in-state private equity program. Bubnack, who joined Huntington Capital as a managing partner in 2007, said the firm is raising $125 million for its third fund.

Bubnack said the $5 million investment was a small part of the overall fund, but the firm is committed to working with a program where the capital invested stays in the state.

He said Huntington Capital is evaluating whether to set up its office in Las Vegas or Reno.

“We are already looking at deals,” Bubnack said. “We’ve met with three companies, all out here in the market. We are feeling a lot better today about the economy than we did two or three years ago.”

Huntington Capital looks to invest in companies with revenues between $10 million and $75 million, needing funding between $2 million and $7 million. Bubnack will make a presentation to the Nevada Capital Investment Corp. board at their meeting on Aug. 21.

NEWS & NOTES

SNL Financial, a Charlottesville, Va., research company, has listed two financial institutions with subsidiaries in Southern Nevada among its most recent ranking of the 50 largest banks and thrifts in the United States.

Zions Bancorp, parent of Nevada State Bank, ranked No. 33 for the first quarter, the same spot it held in the fourth quarter of 2012. City National Corp., parent of City National Bank, dropped one spot to 41st place.

Salt Lake City-based Zions reported first-quarter assets of $54.1 billion and $44.4 billion in deposits, while City National posted $27.4 billion in assets and $22.9 billion in deposits.

Otherwise, the list revealed some minor movements. The top seven financial institutions held the same spots in the first quarter as in the fourth quarter of 2012, with JPMorgan Chase & Co. in the No. 1 position.

JPMorgan and Bank of America Corp., which ranked second, remained the only companies with more than $2 trillion in assets, and — along with No. 4 Wells Fargo & Co. — the only companies with more than $1 trillion in deposits.

The largest jumps in the top 50 this quarter included Chicago-based BMO Financial Corp., moving up to No. 19 from No. 21, and Pasadena, Calif.-based East West Bancorp Inc., jumping to No. 48 from No. 50.

BMO Financial’s assets rose to $122.4 billion from $116.1 billion. East West Bancorp’s assets rose to $23.1 billion from $22.5 billion.

East West Bancorp, parent of East West Bank, is on schedule to open its first Las Vegas branch early next year on the corner of Spring Mountain Road and Decatur Boulevard.

Regions Financial Corp. of Birmingham, Ala., had the biggest slide, to No. 22 from No. 20, as its assets fell to $119.7 billion from $121.4 billion.

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Overdraft revenue fell on an annual basis for banks, thrifts and credit unions almost $1 billion, or 2.8 percent, during the first quarter of 2013, a report by economic research firm Moeb Services shows.

Total deposit service charges fell on an annualized basis 2.9 percent, which is the first quarterly fall since the fourth quarter of 2011.

“Overdraft revenue is starting to act like a barometer of the sluggish economy,” said Michael Moebs, economist and president of the Lake Bluff, Ill.-based firm. “With the net pay of Americans suffering a jolt under the Affordable Health Care Act’s provisions of increased taxes starting Jan. 1, the savvy checking account user is fine-tuning their finances and reducing expenses, especially deposit service charges.”

The median national charge for an overdraft was $29 at the end of the first quarter. Total overdraft revenue was $31.1 billion, down from $32 billion in the fourth quarter.

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An SNL Financial report finds credit union mergers nationwide remain more desperate than strategic.

The nation’s credit unions continue to deal with tight net interest margins, low loan demand and amplified regulatory burdens, but consolidation activity is concentrated among the smallest institutions with assets less than $500 million.

The report also shows a steady decline in the number of credit unions consolidating in the industry, with less than 7,000 consolidations in 2012, down from more than 12,000 in 1994.

No Nevada credit unions have been acquired since April 1, according to the report.

The last merger involving a Las Vegas credit union was in July 2011 when Sonepco Federal Credit Union merged with Irwindale, Calif. –based SCE Federal Credit Union.

• • •

Great Basin Federal Credit Union has been received Small Business Administration approval to become one of the agency’s lenders. The SBA lender designation allows the $125 million Reno-based credit union to aid in the start-up or expansion of small businesses.

Great Basin, which serves more than 16,500 members, will assist small businesses needing loans between $50,000 and $500,000.

 

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