America’s best bank: Amerasia

Thanks to Will for passing this along.

SUBWAY line 7 begins near Morgan Stanley’s headquarters on Broadway, pauses in Grand Central Station near JPMorgan Chase’s headquarters on Park Avenue, and then, a long snooze later, ends in Flushing, in the New York borough of Queens. Here, there are no suits, no yellow cabs, and more chatter in Korean, Mandarin, Cantonese and Hindi than English. There is also a remarkably successful bank, a small 24-year-old institution named Amerasia.

Amerasia’s return on its $290m in assets approached 2% in the first half of 2012, a number that would be excellent even if times were good. SNL Financial, a research firm, rates it the best among America’s 4,300 small banks. Amerasia shames large ones as well. JPMorgan Chase, often said to be the country’s best-run financial institution, struggles to make a 1% return on its $1.8 trillion asset base; Morgan Stanley’s return is less than half as much as that. Over the past three years Amerasia, which is privately held, has notched up annual growth of close to 11% in assets, and seen compounded earnings growth of 50%. James Huang, the bank’s boss, believes the disarray in finance will enable his bank to keep expanding fast for another year or two.

Operating in a tough environment is nothing new for Mr Huang. He founded the bank along with fellow Taiwanese immigrants in 1988 after three years scraping together the $5.5m in minimum capital then required. To survive, Mr Huang maintained his day job with the Manhattan office of a Taipei-based plastics importer. On his long commute between the two jobs, he saved money by reading newspapers extracted from the subway dustbins. New York was in one of its periodic slumps, after the stockmarket crash in 1987; in its first months of operations, the bank had a small loss (there has been none since).