Dana Niguel Bank N.A. Seeks a State Charter : Finance: The institution would trade in its federal designation to increase its loans to one borrower.

DANA POINT â€”  Attempting to take advantage of less-restrictive state banking laws, Dana Niguel Bank N.A. wants to trade in its national charter for a state charter, and its only remaining obstacle is obtaining shareholder approval.

The bank, which concentrates on making construction loans to home builders, plans to use the state charter mainly to increase the amount it can lend to one borrower by at least 50% and up to 150%, said Charles Goodson, the bank’s senior vice president and cashier.

It also hopes to take advantage of a state law that would let it engage in real estate joint ventures, an activity prohibited by the national charter, he said.

The only roadblock in the conversion process is shareholder approval. In the past, the 7 1/2-year-old bank has had trouble getting enough shareholders to cast their votes on major corporate changes, which require a two-thirds vote of total common shares outstanding. Bank executives are calling those with larger blocks to encourage them to attend the June 20 meeting or send in their proxies, Goodson said.

As a national bank, Dana Niguel can lend about $600,000 to one borrower, and it has to ask other lending institutions to join in making bigger loans. Such loan participations in 1988 meant that about $150,000 in revenue went to co-lenders, Goodson said. Under a state charter, the bank could lend about $1.5 million to one builder.

“We feel we’ve given away significant profits under the national charter,� he added.

With $70.6 million in assets at the end of December and $605,000 in net income last year, Dana Niguel Bank is one of Orange County’s solid performers, according to Gerry Findley, a banking consultant based in Brea. He added that the charter change makes sense.

The bank “wants to take advantage of opportunities, and that’s smart in today’s world,� he said.

The switch to state charter would be the third such conversion of a county-based bank since 1987, when Corporate National Bank in Santa Ana became Corporate Bank. Mariners Bank N.A. became simply Mariners Bank last year. The abbreviation N.A. is for National Assn. Dana Niguel’s conversion would leave 16 of the county’s 38 banks with national charters.

Dana Niguel’s changeover, which was approved by state regulators last December, comes at a time when federal regulators are clamping down on the real estate lending habits of national banks.

L. William Seidman, chairman of the Federal Deposit Insurance Corp., recently identified Orange County as one of the riskier areas for banks to make real estate loans. But his comments were challenged immediately by James E. Gilleran, superintendent of the California Department of State Banking, who saw no reason for undue concern about lending on Orange County or other California real estate.