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Endeavor Hires Producers to Open Right Doors For New Bank

2007: 223/161

2008: 101/28

2009: 33/0

2010: 6/0

2011: 1/0

2012: 0/0

2013: 4/1

2014: 1/1

2015: 2/1

2016: 8/7

2017: 9/3

2018: 7/0

(as of March 27)

*Applications that are not approved may have been returned, withdrawn or remain pending.

Source: FDIC

Bank Failures

2007: 3

2008: 25

2009: 140

2011: 92

2013: 24

2014: 18

2016: 5

2017: 8

2018: 0

(as of June 6)

Source: FDIC

The ranks of the post-recession crop of aspiring de novo banks are thinning, but the headcount at San Diego’s Endeavor Bank is expanding roughly two years ahead of schedule to accommodate bankers looking to join the new venture, according to its executives.

Endeavor, a business bank, opened in late January after raising nearly $27 million and completing a regulatory approval process that started in August of 2016. It’s one of only a handful of banks nationwide that has been able to raise the tens of millions of dollars required by regulators and open its doors since the banking crisis of 2008.

Prior to Endeavor, the last bank to open in San Diego was Vibra Bank, a community bank in Chula Vista that was later acquired.

Adding to the Team

“From a timing standpoint, we have hired individuals sooner than we anticipated,” Endeavor CEO Dan Yates said. “When (Endeavor President Steve Sefton) and I and others know of other very high-quality bankers that we’ve been in relationships with professionally, maybe even as competitors, when they approach us with an interest to join the team…that’s how you build a great bank over time.”

Yates knows what that’s like. He founded Regents Bank in 2001 and ran it through 2012. And Sefton, who took over the role Yates held at Regents after the bank’s acquisition by Grandpoint Bank in Los Angeles, previously founded and ran Citizens Business Bank’s Inland Empire commercial banking group.

“What (hiring experienced bankers) does is it increases in direct proportion our calling activity and the number of companies we get to meet with and talk to,” Yates said. “As you hire producers, individuals that are rainmakers that have relationships and referral sources in tow, they create a lot of activity and opportunity to help you get in front of the right people.”

Waiting for Financials

The bank, which is publicly traded, can’t talk about its financials for the second quarter of the year until it files the details with regulators, but Yates said, overall, “we’re very pleased.”

Its initial capital raise, which was oversubscribed and topped off higher than the $25 million required by regulators, involved about 450 investors, many of whom represent Endeavor’s target customer: local business owners.

Bolstered by a strong economy and rising house prices, no bank backed by the FDIC failed between mid-2004 and early February 2007.

But from the start of 2008 to the end of 2013, more than 400 banks collapsed. In 2009 alone, two San Diego-banks — the $4 billion asset Imperial Capital Bank in La Jolla and $3.6 billion asset San Diego National Bank — were shuttered.

No new banks opened in 2009, 2010, 2011 or 2012. In the following three years, one new bank received approval from the FDIC to open each year. Seven got the OK in 2016; three in 2017, including Endeavor and Infinity Bank, which was organizing in Orange County.

But of the class approved in 2016, another California hopeful, Newport Beach’s Core Commercial Bank, but was unable to raise the capital it needed, so never debuted.

Blue Gate Bank, also in Orange County, opened in 2017 but this year agreed to sell to a bank holding company. The bank raised $30 million in initial capital and accumulated $130 million in assets, but in April, told the California Department of Business Oversight it intended to merge with Big Poppy Holdings, a Santa Rosa-based company.

But the Blue Gate situation appears relatively unusual among the handful of post-recession de novo banks in that Big Poppy Holdings was already a stakeholder in the bank.

That leaves Endeavor and Infinity as the survivors among the four California-based banks that have been approved to open by the FDIC since the recession.

Endeavor, headquartered in downtown San Diego in Symphony Towers, has added five additional executives to its roster since opening.

New Execs

Bill Perkins joined the bank in January as vice president, relationship manager. He was recently chief financial officer at an education company, but previously was a Wells Fargo business relationship manager for companies based in San Diego.

Dana Stewart, with 14 years of experience including 10 years at Pacific Western Bank, joined in February as digital banking officer.

Three joined in April: Pete DeMaster, most recently at Banner Bank in San Diego, as vice president, relationship manager, and Randy Kohls and John Harelson as senior vice presidents and relationship managers for the bank’s production office in Carlsbad.

DeMaster also previously spent stints at California Bank & Trust and Citizens Business Bank.

Kohls spent 33 years as a banker at San Diego Trust, Union Bank, California Bank & Trust and Silvergate Bank, and Harelson worked for nine years at Torrey Pines Bank, where he opened its Carlsbad office, and previously opened the first offices for Citizens Business Bank in Carmel Valley and First Choice Bank in Carlsbad.

As of March 31, Endeavor had about $30 million in assets. Infinity Bank, which opened at about the same time as Endeavor, reported about $34 million in assets as of the same date.

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