Industry Observers Consider 1st Enterprise Bank One of the Fastest Growing de Novo Banks in Recent History
Friday August 31, 3:16 pm ET
Strong First Year Growth Attributed to Experienced Leadership Team, Loyal Customers and Engaged Board Members
LOS ANGELES, CA--(MARKET WIRE)--Aug 31, 2007 -- In the highly competitive field of business banking, 1st Enterprise Bank (OTC BB:FENB.OB - News) (www.1stenterprisebank.com) is emerging as a frontrunner. Its first annual report, released in early April, reported total assets of more than $114 million after its first six months of operations -- a number that exceeded the Bank's own expectations. "1st Enterprise Bank is one of the fastest growing de novo banks in the history of California community banking," said Edward Carpenter, chairman of Carpenter & Company, one of California's most respected investment banks specializing in California banking.
The bank reported total assets at June 30, 2007 of $151 million, including $125 million of "core" deposits from its business and personal customers. In fact, 1st Enterprise Bank is the most successful bank in terms of growth of the 23 banks opened in California during 2006 per March 31, 2007 FDIC Call Report data.
Founded in 2006, 1st Enterprise Bank serves entrepreneurial businesses, professional service firms, non-profit organizations, and their owners, with a full range of credit, depository and cash management services.
1st Enterprise's initial stock offering in 2006 raised almost $50 million from approximately 400 local investors, business owners and professionals, a number that exceeded their maximum capitalization target of $27.5 million. As a result of this oversubscription, the Bank had to return funds to some of those initial investors. Many of the Bank's investors, including its board of directors and 75 "Founders," have become the Bank's initial customers over the past 12 months.
Jim Jones, Executive Vice President of Carpenter & Company, pointed to both the management team and the board of directors as key elements that have set 1st Enterprise Bank apart from other "business niche" banks in the region. "The board has a ton of banking experience," he said. "[CEO] John [Black] and [President] Brian [Horton] chose board members that have experience in starting banks in this area, and they have board members with exceptional clout in both the banking and local business communities." The inclusion of Jeff McGraa as Executive Vice President and Chief Credit Officer was another key factor, he says. "Jeff has been a senior or chief credit officer for 30 years in the local market."
Jones sees the combination of the board and management as a source of the Bank's impressive start and continuing promise. "A young CEO plus a strong board with banking and business experience and some 'gray hair' is a formula for success. Not every bank is like this; 1st Enterprise is expected to outperform the market. It has the potential to be very successful."
"We made a strategic decision to not just have former bankers and high profile 'names' on our board, but to have highly experienced private business owners who have their own spheres of influence in Los Angeles and Orange Counties," Black recently told the Los Angeles Business Journal. The 12-member board now includes five current (Black and Horton) or former bankers and seven business owners and professionals from both counties. Most recently, the Bank added its twelfth board member, Robert J. Kushner, partner in the CPA firm Kushner, Smith, Joanou & Gregson, LLP (KSJG), located in Irvine. "The size, diversity and experience of our board is a tremendous advantage in the important areas of corporate governance and regulatory compliance," Black recently stated.
It was the other board members, combined with his long association with senior management that ultimately convinced David Holman to take on the role of chairman. Holman brings more than 35 years of commercial banking experience to the board, including a stint as chairman of the board and interim chief executive officer of California Financial Bancorp, along with various senior leadership positions at the former First Interstate Bank. Mr. Holman left his position as Executive Vice President in charge of all banking activities in Southern California and member of First Interstate's executive management committee when that bank was acquired by Wells Fargo in 1997. He joined the 1st Enterprise Bank board and group of executives in 2005, a group that the Los Angeles Business Journal recently called "a heavyweight management team," including Black, Horton, and McGraa.
The Bank's committed and enthusiastic customers are another reason for its exceptional first year performance. Many of 1st Enterprise Bank's largest depositors and borrowers say they have been searching for exactly the kind of personal relationship with a banker that 1st Enterprise provides, and, since their arrival, they have become enthusiastic evangelists for the Bank's approach to business banking and overall business philosophy.
"They are excellent about learning our business," said Doug Taylor of Del Mar Industries. "I asked John Black to be on the finance committee [of Del Mar] because I respect his advice and counsel."
Larry Franklin of Franklin Truck Parts appreciates the personal approach as well. "They're out and about. They come by and see me. They ask what's happening and they review how things are going," he said. "We know these people. They're always prepared. I don't have to go through a bunch of people who aren't informed and interested in our business to get to who I ultimately need to talk to."
"We had one meeting in their office, and they caught our enthusiasm. Every point of contact with 1st Enterprise has been professional, courteous, and empowered, which is a reflection of our own core values," said Tom Capalbo of Taylor Freezers of Southern California.
Jason Twomey of Truck Parts, Inc. offered an example of the personal and rare relationship that 1st Enterprise exemplifies. "Just today, we were in their office in downtown Los Angeles signing the final papers for a loan," he said in a recent interview from his offices in Los Alamitos. "We got a good loan -- it was a good deal. And as we were signing the papers, the president of the Bank, the CEO and others, some we'd never met before, kept coming into the office to thank us for our business. On the way home, I thought, 'we should be thanking them'... but that's just their culture. That's the way they are. It's exactly like our business. We're small. We compete with much bigger companies, but we're service oriented. We can deliver the service. And that's what 1st Enterprise Bank does. They're dedicated to building their bank for the long term, and we plan on staying with them for a long time."
Black is well aware of the importance of the Bank's culture in attracting and keeping customers. "Every bank in America is talking about 'relationships' these days," he said recently. "But at 1st Enterprise Bank, we define that word in a different way. We're not just business bankers; we take your business personally. We work hard to be a sounding board. We learn about our customers' industries; we draw on the combined experience of our entire organization to give them the information and support they need. And we do it all locally, in direct contact with the customers." Black was previously division president at Mellon 1st Business Bank. Many of his former colleagues from Mellon followed him to the new venture.
Horton, also a former division president from Mellon, has more than 20 years of experience in Southern California mid-size business banking, most of which was spent in Orange County. He is well aware of what the customers want most. "They want to deal with highly experienced bankers who comprehend their business, who anticipate their needs, who have creativity and flexibility. They don't want to deal with junior-level account officers. Every customer has an individual, personal story, and they want to tell that story to the decision-makers who can say 'yes' or 'no' -- experienced bankers who can be of value, who can offer insight and advice." Horton's experience includes 17 years at the former 1st Business Bank (Mellon). He began his career in the Corporate Banking Group at First Interstate Bank in 1983.
Horton, along with David Plourde, Regional Vice President, and Matt West, Senior Vice President, and other experienced staff members, will be opening the Bank's first full service regional office in Irvine in September of this year.
Headquartered in second floor offices on Seventh Street in downtown Los Angeles, the Bank has made a point of reaching out to all its customers, in person as well as electronically. "We go to our customers," said Holman. "They don't come to us. We have couriers for deposit pick-ups that operate every day. Everyone, including our top management executives, makes personal 'house calls' on a regular basis. We've also developed one of the most useful, flexible, and reliable online banking systems in the industry. We get compliments on it all the time, and we're committed to keeping it updated and state of the art." The Bank is also in the process of rolling out "remote deposit service," which will allow customers to send deposits to the Bank electronically from virtually anywhere, and on their own time schedule.
As for the future of 1st Enterprise Bank, "We intend to constantly invest in our people and to look for the most qualified candidates to join our already highly experienced staff," Black said. "And we have every intention of staying on top of new services and technologies to better serve our customers and help their operations run more smoothly and efficiently. Over the longer term, and as qualified and experienced bankers become available, we will look to expand our geographic footprint into other key commercial regions of Southern California."
About 1st Enterprise Bank
Founded in 2006, 1st Enterprise Bank is a full-service commercial banking institution, whose highly experienced bankers personally serve Southern California entrepreneurial businesses, professional firms and nonprofit organizations, along with their owners and key managers. Headquartered in the Los Angeles financial district, with full-service regional banking offices in Irvine and Ontario, 1st Enterprise Bank offers a full range of credit and depository services, with special emphasis on superior customer service, sophisticated cash management services and direct access to bank decision makers. Customers work directly with a dedicated Relationship Manager, a seasoned professional who understands their unique challenges serving as a sounding board and an active participant in their client's success. For more information on 1st Enterprise Bank, please visit www.1stenterprisebank.com.
This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about 1st Enterprise Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: 1st Enterprise Bank's timely implementation of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in 1st Enterprise Bank's reports and filings with banking regulatory agencies. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and 1st Enterprise Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
K. Brian Horton
John C. Black