Nimble, Innovative, Hungry: The New Breed of Disruptive Banks
June 18, 2015 11:23 AM
A recent report from Keefe, Bruyette & Woods identified several "challenger banks" that are poised to take market share from the industry's biggest institutions by using niche-focused business models . Here is a sample of the banks singled out by KBW's analysts.
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BofI Holding, San Diego
A branchless banking model has helped BofI post an amazing 34% efficiency ratio. The $5.5 billion-asset company, led by Gregory Garrabrants, has also grown loans organically by 40% over the past two years. A deal to add deposits by buying H&R Block's bank still needs regulatory approval .
Bank of the Ozarks, Little Rock, Ark.
This $8.3 billion-asset company is certainly not constrained to Ozarks Mountain Country following deals that place it in states such as North Carolina and New York . CEO George Gleason also has the company generating loans; the portfolio has grown organically by 37% in the past two years.
East West Bancorp, Pasadena, Calif.
This $30 billion-asset company, led by Dominic Ng, has historically targeted Asian-American clients. East West also has a banking license in China, and has added commercial lines to take advantage of cross-border trade in industries such as entertainment and agriculture.
Image: Bloomberg News
BankUnited, Miami Lakes, Fla.
BankUnited has bulked up its lending operations in the last two years, increasing the size of its loan book 47%, to $13 billion. The $20 billion-asset bank, led by John Kanas, has added staff in New York, and recently bought the small business finance operations of CertusBank in Greenville, S.C.
Image: Bloomberg News
Opus Bank, Irvine, Calif.
Opus has quickly made a name for itself in Southern California since Stephen Gordon and other investors established the bank in 2010. The $5.5 billion-asset company focuses on specialty finance and poaching lenders from bigger rivals .
Umpqua Holdings, Portland, Ore.
Ray Davis, Umpqua's chief executive, has doubled the company's assets in the past year, due to its April 2014 acquisition of Sterling Financial in Spokane, Wash. The $23 billion-asset bank, which sponsors on-site yoga classes and book readings, offers a model of how to preserve a distinct company culture amid rapid growth.
Signature Bancorp, New York
Like Opus, the $29 billion-asset Signature Bancorp takes great pride in its ability to lift talent from other institutions . "With our earnings rate, we can continue to grow substantially without having to think about capital," CEO Joseph DePaolo said in a recent interview.
PacWest Bancorp, Los Angeles
Talk about being a bold acquirer. Matthew Wagner has overseen PacWest's April 2014 acquisition of CapitalSource, a commercial finance company, and an agreement to buy tech lender Square One Financial . Those deals are designed to help the $16.6 billion-asset PacWest expand niche lending with a broader geographic reach.
Eagle Bancorp, Bethesda, Md.
Eagle has grown by tapping into the booming real estate market in the nation's capital. The $5.5 billion-asset bank, led by Ronald Paul, also bought Virginia Heritage Bank in November, further expanding its presence in Northern Virginia.
EverBank in Jacksonville, Fla.
EverBank's technology-focused model is a differentiator. Led by Robert Clements, the $23 billion-asset company focuses on jumbo mortgages, but also has a sizeable specialty finance portfolio .
First Republic Bank, San Francisco
Barring intervention from Washington, the $51 billion-asset company is on track to become a systemically important financial institution in the not-so-distant future. CEO James Herbert has been successful running a bank known for attracting a loyal, and affluent, customer base .
