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Regents Keeps Its Name as It Becomes Division of Grandpoint

When Regents Bank was acquired by Grandpoint Capital last year its executives maintained that it would retain its local control and customers would see little change.

However, this month Regents as a separate subsidiary bank ceases to exist, as its operations are folded into Grandpoint Bank in Los Angeles. While it retains its name, it’s essentially now a division of Grandpoint, without its own board of directors. It no longer has to report separate financial results.

Last month, Regents received approval from the state’s Department of Financial Institutions to merge itself into Grandpoint Bank. Once the bank’s $600 million in assets are combined with Grandpoint, that bank’s total assets will be about $1.8 billion.

Regents CEO Steve Sefton said the organizational changes won’t change things that much.

“We’ll continue to make local decisions just as we did a year ago, and we’re also making bigger local decisions,” said Sefton, who took over the top job in January. Because it’s part of much larger lender, Regents’ maximum loan limit is much greater than had it been a $600 million lender. Because it’s part of Grandpoint, it can do loans of greater than $20 million, although most loans fall within a range of $1 million to $10 million, Sefton said.

Sefton said operating separate subsidiary banks was too expensive, and the cost savings involved with consolidating operations such as the back-office systems and wire rooms was “too compelling not to do.”

Before its most recent transition merging into Grandpoint Bank, Regents assimilated Escondido-based California Community Bank in November. Because of that transaction, Regents and CCB had a host of duplicative executive positions, including two CEOs, two chief financial officers and two chief operating officers; the combined headcount was 105 employees.

In July, the staff was reduced to 87 following the closure of three Regents branches and job reductions. Once the consolidation with Grandpoint is finished this year, Regents said it will have a total staff of 70 people at its five branches, Sefton said.

Earlier this summer, Grandpoint Bank also merged another subsidiary bank, the Bank of Tucson, into Grandpoint. The Arizona bank had two offices and about $300 million in assets.

Rich with capital resources, Grandpoint Capital continues acquiring banks. Since its launch in 2010, it bought nine banks. In July, it announced the purchase of Gilmore Bank, based in Los Angeles with two offices and about $177 million in assets. Grandpoint said Gilmore will be merged into it in a transaction that should be completed by the end of September. When that occurs, Grandpoint Capital will have total assets of about $2.4 billion.

• • •

Yates resigns from Grandpoint: Dan Yates, Regents former CEO who was promoted to president of Grandpoint Capital after arranging the sale of Regents, resigned as president of Grandpoint Bank in June. Yates said he was named president of Grandpoint Bank at the end of 2012.

Asked for his reason for leaving, Yates initially said it was for “personal reasons” and later said he wasn’t able to discuss the situation due to a nondisclosure contract he signed.

Don Griffith, Grandpoint Capital’s chairman as well as the chairman and CEO of Grandpoint Bank, assumed Yates’ title of president.

• • •

New acting SBA Administrator named: The U.S. Small Business Administration announced that Jeanne Hulit was named acting SBA administrator following the departure of Karen Mills in August. Hulit was previously the SBA’s associate administrator and head of its office of capital access.

Mills announced her resignation in January and said she would leave when a replacement was found, but when a replacement wasn’t named, she decided to leave anyway to take a position at Harvard University’s School of Business.

In a letter quoting Mills reported in the Washington Post, she said that Hulit “led the charge to streamline and simplify [the] SBA’s loan programs and expand access to our lending programs.”

The SBA will be in good hands under Hulit’s leadership, Mills said.

Send any news about locally based financial institutions to Mike Allen via email at mallen@sdbj.com. He can be reached at 858-277-6359.

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