Encore Bank Expands Lending Network to 20 Markets in 3 Years | Arkansas Business News

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Three and a half years later, Chris Roberts and his Encore Bank team remain a blur of activity quickly transforming a once sleepy Little Rock bank into a vibrant multi-state lender.

Since 2019, they have moved the former Capital Bank from a tiny dot on the lenders’ radar screen to become one of the 10 largest banks in Arkansas and the 400 largest in the nation.

Total assets grew from $165 million at the end of the first quarter of 2019 to over $2.4 billion as of June 30. The bank experienced greater growth in its first year under the Encore banner than in the previous 20 years as Capital.

Randy Dennis

“It’s all about growth not related to acquisitions,” said Randy Dennis, president and CEO of Little Rock’s DD&F consulting group. “I would be lying if I didn’t say it was extraordinary, because it is.”

The seasoned banking consultant considers Capital-Encore’s fiscal transformation to the seventh-largest bank in Arkansas by assets and No. 380 nationally a historic achievement. And in a nod of self-acknowledgment, Encore boasts of being the fastest organically growing bank in the country, a claim that has gone unchallenged.

“They’re very ambitious,” Dennis said. ” There is no doubt. There are many people who believe in them and are willing to invest a lot of capital with them.

Roberts, chairman and chief executive of Encore and its eponymous holding company, is leading a third round of stock sales to broaden the capital base and maintain the bank’s trajectory.

Encore Bancshares launched the private placement offering in May to raise $130 million. The current effort follows share offerings of $50 million in 2019 and $90 million in 2021. Total shares issued: over 1.1 million.

“We are calling on our small army of investors to help us bring in business,” Roberts said in an April 2019 interview with Arkansas Affairs. “Our model is to leverage our shareholders and our team’s contacts to grow the bank.”

Roberts and Burt Hicks, president of Encore, did not respond to a request for an interview.

The booming boutique bank continues to increase its loan production while expanding its franchise and generating rising and falling quarterly profits.

Total loans of $263 million in 2019 more than doubled to $537 million in 2020 before climbing to over $1 billion in 2021. As of June 30, the number was around $2 billion. .

A loss of $6.6 million in 2019 turned into a profit of $3.7 million in a COVID-tainted 2020. Encore ended 2021 with a total net income of $585,000. In the first six months of 2022, the bank lost $2.1 million.

Capital raising

When the Encore team entered the scene at Capital Bank in the first quarter of 2019, equity totaled just $15.9 million. After completing two stock offerings, that total stood at $173 million as of June 30. The company raised its minimum investment threshold from $25,000 in the first offering in 2019 to $159,000 in the current offering. Click here for a chart of Encore’s quarterly earnings since 2019.

Meanwhile, Encore has chosen selected markets for its new offices. So far, it operates physical locations in eight states beyond Arkansas: Alabama, the Carolinas, Colorado, Florida, Missouri, Tennessee and Texas.

Map of Encore's full-service locations and loan production offices

Encore began rolling out full-service branches in Little Rock and expanded to three of the state’s major markets: Jonesboro, Dec. 19, 2019; Rogers, May 14, 2020; and Fayetteville on July 1, 2021.

It followed those state moves with branch openings in 2021 in Texas and Missouri: Austin on August 23, San Antonio on September 7, Springfield on September 13, and Dallas on December 1.

This year’s list of branch openings moves from Texas to Florida, with Fort Worth on Feb. 1 and Tampa on Aug. 1. Encore is also planning on-loan production offices in Arlington and Plano, Texas.

While rolling out more offices in Texas, Encore is expanding its presence in the Carolinas after taking its first steps in Charleston, South Carolina. The loan origination office became a full-service branch on August 22.

The bank is considering North Carolina offices in Asheville, Wilmington, Greensboro and High Point, and in Columbia, South Carolina.

Michael Sharpton

Michael Sharpton, announced as Encore’s regional president for the Carolinas 11 months ago, said the company would convert three loan origination offices in North Carolina and one in South Carolina into full-service branches.

“We expect the Charlotte office to be open by the end of the year and the (Winston-Salem) office to be open by the spring of 2023,” Sharpton said in a Sept. 15 press release. “Greenville (South Carolina) and (Raleigh) branches will be open later next year.”

Sharpton, a 27-year banking veteran, previously worked for Wells Fargo Bank as divisional sales manager for North and South Carolina.

His oversight of a two-state region reflects a departure from the organizational hierarchy of Encore Elsewhere. So far, the bank has hired 16 market/regional presidents to manage business in the other seven states where it operates offices.

Like Sharpton, the selections are characterized by experienced and well-connected bankers who can make inroads quickly in their respective territories.

“Chris has done a hell of a job identifying talent,” Dennis said. “He hired some great people, including one of our employees. He does not just find lenders. He finds deposit providers. It’s a talent.

In three years, total deposits at Encore have grown from nearly $121.8 million to more than $1.9 billion.

Among the market/region presidents, about ten also hold the title of executive vice president. Another dozen executive vice presidents populate Encore’s corporate ranks.

Building the administrative bones with experienced staff is not cheap.

Encore’s annual payroll topped $4.7 million in 2019, nearly hit $9.4 million in 2020, and topped $25 million in 2021.

Based on the first six months, the total cost of salaries and benefits this year is on track for $36 million.

Beginning with a workforce of 18 on March 31, 2019, Encore’s workforce has essentially doubled in each of its first three full years of operation.

The year-end census of 46 staff in 2019 rose to 113 in 2020, which rose to 223 last year. As of June 30, the number stands at 289.

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