Hyperion Bank, a one-office lender based in Philadelphia's Northern Liberties section, has finished raising $18.3 million from private investors, and plans to more than triple its loans, pumping an extra $140 million into Philadelphia business, said Charlie Crawford, chairman and chief executive.
"The new capital will enable the bank to make commercial loans up to $3 million" each, up from less than $1 million per loan last year, said Crawford, a Wharton School grad who founded a string of small banks in Georgia over a 30-year banking career before returning to Philadelphia for the Hyperion job last year.
Hyperion founder Steve Atlass, managing director at Cambridge Cos., a Radnor geriatric-housing and pediatric-care turnaround specialist, remains on the board. The new money includes $14.8 million from a recently completed common stock offering, plus $3.5 million the bank raised earlier from existing shareholders.
Hyperion loans and other assets on June 30 totaled $88 million, about the same as in 2013. Deposits totaled $65 million, less than the typical total at a busy branch of Wells Fargo, Citizens, PNC, TD, or Bank of America, the big out-of-state lenders that dominate Philadelphia banking. Those banks have each closed 20 or more local branches in recent years, as customers shift to smartphone-based mobile banking.
Hyperion is making its move just as Beneficial Bancorp, the largest banking company still based in Philadelphia, is preparing for its acquisition by WSFS Financial Corp. of Wilmington. That leaves Philadelphia, which was formerly a major U.S. banking center until the mergers of the 1990s, with just 11 locally based independent banks, all of them small.
The largest survivor is Republic Bank, with $2.5 billion in assets, chaired by Commerce Bank and Metro Bank PLC founder Vernon Hill. Next is Prudential, with $1 billion, then Hyperion and nine other savings and commercial banks, most with just one office, and with combined assets totaling just more than $1 billion.
But Hyperion isn't the only bank to sense opportunity as others have consolidated: JPMorgan Chase & Co. chief executive officer Jamie Dimon said he's planning 50 new branches in the Philadelphia area, including several in the city. Republic has also been adding branches, mostly in South Jersey.
Hyperion has made and shared suburban development loans, but lately emphasizes city clients including Tracy and Mia Levesque's Web developer Yikes Inc. on Girard Avenue, and real estate developers including Roland Kassis of Frankford and redeveloper Roy Bowser of Northeast Philadelphia, as examples of its expanding target markets.
Besides backing new loans, the bank will use the new investment to buy out $1 million in preferred stock, and also promised additional mobile and remote banking upgrades. The company has added a few new managers since Crawford joined, including chief financial officer Paul Rutkowski and mortgage boss Brett Warren.
The bank has also added three new directors: NewSpring Capital advisor Mike Purcell, CPA; Obermayer Rebmann counsel Robert N.C. Nix III, founder of 15-state airport concessionaire and Duty-Free Shops operator Pleasant News Inc., director of FS Investment Corp., and a 30-year member of the Philadelphia Board of Revision of Taxes; and James J. McAlpin Jr., leader of law firm Bryan Cave's national financial-services group.