Eclipse Bank opens temporary office near site of future homeBusiness First of Louisville, December 9, 2005
The current offices for Eclipse Bank Inc. in St. Matthews look more like those of a small real estate agency than what president and CEO John Pendergrass jokingly refers to as the bank's "world headquarters."
The not-so-grand entrance to the temporary office at 135 Chenoweth Lane leads from a parking lot at the rear of the building, where the bank leases space. â€¨Instead of being met by a wall of tellers, customers of the startup bank are greeted by a receptionist, seated behind a small desk in a large, open room surrounded by offices.
But Pendergrass believes that with $15 million in new capital from a recent public offering, Eclipse is ready to start increasing its deposits and loan volume.
The state issued a charter on Oct. 15, and the bank opened later that month. â€¨"We have been testing our systems and making sure everything syncs with the outside world before we opened the doors," Pendergrass said.
The final test, Pendergrass said, was writing a check, depositing it at another financial institution and waiting to see whether the check was returned for payment.
"And it worked exactly like it was supposed to," he said with a smile.
Pendergrass and other organizers now will focus on finalizing plans for the bank's permanent home -- a two-story, 10,000-square-foot building that will be located at the site of the former White Castle restaurant in St. Matthews that closed in 2002.
Bank expects to grow slowly
Eclipse Bank currently has seven employees, including Pendergrass; his wife, Mitzi Pendergrass, who is chief operating officer and executive vice president of retail banking; and W. Mark Dohrman, executive vice president and chief finance officer. â€¨Another five or six employees will be added within a year as the bank's deposits and loan volume grow and the bank moves into its new headquarters.
"We are not in a rush," John Pendergrass said. "We stayed pretty conservative in our estimates. We stayed mindful that if you grow too fast, regulators don't like that." â€¨Currently, the bank has about $300,000 in deposits, primarily from board members and organizers.
The business plan submitted to Kentucky's Office of Financial Institutions to obtain the state charter calls for deposits to reach about $25 million to $30 million next year and $55 million to $60 million in 2007. â€¨David Coyle, director of the Kentucky Division of Financial Institutions, the agency within the Office of Financial Institutions that examines banks, agreed that slow, controlled growth is preferred by state and federal regulators, who look for "realistic growth estimates" from bank officials before approving a charter.
He added that requirement for capital is more stringent for banks launching operations in large markets such as Lexington, Northern Kentucky and Louisville, the state's largest banking market with nearly $2 billion in deposits in area banks. â€¨"If you open a bank in Lexington or Louisville, you are going to grow pretty fast," he said. "That is one reason we preach that you have to have plenty of capital."
Coyle said that he believes the $15 million raised by Eclipse Bank is the largest ever raised in Kentucky by a startup bank. The offering included about $6 million invested by organizers. The largest shareholder is German American Bancorp, based in Jasper, Ind. German American purchased 54,000 shares, or 9 percent, through the offering.
Site construction to start early next year
About $11.6 million from the proceeds of the public offering will be used as working capital, according to the offering circular provided to potential investors. â€¨The remainder of the proceeds -- about $2.8 million -- will be used to buy land, build the bank's permanent headquarters and buy equipment and furnishings.
Eclipse already has bought a portion of the land at the northwest corner of the intersection of Chenoweth Lane and Frankfort Avenue for $225,000, and Pendergrass holds an option to purchase or lease the remainder of the land for an undisclosed amount.
The building and remaining property currently is owned by a trust that is administered by PNC Bank. Jim Couch, president of Beargrass Realty Inc., which is managing the property for PNC, confirmed that Pendergrass has an option for the land but declined to give further details.
Pendergrass said he expects the bank to acquire the remainder of the land, complete the building design, receive final zoning approvals and begin construction by the end of the first quarter of next year.