EverBank is making a play for action in the crowded banking scene in Los Angeles and throughout the state.
The Jacksonville, Florida-based banking and financial services firm opened its first L.A. County financial center in Encino, shortly after the bank launched its Southern California commercial banking division in Irvine.
In April, EverBank completed its $261 million acquisition of Sterling Bank & Trust, a deal that further establishes its network in the region and throughout the state. Earlier this month, EverBank officially rebranded Sterling’s 25 bank locations – six of which are in the county – under the EverBank moniker.
EverBank, which considers itself among a pioneer in offering online banking service, plans to open more bank branches in Southern California. That includes in Beverly Hills and Corona Del Mar later this year, and in Westlake Village and Santa Monica in 2026.
Opening physical branches seems counter-intuitive at an era when banks have been consolidating physical branches. With roots in digital banking, EverBank has never emphasized fleets of banking locations. Rather, it operates a “branch-light” model to focus on a few physical financial centers to keep costs down.
However, the physical branches play a part of a campaign to raise a flag in California’s crowded financial market, said Patrick Nygren, senior vice president and head of retail banking at EverBank.
“We see it as a real strategic opportunity to create brand awareness to our digital bank,” Nygren said.
Nygren sat down with the Business Journal to discuss EverBank’s plans to develop business in Los Angeles and throughout California.
Please discuss EverBank’s roll out of physical locations in California.
We recently made the acquisition of Sterling Bank. We actually converted (the nameplates of former Sterling Bank locations) on Sept. 8. So, we will have an additional 25 branches across California between San Francisco and Los Angeles. Six are in Southern California, the remainder in Northern California around San Francisco. We also have one in New York with that acquisition. So, we really go from our two physical locations (last year) to 27 as of Sept. 8. Then, we also have the de novo (new bank) strategy to grow. We will also be opening in Corona Del Mar, Beverly Hills, Santa Monica and Westlake Village.
We see it as a real strategic opportunity to create brand awareness to our digital bank. One of the things that would say any digital bank faces as a challenge is just awareness. It’s expensive. Media is expensive. This is a great opportunity for us, with an incredible legacy franchise, with over $2 billion in deposits existing today within the Sterling franchise. We’ve seen that franchise actually grow pretty significantly, just with a partnership with EverBank over the last nine months as we prepared for our customers on day one.
What is EverBank’s opportunity in Los Angeles?
It really started with looking at our digital footprint. We saw that California was our second-largest market outside of Florida. Considering the tremendous opportunity in the California market, we viewed it as an opportunity to strengthen our brand presence in California, beginning with the delivery of our first two financial centers (in Encino and Roseville), which we opened at the end of last year. It ultimately led to our acquisition of Sterling Bank, and then some of the de novos that we have coming later this year and into the next year. California is a deposit-rich market. It’s dominated by the major banks. They do an amazing job of providing a lot of products and services. We see there’s a real niche on how we can differentiate and provide additional value to clients. It’s through competitive rates and opportunities with our digital bank.
How do physical branches fit with digital banking?
What we’re building is different. It’s in many ways, the future of banking. It’s how people want to think digitally. But they want to have that peace of mind with brick and mortar in the right places.
So, if you’re driving down Ventura Boulevard, and you see the Encino location, you look up at us and go, there’s a branch in Beverly Hills. There’s one in Santa Monica. Maybe that’s where I want to put my money. If it’s just driving by and you can’t get it, because there is no physical location, people are hesitant. When you look at a lot of our clients, between the ages of 40 to 65 and 70, you know they’re looking for that convenience, still of knowing right if they need to get access to their money quickly. That’s kind of the advantages we’re bringing through a branch-light model.
Our opportunity with that based on our experience in Florida, when we can place a physical location around our digital clients. We typically grow and earn more wallet share, not only from our existing customers, but from the community that surrounds the location. We can look at where our digital clients exist today, right across California, targeting Los Angeles, and look at what our opportunity would be if we placed a physical location within a geographic area.
Will EverBank focus on developing business in Los Angeles’ middle market?
Yes. Today, we do have a commercial banking team that is run by Mike Berry (based in Roseville.) There is a plan to be aggressive and grow within that space. California is the largest small business community in the country. We know that we need to be in a position to provide support to those businesses across California.
You think about our first strategic play in California was Encino. It’s a very large small business community, a strong affluence. And at the same time, a very dense market. We saw that as a unique opportunity to bring our digital customer base in partnership with a physical location, and we’ve seen tremendous growth within those markets; and I think we’re just going to replicate that story.
Who are your banking clients?
Largely our client base through the digital channel is a saver. Also, people who are looking for a better return than your traditional brick and mortar banks.
Could you quantify your growth in the Los Angeles region?
We started with $40 million in digital clients around the Encino location. We’re now with roughly $180 million in deposits out of that location in less than nine months. It’s a very strong trajectory. We’ve seen incredible client-experience scores. We’re seeing incredible loyalty. We’re getting a lot of word of mouth from friends and family. That was really our strategy. We knew that people liked the value we brought as an organization through our digital channel, but providing the peace of mind that people get by knowing if they have problem or if they need to get money immediately, they can just drive down the street and get to it.
Are there any services unique to EverBank?
The industry average rate paid on bank deposits is less than half a percent today, in our current environment, on savings accounts. We have a significantly higher return on behalf of our clients.
I think we are able to do that because the efficiency that we are able to gain through a digital bank, and then being very selective in our branch-light model, to where our customers are so our average branch will have a larger deposit share than maybe a traditional bank would have, which allows us to just drive and be even more efficient.
When you think about the advantage of a digital bank, it’s a lower cost right to essentially run a bank, and in a lot of ways, you don’t have the significant costs associated with a 500-location bank. We should provide very select branch-light locations to better service the community, while then at the same time, increase wallet and market share within those communities.
You know we’re not going to have 15 to 20 locations across the San Fernando Valley. We may end up with two or three, but in those efficiencies, we’ll be able to provide an exceptional client experience, right? Our client experience stores are, you know, today greater than world-class. We are recognized for that.
How has commercial banking divisions in Southern California been developing? Family lending in SoCal, how is it developing? Please talk more about EverBank’s public finance lending.
I would say that one of the most successful and early leaders across the other departments within EverBank would be our multifamily lending, you know, we have funded more than $1 billion in loans since its launch in March (2024) across the Western United States.
So, we’re targeting the West Coast with this group. It’s like the bread and butter for the bank in that space, really partnering with investors, property owners, property management companies that are looking for ways to refinance. To revamp their multifamily lending space. The team has had tremendous growth within the space and has shown a lot of success early when you think about public finance. It’s just an area we are looking to expand and grow. We are really excited (in) our ability to really provide some key lending across our specific assessment area, across California, including Los Angeles.
What is EverBank’s most popular product in Los Angeles?
I would say our most popular products are going to be our high yield saving accounts, and our performance money market accounts. They are a kind of industry-leading savings products today. That allows the customers across the nation to take advantage and provide a strong return on their products. It drives great loyalty, great retention. This is an opportunity to continue to establish our brand around really what we do best … that’s what we’re focused on, knowing that we can’t be all things to all people.
