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Another Calif. de novo bank opens

Infinity Bank has opened to become California's second de novo of 2018, S&P Global Market Intelligence has learned.

Santa Ana, Calif.-based Infinity opened Feb. 1 after closing a $33 million capital offering, COO and CFO Victor Guerrero said in an interview. Guerrero noted that Infinity had originally set out to raise $30 million but increased the total because the deal was oversubscribed.

Another California de novo, San Diego-based Endeavor Bank, opened in January, and Costa Mesa, Calif.-based Blue Gate Bank opened in 2017. While there has been an increase in de novo activity, the U.S. has seen a dearth of new bank openings since the financial crisis.

Ajay Asija, who is head of depository investment banking at B. Riley FBR Inc., helped execute the raise for Infinity, and he noted that some of the capital being invested into the bank is coming from B. Riley Financial Inc. He said investors are interested in de novo banks, but institutions need to have the right management team and location to receive regulatory approval.

"The de novo environment in general is very challenging," Asija said in an interview.

Infinity has one branch and intends to serve Orange County and adjacent communities. The bank filed its de novo application with the name SoCal Bank, but the application was approved with the name Infinity Bank.