Don M. Griffith

Don M. Griffith

Chairman & Chief Executive Officer

Chairman’s Letter

As Chairman & CEO with experience establishing two banks before founding Grandpoint, I believe in the importance of bringing together a close-knit team of experienced bankers who enjoy the business as much as I do. Every day we share our enthusiasm for the work we do with the clients we serve. I believe that the quality of our relationships is the truest expression of the value we offer.

The well-established clients we welcomed to Grandpoint as part of our 11 acquisitions, as well as the new relationships we continue to cultivate, form the strong foundation from which we are growing. We have evolved into a consolidated bank with a single charter, and a well-rooted presence in our operating regions of California, Arizona and Washington. As we have done so, our clients have created the opportunities for our growth, and inspire us to continually enhance and diversify our product offerings to meet their expanding needs. Today, Grandpoint Bank is a sophisticated financial institution with the personal service philosophy of a community bank, capable of partnering with clients who have diverse and specialized banking needs.

Our growth is evident in our earnings, and in the steady progress that we have made generating revenue and managing expenses. In 2016, Grandpoint Capital, Inc., the holding company for Grandpoint Bank and its divisions, Bank of Tucson, Regents Bank and The Biltmore Bank of Arizona, achieved record earnings of $33.2 million, with a return on average tangible equity of 10.71%, a 1.03% return on average assets, and an efficiency ratio of 53.29%.

dollars in thousands

12/31/2013 12/31/2014 12/31/2015 12/31/2016
EPS—Basic $0.20 $0.53 $0.91 $1.01
ROAA 0.29% 0.70% 1.00% 1.03%
ROATE 2.10% 5.24% 10.52% 10.71%
Efficiency Ratio-Core 84.92% 68.01% 54.25% 53.29%
Organic Growth (Chart)

As always, our growth is balanced by the importance we place on operating a healthy bank with a clean balance sheet. Safety and integrity are core aspects of our philosophy, and we adhere to best practices in every transaction. Our strength, stability and soundness have repeatedly earned Grandpoint Bank recognition from independent rating and research firm BauerFinancial. In March 2017, we received our fifteenth consecutive quarterly 5-star “superior” rating, which is only awarded to the nation’s strongest banks.

in thousands

*Impacted by after-tax M&A expense of approximately $6.0 million

Annual Net Income (Chart)

in millions

12/31/2013 12/31/2014 12/31/2015 12/31/2016
Loans, net $1,686.3 $1,974.0 $2,269.6 $2,351.3
Deposits $1,937.7 $2,405.8 $2,545.7 $2,576.1
Total Assets $2,275.3 $2,759.0 $3,197.0 $3,327.0
Balance Sheet Growth (Chart)

Our people

We founded Grandpoint in 2010 with a strong belief that the quality of our bankers would serve as the most important driver of our business, and that has held true. Our seasoned team brings the value of their perspectives to long-term, mutually beneficial relationships with every client. We take a personal interest in our clients’ priorities, providing them with entrepreneurial thinking, a competitive platform of products and services, and specialized banking expertise in the industries in which they do business. We know we are successful when our clients’ businesses grow and succeed.

Today, our leadership team is driving growth in each of Grandpoint’s regions.

Branch Locations

Looking forward

As we expand our capabilities, our clients can continue to count on us to provide them with dedicated personal attention and advice, tailored to their priorities. With our unified structure, we have the agility to bring together different areas of banking expertise, to share knowledge across our organization. This gives us the ability to think beyond the usual options, and craft out-of-the-box solutions that balance ingenuity with safety, in order to meet our clients’ complex banking needs.

At our core, we retain the spirit of a community bank by maintaining close ties to our regions, and providing the kinds of targeted services that they require. We will build upon this foundation by expanding expertise in the niche industries prevalent in our operating regions, continuing to foster community connection through relationships and outreach, and banking non-profits in the communities we serve. Most importantly, Grandpoint and our divisions offer clients a unique benefit — the ability to interact with bank presidents and senior leaders, who bring decades of experience and autonomy to the table. This is a defining point of difference for Grandpoint clients, because it affords them a level of personalized service that is not offered by most banks of our size and capability.

With a solid base to build upon, we remain committed to identifying ways to safely and securely offer differentiated products in the business sector. We have created a platform of Treasury Management products that are competitive with the major banks. We are also expanding our expertise and capabilities to more aggressively pursue other new products, starting with the specialties we are building in multifamily lending and Government Guaranteed Loans. Today, Grandpoint’s first-rate origination team in the area of multifamily lending serves borrowers across Southern California and Arizona. We have also targeted commercial and industrial lending and non-bank lender financing as areas where we will work to establish niche expertise, while continuing to build on our substantial knowledge in commercial real estate lending.

I speak on behalf of myself and our entire team when I say that we love what we do, and we look forward to continuing to offer our clients the unique value of a safe, sophisticated financial institution, combined with the personal attention to every client’s banking needs.

We are grateful for the continued loyalty of our clients, and we are committed to earning your confidence and business in the years ahead.

Don M. Griffith
Chairman & Chief Executive Officer