RiverBank, a boutique financial institution that opened here about 19 months ago, has applied to the Federal Reserve to form a bank holding company.


The Federal Reserve Bank of San Francisco, part of the Fed network, is accepting comment on the application through Dec. 17, and Duane Brandenburg, RiverBanks president and CEO, says he expects the application to be approved shortly thereafter.


RiverBanks founders had intended to form the holding company earlier, but the amount of time that process would have required didnt coincide with the desired opening date for the bank, so they opted to postpone the filing, he says.


Stock sold in a $15.8 million private placement was issued under the name of RiverBank and will be transferred to RiverBank Holding Co. after that company has been formed, which currently is expected to occur Jan. 1, Brandenburg says. At that point, the bank will become a wholly owned subsidiary of the holding company, he says.


We intend to form an ESOP (employee stock ownership plan) so our employees can have stock in RiverBank, and establishing the holding company will make that easier to do, he says. He says the holding company will form the ESOP next year.


Forming the holding company also will enable the bank to make use of trust-preferred securities to meet future capital needs, rather than perhaps being forced to go back to investors for that money, Brandenburg says.


He refers to such securities, which commonly are issued by bank holding companies, as a low-cost debt instrument that RiverBank wants to be able to use as needed. It is a hybrid security that the holding companies can treat as debt for tax purposes and as equity for capital and accounting purposes.


RiverBank has been exceeding business-plan projections and says it expects to end the year with around $101 million in assets and $86 million in loans, which makes it one of the fastest-growing new banks in the state over the last two decades.


It is a niche bank that offers highly personalized services, mostly to small-business and commercial clients in the Spokane area. Its services include concierge courier vehicles that go to customers locations to collect deposits or to respond to customers other banking needs.


RiverBank occupies space on the top two floors of a five-story building at 203 E. Spokane Falls Boulevard, and operates a branch in a building just west of there, at 34 E. Spokane Falls Boulevard, where it also keeps its courier cars and has some data-processing operations.


Brandenburg says, though, the bank has agreed to lease about 1,100 square feet of newly vacated space on the ground floor of the five-story building and plans to move its branch there shortly. It will continue to use the 3,800-square-foot building at 34 E. Spokane Falls Boulevard for data processing and courier-car storage, he says.


He says also that the bank expects to commit this month to a long-term lease renewal for the space it occupies in the five-story building, which would enable it to name the building after the bank and put up related signage. If that lease agreement is completed as expected, the bank probably will put up signs on the building next year, he says.


Contact Kim Crompton at (509) 344-1263 or via e-mail at kimc@spokanejournal.com.