On the heels of 24% year-over-year loan growth, Grasshopper Bank is beefing up its lending operations with a new chief credit officer and several new lending executives.
Chief Credit Officer Steve Kerr has held senior vice president roles at various banks, most recently Dime Community Bank in Hauppauge, New York, and has worked in credit and risk management for 25 years.
Grasshopper, which serves primarily small and medium-sized businesses, startups and the venture capital and private equity sector, named NBT Bank veteran Dawn Gillette as head of digital lending, former Pathward underwriting director Brennan Quenneville as head of Small Business Administration lending, Andrew Simon as head of SBA digital lending and David Menoian as SBA national sales manager.
Justin Whitson, formerly of Pathward, has been named business development officer.
“Expanding our capabilities and digitizing the lending process will further cement our position as a leading digital bank, and we look forward to continuing to deliver innovative, frictionless experiences to our clients,” said Grasshopper President and CEO Mike Butler in a prepared statement on the hires.
The $867.5 million-asset bank’s Vice President of Embedded Finance Vince Peterson told Banking Dive at Fintech Meetup last week that some of the bank’s recent loan growth can be attributed to the embedded finance side of the business.
“The deposits that we do on the embedded side are really helpful for the bank's balance sheet as far as what we can do on the loan side,” Peterson said. “The loan growth has been kind of a direct correlation of the growth we've had on the deposit side, especially over the last two years.”
Total deposits at Grasshopper climbed 13% year-over-year to $1.3 billion, the bank said in February. About $133 million of that growth stemmed from banking-as-a-service program deposits.
In October, the bank agreed to acquire Dearborn, Michigan-based Auto Club Trust, a federally chartered savings bank, in a cash and stock transaction.
“We surely, from a company perspective, want to move beyond just serving the business and innovation economy and expand naturally into a consumer product space. And this opportunity to partner with ACG and ACT, the banking subsidiary, allows Grasshopper to take that next step in a fairly significant way,” Butler told Banking Dive at the time.
The hires announced Tuesday are part of Grasshopper’s “bold 2025 vision to expand and fully digitize its lending operations,” according to the bank.
On the embedded finance side, Grasshopper “is a small bank that punches well above its weight,” Peterson asserted.
Peterson sees bright horizons in the embedded finance space at Grasshopper and beyond.
“The chaos in this space over the last two years has really upleveled all the players [in embedded finance],” Peterson said, adding that he’s seen increased discipline around program management and compliance.
“More and more fintechs are realizing that they actually want to have a seat at the table and own the compliance function, because they know their customers better than their sponsor bank or their middleware API provider ever could,” Peterson said.
An area for growth in embedded finance, Peterson believes, is stablecoins. Following a recent Office of the Comptroller of the Currency bulletin that banks are permitted to play in the stablecoin space, working in banking is “an exciting spot to be.”
But he cautioned diving in too deep, too quickly.
“Every bank should crawl, walk, run into new lines of business, because regulation can change quickly, and you don't want to have a scenario where you've maybe taken shortcuts, or you've just gotten something too fast.”
“Two years from now, some of the [regulatory] decisions that are being made around stablecoins could have some really interesting implications for the types of fintech programs that banks are able to support,” he said.
