Santa Rosa-based Poppy Bank to add branches in Folsom, Elk Grove, Sacramento

Poppy Bank, based in Santa Rosa, is expanding to three new branches in Sacramento.

Poppy has physical branches in a time when many banks have closed them to cut costs.

Poppy Bank is a business bank. It offers services such as treasury and merchant services, and also does lending through the Small Business Administration. The bank funds this with retail savings accounts, which tend to pay higher interest rates than average.

Poppy has a Roseville branch since 2018 and has soft opened new branches in Folsom, Elk Grove and Folsom. In the next few months, it plans to open its Sacramento branch in Curtis Park.

The bank seems to have a strategy to cater to customers who prefer to visit a branch to meet with a banker.

Poppy currently has 23 branches open in the state. It plans to add 10 more branches to the network by the end this year. According to its website, the bank plans to open new branches in San Jose and three in Southern California.

Poppy opened its 19th branch in San Francisco in January of last year.

The branch expansion seems to be bringing in more business. Poppy's assets were $5.9 billion by the end of first quarter of this year. This is up 37% compared to assets of $4.3 million a year ago, according the Federal Deposit Insurance Corp.

At the end of the 1st quarter, the bank had $4.4billion on deposit. This is up from $3.7billion a year ago.

To end the first quarter of this year, $3.9 billion was in interest bearing accounts, up from $3.4 in interest bearing accounts a full year ago.

Banks tend to offer high rates of interest on certificates of deposit and savings accounts. The bank pays a 5% yield annually on certificates of deposit for six-months, nine-months and 12 months. This is a higher rate than most banks. Before the beginning of the last year, interest rate were so low that many customers didn't want to switch banks in order to get a marginally higher deposit interest rate. But now, the Federal Reserve has raised interest rates ten times since the start 2022.

According to its website, Poppy uses deposits to fund loans under the SBA's popular 7(a), 504 and 505 loan programs. The bank offers SBA loans throughout the United States.

SBA's 7(a), which can be used to expand a business, purchase inventory, or buy real estate is a popular loan for small businesses. The 504 loan, which has ten-year amortization, allows owners of commercial buildings to finance their own real estate.

The bank was founded in 2005 and originally named First Community Bank. Poppy Bank was rebranded in 2017 after a dozen other banks had the same name.