RBCis Push to Conquer Florida

RBCis Push to Conquer Florida

By Francis X. Gilpin

Associate Editor

The Royal Bank of Canadais U.S. banking unit didnit hesitate last year when Provident Financial Group Inc. bowed out of Florida. RBC Centura Banks Inc. scooped up the Cincinnati bankis beachhead on the Gulf Coast for $108 million in cash and assumed liabilities.

Provident had a presence in Manatee and Sarasota counties, with 11 offices and about 4% of the deposits.

In Hillsborough and Pinellas counties, however, RBC Centura was starting almost from scratch.

Provident had just two branches, in Brandon and Sun City Center. The only other Bay area branch was in Largo, which RBC had picked up from an Internet bank in the late 1990s. In all, RBC was beginning with less than 1% of deposits in the Bay area.

Penny Hulbert is the type of person who likes a challenge. And RBC Centura is challenging her and a team of other veteran bankers freshly recruited to make a mark in Tampa.

iItis kind of fun starting something,i says Hulbert. iItis kind of fun expanding something because then you can kind of develop it the way you want it to be.i

RBC Centura is looking to treble its modest Bay area commercial loan portfolio in 2005. iWe have an ambitious but very achievable goal for next year,i says Hulbert, senior vice president for commercial markets in Tampa.

Theyire getting help from RBC Centura, which is based in Rocky Mount, N.C.

Next week, RBC Centura is scheduled to open a new central office for the Bay area in the West Shore business district. The Tampa location at International Plaza will offer retail and commercial banking services, of course. But it will also house other RBC professionals. There will be representatives from broker-dealer RBC Dain Rauscher Inc., which bought the venerable St. Petersburg municipal-bond underwriter William R. Hough & Co. Inc. in February.

Itis all part of an aggressive push into new American markets, says Kristen Doherty, director of corporate communications at RBC Centura. The special focus of that effort is Florida, where the fastest-growing banking markets in North America can be found. RBC Centura has approximately $1.2 billion in Florida deposits, according to the Federal Reserve.

What will be interesting to see is whether RBC Centura is allowed to pursue the ambitious plan in the cutthroat banking environment of Florida. Thatis because the top brass back in Toronto are unhappy with how things have gone in the iStates lately.

Last month, RBC announced a 37% drop in net income for its fourth quarter. That contributed to a 6% slide in profit for RBCis entire fiscal year, which ended Oct. 31.

The declining U.S. dollar was partially to blame, since an increasing share of RBCis earnings is extracted from its southern neighbor. But the bank has some housecleaning to do.

A particular rough spot has been mortgage lending. Earlier this year, RBC disclosed to Canadian regulators that a slew of fraudulent American mortgages on the West Coast had cost the bank $18 million. An RBC executive later told industry analysts that somehow the bank had loaned money to fictitious borrowers with inflated real estate appraisals.

Gordon M. Nixon, president and chief executive of the parent, has promised investors that performance in the U.S. will improve and soon. RBCis U.S. operations lost $84 million in the fourth quarter, versus an $86 million profit for the same period in 2003.

Already, RBC Centura has trimmed back the number of new U.S. branches it had hoped to count on next year.

Doherty says RBC Centura is now contemplating 15 de novo openings in 2005, down from 25. iFor a bank of our size, thatis still an aggressive target,i she says. Doherty says a majority of those de novo branches will be in the Sunshine State, perhaps as many as 10.

Four of those will be on the Gulf Coast. Besides the Tampa office, which is officially included in the i05 count, RBC Centura will have new branches in Seminole, Lakewood Ranch and Port Charlotte.

iWeive had good success in the state so far,i says Steve Jones, regional president for personal and business banking in Florida. RBC Centura has closed only one Florida branch, he says, a former Provident outlet that was seen as duplicating the neighborhood coverage of another office.

RBC Centura has established itself quickly around metro Atlanta. It will be Penny Hulbertis job to do the same in Tampa.

Hulbert, 43, is competitive by nature. In her spare time, the Washington, D.C., native is working to lower her 16-handicap on the golf course into single digits.

Next year, Hulbert will become president of the Executive Womenis Golf Association. The national non-profit pushes for greater acceptance of career women on the links, where men have sewn up deals while hacking for decades.

iIive actually gotten business out of it,i Hulbert says of golf, which her mother first taught her when she was 12.

Hulbert, who has a masteris degree in business administration from the University of Tampa, says the grand sultans of the sport have embraced the 18,000-member womenis golf group. They know golf doesnit attract as many novices as it once did.

iWeive shown an ability to add and bring new people to the game,i says Hulbert. iSo, in an industry thatis somewhat mature, thatis an exciting thing.i

Executives and professionals are one of RBC Centurais two marketing targets, says Jones. Small companies with less than $5 million in revenue are the other.

Hulbert and her colleagues have marching orders to make RBC Centura the commercial bank of choice for that stratum of Florida business.

She joined RBC a year ago in September, coming over from Northern Trust Bank of Florida. Besides her wealth-management experience, Hulbert has managed branches, worked out delinquent real estate mortgages, and held an array of other banking jobs in California, Florida and North Carolina.

iIive made a lot of people millionaires over my 20-plus-year banking career,i says Hulbert, who went to work for the old NCNB right out of Wake Forest University. iI like to help people figure out how theyire going to take their company to the next level.i

Working for the biggest bank north of the border, Hulbert is initially calling on Bay area businesses and executives with Canadian ties. iThereis instant name recognition,i says Hulbert. iI can get in. They will all see me.i

Hulbert has met with early success by assisting local businesses that boast or hope to have a global reach. RBC Centura does currency trading in practically every denomination in the world.

In addition, RBC Centura has picked up exporters and importers from super-regional rivals such as Bank of America as well as other local clients that outgrew the better community institutions such as Bank of Tampa, according to Hulbert.

iItis more of a customized, individualized approach, but weive got the capabilities and capacity of the sixth-largest bank in North America,i she says. iThat combination has people excited.i

RBCis Bay area operation can pair a banker with a bond underwriter for a business that wants to expand with tax-exempt, industrial-revenue financing. Hulbert says RBC is also the only bank with a Florida executive who is devoted exclusively to the needs of technology companies in the life sciences.

That would be Gary Andresen, co-chair of the Florida Venture Forumis annual capital-raising conference in Orlando next month. Andresen, a vice president in RBC Centurais knowledge-based industries group, has originated more than $100 million in loans over his career.

iPeople do business with people that they think will add value,i Hulbert says of building her team. iI interviewed a ton of people. I feel like Iim pretty familiar with who is competition at the other banks. And Iill put the caliber of our staff up against any of the other commercial banks in the Tampa Bay area.i