High Time for Coast

High Time for Coast

A small Bradenton bank picks itself up off the floor while Bank of America also gains local market share.

By Francis X. Gilpin

Associate Editor

s Coast Bank of Florida starting to turn a corner?

After absorbing a $1.6 million loss in 2003, Coast showed the biggest increase in deposits on a percentage basis of any bank or thrift in the Sarasota market for the 12 months ended June 30. Yet that doesnit appear to have hurt short-term profitability at the Bradenton bank.

On June 30, Coast had almost 2% of deposits in the Sarasota metropolitan statistical area, which includes Manatee and Sarasota counties. Federal Deposit Insurance Corp. data show that Coastis share rose to 1.97%, an increase of 60 basis points from Coastis 1.37% share on June 30, 2003.

Banks picking up that kind of market share sometimes have to pay a price on the bottom line. Deposit growth is often fueled by higher interest rates that banks pay to attract new customers.

But Coastis parent, Coast Financial Holdings Inc., reported in October that earnings for the first nine months of 2004 were $513,000. The company had a $205,000 loss for the same period in 2003.

Net interest income before providing for loan losses, the difference between what Coast paid out on deposits and what it got back from lending activity, was $7.1 million for the first nine months of this year. For the year-earlier period, the audited net interest income was $4.6 million.

Brian P. Peters, Coast Financialis president and chief executive, couldnit be contacted for comment. In a July news release, however, Peters said Coast had revamped deposit offerings.

iWe are shifting away from our dependence on new time deposits and focusing on building core deposits for the long term,i Peters said. iWe expect these products to help grow our demand deposits and fee income.i

At the other end of the asset-size spectrum, Bank of America gained deposit share in both the Sarasota and Tampa markets. The nationis biggest bank by deposits now holds more than 25% of all deposits in both markets.

BofA, which is Americais third-biggest bank by assets, has increased its Sarasota deposit share by 48 basis points since 2003. After Coast, that was the second largest gain in the Sarasota market.

In the Tampa market, which includes Hillsborough and Pinellas as well as Pasco and Hernando counties, BofA went up 104 basis points.

That hasnit been the case all over. The American Banker newspaper reported this month that the Charlotte-based bank has lost market share on a national scale.

The news is better in Florida, where the bank increased deposit share a bit.

BofA is spending millions on marketing a new image in the Sunshine State, where it alienated thousands of former Barnett Bank customers after a merger in 1998, when Bank of America was known as NationsBank.

iIn Florida, the bank had used its slash and burn technique to make the Barnett merger work financially and in the process almost destroyed its market position,i Richard X. Bove, a bank analyst with Punk Ziegel & Co., says in a recent report. iInterestingly, this situation seems to have changed in the past two years.i

BofAis Florida deposits hover around 20%.

SunTrust, one of BofAis chief rivals in Florida, is not doing as well in the Sarasota and Tampa markets. It lost 131 basis points of deposit share in Sarasota and 105 in Tampa.

Susie Findell, a SunTrust spokeswoman in Orlando, said the Atlanta-based bank would have no comment.

Bove has not been as reticent. His reading of the latest FDIC deposit data suggests to him that SunTrust has lost the equivalent of all of the Florida deposits that it acquired when Huntington Bank abandoned the state three years ago.

SunTrust will have a tough time getting it back, according to Bove.

Along with BofA, Wachovia is trying to bring in more consumer accounts. So are Fifth Third and BB&T.

iThey are committed to taking market share and, if they read the figures as we do, SunTrust is the obvious target,i says Bove.

While the giants fight it out, community banks are happy to settle for the leftovers.

James Myers, an industry consultant in DeBary, says studies show that big banks lose up to 30% of deposits within two years of acquiring smaller institutions. iIt seems these deposits migrate to the community bank,i says Myers.

The huge banks use a profit model that drives away certain types of small businesses, says Myers. iIf you donit fit into that model, thatis it,i he says.

Small business owners are the customers most likely to walk o usually down the street to a locally based competitor. iGo into a branch two years after it was acquired. Itis like a tomb in there,i says Myers. iYou might have a commission-based loan officer who has no authority to approve anything.i

In the Tampa market, the Bank of Tampa boasted the largest gain in deposit share among institutions based in the four-county area, excluding Raymond James Bank. It gained 11 basis points.

The Bank of Tampa, in particular, caters to accountants, attorneys and physicians and their professional practices.

iIf you continue to stress the personal touch, we think youill do well,i says A. Gerald Divers, Bank of Tampa president. iItis like the old story of the tortoise and hare. If we keep picking up 11 basis points every year, weill take it.i

Deposits at banks and thrifts

In the Sarasota metropolitan statistical area

$s in 000sCorporateLocalDepositsMkt share DepositsMkt share

Institutionheadquartersoffices6/30/046/30/046/30/036/30/03

Bank of America NACharlotte NC45$3,571,94225.10%$3,056,86124.62%

SunTrust BankAtlanta26$1,915,50313.46%$1,834,24114.77%

Wachovia Bank NACharlotte NC18$1,278,5528.98%$1,139,0289.17%

SouthTrust Bank*** Birmingham AL27$992,0046.97%$967,9547.79%

RBC Centura Bank****Rocky Mount NC11$659,0724.63%$541,8444.36%

World Savings Bank FSB Oakland CA6$514,6323.62%$483,5433.89%

Branch Banking & Trust Co* Winston Salem NC15$501,2343.52%$413,9523.33%

Northern Trust Bank of Florida NA Miami4$480,9563.38%$443,7703.57%

Gold BankBradenton8$446,8343.14%$422,5863.40%

Century Bank a FSB Sarasota7$321,7092.26%$267,2752.15%

First National Bank of FloridaNaples6$286,1162.01%$267,2152.15%

Coast Bank of FloridaBradenton8$280,5651.97%$170,2621.37%

1st National Bank & TrustBradenton6$262,3341.84%$186,5251.50%

Liberty Savings Bank FSB Wilmington OH8$244,1231.72%$256,8182.07%

Colonial Bank NA** Montgomery AL6$205,0431.44%$249,0052.01%

Regions BankBirmingham AL6$171,9601.21%$166,6701.34%

AmSouth BankBirmingham AL13$167,2841.18%$129,4021.04%

Third Federal Savings

& Loan Assn of ClevelandCleveland1$160,3941.13%$141,7561.14%

Bank of CommerceSarasota1$150,3471.06%$107,6410.87%

Peopleis Community Bank

of the West CoastSarasota2$149,3441.05%$92,1770.74%

Landmark Bank of FloridaSarasota3$135,3950.95%$89,4460.72%

Community Bank of ManateeBradenton2$122,0090.86%$101,0590.81%

Bank One NAChicago3$113,2480.80%$106,0570.85%

First State BankSarasota3$106,4450.75%$93,4200.75%

Flagship National BankBradenton2$105,5620.74%$80,3510.65%

Horizon BankBradenton2$101,2060.71%$73,4130.59%

Manatee River Community BankPalmetto2$98,5290.69%$77,3570.62%

Community National Bank

of Sarasota CountyVenice4$90,2610.63%$77,1700.62%

United Bank of the Gulf CoastSarasota2$86,3230.61%$75,6250.61%

Suncoast BankSarasota2$83,2480.58%$60,9030.49%

First Bradenton BankBradenton1$58,7840.41%$44,2550.36%

Tarpon Coast National BankPort Charlotte2$49,0240.34%$45,2870.36%

Peninsula BankEnglewood2$48,1600.34%$32,9620.27%

R-G Crown BankCasselberry1$43,7670.31%$12,5240.10%

Harris Bank NAScottsdale AZ1$41,5860.29%$32,3950.26%

Riverside Bank of the Gulf CoastCape Coral3$39,7490.28%$21,7930.18%

First Priority BankBradenton1$34,3660.24%

Orion BankNaples3$31,7150.22%$9,7590.08%

Bank of VeniceVenice1$27,9380.20%$13,8010.11%

Fifth Third Bank FloridaGrand Rapids MI1$20,1260.14%$3,0980.02%

Englewood BankEnglewood1$16,2240.11%$13,8810.11%

Fleet National BankProvidence RI1$13,7880.10%$15,2520.12%

First America BankBradenton1$5,0600.04%

Institutions in the Market:Y43268$14,232,461100.00%$12,418,383100.00%

*2003 deposits include those acquired from Republic Bank; **2003 deposits include those acquired from Premier Community and Sarasota banks; ***2003 deposits include those acquired from FloridaFirst Bank; ****2003 deposits include those acquired from Provident Bank. Source: FDIC

Deposits at banks and thrifts

In the Tampa metropolitan statistical area

$s in 000sCorporateLocalDepositsMkt share DepositsMkt share

Institutionheadquartersoffices6/30/046/30/046/30/036/30/03

Bank of America NACharlotte NC120$10,382,89725.85%$8,980,34324.81%

Wachovia Bank NACharlotte NC89$5,213,74012.98%$4,752,09413.13%

SunTrust BankAtlanta97$4,825,46712.01%$4,727,17013.06%

SouthTrust BankBirmingham AL48$3,247,9138.09%$2,802,6507.74%

AmSouth BankBirmingham AL64$2,799,8506.97%$2,528,5656.99%

World Savings Bank FSBOakland CA11$1,691,7194.21%$1,699,1044.69%

Branch Banking & Trust Co*Winston Salem NC34$1,331,6943.32%$1,343,4363.71%

Colonial Bank NA**Montgomery AL24$1,064,7802.65%$914,3532.53%

Third Federal Savings

& Loan Assn of ClevelandCleveland5$968,9562.41%$875,8062.42%

First National Bank of Florida***Naples29$785,7111.96%$831,1842.30%

Raymond James Bank FSBSt Petersburg1$772,8661.92%$804,2922.22%

Mercantile BankOrlando17$651,6101.62%$626,0901.73%

Bank of TampaTampa9$628,2041.56%$523,1581.45%

Florida Bank NATampa4$481,0161.20%$449,8501.24%

Intervest National BankNew York5$436,2011.09%$295,0260.82%

United Bank & Trust CoSt Petersburg8$375,0110.93%$309,5350.86%

R-G Crown BankCasselberry5$340,2240.85%$252,3540.70%

Regions BankBirmingham AL12$329,2900.82%$315,6860.87%

First Kensington BankSpring Hill9$263,6540.66%$240,0830.66%

Peoples BankPalm Harbor4$232,1040.58%$195,9410.54%

Madison BankPalm Harbor4$185,7170.46%$158,1220.44%

Sunshine State Federal Savings

and Loan AssocationPlant City5$161,9130.40%$157,8260.44%

Bay Cities BankTampa2$151,0510.38%$105,3140.29%

RBC Centura Bank****Rocky Mount NC5$143,6490.36%$152,4670.42%

Cornerstone Community BankSt Petersburg5$142,0470.35%$108,2470.30%

Northern Trust Bank of Florida NAMiami3$139,7370.35%$175,1920.48%

BankAtlanticFort Lauderdale8$138,2370.34%$110,0530.30%

Encore BankHouston3$133,9170.33%$101,3720.28%

Community National Bank

of Pasco CountyZephyrhills4$123,8770.31%$95,0980.26%

First Community Bank of AmericaSt Petersburg3$122,6640.31%$88,5800.24%

Platinum BankBrandon2$122,2900.30%$96,1170.27%

Signature BankSt Petersburg4$119,0050.30%$88,8080.25%

Terrace BankTampa4$117,3780.29%$115,4930.32%

First Commercial Bank of Tampa BayTampa1$117,1220.29%$87,6010.24%

First Citrus BankTampa3$111,9810.28%$80,1850.22%

Valrico State BankValrico4$110,8670.28%$112,3310.31%

First State BankSarasota3$103,3810.26%$76,7560.21%

Bank of St PetersburgTampa3$94,8700.24%$63,2620.17%

Heritage Bank of FloridaLutz2$87,0720.22%$67,7890.19%

TCM Bank NATampa1$85,4020.21%$68,8150.19%

Bay Financial Savings Bank FSBTampa1$83,8620.21%$81,6360.23%

Gold BankBradenton2$83,0170.21%$44,1580.12%

Compass BankBirmingham AL2$75,8660.19%$71,4370.20%

First National Bank of PascoDade City3$73,9530.18%$68,4580.19%

First Home BankSeminole1$59,9340.15%$52,0280.14%

Hillsboro BankPlant City1$59,2560.15%$50,1130.14%

Century Bank of FloridaTampa1$56,7780.14%$34,7770.10%

Palm BankTampa1$50,0480.12%$18,4440.05%

Hernando County BankBrooksville2$49,6120.12%$45,7300.13%

Old Harbor BankClearwater1$48,6350.12%

Southern Commerce BankTampa1$47,9360.12%$40,1270.11%

Capital City BankTallahassee3$43,2670.11%$39,6840.11%

Gulfstream Community BankPort Richey1$39,9120.10%$31,3280.09%

First National Bank Tarpon Springs1$21,8110.05%$25,0800.07%

Cortez Community BankBrooksville1$13,9730.03%

Community Bank of ManateeBradenton1$10,8110.03%$4,2400.01%

Community Bank of FloridaHomestead4$10,3810.03%$9,9170.03%

Armed Forces Bank NAFort Leavenworth1$2,8280.01%$2,2790.01%

Members Trust CoTampa1$5000.00%

Washington Mutual Bank FA Stockton CA1$3990.00%

institutions in the market:Y60694$40,167,863100.00%$36,195,584100.00%

*2003 deposits include those acquired from Republic Bank; **2003 deposits include those acquired from Premier Community Bank; ***2003 deposits include those acquired from Southern Exchange Bank; ****2003 deposits include those acquired from Provident Bank. Source: FDIC