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BANKING Q&A by Dave Szymanski | Tampa Bay Editor

While retail banks expanded rapidly, The Bank of Tampa centered on its commercial customers. The focus served it well.

Bill West, a longtime executive with the Bank of Tampa, is now the bank's new chief executive officer and president.

Headquartered among the condo towers and signature homes on South Tampa's stately Bayshore Boulevard, The Bank of Tampa is an institution in the Tampa Bay area, mainly serving professionals and business owners. It is the largest independent bank in the Bay area and among the 20 largest in Florida.

While many Gulf Coast banks have been bought and have headquarters elsewhere, the Bank of Tampa has remained in Tampa since it began in 1984. It has served Hillsborough County, but in recent years, it has started to serve customers in Pinellas, Pasco and Polk counties.

It prides itself on face-to-face customer relationships. It still does that, but like other banks, it has embraced technology, such as automatic check deposit, to save time for customers.

In a tight economy, with more competition for deposits, it has been working on providing more financial services such as cash management, equipment leasing, residential mortgages and trust services, to existing clients as well as seeking new ones.

The Review sat down with West recently to ask about his goals for the bank and the main issues facing the banking industry in Florida.

Here is an edited version of that interview.

What are your goals for the Bank of Tampa?

"Our goals have been well thought out. Henry [Gonzalez, executive vice president of commercial banking] and I have been working on a strategic plan the last two years. It is not going to change much. It involved the efforts of a lot of people. We're comfortable with it. We have recommitted ourselves to remaining a relationship-driven organization. But we want to be better than that. It's easy to say. The devil is in the execution. We call it client intimacy. We want to be a client-intimate organization. We want to partner with them all along the way. We do a pretty good job now. That's really what we're working on. It makes us different."

Who do you define as your customers?

"Geographically, they are in Hillsborough County. Some are in Pinellas. Some in Pasco and Polk. We do have some in outlying counties. We are very niche. One of the reasons we are where we are is that we serve owner-managed businesses; professionals, such as medical and legal; and individual businesses."

What is your business-building strategy?

"We're not a mass market consumer bank. We build a complete relationship with the clients. So, in light of that, we do commercial banking for them, as well as estate planning and money management. Henry (Gonzalez) is leading an effort to sell deeper into the relationship. We are exploring what it is we are not doing that we should be doing. Maybe it's estate planning."

So you are also trying to bring new clients in?

"We're in the business of bringing new clients in. We recently had prospects come to us. We're seen as a safe haven. We've won new business from bigger banks. It seems like our pipeline has grown, but it has not been through land loans and construction loans."

How much of your business is small to medium-sized businesses?

"Owner-managed businesses are about 25% of our book of business, from startups to $50 million businesses. We have a few clients above $50 million in revenue. We help them grow the business, or help them start their business. With one client, two people own the company. Two years ago they wanted to start it. They have 26 employees and are doing very well. We've been with them from day one."

Do you plan to expand personal accounts?

"We do personal accounts, but it's not our core. We do have an effort with Henry (Gonzalez) and our office managers to develop personal relationships with folks."

Where do you see The Bank of Tampa going in the next three to five years?

"We are happy and comfortable with our niche. We are a bank for business. We won't deviate from that. We will do a little commercial real estate lending when the market is right, as long as it's a complement to what we do. In five years, we hope to be 50% bigger. We want to stay in our niche and grow 10% a year. If there's an opportunity to grow into Pinellas or Polk county, I could see us moving in that direction. Five years from now, I'd be surprised if we weren't in another county."

How important is growth?

"Growth matters because it's a way to increase our earnings. Secondly, we have a lot of capable people in this bank. There are opportunities for growth. I want to make sure we do that well. We're planning to be bigger. We have the infrastructure. We have those things in place."

Who are your direct competitors?

"No one is niched as tightly as we are. Bay Cities Bank would be one competitor. Any of the community banks are going after some commercial business. Community banks aren't competing against community banks. They're competing against big banks."

If the community banks know their community, including the small businesses, how does The Bank of Tampa set itself apart?

"There's not a community bank half our size. We have a full complement of services. We have two people selling cash management products. In a community bank, an account officer does a little of all of that. We're a very profitable bank. We've gotten to critical mass. That means we have enough size to provide all of those services. We have a leasing partnership. We have a joint venture to provide insurance services to clients. We can simplify a business owner's life. Community banks do a fine job. We have more size working for us."

What are the main challenges for the industry?

"For a lot of community banks, it's natural that they have put a lot of assets in real estate loans. They have high-cost deposits. Their balance sheets are hurting them. Their margins are squeezed. They find themselves in a situation where they are not making that much money. They need to figure out how to survive and grow their bank with more diversified loan accounts. That will take time. Building a bank is a slow process. You can't be a sprinter in this business. We are very happy hitting singles and doubles. We're not interested in always swinging for the home runs. The whole industry is also heavily regulated, and that is getting to be very expensive."

What are the main challenges for The Bank of Tampa?

"We are likely to make as much money this year as last. One of our challenges is how do we attract and retain good people and train them. We want our commercial clients to go to Henry (Gonzalez) for everything. We can't find enough of those people. If we could find five good bankers, we'd hire them."

What has been the impact of technology on banking?

"We wanted to measure the impact of remote deposit capture (devices than allow customers to scan checks and send them to the bank electronically). Henry (Gonzalez) did a study. Of 100 clients, 40% of the total items came from RDC. So if it is 1,000 checks a day, 400 of those checks were scanned and captured electronically. That means no teller work, no encoding. Technology is really transforming the business. The industry is all moving toward imaging. We're looking at imaging. All banks are working on that right now. There's a lot of work to be done. Banks are investing a lot in technology. It's here to stay. The downside of these devices is that we like to see our customers and we see the clients less in some cases."

So how do you maintain communication with customers?

"To offset that, we've made a conscious effort to reach out to customers. We had five in for lunch today, thanking them for their business. We try to do that every week. We took 40 people to the Tampa Bay Performing Arts Center in the fall for a thank you party. We only see that accelerating. We changed our tagline three years ago to, "Locally connected and personally committed." We want to stay true to that."

What areas does the bank need to improve on?

"We're trying to improve on customer service. On professionalism. Certified financial planning. Cases where account officers come in to see customers. We can be better in money management. We help them create wealth, but someone else is managing it. We have these services in place. They are unaware of our depth. Still, we've achieved some momentum here. We've doubled the size of our trust operation in 18 months. We have more than $900 million we are managing. Three years ago, that was $300 million."

How would you describe the state of the banking industry now?

"Consolidation will continue. The industry will look like a barbell, with big banks on one side and community banks on the other and very few mid-tier banks in the middle. You'll be either really big or really small. It's a challenging business now. There are asset quality problems with a lot of banks. There has been lots of money raised. But some community banks are struggling. Plenty are doing well. It is harder to grow. The industry is almost in a no-growth situation. Some banks will post less or no earnings. We are very proud of our performance. We will make as much money this year as we did last year, or about 1.1% this year, or $10.5 million."

Will real estate loans continue to hurt banks?

"Banks exposed to that are hurt the most. If you have a diversified loan portfolio, you should be all right. If you were diversified, there's no incredible exposure. We have a very low exposure. We had no land loans."

REVIEW SUMMARY

Company: The Bank of Tampa

Employees: 215

Industry: Banking

Key: Expand financial services to existing clients, explore new commercial markets