Choice Branches

REVIEW SUMMARY
Company. HomeBancorp Inc.
Industry. Mortgage lending, business to business banking.
Key. Capitalizing for the fallout

Now in the midst of building his second career bank, Jerry Campbell is finding plenty of opportunity in Florida, where bank closings so far this year are already outpacing 2009.

He isn't cheering for more fallout. It's just that his young financial institution is in a much better position to grow by picking up those pieces.

The chairman, president and CEO of Tampa-based HomeBancorp Inc. finalized the purchase agreement of two Pinellas County branches from Houston-based Encore Bank, along with at least $50 million in deposits, earlier in June. The Belleair Bluffs branch was consolidated with an existing HomeBanc office right across the street, while the other in Clearwater became its seventh retail office.

“We like the idea of buying offices rather than banks,” says Campbell, who launched HomeBanc in 2007 after building Republic Bank in Ann Arbor, Mich., and selling it for $1.6 billion in 2006. HomeBanc was capitalized with $45 million in a public offering that attracted 150 subscribers.

HomeBanc now has reached at least $250 million in assets, growing 50% in the past year, and has five other retail offices around Florida — three in Tampa, near the Interstate 275/Dale Mabry Highway interchange, in Westchase and at Rocky Point; and one each in Lakewood Ranch and Lake Mary (near Orlando). Seven other loan production offices are located in Tampa, Brandon, Belleair Bluffs, Lakeland, Lake Mary, Lakeland, Gainesville and Bonita Springs.

'Hybrid' banking
The FDIC-member “hybrid” bank, as Campbell calls it, deals primarily in residential mortgages and business-to-business bank accounts, specializing in both Small Business Administration and Federal Housing Administration loans. The bank, which assigns officers to customers instead of having teller windows, turned its first profit in this year's first quarter, posting net income of $167,000 following a loss of $1.4 million a year earlier.

“We think we're making good progress,” says Campbell, who looks to build HomeBanc into a $500 million institution and eventually surpass $1 billion. “We like to take things in stride.”

All this is happening despite what Campbell terms as the worst banking crisis in his 45-year career. Florida has been hit hardest, with 14 bank failures last year and almost as many through the first half of this year, largely caused by the real estate bust.

“This is, in my mind, the worst of times,” he says. “We may lose some more good banks in Florida before this is done.”

However, HomeBanc avoided making any of the types of bad loans that are presently bogging down other banks' books, particularly commercial real estate loans, Campbell says. He sees good current value in Florida's housing market, noting that HomeBanc expects to make at least $30 million in home loans this month alone.

The bank is well protected against further surprises in Florida's housing market with a total risk-based capital ratio of just above 29%, which is triple the minimum sought by banking regulators.

“Those banks with capital can sustain themselves,” Campbell says, while those whose standing has eroded because of loan losses are now facing greater regulatory scrutiny.

Recycled name, offices
Sustainability may be a bit of a hallmark for HomeBanc, whose brand was recycled from a bankrupt Atlanta-based residential mortgage firm that built a strong presence in the Tampa Bay market during the past decade. Campbell secured rights to use the name, though the bank's current logo is distinctively different from the original.

Also, HomeBanc was able to take up prime office space for its headquarters in downtown Tampa, on the 41st floor of Bank of America Plaza, after the law firm that previously occupied it merged with another in the building. The bank signed a direct long-term lease on the space, which is just downstairs from the top-floor Tampa Club in one of the city's tallest towers.

Now with 150 employees, including 20 at its administrative offices, Campbell says HomeBanc is able to focus more on its internal operations, retaining good employees as well as customers. The company has a 10-point values statement aimed at making it a “great place” to work and bank, he says.

“It helps as a point of equilibrium in making decisions,” he says, which may include the bank's next potential acquisition. “We think we have the capital and the management to do that.”

HomeBanc also reaches out to business customers by offering them the chance to meet past and current sports stars.

It has professional golfer and Seminole resident Brittany Lincicome as its current spokeswoman. This past spring it hosted a private reception featuring retired Super Bowl quarterback Len Dawson.

Previous events featured CBS Sports football analyst Gary Danielson, baseball pitching great Robin Roberts and legendary football lineman Merlin Olsen, who achieved dual popularity as an actor in “Little House on the Prairie.” (Roberts and Olsen both died this past spring.)

Having maintained a residence in Clearwater for the last 25 years, Campbell says he has enough familiarity with the Florida's banking industry to know that it is still has a strong foundation for building a solid statewide franchise.

“We can't think of a better place to be in the country than Florida,” he says. “I think it will come back fine.”

HomeBanc's 10 values

Homebanc created a list of 10 values for its employees and customers.

• Surround yourself with good people and good things will happen.

• Recruit and retain talented and top-performing team planers and ensure they receive the training necessary to help them succeed.

• Create a culture of exceedomg customer expectations.

• Demonstrate uncompromising honesty and integrity.

• Create a workplace of high energy, resourcefulness and positive attitudes that also promote fun and pride.

• Establish a strong sense of entrepreneurship and motivation through recognition programs and pay-for-performance compensation that reward outstanding results.

• Embrace accountability and set indicators for success for tracking progress and measuring results.

• Seek to perform at a consistently high degree of excellence, and continue to find ways to develop and improve knowledge and skills needed for future success, including the sharing of best practices.

• Build strong relationships with customers by providing them with “wow” service, determining their needs by listening, assessing how to meet those needs and following through with superb service.

• Follow the Golden Rule, treating people as you would like to be treated.