Ten-Digit Territory

REVIEW SUMMARY
Industry. Banking
Trend. As the number of community banks gets smaller, some are in a better position to grow their way out of the recession.
Key. A disciplined and experienced approach to expansion.

For many years, the Gulf Coast region has had only one locally based community bank with assets counted in the billions of dollars.

Now there are two in that 10-digit territory, with a possible third looming.

Clearwater-based USAmeriBank has taken just four years to reach $1 billion in assets through the first quarter. It posted a 23.6% gain over the past year, including 7% since the end of 2010.

The bank reached the milestone in mid-February and now touts itself as “One Billion Strong” in its marketing materials.

With seven branches in Hillsborough and Pinellas counties, USAmeriBank attributes its growth to making loans to established businesses. It claims to be the third-largest among 140 U.S. banks formed over the past four years, as well as the third most-profitable.

It now ranks second-largest on the Gulf Coast, topped only by St. Petersburg-based Raymond James Bank, with $7.6 billion in assets.

Joe Chillura, CEO of USAmeriBank, says the new distinction instills confidence in prospective business clients such as local professionals, small business owners and investors. It better positions the bank for additional growth.

“It's definitely a great milestone to achieve, but we're just getting started,” Chillura says. “There are lots of opportunities for us to grow responsibly, and that's what we're going to do.”

Reaching $1 billion in such a short time should be no surprise considering the way USAmeriBank was established from the start.

The bank brought together several seasoned veterans. That included Chillura, whose career spans 23 years and includes past experience as chief operating officer of Tampa-based Manufacturers Bank prior to its 2001 acquisition by Colonial Bank (now part of BB&T).

“Even though we're a young bank, we have a very experienced leadership team with an incredible understanding of our market,” Chillura says. “We have really positioned the bank from the very beginning to be a billion-dollar organization and then some.”

Furthermore, he says the billion-dollar distinction allows USAmeriBank to seek business against much-larger regional and national players in the Tampa Bay market.

“Now we compete with the big dogs,” he says. “They used to wonder who we are, and now they know.”

Movin' on up
Both of the region's billion-dollar banks may get more company soon. The Bank of Tampa, established in 1984 with nine offices citywide and an additional branch planned in St. Petersburg, is edging closer to the milestone, having reached $986.8 million through the first quarter ended March 31.

“It took us 27 years because we were very particular about how we wanted to do it,” says Bill West, Bank of Tampa president. “Our goal was not to see how big we could get.”

West says hitting the milestone takes a bank to a higher level of compliance with new federal regulations — particularly the Dodd-Frank Wall Street Reform and Consumer Protection Act signed by President Barack Obama last July in the wake of bank bailouts — but is likely to be transparent to customers. He says the bank is now looking more closely at how it manages risk at the higher level, but not much else will change in regard to deposit and loan relationships.

Staying local
Reaching the $1 billion mark doesn't necessarily take an institution beyond community bank status, banking experts note.

That's more a matter of serving the community in which the bank is based, rather than reaching beyond a region to branch out.

“You can be a billion-dollar bank and still be a community bank as long as you're locally focused,” says Ken Thomas, a Miami-based bank consultant and economist. “The question is whether you decide to go outside the community. As soon as you start getting outside your comfort zone, you start to get into trouble.”

Growing bigger is actually a good thing in the age of increased compliance for banks, Thomas says. Being well-capitalized also makes a bank more of a buyer of lesser banks than an attractive target for acquisition by a super-regional player.

Along that same line, he says, banks in a position to buy are more interested in how much market share a bank holds in a particular community than how scattershot its branch network is.

“It's better to have 5% market share in one county than it is to have 1% each in five counties,” says Thomas, who often consults on bank acquisitions. “We pay for market share, we don't care how it looks on a map.”

Florida has a total of 26 banks and thrifts with more than $1 billion in assets, among 676 nationwide, according to FDIC data.

But Thomas points out that many, if not most, are owned by out-of-state or foreign interests yet are still chartered as Florida banks.

The number of community banks on the Gulf Coast shrunk to 59 through the first quarter, from 70 a year earlier. At the end of 2010, there were 63 community banks.
Thomas says that trend is likely to continue with ongoing mergers and failures amid Florida's real estate-heavy economy.

“We will continue to see more shrinkage, unfortunately,” he says, noting that there are 242 community banks still in business statewide.

He adds that Florida is one of only a few states with more than 200 banks, so “we probably had more than we needed.”

Thomas adds that Florida community banks overall are improving performance, though they may take a while to return to their 2006 peak.

He points out that banking tends to lag the recession in terms of recovery.

“We will begin to see good recovery next year,” he says. “Hopefully we will see a return to stabilization, but we're not there yet.”