Lends on the Mends

The data are good in asset growth for Gulf Coast banks, but a relic from recession days gone by lurks at the bottom of the report.

To the good, the 45 banks headquartered in the region, from Pasco to Collier counties, reported an 8.8% increase in total assets in the second quarter compared with the second quarter last year. That's a year-over-year jump from $23.15 billion in assets in 2012 to $25.19 billion in 2013. That growth, moreover, follows a trend from the first quarter, when assets for all banks region-wide increased 11% over 2012.

A bank's assets are, for the most part, its loan portfolio, so the growth track could be equated to general improvement in the regional economy. And an increase in loans is an affirmative answer to a question many bankers get peppered with daily: Are you lending?

Even more positive news: Three local banks posted year-over-year asset gains of more than 30%, while 10 lenders were up at least 10%. The gainers span the region, and include Naples-based First National Bank of the Gulf Coast, up 32.5%; Sarasota-based Gateway Bank of Southwest Florida, up 13.2%; and Clearwater-based USAmeribank, up 15.2% (see table below for a sampling of best and worst performers in assets).

USAmeriBank is on a particularly good roll. The bank's net income more than doubled in the second quarter, from $5.01 million in 2012 to $10.41 million in 2013, according to Federal Deposit Insurance Corp. data. The bank's parent firm, USAmeriBancorp Inc., which also owns Alabama-based Aliant Bank, has also improved its credit quality: The institution's ratio of non-performing assets was 1.73% through the second quarter, down from 2.42% the previous year.

USAmeriBank CEO Joseph Chillura attributes the growth to a variety of factors, from a local market rebound to a diverse customer base that includes real estate and commercial and industrial loans. “Things are going really well for us,” says Chillura. “We are reaping the benefits of a stronger economy. We feel good about our business plan, which is to grow organically.”

Gateway Bank President and CEO Shaun Merriman, in an email response to questions, says Gateway's asset growth is “attributable to deploying our deposits in the form of increasing loan volume and investments in approved securities.”

Merriman expects the growth track to continue at Gateway, one of seven banks in Florida with zero non-performing assets. “The market is gaining strength, but the recovery remains somewhat fragile,” says Merriman. “Lending opportunities are growing, opportunities in investment securities have nearly vanished.”

Still, some other Gulf Coast banks reported drops in total assets in the second quarter. In fact, one-third, 15 of all 45 local banks, were down in that metric and five lenders posted decreases of at least 10%. The one with the biggest fall, Tampa-based Bay Cities Bank, fell 19.9%, from $626 million in assets in the 2012 second quarter to $501.2 million in the most recent second quarter. Bay Cities President and CEO Gregory Bryant did not return several calls for comment.

Another lender that posted an asset drop in the quarter was Tampa-based Pilot Bank, which was down 12%, from $217 million in 2012 to $190.9 million this past quarter. Pilot President and CEO Roy Hellwege, however, says the figures are skewed somewhat, and the asset decrease should be a temporary issue. He says that's because the bank, like many others in the region, sold securities and bonds to the Federal Reserve last year, which tweaked the figures.

“It's really a cash management issue,” says Hellwege, “as opposed to a contraction at the bank.”

Sarasota-based Bank of Commerce CEO Charlie Murphy, whose institution posted a 13.5% year-over-year asset decrease, says the bank continues to prioritize the elimination of non-performing assets over asset growth. “Once we rid ourselves of the non-performing assets,” says Murphy, “it will be a shot in the arm.”