Community bank readies itself for surge in business

For most community banks on Florida’s west coast, the theme of 2020 is protecting paychecks. Not necessarily of their own employees but for hundreds of businesses that sought federal Payment Protection Program loans.

Sanibel Captiva Community Bank, with a headquarters on Sanibel, a Lee County barrier island popular with tourists and seasonal residents, did a fair share of PPP loans: some 750 loans worth about $70 million. “That’s a lot for a little bank like ours,” Sanibel Captiva President and CEO Craig Albert says, noting about 30% of the bank’s 100 employees worked nights and weekend to stay ahead of the PPP deluge. “I told our employees we need to be the best bank in the country at this. We have to take care of our customers.”

Now, as the bank, founded in 2003, looks toward the fourth quarter, its story moves to another chapter — one Albert expects to be as potentially lucrative as PPP, albeit not as hectic. A big reason for that is about 65% of the bank’s loan portfolio, nearly $384 million, is residential mortgages, and that sector of Southwest Florida is on a tear. “We are as busy or busier in that area as we’ve ever been,” Albert says.

The bank, with $566.4 million in assets through June 30, up 22.6% year-over-year, has several other growth points Albert believes position it well to have a solid run — with one caveat. “I’m very bullish on 2021,” he says. “All the factors look pretty good. That could change if something really bad happens with COVID-19.”

In addition to the hot housing market, one factor Albert is counting on to boost the bank is its eighth, and newest, location. At the corner of College Parkway and McGregor Boulevard, it opened in late July, and at 16,000 square feet it’s the largest branch the bank operates. The bank paid $1.6 million for the building and invested another $3.4 million into renovations.

The branch unveils another side to Sanibel Captiva’s strategy: opportunistic growth with a community-minded tint. The College Parkway branch, for example, was a former First American Bank office that sat vacant for at least a decade. Moving there left Sanibel Captiva with unused space, at a separate building down the street. The bank gifted that space, about 2,500 square feet, to the Southwest Florida Symphony. Sanibel Captiva will charge the symphony, a nonprofit, $1 a year for the lease. (Sanibel Captiva CFO David Hall is president of the Southwest Florida Symphony Endowment Foundation.)

The College Parkway branch follows a pair of deals the bank made in early 2020, when it bought a former SunTrust Bank office on Periwinkle Way on Sanibel for its new headquarters. It paid $1.8 million for the SunTrust building and then sold its old headquarters, on Library Way, to the City of Sanibel for $1.89 million. The city is turning the former headquarters into into a senior center, while the bank will spend about $1 million on renovations of the former SunTrust branch. 

The location changes and subsequent larger footprint and bandwidth it provides are an important backdrop for another factor in the bank’s growth potential, with it adding multiple new customers from PPP loans. Like most other community banks, Sanibel Captiva worked with current clients first on PPP loans, then helped other customers. “We picked up quite a few accounts,” Albert says. “Some people were totally shut down by the bigger banks and were frustrated.”

‘I told our employees we need to be the best bank in the country at [PPP loans]. We have to take care of our customers.’ Craig Albert, Sanibel Capitva Community Bank 

Several challenges loom over the bank’s growth goals, one pandemic related, one not. On the former, the bank has authorized 90-day loan deferrals on $175 million in loans, Albert says, about 37% of the total loan portfolio. Approved by federal regulators, those deferrals are mostly from hospitality, hotel and tourism-related clients on Sanibel impacted by the pandemic. Although Albert says many of those clients are “hanging in there,” the line to more deferrals — or worse, defaults — is thin in the coronavirus era.

Albert is also focused on a challenge that goes beyond COVID-19: keeping up with rapid technology-based advancements disrupting banking. Sanibel Captiva provides customers many of the big bank tech offerings, such as online bill pay, digital payments network Zelle and Positive Pay, an automated cash-management service designed to deter check fraud. “We have to be able to deliver the kinds of technology the bigger banks have,” Albert says, “and that our clients demand.”