Pasco County bank expands but also stays local

First National Bank of Pasco is determined to stay small(ish) and nimble, but also accessible and modern.

It's not easy. The banking industry is a big game of Pac-Man of late, where many things get swallowed up.That's especially true for community banks without scale, which have been disappearing from the marketplace for a decade or more. 

The challenge for the Dade City-based federally chartered bank — the last in Pasco County, FNB officials say — is a national market where banks gobble each other up, rename themselves or simply absorb the smaller bank into the larger one.

Such mergers can change the character of the bank, and can often lead to layoffs. That turns the board of FNB off.

The bank has five offices: Its headquarters in Dade City, two in Zephyrhills, one in Lutz and the newest one along Kennedy Boulevard in Tampa, opened in late 2020 — all as FNB eyes a larger swath of Tampa Bay market share.

While an acquisition to a larger bank didn't interest the bank, FNB leaders thought they had the right answer in being bought by a payment processing company. That would help the bank advance in fast-growing fintech sectors. But that agreement fell apart because economic conditions couldn't make the numbers work, says Mike Mashke, FNB's chief revenue officer and a senior executive vice president. 

The deal was also designed to keep the bank's community character and employees intact, says Mashke, noting bank mergers often see a large share of employees get laid off.

"We had a lot of interest from a lot of banks to acquire us," says Mashke. "But we'd lose a lot of people. Our board wanted to keep it local."

The deal was announced in January 2022, and involved Fadi Cheikha, CEO of U.S. Alliance Group, a payment processing giant. But by the end of the year, the agreement expired. Mashke says Cheikha is a friend, and he instead took a board seat and remains a shareholder.

Other changes have rippled through FNB. When CEO Steve Hickman resigned earlier this year, a wave of realignment hit the bank, with more than $300 million in total assets in assets. First, in April, former COO Jim Esry was named the new CEO. 

Then, on June 30, a group of FNB employees equivalent to the offensive and defensive starters in a football game — 22 people in total — were promoted. Positions included senior vice president and assistant vice president. The wave of promotions, nearly half of the bank's 55 employees moved up, is a sign the bank is taking Hickman's retirement as an opportunity to grow — not to shrink staff and size. 

Founded in 1986, the bank's ambitions are to offer lending services to commercial businesses; to soak up medical cannabis dollars; and to grow in general. That is reflected in its slogan: "‘The Official Bank of the American Dream."

"For a bank that wasn't doing commercial lending, we've more than tripled the (commercial lending) portfolio," says Mashke.

Mashke says most of their lending portfolio in 2015 — $51 million — was mobile homes. Now that mobile-home paper has dropped to $10 million, while other commercial real estate has helped swell the bank's lending portfolio to $182 million.

Typically, banks make most of their money off interest from loans. FNB is looking for opportunities beyond loan-interest income. And to further modernize, Mashke says fintechs have helped with that growth. FNB works with such financial tech companies to transfer money between internet or app users.

And then there's the growing Florida business of legal cannabis. "We've been supporting that business since 2017," says Mashke.

Mashke says while many bigger bank chains shy away from marijuana business, mostly out of fear of the federal government, the risk is in fact not there for Florida banks dealing with legal sellers of medical marijuana, which Sunshine State voters legally approved.

FNB has also worked to adapt to how customers access banking, which Mashke says has changed in the 21st century, pointing to smartphone apps like Venmo, and to ubiquitous ATMs. More U.S. banking and even commercial customers use apps and ATMs for both deposits and withdrawals, so FNB recently joined Allpoint Network, a system of 55,000 surcharge-free ATMs.

The point is to make the old ways a thing of the past.

"Remember the days when you would have to stand in line to cash a check?" Mashke says, marveling at the changes.

Correction: This article has been updated to clarify that Steve Hickman resigned earlier this year.