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Business Observer Friday, Jun. 16, 2017 1 year ago

Branch Out

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A Florida-centric community bank targeting $1 billion in assets is undaunted about seeking customers in places other banks traditionally avoid.
by: Mark Gordon Managing Editor

Dan Davis smiles slyly when he says, “I'm the kind of guy who doesn't shy away from hardships.”

The trim, fit 52-year-old banker was talking about his grueling 70-mile Saturday morning bike outings that loop Winter Park and the surrounding area.

But he could have just as easily meant his first week of work in fall 2014 at Maitland-based Axiom Bank. That's when the institution, then Urban Trust Bank, threw Davis right into it: the bank's board asked Davis to write a new business plan. The task included reorganizing the accounting department, crafting a short-term and long-term narrative to meet financial goals and evaluating acquisition targets.

“It's a daunting experience, even if you've been through it,” says Davis, then the bank's vice president and CFO. Davis had been through it in 2006, albeit on the de novo banking side, when he helped launch Level One Bank, outside Detroit.

Within three years, many aspects of Davis' business plan for Axiom have begun to come together. With $559.4 million in assets through March 31, Axiom is one of the largest community banks in Florida with a multimarket presence. Now it seeks to grow market share in three distinct Sunshine State regions: Jacksonville, Orlando and the Greater Tampa Bay area, which for Axiom, includes Bradenton and Sarasota.

The majority owner of the bank, for a brief period in the mid-2000s, was BET TV founder Robert Johnson. Founded in 1963 as Metro Savings Bank, the current majority owner is Frank Hanna Jr., an Atlanta-based real estate investor, entrepreneur and philanthropist. Its board includes longtime Walt Disney Co. executive Robert Billingslea, now retired; former Florida Secretary of State and Orlando Mayor Glenda Hood, a Republican; and former Axiom CEO Angelo Palombi. Hood is chairwoman of the board.

Axiom's model is currently tied directly to Walmart, where the bulk of its branches are located and where it gets a chunk of its deposits. The Walmart branches are smaller than traditional offices, but the target customer — people Axiom officials consider underbanked by demographics — constantly walks past the wide-open front door. Says Davis: “Our goal is to make people's financial lives easier.”

Hitting $1 billion in assets in three to five years, through a combination of potential acquisitions and organic growth, is a good stretch goal for Axiom, says Davis. That includes expanding its so-far small non-Walmart branch network.

“You have a barbell effect of small community banks in many places in Florida and then you have large big banks,” says Davis, named Axiom CEO in 2016. “And in the middle there is a void we believe we can fill with retail and commercial banking.”

'Full suite'


On the commercial side, Axiom launched a business-lending unit last year. First the bank recruited Jerry Allen, who had been a star executive at St. Petersburg-based C1 Bank, where he was chief credit officer. In that role, Allen oversaw a department of 34 lenders who handled more than $1 billion in loans in 2014 and 2015. (Little Rock, Ark.-based Bank of the Ozarks acquired C1 last year in a $402 million deal.)

Based out of Axiom's suburban Orlando headquarters, Allen has since brought on a trio of commercial lenders, who work of out a new Axiom office in Tampa. The team includes Amy Hammer, who specializes in SBA loans; Scott Amatuccio, with experience in underwriting medium-to-large loans for owner-occupied commercial real estate and investment properties; and Sam Haddouch, who handles a variety of commercial loans.

The Axiom commercial unit has since built up a $170 million loan portfolio. Clients include owner-occupied buildings, commercial and industrial tenants and construction and development projects. “We have a full suite of products that rival any of the larger banks,” says Allen.

Allen says the commercial unit doesn't necessarily chase down business by market type, industry or asset class. Like other banks its size, Axiom's comfort zone is owner-occupied and real estate development loans, but it will work in just about any area.

And like Allen, Hammer and Amatuccio are formerly with C1. So it follows that the Axiom lending attitude is nimble and entrepreneurial and relationship over transactional, since that keyed C1's rapid rise. “If you are able to think like an entrepreneur,” Allen says, “you can really flourish here.”

Other services


In some ways, Axiom is a throwback — emphasizing a branch network and person-to-person banking in a world of online and mobile finance.

The bulk of Axiom's branches, 22 out of 23, are inside Walmart stores in the Orlando and Tampa markets. Two of the newest ones are in Hillsborough County, on Bruce B. Downs Boulevard in Tampa, and in Plant City. Those locations opened in May. “Banks still need to have branches to sell their brand,” says Davis.

The Walmart model dates back to Urban Trust Bank, which long focused on providing financial services to underbanked regions and markets. In 2009, Urban Trust bought seven Walmart branches from Atlanta-based SunTrust, which was exiting that niche model. Most of those were on the west coast of Florida.

Davis says the Walmart advantage is easily observable in the high foot traffic. “Potential customers walk right into us hourly,” says Davis. Another advantage: Having a branch inside a Walmart, typically about 500 square feet, costs around $250,000, Axiom executives say. That's about 75% less expensive than building a traditional standalone branch, adds Davis.

But while important, Davis doesn't want Walmart to define Axiom. “Walmart has been a terrific low-cost delivery for us,” says Davis, “but we want to diversify our funding sources.”

That's why Axiom also plans to expand its traditional branch network. The one branch it has now is in Orlando. A second branch is scheduled to open in Winter Garden this fall, and the bank is scouting the Tampa area for non-Walmart locations.

Axiom is also preparing to release a checkless checking account, a move partially designed to attract another underbanked demographic: millennials. The service is called AxiomGo, a mobile banking platform that includes a debit card. Bank officials say the service expedites access to a customer's money and makes banking more affordable by eliminating fees and add-ons. “I can't tell you the last time I wrote a check,” says Davis. “The days of your father writing checks at the dining room table are over.”

Davis got started in his financial career after he graduated from St. Louis University in 1983, when he took an auditor position at KPMG in St. Louis. (Being a serious-minded numbers guy, Davis turned down another job opportunity, to work at a ski resort in Steamboat Springs, Colo.) He later moved on to Fifth Third Bank, in its Detroit office, where he was CFO. After more than a decade in the Midwest, Davis relocated to Florida, where he helped run community banks in Sanford and New Smyrna Beach.

Now at Axiom, Davis says the bank's biggest challenge is marketing and branding — not the high cost of regulations, like it is at some other community banks.

“We need to get the word out and find customers who need to be financially rescued by us,” Davis says. “We want to be a high performance bank with a long-term view of how we want to grow.”

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