It's been 10 years since Texas businessman Donald Adam invested $100 million of his own money — the largest community bank capitalization in state history — toward one wild and crazy goal: to build what he called Florida's bank.
That institution, American Momentum Bank, is closing in on its original goal. It has more than $1 billion in assets and 15 branches in Florida, from Winter Garden through Naples, with a concentration on the west coast of the state. In the earlier part of this decade it grew partially by acquiring failed or troubled banks. More recently the bank has found growth organically and in new niche markets.
Also significant: American Momentum is well capitalized with a relatively clean balance sheet, particularly for its billion-dollar size. For example, it had a total risk-based capital ratio of $206.6 million, or 19.45%, through Dec. 31, according to Federal Deposit Insurance Corp. data. That's $100 million more than what federal regulators consider well capitalized.
The bank also shaved $7 million off its other real estate owned portfolio of underperforming loans in 2016, from $25.3 million in 2015 to $18 million. (One blip: noncurrent loans and leases went in reverse last year, according to FDIC data, from $2.3 million in 2015 to $6 million in 2016.
American Momentum executives say that's primarily due to a single-family loan it purchased from the FDIC in connection with a failed bank acquisition. The loan was purchased at a substantial discount, bank officials say in an email response to questions, and it “doesn't anticipate a loss on the ultimate disposition of loan.”)
Taken in total, Smith says the bank, chartered officially in Texas with corporate operations run out of Tampa, has “tons of room for growth.” Bucking a recent trend of industry consolidation, bank executives also say the goal isn't to hit an asset target and then cash out.
“There's no plan for 'let's build this thing and sell it,'” Smith says. “It's just 'let's build this thing.'”
One key to the build strategy is a push into association banking accounts, such as homeowners and condo associations and property management companies. The niche market is worth nearly $8 billion in deposits, says Mike Collins, Florida market president for American Momentum. The bank is also re-establishing itself in SBA lending.
Collins joined American Momentum in 2014, recruited to run the state operations. Like early American Momentum executive Sam Davis and several others at the bank, Collins got his start in the industry at Barnett Bank. He was CEO of Barnett's Southwest Florida unit, based in Sarasota, when Bank of America bought the company. Collins later ran CNLBancshares, where he oversaw markets in Naples, Fort Myers, Jacksonville, Orlando and Fort Lauderdale. From 2001 to 2012 Collins helped lead the bank from $100 million in assets to $1.5 billion. (Davis retired in 2013.)
Seeking an aggressive entry in condo association accounts, Collins hired away Heather Karamitsos, a statewide leader in the sector who he worked with at CNLBancshares. Karamitsos, with more than 20 years in association banking, was named senior vice president, director of association banking at American Momentum last year. “Recruiting the right talent was a critical factor in creating this new division,” Collins says.
Karamitsos built the association business at CNL to $500 million in deposits. With new advances in online accounting and other technology, Karamitsos has bigger goals at American Momentum: to reach $250 million in no more than four years and $1 billion in deposits within seven to 10 years.
American Momentum offers association banking in all its markets: Tampa Bay, Central Florida, Southwest Florida and Bryan/College Station, Texas.
“The key to success in this business is that you have to use the latest and greatest technology,” Karamitsos says. “We outsource with the best of the best vendors.”
When Karamitsos got started, she worked with small associations on Florida's east coast. She has since gravitated toward targeting large property management companies for business. That will hold true at American Momentum. Says Karamitsos: “We are going after the big fish.”
Not many banks in the region have large books of business in association banking — mostly because of the expertise and technology required to do it right. “I've seen a lot of banks dip their toe in the water and not go all the way in,” says Karamitsos. “I was cautious about who I work for.”
With an eye on SBA loans, Collins also recruited Patrick Fenech to American Momentum. Fenech had been in banking for 25 years, mostly in SBA loans, when he left to run a manufacturing company in the Midwest with 200 employees and $10 million a year in sales. Says Fenech, now senior vice president in charge of SBA loans American Momentum: “It was at that time I realized how important lending is to a small business.”
That's also why Fenech says he's a “business advocate, not a banker with a set sales agenda. I am not looking to sell anyone anything. I go into every meeting with the intent to listen (and) truly understand what is most important to the decision makers.”
Fenech previously worked at one of the leading small business lenders in the region, when he oversaw the SBA program at C1 Bank from 2011 to 2014. He mentored under C1 founder Bill Sedgeman and other leaders there, at what was formerly Community Bank of Manatee. The team was so good, says Fenech, he has since hired eight C1 colleagues at American Momentum. Little Rock, Ark.-based Bank of the Ozarks acaqired C1 for $402.5 million last year. “We are putting the band back together,” Fenech says.
Part of the C1 success, says Fenech, stems from the bank's quirky culture that eschewed traditional banking workplace standards. That includes problem-solving groups of employees who emphasize answers over bureaucracy. Fenech, hired last year, says American Momentum has a similar vibe. It's the kind of place, he adds, where executives put their cell phone numbers on their business cards — not a 1-800 number.
“A lot of banks have silos,” says Fenech. “We don't have those here. It's a very liberating place to work.”
That kind of model is reminiscent of Barnett Bank — one of the most famed brands ever in Florida banking. Adam, whose $100 million investment launched American Momentum a decade ago, acknowledges Barnett was on his mind back then.
“I'd always followed Barnett Bank,” Adam told the Business Observer in 2007. “I enjoyed the personal service and Florida roots. I thought they did a marvelous job. One of the things I wanted to do was try to replicate the business model. I felt the key to that was to associate with as many former Barnett alumni as I possibly could.”
Adam, who remains American Momentum's CEO and chairman, made his first banking fortune in Texas in the late 1980s. He acquired 11 failed financial institutions during the savings and loan crisis, and he recapitalized and rebuilt the entire portfolio. In March 2005 he sold the bank to Citigroup for more than $1 billion. That gave him the capital to start again.
American Momentum stalled a bit during the downturn, when quality loan opportunities were scarce. In July 2011, when the bank had $664.3 million in assets, it acquired two banks shuttered by regulators due to capital issues: Sarasota-based LandMark Bank of Florida and Apollo Beach-based SouthShore Community Bank. American Momentum has made other acquisitions, including College Station, Texas-based Brazos Valley Bank, a $127 million bank it purchased in May 2011.
The core challenges American Momentum faces looking ahead, say several executives, are similar to what most other banks grapple with: Hiring top people and navigating the complicated web of industry regulations.
Smith, the Tampa market president, who has been with American Momentum since 2013, says the challenges are easier to attack with the bank's focus and culture at the forefront. Says Smith: “We really believe this is a place we can end our careers.”