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Who says banks aren't making loans?
Banks headquartered on the Gulf Coast from Pasco to Collier counties posted an 11% increase in total assets in the first quarter compared with the same quarter one year ago. Loans make up a majority of a bank's assets, suggesting borrowers are taking on debt as the economy improves.
“We have the capital to grow,” says Gary Tice, chairman and CEO of First National Bank of the Gulf Coast. In 2011, the Naples-based bank secured a commitment of $148 million in capital from institutional investors and it acquired $54 million in loans from Royal Palm Bank of Florida last year after state regulators shut down the struggling Naples bank.
First National Bank posted a 39.8% increase in total assets in the first quarter, the biggest percentage increase of any bank in the region compared with the first quarter of 2012.
Tice says the bank is making inroads in large so-called “jumbo” residential loans. “That's where we've had a lot of success because most of the borrowers are looking for someone who can close in 30 days,” Tice says.
Commercial borrowers are taking more debt to expand their businesses, too. “I believe they see the economy turning and they'll take on a little more risk,” says Tice.
“We saw a lot of solid loan activity in every one of our lines of business,” says Joseph Chillura, the CEO of USAmeribank in Largo. The bank's lines of lending business include commercial and industrial, small business, professional services and commercial real estate.
USAmeribank saw its total assets grow nearly 21% in the first quarter compared with the first quarter of 2012. It is now the second-largest bank on the Gulf Coast from Tampa to Naples based on assets, behind Raymond James Bank in St. Petersburg (Raymond James Bank President and CEO Steve Raney was not available to discuss the bank's performance, a spokeswoman says.)
Acquisitions also played a part in the growth of other banks. For example, Encore Bank acquired two branches in north Naples and Bonita Springs from Iowa-based Liberty Bank. “That acquisition was about $75 million in assets,” says Tom Ray, CEO and president of Encore, whose charter is listed in Port Charlotte but headquartered in Naples.
In some cases, the loan growth in the first quarter isn't a result of a big increase in new loans. “Our loan volume is equal year over year,” says Shaun Merriman, president and CEO of Gateway Bank of Southwest Florida, whose bank posted a 23.8% increase in asset growth. “What's changed is that we're not experiencing the payoffs that we had in the previous year.”
Small community banks are seeing growth in lending, too. “The mortgage business has been very good and very strong in the first quarter,” says Colleen Kvetko, president and CEO of Shamrock Bank of Florida in Naples.
Shamrock's assets grew 17% in the first quarter compared with the same quarter one year ago. It reported nearly $112 million in assets in the first quarter and Kvetko says real estate transactions continue apace in Collier County. “Our mortgage volume will continue through the summer,” says Kvetko, who is looking to hire more mortgage-loan lending officers.
Some banks are shedding assets, but for the right reasons. For example, Bay Cities Bank's total assets declined 15% in the first quarter to $534 million compared with the first quarter of 2012.
The decline in assets at Tampa-based Bay Cities Bank is because the bank is getting rid of bad loans and it exited a line of business in payroll-payment processing. Meanwhile, the bank is closing new loans at a faster pace. “We've closed year-to-date probably $40 million in loans,” says Gregory Bryant, president and CEO of Bay Cities. “We're finally seeing meaningful loan growth.”
While the economy is improving, some bankers say loan demand isn't as strong as they'd like it to be at this stage in the recovery. Loan growth is weaker in some geographic areas, such as Pinellas County.
“Loan demand has been an issue,” says Frank Burke, president and CEO of Flagship Community Bank in Clearwater, which lends to small businesses for equipment and commercial real estate. While profits rose, the bank's assets shrank 7% in the first quarter.
Some banks continue to struggle with bad loans and they're shedding assets while still losing money. For example, Florida Bank's assets dropped 18% in the first quarter compared with the same quarter one year ago. The bank's officers did not respond to requests for comment.
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