Mike Ward calls Hillsboro Bank a plain vanilla lender, doing loans, deposits, CDs — the basics. He’s OK with that, serving businesses and residents in rural Plant City in east Hillsborough County. The bank was founded in the summer of 1998, and has grown into $190.3 million in assets.
Hillsboro’s vanilla vibe is on the cusp of getting a lot more flavor, given its recent announced merger with The Bank of Tampa. Announced March 18, the deal comes after a flurry of consolidations and mergers in banking, especially prior to the pandemic. The Bank of Tampa-Hillsboro Bank deal, signed off on by both boards, now awaits regulatory approvals. Bank officials declined to disclose financial terms of the deal, including book to value.
For Hillsboro Bank, the deal adds not only some spice to its services and products, by being under The Bank of Tampa, but is also an answer to a bigger problem: how to maintain its folksy, down-home culture without having to sell out to a credit union or larger out-of-state bank. “They are a larger version of us that can do a lot more things, offer different money management and other treasury services,” Ward says of The Bank of Tampa. Ward will remain with The Bank of Tampa as its Plant City market president, and will serve on the bank’s executive committee.
For Bank of Tampa, meanwhile, the deal is the first acquisition in the 37-year history of the $2.7 billion-asset bank. “We’ve been looking for a while to see what we can do as we come out of the pandemic,” The Bank of Tampa CEO Bill West says. “We’ve never bought a bank before and we wanted to buy (one) where we didn’t have to go into it and fix it.”
In addition, Hillsboro Bank, West says, is a solid financial performer in what he calls an attractive market. The bank, for example, made the S&P Global Market Intelligence Top 100 list of best-performing community banks nationwide in 2018. The list looks at metrics such as efficiency ratios, loan growth and loan quality. Hillsboro posted an 8% return on equity through the end of 2020, Federal Deposit Insurance Corp. data shows, making it one of the leaders among community banks in the region on that metric.
The Bank of Tampa has had a loan production office Plant City for several years, and had been talking with developers about possibly building a branch in town. “We love the Plant City market,” West says. “There are thousands of businesses there that fit right in our wheelhouse.”
With that strategy in mind, the history of the deal goes back long before the pandemic, to when Ward was part of team that launched Florida Traditions Bank, in 2007 in Dade City, Pasco County. The founders sought a loan in the early days to get going — and got one from The Bank of Tampa.
Ward and West stayed in touch over the years and in March 2020, right before the pandemic, they had plans to have lunch — with what a merger would look like on the menu. Those plans were tabled until December.
Merger discussions with The Bank of Tampa, in addition to solidifying an exit strategy for Hillsboro, were something of a reprieve for Ward. He says the bank’s niche and strong balance sheet, combined with already having a presence in one of Florida’s most populous counties, has been a magnet for potential suitors for three years. “We’ve had literally dozens of financial institutions make offers to buy us,” Ward says. “We’ve had a lot of people kick the tires. It wears you out.”
‘We’ve had literally dozens of financial institutions make offers to buy us. We’ve had a lot of people kick the tires and it wears you out.’ Mike Ward, Hillsboro Bank
Most of the suitors, he adds, seemed indifferent to Hillsboro Bank’s culture or history. “One was a credit union from New York,” Ward says, “and they couldn’t care less about Plant City, they couldn’t care less about our customers. They just wanted to get a foothold in Hillsborough County.”
Both Ward and West are excited about the possibilities now that The Bank of Tampa has that foothold. While 2020 — outside of PPP loans — wasn’t as solid as 2019 for many community banks in organic loan growth, West says the bank is poised for a strong run the rest of 2021. In addition to the Hillsboro Bank acquisition, the bank is working on expanding its presence in east Manatee County and Lakewood Ranch. It also plans to continue outperforming many of its peers, like Hillsboro Bank did for two decades. Says West: “We punch above our weight class.”