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Once arrived, the Cuban exile set his mind on buying his own bank. He and a group of mostly Latin investors bought Alliance National Bank, a struggling community bank with about $16 million in assets. Masferrer renamed it Hamilton Bank, because he liked the patriotic overtones, and focused his little bank on a new niche: trade finance.
The results have been impressive. As Miami's trade with Latin America has grown, so has Hamilton Bank. Today, the bank has $633 million in assets and $34.5 million in capital. Hamilton finances about $1.5 billion worth of trade annually, mostly through letters of credit, and earned a 1995 profit of $8.1 million. Its five-year return on equity (ROE) is 30%, compared to an average of 13% for Florida banks.
For the first quarter of this year, Hamilton posted net income of about $2.5 million. Masferrer expects assets to top $1 billion by 1998. "The level of trade just keeps growing, and we see great opportunities worldwide," he says. Indeed, Hamilton is one of the few survivors of the consolidation that swept banking in recent years. "It's one of the few good banking stories we've got left in Florida," says Kenneth H. Thomas, an independent banking analyst in Miami.
Masferrer says he saw an opportunity in trade finance because after the Latin debt crisis of 1982 most U.S. banks stopped doing business with Latin America. And by the late 1980s, most of the foreign-owned Edge Act banks on Brickell Ave. were simply collecting flight capital. "There was a hell of a vacuum," Masferrer says. (The Edge Act permits foreign banks to open U.S. offices to serve home country customers.)
He personally wooed customers like Supreme International, a Miami-based clothing manufacturer. Supreme's chief executive, George Feldenkreis, says Masferrer took interest in Supreme when other banks were leery. "When you are banking small companies, you are banking character as much as collateral," says Feldenkreis. "We found Masferrer to be a very good judge of character. He was not afraid to commit to us when he saw what the potential of the business was."
Since 1992, Supreme's sales have grown from $33 million to $121 million. That growth has meant more business for Hamilton: Supreme manufactures most of its clothes in Asia, and Hamilton writes letters of credit to Supreme's overseas suppliers guaranteeing payment for products.
Earlier this year, Masferrer made his first foray outside Miami, when Hamilton bought bank branches in Tampa and Winter Haven from the Resolution Trust Corp. The bank recently made its first loan in Central Florida: $800,000 to W.J. Roe of Winter Haven, a citrus grower.
"We should be in locations where goods are going to be produced for export," Masferrer says. "The goods produced for export in Florida come from the northern part of the state, and we think nobody is servicing them." Masferrer hopes either to buy more existing branches or to make alliances with community banks that have exporting customers but don't have trade financing expertise. Masferrer, 46, is an experienced banker but not a stereotypical one. He began his career 25 years ago with Bank of America and later worked at Panama's Consortium Bank. A chain smoker, he's given to self-deprecating humor. And he's adorned the walls of his spacious office near the Doral Country Club with paintings depicting scenes from his favorite sport: cock fighting (which is illegal in the U.S.).
Despite Hamilton's track record, Masferrer says he's encountered some reluctance from businesses outside Miami to do business with a bank that is foreign-owned and run by Hispanics. "Even though the name is very nice, we're Hispanic," he says. "It takes a while to earn the trust of people in the northern part of the state."
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Miami Data Bank
For Latin Stocks?
On July 1, the Florida Department of Commerce shuts its doors, giving way to two public-private economic development partnerships, Enterprise Florida and the Florida Tourism Commission. After a short transition period, Commerce Secretary Charles Dusseau will find himself out of a job. But Dusseau, a Democrat who may run for mayor of Dade County in the fall, will keep working on one idea he developed at Commerce. He hopes to help establish Cyperport Miami Inc., an information depository fed by Latin stock exchanges.
The Miami-based data bank would gather information on public companies from Latin stock exchanges, then resell it to financial information services like Bloomberg, Telerate and Reuters, which disseminate news and trading data 24 hours a day through electronic terminals installed around the world. Dusseau envisions Cyberport ultimately being owned and governed by the Latin stock exchanges themselves.
Currently, there is very little readily available information on most small and mid-sized Latin American companies. "The majority of these exchanges do not have access to worldwide investors," Dusseau says. "This is holding back their development and leading to a shortage of the long-term capital needed to develop infrastructure."
The biggest Latin companies are traded on the New York Stock Exchange, and they tend to receive the most investor attention. Their smaller brethren, Dusseau says, receive very little attention. This helps to make Latin stock exchanges illiquid.
So far, Dusseau says he's discussed the Cyberport concept with the leadership of the stock exchanges in Mexico, Chile, Brazil, Peru and Argentina and received enthusiastic responses.
The next step is a feasibility study, to be conducted by the University of Miami's North-South Center; the center's director, Ambler H. Moss Jr., says the study should be completed by late summer. Dusseau has been encouraged by the Inter-American Development Bank (IDB) to apply to the IDB and the World Bank for start-up funding if the feasibility study shows that Cyberport is viable. Carlos Loumiet, head of the international practice of Miami law firm Greenberg Traurig and the lawyer for Cyberport, says U.S.-based financial information services such as Bloomberg carry news on the biggest Latin companies, but not much more. The result is that very little U.S. money is flowing into smaller Latin American ventures, Loumiet says.
Loumiet says Cyberport, as a computer information service, probably would not directly generate jobs in Miami, but might create ancillary jobs such as financial analysts who would evaluate the information.
More importantly, he says, Cyberport could boost Latin America's capital markets. "I really do believe that for Latin America to take the next step forward economically, the capital markets there have to thrive," Loumiet says. He adds, "What is good for Latin America is good for Miami."
As for a grandiose plan being floated to start a full-fledged Latin stock exchange in Miami, Loumiet is skeptical. The biggest Latin companies already trade on the New York Stock Exchange. Plus, old-fashioned stock exchanges with trading floors are losing ground to electronic exchanges such as Nasdaq. What's more important than a place to make trades, Loumiet argues, is a place to get information.
Dusseau hopes Cyberport is gathering and selling financial information and news reports by the end of 1997.
