September 21, 2014

The Money Issue - Banking: Overachievers

Well-Heeled

Not all banks in Florida are in trouble. Below is a sampler of banks that have high equity-to-asset ratios — and different growth strategies.

Mike Vogel | 10/1/2012

Centennial Bank
‘Florida’s Back’

Arkansas banker John Allison bought Marine Bank in the Florida Keys in 1993. Aside from a second home in the Keys, to which he plans to retire, that was the extent of his Florida investment until the Great Recession. Allison looked over the gloomy Florida banking landscape and was reminded of investing in Texas banks during the oil bust. “It was kind of déjà vu,” Allison says.

His publicly held holding company, Home BancShares, owner of Centennial Bank, has bought six failed Florida banks and done two market transactions: Premier Bank in Tallahassee and Vision Bank’s 17 locations in Alabama and the Panhandle and $354 million in performing loans.

Home BancShares earned $30 million in the first half, up from $24.9 million in the year-earlier period.

Lately, Allison has been steering clear of FDIC deals — too many investor groups are competing for too few failures, he says. “They will never make money out of those deals,” he says, and he refuses to make “dumb” bids.

The holding company has $4 billion in assets overall and 46 branches in Florida, just one less than in Arkansas.

“Florida’s a great state,” says Allison. “It was the highest price market in the United States, bringing four and five times book. It’s going to be back. It’s already back.”
John Allison, Chairman, Home BancShares

 

First Southern Bank
Organic Strategy

Herb Boydston made his name in banking in Louisiana with Hibernia Bank, where he was CEO until Capital One bought it in 2005. Five years later, he led a group that raised $400 million from institutional investors to recapitalize struggling

First Southern Bank in Boca Raton and buy up failed Florida banks. It acquired two-branch Haven Trust in Ponte Vedra in 2010 and nine-branch First Commercial in Orlando in 2011 and still had $200 million to deploy. But it found too many competitors with the same plan bidding for banks, driving up the prices, making Boydston and First Southern rethink their plans. “Some of the profitability you think is there might not be there,” he says.

Once it decided on a more organic strategy, First Southern brought in veteran Florida banker Lynne Wines, formerly of CNL in Orlando and Union Bank in Sunrise, as president and later CEO, replacing Boydston, who remains chairman. First Southern, with 15 branches from St. Johns County south to Palm Beach County, lost $7 million in the first half of 2012 as it revalued loans it acquired, compared to a $5.8 million profit in the 2011 first half.

“We think the industry will continue to consolidate. I think that’s inevitable,” says Boydston.
Herb Boydston, Chairman, First Southern Bank

Lynne Wines, CEO, First Southern Bank

Tags: Banking & Finance, The Money Issue

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