Finance in Florida
Florida-based banks are ripe for mergers
The number of Florida-based banks is down by 60% since 2007.
Seacoast is running out of Central Florida competitors to buy.
Four years ago, Seacoast Banking, the Treasure Coast-based holding company for Seacoast National Bank, launched a “land and expand” strategy in Orlando by acquiring BankFirst of Winter Park.
The nearly $80-million deal came with 12 branches around metro Orlando — a beachhead from which Seacoast has rapidly built a mini empire.
Seacoast followed the BankFirst deal by acquiring Floridian Bank, which had 10 branches in Orlando and Daytona Beach. Then came the purchase of the Orlando banking operations of BMO Harris Bank, with 14 branches in the region. In June, Seacoast announced a deal to acquire First Green Bank, which has six branches in Central Florida (plus a seventh in Fort Lauderdale).
“The Orlando market was coming back nicely, and we felt it had a real growth opportunity,” says Seacoast Chairman and CEO Dennis Hudson. “It has been a priority market for us.”
Since the start of 2014, Seacoast has moved from having virtually no presence in Orlando to becoming the region’s largest Florida-based bank — and among the 10 largest overall. Even before the First Green deal, Orlando represented 29% of Seacoast’s business as measured by deposits.
Combined, Seacoast and First Green have 26 locations across metro Orlando, with more than $1.4 billion in area deposits and 3% of the market share. The next largest community bank in the region is CenterState, which has 14 branches, about $950 million in area deposits and 2% share, according to the FDIC.
The growth spurt has made Seacoast an increasingly important employer for Central Florida. In the last few years, the company has moved about half of its loan operations team and a call center to Orlando. Altogether, it has about 260 employees in the market — roughly 30% of its total workforce.
Seacoast says it targeted Orlando because it is the third-largest metro area in Florida and the 23rd in the country, with a population that has grown more than three times as fast as the nation as a whole over the past eight years, and it is expected to grow more than twice as fast over the next five years. The area also has been the top-ranking large region in the country for job growth.
Seacoast may be bumping up against a ceiling on how much it can continue to expand in Orlando, however — at least through acquisitions. To keep expanding, the bank will have to grow organically.
“We’d never rule out another acquisition in the market, if it was value-creating,” Hudson says. “But, as you probably know, there’s not a lot left in that market.”
— Jason Garcia