Some community banks with roots in South Florida have branched into the Orlando area, especially in the last two years as they picked off more than $500 million of deposits, and more may follow.
“There is a lot going on in Central Florida, and it will get better as Florida gets better,” said Lynne Wines, president and chief executive officer of Boca Raton-based First Southern Bank, which acquired seven branch offices in the Orlando area two years ago.
First Southern and Weston-based Florida Community Bank have the biggest presence among South Florida banks with Central Florida branches. Their combined deposits in the Orlando market exceed $450 million.
Miami Lakes-based BankUnited also branched into the Orlando area starting in late 2011, and Boca Raton-based 1st United Bank opened its first branch office there about eight months ago.
Those four South Florida banks have expanded alongside a fifth that has been operating in Central Florida since 2008: Miami-based City National Bank of Florida, which has a branch in downtown Orlando and another in Winter Park, one of Orlando’s northern suburbs.
Economic growth in Central Florida is a big lure. Data from the U.S. Bureau of Labor Statistics show the number of payroll jobs in the Orlando metropolitan area grew 2.1 percent in the year ended in November, more than three times the comparable 0.6 of a percent growth rate in Miami-Dade, Broward and Palm Beach counties in the same period.
In Central Florida, “our clients had a very good 2012″ and are “equally bullish” about this year, so “we’re also bullish on what ’13 will bring for us,” said Tyler Kurau, Central Florida regional executive for City National Bank.
Other banks with headquarters in South Florida may enter the Central Florida market, too, especially if the pace of economic expansion quickens in the state’s midsection.
“I wouldn’t rule out us possibly getting to Orlando one day,” said David Seleski, president and chief executive officer of Fort Lauderdale-based Stonegate Bank, which has six branches in South Florida and four on the state’s West Coast. Stonegate isn’t planning to open any new branches this year, but “we are much more open to acquisitions than we were a year ago.”
First Southern Bank and Florida Community Bank bought their way into the Central Florida market by taking over failed banks in 2011 with financial assistance from the Federal Deposit Insurance Corp. First Southern had $276 million of deposits at seven branch offices in the Orlando area last June 30, and Florida Community had $183 million at six branches in the market.
“We have a lot of opportunity with the footprint we have now. There is a lot of potential in the market. But I wouldn’t say we are where we want to be,” said Wines, CEO at First Southern Bank. “We put a lot of new high-level talent in Central Florida just in the last couple of months,” including First Southern’s new area executive for Central Florida, Joseph A. Losch Jr., who previously held the same position with BB&T.
“We really like the Orlando market,” said Michael Walker, the Weston-based wholesale banking executive of Florida Community Bank. “We’re aggressively looking to grow all of our lending operations in Orlando, focused primarily on the C&I [commercial and industrial] business.” The area’s economic flavor is distinct from South Florida’s because “in South Florida you have a lot more international [business] and in Orlando you have a lot more tourism.”
In addition, “we are in the commercial real estate lending market. A lot of other institutions have stepped away from that space,” Walker said. Florida Community also sees new opportunities in housing construction finance because “some of the large developers are coming back into the market and starting up projects.”
BankUnited, which entered Central Florida in November 2011, soon will open its fifth regional branch in Altamonte Springs north of Orlando. BankUnited previously opened two branches in Orlando and two each in nearby Casselberry and Lake Mary, all on a de novo basis, or without acquiring them from another bank.
Among the five South Florida banks with branches in Central Florida, BankUnited has the smallest deposit base. It had a combined total of $12.4 million in deposits last June 30 at its four young branches in the Orlando area, which range in age from seven months to 16 months. By comparison, 1st United Bank of Boca Raton had $51.8 million of deposits at the end of June at its sole branch office in the Orlando area, a Winter Park location the bank opened last April.
But its small Orlando-area deposit base belies the large-scale lending capacity of BankUnited, a $12.7 billion institution by assets, making it larger than the rest of the South Florida banks with tentacles in Central Florida.
This month, for example, the bank loaned $21 million to an affiliate of Orlando-based Unicorp National Developments Inc. to finance construction of a luxury apartment building in Ocoee, a western suburb of Orlando. In December, BankUnited refinanced $145 million of loans to multifamily housing developer CED Cos. based in Maitland and its affiliated property management company.
“We’ve been successful in Orlando, particularly in the commercial real estate market,” said Gerry Litrento, senior executive vice president of BankUnited. “It got hit pretty hard in the real estate downturn, but it has come back nicely.”
State’s growing midsection lures S. Fla. bankers