A Miami-area bank that's doubled in asset size the past three years is reaching for more growth. Coral Gables-based Banesco USA announced plans last week to enter Florida's second largest county.
To lead the Broward County expansion, the $4.4 billion-asset Banesco recruited a four-person team of commercial bankers from a neighboring rival, the $9.9 billion-asset Amerant Bancorp, also headquartered in Coral Gables.
Though Banesco has focused more on commercial real estate historically, it has made growing its C&I portfolio a priority, CEO Calixto Garcia-Velez told American Banker. The 19-year-old company has added a dozen commercial bankers over the past two years, including members of the Amerant team.
The same buoyant regional economy that has undergirded Banesco's growth has attracted banks around the country to expand in South Florida. Still, Garcia-Velez believes his team is running on an inside track due to the desire among owners of small- and medium-size businesses to bank with hometown institutions.
With a population of 2 million people and more than 67,000 employer establishments, according to the Census Bureau, Broward County offers an obvious target to further test Garcia-Velez's theory.
"Your C&I owner that wants a relationship with a local bank that understands his or her business — there's been a vacuum there," Garcia-Velez said.
Banesco has grown its C&I loans at a dizzying 47% combined annual growth rate since the end of 2021. The portfolio totaled $468.1 million on Dec. 31.
"We're extremely bullish on South Florida," Garcia-Velez said.
Sean Snaith, director of the Institute for Economic Forecasting at the University of Central Florida, said the Sunshine State has outperformed the national economy over the past five years. He expects the trend to continue, even as overall growth cools. The regional labor market is also strong, with an unemployment rate well below the national average, according to Snaith.
"South Florida does have these international linkages and immigration that make it even more distinct than other parts of the state," Snaith said.
The region's strong economy acted as a mainstay for the local commercial real estate market, supporting Banesco's continued investment, even as other banks shied away from the sector, according to Garcia-Velez.
"We tracked it very closely, and we did not see the South Florida commercial real estate portfolio behaving like what we were reading about or seeing in other markets," Garcia-Velez said. Banesco was able to book several lucrative CRE deals it might not have been able to win had more banks been actively lending, he added.
"A lot of times, the baby gets thrown out with the bathwater," Garcia-Velez said. "Rather than peeling the onion, figuring out where they should pull back, where the CRE market is slowing down, they just say, `We're not lending in commercial real estate.'"
Many regional banks pulled back from commercial real estate after the spate of bank failures in spring 2023, according to Snaith.
"Many of these banks around the country were facing deposit withdrawals and generally battening down the hatches when it came to lending," Snaith said. "I'm not suggesting Florida banks have been immune to that, but the tightening of supply and maybe the raising of [underwriting] standards would have less of an impact because of the countervailing strength of the economy."
Indeed, the region's outperforming economy has prompted a number of local banks to pursue expansion schemes similar to Banesco's. Amerant, for instance, recently
Many outside banks have also sought to widen their presence. JPMorgan Chase, PNC Financial Services Group and Fifth Third Bancorp have all undertaken significant expansion plans in recent years.
Starting in 2023, the $27.7 billion-asset United Community Banks, based in Greenville South Carolina, has entered the region with two Miami-area acquisitions. It agreed to pay about $200 million in total for
Even some smaller community banks have sought to get in on the action. In June 2023, the $2.6 billion-asset Vista Bancshares in Dallas announced it would open a loan production office in Palm Beach Gardens. It hired Dan Sheehan, founder and CEO of Miami-based Professional Holding Corp., to spearhead the move into Florida.
Banesco initiated its entry into Broward County by opening a loan production office in Plantation, Florida. It plans to open a full-service branch later this year.
Though it shares a brand with the Caracas, Venezuela-based Banesco, Banesco USA is an independent, Florida-chartered community bank.
While Garcia-Velez didn't rule out an acquisition to accelerate Banesco's growth, he expressed satisfaction with its current organic growth strategy.
"Given the fact we've been able to grow at the pace we have, it doesn't make a lot of sense for us to consider doing anything else," he said.
