A latecomer to the great Florida banking rush, JPMorgan Chase is eager to make up for lost time. Fast. First came the acquisition of Washington Mutual that gave it a footprint of nearly 240 branches across Florida. Last year it added 2,000 jobs statewide, launched a marketing blitz and spent $90 million refurbishing branches. Next up: Chase plans to open as many as 30 branches a year in Florida starting in 2011, about 10 of them annually in the Tampa Bay area. "JPMorgan Chase could be the third- or fourth-largest commercial bank in Florida in a matter of years … (perhaps) five years, seven years," predicted S. Todd Maclin, chief executive of commercial banking for the New York institution and a top lieutenant to Chase CEO Jamie Dimon.
Of course, it helps that Chase is already a financial behemoth, a household name, a mortgage and credit card giant. Not to mention having 14,000 employees statewide, including 5,000 in the bay area.
"There are a lot of well-entrenched competitors here that aren't going to be throwing out the welcome mat," he said.
Chase plans to consolidate its regional business lines into a new headquarters in downtown Tampa by late June.
While visiting his Tampa team last week, Maclin, 54, sat down with the St. Petersburg Times. Here are some highlights:
Chase dipped its toe in Florida banking back in the 1980s, but then pulled out. Will it stick around this time?
The reason it's a good time to be breaking into the market has to do with two things. No. 1, our firm is a recognized leader in terms of product and service capabilities. We have a national retail footprint. We're one of the largest credit card companies in the U.S., and our private and wealth asset business is very strong. … No. 2, (Chase's) performance has been better, obviously, than many of our competitors'.
We've only really had people on the ground a matter of months, and yet we've started to convert prospects to customers.
How important is the Florida market?
It's got to be one of the top two or three states for banking. I'd say it's up there with California and New York. It also has really strong connections to the Northeast. So for a bank that's the No. 1 bank in the Northeast and the No. 1 bank in the Midwest, having a Florida (presence) allows you to serve some of your customers who may spend part of the year here in addition to wherever else they call home.
So why not push into Florida five or 10 years ago?
It's like, why did we get married when we got married? Because we had somebody that wanted to marry us.
We had identified Washington Mutual as a top opportunity for the firm, given its branch locations. But they obviously weren't for sale (earlier). We had toyed around with other acquisition possibilities. But it's a little like finding a business or life partner. How do you convince the other side it's in their best interest?
How much are you spending on the ad blitz?
I don't think we've announced what we're spending on any state or market, but you can play your own game and see how many ads you're seeing. Think of it this way: We're a strong bank. We have the money to spend. We're not being magnanimous here. Florida is a huge, huge banking market. …
You can tell by watching us that we have the resolve. It's not so much about how much progress we make in the next 12 months. It's about: Are we setting ourselves up like we have in other markets?
There have been predictions ad nauseam about a broader shakeout in commercial real estate. What do you see unfolding?
Our own view is that banks with heavy concentrations in commercial real estate probably haven't fully seen the economic impact.
Before we bought WaMu, we had about $100 billion in commercial loans that I'm responsible for and only about $5 billion of that was in real estate. I think that would put us at about the least exposed.
So this is a business opportunity for you as some Florida competitors battle real estate problems?
Absolutely. Absolutely. The good news story for places like Tampa is that all of this real estate does eventually get mark to market (loans written down to current market values). I don't know if that's in 2010 or 2011, but it will happen. Make no mistake. And when it does, it goes from being somebody else's problem to a new person's opportunity.
People are going to come to Florida either for cheap lease rates or to buy buildings or to just invest like they have in other cycles. We've seen this before. … And when those new investors come and the real estate has been marked to current value … we're going to play a part in that. We've actually dedicated some resources.
Let me switch gears. Chase and other banks have aggressively raised credit card interest rates and cut limits. With the new credit card rules taking effect now, what can customers expect next?
We were supportive of all the legislative change, (but) we have some concern about the unintended consequences of the legislation.
Use the example of my credit card vs. my 22-year-old son Sam's credit card. If banks are limited in their capacity to provide credit, Sam may find himself a little squeezed in terms of availability relative to what more established folks like myself would be able to generate.
So it may limit the availability of credit on the margin for some folks. But at the end of the day, there isn't anything in the legislation that requires you to provide credit cards. You have to build your business around who you choose to do business with and on what terms.
Jeff Harrington can be reached at firstname.lastname@example.org or (727) 893-8242. Follow him on Twitter at twitter.com/jeffmharrington.