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State of Tampa Bay banking: Who's got the market share, who wants more of it?

The latest announced deal of a local bank being bought was unveiled Wednesday with Kentucky-based Republic Bank purchasing Cornerstone Community Bank of St. Petersburg, which has this office at 6300 Fourth St. N. Once merged, they will still control less than 0.5 percent of the deposits in this market. MARTHA RIAL | Times
Published Oct. 9, 2015

The wild and crazy days of big out-of-state banks swooping into Tampa Bay and Florida to grab control of the state's banking industry are pretty much over. A handful of banks now rule this market, with just 10 banks controlling more than $8 of every $10 in deposits here. Dozens upon dozens of smaller institutions are left to pick over what deposits are left.

The true game-changer in Florida banking took place in the 1990s when ex-Marine Hugh McColl, the North Carolina CEO of what would become Bank of America, charged into Florida and gobbled up many of its biggest banks. A local Carolina newspaper at the time featured a picture of McColl, wearing a Marine battle helmet, accompanied by a one-word headline: Blitzkrieg. McColl is long retired, but his bank remains the largest in Florida.

Banking now is quieter, more humble after the deep recession and housing collapse. The industry holds less influence and leadership over the area economy. While still huge, Bank of America has suffered service and public relations woes. And changes generated by the Internet and mobile banking apps keep reshaping consumer and business choices in how their money needs are met.

The Federal Deposit Insurance Corp. recently ranked Tampa Bay's banking industry based on who controls the market share of deposits here. That's hardly a perfect measure of banking clout, but it offers one pecking order. Here are 10 insights from that ranking and related data offered in some accompanying tables.

1. Bank of America and Wells Fargo are the two big kahunas that dominate Tampa Bay's general banking market. Together, the two national giants control nearly a third of the $70 billion in banking deposits in Tampa Bay.

2. It may be the second-largest bank in Tampa Bay, but Raymond James Bank is not your typical financial institution. While giants like Bank of America and Wells Fargo each operate about 90 branches in this market, Raymond James Bank has just one — next door to its corporate parent, Raymond James Financial, in St. Petersburg. The bank largely caters to Raymond James Financial's investing clients with banking and mortgage services. Yet the bank's growth has far outstripped others in the market. From holding less than 2 percent of area deposits in 2000, Raymond James Bank now controls 16.5 percent. Locally, that's more than Wells Fargo has.

3. While only 10 banks control more than 82 percent of the deposits in Tampa Bay, the market is served by at least 66 banking institutions (excluding credit unions). That leaves 56 of those to fight over just 18 percent of the deposits not in the hands of the top 10 banks.

4. Tampa Bay's bank deposits are growing quite nicely, reflecting the general growth of this metro market. The $70 billion held by area banks as of June 30 is up from $55.8 billion held in 2010, $42.4 billion in 2005 and just $31.3 billion in 2000, according to FDIC data.

5. Bank of America (and its predecessor, NationsBank) has been the No. 1 bank in deposit share here for more than 20 years, though Florida-based Barnett Banks was a close competitor in the late 1990s. Bank of America/NationsBank bought Barnett in 1997 and enjoyed a startlingly high 28 percent control of this market in 2000. That stake fell to 17.5 percent by 2010 and has remained relatively steady ever since.

6. There's a good reason Florida is known as a "banking colony." Of the 66 banks scrapping for business in the Tampa Bay market, 30 — 45 percent of them — are based outside Florida and control the vast majority of deposits in this state and in this metro market. Many of the 19 out-of-state banks operating here are mid-sized and are most aggressive in buying the smaller banks headquartered here in order to grow in Florida and acquire the local banking and community expertise to gain future business. Alabama leads all states with three good-sized banks operating here, though lately Arkansas, Louisiana and Kentucky banks have become especially eager to buy. The latest announced deal was unveiled Wednesday with Kentucky-based Republic Bank purchasing Cornerstone Community Bank of St. Petersburg. Once merged, they will still control less than 0.5 percent of the deposits in this market.

7. C1 Financial, the parent of St. Petersburg's C1 Bank, was recently reported (based on anonymous sources in South Florida) to be up for sale. C1 CEO Trevor Burgess has no comment on the matter. But the rumor's been enough for analysts at both Raymond James & Associates and Sandler O'Neill to suggest investors could be winners if the bank is acquired. "We can't say we are necessarily surprised by merger speculation, given several recently announced acquisitions in the Sunshine State," Raymond James analysts say. Their report cites 12 deals announced in Florida this year and 40 deals since the start of 2013.

On a personal note, I am disappointed at talk that C1 Bank may want to sell. The young bank — largely controlled by a Brazilian investment group that includes Burgess — is progressive and creative. But it has had few years to try to grow — many of those in a bad recession — and so far has captured only 1 percent of the Tampa Bay deposit market. It would be a shame to lose C1's independence so quickly.

8. Since 2002, bank regulators have closed or sold 75 Florida-based banks that have failed. Among those, 12 failed in the greater Tampa Bay area, mostly during the depths of the past recession. The good news is most of Tampa Bay's weakest banks have finally been weeded out.

9. The area's banking market has humbled many banks that opened with great intentions but are no longer here. Long gone from this market are — to name only a few — big banking names like Barnett Bank, First Florida Bank, Florida Federal, Park Bank, World Savings Bank, Fortune Bank, AmSouth, SouthTrust, Colonial Bank, C&S Bank, First Union and Wachovia.

10. Based on Bauer Financial's "0 star" (very weak) to "5 star" (very strong) financial health ratings of area banks, Tampa Bay's institutions are generally healthy. The top-rated "5 star" banks based in this market include the Tampa institutions Central Bank, Gulfshore Bank, NorthStar Bank and TCM Bank. Other 5-star banks in the market include Plant City's Hills­boro Bank, Jefferson Bank in Oldsmar, Platinum Bank in Brandon and Raymond James Bank in St. Petersburg.

Will more banks pour into Florida, or are we swarming with too many already? As many retiring baby boomers relocate to Tampa Bay and other parts of Florida, look for the mid-sized, out-of-state banks already here to try to grow by acquiring small local banks. But look as well at latecomer banks that realize they are missing the boat up north by failing to "follow their customers" — often wealthy clients — to the Sunshine State.

Expanding here is no guarantee of success. The bones of many financial institutions based elsewhere that could not cut it here have long littered Tampa Bay's economy.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow@venture tampabay.

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