While many Florida banks have struggled or failed, Boca Raton-based 1st United Bank is thriving. It’s buying other state banks, has plenty of capital and is known for strong, experienced management.
Since the financial crisis hit in 2008, 1st United has raised money twice on Wall Street and bought four small Florida banks, including Anderen Bank in Central Florida in a deal closed this month.
Analysts credit the skill and vision of Rudy Schupp, 61, a Florida banking veteran who started Republic Security Bank in 1984 and sold it with $3.5 billion in assets to Wachovia in 2001. He launched 1st United in 2003, won back former clients, recruited top bankers and avoids excess risk.
Seasoned by previous recessions, Schupp said he saw in 2005 that real estate was “ripe” in southeast Florida, with prices too high and loans made too freely. He pulled back on real-estate lending to all but the most qualified borrowers. When the market tanked, 1st United suffered less than rivals that had loaded up with real-estate loans and ended up with too little cash for reserves.
“Being recession-tested in this state, it does strengthen you,” Schupp said. Among the lessons learned: Be conservative in lending, build relationships for the long term and use common sense, he said.
Starting out with a single office, 1st United now has 23 branches from Miami to Vero Beach in South Florida and more recently, in the Orlando and Tampa areas. Its assets have grown to $1.4 billion and employees to 320, making it one of the largest publicly traded banks based in Florida.
Schupp plans to at least double the bank’s assets in the next five years, partly through acquisitions. The community bank will focus on deposit-rich southeast and Central Florida and may consider entering Jacksonville. It’s keen on business customers, especially small and mid-sized firms and professionals, said Schupp.
Analysts are bullish.
Independent banking analyst Ken Thomas of Miami finds it “refreshing” to see Florida banks buying other state banks, instead of being acquired by private equity groups or larger banks based outside Florida. He’s impressed by Schupp, who serves on the board of the Federal Reserve Bank of Atlanta.
Still, Thomas worries 1st United may be spreading itself thin by expanding into Tampa and the Orlando area. Focusing on Florida’s top market in South Florida might be more profitable, Thomas said.
Michael Rose, an equity researcher at Raymond James, rates the company’s stock as “outperform,” based on the bank’s strong capital, experienced management and potential for more acquisitions. He’s encouraged by a growing pipeline of new loans, which suggests rising income.
1st United’s performance “stands in contrast to many of its Florida peers, where credit and capital remain constrained,” Rose wrote in a recent report fromSt. Petersburg.
Bauer Financial, a researcher based in Coral Gables, gave 1st United a four-star or “excellent” rating for the latest quarter. 1st United was among just 26 percent of banks in Florida that Bauer recommended with four or five stars, while 37 percent instead were rated as troubled or problematic.