South Florida is a haven for community banks — homegrown institutions that zero in on local businesses and residents, building their portfolios here.
Community banks have come and gone over the years, lost to mergers, buyouts or failure. And several new ones have moved in to take their place.
Across the nation, there are more than 7,000 community banks, with assets ranging from less than $10 million to $10 billion or more. As a segment of the industry, they constitute 96.4 percent of all banks, according to the Independent Community Bankers of America. And even though they are just 21 percent of the banking industry by assets, community banks made 58 percent of outstanding bank loans to small businesses last year, the trade group said.
For a sample of community banking in South Florida, The Miami Herald took a look at three relatively new banks that are thriving — raking in profits as they boost their assets. Each has been rated four stars (on a zero-to-five rating) from Coral Gables-based BauerFinancial, which bases its ratings on such factors as capital, profitability, loan quality and liquidity.
“Four stars is great, especially in the South Florida market,” said Karen Dorway, president and director of research at BauerFinancial.
“The South Florida market has been improving over the last several quarters, but it is still one of the most challenging banking markets, primarily because of the real estate market. But since that is starting to pick up, we’re seeing improvement,” she said. “Overall, things are definitely doing better, and the four-star rating is just outstanding.”
Apollo Bank is based on South Miami Avenue in the Brickell Avenue area of Miami.
“Small businesses, entrepreneurs and professional local people — that is our focus,” said Eddy Arriola, the bank’s chairman.
To reach its market, Apollo greets clients in its impressive courtyard atrium, holds luncheons in its marble-laid dining room, and invites prospects to cocktail parties on its patio.
“We try to position our bank as the connecting bank for entrepreneurs and small businesses,” Arriola said.
Apollo Bank’s history dates to March 2010 when Arriola and President and Chief Executive Richard Dailey raised $22 million from a group of 125 local investors to buy majority control of Union Credit Bank.
That bank, with $140 million in assets and an international clientele, was started by Odde Rishmague, a Chilean, in 2001. He now owns a 25 percent share in Apollo.
For Arriola, 40, veteran banker Dailey, 71, and the other investors, the purchase ended a nearly two-year effort that had begun with a business plan to start a bank, and then morphed into a search for a bank to buy.
Since then, the bank has built its employee team from 33 to 53, cleaned up its assets, reengineered itself by changing its corporate culture and business model and added new technology, Dailey said.
It changed its name to Apollo Bank in June 2011, choosing the Apollo space program as its inspiration for the challenge it was taking on, Arriola said..
During its transformation, Apollo phased out $40 million in non-relationship loans, while growing to $220 million in total assets as of June 30.
What’s more, Apollo took a bank that had been unprofitable for nine years and turned its first profit within six months, Arriola said.