Trevor Burgess, chief executive of C1 Financial, brings an investment banker's irreverence to the normally decorous business of community banking.
In October, Burgess told analysts he had considered adding a "Loans We Did Not Do This Quarter" section to his St. Petersburg, Fla. bank's earnings release to highlight what he sees as poor credit discipline among competitors.
"We could have used up all [our] cash in the quarter if we had just said 'yes' to the loans other banks are out there doing," Burgess, who earlier in his career spent a decade at Morgan Stanley, said on a conference call. "What we're looking for is great, long-term relationships with entrepreneurs, and that takes a little more careful analysis."
At another point in the call, Burgess boasted that the $1.5 billion-asset C1 was finding "outsized demand" for its services despite operating "in what some bankers have deemed a challenging market."
A bit brash? Certainly, but Burgess, 41, has produced a record that backs up his talk.
For building C1 into a distinctive brand with bright growth prospects, American Banker is honoring him as one of our three Community Bankers of the Year. (The other two honorees will be announced over the course of this week, as will the 2014 Lifetime Achievement and Innovation of the Year recipients. The 2014 Banker of the Year award will be announced next week.)
Visitors to C1's main office on the street level of the Tampa Bay Times Building at 5th Street South in St. Petersburg, Fla., realize quickly it is unlike any other bank's headquarters.
For starters, the office features trendy furniture, an "energy pod" where employees can catch quick naps and a room for breast-feeding mothers. But it's the work space for Burgess that really sets C1 apart.
Burgess does not have an office. Rather, he shares a long desk with Cristian Melej, the $1.5 billion-asset company's chief financial officer, and Jonathan Carlon, a project analyst who graduated from C1's in-house management training program.
The CEO occupies the middle third of the desk, a perch that lets him oversee virtually everything that goes on in the big, open work area, which is designed to resemble a trading floor.
Burgess helped design the configuration, working closely with the lead architect. Cleary, it's a different set up than that of most bank CEOs, but it is kind of par-for-the-course for Burgess, who has run C1 since December 2009.
His road to C1 was a winding one. A Dartmouth College graduate, he joined Morgan Stanley in 1998. A decade later, he went to work for Artesia Capital Management, a company linked to Marcelo Faria de Lima, a Brazilian entrepreneur and former commercial banker at ABN Amro Bank that Burgess had met two years earlier.
With the backing of Faria de Lima, C1's largest individual investor, Burgess set out to find a company to run. He zeroed in on community banking, and ultimately on C1, after exploring targets in Nevada and California.
Faria de Lima, Burgess and two other partners recapitalized C1 with $50 million in December 2009.
When Burgess and his partners took control of C1, known at the time as Community Bank of Manatee, it had five branches and $260 million of assets. Suffering from the financial crisis, the bank lost $15.4 million in 2009. Since then, C1 has grown to 28 branches and $1.5 billion in assets. It earned $12.2 million and originated $419 million of loans last year, while 2014 is shaping up to be the most important in its history.
Earnings through Sept. 30 fell 47% from a year earlier, to $5.4 million, but loan originations of $350 million are on pace to top those from 2013. More importantly, C1 held its initial public offering in August, raising $42.3 million. The IPO pushed C1's ratio of total capital to risk-weighted assets north of 15%, leaving it well-positioned to grow significantly over the next five years.
Given his investment-banking background, presiding over a successful IPO was a major thrill for Burgess.
"Taking a company public is like going to the Super Bowl of business," Burgess said in a recent interview from his office. "Only a few people get to experience it. It's a validation from the investment community."
The IPO was notable for another reason. Burgess, who has always been open about his sexuality, became one of the first openly gay CEOs to take a company public.
Ken Thomas, an independent banking consultant in Miami, said a logical move for C1 would be to expand in the lucrative south Florida market. Currently, C1 has two branches in Dade County, one in Miami and another in Coral Gables.
Thomas said south Florida is so big that banks need about two dozen branches just to move the needle and about 50 to be a real player. "In a market like that, to grow organically is hard," he added.
C1 seemed poised to make a splashy entrance in south Florida in September 2012, when it agreed to buy the $1.2 billion-asset U.S. Century Bank of Doral. That bank was undercapitalized and struggling under a heavy load of nonperforming loans, yet it had 24 branches in Dade and Broward counties.
Unfortunately for C1, the deal unraveled and was terminated three months after it was announced. Since then, Burgess appears to have cooled on growing by acquisition. He has three acquisitions under his belt, but the most recent one closed in August 2013, when C1 assumed $247 million of assets and $244 million of deposits from the failed First Community Bank of Southwest Florida.
C1 has received a number of calls from potential sellers since its IPO, but Burgess said the company is focused more on organic growth than deal making.
"We're first and foremost focused on new loan originations," he said. "Organic growth has to be our first priority, since the new loan opportunities we have are far superior to an acquisition."
If C1 decides to deploy excess capital to fund organic growth, it would be swimming against the tide. In October, $15.5 billion-asset Iberiabank of Lafayette, La. struck deals for two Florida institutions: Old Florida Bancshares in Orlando and Florida Bank Group in Tampa. Analysts believe a number of other institutions are on the prowl for deals in the Sunshine State.
Doing things differently would be nothing new for Burgess. Indeed, C1 has developed its brand around distancing itself from competing banks.
Part of the difference is really nothing more than savvy marketing, like equipping branches with exterior light bulbs that glow C1's emerald green color, offering prepaid interest in the form of a Mercedes Benz S550 sedan to customers who open a five-year CD with at least $1 million or paying new customers $5 a month for 12 months after opening a checking account.
But a number of differences have been substantial.
In March, for instance, C1 announced it would pay employees a "living wage" of at least $14 an hour. The move, which attracted national attention, came after Burgess looked at a list of employee salaries, realizing that 26 all women made less than $30,000 annually.
"As someone who was raised by a single mother, I knew what it meant to work an hourly job," he said. "I talked to my business partner and we were both okay making a little less money. I viewed it as not only the right thing to do but very smart business. I talk about banking by entrepreneurs for entrepreneurs. We're targeting a very sophisticated client base, so I want to be able to attract and retain the very best people, including at the" entry level.
Burgess also brings an innovative approach to the way C1 trains its professional staff. The bank established a 22-week management associates training program with the University of South Florida. Two groups of six to ten trainees are enrolled. They attend MBA-level classes in the mornings and work at the bank in the afternoon, rotating through different departments. Upon completion of the course, most are offered positions with C1, Burgess said.
Such an extensive training program is expensive. Burgess acknowledges that its cost contributes to a higher-than-average efficiency ratio, which stood at 71.3% in the third quarter. Still, he said it was necessary to produce bank officers with the relationship skills C1 needs to execute its business plan.
Burgess said he expects one of the program's graduates to fill his slot one day. Indeed, a number are climbing C1's corporate ladder. Carlon, the project analyst, graduated from the management associate program, as did Javier George, who was recently named C1's SBA and lending business development officer for Miami Dade County.
Training isn't the only function C1 handles in house.
C1 also boasts a technology department, known inside the bank as C1 Labs, that has developed a number of software programs and mobile banking applications. The company has filed applications for seven patents and is developing plans to begin marketing its tech products to other banks.
Burgess said the custom solutions developed by C1's tech division have made the company more profitable, "and if we can bring them to market and make money, then it's good all around."
Such a scenario is hardly far-fetched. In a recent research report, Michael Rose, an analyst at Raymond James, said C1's technology products have the potential to generate as much as $3.6 million in revenue.
C1's growing success has translated into a number of awards for Burgess in recent years. In October, St. Petersburg Mayor Rick Kriseman awarded him the city's inaugural "Living the Vision" award. In January 2013, he was named Florida entrepreneur of the year by Ernst and Young.
For Burgess, the recognition is nice, but his job is the real award. "Being an entrepreneur is the American Dream and I get to live it every day," he said. "I'm lucky I love what I do. I run this company like I'm going to [be here] forever."