Andrew Samuel isn't afraid of change.
Since taking the reins at Sunshine Bancorp in late 2014, the former Susquehanna Bancshares president has swiftly transformed the Plant City, Fla., company from a sleepy thrift into a fast-growing commercial bank. He left Susquehanna shortly before it agreed to sell itself to BB&T.
During his first year on the job, he bought a bank, along with a pair of branches, in major markets on the western Florida coast. He also reshuffled Sunshine's senior leadership, bringing in executives with more experience running public companies.
Samuel has also focused on the more subtle area of workplace culture, pushing the $507 million-asset company to ditch its casual environment in favor of the faster pace of a business-focused bank. Sunshine also converted to a stock-owned company in July 2014.
"We thrive on" change, Samuel said in an interview Monday. "It's like taking this piece of clay and molding it into what we want."
"We're not the type of people who have a large platform and are just shuffling paper from here to there," Samuel said, adding that he wants to keep buying smaller community banks. "We're builders. We're creators. We're not maintainers."
Growing Sunshine's balance sheet, while also cleaning it up, hasn't been easy. The company lost $1.8 million in the fourth quarter, due largely to a spike in merger, salary and severance-related expenses.
Still, signs of a turnaround are emerging. The company's ratio of nonperforming assets fell to 0.15% of total assets, compared with 1.2% a year earlier. The company also slashed its loan-loss provision and expanded its net interest margin.
Here is an edited transcript of Samuel's interview.
What were your goals when you took over Sunshine? What progress have you made?
ANDREW SAMUEL: We knew two things very clearly. We had certain values that were absolutely non-negotiable. We wanted to build a company that made money, but that wasn't the end of it. Values of honesty, integrity and doing the right thing are very important to us.
The other part of that was we saw an opportunity to create a dominant Florida banking franchise, particularly in the marketplace that most people would consider central-western Florida.
What's the opportunity in that region?
Florida has a number of small community banks, between $200 million and half a billion assets. We want to be a consolidator by putting these banks together. So we're very focused on that. I'm out on the road, meeting with one to two CEOs weekly. So we continue to build that side. And then we also continue to enhance the value of your franchise.
What is your M&A outlook? Are you looking at branches or whole banks?
We're not sitting back and waiting for bankers to send us [proposals] on banks that are available for sale. We go out proactively and meet with banks that fit our strategic profile and try to convince them that they're better off as partners with us. We can be stronger together, and we can create more value going forward. We're talking to people about branch deals, whole-bank acquisitions — primarily banking operations. We aren't looking at fee business like mortgage companies.
What internal changes have you made?
We brought on a whole new slate of online products — even basic products like credit cards, mobile banking. We brought all that up. Our network has been greatly enhanced. We brought on folks on the technology side.
We had to go through a transition in terms of people. We had employees that have been there a long time and were part of a thrift culture. Now, as a public company, the urgency and the pace are very different.
Those changes are difficult to make. How did you focus on changing the culture?
There are two things about conversions. You always walk in thinking that the toughest job is going to be for the external world to recognize that you're now a commercial bank. In reality, [rebranding is] the easier part. Internally, that's the tougher part because you have this ingrained culture that's been part of the company.
What are the key differences between thrift and commercial-bank cultures?
I'd say the biggest issue is the pace and the concept of raising the bar of performance. As a thrift, you have no shareholders, so you never really raise the bar. But as a public company, every quarter, every year, you're raising the bar. Some people can keep up with that. Others can't.
The days when the important thing was to have a potluck lunch with the employees are gone. Now it's about what are we accomplishing? What kind of revenues are we generating? How efficient are we? So that's a big change.
Are there any new businesses you're looking at, as you assess potential deals?
We're building the franchise around a plain vanilla franchise. We're very proud to say we're a plain vanilla bank. We take deposits. We lend locally, and there are some fee products that are related to banking.
What worries you most as you look to become a regional player?
I'll be honest with you, the focus is back on credit quality. One of the things that we have to be very candid about with Florida banking is that it's very boom and bust. You have times like right now when things are going really well. But in 2008, 2009 and 2010, it wasn't pretty. So if there's anything that keeps me awake, it's always trying not to get carried away with the great environment. Keep thinking about what's around the corner, and how can we be prepared for that corner.
Are you worried about commercial real estate?
We're seeing loosening of standards. We're seeing people getting away from personal guarantees, covenants and things like that. So yes, I am concerned a little bit. I think we just have to constantly watch it. We constantly remind ourselves that we can't let our standards down. You're certainly going to continue to see price inflation coming through.
A lot of small-bank CEOs describe compliance costs as onerous. Have you found that, as well, after switching from a larger regional bank?
A lot is required of us. But to be honest with you, one of our constituents that we want to satisfy … is our regulators. We think that a lot of the regulations protect us. I don't think we ever talk about [how] these regulations make sense. I think when you look at some of the issues with [the Bank Secrecy Act] and credit concentrations and all of that, we think that it's all preparing us in case there's another downturn.
What else do people need to know about Sunshine?
It's a company on the move, you'll hear more about it. It takes a good 12 to 18 months to really build out the infrastructure and get all of those things out of the way. It's sort of like taking the boat, and turning it. Once you've turned it, and then you're headed out to sea, it's going to be a lot of fun.