It took AmericasBank Corp. of Towson, Md., nearly a decade to surpass the $100 million-asset mark, but it has embarked on a new strategy to jump-start growth: forming individually branded bank divisions in various Maryland markets led by well-known bankers there.
The $114 million-asset AmericasBank has rebranded its flagship branch in Towson and hired a group of local bankers to run it. The company also plans to convert loan production offices in Annapolis and Frederick into separately branded divisions of its bank, AmericasBank.
Over the next five years AmericasBank Corp. will open three to five divisions in new markets, designating local bankers as presidents of the divisions.
Mark H. Anders, the president and chief executive of the company and its bank, said that the divisions are "organized to look, act, and feel like independent local banks," a tactic meant to improve his company's chances against bigger competitors in those markets.
Small-business customers may feel they would get better deals at banks run by local bankers, he said, but by operating divisions of the same bank instead of opening individually chartered banks, "we'll be able to replicate this model without all of the overhead costs with having to run independent banks."
The new strategy is the next step in Mr. Anders' plan to accelerate his company's growth. Its progress had been stymied for years by a lack of adequate capital, and he was brought on board in 2003 to raise more capital by taking the company public.
Hiring local bankers is a critical component of the new strategy. Last week two former bankers at BankAnnapolis were hired to run Annapolis Community Bank, which will open in the fall. Eric W. Edstrom will be the division's president, and Erik M. Chick will be senior vice president of lending. Within a year AmericasBank Corp. intends to hire six to eight business development officers there.
Also, Ellen R. Fish, a commercial banker at Provident Bankshares Corp. in Baltimore, was hired recently to run AmericasBank's Towson branch, which will be rebranded Towson Community Bank next month. She will oversee two vice presidents, Patricia M. Long and Kathleen B. Fuchs, and a team of business development officers familiar with Towson.
The teams will target professional companies that are generally rich in deposits, such as law firms and medical practices. Mr. Anders said the bankers should not have a problem attracting local firms, since they are also civic leaders — Mr. Edstrom is the president of the Annapolis Rotary Club, and Ms. Fish is the past chairman and a current director of the Baltimore County Chamber of Commerce.
AmericasBank has not designated other markets for the strategy, but it is eyeing county seats that are also health-care and educational centers serviced by a lot of professional firms, Mr. Anders said.
Mr. Edstrom said that Annapolis is an excellent choice for this particular strategy.
"Even though it's the state capital, it's more of a town than a city — a community where people still value dealing with people they know," he said. Business customers should appreciate Annapolis Community Bank's structure, "because it'll be independently run, and they'll be able to talk to the president and not go through layers of bureaucracy."
Each division will work to make more commercial and industrial loans than the bank has had in the past, and it likely will introduce Small Business Administration lending. But Mr. Anders said the principal focus will be on increasing profitability by attracting low-cost deposits from business customers with the aid of couriers and, eventually, remote deposit.
For most of its history, AmericasBank has operated at a loss, mainly because of low capital levels, he said. In 2001 it reached an agreement with regulators to improve management oversight.
Mr. Anders, the former CEO of BankAnnapolis, was hired in 2003 to take the company public. It raised $5.1 million in an initial public offering in 2004 and another $11 million in a secondary offering last year. The company has used part of the proceeds to hire more employees and make more loans.
In October 2005 regulators announced that they had lifted the written agreement, and the quarter became AmericasBank's first profitable one.
The company then hired more business development officers, and salary expenses wiped out profits in subsequent quarters. But the investment is starting to reap rewards: AmericasBank Corp. earned $119,000 in the first quarter, compared with losing $214,000 in the first quarter of last year.
Lew Sosnowik, a vice president with Koonce Securities Inc. in Bethesda, said that AmericasBank's strategy of operating separately branded divisions in markets like Annapolis is a good idea. However, the company should space the branch openings two or three years apart, he said, so it can absorb the expenditures as the new divisions become profitable.
Mr. Anders said he expects the divisions to become profitable more quickly, because experienced teams will be running them. Still, if AmericasBank cannot identify similarly qualified bankers in Frederick or in other markets, it will delay opening divisions there, he said.
"Our timing is really based on being able to hire the right people," Mr. Anders said.
