Interview: Bill Habermeyer

Better terms

SBA lender is focused on helping business owners prosper

What role does the Florida Business Development Corporation play in the Tampa market? We are a Small Business Administration (SBA) lender. We administer the SBA 504 loan program. It’s primarily used for the acquisition of commercial real estate, as long as that acquisition is going to house the employees of that business. The main focus is helping business owners obtain better terms than those available from conventional credit markets. Our focus in Tampa, is to ensure the small business and lending communities are utilizing these programs. As it is a national program, you can identify real, deep disparity between certain parts of the country that use the SBA programs and certain others that do not. A lot of times, it comes down to who is administering it in those local areas. For instance, the state of Florida, and Tampa specifically, has widespread utilization of our loan program, second only to California. Texas is the second-most populated state in the country and program utilization is nowhere even close to the level of utilization in Florida. This is largely due to our ability to administer the programs we offer with greater cost and certainty.

How did your program handle the need among small businesses for outside funding? Ever since the pandemic kicked into high gear in March, our core business has increased in volume exponentially, outside of PPP loans. It is one of those instances where our COO and I were looking at adjusting our budgets for the next half of our fiscal year, worried no one was going to get loans or buy real estate. It turned out to be the exact opposite. We’ve seen a sizable increase in loan volume and demand for us despite the pandemic. Commercial real estate rates are at their lowest since at least 2003. Our government-guaranteed rates are lower than the cost of funds at a bank. Some businesses are going to gain from this and be able to pick up a piece of real estate at a better deal.

What is your near-term focus? Our constant focus is on doing a better job providing access to capital with the 504 loan program. When we realized we could execute remotely, we started hiring people in analytical roles from across the country. We added three employees in California and one in Chicago. It enabled us to constitute an all-star team so that we can meet our drastically increased demand. We’ve invested heavily in remote technology so we don’t lose our sense of corporate culture, togetherness and working for one another. Our challenge will be finding ways to remain cohesive and implementing the right tools via technology will help us conquer that challenge.

Bill Habermeyer

President & CEO – Florida Business Development Corporation

Angel Gonzalez

Regional President – SouthState Bank

Our expectation at this point is to grow our market share within the communities we serve. We are well positioned to gain market share given the efficiency that our new combined company offers along with our investment in technology. It is going to be a race with all the incoming residents to the Tampa Bay market. The EDCs throughout our MSA have done an exceptional job of attracting great companies, headquarters and talent to our area and the question now is how to take advantage of this. We feel well positioned to be one of the leading financial institutions to garner that market share in the area.

( ) probably does not seem like the best strategy but we continue to do the right thing for our clients, our shareholders and it works out. There are ups and downs in our business as there are in any. As long as you are prepared for those and have been running your business conservatively and thoughtfully, getting through these times, while tough, is manageable.”

Top banks Although Tampa Bay’s financial fabric has demonstrated strong resilience to COVID-19’s ripple effects, the sector has not been without its challenges. Amid market uncertainty and volatility throughout 2020, deposits leader Raymond James Bank reported a $109 million loan loss provision that caused a quarterly earnings dent. Moreover, its own balance sheet was hit with private equity asset revaluation. On the plus side, Tampa Bay’s leading bank showcased a record top-line revenue, close to $2.1 billion in 2Q20, an 11% increase year-overyear. All in all, the bank is poised for growth in 2021.

BofA, another major Tampa Bay player, temporarily closed 60 of its branches, or close to half of its total 121 branches in the region due to the pandemic. The locations were selected based on their low foot traffic and insufficient staffing. Despite following the trend toward digitalization and technological innovation, BofA was still able to make some brick-and-mortar deals last year. In July 2020, it signed two new tenants — Banyan Street Capital and Carollo Engineers — for its Bank of America plaza, located in Downtown Tampa Bay. The new tenants are taking up 24,000 square feet and 11,418 square feet of office space, respectively.

As per its 4Q20 reports, Truist seemed on a roll even amid the prevalent uncertainty surrounding COVID-19. The major Tampa Bay financial player announced a net income of $1.2 billion, up 74.9% compared to 4Q19. Earnings per diluted common share stood at $0.90, a 20% increase compared to 4Q19. The strong results stemmed from a steep decline in the provision for credit losses and buoyant results on its noninterest-generating business income.

The community bank segment in Tampa Bay also performed extremely well in the past year, partly because it took up the slack during the PPP process to accommodate clients that the bigger banks turned down as they were left flat-footed by the rapid stimulus rollout. “Demand has significantly increased, which was unexpected,” said Dalila Rouri, head of Retail Markets for the Florida Region at BMO Harris Bank. “In difficult times such as these, though, businesses find that they need to rely more on financial institutions and their trusted advisers. We started to see the increase

In 2020, the Tampa Bay region raised close to $186 million from 41 venture capital deals

in demand slowly but surely. I think it happened as people realized that this was not going away. Going into a pandemic, no one really knows how long it’s going to last. It gets to the point where there is a renewed focus on the part of customers on how to navigate the shifting tides of finance.”

As of December 2020, total community bank assets amounted to $75 billion, a close to 57% increase from December 2019’s $47.87 billion. South State Bank, Raymond James Bank and the Bank of Tampa sat at the very top with $37.72 billion, $29.07 billion and $2.51 billion, respectively. Community bank deposits totaled $61.85 billion, while net loans and leases in 2020 considerably outperformed 2019 results, with $52.7 billion against $2.7 billion, respectively.

CARES Act and PPP loans On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was passed into law. The $2 trillion stimulus bill to counter COVID-19 included a first round of Payment Protection Program loans to the tune of $349 billion for small businesses across the United States. Two weeks later, those resources were already claimed. A second round was scheduled, totaling $320 billion, which concluded in August 2020. Still a third round was programmed by the end of December 2020 for $284 billion. The deadline to apply for the third round was extended to May 31, 2021 via the PPP Extension Act, through which businesses to whom the loan could apply extended toward contractors and businesses with no employees.

Zooming into Tampa Bay, by December 2020, the Small Business Administration (SBA), which was in charge of rolling out the loans, reported 42 active

Tampa Bay is home to seven Fortune 500 companies.