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Business 2005

Small banks do big business being nearby

By making it easier for local residents and businesses to get services, community banks continue to thrive.

By ABHI RAGHUNATHAN
Published February 13, 2005


It's no secret that fast-growing Hernando County draws big businesses - and big banks - with ease. But 2004 saw a continuation of the trend of smaller community banks establishing themselves in the region.

Executives of community banks say there is a yearning among Hernando residents for neighborly transactions that don't have to be approved in Tampa or Orlando or Atlanta.

They also say ensuring friendly service that larger, national competitors cannot offer has helped them set root. And many plan to expand their existing services or open new branches in the coming years.

Take Cortez Community Bank. Since its opening in January 2004, it has built up $36-million in assets, far more than the $25-million executives anticipated.

The business outlook for this year is just as bright, with new homes popping up all over the county and small businesses setting up shop. Cortez's president and chief executive officer Don Page said many customers like having the ability to come up and talk to him.

Because Cortez is based in Brooksville, he said, decisions on issues such as granting loans are often made with speed since no distant offices have to be consulted.

"People don't have to wait three, four, five weeks," he said.

Of course, large institutions still have a strong presence in the county. According to June 2004 figures from the Federal Deposit Insurance Corp., SunTrust Bank still has 46.66 percent of the market share in Hernando, followed by Bank of America, which has 20.87 percent.

Still, that has left plenty of room for homegrown competitors to make their mark. Several other institutions have each claimed a small share of the remaining 32.47 percent of the market. Many institutions have just a fraction of the business - between 0.66 percent and 8.08 percent.

Morris Porton, senior vice president of Community National Bank of Pasco County, said the bank plans to open a second branch in Hernando County by the third quarter of 2005. He expects a third branch by 2007.

That's a fast pace for a bank that had modest beginnings in Hernando. It began as a storefront operation in Spring Hill in August 2002; in June 2004, the bank opened a permanent facility on Cortez Boulevard.

"People can call here and get me" instead of a machine, Porton said. "We make our decisions locally."

One factor driving the growth of community banking, Porton said, is the rise in small businesses in the county. He said the bank makes an effort to reach out to professionals. For example, it will courier documents to professionals such as doctors with small practices.

"A lot of small business owners ... are the business," he said. "We'll work around their schedules."

Hometown banks aren't the only ones planning expansions. David Alberson, community president for Capital City Bank, said plans for his bank call for an additional five to seven branches in Pasco and Hernando counties over the next five years. That's up from three branches in the area now.

Like other banks, Alberson has seen a demand for loans from both new home buyers as well as business owners.

"It's a growing market and projected to grow with all the new development," he said.

[Last modified February 8, 2005, 16:44:07]


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