904 356-JOBS (5627)

904 356-JOBS (5627)

Valley Bank CEO on Florida: ‘It’s all booming, and it’s growing in the right way’ (Courtesy of the Jacksonville Business Journal) — Valley Bank CEO Ira Robbins (pictured above) reflected on the bank’s entrance to the Florida market in 2014 while visiting Tampa Bay this week, saying the region’s continued growth justifies the millions of dollars the bank has poured into the state.

The New Jersey-based bank saw the state as a viable alternative to the Northeast marketplace and aimed to build out a third of the franchise here, he said. Now, Valley Bank’s Florida footprint accounts for 40% of the entire organization’s $43 billion in assets, with over 1,000 employees and 50 locations throughout the state.

“When we first entered Florida, there were definitely geographies that performed better than others,” Robbins told the Tampa Bay Business Journal in an exclusive interview. “But there really isn’t an area today that doesn’t warrant additional capital and resources. It’s all booming, and it’s growing in the right way.”

The state’s economic momentum is a sharp departure from years past, he said, and the impact of rising interest rates, historically high inflation and a recession will play out differently in high-growth markets.

“There’s too much money sitting out there, but in Florida, it’s not just the excess money; it’s the fact that you have much more demand as a result of people moving down here,” he said.

Valley Bank has one location in Jacksonville, on Deerwood Park Boulevard.

Robbins drew a comparison with Valley Bank’s home state in New Jersey, where demand is driven by excess liquidity and not so much the tailwinds of population migration like in the Southeast. Rising interest rates will have a more significant impact on the Northeast’s economic growth, he said. “It’s likely going to slow down dramatically.”

The economy will slow down in Florida, too, but the impact of tightening monetary policy won’t be nearly as dire, he said. The local differentiation of rising interest rates will be “very difficult for Congress and the Fed to deal with.”

“You could argue that in the Northeast, maybe [the Fed] doesn’t need to raise rates after you get to the next 50 or 75 basis points, whereas in the Southeast, you may still have a lot of inflation, which will require something different.”

The corresponding increase in funding costs from rising rates is yet to be seen, Robbins said. Deposit betas, which increased by a negligible amount for most banks in the second quarter, typically lag behind rate increases by three or four fiscal quarters, but Robbins suspects they will rise sooner than they have historically. Banks will have challenges funding their overall growth and need to be more selective with lending, he said.

The local autonomy of Valley Bank executives gives the bank a competitive edge and nimbleness to navigate the changing macro environment, he said. The bank’s leadership in Florida, for example, has local credit decision authority for loans up to $40 million.

Valley Bank operates in the middle-market banking space, which Robbins described as an underserved but highly lucrative niche.

“It’s unique for a bank of our size to have a community focus,” he said. “Either you’re a very large organization that has the scale to do large projects for local borrowers but don’t understand what goes on in the local market, or you’re too small and may understand the local geography but don’t have the balance sheet or scale to serve the niches of individual communities.”

A number of the bank’s senior executives reside across the state, including Joseph Chillura, the senior executive vice president of Valley’s entire commercial banking operations, as well as executives in West Palm Beach and Fort Lauderdale.

“Florida is a huge focus for us, and it’s not just allocated capital, which you see with the prominent role that [Chillura] has within the organization,” he said. “We have a model where there is a lot of empowerment and trust across the entire employee footprint.”

Photo courtesy of Business Observer