Florida bank joins Charleston lending lineup

Joseph R. Catti is president and CEO of Finemark National Bank & Trust and its parent company, FineMark Holdings Inc.

They flock to historic Charleston from their homes in North Carolina, Georgia, Tennessee and Alabama. Others come from as far away as California, New Jersey and Pennsylvania.

Not tourists. Banks.

Florida is the latest of the lower 48 to be represented in the local brick-and-mortar lending lineup.

FineMark National Bank & Trust is quietly gearing up operations at a newly opened branch on Daniel Island.

On the surface, it appears to be an aberration — a remote far-flung outpost for a company that has no East Coast presence north of Palm Beach. In reality, it’s not that much of a stretch, according to FineMark CEO and co-founder Joe Catti.

“It was a bigger leap when we went to Scottsdale, Arizona,” Catti quipped last week.

While its core operations are concentrated in upscale locations in the South Florida market, Fort Meyers-based FineMark has demonstrated it isn’t averse to setting up shop — selectively — well beyond the sun-baked Southeast corner of the country. In the Phoenix suburbs, for example, the Sunshine State bank opened its second branch last year.

The board approved the South Carolina expansion late last year and hiring began in January.

“We believe Charleston is similar to our markets in Florida and Arizona and are expecting early success,” Catti wrote in the bank’s 2015 annual report.

The seemingly scattershot expansion strategy isn’t random, the CEO said. The Scottsdale play, for example, was prompted by a longtime friend and banker who lives there and now runs the desert operation.

“In our business, which I think is similar to many businesses, it’s really about the people,” Catti said last week.

Similarly, he is relying on Mike Drohan, formerly of South State Bank, to build the Charleston bank, which offers traditional loans and niche services such as private banking.

“I’ve known him since 1993 from Fort Meyers, and he’s been in Charleston for the past eight or nine years,” Catti said of Drohan. “I have a lot of trust and confidence in him. That’s how we ended up in Charleston.”

FineMark is the latest entrant in a parade of out-of-

market banks that have marched into the region, where the big attractions include a diversified, high-paced local economy and a

fast-growing population. Alabama’s ServisFirst and Memphis-based First Tennessee are among the other newcomers of recent years.

Two others — BNC of North Carolina and United Community Bank of Georgia — have made the boldest moves by acquiring outright the established local franchises of Southcoast Community Bank and Tidelands Bank, respectively.

FineMark isn’t quite like most of the other Johnnies come lately. It’s smaller, for one, with just 11 branches spread over three states. And the bank is privately held, though it acts like a publicly traded company judging from the financial reports it posts on its website for anyone to read.

The numbers in them tell a growth story.

FineMark was founded in 2007, right before the last financial crisis. The bank seeks out customers who want “long-term, high-touch relationships,” according to its website.

It’s done pretty well. Since 2011, loans have swelled almost threefold to more than $800 million, while deposits have grown to almost $900 million from $343 million. Last fall, FineMark surpassed the $1 billion mark based on total assets.

“We have been very fortunate in to grow at such a rapid pace since our ... inception,” Catti said in an October statement after hitting that 10-figure milestone. “We believe if we do the right things and deliver unparalleled service to our clients, positive things will continue to happen.”

FineMark followed that up by raising $45 million from investors in a private stock sale to pay down debt and to fund future growth opportunities.

The bank has been profitable on an annual basis since 2010. Last year, its net income jumped 73 percent from 2014 to $6.1 million, according to its annual report. In that same document, golfing great Hale Irwin — part of the famous 1991 Ryder Cup team on Kiawah Island and a three-time Heritage winner at Hilton Head — said in a testimonial that he is both a FineMark customer and shareholder.

A startup location for the Charleston expansion washed up amid the merger wave that’s been rolling through the banking industry in the Carolinas over the past few years.

The Daniel Island locale was opened less than two years ago by NewBridge Bank, another would-be newcomer to the coastal market. Plans changed when the Greensboro lender was bought out a couple of months ago. The new owner decided it didn’t want a Charleston office. So it closed it.

FineMark is subleasing the Island Park Drive branch from Raleigh-based Yadkin Bank, which acquired NewBridge and, as fate would have it, announced just last week that it, too, is being gobbled up.

“It not real easy to find real estate in that market,” Catti said of the Charleston region. “So we’re fortunate to find this spot that we’re in.”

How long FineMark stays in that location is an open question. In announcing the Charleston expansion, Catti told his shareholders that the bank would likely seek a more permanent space later.

“We don’t have a long-term lease,” Catti said Wednesday. “But it will be long enough for us to get settled in and know where we want to be in that market.”

Contact John McDermott at 843-937-5572.