Growth-Starved W.Va. Thrift Taps Fla. for Borrowers
Thompson, Laura K., American Banker
Unable to dig up much gold among the coal mines, a small West Virginia savings and loan is venturing into one of the nation's most affluent areas.
Ameribank Inc. of Welch, W.Va., won approval from the Office of Thrift Supervision this week to open a branch in Palm Beach Gardens, Fla., where the median income is nearly triple that of McDowell County, one of the poorest counties in the nation's poorest state.
Ameribank has been healthy for a long time, says Jim Sutton, its vice chairman, "but try as we might, our loan portfolio will not grow in this county -- so we have to go somewhere else, where there is significant loan demand."
The $80 million-asset thrift, which has operated only in West Virginia's coal-mining country for nearly a century, is likely to open the Florida branch in mid-July, he said. In the long term it plans to open more branches in Florida and eventually move its headquarters there, Mr. Sutton said.
"I imagine at some point we will be a Florida bank with some West Virginia branches," he said.
As one of the fastest-growing states, Florida holds undeniable allure for institutions in slow-growth or, in Ameribank's case, no-growth markets. Since the mid-1990s dozens of banks and thrifts have expanded into the Sunshine State by making acquisitions or building branches.
Though there is evidence that Florida is becoming saturated, Mr. Sutton said that Ameribank is almost out of lending options in its home county. McDowell's per capita income was $16,347 in 2001, compared with the national average of $30,413, according to the Bureau of Economic Affairs; its unemployment rate in April was 11.8%.
With its economy at a virtual standstill, the thrift's loan-to-deposit ratio was a paltry 38.15% as of March 31, versus nearly 78% for other thrifts with less than $100 million of assets and 103% for all thrifts.
Its total loans have been declining steadily over the last four years, despite the fallout from First National Bank of Keystone's failure. When the $1.1 billion-asset bank, which was also based in McDowell County, was shut down in 1999, Ameribank acquired $135 million of its local deposits.
Though McDowell's neighboring counties are better off economically, they are overbanked, so adding branches in those markets is not an option, Mr. …