The bank recently announced it has taken office space in Palm Beach Gardens and plans to open a branch later this year. Vista also brought on Dan Sheehan, a co-founder and former CEO of a Florida bank, to lead the expansion.
Vista CEO John Steinmetz said he expects the bank to ramp-up operations quickly in its newest market and grow deposits between $200 million and $250 million in Florida over the next 12 to 18 months.
“We think it’s very reasonable,” Steinmetz said, adding that he will be “disappointed” if the bank does not accomplish this goal.
Vista has $1.4 billion in deposits and more than $1.6 billion in assets as of March 31, according to federal filing.
The failure of First Republic Bank in May, combined with bringing onboard a well-known banker like Sheehan, creates a unique opportunity for Vista to fill a void in South Florida, Steinmetz said. First Republic ranked among the 10 largest banks in Palm Beach County with $2.7 billion of deposits as of June 30, 2022, according to the Federal Deposit Insurance Corp.
“We have been shocked by the interest in that community that the loss of First Republic Bank has provided us,” Steinmetz said. “Call it luck or call it a blessing, but it has just been amazing.”
Vista’s board identified Florida as a possible expansion location about five years ago, Steinmetz said. While other Texas banks have expanded into neighboring states like Oklahoma, Louisiana and Arkansas, he said Vista’s board wanted to target states with the friendliest business environments.
In addition to its reputation as a business-friendly state, Steinmetz said Florida has a growing population due to people relocating there permanently.
“It’s creating billions of dollars of opportunities for deposit diversification and enhanced liquidity,” Steinmetz said.
Florida also has a relatively consolidated banking industry compared to Texas. Fewer than 100 banks operate in the state, and fewer than 50 compete in the Miami metropolitan area. In contrast, almost 200 banks compete in Dallas-Fort Worth.
A more concentrated market, combined with the loss of a major player like First Republic, should give Vista opportunities to compete and take market share, Steinmetz said.
A long-standing friendship between Steinmetz and Sheehan also led Vista to Florida. The two first met at an investment banking conference years ago and have developed a close bond, Steinmetz said. They have often discussed the possibility of working together.
Sheehan stepped down from his position at Coral Gables-based Professional Holding Corp. last year, opening the possibility for him to join Vista. Seacoast Bancorp acquired Professional in February in a deal valued at more than $488 million.
“When you can find somebody that you know, and you know well, it makes it a lot safer to enter and to open a market whether it’s in Frisco or Palm Beach,” Steinmetz said. “[Sheehan] has the experience, the market knowledge and seasoned bankers that want to join him.”
Steinmetz admitted Florida might seem like a geographic outlier for Vista. The bank, founded 111 years ago, has 16 branches located across Dallas-Fort Worth, Austin and West Texas.
“Abernathy and Austin have about as much in common as oil and water,” Steinmetz said. “But as a team, they work really well together. People talk about the distance. Well, Dallas to Lubbock, is a one-hour flight. Dallas to Palm Beach is a two-hour-and-20-minute flight.”
Vista’s expansion to Florida will help fuel the bank’s continued growth at home by creating a new deposit base, Steinmetz said.
The expansion comes as the banking industry continues to deal with the pressure of high interest rates and the aftermath of bank failures. Steinmetz said all of Vista’s capital ratios have remained strong. The bank even saw deposits grow 18.5% year over year in the first quarter at a time when many other deposits experienced outflows.
