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Charge of the Commercial Lending Troops

ServisFirst charges the streets with a top team of pavement-pounding commercial lending officers.

Pictured: Vince DiChiara, William Hawkins, Rosemarie Chambless, Mike Thomas, Nick Petelos.

Pictured: Vince DiChiara, William Hawkins, Rosemarie Chambless, Mike Thomas, Nick Petelos.

Photo courtesy of ServisFirst

Back in 2014, Vince DiChiara says he was ready for a change. After a 42-year career that included time as the business sales manager for Regions Bank in Birmingham, retirement looked like a good deal. 

Some mornings, while on his way to work, he would stop by a local Starbucks to pick up a blueberry muffin, he says. And on several of those occasions, he ran into an old acquaintance who was a development officer at ServisFirst Bank. After learning that DiChiara was contemplating retirement, the development officer asked him to consider starting a new career at ServisFirst.

“The more I learned about ServisFirst, the more interested I got,” DiChiara says. “I knew that when I retired from Regions, there was something I was going to do. I just wasn’t sure what it was.”  

DiChiara eventually accepted the job and says that once word got around that he was moving to ServisFirst, some of his colleagues began inquiring about the bank as well. This past April, ServisFirst announced it had hired DiChiara, as senior vice president and commercial group leader, plus four more Regions Bank colleagues to help lead the expansion of ServisFirst’s commercial banking division in Birmingham. The new hires included Senior Vice President Mike Thomas, Vice President of Commercial Banking Rosemarie Chambless and Nick Petelos and Will Hawkins as first vice presidents. 

“We’re thrilled to have them,” says ServisFirst President and CEO Tom Broughton. “They’re experienced bankers, and they know what they’re doing. They have deep roots in the Birmingham community, and they know a lot of people. It is fun to see them get to be successful, and they’re having fun again. It’s been good for us.”

Birmingham, says Broughton, is where he sees opportunity for growth in commercial lending and serving new clients. 

Broughton founded the full-service community bank, a subsidiary of ServisFirst Bancshares Inc., in 2005. Headquartered near Birmingham, the bank has spread to Huntsville, Montgomery, Dothan, Mobile, Nashville and Pensacola. This past January, the bank hired four commercial bankers in Charleston, South Carolina, and closed on its acquisition of Metro Bancshares Inc., in the Atlanta area. 

The following month, ServisFirst hired James Gardner, a banker with more than 30 years of experience, as senior vice president of commercial banking. Gardner is tasked with building a customer base in Knoxville, Chattanooga and several other cities in east Tennessee. 

“The reputation that ServisFirst has as a great community bank and private bank made me consider strongly what I wanted to do for the remainder of my career,” says Thomas, a former business banking senior vice president. Thomas worked at Regions for 38 years and, like DiChiara, says he was contemplating retirement when he got the job at ServisFirst.  

“It looked like a great fit with some very good people who had joined the organization and told me good things about it,” Thomas says. “It was a place I felt I could be successful.”

Petelos joined ServisFirst after working as a vice president of business banking relationship manager. Hawkins was vice president of business banking and Chambless was the business and community banking relationship manager. 

“We wanted to look for good bankers in a good market,” says Broughton, “and that’s all we’re looking for. We don’t want people to come here for a raise. We only want people to come here to take care of their clients better. That’s what I tell people.” 

ServisFirst’s aggressive strategy for targeting well-established companies with good track records, and giving its officers the flexibility to get back to clients quickly with loan decisions, DiChiara says, was a big draw for him. 

“It has a common sense approach to banking that was around in the early 1980s in the banking industry,” DiChiara says. “This bank is also all about giving its officers the ability to be out in the streets as much as possible. I think that in a 40-hour week, he [Broughton] would prefer us to be out in the streets 39 hours, because that’s where business is done. Ninety-nine percent of my time is in the field, making joint calls with my teammate. We just don’t have a scenario where we get stranded in the office with behind-the-scene things that can bog you down.” 

ServisFirst is known for its strategy of not having a large branch network. With just 16 brick-and-mortar branches, the bank has an efficiency ratio of 46.19 as of March 2015, according to the FDIC.

“They’re [ServisFirst] one of the best in the industry,” says Jeff Davis, a banking analyst and managing director of the financial institutions group at Memphis-based Mercer Capital. “The bank has, over the last decade, had one of the absolute best track records in terms of growth, efficiency and high returns for its shareholders. I think it says a lot about the operating model and about Tom Broughton as CEO and what he focuses on and his team. It’s a phenomenal growth story.

“What might not be appreciated is that Alabama has been a producer of great banks,” says Davis, “and ServisFirst is just another one in the line, though its growth is maybe more notable than some in the past.” 

Efforts to build up the commercial division in Birmingham came just as the bank reached $4.4 billion in assets at the end of 2014, according to the FDIC. The same year, ServisFirst was one of only two Alabama banks to make it onto SNL Financial’s list of 100 Top Performing Banks in the nation. ServisFirst ranked 57th among banks with assets between $500 million and $5 billion, just behind First Metro Bank in Muscle Shoals, in 55th place. 

ServisFirst’s return on tangible, common equity during the last quarter was 13.7 percent, says Davis, “which is quite good when you consider that a 10-year U.S. Treasury bond yields about
2 percent, so that’s almost 12 percent over that.”     

Last May, ServisFirst Bancshares Inc. priced its initial public offering of 625,000 shares of common stock on the Nasdaq Global Select Market as SFBS, opening at $91 a share. Broughton says the move resulted in the bank raising more than $53 million in additional equity, strengthening its balance sheet and providing opportunities to move into new markets like South Carolina. 

In the meantime, DiChiara and Thomas say they, and the other commercial bankers on the team, are focused on capturing new commercial clients in Birmingham. 

“There are very attractive businesses in the city of Birmingham to bank,” he says. “This is a market that I think most banks underestimate when they’re coming here. There are a lot of good companies here and a lot of ability for those companies to expand if they get the backing of a good bank, which creates jobs and opportunity and all of the good things that come with expansion.” 

Ten Years of “Phenomenal” Momentum

In just 10 years, ServisFirst Bank, headquartered in Birmingham, has moved from start-up status to become one of the state’s top performers. 

Today, ServisFirst has $4.4 billion in assets, $3.67 billion in deposits and year-to-date ROA and ROE of 1.26 percent and 13.52 percent respectively. And American Banker ranks ServisFirst 13th on its list of Mid-Tier Performers in the U.S. with $2 billion to $10 billion of assets, based on three-year average returns on equity for 2012 to 2014. ServisFirst was the only Alabama-based bank to make the list. 

In addition, this past March, the bank’s parent company, ServisFirst Bancshares Inc., came in third out of 306 financial institutions for the Raymond James Community Bankers Cup Award, which recognizes the top 10 percent of community banks. To hear ServisFirst founder Tom Broughton tell it, the bank’s success has exceeded his own expectations.

“I didn’t realize we would be $4.4 billion after 10 years,” he says. “I didn’t realize there would be so many opportunities out of Birmingham. I thought we would be a $1 billion bank in a reasonable period of time, in five or six years. But I didn’t realize that so many mergers would happen and how many banks would get in trouble.” 

Broughton founded ServisFirst in May 2005 after an initial capital raise of $35 million. It was just before the start of the recession in 2007 that burst the housing bubble and devastated banks throughout the country.

His timing could not have been better, says Mercer Capital banking analyst Jeff Davis. 

“If they had been founded two to three years earlier,” says Davis, “they may have had a lot more loans, say in ’04 and ’05 that you might not want in ’08 and ’09. Tom had a phenomenal runway in front of him to drive growth with a blank slate, so there weren’t the legacy loans that one wished one didn’t have going into the downturn.” 

But in the bank’s phenomenal success, ServisFirst recently announced the possibility of moving its corporate headquarters to a new location within the state. Broughton says they have no plans to go out of state and that reports saying so have been misconstrued.

“We are thinking about building a new headquarters,” says Broughton, “but we cannot afford financially to build it without some tax incentives.”

In April, the Homewood City Council voted 5-2 in favor of offering an incentive package for ServisFirst to move its Birmingham-area headquarters to a 4.5-acre lot on Woodcrest Place near the intersection of U.S. Highway 280 and Highway 31. The new facility would cost anywhere from $23 million to $27 million, he says. The incentive package included abatements on ad valorem taxes for up to 20 years.  

Broughton says approval of ad valorem abatements by the Homewood City Council will be a key component in the decision-making process. He says Homewood approved an abatement package on vacant land located within the city limits that will yield an increase in ad valorem taxes collected on that parcel by an estimated $230,000 per annum during the abatement period.

But ServisFirst’s possible move has come under criticism, from some on the city council and in the media who argue the city is offering too much.

“Why wouldn’t we request incentives that are available to us under the laws of the state of Alabama?” says Broughton. “We have created 279 jobs in Alabama over the last 10 years, and we project to create 100 additional jobs over the next six years, which has a positive impact on state and municipal government and our communities as a whole.”

While no final decision has been made yet, the bank is, however, expanding its commercial banking services to new markets in South Carolina, Atlanta and parts of east Tennessee this year. And for now, Broughton says, there will be little fanfare over the bank’s 10th anniversary. 

“It’s another milestone,” says Broughton, “and we’re going to keep looking ahead. I’ve never really believed in celebrating the passage of time, so we just keep working every day, doing what we need to do for the shareholders.” 

Gail Allyn Short is a freelance writer for Business Alabama. She is based in Birmingham.

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