14 Aug, 2015

How Apollo Bank cracked $500M in total assets

Miami-based Apollo Bank was created after Chairman and CEO Eddy Arriola and his team purchased a distressed bank in 2010. Now, five years later, Apollo Bank has reached $500 million in total assets, a significant size milestone on its climb toward $1 billion in assets – when banks can really begin to capitalize on economies of scale.
Arriola breaks down how the financial institution accomplished this feat when other similarly sized banks have been losing assets, and provides his take on the South Florida banking market. His answers have been edited for clarity and brevity.

How did Apollo Bank reach $500 million in total assets? We closed the acquisition [of First Bank of Miami] a year ago. After that, we had some time dedicated to integration. Then we really started marketing more aggressively toward the end of last year. Now is when we really started to build on that. We see a lot of folks who know what we are now who didn’t know a year ago. Following the acquisition, we were able to go after new clients and develop existing relationships. The momentum post-acquisition really helped.
The $500 million and $1 billion milestones are significant. There is a critical mass when you hit $500 million – you have better service, etc. But there are issues specific to the $500 million to $999 million range, and then there are some real issues after $1 billion that are different.

What’s the plan for sustained growth? The “what’s next” is sort of twofold. The first is nothing sexy; it’s to keep providing great service and keep getting our name out into the market. We want to grow and we are working hard. We are spending more time making sales and getting referrals.
But within the next three years, we would like to do an acquisition. The vast majority of our time is spent on the non-sexy part – making calls. Our preference would be to acquire a bank in Miami-Dade, although we would love to be in other parts of the state. But our preference would be Miami-Dade.

What’s the next significant milestone for Apollo Bank? We would like to be at $1 billion [in total assets] in the next three to five years, and to do that we would have to do an acquisition. Another key for us is to get a 1 percent return on assets. Right now, we’re at about a 0.55 percent return. This basically equates to “we have to make more money.”
We also have to increase our revenue while decreasing our expenses. We have seven branches and about 100 employees, and we have to stay close to seven branches and 100 employees while increasing our revenue. A lower interest rate could help that, but that is out of our control.

What’s exciting about South Florida’s banking market? Overall, there is more consolidation, which is going to continue. That makes the market interesting. There are new competitors coming to the market and how are they going to act, how are we going to respond? Are they going to be aggressive and go after our customer base, or does that mean there are going to be bankers for hire? That’s what excites me, to bring in new bankers and new clients that in the past maybe wouldn’t have opened the door to us.
The big issue is really the consolidation. Everyone is trying to figure out if they are a buyer or a seller. Everyone under $500 million is figuring it out, and most of the time they are figuring out that they are a seller.

Nina Lincoff
South Florida Business Journal


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