The new president of Bay Bank is aiming to take the Lutherville-based institution to a $100 million market capitalization.
It has been a busy year for the community bank. In May, Bay Bank bought $111.1 million in deposits from Slavie Federal Savings Bank and most of its loans after Slavie was closed by federal regulators. The acquisition increased Bay Bank's assets to about $500 million.
The holding company that controls Bay Bank filed last month to increase its stake in the institution. That multibank holding company, H Bancorp, formed in June as part of a restructuring of companies run by brothers Eric and Steven Hovde.
Joseph H. Thomas, the chairman of Bay Bancorp, took over as president and CEO after Kevin B. Cashen resigned this month.
Thomas says he wants the bank to keep growing. He wants the market capitalization, now around $48 million, to reach $100 million.
He says that could involve future acquisitions.
"We are continuing to pursue the vision that we had when we started the bank, which I think is best summed up in the phrase 'a bank built by entrepreneurs for entrepreneurs,'" Thomas told The Baltimore Sun. "We believe we have the ingredients for success to make it to that $100 million mark."
Many smaller banks are looking to grow or combine, says Bert Ely, a banking consultant based in Alexandria, Va.
"A lot of banks want to grow because of increased regulatory climate cost — it's a way to enhance share value," he said. "Assuming they can do it successfully. That's always the question mark, can they do it soundly along the way?"
Ely says growth might not come easily.
"The challenge is there are other banks that want to make acquisitions too," he said. "It's great to have those goals, but execution is going to be key."
Bay Bancorp lost nearly $1 million in the third quarter as it absorbed the assets and deposits of Slavie.
H Bancorp consists of the Hovde brothers' ownership interests: Bay Bank parent Bay Bancorp, West Coast-based Sunwest Bancorp Inc., and Jacksonville, Fla.-based First Atlantic Financial Holdings Inc. Thomas is also the president and COO of H Bancorp and an executive with Hovde Private Equity Advisors.
H Bancorp, which has about $1.69 billion in assets in its subsidiaries, currently has about 22 percent of the voting shares of Bay Bancorp. H Bancorp filed with the Federal Reserve in November to increase its stake in Bay Bancorp to nearly 40 percent. The filing has not yet been approved.
Thomas said the move was intended to give the Hovdes the option to purchase more shares of the bank "at a time where we think our stock is not trading where we think it should trade."
Hovde Private Equity Advisors invested $24 million through a fund to relaunch Bay Bank in 2010 after the failure of Bay National Bank. The bank installed Cashen as president after the relaunch.
Eric Hovde launched an unsuccessful Republican primary bid for the U.S. Senate in Wisconsin in 2012. In a financial disclosure statement obtained by the Milwaukee Journal Sentinel, he reported assets ranging from roughly $58 million to $240 million, including $5 million to $25 million in assets held through Western Acquisition Partners, a bank holding company. Western Acquisition Partners was one of the companies restructured into H Bancorp.
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