Hopes are high, as a regional bank offers small-business loans, mortgages, and second-chance accounts
By Johannes Werner
Original Air Date: Jan. 10, 2024
Host: The first bank ever will open a branch office in the heart of Newtown on Jan. 26. I repeat: The … first … bank … ever. In a truly historic moment for the majority African American neighborhood in north Sarasota, the representatives of a small regional community bank, plus city commissioners, and – of course – Newtown leaders, cut the ribbon today in what is a pre-opening. The WSLR news team was there.
Johannes Werner: The BayFirst National Bank opening is a pretty rare occasion these days. Not only is this the opening of a new, physical bank branch at a time when most banks — even credit unions — are closing offices and pushing customers online. But the bank is opening a new branch smack in the heart of one of the poorest and historically under-banked neighborhoods.
Carolyn Mason, a former city and county commissioner, says this is a big deal for her, personally.
Carolyn Mason: We’ve come a long way. I was on the commission that did the first Newtown redevelopment plan. And we we envisioned a bank, because we heard that from the community, that they wanted this. But to actually be alive to see it happen is extremely exciting.
Mason
JW: Several banks have maintained branch offices along the margins of Newtown, but most of them have closed.
BayFirst is a small, regional community bank headquartered across the bay, in St. Petersburg. It has 11 branch offices, including one in downtown Sarasota, just a couple of miles from the new branch. The bank is soon a quarter-century old, and it does a lot of federal loan business, through the Small Business Administration. Bauer bank ratings gives BayFirst five out of five stars. This isn’t rare, but it’s an indicator of financial stability.
The Newtown branch will offer full account and loan services, a no-fee ATM, and it’s open five days a week.
So what brings a bank to one of the poorer neighborhoods? Some of it has to do with Newtown’s long history of entrepreneurs and small business. Tom Quale, Sarasota market manager for the bank, explains.
Tom Quale: Well, there’s plenty of small business there. So that’s what we’ve been doing for the last two years, is meeting with these businesses and trying to coach them on how to improve the quality of their financial statements, and get them a CPA or someone to help them file their taxes, so we can actually document their revenue and their cash flow, to be able to afford loans. We are also one of the largest SBA lenders in the country, so we do a lot of loans every month for SBA loans under $150,000. … It could be landscapers, they could be subcontractors, electricians, that are very small at this point, but we’re trying to work with them so they can get the resources so they can grow. We are working with the City of Sarasota. They have a grant program. It’s a matching grant for businesses to improve along the MLK corridor and in that general area. And part of that matching grant can be an SBA loan that we provide. So we’re working closely with the city to help facilitate and help get some of those grants out to businesses.
Quale
JW: Another business opportunity is lending that leads to homeownership, which has been on decline in the neighborhood.
TQ: We also do a lot of residential and consumer lending. Most of the time, the biggest barrier to homeownership is the cash downpayment. So if a family is renting for, say, $2500 a month, we create a program where they can actually buy that home or a nearby home. So, for a family that doesn’t have the cash down payment, we created a product that they can acquire a house and become homeowners.
JW: Will it last? In boom times and low-interest years, community banks typically get swallowed up by larger banks, which then often close branch offices. But in a show of long-term commitment, BayFirst actually bought the land and the building the branch is located in from the City of Sarasota. That includes a police substation on the premises, which the bank will lease to the Sarasota Police Department for a symbolical dollar per year — built-in security, in a way.
Ex Commissioner Mason says this transaction “speaks volumes” about the political will of this Sarasota City Commission.
CM: This city commission sees the value in first leasing to BayFirst, and then selling the building to BayFirst, which speaks volumes about the city commission and its support of not just BayFirst, but one of the oldest communities in the city, the Newtown community.
JW: In another sign of a deliberate, long-term approach, the bank already has a two-year presence in Newtown, by way of a lower-profile loan office. BayFirst has used that time to reach out to the community, Quale explains.
TQ: We actually opened as a financial resource office two years ago. We had two employees, and we were not doing normal banking transactions, but they were meeting with families and businesses to identify what their short-term and long-term needs were, and coach them to get to those long-term goals. So we’ve got the resources that we can help address those needs. And that’s that’s why we’re converting from a financial resource office to a full-service branch.
JW: There are more unusual aspects to the bank’s business. For one, there are a lot of classes.
TQ: Financial literacy courses, budgeting courses … we’ve got a variety of different courses, ranging from a half-hour to two hours. Some we do in four or five, a series of four or five. So it’s whatever that group needs. We’ll create that, and try to help them with the educational aspect of it. We definitely go out to wherever they need the class. Initially, we were trying to get them to come into our location. But we found a lot more success of actually going out to the organization. You know, it could be a church or nonprofit or a school.
JW: And finally, this is a bank of second chances.
High hopes for Newtown: Commissioner Kyle Battie. Photo: Werner
TQ: Well, we’ve got a couple other products that, because of our experience of the last few years, we created. One is a credit builder. So if an individual has bad credit, we created a loan program to help them rebuild their credit. And over a 12-month period, they can make timely payments and it helps them restore their credit. The other is a second-chance checking account for individuals. If in the past they had an account at another bank that was closed forcefully because of an overdraft, they’re not able to go to any other bank to open an account. They get reported on what’s called ChexSystems. So we created this product for people around ChexSystems, to get them back into the normal banking arena, so they’re not relying on these secondary sources, paying a per-transaction fee or a large monthly fee to access their cash.
JW: The expectations in Newtown are high. City Commissioner Kyle Battie talks about “complete and utter revitalization”.
Kyle Battie: Oh yeah, those are the hopes, for a complete and utter revitalization of the business corridor here and the neighborhood, you know.
JW: But first things first: The official opening will be on Friday, Jan. 26. The celebration will come complete with bounce house, food trucks, and Cash the bank’s bigger-than-life puppy mascot.
This has been Johannes Werner, reporting for WSLR News.
WSLR News aims to keep the local community informed with our 1/2 hour local news show, quarterly newspaper and social media feeds. The local news broadcast airs on Wednesdays and Fridays at 6pm.