Sabadell Focuses on South Florida Law Firms
|Dwight Hill and Mario Trueba|
Sabadell United Bank takes a great deal of pride in its reputation as a lawyer’s bank. “Many people in the financial world think a law firm is a law firm is a law firm,” says Dwight Hill, executive vice president. “We know law firms are different, just as lawyers are different. When looking at their financial issues, we consider many things, like the nature of their practice areas, the firm’s size and scope, and the way they run their business.”
Mario Trueba, CEO, of the Miami-based institution, says the bank has a long history of serving professionals that predates its Sabadell ownership. “Dwight and I have been working together for more than a decade, and half of our staff has been here 10 years or more,” Trueba says. “As a business bank, that longevity and experience helps us better serve our professional clients. We can also assist their clients in financing real estate transactions, mergers and acquisitions.”
In August Sabadell acquired Palm Beach-based Lydian Private Bank, which was closed by federal regulators, and will now play an even greater role in the South Florida market. “We always viewed Lydian as a quality franchise, particularly in the private banking and wealth management area,” says Trueba. Sabadell plans to retain Lydian’s Palm Beach building as headquarters for its newly acquired private bank and wealth management operations, four other Lydian branches, and most of the bank’s 150 employees.
Prior to the acquisition, Sabadell United Bank had 19 branches in Miami-Dade, Broward and Palm Beach and assets of more than $2.3 billion. As of June 30, Lydian Private Bank had approximately $1.7 billion in total assets and $1.24 billion in total deposits, according to an FDIC statement. Now, Sabadell has more than $4 billion in assets and 25 branches in six counties.
“This is a strategic acquisition that will give us a broader geographic service area, and expanded private banking services,” says Trueba. “Lydian Private Bank’s business model fits in well with our commitment to be a trusted advisor for professionals, commercial enterprises and high-net-worth individuals.”
A Changing Banking Landscape
Sabadell United Bank has maintained a steady course over the past decade, despite a changing banking landscape. In 1998, Mellon Bank purchased Miami-based United Bankshares, Inc., a year before the holding company became Mellon Financial Corporation.
Nearly a decade later, Mellon Financial Corporation merged with The Bank of New York to form BNY Mellon. But two years after that 2007 merger, BNY Mellon decided to exit the commercial banking business in Florida by selling Mellon United National Bank. “BNY Mellon took a collaborative approach with the executive management team in finding a good outcome for the bank,” says Trueba. “We looked at several options, including selling the bank to a private equity firm or joining an existing bank that would provide ‘fire power’ to the balance sheet.”
Trueba says the team decided to look for a “strong parent” that wanted to be in the South Florida banking sector. “We wanted the best fit, not just for our clients but for our colleagues as well,” he says, noting the bank had about 450 employees in the three counties.
One of the leading contenders was Sabadell, which had been operating a full-service international branch in Miami since 1993. That bank, Sabadell International Bank, handles international banking, trade and project finance and is under separate management.
Trueba says the Mellon team felt Sabadell would be a good fit for the domestic market as well. In July 2009, BNY Mellon announced the sale to Sabadell, and the transaction closed on January 14, 2010. One of the first events hosted at the renamed Sabadell building on Brickell Avenue was the South Florida Legal Guide’s 2010 annual reception for Top Lawyers and CPAs, which coincided with the publication’s 10th anniversary.
“The marriage has worked well for everyone,” says Trueba, noting that the bank recently renewed its lease for another ten years. “It’s been a very positive experience for everyone. We have a strong, clean, U.S. bank that’s here to serve professional and business clients and keep on growing.”
A Focus on Professionals
Sabadell’s business model is focused on serving professionals, businesses, owners and other high-net-worth individuals. “If we service the professionals well, they tend to refer us to clients,” says Hill. “It’s all about the level of service we provide as a trusted advisor.”
Trueba says Sabadell’s attorney clients range from sole practitioners to the state’s largest law firms. “We have no thresholds and we serve attorneys across all legal disciplines, including multispecialty and niche practices,” he says. “We know that liquidity and profitability are the financial keys to a successful practice.”
For lawyers and law firms, Sabadell’s services extend well beyond traditional business banking. “We do everything from finance startup firms to helping senior partners develop exit strategies, such as selling the firm to its junior partners,” Hill says. “For individual attorneys, our services are also very comprehensive.”
Hill adds that the Sabadell team takes time to counsel young lawyers who are just getting into the profession. Despite lengthy law training, they usually have plenty of questions about business. “We discuss things like how to create a business plan, develop a budget and set financial goals,” Hill says. “If they are creating a new firm, we may refer them to experienced accountants and attorneys who can help them structure a new practice appropriately.”
Sabadell can also advise on the most common financial issue facing law firm’s in today’s market: slow-paying clients and cash flow problems. “We can help firms with liquidity issues to support their receivables,” says Hill. “We also have the capital to support their growth plans.” For instance, the bank recently financed the build-out of new office space for a relocating firm.
“In today’s market, many law firms are wondering if it makes sense to move to a new location, or whether to buy or lease their space,” Trueba says. “The right answer is not the same for everyone.”
But a key factor is the nature of the practice and client perceptions of the firm, adds Hill. A high-profile downtown firm, for instance, may not want to move to an out-of-the-way location. On the other hand, a smaller firm whose clients rarely come into the office might have no trouble relocating to a building closer to the partners’ suburban homes. “Now is a good time to consider those types of space issues,” says Hill. “Real estate prices are down and law firms are in a stronger position to negotiate leases.”
Another key issue for older attorneys, accountants and other professionals is realizing the value of the practices they have built. “I have friends in their 60s who love their practices, but don’t have a solution to that issue,” Hill says. “While accountants can often sell a practice to a national firm or bring in outside investors, those strategies are difficult for law firms. As a result, we often try to identify the next generation of leaders within a firm and develop a succession plan.”
As for Sabadell United Bank, Trueba says the dynamic regional institution plans to continue growing while retaining its responsiveness to the needs of professionals. “We hope to build a statewide organization that feels like a community bank,” he says. “Ultimately, our goal is to bring value to our clients and help them achieve their goals.”
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