Seminole Financial Services in Belleair Bluffs, Fla., A private loan company, makes a lot of money for its investors by funding renewable energy projects. | Business Observer


Bob Banks offers one of the oldest excuses in the book for why, after a successful career in real estate investing, he continues to tap into the business world at 74.

“I failed miserably at retirement,” he says.

But Banks, CEO of Belleair Bluffs-based Seminole Financial Services, is hugely successful in an unusual niche: reshaping the nation’s energy grid. Helped by the other directors of the private investment firm – Ron Campbell, Chris Diaz and Tim Fetter – Banks has made Seminole one of the main sources of funding for renewable energy projects, like solar and wind farms, in the United States and around the world.

“The numbers behind a deal may sound interesting, but these are the people behind the deal [that matter]. If you don’t feel comfortable with the people involved, don’t do the trick. Bob Banks, CEO of Seminole Financial Services

Its success came quietly – the company doesn’t advertise, and hasn’t funded many projects in Florida, a notoriously solar-resistant state – but the numbers are stark: nearly $ 1.5 billion worth of renewable energy projects funded in just a decade. Thanks to the trust of several Michigan-based pension funds, he also has significant private equity funds, which he can use at his discretion.

“We’re a sleepy little business and no one knows what we’re doing, but our investors couldn’t be happier,” Banks says. “I think they just like us.”

Banks says he has more reasons to return to his trade once again. In 1999, the Clearwater-based company he retired from, Midland Companies, was sold to what is today known as MMA Capital Management LLC, a NYSE-listed company which, in the words of Banks, was “more Wall Street than Main Street”. In other words, it wasn’t a good fit for Midland, which was a more conservative company focused on funding government-backed affordable housing projects.

“They had a different mentality,” he recalls. “It wasn’t wrong, just different.”

Banks became executive vice president of the combined company and helped with the transition. He retired in 2003, although he remained a shareholder until 2008, he says, “when profitability plummeted”.

TEAM ASSEMBLY

Sensing that he had let down the pension funds that had placed their trust in Midland – some of whom he had worked with since the early 1970s – Banks was determined to make amends. This led him to form Seminole, in December 2008. He brought in people he had known from Midland, but also made key outside hires, including Campbell, whom he hired away from the Lightning. of Tampa Bay, where Campbell had spent a decade as president. of the hockey team. Campbell was part of an executive team with the Lightning that turned the team’s fan experience into one of the most recognized in professional sports.

Seminole Financial Services’ latest local project is a 9.29 megawatt ground-based solar power system in Bartow, Polk County, for which the company has provided a $ 9.05 million construction loan. Courtesy photo.

Campbell is Seminole’s CFO and resident “athlete”. Golf trophies adorn his desk and his resume also claims a stint as CFO of the NBA Detroit Pistons. Michigander by birth, Campbell knew next to nothing about real estate investing before joining the Seminole team in 2009 and had to take real estate classes to get up to speed.

“These guys all make my job easier, and Bob has been a phenomenal mentor,” he says, adding that he appreciates Seminole’s low-key and balanced approach to doing business as opposed to heartbreaking ups and downs. Sport. “We have a lot more stress in our control here,” he says, adding that the Seminole vibe is a lot better “for the ticker”.

Diaz, meanwhile, is the negotiator, spending around 80% of his time out of the office meeting with developers of renewable energy projects in need of financial support. Diaz had worked in Midland but came to Seminole from Credit Suisse. Banks says he’s the reason the company started looking for opportunities in renewable energy.

Banks recalls, “He said ‘Bob, have you ever thought about renewables?’ And I said, ‘Uh, I don’t even know what it is, to be honest with you.’ “

In Midland, Banks had made a myriad of construction loans – well over 2,500, by his estimate – for affordable housing projects, but renewables were new ground for him. So, with Diaz in tow, Banks attended renewable energy conferences and met developers on the West Coast. Diaz heard about a wind farm proposal in Washington state that was backed by two big banks – who were lining up to buy tax credits affiliated with the project, which is another way Seminole is earning money. money for its investors – and a $ 5 million State Grant. But the developer needed an additional $ 5 million for the construction.

“I felt pretty sure that even being new to the business, we couldn’t screw this up,” Banks recalls. “But it was the most complicated deal we’ve ever made… it was the very first and it looked like it was never going to be done.”

Diaz is also Seminole’s solar energy referent in Florida. He sits on the boards of advocacy groups and occasionally travels to Tallahassee to advocate for the company’s cause. “We’re just trying to explain to them what’s going on in the country,” Banks explains. “We contribute to national causes… it’s something we believe in; this is a good thing. But we are not the type to “fall on our sword” either. We don’t get mad if someone doesn’t believe it [renewable energy], but we think it’s a good thing that’s going to be here forever and that’s the direction the country is heading.

Another key employee is Fetter, a veteran of MMA Financial and Raymond James. He was an early employee of Seminole and rose through the ranks to become executive vice president of credit and risk management and oversees underwriting, loan management and asset management. In other words, it reviews and structures the deals that Diaz brings – a crucial function – but Seminole also has a third-party investment committee that reviews all potential deals.

‘NO DUMB BUSINESS’

As a private lender who doesn’t have to operate within the same boundaries as the big banks, Seminole is not only nimble, but can also be very selective about who to do business with.

“We are business people, not bankers,” says Banks, “and our motto is ‘no stupid deals’. The numbers behind a deal might sound interesting, but these are the people behind the deal [that matter]. If you don’t feel comfortable with the people involved, don’t do the trick.

Campbell adds, “Do business with the people you love to do business with. That’s been a big part of our success here, and the success we’ve had with our banking relationships and that sort of thing. You get to know someone, you say you’re going to do something and you do it, and then you gain credibility.

The co-directors of Banks and Seminole apparently have a knack for sniffing out “dumb” deals. They’ve helped fund 230 projects from that first wind farm in Washington state, and not a single one has collapsed, according to Banks.

A WIND OF CHANGE

Seminole doesn’t change his approach much, whether times are good or bad. Banks says directors formulate a budget each year and try to forecast where they might look to make deals, but due to the rapid pace of technological change in renewables, “we don’t sit down and don’t have a plan. quinquennial or whatever, Banks says. “We look at it more like, ‘whatever comes our way.’ In two years, we might be doing something that we’re not even talking about right now. . “

The company will fund a handful of student housing projects in college towns in remote places like Montana and Arizona this year, but will focus primarily on renewable energy. “We think the real estate market is at its peak… there’s going to be a train wreck in the next couple of years,” Banks says, “so we’re kind of holding back and just dealing with developers that we’ve had a great time with. a lot of experience with.

Seminole refuses to disclose his earnings numbers – Banks, who doesn’t take a salary, says it’s “substantial” and “we’ve been profitable every year, enough that we’ve established a net worth north of eight digits.” – but forecasts a growth of 20 to 25% in 2018 thanks to its status as an approved lender under the American Department of Agriculture’s Rural Energy Loan Program (REAP). “This will give us the ability to make more permanent loans,” he says, “which we haven’t been able to do as much. “

As well as keeping a low profile and being selective about its clientele, Seminole’s success can also be attributed to its conservative roots in Midland. Although his portfolio today is made up of 20% affordable and student housing and 80% renewable energy, he sees “growth as a by-product of excellence,” in Banks’ words, as opposed to to an end in itself.

“It’s not like we’re smarter than everyone else,” he says. “We have a way of doing business that works for us and we want it to stay that way. We all know the people we deal with and are very happy with the volume we have… we don’t want to get ahead of ourselves. When money pursues people, bad things happen. You start to stretch to close business just because you have the money there. “


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