C1 Bank menu: Loans, with an app on the side
Kathleen Cabble
C1 Bank is based in St. Petersburg.
Software products developed by C1 Financial Inc. have the potential to add as much as $3.6 million to the bank's bottom line in 2016.
The technology complements the focus on loan growth at St. Petersburg-based C1 (NYSE: BNK), and gives the $1.5 billion bank an opportunity to gain market share, according to a Nov. 14 report from Raymond James & Associates[6].
Through its technology innovation division, C1 Labs, the company has developed several new products, including an iPhone app called Client First that presents a new way to address customer service. There's also an account opening software application, in which a new checking account can be opened in less than three minutes, and a real-time, risk-adjusted return on equity loan calculator for lenders to use to make quick lending decisions.
"In our view, its burgeoning product portfolio has the potential for meaningful revenue enhancement," wrote Michael Rose[7], an analyst for Raymond James. Using a complex formula, he estimated the after-tax net income from the technology at between $100,000 and $3.6 million, or a range of 1 cent a share to 22 cents a share for 2016.
The loan calculator is the most likely to be licensed to third parties in the near term; C1 has had five meetings with outside parties to discuss ways to license the product and will begin second-round meetings later this month, Rose wrote. The Client First iPhone app has applicability beyond the banking world for other businesses where customer service differentiation is key.
Separately, C1 has been growing its loan portfolio, adding $92 million in loans in the third quarter of 2014 and bringing its total loan portfolio to $1.1 billion as of Sept. 30. The bank also is beefing up its lending staff. "With the addition of five lenders in 3Q14 [bringing the total to 25], the strongest near-term pipeline in its history at quarter end, and an improving economic backdrop in Florida, we believe C1 is primed for continued strong loan growth which will be bolstered by increasing contribution from its newer Miami and Orlando markets," the report said. C1's goal is to originate $500 million or more in loans next year, the report said.
The broker-dealer has a "strong buy" rating on C1 and raised its price target to $22 a share. The stock closed at $18.20 a share on Friday, up 5.5 percent from the prior close.
Margie Manning is Quality and Content Editor of the Tampa Bay Business Journal. She also covers banking, finance and professional services.
References
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