KeyWorth Bank

KeyWorth Bank’s lending team—From left, Mark Bryant, SBA lending manager; Jim Pope, CEO; Neil Stevens, president and chief operating officer; Chris Braun, senior commercial banker.
KeyWorth Bank’s lending team—From left, Mark Bryant, SBA lending manager; Jim Pope, CEO; Neil Stevens, president and chief operating officer; Chris Braun, senior commercial banker.

Doctors and Dentists Keep Lending Healthy in Georgia

KeyWorth Bank
Johns Creek, Ga.

Assets: $382 million
Retail locations: Six
Full-time employees: 53
Chartered: 2007

Doctors and dentists help keep a community healthy. Keeping those medical practices financially stable, in turn, often takes the services of a community bank.

KeyWorth Bank in Johns Creek, Ga., has grown its commercial lending by meeting that need for many health care providers in its community. “We think it’s important that, as a community bank, you have a specialty and not try to be everything to everybody,” explains Jim Pope, CEO of KeyWorth Bank, a $382 million-asset community bank serving north Atlanta. “So our niche has been medical banking.”

Pope explains that lending to medical and dental practices composes about 30 percent of the bank’s business. Other business lending makes up most of the rest, while about 5 percent is residential mortgages. “While we offer all bank services and we can handle retail customers, the far majority of our lending activity is to small and mid-sized businesses,” he points out.

Tough timing

KeyWorth Bank was founded in 2007, right before the mortgage lending meltdown of 2008, which struck Atlanta’s booming housing market extremely hard.

“By mid ’08 it looked pretty rough,” Pope recalls. “And I think our business model—of staying diversified and focusing on asset quality as our number-one priority—helped us get through that without any real bumps. We just were committed to making sure we underwrote our loans properly and that we didn’t get heavily into development and construction lending—that we stayed diversified. And that really paid off.”

Today, KeyWorth Bank operates six retail locations focusing on serving Atlanta’s northern suburbs. The area’s income demographics are stronger than Atlanta as a whole, Pope says, and businesses recently have been expanding and hiring. “People are much more encouraged,” he points out. “Business owners are a lot more optimistic.”

A medical focus

KeyWorth Bank adopted its focus on medical and dental practices from its start eight years ago. Serving that market well involves paying attention to broad trends and issues that affect health care overall, such of course as the Affordable Care Act.

“We understand the medical business,” Pope offers. “When you get your niche, you develop a reputation in that industry, so you’re sought after by that type of industry as the place to want to bank.”

Some competing banks have left real estate lending and are now trying to encroach on the health care market, Pope says. That has put some downward pressure on KeyWorth Bank’s lending margins, but its spread between cost of funds and loan yield remains a healthy 450 basis points.

Meanwhile, the bank’s overall business lending has been growing about 8 to 10 percent per year until last year, when it jumped to 15 percent. That’s because the bank has recently placed more energy into diversifying its medical lending with more commercial and industrial lending, Pope says, which included focusing more marketing and sales toward those businesses.

Part of that jump in commercial lending can also be attributed to an experienced Small Business Administration loan officer the bank hired about two years ago, Pope says.

“As the economy has improved, there are more and more business startups or businesses that have been around that need to expand, and SBA lending can meet that need,” he explains. “The premiums that you can get on the guaranteed portion of SBA loans are very attractive, so that’s been a nice enhancement to our other income category.”

For the remainder of 2015, Pope says the ongoing prescription for success for KeyWorth Bank is to continue growing its health care lending, along with a steady dose of other business lending and an increase in residential mortgages.