Lloyd DeVaux, President & CEO, Sunstate Bank

Invest: sat down with Lloyd DeVaux, president and CEO of Sunstate Bank, to discuss key developments in the banking industry, focusing on technological advancements, real estate trends and international banking in Miami and South Florida.

Reflecting on the past year, what would you say have been the main highlights and milestones for Sunstate Bank?

I think, first of all, the pandemic changed a lot of behaviors across the industry. I always tell people that we had customers who swore they would never bank online, but now they have, and most won’t go back. We’ve placed a major focus on technology, like many other banks, particularly in self-service and account opening. In addition, we formed a wealth management company. Now, our goal is to integrate the two entities in a way that complies with regulations—since the bank is FDIC-insured while the wealth management company is not. We want customers to have a complete view of their relationship with us through an electronic portal or app, where they can review transactions, open accounts and manage their finances in real-time. We have several key updates being launched in the middle of this year, adding to what we’ve already implemented. By the end of the year, we hope to have both applications fully merged, giving customers a seamless experience across all our services.

Looking at the banking and financial industry in Miami and South Florida, what’s your overall assessment of the current landscape?

Right now, banking across the U.S., and especially in Florida, is strong. The industry is sound — banks are performing well, and criticized assets are low. Loans are being repaid as expected. We did see a slowdown in demand in the latter half of last year. The first half had strong demand, but then people started waiting to see what would happen with interest rates and the broader economy. There’s still a lot of uncertainty — whether rates will go up or down, whether inflation will rise or fall, and even employment trends remain unclear. With a change in administration, potential government spending cuts, the extension of tax cuts and tariffs, there are a lot of question marks in people’s minds. Many are adopting a wait-and-see approach. However, I believe the second half of this year could look quite different from the first.

How does Miami’s status as the financial hub of Latin America contribute to attracting and retaining clients from the region?

Our international customer base is a key part of our business. The U.S. remains the currency and market of choice globally, as it’s still viewed as one of the most stable economies. Many international investors, especially from Brazil, Colombia, Mexico and Canada, want to allocate part of their portfolios here. A significant number of our international clients come to Florida to invest in real estate or place funds in investment accounts. They want a bank they trust in the U.S. We also have a sister bank in Brazil, which strengthens our credibility and helps us attract international business. That said, non-resident clients face challenges, particularly high interest and exchange rates, which have slowed some investment activity. Once rates normalize, we expect to see more movement in this space. Additionally, with interest rates being high, some clients are hesitant to invest in bonds since U.S. Treasuries offer similar returns with lower risk. However, as rates decline, we anticipate a rebound in investment activity over the next six months.

Besides economic factors, what other significant challenges has Sunstate Bank faced over the past year?

One major challenge has been high real estate prices. In commercial real estate, when loans come up for repricing at higher rates, it can make investment returns less attractive. The good news is that rates have come down slightly, and if they continue to decline, we should be able to avoid a full-blown commercial real estate crisis. Miami, however, hasn’t been hit as hard as other markets because of continued migration to Florida. That said, affordable housing remains a concern, and Miami’s traffic congestion is another growing issue. Over time, we expect real estate prices to stabilize as interest rates decrease and the market picks up. Residential mortgage rates are also high, making homeownership more challenging for many buyers.

Since real estate is such a major driver in Miami’s economy, are there any other industries or sectors you expect to drive growth for Sunstate Bank?

Retail real estate remains strong, especially in neighborhood retail centers—think drugstores, supermarkets, salons and other essential services. We’ve always been more focused on local retail spaces rather than large destination malls. We also do a lot of business in multifamily real estate, including investment properties and non-resident mortgages. However, the condo market in Miami has been affected by new regulations following the Surfside Champlain Tower collapse. With stricter and more frequent recertifications, some condo valuations are expected to decline, which has led some owners to sell their buildings rather than invest in expensive renovations. The governor has been working on addressing these issues, but for now, it remains a challenge.

Another concern is Florida’s insurance market. Wind insurance costs have skyrocketed, making it difficult for some buyers to obtain loans. Some borrowers are even opting to insure only the land value and forgo coverage on the actual structure, which presents additional risks.

Considering the wide range of products and services Sunstate Bank offers, which ones do you see driving the most growth over the next couple of years?

Commercial real estate will continue to be a key focus. In addition, we recently launched a wealth management division to serve clients looking to invest in the markets. We also manage a large custody and safekeeping portfolio, which has been growing steadily. Clients can take out reverse repurchase (repo) loans against their investments, allowing them to leverage their portfolios further. Additionally, we are highly focused on small businesses—providing operating accounts, deposit services and small business lending, including working capital lines of credit. These areas will remain central to our strategy moving forward.

How is Sunstate Bank leveraging technology and innovation to enhance customer experience and streamline operations?

We’ve been working closely with fintech companies and are even exploring a Banking-as-a-Service (BaaS) model. We’re also collaborating with our core banking vendor to enhance digital banking solutions. The reality is that customers have different preferences— some still visit branches, while others do everything online. Our goal is to ensure a seamless digital experience for those who prefer online banking. We know that if we don’t get it right the first time, we may lose potential customers. That’s why we actively listen to feedback and continuously refine our digital offerings.

What are your top priorities for the bank moving forward?

Our focus remains on growth—expanding at a safe and sustainable pace while maintaining financial strength. Since we don’t have a large shareholder base and have never paid dividends, we can reinvest profits to strengthen the bank. Miami will continue to be a key market, though expansion here is different from places like Orlando, which has room to grow outward. In Miami, new development often means tearing down old buildings to make way for new projects, which slows expansion. That said, we are actively expanding beyond South Florida. We already have a lending office in Tampa and are planning to open one in Orlando. While we don’t have immediate plans to expand outside Florida, we see significant opportunities within the state.