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Coffee Talk
Business Observer Friday, May 1, 2009 11 years ago

Bank regulators in deep denial

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Regulators don't have to deny anyone's right to open a new bank. Apparently, all they have to do is give you the big run-around and hope you go away.

Regulators don't have to deny anyone's right to open a new bank. Apparently, all they have to do is give you the big run-around and hope you go away.

Unfortunately, that seems to have been what happened to First National Bank of the Gulf Coast in Naples. Established by veteran bankers Gary Tice and Garrett Richter, the proposed bank got mired in regulatory limbo waiting for the green light to open their new bank.

You've got to wonder: If Tice and Richter can't get regulatory approval for a new bank, who can? In one of the toughest economic environments, the duo raised $37.8 million to start the new Naples bank. It's a remarkable feat, but not surprising considering their history. Readers will recall that the two men built First National Bankshares of Florida and sold it to Fifth Third Bank at the top of the market in 2005 for $1.6 billion.

Despite the fact that First National Bank filed its new-bank application months ago, Federal Deposit Insurance Corp. regulators kept asking for more information about Collier County. How are retail sales? How are home sales? What about commercial bankruptcies? Is the unemployment rate rising? What's going on with the other banks in Naples?

After a while, regulators don't have to spell out that they won't let any new banks open on the Gulf Coast, no matter how good a banker you are. You get the message when they keep throwing more homework at you.

So with the prospects of government purgatory for months or even years (no one really knows how long), Tice put together a deal with a newly formed bank in Lehigh Acres called Panther Community Bank. Technically, Panther is acquiring First National Bank, but because First National's capital base is so much bigger than Panther's $14 million, First National's shareholders will control the new entity.

The specific terms of the deal have not yet been disclosed and First National investors who are not directors or organizing members can choose not to proceed. (Tice says he's confident at least $27.8 million will opt in to the new deal).

It's a smart move. SunTrust veteran Karen Makowski runs Panther, which opened in September 2007. The small bank hasn't made any bad loans despite the fact that the institution is located in the heart of one of the communities hardest hit by foreclosures, FDIC data shows.

“We picked Panther because of the culture,” Tice says. “We love their balance sheet. We didn't care about any bank unless they had good asset quality, top management and it was a good quality workplace for their employees.”

The combined bank will have 65 employees and Tice will be chairman and chief executive officer and Richter will be president. Makowski's new role wasn't spelled out, but she will fill a “key role,” the bank says. The bank will be headquartered in Naples and will be called First National Bank of the Gulf Coast.

Tice says he doesn't expect any regulatory obstacles this time because Panther is already federally insured and it becomes a stronger institution with the capital Tice, Richter and other investors bring. Regulatory approval could come within 30 days, he says.

“No guarantees,” he adds.

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