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Business Observer Thursday, Apr. 9, 2009 13 years ago

A Second Chance

The banking industry shakeout is underway. Former top executives of once high-flying banks are seeking — and finding — new jobs.
by: Mark Gordon Managing Editor

The banking industry shakeout is underway. Former top executives of once high-flying banks are seeking — and finding — new jobs.

George Najmy's friends and former colleagues in banking like the new and improved Najmy: He's tan, he's fit, he's 15 pounds lighter and, most significantly, he is less stressed out than he has been in years.

The biggest reason for Najmy's transformation is simple: He got out of banking, specifically out of banking from the chief executive office. In many cases on the Gulf Coast, that job has gone from visionary thinker to regulator-pleaser, in lockstep with the industry upheaval.

Najmy's new career is that of a small business owner, as he recently bought Sarasota-based Family Healthcare Supply, a local neighborhood store catering to the region's elderly population. It sells everything from scooters to slippers.

“By education I grew up a banker,” says Najmy, whose father ran an auto body shop in Bradenton after the family moved to the area from Brooklyn, N.Y. “But by blood I've always been an entrepreneur.”

Najmy is one of three former bank CEOs on the Gulf Coast that can lay claim to an unwanted distinction: At one point they all ran community banks that are now no longer active institutions, the trio of Gulf Coast banks that have been shuttered by federal and state regulators since Aug. 1 when First Priority, a $260 million institution, was eliminated.

John Moran, former president and CEO of Cape Coral-based Riverside Bank of the Gulf Coast and Gerry Anthony, a longtime Bradenton-area community banker, complete the trio with Najmy.

Riverside, which had $539 million in assets and $424 million in deposits at the end of 2008, was shut down Feb. 13. Anthony is the co-founder and former top executive of Bradenton-based Freedom Bank, which was closed Oct. 31. Anthony was also a co-founder of Coast Bank, which was sold to suburban St. Louis-based First Banks for $12 million in December 2007 after the bank suffered through a period of massive loan losses, later determined to be the work of a bank official that committed mortgage fraud.

None of the executives were working for their respective banks when regulators seized control. All three have since moved on to other jobs.

Anthony earned his mortgage broker's license and joined a Bradenton-based firm that arranges financing for homeowners and small businesses. Moran works for a $3 million Fort Myers-based investment fund.

While Moran and Najmy shy away from talking about their past banking careers, especially Riverside and First Priority, Anthony, the senior member of the group, is more explicit. He is pointed about potential overreaching regulators, worried that too much oversight could be the demise of community banking.

Anthony, 65, also said it's a personal sting for him to drive around Bradenton and no longer see signs and branches for Freedom or Coast Bank. A former Freedom branch on Cortez Road in Bradenton has become an eyesore of overgrown bushes and shrubs. The Coast name that was once plastered to the top of a downtown Bradenton office tower is long gone.

“I spent a lot of time building up these brands,” says Anthony. “To see them no longer part of things is definitely disappointing.”

A consolidation move
To be sure, the recession currently choking the Gulf Coast banking industry hasn't only gripped C-suite occupants such as Najmy, Anthony and Moran. Dozens of tellers, branch managers and backroom employees have been laid off due to bank closings and cutbacks.

And other onetime high-level bank managers and executives are finding themselves out of work, too. For instance, Mike Worthington, who ran loan and credit offices for several banks in the Sarasota area for 20 years, was recently let go by
Tampa-based Florida Bank Group. Worthington, who ran the bank's new two-branch Sarasota operation, was one of six managers to be laid off by the bank in a consolidation move it made earlier this year.

Meanwhile, Tom Quinn, who ran the Naples-based South Florida operations for Fifth Third Bank for about three years, has found a new job: Quinn was recently hired as president and CEO of Shippensburg, Pa.-based Orrstown Financial Services, a $1 billion, 21-branch bank in central Pennsylvania.

Quinn, who left his Fifth-Third position last year, declined to be interviewed for this story through an Orrstown spokesman.

Even young bankers and financial industry executives on the Gulf Coast have found themselves on the wrong side of the current industry slide: Matthew Vuturo, a former strategic planning manager for the Tampa office of VR Mergers &
Acquisitions, a nationwide chain of independent business broker agencies, was laid off in January 2008.

Vuturo has taken a decidedly public approach to finding new work. He is one of 11 out-of-work bankers and financial professionals to be featured on Laid Off and Looking, a Wall Street Journal blog profiling the daily travails of the job search.

Vuturo writes occasional updates for the blog about his job-hunting, which so far as resulted in an overnight gig with FedEx in Tampa while he keeps on looking. Vuturo didn't respond to requests for comment.

'Lots of fun'
Moran, a veteran of 27 years in banking, didn't have as much trouble finding new work.

Indeed, it was only one month after Moran left Riverside, last July, when he chatted with Mark Northrop at a local chamber event. Northrop, a Fort Myers accountant, was looking for a third person to join his small friends and family investment fund that had recently changed names from CPA Financial Connections to the Kingdom Legacy Fund.

While Moran liked Northrop's description of the fund, such as its 'get-in, get-out' small gains mentality, he was initially unsure about the job.

After all, he had just finished an eight-year run at Riverside, where he grew the bank from $70 million to $630 million in assets at its peak and oversaw close to 200 employees. And although Northrop would like to grow the fund past its $3 million in assets, the current market brings obvious challenges.

But Northrop sold Moran on the core aspects of the job, which revolves around meeting with perspective clients and marketing the fund, which requires a minimum $100,000 investment. A little bit like meeting with potential bank customers.
Moran, 45, took the job and joined Northrop and a senior trader at the fund.

“I'm having a lot of fun,” says Moran. “Even with the financial markets in turmoil, this is still less stressful” than where Ihe was previously working.

Anthony also carries the less-stressed look of a former banker. He left Freedom last April in a move that he classified as not being fired but not really quitting either. He says the board felt that turning over the leadership of the bank to someone more experienced with regulators was a better move.

Anthony agreed and left the bank, although he didn't retire. Says Anthony: “I'm not independently wealthy and still feel like I have enough energy to go out and work.”

Anthony, much like Moran, also hit up business contacts to find his next stop. One contact was David Freed, a Bradenton mortgage broker trying to put his firm, Aim Mortgage, in position to capitalize on the new interest rates in the home-lending market. Freed also told Anthony he would like to grow the business-financing side of Aim and a former banker with a resume like Anthony's would be a perfect fit.

Anthony earned his mortgage broker's license in July. But despite the parallels to banking, Anthony says there has been a surprisingly big learning curve to the job.

Like Moran and Najmy, however, Anthony still feels invigorated by the change. That and like many others in the recession, he doesn't have another choice.

“A great deal of my retirement has been lost,” says Anthony. “I'm not the only one, but I'd like to be able to build that back up again.”

'Go signals'
Najmy spent last summer building back up his life again.

Running First Priority was the culmination of more than two decades in banking and financing that started with Barnett Bank in the early 1980s. In 2000 he bought and ran an accounting firm with his wife, three years before co-founding First Priority.

But after resigning from his position at the bank in February 2008, Najmy found himself out of work for the first time since he graduated from the University of Florida in 1984.

Najmy assigned himself some homework. He looked into buying a few different accounting firms and considered purchasing an insurance agency. He even looked into buying franchise rights to a 7-Eleven territory, an option he quickly turned down.

Then, in June, Najmy met with a business broker about Family Healthcare Supply. The owner, longtime Sarasota pharmacist Mike Pass, was seeking to sell that store but keep ownership of his other popular store in the same strip mall, Sarasota Family Pharmacy.

Najmy spoke with doctors, other pharmacists and friends and not one had something negative to say about the health care supply store, which has a solid, folksy, mom-and-pop reputation in the community. He liked that about 95% of the store's customers came from doctor referrals and orders, which provided a constant stream of customers.

Finally, a check on the store's books found similar positive results: It did about $1.2 million in sales in 2008, about 5% less than 2007 — which Najmy considered a win given the economy.

Says Najmy: “I was getting all go signals.”

Najmy closed on a deal to buy the store from Pass in November.

Najmy is taking a page from his bank managerial skills in running the business: Delegation. He is letting the store's 10 employees do what they do and trying to stay out of the way, a hands-off leadership style he also brought to banking.

One aspect Najmy doesn't spend too much time on these days is thinking back to his last years or so at First Priority, a demoralizing run of dealing with one issue after another.

“As the market took its tumble, the enjoyment [from banking] went away,” says Najmy. “It lost the fun of it.”

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