Coffee Talk (Tampa)

Coffee Talk (Tampa)

No capital shortage here

Why does a startup bank need $100 million?

Coffee Talk wanted to know, after the Nov. 29 announcement that a new super-community bank was coming to Tampa.

So we called Texas and talked to a fellow who is putting up the vast majority of that $100 million for the proposed American Commerce Bank.

"The benefit of planning a bank with a lot of capital is that you'll have income during the early formation," says Donald A. Adam, who would be chairman and chief executive of American Commerce.

Adam plans to put what money he doesn't need to open a headquarters in Westshore and making his first loans into U.S. Treasury securities.

"We're going to run some losses early on, but we won't go as deeply into the red as, say, a bank starting out with only $20 million," said Adam. "If you have excess capital, it helps to mitigate the losses you might have at the beginning."

Fair enough. But Coffee Talk can't help thinking back to a conversation earlier this year with a banking industry observer who was decrying the overcapitalization of some new Florida banks.

The observer was irritated at the proposed Seaside Bank & Trust in Orlando. It, too, wants to open with $100 million behind the teller cages.

"Quite frankly, there is not a banker in the world that can deploy that kind of capital out of the box," said our observer.

If Adam's fellow investors are worried, they're not letting on. His star-studded board of directors includes Tampa Bay area real estate developers Lee Arnold Jr. and Mel Sembler as well as University of South Florida President Judy Genshaft.

Of course, Adam isn't starting a bank just to get back single digits on his T-bills. He plans to open branches much faster than a normal de novo.

American Commerce's first stops outside of Tampa will be Orlando and Naples. After that, Adam would like to fill in the gap between the Bay area and Collier County by going into the Sarasota and Fort Myers markets.

Adam doesn't think there are more than eight or nine banks in all of Florida that will be as well-capitalized as his. He believes American Commerce will succeed by serving customers who get ignored by the Southeast regional banks dominating the state but need to borrow more than the community banks can handle.

A part-time Florida resident who will be spending more time with us in the future, Adam, 70, is not a novice at this.

After getting into the cable television business early, Adam bought more than a dozen failed Texas banks from federal regulators in the late 1980s. He combined and built them into a $3.5 billion-asset institution that he sold to Citigroup last year.

The price wasn't disclosed, but it was estimated to be somewhere between $700 million and $800 million.

Meanwhile, in Oldsmar...

At the other end of the de novo spectrum is the proposed Flagship Community Bank.

Frank Burke, the Oldsmar bank-in-organization's president and CEO, extended his deadline last month for raising capital, with the hope of meeting a minimum goal of $12 million.

Burke, who previously worked at the former Republic Bank in St. Petersburg, had raised $7.8 million before teaming with a Dallas investment bank to try to find the rest of the money from institutional investors.

Sure, $12 million is a long way from $100 million. But history has show that $12 million is sufficient to start a community bank in the Sunshine State.

Gift tips for business

Families and friends aren't the only ones exchanging holiday presents this time of year. Many business owners like to show their appreciation for their customers, too.

Just in time for your trip downtown or to the nearest shopping mall, the Bay Area Manufacturers Association is out with a gift-giving guide for top executives, courtesy of the Clearwater accounting and business-consulting firm of Price Donoghue Ridenour CPAs.

Here are a few of the dos and don'ts:

• Consider giving an item related to the person's job, hobby or interest.

• Don't be overly extravagant. You don't want to be suspected of bribery.

• Don't give a gift if you're involved in a bidding process.

The BAMA also advises checking with the personnel office of a potential recipient's company for any policies that prohibit gratuities.

Besides the benefits of being considered thoughtful, there are some slight tax advantages to spreading the kind of holiday cheer that is all wrapped up. A maximum of $25 a person in gift-giving expense can be deducted annually off a corporate income tax return.

What now at Findwhat?

Remember Findwhat.com?

Well, the Fort Myers paid-search Internet company is called Miva Inc. now. And there is rampant speculation around the dotcom space that Yahoo or Google might acquire Miva.

Fueling the rumors, Miva filed amended employment agreements for some of its top executives with the federal Securities and Exchange Commission on the Friday after Thanksgiving.

The new agreements include a clause that allows these executives to vest immediately their stock options, if there is a change in control of the company. The company amended employment agreements for Tom Wilde, senior vice president and general manager of Miva Media North America; Anthony Garcia, chief technology officer; and Sebastian Bishop, chief marketing officer.

Rich Duprey, a sharp-eyed contributor to the Motley Fool who spotted the filing and wrote about it on the personal-investing Web site, noted that change-of-control agreements now cover twice as many top Miva executives as before.

Expanding the number of people covered by severance plans in the event of a change of control of a company is usually a sign that a sale is on the horizon. Miva officials couldn't be reached for comment.

A sale may be a holiday treat for shareholders. They've seen their investment drop 73% over the last year. Recently, Miva shares were trading at $5.05, just above their 52-week low of $4.07 in April. But that was well below their high of $19.87 last December.