Longtime area banker Charlie Brown celebrated his recent 50th birthday with a big-time present to himself: He orchestrated the sale of the bank he founded and has run since 2006, Sarasota-based Insignia Bank.
Pompano Beach-based Stonegate Bank, in its 10th planned acquisition in the last seven years, bought Insignia Bank for $36.5 million, or $13.52 per share of Insignia common stock. The deal, announced Aug. 25, represents about 1.48 times Insignia's tangible book value through June 30, according to a statement.
The merger with Stonegate is a significant victory for Brown and Insignia's board and shareholders, given how most community banks founded in the mid-2000s struggled to overcome low capital levels and underperforming loans. Brown says the timing, for Insignia at least, was a key component to its decade-long success, in that it missed the first few years of the downturn. “We took our fair share of bumps and bruises,” says Brown, “but our timing was the most fortunate thing.”
When Stonegate called earlier this summer, Insignia had roughly $248 million in assets, $210 million in deposits and $188 million in loans. It has two branches in Sarasota County and loan production offices in Manatee and Pinellas counties.
Brown wasn't necessarily ready to sell the bank, given the ongoing recovery and the bank's clean loan balance sheet. Potential suitors, he says, “were constantly sniffing around” in the last two years. He checked into every one, but no offer worked, price and/or culture-wise, until Stonegate President and CEO Dave Seleski called in mid-July.
“We didn't think it was time to put our book out on the street,” Brown says. “But (Stonegate) was the right fit.”
Brown signed a two-year contract with Stonegate to run the bank's Charlotte-Manatee-Sarasota office. He recently spoke to the Business Observer about his career and the industry. Here are excerpts of the conversation.
Like father: Brown likes to joke he's an SOB — son of a banker. He was a teller in high school, and always wanted to be a banker. Says Brown: “I worked out of banking, for one day at a Wendy's, and I didn't like it.”
Family business: Brown joined his father in 1990 at Charlotte State Bank, part of the group of banks the Wauchula-based Crews family owns. The elder Brown was president, and the son oversaw an SBA program he grew into one of the largest in Florida.
Big shot: When Charlie Brown II retired in 1994, the bank promoted Brown III to president, when he was 29 years old. Brown remains grateful for the trust the Crews family had in him to run the bank at such a young age. “I kept my face out of all the newspaper advertisements,” says Brown. “I figured no customer would want to leave their money with a 29-year-old.”
Hire well: Brown says the biggest lesson he learned in a decade or so at the helm of Charlotte State Bank was to run a growing business you need to trust people around you to do their jobs. “I learned how to build a team and use all your resources,” he says. “I have some friends in banking today that still think they can do it all on their own.”
Quick change: The tenure at Charlotte State Bank was fast-paced, and due to several acquisitions, Brown went from overseeing 18 people to running a multi-faceted bank with 180 employees and $500 million in assets. “It was like running a new bank every two years,” he says. “You have to make a lot of changes to keep up with that.”
Rocket fuel: The decision to start a new bank was quickly rewarded: Brown and the Insignia board raised $25 million in 2006, when the average for a de novo bank was closer to $8 million. The bank could have surpassed $33 million in startup funding, adds Brown, but he decided to cap it at $25 million, not wanting the pressure to deploy so much capital, so soon. With the financial markets collapse two years away, it was a prudent move. “What was our rocket fuel,” he says, “became our safety net.”
Done deal: Brown, active in lobbying for the banking industry statewide and nationwide, knew for Seleski for years. And when Seleski called Brown about an acquisition, Insignia's board and top officials had already had other suitors, so the valuation process was simplified. “It was a very quick courtship,” Brown says. “We were up to speed about what we expected. And David said ours was the cleanest balance sheet he's seen,” in comparison to the other Stonegate acquisitions.
Up next: Brown says he's excited about his next career phase, where he will be a division chief for Stonegate, which had $2.4 billion in assets through June 30. Not being in charge, without the headaches of regulation and other top management issues, says Brown, will be a relief.
“I'm looking forward to playing almost pure offense,” says Brown. “It will be almost constant customer contact and business development.”
Gulf Coast focus
Stonegate Bank's acquisition of Sarasota-based Insignia Bank could be completed early next year. Here are some banks Stonegate has acquired on the Gulf Coast in recent years:
Date acquired Bank City Assets
October 2009 Partners Bank Naples $66 million
October 2009 Hillcrest Bank Naples $83 million
March 2011 Southwest Fort Myers $115 million
June 2011 First Commercial Tampa $99 million
Bank of Tampa Bay
January 2014 Florida Shores Venice $398 million
Bank — Southwest
Source: Stonegate Bank investor presentation, Aug. 3, 2016
— Mark Gordon