Lori Johnston
Their newest venture, Calusa National Bank, opened in April in Punta Gorda, after they raised $21 million in start-up
capital. That’s nearly double the amount they had when they opened Tarpon Coast National Bank in 1998. The Charlotte County bank grew to four offices and was bought by Busey Bank in 2005 for $35.6 million.
Katz left after the acquisition while Albert stayed, but they continued to meet for lunch on Mondays.
"After some time, I realized I wasn’t thrilled doing what I was doing; he wasn’t thrilled doing what he was doing," Katz recalls. Eventually, they decided to "do this all over again."
Calusa National is one of several community banks that have opened in Southwest Florida since 2006, touting access to decision makers and other personal local touches, and motivated by the potential reward.
Panther Community Bank is scheduled to debut next month in Lehigh Acres. Its president and CEO, Karen Makowski, who has experience mostly at large regional banks, was attracted to being involved in a local bank "with high impact."
These and other reasons bankers share for their start-ups reflect the cyclical nature of community banks, which isn’t unique to our region. Founders anticipate running the organizations for five or six years, long enough to establish a franchise, then selling to somebody from another part of the country who would rather acquire than establish a branch, says veteran banker Bill Valenti, president and CEO of Florida Gulf Bank.
The cycle keeps churning, as he says, because the large bank might not retain the previous management, who get together and start a bank. "If I look back over last 30-plus years, I’ve seen that cycle time and time again," he says.
Eight banks have either opened or received charters to open in Southwest Florida since 2006, according to data from the Federal Deposit Insurance Corp. In addition to Calusa and Panther, they include National Bank of Southwest Florida in Charlotte County; Liberty Bank and Hillcrest Bank in Collier County; and Reliance Bank, Southwest Capital Bank, FineMark National Bank & Trust and Preferred Community Bank in Lee County.
Some of those banks likely started the application process up to two years ago, when the local economy was riding high on the real estate boom. Now, says Valenti, "I can’t think of a worse time to be doing it, with the economy."
Even though the softening of the real estate market affects loans and deposits, Katz says Calusa’s loan production has been exceptionally strong, and the bank is seeking an increase in deposits, which fund the loans.
Today’s banks are starting with a good deal more capital than five or 10 years ago, says Valenti, who opened Florida Gulf Bank with $7.2 million.
When Tarpon Coast opened with $11 million, its loan limit was $800,000, which was then a good-sized loan, Katz says. Now, new banks can loan up to $2 million, because they started with so much more capital. "We don’t have to turn people away," he says.
Needed: Investors
Panther aims to raise $17 million by the time it opens, and Makowski acknowledges it’s been challenging. People are hesitant to pull money out of the stock market, some local investors’ assets are tied up in the real estate market and Lehigh Acres "doesn’t have a lot of incredibly wealthy people sitting around looking for investments," she says.
With Calusa National, Katz and Albert had a much different experience than in their previous banks. Albert, a CPA, and Katz, an attorney, met in 1993 while working at Southwest Banks Inc., a Naples-based bank holding company. When Southwest Banks was purchased by F.N.B. Corp. of Pennsylvania, they headed to Charlotte County in 1997 to start Tarpon.
They knew how to do the paperwork to start a bank, but not how to raise capital. Their list of prospects who might invest around $100,000 was very short. After four months, they had raised $3 million, and then they aligned themselves with a Wisconsin investment-banking firm, which raised $8 million in just eight days. Tarpon Coast opened in 1998 with shareholders as far away as California, Alaska and Europe.
With Calusa, says bank president Katz, "We felt that we had earned our stripes and made enough contacts locally and been approached by enough people in local market, that we didn’t have to go out to the public market." They raised $21 million in six months from more than 200 stockholders, most of them in Charlotte County.
If at some point an acquisition play is made for Panther, it will be obligated to review it. "It’s really a question of, ‘Can we provide our investors a better return through a sale versus being in business?’" Makowski says.
Would the organizers of Calusa consider selling the bank at some point?
"That’s sort of the 10-year plan," Katz says.