Inter-national Flavor

Inter-national Flavor

Banking by Mark Gordon | Managing Editor

A diverse group of India-born hotel owners want in on the Gulf Coast community banking game.

When it comes to hotels, the Patels have things covered.

And that's no off-color joke: From Connecticut to Bradenton, with stops in suburban Philadelphia and Jacksonville, there's a group of at least eight different Patels who have an ownership stake in dozens of hotels, including several under the Holiday Inn Express, Best Western and Howard Johnson flags.

So with hotels established, a plethora of those Patels - most of them unrelated to each other - are now moving into a new world: Banking. Specifically, community banking at the northern end of the Gulf Coast.

Led by Raj Patel, owner of the Lake City Best Western, a group of 10 Patels constitutes 80% of the board of Central Bank, a community startup scheduled to open its first branch on the Pasco-Hillsborough county line by the end of January. "We are experts in the hotel business," says Raj Patel, 42. "Banking is new to us, but we are going to give it a try."

Raj Patel's brother, Nilesh Patel, 35, is moving from Philadelphia to Tampa to assist in the startup and serve on its board. The younger Patel has an MBA in finance from Temple University and previously worked for financial firms in suburban Philadelphia.

Turning a profit isn't the only endgame for the Patels in starting Central Bank. Nilesh Patel says if profit was their only motive, the group could have pooled their resources to start any kind of financial-based firm, including some that take less startup capital and not as much bureaucratic red tape. "This is a good business to be in," says Nilesh Patel, considering the role and perception of the industry's titans, both domestically and in India. "Bankers are the elite of society."

Board diversity

The board has a quirky diversity, both in geographical reach and educational backgrounds. For starters, Raj Patel comes to the bank from New Jersey, via India. In his homeland, he earned a bachelor's degree in mechanical engineering. And in New Jersey, he was a top environmental engineer with the state's EPA for 10 years, a role in which he reviewed and approved $3 billion worth of energy and power plant projects.

The board also includes: Shilen K. Patel, the son of Dr. Kiran Patel, founder of WellCare Health Systems and a well-known Tampa philanthropist who was recruited by Central Bank leaders but was already committed to NorthStar Bank, another Tampa startup; Jiten Patel, who owns a Holiday Inn Express in Bradenton and is in the process of attempting to build a hotel next to the Sarasota Bradenton International Convention Center; and Dinu Patel, a hotel owner in Branford, Ct., who was a senior criminologist with the Nebraska State police for five years.

The two board members without Patel as a last name are veteran bankers and financial professionals, both with past experience in the Gulf Coast. Outside board member Mike Holmes worked at Naples-based BancFlorida for 20 years, including a stint as executive vice president and CFO from 1982 to 1994. Central Bank president and CEO Marty Gladysz, 54, is an accountant by trade. He's worked in leadership roles with small banks and large companies, including serving as CFO of Palm Harbor-based Madison Bank and as Treasurer of Clearwater-based drugstore chain Eckerd Corp.

Back to school

Gladysz points out that despite the high number of Patels on the board, the bank isn't filing a charter to be a Hindu bank or have any ethnic affiliation.

He says the board members, like dozens of community bank boards before them, appreciate the value of community banking because "they are all borrowers." Holmes adds that many of the board members have experience in real estate and land development loans and deals, the bread-and-butter of a Gulf Coast startup bank.

Still, Gladysz and Holmes, who know each other from previous area banking jobs, concede the makeup of the board is unusual. And even though it's not why they signed on for the venture, they won't shy away from leaning on it when necessary.

Neither will any of the Patels. "Having the last name Patel doesn't mean we are going to bring in only Patels or Indians," says Nilesh Patel. But if it gets the bank an inside track on clients, that's perfectly acceptable.

Gladysz and Raj Patel make for an unusual banking pair. An attorney working for Patel in the early fact-finding phase of the bank introduced them last year. At the time, Gladysz was a 30-year finance guy looking for the right banking opportunity after previously working for a community bank bought by a regional one.

Patel concedes his banking experience prior to this venture was limited mostly to borrowing money. As owner of the Best Western near Interstate 75 in Lake City, for example, Patel has spent about $1 million over the past six years on room renovations and additions to the lobby and exercise rooms.

Recognizing their banking naivete, Raj and Nilesh Patel signed up for the three-year banking education program at the University of Florida's School of Banking, one of the top schools of its kind in Florida. The duo will start the program's third year in early 2007.

Slow growth

Patel says he began thinking about forming a bank as far back as 2000, after having conversations with his brother and a few other Patels at the India Festival, an annual Indian culture fair held at the University of South Florida's Sun Dome.

Taking it past the chatter stage first took money, and as of earlier this year, the group behind the startup had raised $12 million. It also took experienced bankers, such as Gladysz and Homes, as well as a mission and a strategy. The last step is proving to be especially important, as the Gulf Coast community banking landscape continues to grow more crowded.

The group leaned heavily on market analysis when choosing its location. The data, according to Raj Patel, showed the New Tampa area the group ultimately settled on for its debut branch had a median age of 34, a median family income of $95,000 and an average five-year deposit growth of 33%.

What's more, Gladysz says there are several new schools in the area the bank intends to utilize, both in terms of marketing to parents and teachers and as an avenue for community involvement. Plus, when the location was chosen, there were 28,000 homes planned to be built, a number that has since decreased due to the residential housing slowdown.

Even with a prized location, the Central Bank group realizes competition will be steep. One initial challenge in capturing those customers, Gladysz and Raj Patel say, will be in how the bank can be different than the others; it hopes to accomplish that by utilizing its small size to move quickly.

For example, Central Bank intends to offer the newest technological banking advances from the first day, features Gladysz says bigger banks normally have trouble with due to having multiple branches and decision-makers. Central Bank intends to provide business customers with check scanning, a way to send electronic images of checks as deposits, as opposed to delivering the money to the branch.

Still, the nimble, technology-driven strategy isn't without its own worries. The bank still has to provide all the banking basics, Gladysz says, and that takes money and manpower, with the focus on the former. "You can't do this in pieces," Gladysz says. "You have to open your doors with everything that a Bank of America can offer."

After that, Gladysz says Central Bank will initially be playing a different game than many of its banking brethren. It'll be one of slow-paced, conservative growth - there are currently no definitive plans for a second branch. "We don't have really aggressive growth plans. We won't be doing anything crazy," Gladysz says. "It's a low-key approach where we will try to focus on what the customer wants, as opposed to what we want."