Not Just Talk

Not Just Talk

Banking by Janet Leiser | Senior Editor

An entrepreneur's chat with others about starting a bank turns into reality as the group hires a CEO and files an application with state regulators to form GulfShore Bank. It has raised several million dollars in the first couple weeks of its capital campaign.

Mario Garcia Jr.'s medical device company, Electron Medical Services Inc., was so successful, he wanted an alternate investment that would provide income in the future and possibly a second career.

Meet the chairman of the soon-to-be GulfShore Bank, which is expected to open its first office in South Tampa on June 1. That is, if all goes as planned with the Florida Office of Financial Regulation, which must approve the bank's charter application before it opens its doors.

Garcia decided there was a need for a community bank in the fall of 2005 after talking to friends and business colleagues. Before long, he agreed to invest $2 million in the proposed GulfShore bank, making him the S corporation's largest shareholder.

"We believe there's a huge need because most deals are controlled by out-of-state banks," Garcia says.

GulfShore Bank, whose first office will be on MacDill Avenue, isn't the only organization out to satisfy the demand for community banks. GulfShore is one of 21 want-to-be banks that filed de novo applications with state regulators in 2006. Ten are on Florida's Gulf Coast, between Tampa and Naples.

In addition to GulfShore, they are Anderen Bank of Tampa Bay, Clearwater; 1st Manatee Bank, Parrish; NorthStar Bank, downtown Tampa; CNLBank, Southwest Florida, Bonita Springs; USAmeriBank, Largo; Insignia Bank, Sarasota; Central Bank, Tampa; Sabal Palm Bank, Sarasota; and Gulf Coast Bank, Naples.

Garcia, 36, and the eight other directors of GulfShore Bank hired veteran banker Greg Manassa, 47, a Jacksonville native who organized First Bank of the Palm Beaches on Florida's East Coast prior to accepting the GulfShore position last summer.

Within the first couple weeks of its capital campaign, GulfShore raised about $3 million toward its goal of $13 million to $16 million in startup capital.

Manassa says there's a great need for community banks that offer personalized service, especially as national banks continue to gobble up Florida banks. He cited the recent mergers of Regions and AmSouth Bancorporation, plus CenterState Banks and Valrico State Bank, as well as the acquisition of Signature Bank in St. Petersburg by Whitney Holding Corp.

Even without the mergers and further consolidation, Manassa says, there's plenty of opportunity in the Tampa Bay area: The four-county MSA, with $45 billion in deposits, is second in the state to South Florida in deposits.

"Hillsborough County, our target market for now, has $18 billion in deposits," Manassa says. "Six million of that is with the big banks, Bank of America, AmSouth, SunTrust and Wachovia.

"The big banks are the ones that should be watching out for new community banks entering the market," he adds. "We could take 1%, 3% or 4% of their business and it wouldn't be a blip to them. They would be able to continue to succeed. I think there's enough business out there for us all to be successful and profitable and happy with what we're doing."

If GulfShore obtains only 1% of the $12 billion not in the big four banks, it will have $120 million in deposits, Manassa says. And $100 million is an important milestone for the smaller banks.

"I don't think that's going to be difficult to do," the CEO says. "There are a lot of deposits here. We don't have to get many of those to be very successful."

He declined to say when GulfShore was projected to hit $100 million or to discuss a branch expansion plan. But the bank's de novo application, filed with state regulators, shows the bank expects to hit $94.3 million in deposits in its third year of operation.

GulfShore will grow organically, he says, adding: "We're going to make sure we're strong, that we operate efficiently and that we're poised, ready and able to take advantage of an opportunity that may present itself."

The bank will focus on the professional-executive market and small- to medium-sized businesses, says Manassa, who defines that as companies with sales between $500,000 and $30 million.

"We think we can deliver a better product or service than the competition can," he says. "Although I'm not ignorant to the fact quite a few community banks are out there and they do pose some type of competition. We're after the disenchanted customers of the big banks. The ones who feel they're underserved."

GulfShore will not have a mortgage lending division, he says. But it will offer home loans to accommodate clients.

As for the housing slump, Manassa says, "It has an effect on every industry. But commercial real estate and the commercial business industry sector in Tampa are very strong. We have one of lowest unemployment rates in the state."

He also pointed out that Forbes magazine recently ranked the Tampa Bay MSA as the 13th best MSA in the country.

"There's an opportunity for continued growth," Manassa says. "If you look around the state, Tampa has weathered this downturn probably the best out of all the big cities. That's attributable to the diversity of its economic base."

While it can cost as little as $300,000 or more than $1 million to start a state bank, GulfShore plans to spend about $742,000, according to its application.

Much of that cost, an estimated $388,473, is for salaries, followed by $90,000 for legal costs and $85,000 for consultants, states GulfShore's application.

Documents show Manassa will earn $200,000 his first year as CEO, and the chief financial officer will earn $100,000. Total personnel costs in the first year of operation, including benefits and stock option expense, will be about $1.5 million.

GulfShore plans to build an 8,000- to 9,000-square-foot corporate headquarters in East Tampa within its first year or two of operation.

It plans to spend more than $70,000 annually to rent the MacDill avenue bank branch from two of its directors, John P. Baumann and John E. Carter. The building was formerly a bank branch and includes safes and drive-through lanes.

As for Manassa, he says he looks forward to opening day. For the past seven months, he has worked seemingly nonstop. He reads e-mails as early as 6 a.m. and as late as midnight most days, just trying to get caught up.

"There are so many different facets you have to bring together so it takes a lot of your time," he says.

REVIEW SUMMARY

Company. GulfShore Bank (in organization)

Industry. Community banking

Key. Bank will target professionals and small- to medium-sized businesses in Hillsborough County.

GulfShore's Directors

• Mario Garcia Jr., 36, the largest GulfShore shareholder with a $2 million investment, is chairman of the board. He created Electron Medical Services Inc. (EMSI), Tampa, a national medical device manufacturer, in 1995. Over the past five years, the 75-employee company has had an average annual growth rate of 50%. He also owns Validus Group, a real estate development/management company.

• John P. Baumann Jr., a CPA and principal of Baumann, Raymondo & Co., Tampa, is vice chairman. He worked for the Internal Revenue Service for 12 years and is a registered representative of Synergy Investment Group LLC.

• John E. Carter is an executive vice president and partner at Carter & Associates, one of the largest privately held commercial real estate firms in the Southeast United States. Over the past 12 months, Carter, who has an MBA from Harvard, has closed real estate transactions with $1.4 billion in value on 5.2 million square feet, for companies such as TECO, BayCare and Anchor Glass.

• Vincent J. Cassidy is president/CEO of Majesty Title Services. He previously spent 25 years with JP Morgan Chase & Co. in management, mostly in New York City.

• George A. Guida has more than 40 years experience in local banking, including The Central Bank of Tampa, Manufacturer's Bank of Florida and the Village Bank of Florida.

• Dohyun Kim is the administrative and financial manager of Lee Te Kim Lawn Care and Nursery started in Hillsborough by his father more than 30 years ago. The 78-acre nursery is one of the largest nurseries in the Tampa Bay area. Kim is also working on a law degree from Barry University.

• Mark E. Levey is CEO of DMLT LLC, which runs the Investment Cafe Limited Partner Reporting System, based in Brandon, with offices in New York, the Dominican Republic, India and California. Investment Cafe is a secure portal for more than 100,000 investors. Levey has created and built other software companies, including Accelerated Computer Technologies, which he sold prior to starting Investment Cafe in 2001.

• Stanley W. Plappert is the only GulfShore director from outside the Tampa Bay area. He's a private investor in Naples who focuses on real estate development. He spent most of his career in the insurance industry, including as chairman of Collier Insurance Services Inc. And he was a founding director of the Community Bank of Cape Coral.

• Armando O. Roche is chairman, CEO and founder of Roche Surety Inc. He has served as president of the Surety Agents Association, and he was a founding director of Heritage Bank of Florida.