Victory, at Last

Bill Sedgeman and his executive team at Community Bank of Manatee have turned the nearly impossible into a reality.

On Dec. 4, they announced a deal to bring $15 million in investment capital into the bank. The money, $11.5 million of it coming from an investment group led by a Brazilian-born commercial banker, will serve as a lifeline for the $252 million asset bank, says Sedgeman, the bank's chief executive.
Existing board members and shareholders made up the remaining $3.5 million in the investment.

The investment qualifies the 14-year-old bank to be labeled as well capitalized by federal regulators. Sedgeman says it also allows the bank, with five branches in Manatee and Hillsborough counties, to get back to lending as opposed to solely trying to fix ongoing loan issues.

“Our board and shareholders rallied to support our efforts to raise this capital,” says Sedgeman, “and are thrilled at the prospects of growing the bank. We are ready to lend millions to local businesses and families.”

Community Bank will be doing that lending with not only a new investment group, but a new president. The bank hired former Citizens Banking Corp. senior executive Bob Critchfield for that role. Critchfield spent 22 years with Michigan-based Citizens and its predecessor banks.

The successful capital-raising effort is a rare victory for a Gulf Coast community bank. Indeed, Paula Johannsen, managing director of the Tampa office of investment banking firm Carson Medlin, called a community bank's capital-raising efforts a “near impossibility” given the glut of local banks that need money and the scarcity of investors that have it.

Lakewood Ranch-based Community Bank of Manatee, however, found its answer in Marcelo Lima and Trevor Burgess. They are the lead investors in the $11.5 million in capital and have been appointed to the bank's board as a result of the investment.

Lima, who was named chairman of the bank's holding company, has invested in companies in his native Brazil, Mexico, Turkey, Russia and the United States. He started his career has a banker with ABN Amro Bank in Brazil and was later transferred to Chicago. Burgess, meanwhile, was an executive with Morgan Stanley in New York and London before teaming up with Lima last year.

“Bill Sedgeman has created a bank with a culture that provides sophisticated solutions to customers in a friendly responsive way,” says Burgess, who especially likes the bank's free Starbucks giveaways to customers at every branch. “We realized that this bank had all the right elements and just needed to get the word out to more customers.”

Still, Community Bank wasn't Lima and Burgess' first attempt at investing in a community bank. Burgess says he and Lima met with more than 30 banks over the last 18 months, some of which are based on the Gulf Coast. Most notably, the group was unsuccessful in its efforts to buy Cape Coral-based Riverside Bank of the Gulf Coast last year. Regulators shut down Riverside soon after that transaction failed.

And there were more hurdles to overcome even after Lima and Burgess agreed to a deal with Sedgeman, as it took almost four months for regulators to approve the investment. Burgess is confident that his and Lima's persistence will pay off.

Says Burgess: “We hope the community views this as a real vote of confidence...”

— Mark Gordon